Exhibit 10.44
LEASE
DATED FEBRUARY 17, 2000
BY AND BETWEEN
SCANLANKEMPERBARD COMPANIES,
AN OREGON CORPORATION
AS LANDLORD
AND
INPRISE CORPORATION,
A DELAWARE CORPORATION
AS TENANT
AFFECTING PREMISES COMMONLY KNOWN AS
000 XXXXXXXXXX XXX, XXXXXX XXXXXX, XXXXXXXXXX
SUMMARY OF BASIC LEASE TERMS
----------------------------
SECTION
(LEASE
REFERENCE) TERMS
A. Lease Reference Date: February 17, 2000
(Introduction) --------------------
B. Landlord: ScanlanKemperBard Companies, an Oregon
(Introduction) -------- corporation
C. Tenant: Inprise Corporation, a Delaware
(Introduction) ------ corporation
D. Premises: That area consisting of approximately
(Section 1.21) -------- 161,201 square feet of gross leasable
area, the address of which is 000
Xxxxxxxxxx Xxx, Xxxxxx Xxxxxx,
Xxxxxxxxxx, consisting of 142,165 square
feet located in Modules D-3, E and F and
19,036 square feet located in a storage
area on the lower level (the "Storage
Area"), as shown on Exhibit A, subject
---------
to adjustment pursuant to Section 15
E. Project: The land and improvements shown on
(Section 1.22) -------- Exhibit A consisting of approximately
---------
365,203 square feet of gross leasable
area on approximately 33 acres of land,
of which approximately 6.77 acres are
undeveloped
F. Building: The building in which the Premises are
(Section 1.8) -------- located containing approximately 365,203
square feet of gross leasable area
G. Tenant's Share: 44.14%, subject to adjustment pursuant
(Section 1.30) -------------- to Sections 4.7 and 15
H. Tenant's Allocated Parking 426 stalls, subject to adjustment
--------------------------
(Section 4.5) Stalls: pursuant to Section 15
------
I. Scheduled Commencement Date: The "Closing Date" as defined in that
(Section 1.26) --------------------------- certain Agreement of Purchase and Sale
and Joint Escrow Instructions dated
December 30, 1999, as amended, between
Tenant and ScanlanKemperBard Companies
J. Lease Term: One Hundred Twenty (120) months, plus
(Section 1.18) ---------- the partial month, if any, in which the
Rent Commencement Date occurs, subject
to extension pursuant to Section 16
K. Base Monthly Rent: Base Monthly Rent
(Section 3.1) ----------------- for the Premises Base Monthly
Located in Modules Rent for the
Year D-3, E and F Storage Space
---- ------------------- -------------
1 $301,674.13 $ 9,518.00
plus the partial month, if any, in
which the Rent Commencement Date
occurs
2 $310,724.35 $ 9,803.54
3 $320,046.08 $10,097.64
4 $329,647.46 $10,400.56
5 $339,536.88 $10,712.57
6 $349,722.98 $11,033.94
7 $360,214.66 $11,364.95
8 $371,021.09 $11,705.89
9 $382,151.72 $12,057.06
10 $393,616.27 $12,418.77
subject to adjustment pursuant to Section 15
L. Prepaid Rent: None
(Section 3.3) ------------
M. Security Deposit: $3,734,305.56, subject to adjustment
(Section 3.5) ---------------- pursuant to Section 15 hereof
N. Permitted Use: General office use, software development
(Section 4.1) ------------- and research and development
O. Tenant's Liability Insurance $ 5,000,000
----------------------------
(Section 9.1) Minimum:
-------
P. Landlord's Address: (1) ScanlanKemperBard Companies
(Section 1.3) ------------------ 2650 Pacific Center
0000 XX Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxx Xxxxxxx
And
(2) Insignia ESG
000 X. Xxxxx Xxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Attn: Property Manager
Q. Tenant's Address: Inprise Corporation
(Section 1.3) ---------------- 000 Xxxxxxxxxx Xxx
Xxxxxx Xxxxxx, XX 00000
Attn: Chief Financial Officer
R. Retained Real Estate Brokers: The Xxxxxxxx Company, representing
(Section 18.13) ---------------------------- Landlord and Tenant
S. Base Year: 2000
(Section 1.7) ---------
T. Lease: This Lease includes the summary of the
(Section 1.17) ----- Basic Lease Terms, the Lease, and the
following exhibits:
Exhibit A: (site plan of the Project
---------
containing description of
the Premises)
Exhibit B: (Commencement Memorandum)
---------
Exhibit C: (Exclusive Parking Area)
---------
Exhibit D: (site plan of the Project
---------
containing a description of
the Expansion Space)
Exhibit E: (form of subordination
---------
agreement)
Exhibit F: (Hazardous Materials
---------
Questionnaire)
The foregoing Summary is hereby incorporated into and made a part of
the Lease. Each reference in the Lease to any term of the Summary shall mean
the respective information set
forth above 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 the Summary and the Lease, the Summary shall control.
LANDLORD:
SCANLANKEMPERBARD COMPANIES,
an Oregon corporation
By /s/ Xxxx X. Xxxxxxx
-------------------------------------
Name Xxxx X. Xxxxxxx
-------------------------------------
Title Vice President
-------------------------------------
TENANT:
INPRISE CORPORATION, a Delaware corporation
By /s/ Hobart McK. Birmingham
-------------------------------------
Name Hobart McK. Birmingham
-------------------------------------
Title Chief Administrative Officer
-------------------------------------
LEASE
-----
This Lease is dated as of the lease reference date specified in Section A
---------
of the Summary and is made by and between the party identified as Landlord in
Section B of the Summary and the party identified as Tenant in Section C of the
--------- ---------
Summary.
1. Definitions.
-----------
1.1 General. Any initially capitalized term that is given a special
-------
meaning by this Article 1, the Summary, or by any other provision of this Lease
(including the exhibits attached hereto) shall have such meaning when used in
this Lease or any addendum or amendment hereto unless otherwise clearly
indicated by the context.
1.2 Additional Rent. The term "Additional Rent" is defined in
---------------
Section 3.2.
1.3 Address for Notices. The term "Address for Notices" shall mean
-------------------
the addresses set forth in Sections P and Q of the Summary; provided, however,
----------------
that after the Commencement Date, Tenant's Address for Notices shall be the
address of the Premises.
1.4 Agents. The term "Agents" shall mean the following: (i) with
------
respect to Landlord or Tenant, the agents, employees, contractors, invitees and
licensees of such party; and (ii) in addition, with respect to Tenant, Tenant's
subtenants, and their respective agents, employees, contractors, and invitees.
1.5 Agreed Interest Rate. The term "Agreed Interest Rate" shall mean
--------------------
that interest rate determined as of the time it is to be applied that is equal
to the lesser of (i) five percent (5%) in excess of the reference rate (or prime
rate) of the Bank of America, N.T. & S.A. as it may be adjusted from time to
time, or (ii) the maximum interest rate permitted by Law.
1.6 Base Monthly Rent. The term "Base Monthly Rent" shall mean the
-----------------
fixed monthly rent payable by Tenant pursuant to Section 3.1 which is specified
in Section K of the Summary.
---------
1.7 Base Year. The term "Base Year" shall mean the calendar year set
---------
forth in Section S of the Summary.
---------
1.8 Building. The term "Building" shall mean the building in which
--------
the Premises are located, which Building is identified in Section F of the
---------
Summary, the gross leasable area of which is referred to herein as the "Building
Gross Leasable Area."
1.9 Commencement Date. The term "Commencement Date" is the date the
-----------------
Lease Term commences, which term is defined in Section 2.2.
1.10 Common Area. The term "Common Area" shall mean all areas and
-----------
facilities within the Project that are not designated by Landlord for the
exclusive use of Tenant or any other lessee or other occupant of the Project,
including the parking areas, access and perimeter roads,
1
pedestrian sidewalks, landscaped areas, trash enclosures, recreation areas, the
interior common areas of any module that is not exclusively leased to Tenant or
any other tenant of the Project and the like.
1.11 Common Operating Expenses. The term "Common Operating Expenses"
-------------------------
is defined in Section 8.2.
1.12 Effective Date. The term "Effective Date" shall mean the date
--------------
set forth in Section A of the Summary.
---------
1.13 Event of Tenant's Default. The term "Event of Tenant's Default"
-------------------------
is defined in Section 13.1.
1.14 Hazardous Materials. The terms "Hazardous Materials" and
-------------------
"Hazardous Materials Laws" are defined in Section 7.2E.
1.15 Insured and Uninsured Peril. The terms "Insured Peril" and
---------------------------
"Uninsured Peril" are defined in Section 11.2E.
1.16 Law. The term "Law" shall mean any judicial decision, statute,
---
constitution, ordinance, resolution, regulation, rule, administrative order, or
other requirement of any municipal, county, state, federal or other governmental
agency or authority having jurisdiction over the parties to this Lease or the
Project, or both, in effect either at the Effective Date or any time during the
Lease Term, including, without limitation, any Hazardous Material Law (as
defined in Section 7.2E) and the Americans with Disabilities Act, 42 U.S.C.
(S)(S) 12101, et seq., and any rules, regulations, restrictions, guidelines,
------
requirements or publications promulgated or published pursuant thereto.
1.17 Lease. The term "Lease" shall mean the Summary and all elements
-----
of this Lease identified in Section T of the Summary, all of which are attached
---------
hereto and incorporated herein by this reference.
1.18 Lease Term. The term "Lease Term" shall mean the term of this
----------
Lease which shall commence on the Commencement Date and continue for the period
specified in Section J of the Summary.
---------
1.19 Lender. The term "Lender" shall mean any beneficiary, mortgagee,
------
secured party, lessor, or other holder of any Security Instrument.
1.20 Permitted Use. The term "Permitted Use" shall mean the use
-------------
specified in Section N of the Summary.
---------
1.21 Premises. The term "Premises" shall mean that building area
--------
described in Section D of the Summary that is within the Building, the aggregate
---------
gross leasable area of which is referred to herein as "Tenant's Gross Leasable
Area".
1.22 Project. The term "Project" shall mean that real property and
-------
the improvements thereon which are specified in Section E of the Summary, the
---------
aggregate gross leasable area of which is referred to herein as the "Project
Gross Leasable Area."
Facility:_________________
1.23 Private Restrictions. The term "Private Restrictions" shall mean
--------------------
all recorded covenants, conditions and restrictions, private agreements,
reciprocal easement agreements, and any other recorded instruments affecting the
use of the Premises which (i) exist as of the Effective Date, or (ii) are
recorded after the Effective Date and are approved in writing by Tenant.
1.24 Real Property Taxes. The term "Real Property Taxes" is defined
-------------------
in Section 8.3.
1.25 Rent Commencement Date. The term "Rent Commencement Date" shall
----------------------
mean the date specified in Section 3.1.
1.26 Scheduled Commencement Date. The term "Scheduled Commencement
---------------------------
Date" shall mean the date specified in Section I of the Summary.
---------
1.27 Security Instrument. The term "Security Instrument" shall mean
-------------------
any underlying lease, mortgage or deed of trust which now or hereafter affects
the Project, and any renewal, modification, consolidation, replacement or
extension thereof.
1.28 Summary. The term "Summary" shall mean the Summary of Basic
-------
Lease Terms executed by Landlord and Tenant that is part of this Lease.
1.29 Tenant's Alterations. The term "Tenant's Alterations" shall mean
--------------------
all improvements, additions, alterations, and fixtures installed in the Premises
by Tenant at its expense after the Effective Date which are not Trade Fixtures.
1.30 Tenant's Share. The term "Tenant's Share" shall mean the
--------------
percentage obtained by dividing Tenant's Gross Leasable Area by the Building
Gross Leasable Area, which as of the Effective Date is the percentage identified
in Section G of the Summary.
---------
1.31 Trade Fixtures. The term "Trade Fixtures" shall mean (i)
--------------
Tenant's inventory, furniture, signs, and business equipment, and (ii) anything
affixed to the Premises by Tenant at its expense for purposes of trade,
manufacture, ornament or domestic use (except replacement of similar work or
material originally installed by Landlord) which can be removed without material
injury to the Premises unless such thing has, by the manner in which it is
affixed, become an integral part of the Premises.
2. Demise, Construction, and Acceptance.
------------------------------------
2.1 Demise of Premises. Landlord hereby leases to Tenant, and Tenant
------------------
leases from Landlord, for the Lease Term upon the terms and conditions of this
Lease, the Premises together with (i) the right to use the number of Tenant's
Allocated Parking Stalls within the Common Area (subject to the limitations set
forth in Section 4.5), and (ii) the non-exclusive right to use the Common Area
for ingress to and egress from the Premises. Landlord reserves the use of the
exterior walls, the roof and the area beneath and above the Premises, together
with the right to install, maintain, use, and replace ducts, wires, conduits and
pipes leading through the Premises in locations which will not materially
interfere with Tenant's use of the Premises. Landlord reserves the right to
make, at Landlord's cost, modifications to the entrances from the Premises to
the Common Area
Facility:________________
(other than Tenant's main entrance), and to other leasable premises, including
closing such entrances. In the event Landlord elects to make such modifications,
provided Landlord performs such work as set forth in the following sentence,
Tenant shall have no right to claim an abatement of any rentals due to such
modifications, and Tenant shall waive all claims, if any, Tenant may have
against Landlord related to, or arising out of, such modifications, including,
without limitation, claims of interference with Tenant's business operations or
lost profits or loss of business. Landlord shall use reasonable efforts to
minimize disruption to Tenant's use of the Premises as a result of such
modifications (which reasonable efforts shall not require Landlord to perform
such work outside normal business hours) and to keep the area around such work
clean.
2.2 Commencement Date. On the Scheduled Commencement Date, the Lease
-----------------
Term shall commence, and such date shall be referred to herein as the
"Commencement Date". Within ten (10) days of request by Landlord, Tenant shall
acknowledge the actual Commencement Date by executing a Commencement Memorandum
in the form attached hereto as Exhibit B. Landlord and Tenant hereby
---------
acknowledge that Tenant currently occupies the Premises, and Landlord shall have
no obligation to deliver possession of the Premises to Tenant.
2.3 Construction of Improvements. Prior to the Commencement Date,
----------------------------
Landlord shall have no obligation to make any repairs, improvements, additions
or alterations to the Premises or to provide any tenant improvement allowance to
Tenant. Tenant shall be solely responsible for constructing at its sole cost
and expense any improvements to the Premises required for Tenant's Permitted Use
of the Premises in accordance with the terms of Section 5 hereof.
2.4 Delivery and Acceptance of Possession. Tenant acknowledges that
-------------------------------------
it currently occupies the Premises and has had an opportunity to conduct, and
has conducted, such inspections of the Premises as it deems necessary to
evaluate its condition. Tenant agrees to accept possession of the Premises in
its then existing condition, "as-is", including all patent and latent defects.
Landlord and Tenant acknowledge that the Premises as of the date hereof may not
comply with Title III of the Americans with Disabilities Act of 1990 (42 U.
S.C. 12181, et seq., The Provisions Governing Public Accommodations and
Services Operated by Private Entities), and all regulations promulgated
thereunder, and all amendments, revisions or modifications thereto now or
hereafter adopted or in effect in connection therewith (hereinafter collectively
referred to as the "ADA"), and that Tenant shall, at Tenant's cost, comply with
the ADA in connection with Tenant's occupation, use and improvement of the
Premises.
3. Rent.
----
3.1 Base Monthly Rent. Tenant shall pay to Landlord the Base Monthly
-----------------
Rent set forth in Section K of the Summary commencing on the Commencement Date.
---------
The date for the commencement of the payment of Base Monthly Rent shall
hereinafter be referred to as the "Rent Commencement Date."
3.2 Additional Rent. Commencing on the Commencement Date and
---------------
continuing throughout the Lease Term, Tenant shall pay the following as
additional rent (the "Additional Rent"): (i) any late charges or interest due
Landlord pursuant to Section 3.4; (ii) Tenant's Share of Expense Increases as
provided in Section 8.1; (iii) Landlord's share of any Subrent received by
Facility:_____________
Tenant upon certain assignments and sublettings as required by Section 14.1;
(iv) any legal fees and costs due Landlord pursuant to Section 18.9; and (v) any
other charges due Landlord pursuant to this Lease.
