Exhibit 10.30
COMMERCIAL LEASE
THIS LEASE is made as of the date specified in the Basic Lease Information,
by and between TRANOD, a California general partnership, ("Landlord") and
XXXXXXX.XXX ("Tenant").
ARTICLE 1
Premises
1.1 Subject to the reservation specified in Paragraph 1.2, and subject to all
recorded easements, covenants, encumbrances and conditions, Landlord hereby
leases to Tenant, and Tenant hereby leases from Landlord, for the term and
subject to the covenants hereinafter set forth, the Premises and the
Building situated thereon.
ARTICLE 2
Term
2.1 The term of this Lease shall be the term specified in the Basic Lease
Information. The term shall commence on the Commencement Date specified in
the Basic Lease Information (the "Commencement Date") and, unless sooner
terminated as hereinafter provided, shall end on the expiration date
specified in the Basic Lease Information (the "Expiration Date").
Notwithstanding the foregoing, the term of this Lease shall not commence
until Landlord substantially completes the ground floor improvements and
delivers to Tenant the ground floor space of the Building for Tenant's
temporary use and occupation during the construction of improvements on the
second floor of the Building. If Landlord, for any reason whatsoever, is
not able to deliver possession of the ground floor on the Commencement Date
this Lease shall not be void or voidable and Landlord shall not be liable
to Tenant for any loss or damage resulting therefrom, but the Commencement
Date shall be postponed until the date on which Landlord delivers
possession of the ground floor, provided, however, if Landlord does not
substantially complete Landlord's work as described in paragraph 23.1
hereof, then Tenant shall have the right to terminate this Lease. Any delay
in delivery of possession shall not operate to extend the term hereof.
2.2 If any part of the Premises is suitable for occupancy by Tenant prior to
the scheduled Commencement Date, Tenant may take early occupancy of that
part of the Premises prior to the scheduled Commencement Date, but the term
of this Lease shall not commence until the scheduled Commencement Date. If
Tenant takes early occupancy of part of the Premises under this paragraph
2.2, Tenant's early occupancy shall be subject to all of the covenants in
this Lease, which shall be binding on and apply to Tenant during the early
occupancy except that Tenant will be relieved of any obligation to pay to
Landlord the Base Rent payable under paragraph 3.1 hereof. Instead, Tenant
shall pay to Landlord a fee to be agreed upon as between Tenant and
Landlord prior to early occupancy. Tenant shall give Landlord written
notice of Tenant's request to take early occupancy of any part of the
premises; the notice shall specify the requested date of early occupancy
and the part of the Premises to be
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occupied.
ARTICLE 3
Rent
3.1 During the term of this Lease, with the exception of the period of
construction of the Landlord and Tenant Improvements, Tenant shall pay to
Landlord the base monthly rent specified in the Basic Lease Information
(the "Base Rent"), subject to increase as provided in paragraph 3.2. Tenant
shall pay Landlord a reduced monthly rent in the sum of until substantial
completion of the Landlord and Tenant Improvements specified in Exhibits
"C" and "D" and the delivery of the entire Premises to Tenant.
3.2 The Base Rent shall be increased on the first day of the 13/th/ month of
the term of this Lease, and on each anniversary thereafter (the "Rental
Adjustment Date") by 2.5 percent per annum.
3.3 Throughout the term of this Lease, Tenant shall pay, as additional rent,
all amounts of money and charges required to be paid by Tenant under this
Lease, whether or not those amounts of money or charges are designated
"additional rent." As used in this Lease, "rent" shall mean any sum payable
by Tenant to Landlord under this Lease.
3.4 It is the intention of Landlord and Tenant that the Base Rent (including
annual increases) payable by Tenant to Landlord during the entire term of
this Lease shall be absolutely net of all Operating Expenses, Property
Taxes and Insurance Expenses. The provisions of this Lease for payment by
Tenant of all Operating Expenses and all Property Taxes and Insurance
Expenses are intended to pass on to Tenant and to reimburse Landlord for
other costs associated with the Building or the Premises. Landlord and
Tenant agree that statements in this Lease to the effect the Landlord is to
perform certain of its obligations hereunder at its own or sole cost or
expense shall not be interpreted as excluding any cost or expense from
Operating Expenses, Property Taxes, or Insurance Expenses if the cost or
expense is an Operating Expense, Property Tax, or Insurance Expense
pursuant to this Lease.
3.5 Tenant shall pay all Base Rent and additional monthly rent to Landlord, in
advance, on or before the first day of each and every calendar month during
the term of this Lease. Tenant shall pay all rent to Landlord without
notice, demand, deduction or offset, in lawful money of the United States
of America, at the address of Landlord specified in the Basic Lease
Information, or to any other person or at any other place that Landlord may
from time to time designate in writing.
ARTICLE 4
Operating Expenses, Insurance Expenses and Property Taxes
4.1 Tenant shall pay all "Operating Expenses" related to the Building or the
Premises commencing upon the date that Landlord delivers possession of the
ground floor to Tenant. As used in this Lease, "Operating Expenses" means
all costs and expenses incurred in connection with the ownership,
management, operation, maintenance or repair of the
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Building or the Premises (excluding Insurance Expenses, which are specified
below in paragraph 4.3) or in connection with providing services in
accordance with this Lease, including the following: expenses relating to
the operation, maintenance or repair of the Building or the Premises; water
and sewer charges or fees; license, permit and inspection fees;
electricity, water, air conditioning, gas fuel, steam, heat, light, power
and other utilities; sales, use and excise taxes on goods and services
purchased for the Building or the Premises; telephone, delivery, postage,
stationery supplies and other expenses relating to the Building or the
Premises; repairs to and maintenance of the Building, including Building
systems and accessories thereto and repair and replacement of worn-out or
broken equipment, facilities, parts and installations, and the replacement
of major Building systems if required by the Tenant during the term of the
Lease; janitorial, window cleaning, security, guard, extermination, water
treatment, garbage and waste disposal, rubbish removal, plumbing and other
services.
Additionally, Operating Expenses shall not include the following:
(i) Any Landlord bad debt loss, rent loss, or reserves for bad debts or
rent loss;
(ii) Reserves of any kind;
(iii) Costs relating to compliance with earthquake retrofit ordinances
enacted prior to Commencement Date and which is exclusive of any
retrofitting of the Base Building;
(iv) Costs incurred due to default by Landlord of the terms and
conditions of this Lease;
(v) Interest on debt or amortization payments on any mortgage or
mortgages, and rental under any ground or underlying leases or lease
for the Premises or the Building;
(vi) Landlord's general overhead or general administrative expenses not
specifically incurred in the operation of the Building, except for
allocated overhead costs to cover accounting, audit, management and
related costs;
(vii) Rentals and other related expenses incurred in leasing permanent
air-conditioning systems, elevators or other building equipment
ordinarily considered to be of a capital nature, except temporary
equipment which is used in providing janitorial, maintenance or
engineering services and which is not permanently affixed to the
Building;
(viii) All items and services for which Tenant reimburses Landlord or pays
to other persons;
(ix) Advertising and promotional expenditures associated with obtaining
tenants for the Building, or not having a reasonably foreseeable
benefit for Tenant except for such expenses that are incurred as a
result of the Tenant's default or early termination of the Lease;
(x) Wages, salaries, commissions or other compensation paid to employees
above the level
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of overall manager of the Building;
(xi) Charitable contributions made by Landlord;
(xii) Purchase costs of paintings, sculptures or other art work purchased
for display in the Building;
(xiii) Environmental or hazardous waste clean-up costs incurred by Landlord
with respect to the Building except any such costs attributed to
contamination caused by Tenant.
