California-San Carlos-Two Circle Star Way Lease - Circle Star Center Associates LP and Centraal Corp.
CIRCLE STAR LEASE AGREEMENT
BY AND BETWEEN
CIRCLE STAR CENTER ASSOCIATES, L.P.
("LANDLORD")
AND
CENTRAAL CORPORATION
("TENANT")
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(b) INSURANCE REQUIREMENTS. 5
(c) NO LIMITATION ON OBLIGATIONS. 6
TABLE OF CONTENTS
PARAGRAPH DESCRIPTION PAGE
BASIC LEASE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . v
1. OCCUPANCY AND USE . . . . . . . . . . . . . . . . . . . . . . . . 1
2. TERMS AND POSSESSION . . . . . . . . . . . . . . . . . . . . . . . 1
3. RENT; RENT ADJUSTMENTS; ADDITIONAL CHARGES FOR EXPENSES AND TAXES 2
(A) MONTHLY BASE RENT . . . . . . . . . . . . . . . . . . . . . . 2
(B) ADJUSTMENTS IN BASE RENT . . . . . . . . . . . . . . . . . . . 2
(C) ADDITIONAL CHARGES FOR EXPENSES AND TAXES . . . . . . . . . . 2
(1) DEFINITIONS OF ADDITIONAL CHARGES: . . . . . . . . . . . . . . 2
(A) "TAX YEAR" . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(B) "TENANT'S SHARE" . . . . . . . . . . . . . . . . . . . . . . . 2
(C) "REAL ESTATE TAXES" . . . . . . . . . . . . . . . . . . . . . 2
(D) "EXPENSES" . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(E) "EXPENSE YEAR" . . . . . . . . . . . . . . . . . . . . . . . . 4
(2) PAYMENT OF REAL ESTATE TAXES: . . . . . . . . . . . . . . . . 4
(3) PAYMENT OF EXPENSES: . . . . . . . . . . . . . . . . . . . . . 4
(4) OTHER: . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(5) AUDIT: . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(D) LATE CHARGES . . . . . . . . . . . . . . . . . . . . . . . . . 5
4. RESTRICTIONS ON USE . . . . . . . . . . . . . . . . . . . . . . . 5
5. COMPLIANCE WITH LAWS . . . . . . . . . . . . . . . . . . . . . . . 5
6. ADDITIONAL ALTERATIONS . . . . . . . . . . . . . . . . . . . . . . 6
7. REPAIR AND MAINTENANCE . . . . . . . . . . . . . . . . . . . . . . 6
8. LIENS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
9. ASSIGNMENT AND SUBLETTING . . . . . . . . . . . . . . . . . . . . 7
10. INSURANCE AND INDEMNIFICATION . . . . . . . . . . . . . . . . . . 9
11. WAIVER OF SUBROGATION . . . . . . . . . . . . . . . . . . . . . .10
12. SERVICES AND UTILITIES . . . . . . . . . . . . . . . . . . . . . .10
13. TENANT'S CERTIFICATES . . . . . . . . . . . . . . . . . . . . . .11
14. HOLDING OVER . . . . . . . . . . . . . . . . . . . . . . . . . . .11
15. SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . . . . .12
16. RULES AND REGULATIONS . . . . . . . . . . . . . . . . . . . . . .12
17. RE-ENTRY BY LANDLORD . . . . . . . . . . . . . . . . . . . . . . .12
18. INSOLVENCY OR BANKRUPTCY . . . . . . . . . . . . . . . . . . . . .13
19. DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
20. DAMAGE BY FIRE, ETC. . . . . . . . . . . . . . . . . . . . . . . .14
21. EMINENT DOMAIN . . . . . . . . . . . . . . . . . . . . . . . . . .14
22. SALE BY LANDLORD . . . . . . . . . . . . . . . . . . . . . . . . .15
23. RIGHT OF LANDLORD TO PERFORM . . . . . . . . . . . . . . . . . . .15
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24. SURRENDER OF PREMISES . . . . . . . . . . . . . . . . . . . . . .15
25. WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
26 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
27. TAXES PAYABLE BY TENANT . . . . . . . . . . . . . . . . . . . . .16
28. ABANDONMENT . . . . . . . . . . . . . . . . . . . . . . . . . . .16
29. SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . . . . . . . .16
30. ATTORNEY'S FEES . . . . . . . . . . . . . . . . . . . . . . . . .16
31. LIGHT AND AIR . . . . . . . . . . . . . . . . . . . . . . . . . .16
32. SECURITY DEPOSIT . . . . . . . . . . . . . . . . . . . . . . . . .16
33. CORPORATE AUTHORITY; FINANCIAL INFORMATION . . . . . . . . . . . .17
34. PARKING . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
35. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . .18
36. TENANT'S REMEDIES . . . . . . . . . . . . . . . . . . . . . . . .18
37. REAL ESTATE BROKERS . . . . . . . . . . . . . . . . . . . . . . .18
38. LEASE EFFECTIVE DATE . . . . . . . . . . . . . . . . . . . . . . .18
39. HAZARDOUS SUBSTANCE LIABILITY . . . . . . . . . . . . . . . . . .18
40. ARBITRATION OF DISPUTES . . . . . . . . . . . . . . . . . . . . .19
41. SIGNAGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
42. OPTION TO RENEW . . . . . . . . . . . . . . . . . . . . . . . . .19
43. RENT DURING EXTENSION TERM . . . . . . . . . . . . . . . . . . . .19
44. SATELLITE ANTENNA . . . . . . . . . . . . . . . . . . . . . . . .20
45. RIGHT TO RELOCATE TENANT . . . . . . . . . . . . . . . . . . . . .21
EXHIBIT "A" PREMISES
EXHIBIT "B" WORK LETTER
Exhibit "B-1" Landlord's Plans
Exhibit "B-2" Minimum Information Required
Exhibit "C" Rules and Regulations
Exhibit "D" Form of Tenant Estoppel Certificate
Exhibit "E" Encumbrances
Exhibit "F" Subordination, Nondisturbance and Attornment Agreement
Exhibit "G" Form of Letter of Credit
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BASIC LEASE INFORMATION
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Lease Date: December 16, 1998
LANDLORD: CIRCLE STAR CENTER ASSOCIATES, L.P.
a California limited partnership
Managing Agent: THE MOZART DEVELOPMENT COMPANY
Landlord's and Managing Agent's
Address: c/o THE MOZART DEVELOPMENT COMPANY
1068 East Meadow Circle
Palo Alto, CA 94303
TENANT: CENTRAAL CORPORATION
a California Corporation
Tenant's Address: Prior to Occupancy: After Commencement Date:
811 Hansen Way at the Premises
Palo Alto, CA 94303 Attn: Chief Financial
Attn: Doug Finlay Officer
Building: Two Circle Star Way, San Carlos, California
Suite: 200
Rentable Area of the Premises: 25,179 square feet
Rentable Area of the Building: 102,973 square feet
Tenant's Use of the Premises: General Office and Administration (including
twenty-four hour live internet
services and software development)
Lease Term: Seven (7) years
Scheduled Commencement Date: March 26,. 1999
Scheduled Expiration Date: February 28, 2006
Tenant Allowance: $579,800 ($25 pusf x 23,192 usf) plus up to
$15,000 for the cost of installation of glass
and glazing in the wall of the Premises
overlooking the first floor lobby; provided,
however, if Tenant does not install a
continuous drop ceiling grid throughout the
Premises the Tenant Allowance shall be
reduced by the amount estimated by Devcon
Construction to complete the drop ceiling
grid throughout the Premises.
Additional Allowance: None
Tenant's Plan Delivery Date: December 20, 1998
Outside Delivery Date: May 31, 1999
Monthly Base Rent: $2.55 per Rentable Square Foot of the
Rentable Area of the Premises.
Base Rent Adjustment: On each anniversary of the Rent Commencement
Date the Monthly Base Rent shall increase by
three percent (3 9[) over the Monthly Base
Rent applicable to the month immediately
prior, to the applicable anniversary.
Tenant's Share of Expenses and
Taxes ("Additional Charges"): 24.45%
Security Deposit: $650,000 plus additional security as provided
in Paragraph 32.
Guarantor of Lease: See Security Deposit
Broker: Cornish & Carey Commercial (Landlord &
Tenant)
Broker's Fee or Commission,
If Any, Paid By: Landlord
The foregoing Basic Lease Information is hereby incorporated into and made a
part of this Lease. Each reference in this Lease to any of the Basic Lease
Information shall mean the respective information hereinabove set forth and
shall be construed to incorporate all of the terms provided under the particular
paragraph pertaining to such information. In the event of any conflict between
any Basic Lease Information and the Lease, the latter shall control.
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LANDLORD:
CIRCLE STAR CENTER ASSOCIATES, L.P.
a California limited partnership
By: M-D Ventures, Inc.
Its: General Partner
By: /s/ Steve Dostart
---------------------------------
Steve Dostart
Its: Vice President
TENANT:
CENTRAAL CORPORATION
a California corporation
By: /s/ Keith Teare
---------------------------------
Keith W. Teare
Its: President & CEO
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LEASE AGREEMENT
THIS LEASE AGREEMENT is made and entered into as of December 16, 1998, by
and between CIRCLE STAR CENTER ASSOCIATES, L.P., a California limited
partnership, (herein called "Landlord"), and CENTRAAL CORPORATION, a California
corporation, (herein called "Tenant").
Upon and subject to the terms, covenants and conditions hereinafter set
forth, Landlord hereby leases to Tenant and Tenant hereby hires from Landlord
those premises (the "Premises") comprising the area substantially as
crosshatched on the attached EXHIBIT "A", in the building (hereinafter referred
to as the "Building") specified in the Basic Lease Information attached hereto.
The number of square feet designated as Rentable Area of the Premises on the
Basic Lease Information may include portions of the Building Common Area
attributed to the Premises and not located within the area outlined on EXHIBIT
A. The Building is located on land on which Landlord intends to develop two
buildings as an integrated project (the "Project"). The term "Common Area" shall
mean all areas and facilities within the Project that are not designated by
Landlord for the exclusive use of Tenant or any other tenant or other occupant
of the Project, including the parking areas, access and perimeter roads,
pedestrian sidewalks, landscaped areas, trash enclosures, recreation areas and
the like.
1. OCCUPANCY AND USE. Tenant may use and occupy the Premises for the
purpose specified in the Basic Lease Information and for no other use or purpose
without the prior written consent of Landlord. Landlord shall have the right to
grant or withhold consent to a proposed change of use in its sole discretion.
Tenant shall be entitled to the benefit on a nonexclusive basis of (i) the
Building Common Areas with other occupants of the Building, and (ii) to the
extent and for so long as Landlord continues to own the Project, the Project
Common Areas with other occupants of the Project in accordance with the Rules
and Regulations established by Landlord from time to time. Provided, however,
that if Landlord sells a portion of the Project, Landlord shall assure to Tenant
that Tenant's rights to access and parking are assured through a Reciprocal
Easement Agreement or other like mechanism. Notwithstanding the above, Tenant
understands and agrees that (a) a Declaration of Covenants, Conditions and
Restrictions ("CC&R's"), (b) a ground lease and (c) a Conditional Use Permit may
encumber the Land and Project and that Tenant's Occupancy and Use of the
Premises may be restricted by such encumbrances. If necessary, Tenant shall
execute such documents as are reasonably necessary to cause this Lease to become
subordinate to such encumbrances (see the attached EXHIBIT E, Encumbrances).
2. TERMS AND POSSESSION.
(a) The term of this Lease (the "Term") shall be for the period
specified in the Basic Lease Information (or until sooner terminated as herein
provided). Subject to Tenant's termination right set forth below in this
Paragraph, if Landlord, for any reason whatsoever, cannot deliver possession of
the Premises in the condition required under this Lease (including the
Substantial Completion of the Tenant Improvements), with all governmental
permits required for the occupancy of the Premises, to Tenant on the date
specified in the Basic Lease Information for the commencement of the Term, this
Lease shall not be void or voidable, nor shall Landlord be liable to Tenant for
any loss or damage resulting therefrom. In that event, however, the Term of the
Lease shall not commence until such commencement date as is determined pursuant
to EXHIBIT B. In such event, the scheduled commencement date and scheduled
expiration date shall be adjusted accordingly. Payment of Rent and Additional
Charges by Tenant due to delay in delivery of the Premises caused by Tenant
shall also be governed by EXHIBIT B hereof. Notwithstanding the provisions above
and of EXHIBIT B, if the delivery of the Premises is delayed beyond Outside
Delivery Date, as set forth in the Basic Lease Information, Tenant shall have
the right to terminate this Lease by notifying Landlord in writing of its intent
to do so no later than ten (10) business days after the Outside Delivery Date.
The Outside Delivery Date shall be extended one day for each day of delay caused
by (i) Tenant Delays as more particularly set forth in EXHIBIT B hereof and (ii)
acts of God or the elements, acts of the Government, labor disturbances of any
character, a shortage of material or labor, or other causes beyond the
reasonable control of Landlord (any of the foregoing, "Force Majeure"), provided
that any such delay shall not exceed sixty (60) days. The dates upon which the
Term shall actually commence and terminate pursuant to this Paragraph 2(a) are
herein called the "Commencement Date" and the "Expiration Date," respectively.
(b) Completion of the improvements to the Premises and Building
shall be governed by the terms and conditions of the separate work letter ("Work
Letter"), attached hereto as EXHIBIT "B".
(c) The Premises shall be deemed "delivered" and the Term shall
commence as defined in EXHIBIT B.
(d) Tenant shall, no later than thirty (30) days after the date of
issuance by the appropriate governmental agency of a Certificate of Occupancy or
its equivalent concerning the Improvements, occupy a portion of the Premises or
deliver a letter to Landlord confirming that possession of the Premises has been
tendered to and accepted by Tenant and that Tenant, by virtue of such
acceptance, is in occupancy of the Premises. Time is of essence. This
subparagraph 2(d) shall not be construed as an obligation of Tenant to
continuously occupy the Premises.
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3. RENT; RENT ADJUSTMENTS; ADDITIONAL CHARGES FOR EXPENSES AND
TAXES.
(a) MONTHLY BASE RENT.
(i) PAYMENT OF BASE RENT. Commencing on the
Commencement Date, except to the extent otherwise provided for in Paragraph
2(a), Tenant shall pay to Landlord throughout the Term Base Rent in an amount
equal to the Monthly Base Rent rate specified in the Basic Lease Information
multiplied by the Rentable Area of the Premises, as specified in the Basic Lease
Information ("Base Rent"), which sum shall be payable by Tenant in equal monthly
installments on, or, at Tenant's election, before, the first clay of each month,
in advance, with the first month's rent due upon execution of this Lease
Agreement, in lawful money of the United States (without any prior demand
therefor and without deduction or offset whatsoever, except as expressly
provided for in Paragraphs 20 & 21) to Landlord or its managing agent at the
address specified in the Basic Lease Information or to such other firm or to
such other place as Landlord or its Managing Agent may from time to time
designate in writing. Tenant shall pay to Landlord all charges and other amounts
whatsoever as provided in this Lease ("Additional Charges") at the place where
the Base Rent is payable, and Landlord shall have the same remedies for a
default in the payment of Additional Charges as for a default in the payment of
Base Rent. As used herein, the term "Rent" shall include all Base Rent and
Additional Charges (including, without limitation, Additional Charges for Real
Estate Taxes and Expenses pursuant to Paragraph 3(c) below, and Additional
Charges pursuant to Paragraphs 7(b), 8, 10(d) 23). If the Commencement Date
should occur on a day other than the first day of a calendar month, or the
Expiration Date should occur on a day other than the last day of a calendar
month, then the Rent and Additional Charges for such fractional month shall be
prorated on a daily basis.
(ii) PARTIAL WAIVER OF RENT & ADDITIONAL CHARGES: During
the first 122 days of the Term, for each four-week period that at least 10,000
rentable square fee of the Premises is not occupied by Tenant (or its subtenant
or assignee), Tenant shall be entitled to a waiver of 40% of the Base Rent and
Additional Charges due for such period ("Partial Rent Waiver Entitlement"). For
such waiver to be valid, Tenant shall be required to notify Landlord in writing
during the first week of the subject period of such Partial Rent Waiver
Entitlement and Landlord shall have the opportunity to verify the validity of
such notice during business hours on any business day during the subject period.
(b) ADJUSTMENTS IN BASE RENT. The Monthly Base Rent under
Paragraph 3(a) shall be adjusted as provided in the Basic Lease Information.
Additionally, the Monthly Base Rent shall be increased in the event that Tenant
elects to utilize any of the Additional Allowance specified in the Basic Lease
Information. The amount of such increase shall be determined by calculating the
monthly payment amount for a fully amortizing loan where (i) the original
principal amount equals the amount of the Additional Allowance utilized by
Tenant, (ii) the annual interest rate is ten percent (10%), and (iii) the term
of the loan is the number of months in the initial Lease Term. For example, if
the entire amount of the Additional Allowance were utilized, then the addition
to Monthly Base Rent would be $3,850.15 per month, throughout the initial Lease
Term.
(c) ADDITIONAL CHARGES FOR EXPENSES AND TAXES.
(1) DEFINITIONS OF ADDITIONAL CHARGES: For purposes of
this Paragraph 3(c), the following terms shall have the meanings hereinafter set
forth:
(A) "TAX YEAR" shall mean each twelve (12)
consecutive month period commencing January 1st of the calendar year
during which the Commencement Date of this Lease occurs, provided that
Landlord, upon notice to Tenant, may change the Tax Year from time to
time to any other twelve (12) consecutive month period and, in the event
of any such change, Tenant's Share of Real Estate Taxes (as hereinafter
defined) shall be equitably adjusted for the Tax Years involved in any
such change.
(B) "TENANT'S SHARE" shall mean the percentage
figure so specified in the Basic Lease Information.
(C) "REAL ESTATE TAXES" shall mean all taxes,
assessments and charges levied upon or with respect to the Project or any
personal property of Landlord used in the operation of thereof, or
Landlord's interest in the Project or such personal property. Real Estate
Taxes shall include, without limitation, all general real property taxes
and general and special assessments, charges, fees or assessments for
transit, housing, police, fire or other governmental services or
purported benefits to the Building (provided, however, that any refunds
of Real Estate Taxes paid by Tenant (as part of Tenant's Share of Real
Estate Taxes) shall be credited against Tenant's further obligation to
pay Real Estate Taxes during the Term), service payments in lieu of
taxes, and any tax, fee or excise on the act of entering into this Lease,
or any other lease of space in the Building, or on the use or occupancy
of the Building or any part thereof, or on the rent payable under any
lease or in connection with the business of renting space in the
Building, that are now or hereafter levied or assessed against Landlord
by the United States of America, the State of California, or any
political subdivision, public corporation, district or any other
political or public entity, and shall also include any other tax, fee or
other excise, however described, that may be levied or assessed as a
substitute for, or as an addition to, in whole or in part, any other Real
Estate Taxes, whether or not now customary or in the contemplation of the
parties on the date of this Lease. Real Estate Taxes shall not include
franchise, transfer, inheritance or capital stock taxes, gift Or estate
taxes, any assessments in excess of the amount which would be payable if
such tax or assessment expense were paid in installments over the longest
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permitted term, any increases in taxes due to the improvement of the
Project for the sole use of other occupants, or income taxes measured by
the net income of Landlord from all sources unless, due to a change in
the method of taxation, any of such taxes is levied or assessed against
Landlord as a substitute for, in whole or in part, any other tax that
would otherwise constitute a Real Estate Tax. Additionally, Real Estate
Taxes shall not include any assessments or like charges to pay for any
remediation of contamination from any Hazardous Substance (which are not
the liability of Tenant pursuant to Paragraph 39 hereof). Real Estate
Taxes shall also include reasonable legal fees, costs and disbursements
incurred in connection with proceedings to contest, determine or reduce
Real Estate Taxes; provided that such fees, costs and disbursements do
not exceed the actual savings in Real Estate Taxes obtained by Tenant
over the Term of the Lease. If any assessments are levied on the Project,
Tenant shall have no obligation to pay more than that amount of annual
installments of principal and interest that would become due during the
Lease Term had Landlord elected to pay the assessment in installment
payments, even if Landlord pays the assessment in full.
(D) "EXPENSES" shall mean the total costs and
expenses reasonably paid or incurred by Landlord in connection with the
management, operation, maintenance and repair of the Building, including,
without limitation (i) the cost of air conditioning, electricity, steam,
heating, mechanical, ventilating, elevator systems and all other
utilities and the cost of supplies and equipment and maintenance and
service contracts in connection therewith; (ii) the cost of repairs and
general maintenance and cleaning; (iii) the cost of fire, extended
coverage, boiler, sprinkler, public liability, property damage, rent,
earthquake (if Landlord determines that it is available at commercially
reasonable rates) and other insurance obtained by Landlord in connection
with the Project, all including, without limitation, insurance premiums
and any deductible amounts paid by Landlord; (iv) fees, charges and other
costs, including management fees, consulting fees, legal fees (which are
allowed elsewhere in the Lease) and accounting fees, fees of all
independent contractors engaged by Landlord directly related to the
operation of the Building or reasonably charged by Landlord if Landlord
performs management services in connection with the Building, (though the
management fee shall not exceed the cap noted in the following
paragraph); (v) the cost of any capital improvements made to the Building
after the Commencement Date (a) as a labor saving device or to effect
other economies in the operation or maintenance of the Building (from
which a reasonable person would anticipate that savings would actually
result), (b) to repair or replace capital items which are no longer
capable of providing the services required of them, or (c) that are made
to the Building after the date of this Lease and are required under any
Laws (as defined in Paragraph 5), where such capital improvements were
not required under any such Laws to be completed with respect to the
Building prior to the date the Lease was executed, and in this regard,
during any calendar year, the cost of any capital improvements up to $.24
per square foot of the Rentable Area of the Premises, which are Tenant's
responsibility under the Lease, shall be expensed during that year, and
the cost of capital improvements incurred during any calendar year in
excess of such amount, which are the responsibility of Tenant pursuant to
this Lease, shall be amortized over the useful life of the capital item
in question as determined in accordance with generally accepted
accounting principles ("GAAP"), together with interest on the unamortized
balance at the greater of (x) the rate paid by Landlord on funds borrowed
for the purpose of constructing such capital improvements; or (y) 10% per
annum; and (vi) any other reasonable expenses of any other kind
whatsoever reasonably incurred in managing, operating, maintaining and
repairing the Building, including, but not limited to, costs incurred
pursuant to the Encumbrances identified in EXHIBIT E and the Building's
Share of Project Common Expenses. "Project Common Expenses" shall mean
any expenses paid or incurred by Landlord in connection with the
management, operation, maintenance and repair of the Project Common Areas
in the Project and any other Expenses paid or incurred by Landlord for
the benefit of the Project as a whole, including, but not limited to, the
cost of maintaining the parking lot and facilities and landscaping.
