LEASE
Exhibit
10.3
THIS
LEASE is made on this 1St day
of May, 2005,
by and between, Vasona Business Park (hereinafter called
"Lessor") and Procera Networks (hereinafter called
"Lessee").
IN
CONSIDERATION OF THE MUTUAL PROMISES HEREIN CONTAINED, THE PARTIES AGREE AS
FOLLOWS:
1. Premises,
Lessor leases to Lessee and Lessee leases from Lessor, upon the terms and
conditions herein set forth, those certain premises ("Premises") situated in
the
City of Los Gatos, County of Santa Clara, California, as outlined in Exhibit
"A"
attached and described as: approximately 11,772 square feet of that larger
33,020 square foot building commonly known as 000X Xxxxxx Xx., Xxx Xxxxx,
Xxxxxxxxxx. 00000
2. Term.
The term of this Lease shall be for Thirty-seven (37) months commencing on
June 1, 2005, and ending on June 30, 2008 unless sooner terminated
pursuant to any provisions hereof.
3. Rent.
Lessee shall pay to Lessor rent for the Premises of Twelve Thousand Nine Hundred
and Forty-Nine Dollars ($12,949.00) per month in lawful money of the United
States of America, subject to adjustment or offset, prior notice or demand,
at
such place as may be designated from time to time by Lessor as follows:
$12,949.00 shall be paid upon execution of the Lease, which sum represents
the
amount of the second month's rent, A deposit of $15,304.00 as a Security Deposit
shall be made by Lessee and held by the Lessor pursuant to Paragraph 5 of this
Lease, and shall also be paid upon execution of the Lease, If Lessee is not
in
default of any provisions of this Lease, this sum, without interest thereon,
shall be applied toward the rent due for the last month of the term of this
Lease or the extended term, pursuant to any extension of the initial term in
accordance with the provisions of this Lease. $12,949.00 shall be paid on
July 1, 2005 and in advance of the first (1st) day of each month until
June 30, 2006. $14,126.00 shall be paid on July 1, 2006 and in
advance of the first day of each month until June 30, 2007. $15,304.00 shall
be
paid on July 1, 2007, and in advance of the first day of the each month
until June 30, 2008.
Rent
for
any period during the term hereof which is for less than one (1) full month
shall be a pro-rata portion of the monthly rent payment. Lessee acknowledges
that late payment by Lessee to Lessor of rent or any other payment due Lessor
will cause Lessor 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 Lessor by the terms of any encumbrances and
note
secured by any encumbrance covering the Premises. Therefore, if. any installment
of rent or other payment due from Lessee is not received by Lessor within five
(5) days following the date it is due and payable, Lessee shall pay to Lessor
an
additional sum of five (5%) percent of the overdue amount as a late charge.
The
parties agree that this late charge represents a fair and reasonable estimate
of
the costs that Lessor will incur by reason of late payment by Lessee. Acceptance
of any late charge shall not constitute a waiver of Lessee's default with
respect to the overdue amount, nor prevent Lessor from exercising any of the
other rights and remedies available to Lessor.
If
for
any reason whatsoever, Lessor cannot deliver possession of the Premises on
the
commencement date set forth in Paragraph 2 above, this Lease shall not be
void
or voidable, nor shall Lessor be liable to Lessee for any loss or damage
resulting therefrom; but in such event, Lessee shall not be obligated to
pay
rent until possession of the Premises is tendered to Lessee and the commencement
and termination dates of this Lease shall be revised to conform to the date
of
Lessor's delivery of possession. Notwithstanding the foregoing sentence,
Lessor shall permit Lessee to enter and occupy the Premises (Early
Access) prior to the commencement date of this term, subject to all of the
provisions of this Lease, except for the obligation to pay rent which
Lessee shall not be called upon to pay until July 1, 2005. Lessee's
occupancy of the Premises during the early occupancy period shall in no way
interfere with or delay Lessor's clean-up, construction and
installation of the tenant improvements described in Paragraph of
this Lease, and Lessee shall hold Lessor harmless from such delay caused
by, or due to the fault of
Lessee. Lessee agrees to provide Lessor with insurance required
in Paragraphs 10A, 10B and 10D prior to occupancy.
B.
All
taxes, insurance premiums, Outside Area Charges, late charges, costs and
expenses which Lessee is required to pay hereunder, together with all interest
and penalties that may accrue thereon in the event of Lessee's failure to
pay
such amounts, and all reasonable damages, costs and attorney's fees and expenses
which Lessor may incur by reason of any default of Lessee or failure on Lessee's
part to comply with the terms of this Lease, shall be deemed to be additional
rent ("Additional Rent") and, in the event of non-payment by Lessee, Lessor
shall have all of the rights and remedies with respect thereto as Lessor
has for
the non-payment of the monthly installment of rent.
4.
Option to Extend Term.
A.
Lessee
shall have the option to extend the term on all the provisions contained
in this
Lease for one (1) three (3) year period ("extending term(s)") at an adjusted
rental calculated as provided in Subparagraph B below on the condition
that:
(1) Lessee
has given to Lessor written notice of exercise six (6) months prior to the
expiration of the initial term or extended term as the case may be.
(2) Lessee
is not in default in the performance of any of the terms and conditions of
the
Lease on the date of giving the option Notice, and Lessee is not in default
on
the date the extended term is to commence.
B.
Monthly rent for the extended term shall be at ninety-five (95%) of the then
market rate for similar buildings in the Los Gatos/Xxxxxxxx
area.
C.
In no
event shall the monthly rent for any extended term be less than the monthly
rent
paid immediately prior in such extended term.
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5. Security
Deposit. Lessor acknowledges that Lessee has deposited with
Lessor a Security Deposit in the sum of $15,304.00 to secure the full and
faithful performance by Lessee of each term, covenant, and condition of this
Lease. If Lessee shall at any time fail to make any payment or fail to keep
or
perform any term, covenant, or condition on its part to be made or performed
or
kept under this Lease, Lessor may, but shall not be obligated to and without
waiving or releasing Lessee from any obligation under this Lease, use, apply,
or
retain the whole or any part of said Security Deposit (a) to the extent of
any
sum due to Lessor; or (b) to make any required payment on Lessee's behalf;
or
(c) to compensate Lessor for any loss, damage, attorneys' fees or expense
sustained by Lessor due to Lessee's default. In such event, Lessee shall within
five (5) days of written demand by Lessor, remit to Lessor sufficient funds
to
restore the Security Deposit to its original sum. No interest shall accrue
on
the Security Deposit. Should Lessee comply with all the terms, covenants and
conditions of this Lease and at the end of the term of this Lease leave the
Premises in the condition required by this Lease, then said Security Deposit
or
any balance thereof, less any sums owing to Lessor, shall be returned to Lessee
within fifteen (15) days after the termination of this Lease and vacancy of
the
Premises by Lessee. Lessor can maintain the Security Deposit separate and apart
from Lessor's general funds, or can commingle the Security Deposit with Lessor's
general and other funds.
6. Use
of the Premises. The Premises shall be used exclusively for
the purpose of general office, research and development, software development
and test, light assembly, warehousing, engineering, sales and distribution
and
any other related lawful purpose in conformity to municipal zoning
requirements.