3.3 Payment of Rent. All rent required to be paid in monthly
---------------
installments shall be paid in advance on the first day of each calendar month
during the Lease Term. If Section K of the Summary provides that the Base
---------
Monthly Rent is to be increased during the Lease Term and if the date of such
increase does not fall on the first day of a calendar month, such increase shall
become effective on the first day of the next calendar month. All rent shall be
paid in lawful money of the United States, without any abatement, deduction or
offset whatsoever (except as specifically provided in Sections 7.3, 11.4 and
12.3), and without any prior demand therefor. Rent shall be paid to Landlord at
its address set forth in Section P (1) of the Summary, or at such other place as
-------------
Landlord may designate from time to time. Tenant's obligation to pay Base
Monthly Rent and Tenant's Share of Expense Increases shall be prorated at the
commencement and expiration of the Lease Term.
3.4 Late Charge and Interest. Tenant acknowledges that the late
------------------------
payment by Tenant of any installment of rent, or any other sum of money required
to be paid by Tenant under this Lease, will cause Landlord to incur certain
costs and expenses not contemplated under this Lease, the exact amount of such
costs being extremely difficult and impractical to fix. Such costs and expenses
will include, without limitation, attorneys' fees, administrative and collection
costs, and processing and accounting expenses and other costs and expenses
necessary and incidental thereto. If any Base Monthly Rent or Additional Rent
is not received by Landlord from Tenant within five (5) days after the due date
for such payment, then Tenant shall immediately pay to Landlord a late charge
equal to two percent (2%) of such delinquent rent as liquidated damages for
Tenant's failure to make timely payment. In no event shall this provision for a
late charge be deemed to grant to Tenant a grace period or extension of time
within which to pay any rent or prevent Landlord from exercising any right or
remedy available to Landlord upon Tenant's failure to pay any rent due under
this Lease in a timely fashion, including any right to terminate this Lease
pursuant to Section 13.2B. If any rent remains delinquent for a period in
excess of thirty (30) days then, in addition to such late charge, Tenant shall
pay to Landlord interest on any rent that is not paid when due at the Agreed
Interest Rate following the date such amount became due until paid.
3.5 Security Deposit. Upon execution of this Lease, Tenant shall
----------------
deposit with Landlord in cash the amount set forth in Section M of the Summary
---------
as security for the performance by Tenant of its obligations under this Lease,
and not as a prepayment of rent (the "Security Deposit"). If Tenant defaults
under this Lease, Landlord may apply all or any part of the Security Deposit for
the payment of any rent or other sum in default, the repair of any damage to the
Premises caused by Tenant or the payment of any other amount which Landlord may
spend or become obligated to spend by reason of Tenant's default or to
compensate Landlord for any other loss or damage which Landlord may suffer by
reason of Tenant's default to the full extent permitted by law. To the extent
any portion of the Security Deposit is used, Tenant shall within five (5) days
after demand from Landlord restore the Security Deposit to its full amount.
Landlord may keep the Security Deposit in its general funds. If Tenant shall
perform all of its obligations under this Lease and return the Premises to
Landlord at the end of the Term, Landlord shall return all of the remaining
Security Deposit to Tenant within thirty (30) days after the end of the Term.
The Security
Facility:_____________
Deposit shall not serve as an advance payment of rent or a measure of Landlord's
damages for any default under this Lease. If Landlord transfers its interest in
the Project or this Lease, Landlord may transfer the Security Deposit to its
transferee. Upon such transfer, Landlord shall have no further obligation to
return the Security Deposit. Tenant shall look solely to the new landlord for
the return of the Security Deposit. Tenant covenants and agrees that it shall
not assign or encumber or attempt to assign or encumber the Security Deposit and
neither Landlord or its successors or assigns shall be bound by any such
agreement, encumbrance, attempted assignment or attempted encumbrance. Landlord
shall pay to Tenant (or, at Landlord's election, credit against Base Monthly
Rent) interest on the cash Security Deposit held by Landlord in the amount of
four percent (4%) per annum; provided, however, in the event Landlord fails to
obtain by the second (2/nd/) anniversary of the Commencement Date an amendment
to that certain Owner Participation and Development Agreement dated December 25,
1991 by and among the Redevelopment Agency of the City of Scotts Valley, the
City of Scotts Valley and Borland International, Inc. that would permit
Landlord, as transferee, to construct office and ancillary facility space of up
to a total of 700,000 square feet on the Project (notwithstanding the limitation
in Section 1(C) thereof), then Landlord shall only be required to pay Tenant (or
credit against Base Monthly Rent) interest in the amount of one half of a
percent (.5%) per annum. Such amounts shall be paid or credited on each
anniversary of the Commencement Date.
4. Use of Premises.
---------------
4.1 Limitation on Use. Tenant shall use the Premises solely for the
-----------------
Permitted Use specified in Section N of the Summary. Tenant shall not do
---------
anything in or about the Premises which will (i) cause structural injury to the
Building, or (ii) cause damage to any part of the Building except to the extent
reasonably necessary for the installation of Tenant's Trade Fixtures and
Tenant's Alterations, and then only in a manner which has been first approved by
Landlord in writing. Tenant shall not operate any equipment within the Premises
which will (a) materially damage the Building or the Common Area, (b) overload
existing electrical systems or other mechanical equipment servicing the
Building, (c) impair the efficient operation of the sprinkler system or the
heating, ventilating or air conditioning ("HVAC") equipment within or servicing
the Building, or (d) damage, overload or corrode the sanitary sewer system.
Tenant shall not attach, hang or suspend anything from the ceiling, roof, walls
or columns of the Building that will result in violations of clauses (a) through
(d) immediately above or set any load on the floor in excess of the load limits
for which such items are designated nor operate hard wheel forklifts within the
Premises. Notwithstanding the foregoing, Landlord shall not require Tenant to
relocate any equipment or furniture from its location as of the Effective Date
due to the foregoing restriction regarding load limits, or otherwise hold Tenant
in violation of the foregoing provision regarding load limits due to the
location of furniture and equipment as of the Effective Date. In addition,
subject to the provisions of this Lease, Tenant may continue to use the Premises
in the manner in which Tenant is currently using the Premises. Any dust, fumes,
or waste products generated by Tenant's use of the Premises shall be contained
and disposed so that they do not (1) create an unreasonable fire or health
hazard, (2) damage the Premises, or (3) result in the violation of any Law.
Except as approved by Landlord, Tenant shall not change the exterior of the
Building or install any equipment or antennas on or make any penetrations of the
exterior or roof of the Building. Tenant shall not commit any waste in or about
the Premises, and Tenant shall keep the Premises in a neat, clean, attractive
and orderly condition, free of any nuisances. If Landlord designates a standard
window covering for use throughout the
Facility:___________________
Building, Tenant shall, at Landlord's cost, use this standard window covering to
cover all windows in the Premises. Tenant shall not conduct on any portion of
the Premises or the Project any sale of any kind, including any public or
private auction, fire sale, going-out-of-business sale, distress sale or other
liquidation sale.
4.2 Compliance with Regulations. Tenant shall not use the Premises
---------------------------
in any manner which violates any Laws or Private Restrictions which affect the
Premises. Tenant shall abide by and promptly observe and comply with all Laws
and Private Restrictions; provided, however, Tenant shall not be obligated to
make any alterations, additions or improvements to the Premises or the Project
required to be made by future Laws or Private Restrictions except as set forth
in Section 5.3 hereof. Tenant shall not use the Premises in any manner which
will cause a cancellation of any insurance policy covering Tenant's Alterations
or any improvements installed by Landlord at its expense or which poses an
unreasonable risk of damage or injury to the Premises. Tenant shall not sell,
or permit to be kept, used, or sold in or about the Premises any article which
may be prohibited by the standard form of all-risk insurance policy. Tenant
shall comply with all reasonable requirements of any insurance company,
insurance underwriter, or Board of Fire Underwriters which are necessary to
maintain the insurance coverage carried by either Landlord or Tenant pursuant to
this Lease.
4.3 Outside Areas. No materials, supplies, tanks or containers,
-------------
equipment, finished products or semi-finished products, raw materials,
inoperable vehicles or articles of any nature shall be stored upon or permitted
to remain outside of the Premises except in fully fenced and screened areas
outside the Building which have been designed for such purpose and have been
approved in writing by Landlord for such use by Tenant.
4.4 Signs. Tenant shall not place on any portion of the Premises any
-----
sign, placard, lettering in or on windows, banner, displays or other advertising
or communicative material which is visible from the exterior of the Building
without the prior written approval of Landlord. All such approved signs shall
strictly conform to all Laws and Private Restrictions and shall be installed at
the expense of Tenant. Tenant shall maintain such signs in good condition and
repair and shall remove, at Tenant's sole cost, such signs installed by Tenant
after the Effective Date upon the expiration or earlier termination of this
Lease. In connection with Landlord's purchase of the Project and leasing of
portions of the Project to third parties, Landlord shall have the right, at
Landlord's cost, to remove or require modifications to Tenant's existing signage
on the Project; provided that, in the event Landlord installs a monument sign on
the Project, Tenant shall have the right to install its name, at Landlord's sole
cost, on such sign. Tenant shall also have the right, subject to Landlord's
reasonable approval as to the specifications therefor, at Tenant's sole cost, to
install its name on the glass entry to the Premises off the main lobby of the
Building. Landlord shall, at its sole cost, install Tenant's name on the
building directory in the main lobby of the Building.
4.5 Parking. Tenant and Tenant's Agents shall have the exclusive
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right to park in the parking spaces located under Modules E and F as shown on
Exhibit C hereto. In addition, Tenant is allocated and shall have the non-
---------
exclusive right to use not more than the number of parking stalls within the
Project equal to the number of Tenant's Allocated Parking Stalls described in
Section H of the Summary less the number of parking stalls located below Modules
---------
E and F as shown on Exhibit C hereto for its use and the use of Tenant's Agents,
---------
the location of which may be
Facility:_______________
designated from time to time by Landlord. Tenant shall not at any time use more
parking spaces than the number so allocated to Tenant or park its vehicles or
the vehicles of others in any portion of the Project not designated by Landlord
as a non-exclusive parking area. Except with respect to the exclusive parking
spaces shown on Exhibit C hereto, Tenant shall not have the exclusive right to
---------
use any specific parking space. If Landlord grants to any other tenant the
exclusive right to use any particular parking space(s), Tenant shall not use
such spaces. Landlord reserves the right, after having given Tenant reasonable
notice, to have any vehicles owned by Tenant or Tenant's Agents utilizing
parking spaces in excess of the parking spaces allowed for Tenant's use to be
towed away at Tenant's cost. All trucks and delivery vehicles shall be (i)
parked at the rear of the Building, (ii) loaded and unloaded in a manner which
does not interfere with the businesses of other occupants of the Project, and
(iii) permitted to remain on the Project only so long as is reasonably necessary
to complete loading and unloading. In the event Landlord elects or is required
by any Law to limit or control parking in the Project, whether by validation of
parking tickets or any other method of assessment, Tenant agrees to participate
in such validation or assessment program under such reasonable rules and
regulations as are from time to time established by Landlord. Landlord shall
have no obligation to monitor or enforce any rules regarding the use of parking
stalls in the Project.
4.6 Rules and Regulations. Landlord may from time to time promulgate
---------------------
reasonable and nondiscriminatory rules and regulations applicable to all
occupants of the Project for the care and orderly management of the Project and
the safety of its tenants and invitees. Such rules and regulations shall be
binding upon Tenant upon delivery of a copy thereof to Tenant, and Tenant agrees
to abide by such rules and regulations. If there is a conflict between the
rules and regulations and any of the provisions of this Lease, the provisions of
this Lease shall prevail. Landlord shall not be responsible for the violation
by any other tenant of the Project of any such rules and regulations; provided,
however, (i) Landlord shall use commercially reasonable efforts to enforce such
rules and regulations (which reasonable efforts shall not require Landlord to
institute legal proceedings) and (ii) Landlord shall not discriminate among the
tenants in the Project in the enforcement of such rules and regulations.
4.7 Construction of Additional Improvements. Tenant acknowledges
---------------------------------------
that Landlord may from time to time construct additional improvements, including
additional buildings, on the Project. Landlord shall have the right to
construct such improvements, and, provided Landlord performs such work as set
forth below, Tenant shall not be entitled to any abatement of rent as a result
of such construction or the additional improvements, including, without
limitation, due to the noise, dust, additional traffic, additional usage of and
wear and tear on the Common Area, loss of view or disruption associated
therewith and Tenant waives any and all claims which it or its employees,
invitees, agents or contractors may have as a result thereof. The design,
location and configuration of such improvements shall be in Landlord's sole
discretion. As a result of the construction of such improvements, portions of
the Common Area, including, without limitation, parking location, configuration
and access, may be temporarily or permanently closed or modified; provided,
however, the foregoing shall be subject to the provisions of Section 6.3 hereof.
None of the foregoing shall give rise to any rights or claims by Tenant and
Tenant shall not be entitled to any compensation or abatement of any kind with
respect thereto. In the event that Landlord, in its sole discretion, elects to
include such improvements as part of the Common Area and the Project, upon
completion of such additional improvements, the Project Gross Leasable Area
shall be increased due to the square footage of the additional improvements by
an amount reasonably determined by
Facility:___________________
Landlord, and Tenant's Share shall be appropriately adjusted based on such
change to the Project Gross Leasable Area. Landlord shall use reasonable efforts
to minimize disruption to Tenant's use of the Premises as a result of such
construction (which reasonable efforts shall not require Landlord to perform
work outside of normal business hours) and shall otherwise comply with the
restrictions set forth in Section 6.3 hereof. Landlord shall have the right in
its sole discretion to sell portions of the Project or to develop portions of
the Project as separate projects, in which case such portions of the Project
shall thereafter be excluded from the term "Project" and the Project Gross
Leasable Areas shall not include any improvements located therein.
4.8 Furniture. Upon the expiration or earlier termination of this
---------
Lease, Landlord shall have the right to purchase from Tenant for One Dollar
($1.00) the office furnishings that are located within the Premises on the
Commencement Date ("Furniture"). Upon payment to Tenant of the purchase price
therefor at the expiration or earlier termination of this Lease, Tenant shall
surrender the Furniture in the Premises and convey the Furniture to Landlord by
xxxx of sale. Tenant shall maintain the Furniture in good condition and repair,
reasonable wear and tear excepted, and shall not remove any of the Furniture
from the Premises without Landlord's prior written consent.
5. Trade Fixtures and Alterations.
------------------------------
5.1 Trade Fixtures. Throughout the Lease Term, Tenant may provide
--------------
and install, and shall maintain in good condition, any Trade Fixtures required
in the conduct of its business in the Premises. All Trade Fixtures shall remain
Tenant's property.
5.2 Tenant's Alterations. Construction by Tenant of Tenant's
--------------------
Alterations shall be governed by the following:
A. Tenant shall not construct any Tenant's Alterations or
otherwise alter the Premises without Landlord's prior written approval (which
approval shall not be unreasonably withheld or delayed). Tenant shall be
entitled, without Landlord's prior approval, to make Tenant's Alterations to the
interior of the Premises (i) which are not visible from the exterior of the
Premises; (ii) which do not affect the structural or exterior parts or water
tight character of the Building or the roof, electrical or HVAC systems of the
Building, (iii) which do not reduce the value of the Premises; and (iv) the
reasonably estimated cost of which, plus the original cost of any part of the
Premises removed or materially altered in connection with such Tenant's
Alterations, together do not exceed Fifty Thousand Dollars ($50,000) per work of
improvement. In the event Landlord's approval for any Tenant's Alterations is
required, then the following shall occur: (a) Tenant shall not construct any
Tenant's Alterations until Landlord has approved in writing the plans and
specifications therefor; (b) such Tenant's Alterations shall be constructed
substantially in compliance with such approved plans and specifications by a
licensed contractor first approved by Landlord; and (c) Tenant shall pay to
Landlord within thirty (30) days following receipt of a written invoice or
statement and documentation evidencing such costs incurred by Landlord, all
reasonable costs and expenses incurred by Landlord in connection with the review
of such plans and specifications. Landlord shall approve or disapprove any
proposed Tenant's Alterations within ten (10) business days of Landlord's
receipt of the proposed plans and all information reasonably required for
Landlord to approve such Tenant's Alterations requiring Landlord's consent. With
respect to projects that cost less than One Hundred Thousand Dollars ($100,000)
(including the original cost of
Facility:___________________
any part of the Premises removed or materially altered in connection with the
proposed Tenant's Alterations) and require Landlord's consent, in the event
Landlord fails to respond within ten (10) business days of Tenant's delivery of
the proposed plans and all other information reasonably required for Landlord to
approve such Tenant's Alterations, Landlord shall be deemed to have approved of
the proposed Tenant's Alterations as described in the plans submitted to
Landlord. All Tenant's Alterations constructed by Tenant shall be constructed by
a licensed contractor in accordance with all Laws using materials of good
quality.