"Building's Share" shall mean the prorata portion of all Project Common
Expenses based on the amount of gross floor area of the Building as a
portion of the gross floor area of all applicable buildings in the
Project, all as reasonably determined by Landlord. Any "deductible"
amounts relating to capital improvements required to be paid by Tenant
hereunder in connection with any casualty policy carried by Landlord
shall be amortized over the useful life of the restoration work in
accordance with GAAP; provided, however, such amounts shall no longer
constitute Expenses from and after the date upon which Monthly Base Rent
is adjusted to fair market rental pursuant to the terms and conditions of
this Lease.
Notwithstanding anything to the contrary herein contained, Expenses shall
not include, and in no event shall Tenant have any obligation to pay for
pursuant to this Paragraph 3 or Paragraph 7(b), (aa) the initial
construction cost of the Project or real property on which the Building
is located; (bb) the cost of providing tenant improvements, renovations,
painting or redecorating (other than in Common Areas) to Tenant or any
other tenant; (cc) debt service (including, but without limitation,
interest, principal and any impound payments) required to be made on any
mortgage or deed of trust recorded with respect to the Building and/or
the real property on which the Building is located other than debt
service and financing charges imposed pursuant to Paragraph 3(c)(1)(D)(v)
above; (dd) the cost of special services, goods or materials provided to
any tenant; (ee) depreciation; (if) the portion of a management fee paid
to Landlord or affiliate in excess of three percent (3 %) of Base Rent
and Additional Charges (excluding the management fee); (gg) costs
occasioned by Landlord's fraud or willful misconduct under applicable
laws; (hh) costs for which Landlord has a right of and has received
reimbursement from others; (ii) costs to correct any construction or
design defects in the original construction of the Premises, the Building
or the Project; (ii) costs arising from a disproportionate use of any
utility or service supplied by Landlord to any other occupant of the
Building to the extent that Landlord has the ability to charge such other
tenant for said costs under the terms of a lease comparable to terms
governing said costs in this Lease; (kk) repairs, replacement and
upgrades to the structural elements of the Building; (ll)
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environmental pollution remediation related costs in connection with the
remediation of the Project including costs for which Landlord has
indemnified Tenant pursuant to Paragraph 39, except any such costs
incurred as the result of Tenant's use of the Premises; (mm) advertising
or promotional costs; (nn) leasing commissions; (oo) except as provided
in Paragraph 20, costs occasioned by casualties or by the exercise of the
power of eminent domain (other than deductible amounts under insurance
policies which shall be included as an Expense); and (pp) legal costs
incurred in connection with negotiations or disputes with any other
occupant (or prospective occupant) of the Project. In the event that the
Building or the Project is not at least ninety-five percent (95 5)
occupied during any fiscal year of the Term as determined by Landlord, an
adjustment shall be made in computing the Expenses and/or the Project
Common Expenses, as applicable, for such year so that Expenses and/or
Project Common Expenses, as applicable, which vary with occupancy shall
be computed as though the Building or Project, as applicable, had been
ninety-five percent (95 %) occupied; provided, however, that in no event
shall Landlord be entitled to collect in excess of one hundred percent
(100%) of the total Expenses from all of the tenants in the Building
including Tenant. All costs and expenses shall be determined in
accordance with generally accepted accounting principles which shall be
consistently applied (with accruals appropriate to Landlord's business).
Expenses shall not include specific costs incurred for the account of,
separately billed to and paid by specific tenants.
(E) "EXPENSE YEAR" shall mean each twelve (12)
consecutive month period commencing January 1 of the calendar year during
which the Commencement Date of the Lease occurs, provided that Landlord,
upon notice to Tenant, may change the Expense Year from time to time to
any other twelve (12) consecutive month period, and, in the event of any
such change, Tenant's Share of Expenses shall be equitably adjusted for
the Expense Years involved in any such change.
(2) PAYMENT OF REAL ESTATE TAXES: Commencing on the
Commencement Date, unless otherwise provided for in Paragraph 3 (a), Tenant
shall pay to Landlord as Additional Charges one-twelfth (1/12th) of Tenant's
Share of Real Estate Taxes fairly allocable to the Building as reasonably
determined by Landlord for each Tax Year on or before the first day of each
month during such Tax Year, in advance, in an amount reasonably estimated by
Landlord and billed by Landlord to Tenant, and Landlord shall have the right
initially to determine monthly estimates and to revise such estimates from time
to time. With reasonable promptness after Landlord has received the tax bills
for any Tax Year, Landlord shall furnish Tenant with a statement (herein called
"Landlord's Tax Statement") setting forth the amount of Real Estate Taxes for
such Tax Year, and Tenant's Share thereof. If the actual Real Estate Taxes for
such Tax Year exceed the estimated Real Estate Taxes paid by Tenant for such Tax
Year, Tenant shall pay to Landlord the difference between the amount paid by
Tenant and the actual Real Estate Taxes within fifteen (15) days after the
receipt of Landlord's Tax Statement, and if the total amount paid by Tenant for
any such Tax Year shall exceed the actual Real Estate Taxes for such Tax Year,
such excess shall be credited against the next installment of Real Estate Taxes
due from Tenant to. Landlord hereunder. If it has been determined that Tenant
has overpaid Real Estate Taxes during the last year of the Lease Term, then
Landlord shall reimburse Tenant for such overage on or before the thirtieth
(30th) day following the Expiration Date.
(3) PAYMENT OF EXPENSES: Commencing on the Commencement
Date, unless otherwise provided for in Paragraph 3(a), Tenant shall pay to
Landlord as Additional Charges one-twelfth (1/12th) of Tenant's Share of the
Expenses for each Expense Year on or before the first day of each month of such
Expense Year, in advance, in an amount reasonably estimated by Landlord and
billed by Landlord to Tenant, and Landlord shall have the right initially to
determine monthly estimates and to revise such estimates from time to time. With
reasonable promptness after the expiration of each Expense Year, Landlord shall
furnish Tenant with a statement (herein called "Landlord's Expense Statement"),
setting forth in reasonable detail the Expenses for such Expense Year and
Tenant's Share thereof. If the actual Expenses for such Expense Year exceed the
estimated Expenses paid by Tenant for such Expense Year, Tenant shall pay to
Landlord the difference between the amount paid by Tenant and the actual
Expenses within fifteen (15) days after the receipt of Landlord's Expense
Statement, and if the total amount paid by Tenant for any such Expense Year
shall exceed the actual Expenses for such Expense Year, such excess shall be
credited against the next installment of the estimated Expenses due from Tenant
to Landlord hereunder or if the Term has ended it shall be returned to Tenant
within thirty (30) days. Any utility rebates for the Project which Landlord
receives for payments made by Tenant (as part of Tenant's Share of Expenses)
shall be forwarded to Tenant so long as such rebate is received within one year
following the Expiration Date or sooner termination of the Lease. If it has been
determined that Tenant has overpaid Expenses during the last year of the Lease
Term (including rebates of utilities applicable to Tenant), then Landlord shall
reimburse Tenant for such overage on or before the thirtieth (30th) day
following the Expiration Date.
(4) OTHER: To the extent any item of Real Estate Taxes or
Expenses is payable by Landlord in advance of the period to which it is
applicable (e.g. insurance and tax escrows required by Landlord's Lender), or to
the extent that prepayment is customary for the service or matter, Landlord may
(i) include such items in Landlord's estimate for periods prior to the date such
item is to be paid by Landlord and (ii) to the extent Landlord has not collected
the full amount of such item prior to the date such item is to be paid by
Landlord, Landlord may include the balance of such full amount in a revised
monthly estimate for Additional Charges. If the Commencement Date or Expiration
Date shall occur on a date other than the first day of a Tax Year and/or Expense
Year, Tenant's share of Real Estate Taxes and Expenses, for the Tax Year and/or
Expense Year in which the Commencement Date occurs shall be prorated.
(5) AUDIT: Within ninety (90) days after receipt of any
Expense Statement or Tax Statement from Landlord, Tenant shall have the right to
examine Landlord's books and records relating to such Expense Statements and Tax
Statements, or cause an independent audit thereof to be conducted by an
accounting
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firm to be selected by Tenant and subject to the reasonable approval of
Landlord. If the audit conclusively proves that Tenant has overpaid either
Expenses or Real Estate Taxes, then Landlord shall promptly reimburse Tenant for
such overage, and if such overage exceeds five percent (5 %) of the actual
amount of Expenses or Real Estate Taxes paid by Landlord for the Tax or Expense
Year covered by such audit, then Landlord shall bear the cost of such audit, up
to a maximum cost of $5,000. If Tenant fails to object to any such Expense
Statement or Tax Statement or request an independent audit thereof within such
ninety (90) day period, such Expense Statement and/or Tax Statement shall be
final and shall not be subject to any audit, challenge or adjustment.
(d) LATE CHARGES. Tenant recognizes that late payment of
any Base Rent or Additional Charges will result in administrative expenses to
Landlord, the extent of which additional expense is extremely difficult and
economically impractical to ascertain. Tenant therefore agrees that if any Base
Rent or Additional Charges remain unpaid three (3) days after such amount is
due, the amount of such unpaid Base Rent or Additional Charges shall be
increased by a late charge to be paid to Landlord by Tenant in an amount equal
to four percent (4 %) of the amount of the delinquent Base Rent or Additional
Charges. Tenant shall be excused once each twelve (12) month period of the Term
from the application of a late fee to any Base Rent or Additional Charge which
became delinquent without a prior written invoice or other notice of Landlord;
provided, however, the late fee shall nevertheless be payable if Tenant does not
cure the delinquency within ten (10) days after written notice from Landlord. In
addition, any outstanding Base Rent, Additional Charges, late charges and other
outstanding amounts shall accrue interest at annualized rate of the lesser of
(i) the greater of, 10% or The Federal Reserve Discount Rate plus 5%, or (ii)
the maximum rate permitted by law (the "Default Rate"), until paid to Landlord.
Tenant agrees that such amount is a reasonable estimate of the loss and expense
to be suffered by Landlord as a result of such late payment by Tenant and may be
charged by Landlord to defray such loss and expense. The provisions of this
Paragraph 3(d) in no way relieve Tenant of the obligation to pay Rent or
Additional Charges on or before the date on which they are due, nor do the terms
of this Paragraph 3(d) in any way affect Landlord's remedies pursuant to
Paragraph 19 in the event any Base Rent or Additional Charges are unpaid after
the date due.
4. RESTRICTIONS ON USE. Tenant shall not do or permit anything to be
done in or about the Premises which will obstruct or interfere with the rights
of other tenants or occupants of the Building or the Project or injure or annoy
them, nor use or allow the Premises to be used for any unlawful purpose, nor
shall Tenant cause or maintain or permit any nuisance in, on or about the
Premises. Tenant shall not commit or suffer the commission of any waste in, on
or about the Premises.
5. COMPLIANCE WITH LAWS.
(a) TENANT'S COMPLIANCE OBLIGATIONS. Tenant shall not use the
Premises or permit anything to be done in or about the Premises which will in
any way conflict with any present and future laws, statutes, ordinances,
resolutions, regulations, proclamations, orders or decrees of any municipal,
county, state or federal government or other governmental or regulatory
authority with jurisdiction over the Project, or any portion thereof, whether
currently in effect or adopted in the future and whether or not in the
contemplation of the parties hereto (collectively, "Laws"), and Tenant shall
promptly, at its sole expense, maintain the Premises, any Alterations (as
defined in Paragraph 6 below) permitted hereunder and Tenant's use and
operations thereon in strict compliance at all times with all Laws. "Laws" shall
include, without limitation, all Laws relating to health and safety (including,
without limitation, the California Occupational Safety and Health Act of 1973 an
the California Safe Drinking Water and Toxic Enforcement Act of 1986, including
posting and delivery of notices required by such Laws with respect to the
Premises) and disabled accessibility (including, without limitation, the
Americans with Disabilities Act, 42 U.S.C. section 12101 ET SEQ.), Hazardous
Substances, and all present and future life safety, fire, sprinkler, seismic
retrofit, building code and municipal code requirements; provided however, that
Tenant's obligation to comply with Laws relating to Hazardous Substances is
subject to the terms and conditions of Paragraph 39, and Tenant shall not be
responsible for compliance with clean-up provisions of any Laws with respect to
Hazardous Substances except to the extent of any release caused by the Tenant
Parties or otherwise included in Tenant's indemnity contained in Paragraph 39.
Notwithstanding the foregoing, Landlord, and not Tenant, shall be responsible
for correcting any condition at the Premises which is in violation of applicable
Laws on or prior to the Commencement Date, except to the extent such condition
is caused by the acts or omissions of the Tenant Parties or such violation
results from Tenant's use of the Premises in a manner other than as permitted
under this Lease. Notwithstanding the first sentence of this Paragraph 5(a),
Tenant shall not be required to make any alterations to the Premises in order to
comply with Laws unless the requirement that such alterations be made is
triggered by any of the following (or, if such requirement results from the
cumulative effect of any of the following when added to other acts, omissions,
negligence or events, to the extent such alterations are required by any of the
following): (i) the installation, use or operation of any Alterations, or any of
Tenant's trade fixtures or personal property; (ii) the acts, omissions or
negligence of Tenant, or any of its servants, employees, contractors, agents or
licensees; or (iii) the particular use or particular occupancy or manner of use
or occupancy of the Premises by Tenant, or any of its servants, employees,
contractors, agents or licensees. Any alterations that are Tenant's
responsibility pursuant to this Paragraph 5 shall be made in accordance with
Paragraph 6 below. The parties acknowledge and agree that Tenant's obligation to
comply with all Laws as provided in this paragraph (subject to the limitations
contained herein) is a material part of the bargained-for consideration under
this Lease. Tenant's obligations under this Paragraph and under Paragraph 7(c)
below shall include, without limitation, the responsibility of Tenant to make
substantial or structural repairs and alterations to the Premises to the extent
provided above, regardless of, among other factors, the relationship of the cost
of curative action to the Rent under this Lease, the length of the then
remaining Term hereof, the relative benefit of the repairs to Tenant or
landlord, the degree to which the curative action may interfere with Tenant's
use or enjoyment of the Premises, and the likelihood that the parties
contemplated the particular Law involved.
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(b) INSURANCE REQUIREMENTS. Tenant shall not do or permit
anything to be done in or about the Premises or bring or keep anything therein
which will in any way increase the rate of any insurance upon the Project or any
of its contents (unless Tenant agrees to pay for such increase) or cause a
cancellation of any insurance on the Project or otherwise violate any
requirements, guidelines, conditions, rules or orders with respect to such
insurance. Tenant shall at its sole cost and expense promptly comply with the
requirements of the ISO, board of fire underwriters, or other similar body now
or hereafter constituted relating to or affecting Tenant's use or occupancy of
the Project (other than in situations where compliance involves repair,
maintenance or replacement of items that Landlord is expressly required to
repair, maintain or replace under this Lease).
(c) NO LIMITATION ON OBLIGATIONS. The provisions of this
Paragraph 5 shall in no way limit Tenant's maintenance, repair and replacement
obligations under Paragraph 7 or Tenant's obligation to pay Expenses under
Paragraph 3(c). The judgment of any court of competent jurisdiction or the
admission of Tenant in an action against Tenant, whether Landlord is a party
thereto or not, that Tenant has so violated any such Law shall be conclusive of
such violation as between Landlord and Tenant.
or cause a cancellation of such insurance or otherwise affect such insurance in
any manner, and Tenant shall at its sole cost and expense promptly comply with
all laws, statutes, ordinances and governmental rules, regulations or
requirements now in force or which may hereafter be in force and with the
requirements of any board or fire underwriters or other similar body now or
hereafter constituted relating to or affecting the condition, use or occupancy
of the Premises, to the extent required because of (i) Tenant's unique use of
the Premises, (ii) alterations or improvements made by or for Tenant, or (iii)
Tenant's negligence or willful misconduct. The provisions of this Paragraph 5
shall in no way limit Tenant's obligation to pay Expenses as noted in Paragraph
3 of the Lease. The judgment of any court of competent jurisdiction or the
admission of Tenant in an action against Tenant, whether Landlord be a party
thereto or not, that Tenant has so violated any such law, statute, ordinance,
rule, regulation or requirement, shall be conclusive of such violation as
between Landlord and Tenant.
6. ADDITIONAL ALTERATIONS. Tenant shall not make or suffer to be made
any additional alterations, additions or improvements ("Alterations") in, on or
to the Premises or any part thereof without the prior written consent of
Landlord. Failure of Landlord to give its disapproval within fifteen (15)
calendar days after receipt of Tenant's written request for approval shall
constitute disapproval by Landlord. Any alterations in, on or to the Premises,
except for Tenant's movable furniture and equipment (including the telephone
system, security system, demountable partitions, secretarial stations, cubicles,
cabinets or shelving systems and kitchen equipment, except to the extent paid
for with the Tenant Improvement Allowance or Additional Allowance), shall be the
property of Tenant during the Term and shall become Landlord's property at the
end of the Term without compensation to Tenant. Landlord shall not unreasonably
withhold its consent to Alterations that (i) do not materially affect the
structure of the Building or its electrical, plumbing, HVAC, security or other
systems, (ii) are not visible from the exterior of the Premises, (iii) are
consistent with Tenant's permitted use hereunder, and (iv) do not adversely
affect the value or marketability of Landlord's reversionary interest upon
termination or expiration of this Lease. In the event Landlord consents to the
making of any Alterations by Tenant, the same shall be made by Tenant, at
Tenant's sole cost and expense, in accordance with plans and specifications
reasonably approved by Landlord, and any contractor or person selected by Tenant
to make the same must first be reasonably approved in writing by Landlord or, at
Landlord's option, the Alterations shall be made by Landlord (substantially in
accordance with the terms of the Work Letter attached hereto to the extent
applicable to such alterations) for Tenant's account and Tenant shall reimburse
Landlord. for the cost thereof (including a reasonable charge for Landlord's
overhead) within twenty (20) days after receipt of a statement from Landlord
therefor. Upon the expiration or sooner termination of the Term, Tenant shall
upon demand by Landlord, at Landlord's election either (i) at Tenant's sole cost
and expense, forthwith and with all due diligence remove any Alterations made by
or for the account of Tenant, designated by Landlord to be removed (provided,
however, that upon the written request of Tenant prior to installation of such
Alterations Landlord shall advise Tenant at that time whether or not such
Alterations must be removed upon the expiration or sooner termination of this
Lease), and restore the Premises to its original condition as of the
Commencement Date, subject to normal wear and tear and the rights and
obligations of Tenant concerning casualty damage pursuant to Paragraph 20 or
(ii) pay Landlord the reasonable estimated cost thereof.
7. REPAIR AND MAINTENANCE.
(a) Landlord shall be responsible for the following repair,
replacement and maintenance obligations: (i) maintenance and repair of the
exterior of the Building, roof and structural portions of the Building, (ii)
repairs, replacement, and maintenance of the Building systems, including,
without limitation, electrical, mechanical, HVAC and plumbing and all controls
appurtenant thereto, (iii) repairs, replacement and maintenance of any elevators
in the Building, (iv) repair, replacement and maintenance of Common Areas, (v)
alterations to the Premises required under applicable Laws to the extent not the
responsibility of Tenant pursuant to Paragraph 5 or 6 hereof, (vi) any repair,
maintenance or improvements which could be treated as a "capital expenditure"
under generally accepted accounting principles, (vii) any repair, maintenance or
improvements which are a result of casualty or the exercise of the power of
eminent domain which are Landlord's responsibility under Paragraph 20 or 21,
(viii) repairs and replacements of lighting equipment (including light bulbs),
(ix) any repair, maintenance or improvements which are required as a consequence
of construction defects in Landlord's work or the Tenant Improvements, (x) any
repair, maintenance or improvements for which Landlord has a right of
reimbursement from others. Notwithstanding the foregoing, Tenant shall be
responsible for Tenant's Share of the costs described in the previous sentence
to the extend such costs are properly included in Expenses.
(b) Tenant shall maintain and repair the interior portion of the
Premises and any Alterations
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installed by or on behalf of Tenant within the Premises, however, excluding any
portions thereof which are structural in nature or which are the obligation of
Landlord under Paragraph 7(a) (subject to Paragraphs 5 and 7(c)). Tenant shall
be responsible for the expense of installation, operation, and maintenance of
its telephone and other communications cabling from the point of entry into the
Building to the Premises and throughout the Premises; though Landlord shall have
the right to perform such work on behalf of Tenant in Common Areas. Tenant
hereby waives and releases its right to make repairs at Landlord's expense under
Sections 1941 and 1942 of the California Civil Code or under any similar law,
statute or ordinance now or hereafter in effect. In addition, Tenant hereby
waives and releases its right to terminate this Lease under Section 1932(1) of
the California Civil Code or under any similar law, statute or ordinance now or
hereafter in effect. If Tenant fails after thirty (30) days' written notice by
Landlord to proceed with due diligence to make repairs required to be made by
Tenant, the same may be made by Landlord at the expense of Tenant and the
expenses thereof incurred by Landlord shall be reimbursed (with interest at the
Default Rate from the date Landlord incurs such cost) as Additional Charges
within thirty (30) days after submission of a bill or statement therefor.
(c) The purpose of Paragraph 7(a) and 7(b) is to define the
obligations of Landlord and Tenant to perform various repair and maintenance
functions; the allocation of the costs therefor are covered under this Paragraph
7(c) and Paragraph 3. Tenant shall bear the full cost of repairs or maintenance
interior or exterior, structural or otherwise, to preserve the Premises and the
Building in good working order and condition, arising out of (i) the existence,
installation, use or operation of any Alterations, or any of Tenant's trade
fixtures or personal property; (ii) the moving of Tenant's property or fixtures
in or out of the Building or Project or in and about the Premises; or (iii)
except to the extent any claims arising from any of the foregoing are reimbursed
by insurance carried by Landlord, are covered by the waiver of subrogation in
Paragraph 11 or are otherwise provided for in Paragraph 20, the acts, omissions
or negligence of Tenant, or any of its servants, employees, contractors, agents,
visitors, or licensees, or the particular use or particular occupancy or manner
of use or occupancy of the Premises by Tenant or any such person. Any to
Alterations required with respect Tenant's responsibilities pursuant to this
Paragraph 7(c) shall be made in accordance with Paragraph 6.
(d) Except to the extent any claims arising from any of the
foregoing are reimbursed by rental abatement insurance carried by Landlord,
are covered by the waiver of subrogation in Paragraph 11 or are otherwise
provided for in Paragraph 20, there shall be no abatement of Rent with
respect to, and except for Landlord's active negligence or willful
misconduct, Landlord shall not be liable for any injury to or interference
with Tenant's business arising from any repairs, maintenance, alteration or
improvement in or to any portion of the Building, including the Premises, or
in or to the fixtures, appurtenances and equipment therein.
