EXHIBIT 10.17
LEASE AGREEMENT
between
SEAPORT CENTRE ASSOCIATES, LLC
as "Landlord"
and
PERCLOSE, INC.
as "Tenant"
TABLE OF CONTENTS
SECTION PAGE
1. PREMISES........................................................4
2. TERM; POSSESSION................................................4
3. RENT ...........................................................5
4. SECURITY DEPOSIT................................................9
5. USE AND COMPLIANCE WITH LAWS....................................9
6. TENANT IMPROVEMENTS & ALTERATIONS..............................12
7. MAINTENANCE AND REPAIRS........................................14
8. TENANT'S TAXES.................................................15
9. UTILITIES......................................................16
10. EXCULPATION AND INDEMNIFICATION...............................17
11. INSURANCE.....................................................18
12. DAMAGE OR DESTRUCTION.........................................20
13. CONDEMNATION..................................................22
14. ASSIGNMENT AND SUBLETTING.....................................23
15. DEFAULT AND REMEDIES..........................................27
16. LATE CHARGE AND INTEREST......................................29
17. WAIVER........................................................29
18. ENTRY, INSPECTION AND CLOSURE.................................29
19. SURRENDER AND HOLDING OVER....................................30
20. ENCUMBRANCES..................................................31
21. ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS................32
22. NOTICES.......................................................32
23. ATTORNEYS' FEES...............................................33
24. QUIET POSSESSION..............................................33
25. SECURITY MEASURES.............................................33
26. FORCE MAJEURE.................................................33
27. RULES AND REGULATIONS.........................................33
28. LANDLORD'S LIABILITY..........................................34
29. CONSENTS AND APPROVALS........................................34
30. BROKERS.......................................................34
31. RELOCATION OF PREMISES........................................35
32. ENTIRE AGREEMENT..............................................35
33. MISCELLANEOUS.................................................35
34. AUTHORITY.....................................................35
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INDEX OF DEFINED TERMS
Additional Rent.....................................7
Alterations........................................12
Award..............................................22
Broker.............................................35
Building............................................4
Building Rules.....................................34
Building Systems...................................10
Claims.............................................18
Commencement Date...................................4
Condemnation.......................................22
Condemnor..........................................22
Controls...........................................16
Date of Condemnation...............................22
Development.........................................4
Encumbrance........................................31
Environmental Losses...............................11
Environmental Requirements.........................10
Event of Default...................................27
Expiration Date.....................................4
Handled by Tenant..................................10
Handling by Tenant.................................10
Hazardous Materials................................10
HVAC...............................................10
Interest Rate......................................29
Laws................................................5
MEP Systems........................................14
Mortgagee..........................................32
Operating Costs.....................................5
Parking Facility....................................4
Permitted Hazardous Materials......................11
Premises............................................4
Project.............................................4
Property............................................4
Property Manager...................................19
Proposed Transferee................................24
Rent................................................9
Rental Tax.........................................16
Representatives....................................10
Scheduled Commencement Date.........................4
Security Deposit....................................9
Taxes...............................................7
Tenant's Share......................................7
Tenant's Taxes.....................................16
Tenant Improvements................................12
Term................................................4
Trade Fixtures.....................................14
Transfer...........................................24
Transferee.........................................25
Visitors...........................................10
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BASIC LEASE INFORMATION
THE EFFECTIVENESS OF THIS LEASE IS CONDITIONED UPON LANDLORD
OBTAINING POSSESSION OF THE PREMISES FROM AN EXISTING TENANT AND
DELIVERING POSSESSION OF THE INITIAL PREMISES TO TENANT IN ACCORDANCE
WITH THE PROVISIONS OF SECTION 2 OF THIS LEASE
Lease Date: For identification purposes only, the date
of this Lease is June 24, 1998
Landlord: SEAPORT CENTRE ASSOCIATES, LLC, a California
limited liability company
Tenant: PERCLOSE, INC., a Delaware corporation
Project: Seaport Centre Phase Three (West)
Development: Seaport Centre Phases One, Two and Three,
consisting of 26 buildings, the
underlying land and associated land.
Building Addresses: Building 25: 000 Xxxxxxx
Xxxxxxxx 26: 300 Saginaw
Rentable Area of Buildings: Building 25:Approximately 60,841 square feet
Building 26:Approximately 19,483 square feet
Total Buildings 25 & 26:Approximately 80,324
square feet
Rentable Area of Project: Approximately 287,402 square feet
Premises (consisting of two (a) Building Number: 25
buildings): Rentable Area:Approximately 60,841
square feet
(b) Building Number: 26
Rentable Area:Approximately 19,483 square
feet
Term: 120 full calendar months (plus any partial
month at the beginning of the Term)
Scheduled Commencement Date: August 1, 1998
Expiration Date: The last day of the 120th full calendar month
in the Term
Base Rent: Building 25:
Months 1 - 12: $127,766.10 per month
(based upon a monthly rate of $2.10
per square foot of rentable area in
Xxxxxxxx 00, XXX).
Building 26:
Months 1 - 12: $44,810.90 per month
(based upon a monthly rate of $2.30
per square foot of rentable area in
Xxxxxxxx 00, XXX).
Total Base Rent for Buildings 25 and 26
combined:
Months 1 - 12: $172,577.00 per month, NNN.
THE TOTAL BASE RENT FOR BUILDINGS
25 AND 26 COMBINED SHALL INCREASE ON EACH
ANNIVERSARY OF THE COMMENCEMENT DATE
PURSUANT TO THE PROVISIONS OF SECTION 35 OF
THIS LEASE.
Maintenance, Operating Costs This is a "triple net lease" where Tenant is
responsible for maintenance, and Taxes:
operating costs and taxes, all in accordance
with the applicable provisions of the Lease.
Tenant's Share: 27.95%
Security Deposit: (a) Cash of $517,731.00, plus
(b) a Letter of Credit in the amount of
$1,000,000.00, subject to, and in
accordance with, the provisions of
Section 36 of this Lease.
Landlord's Address for Payment Seaport Centre Associates, LLC
of Rent: Xxx Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Landlord's Address Seaport Centre Associates, LLC
for Notices: c/o Xxxxxxx Xxxxxx & Associates
Xxx Xxxxxxx Xxxxxxxxx, #000
Xxx Xxxx, XX 00000
with a copy to:
Seaport Centre Associates, LLC
c/o Xxxxxxx Xxxxxx & Associates
0000 Xxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Attn: General Counsel
Tenant's Address 400 Saginaw
for Notices: Xxxxxxx Xxxx, XX 00000
Broker(s): BT Commercial and Cornish & Xxxxx
Guarantor(s): (none)
Property Manager: Xxxxxxx Xxxxxx & Associates
Additional Provisions: 35. Annual Cost Of Living Adjustments to
Base Rent.
36. Letter Of Credit.
37. Parking.
38. Right Of First Offer.
39. Extension Option.
40. Landlord's Improvements
Exhibits:
Exhibit A:........ The Premises
Exhibit B:........ Construction Rider
Exhibit C:........ Building Rules
Exhibit D:........ Additional Provisions
The Basic Lease Information set forth above is part of the Lease. In
the event of any conflict between any provision in the Basic Lease Information
and the Lease, the Lease shall control.
THIS LEASE is made as of the Lease Date set forth in the Basic Lease
Information, by and between the Landlord identified in the Basic Lease
Information ("Landlord"), and the Tenant identified in the Basic Lease
Information ("Tenant"). Landlord and Tenant hereby agree as follows:
1. PREMISES. Landlord hereby leases to Tenant, and Tenant hereby leases
from Landlord, upon the terms and subject to the conditions of this Lease, and
subject to covenants, conditions and restrictions recorded in the real estate
records in the county in which the Property is located, the space identified in
the Basic Lease Information as the Premises (the "Premises"), in the Building
located at the address specified in the Basic Lease Information (the
"Building"). The approximate configuration and location of the Premises is shown
on Exhibit A. Landlord and Tenant agree that the rentable area of the Premises
for all purposes under this Lease shall be the Rentable Area specified in the
Basic Lease Information. The Building, together with the parking facilities
serving the Building (the "Parking Facility"), and the parcel(s) of land on
which the Building and the Parking Facility are situated (collectively, the
"Property"), is part of the Project identified in the Basic Lease Information
(the "Project"), which is part of the Development identified in the Basic Lease
Information (the "Development").
2. TERM; POSSESSION. The term of this Lease (the "Term") shall commence
on the Commencement Date as described below and, unless sooner terminated, shall
expire on the Expiration Date set forth in the Basic Lease Information (the
"Expiration Date"). The "Commencement Date" shall be the earlier of (a) thirty
(30) days after the date on which Landlord tenders possession of the Premises to
Tenant by written notice (after the Existing Tenant has vacated the Premises
upon complete execution of a termination agreement with the Existing Tenant
pursuant to the provisions of the next succeeding paragraph); or (b) the date
upon which Tenant, with Landlord's written permission, actually occupies and
conducts business in any portion of the Premises. The parties anticipate that
the Commencement Date will occur on or about the Scheduled Commencement Date set
forth in the Basic Lease Information (the "Scheduled Commencement Date");
provided, however, that Landlord shall not be liable for any claims, damages or
liabilities if the Premises are not ready for occupancy by the Scheduled
Commencement Date. When the Commencement Date has been established, Landlord and
Tenant shall at the request of either party confirm the Commencement Date and
Expiration Date in writing.
Tenant understands and agrees that the Premises are currently leased by another
tenant (the "Existing Tenant"). Landlord agrees to use its good faith efforts to
negotiate a termination of lease with the Existing Tenant and to regain
possession of the Premises from the Existing Tenant by June 22, 1998, and
deliver possession of the Premises to Tenant on July 15, 1998. Notwithstanding
any provision contained herein to the contrary, Landlord shall not be obligated
to pay any consideration to the Existing Tenant in order to gain possession of
the Premises. After Landlord and Tenant have completely executed this Lease,
then upon the later of (a) the complete execution of a lease termination
agreement by Landlord and the Existing Tenant, or (b) June 15, 1998, Tenant
shall have access to the Premises for inspection of the Premises, subject to the
terms of this Lease, including Tenant delivering to Landlord evidence of
insurance required under this Lease, except that Tenant shall not be permitted
to commence construction of Tenant Improvements in the Premises prior to the
Commencement Date. Notwithstanding the foregoing, if Landlord has not delivered
possession of the Premises to Tenant by October 14, 1998, Tenant shall have the
right to terminate this Lease by written notice to Landlord, and upon any such
termination by Tenant, Landlord promptly shall return to Tenant (i) all sums
paid by Tenant to Landlord under this Lease and (ii) the Letter of Credit issued
in favor of Landlord in connection with this Lease.
3. RENT.
3.1 Base Rent. Tenant agrees to pay to Landlord the Base Rent set forth
in the Basic Lease Information, without prior notice or demand, on the first day
of each and every calendar month during the Term, except that Base Rent for the
first full calendar month in which Base Rent is payable shall be paid upon
Tenant's execution of this Lease and Base Rent for any partial month at the
beginning of the Term shall be paid on the Commencement Date. Base Rent for any
partial month at the beginning or end of the Term shall be prorated based on the
actual number of days in the month.
If the Basic Lease Information provides for any change in Base Rent by
reference to years or months (without specifying particular dates), the change
will take effect on the applicable annual or monthly anniversary of the
Commencement Date (which won't necessarily be the first day of a calendar
month).
3.2 Additional Rent: Operating Costs and Taxes.
(a) Definitions.
(1) "Operating Costs" means all costs of managing,
operating, maintaining and repairing the Project, including all costs,
expenditures, fees and charges for: (A) operation, maintenance and repair of the
Project (including maintenance, repair and replacement of glass, the roof
covering or membrane, and landscaping); (B) utilities and services (including
telecommunications facilities and equipment, recycling programs and trash
removal), and associated supplies and materials; (C) compensation (including
employment taxes and fringe benefits) for persons (at or below the level
equivalent to senior property manager or senior engineering manager) who perform
duties in connection with the operation, management, maintenance and repair of
the Project, such compensation to be appropriately allocated for persons who
also perform duties unrelated to the Project; (D) property (including coverage
for earthquake and flood if carried by Landlord), liability, rental income and
other insurance relating to the Project, and expenditures for deductible amounts
paid under such insurance; (E) licenses, permits and inspections except when
incurred in connection with licenses, permits and inspections associated with
improving space in the Project for any tenants (including Tenant); (F) complying
with the requirements of any law, statute, ordinance or governmental rule or
regulation or any orders pursuant thereto (collectively "Laws"); (G)
amortization of capital replacements, repairs or improvements to the Project
(including those capital replacements, repairs or improvements to the Project in
order to comply with Laws),with interest on the unamortized balance at the rate
paid by Landlord on funds borrowed to finance such capital improvements (or, if
Landlord finances such improvements out of Landlord's funds without borrowing,
the rate that Landlord would have paid to borrow such funds, as reasonably
determined by Landlord), over such useful life as Landlord shall reasonably
determine in accordance with generally accepted accounting principles; (H) up to
2,000 rentable square feet in an office for the management of the Project,
including expenses of furnishing and equipping such office and the rental value
of any space occupied for such purposes the costs of such office which
management office costs shall be equitably allocated if the office manages
buildings other than those in the Project; (I) property management fees not to
exceed the rate of property management fees charged by owners of comparable
commercial properties in the vicinity of the Project; (J) accounting, legal and
other professional services incurred in connection with the operation of the
Project and the calculation of Operating Costs and Taxes; (K) a reasonable
allowance for depreciation on machinery and equipment used to maintain the
Project and on other personal property owned by Landlord in the Project
(including window coverings and carpeting in common areas); (L) contesting the
validity or applicability of any Laws that may affect the Project; (M) the
Project's share of any shared or common area maintenance fees and expenses
(including costs and expenses of operating, managing, owning and maintaining the
Parking Facility and the common areas of the Project, any fitness center in the
Development, the fees and charges from the Seaport Centre Owners Association and
any other fees and expenses shared with the Development); and (N) any other
cost, expenditure, fee or charge, whether or not hereinbefore described, which
in accordance with generally accepted property management practices would be
considered an expense of managing, operating, maintaining and repairing the
Project. Operating Costs for any calendar year during which average occupancy of
the Project is less than one hundred percent (100%) shall be calculated based
upon the Operating Costs that would have been incurred if the Project had an
average occupancy of one hundred percent (100%) during the entire calendar year.
Operating Costs shall not include (i) costs of special services rendered to
individual tenants (including Tenant) for which a special charge is made; (ii)
points, fees and other charges for Landlord's financing or refinancing of the
Project, interest and principal payments on loans or indebtedness secured by the
Project and penalties or charges for failure to perform Landlord's obligations
under any such financing; (iii) costs of improvements for Tenant or other
tenants of the Project; (iv) costs of services or other benefits of a type which
are not available to Tenant but which are available to other tenants or
occupants, and costs for which Landlord is reimbursed by other tenants of the
Project other than through payment of tenants' shares of Operating Costs and
Taxes; (v) utility charges paid by Tenant (and other tenants in the Project)
directly to the applicable public utility company; (vi) leasing commissions,
attorneys' fees and other expenses incurred in connection with leasing space in
the Project or enforcing such leases; (vii) advertising and promotional costs;
(viii) costs of repairs directly resulting from the negligence or willful
misconduct of Landlord, its agents or employees; (ix) repairs or other work
occasioned by fire, windstorm or other casualty or hazard to the extent Landlord
receives insurance proceeds; (x) repairs or rebuilding necessitated by
condemnation to the extent Landlord receives proceeds from the applicable
condemning authority; (xi) costs associated with the operation of the business
of the partnership or entity which constitutes Landlord, or the operation of any
parent, subsidiary or affiliate of Landlord, as the same are distinguished from
the costs of operation of the Building; (xii) depreciation or amortization,
other than as specifically enumerated in the definition of Operating Costs
above; and (xiii) costs, fines or penalties incurred due to Landlord's violation
of any Law.
(4) "Taxes" means: all real property taxes and
general, special or district assessments or other governmental impositions, of
whatever kind, nature or origin, imposed on or by reason of the ownership or use
of the Project; governmental charges, fees or assessments for transit or traffic
mitigation (including area-wide traffic improvement assessments and
transportation system management fees), housing, police, fire or other
governmental service or purported benefits to the Project; personal property
taxes assessed on the personal property of Landlord used in the operation of the
Project; service payments in lieu of taxes and taxes and assessments of every
kind and nature whatsoever levied or assessed in addition to, in lieu of or in
substitution for existing or additional real or personal property taxes on the
Project or the personal property described above; any increases in the foregoing
caused by changes in assessed valuation, tax rate or other factors or
circumstances; and the reasonable cost of contesting by appropriate proceedings
the amount or validity of any taxes, assessments or charges described above.
Taxes shall not include any state and federal personal or corporate income taxes
measured by the income of Landlord from all sources (other than taxes on rent at
the Project), as well as any franchise, inheritance, or estate, succession, gift
tax, or capital levy, or any taxes on property located outside of the Project.
Landlord agrees that for the purpose of this Lease any special assessments or
special taxes for public improvements to the property will be amortized, with
interest at the rate payable to the assessing or taxing authority, over the
maximum time Landlord is permitted to pay such special assessment or special tax
without penalty. To the extent paid by Tenant or other tenants as "Tenant's
Taxes" (as defined in Section 8 - Tenant's Taxes), "Tenant's Taxes" shall be
excluded from Taxes.
