California-Menlo Park-1430 O'Brien Drive Sublease - Menlo Business Park and DrugAbuse Sciences Inc.
SUBLEASE AGREEMENT
I. DEFINED TERMS:
BASE RENT MONTHLY: $4,500.00 (1,500 square feet @
$3.00 per rentable square foot)
BUILDING: 1430 O'Brien Drive, Menlo Park, CA
EFFECTIVE DATE: OCTOBER 1, 1998
EXPIRATION DATE: SEPTEMBER 30, 2000
LANDLORD: Menlo Business Park, Joint Venture, a
California general partnership
LEASABLE SQUARE FEET: 1,500 square feet
MASTER LEASE: That certain Lease dated March 21, 1988 as amended on
March 23, 1992, June 23, 1993 and April 10, 1997
between Menlo Business Park as Landlord, and ETAK,
Inc., as Tenant.
PERMITTED USES: General Office
PREMISES: That portion of Building 7 along with the
non-exclusive use of a pro-rata share of parking
spaces as shown on Exhibit "A" together with
shared use of the Common Areas
COMMENCEMENT DATE: OCTOBER 1, 1998
SUBLESSEE: Drug Abuse Sciences, Inc.
SUBLESSEE'S ADDRESS: 1430 O'Brien Drive, Suite E
Menlo Park, CA 94025
SUBLESSOR: ETAK, Inc.
SUBLESSOR'S ADDRESS: 1605 Adams Drive
Menlo Park, CA 94025
TERM: Twenty-four (24) months
EXHIBITS: EXHIBIT "A" - Premises
EXHIBIT "B" - Master Lease
EXHIBIT "C" - Landlord's Consent
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THIS SUBLEASE AGREEMENT ("SUBLEASE") is entered into as of the
Effective Date by and between Sublessor and Sublessee.
THE PARTIES ENTER this Sublease on the basis of the following facts,
understandings and intentions:
A. Sublessor is presently a lessee of the Premises in the Building
pursuant to the Master Lease by and between Landlord and Sublessor. A copy of
the Master Lease with all exhibits and addenda thereto, is attached hereto as
EXHIBIT "B".
B. Sublessor desires to sublease a portion of the Premises to Sublessee
and Sublessee desires to sublease a portion of the Premises ("SUBLEASE
PREMISES") from Sublessor on all of the terms, covenants and conditions
hereinafter set forth.
C. All of the terms and definitions in the Definitions Section are
incorporated herein by this reference.
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants and promises
of the parties, the parties hereto agree as follows:
1. SUBLEASE. Sublessor shall sublease to Sublessee, and Sublessee shall
sublease from Sublessor the Premises for the Term upon all of the terms,
covenants and conditions herein contained. In addition, Sublessor shall lease to
Sublessee, and Sublessee shall lease from Sublessor, any and all permanent
improvements ("IMPROVEMENTS") on the Premises constructed and/or owned by
Sublessor or Landlord, upon all of the terms, covenants and conditions herein
contained. As used herein, "PREMISES" shall include the Sublease Premises and
the Improvements.
1.1 ACCESS. Sublessee and Sublessee's employees, agent,
contractors and suppliers shall have the right at any time after the
Commencement Date to enter the Premises, at their sole risk. Sublessee shall
provide Sublessor, before such entry, with certificates of the insurance
required of Sublessee pursuant to the terms of this Sublease.
2. CONDITION OF PREMISES. As of the Effective Date, Sublessee
acknowledges that Sublessee shall have conducted Sublessee's own investigation
of the Premises and the physical condition thereof, including accessibility and
location of utilities, improvements, existence of hazardous materials, including
but not limited to asbestos, asbestos containing materials, polychlorinated
biphenyls (PCB) and earthquake preparedness, which in Sublessee's judgment
affect or influence Sublessee's use of the Premises and Sublessee's willingness
to enter this Sublease. Sublessee recognizes that Sublessor would not sublease
the Premises except on an "as is" basis (except painting and cleaning of carpet)
and acknowledges that Sublessor has made no representations of any kind in
connection with improvements or physical conditions on, or bearing on, the use
of the Premises. Sublessee shall rely solely on Sublessee's own inspection and
examination of such items and not on any representations of Sublessor, express
or implied. Sublessee further recognizes and agrees that neither Sublessor nor
Landlord shall be required to perform any work of construction, alteration or
maintenance of or to the Premises; provided, however, Sublessor shall deliver
the Premises to Sublessee in broom clean condition and in the same arrangement
and condition as the Premises now is, except that Sublessor shall remove on
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or before the Commencement Date all of Sublessor's furnishings (except those
furnishings noted in Addendum One) located on the Premises and shall repair
wall damage, touch up paint and shampoo carpets.
*Sublessee hereby acknowledges that the Premises is accessible only through a
ground floor entrance and that Premises is not accessible by elevator or other
handicapped accessible means.
3. SUBLEASE SUBJECT TO MASTER LEASE.
3.1 INCLUSIONS. It is expressly understood, acknowledged and
agreed by Sublessee that all of the other terms, conditions and covenants of
this Sublease shall be those stated in the Master Lease except as excluded in
Section 3.2 herein, modified as appropriate in the circumstances so as to make
such Articles, and any Sections contained therein, applicable only to the
subleasing hereunder by Sublessor of the particular Premises covered hereby.
Sublessee shall assume, be subject to, be bound by and comply with all of said
Articles and Sections of the Master Lease with respect to the Premises and shall
satisfy all applicable terms and conditions of the Master Lease for the benefit
of both Sublessor and Landlord, it being understood and agreed that wherever in
the Master Lease the word "Tenant" appears; for the purposes of this Sublease,
the word "Sublessee" shall be substituted, and wherever the word "Landlord"
appears, for the purpose of this Sublease, the word "Sublessor" shall be
substituted; and that upon the breach of any of said terms, conditions or
covenants of the Master Lease by Sublessee or upon the failure of Sublessee to
pay Rent or comply with any of the provisions of this Sublease, Sublessor may
exercise any and all rights and remedies granted to Landlord by the Master
Lease. In the event of any conflict between this Sublease and the Master Lease,
the terms of this Sublease shall control. It is further understood and agreed
that Sublessor has no duty or obligation to Sublessee under the aforesaid
Articles and Sections of the Master Lease other than to maintain the Master
Lease in full force and effect during the Term of this Sublease; provided,
however, that Sublessor shall not be liable to Sublessee for any earlier
termination of the Master Lease which is not due to the fault of Sublessor.
Whenever the provisions of the Master Lease incorporated as provisions of this
Sublease require the written consent to Landlord, said provisions shall be
construed to require the written consent of both Landlord and Sublessor.
Sublessee hereby acknowledges that it has read and is familiar with all the
terms of the Master Lease, and agrees that this Sublease is subordinate and
subject to the Master Lease and that any termination thereof without the fault
of Sublessor shall likewise terminate this Sublease.
3.2 EXCLUSIONS. The terms and provisions of the following
Sections and portions of the Master Lease are not incorporated into this
Sublease:
(i) As to the Master Lease: Sections 3 (definitions
of Commencement Date, Monthly Rent, Premises, Tenant's Proportionate Share of
Building Expenses, Tenant's Proportionate Share of Project Expenses and Term;
5.a; 7; 11.a; 16; 17.c; 19; 26; and 32.
3.3 TIME FOR NOTICE. The time limits provided for in the
provisions of the Master Lease for the giving of notice, making of demands,
performance of any act, condition or covenant, or the exercise of any right,
remedy or option, are amended for the purposes of this Sublease by lengthening
or shortening the same in each instance by five (5) days, as appropriate, so
that notices may be given, demands made, or any act, condition or covenant
performed, or any
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right, remedy or option hereunder exercised, by Sublessor or Sublessee, as
the case may be, within the time limit relating thereto contained in the
Master Lease. If the Master Lease allows only five (5) days or less for
Sublessor to perform any act, or to undertake to perform such act, or to
correct any failure relating to the Premises or this Sublease, then Sublessee
shall nevertheless be allowed three (3) days to perform such act, undertake
such act and/or correct such failure.
4. LANDLORD'S OBLIGATIONS. It shall be the obligation of Landlord to
(i) provide all services to be provided by Landlord under the terms of the
Master Lease and (ii) to satisfy all obligations and covenants of Landlord made
in the Master Lease. Sublessee acknowledges that Sublessor shall be under no
obligation to provide any such services or satisfy any such obligations or
covenants; provided, however, Sublessor, upon written notice by Sublessee, shall
diligently attempt to enforce all obligations of Landlord under the Master
Lease.
5. RENT.
5.1 BASE RENT. Upon execution hereof, Sublessee shall deliver
the first MONTHS Base Rent to Sublessor, to be applied against Sublessee's
obligation for Base Rent for the month of OCTOBER, 1998. Sublessee shall pay to
Sublessor the Base Rent in advance on the first day of each month of the Term,
commencing on the Commencement Date. In the event the first day of the Term
shall not be the first day of a calendar month or the last day of the Term is
not the last day of the calendar month, the Base Rent shall be appropriately
prorated based on a thirty (30) day month. All installments of Base Rent shall
be delivered to Sublessor's Address, or at such other place as may be designated
in writing from time to time by Sublessor, in lawful money of the United States
and without deduction or offset for any cause whatsoever.
5.2 BUILDING EXPENSES AND PROJECT EXPENSES. Sublessor shall be
responsible for all costs and expenses of every kind and nature which may be
imposed, pursuant to the Master Lease including, but not limited to, additional
rent, operating costs, and tax costs, all as defined in the Master Lease.
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6. USE. The Premises is to be used for the Permitted Uses, and for no
other purpose or business without the prior written consent of Landlord and
Sublessor. In no event shall the Premises be used for a purpose or use
prohibited by the Master Lease.
7. REPAIRS AND MAINTENANCE. Sublessor shall be responsible for
maintaining the Buildings in good operation condition and repair and for
providing the following services and utilities: garbage collection, HVAC
maintenance and repair, and general building maintenance. Sublessee shall, at
Sublessee's sole expense, repair any area damaged by Sublessee, Sublessee's
agents, employees and visitors. Sublessee acknowledges that Sublessor is under
no duty to make repairs or improvements to the Premises, other than those
specifically listed in Addendum One, and Sublessee hereby waives any right it
may have at law or in equity to enforce the same. Notwithstanding the foregoing,
to the extent Landlord is obligated under the Master Lease to make any repairs
in or to the Premises, Sublessor, upon written notice by Sublessee, shall
diligently attempt to enforce such obligation of Landlord.
8. ASSIGNMENT. Sublessee shall not assign this Sublease or further
sublet any portion of the Premises, or mortgage, pledge, hypothecate, license,
or in any manner transfer its interest in the Premises or this Sublease.
9. DAMAGE AND DESTRUCTION.
9.1 TERMINATION OF MASTER LEASE. If the Premises is damaged or
destroyed and Landlord or Sublessor exercises any option either may have to
terminate the Master Lease, if any, this Sublease shall terminate as of the date
of the termination of the Master Lease.
9.2 CONTINUATION OF SUBLEASE. If the Master Lease is not
terminated following any damage or destruction as provided above, this Sublease
shall remain in full force and effect. Sublessee shall be obligated to repair
the Premises to substantially the condition it was in prior to such damage or
destruction to the extent that insurance proceeds exist to cover the cost of
such repairs, provided, however, (i) that Sublessor shall diligently enforce any
obligation of Landlord to rebuild the Premises in accordance with the Master
Lease; and (ii) Sublessor shall make available to Sublessee insurance proceeds
Sublessor receives as a result of such damage or destruction limited to
Sublessee's actual out of pocket expenses.
10. EMINENT DOMAIN.
10.1 TOTAL CONDEMNATION. If all of the Premises is condemned
by eminent domain, inversely condemned or sold in lieu of condemnation, for any
public or a quasi-public use or purpose ("CONDEMNED" or "CONDEMNATION"), this
Sublease shall terminate as of the date of title vesting in such proceeding, and
Base Rent shall be adjusted to the date of termination.
10.2 PARTIAL CONDEMNATION. If any portion of the Premises is
Condemned, and Sublessor exercises any option to terminate the Master Lease,
this Sublease shall automatically terminate as of the date of the termination of
the Master Lease. If this Sublease is not terminated following any such
Condemnation, this Sublease shall remain in full force and effect and Sublessor
shall promptly restore the Premises to the extent of any Condemnation proceeds
recovered by Sublessor and, in addition, Sublessor shall diligently enforce any
rights under the Master Lease to require Landlord to rebuild the Premises. Base
Rent shall be equitably adjusted
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to take into account interference with Sublessee's ability to conduct its
operations on the Premises as a result of the Premises being Condemned.
Sublessee hereby waives the provisions of California Code of Civil Procedure
Section 1265.130 permitting a court of law to terminate this Sublease.
10.3 SUBLESSEE'S AWARD. Subject to the provisions of the
Master Lease, Sublessee shall have the right to recover from the condemning
authority, but not from Sublessor, such compensation as may be separately
awarded to Sublessee in connection with costs and removing Sublessee's
merchandise, furniture, fixtures, leasehold improvements and equipment to a new
location.
11. INSURANCE. All insurance policies required to be carried by
Sublessee, pursuant to the Master Lease, shall contain a provision whereby
Sublessor and Landlord are each named as additional insureds under such
policies.
12. END OF TERM. At least two months prior to the expiration of the
Sublease, Sublessor and Sublessee shall determine whether Sublessee, or the
Landlord intends to require restoration, repair, or removal of any items
installed, modified, or damaged by Sublessee during the Term. If such
restoration or repair is required, Sublessee shall promptly and diligently
undertake such action and complete such work to Sublessor's reasonable
satisfaction of or before the Expiration Date. Upon the expiration of the Term
or sooner termination of this Sublease, Sublessee shall return the Premises to
Sublessee broom clean, in substantially the same condition as existed on the
Commencement Date, reasonable wear and tear excepted.
13. SECURITY. Sublessee acknowledges that Sublessor has no obligation
or responsibility to Sublessee, under this Sublease, for security for the
Premises. Sublessee shall take all necessary and appropriate measures to
safeguard the Premises.
14. MISCELLANEOUS.
14.1 ENTIRE AGREEMENT. This Sublease contains all of the
covenants, conditions and agreements between the parties concerning the
Premises, and shall supersede all prior correspondence, agreements and
understandings concerning the Premises, both oral and written. No addition or
modification of any term or provision of this Sublease shall be effective
unless set forth in writing and signed by both Sublessor and Sublessee.
14.2 CAPTIONS. All captions and headings in this Sublease
are for the purposes of reference and convenience and shall not limit or expand
the provisions of this Sublease.
14.3 LANDLORD'S CONSENT. This Sublease is conditioned upon
Landlord's written approval of this Sublease on or before the Commencement
Date. If Landlord refuses to consent to this Sublease, this Sublease shall
terminate and neither party shall have any continuing obligation to the other
with respect to the Premises.
14.4 AUTHORITY. Each person executing this Sublease on
behalf of a party hereto represents and warrants that he or she is authorized
and empowered to do so and to thereby bind the party on whose behalf he or she
is authorized and empowered to do so and to thereby bind the party on whose
behalf he or she is signing.
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14.5 ATTORNEYS' FEES. In the event either party shall
bring any action or proceeding for damages or for an alleged breach of any
provision of this Sublease to recover rents, or to enforce, protect or
establish any right or remedy hereunder, the prevailing party shall be entitled
to recover reasonable attorneys' fees and court costs as part of such action or
proceeding.
14.6 BROKER. Each party hereto represents to the other
that it has not had any dealings with a broker in connection with this Sublease
other than Tarlton Properties, Inc. Each party indemnifies the other and agrees
to hold the other party harmless from and against any and all liabilities or
expenses, including attorneys' fees and costs, arising out of or in connection
with claims made by any broker for commissions or fees resulting from this
Sublease.
15. HOLDING OVER. Unless an agreement for a Sublease extension has
been reached and subject to Sublessor's and Landlord's prior approval of any
holdover, such holdover shall be on a month to month basis terminable by either
party upon thirty days (30) written notice to the other. In such event, Base
Rent shall be increased to one hundred twenty five percent (125%) of the Base
Rent payable during the last month of the subleased Term. If Sublessor or
Landlord does not approve holdover, Sublessee shall be in violation of the
Sublease if Sublessee has not vacated the Subleased Premises at the end of the
Term in the manner required by the Sublease.
16. SECURITY DEPOSIT. Sublessee shall deposit with Sublessor the sum
of Nine Thousand dollars ($9,000.00) as a Security Deposit for the full and
faithful performance of every provision of this Sublease to be performed by
Sublessee. If Sublessee defaults with respect to any provision of this
Sublease, Sublessor may apply all or any part of the Security Deposit for the
payment of any Rent or other sum in default, the repair of such damage to the
Premises or the payment of any other amount which the Sublessor may spend or
become obligated to spend as outlined in Section 7 of the Lease.
IN WITNESS WHEREOF, the parties hereto have executed two (2) or more
copies of this Sublease, effective as of the Effective Date.
Sublessor Sublessee
ETAK, Inc. Drug Abuse Sciences, Inc.
By: /s/ Louis F. Corrado By: /s/ Stanley A. Kaplan
-------------------------------- --------------------------
Print Name: Louis F. Corrado Stanley A. Kaplan
Its: Director, HR & General Affairs Its: President & CEO
---------------------------------- ------------------
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EXHIBIT A
PREMISES
MENLO BUSINESS PARK BUILDING #7
SKETCH OF PROPERTY.
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EXHIBIT B
MENLO BUSINESS PARK
STANDARD FORM LEASE
by and between
MENLO BUSINESS PARK and PATRICIAN ASSOCIATES, INC.
("Landlord")
and
ETAK, INC.