4.2 Tenant shall pay all Property Taxes relating to the Premises or the
Building. As used in this Lease, "Property Taxes" shall mean all taxes,
assessments, excises, levies, fees and charges (and any tax, assessment,
excise, levy, fee or charge levied wholly or partly in lieu thereof or as a
substitute therefor or as an addition thereto) of every kind and
description, general or special, ordinary or extraordinary, foreseen or
unforeseen, secured or unsecured, whether or not now customary or within
the contemplation of Landlord and Tenant, that are levied, assessed,
charged, confirmed or imposed by any public or government authority on or
against, or otherwise with respect to, the Building or any part thereof or
any personal property used in connection with the Building. Property Taxes
shall not include net income (measured by the income of Landlord from all
sources or from sources other than solely rent), franchise, excess profit
taxes, gift taxes, documentary transfer inheritance or capital stock taxes
of Landlord, unless levied or assessed against Landlord in whole or in part
in lieu of, as a substitute for, or as an addition to any Property Taxes.
Notwithstanding the foregoing, Tenant shall not be responsible for paying
any increase in real property tax specified in tax assessor's records and
worksheets as being caused by any sale, transfer, or exchange of the
Building or any part thereof.
4.3 Tenant shall pay all Insurance Expenses relating to the Premises or the
Building. As used in this Lease, "Insurance Expenses" shall mean cost of
acquiring liability, property, and other insurance on the Building and/or
the Premises as the Landlord may, in Landlord's reasonable discretion, deem
appropriate; provided, however, that "Insurance Expenses" shall not include
the cost of acquiring earthquake or flood insurance on the Building and/or
the Premises.
4.4 Landlord shall provide reasonable notice to Tenant of the nature and amount
of any Operating Expenses, Property Taxes, and/or Insurance Expenses that
are incurred by or billed to Landlord. Tenant shall provide Landlord with
either direct payment or proof of payment of any invoice or xxxx for
Operating Expenses within thirty (30) days of Landlord's notice. If at any
time during the term of this Lease, Tenant fails to pay the Operating
Expenses, Insurance Expenses and/or Property Taxes as required hereunder,
Landlord may make that payment, and Tenant shall immediately reimburse
Landlord. Tenant shall have the right to inspect, copy and review
Landlord's books and records with respect to Operating Expenses. In the
event that any review of Operating Expenses made at Tenant's request by
independent accountants, selected by Tenant and reasonably satisfactory to
Landlord, shall result in a decrease of the amount of Operating Expenses
for any year of 5% or more, Landlord shall pay the cost of such review.
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ARTICLE 5
Use
5.1 The Premises shall be used for office, multimedia, software engineering,
consulting, customer service, sales and administration thereto and no other
purpose without the Landlord's prior written consent, which shall not be
unreasonably withheld. Tenant shall have exclusive signage rights for the
entire Premises. Tenant shall not do, nor permit to be done, in, on or
about the Premises, nor bring or keep or permit to be brought or kept
therein, anything which is prohibited by or will in any way conflict with
any law, ordinance, rule, regulation or order now in force or which may
hereafter be enacted, or which is prohibited by any insurance policy
carried by Landlord for the Building, or will in any way increase the
existing rate of, cause a cancellation of, or affect any insurance for the
Building. Tenant shall not bring or keep, nor permit to be brought or kept,
in the Premises or the Building any toxic or hazardous substance, material
or waste or any other contaminant or pollutant. Tenant shall not do or
permit anything to be done in or about the Premises which will in any way
obstruct or interfere with the rights of Landlord or other tenants of the
Building, or injure or annoy them. Tenant shall not use nor allow the
Premises to be used for any improper, immoral, unlawful or objectionable
activity, nor shall Tenant cause, maintain or permit any nuisance in, on or
about the premises or commit or suffer to be committed any waste in, on or
about the Premises. Tenant may bring pets into the Building and the
Premises subject to such reasonable rules and regulations as Landlord may
establish.
ARTICLE 6
No Services, Warranties or Representations
6.1 Landlord shall supply no services to the Building or the Premises. Tenant
shall take the Premises in their "AS IS" condition. Except for the work of
the Landlord described on Exhibit C, Tenant hereby acknowledges and agrees
that the lease of the Premises and the Building is made on an "AS IS" basis
and that the Landlord has not made, and does not make, any representation,
warranties or guarantees of any kind or character whatsoever, whether
express or implied, oral or written, concerning or with respect to the
Premises or the Building; except as set forth in paragraph 6.2.
6.2 Landlord represents that (i) it is the sole owner of the Building, (ii) it
has the power and authority to execute and deliver this Lease and that this
Lease is binding upon Landlord in accordance with its terms, (iii) the
Premises, in the state existing on the Commencement Date, but without
regard to alterations or improvements made by Tenant or the use for which
Tenant will occupy the Premises, does not violate any covenants or
restrictions of record, or any applicable building code, regulation or
ordinance in effect on the Commencement Date, including, without
limitation, the federal Americans With Disabilities Act and regulations
thereunder, (iv) there is no pending litigation relating to the Premises or
the Building, (v) there are no known defects in the Premises or the
Building, (vi) all equipment and building systems in the Premises and the
Building are in good operating condition and repair as of the Commencement
Date, (vii) the Premises and the Building are in compliance with all laws
relating to the storage, use and disposal of hazardous materials, and
(viii) the
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Premises and the Building are free of any asbestos-containing materials.
ARTICLE 7
Maintenance and Repairs
7.1 Landlord shall make necessary repairs to the roof and exterior structural
elements of the Building, including the Base Building mechanical (heating,
ventilating and air conditioning) and electrical systems. Tenant shall, at
all times during the term of this Lease and at Tenant's sole cost and
expense, maintain and repair the Building interior and every part thereof
and all equipment, fixtures and improvements therein. Tenant shall maintain
the mechanical (heating, ventilating and air conditioning) and electrical
systems of the Building and keep them clean and in good order and operating
condition. Subject to paragraph 8.2 hereof, Tenant shall, at the end of the
term of this Lease, surrender to Landlord the Premises and all alterations,
additions, fixtures and improvements therein or thereto in the same
condition as when received, ordinary wear and tear and damage thereto by
fire or other casualty excepted.
ARTICLE 8
Alterations
8.1 Except as shown on Exhibit D, Tenant shall not make any alterations,
additions or improvements in or to the Premises or any part thereof, or
attach any fixtures or equipment thereto, without Landlord's prior written
consent which consent shall not be unreasonably withheld or delayed.
Notwithstanding the preceding sentence, Tenant may make alterations,
additions or improvements without Landlord's consent if the total cost of
those alterations, additions or improvements is no more than Five Thousand
Dollars ($5,000.00) per occurrence and the alterations, additions or
improvements will not affect in any way the structural, exterior or roof
elements of the Building or the elevator, mechanical, electrical, plumbing
or life safety systems of the Building. Tenant shall give prior written
notice of any such allowed alterations, additions or improvements to
Landlord. All alterations, additions and improvements in or to the Premises
to which Landlord consents shall be made by Landlord at Tenant's sole cost
and expense. Tenant shall give written notice to Landlord of the date on
which construction of any work will be commenced at least five (5) days
prior to that date. Tenant shall keep the Premises and the Building free
from mechanics' liens and all other liens arising out of any work
performed, labor supplied, materials furnished or other obligations
incurred by Tenant. Tenant shall promptly and fully pay and discharge all
claims on which any such lien could be based or shall provide a bond or
other adequate security therefor. Landlord shall have the right to post and
keep posted on the Premises any notices that may be provided by law or
which Landlord may deem to be proper for the protection of Landlord, the
Premises and the Building from liens, and, upon thirty (30) days' prior
written notice to Tenant, to take any other action Landlord deems necessary
to remove or discharge liens or encumbrances at the expense of Tenant.
8.2 All alterations, additions, fixtures and improvements shall become part of
the Building and Landlord's property. All movable furniture, equipment,
trade fixtures, computers, office
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machines and other personal property shall remain the property of Tenant.
Upon termination of this Lease, Tenant shall, at Tenant's expense, remove
all such movable furniture, equipment, trade fixtures, computers, office
machines and other personal property from the Building and repair all
damage caused by the removal. Termination of this Lease shall not affect
the obligations of Tenant pursuant to this paragraph 8.2 to be performed
after termination.
ARTICLE 9
Insurance
9.1 Landlord shall not be liable to Tenant for any damage to or loss or theft
of any property or for any bodily or personal injury, illness or death of
any person in, on or about the Premises or the Building arising at any time
and from any cause whatsoever, except to the extent caused by the
negligence or willful misconduct of Landlord. Tenant waives all claims
against Landlord arising from any liability described in this paragraph
9.1, except to the extent caused by the negligence or willful misconduct of
Landlord.
