EXHIBIT 10.13
REDWOOD BUSINESS PARK
FULL SERVICE LEASE
THIS LEASE, dated April 22, 1998, is made and entered into by and between G
& W/Xxxxxx Redwood Business Park, L.P., a limited partnership ("Landlord"), and
Fiberlane Communications, a Delaware corporation ("Tenant").
1. Premises.
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Landlord leases to Tenant, and Tenant hereby leases from Landlord for the
term of this Lease ("Term") and at the rent and upon the conditions set forth
below, the Premises described in the Basic Lease Information and identified on
the floor plan attached hereto as Exhibit A. The Premises are located within the
Building described in the Basic Lease Information, and constitute part of the
Project described in the Basic Lease Information and as shown in Exhibit A-1
attached hereto, at the Redwood Business Park, located in Petaluma, California.
All areas and facilities outside the Buildings and within the exterior
boundaries of the Project that are provided and designated by Landlord from time
to time for the general nonexclusive use and convenience of the tenants of the
Project shall be known as "Common Areas".
2. Term.
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(a) The Term shall commence upon the date ("Commencement Date") which
is the earlier of: (i) substantial completion of the Premises, as the term
"substantial completion" is defined in the Work Letter Agreement, attached
hereto as Exhibit B; or (ii) the date substantial completion would have occurred
but for Tenant Delays (as the term is defined in the Work Letter Agreement). The
Estimated Commencement Date is set forth in the Basic Lease Information, which
date may be postponed due to a delay in delivering the Premises as provided in
Paragraph 2(b) below. A "Lease Year" is a period of twelve (12) consecutive
calendar months. A "Lease Month" is a calendar month. The initial Term of this
Lease shall be determined as follows:
(1) If the Commencement Date of this Lease occurs on the first
calendar day of a calendar month, the Term shall be for a period of Lease Years
and Months as specified in the Basic Lease Information, unless terminated sooner
as provided in this Lease.
(2) If the Commencement Date of this Lease occurs on other than
the first calendar day of a calendar month, the Term shall be for a period of
Lease Years and Months as specified in the Basic Lease Information, plus the
number of days remaining in the calendar month in which the Commencement Date
occurs, unless terminated sooner as provided in this Lease.
(b) Subject to the provisions of Paragraph 22 below, in the event the
Premises are not substantially completed (in accordance with the Work Letter
Agreement) on or within six (6) months after the Estimated Commencement Date,
then Tenant may, at Tenant's option, by notice in writing to Landlord within ten
(10) days thereafter, cancel this Lease, in which event, (i) this Lease shall be
deemed null and void and have no further force or effect, (ii) all security or
other deposits made herewith shall be promptly returned to Tenant, and (iii) the
parties shall have no further obligation to each other; provided further,
however, that if such written notice of Tenant is not received by Landlord
within said 10-day period, Tenant's right to cancel this Lease hereunder shall
terminate and be of no further force or effect.
3. Rent.
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(a) For purposes of this Lease, the term "Rent" shall mean the Base Rent,
Advanced Base Rent, all additional rent, and all of the other monetary
obligations of Tenant under this Lease. Upon execution of this Lease, Tenant
shall pay to Landlord the Advanced Base Rent set forth in the Basic Lease
Information. Tenant shall pay to Landlord the Base Rent specified in the Basic
Lease Information, payable on or before the first day of each and every
successive calendar month following the Commencement Date. If the Term commences
on other than the first day of a calendar month, the first payment of Base Rent
shall be appropriately prorated, on the basis of a 30-day month. Tenant's
payment of any Advanced Base Rent (excluding that portion attributable to last
month's rent, if any) shall be credited against Tenant's obligation to pay Base
Rent beginning as of the Commencement Date.
(b) Tenant shall pay, as additional rent, all amounts of money required
to be paid to Landlord by Tenant under this Lease in addition to monthly Base
Rent, whether or not the same be designated "additional rent." If such amounts
are not paid at the time provided in this Lease, they shall nevertheless be
collectable as additional rent with the next installment of monthly Base Rent
thereafter falling due, but nothing herein contained shall be deemed to suspend
or delay the payment of any amount of money at the time the same becomes due and
payable hereunder, or limit any other remedy of Landlord.
(c) Tenant acknowledges that late payment by Tenant to Landlord of Rent
after the expiration of any applicable grace period will cause Landlord to incur
costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges, and late charges which may be imposed on
Landlord by the terms of any trust deed covering the Premises. Accordingly, if
any installment of Rent or any other sums due from Tenant shall not be received
by Landlord when due, Tenant shall pay to Landlord a late charge equal to six
percent (6%) of such overdue amount. The parties agree that such late charge
represents a fair and reasonable estimate of the costs Landlord will incur by
reason of late payment by Tenant. Acceptance of such late charge by Landlord
shall in no event constitute a waiver of Tenant's default with respect to such
overdue amount, nor prevent Landlord from exercising any of the other rights and
remedies granted hereunder.
(d) Any amount due to Landlord, if not paid when due, shall bear interest
from the date due until paid at the rate of ten percent (10%) per annum. Payment
of interest shall not excuse or cure any default hereunder by Tenant.
(e) All payments due from Tenant to Landlord hereunder shall be made to
Landlord without deduction or offset, in lawful money of the United States of
America at Landlord's address for notices hereunder, or to such other person or
at such other place as Landlord may from time to time designate in writing to
Tenant.
4. Taxes and Operating Expenses.
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(a) For each calendar year during the Term after the year specified in
the Basic Lease Information as the Base Year, Tenant shall pay its percentage
share, as specified in the Basic Lease Information, of the increase in Property
Taxes over Base Property Taxes, and its percentage share of the increase in
Operating Expenses for such calendar year over Base Operating Expenses.
(1) "Property Taxes" shall mean all real property taxes, bonds and
assessments and governmentally imposed fees or charges (and any tax levied
wholly or partly in lieu thereof) levied, assessed, confirmed, imposed or which
have become a lien against the Building (which for the purposes of defining
"Property Taxes" shall include the tax parcel of which the Building is a part)
and Common Areas.
(2) "Operating Expenses" shall mean the following: (A) all costs of
management, operation, maintenance and repair of the Building and Common Areas,
including, without limitation, property management expenses, maintenance and
repair materials, supplies and equipment; (B) all costs of water, power,
electricity, refuse collection, parking lot sweeping, landscaping, and other
services relating to the Common Areas; (C) all costs of alterations or
improvements to the Building or Common Areas made to achieve compliance with
federal, state and local law including, without limitation, the Americans with
Disabilities Act (42 U.S.C. Section 12101 et seq.), which costs will be
amortized over the useful life of each alteration or improvement; (D) all costs
of public liability and casualty insurance maintained by Landlord with respect
to the Building and Common Areas; (E) all costs incurred by Landlord for making
any capital improvements, structural repairs or modifications to the Building or
Common Areas or making any improvements or modifications to reduce the operating
expenses, which costs will be amortized over the useful life of each capital
improvement, structural repair or modification; (F) all costs of maintaining
machinery, equipment and directional signage or other markers; and (G) the share
allocable to the Building of dues and assessments payable under any reciprocal
easement or common area maintenance agreements or declarations or by any owners'
associations affecting the Building. That portion of the Operating Expenses
relating to the property management expenses for the Building and Common Areas
which shall be charged to Tenant shall be four percent (4%) of both Tenant's
annual Base Rent and the subtotal of Tenant's share of Operating Expenses of the
Building. In the event that Landlord calculates the Operating Expenses based
upon the Project instead of the Building, then the term "Project" shall be
substituted in the place of all references to the term "Building" in this
paragraph.
(3) "Base Property Taxes" shall mean those Property Taxes incurred by
Landlord during the calendar year specified as Base Year in the Basic Lease
Information.
(4) "Base Operating Expenses" shall mean those Operating Expenses
incurred by Landlord during the calendar year specified as Base Year in the
Basic Lease Information.
(b) The Property Taxes to be paid by Tenant shall be determined by
multiplying the increase in Property Taxes over Base Property Taxes by Tenant's
Percentage Share of Property Taxes (which percentage is determined by
multiplying 100% by a fraction, the numerator of which is the rentable area of
the Premises and the denominator of which is the total rentable area of all
improvements located within the tax parcel of which the Premises are a part).
Landlord may cause the Common Areas of the Project to be separately assessed
from other areas and buildings of the Project. In such case, Tenant's Percentage
Share of Property Taxes attributable to the Common Areas shall be determined by
the ratio that the total rentable square feet in the Premises bears to the total
number of square feet of rentable area which is included in the property subject
to the assessment.
(c) Operating Expenses for each calendar year shall be adjusted to equal
Landlord's reasonable estimate of Operating Expenses as though ninety-five
percent (95%) of the total rentable area of the Building had been occupied. When
the Building is one hundred percent (100%) occupied, the Operating Expenses
shall be adjusted to reflect a 100% occupied building. The Operating Expenses to
be paid by Tenant shall be determined by multiplying the increase in Operating
Expenses over Base Operating Expenses, as adjusted above, by Tenant's Percentage
Share of Operating Expenses (which percentage is determined by multiplying 100%
by a fraction, the numerator of which is the rentable area of the Premises and
the denominator of which is the total rentable area located within the Building,
if the Operating Expenses are calculated for the Building, or within the
Project, if the Operating Expenses are calculated for the Project).
(d) Commencing as of the second year of the Lease through the remainder
of the Term and any extensions thereof, Tenant shall pay to Landlord each month
at the same time and in the same manner as monthly Base Rent one-twelfth
(1/12th) of Landlord's estimate of the increase in Property Taxes and one-
twelfth (1/12th) of Landlord's estimate of the increase in Operating Expenses
payable by Tenant for the then-current calendar year. Such monthly amount may be
adjusted by Landlord at any time on the basis of Landlord's experience and
reasonably anticipated costs. Within one hundred twenty (120) days after the
close of each calendar year, or as soon after such 120-day period as
practicable, Landlord shall deliver to Tenant a statement in reasonable detail
of the actual amount of Property Taxes and Operating Expenses payable by Tenant
in accordance with this Paragraph 4 for such calendar year. Tenant may request
further information if desired. Landlord's failure to provide such statement to
Tenant within the 120-day period shall not act as a waiver and shall not excuse
Tenant or Landlord from making the adjustments to reflect actual costs as
provided herein. If on the basis of such statement Tenant owes an amount that is
less than the estimated payments for such calendar year previously made by
Tenant, Landlord shall credit such excess to Tenant against future additional
rent due under this Paragraph 4. If on the basis of such statement Tenant owes
an amount that is more than the estimated payments for such calendar year
previously made by Tenant, Tenant shall pay the deficiency to Landlord within
fifteen (15) days after delivery of the statement. The obligations of Landlord
and Tenant under this Paragraph 4(d) with respect to the reconciliation between
the estimated and actual amounts of Property Taxes and Operating Expenses
payable by Tenant for the last year of the Term shall survive the termination of
the Lease. When the final determination is made of the actual amounts of
Property Taxes and Operating Expenses payable by Tenant for the year in which
this Lease terminates, Tenant shall immediately pay any increase due over the
estimated payments and, conversely, any overpayment made by Tenant shall be
immediately reimbursed to Tenant by Landlord.
5. Other Taxes.
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In addition to Tenant's obligations under Paragraph 4 above, Tenant shall
pay or reimburse Landlord for (i) any taxes upon, measured by or reasonably
attributable to the cost or value of Tenant's equipment, furniture, fixtures,
and other personal property located in the Premises or leasehold improvements
made in or to the Premises at Tenant's expense, (ii) for taxes, if any, measured
by or reasonably attributable to tenant improvements paid for by Tenant, and
(iii) for any taxes, assessments, fees, or charges imposed by any public
authority or private community maintenance association upon or by reason of the
development, possession, use or occupancy of the Premises or the parking
facilities used by Tenant in connection with the Premises. On request by
Landlord, Tenant shall furnish Landlord with satisfactory evidence of payment of
Tenant's business personal property taxes and deliver copies of such business
personal property tax bills to Landlord.
6. Use.
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6.1 Prohibited Uses.
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(a) The Premises shall be used and occupied by Tenant solely for the
use set forth in the Basic Lease Information. Tenant shall, at Tenant's expense,
comply promptly with all applicable federal, state and local laws, regulations,
ordinances, rules, orders, and requirements in effect during the Term relating
to the condition, use or occupancy of the Premises. Tenant shall not use or
permit the use of the Premises in any manner that will tend to create waste or a
nuisance, or that unreasonably disturbs other tenants of the Building or
Project, nor shall Tenant place or maintain any signs, antennas, awnings,
lighting or plumbing fixtures, loudspeakers, exterior decoration or similar
devises on or visible from the exterior of the Premises, without Landlord's
prior written consent, which consent may be withheld in Landlord's sole
discretion. Tenant shall not use any corridors, sidewalks, stairs, elevators, or
other areas outside of the Premises for storage or any purpose other than access
to the Premises. Tenant shall not use, keep, or permit to be used or kept on the
Premises any foul or noxious gas or substance, nor shall Tenant do or permit to
be done anything in and about the Premises, either in connection with activities
hereunder expressly permitted or otherwise, which would cause an increase in
premiums for or a cancellation of any policy of insurance (including fire
insurance) maintained by Landlord in connection with the Premises or the
Building or which would violate the terms of any covenants, conditions, or
restrictions, or the design guidelines, or the sign guidelines affecting the
Building or the land on which it is located, or the Rules (as the term is
defined under Paragraph 6.3 (b) below).
