EXHIBIT 10.14
LEASE
BETWEEN
METROPOLITAN LIFE INSURANCE COMPANY (LANDLORD)
AND
CLARENT CORPORATION (TENANT)
SEAPORT CENTRE
Redwood City, California
TABLE OF CONTENTS
PAGE
ARTICLE ONE - BASIC LEASE PROVISIONS......................................................... 1
1.01 BASIC LEASE PROVISIONS........................................................ 1
1.02 ENUMERATION OF EXHIBITS & RIDER(S)............................................ 3
1.03 DEFINITIONS................................................................... 3
ARTICLE TWO - PREMISES, TERM, FAILURE TO GIVE POSSESSION, COMMON AREAS AND PARKING........... 7
2.01 LEASE OF PREMISES............................................................. 7
2.02 TERM.......................................................................... 7
2.03 FAILURE TO GIVE POSSESSION.................................................... 7
2.04 AREA OF PREMISES.............................................................. 7
2.05 CONDITION OF PREMISES......................................................... 7
2.06 COMMON AREAS & PARKING........................................................ 7
ARTICLE THREE - RENT......................................................................... 8
ARTICLE FOUR - OPERATING EXPENSES RENT ADJUSTMENTS AND PAYMENTS.............................. 8
4.01 TENANT'S SHARE OF OPERATING EXPENSES.......................................... 8
4.02 RENT ADJUSTMENTS.............................................................. 8
4.03 STATEMENT OF LANDLORD......................................................... 9
4.04 BOOKS AND RECORDS............................................................. 9
4.05 TENANT OR LEASE SPECIFIC TAXES................................................ 9
ARTICLE FIVE - SECURITY DEPOSIT.............................................................. 10
ARTICLE SIX -UTILITIES & SERVICES............................................................ 10
6.01 LANDLORD'S GENERAL SERVICES................................................... 10
6.02 TENANT TO OBTAIN & PAY DIRECTLY............................................... 10
6.03 TELEPHONE SERVICES............................................................ 10
6.04 FAILURE OR INTERRUPTION OF UTILITY OR SERVICE................................. 11
6.05 CHOICE OF SERVICE PROVIDER.................................................... 11
6.06 SIGNAGE....................................................................... 11
ARTICLE SEVEN - POSSESSION, USE AND CONDITION OF PREMISES.................................... 11
7.01 POSSESSION AND USE OF PREMISES................................................ 11
7.02 HAZARDOUS MATERIAL............................................................ 12
7.03 LANDLORD ACCESS TO PREMISES; APPROVALS........................................ 13
7.04 QUIET ENJOYMENT............................................................... 13
ARTICLE EIGHT - MAINTENANCE.................................................................. 14
8.01 LANDLORD'S MAINTENANCE........................................................ 14
8.02 TENANT'S MAINTENANCE.......................................................... 14
ARTICLE NINE - ALTERATIONS AND IMPROVEMENTS.................................................. 14
9.01 TENANT ALTERATIONS............................................................ 14
9.02 LIENS......................................................................... 15
ARTICLE TEN - ASSIGNMENT AND SUBLETTING...................................................... 15
10.01 ASSIGNMENT AND SUBLETTING..................................................... 15
10.02 RECAPTURE..................................................................... 17
10.03 EXCESS RENT................................................................... 17
10.04 TENANT LIABILITY.............................................................. 17
10.05 ASSUMPTION AND ATTORNMENT..................................................... 17
ARTICLE ELEVEN - DEFAULT AND REMEDIES........................................................ 17
11.01 EVENTS OF DEFAULT............................................................. 17
11.02 LANDLORD'S REMEDIES........................................................... 18
11.03 ATTORNEY'S FEES............................................................... 19
11.04 BANKRUPTCY.................................................................... 19
11.05 LANDLORD'S DEFAULT............................................................ 20
ARTICLE TWELVE - SURRENDER OF PREMISES....................................................... 20
12.01 IN GENERAL.................................................................... 20
12.02 LANDLORD'S RIGHTS............................................................. 21
ARTICLE THIRTEEN - HOLDING OVER.............................................................. 21
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ARTICLE FOURTEEN - DAMAGE BY FIRE OR OTHER CASUALTY.......................................... 21
14.01 SUBSTANTIAL UNTENANTABILITY................................................... 21
14.02 INSUBSTANTIAL UNTENANTABILITY................................................. 22
14.03 RENT ABATEMENT................................................................ 22
14.04 WAIVER OF STATUTORY REMEDIES.................................................. 22
ARTICLE FIFTEEN - EMINENT DOMAIN............................................................. 22
15.01 TAKING OF WHOLE OR SUBSTANTIAL PART........................................... 22
15.02 TAKING OF PART................................................................ 22
15.03 COMPENSATION.................................................................. 23
ARTICLE SIXTEEN - INSURANCE.................................................................. 23
16.01 TENANT'S INSURANCE............................................................ 23
16.02 FORM OF POLICIES.............................................................. 23
16.03 LANDLORD'S INSURANCE.......................................................... 23
16.04 WAIVER OF SUBROGATION......................................................... 23
16.05 NOTICE OF CASUALTY............................................................ 24
ARTICLE SEVENTEEN - WAIVER OF CLAIMS AND INDEMNITY........................................... 24
17.01 WAIVER OF CLAIMS.............................................................. 24
17.02 INDEMNITY BY TENANT........................................................... 24
ARTICLE EIGHTEEN - RULES AND REGULATIONS..................................................... 25
18.01 RULES......................................................................... 25
18.02 ENFORCEMENT................................................................... 25
ARTICLE NINETEEN - LANDLORD'S RESERVED RIGHTS................................................ 25
ARTICLE TWENTY - ESTOPPEL CERTIFICATE........................................................ 25
20.01 IN GENERAL.................................................................... 25
20.02 ENFORCEMENT................................................................... 26
ARTICLE TWENTY-ONE - RELOCATION OF TENANT.................................................... 26
ARTICLE TWENTY-TWO - REAL ESTATE BROKERS..................................................... 26
ARTICLE TWENTY-THREE - MORTGAGEE PROTECTION.................................................. 26
23.01 SUBORDINATION AND ATTORNMENT.................................................. 26
23.02 MORTGAGEE PROTECTION.......................................................... 27
ARTICLE TWENTY-FOUR - NOTICES................................................................ 27
ARTICLE TWENTY-FIVE - EXERCISE FACILITY...................................................... 27
ARTICLE TWENTY-SIX - MISCELLANEOUS........................................................... 28
26.01 LATE CHARGES.................................................................. 28
26.02 NO JURY TRIAL; VENUE; JURISDICTION............................................ 28
26.03 DEFAULT UNDER OTHER LEASE..................................................... 28
26.04 OPTION........................................................................ 28
26.05 TENANT AUTHORITY.............................................................. 29
26.06 ENTIRE AGREEMENT.............................................................. 29
26.07 MODIFICATION OF LEASE FOR BENEFIT OF MORTGAGEE................................ 29
26.08 EXCULPATION................................................................... 29
26.09 ACCORD AND SATISFACTION....................................................... 29
26.10 LANDLORD'S OBLIGATIONS ON SALE OF BUILDING.................................... 29
26.11 BINDING EFFECT................................................................ 29
26.12 CAPTIONS...................................................................... 29
26.13 TIME; APPLICABLE LAW; CONSTRUCTION............................................ 29
26.14 ABANDONMENT................................................................... 30
26.15 LANDLORD'S RIGHT TO PERFORM TENANT'S DUTIES................................... 30
26.16 SECURITY SYSTEM............................................................... 30
26.17 NO LIGHT, AIR OR VIEW EASEMENTS............................................... 30
26.18 RECORDATION................................................................... 30
26.19 SURVIVAL...................................................................... 30
26.20 RIDERS........................................................................ 30
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LEASE
ARTICLE ONE
BASIC LEASE PROVISIONS
1.01 BASIC LEASE PROVISIONS
In the event of any conflict between these Basic Lease Provisions and any other
Lease provision, such other Lease provision shall control.
(1) BUILDING AND ADDRESS:
The Premises is comprised of two parts, respectively the 301 Chesapeake
Space and the 575 Chesapeake Space, described below, located in parts of
the 2 Buildings described below, subject to provisions of Rider 2:
As to the 301 Chesapeake Space:
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Building Number 6 located in Phase I ("Tenant's Phase" is the Phase of the
Project in which the Premises are located) of Seaport Centre, which
Building has a street address of:
000 Xxxxxxxxxx Xxxxx
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
As to the 575 Chesapeake Space:
------------------------------
Building Number 3, located in Phase I ("Tenant's Phase" is the Phase of the
Project in which the Premises are located) of Seaport Centre, which
Building has street addresses corresponding to the suites within it under
different leases, and the street address of the part of the Premises
located in the Building is 000 Xxxxxxxxxx Xxxxxx, as listed below in
Section 1.01(15).
(2) LANDLORD AND ADDRESS:
Metropolitan Life Insurance Company,
a New York corporation
Notices to Landlord shall be addressed:
Metropolitan Life Insurance Company
c/o Seaport Centre Manager
000 Xxxxxxxxxx Xxxxx
Xxxxxxx Xxxx, XX 00000
with copies to the following:
Metropolitan Life Insurance Company
000 Xxxxx Xx Xxxxxx Xxxx, Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attention: EIM Manager
(3) TENANT AND CURRENT ADDRESS:
(a) Name: Clarent Corporation (herein sometimes
referred to as "Clarent")
(b) State of incorporation: a Delaware corporation
Notices to Tenant shall be addressed:
Clarent Corporation
000 Xxxxxxxxxx Xxxxx
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Facilities Manager
(4) DATE OF LEASE: as of March 31, 2000
(5) LEASE TERM: the period commencing on the earlier to occur of the
Commencement Date for the 301 Chesapeake Space or the Commencement Date for
the 575 Chesapeake Space, and expiring seven (7) years after the later of
the Commencement Date for the 301 Chesapeake Space or the Commencement Date
for the 575 Chesapeake Space, as provided in the definition of the Term in
Section 1.03.
(6) PROJECTED COMMENCEMENT DATE: July 1, 2000 for the 301 Chesapeake Space and
August 1, 2000 for the 575 Chesapeake Space. The Commencement Date shall
be determined separately for each space, as provided in the definition of
Commencement Date in Section 1.03.
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(7) PROJECTED EXPIRATION DATE: The date which is seven (7) years after the
later of the Commencement Date for the 301 Chesapeake Space or the
Commencement Date for the 575 Chesapeake Space.
(8) MONTHLY BASE RENT For the Premises is the combined Monthly Base Rent for
each of the 301 Chesapeake Space and the 575 Chesapeake Space, as and when
due as set forth in this Lease. In light of the different timing for
delivery and the Commencement Date of such spaces set forth here and in
Rider 2, the amount of Monthly Base Rent for each space is set forth
separately below. The combined initial monthly installment for both spaces
is due upon Tenant's execution.
301 Chesapeake Space:
--------------------
Period from Commencement Date Monthly Monthly Rate Per Square
----------------------------- ------- -----------------------
of Space to Expiration Date ("ED") Foot of Rentable Area
---------------------------------- ---------------------
Months 01 - 12 $ 99,216.00 $ 3.25
Months 13 - 24 $103,184.64 $ 3.38
Months 25 - 36 $107,312.03 $3.515
Months 37 - 48 $111,604.51 $3.656
Months 49 - 60 $116,068.69 $3.802
Months 61 - 72 $120,711.43 $3.954
Months 73 - ED $125,539.89 $4.112
575 Chesapeake Space:
--------------------
Period from Commencement Date Monthly Monthly Rate Per Square
----------------------------- ------- -----------------------
of Space to Expiration Date ("ED") Foot of Rentable Area
---------------------------------- ---------------------
Months 01 - 12 $ 38,272.00 $ 3.25
Months 13 - 24 $ 39,802.88 $ 3.38
Months 25 - 36 $ 41,395.00 $3.515
Months 37 - 48 $ 43,050.80 $3.656
Months 49 - 60 $ 44,772.83 $3.802
Months 61 - 72 $ 46,563.74 $3.954
Months 73 - ED $ 48,426.29 $4.112
(9) RENT ADJUSTMENT DEPOSIT: (initial monthly rate, until further notice): At
the beginning of the Term, unless and until the Commencement Date has
occurred for both spaces, the Rent Adjustment Deposit payable by Tenant
shall be only for that space for which the Commencement Date has occurred.
It is agreed that the Rent Adjustment Deposit (at the initial monthly rate)
shall be an amount equal to $0.44 per square foot of Rentable Area for each
space per month.
(10) RENTABLE AREA OF THE PREMISES:
For the 301 Chesapeake Space: 30,528 square feet
For the 575 Chesapeake Space: 11,776 square feet
Premises (both spaces): 42,304 square feet
(11) RENTABLE AREA OF THE BUILDING:
For the 301 Chesapeake Space - Building 6: 30,528 square feet
For the 575 Chesapeake Space - Building 3: 37,856 square feet
(12) RENTABLE AREA OF THE PHASE: 301,824 square feet for Phase I
(13) RENTABLE AREA OF THE PROJECT: 537,444 square feet
(14) SECURITY DEPOSIT: One Million Forty-three Thousand Eight Hundred Dollars
($1,043,800.00) paid upon execution.
(15) SUITE NUMBER &/OR ADDRESS OF PREMISES:
For the 301 Chesapeake Space: 000 Xxxxxxxxxx Xxxxx, Xxxxxxx Xxxx,
Xxxxxxxxxx 00000
For the 575 Chesapeake Space: 000 Xxxxxxxxxx Xxxxx, Xxxxxxx Xxxx,
Xxxxxxxxxx 00000
(16) TENANT'S SHARE:
For the 301 Chesapeake Space:
----------------------------
Tenant's Building Share: 100.00%
Tenant's Phase Share: 10.11%
Tenant's Project Share: 5.68%
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For the 575 Chesapeake Space:
----------------------------
Tenant's Building Share: 31.11%
Tenant's Phase Share: 3.90%
Tenant's Project Share: 2.19%
(17) TENANT'S USE OF PREMISES: Office, software research and development.
(18) PARKING SPACES: 140. Such number is for the Premises (including both the
301 Space and the 575 Chesapeake Space); however for certain purposes (for
example, until the Delivery Date has occurred for both spaces, the number
of parking spaces shall be only the number allocable to the space for which
the Delivery Date has occurred) it is agreed that the parking spaces shall
be allocated between the spaces as follows:
101 for the 301 Chesapeake Space
39 for the 575 Chesapeake Space
(19) BROKERS:
Landlord's Broker: Cornish & Xxxxx
Tenant's Broker: Xxxxx Xxxxxx Associates
1.02 ENUMERATION OF EXHIBITS & RIDER(S)
The Exhibits and Rider(s) set forth below and attached to this Lease are
incorporated in this Lease by this reference:
EXHIBIT A Plan of Premises
---------
EXHIBIT B Workletter Agreement (intentionally omitted)
---------
EXHIBIT C Site Plan of Project
---------
EXHIBIT D Form of Subordination, Nondisturbance and Attornment Agreement
---------
RIDER 1 Commencement Date Agreement
-------
RIDER 2 Additional Provisions
-------
1.03 DEFINITIONS
For purposes hereof, the following terms shall have the following meanings:
ADJUSTMENT YEAR: The applicable calendar year or any portion thereof after the
Commencement Date of this Lease for which a Rent Adjustment computation is being
made.
AFFILIATE: As defined in Section 10.01(f).
BUILDING: The building in which the Premises is located, at the address and
Building number specified in Section 1.01(1).
BUILDING OPERATING EXPENSES: Those Operating Expenses described in Section
4.01.
COMMENCEMENT DATE: The Commencement Date shall be determined separately for
each of Xxxxx 000 xxx Xxxxx 000, and shall be the respective dates specified in
Section 1.01(6) as the Projected Commencement Date, unless changed by operation
of Article Two or Rider 2.
COMMON AREAS: All areas of the Project made available by Landlord from time to
time for the general common use or benefit of the tenants of the Building or
Project, and their employees and invitees, or the public, as such areas
currently exist and as they may be changed from time to time.
DECORATION: Tenant Alterations which do not require a building permit and which
do not affect the facade or roof of the Building, or involve any of the
structural elements of the Building, or involve any of the Building's systems,
including its electrical, mechanical, plumbing, security, heating, ventilating,
air-conditioning, communication, and fire and life safety systems.
DEFAULT RATE: Two (2) percentage points above the rate then most recently
announced by Bank of America N.T.& S.A. at its San Francisco main office as its
corporate base lending rate, from time to time announced, but in no event higher
than the maximum rate permitted by Law.
DELIVERY DATE: The date for Landlord's delivery to Tenant of possession of the
Premises, if different from the Commencement Date, as provided in Rider 2.
ENVIRONMENTAL LAWS: All Laws governing the use, storage, disposal or generation
of any Hazardous Material or pertaining to environmental conditions on, under or
about the Premises or any part of the Project, including the Comprehensive
Environmental Response Compensation and Liability Act of 1980, as amended (42
U.S.C. Section 9601 et seq.), and the Resource Conservation and Recovery Act of
-- ---
1976, as amended (42 U.S.C. Section 6901 et seq.).
-- ---
3
EXPIRATION DATE: The date specified in Section 1.01(7) unless changed by
operation of Article Two or Rider 2.
FORCE MAJEURE: Any accident, casualty, act of God, war or civil commotion,
strike or labor troubles, or any cause whatsoever beyond the reasonable control
of Landlord, including water shortages, energy shortages or governmental
preemption in connection with an act of God, a national emergency, or by reason
of Law, or by reason of the conditions of supply and demand which have been or
are affected by act of God, war or other emergency.
HAZARDOUS MATERIAL: Such substances, material and wastes which are or become
regulated under any Environmental Law; or which are classified as hazardous or
toxic or medical waste or biohazardous waste under any Environmental Law; and
explosives, firearms and ammunition, flammable material, radioactive material,
asbestos, polychlorinated biphenyls and petroleum and its byproducts.
INDEMNITEES: Collectively, Landlord, any Mortgagee or ground lessor of the
Property, the property manager and the leasing manager for the Property and
their respective directors, officers, agents and employees.
LAND: The parcel(s) of real estate on which the Building and Project are
located.
LANDLORD WORK: The construction or installation of improvements to be furnished
by Landlord, if any, specifically described in Rider 2 attached hereto.
LAWS OR LAW: All laws, ordinances, rules, regulations, other requirements,
orders, rulings or decisions adopted or made by any governmental body, agency,
department or judicial authority having jurisdiction over the Property, the
Premises or Tenant's activities at the Premises and any covenants, conditions or
restrictions of record which affect the Property.
LEASE: This instrument and all exhibits and riders attached hereto, as may be
amended from time to time.
LEASE YEAR: The twelve month period beginning on the first day of the first
month following the later to occur of the Commencement Date for the 301
Chesapeake Space or for the 575 Chesapeake Space (unless the Commencement Date
is the first day of a calendar month in which case beginning on the Commencement
Date), and each subsequent twelve month, or shorter, period until the Expiration
Date.
MONTHLY BASE RENT: The monthly rent specified in Section 1.01(8).
MORTGAGEE: Any holder of a mortgage, deed of trust or other security instrument
encumbering the Property.
NATIONAL HOLIDAYS: New Year's Day, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day and other holidays recognized by the Landlord
and the janitorial and other unions servicing the Building in accordance with
their contracts.