9.2 Tenant shall indemnify and defend Landlord against and hold Landlord
harmless from all claims, demands, liabilities, damages, losses, costs and
expenses, including reasonable attorneys' fees and disbursements, arising
from or related to any use or occupancy of the Premises, or the Building,
or any condition of the Premises, or any default in the performance of
Tenant's obligations, or any damage to any property (including property or
employees and invitees of Tenant) or any bodily or personal injury, illness
or death of any person (including employees and invitees of Tenant)
occurring in, on or about the Premises or any part thereof arising at any
time and from any cause whatsoever (except to the extent caused by the
negligence or willful misconduct of Landlord) or occurring in, on or about
any part of the Building other than the Premises when the damage, bodily or
personal injury, illness or death is caused by any act or omission of
Tenant or its agents, officers, employees, contractors, invitees or
licensees. This paragraph 9.2 shall survive the termination of this Lease
with respect to any damage, bodily or personal injury, illness or death
occurring prior to termination.
9.3 Landlord shall indemnify and defend Tenant against and hold Tenant harmless
from all claims, demands, liabilities, damages, losses, costs and expenses,
including reasonable attorney's fees and disbursements, arising from or
related to (i) Landlord's negligence or willful misconduct, or (ii) any
default in the performance of Landlord's obligations under this Lease. This
paragraph 9.3 shall survive the termination of this Lease with respect to
any damage, bodily or personal injury, illness or death occurring prior to
termination.
9.4 Landlord shall indemnify, defend and hold harmless Tenant and any and all
officers, directors, employees, shareholders, agents or affiliates of
Tenant from and against any and all direct and indirect, actual and
consequential costs, expenses, losses, demands, claims, liabilities,
judgments, causes of action, proceedings or hearings which arise from the
use, disposal, emission, discharge, injection, spill, escape, leak, release
or threatened release of any hazardous material in the Building or the
Premises on or before the Commencement
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Date, or brought onto the Premises or the Building by or for Landlord or by
anyone under Landlord's control.
9.5 Tenant shall procure and maintain, at its own expense, with companies
satisfactory to Landlord in its reasonable discretion, the following
insurance coverage:
a. All Risk Property insurance which insures the Building and Tenant's
Property on site from fire and vandalism on a replacement basis, with
business interruption coverage equal to at least one year's rent.
b. Workers' Compensation and Employers' Liability Insurance as required by
California law, affording 30 days' notice of cancellation to the Owner.
The Employers' liability coverage shall have the limits required by law.
c. General Liability Insurance on an "occurrence" basis, having a limit of
not less than $1,000,000 for bodily injury and not less than $1,000,000
for property damage liability, including:
(1) Premises and Operations coverage with X, C and U exclusions deleted,
if applicable;
(2) Products and Completed Operations coverage;
(3) Broad Form Property Damage coverage, including completed operations;
(4) Blanket Contractual coverage (specifically covering this Lease);
(5) Personal Injury coverage;
(6) An endorsement affording 30 days' notice of cancellation to Landlord
in the event of cancellation or material reduction in coverage;
(7) An endorsement providing that the insurance as afforded is primary,
and any other insurance maintained by Landlord is excess and
noncontributing with the insurance required hereunder;
(8) Business interruption insurance, in an amount equal to at least one
year's rent.
d. Business Auto Liability in the amount of $1,000,000 combined single
limit for bodily injury and/or property damage liability including:
(1) Owned autos and trucks;
(2) Hired or borrowed autos and trucks;
(3) Non-owned autos and trucks;
(4) An endorsement affording 30 days' notice of cancellation to Landlord
in the event of cancellation or material reduction in coverage.
e. Excess or Umbrella Bodily Injury and/or Property Damage Liability
Insurance with limits not less than $1,000,000 per occurrence for bodily
injury and/or property damage liability, listing the above-described
General Liability, Employers' Liability and Comprehensive Auto Liability
as underlying policies and including:
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(1) A Broad-as-Primary endorsement;
(2) An endorsement naming Landlord as an additional insured;
(3) An endorsement affording 30 days' notice of cancellation to Landlord
in the event of cancellation or material reduction in coverage;
(4) An endorsement providing that the insurance as afforded is primary,
and any other insurance maintained by Landlord is excess and
noncontributing with the insurance required hereunder.
Tenant shall, at Tenants' sole cost and expense, be responsible for
insuring Tenant's furniture, equipment, fixtures, computers, office
machines, automobiles and vehicles, and all other personal property.
9.6 All insurance required under this Article 9 and all renewals thereof shall
be issued by good and responsible companies qualified to do and doing
business in the State of California. Each policy shall expressly provide
that the policy shall not be canceled or altered without thirty (30) days'
prior written notice to Landlord and shall remain in effect notwithstanding
any cancellation or alteration until notice has been given to Landlord and
the thirty-day period has expired. All liability insurance under this
Article 9 shall name Landlord, and any other parties designated by
Landlord, as an additional insured, shall be primary and noncontributing
with any insurance that may be carried by Landlord, shall afford coverage
for all claims based on any act, omission, event or condition that occurred
or arose (or the onset of which occurred or arose) during the policy
period, and shall expressly provide that Landlord, although named as an
insured, shall nevertheless be entitled to recover under the policy for any
loss, injury or damage to the Landlord. Upon the issuance thereof, Tenant
shall deliver each policy or a certified copy and a certificate thereof to
Landlord for retention by Landlord. If Tenant fails to insure or fails to
furnish to Landlord upon thirty (30) days' written notice to do so any
policy or certified copy and certificate thereof as required, Landlord
shall have the right from time to time to effect such insurance for the
benefit of Tenant or Landlord or both of them, and all premiums paid
therefor by Landlord shall be payable by Tenant as additional rent on
demand.
9.7 Tenant waives on behalf of all insurers under all policies of property,
liability and other insurance (excluding workers' compensation) now or
hereafter carried by Tenant insuring or covering the Premises, or any
portion or any contents thereof, or any operations therein, all rights of
subrogation that any insurer might otherwise, if at all, have to any claims
of Tenant against Landlord. Landlord waives on behalf of all insurers under
all policies of property, liability and other insurance (excluding workers'
compensation) now or hereafter carried by Landlord insuring or covering the
Building or any portion or any contents thereof, or any operations therein,
all rights of subrogation that any insurer might otherwise, if at all, have
to any claims of Landlord against Tenant. Tenant shall, prior to or
immediately after the date of this Lease, procure from each of the insurers
under all policies of property, liability and other insurance (excluding
workers' compensation) now or hereafter carried by Tenant insuring or
covering the Premises, or any portion or any contents thereof, or any
operations therein, a waiver of all rights of subrogation that the insurer
might otherwise, if
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at all, have to any claims of Tenant against Landlord as required by this
paragraph 9.5.
ARTICLE 10
Compliance with Legal Requirements
10.1 Tenant shall, at Tenant's sole cost and expense, promptly comply with all
laws, ordinances, rules, regulations, orders and other requirements of any
government or public authority now in force or which may hereafter be in
force, with all requirements of any board of fire underwriters or other
similar body now or hereafter constituted, and with all directions and
certificates of occupancy issued pursuant to any law by any governmental
agency or officer, insofar as any of them relate to or are required by the
condition, use or occupancy of the Premises or the operation, use or
maintenance of any personal property, fixtures, machinery, equipment or
improvements in the Premises, or the Building. Tenant shall not be required
to make structural changes or to make improvements required by the ADA
unless such structural changes or such improvements required by the ADA are
related to or required by Tenant's acts or particular use of the Premises
or by improvements made by or for Tenant. Similarly, Tenant shall not be
required to make changes to the electrical, water, HVAC or other utility
systems of the Building unless such changes are related to or required by
Tenant's acts or particular use of the Premises or by improvements made by
or for Tenant.
