California-Milpitas- 461 South Milpitas Boulevard Lease - Adaptec Inc. and Roxio Inc.
DATE: MAY 5, 2001
LANDLORD: ADAPTEC, INC., A DELAWARE CORPORATION
TENANT: ROXIO, INC., A DELAWARE CORPORATION
PREMISES: 461 SOUTH MILPITAS BLVD. (BUILDING 5), MILPITAS, CALIFORNIA 95035
LEASE AGREEMENT
TABLE OF CONTENTS
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PARAGRAPH PAGE
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1. Fundamental Lease Provisions................................................................. 3
2. Premises..................................................................................... 4
3. Use.......................................................................................... 4
4. Rent......................................................................................... 4
5. Term......................................................................................... 5
6. Possession................................................................................... 5
7. Common Areas................................................................................. 5
8. Parking...................................................................................... 6
9. Expenses of Operation and Maintenance of the Complex......................................... 6
10. Acceptance and Surrender of Premises......................................................... 6
11. Alterations and Additions.................................................................... 6
12. Maintenance and Repair of the Premises....................................................... 7
13. Utility and Other Services................................................................... 7
14. Furnishings, Office Supplies and Equipment................................................... 7
15. Taxes........................................................................................ 7
16. Tenant's Insurance .......................................................................... 8
17. Landlord's Insurance; Waiver of Subrogation.................................................. 8
18. Indemnification; Exemption of Landlord from Liability........................................ 8
19. Compliance................................................................................... 9
20. Liens........................................................................................ 9
21. Assignment and Subletting.................................................................... 9
22. Subordination and Mortgages.................................................................. 10
23. Entry by Landlord............................................................................ 10
24. Tenant's Default............................................................................. 10
25. Landlord's Remedies and Rights............................................................... 10
26. Destruction.................................................................................. 11
27. Eminent Domain............................................................................... 11
28. Sale or Conveyance by Landlord............................................................... 12
29. Attornment to Lender or Third Party.......................................................... 12
30. Holding Over................................................................................. 12
31. Certificate of Estoppel...................................................................... 12
32. Construction Changes......................................................................... 12
33. Right of Landlord to Perform................................................................. 12
34. Attorney's Fees.............................................................................. 12
35. Waiver....................................................................................... 12
36. Notices...................................................................................... 12
37. Examination of Lease......................................................................... 13
38. Default by Landlord.......................................................................... 13
39. Corporate Authority.......................................................................... 13
40. Limitation of Liability...................................................................... 13
41. Brokers...................................................................................... 13
42. Signs........................................................................................ 13
43. Hazardous Materials.......................................................................... 13
44. Interest..................................................................................... 14
45. Use of Furniture............................................................................. 14
46. Early Termination Right...................................................................... 14
47. Miscellaneous and General Provisions......................................................... 14
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ADDENDA AND EXHIBITS
Exhibit A -- Floor Plan of the Premises
Exhibit B -- Site Plan of Complex and Building
Exhibit C-1 -- Tenant Improvements Space Plan
Exhibit C-2 -- Alterations and Additions
Exhibit D -- Building Common Areas
Exhibit E -- Premises Configuration for Surrender
Exhibit F -- Original Configuration of Furniture
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FULL SERVICE GROSS
LEASE AGREEMENT
DATED: May 5, 2001
LANDLORD: ADAPTEC, INC., a Delaware corporation
TENANT: ROXIO, INC., a Delaware corporation
1. FUNDAMENTAL LEASE PROVISIONS.
A. PREMISES: The following premises ("Premises") in the building located on a
parcel of land in the County of Alameda, State of California, with an
address of 461 South Milpitas Boulevard, Milpitas, California 95035
("Building"): 42,283 rentable square feet as shown on EXHIBIT A attached
hereto. The Building is located within a complex that consists of multiple
buildings, together with related driveways, parking areas, and related
fixtures and improvements. For purposes of this Lease "the Complex" shall
consist of Buildings 5 and 6 as designated on EXHIBIT B.
B. LEASE TERM: 60 full calendar months from the Commencement Date.
C. COMMENCEMENT DATE: The commencement date of this Lease shall be May 5, 2001
(the "Commencement Date").
D. BASIC RENT: (Paragraph 4.A): Lease Year 1: $2.61/rsf/month
Lease Year 2: $2.69/rsf/month
Lease Year 3: $2.77/rsf/month
Lease Year 4: $2.85/rsf/month
Lease Year 5: $2.93/rsf/month
References herein to Lease Years shall be based on the Commencement Date.
E. ADDITIONAL RENT: Costs and expenses under this Lease. (Paragraph 4.D)
F. TENANT'S SHARE: N/A
G. PREPAID RENT: $110,358.63 for the first month of the Lease Term.
(Paragraph 4.G)
H. BASIC RENT ADJUSTMENT: 3% per rentable square foot per year, as set forth
in the rent schedule in Paragraph 1.D hereof.
I. SECURITY DEPOSIT: $110,358.63 (the "Security Deposit"). (Paragraph 4.F)
J. PERMITTED USE: general office use, research and development, light
manufacturing and sales. (Paragraph 3)
K. NUMBER OF PARKING SPACES: 4 spaces per 1,000 rentable square feet of the
Premises as to which the Commencement Date has occurred, in common with
other Complex occupants (170 spaces). (Paragraph 8)
L. ADDRESSES FOR NOTICES AND PAYMENT OF RENT (Paragraphs 4.E and 36):
To Landlord: Adaptec, Inc.
691 South Milpitas Boulevard, MS 20
Milpitas, CA 95035
Attn: Louie Bringino
Fax: (408) 957-6600
To Tenant: Roxio, Inc.
461 South Milpitas Boulevard
Milpitas, CA 95035
Attn: Spencer Clevenger
Fax: (408) 957-4544
M. TENANT'S BROKER: N/A. (Paragraph 41)
N. GUARANTORS: N/A.
O. ADDENDA AND EXHIBITS: The following addenda and exhibits are added hereto
and included as part of this Lease:
Exhibit A -- Floor Plan of the Premises
Exhibit B -- Site Plan of Complex and Building
Exhibit C-1 -- Tenant Improvements Space Plan
Exhibit C-2 -- Alterations and Additions
Exhibit D -- Building Common Areas
Exhibit E -- Premises Configuration for Surrender
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Exhibit F -- Original Configuration of Furniture
Each reference in this Lease to any of the provisions in this Paragraph 1 shall
be construed to incorporate all of the terms of each such provision. In the
event of any conflict between this Paragraph 1 and the balance of the Lease, the
balance of the Lease shall control.
2. PREMISES.
A. PREMISES. Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord the Premises until the expiration of the Lease Term, at the Rent and
upon the terms and conditions hereinafter set forth. Said letting and hiring is
upon and subject to the terms, covenants and conditions hereinafter set forth,
and Tenant covenants as a material part of the consideration for this Lease to
perform and observe each and all of said terms, covenants and conditions.
B. IMPROVEMENTS. Prior to the Commencement Date of this Lease, Landlord agrees
to construct certain improvements (the "Tenant Improvements") as follows: (i)
Install new wall and door to separate room #5137 and room #5137A; (ii) create
pass through in wall separating room #5137A and room #5138; (iii) install two
(2) key locks in room #5176; (iv) secure the door in room #5187 to separate that
room from Suite 1; and (v) install new door in fire corridor prepared for a card
reader. The Tenant Improvements are described in the space plan attached as
EXHIBIT C-1 hereto and incorporated herein by reference, in accordance with such
specifications as may be set forth in such EXHIBIT C-1. The Tenant Improvements
shall be deemed substantially complete when Landlord notifies Tenant in writing
that the Tenant Improvements (if any) are substantially completed in accordance
with EXHIBIT C-1, subject only to "punch list" items that do not materially
diminish the usefulness of the Premises. The parties acknowledge that Landlord
has already installed three (3) 20AMP 120V circuits supported by a back-up
generator in room #5137A. Landlord shall have no obligation to make any
improvement or alteration to the Premises except as specifically and expressly
agreed to in writing by Landlord, and all other improvements or alterations
required by Tenant for Tenant's use and occupancy of the Premises (including
without limitation the installation of satellite dishes on the roof of the
Building) shall be Tenant's sole responsibility at Tenant's sole cost, in
accordance with Paragraph 11 and other applicable provisions of this Lease.
C. SQUARE FOOTAGE. Landlord and Tenant conclusively agree that the statements
of rentable square footage contained herein shall be deemed to be correct and
binding upon the parties for all purposes under this Lease, even if subsequent
measurements determine that one or more of such figures is incorrect.
3. USE. Tenant shall use the Premises only in conformance with applicable
governmental laws, regulations, rules and ordinances, including without
limitation the Americans With Disabilities Act of 1990 (the "ADA"), and solely
for the purpose specified in Paragraph 1.J and for no other purpose. Tenant
shall not do or permit its employees, agents, contractors or invitees (the
"Tenant's Related Parties") to do in or about the Premises or the Complex nor
bring or keep or permit Tenant's Related Parties to bring or keep in or about
the Premises or the Complex anything which is prohibited by or will in any way
increase the existing rate of (or otherwise affect) fire or any insurance
covering the Premises or the Complex or any part thereof, or any of its
contents, or will cause a cancellation of any insurance covering the Premises or
the Complex or any part thereof, or any of its contents. Tenant shall not do or
permit Tenant's Related Parties to do anything in, on or about the Premises or
the Complex which will in any way obstruct or interfere with the rights of other
tenants or occupants of the Complex or injure or annoy them, or use or allow the
Premises to be used for any improper, immoral, unlawful or objectionable
purpose, nor shall Tenant cause, maintain or permit Tenant's Related Parties to
create any nuisance in, on or about the Premises or the Complex. No sale by
auction shall be permitted on the Premises or in the Complex. Tenant shall not
place any loads upon the floors, walls, or ceiling, which endanger the
structure, or place any harmful fluids or other materials in the drainage system
of the Building therein, or overload existing electrical or other mechanical
systems. No waste materials or refuse shall be dumped upon or permitted to
remain upon any part of the Premises or outside of the Premises, except in trash
containers placed inside exterior enclosures designated by Landlord for that
purpose or inside of the Building proper where designated by Landlord. No
materials, supplies, equipment, finished products or semi-finished products, raw
materials or articles of any nature shall be stored upon or permitted to remain
outside the Premises. No loudspeaker or other device, system or apparatus which
can be heard outside the Premises shall be used in or at the Premises without
the prior written consent of Landlord. Tenant shall not commit any waste in or
upon the Premises. Tenant shall, upon receipt of copies thereof, comply with any
covenants, conditions, or restrictions ("CC&R's") affecting the Premises, as the
same may hereafter be amended from time to time, as well as any reasonable rules
and regulations promulgated by Landlord from time to time (the "Rules and
Regulations"). Landlord reserves the right to reasonably amend such Rules and
Regulations from time to time as Landlord may deem appropriate, which amendment
shall be binding upon Tenant upon delivery of a copy thereof to Tenant. Tenant
shall use commercially reasonable efforts to cause Tenant's Related Parties to
cooperate in observance of such Rules and Regulations, as the same may be
amended from time to time. The provisions of this Paragraph are for the benefit
of Landlord only and shall not be construed to be for the benefit of any tenant
or occupant of the Complex. Landlord shall not be responsible to Tenant for the
breach of the Rules and Regulations by any other tenant or occupant of the
Complex.