OPERATING EXPENSES: All Taxes, costs, expenses and disbursements of every kind
and nature which Landlord shall pay or become obligated to pay in connection
with the ownership, management, operation, maintenance, replacement and repair
of the Property (including the amortized portion of any capital expenditure or
improvement, together with interest thereon, expenses of changing utility
service providers, and any dues, assessments and other expenses pursuant to any
covenants, conditions and restrictions, or any reciprocal easements, or any
owner's association now or hereafter affecting the Project). Operating Expenses
shall be allocated among the categories of Project Operating Expenses, Building
Operating Expenses or Phase Operating Expenses as provided in Article Four. If
any Operating Expense, though paid in one year, relates to more than one
calendar year, at the option of Landlord such expense may be proportionately
allocated among such related calendar years. Operating Expenses shall include
the following, by way of illustration only and not limitation: (1) all Taxes;
(2) all insurance premiums and other costs (including deductibles), including
the cost of rental insurance; (3) all license, permit and inspection fees; (4)
all costs of utilities, fuels and related services, including water, sewer,
light, telephone, power and steam connection, service and related charges; (5)
all costs to repair, maintain and operate heating, ventilating and air
conditioning systems, including preventive maintenance; (6) all janitorial,
landscaping and security services; (7) all wages, salaries, payroll taxes,
fringe benefits and other labor costs, including the cost of workers'
compensation and disability insurance; (8) all costs of operation, maintenance
and repair of all parking facilities and other common areas; (9) all supplies,
materials, equipment and tools; (10) dues, assessments and other expenses
pursuant to any covenants, conditions and restrictions, or any reciprocal
easements, or any owner's association now or hereafter affecting the Project;
(11) modifications to the Building or the Project occasioned by Laws now or
hereafter in effect; (12) the total charges of any independent contractors
employed in the care, operation, maintenance, repair, leasing and cleaning of
the Project, including landscaping, roof maintenance, and repair, maintenance
and monitoring of life-safety systems, plumbing systems, electrical wiring and
Project signage; (13) the cost of accounting services necessary to compute the
rents and charges payable by tenants at the Project; (14) exterior window and
exterior wall cleaning and painting; (15) managerial and administrative
expenses; (16) all costs in connection with the exercise facility at the
Project; (17) all costs and expenses related to Landlord's retention of
consultants in connection with the routine review, inspection, testing,
monitoring, analysis and control of Hazardous Material, and retention of
consultants in connection with the clean-up of Hazardous Material (to the extent
not recoverable from a particular tenant of the Project), and all costs and
expenses related to the implementation of recommendations made by such
consultants concerning the use, generation, storage,
4
manufacture, production, storage, release, discharge, disposal or clean-up of
Hazardous Material on, under or about the Premises or the Project (to the extent
not recoverable from a particular tenant of the Project); (18) all capital
improvements made for the purpose of reducing or controlling other Operating
Expenses, and all other capital expenditures, but only as amortized over such
reasonable period as Landlord shall determine, together with interest thereon;
(19) all property management costs and fees, including all costs in connection
with the Project property management office; and (20) all fees or other charges
incurred in conjunction with voluntary or involuntary membership in any energy
conservation, air quality, environmental, traffic management or similar
organizations. Operating Expenses shall not include: (a) costs of alterations of
space to be occupied by new or existing tenants of the Project; (b) depreciation
charges; (c) interest and principal payments on loans (except for loans for
capital expenditures or improvements which Landlord is allowed to include in
Operating Expenses as provided above); (d) ground rental payments; (e) real
estate brokerage and leasing commissions; (f) advertising and marketing
expenses; (g) costs of Landlord reimbursed by insurance proceeds; (h) expenses
incurred in negotiating leases of other tenants in the Project or enforcing
lease obligations of other tenants in the Project; and (i) Landlord's or
Landlord's property manager's corporate general overhead or corporate general
administrative expenses.
PHASE: Phase means any individual Phase of the Project, as more particularly
described in the definition of Project.
PHASE OPERATING EXPENSES: Those Operating Expenses described in Section 4.01.
PREMISES: The Premises is comprised of two parts, respectively the 301
Chesapeake Space and the 575 Chesapeake Space located in the Buildings at the
addresses and as otherwise described in Section 1.01 and depicted on Exhibit A
---------
attached hereto.
PROJECT or PROPERTY: As of the date hereof, the Project is known as Seaport
Centre and consists of those buildings (including the Building) whose general
location is shown on the Site Plan of the Project attached as Exhibit C, located
---------
in Redwood City, California, associated vehicular and parking areas, landscaping
and improvements, together with the Land, any associated interests in real
property, and the personal property, fixtures, machinery, equipment, systems and
apparatus located in or used in conjunction with any of the foregoing. The
Project may also be referred to as the Property. As of the date hereof, the
Project is divided into Phase I and Phase II, which are generally designated on
Exhibit C, each of which may individually be referred to as a Phase. Landlord
---------
reserves the right from time to time to add or remove buildings, areas and
improvements to or from a Phase or the Project, or to add or remove a Phase to
or from the Project. In the event of any such addition or removal which affects
Rentable Area of the Project or a Phase, Landlord shall make a corresponding
recalculation and adjustment of any affected Rentable Area and Tenant's Share.
PROJECT OPERATING EXPENSES: Those Operating Expenses described in Section 4.01.
REAL PROPERTY: The Property excluding any personal property.
RENT: Collectively, Monthly Base Rent, Rent Adjustments and Rent Adjustment
Deposits, and all other charges, payments, late fees or other amounts required
to be paid by Tenant under this Lease.
RENT ADJUSTMENT: Any amounts owed by Tenant for payment of Operating Expenses.
The Rent Adjustments shall be determined and paid as provided in Article Four.
RENT ADJUSTMENT DEPOSIT: An amount equal to Landlord's estimate of the Rent
Adjustment attributable to each month of the applicable Adjustment Year. On or
before the Commencement Date and the beginning of each subsequent Adjustment
Year or with Landlord's Statement (defined in Article Four), Landlord may
estimate and notify Tenant in writing of its estimate of Operating Expenses,
including Project Operating Expenses, Building Operating Expenses and Phase
Operating Expenses, and Tenant's Share of each, for the applicable Adjustment
Year. The Rent Adjustment Deposit applicable for the calendar year in which the
Commencement Date occurs shall be the amount, if any, specified in Section
1.01(9). Nothing contained herein shall be construed to limit the right of
Landlord from time to time during any calendar year to revise its estimates of
Operating Expenses and to notify Tenant in writing thereof and of revision by
prospective adjustments in Tenant's Rent Adjustment Deposit payable over the
remainder of such year. The last estimate by Landlord shall remain in effect as
the applicable Rent Adjustment Deposit unless and until Landlord notifies Tenant
in writing of a change.
RENTABLE AREA OF THE BUILDING: The amount of square footage set forth in
Section 1.01(11)
RENTABLE AREA OF THE PHASE: The amount of square footage set forth in Section
1.01(12)
RENTABLE AREA OF THE PREMISES: The amount of square footage set forth in
Section 1.01(10).
RENTABLE AREA OF THE PROJECT: The amount of square footage set forth in Section
1.01(13), which represents the sum of the rentable area of all space intended
for occupancy in the Project.
SECURITY DEPOSIT: The funds specified in Section 1.01(14), if any, deposited by
Tenant with Landlord as security for Tenant's performance of its obligations
under this Lease.
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SUBSTANTIALLY COMPLETE: The completion of the Landlord Work or Tenant Work, as
the case may be, except for minor insubstantial details of construction,
decoration or mechanical adjustments which remain to be done.
TAXES: All federal, state and local governmental taxes, assessments (including
assessment bonds) and charges of every kind or nature, whether general,
special, ordinary or extraordinary, which Landlord shall pay or become obligated
to pay because of or in connection with the ownership, leasing, management,
control or operation of the Property or any of its components (including any
personal property used in connection therewith), which may also include any
rental or similar taxes levied in lieu of or in addition to general real and/or
personal property taxes. For purposes hereof, Taxes for any year shall be Taxes
which are assessed for any period of such year, whether or not such Taxes are
billed and payable in a subsequent calendar year. There shall be included in
Taxes for any year the amount of all fees, costs and expenses (including
reasonable attorneys' fees) paid by Landlord during such year in seeking or
obtaining any refund or reduction of Taxes. Taxes for any year shall be reduced
by the net amount of any tax refund received by Landlord attributable to such
year. If a special assessment payable in installments is levied against any
part of the Property, Taxes for any year shall include only the installment of
such assessment and any interest payable or paid during such year. Taxes shall
not include any federal or state inheritance, general income, gift or estate
taxes, except that if a change occurs in the method of taxation resulting in
whole or in part in the substitution of any such taxes, or any other assessment,
for any Taxes as above defined, such substituted taxes or assessments shall be
included in the Taxes.
TENANT ADDITIONS: Collectively, Landlord Work, Tenant Work and Tenant
Alterations.
TENANT ALTERATIONS: Any alterations, improvements, additions, installations or
construction in or to the Premises or any Real Property systems serving the
Premises done or caused to be done by Tenant after the date hereof, whether
prior to or after the Commencement Date (including Tenant Work, but excluding
Landlord Work).
TENANT DELAY: Any event or occurrence which delays the Substantial Completion
of the Landlord Work which is caused by or is described as follows:
(i) special work, changes, alterations or additions requested or made by
Tenant in the design or finish in any part of the Premises after approval
of the plans and specifications (as described in the Rider 2);
(ii) Tenant's delay in submitting plans, supplying information, approving
plans, specifications or estimates, giving authorizations or otherwise;
(iii) failure to approve and pay for such work as Landlord undertakes to
complete at Tenant's expense;
(iv) the performance or completion by Tenant or any person engaged by
Tenant of any work in or about the Premises; or
(v) failure to perform or comply with any obligation or condition
binding upon Tenant pursuant to Rider 2, including the failure to approve
and pay for such Landlord Work or other items if and to the extent Rider 2
provides they are to be approved or paid by Tenant.
TENANT WORK: All work installed or furnished to the Premises by Tenant in
connection with Tenant's initial occupancy pursuant to Rider 2.
TENANT'S BUILDING SHARE: The share as specified in Section 1.01(16) and Section
4.01.
TENANT'S PHASE: The Phase in which the Premises is located, as indicated in
Section 1.01(1).
TENANT'S PHASE SHARE: The share as specified in Section 1.01(16) and Section
4.01.
TENANT'S PROJECT SHARE: The share as specified in Section 1.01(16) and Section
4.01.
TENANT'S SHARE: Shall mean collectively, Tenant's respective shares of the
respective categories of Operating Expenses, as provided in Section 1.01(16) and
Section 4.01.
TERM: The term of this Lease commencing on the earlier to occur of the
Commencement Date for the 301 Chesapeake Space or the 575 Chesapeake Space, and
expiring on the Expiration Date.
TERMINATION DATE: The Expiration Date or such earlier date as this Lease
terminates or Tenant's right to possession of the Premises terminates.
WORKLETTER: (intentionally omitted)
6
ARTICLE TWO
PREMISES, TERM, FAILURE TO GIVE POSSESSION, COMMON AREAS AND PARKING
2.01 LEASE OF PREMISES
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the
Premises for the Term and upon the terms, covenants and conditions provided in
this Lease.
2.02 TERM
(a) The Commencement Date shall be the date specified as the Projected
Commencement Date, determined separately for each of the 301 Chesapeake Space
and the 575 Chesapeake Space, unless changed by operation of Rider 2.
(b) If the Commencement Date occurs either before or after the Projected
Commencement Date, then within thirty (30) days following the later to occur of
the Commencement Date for the 301 Chesapeake Space and the 000 Xxxxxxxxxx Xxxxx,
Xxxxxxxx and Tenant shall enter into an agreement (which is attached hereto as
Rider 1) confirming the Commencement Date and the Expiration Date. If Tenant
-------
fails to enter into such agreement, then the Commencement Date and the
Expiration Date shall be the dates designated by Landlord in such agreement.
2.03 FAILURE TO GIVE POSSESSION
(intentionally omitted; see Rider 2)
2.04 AREA OF PREMISES
Landlord and Tenant agree that for all purposes of this Lease the Rentable Area
of the Premises, the Rentable Area of the Building, the Rentable Area of the
Phase and the Rentable Area of the Project as set forth in Article One are
controlling, and are not subject to revision after the date of this Lease,
except as otherwise provided herein.
2.05 CONDITION OF PREMISES
(intentionally omitted; see Rider 2)
2.06 COMMON AREAS & PARKING
(a) Right to Use Common Areas. Tenant shall have the non-exclusive right,
-------------------------
in common with others, to the use of any common entrances, ramps, drives and
similar access and serviceways and other Common Areas in the Project. The
rights of Tenant hereunder in and to the Common Areas shall at all times be
subject to the rights of Landlord and other tenants and owners in the Project
who use the same in common with Tenant, and it shall be the duty of Tenant to
keep all the Common Areas free and clear of any obstructions created or
permitted by Tenant or resulting from Tenant's operations. Tenant shall not use
the Common Areas or common facilities of the Building or the Project, including
the Building's electrical room, parking lot or trash enclosures, for storage
purposes. Nothing herein shall affect the right of Landlord at any time to
remove any persons not authorized to use the Common Areas or common facilities
from such areas or facilities or to prevent their use by unauthorized persons.
(b) Changes in Common Areas. Landlord reserves the right, at any time and
-----------------------
from time to time to (i) make alterations in or additions to the Common Areas or
common facilities of the Project, including constructing new buildings or
changing the location, size, shape or number of the driveways, entrances,
parking spaces, parking areas, loading and unloading areas, landscape areas and
walkways, (ii) designate property to be included in or eliminate property from
the Common Areas or common facilities of the Project, (iii) close temporarily
any of the Common Areas or common facilities of the Project for maintenance
purposes, and (4) use the Common Areas and common facilities of the Project
while engaged in making alterations in or additions and repairs to the Project;
provided, however, that reasonable access to the Premises and parking at or near
the Project remains available.
(c) Parking. During the Term, Tenant shall have the right to use the
-------
number of Parking Spaces specified in Section 1.01(18) for parking on an
unassigned basis on that portion of the Project designated by Landlord from time
to time for parking. Tenant acknowledges and agrees that the parking spaces in
the Project's parking facility may include a mixture of spaces for compact
vehicles as well as full-size passenger automobiles, and that Tenant shall not
use parking spaces for vehicles larger than the striped size of the parking
spaces. Tenant shall not park any vehicles at the Project overnight. Tenant
shall comply with any and all parking rules and regulations if and as from time
to time established by Landlord. Tenant shall not allow any vehicles using
Tenant's parking privileges to be parked, loaded or unloaded except in
accordance with this Section, including in the areas and in the manner
designated by Landlord for such activities. If any vehicle is using the parking
or loading areas contrary to any provision of this Section, Landlord shall have
the right, in addition to all other rights and remedies of Landlord under this
Lease, to remove or tow away the vehicle without prior notice to Tenant, and the
cost thereof shall be paid to Landlord within ten (10) days after notice from
Landlord to Tenant.
7
ARTICLE THREE
RENT
Tenant agrees to pay to Landlord at the first office specified in Section
1.01(2), or to such other persons, or at such other places designated by
Landlord, without any prior demand therefor in immediately available funds and
without any deduction or offset whatsoever, Rent, including Monthly Base Rent
and Rent Adjustments in accordance with Article Four, during the Term. Monthly
Base Rent shall be paid monthly in advance on the first day of each month of the
Term, except that the first installment of Monthly Base Rent shall be paid by
Tenant to Landlord concurrently with execution of this Lease. Monthly Base Rent
shall be prorated for partial months within the Term. Unpaid Rent shall bear
interest at the Default Rate from the date due until paid. Tenant's covenant to
pay Rent shall be independent of every other covenant in this Lease.
ARTICLE FOUR
OPERATING EXPENSES, RENT ADJUSTMENTS AND PAYMENTS
4.01 TENANT'S SHARE OF OPERATING EXPENSES
Tenant shall pay Tenant's Share of Operating Expenses in the respective shares
of the respective categories of Operating Expenses as set forth below.
(a) Tenant's Project Share of Project Operating Expenses, which is
the percentage obtained by dividing the rentable square footage of the
Premises for the building(s) in which the Premises is located by the
rentable square footage of the Project and as of the date hereof equals the
percentage set forth in Section 1.01(16);
(b) Tenant's Building Share of Building Operating Expenses, which is
the percentage obtained by dividing the rentable square footage of the
Premises respectively for each building in which the Premises is located by
the total rentable square footage of such building and as of the date
hereof equals the percentage set forth in Section 1.01(16);
(c) Tenant's Phase Share of Phase Operating Expenses, which is the
percentage obtained by dividing the aggregate rentable square footage of
the Premises located in Tenant's Phase by the total rentable square footage
of Tenant's Phase and as of the date hereof equals the percentage set forth
in Section 1.01(16);
(d) Project Operating Expenses shall mean all Operating Expenses that
are not included as Phase Operating Expenses (defined below) and that are
not either Building Operating Expenses or operating expenses directly and
separately identifiable to the operation, maintenance or repair of any
other building located in the Project, but Project Operating Expenses
includes operating expenses allocable to any areas of the Building or any
other building during such time as such areas are made available by
Landlord for the general common use or benefit of all tenants of the
Project, and their employees and invitees, or the public, as such areas
currently exist and as they may be changed from time to time;
(e) Building Operating Expenses shall mean Operating Expenses that
are directly and separately identifiable to each building in which the
Premises or part thereof is located;
(f) Phase Operating Expenses shall mean Operating Expenses that
Landlord may allocate to a Phase as directly and separately identifiable to
all buildings located in the Phase (including but not limited to the
Building) and may include Project Operating Expenses that are separately
identifiable to a Phase;
(g) Landlord shall have the right to allocate a particular item or
portion of Operating Expenses as any one of Project Operating Expenses,
Building Operating Expenses or Phase Operating Expenses; however, in no
event shall any portion of Building Operating Expenses, Project Operating
Expenses or Phase Operating Expenses be assessed or counted against Tenant
more than once; and.
(h) Notwithstanding anything to the contrary contained in this
Section 4.01, as to each specific category of Operating Expense which one
or more tenants of the Building either pays directly to third parties or
specifically reimburses to Landlord (for example, separately contracted
janitorial services or property taxes directly reimbursed to Landlord),
then, on a category by category basis, the amount of Operating Expenses for
the affected period shall be adjusted as follows: (1) all such tenant
payments with respect to such category of expense and all of Landlord's
costs reimbursed thereby shall be excluded from Operating Expenses and
Tenant's Building Share, Tenant's Phase Share or Tenant's Project Share, as
the case may be, for such category of Operating Expense shall be adjusted
by excluding the square footage of all such tenants, and (2) if Tenant pays
or directly reimburses Landlord for such category of Operating Expense,
such category of Operating Expense shall be excluded from the determination
of Operating Expenses for the purposes of this Lease.
4.02 RENT ADJUSTMENTS
Tenant shall pay to Landlord Rent Adjustments with respect to each Adjustment
Year as follows:
8
(a) The Rent Adjustment Deposit representing Tenant's Share of
Landlord's estimate of Operating Expenses, as described in Section 4.01,
for the applicable Adjustment Year (or portion thereof) monthly during the
Term with the payment of Monthly Base Rent, except the first installment
which shall be paid by Tenant to Landlord concurrently with execution of
this Lease; and
(b) Any Rent Adjustments due in excess of the Rent Adjustment
Deposits in accordance with Section 4.02.
4.03 STATEMENT OF LANDLORD
Within one hundred twenty (120) days after the end of each calendar year or as
soon thereafter as reasonably possible, Landlord will furnish Tenant a statement
("Landlord's Statement") showing the following:
(a) Operating Expenses for the last Adjustment Year showing in
reasonable detail the actual Operating Expenses categorized among Project
Operating Expenses, Building Operating Expenses and Phase Operating
Expenses for such period and Tenant's Share of each as described in Section
4.01 above;
(b) The amount of Rent Adjustments due Landlord for the last
Adjustment Year, less credit for Rent Adjustment Deposits paid, if any; and
(c) Any change in the Rent Adjustment Deposit due monthly in the
current Adjustment Year, including the amount or revised amount due for
months preceding any such change pursuant to Landlord's Statement.
