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EXHIBIT 10.25
LEASE AGREEMENT
BETWEEN
XXXXXXXXX BUSINESS PARK, LLC
A CALIFORNIA LIMITED LIABILITY COMPANY
AS LANDLORD
AND
AVANEX CORPORATION,
A CALIFORNIA CORPORATION
AS
TENANT
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LEASE AGREEMENT
DATE: September 8, 1999
LANDLORD: XXXXXXXXX BUSINESS PARK, LLC
a California limited liability Company
c/o Trumark Companies
0000 Xxxxxxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
TENANT: AVANEX CORPORATION,
a California corporation
The Premises
1. PREMISES. Landlord hereby leases to Tenant upon the terms and conditions
contained in this lease ("LEASE") those certain premises (the
"PREMISES") consisting of approximately 54,068 square feet (measured
from the Building "drip-line," as per custom and practice in Alameda
County) constituting all of that certain building known as "Building B"
and located at 00000 Xxxxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx (the
"BUILDING"), which Premises are shown within the cross-hatched area on
the map of the Building attached hereto as EXHIBIT "A." The land upon
which the Building is situated is hereinafter referred to as the "LAND"
and consists of a real property parcel described as "Parcel 2 of Parcel
Map 7251. The figure of 54,068 square feet shall be used for all
calculations under this Lease in which the square footage of the
Building is a factor, including, without limitation, any purchase price
calculations pursuant to Section 3.3 below.
For the purposes of this Lease, the following definitions shall apply:
a. The term "BUILDING SHELL" shall mean a concrete tilt-up building
(for group B occupancy only), containing four (4) combination
dock high truck doors (two (2) grade level loading doors) with
approximately 22 foot clear height; 495 GPM/2000 square feet
rated fire sprinkler system; and, a 2000 amp-277/480 volt, three
phase power service (with no power panel).
b. The term "PROJECT" shall mean that certain three (3) building
complex otherwise know as the Xxxxxxxxx Business Park in which
the Building is located.
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c. The term "DECLARATION" shall mean that certain Declaration of
Covenants, Rules, and Restriction and Reciprocal Easement
Agreement which has been, or will be, recorded with respect to
the Project.
d. The term "LAND" shall refer to the real property upon which the
Project is situated.
e. The term "COMMON AREAS" shall mean all parking areas, landscape
areas and other areas, facilities or improvements located on the
Land which are designated in the Declaration as "Common Area."
f. The term "EXCLUSIVE COMMON AREA" shall mean those portions of the
Common Area which exclusively serve the Building.
g. The term "IMPROVEMENT ALLOWANCE" shall mean the sum of ONE
MILLION EIGHT HUNDRED NINETY-TWO THOUSAND THREE HUNDRED EIGHTY
DOLLARS ($1,892,380.00).
h. The term "IMPROVEMENTS COSTS" shall mean all of the costs and
expenses to be incurred in connection with the design,
permitting, construction and testing of the Tenant Improvements
(including, without limitation, the cost of the space plan for
the Tenant Improvements and the Approved Plans and the fees and
charges of the Building Contractor). The Improvement Costs shall
include a zero percent (0%) construction management fee to be
paid to Landlord.
i. The term "APPROVED PLANS" shall mean the plans and specifications
for the Tenant Improvements dated August 23, 1999 (with latest
revision dated September 3, 1999) which have been prepared by the
"BUILDING ARCHITECT", DES Architects + Engineers, and approved by
Landlord and Tenant on or before the execution of this Lease.
j. The term "TENANT IMPROVEMENTS" shall mean the interior
improvements configured for Tenant's intended use and occupancy
of the Premises which are set forth on the Approved Plans. The
term "PHASE 1" shall mean that portion of the Tenant Improvements
consisting of the manufacturing area improvements, as designated
in the Approved Plans. The term "PHASE 2" shall mean the office
area improvements, as shown on the Approved Plans.
2. BUILDING SHELL AND TENANT IMPROVEMENTS.
2.1. ACKNOWLEDGEMENTS. Tenant hereby acknowledges as follows:
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a. Landlord has designed and constructed the Building Shell
as a generic or "spec" office and manufacturing building
for group "B" occupancy. The Building Shell was not
constructed in contemplation of the Tenant's specific
improvements, use and/or occupancy;
b. Tenant has reviewed and inspected the Building Shell and
Building Shell plans and specifications and is satisfied
that the Building Shell will be suitable for the Tenant
Improvements and Tenant's intended use and operation
therein;
c. Except as to the Warranty (as defined in Section 2.6
below), Landlord has made not, and will not make, any
representations or warranties regarding the Building
Shell, the Common Areas, the Tenant Improvements, or any
aspect of the Project or the Common Areas.
d. Tenant has not relied on Landlord to provide any advice or
services in connection with the design of the Tenant
Improvements or as to any modifications which may need to
be made in order to accommodate the Tenant Improvements or
Tenant's particular use of the Premises.
e. Except as to the Warranty and subject to completion of
punchlist items as described in Section 2.4 below, upon
delivery of the Premises to Tenant, Tenant shall accept
the same, together with the Tenant Improvements, in their
"AS IS" in condition.
f. Tenant has requested that the Tenant Improvements be
designed and constructed on a "fast track" basis and, in
order to accommodate this, the Tenant Improvements will be
designed by the Building Architect and constructed by the
Building Contractor.
g. As a result of the "fast track" design and construction of
the Tenant Improvements, as requested by Tenant, during
the course of construction, the actual Improvement Costs
are likely to increase above any original estimates which
may be provided by the Building Contractor. H
h. Tenant will have the Space Plan and the Approved Plans
reviewed by its own consulting architect.
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2.2 CONSTRUCTION.
2.2.1 CONSTRUCTION. Landlord and Tenant agree that the
construction of the Tenant Improvements, as set forth on
the Approved Plans, will be carried out by the "BUILDING
CONTRACTOR", Xxxxxxxxx Xxxxx Construction. Landlord will
use commercially reasonably efforts to negotiate a
fixed-price contract with the Building Contractor (the
"CONSTRUCTION CONTRACT") which is competitive for similar
work in the Fremont-Newark area based upon "fast-track"
design and construction conditions.
Landlord shall use diligent efforts to have the Building
Contractor substantially complete Phase 1 of the Tenant
Improvements by October 4, 1999 (the "TARGET DATE").
Landlord shall use diligent efforts to have the Building
Contractor substantially complete Phase 2 of the Tenant
Improvements within thirty (30) days following the
substantial completion of Phase 1. "SUBSTANTIALLY
COMPLETE" "or "SUBSTANTIAL COMPLETION" shall mean that the
particular Phase of the Tenant Improvements have been
constructed in accordance with the Approved Plans (as
evidenced by a certificate of Substantial Completion
submitted by the Building Architect), as modified by
material change orders approved by Landlord and Tenant
except for minor "field" changes in the Approved Plans,
other minor deviations and punchlist items) and are in
such condition so as to allow Tenant to install Tenant's
own fixtures, furnishings, and equipment and, thereafter,
to conduct its operations.
2.2.2. IMPROVEMENT COSTS. Provided that Tenant has made all
deposits with Landlord with respect to the Excess Costs
(as provided below), Landlord shall advance all
Improvements Costs for the construction the Tenant
Improvements up to an amount equal to the Improvement
Allowance.
It is contemplated that the Improvement Costs will exceed
the Improvement Allowance ("EXCESS COSTS"), which Excess
Costs shall be borne by Tenant. In this regard, upon the
execution of this Lease, Tenant shall pay to Landlord the
sum of THREE HUNDRED TWENTY-FOUR THOUSAND FOUR HUNDRED
EIGHT DOLLARS ($324,408.00)("TENANT'S INITIAL ADVANCE").
On the date which is thirty (30) days [60 DAYS SEEMS TOO
LONG UNDER THE PRESENT SCHEDULE] following the execution
of this Lease, Tenant shall pay to Landlord an amount by
which (a) the estimated total Improvement Costs which
Landlord then expects to be incurred, exceeds (b) the sum
of the Improvement Allowance and Tenant's Initial Advance.
("TENANT'S SECOND ADVANCE"). Tenant's Initial Advance and
Tenant's Second Advance shall be applied by Landlord
towards the payment of Improvement Costs after Landlord
has expended the full amount of the Improvement Allowance.
In no event shall Landlord be obligated to expend from its
own funds (including funds advanced to Landlord from the
Project lender) more than the sum of the Improvement
Allowance.
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If upon completion of construction there are any Excess Costs
which have not been covered by Tenant's Initial Advance and
Tenant's Second Advance, then Tenant shall pay to Landlord, as
Additional Rent, any such remaining Excess Costs within ten (10)
days following written demand.
If, upon the completion of construction of the Tenant
Improvements and upon the payment of all amounts owing to the
Building Contractor and otherwise, there are any unexpended
portions of Tenant's Initial Advance and/or Tenant's Second
Advance ("TI SURPLUS"), then Landlord shall pay to Tenant any
such TI Surplus not later than thirty (30) days following the
completion of all punchlist items. If Landlord does not pay any
TI Surplus within the aforesaid thirty (30) day period, then the
TI Surplus shall accrue interest at the rate set forth in Section
28.8 below from the end of the aforesaid thirty (30) day period
until the date the payment is actually paid.
2.4 WALK-THROUGH-PUNCHLIST. Upon Substantial Completion of Phase 1,
Landlord, Tenant, Tenant's consultant, and the Building
Contractor shall conduct a walk-through of the Building to
inspect the Tenant Improvements as completed and shall prepare a
list of punchlist items to be completed. Landlord shall cause the
Building Contractor to complete all punchlist items within thirty
(30) days following the walk-through. Upon Substantial Completion
of Phase 2, the parties shall follow the same walk-through and
punchlist procedure. Upon Substantial Completion of both Phase 1
and Phase 2, Landlord shall diligently pursue obtaining from the
City of Fremont final inspections of the Tenant Improvements and,
if applicable, a certificate of occupancy for the Building.
2.5 DATE OF DELIVERY; AS IS. Landlord shall deliver the Premises to
Tenant upon the Substantial Completion of Phase 1 of the Tenant
Improvements. Tenant acknowledges that the Target Date of October
4, 1999 is a very early estimate of the date upon which Phase I
may be substantial completed and that it is likely that, despite
Landlord's diligent efforts, such substantial completion may not
be completed by that date. In this regard, Landlord shall not be
in default hereunder and shall not be liable to Tenant for any
damage or loss incurred by Tenant by reason of Landlord's
failure, for whatever reason, to cause the Premises to be
delivered by any particular date (including, without limitation,
the Target Date), nor shall this Lease be void or voidable on
account thereof. Notwithstanding the foregoing, if Phase 1 of the
Tenant Improvements are not Substantially Completed by January 1,
2000 and the delay in such Substantial Completion is not a result
of any Tenant Delays (as defined in Section 3.1 below), then at
any time during the period between January 1 and January 10,
2000, Tenant may provide written notice to Landlord electing to
terminate this Lease; provided, however, Tenant shall have no
right to terminate this Lease, as provided above, if Tenant has
taken occupancy of all or any part of the Building. If, within
five (5) days following a termination notice by Xxxxxx, Xxxxx 0
of the Tenant Improvements are
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not substantially completed, then this Lease shall terminate upon
the expiration of such five (5) day period and, thereafter,
neither Landlord nor Tenant shall have any further rights or
obligations hereunder. If, within five (5) days following a
termination notice by Xxxxxx, Xxxxx 0 of the Tenant Improvements
are substantially completed, then this Lease shall continue and
Tenant's termination notice shall be of no further force or
effect.
Subject to the completion of punchlist items and, except as to
the Warranty, Tenant shall accept the Premises (together with the
Tenant Improvements as completed) on the Commencement Date (as
defined below) in its "As Is" condition.
2.6 LIMITED WARRANTY. For a period of one (1) year following
Substantial Completion of each Phase of the Tenant Improvements,
Landlord warrants (the "WARRANTY") that each Phase has been
completed in a good and workmanlike manner free from defects, and
that all systems installed as part of such Phase will be in good
working order and condition. Tenant shall provide prompt written
notice to Landlord of any defect or condition to which the
Warranty applies (a "WARRANTY NOTICE"). Upon receipt of a
Warranty Notice from Tenant, Landlord shall be obligated, at its
cost and expense, to diligently cause the defect or condition to
be remedied within a reasonable period of time; provided,
however, in no event shall any defect or condition entitle Tenant
to terminate this Lease or provide to Tenant any right of offset,
abatement, or deduction as against any Rents becoming due
hereunder. The Warranty shall not apply to any component or
system within the Tenant Improvements which (a) have been
installed, altered, or modified by Tenant, (b) affected by the
installation of Tenant's fixtures, furnishings, and equipment or
by any other act or omission of Tenant, or (c) have been used in
a manner for which such component or system was not designed or
intended, or (d) have not been properly maintained to the extent
such maintenance is the responsibility of Tenant or to which
Tenant has otherwise conducted its own maintenance or repairs.
3. TERM; OPTION TO RENEW AND PURCHASE.
3.1 TERM. The term of this Lease (the "LEASE TERM") shall commence on
the Commencement Date and shall end on the date that is ten (10)
years thereafter. The "COMMENCEMENT DATE" shall be the date that
Phase 1 of the Tenant Improvements are substantially completed,
or the date the Tenant Improvements would have been substantially
completed but for any Tenant Delays. "TENANT DELAYS" on the part
of Tenant shall include, without limitation, Tenant's failure to
timely deposit funds with Landlord (as provided in Section 2.3.2
above), change orders requested by Tenant, and/or any failure by
Tenant to timely provide to Landlord, the Building Architect,
and/or the Building Contractor information or approvals as may be
requested from time to time; provided, however, an act or
omission on the part of Tenant shall only comprise a Tenant
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Delay if the completion of the Tenant Improvements are actually
delayed thereby and Landlord has provided to Tenant written
notice that such act or omission may delay the progress of
construction, which notice is provided by Landlord within five
(5) days following the date Landlord is informed that Tenant's
act or omission will cause a delay.
3.2 OPTION TO RENEW. The Landlord hereby grants to Tenant one option
to extend the Lease Term (the "OPTION") upon the following terms
and conditions:
(a) The Option shall give Tenant the right to extend the Lease
Term for one (1) additional five (5) year period (the
"EXTENDED TERM");
(b) Tenant shall give Landlord written notice of its exercise
of the Option no earlier than twelve (12) months nor later
than six (6) months before the date the Lease Term would
end but for said exercise;
(c) Tenant shall not have the right to exercise the Option if
at the time of exercise Tenant is in material default
under this Lease. The period of exercise for the Option
shall not be extended for any period for which Tenant is
unable to exercise the Option by reason of Tenant's
material default;
(d) All terms and conditions of this Lease shall apply during
the Extended Term except that Base Rent shall be
determined as provided in Section 4.2 below; and,
(e) Once Tenant delivers notice of its exercise of the Option
pursuant to (b) above, Tenant may not withdraw such
exercise, and such notice of exercise shall operate to
automatically extend the Lease Term; provided, however, if
Tenant is in material default under this Lease (provided
that Tenant's default with respect to any monetary
obligation shall in all events be regarded as material) on
the date an Extended Term is to begin, this Lease, at
Landlord's election and upon written notice from Landlord
specifying the default, shall not be extended pursuant to
the provisions of this Section 3.2, but shall terminate on
the last day of the Lease Term. If Landlord determines
that any exercise notice received from Tenant constitutes
an ineffectual exercise of the Option, then Landlord shall
provide to Tenant notice of that fact within three (3)
days following Landlord's receipt of the exercise notice.
The term "Lease Term" shall mean and refer to the initial term of
the Lease, as described in Section 3.1 above, together with the
Extended Term which has been put into effect by reason of an
exercise of the Option by Tenant pursuant to this Section 3.2.
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3.3 BUILDING PURCHASE RIGHTS.
