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EXHIBIT 10
LEASE AGREEMENT
by and between
000 XXXX XXXXX ASSOCIATES, L.P.,
A CALIFORNIA LIMITED PARTNERSHIP
("LANDLORD")
and
BUSINESS OBJECTS AMERICAS, A DELAWARE CORPORATION
("TENANT")
DATED AS OF AUGUST 3, 2000
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EXHIBITS
Exhibit "A" Site Plan (showing Project, Land, Buildings and Premises)
Exhibit "B" Delivery Date Memorandum
Exhibit "C" Work Letter
Exhibit "C-1" Landlord's Plans
Exhibit "D" Form of Tenant Estoppel Certificate
Exhibit "E" Subordination, Nondisturbance and Attornment Agreement
Exhibit "F" Rules and Regulations
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BASIC LEASE INFORMATION
Lease Date: August 3, 2000
Landlord: 000 Xxxx Xxxxx Associates, L.P., a California limited
partnership
Managing Agent: The Mozart Development Company
Landlord's and Managing
Agent's Address:
c/o The Mozart Development Company
0000 Xxxx Xxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attn: Xxxx Xxxxxx & Xxxxx Xxxxx
Tenant: Business Objects Americas, a Delaware corporation
TENANT'S ADDRESS: FOR NOTICE FOR BILLING
______________________ Same as for Notice
______________________
______________________
Attn:_________________
Land: The real property outlined on the site plan attached
hereto as Exhibit "A"
Premises: The Rentable Area within two (2) separate buildings to
be constructed on the Land in accordance with this Lease
(each, a "Building" and collectively, the "Buildings").
"Building 1" is a three story building, and "Building 2"
is a two story building, and each will be located and
configured as generally shown on the site plan attached
hereto as Exhibit "A".
Project: The Project shall consist of the Buildings, the Land and
all other improvements now or hereafter located on the
Land, and may be expanded to include other land and
improvements in accordance with Paragraph 1(b).
Rentable Area of the Approximately 75,354 rentable square feet in Building 1,
Premises: and approximately 50,890 rentable square feet in
Building 2 ("Rentable Area"). The Premises will be
measured by Landlord's architect upon completion of the
Base Building Improvements for the purposes of Rentable
Area to the exterior surface of the outside walls or
exterior glass lines, including balconies (but excluding
the third floor exterior balcony on Building 1) with no
deductions for vertical penetrations. Within thirty (30)
days after substantial completion of the Base Building
Improvements, Landlord will provide to Tenant a
certification of Landlord's architect with respect to
its calculations of the actual Rentable Area of the
Premises, and the Rentable Area shown in such
certification shall be conclusive and binding on the
parties for purposes of calculating Monthly Base Rent
and the Tenant Allowance hereunder and not subject to
remeasurement.
Parking Spaces: All of the spaces located on the Project as it is
initially defined (approximate ratio of 3.5 spaces per
1,000 rentable square feet of space)
Tenant's Use of the General office use including shipping, receiving and
Premises: storage of products, customer training and other legal
related uses (excluding uses that involve the
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use of Hazardous Substances, as defined in Paragraph 41,
beyond levels typical for office use).
Lease Term: Ten (10) years (the "Initial Term"), with the right to
extend for one (1) additional six (6) year term (the
"Extension Term") in accordance with Paragraph 42. The
Initial Term and the Extension Term (if any) shall
collectively be defined as the "Term".
Scheduled Delivery December 15, 2000
Date:
Scheduled Commencement Ninety (90) days after the Delivery Date
Date:
Tenant Allowance: $17 per rentable square foot of the Rentable Area of the
Premises, to be used and disbursed as more specifically
provided in Exhibit "C".
Monthly Base Rent: Initially, $4.15 per rentable square foot of the
Rentable Area of the Premises.
Monthly Base Rent On each anniversary of the Commencement Date, the
Adjustment: Monthly Base Rent shall increase by four percent (4%) of
the Monthly Base Rent for the immediately prior year.
Tenant's Share of 100%
Expenses and Taxes:
Security Deposit: Tenant shall provide and maintain a letter of credit in
the Required Amount as more specifically provided in
Paragraph 33, which amount may be reduced during the
Term in accordance with such paragraph.
Guarantor of Lease: Business Objects, S.A., a company organized under the
laws of France ("Guarantor").
Landlord's Broker: Xxxx Xxxxxxxxx and Xxxxxx Xxxxxx of CPS
Tenant's Broker: Xxxx XxXxxxx of Colliers International
Broker's Fee or Landlord, pursuant to separate agreement
Commission, if any,
paid by:
The foregoing Basic Lease Information is hereby incorporated into and
made a part of this Lease. Each reference in this Lease to any of the Basic
Lease Information shall mean the respective information hereinabove set forth
and shall be construed to incorporate all of the terms provided under the
particular paragraph pertaining to such information. In the event of any
conflict between any Basic Lease Information and the Lease, the latter shall
control.
LANDLORD:
000 XXXX XXXXX ASSOCIATES, L.P.,
a California limited partnership
By:__________________________________
Its:_________________________________
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TENANT:
BUSINESS OBJECTS AMERICAS,
a Delaware corporation
By:__________________________________
Its:_________________________________
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LEASE AGREEMENT
THIS LEASE AGREEMENT (the "Lease") is made and entered into as of August
3, 2000, by and between 000 XXXX XXXXX ASSOCIATES, L.P., a California limited
partnership (herein called "Landlord"), and BUSINESS OBJECTS AMERICAS, a
Delaware corporation (herein called "Tenant").
1. LEASED PREMISES.
(a) Upon and subject to the terms, covenants and conditions
hereinafter set forth, Landlord hereby leases to Tenant and Tenant hereby hires
from Landlord those premises (the "Premises") comprising two (2) entire
buildings to be constructed on the Land in the general location and
configuration as shown on the site plan attached hereto as Exhibit "A"
(collectively, the "Buildings" and each individually, a "Building"), specified
in the Basic Lease Information attached hereto. The Buildings, together with the
Land and other improvements located within the area outlined on Exhibit "A", is
referred to herein as the "Project." Landlord currently has the contractual
right to acquire title to the Land and Buildings from XSI Properties, Inc.
("Seller"), and will use commercially reasonable efforts to acquire title to the
Land and Buildings prior to the Delivery Date. However, Tenant acknowledges that
Landlord has not acquired the Land nor constructed the Buildings as of the date
of this Lease. In the event Landlord has not acquired title to the Land and
Buildings on or before the Outside Delivery Date (as defined in Paragraph 3(b)),
Tenant shall have the right to terminate this Lease as and when provided in
Paragraph 3(b).
(b) Landlord shall have the right, at any time and from time to
time, and without incurring any liability to Tenant and without constituting an
eviction (constructive or otherwise), and without entitling Tenant to any
abatement of Rent or to terminate this Lease or otherwise releasing Tenant from
any of Tenant's obligations under this Lease, to do any of the following;
provided that in each instance, in Landlord's reasonable judgment, Tenant's
costs of occupancy of the Premises are not materially increased and/or Tenant's
rights under this Lease are not materially diminished as a result solely of such
action (except as required by applicable governmental authority,
quasi-governmental authority, or Laws), unless Tenant consents to such action in
writing in advance, which consent shall not be unreasonably withheld,
conditioned or delayed:
(i) construct additional buildings and improvements on the
Land in such locations as Landlord may determine, in its sole discretion;
(ii) expand the land and improvements that are included in
the "Project" to include other property acquired by Landlord or its
affiliates which is contiguous to the Project (as such term is defined at
any given time), regardless or whether any such property is leased to
Tenant or leased to, sold to or occupied by a third party or third
parties; and
(iii) reduce the land and improvements that are included in
the Project, subdivide the Project, or otherwise reconfigure the Project
in any way.
Tenant shall use commercially reasonable efforts to cooperate with Landlord in
connection with any construction or development activities with respect to any
such construction of buildings or improvements, or expansion or reconfiguration
of the Project, including executing any commercially reasonable and necessary
conditions, covenants, restrictions, encumbrances, or other commercially
reasonable documents and instruments for the benefit of other portions of the
Project, at Landlord's request. In addition, Tenant acknowledges that during any
such construction and development, Landlord, its tenants, and their respective
employees, contractors and agents will require access across and through the
Common Areas for purposes of construction and development of additional
buildings and improvements in the Project (as it may exist from time to time)
and use of portions of the Common Area for construction staging in connection
with such construction and development, including, without limitation, for the
storage of all necessary materials, tools and equipment, and Landlord shall not
be liable to Tenant for any interference with Tenant's use of the Common Areas
with respect to such activities or any noise, vibration, or other disturbance to
Tenant's business at the Premises which may result from such activities, so long
as the Building structure is not materially adversely affected by such
activities, the Project continues to be in compliance with all
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applicable Laws, the number of parking spaces available to Tenant at all times
is in compliance with applicable laws, Tenant at all times has reasonable access
to the Buildings, and Landlord takes commercially reasonable steps to minimize
any unreasonable interference with Tenant's Permitted Use (as defined below) of
the Premises arising from such activities.
(c) As used herein, the term "Building Common Area" shall mean all
areas and facilities within one or both of the Buildings that are not, at any
time when Tenant is not the only occupant of one or both of the Buildings,
designated by Landlord for the exclusive use of the Tenant or any other tenant
or occupant of the applicable Building, including the areas devoted to Building
Systems (as defined in Paragraph 8(b)) and other facilities and equipment
servicing one or both Buildings as a whole. The term "Project Common Area" shall
mean all areas and facilities within the Project that are not designated by
Landlord for the exclusive use of Tenant or any other tenant or other occupant
of the Project, and that are located outside the perimeter footings of any
buildings now or hereafter located in the Project, including the parking areas,
access and perimeter roads, pedestrian sidewalks, landscaped areas, trash
enclosures, recreation areas and the like. The term "Common Area" means the
Building Common Area and the Project Common Area, collectively.
2. OCCUPANCY AND USE. Tenant may use and occupy the Premises for the
purposes specified in the Basic Lease Information ("Permitted Use"), subject to
the terms and conditions of this Lease, and for no other use or purpose without
the prior written consent of Landlord. Landlord shall have the right to grant or
withhold consent to a use other than as specified in the Basic Lease Information
in its sole discretion. Tenant shall be entitled to the nonexclusive use of the
Common Area with Landlord and other occupants (if any) of the Project in
accordance with the Rules and Regulations as provided in Paragraph 17.
Notwithstanding anything to the contrary in the Basic Lease Information or in
this Lease, Tenant understands and agrees that (a) one or more Declaration of
Covenants, Conditions and Restrictions ("CC&Rs"), and/or (b) a ground lease,
and/or (c) certain other easements, covenants, conditions, restrictions, and
access agreements recorded in the official records of Santa Xxxxx County
(collectively, including any CC&Rs and/or ground lease, the "Encumbrances") may
encumber all or a portion of the Project now or in the future, and that Tenant's
occupancy and use of the Premises and use of the Common Area may be restricted
by such Encumbrances. If necessary, Tenant shall execute such documents as are
reasonably necessary to cause this Lease to become subordinate to all such
restrictions on the use of the Premises specified in any such Encumbrance.
3. TERMS AND POSSESSION.
(a) TERM. The term of this Lease (the "Term") shall commence on
the Commencement Date (as defined below) and, unless sooner terminated pursuant
to the express provisions of this Lease, shall expire on the date that is one
day prior to the tenth anniversary of the Commencement Date, subject to
extension in accordance with Paragraph 42 to the date that is one day prior to
the sixth anniversary of the Extension Term, if any (such date being the
"Expiration Date"). The "Commencement Date" shall be the earlier to occur of (i)
the Scheduled Commencement Date set forth in the Basic Lease Information, (ii)
the date on which Tenant has substantially completed the Tenant Improvements (as
defined in the Work Letter) in accordance with the Work Letter, or (iii) the
date upon which Tenant actually commences business in any portion of the
Premises.
(b) DELIVERY DATE. The "Delivery Date" shall be the date on which
Landlord has (i) completed the construction components of the Base Building
Improvements required to be completed by Landlord in order for the "Initial
Tenant Work Date" (as defined in the Work Letter) to occur, and (ii) tendered
possession of the Premises to Tenant subject to Landlord's continuing right to
access the Premises and take all steps required to complete the Base Building
Improvements, provided, however, that if the Delivery Date does not occur on or
before April 1, 2001 (as may be extended as provided below, the "Outside
Delivery Date"), or if Landlord has not acquired title to the Land and Buildings
on or before the Outside Delivery Date, Tenant shall have the right to terminate
this Lease by written notice to Landlord at any time within five (5) days after
the Outside Delivery Date as so extended. If Tenant does not elect to terminate
this Lease within such five (5) day period, Tenant shall again have the option
to terminate this Lease by delivering written notice to Landlord within five (5)
business days after the thirtieth (30th) day following the Outside Delivery Date
as so extended, and each thirtieth (30th) day thereafter (each such date,
together with the initial applicable date as so extended, a "Window Date"), if
either the Delivery Date has not
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occurred or the Landlord has not acquired title to the Land and Buildings on or
before any such Window Date. If Tenant does not deliver written notice of
termination to Landlord within any such five day period after a Window Date, all
rights and obligations of the parties under this Lease shall continue
notwithstanding the delay in the Delivery Date or acquisition of title. Tenant's
sole and exclusive remedy in the event of delay in the Delivery Date or
Landlord's acquisition of title to the Land or Buildings shall be to terminate
this Lease as provided in this Paragraph 3(b). The Outside Delivery Date shall
be extended as follows: (A) one day for each day of delay caused by Tenant
Delays (as defined in the Work Letter); and (B) by the amount of time required
to complete any arbitration process resulting from disputes between Landlord and
Tenant under the Work Letter plus an additional thirty (30) days. All of the
rights and obligations of the parties under this Lease (other than Tenant's
obligation to pay Monthly Base Rent and Additional Charges for Expenses and
Taxes) shall commence on the Delivery Date. Tenant shall be deemed to occupy the
Premises from and after the Delivery Date. Within five (5) business days after
the Delivery Date, the parties shall execute a letter confirming the Delivery
Date and certifying that Tenant has accepted delivery of the Premises, in the
form attached hereto as Exhibit "B" (the "Delivery Date Memorandum"). Either
party's failure to request execution of, or to execute, the Delivery Date
Memorandum shall not in any way alter the Delivery Date.
(c) CONSTRUCTION OF IMPROVEMENTS. Completion of the Base Building
Improvements (as defined in the Work Letter) by Landlord and the Tenant
Improvements by Tenant shall be governed by the terms and conditions of Work
Letter which is attached hereto as Exhibit "C". Tenant's obligation to construct
the Tenant Improvements pursuant to the Work Letter is independent of, and in
addition to, Tenant's obligation to pay Rent under this Lease. Landlord
represents and warrants to Tenant that to Landlord's best knowledge, upon
substantial completion of the Base Building Improvements, the Land and Buildings
will not be in violation of any applicable Laws, subject to completion of the
Tenant Improvements to the extent such completion is required for compliance
with any Law ("Landlord's best knowledge" being defined for such purposes as the
current actual knowledge of Xxxxx Xxxxx after reasonably appropriate and
diligent inquiry in connection with the acquisition of the Land and design and
construction of the Base Building Improvements). Tenant represents and warrants
to Landlord that, to Tenant's best knowledge, upon substantial completion of the
Tenant Improvements, the Premises will not be in violation of any applicable
Laws ("Tenant's best knowledge" being defined for such purposes as the current
actual knowledge of Xxxxxx Xxxxx after reasonably appropriate and diligent
inquiry in connection with the design and construction of the Tenant
Improvements), except to the extent such non-compliance is caused by the
non-compliance of the Base Building Improvements, Land or Buildings with
applicable Laws. Except as otherwise expressly set forth herein, Tenant
acknowledges that Landlord has not made any representation or warranty with
respect to the construction of the Base Building Improvements or the condition
of the Premises or the Common Area, or with respect to the suitability or
fitness of any of the foregoing for the conduct of Tenant's permitted use or for
any other purpose. By occupying the Premises, Tenant shall be deemed to have
accepted the same as suitable for the purpose herein intended, subject to
completion of items on Landlord's architect's punch list with respect to the
Base Building Improvements. Upon Tenant's request, Landlord shall use reasonable
efforts to enforce any construction warranties Landlord obtains with respect to
components of the Base Building Improvements. If Tenant is not satisfied, in
Tenant's reasonable discretion, with Landlord's actions in enforcing such
warranties, Tenant may upon written notice to Landlord take any actions
necessary in Tenant's reasonable judgment to enforce such warranties directly,
and Landlord shall take all commercially reasonable action to cooperate with
Tenant, including assigning to Tenant Landlord's rights with respect to such
warranties.
(d) CERTIFICATE OF OCCUPANCY. After substantial completion of the
Tenant Improvements, Tenant shall immediately apply for, and use best efforts to
obtain within fifteen (15) business days, a certificate of occupancy (or
equivalent documentation) for the Premises. Tenant shall promptly deliver to
Landlord copies of the certificate of occupancy, and all other permits, consents
and approvals from the appropriate governmental agencies which are necessary for
occupancy and operation of the Premises as contemplated by this Lease to the
extent they are requested by Landlord. Tenant (or its sublessees or assigns as
permitted pursuant to Paragraph 10) shall, no later than ninety (90) days after
the date of issuance by the City of San Xxxx of a Certificate of Occupancy or
its equivalent concerning the Tenant Improvements, occupy a portion of the
Premises. This Paragraph 3(d) shall not be construed as an obligation of Tenant
to continuously occupy the Premises.
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4. RENT; RENT ADJUSTMENTS; ADDITIONAL CHARGES FOR EXPENSES AND TAXES.
(a) MONTHLY BASE RENT AND ADDITIONAL CHARGES. Tenant's obligation
to pay Monthly Base Rent and Additional Charges for Expenses and Taxes hereunder
shall commence on the Commencement Date. Commencing on the Commencement Date and
throughout the Term of this Lease, Tenant shall the pay monthly base rent
specified in the Basic Lease Information, as adjusted pursuant to Paragraph 4(b)
(as so adjusted from time to time, "Monthly Base Rent"), on the first day of
each month, in advance, with the first month's Monthly Base Rent and Additional
Charges for Expenses and Taxes (as defined below), as reasonably estimated by
Landlord, due upon execution of this Lease, in lawful money of the United States
(without any prior demand therefor and without deduction or offset whatsoever,
except as expressly provided in this Lease) to Landlord or its Managing Agent at
the address specified in the Basic Lease Information or to such other firm or to
such other place as Landlord or its Managing Agent may from time to time
designate in writing. In addition, Tenant shall pay to Landlord all charges and
other amounts whatsoever as provided in this Lease ("Additional Charges") at the
place where the Monthly Base Rent is payable, and Landlord shall have the same
remedies for a Default in the payment of Additional Charges as for a Default in
the payment of Monthly Base Rent. As used herein, the term "Rent" shall include
all Monthly Base Rent and Additional Charges (including, without limitation,
Additional Charges for Real Estate Taxes and Expenses pursuant to Paragraph 4(c)
below, and Additional Charges pursuant to Paragraphs 7, 8(e), 9, 11(d) and 24).
If the Commencement Date occurs on a day other than the first day of a calendar
month, or the Expiration Date occurs on a day other than the last day of a
calendar month, then the Monthly Base Rent and Additional Charges for such
fractional month shall be prorated on a daily basis.
(b) ANNUAL ADJUSTMENTS IN MONTHLY BASE RENT. The Monthly Base Rent
under Paragraph 4(a) shall be adjusted throughout the Term (including any
Extension Term) as provided in the Basic Lease Information under the heading
"Monthly Base Rent Adjustment".
(c) ADDITIONAL CHARGES FOR EXPENSES AND TAXES.
(i) DEFINITIONS OF ADDITIONAL CHARGES: For purposes of this
Paragraph 4(c), the following terms shall have the meanings hereinafter
set forth:
(A) "TAX YEAR" shall mean each twelve (12) consecutive
month period commencing January 1st of the calendar year during
which the Commencement Date of this Lease occurs, provided that
Landlord, upon notice to Tenant, may change the Tax Year from time
to time to any other twelve (12) consecutive month period and, in
the event of any such change, Tenant's Share of Real Estate Taxes
(as hereinafter defined) shall be equitably adjusted for the Tax
Years involved in any such change.
(B) "TENANT'S SHARE" shall mean the percentage figure
so specified in the Basic Lease Information.
(C) "REAL ESTATE TAXES" shall mean all taxes,
assessments and charges levied upon or with respect to the Project
or any personal property of Landlord used in the operation thereof,
or Landlord's interest in the Project or such personal property.
Real Estate Taxes shall include, without limitation, all general
real property taxes and general and special assessments, charges,
fees or assessments for transit, housing, police, fire or other
governmental services or purported benefits to the Project
(provided, however, that any refunds of Real Estate Taxes paid by
Tenant shall be credited against Tenant's further obligation to pay
Real Estate Taxes during the Term or refunded to Tenant if received
by Landlord within one year after the Expiration Date), service
payments in lieu of taxes, and any tax, fee or excise on the act of
entering into this Lease, or any other lease of space in the
Buildings, or on the use or occupancy of the Buildings or any part
thereof, or on the rent payable under any lease or in connection
with the business of renting space in the Buildings, that are now or
hereafter levied or assessed against
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Landlord by the United States of America, the State of California,
or any political subdivision, public corporation, district or any
other political or public entity, and shall also include any other
tax, fee or other excise, however described, that may be levied or
assessed as a substitute for, or as an addition to, in whole or in
part, any other Real Estate Taxes, whether or not now customary or
in the contemplation of the parties on the date of this Lease. Real
Estate Taxes shall not include franchise, transfer, inheritance or
capital stock taxes or income taxes measured by the net income of
Landlord from all sources unless, due to a change in the method of
taxation, any of such taxes is levied or assessed against Landlord
as a substitute for, in whole or in part, any other tax that would
otherwise constitute a Real Estate Tax. Additionally, Real Estate
Taxes shall not include any assessments or like charges to pay for
any remediation of contamination from any Hazardous Substance
(defined in Paragraph 41 hereof) existing as of the Delivery Date
unless introduced in, on, under or about the Premises by Tenant or
Tenant's employees, agents, contractors or invitees. Real Estate
Taxes shall also include reasonable legal fees, costs and
disbursements incurred in connection with proceedings to contest,
determine or reduce Real Estate Taxes; provided that such fees,
costs and disbursements do not exceed the actual savings in Real
Estate Taxes obtained by Tenant over the Term of the Lease. If any
assessments are levied on the Project, Tenant shall have no
obligation to pay more than that amount of annual installments of
principal and interest that would become due during the Term had
Landlord elected to pay the assessment in installment payments, even
if Landlord pays the assessment in full.
(D) "EXPENSES" shall mean the total costs and expenses
paid or incurred by Landlord in connection with the management,
operation, maintenance and repair of the Project, including, without
limitation (i) the cost of air conditioning, electricity, steam,
heating, mechanical, ventilating, elevator systems and all other
utilities, to the extent provided by Landlord, and the cost of
supplies and equipment and maintenance and service contracts in
connection therewith; (ii) the cost of repairs and general
maintenance and cleaning; (iii) the cost of fire, extended coverage,
boiler, sprinkler, public liability, property damage, rent,
earthquake and flood (in each case if Landlord elects to obtain it
and if Landlord determines that it is available at commercially
reasonable rates, provided that Tenant recognizes that Landlord
intends to initially carry earthquake and flood insurance on the
Project) and other insurance for the Project obtained by Landlord,
or otherwise obtained by Landlord in connection with the Project,
all including, without limitation, insurance premiums and any
deductible amounts paid by Landlord, including, without limitation,
the insurance required by Paragraph 11(f); (iv) fees, charges and
other costs directly related to the operation of the Project (as
distinct from the operation of the partnership which owns the
Project), including management fees, consulting fees, legal fees and
accounting fees and fees of all independent contractors engaged by
Landlord, but only to the extent such fees are directly related to
the operation of the Project or reasonably charged by Landlord if
Landlord performs management services in connection with the
Project, (though the management fee payable to Landlord or its
affiliates shall not exceed the cap noted in the following
paragraph); (v) the cost of any capital improvements made to the
Project after the Commencement Date (a) as a labor saving device or
to effect other economies in the operation or maintenance of the
Project (from which a reasonable person would anticipate that
savings would actually result), (b) to repair or replace capital
items which are no longer capable of providing the services required
of them (other than in connection with a casualty which is addressed
by Paragraph 21), or (c) that are made to the Project after the date
of this Lease and are required under any Laws (as defined in
Paragraph 6) (excluding, however, any capital improvements required
by Laws that are Tenant's responsibility under Paragraph 6, which
shall be paid directly by Tenant pursuant to Paragraph 6), where
such capital improvements were not required under any such Laws to
be completed with respect to the Project prior to the date the Lease
was executed; and the cost of capital improvements incurred by
Landlord, which are the responsibility of Tenant pursuant to this
Lease, shall be amortized over the useful life of the capital item
in question as determined in accordance with generally accepted
accounting principles ("GAAP"), together with interest on the
unamortized balance at the greater of (x) the rate paid by Landlord
on funds borrowed from an institutional lender for the purpose of
constructing such capital improvements; or (y) 10% per annum;
provided, however, the amount of the cost of capital improvements
which may be
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included within Expenses pursuant to this clause (v) shall be the
greater of (I) the amount that would be payable pursuant to the
foregoing amortization or (II) $.02 per square foot of the Rentable
Area of the Premises per month (and to the extent the amount under
this clause (II) exceeds the amount that would be payable under
clause (I), such excess shall be credited against the unamortized
balance of the cost of capital improvements in the inverse order in
which they would be payable by Tenant under clause (i)); and (vi)
any other reasonable expenses of any other kind whatsoever
reasonably incurred in managing, operating, maintaining and
repairing the Project. Any "deductible" amounts relating to capital
improvements required to be paid by Tenant hereunder in connection
with any property or earthquake insurance policy carried by Landlord
shall be amortized over the useful life of the restoration work to
which such deductible amount relates in accordance with GAAP, in the
same manner as other capital improvements that are included in
Expenses as provided above.
Notwithstanding anything to the contrary herein contained, Expenses shall
not include, and in no event shall Tenant have any obligation to pay for
pursuant to this Paragraph 4 or Paragraph 8(b), (aa) the initial
construction cost of the Base Building Improvements or acquisition cost of
the Land; (bb) the cost of providing tenant improvements to Tenant or any
other tenant and costs of preparing any other premises in the Project for
occupancy by any other tenant, including brokerage commissions, attorneys
fees and other fees incurred in connection with the leasing thereof; (cc)
any rent payable pursuant to a ground lease, and debt service (including,
but without limitation, interest, principal and any impound payments)
required to be made on any mortgage or deed of trust recorded with respect
to all or any portion of the Project other than debt service and financing
charges imposed pursuant to Paragraph 4(c)(1)(D)(v) above; (dd) the cost
of special services, goods or materials provided to any tenant; (ee)
depreciation; (ff) the portion of a management fee paid to Landlord or its
affiliates in excess of three percent (3%) of Monthly Base Rent and
Additional Charges for Expenses (excluding the management fee and Taxes);
(gg) costs occasioned by Landlord's fraud or willful misconduct under
applicable laws; (hh) costs for which Landlord has a right of and has
received reimbursement from others; (ii) costs to correct any construction
or design defects in the original construction of the Base Building
Improvements; (jj) repairs, replacement and upgrades to the structural
elements of the Base Building Improvements (e.g.. steel frame and slab)
and structural components of the roof (not including the roof membrane
above the concrete over metal deck), other than capital improvements
pursuant to Paragraph 4(c)(1)(D)(v) above; (kk) environmental pollution
remediation related costs for which Landlord has indemnified Tenant
pursuant to Paragraph 41(c); (ll) advertising or promotional expenditures;
(mm) leasing commissions; (nn) expense reserves (except as contemplated by
Paragraph 4(c)(1)(D)(v) above), and (oo) costs incurred in connection with
negotiations or disputes with any other occupant (or prospective occupant)
of the Project. All costs and expenses shall be determined in accordance
with GAAP which shall be consistently applied (with accruals appropriate
to Landlord's business).