8. LIENS. Tenant shall keep the Premises free from any liens arising
out of any work performed, material furnished or obligations incurred by Tenant.
In the event that Tenant shall not, within fifteen (15) clays after Tenant
receives actual notice of the imposition of any such lien, cause the same to be
released of record by payment or posting of a proper bond, Landlord shall have,
in addition to all other remedies provided herein and by law, the right, but not
the obligation, to cause the same to be released by such means as it shall deem
proper, including payment of the claim giving rise to such lien. All such sums
paid by Landlord and all expenses incurred by it in connection therewith shall
be considered Additional Charges and shall be payable to it by Tenant on demand
with interest at the Default Rate. Landlord shall have the right at all times to
post and keep posted on the Premises any notices permitted or required by law,
or which Landlord shall deem proper, for the protection of Landlord, the
Premises, the Building and any other party having an interest therein, from
mechanics and materialmen's liens, and Tenant shall give notice to Landlord at
least five (5) business days' prior notice of commencement of any construction
on the Premises.
9. ASSIGNMENT AND SUBLETTING.
(a) Tenant shall not directly or indirectly, voluntarily or by
operation of law, sell, assign, encumber, pledge or otherwise transfer or
hypothecate all or any part of the Premises or Tenant's leasehold estate
hereunder (collectively, "Assignment"), or permit the Premises to be occupied by
anyone other than Tenant or sublet the Premises or any portion thereof
(collectively, "Sublease"), without Landlord's prior written consent in each
instance, which consent shall not be unreasonably withheld by Landlord. Without
otherwise limiting the criteria upon which Landlord may withhold its consent to
any proposed Sublease or Assignment, if Landlord withholds its consent where
either (i) the creditworthiness of the proposed Sublessee or Assignee is not
reasonably acceptable to Landlord or, (ii) the proposed Sublessee's or
Assignee's use of the Premises is not in compliance with the allowed Tenant's
Use of the Premises as described in the Basic Lease Information, such
withholding of consent shall be presumptively reasonable. If Landlord consents
to the Sublease or Assignment, Tenant may thereafter enter into a valid Sublease
or Assignment upon the terms and condition set forth in this Paragraph 9.
(b) If Tenant desires at any time to enter into an Assignment of
this Lease or a Sublease of the Premises or any portion thereof, it shall first
give written notice to Landlord of its desire to do so, which notice shall
contain (i) the name of the proposed assignee, subtenant or occupant; (ii) the
name of the proposed assignee's, subtenant, or occupant's business to be carried
on in the Premises; (iii) the terms and provisions of the proposed Assignment or
Sublease; and (iv) such financial information as Landlord may request concerning
the proposed assignee, subtenant or occupant.
(c) At any time within fifteen (15) days after Landlord's receipt
of the notice specified in Paragraph 9(b), Landlord may by written notice to
Tenant elect to (i) consent to the Sublease or Assignment; (ii) disapprove the
Sublease or Assignment; or (iii) terminate this Lease as to the portion of the
Premises that is specified in Tenant's notice, with a proportionate abatement in
Base Rent and Additional Charges and Security Deposit/Letter of Credit;
provided, however, that Landlord shall only have the termination option set
forth in
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clause (iii) if at the time of receipt of such notice, and after taking into
account the Assignment or Sublease contemplated by such notice and the Initial
Sublease (if any), Tenant will directly occupy less than seventy-five percent
(75%) of the Premises. If Landlord elects to terminate the Lease as to a portion
of the Premises pursuant to clause (iii) above, Tenant shall it all times
provide reasonable and appropriate access to such portion of the Premises and
use of any common facilities within the Building. Promptly after request from
Landlord, Tenant shall enter into any amendment to this Lease or other
documentation reasonably requested by Landlord in connection with any such
termination of this Lease as to a portion of the Premises. Failure by Landlord
to either consent to or disapprove a proposed Assignment or Sublease within the
fifteen (15) day time period specified above shall be deemed to be Landlord's
consent thereto.
If Landlord consents to the Sublease or Assignment within said
fifteen (15) day period, Tenant may thereafter Within one hundred twenty
(120) days after Landlord's consent, but not later than the expiration of
said one hundred twenty (120) days, enter into such Assignment or Sublease of
the Premises or portion thereof upon the terms and conditions set forth in
the notice furnished by Tenant to Landlord pursuant to Paragraph 9(b).
However;, during any period of time in which Tenant directly occupies less
than seventy-five percent (75%) of the Premises (regardless of whether such
occupancy threshold is not met at the time the Sublease or Assignment is
entered into or at any time after such Assignment or during the term of such
Sublease), fifty percent (50%) of any rent or other consideration realized by
Tenant under any such Assignment or Sublease in excess of the Base Rent and
Additional Charges payable hereunder (or the amount thereof proportionate to
the portion of the Premises subject to such Sublease or Assignment) shall be
paid to Landlord ("Bonus Rent"), after first deducting from such excess the
unamortized costs of any portion of the Tenant Improvements paid for by
Tenant, (and not from the Tenant Improvement Allowance or Additional
Allowance) or costs reasonably incurred for tenant improvements installed by
Tenant to obtain the Sublease or Assignment in question, each of which are
installed in that portion of the Premises which is the subject of the
Sublease or Assignment and which unamortized costs shall be amortized on a
straight line basis (without interest) over the term of the Sublease or
Assignment in equal installments, and after deducting therefrom any customary
brokers' commissions that Tenant has incurred in connection with such
Assignment or Sublease amortized on a straight line basis (without interest)
over the term of the Sublease or Assignment.
(d) No consent by Landlord to any Assignment or Sublease by Tenant
shall relieve Tenant of any obligation to be performed by Tenant under this
Lease, whether arising before or after the Assignment or Sublease. The consent
by Landlord to any Assignment or Sublease shall not relieve Tenant from the
obligation to obtain Landlord's express written consent to any other Assignment
or Sublease. Any Assignment or Sublease that is not in compliance with this
Paragraph 9 shall be void and, at the option of Landlord, shall constitute a
material default by Tenant under this Lease. The acceptance of Base Rent or
Additional Charges by Landlord from a proposed assignee or sublessee shall not
constitute the consent to such Assignment or Sublease by Landlord.
(e) The following shall be deemed a voluntary assignment of
Tenant's interest in this Lease: (i) any dissolution, merger, consolidation, or
other reorganization of Tenant; and (ii) if the capital stock of Tenant is not
publicly traded, the sale or transfer to one person or entity stock possessing
more than fifty percent (50%) of the total combined voting power of all classes
of Tenant's stock issued, outstanding and entitled to vote for the election of
directors. Notwithstanding anything to the contrary contained in this Paragraph
9, Tenant may enter into any of the following transfers (a "Permitted Transfer")
without Landlord's prior written consent: (1) Tenant may assign its interest in
the Lease to a corporation which results from a merger, consolidation or other
reorganization, so long as the surviving corporation has a net worth immediately
following such transaction that is equal to or greater than the net worth of
Tenant as of the date immediately prior to such transaction; and (2) Tenant may
assign this Lease to a corporation which purchases or otherwise acquires all or
substantially all of the assets of Tenant, so long as such acquiring corporation
has a net worth immediately following such transaction that is equal to or
greater than the net worth of Tenant as of the date immediately prior to such
transaction.
(f) Each assignee, sublessee or other transferee, other than
Landlord, shall assume, as provided in this Paragraph 9(f), all obligations of
Tenant under this Lease and shall be and remain liable jointly and severally
with Tenant for the payment of Base Rent and Additional Charges, and for the
performance of all the terms, covenants, conditions and agreements herein
contained on Tenant's part to be performed for the Term; provided, however, that
the assignee, sublessee, mortgagee, pledgee or other transferee shall be liable
to Landlord for rent only in the amount set forth in the Assignment or Sublease
and shall only be required to perform those obligations under the Lease to the
extent that they relate to the portion of the Premises subleased or interest in
the Lease assigned. No Assignment shall be binding on Landlord unless the
assignee or Tenant shall deliver to Landlord a counterpart of the Assignment and
an instrument in recordable form that contains a covenant of assumption by the
assignee satisfactory in substance and form to Landlord, consistent with the
requirements of this Paragraph 9(f), but the failure or refusal of the assignee
to execute such instrument of assumption shall not release or discharge the
assignee from its liability as set forth above.
(g) Tenant shall have the right, without Landlord's consent but
with written notice to Landlord at least ten (10) days prior thereto, to enter
into an Assignment of Tenant's interest in the Lease or a Sublease of all or any
portion of the Premises to an Affiliate (as defined below) of Tenant, provided
that (i) in connection with an Assignment that is not a sublease, the Affiliate
delivers to Landlord concurrent with such Assignment a written notice of the
Assignment and an assumption agreement whereby the Affiliate assumes and agrees
to
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perform, observe and abide by the terms, conditions, obligations, and provisions
of this Lease; and (ii) the entity remains an Affiliate throughout the term of
this Lease (and the assumption agreement shall contain provisions consistent
with the provisions of this subparagraph allowing Landlord to terminate this
Lease at such time as the entity is no longer an Affiliate of the original
Tenant). If this Lease is assigned to an Affiliate and thereafter any
circumstance occurs which causes such assignee to no longer be an Affiliate of
the original Tenant, Tenant shall give written notice thereof to Landlord, which
notice, to become effective, shall refer to Landlord's right to terminate this
Lease pursuant to this subparagraph ("Affiliation Termination Notice").
Following occurrence of the circumstance giving rise to the discontinuation of
such assignee being an Affiliate ("Affiliate Termination") of the original
Tenant, Landlord shall be entitled to terminate this Lease unless Landlord has
given its prior written consent to such circumstance, which consent shall not be
unreasonably withheld by Landlord so long as such assignee (after giving effect
to such circumstance) has financial strength (as demonstrated by audited
financial statements) equal to or greater than the original Tenant (including
its net worth) as of the date of execution of this Lease, or the original Tenant
executes a guaranty in usual form reasonably acceptable to Landlord (however,
this does not imply that Tenant would be released without such guaranty). No
Sublease or Assignment by Tenant made pursuant to this Paragraph shall relieve
Tenant of Tenant's obligations under this Lease. As used in this paragraph, the
term "Affiliate" shall mean and collectively refer to a corporation or other
entity which controls, is controlled by or is under common control with Tenant,
by means of an ownership of either (aa) more than fifty percent (50%) of the
outstanding voting shares of stock or partnership or other ownership interests,
or (bb) stock, or partnership or other ownership interests, which provide the
right to control the operations, transactions and activities of the applicable
entity.
(h) Tenant shall have a one-time right to sublease a portion of
the Premises, not to exceed 10,000 Rentable Square Feet, to a single subtenant
for a term not to exceed the Initial Term of this Lease (the "Initial
Sublease"), upon Landlord's prior written consent in accordance with the
standards set forth in this Paragraph 9(a); provided, however, that with respect
to the Initial Sublease (i) Tenant's request to Landlord for consent to such
Sublease shall state that, if approved, it will be the "Initial Sublease", (ii)
Landlord shall not have the termination right set forth in clause (iii) of
Paragraph 9(c), and (iii) Landlord shall not be entitled to share in any Bonus
Rent as provided in Paragraph 9(c).
10. INSURANCE AND INDEMNIFICATION.
(a) Except to the extent caused by the negligence or willful
misconduct of Tenant Parties (as defined in Paragraph 10(c) below) or Tenant's
breach of this Lease, Landlord shall indemnify and hold Tenant harmless from and
against any and all claims or liability for any injury or damage to any person
or property including any reasonable attorney's fees (but excluding any
consequential damages or loss of business) occurring in, on, or about the
Project to the extent such injury or damage is caused by the negligence or
willful misconduct of Landlord, its agents, servants, contractors, employees
(collectively, including Landlord, "Landlord Parties") or Landlord's breach of
this Lease.
(b) Landlord shall not be liable to Tenant, and Tenant hereby
waives all claims against Landlord Parties for any injury or damage to any
person or property in or about the Premises by or from any cause whatsoever
(other than the negligence or willful misconduct of Landlord Parties, including
Landlord's negligence or willful misconduct as related to construction or
property management), and without limiting the generality of the foregoing,
whether caused by water leakage of any character from the roof, walls, basement,
or other portion of the Premises or the Building, or caused by gas, fire, oil,
electricity, or any cause whatsoever, in, on, or about the Premises, the
Building or any part thereof (other than that caused by the negligence or
willful misconduct of Landlord Parties). Tenant acknowledges that any casualty
insurance carried by Landlord will not cover loss of income to Tenant or damage
to the alterations in the Premises installed by Tenant or Tenant's personal
property located within the Premises. Tenant shall be required to maintain the
insurance described in Subparagraph 10(d) below during the Term.
(c) Except to the extent caused by the negligence or willful
misconduct of Landlord Parties or Landlord's breach of this Lease, Tenant shall
indemnify and hold Landlord harmless from and defend Landlord against any and
all claims or liability for any injury or damage to any person or property
whatsoever: (i) occurring in or on the Premises; or (ii) occurring in, on, or
about any other portion of the Project to the extent such injury or damage shall
be caused by the negligence or willful misconduct by Tenant, its agents,
servants, employees, or invitees (collectively, including Tenant, "Tenant
Parties"). Tenant further agrees to indemnify and hold Landlord harmless from,
and defend Landlord against, any and all claims, losses, or liabilities
(including damage to Landlord's property) arising from (x) any breach of this
Lease by Tenant and/or (y) the conduct of any work or business of Tenant Parties
in or about the Project. This Section 20 does not govern liability for Hazardous
Substances, which subject is governed by Paragraph 39 of the Lease concerning
Hazardous Substance liability.
(d) Tenant shall procure at its cost and expense and keep in
effect during the Term the following insurance: (i) commercial general liability
insurance including contractual liability with a minimum combined single limit
of liability of Three Million Dollars ($3,000,000). Such insurance shall name
Landlord as an additional insured, shall specifically include the liability
assumed hereunder by Tenant, and shall provide that it is primary insurance, and
not excess over or contributory with any other valid, existing, and applicable
insurance in force for or on behalf of Landlord, and shall provide that Landlord
shall receive thirty (30) days' written notice from the insurer prior to any
cancellation or change of coverage; (ii) business interruption insurance,
insuring Tenant for a period of twelve (12) months against losses arising from
the interruption of Tenant's business, and for lost profits, and charges and
expenses which continue but would have been earned if the business had gone on
without interruption, insuring against such perils, in such form and with such
deductible amount as are reasonably satisfactory to Landlord, (iii) "all risk"
property insurance (including,
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without limitation, boiler and machinery (if applicable); sprinkler damage,
vandalism and malicious mischief) on all leasehold improvements installed in the
Premises by Tenant at its expense (if any), and on all Tenant's personal
property. Such insurance shall be an amount equal to full replacement cost of
the aggregate of the foregoing and shall provide coverage comparable to the
coverage in the standard ISO All Risk form, when such form is supplemented with
the coverages required above; (iv) worker's compensation insurance; and (v) such
other insurance as may be required by the law. Tenant shall deliver policies of
such insurance or certificates thereof to Landlord on or before the Commencement
Date, and thereafter at least thirty (30) days before the expiration dates of
expiring policies; and, in the event Tenant shall fail to procure such
insurance, or to deliver such policies or certificates, Landlord may, at its
option, procure same for the account of Tenant, and the cost thereof shall be
paid to Landlord as Additional Charges within five (5) days after delivery to
Tenant of bills therefor.
(e) The provisions of this paragraph 10 shall survive the
expiration or termination of this Lease with respect to any claims or liability
occurring prior to such expiration or termination.
(f) Landlord shall maintain insurance on the Project against fire
and risks covered by "all risk" (excluding earthquake and flood, though
Landlord, at its option, may include this coverage) on a 100% of "replacement
cost" basis (though reasonable deductibles may be included under such coverage).
Landlord's insurance shall also cover the improvements installed by Landlord
prior to the commencement of the Term, shall have a building ordinance
provision, and shall provide fax rental interruption insurance covering a period
of twelve (12) full months. In no event shall Landlord be deemed a co-insurer
under such policy. Landlord shall also maintain contractual liability coverage
(or with contractual liability endorsement) on an occurrence basis in amounts
not less than Three Million Dollars ($3,000,000) per occurrence with respect to
bodily injury or death and property damage. Notwithstanding the foregoing
obligations of Landlord to carry insurance, Landlord may modify the foregoing
coverages if and to the extent it is commercially reasonable to do so.
11. WAIVER OF SUBROGATION. Notwithstanding anything to the contrary
in this Lease, to the extent that this waiver does not invalidate or impair
their respective insurance policies, the parties hereto release each other and
their respective agents, employees, successors, assignees and subtenants from
all liability for injury to any person or damage to any property that is caused
by or results from a risk (i) which is actually insured against, to the extent
of receipt of payment under such policy (unless the failure to receive payment
under any such policy results from a failure of the insured party to comply with
or observe the terms and conditions of the insurance policy covering such
liability, in which event, such release shall not be so limited), (ii) which is
required to be insured against under this Lease, or (iii) which would normally
be covered by the standard form of "all risk-extended coverage" casualty
insurance, without regard to the negligence or willful misconduct of the entity
so released. Landlord and Tenant shall each obtain from their respective
insurers under all policies of fire, theft, and other property insurance
maintained by either of them at any time during the Term insuring or covering
the Project or any portion thereof of its contents therein, a waiver of all
rights of subrogation which the insurer of one party might otherwise, if at all,
have against the other party, and Landlord and Tenant shall each indemnify the
other against any loss or expense, including reasonable attorneys' fees,
resulting from the failure to obtain such waiver.
12. SERVICES AND UTILITIES.
(a) Landlord shall provide the maintenance and repairs described
in paragraph 7(a), except for damage occasioned by the act of Tenant, which
damage shall be repaired by Landlord at Tenant's expense.
(b) Subject to the provisions elsewhere herein contained and to
the rules and regulations of the Building, Landlord agrees to furnish to the
premises during ordinary business hours of generally recognized business days,
to be determined by Landlord (but exclusive, in any event, of Saturdays, Sundays
and legal holidays), water and electricity suitable for the intended use of the
Premises, heat and air conditioning required in Landlord's judgment for the
comfortable use and occupation of the Premises, janitorial services during the
times and in the manner that such services are, in landlord's judgment,
customarily furnished in comparable office buildings in the immediate market
area, and elevator service (if the Building has an elevator) which shall mean
service either by non-attended automatic elevators or elevators with attendants,
or both, at the option of the Landlord. Notwithstanding the above, except in the
case of emergencies, utilities to the Building shall be provided every day. At
Tenant's request, Landlord shall provide additional or after hours heating or
air conditioning and Tenant shall pay to Landlord a reasonable charge for such
services as determined by Landlord (not to exceed Landlord's actual costs, which
costs do not include depreciation). Tenant agrees at all times to cooperate
fully with Landlord and to abide by all the regulations and requirements which
Landlord may prescribe for the proper functioning and protection of the heating,
ventilating and air conditioning system. Wherever heat generating machines,
excess lighting or equipment are used in the Premises which affect the
temperature otherwise maintained by the air conditioning system, Landlord
reserves the right to install supplementary air conditioning units in the
Premises, and the cost thereof, including the cost of installation and the cost
of operation and maintenance thereof, shall be paid by Tenant to Landlord upon
demand by Landlord. To the extent Tenant requires water, electricity, heat, air
conditioning or other services in portions of the Premises which are not metered
separately from other tenants of the Project and in amounts in excess of amounts
delivered to such other tenants of the Project as reasonably determined by
Landlord, Tenant shall pay to Landlord a reasonable charge for such excess
amounts as determined by Landlord. Landlord shall make available to Tenant
reasonable documentation supporting its charges for such excess services.
(c) Tenant will not without the written consent of Landlord, which
consent shall not be unreasonably withheld or delayed, use any apparatus or
device in the Premises which, when used, puts an excessive load on the Building
or its structure or systems, including, without limitation, electronic data
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processing machines, punch card machines and machines using excess lighting or
voltage in excess of the amount for which the Building is designed, which will
in any way materially increase the amount of gas, electricity or water usually
furnished or supplied for use of the Premises as general office space; nor
connect with electric current, except through existing electrical outlets in the
Premises, or water pipes or gas outlets, any apparatus or device for the
purposes of using gas, electrical current or water. If Tenant shall require
water or electrical current or any other resource in excess of that usually
furnished or supplied for use of the Premises as general office space, Tenant
shall first obtain the consent of Landlord, which Landlord may refuse, to the
use thereof, and Landlord may cause a special meter to be installed in the
Premises so as to measure the amount of water, electric current or other
resource consumed for any such other use. The cost of any such meters and of
installation, maintenance an repair thereof shall be paid for by Tenant, and
Tenant agrees to pay Landlord promptly upon demand by Landlord for all such
water, electric current or other resource consumed, as shown by said meters, at
the rates charged by the local public utility, furnishing the same, plus any
additional expense incurred in keeping account of the water, electric current or
other resource so consumed.
(d) Landlord shall not be in default hereunder, nor be deemed to
have evicted Tenant, nor be liable for any damages directly or indirectly
resulting from, nor shall the rental herein reserved be abated by reason of (i)
the installation, use or interruption of use of any equipment in connection with
the foregoing utilities and services; (ii) failure to furnish or delay in
furnishing any services to be provided by Landlord when such failure or delay is
caused by Force Majeure, or by the making of repairs or improvements to the
Premises or to the Building (unless such failure or delay is caused by
Landlord's negligence or willful misconduct); or (iii) the limitation,
curtailment, rationing or restriction on use of water, electricity, gas or any
other form of energy, or any other service or utility whatsoever serving the
Premises, the Building or the Project. Furthermore, Landlord shall be entitled
to cooperate with the mandatory requirements of national, state or local
governmental agencies or Utilities suppliers in connection with reducing energy
or other resources consumption. If the Premises become unsuitable for Tenant's
use as a consequence of cessation of gas and electric utilities or other
services provided to the Premises resulting from a casualty covered by
Landlord's insurance, then Tenant's Base Rent and Additional Charges shall abate
during the period of time in which Tenant cannot occupy the Premises for
Tenant's use, but only to the extent of rental abatement insurance proceeds
received by Landlord. Landlord shall use reasonable diligence to make such
repairs as may be required to lines, cables, wires, pipes equipment or machinery
within the Project to provide restoration of the services Landlord is
responsible for providing under this Paragraph 12 and, where the cessation or
interruption of such services has occurred due to circumstances or conditions
beyond Project boundaries, to cause the same to be restored, by diligent
application or request to the provider thereof. In no event shall any
mortgagee or beneficiary under any mortgage or deed of trust on all or any
portion of the Project, the Building, or the land on which all or any portion of
the Project is located (any such mortgagee or beneficiary, a "Mortgagee") be or
become liable for any default of Landlord under this Paragraph 12.