3.3.1 OPTION TO PURCHASE THE BUILDING AND LAND. Upon the terms
and conditions set forth in this Section 3.3.1 Landlord
hereby grants to Tenant a one-time only option (the
BUILDING PURCHASE OPTION") to purchase the Building and
Land for a purchase price of EIGHTY SEVEN DOLLARS ($87.00)
per square foot plus the full amount of all Improvement
Costs incurred by Landlord (to the extent not reimbursed
from Tenant's Initial Advance and/or Tenant's Second
Advance) and upon the terms and provisions set forth in
the form "PURCHASE AGREEMENT" attached hereto as EXHIBIT
"B," subject to the following:
a. Not later than October 1, 1999, Landlord shall
deliver to Tenant the Due Diligence Documents. The
term "Due Diligence Documents" shall mean the
following items to the extent they are in the
possession of Landlord or Landlord's agents or
consultants: (a) any and all surveys of the Land,
(b) any and all permits, approvals, and other items
relating any governmental entitlements with respect
to the Building and Land, and (d) any and all
reports, studies, notices, or other information
received by Optionor, or otherwise in Optionor's
possession, relating to soil and subsurface
conditions or any other physical condition of the
Building and Land (including, without limitation,
information relating to the existence, release, or
presence of any Hazardous Materials). The Due
Diligence Documents shall also include a
preliminary report issued by Fidelity National
Title Company with respect to the Building and
Land, which report has been issued within the last
forty-five (45) days.
b. Upon the Commencement Date, Tenant and to Tenant's
agents, engineers, and/or contractors shall have
the right to conduct reasonable studies and
investigations of the Building and Land as may be
customary to an acquisition of real property.
Tenant, who will be responsible for restoring the
Property to substantially the same condition it was
in prior to said investigations. Tenant will
indemnify and hold Landlord harmless from any and
all liabilities, claims, and damages, that Landlord
may incur as a result of the negligent acts or
failures to act of Tenant and/or Tenant's agents in
furtherance of such inspections.
c. Except as provided in Section 3.3.1.e. below,
Tenant shall have the right to exercise the
Building Purchase Option at any time during period
commencing on the execution of the Lease (provided
that Tenant has paid to Landlord the security
deposit, rent deposit and Tenant's Initial Advance)
and ending on October 31, 1999 (the
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Tenant's Initial Advance) and ending on October 31,
1999 (the "BUILDING PURCHASE OPTION PERIOD").
Tenant shall exercise the Building Purchase Option
by delivering to Landlord, prior to the end of the
Building Purchase Option Period, (a) a currently
dated and executed Purchase Agreement in the form
attached hereto as EXHIBIT "B" and (b) a check in
the amount of ONE HUNDRED THOUSAND DOLLARS
($100,000.00) representing the "Deposit" under the
Purchase Agreement. The Building Purchase Option
shall automatically expire if Tenant fails to
exercise the Building Purchase Option within the
time and in the manner specified herein. Time is of
the essence. In this regard, any conditions or
modifications made by Tenant to the form of the
Purchase Agreement or the terms thereof, any
failure to execute the Purchase Agreement and/or to
deliver the Deposit, and/or any dating of the
Purchase Agreement as of a date other than the date
of exercise shall each be regarded as an
ineffectual exercise of the Building Purchase
Option. If Landlord determines that any exercise
notice received from Tenant constitutes an
ineffectual exercise of the Building Purchase
Option, then Landlord shall provide to Tenant
notice of that fact within three (3) days following
Landlord's receipt of the exercise notice.
d. Notwithstanding anything contained in this Section
3.3.1 to the contrary. Tenant may not exercise the
Building Purchase Option if there is a material
default under this Lease (provided that Tenant's
default with respect to any monetary obligation
shall in all events be regarded as material) by
Tenant under this Lease on the date of Tenant's
notice of exercise of the Building Purchase Option.
The Building Purchase Option Period shall not be
extended for any period in which Tenant is unable
to exercise the Building Purchase Option by reason
of a default by Tenant; provided, however, if there
is a default by Tenant under this Lease on the date
of Tenant's exercise of the Building Purchase
Option and the default by Tenant is later cured by
Tenant within the exercise period, then Tenant may
re-exercise the Building Purchase Option prior to
the end of such exercise period. If there is a
default by Tenant under this Lease on the Closing
Date (as defined in the Purchase Agreement), then
Landlord, in addition to any other remedies which
Landlord, may have under this Lease, may elect to
require, as a condition to the close of escrow,
that Tenant pay, in addition to the purchase price
and other amounts due from Tenant pursuant to the
Purchase Agreement, all amounts owning to Landlord
in connection with such default.
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e. Upon the close of escrow under the Purchase
Agreement, this Lease shall terminate, provided
that Tenant shall remain liable to Landlord with
respect to any unpaid amounts which became due
prior to the close of escrow and Tenant shall
continue to indemnify Landlord pursuant to any
indemnifications set forth in this Lease as they
relate to acts or occurrences arising prior to the
close of escrow.
f. In the event Tenant does not exercise the Building
Purchase Option or otherwise fails to carry out an
effective exercise thereof or in the event escrow
fails to close under the Purchase Agreement for any
reason, then this Lease shall continue in
accordance with the terms and provisions hereof
and, upon request by Landlord, Tenant shall
execute, notarize and deliver to Landlord, for
recordation in the official records of Alameda
County, a quitclaim deed releasing all rights of
Tenant to purchase the Building and Land. Tenant's
failure to provide the aforesaid quitclaim deed
within ten (10) days of Landlord's request shall
constitute a default under Section 19 below.
g. Notwithstanding anything to the contrary in this
Section 3.3.1, if Tenant receives a Purchase Offer
pursuant to Section 3.3.2 below and either rejects
such Purchase Offer or fails to accept such Offer
within the time and manner set forth Section 3.3.2
below, then the Building Purchase Option in this
Section 3.3.1 shall automatically expire and be of
no further force or effect.
3.3.2 RIGHT OF FIRST REFUSAL TO PURCHASE THE BUILDING AND LAND.
If, at any time during the period beginning on the
Commencement Date and ending on April 1, 2000 (the "NOTICE
PERIOD") period, Landlord receives a bona-fide offer from
an unrelated third party to purchase the Building and Land
upon terms and conditions which Landlord is willing to
accept , then Landlord, prior to accepting such
third-party offer, shall give Tenant written notice
offering (the "PURCHASE OFFER") to sell the Building and
Land, on an AS IS basis (subject to an assignment of
existing contractor warranties described below), for a
purchase price equal to EIGHTY-SEVEN DOLLARS ($87.00) per
square foot plus the full amount of all Improvement Costs
incurred by Landlord (to the extent not reimbursed from
Tenant's Initial Advance and/or Tenant's Second Advance).
In no event shall this Section 3.3.2. apply to any offer,
as between the members of the Landlord and/or their
related and/or affiliated entities or persons, to sell,
transfer, or otherwise dispose of interests in the
Building and Land or in the entity which comprises the
Landlord hereunder.
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Provided that there is no material default (provided that
Tenant's default with respect to any monetary obligation
shall in all events be regarded as material) by Tenant
under this Lease, Tenant shall have three (3) business
days following receipt of the Purchase Offer to elect in
writing to purchase pursuant to the offer set forth
therein. If Tenant accepts the offer set forth in the
Purchase Offer within the time and manner provided, then,
within forty-five (45) days following acceptance (subject
to a possible maximum fifteen (15) day extension to
accommodate any Tenant financing), Landlord and Tenant
shall close escrow whereupon the Tenant shall pay the full
amount of the Purchase Price in cash. Upon the close of
escrow, Landlord shall assign to Tenant any existing
warranties which Landlord may have received from the
Building Contractor to the extent the same may be
assigned, provided that Landlord shall have no obligation
to obtain any such warranties. Landlord shall retain the
right to make its own claims against the assigned
warranties to the extent Landlord, for any reason, becomes
liable to any party with respect to any matters which are
covered by such warranties. If Tenant elects to not
purchase the Building and Land pursuant to the offer set
forth in the Purchase Offer, or fails to elect to purchase
within the time and manner provided above, then (a)
Landlord shall be free to sell the Building and Land
pursuant to the third-party offer or to any other person
or entity upon such terms and conditions as Landlord, in
its sole and absolute discretion, shall determine and (b),
regardless of whether or not Landlord sells the Building
and Land to another party, Landlord shall have no further
obligation to submit a Purchase Offer or any other sale
offer to Tenant with respect to the Building and Land, nor
shall Tenant have any other further rights to purchase the
Building and Land. If Landlord intends to sell the
Building and Land at any time after the expiration of the
Notice Period, Landlord shall have no obligation to
provide to Tenant a Purchase Offer pursuant to this
Section 3.3.
Except as set forth in this Section 3.3 and
notwithstanding any other provision of this Lease to the
contrary, Tenant shall have no other rights of first
offer, options, or similar rights with respect to the
Building and Land.
If there is a default under this Lease by Tenant on the
closing date of Tenant's purchase of the Building and
Land, then Landlord, in addition to any other remedies
Landlord may have under this Lease, may elect to require,
as a condition to the close of escrow, that Tenant pay, in
addition to the purchase price and other amounts due from
Tenant all amounts owning to Landlord in connection with
such default.
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Upon the close of escrow, this Lease shall terminate, provided
that Tenant shall remain liable to Landlord with respect to any
unpaid amounts which became due prior to the close of escrow and
Tenant shall continue to indemnify Landlord pursuant to any
indemnifications set forth in this Lease as they relate to acts
or occurrences arising prior to the close of escrow.
3.4 BUILDING C PURCHASE AND LEASE RIGHTS.
3.4.1 OPTION TO PURCHASE BUILDING C. Tenant acknowledges that
Landlord may construct a third building within the
Project, which building, together with the legal parcel on
which it is situated, is referred to herein as "BUILDING
C". Upon the terms and conditions set forth in this
Section 3.4.1, Landlord hereby grants to Tenant a one-time
only option (the "BUILDING C PURCHASE OPTION") to purchase
Building C for a purchase price of EIGHTY TWO DOLLARS
($82.00) per square foot, in completed "shell" condition
comparable to the Building (with no "tenant" improvements
or improvement allowance and on an AS IS basis) and upon
the other terms and provisions set forth in the form
Purchase Agreement attached hereto as EXHIBIT "B," subject
to the following:
a. Except as provided in Section 3.4.1.e. below,
Tenant shall have the right to exercise the
Building C Purchase Option at any time during
period commencing on the execution of the Lease
(provided that Tenant has paid to Landlord the
security deposit, rent deposit and Tenant's Initial
Advance) and ending on April 1, 2000 (the "BUILDING
C PURCHASE OPTION PERIOD"). Tenant shall exercise
the Building C Purchase Option by delivering to
Landlord, prior to the end of the Option Period,
(a) a currently dated and executed Purchase
Agreement in the form attached hereto as EXHIBIT
"B" and (b) a check in the amount of ONE HUNDRED
THOUSAND DOLLARS ($100,000.00) representing the
"Deposit" under the Purchase Agreement. The
Building C Purchase Option shall automatically
expire if Tenant fails to exercise the Building C
Purchase Option within the time and in the manner
specified herein. Time is of the essence. In this
regard, any conditions or modifications made by
Tenant to the form of the Purchase Agreement or the
terms thereof, any failure to execute the Purchase
Agreement and/or to deliver the Deposit, and/or any
dating of the Purchase Agreement as of a date other
than the date of exercise shall each be regarded as
an ineffectual exercise of the Building C Purchase
Option. If Landlord determines that
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any exercise notice received from Tenant
constitutes an ineffectual exercise of the Building
C Purchase Option, then Landlord shall provide to
Tenant notice of that fact within three (3) days
following Landlord's receipt of the exercise
notice.
If, upon an effective exercise of the Building C
Purchase Option, Landlord has not completed the
construction of the shell improvements which
comprise Building C, then Landlord shall utilize
commercially reasonable efforts to complete
Building C. Notwithstanding anything to the
contrary in this Section 3.4 or in the Purchase
Agreement, the close of escrow for Tenant's
acquisition of Building C shall not occur until the
shell improvement which comprise Building C are
substantially completed, as evidenced by a
certificate executed by the architect of record for
Building C.
b. Notwithstanding anything contained in this Section
3.4.1 to the contrary, Tenant may not exercise the
Building C Purchase Option if there is a material
default (provided that Tenant's default with
respect to any monetary obligation shall in all
events be regarded as material) by Tenant under
this Lease on the date of Tenant's notice of
exercise of the Building C Purchase Option. The
period of exercise of the Building C Purchase
Option shall not be extended for any period in
which Tenant is unable to exercise the Building C
Purchase Option by reason of a default by Tenant;
provided, however, if there is a default by Tenant
under this Lease on the date of Tenant's exercise
of the Building C Purchase Option and the default
by Tenant is later cured by Tenant within the
exercise period, then Tenant may re-exercise the
Building C Purchase Option prior to the end of such
exercise period. If there is a default by Tenant
under this Lease on the Closing Date (as defined in
the Purchase Agreement), then Landlord, in addition
to any other remedies Landlord may have under this
Lease, may elect require, as a condition to the
close of escrow, that Tenant pay, in addition to
the purchase price and other amounts due from
Tenant pursuant to the Purchase Agreement, all
amounts owning to Landlord in connection with such
default.
c. In the event Tenant does not exercise the Xxxxxxxx
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X Xxxxxxxx Option or otherwise fails to carry out
an effective exercise thereof or in the event
escrow fails to close under the Purchase Agreement
for any reason, Tenant shall execute, notarize and
deliver to Landlord, for recordation in the
official records of Alameda County, a quitclaim
deed releasing all rights of Tenant to purchase
Building C. Tenant's failure to provide the
aforesaid quitclaim deed within ten (10) days of
Landlord's request shall constitute a default under
Section 19 below.
d. Notwithstanding anything to the contrary in this
Section 3.4.1, if Tenant receives a Purchase Offer
pursuant to Section 3.4.2 below and either rejects
such Offer or fails to accept such Offer within the
time and manner set forth Section 3.4.2 below, then
the Building C Purchase Option in this Section
3.4.1 shall expire and be of no further force or
effect.
e. If prior to Tenant's exercise of the Building C
Purchase Option pursuant to this Section 3.4.1,
Landlord has leased all or a portion of Building C
pursuant to one or more third party leases ("THIRD
PARTY LEASE(S)"), then, so long as Landlord has
complied with the provisions of Section 3.4.3 below
prior to entering into the first of any Third Party
Leases, the purchase price to be paid by Tenant
upon the Close of Escrow shall be increased by the
amount of all costs incurred by Landlord in
connection with the Third Party Lease(s). The
aforesaid costs shall be limited to those incurred
only with respect to the Third Party Lease(s) and
shall include, without limitation, any improvement
allowances actually advanced by Landlord, leasing
commissions, attorneys fees, and marketing costs.
3.4.2 RIGHT OF FIRST REFUSAL TO PURCHASE BUILDING C. If, at any
time during the period beginning on the Commencement Date
and ending on April 1, 2000 (the "BUILDING C NOTICE
PERIOD"), Landlord receives a bona-fide offer from an
unrelated third party to purchase Building C upon terms
and conditions which Landlord is willing to accept, then
Landlord, prior to accepting such third-party offer, shall
give Tenant a written Purchase Offer offering to sell
Building C, in completed "shell" condition comparable to
the Building (with no "tenant" improvements or improvement
allowance and on an AS IS basis), for a purchase price
equal to EIGHTY-TWO DOLLARS ($82.00) per square foot. In
no event shall this Section 3.4.2. apply to any offer, as
between the members of the Landlord
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and/or their related and/or affiliated entities or
persons, to sell, transfer, or otherwise dispose of
interests in Building C or in the entity which comprises
the Landlord hereunder.