(E) "EXPENSE YEAR" shall mean each twelve (12)
consecutive month period commencing January 1 of the calendar year
during which the Commencement Date of the Lease occurs, provided
that Landlord, upon notice to Tenant, may change the Expense Year
from time to time to any other twelve (12) consecutive month period,
and, in the event of any such change, Tenant's Share of Expenses
shall be equitably adjusted for the Expense Years involved in any
such change.
(ii) PAYMENT OF REAL ESTATE TAXES: Commencing on the
Commencement Date, Tenant shall pay to Landlord as Additional Charges
one-twelfth (1/12th) of Real Estate Taxes for each Tax Year on or before
the first day of each month during such Tax Year, in advance, in an amount
reasonably estimated by Landlord and billed by Landlord to Tenant, and
Landlord shall have the right initially to determine monthly estimates and
to revise such estimates from time to time. With reasonable promptness
after Landlord has received the tax bills for any Tax Year, Landlord shall
furnish Tenant with a statement (herein called "Landlord's Tax Statement")
setting forth the amount of Real Estate Taxes for such Tax Year. If the
actual Real Estate Taxes for such Tax Year exceed the estimated Real
Estate Taxes paid by Tenant for such Tax Year, Tenant shall pay to
Landlord the difference between the amount paid by Tenant
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and the actual Real Estate Taxes within thirty (30) days after the receipt
of Landlord's Tax Statement, and if the total amount paid by Tenant for
any such Tax Year shall exceed the actual Real Estate Taxes for such Tax
Year, such excess shall be credited against the next installment of Real
Estate Taxes due from Tenant to Landlord hereunder or if the Term has
ended it shall be returned to Tenant within thirty (30) days. If it has
been determined that Tenant has overpaid Real Estate Taxes during the last
year of the Lease Term, then Landlord shall reimburse Tenant for such
overage on or before the thirtieth (30th) day following the Expiration
Date. No delay by Landlord in providing Landlord's Tax Statement shall be
deemed a default by Landlord or a waiver of Landlord's right to require
payment of the actual or estimated sums of Real Estate Taxes.
(iii) PAYMENT OF EXPENSES: Commencing on the Commencement
Date, Tenant shall pay to Landlord as Additional Charges one-twelfth
(1/12th) of the Expenses for each Expense Year on or before the first day
of each month of such Expense Year, in advance, in an amount reasonably
estimated by Landlord and billed by Landlord to Tenant, and Landlord shall
have the right initially to determine monthly estimates and to revise such
estimates from time to time. With reasonable promptness after the
expiration of each Expense Year, Landlord shall furnish Tenant with a
statement (herein called "Landlord's Expense Statement"), setting forth in
reasonable detail the Expenses for such Expense Year. If the actual
Expenses for such Expense Year exceed the estimated Expenses paid by
Tenant for such Expense Year, Tenant shall pay to Landlord the difference
between the amount paid by Tenant and the actual Expenses within thirty
(30) days after the receipt of Landlord's Expense Statement, and if the
total amount paid by Tenant for any such Expense Year shall exceed the
actual Expenses for such Expense Year, such excess shall be credited
against the next installment of the estimated Expenses due from Tenant to
Landlord hereunder or if the Term has ended it shall be returned to Tenant
within thirty (30) days. Any utility rebates for the Project which
Landlord receives for payments made by Tenant shall be forwarded to Tenant
so long as such rebate is received within one year following the
Expiration Date or sooner termination of the Lease. If it has been
determined that Tenant has overpaid Expenses during the last year of the
Lease Term (including rebates of utilities applicable to Tenant), then
Landlord shall reimburse Tenant for such overage on or before the
thirtieth (30th) day following the Expiration Date.
(iv) OTHER: To the extent any item of Real Estate Taxes or
Expenses is payable by Landlord in advance of the period to which it is
applicable (e.g. insurance and tax escrows required by Landlord's Lender),
or to the extent that prepayment is customary for the service or matter,
Landlord may (i) include such items in Landlord's estimate for periods
prior to the date such item is to be paid by Landlord and (ii) to the
extent Landlord has not collected the full amount of such item prior to
the date such item is to be paid by Landlord, Landlord may include the
balance of such full amount in a revised monthly estimate for Additional
Charges. If the Commencement Date or Expiration Date shall occur on a date
other than the first day of a Tax Year and/or Expense Year, Tenant's Share
of Real Estate Taxes and Expenses, for the Tax Year and/or Expense Year in
which the Commencement Date occurs shall be prorated.
(v) AUDIT: Within sixty (60) days after receipt of any
Expense Statement or Tax Statement from Landlord, Tenant shall have the
right to examine and copy Landlord's books and records relating to such
Expense Statement or Tax Statement, and/or commence to cause an
independent audit thereof to be conducted by an accounting firm to be
selected by Tenant and subject to the reasonable approval of Landlord. If
the audit conclusively proves that Tenant has overpaid either Expenses or
Real Estate Taxes, Tenant shall notify Landlord within ninety (90) days
after the date the applicable Expense Statement or Tax Statement was
received by Tenant, and then Landlord shall reimburse Tenant for such
overage within thirty (30) days after receipt of such notice, provided
that if such overage exceeds five percent (5%) of the actual amount of
Expenses or Real Estate Taxes paid by Landlord for the Tax or Expense Year
covered by such audit, then Landlord shall bear the cost of such audit, up
to a maximum cost of $5,000. If Tenant fails to object to any such Expense
Statement or Tax Statement, or to request and commence an independent
audit thereof, within sixty (60) days after receipt of the applicable
statement, or if Tenant objects to any statement or requests an audit but
then fails to complete the audit within ninety (90) days after receipt of
the applicable statement, such Expense Statement and/or Tax Statement
shall be final and shall not be subject to any audit, challenge or
adjustment. All of the information obtained through any
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audit by Tenant and any compromise, settlement or adjustment reached
between Landlord and Tenant relative to the results of such audit shall be
held in strict confidence by the Tenant.
(d) LATE CHARGES. Tenant recognizes that late payment of any
Monthly Base Rent or Additional Charges will result in administrative expenses
to Landlord, the extent of which additional expense is extremely difficult and
economically impractical to ascertain. Tenant therefore agrees that if any
Monthly Base Rent or Additional Charges remain unpaid three (3) business days
after such amount is due, the amount of such unpaid Monthly Base Rent or
Additional Charges shall be increased by a late charge to be paid to Landlord by
Tenant in an amount equal to four percent (4%) of the amount of the delinquent
Monthly Base Rent or Additional Charges. In addition, any outstanding Monthly
Base Rent, Additional Charges, late charges and other outstanding Rent amounts
shall accrue interest at an annualized rate of the lesser of (i) the greater of
10% or The Federal Reserve Discount Rate plus 4% until paid to Landlord, or (ii)
the maximum rate permitted by law ("the Default Rate"). Tenant agrees that such
amount is a reasonable estimate of the loss and expense to be suffered by
Landlord as a result of such late payment by Tenant and may be charged by
Landlord to defray such loss and expense. The provisions of this Paragraph 4(d)
in no way relieve Tenant of the obligation to pay Monthly Base Rent or
Additional Charges on or before the date on which they are due, nor do the terms
of this Paragraph 4(d) in any way affect Landlord's remedies pursuant to
Paragraph 20 in the event any Monthly Base Rent or Additional Charges are unpaid
after the date due.
5. RESTRICTIONS ON USE. Tenant shall not do or permit anything to be
done in or about the Premises which will obstruct or interfere with the rights
of other tenants or occupants of the Buildings or the Project or injure or annoy
them, nor use or allow the Premises to be used for any unlawful purpose, nor
shall Tenant cause or maintain or permit any nuisance in, on or about the
Premises or Project. Tenant shall not commit or suffer the commission of any
waste in, on or about the Premises.
6. COMPLIANCE WITH LAWS.
(a) TENANT'S COMPLIANCE OBLIGATIONS. Tenant shall not use the
Project or permit anything to be done in or about the Project which will in any
way conflict with any present and future laws, statutes, ordinances,
resolutions, regulations, proclamations, orders or decrees of any municipal,
county, state or federal government or other governmental or regulatory
authority with jurisdiction over the Project, or any portion thereof, whether
currently in effect or adopted in the future and whether or not in the
contemplation of the parties hereto (collectively, "Laws"), and Tenant shall
promptly, at its sole expense, maintain the Premises, any Alterations (as
defined in Paragraph 7 below) permitted hereunder and Tenant's use and
operations thereon in strict compliance at all times with all Laws. "Laws" shall
include, without limitation, all Laws relating to health and safety (including,
without limitation, the California Occupational Safety and Health Act of 1973
and the California Safe Drinking Water and Toxic Enforcement Act of 1986,
including posting and delivery of notices required by such Laws with respect to
the Premises), disabled accessibility (including, without limitation, the
Americans with Disabilities Act, 42 U.S.C. section 12101 et seq.), Hazardous
Substances, and all present and future life safety, fire, sprinkler, seismic
retrofit, building code and municipal code requirements; provided however, that
Tenant's obligation to comply with Laws relating to Hazardous Substances is
subject to the terms and conditions of Paragraph 41, and Tenant shall not be
responsible for compliance with clean-up provisions of any Laws with respect to
Hazardous Substances except to the extent of any release caused by the Tenant or
any of its servants, employees, contractors, agents, licensees or invitees
(collectively, including Tenant, the "Tenant Parties") or otherwise included in
Tenant's indemnity contained in Paragraph 41. Notwithstanding the foregoing,
Landlord, and not Tenant, shall be responsible for correcting any condition with
respect to the Project Common Area, or the exterior or structural portions of
the Building (but not with respect to the interior of the Premises), which is in
violation of applicable Laws (subject to Tenant's obligation to pay such costs
to the extent they are included as Expenses under Paragraph 4(c)(1)(D)), except
(subject to Paragraph 12 hereof) to the extent such condition is caused by the
negligent or intentional acts or omissions of the Tenant Parties, or such
violation results from Tenant's particular use of the Premises, or such
condition is caused by the installation of the Tenant Improvements or any
Alterations. Tenant shall be responsible for compliance of the Tenant
Improvements with all Laws. Notwithstanding the first sentence of this Paragraph
6(a), Tenant shall not be required to make any structural alterations to the
Premises in order to comply with Laws unless the requirement that such
alterations be made is triggered by any of the following (or, if such
requirement results from the cumulative
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effect of any of the following when added to other negligent or intentional
acts, omissions, or events, to the extent such alterations are required by any
of the following): (i) the installation, use or operation of the Tenant
Improvements, any Alterations, or any of Tenant's trade fixtures or personal
property; (ii) the negligent or intentional acts or omissions of any of the
Tenant Parties; or (iii) the particular use or particular occupancy or manner of
use or occupancy of the Premises by the Tenant Parties. Any alterations that are
Tenant's responsibility pursuant to this Paragraph 6 shall be made in accordance
with Paragraph 7 below, at Tenant's sole cost. The parties acknowledge and agree
that Tenant's obligation to comply with all Laws as provided in this paragraph
(subject to the limitations contained herein) is a material part of the
bargained-for consideration under this Lease. Tenant's obligations under this
Paragraph and under Paragraph 8(c) below shall include, without limitation, the
responsibility of Tenant to make substantial or structural repairs and
alterations to the Premises to the extent provided above, regardless of, among
other factors, the relationship of the cost of curative action to the Rent under
this Lease, the length of the then remaining Term hereof, the relative benefit
of the repairs to Tenant or Landlord, the degree to which the curative action
may interfere with Tenant's use or enjoyment of the Premises, and the likelihood
that the parties contemplated the particular Law involved.
(b) INSURANCE REQUIREMENTS. Tenant shall not do or permit anything
to be done in or about the Premises or bring or keep anything therein which will
in any way increase the rate of any insurance upon the Project or any of its
contents (unless Tenant agrees to pay for such increase) or cause a cancellation
of any insurance on the Project or otherwise violate any requirements,
guidelines, conditions, rules or orders with respect to such insurance. Tenant
shall at its sole cost and expense promptly comply with the requirements of the
Insurance Services Office (ISO), board of fire underwriters, or other similar
body now or hereafter constituted relating to or affecting Tenant's use or
occupancy of the Project (other than in situations where compliance involves
repair, maintenance or replacement of items that Landlord is expressly required
to repair, maintain or replace under this Lease).
(c) NO LIMITATION ON OBLIGATIONS. The provisions of this Paragraph
6 shall in no way limit Tenant's maintenance, repair and replacement obligations
under Paragraph 8 or Tenant's obligation to pay Expenses under Paragraph 4(c).
The judgment of any court of competent jurisdiction or the admission of Tenant
in an action against Tenant, whether Landlord is a party thereto or not, that
Tenant has so violated any such Law shall be conclusive of such violation as
between Landlord and Tenant.
7. ALTERATIONS.
(a) After completion of the Tenant Improvements (which shall be
governed by the Work Letter), Tenant shall not make or suffer to be made any
additional alterations, additions or improvements ("Alterations") in, on or to
the Premises or any part thereof without the prior written consent of Landlord.
Tenant's request for approval of any such proposed Alterations shall be in
writing and shall be accompanied by a full set of complete plans and
specifications for such proposed Alterations for Landlord's review. Failure of
Landlord to give its disapproval within fifteen (15) calendar days after receipt
of Tenant's written request for approval shall constitute approval by Landlord
so long as Tenant's request includes the following statement in capitalized and
boldfaced letters: BY FAILING TO RESPOND TO THIS REQUEST, YOU WILL BE DEEMED TO
HAVE APPROVED THE ALTERATIONS DESCRIBED HEREIN, INCLUDING THE PLANS AND
SPECIFICATIONS. Any Alterations in, on or to the Premises, except for Tenant's
trade fixtures and movable furniture and equipment (which exception shall
include the telephone system, security system, demountable partitions,
secretarial stations, cubicles, cabinets or shelving systems and kitchen
equipment, but shall not include the wiring, conduit and fiberoptic cabling and
similar infrastructure [other than the phone switch, servers and racks] related
to telephone, telecommunications, or similar communications systems which shall
be and remain Landlord's property from the time they are installed in the
Premises), shall be the property of Tenant during the Term and shall become
Landlord's property at the end of the Term without compensation to Tenant.
Landlord shall not unreasonably withhold or delay its consent to Alterations
that (i) do not materially affect the structure of the Buildings or their
electrical, plumbing, HVAC, security or other systems, (ii) are not visible from
the exterior of the Premises and do not otherwise affect the exterior appearance
of the Buildings, (iii) are consistent with Tenant's Permitted Use hereunder;
(iv) do not require any application to a political jurisdiction for rezoning,
general plan amendment, variance, conditional use permit or architectural review
approval, (v) will not interfere with the use and
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occupancy of any other portion of the Project by Landlord or by any other
tenants or occupants or their invitees, or by any other party with the right to
use any portion of the Project, (vi) comply with any Encumbrances and Mortgages,
and (vii) do not adversely affect the value or marketability of Landlord's
reversionary interest upon termination or expiration of this Lease. Landlord
acknowledges that, subject to Landlord's consent as required in this Paragraph 7
and the other terms and conditions of this Paragraph 7, Tenant desires to
install a cafeteria in the Premises.
(b) Notwithstanding Paragraph 7(a) or anything to the contrary
contained herein, Tenant may make Alterations to the Premises without Landlord's
prior consent so long as (x) such Alterations comply with items (i) through
(vii) in Paragraph 7(a), and (y) the cost of each such Alteration (or group of
Alterations, if occurring substantially at the same time and as part of a single
project) does not exceed Fifty Thousand Dollars ($50,000) (any such Alterations
being defined herein as "Permitted Alterations"). Tenant shall be required to
notify Landlord in writing before making any Permitted Alterations and within
thirty (30) days after completion of such Permitted Alterations, and at
Landlord's request promptly shall provide Landlord with accurate as-built
drawings of any Permitted Alterations.
(c) Any Alterations consented to by Landlord pursuant to Paragraph
7(a), and any Permitted Alterations, shall be made by Tenant, at Tenant's sole
cost and expense, in accordance with plans and specifications reasonably
approved by Landlord, and any contractor or person selected by Tenant to make
the same must first be reasonably approved in writing by Landlord. With respect
to any Alterations that affect the structure of the Building, the Building
Systems, or any portion of the Project outside the Premises, at Landlord's
option the Alterations shall be made by Landlord, or by a contractor specified
by Landlord, for Tenant's account and Tenant shall reimburse Landlord for the
actual third-party cost incurred by Landlord in connection with such Alteration
as an Additional Charge, within twenty (20) days after receipt of a statement
from Landlord therefor.
(d) Tenant shall reimburse Landlord upon demand for any reasonable
out-of-pocket expenses incurred by Landlord in the review of any Alterations
made by Tenant, including fees actually charged by Landlord's contractors or
consultants to review plans and specifications, and such obligation shall be an
Additional Charge. Landlord's consent to any Alterations shall not obligate
Landlord to repair, maintain, insure or otherwise assume any responsibility or
liability with respect to any such Alteration. In addition, notwithstanding
Landlord's review, Tenant and not Landlord shall be responsible for compliance
of the Alterations, and plans and specifications therefor, with all applicable
Laws, and Landlord shall not be responsible for any omissions or errors therein.
8. REPAIR AND MAINTENANCE.
(a) LANDLORD'S OBLIGATIONS.
(i) Landlord shall maintain, repair and replace, at its sole
cost and expense, except as provided in Paragraph 8(c), the exterior
(excluding windows, window frames and exterior door hardware), roof
structure (but not the roof membrane) and structural portions of the
Buildings (including load bearing walls and foundations).
(ii) Landlord shall maintain, repair and replace the Project
Common Area (including, without limitation) the parking areas, courtyards,
sidewalks, entryways, lawns, fountains, landscaping and other similar
facilities located in the Project Common Area.
All costs incurred by Landlord in connection with the foregoing obligations
shall be payable by Tenant as Additional Charges in accordance with Paragraph
4(c) to the extent they are properly included in Expenses thereunder. Landlord's
obligations under this Paragraph 8(a) with respect to any particular repair,
replacement or maintenance requirement, shall not commence until Tenant notifies
Landlord in writing of any circumstances which Tenant believes may trigger
Landlord's obligations.
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(b) TENANT'S OBLIGATIONS. Tenant shall maintain, repair and
replace, at its sole cost and expense, all portions of the Premises which are
not Landlord's obligations under Paragraph 8(a), including, without limitation,
(i) the roof membrane, windows and window frames; (ii) the building systems
serving the Premises for electrical, mechanical, HVAC and plumbing and all
controls appurtenant thereto, the fire safety sprinkler system, and any
elevators in the Building (collectively, including elevators, "Building
Systems"); and (iii) the interior portion of the Buildings, the Tenant
Improvements, the Alterations, and any additional tenant improvements,
alterations or additions installed by or on behalf of Tenant within the
Premises. If Tenant exercises its right to extend the Term for the Extension
Term, at Tenant's election Tenant may, by written notice to Landlord delivered
at any time at least thirty (30) days prior to expiration of the Initial Term,
cause Landlord to assume Tenant's maintenance obligations with respect to the
Building Systems under clause (ii) above, which assumption by Landlord shall be
effective during the Extension Term. If Landlord assumes such obligations, all
costs incurred by Landlord in connection therewith shall be deemed Additional
Charges payable by Tenant in accordance with Paragraph 4(c). Tenant shall be
responsible for the expense of installation, operation, and maintenance of its
telephone and other communications cabling from the public right-of-way to the
point of entry into the Buildings and throughout the Premises, although Landlord
shall have the right, at Landlord's sole election, to perform such work on
behalf of Tenant in Common Areas, provided Landlord performs such work in
coordination with Tenant and its contractors in such a manner as will
accommodate Tenant's reasonable objectives with respect thereto. The Premises
shall at all times be maintained by Tenant in the condition of a first-class
office building. Tenant's obligations under this Paragraph 8 include, without
limitation, the replacement, at Tenant's sole cost and expense, of any portions
of the Premises or Building Systems which are not Landlord's express
responsibility under Paragraph 8(a), if it would be commercially prudent to
replace, rather than repair, such portions of the Premises, regardless of
whether such replacement would be considered a capital expenditure; provided,
however, that if Landlord has assumed Tenant's maintenance obligations for
Building Systems pursuant to this Paragraph 8(b), any replacement of any portion
of the Building Systems which would be considered a capital expenditure and
which is made at least one (1) year after Landlord assumes such obligations
shall be amortized in accordance with Paragraph 4(c)(i)(D)(v). Tenant hereby
waives and releases its right to make repairs at Landlord's expense under
Sections 1941 and 1942 of the California Civil Code or under any similar law,
statute or ordinance now or hereafter in effect. In addition, Tenant hereby
waives and releases its right to terminate this Lease under Section 1932(1) of
the California Civil Code or under any similar law, statute or ordinance now or
hereafter in effect.
(c) ADDITIONAL OBLIGATIONS OF TENANT. The purpose of Paragraph
8(a) and 8(b) is to define the obligations of Landlord and Tenant to perform
various repair and maintenance functions; the allocation of the costs therefor
are covered under this Paragraph 8(c) and Paragraph 4. Tenant shall bear the
full cost of repairs or maintenance interior or exterior, structural or
otherwise, to preserve the Premises, the Building and the Project in good
working order and first-class condition, arising out of (i) the existence,
installation, or operation of any Tenant Improvements, Alterations, or any of
Tenant's trade fixtures or personal property; (ii) the moving of Tenant's
property or fixtures in or out of the Buildings or Project or in and about the
Premises; (iii) the particular use or particular occupancy or manner of use or
occupancy of the Premises by any Tenant Party; or (iv) except to the extent any
claims arising from any of the foregoing are reimbursed by insurance carried by
Landlord, are covered by the waiver of subrogation in Paragraph 12 or are
otherwise provided for in Paragraph 21, the acts, omissions or negligence of any
Tenant Parties.
(d) MAINTENANCE SERVICE CONTRACTS. In connection with Tenant's
maintenance and repair obligations contained in this Xxxxxxxxx 0, Xxxxxx shall,
at its own cost and expense, enter into regularly scheduled preventive
maintenance service contracts with maintenance contractors approved by Landlord,
in its reasonable discretion, for servicing all Building Systems, elevators and
equipment within the Premises, and shall provide copies of such contracts and
periodic maintenance reports to Landlord. At Landlord's option at any time in
which Tenant is in Default hereunder, maintenance service contracts shall be
prepaid on an annual basis. Each maintenance service contract shall specifically
name Landlord as a third party beneficiary, with the right to receive copies of
all notices delivered under such contract and the ability to exercise Tenant's
rights thereunder, at Landlord's election, in connection with any cure of
Tenant's default by Landlord, or any assumption by Landlord of Tenant's
maintenance obligations with respect to Building Systems, pursuant to Paragraph
8(e) below.
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(e) CURE RIGHTS. Tenant shall be in Default hereunder if Tenant
fails, within a period of thirty (30) days from the date of written notice from
Landlord, to cure any failure to fulfill any of its obligations under this
Paragraph 8; provided, however, that if such failure is curable but cannot be
cured within such thirty (30) day period, Tenant shall have such additional time
as may be reasonably required to cure (not to exceed sixty (60) additional days)
before such failure becomes a Default hereunder, so long as Tenant commences
such cure within such (30) day period and diligently prosecutes such cure to
completion. In addition, Landlord may elect, by delivery of written notice to
Tenant, to assume Tenant's maintenance obligations with respect to the Building
Systems under Paragraph 8(b)(ii) if Tenant Defaults with respect to any of such
obligations, or if Tenant has failed to perform such obligations more than twice
in any calendar year (without benefit of cure periods) upon the third such
failure in any calendar year. If Landlord assumes such obligations, all costs
incurred by Landlord in connection therewith shall be included in Expenses
payable by Tenant as Additional Charges in accordance with Paragraph 4(c). In
addition to Landlord's rights set forth in this Paragraph 8(e), Landlord shall
have the rights set forth in Paragraph 24 with respect to any failure of Tenant
to perform its obligations under Paragraph 8(b), (c) or (d). The remedies
described in this paragraph are cumulative and in addition to any other rights
and remedies Landlord may have at law or under this Lease.
(f) NO ABATEMENT. Except to the extent any claims arising from any
of the foregoing are reimbursed by rental abatement insurance proceeds actually
received by Landlord, are covered by the waiver of subrogation in Paragraph 12
or are otherwise provided for in Paragraph 21, there shall be no abatement of
Rent with respect to, and except for Landlord's gross negligence or willful
misconduct, Landlord shall not be liable for any injury to or interference with
Tenant's business arising from, any repairs, maintenance, alteration or
improvement in or to any portion of the Project, including the Premises, or in
or to the fixtures, appurtenances and equipment therein.
9. LIENS. Tenant shall keep the Premises and Project free from any
liens arising out of any work performed, material furnished or obligations
incurred by Tenant. In the event that Tenant shall not, within fifteen (15) days
following the imposition of any such lien, cause the same to be released of
record by payment or posting of a proper bond, Landlord shall have, in addition
to all other remedies provided herein and by law, the right, but not the
obligation, to cause the same to be released by such means as it shall deem
proper, including without limitation by the payment of the claim giving rise to
such lien or by the posting of a bond. All such sums paid by Landlord and all
expenses incurred by Landlord in connection therewith shall be considered
Additional Charges and shall be payable to Landlord by Tenant on demand with
interest from the date incurred by Landlord at the Default Rate. Landlord shall
have the right at all times to post and keep posted on the Premises any notices
permitted or required by law, or which Landlord shall deem proper, for the
protection of Landlord, the Premises, the Project and any other party having an
interest therein, from mechanics' and materialmen's liens, and Tenant shall give
written notice to Landlord at least five (5) business days' prior to
commencement of any construction on the Premises.
10. ASSIGNMENT AND SUBLETTING.
(a) Except as otherwise provided in this Xxxxxxxxx 00, Xxxxxx
shall not directly or indirectly, voluntarily or by operation of law, sell,
assign, encumber, pledge or otherwise transfer or hypothecate all or any part of
the Premises or Tenant's leasehold estate hereunder (collectively,
"Assignment"), or permit the Premises to be occupied by anyone other than Tenant
or sublet the Premises or any portion thereof (the foregoing, including without
limitation any license or use agreement, any sub-sublease or subsequent
subletting by any subtenant, sub-subtenant or other occupant of any portion of
the Premises, and similar occupancy rights, collectively, "Sublease"), without
Landlord's prior written consent in each instance, which consent shall not be
unreasonably withheld or delayed. Without otherwise limiting the criteria upon
which Landlord may withhold its consent to any proposed Sublease or Assignment,
if Landlord withholds its consent where either (i) the creditworthiness of the
proposed Sublessee or Assignee is not acceptable to Landlord in the reasonable
exercise of Landlord's discretion, or (ii) the proposed Sublessee's or
Assignee's use of the Premises is not in compliance with the Permitted Use as
described in the Basic Lease Information, such withholding of consent shall be
presumptively reasonable. If Landlord consents to the Sublease or Assignment,
Tenant may thereafter enter into a valid Sublease or Assignment upon the terms
and conditions set forth in this Paragraph 10. Notwithstanding anything to the
contrary herein, Landlord shall have no obligation to consent to any Sublease or
Assignment or to respond to any request by Tenant for approval thereto,
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unless and until Landlord receives written approval by Guarantor of the proposed
Sublease or Assignment executed by an Authorized Officer of Guarantor which
includes the identity of the proposed sublessee or assignee, in substantially
the following form:
Business Objects, S.A., as Guarantor of the obligations of the tenant
under that certain Lease dated August __, 2000, by and between 000 Xxxx
Xxxxx Associates, L.P. as Landlord, and Business Objects Americas, as
Tenant, for the benefit of Landlord hereby approves the proposed [sublease
or assignment] of [describe the portion of Premises subleased and term of
sublease or the entire Premises and entire term if an assignment] to
[identify proposed sublessee or assignee]. Business Objects, S.A. hereby
confirms to Landlord and its successors and assigns that the Guaranty by
Business Objects, S.A. of the obligations under the above mentioned Lease
shall remain in full force and effect notwithstanding the proposed
[sublease or assignment].