ARTICLE 11
Assignment or Sublease
11.1 Tenant shall not, directly or indirectly, without the prior written consent
of Landlord (which consent shall not be unreasonably withheld), assign this
Lease or any interest herein or sublease the Premises or any part thereof,
or permit the use or occupancy of the Premises by any person or entity
other than Tenant. Tenant shall not, directly or indirectly, without the
prior written consent of Landlord, which consent shall not be unreasonably
withheld or delayed, pledge, mortgage or hypothecate this Lease or any
interest herein. This Lease shall not, nor shall any interest herein, be
assignable as to the interest of Tenant involuntarily or by operation of
Law without the prior written consent of Landlord, which consent shall not
be unreasonably withheld or delayed. Any of the foregoing acts without
prior written consent of Landlord shall be void and shall, at the option of
Landlord, constitute a default that entitles Landlord to terminate this
Lease. Without limiting or excluding other reasons for withholding
Landlord's consent Landlord shall have the right to withhold consent if it
is not demonstrated to the satisfaction of Landlord that the proposed
assignee or subtenant is financially able to perform all of the obligations
of Tenant under this Lease (as evidenced by financial statements and
business and credit references acceptable to Landlord). Tenant agrees that
the instrument by which any assignment or sublease to which Landlord
consents is accomplished shall expressly provide that the assignee or
subtenant will perform all of the covenants to be performed by Tenant under
this Lease (in the case of a sublease, only insofar as such covenants
relate to the portion of the Premises subject to the sublease) as and when
performance is due after the effective date of the assignment or sublease
and that Landlord will have the right to enforce those covenants directly
against the assignee or subtenant. Any purported assignment or sublease
without an instrument containing the foregoing provisions
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shall be void. Tenant shall in all cases remain liable for the performance
by any assignee or subtenant of all covenants and obligations of this
Lease. Notwithstanding anything in this Article 11 or elsewhere in this
Lease to the contrary, Tenant may assign or sublet the Premises, or any
portion thereof, without consent, to any entity which controls, is
controlled by or is under common control with Tenant, or to any entity
resulting from the merger, initial public offering or consolidation with
Tenant, or to any person or entity which acquires all the assets of Tenant
as a going concern of the business that is being conducted on the Premises,
provided that before such assignment or sublet shall be effective said
entity shall assume, in full, the obligations of Tenant under this Lease.
11.2 If Tenant wishes to assign this Lease or sublease all or any part of the
Premises, Tenant shall give written notice to Landlord identifying the
intended assignee or subtenant by name and address and specifying all of
the terms of the intended assignment or sublease. Tenant shall give
Landlord any additional information concerning the intended assignee or
subtenant (including complete financial statements and a business history)
or the intended assignment or sublease (including true copies thereof) as
Landlord reasonably requests. For a period of fifteen (15) days after
written notice is given by Tenant, Landlord shall have the right, by giving
written notice to Tenant, (a) to consent in writing to the intended
assignment or sublease, unless Landlord determines not to consent, or (b)
to enter into an assignment of this Lease or a sublease of the Premises, as
the case may be, with Tenant upon the terms set forth in such written
notice, or (c) in the case of an assignment of this Lease or sublease of
the entire Premises for substantially the balance of the term of this
Lease, to terminate this Lease, effective as of the date on which the
intended assignment or sublease would have been effective if Landlord had
not exercised this termination right. If Landlord does not exercise any of
the rights set forth in the preceding sentence by giving written notice to
Tenant within fifteen (15) days, Landlord shall be deemed to consent in
writing to the intended assignment or sublease. If Landlord elects to enter
into an assignment of this Lease or a sublease of the Premises or to
terminate this Lease, Landlord may enter into a new lease or agreement
covering the Premises or any portion thereof with the intended assignee or
subtenant on any terms to which Landlord and the assignee or subtenant may
agree, or enter into a new lease or agreement covering the Premises or any
portion thereof with any other person or entity. In such event, Tenant
shall not be entitled to any portion of the profit, if any, that Landlord
may realize on account of the new lease or agreement. If Landlord elects to
terminate this Lease, then from and after the date of termination, Landlord
and Tenant each shall have nor further obligation to the other under this
Lease with respect to the Premises except for matters occurring or
obligations arising hereunder prior to the date of termination.
11.3 If Landlord consents in writing (or is deemed to consent in writing in
accordance with paragraph 11.2), Tenant may complete the intended
assignment or sublease subject to the following covenants: (a) the
assignment or sublease shall be on the same terms as set forth in the
written notice given by Tenant to Landlord, (b) no assignment or sublease
shall be valid and no assignee or subtenant shall take possession of the
Premises or any part thereof until an executed duplicate original of the
assignment or sublease, in compliance with paragraph 11.1 hereof, has been
delivered to Landlord, (c) no assignee or subtenant shall
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have a right further to assign or sublease, and (d) one-half of all
"Excess Rent" (as hereinafter defined) derived from the assignment or
sublease is paid to Landlord. Tenant shall pay Excess Rent to Landlord
immediately as and when it is received by Tenant. As used in this paragraph
11.3, "Excess Rent" shall mean the amount by which the total money and
other economic consideration to be paid by the assignee or subtenant as a
result of an assignment or sublease, whether denominated rent or otherwise,
after a deduction has been made for Tenant's real estate leasing
commissions and tenant improvement costs, exceeds, in the aggregate, the
total amount of rent that Tenant is obligated to pay to Landlord under this
Lease.
11.4 No assignment or sublease whatsoever shall release Tenant from Tenant's
obligations and liabilities under this Lease or alter the primary liability
of Tenant to pay all rent and to perform all obligations to be paid and
performed by Tenant. The acceptance of rent by Landlord from any other
person or entity shall not be deemed to be a waiver by Landlord of any
provision of this Lease. Consent to one assignment or sublease shall not be
deemed consent to any subsequent assignment or sublease. If any assignee,
subtenant or successor of Tenant defaults in the performance of any
obligation to be performed by Tenant under this Lease, Landlord may proceed
directly against Tenant without the necessity of exhausting remedies
against the assignee, subtenant or successor.
11.5 If Tenant requests the consent or approval of Landlord to any assignment,
sublease or other action by Tenant, Tenant shall pay to Landlord on demand,
as additional rent, all costs and expenses, including reasonable attorneys'
fees and disbursements, incurred by Landlord in connection therewith.
ARTICLE 12
Entry by Landlord
12.1 Landlord shall have the right to enter the Premises and/or the Building at
any time upon prior notice and accompanied by a representative of Tenant to
(a) inspect the premises, (b) exhibit the Premises to prospective
purchasers, lenders or tenants, (c) determine whether Tenant is performing
all of Tenant's obligations, and (d) post notices of non-responsibility.
Except for damages caused by Landlord's negligence or willful misconduct,
Tenant waives all claims for damages for any injury or inconvenience to or
interference with Tenant's business, any loss of occupancy or quiet
enjoyment of the Premises or any other loss occasioned by Landlord's entry.
Tenant shall provide to Landlord, and Landlord shall at all times have, a
key to unlock all doors to the Premises, and Landlord shall have the right
to use any and all means which Landlord may deem proper to open doors in an
emergency to obtain entry to the Premises and/or the Building. Any such
entry by Landlord shall not under any circumstances be construed or deemed
to be a forcible or unlawful entry into or a detainer of the Premises or an
eviction, actual or constructive, of Tenant from the Premises, or any
portion thereof
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ARTICLE 13
Events of Default and Remedies
13.1 The occurrence of any one or more of the following events ("Event of
Default") shall constitute a breach of this Lease by Tenant:
a. Tenant fails to pay any Base Rent, and that failure continues for more
than five (5) business days after Tenant's receipt of written notice
from Landlord pursuant to the notice provisions herein.
b. Tenant fails to pay any additional rent or other amount of money or
charge payable by Tenant hereunder as and when it becomes due and
payable, and that failure continues for more than ten (10) business days
after Tenant's receipt of written notice from Landlord pursuant to the
notice provisions herein.
c. Tenant fails to perform or breaches any other agreement or covenant of
this Lease to be performed or observed by Tenant as and when performance
or observance is due, and that failure to breach continues for more than
thirty (30) days after Landlord gives written notice thereof to Tenant.