4. RENT
A. BASIC RENT. Tenant agrees to pay to Landlord the sum set forth in Paragraph
1.D hereof as "Basic Rent" based on the square footage of the Premises as to
which the Commencement Date has occurred, in lawful money of the United States
of America, without deduction, offset, prior notice, or demand, on the first day
of every calendar month of the Lease Term, and Landlord agrees to accept such
sum as Basic Rent for the Premises.
B. PARTIAL MONTHS. In the event that the Lease Term commences on a date other
than the first day of a calendar month as to any portion of the Premises, on the
applicable Commencement Date, Tenant shall pay to Landlord as Basic Rent for the
period from such Commencement Date to the first day of the first full calendar
month that proportion of the monthly Basic Rent hereunder which the number of
days between such Commencement Date and the first day of the next succeeding
calendar month bears to the actual number of days in such calendar month, and
such partial first month shall not be counted when computing the number of
months in the term of this Lease. In the event that the Lease Term is terminated
for any reason on a date other than the last day of a calendar month, on the
first day of the last calendar month of the Lease Term Tenant shall pay to
Landlord as Basic Rent for the period from said first day of said last calendar
month to and including the last day of the Lease Term that proportion of the
monthly Basic Rent hereunder which the number of days between said first day of
said last calendar month and the last day of the term hereof bears to the actual
number of days in such calendar month.
C. LATE CHARGE. Notwithstanding any other provision of this Lease, if Tenant
is delinquent in the payment of Rent as set forth in this Paragraph 4, or any
part thereof, Tenant agrees to pay Landlord, in addition to the delinquent Rent
due, a late charge for each Rent payment which is not received by Landlord
within ten (10) days after due date for such payment. Said late charge shall be
six percent (6%) of the delinquent Rent payment. Notwithstanding the foregoing,
Landlord shall waive such late charge one time only in the first twelve (12)
month period if Tenant pays any delinquent amount within five (5) days of
receipt of written notice of such delinquency by Landlord.
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D. ADDITIONAL RENT. Beginning with the Commencement Date, Tenant shall pay to
Landlord in addition to the Basic Rent and as Additional Rent all charges, costs
and expenses that Tenant is required to pay under this Lease, together with all
interest and penalties, costs and expenses including without limitation
attorneys' fees and legal expenses, that may accrue thereto in the event of
Tenant's failure to pay such amounts within applicable notice and cure periods,
and all damages, reasonable costs and expenses which Landlord may incur by
reason of default of Tenant or failure on Tenant's part to comply with the terms
of this Lease within applicable notice and cure periods. In the event of
nonpayment by Tenant of Additional Rent, Landlord shall have all the rights and
remedies with respect thereto as Landlord has for nonpayment of Basic Rent. The
Additional Rent due hereunder shall be paid to Landlord or Landlord's agent, at
the option of Landlord, directly to the designated recipient thereof, as and
when such amounts are due, in accordance with statements or invoices presented
to Tenant. The obligations of Tenant under this Paragraph shall survive the
expiration or other termination of this Lease.
E. PLACE OF PAYMENT OF RENT. All Basic Rent hereunder and all payments
hereunder for Additional Rent shall be paid to Landlord at the address of
Landlord as specified in Paragraph 1.L or such other place as Landlord may from
time to time designate in writing.
F. SECURITY DEPOSIT. Concurrently with Tenant's execution of this Lease,
Tenant shall deposit with Landlord the sum specified in Paragraph 1.I hereof as
the Security Deposit. Said sum shall be held by Landlord as a security deposit
for the faithful performance by Tenant of all of the terms, covenants, and
conditions of this Lease to be kept and performed by Tenant during the Lease
Term, and shall not in any event be used or applied by Tenant as "last month's
rent." If Tenant defaults with respect to any provision of this Lease after
expiration of applicable notice and cure periods, including, but not limited to,
the provisions relating to the payment of Rent, Landlord may (but shall not be
required to) use, apply or retain all or any part of the Security Deposit for
the payment of any amount which Landlord may spend by reason of Tenant's default
or to compensate Landlord for any other loss or damage which Landlord may suffer
by reason of Tenant's default. If any portion of said Security Deposit is so
used or applied, Tenant shall, within ten (10) days after written demand
therefor, deposit cash with Landlord in the amount sufficient to restore the
Security Deposit to its original amount. Tenant's failure to do so shall be a
material breach of this Lease. Landlord shall not be required to keep this
Security Deposit separate from its general funds, and Tenant shall not be
entitled to interest on such Security Deposit. Provided that Tenant is not in
default under this lease, the Security Deposit or any balance thereof shall be
returned to Tenant (or at Landlord's option, to the last assignee of Tenant's
interest hereunder) at the expiration of the Lease Term and after Tenant has
vacated the Premises. In the event of termination of Landlord's interest in this
Lease, Landlord shall transfer said Security Deposit to Landlord's successor in
interest whereupon Landlord shall be released from liability for the return of
such Security Deposit or any accounting therefor.
G. PREPAID RENT. Concurrently with Tenant's execution of this Lease, Tenant
shall pay to Landlord the sum specified in Paragraph 1.G as prepaid Rent for the
months designated therein.
H. DEFINITION OF RENT. The term "Rent" as used in this Lease shall mean Basic
Rent, Additional Rent, and any and all other sums, however designated, required
to be paid by Tenant under this Lease, whether payable to Landlord or third
parties.
I. ADDITIONAL RIGHTS OF LANDLORD. In addition to any late payment or interest
charges payable to Landlord hereunder and any other rights or remedies that
Landlord may have under this Lease or applicable law, all of which rights and
remedies shall be cumulative, Tenant, as a material part of the consideration
for this Lease, hereby agrees as follows:
(1) If Tenant makes any payment under this Lease by check and such check
is dishonored or otherwise returned unpaid to Landlord due to insufficient
funds, then Landlord, at its option, may require Tenant to make all future
payments under this Lease for the next twelve (12) month period by cashier's
check or wire transfer in accordance with wiring instructions given to Tenant by
Landlord.
(2) If Landlord fails to receive any payment that Tenant is required to
make under this Lease when due and Landlord thereafter, and prior to receiving
such payment, proceeds to serve a "3-Day Notice" or similar notice to Tenant as
permitted under Section 1162 of the California Code of Civil Procedure, then in
each such instance, and regardless of whether Tenant thereafter makes such
payment, Tenant shall pay to Landlord, upon demand, as Additional Rent, an
administrative charge in the amount of $250. Tenant acknowledges that such
charge constitutes liquidated damages and not a penalty and represents a
reasonable estimate of the additional administrative costs that Landlord will
incur in serving such notice.
(3) If Landlord fails to receive any payment that Tenant is required
to make under this Lease within ten (10) days after the due date for such
payment, and such delinquency occurs on three (3) separate occasions, then
Landlord, at its election, exercisable by one or more written notices to Tenant
at any time after the third such delinquency, may require any or all of the
following: (i) that all future payments of Basic Rent for the next twelve (12)
month period be paid three (3) months in advance; and (ii) that the Security
Deposit specified in Paragraph 1.H be immediately increased by one hundred
percent (100%), in which event Tenant shall, within ten (10) days after written
demand therefor, deposit such additional amount in cash with Landlord.
5. TERM. The term of this Lease (the "Lease Term") shall be for the period of
time specified in Paragraph 1.B (unless sooner terminated as provided for in
this Lease) and shall commence on the Commencement Date described in Paragraph
1.C.
6. POSSESSION. Landlord shall use commercially reasonable efforts to deliver
possession of the Premises to Tenant between May 5, 2001 and May 31, 2001. If
for any reason Landlord cannot deliver possession of any of the Premises to
Tenant on the date set forth in Paragraph 1.C or any other date, this Lease
shall not be void or voidable; no obligation of Tenant shall be affected
thereby; nor shall Landlord or Landlord's agents be liable to Tenant for any
loss or damage resulting therefrom. In the event, however, that Landlord fails
to deliver possession of the Premises on or before May 31, 2001 (which date
shall be extended by delays caused by Acts of God, strikes, war, utilities,
governmental bodies, weather, unavailable materials, and delays beyond
Landlord's control), the date that Tenant would otherwise commence paying Basic
Rent shall be delayed by one (1) day for each day delivery of the Premises is
delayed beyond such date.
7. COMMON AREAS. Subject to the terms and conditions of this Lease and any
Rules and Regulations, Tenant shall have the non-exclusive right (i) in common
with other occupants of the Complex, to use the access roads, parking areas, and
facilities provided and designated by Landlord for the general use and
convenience of the occupants of the Complex, and (ii) in common with the other
occupants of the Building, the bathrooms and the break room as shown on EXHIBIT
D hereto, which areas and facilities are referred to herein as "Common Areas".
This right shall terminate upon the termination of this Lease. Landlord reserves
the right from time to time to make changes in the shape, size, location, amount
and extent of Common Areas. Any rights to use other amenities including the
fitness center and cafeteria will be detailed under a separate license
agreement. Notwithstanding the foregoing, the occupants of Suite 4 (as Suite 4
is
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shown on Exhibit A hereto) and their invitees shall use only the bathrooms
located in Suite 4 and are prohibited from using the bathrooms adjacent to
Suite 2 (as Suite 2 is shown on Exhibit A hereto).
8. PARKING. Subject to the terms and conditions of this Lease and subject to
the Rules and Regulations, Tenant shall have the non-exclusive right, in common
with other tenants or occupants of the Complex, to use the number of spaces set
forth in Paragraph 1.K in the common parking areas of the Complex. Landlord
shall have the right (but not the obligation), at Landlord's sole discretion, to
designate the specific location of Tenant's parking spaces within the common
parking areas of the Complex that is reasonably proximate to the Building.
Landlord shall also have the right to implement a system of parking charges,
vouchers, fines or other parking control fees to be paid by Tenant and/or the
users of the Complex that is reasonably proximate to the Building, if so
required by any governmental agency having jurisdiction over the Complex or if
required to meet parking programs mandated by government.
Tenant shall not, at any time, park, or permit to be parked, any trucks or
vehicles adjacent to the loading areas so as to interfere in any way with the
use of such areas, nor shall Tenant at any time park, or permit the parking of
Tenant's trucks or other vehicles or the trucks and vehicles of Tenant's
suppliers or others, in any portion of the common area not designated by
Landlord for such use by Tenant. Tenant shall not park nor permit to be parked,
any inoperative vehicles or equipment on any portion of the parking area or
outside areas of the Complex, or use the same for storage. Tenant agrees to
assume responsibility for compliance by its employees with the parking
provisions contained herein.