(5) "Tenant's Share" means the Rentable Area of the
Premises divided by the total Rentable Area of the Project, as set forth in the
Basic Lease Information. If the Rentable Area of the Project is changed or the
Rentable Area of the Premises is changed by Tenant's leasing of additional space
hereunder or for any other reason, Tenant's Share shall be adjusted accordingly.
(b) Additional Rent.
(1) Tenant shall pay Landlord as "Additional Rent"
for each calendar year or portion thereof during the Term Tenant's Share of the
sum of (x) the amount of Operating Costs, and (y) the amount of Taxes.
(2) Prior to the Commencement Date and each calendar
year thereafter, Landlord shall notify Tenant of Landlord's estimate of
Operating Costs, Taxes and Tenant's Additional Rent for the following calendar
year (or first partial year following the Commencement Date). Commencing on the
Commencement Date, and in subsequent calendar years, on the first day of January
of each calendar year and continuing on the first day of every month thereafter
in such year, Tenant shall pay to Landlord one-twelfth (1/12th) of the
Additional Rent, as reasonably estimated by Landlord for such full calendar
year. If Landlord thereafter reasonably estimates that Operating Costs or Taxes
for such year will vary from Landlord's prior estimate, Landlord may, by notice
to Tenant, revise the estimate for such year (and Additional Rent shall
thereafter be payable based on the revised estimate).
(3) As soon as reasonably practicable after the end
of each calendar year, Landlord shall furnish Tenant a statement with respect to
such year, showing Operating Costs, Taxes and Additional Rent for the year, and
the total payments made by Tenant with respect thereto. Unless Tenant raises any
objections to Landlord's statement within ninety (90) days after receipt of the
same, such statement shall conclusively be deemed correct and Tenant shall have
no right thereafter to dispute such statement or any item therein or the
computation of Additional Rent based thereon. If Tenant does object to such
statement, then Landlord shall provide Tenant with reasonable verification of
the figures shown on the statement and the parties shall negotiate in good faith
to resolve any disputes. Any objection of Tenant to Landlord's statement and
resolution of any dispute shall not postpone the time for payment of any amounts
due Tenant or Landlord based on Landlord's statement, nor shall any failure of
Landlord to deliver Landlord's statement in a timely manner relieve Tenant of
Tenant's obligation to pay any amounts due Landlord based on Landlord's
statement. Notwithstanding anything to the contrary contained in this Lease,
Tenant shall not be responsible for payment of Operating Costs billed to Tenant
more than three (3) years following the applicable calendar year. In no event
shall the Operating Costs used by Landlord in determining Tenant's Share of
Operating Costs exceed one hundred percent (100%) of the actual Operating Costs
incurred by Landlord (including the management fees contained above) in
connection with the Project.
(4) If Tenant's Additional Rent as finally determined
for any calendar year exceeds the total payments made by Tenant on account
thereof, Tenant shall pay Landlord the deficiency within the earlier of (a) the
later of (ii) twenty (20) days after Tenant's receipt of Landlord's statement,
or (ii) the first (1st) day of the month when Tenant's next installment of Base
Rent is payable to Landlord, or (b) thirty-one (31) days after Tenant's receipt
of Landlord's statement. If the total payments made by Tenant on account thereof
exceed Tenant's Additional Rent as finally determined for such year, Tenant's
excess payment shall be credited toward the rent next due from Tenant under this
Lease or refunded to Tenant if such credit is payable following the expiration
of the Term. For any partial calendar year at the beginning or end of the Term,
Additional Rent shall be prorated on the basis of a 365-day year by computing
Tenant's Share of the Operating Costs and Taxes for the entire year and then
prorating such amount for the number of days during such year included in the
Term. Notwithstanding the termination of this Lease, Landlord shall pay to
Tenant or Tenant shall pay to Landlord, as the case may be, within thirty (30)
days after Tenant's receipt of Landlord's final statement for the calendar year
in which this Lease terminates, the difference between Tenant's Additional Rent
for that year, as finally determined by Landlord, and the total amount
previously paid by Tenant on account thereof.
If for any reason Taxes for any year during the Term are reduced, refunded
or otherwise changed, Tenant's Additional Rent shall be adjusted accordingly. If
Taxes are temporarily reduced as a result of space in the Project being leased
to a tenant that is entitled to an exemption from property taxes or other taxes,
then for purposes of determining Additional Rent for each year in which Taxes
are reduced by any such exemption, Taxes for such year shall be calculated on
the basis of the amount the Taxes for the year would have been in the absence of
the exemption. The obligations of Landlord to refund any overpayment of
Additional Rent and of Tenant to pay any Additional Rent not previously paid
shall survive the expiration of the Term.
3.3 Payment of Rent. All amounts payable or reimbursable by Tenant
under this Lease, including late charges and interest (collectively, "Rent"),
shall constitute rent and shall be payable and recoverable as rent in the manner
provided in this Lease. All sums payable to Landlord on demand under the terms
of this Lease shall be payable within the earlier of (a) the later of (i) twenty
(20) days after Tenant's receipt of Landlord's statement, or (ii) the first
(1st) day of the month when Tenant's next installment of Base Rent is payable to
Landlord, or (b) thirty-one (31) days after Tenant's receipt of Landlord's
statement. All rent shall be paid without offset, recoupment or deduction in
lawful money of the United States of America to Landlord at Landlord's Address
for Payment of Rent as set forth in the Basic Lease Information, or to such
other person or at such other place as Landlord may from time to time designate.
4. SECURITY DEPOSIT. On execution of this Lease, Tenant shall deposit
with Landlord the amount specified in the Basic Lease Information as the
Security Deposit, if any (the "Security Deposit"), as security for the
performance of Tenant's obligations under this Lease. Landlord may (but shall
have no obligation to) use the Security Deposit or any portion thereof to cure
any Event of Default under this Lease or to compensate Landlord for any damage
Landlord incurs as a result of Tenant's failure to perform any of Tenant's
obligations hereunder. In such event Tenant shall pay to Landlord on demand an
amount sufficient to replenish the Security Deposit. If Tenant is not in default
at the expiration or termination of this Lease, then within thirty (30) days
following the expiration or termination of this Lease Landlord shall return to
Tenant the Security Deposit or the balance thereof then held by Landlord and not
applied as provided above. Landlord may commingle the Security Deposit with
Landlord's general and other funds. Landlord shall not be required to pay
interest on the Security Deposit to Tenant.
5. USE AND COMPLIANCE WITH LAWS.
5.1 Use. The Premises shall be used and occupied for general business
office and administrative purposes, manufacturing and warehousing, research and
development and for other legal related uses incidental to the operation of a
medical instrumentation company, and for no other use or purpose. Tenant shall
comply with all present and future Laws relating to Tenant's use or occupancy of
the Premises, except that repairs or alterations required to comply with Laws
generally applicable to the condition of the Premises for use as office space,
and not required or caused by Tenant's particular use or activities or by any
Alterations made or proposed by Tenant, shall be made by Landlord (and the cost
thereof shall be included in or excluded from Operating Costs as provided in
Section 3.2(a)(3) above), and shall observe the "Building Rules" (as defined in
Section 27 - Rules and Regulations). Tenant shall not do, bring, keep or sell
anything in or about the Premises that is prohibited by, or that will cause a
cancellation of or an increase in the existing premium for, any insurance policy
covering the Property or any part thereof. Tenant shall not permit the Premises
to be occupied or used in any manner that will constitute waste or a nuisance,
or disturb the quiet enjoyment of or otherwise annoy other tenants in the
Project. Without limiting the foregoing, the Premises shall not be used to
manufacture goods or products, for educational activities, practice of medicine
or any of the healing arts, providing social services, for any governmental use
(including embassy or consulate use), or for personnel agency, customer service
office, studios for radio, television or other media, travel agency or
reservation center operations or uses. Notwithstanding the foregoing, Tenant
(including its Affiliates) shall have the right to use from time to time a
portion of the Premises for training sessions for Tenant's employees, and
customers so long as the number of people attending such training at any given
time comply with the parking limitations contained in Section 35 of this Lease.
Tenant shall not, without the prior consent of Landlord, (i) bring into the
Building or the Premises anything that may cause substantial noise, odor or
vibration, overload the floors in the Premises or the Building or any of the
heating, ventilating and air-conditioning ("HVAC"), mechanical, plumbing,
electrical, fire protection, life safety, security or other systems in the
Building ("Building Systems"), or jeopardize the structural integrity of the
Building or any part thereof; (ii) connect to the utility systems of the
Building any apparatus, machinery or other equipment other than typical office
equipment; or (iii) connect to any electrical circuit in the Premises any
equipment or other load with aggregate electrical power requirements in excess
of 80% of the rated capacity of the circuit.
Tenant shall honor and comply with the terms of all recorded covenants,
conditions and restrictions relating to the Property.
5.2 Hazardous Materials.
(a) Definitions.
(1) "Hazardous Materials" shall mean any substance:
(A) that now or in the future is regulated or governed by, requires
investigation or remediation under, or is defined as a hazardous waste,
hazardous substance, pollutant or contaminant under any governmental statute,
code, ordinance, regulation, rule or order, and any amendment thereto, including
the Comprehensive Environmental Response Compensation and Liability Act, 42
U.S.C. ss.9601 et seq., and the Resource Conservation and Recovery Act, 42
U.S.C. ss.6901 et seq., or (B) that is toxic, explosive, corrosive, flammable,
radioactive, carcinogenic, dangerous or otherwise hazardous, including gasoline,
diesel fuel, petroleum hydrocarbons, polychlorinated biphenyls (PCBs), asbestos,
radon and urea formaldehyde foam insulation.
(2) "Environmental Requirements" shall mean all
present and future Laws, orders, permits, licenses, approvals, authorizations
and other requirements of any kind applicable to Hazardous Materials.
(3) "Handled by Tenant" and "Handling by Tenant"
shall mean and refer to any installation, handling, generation, storage, use,
disposal, discharge, release, abatement, removal, transportation, or any other
activity of any type by Tenant or its agents, employees, contractors, licensees,
assignees, sublessees, transferees or representatives (collectively,
"Representatives") or its guests, customers, or invitees (collectively,
"Visitors"), at or about the Premises in connection with or involving Hazardous
Materials.
(4) "Environmental Losses" shall mean all costs and
expenses of any kind, damages, including foreseeable and unforeseeable
consequential damages, fines and penalties incurred in connection with any
violation of and compliance with Environmental Requirements and all losses of
any kind attributable to the diminution of value, loss of use or adverse effects
on marketability or use of any portion of the Premises or Property.
(b) Tenant's Covenants. No Hazardous Materials shall
be Handled by Tenant at or about the Premises or Property without Landlord's
prior written consent, which consent may be granted, denied, or conditioned upon
compliance with Landlord's requirements, all in Landlord's absolute discretion.
Notwithstanding the foregoing, normal quantities and use of those Hazardous
Materials customarily used in the conduct of general office activities, such as
copier fluids and cleaning supplies ("Permitted Hazardous Materials"), may be
used and stored at the Premises without Landlord's prior written consent,
provided that Tenant's activities at or about the Premises and Property and the
Handling by Tenant of all Hazardous Materials shall comply at all times with all
Environmental Requirements. At the expiration or termination of the Lease,
Tenant shall promptly remove from the Premises and Property all Hazardous
Materials Handled by Tenant at the Premises or the Property. Tenant shall keep
Landlord fully and promptly informed of all Handling by Tenant of Hazardous
Materials other than Permitted Hazardous Materials. Tenant shall be responsible
and liable for the compliance with all of the provisions of this Section by all
of Tenant's Representatives and Visitors, and all of Tenant's obligations under
this Section (including its indemnification obligations under paragraph (e)
below) shall survive the expiration or termination of this Lease.
(c) Compliance. Tenant shall at Tenant's expense promptly
take all actions required by any governmental agency or entity in connection
with or as a result of the Handling by Tenant of Hazardous Materials at or about
the Premises or Property, including inspection and testing, performing all
cleanup, removal and remediation work required with respect to those Hazardous
Materials, complying with all closure requirements and post-closure monitoring,
and filing all required reports or plans. All of the foregoing work and all
Handling by Tenant of all Hazardous Materials shall be performed in a good, safe
and workmanlike manner by consultants qualified and licensed to undertake such
work and in a manner that will not interfere with any other tenant's quiet
enjoyment of the Property or Landlord's use, operation, leasing and sale of the
Property. Tenant shall deliver to Landlord prior to delivery to any governmental
agency, or promptly after receipt from any such agency, copies of all permits,
manifests, closure or remedial action plans, notices, and all other documents
relating to the Handling by Tenant of Hazardous Materials at or about the
Premises or Property. If any lien attaches to the Premises or the Property in
connection with or as a result of the Handling by Tenant of Hazardous Materials,
and Tenant does not cause the same to be released, by payment, bonding or
otherwise, within twenty (20) days after the attachment thereof, Landlord shall
have the right but not the obligation to cause the same to be released and any
sums expended by Landlord (plus Landlord's reasonable administrative costs) in
connection therewith shall be payable by Tenant on demand.
(d) Landlord's Rights. Landlord shall have the right,
but not the obligation, to enter the Premises at any reasonable time upon
twenty-four (24) hours prior oral or written notice (and without notice in the
event of an emergency) (i) to confirm Tenant's compliance with the provisions of
this Section 5.2, and (ii) to perform Tenant's obligations under this Section if
Tenant has failed to do so after reasonable written notice to Tenant. After
reasonable written notice to Tenant Landlord shall also have the right to engage
qualified Hazardous Materials consultants to inspect the Premises and review the
Handling by Tenant of Hazardous Materials, including review of all permits,
reports, plans, and other documents regarding same. Tenant shall pay to Landlord
on demand the reasonable costs incurred by Landlord for (A) consultants' fees
and other costs and expenses in performing Tenant's obligations under this
Section, and (B) inspection costs incurred based upon Landlord's reasonable
belief that Tenant is in violation of this Section 5.2. Landlord shall use
reasonable efforts to minimize any interference with Tenant's business caused by
Landlord's entry into the Premises, but Landlord shall not be responsible for
any interference caused thereby.
(e) Tenant's Indemnification. Tenant agrees to indemnify,
defend, protect and hold harmless Landlord and its partners or members and its
or their partners, members, directors, officers, shareholders, employees and
agents from all Environmental Losses and all other claims, actions, losses,
damages, liabilities, costs and expenses of every kind, including reasonable
attorneys', experts' and consultants' fees and costs, incurred at any time and
arising from or in connection with the Handling by Tenant of Hazardous Materials
at or about the Property or Tenant's failure to comply in full with all of
Tenant's obligations under this Lease concerning Environmental Requirements with
respect to the Premises.
(f) Landlord's Responsibilities. Landlord shall not use
any of the Land or Building for any activities involving the use, generation,
handling, release, threatened release, treatment, storage, discharge, disposal
or transportation of any Hazardous Materials, except in such quantity or
concentration that is customarily used, stored or disposed in the ordinary
course of the business so long as such activity duly complies with applicable
Laws and good business practice. If Landlord violates the foregoing covenant
resulting in an Environmental Claim (as hereinafter defined) with respect to the
Premises, then Landlord agrees to (a) notify Tenant immediately of any such
Environmental Claim and (b) clean up any contamination in full compliance with
all applicable Laws. "Environmental Claim" means any claim, demand, action,
cause of action, suit, damage, punitive damage, fine, penalty, expense,
liability, criminal liability, judgment, or governmental investigation relating
to remediation or compliance with requirements of Laws covering Hazardous
Materials . The term "Environmental Claim" also includes any costs incurred in
responding to efforts to require remediation and any claim based upon any
asserted or actual breach or violation of any requirements of any Laws covering
Hazardous Materials.
6. TENANT IMPROVEMENTS & ALTERATIONS.
6.1 Landlord and Tenant shall perform their respective obligations
with respect to design and construction of any improvements to be constructed
and installed in the Premises (the "Tenant Improvements"), as provided in the
Construction Rider. Except for any Tenant Improvements to be constructed by
Tenant as provided in the Construction Rider, Tenant shall not make any
alterations, improvements or changes to the Premises, including installation of
any security system or telephone or data communication wiring, ("Alterations"),
without Landlord's prior written consent, which consent shall not be
unreasonably withheld, conditioned or delayed. Notwithstanding any other
provision contained herein, Tenant shall not be required to obtain Landlord's
prior consent for minor, non-structural Alterations that (a) do not affect any
of the Building Systems, (b) are not visible from the exterior of the Premises,
and (c) cost less than Ten Thousand Dollars ($10,000), so long as Tenant gives
Landlord notice of the proposed Alterations at least ten (10) days prior to
commencing the Alterations and complies with all of the following provisions
(except that Tenant shall not be required to obtain Landlord's approval of any
plans or specifications therefor). Any such Alterations shall be completed by
Tenant at Tenant's sole cost and expense: (i) with due diligence, in a good and
workmanlike manner, using new materials; (ii) in compliance with plans and
specifications approved by Landlord; (iii) in compliance with the construction
rules and regulations promulgated by Landlord from time to time; (iv) in
accordance with all applicable Laws (including all work, whether structural or
non-structural, inside or outside the Premises, required to comply fully with
all applicable Laws and necessitated by Tenant's work); and (v) subject to all
conditions which Landlord may in Landlord's discretion impose. Such conditions
may include requirements for Tenant to: (i) provide payment or performance bonds
or additional insurance (from Tenant or Tenant's contractors, subcontractors or
design professionals); (ii) use contractors or subcontractors approved by
Landlord, which approval shall not be unreasonably withheld, and use one of
three (3) contractors (having market rates) which are designated by Landlord for
Alterations affecting the structure of the Building, the Building Systems and
the life safety systems of the Building; and (iii) remove all or part of the
Alterations prior to or upon expiration or termination of the Term, as
designated in writing by Landlord at the time Landlord consents to any
Alterations. If any work outside the Premises, or any work on or adjustment to
any of the Building Systems, is required in connection with or as a result of
Tenant's work, such work shall be performed at Tenant's expense by contractors
designated by Landlord who charge for such work at rates prevailing in the
geographical location of the Project.. Landlord's right to review and approve
(or withhold approval of) Tenant's plans, drawings, specifications,
contractor(s) and other aspects of construction work proposed by Tenant is
intended solely to protect Landlord, the Property and Landlord's interests. No
approval or consent by Landlord shall be deemed or construed to be a
representation or warranty by Landlord as to the adequacy, sufficiency, fitness
or suitability thereof or compliance thereof with applicable Laws or other
requirements. Except as otherwise provided in Landlord's consent, all
Alterations shall upon installation become part of the realty and be the
property of Landlord.
