EXHIBIT 10.45
LANDLORD
San Xxxxx Investment Company
TENANT
Corsair Communications
DATED: January 10,1997
ADDRESS OF PREMISES:
0000 Xxxxxxxx Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx 00000
LEASE SUMMARY
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Parties:
Landlord: San Xxxxx Investment Company, a California limited
partnership
Tenant: Corsair Communications, a Delaware corporation
Premises: All that certain building located at 0000 Xxxxxxxx Xxxxxx,
Xxxx Xxxx, Xxxxxxxxxx, comprised of approximately 55,000
square feet together with adjacent parking and landscaping
improvements as depicted on Exhibit B attached hereto.
Floor Area: Approximately 55,000 square feet
Commencement
Date: June 1, 1997
Expiration Date: May 31, 2002
Rent: Initial monthly Base Rent of $132,000, to be increased in
accordance with Paragraph 3.1.
Security Deposit: $132,000
Xxxxxx's Share
of Building: 100%
Option(s)
to Extend: Two (2) options to extend the term for a period of two and
one-half (2-1/2) years each.
TABLE OF CONTENTS
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1. MASTER LEASE; PREMISES............................................... 1
2. TERM; DELIVERY OF POSSESSION; CONSENT OF LANDLORD'S LENDER........... 1
2.1. Term........................................................... 1
2.2. Tenant Currently in Possession................................. 2
2.3. Required Consents.............................................. 2
3. RENT................................................................. 2
3.1. Base Rent...................................................... 2
3.2. Manner of Payment.............................................. 2
3.3. Late Payment Charge............................................ 3
4. SECURITY DEPOSIT..................................................... 3
5. TAXES................................................................ 3
5.1. Tenant's Personal Property..................................... 3
5.2. Real Property Taxes............................................ 3
6. USE.................................................................. 4
6.1. Permitted Uses................................................. 5
6.2. Compliance with Law............................................ 5
6.3. Hazardous Materials............................................ 5
6.4. Restrictions on Use............................................ 7
7. DIRECT OPERATING EXPENSES............................................ 7
7.1. Landlord to Maintain and Control Outside Areas................. 7
7.2. Tenant to Pay.................................................. 7
7.3. Monthly Payments............................................... 9
8. MAINTENANCE AND REPAIRS.............................................. 9
8.1. Tenant's Obligations........................................... 9
8.2. Landlord's Obligations......................................... 10
9. ALTERATIONS.......................................................... 10
9.1. Landlord's Consent Required.................................... 10
9.2. Plans and Permits.............................................. 11
9.3. Construction Work Done by Tenant............................... 11
9.4. Roof Repairs................................................... 11
9.5. Title to Alterations........................................... 11
9.6. Removal of Alterations......................................... 12
10. MECHANICS' LIENS..................................................... 12
11. UTILITIES............................................................ 12
12. INDEMNITY............................................................ 12
13. WAIVER OF CLAIMS..................................................... 13
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14. INSURANCE............................................................ 13
14.1. Tenant's Liability Insurance.................................. 13
14.2. Landlord's Liability Insurance................................ 14
14.3. Property Insurance............................................ 14
14.4. Payment....................................................... 14
14.5. Insurance Policies............................................ 15
14.6. Waiver of Subrogation......................................... 15
14.7. No Limitation of Liability.................................... 15
14.8. Impounding of Premiums........................................ 15
15. DAMAGE OR DESTRUCTION................................................ 16
15.1. Partial Damage-Insured........................................ 16
15.2. Partial Damage-Uninsured...................................... 16
15.3. Total Destruction............................................. 16
15.4. Damage Near End of Term....................................... 17
15.5. Abatement of Rent............................................. 17
15.6. Waiver........................................................ 17
15.7. Tenant's Property............................................. 17
15.8. Notice of Damage.............................................. 17
15.9. Replacement Cost.............................................. 17
15.10. Damage and Destruction-Tenant's Termination Rights............ 18
16. CONDEMNATION......................................................... 18
16.1. Partial Taking................................................ 18
16.2. Total Taking.................................................. 18
16.3. Distribution of Award......................................... 19
16.4. Sale Under Threat of Condemnation............................. 19
16.5. Temporary Taking.............................................. 19
17. ASSIGNMENT AND SUBLETTING............................................ 19
17.1. Documentation................................................. 19
17.2. Terms and Conditions.......................................... 20
17.3. Partnership................................................... 20
17.4. Corporation................................................... 20
17.5. Landlord's Remedies........................................... 21
17.6. Encumbrances, Licenses and Concession Agreements.............. 21
18. DEFAULT BY TENANT.................................................... 21
18.1. Event of Default.............................................. 21
18.2. Remedies...................................................... 22
18.3. No Relief From Forfeiture After Default....................... 24
18.4. Landlord's Right to Perform Tenant's Obligations.............. 24
18.5. Interest on Past Due Obligations.............................. 24
18.6. Additional Rent............................................... 24
18.7. Remedies Not Exclusive........................................ 24
19. DEFAULT BY LANDLORD.................................................. 25
19.1. Cure Period................................................... 25
19.2. Mortgagee Protection.......................................... 25
20. ADVERTISEMENTS AND SIGNS............................................. 25
21. ENTRY BY LANDLORD.................................................... 25
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22. SUBORDINATION AND ATTORNMENT......................................... 26
22.1. Subordination................................................. 26
22.2. Attornment.................................................... 26
22.3. Cooperation Regarding Agreements.............................. 26
23. ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS....................... 27
24. NOTICES.............................................................. 27
25. WAIVER............................................................... 27
26. NO ACCORD AND SATISFACTION........................................... 27
27. ATTORNEY'S FEES...................................................... 28
28. SURRENDER............................................................ 28
29. HOLDING OVER......................................................... 28
30. TRANSFER OF PREMISES BY LANDLORD..................................... 29
31. RULES AND REGULATIONS OF BUILDING.................................... 29
31.1................................................................. 29
31.2................................................................. 29
31.3................................................................. 29
31.4................................................................. 29
31.5................................................................. 29
31.6................................................................. 29
31.7................................................................. 30
32. GENERAL PROVISIONS................................................... 30
32.1. Entire Agreement.............................................. 30
32.2. Time.......................................................... 30
32.3. Captions...................................................... 30
32.4. California Law................................................ 30
32.5. Gender; Singular and Plural................................... 30
32.6. Partial Invalidity............................................ 30
32.7. No Warranties................................................. 30
32.8. Joint and Several Liability................................... 31
32.9. Successors and Assigns........................................ 31
32.10. Rules and Regulations......................................... 31
32.11. Authority..................................................... 31
32.12. Memorandum of Lease........................................... 31
32.13. Merger........................................................ 31
32.14. Force Majeure................................................. 31
32.15. Real Estate Brokers........................................... 32
33. OPTION(S) TO EXTEND.................................................. 32
33.1. Options....................................................... 32
33.2. Extended Term Rent............................................ 32
34. CONSTRUCTION OF TENANT IMPROVEMENTS.................................. 33
34.1. Definitions................................................... 33
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34.2. Procedure and Time Schedules.................................. 34
34.3. Delivery of Possession........................................ 35
35. PARKING LOT LIGHTING................................................. 35
EXHIBITS
Exhibit "A" - Description of Land subject to the Master Lease
Exhibit "B" - Premises
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LEASE
This Lease is made and entered into as of January 10, 1997, by and between
San Xxxxx Investment Company, a California limited partnership ("Landlord"),
whose address is 0000 Xxxxxxxx Xxxx, Xxxxxxxx 0, Xxxxx 000, Xxxxx Xxxx,
Xxxxxxxxxx 00000, and Corsair Communications, Inc., a Delaware corporation
("Tenant"), whose present address is, and from and after the Commencement Date
(as defined below) shall be, the address of the premises, which is 0000 Xxxxxxxx
Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx 00000.
Landlord and Xxxxxx agree to the terms, covenants and conditions of this
Lease, as follows:
1. MASTER LEASE; PREMISES.
Landlord is the lessee under that certain Lease dated October 15, 1976 (the
"Master Lease"), by and between Landlord and The Board of Trustees of The Xxxxxx
Xxxxxxxx Junior University ("Stanford"), as lessor, by which Landlord leases the
parcel of land more particularly described on Exhibit "A" attached hereto for a
term expiring on October 31, 2027. This Lease shall be subject to the Master
Lease, but the terms and conditions of the Master Lease shall not be
incorporated herein, with the effect that the rights and obligations of Landlord
and Tenant with respect to each other and with respect to the premises described
below shall be set forth only in this Lease.
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord for
the term, at the rental, and upon all of the other terms, covenants and
conditions set forth herein, all of that certain building comprised of
approximately 55,000 square feet, together with adjacent parking and landscaping
improvements, located at 0000 Xxxxxxxx Xxxxxx, xxxxxxxx xx xxx Xxxx xx Xxxx
Xxxx, Xxxxxx of Santa Xxxxx, State of California, as shown on Exhibit "B"
attached hereto.
The building described above is hereafter called the "Building."
The portion of the Building, or the entire Building, as the case may be,
together with the related parking and landscaping improvements leased by
Landlord to Tenant is hereafter called the "premises."
The parcel of land described above, together with the Building and all
other improvements now or hereafter located thereon, is hereafter called the
"Project."
The portion of the parcel of land described above not covered by the
Building is hereafter called the "Outside Areas."
"Tenant's Share" as used in this Lease means that percentage of the total
number of square feet of leasable space in the Building which is contained in
the premises, which the parties agree is one hundred percent (100%).
2. TERM; DELIVERY OF POSSESSION; CONSENT OF LANDLORD'S LENDER
2.1. Term.
The term of this Lease shall be for sixty (60) months, commencing on June
1, 1997 (the "Commencement Date"), and ending on May 31, 2002 (tile "Expiration
Date"), unless sooner terminated pursuant to the provisions hereof. Tenant shall
have the right to extend the term of this Lease in accordance with the
provisions of Paragraph 33 below.
2.2. Tenant Currently in Possession.
Xxxxxx currently occupies the entire around floor of the Building pursuant
to that certain Sublease Agreement dated effective as March 31, 1995, by and
between Tenant, as sublessee, and Syntex (U.S.A.), Inc., a Delaware corporation
("Syntex"), as sublessor. The second floor of the Building is currently
occupied by Xerox Corporation pursuant to a
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Landlord 1 Tenant
sublease agreement by and between Xerox, as sublessee, and Syntex, as sublessor.
Syntex's leasehold interest in the premises and both subleases described above
expire on May 31, 1997. Tenant intends, effective as of the Commencement Date,
to sublease all or a portion of the second floor of the Building to Xerox
pursuant to a sublease agreement which shall be subject to this Lease. Tenant
shall submit to Landlord the documentation required by Paragraph 17 below to
obtain Landlord's consent to the proposed sublease between Tenant and Xerox.
Tenant acknowledges and agrees Landlord shall have not obligation to alter or
improve the premises under this Lease, and Tenant shall accept the premises in
its "as-is" condition.
2.3. Required Consents.
Landlord's obligations under this Lease shall be subject to the approval of
this Lease by Xxxxxxxx's lender, which holds a security interest in the Project,
and the approval of the lessor under the Master Lease. Stanford has waived its
right of first refusal applicable to this Lease under the Master Lease. Landlord
shall take all necessary actions to obtain such consents and waiver as soon as
possible following the execution of this Lease and shall notify Tenant whether
such parties have approved or disapproved this Lease and granted such waiver, as
applicable, on or before the date which is thirty (30) days following the date
hereof.
3. RENT.
3.1. Base Rent.
Tenant shall pay to Landlord for each calendar month of the term of this
Lease, monthly base rent (hereafter called "Base Rent"), in installments as
follows:
Applicable Period of
--------------------
Lease Term Monthly Base Rent
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06/01/97 - 05/31/98 $132,000
06/01/98 - 05/31/99 $135,960
06/01/99 - 05/31/00 $140,039
06/01/00 - 05/31/01 $144,240
06/01/01 - 05/31/02 $148,567
3.2. Manner of Payment.
Tenant shall pay to Landlord the rent calculated as set forth above
without deduction, offset, or abatement, and without prior notice or demand, in
advance on the first day of each calendar month of the term of this Lease. Rent
shall be payable in lawful money of the United States to Landlord at the address
stated in the preamble paragraph to this Lease or to such other places as
Landlord may from time to time designate in writing to Tenant reasonably in
advance. Tenant's obligation to pay rent for any partial month shall be prorated
on the basis of a thirty (30) day month.
3.3. Late Payment Charge.
If any installment of rent or any other sum due from Tenant is not received
by Landlord within five (5) days after the due date, Tenant shall pay to
Landlord an additional sum equal to five percent (5) of the amount overdue as a
late charge. The amount of the late charge shall represent liquidated damages
for, and a reasonable estimate of, Xxxxxxxx's administrative costs of
collection, the exact amount of which would be extremely difficult or
impractical to fix. Xxxxxxxx's acceptance of such late charge shall not excuse
any default by Tenant hereunder, and shall not preclude Landlord from pursuing
any other rights and remedies it may have relating to such default.
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Landlord 2 Tenant
4. SECURITY DEPOSIT.
Upon execution of this Lease, and on April 30, 1997, Tenant shall deposit
with Landlord in cash the sum of Sixty-Six Thousand Dollars ($66,000), for a
total payment of One Hundred Thirty-Two Thousand Dollars ($132,000) (the
"Deposit") as security for the faithful performance by Tenant of all of its
obligations hereunder. If Tenant fails to pay rent or any other sums due
hereunder, or otherwise defaults with respect to any provision of this Lease,
Landlord may use, apply, or retain all or any portion of the Deposit for the
payment of any rent or other sum in default, or to compensate Landlord for the
payment of any other sum which Landlord may become obligated to spend by reason
of Tenant's default, or to compensate Landlord for any expenditures, loss or
damage which Landlord may suffer thereby. If Landlord so uses or applies all or
any portion of the Deposit, Tenant shall, within fifteen (15) days after written
demand therefor, deposit with Landlord an amount in cash sufficient to restore
the Deposit to the full mount hereinabove stated. Landlord shall not be
required to keep the Deposit separate from its general funds. The Deposit, less
any portion thereof which Landlord is entitled to retain, shall be returned,
without payment of interest, to tenant within thirty (30) days after the later
of the expiration of the term hereof, or the date on which Tenant vacates the
premises.