If Tenant or its employees park in other than such designated parking
areas, then Landlord may charge Tenant, as Additional Rent, and Tenant agrees to
pay, ten ($10.00) dollars per day for each day or partial day each such vehicle
is parked in any area other than that designated. Tenant hereby authorizes
Landlord at Tenant's sole expense to tow away from the Complex any vehicle
belonging to Tenant or Tenant's employees parked in violation of these
provisions (after reasonable notice of such violation), or to attach violation
stickers or notices to such vehicles and levy reasonable fines for such
violations. Landlord shall have no obligation to Tenant to police the parking
areas or enforce any private or public parking restrictions.
9. EXPENSES OF OPERATION AND MAINTENANCE OF THE COMPLEX. Except for those
expenses required to be paid exclusively by Tenant as set forth in Paragraphs
12, 13 and 14 or elsewhere in this Lease (which shall be paid as Additional Rent
hereunder), Landlord shall pay all expenses of operation, maintenance and repair
of the Building, Complex and Common Areas.
10. ACCEPTANCE AND SURRENDER OF PREMISES. By taking possession hereunder,
Tenant accepts the Premises as being in good and sanitary order, condition and
repair and accepts the Building, the Premises and the Common Areas in their then
existing condition and without representation or warranty by Landlord as to its
condition, the use or occupancy which may be made thereof, or the precise square
footage of the Building or the Premises. Any exceptions to the foregoing must be
by written agreement executed by Landlord and Tenant. Subject to Paragraphs 26
(Destruction) and 27 (Eminent Domain), and in accordance with this Paragraph 10
and Paragraph 45 (Furniture), Tenant agrees on the last day of the Lease Term,
or on the sooner termination of this Lease, to surrender the Premises promptly
and peaceably to Landlord in the same condition as received (normal wear and
tear excepted), with all interior walls painted, or cleaned so that they appear
freshly painted, and repaired and replaced, if damaged; all floors cleaned and
waxed; all carpets cleaned and shampooed together with all alterations,
additions, and improvements which may have been made in, to, or on the Premises
(except movable trade fixtures installed at the expense of Tenant) and in the
configuration shown on EXHIBIT E hereto; provided, however, that Tenant shall
ascertain from Landlord within thirty (30) days before the end of the Lease Term
whether Landlord desires to have the Premises or any part or parts thereof
restored to their condition and configuration as when the Premises were
delivered to Tenant and if Landlord shall so desire (subject to the last
paragraph of Paragraph 11 hereof), then Tenant shall restore said Premises or
such part or parts thereof before the end of this Lease at Tenant's sole cost
and expense. Tenant, on or before the end of the Lease Term or sooner
termination of this Lease, shall remove all of Tenant's personal property and
trade fixtures from the Premises, and all property not so removed on or before
the end of the Lease Term or sooner termination of this Lease shall be deemed
abandoned by Tenant and title to same shall thereupon pass to Landlord without
compensation to Tenant. Landlord may, upon termination of this Lease, remove all
moveable furniture and equipment so abandoned by Tenant, at Tenant's sole cost,
and repair any damage caused by such removal at Tenant's sole cost. If the
Premises are not surrendered at the end of the term or sooner termination of
this Lease, Tenant shall indemnify Landlord against loss or liability resulting
from the delay by Tenant in so surrendering the Premises including, without
limitation, consequential damages to Landlord caused, in whole or in part, by
such delay. Nothing contained herein shall be construed as an extension of the
term hereof or as a consent of Landlord to any holding over by Tenant. The
voluntary or other surrender of this Lease or the Premises by Tenant or a mutual
cancellation of this Lease shall not work as a merger and, at the option of
Landlord, shall either terminate all or any existing subleases or operate as an
assignment to Landlord of all or any such subleases.
11. ALTERATIONS AND ADDITIONS. Tenant shall not make, or suffer to be made, any
alteration or addition to the Premises or the Building, or any part thereof, or
make any installations (of satellite dishes or other equipment or fixtures) on
the roof or other exterior portions of the Building, without the prior written
consent of Landlord; provided, however, Tenant may construct non-structural
alterations, additions and improvements in the Premises without Landlord's prior
approval, if the cost of any such project does not exceed Fifteen Thousand
Dollars ($15,000). Notwithstanding the foregoing, regardless of the cost of
alteration, no roof penetration or changing of locks will be allowed without
Landlord's prior written approval. All work with respect to any alteration,
addition or exterior installation shall be done in a good and workmanlike
manner, shall be under the supervision of a competent architect or competent
licensed structural engineer approved by Landlord, and shall be made in
accordance with all applicable laws, ordinances, codes and regulations related
thereto and the plans and specifications with respect thereto shall be approved
in writing by Landlord before commencement of work. Tenant shall use Landlord's
approved contractors for electrical, mechanical and general construction and
Landlord's approved vendors for information technology services so long as the
cost of such services provided by Landlord's contractors and/or vendors are
reasonable and customary. Landlord's approval of Tenant's plans and
specification shall create no responsibility or liability on the part of
Landlord for their completeness, design sufficiency or compliance with
governmental laws, rules or regulations.
Tenant agrees that it will not proceed to make such alterations, additions
or installations without having obtained consent from Landlord to do so, and
until ten (10) days after the receipt of such consent, in order that Landlord
may post appropriate notices to avoid any liability to contractors or material
suppliers for payment for Tenant's improvements. Tenant will at all times permit
such notices to be posted and to remain posted until the completion of work.
Tenant further covenants and agrees that any mechanic's lien filed against the
Premises or against the Complex for work claimed to have been done for, or
materials claimed to have been furnished to, Tenant will be discharged by
Tenant, by bond or otherwise, within twenty (20) days after Tenant's actual
notice of the imposition thereof, at the cost and expense of Tenant. Any
exceptions to the foregoing must be made in writing and executed by both
Landlord and Tenant. Upon completion of the work, Tenant shall file a Notice of
Completion as permitted by law in the Office of the County Recorder where the
Premises is located.
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Subject to Paragraph 45 (Furniture), any addition to, or alteration of, the
Premises, except moveable equipment and trade fixtures owned by Tenant, shall at
once become a part of the Premises and belong to Landlord. Upon request by
Tenant, Landlord shall inform Tenant at the time it consents to an alteration
whether it shall require such alteration to be removed at the end of the Lease
Term. Tenant shall retain title to all moveable equipment, satellite dishes and
trade fixtures placed in or upon the Premises or the Building by Tenant. All
heating, lighting, electrical, air conditioning, floor to ceiling partitioning,
carpeting, and floor installations made by Tenant, together with all property
that has become an integral part of the Premises, shall not be deemed trade
fixtures.
Tenant has requested Landlord's approval, and Landlord hereby grants such
approval, to Tenant's construction of the following alterations (the
"Alterations and Additions"): (i) the installation of new card readers on door
#5164, door #5104, and the door in the fire corridor; (ii) the installation of a
new door in room #5126 to the break room; (iii) the construction of three (3) VP
offices (including, the installation of HVAC for such offices) subject to
Landlord's reasonable approval of final plans therefor. The Alterations and
Additions are described in the space plan attached as EXHIBIT C-2 hereto and are
incorporated herein by reference. Tenant shall be required to remove, at the
expiration or earlier termination of the Lease, the VP offices and the HVAC for
such offices and restore such portion of the Premises to its original condition
as of the date the Premises were delivered to Tenant.
12. MAINTENANCE AND REPAIR OF THE PREMISES. So long as no Event of Default (as
defined in Paragraph 24) has occurred, which remains uncured beyond the
applicable cure period (if any) set forth in this Lease, Landlord shall, at its
sole cost and expense, maintain and repair the Premises and the Building, except
to the extent of any non insured damage (or deductible portion of any insured
damage) (subject to Paragraph 17(B)) that is the result of the negligence or
willful act of Tenant or Tenant's Related Parties, in which case Tenant shall be
liable for the repair at Tenant's sole cost and expense. Landlord shall have no
obligation to make repairs under this Paragraph (except for routine preventative
maintenance) until a reasonable time after receipt of written notice from Tenant
of the need for such repairs; provided, however, in cases involving an emergency
or a condition making the Premises uninhabitable, Landlord shall make such
repairs as soon as practicable after receipt of written notice from Tenant of
the need for such repairs stating the urgency therefor. In no event shall any
payments owed by Tenant under this Lease be abated on account of Landlord's
failure to make repairs under this Paragraph. Tenant hereby waives all statutory
rights to make repairs for or at the expense of Landlord.
13. UTILITY AND OTHER SERVICES PROVIDED BY LANDLORD.
A. SERVICES PROVIDED BY LANDLORD. Landlord shall provide, during the Lease
Term as to the applicable Premises, janitorial, electric, water, sewer, and HVAC
services to reasonable commercial standard for the Premises, including HVAC
between 6:00 a.m. and 8:00 p.m. on business days Monday through Friday and 8:00
a.m. through 5:00 p.m. Saturdays. The cost of such services shall be included in
Basic Rent except where expressly provided in this Lease. Landlord shall not be
liable for, and Tenant shall not be entitled to, any abatement or reduction of
Rent or other compensation by reason of any interruption or failure of utility
services to the Premises. Tenant may request HVAC service outside the standard
upon 24 hour written notice (48 hour if needed on Sunday); such excess HVAC
costs shall be billed to Tenant at a rate of $50.00 per hour, subject to
increase due to increases in the cost of electrical power necessary to provide
such excess HVAC. Tenant acknowledges that the server room #5137A is served only
by the building's main HVAC system and does not contain dedicated HVAC.
B. INFORMATION SYSTEMS SERVICES/TELECOMMUNICATIONS. Landlord shall have no
obligation under this Lease to provide any information or telecommunication
systems access or services. Tenant shall, however, when accompanied by an
authorized information services employee of Landlord, have access to the
telecom/data closet serving the Building for the purpose of installing and
maintaining Tenant's network and telecommunications services to the Premises.
C. ELECTRIC CHARGES. Tenant acknowledges that the estimate for the cost to
provide electricity to the Building used by Landlord in calculating Basic Rent
was twenty-seven cents ($0.27) per square foot per month. Landlord shall audit
annually the cost to provide electricity to the Building. Landlord shall
provide Tenant with a detailed statement showing the results of each such
audit within ninety (90) days of the calendar year end. Any cost to provide
electricity to the Building in excess of thirty-two cents ($0.32) per square
foot per month, shall be billed to Tenant. Such additional electrical charges
shall be considered Additional Rent pursuant to paragraph 4.D. of this Lease,
and Tenant shall pay such additional electrical charges within thirty (30)
days of being billed therefor.