("Tenant")
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LEASE
TABLE OF CONTENTS
PARAGRAPH Page
--------- -----
1. PARTIES...............................................................3
2. PREMISES..............................................................3
3. DEFINITIONS...........................................................3
(a) Alterations.................................................3
(b) Anticipated Commencement Date...............................3
(c) Building....................................................3
(d) Building Expenses...........................................3
(e) CC&R's......................................................4
(f) City........................................................4
(g) Commencement Date...........................................4
(h) County......................................................4
(i) HVAC........................................................4
(j) Interest Rate...............................................4
(k) Landlord's Agents...........................................4
(l) Lot 7.......................................................4
(m) Monthly Rent................................................4
(n) Outside Area................................................4
(o) Premises....................................................4
(p) Project.....................................................4
(q) Common Area Expenses........................................4
(r) Real Property Taxes.........................................5
(s) Reference Rate..............................................5
(t) Rent........................................................5
(u) Security Deposit............................................5
(v) Sublease....................................................5
(w) Subrent.....................................................5
(x) Subtenant...................................................5
(y) Tenant Improvements.........................................5
(z) Tenant Improvement Amounts..................................5
(aa) Tenant's Personal Property.................................6
(bb) Tenant's Proportionate Share of Building Expenses..........6
(cc) Tenant's Proportionate Share of Common Area Expenses.......6
(dd) Term.......................................................6
(ee) Termination Date...........................................6
4. LEASE TERM............................................................6
(a) Term........................................................6
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(b) Commencement Date...........................................6
(c) Commencement Date Memorandum................................6
(d) Tenant Delays...............................................6
(e) Early Entry.................................................7
(f) Termination.................................................7
(g) Options to Extend...........................................7
5. RENT..................................................................8
(a) Monthly Rent................................................8
(b) Adjustments.................................................8
(c) Additional Rent.............................................9
(d) Prorations..................................................9
6. INTEREST AND LATE PAYMENT CHARGES.....................................9
7. SECURITY DEPOSIT.....................................................10
8. HOLDING OVER.........................................................10
9. TENANT IMPROVEMENTS..................................................11
10. CONDITION OF PREMISES...............................................11
11. USE OF THE PREMISES.................................................12
(a) Tenant's Use...............................................12
(b) CC&R's.....................................................12
(c) Compliance.................................................12
12. QUIET ENJOYMENT.....................................................13
13. ALTERATIONS.........................................................13
(a) Permitted Alterations......................................13
(b) Notice.....................................................14
14. SURRENDER OF THE PREMISES...........................................15
15. REAL AND PERSONAL PROPERTY TAXES....................................15
(a) Payment by Tenant..........................................15
(b) Tax on Improvements........................................16
(c) Proration..................................................16
(d) Payment on Expiration of Term..............................16
(e) Personal Property Taxes....................................16
(f) Failure to Pay.............................................16
16. UTILITIES AND SERVICES..............................................16
17. BUILDING EXPENSES...................................................17
(a) Definition.................................................17
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(b) Payment....................................................18
(c) Tenant's Repairs and Maintenance...........................18
(d) Landlord's Repairs and Maintenance.........................18
(e) Waiver and Landlord Liability for Repairs..................19
18. COMMON AREA EXPENSES................................................19
(a) Common Areas...............................................19
(b) Use of Common Areas........................................19
(c) Specific Provisions re: Vehicle Parking....................20
(d) Maintenance of Common Areas................................20
(e) Tenant's Share and Payment.................................21
19. PARKING.............................................................21
20. [THIS PARAGRAPH INTENTIONALLY LEFT BLANK]...........................21
21. [THIS PARAGRAPH INTENTIONALLY LEFT BLANK]...........................21
22. LANDLORD'S RIGHT TO ENTER THE PREMISES..............................21
23. SIGNS...............................................................22
24. INSURANCE...........................................................22
(a) Indemnification............................................22
(b) Tenant's Insurance.........................................23
(c) Land Insurance.............................................23
(d) Deductibles................................................24
(e) Certificates...............................................24
(f) Increased Coverage.........................................24
(g) Co-Insurer.................................................24
(h) Insurance Requirements.....................................24
(i) Landlord's Disclaimer......................................25
(j) Failure to Pay.............................................25
25. WAIVED OF SUBROGATION...............................................25
26. DAMAGE OR DESTRUCTION...............................................25
(a) Landlord's Obligation to Rebuild...........................25
(b) Landlord's Right to Terminate..............................25
(c) Limited Obligation to Repair...............................26
(d) Abatement of Rent..........................................26
(e) Uninsured Casualty.........................................27
27. CONDEMNATION........................................................27
(a) Total Taking -Termination..................................27
(b) Partial Taking.............................................27
(c) No Apportionment of Award..................................28
(d) Temporary Taking...........................................28
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(e) Sale Under Threat of Condemnation..........................28
28. ASSIGNMENT AND SUBLETTING...........................................28
(a) Landlord's Consent.........................................28
(b) Sublease Form..............................................29
(c) No Waiver..................................................29
(d) Information to be Furnished................................29
(e) Landlord's Alternatives....................................29
(f) Proration..................................................30
(g) Executed Original..........................................30
(h) Transfer to Purchaser......................................30
(i) Tenant Affiliates..........................................30
29. DEFAULT.............................................................31
(a) Tenant's Default...........................................31
(b) Remedies...................................................32
(c) Landlord's Default.........................................33
30. SUBORDINATION.......................................................34
31. NOTICES.............................................................34
32. ATTORNEYS'FEES......................................................35
33. ESTOPPEL CERTIFICATE................................................35
34. TRANSFER OF THE PREMISES BY LANDLORD................................36
35. LANDLORD'S RIGHT TO PERFORM TENANT'S COVENANTS......................36
36. TENANT'S REMEDY.....................................................36
37. MORTGAGE PROTECTION.................................................36
38. BROKERS.............................................................36
39. ACCEPTANCE..........................................................37
40. RECORDING...........................................................37
41. [THIS PARAGRAPH INTENTIONALLY LEFT BLANK]...........................37
42. MODIFICATIONS FOR LENDER............................................37
43. SEWER FEES..........................................................37
44. GENERAL.............................................................37
(a) Captions...................................................37
(b) Executed Copy..............................................37
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(c) Time.......................................................37
(d) Separability...............................................38
(e) Choice of Law..............................................38
(f) Gender; Singular, Plural...................................38
(g) Binding Effect.............................................38
(h) Waiver.....................................................38
(i) Entire Agreement...........................................38
(j) Authority..................................................38
(k) Contingency................................................39
(l) Release....................................................39
(m) Exhibits...................................................39
(n) Lease Summary..............................................39
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LEASE SUMMARY
Lease Date: March 21, 1988
Landlord: Menlo Business Park and Patrician Associates, Inc.
For Menlo 12121 Wilshire Blvd.
Business Park: Suite 512
Los Angeles, California 90025
Attn: John O. Lewis
With a copy to: The Lewis & Tarlton Company
P.O. Box 1212
Los Altos, California 94023
Attn: Lorrin C. Tarlton
For Patrician Bankers Life Building
Associates, Inc.: Fifth Floor
711 High Street
Des Moines, Iowa 50307
Address of Tenant:
Prior to 1455 Adams Drive
Commencement Date: Menlo Park, California
After Commencement 1430 O'Brien Drive, Suite A
Date: Menlo Park, California
Contact: Matt Pitchon Telephone: (415) 328-3825
Premises: Approximately 25,775 sq. ft. of Building No. 7
(consisting of 18,222 sq. ft. on the ground floor
and 7,553 sq. ft. on the mezzanine level)
Building Address: 1430 O'Brien Drive, Suite A
Menlo Park, California
Square Footage of Building No. 7: 63,390 sq. ft.
Square Footage of all leasable Lots within the Project: 2,060,693
Tenant's Percentage Share of Common
Area Expenses: 25.775 = 40.66%
------
63,390
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Tenant's Percentage Share
of Project Expenses: 153,594 x 40.66% = 3.03%
----------------
2,060,693
Anticipated Commencement Date: May 15, 1988
Term: Thirty-Six (36) months, with one (1) 2-year option
to extend
Monthly Rent: $16,622.64/month, triple net, with annual CPI
adjustments
Security Deposit: $30,000.00
Signage: One monument sign in common with other tenants of
Building No. 7, per Menlo Park Signage Ordinance; one
(1) identification sign to be painted, at Tenant's
sole expense, on the glass frontage of the Premises.
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LEASE
1. PARTIES. THIS LEASE (the "Lease"), dated ____________________
____________________, 1988, is entered into by and between MENLO BUSINESS PARK,
a California general partnership, whose address is 12121 Wilshire Boulevard,
Suite 512, Los Angeles, California 90025, and PATRICIAN ASSOCIATES, INC., a
California corporation, whose address is Fifth Floor, Bankers Life Building, 711
High Street, Des Moines, Iowa 50307 ("Landlord") and ETAK, INC., a California
corporation, whose address is 1455 Adams Drive, Menlo Park, California
("Tenant").
2. PREMISES. Landlord hereby leases to Tenant and Tenant hereby
leases from Landlord those certain premises (the "Premises") consisting of
25,775 square feet of combined ground floor and mezzanine space in that certain
building ("Building") commonly known as 1430 O'Brien Drive containing a total
area of approximately 63,390 square feet, all as shown on EXHIBIT "A-1" attached
hereto, together with the right to use in common with the other tenants of the
Building the driveways and walkways for access thereto. Tenant shall have the
right to use the parking areas described in Paragraph 19 and shown on EXHIBIT
"A-1" hereto, and the Common Areas located within the Outside Areas of the
Project, as such terms are hereinafter defined, subject to the terms of this
Lease. Upon the Commencement Date (as hereinafter defined) or as soon thereafter
as is practicable, Landlord's engineer or architect shall enter the Premises for
the purpose of re-measuring the Premises. Upon completion of said
re-measurement, said engineer shall deliver to Landlord and Tenant certificates
which, for the purposes of this Lease, shall conclusively establish the area (in
square feet) of the Premises, at which time, Tenant's Proportionate Share of
Building Expenses (as hereinafter defined), Tenant's Proportionate Share of
Common Area Expenses (as hereinafter defined) and Tenant's proportionate share
of parking spaces contained in Lot 7 (as hereinafter defined) shall be adjusted
to reflect the findings of said engineer or architect.
3. DEFINITIONS. The following terms shall have the following
meanings in this Lease:
(a) "ALTERATIONS" shall mean any alterations,
decorations, additions or improvements made in, on or about the
Building or the Premises after the Commencement Date, including, but
not limited to, lighting, heating, ventilating, air conditioning and
electrical fixtures, pipes and conduits, partitioning, wall coverings,
cabinetry, carpeting and/or other floor covering, ceiling tile,
fixtures and carpentry installations.
(b) "ANTICIPATED COMMENCEMENT DATE" shall be May 15,
1988.
(c) "BUILDING" shall mean that certain building of
approximately sixty-three thousand three hundred ninety (63,390) square
feet the address of which is 1430 O'Brien Drive, Menlo Park,
California.
(d) "BUILDING EXPENSES" shall mean those expenses related
to the Building as defined by Paragraph 17 of this Lease.
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(e) "CC&R'S" shall mean those certain covenants,
conditions and restrictions recorded August 14, 1985, as Instrument No.
85082618, Records of San Mateo County, California, as the same are
amended from time to time.
(f) "CITY" shall mean the City of Menlo Park, State of
California.
(g) "COMMENCEMENT DATE" shall mean the first day of the
Lease as determined in accordance with Paragraph 4(b).
(h) "COUNTY" shall mean the County of San Mateo, State of
California.
(i) "HVAC" shall mean the heating, ventilating and air
conditioning system serving the Building.
(j) "INTEREST RATE" shall mean the "Reference Rate"
described below, but in no event greater than the maximum rate of
interest permitted by law.
(k) "LANDLORD'S AGENTS" shall mean Landlord's authorized
agents, contractors, partners, subsidiaries, directors, officers and
employees.
(l) "LOT 7" shall mean the legal lot containing 153,594
square feet of land area upon which the Building is situated.
(m) "MONTHLY RENT" shall mean the rent payable pursuant
to Paragraph 5(a), as adjusted from time to time pursuant to the terms
of this Lease.
(n) "OUTSIDE AREA" shall mean all areas and facilities
within the Project exclusive of the Premises and other portions of the
Project leased exclusively to other tenants. The Outside Area includes,
but is not limited to, striped parking areas, access and perimeter
roads, sidewalks, landscaped areas and similar areas and facilities.
Tenant's use of the Outside Areas shall be subject to the reasonable
rules and regulations established by Landlord from time to time.
(o) "PREMISES" shall mean the 25,775 square foot portion
of the Building (consisting of 18,222 square feet on the ground floor
and 7,553 square feet on the mezzanine level) for the exclusive use of
Tenant, as shown on EXHIBIT "A-1" hereto and non-exclusive access
rights to the Building and the use of 71 of the 177 parking spaces on
Lot 7.
(p) "PROJECT" shall mean that certain real Property, and
all improvements thereon, including the Building, other buildings, if
any, and related improvements, as shown on EXHIBIT "A-2" hereto.
(q) "COMMON AREA EXPENSES" shall mean those expenses
related to the Project as set forth in Paragraph 18 of this Lease.
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(r) "REAL PROPERTY TAXES" shall mean any form of tax,
assessment, license, fee, rent tax, levy, penalty (if a result of
Tenant's delinquency), real property or other tax (other than
Landlord's federal and state net income, gross receipts, estate,
succession, inheritance, or franchise taxes), now or hereafter imposed
by any authority having the direct or indirect power to tax or by any
city, county, state or federal government or any improvement district
or other district or division thereof, whether such tax or any portion
thereof: (i) is determined by the area of the Premises or any part
thereof or the rent and other sums payable hereunder by Tenant or by
other tenants of the Project, including, but not limited to, any gross
income or excise tax levied by any of the foregoing authorities with
respect to receipt of such rent or other sums due under this Lease;
(ii) is levied or assessed in lieu of, in substitution for, or in
addition to, existing or additional taxes with respect to the Project
or the Premises whether or not now customary or within the
contemplation of the parties; or (iii) is based upon any legal or
equitable interest of Landlord in the Project or the Premises or any
part thereof.
(s) "REFERENCE RATE" shall mean two percent (2%) above
the rate of interest as publicly announced by Wells Fargo Bank for
ninety (90) day unsecured loans to corporate borrowers with the highest
credit standing.
(t) "RENT" shall mean Monthly Rent plus the Additional
Rent defined in Paragraph 5(c).
(u) "SECURITY DEPOSIT" shall mean that amount held by
Landlord pursuant to Paragraph 7.
(v) "SUBLEASE" shall mean any transfer, sublease,
assignment, license or concession agreement, encumbrance or
hypothecation of this Lease or the Tenant's interest in the Lease or in
and to all or any portion of the Premises. If Tenant is a partnership,
a withdrawal or change of partners owning more than a fifty percent
(50%) interest in such partnership, or if Tenant is a privately held
corporation, any transfer of more than fifty percent (50%) of its
outstanding stock, shall constitute a transfer herein.
(w) "SUBRENT" shall mean consideration of any kind
received, or to be received, by Tenant from a Subtenant as a result of
its sublease.
(x) "SUBTENANT" shall mean the person or entity with whom
a Sublease agreement is proposed to be or is made.
(y) "TENANT IMPROVEMENTS" shall mean those certain
improvements to the Premises to be constructed pursuant to EXHIBIT "B".
(z) "TENANT IMPROVEMENT AMOUNTS" shall mean the
Additional Rent paid by Tenant to Landlord in order to compensate
Landlord for the cost of additional Tenant Improvements.
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(aa) "TENANT'S PERSONAL PROPERTY" shall mean Tenant's
removable trade fixtures, furniture, equipment and other personal
property in the Premises.
(bb) "TENANT'S PROPORTIONATE SHARE OF BUILDING EXPENSES"
shall mean the square footage of the Premises (25,775) divided by the
square footage of the Building (63,390) which equals 40.66%.
(cc) "TENANT'S PROPORTIONATE SHARE OF COMMON AREA
EXPENSES" shall mean the square footage of Lot 7 (153,594) times 40.66%
(62,451.3204) divided by the square footage of the leaseable Lots in
the Project (2,060,693) which equals 3.03%.
(dd) "TERM" shall mean the term of this Lease set forth in
Paragraph 4(a) as it may be extended pursuant to Paragraph 4(g) below.
(ee) "TERMINATION DATE" shall mean the date upon which
this Lease shall terminate pursuant to the terms of this Lease.
4. LEASE TERM.
(a) TERM. The Term of this Lease shall be for a
period of thirty-six (36) months from the Commencement Date.
(b) COMMENCEMENT DATE. The Commencement Date of
this Lease shall be the earliest occurring of the following dates:
(i) The date by which (A) the City has
approved the Tenant Improvements constructed pursuant to
EXHIBIT "B" in accordance with its building code, as evidenced
by its written approval of such Tenant Improvements in
accordance with the building permits issued for such Tenant
Improvements, and (B) the architect supervising the
construction of the Tenant Improvements has certified in
writing to Tenant and Landlord that Tenant Improvements
described in EXHIBIT "B" have been substantially completed in
accordance with the Plans approved by the parties; or
(ii) The date Tenant commences occupancy
of the Premises, for the purpose of commencing its business
therein in the ordinary course, with the written consent of
Landlord.
(c) COMMENCEMENT DATE MEMORANDUM. When the actual
Commencement Date is determined, the parties shall execute a
Commencement Date Memorandum setting forth such date in the form shown
in EXHIBIT "C".
(d) TENANT DELAYS. If the Commencement Date has been
delayed beyond the Anticipated Commencement Date due to "Tenant Delays"
as described in EXHIBIT "B", then Tenant shall pay to Landlord on the
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Commencement Date the sum calculated pursuant to the provisions of said
EXHIBIT "B".
(e) EARLY ENTRY. If Tenant is permitted to enter the
Premises prior to the Commencement Date for the purpose of inspection
of the work in progress, or for the fixturing of the Premises or for
any other purpose permitted in writing by Landlord, such early entry
shall be at Tenant's sole risk and subject to all the terms and
provisions set forth in Paragraph 12 of EXHIBIT "B".
(f) TERMINATION.
(i) Subject to delays due to causes beyond the
reasonable control of Landlord, Landlord shall use reasonable
speed and diligence in the construction of the Tenant
Improvements and shall use its commercially reasonable best
efforts to have the Premises ready for Tenant's occupancy on
or before the Anticipated Commencement Date; provided,
however, that nothing contained in this Lease shall be
construed to create a liability on the part of Landlord for
its failure, due to any cause other than the gross negligence
or willful misconduct of Landlord, to have the Premises ready
for occupancy on said date, as extended pursuant to the
provisions of Subparagraph 4(f)(ii) below.
(ii) Except as extended for the period of time
equal to any "Tenant Delays" as described in Subparagraph (d)
above, if the Commencement Date shall not have occurred before
six (6) months from the date hereof, either party, at its
option, and at no fault to the terminating party, may
terminate this Lease by giving thirty (30) days written notice
of its election to so terminate to the other party. If this
option is exercised by either party, this Lease shall be of no
further force or effect, and neither party shall have any
right or claim against the other except with respect to claims
of gross negligence or willful misconduct. Both parties hereby
agree to cooperate in good faith and with due diligence in
order to avoid the termination contemplated by this
Subparagraph 4(f)(ii), including the permission by Landlord to
allow Tenant to enter upon and occupy, on a reasonable rental
proration, those portions of the Premises which are complete
and which Tenant may occupy pursuant to applicable law.
(g) OPTIONS TO EXTEND. Landlord hereby grants Tenant one
(1) option (the "Option") to extend the Term for a period of two (2)
years (the "Extension Term"). The Option must be exercised, if at all,
by written notice from Tenant to Landlord delivered at least four (4)
months (or earlier if practicable) prior to the expiration of the
initial Term. All of the terms and conditions of this Lease shall
remain in effect during the Extension Term except for Monthly Rent,
which shall be as set forth below in Paragraph 5. Notwithstanding the
foregoing, Tenant shall not be permitted to exercise the Option if, on
the date of such exercise Tenant either (i) is in default under this
Lease or (ii) has elected to have the Mezzanine improved as set forth
in
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EXHIBIT "B". Notwithstanding anything contained in this Lease to the
contrary, in the event Tenant elects to have the Mezzanine
improved as set forth in EXHIBIT "B", Tenant's right to
exercise the Option shall thereupon cease and Landlord and Tenant
hereby agree that the Term of this Lease shall terminate three (3)
years from the date upon which such "Mezzanine improvements" are
completed.
5. RENT.
(a) MONTHLY RENT. Tenant shall pay to Landlord,
in lawful money of the United States, for each calendar month of the
Term, Monthly Rent in the amount of Sixteen Thousand Six Hundred
Twenty-Two and 64/100 Dollars ($16,622.64), subject to the adjustment
as provided in Paragraph 5(b) below, in advance, on the first day of
each calendar month of the Term, without abatement, deduction, claim,
offset, prior notice or demand. Tenant shall pay to Landlord Sixteen
Thousand Six Hundred Twenty-Two and 64/100 Dollars ($16,622.64), which
amount represents Monthly Rent payable for the first month of the Term
on or prior to the date of Tenant's occupancy of the Premises.
(b) ADJUSTMENTS.
(i) The Monthly Rent as set forth
hereinabove shall be increased effective on the yearly
anniversary of the Commencement Date of each year during the
Term of this Lease or the Extension Term, as the case may be,
in accordance with the percentage increase, if any, in the
Consumer Price Index - Urban Wage Earners and Clerical Works
(San Francisco-Oakland Area; Base: 1982-84=100) ("Index"), as
published by the United States Department of Labor, Bureau of
Labor Statistics. The Index for the month next preceding the
yearly anniversary of the Commencement Date of this Lease or
the Extension Term, as the case may be, shall be compared with
the Index for the like month of the previous year and the
Monthly Rent shall be increased and paid thereafter in
accordance with the percentage increase, if any, between such
Indices. In no event, however, shall the percentage increase
in any year during the Term of this Lease or the Extension
Term, as the case may be, be less than four percent (4%) or
greater than eight percent (8%) of the Monthly Rent in effect
for the immediately preceding year of the Term or the
Extension Term, as the case may be. Should said Bureau
discontinue the publication of the above Index, or publish the
same less frequently, or vary the method of calculation of
same, or alter the same in some other manner, then Landlord
shall adopt, at its sole discretion, a substitute index or
substitute procedure which reasonably reflects and monitors
comparable consumer prices.