Lessee
shall not use, or permit the Premises, or any part thereof, to be used, for
any
purpose or purposes other than the purpose for which the Premises are hereby
leased; and no use shall be made or permitted to be made of the Premises, nor
acts done, which will increase the existing rate of insurance upon the building
in which the Premises are located, or cause a cancellation of any insurance
policy covering said building, or any part thereof, nor shall Lessee sell,
or
permit to be kept, used or sold, in or about the Premises, any article which
may
be prohibited by the standard form of fire insurance policies. Lessee shall
not
commit, or suffer to be committed, any waste upon the Premises, or any public
or
private nuisance, or other act or thing which may disturb the quiet enjoyment
of
any other tenant in the building in which the Premises are located; nor, without
limiting the generality of the foregoing, shall Lessee allow the premises to
be
used for any improper, unlawful or objectionable purpose.
7. Hazardous
Materials.
Lessor
hereby represents to Lessee that to the best of Lessor's knowledge, there is
no
toxic waste, spillage, or other contaminants, including asbestos, present in
or
about the Premises or the building thereon as of the date of
execution of this Lease. Lessee shall not place any harmful liquids
in the drainage system of the Premises or of the
building of which the Premises forms a part. No waste materials or refuse shall
be dumped upon or permitted to remain upon any part of the Premises outside
o
the building proper except in trash containers placed inside exterior enclosures
designated for the purpose by Lessor, or inside the building proper where
designated by Lessor. No materials, supplies, equipment,finished or
semi-finished products, raw materials or articles of any nature shall be stored
upon or permitted to remain on any portion of the Premises outside of the
building.
Should,
at any time during the term of this Lease, or for a period of five (5) years
after termination or expiration of this Lease, there be charges or findings
of
toxic waste, spillage, or other contaminants found by a governmental agency
to
be hazardous and requiring removal or remedial work of the same, and it is
determined that Lessee is the cause, Lessee hereunder shall hold Lessor harmless
from all claims, obligations, liabilities and costs, including reasonable
attorney's fees, for the removal, remedial work, or other action required
by the
governmental agency so prescribing said action, or any other agency having
jurisdiction unless Lessee can demonstrate that such toxic waste, spillage,
or
other contaminants did not occur as a result of Lessee's operations while
occupying the Premises. If, at any time during the term of this Lease, Lessor
suspects that toxic waste, spillage, or other contaminants may be present
on the
Premises, Lessor may order a soils report, or its equivalent, at Lessee's
expense and if it is determined that Lessee is the cause, Lessee shall pay
such
costs within fifteen (15) days from the date of invoice by Lessor. If any
such
toxic waste, spillage, or other contaminants are found upon the Premises,
Lessee
shall deposit with Lessor, within fifteen (15) days of notice from Lessor
to
Lessee to do so, the amount necessary to remove such substances and remedy
the
problem, if it is proven that Lessee is responsible for such toxic waste,
spillage or contaminants.
Lessee
shall abide by all laws, ordinances and statutes, as they now exist or may
hereafter be enacted by legislative bodies having jurisdiction thereof, relating
to its use and occupancy of the Premises.
A. Definitions.
As used herein, the term "Hazardous Material" shall mean any substance
or
material which has been determined by any state, federal or local governmental
authority to be capable of posing a risk of injury to health, safety or property
including all of those materials and substances designated as hazardous or
toxic
by the Environmental Protection Agency, the California Water Quality Control
Board, the Department of Labor, the California Department of Industrial
Relations, the Department of Transportation, the Department of Agriculture,
the
Consumer Product Safety Commission, the Department of Health and Human Services,
the Food and Drug Agency or any other governmental agency now or hereafter
authorized to regulate materials and substances in the environment. Without
limiting the generality of the foregoing, the term "Hazardous Material" shall
include all of those materials and substances defined as "Toxic Materials"
in
Section 66680 through 66685 of Title 22 of the California Administrative
Code,
Division 4, Chapter 30, as the same shall be amended from time to
time.
B. Use
Restriction. Lessee shall not cause or permit any Hazardous
Material to be used, stored, or disposed of in or about the Premises except
in
strict accordance with all laws and ordinances governing Hazardous Materials.
The appearance of any Hazardous Material on or about the Premises which is
caused or permitted by Lessee shall be deemed an Event of Default. If the
presence of Hazardous Material on or about the Premises which is caused or
permitted by Lessee results in contamination of the Premises or any soil
in or
about the Premises or groundwater under the Premises, Lessee, at its expense,
shall promptly take all action necessary to return the Premises to the condition
existing prior to the appearance of such Hazardous Material and shall perform
all monitoring, testing, containment clean-up and other actions required
by any
applicable governmental agency.
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C. Lessee's
Indemnity. Lessee shall defend, hold harmless and indemnify
Lessor and its agents, lenders and employees from or against any and all
liabilities, obligations, damages, penalties, claims, costs (including
compliance and clean-up costs), charges, expenses of attorneys, expert
witnesses, engineers and other consultants which may be imposed upon, incurred
by or asserted against Lessor or the Premises by reason of any contamination
of
the Premises or any soil in or about the Premises or any groundwater under
the
Premises caused by Lessee's storage, use or disposal of Hazardous Material
in or
about the Premises.
X.
Xxxxxx'x Indemnification.
Lessor shall indemnify, defend and hold harmless
Lessee from and against any
and all liabilities, obligations, damages, penalties, claims, costs, (including
compliance and clean-up costs), charges, expenses of attorneys, expert
witnesses, engineers and other consultants which may be imposed upon, incurred
by or asserted against Lessee by reason of any contamination of the Premises
caused by Lessor's storage, use or disposal of Hazardous Material on or about
the Premises or caused by a release of Hazardous Material by third parties
which
release Lessee proves occurred off the Premises.
E.
Representations and
Warranties. Lessor represents and warrants that Lessor has
not received nor is aware of any notification from the Department of Health
Services, California Regional Water Quality Control Board, the U.S.
Environmental Protection Agency or such other City, County or State authority
having jurisdiction to require investigation, monitoring or remediation of
any
release of Hazardous Material, on, above or beneath the Premises. Lessor further
represents that in the event that such notice or notices are received by Lessor,
Lessor shall promptly deliver copies thereof to Lessee.
F. Compliance.
Lessee shall immediately notify Lessor of any inquiry, test, investigation,
enforcement proceeding by or against Lessee or the Premises concerning Hazardous
Material used, stored or disposed of by Lessee or alleged to have been used,
stored or disposed of by Lessee on or about the Premises. Lessor shall have
the
right to appoint a consultant to conduct an investigation to determine whether
Lessee has used, stored or disposed of Hazardous Material on or about the
Premises. If the consultant determines that Hazardous Materials have been
stored, used or disposed of by Lessee, Lessee, at its expense, shall comply
with
all recommendations of the consultant, including, without limitation, any
recommended testing, monitoring and clean-up.
G. Assignment
and Subletting. It shall not be unreasonable for Lessor to
withhold its consent to any proposed assignment or subletting if (i) the
proposed assignee's or subiessee's anticipated use of the Premises involves
the
storage, use or disposal of Hazardous Material; (ii) if the proposed assignee
or
sublessee has been required by any prior Lessor, lender or governmental
authority to "cleanup" Hazardous Material; (iii) if the proposed assignee
or sublessee is subject to investigation or enforcement order or proceeding
by
any governmental authority in connection with the use, disposal or storage
of a
Hazardous Material.