14. SECURITY, OFFICE SUPPLIES AND EQUIPMENT.
A. SECURITY. During the Lease Term, Tenant shall be entitled to use all
existing security hardware, as currently located in the Premises (the "Security
System"). The Security System shall at all times remain the property of
Landlord, and may be used by Tenant during the Lease Term without additional
charge. Any new equipment installations with respect to the Security System will
constitute accessions and shall become part of the Security System and shall be
owned by Landlord. Such installations shall be paid for by Tenant and Tenant
shall use Landlord's normal installation vendor for all such service so long as
the cost of such services provided by Landlord's vendor are reasonable and
customary. Landlord shall be responsible for fire extinguisher maintenance,
storm water runoff filing, Premises door checks, monitoring cameras and alarms,
responding to alarm calls (to the same degree that Landlord currently responds
to alarm calls in areas occupied by its own employees and other Complex
tenants), and maintenance of badging system as well as issuance of new hire
badges. Landlord's Security Command Center will provide passport photo service
to Tenant's employees so long as it is offering that same service to Landlord's
employees.
B. OFFICE SUPPLIES AND EQUIPMENT. Tenant shall be responsible for supplying,
at Tenant's sole cost and expense, all office supplies, and equipment utilized
by Tenant in connection with its operations at the Premises, including without
limitation, coffee services, vending machines, computer equipment, fax machines,
postage meters, and all materials, supplies and services related to such
matters. On or prior to the Commencement Date, Landlord plans to terminate the
existing lease agreement for the three (3) leased copiers currently located in
the Premises. Tenant shall be responsible for entering into its own copier
leases. The cost of said copiers and supplies (including paper and drums) shall
be the sole responsibility of the Tenant, billed directly to Tenant and paid
directly to the vendor by Tenant.
15. TAXES.
A. TAXES PAYABLE BY LANDLORD. Landlord shall pay for any and all real property
taxes and assessments levied or imposed against the Premises, Building and/or
Complex.
B. TAXES PAYABLE BY TENANT. Tenant shall be liable for and shall pay before
delinquency, taxes levied against any personal property or trade fixtures placed
by Tenant in or about the Premises. If any such taxes on Tenant's personal
property or trade fixtures are levied against Landlord or Landlord's property or
if the assessed value of the Premises is increased by the inclusion therein of a
value placed upon such personal property or trade fixtures of Tenant and if
Landlord, after written notice to Tenant, pays the taxes based on such increased
assessment, which Landlord shall have the right to do regardless of the validity
thereof (but only under proper protest if requested by Tenant), Tenant shall
upon
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demand, as the case may be, repay to Landlord the taxes so levied against
Landlord, or the proportion of such taxes resulting from such increase in the
assessment; provided that in any such event Tenant shall have the right, in the
name of Landlord and with Landlord's full cooperation (but without cost to
Landlord), to bring suit in any court of competent jurisdiction to recover the
amount of any such taxes so paid under protest, and any amount so recovered
shall belong to Tenant.
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If the Tenant Improvements in the Premises, whether installed, and/or
paid for by Landlord or Tenant and whether or not affixed to the real
property so as to become a part thereof, are assessed for real property tax
purposes at a valuation higher than the valuation at which standard office
improvements in other space in the Complex are assessed, then the real
property taxes and assessments levied against Landlord or the Complex by
reason of such excess assessed valuation shall be deemed to be taxes levied
against personal property of Tenant and shall be paid by Tenant within thirty
(30) days after Landlord delivers a demand therefore. If the records of the
County Assessor are available and sufficiently detailed to serve as a basis
for determining whether said Tenant Improvements are assessed at a higher
valuation than standard office improvements in other space in the Complex,
such records shall be binding on both the Landlord and the Tenant. If the
records of the County Assessor are not available or sufficiently detailed to
serve as a basis for making said determination, the actual cost of
construction shall be used.
16. TENANT'S INSURANCE.
A. LIABILITY INSURANCE. Tenant, at Tenant's expense, agrees to obtain and
keep in force during the term of this Lease a policy of commercial general
liability insurance against any and all claims for personal injury, death,
property damage, or other liabilities related to the condition, use or
occupancy of the Premises or to Tenant's operations on the Premises. Such
insurance shall also contain a cross-liability clause. Notwithstanding such
cross-liability clause, Tenant's obligations pursuant to the indemnity set
forth in Paragraph 18 shall not be limited to the amount of any insurance
required of, or otherwise carried by, Tenant. Such liability insurance shall
be written with limits of not less than One Million Dollars ($1,000,000) per
occurrence and One Million Dollars ($1,000,000) annual aggregate.
Certificates evidencing such insurance shall be furnished to Landlord prior
to Tenant's occupancy of the Premises. The policy or policies affecting such
insurance shall name Landlord and the beneficiary or mortgagee of any deed of
trust or mortgage affecting the Premises as additional insureds, and shall
insure any liability of Landlord, contingent or otherwise; shall be issued by
an insurance company admitted to transact business in the State of California
having a rating of A or better in "Best's Insurance Guide"; and shall provide
that the insurance effected thereby shall not be canceled, except upon thirty
(30) days' prior written notice to Landlord. Said liability insurance shall
be primary and not contributing to any insurance available to Landlord, and
Landlord's insurance shall be in excess thereto. If, during the Lease Term,
in the considered opinion of Landlord's lender or insurance advisor, the
amount of insurance described in this Paragraph 16 is not adequate, Tenant
agrees to increase said coverage to such reasonable amount as Landlord's
lender or insurance advisor, shall deem adequate.
B. PROPERTY INSURANCE AND WORKER'S COMPENSATION. Tenant shall maintain a
policy or policies of fire and property damage insurance in "special perils"
form with a sprinkler leakage endorsement insuring the personal property,
inventory, trade fixtures and any improvements, alterations or additions made
by or on behalf of Tenant within the Premises in an amount not less than
ninety percent (90%) of the full replacement value thereof and not subject to
a coinsurance clause. Tenant shall also maintain a policy or policies of fire
and property damage insurance in "special perils" form with a sprinkler
leakage endorsement insuring the "Furniture" (as defined in Paragraph 45) in
an amount not less than one hundred percent (100%) of the full replacement
value thereof and not subject to a coinsurance clause (the "Furniture
Insurance Policy"). Tenant shall name Landlord as a loss payee on the
Furniture Insurance Policy. The proceeds from any of such policies shall be
used for the repair or replacement of such items so insured. Tenant shall
also maintain a policy or policies of worker's compensation insurance and any
other employee benefit insurance sufficient to comply with all laws.
Certificates evidencing all of the foregoing insurance shall be furnished to
Landlord prior to Tenant's occupancy of the Premises.
17. LANDLORD'S INSURANCE; WAIVER OF SUBROGATION.
A. LANDLORD'S PROPERTY INSURANCE. Landlord shall purchase and keep in
force, a policy or policies of casualty insurance covering loss or damage to
the Premises, Building and related Common Area improvements in the amount of
the full replacement value thereof, providing protection against those perils
covered by "special perils" insurance, and including such other casualty
endorsements as Landlord may elect. Landlord may also maintain at Landlord's
election, or if required by Landlord's lender from time to time, earthquake
and/or flood damage insurance, worker's compensation insurance, sprinkler
leakage insurance and rental income insurance. If the cost of such insurance
is increased due to Tenant's use of the Premises or the Complex, Tenant
agrees to pay to Landlord the full cost of such increase upon Tenant's
receipt of evidence of the same. Tenant shall have no interest in nor any
right to the proceeds of any insurance procured by Landlord as described in
this Paragraph 17.
B. WAIVER OF SUBROGATION. Notwithstanding anything to the contrary herein,
each party hereby releases the other party, and its partners, officers,
agents, employees and servants, from any and all claims, demands, loss,
expense, or injury to the Premises or to the furnishings, fixtures,
equipment, inventory, or other property in, about, or upon the Premises,
which is caused by or results from perils, events, or happenings which are
the subject of fire or other casualty insurance required to be carried
hereunder irrespective of any negligence on the part of the released party
which may have contributed to or caused such loss; subject to the following
limitations: (i) the party being released shall not be released from any
liability to the extent that such damages are not covered by the insurance
recovery obtained by the releasing party, and (ii) the party being released
shall be responsible for reimbursing the releasing party for any deductible
owed as a result of such damages. Each party shall use commercially
reasonable efforts to obtain, if needed, appropriate endorsements to its
policies of insurance with respect to the foregoing releases; provided,
however, that failure to obtain such endorsements shall not affect the
releases hereinabove given.
18. INDEMNIFICATION; EXEMPTION OF LANDLORD FROM LIABILITY.
A. INDEMNIFICATION. Subject to Section 2782 of the California Civil Code,
Tenant shall, at its sole cost and expense, indemnify, protect, defend (with
counsel acceptable to Landlord) and hold harmless Landlord, its partners,
shareholders, officers, directors, attorneys, agents, beneficiaries,
employees, affiliates, contractors, and related entities (collectively,
"Landlord's Related Parties") from and against all liabilities, obligations,
damages, penalties, claims, costs, charges and expenses, including reasonable
attorneys' fees, which may arise in any manner due to injury, death or
property loss caused by, arising out of or in connection with (i) Tenant's
use or occupancy of the Premises; (ii) the conduct of Tenant's business;
(iii) any negligent or willful act of Tenant or Tenant's partners,
shareholders, officers, directors, attorneys, agents, beneficiaries,
employees, affiliates, contractors, and related entities (collectively,
"Tenant's Related Parties"); and/or any breach by Tenant under this Lease;
provided, however, Tenant shall have no obligation to defend or indemnify
Landlord from claims which are caused by the sole negligence or willful
misconduct of Landlord or Landlord's Related Parties.
B. WAIVER OF RESPONSIBILITY. Except to the extent caused by the willful
misconduct or sole negligence of Landlord, Landlord and Landlord's Related
Parties shall not be liable for, and Tenant waives, all claims for loss or
damage to Tenant's business or damage or injury to person or property
sustained by Tenant or any person claiming by, through, or under Tenant,
resulting from any accident or occurrence in, on or about the Premises, or
any other part of the Complex, including, without limitation, claims for
loss, theft or damage resulting from: (i) any Furnishings or other equipment
or appurtenances being in disrepair; (ii) injury done or occasioned by wind
or weather; (iii) any defect in or failure to operate, for whatever reason,
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any Furnishings or other equipment or facilities in or about the Building;
(iv) broken glass; (v) any act, omission or negligence of other users or
occupants of the Building or the public; or (vi) any other cause of any
nature. To the maximum extent permitted by law, Tenant agrees to use and
occupy the Premises and the Furnishings at Tenant's own risk.
19. COMPLIANCE. Tenant, at its sole cost and expense, shall promptly comply
with all laws, statutes, ordinances and governmental rules, regulations or
requirements now or hereafter in effect; with the requirements of any board
of fire underwriters or other similar body now or hereafter constituted; and
with any direction or occupancy certificate issued pursuant to law by any
public officer; provided, however, that no such failure shall be deemed a
breach of these provisions if Tenant, immediately upon notification,
commences to remedy or rectify said failure. The judgment of any court of
competent jurisdiction or the admission by Tenant in any action against
Tenant, whether Landlord be a party thereto or not, that Tenant has violated
any such law, statute, ordinance or governmental rule, regulation,
requirement, direction or provision, shall be conclusive of that fact as
between Landlord and Tenant. This Paragraph shall not be interpreted as
requiring Tenant to make structural changes or structural improvements,
except to the extent such changes or improvements are required as a result of
Tenant's particular use or alteration of the Premises. Tenant shall, at its
sole cost and expense, comply with any and all requirements pertaining to
said Premises, of any insurance organization or company, necessary for the
maintenance of reasonable fire and public liability insurance covering the
Premises.