(ii) In the event the "Costs" (as such term is
defined in Paragraph 5 of EXHIBIT "B") of designing and
constructing the Tenant Improvements exceed the Improvement
Allowance (as such term is
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defined in EXHIBIT "B") and all or any portion of such
excess is attributable to Tenant's "Changes in Plans" (as
provided in EXHIBIT "B"), the Monthly Rent shall be
increased by an amount equal to One and Five-Tenths Cent
($.015) multiplied by the dollar difference between the
Improvement Allowance and the final "Costs" of the Tenant
Improvements.
(iii) In the event Tenant elects to have the
"mezzanine space" contained in the Premises improved as
provided in EXHIBIT "B", the Monthly Rent shall be increased,
upon completion of such improvements, by an amount
equal to One and Five-Tenths Cent ($.015) multiplied by the
cost of designing and constructing said improvements. If the
cost of said improvements exceeds One Hundred Eighty-Eight
Thousand Eight Hundred Twenty-Five Dollars ($188,825.00),
Tenant shall pay to Landlord within thirty (30) days of
invoice, that portion of the actual cost that exceeds One
Hundred Eighty-Eight Thousand Eight Hundred Twenty-Five
Dollars ($188,825.00).
(c) ADDITIONAL RENT. All amounts required to be paid by
Tenant under this Lease (exclusive of Monthly Rent), including, without
limitation, Real Property Taxes payable pursuant to Paragraph 15
hereof, repair and maintenance charges payable pursuant to Paragraph 17
hereof and insurance premiums payable pursuant to Paragraph 24 hereof
shall constitute Additional Rent.
(d) PRORATIONS. If the Commencement Date is not the first
(1st) day of a month, or if the Termination Date of this Lease is not
the last day of a month, a prorated installment of Monthly Rent shall
be paid for the fractional month during which this Lease commences or
terminates.
6. INTEREST AND LATE PAYMENT CHARGES. In the event Tenant fails
to make any payment to Landlord when due, such payment shall accrue interest
from the date such payment was due, until paid, at the Interest Rate, as defined
in Paragraph 3(i) above. In addition, Tenant acknowledges that late payment by
Tenant to Landlord of Rent and other charges provided for under this Lease will
cause Landlord to incur costs not contemplated by this Lease, the exact amount
of such costs being extremely difficult or impracticable to fix. Such costs
include, but are not limited to, processing and accounting charges, and late
charges that may be imposed on Landlord by the terms of any encumbrance and
notes secured by any encumbrance covering the Premises, or late charges and
penalties due to late payment of Real Property Takes due on the Premises.
Therefore, if any installment of Rent or any other charge due from Tenant is not
received by Landlord within ten (10) days after receipt of written notice that
such payment is due (the "Grace Period"), then, commencing with the second such
occurrence, Tenant shall pay to Landlord an additional sum equa1 to six percent
(6%) of the amount overdue as a late charge for every month or portion thereof
that the Rent or other charges remain unpaid. The parties agree that this late
charge represents a fair and reasonable estimate of the costs that Landlord will
incur by reason of the late payment by Tenant. Acceptance of any late charge
shall not constitute a waiver by Landlord of Tenants default with respect to the
overdue amount, and shall not prevent Landlord from exercising any of the other
rights and remedies available to Landlord for any
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other breach of Tenant under this Lease. Notwithstanding the foregoing, upon
the fifth (5th) occurrence during the Term of this Lease of Tenant's failure
to pay Monthly Rent or Additional Rent within ten (10) days after the date
when due, Landlord may condition its acceptance of future Rent upon a
requirement that Tenant concurrently execute an amendment to this Lease which
provides that Monthly Rent for the next twelve (12) months of the Term of
this Lease shall be made in quarterly installments, in advance, in an amount
equal to the sum of the Monthly Rent amounts payable during such three (3)
month period.
INITIALS:
-------------------- -------------------------
Landlord Tenant
7. SECURITY DEPOSIT.
(a) Landlord and Tenant hereby acknowledge that
the sum of Thirty Thousand Dollars ($30,000.00) held by Landlord as a
security deposit for the full and faithful performance of that certain
lease agreement by and between Landlord and Tenant, dated August 14,
1985, encumbering that certain building located at 1455 Adams Drive,
Menlo Park, California ("Building 15") (the "Building 15 Lease") shall
be held by Landlord as a Security Deposit for the full and faithful
performance of every provision of this Lease to be performed by Tenant.
If Tenant defaults with respect to any provision of this Lease,
Landlord may apply all or any part of the Security Deposit for the
payment of any Rent or other sum in default, the repair of such damage
to the Premises or the payment of any other amount which Landlord may
spend or become obligated to spend by reason of Tenant's default or to
compensate Landlord for any other loss or damage which Landlord mar
suffer by reason of Tenants default to the full extent permitted by
law. If any portion of the Security Deposit is so applied, Tenant
shall, within ten (10) days after written demand therefor, deposit cash
with Landlord in an amount sufficient to restore the Security Deposit
to its original amount, and Tenant's failure to do so shall be a
default under this Lease. Landlord shall not be required to keep the
Security Deposit separate from its general funds and Tenant shall not
be entitled to interest on the Security Deposit. If Tenant is not
otherwise in default, the Security Deposit or any balance thereof shall
be returned to Tenant within thirty (30) days of the Termination Date.
8. HOLDING OVER. In the event Tenant remains in
possession of all or any part of the Premises after the Termination Date, such
possession shall constitute a month-to-month tenancy only and shall not
constitute a renewal or extension for any further term. In such event, Monthly
Rent shall be increased to an amount equal to (a) one hundred fifty percent
(150%) of the Monthly Rent payable during the last month of the Term, as
extended, if such hold-over was without the written consent of Landlord, or (b)
one hundred fifteen percent (115%) of the Monthly Rent payable during the last
month of the Term, as extended, if such hold-over was with the written consent
of Landlord. In either event, Tenant shall also pay any other sums due hereunder
in the amount and at the times specified in this Lease. Such month-to-month
tenancy shall be subject to every other term, covenant and condition contained
herein.
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9. TENANT IMPROVEMENTS. The Tenant Improvements to the
Premises shall be constructed in accordance with the Plans and with the terms of
the Work Letter Agreement attached hereto as EXHIBIT "B".
10. CONDITION OF PREMISES.
(a) Within ten (10) days after the completion of
the Tenant Improvements, Tenant shall conduct a walk-through inspection
of the Premises with Landlord and complete a punch-list of items
needing correction or additional work; which punch-list shall be
approved in writing by Landlord and Tenant. Other than latent defects
and the items specified in the punch-list, by taking possession of the
Premises, Tenant shall be deemed to have accepted the Premises in a
good, clean and completed condition and repair. The punch-list shall
not include any damage to the Premises caused by Tenant's move-in;
which damage shall be repaired or corrected by Tenant, at its expense.
Tenant acknowledges that, other than as specifically set forth in the
Lease, neither Landlord nor Landlord's Agents has made any
representations or warranties as to the suitability or fitness of the
Premises for the conduct of Tenant's business or for any other purpose,
and that neither Landlord nor Landlord's Agents has agreed to undertake
any Alterations or construct any Tenant Improvements or other
improvements to the Premises except as expressly provided in this
Lease. If Tenant fails to submit a punch-list to Landlord within such
ten (10) day period, it shall be deemed that there are no items other
than latent defects needing additional work or repair. Landlord's
contractor shall complete all Landlord approved punch-list items within
thirty (30) days after the walk-through inspection or as soon as
practicable thereafter.
(b) Landlord warrants to Tenant that the
Premises, in its state existing on the date that the Lease Term
commences, but without regard to the use for which Tenant will use the
Premises, does not violate any covenants or restrictions of record, or
any applicable building code, regulation or ordinance in effect on the
Commencement Date. In the event it is determined that this warranty has
been violated, then it shall be the obligation of Landlord, after
written notice from Tenant, to rectify promptly, at Landlord's sole
cost and expense, any such violation.
(c) Landlord hereby assigns to Tenant all
rights, remedies and benefits of all warranties Landlord may have from
or against any contractor, subcontractor, supplier or manufacturer with
regard to defects in the material or workmanship of the Premises,
including, without limitation, the Building, Tenant Improvements and
Alterations. By taking possession of and accepting the Premises, Tenant
shall not be deemed to have waived any right or warranty concerning any
defect in the material or workmanship of the Premises.
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11. USE OF THE PREMISES.
(a) TENANT'S USE. Tenant shall use the Premises solely
for office, research and development, and manufacturing purposes, and
for uses related thereto. Use of the Outside Area of the Project shall
be nonexclusive, except for walkways, parking spaces and other areas
appurtenant to the Building designed for the exclusive use of the
occupants thereof.
(b) CC&R'S. Tenant agrees that this Lease is subject and
subordinate to the CC&R's. Tenant acknowledges that it has read the
CC&R's and knows the contents thereof. Throughout the Term, Tenant
shall faithfully and timely perform all acts required of tenants
generally in Menlo Business Park, and subject to Landlord's obligation
to perform under such CC&Rs with respect to the Outside Areas, and
Tenant shall otherwise comply with the CC&R's and any modification or
amendments thereof, including the payment by Tenant of any periodic or
special dues or assessments charged against the Premises. Tenant hereby
specifically agrees to comply with the provisions of the CC&R's and the
City of Menlo Park regulations prohibiting parking on the streets and
the storage of materials in the parking areas surrounding the Building.
Tenant shall hold Landlord, Landlord's Agents and Premises harmless and
indemnify Landlord and Landlord's Agents against any loss, expense,
damage, attorneys' fees and costs or liability arising out of or in
connection with the failure of Tenant to so perform or comply with the
CC&R's.
(c) COMPLIANCE.
(i) Tenant shall not use the Premises or suffer
or permit anything to be done in or about the Premises which
will in any way conflict with any law, statute, zoning
restriction, ordinance or governmental law, rule, regulation
or requirement of any duly constituted public authority having
jurisdiction over the Premises now in force or which may
hereafter be in force, or the requirements of the Board of
Fire Underwriters or other similar body now or hereafter
constituted relating to or affecting the condition, use or
occupancy of the Premises. Tenant shall not commit any public
or private nuisance or any other act or thing which might or
would disturb the quiet enjoyment of any other tenant of
Landlord or any occupant of nearby property. Tenant shall
place no loads upon the floors, walls or ceilings in excess of
the maximum designed load specified by Landlord or which may
damage the Building or Outside Areas, nor place any harmful
liquids in the drainage systems, nor dump or store waste
materials, refuse or other materials or allow such to remain
outside the Building proper, except in the enclosed trash
areas constructed for such purpose.
(ii) In particular, Tenant, at its sole cost,
shall comply with all laws relating to the storage, use and
disposal of hazardous, toxic or radioactive matter, including
those materials identified in
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Sections 66680 through 66685 of Title 22 of the
California Administrative Code, Division 4, Chapter 30
("Title 22") as amended from time to time
(collectively "Toxic Materials". Landlord hereby acknowledges
that Tenant presently uses and shall continue to use small
amounts of cleaning solvents ("Cleaning Solvents") from time
to time in the ordinary course of its business and that Tenant
intends to store of said Cleaning Solvents on the Premises.
Tenant agrees that it shall, at its sole cost, comply with all
laws (present and future) that relate to the storage, use and
disposal of all such Cleaning Solvents at all times during the
term of this Lease. Tenant shall be solely responsible for and
shall defend, indemnify and hold Landlord and Landlord's
Agents harmless from and against all claims, costs and
liabilities, including attorneys' fees and costs, arising out
of or in connection with its storage, use and disposal of
Toxic Materials and said Cleaning Solvents. Tenant shall
further be solely responsible for and shall defend, indemnify
and hold Landlord, Landlord's Agents and the Premises harmless
from and against all claims, costs, and liabilities, including
attorneys' fees and costs, arising out of or in connection
with the removal, clean-up and restoration work and materials
necessary to return the Premises and any other property of
whatever nature to their condition existing prior to the
appearance of the Toxic Materials and said Cleaning Solvents
on the Premises. Tenant's obligations hereunder shall survive
the termination of this Lease.
(iii) Tenant shall, at its own cost and expense,
promptly and properly observe and comply with, including the
making by Tenant of any Alteration to the Premises, all
present and future orders, regulations, directions, rules,
laws, ordinances, and requirements of all governmental
authorities (including, without limitation, state, municipal,
county and federal governments and their departments, bureaus,
boards and officials) arising from the use or occupancy of, or
applicable to, the Premises or privileges appurtenant to or in
connection with the enjoyment of the Premises; provided,
however, that if such compliance is not due to a specific use
of the Premises made by Tenant, as opposed to use of such
facilities generally, then Landlord shall, at its cost and
expense, effect any such compliance and shall amortize the
cost of such compliance over the longest available period,
consistent with generally accepted accounting principles, with
Tenant paying for its share of such cost to the extent of the
period of such amortization falling within the Term of this
Lease.
12. QUIET ENJOYMENT. Landlord covenants that Tenant, upon
performing the terms, conditions and covenants of this Lease, shall have quiet
and peaceful possession of the Premises as against any person claiming the same
by, through or under Landlord.
13. ALTERATIONS.
(a) PERMITTED ALTERATIONS. After the
Commencement Date, Tenant shall not make or permit any Alterations in,
on or about the Premises,
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except for non-structural Alterations costing Five Thousand Dollars
($5,000.00) or less per Alteration, without the
prior written consent of Landlord, which consent shall not be
unreasonably withheld. All alterations shall be construed pursuant to
plans and specifications approved in writing by Landlord.
Notwithstanding the foregoing Tenant shall not, without the prior
written consent of Landlord, make any:
(i) Alterations to the exterior of the Building
or the Outside Areas;
(ii) Alterations to or penetrations of the
structural portions of the Building including, without
limitation, the roof, or which will interfere with the proper
functioning of any mechanical facilities or equipment located
in the Building or Project; and
(iii) Alterations visible from outside the
Building to which Landlord may withhold consent based on
wholly aesthetic grounds.
All Alterations shall be installed at Tenant's sole expense, in
compliance with all applicable laws and the CC&R's, by a licensed
contractor. The work shall be done in a good and workmanlike manner
conforming in quality and design with the Premises existing as of the
Commencement Date, and shall not diminish the value of either the
Building or the Project. Tenant shall, if required by Landlord, obtain
and pay for, at its own expense, a completion and indemnity bond, the
form and amount of which shall be subject to the approval of Landlord.
All Alterations made by Tenant, unless otherwise agreed in writing by
Landlord upon approval thereof, shall be and become the property of
Landlord upon the installation thereof and shall not be deemed Tenant's
Personal Property; provided, however, that Landlord may, at its option,
require that Tenant, upon the termination of this Lease, at Tenant's
expense, remove any or all nonstructural Alterations installed by
Tenant and return the Building to its condition as of the Commencement
Date of this Lease, normal wear and tear excepted. Notwithstanding any
other provision of this Lease, Tenant shall be solely responsible for
the maintenance and repair of any and all Alterations made by it to the
Premises.
(b) NOTICE. Tenant shall give Landlord written notice of
Tenant's intention to perform work on the Premises which might result
in any claim of lien prior to the commencement of such work and
Landlord may post and record a Notice of Nonresponsibility or other
notice Landlord deems proper. Tenant shall not permit any mechanic's,
materialmen's or other liens to be filed against the property of which
the Premises are a part relative to work performed by or on behalf of
Tenant, nor against Tenant's leasehold interest in the Premises. If
Tenant fails to remove any lien(s) filed against the Premises or all or
any portion of the Project in connection with any work performed or any
work claimed to have been performed by or at the direction of Tenant
within thirty (30) days from the date of the lien filing(s), then
Landlord may remove such liens(s) at
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Tenant's expense and Tenant shall reimburse Landlord for all
costs incurred by Landlord in connection with the removal of the
lien(s), which amount shall be deemed Additional Rent, and shall
include, without limitation, all sums disbursed, incurred or
deposited by Landlord, including Landlord's costs, expenses
and attorneys' fees with interest thereon at the Interest Rate.
14. SURRENDER OF THE PREMISES. Upon the expiration or
earlier termination of this Lease, Tenant shall surrender the Premises to
Landlord in its condition existing as of the Commencement Date, normal wear and
tear and acts of God excepted, with all interior walls in good repair, all
carpets shampooed and cleaned, all floors cleaned and waxed, and the HVAC
equipment in working condition, all to the reasonable satisfaction of Landlord.
Tenant shall remove from the Premises all of Tenant's Alterations which Landlord
requires Tenant to remove pursuant to Paragraph 13 above and all Tenant's
Personal Property, and shall repair any damage and perform any restoration work
caused by such removal; provided, however, that if Tenant is then in default
after all applicable grace periods, Tenant shall not be entitled to remove
Tenant's Personal Property except as specified by written notice delivered by
Landlord to Tenant and except as to the rights granted to holders of secured
interest in such property perfected prior to the date of this Lease, and except
as permitted by Landlord pursuant to executed Landlord lien waivers. If Tenant
fails to remove such Alterations and Tenant's Personal Property which Tenant is
authorized and obligated to remove pursuant to the above, and such failure
continues after the termination of this Lease, Landlord may retain such property
and all rights of Tenant with respect to it shall cease, or Landlord may place
all or any portion of such property in public storage for Tenant's account.
Tenant shall pay to Landlord, upon demand pursuant to California Civil Code
Sections 1980-1991, inclusive, the costs of removal of any such Alterations and
Tenant's Personal Property and storage and transportation costs of same, and the
cost of repairing and restoring the Premises, together with interest at the
Interest Rate from the date of expenditure by Landlord. If the Premises are not
so surrendered at the termination of this Lease, Tenant hereby agrees to
indemnify Landlord and its Agents against all loss or liability resulting from
delay by Tenant in so surrendering the Premises, including, without limitation,
any claims made by any succeeding tenant, losses to Landlord due to lost
opportunities to lease to succeeding tenants, and attorneys' fees and costs.
15. REAL AND PERSONAL PROPERTY TAXES.
(a) PAYMENT BY TENANT. Tenant shall pay, as Additional
Rent, Tenant's pro rata share of all Real Property Taxes levied against
the Building or Lot 7 during the Term as they shall respectively become
due and payable. Landlord agrees to forward to Tenant copies of all
notice and tax bills pertaining to the Premises upon receipt. If Tenant
shall fail to pay Tenant's pro rata share of Real Property Taxes prior
to any penalty or delinquency, Landlord shall have the right but not
the obligation to: (i) pay the same, in which case Tenant shall
immediately repay such amount to Landlord including interest at the
Interest Rate from the date paid by Landlord until the date of payment
by Tenant; and (ii) exercise any and all remedies available to Landlord
pursuant to Paragraph 29. Tenant may contest the amount or validity of
any Real Property Taxes by appropriate proceeding, provided that Tenant
shall promptly pay such taxes unless such proceeding shall operate to
prevent or stay the collection of the tax so
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contested. Landlord shall join in any such proceeding if any law shall
so require, provided that Tenant shall indemnify Landlord against any
liability, cost or expense in connection therewith, including, without
limitation, attorney's fees and costs. Notwithstanding anything in the
foregoing to the contrary, however, Tenant shall not be responsible
for the amount of any increase in Real Property Taxes (excluding any
such increase due to the normal yearly reassessment) in excess of
120% of the Real Property Taxes for the prior assessment prior
arising as a result of a transfer by Landlord of the Premises.
(b) TAX ON IMPROVEMENTS. Tenant shall pay any increase in
Real Property Taxes attributable to any and all Alterations and Tenant
Improvements of any kind whatsoever placed in, on or about the Premises
for the benefit of, at the request of, or by Tenant.
(c) PRORATION. Tenant's liability to pay Real Property
Taxes shall be prorated on the basis of a 365-day year to account for
any fractional portion of a fiscal tax year included at the
commencement or expiration of the Term. With respect to any assessments
which may be levied against or upon the Premises, or which under the
laws then in force may be evidenced by improvements or other bonds or
may be paid in annual installments, only the amount of such annual
installment (with appropriate proration for any partial year) and
interest due thereon shall be included within the computation of the
annual Real Property Taxes levied against the Premises.