6.2 Before making any Alterations for which Landlord's consent is
required pursuant to the provisions of Section 6.1 above, Tenant shall submit to
Landlord for Landlord's prior approval reasonably detailed final plans and
specifications prepared by a licensed architect or engineer, a copy of the
construction contract, including the name of the contractor and all
subcontractors proposed by Tenant to make the Alterations and a copy of the
contractor's license. Tenant shall reimburse Landlord upon demand for any
reasonable expenses incurred by Landlord in connection with any Alterations made
by Tenant, including reasonable fees charged by Landlord's contractors or
consultants to review plans and specifications prepared by Tenant and to update
the existing as-built plans and specifications of the Buildings to reflect the
Alterations (not to exceed $1,500.00 per each Alteration for updating as-built
plans and specifications). Tenant shall obtain all applicable permits,
authorizations and governmental approvals and deliver copies of the same to
Landlord before commencement of any Alterations.
6.3 Tenant shall keep the Premises and the Project free and clear
of all liens arising out of any work performed, materials furnished or
obligations incurred by Tenant. If any such lien attaches to the Premises or the
Project, and Tenant does not cause the same to be released by payment, bonding
or otherwise within twenty (20) days after the attachment thereof, Landlord
shall have the right but not the obligation to cause the same to be released,
and any sums expended by Landlord (plus Landlord's reasonable administrative
costs) in connection therewith shall be payable by Tenant on written demand with
interest thereon from the date of expenditure by Landlord at the Interest Rate
(as defined in Section 16.2 - Interest). Tenant shall give Landlord at least ten
(10) days' notice prior to the commencement of any Alterations and cooperate
with Landlord in posting and maintaining notices of non-responsibility in
connection therewith.
6.4 Subject to the provisions of Section 5 - Use and Compliance
with Laws and the foregoing provisions of this Section, Tenant may install and
maintain furnishings, equipment, movable partitions, business equipment and
other trade fixtures ("Trade Fixtures") in the Premises, provided that the Trade
Fixtures do not become an integral part of the Premises or the Building. Tenant
shall promptly repair any damage to the Premises or the Building caused by any
installation or removal of such Trade Fixtures.
7. MAINTENANCE AND REPAIRS.
7.1 By taking possession of the Premises Tenant agrees that the
Premises are then in a good and tenantable condition. Notwithstanding the
foregoing, prior to the Commencement Date Landlord shall cause the following
systems (the "MEP Systems") to be inspected and placed in good working order and
repair: (i) electrical, (ii) plumbing, and (iii) heating, ventilating and
air-conditioning. If, during the first sixty (60) days of the Term, any MEP
System is not in the condition required by the foregoing sentence, Tenant shall
notify Landlord of the need for repair within sixty (60) days following the
Commencement Date, and the repair shall be promptly be completed by Landlord at
no cost to Tenant. Landlord hereby assigns to Tenant all warranties with respect
to the Premises which would reduce Tenant's maintenance obligations hereunder
and shall cooperate with Tenant to enforce all such warranties. Tenant shall be
responsible to clean, maintain and repair the Premises, including providing
janitorial services and disposal of trash; and to that end, during the Term,
Tenant, at Tenant's expense but under the direction of Landlord, shall repair
and maintain the Premises, including, without limitation, any elevator, the
heating, ventilating and air conditioning system or systems serving the
Premises, the electrical and plumbing systems serving the Premises, including
the lighting and plumbing fixtures, the restrooms serving the Premises, interior
stairways in the Premises, the interior and exterior glass, plate glass
skylights, interior walls, floor coverings, ceiling (ceiling tiles and grid),
Tenant Improvements, Alterations, fire extinguishers, outlets and fixtures, and
any appliances (including dishwashers, hot water heaters and garbage disposers)
in the Premises, in a first class condition, and keep the Premises in a clean,
safe and orderly condition. With respect to the electrical and plumbing systems
serving the Premises, Tenant shall be responsible for the maintenance and repair
of any such systems only to the point where such systems join a main or other
junction (e.g., sewer main or electrical transformer) serving more than one
user. On or before the Commencement Date Tenant shall provide Landlord with a
copy of a service contract with a licensed commercial Heating, Ventilating and
Air-conditioning maintenance company (which contract and company shall be
subject to Landlord's prior reasonable approval), to maintain, on an ongoing
basis (at least quarterly), the heating, ventilating and air-conditioning system
serving the Premises. In addition to the foregoing, Tenant acknowledges that the
sewer piping at the Development is made of ABS plastic. Accordingly, without
Landlord's prior written consent, which consent may be granted or withheld in
Landlord's sole discretion, Tenant shall allow only ordinary domestic sewage to
be placed in the sewer system from the Premises. UNDER NO CIRCUMSTANCES SHALL
TENANT EVER PLACE, OR ALLOW TO BE PLACED, ANY ESTERS OR KETONES (USUALLY FOUND
IN SOLVENTS TO CLEAN UP PETROLEUM PRODUCTS) IN THE DRAINS OR SEWER SYSTEM, FROM
THE PREMISES.
7.2 Landlord shall (a) maintain or cause to be maintained in
reasonably good order, condition and repair, the structural portions of the
roof, foundations, floors and exterior walls of the Building, and the public and
common areas outside of the Building, (b) wash the exterior windows of the
Building on a periodic basis, (c) caulk exterior window joints and concrete
slabs and (d) paint the exterior of the Building, all of which shall be included
as a part of Operating Costs, subject to the terms and conditions contained in
Section 3.2 of this Lease. Landlord shall be under no obligation to inspect the
Premises. Tenant shall promptly report in writing to Landlord any defective
condition known to Tenant which Landlord is required to repair. As a material
part of the consideration for this Lease, Tenant hereby waives any benefits of
any applicable existing or future Law, including the provisions of California
Civil Code Sections 1932(1), 1941 and 1942, that allows a tenant to make repairs
at its landlord's expense.
7.3 Landlord hereby reserves the right, at any time and from time
to time, without liability to Tenant, and without constituting an eviction,
constructive or otherwise, or entitling Tenant to any abatement of rent or to
terminate this Lease or otherwise releasing Tenant from any of Tenant's
obligations under this Lease:
(a) To make alterations, additions, repairs, improvements to
or in or to decrease the size of area of, all or any part of the Building, the
fixtures and equipment therein, and the Building Systems (except that Landlord
shall not have any right under this provision to reduce the size of the
Premises, or to permanently, materially and adversely affect Tenant's access to
and use of the Premises, except only as may be required to comply with Laws or
as a result of any fire or other casualty or Condemnation);
(b) To change the Building's name or street address;
(c) To install and maintain any and all signs on the
exterior and interior of the Building;
(d) To reduce, increase, enclose or otherwise change at any
time and from time to time the size, number, location, lay-out and nature of the
common areas (including the Parking Facility) and other tenancies and premises
in the Property and to create additional rentable areas through use or enclosure
of common areas; and
(e) If any governmental authority promulgates or revises any
Law or imposes mandatory or voluntary controls or guidelines on Landlord or the
Property relating to the use or conservation of energy or utilities or the
reduction of automobile or other emissions or reduction or management of traffic
or parking on the Property (collectively "Controls"), to comply with such
Controls, whether mandatory or voluntary, or make any alterations to the
Property related thereto.
8. TENANT'S TAXES. "Tenant's Taxes" shall mean (a all taxes,
assessments, license fees and other governmental charges or impositions levied
or assessed against or with respect to Tenant's personal property or Trade
Fixtures in the Premises, whether any such imposition is levied directly against
Tenant or levied against Landlord or the Property, (b) all rental, excise, sales
or transaction privilege taxes arising out of this Lease (excluding, however,
state and federal personal or corporate income taxes measured by the income of
Landlord from all sources) imposed by any taxing authority upon Landlord or upon
Landlord's receipt of any rent payable by Tenant pursuant to the terms of this
Lease ("Rental Tax"), and (c) any increase in Taxes attributable to inclusion of
a value placed on Tenant's personal property, Trade Fixtures or Alterations.
Tenant shall pay any Rental Tax to Landlord in addition to and at the same time
as Base Rent is payable under this Lease, and shall pay all other Tenant's Taxes
before delinquency (and, at Landlord's request, shall furnish Landlord
satisfactory evidence thereof). If Landlord pays Tenant's Taxes or any portion
thereof, Tenant shall reimburse Landlord upon demand for the amount of such
payment, together with interest at the Interest Rate from the date of Landlord's
payment to the date of Tenant's reimbursement.
9. UTILITIES .
9.1 Payment for Utilities and Services.
(a) If the temperature otherwise maintained in any portion of
the Premises by the HVAC systems of the Building is affected as a result of any
lights, machines or equipment used by Tenant in the Premises, then Tenant shall
be responsible, at Tenant's sole cost and expense, to install any machinery or
equipment reasonably necessary to restore the temperature, including
modifications to the standard air-conditioning equipment, subject to the
provisions of Section 6.1 of this Lease.
(b) Electricity, water, sanitary sewer and any gas will be
separately metered for the Premises. Tenant shall pay prior to delinquency all
charges for water, gas, electricity, telephone and other telecommunication
services, janitorial service, trash pick-up, sewer and all other services
consumed on or supplied to the Premises, and all taxes, levies, fees and
surcharges thereon.
9.2 Interruption of Services. In the event of an interruption in,
or failure or inability to provide electricity, water, sanitary sewer or gas to
the Premises (a "Service Failure"), such Service Failure shall not, regardless
of its duration, constitute an eviction of Tenant, constructive or otherwise, or
impose upon Landlord any liability whatsoever, including, but not limited to,
liability for consequential damages or loss of business by Tenant or, except as
provided herein, entitle Tenant to an abatement of rent or to terminate this
Lease.
(a) If any Service Failure not caused by Tenant or its
Representatives prevents Tenant from reasonably using a material portion of the
Premises and Tenant in fact ceases to use such portion of the Premises, Tenant
shall be entitled to an abatement of Base Rent and Additional Rent with respect
to the portion of the Premises that Tenant is prevented from using by reason of
such Service Failure in the following circumstances: (i) if Landlord fails to
commence reasonable efforts to remedy the Service Failure within ten (10)
Business Days following the occurrence of the Service Failure, and such failure
has persisted and continuously prevented Tenant from using a material portion of
the Premises during that period, the abatement of rent shall commence on the
eleventh (11th) Business Day following the Service Failure and continue until
Tenant is no longer so prevented from using such portion of the Premises; or
(ii) if the Service Failure in all events is not remedied within thirty (30)
days following the occurrence of the Service Failure and Tenant in fact does not
use such portion of the Premises for an uninterrupted period of thirty (30) days
or more by reason of such Service Failure, the abatement of rent shall commence
no later than the thirty-first (31st) day following the occurrence of the
Service Failure and continue until Tenant is no longer so prevented from using
such portion of the Premises.
(b) If a Service Failure is caused by Tenant or its
Representatives, Landlord shall nonetheless remedy the Service Failure, at the
expense of Tenant, pursuant to Landlord's maintenance and repair obligations
under Section 7 - "Maintenance and Repair" or Section 12.1 - "Landlord's Duty to
Repair," as the case may be, but Tenant shall not be entitled to an abatement of
rent or to terminate this Lease as a result of any such Service Failure.
(c) Notwithstanding Tenant's entitlement to rent abatement
under the preceding provisions,Tenant shall continue to pay Tenant's then
current rent until such time as Landlord and Tenant agree on the amount of the
rent abatement. If Landlord and Tenant are unable to agree on the amount of such
abatement within ten (10) Business Days of the date they commence negotiations
regarding the abatement, then either party may submit the matter to binding
arbitration pursuant to Sections 1280 et seq. of the California Code of Civil
Procedure.
(d) In addition to the foregoing provisions, if there is a
Service Failure not caused by Tenant or its Representatives and such Service
Failure prevents Tenant from conducting its business in the Premises in the
manner in which Tenant intends to conduct such business, and (i) Landlord fails
to commence reasonable efforts to remedy the Service Failure within ninety (90)
days following the occurrence of the Service Failure, or (ii) the Service
Failure in all events is not remedied within one (1) year following its
occurrence and Tenant in fact does not conduct any business in the Premises for
an uninterrupted period of one (1) year or more, Tenant shall have the right to
terminate this Lease by written notice delivered to Landlord within ten (10)
Business Days following the event described in clauses (i) or (ii) above giving
rise to the right to terminate.
(e) Where the cause of a Service Failure is within the control
of a public utility or other public or quasi-public entity outside Landlord's
control, notification to such utility or entity of the Service Failure and
request to remedy the failure shall constitute "reasonable efforts" by Landlord
to remedy the Service Failure.
(f) Tenant hereby waives the provisions of California Civil
Code Section 1932(1) or any other applicable existing or future law, ordinance
or governmental regulation permitting the termination of this Lease due to such
interruption, failure or inability.
10. EXCULPATION AND INDEMNIFICATION.
10.1 Landlord's Indemnification of Tenant. Landlord shall
indemnify, protect, defend and hold Tenant harmless from and against any claims,
actions, liabilities, damages, costs or expenses, including reasonable
attorneys' fees and costs incurred in defending against the same ("Claims")
asserted by any third party against Tenant for loss, injury or damage, to the
extent such loss, injury or damage is caused by the willful misconduct or
negligent acts or omissions of Landlord or its authorized representatives.
10.2 Tenant's Indemnification of Landlord. Tenant shall indemnify,
protect, defend and hold Landlord and Landlord's authorized representatives
harmless from and against Claims arising from (a) the acts or omissions of
Tenant or Tenant's Representatives or Visitors in or about the Property, or (b)
any construction or other work undertaken by Tenant on the Premises (including
any design defects), or (c) any breach or default under this Lease by Tenant, or
(d) any loss, injury or damage, howsoever and by whomsoever caused, to any
person or property, occurring in the Premises during the Term, excepting only
Claims described in this clause (d) to the extent they are caused by the willful
misconduct or negligent acts or omissions of Landlord or its authorized
representatives.
10.3 Damage to Tenant and Tenant's Property. Landlord shall not be
liable to Tenant for any loss, injury or other damage to Tenant or to Tenant's
property in or about the Premises or the Property from any cause (including
defects in the Property or in any equipment in the Property; fire, explosion or
other casualty; bursting, rupture, leakage or overflow of any plumbing or other
pipes or lines, sprinklers, tanks, drains, drinking fountains or washstands in,
above, or about the Premises or the Property; or acts of other tenants in the
Property). Tenant hereby waives all claims against Landlord for any such loss,
injury or damage and the cost and expense of defending against claims relating
thereto, including any loss, injury or damage caused by Landlord's negligence
(active or passive) or willful misconduct. Notwithstanding any other provision
of this Lease to the contrary, in no event shall Landlord or Tenant be liable to
the other party for any punitive or consequential damages or damages for loss of
business by Tenant or Landlord except for any liability which Tenant might have
for holding over in the Premises beyond the expiration of the Term in accordance
with the provisions of Section 19.2 of this Lease.
10.4 Survival. The obligations of the parties under this Section 10
shall survive the expiration or termination of this Lease.
11. INSURANCE.
11.1 Tenant's Insurance.
(a) Liability Insurance. Tenant shall maintain in full
force throughout the Term,commercial general liability insurance providing
coverage on an occurrence form basis with limits of not less than Two Million
Dollars ($2,000,000.00) each occurrence for bodily injury and property damage
combined, Two Million Dollars ($2,000,000.00) annual general aggregate, and Two
Million Dollars ($2,000,000.00) products and completed operations annual
aggregate. Tenant's liability insurance policy or policies shall: (i) include
premises and operations liability coverage, products and completed operations
liability coverage, broad form property damage coverage including completed
operations, blanket contractual liability coverage including, to the maximum
extent possible, coverage for the indemnification obligations of Tenant under
this Lease, and personal and advertising injury coverage; (ii) provide that the
insurance company has the duty to defend all insureds under the policy; (iii)
provide that defense costs are paid in addition to and do not deplete any of the
policy limits; (iv) cover liabilities arising out of or incurred in connection
with Tenant's use or occupancy of the Premises or the Property; (v) extend
coverage to cover liability for the actions of Tenant's Representatives and
Visitors; and (vi) designate separate limits for the Property. Each policy of
liability insurance required by this Section shall: (i) contain a cross
liability endorsement or separation of insureds clause; (ii) provide that any
waiver of subrogation rights or release prior to a loss does not void coverage;
(iii) provide that it is primary to and not contributing with, any policy of
insurance carried by Landlord covering the same loss; (iv) provide that any
failure to comply with the reporting provisions shall not affect coverage
provided to Landlord, its partners, property managers and Mortgagees; and (v)
name Landlord, its partners, the Property Manager identified in the Basic Lease
Information (the "Property Manager"), and such other parties in interest as
Landlord may from time to time reasonably designate to Tenant in writing, as
additional insureds. Such additional insureds shall be provided at least the
same extent of coverage as is provided to Tenant under such policies. All
endorsements effecting such additional insured status shall be at least as broad
as additional insured endorsement form number CG 20 11 11 85 promulgated by the
Insurance Services Office.