B. Tenant shall not commence construction of any Tenant's
Alterations until (i) all required governmental approvals and permits have been
obtained, (ii) all requirements regarding insurance imposed by this Lease have
been satisfied, (iii) Tenant has given Landlord at least five (5) days' prior
written notice of its intention to commence such construction, and (iv) if
reasonably requested by Landlord, Tenant has obtained contingent liability and
broad form builders' risk insurance in an amount reasonably satisfactory to
Landlord if there are any perils relating to the proposed construction not
covered by insurance carried pursuant to Article 9.
C. All Tenant's Alterations shall be constructed at Tenant's
sole expense and shall remain the property of Tenant during the Lease Term, but
shall not be altered or removed from the Premises. At the expiration or sooner
termination of the Lease Term, all Tenant's Alterations shall be surrendered to
Landlord as part of the realty and shall then become Landlord's property, and
Landlord shall have no obligation to reimburse Tenant for all or any portion of
the value or cost thereof; provided, however, that if Landlord requires Tenant
to remove any Tenant's Alterations, Tenant shall so remove such Tenant's
Alterations prior to the expiration or sooner termination of the Lease Term.
Notwithstanding the foregoing, Tenant shall not be obligated to remove any
Tenant's Alterations with respect to which the following is true: (i) at the
time Tenant requested Landlord's approval, Tenant requested of Landlord in
writing that Landlord inform Tenant of whether or not Landlord would require
Tenant to remove such Tenant's Alterations at the expiration of the Lease Term;
and (ii) at the time Landlord granted its approval, it did not inform Tenant
that it would require Tenant to remove such Tenant's Alterations at the
expiration of the Lease Term.
5.3 Alterations Required by Law. Tenant shall make any alteration,
---------------------------
addition or change of any sort to the Project that is required by any Law or
Private Restriction because of (i) Tenant's particular use or change of use of
the Premises during the Lease Term; (ii) Tenant's application for any permit or
governmental approval during the Lease Term; or (iii) Tenant's construction or
installation of any Tenant's Alterations or Trade Fixtures.
5.4 Mechanic's Liens. Tenant shall keep the Project free from any
----------------
liens and shall pay when due all bills arising out of any work performed,
materials furnished, or obligations incurred by Tenant or Tenant's Agents
relating to the Project. If any claim of lien is recorded (except those caused
by Landlord or Landlord's Agents), Tenant shall bond against or discharge the
same within thirty (30) days after the same has been recorded against the
Project. Should any lien be filed against the Project or any action be
commenced affecting title to the Project, the party receiving notice of such
lien or action shall immediately give the other party written notice thereof.
Facility:___________________
5.5 Taxes on Tenant's Property. Tenant shall pay before delinquency
--------------------------
any and all taxes, assessments, license fees and public charges levied, assessed
or imposed against Tenant or Tenant's estate in this Lease or the property of
Tenant situated within the Premises which become due during the Lease Term. If
any tax or other charge is assessed by any governmental agency because of the
execution of this Lease, such tax shall be paid by Tenant. Upon demand by
Landlord, Tenant shall furnish Landlord with satisfactory evidence of these
payments.
6. Repair and Maintenance.
----------------------
6.1 Tenant's Obligation to Maintain. Except as otherwise provided in
-------------------------------
Section 6.2, Section 11.1, and Section 12.3, Tenant shall maintain the Premises
in a neat and orderly condition. Tenant shall maintain in good order,
condition, and repair and replace when necessary: (i) the electrical and HVAC
systems exclusively servicing the Premises (including, without limitation, the
HVAC system serving Tenant's computer room and telephone closet) and (ii) any
additional building systems or specialized Tenant's Alterations installed by
Tenant during the Lease Term. Tenant shall also be responsible for replacement
of light bulbs and ballasts within the Premises and for the repair and
replacement of items within the Premises damaged by Tenant or Tenant's Agents,
other than normal wear and tear.
6.2 Landlord's Obligation to Maintain. Landlord shall repair,
---------------------------------
maintain and operate the Common Area and repair and maintain and replace, if
necessary, the roof, exterior and structural parts of the Building and the
mechanical, electrical, HVAC, plumbing, sewage and life safety systems in the
Building not exclusively serving the Premises, so that the same are kept in good
order, condition and repair. Landlord shall also repair, maintain and replace,
if necessary: (i) all fixtures, interior walls, floors, and ceilings (provided,
Landlord shall not be responsible for maintaining, repairing or replacing
carpets or other floor coverings); (ii) all windows, doors, entrances, plate
glass, showcases and skylights (including cleaning both interior and exterior
surfaces); and (iii) damage to the Premises (including exterior doors and
windows) caused by vandalism or any unauthorized entry. All repairs and
replacements in the Premises required of Landlord shall be promptly made with
new materials of like kind and quality. Landlord shall not be responsible for
repairs required by an accident, fire or other peril or for damage caused to any
part of the Project by any act or omission of Tenant or Tenant's Agents except
as otherwise required by Article 11. Landlord may engage contractors of its
choice to perform the obligations required of it by this Article, and the
necessity of any expenditure to perform such obligations shall be at the
reasonable discretion of Landlord.
6.3 Control of Common Area.
----------------------
A. Landlord shall at all times have exclusive control of the
Common Area. Landlord shall have the right, without the same constituting an
actual or constructive eviction and without entitling Tenant to any abatement of
rent, to: (i) close any part of the Common Area to whatever extent required in
the opinion of Landlord's counsel to prevent a dedication thereof or the accrual
of any prescriptive rights therein; (ii) temporarily close the Common Area to
perform maintenance or for any other reason deemed sufficient by Landlord; (iii)
change the shape, size, location and extent of the Common Area; (iv) eliminate
from or add to the Project and the Common Area any land or improvement,
including multi-deck parking structures; (v) make changes to the
Facility:___________________
Common Area including, without limitation, changes in the location of driveways,
entrances, passageways, doors and doorways, elevators, stairs, restrooms, exits,
parking spaces, parking areas, sidewalks or the direction of the flow of traffic
and the site of the Common Area; (vi) remove unauthorized persons from the
Project; and/or (vii) change the name or address of the Building or Project.
Tenant shall keep the Common Area clear of all obstructions created or permitted
by Tenant. If, in the opinion of Landlord, unauthorized persons are using any of
the Common Area by reason of the presence of Tenant in the Building, Tenant,
upon demand of Landlord, shall restrain such unauthorized use by appropriate
proceedings. Landlord shall have no obligation to provide guard services or
other security measures for the benefit of the Project. Tenant assumes all
responsibility for the protection of Tenant and Tenant's Agents from acts of
third parties; provided, however, that nothing contained herein shall prevent
Landlord, at its sole option, from providing security measures for the Project.
In exercising any rights regarding the Common Area, (a) Landlord shall make a
reasonable effort to minimize any disruption to Tenant's business, and (b)
except as set forth in clauses (i) and (ii) of the second sentence of this
section, Landlord shall not exercise its rights to control the Common Area in a
manner that would unreasonably interfere with Tenant's access to the Premises,
reduce or eliminate Tenant's parking rights under this Lease or unreasonably
interfere with Tenant's use or occupancy of the Premises.
B. Use of the cafeteria shall be subject to payment of the
Cafeteria Subsidy described in Section 17 and payment for food served therein.
Use of the fitness center and related pool and tennis courts and the auditorium
and meeting rooms shall be subject to payment of reasonable additional fees
therefor established from time to time by Landlord or the operator thereof.
Landlord estimates that the monthly rate for the fitness center for Tenant's
employees immediately following the Commencement Date will be $60 per month per
person. In the event that Landlord leases or otherwise licenses the operation
of the fitness center to a third party, Landlord shall require in its agreement
with such operator that such operator provide to Tenant's employees a discount
of twenty percent (20%) over the operator's then-standard charge for use of the
facility and that all of Tenant's employees that are members of the fitness
center as of the Effective Date be permitted to continue to be members of the
fitness center immediately following the Commencement Date without payment of an
initiation fee. In the event that Landlord operates the facility itself, it
shall also offer such discount and initiation fee waiver. Tenant shall have
non-exclusive access to, and non-exclusive use of, the Common Areas in common
with all other tenants, subtenants, occupants and invitees of the Project.
Subtenant's use of the Common Areas shall be on a first-come, first-serve basis
and Tenant shall have no priority or preference in its use of the Common Areas.
If Tenant wishes to use the auditorium or meeting rooms, Tenant shall coordinate
its use of such rooms with Landlord in accordance with Landlord's then-current
procedures to insure availability and make reservations. Tenant shall not have
the right to "bump" or have preference over events which have already been
booked in the auditorium or meeting rooms. Tenant hereby acknowledges and
agrees that Landlord may terminate Tenant's use of the Common Areas at any time
during the Lease Term if Landlord elects to develop or construct improvements
upon that portion of the Project, lease such portion to another tenant, limit
such portions to other tenants or otherwise eliminate such amenities; provided,
however, subject to clauses (i) and (ii) of the second sentence of Section 6.3A,
(i) Landlord shall not overburden the parking areas of the Common Area, (ii) at
all times during the Lease Term, Tenant shall be entitled to the use of Tenant's
Allocated Parking Stalls as provided in Section H of the Summary and (iii)
---------
subject to Section 17 hereof, Landlord shall not eliminate from the Common Area
or terminate Tenant's use of the cafeteria, the fitness center, the pool or the
Facility:___________________
landscaped central courtyard; provided, however, (a) Landlord shall expressly
have the right to make reasonable modifications to the foregoing and to
eliminate from the Common Areas or terminate Tenant's right to use the foregoing
in the location that exists as of the Effective Date provided Landlord provides
a comparable replacement facility in a reasonably accessible location on the
Project and (b) notwithstanding anything to the contrary herein, including the
last sentence of Section 6.3A, Landlord shall have the express right to
eliminate from the Common Area or terminate Tenant's right to use the
amphitheater, the soccerfield, the auditorium, the tennis courts, the meeting
rooms, the sundry store and the rock formation area. Among other things,
Landlord may condition the use and availability of the fitness center to
Tenant's employees upon (1) execution of agreements by Tenant and its employees
that release Landlord and its employees, agents and other representatives from
all loss or damage to the employees' property and bodily injury or death in a
form customarily used by fitness center operators, (2) compliance by Tenant's
employees with customary building security and fitness center use rules and
policies, (3) use of fitness center only during certain designated hours
applicable to all members of the fitness center, (4) the provision of insurance
(as determined by Landlord) at Tenant's expense, and (5) such other matters as
Landlord or its operator reasonably may determine. Tenant hereby acknowledges
that Landlord may lease or license to related or unrelated third party operators
certain portions of the Common Area and that Landlord may further make certain
portions of the Common Area available for use by people that are not occupants
of the Project.
7. Waste Disposal and Utilities.
----------------------------
7.1 Waste Disposal. Tenant shall store its waste either inside the
--------------
Premises or within outside trash enclosures that are designated by Landlord.
All entrances to such outside trash enclosures shall be kept closed, and waste
shall be stored in such manner as not to be visible from the exterior of such
outside enclosures. Tenant shall keep all fire corridors and mechanical
equipment rooms in the Premises free and clear of all obstructions at all times.
7.2 Hazardous Materials. Landlord and Tenant agree as follows with
-------------------
respect to the existence or use of Hazardous Materials on the Project:
A. Except as set forth in Section 7.2C below, Tenant shall not
use or permit Tenant's Agents to transport, store, treat, dispose, use or
otherwise bring onto the Project any Hazardous Materials. Without limiting the
generality of the foregoing, any handling, transportation, storage, treatment,
disposal or use of Hazardous Materials by Tenant and Tenant's Agents in or about
the Project shall strictly comply with all applicable Hazardous Materials Laws.
Tenant shall indemnify, defend upon demand with counsel reasonably acceptable to
Landlord, protect and hold harmless Landlord from and against any liabilities,
losses, claims, damages, lost profits, consequential damages, interest,
penalties, fines, monetary sanctions, attorneys' fees, experts' fees, court
costs, remediation costs, investigation costs, and other expenses which result
from or arise in any manner whatsoever out of the use, storage, treatment,
transportation, release, or disposal of Hazardous Materials on or about the
Project by Tenant or Tenant's Agents during the Lease Term. Landlord
acknowledges and agrees that Tenant shall not have any liability or obligations
under this Lease with respect to Hazardous Materials used, stored, transported,
released or disposed of on or about the Project by persons or entities other
than Tenant or Tenant's Agents.
Facility:___________________
B. If the presence of Hazardous Materials on the Project caused
or permitted by Tenant or Tenant's Agents results in contamination of the
Project, including deterioration of water or soil, then Tenant shall promptly
take any and all action necessary to investigate and remediate such
contamination. Tenant shall further be solely responsible for, and shall
defend, indemnify, protect and hold Landlord and its Agents harmless from and
against, all losses, damages, claims, costs and liabilities, including
attorneys' fees and costs, arising out of or in connection with any
investigation and remediation required hereunder to return the Project to its
condition existing prior to the appearance of such Hazardous Materials caused or
permitted by Tenant or Tenant's Agents during the Lease Term.
C. Landlord and Tenant shall each give written notice to the
other as soon as reasonably practicable of (i) any communication received from
any governmental authority concerning Hazardous Materials which relates to the
Project, and (ii) any contamination of the Project by Hazardous Materials.
Tenant may use small quantities of normal office materials such as copier toner
and cleaning fluids in order to conduct its business at the Premises. At any
time during the Lease Term, Tenant shall, within five (5) days after written
request therefor received from Landlord, disclose in writing all Hazardous
Materials that are being used by Tenant on the Project, the nature of such use,
and the manner of storage and disposal.
D. Landlord may, at Landlord's cost (except as otherwise
expressly set forth in this Section 7.2D), cause testing xxxxx to be installed
on the Project, and may cause the ground water to be tested to detect the
presence of Hazardous Material by the use of such tests as are then customarily
used for such purposes. If Tenant so requests, Landlord shall supply Tenant
with copies of such test results. The cost of such tests and the installation,
maintenance, repair and replacement of such xxxxx shall be paid by Tenant if
such tests disclose the existence of facts which give rise to liability of
Tenant pursuant to its indemnity given in Section 7.2A or Section 7.2B. Upon
request by Landlord, and on each anniversary of the Commencement Date, Tenant
shall complete and submit to Landlord the Hazardous Materials Questionnaire
attached hereto as Exhibit F, or, upon request by Landlord, Landlord's then
---------
current form.
E. As used herein, the term "Hazardous Material," means any
hazardous or toxic substance, material or waste which is or becomes regulated by
any local governmental authority, the State of California or the United States
Government. The term "Hazardous Material," includes, without limitation,
petroleum products, asbestos, PCB's, and any material or substance which is (i)
listed under Article 9 or defined as hazardous or extremely hazardous pursuant
to Article 11 of Title 22 of the California Administrative Code, Division 4,
Chapter 20, (ii) defined as a "hazardous waste" pursuant to Section 1004 of the
Federal Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq. (42
U.S.C. 6903), or (iii) defined as a "hazardous substance" pursuant to Section
101 of the Comprehensive Environmental Response, Compensation and Liability Act,
42 U.S.C. 9601 et seq. (42 U.S.C. 9601). As used herein, the term "Hazardous
Material Law" shall mean any statute, law, ordinance, or regulation of any
governmental body or agency (including, without limitation, the U.S.
Environmental Protection Agency, the California Regional Water Quality Control
Board, and the California Department of Health Services) which regulates the
use, storage, release or disposal of any Hazardous Material. The obligations of
Landlord and Tenant under this Section 7.2 shall survive the expiration or
earlier termination of the Lease Term.
Facility:___________________
7.3 Utilities. As part of Common Operating Expenses, Landlord shall
---------
furnish to the Premises (excluding the Storage Area) HVAC, electricity and water
in such amounts as Landlord reasonably determines are necessary for Tenant's use
of the Premises. Landlord shall supply HVAC to the Premises (excluding the
Storage Area) during the hours of 7 a.m. to 7 p.m. Monday through Friday (except
holidays). If Tenant desires HVAC during additional hours, then Landlord will
provide it at Tenant's cost. The cost thereof shall be equal to Landlord's
actual cost thereof plus ten percent (10%). Landlord also shall provide
janitorial services to the Premises five (5) nights per week (except holidays),
and the cost thereof shall be included in Common Operating Expenses. Utilities
and services for the Common Areas or which are provided jointly to tenants of
the Building shall be provided by Landlord as part of Common Operating Expenses.