Provided that there is no material default (provided that
Tenant's default with respect to any monetary obligation
shall in all events be regarded as material) by Tenant
under this Lease, Tenant shall have three (3) business)
days following receipt of the Purchase Offer to elect in
writing to purchase pursuant to the offer set forth
therein. If Tenant elects to purchase within the time and
manner provided in the Purchase Offer, then, within
forty-five (45) days following acceptance (subject to a
possible maximum fifteen (15) day extension to accommodate
any Tenant financing), Landlord and Tenant shall close
escrow whereupon the Tenant shall pay the full amount of
the Purchase Price in cash.
If, upon an Tenant's election to buy Building C following
receipt of a Purchase Offer, Landlord has not completed
the construction of the shell improvements which comprise
Building C, then Landlord shall utilize commercially
reasonable efforts to complete Building C. Notwithstanding
anything to the contrary in this Section 3.4, the close of
escrow for Tenant's acquisition of Building C shall not
occur until the shell improvements which comprise Building
C are substantially completed, as evidenced by a
certificate executed by the architect of record for
Building C. Upon the close of escrow, Landlord shall
assign to Tenant any existing warranties which Landlord
may have received from the contractor of Building C to the
extent the same may be assigned, provided that Landlord
shall have no obligation to obtain any such warranties.
Landlord shall retain the right to make its own claims
against the assigned warranties to the extent Landlord,
for any reason, becomes liable to any party with respect
to any matters which are covered by such warranties.
If prior to Tenant's acceptance of a Purchase Offer
pursuant to this Section 3.4.2, Landlord has leased all or
a portion of Building C to pursuant to one or more Third
Party Lease(s), then, so long as Landlord has complied
with the provisions of Section 3.4.3 below prior to
entering into the first of any Third Party Leases, the
purchase price to be paid by Tenant upon the Close of
Escrow shall be increased by the amount of all costs
incurred by Landlord in connection with the Third Party
Lease(s). The aforesaid costs shall be limited to those
incurred only with respect to the Third Party Lease(s) and
shall include, without limitation, any improvement
allowances actually advanced by Landlord, leasing
commissions, attorneys fees, and marketing costs.
If Tenant rejects the offer set forth in the Purchase
Offer, or fails to accept the same within the time and
manner provided above, then (a)
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Landlord shall be free to sell Building C pursuant to the
third-party offer or to any other person or entity upon
such terms and conditions as Landlord, in its sole and
absolute discretion, shall determine and (b), regardless
of whether or not Landlord sells Building C to another
party, Landlord shall have no further obligation to submit
a Purchase Offer or any other sale offer to Tenant with
respect to Building C, nor shall Tenant have any other
further rights to purchase Building C. If Landlord intends
to sell Building C at any time after April 1, 2000, then
Landlord shall have no obligation to provide to Tenant an
Offer pursuant to this Section 3.4.2.
If there is a default under this Lease by Tenant on the
closing date of Tenant's purchase of Building C, then
Landlord, in addition to any remedies Landlord may have
under this Lease, may elect to require, as a condition to
the close of escrow, that Tenant pay, in addition to the
purchase price and other amounts due from Tenant, all
amounts owning to Landlord in connection with such
default.
3.4.3 RIGHT OF FIRST REFUSAL TO LEASE BUILDING C. If, at any
time during the period beginning on the Commencement Date
and ending on April 1, 2000 (the "NOTICE PERIOD"),
Landlord receives a bona-fide offer from an unrelated
third party to lease all or any part of the Building upon
terms and conditions which Landlord is willing to accept,
then Landlord, prior to accepting such third-party offer,
shall give Tenant written notice offering (the "BUILDING C
LEASE OFFER") to Lease the entirety of the Building (even
if the third-party offer is only for a portion of Building
C) upon the following terms and provisions (the "OFFER
TERMS"): SEVENTY-NINE CENT ($0.79) per square foot base
rent, triple-net, TEN DOLLARS ($10.00) per square foot
improvement allowance for tenant improvements to be
approved by Landlord, in completed "shell" condition
comparable to the Building (with no "tenant" improvements
and on an AS IS basis), ten (10) year term, and a security
deposit to be determined by Landlord's lender for Building
C.
Provided that there is no default by Tenant under this
Lease, Tenant shall have three (3 business)) days
following receipt of the Building C Lease Offer to accept
in writing the Offer Terms. Tenant shall accept the
Building C Lease Offer by delivering to Landlord, within
the aforesaid five (5) business days, (a) a written notice
of acceptance, and (b) a rent deposit in an amount equal
to he base rent which will be due for the first month of
the Building C lease term. If Tenant accepts the Offer
Terms, then Landlord and Tenant, within thirty (30) days
following Tenant's acceptance, shall enter into a written
lease agreement in the form of this Lease, which lease
shall contain the Offer Terms, but shall not contain
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any of the various extension options or other rights as
are set forth in Section 3.2, 3.3, or 3.4 of this Lease.
If Tenant rejects the Building C Offer, or fails to accept
the same within the time and manner provided above, then
Tenant's right to lease Building C pursuant to this
Section 3.4.3 shall expire and be of no further force or
effect and then Landlord shall be free to lease Building C
pursuant to the third-party offer or to any other person
or entity upon such terms and conditions as Landlord, in
its sole and absolute discretion, shall determine;
provided, however, Tenant, upon receipt of the Building C
Lease Offer, shall, within three (3) business days, have
the right to exercise the Building C Purchase Option
pursuant to Section 3.4.1 above.
If there is a material default (provided that Tenant's
default with respect to any monetary obligation shall in
all events be regarded as material) by Tenant under this
Lease prior to the parties execution of a lease for
Building C, then Landlord, (in addition to its other
rights and remedies under this Lease, may elect terminate
the Building C Lease Offer, in which event Tenant shall
have no further rights to lease Building C or (ii)
require, as a condition to Landlord's execution of the
Building C lease, that Tenant pay all amounts owning to
Landlord in connection with such default.
Except as set forth herein above and notwithstanding any
other provision of this Lease to the contrary, Tenant
shall have no other rights of first offer, options, or
similar rights with respect to Building C.
4. RENT.
4.1 BASE RENT. Tenant agrees, as of the Commencement Date, to pay
Landlord, without prior notice, demand, or right of deduction
and/or offset, monthly "Base Rent" in the amounts set forth in
EXHIBIT "C" attached hereto, which Base Rent shall be due and
payable at Landlord's address shown above on the first day of
each calendar month throughout the Lease Term; provided, however,
Base Rent for the first thirty (30) days of the Lease Term shall
be equal to one half (1/2) of the applicable amount set forth in
EXHIBIT "C" ATTACHED HERETO. Base Rent for any period during the
Lease Term which is for less than one (1) month shall be prorated
based on a thirty (30) day month. For the purposes of determining
the applicable rent under EXHIBIT "C", "LEASE YEAR" shall mean
each successive twelve (12) month period during the Lease Term,
commencing on the Commencement Date.
4.2 RENT FOR EXTENDED TERM. Base Rent for the Extended Term shall be
an amount equal to the fair market rental value of the Premises
in relation to market condi-
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tions at the time of the extension; provided, however, in no
event shall the Base Rent for the Extended Term be less than the
Base Rent applicable during the tenth (10th) lease year of the
Lease Term, nor shall the annual increases of such Base Rent be
less then applicable market rates. The fair market rental value
of the Premises shall be determined by and as follows:
4.2.1 MUTUAL AGREEMENT. After timely receipt by Landlord of
Tenant's notice of exercise of the Option, Landlord and
Tenant shall have a period of thirty (30) days in which to
agree on Base Rent for the Extended Term. If Landlord and
Tenant agree on Base Rent during that period, they shall
immediately execute an amendment to this Lease stating
Base Rent for the Extended Term. If Landlord and Tenant
are unable to so agree on Base Rent, then Base Rent for
the Extended Term shall be calculated by utilizing the
fair market rental value of the Premises determined as
provided in Section 4.2.2 below.
4.2.2 APPRAISAL. Within ten (10) days after the expiration of
the thirty (30) day period described in Section 4.2.1
above, each party, at its cost and by giving notice to the
other party, shall appoint M.A.I. real estate appraiser,
with at least five (5) years full-time commercial
appraisal experience in Alameda County, to appraise and
set the fair market rental value of the Premises. If a
party does not appoint an appraiser within five (5) days
after the other party has given notice of the name of its
appraiser, the single appraiser appointed shall be the
sole appraiser and shall set the fair market rental value
of the Premises. The cost of such sole appraiser shall be
borne equally by the parties. The two appraisers appointed
by the parties shall meet promptly and attempt to set the
fair market rental value of the Premises. If they are
unable to agree within twenty (20) days after the last
appraiser has been appointed, then the two appraisers
shall attempt to select a third appraiser meeting the
qualifications stated in this Section 4.2.2 within ten
(10) days after the last day the two appraisers are given
to set the fair market rental value of the Premises If
they are unable to agree on the third appraiser, either of
the parties to this Lease, by giving ten (10) days notice
to the other party, may apply to the presiding judge of
the Superior Court of Alameda County for the selection of
a third appraiser who meets the qualifications stated
above. Each of the parties shall bear one-half (1/2) of
the cost of appointing the third appraiser and of paying
the third appraiser's fee. The third appraiser, however
selected, shall be instructed to select which of the two
appraisals submitted by the parties' respective appraisers
more closely represents the fair market rental value for
the Premises, which selection shall be the fair market
rental value of the Premises. In establishing the fair
market rental value, the appraiser or appraisers shall
consider (on a triple net basis) the reasonable market
rental value for the Premises (which shall include
considerations of (a) rental rates for com-
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parable space with comparable tenant improvements
(provided that in no event shall the determination of the
fair market rental value of the Premises include rent
applicable to any portion of the Tenant Improvements in
excess of the Improvement Allowance or of any other
improvements paid for directly by Tenant), (b) cost of
living increases or other rental adjustments (c) the
relative strength of the tenants, and (d) the size of the
space without regard to the existence of this Lease.
4.3 ADDITIONAL RENT. In addition to Base Rent, Tenant shall pay, as
"ADDITIONAL RENT," Tenant's Percentage Share of Operating
Expenses and Taxes, utility costs as referred to in Section 7
below, late charges and interest as provided for in this Lease,
and all other items to be paid hereunder to Landlord. The term
"RENT(S)" whenever used herein refers to Base Rent and Additional
Rent.
4.4 RENT DEPOSIT. Upon execution of this Lease, Tenant shall pay to
Landlord the sum of SIXTY THREE THOUSAND EIGHT HUNDRED DOLLARS
AND TWENTY-FOUR CENTS ($63,800.24) as a prepayment towards the
first SIXTY THREE THOUSAND EIGHT HUNDRED DOLLARS AND TWENTY-FOUR
CENTS ($63,800.24) of Base Rent which becomes due starting on the
Commencement Date.
5. SECURITY DEPOSIT. Upon execution of this Lease, Tenant shall deposit
with Landlord EIGHT HUNDRED NINETY THOUSAND EIGHT HUNDRED SEVEN DOLLARS
AND SIXTY-THREE CENTS ($890,807.63) as a security deposit for the
performance by Tenant of the provisions of this Lease. The security
deposit shall consist of (a) cash in the amount of NINETY THOUSAND EIGHT
HUNDRED SEVEN DOLLARS AND SIXTY-THREE CENTS ($90,807.63) (the, "CASH
DEPOSIT") and (b) a Letter of Credit (the, "LETTER OF CREDIT") in the
amount of EIGHT HUNDRED THOUSAND DOLLARS ($800,000.00) which meets the
requirements set forth below. Tenant may elect to deposit the Letter of
Credit with Landlord within fifteen (15) days following Tenant's
execution of this Lease, provided that in no event shall the Letter of
Credit be deposited with Landlord later than 5:00 p.m. on September 17,
1999. Tenant's failure to deliver the security deposit, or any component
thereof, as and when required in this Section 5 shall be a material
default by Tenant under this Lease. Upon such default, Landlord, in
addition to its other rights and remedies, may instruct the Building
Contractor to cease construction of the Tenant Improvements until the
default is cured. In addition, any cessation of work shall be
automatically regarded as a Tenant Delay without the necessity of any
notice on the part of Landlord. If Tenant is in default, Landlord can
use the security deposit, or any portion of it, to cure the default or
to compensate Landlord for all damages sustained by Landlord resulting
from Tenant's default. Tenant shall pay immediately on demand to
Landlord a sum equal to the portion of the security deposit expended or
applied by Landlord as provided in this Section so as to maintain the
security deposit in the sum initially deposited with Landlord. In this
regard, in the event Landlord draws only a portion of the Letter of
Credit (as described in 5. e. below), then Tenant shall immediately
provide to Landlord a replacement Letter
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of Credit in the amount of EIGHT HUNDRED THOUSAND DOLLARS ($800,000.00)
which meets the requirements set forth below. As soon as practicable
after the expiration or termination of this Lease, Landlord shall return
the security deposit to Tenant, less such amounts as are reasonably
necessary to remedy Tenant's defaults in payment of Rent, to repair
damages to the Premises caused by Tenant or to clean the Premises upon
such termination, reasonable and normal wear and tear excepted. In the
event of the sale of the Building, the security deposit will be
transferred to the purchaser and Landlord will be relieved of any
liability with reference to such security deposit upon such transfer.
Landlord shall not be required to keep the security deposit separate
from its other funds, and Tenant shall not be entitled to interest on
such deposit. Notwithstanding the foregoing, interest shall accrue on
the unused balance of the Cash Deposit at an annual rate of two percent
(2%) from the date the Cash Deposit is placed with Landlord through the
date that the Cash Deposit, or any remaining portion thereof, is
returned to Tenant following the expiration or termination of this
Lease. Accrued interest on the unused portion of the Cash Deposit shall
only be payable to Tenant upon the expiration or termination of this
Lease; provided, however, no interest shall be payable to Tenant if this
Lease has been terminated by Landlord following an event of default on
the part of Tenant.
The Letter of Credit shall comply with the following:
a. The Letter of Credit shall be issued by a financial institution
with a rating of "Aa" or better by Xxxxx'x Investor Service and
"AA" or better by Standard & Poors Corporation and otherwise
reasonably approved by Landlord and any lender which has
provided, or will be providing, financing for the Building (a
"BUILDING LENDER"), which issuer shall have offices from which
the Letter of Credit may be drawn in either Alameda County or
Santa Xxxxx County, California;
b. The Letter of Credit shall be for the direct account and benefit
of Landlord and, if requested by Landlord, the Building Lender,
and in the form of a clean, irrevocable, non-documentary and
unconditional letter of credit and otherwise in form reasonably
approved by Landlord and the Building Lender
c. The Letter of Credit shall be fully transferable and/or
assignable by Landlord and/or the Building Lender to successor
owners of the Building, the Building Lender, or any other party
without the payment of fees or charges;
d. The Letter of Credit shall, on its face, be for an initial term
of one year with an automatic extension for consecutive periods
of one year each, unless the issuer thereof sends notice (the
"NON-RENEWAL NOTICE") to Landlord by certified mail not less than
thirty (30) days prior to the then expiration date of the Letter
of Credit;
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e. The Letter of Credit shall, on its face, state that Landlord
shall have the right to draw thereunder upon presentation of a
written statement certifying that there has occurred an event of
default under this Lease. Upon an event of default, Landlord
shall only be entitled to draw a portion of the Letter of Credit
which is equal to the damages which Landlord reasonably
determines Landlord has incurred or will incur in connection
therewith (which damages may include all damages to which
Landlord may be entitled pursuant to Section 20 below). Prior to
making a draw upon the Letter of Credit by reason of a default by
Tenant, Landlord shall have provided to Tenant written notice of
the subject default.
f. The Letter of Credit shall, on its face, also state that Landlord
shall have the right to draw the full amount thereof upon written
request given within thirty (30) days following Landlord's
receipt of a Non-Renewal Notice.
g. The Letter of Credit shall also contain such other provisions as
may be requested by the Building Lender.