(d) PAYMENT ON EXPIRATION OF TERM. If this Lease
terminates on a date earlier than the end of a fiscal tax year,
Landlord shall deliver to Tenant a statement setting forth the amount
of Real Property Taxes to be paid by Tenant prorated to the date of
termination. Tenant shall pay to Landlord such prorated amount within
fifteen (15) days of Tenant's receipt of the statement.
(e) PERSONAL PROPERTY TAXES. Tenant shall pay prior to
delinquency all taxes assessed or levied against Tenant's Personal
Property in, on or about the Premises. When possible, Tenant shall
cause its Personal Property to be assessed and billed separately from
the real or personal property of Landlord.
(f) FAILURE TO PAY. Tenant's failure to pay any of the
charges required to be paid under this paragraph shall constitute a
material default under this Lease.
16. UTILITIES AND SERVICES. Tenant shall be responsible for and
shall pay promptly all charges for water, gas, electricity, telephone, refuse
pickup, janitorial service, telephone service and all other utilities, materials
and services furnished directly to or used by Tenant in, on or about the
Premises during the Term, together with any taxes thereon. Landlord shall cause
the gas and electricity service to the Premises to be separately metered. The
cost of installing such meters shall be deducted from the Improvement Allowance
(as such term is defined in EXHIBIT "B"). Water service charges shall be
reasonably pro rated to Tenant. Landlord shall not be liable in damages or
otherwise for any failure or interruption of any utility
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service or other service furnished to the Premises; provided, however, that
if due to Landlord's negligent acts or willful misconduct such service is
interrupted and Tenant is unable for more than two consecutive business days
to use the Premises, then Monthly Rent shall be abated, commencing with the
date of such interruption, until such service is restored. No such failure or
interruption shall entitle Tenant to terminate this Lease or otherwise to
withhold or abate Rent or other sums due hereunder. Notwithstanding the
foregoing, however, Landlord shall provide a security guard, with an
automobile containing a cellular telephone, for the Project on a twenty-four
(24) hour per day, seven (7) day per week basis.
17. BUILDING EXPENSES.
(a) DEFINITION. Tenant shall pay from time to time during
the term of this Lease (but not more frequently than monthly), within
thirty (30) days of presentation of invoice therefor from Landlord,
Tenant's Proportionate Share of Building Expenses, which in this Lease
shall mean and refer to the "Costs of Operation and Maintenance" of the
Building. "Costs of Operation and Maintenance" as used in this Lease
shall be deemed to mean and refer to those expenses incurred by
Landlord with respect to the operation and maintenance of the Building
and Lot 7 which, in accordance with generally accepted accounting
principles consistently applied to the operation, maintenance and
security of a first class light manufacturing/research and development
building, are properly chargeable to the operation and maintenance of
the Building and Lot 7, which costs shall include without limitation,
repair and maintenance to the roof and the exterior walls of the
Building, landscape services, heating, ventilation and air conditioning
maintenance contracts, supplies, compensation and all fringe benefits,
worker's compensation insurance premiums and payroll taxes paid to, for
or with respect to all persons engaged in the operating, maintaining or
cleaning of the Building or Lot 7, costs of Building security, rental
of personal property used in such maintenance, the insurance required
to be carried by Landlord with respect to the Building as set forth in
this Lease, and all other charges directly related to the operation and
maintenance of the Building and Lot 7, or which are more economically
handled by Landlord. Regardless of the actual percentage of occupancy
of the Building, for purposes of this Paragraph 17, the Costs of
Operation and Maintenance will be calculated as though the Building
were fully occupied. Costs of Operation and Maintenance shall
specifically exclude any leasing commissions, advertising and promotion
expenditures, legal and auditing fees (other than reasonable legal and
auditing fees necessarily incurred in connection with the maintenance
and operation of the Building and Lot 7, but not with respect to the
leasing or improving of the Building or the resolution of disputes with
any tenants of the Building), depreciation of the Building, interest on
debt, expenses incurred by Landlord on behalf of or for the benefit of
other tenants, all expenses for which Landlord is compensated pursuant
to the provisions of this Lease or through proceeds from insurance or a
third party, costs of capital improvements and equipment (except for
"cost saving" capital improvements or equipment; which, for the
purposes of this Lease, shall mean capital improvements or equipment
(amortized over the useful life of said capital improvement or
equipment) where the present value of the projected
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savings in the "Cost of Operation and Maintenance" of the Building
exceeds the present value of the projected costs of said capital
improvement or equipment) and all costs incurred by Landlord due to the
violation by Landlord of any law regulation or ordinance, the CC&Rs,
any mortgage, deed of trust or ground lease covering the Building or
any provision of this Lease or any other lease relating to the
Building. Landlord hereby agrees that all Building Expenses shall be
fully audited and shall be available for inspection by Tenant
throughout the Term on an "open book" basis.
(b) PAYMENT. Tenant's payment of Tenant's Proportionate
Share of Building Expenses shall constitute Additional Rent payable by
Tenant under this Lease. In addition thereto, Tenant shall pay all of
any costs incurred by Landlord as a direct result of Tenant's
disproportionate use of the Building or Lot 7.
(c) TENANT'S REPAIRS AND MAINTENANCE. In addition to the
payments to be made by Tenant pursuant to the provisions set forth
above, Tenant shall, at Tenant's sole costs and expense, keep and
maintain the Premises, including without limitation, all floors,
subfloors, floor coverings, windows, ceilings, interior walls,
fixtures, doors, electrical and lighting equipment, plumbing, heating,
air conditioning, ventilating systems and immediate loading areas
within the Premises and Tenant's signs, in all respects in good repair
and in clean and safe condition, reasonable wear and tear excepted, and
if impractical to repair then the foregoing items shall be replaced.
Tenant shall, at Tenant's sole cost and expense, immediately upon
breakage, replace all glass in the Premises that may be broken during
the Term with glass at least equal to the specification and quality of
the glass so replaced. If Tenant fails to fulfill its obligations
hereunder, Landlord shall have the option, after five (5) days written
notice to Tenant, to assume any or all of the foregoing maintenance and
repair responsibilities; provided, however, that if Tenant notifies
Landlord within such five (5) day period of its intention to assume its
maintenance and repair responsibilities, Landlord shall allow Tenant a
maximum of thirty (30) days within which to make such repairs. If at
the end of such thirty (30) day period, Tenant has failed to complete
said repairs, Landlord shall have the right to enter the Premises,
effectuate the repairs and require Tenant to reimburse Landlord, as
Additional Rent, for the cost of all such services, together with an
accounting and management services fee of five percent (5%) of the cost
of such services.
(d) LANDLORD'S REPAIRS AND MAINTENANCE. Subject to the
provisions of Paragraphs 17(c), 26 and 27, Landlord hereby agrees to
maintain and repair, when necessary, at its sole cost, the structural
components of the Building (including the utility systems located
within such structural components); which structural components include
only the foundations, bearing and exterior walls (excluding glass and
doors) and the roof (excluding skylights, if any) of the Building.
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(e) WAIVER AND LANDLORD LIABILITY FOR REPAIRS. Tenant
waives the provisions of Sections 1941 and 1942 of the California Civil
Code and any similar or successor law regarding Tenant's right to make
repairs and deduct the expenses of such repairs from the Rent due under
this Lease. Further, Landlord shall not be liable for any failure to
make any repair or to perform any maintenance unless such failure shall
persist for an unreasonable time after written notice of the need for
such repair or maintenance is given to Landlord by Tenant. Except as
provided in Paragraphs 16 and 26(d), there shall be no abatement of
rent and no liability of Landlord by reason of any injury to or
interference with Tenant's business arising from the making of any
repairs, alterations or improvements in or to any portion of the
Premises or in or to fixtures, appurtenances and equipment therein.
18. COMMON AREA EXPENSES.
(a) COMMON AREAS. As used in this Lease, "Common
Areas. shall mean the Recreational Area depicted on EXHIBIT "A-2", the
Streetscape, which is a ten-foot strip of planted area located
throughout the Project, and all other areas within the Project which
are available for the common use of tenants of the Project and which
are not leased or held for the exclusive use of Tenant or other tenants
including, but not limited to, sidewalks, access roads, landscaping and
planted areas. Landlord may from to time change the size, location,
nature and use of any of the Common Areas, including converting Common
Areas into leasable areas, constructing additional parking facilities
(including parking structures) in the Common Areas, and increasing or
decreasing Common Area land and/or facilities, and Tenant's
Proportionate Share of Common Area Expenses will be appropriately
amended, to the extent that the square footage of the land in the
Project available for lease is changed from the total set forth in
EXHIBIT "A-2" of this Lease, which total is 2,060,693 square feet,
based upon which total square footage Tenant's Proportionate Share of
Common Area Expenses is calculated (153,594 square feet [which is the
land area for Building No. 7] multiplied by 40.66% [which is Tenant's
Proportionate Share of Building Expenses] divided by 2,060,693 equals
3.03%). Tenant acknowledges that the exercise by Landlord of its right
to change the size, location, nature and use of the Common Areas may
result in occasional inconvenience to Tenant from time to time. Such
activities and changes shall be expressly permitted so long as they do
not materially adversely affect Tenant's access to or use of the
Premises.
(b) USE OF COMMON AREAS. Tenant shall have the
nonexclusive right (in common with other tenants and all others to whom
Landlord has granted or may grant such rights) to use the Common Areas
for the purposes intended, subject to such reasonable rules and
regulations as Landlord may establish from time to time. Tenant shall
abide by such rules and regulations and shall use its best effort to
cause others who use the Common Areas with Tenant's express or implied
permission to abide by Landlord's rules and regulations. At any time,
Landlord may close any Common Areas to perform any acts in and to the
Common Areas as, in Landlord's judgment, may be desirable to improve
the
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Project; provided that such action does not materially adversely
interfere with Tenant's access to or use of the Premises. Tenant shall
not, at any time, interfere with the rights of Landlord, other tenants,
or any other person entitled to use the Common Areas.
(c) SPECIFIC PROVISIONS RE: VEHICLE PARKING. Tenant shall
not cause large trucks or other large vehicles to be parked within the
Project or on the adjacent public streets. Temporary parking of large
delivery vehicles in the Project may be permitted by the rules and
regulations established by Landlord. Vehicles shall be parked only in
striped parking spaces on Lot 7 and not in driveways, loading areas or
other locations not specifically designated for parking. If Tenant
parks more vehicles in its parking areas than the number set forth
pursuant to Paragraph 19 below, such conduct shall be a material breach
of the Lease. In addition to Landlord's other remedies under the Lease,
Tenant shall pay a reasonable daily charge for each such additional
vehicle.
(d) MAINTENANCE OF COMMON AREAS. Notwithstanding anything
in this Lease to the contrary, Landlord shall maintain the Common Areas
in good order, condition and repair and shall operate the Project, in
Landlord's sole discretion, as a first class industrial/commercial real
property development. Tenant shall pay Tenant's Proportionate Share of
Common Area Expenses, which shall include all costs incurred by
Landlord for the operation and maintenance of the Common Areas. Common
Area Expenses include, but are not limited to, costs and expenses for
the following: gardening and landscaping; utilities, water and sewage
charges; maintenance of signs (other than Tenant's signs or signs of
any other tenant of the Project); premiums for liability, property
damage, fire and other types of casualty insurance on the Common Areas,
and Worker's Compensation Insurance; compensation and all fringe
benefits and payroll taxes paid to, for or with respect to all persons
engaged in the operating, maintaining, or cleaning of the Common Area;
all Real Property Taxes and assessments levied on or attributable to
the Common Areas and all Common Area improvements; all personal
property taxes levied on or attributable to personal property used in
connection with the Common Areas; straight line depreciation on
personal property owned by Landlord which is consumed in the operation
or maintenance of the Common Areas; rental or lease payments paid by
Landlord for rented or leased personal property used in the operation
or maintenance of the Common Areas; fees for required licenses and
permits; repairing, resurfacing, repaving, maintaining, painting,
lighting, cleaning, refuse removal, security and similar items;
reserves for roof replacement and exterior painting and other
appropriate reserves; a fee for Landlord's supervision of the Common
Areas in the amount of five percent (5%) of the total of all other
Common Area costs for the calendar year; and other charges directly
related to the operation and maintenance of the Common Area which are
more economically handled by Landlord. Landlord may cause any or all of
such services to be provided by third parties. Common Area costs shall
not include depreciation of real property which forms part of the
Common Areas and all items which are specifically excluded from the
Building Expenses as set forth in Paragraph 17(a) above. Regardless of
actual occupancy
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of the Project, for the purpose of this Paragraph, the
costs for the operation and maintenance of the Common Areas will be
computed as though the Project were 100% leased and occupied (but in no
event shall such calculation result in a profit to Landlord or any
third party).
(e) TENANT'S SHARE AND PAYMENT. Tenant shall pay Tenant's
Proportionate Share of Common Area Expenses, in advance, in monthly
installments on the first day of each month during the Lease Term
(prorated for any fractional month). Landlord may adjust such estimates
at any time and from time to time based upon Landlord's experience and
reasonable anticipation of costs. Such adjustments shall be effective
as of the next rent payment date after notice to Tenant. Within thirty
(30) days after the end of each calendar year of the Lease Term,
Landlord shall deliver to Tenant a statement prepared in accordance
with generally accepted accounting principles setting forth, in
reasonable detail, the actual Common Area Expenses paid or incurred by
Landlord during the preceding calendar year and Tenant's pro rata
share. Upon receipt of such statement, there shall be an adjustment
between Landlord and Tenant with payment to or credit given by Landlord
(as the case may be) so that Landlord shall receive the entire amount
of Tenant's share of such costs and expenses for such period. Any
changes in the Common Area costs and/or the aggregate area leased or
held for lease for the exclusive use of all tenants of the Project
during the Lease Term shall be effective on the first day of the month
after such change occurs. Landlord hereby grants Tenant the right to
inspect all Common Area Expenses on an "open book" basis throughout the
Term.
19. PARKING. Tenant understands and acknowledges that a portion of
Lot 7 contains parking spaces which shall be reserved for the benefit of other
tenants of the Building, if any. Landlord hereby grants to Tenant during the
term of this Lease, the right, to use seventy-one (71) parking spaces, which
amount represents Tenant's pro rata share of one hundred seventy-seven (177)
available parking spaces located on Lot 7, which are highlighted on EXHIBIT
"A-1" to this Lease. Landlord hereby agrees that five (5) of the seventy-one
(71) spaces granted to Tenant hereunder shall be located in front of the
Building at the entrance of the Premises and shall be designated "reserved for
Etak, Inc." Landlord retains the right to improve, alter, modify and relocate
such parking areas and to regulate access to and the use of the parking areas;
provided, however, that Landlord shall not reduce the overall number of parking
spaces located on Lot 7.
20. [THIS PARAGRAPH INTENTIONALLY LEFT BLANK]
21. [THIS PARAGRAPH INTENTIONALLY LEFT BLANK]
22. LANDLORD'S RIGHT TO ENTER THE PREMISES. Tenant shall permit
Landlord and Landlord's Agents to enter the Premises at all reasonable times
with reasonable notice, except for emergencies in which case no notice shall be
required, to inspect the same, to post Notices of Nonresponsibility and similar
notices and signs indicating the availability of Premises for sale, to show the
Premises to interested parties such as prospective lenders and purchasers, to
make necessary Alterations or repairs, to discharge Tenant's obligations
hereunder when Tenant has
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failed to do so within a reasonable time after written notice from Landlord,
and at any reasonable time after one hundred and eighty (180) days prior to
the expiration of the Term, to place upon the Premises a reasonable sign,
after consultation with Tenant, indicating the availability of the Premises
for sale and/or lease and to show the Premises to prospective tenants and
purchasers. Any sign respecting the sale or lease of the Premises shall, if
requested by Tenant and if accurate, contain appropriate language to inform
the public that Tenant is not going out of business. The above rights are
subject to reasonable security regulations of Tenant, and to the requirement
that Landlord shall at all times act in a manner to cause the least possible
interference with Tenant's business.
23. SIGNS. Tenant shall have the right to use Tenant's pro rata
share of one of two monument signs already constructed at the center driveway
entrance to the Building. In addition Tenant shall be entitled to design and
install, subject to Landlord's approval (which approval shall not be
unreasonably withheld), a tenant identification sign on the glass frontage of
the Premises. Tenant shall have no right to maintain Tenant identification signs
in any other location in, on or about the Building and shall not display or
erect any signs, displays or other advertising materials that are visible from
the exterior of the Building. The size, design, color and other physical aspects
of permitted sign(s) shall be subject to the Landlord's written approval prior
to installation, which shall not be unreasonably withheld. The cost of the
sign(s), including the installation, maintenance and removal thereof shall be at
Tenant's sole cost and expense; provided, however, that if Landlord decides to
install signs with concrete monument bases, Landlord shall pay the cost of such
bases and Tenant shall be responsible only for the payment of that portion of
the cost of such signs expended to identify Tenant. If Tenant fails to maintain
its sign(s), or if Tenant fails to remove same upon termination of this Lease,
Landlord may do so at Tenant's expense. Tenant shall reimburse Landlord for all
costs incurred by Landlord to effect such removal, which amounts shall be deemed
Additional Rent.
24. INSURANCE.
(a) INDEMNIFICATION. Tenant hereby agrees to defend,
indemnify and hold harmless Landlord and Landlord's Agents from and
against any all damage, loss, liability and expense including, without
limitation, reasonable attorneys' fees and legal costs incurred
directly or by reason of any claim, suit or judgment brought by or on
behalf of any person or persons for damage, loss or expense due to, but
not limited to, bodily injury or property damage sustained by such
person or persons which arise out of, are occasioned by or are in any
way attributable to the use or occupancy of the Premises by, or the
acts or omissions of, the Tenant, its agents, employees or any
contractors brought onto the Premises by Tenant. Tenant and Landlord
agree that the obligations of Tenant and Landlord herein shall survive
the termination of this Lease. Notwithstanding the foregoing and the
provisions of Paragraph 24(h) below, Tenant shall not be required to
defend, save harmless and indemnify Landlord or Landlord's Agents from
any liability for injury, loss, accident or damage to any person or
property resulting from the negligent acts or omissions or the willful
misconduct of Landlord or those of its agents, contractors, servants,
employees or licensees, in connection with Landlord's activities on the
Premises, and Landlord hereby indemnifies and agrees to hold Tenant
harmless from any and all damages
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arising directly out of such negligence or such willful misconduct;
provided that such exclusion from Tenant's indemnity and such agreement
by Landlord to so indemnify and hold Tenant harmless are not intended
to and shall not relieve any insurance carrier of its obligations under
policies required to be carried by Tenant pursuant to the provisions of
this Lease to the extent that such policies cover the results of such
negligence or such willful misconduct.
(b) TENANT'S INSURANCE. Tenant agrees to maintain in full
force and effect at all times during the Term, at its own expense, for
the protection of Tenant and Landlord, as their interests may appear,
policies of insurance issued by a reasonable carrier or carriers
acceptable to Landlord which afford the following coverages:
(i) Comprehensive general liability insurance
including blanket contractual liability, broad form property
damage, personal injury, completed operations, products
liability, and fire damage: not less than Two Million Dollars
($2,000,000.00) with a combined single limit for both bodily
injury and property damage and naming (if such is the custom
in the industry in general for such properties) Landlord as an
additional insured.
(ii) "All Risk" property insurance (including,
without limitation, Replacement Cost, vandalism, malicious
mischief, inflation, sprinkler leakage, and boiler and
machinery (e.g., HVAC and other mechanical) coverage
endorsements) in the Premises including, without limitation,
the Tenant Improvements, Alterations and Tenant's Personal
Property located on or in the Premises, which shall be in a
form providing coverage comparable to the coverage provided in
the standard ISO All-Risk form and in an amount equal to the
full amount of the replacement cost, as the same may from time
to time increase as a result of inflation. The insurance
policy or policies shall name Landlord as an additional named
insured and shall include a lender's loss payable endorsement
in favor of Landlord's lender (Form 438 BFU Endorsement).
(iii) Rent abatement insurance (as a rider to the
"All Risk" policy described above) covering those risks
referred to in subparagraph (ii) above in an amount equal to
the Rent and taxes (and any other sums payable under the
Lease) for a period of at least twelve (12) months from the
date of loss.