H.
Survival. The provisions contained in this
Paragraph 7 shall survive the expiration or earlier termination of this
Lease.
8. Improvements.
Lessor will, at its sole expense, make improvements to the Premises as
specified in Exhibit "B" attached hereto and by this reference made a part
hereof. Since Lessee needs to occupy the premise before these
improvements can be completed, the
improvements shall be constructed at a
later date to be mutually agreed upon by Lessee and Lessor (no later than
October 31, 2005, unless agreed otherwise to in writing. If the improvements
include a shower, Lessee agrees to pay for all associated costs.
Lessor agrees to clean the premise throughout and deliver all mechanical,
plumbing, electrical and fire sprinkler systems shall be in good
working order, condition and repair with all lighting in proper
working condition and all broken or soiled ceiling tiles shall be replaced.
Lessee hereby acknowledges that exhibit "B" may need to be modified
to meet the Town of Los Gatos approval for getting a building permit.
The existing two men's restrooms do not meet handicap code so they
definitely will need reconstructed. This could affect the existing
cubicles.
9.
Taxes and Assessments.
A.
Lessee shall pay before delinquency any and all taxes, assessments, license
fees, public charges levied, assessed or imposed upon or against Lessee's
fixtures, equipment, furnishings, appliances and personal property installed
or
located on or within the Premises. Lessee shall cause said fixtures, equipment,
furnishings, furniture, appliances and personal property to be assessed and
billed separately from the real property of Lessor. If any of Lessee's said
personal property shall be assessed with Lessor's real property, Lessee shall
pay to Lessor the taxes attributable to Lessee within ten (10) days after
receipt of a written statement from Lessor setting forth the taxes applicable
to
Lessee's property.
B. All
property taxes or assessments levied or assessed or hereafter levied or
assessed, by any governmental authority, against the Premises or any portion of
such taxes or assessments which becomes due or accrued during the term of
this
Lease, shall be paid by Lessor. Lessee shall reimburse Lessor for Lessee's
proportionate share of such taxes or assessments within ten (10) days of
receipt
of Lessor's invoice demanding such payment. Lessee's liability hereunder
shall
be prorated to reflect the commencement and termination dates of this
Lease.
10.
Insurance.
A. Indemnity.
Lessee agrees to indemnify and defend Lessor against and hold Lessor
harmless from any and all demands, claims, causes of action, judgments,
obligations, liabilities, and all reasonable expenses incurred in investigating
or resisting the same (including reasonable attorney's fees) on account of,
or
arising out of the Lessee's use or occupancy of the Premises. This Lease
is made
on the express condition that Lessor shall not be liable for, or suffer loss
by
reason of, injury to person or property, from whatever cause, in any way
connected with the Lessee's use or occupancy of the Premises, specifically
including, without limitation, any liability for injury to the person or
property of Lessee, its agents, officers, employees, licensees and
invitees.
B. Liability
Insurance. Lessee shall, at the Lessee's expense, obtain and
keep in force during the term of this Lease, a policy of commercial general
liability insurance insuring Lessor and Lessee, with cross-liability
endorsements, against any liability arising out of the condition, use or
occupancy of the Premises and Lessee's use of all areas appurtenant thereto,
including parking areas. Such insurance shall be in an amount satisfactory
to
Lessor of not less than $3,000,000.00 Combined Single Limit for bodily injury
or
death and Property Damage per occurrence and annual policy aggregate. The
insurance shall be with companies approved by Lessor, which approval Lessor
agrees not to unreasonably withhold. Lessee shall deliver to Lessor prior
to
possession, a certificate of insurance evidencing the existence of the policy
required hereunder, and such certificate shall certify that the policy (1)
names
Lessor as an additional insured, (2) shall not be canceled without thirty
(30)
days prior written notice to Lessor, (3) insures performance of the indemnity
set forth in Sub-paragraph (A) above, subject to standard exclusions and
(4) the
coverage is primary and any coverage by Lessor is in excess
thereto.
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C. Property
Insurance. Lessor shall obtain and keep in force during the
term of this Lease, a policy or policies of insurance covering loss or damage
to
the Premises, in the amount of the full replacement value thereof, providing
protection against those perils included within the classification covering
Direct Risk of physical loss with endorsement covering Special Form perils
insurance, plus a policy of rental income insurance in the amount of 100% of
the
twelve (12) months rent (including sums payable as Additional Rent), and, at
Lessor's option, earthquake insurance and flood insurance. Lessee shall have
neither interest in nor any right to the proceeds of any insurance procured
by
Lessor on the Premises. Lessee shall, within twenty (20) days after receipt
of
billing, pay to Lessor as additional rent, the full cost of such insurance
procured and maintained by Lessor, Lessee acknowledges that such insurance
procured by Lessor shall contain a deductible which reduces Lessee's cost for
such insurance and, in the event of loss or damage; Lessee shall be required
to
pay to Lessor the amount of such deductible.
D. Release
of Lessor. Lessee acknowledges that the insurance to be
maintained by Lessor on the Premises pursuant to Sub-paragraph C above will
not
insure any of Lessee's property. Accordingly, Lessee, at Lessee's own expense,
shall maintain in full force and effect on all its fixtures, equipment,
leasehold improvements and personal property in the Premises, a policy covering
Direct Risk of physical loss with endorsement covering Special Form perils
insurance to the extent of at least ninety (90%) percent of their insurable
value. Lessee hereby releases Lessor, and its partners, officers, agents,
employees, and servants, from any and all claims, demands, loss, expense or
injury to the Premises or to the furnishings, fixtures, equipment, inventory
or
other personal property of Lessee in, about, or upon the Premises which is
caused by perils, events or happenings which are covered by insurance required
by this Lease or which are the subject of insurance carried by Lessee and in
force at the time of such loss. Lessee shall procure an appropriate clause
in,
or an endorsement to, all policies required by this Lease, or any other
insurance policy maintained by Lessee with respect to the Premises or Lessee's
occupancy thereof, pursuant to which the insurance company or companies waive
subrogation or consent to a wavier of a right of recovery against
Lessor.
E.
Mutual Waiver of Subrogation. Lessee and
Lessor hereby mutually waive their respective rights for recovery against each
other for any loss of or damage to the property of either party, where such
loss
or damage is insured by any insurance policy required to be maintained by this
Lease or otherwise in force at the time of such loss or damage. Each party
shall
obtain any special endorsements, if required by the insurer, whereby the insurer
waives its right of recovery against the other party hereto. The provisions
of
this Sub-paragraph E shall not apply in those instances in which waiver of
subrogation would cause either party's insurance coverage to be voided or
otherwise made uncollectible.
11.