The Letter of Credit may be terminated by Tenant, upon the earlier of
the following:
A. Tenant has, following the Commencement Date, six (6) consecutive
financial quarters of net profits from its operations and
provides to Landlord audited financial statements for two (2)
full fiscal years following the Commencement Date showing net
profit from operations; or,
B. Tenant has completed a public offering of its stock which nets to
Tenant not less than Eighty Million Dollars ($80,000,000.00).
6. OPERATING EXPENSES AND TAXES.
6.1 PAYMENT BY TENANT. Pursuant to this Section 6, Tenant shall pay
to Landlord Tenant's Percentage Share of Operating Expenses and
Taxes.
a. OPERATING EXPENSES. Landlord shall determine or estimate
the amount of Tenant's Percentage Share of Operating
Expenses for the calendar year in which the Occupancy Date
occurs. Beginning on the Commencement Date, one-twelfth
(1/12) of the amount estimated by Landlord to be Tenant's
Percentage Share of Operating Expenses shall be due and
payable by Tenant to Landlord, as Additional Rent, on the
first day of each calendar month remaining in the calendar
year. Thereafter, Landlord may estimate such increases to
Tenant's Percentage Share of Operating Expenses as of the
beginning of each calendar year and may require Tenant to
pay one-twelfth (1/12) of such estimated amount as
Additional Rent hereunder as of the first day of each
calendar month.
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In the event that during the course of any calendar year
Operating Expenses have increased by more than five
percent (5%) over the amount of Operating Expenses
estimated by Landlord at the commencement of that calendar
year, Landlord may recalculate the amount of the monthly
estimated payments to be paid by Tenant in order to take
into account any such increases and, following notice from
Landlord of any such increase, Tenant shall pay the full
amount of the recalculated payments on a monthly basis for
the remainder of the subject calendar year. In making the
aforesaid recalculation, Landlord may include amounts
necessary to reimburse Landlord for any increased
Operating Expenses applicable to that portion of the
subject calendar year which was prior to the date of
Landlord's notice.
Not later than ninety (90) days following any calendar
year (including the year following the year in which this
Lease terminates), Landlord shall furnish Tenant with a
true and correct accounting of the actual Operating
Expenses incurred by Landlord in the preceding calendar
year, and within thirty (30) days of Landlord's delivery
of such accounting, Tenant shall pay to Landlord the
amount of any underpayment by Tenant of Tenant's
Percentage Share of Operating Expenses. Notwithstanding
the foregoing, failure by Landlord to give such accounting
shall not constitute a waiver by Landlord of its right to
collect Tenant's Percentage Share of Operating Expenses or
any under-payment by Tenant thereof. Landlord shall credit
the amount of any overpayment by Tenant toward the next
estimated installment(s) of Tenant's Percentage Share of
Operating Expenses or, where the term of the Lease has
expired or been terminated (other than due to a default by
Tenant), shall refund the amount of overpayment to Tenant
within thirty (30) days without obligation upon Tenant to
demand such refund from Landlord.
b. TAXES. Tenant shall pay to Tenant's Percentage Share of
Taxes within ten (10) days following the written demand by
Landlord therefor, which demand shall be accompanied by a
copy of the tax xxxx reflecting the Taxes for which
Landlord is seeking payment and shall be made by Landlord
no earlier than thirty (30) days prior to the due date of
such Taxes. If any Taxes cover any period of time either
prior to the Occupancy Date or after the expiration of the
Lease Term, Tenant's Percentage Share of Taxes shall be
prorated to cover only the period of time following the
Commencement Date or prior to the expiration of the Lease
Term, as applicable.
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Within twelve (12) months following the end of any calendar year,
Tenant shall have the right, at it sole cost and expense, to
review Landlord's books and records with respect to the Operating
Expenses and Taxes for such calendar year. If upon such review it
is determined that there were any errors in the calculation of
Operating Expenses or Taxes, then, within thirty (30) days after
such determination, Landlord shall credit any overpayment by
Tenant to Base Rent thereafter becoming due or Tenant shall pay
to Landlord any underpayment, as the case may be. In the event
that a review by Tenant determines that Tenant has overpaid by
more than three percent (3%), then Landlord shall reimburse
Tenant for the reasonable out-of-pocket costs incurred by Tenant
in connection with such review.
6.2 DEFINITIONS. "TENANT'S PERCENTAGE SHARE" shall be (a) one hundred
percent (100%) which respect to all Operating Expenses and Taxes
which are directly attributable to Building, including, without
limitation, all Common Area Expenses (as defined in the
Declaration) which are allocable to the Building's Exclusive
Common Area, and (b) twenty-nine and five tenths percent (29.5%)
as to Common Area Expenses which are attributable to the
Non-Exclusive Common Areas (as defined in the Declaration).
"OPERATING EXPENSES" are defined as all reasonable costs and
expenses paid or incurred by Landlord in connection with the
ownership, maintenance, repair, management, and operation of the
Premises, the Building, and the Common Areas, which reasonable
costs and expenses shall include, without limit, the following:
i. Landlord's reasonable costs and expenses in carrying out
repairs and maintenance pursuant to Section 11.2(b) and
(c) below, the Building's percentage share of all Common
Area Expenses and other expenses benefiting the Project in
general and all of the Exclusive Common Area Expenses
allocable to the Building;
ii. Landlord's cost of fire, extended coverage (including
rental loss insurance) and other insurance for the
Building and the Land;
iii. Landlord's reasonable cost of the fire sprinkler
monitoring system;
iv. a annual management fee equal to three percent (3%) of the
gross revenues from the Building; and,
v. the amortized portion of any capital expenditures incurred
by Landlord with respect to the Building, to the extent
such capital expenditures are intended to reduce or
replace other items of Operating Expenses.
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"Amortized portion" of any capital expenditure to be paid
by Tenant shall mean Tenant's Percentage Share of the
following: the amount of the expenditure amortized (on a
monthly basis) over the useful life of the item to which
the expenditure is applicable. Tenant's Percentage Share
of such amortized amount shall be payable in each month
after such expenditure is incurred until the earlier of
(i) the expiration of the Lease Term, or (ii) the end of
the useful life of the item to which the expenditure is
applicable
"TAXES" are defined as all real property taxes applicable to the
Land, the Building, and the Premises. The term "real property
taxes" shall include any form of assessment (general, special,
supplemental, ordinary or extraordinary), commercial rental tax,
improvement bond or bonds, license fee, license tax, rental tax,
levy, penalty imposed by any authority having the direct or
indirect power of tax, including any city, county, state or
federal government, or any school, agricultural, lighting,
drainage or other improvement district thereof, as against any
legal or equitable interest of Landlord in the Land, the
Building, and/or the Premises, as against Landlord's right to
rent or to other income therefrom, or as against Landlord's
business of leasing the Premises or the occupancy of Tenant, or
any other tax, fee, or excise, however described, including any
value added tax, or any tax imposed in substitution, partially or
totally, of any tax previously included within the definition of
real property taxes, or any additional tax, the nature of which
was previously included within the definition of real property
tax. The term "real property taxes" shall not include any income
or franchise taxes imposed on Landlord. If, for any reason, the
Taxes for the Land, Building, and Premises are not separately
assessed from the Project as a whole, then Taxes shall be
allocated to the Land, Building, and Premises based upon the
percentage in which Common Area Expenses are allocated to the
Building pursuant to the Declaration.
7. UTILITIES. Tenant shall be solely responsible for paying the cost of all
water, gas, heat, electricity, telephone, garbage and other utilities
directly used on the Premises. Tenant shall pay directly to the utility
provider the cost of all such utilities. Tenant, as part of Tenant's
Percentage Share of Operating Expenses, will pay for a portion of the
utilities servicing the Non-Exclusive Common Area and for all of the
utilities servicing the Building's Exclusive Common Area.
8. LATE CHARGES. Tenant acknowledges that late payment by Tenant to
Landlord of Base Rent. Tenant's Percentage Share of Operating Expenses
and Taxes or other sums due hereunder will cause Landlord to incur costs
not contemplated by this Lease, the exact amount of such costs being
extremely difficult and impracticable to fix. Such costs include,
without limitation, processing and accounting charges and late charges
that may be imposed on Landlord by the terms of any encumbrances or
notes secured by any encumbrance covering the Premises. Therefore, if
any installment of Base Rent or other sum due from Tenant is not
received by Landlord when due, then, within ten (10) days
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following the date said Base Rent or other sum is due, Tenant shall pay
to Landlord, without additional invoice or demand, an additional sum
equal to six percent (6%) of such overdue amount as a late charge;
provided, however, if payments of Base Rent have been made to Landlord
in a timely manner pursuant to automatic wire transfer then the late
charge herein shall be an additional sum equal to five percent (5%) of
the overdue amount. 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. The accrual and/or 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 Landlord's other rights and remedies.
9. USE OF PREMISES; COMPLIANCE WITH LAWS.
9.1 GENERAL. The Premises are to be used for office, research and
development, and light manufacturing for group B occupancy
(collectively, "TENANT'S OPERATIONS"). Any other use of the
Premises shall only be made upon the prior written consent of
Landlord, which consent shall not be unreasonably withheld if any
proposed change in use would be allowed under applicable land use
ordinances. Tenant shall not do anything or permit anything to be
done in or about the Premises nor keep or bring anything or
permit anything to be kept or brought therein which will in any
way increase the existing rate of or affect any policy of fire or
other insurance upon the Building or any of its contents, or
cause a cancellation of any insurance policy. Tenant shall not
use or allow the Premises to be used for any unlawful purpose,
nor shall Tenant cause, maintain or permit any nuisance in, on or
about the Premises. Tenant shall not damage or deface or
otherwise commit or suffer to be committed any waste in or upon
the Premises. Tenant shall honor the terms of all recorded
covenants, conditions and restrictions relating to the Land.
Tenant shall honor the terms of any reasonable rules and
regulations established by Landlord during the Lease Term which
relate to the Premises and/or the Building.
In connection with Tenant's use of the Premises, Tenant shall, at
its sole cost and expense, do the following:
a. Apply for, obtain and maintain throughout the Lease Term
any and all permits, licenses and other governmental
approvals which are required in connection with Tenant's
Operations;
b. Comply with any and all laws, rules, regulations or
ordinances (collectively, "Law") of any governmental
authority which govern Tenant's Operations;
c. Adopt such measures as are, from time to time, necessary
or required in order to prevent injury, or damage to
persons or properties, in or
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around the Premises as a result of any activities related
to Tenant's Operations;
d. Subject to Article 10 below, carry out any and all
alterations and improvements to the Premises which may be
necessary in order to comply with the Laws, to the extent
such compliance is (1) required for Tenant's specific use
or occupancy of the Building, (2) imposed in connection
with any alterations or improvements being made by, or on
behalf of Tenant, or (3) imposed in connection with any
governmental permit, approval, or authorization applied
for by Tenant; and,
e. Comply with all of the terms and provisions of the
Declaration, as the same may be amended from time to time
during the Lease Term.
9.2 HAZARDOUS MATERIALS.
9.2.1 PROHIBITION. Tenant and Tenant's agents, contractors,
subcontractors, and employees shall not use, store,
release or dispose of (collectively "Release(s)"), or
allow a Release of, any Hazardous Materials (defined
below) in or about the Premises, except that Tenant may,
subject to the terms of this Lease, use and store in the
Premises any Permitted Materials (defined below). Tenant
shall, at its sole cost and expense, comply with any and
all laws, rules, regulations or ordinances of any
governmental authority which govern the use, handling or
storage of any Hazardous Materials which are placed in or
about the Premises in connection with Tenant's operations
or otherwise relating to any activity undertaken by, or on
behalf of, Tenant. All provisions of this Lease relating
to Tenant's obligations with respect to Hazardous
Materials, including, without limitation, the obligations
set forth in this Section 9.2, in Section 11.1 (regarding
maintenance of the Premises) and Section 13 (regarding
Tenant's indemnity of Landlord with respect to Hazardous
Materials), shall survive the termination or earlier
expiration of this Lease.
9.2.3 DEFINITIONS. As used in this Lease, the term "Hazardous
Materials" includes, without limitation, any material or
substance which is (i) defined as a "hazardous waste,"
"extremely hazardous waste" or "restricted hazardous
waste" under Sections 25115, 25117 or 25122.7, or listed
pursuant to Section 25140, of the California Health and
Safety Code, Division 20. Chapter 6.5 (Hazardous Waste
Control Law), (ii) defined as a "hazardous substance"
under Section 25316 of the California Health and Safety
Code, Division 20, Chapter 6.8 (Xxxxxxxxx-Xxxxxxx-Xxxxxx
Hazardous Substance Account Act), (iii) defined as a
"hazardous material," "hazardous substance," or "hazardous
waste" under Section 25501 of the California Health and
Safety Code, Divi-
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sion 20, Chapter 6.95 (Hazardous Materials Release
Response Plans and Inventory), (iv) defined as a
"hazardous substance" under Section 25281 of the
California Health and Safety Code, Division 20, Chapter
6.7 (Underground Storage of Hazardous Substances), (v)
petroleum and any petroleum by-products, (vi) asbestos,
(vii) urea formaldehyde foam insulation, (viii) listed
under Article 9 or defined as hazardous or extremely
hazardous pursuant to Article 11 of Title 22 of the
California Administrative Code, Division 4, Chapter 20,
(ix) designated as a "hazardous substance" pursuant to
Section 311 of the Federal Water Pollution Control Act (33
U.S.C. Section 1317), (x) defined as a "hazardous waste"
pursuant to Section 1004 of the Federal Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901 et
seq. (42 U.S.C. Section 6903), (xi) defined as a
"hazardous substance" pursuant to Section 101 of the
Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Section 9601 et seq. (42 U.S.C.
Section 9601), or (ix) determined to be, or defined as,
under any federal, state or local governmental authority
as hazardous, toxic, or dangerous to persons, animals or
the environment.
As used in this Lease, the term "Permitted Materials"
shall mean and refer to those Hazardous Substances which
are (a) customarily used by Tenant in the conduct of
Tenant's Operations, (b) designated by Tenant to Landlord
in writing prior to use, and (c) approved, in advance of
its use, by Landlord. As to any Hazardous Materials which
are "Permitted Materials," Tenant shall comply with any
reasonable requirements imposed by Landlord to confirm
that Tenant's use of such materials are, or will be, in
compliance with all applicable rules, laws and
regulations, and will not otherwise not pose a threat of
contamination or unlawful release in or about the
Premises.
9.3 SIGNAGE. Tenant shall be entitled to place its name and logo
("TENANT'S SIGNS") on the monument sign for the Project and on
the exterior of the Building, subject to the following:
a. The design of Tenant's Sign shall be subject to Landlord's
prior reasonable approval and shall comply with any sign
restrictions set forth in the Declaration;
b. Tenant's Signs shall comply with all appropriate sign
ordinances of the City of Fremont;
c. The size, color, materials, and location of Tenant's Sign
shall be subject to the Project and Building sign
allocation limitations adopted by Landlord and/or the
Association (as defined in the Declaration); and,
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d. All costs and expenses in connection with Tenant's Sign shall
be borne by Tenant.
9.4 REASONABLENESS OF RESTRICTIONS. Landlord and Tenant hereby
acknowledge and agree that the use restrictions set forth in this
Section 9 shall be deemed reasonable in all respects and under
all circumstances.