5. TAXES.
5.1. Tenant's Personal Property.
Tenant shall pay directly to the charging authority prior to delinquency
all taxes assessed against and levied upon Xxxxxx's leasehold improvements,
trade fixtures, furnishings, equipment and all other personal property and
merchandise of Tenant situated in or about the premises.
5.2. Real Property Taxes.
(a) Tenant shall pay to Landlord Xxxxxx's Share of all Real Property
Taxes (as hereafter defined) levied with respect to the Project. Tenant shall
pay to Landlord all Real Property Taxes on or before the later of (1) five (5)
days prior to delinquency thereof, or (2) ten (10) days following the date on
which Xxxxxx receives a copy of the tax bill or other reasonable evidence of the
amount of Real Property Taxes due and payable by Tenant hereunder.
(b) The term "Real Property Taxes" as used herein shall mean (i) all
taxes, assessments, levies, and other charges of any kind or nature whatsoever,
general and special, foreseen and unforeseen (including all installments of
principal and interest required to pay for any general or special assessments
for public improvements, services, or benefits and any increases resulting from
reassessments caused by any change in ownership, new construction, or change in
valuation), now or hereafter imposed by any governmental or quasi-governmental
authority or special district having the direct or indirect power to tax or levy
assessments, which are levied or assessed against or with respect to (a) the
value, occupancy or use of the Project (as now constructed or as may at any time
hereinafter be constructed, altered, or otherwise changed, (b) the fixtures,
equipment, and other real or personal property of Landlord that are an integral
part of the Project, (c) the gross receipts and rentals from the Project, or (d)
the use of the Outside Areas, public utilities, or energy within the Project;
(ii) all charges, levies or fees imposed by reason of environmental regulation
or other governmental control of the Project; (iii) all new exercise,
transaction, sales, privilege or other taxes now or hereafter imposed upon
Landlord as a result of this Lease; and (iv) all reasonable costs and fees
(including reasonable attorneys' fees) incurred by Landlord in contesting in
good faith any Real Property Taxes and in negotiating with public authorities as
to any Real Property Taxes. If at any time during the lease term the taxation or
assessment of the Project prevailing as of the Commencement Date shall be
altered so that in lieu of or in addition to any Real Property Taxes described
above there shall be levied, assessed or imposed (whether by reason of a change
in the method of taxation or assessment, creation of a new tax or charge, or any
other cause) an alternate, substitute, or additional tax or charge (i) on the
value, use or occupancy of the Project, (ii) on or measured by the gross
receipts or rentals from the Project, or (iii) computed in any
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Landlord 3 Tenant
manner with respect to the operation of the Project, then any such tax or
charge, however designated, shall be included within the meaning of the term
"Real Property Taxes" for purposes of the Lease. Notwithstanding the foregoing,
the following shall not constitute Real Property Taxes for the purposes of this
Lease, and nothing contained herein shall be deemed to require Tenant to pay any
of the following: (i) any state, local, federal, personal or corporate income
tax measured by the income of Landlord; (ii) any estate or inheritance taxes;
(iii) any franchise, succession or transfer taxes; (iv) interest on taxes or
penalties resulting from Landlord's failure to pay taxes, except to the extent
such failure is due to Tenant's failure to pay such taxes to Landlord when
provided for under this Lease; or (v) any environmental tax, surcharge or other
fee affecting the premises due to Landlord's activities with respect to
Hazardous Materials (as defined in Paragraph 6.3(a) below), as opposed to
general, area-wide taxes or surcharges with respect to the remediation or
testing for Hazardous Materials. If assessments affecting the premises are
payable in installments and Landlord should prepay such assessments in advance
of the date such installments would become due, Tenant shall be solely
responsible for the portion of such assessments that would have normally come
due as an installment, unless consented to by Tenant in the writing.
(c) Tenant's liability to pay Real Property Taxes shall be prorated on
the basis of a 365-day year to account for any fractional portion of a fiscal
tax year included in the Lease term at the commencement or expiration of the
term.
(d) If Landlord's lender requires Landlord to pay any or all Real
Property Taxes into an impound account on a periodic basis during the term of
this Lease, Tenant, on notice from Landlord indicating this requirement, shall
pay a sum of money toward its liability under Paragraph 5.2 to Landlord on a
periodic basis in accordance with the lender's requirements.
6. USE.
6.1. Permitted Uses.
The premises shall be used and occupied only for the following purposes:
software research and development, and light manufacturing, assembly, general
office and shipping and receiving uses which are related to software research
and development, and for no other use or purpose. Landlord does not make any
warranty to Tenant regarding the suitability of the premises, or the suitability
of the Building electrical and other systems servicing the premises, for
Tenant's intended use thereof, and this Lease shall not be construed to imply
any such warranty.
6.2. Compliance with Law.
Tenant shall accept possession of the premises "as is" in their condition
existing as of the date of Landlord's delivery of possession thereof to Tenant
and Tenant acknowledges that neither Landlord nor its agents has made any
representations to Tenant regarding the condition of the premises. Landlord
shall have no obligation to make any alterations, improvements, or repairs to
the premises unless otherwise expressly required in this Lease. Tenant
acknowledges that its possession and use of the premises is subject to all
applicable laws, ordinances, codes, rules, orders, directions and regulations of
lawful governmental authority regulating the use or occupancy of the premises,
and all matters disclosed by any exhibits attached hereto (collectively called
"regulations"). Tenant, at Tenant's sole expense, shall promptly comply with all
such regulations as may now or hereafter be in effect relating to or affecting
the condition, use or occupancy of the premises, except that Tenant shall not be
required to make changes to structural elements of the premises except to the
extent the requirement to make such changes results from alterations voluntarily
made to the premises by Tenant or Tenant's specific use of the premises (as
opposed to office and industrial uses generally).
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Landlord 4 Tenant
6.3. Hazardous Materials.
(a) As used herein, "Hazardous Materials" means any substance or
material which is now or hereafter regulated by any local, state or federal
governmental entity due to its dangerous, hazardous, toxic, flammable or
corrosive characteristics.
(b) Tenant shall not cause or authorize any Hazardous Materials to be
released from or about the Project, including, without limitation, releases into
the groundwater, soils or air underlying, adjacent to or in the vicinity of the
Project. Tenant shall provide Landlord with at least five (5) days prior written
notice before bringing, using, or storing any Hazardous Materials on the
premises. Notwithstanding anything to the contrary herein, Tenant shall have the
right, without the prior notice obligation set forth in the preceding sentence,
to use on the premises Hazardous Materials which consist of office or janitorial
supplies of the kind and quantities commonly used in typical office operations
(collectively, "Permitted Hazardous Materials"), provided that such Permitted
Hazardous Materials are only used or stored in customary amounts and are at all
times used in compliance with applicable Laws (as defined in Paragraph 6.3(c)
below).
(c) Tenant, at its sole expense shall comply with all applicable
governmental rules, regulations, codes, ordinances, statutes, directives and
other requirements (collectively, "Laws") respecting Hazardous Materials in
connection with Tenant's activities and the activities of its agents, employees,
contractors and invitees on or about the Project. Tenant, at its sole cost,
shall perform all investigations, clean-up and other response actions which may
be required of Tenant by any governmental authority in, on, or about the
Project.
(d) Tenant shall indemnify, protect, defend, (by legal counsel subject
to Landlord's approval, which shall not unreasonably be withheld) and hold
harmless Landlord from and against all costs (including, but not limited to,
environmental response costs), expenses, claims, judgments, losses, demands,
liabilities, causes of action, governmental directives, proceedings or hearings,
including Landlord's reasonable attorneys and experts' fees and costs, relating
to or arising in connection with the use, handling, generation, storage,
transportation, release or disposal of Hazardous Materials by handling,
generation, storage transportation, release or disposal of Hazardous Materials
by Tenant, its employees, agents, invitees or contractors, on, in, beneath,
about or from the Project, and/or relating to the breach of any of Tenant's
obligations under this Paragraph 6.3. Tenant shall reimburse Landlord of (i)
losses in or reductions to rental income, (ii) all costs of clean-up or other
alterations to the premises, the Building or the Project, and (iii) any
diminution in the fair market value of the Project caused by Tenant's use,
handling, generation, storage, transportation, release or disposal of Hazardous
Materials.
(e) Tenant shall immediately notify Landlord in writing upon becoming
aware of any environmental investigation, clean-up or other environmental
response action or any claim or action requested, demanded, instituted or to be
instituted by any person, including but not limited to a governmental entity,
relating to any release or migration of Hazardous Materials on, in, beneath, or
adjacent to the Project.
(f) Landlord shall have the right, but not the obligation, in its sole
discretion, to conduct any Hazardous Materials inspections of the premises, the
Building or the Project. Landlord shall give Tenant forty-eight (48) hours
advance written notice of any such inspection, except in the event of an
emergency situation. When conducting any such inspections, Landlord shall avoid
unreasonably disrupting Xxxxxx's activities. Tenant shall provide Landlord with
reasonable cooperation to facilitate any such inspection by Landlord, its agents
or representatives. Tenant shall not conduct any Hazardous Materials
investigation on or about the Project which includes any form of drilling or
subsurface penetration or any structural modifications without the prior written
consent of Landlord.
(g) Under no circumstances shall Tenant install, temporarily or
permanently, any underground or below-floor tanks, sumps or floor drains
relating to the use, storage or disposal of Hazardous Materials.
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Landlord 5 Tenant
(h) Upon Landlord's reasonable and good faith determination, after
consultation with Xxxxxxxx's environmental consultant, that Tenant may have
released Hazardous Materials on or about the Project, Tenant, at Tenant's sole
cost, shall engage the services of a qualified environmental engineering firm
reasonably acceptable to Landlord to determine whether any Hazardous Materials
have been released by Tenant on or about the Project. The manner and scope of
such examination shall be reasonably approved by both Tenant and Landlord. If
such examination discloses that Tenant did not cause any release of Hazardous
Materials on or about the Project, Landlord shall reimburse Tenant the cost of
such examination within ten (10) days. If any Hazardous Materials contamination
is discovered on or about the Project which has been caused by Tenant, Tenant
shall undertake all investigative and remedial action required to restore the
Project to a condition reasonably satisfactory to Landlord and any governmental
agency with jurisdiction over the Project. Tenant agrees that it shall be
reasonable for Landlord to withhold its approval of any investigative or
remedial actions undertaken by Tenant unless such actions are completed by
Tenant with the effect that Landlord shall not be subject to any losses, costs
or further liabilities with respect to any Hazardous Materials contamination
which was caused by Tenant.
(i) To the extent any of the other provisions of this Lease conflict
with the provisions of this Paragraph 6.3, the provisions of this Paragraph 6.3
shall be controlling. The obligations of Tenant under this Paragraph 6.3 shall
survive the expiration of the Lease term.
6.4. Restrictions on Use.
Tenant shall not use or permit the use of the premises in any manner that
will tend to create waste on the premises or constitute a nuisance to any other
occupant or user of the Building or any neighboring building. Tenant shall not
use any apparatus, machinery or other equipment in or about the premises that
may cause substantial noise or vibration or overload existing electrical
systems, or otherwise place any unusual loads upon the floors, walls, or
ceilings of the premises which may overload the premises or jeopardize the
structural integrity of the Building or any part thereof. Tenant shall not make
any penetrations of the roof or exterior of the Building without the prior
written approval of Landlord, which shall not be unreasonably withheld or
delayed. No materials or articles of any nature shall be stored upon any portion
of the Outside Areas unless located within an enclosure approved by Landlord.
7. DIRECT OPERATING EXPENSES.
7.1. Landlord to Maintain and Control Outside Areas.
Landlord shall maintain, in good condition and working order, the Outside
Areas, together with all facilities and improvements now or hereafter located
thereon, and together with all street improvements or other improvements
adjacent thereto as may be required from time to time by governmental authority.
The manner in which such areas shall be maintained and the expenditures therefor
shall be at the sole discretion of Landlord. Landlord shall at all times have
exclusive control of the Outside Areas and may at any time temporarily close any
part thereof, may exclude and restrain anyone from any part thereof (except the
bona fide customers, employees and invitees of Tenant who use the Outside Areas
in accordance with the rules and regulations that Landlord may from time to time
promulgate), and Landlord may change the configuration of the Outside Areas or
the location of facilities thereon so long as any such change by Landlord does
not unreasonably interfere with Xxxxxx's use of the premises. Notwithstanding
the foregoing, no such changes shall: (i) reduce parking available to Tenant or
Tenant's customers, (ii) materially interfere with Tenant's business or use of
the premises, (iii) unreasonably impair customer access to or visibility of the
premises, or (iv) in any way alter the first class, dignified and high-quality
character and standards of the Building existing as of the date of this Lease.
Landlord shall also be entitled to employ third parties to operate and maintain
all or any part of such areas on such terms and conditions as Landlord shall in
its sole discretion deem reasonable and proper. The surface parking facilities
shall be available for the automobiles of Tenant and Tenant's customers,
employees and invitees on a non-assigned, non-exclusive basis. In
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Landlord 6 Tenant
exercising any such rights, Landlord shall make a reasonable effort to minimize
any disruption of Xxxxxx's business.
7.2. Tenant to Pay.
Tenant shall pay Tenant's Share of such reasonable costs and expenses as
may be paid or incurred by Landlord in maintaining, operating and repairing the
Outside Areas and such adjacent areas referred to in Paragraph 7.1 (hereinafter
referred to as the "Direct Operating Expenses") during the term of this Lease.