Utilities. Lessee shall pay for its prorate
share of all water, gas, light, heat, power, electricity and sewer charges
and all of its telephone, trash pick-up, and other services
supplied to or consumed on the
Premises, and all taxes and surcharges thereon. There is only one electric
meter
for the entire 33,020 square foot building, and the contract is in the name
of Lessor. Lessor shall pay for utilities (other than telephone) to
the premise and Lessee agrees to reimburse Lessor for its prorata share of
the cost of said utilities. With respect to the payment of the
utilities only while a portion of the building is vacant, Lessee's prorata
share
of the cost of the utilities shall be forty-three and eight tenths
(43.8%) percent of ninety-five (95%) percent of the amount of the utility
xxxx and when the entire building is leased, Lessee shall pay thirty-five
and seven tenths (35.7%) of the total xxxx. The monthly cost shall be estimated
at twenty (20) cents per square foot per month and shall be paid monthly along
with the monthly rent. The actual cost shall be reconciled every six months
and
Lessee shall either be billed for any amounts due or receive payment of any
amount owed within thirty (30) days of reconciliation. Lessor agrees to use
reasonable efforts to assure Lessee that other Lessees located within
the building are not consuming an inordinate amount of
electricity or gas and if Lessor determines that other Lessees within the
building is doing so, Lessor agrees to adjust the manner of payment
and the allocated prorata share of the utility expenses on an
equitable basis. Lessee shall be provided with copies of all bills of all
charges. In addition, the cost of any utility services supplied to the Outside
Area shall be an Outside Area Charge and Lessee shall pay its share of such
cost
to Lessor as provided in Paragraph 13 below.
12.
Repairs and Maintenance.
A.
Subject to provisions of Paragraph 17, Lessor shall keep and maintain the
roof
(including the roof structure and membrane), paving, structural elements,
landscaping, irrigation, the exterior walls of the building in which the
Premises are located and all common areas in good order and repair. Except
for the cost of keeping and maintaining the structural elements of the building
foundations, exterior walls (excluding painting) and roof structure
only, which shall be borne solely by Lessor, Lessee shall reimburse Lessor
for its proportionate share of said expense within ten (10) days of Lessee's
receipt of Lessor's invoice demanding payment. If, however, any repairs or
maintenance are required because of an act or omission of Lessee, or its
agents,
employees, or authorized representatives, Lessee shall pay to Lessor upon
demand
100% of the costs of such repair or maintenance.
B.
Except as expressly provided in Sub-paragraph (A) above, Lessee shall at
its
sole cost, keep and maintain the entire Premises and every part thereof,
including, without limitation, the windows, window frames, plate glass, glazing,
truck doors, doors, all door hardware, interior of the Premises, interior
walls
and partitions, and the electrical, plumbing, heating and air-conditioning
systems in good and sanitary order, condition and repair.
Lessee
shall, at all times during the Lease term, have in effect a service contract
for
the maintenance of the heating, ventilating and air-conditioning (HVAC)
equipment with a HVAC repair and -maintenance contractor approved by Lessor
which provides for periodic inspection and servicing at least once every
three
(3) months during the term hereof and shall provide Lessor with a copy of
such
contra and all periodic service reports.
Should
Lessee fail to maintain the Premises or make repairs required of Lessee
hereunder forthwith upon notice from Lessor, Lessor, in addition to all other
remedies available hereunder or by law, and without waiving any alternative
remedies, may make the same, and in that event, Lessee shall reimburse Lessor
as
additional rent for the reasonable cost of such maintenance or repairs on
the
next date upon which rent becomes due.
Lessee
hereby expressly waives the provisions of Sub-section 1 of Section 1932,
and
Sections 1941 and 1942 of the Civil Code of California and all rights to
make
repairs at the expense of Lessor, as provided in Section 1942 of said Civil
Code.
13.
Outside Area. Subject to the terms and conditions
of this Lease and such rules and regulations as Lessor may from time to time
prescribe, Lessee and Lessee's employees, invitees and customers shall, in
common with other occupants of the parcel on which the Premises are located,
and
their respective employees, invitees and customers, and others entitled to
the
use thereof, have the nonexclusive right to use the access roads, parking
areas and facilities provided and designated by Lessor for the general use
and
convenience of the occupants of the parcel on which the Premises are located,
which areas and facilities are referred to herein as "Outside Area". This
right
shall terminate upon the termination of this Lease. Lessor reserves the right
from time to time to make changes in the shape, size, location, amount and
extent of the Outside Area. Lessor further reserves the right to promulgate
such
reasonable rules and regulations relating to the use of the Outside Area,
and
any part or parts thereof, as Lessor may deem appropriate for the best interest
of the occupants of the parcel. The rules and regulations shall be binding
upon
Lessee upon delivery of a copy of them to Lessee, and Lessee shall abide
by them
and cooperate in their observance. Such rules and regulations may be amended
by
Lessor from time to time, with or without advance notice, and all amendments
shall be effective upon delivery of a copy to Lessee, provided such regulation
does not interfere with Lessee's quiet enjoyment.
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Lessee
shall have the non-exclusive use of 42 parking spaces in the Outside
Area as
designated from time to time by Lessor. Lessee shall not at any time
park or
permit the parking of Lessee's trucks or other vehicles, or the trucks
or other
vehicles of others, adjacent to the loading areas so as to interfere
in any way
with the use of such areas, nor shall Lessee at any time park or permit
the
parking of Lessee's vehicles or trucks, or the vehicles or trucks of
Lessee's
suppliers or others, in any portion of the Outside Area not designated
by Lessor
for such use by Lessee. Lessee shall not abandon any inoperative vehicles
or
equipment on any portion of the Outside Area.
Lessor
shall operate, manage, maintain and repair the Outside Area in good order,
condition and repair. The manner in which the Outside Area shall be maintained
and the expenditures for such maintenance shall be at the discretion of
the
Lessor. The cost of such repair, maintenance, operation and management,
including without limitation, maintenance and repair of landscaping, irrigation
systems, paving, sidewalks, fences and lighting, shall be an Outside Area
Charge
and Lessee shall pay to Lessor its share of such costs as provided in Paragraph
14 below.
14. Outside
Area Charges. Lessee shall pay to Lessor, as additional
rent, upon demand but not more often than once each calendar month, an amount
equal to thirty-five and seven tenths(35.7%) percent of the fair and
reasonable Outside Area Charges as defined in this Lease. Lessee acknowledge
and agrees that the Outside Area Charges shall include an additional five (5%)
percent of the actual expenditures in order to compensate the Lessor for
accounting and processing services. The Outside Area Charges shall be documented
by Lessor.
15. Alterations
and Additions. Except for installations and construction of
non-structural improvements and installations costing less than
$10,000 accumulative in any given year, Lessee shall not make, or suffer to
be made, any alterations, improvements, or additions in, on or about, or to
the
Premises or any part thereof, without the prior written consent of Lessor,
and
without a valid building permit issued by the appropriate governmental
authority. Lessor retains, at his sole option, the right to perform all repairs,
alterations, improvements or additions in, or about, or to said Premises or
any
part thereof. As a condition to giving such consent, Lessor may require that
Lessee agree to remove any such alterations, improvements or additions at the
termination of this Lease, and to restore the Premises to their prior condition,
provided that Lessor informs Lessee that Lessee shall be required to remove
same at the time that Lessor grants Lessee the right to make such
alteration, improvement or addition to the premises. Any alteration,
addition, or improvement to the Premises, except movable furniture and trade
fixtures not affixed to the Premises, shall become the property of the Lessor
upon installation, and shall remain upon and be surrendered with the Premises
at
the termination of this Lease. Alterations and additions, which are not to
be
deemed as trade fixtures include heating, lighting, electrical systems,
air-conditioning, partitioning, electrical signs, carpeting or any other
installation which has become an integral part of the Premises. In the event
Lessor consents to Lessee's making any alterations, improvements or additions,
Lessee shall notify Lessor in writing at least fifteen (15) days prior to
commencing work and Lessee shall be responsible for the timely posting of
notices of non-responsibility on Lessor's behalf, providing that Lessor shall
be
responsible for executing and recording said notices and delivering the same
to
Lessee for posting, which shall remain posted until completion of the
alterations, additions, or improvements. Lessee's failure to notify Lessor
within the time period provided in the preceding sentence shall be a breach
of
this Lease.