Tenant shall pay to Landlord within ten (10) days after receipt of such
statement any amounts for Rent Adjustments then due in accordance with
Landlord's Statement. Any amounts due from Landlord to Tenant pursuant to this
Section shall be credited to the Rent Adjustment Deposit next coming due, or
refunded to Tenant if the Term has already expired provided Tenant is not in
default hereunder. No interest or penalties shall accrue on any amounts which
Landlord is obligated to credit or refund to Tenant by reason of this Section
4.02. Landlord's failure to deliver Landlord's Statement or to compute the
amount of the Rent Adjustments shall not constitute a waiver by Landlord of its
right to deliver such items nor constitute a waiver or release of Tenant's
obligations to pay such amounts. The Rent Adjustment Deposit shall be credited
against Rent Adjustments due for the applicable Adjustment Year. During the
last complete calendar year or during any partial calendar year in which the
Lease terminates, Landlord may include in the Rent Adjustment Deposit its
estimate of Rent Adjustments which may not be finally determined until after the
termination of this Lease. Tenant's obligation to pay Rent Adjustments survives
the expiration or termination of the Lease. Notwithstanding the foregoing, in
no event shall the sum of Monthly Base Rent and the Rent Adjustments be less
than the Monthly Base Rent payable.
4.04 BOOKS AND RECORDS
Landlord shall maintain books and records showing Operating Expenses and Taxes
in accordance with sound accounting and management practices, consistently
applied. The Tenant or its representative (which representative shall be a
certified public accountant licensed to do business in the state in which the
Property is located and whose primary business is certified public accounting)
shall have the right, for a period of thirty (30) days following the date upon
which Landlord's Statement is delivered to Tenant, to examine the Landlord's
books and records with respect to the items in the foregoing statement of
Operating Expenses and Taxes during normal business hours, upon written notice,
delivered at least three (3) business days in advance. If Tenant does not object
in writing to Landlord's Statement within sixty (60) days of Tenant's receipt
thereof, specifying the nature of the item in dispute and the reasons therefor,
then Landlord's Statement shall be considered final and accepted by Tenant. Any
amount due to the Landlord as shown on Landlord's Statement, whether or not
disputed by Tenant as provided herein shall be paid by Tenant when due as
provided above, without prejudice to any such written exception.
4.05 TENANT OR LEASE SPECIFIC TAXES
In addition to Monthly Base Rent, Rent Adjustments, Rent Adjustment Deposits and
other charges to be paid by Tenant, Tenant shall pay to Landlord, upon demand,
any and all taxes payable by Landlord (other than federal or state inheritance,
general income, gift or estate taxes) whether or not now customary or within the
contemplation of the parties hereto: (a) upon, allocable to, or measured by the
Rent payable hereunder, including any gross receipts tax or excise tax levied by
any governmental or taxing body with respect to the receipt of such rent; or (b)
upon or with respect to the possession, leasing, operation, management,
maintenance, alteration, repair, use or occupancy by Tenant of the Premises or
any portion thereof; or (c) upon the measured value of Tenant's personal
property or trade fixtures located in the Premises or in any storeroom or any
other place in the Premises or the Property, or the areas used in connection
with the operation of the Property, it being the intention of Landlord and
Tenant that, to the extent possible, Tenant shall cause such taxes on personal
property or trade fixtures to be billed to and paid directly by Tenant; (d)
resulting from Landlord Work, Tenant Work or Tenant Alterations to the Premises,
whether title thereto is in Landlord or Tenant; or (e) upon this transaction.
Taxes paid by Tenant pursuant to this Section 4.05 shall not be included in any
computation of Taxes as part of Operating Expenses.
9
ARTICLE FIVE
SECURITY DEPOSIT
Tenant concurrently with the execution of this Lease shall pay to Landlord in
immediately available funds the Security Deposit. The Security Deposit may be
applied by Landlord to cure, in whole or part, any default of Tenant under this
Lease, and upon notice by Landlord of such application, Tenant shall replenish
the Security Deposit in full by paying to Landlord within ten (10) days of
demand the amount so applied. Landlord's application of the Security Deposit
shall not constitute a waiver of Tenant's default to the extent that the
Security Deposit does not fully compensate Landlord for all losses, damages,
costs and expenses incurred by Landlord in connection with such default and
shall not prejudice any other rights or remedies available to Landlord under
this Lease or by Law. Landlord shall not pay any interest on the Security
Deposit. Landlord shall not be required to keep the Security Deposit separate
from its general accounts. The Security Deposit shall not be deemed an advance
payment of Rent, nor a measure of damages for any default by Tenant under this
Lease, nor shall it be a bar or defense of any action which Landlord may at any
time commence against Tenant. In the absence of evidence satisfactory to
Landlord of an assignment of the right to receive the Security Deposit or the
remaining balance thereof, Landlord may return the Security Deposit to the
original Tenant, regardless of one or more assignments of this Lease. Upon the
transfer of Landlord's interest under this Lease, Landlord's obligation to
Tenant with respect to the Security Deposit shall terminate upon transfer to the
transferee of the Security Deposit, or any balance thereof. If Tenant shall
fully and faithfully comply with all the terms, provisions, covenants, and
conditions of this Lease, the Security Deposit, or any balance thereof, shall be
returned to Tenant within fifteen (15) business days after Landlord recovers
possession of the Premises. Tenant hereby waives any and all rights of Tenant
under the provisions of Section 1950.7 of the California Civil Code or other Law
regarding security deposits.
ARTICLE SIX
UTILITIES & SERVICES
6.01 LANDLORD'S GENERAL SERVICES
Landlord shall provide maintenance and services as provided in Article Eight.
6.02 TENANT TO OBTAIN & PAY DIRECTLY
(a) Tenant shall be responsible for and shall pay promptly all charges for
gas, electricity, sewer, heat, light, power, telephone, refuse pickup (to be
performed on a regularly scheduled basis so that accumulated refuse does not
exceed the capacity of Tenant's refuse bins), janitorial service and all other
utilities, materials and services furnished directly to or used by Tenant in, on
or about the Premises, together with all taxes thereon. Tenant shall contract
directly with the providing companies for such utilities and services.
(b) Notwithstanding any provision of the Lease to the contrary, without, in
each instance, the prior written consent of Landlord, as more particularly
provided in Article Nine, Tenant shall not: (i) make any alterations or
additions to the electric or gas equipment or systems or other Building systems.
Tenant's use of electric current shall at no time exceed the capacity of the
wiring, feeders and risers providing electric current to the Premises or the
Building. The consent of Landlord to the installation of electric equipment
shall not relieve Tenant from the obligation to limit usage of electricity to no
more than such capacity.
6.03 TELEPHONE SERVICES
All telegraph, telephone, and communication connections which Tenant may desire
outside the Premises, and the location of all wires in connection therewith,
shall be subject to Landlord's prior written approval, in Landlord's sole
discretion, and the work in connection therewith shall be performed by
contractors approved by Landlord, which approval shall not unreasonably be
withheld, and shall be subject to the reasonable direction of Landlord, except
that such approval is not required as to Tenant's choice of service providers or
telephone equipment serving Tenant exclusively (including cabling) within the
Premises and from the Premises in a route designated by Landlord to any
telephone cabinet or panel provided for Tenant's connection to the telephone
cable serving the Building, so long as Tenant's equipment does not require
connections different than or additional to those to the telephone cabinet or
panel provided. As to any such connections or work outside the Premises
requiring Landlord's approval, Landlord reserves the right to designate and
control the entity or entities providing telephone or other communication cable
installation, removal, repair and maintenance outside the Premises and to
restrict and control access to telephone cabinets or panels. In the event
Landlord designates a particular vendor or vendors to provide such cable
installation, removal, repair and maintenance for the Building, Tenant agrees to
abide by and participate in such program. Tenant shall be responsible for and
shall pay all costs incurred in connection with the installation of telephone
cables and communication wiring in the Premises, including any hook-up, access
and maintenance fees related to the installation of such wires and cables in the
Premises and the commencement of service therein, and the maintenance thereafter
of such wire and cables; and there shall be included in Operating Expenses for
the Building all installation, removal, hook-up or maintenance costs incurred by
Landlord in connection with telephone cables and communication wiring serving
the Building which are not allocable to any individual users of such service but
are allocable to the Building generally. If Tenant fails to maintain all
telephone cables and communication wiring installed by Tenant and such failure
affects or interferes with the operation or maintenance of any other telephone
cables or communication wiring serving the Building or the Project, Landlord or
any vendor hired by Landlord may enter into and upon the Premises forthwith and,
wherever such installations are located, perform such repairs, restorations or
alterations as Landlord deems necessary, in its good faith discretion, in order
to eliminate any such
10
interference (and Landlord may recover from Tenant all of Landlord's reasonable
costs in connection therewith). No later than the Termination Date, Tenant
agrees to remove all telephone cables and communication wiring installed in or
on the Building by Tenant for and during Tenant's occupancy, which Landlord
shall request Tenant to remove. Tenant agrees that neither Landlord nor any of
its agents or employees shall be liable to Tenant, or any of Tenant's employees,
agents, customers or invitees or anyone claiming through, by or under Tenant,
for any damages, injuries, losses, expenses, claims or causes of action because
of any interruption, diminution, delay or discontinuance at any time for any
reason in the furnishing of any telephone or other communication service to the
Premises and the Building except to the extent caused by the gross negligence or
willful misconduct of Landlord, its employees or agents.
6.04 FAILURE OR INTERRUPTION OF UTILITY OR SERVICE
To the extent that any equipment or machinery furnished or maintained by
Landlord outside the Premises is used in the delivery of utilities directly
obtained by Tenant pursuant to Section 6.02 and breaks down or ceases to
function properly, Landlord shall use reasonable diligence to repair same
promptly. In the event of any failure, stoppage or interruption of, or change
in, any utilities or services supplied by Landlord which are not directly
obtained by Tenant, Landlord shall use reasonable diligence to have service
promptly resumed. In either event covered by the preceding two sentences, if
the cause of any such failure, stoppage or interruption of, or change in,
utilities or services is within the control of a public utility, other public or
quasi-public entity, or utility provider outside Landlord's control,
notification to such utility or entity of such failure, stoppage or interruption
and request to remedy the same shall constitute "reasonable diligence" by
Landlord to have service promptly resumed. Notwithstanding any other provision
of this Section to the contrary, in the event of any failure, stoppage or
interruption of, or change in, any utility or other service furnished to the
Premises or the Project resulting from any cause, including changes in service
provider or Landlord's compliance with any voluntary or similar governmental or
business guidelines now or hereafter published or any requirements now or
hereafter established by any governmental agency, board or bureau having
jurisdiction over the operation of the Property: (a) Landlord shall not be
liable for, and Tenant shall not be entitled to, any abatement or reduction of
Rent; (b) no such failure, stoppage, or interruption of any such utility or
service shall constitute an eviction of Tenant or relieve Tenant of the
obligation to perform any covenant or agreement of this Lease to be performed by
Tenant; (c) Landlord shall not be in breach of this Lease nor be liable to
Tenant for damages or otherwise.
6.05 CHOICE OF SERVICE PROVIDER
Tenant acknowledges that Landlord may, at Landlord's sole option, to the extent
permitted by applicable law, elect to change, from time to time, the company or
companies which provide services (including electrical service, gas service,
water, telephone and technical services) to the Property, the Premises and/or
its occupants. Notwithstanding anything to the contrary set forth in this
Lease, Tenant acknowledges that Landlord has not and does not make any
representations or warranties concerning the identity or identities of the
company or companies which provide services to the Property and the Premises or
its occupants and Tenant acknowledges that the choice of service providers and
matters concerning the engagement and termination thereof shall be solely that
of Landlord. The foregoing provision is not intended to modify, amend, change or
otherwise derogate any provision of this Lease concerning the nature or type of
service to be provided or any specific information concerning the amount thereof
to be provided. Tenant agrees to cooperate with Landlord and each of its service
providers in connection with any change in service or provider.
6.06 SIGNAGE
Tenant shall not install any signage within the Project, the Building or the
Premises without obtaining the prior written approval of Landlord, which shall
not unreasonably be withheld provided that such signage shall comply with
Landlord's current Project signage criteria and all Laws, and Tenant shall be
responsible for the installation and maintenance of any such signage installed
by Tenant.
ARTICLE SEVEN
POSSESSION, USE AND CONDITION OF PREMISES
7.01 POSSESSION AND USE OF PREMISES
(a) Tenant shall occupy and use the Premises only for the uses specified in
Section 1.01(17) to conduct Tenant's business. Tenant shall not occupy or use
the Premises (or permit the use or occupancy of the Premises) for any purpose or
in any manner which: (1) is unlawful or in violation of any Law or Environmental
Law; (2) may be dangerous to persons or property or which may increase the cost
of, or invalidate, any policy of insurance carried on the Building or covering
its operations; (3) is contrary to or prohibited by the terms and conditions of
this Lease or the rules and regulations as provided in Article Eighteen; (4)
contrary to or prohibited by the articles, bylaws or rules of any owner's
association affecting the Project; (5) is improper, immoral, or objectionable;
(6) would obstruct or interfere with the rights of other tenants or occupants of
the Building or the Project, or injure or annoy them, or would tend to create or
continue a nuisance; or (7) would constitute any waste in or upon the Premises
or Project.
(b) Landlord and Tenant acknowledge that the Americans With Disabilities
Act of 1990 (42 U.S.C. (S)12101 et seq.) and regulations and guidelines
promulgated thereunder, as all of the same may be amended and supplemented from
time to time (collectively referred to herein as the "ADA") establish
requirements for business operations, accessibility and barrier removal, and
that such requirements may or may not apply to the Premises, the Building and
the Project depending on, among other things: (1) whether
11
Tenant's business is deemed a "public accommodation" or "commercial facility",
(2) whether such requirements are "readily achievable", and (3) whether a given
alteration affects a "primary function area" or triggers "path of travel"
requirements. The parties hereby agree that: (a) Landlord shall be responsible
for ADA Title III compliance in the Common Areas, except as provided below, (b)
Tenant shall be responsible for ADA Title III compliance in the Premises,
including any leasehold improvements or other work to be performed in the
Premises under or in connection with this Lease, (c) Landlord may perform, or
require that Tenant perform, and Tenant shall be responsible for the cost of,
ADA Title III "path of travel" requirements triggered by Tenant Additions in the
Premises, and (d) Landlord may perform, or require Tenant to perform, and Tenant
shall be responsible for the cost of, ADA Title III compliance in the Common
Areas necessitated by the Building being deemed to be a "public accommodation"
instead of a "commercial facility" as a result of Tenant's use of the Premises.
Tenant shall be solely responsible for requirements under Title I of the ADA
relating to Tenant's employees.
(c) Landlord and Tenant agree to cooperate and use commercially reasonable
efforts to participate in traffic management programs generally applicable to
businesses located in or about the area and Tenant shall encourage and support
van and car pooling by, and staggered and flexible working hours for, its office
workers and service employees to the extent reasonably permitted by the
requirements of Tenant's business. Neither this Section or any other provision
of this Lease is intended to or shall create any rights or benefits in any other
person, firm, company, governmental entity or the public.
(d) Tenant agrees to cooperate with Landlord and to comply with any and all
guidelines or controls concerning energy management imposed upon Landlord by
federal or state governmental organizations or by any energy conservation
association to which Landlord is a party or which is applicable to the Building.
7.02 HAZARDOUS MATERIAL
(a) Tenant shall not use, generate, manufacture, produce, store, release,
discharge, or dispose of, on, under or about the Premises or any part of the
Project, or transport to or from the Premises or any part of the Project, any
Hazardous Material or allow its employees, agents, contractors, licensees,
invitees or any other person or entity to do so. The foregoing covenant shall
not extend to insignificant amounts of substances typically found or used in
general office applications so long as (i) such substances are maintained only
in such quantities as are reasonably necessary for Tenant's operations in the
Premises, (ii) such substances are used strictly in accordance with the
manufacturers' instructions therefor and all applicable laws, (iii) such
substances are not disposed of in or about the Building or the Project in a
manner which would constitute a release or discharge thereof, and (iv) all such
substances are removed from the Building and the Project by Tenant upon the
expiration or earlier termination of this Lease. Tenant shall, within thirty
(30) days after demand therefor, provide to Landlord a written list identifying
any Hazardous Material then maintained by Tenant in the Building, the use of
each such Hazardous Material so maintained by Tenant together with written
certification by Tenant stating, in substance, that neither Tenant nor any
person for whom Tenant is responsible has released or discharged any Hazardous
Material in or about the Building or the Project. Landlord's right of entry
pursuant to Section 7.03 of this Lease shall include the right to enter and
inspect the Premises for violations of Tenant's covenants herein.
(b) Hazardous Material shall include by way of illustration, and without
limiting the generality of the definition of Hazardous Material in Section 1.03,
the following: (i) those substances included within the definitions of
"hazardous substances," "hazardous materials," "toxic substances" or "solid
waste" under all present and future federal, state and local laws (whether under
common law, statute, rule, regulation or otherwise) relating to the protection
of human health or the environment, including California Senate Xxxx 245
(Statutes of 1987, Chapter 1302), the Safe Drinking Water and Toxic Enforcement
Act of 1986 (commonly known as Proposition 65) and the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Section 9601 et seq., the Resource Conservation and Recovery Act of 1976,
-- ---
42 U.S.C. Section 6901 et seq., and the Hazardous Materials Transportation Act,
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49 U.S.C. Sections 1801, et seq., all as heretofore and hereafter amended, or in
-- ---
any regulations promulgated pursuant to said laws; (ii) those substances defined
as "hazardous wastes" in Section 25117 of the California Health & Safety Code or
as "hazardous substances" in Section 25316 of the California Health & Safety
Code, or in any regulations promulgated pursuant to said laws; (iii) those
substances listed in the United States Department of Transportation Table (49
CFR 172.101 and amendments thereto) or designated by the Environmental
Protection Agency (or any successor agency) as hazardous substances (see, e.g.,
--- ----
40 CFR Part 302 and amendments thereto); (iv) such other substances, materials
and wastes which are or become regulated under applicable local, state or
federal law or by the United States government or which are or become classified
as hazardous or toxic under federal, state or local laws or regulations,
including California Health & Safety Code, Division 20, and Title 26 of the
California Code of Regulations; and (v) any material, waste or substance which
contains petroleum, asbestos or polychlorinated biphenyls, is designated as a
"hazardous substance" pursuant to Section 311 of the Clean Water Act of 1977, 33
U.S.C. Sections 1251, et seq. (33 U.S.C. (S) 1321), is listed pursuant to
------
Section 307 of the Clean Water Act of 1977 (33 U.S.C. (S) 1317), or contains any
flammable, explosive or radioactive material.
(c) To the extent permitted by Law, Tenant hereby indemnifies, and agrees
to protect, defend and hold the Indemnitees harmless, against any and all
actions, claims, demands, liability, costs and expenses, including attorneys'
fees and expenses for the defense thereof, arising out of any and all of (i) the
introduction into the Project by Tenant, its employees, agents, contractors,
licensees, invitees or any other person or entity for whom Tenant is responsible
(collectively, "Tenant's Agents") of any Hazardous Material, (ii) the usage by
Tenant or Tenant's Agents of Hazardous Material in or about the Project, (iii)
the discharge or release in or about the Project by Tenant or Tenant's Agents of
any Hazardous Material, (iv) any injury to
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or death of persons or damage to or destruction of property resulting from the
use by Tenant or Tenant's Agents of Hazardous Material in or about the Project,
and (v) any failure of Tenant or Tenant's Agents to observe the covenants of
this Section 7.02. In case of any action or proceeding brought against the
Indemnitees by reason of any such claim, upon notice from Landlord, Tenant
covenants to defend such action or proceeding by counsel chosen by Landlord, in
Landlord's sole discretion. Landlord reserves the right to settle, compromise or
dispose of any and all actions, claims and demands related to the foregoing
indemnity.