(b) Tenant shall not attach any signage to or on any part of the
outside of the Premises, the Building or the Project, or in the halls, lobbies,
windows or elevator banks of the Building without Landlord's prior written
consent, which consent may be withheld in Landlord's sole discretion. Any
signage so permitted shall be subject to prior approval of and conformance with
the requirements of the design review committee of the Project and the design
review agency of the city. At Tenant's expense, Tenant shall (i) maintain all
permitted signage, and (ii) upon the expiration or termination of this Lease,
remove such signage and repair any damage caused by their removal. If Tenant
fails to do so, Landlord may maintain, repair or remove such signage without
notice to Tenant and at Tenant's expense, the cost of which shall be payable by
Tenant as additional rent in accordance with Paragraph 14(b)(2) below.
6.2 Suitability. Tenant acknowledges that neither Landlord nor any
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agent of Landlord has made any representation or warranty with respect to the
Premises or the Building or with respect to the suitability or fitness of either
for the conduct of Tenant's business or for any other purpose. Nor has Landlord
agreed to undertake any modification, alteration or improvement to the Premises
except as provided in this Lease. Tenant acknowledges that the Premises are
located in a 100-year flood zone and that the finished floor elevations of the
Building are designed to be at least two (2) feet above the federal government's
estimate of the 100-year flood level at the time of initial construction.
6.3 Use of Common Areas.
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(a) Landlord gives Tenant and its authorized employees, agents,
customers, representatives, and invitees the nonexclusive right to use the
Common Areas, with others who are entitled to use the Common Areas, subject to
Landlord's rights as set forth in this Paragraph 6.3.
(b) All Common Areas shall be subject to the exclusive control and
management of Landlord and Landlord shall have the right to establish, modify,
amend, and enforce reasonable rules and regulations with respect to the Common
Areas. Tenant acknowledges receipt of a copy of the current rules and
regulations, attached hereto as Exhibit C, and agrees that they may, from time
to time, be modified or amended by Landlord in a commercially reasonable manner
(the "Rules"). Tenant agrees to abide by and conform with such Rules; to cause
its concessionaires and its and their employees and agents to abide by such
Rules; and to use its best efforts to cause its customers, invitees, and
licensees to abide by such Rules.
(c) Landlord shall have the right to close temporarily any portion of
the Common Areas for the purpose of discouraging use by parties who are not
tenants or customers of tenants; to use portions of the Common Areas while
engaged in making additional improvements or repairs or alterations to the
Property; to use or permit the use of the Common Areas by others to whom
Landlord may grant or have granted such rights; and to do and perform such acts
in, to, and with respect to, the Common Areas as in the use of good business
judgment Landlord shall determine to be appropriate for the Project.
(d) Landlord shall have the unqualified right to increase or reduce
the Common Areas, provided the Project meets the parking requirement under
Paragraph 6.5 below.
(e) Tenant shall cooperate with Landlord and other tenants in the
Project in recycling waste paper, cardboard, or such other materials identified
under any trash recycling program that may be established in order to reduce
trash collection costs.
6.4 Environmental Matters.
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(a) (1) The term "Hazardous Materials" as used herein means any
petroleum products, asbestos, polychlorinated biphenyls, P.C.B.'s, chemicals,
compounds, materials, mixtures or substances that are now or hereafter defined
or listed in, or otherwise classified as a "hazardous substance" "hazardous
material" "hazardous waste", "extremely hazardous waste", "infectious waste"
"toxic substance", "toxic pollutant" or any other formulation intended to
define, list or classify substances by reason of deleterious properties such as
ignitability, corrosivity, reactivity, carcinogenicity or toxicity pursuant to
any federal, state or local environmental law, regulation, ordinance,
resolution, order or decree relating to industrial hygiene, environmental
protection or the use, analysis, generation, manufacture, storage, release,
disposal or transportation of the same ("Hazardous Materials Laws").
(2) Except for ordinary office supplies and janitorial cleaning
materials which in common business practice are customarily and lawfully used,
stored and disposed of in small quantities, and except for those Hazardous
Materials listed on Exhibit D attached hereto, Tenant shall not use,
manufacture, store, release, dispose or transport any Hazardous Materials in,
on, under or about the Premises, the Building or the Project without giving
prior written notice to Landlord and obtaining Landlord's prior written consent,
which consent Landlord may withhold in its sole discretion. Subject to
Landlord's prior written consent, Hazardous Materials may be added to Exhibit D
on an annual review basis; any such amendments to Exhibit D shall be signed by
each party and attached hereto. Tenant shall at its own expense procure,
maintain in effect, and comply with all conditions of
any and all permits, licenses, and other governmental and regulatory approvals
required in connection with Tenant's generation, use, storage, disposal and
transportation of Hazardous Materials. Except as discharged into the sanitary
sewer in strict accordance and conformity with all applicable Hazardous
Materials Laws, Tenant shall cause any and all Hazardous Materials removed from
the Premises to be removed and transported solely by duly licensed haulers to
duly licensed facilities for final disposal of such materials and wastes.
Regardless whether permitted under the Hazardous Materials Laws, Tenant shall
not maintain in, on, under, or about the Premises, the Building or the Project
any above or below ground storage tanks, clarifiers, or sumps, nor shall any
xxxxx for the monitoring of ground water, soils, or subsoils be allowed.
(3) Tenant shall immediately notify Landlord in writing of:
(a) any enforcement, cleanup, removal or other governmental or regulatory action
instituted, completed or threatened pursuant to any Hazardous Materials Law; (b)
any claim made or threatened by any person or entity against Tenant or the
Premises relating to damage, contribution, cost, recovery, compensation, loss or
injury, resulting from or claimed to result from any Hazardous Materials; and
(c) any reports, information, inquiries or demands made, ordered, or received by
or on behalf of Tenant which arise out of or in connection with the existence or
potential existence of any Hazardous Materials in, on, under or about the
Premises, the Building, or the Project, including, without limitation, any
complaints, notices, warnings, asserted violations, or mandatory or voluntary
informational filings with any governmental agency in connection therewith, and
immediately supply Landlord with copies thereof.
(b) Tenant shall indemnify, defend (by counsel reasonably acceptable
to Landlord), protect, and hold Landlord, and each of Landlord's partners,
officers, directors, partners, employees, affiliates, joint venturers, members,
trustees, owners, shareholders, principals, agents, representatives, attorneys,
successors and assigns, free and harmless from and against any and all claims,
liabilities, damages, fines, penalties, forfeitures, losses, cleanup and
remediation costs or expenses (including attorneys' fees) or death of or injury
to any person or damage to any property whatsoever, arising from or caused in
whole or in part, directly or indirectly, by (i) Tenant's use, analysis,
generation, manufacture, storage, release, disposal, or transportation of
Hazardous Materials by Tenant, Tenant's agents, employees, contractors,
licensees or invitees to, in, on, under, about or from the Premises, the
Building, or the Project, or (ii) Tenant's failure to comply with any Hazardous
Materials Law. Tenant's obligations hereunder shall include, without limitation,
and whether foreseeable or unforeseeable, all costs of any required or necessary
repair, cleanup, detoxification or decontamination of the Premises, the
Building, or the Project and the preparation and implementation of any closure,
remedial action or other required plans in connection therewith, and shall
survive the expiration or earlier termination of this Lease.
(c) Landlord shall have the right to enter the Premises during
regular business hours upon reasonable prior notice at all times for the
purposes of ascertaining compliance by Tenant with all applicable Hazardous
Materials Laws, provided, however, that in the instance of an emergency
Landlord's entry onto the Premises shall not be restricted to regular business
hours nor shall notice be required.
(d) Landlord shall have the option to declare a default of this Lease
for the release or discharge of Hazardous Materials by Tenant, Tenant's
employees, agents, contractors, or invitees on the Premises, Building or Project
or in violation of law or in deviation from prescribed procedures in Tenant's
use or storage of Hazardous Materials. If Tenant fails to comply with any of the
provisions under this Paragraph 6.4, Landlord shall have the right (but not the
obligation) to remove or otherwise cleanup any Hazardous Materials from the
Premises, the Building or the Project. In such case, the costs of any Hazardous
Materials investigation, removal or other cleanup (including, without
limitation, transportation, storage, disposal and attorneys' fees and costs)
will be additional rent due under this Lease, whether or not a court has ordered
the cleanup, and will become due and payable on demand by Landlord.
6.5 Parking. Landlord grants to Tenant and Tenant's customers,
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suppliers, employees and invitees a nonexclusive license to use unassigned and
unreserved parking spaces in the Common Areas for the use of motor vehicles
during the Term subject to rights reserved to Landlord as specified in this
Paragraph 6.5. Landlord reserves the right to grant similar nonexclusive and
unassigned and unreserved use to other tenants; to promulgate rules and
regulations relating to the use of the Common Areas including parking by tenants
and employees of tenants; to make changes in the parking layout from time to
time; and to do and perform any other acts in and to these areas and
improvements as Landlord determines to be advisable. Tenant agrees not to
overburden the parking facilities and to abide by and conform with the rules and
regulations and to cause its employees and agents to abide by and conform to the
rules and regulations. Upon request, Tenant shall provide Landlord with license
plate numbers of all vehicles driven by its employees and to cause Tenant's
employees to park only in spaces specifically designated for tenant parking.
Landlord shall have the unqualified right to rearrange or reduce the number of
parking spaces; provided, however, the ratio of the number of parking spaces
available to Tenant will be no less than four (4) spaces per 1,000 usable square
feet of the Premises.
7. Services.
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(a) Landlord shall furnish the Premises with electricity for lighting
and the operation of office machines, heat and air conditioning, lighting
replacement for building standard fixtures, restroom supplies, window washing
with reasonable frequency, and daily janitor service on normal business days.
Landlord shall not be in default hereunder or be liable for any damages directly
or indirectly resulting from, nor shall there be any Rent abatement by reason of
(i) the installation, use or interruption of use of any equipment in connection
with the furnishing of any of the foregoing services, (ii) failure to furnish or
delay in furnishing any such services, or (iii) the limitation, curtailment,
rationing or restrictions on use of water, electricity, gas or any other form of
energy serving the Premises, unless the damage or injury is caused by Landlord's
sole negligence or willful misconduct. Tenant shall reimburse Landlord for the
cost of providing heat and air conditioning in excess of that required for
normal office use or during other than usual business hours and the cost of
providing power for other than normal desk-top office equipment, collectable as
additional rent with the next installment of monthly Base Rent thereafter
falling due. Tenant shall reimburse Landlord for the cost of providing heat and
air conditioning, lighting, and electricity in excess of that required for
normal office use or during other than usual business hours, e.g., 8 a.m. to 7
p.m., Monday through Friday, collectable at the rate of $20.00 per hour. This
rate may be increased by Landlord, however, if the utility providing the power
increases its rates to Landlord or if Landlord, in its reasonable discretion,
determines that Tenant's power use is excessive when compared to normal office
use by a similar tenant in similar space.
8. Maintenance, Repairs and Alterations.
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(a) Tenant shall, at Tenant's expense, maintain every part of the
Premises in good order, condition and repair, including without limitation, (i)
all interior surfaces, ceilings, walls, door frames, window frames, floors,
carpets, draperies, window coverings and fixtures, (ii) all windows, doors,
locks and closing devices, entrances, plate glass, and signs, (iii) all plumbing
and sewage pipes, fixtures and fittings, (iv) all phone lines, electrical
wiring, equipment, switches, outlets, and lightbulbs, (v) any fire detection,
fire sprinkler or extinguisher equipment, (vi) all of Tenant's personal
property, improvements and alterations, and (vii) all other fixtures and special
items installed by or for the benefit of, or at the expense of Tenant. All
repairs or replacements required of Tenant shall be promptly made with new
materials of like kind and quality, and subject to Landlord's prior written
approval where any such repair or replacement work exceeds $200.00.
(b) Landlord shall, at Landlord's expense, keep in good condition and
repair the foundation, roof structure (excluding the roof membrane), exterior
walls and other structural parts of the Building not the obligation of Tenant or
any other tenant in the Building. Landlord shall keep in good condition and
repair all non-structural parts of the Building not the obligation of Tenant or
any other tenant in the Building (including, without limitation, the roof
membrane, lobby and elevators), and such expense shall be included in the
calculation of Operating Expenses payable by tenants within the Building. Tenant
expressly waives the benefits of any statute, including Civil Code Sections 1941
and 1942, which would afford Tenant the right to make repairs at Landlord's
expense or to terminate this Lease due to Landlord's failure to keep the
Building in good order, condition and repair. Landlord shall have no liability
to Tenant for any damage, inconvenience, or interference with the use of the
Premises by Tenant as the result of Landlord performing any such maintenance and
repair work.
(c) In the event Tenant fails to perform Tenant's obligations under this
Xxxxxxxxx 0, Xxxxxxxx may, but shall not be required to, give Tenant notice to
do such acts as are reasonably required to so maintain the Premises. If Tenant
shall fail to commence such work and diligently prosecute it to completion, then
Landlord shall have the right (but not the obligation) to do such acts and
expend such funds at the expense of Tenant as are reasonably required to perform
such work. Any amounts so expended by Landlord will be additional rent due under
this Lease, and such amounts will become due and payable on demand by Landlord.
Landlord shall have no liability to Tenant for any such damages, inconvenience,
or interference with the use of the Premises by Tenant as a result of performing
such work.