Utilities and services that are supplied separately to the Premises shall be
charged (after the Base Year) separately to Tenant based upon Landlord's
reasonable estimate of Tenant's usage or, at Landlord's election, as measured by
a separate meter installed by Landlord at Tenant's expense. If, in Landlord's
reasonable determination, Tenant disproportionately uses any utilities or
services provided jointly to tenants of the Building, then Landlord shall have
the right to allocate to Tenant the cost of any excess usage as reasonably
calculated by Landlord. Landlord shall not be liable for any failure to provide
access to the Premises, to assure the beneficial use of the Premises or to
furnish any services or utilities when such failure is caused by natural
occurrences, riots, civil disturbances, insurrection, war, court order, public
enemy, accidents, breakage, strikes, lockouts, other labor disputes, the making
of repairs, alterations or improvements to the Premises or the Building (unless
made or undertaken by Landlord or any of its Agents in a grossly negligent or
intentionally wrongful manner), the inability to obtain an adequate supply of
fuel, gas, steam, water, electricity, communication services, labor or other
supplies or by any other condition beyond Landlord's reasonable control, and
Tenant shall not be entitled to any damages resulting from such failure, nor
shall such failure relieve Tenant of the obligation to pay all sums due
hereunder or constitute or be construed as a constructive or other eviction of
Tenant. The preceding to the contrary notwithstanding, in the event any utility
or service described in this Section 7.3 and to be provided to Tenant or the
Premises is curtailed, suspended or interrupted due to the gross negligence or
willful misconduct of Landlord or Landlord's Agents for greater than forty-eight
(48) consecutive hours, then Tenant's obligation to pay Base Monthly Rent and
Tenant's Share of Common Operating Expenses shall be abated in proportion to the
degree to which Tenant's use of the Premises is impaired thereby until such time
as such utility or service is fully restored. If any governmental entity
promulgates or revises any statute, ordinance or building, fire or other code,
or imposes mandatory or voluntary controls or guidelines on Landlord or the
Building or any part thereof, relating to the use or conservation of energy,
water, gas, steam, light, communication services or electricity or the provision
of any other utility or service provided with respect to this Lease, or if
Landlord is required or elects to make alterations to the Building in order to
comply with such mandatory or voluntary controls or guidelines, Landlord may, in
its sole discretion, comply with such mandatory or voluntary controls or
guidelines, or make such alterations to the Building. Neither such compliance
nor the making of such alterations shall in any event entitle Tenant to any
damages, relieve Tenant of the obligation to pay any of the sums due hereunder,
or constitute or be construed as a constructive or other eviction of Tenant.
Following any interruption of any services or utilities, Landlord shall use
commercially reasonable efforts to restore such services or utilities promptly,
including by use of the diesel generator located on the Project. Landlord shall
maintain, throughout the Lease Term, a diesel generator on the Project, together
with a reasonable amount of fuel to operate the generator.
Facility:___________________
7.4 Compliance with Governmental Regulations. Landlord and Tenant
----------------------------------------
shall comply with all rules, regulations and requirements promulgated by
national, state or local governmental agencies or utility suppliers concerning
the use of utility services, including any rationing, limitation or other
control. Tenant shall not be entitled to terminate this Lease nor to any
abatement in rent by reason of such compliance.
8. Common Operating Expenses.
-------------------------
8.1 Tenant's Obligation to Reimburse. As Additional Rent, Tenant
--------------------------------
shall pay Tenant's Share (specified in Section G of the Summary) of the increase
---------
in the Common Operating Expenses for each of Landlord's fiscal years or portion
thereof after the Base Year when compared to the Common Operating Expenses for
the Base Year (the "Expense Increases"). Tenant shall pay such share of the
Expense Increases incurred or paid by Landlord but not theretofore billed to
Tenant within thirty (30) days after receipt of a written xxxx therefor from
Landlord, on such periodic basis as Landlord shall designate, but in no event
more frequently than once a month. Alternatively, Landlord may from time to
time require that Tenant pay Tenant's Share of Expense Increases in advance in
estimated monthly installments, in accordance with the following: (i) Landlord
shall deliver to Tenant Landlord's reasonable estimate of the Common Operating
expenses it anticipates will be paid or incurred for the Landlord's fiscal year
in question; (ii) during such Landlord's fiscal year, Tenant shall pay Tenant's
Share of the estimated Expense Increases in advance in monthly installments as
required by Landlord due with the installments of Base Monthly Rent; and (iii)
within one hundred twenty (120) days after the end of each Landlord's fiscal
year, Landlord shall furnish to Tenant a statement in reasonable detail of the
actual Common Operating Expenses paid or incurred by Landlord during the just
ended Landlord's fiscal year and thereupon there shall be an adjustment between
Landlord and Tenant, with payment to Landlord or credit by Landlord against the
next installment of Additional Rent (or with payment to Tenant in cash if no
further installments of Additional Rent are due), as the case may require,
within thirty (30) days after delivery by Landlord to Tenant of such statement,
so that Landlord shall receive the entire amount of Tenant's Share of all
Expense Increases for such Landlord's fiscal year, and no more. Landlord may
reasonably revise its estimate of Common Operating Expenses from time to time
(but not more frequently than once in any fiscal year of Landlord), and Tenant
shall thereafter make payments on the basis of the revised estimate. Tenant
shall have the right at its expense, exercisable upon reasonable prior written
notice to Landlord, to inspect at Landlord's office during normal business hours
Landlord's books and records as they relate to Common Operating Expenses;
provided, however, if Landlord has overstated Tenant's Share of Expense
Increases by more than five percent (5%), Landlord shall pay for Tenant's
actual, reasonable out of pocket costs for such audit and inspection. Such
inspection must be within ninety (90) days of Tenant's receipt of Landlord's
annual statement for the same, and shall be limited to verification of the
charges contained in such statement. Tenant may not withhold payment of such
xxxx pending completion of such inspection. In the event that the Project is
not one hundred percent (100%) occupied during all or any portion of any fiscal
year, Landlord may make an appropriate adjustment, in accordance with industry
standards and sound management practices, of the Common Operating Expenses for
each such year to determine what the Common Operating Expenses would have been
for such year if the Project had been one hundred percent (100%) occupied, and
the amount so determined shall be deemed to be the amount of Common Operating
Expenses for such year. Common Operating Expenses for the Base Year shall be
determined based on what the Common Operating Expenses would have been for
Facility: _______________
the Base Year if the Project had been one hundred percent (100%) occupied. Such
adjustments shall be made by Landlord by increasing those costs included in the
Common Operating Expenses which, according to industry standards and sound
management practices, vary based upon the level of occupancy of the Project.
Landlord, upon notice to Tenant, may change its fiscal year from time to time to
any twelve (12) consecutive month period and, in the event of any such change,
Tenant's Share of Common Area Expenses shall be equitably adjusted for the
fiscal year involved in any such change.
8.2 Common Operating Expenses Defined. The term "Common Operating
---------------------------------
Expenses" shall mean all costs and expenses incurred by Landlord with respect to
the operation, maintenance, protection, repair and replacement of the Project,
including, without limitation, the following:
A. All costs and expenses reasonably paid or incurred by
Landlord in doing the following (including payments to independent contractors
and parties providing services related to the performance of the following): (i)
maintaining, cleaning, repairing and resurfacing the roof (including repair of
leaks) and the exterior surfaces (including painting) of all buildings located
on the Project; (ii) maintenance of the liability, fire, property damage
insurance and all other insurance carried by Landlord pursuant to Section 9.2
(including the prepayment of premiums for coverage of up to one year); (iii)
maintaining, repairing, operating and replacing when necessary HVAC equipment,
utility facilities and other building service equipment; (iv) providing HVAC,
utilities and janitorial services (including lighting, trash removal and water
for landscaping irrigation); (v) complying with all future Laws and Private
Restrictions; (vi) operating, maintaining, repairing, cleaning, painting,
restriping and resurfacing the Common Area, including, without limitation, the
existing or future waterfalls, cafeteria, fitness center, pool, tennis courts,
auditorium and meeting rooms; (vii) replacement or installation of lighting,
fixtures, directional or other signs and signals, irrigation systems, trees,
shrubs, ground cover and other plant materials, and all landscaping in the
Common Area; (viii) providing security (provided, however, that Landlord shall
not be obligated to provide security, and may discontinue security service at
any time); (ix) maintenance, repair and replacement obligations set forth in
Section 6.2; (x) modification of existing or construction of additional capital
improvements or building service equipment for the purpose of reducing the
consumption or the cost of utilities, services or Common Operating Expenses of
the Project; (xi) replacement of capital improvements or building service
equipment; and (xii) restoration of any part of the Project that has been
damaged by any peril to the extent the cost thereof is not covered by insurance
proceeds actually recovered by Landlord up to a maximum amount per occurrence of
two percent (2%) of the then replacement cost of the Project.
B. The following costs: (i) Real Property Taxes as defined in
Section 8.3; (ii) the amount of any "deductible" paid by Landlord with respect
to damage caused by any Insured Peril; (iii) the legal, accounting and other
professional services for the Project, including costs, reasonable fees and
expenses of contesting the validity or applicability of any Law relating to the
Project; and (iv) that portion of all compensation (including benefits and
premiums for workers' compensation and other insurance) paid to or on behalf of
Landlord's on-site property manager and its employees, but only to the extent
they are involved in the performance of work that is fairly allocable to the
Project; and
Facility: _______________
C. The fair market rent of the property management office
located on the Project and fees for management services rendered by either
Landlord or a third party manager engaged by Landlord (which may be a party
affiliated with Landlord); provided, however, such fee shall not exceed four
percent (4%) of the base monthly rent for the Project.
D. Notwithstanding the foregoing, Common Operating Expenses
shall not include any of the following: (i) payments on any loans or ground
leases affecting the Project; (ii) depreciation of any buildings or any major
systems of building service equipment within the Project; (iii) leasing
commissions; (iv) the cost of tenant improvements installed for the exclusive
use of other tenants of the Project; (v) capital expenditures in excess of Five
Thousand Dollars ($5,000) per item, except as set forth in Section 8.2E below;
(vi) wages, salaries, fees and fringe benefits paid to employees or officers of
Landlord above the level of property manager; (vii) increases in insurance costs
caused by the activities of the other occupants or tenants of the Project;
(viii) costs for which Landlord has a right of reimbursement from others, or
costs which Tenant pays directly to a third party; (ix) costs (a) arising from
the disproportionate use of any utility or service supplied by Landlord to any
other occupant of the Project, or (b) associated with utilities and services of
a type not provided to Tenant; (x) costs incurred in connection with
negotiations or disputes with other occupants or tenants of the Project, and
costs arising from the violation by Landlord or any occupant of the Project
(other than Tenant) of the terms and conditions of any lease or other agreement
(except for costs incurred to benefit the Project); (xi) costs incurred to
investigate the presence of any Hazardous Materials, costs to respond to any
claim of Hazardous Material contamination or damage, costs to remove any
Hazardous Material from the Premises, Building or Project or to remediate any
Hazardous Material contamination, and any judgments or other costs incurred in
connection with any Hazardous Material exposure or release; (xii) insurance
deductibles in excess of two percent (2%) of the replacement cost of the
Project; (xiii) the costs of accounting services necessary to compute the rents
and charges payable by tenants and keep the books of the Project; (xiv) any
management consulting fees (including, without limitation, fees for any outside
audit) in excess of the property management fee set forth in Section 8.2C above
(provided the salary of Landlord's on-site property manager shall not be
excluded); and (xv) premiums for earthquake insurance to the extent the premiums
exceed two (2) times the amount of the earthquake insurance premiums in the Base
Year.
E. All costs incurred by Landlord in excess of Five Thousand
Dollars ($5,000) per item that would normally be considered capital expenditures
under generally accepted accounting practices shall be amortized over the useful
life of the applicable improvement (as reasonably determined by Landlord in
accordance with generally accepted accounting principles) with interest on the
unamortized balance at the then prevailing market rate Landlord would pay if it
borrowed funds to construct such improvement from an institutional lender, and
included in Common Operating Expenses until the first to occur of the expiration
of the Lease Term (as it may be extended) or the end of the term over which such
costs were amortized. Notwithstanding the foregoing, (i) Landlord shall not be
required to amortize amounts that are Five Thousand Dollars ($5,000) or less,
and such amounts may be included in Common Operating Expenses directly; (ii) as
to costs described in Section 8.2A(x) above, the monthly amortization payment
shall not exceed the monthly amount of cost savings expected from the
modification or construction of the capital improvements made by Landlord as
described therein; and (iii) Tenant shall not be required to pay as Expense
Increases in any calendar year more than (a) Fifty Thousand Dollars ($50,000) in
amortized
Facility: _______________
capital expenditures, exclusive of amortized costs arising due to
casualty or condemnation, and (b) Fifty Thousand Dollars ($50,000) in amortized
capital expenditures arising due to casualty or condemnation.
8.3 Real Property Taxes Defined. The term "Real Property Taxes"
---------------------------
shall mean all taxes, assessments, levies, and other charges of any kind or
nature whatsoever, general and special, foreseen and unforeseen (including all
installments of principal and interest required to pay any existing or future
general or special assessments for public improvements, services or benefits,
and any increases resulting from reassessments resulting from a change in
ownership, new construction, or any other cause), now or hereafter imposed by
any governmental or quasi-governmental authority or special district having the
direct or indirect power to tax or levy assessments, which are levied or
assessed against, or with respect to the value, occupancy or use of all or any
portion of the Project (as now constructed or as may at any time hereafter be
constructed, altered, or otherwise changed) or Landlord's interest therein, the
fixtures, equipment and other property of Landlord, real or personal, that are
an integral part of and located on the Project, the gross receipts, income, or
rentals from the Project, or the use of parking areas, public utilities, or
energy within the Project, or Landlord's business of leasing the Project. If at
any time during the Lease Term, the method of taxation or assessment of the
Project prevailing as of the Effective Date shall be altered so that in lieu of
or in addition to any Real Property Tax described above there shall be levied,
assessed or imposed (whether by reason of a change in the method of taxation or
assessment, creation of a new tax or charge, or any other cause) an alternate or
additional tax or charge (i) on the value, use or occupancy of the Project or
Landlord's interest therein, or (ii) on or measured by the gross receipts,
income (but not net income of Landlord) or rentals from the Project, on
Landlord's business of leasing the Project, or computed in any manner with
respect to the operation of the Project, then any such tax or charge, however
designated, shall be included within the meaning of the term "Real Property
Taxes" for purposes of this Lease. If any Real Property Tax is based upon
property or rents unrelated to the Project, then only that part of such Real
Property Tax that is fairly allocable to the Project shall be included within
the meaning of the term "Real Property Taxes". Notwithstanding the foregoing,
the term "Real Property Taxes" shall not include estate, inheritance, transfer,
gift or franchise taxes of Landlord or the federal or state net income tax
imposed on Landlord's income from all sources, or any fine, penalty or interest
imposed solely by reason of Landlord's failure to timely pay any taxes (unless
Landlord's failure is due to Tenant's default hereunder).
9. Insurance.
---------
9.1 Tenant's Insurance. Tenant shall maintain insurance complying
------------------
with all of the following:
A. Tenant shall procure, pay for and keep in full force and
effect the following:
(1) Commercial general liability insurance, including
property damage, against liability for personal injury, bodily injury, death and
damage to property occurring in or about, or resulting from an occurrence in or
about, the Premises with combined single limit coverage of not less than the
amount of Tenant's Liability Insurance Minimum specified in Section 0
---------
Facility: _______________
of the Summary, which insurance shall contain a "contractual liability"
endorsement insuring Tenant's performance of Tenant's obligation to indemnify
Landlord contained in Section 10.3;
(2) Fire and property damage insurance in so-called "all-
risk" form insuring Tenant's Trade Fixtures and Tenant's Alterations for the
full actual replacement cost thereof; and
(3) Business interruption insurance with limits of
liability representing at least one (1) year of income, business auto liability
covering owned, non-owned and hired vehicles with a limit of not less than
$1,000,000 per accident, insurance protecting against liability under workers'
compensation laws with limits at least as required by statute, insurance for all
plate glass in the Premises, and such other insurance that is either (i)
required by any Lender, or (ii) reasonably required by Landlord and customarily
carried by tenants of comparable premises.