(d) Tenant acknowledges that the sewer piping at the Project is made of ABS
plastic. Accordingly, without Landlord's prior written consent, which may be
given or withheld in Landlord's sole discretion, only ordinary domestic sewage
is permitted to be put into the drains at the Premises. UNDER NO CIRCUMSTANCES
SHALL Tenant EVER DEPOSIT ANY ESTERS OR KETONES (USUALLY FOUND IN SOLVENTS TO
CLEAN UP PETROLEUM PRODUCTS) IN THE DRAINS AT THE PREMISES. If Tenant desires
to put any substances other than ordinary domestic sewage into the drains, it
shall first submit to Landlord a complete description of each such substance,
including its chemical composition, and a sample of such substance suitable for
laboratory testing. Landlord shall promptly determine whether or not the
substance can be deposited into the drains and its determination shall be
absolutely binding on Tenant. Upon demand, Tenant shall reimburse Landlord for
expenses incurred by Landlord in making such determination. If any substances
not so approved hereunder are deposited in the drains in Tenant's Premises,
Tenant shall be liable to Landlord for all damages resulting therefrom,
including but not limited to all costs and expenses incurred by Landlord in
repairing or replacing the piping so damaged.
(e) Upon any violation of any of the foregoing covenants, in addition to
all remedies available to a landlord against the defaulting tenant, including
but not limited to those set forth in Article Eleven of this Lease, Tenant
expressly agrees that upon any such violation Landlord may, at its option (i)
immediately terminate this Lease by giving written notice to Tenant of such
termination, or (ii) continue this Lease in effect until compliance by Tenant
with its clean-up and removal covenant (notwithstanding the expiration of the
Term). No action by Landlord hereunder shall impair the obligations of Tenant
pursuant to this Section 7.02.
7.03 LANDLORD ACCESS TO PREMISES; APPROVALS
(a) Tenant shall permit Landlord to erect, use and maintain pipes, ducts,
wiring and conduits in and through the Premises, so long as Tenant's use, layout
or design of the Premises is not materially affected or altered. Landlord or
Landlord's agents shall have the right to enter upon the Premises in the event
of an emergency or for regularly scheduled janitorial or cleaning services (if
any) without notice, or upon at least twenty-four (24) hours notice to inspect
the Premises, to perform other janitorial services and other services (if any),
to conduct safety and other testing in the Premises and to make such repairs,
alterations, improvements or additions to the Premises or the Building or other
parts of the Property as Landlord may deem necessary or desirable (including all
alterations, improvements and additions in connection with a change in service
provider or providers). Janitorial and cleaning services (if any) shall be
performed after normal business hours and shall not materially interfere with
Tenant's occupancy and use of the Premises. Any entry or work by Landlord may
be during normal business hours and Landlord may use reasonable efforts to
ensure that any entry or work shall not materially interfere with Tenant's
occupancy and use of the Premises.
(b) If Tenant shall not be personally present to permit an entry into the
Premises when for any reason an entry therein shall be necessary or permissible,
Landlord (or Landlord's agents), after attempting to notify Tenant (unless
Landlord believes an emergency situation exists), may enter the Premises without
rendering Landlord or its agents liable therefor, and without relieving Tenant
of any obligations under this Lease.
(c) Landlord may enter the Premises for the purpose of conducting such
inspections, tests and studies as Landlord may deem desirable or necessary to
confirm Tenant's compliance with all Laws and Environmental Laws or for other
purposes necessary in Landlord's reasonable judgment to ensure the sound
condition of the Property and the systems serving the Property. Landlord's
rights under this Section 7.03 (c) are for Landlord's own protection only, and
Landlord has not, and shall not be deemed to have assumed, any responsibility to
Tenant or any other party as a result of the exercise or non-exercise of such
rights, for compliance with Laws or Environmental Laws or for the accuracy or
sufficiency of any item or the quality or suitability of any item for its
intended use.
(d) Landlord may do any of the foregoing, or undertake any of the
inspection or work described in the preceding paragraphs without such action
constituting an actual or constructive eviction of Tenant, in whole or in part,
or giving rise to an abatement of Rent by reason of loss or interruption of
business of the Tenant, or otherwise.
(e) The review, approval or consent of Landlord with respect to any item
required or permitted under this Lease is for Landlord's own protection only,
and Landlord has not, and shall not be deemed to have assumed, any
responsibility to Tenant or any other party, as a result of the exercise or non-
exercise of such rights, for compliance with Laws or Environmental Laws or for
the accuracy or sufficiency of any item or the quality or suitability of any
item for its intended use.
7.04 QUIET ENJOYMENT
Landlord covenants, in lieu of any implied covenant of quiet possession or quiet
enjoyment, that so long as Tenant is in compliance with the covenants and
conditions set forth in this Lease, Tenant shall have the right
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to quiet enjoyment of the Premises without hindrance or interference from
Landlord or those claiming through Landlord, and subject to the covenants and
conditions set forth in the Lease and to the rights of any Mortgagee or ground
lessor.
ARTICLE EIGHT
MAINTENANCE
8.01 LANDLORD'S MAINTENANCE
Subject to Article Fourteen and Section 8.02, Landlord shall maintain the
structural portions of the Building, the roof, exterior walls and exterior
doors, foundation, and underslab standard sewer system of the Building in good,
clean and safe condition, and shall use reasonable efforts, through Landlord's
program of regularly scheduled preventive maintenance, to keep the Building's
standard heating, ventilation and air conditioning ("HVAC") equipment in
reasonably good order and condition. Notwithstanding the foregoing, Landlord
shall have no responsibility to repair the Building's standard heating,
ventilation and air conditioning equipment, and all such repairs shall be
performed by Tenant pursuant to the terms of Section 8.02. Landlord shall also
(a) maintain the landscaping, parking facilities and other Common Areas of the
Project, and (b) wash the outside of exterior windows at intervals determined by
Landlord. Except as provided in Article Fourteen and Article Fifteen, there
shall be no abatement of rent, no allowance to Tenant for diminution of rental
value and no liability of Landlord by reason of inconvenience, annoyance or any
injury to or interference with Tenant's business arising from the making of or
the failure to make any repairs, alterations or improvements in or to any
portion of the Project or in or to any fixtures, appurtenances or equipment
therein. Tenant waives the right to make repairs at Landlord's expense under
any law, statute or ordinance now or hereafter in effect.
8.02 TENANT'S MAINTENANCE
Subject to the provisions of Article Fourteen, Tenant shall, at Tenant's sole
cost and expense, make all repairs to the Premises and fixtures therein which
Landlord is not required to make pursuant to Section 8.01, including repairs to
the interior walls, ceilings and windows of the Premises, the interior doors,
Tenant's signage, and the electrical, life-safety, plumbing and heating,
ventilation and air conditioning systems located within or serving the Premises
and shall maintain the Premises, the fixtures and utilities systems therein, and
the area immediately surrounding the Premises (including all garbage
enclosures), in a good, clean and safe condition. Tenant shall deliver to
Landlord a copy of any maintenance contract entered into by Tenant with respect
to the Premises. Tenant shall also, at Tenant's expense, keep any non-standard
heating, ventilating and air conditioning equipment and other non-standard
equipment in the Building in good condition and repair, using contractors
approved in advance, in writing, by Landlord. Notwithstanding Section 8.01
above, but subject to the waivers set forth in Section 16.04, Tenant will pay
for any repairs to the Building or the Project which are caused by any
negligence or carelessness, or by any willful and wrongful act, of Tenant or its
assignees, subtenants or employees, or of the respective agents of any of the
foregoing persons, or of any other persons permitted in the Building or
elsewhere in the Project by Tenant or any of them. Tenant will maintain the
Premises, and will leave the Premises upon termination of this Lease, in a safe,
clean, neat and sanitary condition.
ARTICLE NINE
ALTERATIONS AND IMPROVEMENTS
9.01 TENANT ALTERATIONS
(a) The following provisions shall apply to the completion of any Tenant
Alterations:
(1) Tenant shall not, except as provided herein, without the prior
written consent of Landlord, which consent shall not be unreasonably
withheld, make or cause to be made any Tenant Alterations in or to the
Premises or any Property systems serving the Premises. Prior to making any
Tenant Alterations, Tenant shall give Landlord ten (10) days prior written
notice (or such earlier notice as would be necessary pursuant to applicable
Law) to permit Landlord sufficient time to post appropriate notices of non-
responsibility. Subject to all other requirements of this Article Nine,
Tenant may undertake Decoration work without Landlord's prior written
consent. Tenant shall furnish Landlord with the names and addresses of all
contractors and subcontractors and copies of all contracts. All Tenant
Alterations shall be completed at such time and in such manner as Landlord
may from time to time designate, and only by contractors or mechanics
approved by Landlord, which approval shall not be unreasonably withheld,
provided, however, that Landlord may, in its sole discretion, specify the
engineers and contractors to perform all work relating to the Building's
systems (including the mechanical, heating, plumbing, security,
ventilating, air-conditioning, electrical, communication and the fire and
life safety systems in the Building). The contractors, mechanics and
engineers who may be used are further limited to those whose work will not
cause or threaten to cause disharmony or interference with Landlord or
other tenants in the Building and their respective agents and contractors
performing work in or about the Building. Landlord may further condition
its consent upon Tenant furnishing to Landlord and Landlord approving prior
to the commencement of any work or delivery of materials to the Premises
related to the Tenant Alterations such of the following as specified by
Landlord: architectural plans and specifications, opinions from Landlord's
engineers stating that the Tenant Alterations will not in any way adversely
affect the Building's systems, necessary permits and licenses, certificates
of insurance, and such other documents in such form reasonably requested by
Landlord. Landlord may, in the exercise of reasonable judgment, request
that Tenant provide Landlord with appropriate evidence of Tenant's ability
to complete and pay for the completion of the Tenant Alterations such as a
performance bond
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or letter of credit. Upon completion of the Tenant Alterations, Tenant
shall deliver to Landlord an as-built mylar and digitized (if available)
set of plans and specifications for the Tenant Alterations.
Notwithstanding any provision hereof to the contrary, in any building
leased entirely to Tenant, Tenant may undertake Tenant Alterations
without Landlord's prior written consent, but subject to all other
requirements of this Article Nine, provided that each of the following
conditions are satisfied: (i) the Tenant Alterations to be performed
without such prior written consent over the consecutive twelve (12) month
period of the Term ending on the date of such request, in the aggregate,
will cost no more than Thirty-five Thousand Dollars ($35,000.00); (ii)
such Tenant Alterations do not affect the facade or roof of the building,
or involve any of the structural elements of the building.
(2) Tenant shall pay the cost of all Tenant Alterations and the cost
of decorating the Premises and any work to the Property occasioned
thereby. In connection with completion of any Tenant Alterations, Tenant
shall pay Landlord a construction fee not to exceed one and one-half
percent (1.5%) of the hard costs of the Tenant Alterations. Upon
completion of Tenant Alterations, Tenant shall furnish Landlord with
contractors' affidavits and full and final waivers of lien and receipted
bills covering all labor and materials expended and used in connection
therewith and such other documentation reasonably requested by Landlord
or Mortgagee.
(3) Tenant agrees to complete all Tenant Alterations (i) in
accordance with all Laws, Environmental Laws, all requirements of
applicable insurance companies and in accordance with Landlord's standard
construction rules and regulations, and (ii) in a good and workmanlike
manner with the use of good grades of materials. Tenant shall notify
Landlord immediately if Tenant receives any notice of violation of any
Law in connection with completion of any Tenant Alterations and shall
immediately take such steps as are necessary to remedy such violation. In
no event shall such supervision or right to supervise by Landlord nor
shall any approvals given by Landlord under this Lease constitute any
warranty by Landlord to Tenant of the adequacy of the design, workmanship
or quality of such work or materials for Tenant's intended use or of
compliance with the requirements of Section 9.01(a)(3)(i) and (ii) above
or impose any liability upon Landlord in connection with the performance
of such work.
(b) All Tenant Additions to the Premises whether installed by Landlord
or Tenant, shall without compensation or credit to Tenant, become part of the
Premises and the property of Landlord at the time of their installation and
shall remain in the Premises, unless pursuant to Article Twelve, Tenant may
remove them or is required to remove them at Landlord's request.
9.02 LIENS
Tenant shall not permit any lien or claim for lien of any mechanic, laborer or
supplier or any other lien to be filed against the Building, the Land, the
Premises, or any other part of the Property arising out of work performed, or
alleged to have been performed by, or at the direction of, or on behalf of
Tenant. If any such lien or claim for lien is filed, Tenant shall within ten
(10) days of receiving notice of such lien or claim (a) have such lien or claim
for lien released of record or (b) deliver to Landlord a bond in form, content,
amount, and issued by surety, satisfactory to Landlord, indemnifying,
protecting, defending and holding harmless the Indemnitees against all costs and
liabilities resulting from such lien or claim for lien and the foreclosure or
attempted foreclosure thereof. If Tenant fails to take any of the above
actions, Landlord, in addition to its rights and remedies under Article Eleven,
without investigating the validity of such lien or claim for lien, may pay or
discharge the same and Tenant shall, as payment of additional Rent hereunder,
reimburse Landlord upon demand for the amount so paid by Landlord, including
Landlord's expenses and attorneys' fees.
ARTICLE TEN
ASSIGNMENT AND SUBLETTING
10.01 ASSIGNMENT AND SUBLETTING
(a) Without the prior written consent of Landlord, which may be withheld
in Landlord's sole discretion, Tenant may not sublease, assign, mortgage,
pledge, hypothecate or otherwise transfer or permit the transfer of this Lease
or the encumbering of Tenant's interest therein in whole or in part, by
operation of Law or otherwise or permit the use or occupancy of the Premises, or
any part thereof, by anyone other than Tenant, provided, however, if Landlord
chooses not to recapture the space proposed to be subleased or assigned as
provided in Section 10.02, Landlord shall not unreasonably withhold its consent
to a subletting or assignment under this Section 10.01. Tenant agrees that the
provisions governing sublease and assignment set forth in this Article Ten shall
be deemed to be reasonable. If Tenant desires to enter into any sublease of the
Premises or assignment of this Lease, Tenant shall deliver written notice
thereof to Landlord ("Tenant's Notice"), together with the identity of the
proposed subtenant or assignee and the proposed principal terms thereof and
financial and other information sufficient for Landlord to make an informed
judgment with respect to such proposed subtenant or assignee at least thirty
(30) days prior to the commencement date of the term of the proposed sublease or
assignment. If Tenant proposes to sublease less than all of the Rentable Area of
the Premises, the space proposed to be sublet and the space retained by Tenant
must each be a marketable unit as reasonably determined by Landlord and
otherwise in compliance with all Laws. Landlord shall notify Tenant in writing
of its approval or disapproval of the proposed sublease or assignment or its
decision to exercise its rights under Section 10.02 within fifteen (15) days
after receipt of Tenant's Notice (and all required information). Tenant shall
submit for Landlord's approval (which approval shall not be unreasonably
withheld) any advertising which Tenant or its agents intend to use with respect
to the space proposed to be sublet.
15
(b) With respect to Landlord's consent to an assignment or sublease,
Landlord may take into consideration any factors which Landlord may deem
relevant, and the reasons for which Landlord's denial shall be deemed to be
reasonable shall include, without limitation, the following:
(i) the business reputation or creditworthiness of any proposed
subtenant or assignee is not acceptable to Landlord; or
(ii) in Landlord's reasonable judgment the proposed assignee or
subtenant would diminish the value or reputation of the Building or
Landlord; or
(iii) any proposed assignee's or subtenant's use of the Premises would
violate Section 7.01 of the Lease or would violate the provisions of any
other leases of tenants in the Project;
(iv) the proposed assignee or subtenant is either a governmental agency,
a school or similar operation, or a medical related practice; or
(v) the proposed subtenant or assignee is a bona fide prospective
tenant of Landlord in the Project as demonstrated by a written proposal
dated within ninety (90) days prior to the date of Tenant's request; or
(vi) the proposed subtenant or assignee would materially increase the
estimated pedestrian and vehicular traffic to and from the Premises and
the Building.
In no event shall Landlord be obligated to consider a consent to any proposed
assignment of the Lease which would assign less than the entire Premises. In
the event Landlord wrongfully withholds its consent to any proposed sublease of
the Premises or assignment of the Lease, Tenant's sole and exclusive remedy
therefor shall be to seek specific performance of Landlord's obligations to
consent to such sublease or assignment.
(c) Any sublease or assignment shall be expressly subject to the terms
and conditions of this Lease. Any subtenant or assignee shall execute such
documents as Landlord may reasonably require to evidence such subtenant or
assignee's assumption of the obligations and liabilities of Tenant under this
Lease. Tenant shall deliver to Landlord a copy of all agreements executed by
Tenant and the proposed subtenant and assignee with respect to the Premises.
Landlord's approval of a sublease, assignment, hypothecation, transfer or third
party use or occupancy shall not constitute a waiver of Tenant's obligation to
obtain Landlord's consent to further assignments or subleases, hypothecations,
transfers or third party use or occupancy.
(d) For purposes of this Article Ten, an assignment shall be deemed to
include a change in the majority control of Tenant, resulting from any transfer,
sale or assignment of shares of stock or membership interests of Tenant
occurring by operation of Law or otherwise, and includes any merger,
acquisition, consolidation or reorganization, except as otherwise provided in
this Subsection or Subsections (e) or (f) below. Notwithstanding any provision
of this Section to the contrary, an assignment for purposes of this Article does
not include any transfer of control of the stock or membership interests of
Tenant through (i) any public offering of shares of stock in Tenant in
accordance with applicable State and Federal law, rules, regulations and orders
if thereafter the stock shall be listed and publicly traded through the New York
Stock Exchange, American Stock Exchange or Pacific Stock Exchange, or listed and
publicly traded through the NASDAQ national market and its price listed at least
daily in the Wall Street Journal; or (ii) public sale of such stock effected
-------------------
through such Exchanges or the NASDAQ national market. If Tenant is a
partnership, any change in the partners of Tenant shall be deemed to be an
assignment.
(e) Notwithstanding anything to the contrary in Sections 10.01(a) and
10.02, but subject to Section 10.03, Tenant shall have the right, without the
prior written consent of Landlord, to assign this Lease to an Affiliate (defined
below) or to sublease the Premises or any part thereof to an Affiliate provided
that (i) Landlord receives thirty (30) days prior written notice of an
assignment or sublease; (ii) the Affiliate's net worth is not less than Tenant's
net worth immediately prior to the assignment or subletting (except with respect
to any sublease or subleases to the same entity, in either case in the aggregate
for less than half of the then Rentable Area of the Premises); (iii) the
Affiliate has proven experience in the operation of a first-class business of a
type consistent with the use of the Building; (iv) the Affiliate assumes (except
in the event of a sublease) in writing satisfactory to Landlord all of Tenant's
obligations and liability under this Lease and delivers to Landlord a proposed
assumption no later than fifteen (15) days prior to the effective date of the
assignment and a fully executed original of such assumption no later than the
effective date; (v) Landlord receives no later than the effective date a fully
executed copy of an assignment or sublease agreement between Tenant and the
Affiliate; and (vi) promptly after Landlord's written request, Tenant and the
Affiliate provide such reasonable documents or information which Landlord
reasonably requests for the purpose of substantiating whether or not the
assignment or sublease is to an Affiliate.
(f) For purposes of this Lease, Affiliate shall mean any Person (as
defined below) which: (i) is controlled by, controls, or is under common control
with Tenant; or (ii) is the corporation or other entity (the "Successor")
resulting from a merger, consolidation or non-bankruptcy reorganization with
Tenant; or (iii) purchases substantially all the assets of Tenant as a going
concern. The word Person means an individual, corporation, limited liability
company, partnership, trust, firm or other entity. For purposes of this
definition, the word "control," shall mean, with respect to a Person that is a
corporation or a limited liability company, the right to exercise, directly or
indirectly, more than sixty percent (60%) of the voting rights attributable to
the
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shares or membership interests of the controlled Person and, with respect to a
Person that is not a corporation, the possession, directly or indirectly, of the
power at all times to direct or cause the direction of the management of the
controlled Person.