(c) LANDLAND'S INSURANCE. Landlord covenants and agrees
that throughout the Term, it will insure the Building (excluding any
property with respect to which Tenant is obligated to insure pursuant
to the provisions of Subparagraph 24(b) above), against damage by fire
and standard extended coverage perils insurance in such reasonable
amounts with such reasonable deductibles as would be carried by a
prudent owner of a similar building in Northern California, but in no
event less than ninety percent (90%) of full
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replacement value of the Building, with rental abatement endorsements
covering rent, insurance and taxes payable with respect to the
Building for a 12-month period. Landlord may, but shall not be
obliged to, take out and carry any other form or forms of insurance
as it or the mortgagees of Landlord may reasonably determine
advisable. Notwithstanding any contribution by Tenant to the cost
of insurance premiums, with respect to the Building or any alterations
of the Premises, as provided herein, Tenant acknowledges that it has
no right to receive any proceeds from any such insurance policies
carried by Landlord, although Landlord shall use such proceeds in the
repair and reconstruction of the Building and the Premises unless the
provisions of Subparagraph 24(b) above shall apply. Landlord will not
carry insurance of any kind on Tenant's furniture or furnishings, or
on any fixtures, equipment, improvements or appurtenances of Tenant
under this Lease; and Landlord shall not be obligated to repair any
damage thereto or replace the same.
(d) DEDUCTIBLES. Any policy of insurance required to be
maintained by Tenant pursuant to this Lease containing a deductible in
excess of Five Thousand Dollars ($5,000) must be approved in writing by
Landlord prior to the issuance of such policies, it being understood
and agreed that Tenant shall be solely responsible for the payment of
any such deductible.
(e) CERTIFICATES. Tenant shall deliver within fifteen
(15) days following the Commencement Date and thereafter at least ten
(10) days prior to expiration of each such policy, certificates of
insurance evidencing the above coverage with limits not less than those
specified above. The certificates shall expressly provide that the
interest of Landlord therein shall not be affected by any breach of
Tenant of any policy provision for which such certificates evidence
coverage.
(f) INCREASED COVERAGE. Upon demand, Tenant shall provide
Landlord, at Tenant's expense, such other insurance as Landlord or
Landlord's lender may reasonably require and as may be typically
required in the industry for similar properties, to afford Landlord and
Landlord's lender adequate protection.
(g) CO-INSURER. If, on account of the failure of Tenant
to comply with the foregoing provisions, Landlord is adjudged a
co-insurer by its insurance carrier, then any loss or damage Landlord
shall sustain by reason thereof, including attorneys' fees and costs,
shall be borne by Tenant and shall be immediately paid by Tenant upon
receipt of a bill therefor and evidence of such loss.
(h) INSURANCE REQUIREMENTS. All such insurance (i) shall
be in a form satisfactory to Landlord and its lender and shall be
carried with companies that have a general policyholder's rating of not
less than "A" and a financial rating of not less than Class "X" in the
most current edition of Best's Insurance Reports, (ii) shall provide
that such policies shall not be subject to material alteration or
cancellation except after at least thirty (30) days' prior written
notice
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to Landlord, and (iii) shall be primary as to Landlord. If
Tenant fails to procure and maintain the insurance required hereunder,
Landlord may, but shall not be required to, order such insurance at
Tenant's expense and Tenant shall reimburse Landlord for all costs
incurred by Landlord with respect thereto. Tenant's reimbursement to
Landlord for such amounts shall be deemed Additional Rent, and shall
include all sums disbursed, incurred or deposited by Landlord including
Landlord's costs, expenses and reasonable attorneys' fees with interest
thereon at the Interest Rate.
(i) LANDLORD'S DISCLAIMER. Except as specifically set
forth elsewhere in this Lease, Landlord and Landlord's Agents shall not
be liable for any loss or damage to persons or property resulting from
fire, explosion, falling plaster, glass, tile or sheet rock, steam,
gas, electricity, water or rain which may leak from any part of the
Premises, or from the pipes, appliances or plumbing works therein or
from the roof, street or subsurface or whatsoever, or from any act or
omission of Tenant or any other tenant of any building of which the
Premises is a part. Tenant shall give prompt written notice to Landlord
in case of a casualty or accident or in the event of repair needed to
the Premises.
(j) FAILURE TO PAY. The failure of Tenant to obtain and
pay for any insurance required to be obtained and paid for by it
hereunder shall be deemed a "material default" under Paragraph 28(a)(i)
of this Lease.
25. WAIVED OF SUBROGATION. Landlord and Tenant each hereby waive
all rights of recovery against the other on account of loss and damage
occasioned to such waiving party for its property or the property of others
under its control to the extent that such loss or damage is insured against
under any insurance policies which may be in force at the time of such loss or
damage. Tenant and Landlord shall, upon obtaining policies of insurance required
hereunder give notice to the insurance carrier that the foregoing mutual waiver
of subrogation is contained in this Lease and Tenant and Landlord shall cause
each insurance policy obtained by such party to provide that the insurance
company waives all right of recovery by way of subrogation against either
Landlord or Tenant in connection with any damage covered by such policy.
26. DAMAGE OR DESTRUCTION.
(a) LANDLORD'S OBLIGATION TO REBUILD. If the Premises are
damaged or destroyed, Landlord shall promptly and diligently repair the
Premises unless it has the right to terminate this Lease as provided in
subparagraph (b) next below and it elects to so terminate.
(b) LANDLORD'S RIGHT TO TERMINATE. Landlord shall have
the right to terminate this Lease following damage to or destruction of
the Premises if any of the following occurs:
(i) insurance proceeds are not available to
Landlord to pay one hundred percent (100%) of the cost to
substantially repair the damaged or destroyed Premises,
excluding and deductible for which
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Tenant shall be responsible pursuant to Paragraph 24(d) above
and excluding any shortfall which Tenant agrees to pay;
(ii) the Premises cannot, pursuant to a
certificate to the parties from Landlord's general contractor
in charge of construction, with reasonable diligence, be
substantially repaired by Landlord within one hundred twenty
(120) days after the date of the damage or destruction;
(iii) the Premises cannot be safely repaired
because of the presence of hazardous factors, including, but
not limited to, active earthquake faults, radiation, chemical
waste and other similar dangers;
(iv) the Premises are destroyed or damaged during
the last twelve (12) months of the Term; or
(v) Tenant is in default under the terms of this
Lease at the time of such damage or destruction.
If Landlord elects to terminate this Lease, and Tenant fails
to agree with Landlord as to its rights to preserve this Lease, then Landlord
shall give Tenant written notice of its election to terminate as soon as
practicably possible, but in any event not later than thirty (30) days after it
has knowledge of such damage or destruction, and this Lease shall terminate
retroactively as of the date of such damage or destruction. If this Lease is
terminated, Landlord shall retain all the insurance proceeds resulting from such
damage, except for those proceeds payable under policies obtained by Tenant
which specifically insure Tenant's Personal Property and such other property
which Tenant had the right to remove upon termination of this Lease. If Landlord
elects not to terminate the Lease, Landlord shall promptly, following the date
of such damage or destruction, commence the process of obtaining necessary
permits and approvals, and shall commence repair of the Premises or the Building
as soon as practicable and thereafter prosecute the same diligently to
completion, in which event this Lease will continue in full force and effect.
All insurance proceeds from insurance required under Paragraph 24, excluding
proceeds for trade fixtures, equipment and other Personal Property of Tenant,
and such other property which Tenant had the right to remove upon termination of
this Lease, shall be disbursed and paid to Landlord. Tenant shall be required to
pay to Landlord the amount of any deductibles payable by Tenant in connection
with any insured casualties, unless the casualty was caused by the negligence or
willful misconduct of Landlord.
(c) LIMITED OBLIGATION TO REPAIR. Landlord's obligation, should it
elect or be obligated to repair or rebuild, shall be limited to the
basic Building and the Tenant Improvements and additional improvements
with respect to which insurance proceeds are available. Landlord shall
make available to Tenant any portion of insurance proceeds it receives
which are allocable to the Alterations constructed by Tenant pursuant
to this Lease provided Tenant is not then in default.
(d) ABATEMENT OF RENT. Rent shall be temporarily abated
proportionately, but only to the extent of any proceeds received by
Landlord from
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rental abatement insurance described in Paragraph 24(b)(iii),
during any period when, by reason of such damage or
destruction, Landlord reasonably determines that there is substantial
interference with Tenant's use of the Premises, having regard to the
extent to which Tenant may be required to discontinue Tenant's use of
the Premises. Such abatement shall commence upon such damage or
destruction and end upon substantial completion by Landlord of the
repair or reconstruction which Landlord is obligated or undertakes to
do. Subject to the indemnity provisions in favor of Tenant set forth in
Paragraph 24(a) above, Tenant shall not be entitled to any compensation
or damages from Landlord for loss of the use of the Premises, damage to
Tenant's Personal Property or any inconvenience occasioned by such
damage, repair or restoration. Landlord shall use reasonable efforts to
minimize interference with Tenant's use and occupancy of the Premises.
Tenant hereby waives the provisions of Section 1932, Subdivision 2, and
Section 1933, Subdivision 4, of the California Civil Code, and the
provisions of any similar law hereinafter enacted.
(e) UNINSURED CASUALTY. Notwithstanding the provisions of
Paragraph 24 of this Lease, Landlord and Tenant hereby agree that each
party shall be obligated to contribute, on a dollar-for-dollar basis, a
sum of up to $25,000 each toward the repair of an uninsured casualty to
the Premises upon presentation of firm estimates of such repair by
Landlord's contractor in charge of construction; provided, however,
that if Landlord's architect or general contractor in charge of
construction certifies to Landlord and Tenant that the estimated cost
of the repair of such uninsured casualty shall be in excess of Fifty
Thousand Dollars ($50,000), then either party may terminate this Lease
upon ten (10) days prior written notice to the other; provided,
however, that within ten (10) days after receipt of such ten (10) day
notice, the party receiving such notice may elect to keep the Lease in
full force and effect by agreeing to pay all of the costs of repair of
such uninsured casualty in excess of Fifty Thousand Dollars ($50,000),
in which event each party shall contribute its Twenty-Five Thousand
Dollars ($25,000) and the party agreeing to pay for the excess shall do
so upon presentation of invoice by Landlord's general contractor in
charge of construction. If neither party elects to terminate as
aforesaid, then the entire cost of repair of such uninsured casualty
shall be borne equally by the parties.
27. CONDEMNATION.
(a) TOTAL TAKING - TERMINATION. If title to all of the
Premises or so much thereof is taken for any public or quasi-public use
under any statute or by right of eminent domain so that reconstruction
of the Premises will not, in Landlord's and Tenant's mutual opinion,
result in the Premises being reasonably suitable for Tenant's continued
occupancy for the uses and purposes contemplated by this Lease, this
Lease shall terminate as of the date possession of the Premises or part
thereof be taken.
(b) PARTIAL TAKING. If any part of the Premises is taken
and the remaining part is reasonably suitable for Tenant's continued
occupancy for the
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purposes and uses permitted by this Lease, as determined
in good faith by Tenant, this Lease shall, as to the part so
taken, terminate as of the date that possession of such part of the
Premises is taken and the Rent and other sums payable hereunder shall
be reduced in the same proportion that the floor area of the portion of
the Premises so taken (less any addition thereto by reason of any
reconstruction) bears to the original floor area of the Premises.
Landlord shall, at its own cost and expense, make all necessary repairs
or alterations to the Premises so as to make the portion of the
Premises not taken a complete unit. Rent and other sums payable
hereunder shall be temporarily abated during such restoration period in
proportion to the degree to which Tenant's use of Premises is impaired.
Each party hereby waives the provisions of Section 1265.130 of the
California Code of Civil Procedure allowing either party to petition
the Superior Court to terminate this Lease in the event of a partial
taking of the Building or Premises.
(c) NO APPORTIONMENT OF AWARD. Subject to the last
sentence of this Paragraph 27(c), no award for any partial or entire
taking shall be apportioned, it being agreed and understood that
Landlord shall be entitled to the entire award for any partial or
entire taking. Tenant assigns to Landlord its interest in any award
which may be made in such taking or condemnation, together with any and
all rights of Tenant arising in or to the same or any part thereof.
Nothing contained herein shall be deemed to give Landlord any interest
in or require Tenant to assign to Landlord any separate award made to
Tenant for the taking of Tenant's Personal Property, for the
interruption of Tenant's business, or its moving costs, or for the loss
of its goodwill.
(d) TEMPORARY TAKING. No temporary taking of the Premises
shall terminate this Lease or give Tenant any right to any abatement of
Rent. Any award made to Tenant by reason of such temporary taking shall
belong entirely to Tenant and Landlord shall not be entitled to share
therein. Each party agrees to execute and deliver to the other all
instruments that may be required to effectuate the provisions of this
subparagraph.
(e) SALE UNDER THREAT OF CONDEMNATION. A sale by Landlord
to any authority having the power of eminent domain, either under
threat of condemnation or while condemnation proceedings are pending,
shall be deemed a taking under the power of eminent domain for all
purposes of this Paragraph.
28. ASSIGNMENT AND SUBLETTING.
(a) LANDLORD'S CONSENT. Tenant shall not enter into any
Sublease without Landlord's prior written consent, which consent shall
not be unreasonably withheld. Any attempted or purported Sublease of
the Premises or any portion thereof without Landlord's prior written
consent shall be void and confer no rights upon any third person and,
at Landlord's election, shall terminate this Lease.
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(b) SUBLEASE FORM. Each Sublease to which Landlord has
consented shall be in a form satisfactory to Landlord, and shall be
executed by Tenant and Subtenant. Each Subtenant shall agree in
writing, for the benefit of Landlord, to assume, to be bound by, and to
perform the terms, conditions and covenants of this Lease to be
performed by Tenant. In no event shall Tenant be released from personal
liability for the performance of each term, condition and covenant of
this Lease by reason of Landlord's consent to a Sublease unless
Landlord specifically grants such release in writing.
(c) NO WAIVER. Consent by Landlord to any particular
Sublease shall not be deemed to be a consent to any subsequent
Sublease.
(d) INFORMATION TO BE FURNISHED. If Tenant desires at any
time to sublease the Premises or any portion thereof, it shall first
notify Landlord of its desire to do so and shall submit in writing to
Landlord:
(i) the name of the proposed Subtenant:
(ii) the nature of the proposed Subtenant's
business to be carried on in the Premises;
(iii) the terms and provisions of the proposed
Sublease and a copy of the proposed Sublease agreement
containing a description of the premises proposed to be
sublet; and
(iv) such financial information, including
financial statements, as Landlord may reasonably request
concerning the proposed Subtenant.
(e) LANDLORD'S ALTERNATIVES. As soon as reasonably
possible, but not later than ten (10) days after Landlord's receipt of
the information specified in Paragraph 28(d), Landlord may, by written
notice to Tenant, elect:
(i) to lease for its own account the Premises or
the portion thereof so proposed to be subleased by Tenant,
upon the same terms as those offered to the proposed Subtenant
but on a form acceptable to Landlord;
(ii) (if such proposed sublease area is in excess
of 66 percent of the total floor area of the Premises) to
lease for its own account the Premises or the portion thereof
so proposed to be subleased by Tenant to any person upon any
terms desired by Landlord;
(iii) consent to the Sublease by Tenant; or
(iv) refuse its consent to the Sublease which
shall not be unreasonably withheld.
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If Landlord elects to proceed in accordance with either subparagraph
28(e)(i) or 28(e)(ii), Landlord and Tenant shall enter into a limited release
agreement whereby Tenant is relieved of any liability, including without
limitation, the payment of Rent, with respect to such released portion of the
Premises during the entire term of the Sublease, whether or not the Sublease is
terminated prior to the expiration of its term for any cause whatsoever, other
than the willful act of Tenant. Upon the expiration of the term of the Sublease
between Landlord and the new tenant for such released space; provided the Term
of this Lease has not expired, Landlord shall return possession of the released
space to Tenant in substantially the same condition, normal wear and tear
excepted, it was in when it was released and delivered to Landlord, and Tenant
shall resume all its obligations under this Lease with respect to such space,
including, without limitation, the payment of Rent attributable to such space.
If Landlord proceeds with subparagraph 28(e)(i) or 28(e)(iii) above,
Landlord or Tenant, as the case may be, may thereafter enter into a valid
Sublease of the Premises or portion thereof, upon the terms and conditions and
with the proposed Subtenant set forth in the information furnished by Tenant of
Landlord pursuant to subparagraph 28(d), subject, however, to the condition that
any excess of the Subrent over the Rent required to be paid by Tenant hereunder
shall, in either case, be divided equally between Landlord and Tenant after
first deducting from any such excess Tenant's actual costs (not in excess of
market or "customary" costs), as incurred, of brokerage fees, subtenant
improvements and related subleasing costs (but excluding Tenant's holding or
vacancy costs). Any such Subrent to be paid to Landlord or Tenant pursuant
hereto shall be payable to Landlord or Tenant as and when due and payable by the
Subtenant.
(f) PRORATION. If a portion of the Premises is subleased,
the pro rata share of the Rent attributable to such partial area of the
Premises shall be determined by Landlord by dividing the Rent payable
by Tenant hereunder by the total leasable square footage of the
Premises and multiplying the resulting quotient (the per square foot
rent) by the number of square feet of the Premises which are subleased.
(g) EXECUTED ORIGINAL. No Sublease shall be valid nor
shall any Subtenant take possession of the Premises until a fully
executed original of the Sublease agreement has been delivered to
Landlord.
(h) TRANSFER TO PURCHASER. A transfer of this Lease to a
purchaser of Tenant or substantially all of the assets of Tenant shall
be deemed a Sublease.
(i) TENANT AFFILIATES. Notwithstanding any provision to
the contrary within Paragraph 28 of this Lease, Landlord hereby grants
to Tenant the right to assign this Lease or to sublet all or any
portion of the Premises to any entity controlled by, controlling or
under common ownership with Tenant so long as:
(i) Tenant remains fully liable under the terms
of this Lease,
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(ii) Tenant provides Landlord with prior written
notice of the identity and notice address of such assignee or
subtenant, and
(iii) such assignee or subtenant complies with all
of the terms and conditions of this Lease.
