EXHIBIT 10.11
LEASE
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THIS LEASE is made this ____ day of ________________ 1997, by and between
XXXXXXXXXX-SAN XXXXX NO. 2, a California general partnership ("Landlord"), and
EXODUS COMMUNICATIONS, INC., a California corporation ("Tenant").
W I T N E S S E T H :
Landlord leases to Tenant and Tenant leases from Landlord those certain
premises outlined in red on Exhibit A (the "Premises") commonly known as 0000
Xxx Xxxxx Xxxxxxxxxx, Xxxxx Xxxxx, Xxxxxxxxxx, which Landlord and Tenant hereby
agree consists of approximately forty-seven thousand four hundred thirty-two
(47,432) square feet. As used herein the term "Project" shall mean and include
all of the land described in Exhibit B and all the buildings, improvements,
fixtures and equipment now or hereafter situated on said land.
Tenant covenants, as a material part of the consideration of this lease, to
perform and observe each and all of the terms, covenants and conditions set
forth below, and this lease is made upon the condition of such performance and
observance.
1. USE
Subject to the restrictions contained in paragraph 6 hereof, Tenant
shall use the Premises for general office and research and development uses and
shall not use or permit the Premises to be used for any other purpose.
2. TERM
The term shall be for five (5) years (unless sooner terminated as
hereinafter provided) and, subject to paragraph 3, shall commence on May 1, 1997
and end on April 30, 2002.
3. POSSESSION
(a) If Landlord for any reason cannot deliver possession of the
Premises to Tenant by the date of commencement set forth in paragraph 2, this
lease shall not be void or voidable, Landlord shall not be liable to Tenant for
any loss or damage on account thereof and Tenant shall not be liable for rent
until Landlord delivers possession of the Premises to Tenant. If the term
commences on a date other than the date specified in paragraph 2 above, then the
parties shall immediately execute an amendment to this lease stating the actual
date of commencement and the revised expiration date. The expiration date of
the term shall be extended by the same number of days that Tenant's possession
of the Premises was delayed from that set forth in paragraph 2.
(b) Tenant's inability or failure to take possession of the Premises
when delivery is tendered by Landlord shall not delay the commencement of the
term of this lease or Tenant's obligation to pay rent. Tenant acknowledges that
Landlord shall incur significant
expenses upon the execution of this lease, even if Tenant never takes possession
of the Premises, including without limitation brokerage commissions and fees,
legal fees and other professional fees. Tenant acknowledges that all of said
expenses shall be included in measuring Landlord's damages should Tenant breach
the terms of this lease.
(c) The Premises shall be delivered to Tenant in good, clean
condition, with all building systems in good working order and repair.
4. MONTHLY RENT
(a) Basic Rent. Tenant shall pay to Landlord as basic rent for the
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Premises, in advance and subject to adjustment as provided in paragraph 5, the
sum of Seventy-One Thousand One Hundred Forty-Eight Dollars ($71,148.00) on or
before the first day of the first full calendar month of the term and on or
before the first day of each and every successive calendar month. Basic rent
for any partial month shall be payable in advance and shall be prorated based on
the actual number of days during the lease term occurring in such month divided
by the total number of days in such month.
(b) Common Area Charges. In addition to the above basic rent and as
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additional rent, Tenant shall pay to Landlord, subject to adjustments and
reconciliation as provided in paragraph 16 of this lease, the sum of Nine
Thousand Five Hundred Thirty-Three and 83/100 Dollars ($9,533.83) on or before
the first day of the first full calendar month of the term and on the first day
of each and every successive calendar month, said sum representing Tenant's
estimated payment of its percentage share of common area charges as provided for
in paragraph 16 of this lease. Payment of common area charges for any partial
month shall be payable in advance and shall be prorated based on the actual
number of days during the lease term occurring in such month divided by the
total number of days in such month.
(c) Manner and Place of Payment. All payments of basic rent and
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common area charges shall be paid to Landlord, without deduction or offset, in
lawful money of the United States of America, at the office of Landlord at 0000
Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxx Xxxxx, Xxxxxxxxxx 00000, or to such other
person or place as Landlord may from time to time designate in writing.
(d) First Month's Rent. Concurrently with Tenant's execution of this
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lease, Tenant shall deposit with Landlord the sum of Seventy-One Thousand One
Hundred Forty-Eight Dollars ($71,148.00) to be applied against the basic rent
for the first lease month of the term.
(e) Security Deposit. Concurrently with Tenant's execution of this
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lease, Tenant shall deposit with Landlord the sum of Seventy-Eight Thousand Two
Hundred Sixty-Two and 80/100 Dollars ($78,262 82), which sum shall be held by
Landlord as a security deposit for the faithful performance by Tenant of all of
the terms, covenants and conditions of this lease to be kept and performed by
Tenant. If Tenant defaults with respect to any provision of this lease,
including but not limited to, the provisions relating to the payment of basic
rent and common area charges, Landlord may (but shall not be required to) use,
apply, or retain all or any part of this security deposit for the payment of any
amount which Landlord may spend by
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reason of Tenant's default or to compensate Landlord for any other loss or
damage which Landlord may suffer by reason of default. If any portion of said
deposit is so used, Tenant shall, within ten (10) days after written demand
therefor, deposit cash with Landlord in the amount sufficient to restore the
security deposit to its original amount; Tenant's failure to do so shall be a
material breach of this lease. Landlord shall not be required to keep this
security deposit separate from its general funds and Tenant shall not be
entitled to interest on such deposit. If Tenant is not in default at the
expiration or termination of this lease, the security deposit or any balance
thereof shall be returned to Tenant within fifteen (15) days after Tenant has
vacated the Premises. In the event of termination of Landlord's interest in
this lease, Landlord shall transfer said deposit to Landlord's successor in
interest, and Tenant agrees that Landlord shall thereupon be released from
liability for the return of such deposit or any accounting therefor; provided
Landlord's successor assumes the obligations of the Landlord under this lease.
In addition to the above cash security deposit, Tenant shall deliver to
Landlord within ten (10) days following Tenant's execution of this lease an
unconditional irrevocable letter of credit in the amount of Three Hundred
Thousand Dollars ($300,000.00) in favor of Landlord to secure the faithful
performance by Tenant of all of the terms, covenants and conditions of this
lease to be kept and performed by Tenant. Said letter of credit shall be
available by draft at sight, subject only to receipt by the bank of a notarized
statement from Xxxx X. XxXxxxxxxx or Xxxxxx X. Xxxx stating the amount demanded
as due and owing to Landlord, and shall otherwise be in a form reasonably
satisfactory to Landlord and Landlord's attorney and drawn upon such bank as
Landlord may approve. Said letter of credit shall by its terms expire not less
than one ( 1 ) year from the date issued, provided that unless Tenant deposits
with Landlord a cash security deposit of like amount, the letter of credit shall
be renewed for an additional period of not less than one (1) year. The amount of
the letter of credit shall be reduced by $60,000 at the end of each lease year,
such that the amount of the letter of credit during the term of the lease shall
be as follows:
Year 1 $ 300,000
Year 2 $ 240,000
Year 3 $ 180,000
Year 4 $ 120,000
Year 5 $ 60,000
The bank's written renewal of the letter of credit shall be delivered to
Landlord not less than sixty (60) days prior to the expiration of such letter of
credit. If Landlord does not receive such written renewal at least sixty (60)
days prior to the expiration date of the letter of credit, then Landlord shall
be entitled to make demand for the principal amount of said letter of credit
and, thereafter, hold such funds in accordance with the first paragraph of this
paragraph 4(e). Tenant's failure to so deliver, renew (including specifically
but not limited to the delivery to Landlord of such renewal not less than sixty
(60) days prior to expiration of the letter of credit) and maintain such letter
of credit shall be a material breach of this lease.
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If Tenant defaults in the performance of any provision of this lease to be
performed by Tenant, including without limitation the timely payment of basic
rent and direct expenses and other amounts due Landlord, Landlord may
immediately and without further notice resort to said letter of credit (or the
funds received therefrom) and use or apply all or any part of same to compensate
Landlord for any loss or expense occasioned thereby and for the payment of any
amount due Landlord under the terms of this lease. If any portion of said
letter of credit (or the funds received therefrom) is so used as specified
above, Tenant shall, within ten (10) days after written demand therefor, restore
the letter of credit (or the funds received therefrom) to its original amount,
and Tenant's failure to do so shall be a material breach of this lease.
Landlord's resort to said letter of credit (or use of the funds received
therefrom) shall in no way or manner constitute an acceptance of or waiver of
such default by Tenant; nor shall such resort or use terminate, or permit Tenant
to terminate, or constitute a forfeiture of, or be construed as an election by
Landlord to terminate, this lease; nor shall such resort or use affect
Landlord's remedies otherwise available under this lease or at law.
5. ADJUSTMENT OF BASIC RENT
The basic rent provided for in paragraph 4(a) shall be adjusted
periodically and the monthly basic rent for each period shall be as set forth
below:
Lease Months 1-12 $ 71,148.00 per month
Lease Months 13-24 $ 73,519.60 per month
Lease Months 25-36 $ 75,891.20 per month
Lease Months 37-48 $ 78,262.80 per month
Lease Months 49-60 $ 80,634.40 per month
6. RESTRICTION ON USE
Tenant shall not do or permit to be done in or about the Premises or
the Project, nor bring or keep or permit to be brought or kept in or about the
Premises or Project, anything which is prohibited by or will in any way increase
the existing rate of, or otherwise affect, fire or any other insurance covering
the Project or any part thereof, or any of its contents, or will cause a
cancellation of any insurance covering the Project or any part thereof, or any
of its contents. Tenant shall not do or permit to be done anything in or about
the Premises or the Project which will constitute waste or which will in any way
obstruct or interfere with the rights of other tenants or occupants of the
Project or injure or annoy them, or use or allow the Premises to be used for any
unlawful purpose, nor shall Tenant cause, maintain or permit any nuisance in or
about the Premises or the Project. No loudspeaker or other device, system or
apparatus which can be heard outside the Premises shall be used in or at the
Premises without the prior written consent of Landlord. Tenant shall not use
the Premises in any manner that will cause or emit any objectionable odor, noise
or light into the adjoining premises or Common Area. Tenant shall not do
anything on the Premises that will cause damage to the Project and Tenant shall
not overload the floor capacity of the Premises or the Project. No machinery,
apparatus or other appliance shall be used or operated in or on the Premises
that will in any manner injure, vibrate or shake the Premises. Landlord shall
be the sole judge, of whether such odor, noise, light or
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vibration is such as to violate the provisions of this paragraph. No waste
materials or refuse shall be dumped upon or permitted to remain upon any part of
the Premises or the Project except in trash containers placed inside exterior
enclosures designated for that purpose by Landlord, or where otherwise
designated by Landlord; and no toxic or hazardous materials shall be disposed of
through the plumbing or sewage system. No materials, supplies, equipment,
finished products or semi-finished products, raw materials or articles of any
nature shall be stored or permitted to remain outside of the building proper.
No retail sales shall be made on the Premises. Tenant shall comply with any
covenant, condition or restriction ("C.C. & R.s") affecting the Premises upon
notice thereof to Tenant.