(d) Upon the expiration or earlier termination of this Lease, Tenant
shall surrender the Premises in good condition and repair, only ordinary wear
and tear excepted. Tenant, at its sole cost and expense, agrees to repair any
damages to the Premises caused by or in connection with the removal of any
articles of personal property, business or trade fixtures, signs, machinery,
equipment, cabinetwork, furniture, moveable partitions, or permanent
improvements or additions, including without limitation thereto, repairing the
floor and patching and painting the walls where required by Landlord, to
Landlord's reasonable satisfaction. Tenant shall indemnify Landlord against any
loss or liability resulting from delay by Tenant in so surrendering the
Premises, including without limitation, any claims made by any succeeding tenant
resulting from such delay.
(e) Tenant shall not make any alterations, improvements, or additions in,
on, or about the Premises without Landlord's prior written consent, except that
Tenant may make alterations, improvements, or additions without Landlord's prior
written consent where (i) the reasonably estimated cost does not exceed $2,500,
and (ii) such alterations, improvements, or additions do not affect or involve
the structural integrity, roof membrane, exterior areas, building systems, or
water-tight nature
of the Premises, the Building or the Project. In requesting Landlord's consent,
Tenant shall, at Tenant's sole cost, submit to Landlord complete drawings and
specifications describing such work and the identity of the proposed contractor
at least ten (10) business days prior to the commencement of any work.
With respect to any alterations, improvements or additions made
to the Premises by Tenant:
(1) Before commencing any work relating to alterations,
additions, or improvements affecting the Premises, Tenant shall notify Landlord
of the expected date of commencement thereof and of the anticipated cost
thereof. Landlord shall then have the right at any time and from time to time to
post and maintain on the Premises such notices as Landlord reasonably deems
necessary to protect the Premises and Landlord from mechanics' liens or any
other liens.
(2) Tenant shall pay when due all claims for labor or materials
furnished to Tenant for use in the Premises. Tenant shall not permit any
mechanics' liens or any other liens to be levied against the Premises for any
labor or materials furnished to Tenant in connection with work performed on the
Premises by or at the direction of Tenant. Tenant shall indemnify, hold harmless
and defend Landlord (by counsel reasonably satisfactory to Landlord) from any
liens and encumbrances arising out of any work performed or materials furnished
by, or at the direction of Tenant. In the event that Tenant shall not, within
twenty (20) days following the imposition of any such lien, cause such lien to
be released of record by payment or posting of a proper bond, Landlord shall
have, in addition to all other remedies provided herein by law, the right, but
not the obligation, to cause the same to be released by such means as it shall
deem proper, including payment of the claim giving rise to such lien. All such
sums paid by Landlord and all expenses incurred by it in connection therewith,
including attorneys' fees and costs, shall be payable to Landlord by Tenant on
demand with interest at the rate of ten percent (10%) per annum.
(3) All alterations, improvements or additions in or about the
Premises performed by or on behalf of Tenant shall be done in a first-class,
workmanlike manner, shall not unreasonably lessen the value of leasehold
improvements in the Premises, and shall be completed in compliance with all
applicable laws, ordinances, regulations and orders of any governmental
authority having jurisdiction thereover, as well as the requirements of insurers
of the Premises and the Building.
(4) Upon Landlord's request, Tenant shall remove any contractor,
subcontractor or material supplier from the Premises and the Building if the
work or presence of such person or entity results in labor disputes in or about
the Building or Project or damage to the Premises, Building or Project.
(5) Landlord, at Landlord's sole discretion, may refuse to grant
Tenant permission for alterations, improvements or additions which require,
because of application of Americans with Disabilities Act or other laws,
substantial improvements or alterations to be made to the Common Areas.
(6) Landlord may, up to sixty (60) days prior to the expiration
of the Term, require that Tenant, at Tenant's expense, remove any such
alterations, improvements or additions prior to or upon the expiration of this
Lease, and restore the Premises to their condition prior to such alterations,
improvements or additions.
(7) Unless Landlord requires their removal, as set forth above,
all alterations, improvements, or additions made to the Premises shall become
the property of Landlord and remain upon and be surrendered with the Premises
upon the expiration of this Lease; provided, however, that Tenant's machinery,
equipment, and trade fixtures, other than any which may be affixed to the
Premises so that they cannot be removed without material damage to the Premises,
shall remain the property of Tenant and may be removed by Tenant subject to the
provisions of Paragraph 8(d) above.
9. Construction of Tenant Improvements.
-----------------------------------
Landlord shall be responsible for constructing the tenant improvements
("Tenant Improvements") in the Premises, as provided in the Work Letter
Agreement, attached hereto as Exhibit B.
10. Insurance and Indemnity.
-----------------------
10.1 Insurance.
---------
(a) Tenant shall obtain and maintain during the Term
commercial general liability insurance with a combined single limit for personal
injury and property damage in an amount of not less than $2,000,000 (in a form,
with a deductible amount, and with carriers reasonably acceptable to Landlord)
and employer's liability and workers' compensation insurance as required by
law. The insurance carrier shall be authorized to do business in the State of
California, with a policyholders and financial rating of at least A:IX Class
status as rated in the most recent edition of Best's Key-Rating guide. Tenant's
comprehensive general liability insurance policy shall be endorsed to provide
that (i) it may not be canceled or altered in such a manner as to adversely
affect the coverage afforded thereby without thirty (30) days prior written
notice to Landlord, (ii) Landlord is designated as an additional insured, (iii)
the insurer acknowledges acceptance of the mutual waiver of claims by Landlord
and Tenant pursuant to Paragraph 10.2(b) below, and (iv) such insurance is
primary with respect to Landlord and that any other insurance maintained by
Landlord is excess and noncontributing with such insurance. If, in the opinion
of Landlord's lender or in the commercially reasonable opinion of Landlord's
insurance adviser, the specified amounts of coverage are no longer adequate,
such coverage shall, within 30 days written notice to Tenant, be appropriately
increased. Prior to the commencement of the Term, Tenant shall deliver to
Landlord a duplicate of such policy or a certificate thereof to Landlord for
retention by it, with endorsements. At least thirty (30) days prior to the
expiration of such policy or any renewal or modification thereof, Tenant shall
deliver to Landlord a replacement or renewal binder, followed by a duplicate
policy or certificate within a reasonable time thereafter. If Tenant fails to
obtain such insurance or to furnish Landlord any such duplicate policy or
certificate as herein required, Landlord may, at its election, without notice to
Tenant and without any obligation to do so, procure and maintain such coverage
and Tenant shall reimburse Landlord on demand as additional rent for any premium
so paid by Landlord.
(b) Landlord waives all claims against Tenant, and Tenant's
officers, directors, partners, employees, agents and representatives for loss or
damage to the extent that such loss or damage is insured against under any valid
and collectable insurance policy insuring Landlord or would have been insured
against but for any deductible amount under any such policy. Tenant waives all
claims against Landlord, and Landlord's officers, directors, partners,
employees, affiliates, joint venturers, members, trustees, owners, shareholders,
principals, agents, representatives, successors and assigns, for loss or damage
to the extent such loss or damage is insured against under any valid and
collectable insurance policy insuring Tenant or required to be maintained by
Tenant under this Lease, or would have been insured against but for any
deductible amount under any such policy. The insuring party shall, upon
obtaining the policies of insurance required under this Lease, give notice to
the insurance carrier or carriers that the foregoing mutual waiver of
subrogation is contained in this Lease. Tenant agrees that in the event of a
sale, assignment or transfer of the Premises by Landlord, this waiver of
subrogation shall continue in favor of the original Landlord and any subsequent
Landlord.
(c) Tenant shall at its own cost maintain on all its personal
property, Tenant's improvements, and alterations, in, on, or about the Premises,
a policy of standard fire and extended coverage insurance, with vandalism and
malicious mischief endorsements, to the extent of at least one hundred percent
(100%) of their full replacement value. The proceeds from any such policy shall
be used by Tenant for the replacement of personal property and the restoration
of Tenant's improvements or alterations. Notwithstanding any other provisions of
the Lease, Landlord shall have no liability for damage to or destruction of
Tenant's personal property, regardless of whether the damage or destruction
results from the acts or omissions of Landlord.
(d) During the Term, Landlord shall keep the Building, and
improvements within which the Premises are located, insured against loss or
damage by (i) fire, with extended coverage and vandalism, malicious mischief and
special extended perils (all risk) endorsements or their equivalents, in amounts
not less than one hundred percent (100%) of the replacement cost of the Building
and structures insured, and (ii) flood, in the maximum amount provided for by
FEMA under its flood loss insurance program, with loss payable thereunder to
Landlord and to any authorized encumbrancer of Landlord (with standard mortgagee
loss payable clause) in accordance with their respective interests. Landlord may
maintain rent insurance, for the benefit of Landlord, equal to at least one
year's Base Rent hereunder. If the Lease is terminated as a result of damage by
fire, casualty or earthquake as set forth in this Paragraph 10, all insurance
proceeds shall be paid to and retained by Landlord, subject to the rights of any
authorized encumbrancer of Landlord.
(e) Tenant acknowledges that Landlord does not, at the time of
the signing of this Lease, insure the Building for earthquake damage. Landlord
may, when Landlord deems the premiums to be reasonable, insure the Building
fully or partially for earthquake damage. If Landlord obtains earthquake or any
other type of insurance, unless such insurance coverage was carried during the
base year, the Base year Operating Expenses will be "grossed-up" to include what
such insurance coverage would have cost had it been carried during the base
year.
10.2 Indemnity.
---------
(a) Tenant waives all claims against Landlord for damage to any
property or injury to or death of any person in, on, or about the Premises, the
Building, or any other portion of the Project arising at any time and from any
cause, unless caused by the active negligence or willful misconduct of Landlord,
its agents, employees, or contractors. Tenant shall indemnify, defend (by
counsel reasonably satisfactory to Landlord) and hold harmless Landlord, and
Landlord's officers, directors, partners, employees, affiliates, joint
venturers, members, trustees, owners, shareholders,
principals, agents, representatives, successors and assigns, from and against
all claims, costs, damages, actions, indebtedness and liabilities (except such
as may arise from the active negligence or willful misconduct of Landlord, and
Landlord's officers, directors, partners, employees, affiliates, joint
venturers, members, trustees, owners, shareholders, principals, agents,
representatives, successors and assigns) arising by reason of any death, bodily
injury, personal injury, property damage or any other injury or damage in
connection with (i) any condition or occurrence in or about or resulting from
any condition or occurrence in or about the Premises during the Term, or (ii)
any act or omission of Tenant, or Tenant's agents, representatives, officers,
directors, shareholders, partners, employees, successors and assigns, wherever
it occurs. The foregoing indemnity obligation of Tenant shall include reasonable
attorneys' fees, and all other reasonable costs and expenses incurred by
Landlord from the first notice that any claim or demand is to be made. The
provisions of this Paragraph 10.2 shall survive the termination or expiration of
this Lease with respect to any damage, injury, or death occurring prior to such
expiration or termination.
(b) Neither party shall be liable to the other for any
unauthorized or criminal entry of third parties into the Premises, Building,
Project, Common Areas, or parking facilities, or for any damage to person or
property, or loss of property in and about the Premises, Building, Project,
Common Areas, parking facilities and the approaches, entrances, streets,
sidewalks, stairs, elevators, restrooms, or corridors thereto, by or from any
unauthorized or criminal acts of third parties, regardless of any breakdown,
malfunction or insufficiency of any security measures, practices or equipment
provided by Landlord or Tenant. Tenant shall immediately notify Landlord in
writing of any breakdown or malfunction of any security measures, practices or
equipment provided by Landlord as to which Tenant has knowledge.
(c) Any diminution or interference with light, air or view by
any structure which may be erected on land adjacent to the Building or resulting
from any other cause shall in no way alter this Lease or impose any liability on
Landlord.
(d) Tenant agrees that in no event shall Landlord be liable for
consequential damages, including injury to Tenant's business or any loss of
income therefrom.
(e) In the event that Landlord or any successor owner of the
Building sells or conveys the Building, then all liabilities and obligations of
Landlord or the successor owner under this Lease accruing after the sale or
conveyance shall terminate and become binding on the new owner, and Tenant shall
release Landlord from all liability under this Lease (including, without
limitation, the Security Deposit, as defined under Paragraph 16 below), except
for acts or omissions of Landlord occurring prior to such sale or conveyance.
(f) Tenant expressly agrees that so long as Landlord is a
corporation, limited liability company, trust, partnership, joint venture,
unincorporated association or other form of business entity, (i) the obligations
of Landlord shall not constitute personal obligations of the officers,
directors, partners, employees, affiliates, joint venturers, members, trustees,
owners, shareholders, or other principals, agents or representatives of such
business entity ("Member of Landlord"), and (ii) Tenant shall have recourse only
to the interest of such business entity in the Building of which the Premises
are a part for the satisfaction of such obligations and not against the assets
of such Member of Landlord other than to the extent of their respective
interests in the Building. In this regard, Tenant agrees that in the event of
any actual or alleged failure, breach or default by Landlord of its obligations
under this Lease, that (i) no Member of Landlord shall be sued or named as a
party in any suit or action (except as may be necessary to secure jurisdiction
of Landlord), (ii) no judgment will be taken against any Member of Landlord, and
any judgment taken against any Member of Landlord may be vacated and set aside
at any time without hearing, (iii) no writ of execution will ever be levied
against the assets of any Member of Landlord, and (iv) these agreements by
Tenant are enforceable both by Landlord and by any Member of Landlord.