29. DEFAULT.
(a) TENANT'S DEFAULT. At the option of Landlord, a
default under this Lease by Tenant shall exist if any of the following
events shall occur:
(i) If Tenant shall have failed to pay Rent or
any other sum required to be paid hereunder after ten
(10) days written notice that such payment is due; or
(ii) If Tenant shall have failed to cure a
"material non-monetary default" within ten (10) days written
notice of such default from Landlord. For purposes hereof,
"material non-monetary default" shall mean and refer to a
default by Tenant with respect to the provisions of
Paragraph 24 (Insurance), Paragraph 30 (Subordination) or
Paragraph 33 (Estoppel Certificate);
(iii) If Tenant shall have failed to perform any
term, covenant or condition of this Lease except those
requiring the payment of money, and Tenant shall have failed
to cure such breach within thirty (30) days after written
notice from Landlord where such breach could reasonably be
cured within such thirty (30) day period; provided, however,
that where such failure could not reasonably be cured within
the thirty (30) day period, then Tenant shall not be in
default unless it fails to commence such cure within the
thirty (30) day period and diligently thereafter prosecute
the same to completion; or
(iv) If Tenant shall have assigned its assets
for the benefit of its creditors in a bankruptcy or
receivership context; or
(v) If the sequestration or attachment of or
execution on any material part of Tenant's Personal Property
essential to the conduct of Tenant's business shall have
occurred, and Tenant shall have failed to obtain a return or
release of such Personal Property within 90 days thereafter,
or prior to sale pursuant to such sequestration, attachment
or levy, whichever is earlier; or
(vi) If Tenant shall have failed to continuously
or uninterruptedly conduct its business in the Premises, or
shall have abandoned the Premises; or
(vii) If a court shall have made or entered any
decree or order other than under the bankruptcy laws of the
United States adjudging
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Tenant to be insolvent; or approving as properly filed
a petition seeking reorganization of Tenant; or directing the winding
up or liquidation of Tenant and such decree or order shall have
continued for a period of 90 days; or
(b) REMEDIES. Upon a default, Landlord shall have the following
remedies, in addition to all other rights and remedies provided by law or
otherwise provided in this Lease, to which Landlord may resort cumulatively or
in the alternative:
(i) Landlord may continue this Lease in full force and
effect, and this Lease shall continue in full force and effect as long
as Landlord does not terminate this Lease, and Landlord shall have the
right to collect Rent when due;
(ii) Landlord may terminate Tenant's right to possession
of the Premises at any time by giving written notice to that effect,
and relet the Premises or any part thereof. Tenant shall be liable
immediately to Landlord for all costs Landlord incurs in reletting the
Premises or any part thereof, including, without limitation, broker's
commissions, and expenses of cleaning, redecorating, and further
improving the Premises and like costs. Reletting may be for a period
shorter or longer than the remaining Term of this Lease. Acts of
maintenance, efforts to relet the Premises or the appointment of a
receiver on Landlord's initiative to protect Landlord's interest under
this Lease shall not constitute a termination of Tenant's right to
possession. Upon termination, Landlord shall have the right to remove
all of Tenant's Personal Property and store same at Tenant's cost and
to recover from Tenant as damages:
A. The worth at the time of award of any unpaid Rent and
other sums due and payable which had been earned at the time of
termination; plus
B. The worth at the time of award of the amount by which
the unpaid Rent and other sums which would have been payable after
termination until the time of award exceeds the amount of such Rent
loss that Tenant proves could have been reasonably avoided; plus
C. The worth at the time of award of the amount by which
the unpaid Rent and other sums due for the balance of the Term after
the time of award exceeds the amount of such Rent loss that Tenant
proves could be reasonably avoided; plus
D. Any other amounts to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform
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Tenant's obligations under this Lease, or which, in the ordinary
course of things, would be likely to result therefrom, including,
without limitation, any costs or expenses incurred by Landlord: (i) in
retaking possession of the Premises; (ii) in maintaining, repairing,
preserving, restoring, replacing, cleaning, altering or rehabilitating
the Premises or any portion thereof, including such acts for reletting
to a new tenant or tenants; (iii) for leasing commissions; or (iv) for
any other costs necessary or appropriate to relet the Premises; plus
E. At Landlord's election, such other amounts and
remedies in addition to or in lieu of the foregoing as may be permitted
from time to time by the laws of the State of California including,
without limitation, the remedies provided by California Civil Code
Section 1951.4, as amended from time to time.
The "worth at the time of award" of the amounts referred to in
Paragraphs 29(b)(ii)(A) and 29(b)(ii)(B) is computed by allowing interest at the
Interest Rate on the unpaid rent and other sums due and payable from the
termination date through the date of award. The "worth at the time of award" of
the amount referred to in Paragraph 29(b)(ii)(C) is computed by discounting such
amount at the discount rate of the Federal Reserve Bank of San Francisco at the
time of award plus one percent (1%). Tenant waives redemption or relief from
forfeiture under California Code of Civil Procedure Sections 1174 and 1179, or
under any other present or future law, in the event Tenant is evicted or
Landlord takes possession of the Premises by reason of any default of Tenant
hereunder; or
(iii) Landlord may, with or without terminating this Lease,
re-enter the Premises and remove all persons and property from the
Premises; such property may be removed and stored in a public warehouse
or elsewhere at the cost of and for the account of Tenant. No re-entry
or taking possession of the Premises by Landlord pursuant to this
subparagraph shall be construed as an election to terminate this Lease
unless a written notice of such intention is given to Tenant.
(c) LANDLORD'S DEFAULT. Landlord shall not be deemed to be
in default in the performance of any obligation required to be performed by it
hereunder unless and until it has failed to perform such obligation within
thirty (30) days after receipt of written notice by Tenant to Landlord
specifying the nature of such default; provided, however, that if the nature of
Landlord's obligation is such that more than thirty (30) days are required for
its performance, then Landlord shall not be deemed to be in default if it shall
commence such performance within such thirty (30) day period and thereafter
diligently prosecute the same to completion; provided, however, that if such
default by Landlord can be cured by the payment of money, Tenant, at its
election, may spend such money as is reasonably necessary to cure such default
and thereafter invoice Landlord for the amount so spent, which Landlord shall
promptly pay; provided, however, that in no event may Tenant offset or deduct
such invoiced amount from rental payable under this Lease. Notwithstanding
anything herein contained to the
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contrary, Landlord shall immediately cure any default that poses a threat of
injury or damage to the Premises for which Landlord is responsible.
30. SUBORDINATION. Without the necessity of any additional
document being executed by Tenant for the purpose of effecting a subordination,
and at the election of Landlord or any bona fide mortgagee or deed of trust
beneficiary with a lien on all or portion of the Premises or any ground lessor
with respect to the Project and/or Building, this Lease shall be subject and
subordinate at all times to:
(a) all ground leases or underlying leases which may now
exist or hereafter be executed affecting the Building or the land upon
which the Building is situated or both, and
(b) the lien of any mortgage or deed of trust which may
now exist or hereafter be executed in any amount for which the
Building, land, ground leases or underlying leases, or Landlord's
interest or estate in any of said items is specified as security.
Notwithstanding the foregoing, Landlord shall have the right to subordinate or
cause to be subordinated any such ground leases or underlying leases or any such
liens to this Lease. In the event that any ground lease or underlying lease
terminates for any reason or any mortgage or deed of trust is foreclosed or a
conveyance in lieu of foreclosure is made for any reason, Tenant shall,
notwithstanding any subordination, attorn to and become the Tenant of the
successor in interest to Landlord. Tenant covenants and agrees to execute and
deliver, upon demand by Landlord and in the form requested by Landlord, any
additional documents evidencing the priority or subordination of this Lease with
respect to any such ground leases or underlying leases or the lien of any such
mortgage or deed of trust. Tenant's failure within ten (10) days after actual
receipt of such additional documents by an officer or Tenant, to execute and
deliver such additional documents shall constitute a "material non-monetary
default" hereunder. Notwithstanding any subordination, or any such termination
or foreclosure, Tenant's right to quiet possession of the Premises shall not be
disturbed so long as Tenant is not in default of this Lease and so long as
Tenant shall pay Rent and perform and observe all obligations of Tenant under
this Lease, unless this Lease is otherwise terminated pursuant to its terms.
Landlord will deliver to counsel for the existing or any future first mortgage
lender with a lien encumbering the Building a form of nondisturbance agreement
presented to Landlord by Tenant, and request that such lender either execute
such form, or execute a nondisturbance agreement which provides substantially
the same protections requested by Tenant, and Landlord shall use its
commercially reasonable best efforts to persuade such lender to execute and
return such a qualified nondisturbance agreement to Tenant as soon as reasonably
possible.
31. NOTICES. Any notice or demand required or desired to be given
under this Lease shall be in writing and shall be personally served or in lieu
of personal service may be given by mail. If given by mail, such notice shall be
deemed to have been given when seventy-two (72) hours have elapsed from the time
when such notice was deposited in the United States mail, registered or
certified, and postage prepaid, return receipt requested, addressed to the party
to be served. At the date of execution of this Lease, the addresses of Landlord
and Tenant are as set forth in Paragraph 1; however, for all notices other than
default notices, Tenant may
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deliver a single notice to Landlord at the address for Menlo Business Park,
as set forth in said Paragraph 1. After the Commencement Date, the address of
Tenant shall be the address of the Premises. Either party may change its
address by giving notice of same in accordance with this paragraph.
32. ATTORNEYS' FEES. If either party brings any action or legal
proceeding with respect to an alleged breach of any provision of this Lease, to
recover rent or other sums due, to terminate this Lease or to enforce, protect
or establish any term, condition or covenant of this Lease or the right of
either party hereunder or at law or in equity, the prevailing party shall be
entitled to recover as a part of such action or proceedings, or in a separate
action brought for that purpose, reasonable attorneys' fees and costs.
33. ESTOPPEL CERTIFICATE. Tenant shall within seven (7) days
following written request by Landlord:
(i) Execute and deliver to Landlord estoppel
certificates, in a form prepared by Landlord (a) certifying that this
Lease is unmodified and in full force and effect or, if modified,
stating the nature of such modification and certifying that this Lease,
as so modified, is in full force and effect and the date to which the
Rent and other charges are paid in advance, if any, and (b)
acknowledging that there are not, to Tenant's knowledge, any uncured
defaults on the part of the Landlord or stating the nature of any
uncured defaults; (c) evidencing Tenant's understanding with respect to
the status of the Lease as may be required either by a lender making a
loan to Landlord to be secured by deed of trust or mortgage covering
the Premises or a purchaser of the Premises from Landlord; (d)
certifying the current monthly rent amount and the amount and form of
Security Deposit on deposit with Landlord; and (e) certifying to such
other information as Landlord, mortgagees, prospective mortgagees and
buyers may reasonably request.
Tenant's failure to deliver an estoppel certificate within ten (10)
days after delivery of Landlord's written request therefor to an officer of
Tenant shall be a "material non-monetary default" hereunder and shall be
conclusive upon Tenant (a) that this Lease is in full force and effect, without
modification except as may be represented by Landlord; (b) that there are now no
uncured defaults in Landlord's performance; (c) that no more than one required
rental payment has been paid in advance; and (d) that the other information
requested by Landlord is correct as stated in the form presented by Landlord.
(ii) Deliver to Landlord the current financial statements
of Tenant, and financial statements of the two (2) years prior to the
current financial statement year, with an opinion of a certified public
accountant, including a balance sheet and profit and loss statement for
the most recent prior year, all prepared in accordance with generally
accepted accounting principles consistently applied.
35
<PAGE>
34. TRANSFER OF THE PREMISES BY LANDLORD. In the event of any
conveyance of the Premises and assignment by Landlord of this Lease, Landlord
shall be and is hereby entirely released from all liability under any and all of
its covenants and obligations contained in or derived from this Lease occurring
after the date of such conveyance and assignment, but only upon a full
assumption by the transferee of all obligations of Landlord under this Lease
from and after the date of such transfer, and Tenant agrees to attorn to any
entity purchasing or otherwise acquiring the Premises.
35. LANDLORD'S RIGHT TO PERFORM TENANT'S COVENANTS. If Tenant
shall at any time fails to make any payment or perform any other act on its part
to be made or performed under this Lease, Landlord may, but shall not be
obligated to, and without waiving or releasing Tenant from any obligation of
Tenant under this Lease, make such payment or perform such other act to the
extent Landlord may deem desirable and, in connection therewith, pay expenses
and employ counsel. All sums so paid by Landlord and all penalties, interest and
costs in connection therewith shall be due and payable by Tenant on the next day
after such payment by Landlord, together with interest thereon at the Interest
Rate from such date to the date of payment thereof by Tenant to Landlord, plus
collection costs and attorneys' fees. Landlord shall have the same rights and
remedies for the nonpayment thereof as in the case of default in the payment of
Rent.
36. TENANT'S REMEDY. The obligations of Landlord do not constitute
the personal obligation of the individual partners, trustees, directors,
officers or shareholders of Landlord. If Landlord shall fail to perform any
covenant, term, or condition of this Lease upon Landlord's part to be performed,
Tenant shall be required to deliver to Landlord written notice of the same. If,
as a consequence of such default, Tenant shall recover a money judgment against
Landlord, such judgment shall be satisfied only out of the proceeds of sale
received upon execution of such judgment and levied thereon against the right,
title and interest of Landlord in the Building and out of Rent or other income
from such property receivable by Landlord or out of consideration received by
Landlord from the sale or other disposition of all or any part of Landlord's
right, title or interest in the Premises, and neither Landlord nor Landlord's
Agents shall be liable for any deficiency. Nothing contained in this Paragraph
36 shall limit or reduce Tenant's rights to pursue any legal remedies it may
have against third parties, including the general contractor and all
subcontractors who constructed the Building, the Tenant Improvements or any
Alterations.
37. MORTGAGE PROTECTION. In the event of any default on the part
of Landlord, Tenant will give notice by registered or certified mail to any
beneficiary of a deed of trust of mortagee of a mortgage covering the Premises
who has provided Tenant with notice of their interest together with an address
for receiving notice, and shall offer such beneficiary or mortgagee a reasonable
opportunity to cure the default, including time to obtain possession of the
Premises by power of sale or judicial foreclosure, if such should prove
necessary to effect a cure.
38. BROKERS. Each party warrants and represents to the other that
it has had no dealings with any real estate broker, agent or finder in
connection with the negotiation of this Lease or the introduction of the parties
to this transaction, except for the Lewis & Tarlton Company, and that it knows
of no other real estate broker, agent or finder who is or might be
36
<PAGE>
entitled to a commission or fee in connection with this Lease. Further, each
party agrees to indemnify and hold harmless the other party and its Agents
from and against any and all liabilities or expenses, including attorneys'
fees and costs, arising out of or in connection with claims made by any other
broker or individual for commissions or fees resulting from the execution of
this Lease by the indemnifying party. All commissions due Lewis & Tarlton
Company shall be paid by Landlord.
39. ACCEPTANCE. Delivery of this Lease, duly executed by Tenant,
constitutes an offer to lease the Premises, and under no circumstances shall
such delivery be deemed to create an option or reservation to lease the Premises
for the benefit of Tenant. This Lease shall only become effective and binding
upon full execution hereof by Landlord, delivery of a signed copy to Tenant and
the satisfaction of the Contingency set forth in Paragraph 44(k) below. Upon
acceptance of Tenant's offer to lease under the terms hereof Landlord shall be
entitled to retain the Security Deposit and apply same to any damages, costs and
expenses incurred by Landlord in the event of Tenant's failure to satisfy the
provisions of Paragraph 44(k) below.
40. RECORDING. Neither party shall record this Lease nor a short
form memorandum thereof.
41. [THIS PARAGRAPH INTENTIONALLY LEFT BLANK]
42. MODIFICATIONS FOR LENDER. If, in connection with obtaining
financing for the Premises or any portion thereof, Landlord's lender shall
request reasonable modification to this Lease as a condition to such financing,
Tenant shall not unreasonably withhold, delay or defer its consent thereto,
provided such modifications do not in any way adversely affect Tenant's rights
of the peaceful use and possession of the Premises pursuant to the terms of this
Lease.
43. SEWER FEES. Tenant acknowledges that Menlo Business Park Joint
Venture has paid the connection fees for the entire Project. Tenant shall
promptly reimburse Landlord as Additional Rent, upon presentation of invoice,
for payments made by Landlord to Menlo Business Park Joint Venture for the fees
attributable to Tenant's use of the Premises, based upon a formula determined by
the West Bay Sanitary District on the basis of Tenant's use of the Premises and
the number of Tenant's employees therein.
44. GENERAL.
(a) CAPTIONS. The captions and headings used in this
Lease are for the purpose of convenience only and shall not be
construed to limit to extend the meaning of any part of this Lease.
(b) EXECUTED COPY. Any fully executed copy of this Lease
shall be deemed an original for all purposes.
(c) TIME. Time is of the essence for the performance of
each term, condition and covenant of this Lease.
37
<PAGE>
(d) SEPARABILITY. If any one or more of the provisions
contained herein shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provision of this Lease,
but this Lease shall be construed as if such invalid, illegal or
unenforceable provision is not part of the Lease.
(e) CHOICE OF LAW. This Lease shall be construed and
enforced in accordance with the laws of the State of California.
(f) GENDER; SINGULAR, PLURAL. When the contest of this
Lease requires, the neuter gender includes the masculine, the feminine,
a partnership or corporation or joint venture, and the singular
includes the plural.
(g) BINDING EFFECT. The covenants and agreement contained
in this Lease shall be binding on the parties hereto and on their
respective successors and assigns to the extent this Lease is
assignable.
(h) WAIVER. The waiver by Landlord of any breach of any
term, condition or covenant, of this Lease shall not be deemed to be a
waiver of such provision or any subsequent breach of the same or any
other term, condition or covenant of this Lease. The subsequent
acceptance of Rent hereunder by Landlord shall not be deemed to be a
waiver of any preceding breach at the time of acceptance of such
payment. No covenant, term or condition of this Lease shall be deemed
to have been waived by Landlord unless such waiver is in writing signed
by Landlord.
(i) ENTIRE AGREEMENT. This Lease is the entire agreement
between the parties, and there are no agreements or representations
between the parties except as expressed herein. Except as otherwise
provided herein, no subsequent change or addition to this Lease shall
be binding unless in writing and signed by the parties hereto.
(j) AUTHORITY. If Tenant is a corporation or a
partnership, each individual executing this Lease on behalf of said
corporation or partnership, as the case may be, represents and warrants
that he is duly authorized to execute and deliver this Lease on behalf
of said entity in accordance with its corporate bylaws, statement of
partnership or certificate of limited partnership, as the case may be,
and that this Lease is binding upon said entity in accordance with its
terms. Landlord, at its option, may require a copy of such written
authorization to enter into this Lease. The failure of Tenant to
deliver the same to Landlord within seven (7) days of Landlord's
request therefor shall be deemed a default under this Lease. Further,
each individual executing this Lease on behalf of Landlord represents
to Tenant that (i) Landlord is a California general partnership, the
partners of which are the entities identified collectively herein as
Landlord, (ii) such individual has the authority to execute and deliver
this Lease on behalf of the Landlord and on behalf of the entity in
whose name he has signed this Lease, (iii) Landlord has the right,
title and interest necessary to enter into this Lease, and
38
<PAGE>
(iv) on execution hereof, this Lease shall become a binding obligation
of Landlord. Landlord shall provide Tenant with a copy of Landlord's
title insurance policy on request by Tenant. Tenant shall be entitled
to rely, for all purposes, on any notice, waiver or other advice
received from either entity comprising Landlord, any successor or
additional such entity, and from any authorized agent of any such
entity, as having been given with the full authority of Landlord.
(k) CONTINGENCY. Landlord and Tenant hereby agree that
Landlord's obligations and Tenant's rights under this Lease are
expressly conditioned upon Tenant's satisfaction of all its obligations
(past and present) under the Building 15 Lease. In the event Tenant
fails to satisfy all its monetary obligations (past and present) under
the Building 15 Lease as of the Commencement Date, Landlord may, but
shall not be obligated to, terminate all of Tenant's rights hereunder,
in which case, Tenant shall be obligated, upon such termination, to
indemnify Landlord for any and all losses or unreimbursed expenses
incurred by Landlord in connection with this Lease as of such date,
including but not limited to, architects' fees, engineering fees,
appraisers' fees, loan fees and good faith deposits paid by Landlord in
connection with the design and construction of the Tenant Improvements;
and attorneys' fees incurred by Landlord in connection with this Lease.
In the event Tenant satisfies all of its monetary obligations under the
Building 15 Lease on or before the Commencement Date or prior to
Landlord's termination of Tenant's rights hereunder, Tenant shall be
allowed to occupy the Premises, at which point in time, Tenant shall be
relieved of its obligation to pay rent under the Building 15 Lease;
provided that Tenant agrees to diligently pursue the satisfaction of
all its obligations under Paragraphs 12, 14 and 15 of the Building 15
Lease. In the event Tenant fails to satisfy all or said obligations
within thirty (30) days of Tenant's occupancy of the Premises, Landlord
may, but shall not be obligated to, satisfy such obligations itself and
assess all costs of the same, together with a five percent (5%)
management fee against Tenant as Additional Rent; which amount shall
bear interest at the Interest Rate until it is paid by Tenant.
(l) RELEASE. Subject to the provisions of Paragraph 44(k)
above, Landlord and Tenant hereby agree that upon satisfaction by
Tenant of all its obligations (past and present) under the Building 15
Lease, the Building 15 Lease shall be terminated and neither party
shall have any further rights or obligations to the other, except as
set forth in this Lease.
(m) EXHIBITS. All exhibits, amendments, riders and
addenda attached hereto are hereby incorporated herein and made a part
hereof.
(n) LEASE SUMMARY. The Lease Summary attached to this
Lease is intended to provide general information only. In the event of
any inconsistency between the Lease Summary and the specific provisions
of this Lease, the specific provisions of this Lease shall prevail.
39
<PAGE>
THIS SPACE INTENTIONALLY LEFT BLANK
40
<PAGE>
THIS LEASE is effective as of the date the last signatory
necessary to execute the Lease shall have executed this Lease.