7. COMPLIANCE WITH LAWS
Tenant shall, in connection with its use and occupation of the
Premises, at its sole cost and expense, promptly observe and comply with (i) all
laws, statutes, ordinances and governmental rules, regulations and requirements
of federal, state, county, municipal and other governmental authorities, now or
hereafter in effect, which shall impose any duty upon Landlord or Tenant with
respect to the use, occupancy or alteration to the Premises, (ii) with the
requirements of any board of fire underwriters or other similar body now or
hereafter constituted and (iii) with any direction or occupancy certificate
issued pursuant to law by any public authority; provided, however, that no such
failure shall be deemed a breach of these provisions if Tenant, immediately upon
notification, commences to remedy or rectify said failure. The judgment of any
court of competent jurisdiction or the admission of Tenant in any action against
Tenant (whether or not Landlord is a party thereto) that Tenant has violated any
such law, statute, ordinance or governmental rule, regulation, requirement,
direction or provision, shall be conclusive of that fact as between Landlord and
Tenant. This lease shall remain in full force and effect notwithstanding any
loss of use or other effect on Tenant's enjoyment of the Premises by reason of
any governmental laws, statutes, ordinances, rules, regulations and requirements
now or hereafter in effect.
8. ALTERATIONS
Tenant shall not make or suffer to be made any alteration, addition or
improvement to or of the Premises or any part thereof (collectively referred to
herein as "alterations") without (i) the prior written consent of Landlord, (ii)
a valid building permit issued by the appropriate governmental authority and
(iii) otherwise complying with all applicable laws, regulations and requirements
of governmental agencies having jurisdiction and with the rules, regulations and
requirements of any board of fire underwriters or similar body. Notwithstanding
the foregoing, Tenant may make non-structural alterations costing in the
aggregate less than $10,000 in any one year of the term without the prior
written consent of Landlord, provided that Tenant promptly informs Landlord in
writing of the nature of the alterations, the cost thereof and the contractor
engaged or proposed to be engaged to perform such work, and provided further
that all such work complies with clauses (ii) and (iii) above. Landlord's
consent to any requested alteration shall not create on the part of Landlord or
cause Landlord to incur any responsibility or liability for such alteration's
compliance with all laws, rules and regulations of federal, state, county,
municipal and other governmental authorities. Any alteration made by Tenant
(excluding moveable furniture and trade fixtures not attached to
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the Premises) shall at once become a part of the Premises and belong to
Landlord. Without limiting the foregoing, all heating, lighting, electrical
(including all wiring, conduit, outlets, drops, xxxx ducts, main and subpanels),
air conditioning, partitioning, drapery and carpet installations made by Tenant,
regardless of how attached to the Premises, together with all other alterations
that have become an integral part of the Project in which the Premises are a
part, shall be and become part of the Premises and belong to Landlord upon
installation and shall not be deemed trade fixtures and, subject to Landlord's
right to require removal and restoration as specified herein, shall remain upon
and be surrendered with the Premises at the termination of the lease.
If Landlord consents to the making of any alteration by Tenant, the same
shall be made by Tenant at its sole risk, cost and expense and only after
Landlord's written approval of any contractor or person selected by Tenant for
that purpose, and the same shall be made at such time and in such manner as
Landlord may from time to time designate. Tenant shall, if required by
Landlord, secure at Tenant's cost a completion and lien indemnity bond for such
work. Upon the expiration or sooner termination of the term, Landlord may, at
its sole option, require Tenant, at Tenant's sole cost and expense, to promptly
remove any such alteration made by Tenant and designated by Landlord to be
removed, repair any damage to the Premises caused by such removal and restore
the Premises to their condition prior to Tenant's alteration, normal wear and
tear excepted. Any moveable furniture and equipment or trade fixtures remaining
on the Premises at the expiration or other termination of the term shall become
the property of the Landlord; provided, however, in addition to all other
remedies available to Landlord at law or in equity, Landlord may (i) require
Tenant to remove same or (ii) remove same at Tenant's cost, and Tenant shall be
liable to Landlord for all damages incurred by Landlord related thereto.
If during the term any alteration, addition or change of the Premises is
required by law, regulation, ordinance or order of any public authority, due to
Tenant's particular use, occupancy or alteration of the Premises, Tenant, at its
sole cost and expense, shall promptly make the same. If during the term any
alteration, addition or change to the Premises which is not due to Tenant's
particular use, occupancy or alteration of the Premises, to the Common Area, or
to the Project in which the Premises is located is required by law, regulation,
ordinance or order of any public or quasi-public authority, and it is
impractical in Landlord's judgment for the affected tenants to individually make
such alteration, addition or change, Landlord shall make such alteration,
addition or change and the cost thereof shall be a common area charge and Tenant
shall pay its percentage share of such cost to Landlord as provided in paragraph
16.
9. REPAIR AND MAINTENANCE
By entry hereunder, Tenant accepts the Premises as being in good and
sanitary order, condition and repair. Except as expressly provided below,
Tenant shall at its sole cost keep and maintain the entire Premises and every
part thereof including, without limitation, the windows, window frames, plate
glass, glazing, elevators within the Premises, truck doors, doors and all door
hardware, the interior walls and partitions, lighting and the electrical,
mechanical, and plumbing systems. Tenant shall also repair and maintain the
heating and air conditioning systems (unless Landlord has elected to keep and
maintain the heating and air conditioning systems as provided below) which shall
include, without limitation, a periodic maintenance
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agreement with a reputable and licensed heating and air conditioning service
company. If Tenant's use of the heating and air conditioning systems is limited
to normal business hours (8:00 a.m. to 6:00 p.m.), such agreement shall provide
for service at least as often as every 60 days; if Tenant's use of the heating
or air conditioning systems extends beyond such normal business hours this
service shall be as often as may be required by Landlord and in any event such
service shall meet all warranty enforcement requirements of such equipment and
comply with all manufacturer recommended maintenance. Landlord may elect, at
its option, to keep and maintain the heating and air conditioning systems of the
Premises and in such event, Tenant shall pay to Landlord upon demand the full
cost of such maintenance.
Subject to the provisions of paragraph 17, Landlord shall keep and maintain
the roof, structural elements, foundation and exterior walls of the buildings
constituting the Project and Common Area in good order and repair. Tenant
waives all rights under and benefits of California Civil Code Sections 1932(1),
1941, and 1942 and under any similar law, statute or ordinance now or hereafter
in effect. The cost of the repairs and maintenance which are the obligation of
Landlord hereunder, including without limitation, maintenance contracts and
supplies, materials, equipment and tools used in such repairs and maintenance
shall be a common area charge and Tenant shall pay its percentage share of such
costs to Landlord as provided in paragraph 16; provided, however, that if any
repairs or maintenance is required because of an act or omission of Tenant, or
its agents, employees or invitees, Tenant shall pay to Landlord upon demand the
full cost of such repairs or maintenance.
10. LIENS
Tenant shall keep the Premises and the Project free from any liens
arising out of any work performed, materials furnished or obligations incurred
by Tenant, its agents, employees or contractors. Upon Tenant's receipt of a
preliminary twenty (20) day notice filed by a claimant pursuant to California
Civil Code Section 3097, Tenant shall immediately provide Landlord with a copy
of such notice. Should any lien be recorded against the Project, Tenant shall
give immediate notice of such lien to Landlord. In the event that Tenant shall
not, within ten (10) days following the imposition of such lien, cause the same
to be released of record, Landlord shall have, in addition to all other remedies
provided herein and by law, the right, but no 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 sums paid by Landlord for such purpose, and
all expenses (including attorneys' fees) incurred by it in connection therewith,
shall be payable to Landlord by Tenant on demand with interest at the rate of
twelve percent (12%) per annum or the maximum rate permitted by law, whichever
is less. Landlord shall have the right at all times to post and keep posted on
the Premises any notices permitted or required by law, or which Landlord shall
deem proper for the protection of Landlord, the Premises and the Project and any
other party having an interest therein, from mechanics' and materialmen's liens
and like liens. Tenant shall give Landlord at least fifteen (15) days prior
notice of the date of commencement of any construction on the Premises in order
to permit the posting of such notices. In the event Tenant is required to post
an improvement bond with a public agency in connection with any work performed
by Tenant on or to the Premises, Tenant shall include Landlord as an additional
obligee.
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11. INSURANCE
Tenant, at its sole cost and expense, shall keep in force during the
term (i) commercial general liability and property damage insurance with a
combined single limit of at least $2,000,000 per occurrence insuring against
personal or bodily injury to or death of persons occurring in, on or about the
Premises or Project and any and all liability of the insureds with respect to
the Premises or arising out of Tenant's maintenance, use or occupancy of the
Premises and all areas appurtenant thereto, (ii) direct physical loss-special
insurance covering the leasehold improvements in the Premises and all of
Tenant's equipment, trade fixtures, appliances, furniture, furnishings, and
personal property from time to time located in, on or about the Premises, with
coverage in the amount of the full replacement cost thereof, and (iii) Worker's
Compensation Insurance as required by law, together with employer's liability
coverage with a limit of not less than $1,000,000 for bodily injury for each
accident and for bodily injury by disease for each employee. Tenant's
commercial general liability and property damage insurance and Tenant's Workers
Compensation Insurance shall be endorsed to provide that said insurance shall
not be cancelled or reduced except upon at least thirty (30) days prior written
notice to Landlord. Further, Tenant's commercial general liability and property
damage insurance shall be primary and shall be endorsed to provide that Landlord
and XxXxxxxxxx Management Corporation, and their respective partners, officers,
directors and employees and such other persons or entities as directed from time
to time by Landlord shall be named as additional insureds for all liability
using ISO Bureau Form CG20111185 (or a successor form) or such other endorsement
form reasonably acceptable to Landlord; shall contain a severability of interest
clause and a cross-liability endorsement; shall be endorsed to provide that the
limits and aggregates apply per location using ISO Bureau Form CG25041185 (or a
successor form) or such other endorsement form reasonably acceptable to
Landlord; and shall be issued by an insurance company admitted to transact
business in the State of California and rated A+VIII or better in Best's
Insurance Reports (or successor report). The deductibles for all insurance
required to be maintained by Tenant hereunder shall be satisfactory to Landlord.
The commercial general liability insurance carried by Tenant shall specifically
insure the performance by Tenant of the indemnification provisions set forth in
paragraph 18 of this lease provided, however, nothing contained in this
paragraph 11 shall be construed to limit the liability of Tenant under the
indemnification provisions set forth in said paragraph 18. If Landlord or any
of the additional insureds named on any of Tenant's insurance, have other
insurance which is applicable to the covered loss on a contributing, excess or
contingent basis, the amount of the Tenant's insurance company's liability under
the policy of insurance maintained by Tenant shall not be reduced by the
existence of such other insurance. Any insurance carried by Landlord or any of
the additional insureds named on Tenant's insurance policies shall be excess and
non-contributing with the insurance so provided by Tenant.
Tenant shall, prior to the commencement of the term and at least thirty
(30) days prior to any renewal date of any insurance policy required to be
maintained by Tenant pursuant to this paragraph, provide Landlord with a
completed Certificate of Insurance, using a form acceptable in Landlord's
reasonable judgement, attaching thereto copies of all endorsements required to
be provided by Tenant under this lease. Tenant agrees to increase the coverage
or otherwise comply with changes in connection with said commercial general
liability, property damage, direct physical loss and Worker's Compensation
Insurance as Landlord or Landlord's lender
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may from time to time require.
Landlord shall obtain and keep in force a policy or policies of insurance
covering loss or damage to the Premises and Project, in the amount of the full
replacement value thereof, providing protection against those perils included
within the classification of "all risk" insurance, with increased cost of
reconstruction and contingent liability (including demolition), plus a policy of
rental income insurance in the amount of one hundred percent (100%) of twelve
(12) months' rent (including sums paid as additional rent) and such other
insurance as Landlord or Landlord's lender may from time to time require.