13. TENANT'S CERTIFICATES. Tenant, at any time and from time to time,
within ten (10) days from receipt of written notice from Landlord, will execute,
acknowledge and deliver to Landlord and, at Landlord's request, to any
prospective tenant, purchaser, ground or underlying lessor or Mortgagee or any
other party acquiring an interest in Landlord, a certificate of Tenant
substantially in the form attached as EXHIBIT "D" and also containing any other
information that may reasonably be required by any of such persons. It is
intended that any such certificate of Tenant delivered pursuant to this
Paragraph 13 may be relied upon by Landlord and any prospective tenant,
purchaser, ground or underlying lessor or Mortgagee, or such other party. If
requested by Tenant, Landlord shall provide Tenant with a similar certificate.
14. HOLDING OVER. If Tenant (directly or through any
successor-in-interest of Tenant) remains in possession of any or all of the
Premises after the expiration or termination of this Lease with the consent
of Landlord, such continued possession shall be construed to be a tenancy
from month to month at one hundred twenty-five percent (125 %) of the Monthly
Base Rent herein specified (and shall be increased in accordance with
Paragraph 4(b) [Adjustments in Base Rent]), together with an amount estimated
by Landlord for the monthly Additional Charges payable under this Lease, and
shall otherwise be on the terms and conditions herein specified so far-as
applicable. If Tenant (directly or through any successor-in-interest of
Tenant) remains in possession of all or any portion of the Premises after the
expiration or termination of this Lease without the consent of Landlord,
Tenant's continued possession shall be on the basis of a tenancy at the
sufferance of Landlord. In such event, Tenant shall continue to comply with
or perform all the terms and obligations of Tenant under this Lease, except
that the Monthly Base Rent during Tenant's holding over shall be the greater
of the then-fair market rent for the Premises (as reasonably determined by
Landlord) or one hundred fifty percent (150%) of the Monthly Base Rent and
Additional Charges payable in the last full month prior to the termination
hereof (and shall be increased in accordance with Paragraph 4(b)
[Adjustments in Base Rent]). In addition to Rent, Tenant shall pay Landlord
for all damages proximately caused by reason of the Tenant's retention of
possession. Landlord's acceptance of Rent after the termination of this Lease
shall not constitute a renewal of this Lease, and nothing contained in this
provision shall be deemed to waive Landlord's right of reentry or any other
right hereunder or at law. Tenant acknowledges that, in Landlord's marketing
and re-leasing efforts for the Premises, Landlord is relying on Tenant's
vacation of the Premises on the Expiration Date. Accordingly, Tenant shall
indemnify, defend and hold Landlord harmless from and against all claims,
liabilities, losses, costs, expenses and damages arising or resulting
directly or indirectly from Tenant's failure to timely surrender the
Premises, including (i) any loss, cost or damages suffered by any prospective
tenant of all or any part of the Premises, and (ii) Landlord's damages as a
result of such prospective tenant rescinding or refusing to enter into the
prospective lease of all or any portion of the Premises by reason of such
failure of Tenant to timely surrender the Premises.
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15. SUBORDINATION.
(a) Without the necessity of any additional document being
executed by Tenant for the purpose of effecting a subordination, this Lease
shall be subject and subordinate at all times to: (i) the Encumbrances and
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; (ii) any CC&R's, currently in effect or that Landlord may
enter into in the future, that affect the Building or the Common Areas; and
(iii) 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 at the option of such successor in interest. Notwithstanding
anything to the contrary contained herein (but subject to subparagraph 15(b)
below), this Lease shall not be subject or subordinate to any ground or
underlying lease or to any lien, mortgage, deed of trust or other security
interest affecting the Premises, unless the ground lessor, lender or other
holder of the interest to which this lease would be subordinated executes a
reasonable recognition and non-disturbance agreement which provides that
Tenant shall be entitled to continue in possession of the Premises on the
terms and conditions of this Lease if and for so long as Tenant fully
performs all of its obligations hereunder. Tenant covenants and agrees to
execute and deliver upon demand by Landlord and in the form requested by
Landlord and reasonably acceptable to Tenant (Tenant has approved the form of
the subordination, non-disturbance and attornment agreement attached as
EXHIBIT F), any customary 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
shall execute, deliver and record any such documents within twenty (20) days
after Landlord's written request.
(b) Notwithstanding the provisions of subparagraph 15(a) above
to the contrary, specifically with regard to the Ground Lease (as defined in
EXHIBIT E), this Lease shall be subject to and subordinate to the terms,
covenants and conditions of the Ground Lease and the rights of the Lessor (as
defined in the Ground Lease), without the requirement that the Lessor enter into
a separate recognition and non-disturbance agreement as contemplated by
subparagraph 15(a), provided that Landlord and Tenant agree to the following
conditions as required by Article 25 of the Ground Lease:
(1) Upon any termination or surrender of the Ground Lease,
this Lease shall continue in full force and effect and the Tenant (defined as
"sublessee" in the Ground Lease) shall attorn to, or, at the option of Lessor
(as defined in the Ground Lease), enter into a direct lease on identical terms
(i.e. the terms of this Lease) with, Lessor;
(2) Lessor shall not be bound by any prepayment of rent
hereunder; and
(3) Tenant and Landlord agree that this Lease is an arm's
length transaction between Landlord (defined as "Lessee" in the Ground Lease)
and Tenant (defined as "the subtenant" in the Ground Lease), and that Tenant is
not an Affiliate (as defined in the Ground Lease) of Landlord.
16. RULES AND REGULATIONS. Tenant shall faithfully observe and comply
with the rules and regulations attached to this Lease as EXHIBIT "C" and all
reasonable modifications thereof and additions thereto from time to time put
into effect by Landlord. Landlord shall not be responsible for the
nonperformance by any other Tenant or occupant of the Building or the Project of
any said rules and regulations. In the event of an express and direct conflict
between the terms, covenants, agreements and conditions of this Lease and those
set forth in the rules and regulations, as modified and amended from time to
time by Landlord, this Lease shall control.
17. RE-ENTRY BY LANDLORD. Landlord reserves and shall at all
reasonable times, upon reasonable prior notice (except in the case of an
emergency), and subject to Tenant's reasonable security precautions and the
right of Tenant to accompany Landlord at all times, have the right to re-enter
the Premises to inspect the same, to supply janitor service and any other
service to be provided by Landlord to Tenant hereunder (unless Tenant is
supplying such service), to show the Premises to prospective purchasers,
Mortgagees or tenants (as to prospective tenants, only during the last twelve
(12) months of the Lease Term), to post notices of nonresponsibility or as
otherwise required or allowed by this Lease or by law, and to alter, improve or
repair the Premises and any portion of the Building and may for that purpose
erect, use, and maintain scaffolding, pipes, conduits, and other necessary
structures in and through the Premises where reasonably required by the
character of the work to be performed. Landlord shall not be liable in any
manner for any inconvenience, disturbance, loss of business, nuisance or other
damage arising from Landlord's entry and acts pursuant to this Paragraph and
Tenant shall not be entitled to an abatement or reduction of Base Rent or
Additional Charges if Landlord exercises any rights reserved in this paragraph.
Tenant hereby waives any claim for damages for any injury or inconvenience to or
interference with Tenant's business, any loss of occupancy or quiet enjoyment of
the Premises, and any other loss occasioned thereby, except for Landlord's
negligence or willful misconduct. For each of the aforesaid purposes, Landlord
shall at all times have and retain a key with which to un-lock all of the doors
in, upon and about the Premises, excluding Tenant's vaults and safes, or special
security areas (designated in advance), and Landlord shall have the right to use
any and all means which Landlord may deem necessary or proper to open said doors
in an emergency, in order to obtain entry to any portion of the Premises, and
any entry to the Premises, or portion thereof obtained by Landlord by any of
said means, or otherwise, shall not under any emergency circumstances be
construed or deemed to be a
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forcible or unlawful entry into, or a detainer of, the Premises, or an eviction,
actual or constructive, of Tenant from the Premises or any portions thereof.
Landlord shall use best efforts during re-entry to not unreasonably interfere
with Tenant's use of the Premises or its business conducted therein.
18. INSOLVENCY OR BANKRUPTCY. The appointment of a receiver to take
possession of all or substantially all of the assets of Tenant, or an assignment
of Tenant for the benefit of creditors, or any action taken or suffered by
Tenant under any insolvency, bankruptcy, reorganization or other debtor relief
proceedings, whether now existing or hereafter amended or enacted, shall at
Landlord's option constitute a breach of this Lease by Tenant unless a petition
in bankruptcy, or receiver attachment, or other remedy pursued by a third party
is discharged within sixty (60) days. Upon the happening of any such event or at
any time thereafter, this Lease shall terminate five (5) days after written
notice of termination from Landlord to Tenant. In no event shall this Lease be
assigned or assignable by operation of law or by voluntary or involuntary
bankruptcy proceedings or otherwise and in no event shall this Lease or any
rights or privileges hereunder be an asset of Tenant under any bankruptcy,
insolvency, reorganization or other debtor relief proceedings.
19. DEFAULT.
(a) The failure to perform or honor any covenant, condition or
representation made under this Lease shall constitute a "default" hereunder by
Tenant upon expiration of the appropriate grace or cure period hereinafter
provided. Tenant shall have a period of three (3) days from the date of written
notice from Landlord (which notice shall be in lieu of and not in addition to
the notice required by Section 1161 of the California Code of Civil Procedure)
within which to cure any failure to pay Base Rent or Additional Charges;
provided, however, that Landlord shall not be required to provide such notice
more than four times during any two (2) year period during the Term with respect
to non-payment of Base Rein or Additional Charges, the third such non-payment
constituting default without requirement of notice. Tenant shall have/a period
of thirty (30) days from the date of written notice from Landlord within which
to cure any other curable failure to perform any obligation under this Lease;
provided, however, that with respect to any curable failure to perform other
than the payment of Base Rent or Additional Charges that cannot reasonably be
cured within thirty (30) days, the cure period shall be extended if Tenant
commences to cure within thirty (30) days from Landlord's notice and continues
to prosecute diligently the curing thereof. Notwithstanding the foregoing, (i)
if a different cure period is specified elsewhere in this Lease or the Work
Letter with respect to any specific obligation of Tenant, such specific cure
period shall apply with respect to a failure of such obligation; and (ii) the
foregoing cure rights shall not extend the specified time for compliance with
any required delivery, approval or performance obligation of Tenant under the
Work Letter. Upon a default of this Lease by Tenant, Landlord shall have the
following rights and remedies in addition to any other rights or remedies
available to Landlord at law or in equity:
(1) The rights and remedies provided by California Civil
Code, Section 1951.2, including but not limited to, recovery of the worth at the
time of award of the amount by which the unpaid Base Rent and Additional Charges
for the balance of the Term after the time of award exceeds the amount of rental
loss for the same period that the Tenant proves could be reasonably avoided, as
computed pursuant to subsection (b) of said Section 1951.2;
(2) The rights and remedies provided by, California Civil
Code, Section 1951.4, that allows Landlord to continue this Lease in effect and
to enforce all of its rights and remedies under this Lease, including the right
to recover Base Rent and Additional Charges as they become due, for so long as
Landlord does not terminate Tenant's right to possession; provided, however, if
Landlord elects to exercise its remedies described in this Paragraph 19(a)(ii)
and Landlord does not terminate this Lease, and if Tenant requests Landlord's
consent to an assignment of this Lease or a sublease of the Premises at such
time as Tenant is in default, Landlord shall not unreasonably withhold its
consent to such assignment or sublease. Acts of maintenance or preservation,
efforts to relet the Premises or the appointment of a receiver upon Landlord's
initiative to protect its interest under this Lease shall not constitute a
termination of Tenant's rights to possession;
(3) The right to terminate this Lease by giving notice to
Tenant in accordance with applicable law;
(4) If Landlord elects to terminate this Lease, the right
and power to enter the Premises and remove therefrom all persons and property
and, to store such property in a public warehouse or elsewhere at the cost of
and for the account of Tenant, and to sell such property and apply such proceeds
therefrom pursuant to applicable California law.
(b) Landlord shall have a period of thirty (30) days from the date
of written notice from Tenant within which to cure any default by Landlord under
this Lease; provided, however, that with respect to any default that cannot
reasonably be cured within thirty (30) days, the default shall not be deemed to
be uncured if Landlord commences to cure within thirty'(30) days from Tenant's
notice and continues to prosecute diligently the curing thereof. Tenant agrees
to give any Mortgagee, by registered or certified mail, a copy of any Notice of
Default served upon the Landlord, provided that prior to such notice Tenant has
been notified in writing, (by way of Notice of Assignment of Rents and Leases,
or otherwise) of the address of such Mortgagee. Tenant further agrees that if
Landlord shall have failed to cure such default within the time provided for in
this Lease, then the Mortgagee shall have an additional thirty (30) days
(provided that Tenant notifies Mortgagee concurrently with Tenant's notice to
Landlord at the beginning of Landlord's thirty (30) day period; otherwise
Mortgagee shall have sixty days from the date on which it is noticed) within
which to cure such default or if such default cannot be cured within that time,
then the cure period shall be extended for such additional time as
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may be necessary to cure such default shall be granted if within such applicable
period Mortgagee has commenced and continues to prosecute diligently the cure of
such default (including, but not limited to, commencement of foreclosure
proceedings, if necessary to effect such cure).
20. DAMAGE BY FIRE, ETC. If the Premises or the Building are damaged
by fire or other casualty, Landlord shall forthwith repair the same, provided
that such repairs can be made within one hundred eighty (180) days after the
date of such damage under the laws and regulations of the federal, state and
local governmental authorities having jurisdiction thereof. In such event, this
Lease shall remain in full force and effect except that Tenant shall be entitled
to a proportionate reduction of Base Rent and Additional Charges while such
repairs to be made hereunder by Landlord are being made. Such reduction of rent,
if any, shall be based upon the greater of (i) the proportion that the area of
the Premises rendered untenantable by such damage bears to the total area of the
Premises; or (ii) the extent to which such damage and the making of such repairs
by Landlord shall interfere with the business carried on by Tenant in the
Premises, where clause (ii) is limited to the extent of rental abatement
insurance allowed by Landlord's casualty insurance policy. Within twenty (20)
days after the date of such damage, Landlord shall notify Tenant whether or not
in Landlord's reasonable opinion such repairs can be made within one hundred
eighty (180) days after the date of such damage and Landlord's determination
thereof shall be binding on Tenant. If such repairs cannot be made within one
hundred eighty (180) days from the date of such damage, Landlord shall have the
option within thirty (30) days after the date of such damage either to: (i)
notify Tenant of Landlord's intention to repair such damage and diligently
prosecute such repairs, in which event this Lease shall continue in full force
and effect and the Base Rent and Additional Charges shall be reduced as provided
herein; or (ii) notify Tenant of Landlord's election to terminate this Lease as
of a date specified in such notice, which date shall not be less than thirty
(30) days nor more than sixty (60) days after notice is given. In the event that
such notice to terminate is given by Landlord,this Lease shall terminate on the
date specified in such notice. In the event that Landlord notifies Tenant that
restoration or repair of the Premises will take more than one hundred and eighty
days (180) days, Tenant shall have a right to terminate the Lease within fifteen
(15) days following receipt of Landlord's notice, by providing Landlord with
written notice of its election to do so in such event (and also in the event
Landlord terminates the lease pursuant to the immediately preceding sentence),
Tenant shall have no liability for payment of the deductible under Landlord's
insurance relating to such damage. In case of termination by either event, the
Base Rent and Additional Charges shall be reduced by a proportionate amount
based upon the extent to which such damage interfered with the business carried
on by Tenant in the Premises, and Tenant shall pay such reduced Base Rent and
Additional Charges up to the date of termination. Landlord agrees to refund to
Tenant any Base Rent and Additional Charges previously paid for any period of
time subsequent to such date of termination. The repairs to be made hereunder by
Landlord shall not include, and Landlord shall not be required to repair, any
damage by fire or other cause to the property of Tenant or any repairs or
replacements of any paneling, decorations, railings, floor coverings or any
alterations, additions, fixtures or improvements installed on the Premises by or
at the expense of Tenant (excluding the initial Tenant Improvements constructed
by Landlord). Tenant hereby waives the provisions of Section 1932.2, and Section
1933.4, of the Civil Code of California. Notwithstanding anything contained
herein to the contrary, if a Major Casualty occurs with respect to any portion
of the Building, and the net insurance proceeds obtained as a result of such
casualty are ninety percent (90%) or a lesser percentage of the cost of
restoration, rebuilding or replacement, then Landlord shall not be obligated to
undertake such restoration, rebuilding or replacement unlss Landlord elects to
do so in writing. For the purpose of this Lease, a "Major Casualty" shall mean a
casualty that renders unusable twenty percent (20%) or more of the Net Rentable
Area of the Building or which materially adversely affects the use of such
Building.
21. EMINENT DOMAIN. If any part over 15 % of the Premises shall be
taken or appropriated under the power of eminent domain or conveyed in lieu
thereof, Tenant shall have the right to terminate this Lease at its option. If
any part of the Building shall be taken or appropriated under power of eminent
domain or conveyed in lieu thereof and such taking is so extensive that it
renders the remaining portion of the Building unsuitable for the use being made
of the Building on the date immediately preceding such taking, Landlord may
terminate this Lease at its option. In either of such events, Landlord shall
receive (and Tenant shall assign to Landlord upon demand from Landlord) any
income, rent, award or any interest therein which may be paid in connection with
the exercise of such power of eminent domain, and Tenant shall have no claim
against Landlord for any part of sum paid by virtue of such proceedings, whether
or not attributable to the value of the unexpired term of this Lease except that
Tenant shall be entitled to petition the condemning authority for the following
- (i) the then unamortized cost of any Alterations or tenant improvements paid
for by Tenant from its own funds (as opposed to any allowance provided by
Landlord); (ii) the value of Tenant's trade fixtures; (iii) Tenant's relocation
costs; (iv) Tenant's goodwill, loss of business and business interruption; and
(v) one-half of the amount which is the lesser of (a) the bonus value of this
lease, or (b) the amount of the award in excess of the sum of amounts payable to
Landlord's ground lessor (if any) and any holder of a mortgage or other third
party lien encumbering Landlord's ground lease estate or fee simple ownership in
the Property. If a part of the Premises shall be so taken or appropriated or
conveyed and neither party hereto shall elect to terminate this Lease and the
Premises have been damaged as a consequence of such partial taking or
appropriation or conveyance, Landlord shall restore the Premises continuing
under this Lease at Landlord's cost and expense; provided, however, that
Landlord shall not be required to repair or restore any injury or damage to the
property of Tenant or to make any repairs or restoration of any Alterations
installed on the Premises by or at the expense of Tenant. Thereafter, the Base
Rent and Additional Charges to be paid under this Lease for the remainder of the
Term shall be proportionately reduced, such that thereafter the amounts to be
paid by Tenant shall be in the ratio that they are of the portion of the
Premises not so taken bears to the total area of the Premises prior to such
taking. Notwithstanding anything to the contrary contained in this Paragraph 21,
if the temporary use or occupancy of any part of the Premises shall be taken or
appropriated under power of eminent domain during the Term, this Lease shall be
and remain unaffected by such taking or appropriation and Tenant shall continue
to pay in full all Base Rent and Additional Charges payable hereunder by Tenant
during the Term; in the event of
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any such temporary appropriation or taking, Tenant shall be entitled to receive
that portion of any award which represents compensation for the use of or
occupancy of the Premises during the Term, and Landlord shall be entitled to
receive that portion of any award which represents the cost of restoration of
the Premises and the use and occupancy of the Premises after the end of the
Tenn. If such temporary taking is for a period longer than two hundred and
seventy (270) days and unreasonably interferes with Tenant's use of the Premises
or the Project Common Areas, then, Tenant shall have the right to terminate the
Lease. Landlord and Tenant understand and agree that the provisions of this
Paragraph 21 are intended to govern fully the rights and obligations of the
parties in the event of a Taking of all or any portion of the Premises.
Accordingly, the parties each hereby waives any right to terminate this Lease in
whole or in part under Sections 1265.120 and 1265.130 of the California Code of
Civil Procedure or under any similar Law now or hereafter in effect.
22. SALE BY LANDLORD. If Landlord sells or otherwise conveys its
interest in the Premises, Landlord shall be relieved of its obligations under
the Lease from and after the date of sale or conveyance (including the
obligations of Landlord under Section 39), only when Landlord transfers any
security deposit of Tenant to its successor and the successor assumes in writing
the obligations to be performed by Landlord on and after the effective date of
the transfer (including the obligations of Landlord under Section 39), whereupon
Tenant shall attorn to such successor.
23. RIGHT OF LANDLORD TO PERFORM. All covenants and agreements to be
performed by Tenant under any of the terms of this Lease shall be performed by
Tenant at Tenant's sole cost and expense and without any abatement of Base Rent
or Additional Charges. If Tenant shall default in the payment of any sum of
money, other than Base Rent or Additional Charges, required to be paid by it
hereunder or shall fail to perform any other act on its part to be performed
hereunder, and such failure shall continue for the applicable cure period
provided in Paragraph 19 (except in the event of emergency, when no cure period
shall be required), Landlord may, but shall not be obligated so to do, and
without waiving or releasing Tenant from any obligations of Tenant, make any
such payment or perform any such act on Tenant's part to be made or performed as
provided in this Lease. All sums so paid by Landlord and all necessary
incidental costs together with interest thereon at the Default Rate, from the
date of such payment by Landlord shall be payable as Additional Charges to
Landlord on demand.
24. SURRENDER OF PREMISES.
(a) At the end of the Term or any renewal thereof or other sooner
termination of this Lease, Tenant will peaceably deliver to Landlord possession
of the Premises, together with all improvements or additions upon or belonging
to Landlord, by whomsoever made, in the same condition as received, or first
installed, subject to the terms of Paragraphs 39 & 21 and the rights and
obligation of Tenant concerning casualty damage pursuant to Paragraph 20, damage
by fire, earthquake, Act of God, ordinary wear and tear, Hazardous Substances
(other than those for which Tenant is indemnifying Landlord pursuant to
Paragraph 39) or the elements alone excepted. Tenant may, upon the termination
of this Lease, remove all movable furniture and equipment belonging to Tenant,
at Tenant's sole cost, provided that Tenant repairs any damage caused by such
removal. Property not so removed shall be deemed abandoned by Tenant, and title
to the same shall thereupon pass to Landlord. Upon request by Landlord, and
unless otherwise agreed to in writing by Landlord, Tenant shall remove, at
Tenant's sole cost, any or all Alterations to the Premises installed by or at
the expense of Tenant and all movable furniture and equipment belonging to
Tenant which may be left by Tenant and repair any damage resulting from such
removal.