10. ALTERATIONS; CONDITION ON TERMINATION. Tenant shall not install any
signs, fixtures or improvements ("ALTERATIONS") to the Premises, the
cost of which is Ten Thousand Dollars ($10,000) or more, without the
prior written consent of Landlord. At such time as Landlord is granting
its consent to any proposed Alterations, Landlord shall indicate whether
such Alterations will be required to be removed upon a termination of
this Lease. Tenant shall obtain all governmental permits, licenses and
other consents, and shall comply with all governmental rules, laws,
regulations and requirements, which are applicable to any Alterations
and/or additions constructed on the Premises by Tenant, all at Tenant's
sole cost and expense. Any Alteration shall be carried-out by licensed
and experienced contractors reasonably approved in advance of any work
by Landlord. Tenant shall keep the Premises, the Building and the Land
free from any liens arising out of any work performed, materials
furnished or obligations incurred by or on behalf of Tenant. During the
Lease Term, all Alterations placed or constructed on the Premises by
Tenant shall be deemed the property of Landlord. During the Lease Term,
Tenant may remove any such Alterations (but not the original Tenant
Improvements) without the prior consent of Landlord, provided that
Tenant shall pay all costs and expenses relating to damage caused by
such removal. Upon the termination of this Lease, Tenant shall cause all
its equipment and trade fixtures to be removed from the Premises and
shall repair any damage to the Premises resulting therefrom at its sole
cost and expense. With respect to any Alterations (including any
Alterations not requiring the prior written consent of Landlord) not
removed by Tenant prior to the termination of this Lease and provided
that Landlord has not indicated otherwise, Landlord expressly reserves
the right to require Tenant to remove any or all of such Alterations
upon the termination of this Lease, and Tenant shall promptly remove any
Alterations that Landlord so requires to be removed and repair any
damage to the Premises resulting from such removal, all at Tenant's sole
cost and expense. All Alterations not required, pursuant to this Section
10, to be removed shall become the property of Landlord upon the
termination of this Lease.
Upon termination of this Lease, Tenant shall (a) repair any damage
caused by the installation or removal of any Alterations placed or
constructed on the Premises by Tenant, (b) assure that the Premises, the
Building and/or the Land are free and clear of all Hazardous Materials
used or stored by Tenant, or Tenant's agents, employees, contractors,
subcontractors, licensees, customers or invitees, during the Lease Term,
and (c) assure that the Premises are in good condition and in good
working order (except as to any casualty damage and where, pursuant
thereto, this Lease has been terminated pursuant to Section 27 below),
reasonable and normal wear and tear excepted.
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11. REPAIRS AND MAINTENANCE.
11.1 TENANT'S OBLIGATIONS. Tenant shall, at Tenant's sole cost and
expense, do the following:
a. maintain the interior portions of the Premises in good,
clean and safe condition and repair;
b. maintain all phone, network, and other communications
cabling on, about or within the Premises;
c. maintain those exterior portions of the Premises which are
not otherwise the responsibility of Landlord as set forth
in Section 11.2 below in good, clean and safe condition
and repair;
d. repair any damage to the Premises, the Building or Common
Areas caused by any act or omission of Tenant or its
employees, agents, invitees, licensees or contractors; and
e. conduct all maintenance, clean-ups and repair required in
connection with Tenant's or Tenant's agents, employees,
contractors, subcontractors, licensees, customers or
invitees use and/or storage of Hazardous Materials on or
about the Premises, the Building and/or the Land.
Tenant shall have no right to install any device on the roof of
the Premises or the Building without the express prior written
consent of Landlord. Tenant shall not make any penetrations of
the roof of the Premises or the Building without the express
prior written consent of Landlord.
11.2 LANDLORD'S OBLIGATIONS. Landlord shall do the following:
a. repair and maintain the structural portions of the
Building and the Premises (including, without limit, the
roof structure);
b. repair and maintain all heating and HVAC systems servicing
the Premises and the Building.
All costs advanced by Landlord in connection with the performance of
Landlord's obligations in this Section 11.2 shall be subject to
repayment by Tenant to Landlord as part of Tenant's Percentage Share of
Operating Expenses, except those costs advanced by Landlord in
connection with the work described in 11.2(a) to the extent such work is
not required by reason of any act or omission on the part of Tenant, its
employees, agents, contractor, customers, suppliers, and/or invitees.
Tenant acknowledges that the
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repair and maintenance of the Common Area will be carried out by the
Association and that Landlord shall have no obligation or responsibility
under this Lease to carry out any such repairs or maintenance.
12. INSURANCE.
12.1 TENANT'S INSURANCE. Tenant shall at all times during the Lease
Term, and at its sole cost and expense, maintain general
commercial liability insurance (together with a broad form
comprehensive general liability endorsement) against liability
for bodily injury and property damage. The aforesaid liability
insurance shall also contain an endorsement naming Landlord, and
Landlord's members., as "additional insureds," which endorsement
shall cover the aforesaid additional insureds for all acts and
omissions of said parties in or about the Premises. The aforesaid
insurance shall be in an amount of not less than Two Million
Dollars ($2,000,000) per occurrence and not less than Five
Million Dollars ($5,000,000) in the aggregate. In no event shall
the limits of said policy be considered as limiting the liability
of Tenant under this Lease.
Tenant shall also at all times maintain standard "all risk"
casualty insurance upon all of Tenant's equipment, furnishings
and fixtures.
The aforesaid insurance shall be with companies licensed to do
business with the Insurance Commissioner of the State of
California. A certificate of such insurance shall be delivered to
Landlord prior to the Occupancy Date and, thereafter, on each
anniversary date of the Commencement Date. The certificate for
Tenant's liability insurance shall certify that the policy names
Landlord and the other aforesaid persons and entities as
"additional insureds" and that the policy shall not be canceled
or altered without thirty (30) days prior written notice to
Landlord.
12.2 LANDLORD'S INSURANCE. During the Lease Term, Landlord shall
maintain standard "all risk" casualty insurance on the Building
and the Premises (including the original Tenant Improvements),
which coverage shall be in an amount not less than the full
replacement cost of the Building, exclusive of architectural and
engineering fees, excavations, footings, and foundations, and the
General Tenant Improvements, and the original Tenant
Improvements.
12.3 WAIVER OF SUBROGATION. Notwithstanding any other provision of
this Lease, Landlord and Tenant each hereby waive any right of
recovery against the other and the authorized representatives of
the other for any loss or damage that is of the type required to
be covered by any policy of insurance required under Section 12.1
or 12.2 above. Each party shall cause each insurance policy
obtained by it to provide that the insurance company waives all
right of recovery by way of subrogation against either party in
connection with any damage covered by any policy. If any
insurance policy cannot be obtained with a waiver of subro-
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gation, or is obtainable only by the payment of an additional
premium charge above that charged by insurance companies issuing
policies without waivers of subrogation, the party undertaking to
obtain the insurance shall notify the other party of this fact.
The other party shall have a period of thirty (30) days after
receiving such notice either to replace the insurance with a
company that is reasonably satisfactory to the other party and
that will carry the insurance with a waiver of subrogation, or to
agree to pay the additional premium if such policy is obtainable
at additional cost. If the insurance cannot be obtained or the
party in whose favor a waiver of subrogation is desired refuses
to pay the additional premium charge, the other party is relieved
of the obligation to obtain a waiver of subrogation rights with
respect to the particular insurance involved.
13. LIMITATION OF LIABILITY AND INDEMNITY. Tenant agrees to save, defend and
hold Landlord harmless and indemnify Landlord, and Landlord's partners,
employees, agents, and contractors, against all liabilities, charges and
expenses (including reasonable attorneys' fees, costs of court and
expenses necessary in the prosecution or defense of any litigation) by
reason of injury to person or property, from whatever cause, while in or
on the Premises, or in any way connected with the Premises, with the
improvements or with the personal property therein, including any
liability for injury to person or property of Tenant, its agents or
employees or third party persons; provided, however, Landlord shall be
liable only for property damage and bodily injury resulting from the
negligent acts or omissions of Landlord, or any of its partners,
employees, agents or contractors.
Tenant's obligations under this Section 13 shall include the obligation
to indemnify, hold harmless, and defend Landlord, and its partners,
agents and employees, from and against any and all claims, losses,
liabilities, costs and expenses arising out of or in connection with (a)
any injury or damage resulting from Tenant's use of the Premises in
connection with Tenant's Operations, and (b) any Release of any
Hazardous Materials in or about the Premises, the Building and/or the
Land, to the extent the Release is caused or permitted by Tenant, or any
of its agents, employees, contractors, subcontractors and/or invitees.
Tenant's indemnity obligations under this Section 13 shall survive
termination of this Lease.
Landlord, and Landlord's partners, employees, agents, and contractors,
shall not be liable to Tenant for any damage to Tenant or Tenant's
property, nor for any injury to or loss of Tenant's business nor for any
damage or injury to any person from any cause; provided, however,
Landlord shall be liable for, and shall indemnify, defend and hold
Tenant harmless from and against any claims arising in connection with,
property damage and bodily injury resulting from the willful misconduct
or negligent acts or omissions of Landlord, or any of its partners,
employees, agents, or contractors, but only to the extent any such
property damage and bodily injury is not covered by either the insurance
required to be maintained by Tenant under this Lease or by any other
insurance actually maintained by Tenant.
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14. ASSIGNMENT AND SUBLETTING.
14.1 IN GENERAL. Tenant shall not, either voluntarily or by operation
of law, assign, transfer, mortgage, pledge, hypothecate or
encumber this Lease or any interest therein, and shall not sublet
the Premises or any part thereof, or any right or privilege
appurtenant thereto, without the prior written consent of
Landlord, which consent shall not be unreasonably withheld.
Landlord shall be reasonable in withholding its consent to any
proposed assignment if the net worth of the proposed assignee is
not equal to or greater than the net worth of Tenant as of the
date of execution of this Lease or the date of the proposed
assignment, whichever is higher. Tenant shall give Landlord at
least fifteen (15) days written notice of its desire to assign or
sublet all or some of the Premises. Any such assignment, sublease
or the like which is approved by Landlord must be pursuant to a
written agreement in a form acceptable to Landlord. Each
permitted assignee, transferee, or Sublessee shall assume and be
deemed to have assumed this Lease (or the appropriate part
hereof) and shall be and remain jointly and severally liable with
Tenant for the payment of Rents and for the due performance of
and compliance with all the terms, covenants, conditions and
agreements to be performed or complied with by Tenant herein
(including, but not limited to, the provisions of this Section
14). Notwithstanding the foregoing, if Landlord consents to a
full assignment of this Lease by the original Tenant hereunder
during the initial ten (10) year term hereof, then the original
Tenant hereunder shall be released from any obligations under
this Lease if the transferee elects to exercise the Option
pursuant to Section 3.2 above; provided, however, if, in
evaluating the proposed assignment, Landlord determines that the
proposed transferee's projected financial condition during the
Extended Term is not satisfactory, then Tenant shall elect to
either (a) assign to the proposed transferee only Tenant's rights
through the remaining initial ten (10) year Lease Term (in which
event the transferee shall have no right to exercise the Option),
or (b) remain liable for any and all obligations arising under
this Lease during the Extended Term to the extent the transferee
exercises the Option. Upon any release of the original Tenant, as
provided above, such original Tenant shall have no right to
retain any portion of Excess Rents (as provided in Section 14.4
below) or any other rents or other charges which are paid or
payable by any assignee or other party during the Extended Term.
14.2 TRANSFERS OF INTERESTS IN TENANT. Any merger or reorganization of
the entity which comprises Tenant, any sale, or transfer of
substantially all of the assets of Tenant, or any sale or other
transfer of a majority of the interests in Tenant shall not be
deemed an assignment of this Lease requiring the prior written
consent of Landlord pursuant to Section 14.1 above.
14.3 RIGHT TO TERMINATE. If Tenant notifies Landlord of its desire to
assign this Lease or any interest herein, to sublet all or any
part of the Premises for more
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than seventy-five percent (75%) of the remainder of the Lease
Term, or to sublet more than seventy-five percent (75%) of the
Premises for any period, Landlord may elect to treat Tenant's
notice as an offer to terminate this Lease or Tenant's interest
in the portion of the Premises specified and, thereupon, Landlord
shall have the right to terminate the Lease (a) entirely, in the
event of a proposed assignment or a sublease of the entire
Premises for the remainder of the Lease Term, (b) as to the
portion of the Premises which is the subject of a proposed
sublease for more than seventy-five percent (75%) of the
remainder of the Lease Term, or (c) as to the portion of the
Premises which is the subject of a proposed sublease of more than
seventy-five percent (75%) of the Premises for any period, as
specified in Tenant's notice. For purposes of this Section 14.3,
(i) the term of a proposed sublease shall include all options to
extend or renew, and (ii) a proposed sublease shall be deemed to
be for the remainder of the Lease Term if the term of the
proposed sublease will expire within one (1) year of the end of
the Lease Term. If Tenant's notice specifies all of the Premises
and Landlord elects to terminate, this Lease shall terminate on
the date stated in the notice given by Tenant pursuant to Section
14.1 above, subject to any obligations which have accrued and are
unfulfilled as of such date. If Tenant's notice specifies less
than all of the Premises and Landlord elects to terminate, this
Lease shall terminate on the date stated with respect to that
portion of the Premises, and Base Rent and Tenant's Percentage
Share shall be adjusted, based upon the area retained by Tenant
after the termination, compared to the total area of the entire
Premises excluding any areas of the Premises designated in the
proposed sublease for ingress and egress and common areas. The
Lease as so amended shall continue thereafter in full force and
effect. Landlord and Tenant shall execute an amendment to this
Lease specifying the new Premises, the adjusted Base Rent and
Tenant's adjusted Percentage Share; provided, however, that
failure by either party to execute such an amendment shall not
affect the validity of this Lease.
14.4 EXCESS RENTS. Except as provided in the last sentence of Section
14.1 above, any Excess Rents (defined below) payable pursuant to
any assignment or subletting shall be paid to Landlord and Tenant
on a fifty-fifty (50-50) basis. Landlord shall have the right to
impose terms and conditions on its consent to any assignment or
subletting to assure the accounting and payment of Landlord's
share of Excess Rents. "Excess Rents" shall mean any and all
rents, payments, charges and other considerations to be received
by Tenant upon an assignment or subletting of all or any portion
of the Premises which are in excess of the Rents payable by
Tenant to Landlord under this Lease after the recovery by Tenant
of reasonable and customary amounts for brokerage commissions,
legal expenses, and tenant improvement costs, to the extent such
items have been actually incurred by Tenant in connection with
the subject assignment or sublease.
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15. AD VALOREM TAXES. Tenant shall pay before delinquent all taxes assessed
against the personal property of Tenant and all taxes attributable to
any leasehold improvements installed by Tenant.
16. LENDER REQUIREMENTS.
16.1 SUBORDINATION. This Lease is subordinate to any and all mortgages
and/or deeds of trust ("Encumbrances") now of record against the
Land and/or the Building. Tenant shall, upon the request of
Landlord, execute any instrument reasonably necessary or
desirable to (a) acknowledge the subordination of this Lease to
any existing mortgages or deeds of trust, or (b) subordinate this
Lease and all of Tenant's rights hereunder to any and all
Encumbrances hereafter recorded against the Land and/or the
Building; provided, however, Tenant may require as a condition to
any subordination in (b) above that the holder of any future
Encumbrance agree to not disturb Tenant's possession of the
Premises in the event such holder acquires the Premises pursuant
to foreclosure or otherwise.
16.2 ATTORNMENT. In the event any proceedings are brought for
foreclosure or in the event of the exercise of the power of sale
under any mortgage or deed of trust made by Landlord covering the
Premises, Tenant shall, at the option of such purchaser, attorn
to the purchaser upon any such foreclosure or sale and shall
recognize such purchaser as the Landlord under this Lease,
provided such purchaser agrees in writing to assume all
obligations of Landlord under this Lease accruing following such
sale or purchase and provides a copy of such agreement to Tenant.
16.3 APPROVAL BY LENDER. Tenant acknowledges that any future holder of
an Encumbrance may retain the right to approve the terms and
provisions of this Lease. Tenant agrees that, in the event such
holder shall require any modification of this Lease in order to
protect its security interest in the Premises; provided, however,
no modification of this Lease shall materially increase Tenant's
obligations under this Lease or impose requirements upon Tenant
which are more burdensome.