Landlord may, but shall not be obligated to, obtain flood and/or earthquake
insurance. Landlord shall have no liability to Tenant if Landlord elects not to
obtain flood and/or earthquake insurance. The cost of all such insurance
purchased by Landlord, plus any charges for deferred payment of premiums and the
amount of any deductible incurred upon any covered loss within the Project,
shall be common area charges and Tenant shall pay to Landlord its percentage
share of such costs as provided in paragraph 16. If the cost of insurance is
increased due to Tenant's use of the Premises, then Tenant shall pay to Landlord
upon demand the full cost of such increase.
Landlord and Tenant hereby mutually waive any and all rights of recovery
against one another for real or personal property loss or damage occurring to
the Premises or the Project, or any part thereof, or to any personal property
therein, from perils insured against under fire and extended insurance and any
other property insurance policies existing for the benefit of the respective
parties so long as such insurance permits waiver of liability and contains a
waiver of subrogation without additional premiums.
If Tenant does not take out and maintain insurance as required pursuant to
this paragraph 11, Landlord may, but shall not be obligated to, take out the
necessary insurance and pay the premium therefor, and Tenant shall repay to
Landlord promptly on demand, as additional rent, the amount so paid. In
addition, Landlord may recover from Tenant and Tenant agrees to pay, as
additional rent, any and all reasonable expenses (including attorney fees) and
damages which Landlord may sustain by reason of the failure of Tenant to obtain
and maintain such insurance, it being expressly declared that the expenses and
damages of Landlord shall not be limited to the amount of the premiums thereon.
12. UTILITIES AND SERVICE
Tenant shall pay for all water, gas, light, heat, power, electricity,
telephone, trash pickup, sewer charges and all other services supplied to or
consumed on the Premises. In the event that any service is not separately
metered or billed to the Premises, the cost of such utility service or other
service shall be a common area charge and Tenant shall pay its percentage share
of such cost to Landlord as provided in paragraph 16. In addition, the cost of
all utilities and services furnished by Landlord to the Common Area shall be a
common area charge and Tenant shall pay its percentage share of such cost to
Landlord as provided in paragraph 16.
If Tenant's use of any such utility or service is materially in excess of
the average furnished to the other tenants of the Project, and such utility or
service is not separately metered, then Tenant shall pay to Landlord upon
demand, as additional rent, the full cost of such excess
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use, or Landlord may cause such utility or service to be separately metered, in
which case Tenant shall pay the full cost of such utility or service and
reimburse Landlord upon demand for the cost of installing the separate meter.
Except if caused by Landlord's active negligence or willful misconduct,
Landlord shall not be liable for, and Tenant shall not be entitled to any
abatement or reduction of rent by reason of, the failure of any person or entity
to furnish any of the foregoing services when such failure is caused by
accident, breakage, repairs, strikes, lockouts or other labor disturbances or
labor disputes of any character, governmental moratoriums, regulations or other
governmental actions, or by any other cause, similar or dissimilar, beyond the
reasonable control of Landlord. In addition, Tenant shall not be relieved from
the performance of any covenant or agreement in this lease because of any such
failure, and no eviction of Tenant shall result from such failure.
13. TAXES AND OTHER CHARGES
All real estate taxes and assessments and other taxes, fees and
charges of every kind or nature, foreseen or unforeseen, which are levied,
assessed or imposed upon Landlord and/or against the Premises, building, Common
Area or Project, or any part thereof by any federal, state, county, regional,
municipal or other governmental or quasi-public authority, together with any
increases therein for any reason, shall be a common area charge and Tenant shall
pay its percentage share of such costs to Landlord as provided in paragraph 16.
By way of illustration and not limitation, "other taxes, fees and charges" as
used herein include any and all taxes payable by Landlord (other than state and
federal personal or corporate income taxes measured by the net income of
Landlord from all sources, and premium taxes), whether or not now customary or
within the contemplation of the parties hereto, (i) upon, allocable to, or
measured by the rent payable hereunder, including, without limitation, any gross
income or excise tax levied by the local, state or federal government with
respect to the receipt of such rent, (ii) upon or with respect to the
possession, leasing, operation, management, maintenance, alteration, repair, use
or occupancy by Tenant of the Premises or any part thereof, (iii) upon or
measured by the value of Tenant's personal property or leasehold improvements
located in the Premises, (iv) upon this transaction or any document to which
Tenant is a party creating or transferring an interest or estate in the
Premises, (v) upon or with respect to vehicles, parking or the number of persons
employed in or about the Project, and (vi) any tax, license, franchise fee or
other imposition upon Landlord which is otherwise measured by or based in whole
or in part upon the Project or any portion thereof. If Landlord contests any
such tax, fee or charge, the cost and expense incurred by Landlord thereby
(including, but not limited to, costs of attorneys and experts) shall also be
common area charges and Tenant shall pay its percentage share of such costs to
Landlord as provided in paragraph 16 and Tenant shall be entitled to its
proportionate share of any resulting rebate. In the event the Premises and any
improvements installed therein by Tenant or Landlord are valued by the assessor
disproportionately higher than those of other tenants in the building or Project
or in the event alterations or improvements are made to the Premises, Tenant's
percentage share of such taxes, assessments, fees and/or charges shall be
readjusted upward accordingly and Tenant agrees to pay such readjusted share.
Such determination shall be made by Landlord from the respective valuations
assigned in the assessor's work sheet or such other information as may be
reasonably available and Landlord's determination thereof shall be conclusive.
10
Tenant agrees to pay, before delinquency, any and all taxes levied or
assessed during the term hereof upon Tenant's equipment, furniture, fixtures and
other personal property located in the Premises, including carpeting and other
property installed by Tenant notwithstanding that such carpeting or other
property has become a part of the Premises. If any of Tenant's personal
property shall be assessed with the Project, Tenant shall pay to Landlord, as
additional rent, the amount attributable to Tenant's personal property within
ten (10) days after receipt of a written statement from Landlord setting forth
the amount of such taxes, assessments and public charges attributable to
Tenant's personal property.
14. ENTRY BY LANDLORD
Landlord reserves, and shall at all reasonable times have, the right
to enter the Premises upon twenty-four (24) hours prior notice (except in case
of emergency) (i) to inspect the Premises, (ii) to supply services to be
provided by Landlord hereunder, (iii) to show the Premises to prospective
purchasers, lenders or tenants and to put `for sale' or `for lease' signs
thereon, (iv) to post notices required or allowed by this lease or by law, (v)
to alter, improve or repair the Premises and any portion of the Project, and
(vi) to erect scaffolding and other necessary structures in or through the
Premises or the Project where reasonably required by the character of the work
to be performed. Tenant may accompany Landlord during any such entry to the
Premises. Landlord shall not be liable in any manner for any inconvenience,
disturbance, loss of business, nuisance or other damage arising from Landlord's
entry and acts pursuant to this paragraph and Tenant shall not be entitled to an
abatement or reduction of rent if Landlord exercises any rights reserved in this
paragraph. For each of the foregoing purposes, Landlord shall at all times have
and retain a key with which to unlock all of the doors in, on and about the
Premises (excluding Tenant's vaults, safes and similar areas designated in
writing by Tenant in advance), and Landlord shall have the right to use any and
all means which Landlord may deem proper to open said doors in an emergency in
order to obtain entry to the Premises. Any entry by Landlord to the Premises
pursuant to this paragraph shall not under any circumstances be construed or
deemed to be a forcible or unlawful entry into or a detainer of the Premises or
an eviction, actual or constructive, of Tenant from the Premises or any portion
thereof. Landlord shall use reasonable efforts to minimize disruption of
Tenant's business during any such entry.
15. COMMON AREA; PARKING
Subject to the terms and conditions of this lease and such rules and
regulations as Landlord may from time to time prescribe, Tenant and Tenant's
employees and invitees shall, in common with other occupants of the Project, and
their respective employees and invitees and others entitled to the use thereof,
have the nonexclusive right to use the access roads, parking areas and
facilities within the Project provided and designated by Landlord for the
general use and convenience of the occupants of the Project which areas and
facilities shall include, but not be limited to, sidewalks, parking, refuse,
landscape and plaza areas, roofs and building exteriors, which areas and
facilities are referred to herein as "Common Area". This right shall terminate
upon the termination of this lease.
Landlord reserves the right from time to time to make changes in the shape,
size, location, amount and extent of the Common Area. Landlord shall also have
the right at any
11
time to change the name, number or designation by which the Project is commonly
known. Landlord further reserves the right to promulgate such rules and
regulations relating to the use of the Common Area, and any part thereof, as
Landlord may deem appropriate for the best interests of the occupants of the
Project. The rules and regulations shall be binding upon Tenant upon delivery
of a copy of them to Tenant and Tenant shall abide by them and cooperate in
their observance. Such rules and regulations may be amended by Landlord from
time to time, with or without advance notice, provided Tenant will not be in
default until it has received notice of such amendment or change.
Tenant shall have the nonexclusive use of one hundred eighty (180) parking
spaces in the Common Area as designated from time to time by Landlord. Landlord
reserves the right at its sole option to assign and label parking spaces, but it
is specifically agreed that Landlord is not responsible for policing any such
parking spaces. Tenant shall not at any time park or permit the parking of
Tenant's trucks or other vehicles, or the trucks or other vehicles of others,
adjacent to loading areas so as to interfere in any way with the use of such
areas; nor shall Tenant at any time park or permit the parking of Tenant's
vehicles or trucks, or the vehicles or trucks of Tenant's suppliers or others,
in any portion of the Common Area not designated by Landlord for such use by
Tenant. Tenant shall not park or permit any inoperative vehicle or equipment to
be parked on any portion of the Common Area.
Landlord shall operate, manage and maintain the Common Area. The manner in
which the Common Area shall be operated, managed and maintained and the
expenditures for such operation, management and maintenance shall be at the sole
discretion of Landlord. The cost of such maintenance, operation and management
of the Common Area, including but not limited to landscaping, repair of paving,
parking lots and sidewalks, security and exterminator services and salaries and
employee benefits (including union benefits) of on-site and accounting personnel
engaged in such maintenance and operations management, shall be a common area
charge and Tenant shall pay to Landlord its percentage share of such costs as
provided in paragraph 16.
16. COMMON AREA CHARGES
Tenant shall pay to Landlord, as additional rent, an amount equal to
(i) twenty percent (20%) of the common area charges of the Project and (ii) 100%
of the common area charges of the building in which the Premises are located.
There shall be no duplication of costs in items (i) and (ii) of the preceding
sentence. Tenant's percentage share of such common area charges shall be paid
as follows:
Tenant's estimated monthly payment of common area charges payable by Tenant
during the calendar year in which the term commences is set forth in paragraph
4(b) of this lease. Prior to the commencement of each succeeding calendar year
of the term (or as soon as practicable thereafter), Landlord shall deliver to
Tenant a written estimate of Tenant's monthly payment of common area charges.
Tenant shall pay, as additional rent, on the first day of each month during the
term in accordance with paragraph 4(b) of the lease, its monthly share of common
area charges as estimated by Landlord. Within one hundred twenty (120) days of
the end of each calendar year and of the termination of this lease (or as soon
as practicable thereafter), Landlord shall deliver to Tenant a statement of
actual common area charges incurred for the
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preceding year. Upon Tenant's written request made within ninety (90) days
after receipt of the statement, Landlord shall provide Tenant with copies of
invoices and other documentation in support thereof. If such statement shows
that Tenant has paid less than its actual percentage then Tenant shall on demand
pay to Landlord the amount of such deficiency. If Tenant fails to pay such
deficiency due within ten (10) days after demand, Tenant shall pay an additional
ten percent (10%) of the amount due as a penalty. If such statement shows that
Tenant has paid more than its actual percentage share then Landlord shall, at
its option, promptly refund such excess to Tenant or credit the amount thereof
to the rent next becoming due from Tenant. Landlord reserves the right to
revise any estimate of common area charges if actual or projected common area
charges show an increase or decrease in excess of 10% from any earlier estimate
for the same period. In such event, Landlord shall deliver the revised estimate
to Tenant, together with an explanation of the reasons therefor, and Tenant
shall revise its payments accordingly. Landlord's and Tenant's obligation with
respect to adjustments at the end of the term or earlier expiration of this
lease shall survive such termination or expiration.