The term "Authorized Officer" shall mean either the Chairman of the Company or
its Chief Financial Officer. The above referenced approval of Guarantor shall be
accompanied by an incumbency certificate signed by the Secretary or Assistant
Secretary of Guarantor certifying that the person signing the above referenced
approval on behalf of Guarantor is a corporate officer of Guarantor holding one
of the offices constituting an Authorized Officer, and further either (i)
certifying that the minutes of the Board of Directors of Guarantor dated July
18, 2000, which authorize the Authorized Officers to execute all instruments,
documents and certificates and take further action with respect to the Guaranty,
continue in full force and effect and have not been revoked or modified, or (ii)
providing a certified resolution of the Board of Directors of Guarantor
reasonably acceptable to Landlord that specifically authorize execution by the
signing Authorized Officer of the written approval by Guarantor of the proposed
Sublease or Assignment that is required by this Paragraph 10(a).
(b) If Tenant desires at any time to enter into an Assignment of
this Lease or a Sublease of the Premises or any portion thereof for which
Landlord's consent is required, it shall first give written notice to Landlord
of its desire to do so, which notice shall contain (i) the name of the proposed
assignee, subtenant or occupant; (ii) the name of the proposed assignee's,
subtenant's, or occupant's business to be carried on in the Premises; (iii) the
terms and provisions of the proposed Assignment or Sublease; and (iv) such
financial information as Landlord may reasonably request concerning the proposed
assignee, subtenant or occupant. In any Sublease undertaken by Tenant, Tenant
shall diligently seek to obtain not less than fair market rent for the space so
sublet, and in any Assignment of this Lease in whole or in part, Tenant shall
seek to obtain from the assignee consideration reflecting a value of not less
than fair market rent for the space subject to such assignment, and Landlord may
consider such market factors in its determination of whether to consent to such
proposed Sublease or Assignment. Any improvements, additions, or alterations to
the Buildings or the Project that are required by applicable Laws or are deemed
necessary or appropriate by Tenant, in Tenant's commercially reasonable
judgment, as a result of any such Sublease or Assignment, shall be installed and
provided without cost or expense to Landlord or effect on the Bonus Rent
received by Landlord pursuant to Paragraph 10(d), and Landlord may condition its
consent to any proposed Sublease or Assignment on the construction of
improvements required by applicable Laws by reason of the Sublease or
Assignment.
(c) At any time within fifteen (15) days after Landlord's receipt
of the notice specified in Paragraph 10(b), Landlord may by written notice to
Tenant elect to (i) consent to the Sublease or Assignment; or (ii) disapprove
the Sublease or Assignment. In addition, Landlord may elect to terminate this
Lease as to the portion of the Premises that is specified in such notice, with a
proportionate abatement in Monthly Base Rent and Additional Charges for Expenses
and Taxes, if such notice is with respect to (x) any proposed Assignment to a
party, except in conjunction with a Permitted Transfer, or (y) any proposed
Sublease and either (I) such Sublease has a term (including any renewal or
extension options) that either is coterminous with the Term or expires within
the last two years of the Term, or (II) after giving effect to such Sublease,
the original Tenant (or tenant as a result of a Permitted Transfer) will occupy
less than seventy percent (70%) of the Rentable Area of the Premises (or, if the
term of such Sublease will expire within the first twenty-four (24) months of
the Term, if the original Tenant or tenant as a result of a Permitted Transfer
will occupy less than sixty percent (60%) of the Rentable Area of the Premises).
If Landlord elects to terminate the Lease as to a portion of the Premises
pursuant to the immediately preceding sentence, Tenant shall at all times
provide reasonable and appropriate access to such portion of the Premises and
use of any common
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facilities within the Building (including, at Landlord's election and as
reasonable under the circumstances, by the designation of "Building Common
Areas" as appropriate for the use of and access to the recaptured space,
including provision of any utilities and services for such recaptured space),
Tenant's Share shall be modified (based on the remaining Rentable Area of the
Premises divided by the total rentable area in the Buildings, as determined by
Landlord in its reasonable discretion), Tenant's parking shall be reduced by
multiplying the number of parking spaces available to Tenant by a fraction, the
numerator of which shall be the remaining Rentable Area of the Premises and the
denominator of which shall be the Rentable Area of the entire Premises as of the
Delivery Date (determined as provided in the Basic Lease Information) and
Tenant's rights with respect to any monument or other Project signage shall be
reduced in the same proportion as the parking. Promptly after request from
Landlord, Tenant shall enter into any amendment to this Lease or other
documentation reasonably requested by Landlord in connection with any such
termination of this Lease as to a portion of the Premises, which may include,
without limitation, provisions regarding the modifications set forth in the
preceding sentence. Failure by Landlord to either consent to or disapprove a
proposed Assignment or Sublease within the fifteen (15) day time period
specified above shall be deemed to be Landlord's disapproval thereof. At
Tenant's option, Tenant may notify Landlord in writing if Tenant wishes to
Assign or Sublease any portion of the Premises, prior to commencing negotiations
for an Assignment or Sublease with another party, if such Assignment or Sublease
would be subject to Landlord's termination right provided above (such notice
being the "Availability Notice"), and Landlord shall have the option, by written
notice to Tenant within fifteen (15) days after receiving any Availability
Notice, to terminate this Lease with respect to the portion of the Premises as
provided above. If Landlord declines or fails timely to elect to terminate this
Lease with respect to such portion of the Premises, Tenant shall have the right,
within one hundred twenty (120) days after the expiration of such fifteen (15)
day period, to enter into an Assignment or Sublease with respect to the portion
of the Premises designated in the Availability Notice, subject to Landlord's
consent and the other provisions of this Paragraph 10 (including without
limitation the provisions with respect to payment of Landlord's Share of Bonus
Rent pursuant to Paragraph 10(d)), except that Landlord shall not have the
further right to terminate with respect to such Assignment or Sublease. If
Tenant fails to enter into an Assignment or Sublease within such one hundred
twenty (120) day period, or upon expiration of any Sublease entered into within
such one hundred twenty (120) day period, Landlord's rights under this Paragraph
10 to terminate the Lease with respect to the portion of the Premises upon any
future proposed Sublease or Assignment shall revive.
(d) If Landlord consents to the Sublease or Assignment within
fifteen (15) days after receipt of Tenant's notice pursuant to Paragraph 10(b),
Tenant may thereafter within one hundred twenty (120) days after Landlord's
consent, but not later than the expiration of said one hundred twenty (120)
days, enter into such Assignment or Sublease of the Premises or portion thereof
upon the terms and conditions set forth in the notice furnished by Tenant to
Landlord pursuant to Paragraph 10(b). However, Tenant shall pay to Landlord the
"Landlord's Share" (as defined below) of the "Bonus Rent" (as defined below)
attributable to such Sublease or Assignment. "Bonus Rent" shall mean any rent or
other consideration realized by Tenant under any and all Subleases and/or
Assignments that is in excess of the Monthly Base Rent and Additional Charges
payable hereunder (or the amount thereof proportionate to the portion of the
Premises subject to such Sublease(s) and/or Assignment(s)), including, without
limitation, any sums paid for the sale or rental of the Tenant Improvements,
after first deducting from such excess the following: (1) the unamortized costs
of any portion of the Tenant Improvements, or any Alterations affirmatively
approved by Landlord and not designated by Landlord as Alterations that Tenant
must removed upon the expiration of the Term, that are installed in that portion
of the Premises that is the subject of the Sublease or Assignment and that were
paid for by Tenant (and not from the Tenant Allowance), which costs shall be
amortized on a straight line basis (without interest) over the Initial Term of
this Lease in equal monthly installments; and (2) any customary brokers'
commissions that Tenant has incurred in connection with such Sublease or
Assignment amortized on a straight line basis (without interest) over the term
of the Sublease or Assignment in equal monthly installments. "Landlord's Share"
for purposes of this Paragraph 10(d) shall mean fifty percent (50%) of Bonus
Rent attributable to the first twenty-four months of the Term, and seventy-five
percent (75%) of Bonus Rent attributable to the remaining Term (including any
Extension Term), regardless of when such Bonus Rent is actually received by
Tenant or when the applicable Sublease or Assignment is entered into. For
purposes of determining Landlord's Share of Bonus Rent, (A) any prepaid rent or
other prepayments of amounts payable under Assignments or Subleases shall be
credited against rent and other payments payable under the applicable Assignment
or Sublease in the inverse order in which such payments would be payable by the
assignor or sublessee (such that, for example, prepaid rent would be credited
first against the rent due for the last month of the term of the Assignment or
Sublease and therefore attributable to such month for purposes of determining
Landlord's
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Share), regardless of when the sublessee or assignee actually makes such
prepayment; and (B) any free rent or other rent concessions shall be debited
against rent or other payments payable under the applicable Assignment or
Sublease in the order in which such payments would be payable by sublessee or
assignor, regardless of when the sublessee or assignee actually receives the
benefit of such free rent or other rent concessions. Tenant shall pay Bonus Rent
to Landlord as and when it is received by Landlord, regardless of the time
period to which it is attributable. Notwithstanding the foregoing, or anything
to the contrary contained herein, Landlord shall have no right to any amounts
paid by any assignee or sublessee to Tenant to the extent such payments are
made, on a commercially reasonable basis, for purchase of, or use by such
assignee or sublessee of, Tenant's removable personal property located in the
Premises (excluding any payments, proceeds or consideration received or realized
by Tenant for the purchase, lease, licensing or other use of wiring, conduit
and/or fiberoptic cabling and similar infrastructure related to telephone,
telecommunications, or similar communications systems [other than Tenant's phone
switch, servers and racks so long as the primary purpose of the Sublease is not
the purchase or use of such equipment]).
(e) No consent by Landlord to any Assignment or Sublease by Tenant
shall relieve Tenant of any obligation to be performed by Tenant under this
Lease, whether arising before or after the Assignment or Sublease. The consent
by Landlord to any Assignment or Sublease shall not relieve Tenant from the
obligation to obtain Landlord's express written consent to any other Assignment
or Sublease. Any Assignment or Sublease that is not in compliance with this
Paragraph 10 shall be void and, at the option of Landlord, shall constitute a
material Default by Tenant under this Lease. The acceptance of Monthly Base Rent
or Additional Charges by Landlord from a proposed assignee or sublessee shall
not constitute the consent to such Assignment or Sublease by Landlord.
(f) The following shall be deemed a voluntary assignment of
Tenant's interest in this Lease: (i) any dissolution, merger, consolidation, or
other reorganization of Tenant; and (ii) if the capital stock of Tenant is not
publicly traded, the sale or transfer to one person or entity stock possessing
more than fifty percent (50%) of the total combined voting power of all classes
of Tenant's stock issued, outstanding and entitled to vote for the election of
directors. Notwithstanding anything to the contrary contained in this Xxxxxxxxx
00, Xxxxxx may enter into any of the following transfers (a "Permitted
Transfer") without Landlord's prior written consent, so long as Tenant provides
Landlord with the consent, confirmation and certificate from Guarantor described
in Paragraph 10(a) with respect to such Permitted Transfer prior to the
effective date of such Permitted Transfer: (1) Tenant may assign its interest in
the Lease to a corporation, partnership, professional corporation, limited
liability company, or limited liability partnership ("Transfer Entity") which
results from a stock sale, merger, consolidation or other reorganization, so
long as the surviving Transfer Entity has a net worth immediately following such
transaction that is equal to or greater than the net worth of Tenant as of the
date immediately prior to such transaction; and (2) Tenant may assign this Lease
to a Transfer Entity which purchases or otherwise acquires all or substantially
all of the assets of Tenant, so long as such acquiring Transfer Entity has a net
worth immediately following such transaction that is equal to or greater than
the net worth of Tenant as of the date immediately prior to such transaction.
(g) Each assignee pursuant to an Assignment as provided in this
Paragraph 10 shall assume all obligations of Tenant under this Lease, and shall
be and remain liable jointly and severally with Tenant for the payment of
Monthly Base Rent and Additional Charges, and for the performance of all the
terms, covenants, conditions and agreements herein contained on Tenant's part to
be performed for the Term. No Assignment shall be binding on Landlord unless the
assignee or Tenant shall deliver to Landlord a counterpart of the Assignment and
an instrument in recordable form that contains a covenant of assumption by the
assignee satisfactory in substance and form to Landlord, consistent with the
requirements of this Paragraph 10(g), but the failure or refusal of the assignee
to execute such instrument of assumption shall not release or discharge the
assignee from its liability as set forth above. Notwithstanding anything to the
contrary in this Lease, no Sublease shall be binding on Landlord unless and
until Landlord shall agree in writing following termination of this Lease to
recognize such sublessee and such sublessee agrees in writing to attorn to
Landlord on the terms and conditions of the sublease (including the obligations
under this Lease to the extent that they relate to the portion of the Premises
subleased), and any Sublease entered into by Tenant hereunder shall include an
obligation by the sublessee to so attorn to Landlord if Landlord, in Landlord's
sole discretion, elects to recognize such Sublease upon any termination of this
Lease.
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(h) Tenant shall have the right, without Landlord's consent and
without triggering Landlord's rights under Paragraph 10(c) or (d), but with
written notice to Landlord at least ten (10) days prior thereto, to enter into
an Assignment of Tenant's interest in the Lease or a Sublease of all or any
portion of the Premises to an Affiliate (as defined below) of Tenant, provided
that (i) in connection with an Assignment that is not a Sublease, the Affiliate
delivers to Landlord concurrent with such Assignment a written notice of the
Assignment and an assumption agreement whereby the Affiliate assumes and agrees
to perform, observe and abide by the terms, conditions, obligations, and
provisions of this Lease arising from and after the effective date of the
assignment; and (ii) the assignee or sublessee remains an Affiliate throughout
the term of this Lease (and, in connection with an Assignment that is not a
Sublease, the assumption agreement shall contain provisions consistent with the
provisions of this subparagraph allowing Landlord to terminate this Lease at
such time as the entity is no longer an Affiliate of the original Tenant). If
this Lease is assigned or sublet to an Affiliate and thereafter any circumstance
occurs which causes such assignee or sublessee to no longer be an Affiliate of
the assigning or subleasing Tenant, Tenant shall give written notice thereof to
Landlord, which notice, to become effective, shall refer to Landlord's right to
terminate this Lease pursuant to this subparagraph, in the event of an
Assignment, or to cause Tenant to terminate the Sublease, in the event of a
Sublease ("Affiliation Termination Notice"). Following occurrence of the
circumstance giving rise to the discontinuation of such assignee or sublessee
being an Affiliate ("Affiliate Termination") of the assigning or subleasing
Tenant, Landlord shall be entitled to terminate this Lease in the event of an
Assignment, or to cause Tenant to terminate the Sublease in the event of a
Sublease, unless Landlord has given its prior written consent to such
circumstance, which consent shall not be unreasonably withheld by Landlord so
long as, in the event of an Assignment, such assignee (after giving effect to
such circumstance) has financial strength (as demonstrated by audited financial
statements) equal to or greater than the assigning or subleasing Tenant
(including its net worth) as of the date of execution of this Lease, or the
assigning or subleasing Tenant executes a guaranty in usual form reasonably
acceptable to Landlord (however, this does not imply that Tenant would be
released without such guaranty). No Sublease or Assignment by Tenant made
pursuant to this Paragraph shall relieve Tenant of Tenant's obligations under
this Lease. As used in this paragraph, the term "Affiliate" shall mean and
collectively refer to a corporation or other entity which controls, is
controlled by or is under common control with Tenant, by means of an ownership
of either (aa) more than fifty percent (50%) of the outstanding voting shares of
stock or partnership or other ownership interests, or (bb) stock, or partnership
or other ownership interests, which provide the right to control the operations,
transactions and activities of the applicable entity.
(i) Landlord and Tenant acknowledge that Tenant intends to
Sublease a portion of the Premises to one or more sublessees during the first
twenty-four (24) months of the Term, provided that any such Sublease(s) shall be
on and subject to all of the terms and conditions of this Paragraph 10,
including, without limitation, Tenant's obligations under Paragraphs 10(a) and
10(b), and Landlord's rights under Paragraphs 10(c) and 10(d).
11. INSURANCE AND INDEMNIFICATION.
(a) Except to the extent caused by the negligence or willful
misconduct of Tenant Parties or Tenant's breach of this Lease, Landlord shall
indemnify and hold Tenant harmless from and defend Tenant against any and all
claims or liability for any injury or damage to any person or property including
any reasonable attorney's fees (but excluding any consequential damages or loss
of business) occurring in, on, or about the Project to the extent such injury or
damage is caused by the gross negligence or willful misconduct of Landlord, its
agents, contractors or employees (collectively, including Landlord, "Landlord
Parties").
(b) Landlord shall not be liable to Tenant, and Tenant hereby
waives all claims against Landlord Parties for any injury or damage to any
person or property in or about the Premises by or from any cause whatsoever
(other than the gross negligence or willful misconduct of Landlord Parties), and
without limiting the generality of the foregoing, whether caused by water
leakage of any character from the roof, walls, basement, or other portion of the
Premises or the Building, or caused by gas, fire, oil, electricity, or any cause
whatsoever, in, on, or about the Premises, the Project or any part thereof
(other than that caused by the gross negligence or willful misconduct of
Landlord Parties). Tenant acknowledges that any casualty insurance carried by
Landlord will not cover loss of income to Tenant or damage to the Alterations in
the Premises installed by Tenant or Tenant's personal
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property located within the Premises (except as provided in Paragraph 11(f)
below). Tenant shall be required to maintain the insurance described in
Paragraph 11(d) below during the Term.
(c) Except to the extent caused by the gross negligence or willful
misconduct of Landlord Parties, Tenant shall indemnify and hold Landlord
harmless from and defend Landlord against any and all claims or liability for
any injury or damage to any person or property whatsoever: (i) occurring in or
on the Premises; or (ii) occurring in, on, or about any other portion of the
Project to the extent such injury or damage is caused by the negligence or
willful misconduct by the Tenant Parties. Except to the extent caused by the
gross negligence or willful misconduct of Landlord Parties, Tenant further
agrees to indemnify and hold Landlord harmless from, and defend Landlord
against, any and all claims, losses, or liabilities (including damage to
Landlord's property) arising from (x) any breach of this Lease by Tenant, (y)
any matter referred to in Paragraph 11(g), and/or (z) the conduct of any
activities, work or business of Tenant Parties in or about the Project,
including, but not limited to any release, discharge, storage or use of any
Hazardous Substance. In the event of a discrepancy between the terms of this
paragraph and the terms of Paragraph 41 of the Lease concerning Hazardous
Substance liability, the latter shall control.
(d) Tenant shall procure at its cost and expense and keep in
effect during the Term (and during the construction period for the Tenant
Improvements) the following insurance:
(i) Commercial general liability insurance on an occurrence
form, including contractual liability, with a minimum combined single
limit of liability of Three Million Dollars ($3,000,000) per occurrence.
Such insurance shall name Landlord, any Mortgagee, any ground lessor, and
such other parties as Landlord may request as additional insureds, shall
specifically include the liability assumed hereunder by Tenant to the
maximum extent it is possible to include such assumed liability at
commercially reasonable rates, and shall provide that it is primary
insurance, and not excess over or contributory with any other valid,
existing and applicable insurance in force for or on behalf of Landlord,
and shall provide that Landlord shall receive thirty (30) days' written
notice from the insurer prior to any cancellation or change of coverage.
The limits of such insurance shall not limit the liability of Tenant
hereunder, and Tenant is responsible for ensuring that the amount of
liability insurance carried by Tenant is sufficient for Tenant's purposes.
(ii) Business interruption insurance, insuring Tenant for a
period of twelve (12) months against losses arising from the interruption
of Tenant's business, and for lost profits, and charges and expenses which
continue but would have been earned if the business had gone on without
interruption, insuring against such perils, in such form and with such
deductible amount as are commercially reasonable;
(iii) "Special" (also known as "all risk") property insurance
(including, without limitation, boiler and machinery (if applicable);
sprinkler damage, vandalism and malicious mischief) on all of Tenant's
personal property. Such insurance shall be in an amount equal to full
replacement cost of the aggregate of the foregoing and shall provide
coverage comparable to the coverage in the standard ISO All Risk form,
when such form is supplemented with the coverages required above;
(iv) Worker's compensation insurance with limits as may be
required by law.
(v) Such other insurance as may be required by Laws, or by
Landlord to the extent it is commercially reasonable for tenants to be
required to carry such other insurance under similar leases with respect
to similar property in similar locations.
Insurance required under this Paragraph 11(d) shall be in companies rated "A"X
or better in "Best's Insurance Guide." On or before the date Tenant commences
work on the Tenant Improvements, and thereafter at least twenty (20) days before
the expiration dates of expiring policies, Tenant shall deliver to Landlord
certificates evidencing such insurance policies, and with respect to the
commercial general liability insurance naming the additional insureds thereof,
and, at Landlord's request, Tenant shall also deliver copies of policies of such
insurance or other
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evidence of insurance as Landlord may request. In the event Tenant shall fail to
procure such insurance, or to deliver such certificates, policies or evidence of
insurance as required in the preceding sentence, Landlord may, at its option,
procure same for the account of Tenant, and the cost thereof shall be paid to
Landlord as Additional Charges within five (5) days after delivery to Tenant of
bills therefor.
(e) The provisions of this Paragraph 11 shall survive the
expiration or termination of this Lease with respect to any claims or liability
occurring prior to such expiration or termination.
(f) Landlord shall maintain insurance on the Project, including
the Buildings, the Tenant Improvements and any Alterations installed in the
Premises by Tenant at its expense to the extent Tenant provides Landlord with
all information reasonably required by Landlord or its insurer in connection
therewith (with the entire cost of any such insurance on Tenant Improvements and
Alterations to be payable directly by Tenant to Landlord as an Additional
Charge, including the incremental cost to add such insurance to Landlord's
policies and any deductibles payable with respect to such Tenant Improvements
and Alterations), against fire and risks covered by "special" coverage (also
known as "all risk") (excluding earthquake and flood, though Landlord, at its
sole option, may include this coverage, and Tenant acknowledges that Landlord
intends to initial carry such coverage) on a 100% of "replacement cost" basis
(though reasonable deductibles may be included under such coverage). Landlord's
insurance shall also cover the improvements installed by Landlord prior to the
commencement of the Term and the Tenant Improvements installed by Tenant
pursuant to the Work Letter, shall have a building ordinance provision, and
shall provide for rental interruption insurance covering a period of twelve (12)
full months. In no event shall Landlord be deemed a co-insurer under such
policy. Landlord shall also maintain commercial general liability insurance on
an occurrence basis in amounts not less than Three Million Dollars ($3,000,000)
per occurrence with respect to bodily injury or death and property damage in the
Project. Notwithstanding the foregoing obligations of Landlord to carry
insurance, Landlord may modify the foregoing coverages if and to the extent it
is commercially reasonable to do so. Landlord agrees to provide Tenant, upon
written request, with certificates of insurance evidencing the foregoing
coverages.
(g) Tenant acknowledges that even if Landlord installs and
operates security cameras or other security equipment and/or provides any other
services that could be construed as being intended to enhance security, Landlord
shall have no obligation to Tenant or to any of Tenant's Parties for any damage,
claim, loss or liability related to any claim that Landlord had a duty to
provide security or that the equipment or services provided by Landlord were
inadequate, inoperative or otherwise failed to provide adequate security. Any
such claim made against Landlord by any employee, customer or invitee of Tenant
shall be included within Tenant's obligation of indemnity and defense set forth
in subparagraph (c) above.
12. WAIVER OF SUBROGATION. Notwithstanding anything to the contrary in
this Lease, the parties hereto release each other (including Landlord Parties
and Tenant Parties) and their respective agents, employees, successors,
assignees and subtenants from all liability for injury to any person or damage
to any property that is caused by or results from a risk (i) which is actually
insured against, to the extent of receipt of payment under such policy (unless
the failure to receive payment under any such policy results from a failure of
the insured party to comply with or observe the terms and conditions of the
insurance policy covering such liability, in which event, such release shall not
be so limited), (ii) which is required to be insured against under this Lease,
without regard to the negligence or willful misconduct of the entity so
released, or (iii) which would normally be covered by the standard form of
"special" or "all risk" coverage property insurance. Landlord and Tenant shall
each obtain from their respective insurers under all policies of fire, theft,
and other property insurance maintained by either of them at any time during the
Term insuring or covering the Building, the Premises, or the Project or any
portion thereof of its contents therein, a waiver of all rights of subrogation
which the insurer of one party might otherwise, if at all, have against the
other party and Landlord and Tenant shall each indemnify the other against any
loss or expense, including reasonable attorneys' fees, resulting from the
failure to obtain such waiver.
13. SERVICES AND UTILITIES.
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(a) Landlord shall provide the maintenance and repairs described
in Paragraph 8(a), except for damage occasioned by the act or omission of Tenant
or for which Tenant is responsible pursuant to Paragraph 8(c), which damage
shall be repaired by Landlord at Tenant's expense.
(b) Subject to the provisions elsewhere herein contained and to
the Rules and Regulations, Tenant shall be responsible for arranging for, and
direct payment of any and all cost of, garbage pickup, recycling, janitorial,
security, transportation management programs, water, electricity, gas,
telephone, cable and digital services. In addition, except as set forth in
Paragraph 8, Tenant shall provide the maintenance, repair and replacement of
Building Systems in connection with such utilities and services, and all other
maintenance, repair and services as described in Paragraph 8(b). Landlord shall
cooperate with Tenant's efforts to arrange all such services. If Landlord
assumes Tenant's maintenance obligations with respect to the Building Systems
pursuant to Paragraphs 8(b) or 8(e), Tenant shall cooperate fully with Landlord
and abide by all the reasonable regulations and requirements that Landlord may
prescribe for the proper functioning and protection of the Building Systems.
(c) Tenant will not without the written consent of Landlord, which
consent shall not be unreasonably withheld or delayed, use any apparatus or
device in the Premises which, when used, puts an excessive load on the Building
or its structure or systems, including, without limitation, electronic data
processing machines, punch card machines and machines using excess lighting or
voltage in excess of the amount for which the Building is designed.