20. LIENS. Tenant shall keep the Premises and the Complex free from any
liens arising out of any work performed, materials furnished or obligation
incurred by Tenant. In the event that Tenant shall not, within thirty (30)
days following Tenant's actual notice of the imposition of such lien, cause
the same to be released of record, by bond or otherwise, 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 sums paid by Landlord for such purpose, and all expenses incurred by it
in connection therewith, shall be payable to Landlord by Tenant on demand
with interest thereon as specified in Paragraph 44 below.
21. ASSIGNMENT AND SUBLETTING.
A. RESTRICTION ON TRANSFERS. Tenant shall not assign, transfer, or
hypothecate the leasehold estate under this Lease, or any interest herein,
and shall not sublet the Premises, or any part thereof, or any right or
privilege appurtenant thereto (in any case, a "Transfer"), including, but not
limited to, the parking spaces to be used in connection with Tenant's
occupancy, or suffer any other person or entity to occupy or use the
Premises, or any portion thereof, without, in each case, the prior written
consent of Landlord, which consent will not be unreasonably withheld. Any
attempt to do so without such prior consent shall be wholly void and shall
constitute a default by Tenant under this Lease. In the event Landlord
consents to any Transfer, such consent shall not constitute a waiver of any
of the restrictions of this Paragraph 21 and the same shall apply to each
successive Transfer hereunder, if any. In no event shall Landlord's consent
to a Transfer affect the continuing primary liability of Tenant (which,
following assignment, shall be joint and several with the assignee), or
relieve Tenant of any of its obligations hereunder without an express written
release being given by Landlord. In the event that Landlord consents to a
Transfer under this Paragraph 21, such Transfer shall not be effective until
the assignee or sublessee shall assume all of the obligations of this Lease
on the part of Tenant to be performed or observed and whereby the assignee or
sublessee shall agree that the provisions contained in this Lease shall,
notwithstanding such Transfer, continue to be binding upon it with respect to
all future Transfers. Such assignment or sublease agreement shall be duly
executed and a fully executed copy thereof shall be delivered to Landlord,
and Landlord may collect Rent due hereunder directly from the assignee or
sublessee. Collection of Rent directly from an assignee or sublessee shall
not constitute a consent or a waiver of the necessity of consent to such
assignment or subletting, nor shall such collection constitute a recognition
of such assignee or sublessee as the Tenant hereunder or a release of Tenant
from the performance of all of its obligations hereunder.
B. PROFITS ON A TRANSFER. In the event that Tenant shall make a permitted
Transfer hereunder of all or any portion of the Premises (the "Transfer
Space"), then the following shall apply: Tenant shall pay Landlord monthly,
as Additional Rent, at the same time as the monthly installment of Basic Rent
required hereunder, one hundred percent (100%) of the "Profit" paid by the
transferee pursuant to the terms reserved in the agreement of Transfer,
assignment or sublease. For purposes of this paragraph, "Profit" shall mean
all rent and other amounts paid by the transferee to Tenant pursuant to the
terms of the Transfer (including, without limitation, any amounts paid by the
transferee for the right to use the Furniture, as defined in Paragraph 45)
which are in excess of the applicable Basic Rent and Additional Rent payable
under this Lease, after deducting and paying therefrom Tenant's reasonable
costs incurred with the Transfer, which shall be reasonably approved by
Landlord in writing, including, but not limited to, reasonable concessions,
reasonable attorneys' fees, reasonable broker's commissions and reasonable
tenant improvement allowances. As a condition to deducting such costs and
expenses, Tenant shall provide to Landlord evidence of the costs incurred and
any other information reasonably acceptable to Landlord to document such
expenditures. Tenant also shall furnish to Landlord upon request from
Landlord a complete statement setting forth in detail the computation of all
Profit derived and to be derived from such Transfer, such computation to be
made in accordance with generally accepted accounting principles. Tenant
agrees that Landlord or its authorized representatives shall be given access
at all reasonable times to the books, records and papers of Tenant relating
to the calculation of such Profit, and Landlord shall have the right to make
copies thereof.
C. RECAPTURE RIGHT. In lieu of giving or withholding consent pursuant to
Paragraph 21.A above, Landlord may, at its option, terminate this Lease (or
in the case of a proposed subletting or assignment of a portion of the
Premises, elect to terminate this Lease as respects that portion) upon thirty
(30) days' prior notice and release Tenant from any liability under this
Lease for Basic Rent and Additional Rent (as to that portion of the Premises
involved) accruing after the effective date of such termination ("Landlord's
Recapture Right"), subject to the following provisions. Landlord shall
exercise Landlord's Recapture Right, if at all, by giving Tenant notice of
such exercise not later than thirty (30) days after Tenant notifies Landlord
that Tenant has determined to assign the Lease or sublease the Premises
(whether or not Tenant has located a specific proposed transferee). If
Landlord fails to exercise Landlord's Recapture Right within said thirty (30)
day period, such right shall be of no further force or effect with respect to
the transaction in question.
In the event Landlord elects to terminate the Lease as set forth above,
Tenant may negate Landlord's election by withdrawing its request for
Landlord's consent to the Transfer by delivering notice thereof to Landlord
within five (5) days of Tenant's receipt of Landlord's notice. In
consideration for Landlord's right and election to terminate this Lease as
set forth above, Landlord will release Tenant from liability under this Lease
for future Basic Rent and Additional Rent with respect to the Premises (or
the portion of the Premises subject to the proposed Transfer) in connection
with the exercise of such right by Landlord. Landlord and Tenant agree and
acknowledge that Landlord's Recapture Right as set forth above is intended to
permit Landlord to maintain control over the leasing of space in the
Premises, to protect its interest in the Premises and to prevent such
interest from being impaired. Tenant understands the nature of this right and
has approved the recapture provisions in consideration for (i) Tenant's right
to negate Landlord's recapture election by withdrawing its request for a
Transfer and (ii) Landlord's agreement to release Tenant from liability for
future Rent due with respect to the recaptured portion of the Premises
pursuant to the provisions of this Section.
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D. PERMITTED TRANSFERS. Notwithstanding anything to the contrary herein,
Tenant may, without Landlord's prior written consent and without being
subject to the provisions of this Paragraph 21, sublet the Premises or assign
the Lease to (a) a currently existing entity controlling, controlled by or
under common control with Tenant, (b) a successor entity related to Tenant by
merger, consolidation, reorganization, or government action, or (c) a
purchaser of substantially all of Tenant's assets. A sale or transfer of
Tenant's capital stock shall not be deemed a Transfer.
22. SUBORDINATION AND MORTGAGES. If Landlord's title in the Premises or the
Complex is now or hereafter encumbered by the lien of any mortgage or deed of
trust to secure a loan from a lender (hereinafter referred to as a "Lender")
to Landlord, Tenant shall, at the request of Landlord or Lender, execute in
writing an agreement subordinating its rights under this Lease to the lien of
such mortgage or deed of trust, or, if so requested, agreeing that the lien
of Lender's mortgage or deed of trust shall be or remain subject and
subordinate to the rights of Tenant under this Lease. Notwithstanding any
such subordination, Tenant's possession under this Lease shall not be
disturbed if Tenant is not in default and so long as Tenant shall pay all
Rent and fully and faithfully observe and perform all of the provisions set
forth in this Lease within applicable notice and cure periods. Tenant
acknowledges that upon receipt from a lender of a "Demand to Pay Rent to
Party other than Landlord" under Section 2938 of the California Civil Code,
Tenant shall be required to pay all Rents to the Lender as they become due.
23. ENTRY BY LANDLORD. At all reasonable times after 24 hours prior notice
(except in emergencies, in which case no notice is required) Landlord shall
have, the right to enter the Premises to inspect them; to perform any
services to be provided by Landlord hereunder; to submit the Premises to
prospective purchasers, lenders, or tenants and to post "For Rent" or "For
Sale" or other signs relative to the same; to post notices of
nonresponsibility; and to alter, improve or repair the Premises, all without
abatement of Rent; and may erect scaffolding and other necessary structures
in or through the Premises where reasonably required by the character of the
work to be performed; provided, however that Landlord shall endeavor not to
unreasonably interfere with Tenant's use of the Premises and shall comply
with Tenant's reasonable security measures. For each of the foregoing
purposes, Landlord shall at all times have and retain a key with which to
unlock all of the doors in an emergency. Any entry to the Premises obtained
by Landlord by any of said means, or otherwise, shall not under any
circumstances be construed or deemed to be a forcible or unlawful entry into
or a detainer of the Premises or an eviction, actual or constructive, of
Tenant from the Premises or any portion thereof. Landlord shall also have the
right at any time to change the arrangement or location of entrances or
passageways, doors and doorways, corridors, elevators, stairs, toilets or
other public parts of the Complex and to change the name, number or
designation by which the Complex is commonly known, and none of the foregoing
shall be deemed an actual or constructive eviction of Tenant, or shall
entitle Tenant to any damages or reduction of Rent hereunder.
24. TENANT'S DEFAULT. The occurrence of any of the following shall be an
"Event of Default" (sometimes referred to herein as a "default") by Tenant
and a material breach of this Lease:
(1) Tenant shall fail to make any payment owed by Tenant under this
Lease, as and when due, and such failure is not cured within three (3) days
after Tenant receives written notice from Landlord specifying such failure.
At Landlord's election, any such notice shall be concurrent with, and not in
addition to, any such notice required under Section 1161 of the California
Code of Civil Procedures;
(2) Tenant shall fail to observe, keep or perform any of the terms,
covenants, agreements or conditions under this Lease that Tenant is obligated
to observe or perform, other than that described in subsection (1) above, for
a period of thirty (30) days after Tenant receives written notice from
Landlord of said failure; provided, however, that if the nature of Tenant's
default is such that more than thirty (30) days are reasonably required for
its cure, then Tenant shall not be deemed to be in default under this Lease
if Tenant shall commence the cure of such default within said thirty (30) day
period and diligently prosecute the same to completion within such time
period as is reasonably needed but not to exceed ninety (90) days from the
date of Landlord's notice. At Landlord's election, any such notice from
Landlord shall be concurrent with, and not in addition to, any notice
required under Section 1161 of the California Code of Civil Procedure;
(3) Tenant shall (i) make any general arrangement or assignment for the
benefit of creditors; (ii) become a "debtor" as defined in 11 U.S.C. Section
101 or any successor statute thereto (unless, in case of a petition filed
against Tenant, the same is dismissed within 60 days); (iii) suffer the
appointment of a trustee or receiver to take possession of substantially all
of Tenant's assets located at the Premises or of Tenant's interest in this
Lease, where possession is not restored to Tenant within 30 days; or (iv)
suffer the attachment, execution or other judicial seizure of substantially
all of Tenant's assets located at the Premises or of Tenant's interest in
this Lease, where such seizure is not discharged within 30 days. The
provisions of this subparagraph 24(3) shall also apply to any Guarantor of
this Lease. However, in the event that any provision of this subparagraph is
contrary to any applicable law, such provision shall be of no force or effect;
(4) Tenant shall vacate or abandon the Premises at any time during the
Lease Term (except that Tenant may vacate so long as it pays Rent, and
otherwise performs its obligations hereunder); or
(5) A default beyond applicable cure periods exists under any other
leases, licenses or occupancy agreements or arrangements between Landlord and
Tenant.