As used in this lease, "common area charges" shall include, but not be
limited to, (i) all items identified in paragraphs 8, 9, 11, 12, 13 and 15 as
being common area charges; (ii) amortization of such capital improvements having
a useful life greater than one year as Landlord may have installed for the
purpose of reducing operating costs and/or to comply with all laws, rules and
regulations of federal, state, county, municipal and other governmental
authorities now or hereafter in effect (Tenant's share of any such capital
improvement shall equal Tenant's proportionate share of the fraction of the cost
of such capital improvement equal to the remaining term of the lease over the
useful life of such capital improvement); (iii) salaries and employee benefits
(including union benefits) of personnel engaged in the operation and maintenance
of the Project (or the building in which the Premises are located) and payroll
taxes applicable thereto; (iv) supplies, materials, equipment and tools used or
required in connection with the operation and maintenance of the Project; (v)
licenses, permits and inspection fees; (vi) a reasonable reserve for repairs and
replacement of equipment used in the maintenance and operation of the Project;
(vii) all other operating costs incurred by Landlord in maintaining and
operating the Project; and (viii) an amount equal to five percent (5%) of the
actual expenditures for the aggregate of all other common area charges as
compensation for Landlord's accounting and processing services.
17. DAMAGE BY FIRE; CASUALTY
In the event the Premises are damaged by any casualty which is covered
under an insurance policy required to be maintained by Landlord pursuant to
paragraph 11, Landlord shall be entitled to the use of all insurance proceeds
and shall repair such damage as soon as reasonably possible and this lease shall
continue in full force and effect.
In the event the Premises are damaged by any casualty not covered under an
insurance policy required to be maintained pursuant to paragraph 11, Landlord
may, at Landlord's option, either (i) repair such damage, at Landlord's expense,
as soon as reasonably possible, in which event this lease shall continue in full
force and effect, or (ii) give written notice to Tenant within thirty (30) days
after the date of the occurrence of such damages of Landlord's intention to
cancel and terminate this lease as of the date of the occurrence of the damages;
provided,
13
however, that if such damage is caused by an act or omission of Tenant or its
agent, servants or employees, then Tenant shall repair such damage promptly at
its sole cost and expense. In the event Landlord elects to terminate this lease
pursuant hereto, Tenant shall have the right within ten (10) days after receipt
of the required notice to notify Landlord in writing of Tenant's intention to
repair such damage at Tenant's expense, without reimbursement from Landlord, in
which event this lease shall continue in full force and effect and Tenant shall
proceed to make such repairs as soon as reasonably possible. If Tenant does not
give such notice within the ten (10) day period, this lease shall be cancelled
and terminated as of the date of the occurrence of such damage. Under no
circumstances shall Landlord be required to repair any injury or damage to (by
fire or other cause), or to make any restoration or replacement of, any of
Tenant's personal property, trade fixtures or property leased from third
parties, whether or not the same is attached to the Premises.
If the Premises are totally destroyed during the term from any cause
(including any destruction required by any authorized public authority), whether
or not covered by the insurance required under paragraph 11, this lease shall
automatically terminate as of the date of such total destruction; provided,
however, that if the Premises can reasonably and lawfully be repaired or
restored within twelve (12) months of the date of destruction to substantially
the condition existing prior to such destruction and if the proceeds of the
insurance payable to the Landlord by reason of such destruction are sufficient
to pay the cost of such repair or restoration, then the insurance proceeds shall
be so applied, Landlord shall promptly repair and restore the Premises and this
lease shall continue, without interruption, in full force and effect. If the
Premises are totally destroyed during the last twelve (12) months of the term,
either Landlord or Tenant may at its option cancel and terminate this lease as
of the date of occurrence of such damage by giving written notice to the other
of its election to do so within thirty (30) days after the occurrence of such
damage.
If the Premises are partially or totally destroyed or damaged and Landlord
or Tenant repair them pursuant to this lease, the rent payable hereunder
(including Tenant's proportionate share of common area charges) for the period
during which such damage and repair continues shall be abated only in proportion
to the square footage of the Premises rendered untenantable to Tenant by such
damage or destruction. Tenant shall have no claim against Landlord for any
damage, loss or expense suffered by reason of any such damage, destruction,
repair or restoration. The parties waive the provisions of California Civil
Code sections 1932(2) and 1933(4) (which provisions permit the termination of a
lease upon destruction of the leased premises), and hereby agree that the
provisions of this paragraph 17 shall govern in the event of such destruction.
18. INDEMNIFICATION
Landlord shall not be liable to Tenant and Tenant hereby waives all
claims against Landlord for any injury to or death of any person or damage to or
destruction of property in or about the Premises or the Project by or from any
cause whatsoever except the failure of Landlord to perform its obligations under
this lease where such failure has persisted for an unreasonable period of time
after notice of such failure. Without limiting the foregoing, Landlord shall
not be liable to Tenant for any injury to or death of any person or damages to
or
14
destruction of property by reason of, or arising from, any latent defect in the
Premises or Project or the act or negligence of any other tenant of the Project.
Tenant shall immediately notify Landlord of any defect in the Premises or
Project.
Except as to injury to persons or damage to property the principal cause of
which is (i) Landlord's active negligence or willful misconduct, or (ii) the
failure by Landlord to observe any of the terms and conditions of this lease,
Tenant shall hold Landlord harmless from and defend Landlord against any claim,
liability, loss, damage or expense (including attorney fees) arising out of any
injury to or death of any person or damage to or destruction of property
occurring in, on or about the Premises from any cause whatsoever or on account
of the use, condition, occupational safety or occupancy of the Premises. Tenant
shall further hold Landlord harmless from and defend Landlord against any claim,
liability, loss, damage or expense (including attorney fees) arising (i) from
Tenant's use of the Premises or from the conduct of its business or from any
activity or work done, permitted or suffered by Tenant or its agents or
employees in or about the Premises or Project, (ii) out of the failure of Tenant
to observe or comply with Tenant's obligation to observe and comply with laws or
other requirements as set forth in paragraph 7, (iii) by reason of Tenant's use,
handling, storage, or disposal of toxic or hazardous materials or waste, (iv) by
reason of any labor or service performed for, or materials used by or furnished
to, Tenant or any contractor engaged by Tenant with respect to the Premises, or
(v) from any other act, neglect, fault or omission of Tenant or its agents or
employees.
The provisions of this paragraph 18 shall survive the expiration or earlier
termination of this lease.
19. ASSIGNMENT AND SUBLETTING
Tenant shall not voluntarily assign, encumber or otherwise transfer
its interest in this lease or in the Premises, or sublease all or any part of
the Premises, or allow any other person or entity to occupy or use all or any
part of the Premises, without first obtaining
15
Landlord's written consent, which consent shall not be unreasonably withheld,
and otherwise complying with the requirements of this paragraph 19. Any
assignment, encumbrance or sublease without Landlord's consent, shall constitute
a default.
If Tenant desires to sublet or assign all or any portion of the Premises,
upon obtaining a written letter of intent from a proposed subtenant or assignee,
Tenant shall give Landlord written notice thereof, specifying the projected
commencement date of the proposed sublet or assignment (which date shall be not
less than thirty (30) days or more than ninety (90) days after the date of
Landlord's receipt of such notice), the portions of the Premises proposed to be
sublet or assigned, the terms and conditions of the proposed assignment or
sublease (including the rent to be paid by the proposed assignee or subtenant)
and the name, address and telephone number of the proposed assignee or
subtenant. Tenant shall further provide Landlord with such other information
concerning the proposed assignee or subtenant as requested by Landlord. For a
period of thirty (30) days after Landlord's receipt of Tenant's written notice,
Landlord shall have the option, exercisable by delivering written notice to
Tenant, to terminate this lease as of the date specified in Landlord's written
notice to Tenant, which date shall not be less than thirty (30) days nor more
than ninety (90) days after the date of Landlord's written notice to Tenant. If
Landlord exercises its option to terminate this lease as provided in the
foregoing sentence, Landlord may, if it so elects, enter into a new lease for
the Premises or any portion thereof with the proposed assignee or subtenant or
any other third party on such terms as Landlord and such proposed assignee or
subtenant or other third party may agree; in such event, Tenant shall not be
entitled to any portion of the profit, if any, which Landlord may realize on
account of such termination and reletting. Notwithstanding the above,
Landlord's option to terminate this lease as specified above in this
subparagraph shall not apply to (i) subleases by Tenant to not more than two (2)
subtenants for not more than fifty percent (50%) of the Premises in the
aggregate and which expire not later than the last day of the twenty-fourth
(24th) lease month of the initial lease term; or (ii) subleases by Tenant to not
more than two (2) subtenants for not more than twenty-five percent (25%) of the
Premises in the aggregate and which expire not later than the last day of the
forty-eighth (48th) lease month of the initial lease term.
If Landlord does not elect to terminate this lease as provided hereinabove
in this paragraph 19 and if Landlord consents in writing to the proposed
assignment or sublet, Tenant shall be free to assign or sublet all or a portion
of the Premises subject to the following conditions: (i) any sublease shall be
on the same terms set forth in the notice given to Landlord; (ii) no sublease
shall be valid and no subtenant shall take possession of the sublet premises
until an executed counterpart of such sublease has been delivered to Landlord;
(iii) no subtenant shall have a further right to sublet; (iv) any sums or other
economic consideration received by Tenant as a result of such assignment or
sublet (except rental or other payments received which are attributable to the
amortization over the term of this lease of the cost of (a) leasehold
improvements constructed for such assignees or subtenant and (b) brokerage fees)
whether denominated rentals or otherwise, which exceed, in the aggregate, the
total sums which Tenant is obligated to pay Landlord under this lease (prorated
to reflect obligations allocable to that portion of the Premises subject to such
sublease), shall be payable to Landlord as additional rent under this lease
without affecting or reducing any other obligation of Tenant hereunder; (v) no
sublet 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;
16
and (vi) any assignee or subtenant must expressly agree to assume and perform
all of the covenants and conditions of Tenant under this lease. Tenant shall
pay to Landlord promptly upon demand as additional rent, Landlord's reasonable
attorneys' fees and other costs incurred for reviewing, processing or
documenting any requested assignment or sublease, whether or not Landlord's
consent is granted. Tenant shall not be entitled to assign this lease or
sublease all or any part of the Premises (and any attempt to do so shall be
voidable by Landlord) during any period in which Tenant is in default under this
lease.
If Tenant is a partnership, a withdrawal or change, voluntary or
involuntary or by operation of law, of any general partner or the dissolution of
the partnership shall be deemed an assignment of this lease subject to all the
conditions of this paragraph 19. If Tenant is a corporation any dissolution,
merger, consolidation or other reorganization of Tenant or the sale or other
transfer of a controlling percentage of the capital stock of Tenant or the sale
of more than fifty percent (50%) of the value of Tenant's assets shall be an
assignment of this lease subject to all the conditions of this paragraph 19.