17. RIGHT OF ENTRY. Tenant grants Landlord or its agents the right to enter
the Premises at all reasonable times during normal business hours for
purposes of inspection, exhibition, repair or alteration; provided,
however, Landlord shall give Tenant at least one (1) business day prior
notice (except in the event of emergency) of Landlord's intent to enter
the Premises. Landlord shall have the right to use any and all means
Landlord deems necessary to enter the Premises in an emergency. Landlord
shall also have the right (a) to place "for rent" signs of a reasonable
size on the outside of the Premises at a reasonable location during the
last six (6) months of the Lease Term and (b) to place "for sale" signs
of a reasonable size on the outside of the Premises at a reasonable
location at any time. Tenant hereby waives any claim for damages or for
any injury or
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inconvenience to or interference with Tenant's business, or any other
loss occasioned thereby; provided, however, Landlord shall be liable for
property damage and bodily injury resulting from the negligent acts or
omissions of Landlord or Landlord's authorized representatives (except
where Landlord is released from liability for negligence in Section 12.3
above).
18. ESTOPPEL CERTIFICATE. Tenant shall execute and deliver to Landlord, upon
not less than five (5)) days prior written notice, a statement in
writing certifying (a) that this Lease is unmodified and is in full
force and effect (or, if modified, stating the nature of such
modification), (b) the date to which Rent and other charges are paid in
advance, if any, (c) that there are not, to such party's knowledge, any
uncured defaults on the part of the other party or specifying such
defaults as they are claimed, and (d) such other information (including,
without limitation, current financial information of Tenant) as a
prospective purchaser, lender or encumbrancer of the Premises may
reasonably require. Any such statement may be conclusively relied upon
by any prospective purchaser, encumbrancer, assignee or subletter of the
Premises, as applicable. A failure by Tenant to provide the statement
and information required within the time and manner provided herein
shall be a material default on the part of Tenant. Landlord shall
execute and deliver to Tenant, upon not less than five (5)) days prior
written notice, a statement in writing certifying (a) that this Lease is
unmodified and is in full force and effect (or, if modified, stating the
nature of such modification), (b) the date to which Rent and other
charges are paid in advance, if any, and (c) that there are not, to such
party's knowledge, any uncured defaults on the part of the other party
or specifying such defaults as they are claimed.
19. TENANT'S DEFAULT. The occurrence of any one or more of the following
events shall constitute a default and breach of this Lease by Tenant:
a. The failure by Tenant to make any payment of Rent or any other
payment required hereunder within five (5) days from the date the
same is due and payable;
b. Tenant abandons the Premises for a continuous period of at least
thirty (30) days;
c. The failure of Tenant to observe, perform or comply with any of
the conditions or provisions of this Lease for a period, unless a
longer period is otherwise provided herein, of thirty (30) days
after written notice, or if such default cannot be cured within
that time, then such additional time as may be reasonably
necessary if within such thirty (30) days Tenant has commenced
and is diligently pursuing such activities as are necessary to
cure the default; and
d. Tenant becomes the subject of any bankruptcy, reorganization or
insolvency proceeding, whether voluntary or involuntary, and, in
the case of an involuntary bankruptcy proceeding, Tenant fails to
cause the same to be dismissed within sixty (60) days following
that date of the filing of such bankruptcy.
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Any notice from Landlord to Tenant described in this Section 19 shall,
in the sole discretion of Landlord, constitute a three (3) day notice
pursuant to California Code of Civil Procedure section 1161 or any
successor statute. With respect to any "default" by Tenant referenced in
this Lease, the term "default" as used in such context shall mean any of
the events described in subsections (a), (b) and/or (c) of this Section
19.
20. REMEDIES FOR TENANT'S DEFAULT. Upon any default by Tenant, Landlord
shall have the following remedies, in addition to all other rights and
remedies provided by law, to which Landlord may resort cumulatively, or
in the alternative:
20.1 TERMINATION. Upon any default by Tenant, Landlord shall have the
right (but not the obligation) to terminate this Lease and
Tenant's right to possession of the Premises. If Landlord has
given Tenant any written notice pursuant to Section 19 above,
then Landlord shall not be required to give Tenant any additional
notice terminating this Lease. Upon termination of this Lease,
Landlord shall have the right to recover from Tenant:
a. The worth at the time of award of the unpaid Rents which
had been earned at the time of termination;
b. The worth at the time of award of the amount by which the
Rents 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;
c. The worth at the time of award (computed by discounting at
the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent) of the
amount by which the Rents for the balance of the Lease
Term after the time of award exceed the amount of such
rental loss that Tenant proves could be reasonably
avoided; and
d. Any other amounts necessary to compensate Landlord for all
detriment proximately caused by the default by Tenant or
which in the ordinary course of events would likely
result, including without limitation the following:
(i) Expenses in retaking possession of the Premises;
(ii) Expenses for cleaning, repairing or restoring the
Premises;
(iii) Expenses for removing, transporting, and storing
any of Tenant's property left at the Premises
(although Landlord
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shall have no obligation to remove, transport, or
store any such property);
(iv) Any penalties, additional assessments, or others
costs levied against the Building pursuant the
Declaration to the extent such items arise as a
result of a breach or default by Tenant; and,
(v) Attorneys' fees and court costs.
The "worth at the time of award" of the amounts referred to in
subparagraphs (a) and (b) of this Section 20.1 is computed by
allowing interest at an annual rate equal to the greater of: ten
percent (10%); or five percent (5%) plus the rate established by
the Federal Reserve Bank of San Francisco, as of the twenty-fifth
(25th) day of the month immediately preceding the default by
Tenant, on advances to member banks under Sections 13 and 13(a)
of the Federal Reserve Act, as now in effect or hereafter from
time to time amended, not to exceed the maximum rate allowable by
law.
20.2 CONTINUANCE OF LEASE. Upon a default by Tenant and unless and
until Landlord elects to terminate this Lease pursuant to Section
20.1 above, this Lease shall continue in effect after the default
by Tenant, and Landlord may enforce all rights and remedies under
this Lease, including, without limitation, the right to recover
payment of Rents as they become due. Neither efforts by Landlord
to mitigate damages caused by a default by Tenant nor the
acceptance of any Rents shall constitute a waiver by Landlord of
any of Landlord's rights or remedies, including the rights and
remedies specified in this Section 20. It is intended that the
remedy set forth in this Section 20.2 is to provide Landlord the
rights set forth in California Civil Code Section 1951.4. The use
restrictions set forth in Section 9 above shall apply to
Landlord's rights under this Section 20.2 except to the extent
Tenant proves under all circumstances that the enforcement of
such restrictions would be unreasonable.
20.3 RELETTING PREMISES. Upon a default by Tenant, Landlord may, at
Landlord's election, re-enter the Premises and, without
terminating this Lease, and at any time and from time to time,
relet the Premises or any part or parts thereof for the account
and in the name of Tenant or otherwise. Landlord may, at
Landlord's election, eject Tenant or any of Tenant's subtenants,
assignees or other person claiming any right in or through this
Lease. Tenant shall nevertheless pay to Landlord on the due dates
specified in this Lease all sums required to be paid by Tenant
under this Lease, plus Landlord's expenses, less the proceeds of
any sublease or reletting. Notwithstanding any prior reletting
without termination, Landlord may later elect to terminate this
Lease because of a default by Tenant.
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20.4 RIGHT TO CURE TENANT'S DEFAULT. In the event Tenant fails to cure
a default described under Section 19(b) within a period of thirty
(30) days after written notice (unless a longer period of time is
otherwise provided herein), Landlord may, in addition to all
other rights and remedies under this Lease, to which Landlord may
resort cumulatively or in the alternative, cure such default and
demand reimbursement by Tenant of the cost actually incurred by
Landlord in curing such default by Tenant, with interest thereon
from the date such cost is incurred by Landlord until payment.
All amounts due and payable to Landlord under this Section 20.4
shall constitute Rent under this Lease. The cure by Landlord of
any default shall in no way be deemed a waiver or release of
Tenant from any obligation under this Lease.
21. BANKRUPTCY: HOLDOVER.
21.1 BANKRUPTCY.
A. In the event Tenant shall become a Debtor under Chapter 7
of the Bankruptcy Code ("Code") or a petition for
reorganization or adjustment of debts is filed concerning
Tenant under Chapters 11 or 13 of the Code, or a
proceeding is filed under Chapter 7 and is transferred to
Chapters 11 or 13, the Trustee or Tenant, as
Debtor-In-Possession, may not elect to assume this Lease
unless, at the time of such assumption, the Trustee or
Debtor-In-Possession has:
(i) Cured or provided Landlord "Adequate Assurance" (as
defined below) that:
(a) The Trustee or the Debtor-In-Possession has
cured, or has provided Landlord Adequate
Assurance that:
(1) Within ten (10) days from the date
of such assumption the Trustee or
Debtor-In-Possession will cure all
monetary defaults under this Lease;
and
(2) Within thirty (30) days from the
date of such assumption the Trustee
will cure all nonmonetary defaults
under this Lease.
(ii) For purposes of this Section 21.1, Landlord and
Tenant acknowledge that, in the context of a
bankruptcy proceeding of Tenant, at a minimum
"Adequate Assurance" shall mean:
(a) The Trustee or the Debtor-In-Possession has
and will continue to have sufficient
resources to fulfill the obligations of
Tenant under this Lease as the same become
due;
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and
(b) The Bankruptcy Court shall have entered an
Order segregating sufficient cash payable to
Landlord and/or the Trustee or
Debtor-In-Possession shall have granted a
valid and perfected first lien and security
interest and/or mortgage in property of
Tenant, Trustee or Debtor-In-Possession,
acceptable as to value and kind to Landlord,
to secure to Landlord the obligation of the
Trustee or Debtor-In-Possession to cure the
monetary and/or non-monetary defaults under
this Lease within the time periods set forth
above.
B. If the Trustee or Debtor-In-Possession has assumed the
Lease pursuant to the provisions of this Section 21.1 for
the purpose of assigning Tenant's interest hereunder to
any other person or entity, such interest may be assigned
only after the Trustee, Debtor-In-Possession or the
proposed assignee have complied with all of the terms,
covenants and conditions of Section 14.1 herein, Landlord
and Tenant acknowledging that such terms, covenants and
conditions are commercially reasonable in the consent of a
bankruptcy proceeding of Tenant. The terms of Section 14.1
applicable to any such assignment shall include, without
limitation, those with respect to Additional Rent and the
use of the Premises only as permitted in this Lease.
C. Unless otherwise allowed by the Court and until such time
as the Lease is assumed or rejected, the Trustee or
Debtor-In-Possession shall timely perform all the monetary
and non-monetary obligations under this Lease which arise
after the bankruptcy filing, including, without
limitation, the payment of Fixed Rent and such other
Additional Rent charges payable hereunder.
D. The rights, remedies and liabilities of Landlord and
Tenant set forth in this Section 21.1 shall be in addition
to those which may now or hereafter be accorded, or
imposed upon, Landlord and Tenant by the Code.
21.2 HOLDOVER. Upon termination of the Lease or expiration of the term
hereof, if Tenant retains possession of the Premises without
Landlord's written consent first had and obtained, then Tenant's
possession shall be deemed a tenancy at sufferance, and Landlord
may bring an action for possession or detainer at any time
thereafter. If Tenant holds possession of the Premises after the
term of this Lease with Landlord's consent, Tenant shall become a
tenant from month to month upon the terms and conditions as
provided in this Lease except that Base Rent shall equal one
hundred fifty percent (150%) of the Base Rent due during the last
year of the Lease Term, payable in advance on or before the first
day of
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each month. All options, if any, granted under the terms of this
Lease shall be deemed terminated and be of no effect during said
month to month tenancy. Tenant shall continue in possession until
such tenancy shall be terminated by either Landlord or Tenant
giving written notice of termination to the other party at least
thirty (30) days prior to the effective date of termination.
22. LANDLORD'S DEFAULT. Upon any default by Landlord under this Lease,
Tenant shall provide Landlord with written notice of such default and a
reasonable time period in which to cure such default.
23. PARKING. Tenant shall have the right during the Lease Term to use, on an
non-exclusive basis, one hundred and seventy-three (173) spaces within
the parking facilities situated within the Common Areas. If Tenant has
leased or purchased Building C (as provided in Section 3.4 above) prior
to December 31, 1999, then Tenant shall have the right to park on the
undeveloped land owned by Landlord which is adjacent to the Building C
as designated in EXHIBIT "D" attached hereto provided that Tenant pays
for one-half (1/2) of all costs associated with creating a surface
parking area on the undeveloped land described in EXHIBIT "D",
including, without limitation, all costs of City of Fremont permits and
meeting permit conditions, paving, landscaping, bridge construction, and
acquisition of needed right-of-ways and access.
24. SALE OF PREMISES. In the event of any sale of the Premises by Landlord,
Landlord shall be, without any further act or acknowledgment on the part
of Landlord or Tenant, entirely released from all liability under any
and all of its covenants and obligations contained in or derived from
this Lease or arising out of any act, occurrence or omission occurring
after the consummation of such sale. The purchaser at such sale or any
subsequent sale of the Premises shall be deemed, without any further
agreement between the parties or their successors in interest or between
the parties and any such purchaser, to have assumed and agreed to carry
out any and all of the covenants and obligations of Landlord under this
Lease.
25. WAIVER. No delay or omission in the exercise of any right or remedy of
either party on any default by the other party shall impair such a right
or remedy or be construed as a waiver. The subsequent acceptance of
Rents by Landlord or payments by Tenant after breach by the payee of any
covenant or term of this Lease shall not be deemed a waiver of such
breach, other than a waiver of timely payment for the particular payment
involved, and shall not prevent the aggrieved party from maintaining any
action based on such breach (including an unlawful detainer action, if
applicable). No payment by a party or receipt by the other party of a
lesser amount than the Rent and other sums due hereunder shall be deemed
to be other than on account of the earliest Rent or other sums due, nor
shall any endorsement or statement on any check or accompanying any
check or payment be deemed an accord and satisfaction. A party may
accept such check or payment without prejudice to its right to recover
the balance of such Rent or other sum or pursue any other remedy
provided in this Lease. The waiver by a party of
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any breach of any term of this Lease shall not be deemed a waiver of
such term or of any subsequent breach thereof.
26. CASUALTY DAMAGE. If the Premises or any part thereof shall be damaged by
fire or other casualty, Tenant shall give prompt written notice thereof
to Landlord. In case the Building or the Premises shall be damaged by
fire or other casualty (a) such that more than thirty percent (30%)
reconstruction of the Building or the Premises is required, as
determined by Landlord, or (b) regardless of the extent of damage, such
damage is either uninsured or the insurance proceeds are unavailable or
insufficient for Landlord to restore the Building or the Premises,
Landlord may elect to either terminate this Lease or restore the
Building or the Premises. In all other cases, Landlord shall promptly
commence reconstruction repair subject to this Section 26. If Landlord
elects to terminate the Lease, the estate created hereby shall terminate
forty-five (45) days following the date of damage, and Base Rent due
hereunder shall be abated as of the date of such damage. If Landlord
elects to repair and restore the Building or the Premises, then Landlord
shall proceed with reasonable diligence to restore the Building or the
Premises (except Landlord shall not be responsible for delays outside of
its control) to substantially the same condition existing immediately
prior to the casualty. If Landlord is required to make any repairs or
restorations pursuant to this Section 26, Landlord shall not be required
to spend for such repairs or restoration an amount in excess of the
insurance proceeds actually received by Landlord as a result of the
casualty. If Landlord elects to repair or restore the Building or the
Premises, then Tenant, within thirty (30) days after the date the damage
occurred, may request in writing from Landlord an estimate of the time
required to repair or restore the Building or the Premises. Landlord
shall notify Tenant of Landlord's reasonable estimate of the time for
restoration or repair.. If a casualty damages more than forty percent
(40%) of the manufacturing area within the Premises and, as a result
thereof, Tenant is not able to conduct its manufacturing operations in
any portion of the Premises, then Tenant shall have the right to
terminate this Lease if Landlord estimates that the Premises cannot be
restored within one hundred and twenty (120) days from the date the
damage occurred. Tenant shall exercise (if at all) the aforesaid right
to terminate within five (5) business days from receipt of Landlord's
estimate, which termination shall be effective as of the date the damage
occurred. Landlord shall not be liable for any inconvenience or
annoyance to Tenant, injury to the business of Tenant, loss of use of
any part of the Premises by Tenant or loss of Tenant's personal property
resulting in any way from such damage or the restoration thereof, except
that, during any restoration, Landlord shall allow Tenant a fair
diminution of Base Rent during the time and to the extent the Premises
are unfit for occupancy.