The Direct Operating Expenses may include, without limitation, the cost of
labor, equipment rental, materials, supplies and services used or consumed in
maintaining, operating and repairing the Outside Areas and such adjacent areas
referred to in Paragraph 7.1, including without limitation, the following: (a)
landscaping maintenance and replacement; (b) cleaning and repairing concrete
walkways and patios; (c) sweeping and repairing paved parking areas; (d)
operating and maintaining the parking and landscaping pole lighting, if any; (e)
maintaining all directional and security signs; (f) furnishing water for
landscaping; (g) pest control service (exterior only); and (h) security patrol
service. The following shall not constitute Direct Operating Costs for the
purposes of this Lease, and nothing contained herein shall be deemed to require
Tenant to pay any of the following: (i) legal fees, brokerage commissions,
advertising costs and other related expenses incurred in connection with the
leasing of the Building; (ii) repairs, alterations, additions, improvements or
replacements made to rectify or correct any defect in the design, materials or
workmanship of the Outside Areas or to comply with any requirements of any
governmental authority in effect as of the date of this Lease; (iii) repairs,
improvements, alterations or expenditures of a capital nature with a cost
greater than Five Thousand Dollars ($5,000), except that Direct Operating
Expenses shall include the amortized portion of the cost of any repair,
improvement, alteration or expenditure of a capital nature with a cost greater
than Five Thousand Dollars ($5,000), which cost shall be amortized over a period
of ten (10) years; (iv) damage and repairs to the extent the costs thereof are
actually reimbursed or paid under any warranty or insurance policy carried by
Landlord in connection with the Building or Project; (vi) damage and repairs
necessitated by the negligence or willful misconduct of Landlord or Landlord's
employees, contractors or agents; (vii) executive salaries of Landlord; (viii)
salaries of service personnel to the extent that such service personnel perform
services not solely in connection with the management, operation, repair or
maintenance of the Outside Area; (ix) Landlord's general overheard expenses not
related to the Project; (x) payments of principal or interest on any mortgage or
other encumbrance including ground lease payments and points, commissions and
legal fees associated with financing; (xi) depreciation; (xii) legal fees,
accountants' fees and other expenses incurred in connection with disputes with
Tenant or other tenants or occupants of the Building or associated with the
enforcement of any leases or defense of Landlord's title to or interest in the
Building or any part thereof (provided such exclusion from Direct Operating
Expenses shall not affect Landlord's right to recover attorneys' fees under
Paragraph 27 below: (xiii) costs incurred due to violation by Landlord or of the
terms and conditions of this Lease; (xiv) charitable or political contributions;
(xv) any cost or expense related to the testing for, removal, transportation or
storage of Hazardous Materials from the Project, Building or premises, except to
the extent caused by Tenant or its employees, agents, contractors or
transferees, (xvi) interest, penalties or other costs arising out of Landlord's
failure to make timely payments of its obligations; (xvii) property management
fees of any property management firm in excess of three percent (3%) of the
gross revenues of the Building; and (xviii) costs incurred in advertising and
promotional activities for the Building. Landlord and Tenant acknowledge and
agree that the limitation set forth in subparagraph (iii) above shall be a
cumulative, annual limitation, with the effect that if Landlord expends less
than Five Thousand Dollars ($5,000) in any calendar year with respect to the
repair, improvement or alteration of any item which is a part of the Outside
Areas (e.g., the parking lot), then Landlord shall be entitled to add to the
fully reimbursable (without amortization) amount which may be expended on
repair, alteration or improvement of such item in subsequent years, the
difference between Five Thousand Dollars ($5,000) and the amount actually
expended for such item in any calendar year. Notwithstanding anything to the
contrary set forth above, any full replacement of any portion of the Outside
Areas (e.g., full replacement of the parking lot) shall be paid for by Landlord,
at its sole cost, and such full replacement costs shall not be charged to Tenant
as Direct Operating Expenses under this Lease, excepting only replacement of
landscape items, the costs of
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Landlord 7 Tenant
which shall be fully reimbursable to Landlord, subject to the limitations set
forth in subparagraph (iii) above.
7.3. Monthly Payments.
Tenant shall pay to Landlord on the first day of each calendar month,
commencing on the Commencement Date, an amount estimated by Landlord to be the
monthly installment of Xxxxxx's Share of the Direct Operating Expenses for the
next twelve (12) month period. Landlord estimates that such monthly installment
of Xxxxxx's Share of the Direct Operating Expenses for the initial twelve (12)
month period will be One Thousand One Hundred Fifty Dollars ($1,150). During
each succeeding year of the term of this Lease, Tenant shall pay to Landlord on
the first day of each calendar month thereof in advance a monthly installment of
Tenant's Share (to the nearest $5.00) of the actual Direct Operating Expenses
for the one (1) year period immediately prior thereto. Within sixty (60) days
following the end of each calendar year Landlord shall furnish Tenant a
statement, certified as true and correct by Landlord, stating in reasonable
detail the Direct Operating Expenses incurred during the calendar year and the
payments made by Tenant with respect to such period as set forth in this
Paragraph 7.3. If Xxxxxx's payments for said Direct Operating Expenses did not
equal the actual amount of said Direct Operating Expenses, Tenant shall pay to
Landlord the deficiency within thirty (30) days after receipt of such statement.
If said payments exceed the actual Direct Operating Expenses, Landlord shall
either credit the excess against payments next due to Landlord pursuant to this
Paragraph 7.3, or refund the amount of the overpayments to Tenant within thirty
(30) days of discovery thereof, in cash, as Landlord shall elect. Direct
Operating Expenses shall be prorated as of the Commencement Date and the
Expiration Date (or the date of any sooner termination of the term of this
Lease) to reflect the portion of the calendar year occurring within the lease
term.
8. MAINTENANCE AND REPAIRS.
8.1. Tenant's Obligations.
Except as provided in Paragraphs 8.2, 15, and 16, Tenant shall, at
Tenant's expense, keep in good and safe condition, order and repair the premises
and every part thereof, including without limitation, all plumbing, heating, air
conditioning, ventilating, fire sprinklers, electrical and lighting facilities,
systems, appliances, and equipment within the premises; and all fixtures,
interior walls, interior surfaces of exterior walls, floors, ceilings, windows,
doors, entrances, glass (including plate glass), and skylights located within
the premises, and the roof membrane, flashing and related improvements required
to keep the premises weathertight. Tenant shall, at Tenant's expense, maintain
in full force at all times during the term of this Lease a heating, ventilating
and air conditioning ("HVAC") systems preventive maintenance contract with a
qualified service company satisfactory to Landlord covering all HVAC systems
servicing the premises, which shall provide for and include, without limitation,
replacement of filters, oiling and lubricating of machinery, parts replacement,
adjustment of drive belts, oil changes, weatherproofing of all exposed HVAC
equipment and ducts, and other preventive maintenance; provided, however, that
Tenant shall have the benefit of all warranties available to Landlord regarding
the equipment in said systems. Said contract shall call for periodic servicing
no less than every sixty (60) days. Tenant shall also maintain continuously
throughout the lease term a service contract for the washing of all windows of
the premises (both interior and exterior surfaces) with a contractor approved by
Landlord which provides for periodic washing of all such windows sufficiently
often that such windows remain clean. Tenant shall furnish Landlord with copies
of all such service contracts, which shall provide that they may not be
cancelled or changed without at least thirty (30) days prior written notice to
Landlord. All repairs required to be made by Tenant shall be made promptly with
new materials of like kind and quality. If the repair work affects the
structural parts of the Building, or if the estimated cost of any item of repair
exceeds $5,000, then Tenant shall first obtain Landlord's written approval of
the scope of work, plans therefor, materials to be used, and the contractor.
Tenant hereby waives the benefit of any statute now or hereafter in effect which
would otherwise afford Tenant the right to make replacement at Landlord's
expense or to terminate this Lease because of Landlord's failure to keep the
premises in good condition, order and repair.
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Landlord 8 Tenant
Tenant specifically waives all rights it may have under Sections 1932(1), 1941,
and 1942 of the California Civil Code, and any similar or successor statute or
law. In no event shall Tenant's obligation to repair under this Paragraph 8.1
extend to (i) damage and repairs to the extent the cost thereof is actually
reimbursed or paid for under any insurance policy carried by Landlord in
connection with the premises; (ii) damage caused in whole or in part by the
negligence or willful misconduct of Landlord or Landlord's agents, employees,
invitees or licensees, (iii) repairs covered under Direct Operating Expenses;
(iv) reasonable wear and tear; (v) conditions to the extent the cost thereof is
actually reimbursed or paid for under any warranties of Landlord's contractors;
or (vi) damage by fire and other casualties, or acts of governmental authorities
(not including compliance directives), or acts of God and the elements.
8.2. Landlord's Obligations.
Landlord shall, at Landlord's expense, keep in good condition, order and
repair all structural elements of the Building, including the foundation, floors
and subfloors (but not floor coverings) and exterior and load bearing walls and
columns of the Building (excluding the interior of all walls and the exterior
and interior of all windows, doors, plate glass, and show cases), and the
structural portions of the exterior roof of the Building (except that Tenant
shall repair at Tenant's expense any damage, to the extent the cost thereof is
not actually reimbursed or paid for by insurance, caused by the activities of
Tenant, Xxxxxx's HVAC maintenance service contractor, and/or Tenant's other
agents or contractors on the roof, including but not limited to the installation
of air conditioning equipment and/or duct work, or other roof penetrations, and
improper flashing or caulking, and any damage to exposed air conditioning
equipment and duct-work installed by or for Tenant). Notwithstanding anything to
the contrary in Paragraph 8.1 above, in the event a full replacement of the roof
membrane installed on the Building is required, such full replacement shall be
performed by Landlord at Landlord's sole cost. Landlord shall exercise
reasonable diligence in performing such repairs as soon as practicable. However,
Landlord shall have no obligation to make repairs under this Paragraph 8.2 until
a reasonable time after Xxxxxxxx's receipt of written notice from Tenant of the
need for such repairs or Landlord otherwise acquires knowledge of such need.
Except as otherwise specifically provided herein, there shall be no abatement of
rent or other sums payable by Tenant prior to or during any repairs by Tenant or
Landlord, and Tenant waives all claims for loss of business or lost profits
relating to any such repairs.
9. ALTERATIONS
9.1. Xxxxxxxx's Consent Required.
Tenant shall not, without Xxxxxxxx's prior written consent, which shall not
be unreasonably withheld, make any alterations, improvements, additions, or
utility installations (collectively called "alterations") in, on or about the
premises, except for nonstructural alterations which individually do not exceed
Five Thousand Dollars ($5,000) in cost. As used in this Paragraph 9.1, the term
"utility installation" means power panels, wiring, fluorescent fixtures, space
heaters, conduits, air conditioning and plumbing. Should Tenant make any
alterations requiring the prior written consent of Landlord without obtaining
such consent, Tenant shall immediately remove the same at Tenant's expense upon
demand by Landlord.
9.2. Plans and Permits.
Any alteration that Tenant shall desire to make in or about the premises
and which requires the consent of Landlord shall be presented to Landlord in
written form, with proposed detailed plans and specifications therefor prepared
at Tenant's sole expense. Any consent by Landlord thereto shall be deemed
conditioned upon Tenant's acquisition of all permits required to make such
alteration from all appropriate governmental agencies, the furnishing of copies
thereof to Landlord prior to commencement of the work, and the compliance by
Tenant with all conditions of said permits in a prompt and expeditious manner,
all at Tenant's sole expense. Upon completion of any such alteration, Tenant,
at
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Landlord 9 Tenant
Tenant's sole cost, shall immediately deliver to Landlord "as-built" plans and
specifications therefor.
9.3. Construction Work Done by Tenant.
All construction work required or permitted to be done by Tenant shall be
performed by a licensed contractor in a prompt, diligent, and good and
workmanlike manner, and shall not diminish the value of the Building.
Furthermore, all such construction work shall conform in quality and design with
the premises existing as of the time such work is performed. In addition, all
such construction work shall be performed in compliance with all applicable
statutes, ordinances, regulations, codes and orders of governmental authorities
and insurers of the premises. Tenant or its agents shall obtain and pay for all
licenses and permits necessary therefor.
9.4. Roof Repairs.
All installation of air conditioning equipment and duct work requiring
penetration of the roof shall be properly flashed and caulked. Any electrical or
refrigeration conduits or other piping or materials installed by Tenant in the
Building shall be installed beneath the surface of the roof (and not on the
surface of the roof), and Tenant shall thereafter repair and re-roof the
affected portions of the roof surface. Any equipment placed by Tenant on the
roof shall be elevated and supported by Tenant so as not to inhibit drainage or
Landlord's replacement of the roof pursuant to Paragraph 8.2.
9.5. Title to Alterations.
Unless Landlord requires the removal thereof as set forth in Paragraphs 9.1
or 9.6, any alterations which may be made on the premises shall remain upon and
be surrendered with the premises at the expiration or sooner termination of the
term of this Lease, and shall become the property of Landlord at that time.
Notwithstanding the preceding sentence, Tenant shall be entitled to remove any
computer rooms or false fronts which are installed in the premises by Tenant.
Without limiting the generality of the foregoing, all heating, lighting,
electrical (including all wiring, conduits, main and subpanels), air
conditioning, partitioning, drapery, and carpet installations made by Tenant,
regardless of how affixed to the premises, together with all other alterations
that have become an integral part of the premises, shall not be deemed trade
fixtures, and shall remain upon and be surrendered with the premises at the
expiration or sooner termination of this Lease, and shall become the property of
the Landlord at that time. Notwithstanding the provisions of this Paragraph 9.5,
Xxxxxx's furnishings, machinery and equipment (including computer rooms and
false fronts), other than that which is affixed to the premises so that it
cannot be removed without material damage to the premises, shall remain the
property of Tenant and may be removed by Tenant, provided Tenant at Tenant's
expense immediately after removal repairs any damage to the premises caused
thereby.
9.6. Removal of Alterations.
Landlord may elect, by notice to Tenant at least ninety (90) days before
expiration of the Lease term, or within five (5) days after sooner termination
thereof, to require Tenant to remove any alterations that Tenant has made to the
premises and to restore the premises as hereafter provided. If Landlord so
elects, Tenant shall, at its sole expense, upon expiration of the Lease term or
within twenty (20) days after any sooner termination thereof, remove such
alterations, repair any damage occasioned thereby, and restore the premises to
the condition required by Paragraph 28 below. The obligations of Tenant set
forth in this paragraph shall survive the termination of this Lease.