The term "controlling percentage" means the ownership of, and the right to vote,
stock possessing more than 50% of the total combined voting power of all classes
of Tenant's capital stock issued, outstanding and entitled to vote. This
paragraph shall not apply if Tenant is a corporation the stock of which is
traded through an exchange.
The acceptance of rent by Landlord from any other person shall not be
deemed to be a waiver by Landlord of any provision hereof. Consent to one
assignment or sublet shall not be deemed consent to any subsequent assignment or
sublet. 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. Landlord may consent to subsequent assignments or
sublets of this lease or amendments or modifications to this lease with
assignees of Tenant without notifying Tenant, or any successor of Tenant, and
without obtaining its or their consent thereto and such action shall not relieve
Tenant of liability under this lease; provided, however, Tenant shall not be
liable for any increase in Tenant's obligations under this lease without
Tenant's written consent thereto.
No interest of Tenant in this lease shall be assignable by operation of law
(including, without limitation, the transfer of this lease by testacy or
intestacy). Each of the following acts shall be considered an involuntary
assignment: (1) if Tenant is or becomes bankrupt or insolvent, makes an
assignment for the benefit of creditors or institutes a proceeding under the
Bankruptcy Act in which Tenant is the bankrupt; or, if Tenant is a partnership
or consists of more than one person or entity, if any partner of the partnership
or other person or entity is or becomes bankrupt or insolvent, or makes an
assignment for the benefit of creditors; (ii) if a writ of attachment or
execution is levied on this lease; or (iii) if, in any proceeding or action to
which Tenant is a party, a receiver is appointed with authority to take
possession of the Premises. An involuntary assignment shall constitute a
default by Tenant and Landlord shall have the right to elect to terminate this
lease, in which case this lease shall not be treated as an asset of Tenant.
Tenant immediately and irrevocably assigns to Landlord, as security for
Tenant's obligations under this lease, all rent from any subletting of all or a
part of the Premises as
17
permitted by this lease, and Landlord, as assignee and as attorney-in-fact for
Tenant, or a receiver of Tenant appointed on Landlord's application, may collect
such rent and apply it toward Tenant's obligations under this lease; except
that, until the occurrence of an act or default by Tenant, Tenant shall have the
right to collect such rent, subject to promptly forwarding to Landlord any
portion thereof to which Landlord is entitled pursuant to this paragraph 19.
Notwithstanding the above requirement that Tenant obtain the consent of
Landlord prior to any assignment or sublet, Tenant may, without obtaining the
prior consent of Landlord, assign or sublease the whole or any part of the
Premises to any corporation or other entity which controls, is controlled by, or
is under common control with Tenant, provided that (i) Tenant shall give written
notice thereof to Landlord in the manner required for other assignments or
subleases by this paragraph 19; (ii) Tenant shall continue to be fully obligated
under this lease; (iii) any such assignee or sublessee shall expressly assume
and agree to perform all the terms and conditions of this lease to be performed
by Tenant; and (iv) any such assignment or sublet shall be subject to all other
terms and conditions of this paragraph 19 pertaining to assignments and/or
sublets (excepting only the requirement concerning prior written consent of
Landlord).
20. DEFAULT
The occurrence of any of the following shall constitute a default by
Tenant: (i) failure of Tenant to pay any rent or other sum payable hereunder
within five (5) days after the date that such payment becomes due; (ii)
abandonment of the Premises (Tenant's failure to occupy and conduct business in
the Premises for fourteen (14) consecutive days shall be deemed an abandonment);
(iii) failure of Tenant to deliver to Landlord any instrument, assurance,
financial statement, subordination agreement or certificate of estoppel required
under this Lease within the time period specified for such performance if the
failure continues for five (5) days after written notice of the failure from
Landlord to Tenant; or (iv) failure of Tenant to perform any other obligation
under this lease if the failure to perform is not cured within thirty (30) days
after written notice thereof has been given to Tenant (provided that if such
default cannot reasonably be cured within thirty (30) days, Tenant shall not be
in default if Tenant commences to cure such failure to perform within the thirty
(30) day period and diligently and in good faith continues to cure the failure
to perform), except in the case of an emergency or dangerous condition, in which
case Tenant's time to perform shall be that time period which is reasonable
under the circumstances. The notice referred to in clauses (iii) and (iv) above
shall specify the failure to perform and the applicable lease provision and
shall demand that Tenant perform the provisions of this lease within the
applicable period of time. No notice shall be deemed a forfeiture or
termination of this lease unless Landlord so elects in the notice. No notice
shall be required in the event of abandonment or vacation of the Premises.
In addition to the above, the occurrence of any of the following events
shall also constitute a default by Tenant: (i) Tenant fails to pay its debts as
they become due or admits in writing its inability to pay its debts, or makes a
general assignment for the benefit of creditors (for purposes of determining
whether Tenant is not paying its debts as they become due, a debt shall be
deemed overdue upon the earliest to occur of the following: thirty (30) days
from the date a statement therefor has been rendered; the date on which any
action or proceeding therefor
18
is commenced; or the date on which a formal notice of default or demand has been
sent); (ii) Tenant fails to furnish to Landlord a schedule of Tenant's aged
accounts payable within ten (10) days after Landlord's written request (not to
exceed two (2) requests per calendar year); or (iii) any financial statements
given to Landlord by Tenant, any assignee of Tenant, subtenant of Tenant, any
guarantor of Tenant, or successor in interest of Tenant (including, without
limitation, any schedule of Tenant's aged accounts payable) are materially
false. At any time during the term of this lease Landlord, at Landlord's
option, shall have the right to receive from Tenant, upon Landlord's request, a
current annual balance sheet for Landlord's review. If the balance sheet shows
a negative net worth, Landlord may terminate this lease by giving Tenant sixty
(60) days prior written notice.
In the event of a default by Tenant, then Landlord, in addition to any
other rights and remedies of Landlord at law or in equity, shall have the right
either to terminate Tenant's right to possession of the Premises (and thereby
terminate this lease) or, from time to time and without termination of this
lease, to relet the Premises or any part thereof for the account and in the name
of Tenant for such term and on such terms and conditions as Landlord in its sole
discretion may deem advisable, with the right to make alterations and repairs to
the Premises.
Should Landlord elect to keep this lease in full force and effect, Landlord
shall have the right to enforce all of Landlord's rights and remedies under this
lease, including but not limited to the right to recover and to relet the
Premises and such other rights and remedies as Landlord may have under
California Civil Code Section 1951.4 (or successor Code section) or any other
California statute. If Landlord relets the Premises, then Tenant shall pay to
Landlord, as soon as ascertained, the costs and expenses incurred by Landlord in
such reletting and in making alterations and repairs. Rentals received by
Landlord from such reletting shall be applied (i) to the payment of any
indebtedness due hereunder, other than basic rent and common area charges, from
Tenant to Landlord; (ii) to the payment of the cost of any repairs necessary to
return the Premises to good condition normal wear and tear excepted, including
the cost of alterations and the cost of storing any of Tenant's property left on
the Premises at the time of reletting; and (iii) to the payment of basic rent or
common area charges due and unpaid hereunder. The residue, if any, shall be
held by Landlord and applied in payment of future rent or damages in the event
of termination as the same may become due and payable hereunder and the balance,
if any at the end of the term of this lease, shall be paid to Tenant. Should
the basic rent and common area charges received from time to time from such
reletting during any month be less than that agreed to be paid during that month
by Tenant hereunder, Tenant shall pay such deficiency to Landlord. Such
deficiency shall be calculated and paid monthly. No such reletting of the
Premises by Landlord shall be construed as an election on its part to terminate
this lease unless a notice of such intention is given to Tenant or unless the
termination hereof is decreed by a court of competent jurisdiction.
Notwithstanding any such reletting without termination, Landlord may at any time
thereafter elect to terminate this lease for such previous breach, provided it
has not been cured.
Should Landlord at any time terminate this lease for any breach, in
addition to any other remedy it may have, it shall have the immediate right of
entry and may remove all persons and property from the Premises and shall have
all the rights and remedies of a landlord provided by California Civil Code
Section 1951.2 or any successor code section. Upon such termination, in
19
addition to all its other rights and remedies, Landlord shall be entitled to
recover from Tenant all damages it may incur by reason of such breach, including
the cost of recovering the Premises and including (i) the worth at the time of
award of the unpaid rent which had been earned at the time of termination; (ii)
the worth at the time of award of the amount by which the unpaid rent which
would have been earned after termination until the time of award exceeds the
amount of such rental loss that Tenant proves could have been reasonably
avoided; (iii) the worth at the time of the award of the amount by which the
unpaid rent for the balance of the term after the time of award exceeds the
amount of such rental loss that Tenant proves could be reasonably avoided; and
(iv) 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. The "worth at the time of award" of the amounts referred to in (i)
and (ii) above is computed by allowing interest at the rate of twelve percent
(12%) per annum. The "worth at the time of award" of the amount referred to in
(iii) above shall be 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%). Tenant waives the provisions of Section 1179 of the California Code of
Civil Procedure (which Section allows Tenant to petition of court of competent
jurisdiction for relief against forfeiture of this lease). Property removed
from the Premises may be stored in a public or private warehouse or elsewhere at
the sole cost and expense of Tenant. In the event that Tenant shall not
immediately pay the cost of storage of such property after the same has been
stored for a period of thirty (30) days or more, Landlord may sell any or all
thereof at a public or private sale in such manner and at such times and places
that Landlord, in its sole discretion, may deem proper, without notice to or
demand upon Tenant.
21. LANDLORD`S RIGHT TO CURE TENANT'S DEFAULT
Landlord, at any time after Tenant commits a default, may, but shall
not be obligated to, cure the default at Tenant's cost. If Landlord at any
time, by reason of Tenant's default, pays any sum or does any act that requires
the payment of any sum, the sum paid by Landlord shall be due immediately from
Tenant to Landlord and shall bear interest at the rate of twelve percent (12%)
per annum or the maximum rate permitted by law, whichever is less, from the date
the sum is paid by Landlord until Landlord is reimbursed by Tenant. Amounts due
Landlord hereunder shall be additional rent.
22. EMINENT DOMAIN
If all or any part of the Premises shall be taken by any public or
quasi-public authority under the power of eminent domain or conveyance in lieu
thereof, this lease shall terminate as to any portion of the Premises so taken
or conveyed on the date when title vests in the condemnor, and Landlord shall be
entitled to any and all payments, income, rent, award or any interest therein
whatsoever which may be paid or made in connection with such taking or
conveyance. Tenant shall have no claim against Landlord or otherwise for the
value of any unexpired term of this lease. Notwithstanding the foregoing,
Tenant shall be entitled to any compensation for depreciation to and cost of
removal of Tenant's equipment and fixtures and any compensation for its
relocation expenses necessitated by such taking, but in each case only to the
extent the condemning authority makes a separate award therefor or specifically
identifies
20
a portion of the award as being therefor. Each party waives the provisions of
Section 1265.130 of the California Code of Civil Procedure (which section allows
either party to petition the Superior Court to terminate this lease in the event
of a partial taking of the Premises).
If any action or proceeding is commenced for such taking of the Premises or
any portion thereof or of any other space in the Project, or if Landlord is
advised in writing by any entity or body having the right or power of
condemnation of its intention to condemn the Premises or any portion thereof or
of any other space in the Project, and Landlord shall decide to discontinue the
use and operation of the Project or decide to demolish, alter or rebuild the
Project, then Landlord shall have the right to terminate this lease by giving
Tenant written notice thereof within sixty (60) days of the earlier of the date
of Landlord's receipt of such notice of intention to condemn or the commencement
of said action or proceeding. Such termination shall be effective as of the
last day of the calendar month next following the month in which such notice is
given or the date on which title shall vest in the condemnor, whichever occurs
first.