(d) Landlord shall not be in default hereunder, nor be deemed to
have evicted Tenant, nor be liable for any damages directly or indirectly
resulting from, nor shall the rental herein reserved be abated, except as
expressly provided for in the second to last sentence of this paragraph, by
reason of (i) the installation, use or interruption of use of any equipment in
connection with the foregoing utilities and services (except in the case of
Landlord's gross negligence or willful misconduct); (ii) failure to furnish or
delay in furnishing any services to be provided by Landlord when such failure or
delay is caused by Acts of God or the elements, labor disturbances of any
character, any other accidents or other conditions beyond the reasonable control
of Landlord, or by the making of repairs or improvements to the Premises or to
the Building (except in the case of Landlord's gross negligence or willful
misconduct); or (iii) the limitation, curtailment, rationing or restriction on
use of water or electricity, gas or any other form of energy or any other
service or utility whatsoever serving the Premises or the Project. Furthermore,
Landlord shall be entitled to cooperate with the mandatory requirements of
national, state or local governmental agencies or utilities suppliers in
connection with reducing energy or other resources consumption. If the Premises
become unsuitable for Tenant's use as a consequence of cessation of gas and
electric utilities or other services provided to the Premises resulting from a
casualty covered by Landlord's insurance, then Tenant's Monthly Base Rent and
Additional Charges shall xxxxx during the period of time in which Tenant cannot
occupy the Premises for the Permitted Uses, but only to the extent of rental
abatement insurance proceeds received by Landlord (or, if Landlord fails to
carry such insurance for the period required by Paragraph 12(f), or fails to pay
premiums for such insurance and such failure does not result from Tenant's
failure to perform Tenant's obligations hereunder, proceeds that would have been
payable to Landlord in the absence of such failure). In no event shall any
mortgagee or beneficiary under any mortgage or deed of trust on all or any
portion of the Project, the Building, or the land on which all or any portion of
the Project is located (any such mortgagee or beneficiary, a "Mortgagee") be or
become liable for any default of Landlord under this Paragraph 13.
14. TENANT'S AND GUARANTOR'S CERTIFICATES. Tenant, at any time and from
time to time, within ten (10) days from receipt of written notice from Landlord,
will execute, acknowledge and deliver to Landlord and, at Landlord's request, to
any prospective tenant, purchaser, ground or underlying lessor or Mortgagee or
any other party acquiring an interest in Landlord, a certificate of Tenant in a
form reasonably acceptable to Tenant and containing such information as is
customary or as may reasonably be required by any of such persons. Tenant has
approved the forms of tenant certificates attached as Exhibit "D-1" or "D-2"
(depending on whether such request occurs prior to, or after occupancy of the
Premises by Tenant) without limiting Tenant's future approval of any additional
or substitute certificate. Tenant, at any time and from time to time, within ten
(10) days after written request from Landlord, shall cause Guarantor to execute,
acknowledge and deliver to Landlord and, at Landlord's request, to any
prospective purchaser, ground or underlying lessor or Mortgagee of any part of
the Project or any other party acquiring an interest in Landlord, a Certificate
of Guarantor stating such information as may be
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customary or as may be reasonably required by any such persons, including,
without limitation, that the Guaranty is in full force and effect, that no
uncured defaults exist by either party under the Guaranty or any acts or
omissions which, but for the passing of time or giving of notice, would be a
default under the Guaranty, that the Guaranty will continue in full force and
effect notwithstanding any assignment, sublease, or termination of the Lease,
that there are no actions pending against Guarantor under the bankruptcy laws of
the United States or any state thereof, and such matters with respect to the
Lease, to Guarantor's best knowledge, as are included in the forms of tenant
certificate attached hereto. It is intended that any such certificate of Tenant
or Guarantor delivered pursuant to this Paragraph 14 may be relied upon by
Landlord and any prospective tenant, purchaser, ground or underlying lessor or
Mortgagee, or such other party.
15. HOLDING OVER. If Tenant (directly or through any
successor-in-interest of Tenant) remains in possession of all or any portion of
the Premises after the expiration or termination of this Lease with the written
consent of Landlord, such continued possession shall be construed to be a
tenancy from month to month at one hundred twenty-five percent (125%) of the
Monthly Base Rent payable in the last full month prior to such termination or
expiration (and shall be increased in accordance with Paragraph 4(b), together
with an amount estimated by Landlord for the monthly Additional Charges for
Expenses and Taxes payable under this Lease, and shall otherwise be on the terms
and conditions herein specified so far as applicable. If Tenant (directly or
through any successor-in-interest of Tenant) remains in possession of all or any
portion of the Premises after the expiration or termination of this Lease
without the written consent of Landlord, Tenant's continued possession shall be
on the basis of a tenancy at the sufferance of Landlord. In such event, Tenant
shall continue to comply with or perform all the terms and obligations of Tenant
under this Lease, except that the Monthly Base Rent during Tenant's holding over
shall be the greater of the then-fair market rent for the Premises (as
reasonably determined by Landlord) or one hundred fifty percent (150%) of the
Monthly Base Rent and Additional Charges for Expenses and Taxes payable in the
last full month prior to the termination or expiration of this Lease (and shall
be increased in accordance with Paragraph 4(b)). In addition to Rent, Tenant
shall pay Landlord for all damages proximately caused by reason of the Tenant's
retention of possession. Landlord shall use commercially reasonable efforts to
notify Tenant if and when (a) a new lease, or a letter of intent for a new
lease, has been entered into for any portion of the Premises, (b) a loan
application has been submitted by Landlord or a loan commitment issued to
Landlord in connection with the Premises at a time when Tenant is then holding
over or Landlord in its reasonable judgment believes a Tenant holdover is likely
prior to the contemplated loan being fully funded, or (c) a sale contract or
letter of intent for a sale of the Premises to a third party has been entered
into for the Premises at a time when Tenant is then holding over or Landlord in
its reasonable judgment believes a Tenant holdover is likely prior to the
contemplated sale being consummated. Landlord's acceptance of Rent after the
termination of this Lease shall not constitute a renewal of this Lease, and
nothing contained in this provision shall be deemed to waive Landlord's right of
re-entry or any other right hereunder or at law. Tenant acknowledges that, in
Landlord's marketing and re-leasing efforts for the Premises, Landlord is
relying on Tenant's vacation of the Premises on the Expiration Date.
Accordingly, Tenant shall indemnify, defend and hold Landlord harmless from and
against all claims, liabilities, losses, costs, expenses and damages arising or
resulting directly or indirectly from Tenant's failure to timely surrender the
Premises, including (i) any loss, cost or damages suffered by any prospective
tenant of all or any part of the Premises, and (ii) Landlord's damages as a
result of such prospective tenant rescinding or refusing to enter into the
prospective lease of all or any portion of the Premises by reason of such
failure of Tenant to timely surrender the Premises.
16. SUBORDINATION.Without the necessity of any additional document being
executed by Tenant for the purpose of effecting a subordination, this Lease
shall be subject and subordinate at all times to: (i) any and all Encumbrances
(including without limitation ground leases, underlying leases or CC&Rs) which
may now exist or hereafter be executed affecting all or any portion of the
Project, and (ii) the lien of any mortgage or deed of trust which may now exist
or hereafter be executed in any amount for which all or any portion of the
Project, ground leases or underlying leases, or Landlord's interest or estate in
any of said items, is specified as security (any of the foregoing, a "Mortgage",
and the beneficiary or mortgagee under any of the foregoing, a "Mortgagee").
Notwithstanding the foregoing, Landlord shall have the right to subordinate or
cause to be subordinated any such ground leases or underlying leases or any such
Mortgages to this Lease. In the event that any ground lease or underlying lease
terminates for any reason or any Mortgage is foreclosed or a conveyance in lieu
of foreclosure is made for any reason, Tenant shall, notwithstanding any
subordination, attorn to and become the Tenant of the successor in interest to
Landlord at the option of such successor in interest. Notwithstanding anything
to the
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contrary contained herein, this Lease shall not be subject or subordinate to any
ground or underlying lease or to any Mortgage, unless the ground lessor or
Mortgagee executes a reasonable recognition and non-disturbance agreement which
provides that Tenant shall be entitled to continue in possession of the Premises
on the terms and conditions of this Lease if and for so long as Tenant fully
performs all of its obligations hereunder. Tenant covenants and agrees to
execute and deliver upon demand by Landlord and in the form requested by
Landlord and reasonably acceptable to Tenant (Tenant has approved the form of
the subordination, non-disturbance and attornment agreement attached as Exhibit
"E", without limiting Tenant's future approval of any additional or substitute
form), any customary additional documents evidencing the priority or
subordination of this Lease with respect to any such ground leases or underlying
leases or the lien of any such Mortgage. Tenant shall execute, deliver and
record any such documents within ten (10) days after Landlord's written request.
17. RULES AND REGULATIONS. Tenant shall faithfully observe and comply
with the rules and regulations attached to this Lease as Exhibit "F" and all
reasonable modifications thereof and additions thereto from time to time put
into effect by Landlord. Landlord shall not be responsible for the
nonperformance by any other Tenant or occupant of the Buildings or the Project
of any said rules and regulations. Landlord shall enforce the Rules and
Regulations against all tenants in the applicable Building or the Project (as
applicable) in a non-discriminatory manner. In the event of an express and
direct conflict between the terms, covenants, agreements and conditions of this
Lease and those set forth in the rules and regulations, as modified and amended
from time to time by Landlord, this Lease shall control.
18. RE-ENTRY BY LANDLORD. Landlord reserves and shall at all reasonable
times, upon reasonable prior notice (except in the case of an emergency), and
subject to Tenant's reasonable security precautions and the right of Tenant to
accompany Landlord at all times, have the right to re-enter the Premises to
inspect the same, to supply janitor service and any other service to be provided
by Landlord to Tenant hereunder (unless Tenant is supplying such service), to
show the Premises to prospective purchasers, Mortgagees or tenants (as to
prospective tenants, only during the last twelve (12) months of the Term), to
post notices of nonresponsibility or as otherwise required or allowed by this
Lease or by law, and to alter, improve or repair the Premises and any portion of
the Buildings and may for that purpose erect, use, and maintain scaffolding,
pipes, conduits, and other necessary structures in and through the Premises
where reasonably required by the character of the work to be performed. Landlord
shall not be liable in any manner for any inconvenience, disturbance, loss of
business, nuisance or other damage arising from Landlord's entry and acts
pursuant to this Paragraph and Tenant shall not be entitled to any abatement or
reduction of Monthly Base Rent or Additional Charges if Landlord exercises any
rights reserved in this paragraph. Tenant hereby waives any claim for damages
for any injury or inconvenience to or interference with Tenant's business, any
loss of occupancy or quiet enjoyment of the Premises, and any other loss
occasioned thereby, except for Landlord's gross negligence or willful
misconduct. For each of the aforesaid purposes, Landlord shall at all times have
and retain a key with which to unlock all of the doors in, upon and about the
Premises, excluding Tenant's vaults and safes, or special security areas
(designated in advance), and Landlord shall have the right to use any and all
means which Landlord may deem necessary or proper to open said doors in an
emergency, in order to obtain entry to any portion of the Premises, and any
entry to the Premises, or portion thereof obtained by Landlord by any of said
means, or otherwise, shall not under any emergency circumstances be construed or
deemed to be a forcible or unlawful entry into, or a detainer of, the Premises,
or an eviction, actual or constructive, of Tenant from the Premises or any
portions thereof. Landlord shall use commercially reasonable efforts during
re-entry to not unreasonably interfere with Tenant's use of the Premises or its
business conducted therein.
19. INSOLVENCY OR BANKRUPTCY. The appointment of a receiver to take
possession of all or substantially all of the assets of Tenant, or an assignment
of Tenant for the benefit of creditors, or any action taken or suffered by
Tenant under any insolvency, bankruptcy, reorganization or other debtor relief
proceedings, whether now existing or hereafter amended or enacted, shall at
Landlord's option constitute a breach of this Lease by Tenant (provided that,
with respect to a petition in bankruptcy, or receiver attachment, or other
remedy pursued by a third party, such event shall not constitute a breach of
this Lease so long as it is discharged within sixty (60) days). Upon the
happening of any such event or at any time thereafter, this Lease shall
terminate five (5) days after written notice of termination from Landlord to
Tenant. In no event shall this Lease be assigned or assignable by operation of
law or by voluntary or involuntary bankruptcy proceedings or otherwise and in no
event shall this Lease or any rights or
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privileges hereunder be an asset of Tenant under any bankruptcy, insolvency,
reorganization or other debtor relief proceedings.
20. DEFAULT.
(a) The failure to perform or honor any covenant, condition or
representation made under this Lease or the Work Letter shall constitute a
"Default" hereunder by Tenant upon expiration of the appropriate grace or cure
period provided in this Paragraph 20(a). Tenant shall have a period of three
business (3) days from the date of written notice from Landlord (which notice
shall be in lieu of and not in addition to the notice required by Section 1161
of the California Code of Civil Procedure) within which to cure any failure to
pay Monthly Base Rent or Additional Charges; provided, however, that Landlord
shall not be required to provide such notice more than three (3) times during
any two (2) year period during the Term with respect to non-payment of Monthly
Base Rent or Additional Charges, the third such non-payment constituting Default
without requirement of notice. Tenant shall have a period of thirty (30) days
from the date of receipt of written notice from Landlord within which to cure
any other curable Default under this Lease; provided, however, that with respect
to any curable Default other than the payment of Monthly Base Rent or Additional
Charges that cannot reasonably be cured within thirty (30) days, the cure period
shall be extended for an additional period of time reasonably required to cause
such cure if Tenant commences to cure within thirty (30) days from Landlord's
notice and continues to prosecute diligently the curing thereof, provided that
such cure period shall in no event extend beyond ninety (90) days after
Landlord's notice. Notwithstanding the foregoing, (i) if a specific time for
performance or a different cure period is specified elsewhere in this Lease or
the Work Letter with respect to any specific obligation of Tenant, such specific
performance or cure period shall apply with respect to a failure of such
obligation in lieu of, and not in addition to, the cure period provided in this
Paragraph 20(a); (ii) the cure periods specified in Paragraphs 8(e) and 24 shall
apply with respect to Landlord's rights to cure Tenant's failure to perform
pursuant to Paragraphs 8(e) and 24, respectively; and (iii) the cure rights
provided in this Paragraph 20(a) shall not extend the specified time for
compliance with any required delivery, approval or performance obligation under
Paragraph 13 or 15 of the Lease or under the Work Letter. Upon a Default of this
Lease by Tenant, Landlord shall have the following rights and remedies in
addition to any other rights or remedies available to Landlord at law or in
equity:
(i) The rights and remedies provided by California Civil
Code, Section 1951.2, including but not limited to, recovery of the worth
at the time of award of the amount by which the unpaid Monthly Base Rent
and Additional Charges for the balance of the Term after the time of award
exceeds the amount of rental loss for the same period that the Tenant
proves could be reasonably avoided, as computed pursuant to subsection (b)
of said Section 1951.2;
(ii) The rights and remedies provided by California Civil
Code, Section 1951.4, that allows Landlord to continue this Lease in
effect and to enforce all of its rights and remedies under this Lease,
including the right to recover Monthly Base Rent and Additional Charges as
they become due, for so long as Landlord does not terminate Tenant's right
to possession; provided, however, if Landlord elects to exercise its
remedies described in this Paragraph 20(a)(ii) and Landlord does not
terminate this Lease, and if Tenant requests Landlord's consent to an
assignment of this Lease or a sublease of the Premises at such time as
Tenant is in Default, Landlord shall not unreasonably withhold its consent
to such assignment or sublease. Acts of maintenance or preservation,
efforts to relet the Premises or the appointment of a receiver upon
Landlord's initiative to protect its interest under this Lease shall not
constitute a termination of Tenant's rights to possession;
(iii) The right to terminate this Lease by giving notice to
Tenant in accordance with applicable law;
(iv) If Landlord elects to terminate this Lease, the right
and power to enter the Premises and remove therefrom all persons and
property and, to store such property in a public warehouse or elsewhere at
the cost of and for the account of Tenant, and to sell such property and
apply such proceeds therefrom pursuant to applicable California law.
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(b) Landlord shall have a period of thirty (30) days from the date
of written notice from Tenant within which to cure any default of Landlord under
this Lease; provided, however, that with respect to any default that cannot
reasonably be cured within thirty (30) days, the default shall not be deemed to
be uncured if Landlord commences to cure within thirty (30) days from Tenant's
notice and continues to prosecute diligently the curing thereof. Tenant agrees
to deliver to any Mortgagee a copy of any Notice of Default served upon the
Landlord in the manner prescribed by Paragraph 27 hereof, provided that prior to
such notice Tenant has been notified in writing (by way of Notice of Assignment
of Rents and Leases, or otherwise) of the address of such Mortgagee. Tenant
further agrees that if Landlord shall have failed to cure such default within
the time provided for in this Lease, then the Mortgagee shall have an additional
thirty (30) days (provided that Tenant notifies Mortgagee concurrently with
Tenant's notice to Landlord at the beginning of Landlord's thirty (30) day
period; otherwise Mortgagee shall have sixty (60) days from the date on which it
is noticed) within which to cure such default or if such default cannot be cured
within that time, then such additional time as may be reasonably necessary to
cure such default shall be granted if within such applicable period Mortgagee
has commenced and is diligently pursuing the remedies necessary to cure such
default (including, but not limited to, commencement of foreclosure proceedings,
if necessary to effect such cure).
21. DAMAGE BY FIRE, ETC.
(a) RESTORATION OR TERMINATION. If the Premises or either Building
(including the Tenant Improvements) are damaged by fire or other casualty,
Landlord shall forthwith repair the same, provided that such repairs can be made
(i) within two hundred seventy (270) days after the date of such damage, if such
damage is to both Buildings, or (ii) within one hundred eighty (180) days after
the date of such damage, if such damage is to only one Building, under the laws
and regulations of the federal, state and local governmental authorities having
jurisdiction thereof. Except as otherwise set forth herein, in such event, this
Lease shall remain in full force and effect except that Tenant shall be entitled
to a proportionate reduction of Monthly Base Rent and Additional Charges for
Expenses and Taxes while such repairs to be made hereunder by Landlord are being
made. Such reduction of Monthly Base Rent and Additional Charges for Expenses
and Taxes, if any, shall be based upon the greater of (i) the proportion that
the area of the Premises rendered untenantable by such damage bears to the total
area of the Premises; or (ii) the extent to which such damage and the making of
such repairs by Landlord shall interfere with the business carried on by Tenant
in the Premises, and shall be limited to the extent of rental abatement
insurance proceeds actually received by Landlord under Landlord's casualty
insurance policy. Within thirty (30) days after the date of such damage,
Landlord shall notify Tenant of the approximate date by which Landlord believes
that it can complete the repair of such damage ("Estimated Damage Completion
Date") (including such dates for each floor of the Premises if the completion
thereof will occur on different dates). If Landlord's Estimated Damage
Completion Date is more than two hundred seventy (270) days or one hundred
eighty (180) days, as applicable, from the date of such damage, Landlord shall
have the option within thirty (30) days after the date of such damage to elect
either to: (i) notify Tenant of Landlord's intention to repair such damage and
diligently prosecute such repairs, in which event this Lease shall continue in
full force and effect (subject to Tenant's right to terminate provided below)
and the Monthly Base Rent and Additional Charges for Expenses and Taxes shall be
reduced as provided herein; or (ii) notify Tenant of Landlord's election to
terminate this Lease as of a date specified in such notice, which date shall not
be less than thirty (30) days nor more than sixty (60) days after such notice is
given and this Lease shall terminate on the date specified in such notice;
provided, however, that if the damage giving rise to such right to terminate
this Lease by Landlord is the result of damage in only one of the Buildings
(such Building being defined for purposes of this Paragraph as the "Damaged
Building"), then Landlord's right to terminate this Lease shall only apply to
the portion of the Premises, if any, in the Damaged Building, and in such event
the Lease shall remain in full force and effect with respect to the Premises in
the other Building (such building being defined for purposes of this Paragraph
as the "Undamaged Building"), and as of the effective date of such termination
Tenant's Share shall only be Tenant's Share with respect to the Undamaged
Building, and the Monthly Base Rent shall be adjusted to the rate per rentable
square foot then in effect under the Lease multiplied by the rentable square
feet in the Rentable Area of the Premises located in the Undamaged Building. If
Landlord notifies Tenant that Landlord's Estimated Damage Completion Date is
more than two hundred seventy (270) days following the date of the damage if
such damage is to both Buildings, or more than one hundred eighty (180) days
following the date of the damage if such damage is to one of the Buildings, then
Tenant shall have a right to terminate the Lease in respect to all floors of the
Premises to which Landlord's notice applied ("Affected Premises Portion") within
fifteen (15) days following
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receipt of Landlord's notice, by providing Landlord with written notice of its
election to do so. In such event (and also in the event Landlord terminates the
Lease pursuant to the immediately preceding sentence), Tenant shall have no
liability, in respect of the portion of the Premises with respect to which the
Lease was terminated, for payment of the deductible under Landlord's insurance
relating to such damage. In case of termination by either event, the Monthly
Base Rent and Additional Charges for Expenses and Taxes shall be reduced by a
proportionate amount based upon the extent to which such damage interfered with
the business carried on by Tenant in the Premises, and Tenant shall pay such
reduced Monthly Base Rent and Additional Charges for Expenses and Taxes up to
the effective date of the termination. Landlord agrees to refund to Tenant any
Monthly Base Rent and Additional Charges for Expenses and Taxes previously paid
for any period of time subsequent to the effective date of such termination. If
the Lease is terminated with respect to only a portion of the Premises, leaving
the Lease in effect with respect to the balance of the Premises, the Monthly
Base Rent and Tenant's Share shall be appropriately adjusted. The repairs to be
made hereunder by Landlord shall not include, and Landlord shall not be required
to repair, any damage by fire or other cause to the property of Tenant or any
repairs or replacements of any paneling, decorations, railings, floor coverings
or any alterations, additions, fixtures or improvements installed on the
Premises by or at the expense of Tenant other than the Tenant Improvements to
the extent they are covered by Landlord's insurance policies; provided, however,
that to the extent Landlord's insurance policies cover any Alterations pursuant
to Paragraph 11(f), Landlord shall make available to Tenant any available
insurance proceeds with respect to any damage or destruction that affects such
Alterations, after deducting therefrom the cost, if any, to Landlord for the
recovery of such proceeds and/or of any repair to the Buildings or Premises or
Project for which Landlord is responsible hereunder, in order for Tenant to
repair and restore such Alterations, pursuant to disbursement procedures
established by Landlord and/or any Mortgagee. Tenant hereby waives the
provisions of Section 1932.2, and Section 1933.4, of the Civil Code of
California.
(b) CASUALTY AT END OF TERM. Notwithstanding anything to the
contrary contained in this Lease, if during the twelve (12) months prior to the
expiration of the Term, either Building or a substantial portion thereof is
damaged or destroyed by fire or other casualty, either Tenant or Landlord shall
have the option to terminate this Lease with respect to the Damaged Building as
of the date of such damage or destruction by written notice to the other party
given within thirty (30) days after such damage or destruction, in which event
Landlord shall make a proportionate refund to Tenant of such Monthly Base Rent
and Additional Charges for Expenses and Taxes as may have been paid in advance
with respect to the Damaged Building, and the Monthly Base Rent and Tenant's
Share shall be adjusted as provided in Paragraph 21(a) with respect to a
termination of the Lease with respect to less than the entire Premises. For
purposes of this paragraph, a "substantial portion" shall mean fifty percent
(50%) of a Building.
(c) UNINSURED CASUALTY. Notwithstanding Paragraph 21(a), and
subject to the termination right in Paragraph 21(b), in the event of a total or
partial destruction of one or both of the Buildings (i) by a casualty of a type
not required to be insured against by Landlord under the terms of this Lease, or
(ii) under circumstances where the net insurance proceeds (plus applicable
deductibles that are included in Expenses) obtained as a result of such casualty
(or, if Landlord fails to carry any specific insurance that Landlord is
obligated to carry under this Lease, or fails to pay premiums for such insurance
and such failure does not result from Tenant's failure to perform its
obligations hereunder, proceeds that would have been payable to Landlord in the
absence of such failure) are ninety percent (90%) or a lesser percentage of the
cost of restoration, rebuilding or replacement (including without limitation if
such circumstances result from a requirement by any Mortgagee that Landlord
utilize insurance proceeds to pay down the Mortgage), which destruction exceeds
ten percent (10%) of the replacement cost of the Damaged Building, this Lease
shall automatically terminate with respect to the Damaged Building, unless (x)
Landlord elects to reconstruct the Damaged Building (not including the Tenant
Improvements) by delivering written notice to Tenant within thirty (30) days
after the date of such damage, and (y) the damage can be reconstructed within
two hundred seventy (270) days after the date of such damage. If Landlord elects
to reconstruct, the cost incurred by Landlord for such reconstruction shall be
amortized over the useful life of the Damaged Building and such amortization
shall be reimbursed by Tenant to Landlord as an Additional Charge, together with
interest at the Default Rate, in equal monthly installments; provided, however,
that Tenant shall not be obligated to pay for any portion of the useful life of
the Damaged Building which extends beyond the Expiration Date (as it may be
extended by the Extension Term). If Landlord reconstructs the Damaged Building
pursuant to this Paragraph 21(c), Tenant shall be obligated to reconstruct the
Tenant Improvements, at Tenant's cost.
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22. EMINENT DOMAIN. If any part over fifteen percent (15%) of the
Premises located in either Building shall be taken or appropriated under the
power of eminent domain or conveyed in lieu thereof, Tenant shall have the right
to terminate this Lease, at its option, with respect to the portion of the
Premises in such Building, and in such event the Lease shall remain in full
force and effect with respect to the Premises in the Unaffected Building (as
defined below), and as of the effective date of such termination Tenant's Share
of Expenses and Taxes shall be only Tenant's Share with respect to the
Unaffected Building, and the Monthly Base Rent shall be adjusted to the rate per
rentable square foot then in effect under the Lease multiplied by the rentable
square feet of the Rentable Area of the Premises located in the Unaffected
Building. If any part of a Building shall be taken or appropriated under power
of eminent domain or conveyed in lieu thereof and such taking is so extensive
that it renders the remaining portion of the Building unsuitable for the use
being made of the Building on the date immediately preceding such taking,
Landlord may terminate this Lease at its option, with respect to the portion of
the Premises in such Building, and in such event the Lease shall remain in full
force and effect with respect to the Premises in the Unaffected Building, and as
of the effective date of such termination Tenant's Share shall only be Tenant's
Share with respect to the other Building, and the Monthly Base Rent shall be
adjusted to the rate per rentable square foot then in effect under the Lease
multiplied by the rentable square feet of the Premises located in the Unaffected
Building. For purposes of this Paragraph, the term "Unaffected Building" shall
mean the Building that is not subject to a termination right under either of the
preceding sentences. In either of such events, Landlord shall receive (and
Tenant shall assign to Landlord upon demand from Landlord) any income, rent,
award or any interest therein which may be paid in connection with the exercise
of such power of eminent domain, and Tenant shall have no claim against Landlord
for any part of the sum paid by virtue of such proceedings, whether or not
attributable to the value of the unexpired term of this Lease except that Tenant
shall be entitled to petition the condemning authority for the following: (i)
the then unamortized cost of any Alterations or Tenant Improvements paid for by
Tenant from its own funds (as opposed to any allowance, including the Tenant
Allowance, provided by Landlord); (ii) the value of Tenant's trade fixtures;
(iii) Tenant's relocation costs; and (iv) Tenant's goodwill, loss of business
and business interruption. If a part of the Premises shall be so taken or
appropriated or conveyed and neither party hereto shall elect to terminate this
Lease and the Premises have been damaged as a consequence of such partial taking
or appropriation or conveyance, Landlord shall restore the Premises continuing
under this Lease at Landlord's cost and expense; provided, however, that
Landlord shall not be required to repair or restore any injury or damage to the
property of Tenant or to make any repairs or restoration of any Alterations or
any Tenant Improvements installed on the Premises by or at the expense of
Tenant. Thereafter, the Monthly Base Rent and Additional Charges for Expenses
and Taxes to be paid under this Lease for the remainder of the Term shall be
proportionately reduced, such that thereafter the amounts to be paid by Tenant
shall be in the ratio that they are of the portion of the Premises not so taken
bears to the total area of the Premises prior to such taking. Notwithstanding
anything to the contrary contained in this Paragraph 22, if the temporary use or
occupancy of any part of the Premises shall be taken or appropriated under power
of eminent domain during the Term, this Lease shall be and remain unaffected by
such taking or appropriation and Tenant shall continue to pay in full all
Monthly Base Rent and Additional Charges payable hereunder by Tenant during the
Term. In the event of any such temporary appropriation or taking, Tenant shall
be entitled to receive that portion of any award which represents compensation
for the use of or occupancy of the Premises during the Term, and Landlord shall
be entitled to receive that portion of any award which represents the cost of
restoration of the Premises and the use and occupancy of the Premises after the
end of the Term. If such temporary taking is for a period longer than two
hundred and seventy (270) days and unreasonably interferes with Tenant's use of
the Premises or the Common Area, then Tenant shall have the right to terminate
the Lease; provided, however, that if such interference only affects the
Premises located in one of the Buildings, Tenant's right to terminate shall only
be with respect to the Premises affected. Landlord and Tenant understand and
agree that the provisions of this Paragraph 22 are intended to govern fully the
rights and obligations of the parties in the event of a Taking of all or any
portion of the Premises. Accordingly, the parties each hereby waives any right
to terminate this Lease in whole or in part under Sections 1265.120 and 1265.130
of the California Code of Civil Procedure or under any similar Law now or
hereafter in effect.