B. Where applicable and required by Landlord, each policy of
insurance required to be carried by Tenant pursuant to this Section 9.1: (i)
shall name Landlord and such other parties in interest as Landlord reasonably
designates as additional insured; (ii) shall be primary insurance which provides
that the insurer shall be liable for the full amount of the loss up to and
including the total amount of liability set forth in the declarations without
the right of contribution from any other insurance coverage of Landlord (it
being understood that Landlord's insurance shall provide excess coverage for
Landlord after applying Tenant's insurance); (iii) shall be in a form reasonably
satisfactory to Landlord; (iv) shall be carried with companies having as Best's
Insurance rating of at least A- VIII; (v) shall provide that such policy shall
not be subject to cancellation, lapse or material change except after at least
thirty (30) days prior written notice to Landlord; (vi) shall not have a
"deductible" in excess of such amount as is reasonably approved by Landlord;
(vii) shall contain a cross liability endorsement; and (viii) shall contain a
"severability" clause.
C. A copy of each paid-up policy evidencing the insurance
required to be carried by Tenant pursuant to this Section 9.1 (appropriately
authenticated by the insurer) or a certificate of the insurer, certifying that
such policy has been issued, providing the coverage required by this Section
9.1, and containing the provisions specified herein, shall be delivered to
Landlord prior to the Commencement Date and upon renewal of such policies, but
not less than thirty (30) days prior to the expiration of the term of such
coverage. Landlord may, at any time, and from time to time, inspect and copy
any and all insurance policies required to be procured by Tenant pursuant to
this Section 9.1. If any Lender or insurance advisor reasonably determines at
any time that the amount of coverage required for any policy of insurance Tenant
is to obtain pursuant to this Section 9.1 is not adequate, then Tenant shall
increase such coverage for such insurance to such amount as such Lender or
insurance advisor reasonably deems adequate, not to exceed the level of coverage
for such insurance commonly carried by tenants of comparable premises.
9.2 Landlord's Insurance. Landlord shall have the following
--------------------
obligations and options regarding insurance:
A. Landlord shall maintain a policy or policies of fire and
property damage insurance in so-called "all-risk" form insuring Landlord (and
such others as Landlord may designate) against loss of rents for a period of not
less than twelve (12) months and from physical
Facility: _______________
damage to the Project. Landlord may so insure the Project separately, or may
insure the Project with other property owned by Landlord which Landlord elects
to insure together under the same policy or policies. Landlord shall have the
right, but not the obligation, in its sole and absolute discretion, to obtain
insurance for such additional perils that Landlord deems appropriate, including,
without limitation, coverage for damage by earthquake and/or flood. All such
coverage shall contain "deductibles" which Landlord deems appropriate, which, in
the case of earthquake and flood insurance, may be up to ten percent (10%) of
the replacement value of the property insured or such higher amount as is then
commercially reasonable. Landlord shall not be required to cause such insurance
to cover any Trade Fixtures or Tenant's Alterations.
B. Landlord may maintain a policy or policies of commercial
general liability insurance insuring Landlord (and such others as are designated
by Landlord) against liability for personal injury, bodily injury, death and
damage to property occurring or resulting from an occurrence in, on or about the
Project, with combined single limit coverage in such amount as Landlord from
time to time determines is reasonably necessary for its protection.
9.3 Tenant's Obligation to Reimburse. If Landlord's insurance rates
--------------------------------
for the Building are increased at any time during the Lease Term as a result of
the nature of Tenant's use of the Premises or any acts of omission of Tenant or
its Agents, Tenant shall reimburse Landlord for the full amount of such increase
immediately upon receipt of a xxxx from Landlord therefor.
9.4 Release and Waiver of Subrogation. Notwithstanding anything to
---------------------------------
the contrary herein, the parties hereto release each other, and their respective
Agents, from any liability for injury to any person or damage to property that
is caused by or results from any risk insured against under any valid and
collectible insurance policy carried by either of the parties which contains a
waiver of subrogation by the insurer and is in force at the time of such injury
or damage; subject to the following limitations: (i) the foregoing provision
shall not apply to the commercial general liability insurance described by
Section 9.1A and Section 9.2B; (ii) such release shall apply to liability
resulting from any risk insured against or covered by self-insurance maintained
or provided by Tenant to satisfy the requirements of Section 9.1 to the extent
permitted by Landlord; and (iii) Tenant shall not be released from any such
liability to the extent any damages resulting from such injury or damage are not
covered by the recovery obtained by Landlord from such insurance, but only if
the insurance in question permits such partial release in connection with
obtaining a waiver of subrogation from the insurer. This release shall be in
effect only so long as the applicable insurance policy contains a clause to the
effect that this release shall not affect the right of the insured to recover
under such policy. Each party shall use reasonable efforts to cause each
insurance policy obtained by it to provide that the insurer waives all right of
recovery by way of subrogation against the other party and its Agents in
connection with any injury or damage covered by such policy. However, if any
insurance policy cannot be obtained with such a waiver of subrogation, or if
such waiver of subrogation is only available at additional cost and the party
for whose benefit the waiver is to be obtained does not pay such additional
cost, then the party obtaining such insurance shall notify the other party of
that fact and thereupon shall be relieved of the obligation to obtain such
waiver of subrogation rights from the insurer with respect to the particular
insurance involved.
Facility: _______________
10. Limitation on Landlord's Liability and Indemnity.
------------------------------------------------
10.1 Limitation on Landlord's Liability. Landlord shall not be
----------------------------------
liable to Tenant, nor shall Tenant be entitled to terminate this Lease or to any
abatement of rent (except as expressly provided otherwise under this Lease), for
any injury to Tenant or Tenant's Agents, damage to the property of Tenant or
Tenant's Agents, or loss to Tenant's business resulting from any cause,
including, without limitation, any: (i) failure, interruption or installation of
any HVAC or other utility system or service; (ii) failure to furnish or delay in
furnishing any utilities or services when such failure or delay is caused by
fire or other peril, the elements, labor disturbances of any character, or any
other accidents or other conditions beyond the reasonable control of Landlord;
(iii) limitation, curtailment, rationing or restriction on the use of water or
electricity, gas or any other form of energy or any services or utility serving
the Project; (iv) vandalism or forcible entry by unauthorized persons or the
criminal act of any person; or (v) penetration of water into or onto any portion
of the Premises or the Building through roof leaks or otherwise. Notwithstanding
the foregoing but subject to Section 9.4, Landlord shall be liable for any such
injury, damage or loss which is proximately caused by Landlord's willful
misconduct or gross negligence of which Landlord has actual notice and a
reasonable opportunity to cure but which it fails to so cure.
10.2 Limitation on Tenant's Recourse. If Landlord is a corporation,
-------------------------------
trust, partnership, limited liability company, joint venture, unincorporated
association or other form of business entity: (i) the obligations of Landlord
shall not constitute personal obligations of the officers, directors, trustees,
partners, joint venturers, members, owners, stockholders, or other principals or
representatives of such business entity; and (ii) Tenant shall not have recourse
to the assets of such officers, directors, trustees, partners, joint venturers,
members, owners, stockholders, principals or representatives. Tenant shall have
recourse only to the interest of Landlord in the Project (and insurance proceeds
actually received by Landlord) for the satisfaction of the obligations of
Landlord and shall not have recourse to any other assets of Landlord for the
satisfaction of such obligations.
10.3 Indemnification of Landlord. Tenant shall hold harmless,
---------------------------
indemnify, protect and defend Landlord, and its employees, agents and
contractors, with counsel reasonably satisfactory to Landlord from all
liability, penalties, losses, damages, costs, expenses, causes of action, claims
and judgments arising by reason of any death, bodily injury, personal injury or
property damage resulting from (i) any cause or causes whatsoever (other than
the willful misconduct or gross negligence of Landlord) occurring in or about
the Premises during the Lease Term, (ii) the negligence or willful misconduct of
Tenant or its Agents, wherever the same may occur, or (iii) an Event of Tenant's
Default. The provisions of this Section 10.3 shall survive the expiration or
sooner termination of this Lease.
11. Damage to the Premises.
----------------------
11.1 Landlord's Duty to Restore. If the Premises are damaged by any
--------------------------
peril after the Commencement Date, Landlord shall restore the Premises unless
this Lease is terminated by Landlord pursuant to Section 11.2 or by Tenant
pursuant to Section l1.3. All insurance proceeds available from the fire and
property damage insurance carried by Landlord pursuant to Section 9.2 shall be
paid to and become the property of Landlord. If this Lease is terminated
pursuant to either
Facility: _______________
Section 11.2 or Section 11.3, then all insurance proceeds available from
insurance carried by Tenant which covers loss to property that is Landlord's
property or would become Landlord's property on termination of this Lease shall
be paid to and become the property of Landlord. If this Lease is not so
terminated, then upon receipt of the insurance proceeds (if the loss is covered
by insurance) and the issuance of all necessary governmental permits, Landlord
shall commence restoration of the Premises, to the extent then allowed by Law,
to substantially the same condition in which the Premises were immediately prior
to such damage. Landlord's obligation to restore shall be limited to the
Premises and interior improvements constructed by Landlord as they existed as of
the Commencement Date, excluding any Tenant's Alterations, Trade Fixtures and/or
personal property constructed or installed by Tenant in the Premises.
11.2 Landlord's Right to Terminate. Landlord shall have the right to
-----------------------------
terminate this Lease in the event any of the following occurs, which right may
be exercised only by delivery to Tenant of a written notice of election to
terminate within thirty (30) days after the date of such damage:
A. Either the Project or the Building is damaged by an
Insured Peril to such an extent that the estimated cost to restore exceeds
thirty-three percent (33%) of the then actual replacement cost thereof;
B. Either the Project or the Building is damaged by an
Uninsured Peril to such an extent that the estimated cost to restore exceeds two
percent (2%) of the then actual replacement cost thereof; provided, however,
that Landlord may not terminate this Lease pursuant to this Section 11.2B if one
or more tenants of the Project agree in writing to pay the amount by which the
cost to restore the damage exceeds such amount and subsequently deposit such
amount with Landlord within thirty (30) days after Landlord has notified Tenant
of its election to terminate this Lease;
C. The Premises are damaged by any peril within twelve (12)
months of the last day of the Lease Term to such an extent that the estimated
cost to restore equals or exceeds an amount equal to three (3) times the Base
Monthly Rent then due; provided, however, that Landlord may not terminate this
Lease pursuant to this Section 11.2C if Tenant, at the time of such damage, has
a then valid express written option to extend the Lease Term and Tenant
exercises such option to extend the Lease Term within fifteen (15) days
following the date of such damage; or
D. Either the Project or the Building is damaged by any peril
and, because of the Laws then in force, (i) cannot be restored at reasonable
cost to substantially the same condition in which it was prior to such damage,
or (ii) cannot be used for the same use being made thereof before such damage if
restored as required by this Article.
E. As used herein, the following terms shall have the
following, meanings: (i) the term "Insured Peril" shall mean a peril actually
insured against for which the insurance proceeds actually received by Landlord
are sufficient (except for any "deductible" amount specified by such insurance)
to restore the Project under then existing building codes to the condition
existing immediately prior to the damage; and (ii) the term "Uninsured Peril"
shall mean any peril which is not an Insured Peril. Notwithstanding the
foregoing, if the "deductible" for earthquake or
Facility: _______________
flood insurance exceeds two percent (2%) of the replacement cost of the
improvements insured, such peril shall be deemed an "Uninsured Peril".
11.3 Tenant's Right to Terminate. If the Premises are damaged by any
---------------------------
peril and Landlord does not elect to terminate this Lease or is not entitled to
terminate this Lease pursuant to Section 11.2, then as soon as reasonably
practicable, Landlord shall furnish Tenant with the written opinion of
Landlord's architect or construction consultant as to when the restoration work
required of Landlord may be completed. Tenant shall have the right to terminate
this Lease in the event any of the following occurs, which right may be
exercised only by delivery to Landlord of a written notice of election to
terminate within seven (7) days after Tenant receives from Landlord the estimate
of the time needed to complete such restoration.
A. The Premises (excluding the Storage Area) are damaged by any
peril and, in the reasonable opinion of Landlord's architect or construction
consultant, the restoration of the Premises cannot be substantially completed
with twelve (12) months after the date of such damage; or
B. The Premises (excluding the Storage Area) are damaged by any
peril within twelve (12) months of the last day of the Lease Term and, in the
reasonable opinion of Landlord's architect or construction consultant, the
restoration of the Premises (excluding the Storage Area) cannot be substantially
completed within ninety (90) days after the date of such damage and such damage
renders unusable more than thirty percent (30%) of the Premises (excluding the
Storage Area).
Tenant shall also have the right to terminate this Lease in the event that
Landlord's architect or construction consultant estimates that the restoration
following damage by a peril can be completed within twelve (12) months of the
date of damage and the restoration is not substantially completed within such
twelve (12) month period. Such termination right may be exercised only by
delivery to Landlord of a written notice of election to terminate within seven
(7) days after the expiration of such twelve (12) month period.
11.4 Abatement of Rent. In the event of damage to the Premises which
-----------------
does not result in the termination of this Lease, the Base Monthly Rent and the
Additional Rent shall be temporarily abated during the period of restoration in
proportion to the degree to which Tenant's use of the Premises is impaired by
such damage. Tenant shall not be entitled to any compensation or damages from
Landlord for loss of Tenant's business or property or for any inconvenience or
annoyance caused by such damage or restoration, Tenant hereby waives the
provisions of California Civil Code Sections 1932(2) and 1933(4) and the
provisions of any similar law hereinafter enacted.
12. Condemnation.
------------
12.1 Landlord's Termination Right. Landlord shall have the right to
----------------------------
terminate this Lease if, as a result of a taking by means of the exercise of the
power of eminent domain (including a voluntary sale or transfer by Landlord to a
condemnor under threat of condemnation), (i) more than thirty percent (30%) of
the Premises (other than the Storage Area) is so taken, (ii) more than twenty
percent
Facility: _______________
(20%) of the Building Gross Leasable Area is so taken, or (iii) more
than twenty percent (20%) of the Common Area is so taken. Any such right to
terminate by Landlord must be exercised within a reasonable period of time, to
be effective as of the date possession is taken by the condemnor.
12.2 Tenant's Termination Right. Tenant shall have the right to
--------------------------
terminate this Lease if, as a result of any taking by means of the exercise of
the power of eminent domain (including any voluntary sale or transfer by
Landlord to any condemnor under threat of condemnation), (i) ten percent (10%)
or more of the Premises (other than the Storage Area) is so taken and that part
of the Premises that remains cannot be restored within a reasonable period of
time and thereby made reasonably suitable for the continued operation of the
Tenant's business, or (ii) there is a taking affecting the Common Area and, as a
result of such taking, Landlord cannot provide parking spaces within reasonable
walking distance of the Premises equal in number to at least eighty percent
(80%) of the number of spaces allocated to Tenant by Section 4.5, whether by
rearrangement of the remaining parking areas in the Common Area (including
construction of multi-deck parking structures or restriping for compact cars
where permitted by Law) or by alternative parking facilities on other land.
Tenant must exercise such right within thirty (30) days of Tenant's notice of
such taking, to be effective on the date that possession of that portion of the
Premises or Common Area that is condemned is taken by the condemnor.
12.3 Restoration and Abatement of Rent. If any part of the Premises
---------------------------------
or the Common Area is taken by condemnation and this Lease is not terminated,
then Landlord shall restore the remaining portion of the Premises and Common
Area and interior improvements constructed by Landlord as they existed as of the
Commencement Date, excluding any Tenant's Alterations, Trade Fixtures and/or
personal property constructed or installed by Tenant. Thereafter, as of the
date possession is taken, the Base Monthly Rent shall be reduced in proportion
to the degree to which Tenant's use of the Premises is impaired due to the
taking.
12.4 Temporary Taking. If any portion of the Premises is temporarily
----------------
taken for one (1) year or less, this Lease shall remain in effect. If any
portion of the Premises is temporarily taken by condemnation for a period which
exceeds one (1) year or which extends beyond the natural expiration of the Lease
Term, and such taking materially and adversely affects Tenant's ability to use
the Premises for the Permitted Use, then Tenant shall have the right to
terminate this Lease, effective on the date possession is taken by the
condemnor. To the extent this Lease remains in effect following a temporary
taking, rent shall xxxxx as set forth in Section 12.3.
12.5 Division of Condemnation Award. Any award made as a result of
------------------------------
any condemnation of the Premises or the Common Area (including by reason of a
temporary taking) shall belong to and be paid to Landlord, and Tenant hereby
assigns to Landlord all of its right, title and interest in any such award;
provided, however, that Tenant shall be entitled to receive any condemnation
award that is made directly to Tenant for the following so long as the award
made to Landlord is not thereby reduced: (i) for the taking of personal property
or Trade Fixtures belonging to Tenant; (ii) for the interruption of Tenant's
business or its moving costs; or (iii) for loss of Tenant's goodwill. The
rights of Landlord and Tenant regarding any condemnation shall be determined as
provided in this Article, and each party hereby waives the provisions of
California Code of Civil Procedure Section 1265.130 and the provisions of any
similar law hereinafter enacted
Facility: _______________
allowing either party to petition the Superior Court to terminate this Lease in
the event of a partial taking of the Premises.