In the event of a partial taking, or conveyance in lieu thereof, of the
Premises and fifty percent (50%) or more of the number of square feet in the
Premises are taken then Tenant may terminate this lease. Any election by Tenant
to so terminate shall be by written notice given to Landlord within sixty (60)
days from the date of such taking or conveyance and shall be effective on the
last day of the calendar month next following the month in which such notice is
given or the date on which title shall vest in the condemnor, whichever occurs
first.
If a portion of the Premises is taken by power of eminent domain or
conveyance in lieu thereof and neither Landlord nor Tenant terminates this lease
as provided above, then this lease shall continue in full force and effect as to
the part of the Premises not so taken or conveyed and all payments of rent shall
be apportioned as of the date of such taking or conveyance so that thereafter
the amounts to be paid by Tenant shall be in the ratio that the area of the
portion of the Premises not so taken bears to the total area of the Premises
prior to such taking.
23. NOTICE AND COVENANT TO SURRENDER
On the last day of the term or on the effective date of any earlier
termination, Tenant shall surrender to Landlord the Premises in its condition
existing as of the commencement of the term and, except as otherwise provided by
Landlord pursuant to the terms of paragraph 8 of this lease, all of the
improvements and alterations made to the Premises in their condition existing as
of the date of completion of construction and/or installation (normal wear and
tear excepted), with all originally painted interior walls washed or repainted
if marked or damaged, interior vinyl covered walls cleaned and repaired or
replaced if marked or damaged, all carpets shampooed and cleaned, the air
conditioning and heating system serviced and repaired by a reputable and
licensed service firm (unless Landlord has elected to maintain such system
pursuant to paragraph 9 of this lease) and all floors cleaned and waxed; all to
the reasonable satisfaction of Landlord. On or prior to the last day of the
term or the effective date of any earlier termination, Tenant shall remove all
of Tenant's personal property and trade fixtures, together with improvements or
alterations that Tenant is obligated to remove pursuant to the provisions of
paragraph 8 of this lease, from the Premises, and all such property not removed
shall be deemed abandoned. In addition, on or prior to the expiration or
earlier
21
termination of this lease, Tenant shall remove, at Tenant's sole cost and
expense, all telephone, other communication, computer and any other cabling and
wiring of any sort installed by or for Tenant in the space above the suspended
ceiling of the Premises or anywhere else in the Premises and shall promptly
repair any damage to the suspended ceiling, lights, light fixtures, walls and
any other part of the Premises resulting from such removal.
If the Premises are not surrendered as required in this paragraph. Tenant
shall indemnify Landlord against all loss, liability and expense (including but
not limited to, attorney fees) resulting from the failure by Tenant in so
surrendering the Premises, including, without limitation, any claims made by any
succeeding tenants. It is agreed between Landlord and Tenant that the
provisions of this paragraph shall survive termination of this lease.
24. TENANT'S QUITCLAIM
At the expiration or earlier termination of this lease, Tenant shall
execute, acknowledge and deliver to Landlord, within ten (10) days after written
demand from Landlord to Tenant, any quitclaim deed or other document required to
remove the cloud or encumbrance created by this lease from the real property of
which the Premises are a part. This obligation shall survive said expiration or
termination.
25. HOLDING OVER
Any holding over after the expiration or termination of this lease
with the written consent of Landlord shall be construed to be a tenancy from
month-to-month at the monthly rent agreed upon by Landlord and Tenant, but in no
event less than the monthly rent payable under this lease for the last lease
month before the date of such expiration or termination. All provisions of this
lease, except (i) as modified by the preceding sentence and (ii) those
provisions pertaining to the term, expansion rights and any option to extend
shall apply to the month-to-month tenancy.
If Tenant shall retain possession of the Premises or any part thereof
without Landlord's written consent following the expiration or sooner
termination of this lease for any reason, then Tenant shall pay to Landlord for
each day of such retention one hundred fifty percent (150%) of the amount of the
daily rental in effect during the last lease month prior to the date of such
expiration or termination. The term "daily rental" as used in the preceding
sentence shall mean the monthly rental divided by thirty. Tenant shall also
indemnify and hold Landlord harmless from any loss, liability and expense
(including, but not limited to, attorneys fees) resulting from delay by Tenant
in surrendering the Premises, including without limitation any claims made by
any succeeding tenant founded on such delay. Acceptance of rent by Landlord
following expiration or termination shall not constitute a renewal of this
lease, and nothing contained in this paragraph shall waive Landlord's right of
re-entry or any other right. Tenant shall be only a Tenant at sufferance,
whether or not Landlord accepts any rent from tenant, while Tenant is holding
over without Landlord's written consent.
The provisions of this paragraph 25 are in addition to, and do not affect,
Landlord's right of re-entry or other rights hereunder or provided by law.
Nothing in this paragraph 25 shall be
22
construed as implied consent by Landlord to any holding over by Tenant.
Landlord expressly reserves the right to require Tenant to surrender possession
of the Premises to Landlord as provided in this Lease on expiration or other
termination of this Lease. The provisions of this paragraph 25 shall not be
considered to limit or constitute a waiver of any other rights or remedies of
Landlord provided in this Lease or at law. The provisions of this paragraph 25
shall survive the expiration or early termination of this lease.
26. SUBORDINATION
In the event Landlord's title or leasehold interest is now or
hereafter encumbered in order to secure a loan to Landlord, Tenant shall, at the
request of Landlord or the lender, execute in writing an agreement subordinating
its rights under this lease to the lien of such encumbrance, or, if so
requested, agreeing that the lien of lender's encumbrance shall be or remain
subject and subordinate to the rights of Tenant under this lease. Tenant hereby
irrevocably appoints Landlord the attorney-in-fact of Tenant to execute, deliver
and record any such instrument or instruments for and in the name and on behalf
of Tenant. Notwithstanding any such subordination, Tenant's possession under
this lease shall not be disturbed if Tenant is not in default and so long as
Tenant shall pay all amounts due hereunder and otherwise observe and perform all
provisions of this lease. In addition, if in connection with any such loan the
lender shall request reasonable modifications of this lease as a condition to
such financing, Tenant will not unreasonably withhold, delay or defer its
consent thereof, provided that such modifications do not increase the
obligations of Tenant hereunder or materially adversely affect the leasehold
interest hereby created or Tenant's rights hereunder.
27. CERTIFICATE OF ESTOPPEL
Each party shall, within five (5) calendar days after request
therefor, execute and deliver to the other party, in recordable form, a
certificate stating that the lease is unmodified and in full force and effect,
or in full force and effect as modified and stating the modifications. The
certificate shall also state the amount of the monthly rent, the date to which
monthly rent has been paid in advance, the amount of the security deposit and/or
prepaid monthly rent, and, if the request is made by Landlord, shall include
such other items as Landlord or Landlord's lender may reasonably request.
Failure to deliver such certificate within such time shall constitute a
conclusive acknowledgment by the party failing to deliver the certificate that
the lease is in full force and effect and has not been modified except as may be
represented by the party requesting the certificate. Any such certificate
requested by Landlord may be conclusively relied upon by any prospective
purchaser or encumbrancer of the Premises or Project. Further, within five (5)
calendar days following written request made from time to time by Landlord,
Tenant shall furnish to Landlord current financial statements of Tenant.
28. SALE BY LANDLORD
In the event the original Landlord hereunder, or any successor owner
of the Project or Premises, shall sell or convey the Project or Premises, all
liabilities and obligations on the part of the original Landlord, or such
successor owner, under this lease accruing thereafter shall terminate, and
thereupon all such liabilities and obligations shall be binding upon the new
23
owner. Tenant agrees to attorn to such new owner and to look solely to such new
owner for performance of any and all such liabilities and obligations, provided
such new owner agrees to assume and be bound by the terms of this lease.
29. ATTORNMENT TO LENDER OR THIRD PARTY
In the event the interest of Landlord in the land and buildings in
which the Premises are located (whether such interest of Landlord is a fee title
interest or a leasehold interest) is encumbered by deed of trust, and such
interest is acquired by a lender or any other third party through judicial
foreclosure or by exercise of a power of sale at private trustee's foreclosure
sale, Tenant hereby agrees to release Landlord of any obligation arising on or
after any such foreclosure sale and provided such purchaser agrees to assume and
be bound by the terms of this lease, Tenant shall attorn to the purchaser at any
such foreclosure sale and to recognize such purchaser as the Landlord under this
lease.
30. DEFAULT BY LANDLORD
Landlord shall not be in default unless Landlord fails to perform
obligations required of Landlord within a reasonable time, but in no event
earlier than thirty (30) days after written notice by Tenant to Landlord and to
the holder of any first mortgage or deed of trust covering the Premises (whose
name and address shall be provided to Tenant upon written request) specifying
wherein landlord has failed to perform such obligations; provided, however, that
if the nature of Landlord's obligations is such that more than thirty (30) days
are required for performance, then Landlord shall not be in default if Landlord
commences performance within such thirty (30) day period and thereafter
diligently prosecutes the same to completion.
If Landlord is in default of this lease, Tenant's sole remedy shall be to
institute suit against Landlord in a court of competent jurisdiction, and Tenant
shall have no right to offset any sums expended by Tenant as a result of
Landlord's default against future rent and other sums due and payable pursuant
to this lease. If Landlord is in default of this lease, and as a consequence
Tenant recovers a money judgment against Landlord, the judgment shall be
satisfied only out of the proceeds of sale received on execution of the judgment
and levy against the right, title and interest of Landlord in the Project of
which the Premises are a part, and out of rent or other income from such real
property receivable by Landlord or out of the consideration received by Landlord
from the sale or other disposition of all or any part of Landlord's right, title
and interest in the Project of which the Premises are a part. Neither Landlord
nor any of the partners comprising the partnership designated as Landlord shall
be personally liable for any deficiency.
31. CONSTRUCTION CHANGES
It is understood that the description of the Premises and the location
of ductwork, plumbing and other facilities therein are subject to such changes
as Landlord or Landlord's architect determines to be desirable in the course of
construction of the Premises and/or the improvements constructed or being
constructed therein, and no such changes or any changes in plans for any other
portions of the Project, shall affect this lease or entitle Tenant to any
24
reduction of rent hereunder or result in any liability of Landlord to Tenant,
provided such changes do not result in any permanent material detriment to the
operation of Tenant's business.
32. MEASUREMENT OF PREMISES
Tenant understands and agrees that any reference to square footage of
the Premises is approximate only and includes all interior partitions and
columns, one-half of exterior walls, and one-half of the partitions separating
the Premises from the rest of the Project, Tenant's proportionate share of the
Common Area and, if applicable, covered areas immediately outside the entry
doors or loading docks. Tenant waives any claim against Landlord regarding the
accuracy of any such measurement and agrees that there shall not be any
adjustment in basic rent or common area charges or other amounts payable
hereunder by reason of inaccuracies in such measurement.
33. ATTORNEY FEES
If either party commences an action against the other party arising
out of or in connection with this lease, the prevailing party shall be entitled
to have and recover from the losing party all expenses of litigation, including,
without limitation, travel expenses, reasonable attorney fees, expert witness
fees, trial and appellate court costs, and deposition and transcript expenses.
If either party becomes a party to any litigation concerning this lease, or
concerning the Premises or the Project, by reason of any act or omission of the
other party or its authorized representatives, the party that causes the other
party to become involved in the litigation shall be liable to the other party
for all expenses of litigation, including, without limitation, travel expenses,
attorney fees, expert witness fees, trial and appellate court costs, and
deposition and transcript expenses.