11. Damage or Destruction.
---------------------
(a) Subject to the provisions of Paragraphs 11(b) and 11(c) below,
if, during the Term, the Premises are totally or partially destroyed from any
insured casualty, Landlord shall, within ninety (90) days after the destruction,
commence to restore the Premises to substantially the same condition as they
were in immediately before the destruction and prosecute the same diligently to
completion. Such destruction shall not terminate this Lease. Landlord's
obligation shall not include repair or replacement of Tenant's alterations or
Tenant's equipment, furnishings, fixtures and personal property. If the existing
laws do not permit the Premises to be restored to substantially the same
condition as they were in immediately before destruction, and Landlord is unable
to get a variance to such laws to permit the commencement of restoration of the
Premises within the 90-day period, then either party may terminate this Lease by
giving written notice to the other party within thirty (30) days after
expiration of the 90-day period.
(b) Despite the provisions of Paragraph 11 (a) above, Landlord may
decide within ninety (90) days after such destruction to demolish the Building
rather than rebuild it, in which case this Lease will terminate as of the date
of the destruction. Landlord shall give Tenant written notice of its intention
within ninety (90) days after the destruction.
(c) If any destruction occurs to the Premises during the last six (6)
months of the initial Term or during the last six (6) months of any extension
period, regardless of the nature and extent of the destruction, either, party
can elect to terminate this Lease within thirty (30) days after the destruction
occurs. If this Lease does not terminate pursuant to this Paragraph 11 (c), the
provisions of Paragraph 11(a) above shall apply.
(d) If the Premises are damaged from any uninsured casualty to any
extent whatsoever, Landlord may within ninety (90) days following the date of
such damage: (i) commence to restore the Premises to substantially the same
condition as they were in immediately before the destruction and prosecute the
same diligently to completion, in which event this Lease shall continue in full
force and effect; or (ii) within the 90-day period Landlord may elect not to so
restore the Premises, in which event this Lease shall cease and terminate. In
either such event, Landlord shall give Tenant written notice of its intention
within the 90-day period.
(e) In the event of destruction or damage to the Premises which
materially interferes with Tenant's use of the Premises, if this Lease is not
terminated as above provided, there shall be an abatement or reduction of Base
Rent between the date of destruction and the date Landlord substantially
completes its reconstruction obligations, based upon the extent to which the
destruction materially interferes with Tenant's use of the Premises. All other
obligations of Tenant under this Lease shall remain in full force and effect.
Except for abatement of Base Rent, Tenant shall have no claim against Landlord
for any loss suffered by Tenant due to damage or destruction of the Premises or
any work of repair undertaken as herein provided.
(f) The provisions of California Civil Code Sections 1932(2) and
1933(4), and any successor statutes, are inapplicable with respect to any
destruction of the Premises, such sections providing that a lease terminates
upon the destruction of the Premises unless otherwise agreed between the parties
to the contrary.
12. Eminent Domain.
--------------
(a) If all or any part of the Premises shall be taken as a result of
the exercise of the power of eminent domain, this Lease shall terminate as to
the part so taken as of the date of taking. In the case of a partial taking of
greater than fifty percent (50%) of the rentable area of the Premises, either
Landlord or Tenant shall have the right to terminate this Lease as to the
balance of the Premises by notice to the other within thirty (30) days after the
date of the taking. In the event of a partial taking of the Premises which does
not result in a termination of this Lease, the monthly Base Rent thereafter to
be paid shall be equitably reduced on a square footage basis. If the continued
occupancy of Tenant is materially interfered with for any time during the
partial taking, notwithstanding the partial taking does not terminate this Lease
as to the part not so taken, the Base Rent shall proportionately xxxxx so long
as Tenant is not able to continuously occupy the part remaining and not so
taken.
(b) All compensation awarded or paid upon a total or partial taking
of the fee title shall belong to Landlord whether such compensation be awarded
or paid as compensation for diminution in value of the leasehold or of the fee
except: Tenant shall retain and have a claim for the following, to the extent
specifically designated by the condemning authority: (i) the unamortized value
over the Term of Tenant's leasehold improvements (to the extent Landlord has not
contributed to the cost thereof); (ii) that portion (if any) of the award made
to Landlord as a result of removing fixtures, removable by Tenant herein, under
the terms of this Lease but which are required to be taken by the condemnor or
are so acquired by the condemnor; and (iii) all relocation assistance, moving
and relocation expenses to the extent (if any) provided by the condemning
authority directly to Tenant.
13. Assignment and Subletting.
-------------------------
(a) Tenant shall not assign, sublet or hypothecate this Lease or any
interest herein or sublet the Premises or any part thereof or permit the use of
the Premises by any party other than Tenant without the prior written consent of
Landlord, which consent shall not be unreasonably withheld. Any of the foregoing
acts without Landlord's consent shall be void and shall, at the option of
Landlord, terminate this Lease. In connection with each consent requested by
Tenant, Tenant shall submit to Landlord the terms of the proposed transaction,
the identity of the parties to the transaction, the proposed documentation for
the transaction, current financial statements of any proposed assignee or
sublessee and all other information reasonably requested by Landlord concerning
the proposed transaction and the parties involved therein.
(b) As used in this Paragraph 13, the term "assign" or "assignment"
shall include, without limitation, any sale, transfer, or other disposition of
all or any portion of Tenant's estate under this Lease, whether voluntary or
involuntary, and whether by operation of law or otherwise, including any of the
following:
(1) if Tenant is a corporation or a limited liability company:
(A) any dissolution, merger, consolidation, or other reorganization of Tenant;
or (B) a sale or other transfer of more than fifty percent (50%) of the value of
the assets of Tenant; or (C) if Tenant is a corporation with fewer
than 500 shareholders, a sale or other transfer of a controlling percentage of
the capital stock of Tenant; or (D) if Tenant is a limited liability company, a
sale or other transfer of a controlling percentage of the interest in Tenant.
The phrase "controlling percentage" means the ownership of, and the right to
vote, stocks or interests possessing at least fifty percent (50%) of the total
combined voting power of the limited liability company or, in the case of a
corporation, of all classes of Tenant's stock issues, outstanding and permitted
to vote for the election of directors of the corporation;
(2) if Tenant is a trust, the transfer of more than fifty percent
(50%) of the beneficial interest of Tenant, or the dissolution of the trust;
(3) if Tenant is a partnership or joint venture, the withdrawal, or
the transfer of the interest, of any general partner or joint venturer or the
dissolution of the partnership or joint venture; and
(4) if Tenant is composed of tenants-in-common, the transfer of
interest of any cotenants or the partition or dissolution of the cotenancy.
(c) No sublessee shall have a right further to sublet, and any assignment
by a sublessee of its sublease shall be subject to Landlord's prior written
consent in the same manner as if Tenant were entering into a new sublease.
(d) Regardless of Landlord's consent, no subletting or assignment shall
release Tenant of Tenant's obligation, or alter the primary liability of Tenant
to pay the Rent and to perform all other obligations to be performed by Tenant
hereunder. The acceptance of Rent by Landlord from any other person shall not be
deemed to be a waiver by Landlord of any provisions hereof. Consent to one
assignment or subletting shall not be deemed consent to any subsequent
assignment or subletting. In the event of default by any assignee of Tenant or
any successor of Tenant in the performance of any of the terms hereof, Landlord
may proceed directly against Tenant without the necessity of exhausting remedies
against such assignee or successor.
(e) In the event Tenant shall assign or sublet the Premises or request
the consent of Landlord to any assignment or subletting, then Tenant shall
reimburse Landlord for reasonable costs and attorneys' fees incurred in
connection therewith in an amount not to exceed $1,000.00.
14. Default by Tenant.
-----------------
(a) The following events shall constitute events of default under this
Lease:
(1) a failure by Tenant to pay any Rent or to deliver an estoppel
certificate (as provided in Paragraph 17 below) where such failure continues for
five (5) days after written notice by Landlord to Tenant;
(2) the bankruptcy or insolvency of Tenant, any transfer by Tenant to
defraud creditors, any assignment by Tenant for the benefit of creditors, or the
commencement of any proceedings of any kind by or against Tenant under any
provision of the Federal Bankruptcy Act or under any other insolvency,
bankruptcy or reorganization act unless, in the event any such proceedings are
involuntary, Tenant is discharged from the same within sixty (60) days
thereafter; the appointment of a receiver for a substantial part of the assets
of Tenant; or the levy upon this Lease or any estate of Tenant hereunder by any
attachment or execution;
(3) the abandonment or vacation of the Premises;
(4) the discovery by Landlord that any financial statement given to
Landlord by Tenant, any assignee of Tenant, any subtenant of Tenant, any
successor in interest of Tenant or any guarantor of Tenant's obligation
hereunder, and any of them, was materially false; and
(5) a failure by Tenant to perform any of the terms, covenants,
agreements or conditions of this Lease to be observed or performed by Tenant
(excluding any event of default under Paragraph 14(a)(1) above), where such
failure continues for thirty (30) days after written notice thereof by Landlord
to Tenant; provided, however, that if the nature of the default is such that the
same cannot reasonably be cured within the 30-day period, Tenant shall not be
deemed to be in default if Tenant shall within such period commence such cure
and thereafter diligently prosecute the same to completion.
(b) In the event of any material default or breach by Tenant, Landlord
may at any time thereafter, without limiting Landlord in the exercise of any
right or remedy at law or in equity which Landlord may have by reason of such
default or breach:
(1) Pursue the remedy described in California Civil Code Section
1951.4 whereby Landlord may continue this Lease in full force and effect after
Tenant's breach and
abandonment and recover the Rent and any other monetary charges as they become
due, without terminating Tenant's right to sublet or assign this Lease, subject
only to reasonable limitations as herein provided. During the period Tenant is
in default, Landlord shall have the right to do all acts necessary to preserve
and maintain the Premises as Landlord deems reasonable and necessary, including
removal of all persons and property from the Premises, and Landlord can enter
the Premises and relet them, or any part of them, to third parties for Tenant's
account. Tenant shall be liable immediately to Landlord for all costs Landlord
incurs in reletting the Premises, including, without limitation, brokers'
commissions, expenses of remodeling the Premises required by the reletting, and
like costs. Reletting can be for a period shorter or longer than the remaining
Term.
(2) Pay or perform such obligation due (but shall not be obligated to
do so), if Tenant fails to pay or perform any obligations when due under this
Lease within the time permitted for their payment or performance. In such case,
the costs incurred by Landlord in connection with the performance of any such
obligation will be additional rent due under this Lease and will become due and
payable on demand by Landlord.
(3) Terminate Tenant's rights to possession by any lawful means, in
which case this Lease shall terminate and Tenant shall immediately surrender
possession of the Premises to Landlord. In such event Landlord shall be entitled
to recover from Tenant all damages incurred by Landlord by reason of Tenant's
default, including, without limitation, the following: (A) the worth at the time
of award of any unpaid Rent which had been earned at the time of such
termination; plus (B) the worth at the time of award of the amount by which the
unpaid Rent which would have been earned after termination until the time of
award exceeds the amount of such Rent loss that is proved could have been
reasonably avoided; plus (C) 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 Rent loss that is proved could be reasonably avoided;
plus (D) any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant's failure to perform its obligations under this
Lease or which in the ordinary, course of events would be likely to result
therefrom; plus (E) at Landlord's election, such other amounts in addition to or
in lieu of the foregoing as may be permitted from time to time by applicable
State law. Upon any such termination of Tenant's possessory interest in and to
the Premises, Tenant (and at Landlord's sole election, Tenant's sublessees)
shall no longer have any interest in the Premises, and Landlord shall have the
right to make any reasonable repairs, alterations or modifications to the
Premises which Landlord in its sole discretion deems reasonable and necessary.
The "worth at the time of award" of the amounts referred to in subparagraphs (A)
and (B) above is computed by allowing interest at the maximum rate an individual
is permitted by law to charge. The worth at the time of award of the amount
referred to in subparagraph (C) above is 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%).
(4) Pursue any other legal or equitable remedy available to Landlord.
Unpaid installments of Rent and other unpaid monetary obligations of Tenant
under the terms of this Lease shall bear interest from the date due at the rate
of ten percent (10%) per annum.
(c) In the event Tenant is evicted or Landlord takes possession of the
Premises by reason of any default by Tenant hereunder, Tenant hereby waives any
right of redemption or relief from forfeiture as provided by law.
(d) Even though Tenant has breached this Lease and abandoned the
Premises, this Lease shall continue in effect for so long as Landlord does not
terminate Tenant's right to possession, and Landlord may enforce all its rights
and remedies under this Lease, including the right to recover Rent as it becomes
due under this Lease. Acts of maintenance or preservation, efforts to relet the
Premises, or the appointment of a receiver upon initiative of Landlord to
protect Landlord's interest under this Lease, shall not constitute a termination
of Tenant's right to possession.
(e) In the event Tenant is in material default under any provision of
this Lease then, at Landlord's sole election: (i) Tenant shall not have the
right to exercise any available right, option or election under this Lease
("Tenant's Exercise Rights") if at such time Tenant is in default hereunder,
(ii) Tenant shall not have the right to consummate any transaction or event
triggered by the exercise of any of Tenant's Exercise Rights if at such time
Tenant is in default hereunder, and (iii) Landlord shall not be obligated to
give Tenant any required notices or information relating to the exercise of any
of Tenant's Exercise Rights hereunder.