(b) Property Insurance. Tenant shall at all times
maintain in effect with respect to Tenant Improvements, any Alterations and
Tenant's Trade Fixtures and personal property, commercial property insurance
providing coverage, on an "all risk" or "special form" basis, in an amount equal
to at least 90% of the full replacement cost of the covered property. Tenant may
carry such insurance under a blanket policy, provided that such policy provides
coverage equivalent to a separate policy. During the Term, the proceeds from any
such policies of insurance shall be used for the repair or replacement of the
Tenant Improvements, Alterations, Trade Fixtures and personal property so
insured. Landlord shall be provided coverage under such insurance to the extent
of its insurable interest and, if requested by Landlord, both Landlord and
Tenant shall sign all documents reasonably necessary or proper in connection
with the settlement of any claim or loss under such insurance. Landlord will
have no obligation to carry insurance on any Tenant Improvements, Alterations or
on Tenant's Trade Fixtures or personal property.
(c) Requirements For All Policies. Each policy of
insurance required under this Section 11.1 shall: (i) be in a form, and written
by an insurer, reasonably acceptable to Landlord, (ii) be maintained at Tenant's
sole cost and expense, and (iii) require at least thirty (30) days' written
notice to Landlord prior to any cancellation, nonrenewal or modification of
insurance coverage. Insurance companies issuing such policies shall have rating
classifications of "A" or better and financial size category ratings of "VII" or
better according to the latest edition of the A.M. Best Key Rating Guide. All
insurance companies issuing such policies shall be admitted carriers licensed to
do business in the state where the Property is located. Any deductible amount
under such insurance shall not exceed $5,000, except that the deductible for
Tenant's Products/Completed Operations coverage may provided for a deductible
not to exceed $10,000. Tenant shall provide to Landlord, upon request, evidence
that the insurance required to be carried by Tenant pursuant to this Section,
including any endorsement effecting the additional insured status, is in full
force and effect and that premiums therefor have been paid.
(d) Updating Coverage. Tenant shall increase the amounts
of insurance as required by any Mortgagee, and, not more frequently than once
every three (3) years, as recommended by Landlord's insurance broker, if, in the
reasonable opinion of either of them, the amount of insurance then required
under this Lease is not adequate. Any limits set forth in this Lease on the
amount or type of coverage required by Tenant's insurance shall not limit the
liability of Tenant under this Lease.
(e) Certificates of Insurance. Prior to occupancy of the Premises
by Tenant, and not less than thirty (30) days prior to expiration of any policy
thereafter, Tenant shall furnish to Landlord a certificate of insurance
reflecting that the insurance required by this Section is in force, accompanied
by an endorsement showing the required additional insureds satisfactory to
Landlord in substance and form. Notwithstanding the requirements of this
paragraph, Tenant shall at Landlord's request provide to Landlord a certified
copy of each insurance policy required to be in force at any time pursuant to
the requirements of this Lease or its Exhibits.
11.2 Landlord's Insurance. During the Term, to the extent such
coverages are available at a commercially reasonable cost, Landlord shall
maintain in effect insurance on the Building with responsible insurers, on an
"all risk" or "special form" basis, insuring the Building (excluding Tenant
Improvements) in an amount equal to at least 90% of the replacement cost
thereof, excluding land, foundations, footings and underground installations.
Landlord may, but shall not be obligated to, carry insurance against additional
perils and/or in greater amounts. Landlord shall maintain in full force
throughout the Term, commercial general liability insurance providing coverage
with limits of not less than Two Million Dollars ($2,000,000.00) each occurrence
for bodily injury and property damage combined covering the Property (the cost
of the premiums for which shall be included in Operating Costs).
11.3 Mutual Waiver of Right of Recovery & Waiver of Subrogation.
Landlord and Tenant each hereby waive any right of recovery against each other
and the partners, managers, members, shareholders, officers, directors and
authorized representatives of each other for any loss or damage that is covered
by any policy of property insurance maintained by either party (or required by
this Lease to be maintained) with respect to the Premises or the Property or any
operation therein, regardless of cause, including negligence (active or passive)
of the party benefiting from the waiver. If any such policy of insurance
relating to this Lease or to the Premises or the Property does not permit the
foregoing waiver or if the coverage under any such policy would be invalidated
as a result of such waiver, the party maintaining such policy shall obtain from
the insurer under such policy a waiver of all right of recovery by way of
subrogation against either party in connection with any claim, loss or damage
covered by such policy.
12. DAMAGE OR DESTRUCTION.
12.1 Landlord's Duty to Repair.
(a) If all or a part of the Premises are rendered untenantable
or inaccessible by damage to all or any part of the Property from fire or other
casualty then, unless either party is entitled to and elects to terminate this
Lease pursuant to Sections 12.2 - Landlord's Right to Terminate and 12.3 -
Tenant's Right to Terminate, Landlord shall, at its expense, use reasonable
efforts to repair and restore the Premises and/or the Property, as the case may
be, to substantially their former condition to the extent permitted by then
applicable Laws; provided, however, that in no event shall Landlord have any
obligation for repair or restoration beyond the extent of insurance proceeds
received by Landlord for such repair or restoration, or for Tenant Improvements
or for any of Tenant's personal property, Trade Fixtures or Alterations.
(b) If Landlord is required or elects to repair damage to the
Premises and/or the Property, this Lease shall continue in effect, but Tenant's
Base Rent and Additional Rent shall be abated with regard to any portion of the
Premises that Tenant is prevented from using by reason of such damage or its
repair from the date of the casualty until substantial completion of Landlord's
repair of the affected portion of the Premises as required under this Lease. In
no event shall Landlord be liable to Tenant by reason of any injury to or
interference with Tenant's business or property arising from fire or other
casualty or by reason of any repairs to any part of the Property necessitated by
such casualty.
12.2 Landlord's Right to Terminate. Landlord may elect to terminate
this Lease following damage by fire or other casualty under the following
circumstances:
(a) If, in the reasonable judgment of Landlord, the
Premises and the Property (exclusive of Tenant Improvements) cannot be
substantially repaired and restored under applicable Laws within one (1) year
from the date of the casualty;
(b) If, in the reasonable judgment of Landlord, adequate
proceeds are not, for any reason, made available to Landlord from Landlord's
insurance policies (and/or from Landlord's funds made available for such
purpose, at Landlord's sole option) to make the required repairs;
(c) If the Building is damaged or destroyed to the
extent that, in the reasonable judgment of Landlord, the cost to repair and
restore the Building would exceed fifty percent (50%) of the full replacement
cost of the Building (exclusive of Tenant Improvements), whether or not the
Premises are at all damaged or destroyed; or
(d) If the fire or other casualty occurs during the last
year of the Term, and the repairs and restoration would either (i) take longer
than sixty (60) days to complete, or (ii) would not be completed at least sixty
(60) days prior to the expiration of the Term (and in either case the Term of
the Lease has not been extended by Tenant exercising the Extension Option
contained in Section 39 of the Lease).
If any of the circumstances described in subparagraphs (a), (b), (c) or (d) of
this Section 12.2 occur or arise, Landlord shall give Tenant notice within one
hundred and twenty (120) days after the date of the casualty, specifying whether
Landlord elects to terminate this Lease as provided above and, if not,
Landlord's estimate of the time required to complete Landlord's repair
obligations under this Lease.
12.3 Tenant's Right to Terminate. If the Premises are rendered
untenantable or inaccessible by damage to all or any part of the Property from
fire or other casualty, and Landlord does not elect to terminate as provided
above, then Tenant may elect to terminate this Lease if Landlord's estimate of
the time required to complete Landlord's repair obligations under this Lease is
greater than one (1) year, in which event Tenant may elect to terminate this
Lease by giving Landlord notice of such election to terminate within thirty (30)
days after Landlord's notice to Tenant pursuant to Section 12.2 - Landlord's
Right to Terminate.
12.4 Waiver. Landlord and Tenant each hereby waive the provisions
of California Civil Code Sections 1932(2), 1933(4) and any other applicable
existing or future Law permitting the termination of a lease agreement in the
event of damage or destruction under any circumstances other than as provided in
Sections 12.2 -Landlord's Right to Terminate and 12.3 - Tenant's Right to
Terminate.
13. CONDEMNATION.
13.1 Definitions.
(a) "Award" shall mean all compensation, sums,or anything
of value awarded, paid or received on a total or partial Condemnation.
(b) "Condemnation" shall mean (i) a permanent taking (or a
temporary taking for a period extending beyond the end of the Term) pursuant to
the exercise of the power of condemnation or eminent domain by any public or
quasi-public authority, private corporation or individual having such power
("Condemnor"), whether by legal proceedings or otherwise, or (ii) a voluntary
sale or transfer by Landlord to any such authority, either under threat of
condemnation or while legal proceedings for condemnation are pending.
(c) "Date of Condemnation" shall mean the earlier of the
date that title to the property taken is vested in the Condemnor or the date the
Condemnor has the right to possession of the property being condemned.
13.2 Effect on Lease.
(a) If the Premises are totally taken by Condemnation,
this Lease shall terminate as of the Date of Condemnation. If a portion but not
all of the Premises is taken by Condemnation, this Lease shall remain in effect;
provided, however, that if the portion of the Premises remaining after the
Condemnation will be unsuitable for Tenant's continued use, then upon notice to
Landlord within thirty (30) days after Landlord notifies Tenant of the
Condemnation, Tenant may terminate this Lease effective as of the Date of
Condemnation.
(b) If twenty-five percent (25%) or more of the Project or of
the parcel(s) of land on which the Building is situated or of the Parking
Facility or of the floor area in the Building is taken by Condemnation, or if as
a result of any Condemnation the Building is no longer reasonably suitable for
use as an office building, whether or not any portion of the Premises is taken,
Landlord may elect to terminate this Lease, effective as of the Date of
Condemnation, by notice to Tenant within thirty (30) days after the Date of
Condemnation.
(c) If all or a substantial portion of the Premises is
temporarily taken by a Condemnor for a period not extending beyond the lesser of
(i) one (1) year after the temporary taking, or (ii) the end of the Term, this
Lease shall remain in full force and effect.
13.3 Restoration. If this Lease is not terminated as provided in
Section 13.2 - Effect on Lease, Landlord, at its expense, shall diligently
proceed to repair and restore the Premises to substantially its former condition
(to the extent permitted by then applicable Laws) and/or repair and restore the
Building to an architecturally complete office building; provided, however, that
Landlord's obligations to so repair and restore shall be limited to the amount
of any Award received by Landlord and not required to be paid to any Mortgagee
(as defined in Section 20.2 below). In no event shall Landlord have any
obligation to repair or replace any improvements in the Premises beyond the
amount of any Award received by Landlord for such repair or to repair or replace
any of Tenant's personal property, Trade Fixtures, or Alterations.
13.4 Abatement and Reduction of Rent. If any portion of the
Premises is taken in a Condemnation or is rendered permanently untenantable by
repairs necessitated by the Condemnation, and this Lease is not terminated, the
Base Rent and Additional Rent payable under this Lease shall be proportionally
reduced as of the Date of Condemnation based upon the percentage of rentable
square feet in the Premises so taken or rendered permanently untenantable. In
addition, if this Lease remains in effect following a Condemnation and Landlord
proceeds to repair and restore the Premises, the Base Rent and Additional Rent
payable under this Lease shall be abated during the period of such repair or
restoration to the extent such repairs prevent Tenant's use of the Premises.
13.5 Awards. Any Award made shall be paid to Landlord, and Tenant
hereby assigns to Landlord, and waives all interest in or claim to, any such
Award, including any claim for the value of the unexpired Term; provided,
however, that Tenant shall be entitled to receive, or to prosecute a separate
claim for, an Award for a temporary taking of the Premises or a portion thereof
by a Condemnor where this Lease is not terminated (to the extent such Award
relates to the unexpired Term), or an Award or portion thereof separately
designated for relocation expenses or the interruption of or damage to Tenant's
business or as compensation for Tenant's personal property, Trade Fixtures or
Alterations and moving costs.
13.6 Waiver. Landlord and Tenant each hereby waive the provisions
of California Code of Civil Procedure Section 1265.130 and any other applicable
existing or future Law allowing either party to petition for a termination of
this Lease upon a partial taking of the Premises and/or the Property.
14. ASSIGNMENT AND SUBLETTING.
14.1 Landlord's Consent Required. Tenant shall not assign this
Lease or any interest therein, or sublet or license or permit the use or
occupancy of the Premises or any part thereof by or for the benefit of anyone
other than Tenant, or in any other manner transfer all or any part of Tenant's
interest under this Lease (each and all a "Transfer"), without the prior written
consent of Landlord, which consent (subject to the other provisions of this
Section 14) shall not be unreasonably withheld. Subject to the provisions of
Section 14.9 of this Lease, if Tenant is a business entity, any direct or
indirect transfer of fifty percent (50%) or more of the ownership interest of
the entity (whether in a single transaction or in the aggregate through more
than one transaction) shall be deemed a Transfer. Notwithstanding any provision
in this Lease to the contrary, Tenant shall not mortgage, pledge, hypothecate or
otherwise encumber this Lease or all or any part of Tenant's interest under this
Lease.
14.2 Reasonable Consent.
(a) Prior to any proposed Transfer, Tenant shall submit in
writing to Landlord (i) the name and legal composition of the proposed assignee,
subtenant, user or other transferee (each a "Proposed Transferee"); (ii) the
nature of the business proposed to be carried on in the Premises; (iii) a
current balance sheet, income statements for the last two years and such other
reasonable financial and other information concerning the Proposed Transferee as
Landlord may request; and (iv) a copy of the proposed assignment, sublease or
other agreement governing the proposed Transfer. Within fifteen (15) Business
Days after Landlord receives all such information it shall notify Tenant whether
it approves or disapproves such Transfer or if it elects to proceed under
Section 14.7 - Landlord's Right to Space.
(b) Tenant acknowledges and agrees that, among other
circumstances for which Landlord could reasonably withhold consent to a proposed
Transfer, it shall be reasonable for Landlord to withhold consent where (i) the
Proposed Transferee does not intend itself to occupy the entire portion of the
Premises assigned or sublet, (ii) Landlord reasonably disapproves of the
Proposed Transferee's business operating ability or history, reputation or
creditworthiness or the nature or character of the business to be conducted by
the Proposed Transferee at the Premises, (iii) the Proposed Transferee is a
governmental agency or unit or an existing tenant in the Project, unless, in the
case of a Proposed Transferee, Landlord does not have space available in the
Project that Landlord is willing to lease to the Proposed Transferee containing
the same or more square feet than the space contained in the Premises, (iv) the
proposed Transfer would violate any "exclusive" rights of any tenants in the
Project, (v) Landlord or Landlord's agent has shown space in the Project to the
Proposed Transferee or responded to any inquiries from the Proposed Transferee
or the Proposed Transferee's agent concerning availability of space in the
Project, at any time within the preceding nine months, or (vi) Landlord
otherwise determines that the proposed Transfer would have the effect of
decreasing the value of the Project or increasing the expenses associated with
operating, maintaining and repairing the Project. In no event may Tenant
publicly advertise all or any portion of the Premises for assignment or sublease
at a rental less than that then sought by Landlord for a direct lease
(non-sublease) of comparable space in the Project. Notwithstanding the
foregoing, Tenant may employ a broker who advertises on a commercial multiple
listing service in order to offer the Premises for assignment or sublease.
14.3 Excess Consideration. If Landlord consents to the Transfer,
Landlord shall be entitled to receive as Additional Rent hereunder, fifty
percent (50%) of all "Sublease Profits" (as defined below). Notwithstanding the
foregoing, during the thirty-six (36) full calendar months following the
Commencement Date of this Lease Landlord shall not be entitled to any Sublease
Profits for any sublease between Tenant and any subtenant or subtenants for
Building 26, provided, however, commencing in the thirty-seventh (37th) full
calendar month following the Commencement Date of this Lease Landlord shall
receive fifty percent (50%) of Sublease Profits from any such sublease or
subleases at Building 26 (even if any such sublease is for a term which is both
prior to, and subsequent to, the first day of the thirty-seventh [37th] full
calendar month following the Commencement Date of this Lease). "Sublease
Profits" shall mean any consideration paid by the Transferee for the assignment
or sublease and, in the case of a sublease, the excess of the rent and other
consideration payable by the subtenant over the amount of Base Rent and
Additional Rent payable hereunder applicable to the subleased space, less any
and all direct, out-of-pocket expenses and cash concessions, including costs for
necessary Alterations and brokerage commission, paid by Tenant to procure the
assignee or subtenant. Tenant shall pay to Landlord as additional rent, within
ten (10) days after receipt by Tenant, any such excess consideration paid by any
transferee (the "Transferee") for the Transfer provided any capital expenditures
and brokerage commissions in connection with any sublease shall be amortized
over the term of the sublease.