34. SURRENDER
The voluntary or other surrender of this lease or the Premises by
Tenant, or a mutual cancellation of this lease, shall not work a merger, and at
the option of Landlord shall either terminate all or any existing subleases or
subtenancies or operate as an assignment to Landlord of all or any such
subleases or subtenancies.
35. WAIVER
No delay or omission in the exercise of any right or remedy of
Landlord on any default by Tenant shall impair such right or remedy or be
construed as a waiver. The receipt and acceptance by Landlord of delinquent
rent or other payments shall not constitute a waiver of any other default and
acceptance of partial payments shall not be construed as a waiver of the balance
of such payment due. No act or conduct of Landlord, including, without
limitation, the acceptance of keys to the Premises, shall constitute an
acceptance of the surrender of the Premises by Tenant before the expiration of
the term. Only a written notice from Landlord to Tenant shall constitute
acceptance of the surrender of the Premises and accomplish a termination of this
lease. Landlord's consent to or approval of any act by Tenant requiring
Landlord's consent or approval shall not be deemed to waive or render
unnecessary Landlord's
25
consent to or approval of any subsequent act by Tenant. Any waiver by Landlord
of any default must be in writing and shall not be a waiver of any other default
concerning the same or any other provision of this lease.
36. EASEMENTS; AIRSPACE RIGHTS
Landlord reserves the right to alter the boundaries of the Project and
grant easements and dedicate for public use portions of the Project without
Tenant's consent, provided that no such grant or dedication shall interfere with
Tenant's use of the Premises or otherwise cause Tenant to incur cost or expense.
From time to time, and upon Landlord's demand, Tenant shall execute, acknowledge
and deliver to Landlord, in accordance with Landlord's instructions, any and all
documents, instruments, maps or plats necessary to effectuate Tenant's covenants
hereunder.
This lease confers no rights either with regard to the subsurface of or
airspace above the land on which the Project is located or with regard to
airspace above the building of which the Premises are a part. Tenant agrees
that no diminution or shutting off of light or view by a structure which is or
may be erected (whether or not by Landlord) on property adjacent to the building
of which the Premises are a part or to property adjacent thereto, shall in any
way affect this lease, or entitle Tenant to any reduction of rent, or result in
any liability of Landlord to Tenant.
37. RULES AND REGULATIONS
Landlord shall have the right from time to time to promulgate rules
and regulations for the safety, care and cleanliness of the Premises, the
Project and the Common Area, or for the preservation of good order. On delivery
of a copy of such rules and regulations to Tenant, Tenant shall comply with the
rules and regulations, and a violation of any of them shall constitute a default
by Tenant under this lease. If there is a conflict between the rules and
regulations and any of the provisions of this lease, the provisions of this
lease shall prevail. Such rules and regulations may be amended by Landlord from
time to time with or without advance notice.
38. NOTICES
Except for legal process which may also be served as provided by law
or as provided herein, all notices, demands, requests, consents and other
communications ("Notices") which may be given or are required to be given by
either party to the other shall be in writing and shall be deemed given to and
received by the party intended to receive such Notice (i) when hand delivered,
(ii) three (3) days after such Notice shall have been deposited, postage
prepaid, to the United States Mail, certified return receipt requested, properly
addressed to the address specified herein, or (iii) date of delivery if sent to
the address specified herein by reputable overnight courier (e.g. Federal
Express or other comparable service), as evidenced by such courier's records.
Prior to the commencement date, all such Notices from Landlord to Tenant
shall be
26
served or addressed to Tenant at 0000 Xxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx
00000. On or after the commencement date all such Notices from Landlord to
Tenant shall be addressed to Tenant at the Premises.
All such Notices by Tenant to Landlord shall be sent to Landlord at its
offices at 0000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxx Xxxxx, Xxxxxxxxxx 00000.
Either party may change its address by notifying the other of such change.
39. NAME
Tenant shall not use the name of the Project for any purpose, other
than as the address of the business conducted by Tenant in the Premises, without
the prior written consent of Landlord.
40. GOVERNING LAW; SEVERABILITY
This lease shall in all respects be governed by and construed in
accordance with the laws of the State of California. If any provision of this
lease shall be held or rendered invalid, unenforceable or ineffective for any
reason whatsoever, all other provisions hereof shall be and remain in full force
and effect.
41. DEFINITIONS
As used in this lease, the following words and phrases shall have the
following meanings:
AUTHORIZED REPRESENTATIVE: any officer, agent, employee or independent
-------------------------
contractor retained or employed by either party, acting within authority given
him by that party.
ENCUMBRANCE: any deed of trust, mortgage or other written security
-----------
device or agreement affecting the Premises or the Project that constitutes
security for the payment of a debt or performance of an obligation, and the note
or obligation secured by such deed of trust, mortgage or other written security
device or agreement.
LEASE MONTH: the period of time determined by reference to the day of
-----------
the month in which the term commences and continuing to one day short of the
same numbered day in the next succeeding month; e.g., the tenth day of one month
to and including the ninth day in the next succeeding month.
LENDER: the beneficiary, mortgagee or other holder of an encumbrance,
------
as defined above.
LIEN: a charge imposed on the Promises by someone other than Landlord,
----
by which the Premises are made security for the performance of an act. Most of
the liens referred to in this lease are mechanic's liens.
27
MAINTENANCE: repairs, replacement, repainting and cleaning.
-----------
MONTHLY RENT: the sum of the monthly payments of basic rent and common
------------
area charges.
PERSON: one or more human beings, or legal entities or other
------
artificial persons, including, without limitation, partnerships, corporations,
trusts, estates, associations and any combination of human being and legal
entities.
PROVISION: any term, agreement, covenant, condition, clause,
---------
qualification, restriction, reservation or other stipulation in the lease that
defines or otherwise controls, establishes or limits the performance required or
permitted by either party.
RENT: basic rent, common area charges, additional rent, and all other
----
amounts payable by Tenant to Landlord required by this lease or arising by
subsequent actions of the parties made pursuant to this lease.
Words used in any gender include other genders. If there be more than one
Tenant, the obligations of Tenant hereunder are joint and several. All
provisions whether covenants or conditions, on the part of Tenant shall be
deemed to be both covenants and conditions. The paragraph headings are for
convenience of reference only and shall have no effect upon the construction or
interpretation of any provision hereof.
42. TIME
Time is of the essence of this lease and of each and all of its
provisions.
43. INTEREST ON PAST DUE OBLIGATIONS; LATE CHARGE
Any amount due from Tenant to Landlord hereunder which is not paid
within five (5) days of when due shall bear interest at the rate of ten percent
(10%) per annum from when due until paid, unless otherwise specifically provided
herein, but the payment of such interest shall not excuse or cure any default by
Tenant under this lease. In addition, Tenant acknowledges that late payment by
Tenant to Landlord of basic rent or common area charges or of any other amount
due Landlord from Tenant, will cause Landlord to incur costs not contemplated by
this lease, the exact amount of such costs being extremely difficult and
impractical to fix. Such costs include, without limitation, processing and
accounting charges, and late charges that may be imposed on Landlord, e.g., by
the terms of any encumbrance and note secured by any encumbrance covering the
Premises. Therefore, if any such payment due from Tenant is not received by
Landlord within five (5) days of when due, Tenant shall pay to Landlord an
additional sum of five percent (5%) of the overdue payment as a late charge.
The parties agree that this late charge represents a fair and reasonable
estimate of the costs that Landlord will incur by reason of late payment by
Tenant. Acceptance of any late charge shall not constitute a waiver of Tenant's
default with respect to the overdue amount, nor prevent Landlord from exercising
any of the other rights and remedies available to Landlord. No notice to Tenant
of failure to pay shall be required prior to the imposition of such interest
and/or late charge, and any notice period provided for in paragraph 20 shall not
affect the imposition of
28
such interest and/or late charge. Any interest and late charge imposed pursuant
to this paragraph shall be and constitute additional rent payable by Tenant to
Landlord.
44. ENTIRE AGREEMENT
This lease, including any exhibits and attachments, constitutes the
entire agreement between Landlord and Tenant relative to the Premises and this
lease and the exhibits and attachments may be altered, amended or revoked only
by an instrument in writing signed by both Landlord and Tenant. Landlord and
Tenant agree hereby that all prior or contemporaneous oral agreements between
and among themselves or their agents or representatives relative to the leasing
of the Premises are merged in or revoked by this lease.
45. CORPORATE AUTHORITY
If Tenant is a corporation, each individual executing this lease on
behalf of the corporation represents and warrants that he is duly authorized to
execute and deliver this lease on behalf of the corporation in accordance with a
duly adopted resolution of the Board of Directors of said corporation and that
this lease is binding upon said corporation in accordance with its terms If
Tenant is a corporation, Tenant shall deliver to Landlord, within ten (10) days
of the execution of this lease, a copy of the resolution of the Board of
Directors of Tenant authorizing the execution of this lease and naming the
officers that are authorized to execute this lease on behalf of Tenant, which
copy shall be certified by Tenant's secretary as correct and in full force and
effect.
46. RECORDING
Neither Landlord nor Tenant shall record this lease or a short form
memorandum hereof without the consent of the other.
47. REAL ESTATE BROKERS
Each party represents and warrants to the other party that it has not
had dealings in any manner with any real estate broker, finder or other person
with respect to the Premises and the negotiation and execution of this lease
except XxXxxxxxxx Management Corporation and CPS. Except for the commissions
and fees to be paid to XxXxxxxxxx Management Corporation and CPS as provided in
this paragraph, each party shall indemnify and hold harmless the other party
from all damage, loss, liability and expense (including attorneys' fees and
related costs) arising out of or resulting from any claims for commissions or
fees that have been or may be asserted against the other party by any broker,
finder or other person with whom Tenant or Landlord, respectively, has dealt, or
purportedly has dealt, in connection with the Premises and the negotiation and
execution of this lease. Landlord shall pay broker leasing commissions to
XxXxxxxxxx Management Corporation and CPS in connection with the Premises and
the negotiation and execution of this lease, to the extent agreed to between
Landlord and XxXxxxxxxx Management Corporation and CPS. Landlord and Tenant
agree that Landlord shall not be obligated to pay any broker leasing
commissions, consulting fees, finder fees or any other fees or commissions
arising out of or relating to any extended term of this
29
lease or to any expansion or relocation of the Premises at any time.
48. EXHIBITS AND ATTACHMENTS
All exhibits and attachments to this lease are a part hereof.
49. ENVIRONMENTAL MATTERS
A. TENANT'S COVENANTS REGARDING HAZARDOUS MATERIALS.
------------------------------------------------
(1) HAZARDOUS MATERIALS HANDLING. Tenant, its agents, invitees,
employees, contractors, sublessees, assigns and/or successors shall not use,
store, dispose, release or otherwise cause to be present or permit the use,
storage, disposal, release or presence of Hazardous Materials (as defined below)
on or about the Premises or Project. As used herein "Hazardous Materials" shall
mean any petroleum or petroleum byproducts, flammable explosives, asbestos, urea
formaldehyde, radioactive materials or waste and any "hazardous substance",
"hazardous waste", "hazardous materials", "toxic substance" or "toxic waste" as
those terms are defined under the provisions of the California Health and Safety
Code and/or the provisions of the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. Section 9601 et seq.), as amended by
the Superfund Amendments and Reauthorization Act of 1986 (42 U.S.C. Section 9601
et seq.), or any other hazardous or toxic substance, material or waste which is
or becomes regulated by any local governmental authority, the State of
California or any agency thereof, or the United States Government or any agency
thereof. Notwithstanding the above, Tenant shall be permitted to store
reasonable quantities of diesel fuel for use by Tenant with its generator (as
described in paragraph 56 below). Tenant shall:
(a) Use, store, and dispose of all such Hazardous Material
in strict compliance with all applicable statutes, ordinances, and regulations
in effect during the lease term that relate to public health and safety and
protection of the environment including the Hazardous Materials Laws as defined
in section 49.A.(2) below.