10.02 RECAPTURE
Landlord shall have the option to exclude from the Premises covered by this
Lease ("recapture"), the space proposed to be sublet or subject to the
assignment, effective as of the proposed commencement date of such sublease or
assignment. If Landlord elects to recapture, Tenant shall surrender possession
of the space proposed to be subleased or subject to the assignment to Landlord
on the effective date of recapture of such space from the Premises, such date
being the Termination Date for such space. Effective as of the date of
recapture of any portion of the Premises pursuant to this section, the Monthly
Base Rent, Rentable Area of the Premises and Tenant's Share shall be adjusted
accordingly. Provided that Tenant is not then in Default and there exists no
act or omission on the part of Tenant which, with the passage of time or the
giving of notice, or both, would constitute a Default, then the required amount
of the Security Deposit shall be reduced proportionately, and within fifteen
(15) business days after the effective date of the recapture Landlord shall
refund to Tenant the proportionate amount held by Landlord attributable to the
recaptured portion.
10.03 EXCESS RENT
Tenant shall pay Landlord on the first day of each month during the term of the
sublease or assignment, seventy-five percent (75%) of the amount by which the
sum of all rent and other consideration (direct or indirect) due from the
subtenant or assignee for such month exceeds: (i) that portion of the Monthly
Base Rent and Rent Adjustments due under this Lease for said month which is
allocable to the space sublet or assigned; and (ii) the following costs and
expenses for the subletting or assignment of such space: (1) brokerage
commissions and attorneys' fees and expenses, (2) the actual costs paid in
making any improvements or substitutions in the Premises required by any
sublease or assignment; and (3) "free rent" periods, costs of any inducements or
concessions given to subtenant or assignee, moving costs, and other amounts in
respect of such subtenant's or assignee's other leases or occupancy
arrangements. All such costs and expenses shall be amortized over the term of
the sublease or assignment pursuant to sound accounting principles.
10.04 TENANT LIABILITY
In the event of any sublease or assignment, whether or not with Landlord's
consent, Tenant shall not be released or discharged from any liability, whether
past, present or future, under this Lease, including any liability arising from
the exercise of any renewal or expansion option, to the extent such exercise is
expressly permitted by Landlord. Tenant's liability shall remain primary, and
in the event of default by any subtenant, assignee or successor of Tenant in
performance or observance of any of the covenants or conditions of this Lease,
Landlord may proceed directly against Tenant without the necessity of exhausting
remedies against said subtenant, assignee or successor. After any assignment,
Landlord may consent to subsequent assignments or subletting of this Lease, or
amendments or modifications of this Lease with assignees of Tenant, without
notifying Tenant, or any successor of Tenant, and without obtaining its or their
consent thereto, and such action shall not relieve Tenant or any successor of
Tenant of liability under this Lease. If Landlord grants consent to such
sublease or assignment, Tenant shall pay all reasonable attorneys' fees and
expenses incurred by Landlord with respect to such assignment or sublease. In
addition, if Tenant has any options to extend the term of this Lease or to add
other space to the Premises, such options shall not be available to any
subtenant or assignee, directly or indirectly without Landlord's express written
consent, which may be withheld in Landlord's sole discretion.
10.05 ASSUMPTION AND ATTORNMENT
If Tenant shall assign this Lease as permitted herein, the assignee shall
expressly assume all of the obligations of Tenant hereunder in a written
instrument satisfactory to Landlord and furnished to Landlord not later than
fifteen (15) days prior to the effective date of the assignment. If Tenant
shall sublease the Premises as permitted herein, Tenant shall, at Landlord's
option, within fifteen (15) days following any request by Landlord, obtain and
furnish to Landlord the written agreement of such subtenant to the effect that
the subtenant will attorn to Landlord and will pay all subrent directly to
Landlord.
ARTICLE ELEVEN
DEFAULT AND REMEDIES
11.01 EVENTS OF DEFAULT
The occurrence or existence of any one or more of the following shall constitute
a "Default" by Tenant under this Lease:
(i) Tenant fails to pay any installment or other payment of Rent
including Rent Adjustment Deposits or Rent Adjustments within three (3)
days after the date when due;
(ii) Tenant fails to observe or perform any of the other covenants,
conditions or provisions of this Lease and fails to cure such default
within thirty (30) days after written notice thereof to Tenant, unless
the default involves a hazardous condition, which shall be cured
forthwith or unless the failure to perform is a Default for which this
Lease specifies there is no cure or grace period, provided
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however, if the default is one to which the thirty (30) day cure period
applies and of such nature that it cannot reasonably be cured within
thirty (30) days, Tenant shall be in Default if Tenant either fails to
commence to cure such default within thirty (30) days or fails diligently
to prosecute such cure to completion or in any event fails to complete
such cure within ninety (90) days after such written notice from
Landlord;
(iii) the interest of Tenant in this Lease is levied upon under
execution or other legal process;
(iv) a petition is filed by or against Tenant to declare Tenant
bankrupt or seeking a plan of reorganization or arrangement under any
Chapter of the Bankruptcy Act, or any amendment, replacement or
substitution therefor, or to delay payment of, reduce or modify Tenant's
debts, which in the case of an involuntary action is not discharged
within thirty (30) days;
(v) Tenant is declared insolvent by Law or any assignment of
Tenant's property is made for the benefit of creditors;
(vi) a receiver is appointed for Tenant or Tenant's property,
which appointment is not discharged within thirty (30) days;
(vii) any action taken by or against Tenant to reorganize or modify
Tenant's capital structure in a materially adverse way which in the case
of an involuntary action is not discharged within thirty (30) days;
(viii) upon the dissolution of Tenant; or
(ix) upon the third occurrence within any Lease Year that Tenant
fails to pay Rent when due or has breached a particular covenant of this
Lease (whether or not such failure or breach is thereafter cured within
any stated cure or grace period or statutory period).
11.02 LANDLORD'S REMEDIES
(a) A Default shall constitute a breach of the Lease for which Landlord
shall have the rights and remedies set forth in this Section 11.02 and all other
rights and remedies set forth in this Lease or now or hereafter allowed by Law,
whether legal or equitable, and all rights and remedies of Landlord shall be
cumulative and none shall exclude any other right or remedy.
(b) With respect to a Default, at any time Landlord may terminate
Tenant's right to possession by written notice to Tenant stating such election.
Any written notice required pursuant to Section 11.01 shall constitute notice of
unlawful detainer pursuant to California Code of Civil Procedure Section 1161
if, at Landlord's sole discretion, it states Landlord's election that Tenant's
right to possession is terminated after expiration of any period required by Law
or any longer period required by Section 11.01. Upon the expiration of the
period stated in Landlord's written notice of termination (and unless such
notice provides an option to cure within such period and Tenant cures the
Default within such period), Tenant's right to possession shall terminate and
this Lease shall terminate, and Tenant shall remain liable as hereinafter
provided. Upon such termination in writing of Tenant's right to possession,
Landlord shall have the right, subject to applicable Law, to re-enter the
Premises and dispossess Tenant and the legal representatives of Tenant and all
other occupants of the Premises by unlawful detainer or other summary
proceedings, or otherwise as permitted by Law, regain possession of the Premises
and remove their property (including their trade fixtures, personal property and
those Tenant Additions which Tenant is required or permitted to remove under
Article Twelve), but Landlord shall not be obligated to effect such removal, and
such property may, at Landlord's option, be stored elsewhere, sold or otherwise
dealt with as permitted by Law, at the risk of, expense of and for the account
of Tenant, and the proceeds of any sale shall be applied pursuant to Law.
Landlord shall in no event be responsible for the value, preservation or
safekeeping of any such property. Tenant hereby waives all claims for damages
that may be caused by Landlord's removing or storing Tenant's personal property
pursuant to this Section or Section 12.01, and Tenant hereby indemnifies, and
agrees to defend, protect and hold harmless, the Indemnitees from any and all
loss, claims, demands, actions, expenses, liability and cost (including
attorneys' fees and expenses) arising out of or in any way related to such
removal or storage. Upon such written termination of Tenant's right to
possession and this Lease, Landlord shall have the right to recover damages for
Tenant's Default as provided herein or by Law, including the following damages
provided by California Civil Code Section 1951.2:
(1) the worth at the time of award of the unpaid Rent which had
been earned at the time of termination;
(2) the worth at the time of award of the amount by which the
unpaid Rent which would have been earned after termination until the time
of award exceeds the amount of such Rent loss that Tenant proves could
reasonably have been avoided;
(3) the worth at the time of award of the amount by which the
unpaid Rent for the balance of the term of this Lease after the time of
award exceeds the amount of such Rent loss that Tenant proves could be
reasonably avoided; and
(4) any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which in the ordinary course
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of things would be likely to result therefrom. The word "rent" as used in
this Section 11.02 shall have the same meaning as the defined term Rent
in this Lease. The "worth at the time of award" of the amount referred to
in clauses (1) and (2) above is computed by allowing interest at the
Default Rate. The worth at the time of award of the amount referred to in
clause (3) above is computed by discounting such amount at the discount
rate of the Federal Reserve Bank of San Francisco at the time of award
plus one percent (1%). For the purpose of determining unpaid Rent under
clause (3) above, the monthly Rent reserved in this Lease shall be deemed
to be the sum of the Monthly Base Rent, and monthly Storage Space Rent,
if any, and the amounts last payable by Tenant as Rent Adjustments for
the calendar year in which Landlord terminated this Lease as provided
hereinabove.
(c) Even if Tenant is in Default and/or has abandoned the Premises, this
Lease shall continue in effect for so long as Landlord does not terminate
Tenant's right to possession by written notice as provided in Section 11.02(b)
above, and Landlord may enforce all its rights and remedies under this Lease,
including the right to recover Rent as it becomes due under this Lease. In such
event, Landlord shall have all of the rights and remedies of a landlord under
California Civil Code Section 1951.4 (lessor may continue Lease in effect after
Tenant's Default and abandonment and recover Rent as it becomes due, if Tenant
has the right to sublet or assign, subject only to reasonable limitations), or
any successor statute. During such time as Tenant is in Default, if Landlord
has not terminated this Lease by written notice and if Tenant requests
Landlord's consent to an assignment of this Lease or a sublease of the Premises,
subject to Landlord's option to recapture pursuant to Section 10.02, Landlord
shall not unreasonably withhold its consent to such assignment or sublease.
Tenant acknowledges and agrees that the provisions of Article Ten shall be
deemed to constitute reasonable limitations of Tenant's right to assign or
sublet. Tenant acknowledges and agrees that in the absence of written notice
pursuant to Section 11.02(b) above terminating Tenant's right to possession, no
other act of Landlord shall constitute a termination of Tenant's right to
possession or an acceptance of Tenant's surrender of the Premises, including
acts of maintenance or preservation or efforts to relet the Premises or the
appointment of a receiver upon initiative of Landlord to protect Landlord's
interest under this Lease or the withholding of consent to a subletting or
assignment, or terminating a subletting or assignment, if in accordance with
other provisions of this Lease.
(d) In the event that Landlord seeks an injunction with respect to a
breach or threatened breach by Tenant of any of the covenants, conditions or
provisions of this Lease, Tenant agrees to pay the premium for any bond required
in connection with such injunction.
(e) Tenant hereby waives any and all rights to relief from forfeiture,
redemption or reinstatement granted by Law (including California Civil Code of
Procedure Sections 1174 and 1179) in the event of Tenant being evicted or
dispossessed for any cause or in the event of Landlord obtaining possession of
the Premises by reason of Tenant's Default or otherwise;
(f) When this Lease requires giving or service of a notice, that notice
shall replace rather than supplement any equivalent or similar statutory notice,
including any equivalent or similar notices required by California Code of Civil
Procedure Section 1161 or any similar or successor statute. When a statute
requires service of a notice in a particular manner, service of that notice (or
a similar notice required by this Lease) in the manner required by Article
Twenty-four shall replace and satisfy the statutory service-of-notice
procedures, including those required by Code of Civil Procedure section 1162 or
any similar or successor statute.
(g) The voluntary or other surrender or termination of this Lease, or a
mutual termination or cancellation thereof, shall not work a merger and shall
terminate all or any existing assignments, subleases, subtenancies or
occupancies permitted by Tenant, except if and as otherwise specified in writing
by Landlord.
(h) No delay or omission in the exercise of any right or remedy of
Landlord upon any default by Tenant, and no exercise by Landlord of its rights
pursuant to Section 26.15 to perform any duty which Tenant fails timely to
perform, shall impair any right or remedy or be construed as a waiver. No
provision of this Lease shall be deemed waived by Landlord unless such waiver is
in a writing signed by Landlord. The waiver by Landlord of any breach of any
provision of this Lease shall not be deemed a waiver of any subsequent breach of
the same or any other provision of this Lease.
11.03 ATTORNEY'S FEES
In the event any party brings any suit or other proceeding with respect to the
subject matter or enforcement of this Lease, the prevailing party (as determined
by the court, agency or other authority before which such suit or proceeding is
commenced) shall, in addition to such other relief as may be awarded, be
entitled to recover attorneys' fees, expenses and costs of investigation as
actually incurred, including court costs, expert witness fees, costs and
expenses of investigation, and all attorneys' fees, costs and expenses in any
such suit or proceeding (including in any action or participation in or in
connection with any case or proceeding under the Bankruptcy Xxxx, 00 Xxxxxx
Xxxxxx Code Sections 101 et seq., or any successor statutes, in establishing or
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enforcing the right to indemnification, in appellate proceedings, or in
connection with the enforcement or collection of any judgment obtained in any
such suit or proceeding).
11.04 BANKRUPTCY
The following provisions shall apply in the event of the bankruptcy or
insolvency of Tenant:
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(a) In connection with any proceeding under Chapter 7 of the Bankruptcy
Code where the trustee of Tenant elects to assume this Lease for the purposes of
assigning it, such election or assignment, may only be made upon compliance with
the provisions of (b) and (c) below, which conditions Landlord and Tenant
acknowledge to be commercially reasonable. In the event the trustee elects to
reject this Lease then Landlord shall immediately be entitled to possession of
the Premises without further obligation to Tenant or the trustee.
(b) Any election to assume this Lease under Chapter 11 or 13 of the
Bankruptcy Code by Tenant as debtor-in-possession or by Tenant's trustee (the
"Electing Party") must provide for:
The Electing Party to cure or provide to Landlord adequate assurance that
it will cure all monetary defaults under this Lease within fifteen (15)
days from the date of assumption and it will cure all nonmonetary
defaults under this Lease within thirty (30) days from the date of
assumption. Landlord and Tenant acknowledge such condition to be
commercially reasonable.
(c) If the Electing Party has assumed this Lease or elects to assign
Tenant's interest under this Lease to any other person, such interest may be
assigned only if the intended assignee has provided adequate assurance of future
performance (as herein defined), of all of the obligations imposed on Tenant
under this Lease.
For the purposes hereof, "adequate assurance of future performance" means
that Landlord has ascertained that each of the following conditions has
been satisfied:
(i) The assignee has submitted a current financial statement,
certified by its chief financial officer, which shows a net worth and
working capital in amounts sufficient to assure the future performance by
the assignee of Tenant's obligations under this Lease; and
(ii) Landlord has obtained consents or waivers from any third
parties which may be required under a lease, mortgage, financing
arrangement, or other agreement by which Landlord is bound, to enable
Landlord to permit such assignment.
(d) Landlord's acceptance of rent or any other payment from any trustee,
receiver, assignee, person, or other entity will not be deemed to have waived,
or waive, the requirement of Landlord's consent, Landlord's right to terminate
this Lease for any transfer of Tenant's interest under this Lease without such
consent, or Landlord's claim for any amount of Rent due from Tenant.
11.05 LANDLORD'S DEFAULT
Landlord shall be in default hereunder in the event Landlord has not begun and
pursued with reasonable diligence the cure of any failure of Landlord to meet
its obligations hereunder within thirty (30) days after the receipt by Landlord
of written notice from Tenant of the alleged failure to perform. In no event
shall Tenant have the right to terminate or rescind this Lease as a result of
Landlord's default as to any covenant or agreement contained in this Lease.
Tenant hereby waives such remedies of termination and rescission and hereby
agrees that Tenant's remedies for default hereunder and for breach of any
promise or inducement shall be limited to a suit for damages and/or injunction.
In addition, Tenant hereby covenants that, prior to the exercise of any such
remedies, it will give Mortgagee notice and a reasonable time to cure any
default by Landlord.
ARTICLE TWELVE
SURRENDER OF PREMISES
12.01 IN GENERAL
Upon the Termination Date, Tenant shall surrender and vacate the Premises
immediately and deliver possession thereof to Landlord in a clean, good and
tenantable condition, ordinary wear and tear, and damage caused by Landlord
excepted. Tenant shall deliver to Landlord all keys to the Premises. Tenant
shall remove from the Premises all movable personal property of Tenant and
Tenant's trade fixtures, including, subject to Section 6.04, cabling for any of
the foregoing. Tenant shall be entitled to remove such Tenant Additions which
at the time of their installation Landlord and Tenant agreed may be removed by
Tenant. Tenant shall also remove such other Tenant Additions as required by
Landlord, including any Tenant Additions containing Hazardous Material. Tenant
immediately shall repair all damage resulting from removal of any of Tenant's
property, furnishings or Tenant Additions, shall close all floor, ceiling and
roof openings and shall restore the Premises to a tenantable condition as
reasonably determined by Landlord. If any of the Tenant Additions which were
installed by Tenant involved the lowering of ceilings, raising of floors or the
installation of specialized wall or floor coverings or lights, then Tenant shall
also be obligated to return such surfaces to their condition prior to the
commencement of this Lease. Tenant shall also be required to close any
staircases or other openings between floors. In the event possession of the
Premises is not delivered to Landlord when required hereunder, or if Tenant
shall fail to remove those items described above, Landlord may (but shall not be
obligated to), at Tenant's expense, remove any of such property and store, sell
or otherwise deal with such property as provided in Section 11.02(b), including
the waiver and indemnity obligations provided in that Section, and undertake, at
Tenant's expense, such restoration work as Landlord deems necessary or
advisable.
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12.02 LANDLORD'S RIGHTS
All property which may be removed from the Premises by Landlord shall be
conclusively presumed to have been abandoned by Tenant and Landlord may deal
with such property as provided in Section 11.02(b), including the waiver and
indemnity obligations provided in that Section. Tenant shall also reimburse
Landlord for all costs and expenses incurred by Landlord in removing any of
Tenant Additions and in restoring the Premises to the condition required by this
Lease at the Termination Date.
ARTICLE THIRTEEN
HOLDING OVER
Tenant shall pay Landlord the greater of (i) one hundred and twenty-five percent
(125%) of the monthly Rent payable for the month immediately preceding the
holding over (including increases for Rent Adjustments which Landlord may
reasonably estimate) or, (ii) one hundred and twenty-five percent (125%) of the
fair market rental value of the Premises as reasonably determined by Landlord
for each month or portion thereof that Tenant retains possession of the
Premises, or any portion thereof, after the Termination Date (without reduction
for any partial month that Tenant retains possession). Tenant shall also pay
all damages sustained by Landlord by reason of such retention of possession.
The provisions of this Article shall not constitute a waiver by Landlord of any
re-entry rights of Landlord and Tenant's continued occupancy of the Premises
shall be as a tenancy in sufferance.
ARTICLE FOURTEEN
DAMAGE BY FIRE OR OTHER CASUALTY
14.01 SUBSTANTIAL UNTENANTABILITY
(a) If any fire or other casualty (whether insured or uninsured) renders
all or a substantial portion of the Premises or either Building in which the
Premises is located untenantable, Landlord shall, with reasonable promptness
after the occurrence of such damage, estimate the length of time that will be
required to substantially complete the repair and restoration and shall by
notice advise Tenant of such estimate ("Landlord's Notice"). If Landlord
estimates that the amount of time required to substantially complete such repair
and restoration will exceed one hundred eighty (180) days from the date such
damage occurred, then Landlord, or Tenant if all or a substantial portion of the
Premises is rendered untenantable, shall have the right to terminate this Lease
as of the date of such damage upon giving written notice to the other at any
time within twenty (20) days after delivery of Landlord's Notice, provided that
if Landlord so chooses, Landlord's Notice may also constitute such notice of
termination. Notwithstanding any provision of the foregoing to the contrary, in
the event the above-described damage or destruction affects only one of the
Buildings in which the Premises is located, then Landlord or Tenant shall be
entitled to terminate this Lease only to the extent of the Premises in the
Building in which the casualty occurred, and the Lease shall continue in full
force and effect to the extent of the remainder, if any, of the Premises.