25. LANDLORD'S REMEDIES AND RIGHTS
A. TERMINATION OF LEASE. In case of an Event of Default by Tenant, Landlord
shall have the right, in addition to all other rights available to Landlord
under this Lease or now or hereafter permitted by law or in equity, to
terminate this Lease by providing Tenant with a notice of termination. Upon
termination, Landlord may recover any damages proximately caused by Tenant's
failure to perform under this Lease, or which are likely in the ordinary
course of business to be incurred, including any amount expended or to be
expended by Landlord in an effort to mitigate damages, as well as any other
damages which Landlord is entitled to recover under any statute now or
hereafter in effect. Landlord's damages include, without limitation, the
following:
(1) the worth at the time of the award of any unpaid Rent which had
been earned at the time of termination;
(2) the worth at the time of the award of the amount by which the
unpaid Rent which would have been earned after termination until the time of
the award exceeds the amount of the loss of such Rent that Tenant proves
could have been reasonably avoided; and
(3) the worth at the time of the award of the amount by which the
unpaid Rent for the balance of the term after the time of the award exceeds
the amount of the loss of such Rent that Tenant proves could have been
reasonably avoided.
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As used in subparagraphs (1) and (2) above, the "worth at the time of
award" shall be determined by allowing interest at the lesser of four percent
(4%) in excess of the reference rate (or prime rate) of the Bank of America,
N.T. & S.A., as it may be adjusted from time to time (the "Interest Rate")
and the maximum rate of interest permitted by applicable law. As used in
subparagraph (3), the "worth at the time of award" shall be determined by
discounting to present value such amount at one percent (1%) more than the
discount rate of the Federal Reserve Bank in San Francisco in effect at the
time of the award.
B. CONTINUATION OF LEASE. In accordance with California Civil Code Section
1951.4 (or any successor statute), Tenant acknowledges that in the event
Tenant has breached this Lease and abandoned the Premises, this Lease shall
continue in effect for so long as Landlord does not terminate Tenant's right
to possession, and Landlord may enforce all its rights and remedies under
this Lease, including the right to recover the Rent as it becomes due under
this Lease. Acts of maintenance or preservation or efforts to relet the
Premises or the appointment of a receiver upon initiative of Landlord to
protect Landlord's interest under this Lease shall not constitute a
termination of Tenant's right to possession.
C. RIGHT OF ENTRY. In case of an Event of Default by Tenant, Landlord shall
also have the right, after terminating this Lease, to enter the Premises and
remove all persons and personal property from the Premises, such property
being removed and stored in a public warehouse or elsewhere at Tenant's sole
cost and expense for at least thirty (30) days, and after such thirty (30)
day period, Landlord shall have the right to discard or otherwise dispose of
such property in accordance with California law. No removal by Landlord of
any persons or property in the Premises shall constitute an election to
terminate this Lease. Such an election to terminate may only be made by
Landlord in writing, or decreed by an arbitrator or a court competent
jurisdiction. Landlord's right of entry shall include the right to remodel
the Premises and relet the Premises. All costs incurred in such entry and
reletting shall be paid by Tenant. Rents collected by Landlord from any other
Tenant which occupies the Premises shall be offset against the amounts owed
to Landlord by Tenant shall be responsible for any amounts not recovered by
Landlord from any other tenant which occupies the Premises. Any payments made
by Tenant shall be credited to the amounts owed by Tenant in the sole order
and discretion of Landlord, irrespective of any designation or request by
Tenant. No entry by Landlord shall prevent Landlord from later terminating
this Lease by written notice.
D. REMEDIES. Tenant hereby waives, for itself and all persons claiming by,
through or under Tenant, all rights and privileges which it might have under
any present or future law to redeem the Premises or to continue this Lease
after being legally dispossessed or ejected from the Premises. The rights and
remedies of Landlord set forth in this Lease are not exclusive, and Landlord
may exercise any other right or remedy available to it under this Lease, at
law or in equity.
26. DESTRUCTION. In the event the Premises are destroyed in whole or in part
from any cause, except damage and destruction caused from vandalism or
accident for which Tenant is responsible for under Paragraph 12, Landlord
may, at its option:
(a) Rebuild or restore the Premises to their condition prior to the
damage or destruction, or
(b) Terminate this Lease, provided that the Premises is damaged to the
extent of twenty percent (20%) of the replacement cost thereof or to any
extent if (i) the damage is not covered by insurance and/or (ii) the damage
occurs during the last twelve (12) months of the Lease Term.
Landlord shall give Tenant notice in writing within thirty (30) days
from the destruction of the Premises of its election to either rebuild and
restore them, or to terminate this Lease. In the event Landlord agrees to
rebuild or restore the Premises, Landlord shall do so promptly at its
expense. Unless such damage is caused by Tenant or Tenant's Related Parties,
Tenant shall be entitled to a reduction in Rent while such repair is being
made in the proportion that the area of the Premises rendered untenantable by
such damage bears to the total area of the Premises. If Landlord initially
estimates that the rebuilding or restoration will exceed 180 days or if
Landlord does not complete the rebuilding or restoration within one hundred
eighty (180) days following the date of destruction (such period of time to
be extended for delays caused by the fault or neglect of Tenant or because of
Acts of God, acts of public agencies, labor disputes, strikes, fires, freight
embargoes, rainy or stormy weather, inability to obtain materials, supplies
or fuels, acts of contractors or subcontractors, or delay of the contractors
or subcontractors due to such causes or other contingencies beyond the
control of Landlord), then Tenant shall have the right to terminate this
Lease by giving thirty (30) days prior written notice to Landlord.
Notwithstanding anything herein to the contrary, Landlord's obligation to
rebuild or restore shall not include restoration of Tenant's trade fixtures,
equipment (including telecommunication equipment, whether or not located
within the Premises), merchandise, or any improvements, alterations, or
additions made by Tenant to the Premises, which Tenant shall forthwith
replace or fully repair at Tenant's sole cost and expense provided this Lease
is not cancelled according to the provisions above.
Unless this Lease is terminated pursuant to the foregoing provisions,
this Lease shall remain in full force and effect. Tenant hereby expressly
waives any statutory rights of termination which may arise by reason of any
partial or total destruction of the Premises.
In the event the damage or destruction of the Premises is caused by
Tenant or Tenant's Related Parties, Tenant shall pay the deductible portion
of Landlord's insurance proceeds.
27. EMINENT DOMAIN. If all or any part of the Premises shall be taken by any
public or quasi-public authority under the power of eminent domain or
conveyance in lieu thereof, this Lease shall terminate as to any portion of
the Premises so taken or conveyed on the date when title vests in the
condemnor, and Landlord shall be entitled to any and all payment, income,
rent, award, or any interest therein whatsoever which may be paid or made in
connection with such taking or conveyance, and Tenant shall have no claim
against Landlord or otherwise for the value or any unexpired term of this
Lease. Notwithstanding the foregoing Paragraph, any compensation specifically
awarded to Tenant for loss of business, Tenant's personal property, moving
cost or loss of goodwill, shall be and remain the property of Tenant.
If (i) any action or proceeding is commenced for such taking of the
Premises or any part thereof, or if Landlord is advised in writing by any
entity or body having the right or power of condemnation of its intention to
condemn the Premises or any portion thereof, or (ii) any of the foregoing
events occur with respect to the taking of any other space in the Complex, or
(iii) any such spaces are taken or conveyed in lieu of such taking, Landlord
shall have the right to terminate this Lease by giving Tenant written notice
thereof within sixty (60) days of the date of receipt of said written advice,
or commencement of said action or proceeding, taking or conveyance, which
termination shall take place as of the first to occur of the last day of the
calendar month next following the month in which such notice is given or the
date on which title to the Premises shall vest in the condemnor.
In the event of a partial taking or conveyance of the Premises, if the
portion of the Premises taken or conveyed is so substantial that the Tenant
can no longer reasonably conduct its business, Tenant shall have the
privilege of terminating this Lease within sixty (60) days from the date of
such taking or conveyance, upon written notice to Landlord of its intention
to do so, and upon giving of such notice this Lease shall terminate on the
last day of the calendar month
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next following the month in which such notice is given, upon payment by
Tenant of the Rent from the date of such taking or conveyance to the date of
termination.
If a portion of the Premises shall be taken by condemnation or
conveyance in lieu thereof and neither Landlord nor Tenant terminate this
Lease as provided herein, this Lease shall continue in full force and effect
as to the part of the Premises not so taken or conveyed, and the Rent herein
shall be apportioned as of the date of such taking or conveyance so that
thereafter the Rent to be paid by Tenant shall be in the ratio that the area
of the portion of the Premises not so taken or conveyed bears to the total
area of the Premises prior to such taking.
28. SALE OR CONVEYANCE BY LANDLORD. In the event of a sale or conveyance of
the Complex or any interest therein and transfer of the Security Deposit, by
any owner of the reversion then constituting Landlord, the transferor shall
thereby be released from any liability upon any of the terms, covenants or
conditions (express or implied) herein contained accruing after such transfer
in favor of Tenant, and in such event, insofar as such transfer is concerned,
Tenant agrees to look solely to the responsibility of the successor in
interest of such transferor in and to the Complex and this Lease. This Lease
shall not be affected by any such sale or conveyance, and Tenant agrees to
attorn to the successor in interest of such transferor.
29. ATTORNMENT TO LENDER OR THIRD PARTY. In the event the interest of
Landlord in the Complex is encumbered by mortgage or deed of trust, and such
interest is acquired by the lender or any third party through judicial
foreclosure, non-judicial foreclosure, or conveyance in lieu thereof, Tenant
hereby agrees to attorn to such purchaser or transferee and to recognize such
purchaser or transferee as the landlord under this Lease. In the event the
lien of the deed of trust securing the loan from a lender to Landlord is
prior and paramount to the Lease, this Lease shall nonetheless continue in
full force and effect for the remainder of the unexpired term hereof, at the
same rental herein reserved and upon all the other terms, conditions and
covenants herein contained.