TENANT
Dated: MARCH 21, 1988 ETAK, INC., a California corporation,
--------
By: /s/ Matt Pittchon
----------------------
Its: V.P. Finance
------------------
By:
----------------------
Its:
------------------
LANDLORD:
Dated: __________, 198_ MENLO BUSINESS PARK,
a California general partnership,
By: /s/ John O. Lewis
-----------------------
JOHN O. LEWIS
Its: General Partner
By: OLTMANS INVESTMENT COMPANY, a
California limited partnership
Its: General Partner
By: /s/ J. O. Oltmans
---------------------
J. O. OLTMANS, II,
General Partner
By: /s/ R.M.Holmes
--------------------
R. M. HOLMES,
General Partner
PATRICIAN ASSOCIATES, INC.,
a California corporation,
By: /s/ Karen E. Shaff
----------------------
Its: counsel
------------------
By: /s/ R.L. Mays
----------------------
Its:
------------------
<PAGE>
EXHIBIT A-1
SKETCH AND PLAN OF PROPERTY
<PAGE>
EXHIBIT A-2
MASTER PLAN AND SKETCH
<PAGE>
EXHIBIT B TO MASTER LEASE
WORK LETTER AGREEMENT
Tenant and Landlord are executing simultaneously with this Work Letter
Agreement a lease (the "Lease-) of even date herewith covering certain Premises
described in Paragraph 2 of the Lease. This Work Letter Agreement is
incorporated into said Lease as Exhibit "B" thereto. In consideration of the
mutual covenants contained in the Lease, Tenant and Landlord hereby agree that
the Premises shall be improved as set forth herein.
1. BASE BUILDING. Landlord and Tenant understand and acknowledge
that this Work Letter Agreement relates only to the construction of "non-base
building" improvements ("Tenant Improvements") for the Premises. The "base
building work" has been performed by Landlord at Landlord's sole cost and
expense and includes the elements shown on those certain construction drawings
for the Building prepared by Design and Engineering Systems of Redwood City,
California, entitled "Building No. 7" and consisting of sheets Al (Title Sheet
and Index), A2 (Site & Roof Plan - Enlarged Entry Plan #7), A6 (Floor Plan -
Reflected Soffit Plan and Building Section) and A7 (Exterior Elevations)
approved for construction on July 2, 1986, and shall also include a sanitary
line plumbed under the Building slab to the Premises, with additional saw cut
and drains for future toilets, all as shown on the Preliminary Plans described
in Paragraph 2(a) below. The term "base building work" also means and refers to
the building shell without floor covering, wall finish, drop ceilings or
lighting, or any mechanical, electrical or plumbing systems, but with all
Building Code required improvements for unfinished "shell" buildings.
2. PRELIMINARY PLANS AND SPECIFICATIONS.
(a) PRELIMINARY PLANS. At Tenant's request, Landlord shall
prepare preliminary plans and an outline of specifications ("Preliminary
Plans") for the construction of the Tenant Improvements for the Premises,
which Preliminary Plans are identified by title, date and job number on
Schedule 1 to this EXHIBIT "B".
(b) DESIGN INFORMATION. Tenant shall deliver to Landlord
not later than March 15, 1988, information (the "Design Information")
sufficient to permit Landlord to prepare the "Plans" described in Paragraph 3
below. Such information to be supplied by Tenant shall include all necessary
design criteria for the construction of the Tenant Improvements, including,
without limitation, the following information:
(i) The locations of doors (including the truck door),
partitioning, ceiling layouts, lighting fixtures, electrical outlets
and switches, and telephone outlets;
(ii) The location and extent of special floor loading;
(iii) The location and description of plumbing
requirements;
<PAGE>
work to be submitted to each approved subcontractor. Tenant shall be entitled
to attend the bid opening and shall be given reasonable prior notice thereof.
Within five (5) days after receipt of the bids and receipt of Landlord's
general contractor's evaluation of such bids, Tenant may either approve a
bid, disapprove all bids or approve one or more bids for negotiation. Should
Tenant approve any bids for negotiation, such negotiation shall be concluded
as soon as reasonably possible but in no event later than five (5) days after
commencement of negotiations by either acceptance of one bid or by rejection
of all. If the first bidding process does not result in the selection of a
subcontractor for each bid subcontract, Landlord shall commence the process
of submitting the disapproved Improvement Budget for bid for each remaining
subcontract to a maximum of three approved subcontractors. If Tenant does not
approve of one of the responding bids for each subcontract in the second
round of bidding, Landlord shall use its best good faith judgment and select
one of the bids in such second round for each subcontract, which bid shall
thereafter be deemed approved by Tenant. As soon as the foregoing bidding
procedure has been completed, Landlord shall prepare and deliver to Tenant
the final Improvement Budget setting forth the Costs of the Tenant
Improvements. In no event shall the final Improvement Budget exceed the
Improvement Allowance (as hereinafter defined) without Tenant's prior written
consent. Changes to the final Improvement Budget may be made only in
accordance with Paragraph 8 below.
3. IMPROVEMENT ALLOWANCE. Landlord hereby agrees to credit Tenant
with an improvement allowance in the amount of Four Hundred Sixty-Five Thousand
One Hundred Sixty-Nine Dollars ($465,169.00) (the "Improvement Allowance") for
the "Costs" of the Tenant Improvements. As used herein, the term "Costs" shall
mean and refer to all costs expended by Landlord relative to the design and
construction of the Tenant Improvements in the Premises (excluding the Mezzanine
space), including, but not limited to, the costs of equipment, material and
labor; contractor's field overhead and fee; architectural, design and
engineering fees; working drawings; governmental agency fees; testing and
inspection costs; sales and use taxes (but not real property taxes); permits;
plan check fees; bonds; and all other costs directly related to the construction
of the Tenant Improvements, plus an administrative fee in the amount of five
percent (5%) of said costs to be paid to The Lewis & Tarlton Company for
construction management. The Cost of the Tenant Improvements shall not include
architectural, design or engineering fees incurred in modifying the Plans after
Landlord and Tenant's approval thereof; working drawings (except as a result of
changes requested by Tenant pursuant to Paragraph 8 below) or other expenses not
itemized on the Improvement Budget without Tenant's prior written consent. In
the event that the Costs of the Tenant Improvements exceed the Improvement
Allowance and all or any portion of such excess is attributable to Tenant's
Changes in Plans (as provided in Paragraph 8 below), the Rent shall be adjusted
as provided in Subparagraph 5(b)(ii) of the Lease. Notwithstanding the
foregoing, it is the intent of Landlord and Tenant that the Tenant Improvements
shall be constructed on a "turn key" basis at a Cost not to exceed the
Improvement Allowance. In the event the final Costs exceed the Improvement
Allowance other than due to Changes in Plans as provided in Paragraph 8 below,
such excess Costs shall be the sole responsibility of, and shall be paid by,
Landlord.
4. CONSTRUCTION. Upon approval by the parties of the Improvement
Budget, Landlord shall use its commercially reasonable best efforts to
substantially complete the Improvements on or before the Anticipated
Commencement Date set forth in Paragraph 3(b) of the Lease. Landlord shall not
authorize construction of any Improvements which will result in
<PAGE>
"Outside Costs" (i.e., those Improvements which are not within the scope of
work contemplated by the Improvement Budget approved by the parties pursuant
to the provisions of Paragraph 4 above) unless: (i) Tenant shall have
delivered written approval to Landlord of such Outside Costs, or (ii) such
Outside Costs occur as a result of a "force majeure event" described below.
Landlord shall not be liable for any direct or indirect damages as a result
of delays in construction of the Improvements due to events ("force majeure
events") which generally affect the progress of construction beyond
Landlord's reasonable control, including, but not limited to, fire,
earthquake, inclement weather or other acts of God; strikes; boycotts;
availability of materials and labor; changes in governmental regulations or
requirements; changes in the Plans or Improvement Budget pursuant to
Paragraph 8 below; or Tenant Delays defined in Paragraph 4(d) of the Lease.
5. AUDITS. All costs associated with the Tenant Improvements will
be audited in accordance with generally accepted accounting practices. Landlord
hereby grants Tenant the exclusive right to review such cost audits before the
commencement of construction of the Tenant Improvements and upon completion;
provided, however, that Tenant shall give Landlord ten (10) days notice of its
election to review such cost audits.
6. CHANGES IN PLANS. From and after the date on which the Plans
have been approved by Landlord and Tenant pursuant to Paragraph 3 above, Tenant
shall have the right to request changes in the Plans, provided, however, that:
(a) such requests shall not result in any structural or material change in the
Tenant Improvements as determined by Landlord; (b) such requests conform to
applicable government regulations and, if necessary, are approved by the
applicable governmental agencies; (c) all additional charges of implementing
such changes including, without limitation, architectural fees, increases in
construction costs and other related charges shall be included in Landlord's
Costs and payable by Tenant in accordance with the provisions of Subparagraph
5(b)(ii) of the Lease; (d) such requests shall constitute an agreement on the
part of Tenant to any delay in completion of the Tenant Improvements caused by
reviewing, processing and implementing the changes; and (e) such requests shall
constitute "Tenant Delays" under the provisions of Paragraph 4(d) of the Lease.
Each request for changes in accordance herewith shall be in writing, and if
approved by Landlord, shall be approved in writing.
7. COMPLETION OF THE TENANT IMPROVEMENTS. The Premises shall be
deemed to be "Ready for Occupancy" when the work of construction of the Tenant
Improvements has been substantially completed in accordance with the Plans
(subject to the normal so-called to the normal so-called "punch list items") as
evidenced by the delivery to Landlord and Tenant of a certificate from
Landlord's architect with a copy of a temporary certificate (if legally required
as a condition of occupancy) permitting occupancy of the Premises issued by the
City of Menlo Park. Landlord shall diligently complete as soon as reasonably
possible any items of work and adjustment not completed when the Premises are
Ready For Occupancy. Subject to Tenant's obligation to pay certain Costs in
excess of the Improvement Allowance (as provided in Paragraph 5 above), Landlord
hereby agrees to indemnify, defend and hold Tenant harmless from and against any
liens filed in connection with the construction of the Tenant Improvements.
8. QUALITY OF CONSTRUCTION. Landlord and Tenant hereby agree that
all Tenant Improvements shall be constructed by J. M. O'Neill, Inc., (O'Neill)
pursuant to a contract
<PAGE>
on a "cost plus a negotiated fixed fee" basis with a guaranteed maximum
amount which shall be prepared based upon and through negotiation and
competitive bidding. Landlord hereby agrees that the general contractor's
construction manager shall have previous experience in similar projects which
is reasonably satisfactory to Tenant. Landlord warrants and represents to
Tenant that all work shall be done in a good and workmanlike manner and in
compliance with all applicable laws and lawful ordinances, by-laws,
regulations and orders of governmental authority and of the insurers of the
Building. Landlord makes no representations, warranties or guarantees,
expressed or implied, including warranties of merchantability or use of the
Premises, except as expressly set forth herein and in the Lease. Upon written
request by Tenant in each instance, Landlord shall enforce for the benefit of
Tenant all warranties, if any, received by Landlord from O'Neill or others in
connection with the construction of the Tenant Improvements to the extent
that said warranties cover any defects in the Improvements which Tenant is
required to repair hereunder.
9. CONSTRUCTION REPRESENTATIVE. In connection with the
original construction of the Tenant Improvements, each party shall be bound
by the acts of its respective Construction Representative appointed by each
party upon the execution of this Lease. Landlord's Construction
Representative is Lorrin C. Tarlton, Jr. and Tenant's Construction
Representative is Matt Pitchon. A party may designate a substitute
Construction Representative by giving written notice to the other party.
10. EARLY ENTRY.
(a) TENANT'S FINISHING WORK. If prior to the
Commencement Date, Tenant desires to enter upon a portion of the Premises,
upon reasonable written notice to Landlord, in order to install trade
fixtures and equipment and to commence construction of any improvements
within the Premises to be constructed by Tenant at Tenant's sole cost and
expense ("Tenant's Finishing Work"), such entry by Tenant for the purpose of
construction of Tenant's Finishing Work shall be subject to all of the
conditions set forth in this Paragraph 12.
(b) CONTROL OF WORK. Should Tenant elect to enter the
Premises under the terms of this Paragraph 12 for construction of Tenant's
Finishing Work, it is hereby agreed that Tenant, its employees, its agents,
its independent contractors, its suppliers and any other person under
Tenant's direct control ("Tenant's Personnel") installing Tenant's Finishing
Work on the Premises shall be subject to and shall work under the direction
of Landlord and O'Neill. If, in the sole reasonable judgment of Landlord, the
presence of Tenant's Personnel or the work that is being performed by
Tenant's Personnel shall interfere with Landlord's work of construction,
detrimentally affect Landlord's ability to comply with its commitments for
completing its work of improvement in the Premises, Landlord shall have the
right to order any or all of Tenant's early entry work to cease on 24 hours
written notice. If Landlord requires such cessation of work because there
exists interference with the work of construction of the Tenant Improvements,
Tenant shall have Tenant's Personnel remove from the Premises all of Tenant's
tools, equipment and materials.
(c) CONDITIONS OF OCCUPANCY. If Tenant desires to
exercise its right of early entry in accordance with the provisions of this
Paragraph, Tenant further agrees to: (i) pay for and provide certificates
evidencing the existence and amounts of liability insurance carried
<PAGE>
by Tenant, which coverage shall be reasonably approved by Landlord; (ii) pay
utility charges reasonably allocated to Tenant by Landlord; (iii) indemnify
and save Landlord and the Premises harmless from and against all liens,
liabilities, losses, damages, costs, expenses, demands, actions, causes of
action and claims (including, without limitation, attorney's fees and legal
costs) arising out of the use, construction, or occupancy of the Premises by
Tenant, and/or its agents, employees, contractors and servants prior to the
Commencement Date; and (iv) comply with all applicable laws, regulations,
permits and other approvals applicable to such early entry work on the
Premises.
11. BUILD-OUT OF MEZZANINE SPACE. Provided that Tenant does not
default in any of its obligations pursuant to the Lease, Landlord hereby
agrees to design and construct Tenant Improvements respecting the Mezzanine
space contained in the Premises, at Tenant's option, exercisable by Tenant
only during the initial term of the Lease. Upon exercise by Tenant of its
option hereunder, Landlord shall grant Tenant One Hundred Eighty-Eight
Thousand Eight Hundred Twenty-Five Dollars ($188,825.00) (or Twenty-Five
Dollars ($25) per square foot of mezzanine space in the event of partial
"build-out" of the mezzanine space) to be used for the design and
construction of said improvements, at which time, Landlord and Tenant shall
enter into an agreement substantially similar to this Agreement with respect
to the "build-out" of such "mezzanine space".
LANDLORD
Dated: __________, 198_ MENLO BUSINESS PARK, a California
general partnership
By: /s/ JOHN O. LEWIS
-----------------------
JOHN O. LEWIS
Its General Partner
By: OLTMANS INVESTMENT COMPANY,
a California Limited Partnership
Its General Partner
By: /s/ J.O. OLTMANS, II
--------------------------
J.O. OLTMANS, II,
General Partner
By: /s/ R.M. HOLMES
--------------------------
R.M. HOLMES,
General Partner
<PAGE>
PATRICIAN ASSOCIATES, INC.,
a California corporation
By: /s/ Karen E. Shaff
------------------------
Its: Karen E. Shaff, Counsel
By: /s/ R.L. Hays
------------------------
Its: R.L. Hays, Vice President
TENANT
Dated: March 21, 1988 ETAK, INC., a California corporation
-------- -
By: Matt Pittchon
---------------------------
Its: Vice-President Finance
---------------------------
By:
----------------------------
Its:
----------------------------
<PAGE>
EXHIBIT "C"
COMMENCEMENT DATE MEMORANDUM
LANDLORD: MENLO BUSINESS PARK, a California general partnership,
and PATRICIAN ASSOCIATES, INC.,a California corporation
TENANT: ETAK, INC., a California corporation.
LEASE DATE: March 21, 1988.
--------
PREMISES: Approximately 25,775 square feet of the building
located at
1430 O'Brien Drive
Menlo Park, California.
Pursuant to Paragraph 4(c) of the above referenced Lease, the
Commencement Date is hereby established as December 22, 1988.
-----------------
LANDLORD
Dated: 12/29/1988 MENLO BUSINESS PARK, a California
---------- general partnership
By: /s/ John O. Lewis
---------------------
JOHN O. LEWIS
Its General Partner
By: OLTMANS INVESTMENT
COMPANY, a California Limited
Partnership
Its General Partner
By: /s/ J.O.Oltmans II
--------------------
J.O. OLTMANS, II,
General Partner
By: /s/ R M Holmes
------------------
R.M. HOLMES
General Partner
<PAGE>
PATRICIAN ASSOCIATES, INC.,
a California corporation
By: /s/ G.C. Hauser
-------------------
Its: G.C. Hauser
Vice President
By: /s/ D.D. Duscher
-------------------
Its: D.D. Duscher
Vice President
TENANT
Dated: *12/29, 1988 ETAK, INC. a California
*See attached memo from Tig Tarlton corporation
dated 12/29/88.
By: /s/ Stanley
-------------------
Its: Executive Vice President
------------------------
By:
-------------------------
Its:
-------------------------
<PAGE>
The
LEWIS & TARLTON
Company
August 27, 1991
Matt Pitchon, Vice President
ETAK
1430 O'Brien Drive
Menlo Park, Ca 94025
Re: Exercise of Option to Extend lease term for two additional years
Dear Matt,
This will confirm our phone conversation this morning and with your "READ and
AGREED" signature below, will constitute a formal exercise by ETAK of that
Option to Extend under Paragraph 4(g), page 5 of your lease.
This will extend the primary lease for suites AB&C for two years, to a new
termination date of 12-31-93.
In addition you have mentioned that you wish to extend the term of lease for
suites D&E to be coterminous with the same lease. This instrument shall also
serve to extend the lease on suites D&E to 12-31-93. We appreciate this timely
notification and look forward to having ETAK as a tenant at Menlo Business Park
for even more years to come.
Best personal regards,
THE LEWIS &TARLTON COMPANY
/s/ Tig Tarlton
----------------
L.C. Tarlton, Jr. READ and AGREED
Exclusive Agent for
Menlo Business Park Joint Venture /s/ Matt Pitchon
----------------------
cc: John Lewis
Joe Oltmans
Rod Vogel
Rick Mallory, Esq.
<PAGE>
TARLTON PROPERTIES
June 23, 1993 REVISED 9-10-93
Mr. Matt Pitchon, V.P. / Operations
ETAK
1430 O'Brien Drive
Menlo Park, CA 94025
RE: LEASE AGREEMENT TO EXTEND FOR FOUR (4) YEARS, FROM 1-1-94 TO 12-31-97
1430 O'BRIEN DRIVE, MENLO PARK, CA (SUITES A,B,C,D & E)
Dear Matt,
This letter, when executed by you, will serve as a formal Agreement to Extend
under that certain lease dated March 21, 1988 and amended March 23, 1992.
Following are the conditions of the Agreement:
1. The above referenced lease will be extended to include Suites D&E, and will
exclude Suite F, for a total square footage of 38,677 S.F.
2. Your new rent, as agreed, will be $.85/s.f./mo./NET, beginning January 1,
1994. In accordance with Paragraph 5 (b) of the Lease, your rent will be subject
to an annual Consumer Price Index (Urban Wage Earners and Clerical Workers, San
Francisco-Oakland Area) increase using a minimum of 4% and a maximum of 6%.
3. There will be a $3.00/s.f. Tenant Improvement Allowance, to be paid in cash
by Landlord, to be used by Tenant for carpet and paint.
4. Upon execution of this Agreement, the Security Deposit shall be $32,875.45
(equal to one month's rent).
5. The Tenant's Percentage Share of Common Area Expenses shall be 60.01%.
38,677 / 64,452 = 60.01%
------------------------
6. As agreed, the only broker involved in this transaction will be Tarlton
Properties, Inc.
7. ETAK shall have the option, exercisable six (6) months prior to the
expiration of the 2nd year of the extended term, to cancel the portion of this
lease, on suites D&E only, for years 3 & 4 of said lease by the payment of year
3 lease payments (including escalation) at the time of exercise.