23. SALE BY LANDLORD. If Landlord sells or otherwise conveys its
interest in all or any portion of the Premises, Landlord shall be relieved of
its obligations under the Lease with respect to the conveyed portion from and
after the date of sale or conveyance (including the obligations of Landlord
under Paragraph 41), only when the successor assumes in writing the obligations
to be performed by Landlord on and after the effective date of the
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transfer and Landlord transfers the Security Deposit to its transferee,
whereupon Tenant shall attorn to such successor.
24. RIGHT OF LANDLORD TO PERFORM. All covenants and agreements to be
performed by Tenant under any of the terms of this Lease shall be performed by
Tenant at Tenant's sole cost and expense and without any abatement of Monthly
Base Rent or Additional Charges. If Tenant fails to pay any sum of money other
than Monthly Base Rent or Additional Charges required to be paid by it
hereunder, or fails to perform any other act on its part to be performed
hereunder (including, without limitation, Tenant's obligation to maintain and
repair the Premises and Building Systems pursuant to Paragraph 8(b)), regardless
of whether such failure has become a Default hereunder, and either (i) such
failure continues, and Tenant does not commence cure of such failure, for ten
(10) days after notice thereof by Landlord as provided in Paragraph 20(a)
(except in the event of emergency, when no notice or cure period shall be
required but Landlord shall make reasonable good faith efforts to notify Tenant
prior to commencing such emergency cure), or (ii) having commenced such cure
Tenant does not diligently prosecute the curing thereof, or (iii) a default
under any Mortgage or Encumbrance is, in Landlord's reasonable judgment (after
reasonable notice to Tenant under the circumstances, except in the event of
emergency), likely to occur due to Tenant's failure to cure such failure in a
timely manner, then in any such situation Landlord may, but shall not be
obligated so to do, and without waiving or releasing Tenant from any obligations
of Tenant, make any such payment or perform any such act on Tenant's part to be
made or performed as provided in this Lease. All sums so paid and costs so
incurred by Landlord, together with interest thereon at the Default Rate from
the date Landlord makes such payment or incurs such cost, shall be payable as
Additional Charges to Landlord within thirty (30) days after receipt by Tenant
of a xxxx or statement therefor.
25. SURRENDER OF PREMISES.
(a) At the end of the Term or any renewal thereof or other sooner
termination of this Lease, Tenant will peaceably deliver to Landlord possession
of the Premises, together with all improvements or additions upon or belonging
to Landlord, by whomsoever made, in substantially the same condition as
received, or first installed, subject to the terms of Paragraphs 7, subject to
normal wear and tear and the rights and obligations of Tenant concerning
casualty damage pursuant to Paragraph 21. Tenant may, upon the termination of
this Lease, remove all movable furniture and equipment belonging to Tenant
(including the telephone system (other than wiring, conduit and fiberoptic
cabling), security system, demountable partitions, secretarial stations,
cubicles, cabinets or shelving systems and kitchen equipment), at Tenant's sole
cost, provided that Tenant repairs any damage caused by such removal. Property
not so removed by the Expiration Date (or in the event of an earlier
termination, within five (5) days of such earlier termination date) shall be
deemed abandoned by Tenant, and title to the same shall thereupon pass to
Landlord. Upon such expiration or sooner termination of the Term, Tenant shall
upon demand by Landlord, at Tenant's sole cost and expense, forthwith and with
all due diligence remove Alterations made by or for the account of Tenant that
are designated by Landlord to be removed (provided, however, that upon the
written request of Tenant prior to installation of any Alterations, Landlord
shall advise Tenant at that time whether or not such specific Alterations must
be removed upon the expiration or sooner termination of this Lease, and to the
extent Landlord has so agreed to allow such Tenant Improvements or Alterations
to remain in the Premises, Tenant shall not be obligated to remove such
Alterations), and restore the Premises to its original condition as of the
Delivery Date (but with the Tenant Improvements approved by Landlord pursuant to
the Work Letter), subject to normal wear and tear, the rights of and obligations
of Tenant concerning casualty damage pursuant to Paragraph 21, and the
foregoing.
(b) The voluntary or other surrender of this Lease by Tenant, or a
mutual cancellation thereof, shall not work a merger, and shall, at the option
of Landlord, terminate all or any existing subleases or subtenancies, or may, at
the option of Landlord, operate as an assignment to it of any or all such
subleases or subtenancies.
26. WAIVER. If either Landlord or Tenant waives the performance of any
term, covenant or condition contained in this Lease, such waiver shall not be
deemed to be a waiver of any subsequent breach of the same or any other term,
covenant or condition contained herein. Furthermore, the acceptance of Rent or
Additional Charges by Landlord shall not constitute a waiver of any preceding
breach by Tenant of any term, covenant or
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condition of this Lease, regardless of Landlord's knowledge of such preceding
breach at the time Landlord accepted such Monthly Base Rent or Additional
Charges. Failure by Landlord to enforce any of the terms, covenants or
conditions of this Lease for any length of time shall not be deemed to waive or
to decrease the right of Landlord to insist thereafter upon strict performance
by Tenant. Waiver by Landlord of any term, covenant or condition contained in
this Lease may only be made by a written document signed by Landlord.
27. NOTICES. Except as otherwise expressly provided in this Lease, any
bills, statements, notices, demands, requests or other communications given or
required to be given under this Lease shall be effective only if rendered or
given in writing, sent by certified mail, return receipt requested, reputable
overnight carrier, or delivered personally, (i) to Tenant (A) at Tenant's
address set forth in the Basic Lease Information, if sent prior to Tenant's
taking possession of the Premises, or (B) at the Premises if sent subsequent to
Tenant's taking possession of the Premises, or (C) at any place where Tenant may
be found if sent subsequent to Tenant's vacating, deserting, abandoning or
surrendering the Premises; or (ii) to Landlord at Landlord's address set forth
in the Basic Lease Information; or (iii) to such other address as either
Landlord or Tenant may designate as its new address for such purpose by notice
given to the other in accordance with the provisions of this Paragraph 27. Any
such xxxx, statement, notice, demand, request or other communication shall be
deemed to have been rendered or given on the date the return receipt indicates
delivery of or refusal of delivery if sent by certified mail, the day upon which
recipient accepts and signs for delivery from a reputable overnight carrier, or
on the date a reputable overnight carrier indicates refusal of delivery, or upon
the date personal delivery is made. If Tenant is notified in writing of the
identity and address of any Mortgagee or ground or underlying lessor, Tenant
shall give to such Mortgagee or ground or underlying lessor notice of any
Default by Landlord under the terms of this Lease in writing sent by registered
or certified mail, and such Mortgagee or ground or underlying lessor shall be
given the opportunity to cure such Default prior to Tenant exercising any remedy
available to it.
28. TAXES PAYABLE BY TENANT. Prior to delinquency Tenant shall pay all
taxes levied or assessed upon Tenant's equipment, furniture, fixtures and other
personal property located in or about the Premises. If the assessed value of
Landlord's property is increased by the inclusion therein of a value placed upon
Tenant's equipment, furniture, fixtures or other personal property, Tenant shall
pay to Landlord, upon written demand, the taxes so levied against Landlord, or
the proportion thereof resulting from said increase in assessment.
29. ABANDONMENT. Tenant shall not abandon the Premises and cease
performing its financial and maintenance obligations under this Lease at any
time during the Term, and if Tenant shall abandon and cease performing its
financial and maintenance obligations under this Lease, or surrender the
Premises or be dispossessed by process of law, or otherwise, any personal
property belonging to Tenant and left on the Premises shall, at the option of
Landlord, be deemed to be abandoned and title thereto shall thereupon pass to
Landlord. Notwithstanding anything to the contrary contained herein, Tenant
shall not be allowed to vacate the Premises for any period of time unless either
(a) such vacation would not result in a termination of, limitation on, or other
adverse effect on, Landlord's insurance policies, or (b) Tenant pays the
incremental premium costs, and assumes responsibility for any increased
deductible amounts, to the extent required to cause Landlord's insurance
policies to not be terminated, limited or adversely affected as a result of such
vacation. For purposes of this Paragraph 29, the Tenant shall not be deemed to
have abandoned the Premises solely because the Tenant is not occupying the
Premises.
30. SUCCESSORS AND ASSIGNS. Subject to the provisions of Paragraph 10,
the terms, covenants and conditions contained herein shall be binding upon and
inure to the benefit of the parties hereto and their respective legal and
personal representatives, successors and assigns.
31. ATTORNEY'S FEES. If Tenant or Landlord brings any action for any
relief against the other, declaratory or otherwise, arising out of this Lease,
including any suit by Landlord for the recovery of Rent or possession of the
Premises, the losing party shall pay to the prevailing party a reasonable sum
for attorney's fees and costs, which shall be deemed to have accrued on the
commencement of such action and shall be paid whether or not the action is
prosecuted to judgment.
32. LIGHT AND AIR. Tenant covenants and agrees that no diminution of
light, air or view by any structure which may hereafter be lawfully erected
(whether or not by Landlord) shall entitle Tenant to any reduction
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of rent under this Lease, result in any liability of Landlord to Tenant, or in
any other way affect this Lease or Tenant's obligations hereunder. Landlord has
informed Tenant that it has no intention of constructing additional facilities
at the Project except those facilities needed to service the Project.
33. SECURITY DEPOSIT.
(a) LETTER OF CREDIT. Within seven (7) calendar days after
Tenant's execution of this Lease, Tenant shall deliver to Landlord an
unconditional, irrevocable, transferable letter of credit, in an amount equal to
the "Required Amount" (defined below) issued by a financial institution
acceptable to Landlord and in form and substance acceptable to Landlord in the
reasonable exercise of its discretion, with an original term of no less than one
year and automatic extensions through the end of the Term of this Lease and
sixty (60) days thereafter (the "Letter of Credit"). Landlord shall not
unreasonably withhold its approval of such a financial institution if it is a
national bank, or a bank branch located in the United States (with an office in
the United States allowing the Letter of Credit to be presented to and paid by
such office pursuant to procedures acceptable to Landlord in its reasonable
discretion) with assets of the issuing bank or bank branch in excess of Twenty
Billion Dollars ($20,000,000,000). The Letter of Credit shall (i) be a stand-by,
at-sight, irrevocable letter of credit; (ii) be payable to Landlord or its
assignee; (iii) require that any draw on the Letter of Credit shall be made only
upon receipt by the issuer of a letter signed by a purported authorized
representative of Landlord (or its assignee) certifying that the Landlord (or
assignee) is entitled to draw on the Letter of Credit pursuant to this Lease;
and (iv) provide that it is governed by the Uniform Customs and Practice for
Documentary Credits (1993 revisions) or the International Standby Practices (ISP
98). The term "Required Amount" shall mean a sum reasonably determined by
Landlord as of the date the Letter of Credit is delivered hereunder to be equal
to the amount of first twelve (12) months Base Rent plus estimated Additional
Charges for Expenses and Taxes. Tenant shall keep the Letter of Credit, at its
expense, in full force and effect until the sixtieth (60th) day after the
Expiration Date or other termination of this Lease, to insure the faithful
performance by Tenant of all of the covenants, terms and conditions of this
Lease, including, without limitation, Tenant's obligations to repair, replace or
maintain the Premises and Tenant's obligations under the Work Letter. The Letter
of Credit shall provide thirty (30) days' prior written notice to Landlord of
cancellation or material change thereof, and shall further provide that, in the
event of any nonextension of the Letter of Credit at least thirty (30) days
prior to its expiration, the entire face amount shall automatically be paid to
Landlord, and Landlord shall hold the funds so obtained as the security deposit
required under this Lease. If for any reason such automatic payment does not
occur in the event of a nonextension at least thirty (30) days prior to
expiration, Landlord shall be entitled to present its written demand for payment
of the entire face amount of the Letter of Credit, and the funds so obtained
shall be held as provided above. Any unused portion of the funds so obtained by
Landlord shall be returned to Tenant upon replacement of the Letter of Credit or
deposit of cash security in the full Required Amount. If Landlord uses any
portion of the Letter of Credit, or the cash security deposit resulting from a
draw on the Letter of Credit, to cure any default by Tenant hereunder, Tenant
shall provide a replacement Letter of Credit in the Required Amount within ten
(10) days of notice from Landlord, and Tenant's failure to do so shall be a
Default hereunder. If a Default occurs under this Lease or the Work Letter
(including, without limitation, any default by Tenant with respect to its
payment and performance obligations under the Work Letter), or if Tenant is the
subject of an Insolvency Proceeding, Landlord may present its written demand for
payment of the entire face amount of the Letter of Credit (or, at Landlord's
sole election, for payment of a portion of the amount of the Letter of Credit as
is required to compensate Landlord for damages incurred, with subsequent demands
at Landlord's sole election as Landlord incurs further damages) and the funds so
obtained shall become due and payable to Landlord. Landlord may retain such
funds to the extent required to compensate Landlord for damages incurred, or to
reimburse Landlord as provided herein, in connection with any such default, and
any remaining funds shall be held as a cash security deposit. Without limiting
the foregoing, if Tenant fails to perform its Tenant's obligations to complete
or pay for the Tenant Improvements in accordance with the Work Letter, Landlord
may use the Letter of Credit to complete and/or pay for the Tenant Improvements
to the extent of Tenant's obligations under the Work Letter. Landlord shall be
entitled to assign the Letter of Credit and its rights thereto in connection
with an assignment of this Lease to a Mortgagee as security for the obligations
of Landlord to such Mortgagee, or in connection with a sale or other transfer of
Landlord's interest in all or a portion of the Project (provided that, in each
instance, Landlord pays any bank fees associated with any transfer of the Letter
of Credit. Tenant shall cooperate with Landlord in connection with any
modifications of the Letter of Credit that may be reasonably requested in
connection with such assignment.
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(b) ANNUAL REDUCTION OF LETTER OF CREDIT. Tenant shall be entitled
to reduce the Letter of Credit on each of the fourth through tenth anniversaries
of the Commencement Date in the amount of one-seventh (1/7th) of the initial
Required Amount on each such anniversary, and such reduced amount from time to
time shall be the "Required Amount" under this Paragraph 33, so long as (i)
Tenant is not in Default (and no event has occurred which, with the passage of
time or giving of notice or both, would constitute a Default) under this Lease
on such anniversary date, and (ii) Landlord has not delivered a notice of
Tenant's failure to perform any of its obligations hereunder nor assessed a late
charge pursuant to Paragraph 4(d) at any time during the previous six months, or
more than three (3) times during the previous twenty-four (24) months,
regardless in each case of whether such failure was cured by Tenant within any
applicable grace or cure period; provided, however, that any such notice of
failure to perform relating to a non-monetary failure to perform which was
disputed, in good faith, by Tenant and ultimately determined (by agreement of
the parties, arbitration or judicial action) not to be a violation of this Lease
shall not be considered for purposes of determining whether such condition has
been met.
(c) RETURN OF LETTER OF CREDIT. The Letter of Credit shall be
returned to Tenant if, at any time after the fourth anniversary of the
Commencement Date, Tenant (A) can establish to Landlord's reasonable
satisfaction that as of the end of any fiscal year of Tenant following the sixth
anniversary of the Commencement Date, Tenant has (i) had revenues for two
consecutive fiscal years in excess of an annual rate of Five Hundred Million
Dollars ($500,000,000), (ii) unencumbered and unrestricted cash and cash
equivalents in excess of Two Hundred Twenty-Five Million Dollars ($225,000,000),
and (iii) had a quarterly net income for eight consecutive quarters in excess of
Ten Million Five Hundred Thousand Dollars ($10,500,000), all as determined in
accordance with GAAP and as reflected on certified, audited financial
statements; and (b) is not in Default (and no event has occurred which, with the
passage of time or giving of notice or both, would constitute a default) under
this Lease as of the date the Letter of Credit is returned to Tenant.
(d) CONVERSION OF DEPOSIT TO LOAN. Landlord and Tenant acknowledge
and agree that, if Tenant defaults under this Lease and fails to fully cure such
default within the applicable cure period and Landlord elects to pursue its
remedies under California Civil Code Section 1951.2 or under this Lease to
terminate this Lease (any such event, a "Landlord Action"), (i) Landlord will
incur certain damages, costs and expenses, including, without limitation,
marketing costs, commissions, relocation costs, tenant improvement costs, and
carrying costs in connection with releasing the Premises, in addition to the
other damages, costs and expenses Landlord may incur as a result of such default
and/or other defaults under this Lease (all of the foregoing collectively,
"Default Damages"); (ii) Landlord has no assurance of a source of funds to cover
such Default Damages other than the proceeds of the Letter of Credit (or cash
collateral); and (iii) the proceeds of the Letter of Credit (or cash collateral)
should be available to Landlord to apply to Default Damages, even if the amount
thereof exceeds that amount to which Landlord is ultimately determined to be
entitled under this Lease and pursuant to applicable law. Accordingly, at
Landlord's sole election, Landlord shall be entitled to draw the full amount of
the Letter of Credit (or the full amount of cash collateral shall be released to
Landlord) which is then existing (after any previous application of funds by
Landlord and/or replenishment by Tenant pursuant to Paragraph 33(a) above),
simultaneously with commencement of a Landlord Action or at any time thereafter.
All proceeds thereof in excess of amounts applied (pursuant to Paragraph 33(a))
to Default Damages incurred by Landlord prior to commencement of the Landlord
Action shall be deemed a loan from Tenant to Landlord (the "Default Loan"). The
Default Loan shall be unsecured and shall not bear interest, and repayment
thereof shall be limited to the terms and conditions set forth in this
paragraph. Any sums to which Landlord from time to time becomes entitled
hereunder and pursuant to law as a result of Tenant's Default and any previous
Defaults of the Lease, to which the Letter of Credit (or cash collateral) has
not previously been applied pursuant to Paragraph 33(a), shall be offset against
the principal balance of the Loan. The amount of the Default Loan remaining, if
any, after such offset shall be referred to herein as the "Excess Amount". The
Excess Amount shall be payable by Landlord to Tenant from, and only from, first
any proceeds from the Letter of Credit (or cash collateral) which have not been
applied to Default Damages incurred by Landlord after the same are finally
determined (the "Remaining Proceeds"), and then Excess Rent. The Remaining
Proceeds shall be paid by Landlord to Tenant promptly upon final determination
after the entire Premises are leased to a third party or parties "Excess Rent"
shall mean the amount by which (x) rent received by Landlord (from the tenant or
tenants leasing all or any portion of the Premises after Tenant's default) in
any month exceeds (y) the amount of rent that would have been payable under this
Lease for such month if this Lease had not been terminated. Landlord shall pay
Tenant one-half of the Excess Rent until the earlier of (A) the date the Excess
Amount is fully repaid or (B) the date that would have
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been the Expiration Date of this Lease. Any remaining balance of the Default
Loan on such date shall be deemed forgiven. If the Default Loan is insufficient
to cover all Default Damages, Tenant shall pay Landlord any such shortfall
immediately upon demand by Landlord, and Landlord shall have all rights and
remedies available at law or elsewhere in the Lease with respect to such
shortfall.
34. CORPORATE AUTHORITY; FINANCIAL INFORMATION. If Tenant signs as a
corporation each of the persons executing this Lease on behalf of Tenant does
hereby covenant and warrant that Tenant is a duly authorized and existing
corporation, that Tenant has and is qualified to do business in California, that
the corporation has full right and authority to enter into this Lease, and that
each and both of the persons signing on behalf of the corporation were
authorized to do so . If Tenant signs as a partnership or limited liability
company, each of the persons executing this Lease on behalf of Tenant does
hereby covenant and warrant that Tenant is a duly authorized and existing
partnership or limited liability company, as applicable, that Tenant has and is
qualified to do business in California, that Tenant has full right and authority
to enter into this Lease, and that each and both of the persons signing on
behalf of the Tenant were authorized to do so and by their signatures bind the
Tenant. Upon Landlord's request, Tenant shall provide Landlord with evidence
reasonably satisfactory to Landlord confirming the foregoing covenants and
warranties. Upon Landlord's request, Tenant shall provide Landlord with evidence
reasonably satisfactory to Landlord confirming the foregoing covenants and
warranties. Tenant hereby further covenants and warrants to Landlord that all
financial information and other descriptive information regarding Tenant's
business and regarding Guarantor, which has been or shall be furnished to
Landlord, is and shall be accurate and complete at the time of delivery to
Landlord. Tenant will furnish to Landlord at any time and from time to time,
within ten (10) days following Landlord's request therefore, copies of audited,
consolidated financial statements of Guarantor and Tenant, including balance
sheets and statements of income and expenses for the next recent fiscal year,
certified and audited by independent public accounts of recognized standing.
35. PARKING. Tenant shall have the right to use, and Landlord shall
maintain for use by Tenant pursuant to the provisions of Paragraph 8(a), all of
the parking spaces located from time to time on the Project or, at any time when
Tenant is not the only occupant of the Project, Tenant shall have the right to
use all of such spaces in common with the other occupants of the Project,
provided that at all times Tenant will have the use of the number of parking
spaces required by applicable Laws with respect to the Premises (or the
Premises' proportionate share, based on Rentable Area, of the parking spaces
required for the entire Project). Landlord agrees that so long as not required
by an applicable governmental entity, there shall be no charge to Tenant for
parking (not to be confused with the Expenses for parking lot upkeep and other
items properly included in Expenses and charged pursuant to Paragraph 4).
36. MISCELLANEOUS.
(a) The term "Premises" wherever it appears herein includes and
shall be deemed or taken to include (except where such meaning would be clearly
repugnant to the context) the office space demised and improvements now or at
any time hereafter comprising or built in the space hereby demised. The
paragraph headings herein are for convenience of reference and shall in no way
define, increase, limit or describe the scope or intent of any provision of this
Lease. The term "Landlord" shall include Landlord and its successors and
assigns. In any case where this Lease is signed by more than one person, the
obligations hereunder shall be joint and several. The term "Tenant" or any
pronoun used in place thereof shall indicate and include the masculine or
feminine, the singular or plural number, individuals, firms or corporations, and
their and each of their respective successors, executors, administrators, and
permitted assigns, according to the context hereof.
(b) Time is of the essence of this Lease and all of its
provisions. This Lease shall in all respects be governed by the laws of the
State of California. This Lease, together with its exhibits, contains all the
agreements of the parties hereto and supersedes any previous negotiations. There
have been no representations made by the Landlord or Tenant or understandings
made between the parties other than those set forth in this Lease and its
exhibits. This Lease may not be modified except by a written instrument by the
parties hereto.
(c) If for any reason whatsoever any of the provisions hereof
shall be unenforceable or ineffective, all of the other provisions shall be and
remain in full force and effect.
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(d) Upon Tenant paying the Monthly Base Rent and Additional
Charges and performing all of Tenant's obligations under this Lease, Tenant
shall have quiet and peaceful enjoyment of the Premises during the Term as
against all persons or entities lawfully claiming by, through or under Landlord;
subject, however, to the provisions of this Lease.
37. TENANT'S REMEDIES. If any default hereunder by Landlord is not cured
within the applicable cure period provided in Paragraph 20(b) (including any
Mortgagee's additional cure period), Tenant's exclusive remedies shall be (i) an
action for specific performance, or (ii) an action for actual damages. Tenant
shall look solely to Landlord's interest in the Project (including, but not
limited to, net proceeds obtained by Landlord from any sale of any portion of
the Project, net insurance proceeds and condemnation awards) for the recovery of
any judgment from Landlord. Landlord, or if Landlord is a partnership its
partners whether general or limited, or if Landlord is a corporation its
directors, officers or shareholders, or if Landlord is a limited liability
company its members or managers, shall never be personally liable for any such
judgment. Any lien obtained to enforce such judgment and any levy of execution
thereon shall be subject and subordinate to any Mortgage (excluding any Mortgage
which was created as part of an effort to defraud creditors, i.e., a fraudulent
conveyance); provided, however that any such judgement and any such levy of
execution thereon shall not be subject or subordinated to any Mortgage that is
created or recorded in the official records of the county in which the Project
is located after the date of the judgement giving rise to such lien. Landlord's
interest in the Project shall include any insurance proceeds received by
Landlord which are not controlled by any Mortgagee or other lender. Tenant
hereby waives the benefit of any Laws granting it (A) the right to perform
Landlord's obligations, or (B) the right to terminate this Lease or withhold
Rent on account of any Landlord default, including, without limitation, Sections
1932(1), 1941 and 1942 of the California Civil Code.
38. REAL ESTATE BROKERS. Each party represents that it has not had
dealings with any real estate broker, finder or other person with respect to
this Lease in any manner, except for any broker named in the Basic Lease
Information, whose fees or commission, if earned, shall be paid as provided in
the Basic Lease Information. Each party shall hold harmless the other party from
all damages resulting from any claims that may be asserted against the other
party by any other broker, finder or other person with whom the other party has
or purportedly has dealt.
39. LEASE EFFECTIVE DATE. Submission of this instrument for examination
or signature by Tenant does not constitute a reservation of or option for lease,
and it is not effective as a lease or otherwise until execution and delivery by
both Landlord and Tenant.
40. SIGNAGE. Tenant shall be allowed to use a monument sign on the
Orchard Parkway frontage of the Project, and to install exterior signage and
signage in the lobby of the Buildings, subject to this Paragraph 40. Tenant
shall be responsible for the costs related to such signage. Such signage shall
be subject to approval from Landlord of the exact number, size, location and
materials therefor (which consent shall not be unreasonably withheld), approval
from the City of San Xxxx and compliance with applicable governmental
restrictions, including but not limited to, ordinances of the applicable city.
41. HAZARDOUS SUBSTANCE LIABILITY. Tenant has received from Landlord a
copy of the Phase I and II Environmental Assessment prepared by McLaren/Xxxx
Inc., dated January 17, 2000 (the "Environmental Report(s)").
(a) DEFINITION OF HAZARDOUS SUBSTANCES. For the purpose of this
Lease, "Hazardous Substances" shall be defined, collectively, as oil, flammable
explosives, asbestos, radioactive materials, hazardous wastes, toxic or
contaminated substances or similar materials, including, without limitation, any
substances which are "hazardous substances," "hazardous wastes," "hazardous
materials" or "toxic substances" under applicable environmental laws, ordinance
or regulation.