10. MECHANICS' LIENS.
Tenant shall keep the premises, the Building, and the Project free from any
liens arising out of any work performed, materials furnished or obligations
incurred by Tenant. In the event that Tenant shall not, within ten (10) days
following the imposition of any such lien, cause the same to be released of
record, Landlord shall have, in addition to all other
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Landlord 10 Tenant
remedies provided herein and by law, the right, but no obligation, to cause the
same to be released by such means as Landlord 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 at the rate of ten percent
(10%) per annum, or the maximum rate permitted by law, whichever is less.
Tenant shall give Landlord notice of the date of commencement of any work in the
premises not less than five (5) business days prior thereto, and Landlord shall
have the right to post notices of non-responsibility or similar notices in or on
the premises in connection therewith.
11. UTILITIES.
Tenant shall pay when due directly to the charging authority all charges
for water, gas, electricity, telephone, refuse pickup, janitorial services, and
all other utilities and services supplied or furnished to the premises during
the term of this Lease, together with any taxes thereon. In no event shall
Landlord be liable to Tenant for failure or interruption of any such utilities
or services, unless caused by the gross negligence or willful misconduct of
Landlord or Landlord's agents, employees or contractors, and no such failure or
interruption shall entitle Tenant to terminate this Lease or to withhold rent or
other sums due hereunder. Landlord shall not be responsible for providing
security guards or other security protection for all or any portion of the
premises, and Tenant shall at its own expense provide or obtain such security
services as Tenant shall desire to insure the safety of the premises.
12. INDEMNITY.
Tenant shall indemnify, protect, defend, and hold harmless Landlord from
and against any and all claims, damages, losses, proceedings, causes of action,
costs, expense or liability due to, but not limited to, bodily injury, including
death resulting at any time therefrom, and/or property damage, now or hereafter
arising from any act, work or things done or permitted to be done or otherwise
suffered, or any omission in or about the premises, the Building, or the
Project, by Tenant or by any of Tenant's agents, employees, contractors, or
invitees, or from any breach or default by Tenant in the performance of any
obligation on the part of Tenant to be performed under the terms of this Lease,
except to the extent such damage, loss, expense or liability is caused by the
active negligence or willful misconduct of Landlord or its employees,
contractors or agents. Tenant shall also indemnify Landlord from and against all
damage, loss, expense (including without limitation, reasonable attorneys' fees,
costs of investigation, and expert witness fees), and liability incurred or
suffered by Landlord in the defense of or arising out of or resulting from any
claim or any action or proceeding brought thereon. In the event any action or
proceeding shall be brought against Landlord by reason of any such claim, Tenant
upon notice from Landlord shall defend the same at Tenant's expense with counsel
reasonably satisfactory to Landlord. The obligations of Tenant contained in this
paragraph shall survive the termination of this Lease.
13. WAIVER OF CLAIMS.
Except to the extent caused by the active negligence or willful misconduct
of Landlord or Landlord's agents, employees or contractors, Tenant hereby waives
any claims against Landlord for injury to Tenant's business or any loss of
income therefrom or for damage to the goods, wares, merchandise or other
property of Tenant, or for injury or death of Tenant's agents, employees,
invitees, or any other person in or about the premises, the Building, and the
Project, from any cause, regardless of whether the same results from conditions
existing upon the premises or from other sources or places, and regardless of
whether the cause of such damage or injury or the means of repairing the same is
inaccessible to Tenant.
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Landlord 11 Tenant
14. INSURANCE.
14.1. Tenant's Liability Insurance.
Tenant shall, at its sole cost and expense, obtain and keep in force during
the term of this Lease commercial general liability insurance applying to the
condition, use, occupancy, and maintenance of the premises and the business
operated by Tenant, or any other occupant, on the premises. Such insurance shall
include Broad Form Contractual liability insurance coverage insuring all of
Tenant's indemnity obligations under this Lease. Such coverage shall have a
minimum combined single limit of liability of at least Three Million Dollars
($3,000,000). All such policies shall be written to apply to all bodily injury,
property damage, personal injury and other covered loss, however occasioned. All
such policies shall be endorsed to add Landlord and any lender named by Landlord
as an additional insured and to provide that any insurance maintained by
Landlord shall be excess insurance only. Such coverage shall also contain
endorsements: (i) deleting any employee exclusion on personal injury coverage;
(ii) including employees as additional insureds; and (iii) providing for
coverage of employer's automobile non-ownership liability. All such insurance
shall provide for severability of interests; shall provide that an act or
omission of one of the named insureds shall not reduce or avoid coverage to the
other named insureds; and shall afford coverage for all claims based on acts,
omissions, injury and damage, which claims occurred or arose (or the onset of
which occurred or arose) in whole or in part during the policy period. Tenant
shall also maintain Workers' Compensation insurance in accordance with
California law, and employers liability insurance with a limit no less than One
Million Dollars ($1,000,000) per employee and One Million Dollars ($1,000,000)
per occurrence. The limits of all insurance described in this Paragraph 14.1
shall not, however, limit the liability of Tenant hereunder. Not more frequently
than once each calendar year if, in the reasonable opinion of Landlord, the
amount of insurance required hereunder is not adequate, Tenant shall increase
said insurance coverage as reasonably required by Landlord; provided that, in no
event shall any such increase result in an increase in the premium therefor of
greater than fifty percent (50%) of the amount of the premium during the
preceding year of the term of this Lease or require Tenant to maintain insurance
coverage in excess of amounts then typically maintained by lessees of similar
buildings in the vicinity of the premises. The failure of Landlord to require
any additional insurance coverage at any time shall not relieve Tenant from the
obligation to provide increased coverage at any later time or relieve Tenant
from any other obligations under this Lease.
14.2. Landlord's Liability Insurance.
Landlord shall maintain a policy or policies of commercial general
liability insurance insuring Landlord (and such other persons as may be
designated by Landlord) against liability for personal injury, bodily injury or
death and damage to property occurring or resulting from an occurrence in, on,
or about the Project with a combined single limit of not less than Three Million
Dollars ($3,000,000), or such greater coverage as Landlord may from time to time
determine is reasonably necessary for its protection.
14.3. Property Insurance.
(a) Landlord shall obtain and keep in force during the term of this
Lease a policy or policies of insurance covering loss or damage to the Project,
but excluding coverage of merchandise, fixtures, equipment and leasehold
improvements and alterations of Tenant, in the amount of the full replacement
value thereof, providing protection against all perils included within the
classification of fire, extended coverage, vandalism, malicious mischief,
special extended perils (all risk), including boiler and machinery coverage and
an inflation endorsement, and, at Landlord's option, flood and/or earthquake. In
addition, Landlord shall obtain and keep in force, during the term of this
Lease, a policy of rental loss insurance covering a period of one year,
commencing on the date of loss, with proceeds payable to Landlord, which
insurance may also cover all Real Property Taxes, Direct Operating Expenses,
insurance premiums, and other sums payable by Tenant to Landlord hereunder for
said period. The insurance coverage may include sprinkler leakage insurance if
the Building contains fire sprinklers. Tenant shall have no interest in or right
to the proceeds of any such insurance carried by Landlord.
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Landlord 12 Tenant
(b) Tenant shall, at Tenant's sole expense, obtain and keep in force
during the term of this Lease, a policy of fire and extended coverage insurance
including a standard "all risk" endorsement, and a sprinkler leakage endorsement
(if the premises shall be sprinklered), insuring the inventory, fixtures,
equipment, personal property, and leasehold improvements and alterations of
Tenant within the premises for the full replacement value thereof, as the same
may increase from time to time due to inflation or otherwise. The proceeds from
any of such policies shall be used for the repair or replacement of such items
so insured.
14.4. Payment.
Tenant shall pay to Landlord Xxxxxx's Share of the premiums for the
insurance obtained by Landlord pursuant to Paragraphs 14.2 and 14.3(a). Tenant
shall pay to Landlord the entire amount of any deductibles and other amounts not
paid by Landlord's insurance carriers relating to claims under Landlord's
insurance policies resulting from the acts or omissions of Tenant, or its
agents, employees, and invitees. Notwithstanding the foregoing, if the premises
are damaged and the deductible portion of Landlord's insurance associated
therewith exceeds a sum equal to one month's Base Rent due hereunder, Tenant
shall have the option to pay the entire amount of such deductible or to pay a
portion of such deductible equal to one month's Base Rent as a lump sum to
Landlord within thirty (30) days of request therefor and the remaining portion
of the deductible shall be amortized over the remaining term of the Lease, with
interest thereon at eight percent (8%) per annum, and paid by Tenant to Landlord
in equal monthly installments at the same time and in the same manner as Base
Rent is due hereunder. Notwithstanding the foregoing, landlord may obtain
liability insurance and property insurance for the Project separately, or
together with other buildings and improvements under blanket policies of
insurance. In the latter case Tenant shall be liable for only such portion of
the premiums for such blanket policies as are allocable to the premises, as
reasonably determined by the insurer or Landlord. Tenant shall pay such premiums
and/or deductibles and other amounts to Landlord within thirty (30) days after
receipt by Tenant of a copy of the premium statement or other reasonable
evidence of the amount due. If the term of this Lease does not commence or
expire concurrently with the commencement or expiration, respectively, of the
period covered by such insurance, Tenant's liability for premiums shall be
prorated accordingly.
14.5. Insurance Policies.
The insurance required to be obtained by Tenant pursuant to Paragraphs 14.1
and 14.3(b) shall be primary insurance and (a) shall provide that the insurer
shall be liable for the full amount of the loss up to and including the total
amount of liability set forth in the declarations without the right of
contribution from any other insurance coverage of Landlord, (b) shall be in a
form satisfactory to Landlord, (c) shall be carried with companies acceptable to
Landlord, and (d) shall specifically provide that such policies shall not be
subject to cancellation, reduction of coverage or other change except after at
least fifteen (15) days prior written notice to Landlord. The policy or
policies, or duly executed certificates for them, together with satisfactory
evidence of payment of the premium thereon, shall be deposited with Landlord on
or prior to the Commencement Date, and upon each renewal of such policies, which
shall be effected not less than ten (10) days prior to the expiration date of
the term of such coverage. Tenant shall not do or permit to be done anything
which shall invalidate any of the insurance policies referred to in Paragraphs
14.1,14.2, and 14.3.
14.6. Waiver of Subrogation.
Tenant and Landlord each hereby waives any and all rights of recovery
against the other, or against the officers, employees, agents, partners and
beneficiaries of the other, for loss of or damage to the property of the waiving
party, or the property of others under its control, to the extent of proceeds
received as a result of such loss or damage under any insurance policy carried
by Landlord or Tenant. Tenant and Landlord shall, upon obtaining the policies of
insurance required hereunder, give notice to the insurance carrier or carriers
that the foregoing mutual waiver is contained in this Lease.
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Landlord 13 Tenant
14.7. No Limitation of Liability.
Landlord makes no representation that the limits of liability specified to
be carried by Tenant or Landlord under the terms of this Lease are adequate to
protect any party. If Tenant believes that the insurance coverage required under
this Lease is insufficient to adequately protect Tenant, Tenant shall provide,
at its own expense, such additional insurance as Tenant deems adequate.
14.8. Impounding of Premiums.
If Landlord's lender requires Landlord to pay insurance premiums into an
impound account on a periodic basis during the term of this Lease, Tenant, upon
notice from Landlord indicating this requirement, shall pay a sum of money
toward its liabilities under this Paragraph 14 to Landlord on a periodic basis
in accordance with the lender's requirements. Landlord shall impound the
insurance premiums received from Tenant in accordance with the requirements of
the lender.
15. DAMAGE OR DESTRUCTION.
15.1. Partial Damage-Insured.
If the premises or the Building, as the case may be, are damaged to the
extent of less than fifty percent (50%) of the then replacement value thereof
(excluding excavations and foundations with respect to the Building), and if
such damage was caused by an act or casualty covered under an insurance policy
maintained pursuant to Paragraph 14.3(a), and if the proceeds of such insurance
received by Landlord are sufficient to repair the damage (not taking into
account the effect of any deductible amount under such insurance policy), and if
Landlord is permitted, under all applicable laws, to restore the premises and/or
the Building to their prior condition, Landlord shall at Landlord's expense
repair such damage as soon as reasonably possible and this Lease shall continue
in full force and effect.
15.2. Partial Damage-Uninsured.
Subject to the provisions of Paragraph 15.3, if at any time during the term
hereof the premises or the Building, as the case may be, are damaged and the
insurance proceeds received by Landlord are not sufficient to repair such damage
(not taking into account the effect of any deductible amount under such
insurance policy), or such damage was caused by an act or casualty not covered
under an insurance policy maintained by Landlord pursuant to Paragraph 14.3(a),
Landlord may at Landlord's option either (a) repair such damage as soon as
reasonably possible at Landlord's expense, in which event this Lease shall
continue in full force and effect, or (b) give written notice of termination of
this Lease to Tenant within thirty (30) days after the date of the occurrence of
such damage, with the effective date of such termination to be the date of the
occurrence of such damage. In the event Landlord gives such notice of
termination of this Lease, Tenant shall have the right, within ten (10) days
after receipt of such notice, to agree in writing on a basis satisfactory to
Landlord to pay for the entire cost of repairing such damage less only the
amount of insurance proceeds, if any, received by Landlord, in which event the
notice of termination shall be ineffective and this Lease shall continue in full
force and effect, and Landlord shall proceed to make such repairs as soon as
reasonably possible. If Tenant does not give such notice within such ten (10)
day period this Lease shall be terminated pursuant to such notice of termination
by Landlord.
15.3. Total Destruction.
If at any time during the term hereof either the premises or the Building
is destroyed to the extent of fifty percent (50%) or more of the then
replacement value thereof (excluding excavations and foundations with respect to
the Building), from any cause whether or not covered by the insurance maintained
by Landlord pursuant to Paragraph 14.3(a), or if, regardless of the extent of
the damage, Landlord is not permitted under all applicable laws to restore the
premises and/or the Building to the condition which existed prior to the
casualty, this Lease shall at the option of Landlord terminate as of the date of
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Landlord 14 Tenant
such destruction. Landlord shall exercise its right to terminate this Lease by
delivery of notice of termination to Tenant within thirty (30) days after the
date that Tenant notifies Landlord of the occurrence of such damage. In the
event Landlord does not elect to terminate this Lease, Landlord shall at
Landlord's expense repair such damage as soon as reasonably possible, and this
Lease shall continue in full force and effect.