15. Default by Landlord, Notice to Mortgagee.
----------------------------------------
Landlord shall not be in default unless Landlord, or the holder of any
mortgage, deed of trust or ground lease covering the Premises, fails to perform
obligations required of Landlord within a reasonable time, but in no event later
than thirty (30) days after written notice by Tenant to Landlord certified mail,
postage prepaid, and to the holder of any first mortgage, deed of trust or
ground lease covering the Premises whose name and address shall have been
furnished to Tenant in writing, specifying wherein Landlord has failed to
perform such obligations; provided, however, that if the nature of Landlord's
obligation is such that more than thirty (30) days are required for performance
then
Landlord shall not be in default if Landlord or the holder of any such mortgage,
deed of trust or ground lease commences performance within such 30-day period
and thereafter diligently prosecutes the same to completion. In no event shall
Tenant be entitled to terminate this Lease by reason of Landlord's default, and
Tenant's remedies shall be limited to an action for monetary damages at law.
16. Security Deposit.
----------------
On execution of this Lease, Tenant shall deposit with Landlord the sum
specified in the Basic Lease Information (the "Security Deposit"). The Security
Deposit shall be held by Landlord as security for the performance by Tenant of
all of the provisions of this Lease. If Tenant fails to pay Rent or other
charges due hereunder, or otherwise defaults with respect to any provision of
this Lease, Landlord may use, apply, or retain all or any portion of the
Security Deposit for the payment of any Rent or other charge in default, or the
payment of any other sum to which Landlord may become obligated by reason of
Tenant's default, or to compensate Landlord for any loss or damage which
Landlord may suffer thereby. If Landlord so uses or applies all or any portion
of the Security Deposit, then within ten (10) days after demand therefor Tenant
shall deposit cash with Landlord in an amount sufficient to restore the deposit
to the full amount thereof, and Tenant's failure to do so shall be a material
breach of this Lease. Landlord shall not be required to keep the Security
Deposit separate from its general accounts. If Tenant performs all of Tenant's
obligations hereunder, the Security Deposit, or so much thereof as has not
theretofore been applied by Landlord, shall be returned, without payment of
interest for its use, to Tenant (or, at Landlord's option to the last assignee,
if any, of Tenant's interest hereunder) at the expiration of the Term, and after
Tenant has vacated the Premises. No trust relationship is created herein between
Landlord and Tenant with respect to the Security Deposit.
17. Estoppel Certificate.
--------------------
(a) Tenant shall within ten (10) days of notice from Landlord execute,
acknowledge and deliver to Landlord a statement certifying (i) 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) the amount of the Security Deposit, (iii) the date to
which the Rent has been paid, (iv) acknowledging that there are not, to Tenant's
knowledge, any uncured defaults on the part of Landlord hereunder, or specifying
such defaults, if any are claimed, and (v) such other matters as may reasonably
be requested by Landlord. Any such statement may be conclusively relied upon by
any prospective purchaser or encumbrancer of the Building.
(b) Tenant's failure to deliver such statement within such time shall be
conclusive upon Tenant, (i) that this Lease is in full force and effect, without
modification except as may be represented by Landlord, (ii) that there are no
uncured defaults in Landlord's performance, and (iii) that not more than one
month's Base Rent has been paid in advance.
(c) If Landlord desires to finance or refinance the Building, Tenant
agrees to deliver to any lender designated by Landlord such financial statements
of Tenant as may be reasonably required by such lender. All such financial
statements shall be received by Landlord in confidence and shall be used for the
purposes herein set forth.
18. Subordination.
-------------
This Lease, at Landlord's sole option, shall be subordinate to any ground
lease, mortgage, deed of trust, or any other hypothecation for security now or
hereafter placed upon the Building and to any and all advances made on the
security thereof and to all renewals, modifications, consolidations,
replacements, refinancings and extensions thereof. Notwithstanding such
subordination, Tenant's right to quiet possession of the Premises shall not be
disturbed if Tenant is not in default and so long as Tenant shall pay the Rent
and observe and perform all of the provisions of this Lease, unless this Lease
is otherwise terminated pursuant to its terms. If any mortgagee, trustee, or
ground lessor shall elect to have this Lease prior to the lien of its mortgage,
deed of trust or ground lease, and shall give notice thereof to Tenant, this
Lease shall be deemed prior to such mortgage, deed of trust, or ground lease,
whether this Lease is dated prior to or subsequent to the date of said mortgage,
deed of trust or ground lease or the date of recording thereof. If any mortgage
or deed of trust to which this Lease is subordinate is foreclosed or a deed in
lieu of foreclosure is given to the mortgagee or beneficiary, Tenant shall
attorn to the purchaser at the foreclosure sale or to the grantee under the deed
in lieu of foreclosure; if any ground lease to which this Lease is subordinate
is terminated, Tenant shall attorn to the ground lessor. Tenant agrees to
execute any documents required to effectuate such subordination or to make this
Lease prior to the lien of any mortgage, deed of trust or ground lease, as the
case may be, or to evidence such attornment. Any such document of attornment
shall also provide that the successor shall not disturb Tenant in its use of the
Premises in accordance with this Lease.
19. Attorneys' Fees.
---------------
In the event legal action is initiated by either party, the prevailing
party shall be entitled to recover all costs and expenses incurred in such
action, including, without limitation, reasonable attorneys' fees and costs,
including attorneys' fees incurred at trial and on appeal, if any.
20. Notices.
-------
All notices, consents, demands, and other communications from one party to
the other given pursuant to the terms of this Lease shall be in writing and
shall be personally delivered, delivered by courier service, sent via facsimile
(confirmation receipt required), or deposited in the United States mail,
certified or registered, postage prepaid, and addressed as follows: To Tenant at
the address specified in the Basic Lease Information or to such other place as
Tenant may from time to time designate in a notice to Landlord; to Landlord at
the address specified in the Basic Lease Information, or to such other place and
to such other parties as Landlord may from time to time designate in a notice to
Tenant. All notices shall be effective upon delivery or refusal of delivery.
21. General Provisions.
------------------
(a) This Lease shall be governed by and construed in accordance with the
internal laws of the State of California, notwithstanding any choice of law
statutes, regulations, provisions or requirements to the contrary.
(b) The invalidity of any provision of this Lease, as determined by a
court of competent jurisdiction, shall in no way affect the validity of any
other provision hereof.
(c) This Lease including attached Exhibits, Addenda, and Basic Lease
Information contains all agreements and understandings of the parties and
supersedes and cancels any and all prior or contemporaneous written or oral
agreements, instruments, understandings, and communications of the parties with
respect to the subject matter herein. This Lease, including the attached
Exhibits, Addenda, and Basic Lease Information, may be modified only in a
writing signed by each of the parties.
(d) No waiver of any provision hereof by either party shall be deemed by
the other party to be a waiver of any other provision, or of any subsequent
breach of the same provision. Landlord's or Tenant's consent to, or approval of,
any act shall not be deemed to render unnecessary the obtaining of Landlord's or
Tenant's consent to, or approval of, any subsequent act by the other party.
(e) If Tenant remains in possession, with the expressed consent of
Landlord, of all or any part of the Premises after the expiration of the Term,
such tenancy shall be from month to month only, and not a renewal hereof or an
extension for any further term, and in such case, Rent shall be payable in the
amount of the last month's Base Rent and all other charges under the Lease and
such month-to-month tenancy shall be subject to every other term, covenant and
agreement contained herein.
(f) Subject to the provisions of this Lease restricting assignment or
subletting by Tenant, this Lease shall bind the parties, their personal
representatives, successors, and assigns.
(g) Upon reasonable prior notice to Tenant (which notice shall not be
required in the event of an emergency), Landlord and Landlord's representatives
and agents shall have the right to enter the Premises during regular business
hours for the purpose of inspecting the same, showing the same to prospective
purchasers or lenders, and making such alterations, repairs, improvements, or
additions to the Premises, the Building or the Common Areas as Landlord may deem
necessary or desirable. Landlord may at any time during the last one hundred
twenty (120) days of the Term place on or about the Premises any ordinary "For
Lease" sign. Landlord may at any time place on or about the Premises any
ordinary "For Sale" sign.
(h) The voluntary or other surrender of this Lease by Tenant, the mutual
cancellation thereof or the termination of this Lease by Landlord as a result of
Tenant's default shall, at the option of Landlord, terminate all or any existing
subtenancies or may, at the option of Landlord, operate as an assignment to
Landlord of any or all of such subtenancies.
(i) If Tenant is a corporation, limited liability company 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 the
corporation, company or partnership in accordance with, where applicable, a duly
adopted resolution of the board of directors of the corporation, the vote of the
members of the limited liability company or the vote of the partners within the
partnership, and that this Lease is binding upon the corporation, company or
partnership in accordance with its respective articles of incorporation and
bylaws, operating agreement or partnership agreement.
(j) Time is expressly declared to be of the essence of this Lease and of
each and every covenant, term, condition, and provision hereof, except as to the
conditions relating to the delivery of possession of the Premises to Tenant.
(k) If there is more than one party comprising Tenant, the obligations
imposed on Tenant shall be joint and several.
(l) The language in all parts of this Lease shall be in all cases
construed as a whole according to its fair meaning and not strictly for nor
against either Landlord or Tenant.
(m) As used in this Lease and whenever required by the context thereof,
each number, both singular and plural, shall include all numbers and in each
gender shall include all genders. Landlord and Tenant, as used in this Lease or
in any other instrument referred to in or made a part of this Lease, shall
likewise include both the singular and the plural, a corporation, limited
liability company, partnership, individual or person acting in any fiduciary
capacity as executor, administrator, trustee or in any other representative
capacity.
(n) The Exhibits and Addendum, if any, specified in the Basic Lease
Information are attached to this Lease and by this reference made a part hereof.
22. Force Majeure.
-------------
Any delay in construction, repairs, or rebuilding any building, improvement
or other structure herein shall be excused and the time limit extended to the
extent that the delay is occasioned by reason of acts of God, labor troubles,
laws or regulations of general applicability, acts of Tenant or Tenant Delays
(as the term is defined in the Work Letter Agreement attached hereto as Exhibit
B), or other occurrences beyond the reasonable control of Landlord. Accordingly,
Landlord's obligation to perform shall be excused for the period of the delay
and the period for performance shall be extended for a period equal to the
period of such delay.
23. Broker's Fee.
------------
Each party represents that it has not had dealings with any real estate
broker, finder, or other person, with respect to this Lease in any manner,
except the brokerage firm(s) specified in the Basic Lease Information. Each
party shall hold harmless the other party from all damages resulting from any
claim that may be asserted against the other party by any broker, finder, or
other person with whom the other party has or purportedly has dealt. Landlord
shall pay any commissions or fees that are payable to the broker or finder
specified in the Basic Lease Information, with respect to this Lease in
accordance with the provisions of a separate commission contract.
24. Financial Statement.
-------------------
It is acknowledged by all parties hereto that the attached financial
declaration of Tenant is incorporated as a part of this Lease as Exhibit E, that
the information contained therein is true and correct in all material respects,
and that the accuracy of the information is a significant fact upon which
Landlord has relied in the granting of this Lease.
IN WITNESS WHEREOF, the parties have executed this Lease on the date first
mentioned above.
TENANT: LANDLORD:
Fiberlane Communications G & W/Xxxxxx Redwood Business Park, L.P.
a Delaware corporation a limited partnership
By: /s/ Xxxxxxx Xxxxxxxx By: /s/ G& W Management Co.
-------------------------------- Its: Manager
Print Name: Xxxxxxx Xxxxxxxx
------------------------
Its: CEO By: /s/ Xxxxxxx X. Xxxxx
-------------------------------- ---------------------------------
Xxxxxxx X. Xxxxx, President
G & W Management Co.
ADDENDUM NO. 1
1. Base Rent:
Lease Year $/Sq.Ft. $/Sq.Ft. Total Monthly
15,000 5,985 Base Rent
------------------------------------------------------------------------------------------------------
1 (mos. 1-3) $1.50 $0.00 $22,500
------------------------------------------------------------------------------------------------------
1 (mos. 4-9) $1.60 $0.75 $28,489
------------------------------------------------------------------------------------------------------
1 (mos. 10 - 12) $1.65 $34,626
------------------------------------------------------------------------------------------------------
2 $1.70 $35,675
------------------------------------------------------------------------------------------------------
3 $1.75 $36,724
------------------------------------------------------------------------------------------------------
4 $1.80 $37,773
------------------------------------------------------------------------------------------------------
5 $1.85 $38,823
------------------------------------------------------------------------------------------------------
6 & 7 $1.85 plus CPI
Min. 3% Max. 5%
------------------------------------------------------------------------------------------------------
At the start of the six lease year and each year of the term thereafter
there will be a rental adjustment based on the percentage increase in the
Consumer Price Index For All Urban Consumers, San Francisco-Oakland-San
Xxxx, All Items (1982-1984=100), as published by the U.S. Bureau of Labor
Statistics ("Index"). The "Beginning Index" shall be the Index published
most immediately preceding the last Base Rent adjustment. The "Adjustment
Index" shall be the Index published most immediately preceding the
Adjustment Date. The monthly Base Rent until the next Base Rent adjustment
shall be determined by multiplying the monthly Base Rent then currently
being paid by a fraction, the numerator of which is the Adjustment Index
and the denominator of which is the Beginning Index. However, in no event
will the monthly Base Rent be increased by an amount less than 3% per year
or more than 5% per year. If the 1982-1984 base of the Index is changed,
the new base shall be converted to the 1982-1984 base in accordance with
the U.S. Department of Labor's conversion factor, and the base as so
converted shall be used. If the U.S. Department of Labor ceases to publish
the Index, then the successor index designated by the U.S. Department of
Labor or, if no successor index is so designated, the most nearly
comparable index shall be used.