8. All other terms and conditions of said Lease shall remain in full force and
effect.
Please acknowledge your acceptance of this Agreement by signing and returning a
copy hereof.
We look forward to having ETAK as a tenant for even more years to come.
<PAGE>
Sincerely, READ and AGREED
TARLTON PROPERTIES, INC. /s/ Matt Pitchon, VP OPS
/s/ L.C. (Tig) Tarlton, Jr. ---------------------------
---------------------------- Matt Pitchon, V.P. /
Operations
Lorrin C. Tarlton, Jr.
Agent for Menlo Business Park Joint Venture
MENLO BUSINESS PARK,
a California general partnership
By: /s/ John Lewis
---------------------
John O. Lewis
OLTMANS INVESTMENT COMPANY
General Partner
By: /s/ J O Oltmans II
----------------------
J.O. Oltmans II
By: /s/ Basil Johnson
----------------------
Basil C. Johnson
PATRICIAN ASSOCIATES, INC.,
a California corporation
By: /s/ Rod Vogel
---------------------------------
Its: Rod Vogel, Vice President
----------------------------------
By: /s/ Randall C. Mundt
----------------------------------
Its: Randall C. Mundt, Vice President
----------------------------------
<PAGE>
TARLTON
PROPERTIES
April 10, 1997
William S. Frank
Manager, Real Estate
ETAK, Inc.
c/o Sony Corporation of America
555 Madison Ave.
New York, NY 10022-3301
RE: LEASE EXTENSION FOR ETAK, INC.
1430 O'BRIEN DRIVE, SUITES A,B,C,D& E (BUILDING 7), MENLO PARK, CA
Dear Bill:
This letter, when executed, will serve as a formal Agreement to extend and
modify that certain lease dated March 21, 1988 and amended on March 23, 1992 and
on June 23, 1993, for the Premises located at 1430 O'Brien Drive, Suites
A,B,C,D&E (Building 7), of Menlo Business Park, California (the "Lease").
Following are the conditions of the Agreement:
1. The commencement date of this extension shall be January 1, 1998 and
the expiration shall be September 30, 2001 (coterminous with the Lease for
Building 18).
2. The term of the Lease extension shall be for a period of forty
five (45) months.
3. Paragraph 5 is hereby amended with the following monthly rent
schedule
Year 1 $44,478.55/month ($1.15/s.f.)
Year 2 Year 1 plus CPI annual increase (min 4%, max 6%)
Year 3 Year 2 plus CPI annual increase (min 4%, max 6%)
Year 4 Year 3 plus CPI annual increase (min 4%, max 6%)
4. The amount of the Security Deposit per Paragraph 7 of the
Lease is hereby amended to $44,478.55. The existing security deposit of
$38,524.20 is to be credited to new security deposit. Tenant shall deposit
with Landlord an additional $5954.35 to increase the current security deposit
to one month's rent.
5. Tenant warrants that there are no brokers other than
Tarlton Properties, Inc., acting as exclusive leasing agent for Menlo
Business Park for which any commissions shall be paid solely by Menlo
Business Park Joint Venture.
<PAGE>
Lease Extension
ETAK, Inc.
Page 56
6. Paragraph 17(c) is hereby amended as follows:
Landlord shall, at Tenants expense, obtain at competitive rates, and keep in
full force and effect, a service contract with a licensed HVAC contractor for
the maintenance of the HVAC systems in the Building which shall have the
shortest notice of termination period available.
7. All other terms and conditions of said Lease shall remain in
full force and effect. Please acknowledge your acceptance of this Agreement by
signing and returning a copy thereof.
We look forward to having ETAK remain in the Park in the upcoming years.
Sincerely,
TARLTON PROPERTIES, INC.
Exclusive Agents for Menlo Business Park Joint Venture
/s/ L.C. (Tig) Tarlton
----------------------
Lorrin C. Tarlton, Jr.
<PAGE>
Lease Extension
ETAK,Inc.
Page 57
READ AND AGREED
Tenant:
ETAK, Inc.
a California corporation
By: /s/
---------------------------
Its: Approved by Law Dept.
---------------------------
By:
---------------------------
Its:
---------------------------
Landlord:
PATRICIAN ASSOCIATES, INC.,
By: /s/ Kurt D. Schaeffer
---------------------------
Kurt D. Schaeffer, Vice President
By: /s/ R L Minear
---------------------------
R.L. Minear, Vice President
MENLO BUSINESS PARK,
a California general partnership
By: /s/ John O. Lewis
---------------------------
John O. Lewis, as general partner
By: Oltmans Investment Company, as general partner
By: /s/ J.O. Oltmans
---------------------------
J.O. Oltmans II
<PAGE>
Lease Extension
ETAK, Inc.
Page 58
By: /s/ Basil C. Johnson
---------------------------
Basil C. Johnson
By: Lorrin C. Tarlton, Jr., and Marilyn L. Tarlton, Trustees, As general
partner
By: /s/ Lorrin C. Tarlton, Jr., Trustee
--------------------------------------
Lorrin C. Tarlton, Jr., Trustee
By: /s/ Marilyn L. Tarlton, Trustee
----------------------------------
Marilyn L. Tarlton, Trustee
<PAGE>
Lease Extension
ETAK, Inc.
PAGE 1
AMENDMENT TO LEASE
This agreement made this 23rd day of March 1992 by and between Menlo Business
Park, a California General Partnership and Patrician Associates, Inc., a
California corporation, Lessor and ETAK, Inc., a California corporation, Lessee
being the parties to that certain Lease dated March 21, 1988 for the premises
located at 1430 O'Brien Drive, Menlo Park, California designated as Suites A, B
& C consisting of approximately 25,775 square feet hereby express mutual desire
and intent as follows:
Whereas, Lessor desires to lease to Lessee and Lessee desires to lease from
Lessor that certain additional approximately 7,407 square foot space, designated
as Suite F, adjoining the Lessee's existing space as shown on Exhibit "A2"
attached. Now, therefore, it is agreed by and between the parties hereto as
follows:
1. That the term of this Agreement shall be for twenty one (21) months and
twenty two (22) days commencing the tenth day of March 1992 and ending December
31, 1993 (coterminous with that certain Lease on existing space dated March 21,
1988, per the letter of extension dated August 27, 1991 and signed by Matt
Pitchon, Vice President of ETAK).
2. That the monthly rent shall be in accordance to the aforementioned
Lease ($0.88/square foot or $6,518.16/month, as of the signing of this
Agreement) and that said monthly rent shall be subject to adjustment in
accordance with paragraph 5 of said Lease dated March 21, 1988.
3. That the Tenants Percentage Share of Common Area Expenses shall
increase by the following amount: 7,407/64,452 = 11.49%. This brings the total
Percentage Share to 51.48% for that certain Lease.
4. That the Tenant shall, upon execution of this Agreement, pay an
additional security deposit in the amount of $6,518.16 (one month's rent).
5. That all of the other terms and conditions of said Lease remain in full
force and effect.
PAGE 1
<PAGE>
Lease Extension
ETAK, Inc.
PAGE 2
6. That the aforementioned additional space was accepted and occupied by
the Tenant as of March 10, 1992, and that rent is to be paid from that date.
7. That the aforementioned additional space was accepted "as is", with NO
exceptions.
In Witness whereof the parties hereto have executed this instrument the day and
year herein above written.
PAGE 2
<PAGE>
Lease Extension
ETAK, Inc.
PAGE 3
AMENDMENT TO LEASE
LESSEE / TENANT LESSOR/LANDLORD
ETAK, Inc., a California corporation Menlo Business Park, a California
General Partnership
by: /s/ Matt Pittchon by: /s/ John O. Lewis
-------------------------- --------------------------
John O. Lewis
its: VP OPS Its General Partner
--------------------------
Oltman's Investment Company,
a California Limited Partnership
by: /s/ J.O. Oltamans
-----------------------
J.O. Oltmans, II
General Partner
by: /s/ Basil Johnson
----------------------
Basil Johnson
General Partner
Patrician Associates, Inc.,
a California corporation
by: /s/ Timothy E. Minton
-------------------------
its: Timothy E. Minton
Vice President
by: /s/ Randall C. Mundt
-------------------------
its: Randall C. Mundt
Vice President
PAGE 3
<PAGE>
Lease Extension
ETAK, Inc.
PAGE 4
EXHIBIT "C"
SKETCH OF PROPERTY
<PAGE>
EXHIBIT C
CONSENT TO SUBLEASE AGREEMENT
The undersigned Landlord under the Master Lease attached hereto as Exhibit
"A" hereby consents to the subletting of the premises described therein on
the express conditions that:
1. Landlord's consent to the sublease shall not constitute its consent or
waiver of consent to any subsequent sublease or sub-sublease, and shall not
in any manner increase, decrease or otherwise affect the rights and
obligations of Landlord and Tenant under the Master lease unless specifically
stated herein.
2. In the event of Sublessee default, it is agreed that Sublessor will
remain liable for all the monthly lease payments and any other monies due
through the remainder of the lease term, per the Master Lease.
3. This Sublease agreement shall in no way release Sublessor from any
obligation or covenant of the Master Lease between Landlord and Tenant.
4. If any monetary default under the Master Lease occurs, Landlord will have
the right to collect the rent attributable to the subleased premises directly
from Sublessee without (i) waiving any of the Landlord's rights against
Sublessor as a result of such default and (ii) becoming liable to Sublessee
for any failure of Sublessor to perform any obligation of Sublessor under the
Sublease.
5. If at any time prior to the expiration of the term of the Sublease the
Master Lease shall terminate or be terminated for any reason (or Tenant's
right to possession shall terminate without termination of the Master Lease),
the Landlord shall have the right to elect to either: (a) cause the Sublease
to simultaneously terminate, (b) upon written demand of Landlord, and not
otherwise, to succeed to Sublessor's interest in the Sublease, in which case
Sublessee shall attorn to Landlord for the remainder of the term of the
Sublease, such attornment to be upon all of the terms and conditions of the
Master Lease and the Sublease shall be automatically assigned to Landlord
upon such written demand. The foregoing provisions of this paragraph shall
apply notwithstanding that, as a matter of law, the Sublease may otherwise
terminate upon the termination of the Master Lease and shall be
self-operative upon such written demand of the Landlord, and no further
instrument shall be required to give effect to said provisions. Upon the
demand of Landlord, however, Sublessee agrees to execute, from time to time,
documents in confirmation of the foregoing provisions of this paragraph
satisfactory to Landlord in which Sublessee shall acknowledge such attornment
and shall set forth the terms and conditions of its tenancy. Nothing
contained in this paragraph shall be construed to (i) impair or modify any
right otherwise exercisable by the Landlord, whether under the Master Lease,
any other agreement or in law, or (ii) in the event of an attornment, cause
Landlord to be:
(a) liable for any rent paid by Sublessee to Sublessor more than one month in
advance, or any security deposit paid by Sublessee to Sublessor;
1
<PAGE>
(b) liable for any act or omission of Tenant under the Master Lease or for
any default of Sublessor under the Sublease that occurred prior to the
Landlord's assumption;
(c) subject to any defenses or offsets that Sublessee may have against
Sublessor that arose prior to Landlord's assumption; or
(d) bound by any changes or modification made to the Sublease without the
written consent of Landlord.
Landlord:
PATRICIAN ASSOCIATES, INC.,
a California Corporation
By: /s/ Tim Wirta By: /s/ John N. Urban
----------------------------- ------------------------------
Print Name: Tim Wirta, Vice President Print Name: John N. Urban, Vice
President
Its: Its:
---------------------------- -----------------------------
MENLO BUSINESS PARK,
a California general partnership
By: John Owen Lewis Trust UTD April 1, 1991
As general partner
By: /s/ John O. Lewis
----------------------------
John O. Lewis, Trustee
By: Oltmans Investment Company,
as general partner
By: /s/ J.O. Oltmans II
----------------------------
J.O. Oltmans II
By: /s/ Basil C. Johnson
----------------------------
Print Name: Basil C. Johnson
2
<PAGE>
By: Lorrin C. Tarlton, Jr., and Marilyn L. Tarlton,
Trustees UTD 1-23-75, as general partner
By: /s/ Lorrin C. Tarlton, Jr.,Trustee
--------------------------------------
Lorrin C. Tarlton, Jr., Trustee
By: /s/ Marilyn L. Tarlton, Trustee
--------------------------------------
Marilyn L. Tarlton, Trustee
3
<PAGE>
ADDENDUM ONE TO SUBLEASE
Sublessor agrees to the following:
1. Terminate the existing data/phone wiring to a location accessible to
Sublessee.
2. Provide a "doorbell" for guests of Sublessee
3. Provide janitorial service to Sublessee
4. Provide access to and use of the ground floor restrooms.
Sublessor also agrees to include the use of the existing office furniture and
partitions by Sublessee for the term of the Sublease. Sublessor and Sublessee
will list furniture and partition items below within the first week of the
Sublease Term.
Any damage to the furniture and partitions, excepting normal wear and tear,
will be repaired (or replaced) at the Sublessee's sole expense.
The furniture and partitions will remain intact and with the Premises when
the Sublessee vacates the Premises.
Furniture and Partition Inventory Dated September 25, 1998:
Agreed
ETAK, Inc.
By:
-------------------------------------
Its: Director, HR & General Affairs
Drug Abuse Sciences, Inc.
By:
-------------------------------------
Its: President & CEO
4
<PAGE>
FURNITURE AND PARTITION INVENTORY
DATED SEPTEMBER 25, 1998
Quantity Description
------- -----------
2 6' Executive Metal Desk
1 8' Plastic Laminated Conference Table
8 4' tall metal bookcases
2 3' tall metal bookcases
3 5' metal desks
2 round tables (Plastic Laminated)
1 3' X 5' work table (Plastic Laminated)
11 2 drawer black metal files (Hon)
11 red arm-chairs
8 blue conference table chairs
2 grey executive chairs
4 grey guest chairs
6 trash cans
3 white boards
5
<PAGE>
SUBLEASE AMENDMENT NUMBER 1
This agreement is made this 23 day of October, 1998 by and between ETAK, Inc.
(Sublessor) and Drug Abuse Sciences, Inc. (Sublessee) being the parties to
that certain Sublease dated October 1,1998 for the Premises located at 1430
O'Brien Dr., Suite E, Menlo Park, CA, consisting of approximately 1,500
leasable square feet.
Now, therefore, it is agreed by and between the parties:
1.2 Neither Sublessee nor any of its employees, agents, guests or
invitees shall be permitted to use any space leased to or occupied by
Sublessor under or pursuant to the Master Lease which is not included in the
Premises, other than such common areas which are appurtenant to or service
the Premises and which are necessary for the use and occupancy thereof,
limited, however, to the extent that the same are available to Sublessor
pursuant to the terms and conditions of the Master Lease.
1.3 This Sublease and the obligation of Sublessee to pay Rent hereunder
and perform all of the other covenants and agreements hereunder on the part
of Sublessee to be performed shall in no way be affected, impaired or excused
because Sublessor is unable to fulfill any of its obligations under this
Sublease expressly or implicitly to be performed by Sublessor or because
Sublessor is unable to make, or is delayed in making, any repairs, additions,
alterations, improvements or decorations or is unable to supply or is delayed
in supplying any equipment or fixtures, if Sublessor is prevented or delayed
from so doing by reason of strikes or labor trouble or by accident,
adjustment of insurance or by any cause whatsoever reasonably beyond
Sublessor's control, including but not limited to, laws, governmental
preemption in connection with a National Emergency or by reason of any rule,
order or regulation or any federal, state, county or municipal authority or
any department or subdivision thereof or any government agency or by reason
of the conditions of supply and demand which have been or are affected by war
or other emergency.
2.1 Sublessee shall not make any alterations, additions or improvements
to the Premises without obtaining the prior written consent of Landlord (if
such consent is required under the terms of the Master Lease) and Sublessor.
Sublessor's consent shall not be unreasonably withheld. The performance of
such alterations, additions and improvements shall be subject to the terms
and conditions of the Master Lease and Sublease.
2.2 If Sublessor shall be unable to give possession of the Premises on
the Commencement Date, the Rent reserved and covenanted to be paid herein
shall not commence until the date on which Sublessor shall be able to give
possession of the Premises to Sublessee, and no such failure to give
possession on such scheduled date shall in any wise affect the validity of
this Sublease or the obligations of Sublessee hereunder or give rise to any
claim for damages by Sublessee or claim for rescission of this Sublease, nor
shall the same in any way be construed to extend the Term. If permission is
given to Sublessee to enter into the possession of the Premises, other than
for the preparation of plans, measurement of and/or decoration of the
Premises, Sublessee covenants and agrees that such occupancy shall be deemed
to be under all the terms, covenants, conditions and provisions of this
Sublease, including the covenant to pay Rent.
1-3
<PAGE>
14.7 Sublessee hereby waives its right to interpose a counterclaim in any
summary proceeding instituted to remove Sublessee from the Premises or in any
action or proceeding instituted for the collection of Fixed Rent, Additional
Rent or other amounts Sublessee is obligated to pay to Sublessor hereunder
unless such counterclaim is compulsory and by the failure to raise such claim
in the proceeding or action, Tenant, would lose the right to assert such
claim.
14.8 Sublessor covenants, that, as long as Sublessee shall duly observe,
perform and comply with all of the terms, covenants and conditions of this
Sublease on its part to be observed, performed or complied with, Sublessee
shall, subject to all of the terms of the Master Lease and this Sublease,
peaceably have, hold and enjoy the Premises during the Term without
molestation or hindrance by Sublessor.
14.9 At any time and from time to time within ten (10) days after a
written request from Sublessor or Sublessee, Sublessor or Sublessee shall
execute, acknowledge and deliver to the other a written statement certifying
(i) that this Sublease has not been modified and is in full force and effect
or, if there has been a modification of this Sublease, that this Sublease is
in full force and effect as modified, and stating such modifications, (ii)
the dates to which the Rent, additional rent and other charges hereunder have
been paid, (iii) that to the best of Sublessor's or Sublessee's knowledge, no
defaults exist under this Sublease or, if any defaults do exist, specifying
the nature of each such default and (iv) as to such other matters as
Sublessor or Sublessee may reasonably request.
14.10 If any of the provisions of this Sublease or the application thereof
to any person or circumstance shall, to any extent, be invalid or
unenforceable, the remainder of this Sublease, or the application of such
provision or provisions to persons or circumstances other than those as to
whom or which it is held invalid or unenforceable, shall not be affected
thereby, and every provision of this Sublease shall be valid and enforceable
to the fullest extent permitted by law.
14.11 This Sublease shall be governed in accordance with the laws of the
State of California.
SUBLESSOR SUBLESSEE
ETAK, Inc. Drug Abuse Sciences, Inc.
By: /s/ Louis F, Connado By: /s/ Stanley A. Kaplan
----------------------------- -------------------------------
Print Name: Louis F. Connado Stanley A. Kaplan
Its: Director, HR & General Affairs Its: President & CEO
Landlord:
PATRICIAN ASSOCIATES, INC., a California Corporation
By: /s/ Tom Wirta By: /s/ Steve W. Pick
---------------------------- -----------------------------
2-3
<PAGE>
Print Name: Tim Wirta, Vice President Print Name: Steve W. Pick, Vice
President
Its: Its:
----------------------------- ------------------------------
MENLO BUSINESS PARK, a California general partnership
By: John Owen Lewis Trust UTD April 1, 1991
As general partner
By: /s/ John O. Lewis
------------------------------
John O. Lewis, Trustee
By: Oltmans Investment Company,
As general partner
By: /s/ J.O. Otmans II
------------------------------
J.O. Oltmans II
By: /s/ Basil C. Johnson
------------------------------
Print Name: Basil C. Johnson
By: Lorrin C. Tarlton, Jr., and Marilyn L. Tarlton,
Trustees UTD 1-23-75, as general partner
By: /s/ Lorrin C. Tarlton, Jr., Trustee
--------------------------------------
Lorrin C. Tarlton, Jr., Trustee
By: /s/ Marilyn L. Tarlton, Trustee
--------------------------------------
Marilyn L. Tarlton, Trustee
3-3