15.4. Damage Near End of Term.
Notwithstanding anything to the contrary in Paragraph 15, if the premises
or the Building, as the case may be, are destroyed or damaged in whole or in
part during the last six (6) months of the term of this Lease, such that the
cost of repair would equal Fifty Thousand Dollars ($50,000) or more, whether
from an insured or uninsured casualty, either party may at its option cancel and
terminate this Lease as of the date of occurrence of such damage by giving
written notice to the other party of its election to do so within thirty (30)
days after the date of occurrence of such damage.
15.5. Abatement of Rent.
Notwithstanding anything to the contrary contained in Paragraph 3 or
elsewhere in this Lease, if the premises are partially damaged and this Lease is
not terminated, the rent, including Xxxxxx's Share of Direct Operating Expenses,
Real Property Taxes, and insurance premiums, payable hereunder for the period
commencing on the occurrence of such damage and ending upon completion of such
repair or restoration shall be abated in proportion to the extent to which
Xxxxxx's use of the premises is impaired during the period of repair. Except for
abatement of rent, if any, Tenant shall have no claim against Landlord for any
damage suffered by reason of any such damage, destruction, repair or
restoration.
15.6. Waiver.
Tenant waives the provisions of California Civil Code Sections 1932(2) and
1933(4), and any similar or successor statutes relating to termination of leases
when the thing leased is substantially or entirely destroyed, and agrees that
any such occurrence shall instead be governed by the terms of this Lease.
15.7. Tenant's Property.
Landlord's obligation to rebuild or restore shall not include
restoration of Tenant's trade fixtures, equipment, merchandise, or any
improvements, alterations or additions made by Tenant to the premises.
15.8. Notice of Damage.
Tenant shall notify Landlord within five (5) days after the occurrence
thereof of any damage to all or any portion of the premises of which Tenant has
actual knowledge. In no event shall Landlord have any obligation to repair or
restore the premises pursuant to this Paragraph 15 until a reasonable period of
time after Landlord's receipt of notice from Tenant of the nature and scope of
any damage to the premises, and a reasonable period of time to collect insurance
proceeds arising from such damage (unless such damage is clearly not covered by
insurance then in effect covering the premises).
15.9. Replacement Cost.
The determination in good faith by Xxxxxxxx (after consultation with
Xxxxxxxx's architect or contractor) of the estimated cost of or time period
required for repair of any damage, or of the replacement cost, shall be
conclusive for purposes of this Paragraph 15. If Tenant does not agree that
Xxxxxxxx has made any such determination reasonably and in good faith, Tenant
shall have the right to require that any such determination be submitted to
arbitration in accordance with the rules of the American Arbitration
Association. In the event of any such arbitration, the one hundred eighty (180)
day time period set forth in Paragraph 15.10 below shall be extended by the
period of time required to complete such arbitration proceedings.
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Landlord 15 Tenant
15.10. Damage and Destruction-Tenant's Termination Rights.
Within fifteen (15) business days following any damage to or destruction of
the premises, Landlord shall determine in good faith (after consultation with
Landlord's architect or contractor) the estimated period required to repair and
restore the premises, and shall deliver such determination to Tenant. If the
premises is damaged or destroyed to the extent that the premises cannot with
reasonable diligence be fully repaired or restored by Landlord within one
hundred eighty (180) days after the date of the damage or destruction (as such
period is determined by Landlord as set forth above), Tenant may terminate this
Lease upon notice thereof to Landlord delivered in writing within ten (10) days
of Tenant's receipt of Landlord's notice and the obligation of Tenant, if any,
to pay Rent to Landlord shall terminate as of the date of such notice.
16. CONDEMNATION.
16.1. Partial Taking.
Subject to Paragraph 16.5, if part of the premises is taken for any public
or quasi-public use, under any statute or right of eminent domain (collectively
a "taking"), and a part of the premises remains which is reasonably suitable for
Tenant's continued occupancy for the uses permitted by this Lease, and a portion
of the parking area within the Project remains which is equivalent to at least
fifty percent (50%) of the parking area in the Project as of the Commencement
Date, this Lease shall, as to the part so taken, terminate as of the date the
condemner or purchaser takes possession of the property being taken, and the
monthly Base Rent payable hereunder shall be reduced in the same proportion that
the floor area of the portion of the premises so taken bears to the floor area
of the premises as of the Commencement Date. Landlord shall, at its own cost and
expense, make all necessary repairs or alterations to the premises in order to
make the portion of the premises not taken a complete architectural unit. Such
work shall not, however, exceed the scope of the work done by Xxxxxxxx in
originally constructing the premises. Each party hereto waives the provisions of
California Code of Civil Procedure Section 1265.130 allowing either party to
petition the superior court to terminate this Lease in the event of a partial
taking of the premises. In any portion of the premises is condemned, and such
partial condemnation renders the premises unusable for Tenant's business, as
reasonably determined by Tenant in good faith, Tenant shall have the right to
terminate this Lease by giving notice to Landlord of Tenant's desire to
terminate, and this Lease shall terminate as of the date of the notice. If such
partial condemnation does not result in termination of the Lease, Landlord shall
promptly restore the remaining premises to the same condition they were in prior
to such condemnation, and this Lease shall continue in full force and effect
except that Base Rent and Xxxxxx's Share shall be adjusted on the basis of the
square footage condemned as of the date the premises is condemned.
16.2. Total Taking.
Subject to Paragraph 16.5, if all of the premises are taken, or such part
thereof is taken so that there does not remain a portion of the premises
suitable for Tenant's continued occupancy for the uses permitted hereunder, or
more than fifty percent (50%) of the parking area in the Project as of the
Commencement Date is taken, such taking shall be treated as a total taking and
this Lease shall terminate upon the date possession shall be taken by the
condemning authority.
16.3. Distribution of Award.
All compensation awarded upon a taking governed by Paragraph 16.1 or
Paragraph 16.2 shall belong to and be paid to Landlord, except that Tenant shall
receive from the award a sum attributable to Tenant's improvements or
alterations made to the premises by Xxxxxx at Tenant's expense and a sum for
relocation costs.
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Landlord 16 Tenant
16.4. Sale Under Threat of Condemnation.
A sale by Landlord to any authority having the power of eminent domain,
either under threat of condemnation or while condemnation proceedings are
pending, shall be deemed a taking under the power of eminent domain for purposes
of this Paragraph 16.
16.5. Temporary Taking.
If all or any part of the premises is occupied, taken, or appropriated by
military or other public or quasi-public use or other governmental authority for
less than one hundred eighty (180) consecutive days, it shall not constitute a
taking of the premises which would be governed by Paragraph 16.1 or Paragraph
16.2. In such event, during such a "temporary taking," all of the provisions of
this Lease shall remain in force and effect, except that the monthly Base Rent
payable during such temporary taking shall be reduced in the same proportion
that the floor area of the portion of the premises so occupied, taken, or
appropriated bears to the floor area of the premises as of the Commencement
Date. Any award that may be paid in connection with such a temporary taking
shall be paid to Landlord. In the event a taking which appears, at its
commencement, to be only a temporary taking nevertheless continues for one
hundred eighty (180) consecutive days or more, a partial or total taking, as the
case may be, shall be deemed to have occurred on the one hundred eightieth
(180th) consecutive day of such taking, and shall be governed by the provisions
of either Paragraph 16.1 or Paragraph 16.2 as the case may be.
17. ASSIGNMENT AND SUBLETTING.
Tenant shall not assign this Lease, or any interest therein, voluntarily or
involuntarily, and shall not sublet the premises or any part thereof, or any
right or privilege appurtenant thereto, or suffer any other person (the agents
and servants of Tenant excepted) to occupy or use the premises, or any portion
thereof, without the prior written consent of Landlord in each instance pursuant
to the terms and conditions set forth below, which consent shall not
unreasonably be withheld.
17.1. Documentation.
Prior to any assignment or sublease which Tenant desires to make, Tenant
shall provide to Landlord the name and address of the proposed assignee or
sublessee, a statement of the proposed use of the premises by the assignee or
sublessee (including an indication of the extent to and manner in which
Hazardous Materials [as defined in Paragraph 6.3(a)] will be utilized), and true
and complete copies of all documents relating to Tenant's prospective agreement
to assign or sublease, and shall specify all consideration to be received by
Tenant for such assignment or sublease in the form of lump sum payments,
installments of rent, or otherwise. For purposes of this Paragraph 17, the term
"consideration" shall include, without limitation, all monies or other
consideration of any kind, if such sums are related to Tenant's interest in this
Lease or in the premises, including but not limited to, bonus money, and
payments (in excess of book value thereof) for Tenant's assets, fixtures,
inventory, accounts, good will, equipment, furniture, general intangibles, and
any capital stock or other equity ownership of Tenant. Within thirty (30) days
after the receipt of such written notice, Landlord shall either consent in
writing to such proposed assignment or sublease subject to the terms and
conditions hereinafter set forth, or notify Tenant in writing that Landlord
refuses such consent, specifying reasonable grounds for such refusal.
17.2. Terms and Conditions.
As a condition to Xxxxxxxx's granting its consent to any assignment or
sublease, (a) Landlord may require that Tenant pay to Landlord, as and when
received by Tenant, one-half of the amount of any excess of such consideration
to be received by Tenant in connection with said assignment or subletting over
and above the rental amount fixed by this Lease and payable by Tenant to
Landlord (prorated to reflect the rent allocable to the portion of the premises
subject to such assignment or sublease); provided that Tenant shall first be
entitled to retain an amount of such excess consideration equal to Xxxxxx's
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Landlord 17 Tenant
reasonable direct costs of assigning or subletting, including (i) real estate
brokerage commissions, if any, (ii) legal fees, (iii) the cost of improvements
made to the premises to be sublet or assigned by Tenant at Tenant's expense for
the purpose of such transfer, (iv) the unamortized cost of any improvements
previously made by Tenant in the area to be transferred at Tenant's expense
(which shall be amortized over the initial term of this Lease), but not
including carrying costs due to vacancy or otherwise, and (b) Tenant and the
proposed assignee or sublessee must demonstrate to Landlord's reasonable
satisfaction that the assignee or sublessee is financially responsible and
proposes to use the premises for substantially the same use or a use which is
otherwise satisfactory to Landlord, and that the proposed use does not pose an
unreasonable risk (as determined by Landlord in its sole discretion) of
contamination of the Project with Hazardous Materials and is not otherwise
injurious to the premises. Each assignment or sublease agreement to which
Landlord has consented shall be an instrument in writing in form satisfactory to
Landlord, and shall be executed by both Tenant and the assignee or sublessee, as
the case may be. Each such assignment or sublease agreement shall recite that it
is and shall be subject and subordinate to the provisions of this Lease, that
the assignee or sublessee accepts such assignment or sublease and agrees to
perform all of the obligations of Tenant hereunder, and that the termination of
this Lease shall, at Landlord's sole election, constitute a termination of every
such assignment or sublease. In the event Landlord shall consent to an
assignment or sublease, Tenant shall nonetheless remain primarily liable for all
obligations and liabilities of Tenant under this Lease, including but not
limited to the payment of rent. Xxxxxx agrees to reimburse Landlord upon demand
for reasonable attorneys' fees incurred by Landlord in connection with the
negotiation, review, and documentation of any such requested assignment or
subleasing. Tenant hereby stipulates that the foregoing terms and conditions are
reasonable.
17.3. Partnership.
If Tenant is a partnership, a transfer, voluntary or involuntary, of all or
any part of an interest in the partnership, or the dissolution of the
partnership, shall be deemed an assignment requiring Landlord's prior written
consent.
17.4. Corporation.
If Tenant is a corporation, any dissolution, merger, consolidation, or
other reorganization of Tenant, or the transfer, either all at once or in a
series of transfers, of a controlling percentage of the capital stock of Tenant,
or the sale, or series of sales within any one (1) year period, of all or
substantially all of Tenant's assets located in, on, or about the premises,
shall be deemed an assignment. The phrase "controlling percentage" means the
ownership of, and the right to vote, stock possessing at least fifty-one percent
(51%) of the total combined voting power of all classes of Tenant's capital
stock issued, outstanding, and entitled to vote for the election of directors.
Notwithstanding the foregoing, Tenant may assign this Lease or sublet any
portion of the premises without Landlord's consent to any of the following: (a)
any corporation which controls, is controlled by or is under common control with
Tenant; (b) any corporation resulting from the merger or consolidation of Tenant
or (c) any person or entity which acquires all of the assets of Tenant as a
going concern of the business that is being conducted on the premises, provided
that: (i) such transferee assumes in full the obligations of Tenant under the
Lease, (ii) the successor to Tenant has a net worth, computed in accordance with
generally accepted accounting principles, at least equal to the net worth of
Tenant herein named on the date of this Lease (or such lesser net worth which is
adequate for such successor to meet all its reasonably anticipated obligations,
including its obligations under this Lease, which such lesser net worth must be
approved by Landlord, such approval not to be unreasonably withheld), and (iii)
proof satisfactory to Landlord of such net worth shall have been delivered to
Landlord at least ten (10) days prior to the effective date of any such
transaction.
17.5. Landlord's Remedies.
Any assignment or sublease without Xxxxxxxx's prior written consent shall
at Landlord's election be void, and shall constitute a default. The consent by
Landlord to any assignment or sublease shall not constitute a waiver of the
provisions of this Paragraph 17,
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Landlord 18 Tenant
including the requirement of Xxxxxxxx's prior written consent, with respect to
any subsequent assignment or sublease. if Tenant shall purport to assign this
Lease, or sublease all or any portion of the premises, or permit any person or
persons other than Tenant to occupy the premises, without Landlord's prior
written consent, Landlord may collect rent from the person or persons then or
thereafter occupying the premises and apply the net amount collected to the rent
reserved herein, but no such collection shall be deemed a waiver of Landlord's
rights and remedies under this Paragraph 17, or the acceptance of any such
purported assignee, sublessee or occupant, or a release of Tenant from the
further performance by Tenant of covenants on the part of Tenant herein
contained.