If, by the nature of the agreement or covenant, the failure or breach
cannot reasonably be cured within a period of thirty (30) days, an Event
of Default shall not exist as long as Tenant commences with due
diligence and dispatch the curing of the failure or breach within the
period of thirty (30) days and, having so commenced, thereafter
prosecutes with diligence and dispatch and completes the curing of the
failure or breach.
d. Tenant (1) files, or consents by answer or otherwise to the filing
against it of a petition for relief or reorganization or arrangement or
any other petition in bankruptcy or for liquidation or to take advantage
of any bankruptcy, insolvency or other debtors' relief law of any
jurisdiction, (2) makes an assignment for the benefit of its creditors,
(3) consents to the appointment of a custodian, receiver, trustee or
other officer with similar powers of Tenant or of any substantial part
of Tenant's property, or (4) takes action for the purpose of any of the
foregoing.
e. Without consent by Tenant, a court or government authority enters an
order, and the order is not vacated within thirty (30) days, (1)
appointing a custodian, receiver, trustee or other officer with similar
powers with respect to Tenant or with respect to any substantial part of
Tenant's property, or (2) constituting an order for relief or approving
a petition for relief or reorganization or arrangement or any other
petition in bankruptcy or for liquidation or to take advantage of any
bankruptcy, insolvency or other debtors' relief law of any jurisdiction,
or (3) ordering the dissolution, winding-up or liquidation of Tenant.
f. This Lease or any estate of Tenant hereunder is levied upon under any
attachment or execution, and the attachment or execution is not vacated
within sixty (60) days or Tenant does not provide a bond or other
adequate security therefor.
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g. Tenant intentionally abandons the Premises.
13.2 If an Event of Default occurs, Landlord shall have the right at any time to
give a written termination notice to Tenant and, on the date specified in
the notice, Tenants' right to possession shall terminate and this Lease
shall terminate. Upon termination, Landlord shall have the right to recover
from Tenant:
a. The worth at the time of award of all unpaid rent that had been earned
at the time of termination;
b. The worth at the time of award of the amount by which all unpaid rent
that would have been earned after termination until the time of award
exceeds the amount of rental loss that Tenant proves could have been
reasonably avoided;
c. The worth at the time of award of the amount by which all unpaid rent
for the balance of the term of this Lease after the time of award
exceeds the amount of rental loss that Tenant proves could be reasonably
avoided; and
d. All other amounts necessary to compensate Landlord for all detriment
proximately caused by Tenant's failure to perform all of Tenant's
obligations under this Lease or which in the ordinary course of things
would be likely to result therefrom. The "worth at the time of award" of
the amounts referred to in clauses a. and b. above shall be computed by
allowing interest at the lesser of the maximum annual interest rate
allowed by law for business loans (not primarily for personal, family or
household purposes) not exempt from the usury law at the time of
termination or twelve percent (12%) per annum. The "worth at the time of
award" of the amount referred to in clause c. above shall be computed by
discounting the amount at the discount rate of the Federal Reserve Bank
of San Francisco at the time of award plus one percent (11%). For the
purpose of determining unpaid rent under clauses a., b. and c. above,
the rent reserved in this Lease shall be deemed to be the total rent
payable by Tenant under Articles 3, 4 and 5 hereof.
13.3 Even though Tenant has breached this Lease, this Lease shall continue in
effect for so long as Landlord does not terminate Tenant's right to
possession, and Landlord shall have the right to enforce all of its rights
and remedies under this Lease, including the right to recover all rent as
it becomes due under this Lease. Acts of maintenance or preservation or
efforts to re-let the Premises or the appointment of a receiver upon
initiative of Landlord to protect Landlord's interest under this Lease
shall not constitute a termination of Tenant's right to possession unless
written notice of termination is given by Landlord to Tenant.
13.4 The remedies provided for in this Lease are in addition to all other
remedies available to Landlord at law or in equity by statute or otherwise.
13.5 All agreements and covenants to be performed or observed by Tenant under
this Lease shall be at Tenant's sole cost and expense and without any
abatement of rent. If Tenant fails to
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pay any sum of money to be paid by Tenant or to perform any other act to be
performed by Tenant under this Lease, Landlord shall have the right, but
shall not be obligated, upon thirty (30) days prior written notice to
Tenant and without waiving or releasing Tenant from any obligations of
Tenant, to make any such payment or to perform any such other act on behalf
of Tenant in accordance with this Lease. All sums so paid by Landlord and
all necessary incidental costs shall be deemed additional rent hereunder
and shall be payable by Tenant to Landlord on demand, together with
interest from the date of expenditure by Landlord to the date of repayment
by Tenant at the lesser of the maximum annual interest rate allowed by law
for business loans (not primarily for personal, family or household
purposes) not exempt from the usury law at the date of expenditure or
twelve percent (12%) per annum. Landlord shall have, in addition to all
other rights and remedies of Landlord, the same rights and remedies in the
event of the nonpayment of these sums plus interest by Tenant as in the
case of default by Tenant in the payment of rent.
13.6 If Tenant abandons or surrenders the Premises, or is dispossessed by
process of law or otherwise, any movable furniture, equipment, trade
fixtures or personal property belonging to Tenant and left in the Premises
shall be deemed to have been abandoned, at the option of Landlord, and
Landlord shall have the right, upon thirty (30) days prior written notice
to Tenant, to sell or otherwise dispose of the abandoned personal property
in any commercially reasonable manner.
13.7 Landlord shall be in default of this Lease if it fails or refuses to
perform any provision of this Lease that it is obligated to perform if the
failure to perform is not cured within thirty (30) days after Landlord's
receipt of notice of the default pursuant to the notice provisions in this
Lease. If the default cannot be reasonably cured within thirty (30) days,
Landlord shall not be in default of this Lease if Landlord commences to
cure the default within the thirty (30) day period and diligently and in
good faith continues to cure the default. Tenant, at any time after
Landlord commits a default, can cure the default at Landlord's cost. If
Tenant at any time, by reason of Landlord's default, pays any sum or does
any act that requires the payment of any sum, the sum paid by Tenant shall
be due immediately from Landlord to Tenant at the time the sum is paid. If
Landlord fails to reimburse Tenant as required by this paragraph, Tenant
shall have the right to withhold from future rent due the sum Tenant has
paid until Tenant is reimbursed in full for said sum.
ARTICLE 14
Damage or Destruction
14.1 If the Building or the Premises, or any part thereof, is damaged by fire or
other casualty before the Commencement Date or during the term of this
Lease, and this Lease is not terminated pursuant to paragraph 14.2 hereof,
Landlord shall repair the damage and restore the Building and the Premises
to substantially the same condition in which the Building and the Premises
existed before the occurrence of the fire or other casualty and this Lease
shall, subject to this paragraph 14.1, remain in full force and effect. If
the fire or other casualty damages the Premises or the Building necessary
for Tenant's use and occupancy of the Premises and if the damage is not the
result of the negligence or willful misconduct of
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Tenant or Tenant's agents, officers, employees, contractors, licensees or
invitees, then, during the period the Premises are rendered unusable by the
damage, Tenant shall be entitled to a reduction in Base Rent in the
proportion that the area of the Premises rendered unusable bears to the
total area of the Premises. Landlord shall not be obligated to repair any
damage to, or to make any replacement of, any movable furniture, equipment,
trade fixtures or personal property in the Premises. Tenant shall, at
Tenant's sole cost and expense, repair and replace all such movable
furniture, equipment trade fixtures and personal property. Tenant hereby
waives California Civil Code sections 1932(2) and 1933(4).