(b) TENANT INDEMNITY. Tenant releases Landlord from any liability
for, waives all claims against Landlord and shall indemnify, defend and hold
harmless Landlord, its employees, partners, agents,
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subsidiaries and affiliate organizations against any and all claims, suits,
loss, costs (including costs of investigation, clean up, monitoring, restoration
and reasonable attorney fees), damage or liability, whether foreseeable or
unforeseeable, by reason of property damage (including diminution in the value
of the property of Landlord), personal injury or death directly arising from or
related to Hazardous Substances released, manufactured, discharged, disposed,
used or stored on, in, or under the Project or Premises during the Term by any
Tenant Parties. The provisions of this Tenant Indemnity regarding Hazardous
Substances shall survive the termination of the Lease.
(c) LANDLORD INDEMNITY. Notwithstanding anything to the contrary
in this Lease, Landlord releases Tenant from any liability for (including as an
Expense hereunder or otherwise), waives all claims against Tenant and shall
indemnify, defend and hold harmless Tenant, its officers, employees, and agents
to the extent of Landlord's interest in the Project, against any and all actions
by any governmental agency for clean up of Hazardous Substances on or under the
Project, including costs of legal proceedings, investigation, clean up,
monitoring, and restoration, including reasonable attorney fees, if, and to the
extent, arising from the presence of Hazardous Substances on, in or under the
Project or Premises, except to the extent caused by the release, disposal, use
or storage of Hazardous Substances in, on or about the Premises by any Tenant
Parties. The provisions of this Landlord Indemnity regarding Hazardous
Substances shall survive the termination of the Lease.
Tenant has informed Landlord, that except for very immaterial amounts of toxic
materials incidental to its office use (e.g.. copier toner), Tenant will not use
any Hazardous Substances in material amounts within the Building and shall
comply with any applicable laws to the extent that it does.
42. OPTION TO RENEW. Upon condition that (i) no Default is continuing
under this Lease at the time of exercise or at the commencement of the option
term, and (ii) Tenant continues to physically occupy the entire Premises, then
Tenant shall have the right to extend the Term for one (1) period of six (6)
years (the "Extension Term") following the initial Expiration Date, by giving
written notice ("Exercise Notice") to Landlord at least twelve (12) months prior
to the Expiration of the Initial Term.
43. RENT DURING EXTENSION TERM. The initial Monthly Base Rent (subject
to Paragraph 4(b)) during the six (6) year Extension Term shall be the greater
of the Base Rent paid during the last month of the immediately preceding Term or
the Fair Market Rental Value for the Premises as of the commencement of the
option term, as determined below:
(a) Within thirty (30) days after receipt of Tenant's Exercise
Notice, Landlord shall notify Tenant of Landlord's estimate of the Fair Market
Rental Value for the Premises, as determined below, for determining Monthly Base
Rent during the ensuing Extension Term; provided, however, if Tenant's Exercise
Notice is given more than twelve (12) months before the Expiration Date,
Landlord's estimate of Fair Market Rental Value may, but need not be given more
than twelve (12) months before the Expiration Date. Within fifteen (15) days
after receipt of such notice from Landlord, Tenant shall notify Landlord in
writing that it (i) agrees with such rental rate or (ii) disagrees with such
rental rate. No response shall constitute agreement. In the event that Tenant
disagrees with Landlord's estimate of Fair Market Rental Value for the Premises,
then the parties shall meet and endeavor to agree within fifteen (15) days after
Landlord receives Tenant's notice described in the immediately preceding
sentence. If the parties cannot agree upon the Fair Market Rental Value within
said fifteen (15) day period, then the parties shall submit the matter to
binding appraisal in accordance with the following procedure except that in any
event neither party shall be obligated to start such procedure sooner than
twelve (12) months before the expiration of the Lease Term. Within fifteen (15)
days of the conclusion of the period during which the two parties fail to agree
(but not sooner than twelve (12) months before the expiration of the Lease
Term), the parties shall either (i) jointly appoint an appraiser for this
purpose or (ii) failing this joint action, each separately designate a
disinterested appraiser. No person shall be appointed or designated an appraiser
unless such person has at least five (5) years experience in appraising major
commercial property in Santa Xxxxx County and is a member of a recognized
society of real estate appraisers. If within thirty (30) days after the
appointment, the two appraisers reach agreement on the Fair Market Rental Value
for the Premises, that value shall be binding and conclusive upon the parties.
If the two appraisers thus appointed cannot reach agreement on the Fair Market
Rental Value for the Premises within thirty (30) days after their appointment,
then the appraisers thus appointed shall appoint a third disinterested appraiser
having like qualifications within five (5) days. If within thirty (30) days
after the appointment of the third appraiser
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a majority of the appraisers agree on the Fair Market Rental Value of the
Premises, that value shall be binding and conclusive upon the parties. If within
thirty (30) days after the appointment of the third appraiser a majority of the
appraisers cannot reach agreement on the Fair Market Rental Value for the
Premises, then the three appraisers shall each simultaneously submit their
independent appraisal to the parties, the appraisal farthest from the median of
the three appraisals shall be disregarded, and the mean average of the remaining
two appraisals shall be deemed to be the Fair Market Rental Value for the
Premises and shall be binding and conclusive upon the parties. Each party shall
pay the fees and expenses of the appraiser appointed by it and shall share
equally the fees and expenses of the third appraiser. If the two appraisers
appointed by the parties cannot agree on the appointment of the third appraiser,
they or either of them shall give notice of such failure to agree to the parties
and if the parties fail to agree upon the selection of such third appraiser
within ten (10) days after the appraisers appointed by the parties give such
notice, then either of the parties, upon notice to the other party, may request
such appointment by the American Arbitration Association or, on it failure,
refusal or inability to act, may apply for such appointment to the presiding
judge of the Superior Court of Santa Xxxxx County, California.
(b) Wherever used throughout this Paragraph (Rent during Extension
Term) the term "Fair Market Rental Value" shall mean the fair market rental
value of the Premises, using as a guide the rate of monthly base rent which
would be charged during the Extension Term in the South Bay area for comparable
high image, Class A office space in comparable condition, of comparable quality,
as of the time that the Extension Term commences, with appropriate adjustments
regarding taxes, insurance and operating expenses as necessary to insure
comparability to this Lease, as the case may be, and also taking into
consideration amount and type of parking, location, the existence of any
leasehold improvements (regardless of who paid for them and with the assumption,
for purposes of determining the Fair Market Rental Value, that they are fully
usable by Tenant), proposed term of lease, amount of space leased, extent of
service provided or to be provided, and any other relevant terms or conditions
(including consideration of whether or not the monthly base rent is fixed).
(c) In the event of a failure, refusal or inability of any
appraiser to act, his successor shall be appointed by the party who originally
appointed him, but in the case of the third appraiser, his successor shall be
appointed in the same manner as provided for appointment of the third appraiser.
(d) The appraisers shall render their appraisals in writing with
counterpart copies to Landlord and Tenant. The appraisers shall have no power to
modify the provisions of this Lease.
(e) To the extent that a binding appraisal has not been completed
prior to the expiration of any preceding period for which Monthly Base Rent has
been determined, Tenant shall pay Monthly Base Rent at the rate estimated by
Landlord, with an adjustment to be made once Fair Market Rental Value is
ultimately determined by binding appraisal. In no event shall any such
adjustment result in a decrease of the Monthly Base Rent for the Premises below
the amount payable by Tenant as of the period immediately preceding the
Extension Term.
(f) From and after the commencement of the Extension Term, all of
the other terms, covenants and conditions of the Lease shall also apply.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
date first above written.
LANDLORD:
000 XXXX XXXXX ASSOCIATES, L.P.,
a California limited partnership
By:__________________________________
Its:_________________________________
TENANT:
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BUSINESS OBJECTS AMERICAS,
a Delaware corporation
By:__________________________________
Its:_________________________________
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EXHIBIT "A"
SITE PLAN
[See attached Site Plan]
41
EXHIBIT "B"
DELIVERY DATE MEMORANDUM
[DATE]
Business Objects Americas
_________________________
_________________________
Attn:____________________
Re: Confirmation of Delivery Date under the Lease Agreement by and
between 000 Xxxx Xxxxx Associates, L.P., and Business Objects
Americas, dated as of July __, 2000 (the "Lease")
Dear Sirs:
This letter will confirm that the "Delivery Date" under the
referenced Lease is _______________.
Please acknowledge your receipt of this letter and confirmation of
the Delivery Date by signing and returning a copy to the undersigned; provided,
however, that your failure to so sign and return this letter is not required in
order for the Delivery Date to occur pursuant to the terms of the Lease.
Very truly yours,
000 Xxxx Xxxxx Associates, L.P.,
a California limited partnership
By:__________________________________
Its:_________________________________
Acknowledged and Agreed:
Business Objects Americas
By:__________________________________
Its:_________________________________
Date:________________________________
42
EXHIBIT "C"
WORK LETTER
1. LANDLORD'S WORK: Landlord shall furnish and install the Base
Building Improvements provided for in Paragraph 2 below at Landlord's expense
("Landlord's Work"). The quantities, character and manner of installation of all
of the foregoing work shall be subject to the limitations imposed by any
applicable regulations, laws, ordinances, codes and rules (collectively, "Legal
Requirements").
2. DEFINITION OF BASE BUILDING IMPROVEMENTS: For each of the Buildings,
Landlord shall furnish a shell building (collectively, "Base Building
Improvements") which shall substantially comply with the plans listed in Exhibit
"C-1" (the "Landlord's Plans").
3. LANDLORD'S PLANS. Landlord has provided Tenant with copies of
Landlord's Plans. Landlord shall have the right to change Landlord's Plans after
submission to Tenant as needed to satisfy any requirements of the City of San
Xxxx or other Legal Requirements. Landlord shall promptly notify Tenant of such
changes. In addition to Landlord's Plans, Landlord has provided Tenant with
copies of plans for certain building core improvements (not including finishes),
including the HVAC system, roof screen, elevators and one staircase, copies of
which are attached hereto as Exhibit "C-2" (the "Modified Core Plans"), which
have been prepared by Arc-tec Inc. pursuant to a contract with Landlord that may
cover other portions of the Project, but at Tenant's cost (which shall be paid
by Landlord directly from the Tenant Allowance as such costs are incurred). The
improvements covered by the Modified Core Plans (collectively, the "Modified
Core Improvements") shall be completed by Landlord's Contractor in the same
manner as the Base Building Improvements, but Tenant shall be responsible for
the cost thereof, which cost shall be paid by Landlord directly to Landlord's
Contractor from the Tenant Allowance as such costs are incurred.
4. TENANT MODIFICATIONS. Any revisions, changes or additions to
Landlord's Plans, the Modified Core Plans, the Base Building Improvements or the
Modified Core Improvements required or requested by Tenant (or necessitated by
applicable Legal Requirements due to Tenant's Plans) shall be subject to the
prior written approval of Landlord, in its sole discretion. Any such changes
approved by Landlord shall be a "Tenant Modification" hereunder. Before any
Tenant Modifications are made, the incremental cost thereof, including
architectural, engineering and special testing and/or inspection charges, any
special permits or fees, and any added construction costs (including, without
limitation, the Landlord's contractor's contracted percentage xxxx-up for
overhead and profit for such Tenant Improvements) without additional xxxx-up
from Landlord, shall be paid by Tenant in the same manner as payment of any
amounts to be paid by Tenant pursuant to Paragraph 13(b). Landlord's contractor
for the Base Building Improvements, or architect for the Modified Core Plans, as
applicable, shall provide to Tenant a cost estimate to complete any Tenant
Modification, together with any anticipated schedule change (which shall
constitute Tenant Delay) and an itemized breakdown of costs and unit prices
within twenty (20) days after receipt of Tenant's request for Tenant
Modifications, and Tenant shall approve or disapprove such estimates within five
(5) days of receipt of same, such disapproval constituting Tenant's withdrawal
of its request for such Tenant Modification. If Tenant fails to inform Landlord
within such 5-day period that Tenant desires to proceed with such Tenant
Modification, Landlord shall not make such Tenant Modifications. All requests
for Tenant Modifications shall be in writing and shall be on such AIA change
order form as required by Landlord and/or Landlord's contractor. At Landlord's
option, any particular Tenant Modification shall be made by change order to
Landlord's construction contract, or included in the Construction Contract for
Tenant's Tenant Improvements.
5. TENANT'S WORK: Tenant shall furnish and install, at Tenant's expense
(subject to Paragraph 13(b) below), all of the interior improvements to complete
the Premises that are not included in the Base Building Improvements or Modified
Core Improvements in accordance with plans and specifications approved by
Landlord pursuant to this Work Letter (all of such improvements, as installed by
Tenant in accordance with the plans and specifications approved by Landlord,
being defined as the "Tenant Improvements"). Additionally, cable TV connections,
telephone equipment and wiring and office equipment and wiring, shall be
installed by Tenant. The cost of space planning and preparing the working
drawings (including the drawings noted below) for Tenant Improvements or any
changes to the original instruction and/or plans and specifications shall be
paid by Tenant.
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6. DESIGN OF TENANT IMPROVEMENTS:
(a) TENANT'S PLANS. Tenant shall diligently pursue the preparation
of all drawings, plans and specifications for Tenant Improvements, in accordance
with this Paragraph 6(a). All such plans, drawings and specifications shall be
performed by architects, engineers and/or consultants mutually acceptable to
Landlord and Tenant, and shall include the following: (i) a space plan for the
Premises; (ii) complete architectural, engineering and other plans for the
Tenant Improvements (except as included in the Modified Core Plans); and (iii) a
list of tenant improvement building standards for interior design, including a
schedule of all finishes. Items (ii) and (iii) above are collectively referred
to herein as "Working Drawings". The space plan and working drawings shall
provide for a high quality software company build-out, with corridors, lobbies,
bathrooms, mechanical and electrical systems, and fire exits that are designed
to accommodate multi-tenant configurations in each Building (including, without
limitation, separate metering for utilities), in a design reasonably acceptable
to Landlord. The space plan and Working Drawings also shall (x) comply with all
applicable Legal Requirements, and (y) comply with Landlord's Plans and the
Modified Core Plans. On or before August 20, 2000, Tenant shall submit its space
plan to Landlord, for Landlord's review and approval, which approval shall not
be unreasonably withheld so long as the tenant improvements contemplated therein
(i) are consistent with the immediately preceding two sentences; (ii)are
generally generic with drop ceilings throughout, (iii) comply with applicable
Laws, Mortgages and Encumbrances; (iv) do not adversely affect the structure of
the Building(s); (v) do not put an undue burden on or otherwise adversely affect
the Building Systems; (vi) are typically found in a high quality software
company build-out. Within five (5) business days after such submission, Landlord
shall either approve or disapprove the space plan. Tenant shall make any changes
necessary in order to correct any item identified by Landlord as grounds for its
disapproval, and shall resubmit the corrected space plan to Landlord as soon as
reasonably possible, but no later than five (5) business days after Landlord's
disapproval. No later than five (5) business days after Landlord receives the
revised space plan, Landlord shall approve or disapprove it. This procedure
shall be repeated until the space plan is finally approved by Landlord and
written approval has been delivered to Tenant. Within thirty (30) days after
Landlord has finally approved Tenant's space plan, Tenant shall submit its
Working Drawings and a pallet of interior colors and finishes to Landlord for
Landlord's review and approval in Landlord's reasonable discretion, provided
that Landlord shall not be obligated to approve any Tenant Improvement which
does not satisfy the requirements set forth above with respect to the space plan
or which, in Landlord's reasonable judgment, would materially and adversely
affect the value of the Premises. Landlord's approval or disapproval of such
Working Drawings and pallet, and Tenant's response thereto, shall follow the
procedure described above with respect to the space plan, except that each time
period shall be changed from five (5) business days to ten (10) business days.
All items finally approved by Landlord pursuant to this Paragraph 6(a) are
referred to herein collectively as "Tenant's Plans". Once approved by Landlord,
no changes, modifications or alterations shall be made to Tenant's Plans without
the prior written approval of Landlord, in Landlord's reasonable discretion.
(b) PERMITS FOR TENANT IMPROVEMENTS. Upon receipt of Landlord's
final approval of the Working Drawings, but in any event on or prior to October
15, 2000, Tenant's Architect shall submit them to the appropriate municipal
authorities for all applicable building permits necessary to allow Tenant's
Contractor (as defined below) to commence and fully complete the construction of
the Tenant Improvements. Tenant shall be responsible for obtaining any building
permit or certificate of occupancy for the Premises; provided that Landlord
shall cooperate with Tenant in executing permit applications and performing
other ministerial acts reasonably necessary to enable Tenant to obtain any such
permit or certificate of occupancy.
7. CONSTRUCTION OF TENANT IMPROVEMENTS. After receipt of Landlord's
approval of Tenant's Plans and receipt of any necessary building permits, Tenant
shall administer and diligently prosecute the construction of Tenant
Improvements in accordance with the Tenant's Plans. Tenant's general contractor
for the Tenant Improvements ("Tenant's Contractor") shall be a reputable,
unionized general contractor, and shall be subject to Landlord's prior approval,
in Landlord's reasonable discretion. The general contractor selected to complete
the Tenant Improvements in accordance with the preceding two sentences shall be
defined herein as "Tenant's Contractor". Tenant shall ensure that Tenant's
Contractor will work harmoniously with Landlord's contractor for the Base
Building Improvements ("Landlord's Contractor") to ensure no interference with
completion of the Base Building Improvements, and any such interference shall
constitute "Tenant Delay" hereunder. All Tenant Improvements shall be
constructed using union labor for all trades. The construction contract for the
Tenant Improvements with Tenant's Contractor (the "Construction Contract") shall
be in form and substance acceptable to Tenant and reasonably approved by
Landlord and shall include, without limitation, requirements (i) that Tenant's
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Contractor carry such insurance as Landlord may reasonable require, and (ii)
that Landlord, at Landlord's sole option, may succeed Tenant and enforce the
Construction Contract in the event of a termination of the Lease. Tenant shall
direct and authorize Tenant's Contractor to keep Landlord fully informed of the
construction process for the Tenant Improvements by inviting Landlord to all
project design and construction meetings and delivering to Landlord the minutes
of all such meetings, and to provide Landlord with access to all documentation
and other information in Tenant's Contractor's possession or control regarding
construction of the Tenant Improvements, provided that Landlord shall not be
obligated to monitor or inspect construction of the Tenant Improvements or any
information in connection therewith. All Tenant Improvements shall be
constructed by Tenant's Contractor, and Tenant shall be responsible for project
management with respect to construction of the Tenant Improvements. Tenant shall
not, at any time prior to or during the Term, directly or indirectly employ, or
permit the employment of, any contractor, mechanic or laborer in the Premises,
whether in connection with the Tenant Improvements, any Alterations made
pursuant to the Lease, or otherwise, if it is reasonably foreseeable that such
employment will materially interfere or cause any material conflict with other
contractors, mechanics or laborers engaged in the construction, maintenance or
operation of the Project by Landlord, Tenant or others. In the event of any such
interference or conflict, Tenant, upon demand of Landlord, shall cause all
contractors, mechanics or laborers causing such interference or conflict to
immediately cease and desist from such interference or conflict. Installation of
all Tenant Improvements shall be coordinated with Landlord's contractor's
schedule for the Base Building Improvements and Modified Core Improvements, and
shall be handled in such a manner as to not interfere with or delay construction
or completion of the Base Building Improvements or Modified Core Improvements.
Subject to delay caused by Force Majeure Events, Tenant shall substantially
complete the Tenant Improvements no later than one hundred eighty (180) days
after the Delivery Date.
8. TENANT'S ACCESS TO BASE BUILDING: Subject to the provisions of
Xxxxxxxxx 0, Xxxxxxxx shall provide Tenant's Contractor with access to both
Buildings for purposes of constructing the Tenant Improvements from and after
the "Initial Tenant Work Date". To be deemed the "Initial Tenant Work Date" the
following construction components of the Base Building Improvements need to be
completed, with respect to each Building, substantially in accordance with
Landlord's Plans: (i) slab and footings in place; (ii) steel fully erected;
(iii) upper floor decks and roof poured; (iv) roof membrane installed; (v)
access to the Buildings provided to Tenant's Contractor along with location for
the construction trailers for Tenant's Contractor; (vi) electrical power lines
will be installed in conduit to each Building's main electrical room (the lines
will be connected by the Tenant to the panel supplied by the Tenant); (vii)
automatic fire sprinkler main riser will be installed; (viii) roof drain lines
will be installed; (ix) water will be provided in water main to building line;
and (x) underground conduit will be provided from the street to each Building's
primary electrical room (provided that Tenant, and not Landlord, will be
responsible to pull the wire or cable as applicable).
9. SITE SUPERVISION AGREEMENT: While proceeding with Landlord's and
Tenant's work, all contractors hired by Landlord and Tenant shall conform with
Landlord's Contractor's schedule and work and shall be handled in such a manner
as to maintain harmonious labor relations and as not to interfere with or delay
the work of the other party's contractors. All Tenant Improvements furnished and
installed by Tenant shall not cause Landlord's Contractor to be dependent upon
Tenant's work in order for Landlord's contractor to complete his work. Tenant's
Contractor, subcontractors and labor shall be subject to approval by Landlord
which approval shall not be unreasonably withheld or delayed and shall be
subject to the reasonable administrative coordination by Landlord's general
contractor and reasonable rules of the site. Contractors and subcontractors
engaged by Landlord and Tenant shall employ men and means to insure, so far as
may be possible, the progress of the work without interruption on account of
strikes, work stoppage or similar causes for delay. Landlord shall give access
and entry to the Premises to Tenant as and when provided in this Work Letter;
provided, however, that if such entry is prior to the first day of the Term,
such entry shall be subject to all of the terms and conditions of the Lease
except payment of Base Rent and Additional Charges. Landlord and Tenant shall
jointly prepare a punch list for the Base Building Improvements, Modified Core
Improvements and Tenant Improvements. Landlord and Tenant shall engage reputable
contractors who will complete the work in a good and workmanlike manner and in
accordance with relevant laws and codes. Both Landlord and Tenant shall have the
full benefit of all contractor warranties in connection with the Base Building
Improvements, Modified Core Improvements and Tenant Improvements.
10. LANDLORD'S RIGHT TO INSPECT AND STOP WORK: Landlord and its agents
may inspect the Tenant Improvements in the course of construction and on
completion of the Tenant Improvements, provided, however, that Landlord's
failure to inspect the Tenant Improvements shall in no event constitute a waiver
of any of Landlord's
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rights hereunder nor shall Landlord's inspection of the Tenant Improvements
constitute Landlord's approval of the same. Landlord shall have the right to
object to any material deviation from Tenant's Plans not approved by Landlord in
accordance with this Work Letter. Tenant shall cause such deviation to be
corrected. If the deviation is material in the Landlord's reasonable judgment
and may have an adverse affect on the Base Building Improvements or Modified
Core Improvements, and if the deviation is not promptly corrected by Tenant,
Landlord may cause such deviation to be remedied, at Tenant's expense.
11. COMPLIANCE WITH LAWS. All of the Base Building Improvements,
Modified Core Improvements and Tenant Improvements shall be installed in
compliance with all applicable Laws, including, without limitation, the
Americans with Disabilities Act, and all Legal Requirements. All costs of such
compliance shall be paid in the same manner as the improvements (i.e. Landlord
shall pay all costs related to compliance by the Base Building Improvements, and
Tenant shall pay (subject to Paragraph 13(b) and except to the extent caused by
the non-compliance of the Base Building Improvements) all costs related to
compliance by the Tenant Improvements and Modified Core Improvements. Landlord's
review and approval of Tenant's Plans shall not imply Landlord's review of the
quality, design, code compliance, compliance with Legal Requirements or Laws, or
similar matters with respect to the Tenant Improvements; accordingly,
notwithstanding that Tenant's Plans are reviewed by Landlord or its agents and
notwithstanding any advice or assistance that may be rendered to Tenant by
Landlord or Landlord's agents, Landlord shall have no liability whatsoever in
connection therewith and shall not be responsible for any omissions or errors
contained in Tenant's Plans, except to the extent caused by material omissions
or errors contained in Landlord's plans for the Base Building Improvements or
Modified Core Improvements.
12. SUBSTANTIAL COMPLETION: For purposes of this Work Letter and the
Lease, (i) the Base Building Improvements shall be deemed "substantially
complete" at such time as Landlord has completed work in accordance with
Landlord's Plans, as certified by Landlord's contractor (which certification
shall be obtained promptly by Landlord upon such substantial completion),
subject to completion and correction of items on Landlord's architect's punch
list, and certain other items which will not be completed until substantial
completion of the Tenant Improvements (such as certain landscaping), and (ii)
the Tenant Improvements shall be deemed "substantially complete" at such time as
Tenant has completed work in accordance with the Tenant's Plans, as certified by
Tenant's architect (which certification shall be obtained promptly by Tenant
upon such substantial completion), and Tenant has obtained a certificate of
occupancy from the City of San Xxxx, subject only to the completion or
correction of items on Tenant's architect's punch list (and exclusive of the
installation of all telephone and other communications facilities and equipment
and other finish work or decorating work to be performed by or for Tenant). If
substantial completion of the Tenant Improvements, Modified Core Improvements or
Base Building Improvements is delayed due to any of the following (collectively,
"Tenant Delays"), then the Delivery Date and/or Commencement Date, as
applicable, shall be adjusted to reflect what the substantial completion date
would have been if there had been no delay: (i) Tenant's failure to timely
submit any items required by this Work Letter, including, without limitation,
Tenant's Plans; (ii) Tenant Modifications; (iii) Tenant's failure to comply with
Landlord's contractor's schedule; (iv) Tenant's or Tenant's Contractor's failure
to comply with Paragraph 9, (v) Tenant's requested changes to the Tenant's Plans
after they are approved by Landlord; (vi) Tenant's request for materials,
finishes or installations which require longer than thirty (30) days to
complete; (vii) delays caused by Tenant in construction of the Tenant
Improvements; or (viii) any other event expressly constituting "Tenant Delay"
pursuant to any provision of this Work Letter. Landlord shall give Tenant at
least five (5) days prior notice if Landlord becomes aware that Tenant is in
danger of causing a Tenant Delay, and if Tenant takes appropriate measures to
prevent such delay within such five (5) day period, no adjustment to the
Delivery Date or Commencement Date shall be made on account of such Tenant
Delay; provided, however, that if such delay was not reasonably foreseeable by
Landlord, the five (5) day period for prior notice and opportunity to mitigate
provided above shall be changed to forty-eight (48) hours after Landlord becomes
aware of such delay or potential delay; and provided further, that no such
notice shall be required if Tenant Delay results from Tenant's failure to
perform any obligation within a specific date or time period (including, without
limitation, any delay in delivery of Tenant's space plan or Working Drawings or
non-compliance with Landlord's contractor's schedule), or from schedule changes
resulting from Tenant Modifications of which Tenant is advised by Landlord's
architect or contractor as provided in Paragraph 4. If substantial completion of
the Tenant Improvements is delayed as a result of any of the following and such
delay could not have been mitigated by Tenant using commercially reasonable
measures (collectively, "Landlord Delays"), then the Commencement Date shall be
adjusted to reflect any delay in the substantial completion date for the Tenant
Improvements directly resulting from such Landlord Delays: (a) subject to
Paragraph 9 above, unreasonable interference by Landlord or Landlord's
Contractor with the construction of the
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Tenant Improvements, which interference occurs after the Delivery Date and
before the Commencement Date in connection with completion of the Base Building
Improvements or Modified Core Improvements; (b) Landlord's failure to comply
with any deadlines for response to, or submissions from, Tenant as required by
this Work Letter; or (c) any material changes to Landlord's Plans or the
Modified Core Plans after their final approval by applicable governmental
entities (other than Tenant Modifications or changes required by third parties)
that directly affect Tenant's Plans or the Tenant Improvements.