(b) The voluntary or other surrender of this Lease by Tenant, or a
mutual cancellation thereof, shall not work a merger, and shall, at the option
of Landlord, terminate all or any existing subleases or subtenancies, or may, at
the option of Landlord, operate as an assignment to it of any or all such
subleases or subtenancies.
25. WAIVER. If either Landlord or Tenant waives the performance of any
term, covenant or condition contained in this Lease, such waiver shall not be
deemed to be a waiver of any subsequent breach of the same or any other term,
covenant or condition contained herein. Furthermore, the acceptance of Base Rent
or Additional Charges by Landlord shall not constitute a waiver of any preceding
breach by Tenant of any term, covenant or condition of this Lease, regardless of
Landlord's knowledge of such preceding breach at the time Landlord accepted such
Base Rent or Additional Charges. Failure by Landlord to enforce any of the
terms, covenants or conditions of this Lease for any length of time shall not be
deemed to waive or to decrease the right of Landlord to insist thereafter upon
strict performance by Tenant. Waiver by Landlord of any term, covenant or
condition contained in this Lease may only be made by a written document signed
by Landlord.
26. NOTICES. Except as otherwise expressly provided in this Lease, any
bills, statements, notices, demands, requests or other communications given or
required to be given under this Lease shall be effective only if rendered or
given in writing, sent by certified mail, return receipt requested, reputable
overnight carrier, or delivered personally, (i) to Tenant (A) at Tenant's
address set forth in the Basic Lease Information, if sent prior to Tenant's
taking possession of the Premises, or (B) at the Premises if sent subsequent to
Tenant's taking possession of the Premises, or (C) at any place where Tenant may
be found if sent subsequent to Tenant's vacating, deserting, abandoning or
surrendering the Premises; or (ii) to Landlord at Landlord's address set forth
in the Basic Lease Information; or (iii) to such other address as either
Landlord or Tenant may designate as its new address for such purpose by notice
given to the other in accordance with the provisions of this Paragraph 26. Any
such bill, statement, notice, demand, request or other communication shall be
deemed to have been rendered or given on the date the return receipt indicates
delivery of or refusal of delivery if sent by certified mail, the day upon which
recipient accepts and signs for delivery from a reputable overnight carrier, or
on the date a reputable overnight carrier indicates refusal of delivery, or upon
the date
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personal delivery is made. If Tenant is notified in writing of the identity and
address of any Mortgagee or ground or underlying lessor, Tenant shall give to
such Mortgagee or ground or underlying lessor notice of any default by Landlord
under the terms of this Lease in writing sent by registered or certified mail,
and such Mortgagee or ground or underlying lessor shall be given the opportunity
to cure such default (as defined in Paragraph 19(b)) prior to Tenant exercising
any remedy available to it.
27. TAXES PAYABLE BY TENANT. At least ten (10) days prior to
delinquency Tenant shall pay all taxes levied or assessed upon Tenant's
equipment, furniture, fixtures and other personal property located in or about
the Premises. If the assessed value of Landlord's property is increased by the
inclusion therein of a value placed upon Tenant's equipment, furniture, fixtures
or other personal property, Tenant shall pay to Landlord, upon written demand,
the taxes so levied against Landlord, or the proportion thereof resulting from
said increase in assessment.
28. ABANDONMENT. Tenant shall not abandon the Premises and cease
performing its financial and maintenance obligations under this Lease at any
time during the Term, and if Tenant shall abandon and cease performing its
financial and maintenance obligations under this Lease, or surrender the
Premises or be dispossessed by process of law, or otherwise, any personal
property belonging to Tenant and left on the Premises shall, at the option of
Landlord, be deemed to be abandoned and title thereto shall thereupon pass to
Landlord. Notwithstanding anything to contrary contained herein, Tenant shall
not be allowed to vacate the Premises if such would result in a termination of
Landlord's insurance. Upon Tenant's request, Landlord will ask its insurer if
such vacation of the Premises would result in termination of its current
insurance policy. For purposes of this Paragraph 28, the Tenant shall not be
deemed to have abandoned the Premises solely because the Tenant is not occupying
the Premises.
29. SUCCESSORS AND ASSIGNS. Subject to the provisions of Paragraph 9,
the terms, covenants and conditions contained herein shall be binding upon and
inure to the benefit of the parties hereto and their respective legal and
personal representatives, successors and assigns.
30. ATTORNEY'S FEES. If Tenant or Landlord brings any action for any
relief against the other, declaratory or otherwise, arising out of this Lease,
including any suit by Landlord for the recovery of Base Rent or Additional
Charges or possession of the Premises, the losing party shall pay to the
prevailing party a reasonable sum for attorney's fees, which shall be deemed to
have accrued on the commencement of such action and shall be paid whether or not
the action is prosecuted to judgment.
31. LIGHT AND AIR. Tenant covenants and agrees that no diminution of
light, air or view by any structure which may hereafter be erected (whether or
not by Landlord) shall entitle Tenant to any reduction of rent under this Lease,
result in any liability of Landlord to Tenant, or in any other way affect this
Lease or Tenant's obligations hereunder.
32. SECURITY DEPOSIT.
(a) LETTER OF CREDIT. Concurrently with Tenant's execution of
this Lease, Tenant shall deliver to Landlord an unconditional, irrevocable,
transferable letter of credit, in an amount equal to Six Hundred and Fifty
Thousand Dollars ($650,000) issued by a financial institution acceptable to
Landlord in the form attached hereto as Exhibit G", with an original term of no
less than one year and automatic extensions through the end of the Term of this
Lease and sixty (60) days thereafter (the "Letter of Credit"). The Letter of
Credit shall be increased in an amount equal to fifty percent (50%) of any
Additional Allowance utilized by Tenant within three (3) business days after
[approval of the cost estimate for the Tenant Improvements pursuant to Paragraph
5 of the Work Letter]. Tenant shall keep the Letter of Credit, at its expense,
in full force and effect until the sixtieth (60th) day after the Expiration Date
or other termination of this Lease, to insure the faithful performance by Tenant
of all of the covenants, terms and conditions of this Lease, including, without
limitation, Tenant's obligations to repair, replace or maintain the Premises and
Tenant's obligations under the Work Letter; provided, however, at any time
during the term that Landlord holds cash as a security deposit hereunder in the
amount of the Letter of Credit, Tenant shall not be in default hereunder for
failing to maintain the Letter of Credit. The Letter of Credit shall provide
sixty (60) days' prior written notice to Landlord of cancellation or material
change thereof, and shall further provide that, in the event of any nonextension
of the Letter of Credit at least thirty (30) days prior to its expiration, the
entire face amount shall automatically be paid to Landlord, and Landlord shall
hold the funds so obtained as the security deposit required under this Lease. If
for any reason such automatic payment does not occur in the event of a
nonextension at least thirty (30) days prior to expiration, Landlord shall be
entitled to present its written demand for payment o the entire face amount of
the Letter of Credit, and the funds paid to Landlord in respect of such demand
shall be held as provided above. Any unused portion of the funds so obtained by
Landlord shall be returned to Tenant upon replacement of the Letter of Credit or
deposit of cash security in the full amount required as the face amount of the
Letter of Credit hereunder. If Landlord uses any portion of the Letter of
Credit, or the cash security deposit resulting from a draw on the Letter of
Credit, to cure any default by Tenant hereunder, Tenant shall replenish the
security deposit to the original amount within ten (10) days of notice from
Landlord. Tenant's failure to do so shall become be a material breach of this
Lease. Landlord shall keep any cash security funds separate from its general
funds, and shall invest such cash security at Tenant's reasonable direction, and
any interest actually earned by Landlord on such cash security shall be paid to
Tenant quarterly. If an event of default occurs under this Lease or the Work
Letter (including, without limitation, any default by Tenant with respect to its
payment and performance obligations under the Work Letter), or if Tenant is the
subject of an Insolvency Proceeding, Landlord may present its written demand for
payment of the entire face amount of the Letter of Credit and the funds so
obtained shall become due and payable to Landlord. Landlord may retain such
funds to the extent required to compensate Landlord for damages incurred, or to
reimburse Landlord as provided herein, in
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connection with any such default, and any remaining funds shall be held as a
cash security deposit. Without limiting the foregoing, in the event of a default
in Tenant's obligations to complete or pay for the Tenant Improvements in
accordance with the Work Letter, Landlord may use the security deposit to
complete and/or pay for the Tenant Improvements to the extent of Tenant's
obligations as contemplated by the Work Letter. Landlord shall pay the costs of
such Letter of Credit to the extent that they do not exceed one percent (1%) of
the face value of the Letter of Credit.
(b) ANNUAL REDUCTION OF LETTER OF CREDIT. The face amount of
the Letter of Credit may be reduced on the third through seventh
anniversaries of the Rent Commencement Date in the amount of one-fourth
(1/4th) of the initial balance, so long as (i) Tenant is not in default (and
no event has occurred which, with the passage of time or giving of notice or
both, would constitute a default under the Lease on such anniversary date,
and (ii) Landlord has not delivered a notice of Tenant's failure to perform
any of its monetary obligations hereunder during the previous six months,
regardless of whether such failure was cured by Tenant within any applicable
grace or cure period; provided, however, that any such notice of failure to
perform relating to a non-monetary failure to perform which was disputed, in
good faith, by Tenant and ultimately determined (by agreement of the parties,
arbitration or judicial action) not to be a violation of this Lease shall not
be considered for purposes of determining whether such condition has been met.
(c) RETURN OF LETTER OF CREDIT. The Letter of Credit shall be
returned to, at any time after the third anniversary of the Rent Commencement
Date when Tenant can establish to Landlord's reasonable satisfaction that as of
the end of any fiscal year of Tenant following the third anniversary of the Rent
Commencement Date, Tenant has (i) annual net income in excess of Twenty Million
Dollars ($20,000,000) for the previous two consecutive years, (ii) shareholder
equity in excess of One Hundred Million Dollars ($100,000,000), and (iii) cash
and cash equivalents in excess of Twenty-five Million Dollars ($25,000,000), all
as determined in accordance with GAAP and as reflected on certified, audited
financial statements.
(d) CONVERSION OF DEPOSIT TO LOAN. Landlord and Tenant
acknowledge and agree that, if Tenant defaults under this Lease and Landlord
elects to pursue its remedies under California Civil Code Section 1951.2 or
under this Lease to terminate this Lease (any such event, a "Landlord Action"),
(i) Landlord will incur certain damages, costs and expenses, including, without
limitation, marketing costs, commissions, relocation costs, tenant improvement
costs, and carrying costs in connection with releasing the Premises, in addition
to the other damages, costs and expenses Landlord may incur as a result of such
default and/or other defaults under this Lease (all of the foregoing
collectively, "Default Damages"); (ii) Landlord has no assurance of a source of
funds to cover such Default Damages other than the proceeds of the Letter of
Credit (or cash collateral); and (iii) the proceeds of the Letter of Credit (or
cash collateral) should be available to Landlord to apply to Default Damages,
even if the amount thereof exceeds that amount to which Landlord is ultimately
determined to be entitled under this Lease and pursuant to applicable law.
Accordingly, at Landlord's sole election, Landlord shall be entitled to draw the
full amount of the Letter of Credit (or the full amount of cash collateral shall
be released to Landlord) which is then existing (after any previous application
of funds by Landlord and/or replenishment by Tenant pursuant to Paragraph 32(a)
above), simultaneously with commencement of a Landlord Action or at any time
thereafter. All proceeds thereof in excess of amounts applied (pursuant to
Paragraph 32(a)) to Default Damages incurred by Landlord prior to commencement
of the Landlord Action shall be deemed a loan from Tenant to Landlord (the
*Default Loan"). The Default Loan shall be unsecured and shall not bear
interest, and repayment thereof shall be limited to the terms and conditions set
forth in this paragraph. Any sums to which Landlord from time to time becomes
entitled hereunder and pursuant to law as a result of Tenant's default and
any previous defaults of the Lease, to which the Letter of Credit (or cash
collateral) has not previously been applied pursuant to Paragraph 32(a), shall
be offset against the principal balance of the Loan. The amount of the Default
Loan remaining, if any, after such offset shall be referred to herein as the
"Excess Amount" The Excess Amount shall be payable by Landlord to Tenant from,
and only from, first any proceeds from the Letter of Credit (or cash collateral)
which have not been applied to Default Damages incurred by Landlord after the
same are finally determined (the "Remaining Proceeds"), and then Excess Rent.
The Remaining Proceeds shall be paid by Landlord to Tenant promptly upon final
determination after the entire Premises are leased to a third party or parties.
If Tenant disputes the amount of Remaining Proceeds paid by Landlord, Tenant may
submit such dispute to arbitration in accordance with Paragraph 40 [Arbitration
of Disputes] of this Lease. "Excess Rent" shall mean the amount by which (x)
rent received by Landlord (from the tenant or tenants leasing all or any portion
of the Premises after Tenant's default) in any month exceeds (y) the amount of
rent that would have been payable under this Lease for such month if this Lease
had not been terminated. Landlord shall pay Tenant one-half of the Excess Rent
until the earlier of (A) the date the Excess Amount is fully repaid or (B) the
date that would have been the Expiration Date (excluding any Renewal Term) of
this Lease. Any remaining balance of the Default Loan on such date shall be
deemed forgiven. If the Default Loan is insufficient to cover all Default
Damages, Tenant shall pay Landlord any SUCH shortfall immediately upon demand by
Landlord, and Landlord shall have all rights and remedies available at law or
elsewhere in the Lease with respect to such shortfall.
33. CORPORATE AUTHORITY; FINANCIAL INFORMATION. If Tenant signs as a
corporation each of the persons executing this Lease on behalf of Tenant does
hereby covenant and warrant that Tenant is a duly authorized and existing
corporation, that Tenant has and is qualified to do business in California, that
the corporation has full right and authority to enter into this Lease, and that
each and both of the persons signing on behalf of the corporation were
authorized to do so. Upon Landlord's request, Tenant shall provide Landlord with
evidence reasonably satisfactory to Landlord confirming the foregoing covenants
and warranties. Tenant hereby further covenants and warrants to Landlord that
all financial information and other descriptive information regarding Tenant's
business, which has been or shall be furnished to Landlord, is to Tenant's best
knowledge accurate and complete at the time of delivery to Landlord.
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34. PARKING. Tenant shall have the right to use the Building's parking
spaces in common with other tenants or occupants of the Building, if any,
subject to the Encumbrances and the rules and regulations of Landlord for such
parking facilities which may be established or altered by Landlord at any time
or from time to time during the term.
35. MISCELLANEOUS.
(a) The term "Premises" wherever it appears herein includes and
shall be deemed or taken to include (except where such meaning would be clearly
repugnant to the context) the office space demised and improvements now or at
any time hereafter comprising or built in the space hereby demised. The
paragraph headings herein are for convenience of reference and shall in no way
define, increase, limit or describe the scope or intent of any provision of this
Lease. The term "Landlord" shall include Landlord and its successors and
assigns. In any case where this Lease is signed by more than one person, the
obligations hereunder shall be joint and several. The term "Tenant" or any
pronoun used in place thereof shall indicate and include the masculine or
feminine, the singular or plural number, individuals, firms or corporations, and
their and each of their respective successors, executors, administrators, and
permitted assigns, according to the context hereof.
(b) Time is of the essence of this Lease and all of its
provisions. This Lease shall in all respects be governed by the laws of the
State of California. This Lease, together with its exhibits, contains all the
agreements of the parties hereto and supersedes any previous negotiations. There
have been no representations made by the Landlord or understandings made between
the parties other than those set forth in this Lease and its exhibits. This
Lease may not be modified except by a written instrument by the parties hereto.
(c) If for any reason whatsoever any of the provisions hereof
shall be unenforceable or ineffective, all of the other provisions shall be and
remain in full force and effect.
(d) Upon Tenant paying the Base Rent and Additional Charges and
performing all of Tenant's obligations under this Lease, Tenant may peacefully
and quietly enjoy the Premises during the Term as against all persons or
entities lawfully claiming by or through Landlord; subject, however, to the
provisions of this Lease.
36. TENANT'S REMEDIES. If any default hereunder by Landlord is not
cured within the applicable cure period provided in Subparagraph 19(b), Tenant's
exclusive remedies shall be an action for specific performance or action for
actual damages. Tenant hereby waives the benefit of any laws granting it (A) the
right to perform Landlord's obligation, or (B) the right to terminate this Lease
or withhold Rent on account of any Landlord default. Tenant shall look solely to
Landlord's interest in the Project for the recovery of any judgment from
Landlord. Landlord, or if Landlord is a partnership, its partners whether
general or limited, or if Landlord is a corporation, its directors, officers or
shareholders, shall never be personally liable for any such judgment. Any lien
obtained to enforce such judgment and any levy of execution thereon shall be
subject and subordinate to any mortgage or deed of trust (excluding any mortgage
or deed of trust which was created as part of an effort to defraud creditors,
i.e., a fraudulent conveyance); provided, however that any such judgement and
any such levy of execution thereon shall not be subject or subordinated to any
mortgage or deed of trust that shall have been created or recorded in the
official records of Santa Clara County after the date of the judgement giving
rise to such lien. Landlord's interest in the Project shall include any
insurance proceeds received by Landlord which are not controlled by Landlord's
lender and any proceeds of the Security Deposit under this Lease that are then
held by Landlord.
37. REAL ESTATE BROKERS. Each party represents that it has not had
dealings with any real estate broker, finder or other person with respect to
this Lease in any manner, except for any broker named in the Basic Lease
Information, whose fees or commission, if earned, shall be paid as provided in
the Basic Lease Information. Each party shall hold harmless the other party from
all damages resulting from any claims that may be asserted against the other
party by any other broker, finder or other person with whom the other party has
or purportedly has dealt.
38. LEASE EFFECTIVE DATE. Submission of this instrument for
examination or signature by Tenant does not constitute a reservation of or
option for lease, and it is not effective as a lease or otherwise until
execution and delivery by both Landlord and Tenant.
39. HAZARDOUS SUBSTANCE LIABILITY. Tenant has received from Landlord a
copy of the following reports (the "Environmental Reports"):" Phase I and II
Environmental Assessment Report, Circle Star Theater Property, 1717 Industrial
Way, San Carlos, California, January 31, 1997 prepared by McLaren/Hart
Environmental Engineering Corporation. Except as noted in the Environmental
Reports, Landlord represents and warrants that to the best of its knowledge, the
Premises and Project are presently free of asbestos, toxic waste, underground
storage tanks and other Hazardous Substances in amounts exceeding legally
established maximum thresholds. Additionally, except as noted in the
Environmental Reports, Landlord represents that it has received no written
notice of any violation or claimed violation with respect to the presence of
toxic or Hazardous Substances on, in or under the Project or of any pending or
contemplated investigation or other action relating thereto.
(a) Definition of Hazardous Substances. For the purpose of this
Lease, "Hazardous Substances" shall be defined, collectively, as oil, flammable
explosives, asbestos, radioactive materials, hazardous wastes, toxic or
contaminated substances or similar materials, including, without limitation, any
substances which are "hazardous substances," "hazardous wastes," "hazardous
materials" or "toxic substances"
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under applicable environmental laws, ordinance or regulation.
(b) TENANT INDEMNITY. Tenant releases Landlord from any
liability for, waives all claims against Landlord and shall indemnify, defend
and hold harmless Landlord, its employees, partners,, agents,, subsidiaries and
affiliate organizations against any and all claims, suits, loss, costs
(including costs of investigation, clean up, monitoring, restoration and
reasonably attorney fees), damage or liability, whether foreseeable or
unforeseeable, by reason of property damage (including diminution in the value
of the property of Landlord), personal injury or death directly arising from or
related to Hazardous Substances released, manufactured, discharged, disposed,
used or stored on, in, or under the Property or Premises during the initial Term
and any extensions of this Lease by Tenant or its employees, agents, sublessees,
assignees or contractors. The provisions of this Tenant Indemnity regarding
Hazardous Substances shall survive the termination of the Lease.
(c) LANDLORD INDEMNITY. Landlord releases Tenant from any
liability for, waives all claims against Tenant and shall indemnify, defend and
hold harmless Tenant, its officers, employees, and agents to the extent of
Landlord's interest in the Project, against any and all actions by any
governmental agency for clean up of Hazardous Substances on or under the
Property, including costs of legal proceedings, investigation, clean up,
monitoring, and restoration, including reasonable attorney fees, if, and to the
extent, arising from the presence of Hazardous Substances on, in or under the
Property or Premises, except to the extent caused by the release, disposal, use
or storage of Hazardous Substances in, on or about the Premises by Tenant, its
employees, agents, sublessees, assignees, or contractors. The provisions of this
Landlord Indemnity regarding Hazardous Substances shall survive the termination
of the Lease.
Tenant has informed Landlord, that except for very immaterial amounts of toxic
materials incidental to its office. use (e.g. copier toner), Tenant will not use
and Hazardous Substances in material amounts within the Building and shall
comply with any applicable laws to the extent that it does.
40. ARBITRATION OF DISPUTES.
ANY CONTROVERSY OR CLAIM ARISING OUT OF THIS LEASE OR A BREACH OF
THIS LEASE SOLELY BETWEEN LANDLORD AND TENANT RELATING TO A MONETARY DEFAULT IN
AN AMOUNT OF LESS THAN TWENTY-FIVE THOUSAND DOLLARS ($25,000), BUT NOT INCLUDING
A DEFAULT WITH RESPECT TO THE TIMELY PAYMENT OF BASE RENT AND ADDITIONAL
CHARGES, SHALL BE SETTLED BY ARBITRATION BEFORE THE JUDICIAL ARBITRATION
MEDIATION SERVICE (JAMS) IN ACCORDANCE WITH THE RULES OF THE AMERICAN
ARBITRATION ASSOCIATION, AND JUDGMENT ON THE AWARD RENDERED BY THE ARBITRATOR(S)
MAY BE ENTERED IN ANY COURT HAVING JURISDICTION.
NOTICE: BY INITIALLY IN THE SPACE BELOW YOU ARE AGREEING TO HAVE
ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES"
PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU
ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A
COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR
JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY
INCLUDED IN THE ARBITRATION OF DISPUTES" PROVISION. IF YOU REFUSE TO SUBMIT TO
ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE
UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO
THIS ARBITRATION PROVISION IS VOLUNTARY.
WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT
DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES"
PROVISION TO NEUTRAL ARBITRATION.
Consent to neutral arbitration by: /s/ XXX (Landlord): /s/ Keith Teare
(Tenant).