14.2 If the Building or the Premises, or any part thereof, is damaged by fire or
other casualty before the Commencement Date or during the term of this
Lease and (a) the fire or other casualty occurs during the last twelve (12)
months of the term of this Lease and the repair and restoration work to be
performed by Landlord in accordance with paragraph 14.1 cannot, as
reasonably estimated by Landlord, be completed within two (2) months after
the occurrence of the fire or other casualty, or (b) the insurance proceeds
received by Landlord in respect of the damage are not adequate to pay the
entire cost, as reasonably estimated by Landlord, of the repair and
restoration work to be performed by Landlord in accordance with paragraph
14.1, and Tenant does not elect in its sole discretion to pay the
difference thereof or (c) the repair and restoration work to be performed
by Landlord in accordance with paragraph 14.1 hereof cannot, as reasonably
estimated by Landlord, be completed within six (6) months after the
occurrence of the fire or other casualty, then Landlord shall have the
right, by giving written notice to Tenant within sixty (60) days after the
occurrence of the fire or other casualty, to terminate this Lease as of the
date of the notice. In such event, Rent shall xxxxx as of the date of such
casualty in the proportion that the area of the Premises rendered unusable
bears to the total area of the Premises. If Landlord does not exercise the
right to terminate this Lease in accordance with this paragraph, Landlord
shall repair the damage and restore the Building and the Premises in
accordance with paragraph 16.1 hereof and this Lease shall remain in full
force and effect. A total destruction of the Building shall automatically
terminate this Lease effective as of the date of the total destruction.
ARTICLE 15
Eminent Domain
15.1 If any part, but less than all, of the Premises is taken by exercise of the
power of eminent domain before the Commencement Date, Landlord or Tenant
may terminate this Lease upon notice to the other within thirty (30) days
after the date of taking and before the Commencement Date. If any part, but
less than all, of the Premises is taken during the term of this Lease, and
if the remaining portion of the Premises is not reasonably suitable for
Tenant's purposes, Tenant may terminate this Lease, by giving written
notice to Landlord within thirty (30) days after the date of the taking. If
either Landlord or Tenant exercises its right to terminate this Lease in
accordance with this paragraph, this Lease shall terminate as of the date
of the taking. If neither Landlord nor Tenant exercises its right to
terminate this Lease in accordance with this paragraph, this Lease shall
terminate as to the portion of the Premises taken as of the date of taking
and shall remain in full force and effect as to the portion of the Premises
not taken, and the Base Rent shall be reduced as of the date of taking
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in the proportion that the area of the Premises taken bears to the total
area of the Premises. If all of the Premises is taken by exercise of the
power of eminent domain before the Commencement Date or during the term of
this Lease, this Lease shall terminate as of the date of the taking.
15.2 If all or any part of the Premises is taken by exercise of the power of
eminent domain, all awards, compensation, damages, income, rent and
interest payable in connection with the taking shall, except as expressly
set forth in this paragraph, be paid to and become the property of
Landlord, and Tenant hereby assigns to Landlord all of the foregoing
monies. Tenant shall have the right to claim and receive directly from the
entity exercising the power of eminent domain only the share of any award
determined to be owing to Tenant for the taking of improvements installed
in the taken portion of the Premises by Tenant at Tenant's sole cost and
expense, based on the unamortized cost actually paid by Tenant for the
improvements, for the taking of Tenant's movable furniture, equipment trade
fixtures and personal property, for loss of goodwill, for interference with
or interruption of Tenant's business, or for removal and relocation
expenses.
15.3 Notwithstanding paragraphs 15.1 and 15.2 hereof to the contrary, if the use
of all or any part of the Premises is taken by exercise of the power of
eminent domain during the term of this Lease on a temporary basis for a
period less than the term of this Lease remaining after the taking, this
Lease shall continue in full force and effect, Tenant shall continue to pay
all of the rent and to perform all of the covenants of Tenant in accordance
with this Lease, to the extent reasonably practicable under the
circumstances, and the, condemnation proceeds in respect of the temporary
taking shall be paid to Tenant; provided, however, that Rent shall xxxxx in
the proportion that the area of the Premises so taken bears to the total
area of the Premises to the extent any condemnation proceedings are not
specifically earmarked therefore.
15.4 As used in this Article 15, a "taking" means the acquisition of all or part
of the Premises for a public use by exercise of the power of eminent domain
or by a transfer in lieu thereof. A taking shall be considered to occur as
of the earlier of the date on which possession of the Premises (or portion
thereof) by the entity exercising the power of eminent domain is authorized
as stated in an order for possession, or the date on which title to the
Premises (or portion thereof) vests in the entity exercising the power of
eminent domain. Tenant hereby waives California Code of Civil Procedure
sections 1265.110 through 1265.160.
ARTICLE 16
Subordination, Merger and Sale
16.1 This Lease shall be subject and subordinate at all times to the lien of all
mortgages and deeds of trust securing any amount or amounts whatsoever that
may now exist or hereafter be placed on or against the Building or on or
against Landlord's interest or estate therein, all without the necessity of
having further instruments executed by Tenant to effect the subordination.
Notwithstanding the foregoing, in the event of a foreclosure of any such
mortgage or deed of trust or of any other action or proceeding for the
enforcement thereof,
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or of any sale thereunder, this Lease shall not be terminated or
extinguished, nor shall the rights and possession of Tenant hereunder be
disturbed, if no Event of Default then exists under this Lease, and Tenant
shall attorn to the person who acquires Landlord's interest hereunder
through any such mortgage or deed of trust. Tenant agrees to execute,
acknowledge and deliver upon demand any further instruments evidencing
subordination of this Lease to the lien of all such mortgages and deeds of
trust that may reasonably be required by Landlord, but Tenants' covenant to
subordinate this Lease to mortgages or deeds of trust hereafter executed is
conditioned upon the inclusion of the commitments specified in the
preceding sentence in each such senior mortgage or deed of trust, or in a
separate subordination agreement. Landlord shall obtain from the holder of
each current mortgage, deed of trust and ground lease, a non-disturbance
agreement in recordable form, providing that in the event of any
foreclosure or termination, or transfer in lieu of any of the foregoing, or
the exercise of any other remedy under such mortgage, deed of trust or
ground lease that: (a) Tenant's use, possession and enjoyment of the
Premises shall not be disturbed and this Lease shall continue in full force
and effect as long as Tenant is not in default, and (b) this Lease shall
automatically become a lease directly between any successor to Landlord's
interest and Tenant.
16.2 The voluntary or other surrender of this Lease by Tenant, or a mutual
cancellation thereof, shall not work a merger and shall, at the option of
Landlord, terminate all or any existing subleases or subtenancies or
operate as an assignment to Landlord of any or all subleases or
subtenancies.
16.3 If the original Landlord hereunder, or any successor owner of the Building,
sells or conveys the Building, all liabilities and obligations on the part
of the original Landlord, or the successor owner, under this Lease accruing
after the sale or conveyance shall terminate and the original Landlord, or
the successor owner, shall automatically be released therefrom, and
thereupon all of Landlord's liabilities and obligations shall be binding
upon the new owner. Tenant agrees to attorn to the new owner.
ARTICLE 17
Estoppel Certificate
17.1 At any time and from time to time, Tenant shall, within ten (10) days after
written request by Landlord, execute, acknowledge and deliver to Landlord a
certificate certifying: (a) that this Lease is unmodified and in full force
and effect (or, if there have been modifications, that this Lease is in
full force and effect as modified, and stating the date and nature of each
modification); (b) the Commencement Date and the Expiration Date determined
in accordance with Article 2 hereof and the date, if any, to which all rent
and other sums payable hereunder have been paid; (c) that no notice has
been received by Tenant of any default by Tenant hereunder that has not
been cured, except as to defaults specified in the certificate; (d) that
Landlord is not in default under this Lease, except as to defaults
specified in the certificate; and (e) any other matters that may be
reasonably requested by Landlord or any actual or prospective purchaser or
mortgage lender. Any such certificate may be relied upon by Landlord and
any actual or prospective purchaser or mortgage lender of the Building
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or any part thereof At any time and from time to time, Tenant shall, within
ten (10) days after written request by Landlord, deliver to Landlord copies
of current financial statements (including, without limitation, a balance
sheet, an income statement, and an accumulated retained earnings
statement), annual reports, and other financial and operating information
and data of Tenant prepared by Tenant in the course of Tenant's business as
reasonably requested by Landlord. Unless available to the public, Landlord
shall disclose Tenant's financial statements, annual reports and other
information or data only to actual or prospective purchasers or mortgage
lenders of the Building or any part thereof, and otherwise keep them
confidential unless other disclosure is required by law.