14.4 No Release Of Tenant. No consent by Landlord to any Transfer
shall relieve Tenant of any obligation to be performed by Tenant under this
Lease, whether occurring before or after such consent, assignment, subletting or
other Transfer. Each Transferee shall be jointly and severally liable with
Tenant (and Tenant shall be jointly and severally liable with each Transferee)
for the payment of rent (or, in the case of a sublease, rent in the amount set
forth in the sublease) and for the performance of all other terms and provisions
of this Lease. The consent by Landlord to any Transfer shall not relieve Tenant
or any such Transferee from the obligation to obtain Landlord's express prior
written consent to any subsequent Transfer by Tenant or any Transferee. The
acceptance of rent by Landlord from any other person (whether or not such person
is an occupant of the Premises) shall not be deemed to be a waiver by Landlord
of any provision of this Lease or to be a consent to any Transfer.
14.5 Expenses and Attorneys' Fees. Tenant shall pay to Landlord on
demand all costs and expenses (including reasonable attorneys' fees) incurred by
Landlord in connection with reviewing or consenting to any proposed Transfer
(including any request for consent to, or any waiver of Landlord's rights in
connection with, any security interest in any of Tenant's property at the
Premises).
14.6 Effectiveness of Transfer. Prior to the date on which any
permitted Transfer (whether or not requiring Landlord's consent) becomes
effective, Tenant shall deliver to Landlord a counterpart of the fully executed
Transfer document and Landlord's standard form of Consent to Assignment or
Consent to Sublease executed by Tenant and the Transferee in which each of
Tenant and the Transferee confirms its obligations pursuant to this Lease.
Failure or refusal of a Transferee to execute any such instrument shall not
release or discharge the Transferee from liability as provided herein. The
voluntary, involuntary or other surrender of this Lease by Tenant, or a mutual
cancellation by Landlord and Tenant, shall not work a merger, and any such
surrender or cancellation shall, at the option of Landlord, either terminate all
or any existing subleases or operate as an assignment to Landlord of any or all
of such subleases.
14.7 Landlord's Right to Space. Notwithstanding any of the above
provisions of this Section to the contrary, if Tenant notifies Landlord that it
desires to enter into a Transfer, Landlord, in lieu of consenting to such
Transfer, may elect (x) in the case of an assignment or a sublease of the entire
Premises, to terminate this Lease, or (y) in the case of a sublease of less than
the entire Premises, to terminate this Lease as it relates to the space proposed
to be subleased by Tenant; provided, however, Tenant shall have the right to
negate Landlord's termination pursuant to the provisions of this Section 14.7 by
giving Landlord written notice of such negation ("Tenant's Negation Notice")
within three (3) Business Days after Tenant receives Landlord's notice electing
to terminate in lieu of consenting to a Transfer. Upon Tenant's Negation Notice,
Tenant shall be deemed to have withdrawn Tenant's request for a Transfer, the
Lease shall not be terminated with respect to the proposed Transfer, and the
proposed Transferee shall have no right in and to the portion of the Premises
which was included in the proposed Transfer. Upon any such termination pursuant
to the provisions of this Section 14.7, this Lease will terminate (or the space
proposed to be subleased will be removed from the Premises subject to this Lease
and the Base Rent and Tenant's Share under this Lease shall be proportionately
reduced) on the date the Transfer was proposed to be effective, and Landlord may
lease such space to any party, including the prospective Transferee identified
by Tenant. Notwithstanding the provisions of this Section 14.7 to the contrary,
Landlord recognizes and agrees that upon or after the Commencement Date of this
Lease Tenant intends to sublease Building 26, containing approximately 19,475
square feet of rentable area, to another entity. Subject to Landlord's approval
rights over the proposed sublease, as provided in Section 14.1 of this Lease,
Landlord agrees that Landlord shall not have the right to terminate this Lease
with respect to the first sublease entered into by Tenant with another entity
for Building 26.
14.8 Assignment of Sublease Rents. Tenant hereby absolutely and
irrevocably assigns to Landlord any and all rights to receive rent and other
consideration from any sublease and agrees that Landlord, as assignee or as
attorney-in-fact for Tenant for purposes hereof, or a receiver for Tenant
appointed on Landlord's application may (but shall not be obligated to) collect
such rents and other consideration and apply the same toward Tenant's
obligations to Landlord under this Lease; provided, however, that Landlord
grants to Tenant at all times prior to occurrence of any breach or default by
Tenant a revocable license to collect such rents (which license shall
automatically and without notice be and be deemed to have been revoked and
terminated immediately upon any Event of Default).
14.9 Transfer to Affiliate Notwithstanding any provision
contained in the Section 14 to the contrary, Tenant shall have the right,
without the consent of Landlord, upon ten (10) days prior written notice to
Landlord, to transfer Tenant's interest in this Lease to either (i) a successor
corporation related to Tenant by merger, consolidation, or non-bankruptcy
reorganization, (ii) a purchaser of at least ninety percent (90%) of Tenant's
assets located at the Premises as an ongoing concern, or (iii) an "Affiliate" of
Tenant, and the provisions of Sections 14.2, 14.3 and 14.7 shall not apply with
respect to the transfer to the Affiliate, but the transfer to the Affiliate
shall be subject to all other terms and conditions of this Lease, including the
provisions of this Section 14.9. Tenant shall remain liable under this Lease
after any such transfer. For the purposes of this Article 14, the term
"Affiliate" of Tenant shall mean and refer to any entity controlling, controlled
by or under common control with Tenant or Tenant's parent, as the case may be.
"Control" as used herein shall mean the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of such
controlled entity; and the ownership, or possession of the right to vote, in the
ordinary direction of its affairs, of at least fifty percent (50%) of the voting
interest in any entity. Notwithstanding Tenant's right to Transfer to an
Affiliate pursuant to the provisions of this Section 14.9, Tenant may not,
through use of its rights under this Article 14 in two or more transactions
(whether separate transactions or steps or phases of a single transaction), at
one time or over time, whether by first assigning this Lease to a subsidiary and
then merging the subsidiary into another entity or selling the stock of the
subsidiary or by other means, assign or sublease the Premises, or transfer
control of Tenant, to any person or entity which is not a subsidiary, affiliate
or controlling corporation of the original Tenant, as then constituted, existing
prior to the commencement of such transactions, without first obtaining
Landlord's prior written consent pursuant to the provisions of Section 14.2. For
purposes of this Lease, a sale of Tenant's capital stock through any public
exchange shall not be deemed an assignment, subletting or other transfer of this
Lease or the Premises requiring Landlord's consent.
15. DEFAULT AND REMEDIES.
15.1 Events of Default. The occurrence of any of the following
shall constitute an "Event of Default" by Tenant:
(a) Tenant fails to make any payment of rent when due, or
any amount required to replenish the security deposit as provided in Section 4
above, if payment in full is not received by Landlord within three (3) days
after written notice that it is due.
(b) Tenant abandons the Premises and fails to make any
payment of rent when due.
(c) Tenant fails timely to deliver any subordination document,
estoppel certificate or financial statement requested by Landlord within the
applicable time period specified in Sections 20 Encumbrances - and 21 - Estoppel
Certificates and Financial Statements - below.
(d) Tenant violates the restrictions on Transferset forth
in Section 14 - Assignment and Subletting.
(e) Tenant ceases doing business as a going concern; makes an
assignment for the benefit of creditors; is adjudicated an insolvent, files a
petition (or files an answer admitting the material allegations of a petition)
seeking relief under any under any state or federal bankruptcy or other statute,
law or regulation affecting creditors' rights; all or substantially all of
Tenant's assets are subject to judicial seizure or attachment and are not
released within 60 days, or Tenant consents to or acquiesces in the appointment
of a trustee, receiver or liquidator for Tenant or for all or any substantial
part of Tenant's assets.
(f) Tenant fails, within ninety (90) days after the
commencement of any proceedings against Tenant seeking relief under any state or
federal bankruptcy or other statute, law or regulation affecting creditors'
rights, to have such proceedings dismissed, or Tenant fails, within ninety (90)
days after an appointment, without Tenant's consent or acquiescence, of any
trustee, receiver or liquidator for Tenant or for all or any substantial part of
Tenant's assets, to have such appointment vacated.
(g) Tenant fails to perform or comply with any provision of
this Lease other than those described in (a) through (f) above, and does not
fully cure such failure within thirty (30) days after notice to Tenant or, if
such failure cannot be cured within such thirty (30)-day period, Tenant fails
within such thirty (30)-day period to commence, and thereafter diligently
proceed with, all actions necessary to cure such failure as soon as reasonably
possible but in all events within one hundred twenty (120) days of such notice;
provided, however, that if Landlord in Landlord's reasonable judgment determines
that such failure cannot or will not be cured by Tenant within such one hundred
twenty (120) days, then such failure shall constitute an Event of Default
immediately upon such notice to Tenant.
15.2 Remedies. Upon the occurrence of an Event of Default, Landlord
shall have the following remedies, which shall not be exclusive but shall be
cumulative and shall be in addition to any other remedies now or hereafter
allowed by law:
(a) Landlord may terminate Tenant's right to possession of the
Premises at any time by written notice to Tenant. Tenant expressly acknowledges
that in the absence of such written notice from Landlord, no other act of
Landlord, including re-entry into the Premises, efforts to relet the Premises,
reletting of the Premises for Tenant's account, storage of Tenant's personal
property and Trade Fixtures, acceptance of keys to the Premises from Tenant or
exercise of any other rights and remedies under this Section, shall constitute
an acceptance of Tenant's surrender of the Premises or constitute a termination
of this Lease or of Tenant's right to possession of the Premises. Upon such
termination in writing of Tenant's right to possession of the Premises, as
herein provided, this Lease shall terminate and Landlord shall be entitled to
recover damages from Tenant as provided in California Civil Code Section 1951.2
and any other applicable existing or future Law providing for recovery of
damages for such breach, including the worth at the time of award of the amount
by which the rent which would be payable by Tenant hereunder for the remainder
of the Term after the date of the award of damages, including Additional Rent as
reasonably estimated by Landlord, exceeds the amount of such rental loss as
Tenant proves could have been reasonably avoided, discounted at the discount
rate published by the Federal Reserve Bank of San Francisco for member banks at
the time of the award plus one percent (1%).
(b) Landlord shall have the remedy described in California
Civil Code Section 1951.4 (Landlord may continue this Lease in effect after
Tenant's breach and abandonment and recover rent as it becomes due, if Tenant
has the right to sublet or assign, subject only to reasonable limitations).
(c)Landlord may cure the Event of Default at Tenant's
expense. If Landlord pays any sum or incurs any expense in curing the Event of
Default, Tenant shall reimburse Landlord upon demand for the amount of such
payment or expense with interest at the Interest Rate from the date the sum is
paid or the expense is incurred until Landlord is reimbursed by Tenant.
(d) Landlord may remove all Tenant's property from the
Premises, and such property may be stored by Landlord in a public warehouse or
elsewhere at the sole cost and for the account of Tenant. If Landlord does not
elect to store any or all of Tenant's property left in the Premises, Landlord
may consider such property to be abandoned by Tenant, and Landlord may thereupon
dispose of such property in any manner deemed appropriate by Landlord. Any
proceeds realized by Landlord on the disposal of any such property shall be
applied first to offset all expenses of storage and sale, then credited against
Tenant's outstanding obligations to Landlord under this Lease, and any balance
remaining after satisfaction of all obligations of Tenant under this Lease shall
be delivered to Tenant.
16. LATE CHARGE AND INTEREST.
16.1 Late Charge. If any payment of rent is not received by
Landlord within five (5) days after written notice from Landlord to Tenant that
the payment is past due, Tenant shall pay to Landlord on demand as a late charge
an additional amount equal to four percent (4%) of the overdue payment;
provided, however, if Landlord has given Tenant written notice one (1) or more
times in any consecutive twelve (12) month period that a payment of rent is past
due, then Tenant shall pay to Landlord on demand commencing with the second
(2nd) past due payment in any twelve (12) month period, and continuing with each
past due payment thereafter in such twelve (12) month period, as a late charge
an additional amount equal to four percent (4%) of the overdue payment without
any requirement of additional notice that such payment is past due. A late
charge shall not be imposed more than once on any particular installment not
paid when due, but imposition of a late charge on any payment not made when due
does not eliminate or supersede late charges imposed on other (prior) payments
not made when due or preclude imposition of a late charge on other installments
or payments not made when due.
16.2 Interest. In addition to the late charges referred to above,
which are intended to defray Landlord's costs resulting from late payments, any
payment from Tenant to Landlord not paid when due shall at Landlord's option
bear interest from the date due until paid to Landlord by Tenant at the rate of
fifteen percent (15%) per annum or the maximum lawful rate that Landlord may
charge to Tenant under applicable laws, whichever is less (the "Interest Rate").
Acceptance of any late charge and/or interest shall not constitute a waiver of
Tenant's default with respect to the overdue sum or prevent Landlord from
exercising any of its other rights and remedies under this Lease.
17. WAIVER. No provisions of this Lease shall be deemed waived by either
party unless such waiver is in a writing signed by the waiving party. The waiver
by either party of any breach of any provision of this Lease shall not be deemed
a waiver of such provision or of any subsequent breach of the same or any other
provision of this Lease. No delay or omission in the exercise of any right or
remedy of either party upon any default by the other party shall impair such
right or remedy or be construed as a waiver. Landlord's acceptance of any
payments of rent due under this Lease shall not be deemed a waiver of any
default by Tenant under this Lease (including Tenant's recurrent failure to
timely pay rent) other than Tenant's nonpayment of the accepted sums, and no
endorsement or statement on any check or on any letter accompanying any check or
payment shall be deemed an accord and satisfaction. The consent to or approval
by either party of any act by the other party requiring the first party's
consent or approval shall not be deemed to waive or render unnecessary the
consenting or approving party's consent to or approval of any subsequent act by
the other party.
18. ENTRY, INSPECTION AND CLOSURE. Upon reasonable oral or written
notice to Tenant (and without notice in emergencies), Landlord and its
authorized representatives may enter the Premises at all reasonable times to:
(a) determine whether the Premises are in good condition, (b) determine whether
Tenant is complying with its obligations under this Lease, (c) perform any
maintenance or repair of the Premises or the Building that Landlord has the
right or obligation to perform, (d) install or repair improvements for other
tenants where access to the Premises is required for such installation or
repair, (e) serve, post or keep posted any notices required or allowed under the
provisions of this Lease, (f) show the Premises to prospective brokers, agents,
buyers, transferees, or Mortgagees, or (g) do any other act or thing necessary
for the safety or preservation of the Premises or the Building. In addition,
upon prior oral or written notice to Tenant, Landlord shall have the right
during the last twelve (12) months of the Term, to show the Premises to
prospective tenants. Notwithstanding the foregoing, any access by Landlord
(including any of the foregoing in this paragraph) to Tenant's "clean room" in
the Premises shall be subject to Tenant's reasonable restrictions and control.
When reasonably necessary Landlord may temporarily close entrances, doors,
corridors, elevators or other facilities in the Building without liability to
Tenant by reason of such closure. Landlord shall conduct its activities under
this Section in a manner that will minimize inconvenience to Tenant without
incurring additional expense to Landlord. In no event shall Tenant be entitled
to an abatement of rent on account of any entry by Landlord, and Landlord shall
not be liable in any manner for any inconvenience, loss of business or other
damage to Tenant or other persons arising out of Landlord's entry on the
Premises in accordance with this Section. No action by Landlord pursuant to this
paragraph shall constitute an eviction of Tenant, constructive or otherwise,
entitle Tenant to an abatement of rent or to terminate this Lease or otherwise
release Tenant from any of Tenant's obligations under this Lease.
19. SURRENDER AND HOLDING OVER.
19.1 Surrender. Upon the expiration or termination of this Lease,
Tenant shall surrender the Premises and all Tenant Improvements and Alterations
to Landlord broom-clean and in their original condition, except for reasonable
wear and tear, damage from casualty or condemnation and any changes resulting
from approved Alterations; provided, however, that prior to the expiration or
termination of this Lease Tenant shall remove all telephone and other cabling
installed in the Building by Tenant and remove from the Premises all Tenant's
personal property and any Trade Fixtures and all Alterations that Landlord has
elected to require Tenant to remove as provided in Section 6.1 - Tenant
Improvements & Alterations, and repair any damage caused by such removal. If
such removal is not completed before the expiration or termination of the Term,
Landlord shall have the right (but no obligation) to remove the same, and Tenant
shall pay Landlord on demand for all costs of removal and storage thereof and
for the rental value of the Premises for the period from the end of the Term
through the end of the time reasonably required for such removal. Landlord shall
also have the right to retain or dispose of all or any portion of such property
if Tenant does not pay all such costs and retrieve the property within ten (10)
days after notice from Landlord (in which event title to all such property
described in Landlord's notice shall be transferred to and vest in Landlord).
Tenant waives all Claims against Landlord for any damage or loss to Tenant
resulting from Landlord's removal, storage, retention, or disposition of any
such property. Upon expiration or termination of this Lease or of Tenant's
possession, whichever is earliest, Tenant shall surrender all keys to the
Premises or any other part of the Building and shall deliver to Landlord all
keys for or make known to Landlord the combination of locks on all safes,
cabinets and vaults that may be located in the Premises. Tenant's obligations
under this Section shall survive the expiration or termination of this Lease.