If,
during the term hereof, any alteration, change or addition of any sort
through
all or any portion of the Premises or of the building of which the Premises
form
a part, is required by law, regulation, ordinance or order of any public
agency,
Lessee, at its sole cost and expense, shall promptly make the same. Lessee's
payment shall be determined by multiplying Lessee's prorate share of the
cost of
said improvement by a fraction the numerator of which is the number
of months remaining on the lease and the denominator of which is the
generally accepted useful life of the improvement.
16. Acceptance
of the Premises and Covenant to Surrender. By entry and
taking possession of Premises to this Lease, Lessee accepts the Premises
as
being in good and sanitary order, condition and repair and accepts Premises
in
their condition existing as of date of such entry subject to
Lessor's responsibility to nevertheless perform all of its
obligations described in Paragraph 8 and Exhibit B of this Lease
within a time mutually agreed to by both Lessee and Lessor.
Subject
to Paragraphs 17 and 18, Lessee agrees on the last day of the term hereof,
or on
sooner termination of this Lease, to surrender the Premises in substantially
the same condition as received (and as modified in accordance with
the improvements described in Exhibit B) together with all alterations,
additions and improvements which may have been made in, to or on the Premises
by
Lessor or Lessee, unto Lessor in good and sanitary order, condition and
repair,
excepting for such wear and tear as would be normal for the period of Lessee's
occupancy. Lessee, on or before the end of term or sooner termination of
this
Lease, shall remove all personal property and trade fixtures from the Premises,
and all property not so removed shall be deemed to be abandoned by Lessee.
Lessee further agrees that at the end of the term or sooner termination
of this
Lease, Lessee, at its sole expense shall have the carpets steam cleaned,
the
walls and columns painted, the floors waxed, any damaged ceiling tiles
replaced,
the windows cleaned, the drapes cleaned and any damaged doors
replaced.
If
the
Premises are not surrendered at the end of the term or sooner termination
of
this Lease, Lessee shall indemnify Lessor against loss or liability resulting
from delay by Lessee in so surrendering the Premises, including, without
limitation, any claims made by any succeeding tenant founded on such
delay.
17.
Default. In the event of any default under the
terms of this Lease by Lessee, or an abandonment of the Premises by the
Lessee,
the Lessor has the option of: (1) removing all persons and property from
the
Premises and repossessing the Premises, in which case any of the Lessee's
property which Lessor removes from the Premises may be stored in a public
warehouse or elsewhere at the cost of, and for the account of Lessor or,
(2)
allowing the Lessee to remain in full possession and control of the Premises.
If
the Lessor chooses to repossess the Premises, the Lease will automatically
terminate in accordance with the provisions of California Civil Code Section
1951.2. In the event of such termination of the Lease, Lessor may recover
from
the Lessee: (1) the worth at the time of award of unpaid rent which had
been
earned at the time of termination, including interest at the maximum rate
an
individual is permitted by law to charge; (2) the worth at the time of
award of
the amount by which the unpaid rent which would have been earned after
termination until the time of award exceeds the amount of such rental loss
that
the Lessee proves could have been reasonably avoided, including interest
at the
maximum rate an individual is permitted by law to charge; (3) the worth
at the
time of award of the amount by which the unpaid rent for the balance of
the term
after the time of award exceeds the amount of such rental loss that the
Lessee
proves could be reasonably avoided; and (4) any other amount necessary
to
compensate the Lessor for all the detriment proximately caused by the Lessee's
failure to perform his obligations under the Lease or which, in the ordinary
course of things, would be likely to result therefrom. "The worth at the
time of
the award", as used in (1) and (2) of this paragraph is to be computed
by
allowing interest at the maximum rate an individual is permitted by law
to
charge. "The worth at the time of the award", as referred to in (3) of
this
paragraph is to be computed by discounting the amount at the discount rate
of
the Federal Reserve Bank of San Francisco at the time of the award, plus
one
(1%) percent.
5
If
Lessor
chooses not to repossess the Premises, but allows the Lessee to remain in
full
possession and control of the Premises, then in accordance with provisions
of
California Civil Code Section 1951.4, the Lessor may treat the Lease as being
in
full force and effect, and may collect from the Lessee all rents as they
become
due through the termination date of the Lease, as specified in the Lea For
the
purpose of this paragraph, the following do not constitute a termination
of
Lessee's right to possession:
|
a)
|
Acts
of maintenance or preservation, or efforts torelet
the property.
|
|
b)
|
The
appointment of a receiver on the initiative of theLessor to protect
his
interest under this Lease.
|
Lessee
shall be liable immediately to Lessor for all costs Lessor incurs in reletting
the Premises, including, without limitation, brokers' commissions, expense
of
remodeling the Premises required by the reletting, and like costs. Reletting
can
be for a period shorter or longer than the remaining term of this Lease. Lessee
shall pay to Lessor the rent due under this Lease on the dates the rent is
due,
less the rent the Lessor receives from any reletting. No act by Lessor allowed
by this Section shall terminate this Lease unless Lessor notifies Lessee that
Lessor elects to terminate this Lease. After Lessee's default, and for as long
as Lessor does not terminate Lessee's right to possession of the Premises,
if
Lessee obtains Lessor's consent, Lessee shall have the right to assign or sublet
its interest in this Lease, but Lessee shall not be released from liability.
Lessor's consent to proposed assignment or subletting shall not be unreasonably
withheld.
If
Lessor
elects to relet the Premises as provided in this Paragraph, rent that Lessor
receives from reletting shall be applied to the payment of
First,
any indebtedness from Lessee to Lessor other than rent due from
Lessee;
Second,
all costs, including for maintenance, reasonably incurred by Lessor in
reletting;
Third,
rent due and unpaid under this Lease. After deducting payment referred to
in
this Paragraph, any sum remaining from rent Lessor receives from reletting
shall
be applied in payment of future rent as rent becomes due under this Lease.
If on
the date rent is due under this Lease, the rent received from reletting is
less
than the rent due on that date, Lessee shall pay to Lessor, in addition to
remaining rent due, all costs, including for maintenance, Lessor incurred
in
reletting that remain after applying rent received from the reletting, as
provided in this paragraph.
Lessor
at
any time after Lessee commits a default can cure the default at Lessee's
cost.
If Lessor at any time, by reason of Lessee's default, pays any sum or does
any
act that requires the payment of any sum, the reasonable sum paid by Lessor
shall be due immediately from Lessee to Lessor at the time the sum is paid,
and
if paid at a later date shall bear interest at the maximum rate an individual
is
permitted by law to charge from the date the sum is paid by Lessor until
Lessor
is reimbursed by Lessee. The sum, together with interest on it, shall be
additional rent.