2. Temporary Expansion Premises:
Landlord shall provide Tenant temporary space of at least 4,000 - 5,000
s.f. of contiguous space at Redwood Business Park on a month to month basis
until occupancy of the premises at 0000 Xxxxx XxXxxxxx Xxxxxxxxx. Tenant
shall accept the premises in "as is" condition and the rent shall be
$.50/sf./month. Tenant's obligations and Landlord's exculpatory provisions
under the Lease shall apply to this temporary tenancy.
3. Option To Extend:
Tenant is given the option to extend the term on all the provisions
contained in this Lease, for one five (5) year period ("Extended Term")
following expiration of the initial Term, by giving written notice of
exercise of the option ("Option Notice") to Landlord at least six (6)
months before the expiration of the term. Provided that, if Tenant is in
default on the date of giving the Option Notice and any applicable cure
period has expired, the option notice shall be totally ineffective, or if
Tenant is in default on the date the Extended Term is to commence, the
Extended Term shall not commence and this Lease shall expire at the end of
the initial term.
At the start of the first lease year of the Extended Term and each year of
the Extended Term thereafter there will be a rental adjustment based on the
percentage increase in the Consumer Price Index For All Urban Consumers,
San Francisco-Oakland-San Xxxx, All Items (1982-1984=100), as published by
the U.S. Bureau of Labor Statistics ("Index"). The "Beginning Index" shall
be the Index published most immediately preceding the last Base Rent
adjustment. The "Adjustment Index" shall be the Index published most
immediately preceding the Adjustment Date. The monthly Base Rent until the
next Base Rent adjustment shall be determined by multiplying the monthly
Base Rent then currently being charged by a fraction, the numerator of
which is the Adjustment Index and the denominator of which is the Beginning
Index. However, in no event will the monthly Base Rent be increased by an
amount less than 3% per year or more than 5% per year. If the 1982-1984
base of the Index is changed, the new base shall be converted to the 1982-
1984 base in accordance with the U.S. Department of Labor's conversion
factor, and the base as so converted shall be used. If the U.S. Department
of Labor ceases to publish the Index, then the successor index designated
by the U.S. Department of Labor or, if no successor index is so designated,
the most nearly comparable index shall be used.
Tenant shall have no other right to extend the term beyond the Extended
Term.
4. Right of Early Termination:
Tenant shall have the right to terminate the Lease effective as of the last
day of the sixtieth (60th) Lease Month, provided that on or before the
last day of the forty-eighth (48th) Lease Month, Tenant gives Landlord
written notice ("Preliminary Notice") that Tenant needs to have a total of
at least 40,000 rentable square feet ("Replacement Premises") under lease
by the sixty-eighth (68th) Lease Month.
(a) Such right of termination shall automatically expire and be null and
void if all of the following are satisfied within sixty (60) days
following Landlord's receipt of the Preliminary Notice:
(1) Landlord is able to commit to placing Tenant in such additional
space within the Redwood Business Park by the sixty-eighth (68th)
Lease Month, on a site selected by Landlord. The Replacement
Premises may be in different buildings, or on different floors as
long as such buildings or floors are adjacent and as long as they
are in increments of at least 20,000 square feet. The Replacement
Premises may include the existing Premises.
(2) Landlord and Tenant must enter into a binding new lease, with
respect to Tenant's entire 40,000 or more rentable square foot
space needs ("New Lease"). The New Lease shall have a term of at
least five (5) years. This Lease shall terminate as of the
commencement date of the New Lease. Landlord and Tenant shall
diligently and in good faith negotiate the terms of the New
Lease, such that, subject to subparagraph (a)(3) below and except
for a right of early termination, the terms and conditions of the
New Lease are substantially similar to those of the Lease.
(3) The monthly Base Rent per rentable square foot of the entire
40,000 or more rentable square feet of space ("New Lease Rent")
shall be calculated as follows:
(A) Within fifteen (15) days after a site has been designated
under paragraph (a)(1) above, Landlord and Tenant shall meet
to establish an agreed-upon New Lease Rent for each year of
the New Lease.
(B) If the parties cannot reach agreement on a New Lease Rent,
then, within five (5) days thereafter, Landlord and Tenant
shall appoint a mutually acceptable commercial appraiser or
broker to establish
the New Lease Rent, based upon the "Prevailing Market Rate"
(as the term is defined below), within fifteen (15) days
after such person's appointment. In such case, the New Lease
Rent for the New Lease shall be calculated at ninety-five
percent (95%) of the Prevailing Market Rate. Any associated
costs of the appraiser or broker shall be split equally
between Landlord and Tenant.
(C) In any event, the New Lease Rent during each twelve (12)
month period of the New Lease shall not be less than the
Base Rent in effect immediately prior to the month preceding
the twelve (12) month period at issue (without regard to any
temporary abatement of Base Rent then or previously in
effect under the Lease).
(b) The "Prevailing Market Rate" shall mean the then-prevailing monthly
base rental rate per rentable square foot of lease space for similar
size spaces in similar quality buildings within the City of Petaluma,
with a duration comparable to the term of the New Lease, based on
recently consummated lease transactions.
(c) If all of the conditions set forth in paragraph (a) above are not
satisfied within the 60-day period, then Tenant may elect to terminate
the Lease, provided that Tenant gives Landlord written notice thereof
within ten (10) days after expiration of the 60-day period ("Final
Notice"). Tenant must accompany the Final Notice with a termination
payment, in cash, equal to five months Base Rent at the amount being
charged as Base Rent when the Final Notice is delivered. If Tenant
fails to satisfy any of the conditions set forth in this paragraph
(c), then Tenant's right of early termination shall automatically
expire and Tenant shall no longer have any option or right of early
termination.
(d) Tenant's right of early termination shall be personal to Tenant and
shall not be transferable with any assignment of the Lease or
subletting of the Premises. At Landlord's sole election, Tenant shall
be barred from delivering a Preliminary Notice or Final Notice if (i)
Tenant has not been in continuous occupancy (no sublessees, no
assignees in possession) of the Premises, or (ii) Tenant is currently
in default under any provision of the Lease.
5. Expansion Option:
Tenant shall have the right to expand into the balance of the Building (the
"Expansion Space") by providing notice (the "Expansion Notice") to Landlord
of its election to do so at any time prior to September 1, 1998.
(a) Following receipt of the Expansion Notice, Landlord and Tenant shall
have thirty (30) days in which to negotiate an amendment to this Lease
to incorporate the Expansion Space into the Premises, set a new Base
Rent for the Expansion Space, and set a new Term. The amendment shall
also include the following provisions:
(1) Landlord shall provide a roll-up door for the purpose of loading
and unloading trucks or delivery vehicles at a convenient
location in the Expansion Space;
(2) The early termination right of Tenant set forth in paragraph 4
above shall be deemed waived;
(3) Tenant shall provide for its own power (gas and electricity) for
the entire Premises; in consideration, the Base Rent on the
existing Premises shall be reduced fifteen cents (15c) per
rentable square foot per month; the Base Rent negotiated on the
Expansion Space will already reflect that Tenant is providing and
paying for this utility; and
(4) Landlord shall have until February 1, 1999 to deliver occupancy
of the Expansion Space, but Tenant may occupy sooner if Landlord
notifies Tenant that the Expansion Space will be ready before
that time.
(b) If the Expansion Notice is not timely given, then Tenant shall vacate,
upon fifteen (15) days notice from Landlord, the lobby and corridor
space (the "Reception Area") which is shown as shaded area on Exhibit
B-2. Until such notice is given by Landlord, Tenant has the exclusive
right to occupy the Reception Area without any additional charge for
Base Rent. Following the notice by Landlord and vacation by Tenant,
the Reception Area and adjacent restrooms shall become Common Area for
the Building and its other tenants. The cost of changing the Reception
Area into Common Area shall be included as part of the Tenant
Improvement Allowance or, if the Tenant Improvement Allowance is
insufficient, shall be paid for by Tenant, in cash, upon completion.
6. Right Of First Offer:
If Tenant has not previously exercised its Expansion Option under paragraph
5 above, then upon expiration of the Expansion Option, Tenant shall have a
right of first offer with respect to the Expansion Space or any portion of
it ("Right of First Offer"). Pursuant to Tenant's Right of First Offer,
after September 1, 1998 and during the remaining term of the Lease Landlord
shall first offer Tenant the Expansion Space or portion of it pursuant to
such terms as Landlord may request prior to marketing the lease space to
third parties ("First Offer Notice"). Tenant may exercise its Right of
First Offer upon the terms described in the First Offer Notice by: (1)
providing Landlord with written thereof within ten (10) days after
Landlord's delivery to Tenant of the First Offer Notice; and (2) executing
a lease agreement pursuant to the terms set forth in the First Offer Notice
within thirty (30) days after Landlord's delivery to Tenant of the First
Offer Notice. If Tenant does not comply with either of the preceding
preconditions, then Landlord shall be relieved of Landlord's obligation to
lease the Expansion Space to Tenant and the provisions of this paragraph 6
shall not apply to Landlord unless Landlord has not leased the Expansion
Space within twelve (12) months after the latest First Offer Notice. Tenant
acknowledges that its Right of First Offer shall be subordinate to any pre-
existing third party lease or extension rights on the Expansion Space.
Tenant's Right of First Offer shall be personal to Tenant and shall not be
transferable with any assignment of the Lease or subletting of the
Premises.
7. Assignment and Subletting:
Tenant shall have the right to assign and/or sublet the Premises upon
Landlord's prior written consent. Such written consent shall not be
unreasonably withheld.
8. Building Signage:
Tenant shall be allowed to install, at their sole cost and expense, signage
on the building fascia in accordance with the Redwood Business Park Sign
Guidelines.
[FLOOR PLAN APPEARS HERE]
Exhibit A
Floor Plan
[SITE PLAN APPEARS HERE]
Exhibit A-1
Site Plan
EXHIBIT B
---------
WORK LETTER AGREEMENT
THIS WORK LETTER AGREEMENT supplements that certain Lease dated April 22,
--------
1998 ("Lease"), executed by G & W/Xxxxxx Redwood Business Park, L.P., a limited
----
partnership, as Landlord, and Fiberlane Communications, a Delaware corporation
as Tenant. All capitalized terms not otherwise defined herein shall have the
same meaning as those capitalized terms contained in the Lease.
1. Landlord shall be responsible for constructing within the Premises the
tenant improvements ("Tenant Improvements") described in the preliminary space
plan attached hereto as Exhibit B-1 ("Preliminary Space Plan"). The Tenant
Improvements for the Premises will be more particularly described in the plans
and construction drawings ("Construction Drawings") as approved below. Any
additional work ("Tenant Extra Improvements") required under the approved
Construction Drawings shall be at Tenant's expense.
2. Landlord and Tenant shall diligently finalize the Preliminary Space
Plan for construction of the Tenant Improvements and Tenant Extra Improvements
so that, within thirty (30) days after execution of the Lease, Landlord can
provide Tenant with the Construction Drawings. The Construction Drawings shall
indicate the specific requirements of Tenant's lease space, outlining in detail
interior partitions, floor coverings, a reflected ceiling plan, plumbing
fixtures, and electrical plans (setting forth the electrical requirements of
Tenant), all in conformity with the Preliminary Space Plan. The Construction
Drawings shall include full energy calculations as required by the State of
California and the city agencies.
3. Within three (3) days after receipt of the Construction Drawings,
Tenant shall approve the drawings and/or request changes or modifications
thereto. Any such request for changes or modifications shall be subject to
Landlord's approval and, thereafter, the Construction Drawings shall be
resubmitted for Tenant's approval in accordance with the preceding sentence.
Tenant acknowledges that the Construction Drawings are subject to the approval
of the appropriate government authorities. It shall be Tenant's responsibility
to ensure that the design and function of the Tenant Improvements and Tenant
Extra Improvements are suitable for Tenant's business and needs. The
improvements shall be constructed in accordance with current building standards,
laws, regulations, ordinances and codes. Landlord shall not be required to
install any Tenant Improvements or Tenant Extra Improvements which do not
conform to the Construction Drawings.
4. Landlord shall furnish and install the units and quantities of Tenant
Improvements as set forth on Exhibit B-1. The Tenant Improvements to be paid by
Landlord shall not exceed Four Hundred Seventy-six Thousand Nine Hundred Fifty
Dollars ($476,950) ($25.00 per usable square foot) of lease space within the
Premises and shall include:
(a) The costs of the Preliminary Space Plan (including one revision
thereto) and final Construction Drawings and engineering costs associated with
completion of the State of California energy utilization calculations under
Title 24 legislation; and
(b) The costs of obtaining building permits and other necessary
authorizations from the city, county and the State of California.
Any additional units, quantities or costs of the Tenant Improvements
required in accordance with the approved Construction Drawings shall be deemed
Tenant Extra Improvements and shall be paid for by Tenant at the unit cost set
forth in a summary of unit costs to be provided by Landlord.
5. In no event shall the Tenant Improvements payable by Landlord include
(i) the costs of procuring or installing any trade fixtures, equipment,
furniture, furnishings, telephone or computer equipment or wiring or other
personal property ("Personal Property"), or (ii) any Change Orders (as the term
is defined in Paragraph 6 below). Such items shall be paid by Tenant.