13. Default and Remedies.
--------------------
13.1 Events of Tenant's Default. Tenant shall be in default of its
--------------------------
obligations under this Lease if any of the following events occurs (an "Event of
Tenant's Default"):
A. Tenant shall have failed to pay Base Monthly Rent or
Additional Rent when due, and such failure is not cured within five (5) days
after delivery of written notice from Landlord specifying such failure to pay;
or
B. Tenant shall have failed to perform any term, covenant, or
condition of this Lease except those requiring the payment of Base Monthly Rent
or Additional Rent, and Tenant shall have failed to cure such breach within
thirty (30) days after written notice from Landlord specifying the nature of
such breach where such breach could reasonably be cured within such thirty (30)
day period, or if such breach could not be reasonably cured within such thirty
(30) day period, Tenant shall have failed to commence such cure within such
thirty (30) day period and thereafter continue with due diligence to prosecute
such cure to completion within such time period as is reasonably needed, but not
to exceed one hundred eighty (180) days from the date of Landlord's notice; or
C. Tenant shall have sublet the Premises or assigned its
interest in this Lease in violation of the provisions contained in Article 14;
or
D. Tenant shall have vacated or abandoned the Premises; or
E. The occurrence of the following: (i) the making by Tenant of
any general arrangements or assignments for the benefit of creditors; (ii)
Tenant becomes a "debtor" as defined in 11 U.S.C. Section 101 or any successor
statute thereto (unless, in the case of a petition filed against Tenant, the
same is dismissed within sixty (60) days); (iii) the appointment of a trustee or
receiver to take possession of substantially all of Tenant's assets located at
the Premises or of Tenant's interest in this Lease, where possession is not
restored to Tenant within thirty (30) days; or (iv) the attachment, execution or
other judicial seizure of substantially all of Tenant's assets located at the
Premises or of Tenant's interest in this Lease, where such seizure is not
discharged within thirty (30) days; provided, however, in the event that any
provision of this Section 13.1E is contrary to any applicable Law, such
provision shall be of no force or effect; or
F. Tenant shall have failed to deliver documents required of it
pursuant to Section 18.4 or Section 18.6 within the time periods specified
therein.
13.2 Landlord's Remedies. If an Event of Tenant's Default occurs,
-------------------
Landlord shall have the following remedies, in addition to all other rights and
remedies provided by any Law or otherwise provided in this Lease, to which
Landlord may resort cumulatively or in the alternative:
A. Landlord may keep this Lease in effect and enforce by an
action at law or in equity all of its rights and remedies under this Lease,
including (i) the right to recover the rent
Facility: _______________
and other sums as they become due by appropriate legal action, (ii) the right to
make payments required of Tenant or perform Tenant's obligations and be
reimbursed by Tenant for the cost thereof with interest at the Agreed Interest
Rate from the date the sum is paid by Landlord until Landlord is reimbursed by
Tenant, and (iii) the remedies of injunctive relief and specific performance to
compel Tenant to perform its obligations under this Lease. Notwithstanding
anything to the contrary contained in this Lease, in the event of a breach of an
obligation by Tenant which results in a condition which poses an imminent danger
to safety of persons or damage to property, an unsightly condition visible from
the exterior of the Building, or a threat to insurance coverage, then if Tenant
does not cure such breach within three (3) days after delivery to it of written
notice from Landlord identifying the breach, Landlord may cure the breach of
Tenant and be reimbursed by Tenant for the cost thereof with interest at the
Agreed Interest Rate from the date the sum is paid by Landlord until Landlord is
reimbursed by Tenant.
B. Landlord may terminate this Lease by giving Tenant written
notice of termination, in which event this Lease shall terminate on the date set
forth for termination in such notice. Any termination under this Section 13.2C
shall not relieve Tenant from its obligation to pay sums then due Landlord or
from any claim against Tenant for damages or rent previously accrued or then
accruing. In no event shall any one or more of the following actions by
Landlord, in the absence of a written election by Landlord to terminate this
Lease, constitute a termination of this Lease: (i) appointment of a receiver or
keeper in order to protect Landlord's interest hereunder; (ii) acts of
maintenance or preservation or efforts to relet the Premises; or (iii) any other
action by Landlord or Landlord's Agents intended to mitigate the adverse effects
of any breach of this Lease by Tenant.
C. Landlord shall have the remedy described in California Civil
Code Section 1951.4 (Landlord may continue the Lease in effect after Tenant's
breach and abandonment and recover rent as it becomes due). In the event Tenant
breaches this Lease and abandons the Premises, this Lease shall not terminate
unless Landlord gives Tenant written notice of its election to so terminate this
Lease. No act by or on behalf of Landlord intended to mitigate the adverse
effect of such breach, including those described by Section 13.C, shall
constitute a termination of Tenant's right to possession unless Landlord gives
Tenant written notice of termination.
D. In the event Landlord terminates this Lease, Landlord shall
be entitled, at Landlord's election, to damages in an amount as set forth in
California Civil Code Section 1951.2 as in effect on the Effective Date. For
purposes of computing damages pursuant to California Civil Code Section 1951.2,
(i) an interest rate equal to the Agreed Interest Rate shall be used where
permitted, and (ii) the term "rent" includes Base Monthly Rent and Additional
Rent. Such damages shall include:
(1) The worth at the time of award of the amount by which
the unpaid rent for the balance of the term after the time of award exceeds the
amount of such rental loss that Tenant proves could be reasonably avoided,
computed by discounting such amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of award plus one percent (1%); and
Facility: ________________
(2) Any other amount necessary to compensate Landlord for
all detriment proximately caused by Tenant's failure to perform Tenant's
obligations under this Lease, or which in the ordinary course of things would be
likely to result therefrom.
E. Nothing in this Section 13.2 shall limit Landlord's right
to indemnification from Tenant as provided in Section 7.2 and Section 10.3. Any
notice given by Landlord in order to satisfy the requirements of Section 13.1A
or Section 13.1B above shall also satisfy the notice requirements of California
Code of Civil Procedure Section 1161 regarding unlawful detainer proceedings.
13.3 Waiver. One party's consent to or approval of any act by the
------
other party requiring the first party's consent or approval shall not be deemed
to waive or render unnecessary the first party's consent to or approval of any
subsequent similar act by the other party. The receipt by Landlord of any rent
or payment with or without knowledge of the breach of any other provision hereof
shall not be deemed a waiver of any such breach unless such waiver is in writing
and signed by Landlord. No delay or omission in the exercise of any right or
remedy accruing to either party upon any breach by the other party under this
Lease shall impair such right or remedy or be construed as a waiver of any such
breach theretofore or thereafter occurring. The waiver by either party of any
breach of any provision of this Lease shall not be deemed to be a waiver of any
subsequent breach of the same or of any other provisions herein contained.
13.4 Limitation on Exercise of Rights. At any time that an Event of
--------------------------------
Tenant's Default has occurred and remains uncured, (i) it shall not be
unreasonable for Landlord to deny or withhold any consent or approval requested
of it by Tenant which Landlord would otherwise be obligated to give, and (ii)
Tenant may not exercise any option to extend or expand, right to terminate this
Lease, or other right granted to it by this Lease which would otherwise be
available to it.
13.5 Waiver by Tenant of Certain Remedies. Tenant waives the
------------------------------------
provisions of Sections 1932(l), 1941 and 1942 of the California Civil Code and
any similar or successor law regarding Tenant's right to terminate this Lease or
to make repairs and deduct the expenses of such repairs from the rent due under
this Lease. Tenant hereby waives any right of redemption or relief from
forfeiture under the laws of the State of California, or under any other present
or future law, including the provisions of Sections 1174 and 1179 of the
California Code of Civil Procedure.
14. Assignment and Subletting.
-------------------------
14.1 Transfer by Tenant. The following provisions shall apply to any
------------------
assignment, subletting or other transfer by Tenant or any subtenant or assignee
or other successor in interest of the original Tenant (collectively referred to
in this Section 14.1 as "Tenant"):
A. Tenant shall not do any of the following (collectively
referred to herein as a "Transfer"), whether voluntarily, involuntarily or by
operation of law, without the prior written consent of Landlord, which consent
shall not be unreasonably withheld: (i) sublet all or any part of the Premises
or allow it to be sublet, licensed, shared, occupied or used by any person or
entity other than Tenant; (ii) assign its interest in this Lease; (iii)
mortgage, hypothecate or encumber this Lease (or otherwise use this Lease as a
security device) in any manner; or (iv) materially amend
Facility: ________________
or modify an assignment, sublease or other transfer that has been previously
approved by Landlord, including consent to a future Transfer of the Premises by
a subtenant, assignee or other transferee. Tenant shall reimburse Landlord for
all reasonable costs and attorneys' fees incurred by Landlord in connection with
the evaluation, processing, and/or documentation of any requested Transfer,
whether or not Landlord's consent is granted. Landlord's reasonable costs shall
include the cost of any review or investigation performed by Landlord or
consultant acting on Landlord's behalf of (a) Hazardous Materials (as defined in
Section 7.2E of this Lease) used, stored, released, or disposed of by the
potential subtenant or assignee, and/or (b) violations of Hazardous Materials
Law (as defined in Section 7.2E of this Lease) by Tenant or the proposed
subtenant or assignee. Any Transfer so approved by Landlord shall not be
effective until Tenant has delivered to Landlord an executed counterpart of the
document evidencing the Transfer which (1) is in a form reasonably approved by
Landlord, (2) contains the same terms and conditions as stated in Tenant's
notice given to Landlord pursuant to Section 14.1B, and (3) in the case of an
assignment of this Lease, contains the agreement of the proposed transferee to
assume all obligations of Tenant under this Lease arising after the effective
date of such Transfer and to remain jointly and severally liable therefor with
Tenant. Any attempted Transfer without Landlord's consent shall constitute an
Event of Tenant's Default and shall be voidable at Landlord's option. Landlord's
consent to any one Transfer shall not constitute a waiver of the provisions of
this Section 14.1 as to any subsequent Transfer or a consent to any subsequent
Transfer. No Transfer, even with the consent of Landlord, shall relieve Tenant
of its personal and primary obligation to pay the rent and to perform all of the
other obligations to be performed by Tenant hereunder. The acceptance of rent by
Landlord from any person shall not be deemed to be a waiver by Landlord of any
provision of this Lease nor to be a consent to any Transfer.
B. At least twenty (20) days before a proposed Transfer is to
become effective, Tenant shall give Landlord written notice of the proposed
terms of such Transfer and request Landlord's approval, which notice shall
include the following: (i) the name and legal composition of the proposed
transferee; (ii) a current financial statement of the transferee, financial
statements of the transferee covering the preceding three (3) years if the same
exist, and (if available) an audited financial statement of the transferee for a
period ending not more than one (1) year prior to the proposed effective date of
the Transfer, all of which statements shall be prepared in accordance with
generally accepted accounting principles; (iii) the nature of the proposed
transferee's business to be carried on in the Premises; (iv) all consideration
to be given on account of the Transfer; and (v) an accurately filled out
response to Landlord's standard Hazardous Materials Questionnaire. Tenant shall
provide to Landlord such other information as may be reasonably requested by
Landlord within seven (7) days after Landlord's receipt of such notice from
Tenant. Landlord shall respond in writing to Tenant's request for Landlord's
consent to a Transfer within the later of (a) twenty (20) days of receipt of
such request together with the required accompanying documentation, or (b)
fifteen (15) days after Landlord's receipt of all information which Landlord
reasonably requests after it receives Tenant's first notice regarding the
Transfer in question. If Landlord fails to respond in writing within such
period, Landlord will be deemed to have withheld consent to such Transfer.
Tenant shall immediately notify Landlord of any material modification to the
proposed terms of such Transfer, which shall also be subject Landlord's consent
in accordance with the same process for obtaining Landlord's initial consent to
such Transfer. The parties hereby acknowledge that it shall not be reasonable
for Landlord to withhold consent to a proposed Transfer of less than 25,000
square feet of space (which square footage shall be reduced by the square
footage
Facility: ________________
of the Premises then subject to a Transfer to a tenant having a net worth of
less than Tenant at that time) solely because the proposed transferee has a net
worth of less than that of Tenant at the time.
C. Notwithstanding anything to the contrary herein, Landlord
may withhold its consent to any proposed Transfer in its sole and absolute
discretion (i) if the Transfer is at less than fair market rates, as reasonably
determined by Landlord or (ii) if the Transfer is proposed before the earlier of
the following to occur: (a) the second anniversary of the Commencement Date; or
(b) at least ninety-five percent (95%) of the portion of the Project not leased
by Tenant is leased by Landlord to tenants and occupied by tenants.
D. If Landlord consents to a Transfer proposed by Tenant,
Tenant may enter into such Transfer, and if Tenant does so, the following shall
apply:
(1) Tenant shall not be released of its liability for the
performance of all of its obligations under this Lease.
(2) If Tenant assigns its interest in this Lease, then
Tenant shall pay to Landlord fifty percent (50%) of all Subrent (as defined in
Section 14.1D(5)) received by Tenant related to such assignment. In the case of
an assignment, the amount of Subrent owed to Landlord shall be paid to Landlord
on the same basis, whether periodic or in lump sum, that such Subrent is paid to
Tenant by the assignee.
(3) If Tenant sublets any part of the Premises, then with
respect to the space to be subleased, Tenant shall pay to Landlord fifty percent
(50%) of the positive difference, if any, between (i) all Subrent paid by the
subtenant to Tenant, less (ii) the sum of all Base Monthly Rent and Additional
Rent allocable to the space sublet. Such amount shall be paid to Landlord on the
same basis, whether periodic or in lump sum, that such Subrent is paid to Tenant
by its subtenant.
(4) Tenant's obligations under this Section 14.1D shall
survive any Transfer, and Tenant's failure to perform its obligations hereunder
shall be an Event of Tenant's Default. At the time Tenant makes any payment to
Landlord required by this Section 14.1D, Tenant shall deliver an itemized
statement of the method by which the amount to which Landlord is entitled was
calculated, certified by Tenant as true and correct. Landlord shall have the
right at reasonable intervals to inspect Tenant's books and records relating to
the payments due hereunder. Upon request therefor, Tenant shall deliver to
Landlord copies of all bills, invoices or other documents upon which its
calculations are based. Landlord may condition its approval of any Transfer upon
obtaining a certification from both Tenant and the proposed transferee of all
Subrent and other amounts that are to be paid to Tenant in connection with such
Transfer.
(5) As used in this Section 14.1D, the term "Subrent" shall
mean any consideration of any kind received, or to be received, by Tenant as a
result of the Transfer, if such sums are related to Tenant's interest in this
Lease or in the Premises, including payments from or on behalf of the transferee
(in excess of the book value thereof) for Tenant's assets, fixtures, leasehold
improvements, inventory, accounts, goodwill, equipment, furniture, and general
intangibles.
Facility: ________________
E. If Tenant is a corporation, the following shall be deemed
a voluntary assignment of Tenant's interest in this Lease: (i) any dissolution,
merger, consolidation, or other reorganization of or affecting Tenant, whether
or not Tenant is the surviving corporation; (ii) the sale or transfer to one
person or entity (or to any group of related persons or entities) stock
possessing more than fifty percent (50%) of the total combined voting power of
all classes of Tenant's capital stock issued, outstanding and entitled to vote
for the election of directors; and (iii) the sale of substantially all of
Tenant's assets located at the Premises. If Tenant is a partnership, limited
liability company or other entity, any withdrawal or substitution (whether
voluntary, involuntary or by operation of law, and whether occurring at one time
or over a period of time) of any partner, member or other party owning twenty-
five percent (25%) or more (cumulatively) of any interest in the capital or
profits of the partnership, limited liability company or other entity or the
dissolution of the partnership, limited liability company or other entity shall
be deemed a voluntary assignment of Tenant's interest in this Lease.
F. Notwithstanding anything contained in Section 14.1, so
long as Tenant otherwise complies with the provisions of Section 14.1, Tenant
may enter into any of the following Transfers without Landlord's prior written
consent, and Landlord shall not be entitled to receive any part of any Subrent
resulting therefrom that would otherwise be due it pursuant to Section 14.1D:
(1) Tenant may sublease all or part of the Premises or
assign its interest in this Lease to any corporation which controls, is
controlled by, or is under common control with Tenant by means of an ownership
interest of more than fifty percent (50%);
(2) Tenant may assign its interest in this Lease to a
corporation which results from a merger, consolidation or other reorganization,
so long as the surviving corporation has a net worth at the time of such
assignment that is equal to or greater than the net worth of Tenant as of the
Effective Date; and
(3) Tenant may assign this Lease to a corporation which
purchases or otherwise acquires all or substantially all of the stock or assets
of Tenant, so long as such acquiring corporation has a net worth at the time of
such assignment that is equal to or greater than the net worth of Tenant as of
the Effective Date.