17.6. Encumbrances, Licenses and Concession Agreements.
Tenant shall not encumber its interest under this Lease or any rights of
Tenant hereunder, or enter into any license or concession agreement respecting
all or any portion of the premises, without Landlord's prior written consent
which consent shall not unreasonably be withheld subject to the terms and
conditions referred to in Paragraph 17.2 above, and Xxxxxx's granting of any
such encumbrance, license, or concession agreement shall constitute an
assignment for purposes of this Paragraph 17.
18. DEFAULT BY TENANT.
18.1. Event of Default.
The occurrence of any one or more of the following events (an "Event of
Default") shall constitute a default and breach of this Lease by Tenant:
(a) The failure by Tenant to make any payment of rent or any other
payment requited to be made by Tenant hereunder, as and when due, and such
failure shall not have been cured within three (3) business days after written
notice thereof from Landlord. Any such notice shall constitute the notice
required under Section 1161 of the California Code of Civil Procedure (and/or
any related or successor statutes regarding unlawful detainer actions), provided
such notice is given in accordance with the requirements of such statute.
Furthermore, if three or more such failures shall occur in any one year period
during the term of this Lease, then, unless applicable law requires otherwise,
each and every succeeding failure to pay any sum payable hereunder when due
shall constitute an Event of Default, and Tenant shall not be entitled to a
three (3) day cure period or notice from Landlord with respect to any such
failure to pay;
(b) Tenant's failure to perform any other term, covenant or condition
contained in this Lease and such failure shall have continued for fifteen (15)
days after written notice of such failure is given to Tenant; provided that,
where such failure cannot reasonably be cured within said fifteen (15) day
period, Tenant shall not be in default if Tenant commences such cure within said
fifteen (15) day period and thereafter diligently continues to pursue all
reasonable efforts to complete said cure until completion thereof;
(c) Tenant's failure to continuously and uninterruptedly conduct
its business in the premises for a period of more than forty-five (45)
consecutive days, or Tenant's removal of all or substantially all of its
equipment and other possessions from the premises;
(d) Xxxxxx's assignment of its assets for the benefit of its
creditors;
(e) The sequestration of, attachment of, or execution on, any
substantial part of the property of Tenant or on any property essential to the
conduct of Tenant's business on the premises, and Tenant shall have failed to
obtain a return or release on such property within sixty (60) days thereafter,
or prior to sale pursuant to such sequestration, attachment or execution,
whichever is earlier;
(f) An entry of any of the following orders by a court having
jurisdiction, and such order shall have continued for a period of sixty (60)
days: (1) an order for relief in any proceeding under Title 11 of the United
States Code, or an order adjudicating Tenant
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Landlord 19 Tenant
to be bankrupt or insolvent; (2) an order appointing a receiver, trustee or
assignee of Tenant's property in bankruptcy or any other proceeding; or (3) an
order directing the winding up or liquidation of Tenant; or
(g) The filing of a petition to commence against Tenant an involuntary
proceeding under Title 11 of the United States Code, and Tenant shall fail to
cause such petition to be dismissed within sixty (60) days thereafter.
18.2. Remedies.
Upon any Event of Default, Landlord shall have the following remedies, in
addition to all other rights and remedies provided by law or equity:
(a) Landlord, as described in California Civil Code Section 1951.4,
shall be entitled to keep this Lease in full force and effect for so long as
Landlord does not terminate Tenant's right to possession (whether or not Tenant
shall have abandoned the premises) and Landlord may enforce all of its rights
and remedies under this Lease, including the right to recover rent and other
sums as they become due under this Lease, plus interest at the lesser of twelve
percent (12%) per annum or the highest rate then allowed by law, from the due
date of each installment of rent or other sum until paid; or
(b) Landlord may terminate the Tenant's right to possession by giving
Tenant written notice of termination. On the giving of the notice, this Lease
and all of Tenant's rights in the premises shall terminate. Any termination
under this paragraph shall not release Tenant from the payment of any sum then
due Landlord or from any claim for damages or rent previously accrued or then
accruing against Tenant.
In the event this Lease is terminated pursuant to this Paragraph 18.2(b),
Landlord may recover from Tenant:
(1) the worth at the time of award of the unpaid rent which had
been earned at the time of termination; plus
(2) the worth at the time of award of the amount by which the
unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss for the same period that Tenant
proves could have been reasonably avoided; plus
(3) the worth at the time of award of the amount by which the
unpaid rent for the balance of the term after the time of award exceeds the
amount of such rental loss for the same period that Tenant proves could be
reasonably avoided; plus
(4) any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform Tenant's obligations
under this Lease, or which in the ordinary course of things would be likely to
result therefrom, including without limitation, the following: (i) expenses for
cleaning, repairing or restoring the premises; (ii) expenses for altering,
remodeling or otherwise improving the premises for the purpose of reletting,
including installation of leasehold improvements (whether such installation be
funded by a reduction of rent payable by a new tenant, direct payment or
allowance to a new tenant, or otherwise); (iii) real estate leasing commissions,
advertising costs and other expenses of reletting the premises; (iv) costs
incurred as owner of the premises including without limitation taxes and
insurance premiums thereon, utilities and building security; (v) expenses in
retaking possession of the premises; (vi) attorneys' fees and court costs; and
(vii) any unamortized lease commission paid in connection with this Lease.
The "worth at the time of award" of the amounts referred to in
subparagraphs (1) and (2) of this Paragraph 18.2(b) shall be computed by
allowing interest at the lower of twelve percent (12%) per annum, or the maximum
rate then permitted by law. The "worth at the time of award" of the amount
referred to in subparagraph (3) of this paragraph shall be computed by
discounting such amount at the discount rate of the Federal Reserve Board of San
Francisco at the time of award plus one percent (1%). The term "time of award"
as
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Landlord 20 Tenant
used in subparagraphs (1), (2), and (3) shall mean the date of entry of a
judgment or award against Tenant in an action or proceeding arising out of
Tenant's breach of this Lease. The term "rent" as used in this Paragraph shall
include all sums required to be paid by Tenant to Landlord pursuant to the terms
of this Lease.
(c) This lease may be terminated by a judgment specifically providing
for termination, or by Landlord's delivery to Tenant of written notice
specifically terminating this Lease. In no event shall any one or more of the
following actions by Xxxxxxxx, in the absence of a written election by Landlord
to terminate this Lease, constitute a termination of this Lease or a waiver of
Landlord's right to recover damages under this Paragraph 18:
(1) appointment of a receiver in order to protect Xxxxxxxx's
interest hereunder;
(2) consent to any subletting of the premises or assignment of
this Lease by Xxxxxx, whether pursuant to provisions hereof concerning
subletting and assignment or otherwise; or
(3) any other action by Landlord or Landlord's agents intended to
mitigate the adverse effects of any breach of this Lease by Tenant, including
without limitation any action taken to maintain and preserve the premises, or
any action taken to relet the premises or any portion thereof for the account of
Tenant and in the name of Tenant.
18.3. No Relief From Forfeiture After Default.
Tenant waives all rights of redemption or relief from forfeiture under
California Code of Civil Procedure Sections 1174 and 1179, and under any other
present or future law, in the event Tenant is evicted or Landlord otherwise
lawfully takes possession of the premises by reason of any event of Default.
18.4. Xxxxxxxx's Right to Perform Xxxxxx's Obligations.
If Tenant at any time shall fail to make any payment or perform any other
act required to be made or performed by Tenant under this Lease, then Landlord
may, but shall not be obligated to, make such payment or perform such other act
to the extent Landlord may deem desirable, and may, in connection therewith, pay
any and all expenses incidental thereto and employ counsel. No such action by
Landlord shall be deemed a waiver by Landlord of any rights or remedies Landlord
may have as a result of such failure by Xxxxxx, or a release of Tenant from
performance of such obligation. All sums so paid by Xxxxxxxx, including without
limitation all penalties, interest and costs in connection therewith, shall be
due and payable by Tenant to Landlord on the day immediately following any such
payment by Landlord. Landlord shall have the same rights and remedies for the
nonpayment of any such sums as Landlord may be entitled to in the case of
default by Tenant in the payment of rent.
18.5. Interest on Past Due Obligations.
Any amount due to Landlord hereunder not paid when due shall bear interest
at the lower of twelve percent (12%) per annum, or the highest rate then allowed
by law, from the date due until paid in full. Payment of such interest shall not
excuse or cure any default by Tenant under this Lease.
18.6. Additional Rent.
All sums payable by Tenant to Landlord or to Allied parties under this
Lease in addition to such sums payable pursuant to Paragraph 3 hereof shall be
payable as additional sums of rent. For purposes of any unlawful detainer action
by Landlord against Tenant pursuant to California Code of Civil Procedure
Sections 1161-1174, or any similar or successor statutes, Landlord shall be
entitled to recover as rent not only such sums specified in Paragraph 3 as may
then be overdue, but also all such additional sums of rent as may then be
overdue.
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Landlord 21 Tenant
18.7. Remedies Not Exclusive.
No remedy or election hereunder shall be deemed exclusive but shall,
wherever possible, be cumulative with all other remedies herein provided or
permitted at law or in equity.
19. DEFAULT BY LANDLORD.
19.1. Cure Period.
Landlord shall not be deemed to be in default in the performance of any
obligation required to be performed by it hereunder unless and until it has
failed to perform such obligation within the period of time specifically
provided herein, or if no period of time has been provided, then within thirty
(30) days after receipt of written notice by Tenant to Landlord specifying
wherein Landlord has failed to perform such obligation; provided, however, that
if the nature of Landlord's obligation is such that more than thirty (30) days
are reasonably required for its performance, then Landlord shall not be deemed
to be in default if it shall commence such performance within such thirty (30)
day period and thereafter diligently prosecute the same to completion.
19.2. Mortgagee Protection.
In the event of any default on the part of Landlord, Tenant will give
notice by registered or certified mail to any beneficiary of a deed of trust or
mortgagee of a mortgage encumbering the premises whose address shall have been
furnished to Tenant, and before Tenant shall have any right to terminate this
Lease, Tenant shall grant such beneficiary or mortgagee the same time period
within which to cure the default provided to Landlord hereunder.
20. ADVERTISEMENTS AND SIGNS.
Tenant shall not place or permit to be placed any sign, display,
advertisement, or decoration ("sign") on the exterior of the Building, or
elsewhere in the Project or on the premises, without the prior written consent
of Landlord, Stanford and the City of Palo Alto as to the color, size, style,
character, content, and location of each such sign. Landlord hereby approves of
the existing signage installed in the Project as of the date of this Lease. Upon
termination of this Lease, Tenant shall remove any sign which it has placed in
the Project or on the premises or the Building, and shall repair any damage
caused by the installation or removal of such sign.
21. ENTRY BY LANDLORD.
Landlord and its agents shall be entitled to enter into and upon the
premises at all reasonable times, upon at least twenty-four (24) hours prior
notice (except m the case of an emergency, in which event no notice shall be
required), for the following purposes:
(a) to inspect or make repairs, alterations or additions to all or any
portion of the premises which Landlord may deem appropriate (i) to comply with
any laws, ordinances, rules, regulations, or policies of any governmental
authority or Landlord's insurance carrier(s), or (ii) to prevent waste or
deterioration of the Project, or (iii) to promote the general welfare and safety
of occupants of the Project, or (iv) to enhance the value of the Project, or (v)
to perform construction work elsewhere in the Building adjacent to, above, or
below the premises, including the erection and maintenance of such scaffolding,
canopies, fences and props as may be required; or
(b) to post notices of non-responsibility for alterations, additions,
or repairs; or
(c) to place upon the premises any ordinary "for sale" signs and to
show the premises to prospective purchasers or lenders; and, during the ninety
(90) day period prior to the expiration of this Lease, or upon any Event of
Default, to place upon the premises
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Landlord 22 Tenant
any usual or ordinary "for lease" signs and exhibit the premises to prospective
tenants at reasonable hours.
Xxxxxxxx's rights of entry as set forth in this Paragraph 21 shall be
subject to the reasonable security regulations of Tenant, and to the requirement
that Landlord shall use reasonable efforts to minimize interference with
Xxxxxx's business activities on the premises. The preceding sentence shall not
require the use of overtime labor or the conduct of any work or other activities
of Landlord during Xxxxxx's non-business hours.
Landlord shall be entitled to exercise the foregoing rights without any
abatement of rent and without liability to Tenant for any injury or
inconvenience to or interference with Xxxxxx's business, quiet enjoyment of the
premises, or any other loss occasioned thereby.
22. SUBORDINATION AND ATTORNMENT.
22.1. Subordination.
Tenant agrees that this Lease may, at the option of Landlord, be subject and
subordinate to any mortgage, deed of trust, or other instrument of security now
of record or which is recorded after the date of this Lease affecting the
Project or any portion thereof, including the premises, and such subordination
is hereby made effective without any further act of Tenant; provided that, no
such subordination shall be effective unless Landlord first obtains from a
lender a written agreement that provides in essence that as long as Tenant is
not in default beyond any applicable cure period in its obligations under this
Lease, no foreclosure of, deed given in lieu of foreclosure of, or sale under,
the encumbrance, and not steps or procedures taken under the encumbrance, shall
affect Tenant's rights under this Lease. Tenant shall execute and return to
Landlord the written agreement and any other documents required by the lender to
accomplish the purposes of this paragraph, within ten (10) days after delivery
thereof to Tenant, and the failure of Tenant to execute and return any such
instruments shall constitute a default hereunder.
22.2. Attornment.
Tenant shall attorn to any third party purchasing or otherwise acquiring
the premises at any sale or other proceeding, or pursuant to the exercise of any
rights, powers or remedies under any mortgages or deeds of trust or ground
leases now or hereafter encumbering all or any part of the premises, as if such
third party had been named as Landlord under this Lease. Tenant shall execute a
new lease with such new Landlord on the same terms of this Lease if so required
by such new Landlord.