(b) In the event that the Building is damaged or destroyed to the extent
of more than twenty-five percent (25%) of its replacement cost or to any extent
if no insurance proceeds or insufficient insurance proceeds are receivable by
Landlord, or if the buildings at the Project shall be damaged to the extent of
fifty percent (50%) or more of the replacement value or to any extent if no
insurance proceeds or insufficient insurance proceeds are receivable by
Landlord, and regardless of whether or not the Premises be damaged, Landlord may
elect by written notice to Tenant given within thirty (30) days after the
occurrence of the casualty to terminate this Lease in lieu of so restoring the
Premises, in which event this Lease shall terminate as of the date specified in
Landlord's notice, which date shall be no later than sixty (60) days following
the date of Landlord's notice. Provided however, in the event the above-
described damage or destruction to the Building affects only one of the
Buildings in which the Premises is located and in the event that Landlord is not
entitled or elects not to terminate this Lease by reason of damage to the
Project as described above, then Landlord shall be entitled to terminate this
Lease only to the extent of the Premises in the Building in which the casualty
occurred, and the Lease shall continue in full force and effect to the extent of
the remainder, if any, of the Premises.
(c) Unless this Lease is terminated as provided in the preceding
Subsections 14.01 (a) and (b), Landlord shall proceed with reasonable promptness
to repair and restore the Premises to its condition as existed prior to such
casualty, subject to reasonable delays for insurance adjustments and Force
Majeure delays, and also subject to zoning Laws and building codes then in
effect. Landlord shall have no liability to Tenant, and Tenant shall not be
entitled to terminate this Lease if such repairs and restoration are not in fact
completed within the time period estimated by Landlord so long as Landlord shall
proceed with reasonable diligence to complete such repairs and restoration.
(d) Tenant acknowledges that Landlord shall be entitled to the full
proceeds of any insurance coverage, whether carried by Landlord or Tenant, for
damages to the Premises, except for those proceeds of Tenant's insurance of its
own personal property and equipment which would be removable by Tenant at the
Termination Date. All such insurance proceeds shall be payable to Landlord
whether or not the Premises are to be repaired and restored, provided, however,
if this Lease is not terminated and the parties proceed to repair and restore
Tenant Additions at Tenant's cost, to the extent Landlord received proceeds of
Tenant's insurance covering Tenant Additions, such proceeds shall be applied to
reimburse Tenant for its cost of repairing and restoring Tenant Additions.
(e) Notwithstanding anything in this Article Fourteen to the contrary:
(i) Landlord shall have no duty pursuant to this Section to repair or restore
any portion of any Tenant Additions or to expend for any
21
repair or restoration of the Premises or Building amounts in excess of insurance
proceeds paid to Landlord and available for repair or restoration; and (ii)
Tenant shall not have the right to terminate this Lease pursuant to this Section
if any damage or destruction was caused by the act or neglect of Tenant, its
agent or employees. Whether or not the Lease is terminated pursuant to this
Article Fourteen, in no event shall Tenant be entitled to any compensation or
damages for loss of the use of the whole or any part of the Premises or for any
inconvenience or annoyance occasioned by any such damage, destruction,
rebuilding or restoration of the Premises or the Building or access thereto.
(f) Any repair or restoration of the Premises performed by Tenant shall
be in accordance with the provisions of Article Nine hereof.
14.02 INSUBSTANTIAL UNTENANTABILITY
Unless this Lease is terminated as provided in the preceding Subsections 14.01
(a) and (b), then Landlord shall proceed to repair and restore the Building or
the Premises other than Tenant Additions, with reasonable promptness, unless
such damage is to the Premises and occurs during the last six (6) months of the
Term, in which event either Tenant or Landlord shall have the right to terminate
this Lease as of the date of such casualty by giving written notice thereof to
the other within twenty (20) days after the date of such casualty.
Notwithstanding the foregoing, Landlord's obligation to repair shall be limited
in accordance with the provisions of Section 14.01 above.
14.03 RENT ABATEMENT
Except for the negligence or willful act of Tenant or its agents, employees,
contractors or invitees, if all or any part of the Premises are rendered
untenantable by fire or other casualty and this Lease is not terminated, Monthly
Base Rent and Rent Adjustments shall xxxxx for that part of the Premises which
is untenantable on a per diem basis from the date of the casualty until Landlord
has Substantially Completed the repair and restoration work in the Premises
which it is required to perform, provided, that as a result of such casualty,
Tenant does not occupy the portion of the Premises which is untenantable during
such period.
14.04 WAIVER OF STATUTORY REMEDIES
The provisions of this Lease, including this Article Fourteen, constitute an
express agreement between Landlord and Tenant with respect to any and all damage
to, or destruction of, the Premises or the Property or any part of either, and
any Law, including Sections 1932(2), 1933(4), 1941 and 1942 of the California
Civil Code, with respect to any rights or obligations concerning damage or
destruction shall have no application to this Lease or to any damage to or
destruction of all or any part of the Premises or the Property or any part of
either, and are hereby waived.
ARTICLE FIFTEEN
EMINENT DOMAIN
15.01 TAKING OF WHOLE OR SUBSTANTIAL PART
In the event the whole or any substantial part of all the Buildings in which the
Premises is located or all of the Premises is taken or condemned by any
competent authority for any public use or purpose (including a deed given in
lieu of condemnation) and is thereby rendered untenantable, this Lease shall
terminate as of the date title vests in such authority or any earlier date on
which possession is required to be surrendered to such authority, and Monthly
Base Rent and Rent Adjustments shall be apportioned as of the Termination Date.
Further, if at least twenty-five percent (25%) of the rentable area of the
Project is taken or condemned by any competent authority for any public use or
purpose (including a deed given in lieu of condemnation), and regardless of
whether or not the Premises be so taken or condemned, Landlord may elect by
written notice to Tenant to terminate this Lease as of the date title vests in
such authority or any earlier date on which possession is required to be
surrendered to such authority, and Monthly Base Rent and Rent Adjustments shall
be apportioned as of the Termination Date. Landlord may, without any obligation
to Tenant, agree to sell or convey to the taking authority the Premises, the
Building, Tenant's Phase, the Project or any portion thereof sought by the
taking authority, free from this Lease and the right of Tenant hereunder,
without first requiring that any action or proceeding be instituted or, if
instituted, pursued to a judgment. Notwithstanding anything to the contrary
herein set forth, in the event the taking of the Building or Premises is
temporary (for less than the remaining term of the Lease), Landlord may elect
either (i) to terminate this Lease or (ii) permit Tenant to receive the entire
award attributable to the Premises in which case Tenant shall continue to pay
Rent and this Lease shall not terminate.
15.02 TAKING OF PART
In the event a taking or condemnation by any competent authority (or delivery of
a deed in lieu of condemnation) affects less than all the Buildings in which the
Premises is located and this Lease is not terminated, the Lease shall be amended
to reduce or increase, as the case may be, the Monthly Base Rent and Tenant's
Share to reflect the Rentable Area of the Premises or Building, as the case may
be, remaining after any such taking or condemnation. Landlord, upon receipt and
to the extent of the award in condemnation (or proceeds of sale) shall make
necessary repairs and restorations to the Premises (exclusive of Tenant
Additions) and to the Building to the extent necessary to constitute the portion
of the Building not so taken or condemned as a complete architectural and
economically efficient unit. Notwithstanding the foregoing, if as a result of
any taking, or a governmental order that the grade of any street or alley
adjacent to the Building is to be changed and such taking or change of grade
makes it
22
necessary or desirable to substantially remodel or restore the Building or
prevents the economical operation of the Building, Landlord shall have the right
to terminate this Lease upon ninety (90) days prior written notice to Tenant.
15.03 COMPENSATION
Landlord shall be entitled to receive the entire award (or sale proceeds) from
any such taking, condemnation or sale without any payment to Tenant, and Tenant
hereby assigns to Landlord Tenant's interest, if any, in such award; provided,
however, Tenant shall have the right separately to pursue against the condemning
authority a separate award in respect of the loss, if any, to Tenant Additions
paid for by Tenant without any credit or allowance from Landlord, for fixtures
or personal property of Tenant, or for relocation or business interruption
expenses, so long as there is no diminution of Landlord's award as a result.
ARTICLE SIXTEEN
INSURANCE
16.01 TENANT'S INSURANCE
Tenant, at Tenant's expense, agrees to maintain in force, with a company or
companies acceptable to Landlord, during the Term: (a) Commercial General
Liability Insurance on a primary basis and without any right of contribution
from any insurance carried by Landlord covering the Premises on an occurrence
basis against all claims for personal injury, bodily injury, death and property
damage, including contractual liability covering the indemnification provisions
in this Lease. Such insurance shall be for such limits that are reasonably
required by Landlord from time to time but not less than a combined single limit
of Five Million and No/100 Dollars ($5,000,000.00); (b) Workers' Compensation
and Employers' Liability Insurance to the extent required by and in accordance
with the Laws of the State of California; (c) "All Risks" property insurance in
an amount adequate to cover the full replacement cost of all Tenant Additions to
the Premises, equipment, installations, fixtures and contents of the Premises in
the event of loss; (d) In the event a motor vehicle is to be used by Tenant in
connection with its business operation from the Premises, Comprehensive
Automobile Liability Insurance coverage with limits of not less than Three
Million and No/100 Dollars ($3,000,000.00) combined single limit coverage
against bodily injury liability and property damage liability arising out of the
use by or on behalf of Tenant, its agents and employees in connection with this
Lease, of any owned, non-owned or hired motor vehicles; and (e) such other
insurance or coverages as Landlord reasonably requires.
16.02 FORM OF POLICIES
Each policy referred to in 16.01 shall satisfy the following requirements. Each
policy shall (i) name Landlord and the Indemnitees as additional insureds
(except Workers' Compensation and Employers' Liability Insurance), (ii) be
issued by one or more responsible insurance companies licensed to do business in
the State of California reasonably satisfactory to Landlord, (iii) where
applicable, provide for deductible amounts satisfactory to Landlord and not
permit co-insurance, (iv) shall provide that such insurance may not be canceled
or amended without thirty (30) days' prior written notice to the Landlord, and
(v) each policy of "All-Risks" property insurance shall provide that the policy
shall not be invalidated should the insured waive in writing prior to a loss,
any or all rights of recovery against any other party for losses covered by such
policies. Tenant shall deliver to Landlord, certificates of insurance and at
Landlord's request, copies of all policies and renewals thereof to be maintained
by Tenant hereunder, not less than ten (10) days prior to the Commencement Date
and not less than ten (10) days prior to the expiration date of each policy.
16.03 LANDLORD'S INSURANCE
Landlord agrees to purchase and keep in full force and effect during the Term
hereof, including any extensions or renewals thereof, insurance under policies
issued by insurers of recognized responsibility, qualified to do business in the
State of California on the Building in amounts not less than the greater of
eighty (80%) percent of the then full replacement cost (without depreciation) of
the Building (above foundations and excluding Tenant Additions to the Premises)
or an amount sufficient to prevent Landlord from becoming a co-insurer under the
terms of the applicable policies, against fire and such other risks as may be
included in standard forms of all risk coverage insurance reasonably available
from time to time. Landlord agrees to maintain in force during the Term,
Commercial General Liability Insurance covering the Building on an occurrence
basis against all claims for personal injury, bodily injury, death and property
damage. Such insurance shall be for a combined single limit of Five Million and
No/100 Dollars ($5,000,000.00). Neither Landlord's obligation to carry such
insurance nor the carrying of such insurance shall be deemed to be an indemnity
by Landlord with respect to any claim, liability, loss, cost or expense due, in
whole or in part, to Tenant's negligent acts or omissions or willful misconduct.
Without obligation to do so, Landlord may, in its sole discretion from time to
time, carry insurance in amounts greater and/or for coverage additional to the
coverage and amounts set forth above.
16.04 WAIVER OF SUBROGATION
(a) Landlord agrees that, if obtainable at no, or minimal, additional
cost, and so long as the same is permitted under the laws of the State of
California, it will include in its "All Risks" policies appropriate clauses
pursuant to which the insurance companies (i) waive all right of subrogation
against Tenant with respect to losses payable under such policies and/or (ii)
agree that such policies shall not be invalidated should the insured waive in
writing prior to a loss any or all right of recovery against any party for
losses covered by such policies.
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(b) Tenant agrees to include, if obtainable at no, or minimal,
additional cost, and so long as the same is permitted under the laws of the
State of California, in its "All Risks" insurance policy or policies on Tenant
Additions to the Premises, whether or not removable, and on Tenant's furniture,
furnishings, fixtures and other property removable by Tenant under the
provisions of this Lease appropriate clauses pursuant to which the insurance
company or companies (i) waive the right of subrogation against Landlord and/or
any tenant of space in the Building with respect to losses payable under such
policy or policies and/or (ii) agree that such policy or policies shall not be
invalidated should the insured waive in writing prior to a loss any or all right
of recovery against any party for losses covered by such policy or policies. If
Tenant is unable to obtain in such policy or policies either of the clauses
described in the preceding sentence, Tenant shall, if legally possible and
without necessitating a change in insurance carriers, have Landlord named in
such policy or policies as an additional insured. If Landlord shall be named as
an additional insured in accordance with the foregoing, Landlord agrees to
endorse promptly to the order of Tenant, without recourse, any check, draft, or
order for the payment of money representing the proceeds of any such policy or
representing any other payment growing out of or connected with said policies,
and Landlord does hereby irrevocably waive any and all rights in and to such
proceeds and payments.
(c) Provided that Landlord's right of full recovery under its policy or
policies aforesaid is not adversely affected or prejudiced thereby, Landlord
hereby waives any and all right of recovery which it might otherwise have
against Tenant, its servants, agents and employees, for loss or damage occurring
to the Real Property and the fixtures, appurtenances and equipment therein,
except Tenant Additions, to the extent the same is covered by Landlord's
insurance, notwithstanding that such loss or damage may result from the
negligence or fault of Tenant, its servants, agents or employees. Provided that
Tenant's right of full recovery under its aforesaid policy or policies is not
adversely affected or prejudiced thereby, Tenant hereby waives any and all
right of recovery which it might otherwise have against Landlord, its servants,
and employees and against every other tenant in the Real Property who shall have
executed a similar waiver as set forth in this Section 16.04 (c) for loss or
damage to Tenant Additions, whether or not removable, and to Tenant's furniture,
furnishings, fixtures and other property removable by Tenant under the
provisions hereof to the extent the same is covered or coverable by Tenant's
insurance required under this Lease, notwithstanding that such loss or damage
may result from the negligence or fault of Landlord, its servants, agents or
employees, or such other tenant and the servants, agents or employees thereof.
(d) Landlord and Tenant hereby agree to advise the other promptly if the
clauses to be included in their respective insurance policies pursuant to
subparagraphs (a) and (b) above cannot be obtained on the terms hereinbefore
provided and thereafter to furnish the other with a certificate of insurance or
copy of such policies showing the naming of the other as an additional insured,
as aforesaid. Landlord and Tenant hereby also agree to notify the other
promptly of any cancellation or change of the terms of any such policy which
would affect such clauses or naming. All such policies which name both Landlord
and Tenant as additional insureds shall, to the extent obtainable, contain
agreements by the insurers to the effect that no act or omission of any
additional insured will invalidate the policy as to the other additional
insureds.
16.05 NOTICE OF CASUALTY
Tenant shall give Landlord notice in case of a fire or accident in the Premises
promptly after Tenant is aware of such event.
ARTICLE SEVENTEEN
WAIVER OF CLAIMS AND INDEMNITY
17.01 WAIVER OF CLAIMS
To the extent permitted by Law, Tenant releases the Indemnitees from, and waives
all claims for, damage to person or property sustained by the Tenant or any
occupant of the Premises or the Property resulting directly or indirectly from
any existing or future condition, defect, matter or thing in and about the
Premises or the Property or any part of either or any equipment or appurtenance
therein, or resulting from any accident in or about the Premises or the
Property, or resulting directly or indirectly from any act or neglect of any
tenant or occupant of the Property or of any other person, including Landlord's
agents and servants, except to the extent caused by the willful and wrongful act
of any of the Indemnitees. To the extent permitted by Law, Tenant hereby waives
any consequential damages, compensation or claims for inconvenience or loss of
business, rents, or profits as a result of such injury or damage, whether or not
caused by the willful and wrongful act of any of the Indemnitees. If any such
damage, whether to the Premises or the Property or any part of either, or
whether to Landlord or to other tenants in the Property, results from any act or
neglect of Tenant, its employees, servants, agents, contractors, invitees or
customers, Tenant shall be liable therefor and Landlord may, at Landlord's
option, repair such damage and Tenant shall, upon demand by Landlord, as payment
of additional Rent hereunder, reimburse Landlord within ten (10) days of demand
for the total cost of such repairs, in excess of amounts, if any, paid to
Landlord under insurance covering such damages. Tenant shall not be liable for
any such damage caused by its acts or neglect if Landlord or a tenant has
recovered the full amount of the damage from proceeds of insurance policies and
the insurance company has waived its right of subrogation against Tenant.
17.02 INDEMNITY BY TENANT
To the extent permitted by Law, Tenant hereby indemnifies, and agrees to
protect, defend and hold the Indemnitees harmless, against any and all actions,
claims, demands, liability, costs and expenses, including attorneys' fees and
expenses for the defense thereof, arising from Tenant's occupancy of the
Premises, from
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the undertaking of any Tenant Additions or repairs to the Premises, from the
conduct of Tenant's business on the Premises, or from any breach or default on
the part of Tenant in the performance of any covenant or agreement on the part
of Tenant to be performed pursuant to the terms of this Lease, or from any
willful act or negligence of Tenant, its agents, contractors, servants,
employees, customers or invitees, in or about the Premises or the Property or
any part of either. In case of any action or proceeding brought against the
Indemnitees by reason of any such claim, upon notice from Landlord, Tenant
covenants to defend such action or proceeding by counsel chosen by Landlord, in
Landlord's sole discretion. Landlord reserves the right to settle, compromise or
dispose of any and all actions, claims and demands related to the foregoing
indemnity. The foregoing indemnity shall not operate to relieve Indemnitees of
liability to the extent such liability is caused by the willful and wrongful act
of Indemnitees. Further, the foregoing indemnity is subject to and shall not
diminish any waivers in effect in accordance with Section 16.04 by Landlord or
its insurers to the extent of amounts, if any, paid to Landlord under its "All-
Risks" property insurance.
ARTICLE EIGHTEEN
RULES AND REGULATIONS
18.01 RULES
Tenant agrees for itself and for its subtenants, employees, agents, and invitees
to comply with all rules and regulations for use of the Premises, the Building,
the Phase and the Project imposed by Landlord, as the same may be revised from
time to time, including the following: (a) Tenant shall comply with all of the
requirements of Landlord's emergency response plan, as the same may be amended
from time to time; and (b) Tenant shall not place any furniture, furnishings,
fixtures or equipment in the Premises in a manner so as to obstruct the windows
of the Premises to cause the Building, in Landlord's good faith determination,
to appear unsightly from the exterior. Such rules and regulations are and shall
be imposed for the cleanliness, good appearance, proper maintenance, good order
and reasonable use of the Premises, the Building, the Phase and the Project and
as may be necessary for the enjoyment of the Building and the Project by all
tenants and their clients, customers, and employees.
18.02 ENFORCEMENT
Nothing in this Lease shall be construed to impose upon the Landlord any duty or
obligation to enforce the rules and regulations as set forth above or as
hereafter adopted, or the terms, covenants or conditions of any other lease as
against any other tenant, and the Landlord shall not be liable to the Tenant for
violation of the same by any other tenant, its servants, employees, agents,
visitors or licensees. Landlord shall use reasonable efforts to enforce the
rules and regulations of the Building in a uniform and non-discriminatory
manner.