19.2 Holding Over. If Tenant (directly or through any Transferee or
other successor-in-interest of Tenant) remains in possession of the Premises
after the expiration or termination of this Lease, Tenant's continued possession
shall be on the basis of a tenancy at the sufferance of Landlord. No act or
omission by Landlord, other than its specific written consent, shall constitute
permission for Tenant to continue in possession of the Premises, and if such
consent is given or declared to have been given by a court judgment, Landlord
may terminate Tenant's holdover tenancy at any time upon seven (7) days written
notice. In such event, Tenant shall continue to comply with or perform all the
terms and obligations of Tenant under this Lease, except that the monthly Base
Rent during Tenant's holding over shall be twice the Base Rent payable in the
last full month prior to the termination hereof. Acceptance by Landlord of rent
after such termination shall not constitute a renewal or extension of this
Lease; and nothing contained in this provision shall be deemed to waive
Landlord's right of re-entry or any other right hereunder or at law. Tenant
shall indemnify, defend and hold Landlord harmless from and against all Claims
arising or resulting directly or indirectly from Tenant's failure to timely
surrender the Premises, including (i) any rent payable by or any loss, cost, or
damages claimed by any prospective tenant of the Premises, and (ii) Landlord's
damages as a result of such prospective tenant rescinding or refusing to enter
into the prospective lease of the Premises by reason of such failure to timely
surrender the Premises.
20. ENCUMBRANCES.
20.1 Subordination. This Lease is expressly made subject and
subordinate to any mortgage, deed of trust, ground lease, underlying lease or
like encumbrance affecting any part of the Property or any interest of Landlord
therein which is now existing or hereafter executed or recorded ("Encumbrance");
provided, however, that such subordination shall only be effective, as to future
Encumbrances, if the holder of the Encumbrance agrees that this Lease shall
survive the termination of the Encumbrance by lapse of time, foreclosure or
otherwise so long as Tenant is not in default under this Lease beyond any
applicable notice and cure period. Provided the conditions of the preceding
sentence are satisfied, Tenant shall execute and deliver to Landlord, within ten
(10) days after written request therefor by Landlord and in a form reasonably
requested by Landlord, any additional documents evidencing the subordination of
this Lease with respect to any such Encumbrance and the nondisturbance agreement
of the holder of any such Encumbrance. If the interest of Landlord in the
Property is transferred pursuant to or in lieu of proceedings for enforcement of
any Encumbrance, Tenant shall immediately and automatically attorn to the new
owner, and this Lease shall continue in full force and effect as a direct lease
between the transferee and Tenant on the terms and conditions set forth in this
Lease. Landlord agrees to use reasonable good faith efforts to obtain within 60
days after execution of this Lease, a Subordination, Attornment and
Non-Disturbance Agreement (the "SNDA") from the holder of any Encumbrance
existing at the date of this Lease pursuant to the provisions contained above;
provided, Landlord's failure to obtain an SNDA shall not affect the validity of
this Lease. Tenant shall be responsible for all costs and fees charged by any
holder of an Encumbrance to prepare or negotiate an SNDA.
20.2 Mortgagee Protection. Tenant agrees to give any holder of any
Encumbrance covering any part of the Property ("Mortgagee"), by registered mail,
a copy of any notice of default served upon Landlord, provided that prior to
such notice Tenant has been notified in writing (by way of notice of assignment
of rents and leases, or otherwise) of the address of such Mortgagee. If Landlord
shall have failed to cure such default within thirty (30) days from the
effective date of such notice of default, then the Mortgagee shall have an
additional thirty (30) days within which to cure such default or if such default
cannot be cured within that time, then such additional time as may be necessary
to cure such default (including the time necessary to foreclose or otherwise
terminate its Encumbrance, if necessary to effect such cure), and this Lease
shall not be terminated so long as such remedies are being diligently pursued.
21. ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS.
21.1 Estoppel Certificates. Within ten (10) days after written
request therefor, Tenant shall execute and deliver to Landlord, in a form
provided by or satisfactory to Landlord, a certificate stating that this Lease
is in full force and effect, describing any amendments or modifications hereto,
acknowledging that this Lease is subordinate or prior, as the case may be, to
any Encumbrance and stating any other information Landlord may reasonably
request, including the Term, the monthly Base Rent, the date to which Rent has
been paid, the amount of any security deposit or prepaid rent, whether either
party hereto is in default under the terms of the Lease, and whether Landlord
has completed its construction obligations hereunder (if any). If Tenant fails
timely to execute and deliver such certificate as provided above, then Landlord
and the addressee of such certificate shall be entitled to rely upon the
information contained in the certificate submitted to Tenant as true, correct
and complete, and Tenant shall be estopped from later denying, contradicting or
taking any position inconsistent with the information contained in such
certificate. Any person or entity purchasing, acquiring an interest in or
extending financing with respect to the Property shall be entitled to rely upon
any such certificate. If Tenant fails to deliver such certificate within ten
(10) days after Landlord's second written request therefor, Tenant shall be
liable to Landlord for any damages incurred by Landlord including any profits or
other benefits from any financing of the Property or any interest therein which
are lost or made unavailable as a result, directly or indirectly, of Tenant's
failure or refusal to timely execute or deliver such estoppel certificate.
21.2 Financial Statements. Within ten (10) days after written
request therefor, but not more than once a year, Tenant shall deliver to
Landlord a copy of the financial statements (including at least a year end
balance sheet and a statement of profit and loss) of Tenant (and of each
guarantor of Tenant's obligations under this Lease) for each of the three most
recently completed years, prepared in accordance with generally accepted
accounting principles (and, if such is Tenant's normal practice, audited by an
independent certified public accountant), all then available subsequent interim
statements, and such other financial information as may reasonably be requested
by Landlord or required by any Mortgagee. So long as Tenant is publicly traded
on a nationally recognized stock exchange, Tenant can satisfy the requirements
for financial statements by providing the publicly available financial
statements.
22. NOTICES. Any notice, demand, request, consent or approval that either
party desires or is required to give to the other party under this Lease shall
be in writing and shall be served personally, delivered by messenger or courier
service, or sent by U.S. certified mail, return receipt requested, postage
prepaid, addressed to the other party at the party's address for notices set
forth in the Basic Lease Information. Any notice required pursuant to any Laws
may be incorporated into, given concurrently with or given separately from any
notice required under this Lease. Notices shall be deemed to have been given and
be effective on the earlier of (a) receipt (or refusal of delivery or receipt);
or (b) one (1) day after acceptance by the independent service for delivery, if
sent by independent messenger or courier service, or three (3) days after
mailing if sent by mail in accordance with this Section. Either party may change
its address for notices hereunder, effective fifteen (15) days after notice to
the other party complying with this Section. If Tenant sublets the Premises,
notices from Landlord shall be effective on the subtenant when given to Tenant
pursuant to this Section.
23. ATTORNEYS' XXXX.Xx the event of any dispute between Landlord and Tenant
in any way related to this Lease, the non-prevailing party shall pay to the
prevailing party all reasonable attorneys' fees and costs and expenses of any
type incurred by the prevailing party in connection with any action or
proceeding (including any appeal and the enforcement of any judgment or award),
whether or not the dispute is litigated or prosecuted to final judgment. The
"prevailing party" shall be determined based upon an assessment of which party's
major arguments or positions taken in the action or proceeding could fairly be
said to have prevailed (whether by compromise, settlement, abandonment by the
other party of its claim or defense, final decision, after any appeals, or
otherwise) over the other party's major arguments or positions on major disputed
issues.
24. QUIET POSSESSION. Subject to Tenant's full and timely performance of
all of Tenant's obligations under this Lease and subject to the terms of this
Lease, including Section 20 - Encumbrances, Tenant shall have the quiet
possession of the Premises throughout the Term as against any persons or
entities lawfully claiming by, through or under Landlord.
25. SECURITY MEASURES.Tenant shall be responsible for all security
measures for the Premises, such as the registration or search of all persons
entering or leaving the Building, requiring identification for access to the
Building, evacuation of the Building for cause, suspected cause, or for drill
purposes, the issuance of magnetic pass cards or keys for Building or elevator
access to prevent any threat of property loss or damage, bodily injury or
business interruption. Landlord shall have no security responsibility for the
Premises or the Project. Landlord, its agents and employees shall have no
liability to Tenant or its Representatives or Visitors for the implementation or
exercise of, or the failure to implement or exercise, any security measures for
the Premises or the Project, or for any resulting disturbance of Tenant's use or
enjoyment of the Premises.
26. FORCE MAJEURE. If Landlord or Tenant is delayed, interrupted or
prevented from performing any of their respective obligations under this Lease,
including its obligations under the Construction Rider (if any), and such delay,
interruption or prevention is due to fire, act of God, governmental act or
failure to act, labor dispute, unavailability of materials or any cause outside
the reasonable control of either party, then the time for performance of the
affected obligations of the delayed party shall be extended for a period
equivalent to the period of such delay, interruption or prevention.
Notwithstanding the foregoing, force majeure delays shall not apply to Tenant's
obligations to pay any monetary sums due under this Lease.
27. RULES AND REGULATIONS. Tenant shall be bound by and shall comply with
the rules and regulations attached to and made a part of this Lease as Exhibit C
to the extent those rules and regulations are not in conflict with the terms of
this Lease, as well as any reasonable rules and regulations hereafter adopted by
Landlord for all tenants of the Building, upon notice to Tenant thereof
(collectively, the "Building Rules"). Landlord shall not be responsible to
Tenant or to any other person for any violation of, or failure to observe, the
Building Rules by any other tenant or other person.
28. LANDLORD'S LIABILITY. The term "Landlord," as used in this Lease, shall
mean only the owner or owners of the Building at the time in question. In the
event of any conveyance of title to the Building, then from and after the date
of such conveyance, the transferor Landlord shall be relieved of all liability
with respect to Landlord's obligations to be performed under this Lease after
the date of such conveyance upon the transferee agreeing to recognize this
Lease. Notwithstanding any other term or provision of this Lease, the liability
of Landlord for Landlord's breach of its obligations under this Lease is limited
solely to (a) Landlord's interest in the Building as the same may from time to
time be encumbered, and (b) proceeds received by Landlord from Landlord's all
risk insurance policy covering the Building following a fire or other casualty
to the Premises or the Building, if Landlord materially misappropriates such
proceeds, and either (i) such proceeds are not used for repair or restoration in
accordance with the provisions of Section 12 of this Lease, or (ii) this Lease
is not terminated in accordance with the provisions of Section 12 of this Lease,
and no personal liability shall at any time be asserted or enforceable against
any other assets of Landlord or against Landlord's partners or members or its or
their respective partners, shareholders, members, directors, officers or
managers on account of any of Landlord's obligations or actions under this
Lease.
29. CONSENTS AND APPROVALS.
29.1 Determination in Good Faith. Wherever the consent, approval,
judgment or determination of Landlord is required or permitted under this Lease,
Landlord may exercise its good faith business judgment in granting or
withholding such consent or approval or in making such judgment or determination
without reference to any extrinsic standard of reasonableness, unless the
specific provision contained in this Lease providing for such consent, approval,
judgment or determination specifies that Landlord's consent or approval is not
to be unreasonably withheld, or that such judgment or determination is to be
reasonable, or otherwise specifies the standards under which Landlord may
withhold its consent. If it is determined that Landlord failed to give its
consent where it was required to do so under this Lease, Tenant shall be
entitled to injunctive relief but shall not to be entitled to monetary damages
or to terminate this Lease for such failure.
29.2 No Liability Imposed on Landlord. The review and/or approval
by Landlord of any item or matter to be reviewed or approved by Landlord under
the terms of this Lease or any Exhibits or Addenda hereto shall not impose upon
Landlord any liability for the accuracy or sufficiency of any such item or
matter or the quality or suitability of such item for its intended use. Any such
review or approval is for the sole purpose of protecting Landlord's interest in
the Property, and no third parties, including Tenant or the Representatives and
Visitors of Tenant or any person or entity claiming by, through or under Tenant,
shall have any rights as a consequence thereof.
30. BROKERS. Landlord shall pay the fee or commission of the broker or
brokers identified in the Basic Lease Information (the "Broker") in accordance
with Landlord's separate written agreement with the Broker, if any. Tenant
warrants and represents to Landlord that in the negotiating or making of this
Lease neither Tenant nor anyone acting on Tenant's behalf has dealt with any
broker or finder who might be entitled to a fee or commission for this Lease
other than the Broker. Tenant shall indemnify and hold Landlord harmless from
any claim or claims, including costs, expenses and attorney's fees incurred by
Landlord asserted by any other broker or finder for a fee or commission based
upon any dealings with or statements made by Tenant or Tenant's Representatives.
Landlord shall indemnify and hold Tenant harmless from any claim or claims,
including costs, expenses and attorney's fees incurred by Tenant asserted by any
other broker or finder for a fee or commission based upon any dealings with or
statements made by Landlord or Landlord's Representatives.
31. RELOCATION OF PREMISES. [Intentionally Deleted].
32. ENTIRE AGREEMENT. This Lease, including the Exhibits and any
Addenda attached hereto, and the documents referred to herein, if any,
constitute the entire agreement between Landlord and Tenant with respect to the
leasing of space by Tenant in the Building, and supersede all prior or
contemporaneous agreements, understandings, proposals and other representations
by or between Landlord and Tenant, whether written or oral, all of which are
merged herein. Neither Landlord nor Landlord's agents have made any
representations or warranties with respect to the Premises, the Building, the
Project or this Lease except as expressly set forth herein, and no rights,
easements or licenses shall be acquired by Tenant by implication or otherwise
unless expressly set forth herein. The submission of this Lease for examination
does not constitute an option for the Premises and this Lease shall become
effective as a binding agreement only upon execution and delivery thereof by
Landlord to Tenant.
33. MISCELLANEOUS. This Lease may not be amended or modified except by a
writing signed by Landlord and Tenant. Subject to Section 14 - Assignment and
Subletting and Section 28 - Landlord's Liability, this Lease shall be binding on
and shall inure to the benefit of the parties and their respective successors,
assigns and legal representatives. The determination that any provisions hereof
may be void, invalid, illegal or unenforceable shall not impair any other
provisions hereof and all such other provisions of this Lease shall remain in
full force and effect. The unenforceability, invalidity or illegality of any
provision of this Lease under particular circumstances shall not render
unenforceable, invalid or illegal other provisions of this Lease, or the same
provisions under other circumstances. This Lease shall be construed and
interpreted in accordance with the laws (excluding conflict of laws principles)
of the State in which the Building is located. The provisions of this Lease
shall be construed in accordance with the fair meaning of the language used and
shall not be strictly construed against either party, even if such party drafted
the provision in question. When required by the context of this Lease, the
singular includes the plural. Wherever the term "including" is used in this
Lease, it shall be interpreted as meaning "including, but not limited to" the
matter or matters thereafter enumerated. The captions contained in this Lease
are for purposes of convenience only and are not to be used to interpret or
construe this Lease. If more than one person or entity is identified as Tenant
hereunder, the obligations of each and all of them under this Lease shall be
joint and several. Time is of the essence with respect to this Lease, except as
to the conditions relating to the delivery of possession of the Premises to
Tenant. Neither Landlord nor Tenant shall record this Lease.
34. AUTHORITY. If Tenant is a corporation, partnership, limited
liability company or other form of business entity, each of the persons
executing this Lease on behalf of Tenant warrants and represents that Tenant is
a duly organized and validly existing entity, that Tenant has full right and
authority to enter into this Lease and that the persons signing on behalf of
Tenant are authorized to do so and have the power to bind Tenant to this Lease.
Tenant shall provide Landlord upon request with evidence reasonably satisfactory
to Landlord confirming the foregoing representations.
IN WITNESS WHEREOF, Landlord and Tenant have entered into this Lease as
of the date first above written.
TENANT: LANDLORD:
PERCLOSE, INC., SEAPORT CENTRE ASSOCIATES, LLC
a Delaware corporation a California limited liability company
By: OPPORTUNITY CAPITAL PARTNERS IV, LLC,
By: /S/XXX XXXXXX a California limited liability company
-------------------------- Manager
Name: Xxx Xxxxxx
Title: Chief Financial Officer
By: /S/ R. XXXXXXX XXXXX
Name: R. Xxxxxxx Xxxxx
Title: Manager
By: /S/ XXXX PLAIN
--------------------------
Name: Xxxx Plain
Title:Chief Executive Officer By: /S/ XXXXXXX X. XXXXX
-------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Authorized Signatory
EXHIBIT A
ATTACHED TO AND FORMING A PART OF
LEASE AGREEMENT
DATED AS OF APRIL 16, 1998
BETWEEN
SEAPORT CENTRE ASSOCIATES, LLC, AS LANDLORD,
AND
PERCLOSE, INC., AS TENANT ("LEASE")
THE PREMISES
300 Saginaw
400 Saginaw
[Floor plan showing location
and configuration of Premises.]
INITIALS:
Landlord ______
Tenant ______
EXHIBIT B
ATTACHED TO AND FORMING A PART OF
LEASE AGREEMENT
DATED AS OF APRIL 16, 1998
BETWEEN
SEAPORT CENTRE ASSOCIATES, LLC, AS LANDLORD,
AND
PERCLOSE, INC., AS TENANT ("LEASE")
CONSTRUCTION RIDER
1. No Work to be Performed by Landlord. Tenant has inspected and
examined the Premises and has elected to lease the Premises as provided in the
Lease on a strictly "AS IS" basis (subject to Landlord's obligations with
respect to MEP Systems contained in Section 7.1 of the Lease). Landlord shall
have no obligation to perform any work to prepare the Premises for use or
occupancy by Tenant. Tenant shall be solely responsible for making any
alterations or improvements to the Premises required or desired by Tenant,
subject to and in accordance with the provisions of Article 6 - Alterations - of
the Lease. Upon request by Landlord, Tenant shall designate in writing an
individual authorized to act as Tenant's Representative with respect to all
approvals, directions and authorizations pursuant to this Construction Rider.