22.3. Cooperation Regarding Agreements.
Landlord shall cooperate with Tenant in connection with Xxxxxx's obtaining:
(a) a recognition and attornment agreement executed by Landlord and Stanford, in
a form reasonably satisfactory to Landlord, and (b) a non-disturbance agreement
from Xxxxxxxx's lender holding an interest in the Project as of the date of this
Lease. Such cooperation shall be at no cost or expense to Landlord.
23. ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS.
Tenant shall within ten (10) days following request by Landlord: (a)
execute and deliver to Landlord any documents, including estoppel certificates,
(1) certifying that this Lease has not been modified and is 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, (2) stating the
date to which the rent and other charges are paid in advance, if at all, (3)
acknowledging that there are not, to Tenant's knowledge, any uncured defaults on
the part of Landlord hereunder, or if there are uncured defaults on the part of
Landlord, stating the nature of such uncured defaults, and (4) evidencing the
status of this Lease as may be required either by a lender making a loan to
Landlord to be secured by a deed of trust or mortgage encumbering the premises
or a purchaser of the premises from Landlord; and (b) deliver to Landlord the
current financial statements of Tenant with an opinion of a certified
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Landlord 23 Tenant
public accountant, if available, including a balance sheet and profit and loss
statement for the then current fiscal year, and the two (2) immediately prior
fiscal years (if available), all prepared in accordance with generally accepted
accounting principles consistently applied. Tenant's failure to deliver any such
documents, including an estoppel certificate, or any such financial statements
within ten (10) days following such request shall be an Event of Default under
this Lease.
24. NOTICES.
Any notice, approval, request, demand, or consent (collectively "notice")
required or desired to be given under this Lease shall be in writing and shall
be personally served or delivered by commercial courier (with signed receipt) or
United States mail, registered or certified, postage prepaid, and addressed to
the party to be served at the last address given by that party to the other
party under the provisions of this paragraph. At the date of execution of this
Lease, the addresses of Landlord and Tenant are as set forth above in the
preamble to this Lease. Either party may change its address by notice to the
other party. Any notice delivered by United States mail pursuant to this
paragraph shall be deemed to have been delivered three (3) days after the posted
date of mailing.
25. WAIVER.
The waiver by either party of any breach of any term, covenant, or
condition herein contained shall not be deemed to be a waiver of such term,
covenant or condition or any subsequent breach of the same or any other term,
covenant or condition herein contained. The subsequent acceptance of rent
hereunder by Landlord shall not be deemed to be a waiver of any preceding breach
by Tenant of any term, covenant or condition of this Lease, other than the
failure of Tenant to pay the particular rental so accepted, regardless of
Landlord's knowledge of such preceding breach at the time of acceptance of such
rent. No term, covenant or condition shall be deemed to have been waived by
either party unless such waiver is in writing and signed by the party making
such waiver.
26. NO ACCORD AND SATISFACTION.
No payment of Tenant, or receipt by Landlord, or an amount which is less
than the full amount of rent and all other sums payable by Tenant hereunder at
such time shall be deemed to be other than on account of (a) the earliest of
such other sums due and payable, and thereafter (b) to the earliest rent due and
payable hereunder. No endorsement or statement on any check or any letter
accompanying any payment of rent or such other sums shall be deemed an accord
and satisfaction, and Landlord may accept any such check or payment without
prejudice to Landlord's right to receive payment of the balance of such rent
and/or the other sums, or Landlord's right to pursue any remedies to which
Landlord may be entitled to recover such balance.
27. ATTORNEY'S FEES.
If any action proceeding at law or in equity, or an arbitration proceeding
(collectively an "action"), shall be brought to recover any rent under this
Lease, or for or on account of any breach of or to enforce or interpret any of
the terms, covenants, or conditions of this Lease, or for the recovery of
possession of the premises, the prevailing party shall be entitled to recover
from the other party as a part of such action, or in a separate action brought
for that purpose, its reasonable attorney's fees and costs and expenses
(including expert witness fees) incurred in connection with the prosecution or
defense of such action. "Prevailing party" within the meaning of this paragraph
shall include, without limitation, a party who brings an action against the
other after the other is in breach or default, if such action is dismissed upon
the other's payment of the sums allegedly due or upon the other's performance of
the covenants allegedly breached, or if the party commencing such action or
proceeding obtains substantially the relief sought by it in such action, whether
or not such action proceeds to a final judgment or determination.
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Landlord 24 Tenant
28. SURRENDER.
Tenant shall, upon expiration or sooner termination of this Lease,
surrender the premises to Landlord in the same condition as existed on the date
Tenant originally took possession thereof (reasonable wear and tear and damage
due to causes beyond the reasonable control of Tenant excepted) with all
interior walls cleaned, all holes in walls repaired, and all HVAC equipment in
operating order and in good repair, all to the reasonable satisfaction of
Landlord. Tenant shall at such time also surrender to Landlord such alterations
(as defined in Paragraph 9) as Landlord does not require Tenant to remove in
accordance with Paragraph 9.6 above. Tenant, on or before the expiration or
sooner termination of this Lease, shall remove all of its personal property and
trade fixtures from the premises, and all property not so removed shall be
deemed abandoned by Tenant. Tenant shall be liable to Landlord for costs of
removal of any such abandoned trade fixtures or equipment of Tenant, or of any
alterations Tenant fails to remove if so required by Landlord, together with the
cost of returning the premises to its condition as of the date Tenant originally
took possession thereof, and the transportation and storage costs of such items.
If the premises are not so surrendered at the expiration or sooner termination
of this Lease, Tenant shall indemnify Landlord against loss or liability
resulting from delay by Xxxxxx in so surrendering the premises, including
without limitation, any claims made by any succeeding tenant founded on such
delay, losses to Landlord due to lost opportunities to lease to succeeding
tenants, and attorneys' fees and costs. All keys to the premises or any part
thereof shall be surrendered to Landlord upon expiration or sooner termination
of the Lease term.
29. HOLDING OVER.
This Lease shall terminate without further notice at the expiration of the
Lease term. Any holding over by Tenant after expiration shall not constitute a
renewal or extension of the Lease term or give Tenant any rights in or to the
premises unless otherwise expressly provided in this Lease. Any holding over
after expiration of the Lease term with the express written consent of Landlord
shall be construed to be a tenancy from month to month, at one hundred twenty-
five percent (125%) of the monthly Base Rent for the last month of the Lease
term, and shall otherwise be on the terms and conditions herein specified
insofar as applicable, unless otherwise mutually agreed in writing by the
parties.
30. TRANSFER OF PREMISES BY LANDLORD.
The term "Landlord" as used in this Lease, so far as the covenants or
obligations on the part of Landlord are concerned, shall be limited to mean and
include only the owner at the time in question of the lessee's interest under
the Master Lease. In the event of any transfer of such interest, the Landlord
herein named (and in case of any subsequent transfer or conveyance, the then
grantor) shall after the date of such transfer or conveyance be automatically
freed and relieved of all liability thereafter arising with respect to
performance of any covenants or obligations on the part of Landlord contained in
this Lease to be performed; provided, that any funds in the hands of Landlord or
the then grantor at the time of such transfer in which Tenant has an interest,
shall be turned over to the grantee. The covenants and obligations contained in
this Lease on the part of Landlord shall, subject to the foregoing, be binding
upon each Landlord hereunder only during his or its respective period of
ownership.
31. RULES AND REGULATIONS OF BUILDING.
31.1.
The sash doors, sashes, windows, glass doors, lights, and skylights that
reflect or admit light into the halls or other places of the Building shall not
be covered or obstructed. The toilets and urinals shall not be used for any
purpose other than those for which they were constructed, and no rubbish,
newspapers or other substances of any kind shall be thrown into them. Waste and
excessive or unusual use of water shall not be allowed. Tenant shall not mark
nor in any way deface the walls, ceilings, partitions, floors, wood, stone or
iron
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Landlord 25 Tenant
work. The expense of any breakage, stoppage or damage resulting from a violation
of this rule shall be borne by Tenant.
31.2.
All keys to locks installed on the premises shall be surrendered to
Landlord upon termination of the tenancy.
31.3.
Tenant and its guests and employees shall not bring into or keep within the
Building any animal (with the exception of guide dogs for the blind) or
motorcycle or other motor vehicle.
31.4.
No awnings are allowed. Any window covering installed by Tenant must be of
such uniform shape, color, material and make as may first be approved by
Landlord.
31.5.
Except for authorized maintenance personnel, neither Tenant nor its
employees or invitees shall go upon the roof.
31.6.
Tenant shall not use or keep in the Building any kerosene, gasoline or
inflammable or combustible fluid or material.
31.7.
Landlord shall have the right to prohibit any advertising by Tenant which,
in Landlord's reasonable opinion, tends to impair the reputation of the Building
or the Project, and upon written notice from Landlord, Tenant shall refrain from
or discontinue such advertising.
32. GENERAL PROVISIONS.
32.1. Entire Agreement.
This instrument including the Exhibits attached hereto contains all of the
agreements and conditions made between the parties hereto and may not be
modified orally or in any manner other than by an agreement in writing signed by
all of the parties hereto or their respective successors in interest. Any
executed copy of this Lease shall be deemed an original for all purposes.
32.2. Time.
Time is of the essence with respect to the performance of each and every
provision of this Lease in which time of performance is a factor. All
references to days contained in this Lease shall be deemed to mean calendar
days, unless otherwise specifically stated.
32.3. Captions.
The captions and headings of the numbered paragraphs of this Lease are
inserted solely for the convenience of the parties hereto, and are not a part of
this Lease and shall have no effect upon the construction or interpretation of
any part hereof.
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Landlord 26 Tenant
32.4. California Law.
This Lease shall be construed and interpreted in accordance with the laws
of the State of California. The language in all parts of this Lease shall in all
cases be construed as a whole according to its fair meaning and not strictly for
or against either Landlord or Tenant, and without regard to which party prepared
this Lease.
32.5. Gender; Singular and Plural.
When required by the context of this Lease, the neuter includes the
masculine, the feminine, a partnership, a corporation, or a joint venture, and
the singular shall include the plural.
32.6. Partial Invalidity.
If any provision of this Lease is held by a court of competent jurisdiction
to be invalid, void, or unenforceable, the remainder of the provisions hereof
shall nonetheless continue in full force and effect and shall in no way be
affected, impaired, or invalidated thereby.
32.7. No Warranties.
Any agreements, warranties or representations not expressly contained
herein shall not bind either Landlord or Tenant, and Landlord and Tenant
expressly waive all claims for damages by reason of any statement,
representation, warranty, promise or agreement, if any, not expressly contained
in this Lease.
32.8. Joint and Several Liability.
If Tenant is more than one person or entity, each such person or entity
shall be jointly and severally liable for the obligations of Tenant hereunder.
32.9. Successors and Assigns.
The covenants and conditions herein contained, subject to the provisions as
to assignment, shall inure to the benefit of and bind the heirs, executors,
administrators, assigns, and any other person or entity succeeding lawfully, and
pursuant to the provisions of this Lease, to the rights or obligations of the
respective parties hereto.
32.10. Rules and Regulations.
Landlord may from time to time promulgate reasonable rules and regulations
in addition to those set forth in Paragraph 31 above for the use, safety, care
and cleanliness of the premises, and the preservation of good order thereon.
Such rules and regulations shall be binding upon Tenant upon delivery of a copy
thereof to Tenant, and Tenant shall abide by all such rules and regulations. If
there is a conflict between such rules and regulations and any of the provisions
of this Lease, the provisions of this Lease shall prevail.
32.11. Authority.
The individuals signing this Lease hereby represent and warrant that they
have all necessary power and authority to execute and deliver this Lease on
behalf of Landlord and Xxxxxx, respectively.
32.12. Memorandum of Lease.
Neither Landlord nor Tenant shall record this Lease or a short form
memorandum hereof without the prior written consent of the other.
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Landlord 27 Tenant
32.13. Merger.
The voluntary or other surrender of this Lease, or a mutual cancellation
thereof, shall not work an automatic merger, but shall, at the sole option of
Landlord, either terminate all or any existing subleases or subtenancies, or
operate as an assignment to Landlord of any or all of such subleases or
subtenancies.
32.14. Force Majeure.
Any prevention of or delay in the performance by a party hereto of its
obligations under this Lease caused by inclement weather, labor disputes
(including strikes and lockouts), inability to obtain materials or reasonable
substitutes therefor, governmental restrictions, regulations, controls, action
or inaction, civil commotion, fire or other causes beyond the reasonable control
of the party obligated to perform (except financial inability), shall excuse the
performance by such party of its obligations hereunder (except the obligation of
Tenant to pay rent and other sums hereunder) for a period of one day for each
such day of delay.
32.15. Real Estate Brokers.
Each party represents to the other that it has not had any dealings with
any real estate broker, finder, or other person, with respect to this Lease, and
each party shall indemnify and hold harmless the other party from all damages,
expenses, and liabilities resulting from any claims that may be asserted against
the indemnified party by any broker, finder, or other person with whom the
indemnifying party has or purportedly has dealt.
33. OPTION(S) TO EXTEND.
33.1. Options.
Subject to the remaining provisions of this Paragraph 33, Tenant shall have two
(2) option(s) (each an "Option") to extend the term of this Lease, with each
Option respecting the time period (each an "Extended Term") set forth below:
First Option 2 1/2 years
Second Option 2 1/2 years
Tenant shall exercise an Option, if at all, by giving Landlord written notice of
Xxxxxx's intention to do so at least one hundred eighty (180) days prior to the
expiration of the original term hereof or the then current Extended Term, as the
case may be. Notwithstanding the foregoing, Tenant shall not have the right to
exercise an Option if (a) Tenant has not exercised all prior available Options
to extend the term of this Lease set forth above, or (b) Tenant is in material
default beyond any applicable cure period under this Lease at the time of the
purported Option exercise. Each Extended Term shall be upon all of the terms and
conditions hereof, except that the monthly Base Rent for such Extended Term
shall be determined in accordance with Paragraph 33.2. Upon commencement of each
Extended Term, all references herein to the "term" or "Term" of this Lease shall
be deemed to include such Extended Term.