Rent
not
paid within five (5) business days after becoming due shall bear interest
at the maximum rate an individual is permitted by law to charge from the
date
due until paid.
18.
Damage or Destruction.
(a)
Uninsured Minor Casualty. In the event that any
portion of the Premises are destroyed or damaged by an uninsured peril, Lessor
or Lessee may, upon written notice to the other, given within thirty (30)
days
after the occurrence of such damage or destruction, elect to terminate this
Lease; provided, however, that either party may, within thirty (30) days
after
receipt of such notice, elect to make any required repairs and/or restoration
at
such party's sole cost and expense, in which event this Lease shall remain
in
full force and effect, and the party having made such election to restore
or
repair shall thereafter diligently proceed with such repairs and/or
restoration.
(b)
Insured Major Casualty. In the event the Premises
are damaged or destroyed from any insured peril to the extent of thirty-three
(33%) percent or more of the then replacement cost of the Premises Lessor
may,
upon written notice to Lessee, given within thirty (30) days after the
occurrence of such damage or destruction, elect to terminate this Lease.
If
Lessor does not give such notice in writing within such period, Lessor shall
be
deemed to have elected to rebuild or restore the Premises, in which event
Lessor
shall, at its expense, promptly rebuild or restore the Premises to their
condition prior to the damage or destruction and Lessee shall pay to Lessor
upon
commencement of reconstruction the amount of any deductible from the insurance
policy.
(c) Insured
Minor Casualty. In the event the Premises are damaged or
destroyed from any insured peril to the extent of less than thirty-three
(33%)
percent of the then replacement cost of the Premises, Lessor shall, at Lessor's
expense, promptly rebuild or restore the Premises to their condition prior
to
the damage or destruction and Lessee shall pay to Lessor upon commencement
of
reconstruction the amount of any deductible from the insurance
policy.
6
In
the
event that, pursuant to the foregoing provisions, Lessor is to rebuild or
restore the Premises, Lessor shall, within thirty (30) days after the occurrence
of such damage or destruction, provide Lessee with written notice of the time
required for such repair or restoration. If such period is longer than two
hundred seventy (270) days from the issuance of a building permit, Lessee may,
within thirty (30) days of receipt of Lessor's notice, elect to terminate the
Lease by giving written notice to Lessor of such election, whereupon the Lease
shall immediately terminate. The period of time for Lessor to complete the
repair or restoration shall be extended for delays caused by the fault or
neglect of Lessee or because of acts of God, acts of stormy weather, inability
to obtain materials, supplies or fuels, acts of contractors or subcontractors,
or delay of contractors or subcontractors due to such causes or other
contingencies beyond the control of Lessor. Lessor's obligation to repair or
restore the Premises shall not include restoration of Lessee's trade fixtures,
equipment, merchandise, or any improvements, alterations or additions made
by
Lessee to the Premises.
Unless
this Lease is terminated pursuant to the foregoing provisions, this Lease shall
remain in full force and effect; provided, however, that during any period
of
repairs or restoration, rent and all other amounts to be paid by Lessee on
account of the Premises and this Lease shall be abated in proportion to the
area
of the Premises rendered not reasonably suitable for the conduct of Lessee's
business thereon. Lessee hereby expressly waives the provisions of Section
1932,
Subdivision 2 and Section 1933, Subdivision 4 of the California Civil
Code.
19.
Condemnation. If any part of the Premises
shall be taken for any public or quasi-public us under any statute or by right
of eminent domain, or private purchase in lieu thereof, and a part thereof
remains, which is susceptible of occupation and use hereunder, this Lease,
shall, as to the part so taken, terminate as of the date title shall vest in
the
condemner or purchase, and the rent payable hereunder shall be adjusted so
that
the Lessee shall be required to pay for the remainder of the term only such
portion of such rent as the value of the part remaining after such taking bears
to the value of the entire Premises prior to such taking. Lessor and Lessee
shall have the option to terminate this Lease in the event that such taking
causes a reduction in rent payable hereunder by fifty (50%) percent or more.
If
all of the Premises or such part thereof be taken so that there does not remain
a portion susceptible for occupation and use hereunder, as reasonably necessary
for Lessee's conduct of its business as contemplated in this Lease, this Lease
shall thereupon terminate. If a part or all of the Premises be taken, all
compensation awarded upon such taking shall go to the Lessor, and the Lessee
shall have no claim thereto and the Lessee hereby irrevocably assigns and
transfers to the Lessor any right to compensation or damages to which the Lessee
may become entitled during the term hereof by reason of the purchase or
condemnation of all or a part of the Premises.
If
this
Lease is terminated by either Lessor or Lessee pursuant to this Paragraph 18,
Lessor shall receive (and Lessee shall assign to Lessor upon demand from Lessor)
any and all income, rent, award or interest thereon which may be paid or owed
in
connection with the exercise of such power of eminent domain or conveyance
in
lieu thereof and Lessee shall have no claim against Lessor except that Lessee
shall have the right to recover its share of any award or consideration for
(a)
moving expenses; (b) loss or damage to Lessee's trade fixtures, furnishings,
equipment and other personal property; and (c) business goodwill.
20. Free
from Liens. Lessee shall (1) pay for all labor and services
performed and for materials used by or furnished to Lessee, or any contractor
employed by Lessee with respect to the Premises, and (2) indemnify, defend
and
hold Lessor and the Premises harmless and free from any liens, claims, demands,
encumbrances or judgments created or suffered by reason of any labor or services
performed for materials used by or furnished to Lessee or any contractor
employed by Lessee with respect to the Premises and (3) give notice to Lessor
in
writing five (5) days prior to employing any laborer or contractor to perform
services related, or receiving materials for use upon the Premises, and (4)
shall post, on behalf of Lessor, a notice of non-responsibility in accordance
with the statutory requirements of California Civil Code Section 3094, or any
amendment thereof, provided that Lessor shall be responsible for executing
and
recording such notices. In the event an improvement bond with a public agency
in
connection with the above is required to be posted, Lessee agrees to include
Lessor as an additional obligee.
21. Compliance
with Laws, Subject to the provisions of Paragraph 14 above,
Lessee shall, at its own cost, comply with and observe all requirements of
all
municipal, county, state and federal authority now in force, or which may
hereafter be in force, pertaining to the use and occupancy of the
Premises.
22.
Subordination. Lessee agrees that this
Lease shall, at the option of Lessor, be subjected an subordinated to any
mortgage, deed of trust, or other instrument of security, which has been
or
shall be placed and this subordination is hereby made effective without any
further act of Lessee or Lessor. The Lessee shall, at any time hereinafter,
on
demand, execute any instruments, releases or other documents that may be
required by any mortgage, mortgagor, or trustor or beneficiary under any
deed of
trust or other instrument of security. If Lessee fails to execute and deliver
any such documents or instruments, Lessee irrevocably constitutes and appoints
Lessor as Lessee's special attorney-in-fact to execute and deliver any such
documents or instruments.