14.2 Transfer By Landlord. Landlord and its successors in interest
--------------------
shall have the right to transfer their interest in this Lease and the Project at
any time and to any person or entity. In the event of any such transfer, the
Landlord originally named herein (and, in the case of any subsequent transfer,
the transferor) from the date of such transfer, shall be automatically relieved,
without any further act by any person or entity, of all liability for the
performance of the obligations of the Landlord hereunder which may accrue after
the date of such transfer, provided Landlord's transferee assumes in writing all
of Landlord's obligations under this Lease occurring from and after the date of
such transfer. After the date of any such transfer, the term "Landlord" as used
herein shall mean the transferee of such interest in the Premises.
Facility: ________________
15. Option to Expand.
----------------
15.1 Expansion Right. If Tenant is not in default of any term or
---------------
provision of this Lease and has not assigned this Lease or sublet any space
covered thereby or agreed to do so in the future, Tenant shall have the right
(the "Expansion Option") only during the first (1st) year following the
Commencement Date to expand into any or all of the three (3) additional spaces
in the Building shown on Exhibit D hereto consisting of Module X-0 (xxxx xxxxx),
---------
X-0 and B-3, and consisting of a total of 48,207 square feet (each, an
"Expansion Space") solely in accordance with the terms of this section, and
subject to the following conditions:
(i) The Expansion Option shall be exercised, if at all, by
written notice of exercise delivered to Landlord by Tenant during the period
from the Effective Date to the end of the eleventh (11/th/) month of the Lease
Term, which notice shall identify which of the Expansion Spaces are the subject
of the notice.
(ii) Tenant shall accept the Expansion Space on an "AS-IS"
basis.
(iii) Anything herein to the contrary notwithstanding, if
Tenant is in default (following the expiration of any applicable cure or grace
period) under any of the terms, covenants or conditions of this Lease, either at
the time Tenant exercises the Expansion Option or at any time thereafter prior
to or upon the Expansion Effective Date (defined below), Landlord shall have, in
addition to all of Landlord's other rights and remedies provided in this Lease,
the right to terminate the Expansion Option upon notice to Tenant.
(iv) Tenant shall have the right to exercise the Expansion
Option as to any of the three (3) additional spaces shown on Exhibit D hereto,
---------
but not as to a portion or less than all of any of the three (3) additional
spaces shown thereon.
15.2 Effect of Exercise of Option. In the event the Expansion Option
----------------------------
is exercised in a valid and timely fashion, the applicable Expansion Space shall
be included as part of the "Premises" on the thirtieth (30th) day following
Tenant's exercise of the Expansion Option (the "Expansion Effective Date"). In
the event that Tenant exercised the Expansion Option as to all of the Expansion
Space, as of the Expansion Effective Date, (i) Base Monthly Rent due to the
addition of the Expansion Space shall be increased by One Hundred Fifteen
Thousand Six Hundred Ninety-Six and 80/100 Dollars ($115,696.80) per month
during the first year of the Lease Term, which amount shall increase by three
percent (3%) per year on each anniversary of the Commencement Date, (ii) the
square footage of the Premises shall be increased by 48,207 square feet, (iii)
Tenant's Share shall be increased by 13.2%, (iv) Tenant's Allocated Parking
Stalls shall be increased by 145, and (v) the Security Deposit shall be
increased by One Million Three Hundred Eighty-Eight Thousand Three Hundred
Sixty-One and 60/100 Dollars ($1,388,361.60). In the event that Tenant
exercised the Expansion Option as to only one (1) or two (2) of the Expansion
Spaces, as of the Expansion Effective Date, the Base Monthly Rent, square
footage of the Premises, Tenant's Share, Tenant's Allocated Parking Stalls and
the Security Deposit shall be increased as set forth in the preceding sentence
on a pro rata basis based on the ratio of the square footage of the subject
Expansion Space to 48,207.
Facility: ________________
15.3 Non-Exclusive Option. Notwithstanding anything to the contrary
--------------------
herein, if Landlord makes or receives in the first eleven (11) months of the
Lease Term a written offer to lease any of the Expansion Spaces from a third
party, Landlord shall have the right to notify Tenant in writing of such offer.
If Tenant fails to validly exercise the Expansion Option as provided in this
Section 15 within ten (10) days thereafter, (i) Landlord shall be free to lease
such Expansion Space to any other party on such terms as Landlord may elect in
its sole discretion and (ii) the Expansion Option as to such Expansion Space and
Tenant's right to lease such Expansion Space shall automatically lapse and be of
no further force and effect.
15.4 Effect of Non-Exercise or Partial Exercise. If Tenant does not
------------------------------------------
timely and validly exercise the Expansion Option, (i) Landlord shall be free to
lease the Expansion Space to any other party on such terms as Landlord may elect
in its sole discretion and (ii) the Expansion Option and Tenant's right to lease
any or all of the Expansion Space shall automatically lapse and be of no further
force and effect.
16. Option to Extend.
----------------
16.1 Extension Right. If Tenant is not in default (following any
---------------
applicable cure or grace period) of any term or provision of this Lease and has
not assigned this Lease (other than to an entity as described in Section 14.1G)
or sublet more than fifty percent (50%) of the Premises or agreed to do so in
the future, Tenant shall have two (2) options (the "Extension Options") to
extend the Lease Term with respect to the entirety of the Premises each for an
additional period of five (5) years commencing when the then-existing Lease Term
expires (the "Extension Period"), solely in accordance with the terms of this
section, and subject to the following conditions:
(i) Each Extension Option shall be exercised, if at all, by
written notice of exercise delivered to Landlord by Tenant not more than fifteen
(15) months nor less than twelve (12) months prior to the expiration of the
then-existing Lease Term.
(ii) Tenant shall accept the Premises on an "AS-IS" basis.
(iii) Anything herein to the contrary notwithstanding, if
Tenant is in default (following any applicable cure or grace period) under any
of the terms, covenants or conditions of this Lease, either at the time Tenant
exercises the applicable Extension Option or at any time thereafter prior to or
upon the commencement date of the applicable Extension Period, Landlord shall
have, in addition to all of Landlord's other rights and remedies provided in
this Lease, the right to terminate the applicable Extension Option upon notice
to Tenant.
(iv) Tenant may not exercise the second Extension Option (a)
unless the first Extension Option was properly exercised and (b) until fifteen
(15) months prior to the expiration of the Lease Term, as extended by the first
Extension Option.
16.2 Rent During Extension Period. In the event an applicable
----------------------------
Extension Option is exercised in a valid and timely fashion, the Lease Term
shall be extended for the term of the applicable Extension Period upon all of
the terms and conditions of this Lease, provided that (i) the Base Monthly Rent
for the Extension Period shall be the greater of the Base Monthly Rent for the
Facility: ________________
last month of the then-existing Lease Term or the "Fair Market Rent" for the
Premises for the applicable Extension Term, as determined as set forth below,
and (ii) the Base Year for Common Operating Expenses for each Extension Period
shall be the calendar year in which the applicable Extension Period commences.
For purposes hereof, "Fair Market Rent" shall mean the then prevailing fair
market monthly rental rate for the Premises, including applicable rent
escalations, based on a "full service" lease of space of similar age,
construction, size, level of improvement and location as the Premises.
16.3 Landlord's Estimate of Rent. Not later than six (6) months prior
---------------------------
the expiration of the then-existing Lease Term, Landlord shall notify Tenant in
writing of Landlord's estimate of the Base Monthly Rent for the applicable
Extension Period. Within thirty (30) days after receipt of such notice from
Landlord, Tenant shall have the right either to (a) accept Landlord's statement
of Fair Market Rent as the Base Monthly Rent for the applicable Extension
Period; or (b) elect to determine the Fair Market Rent pursuant to an appraisal
process to be conducted pursuant to the provisions of Section 16.4 below.
Failure on the part of Tenant to elect such appraisal process within such thirty
(30) day period shall constitute acceptance of the Base Monthly Rent for the
applicable Extension Period as calculated by Landlord. If Tenant elects to
determinate the Fair Market Rent pursuant to the appraisal process, if the
appraisal has not been completed prior to the expiration of the then-existing
Lease Term, Tenant shall pay Base Monthly Rent at the rate calculated by
Landlord, with an adjustment to be made once Fair Market Rent is ultimately
determined by such appraisal.
16.4 Approved Process. In the event that Tenant elects to determine
----------------
the Fair Market Rent for the applicable Extension Period pursuant to an
appraisal process, the appraisal shall be conducted as follows:
A. Tenant shall make a demand for an appraisal in writing
within thirty (30) days after delivery of Landlord's determination of Fair
Market Rent given under Section 16.3 above, specifying therein the name and
address of the person to act as the appraiser on its behalf. The appraiser shall
be qualified as a real estate appraiser (and shall be a member of the Appraisal
Institute (MAI) or any comparable successor organization) with at least ten (10)
years professional experience and shall be familiar with the rental value of
first-class commercial office space in Santa Xxxxx and Santa Xxxx Counties.
Failure on the part of Tenant to make a proper demand and appointment in a
timely manner for such appraisal shall constitute a waiver of the right thereto.
Within fifteen (15) days after the service of the demand for such appraisal,
Landlord shall give notice to Tenant, specifying the name and address of the
person designated by Landlord to act as the appraiser on its behalf who shall be
similarly qualified.
B. The appraisers shall appoint a third appraiser, who shall be
a competent and impartial person with qualifications similar to those required
of the first two appraisers pursuant to Section 16.4A above. In the event they
are unable to agree upon such appointment within seven (7) days after expiration
of such fifteen (15) day period, the third appraiser shall be appointed by the
then presiding judge of county in which the Premises are located upon
application by either party.
C. The appraisers shall meet not later than fifteen (15) days
following the selection of the last appraiser. At such meeting, the appraisers
shall attempt to determine the Fair
Facility: ________________
Market Rent for the Premises for the applicable Extension Period by the
agreement of at least two (2) of the appraisers. If two (2) or more of the
appraisers agree on the Fair Market Rent for the Premises at the initial
meeting, such agreement shall be determinative and binding upon the parties
hereto and the agreeing appraisers shall, in simple letter form executed by the
agreeing appraisers, forthwith notify both Landlord and Tenant of the amount set
by such agreement. If two (2) appraisers are unable to agree on the Fair Market
Rent for the Premises, all appraisers shall submit to Landlord and Tenant an
independent appraisal of the Fair Market Rent for the Premises in simple letter
form within thirty (30) days following appointment of the final appraiser. The
parties shall then determine the Fair Market Rent for the Premises by averaging
the appraisals; provided that any high or low appraisal, differing from the
middle appraisal by more than ten percent (10%) of the middle appraisal, shall
be disregarded in calculating the average.
D. In the event of a failure, refusal or inability of any
appraiser to act, his or her successor shall be appointed by the party that
appointed such appraiser, but in the case of the third appraiser, his or her
successor shall be appointed in the same manner as provided for appointment of
the third appraiser. Each party shall pay the fee and expenses of its respective
appraiser and both shall share the fee and expenses of the third appraiser.
17. Cafeteria Subsidy.
-----------------
A. On the first day of each month throughout the Lease Term,
together with the payment of Base Monthly Rent, Tenant shall pay to Landlord a
fee equal to Six and 75/100 Dollars ($6.75) per month for each employee,
temporary employee, independent contractor or other person working for Tenant or
its affiliates, assignees or subtenants on the Premises, excluding outside third
party service providers (collectively, as used in this section, "employees")
during the upcoming month (the "Cafeteria Subsidy"). On each anniversary of the
Commencement Date, the Cafeteria Subsidy shall be adjusted to equal the product
of Six and 75/100 Dollars ($6.75) per employee multiplied by a fraction, the
numerator of which is the Consumer Price Index published for the month
immediately preceding the anniversary of the Commencement Date in question and
the denominator of which is the Consumer Price Index published for the month
immediately preceding the Commencement Date. Together with such payment in
March, June, September and December of each year, Tenant shall deliver to
Landlord evidence reasonably acceptable to Landlord of the number of employees
for such month. Tenant may terminate payment of the Cafeteria Subsidy once the
cafeteria on the Project "breaks even" or shows a profit in accordance with
generally accepted accounting principles for twelve (12) consecutive months
during the Lease Term or the third (3/rd/) anniversary of the Commencement Date,
whichever is earlier. Notwithstanding the foregoing, in the event the cafeteria
fails to show a profit in accordance with generally accepted accounting
principles for twelve (12) consecutive months at any time following Tenant's
termination of the Cafeteria Subsidy payments as set forth in the preceding
sentence if during such twelve (12) month period the average occupancy level of
the Project was seventy percent (70%) or less, Tenant shall within ten (10) days
of written notice from Landlord (i) waive in writing Landlord's obligation to
maintain the cafeteria or (ii) agree in writing to commence making the Cafeteria
Subsidy payments until the cafeteria is again profitable as set forth in the
preceding sentence, at which time the terms of the preceding sentence (other
than the reference to the third (3/rd/) anniversary of the Commencement Date)
and this sentence shall again be applicable. In the event Tenant waives
Landlord's obligation to maintain the cafeteria, then, notwithstanding anything
to the contrary herein, thereafter Landlord
Facility: ________________
shall be free to close the cafeteria at any time, including leasing the
cafeteria to another tenant in the Project for use as a cafeteria or otherwise.
Each quarter during the period in which Tenant is paying the Cafeteria Subsidy,
Landlord shall deliver to Tenant a statement showing the revenues generated or
received and expenses paid or incurred by Landlord with respect to the operation
of the cafeteria for the applicable quarter, and showing the cumulative amount
of profit or loss generated or incurred by Landlord from the operation of the
cafeteria for the prior twelve (12) month period (or lesser period if twelve
(12) months have not expired from the date of the commencement of this Lease).
During such period as Tenant is obligated under this Lease to pay the Cafeteria
Subsidy, Tenant shall have a right to review Landlord's books and records upon
reasonable prior notice to Landlord to determine whether the cafeteria on the
Project "breaks even" or shows a profit in accordance with generally accepted
accounting principles for twelve (12) consecutive months during the Lease Term.
B. The term "Consumer Price Index" shall mean the Consumer
Price Index, for All Urban Consumers, Subgroup "All Items", for the San
Francisco-Oakland-San Xxxx Metropolitan Area (Base Year 1982-84=100), which is
currently being published by the United States Department of Labor, Bureau of
Labor Statistics. If, however, this Consumer Price Index is changed so that the
base year is altered from that used as of the Commencement Date, then the
Consumer Price Index shall be converted in accordance with the conversion factor
published by the United States Department of Labor, Bureau of Labor Statistics,
to obtain the same results that would have been obtained had the base year not
been changed. If no conversion factor is available or if the Consumer Price
Index is otherwise changed, revised or discontinued for any reason, there shall
be substituted in lieu thereof and the term "Consumer Price Index" shall
thereafter refer to the most nearly comparable official price index of the
United States Government to obtain substantially the same result as would have
been obtained had the original Consumer Price Index not been changed, revised or
discontinued, which alternative index shall be selected by Landlord.
18. General Provisions.
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18.1 Landlord's Right to Enter. Landlord and its Agents may enter the
-------------------------
Premises at any reasonable time after giving at least twenty-four (24) hours'
prior notice to Tenant (and immediately in the case of emergency) for the
purpose of: (i) inspecting the same; (ii) posting notices of non-responsibility;
(iii) supplying any service to be provided by Landlord to Tenant; (iv) showing
the Premises to prospective purchasers, mortgagees or tenants; (v) making
necessary alterations, additions or repairs; (vi) performing Tenant's
obligations when Tenant has failed to do so after written notice from Landlord;
(vii) placing upon the Premises ordinary "for lease" signs or "for sale" signs;
and (viii) responding to an emergency. Landlord shall have the right to use any
and all means Landlord may deem necessary and proper to enter the Premises in an
emergency. Any entry into the Premises obtained by Landlord in accordance with
this section shall not be a forcible or unlawful entry into, or a detainer of,
the Premises, or an eviction, actual or constructive, of Tenant from the
Premises.