Tenant shall with reasonable diligence through San Xxxx Construction
construct and install in the Premises the improvements and fixtures provided for
in this Construction Rider ("Tenant Improvements"). Tenant agrees to offer
Commercial Interior Contractors ("CIC") the opportunity to bid on the
construction of Tenant Improvements. Tenant recognizes and agrees that CIC is an
affiliate of Landlord.
Tenant agrees that if CIC is not awarded the contract to construct
Tenant Improvements in the Premises, then Landlord shall be entitled to a
supervision fee (the "Supervision Fee") equal to the lesser of (a) three percent
(3%) of the total cost to construct the Tenant Improvements in the Premises, or
(b) Thirty Thousand and 00/100 Dollars ($30,000.00) for supervising the
contractor constructing the Tenant Improvements. Tenant agrees that, while such
supervision is for the benefit of both parties, such supervision shall not
constitute a representation or warranty by Landlord that the construction of
Tenant Improvements does in fact comply either with the final Construction
Documents (as hereinafter defined), or with applicable governmental
requirements. Tenant shall pay the Supervision Fee to Landlord within thirty
(30) days following Substantial Completion of the Tenant Improvements.
1.1. Plans. Landlord acknowledges that the Tenant
Improvements shall be constructed on a design/build basis in accordance with
plans and specifications for the Premises to be prepared by Arctec ("Designer").
As soon as may be reasonably practicable after execution and
delivery of the Lease, the Designer will prepare and deliver to Landlord and
Tenant detailed plans and specifications sufficient to permit the construction
of the Tenant Improvements by Tenant's contractor ("Construction Documents").
Such Construction Documents shall be subject to Landlord's prior written
approval, which approval shall not be unreasonably withheld. Landlord shall
approve or disapprove, with detailed written comments and proposed changes, the
Construction Documents within Five (5) Business Days after Landlord receives
such Construction Documents from the Designer. The Designer will then revise the
Construction Documents and resubmit them to Landlord and Tenant for their
approval, which approval shall not be unreasonably withheld or conditioned.
Landlord and Tenant shall have Five (5) Business Days after receipt within which
to approve or disapprove the revised Construction Documents. The revised
Construction Documents, as approved by Tenant and Landlord, are hereinafter
referred to as the "Final Construction Documents".
1.2 Construction. Upon approval by Landlord and Tenant of the
Final Construction Documents, Tenant shall proceed with reasonable diligence to
cause the Tenant Improvements to be Substantially Completed. The Tenant
Improvements shall be deemed to be "Substantially Completed" when they have been
completed in accordance with the Final Construction Documents except for
finishing details, minor omissions, decorations and mechanical adjustments of
the type normally found on an architectural "punch list". (The definition of
Substantially Completed shall also define the terms "Substantial Completion" and
"Substantially Complete.")
1.3. Cost of Tenant Improvements. Tenant is taking the
Premises in their existing "AS IS" condition (subject to Landlord's obligations
with respect to MEP Systems contained in Section 7.1 of the Lease), and Tenant
shall be responsible for the entire cost of the design (including preparation of
space plans and Construction Documents), construction and installation of the
Tenant Improvements. Notwithstanding anything to the contrary contained in this
Lease, Tenant shall have no responsibility for the Costs attributable to (A)
improvements installed outside the demising walls of the Premises unless (1)
necessitated by Tenant Improvements made inside the demising walls of the
Premises; or (2) requested by Tenant or as shown in the approved working
drawings; and (B) improvements installed "off-site" (such as streets, curbs,
gutters, traffic lights, lights for parking and street lighting);
3. Access to Premises. Landlord shall allow Tenant and Tenant's
Representatives to enter the Premises prior to the Commencement Date to inspect
the Premises; provided, however, that prior to such entry of the Premises,
Tenant shall provide evidence reasonably satisfactory to Landlord that Tenant's
insurance, as described in Section 11.1 - Tenant's Insurance of the Lease, shall
be in effect as of the time of such entry.
Tenant agrees that Landlord shall not be liable in any way for any
injury, loss or damage which may occur to any of Tenant's property placed upon
or installed in the Premises prior to the Commencement Date, the same being at
Tenant's sole risk, and Tenant shall be liable for all injury, loss or damage to
persons or property arising as a result of such entry into the Premises by
Tenant or its Representatives.
4. Ownership of Tenant Improvements. All Tenant Improvements, whether
installed by Landlord or Tenant, shall become a part of the Premises, shall be
the property of Landlord and, subject to the provisions of the Lease, shall be
surrendered by Tenant with the Premises, without any compensation to Tenant, at
the expiration or termination of the Lease in accordance with the provisions of
the Lease. In no event shall Tenant be required to remove Tenant Improvements,
except those Tenant Improvements identified by Landlord when Landlord approves
the Construction Documents.
INITIALS:
Landlord ______
Tenant ______
EXHIBIT C
ATTACHED TO AND FORMING A PART OF
LEASE AGREEMENT
DATED AS OF APRIL 16, 1998
BETWEEN
SEAPORT CENTRE ASSOCIATES, LLC, AS LANDLORD,
AND
PERCLOSE, INC., AS TENANT ("LEASE")
BUILDING RULES
The following Building Rules are additional provisions of the foregoing
Lease to which they are attached. The capitalized terms used herein have the
same meanings as these terms are given in the Lease.
1. Use of Common Areas. Tenant will not obstruct the sidewalks, halls,
passages, exits, entrances, elevators or stairways of the Building ("Common
Areas"), and Tenant will not use the Common Areas for any purpose other than
ingress and egress to and from the Premises. The Common Areas, except for the
sidewalks, are not open to the general public and Landlord reserves the right to
control and prevent access to the Common Areas of any person whose presence, in
Landlord's opinion, would be prejudicial to the safety, reputation and interests
of the Building and its tenants.
2. Limited Access to Roof. Tenant shall have the limited right of
access to the roofs of the Buildings in order to repair or replace any antenna,
aerial, aerial wires, fan, air-conditioner or other device on the roofs of the
Buildings, without the prior written consent of Landlord. If Tenant desires to
have access to the roofs of the Buildings in order to install any new devices to
the roofs, other than to replace any existing devices, Tenant shall request
Landlord's consent, which consent shall not be unreasonably withheld or delayed.
Any such device installed without such written consent is subject to removal at
Tenant's expense without notice at any time. In any event Tenant will be liable
for any damages or repairs incurred or required as a result of its installation,
use, repair, maintenance or removal of such devices on the roofs and agrees to
indemnify and hold harmless Landlord from any liability, loss, damage, cost or
expense, including reasonable attorneys' fees, arising from any activities of
Tenant or of Tenant's Representatives on the roof of the Buildings.
3. Signage. Tenant shall have the right, at Tenant's sole cost and
expense, to install a sign upon a monument to be located near the entrance to
each of the Buildings, subject to Landlord's reasonable approval, and subject to
ordinances, regulations and any approval from the City of Redwood City. Landlord
shall, at Landlord's sole cost and expense, construct a monument near the
entrance to each of the Buildings, subject to approval of the City of Redwood
City. No sign, placard, picture, name, advertisement or notice visible from the
exterior of the Premises will be inscribed, painted, affixed or otherwise
displayed by Tenant on or in any part of the Buildings without the prior written
consent of Landlord. Landlord reserves the right to adopt and furnish Tenant
with general guidelines relating to signs in or on the Buildings. All approved
signage will be inscribed, painted or affixed at Tenant's expense by a person
approved by Landlord, which approval will not be unreasonably withheld.
4. Prohibited Uses. The Premises will not be used for the storage of
merchandise held for sale to the general public, for lodging or for the sale of
goods to the general public. Tenant will not permit any food preparation on the
Premises except that Tenant may use Underwriters' Laboratory approved microwaves
for cooking and equipment for brewing coffee, tea, hot chocolate and similar
beverages so long as such use is in accordance with all applicable federal,
state and city laws, codes, ordinances, rules and regulations.
5. Janitorial Services. Tenant will be responsible, at Tenant's
expense, to keep the Premises clean, including daily janitorial service. Tenant
shall enter into an agreement with a janitorial service to clean the Premises
during week-days.
6. Keys and Locks. Landlord will furnish Tenant, free of charge, two
keys to each door or lock in the Premises. Landlord may make a reasonable charge
for any additional or replacement keys. Tenant will not duplicate any keys,
alter any locks or install any new or additional lock or bolt on any door of its
Premises or on any other part of the Building without the prior written consent
of Landlord and, in any event, Tenant will provide Landlord with a key for any
such lock. On the termination of the Lease, Tenant will deliver to Landlord all
keys to any locks or doors in the Building which have been obtained by Tenant.
7. Freight. Landlord reserves the right to prescribe the weight, size
and position of all equipment, materials, furniture or other property brought
into the Buildings. Landlord reserves the right to require that heavy objects
will stand on wood strips of such length and thickness as is necessary to
properly distribute the weight. Landlord will not be responsible for loss of or
damage to any such property from any cause, and Tenant will be liable for all
damage or injuries caused by moving or maintaining such property.
8. Nuisances and Dangerous Substances. Tenant will not conduct itself
or permit Tenant's Representatives or Visitors to conduct themselves, in the
Premises or anywhere on or in the Property in a manner which is offensive or
unduly annoying to any other Tenant or Landlord's property managers. Tenant will
not install or operate any phonograph, radio receiver, musical instrument, or
television or other similar device in any part of the Common Areas and shall not
operate any such device installed in the Premises in such manner as to disturb
or annoy other tenants of the Project. Tenant will not use or keep in the
Premises or the Property any kerosene, gasoline or other combustible fluid or
material other than limited quantities thereof reasonably necessary for the
maintenance of office equipment, or, without Landlord's prior written approval,
use any method of heating or air conditioning other than that supplied by
Landlord. Tenant will not use or keep any foul or noxious gas or substance in
the Premises or permit or suffer the Premises to be occupied or used in a manner
offensive or objectionable to Landlord or other occupants of the Project by
reason of noise, odors or vibrations, or interfere in any way with other tenants
or those having business therein. Tenant will not bring or keep any animals in
or about the Premises or the Project, except for animals assisting Tenant's
disabled Visitors.
9. Building Name and Address. Without Landlord's prior written consent,
Tenant will not use the name of the Building in connection with or in promoting
or advertising Tenant's business except as Tenant's address.
10. Building Directory. A directory for the Building will be provided
for the display of the name and location of tenants. Landlord reserves the right
to approve any additional names Tenant desires to place in the directory and, if
so approved, Landlord may assess a reasonable charge for adding such additional
names.
11. Window Coverings. No curtains, draperies, blinds, shutters, shades,
awnings, screens or other coverings, window ventilators, hangings, decorations
or similar equipment shall be attached to, hung or placed in, or used in or with
any window of the Building without the prior written consent of Landlord, and
Landlord shall have the right to control all lighting within the Premises that
may be visible from the exterior of the Building.
12. Floor Coverings. Tenant will not lay or otherwise affix linoleum,
tile, carpet or any other floor covering to the floor of the Premises in any
manner except as approved in writing by Landlord. Tenant will be liable for the
cost of repair of any damage resulting from the violation of this rule or the
removal of any floor covering by Tenant or its contractors, employees or
invitees.
13. Wiring and Cabling Installations. Tenant will be liable for the
cost of repair of any damage resulting from (a) Tenant's installation of data,
telephone and electrical wires and cables in the Premises, or (b) Tenant's
boring or cutting for wires or cables. The location of burglar alarms, smoke
detectors, and call boxes shall be subject to the written approval of Landlord
which shall not be unreasonably withheld or delayed.
14. Office Closing Procedures. Tenant will see that the doors of the
Premises are closed and locked and that all water faucets and water apparatus
are not left on unnecessarily when Tenant or its employees leave the Premises,
so as to prevent waste or damage. Tenant will be liable for all damage or
injuries sustained by Landlord resulting from Tenant's carelessness in this
regard or violation of this rule. Tenant will keep the doors to the Buildings
corridors closed at all times except for ingress and egress.
15. Plumbing Facilities. The toilet rooms, toilets, urinals, wash bowls
and other apparatus shall not be used for any purpose other than that for which
they were constructed and no foreign substance of any kind whatsoever shall be
disposed of therein. Tenant will be liable for any breakage, stoppage or damage
resulting from the violation of this rule by Tenant, its employees or invitees.
16. Use of Hand Trucks. [Intentionally Deleted].
17. Refuse. Tenant shall store all Tenant's trash and garbage within
the Premises or in other facilities designated By Landlord for such purpose.
Tenant shall not place in any trash box or receptacle any material which cannot
be disposed of in the ordinary and customary manner of removing and disposing of
trash and garbage in the city in which the Building is located without being in
violation of any law or ordinance governing such disposal. All trash and garbage
removal shall be made in accordance with directions issued from time to time by
Landlord, only through such Common Areas provided for such purposes and at such
times as Landlord may designate. Tenant shall be responsible for removing trash
from the Premises. Tenant shall comply with the requirements of any recycling
program adopted by Landlord for the Building.
18. Soliciting. Canvassing, peddling, soliciting and distribution of
handbills or any other written materials in the Building are prohibited, and
Tenant will cooperate to prevent the same.
19. Parking. Tenant will use, and cause Tenant's Representatives and
Visitors to use, any parking spaces to which Tenant is entitled under the Lease
in a manner consistent with Landlord's directional signs and markings in the
Parking Facility. Specifically, but without limitation, Tenant will not park, or
permit Tenant's Representatives or Visitors to park, in a manner that impedes
access to and from the Building or the Parking Facility or that violates space
reservations for handicapped drivers registered as such with the California
Department of Motor Vehicles. Landlord may use such reasonable means as may be
necessary to enforce the directional signs and markings in the Parking Facility,
including but not limited to towing services, and Landlord will not be liable
for any damage to vehicles towed as a result of non-compliance with such parking
regulations.
20. Fire, Security and Safety Regulations. Tenant will comply with all
safety, security, fire protection and evacuation measures and procedures
established by Landlord or any governmental agency.
21. Responsibility for Theft. Tenant assumes any and all responsibility
for protecting the Premises from theft, robbery and pilferage, which includes
keeping doors locked and other means of entry to the Premises closed.
22. Sales and Auctions. Tenant will not conduct or permit to be
conducted any sale by auction in, upon or from the Premises or elsewhere in the
Property, whether said auction be voluntary, involuntary, pursuant to any
assignment for the payment of creditors or pursuant to any bankruptcy or other
insolvency proceeding.
23. Waiver of Rules. Landlord may waive any one or more of these
Building Rules for the benefit of any particular tenant or tenants, but no such
waiver by Landlord will be construed as a waiver of such Building Rules in favor
of any other tenant or tenants nor prevent Landlord from thereafter enforcing
these Building Rules against any or all of the tenants of the Building.
24. Effect on Lease. These Building Rules are in addition to, and shall
not be construed to in any way modify or amend, in whole or in part, the terms,
covenants, agreements and conditions of the Lease. Violation of these Building
Rules constitutes a failure to fully perform the provisions of the Lease, as
referred to in Section 15.1 - "Events of Default".
25. Non-Discriminatory Enforcement. Subject to the provisions of the
Lease (and the provisions of other leases with respect to other tenants),
Landlord shall use reasonable efforts to enforce these Building Rules in a
non-discriminatory manner, but in no event shall Landlord have any liability for
any failure or refusal to do so (and Tenant's sole and exclusive remedy for any
such failure or refusal shall be injunctive relief preventing Landlord from
enforcing any of the Building Rules against Tenant in a manner that
discriminates against Tenant).
26. Additional and Amended Rules. Landlord reserves the right to
rescind or amend these Building Rules and/or adopt any other and reasonable
rules and regulations as in its judgment may from time to time be needed for the
safety, care and cleanliness of the Building and for the preservation of good
order therein.
INITIALS:
Landlord ______
Tenant ______
EXHIBIT D
ATTACHED TO AND FORMING A PART OF
LEASE AGREEMENT
DATED AS OF APRIL 16, 1998
BETWEEN
SEAPORT CENTRE ASSOCIATES, LLC, AS LANDLORD,
AND
PERCLOSE, INC., AS TENANT ("LEASE")
ADDITIONAL PROVISIONS RIDER
35. ANNUAL COST OF LIVING ADJUSTMENTS TO BASE RENT.
(a) The monthly Base Rent shall be adjusted annually, effective on the
first anniversary of the Commencement Date and on each anniversary of the
Commencement Date thereafter (each an "Adjustment Date"), to reflect increases
in the cost of living. The adjustment shall be calculated by multiplying the
monthly Base Rent for the year immediately preceding the Adjustment Date (the
"Prior Period") by the percentage increase in the Consumer Price Index, measured
(using the same calendar month for the comparing and compared Consumer Price
Index) from (i) the last calendar month for which the Consumer Price Index was
published at least one hundred twenty (120) days immediately before the
commencement of the Prior Period to (ii) the same calendar month which is at
least one hundred twenty (120) days immediately prior to the Adjustment Date;
provided, however, that on each Adjustment Date the monthly Base Rent shall be
increased by a minimum of three percent (3%) per annum, cumulative, from the
Commencement Date or the prior Adjustment Date, as applicable, and by a maximum
of six percent (6%) per annum, cumulative, from the Commencement Date or the
prior Adjustment Date, as applicable. The monthly Base Rent for each twelve (12)
month period after the first Adjustment Date shall be the monthly Base Rent for
the Prior Period plus the increase calculated in accordance with the preceding
sentence. In no event shall the monthly Base Rent following any such adjustment
be less than the monthly Base Rent in effect immediately prior to such
adjustment.