ARTICLE 18
Holding Over
18.1 If, without objection by Landlord, Tenant holds possession of the Premises
after expiration of the term of this Lease, Tenant shall become a tenant
from month to month upon the terms herein specified but at a Base Rent
equal to One Hundred Fifty Percent (150%) of the Base Rent in effect at the
expiration of the term of this Lease pursuant to Article 3 hereof, payable
in advance on or before the first day of each month. The month-to-month
tenancy may be terminated by either Landlord or Tenant upon thirty (30)
days' written notice of termination to the other at any time.
ARTICLE 19
Security Deposit
19.1 Upon signing this Lease, Tenant shall pay to Landlord the sum of
(the"Deposit"). The Deposit shall be held by Landlord as security for the
performance by Tenant of all of the covenants of this Lease to be performed
by Tenant, and Tenant shall be entitled to interest thereon. If Tenant
fails to perform any of the covenants of this Lease to be performed by
Tenant, then Landlord shall have the right, but no obligation, to apply the
Deposit, or so much thereof as may be necessary, to cure any failure by
Tenant. If Landlord applies the Deposit or any part thereof to cure any
failure by Tenant, then Tenant shall immediately pay to Landlord the sum
necessary to restore the Deposit to the full amount required by this
paragraph. Any remaining portion of the Deposit shall be returned to Tenant
upon termination of this Lease. Upon termination of the original Landlord's
or any successor owner's interest in the Premises or the Building, the
original Landlord or the successor owner shall be released from further
liability with respect to the Deposit upon the original Landlord's or
successor owner's compliance with California Civil Code section 1950.7.
ARTICLE 20
Letter of Credit
20.1 Tenant shall, on execution of this Lease, deliver to Landlord and cause to
be in effect during the Lease term, an unconditional, irrevocable Letter of
Credit in the amount equal to nine (9) months of the Base Rent. The Letter
of Credit shall be issued by a Letter of Credit bank selected by Tenant and
acceptable to Landlord. A Letter of Credit bank is a bank that
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accepts deposits, maintains accounts, has a local San Francisco office that
will negotiate a letter of credit, and the deposits of which are insured by
the Federal Deposit Insurance Corporation. Tenant shall pay all expenses,
points, or fees incurred by Tenant in obtaining the Letter of Credit.
20.2 The amount of the Letter of Credit shall be reduced by twenty percent (20%)
on each rental adjustment date. The replacement Letter of Credit shall be
effective at least thirty (30) days before expiration of the Letter of
Credit that it replaces. Each replacement Letter of Credit shall be issued
by a Letter of Credit bank acceptable to Landlord and shall otherwise
comply with the requirements of this Article 20.
20.3 Landlord shall hold the Letter of Credit as security for the performance of
Tenant's obligations under this Lease. If, after notice and failure to cure
within the applicable period, Tenant defaults on any provision of this
Lease, Landlord may, without prejudice to any other remedy it has, draw on
that portion of the Letter of Credit necessary to:
a) Pay any rent or other sum in default;
b) Pay or reimburse Landlord for any amount that Landlord may spend or
become obligated to spend in exercise Landlord's rights under Article
13; or
c) Compensate Landlord for any expense, loss or damage that Landlord may
suffer because of Tenant's default.
If Tenant fails to renew or replace the Letter of Credit at least thirty
(30) days before its expiration, Landlord may, without prejudice to any
other remedy it has, draw on all of the Letter of Credit.
ARTICLE 21
Waiver
21.1 The waiver by Landlord or Tenant of any breach of any covenant in this
Lease shall not be deemed to be a waiver of any subsequent breach of the
same or any other covenant in this Lease, nor shall any custom or practice
which may grow up between Landlord and Tenant in the administration of this
Lease be construed to waive or to lessen the right of Landlord or Tenant to
insist upon performance by Landlord or Tenant in strict accordance with
this Lease. The subsequent acceptance of rent hereunder by Landlord or the
payment of rent by Tenant shall not waive any preceding breach by Tenant of
any covenant in this Lease, nor cure any Event of Default, nor waive any
forfeiture of this Lease or unlawful detainer action, other than the
failure of Tenant to pay the particular rent so accepted, regardless of
Landlord's or Tenant's knowledge of the preceding breach at the time of
acceptance or payment of that rent.
ARTICLE 22
Notices
22.1 All requests, approvals, consents, notices and other communications given
by Landlord or
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Tenant under this Lease shall be properly given only if made in writing and
either deposited in the United States mail, postage prepaid, certified with
return receipt requested, or delivered by hand (which may be through a
messenger or recognized delivery or courier service) and addressed, if to
Landlord, at the address of Landlord specified in the Basic Lease
Information, or at another place as Landlord may from, time to time
designate in a written notice to Tenant, or if to Tenant before the
Commencement Date, at the address of Tenant specified in the Basic Lease
Information, and after the Commencement Date at the Premises, or at another
place as Tenant may from time to time designate in a written notice to
Landlord. All requests, approvals, consents, notices and other
communications shall be effective on the date of receipt as evidenced by
the certified mail receipt if mailed, or on the date of delivery if hand-
delivered.
ARTICLE 23
Improvements
23.1 Landlord shall, at Landlord's sole cost and expense, make the improvements
to the Building which are specified in Exhibit "C" attached hereto. It is
expected that Landlord will substantially complete the construction of the
improvements specified in Exhibit "C" and Exhibit "D" attached hereto by
November 1, 1999. The term "substantial completion," shall be as defined by
the American Institute of Architects ("AIA") in AIA Document C704, a copy
of which is attached hereto as Exhibit "E." If the improvements are not
substantially completed by November 1, 1999 Tenant shall have the right to
terminate this Lease by giving Landlord written notice of election to
cancel the Lease within ten (10) days after November 1, 1999.
Notwithstanding the foregoing, the date of completion of the Landlord's
construction shall not affect the Tenant's obligation to pay rent as set
forth in paragraph 3.1.
23.2 Tenant shall be entitled to a tenant improvement allowance (the "Tenant
Improvement Allowance) in the amount of $20 for each of the 21,504 rentable
square feet of the Building for the costs relating to the design and
construction of Tenant's improvements which are permanently affixed to the
Premises (the "Tenant Improvements"). In no event shall Landlord be
obligated to make disbursements for Tenant Improvements in a total amount
which exceeds the Tenant Improvement Allowance. If upon completion of the
work specified in Exhibits C and D the entire Tenant Improvement Allowance
is not exhausted, the remaining balance shall be paid to Tenant in the form
of a Base Rent credit in an equivalent amount.
23.3 The Tenant Improvement Allowance shall be disbursed by Landlord for costs
related to the construction of the Tenant Improvements. The Tenant
Improvements are specified in Exhibit D. The costs of the Tenant
Improvements covered by the Tenant Improvement Allowance shall include:
a) Professional fees for architects and engineers and the costs of
documents and materials supplied by Landlord and Landlord's consultant
in connection with the preparation and review of construction drawings
for Tenant Improvements specified in Exhibit D;
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b) The cost of any changes to the construction drawings or Tenant
Improvements required by Code;
c) Any overhead costs associated with the construction of the Tenant
Improvements such as equipment rental, utilities and off-site parking
charges.
23.4 Landlord has established specifications for the Building standard
components to be used in construction of the Tenant Improvements in the
Building which specifications shall be supplied to Tenant by Landlord. The
quality of Tenant Improvements shall be equal to or of greater quality than
the quality of the specifications, provided that Landlord may, at
Landlord's reasonable discretion, require the Tenant Improvements to comply
with certain specifications. Landlord may make reasonable changes to the
specifications from time to time.
23.5 Landlord shall retain the architect to prepare construction drawings.
Landlord shall retain the engineer to prepare all plans and engineering
drawings related to the Tenant Improvements. The plans and drawings to be
prepared by Architect and Engineer shall be known collectively as the
"Construction Drawings." All Construction Drawings shall reflect the design
and specifications requested by Tenant and shall be subject to Landlord's
and Tenant's reasonable approval. Landlord's review of the Construction
Drawings shall be for its sole purpose and shall not imply Landlord's
review of the same, or obligate Landlord to review the same, for quality,
design, code compliance or other like matters. Landlord shall not be
responsible for any omissions or errors contained in the Construction
Drawings.