41. SIGNAGE. Tenant shall b lowed to use a proportional share (based
on square footage) of the main lobby directory and the monument sign located at
the Project's entry off of Industrial Road, as well as building standard signage
at the lobby on Tenant's floor as well as Tenant's main entry door. Such signage
shall be in conformity with standards provided by Landlord, and subject to
approval by Landlord. All signage shall be at Tenant's expense.
42. OPTION TO RENEW. Upon condition that (i) no event of default is
continuing under this Lease at the time of exercise or at the commencement of
the option term, and (ii) Tenant or its affiliate continues to physically occupy
at least fifty percent (50%) of the Premises, then Tenant shall have the right
to extend the Term for one (1) period of five (5) years ("Extension Term(s)")
following the initial Expiration Date, by giving written notice ("Exercise
Notice") to Landlord at least eighteen (18) months prior to the Expiration of
the Term.
43. RENT DURING EXTENSION TERM. The Monthly Base Rent during the five
(5) year Extension Term shall be the greater of the Base Rent paid during the
last month of the immediately preceding Term or the Fair Market Rental Value for
the Premises as of the commencement of the option term, as determined below:
(a) Within thirty (30) days after receipt of Tenant's Exercise
Notice, Landlord shall notify Tenant of Landlord's estimate of the Fair Market
Rental Value for the Premises, as determined below, for
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determining Monthly Base Rent during the ensuing Extension Term; provided,
however, if Tenant's Exercise Notice is given more than eighteen (I 8) months
before the Expiration Date, Landlord's estimate of Fair Market Rental Value may,
but need not be given more than eighteen (18) months before the Expiration Date.
Within fifteen (15) days after receipt of such notice from Landlord, Tenant
shall notify Landlord in writing that it (i) agrees with such rental rate or
(ii) disagrees with such rental rate. No response shall constitute agreement. In
the event that Tenant disagrees with Landlord's estimate of Fair Market Rental
Value for the Premises, then the parties shall meet and endeavor to agree within
fifteen (15) days after Landlord receives Tenant's notice described in the
immediately preceding sentence. If the parties cannot agree upon the Fair Market
Rental Value within said fifteen (15) day period, then the parties shall submit
the matter to binding appraisal in accordance with the following procedure
except that in any event neither party shall be obligated to start such
procedure sooner than eighteen (18) months before the expiration of the Lease
Term. Within fifteen (15) days of the conclusion of the period during which the
two parties fail to agree (but not sooner than eighteen (18) months before the
expiration of the Lease Term), the parties shall either (i) jointly appoint an
appraiser for this purpose or (ii) failing this joint action, each separately
designate a disinterested appraiser. No person shall be appointed or designated
an appraiser unless such person has at least five (5) years experience in
appraising major commercial property in San Marco County and is a member of a
recognized society of real estate appraisers. If within thirty (30) days after
the appointment, the two appraisers reach agreement on the Fair Market Rental
Value for the Premises, that value shall be binding and conclusive upon the
parties. If the two appraisers thus appointed cannot reach agreement on the Fair
Market Rental Vaue for the Premises within thirty (30) days after their
appointment, then the appraisers thus appointed shall appoint a third
disinterested appraiser having like qualifications within five (5) days. If
within thirty (30) days after the appointment of the third appraiser a majority
of the appraisers agree on the Fair Market Rental Value of the Premises, that
value shall be binding and conclusive upon the parties. If within thirty (30)
days after the appointment of the third appraiser a majority of the appraisers
cannot reach agreement on the Fair Market Rental Value for the Premises, then
the three appraisers shall each simultaneously submit their independent
appraisal to the parties, the appraisal farthest from the median of the three
appraisals shall be disregarded, and the mean average of the remaining two
appraisals shall be deemed to be the Fair Market Rental Value for the Premises
and shall be binding and conclusive upon the parties. Each party shall pay the
fees and expenses of the appraiser appointed by it and shall share equally the
fees and expenses of the third appraiser. If the two appraisers appointed by the
parties cannot agree on the appointment of the third appraiser, they or either
of them shall give notice of such failure to agree to the parties and if the
parties fail to agree upon the selection of such third appraiser within ten (10)
clays after the appraisers appointed by the parties give such notice, then
either of the parties, upon notice to the other party, may request such
appointment by the American Arbitration Association or, on it failure, refusal
or inability to act, may apply for such appointment to the presiding judge of
the Superior Court of San Mateo County, California.
(b) Wherever used throughout this Paragraph (Rent during
Extension Term) the term "Fair Market Rental Value" shall mean the fair market
rental value of the Premises, using as a guide the rate of monthly base rent
which would be charged during the Extension Term (including periodic increases
during the Extension Term, if any) in the Mid-Peninsula area for comparable high
image, Class A office space in comparable condition, of comparable quality, as
of the time that the Extension Term commences, with appropriate adjustments
regarding taxes, insurance and operating expenses as necessary to insure
comparability to this Lease, as the case may be, and also taking into
consideration amount and type of parking, location, leasehold improvements,
proposed term of lease, amount of space leased, extent of service provided or to
be provided, and any other relevant terms or conditions (including consideration
of whether or not the monthly base rent is fixed).
(c) In the event of a failure, refusal or inability of any
appraiser to act, his successor shall be appointed by the party who originally
appointed him, but in the case of the third appraiser, his successor shall be
appointed in the same manner as provided for appointment of the third appraiser.
(d) The appraisers shall render their appraisals in writing
with counterpart copies to Landlord and Tenant. The appraisers shall have no
power to modify the provisions of this Lease.
(e) To the extent that binding appraisal has not been completed
prior to the expiration of any preceding period for which Monthly Base Rent has
been determined, Tenant shall pay Monthly Base Rent at the rate estimated by
Landlord, with an adjustment to be made once Fair Market Rental Value is
ultimately determined by binding appraisal. In no event shall any such
adjustment result in a decrease of the Monthly Base Rent for the Premises below
the amount payable by Tenant as of the period immediately preceding the ensuing
Extension Term.
(f) From and after the commencement of the Extension Term, all
of the other terms, covenants and conditions of the Lease shall also apply;
provided, however, that Tenant shall have no further rights to extend the Term.
44. .SATELLITE ANTENNA. During the Term, Tenant shall have the right,
subject to relevant regulatory approvals, availability of space within the
roofscreen and Landlord's consent, such consent not to be unreasonably withheld
or delayed, to install a satellite antenna ("Antenna") within the roofscreen on
the roof of the Building in a location satisfactory to both Landlord and Tenant.
Without otherwise limiting the criteria upon which Landlord may withhold its
consent to any proposed Antenna, if Landlord withholds its consent due to
concerns regarding the appearance of the Antenna or the impact on structural
aspects of the Building, such withholding of consent shall be presumptively
reasonable. Tenant shall not be charged any rent for roof space. Prior to
submitting any plans to the City of San Carlos or proceeding with any
installation of an Antenna, Tenant shall submit to Landlord elevations and
specifications for the Antenna. Tenant shall install any approved
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Antenna at its sole expense and shall be responsible for any damage caused by
the installation of the Antenna or related to the Antenna. At the end of the
Term, Tenant shall remove the Antenna from its location and repair any damage
caused by such removal.
45. RIGHT TO RELOCATE TENANT. By written notice delivered to Tenant by
Landlord on or before January 15, 1999, Landlord may elect to relocate Tenant to
the third floor of the building in which the Premises is located. In the event
Landlord makes such election the following provisions shall apply:
(i) The Tenant's Plan Delivery Date, and Scheduled
Commencement Date shall be extended by the number of days
between the date this Lease is fully executed and the date
of such notice;
(ii) The Rentable Area of the Premises designated on the
Basic Lease Information shall be 26,561;
(iii) The Tenant Allowance of $579,800 designated on the
Basic Lease Information shall be increased to $609,925 and
the $15,000 glass allowance shall be available to Tenant
for its actual out-of-pocket costs for architectural fees
incurred in connection with the relocation of Tenant
pursuant to this Paragraph 45; and
(iv) At the request of either party, Landlord and Tenant
shall execute a memorandum confirming the foregoing.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
date first above written.
LANDLORD:
CIRCLE STAR CENTER ASSOCIATES, L.P.
a California limited partnership
By: M-D Ventures, Inc.
Its: General Partner
By: /s/ Steve Dostart
---------------------------------
Steve Dostart
Its: Vice President
TENANT:
CENTRAAL CORPORATION
a California corporation
By: /s/ Keith Teare
---------------------------------
Keith W. Teare
Its: President & CEO
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EXHIBIT "B"
--------------------------------------------------------------------------------
WORK LETTER
1. BASE BUILDING: Landlord shall furnish and install the office building,
as defined in the plans listed in the attached Exhibit B-l, "Landlord's Plans,"
at Landlord's expense ("Base Building").
2. TENANT'S PLANS: On or before Tenant's Plan Delivery Date, as specified
in the Basic Lease Information, Tenant shall submit plans and specifications for
the tenant improvements which Tenant desires to construct within the Premises
("Tenant's Plans"). Tenant's Plans shall include all such information required
by Landlord's contractor to bid and construct said improvements, including but
not limited to those items in Exhibit B-2, "Minimum Information Required." Such
plans shall be subject to Landlord's approval, which shall not be unreasonably
withheld so long as the tenant improvements contemplated therein are (i)
substantially in compliance with any preliminary space plan drawn by Bernhard
Blauel and faxed to Gladys Gardiner on December 5, 1998, and (ii) such finishes
are in compliance with typical Class A office building improvements and
Landlord's building standard finishes (e.g. blinds, color of doors, etc.).
Tenant shall engage Landlord's architect and/or engineers to prepare complete
mechanical, electrical, plumbing, and other engineering plans for the
installation of the heating, ventilating, air conditioning, electrical and
plumbing to be installed in the Premises, and the costs charged by Landlord's
architect and/or engineers for such services shall not exceed reasonable and
competitive rates. The engineering fees for plumbing and fire sprinkler work
shall be competitively bid as design/build with engineered drawings to be
included in the successful contractor's scope of work.
3. TENANT IMPROVEMENTS: Landlord shall cause Landlord's contractor to
construct, at Tenant's expense, subject to the Tenant Allowance as noted below,
the additional work to complete the Premises ("Tenant Improvements") normally
performed by the construction trades, required by the plans and specifications
approved by Landlord and Tenant pursuant to this Work Letter. The quantities,
character and manner of installation of all of the foregoing work shall be
subject to the limitations imposed by any applicable regulations, laws,
ordinance, codes and roles.
4. TENANT'S EXPENSE: The cost of the Tenant Improvements, as well as
space planning and preparing the working drawings (including Tenant's Plans) for
the Tenant Improvements or any change to the original instruction and/or plans
and specifications shall be paid by Tenant. Upon Tenant's written request,
Landlord shall make available to Tenant an allowance of the amount specified in
the Basic Lease Information as the "Tenant Allowance". The Tenant Allowance may
be applied toward the following items in respect of the Tenant Improvements:
Architectural and engineering fees, space planning, building permits or other
governmental fees, cost of labor materials and other charges included in the
construction contract for construction of Tenant Improvements. The cost of the
Tenant Improvements to be paid from the Tenant Allowance or by Tenant shall not
include the following (which shall be Landlord's responsibility): (a) costs
attributable to improvements installed outside the demising walls of the
Premises; (b) costs for improvements which are not shown on or described in the
Tenant's Plans as finally approved by Landlord, other than changes required by
the City of San Carlos or other governmental authorities in connection with
their review of Tenant's Plans or issuance of permits, changes necessitated by
Tenant Delays (as defined below), or changes that are requested or approved by
Tenant; (c) attorneys' fees incurred in connection with negotiation of
construction contracts, and attorneys' fees, experts' fees and other costs in
connection with disputes with third parties, except to the extend such disputes
result from Tenant's acts or omissions; (d) unless interest and other costs
incurred by Landlord to finance Landlord's construction costs; (e) costs
incurred as a consequence of delay (other than Tenant Delays), construction
defects or default by Landlord's contractor; (f) costs recoverable by Landlord
upon account of warranties and insurance; (g) restoration costs in excess of
insurance proceeds as a consequence of casualties; (h) penaltes and late charges
attributable to Landlord's failure to pay construction costs; (i) costs to bring
the Base Building into compliance with applicable laws and restrictions,
including, without limitation, the Americans with Disabilities Act and
environmental law, except to the extend such laws and restrictions are only
triggered by Tenant's acts, improvements or particular use of the Premises; (j)
wages, labor and overhead for overtime and premium time, unless required due to
Tenant Delays; (k) offsite construction management or other general construction
overhead costs incurred by Landlord; and (1) a General Contractor's fee in
excess of that contemplated in Paragraph 5 below. Upon the approval by Landlord
and Tenant of the Landlord's contractor's cost estimate in accordance with
Paragraph 5 below, Tenant shall provide Landlord with a detailed breakdown of
the final costs to be incurred or which have been incurred in connection with
the design and construction of the Tenant Improvements (the "Final Costs").
Prior to the commencement of construction of the Tenant Improvements, Tenant
shall supply Landlord with cash in an amount (the "Over-Allowance Amount") equal
to the difference between the amount of the Final Costs and the Tenant Allowance
(less any portion thereof already disbursed by Landlord, on or before the
commencement of construction of the Tenant Improvements). The Over-Allowance
Amount shall be disbursed by Landlord pro
Exhibits - Page 2 of 17
<PAGE>
rata with the Tenant Allowance as costs are incurred for Tenant Improvements.
Any amounts payable by Tenant under this Work Letter which are in excess of the
Tenant Allowance and Over-Allowance Amount deposited with Landlord shall be paid
by Tenant to Landlord within twenty (20) days of receipt of an invoice from
Landlord.
In addition, the Tenant Improvements shall include widow shades meeting the
following specifications: Hunter Dougals 8 Mil Atlantis Mini-Blinds; Color: 190
Bright Alluminum.
5. COST ESTIMATE: Upon receipt of Tenant's Plans, Landlord shall obtain a
cost estimate for the Tenant Improvements from Landlord's contractor, the costs
and quality of which are within industry standards. Landlord shall require that
its general contractor secure three (3) approved independent sealed bids from
three (3) subcontractors for each trade whose costs are in excess of five
percent (5%) of the total cost estimate. Tenant shall have the right to add to
the bid list one unionized subcontractor in each area where costs are in excess
of such five percent (5 %) mount, subject to the general contractor's reasonable
requirements. All bids shall be submitted to Landlord and Tenant; at Tenant's
request, Landlord and Tenant shall open the bids together at the offices of the
Landlord's general contractor. Landlord agrees to permit Tenant to designate
that the lowest bidding subcontractor be selected. The General Contractor's fee
shall be calculated on a "cost plus a fee" basis where the fee for overhead and
profit is four percent (4 %) of cost and the amount charged for general
conditions is reasonable and competitive for similar tenant improvement
projects. Tenant shall not be charged any fee for Landlord's oversight of the
construction of Tenant's Improvements. If the cost estimate exceeds the Tenant
Allowance, the cost estimate shall be submitted to Tenant. Tenant shall approve
or disapprove such estimate within seven (7) days. Failure to disapprove within
such period shall constitute approval. If disapproved, Tenant shall provide new
sufficient instruction within such seven (7) days for the revision of plans and
cost estimates for approval by Landlord. Tenant shall be obligated to approve
the cost estimate if the cost is within the Tenant Allowance or any greater
budget approved by Tenant. If the cost estimate is in excess of the Tenant
Allowance or such greater budget, Tenant shall provide new sufficient
instruction which will reduce the cost estimate for the Tenant Improvements to a
level acceptable to Tenant and within any alowance provided by Landlord within
ten (10) days after receipt of the cost estimate. In the event that, after
receiving Tenant's approval of the cost estimate, the cost of the Tenant
Improvements shall increase due to the requirements of any governmental agency,
such increased amount shall automatically approved so long as it does not exceed
ten percent (10%) of the previously approved amount.
6. CONSTRUCTION OF TENANT IMPROVEMENTS: After Tenant's approval of the
cost estimate for Tenant's Plans, Landlord shall administer and diligently
prosecute the construction of Tenant Improvements in accordance with Tenant's
Plans; provided, however, that Landlord shall not be required to install any
Tenant Improvements which do not conform to the plans and specifications for the
Base Building, or do not conform to any applicable regulations, laws,
ordinances, codes and roles; such conformity shall be the obligation of Tenant.
After the cost estimate has been approved by Landlord and Tenant as provided
above, neither party shall have the right to require extra work or change orders
with respect to the construction of the Tenant Improvements without the prior
written consent of the other, which consent shall not be unreasonably withheld
or delayed. All change orders shall specify any change in the cost estimate as a
consequence of the change order. All Tenant Improvements shall be constructed by
Landlord's contractor, which shall be a reputable, unionized general contractor,
subject to approval by Tenant which approval shall not be unreasonably withheld,
who will complete the work in a good and workmanlike manner and in accordance
with relevant laws and codes. Subject to the limitation on the General
Contractor's fee imposed by Paragraph 5, Tenant approves the use of Devcon
Construction, the General Contractor for the Base Building, as the General
Contractor for the Tenant Improvements.
7. TENANT'S CONTRACTORS: Cable TV connections, telephone equipment and
wiring and office equipment wiring, shall be installed by Tenant's contractors
and shall conform with Landlord's contractor's schedule and work of installation
and shall be handled in such a manner as to maintain harmonious labor relations
and as not to interfere with or delay the work of Landlord's contractors. All
such improvements furnished and installed by Tenant's contractor shall not cause
Landlord's contractor to be dependent upon the work of Tenant's contractors in
order for Landlord's contractor to complete its work. Tenant's contractors,
subcontractors and labor shall be subject to approval by Landlord which approval
shall not be unreasonably withheld or delayed and shall be subject to the
reasonable administrative supervision of Landlord's general contractor and
reasonable roles of the site. Contractors and subcontractor engaged by Tenant
shall employ laborers and means to insure, so far as may be possible, the
progress of the work without interruption on account of strikes, work stoppage
or similar causes for delay. Landlord shall give access and entry to the Leased
Premises to Tenant's contractors at least three (3) weeks prior to the scheduled
completion of the Tenant Improvements; provided, however, that if such entry is
prior to the first day of the Term such entry shall be subject to all of the
terms and conditions of this Lease except payment of Rent and Additional Charges
and Tenant shall not be allowed to commence business in the Premises.
8. SUBSTANTIAL COMPLETION/PUNCH LIST: "Substantial Completion" shall be
defined as when Landlord's contractor has substantially completed all work to be
performed by Landlord in accordance with Tenant's Plans,
Exhibits - Page 3 of 17
<PAGE>
subject only to (i) the completion or correction of items on Landlord's
architect's punch list, which shall be subject to approval by Tenant, such
approval not to be unreasonably withheld, (ii) a certificate of occupancy for
the Premises having been obtained, (iii) all utilities having been turned on and
available for use, and (iv) all Building common areas having been completed.
9. TENANT DELAYS: "Tenant Delays" shall be defined as those delays caused
in achieving Substantial Completion due to: (a) Tenant's failure to submit (i)
Tenant's Plans, (ii) approval of the cost estimates, or (iii) sufficient
instruction to change Tenant's Plans as a result of disapproval of a cost
estimate on or before the dates or time periods called for; (b) Tenant's
change(s) in plans and specifications after said dates that actually delay
construction, but only to the extent that Tenant received prior written notice
from the Landlord of the amount of delay associated with the changes before the
changes were finally approved and authorized by Tenant; (c) Tenant's request for
materials, finishes or installations which require longer than forty-five (45)
days to complete; or (d) other delays caused by Tenant in construction.
10. COMMENCEMENT DATE: The Premises shall be deemed completed and
possession delivered and Tenant shall accept the Premises upon Substantial
Completion. Notwithstanding anything to the contrary in the Lease, effective
upon delivery of the Premises to Tenant, Landlord does hereby warrant that, to
Landlord best knowledge, (a) the construction of the Tenant Improvements was
performed in accordance with all roles, regulations, codes, statutes,
ordinances, and laws of all applicable governmental and quasi-governmental
authorities and in a good and workman-like manner, (b) all materials and
equipment installed therein was new and otherwise of good quality, (c) the
electrical, plumbing, and mechanical systems servicing the Premises are in
working order and in good condition, and (d) the roof is in good condition and
water tight. The foregoing warranties shall automatically expire one year after
Substantial Completion. Tenant's obligation under the Lease to pay Rent and
Additional Charges shall commence upon the later of (i) the Scheduled
Commencement Date, as specified in the Basic Lease Information, or (ii)
Substantial Completion. If Landlord shall be delayed in substantial completion
as a result of Tenant Delays, then the Commencement Date, and Tenant's
obligation to begin paying Rent and Additional Charges, shall be adjusted to
reflect what the Commencement Date would have been if there had been no Tenant
Delays. Within seven (7) days after written request of Landlord, Tenant agrees
to give Landlord a letter confirming the Commencement Date and certifying that
Tenant has accepted delivery of the Premises and that the condition of the
Premises complies with Landlord's obligations hereunder.