6. Following Tenant's approval of the Construction Drawings, Tenant may
request changes or modifications thereto ("Change Order"), however, the cost of
any Change Order(s) shall be borne by Tenant. If Tenant shall request any Change
Order, then Landlord shall promptly give Tenant a written estimate of (a) the
cost of engineering and design services to prepare the Change Order, (b) the
cost of work to be performed pursuant to the Change Order, and (c) the time
delay expected because of such requested Change Order. Within three (3) days
after Tenant's receipt of the written estimate, Tenant shall notify Landlord in
writing whether it approves the written estimate. If Tenant approves the written
estimate, then Tenant shall accompany its approval with a check made payable to
Landlord in the amount of the estimated cost of the Change Order. Upon
Landlord's completion of the Change Order and submission of the final cost
thereof to Tenant, Tenant shall promptly pay to Landlord any additional amounts
incurred in excess of the written estimate. If such written authorization and
check are not received by Landlord, then Landlord shall not be obligated to
commence work on the Premises and Tenant shall be chargeable for any delay in
the completion of the Premises in accordance with Paragraph 7 below.
7. If the Commencement Date of the Lease has not occurred on or before the
Estimated Commencement Date, and if the cause of the delay in the occurrence of
the Commencement Date is attributable to Tenant, then the Lease shall begin on
the date the Commencement Date otherwise would have occurred but for the Tenant
delays. Delays attributable to Tenant ("Tenant Delays") shall include, without
limitation, those caused by (a) delays by Tenant in approving the Construction
Drawings and costs, (b) Tenant's request for special materials not available
when needed for construction in accordance with the construction schedule, (c)
Change Orders, and (d) interference with Landlord's work caused by Tenant or
Tenant's agents. All costs and expenses occasioned by a Tenant Delay, including,
without limitation, increases in labor or materials, shall be borne by Tenant.
8. Tenant may, with Landlord's written consent, enter the Premises prior
to the Commencement Date solely for the purpose of installing its Personal
Property as long as such entry will not interfere with the orderly construction
and completion of the Premises ("Tenant's Work"). Tenant shall notify Landlord
of its desired time(s) of entry and shall submit for Landlord's written approval
the scope of the Tenant's Work to be performed and the name(s) of the
contractor(s) who will perform such work. Tenant agrees to indemnify, defend and
hold harmless Landlord, any mortgagee, ground lessor or beneficiary of a deed of
trust encumbering, secured by or affecting the Premises or the Building, from
and against any and all claims, actions, losses, liabilities, damages, costs or
expenses (including, without limitation, reasonable attorneys' fees and claims
for worker's compensation) of any nature whatsoever, arising out of or in
connection with the Tenant's Work (including, without limitation, claims for
breach of warranty, personal injury or property damage).
9. During the course of construction, at Tenant's expense, Tenant shall
obtain or maintain public liability and worker's compensation insurance, in
amounts acceptable to Landlord, and which name Landlord and Tenant as parties
insured from and against any and all liability for death of or injury to person
or damage to property caused in or about or by reason of the construction of the
Tenant's Work.
10. Upon substantial completion of the Premises in accordance with the
Construction Drawings, Tenant agrees to accept the Premises in the condition
which it may then be and waives any right or claim against Landlord for any
cause directly or indirectly arising out of the condition of the Premises,
appurtenances thereto, improvements thereon, and equipment therein. Tenant shall
hold harmless Landlord from and against any liability or damage as provided
under Paragraph 10.2 of the Lease. Landlord shall not be liable for any latent
or patent defects therein, except that Landlord warrants the Premises against
latent defects for a period of one (1) year from the date of substantial
completion.
11. Tenant releases Landlord from any claim whatsoever for damages against
Landlord for any delay in the date on which the Premises shall be ready for
occupancy by Tenant.
12. The Premises shall be deemed "substantially completed" as of the date
that all of the following conditions are satisfied:
(a) The Tenant Improvements have been substantially completed in
accordance with the approved Construction Drawings (except for those punch list
items referenced in Paragraph 12 below), such that Tenant can reasonably conduct
business within the Premises; and
(b) A certificate of occupancy and/or finalized building permit has
been issued for the Premises.
(c) All base building facilities shall be in good operating order and
shall comply and conform with the design specifications furnished by Tenant; the
base building includes the following items: restrooms, a first floor lobby and
elevator cabs, HVAC units on the roof which are distributed to each floor,
sprinkler systems which are distributed around each floor (but with no drop
heads), electrical equipment in the first floor electrical room and electrical
panels on each floor, and a card-key security system for access to all Building
common area exterior doors.
13. Tenant shall immediately prior to occupancy inspect the Premises and
compile and furnish Landlord with an initial punch list of any missing or
deficient Tenant Improvements. Within the first thirty (30) days after delivery
of the Premises, Tenant shall make a final punch list and submit this list to
Landlord. Landlord shall use its best efforts to complete the corrective work in
a prompt, good and xxxxxxx-like manner. Punch list corrections shall not delay
the Commencement Date, nor shall a delay in making corrections be grounds for a
delay or reduction in any rent payments due Landlord.
14. All floor area calculations are from the center line of the partitions
and the outside line of the exterior and hall walls. No deduction is allowed for
the columns, sprinkler risers, roof drains, or air conditioning units serving
Tenant and located within the Premises.
15. Landlord shall select the manufacturer and vendor of all building
materials and equipment with respect to the Tenant Improvements and Tenant Extra
Improvements to be constructed hereunder.
TENANT LANDLORD:
Fiberlane Communications G & W/Xxxxxx Redwood Business Park,
L.P.
a Delaware corporation a limited partnership
By: /s/ Xxxxxxx Xxxxxxxx By: G & W Management Co.
----------------------------------
Its: Manager
Print Name: /s/ Xxxxxxx Xxxxxxxx
---------------------------
Its: CEO By: /s/ Xxxxxxx X. Xxxxx
-------------------------------- -------------------------------
Xxxxxxx X. Xxxxx, President
G & W Management Co.
PLEASE SEE ATTACHED
EXHIBIT B-1
SPACE PLAN
[FLOOR PLAN APPEARS HERE]
EXHIBIT B-2
EXHIBIT C
RULES AND REGULATIONS
It is further agreed that the following Rules and Regulations shall be and are
hereby made a part of this Lease, and Tenant agrees that Tenant's employees and
agents, or any others permitted by Tenant to occupy or enter the Premises, will
at all times abide by said Rules and Regulations, unless otherwise specified or
provided for in the Lease, to wit:
1. The driveways, entrances and exits to the Property, sidewalks,
passages, building entries, lobbies, corridors, stairways, and elevators of the
Building shall not be obstructed by Tenant, or Tenant's agents or employees, or
used for rely purpose other than ingress and egress to and from the Premises.
Tenant or Tenant's agents or employees shall not loiter on the lawn areas or
other common areas of the Property.
(a) Furniture, freight equipment and supplies will be moved in or out
of the Building only through the rear service entrances or other entrances
designated by Landlord and then only during such hours and in such manner as may
be reasonably prescribed by Landlord. Tenant shall cause its movers to use only
the loading facilities, and entrances designated by Landlord. In the event
Tenant's movers damage any part of the Building or Property, Tenant shall
forthwith pay to Landlord the amount required to repair said damage.
(b) No safe or article, the weight of which may in the opinion of
Landlord constitute a hazard to or damage to the Building or the Building's
equipment, shall be moved into the Premises without Landlord's prior written
approval, but such consent or approval shall not be unreasonably withheld,
conditioned or delayed. Landlord and Tenant shall mutually agree to the location
of such articles in the Premises. All damage done to the Property, Building or
Premises by putting in, taking out or maintaining extra heavy equipment shall be
repaired at the expense of Tenant.
(c) Landlord reserves the right to close and keep locked any and all
entrances and exits of the Building and Property and gates or doors closing the
parking areas thereof during such hours as Landlord may deem advisable for the
adequate protection of the Property and all tenants therein.
2. Except as otherwise provided for in the Lease, no sign, advertisement
or notice shall be inscribed, painted or affixed on any part of the inside or
outside of the Building unless of such color, size and style and in such place
upon or in the Building as shall be first approved in writing by Landlord. No
furniture or other materials shall be placed in front of the Building or in any
lobby or corridor, without the prior written consent of Landlord. Landlord shall
have the right to remove all non permitted signs and furniture, without notice
to Tenant.
3. Tenant shall not employ any person or persons other than the janitor
or cleaning contractor of Landlord for the purpose of cleaning or taking care of
the Premises without the prior written consent of Landlord, which shall not be
unreasonably withheld, conditioned or delayed. Except as otherwise provided in
the Lease, Landlord shall in no way be responsible to Tenant for any loss of
property from the Premises, however occurring. The janitor of the Building may
at all times keep a pass key, and other agents of Landlord shall at all times be
allowed admittance to the Premises in accordance with the provisions set forth
in the Lease.
4. Water closets and other water fixtures shall not be used for any
purpose other than that for which the same are intended, and any damage
resulting to the same from misuse on the part of Tenant or Tenant's agents or
employees, shall be paid for by Tenant. No person shall waste water by tying
back or wedging the faucets or in any other manner.
5. No animals except seeing-eye dogs or other animals necessary to the
functioning of handicapped personnel shall be allowed on the lawns or sidewalks
or in the offices, halls, and corridors of the Building.
6. No persons shall disturb the occupants of this or adjoining buildings
or premises by the use of any radio, sound equipment or musical instrument or by
the making of loud or improper noises, nor interfere in any way with the other
tenants or those having business with them. Should
sound mitigation measures be required due to sounds originating in the Premises,
the costs of such measures shall be paid for by Tenant.
7. Bicycles or other vehicles, other than wheel chairs, shall not be
permitted in the offices, halls, corridors and lobbies in the Building nor shall
any obstruction of sidewalks or entrances of the Building by such be permitted.
8. Tenant shall not allow anything to be placed on the outside of the
Building, nor shall anything be thrown by Tenant or Tenant's agents or
employees, out of the windows or doors, or down the corridors, ventilation ducts
or shafts of the Building. Tenant, except in case of fire or other emergency,
shall not open any outside window.
9. No awnings shall be placed over any window or entrance.
10. All garbage, including wet garbage, refuse or trash shall be placed by
Tenant in the receptacles designated by Landlord for that purpose. Tenant shall
not burn any trash or garbage at any time in or about the leased Premises or any
area of the Property. Tenant and Tenant's officers, agents, and employees shall
not throw cigar or cigarette butts or other substances or litter of any kind in
or about the Property.
11. Tenant shall not install or operate any steam or gas engine or boiler,
or other machinery or carry on any mechanical business, other than such
mechanical business which normally is identified with general use in the
Premises. Explosives or other articles of an extra hazardous nature shall not be
brought into the Building complex.
12. Any painting or decorating as may be agreed to be done by and at the
expense of Landlord shall be done during regular weekday working hours. Should
Tenant desire such work on Saturdays, Sundays, holidays or outside of regular
working hours, Tenant shall pay for the extra cost thereof, if any.
13. Tenant and Tenant's agents and employees shall park their vehicles in
areas designated from time-to-time for employee parking.
14. Tenant shall not xxxx, drive nails, screw, bore, or drill into, paint
or in any way deface the common area walls, exterior walls, roof, foundations,
bearing walls, or pillars without the prior written consent of Landlord. The
expense of repairing any breakage, stoppage or damage resulting from a violation
of this rule shall be borne by Tenant.
15. No waiver of any rule or regulation by Landlord shall be effective
unless expressed in writing and signed by Landlord or his authorized agent.
16. Tenant shall be responsible for cleaning up any trash blowing around
their facility that may have been left by their customers or employees.
17. In the event of any conflict between these rules and regulations or
any further or modified rules and regulations from time to time issued by
Landlord, and the lease provisions, the lease provisions shall govern and
control.
18. Landlord reserves the right at any time to change or rescind any one
or more of these rules and regulations, or to make such other and further
reasonable rules and regulations as in Landlord's judgment may from time to time
be necessary for the management, safety, care and cleanliness of the Premises,
and for the preservation of good order therein, as well as for the convenience
of other tenants of the Property. Landlord shall not be responsible to Tenant or
to any other person for the non-observance or violation of the rules and
regulations by any other tenant or person. Tenant shall be deemed to have read
these rules and to have agreed to abide by them as a condition to its occupancy
of the space herein leased, and Tenant shall abide by any additional rules and
regulations which are ordered or requested by Landlord or by any governmental
authority.
EXHIBIT D
Materials Quantities
--------- ----------
Tenant agrees that:
(a) None of the above materials will be used, held or stored on or about
the Premises in quantities of greater than one (1) gallon each, or twenty (20)
pounds each in the case of non-liquid materials; provided, however, that used or
excess materials may be stored together in a fifty-five (55) gallon drum while
awaiting transport off the Premises for disposal.
(b) The materials listed on Page 1 to this Exhibit D shall be stored in
fire-proof lockers on the Premises in accordance with applicable laws,
regulations and ordinances. No storage outside the Premises will be permitted.
(c) No used or excess materials will be disposed of in, on, under or about
the Premises or Redwood Business Park. Instead, such materials shall be
transported off-site, no less often than every one hundred eighty (180) days, by
a duly licensed hazardous materials transporter. While waiting for transport
off-site for disposal, used or excess materials shall be stored in a safe
location on the Premises in secure containers which are appropriately labeled.
(d) No materials listed on Page 1 to this Exhibit D, regardless of whether
they are water-soluable, shall be flushed down any sanitary sewer drains on or
about the Premises or Redwood Business Park.
Exhibit E
Fiberlane Communications, Inc.