13. TENANT IMPROVEMENT COSTS.
(a) TENANT RESPONSIBILITY FOR COSTS. Tenant shall bear the cost of
Tenant Improvements and Modified Core Improvements, subject to the terms of
clause (b) below, including, without limitation, costs in connection with space
planning, preparing Tenant's Plans, preparing the Modified Core Plans,
engineering, plan checking, special inspections and testing, any consultants,
and related permits and fees for Tenant Improvements. Other than providing the
Tenant Allowance in accordance with clause (b) below, Landlord shall not be
obligated to pay any portion of the cost of the Tenant Improvements. Tenant
shall be obligated to keep the Project free of all liens and claims relating to
the design and construction of the Tenant Improvements to the extent such liens
and claims do not arise from Landlord's failure to fund the Tenant Allowance as
required herein.
(b) TENANT ALLOWANCE. Landlord shall provide Tenant an allowance
("Tenant Allowance") as set forth in the Basic Lease Information to be applied
toward the cost of the following items in respect of the Tenant Improvements
(after deducting therefrom the costs for design and construction of the Modified
Core Improvements, which shall be paid by Landlord as provided in Paragraph 3):
Architectural and engineering fees, space planning, building permits or other
governmental fees, and the cost of labor, materials, contractors fees and
overhead, and other charges included in the construction contract for
construction of Tenant Improvements. Promptly after Landlord's approval of
Tenant's Plans and Tenant's Contractor's execution of the Construction Contract,
Tenant shall provide Landlord with a detailed breakdown of the final costs to be
incurred or which have been incurred in connection with the design and
construction of the Tenant Improvements, including all amounts payable under the
Construction Contract (the "Final Costs"), which Final Costs shall equal or
exceed the sum of Twenty-Three Dollars ($23) per rentable square foot of the
Rentable Area of the Premises plus the undisbursed portion of the Tenant
Allowance. On or before the first day of each calendar month, Tenant shall be
allowed to request monthly draws against the Tenant Allowance for the "Allowance
Share" (as defined below) of the costs related to the construction of the Tenant
Improvements, which draw requests shall include the following items: (a) a copy
of the construction contract for the Tenant Improvements and any relevant
subcontracts (each contract and subcontract need be submitted only once); (b) a
request for payment of Tenant's Contractor, approved by Tenant, in a form
reasonably acceptable to Landlord, showing the schedule, by trade, or percentage
of completion of the Tenant Improvements in the Premises, and detailing the
portion of the work completed, and the portion not completed, together with
receipts and related evidence reasonably acceptable to Landlord establishing
that Tenant has paid all amounts covered by such request for payment other than
the Allowance Share; (c) invoices and paid receipts from Tenant's Contractor and
all subcontractors, laborers, materialmen and suppliers used by Tenant
(collectively, "Tenant's Agents") for labor rendered and materials delivered to
the Premises that are not covered by the request for payment from Tenant's
Contractor; (d) executed unconditional mechanic's lien releases from all of
Tenant's Agents, in the statutory form, with respect to all sums paid to date
(excluding sums requested in the current monthly draw, but including sums from
all prior draws); (e) executed conditional mechanic's lien releases from all of
Tenant's Agents, in the statutory form, with respect to all sums requested in
the current monthly draw; and (e) all other information reasonably requested by
Landlord. The "Allowance Share" shall be the prorata share of each payment
toward the costs of Tenant Improvements that is payable from the Tenant
Allowance, which shall be calculated as a fraction, the numerator of which shall
be the undisbursed portion of the Tenant Allowance after deduction for costs of
the Modified Core Improvements as provided in Paragraph 3, and the denominator
of which shall be the Final Costs. Tenant's request for payment shall be deemed
Tenant's acceptance and approval of the work furnished and/or the materials
supplied as set forth in Tenant's payment request. Thereafter, Landlord shall
deliver a check payable to Tenant, or at Landlord's option to Tenant's
Contractor, in payment of the lesser of (A) the amounts so requested by Tenant,
less the Allowance Share of a ten percent (10%) retention (the aggregate amount
of such retentions to be known as the "Final Retention"), and (B) the balance of
any remaining available portion of the Tenant Allowance (not including the Final
Retention), provided that Landlord does not dispute any request for payment
based on non-compliance of any work with the Tenant's Plans approved by
Landlord, or due to any substandard work, or for any other reason in Landlord's
reasonable discretion. Landlord's payment of such amounts shall not be deemed
7
47
Landlord's approval or acceptance of the work furnished or materials supplied as
set forth in Tenant's payment request. Subject to the provisions of this Work
Letter, a check for the Allowance Share of the Final Retention payable to Tenant
shall be delivered by Landlord to Tenant following the completion of
construction of the Tenant Improvements, provided that (i) Tenant delivers to
Landlord properly executed final unconditional mechanics lien releases, in the
statutory form (ie. the final amount due to Tenant's Contractor), (ii) Landlord
has determined, in the reasonable exercise of its discretion, that no
substandard work exists which adversely affects the structure, exterior
appearance, or Building Systems, (iii) Tenant's architect and/or contractor
delivers to Landlord a certificate, in a form reasonably acceptable to Landlord,
certifying that the construction of the Tenant Improvements has been
substantially completed and meets all applicable building codes; and (iv) Tenant
has delivered to Landlord a final punch list signed off by both Tenant and
Landlord and/or their architects. Tenant shall cooperate with the disbursement
schedule of Landlord's construction lender and Landlord shall use reasonable
efforts to insure that such amounts are paid promptly. Any amounts payable by
Tenant to Landlord under this Work Letter which are in excess of the Tenant
Allowance shall be paid by Tenant to Landlord within twenty (20) days of receipt
of an invoice from Landlord.
14. TENANT'S DELIVERIES: Within sixty (60) days following substantial
completion of the Tenant Improvements, Tenant shall provide to Landlord the
following: (x) "as-built" drawings signed by either Tenant's architect or
Tenant's Contractor; (y) final punch list signed off by both Tenant and Landlord
and /or their architects; and (z) written certification from Tenant's architect
and/or Tenant's Contractor that the work is complete and meets all applicable
building codes, and a copy of the certificate of occupancy.
15. DEFAULT BY TENANT: Notwithstanding any provision to the contrary
contained in the Lease, if a Default occurs prior to completion of the Tenant
Improvements, then (i) in addition to all other rights and remedies granted to
Landlord pursuant to the Lease, Landlord shall have the right to withhold
payment of all or any portion of the Tenant Allowance, and (ii) all other
obligations of Landlord under the terms of this Work Letter shall be forborne
until such time as such Default is cured pursuant to the terms of the Lease. Any
delay in construction resulting from Landlord's exercise of its rights under
this Paragraph 15 shall constitute "Tenant Delay".
16. DISPUTE RESOLUTION. If Landlord and Tenant disagree concerning any
issues used to determine the Delivery Date or the Commencement Date, and the
parties are unable to resolve that dispute within thirty (30) days after Tenant
occupies the Premises, the dispute shall be submitted for resolution pursuant to
this Paragraph 16. Notwithstanding the foregoing, during the pendency period of
any arbitration initiated pursuant to this Paragraph 16, Tenant shall pay
Monthly Base Rent and Additional Charges from and after the Commencement Date as
determined by Landlord; provided, however, that such payment shall be without
prejudice to the ultimate determination of that issue.
ANY CONTROVERSY OR CLAIM ARISING OUT OF THE MATTERS EXPRESSLY MADE SUBJECT
TO ARBITRATION PURSUANT TO THIS WORK LETTER SHALL BE SETTLED BY
ARBITRATION CONDUCTED IN SAN MATEO OR SANTA XXXXX COUNTY, CALIFORNIA, IN
ACCORDANCE WITH THE COMMERCIAL RULES OF THE AMERICAN ARBITRATION
ASSOCIATION, AND JUDGMENT ON THE AWARD RENDERED BY THE ARBITRATOR(S) MAY
BE ENTERED IN ANY COURT HAVING JURISDICTION. THE PREVAILING PARTY IN SUCH
ARBITRATION SHALL BE ENTITLED TO ATTORNEYS' FEES AND COSTS.
NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY
DISPUTE ARISING OUT OF THIS WORK LETTER DECIDED BY NEUTRAL ARBITRATION AS
PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT
POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY
INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO
DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE
"ARBITRATION OF DISPUTES" PROVISION. IF YOU REFUSE TO SUBMIT TO
ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO
ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE.
YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.
8
48
WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES
ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES"
PROVISION TO NEUTRAL ARBITRATION.
Consent to neutral arbitration by: ______ Landlord ________ Tenant
17. DEFINED TERMS. All capitalized terms not defined in this Work Letter
shall have the meanings given them in the Lease.
9
49
EXHIBIT "C-1"
LANDLORD'S PLANS
[SEE ATTACHED LIST]
10
50
EXHIBIT "C-2"
MODIFIED CORE IMPROVEMENTS
[SEE ATTACHED DRAWINGS]
11
51
EXHIBIT "D"
FORM OF TENANT ESTOPPEL CERTIFICATE
[SEE ATTACHED FORMS FOR PRE-OCCUPANCY AND POST-OCCUPANCY]
12
52
TENANT ESTOPPEL
(Pre-Occupancy)
"TENANT": _____________________________________________________________
_____________________________________________________________
_____________________________________________________________
"LANDLORD": _____________________________________________________________
_____________________________________________________________
_____________________________________________________________
"LENDER": COMERICA BANK-CALIFORNIA
Attn: Commercial Real Estate Loan Operations
00 Xxxx Xxxxxxx Xxxx, Mail Code 4770
Xxx Xxxx, XX 00000
"PREMISES": _____________________________________________________________
_____________________________________________________________
_____________________________________________________________
"LEASE": That certain Lease for space in the Premises between Landlord
and Tenant dated _______________, _________.
It is our understanding that Comerica Bank-California, a California
Banking Corporation ("Lender"), is contemplating [making] [modifying the terms
of] a loan to Landlord, which loan is [to be] secured by [the Premises] [by real
property of which the Premises forms a part]. For the benefit of the Lender,
Tenant hereby certifies as follows:
1. A true and complete copy of the Lease is attached hereto and said
Lease is the entire agreement between Landlord and Tenant with respect to the
Premises.
2. The Lease is presently in full force and effect, with no uncured
defaults by Tenant and with no acts or omissions having occurred which, but for
the passing of time or giving of notice, would be a default under the Lease by
Tenant. Tenant expressly agrees that all payments to be made shall be made
strictly in accordance with the terms of the Lease as written, and that there is
no charge, lien or claim of offset against future rents or other sums to become
due under the Lease.
3. The term of the Lease commenced or is scheduled to commence as
follows:________________________________________________________________________
4. Tenant is required to pay minimum monthly rental installments of
$_______, which are scheduled to commence as follows:__________________________.
5. Tenant's share of operating costs is computed as follows:___________
_____________________________________________. Payment of operating expenses
will commence on _______________, _____.
6. There are no existing defenses which Tenant has against the
enforcement or validity of said Lease or any of the terms thereof or any claim
against Landlord which might be set off or credited against future accruing
rents.
7. A security deposit in the amount of $_______ is being held by
Landlord.
13
53
8. The Premises will be improved with the following improvements,
__________________________________________________________ (the "Improvements").
9. The following plans, specifications and drawings have been prepared
and approved by Landlord and Tenant for the Improvements _______________________
_______________________________________________________________________________.
10. The Improvements will be constructed by _______________________ (the
"Contractor"), pursuant to the following contract:______________________________
_______________________________________________________________________________.
11. All obligations and conditions under said Lease to be performed by
Landlord as of the date hereof have been satisfied. The following conditions to
commencement of the Lease terms and/or payment of minimum monthly rent and other
sums payable by Tenant under the Lease remain to be satisfied by the parties
designated below:_______________________________________________________________
_______________________________________________________________________________.
12. Tenant has received no written notice of prior sale, transfer
assignment or pledge of the Lease or of the rents payable thereunder.
13. There are no actions, whether voluntary or otherwise, pending
against Tenant under the bankruptcy laws of the United States or any state
thereof.
14. Tenant is executing this document with the express knowledge that
Lender is relying upon the representations made herein in making a loan to
Landlord.
Dated:_____________, 2000 TENANT:
______________________________________
a ____________________________________
By:___________________________________
Its:__________________________________
By:___________________________________
Its:__________________________________
14
54
TENANT ESTOPPEL
(Post-Occupancy)
"TENANT": _____________________________________________________________
_____________________________________________________________
_____________________________________________________________
"LANDLORD": _____________________________________________________________
_____________________________________________________________
_____________________________________________________________
"LENDER": COMERICA BANK-CALIFORNIA
Attn: Commercial Real Estate Loan Operations
00 Xxxx Xxxxxxx Xxxx, Mail Code 4770
Xxx Xxxx, XX 00000
"PREMISES": _____________________________________________________________
_____________________________________________________________
_____________________________________________________________
"LEASE": That certain Lease for space in the Premises between Landlord
and Tenant dated _______________, _________.
It is our understanding that Comerica Bank-California, a California
Banking Corporation ("Lender"), is contemplating making a loan to Landlord,
which loan is secured by real property of which the Premises forms a part. For
the benefit of the Lender, Tenant hereby certifies as follows:
1. A true and complete copy of the Lease is attached hereto and said
Lease is the entire agreement between Landlord and Tenant with respect to the
Premises.
2. The Lease is presently in full force and effect, with no uncured
defaults by Tenant and with no acts or omissions having occurred which, but for
the passing of time or giving of notice, would be a default under the Lease by
Tenant. Tenant expressly agrees that all payments to be made shall be made
strictly in accordance with the terms of the Lease as written, and that there is
no charge, lien or claim of offset against future rents or other sums to become
due under the Lease.
3. The term of the Lease commenced on _________________, ________.
4. Tenant is in full and complete possession of the Premises, such
possession having been accepted by Tenant. Tenant is paying minimum monthly
rental in installments of $_______ which commenced to accrue on ________, _____,
and which have been paid through ____________, ______. No rents have been
prepaid in excess of one (1) month. There are no existing defenses which Tenant
has against the enforcement or validity of said Lease or any of the terms
thereof or any claim against Landlord which might be set off or credited against
future accruing rents.
5. A security deposit in the amount of $________ is being held by
Landlord.
6. The Premises comprise approximately ______ square feet known as
_____ and Tenant's share of any operating costs is ____ percent (___%).
7. All obligations and conditions under said Lease to be performed by
Landlord as of the date hereof have been satisfied, and all construction
obligations of Landlord have been completed and are satisfactory to Tenant.
55
8. Tenant has received no written notice of prior sale, transfer
assignment or pledge of the Lease or of the rents payable thereunder.
13. There are no actions, whether voluntary or otherwise, pending
against Tenant under the bankruptcy laws of the United States or any state
thereof.
14. Tenant is executing this document with the express knowledge that
Lender is relying upon the representations made herein in making a loan to
Landlord.
Dated:_____________, 2000 TENANT:
______________________________________
a ____________________________________
By:___________________________________
Its:__________________________________
By:___________________________________
Its:__________________________________
56
EXHIBIT "E"
SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
COMERICA BANK-CALIFORNIA
Commercial Real Estate Loan Operations
Attn: Xxxxxx Xxxxx
00 X. Xxxxxxx Xxxx, Mail Code 4771
Xxx Xxxx, XX 00000
--------------------------------------------------------------------------------
SPACE ABOVE THIS LINE FOR RECORDER'S USE
SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE
AGREEMENT
NOTICE: THIS SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE AGREEMENT RESULTS IN
YOUR LEASEHOLD INTEREST BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN
OF SOME OTHER OR LATER SECURITY INSTRUMENT.
THIS SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE AGREEMENT
("Agreement"), dated as of___________________, 2000, between COMERICA
BANK-CALIFORNIA, a California Banking Corporation ("Beneficiary"),
______________________, a California __________________ ("Owner") and
________________________, a ________________________ ("Tenant"), is as follows:
Owner and Tenant have entered into that certain Lease dated
___________________, 2000 together with any amendments, modifications, renewals
or extensions thereof ("Lease") pursuant to which Owner leased to Tenant and
Tenant leased from Owner the premises more particularly described in the Lease
("Premises") and located on the real property described in Exhibit "A" attached
hereto (the "Secured Property"). Owner has obtained financing for the Secured
Property and has executed a promissory note in the principal amount of
_________________________ Dollars ($__________________) ("Note") in favor of
Beneficiary, payment of which is secured by a Construction Deed of Trust,
Security Agreement and Fixture Filing ("Deed of Trust") said Deed of Trust was
recorded on ___________________, as Instrument No. ________________, of Official
Records of the County of_______________, State of California encumbering the
Secured Property and an Assignment of Real Property Leases and Rents.
In order to establish certain safeguards and priorities with respect to
their respective rights in connection with the Premises, Beneficiary has
requested that Owner obtain certain warranties and agreements from Tenant
as-hereinafter set forth. In consideration of the mutual benefits accruing to
the parties hereto, the receipt of which is hereby acknowledged, the parties
agree as follows:
1. Subordination. Subject to Paragraph 4 hereof, the Lease is and at
all times shall continue to be subject and subordinate to the Note and the lien
of the Deed of Trust and to all advances made or to be made thereunder, and to
any renewals, extensions, modifications or replacements thereof, unless
Beneficiary has filed a notice subordinating the lien of its Deed of Trust to
the Lease. Beneficiary specifically reserves the right to file such a notice at
its sole election. Tenant shall not subordinate the Lease to any lien, claim,
mortgage, deed of trust, or other encumbrance of any kind, except as provided in
this paragraph, and any such other subordination shall be deemed a default under
the Lease and this Agreement. Tenant agrees to execute and deliver to
Beneficiary or to any party to whom Tenant hereby agrees to attorn, in form and
substance satisfactory to such party, such other instrument as either shall
request in order to effectuate the provisions of this Agreement.
57
2. Limitation on Liability. Nothing herein contained shall impose any
obligation upon Beneficiary to perform any of the obligations of Owner under the
Lease unless and until Beneficiary shall become an owner or mortgagee in
possession of the Premises, and Beneficiary shall have no personal liability to
Tenant beyond Beneficiary's interest in the Secured Property.
3. Attornment. In the event of a foreclosure or other acquisition of
the Premises, the Lease shall be recognized as a direct lease from the
Beneficiary, the purchaser at the foreclosure sale, or any such subsequent owner
(collectively referred to as "Purchaser"), except Purchaser shall not be (i)
liable for any previous act or omission of Owner under the Lease (excluding any
ongoing maintenance, repair and replacement obligations of Landlord under the
Lease continuing after the foreclosure sale or other acquisition of the Premises
by a Purchaser, to the extent accruing after such sale or acquisition); (ii)
subject to any offset which shall theretofore have accrued to Tenant against
Owner; (iii) subject to any obligation with respect to any security deposit
under the Lease unless such security deposit has been physically delivered to
Purchaser; (iv) bound by or liable for any representations or warranties of
Owner (whether or not set forth in the Lease); (v) liable for any condition in,
on or about the Premises (or the land or improvements containing the Premises)
existing prior to the Purchaser's foreclosure or other acquisition of the
Premises (a "Preexisting Condition") or liable under any indemnity, defense or
hold harmless obligation or similar obligation set forth in the Lease to the
extent it relates to or covers a Pre-Existing Condition Lease (excluding any
ongoing maintenance, repair and replacement obligations of Landlord under the
Lease continuing after the foreclosure sale or other acquisition of the Premises
by a Purchaser, to the extent accruing after such sale or acquisition); or (vi)
bound by any previous modification or prepayment of rents or other sums due
under the Lease greater than one month unless such modification or prepayment
shall have been expressly approved in writing by Beneficiary, which approval
shall not be unreasonably withheld.
4. Non-disturbance. So long as no default exists, nor any event has
continued to exist for such period of time (after notice, if any, required by
the Lease) as would entitle Owner under the Lease to terminate the Lease or
would cause, without any further action of Owner, the termination of the Lease
or would entitle Owner to dispossess Tenant thereunder, the Lease shall not be
terminated nor shall Tenant's use, possession, or enjoyment of the Premises be
interfered with, nor shall the leasehold estate granted by the Lease be affected
in any foreclosure, or in any action or proceeding instituted under or in
connection with the Deed of Trust.
5. Payment of Rent on Default. Tenant acknowledges and agrees that the
Lease has been assigned to Beneficiary by Owner as security for its obligations
under, and secured by, the Note and Deed of Trust. Tenant agrees that, upon
receipt of notice from Beneficiary that a default exists under the Note or Deed
of Trust, or any instrument or document collateral thereto, Tenant shall make
all rental and other payments required pursuant to the Lease, as directed by
written instruction from Beneficiary. Tenant may make payments to Beneficiary
directly in the event of such a default, for which written notice has been
delivered to Tenant, and thereby be properly credited with an offset and credit
for such payments as against the rental payments then due under the Lease.
Owner acknowledges and agrees that Beneficiary shall be entitled to
collect and receive rents pursuant to the Lease as provided herein and Tenant is
authorized and hereby directed to make all such payments of rent to Beneficiary
upon receipt of the notice of default provided that Tenant shall be under no
duty or obligation to make further inquiry. Tenant shall continue to make all
such payments of rent to Beneficiary unless and until Tenant is otherwise
authorized and directed in writing by Beneficiary.
Tenant agrees that so long as Beneficiary has an assignment of Owner's
interest in the Lease, Tenant will not, without the prior written consent of
Beneficiary (a) modify, extend or in any manner alter the terms of the Lease;
(b) pay the rent or any other sums becoming due under the terms of the Lease
more than one month in advance; or (c) accept Owner's waiver of or release from
the performance of any material obligations under the Lease.
Tenant agrees that it will furnish to Beneficiary copies of all notices of
default sent to Owner under the Lease. Said notices shall be sent registered or
certified mail to Beneficiary at the address shown above or such other address
as Beneficiary designates to Tenant in writing. Tenant agrees that upon the
receipt by Beneficiary of written notice that Owner is in default under the
terms of the Lease, Beneficiary shall have the option within a reasonable time,
but not less than sixty (60) days, to cure any default on the part of Owner, and
Tenant agrees to accept the performance of Beneficiary in lieu of the
performance of Owner.
58
6. Further Documents. Tenant shall execute and deliver to Beneficiary
or to any party to whom Tenant hereby agrees to attorn, in form and substance
satisfactory to such party, such other instruments as either shall request in
order to effectuate the provisions of this Agreement.
7. Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the parties hereto, their successors and assigns, and the
holder from time to time of the Note.
8. Attorneys' Fees. If any legal action, arbitration or other
proceeding is commenced to enforce any provision of this Agreement, the
prevailing party shall be entitled to an award of its actual expenses, including
without limitation, expert witness fees, actual attorneys' fees and
disbursements.
9. Notices. All notices to Beneficiary shall be by certified mail to
the address given at the top of page one of this Agreement. All notices to
Tenant shall be by certified mail to the Premises.
10. Miscellaneous. This Agreement may not be modified other than by an
agreement in writing, signed by the parties hereto or by their respective
successors in interest. Except as herein modified all of the terms and
provisions of the Lease shall remain in full force and effect. In the event of a
conflict between the Lease and this Agreement, the terms and provisions of this
Agreement shall control. Nothing in this Agreement shall in any way impair or
affect the lien created by the Deed of Trust or the other lien rights of
Beneficiary.
11. Counterparts. This Agreement may be executed in counterparts which
together shall constitute but one and the same original.
BENEFICIARY:
COMERICA BANK-CALIFORNIA,
a California Banking Corporation
By:__________________________________
Its:_________________________________
OWNER:
______________________, a ___________
By:____________________________
Its:___________________________
TENANT:
______________________, a ___________
By:____________________________
Its:___________________________
59
STATE OF CALIFORNIA )
) Ss.
COUNTY OF _____________ )
On ___________________, 2000, before me, the undersigned, a Notary Public
in and for said State, personally appeared ____________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
______________________________________
NOTARY PUBLIC
STATE OF CALIFORNIA )
) Ss.
COUNTY OF _____________ )
On ___________________, 2000, before me, the undersigned, a Notary Public
in and for said State, personally appeared ____________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
______________________________________
NOTARY PUBLIC
STATE OF CALIFORNIA )
) Ss.
COUNTY OF _____________ )
On ___________________, 2000, before me, the undersigned, a Notary Public
in and for said State, personally appeared ____________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
______________________________________
NOTARY PUBLIC
60
EXHIBIT A
(Legal Description of Secured Property)
The land referred to in this policy is described as real property in the City of
____________, County of ____________, State of California. described as follows:
61
EXHIBIT "F"
RULES AND REGULATIONS
1. Sidewalks, halls, passages, exits, entrances, elevators, escalators
and stairways shall not be obstructed by Tenant or used by Tenant for any
purpose other than for ingress to and egress from the Premises. Tenant, and
Tenant's employees or invitees, shall not go upon the roof of the Buildings,
except as authorized by Landlord or as expressly set forth in the Lease.
2. Except as expressly permitted in the Lease, no sign, placard,
picture, name, advertisement or notice visible from the exterior of the Premises
shall be inscribed, painted, affixed, installed or otherwise displayed by Tenant
on any part of the Buildings without the prior written consent of Landlord, and
Landlord shall have the right to remove any such sign, placard, picture, name,
advertisement or notice without notice to and at the expense of Tenant.
If Landlord shall have given consent relating to a sign to Tenant at
any time, whether before or after the execution of the Lease, such consent shall
not in any way operate as a waiver or release of any of the provisions hereof or
of the Lease, and shall be deemed to relate only to the particular sign,
placard, picture, name, advertisement or notice so consented to by Landlord and
shall not be construed as dispensing with the necessity of obtaining the
specific written consent of Landlord with respect to any other such sign,
placard, picture, name, advertisement or notice. All approved signs or lettering
on doors and walls shall be printed, painted, affixed or inscribed at the
expense of Tenant.
3. No curtains, draperies, blinds, shutters, shades, screens or other
coverings, awnings, hangings or decorations shall be attached to, hung or placed
in, or used in connection with, any window, door or patio on the Premises
without the prior written consent of Landlord, which consent shall not be
unreasonably withheld. In any event with the prior written consent of Landlord,
all such items shall be installed inboard of Landlord's window coverings and
shall not in any way be visible from the exterior of the Buildings. No articles
shall be placed or kept on the window xxxxx so as to be visible from the
exterior of the Buildings. No articles shall be placed against glass partitions
or doors which might appear unsightly from outside the Buildings.
4. Tenant shall see that the doors of the Premises are closed and
securely locked and must observe strict care and caution that all water faucets
or water apparatus are entirely shut off before Tenant or its employees leave
such Premises, and that all utilities shall likewise be carefully shut off, so
as to prevent waste or damage, and for any default or carelessness the Tenant
shall make good all injuries sustained by other tenants or occupants of the
Buildings or Landlord.
5. Tenant shall have the right to install its own security system for
the Premises so long as Tenant shall furnish Landlord with a key or other access
device for any such lock.
6. If Tenant shall alter any lock or access device or install a new or
additional lock or access device, Tenant shall in each case furnish Landlord
with a key for any such lock. Tenant, upon the termination of the tenancy, shall
deliver to Landlord all the keys or access devices for the Buildings, offices,
rooms and toilet rooms which shall have been furnished to Tenant or which Tenant
shall have had made. In the event of the loss of any keys or access devices so
furnished by Landlord, Tenant shall pay Landlord therefor.