18.2 Surrender of the Premises. Upon the expiration or sooner
-------------------------
termination of this Lease, Tenant shall vacate and surrender the Premises to
Landlord in the same condition as existed at the Commencement Date, except for
(i) reasonable wear and tear, (ii) damage caused by any peril or condemnation,
and (iii) contamination by Hazardous Materials for which Tenant is not
responsible pursuant to Section 7.2A or Section 7.2B. In this regard, normal
wear and tear shall be
Facility: ________________
construed to mean wear and tear caused to the Premises by the natural aging
process which occurs in spite of prudent application of commercially reasonable
standards for maintenance, repair and janitorial practices, and does not include
items of neglected or deferred maintenance. If Landlord so requests, Tenant
shall, prior to the expiration or sooner termination of this Lease, (1) remove
any Tenant's Alterations which Tenant is required to remove pursuant to Section
5.2 and repair all damage caused by such removal, and (2) return the Premises or
any part thereof to its original configuration existing as of the time the
Premises were delivered to Tenant. If the Premises are not so surrendered at the
termination of this Lease, Tenant shall be liable to Landlord for all costs
incurred by Landlord in returning the Premises to the required condition, plus
interest on all costs incurred at the Agreed Interest Rate. Tenant shall
indemnify, defend, protect and hold harmless Landlord against loss, costs,
claims, damage or liability resulting from delay by Tenant in so surrendering
the Premises, including, without limitation, any claims made by any succeeding
tenant or losses to Landlord due to lost opportunities to lease to succeeding
tenants.
18.3 Holding Over. This Lease shall terminate without further notice
------------
at the expiration of the Lease Term. Any holding over by Tenant after
expiration of the Lease Term shall not constitute a renewal or extension of this
Lease or give Tenant any rights in or to the Premises except as expressly
provided in this Lease. Any holding over after such expiration without the
written consent of Landlord shall be construed to be a tenancy at sufferance on
the same terms and conditions herein specified insofar as applicable except that
Base Monthly Rent shall be increased to an amount equal to one hundred fifty
percent (150%) of the greater of (i) the rent payable during the last full
calendar month of the Lease Term and (ii) the then prevailing fair market rent.
18.4 Subordination. The following provisions shall govern the
-------------
relationship of this Lease to any Security Instrument:
A. This Lease is subject and subordinate to all Security
Instruments existing as of the Effective Date. However, if any Lender so
requires, this Lease shall become prior and superior to any such Security
Instrument. On or prior to the Commencement Date, Tenant shall provide Landlord
with a Subordination Agreement substantially in the form of Exhibit E signed by
---------
Tenant.
B. At Landlord's election, this Lease shall become subject and
subordinate to any Security Instrument created after the Effective Date so long
as Tenant is granted non-disturbance rights by the holder of the Security
Instrument. Notwithstanding such subordination, Tenant's right to quiet
possession of the Premises and all other rights under this Lease shall not be
disturbed or interfered with so long as Tenant is not in default and performs
all of its obligations under this Lease, unless this Lease is otherwise
terminated pursuant to its terms.
C. The foregoing agreements shall be effective without the
execution of additional documents; provided, however, Tenant shall upon request
execute the subordination agreement in the form attached hereto as Exhibit E or
---------
any document or instrument reasonably required by any Lender to make this Lease
either prior or subordinate to a Security Instrument, which may include such
other matters as the Lender customarily and reasonably requires in connection
with such agreements, including provisions that the Lender not be liable for (i)
the return of any security deposit unless the Lender receives it from Landlord,
and (ii) any defaults on the part
Facility:_______________
of Landlord occurring prior to the time the Lender takes possession of the
Project in connection with the enforcement of its Security Instrument. Tenant's
failure to execute any such document or instrument within fifteen (15) days
after written demand therefor shall constitute an Event of Tenant's Default.
Tenant approves as reasonable the form of subordination agreement attached to
this Lease as Exhibit E.
---------
18.5 Mortgagee Protection and Attornment. In the event of any default
-----------------------------------
on the part of the Landlord, Tenant will give notice by certified mail to any
Lender whose name has been provided to Tenant and shall offer such Lender a
reasonable opportunity to cure the default, including time to obtain possession
of the Premises by power of sale or judicial foreclosure or other appropriate
legal proceedings, if such should prove necessary to effect a cure. Tenant
shall attorn to any purchaser of the Premises at any foreclosure sale or private
sale conducted pursuant to any Security Instrument encumbering the Premises, or
to any grantee or transferee designated in any deed given in lieu of
foreclosure.
18.6 Estoppel Certificates and Financial Statements. At all times
----------------------------------------------
during the Lease Term, each party agrees, following any request by the other
party, promptly to execute and deliver to the requesting party within fifteen
(15) days following delivery of such request an estoppel certificate (i)
certifying that this Lease is unmodified and in full force and effect or, if
modified, stating the nature of such modification and certifying that this
Lease, as so modified, is in full force and effect, (ii) stating the date to
which the rent and other charges are paid in advance, if any, (iii)
acknowledging that there are not, to the certifying party's knowledge, any
uncured defaults on the part of any party hereunder or, if there are uncured
defaults, specifying the nature of such defaults, and (iv) certifying such other
information about this Lease as may be reasonably required by the requesting
party. A failure to deliver an estoppel certificate within fifteen (15) days
after delivery of a request therefor shall be a conclusive admission that, as of
the date of the request for such statement: (a) this Lease is unmodified except
as may be represented by the requesting party in said request and is in full
force and effect; (b) there are no uncured defaults in the requesting party's
performance; and (c) no rent has been paid more than thirty (30) days in
advance. If at such time, Tenant's stock is not publicly traded in the United
States, any time during the Lease Term Tenant shall, upon fifteen (15) days'
prior written notice from Landlord, provide Tenant's most recent financial
statement and financial statements covering the twenty-four (24) month period
prior to the date of such most recent financial statement to any existing Lender
or to any potential Lender or buyer of the Premises. Such statements shall be
prepared in accordance with generally accepted accounting principles and, if
such is the normal practice of Tenant, shall be audited by an independent
certified public accountant.
18.7 Reasonable Consent. Whenever any party's approval or consent is
------------------
required by this Lease before an action may be taken by the other party, unless
another standard is expressly set forth, such approval or consent shall not be
unreasonably withheld or delayed.
18.8 Notices. Any notice required or desired to be given regarding
-------
this Lease shall be in writing and may be given by personal delivery, by courier
service, or by mail. A notice shall be deemed to have been given (i) on the
third (3rd) business day after mailing if such notice was deposited in the
United States mail, certified, postage prepaid, addressed to the party to be
served at its Address for Notices specified in Section P or Section Q of the
--------- ---------
Summary (as applicable), (ii) when
Facility:_________________
delivered if given by personal delivery, and (iii) in all other cases when
actually received at the party's Address for Notices. Either party may change
its address by giving notice of the same in accordance with this Section 18.8,
provided, however, that any address to which notices may be sent must be an
address in California.
18.9 Attorneys' Fees. In the event either Landlord or Tenant shall
---------------
bring any action or legal proceeding for an alleged breach of any provision of
this Lease, to recover rent, to terminate this Lease or otherwise to enforce,
protect or establish any term or covenant of this Lease, the prevailing party
shall be entitled to recover as a part of such action or proceeding, or in a
separate action brought for that purpose, reasonable attorneys' fees, court
costs, and experts' fees. Such fees may be awarded in the same suit or
recovered in a separate suit, whether or not such action or proceeding is
pursued to decision or judgment. The term "prevailing party" shall include,
without limitation, a party who substantially obtains or defeats the relief
sought, as the case may be, whether by compromise, settlement, judgment, or the
abandonment by the other party of its claim or defense. The attorneys' fees
award shall not be computed in accordance with any court fee schedule, but shall
be such as to fully reimburse all attorneys' fees reasonably incurred.
18.10 Corporate Authority. If Tenant is a corporation (or
-------------------
partnership), each individual executing this Lease on behalf of Tenant
represents and warrants that he is duly authorized to execute and deliver this
Lease on behalf of such corporation in accordance with a valid board resolution
and the articles and the by-laws of such corporation (or partnership in
accordance with the partnership agreement of such partnership) and that this
Lease is binding, upon such corporation (or partnership) in accordance with its
terms. Each such person does hereby covenant and warrant that the party for
whom it is executing this Lease is a duly authorized and existing corporation,
that it is qualified to do business in California, and that the corporation has
full right and authority to enter into this Lease.
18.11 Miscellaneous. Should any provision of this Lease prove to be
-------------
invalid or illegal, such invalidity or illegality shall in no way affect, impair
or invalidate any other provision hereof, and such remaining provisions shall
remain in full force and effect. Time is of the essence with respect to the
performance of every provision of this Lease in which time of performance is a
factor. The captions used in this Lease are for convenience only and shall not
be considered in the construction or interpretation of any provision hereof.
Any executed copy of this Lease shall be deemed an original for all purposes.
This Lease shall, subject to the provisions regarding assignment, apply to and
bind the respective heirs, successors, executors, administrators and assigns of
Landlord and Tenant. "Party" shall mean Landlord or Tenant, as the context
implies. If Tenant consists of more than one person or entity, then all members
of Tenant shall be jointly and severally liable hereunder. This Lease shall be
construed and enforced in accordance with the laws of the State of California.
The language in all parts of this Lease shall in all cases be construed as a
whole according to its fair meaning, and not strictly for or against either
Landlord or Tenant. When the context of this Lease requires, the neuter gender
includes the masculine, the feminine, a partnership or corporation or joint
venture, and the singular includes the plural. The terms "shall", "will" and
"agree" are mandatory. The term "may" is permissive. When a party is required
to do something by this Lease, it shall do so at its sole cost and expense
without right of reimbursement from the other party unless a provision of this
Lease expressly requires reimbursement. Landlord and Tenant agree that, subject
to Section 4.7 hereof, (i) each has had an opportunity to determine to its
satisfaction the
Facility:______________
actual area of the Project and the Premises (including the Expansion Space),
(ii) all measurements of area contained in this Lease are conclusively agreed to
be correct and binding upon the parties, even if a subsequent measurement of any
one of these areas determines that it is more or less than the amount of area
reflected in this Lease, and (iii) any such subsequent determination that the
area is more or less than shown in this Lease shall not result in a change in
any of the computations of rent, improvement allowances, or other matters
described in this Lease where area is a factor. Where a party hereto is
obligated not to perform any act, such party is also obligated to restrain any
others within its control from performing said act, including the Agents of such
party. Landlord shall not become or be deemed a partner or a joint venturer with
Tenant by reason of the provisions of this Lease. Preparation and submission of
this Lease by Landlord shall not be deemed an offer to lease the Premises.
Neither party shall record this Lease or a memorandum thereof. Tenant shall
execute any Private Restrictions reasonable requested by Landlord to effectuate
any easement rights, dedication, map or restrictions provided the foregoing does
not, subject to Section 6.3, unreasonably interfere with Tenant's use of the
Premises or the Common Areas or materially increase Tenant's obligations
hereunder. Unless specifically stated otherwise in writing by Landlord, the
voluntary or other surrender of this Lease by Tenant, the mutual termination or
cancellation hereof, or a termination hereof by Landlord due to Tenant's
default, shall automatically terminate any sublease or lesser estate in the
Premises; provided, however, that Landlord may elect to continue any one or all
of existing subtenancies.
18.12 Termination by Exercise of Right. If this Lease is terminated
--------------------------------
pursuant to its terms by the proper exercise of a right to terminate
specifically granted to Landlord or Tenant by this Lease, then this Lease shall
terminate thirty (30) days after the date the right to terminate is properly
exercised (unless another date is specified in that part of this Lease creating
the right, in which event the date so specified for termination shall prevail),
the rent and all other charges due hereunder shall be prorated as of the date of
termination (except that in the event of a termination due to damage or
destruction, Base Monthly Rent and Additional Rent shall be abated or partially
abated, as the case may be, as of the date of such destruction in proportion to
the degree to which Tenant's use of the Premises is impaired by such
destruction), and neither Landlord nor Tenant shall have any further rights or
obligations under this Lease except for those that have accrued prior to the
date of termination or those obligations which this Lease specifically provides
are to survive termination. This Section 18.12 does not apply to a termination
of this Lease by Landlord as a result of an Event of Tenant's Default.
18.13 Brokerage Commissions. Each party hereto (i) represents and
---------------------
warrants to the other that it has not had any dealings with any real estate
brokers, leasing agents or salesmen, or incurred any obligations for the payment
of real estate brokerage commissions or finder's fees which would be earned or
due and payable by reason of the execution of this Lease, other than to the
Retained Real Estate Brokers described in Section R of the Summary, and (ii)
---------
agrees to indemnify, defend, and hold harmless the other party from any claim
for any such commission or fees which result from the actions of the
indemnifying party. Landlord shall be responsible for the payment of any
commission owed to the Retained Real Estate Brokers pursuant to and in
accordance with the terms of a separate written commission agreement between
Landlord and the Retained Real Estate Brokers for the payment of a commission as
a result of the execution of this Lease.
Facility:______________
18.14 Force Majeure. Any prevention, delay or stoppage due to
-------------
strikes, lock-outs, inclement weather, labor disputes, inability to obtain
labor, materials, fuels or reasonable substitutes therefor, governmental
restrictions, regulations, controls, action or inaction, civil commotion, fire
or other acts of God, and other causes beyond the reasonable control of the
party obligated to perform (except financial inability) shall excuse the
performance, for a period equal to the period of any such prevention, delay or
stoppage, of any obligation hereunder except the obligation of Tenant to pay
rent to any other sums due hereunder.
18.15 Entire Agreement. This Lease constitutes the entire agreement
----------------
between the parties, and there are no binding agreements or representations
between the parties except as expressed herein. Tenant acknowledges that
neither Landlord nor Landlord's Agents has made any legally binding
representation or warranty as to any matter except those expressly set forth
herein, including any warranty as to (i) whether the Premises may be used for
Tenant's intended use under existing Law, (ii) the suitability of the Premises
or the Project for the conduct of Tenant's business, or (iii) the condition of
any improvements. There are no oral agreements between Landlord and Tenant
affecting this Lease, and this Lease supersedes and cancels any and all previous
negotiations, arrangements, brochures, agreements and understandings, if any,
between Landlord and Tenant or displayed by Landlord to Tenant with respect to
the subject matter of this Lease. This instrument shall not be legally binding
until it is executed by both Landlord and Tenant. No subsequent change or
addition to this Lease shall be binding unless in writing and signed by Landlord
and Tenant.
18.16 Bankruptcy. If a petition is filed by or against Tenant for
----------
relief under Title 11 of the United States Code, as amended (the "Bankruptcy
Code"), and Tenant (including for purposes of this section Tenant's successor in
bankruptcy) assumes and proposes to assign, or proposes to assume and assign,
this Lease pursuant to the provisions of the Bankruptcy Code to any person or
entity who has made or accepted a bona fide offer to accept an assignment of
this Lease on terms acceptable to Tenant, Landlord shall have the prior right
and option, to be exercised by notice to Tenant given at any time prior to the
date on which the court order authorizing such assignment becomes final and non-
appealable, to receive an assignment of this Lease upon the same terms and
conditions, and for the same consideration, if any, as the proposed assignee,
less any brokerage commissions which may otherwise be payable out of the
consideration to be paid by the proposed assignee for the assignment of this
Lease. Tenant's rejection of this Lease under the Bankruptcy Code shall
constitute an Event of Tenant's Default and entitle Landlord to terminate this
Lease and exercise all of its rights and remedies under Section 13.2 and, at
Landlord's election, operate to terminate all subleases, leasehold mortgages and
other Transfers affecting the Premises.
18.17 Non-Discrimination. Tenant herein covenants by and for itself,
------------------
its successors, heirs, executors, administrators and assigns, and all persons
claiming under or through it, and this Lease is made and accepted upon and
subject to the following conditions: There shall be no discrimination against
or segregation of any person or group of persons on account of race, color,
creed, religion, sex, marital status, age, handicap, national origin or ancestry
in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of
the Premises nor shall Tenant itself, or any person claiming under or through
it, establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, sublessees, subtenants or vendees in the Premises.
Facility:_____________
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease with
the intent to be legally bound thereby, to be effective as of the Effective
Date.
LANDLORD:
SCANLANKEMPERBARD COMPANIES,
an Oregon corporation
By /s/ Xxxx X. Xxxxxxx
--------------------------------------
Name Xxxx X. Xxxxxxx
--------------------------------------
Title Vice President
--------------------------------------
TENANT:
INPRISE CORPORATION, a Delaware corporation
By /s/ Hobart McK. Birmingham
--------------------------------------
Name Hobart McK. Birmingham
--------------------------------------
Title Chief Administrative Officer
--------------------------------------
Facility:______________