(b) Comply at all times during the lease term with all
Hazardous Materials Laws.
(2) NOTICES. Tenant shall immediately notify Landlord in writing
-------
of: (i) any enforcement, cleanup, removal or other governmental or regulatory
action instituted, completed or threatened pursuant to any law, regulation or
ordinance relating to the industrial hygiene, environmental protection or the
use, analysis, generation, manufacture, storage, presence, disposal or
transportation of any Hazardous Materials (collectively "Hazardous Materials
Laws"); (ii) any claim made or threatened by any person against Tenant, the
Premises, Project or buildings within the Project relating to damage,
contribution, cost recovery, compensation, loss or injury resulting from or
claimed to result from any Hazardous Materials; and (iii) any reports made to
any environmental agency arising out of or in connection with any Hazardous
Materials in, on or removed from the Premises, Project or buildings within the
Project, including any complaints, notices, warnings, reports or asserted
violations in connection therewith. Tenant shall also supply to Landlord as
promptly as possible, and in any event within
30
five (5) business days after Tenant first receives or sends the same, with
copies of all claims, reports, complaints, notices, warnings or asserted
violations relating in any way to the Premises, Project or buildings within the
Project or Tenant's use thereof. Tenant shall promptly deliver to Landlord
copies of hazardous waste manifests reflecting the legal and proper disposal of
all Hazardous Materials removed from the Premises.
B. INDEMNIFICATION OF LANDLORD. Tenant shall indemnify, defend (by
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counsel acceptable to Landlord), protect, and hold Landlord, and each of
Landlord's partners, employees, agents, attorneys, successors and assigns, free
and harmless from and against any and all claims, liabilities, penalties,
forfeitures, losses or expenses (including attorneys' fees) for death of or
injury to any person or damage to any property whatsoever (including water
tables and atmosphere), arising from or caused in whole or in part, directly or
indirectly, by Tenant's use, analysis, storage, transportation, disposal,
release, threatened release, discharge or generation of Hazardous Materials to,
in, on, under, about or from the Premises, Project or buildings within the
Project, or (ii) Tenant's failure to comply with any Hazardous Materials Laws
whether knowingly, unknowingly, intentionally or unintentionally. Tenant's
obligations hereunder shall include, without limitation, and whether foreseeable
or unforeseeable, all costs of any required or necessary repair, cleanup or
detoxification or decontamination of the Premises, Project or buildings within
the Project, and the preparation and implementation of any closure, remedial
action or other required plans in connection therewith. In addition, Tenant
shall reimburse Landlord for (i) losses in or reductions to rental income
resulting from Tenant's use, storage or disposal of Hazardous Materials, (ii)
all costs of refitting or other alterations to the Premises, Project or
buildings within the Project required as a result of Tenant's use, storage, or
disposal of Hazardous Materials including, without limitation, alterations
required to accommodate an alternate use of the Premises, Project or buildings
within the Project, and (iii) any diminution in the fair market value of the
Premises, Project or buildings within the Project caused by Tenant's use,
storage, or disposal of Hazardous Materials. For purposes of this paragraph 49,
any acts or omissions of Tenant, or by employees, agents, assignees, contractors
or subcontractors of Tenant or others acting for or on behalf of Tenant (whether
or not they are negligent, intentional, willful or unlawful) shall be strictly
attributable to Tenant.
C. LANDLORD'S REPRESENTATION. Landlord represents that to the actual
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current knowledge of Xx. Xxxxxx Xxxxxxxxxxx, Landlord's Property Manager,
without duty of inquiry or investigation, there are no Hazardous Materials on
the Premises in violation of any Hazardous Materials Laws as-of the date of
execution of this lease by Landlord.
D. SURVIVAL. The provisions of this paragraph 49 shall survive the
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expiration or earlier termination of the term of this lease.
50. SIGNAGE
Tenant shall not, without obtaining the prior written consent of
Landlord, install or attach any sign or advertising material on any part of the
outside of the Premises, or on any part of the inside of the Premises which is
visible from the outside of the Premises, or in the halls, lobbies, windows or
elevators of the building in which the Premises are located or on or about any
other portion of the Common Area or Project. If Landlord consents to the
installation
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of any sign or other advertising material, the location, size, design, color and
other physical aspects thereof shall be subject to Landlord's prior written
approval and shall be in accordance with any sign program applicable to the
Project. In addition to any other requirements of this paragraph 50, the
installation of any sign or other advertising material by or for Tenant must
comply with all applicable laws, statutes, requirements, rules, ordinances and
any C.C. & R.'s or other similar requirements. With respect to any permitted
sign installed by or for Tenant, Tenant shall maintain such sign or other
advertising material in good condition and repair and shall remove such sign or
other advertising material on the expiration or earlier termination of the term
of this lease. The cost of any permitted sign or advertising material and all
costs associated with the installation, maintenance and removal thereof shall be
paid for solely by Tenant. If Tenant fails to properly maintain or remove any
permitted sign or other advertising material, Landlord may do so at Tenant's
expense. Any cost reasonably incurred by Landlord in connection with such
maintenance or removal shall be deemed additional rent and shall be paid by
Tenant to Landlord within ten (10) days following written notice from Landlord.
Landlord may remove any unpermitted sign or advertising material without notice
to Tenant and the cost of such removal shall be additional rent and shall be
paid by Tenant within ten (10) days following notice from Landlord. Landlord
shall not be liable to Tenant for any damage, loss or expense resulting from
Landlord's removal of any sign or advertising material in accordance with this
paragraph 50. The provisions of this paragraph 50 shall survive the expiration
or earlier termination of this lease.
51. SUBMISSION OF LEASE
The submission of this lease to Tenant for examination or signature by
Tenant is not an offer to lease the Premises to Tenant, nor an agreement by
Landlord to reserve the Premises for Tenant. Landlord will not be bound to
Tenant until this lease has been duly executed and delivered by both Landlord
and Tenant.
52. PREMISES TAKEN "AS IS"
Tenant is leasing the Premises from Landlord "as is" in their
condition existing as of the date hereof. Landlord shall have no obligation to
alter or improve the Premises, except to paint the existing painted walls in the
Premises which Tenant does not plan on removing in its initial remodel.
53. ADDITIONAL RENT
All costs, charges, fees, penalties, interest and any other payments
(including Tenant's reimbursement to Landlord of costs incurred by Landlord)
which Tenant is required to make to Landlord pursuant to the terms and
conditions of this lease and any amendments to this lease shall be and
constitute additional rent payable by Tenant to Landlord when due as specified
in this lease and any amendments to this lease.
54. [INTENTIONALLY OMITTED]
55. OPTION TO EXTEND TERM
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Landlord grants to Tenant the option to extend the term for one period
of two (2) years (the "Extended Term") following the expiration of the initial
term set forth in paragraph 2 ("Initial Term") under all the provisions of this
lease except for the amount of the basic rent. The basic rent for the Extended
Term shall be adjusted to the market rate (as defined in paragraph (c) below);
provided that in no event shall the basic rent for the Extended Term be less
than the basic rent in effect at the expiration of the Initial Term. This
option is further subject to the following terms and conditions:
(a) Tenant must deliver its irrevocable written notice of Tenant's
exercise of this option to Landlord not less than six (6) lease months, nor more
than twelve (12) lease months, prior to the expiration of the Initial Term.
Time is of the essence with respect to the time period during which Tenant must
deliver to Landlord its written notice of exercise and, therefore, if Tenant
fails to give Landlord its irrevocable written notice of its exercise of this
option within the time period provided above then this option shall expire and
be of no further force or effect.
(b) The parties shall have thirty (30) days from the date Landlord
receives Tenant's notice of exercise in which to agree on the amount
constituting the market rate. If Landlord and Tenant agree on the amount of the
market rate, they shall immediately execute an amendment to this lease setting
forth the expiration date of the Extended Term and the amount of the basic rent
to be paid by Tenant during the Extended Term. If Landlord and Tenant are
unable to agree on the amount of the market rate within such time period, then
this option shall be of no further effect and this lease shall expire at the end
of the Initial Term.
(c) As used herein, the "market rate" shall be the monthly rent then
obtained for two (2) year fixed rate leases of comparable terms for premises in
the Project and in buildings and/or projects within the same geographical area
of similar types and identity, quality and location as the Project.
(d) Common area charges shall continue to be determined and payable as
provided in paragraphs 4 and 16 of this lease.
(e) Neither party shall have the right to have any court or other
third party determine the market rate or the basic rent. Tenant shall not
assign or otherwise transfer this option or any interest therein and any attempt
to do so shall render this option null and void. Tenant shall have no right to
extend the term beyond the Extended Term. If Tenant is in default under this
lease at the date of delivery of Tenant's notice of exercise to Landlord, then
such notice shall be of no effect and this lease shall expire at the end of the
Initial Term; if Tenant is in default under this lease on the last day of the
Initial Term, then Landlord may in its sole discretion elect to have Tenant's
exercise of this option be of no effect, in which case this lease shall expire
at the end of the Initial Term.
56. ADDITIONAL REQUIREMENTS
Landlord acknowledges that in the future Tenant may wish (i) to create
a raised-floor computer room (not to exceed five thousand [5,000] square feet)
on the first floor of
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the Premises, which would require the use of not more than two (2) adjacent
parking spaces for equipment necessary to support such computer room, and (ii)
to locate on the roof of the Premises a microwave dish (not to exceed five [5]
feet in diameter) to be used by Tenant exclusively. Installation of the
foregoing shall be at Tenant's sole cost and expense and shall be deemed
alterations subject to the provisions of paragraph 8 of this lease, provided
that Landlord's consent shall not be unreasonably withheld.
57. CAPITAL EXPENDITURES
Notwithstanding any provision to the contrary in paragraphs 7 and 8 of
this lease, the cost of any capital improvement to the Premises, the Project or
the Common Area which (i) is required to be made by Landlord under paragraph 7
or 8, (ii) has a useful life of more than one (1) year and (iii) the cost of
which exceeds $50,000, shall be amortized over its useful life (including
interest at a rate of two percent (2%) over the then current Prime Rate as
published by the Wall Street Journal) and the monthly amortized cost thereof so
determined shall be included within common area charges and Tenant shall pay its
percentage share thereof as provided in paragraph 16 of this lease throughout
the remaining term of this lease and any extensions thereof. Any determination
of what constitutes a capital improvement and the useful life of such capital
improvement, shall be made by Landlord in accordance with generally accepted
accounting principles.
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IN WITNESS WHEREOF, Landlord and Tenant have executed and delivered this
lease on the date first above written.
Landlord: Tenant:
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SAN XXXXX NO. 2, a California EXODUS COMMUNICATIONS, INC.
general partnership a California corporation
By: Connecticut General Life Insurance By: /s/ Xxxxxxx X. Xxxxxx
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Company, a Connecticut corporation,
General Partner Name: Xxxxxxx X. Xxxxxx
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By: Cigna Investments, Inc., a Title: Coo/CFO
Delaware corporation, Its
Authorized Agent Date: ________________________
By: ___________________ By: /s/ K. B. Xxxxxxxxxxxxx
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Name: ___________________ Name: K. B. Xxxxxxxxxxxxx
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Its: ___________________ Title: Serectary/President
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Date: ___________________ Date: 4/18/97
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