However,
the provisions of this Paragraph 21 shall not be effective with respect to
the
interest of any successor to Lessor unless and until such successor shall
have
delivered to Lessee a written non-disturbance agreement for the benefit of
Lessee, to the effect that this Lease shall not be terminated in the event
of
any default under any ground lease or underlying lease or any foreclosure
or
sale pursuant to the terms of any mortgage or deed of trust, so long as Lessee
is not in default (after the expiration of all applicable cure periods) under
the terms of this Lease, and Lessee agrees to attorn to and become the Lessee
of
Lessor's successor. In addition, Lessor shall use its best efforts to obtain
such a written non-disturbance agreement from all existing lien holders having
an interest in the Premises. So long as Lessee pays all rentals required
hereunder and observes and performs all of the covenants, conditions and
provisions on Lessee's part to be observed and performed hereunder, Lessee
shall
have quiet possession of the Premises for the entire Lease term, subject
to all
the provisions of this Lease.
23. Abandonment.
Lessee shall not vacate nor abandon the Premises at any time during the
term. If Lessee shall abandon, vacate or surrender said Premises, or be
dispossessed by process of law, or otherwise, any personal property belonging
to
Lessee and left on the Premises shall be deemed to be abandoned at the option
of
Lessor, except such property as may be mortgaged to Lessor; provided, however,
that Lessee shall not be deemed to have abandoned or vacated the Premises
so
long as Lessee continues to pay all rents as and when due and otherwise pursuant
to terms and conditions of the Lease.
24. Assignment
and Subletting. Lessee's interest in this Lease is not
assignable by operation of law or otherwise nor shall Lessee have the right
to
sublet the Premises, transfer any interest of Lessee's therein or permit
any use
of the Premises by another party, without prior written consent of Lessor
to
such assignment, subletting or transfer of use, which consent shall not be
unreasonably conditioned or delayed or withheld.
7
If
Lessee
is a partnership: a withdrawal or change, voluntary, involuntary or by operation
of law of any partner(s) owning fifty (50%) percent or more of the partnership,
or the dissolution of the partnership, shall be deemed a voluntary
assignment.
If
Lessee
consists of more than one person, a purported assignment, voluntary, involuntary
or by operation of law, from one person to the other or from a majority of
persons to the others, shall be deemed a voluntary assignment.
If
Lessee
is a corporation, any dissolution, merger, consolidation, or other
reorganization of Lessee, or the sale or other transfer of a controlling
percentage of capital stock of Lessee, or sale of at least fifty-one (51%)
percent of the value of assets of Lessee, shall be deemed a voluntary
assignment. The phrase, "controlling percentage" means ownership of and right
to
vote, stock possessing at least fifty-one (51 %) percent of the total combined
voting power of all classes of Lessee's capital stock issued, outstanding,
and
entitled to vote for election of directors. This Paragraph shall not apply
to
corporation the stock of which is traded through an exchange or over the
counter.
Lessor's
prior consent shall not be required for any assignment, sublease or other
transfer of Lessee's interest in the Premises or this to any corporation with
which Lessee may merge or consolidate or become affiliated as a parent,
subsidiary, holding company or otherwise, or to an entity in which Lessee has
a
controlling interest, provided that any such transfer shall not result in
Lessee's being released or discharged from any liability under this Lease and
such assignee has equal or greater financial strength. Sublessee or transferee
shall, prior to taking possession of the Premises, deliver to Lessor written
notice of the transfer and its terms, covenants, conditions and provisions
of
the Lease, including without limitation the provisions regarding the use of
the
Premises.
In
the
event of any such subletting or transfer which is consented to, or not consented
to, by Lessor, a sublessee agrees to pay monies or other consideration whether
by increased rent or otherwise, in excess of or in addition to those provided
for herein, then all such excess or additional monies or other consideration
shall be paid solely to Lessor after first subtracting Lessee's direct cost
of reasonable market real estate fees, attorney's fee and tenant
improvements incurred as a result of said subletting or transfer, and
this shall be one of the conditions to obtaining Lessor's
consent.
Lessee
immediately and irrevocably assigns to Lessor, as security for Lessee's
obligations under this Lease, all rent from any subletting of all or part of
the
Premises as permitted by this Lease, and Lessor, as assignee and as
attorney-in-fact for Lessee, or a receiver for Lessee appointed on Lessor's
application, may collect such rent and apply it toward Lessee's obligations
under this Lease; except that until the occurrence of an act of default by
the
Lessee, Lessee shall have the right to collect such rent.
A
consent
to or assignment, subletting, occupation or use by another party shall not
be
deemed to be a consent to any subsequent assignment, subletting, occupation
or
use by another party. Any assignment or subletting without such consent shall
be
void and shall at the option of Lessor, terminate this Lease. Lessor's waiver
or
consent to any assignment or subletting hereunder shall not relieve Lessee
from
any obligation under this Lease unless the consent shall so provide. If Lessee
requests Lessor to consent to a proposed assignment or subletting, Lessee shall
pay to Lessor, whether or not consent is ultimately given, Lessor's reasonable
attorney's fees incurred in conjunction with each such request.
8
Notwithstanding
the forgoing, Lessor consents to Lessee subletting to ALCIS
Corporation.
25. Parking
Charges. Lessee agrees to pay upon demand, based on its
percent of occupancy of the entire building, its pro-rata share of any parking
charge, surcharges, or any other cost hereafter levied or assessed by local,
state or federal governmental agencies in connection with the use of parking
facilities serving the Premises including without limitation, parking surcharges
imposed by or under authority of the Federal Environmental Protection
Agency.
26. Insolvency
on Bankruptcy. Either (a) the appointment of a receiver to
take possession of all or substantially all of the assets of Lessee, or (b)
a
general assignment by Lessee for the benefit of creditors or (c) any action
taken or suffered by Lessee under any insolvency or bankruptcy act shall
constitute a breach of this Lease. Upon the happening of any such event, this
Lease shall terminate ten (10) days after written notice of termination from
Lessor to Lessee. This section is to be applied consistent with applicable
state
and federal law in effect at the time such event occurs.
Any
action referred to above which is suffered involuntarily by Lessee shall not
constitute an unauthorized assignment or transfer or a breach of this Lease
by
Lessee if Lessee shall successfully dismiss any action or proceeding in
connection therewith within sixty (60) days of the filing thereof. In such
event, Lessor shall not be entitled to exercise its remedies described in said
Section until the expiration of such sixty (60)-day period, provided that Lessee
shall diligently pursue such dismissal.
27. Lessor
Loan or Sale. Lessee agrees promptly following request by
Lessor to (a) execute and deliver to Lessor any documents including estoppel
certificates presented to Lessee by Lessor, (i) certifying that this Lease
is
unmodified and in full force and effect, or if modified, stating the nature
of
such modification and certifying that this Lease, as so modified, is in full
force and effect and the date to which the rent and other charges are paid
in
advance, and (ii) acknowledging that there are not, to Lessee's knowledge,
any
uncured defaults on the part of Lessor hereunder, and (iii) evidencing the
status of the Lease as may be required by either a lender making a loan to
Lessor, to be secured by deed of trust or mortgage covering the Premises, or
a
purchaser of the Premises from Lessor and (b) if requested by any bona fide
lender of Lessor or purchaser of the Premises, to deliver to Lessor current
financial statements of Lessee, including a balance sheet and profit and loss
statement for the current fiscal year and the two (2) immediately prior fiscal
years, all prepared in accordance with generally accepted accounting principles
consistently applied. Lessee's failure to deliver an estoppel certificate within
ten (10) days following such request shall constitute a default under this
Lease
and shall be conclusive upon Lessee that this Lease is in full force and effect
and has not been modified except as may be represented by Lessor. If Lessee
fails to deliver the estoppel certificate within ten (10) days, Lessee
irrevocably constitutes and appoints Lessor as its special attorney-in-fact
to
execute and deliver the certificate to any third party.