7. The toilet rooms, toilets, urinals, wash bowls and other apparatus
shall not be used for any purpose other than that for which they were
constructed and no foreign substance of any kind whatsoever shall be thrown
therein, and the expense of any breakage, stoppage or damage resulting from the
violation of this rule by Tenant or Tenant's employees or invitees shall be
borne by Tenant.
8. Tenant shall not use or keep in the Premises or the Buildings any
kerosene, gasoline or inflammable or combustible fluid or material other than
limited quantities necessary for the operation or
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maintenance of office or office equipment, or storage and shipping and receiving
functions. Tenant shall not use any method of heating or air conditioning other
than supplied pursuant to the Lease.
9. Tenant shall not use, keep or permit to be used or kept in the
Premises any foul or noxious gas or substance or permit or suffer the Premises
to be occupied or used in a manner offensive or objectionable to Landlord by
reason of noise, odors and/or vibrations or interfere in any way with anyone
having business in the Project, nor shall any animals or birds be brought or
kept in or about the Premises or the Buildings.
10. Except with the prior written consent of Landlord, Tenant shall not
sell, or permit the sale, at retail, of newspapers, magazines, periodicals,
theater tickets or any other goods or merchandise in or on the Premises, nor
shall Tenant carry on, or permit or allow any employee or other person to carry
on, the business of stenography, typewriting or any similar business in or from
the Premises for the service or accommodation of occupants of any other portion
of the Buildings other than as set forth in Tenant's permitted use herein, nor
shall the Premises be used for the storage of merchandise or for manufacturing
of any kind, or the business of a public xxxxxx shop or beauty parlor, nor shall
the Premises be used for any improper, immoral or objectionable purpose, or any
business or activity other than that specifically provided for in the Lease.
11. Tenant shall not install any radio or television antenna,
loudspeaker or any other device on the exterior walls or the roof of the
Buildings. Tenant shall not interfere with radio or television broadcasting or
reception from or in the Buildings or elsewhere.
12. Tenant shall not lay linoleum, tile, carpet or any other floor
covering so that the same shall be affixed to the floor of the Premises in any
manner except as approved in writing by Landlord (which approval shall not be
unreasonably withheld) or as set forth in the approved plans for the Tenant
Improvements. The expense of repairing any damage resulting from a violation of
this rule by Tenant or Tenant's contractors, employees or invitees or the
removal of any floor covering shall be borne by Tenant. Tenant shall use chair
pads if needed to avoid excess wear and tear to the floor coverings.
13. Landlord shall have the right to prescribe the weight, size, and
position of all safes, furniture or other heavy equipment brought into the
Buildings. Safes or other heavy objects shall, if considered necessary by
Landlord, stand on wood strips of such thickness as determined by Landlord to be
necessary to properly distribute the weight thereof. Landlord will not be
responsible for loss of or damage to any such safe, equipment or property from
any cause, and all damage done to the Buildings by moving or maintaining any
such safe, equipment or other property shall be repaired at the expense of
Tenant.
Business machines and mechanical equipment belonging to Tenant which
cause noise or vibration that may be transmitted to the structure of the
Buildings or to any space therein to such a degree as to be objectionable to
Landlord or to any tenants in the Buildings shall be placed and maintained by
Tenant, at Tenant's expense, on vibration eliminators or other devices
sufficient to eliminate noise or vibration. The persons employed to move such
equipment in or out of the Buildings must be reasonably acceptable to Landlord.
14. Tenant shall not place a load upon any floor of the Premises which
exceeds the load per square foot which such floor was designed to carry and
which is allowed by law. Tenant shall not xxxx, use double-sided adhesive tape
on, or drive nails, screw or drill into, the partitions, woodwork or plaster or
in any way deface the Premises or any part thereof. Tenant may hang pictures on
walls in the Premises. Any damage to the walls caused by xxxxxx bolts, or like
hanging materials, will be repaired by Tenant.
15. Tenant shall not install, maintain or operate upon the Premises any
vending machine other than those for the exclusive use of Tenant's or it
subtenant's employees without the written consent of Landlord.
16. There shall not be used in any space, or in the public areas of the
Buildings, either by Tenant or others, any hand trucks except those equipped
with rubber tires and side guards or such other material-handling equipment as
Landlord may approve (which approval shall not be unreasonably withheld). No
other vehicles of any kind shall be brought by Tenant into or kept in or about
the Premises.
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17. Tenant shall store all trash and garbage within the interior of the
Premises. No material shall be placed in the trash boxes or receptacles if such
material is of such nature that it may not be disposed of in the ordinary and
customary manner of removing and disposing of trash and garbage in the
jurisdiction in which the Premises is located, without violation of any law or
ordinance governing such disposal.
18. Canvassing, soliciting, distribution of handbills or any other
written material and peddling in the Buildings are prohibited, and Tenant shall
cooperate to prevent the same.
19. Landlord shall have the right to change the name and address of the
Buildings, subject to providing reasonable notice to Tenant.
20. Landlord reserves the right to exclude or expel from the Buildings
any person who, in Landlord's judgment, is intoxicated or under the influence of
liquor or drugs or who is in excessive violation of any of the rules or
regulations of the Buildings. Excessive violation shall mean that Tenant has
been provided with repeated notice of such violation and such violation is
continued.
21. Without the prior written consent of Landlord, Tenant shall not use
the name of the Buildings in connection with or in promoting or advertising the
business of Tenant except as Tenant's address. Tenant may use Project's name on
its stationery and business cards.
22. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.
23. Tenant assumes any and all responsibility for protecting the
Premises from theft, robbery and pilferage, which includes keeping doors locked
and other means of entry to the Premises closed.
24. Landlord reserves the right to make such other and reasonable,
uniformly applied and non-discriminatory enforced rules and regulations as in
its judgment may from time to time be needed for safety and security, for care
and cleanliness of the Buildings and for the preservation of good order therein.
Tenant agrees to abide by all such Rules and Regulations hereinafter stated and
any additional rules and regulations which are adopted. No new Rule or
Regulation shall be designed to discriminate solely against Tenant.
25. Tenant shall be responsible for the observance of all of the
foregoing Rules and Regulations by Tenant's employees, agents, clients,
customers, invitees and guests.
26. Unless otherwise defined, terms used in these Rules and Regulations
shall have the same meaning as in the Lease.
27. In the event of a conflict between the Lease and the Rules and
Regulations, then the Lease shall control.
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GUARANTY OF LEASE
THIS GUARANTY OF LEASE (this "Guaranty") is made as of August 3, 2000 by
BUSINESS OBJECTS, S.A., a company organized under the laws of France
("Guarantor"), for the benefit of 000 XXXX XXXXX ASSOCIATES, L.P., a California
limited liability partnership ("Landlord").
RECITALS
This Guaranty is made upon the basis of the following facts:
A. Business Objects America, a Delaware corporation ("Tenant") desires to
lease from Landlord certain real property located at 3000 and 0000 Xxxxxxx
Xxxxxxx, Xxx Xxxx, Xxxxxxxxxx (the "Premises"), pursuant to that certain Lease
Agreement (the "Lease") of even date herewith by and between Landlord and
Tenant. Capitalized terms used in this Guaranty but not defined herein shall
have the meanings given them in the Lease.
B. Landlord is not willing to enter into the Lease unless Landlord is
provided this Guaranty in support of Tenant's commitments as made pursuant to
the Lease. Guarantor is willing to provide, and does hereby provide, this
Guaranty to Landlord in order to induce Landlord to enter into the Lease desired
by Tenant.
NOW, THEREFORE, to induce Landlord to enter into the Lease, Guarantor
agrees as follows:
1. ABSOLUTE, UNCONDITIONAL GUARANTY. Guarantor unconditionally and
absolutely guarantees to Landlord the prompt payment when due of the Monthly
Base Rent, the Additional Charges, and all other Rent and other sums payable by
Tenant under or in connection with the Lease, including without limitation
interest and late charges (such Monthly Base Rent, Additional Charges, other
Rent and other sums are referred to herein for brevity as the "Rent"), whether
such sums are payable to Landlord or to any third party for the direct or
indirect benefit of Landlord, and the full and faithful performance and
observance of any and all covenants, whether present or future, contained in the
Lease to be performed and observed by Tenant. Guarantor further unconditionally
and absolutely guarantees to Landlord the correctness of any warranties and/or
representations of Tenant given to Landlord in, or in connection with, the
Lease. Guarantor unconditionally covenants to, and agrees with, Landlord that,
if any failure occurs in the timely payment by Tenant of any Rent or in the full
and faithful performance and/or discharge of any of the other duties,
obligations or covenants contained in the Lease to be performed by Tenant,
Guarantor will immediately and unconditionally pay to Landlord such Rent, will
perform and/or discharge such duties, obligations and covenants, and shall
reimburse Landlord for any and all damages that may arise as a result of
Tenant's breach of Tenant's payment or performance obligations under the Lease.
Guarantor further agrees that Guarantor shall pay to Landlord, on demand, all
expenses (including, without limitation, reasonable attorneys' fees and court
costs) arising out of or relating to the enforcement or protection of Landlord's
rights hereunder.
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2. GUARANTY OF PAYMENT AND PERFORMANCE. This is a guaranty of payment and
performance and not merely of collection. The obligations of Guarantor hereunder
are absolute, primary, unconditional and irrevocable obligations, which shall be
enforceable by Landlord, at its election, simultaneously with or after
proceeding against Tenant or without the necessity of any suit or proceedings
against Tenant, and in any event, without the necessity of any notice of
non-payment, non-performance or non-observance, or of any notice of acceptance
of the Guaranty contained herein or any other notice or demand to which a
guarantor might otherwise be entitled or which may be required to preserve any
rights against a guarantor, all of which Guarantor hereby expressly waives.
3. WAIVERS OF DEFENSES. Guarantor expressly agrees that the liability of
Guarantor hereunder shall not be impaired, released, modified, stayed, limited,
terminated or discharged, in whole or in part, by any of the following,
notwithstanding that the same are made with or without notice to Guarantor, and
Guarantor hereby freely and voluntarily waives any defense based upon any of the
following:
(a) Any amendment or modification of the provisions of the Lease that
is either mutually agreed to by Tenant and Landlord or contemplated by the Lease
or Paragraph 6 of this Guaranty, whether or not consented to by Guarantor;
(b) Any extensions of time for performance of the covenants under the
Lease to be performed by Tenant, whether given prior to or after default
thereunder;
(c) Any delay by Landlord in asserting any claim, right or cause of
action arising under or in connection with the Lease or this Guaranty, whether
or not Guarantor changes its position in reliance on such delay or the
expectation of the continuance of such delay;
(d) Any exchange, surrender or release, in whole or in part, of any
security which may be held by Landlord at any time for or under the Lease;
(e) Any other guaranty now or hereafter executed by Guarantor or
anyone else;
(f) The release, whether partial or full, of Guarantor or any other
guarantor from liability for the performance or observance of any of the
covenants under the Lease to be performed by Tenant, whether by operation of law
or otherwise;
(g) Landlord's consent to any assignment or subletting or the
assignment or successive assignments of the Lease by Tenant, or any subletting
of the premises demised under the Lease to Tenant;
(h) Any lien, charge or encumbrance on or affecting any of the
respective assets and properties of Tenant or Guarantor;
(i) Any rejection or disaffirmance of the Lease pursuant to the
Bankruptcy Code of the United States or other statute or from the decision of
any court interpreting any of the same;
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(j) Any tender of performance by or on behalf of Tenant after the
expiration of any period for performance described in Section 1161 of the Code
of Civil Procedure of the State of California, if, in the reasonable opinion of
Landlord, the acceptance of such tender would in any manner impair the right of
Landlord to terminate the Lease or to evict Tenant by reason of the
non-performance by Tenant;
(k) Any other agreement which may now or hereafter exist between
Landlord and Tenant, whether in respect of the Lease or any other subject matter
and whether or not consented to by Guarantor;
(l) Any assumption by Guarantor of primary liability under the Lease,
whether by merger or consolidation with Tenant or its successors, by becoming a
constituent partner of Tenant or by assignment of the Lease; or,
(m) Any matter or thing whatsoever other than (i) full and timely
performance of all obligations guaranteed hereby, or (ii) Tenant's or Landlord's
written waiver of any obligation of Tenant made expressly for the benefit of
Guarantor.
4. WAIVERS AS ELECTION OF REMEDIES AND SURETYSHIP RIGHTS. Although it is
not the intention of Landlord, Tenant or Guarantor that the leasehold interest
of Tenant under the Lease be deemed a security interest, rather than a lease,
Guarantor waives all of the rights which may be waived by a guarantor pursuant
to the provisions of Section 2856 of the Civil Code of the State of California.
Guarantor further waives: (i) all rights and defenses arising out of an election
of remedies by Landlord, and (ii) all suretyship rights or defenses described in
Sections 2787 to 2855, inclusive, of the Civil Code of the State of California.
Nothing contained in this Paragraph 4 is intended to limit, in any manner,
Guarantor's ability to exercise rights and assert defenses based upon Landlord's
failure to perform its obligations under the Lease that would be available to
Tenant under the Lease with respect to the obligations of Tenant guaranteed
hereunder, except as otherwise expressly provided in this Guaranty.
5. ASSUMPTION OF OBLIGATIONS AND WAIVERS AS TO FINANCIAL CONDITION. The
obligations of Guarantor hereunder shall not be affected by any failure on the
part of Landlord to inform Guarantor concerning Tenant's financial condition or
notify Guarantor of any adverse change in Tenant's financial condition of which
Landlord becomes aware. Guarantor assumes the obligation to make such inquiries
with respect to such financial condition as Guarantor deems necessary or prudent
in the circumstances.
6. RIGHTS AND WAIVERS AS TO MODIFICATIONS OF LEASE OR OTHER OBLIGATIONS.
At any time and from time to time, without terminating, affecting or impairing
the validity of this Guaranty or the obligations of Guarantor hereunder,
Landlord may deal with Tenant in the same manner and as fully as if this
Guaranty did not exist and shall be entitled (but not obligated), among other
things, to grant Tenant, without notice or demand and without affecting
Guarantor's liability hereunder, such extension or extensions of time to
perform, renew, compromise, accelerate or otherwise change the time for payment
of or otherwise change the terms of payment or any part thereof contained in or
arising under the Lease, or to waive any obligation of Tenant to perform, any
act or acts as the Landlord may deem advisable. If any agreement or stipulation
between Landlord and Tenant shall extend the time of performance or modify any
of
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the covenants of the Lease to be performed by Tenant, Guarantor shall continue
to be liable under this Guaranty according to the provisions of any such
agreement or stipulation.
7. EFFECT OF TERMINATION OF THE LEASE; GUARANTY OF PAYMENT OF DAMAGES.
The obligations guaranteed hereunder shall not be limited or terminated by the
termination of the Lease, by Landlord or otherwise, in accordance with law
following any default by Tenant in the performance of its obligations
thereunder. The obligations guaranteed hereunder expressly include any
obligations of Tenant which are accelerated in accordance with the provisions of
Section 1951.2 of the Civil Code of the State of California or any similar or
related provision of law, and Guarantor expressly hereby guarantees the prompt
payment of any damages or other sums to which Landlord becomes entitled in
accordance with the provisions of Section 1951.2.
8. WAIVERS AS TO LITIGATION. Landlord shall have the right to enforce
this Guaranty with respect to Guarantor without pursuing any rights or remedies
of Landlord against Tenant or any other guarantor or any other party, or any
security Landlord may hold. Landlord may commence any action or proceeding based
upon this Guaranty (i) directly against Guarantor without making any other
guarantor, Tenant or anyone else a party defendant in such action or proceeding,
or (ii) jointly against one or more of Guarantor, any other guarantors and/or
Tenant. Any one or more successive and/or concurrent actions may be brought
hereon against Guarantor, and/or against one or more other guarantors and/or
Tenant, with or without such action being brought against other parties, as
often as Landlord, in its sole discretion, may deem advisable.
9. OBLIGATIONS JOINT AND SEVERAL. The obligations of Guarantor under this
Guaranty are joint and several with those of any other party who may also bear
all or any part of such obligations, including, without limitation, Tenant or
any other guarantor of the obligations of Tenant under the Lease.
10. WAIVERS OF RIGHTS AND REMEDIES OF GUARANTOR AGAINST TENANT. Until all
the covenants and conditions in the Lease to be performed and observed by Tenant
are fully performed and observed, Guarantor:
(a) Shall have no right of subrogation against Tenant by reason of
any payments or acts of performance by Guarantor, in compliance with the
obligations of Guarantor hereunder;
(b) Waives any right to enforce any remedy which Guarantor now or
hereafter shall have against Tenant by reason of any one or more payments or
acts of performance in compliance with the obligations of Guarantor hereunder;
and
(c) Subordinates any liability or indebtedness of Tenant now or
hereafter held by Guarantor to the obligations of Tenant to the Landlord under
the Lease.
11. SUCCESSORS AND ASSIGNS. This Guaranty shall be binding upon Guarantor
and its successors and assigns, and shall inure to the benefit of and may be
enforced by the successors and assigns of Landlord or by any person to whom
Landlord's interest in the Lease, or any part thereof, including, without
limitation, all or any part of the Rent, may be assigned. Wherever in this
Guaranty reference is made to Landlord or Tenant, the same shall be deemed to
refer also to the then successor or assign of Landlord or Tenant.
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12. WAIVER OF DEFENSES PERTAINING TO BANKRUPTCY, DISABILITY OR CESSATION
OF LIABILITY OF TENANT. Neither Guarantor's obligation to make payment or render
performance in accordance with the terms of this Guaranty nor any remedy for the
enforcement thereof, shall be impaired, modified, stayed, released, limited,
terminated or discharged in any manner whatsoever by any impairment,
modification, change, release, limitation or stay of the liability of Tenant or
its estate in bankruptcy or any remedy for the enforcement thereof, resulting
from the operation of any present or future provision of the Bankruptcy Code of
the United States or other statute or from the decision of any court
interpreting any of the same, and Guarantor shall remain obligated under this
Guaranty as if no such impairment, stay, modification, change, release or
limitation had occurred. Guarantor waives any defense arising by reason of any
disability or other defense of Tenant, or by reason of the cessation from any
cause whatsoever of the liability, either in whole or in part, of Tenant to
Landlord, except, and to the extent, that such cessation shall be the result of
payment or performance of the obligation as to which the liability pertains.
Guarantor hereby acknowledges that the obligations of Guarantor hereunder are
independent of, and may exceed, the obligations of Tenant under the Lease.
13. REPAYMENTS AND REINSTATEMENT. If Landlord is obligated by any
bankruptcy or other law to repay to Tenant or Guarantor or to any trustee,
receiver or other representative of either of them any amounts previously paid,
then this Guaranty shall be reinstated in the amount of such repayment. Landlord
shall not be required to litigate or otherwise dispute its obligation to make
such repayments if it in good faith and on the advice of counsel believes that
such obligation exists.
14. GUARANTOR AS TENANT. In the event that this Guaranty is held
ineffective or unenforceable, in whole or in part, by any court of competent
jurisdiction, Guarantor shall be deemed to be a tenant under the Lease with the
same effect as if Guarantor was expressly named as a joint tenant therein having
joint and several liability with Tenant.
15. REMEDIES SEPARATE AND CUMULATIVE. All remedies of Landlord by reason
of this Guaranty are separate and cumulative remedies. Neither the existence nor
the exercise of any such remedy shall be deemed to preclude or prevent the
exercise of any other legal or equitable remedy available to Landlord hereunder.
16. SEVERABILITY OF PROVISIONS. If any provision of this Guaranty or the
application thereof to any person or circumstance shall to any extent be held
void, unenforceable or invalid, then the remainder of this Guaranty shall not be
affected thereby, and each provision of this Guaranty shall be valid and
enforced to the fullest extent permitted by law. It is the intention of
Guarantor and Landlord that each provision of this Guaranty be fully
enforceable, and that all of the provisions hereof shall be interpreted so as to
avoid being found void, unenforceable or invalid.
17. COUNTERCLAIMS, SETOFF AND DEDUCTION. The rights of Landlord pursuant
to this Guaranty shall not be subject to any counterclaim, set off or deduction
now held or hereafter arising in favor of Guarantor or Tenant except such
setoffs and deductions as may be specifically and expressly provided to Tenant
in the Lease, and Guarantor hereby waives the right to assert any such
counterclaim, set off or deduction in any action by Landlord based on or in
connection with this Guaranty except as specifically provided in this Xxxxxxxxx
00.
0
00
00. NO WAIVER. No waiver or modification of any provision of this Guaranty
nor any termination of this Guaranty shall be effective unless expressly stated
in writing and signed by Landlord, and then only to the extent so expressly
stated, and no such waiver shall be applicable to any circumstance other than
the specific instance for which it is given. In no event shall a waiver of any
provision of this Guaranty be implied from any course of conduct on the part of
Guarantor and/or Landlord and/or any third party.
19. REPRESENTATIONS AND WARRANTIES OF GUARANTOR. Guarantor represents and
warrants to the Landlord that:
(a) Guarantor (i) is duly organized, validly existing and in good
standing under the laws of the country of its incorporation, (ii) has the
corporate power, authority and legal right to conduct the business in which it
is currently engaged, and (iii) is duly qualified and in good standing under the
laws of France.
(b) Guarantor has the power, authority and legal right to make,
deliver and perform this Guaranty and has taken all necessary action to
authorize the execution, delivery and performance of this Guaranty. No consent
of any other person (including, without limitation, stockholders and creditors
of Guarantor), and no authorization of, notice to, or other act by or in respect
of Guarantor by or with any governmental authority, agency or instrumentality is
required in connection with the execution, delivery, performance, validity or
enforceability of this Guaranty that has not already been taken or obtained.
This Guaranty has been duly executed and delivered by Guarantor and constitutes
a legal, valid and binding obligation of Guarantor, enforceable against
Guarantor in accordance with its terms.
(c) The execution, delivery and performance by Guarantor of this
Guaranty will not violate any provision of any existing law or regulation
applicable to Guarantor or of any award, order or decree applicable to Guarantor
of any court, arbitrator or governmental authority, or of any security issued by
Guarantor or of any mortgage, indenture, lease, contract or other agreement or
undertaking to which Guarantor is a party or by which Guarantor or any of its
properties or assets is bound.
(d) Guarantor has full and complete access to the financial records
of Tenant and has fully satisfied itself with regard to those records prior to
entering into this Guaranty.
(e) The financial statements of Guarantor provided to Landlord in
connection with this Guaranty are true and correct in all material respects,
have been prepared in accordance with generally accepted accounting principles
consistently applied, and present fairly and accurately the financial condition
of Guarantor as of the respective dates thereof, and no material adverse change
has occurred in the financial condition of Guarantor since such dates.
20. JURISDICTION, VENUE AND CHOICE OF LAW. This Guaranty and all rights,
obligations and liability arising hereunder shall be construed according to the
laws of the State of California. Guarantor hereby agrees that any action to
enforce the provisions of this Guaranty may be brought, in Landlord's sole
discretion, in any federal or state court located within the County of Santa
Xxxxx, State of California, and by execution and delivery of this Guaranty
Guarantor expressly, irrevocably and unconditionally (a) accepts for itself and
in connection with
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its properties the nonexclusive jurisdiction of such courts, (b) consents to and
submits to the exercise of personal jurisdiction by such courts, but only to the
extent of and/or as necessary to enforce its obligations under this Guaranty,
(c) agrees to be bound by any judgment rendered thereby in connection with this
Guaranty, and (d) waives (i) any objection Guarantor may now or hereafter have
to the laying of venue in any of such courts and (ii) any claim that any action
or proceeding brought in any such court has been brought in an inconvenient
forum. Guarantor irrevocably and unconditionally agrees that a summons and
complaint or equivalent documents commencing an action or proceeding in any such
court shall be validly and properly served and shall confer personal
jurisdiction over Guarantor if served personally to ___________________________,
who is irrevocably designated and appointed by Guarantor as its authorized agent
to accept and acknowledge on its behalf service of any and all process which may
be served in any such action or proceeding in any such court and which company
is irrevocably authorized and directed by Guarantor to accept such service on
its behalf. A copy of any process so served shall be mailed by Landlord to
Guarantor at its address provided on the signature page hereto at the time of
service upon such authorized agent, except that, unless otherwise provided by
applicable law, any failure to mail such copy shall not affect the validity of
service of process. The failure of such agent to give notice to Guarantor of any
such service shall not impair or affect the validity of such service or of any
judgment rendered in any action or proceeding based thereon. Guarantor hereby
irrevocably and unconditionally agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions
within France or the United States of America by suit on the judgment or in any
other manner provided by law. Nothing herein shall affect the right to serve
process in any other manner permitted by law or shall limit the right of the
Landlord to bring proceedings against any Guarantor in the courts of any other
jurisdiction.
21. ATTORNEY FEES. Notwithstanding anything to the contrary contained in
this Guaranty, in the event of any litigation between Landlord and Guarantor
seeking a declaration of rights hereunder, damages for breach or any other
remedy pertaining to this Guaranty, the prevailing party shall recover its
reasonable attorneys' fees and court costs.
22. SUBLESSEES AND OTHER OCCUPANTS. For purposes of this Guaranty and the
obligations and liabilities of Guarantor hereunder, the term "Tenant" shall
include any and all concessionaires, licensees, franchisees, department
operators, assignees, subtenants or others directly or indirectly leasing or
occupying the Premises or operating or conducting a business in or from the
Premises.
23. TIME. Time is of the essence of each and every provision hereof.
24. GUARANTOR'S CERTIFICATE AND FINANCIAL INFORMATION. Guarantor agrees to
provide Landlord with a "Guarantor's Certificate" as provided in Paragraph 14 of
the Lease and the financial information with respect to Guarantor as required by
Paragraph 34 of the Lease, in each case within the time period specified in the
applicable paragraph of the Lease. Failure of Guarantor to provide any such
certificate or financial information as and when required shall be a Default
under the Lease and an immediate default under this Guaranty.
25. TERMINATION OF GUARANTY. Except as expressly provided in the last
sentence of this Paragraph 25, this Guaranty shall terminate and be of no
further force and effect two years
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following the termination of the Lease (the "Termination Date") so long as no
notice of default, claim or demand relating to a default or breach by Tenant of
any of its obligations under the Lease, or by Guarantor of any of its
obligations under this Guaranty, has been delivered or made by Landlord and has
not been fully cured by Tenant or Guarantor, as applicable, or waived in writing
by Landlord, in its sole discretion, as of such date (in which event this
Guaranty shall continue with respect to such defaults or breaches until such
defaults or breaches are fully cured by Tenant or Guarantor, as applicable, or
waived in writing by Landlord, in its sole discretion); provided, however, that
if a claim or demand has been made on this Guaranty prior to the Termination
Date (as it may be extended with respect to then-existing defaults or breaches
as provided above), Guarantor's obligations hereunder with respect to such claim
or demand and any other claims, demands or guaranteed obligations which may
arise, directly or indirectly, from such claim or demand, shall not terminate
until final resolution of any such claim or demand and full payment and/or
performance of all guaranteed obligations arising therefrom. Notwithstanding the
foregoing, this Guaranty shall not terminate with respect to, nor shall
Guarantor be released from, any liability under any Lease provisions that
expressly survive the termination of the Lease (including, without limitation,
Paragraphs 11 and 41(b) of the Lease) to the extent of liability arising
directly or indirectly out of any acts, events or claims occurring prior to the
termination of the Lease.
IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the day and year
first written above.
"Guarantor"
BUSINESS OBJECTS, S.A.,
a company organized under the laws of France
By:
---------------------------------------
Its:
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By:
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Its:
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Address for Notices:
------------------------------------------
------------------------------------------
------------------------------------------
Attn:
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Facsimile:
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Telephone:
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