Exhibits - Page 4 of 17
<PAGE>
EXHIBIT "B-I"
LANDLORD'S PLANS
The plans and specifications related to Two Circle Star Way as drawn or
assembled by Kenneth Rodrigues & Partners, Inc. as called out below:
GENERAL
A0.0 COVER SHEET 1/22/98
A0.1 GENERAL INFORMATION SHEET/ 1/22/98
TITLE 24 ENERGY COMPLIANCE
CIVIL
C0.2 STORM WATER POLLUTION PREVENTION PLAN
C1.1 LAYOUT AND PAVING PLAN 11/14/97
C1.2 LAYOUT AND PAVING PLAN 12/19/97
C2.1 GRADING PLAN 11/14/97
C2.2 GRADING PLAN 11/14/97
C3.1 UTILITY PLAN 11/14/97
C3.2 UTILITY PLAN 11/14/97
C4.1 DETAILS 11/14/97
C4.2 DETAILS 11/14/97
C4.3 DETAILS 12/19/97
ARCHITECTURAL
A2.1 BUILDING ONE FIRST FLOOR PLAN 2/26/98
A2.2 BUILDING ONE SECOND FLOOR PLAN 1/22/98
A2.3 BUILDING ONE THIRD FLOOR PLAN 1/22/98
A2.4 BUILDING ONE FOURTH FLOOR PLAN 1/22/98
A2.5 ENLARGED CORE PLAN 1/22/98
A2.6 ENLARGED BATHROOM PLANS 1/22/98
A3.1 BUILDING ONE ROOF PLAN 1/22/98
A4.1 BUILDING ONE ELEVATIONS 2/26/98
A4.2 BUILDING ONE ELEVATIONS 1/22/98
A5.1 BUILDING SECTION 1/22/98
A5.2 TYPICAL WALL SECTIONS 1/22/98
A7.1 REFLECTED CEILING PLANS 3/5/97
A7.2 ENLARGED STAIR PLANS AND SECTIONS 1/22/98
A7.3 ENLARGED ELEVATOR PLANS AND SECTIONS 1/22/98
A7.4 DOOR AND HARDWARE SCHEDULE/ROOM 3/11/98
FINISH SCHEDULE
A8.1 EXTERIOR DETAILS 1/22/98
A8.2 DOOR/WINDOW DETAILS 1/22/98
A8.3 ROOF DETAILS 1/22/98
A9.1 WALL TYPES 1/22/98
A9.2 INTERIOR DETAILS 1/22/98
A9.3 UL ASSEMBLIES 11/14/97
STRUCTURAL
S0.1 GENERAL NOTES 10/6/97
S2.1 BUILDING ONE FOUNDATION/FIRST 10/6/97
FLOOR FRAMING PLAN
S2.2 BUILDING ONE 2ND FLR. FRAMING PLAN 10/6/97
S2.3 BUILDING ONE 3RD FLR. FRAMING PLAN 10/6/97
S2.4 BUILDING ONE 4TH FLR. FRAMING PLAN 10/6/97
S2.5 BUILDING ONE ROOF FRAMING PLAN 10/6/97
S2.5A BUILDING ONE ROOF SCREEN/SLAB 10/6/97
REINFORCING PLAN
S3.1 TYPICAL CONCRETE DETAILS 7/23/97
S3.2 CONCRETE DETAILS NO. 1 10/6/97
S3.3 CONCRETE DETAILS NO. 2 10/6/97
S3.4 CONCRETE DETAILS NO. 3 I0/6/97
S5.1 TYPICAL METAL DECK DETAILS NO. 1 10/6/97
S5.2 TYPICAL METAL DECK DETAILS NO. 2 10/6/97
S5.3 TYPICAL STEEL DETAILS 10/6/97
S5.4 COLUMN SCHEDULE AND DETAILS 10/6/97
Exhibits - Page 5 of 17
<PAGE>
S5.5 BRACED FRAME ELEVATIONS AND DETAILS 10/6/97
S5.6 STEEL DETAILS NO. 1 10/6/97
S5.7 STEEL DETAILS NO. 2 10/6/97
S9.1 PRECAST PANEL SUPPORT PLAN 10/6/97
S9.2 PRECAST PANEL SUPPORT PLAN 7/30/97
S9.3 PRECAST PANEL SUPPORT DETAILS 10/6/97
LANDSCAPE
L-1 PHASE ONE NOTES AND LEGEND 2/6/98
L-2 PHASE ONE LAYOUT AND GRADING PLAN 2/6/98
L-3 PHASE ONE PLATING PLAN 2/6/98
L-4 PHASE ONE IRRIGATION 2/6/98
L-5 PHASE ONE DETAILS 7/28/97
L-6 PHASE ONE DETAILS 11/26/97
L-7 PHASE ONE DETAILS 2/6/98
MECHANICAL
AC0.01 TITLE 24, DRAWING SCHEDULE, MANDATORY 3/10/98
MEASURES, AND GENERAL NOTES 3/10/98
AC0.02 EQUIPMENT SCHEDULE 3/10/98
AC1.01 FIRST FLOOR HVAC PLAN 3/10/98
AC1.02 SECOND FLOOR HVAC PLAN 3/10/98
AC1.03 THIRD FLOOR HVAC PLAN 3/10/98
AC1.04 FOURTH FLOOR HVAC PLAN 3/10/98
AC1.05 ROOF PLAN 3/10/98
AC1.06 ROOF COORDINATION PLAN 3/10/98
AC2.01 PIPING SCHEMATICS AND DETAILS 3/10/98
AC7.01 WIRING AND CONTROLS 3/10/98
ELECTRICAL
CIR-E0 COVER SHEET 7/23/97
CIR-SE1 SITE LIGHTING PLAN 7/23/97
CIR-SE2 SITE LIGHTING PLAN 7/23/97
CIR-E1 FIRST FLOOR LIGHTING PLAN 7/23/97
CIR-E2 SECOND FLOOR LIGHTING PLAN 7/23/97
CIR-E3 THIRD FLOOR LIGHTING PLAN 7/23/97
CIR-E4 FOURTH FLOOR LIGHTING PLAN 7/23/97
CIR-E5 FIRST FLOOR POWER PLAN 7/23/97
CIR-E6 SECOND FLOOR POWER PLAN 7/23/97
CIR-E7 THIRD FLOOR POWER PLAN 7/23/97
CIR-E8 FOURTH FLOOR POWER PLAN 7/23/97
CIR-E9 FIRST FLOOR MECHANICAL PLAN - 7/23/97
CIR-E10 SECOND FLOOR MECHANICAL PLAN 7/23/97
CIR-E11 THIRD FLOOR MECHANICAL PLAN 7/23/97
CIR-E12 FOURTH FLOOR MECHANICAL PLAN 7/23/97
CIR-E13 ROOF MECHANICAL PLAN 7/23/97
CIR-E14 SINGLE LINE DIAGRAM 11/24/97
CIR-E 15 PANEL SCHEDULES 7/23/97
CIR-E 16 PANEL SCHEDULES 7/23/97
CIR-E17 TITLE 24 7/23/97
PLUMBING
P1A 1ST FLOOR BELOW GRADE 12/18/97
P1B 1ST FLOOR ABOVE GRADE 12/18/97
P2 2ND FLOOR 12/18/97
P3 3RD FLOOR 12/18/97
P4 4TH FLOOR 12/18/97
P5 ROOF PLAN 12/18/97
FIRE ALARM SYSTEM
FA-1 FIRST FLOOR BUILDING ONE 12/5/97
FA-2 SECOND FLOOR BUILDING ONE 12/5/97
FA-3 THIRD FLOOR BUILDING ONE 12/5/97
FA-4 FOURTH FLOOR BUILDING ONE 12/5/97
FA-5 ROOF PLAN BUILDING ONE 12/5/97
Exhibits - Page 6 of 17
<PAGE>
EXHIBIT "B-2"
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MINIMUM INFORMATION REQUIRED
FLOOR PLANS INDICATING:
1. Location and type of all partitions;
2. Location and type of all doors. Indicate hardware and provide keying
schedule;
3. Location and type of glass partitions, windows and doors. Indicate
framing if not Building Standard;
4. Location of telephone equipment room;
5. Indicate critical dimensions necessary for construction;
6. Location of all Building Standard electrical items (outlets,
switches, telephone outlets). Building Standard lighting will be
determined by Landlord's architect;
7. Location and type of all non-Building Standard electrical items,
including lighting.
8. Location and type of equipment that will require special electrical
requirements. Provide manufacturer's specifications for use and
operation;
9. Location, weight per square foot, and description of any
exceptionally heavy equipment or filing system exceeding 50 LBS. psf
live load;
10. Requirements for special air conditioning or ventilation;
11. Type and color of floor covering;
12. Location, type, and color of wall covering;
13. Locations, type and color of Building Standard and non-Building
Standard paint or finishes;
14. Location and type of plumbing;
15. Location and type of kitchen equipment.
DETAILS SHOWING:
1. All millwork with verified dimensions and dimensions of all
equipment to be built in;
2. Corridor entrance;
3. Bracing or support of special walls, glass partitions, etc., if
desired. If not included with the space plan, the Landlord's
architect will design all support or bracing required at Tenant's
expense.
Exhibits - Page 7 of 17
<PAGE>
EXHIBIT "C"
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RULES AND REGULATIONS
1. Sidewalks, halls, passages, exits, entrances, elevators, escalators
and stairways shall not be obstructed by Tenant or used by Tenant for any
purpose other than for ingress to and egress from the Premises. The halls,
passages, exits, entrances, elevators and stairways are not for the use of the
general public and Landlord shall in all cases retain the right to control and
prevent access thereto by all persons whose presence, in the judgment of
Landlord, shall be prejudicial to the safety, character, reputation arid
interests of the Building and its tenants, provided that nothing herein
contained shall be construed to prevent such access to persons with whom Tenant
normally deals in the ordinary course of Tenant's business unless such persons
are engaged in illegal activities. Tenant, and Tenant's employees or invitees,
shall not go upon the roof of the Building, except as authorized by Landlord.
2. No sign, placard, picture, name, advertisement or notice visible
from the exterior of the Premises shall be inscribed, painted, affixed,
installed or otherwise displayed by Tenant either on the Premises or any part of
the Building without the prior written consent of Landlord, and Landlord shall
have the right to remove any such sign, placard, picture, name, advertisement or
notice without notice to and at the expense of Tenant. Tenant may place its name
and logo on one wall in Reception Area of Premises.
If Landlord shall have given such consent to Tenant at any time,
whether before or after the execution of the Lease, such consent shall not in
any way operate as a waiver or release of any of the provisions hereof or of the
Lease, and shall be deemed to relate only to the particular sign, placard,
picture, name, advertisement or notice so consented to by Landlord arid shall
not be construed as dispensing with the necessity of obtaining the specific
written consent of Landlord with respect to any other such sign, placard,
picture, name, advertisement or notice. All approved signs or lettering on doors
and walls shall be printed, painted, affixed or inscribed at the expense of
Tenant by a person approved by Landlord.
3. The bulletin board or directory of the Building will be provided
exclusively for the display of the name and location of tenants only and
Landlord reserves the right to exclude any other names therefrom.
4. No curtains, draperies, blinds, shutters, shades, screens or other
coverings, awnings, hangings or decorations shall be attached to, hung or placed
in, or used in connection with, any window, door or patio on the Premises
without the prior written consent of Landlord. In any event with the prior
written consent of Landlord, all such items shall be installed inboard of
Landlord's window coverings and shall not in any way be visible from the
exterior of the Building. No articles shall be placed or kept on the window
sills so as to be visible from the exterior of the Building. No articles shall
be placed against glass partitions or doors which might appear unsightly from
outside the Building.
5. Landlord reserves the right to exclude from the Building between the
hours of 6:00 p.m. and 8:00 a.m. and at all hours on Saturdays, Sundays and
holidays all persons who do not possess a building access card provided by
Landlord or who are not accompanied by Tenant's employees. Landlord will furnish
access cards to persons for whom Tenant requests the same in writing. Tenant
shall be responsible for all persons from who it requests access cards and shall
be liable to Landlord for all acts of such persons. Landlord shall in no case be
liable for damages for error with regard to the admission to or exclusion from
the Building of any person.
During the continuance of any invasion, mob, riot, public excitement
or other circumstance rendering such action advisable in Landlord's opinion,
Landlord reserves the right to prevent access to the Building by closing the
doors, or otherwise, for the safety of tenants and protection of the Building
and property in the Building.
6. Tenant shall not employ any person or persons other than the janitor
of Landlord for the purpose of cleaning the Premises unless otherwise agreed to
by Landlord in writing. Except with the written consent of Landlord, no person
or persons other than those approved by Landlord shall be permitted to enter the
Building for the purpose of cleaning the same. Tenant shall not cause any
unnecessary labor by reason of Tenant's carelessness or indifference in the
preservation of good order and cleanliness of the Premises. Landlord shall not
in any way be responsible to Tenant for any loss of property on the Premises,
however occurring, or for any damage done to the effects of Tenant by the
janitor or any other employee or any other person.
7. Tenant shall not obtain for use upon the Premises ice, drinking
water, food, beverage, towel or other similar services except through facilities
approved in writing by Landlord and under regulations fixed by Landlord, or
accept barbering or bootblacking services in the Premises except from persons
authorized by Landlord. Tenant may have a Lunchroom/Break room in the Premises
that has a refrigerator and microwave.
Exhibits - Page 8 of 17
<PAGE>
8. Tenant shall see that the doors of the Premises are closed and
securely locked and must observe strict care and caution that all water faucets
or water apparatus are entirely shut off before Tenant or its employees leave
such Premises, and that all utilities shall likewise be carefully shut off, so
as to prevent waste or damage, and for any default or carelessness the Tenant
shall make good all injuries sustained by other tenants or occupants of the
Building or Landlord. On multiple-tenancy floors, all tenants shall keep the
door or doors to the Building corridors closed at all times except for ingress
and egress.
9. As more specifically provided in the Lease, Tenant shall not waste
electricity, water or air conditioning and agrees to cooperate fully with
Landlord to assure the most effective operation of the Building's heating and
air conditioning, and shall refrain from attempting to adjust any controls other
than room thermostats installed for Tenant's use.
10. Tenant shall leave the blinds in a down position so as to minimize
excess heat load in the building from the sun.
11. Tenant shall not alter any lock or access device or install a new or
additional lock or access device or any bolt on any door of the Premises without
the prior written consent of Landlord. If Landlord shall give its consent,
Tenant shall in each case furnish Landlord with a key for any such lock.
12. Tenant shall not make or have made additional copies of any keys or
access devices provided by Landlord. Tenant, upon the termination of the
tenancy, shall deliver to Landlord all the keys or access devices for the
Building, offices, rooms and toilet rooms which shall have been furnished to
Tenant or which Tenant shall have had made. In the event of the loss of any keys
or access devices so furnished by Landlord, Tenant shall pay Landlord therefor.
13. The toilet rooms, toilets, urinals, wash bowls and other apparatus
shall not be used for any purpose other than that for which they were
constructed and no foreign substance of any kind whatsoever shall be thrown
therein, and the expense of any breakage, stoppage or damage resulting from the
violation of this rule by Tenant or Tenant's employees or invitees shall be
borne by Tenant.
14. Tenant shall not use or keep in the Premises or the Building any
kerosene, gasoline or inflammable or combustible fluid or material other than
limited quantities necessary for the operation or maintenance of office or
office equipment. Tenant shall not use any method of heating or air conditioning
other than supplied by Landlord.
15 Tenant shall not use, keep or permit to be used or kept in the
Premises any foul or noxious gas or substance or permit or suffer the Premises
to be occupied or used in a manner offensive or objectionable to Landlord or
other occupants of the Building by reason of noise, odors and/or vibrations or
interfere in any way with other tenants or those having business therein, nor
shall any animals or birds be brought or kept in or about the Premises or the
Building.
16. No cooking shall be done or permitted by Tenant on the Premises
(except that use by the Tenant of Underwriter's Laboratory approved equipment
for the preparation of coffee, tea, hot chocolate and similar beverages for
Tenant and its employees shall be permitted, provided that such equipment and
use are in accordance with all applicable federal, state and city laws, codes,
ordinances, rules and regulations), nor shall Premises be used for lodging. See
Paragraph 7.
17. Except with the prior written consent of Landlord, Tenant shall not
sell, or permit the sale, at retail, of newspapers, magazines, periodicals,
theater tickets or any other goods or merchandise in or on the Premises, nor
shall Tenant carry on, or permit or allow any employee or other person to carry
on, the business of stenography, typewriting or any similar business in or from
the Premises for the service or accommodation of occupants of any other portion
of the Building, nor shall the Premises be used for the storage of merchandise
or for manufacturing of any kind, or the business of a public barber shop or
beauty parlor, nor shall the Premises be used for any improper, immoral or
objectionable purpose, or any business or activity other than that specifically
provided for in Tenant's Lease.
18. If Tenant requires telegraphic, telephonic, burglar alarm or similar
services, it shall first obtain and comply with Landlord's reasonable
instructions in their installation.
19. Landlord will direct electricians as to where and how telephone,
telegraph and electrical wires are to be introduced or installed. No boring or
cutting for wires will be allowed without the prior written consent of Landlord.
The location of burglar alarms, telephones, call boxes and other office
equipment affixed to the Premises shall be subject to the written approval of
Landlord, which shall not be unreasonably withheld.
Exhibits - Page 9 of 17
<PAGE>
20. Tenant shall not install any radio or television antenna (not
including the satellite antenna referred to in Paragraph 44 of the Lease),
loudspeaker or any other device on the exterior walls or the roof of the
Building. Tenant shall not interfere with radio or television broadcasting or
reception from or in the Building or elsewhere.
21. Tenant shall not lay linoleum, tile, carpet or any other floor
covering so that the same shall be affixed to the floor of the Premises in any
manner except as approved in writing by Landlord. The expense of repairing any
damage resulting from a violation of this role by Tenant or Tenant's
contractors, employees or invitees or the removal of any floor covering shall be
borne by Tenant. Tenant shall use chair pads if needed to avoid excess wear and
tear to the floor coverings.
22. The freight elevator shall be available for use by all tenants in
the Building, subject to such reasonable scheduling as Landlord in its
discretion shall deem appropriate. No furniture, freight, equipment, materials,
supplies, packages, merchandise or other property will be received in the
Building or carried up or down the elevators except between such hours and in
such elevators as shall be designed by Landlord.
Landlord shall have the right to prescribe the weight, size, and
position of all safes, furniture or other heavy equipment brought into the
Building. Safes or other heavy objects shall, if considered necessary by
Landlord, stand on wood strips of such thickness as determined by Landlord to be
necessary to properly distribute the weight thereof. Landlord will not be
responsible for loss of or damage to any such safe, equipment or property from
any cause, and all damage done to the Building by moving or maintaining any such
safe, equipment or other property shall be repaired at the expense of Tenant.
Business machines and mechanical equipment belonging to Tenant which
cause noise or vibration that may be transmitted to the structure of the
Building or to any space therein to such a degree as to be objectionable to
Landlord or to any tenants in the Building shall be placed and maintained by
Tenant, at Tenant's expense, on vibration eliminators or other devices
sufficient to eliminate noise or vibration. The persons employed to move such
equipment in or out of the Building must be acceptable to Landlord.
23. Tenant shall not place a load upon any floor of the Premises which
exceeds the load per square foot which such floor was designed to carry and
which is allowed by law. Tenant shall not mark, use double-sided adhesive tape
on, or drive nails, screw or drill into, the partitions, woodwork or plaster or
in any way deface the Premises or any part thereof, without repairing any
resulting damage. Tenant may hang pictures on walls in the Premises. Any damage
to the walls caused by molley bolts, or like hanging materials, will be repaired
by Tenant.
24. Tenant shall not install, maintain or operate upon the Premises any
vending machine without the written consent of Landlord.
25. There shall not be used in any space, or in the public areas of the
Building, either by Tenant or others, any hand trucks except those equipped with
robber tires and side guards or such other material-handling equipment as
Landlord may approve. No other vehicles of any kind shall be brought by Tenant
into or kept in or about the Premises.
26. Tenant shall store all trash and garbage within the interior of the
Premises. No material shall be placed in the trash boxes or receptacles if such
material is of such nature that it may not be disposed of in the ordinary and
customary manner of removing and disposing of trash and garbage in the
jurisdiction in which the Premises is located, without violation of any law or
ordinance governing such disposal. All trash, garbage and refuse disposal shall
be made only through entryways and elevators provided for such purposes and at
such times as Landlord shall designate.
27. Canvassing, soliciting, distribution of handbills or any other
written material and peddling in the Building are prohibited, and Tenant shall
cooperate to prevent the same. Tenant shall not make room-to-room solicitation
of business from other tenants in the Building.
28. Landlord shall have the right, exercisable without notice and
without liability to Tenant, to change the name and address of the Building.
29. Landlord reserves the right to exclude or expel from the Building
any person who, in Landlord's judgment, is intoxicated or under the influence of
liquor or drugs or who is in violation of any of the roles or regulations of the
Building.
30. Without the prior written consent of Landlord, Tenant shall not use
the name of the Building in connection with or in promoting or advertising the
business of Tenant except as Tenant's address. Tenant may use Project's name on
its stationery and business cards.
Exhibits - Page 10 of 17
<PAGE>
31. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.
32. Tenant assumes any and all responsibility for protecting the
Premises from theft, robbery and pilferage, which includes keeping doors locked
and other means of entry to the Premises closed, unless caused by the gross
negligence or willful misconduct of Landlord, its agents, servants, or employees
("Landlord Parties").
33. The requirements of Tenant will be attended to only upon application
at the office of the Building by an authorized individual. Employees of Landlord
shall not perform any work or do anything outside of their regular duties unless
under special instructions from Landlord, and no employees will admit any person
(Tenant or otherwise) to any office without specific instructions from Landlord.
34. Landlord may waive any one or more of these Rules and Regulations
for the benefit of any particular tenant or tenants, but no such waiver by
Landlord shall be construed as a waiver of such Rules and Regulations in favor
of any other tenant or tenants, nor prevent Landlord from thereafter enforcing
any such Rules and Regulations against any or all tenants of the Building.
35. Landlord reserves the right to make such other and reasonable rules
and regulations as in its judgment may from time to time be needed for safety
and security, for care and cleanliness of the Building and for the preservation
of good order therein. Tenant agrees to abide by all such Rules and Regulations
hereinafter stated and any additional rules and regulations which are adopted.
No new Rule or Regulation shall be designed to discriminate solely against
Tenant.
36. Tenant shall be responsible for the observance of all of the
foregoing Rules and Regulations by Tenant's employees, agents, clients,
customers, invitees and guests.
37. Unless otherwise defined, terms used in these Rules and Regulations
shall have the same meaning as in the Lease.
Exhibits - Page 11 of 17
<PAGE>
EXHIBIT "D"
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FORM OF TENANT ESTOPPEL CERTIFICATE
TO: ________________, or Assignee ("Lender"), and/or whom else it may concern:
THIS IS TO CERTIFY THAT:
1. The undersigned is the lessee ("Tenant") under that certain lease dated
_____________ 19__, ("Lease"), by and between _________________________
_________________ as lessor ("Landlord") and __________________________
__________________________ as Tenant, covering those certain premises
commonly known and designated as ___________________ ("Premises").
2. The Lease has not been modified, changed, altered, assigned, supplemented
or amended in any respect (except as indicated below; if none, state
"none"). The Lease is not in default and is valid and in full force and
effect on the date hereof. The Lease is the only Lease or agreement
between the Tenant and the Landlord affecting or relating to the
Premises. The Lease represents the entire agreement between the Landlord
and the Tenant with respect to the Premises. __________________.
3. The Tenant is not entitled to, and has made no agreement(s) with the
Landlord or its agents or employees concerning free rent, partial rent,
rebate of rent payments, credit or offset or deduction in rent, or any
other type of rental concession, including, without limitation, lease
support payments or lease buy-outs (except as indicated below; if none,
state "none"). _______________________________________________________
______________________________________________________________________.
4. The Tenant has accepted and now occupies the Premises, and is and has
been open for business since ____________ 19__. The Lease term began
______________,19___. The termination date of the present term of the
Lease, excluding unexercised renewals, is _____________, 19___.
5. The Tenant has paid rent for the Premises for the period up to and
including ______________, 19___. The fixed minimum rent and any
additional rent (including the Tenant's share of tax increases and cost
of living increases) payable by the Tenant presently is $____________ per
month. No such rent has been paid more than two (2) months in advance of
its due date, except as indicated below (if none, state "none"). The
Tenant's security deposit is $____________.