28. Surrender
of Lease. The voluntary or other surrender of this Lease by
Lessee, or a mutual cancellation thereof, shall not work a merger nor relieve
Lessee of any of Lessee's obligations under this Lease, and shall, at the option
of Lessor, terminate all or any existing subleases or subtenancies, or may,
at
the option of Lessor, operate as an assignment to him of any or all such
subleases or subtenancies.
29. Attorneys'
Fees. If for any reason, any suit be initiated to enforce
any provisions of this Lease, the prevailing party shall be entitled to
legal
costs, expert witness expenses and reasonable attorneys' fees as fixed
by the
court.
30. Notices.
All notices to be given to Lessee may be given in writing personally or
by
depositing the same in the United States mail, postage prepaid, and addressed
to
Lessee at the said Premises. Any notice or document required or permitted
by
this Lease to be given Lessor shall be addressed to Lessor at the address
set
forth below, or at such other address as it may have theretofore specified
by
notice delivered in accordance herewith:
LESSOR: Vasona
Business Park
000
Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx
Xxxxx,
Xxxxxxxxxx 00000
LESSEE: Procera
Networks
000X
Xxxxxx Xx.
Xxx
Xxxxx,
Xxxxxxxxxx 00000
9
29. Attorneys'
Fees. If for any reason, any suit be initiated to enforce
any provisions of this Lease, the prevailing party shall be entitled to legal
costs, expert witness expenses and reasonable attorneys' fees as fixed by the
court.
30. Notices.
All notices to be given to Lessee may be given in writing personally or by
depositing the same in the United States mail, postage prepaid, and addressed
to
Lessee at the said Premises. Any notice or document required or permitted by
this Lease to be given Lessor shall be addressed to Lessor at the address set
forth below, or at such other address as it may have theretofore specified
by
notice delivered in accordance herewith:
LESSOR: Vasona
Business Park
000
Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx
Xxxxx,
Xxxxxxxxxx 00000
LESSEE: Procera
Networks
000X
Xxxxxx Xx.
Xxx
Xxxxx,
Xxxxxxxxxx 00000
31.
Transfer of Security. If any security be
given by Lessee to secure the faithful performance of all or any of the
covenants of this Lease on the part of Lessee, Lessor may transfer and/or
deliver the security, as such, to the purchaser of the reversion in the
event
that the reversion be sold, and thereupon Lessor shall be discharged from
any
further liability in reference thereto, upon the assumption by such transferee
of Lessor's obligations under this Lease.
32. Waiver.
The waiver by Lessor or Lessee of any breach of any term, covenant
or
condition herein contained shall not be deemed to be a waiver of such term,
covenant or condition or any subsequent breach of the same or any other
term,
covenant or condition herein contained. The subsequent acceptance of rent
hereunder by Lessor shall not be deemed to be a waiver of any preceding
breach
by Lessee of any term, covenant or condition of this Lease, other than
the
failure of Lessee to pay the particular rental so accepted, regardless
of
Lessor's knowledge of such preceding breach at the time of acceptance of
such
rent.
33. Holding
Over. Any holding over after the expiration of the term
or any extension thereof, with the consent of Lessor, shall be construed
to be a
tenancy from month-to-month, at a rental of one and one-half times the
previous
month's rental rate per month, and shall otherwise be on the terms and
conditions herein specified, so far as applicable.
34. Limitation
on Lessor's Liability. If Lessor is in default of this
Lease, and as a consequence essee recovers a money judgment against Lessor,
the
judgment shall be satisfied only out of the proceeds of sale received on
execution of the judgment and levy against the right, title and interest
of
Lessor in the Premises, or in the building, other improvements and land
of which
the Premises are part, and out of rent or other income from such real property
receivable by Lessor or out of the consideration received by Lessor from
the
sale or other disposition of all or any part of Lessor's right, title and
interest in the Premises or in the building, other improvement and land
of which
the Premises are part. Neither Lessor nor any of the partners comprising
the
partnership designated as Lessor shall be personally liable for any
deficiency.
35.
Stock Warrants: As consideration for entering
into this lease, Tenant agrees to xxxxx Xxxxxx 25,000 warrants of its company
stock at a strike price equal to the prevailing market price as of the
effective
date of this lease.
36.
Furniture and Equipment. The existing
cubicles shall be included in the leased premises. The cubicles are for
Lessees
use only. The ownership of the cubicles is to remain with Lessor.
37.
Miscellaneous.
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a)
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Time
is of the essence of this Lease, and of each and all of its
provisions.
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b)
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The
term "Building" shall mean the building in which the Premises
are
situated.
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c)
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If
the Building is leased to more than one tenant, then each such
tenant, its
agents, officers, employees and invitees, shall have the non-exclusive
right (in conjunction with the use of the part of the building
leased to
such tenant) to make reasonable use of any driveways, sidewalks
and
parking areas located on the parcel of land
on which the Building is situated, except such parking areas
as may from
time to time be leased for exclusive use by other
tenant(s).
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10
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d)
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Lessee's
such reasonable use of parking areas shall not exceed that percent
of the
total parking areas which is equal to the ratio which floor space
of the
Premises bears to floor space of the
Building.
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e)
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The
term "assign" shall include the
"transfer".
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f)
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The
invalidity or unenforceability of any provision of this Lease shall
not
affect the validity or enforceability of the remainder of this
Lease.
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g)
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All
parties hereto have equally participated in the preparation of
this
Lease.
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h)
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The
headings and titles to the paragraphs of this Lease are not a part
of this
Lease and shall have no effect upon the construction or interpretation
of
any part thereof.
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i)
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Lessor
has made no representation(s) whatsoever to Lessee (express or
implied)
except as may be expressly stated in writing, signed by all of
the parties
hereto or their respective successors in
interest.
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j)
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This
instrument contains all of the agreements and conditions made between
the
parties hereto, and may not be modified orally or in any other
manner than
by agreement in writing, signed by all of the parties hereto or
their
respective successors in interest.
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k)
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It
is understood and agreed that the remedies herein given to Lessor
shall be
cumulative, and the exercise of any one remedy by Lessor shall
not be to
the exclusion of any other remedy.
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I)
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The
covenants and conditions herein contained shall, subject to the
provisions
as to assignment, apply to and bind the heirs, successors, executors,
administrators and assigns of all of the parties hereto; and all
of the
parties hereto shall jointly and severally be liable
hereunder.
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m)
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This
Lease has been negotiated by the parties hereto and the language
hereof
shall not be construed for or against either
party.
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n)
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All
exhibits to which reference is made are deemed incorporated into
his
Lease, whether or not actually
attached.
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11
IN
WITNESS HEREOF, Lessor and Lessee have executed this
Lease on the date first above written.
LESSOR;
Vasona Business
Park LESSEE: Procera
Networks
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BY:
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/s/
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BY:
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/s/
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Date:
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May
4, 2005
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Date:
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May
3, 2005
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By:
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/s/
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|||
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Date:
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May
4, 2005
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|||
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By:
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/s/
|
Date:
May
4, 2005
12