ARTICLE NINETEEN
LANDLORD'S RESERVED RIGHTS
Landlord shall have the following rights exercisable without notice to Tenant
and without liability to Tenant for damage or injury to persons, property or
business and without being deemed an eviction or disturbance of Tenant's use or
possession of the Premises or giving rise to any claim for offset or abatement
of Rent: (1) to change the Building's name or street address upon thirty (30)
days' prior written notice to Tenant; (2) to install, affix and maintain all
signs on the exterior and/or interior of the Building; (3) to designate and/or
approve prior to installation, all types of signs, window shades, blinds,
drapes, awnings or other similar items, and all internal lighting that may be
visible from the exterior of the Premises; (4) upon reasonable notice to Tenant,
to display the Premises to prospective purchasers at reasonable hours at any
time during the Term and to prospective tenants at reasonable hours during the
last twelve (12) months of the Term; (5) to grant to any party the exclusive
right to conduct any business or render any service in or to the Building,
provided such exclusive right shall not operate to prohibit Tenant from using
the Premises for the purpose permitted hereunder; (6) to change the arrangement
and/or location of entrances or passageways, doors and doorways, corridors,
elevators, stairs, washrooms or public portions of the Building, and to close
entrances, doors, corridors, elevators or other facilities, provided that such
action shall not materially and adversely interfere with Tenant's access to or
use of the Premises or the Building; (7) to have access for Landlord and other
tenants of the Building to any mail chutes and boxes located in or on the
Premises as required by any applicable rules of the United States Post Office;
and (8) to close the Building after Standard Operating Hours, except that Tenant
and its employees and invitees shall be entitled to admission at all times,
under such regulations as Landlord prescribes for security purposes.
ARTICLE TWENTY
ESTOPPEL CERTIFICATE
20.01 IN GENERAL
Within fifteen (15) days after request therefor by Landlord, Mortgagee or any
prospective mortgagee or owner, Tenant agrees as directed in such request to
execute an Estoppel Certificate in recordable form, binding upon Tenant,
certifying (i) that this Lease is unmodified and in full force and effect (or if
there have been modifications, a description of such modifications and that this
Lease as modified is in full force and effect); (ii) the dates to which Rent has
been paid; (iii) that Tenant is in the possession of the Premises if that is the
case; (iv) that Landlord is not in default under this Lease, or, if Tenant
believes Landlord is in default, the nature thereof in detail; (v) that Tenant
has no offsets or defenses to the performance of its obligations under this
Lease (or if Tenant believes there are any offsets or defenses, a full and
complete explanation thereof); (vi) that the Premises have been completed in
accordance with the terms and provisions hereof,
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that Tenant has accepted the Premises and the condition thereof and of all
improvements thereto and has no claims against Landlord or any other party with
respect thereto; (vii) that if an assignment of rents or leases has been served
upon the Tenant by a Mortgagee, Tenant will acknowledge receipt thereof and
agree to be bound by the provisions thereof; (viii) that Tenant will give to the
Mortgagee copies of all notices required or permitted to be given by Tenant to
Landlord; and (ix) to any other information reasonably requested.
20.02 ENFORCEMENT
In the event that Tenant fails to deliver an Estoppel Certificate, then such
failure shall be a Default for which there shall be no cure or grace period. In
addition to any other remedy available to Landlord, Landlord may impose a charge
equal to $500.00 for each day that Tenant fails to deliver an Estoppel
Certificate.
ARTICLE TWENTY-ONE
RELOCATION OF TENANT
(Intentionally omitted.)
ARTICLE TWENTY-TWO
REAL ESTATE BROKERS
Tenant represents that in connection with this Lease it is represented by
Tenant's Broker (listed in Section 1.01(19)) and, except for Tenant's Broker and
Landlord's Broker (listed in Section 1.01(19)), Tenant has not dealt with any
real estate broker, sales person, or finder in connection with the subject
matter of this Lease, and no such person is entitled to any commission, broker's
or finder's fee or similar compensation in connection therewith. Tenant hereby
agrees to pay any commission, fees or compensation to which Tenant's Broker is
entitled in connection with the subject matter of this Lease and agrees that
neither Landlord nor Landlord's Broker is obligated to pay or fund any amount to
Tenant's Broker. Tenant hereby agrees to indemnify, protect, defend and hold
Landlord and the Indemnitees (including Landlord's Broker) harmless from and
against any and all liabilities and claims for commissions, fees or any
compensation by Tenant's Broker or any other broker arising out of any
discussion allegedly had by Tenant with any such broker in connection with the
subject matter of this Lease. Landlord represents that in connection with the
subject matter of this Lease it is represented by Landlord's Broker and, except
for Landlord's Broker and Tenant's Broker, Landlord has not dealt with any real
estate broker, sales person, or finder in connection with the subject matter of
this Lease. Landlord hereby agrees to pay any commission to which Landlord's
Broker is entitled in connection with the subject matter of this Lease pursuant
to Landlord's written agreement with Landlord's Broker and agrees that Tenant is
not obligated to pay or fund any amount to Landlord's Broker.
ARTICLE TWENTY-THREE
MORTGAGEE PROTECTION
23.01 SUBORDINATION AND ATTORNMENT
(a) Subject to Section 23.01(b) hereof, this Lease is and shall be
expressly subject and subordinate at all times to (i) any ground or underlying
lease of the Real Property, now or hereafter existing, and all amendments,
extensions, renewals and modifications to any such lease, and (ii) the lien of
any mortgage or trust deed now or hereafter encumbering fee title to the Real
Property and/or the leasehold estate under any such lease, and all amendments,
extensions, renewals, replacements and modifications of such mortgage or trust
deed and/or the obligation secured thereby, unless such ground lease or ground
lessor, or mortgage, trust deed or Mortgagee, expressly provides or elects that
the Lease shall be superior to such lease or mortgage or trust deed. If any
such mortgage or trust deed is foreclosed (including any sale of the Real
Property pursuant to a power of sale), or if any such lease is terminated, upon
request of the Mortgagee or ground lessor, as the case may be, Tenant shall
attorn to the purchaser at the foreclosure sale or to the ground lessor under
such lease, as the case may be, provided, however, that such purchaser or ground
lessor shall not be (i) bound by any payment of Rent for more than one month in
advance except payments in the nature of security for the performance by Tenant
of its obligations under this Lease; (ii) subject to any offset, defense or
damages arising out of a default of any obligations of any preceding Landlord;
or (iii) bound by any amendment or modification of this Lease made without the
written consent of the Mortgagee or ground lessor; or (iv) liable for any
security deposits not actually received in cash by such purchaser or ground
lessor. This subordination shall be self-operative and no further certificate
or instrument of subordination need be required by any such Mortgagee or ground
lessor. In confirmation of such subordination, however, Tenant shall execute
promptly any reasonable certificate or instrument that Landlord, Mortgagee or
ground lessor may request. Tenant hereby constitutes Landlord as Tenant's
attorney-in-fact to execute such certificate or instrument for and on behalf of
Tenant upon Tenant's failure to do so within fifteen (15) days of a request to
do so. Upon request by such successor in interest, Tenant shall execute and
deliver reasonable instruments confirming the attornment provided for herein.
(b) Notwithstanding any provision of this Lease to the contrary,
provided that: (i) Tenant pays any fees and costs associated with requesting a
nondisturbance agreement, (ii) Tenant executes and delivers a subordination,
nondisturbance and attornment agreement substantially in the form of Exhibit D
---------
hereto, with such changes thereto as any lessor under a ground or underlying
lease or mortgagee or beneficiary may reasonably require ("Nondisturbance
Agreement") and complies with the provisions thereof, and (iii) Tenant is not in
default under this Lease, no termination of any ground lease or underlying lease
and no foreclosure, sale pursuant to power of sale or conveyance by deed in lieu
of foreclosure shall affect Tenant's rights under this Lease, except to the
extent provided by such Nondisturbance Agreement. If Tenant fails to execute and
deliver any Nondisturbance Agreement within fifteen (15) days of a request
26
therefor from Landlord, Tenant hereby constitutes Landlord as Tenant's attorney-
in-fact to execute and deliver such instrument. Landlord's inability to obtain
the signature of any such lessor or Mortgagee on any such Nondisturbance
Agreement shall not constitute a default by Landlord under this Lease, but so
long as default by Tenant under this Lease is not the reason for Landlord's
inability to obtain such signature, any such lessor or Mortgagee shall be deemed
to have elected that this Lease be superior to the lease, mortgage or deed of
trust in question, and Tenant shall, at the request of such lessor, mortgagee or
beneficiary (or purchaser at any sale pursuant to the mortgage or deed of
trust), attorn to any such party or enter into a new lease with such party (as
Landlord) for the balance of the Term then remaining hereunder upon the same
terms and conditions as those herein, provided, however, that such party shall
not be (i) bound by any payment of Rent for more than one month in advance
except payments in the nature of security for the performance by Tenant of its
obligations under this Lease; (ii) subject to any offset, defense or damages
arising out of a default of any obligations of any preceding Landlord; or (iii)
bound by any amendment or modification of this Lease made without the written
consent of the Mortgagee or ground lessor; or (iv) liable for any security
deposits not actually received in cash by such purchaser or ground lessor. Upon
request by such successor in interest, Tenant shall execute and deliver
reasonable instruments confirming the attornment provided for herein.
23.02 MORTGAGEE PROTECTION
Tenant agrees to give any Mortgagee or ground lessor, by registered or certified
mail, a copy of any notice of default served upon the Landlord by Tenant,
provided that prior to such notice Tenant has received notice (by way of service
on Tenant of a copy of an assignment of rents and leases, or otherwise) of the
address of such Mortgagee or ground lessor. Tenant further agrees that if
Landlord shall have failed to cure such default within the time provided for in
this Lease, then the Mortgagee or ground lessor shall have an additional thirty
(30) days after receipt of notice thereof within which to cure such default or
if such default cannot be cured within that time, then such additional notice
time as may be necessary, if, within such thirty (30) days, any Mortgagee or
ground lessor has commenced and is diligently pursuing the remedies necessary to
cure such default (including commencement of foreclosure proceedings or other
proceedings to acquire possession of the Real Property, if necessary to effect
such cure). Such period of time shall be extended by any period within which
such Mortgagee or ground lessor is prevented from commencing or pursuing such
foreclosure proceedings or other proceedings to acquire possession of the Real
Property by reason of Landlord's bankruptcy. Until the time allowed as
aforesaid for Mortgagee or ground lessor to cure such defaults has expired
without cure, Tenant shall have no right to, and shall not, terminate this Lease
on account of default. This Lease may not be modified or amended so as to
reduce the Rent or shorten the Term, or so as to adversely affect in any other
respect to any material extent the rights of the Landlord, nor shall this Lease
be canceled or surrendered, without the prior written consent, in each instance,
of the ground lessor or the Mortgagee.
ARTICLE TWENTY-FOUR
NOTICES
(a) All notices, demands or requests provided for or permitted to be
given pursuant to this Lease must be in writing and shall be personally
delivered, sent by Federal Express or other reputable overnight courier service,
or mailed by first class, registered or certified United States mail, return
receipt requested, postage prepaid.
(b) All notices, demands or requests to be sent pursuant to this Lease
shall be deemed to have been properly given or served by delivering or sending
the same in accordance with this Section, addressed to the parties hereto at
their respective addresses listed in Sections 1.01(2) and (3).
(c) Notices, demands or requests sent by mail or overnight courier
service as described above shall be effective upon deposit in the mail or with
such courier service. However, the time period in which a response to any such
notice, demand or request must be given shall commence to run from (i) in the
case of delivery by mail, the date of receipt on the return receipt of the
notice, demand or request by the addressee thereof, or (ii) in the case of
delivery by Federal Express or other overnight courier service, the date of
acceptance of delivery by an employee, officer, director or partner of Landlord
or Tenant. Rejection or other refusal to accept or the inability to deliver
because of changed address of which no notice was given, as indicated by advice
from Federal Express or other overnight courier service or by mail return
receipt, shall be deemed to be receipt of notice, demand or request sent.
Notices may also be served by personal service upon any officer, director or
partner of Landlord or Tenant, and shall be effective upon such service.
(d) By giving to the other party at least thirty (30) days written
notice thereof, either party shall have the right from time to time during the
term of this Lease to change their respective addresses for notices, statements,
demands and requests, provided such new address shall be within the United
States of America.
ARTICLE TWENTY-FIVE
EXERCISE FACILITY
Tenant agrees to inform all employees of Tenant of the following: (i) the
exercise facility is available for the use of the employees of tenants of the
Project only and for no other person; (ii) use of the facility is at the risk of
Tenant or Tenant's employees, and all users must sign a release; (iii) the
facility is unsupervised; and (iv) users of the facility must report any needed
equipment maintenance or any unsafe conditions to the Landlord immediately.
Landlord may discontinue providing such facility at Landlord's sole option at
any time without incurring any liability. As a condition to the use of the
exercise facility, Tenant and each of Tenant's
27
employees that uses the exercise facility shall first sign a written release in
form and substance acceptable to Landlord. Landlord may change the rules and/or
hours of the exercise facility at any time, and Landlord reserves the right to
deny access to the exercise facility to anyone due to misuse of the facility or
noncompliance with rules and regulations of the facility. To the extent
permitted by Law, Tenant hereby indemnifies, and agrees to protect, defend and
hold the Indemnitees harmless, against any and all actions, claims, demands,
liability, costs and expenses, including attorneys' fees and expenses for the
defense thereof, arising from use of the exercise facility in the Project by
Tenant, Tenant's employees or invitees. In case of any action or proceeding
brought against the Indemnitees by reason of any such claim, upon notice from
Landlord, Tenant covenants to defend such action or proceeding by counsel chosen
by Landlord, in Landlord's sole discretion. Landlord reserves the right to
settle, compromise or dispose of any and all actions, claims and demands related
to the foregoing indemnity.
ARTICLE TWENTY-SIX
MISCELLANEOUS
26.01 LATE CHARGES
(a) All payments required hereunder (other than the Monthly Base Rent,
Rent Adjustments, and Rent Adjustment Deposits, which shall be due as
hereinbefore provided) to Landlord shall be paid within ten (10) days after
Landlord's demand therefor. All such amounts (including Monthly Base Rent, Rent
Adjustments, and Rent Adjustment Deposits) not paid when due shall bear interest
from the date due until the date paid at the Default Rate in effect on the date
such payment was due.
(b) In the event Tenant is more than five (5) days late in paying any
installment of Rent due under this Lease, Tenant shall pay Landlord a late
charge equal to five percent (5%) of the delinquent installment of Rent. The
parties agree that (i) such delinquency will cause Landlord to incur costs and
expenses not contemplated herein, the exact amount of which will be difficult to
calculate, including the cost and expense that will be incurred by Landlord in
processing each delinquent payment of rent by Tenant, and (ii) the amount of
such late charge represents a reasonable estimate of such costs and expenses and
that such late charge shall be paid to Landlord for each delinquent payment in
addition to all Rent otherwise due hereunder. The parties further agree that
the payment of late charges and the payment of interest provided for in
subparagraph (a) above are distinct and separate from one another in that the
payment of interest is to compensate Landlord for its inability to use the money
improperly withheld by Tenant, while the payment of late charges is to
compensate Landlord for its additional administrative expenses in handling and
processing delinquent payments.
(c) Payment of interest at the Default Rate and/or of late charges shall
not excuse or cure any default by Tenant under this Lease, nor shall the
foregoing provisions of this Article or any such payments prevent Landlord from
exercising any right or remedy available to Landlord upon Tenant's failure to
pay Rent when due, including the right to terminate this Lease.
(d) Notwithstanding any provision of the foregoing to the contrary,
interest at the Default Rate and the late charge shall not be payable with
respect to the first three (3) occasions of late payment, provided that the late
payment in question is received by Landlord within ten (10) days after the due
date.
26.02 NO JURY TRIAL; VENUE; JURISDICTION
Each party hereto (which includes any assignee, successor, heir or personal
representative of a party) shall not seek a jury trial, hereby waives trial by
jury, and hereby further waives any objection to venue in the County in which
the Project is located, and agrees and consents to personal jurisdiction of the
courts of the State of California, in any action or proceeding or counterclaim
brought by any party hereto against the other on any matter whatsoever arising
out of or in any way connected with this Lease, the relationship of Landlord and
Tenant, Tenant's use or occupancy of the Premises, or any claim of injury or
damage, or the enforcement of any remedy under any statute, emergency or
otherwise, whether any of the foregoing is based on this Lease or on tort law.
No party will seek to consolidate any such action in which a jury has been
waived with any other action in which a jury trial cannot or has not been
waived. It is the intention of the parties that these provisions shall be
subject to no exceptions. By execution of this Lease the parties agree that
this provision may be filed by any party hereto with the clerk or judge before
whom any action is instituted, which filing shall constitute the written consent
to a waiver of jury trial pursuant to and in accordance with Section 631 of the
California Code of Civil Procedure. No party has in any way agreed with or
represented to any other party that the provisions of this Section will not be
fully enforced in all instances. The provisions of this Section shall survive
the expiration or earlier termination of this Lease.
26.03 DEFAULT UNDER OTHER LEASE
It shall be a Default under this Lease if Tenant or any Affiliate holding any
other lease with Landlord for premises in the Project defaults under such lease
and as a result thereof such lease is terminated or terminable.
26.04 OPTION
This Lease shall not become effective as a lease or otherwise until executed and
delivered by both Landlord and Tenant. The submission of the Lease to Tenant
does not constitute a reservation of or option for the Premises, but when
executed by Tenant and delivered to Landlord, the Lease shall constitute an
irrevocable
28
offer by Tenant in effect for fifteen (15) days to lease the Premises on the
terms and conditions herein contained.
26.05 TENANT AUTHORITY
Tenant represents and warrants to Landlord that it has full authority and power
to enter into and perform its obligations under this Lease, that the person
executing this Lease is fully empowered to do so, and that no consent or
authorization is necessary from any third party. Landlord may request that
Tenant provide Landlord evidence of Tenant's authority.
26.06 ENTIRE AGREEMENT
This Lease, the Exhibits and Riders attached hereto contain the entire agreement
between Landlord and Tenant concerning the Premises and there are no other
agreements, either oral or written, and no other representations or statements,
either oral or written, on which Tenant has relied. This Lease shall not be
modified except by a writing executed by Landlord and Tenant.
26.07 MODIFICATION OF LEASE FOR BENEFIT OF MORTGAGEE
If Mortgagee of Landlord requires a modification of this Lease which shall not
result in any increased cost or expense to Tenant or in any other substantial
and adverse change in the rights and obligations of Tenant hereunder, then
Tenant agrees that the Lease may be so modified.
26.08 EXCULPATION
Tenant agrees, on its behalf and on behalf of its successors and assigns, that
any liability or obligation of Landlord in connection with this Lease shall only
be enforced against Landlord's equity interest in the Property up to a maximum
of Five Million Dollars ($5,000,000.00) and in no event against any other assets
of the Landlord, or Landlord's officers or directors or partners, and that any
liability of Landlord with respect to this Lease shall be so limited and Tenant
shall not be entitled to any judgment in excess of such amount.
26.09 ACCORD AND SATISFACTION
No payment by Tenant or receipt by Landlord of a lesser amount than any
installment or payment of Rent due shall be deemed to be other than on account
of the amount due, and no endorsement or statement on any check or any letter
accompanying any check or payment of Rent shall be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord's right to recover the balance of such installment or payment of Rent
or pursue any other remedies available to Landlord. No receipt of money by
Landlord from Tenant after the termination of this Lease or Tenant's right of
possession of the Premises shall reinstate, continue or extend the Term.
Receipt or acceptance of payment from anyone other than Tenant, including an
assignee of Tenant, is not a waiver of any breach of Article Ten, and Landlord
may accept such payment on account of the amount due without prejudice to
Landlord's right to pursue any remedies available to Landlord.