30. HOLDING OVER. Any holding over by Tenant after expiration or other
termination of the Lease Term shall not constitute a renewal of the Lease or
give Tenant any rights to the Premises except as expressly provided in this
Lease. Tenant shall have no right to hold over whatsoever, except with the
prior written consent of Landlord, which consent may be withheld in
Landlord's sole discretion. Any holding over after the expiration or other
termination of the Lease Term, with the prior written consent of Landlord,
shall be construed to be a tenancy from month to month, on the same terms and
conditions herein specified insofar as applicable except that the monthly
Basic Rent shall be increased to an amount equal to one hundred fifty (150%)
percent of the monthly Basic Rent required during the last month of the Lease
Term.
31. CERTIFICATE OF ESTOPPEL. Tenant shall, within ten (10) business days
after written notice from Landlord, at any time, execute, acknowledge and
deliver to Landlord a statement in writing (i) certifying that this Lease is
unmodified and in full force and effect (or, if modified, stating the nature
of such modification and certifying that this Lease, as so modified, is in
full force and effect) and the date to which the rent and other charges are
paid in advance, if any; (ii) acknowledging that there are not, to Tenant's
knowledge, any uncured defaults on the part of Landlord hereunder, or
specifying such defaults, if any are claimed; and (iii) certifying to such
other matters concerning the Premises, the Lease or Tenant's tenancy as
Landlord may request. Any such statement may be conclusively relied upon by
any prospective purchaser or encumbrancer of the Premises. Tenant's failure
to deliver such statement within such time shall be conclusive upon Tenant
that this Lease is in full force and effect, without modification except as
may be represented by Landlord, that there are no uncured defaults in
Landlord's performance, and that not more than one month's Rent has been paid
in advance.
32. CONSTRUCTION CHANGES. Landlord does not guarantee the accuracy of any
drawings supplied to Tenant and verification of the accuracy of such drawings
rests with Tenant.
33. RIGHT OF LANDLORD TO PERFORM. All terms, covenants and conditions of
this Lease to be performed or observed by Tenant shall be performed or
observed by Tenant at Tenant's sole cost and expense and without any
reduction of Rent. If Tenant shall fail to pay Rent, required to be paid by
it hereunder, or shall fail to perform any other term or covenant required to
be performed by it hereunder, and such failure shall continue for three (3)
days after written notice thereof from Landlord (as to monetary defaults) or
thirty (30) days thereafter (as to non-monetary defaults) or such shorter
period of time as Landlord may reasonably determine in the case of emergency,
Landlord, without waiving or releasing Tenant from any obligation of Tenant
hereunder, may, but shall not be obligated to, make any such payment or
perform any such other term or covenant on Tenant's part to be performed. All
sums so paid by Landlord and all necessary costs of such performance by
Landlord together with interest thereon at the rate of interest specified in
Paragraph 44 below, shall be paid to Landlord on demand as Additional Rent,
and Landlord shall have (in addition to any other right or remedy of
Landlord) the same rights and remedies in the event of nonpayment by Tenant
of Rent hereunder.
34. ATTORNEYS' FEES. In the event that either Landlord or Tenant should
bring suit or become involved in any proceeding for the possession of the
Premises, for the recovery of any sum due under this Lease, or because of the
breach of any provision of this Lease, or for any other relief against the
other party hereunder, then all costs and expenses, including reasonable
attorneys' fees, incurred by the prevailing party therein shall be paid by
the other party, which obligation on the part of the other party shall be
deemed to have accrued on the date of the commencement of such action or
proceeding and shall be enforceable whether or not the action or proceeding
is prosecuted to judgment. Should Landlord be named as a defendant in any
suit brought against Tenant in connection with or arising out of Tenant's
occupancy hereunder, Tenant shall pay to Landlord its costs and expenses
incurred in such suit, including a reasonable attorneys' fees.
35. WAIVER. No covenant, term or condition or the breach thereof shall be
deemed waived, except by written consent of the party against whom the waiver
is claimed, and any waiver of the breach of any covenant, term or condition
shall not be deemed to be a waiver of any other covenant, term or condition
or any subsequent failure of the party failing to perform or observe the same
or any other such term, covenant or condition. Acceptance by Landlord of any
performance by Tenant after the time the same shall have become due shall not
constitute a waiver by Landlord of the breach or default of any covenant,
term or condition unless otherwise expressly agreed to by Landlord in writing.
36. NOTICES. All notices, demands, requests, advises or designations
(collectively "Notices") which may be or are required to be given by either
party to the other party hereunder shall be in writing. All Notices shall be
sufficiently given, made or delivered if (i) to Tenant, personally delivered
to the address set forth in Paragraph 1.L, or (ii) to Landlord, if personally
delivered to the address set forth in Paragraph 1.L. Notice shall also be
sufficiently given, made or delivered if sent by (a) postage prepaid United
States mail or overnight courier, addressed as specified in Paragraph 1.L, or
(b) facsimile transmission to the numbers specified in Paragraph 1L, with
confirming copy sent via United States mail. Each Notice referred to in this
Paragraph shall be deemed received on the date of the personal service or
facsimile transmission, the next business day after sending via overnight
courier, or on the third (3rd) business day after mailing thereof by United
States mail, postage prepaid, as the case may be. Either party may change its
address for delivery of notices by giving a notice as set forth herein.
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37. EXAMINATION OF LEASE. Submission of this instrument for examination or
signature by Tenant does not constitute a reservation of or option for a
lease, and this instrument is not effective as a lease or otherwise until its
execution and delivery by both Landlord and Tenant.
38. DEFAULT BY LANDLORD. Landlord shall not be in default unless Landlord
fails to perform obligations required of Landlord within a reasonable time,
but in no event earlier than thirty (30) days after written notice by Tenant
to Landlord and to the holder of any mortgage or deed of trust covering the
Premises whose name and address shall have previously been furnished to
Tenant in writing, specifying wherein Landlord has failed to perform such
obligations; provided, however, that if the nature of Landlord's obligations
is such that more than thirty (30) days are required for performance, then
Landlord shall not be in default if Landlord commences performance within
such thirty (30) day period and thereafter diligently prosecutes the same to
completion.
39. AUTHORITY. If Tenant is a corporation (or other entity) Tenant
represents and warrants that each individual executing this Lease on behalf
of said corporation (or other entity) is duly authorized to execute and
deliver this Lease on behalf of said corporation (or other entity) in
accordance with the by-laws of said corporation (or in accordance with the
agreement of such other entity) and that this Lease is binding upon said
corporation (or other entity) in accordance with its terms.
40. LIMITATION OF LIABILITY. In consideration of the benefits accruing
hereunder, Tenant and all successors and assigns covenant and agree that, in
the event of any actual or alleged failure, breach or default hereunder by
Landlord, the sole and exclusive remedy and source of recovery for any
judgment or award shall be against Landlord's interest in the Premises,
including insurance, condemnation, sale proceeds and income therefrom. Tenant
agrees that the foregoing covenant and agreement shall be applicable to any
covenant or agreement either expressly contained in this Lease or imposed by
statute or at common law.
41. BROKERS. Tenant warrants that it has had no dealings with any real
estate broker(s) or agent(s) in connection with the negotiation of this Lease
and that it knows of no real estate broker or agent who is entitled to a
commission in connection with this Lease. Tenant shall indemnify, defend,
protect and hold harmless Landlord and Landlord's agents, employees and
independent contractors from and against any and all liabilities, losses,
costs, expenses and damages (including attorneys' fees and costs) arising out
of any allegations or claim by any third party for a commission or fee in
connection with the negotiation of this Lease.
42. SIGNS. Landlord shall provide Tenant, at Landlord's expense, an
identification sign on the entry door to the Premises and shall allow
Landlord's existing monument sign on Milpitas Boulevard to be altered to
reflect Tenants name and logo at Tenant's expense. No sign, placard, picture,
advertisement, name or notice shall be inscribed, displayed or printed or
affixed on or to any part of the outside of the Premises or any exterior
windows of the Premises without the prior written consent of Landlord. If
Tenant does not obtain Landlord's prior written consent pursuant to the
preceding sentence, Landlord shall have the right to remove any such sign,
placard, picture, advertisement, name or notice without notice to and at the
expense of Tenant. All approved signs or lettering on outside doors shall be
printed, painted, affixed or inscribed at the expense of Tenant or by a
person approved of by Landlord and shall be removed and restored upon the
expiration or earlier termination of this Lease at Tenant's sole cost and
expense. Prior to the expiration or the earlier termination of the Lease,
Tenant shall restore Landlord's monument sign to the original "Adaptec, Inc."
sign or, at Landlord's option, pay Landlord Eight Thousand Dollars ($8,000)
for Landlord's cost in replacing Tenant's sign with the original "Adaptec,
Inc." sign or with a sign for another tenant comparable to the original
"Adaptec, Inc." sign.
Tenant shall not place anything or allow anything to be placed near the
glass of any window, door partition or wall, which may, in Landlord's
reasonable judgment, appear unsightly from outside the Premises.
43. HAZARDOUS MATERIALS.
A. DEFINITIONS. As used herein, the term "Hazardous Material" shall mean
any substance or material which has been determined by any state, federal, or
local government authority to be capable of posing a risk of injury to health
or safety including all of those materials and substances designated as
hazardous or toxic by the Environmental Protection Agency, the California
Water Quality Control Board, the Department of Labor, the California
Department of Industrial Relations, the Department of Transportation, the
Department of Agriculture, the Department of Human Services, the Food and
Drug Agency or any other governmental agency which regulates hazardous or
toxic substances in the environment. Without limiting the generality of the
foregoing, the term "Hazardous Material" shall include (i) all of those
materials and substances defined as "Toxic Materials" in Sections 66680
through 66685 of Title 22 of the California Administrative Code, Division 4,
Chapter 30, as the same shall be amended from time to time, or any other
federal, state or local statute, law, ordinance, resolution, code, rule,
regulation, order or decree regulating, relating to, or imposing liability or
standards of conduct concerning, any hazardous, toxic or dangerous waste,
substance or material as now or at any time hereafter in effect, (ii) any
substance, product, waste or other material of any nature whatsoever which
may give rise to liability under any statutory or common law theory based on
negligence, trespass, intentional tort, nuisance or strict liability or under
any reported decisions of a state or federal court, or (iii) petroleum or
crude oil other than petroleum and petroleum products which are contained
within regularly operated motor vehicles.
B. RESTRICTION ON USE. Except for small quantities of products used in
normal office environments (e.g., toner, white out), Tenant shall not cause
or permit any Hazardous Material to be used, generated, released, discharged,
transported to or from, stored, or disposed of in or about the Premises, the
Complex, or any other land or improvements in the vicinity of the Premises or
the Complex, without the prior written consent of Landlord, which consent may
be withheld in Landlord's sole and absolute discretion. Without limiting the
generality of the foregoing, Tenant, at its sole cost and expense, shall
comply with all laws relating to the storage, use, generation, release,
transportation and disposal of Hazardous Materials. If the presence of any
Hazardous Material on the Premises caused by Tenant or Tenant's Related
Parties results in contamination of the Premises, the Complex, or any nearby
premises, Tenant, at its sole cost and expense, shall promptly take all
actions necessary to return the same to the condition existing prior to such
contamination.