Balance Sheet - February 1998
(in US$)
--------------
Actual
--------------
ASSETS
Current Assets
Cash & Cash Equivalents 3,557,689
Other Current Assets 54,121
--------------
Total Current Assets 3,661,810
--------------
Property, Plant & Equipment 5,067,346
Accumulated Depreciation (873,874)
--------------
Net Property, Paint & Equipment 4,193,471
--------------
--------------
TOTAL ASSETS 7,805,282
--------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
--------------
Current Liabilities
Accounts Payable 674,109
Accrued Liabilities 127,746
Note Payable -
--------------
Total Current Liabilities 801,855
--------------
--------------
Long Term Liabilities
Capital Lease 2,446,521
Term Line 2,654,804
--------------
Total Long Term Liabilities 5,101,325
--------------
--------------
Total Liabilities 5,903,180
--------------
Equity
--------------
Common Stock 1,247,157
Preferred Stock 10,776,996
Warrants 1,078
Notes Receivable (316,196)
Retained Earnings (9,806,932)
--------------
--------------
Total Equity 1,902,102
--------------
--------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 7,805,281
--------------
AMENDMENT #1 TO
OFFICE LEASE AGREEMENT
This Amendment #1 to Office Lease Agreement is made this 21/st/ day of
January 1999, between G & W/Xxxxxx Redwood Business Park, L.P., a California
limited partnership, ("Landlord") and Cerent Corporation, a Delaware Corporation
and successor to Fiberlane Communications, a Delaware corporation ("Tenant").
Recitals
A. Landlord and Tenant entered into an Office Lease Agreement and Addendum
No. 1 dated April 23, 1998 ("the Lease") concerning 20,985 rentable square feet
of space located at 0000 Xxxxx XxXxxxxx Xxxxxxxxx, Xxxxxxxx, Xxxxxxxxxx ("the
Premises").
B. Tenant now desires to expand its Premises into the balance of the
building, provide for improvements, adjust the rent accordingly, cancel any
lease termination clauses, and change to a modified full service lease, as
hereinbelow provided.
NOW THEREFORE, in consideration of the mutual covenants herein
contained, the parties agree as follows:
1. The Premises shall be increased by 20,985 rentable s.f. at 0000 Xxxxx
XxXxxxxx Xxxxxxxxx as shown on the floor plan attached to this Amendment as
Exhibit A and incorporated by reference, ("Expansion Space") to bring the total
square footage of the Premises to 41,970 rentable square feet.
2. The lease term for the Expansion Space shall commence upon substantial
completion of the tenant improvements relating to the Expansion Space estimated
to be March 15, 1999, subject to reasonable delay due to circumstances beyond
Landlord's reasonable control. The term of the Lease shall increase so there are
Eight Years remaining on the term for the Premises (including the Expansion
Space).
3. Landlord shall construct the tenant improvements for the Expansion
Space and for the 1st Floor Space as outlined on Exhibits A & B (Floor Plans)
and Exhibit C (HVAC Scope of Work) on a turn-key basis, including space
planning, architectural and working drawings, and
1
permit costs; provided however, Tenant shall be responsible for payment of the
following Tenant Improvement costs:
(a) Tenant shall pay $30,000 to Landlord upon the commencement date of
the Expansion Space; and
(b) Tenant shall pay to Landlord $104,925 amortized over a period of
Eight Years, at an interest rate of Ten and 1/2 Percent (10.5%) per annum,
which cost is $1,620 per month. This payment is due on the first day of each
month following the commencement of the Expansion Space through the end of the
eight year term, at which time the entire balance will be paid in full. The
monthly installments to be paid by Tenant hereunder shall be deemed "additional
rent" due under this Lease and shall be paid by Tenant in addition to Tenant's
monthly Base Rent.
Any costs associated with any Tenant changes or additions to Exhibits A, B,
and C shall be the responsibility of Tenant. Any such additional tenant
improvements shall be subject to the general provisions of the Work Letter
Agreement (Exhibit B) and shall be processed as if they were Change Orders as
outlined in Paragraph 6 of the Work Letter Agreement.
4. Upon completion of the Expansion Space all gas and electrical costs for
the building shall be transferred into Tenant's name and Tenant shall be
responsible for all such costs.
5. The base rental rate for the Expansion Space shall be as follows:
Lease Year Rent s.f./Mo. Amortized Monthly
(20,985 s.f) T.I.'s Base Rent
--------------------------------------------------------------------------------
1 $1.55 $1,620 $34,147
--------------------------------------------------------------------------------
2 $1.60 $1,620 $35,196
--------------------------------------------------------------------------------
3 $1.65 $1,620 $36,246
--------------------------------------------------------------------------------
4 $1.70 $1,620 $37,295
--------------------------------------------------------------------------------
5 $1.75 $1,620 $38,344
--------------------------------------------------------------------------------
6, 7 & 8 $1.75 plus CPI plus $1,620
Min. 3% - Max 5%
2
At the start of the sixth lease year and each year of the term
thereafter there will be a rental adjustment based on the percentage increase in
the Consumer Price Index For All Urban Consumers, San Francisco-Oakland-San
Xxxx, All Items (1982-1984=100), as published by the U.S. Bureau of Labor
Statistics ("Index"). The "Beginning Index" shall be the Index published most
immediately preceding the last Base Rent adjustment. The "Adjustment Index"
shall be the Index published most immediately preceding the Adjustment Date. The
monthly Base Rent until the next Base Rent adjustment shall be determined by
multiplying the monthly Base Rent then currently being paid by a fraction, the
numerator of which is the Adjustment Index and the denominator of which is the
Beginning Index. However, in no event will the monthly Base Rent be increased by
an amount less than 3% per year or more than 5% per year. If the 1982-1984 base
of the Index is changed, the new base shall be converted to the 1982-1984 base
in accordance with the U.S. Department of Labor's conversion factor, and the
base as so converted shall be used. If the U.S. Department of Labor ceases to
publish the Index, then the successor index designated by the U.S. Department of
Labor or, if no successor index is so designated, the most nearly comparable
index shall be used.
6. Upon the assumption of the gas and electrical costs by Tenant, the Rent
for the existing premises shall be discounted by $0.15/s.f. per month for the
remainder of the term. The Base Year Expenses under Paragraph 4 of the Lease
shall be adjusted to reflect the deletion of the gas and electrical costs. In
addition, rent for the existing premises during the extended term shall continue
to increase per the CPI as outlined in Paragraph 1 of the Addendum to the Lease
dated April 22, 1998.
7. Upon the execution of this Lease Amendment #1, Tenant's right to
terminate the lease as provided in Paragraph 4 of addendum No. 1 to Redwood
Business Park Full Service Lease dated April 22, 1998, shall be null and void.
8. The security deposit for the Premises shall be increased by $32,527
upon execution of this Amendment for a total security deposit of $55,027.
3
9. The Expansion Space shall become part of the Premises and except as
otherwise provided in this Amendment to the contrary, each and every term,
condition, and covenant of the Lease shall remain in full force and effect.
Executed on the date above first mentioned at Petaluma, California.
LANDLORD TENANT
G & W/Xxxxxx Redwood Business Park, L.P., Cerent Corporation
a California limited partnership a Delaware corporation
By: G & W Management Co., Managing Agent By: /s/ Xxxx X. Xxxxx
---------------------
Print Name: Xxxx X. Xxxxx
-------------
By: /s/ Xxxxxxx X. Xxxxx Its: President and CEO
------------------------------------- -------------------
Xxxxxxx X. Xxxxx, President
4
[GRAPHIC APPEARS HERE]
Front Entrance Elevation
[GRAPHIC APPEARS HERE]
Front Right of Building Elevation
EXHIBIT C
HVAC Scope of Work
[LETTERHEAD OF CAL-AIR INC. APPEARS HERE]
--------------------------------------------------------------------------------
January 7, 1999
To: Vila Construction
Attn: Xxxxxx Xxxx
Re: Cerent Expansion
1450 No. XxXxxxxx
Dear Xxxxxx;
We are pleased to provide our proposal for the HVAC system for this project. Our
scope of work shall include the following installation:
Second floor raise existing ducting
To accommodate higher ceiling, raise approximately 360' of previously installed
rectangular ductwork to 10'-6" AFF and remove approximately 30' of return
ducting.
Second floor tenant improvement
Furnish-install (15) VAV (temperature control zone boxes, each with hot water
heating coil, supply-return registers, insulated ducting, hot water heating
piping, start-up of existing roof HVAC unit and balancing of system.
Our second floor T.I, quote includes a VAV control box for the large conference
room and VAV for each (4) small conference rooms.
First floor tenant improvement:
Furnish-install new VAV control box for new large conference room and CTAC room,
roof exhaust fan with registers and ducting in each new toilet room, shower, and
gym, add (8) new supply registers with related ducting, relocate existing
supply/return registers to accommodate now floor plan, reinstall existing
registers in areas with new ceiling grid and relocate (19) wall thermostats.
Per my conversation with Xxxxxxx Xxxxxx, the CTAC room does not require 24 hour
HVAC and the Lab does not have additional heat producing equipment which would
require additional HVAC.
Quotes include all material, sales tax, labor, and engineered mechanical drawing
required for permit.
[LETTERHEAD OF CERENT APPEARS HERE]
January. 20, 1999
Xx. Xxxxx X. Xxxx
0000 Xxxxxxx Xxx
Xxxxx 000
Xxxxxxxx, XX 00000
Dear Xxxxx:
Enclosed are two signed copies of the Lease Amendment, Exhibits A, B & C. and a
check for $32,527 representing the increased security deposit. We appreciate
your flexibility in structuring this lease and the cost concession made relative
to the expense of the bathroom/gym.
As you stated in our meeting on January 13, 1999, G&W's record of meeting
deadlines is excellent. Therefore, we are accepting the terms of the lease with
the following addition applied:
If G & W fails to substantially complete the "Expansion Space" such that
Cerent cannot begin occupancy by April 15, 1999, G & W agrees to pay Cerent a
penalty for late occupancy structured as follows:
- $1,000 per day for the first 10 business days of delay (subject to force
xxxxxx)
- $2,000 per day for the second 10 business days of delay
- $3,000 per day for all days thereafter
Also, as previously agreed with Xxxx Xxxxx, we are going to pursue the signage
for our Corporate Logo as represented on the attached page.
If this proposed addition is unacceptable, then we do not accept the Lease
Amendment as proposed.
If this proposed addition to the Lease Amendment is acceptable, please
acknowledge by depositing the security deposit check for $32,527 and returning
a signed copy of this letter to my attention.
Best regards,
/s/ Xxxx Xxxxx
Xxxx Xxxxx Accepted: /s/ Xxxxxxx X. Xxxxx
---------------------------
President and CEO G & W/Redwood Assoc.
REDWOOD BUSINESS PARK
FULL SERVICE LEASE
BASIC LEASE INFORMATION
1. Date April 22, 1998
------------------------------------------------------------------------------------------------------------
2. Landlord G & W/Xxxxxx Redwood Business Park, L.P., a limited partnership
------------------------------------------------------------------------------------------------------------
3. Tenant Fiberlane Communications, a Delaware corporation
------------------------------------------------------------------------------------------------------------
4. Premises REFERENCE
------------------------------------------------------------------------------------
a. Project Redwood Business Park Paragraph 1
b. Building 0000 X. XxXxxxxx Xxxx.
c. Address 0000 X. XxXxxxxx Xxxx.
d. Assessor's Parcel # 000-000-000
e. Suite N/A
f. Usable Sq. Ft. 19,078
g. Rentable Sq. Ft 20,985
------------------------------------------------------------------------------------
5. Term Paragraph 2
------------------------------------------------------------------------------------
a. Estimated Commencement Date June 15, 1998
b. Length of Term 7 years
------------------------------------------------------------------------------------
6. Base Rent Paragraph 3
------------------------------------------------------------------------------------
a. Monthly Base Rent See Addendum
b. Advanced Base Rent $22,500
(Paid Upon Lease Execution)
c. Adjustment Date of Monthly Base Rent Month 4
------------------------------------------------------------------------------------
7. Property Taxes and Operating Expenses Paragraph 4
------------------------------------------------------------------------------------
a. Base Year - Calendar Year of: 1999
b. Premises v. Building Sq. Ft. Ratio 20985/41970=50%
c. Premises v. Project Sq. Ft. Ratio N/A
------------------------------------------------------------------------------------------------------------
8. Security Deposit $22,500 Paragraph 16
------------------------------------------------------------------------------------
9. Tenant Improvements Turn key up $25.00/Sq.Ft. Exhibit B
------------------------------------------------------------------------------------
10. Use General office and research Paragraph 6
------------------------------------------------------------------------------------
11. Tenant's Address for Notices Paragraph 20
------------------------------------------------------------------------------------
0000 X. XxXxxxxx Xxxx.
Xxxxxxxx, XX 00000
-------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
12. Landlord's Address for Notices Paragraph 20
------------------------------------------------------------------------------------
G & W/Xxxxxx Redwood Business Park, L.P.
c/o G&W Management Co.
X.X. Xxx 000000
Xxxxxxxx, XX 00000-0000
0000 Xxxxxxx Xxx, Xxxxx 000
Xxxxxxxx, XX 00000
With a Copy to:
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
13. Real Estate Brokers Paragraph 23
------------------------------------------------------------------------------------
Xxxxxx & Coppin
--------------------------------------------------------------------------------
EXHIBITS AND ADDENDUM
--------------------------------------------------------------------------------
Addendum No. 1
Exhibit A: Diagram of Premises
Exhibit A-1: Diagram of the Project
Exhibit B: Work Letter Agreement
Exhibit B-1: Space Plan
Exhibit B-2: T.I. Reversion
Exhibit C: Rules and Regulations
Exhibit D: Hazardous Materials List
Exhibit E: Tenant's Financial Statement