(b) The term "Consumer Price Index" means the United States Department
of Labor's Bureau of Labor Statistics' Consumer Price Index, All Urban
Consumers, All Items, San Francisco-Oakland-San Jose, California (1982-84=100),
or the successor of such index.
(c) If the Consumer Price Index is not published by the Bureau of Labor
Statistics or another governmental agency for any month for which an adjustment
in the Consumer Price Index is to be measured, then the foregoing calculations
shall be made using the most closely comparable statistics on the purchasing
power of the consumer dollar as published by a responsible financial authority
selected by Landlord.
(d) If the adjustment provided for in this Section has not been made by
any Adjustment Date, Tenant shall continue to pay monthly Base Rent at the rate
applicable to the Prior Period. Within the earlier of (a) the later of (i)
twenty (20) days after Tenant's receipt of Landlord's statement, or (ii) the
first (1st) day of the month when Tenant's next installment of Base Rent is
payable to Landlord, or (b) thirty-one (31) days after Tenant's receipt of
Landlord's written notice of the adjusted Base Rent for the then-current
Adjustment Date, Tenant shall pay to Landlord the shortfall between the old Base
Rent, as paid by Tenant to date for the then-current Lease period, and the new
Base Rent payable from the beginning of the then-current Lease period through
the date of Landlord's notice. Thereafter during such Lease period, Tenant shall
pay monthly Base Rent at the new rate set forth in Landlord's notice.
36. LETTER OF CREDIT.
(a) Tenant shall deliver to Landlord a clean, unconditional,
irrevocable, transferable letter of credit (the "Letter of Credit") in form, and
issued by a financial institution ("Issuer") satisfactory to Landlord. The
Letter of Credit shall be provided to Landlord as set forth in Section (b)
below, and shall be in the amount of $1,000,000.00, name Landlord as the
beneficiary thereunder, and provide that draws thereunder will be honored upon
receipt by Issuer of a written statement signed by an authorized agent of
Landlord stating that the person who is signing has the authority to sign on
behalf of Landlord and that Landlord is entitled to draw down on the Letter of
Credit. Landlord shall be entitled to draw the entire amount under the Letter of
Credit if either (i) Tenant does not deliver to Landlord a replacement letter of
credit from Issuer or another financial institution satisfactory to Landlord in
the amount and form of the initial Letter of Credit no later than one month
before the expiration date of the then existing Letter of Credit, or (ii) upon a
proposed sale or lease of the Building Tenant does not deliver to the new
landlord a replacement Letter of Credit pursuant to the provisions of (d) below.
If Tenant is in default under the Lease beyond any applicable notice and cure
period, Landlord shall be entitled to draw under the Letter of Credit only an
amount equal to the amount of any monetary default as defined below (or, only if
partial draws are not permitted, the entire amount of the Letter of Credit). As
used herein, "monetary default" means any delinquent installment of Base Rent,
Additional Rent or Rent under this Lease (as and when Tenant fails to pay the
same beyond any applicable notice and cure period contained in this Lease), plus
any damages to which Landlord is entitled under the Lease. Landlord agrees that
the Letter of Credit may also provide for partial draws by Landlord. To the
extent not applied by Landlord pursuant to the provisions of the Lease any
amount drawn under the Letter of Credit shall be held or applied by Landlord as
a Security Deposit, subject to the terms of Section 4 of this Lease.
(b) The Letter of Credit shall be issued and delivered to Landlord
within fifteen (15) days after complete execution of this Lease by Landlord and
Tenant. If Tenant Fails to deliver to Landlord the Letter of Credit when
required, such failure shall constitute an Event of Default under the Lease.
(c) If, and only if, (x) there has been no Event of Default under the
Lease during the eighteen (18) months prior to Release Date (as hereinafter
defined) and (y) both (i) Tenant's publicly traded common stock has a market
value of at least $250 million, as averaged over the last five [5] days of
public trading of Tenant's common stock ending thirty (30) days immediately
prior to the Release Date, and (ii) during each of Tenant's four (4) most recent
accounting quarters immediately prior to the Release Date Tenant has publicly
reported positive net income (before federal and state income taxes) equal to
three (3) times the sum of (A) the Base Rent, and (B) the actual Additional Rent
(as such Base Rent and Additional Rent may from time to time change) for each of
the same four (4) accounting quarters for which net income is being compared,
then when all of the preceding conditions contained in this subsection (c) have
been satisfied (the "Release Date"), Landlord shall, within thirty (30) days
after the Release Date, return the Letter of Credit to Tenant.
(d) If Landlord shall be holding the Letter of Credit as security,
then, in the event of a proposed sale or lease of the Building by Landlord,
Tenant will, upon ten (10) Business Days' notice, at its sole cost and expense,
cause the issuing bank to consent to the assignment or to issue a substitute
letter of credit on identical terms except for the stated beneficiary, from
either (i) the same issuing bank or (ii) a national money center bank with
shareholder's equity of at least $500,000,000, having a branch in San Francisco,
California, naming the new landlord as the beneficiary thereof upon delivery by
Landlord of the then outstanding Letter of Credit.
37. PARKING.
(a) Tenant's Parking Rights. Landlord shall provide Tenant, without
charge or fee, on an unassigned and non-exclusive basis, for use by Tenant and
Tenant's Representatives and Visitors, at the users' sole risk, one (1) parking
space in the Parking Facility (including parking on the public street) for each
three hundred thirty-three (333) rentable square feet of space leased to Tenant.
The parking spaces to be made available to Tenant hereunder may contain a
reasonable mix of spaces for compact cars and up to ten percent (10%) of the
unassigned spaces may also be designated by Landlord as Building visitors'
parking.
(b) Availability of Parking Spaces. Landlord shall take reasonable
actions to ensure the availability of the parking spaces leased by Tenant, but
Landlord does not guarantee the availability of those spaces at all times
against the actions of other tenants of the Building and users of the Parking
Facility. Access to the Parking Facility may, at Landlord's option, be regulated
by card, pass, bumper sticker, decal or other appropriate identification issued
by Landlord. Landlord retains the right to revoke the parking privileges of any
user of the Parking Facility who violates the rules and regulations governing
use of the Parking Facility (and Tenant shall be responsible for causing any
employee of Tenant or other person using parking spaces allocated to Tenant to
comply with all parking rules and regulations).
(c) Assignment and Subletting. Notwithstanding any other provision of
the Lease to the contrary, Tenant shall not assign its rights to the parking
spaces or any interest therein, or sublease or otherwise allow the use of all or
any part of the parking spaces to or by any other person, except either (i) to a
Permitted Transferee, or (ii) with Landlord's prior written consent, which may
be granted or withheld by Landlord in its sole discretion. In the event of any
separate assignment or sublease of parking space rights that is approved by
Landlord, Landlord shall be entitled to receive, as additional Rent hereunder,
one hundred percent (100%) of any profit received by Tenant in connection with
such assignment or sublease of parking spaces.
(d) Condemnation, Damage or Destruction. In the event the Parking
Facility is the subject of a Condemnation, or is damaged or destroyed, and this
Lease is not terminated, and if in such event the available number of parking
spaces in the Parking Facility is permanently reduced, then Tenant's rights to
use parking spaces hereunder may, at the election of Landlord, thereafter be
reduced in proportion to the reduction of the total number of parking spaces in
the Parking Facility. In such event, Landlord reserves the right to reduce the
number of parking spaces to which Tenant is entitled or to relocate some or all
of the parking spaces to which Tenant is entitled to other areas in the Parking
Facility.
38. RIGHT OF FIRST OFFER.
(a) Provided that Perclose, Inc. has not assigned this Lease or sublet
any or all of the Premises other than to either (i) an Affiliate, or (ii) a
sublessee of Building 26 pursuant to the provisions of Section 14.7 of this
Lease (it being intended that all rights pursuant to this provision are and
shall be personal to the original Tenant under this Lease and its Affiliates and
shall not be transferable or exercisable for the benefit of any Transferee), and
provided Tenant is not in default under this Lease beyond any applicable notice
and cure periods at the time of the exercise of any such right or at any time
thereafter until delivery of possession of the space to Tenant, and subject to
any and all rights of other tenants in the Project with respect to such space
(including renewal and extension rights and rights of first offer, first
negotiation, first refusal or other expansion rights) existing as of the date of
this Lease, and Landlord's right to initially lease the Right of First Offer
Building, Tenant shall have a one-time right of first offer to lease the
following building: The two story building in the Project located at 000 Xxxxxxx
Xxxxx, identified as Building 24 (the "Right of First Offer Building") and
containing approximately 41,350 rentable square feet.
(b) Such right of first offer (i) may only be exercised if a then
existing tenant of the Right of First Offer Building has elected not to extend
its lease or re-lease such space and (ii) may only be exercised with respect to
the entire Right of First Offer Building when offered by Landlord after the
initial leasing of the Right of First Offer Building. Tenant desires to have the
right to lease the Right of First Offer Building pursuant to the provisions of
this Section 38 only at a future date after Landlord has initially leased such
building to another tenant. Notwithstanding any other provision of this Section
to the contrary, Landlord shall have the right to enter into a lease with a
prospective tenant for the Right of First Offer Building under any terms
Landlord desires. If the Right of First Offer Building becomes available after
the initial leasing, Landlord shall offer to lease such Right of First Offer
Building to Tenant at the same market rent and on the same terms that Landlord
intends to offer to other prospective tenants. Tenant shall have five (5)
Business Days following receipt of Landlord's offer with respect to the Right of
First Offer Building within which to notify Landlord in writing of its intention
to lease such Right of First Offer Building, and such notice, if given by
Tenant, shall constitute an acceptance of Landlord's terms for the lease of the
Right of First Offer Building. If Tenant exercises such right of right offer,
the Right of First Offer Building shall be leased by Tenant on the same terms
and conditions as are contained in this Lease except for the economic and other
terms specifically set forth in Landlord's notice, and the parties shall execute
an amendment to this Lease to include the Right of First Offer Building in the
Premises and otherwise to provide for the leasing of such space on such terms.
If Tenant fails so to exercise Tenant's right of first offer within such five
(5) Business Day period, Landlord may thereafter lease such space to other
prospective tenants.
(c) If Tenant does not lease the Right of First Offer Building from
Landlord when it is first offered to Tenant by Landlord, then this right of
first offer shall terminate and Tenant shall have no further rights to lease any
of the Right of First Offer Building.
39. EXTENSION OPTION.
Provided that Perclose, Inc., has not assigned this Lease or sublet any
or all of the Premises other than to an Affiliate (it being intended that all
rights pursuant to this provision are and shall be personal to the original
Tenant under this Lease and its Affiliates and shall not be transferable or
exercisable for the benefit of any Transferee), and provided Tenant is not in
default under this Lease beyond any applicable notice and cure periods at the
time of exercise or at any time thereafter until the beginning of any such
extension of the Term, Tenant shall have the option (the "Extension Option") to
extend the Term for one (1) additional consecutive period of five (5) years (the
"Extension Period"), by giving written notice to Landlord of the exercise of any
such Extension Option at least twelve (12) months, but not more than eighteen
(18) months, prior to the expiration of the initial Term. The exercise of any
Extension Option by Tenant shall be irrevocable and shall cover the entire
Premises leased by Tenant pursuant to this Lease. Upon such exercise, the term
of the Lease shall automatically be extended for the applicable Extension Period
without the execution of any further instrument by the parties; provided that
Landlord and Tenant shall, if requested by either party, execute and acknowledge
an instrument confirming the exercise of the Extension Option. Any Extension
Option shall terminate if not exercised precisely in the manner provided herein.
Any extension of the Term shall be upon all the terms and conditions set forth
in this Lease and all Exhibits thereto, except that: (i) Tenant shall have no
further option to extend the Term of the Lease, other than as specifically set
forth herein; (ii) Landlord shall not be obligated to contribute funds toward
the cost of any remodeling, renovation, alteration or improvement work in the
Premises; and (iii) Base Rent for any such Extension Period shall be the then
Fair Market Base Rental (as defined below) for the Premises for the space and
term involved, which shall be determined as set forth below.
(a) "Fair Market Base Rental" shall mean the "fair market"
Base Rent at the time or times in question for the applicable Building, based on
the prevailing rentals then being charged to tenants in other buildings located
in the general vicinity of the Buildings, which buildings being used for
comparison are (i) of a type similar to the applicable Building and (ii)
comparable in size, location, quality and age as the applicable Building for
leases with terms equal to the Extension Period, taking into account the
creditworthiness and financial strength of the tenant, the financial guaranties
provided by the tenant (if any), the value of market concessions (including the
value of construction, renovation, moving and other allowances or rent credits),
the desirability, location in the building, size and quality of the space,
tenant finish allowance and/or tenant improvements, included services, operating
expenses and tax and expense stops or other escalation clauses, and brokerage
commissions, for the space in the Building for which Fair Market Base Rental is
being determined and for comparable space in the buildings which are being used
for comparison. Fair Market Base Rental shall also reflect the then prevailing
rental structure for comparable buildings in the general vicinity of the
Property, so that if, for example, at the time Fair Market Base Rental is being
determined the prevailing rental structure for comparable space and for
comparable lease terms includes periodic rental adjustments or escalations, Fair
Market Base Rental shall reflect such rental structure.
(b) Landlord and Tenant shall endeavor to agree upon the Fair
Market Base Rental. If they are unable to so agree within thirty (30) days after
receipt by Landlord of Tenant's notice of exercise of the Extension Option,
Landlord and Tenant shall mutually select a licensed real estate broker. If
Landlord and Tenant are unable to agree upon the name of a licensed real estate
broker within such thirty (30) day period, then within fifteen (15) days after
the expiration of the thirty (30) day period, Landlord shall select a licensed
real estate broker, and Tenant shall select a licensed real estate broker. The
two (2) licensed real estate brokers shall then within fifteen (15) days
thereafter mutually select a third licensed real estate broker (the
"Arbitrator"). All licensed real estate brokers selected pursuant to the
provisions of this paragraph must be actively leasing space similar to the
Building in the general vicinity of the Project, and have at least five (5)
years experience in the leasing of space similar to the Building in the general
vicinity of the Project. After selection of the broker or brokers in accordance
with the provisions of this paragraph, Landlord shall submit Landlord's
determination of Fair Market Base Rental and Tenant shall submit Tenant's
determination of Fair Market Base Rental to such broker, or brokers, at such
time or times and in such manner as Landlord and Tenant shall agree (or as
directed by the broker; or if Landlord and Tenant do not agree on one broker and
an Arbitrator is appointed, then as directed by the Arbitrator, if Landlord and
Tenant do not promptly agree). If Landlord and Tenant have agreed upon one
broker, the broker shall select either Landlord's or Tenant's determination as
the Fair Market Base Rental, and such determination shall be binding on Landlord
and Tenant. If Tenant's determination is selected as the Fair Market Base
Rental, then Landlord shall bear all of the broker's cost and fees. If
Landlord's determination is selected as the Fair Market Base Rental, then Tenant
shall bear all of the broker's cost and fees. If Landlord and Tenant have not
agreed upon one broker, and there is an Arbitrator appointed, then the
Arbitrator shall select either Landlord's or Tenant's determination as the Fair
Market Base Rental, and such determination shall be binding on Landlord and
Tenant. If Tenant's determination is selected as the Fair Market Base Rental,
then Landlord shall bear all costs and fees of all of the brokers (including the
Arbitrator). If Landlord's determination is selected as the Fair Market Base
Rental, then Tenant shall bear all of all costs and fees of all of the brokers
(including the Arbitrator). The broker or Arbitrator may select only between the
two (2) determinations of Fair Market Base Rental submitted by Landlord and
Tenant, and shall not have the right to average the two determinations of Fair
Market Base Rental, or to make any determination of Fair Market Base Rental
other than between the two determinations submitted by Landlord and Tenant.
(c) In the event the Fair Market Base Rental for any Extension
Period has not been determined at such time as Tenant is obligated to pay Base
Rent for such Extension Period, Tenant shall pay as Base Rent pending such
determination, the Base Rent in effect for such space immediately prior to the
Extension Period; provided, that upon the determination of the applicable Fair
Market Base Rental, any shortage of Base Rent paid, together with interest at
the rate specified in the Lease, shall be paid to Landlord by Tenant.
(d) In no event shall the Base Rent during any Extension
Period be less than the Base Rent in effect immediately prior to such Extension
Period.
(e) The term of this Lease, whether consisting of the Initial
Term alone or the Initial Term as extended by any Extension Period (if any
Extension Option is exercised), is referred to in this Lease as the "Term."
40. LANDLORD'S IMPROVEMENTS.
Notwithstanding any provision in the Lease to the contrary, Landlord
shall, at Landlord's sole cost and expense, if required by applicable Law, (i)
install two (2) ramps to each Building (unless caused by Tenant adding any new
doors to the Building, in addition to all doors existing at the date of this
Lease), and (ii) bring in to compliance with the Americans with Disabilities
Act, the Property outside the exterior of the Building . Landlord shall use
commercially reasonable efforts to promptly complete such work. Any work to the
Building required to be made by Landlord to comply with the requirements of
either (i) any Laws not in effect as of the Commencement Date or (ii) any Laws
in effect as of the Commencement Date as such Laws may be amended, changed,
added to, interpreted or re-interpreted by applicable governmental authority or
court decision, or administrative ruling subsequent to the Commencement Date
shall be included in Operating Costs pursuant to the provisions of Section 3.2
of the Lease.
INITIALS:
Landlord ______
Tenant ______