It is the intent of the parties hereto that the original Tenant
Improvements will be covered by the casualty insurance carried by
Landlord on the Building and that, in the event of a casualty where
Landlord elects or its otherwise required to restore or repair, Landlord
will restore or repair such improvements to the extent of insurance
proceeds which are actually available to Landlord for such purpose;
provided, however, in no event shall Landlord be required to rebuild,
repair or replace any part of any Xxxxxx-
00
00
tions or other improvements constructed by, or of behalf of, Tenant or
any of Tenant's furniture, furnishings or fixtures and equipment except
to the extent that Landlord actually receives insurance proceeds with
respect to the damage of such property (Tenant acknowledges that
Landlord is under no obligation to maintain insurance covering such
property and that neither Landlord nor any of its representatives have
made any representations or warranties to Tenant that Landlord intends
to maintain any insurance covering such property). Tenant hereby waives
the provisions of Sections 1932(2.), 1933(4.), 1941 and 1942 of the
California Civil Code.
Landlord or Tenant shall have the right to terminate this Lease if (a)
the damage to the Premises occurs during the last year of the term of
this Lease, and (b) it is estimated by Landlord that the necessary
repairs will take more than ninety (90) days from the date of the
damage.
27. CONDEMNATION. If thirty percent (30%) or more of the Land or fifteen
percent (15%) or more of the Premises is taken for any public or
quasi-public purpose of any lawful governmental power or authority, by
exercise of the right of appropriation, reverse condemnation,
condemnation or eminent domain, or sold to prevent such taking, Tenant
or Landlord may, at its sole option, terminate this Lease as of the
effective date of such taking. Tenant shall not assert any claim against
Landlord or the taking authority for any compensation because of such
taking, and Landlord shall be entitled to receive the entire amount of
any award without deduction for any estate of interest of Tenant;
provided, Tenant shall be entitled to any portion of an award separately
designated as compensation to Tenant for moving expenses and/or loss of
goodwill. If less than thirty percent (30%) of the Land and/or less than
fifteen percent (15%) of the Premises is taken, Landlord shall, if
necessary, promptly proceed to restore the Premises and the Common Areas
to substantially its same condition prior to such partial taking,
allowing for the reasonable effects of such taking, and a proportionate
allowance shall be made to Tenant for the Rent corresponding to the time
during which, and to the part of the Premises of which, Tenant is
deprived on account of such taking and restoration. Notwithstanding the
foregoing, Landlord shall not be required to expend funds in connection
with the restoration of the Premises in excess of compensation actually
received by Landlord from the condemning authority.
28. GENERAL PROVISIONS.
28.1 TIME. Time is of the essence in this Lease and with respect to
each and all of its provisions in which performance is a factor.
28.2 SUCCESSORS AND ASSIGNS. The covenants and conditions herein
contained, subject to the provisions as to assignment, apply to
and bind the heirs, successors, executors and assigns of the
parties hereto.
28.3 RECORDATION. Tenant shall not record this Lease or a short form
memorandum hereof without the prior written consent of Landlord.
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28.4 LANDLORD'S PERSONAL LIABILITY. The liability of Landlord to
Tenant for any default by Landlord under the terms of this Lease
shall be limited to the interest of Landlord in the Building, and
Tenant agrees to look solely to Landlord's interest in the
Building for the recovery of any judgment, it being intended that
Landlord (nor any of its partners) shall not be personally liable
for any judgment or deficiency.
28.5 SEPARABILITY. Any provisions of this Lease which shall prove to
be invalid, void or illegal shall in no way affect, impair or
invalidate any other provision hereof and such other provision
shall remain in full force and effect.
28.6 CHOICE OF LAW. This Lease shall be governed by the laws of the
State of California.
28.7 ATTORNEYS' FEES. In the event any legal action is brought to
enforce or interpret the provisions of this Lease, the prevailing
party therein shall be entitled to recover all costs and expenses
including reasonable attorneys' fees.
28.8 INTEREST. Any installment of Base Rent or any other sum due from
Tenant under this Lease which is received by Landlord after
thirty (30) days from when the same is due shall bear interest
from said thirtieth (30th) day until paid at an annual rate equal
to the greater of; (a) ten percent (10%); or (b) five percent
(5%) plus the rate established by the Federal Reserve Bank of San
Francisco as of the twenty-fifth (25th) day of the month
immediately preceding the due date on advances to member banks
under Sections 13 and 13(a) of the Federal Reserve Act, as now in
effect or hereafter from time to time amended, not to exceed the
maximum rate allowable by law. The accrual and/or acceptance of
any interest shall not constitute a waiver of Tenant's default
with respect to any overdue amount, nor prevent Landlord from
exercising any of Landlord's other rights or remedies.
28.9 NOTICES. All notices and demands required to be sent to Landlord
or Tenant under the terms of this Lease shall be personally
delivered or sent by certified or registered mail, or by
overnight carrier or fax transmission, to the addresses indicated
above or to such other addresses as the parties may from time to
time designate by notice.
28.10 AUTHORIZATION. The persons signing this Lease on behalf of Avanex
hereby represents and warrants to Landlord the following:
a. That Avanex, by duly passed resolution of the board of
directors of the corporation, is authorized to enter into
this Lease and to incur and perform all the obligations of
Tenant hereunder (which resolution shall be submitted to
Landlord upon Tenant's delivery of this Lease);
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b. That the person signing this Lease on behalf of Avanex has
been authorized by the corporation to execute this Lease
on behalf of such corporation and deliver the same to
Landlord.
28.11 PRIOR AGREEMENTS. This Lease contains all of the agreements of
the parties hereto, other than the Tenant Improvement Agreement,
with respect to any matter covered or mentioned in this Lease,
and no prior agreements or understandings pertaining to any such
matters shall be effective for any purpose. No provision of this
Lease may be amended or added to except by an agreement in
writing signed by the parties hereto or their respective
successors-in-interest.
28.12 QUIET ENJOYMENT. If Tenant timely pays the Rents and other
amounts provided in this Lease, and observes and performs all the
covenants, terms, and conditions of this Lease, Tenant shall
peaceably and quietly hold and enjoy the Premises for the Lease
Term without interruption by Landlord or any person or persons
claiming by, through or under Landlord, subject, nevertheless, to
the terms and conditions of this Lease. Notwithstanding the
foregoing, Tenant hereby acknowledges (a) that Landlord will be
constructing Building C of the Project during Tenant's occupancy
of the Building, (b) that during the course of such construction
there may be additional noise, vibrations, and traffic, together
with other elements normally attendant to construction, which may
cause some temporary disruption to Tenant's use and enjoyment of
the Premises, (c) that Tenant hereby waives any and all claims,
costs, liabilities and damages which may result from such
disruption, (d) that such disruption shall not constitute a
constructive eviction nor Tenant shall be entitled to any
abatement of Rents or other credits in connection therewith, and
(e) that Tenant shall reasonably cooperate with Landlord, upon
request, in connection with the construction of Building C.
28.13 REAL ESTATE COMMISSIONS. The parties hereto acknowledge that only
Xxxxx Xxxxxxx and Xxx Xxxxxxx of Colliers International, as
Landlord's broker, and Xxxx Xxxx and Xxxx Xxxxxxxx of BT
Commercial, as Tenant's broker, (collectively, the "BROKERS") are
the only parties entitled to any commission or fees in connection
with this Lease and that Landlord, pursuant to a separate
agreement with Xxxxx Xxxxxxx and Xxx Xxxxxxx of Colliers
International, will pay the commissions becoming due in
connection with this Lease. Xxxx Xxxx and Xxxx Xxxxxxxx of BT
Commercial shall be entitled to one half of the fees payable to
Xxxxx Xxxxxxx and Xxx Xxxxxxx of Colliers International. Each of
Landlord and Tenant hereby represents and warrants to the other
that, other than to the Brokers, no real estate brokerage
commission is payable to any person or entity in connection with
the transaction contemplated hereby, and each party agrees to and
does hereby indemnify and hold the other harmless against the
payment of any commission to any person or entity claiming by,
through or under the indemnifying party. This indemnification
shall extend to any and all claims, li-
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abilities, costs and expenses (including reasonable attorney fees
and litigation costs) arising as a result of such claims and
shall survive any termination of this Lease.
28.14 JOINT AND SEVERAL LIABILITY. Each of the parties executing this
lease as "Tenant" shall be jointly and severally liable for the
performance of all of the Tenant's obligations under this Lease.
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IN WITNESS WHEREOF, this Lease is executed on the date and year first above
written.
LANDLORD:
XXXXXXXXX BUSINESS PARK, LLC
a California limited liability company
By: /s/ XXX XXXXXX
-------------------------------------
Xxx Xxxxxx,
its Managing Member
TENANT:
AVANEX CORPORATION,
a California corporation
By: /s/ XXXXXX XXXXXXXXXXXX
-------------------------------------
its: Chief Executive Officer
By: /s/ XXXXX XXXX
-------------------------------------
its: Chief Financial Officer
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[EXHIBIT OMITTED]
49
EXHIBIT "B"
PURCHASE AGREEMENT
This Purchase Agreement ("Agreement") is entered into on this _________ day of
______, _____, by and between XXXXXXXXX BUSINESS PARK, LLC, a California limited
liability company, ("SELLER") and AVANEX CORPORATION, a California corporation
("BUYER").
ARTICLE 1 DEFINITIONS
For purposes of this Agreement, the following terms shall have the following
meanings:
1.1 APPURTENANCES. The term "APPURTENANCES" shall mean all easements,
rights-of-way, and other real property rights and interests which are
appurtenant to the Land and Improvements.
1.2 CLOSING DATE; CLOSE OF ESCROW. The term "CLOSING DATE" shall mean the
date which is forty-five (45) days following the Effective Date, which
Closing Date shall be subject to extension as provided in Section 3.2
below, provided, however, in no event shall any purchase of Building B
close later than December 31, 1999. The term "CLOSE OF ESCROW" shall
mean the recording of the Grant Deed in the Official Records of Alameda
County.
1.3 ESCROW HOLDER. The term "ESCROW HOLDER" shall mean First American Title
Company in Pleasanton, California.
1.4 EFFECTIVE DATE. Provided that Buyer has executed, initialed in Section
5.1, dated and delivered this Agreement unmodified as required in the
Lease, this Agreement shall be effective on the date the Seller has
executed this Agreement.
1.5 EQUIPMENT AND COMPONENTS. The term "EQUIPMENT AND COMPONENTS" shall mean
all equipment, machinery, cabling, utility components, and other non
real property items installed or located on the Land and Improvements
which are owned by Seller and used in connection with the operation
thereof
1.6 GRANT DEED. The term "GRANT DEED" shall mean the grant deed to be given
by Seller to Buyer in connection with the conveyance of the Property.
1.7 HAZARDOUS MATERIALS. The term "HAZARDOUS MATERIALS" shall mean gasoline
and petroleum products and all substances defined as "hazardous
substances," "hazardous materials," or "toxic substances" in the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, 42 U.S.A. Sec. 9601, et seq.;
EXHIBIT "B"
50
the Hazardous Materials Transportation Act, 49 U.S.A. Section 1801, et
seq.; the Resource Conservation and Recovery, Act, 42 U.S.A. Section
6901 et seq., and those substances defined as "hazardous wastes" in
Section 25117 of the California Health & Safety Code or as "hazardous
substances" in Section 25316 of the California Health & Safety Code; in
the regulations adopted and publications promulgated pursuant to such
law; and in the Hazardous Materials storage ordinances of Alameda
County, and in any amendments to such laws and regulations.
1.8 IMPROVEMENTS. The term "IMPROVEMENTS" shall mean the building shell
consisting of approximately _________________ square feet and other
affixed improvements, landscaping, and fixtures located on the Land and
located at __________ Encyclopedia Circle, Fremont, California. Tenant
has reviewed the plans and specifications for the Improvements and has
accepted the aforesaid measurement of the Improvements.
1.9 LAND. The term "LAND" shall mean the real property described in EXHIBIT
"A" attached hereto. If the description of the Land attached hereto is
based upon a tentative parcel map for the subject real property and such
description is later modified in the final parcel map, then the term
"Land" shall mean and refer to the description set forth in such final
parcel map.
1.10 LEASE, The term "LEASE" shall mean that certain Lease Agreement entered
into by and between Seller, as landlord, and buyer, as tenant, dated on
or about September __, 1999.
1.11 PERMITTED TITLE EXCEPTIONS. The term "PERMITTED TITLE EXCEPTIONS" shall
mean (a) real-property taxes and assessments constituting a lien, but
not delinquent, (b) utility easements and similar rights granted in
connection with the development of the Property, (c) all conditions
imposed in connection with the parcel map for the Land, (d) that certain
Declaration of Covenants, Conditions, and Restrictions and Reciprocal
Easement Agreement ("DECLARATION"), and (d) any encumbrances, liens,
restrictions or other matters approved in writing, and/or created, by
Buyer.
1.12 PROPERTY. The term "PROPERTY" shall mean collectively the Land,
Improvements, Equipment and Components, and all other rights and
interests appurtenant to the foregoing.
1.13 PURCHASE PRICE. The term "PURCHASE PRICE" shall mean the sum of
________________ Dollars ($______.00) and, provided that Seller has not
otherwise terminated the Lease and Buyer's option thereunder to acquire
the Property, any and all amounts due Seller under Lease which are
unpaid as of the Close of Escrow.
EXHIBIT "B"
51
ARTICLE 2
PURCHASE AND SALE
2.1 PURCHASE AND SALE. Buyer hereby agrees to purchase from Seller, and
Seller hereby agrees to sell and convey to Buyer, the Property, which
purchase and sale shall be subject to, and carried out in accordance
with, the terms, provisions and conditions set forth in this Agreement.
2.2 PURCHASE PRICE. The Purchase Price shall be paid by Buyer to Seller, as
follows:
(a) On or before the Effective Date, Buyer shall pay a "DEPOSIT" in
the amount of One Hundred Thousand Dollars ($100,000.00). As of
the Effective Date, the Deposit shall be non-refundable.
(b) The balance of the Purchase Price (i.e $________, together with
the other amounts, and subject to a possible reduction as,
described in Section 1.13 above) shall be paid by Buyer in cash
upon the Close of Escrow.
2.3 CONDITION OF TITLE. Seller shall convey to Buyer good and marketable fee
title to the Property on the Closing Date by delivery of the Grant Deed,
free and clear of all liens, encumbrances and exceptions other than the
Permitted Title Exceptions.