33.2. Extended Term Rent.
Within thirty (30) days after Xxxxxxxx's receipt of Tenant's notice of
exercise of an Option, Landlord shall deliver to Tenant a proposal setting forth
the monthly Base Rent for the upcoming Extended Term, which proposal shall be
based upon the fair market rental for the premises. Such fair market rental
value shall not include the value of improvements to the premises performed by
Tenant at Tenant's expense. For the purposes of the preceding sentence, if
Xxxxxx receives reimbursement from Landlord for the cost of any improvements
pursuant to the provisions of Paragraph 34 below, such improvements shall not be
deemed to be made at Tenant's expense. If Tenant within ten (10) business days
after receipt of such proposal agrees to such proposal, the amount of monthly
Base Rent set forth in such proposal shall be binding on Landlord and Tenant.
Should Tenant object in writing to
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Landlord 28 Tenant
Landlord's proposal within ten (10) business days after receipt thereof, or fail
to respond within such period (which failure shall be deemed an objection), then
during the ten (10) business day period following Tenant's objection to
Landlord's proposal, Landlord and Tenant shall negotiate in good faith for the
purpose of reaching an agreement regarding the amount of the monthly Base Rent
during the upcoming Extended Term. In the event the parties fail to agree in a
written instrument signed by both parties upon the amount of the Base Rent for
the upcoming Extended Term within such ten (10) business day period, the monthly
Base Rent for the upcoming Extended Term shall be determined by appraisal in the
manner hereafter set forth; provided, however, that in no event shall the amount
of the monthly Base Rent for the upcoming Extended Term be less than the monthly
Base Rent payable hereunder for the last full month of the term of this Lease
(including any then current Extended Term) immediately preceding commencement of
the upcoming Extended Term. For purposes of the preceding sentence, the amount
of monthly Base Rent for the last month of the Lease term shall not be reduced
to reflect any abatement of rent which may then be in effect.
In the event it becomes necessary under this Paragraph 33.2 to determine
the fair market monthly Base Rent of the premises by appraisal, Landlord and
Tenant each shall appoint an experienced real estate appraiser who shall be a
member of the American Institute of Real Estate Appraisers ("AIREA"), and such
appraisers shall each determine the fair market monthly Base Rent for the
premises in its existing condition in accordance with the provisions below. The
appraisers shall, within twenty (20) business days after their appointment,
complete their appraisals and submit their appraisal reports to Landlord and
Tenant. If the fair market monthly Base Rent of the premises established in the
two (2) appraisals varies by five percent (5%) or more of the higher rental,
said appraisers, within ten (10) days after submission of the last appraisal,
shall appoint a third appraiser who shall be a member of the AIREA. Such third
appraiser shall, within twenty (20) business days after his appointment,
determine by appraisal the fair market monthly Base Rent of the premises, and
submit his appraisal report to Landlord and Tenant. The fair market monthly Base
Rent determined by the third appraiser for the premises shall be controlling,
unless it is less than that set forth in the lower appraisal previously
obtained, in which case the rental set forth in said lower appraisal shall be
controlling, or unless it is greater than that set forth in the higher appraisal
previously obtained, in which case the rental set forth in said higher appraisal
previously obtained shall be controlling. If either Landlord or Xxxxxx fails to
appoint an appraiser, or if an appraiser appointed by either of them fails,
after his appointment, to submit his appraisal within the required period in
accordance with the foregoing, the appraisal submitted by the appraiser properly
appointed and timely submitting his appraisal shall be controlling. If the two
appraisers appointed by Xxxxxxxx and Xxxxxx are unable to agree upon a third
appraiser within the required period in accordance with the foregoing,
application shall be made within twenty (20) days thereafter by either Landlord
or Tenant to the AIREA, which shall appoint a member of said institute willing
to serve as appraiser. The cost of all appraisals under this subparagraph shall
be borne equally by Landlord and Tenant.
34. CONSTRUCTION OF TENANT IMPROVEMENTS.
34.1. Definitions.
(a) The term "Tenant Improvements" shall mean those improvements
that Tenant desires to construct in the Building pursuant to plans and
specifications developed therefor in accordance with Paragraph 34.2(a).
(b) The term "Tenant Improvement Costs" shall mean all sums (1) paid
to contractors for labor and materials furnished in connection with construction
of the Tenant Improvements pursuant to Paragraph 34.2 below; (2) all costs,
expenses, payments, fees, and charges whatsoever paid or incurred by Tenant to
or at the direction of any city, county, or other governmental authority or
agency which are required to be paid by Tenant in order to obtain all necessary
governmental permits, licenses, inspections and approvals relating to the
construction of the Tenant Improvements and the use and occupancy of the
premises, including without limitation all in lieu fees and utility fees; (3)
engineering and architectural fees for services required in connection with the
design and construction of the Tenant
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Landlord 29 Tenant
Improvements; and (4) premiums, if any, for course of construction insurance and
for payment and completion bonds relating only to construction of the Tenant
Improvements.
(c) The term "Tenant's Improvement Allowance" shall mean the maximum
amount Landlord is required to spend toward the payment of Tenant Improvement
Costs, which amount is Four Hundred Twelve Thousand Five Hundred Dollars
($412,500).
(d) The term "substantially complete" shall mean all improvements
required by the Approved Plans (as defined in Paragraph 34.2(a) below) have been
installed, subject to any required repair and replacement items set forth on the
"punchlist" prepared by Landlord and Tenant pursuant to Paragraph 34.3 below.
34.2. Procedure and Time Schedules.
(a) Approval of Plans. At such time during the initial five (5)
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year term of this Lease that Tenant elects to perform improvements or
modifications to the premises, Tenant shall prepare and deliver to Landlord for
its approval preliminary plans and specifications of the Tenant Improvements.
Xxxxxxxx's approval shall not be unreasonably withheld and Landlord shall grant
or withhold such approval within ten (10) days following Landlord's receipt of
such preliminary plans and specifications. Within sixty (60) days after
Xxxxxxxx's approval, Tenant shall prepare final plans, specifications and
working drawings for the Tenant Improvements that are consistent with and are
logical evolutions of the preliminary plans and specifications approved by
Landlord. As soon as the final plans, specifications and working drawings are
completed, Tenant shall deliver the same to Landlord for its approval, which
shall not be unreasonably withheld. Landlord shall grant or withhold its
approval within ten (10) days of Landlord's receipt of the final plans,
specifications and working drawings. In all events, the parties shall use their
best efforts to reach agreement so that such plans may be submitted for
governmental approval as soon as reasonably practicable. Landlord and Tenant
shall indicate their approval thereof by initialing and dating the same.
Landlord's approval of such plans and specifications shall not constitute any
representation or warranty by Landlord regarding the sufficiency or adequacy of
such plans and specifications for any purpose, and Tenant hereby waives any
claims against Landlord which are based upon or arise in connection with
Xxxxxxxx's approval of such plans and specifications. Tenant shall submit such
final plans, specifications and working drawings to all appropriate governmental
agencies for approval. Tenant will notify Landlord of any changes required by
any governmental agencies, and all such changes shall be subject to Landlord's
reasonable approval, which approval shall be granted or withheld with ten (10)
days of Landlord's receipt of such changes. The final plans, specifications and
working drawings as approved, and all change orders specifically permitted
pursuant to Paragraph 34.2(c) below, shall be referred to herein as the
"Approved Plans."
(b) Contractors. The Tenant Improvements shall be constructed by
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Tenant and its general contractor, which shall be subject to Landlord's
reasonable approval.
(c) Changes To Approved Plans for Tenant Improvements. Following
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final approval by Landlord and Tenant of the Approved Plans, Tenant shall have
the right to modify the Approved Plans subject to the condition that any
modification shall be subject to Landlord's prior written approval, such
approval not to be unreasonably withheld or conditioned. Landlord shall advise
Tenant of its approval or disapproval of such modifications within seven (7)
days of Landlord's receipt of revised plans and specifications setting forth
such modifications.
(d) Commencement and Completion of the Tenant Improvements. As soon
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as (1) the Approved Plans have been developed as provided above, and (2) all
necessary governmental approvals have been obtained, then Tenant shall
thereafter commence construction of such improvements and shall diligently
prosecute such construction to completion. Such improvements shall be
constructed by Tenant in accordance with the Approved Plans, and in compliance
with all applicable regulations, ordinances, building codes, and statutes of
lawful governmental authority. The provisions of Paragraphs 9 and 10 above shall
be applicable to Tenant's construction of the Tenant Improvements.
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Landlord 30 Tenant
(e) Payment of Cost of Tenant Improvements. Landlord shall
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reimburse Tenant all or a portion of the Tenant Improvement Costs up to an
amount equal to Xxxxxx's Improvement Allowance. Tenant shall pay the entire
amount of the Tenant Improvement Costs in excess of the Tenant's Improvement
Allowance. Landlord shall not be obligated to disburse to Tenant any portion of
the Tenant's Improvement Allowance until: (i) Tenant has received and delivered
to Landlord evidence of a satisfactory final inspection of the Tenant
Improvements from governmental entities with applicable jurisdiction, and (ii)
Landlord has received and approved reasonably detailed supporting documentation
evidencing Tenant's expenditure of at least One Hundred Thousand Dollars
($100,000) toward the payment of the Tenant Improvement Costs for which Xxxxxx
seeks reimbursement from Landlord. Landlord's approval of such evidence shall
not be unreasonably withheld and Landlord shall use reasonable efforts to grant
or withhold such approval within ten (10) days of Landlord's receipt of such
documentation. Notwithstanding any provisions of this Lease to the contrary,
Landlord's maximum required contribution toward the payment of Tenant
Improvement Costs shall be Four Hundred Twelve Thousand Five Hundred Dollars
($412,500).
(f) Timing of Construction. Landlord acknowledges and agrees that
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Tenant shall be entitled to request Landlord's consent to Tenant's construction
of Tenant Improvements and Landlord's payment of the cost thereof, up to a
maximum aggregate amount equal to the Tenant's Improvement Allowance, at any
time during the initial five (5) year term of this Lease. Such construction may
be performed by Tenant in one or more phases, provided that Landlord shall have
no obligation to disburse any portion of the Tenant's Improvement Allowance
until completion and final inspection of each such phase.
34.3. Delivery of Possession.
When the Tenant Improvements (or separate phases thereof) are substantially
completed, Landlord and Tenant shall together walk through and inspect the
Tenant Improvements so completed (which inspection shall include the testing of
any utility facilities, lighting, HVAC equipment, and other service equipment)
using their best efforts to discover all incomplete or defective construction.
After such inspection has been completed, a list of "punchlist" items shall be
prepared which the parties agree are to be corrected by Xxxxxx. Tenant shall use
due diligence to complete and/or repair such "punchlist" items within thirty
(30) days.
35. PARKING LOT LIGHTING
Landlord and Tenant have agreed that certain improvements and/or
modifications should be made to the parking lot lighting installed in the
premises. Landlord shall consult with Tenant to obtain Tenant's recommendations
regarding such improvements and/or modifications and shall advise Tenant of
Landlord's planned modifications to the parking lot lighting on or about the
date which is thirty (30) days following the full execution of this Lease,
provided Tenant has its recommendations in a reasonably timely fashion. Such
planned improvements and/or modifications shall be subject to the reasonable
approval of both Landlord and Tenant, and shall be performed by Landlord at its
sole cost. The parties acknowledge that such improvements and/or modifications
are not intended to fully replace the existing parking lot lighting
improvements, but rather to supplement such improvements to the extent
reasonably necessary to provide parking lot lighting for the premises which Is
consistent with other good quality office buildings in the vicinity of the
premises.
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Landlord 31 Tenant
IN WITNESS WHEREOF, Xxxxxxxx and Xxxxxx have executed this Lease as of the
date first above specified. Delivery of this Lease to Landlord, duly executed by
Xxxxxx, constitutes an offer by Tenant to lease the premises as herein set
forth, and under no circumstances shall such delivery be deemed to create an
option or reservation to lease the premises for the benefit of Tenant. This
Lease shall only become effective and binding upon execution of this Lease by
Landlord and delivery of a signed copy to Tenant.
LANDLORD:
San Xxxxx Investment Company,
a California limited partnership
By: /s/ Xxxxxx X. Xxxx
------------------------------------
Xxxxxx X. Xxxx, General Partner
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Xxxxxxx X. Xxxxx, General Partner
TENANT:
Corsair Communications, a Delaware
corporation
By: /s/ Xxxx Xxx Xxxxxx
------------------------------------
Its: President
-----------------------------------
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Landlord 32 Tenant
EXHIBIT A
ALL THAT certain real property situate in the City of Palo Alto, County of Santa
Xxxxx, State of California described as follows:
COMMENCING at the Northeasterly corner of Lot 5 of Tract #4781 entitled
"Stanford Industrial Park" as filed in the Office of the Recorder of Santa Xxxxx
County on November 13, 1969 in Book 261 of maps at Pages 40 and 41. Said
Northeasterly corner lying on the Westerly line of Hillview Avenue (80 feet in
width); thence from said point of commencement along said Westerly line of
Hillview Avenue North 15 degrees 27'55" West 720.00 feet to the TRUE POINT OF
BEGINNING of the Parcel to be described; thence from said TRUE POINT OF
BEGINNING and leaving said Westerly line of Hillview Avenue South 72 degrees
32'05" West 685.00 feet to a point on the Easterly line of Parcel C as said
Parcel is shown upon that certain parcel map filed in the Officer of the
Recorder of Santa Xxxxx County on May 22, 1969 in Book 254 of Parcel Maps at
Page 1; thence along said Easterly line of Parcel C North 15 degrees 27'55" West
360.37 feet; thence leaving said Easterly line North 74 degrees 32'05" East
685.00 feet to a point on the aforementioned Westerly line of Hillview Avenue;
thence along said Westerly line South 15 degrees 27'55" East 360.37 feet to the
TRUE POINT OF BEGINNING.
CONTAINING 5.667 Acres of land more or less
EXCEPTING therefrom an easement in favor of the Purissima Hills County Water
District for water line purposes 5.00 feet in width being the Easterly 5.00 feet
of the above described parcel and being more full described in Volume 7952 of
Official Records of Santa Xxxxx County at Page 197.
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Landlord EXHIBIT A Tenant
EXHIBIT B
PICTURE
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Landlord EXHIBIT B Tenant