Tenant shall indemnify, defend, protect and hold harmless Landlord and
Landlord's agents, employees and independent contractors from and against any
and all claims, judgments, damages (including, without limitation, punitive
damages), losses, penalties, fines, demands, liabilities, encumbrances,
liens, costs and expenses of investigation and defense of any claim,
including, without limitation, reasonable attorneys' fees and disbursements
and consultants' fees, arising out of, relating to or resulting from any
storage, use, generation, discharge, treatment, transportation, release or
disposal by Tenant, or Tenant's Related Parties, of any Hazardous Material
upon, about, above or beneath the Premises, the Complex or any nearby
premises. This indemnity shall survive the expiration or earlier termination
of this Lease. Tenant shall not suffer any lien to be recorded against the
Premises or the Complex as a consequence of a Hazardous Material, including
any so-called state, federal or local "super fund" lien related to the "clean
up" of a Hazardous Material in or about the Premises, the Complex or any
other premises.
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Under no circumstance shall Tenant be liable for, and Landlord shall
indemnify, defend, protect and hold harmless Tenant and Tenant's Related
Parties from and against any and all claims, judgments, damages (including,
without limitation, punitive damages), losses, penalties, fines, demands,
liabilities, encumbrances, liens, costs and expenses of investigation and
defense of any claim, including, without limitation, reasonable attorneys'
fees and disbursements and consultants' fees, arising out of, relating to or
resulting from any Hazardous Material present at any time on or about the
Complex, or the soil, air, improvements, groundwater or surface water
thereof, or the violation of any laws, orders or regulations, relating to any
such Hazardous Material, except to the extent that any of the foregoing is
caused by or negligently or willfully exacerbated by Tenant or Tenant's
Related Parties.
44. INTEREST. Any sum accruing to Landlord under the provisions of this
Lease which shall not be paid by Tenant within thirty (30) days after such
sum becomes due, shall bear interest from the expiration of such 30 day
period, until paid, at the Interest Rate, or the maximum rate then permitted
under applicable law, whichever is less.
45. USE OF FURNITURE.
A. FURNITURE. Commencing on the Commencement Date and terminating upon the
expiration or earlier termination of the Lease, Tenant may use, at no
additional rent, the furniture located in the Premises as of the Commencement
Date (the "Furniture"). Tenant shall maintain the Furniture in the same
condition as received, ordinary wear and tear excepted. Tenant shall be
responsible for insuring the Furniture from and after the Commencement Date
pursuant to Paragraph 16.B. In the event of a casualty, Tenant shall restore
the Furniture at Tenant's cost or, at Landlord's election, pay to Landlord
the insurance proceeds from the Furniture Insurance upon written demand by
Landlord. Tenant may, at its cost, reconfigure the Furniture as required upon
prior written notice to Landlord (the "Reconfiguration Notice"); provided,
however, Landlord may require that Tenant return the Furniture to its
original location and configuration on or before the expiration or earlier
termination of the Lease at Tenant's cost by written notice to Tenant of such
requirement within ten (10) days of the Reconfiguration Notice. The Furniture
is originally configured as shown on EXHIBIT F hereto. Tenant shall not
remove all or any portion of the Furniture from the Premises at any time.
Notwithstanding the foregoing, Tenant shall not reconfigure the Furniture in
any manner that will affect the splines of the Furniture without Landlord's
prior written consent, which consent shall not be unreasonably withheld. Any
additions made or attached to the Furniture (including, without limitation,
any additional cubicles purchased by Tenant) shall be at Tenant's sole cost,
and any such additions shall be deemed part of the Furniture hereunder and,
upon the expiration or earlier termination of the Lease, shall become the
property of Landlord and shall be surrendered in the Premises.
Notwithstanding the foregoing, Landlord may require that Tenant remove any
such additions upon the expiration or earlier termination of the Lease.
B. OWNERSHIP OF FREE STANDING FURNISHINGS. Notwithstanding the foregoing,
in the event Roxio, Inc., the originally named "Tenant", occupies the entire
Premises for the entire sixty (60)-month Lease Term, has not exercised the
early termination right set forth in Section 46 of the Lease, is not in
default under the Lease, and has not at any time subleased any portion of the
Premises or assigned any interest in the Lease, then those items of Furniture
which are free standing furnishings (the "Free Standing Furnishings")
including, without limitation, file cabinets, desk chairs and conference room
tables and chairs, shall become the property of Tenant and shall be removed
by Tenant from the Premises at the expiration of the Lease Term.
Notwithstanding the foregoing, all light fixtures and cubicle partitions in
the Premises and all items of Furniture attached thereto including, without
limitation, all tack boards, shelves, flipper units, work surfaces and paper
management systems shall not be considered Free Standing Furnishings and
shall at all times remain the property of Landlord.
C. PERSONAL RIGHTS. Tenant's rights to use the Furniture pursuant to this
Paragraph 45 shall be personal to Roxio, Inc. and shall not be assigned or
transferred, nor shall the Furniture be subleased, without the prior written
consent of Landlord, which consent shall not be unreasonably withheld. In
lieu of giving or withholding such consent, Landlord may elect to terminate
Tenant's rights hereunder to use the Furniture by written notice to Tenant,
in which event Landlord shall promptly remove the Furniture from the Premises
at Landlord's cost.
46. EARLY TERMINATION RIGHT. Tenant shall have the one (1) time right to
terminate this Lease effective on May 1, 2002 (the "Early Termination Date")
upon written notice to Landlord at least one hundred twenty (120) days prior
to the Early Termination Date. If Tenant fails to timely deliver such
termination notice to Landlord as provided in the immediately preceding
sentence, then Tenant shall be deemed to have waived such right to terminate
the Lease early. Such early termination right shall be personal to Roxio,
Inc. and may not be assigned or transferred.
47. MISCELLANEOUS AND GENERAL PROVISIONS.
A. USE OF BUILDING NAME. Tenant shall not, without the written consent of
Landlord, use the name of the Building for any purpose other than as the
address of the business conducted by Tenant in the Premises.
B. GOVERNING LAW; PARTIAL INVALIDITY. This Lease shall in all respects be
governed by and construed in accordance with the laws of the State of
California. If any provision of this Lease shall be invalid, unenforceable or
ineffective for any reason whatsoever, all other provisions hereof shall be
and remain in full force and effect.
C. DEFINITIONS; BINDING EFFECT. The term "Premises" includes the space
leased hereby and any improvements now or hereafter installed therein or
attached thereto. The term "Landlord" or any pronoun used in place thereof
includes the plural as well as the singular and the successors and assigns of
Landlord. The term "Tenant" or any pronoun used in place thereof includes the
plural as well as the singular and individuals, firms, associations,
partnerships and corporations, and their and each of their respective heirs,
executors, administrators, successors and permitted assigns, according to the
context hereof, and the provisions of this Lease shall inure to the benefit
of and bind such heirs, executors, administrators, successors and permitted
assigns.
The term "person" includes the plural as well as the singular and
individuals, firms, associations, partnerships and corporations. Words used
in any gender include other genders. If there be more than one Tenant, the
obligations of Tenant hereunder are joint and several. The paragraph headings
of this Lease are for convenience of reference only and shall have no effect
upon the construction or interpretation of any provision hereof.
D. TIME OF THE ESSENCE. Time is of the essence of this Lease and of each
and all of its provisions.
E. QUITCLAIM OF LEASEHOLD INTEREST. At the expiration or earlier
termination of this Lease, Tenant shall execute, acknowledge and deliver to
Landlord, within ten (10) days after written demand from Landlord to Tenant,
any quitclaim deed or other document required by any reputable title company
licensed to operate in the State of California, to remove the cloud or
encumbrance created by this Lease from the real property of which the
Premises are a part.
F. ENTIRE AGREEMENT. All exhibits, riders and attachments referenced in
this Lease are hereby incorporated into this Lease. This instrument along
with any exhibits, riders and attachments hereto constitutes the entire
agreement between Landlord and Tenant relative to the lease of the Premises
and this agreement and the exhibits and attachments may be altered, amended
or revoked only by an instrument in writing signed by both Landlord and
Tenant. Landlord
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and Tenant hereby acknowledge that neither party has relied upon any
representation concerning the Premises that is not set forth in this Lease
and agree that all prior or contemporaneous oral agreements between and among
themselves and their agents or representatives relative to the leasing of the
Premises are merged in or revoked by this agreement.
G. RECORDING OF LEASE. Neither Landlord nor Tenant shall record this Lease
or short form memorandum hereof without the consent of the other.
H. AMENDMENTS REQUIRED BY LENDER. Tenant further agrees to execute any
amendments required by a lender to enable Landlord to obtain financing, so
long as Tenant's rights, obligations or use of the Premises hereunder are not
materially affected.
I. AIR RIGHTS RETAINED BY LANDLORD. Tenant covenants and agrees that no
diminution or shutting off of light, air or view by any structure which may
be hereafter erected (whether or not by Landlord) shall in any way affect
this Lease, entitle Tenant to any reduction of Rent hereunder or result in
any liability of Landlord to Tenant.
J. APPROVALS. Whenever this Lease requires an approval, consent,
determination, selection or judgment by either Landlord or Tenant, unless
another standard is expressly set forth, such approval, consent,
determination, selection or judgment and any conditions imposed thereby shall
be reasonable and shall not be unreasonably withheld or delayed.
K. LIMITATION OF LIABILITY. Notwithstanding any provision in this Lease to
the contrary, neither party shall be liable to the other nor to any other
person, firm or entity for incidental, indirect, special, consequential,
punitive or reliance damages of any nature whatsoever regardless of the
foreseeability thereof (including, but not limited to, any claim from any
client, customer, third party or patron for loss of services, lost profits or
lost revenues) arising under or in connection with the this Lease, or arising
out of any act or omission by either Landlord or Tenant, or their respective
employees, consultants, servants or agents whether based on breach of
contract, breach of warranty, negligence or any other theory of liability.
L. CROSS DEFAULT. Concurrently herewith, Landlord and Tenant are executing
that certain Longmont License with respect to premises located at 1951 South
Fordham Street, Longmont Colorado (the "Longmont License"). Tenant hereby
agrees that a default by Tenant as "Licensee" under the terms of the Longmont
License (including without limitation, a default under Section 28 of the
Longmont License regarding non-solicitation, whether or not the term of the
Longmont License has expired) shall be a default under this Lease entitling
Landlord immediately to its remedies hereunder.
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IN WITNESS WHEREOF, Landlord and Tenant have executed and delivered this
Lease as of the date first above written.
<TABLE>
<S><C>
LANDLORD TENANT
ADAPTEC, INC. ROXIO, INC.
By: /s/ Robert W. Kraiss By: /s/ Tom Shea
-------------------------------------------------- ------------------------------------
Name: Robert W. Kraiss Name: Tom Shea
Title: Director of Corporate Facilities & Real Estate Title: COO
---------------------------------
</TABLE>
[SIGNATURE PAGE TO LEASE AGREEMENT]