2.4 INVESTIGATIONS. Buyer hereby acknowledges that Buyer has been in
possession of the Property pursuant to the Lease and, by reason thereof,
Buyer has had a sufficient opportunity engage in such studies,
inspections and other activities (including, without limitation, studies
or investigations regarding Hazardous Materials) which Buyer has deemed
appropriate for its acquisition and continued use of the Property
2.5 AS-IS. Buyer's purchase of the Property shall be subject to the
following:
a. Buyer agrees to purchase the Property "as is" and "with all
faults," solely in reliance on Buyer's own investigation of the
Property. Buyer acknowledges that it has conducted a review of
the physical and environmental condition of the Property, the
expenses of owning and operating the Property, the extent to
which the Property complies with governmental laws, ordinances,
rules and regulations, the present and proposed land use
regulations that affect or may affect the Property and the
fitness of the Property for Buyer's proposed use, among other
things. In undertaking its investigation, Buyer has been and will
be advised by attorneys, and other advisors.
EXHIBIT "B"
52
b. Buyer acknowledges that Seller makes no representations or
warranties express or implied wit respect to the Property. In
light of Buyer's willingness to diligently investigate and
evaluate the Property and to accept the Property on an "as is"
and "with all faults" basis, the parties have negotiated the
terms and conditions of this Agreement, including the Purchase
Price. Buyer acknowledges that Buyer is purchasing the Property
"as is" and "with all faults", without other express or implied
warranties of Seller.
c. By acquiring the Property Buyer shall be deemed to have waived
any and all objections to the physical characteristics, including
acreage, size of improvements and conditions of the Property
which would be disclosed by such inspection or otherwise; and
agreed to purchase the Property having inspected and accepted the
condition and repair of the improvements, and without regard to
any other physical or environmental condition of the Property,
including (without limitation) topography, climate, soil,
subsoil, existing fill, drainage and surface and groundwater
quality, and without regard to air and water rights, the
availability of utilities and water, present and future zoning,
purposes for which the Property is suited, access to public
roads, proposed routes, or enlargement of roads or extensions
thereof, present or future assessments or any other condition or
matter affecting the Property.
d. Except to the extent such matter is caused by a breach by Seller
under this Agreement, Buyer hereby waives, releases, acquits, and
forever discharges Seller, and Seller's agents, directors,
officers and employees to the maximum extent permitted by law, of
and from any and all claims, actions, causes of action, demands,
rights, liabilities, damages, losses, costs, expenses, or
compensation whatsoever, direct or indirect, known or unknown,
foreseen or unforeseen, that it now has or which may arise in the
future on account of or in any way growing out of or connected
with the Property; including, without limitation;
i. the existence or condition of any improvements on the
Property and/or the personal property;
ii. the physical and environmental conditions of the Property
(including, without limitation the existence of Hazardous
Materials in, on, or about the Property;
iii. the state of the title to the Property;
iv. any settlement or subsidence of any fill or filled ground
on the Property or settlement or subsidence of
construction thereon, if any;
EXHIBIT "B"
53
v. any governmental laws and regulations, including, but not
limited to, zoning, environmental, asbestos control,
hazardous or toxic waste and/or material and land use laws
and regulations to which the Property may be subject; and
vi. Buyer's contemplated use of the Property.
BUYER EXPRESSLY WAIVES ANY OF ITS RIGHTS GRANTED UNDER CALIFORNIA
CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS: "A GENERAL
RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED
HIS SETTLEMENT WITH THE DEBTOR." SELLER__________ BUYER
______________
e. Buyer acknowledges that Seller has furnished, or may furnish, to
Buyer certain "third party" items, which may include, without
limitation, items prepared by third party architects,
contractors, title companies, and consultants, such as
engineering data, title reports and related title information,
Hazardous Materials reports and information, feasibility reports,
soils reports, building plans and specifications, utility plans
and other information pertaining to the Property and the
construction and installation of the Improvements and the
Equipment and Components. It is agreed that all such "third
party" items are furnished without representation or warranty on
the part of Seller whatsoever, and Buyer agrees that Buyer will
not assert any liability against Seller in any regard as to such
"third Party" items.
f. Any disclosure whatsoever to Buyer pursuant to this Agreement
shall not constitute a warranty or representation of Seller. To
the extent any information provided by Seller shall be known by
Buyer or Buyer's agents (all such knowledge of Buyer's Agents
being imputed to Buyer) to be untrue or inaccurate as a result of
any disclosure to Buyer by Seller prior to closing, with Seller
hereby agreeing to advise Buyer, prior to closing of any changes
in information of which Seller has actual knowledge; or any
investigation conducted by Buyer or on behalf of Buyer prior to
the Close of Escrow or as a result of any knowledge otherwise
acquired by Buyer or any of Buyer's Agents, Buyer shall have no
rights under this Agreement by reason of that particular untruth
or inaccuracy, and any such information provided by Seller shall
be deemed to be modified to the extent necessary to render it
consistent with such knowledge.
g. Upon the close of escrow. Seller shall assign to Buyer any
existing warranties which Seller may have received from the
building contractor to the extent the
EXHIBIT "B"
54
same may be assigned, provided that Seller shall have no
obligation to obtain any such warranties.
2.7 NO SELLER LIENS. Upon the Close of Escrow there shall be no
outstanding contracts made by Seller for any improvements to the
Property that have not been fully paid for.
ARTICLE 3
ESCROW AND CLOSE OF ESCROW
3.1 OPENING. An escrow (the "Escrow") shall be opened with Escrow Holder by
delivering a fully executed copy of this Agreement to Escrow Holder.
Buyer and Seller hereby authorize their respective attorneys to execute
and deliver to Escrow Holder any additional or supplementary
instructions as may be necessary or convenient to close the transaction
contemplated hereby; provided however, any such additional instructions
shall not supersede this Agreement.
3.2 CLOSING DATE. The Close of Escrow shall occur through Escrow on or
before the Closing Date specified in Article 1. In the event Buyer is
obtaining financing in order to purchase the Property, then Buyer may,
prior to the scheduled Closing Date, provide to Seller written notice
electing to extend the Closing Date so as to accommodate the closing of
such financing; provided, however, in no event shall the Closing Date be
extended by more than fifteen (15) days.
3.3 SELLER'S DELIVERIES. Prior to the Closing Date, Seller shall deliver to
Escrow Holder the following:
a. The Grant Deed, duly executed and acknowledged by Seller;
b. A certification as required by the Foreign Investors Property Tax
Act, as amended, and the California Revenue and Taxation Code
Section 18805 et seq.
c. Such other documents as may be reasonably required by Escrow
Holder.
3.4 BUYER'S DELIVERIES. Prior to the Closing Date, Buyer shall deliver to
Escrow Holder the following:
a. The balance of the Purchase Price;
b. Such other funds and documents as may be reasonably required by
Escrow Holder.
EXHIBIT "B"
55
3.5 PRORATIONS. All items of expense (including, without limitation, real
property taxes and assessment, together with any amounts owning under
the Declaration) for the Property shall be prorated between Seller and
Buyer as of the Close of Escrow, with all items of expense for the
Property being borne by Buyer for the Close of Escrow.
3.6 CLOSING COSTS. Any escrow fee charged by Escrow Holder shall be paid
one-half (1/2) by Seller and one-half (1/2) by Buyer. Seller shall pay
(a) the CLTA portion of the premium for Buyer's title policy, and (b)
any City and County documentary and transfer taxes assessed on the
recording of the Grant Deed. Buyer shall pay (i) the fee for the
recording of the Grant Deed and any other documents, (ii) any writing
fees, (iii) the premium for the ALTA portion, if any, of the premium for
Buyer's title policy, the premium for any lender's policy of title
insurance, and the cost of any title endorsements to such policies, and
(vi) all other closing costs of any nature and costs of any inspections
or tests Buyer authorizes or conducts. Any other closing costs not
described above shall be paid by the parties in accordance with the
custom in Alameda County.
3.7 NO LITIGATION. Seller warrants to Buyer that, as of the date of this
Agreement and as of the Close of Escrow, and except as may otherwise be
disclosed by Seller: (1) there are no actions, suits, or proceedings
pending, or, to the knowledge of Seller, threatened, against Seller or
the Property, or involving the validity or enforceability of this
Agreement, including, but not limited to, petitions under Bankruptcy Act
of 1978 or other petitions for reorganization or for debtor relief or
for the appointment of a receiver; (2) there are no condemnation
proceedings, redevelopment projects, or similar projects that could
material affect the Property; and (3) the execution and delivery of this
Agreement by Seller and the performance and observance of the terms have
all been authorized by all necessary actions of Seller. This Agreement
has been duly executed by Seller. Buyer hereby acknowledges that Seller
has disclosed that the City of Fremont may take portions of the Land in
order to accommodate the widening of Encyclopedia Circle.
ARTICLE 4
RISK OF LOSS
4.1 RISK OF LOSS. Until Close of Escrow, Seller alone shall bear the risk of
loss should there be damage to any of the Improvements by fire or other
casualty (collectively, "Casualty"). If, prior to the Close of Escrow,
any of the Improvements shall be damaged by a Casualty, Seller shall
deliver to Buyer written notice if Seller does not intend to repair any
Casualty damage prior to the Closing Date ("Casualty Loss Notice").
4.2 BUYER ELECTION. Buyer may, as its sole option, within thirty (30) days
after delivery of the Casualty Loss Notice either (a) terminate this
Agreement by delivering written notice of same to Seller, or (b) waive
its right of termination and proceed to close this transaction in
accordance with the terms hereof ("Waiver Option"). Failure of Buyer to
EXHIBIT "B"
56
deliver written notice of termination within said thirty (30) day period
shall be conclusively deemed to be an election by Buyer of the Waiver
Option. In the event Buyer elects to terminate this Agreement under this
Section 4.2, thereafter neither party to this Agreement shall thereafter
have any further rights or obligations hereunder and the Deposit, less
that portion thereof which is required to be retained by Seller as the
security deposit under the Lease, shall be returned to Buyer.
If Buyer elects or is deemed to have elected the Waiver Option, then
Seller shall have no obligation to repair the Casualty (but shall assign
to Buyer all of its rights in the resulting casualty insurance proceeds
and a pro rata share of the rental or business loss proceeds) and the
parties shall proceed to Close Escrow as provided in this Agreement.
ARTICLE 5 LIQUIDATED DAMAGES
5.1 DEFAULT BY BUYER.
LIQUIDATED DAMAGES: BUYER RECOGNIZES THAT THE PROPERTY WILL BE REMOVED
FROM THE MARKET COMMENCING ON THE EFFECTIVE DATE. BUYER ACKNOWLEDGES
THAT IF IT DEFAULTS IN ITS PURCHASE OF THE PROPERTY, SELLER SHALL BE
ENTITLED TO COMPENSATION FOR THE DETRIMENT RESULTING FROM THE REMOVAL OF
THE PROPERTY FROM THE MARKET. THE PARTIES HERETO AGREE THAT THE DAMAGES
SELLER SHALL SUSTAIN AS A RESULT OF SUCH BREACH WILL BE EXTREMELY
DIFFICULT AND IMPRACTICABLE TO ASCERTAIN. THEREFORE, THE PARTIES AGREE
THAT IF BUYER FAILS TO PURCHASE THE PROPERTY AS A RESULT OF ITS BREACH,
SELLER SHALL BE ENTITLED TO RETAIN AS ITS SOLE AND EXCLUSIVE REMEDY ALL
PORTIONS OF THE DEPOSIT PAYMENT. SAID SUM SHALL BE PAID AND RECEIVED AS
LIQUIDATED DAMAGES AND NOT AS A PENALTY. BOTH PARTIES ACKNOWLEDGE AND
AGREE THAT SAID AMOUNT IS PRESENTLY A REASONABLE ESTIMATE OF SELLER'S
DAMAGES CONSIDERING ALL OF THE CIRCUMSTANCES EXISTING ON THE DATE
HEREOF, INCLUDING THE RELATIONSHIP OF THE SUM TO THE RANGE OF HARM TO
SELLER THAT REASONABLY COULD BE ANTICIPATED AND THE ANTICIPATION THAT
PROOF OF ACTUAL DAMAGES WOULD BE IMPRACTICAL OR EXTREMELY DIFFICULT.
BUYER INITIALS__ SELLER INITIALS__
EXHIBIT "B"
57
ARTICLE 6
GENERAL PROVISIONS
6.1 REAL ESTATE COMMISSIONS. Seller and Buyer each represent and warrant to
the other that no real estate brokerage commission is payable to any
person or entity in connection with the transaction contemplated hereby,
except _______________________ (collectively, the "Broker"). Seller
agrees to pay any commission owing to the Broker pursuant to separate
agreements, but only if, and when, the Close of Escrow occurs. Seller
and Buyer each agrees to and does hereby indemnify and hold the other
harmless against the payment of any commission to any person or entity
claiming by, through or under Seller or Buyer, as applicable. This
indemnification shall extend to any and all claims, liabilities, costs
and expenses (including reasonable attorney fees and litigation costs)
arising as a result of such claims and shall survive the Close of
Escrow.
6.2 ATTORNEYS' FEES. In the event any legal action is commenced concerning
the Property, this Agreement, or the rights and duties of any party in
relation thereto, whether such action be an action for damages,
equitable relief, or declaratory relief, the prevailing party in such
litigation shall be entitled to reasonable sums for attorneys' fees in
an amount set by the court.
6.3 COUNTERPARTS. This Agreement may be executed in counterparts each of
which shall be an original, but all of which shall constitute one
instrument.
6.4 FURTHER ASSURANCES. Each party shall perform or cause to be performed
all acts and shall execute, acknowledge and deliver, or cause to be
executed, acknowledged and delivered, all instruments and documents as
may be reasonably required to carry out the intent and purpose of this
Agreement.
6.5 ENTIRE AGREEMENT. This Agreement and the Exhibits attached hereto shall
constitute the entire agreement between the parties and shall supersede
all other agreements whether written or oral respecting the subject
matter of this Agreement. On the Effective Date no other agreement,
statement or promise made by either party hereto with respect to the
subject matter of this Agreement, which is not contained herein, shall
be binding or valid.
EXHIBIT "B"
58
6.6 AMENDMENTS. This Agreement shall not be modified by either party by any
oral representations made either before or after the execution of this
Agreement and all amendments to this Agreement must be in writing and
signed by Buyer and Seller.
6.7 BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of the respective assignees, heirs, successors and legal
representatives of each party. This Agreement shall not be assignable by
Buyer without the prior written consent of Seller: provided, however,
there may be assignments of rights under this Agreement among the
various parties which comprise the original Buyer hereunder, which
assignments shall not require the consent of Seller.
6.8 INTERPRETATION. Each party and its counsel have reviewed and revised
this Agreement and any rule of construction to the effect that
ambiguities are to be resolved against the drafting party shall not
apply in the interpretation of this Agreement. The captions of this
Agreement are for convenience and references only and the words
contained therein no way shall be held to explain, modify, amplify or
aid in the interpretation, construction or meaning of the provisions of
this Agreement. This Agreement shall be construed and interpreted under,
and governed and enforced according to, the laws of the State of
California. If any provisions of this Agreement are held to be
unenforceable or invalid, it is the specific intent of the parties that
the remainder of the provisions of this Agreement shall subsist and
remain in full force and effect.
6.9 TIME OF THE ESSENCE. Upon the Effective Date, time shall be of the
essence as to the performance of obligations under this Agreement.
[SIGNATURES ON FOLLOWING PAGE]
EXHIBIT "B"
59
IN WITNESS WHEREOF, the parties have executed this Agreement on the respective
dates set forth below:
BUYER:
AVANEX CORPORATION,
A California corporation
By: Dated:
-------------------------------- --------------------
SELLER:
XXXXXXXXX BUSINESS PARK, LLC.
A California limited liability company
By: Dated:
-------------------------------- --------------------
EXHIBIT "B"
60
EXHIBIT "C"
BASE RENT SCHEDULE
Lease Year Monthly Base Rent
1 $63,800.24
2 $66,352.25
3 $69,006.33
4 $71,766.60
5 $74,637.25
6 $77,622.75
7 $80,727.66
8 $83,956.76
9 $87,315.03
10 $90,807.63
EXHIBIT C
61
[EXHIBIT OMITTED]