6. No event has occurred and no condition exists which, with the giving
notice or the lapse of time or both, will constitute a default under the
Lease. The Tenant has no existing defenses or offsets against the
enforcement of this Lease by the Landlord, except ____________________.
7. The Tenant has received or will receive payment or credit for tenant
improvement work in the total amount of $_________________ (or if other
than cash, describe below; if none, state "none"). All conditions under
this Lease to be performed to date by the Landlord have been satisfied.
All required contributions by the Landlord to the Tenant on account of
the Tenant's tenant improvements have been received by the Tenant, except
________________________________________________________________________
________________________________________________________________________.
8. The Lease contains, and the Tenant has, no outstanding options or rights
of first refusal to purchase the Premises or any part thereof or all or
any part of the real property of which the Premises are a part.
9. No actions, whether voluntary or otherwise, are pending against the
Tenant or any general partner of the Tenant under the bankruptcy laws of
the United States or any state thereof.
10. The Tenant has not sublet the Premises to any sublessee and has not
assigned any of its rights under the Lease, except as indicated below (if
none, state "none"). No one except the Tenant and its employees occupies
the Premises. ___________________________________________________.
11. The address for notices to be sent to the Tenant is as set forth in the
Lease.
12. To the best of Tenant's knowledge, the use, maintenance or operation of
the Premises complies with, and will at all times comply with, all
applicable federal, state, county or local statutes, laws, rules and
regulations of any governmental authorities relating to environmental,
health or safety matters (being
Exhibits - Page 12 of 17
<PAGE>
hereinafter collectively referred to as the Environmental Laws).
Exhibits - Page 13 of 17
<PAGE>
13. The Premises have not been used and the Tenant does not plan to use the
Premises for any activities which, directly or indirectly, involve the
use, generation, treatment, storage, transportation or disposal of any
petroleum product or any toxic or hazardous chemical, material,
substance, pollutant or waste.
14. Tenant has not received any notices, written or oral, of violation of any
Environmental Law or of any allegation which, if tree, would contradict
anything contained herein and there are not writs, injunctions, decrees,
orders or judgements outstanding, no lawsuits, claims, proceedings or
investigations pending or threatened, relating to the use, maintenance or
operation of the Premises, nor is Tenant aware of a basis for any such
proceeding.
15. (INCLUDE THIS PARAGRAPH FOR LOAN TRANSACTIONS.) The Tenant acknowledges
that all the interest of the Landlord in and to the Lease is being duly
assigned to Lender, and that pursuant to the terms thereof, all rent
payments under the Lease shall continue to be paid to the Landlord in
accordance with the terms of the Lease unless and until the Tenant is
notified otherwise in writing by Lender or its successors or assigns.
It is particularly noted that:
(a) Under the provisions of this assignment, the Lease cannot be
terminated (either directly or by the exercise of any option which
could lead to termination) or modified in any of its terms, or
consent be given to the release of any party having liability
thereon, without the prior written consent of Lender or it
successors or assigns, and without such consent, no rent may be
collected or accepted more than two (2) months in advance.
(b) The interest of the Landlord in the Lease has been assigned to
Lender for the purposes specified in the assignment. Lender, or its
successors or assigns, assumes no duty, liability or obligation
whatsoever under the Lease or any extension or renewal thereof.
(c) Any notices sent to Lender or its affiliates should be sent by
registered mail and addressed as follows: ______.
16. Tenant agrees to give any Mortgagee and/or Trust Deed Holders
("Mortgagee"), by registered mail, a copy of any notice of default served
upon the Landlord, provided that prior to such notice Tenant has been
notified in writing (by way of Notice of Assignment of Rents and Leases,
or otherwise), of the address of such Mortgagee. Tenant further agrees
that if Landlord shall have failed to cure such default within the time
provided for in this Lease, then the Mortgagee shall have an additional
sixty (60) days within which to cure such default of it such default
cannot be cured within that time, then such additional time as may be
necessary to cure such default shall be granted if within such sixty (60)
days Mortgagee has commenced and is diligently pursuing the remedies
necessary to cure such default (including, but not limited to,
commencement of foreclosure proceedings, if necessary to effect such
cure), in which event the Lease shall not be terminated while such
remedies are being so diligently pursued.
17. This certification is made to induce Lender to make certain fundings,
knowing that Lender relies upon the troth of this certification in
disbursing said funds.
18. The undersigned is authorized to execute this Tenant Estoppel Certificate
on behalf of the Tenant.
DATED THIS ____________________ DAY OF _______________, 19___.
------------------------------------------------
(TENANT)
BY:
-------------------------------------------
ITS:
--------------------------------------
DATE:
--------------------------------------
THE UNDERSIGNED HEREBY CERTIFIES THAT THE CERTIFICATIONS SET FORTH ABOVE ARE
TRUE AS OF THE DATE HEREOF.
------------------------------------------------
(OWNER/LANDLORD)
By:
-------------------------------------------
Its:
--------------------------------------
Date:
--------------------------------------
Exhibits - Page 14 of 17
<PAGE>
EXHIBIT "E"
------------------------------------------------------------------------------
ENCUMBRANCES
1. Ground Lease: That certain Lease between Mozad, L.P., as Lessor and Circle
Star Center Associates, L.P., as Lessee, dated October 15,
1997.
2. C,C&R's: "Declaration of Covenants, Conditions and Restrictions" dated
June 24, 1997 by and between Mozad, L.P. and Homestead Village
Incorporated.
3. Other: "Approved Conditional Use Permit - Office Complex, 1717
Industrial Road, San Carlos, CA 94070," effective date
June 12, 1997.
Exhibits - Page 15 of 17
<PAGE>
Cecile Sharp
-------------------------------------------------------------------------------
FROM: blauel@easynet.co.uk
SENT: Monday, December 21, 1998 8:19 AM
TO: Cecile Sharp
CC: keith@centraal.com; gladys@centraal.com; cindy@devcon-const.com;
gminolli@cruzers.com
SUBJECT: Circle Star Second Floor Project Notes
The following is an outline of installations and finishes for the proposed
offices on the second floor of Circle Star Centre, Circle Star Way, San Carlos,
CA (to be read in conjunction with layout document).
The second floor is open plan for 150 work stations with fully exposed services
in the ceiling void.
5'9 high semi transparent metal mesh screens along two sides of core,
demarkating corridor from open plan area.
Rubber floor finish in corridor area, carpet in open plan area.
Fresh and return air to be contained in zinc finished circular ducting.
Sprinkler system in painted proprietary mild steel pipes.
Fluorescent lighting suspended from ceiling running above and along with linear
desk configuration.
Power, voice and data to be run in zinc coated trays in ceiling with drops into
linear desk configuration.
2 no.s fully glazed server rooms, enclosed with fresh air supply and extended
sprinkler heads, approximately 24x36 each, attached to core end walls adjacent
to exit stairs.
Reception counter with mail room section, kitchenette with plumbing point,
coffee bar, copy corner
Kitchen with plumbing point in scharp angled corner of perimeter with open
meeting area.
1 no. 18 seater free standing board room in translucent light weight
construction, enclosed with fresh air supply.
7 no.s small free standing 6-8 seater meeting rooms in light weight
construction, enclosed with fresh air supply.
Blauel Architects
37 Claylands Road
London SW8 1NX
England
tel. +44 (0) 171 587 5100 fax. +44 (0) 171 735 6793
1
<PAGE>
Exhibit A - Premises
(IMAGE)
2
<PAGE>
EXHIBIT F
RECORDING REQUESTED BY
UNION BANK OF CALIFORNIA, N.A.
AND WHEN RECORDED MAIL TO:
UNION BANK OF CALIFORNIA, N.A.
Attn.: __________________________________
_________________________________________
_________________________________________
_________________________________________
-------------------------------------------------------------------------------
SPACE BEFORE THIS LINE FOR RECORDER'S USE
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT (the "Agreement")
is made as of ____________ by and between Union Bank of California, N.A.
("Bank") and _____________________________________________________ ("Tenant").
RECITAL:
A. Bank has made, or has agreed to make, a loan (the "Loan") to _____
______________________________________________________ ("Borrower") evidenced
by, among other things, a promissory note executed, or to be executed, by
Borrower in favor of Bank in the principal amount of the Loan (as amended from
time to time, the "Note").
B. The Note and certain other obligations of Borrower under the Loan
are, or will be, secured by, among other things, a Deed of Trust, Assignment of
Rents, Security Agreement and Fixture Filing (as amended from time to time, the
"Deed of Trust"). The Deed of Trust, executed or to be executed by Borrower in
favor of Bank, and previously recorded or recorded concurrently herewith,
encumbers the estate of Borrower in certain real property and improvements
commonly known as ___________________________________________________________
___________, and more particularly described on Exhibit A attached hereto (the
"Property").
C. Borrower has leased a portion of the Property to Tenant subject to
the terms and condition of a lease dated ________ (together with any amendments
executed prior to the date hereof, the "Lease").
D. As a condition to making the Loan, Bank requires that Tenant
subordinate the Lease to the Deed of Trust and the lien thereof and to attorn to
Bank as provided below. Tenant is willing to provide such subordination and
attornment provided Bank agrees not to disturb Tenant's right to possession
under the Lease as provided below.
1
<PAGE>
AGREEMENT
For good and valuable consideration, Tenant and Bank agree as follows:
1. SUBORDINATION. Tenant hereby subordinates the Lease and all rights,
remedies and options of Tenant thereunder, including without limitation any
option to purchase or right of first refusal to purchase the Property or any
part thereof or interest therein, to the Deed of Trust and to the lien thereof
and to all sums thereby and advances made thereunder with the same force and
effect as if the Deed of Trust had been executed, delivered and recorded prior
to the execution and delivery of the Lease.
2. NON DISTURBANCE. Bank will not join Tenant as party in any
Foreclosure (defined below) unless the joinder is necessary or desirable to
pursue its remedies under the Deed of Trust, and provided that such joinder
shall not result in the termination of the Lease or disturb interest of Tenant
under the Lease shall not be terminated by reason of the Foreclosure, but rather
the Lease shall continue in full force and effect and Bank shall recognize and
accept Tenant as tenant under the Lease subject to the provisions of the Lease
except as otherwise provided below; provided that, if Tenant shall then be in
default under the Lease beyond any notice, grace or cure period, at Bank's
option the Lease shall be terminated by reason of the Foreclosure and Bank shall
have no obligation to Tenant under the Lease. As used in this Agreement,
"Foreclosure" means any non-judicial or judicial foreclosure or other
enforcement of the remedies of the Deed of Trust, or any deed or other transfer
in lieu thereof.
3. ATTORNMENT. In the event of a transfer of Borrower's interest in the
Property to Purchaser (defined below), Tenant agrees that the Lease shall
continue in full force and effect and Tenant agrees to attorn to the Purchaser
as its landlord under the Lease and to be bound by all of the provisions of the
Lease for the balance of the thereof; provided that, the Purchaser shall not be:
(a) Liable for any act or omission of any Prior Landlord (defined below)
or subject to any offsets or defenses which Tenant might have against any Prior
Landlord;
(b) Liable for the return of any rental security deposit, or bound by
any payment of rents, additional rents or other sums which Tenant may have paid
more than one month in advance to any Prior Landlord, except to the extent such
sums are actually received by Purchaser;
(c) Bound by any amendment to the Lease, made without Bank's prior
written consent;
(d) Liable for obligation under the Lease the cost of which exceed the
value of its interest in the Property or for obligations which accrue after
Purchaser has sold or otherwise transferred its interest in the Property;
(e) *Bound to restore the Property after a casualty for a cost in excess
of proceeds recovered under any insurance required to be carried under the
Lease, or bound to restore the Property after a taking for a cost in excess of
any condemnation award;
(f) Bound by any restriction on competition beyond the Property;
* Notwithstanding anything to the contrary in this Lease, the terms of
this Section 3(e) of this Subordination, Non-Disturbance and Attornment
Agreement ("SNDA") shall only be binding upon the Tenant in connection with the
existing financing by Union Bank of California. The Tenant has not approved this
Section 3(e) in connection with any subsequent SNDA nor shall the refusal by
Centraal to incorporate this Section 3(e) into any subsequent SNDA be
unreasonable under Section 15 of the Lease.
2
<PAGE>
(g) Bound by any notice of termination, cancellation or surrender of the
Lease made without Bank's prior written consent;
(h) Bound by any environmental representation, warranty, covenant or
indemnity contained in the Lease.
(i) Bound by any option to purchase or right of first refusal with
respect to the Property or any portion thereof; and
(j) Bound by any representation or warranty contained in the Lease.
This attornment shall be immediately effective and self operative, without the
execution of any further instrument, upon Purchaser's acquisition of Borrower's
interest in the Property. As used in this Agreement, "Purchaser" means any
transferee, including Bank, of Borrower's interest in the Property pursuant to a
Foreclosure, and "Prior Landlord" means any landlord, including Borrower, under
the Lease prior in time to Purchaser.
4. NOTICE TO TENANT. After written notice is given to Tenant by Bank
that Borrower is in default under the Loan and that the rentals under the Lease
should be paid to Bank pursuant to the terms of the Deed of Trust, Tenant shall
thereafter pay to Bank all rent and all other sums due Borrower under the Lease.
5. NOTICE TO LENDER AND RIGHT TO CURE. Tenant shall provide written
notice to Bank of any default by Borrower under the Lease and Tenant agrees that
no notice of termination of the Lease or of an abatement of rent shall be
effective unless Bank shall have received written notice of default giving rise
to such termination or abatement and shall have failed within 60 days after
receipt of such notice to cure such default, or if such default cannot be cured
within 60 days, shall have failed within 60 days after receipt of such notice to
commence and thereafter diligently pursue any action necessary to cure such
default, including without limitation any action to obtain possession of the
Property. Notwithstanding the foregoing, Bank shall have no obligation to cure
any such default.
6. MISCELLANEOUS. This Agreement shall be binding upon and inure to the
benefit of Bank and Tenant and their respective successors and assigns. This
Agreement shall be governed and interpreted under the laws of the state where
the Property is located. This Agreement is the entire agreement of the parties
and supersedes any prior agreement with respect to its subject matter, and no
provision of this Agreement may be waived or modified except in a writing signed
by all parties. If any lawsuit, arbitration or other proceeding is brought under
this Agreement, the prevailing party shall be entitled to recover the reasonable
fees and costs of its attorneys in such proceeding. If any provision of this
Agreement is held to be invalid or unenforceable in any respect, this Agreement
shall be construed without such provision. This Agreement may be executed in two
or morn counterparts, each of which shall be deemed an original but all of which
taken together shall constitute one and the same document. Tenant represents and
warrants to Bank that this Agreement is a valid and binding agreement of Tenant
and the person(s) executing this Agreement on behalf of Tenant have the
authority to do so.
3
<PAGE>
DRAFT
IN WITNESS WHEREOF, Bank and Tenant have duly executed this Agreement as of the
date first above written.
BANK: TENANT:
Union Bank of California, N.A.
---------------------------------------
a
-------------------------------------
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
-------------------------------------------------------------------------
4
<PAGE>
SILICON VALLEY BANK 3003 TASMAN DRIVE SANTA CLARA, CA 95054, U.S.A.
INTERNATIONAL DIVISION SWIFT ADDRESS: SVBKUS6S
TELEX NO. 6732567
ANSWERBACK: SVB TF
EXHIBIT "A"
TO: SILICON VALLEY BANK DATE:
3003 TASMAN DRIVE RE: LETTER OF CREDIT ISSUED BY:
SANTA CLARA, CA 94054 SILICON VALLEY BANK
ATTN: INTERNATIONAL DIVISION LETTER OF CREDIT NO. SVB98IS1124
STANDBY LETTER OF CREDITS AVAILABLE AMOUNT:
Gentlemen:
For value received, the undersigned Beneficiary hereby irrevocably transfers to:
(Name of Transferee)
(Address)
All rights of the undersigned Beneficiary to draw under the above Letter of
Credit up to its Available Amount as shown above as of the date of this
transfer.
By this transfer, all rights of the undersigned Beneficiary in such Letter of
Credit are transferred to the transferee. Transferee shall have the sole rights
as beneficiary thereof, including sole rights relating to any amendments,
whether increases or extensions or other amendments, and whether now existing or
hereafter made. All amendments are to be advised direct to the Transferee
without necessity of any consent of or notice to the undersigned Beneficiary.
The original of such Letter of Credit is returned herewith, and we ask you to
endorse the transfer on the reverse thereof, and forward it direct to the
Transferee with your customary notice of transfer.
Yours Very Truly
Signature Authenticated 650 East Fairchild Associates, L.P.
------------------------------ -----------------------------------
(Bank) Signature of Beneficiary
------------------------------
Authorized Signature
Fax No: (408) 496-2419 Phone No: (408) 654-7400 main line
(408) 654-7736
(Member FDIC)
<PAGE>
SILICON VALLEY BANK 3003 TASMAN DRIVE SANTA CLARA, CA 95054, U.S.A.
INTERNATIONAL DIVISION SWIFT ADDRESS: SVBKUS6S
TELEX NO. 6732567
ANSWERBACK: SVB TF
IRREVOCABLE STANDBY LETTER OF CREDIT NO. SVB XXX
DATED OCTOBER 23, 1998
SPECIAL CONDITION:
IT IS A CONDITION OF THIS LETTER OF CREDIT THAT IT WILL BE DEEMED AUTOMATICALLY
RENEWED WITHOUT AN AMENDMENT OF A PERIOD OF OWE YEAR FROM THE CURRENT OR EACH
FUTURE EXPIRATION DATE UNLESS AT LEAST THIRTY (30) DAYS PRIOR TO THE THEN
CURRENT EXPIRATION DATE WE NOTIFY THE BENEFICIARY IN WRITING BY OVERNIGHT
COURIER THAT THIS LETTER OF CREDIT WILL NOT BE RENEWED. FOLLOWING SUCH
NOTIFICATION AND PRIOR TO THE EXPIRATION DATE OF THIS LETTER OF CREDIT, YOU MAY
DRAW UPON THIS LETTER OF CREDIT BY PRESENTATION OF THIS ORIGINAL LETTER OF
CREDIT AND ITS AMENDMENTS IF ANY TOGETHER WITH THE SIGHT DRAFT(S) MENTIONED
ABOVE AND BENEFICIARY'S SIGNED AND DATED STATEMENT STATING THAT APPLICANT HAS
FAILED TO PROVIDE A SUBSTITUTE LETTER OF CREDIT IN THE SAME PRINCIPAL AMOUNT, OR
SUCH REDUCED PRINCIPAL AMOUNT AS MAY BE PERMITTED BY THE LEASE, AND ON THE SAME
TERMS AS THIS LETTER OF CREDIT, FROM AN ISSUER REASONABLY SATISFACTORY TO YOU.
IN NO EVENT SHALL THIS LETTER OF CREDIT BE AUTOMATICALLY EXTENDED BEYOND JANUARY
31, 2009.
ALL DOCUMENTS MUST BE SENT TO US VIA OVERNIGHT COURIER (I.E. FEDERAL EXPRESS,
UPS, DHL OR ANY OTHER EXPRESS COURIER) AT OUR ADDRESS:
SILICON VALLEY BANK, 3003 TASMAN DRIVE, SANTA CLARA, CA 95054
ATTN: INTERNATIONAL DIVISION.
WE HEREBY ENGAGE WITH DRAWERS AND /OR BONAFIDE HOLDERS THAT DRAFT(S) DRAWN UNDER
AND NEGOTIATED IN CONFORMANCE WITH THE TERMS AND CONDITIONS OF THE SUBJECT
CREDIT WILL BE DULY HONORED ON PRESENTATION.
THIS CREDIT IS SUBJECT TO THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY
CREDITS (1993 REVISION), INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION 500.
/s/ XXX /s/ XXX
---------------------------------- ----------------------------------
AUTHORIZED SIGNATURE AUTHORIZED SIGNATURE
Fax No: (408) 496-2419 Phone No: (408) 654-7400 main line
(408) 654-7736
(Member FDIC)
<PAGE>
SILICON VALLEY BANK 300 TASMAN DRIVE SANTA CLARA, CA 95054, U.S.A.
INTERNATIONAL DIVISION SWIFT ADDRESS: SVBKUS6S
TELEX NO. 6732567
ANSWERBACK: SVB TF
IRREVOCABLE STANDBY LETTER OF CREDIT NO. SVB XXX
DATED OCTOBER 23, 1998
Beneficiary: 605 EAST FAIRCHILD ASSOCIATES, L.P.
1068 EAST MEADOW CIRCLE
PALO ALTO, CA 94303
AS "LANDLORD"
APPLICANT: CALIPER TECHNOLOGIES CORPORATION
1275 CALIFORNIA AVENUE
PALO ALTO, CA 94304
AMOUNT: USD 1,000,000.00
(ONE MILLION AND 00/100 USDOLLARS)
EXPIRY DATE: OCTOBER 23, 1999
LOCATION: AT OUR COUNTER IN SANTA CLARA
DEAR SIR/MAM:
WE HEREBY ESTABLISH OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO. SVB98I81124 IN
YOUR FAVOR. AVAILABLE BY PAYMENT WITH SILICON VALLEY BANK, 3003 TASMAN DRIVE,
SANTA CLARA, CA 95054, ATTN: INT'L DEPT. OF BENEFICIARY'S DRAFT AT SIGHT DRAWN
ON US, AND ACCOMPANIED BY THE FOLLOWING DOCUMENTS:
1. THE ORIGINAL OF THIS LETTER OF CREDIT AND AMENDMENT IF ANY.
2. A LETTER SIGNED AND DATED BY AN AUTHORIZED REPRESENTATIVE OF THE
BENEFICIARY AS "LANDLORD" FOLLOWED BY ITS DESIGNATED TITLE STATING THE
FOLLOWING:
"THE TERMS AND CONDITIONS OF THE LEASE AUTHORIZE LANDLORD TO DRAW
DOWN ON THE LETTER OF CREDIT."
ADDITIONAL CONDITION:
1- PARTIAL DRAWINGS ARE ALLOWED.
2- THIS LETTER OF CREDIT IS TRANSFERABLE IN WHOLE BUT NOT IN PART ONLY UPON
OUR RECEIPT OF THE ATTACHED EXHIBIT "A" (TRANSFER FORM" DULY COMPLETED
AND EXECUTED BY THE BENEFICIARY TOGETHER WITH ORIGINAL LETTER OF CREDIT
AND AMENDMENTS IF ANY AND OUR CHARGE PAID (1/4% OF THE AMOUNT).
Page 1 of 2
Fax No: (408) 496-2419 Phone No: (408) 654-7400 main line
(408) 654-7736
(Member FDIC)