23.6 Landlord shall submit the Construction Drawings to the appropriate
municipal authorities for all applicable building permits necessary to
commence and fully complete the construction of the Tenant Improvements.
Landlord hereby agrees that neither Tenant nor Tenant's consultants shall
be responsible for obtaining any building permit or certificate of
occupancy for the Building and that obtaining the same shall be the
Landlord's responsibility; provided, however, that Tenant shall, in any
event, cooperate with Landlord in executing permit applications and
performing other administerial acts reasonably necessary to enable Landlord
to obtain any such permit or certificate of occupancy.
23.7 After the Construction Drawings are approved by Landlord and Tenant, the
Landlord will provide Tenant with a cost proposal which shall include, as
nearly as possible, the cost of all Tenant Improvement Allowance Items to
be incurred by Tenant in. connection with the design and construction of
the Tenant Improvements. Tenant shall approve the cost proposal of the
contractor whom Tenant elects for Landlord to retain to construct the
Tenant improvements. Landlord shall thereafter be released by Tenant to
engage the contractor to commence the construction of the Tenant
Improvements.
23.8 If the approved Cost Proposal exceeds the Tenant Improvement Allowance,
Tenant shall deliver to Landlord cash in an amount (the "Over-Allowance
Amount") equal to the difference between (i) the amount of the Cost
Proposal and (ii) the amount of the Tenant Improvement Allowance. The Over-
Allowance Amount shall be disbursed by Landlord
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prior to the disbursement of any then-remaining portion of the Tenant
Improvement Allowance, and such disbursements shall be pursuant to the
same procedure as the Tenant Improvement Allowance. In the event that,
after the cost proposal is approved by Tenant, any revisions, changes, or
substitutions shall be made to the Construction Drawings or the Tenant
Improvements, except revisions, changes and substitutions made by Landlord
or upon Landlord's request, any additional costs which arise in connection
with such revisions, changes or substitutions or any other additional
costs shall be paid by Tenant to Landlord immediately upon Landlord's
request as an addition to the Over-Allowance Amount.
23.9 Landlord hereby assigns to Tenant all warranties and guarantees by
Contractor relating to the Tenant Improvements, and Tenant hereby waives
all claims against Landlord relating to or arising out of construction of
the Tenant Improvements, except for claims arising from Landlord's direct
negligence or willful misconduct.
23.10 Tenant has designated Xxxxx Xxxxx as its sole representative with respect
to the matters set forth in this Article 23 who, until further notice to
Landlord, shall have full authority and responsibility to act on behalf of
the Tenant as is required in this article.
23.11 Landlord has designated Xxxx Xxxxxxxx as its sole representative with
respect to the matters set forth in this Article 23 who, until further
notice to Tenant, shall have full authority and responsibility to act on
behalf of the Landlord as required in this article.
23.12 Notwithstanding provision to the contrary contained in this Lease, if an
event vent of default as described in Article 13 of the Lease, or a
default by Tenant under this Article 23, has occurred at any time or
before the substantial completion of the Tenant Improvements, then, in
addition to all the rights and remedies granted to Landlord pursuant to
the Lease, Landlord shall have the right to withhold payment of all or any
portion of the Tenant Improvement Allowance and/or Landlord may cause
Contractor to cease the construction of the Tenant Improvements. In
addition, all other obligations of Landlord under the terms of this
Article 23 shall be forgiven until such time as such default is cured
pursuant to the terms of the Lease.
ARTICLE 24
Miscellaneous
24.1 The words "Landlord" and "Tenant" as used herein shall include the plural
as well as the singular. The words "'include," "includes" and "including"
shall be deemed to be followed by the phrase "without limitation." If
there is more than one Tenant, the obligations hereunder imposed upon
Tenant shall be joint and several. Time is of the essence of this Lease
and each and all of its provisions. Submission of this instrument for
examination or signature by Tenant does not constitute a reservation of or
option for lease, and it is not effective as a lease or otherwise until
execution and delivery by both Landlord and Tenant. Subject to Article 11
hereof, this Lease shall benefit and bind Landlord and Tenant and the
personal representatives, heirs, successors and assigns of Landlord and
Tenant. Tenant shall not use the name of the Building for any purpose
whatsoever other than as the address of
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Tenant at the Premises. If any provision of this Lease is determined to be
illegal or unenforceable, that determination shall not affect any other
provision of this Lease and all other provisions shall remain in full force
and effect.
24.2 Tenant acknowledges that the late payment by Tenant of any monthly
installment of Base Rent or additional monthly rent will cause Landlord to
incur costs and expenses, the exact amount of which is extremely difficult
and impractical to fix. These costs and expenses will include
administration and collection costs and processing and accounting expenses.
Therefore, if any monthly installment of Base Rent or additional monthly
rent is not received by Landlord within ten (10) days after payment is due,
Tenant shall immediately pay to Landlord a late charge equal to four
percent (4%) of the delinquent installment. Landlord and Tenant agree that
this late charge represents a reasonable estimate of the costs and expenses
and is fair compensation to Landlord for the loss suffered by Tenant's
failure to make timely payment. In no event shall the late charge be deemed
to grant to Tenant a grace period or extension of time within which to pay
any monthly rent or prevent Landlord from exercising any right or enforcing
any remedy available to Landlord upon Tenant's failure to pay each
installment of monthly rent due under this Lease in a timely fashion,
including the right to terminate this Lease. All amounts of money payable
by Tenant to Landlord hereunder, if not paid when due, shall bear interest
from the due date until paid at the lesser of the maximum annual interest
rate allowed by law for business loans (not primarily for personal, family
or household purposes) not exempt from the usury law at the due date or
twelve percent (12%) per annum.
24.3 If there is any legal action or proceeding between Landlord and Tenant to
enforce this lease or to protect or establish any right or remedy under
this Lease, the unsuccessful party to the action or proceeding shall pay to
the prevailing party all costs and expenses, including reasonable
attorneys' fees and disbursements, incurred by such prevailing party in the
action or proceeding and in any appeal in connection therewith. If the
prevailing party recovers a judgment in any such action, proceeding or
appeal, its costs, expenses and attorneys' fees and disbursements shall be
included in and as a part of the judgment.
24.4 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, offers, agreements and
understandings, oral or written, if any, between Landlord and Tenant or
displayed by Landlord or Tenant with respect to the subject matter of this
Lease, the Premises or the Building. There are no representations between
Landlord and Tenant or between any real estate broker and Tenant other than
those expressly set forth in this Lease and all reliance with respect to
any representations is solely upon representations expressly set forth in
this Lease. This Lease may not be amended or modified in any respect
whatsoever except by an instrument in writing signed by Landlord and
Tenant.
24.5 Landlord shall be solely responsible for payment of any real estate
brokerage commissions owed to the Landlord's and Tenant's respective
brokers as a consequence of this Lease. Landlord shall indemnify, protect,
defend and hold harmless the Tenant against all claims, demands, losses,
liabilities, judgements and expenses for any real estate commission alleged
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to be owing to the other's real estate broker upon the execution and
commencement of this Lease. Landlord's obligations hereunder shall not
extend to any claim made for a broker commission, finder's fee, referral
fee, or other compensation by a broker who is not specified in the Basic
Lease Information.
24.6 This Lease shall be governed by and construed in accordance with the laws
of the State of California. All exhibits attached to this Lease are thereby made
a part of this Lease.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the date
set forth below.
LANDLORD:
TRANOD, a California general partnership
Dated: 7/15, 1999 By /s/ XXXX XXXXXXXX
---- -----------------
Xxxx Xxxxxxxx, Partner
Dated: 7/15, 1999 By /s/ ART XXXXXXXX
---- ----------------
Art Xxxxxxxx, Partner
TENANT:
XXXXXXX.XXX
Dated: 7/15, 1999 By /s/ XXXXX XXXXX
---------------
Xxxxx Xxxxx, CFO
Dated: ______________, 1999 By _____________________
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