26.10 LANDLORD'S OBLIGATIONS ON SALE OF BUILDING
In the event of any sale or other transfer of the Building, Landlord shall be
entirely freed and relieved of all agreements and obligations of Landlord
hereunder accruing or to be performed after the date of such sale or transfer,
and any remaining liability of Landlord with respect to this Lease shall be
limited to Five Million Dollars ($5,000,000.00) and Tenant shall not be entitled
to any judgment in excess of such amount.
26.11 BINDING EFFECT
Subject to the provisions of Article Ten, this Lease shall be binding upon and
inure to the benefit of Landlord and Tenant and their respective heirs, legal
representatives, successors and permitted assigns.
26.12 CAPTIONS
The Article and Section captions in this Lease are inserted only as a matter of
convenience and in no way define, limit, construe, or describe the scope or
intent of such Articles and Sections.
26.13 TIME; APPLICABLE LAW; CONSTRUCTION
Time is of the essence of this Lease and each and all of its provisions. This
Lease shall be construed in accordance with the Laws of the State of California.
If more than one person signs this Lease as Tenant, the obligations hereunder
imposed shall be joint and several. If any term, covenant or condition of this
Lease or the application thereof to any person or circumstance shall, to any
extent, be invalid or unenforceable, the remainder of this Lease, or the
application of such term, covenant or condition to persons or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby and each item, covenant or condition of this Lease shall be
valid and be enforced to the fullest extent permitted by Law. Wherever the term
"including" or "includes" is used in this Lease, it shall have the same meaning
as if followed by the phrase "but not limited to". The language in all parts of
this Lease shall be construed according to its normal and usual meaning and not
strictly for or against either Landlord or Tenant.
29
26.14 ABANDONMENT
In the event Tenant vacates or abandons the Premises but is otherwise in
compliance with all the terms, covenants and conditions of this Lease, Landlord
shall (i) have the right to enter into the Premises in order to show the space
to prospective tenants, (ii) have the right to reduce the services provided to
Tenant pursuant to the terms of this Lease to such levels as Landlord reasonably
determines to be adequate services for an unoccupied premises and (iii) during
the last six (6) months of the Term, have the right to prepare the Premises for
occupancy by another tenant upon the end of the Term. Tenant expressly
acknowledges that in the absence of written notice pursuant to Section 11.02(b)
or pursuant to California Civil Code Section 1951.3 terminating Tenant's right
to possession, none of the foregoing acts of Landlord or any other act of
Landlord shall constitute a termination of Tenant's right to possession or an
acceptance of Tenant's surrender of the Premises, and the Lease shall continue
in effect.
26.15 LANDLORD'S RIGHT TO PERFORM TENANT'S DUTIES
If Tenant fails timely to perform any of its duties under this Lease, Landlord
shall have the right (but not the obligation), to perform such duty on behalf
and at the expense of Tenant without prior notice to Tenant, and all sums
expended or expenses incurred by Landlord in performing such duty shall be
deemed to be additional Rent under this Lease and shall be due and payable upon
demand by Landlord.
26.16 SECURITY SYSTEM
Landlord shall not be obligated to provide or maintain any security patrol or
security system. Landlord shall not be responsible for the quality of any such
patrol or system which may be provided hereunder or for damage or injury to
Tenant, its employees, invitees or others due to the failure, action or inaction
of such patrol or system.
26.17 NO LIGHT, AIR OR VIEW EASEMENTS
Any diminution or shutting off of light, air or view by any structure which may
be erected on lands of or adjacent to the Project shall in no way affect this
Lease or impose any liability on Landlord.
26.18 RECORDATION
Neither this Lease, nor any notice nor memorandum regarding the terms hereof,
shall be recorded by Tenant. Any such unauthorized recording shall be a Default
for which there shall be no cure or grace period. Tenant agrees to execute and
acknowledge, at the request of Landlord, a memorandum of this Lease, in
recordable form.
26.19 SURVIVAL
The waivers of the right of jury trial, the other waivers of claims or rights,
the releases and the obligations of Tenant under this Lease to indemnify,
protect, defend and hold harmless Landlord and/or Indemnitees shall survive the
expiration or termination of this Lease, and so shall all other obligations or
agreements which by their terms survive expiration or termination of the Lease.
26.20 RIDERS
All Riders attached hereto and executed both by Landlord and Tenant shall be
deemed to be a part hereof and hereby incorporated herein.
IN WITNESS WHEREOF, this Lease has been executed as of the date set forth in
Section 1.01(4) hereof.
TENANT: LANDLORD:
------ --------
Clarent Corporation, Metropolitan Life Insurance Company,
a Delaware corporation a New York corporation
By _________________________________ By ________________________________
__________________________________ _________________________________
Print name Print name
Its ________________________________ Its _______________________________
(Chairman of Board, President or Vice
President)
By _________________________________
__________________________________
Print name
Its ________________________________
(Secretary, Assistant Secretary, CFO
or Assistant Treasurer)
30
EXHIBIT A
PLAN OF PREMISES
Exhibit A - Page 1
EXHIBIT B
WORKLETTER AGREEMENT
(intentionally omitted)
Exhibit B - Page 1
EXHIBIT C
SITE PLAN OF PROJECT
Exhibit C - Page 1 of 1
EXHIBIT D
FORM OF SUBORDINATION, NONDISTURBANCE & ATTORNMENT AGREEMENT
RECORDING REQUESTED
BY AND WHEN
RECORDED RETURN TO:
____________________, Esq.
____________________
____________________
____________________
SUBORDINATION,
NONDISTURBANCE
AND ATTORNMENT AGREEMENT
NOTICE: THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT
RESULTS IN YOUR LEASEHOLD ESTATE IN THE PROPERTY BECOMING SUBJECT
TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER
SECURITY INSTRUMENT.
DEFINED TERMS
================================================================================
Execution Date:
--------------------------------------------------------------------------------
Beneficiary & Address:
Attn.:
with a copy to:
--------------------------------------------------------------------------------
Tenant & Address:
--------------------------------------------------------------------------------
Landlord & Address:
--------------------------------------------------------------------------------
Loan: A first mortgage loan in the original principal amount of $
from Beneficiary to Landlord.
--------------------------------------------------------------------------------
Note: A Promissory Note executed by Landlord in favor of Beneficiary in the
amount of the Loan dated as of
--------------------------------------------------------------------------------
Deed of Trust: A Deed of Trust, Security Agreement and Fixture Filing dated as
of executed by Landlord, to as Trustee, for the benefit of Beneficiary
securing repayment of the Note to be recorded in the records of the County in
which the Property is located.
--------------------------------------------------------------------------------
Lease and Lease Date: The lease entered into by Landlord and Tenant dated as of
covering the Premises.
[Add amendments]
--------------------------------------------------------------------------------
Property: [Property Name]
[Street Address 1]
[City, State, Zip]
The Property is more particularly described on Exhibit A.
---------
================================================================================
Exhibit D - Page 1 of 1
THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT (the
"Agreement") is made by and among Tenant, Landlord, and Beneficiary and affects
the Property described in Exhibit A. Certain terms used in this Agreement are
---------
defined in the Defined Terms. This Agreement is entered into as of the Execution
Date with reference to the following facts:
A. Landlord and Tenant have entered into the Lease covering certain
space in the improvements located in and upon the Property (the "Premises").
B. Beneficiary has made or is making the Loan to Landlord evidenced
by the Note. The Note is secured, among other documents, by the Deed of Trust.
C. Landlord, Tenant and Beneficiary all wish to subordinate the
Lease to the lien of the Deed of Trust.
D. Tenant has requested that Beneficiary agree not to disturb
Tenant's rights in the Premises pursuant to the Lease in the event Beneficiary
forecloses the Deed of Trust, or acquires the Property pursuant to the trustee's
power of sale contained in the Deed of Trust or receives a transfer of the
Property by a conveyance in lieu of foreclosure of the Property (collectively, a
"Foreclosure Sale") but only if Tenant is not then in default under the Lease
and Tenant attorns to Beneficiary or a third party purchaser at the Foreclosure
Sale (a "Foreclosure Purchaser").
NOW THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties agree as follows:
1. Subordination. The Lease and the leasehold estate created by the
-------------
Lease and all of Tenant's rights under the Lease are and shall remain
subordinate to the Deed of Trust and the lien of the Deed of Trust, to all
rights of Beneficiary under the Deed of Trust and to all renewals, amendments,
modifications and extensions of the Deed of Trust.
2. Acknowledgments by Tenant. Tenant agrees that: (a) Tenant has
-------------------------
notice that the Lease and the rent and all other sums due under the Lease have
been or are to be assigned to Beneficiary as security for the Loan. In the
event that Beneficiary notifies Tenant of a default under the Deed of Trust and
requests Tenant to pay its rent and all other sums due under the Lease to
Beneficiary, Tenant shall pay such sums directly to Beneficiary or as
Beneficiary may otherwise request. (b) Tenant shall send a copy of any notice
or statement under the Lease to Beneficiary at the same time Tenant sends such
notice or statement to Landlord. (c) This Agreement satisfies any condition or
requirement in the Lease relating to the granting of a nondisturbance agreement.
3. Foreclosure and Sale. In the event of a Foreclosure Sale,
--------------------
(a) So long as Tenant complies with this Agreement and is not in
default under any of the provisions of the Lease, the Lease shall continue
in full force and effect as a direct lease between Beneficiary and Tenant,
and Beneficiary will not disturb the possession of Tenant, subject to this
Agreement. Tenant agrees to attorn to and accept Beneficiary as landlord
under the Lease and to be bound by and perform all of the obligations
imposed by the Lease. Upon Beneficiary's acquisition of title to the
Property, Beneficiary will perform all of the obligations imposed on the
Landlord by the Lease except as set forth in this Agreement; provided,
however, that Beneficiary shall not be: (i) liable for any act or omission
of a prior landlord (including Landlord); or (ii) subject to any offsets or
defenses that Tenant might have against any prior landlord (including
Landlord); or (iii) bound by any rent or additional rent which Tenant might
have paid in advance to any prior landlord (including Landlord) for a
period in excess of one month or by any security deposit, cleaning deposit
or other sum that Tenant may have paid in advance to any prior landlord
(including Landlord); or (iv) bound by any amendment, modification,
assignment or termination of the Lease made without the written consent of
Beneficiary; (v) obligated or liable with respect to any representations,
warranties or indemnities contained in the Lease; or (vi) liable to Tenant
or any other party for any conflict between the provisions of the Lease and
the provisions of any other lease affecting the Property which is not
entered into by Beneficiary.
(b) Upon the written request of Beneficiary after a Foreclosure
Sale, the parties shall execute a lease of the Premises upon the same
provisions as contained in the Lease between Landlord and Tenant, except as
set forth in this Agreement, for the unexpired term of the Lease.
4. Subordination and Release of Purchase Options. Tenant represents
---------------------------------------------
that it has no right or option of any nature to purchase the Property or any
portion of the Property or any interest in the Borrower. To the extent Tenant
has or acquires any such right or option, these rights or options are
acknowledged to be subject and subordinate to the Mortgage and are waived and
released as to Beneficiary and any Foreclosure Purchaser.
5. Acknowledgment by Landlord. In the event of a default under the
--------------------------
Deed of Trust, at the election of Beneficiary, Tenant shall and is directed to
pay all rent and all other sums due under the Lease to Beneficiary.
6. Construction of Improvements. Beneficiary shall not have any
----------------------------
obligation or incur any liability with respect to the completion of the
improvements in which the Premises are located at the commencement of the term
of the Lease.
Exhibit D - Page 2 of 2
7. Notice. All notices under this Agreement shall be deemed to have
------
been properly given if delivered by overnight courier service or mailed by
United States certified mail, with return receipt requested, postage prepaid to
the party receiving the notice at its address set forth in the Defined Terms (or
at such other address as shall be given in writing by such party to the other
parties) and shall be deemed complete upon receipt or refusal of delivery.
8. Miscellaneous. Beneficiary shall not be subject to any provision
-------------
of the Lease that is inconsistent with this Agreement. Nothing contained in this
Agreement shall be construed to derogate from or in any way impair or affect the
lien or the provisions of the Deed of Trust. This Agreement shall be governed by
and construed in accordance with the laws of the State of in which the Property
is located.
9. Liability and Successors and Assigns. In the event that
------------------------------------
Beneficiary acquires title to the Premises or the Property, Beneficiary shall
have no obligation nor incur any liability beyond Beneficiary's then equity
interest in the Property, but in no event in excess of Five Million Dollars
($5,000,000), and Tenant shall look solely to such equity interest for the
payment and performance of any obligations imposed upon Beneficiary under this
Agreement or under the Lease. This Agreement shall run with the land and shall
inure to the benefit of the parties and, their respective successors and
permitted assigns including a Foreclosure Purchaser. If a Foreclosure Purchaser
acquires the Property or if Beneficiary assigns or transfers its interest in the
Note and Deed of Trust or the Property, all obligations and liabilities of
Beneficiary under this Agreement shall terminate and be the responsibility of
the Foreclosure Purchaser or other party to whom Beneficiary's interest is
assigned or transferred. The interest of Tenant under this Agreement may not be
assigned or transferred except in connection with an assignment of its interest
in the Lease which has been consented to by Beneficiary.
IN WITNESS WHEREOF, the parties have executed this Subordination,
Nondisturbance and Attornment Agreement as of the Execution Date.
NOTICE: THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT CONTAINS
PROVISIONS WHICH ALLOW THE PERSON OBLIGATED ON THE LEASE TO OBTAIN A
LOAN, A PORTION OF WHICH MAY BE EXPENDED FOR OTHER PURPOSES THAN
IMPROVEMENT OF THE PROPERTY.
IT IS RECOMMENDED THAT THE PARTIES CONSULT WITH THEIR ATTORNEYS PRIOR TO THE
EXECUTION OF THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT.
BENEFICIARY: __________________________________,
a _________________________________
By ________________________________
Its _______________________________
TENANT: __________________________________,
a _________________________________
By ________________________________
Its _______________________________
LANDLORD: __________________________________,
a _________________________________
By ________________________________
Its _______________________________
Exhibit D - Page 3 of 3
EXHIBIT A OF SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT
PROPERTY DESCRIPTION
Exhibit D - Page 4 of 4
State of _____________
County of ____________
On ______________, 2000 before me, ____________________, personally appeared
___________________, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
Signature ________________________________ (Seal)
***************************************************
State of _____________
County of ____________
On ______________, 2000 before me, ____________________, personally appeared
___________________, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
Signature ________________________________ (Seal)
***************************************************
State of _____________
County of ____________
On ______________, 2000 before me, ____________________, personally appeared
___________________, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
Signature ________________________________ (Seal)
Exhibit D - Page 5 of 5
RIDER 1
COMMENCEMENT DATE AGREEMENT
Metropolitan Life Insurance Company, a New York corporation ("Landlord"), and
Clarent Corporation, a Delaware corporation ("Tenant"), have entered into a
certain Lease dated as of March 31, 2000 (the "Lease").
WHEREAS, Landlord and Tenant wish to confirm and memorialize the Commencement
Date and Expiration Date of the Lease as provided for in Section 2.02(b) of the
Lease;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein and in the Lease, Landlord and Tenant agree as follows:
1. Unless otherwise defined herein, all capitalized terms shall have the
same meaning ascribed to them in the Lease.
2. The Commencement Date (as defined in the Lease) of the Lease is as
follows:
________________ as to the 301 Chesapeake Space; and
________________ as to the 575 Chesapeake Space.
3. The Expiration Date (as defined in the Lease) of the Lease is _______.
4. Tenant hereby confirms the following:
(a) That it has accepted possession of the premises pursuant to the
terms of the Lease;
(b) That the Landlord Work, if any, is Substantially Complete; and
(c) That the Lease is in full force and effect.
5. Except as expressly modified hereby, all terms and provisions of the
Lease are hereby ratified and confirmed and shall remain in full force and
effect and binding on the parties hereto.
6. The Lease and this Commencement Date Agreement contain all of the
terms, covenants, conditions and agreements between the Landlord and the Tenant
relating to the subject matter herein. No prior other agreements or
understandings pertaining to such matters are valid or of any force and effect.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Commencement
Date Agreement and such execution and delivery have been duly authorized.
TENANT: LANDLORD:
------ --------
Clarent Corporation, Metropolitan Life Insurance Company,
a Delaware corporation a New York corporation
By ________________________________ By ________________________________
________________________________ ________________________________
Print name Print name
Its ________________________________ Its ________________________________
(Chairman of Board, President or Vice
President)
By ________________________________
________________________________
Print name
Its __________________________________
(Secretary, Assistant Secretary, CFO or
Assistant Treasurer)
Rider 1 - Page 1 of 1
RIDER 2
ADDITIONAL PROVISIONS
This Rider 2 ("Rider") is attached to and a part of a certain Lease dated
as of March 31, 2000, executed concurrently herewith by Metropolitan Life
Insurance Company, a New York corporation, as Landlord, and Clarent Corporation,
a Delaware corporation (for purposes of this Rider, "Clarent"), as Tenant, for
the Premises as described therein (the "Lease").
SECTION 1. DEFINED TERMS; FORCE AND EFFECT
Capitalized terms used in this Rider shall have the same meanings set forth in
the Lease except as otherwise specified herein and except for terms capitalized
in the ordinary course of punctuation. This Rider forms a part of the Lease.
Should any inconsistency arise between this Rider and any other provision of the
Lease as to the specific matters which are the subject of this Rider, the terms
and conditions of this Rider shall control.
SECTION 2. PREMISES LEASED "AS-IS"; DELIVERY; COMMENCEMENT DATE; AND
CONSTRUCTION
2.1. AS-IS; Delivery; Commencement Date. Notwithstanding any provision of
----------------------------------
the Lease to the contrary:
(a) AS-IS. Except to the extent of Landlord's Maximum Contribution
-----
described below: (i) Landlord shall deliver the Premises to Tenant in its AS IS
condition, without any express or implied representations or warranties of any
kind by Landlord, its brokers, manager or agents, or the employees of any of
them regarding the Premises; and (ii) Landlord shall not have any obligation to
construct or install any tenant improvements or alterations or to pay for any
such construction or installation.
(b) Delivery & Commencement Date. Landlord may deliver the Premises
----------------------------
in separate components of the 301 Chesapeake Space and the 575 Chesapeake Space,
and certain different conditions, terms and provisions apply respectively to
each space, as more particularly provided in this Rider 2 and elsewhere in this
Lease.
(1) With respect to each of the 301 Chesapeake Space and the
575 Chesapeake Space, the date Landlord tenders to Tenant possession of
each respective space is referred to herein as the "Delivery Date" of the
respective space. Possession of such space will be adequately tendered to
Tenant by Landlord either delivering the keys (or other means of access) to
Tenant or Tenant's Broker, or by Landlord giving written notice that the
keys (or other means of access) to the Premises are available for Tenant or
its representative to pick up at the office of Landlord or of the Property
Manager of the Building.
(2) Landlord shall tender to Tenant possession of the 301
Chesapeake Space on June 1, 2000.
(3) Landlord shall tender to Tenant possession of the 575
Chesapeake Space on July 1, 2000.
(4) Tenant's possession of each of the 301 Chesapeake Space
and the 575 Chesapeake Space, as applicable, from the Delivery Date to the
Commencement Date may be referred to as the Interim Term for each
respective space, and is to provide some time for purposes of design and
construction of Tenant Work, fixturing and moving as to the respective
space. Upon tender to Tenant of possession of such space, such space shall
become subject to all of the terms, covenants and conditions of this Lease,
including for example, insurance, indemnity and amounts payable under this
Lease, except that Monthly Base Rent, Rent Adjustment Deposits and Rent
Adjustments shall not be payable by Tenant and the initial Term shall not
commence until the separate Commencement Date for each of 301 Chesapeake
Space and the 575 Chesapeake Space. The Commencement Date shall be
determined separately for each such space, and shall be thirty (30) days
after the Delivery Date of each space.
(c) Delay in Delivery. If Landlord does not obtain and tender
-----------------
possession of the 301 Chesapeake Space and the 575 Chesapeake Space, as
applicable, on or before the dates set forth above for each by reason of the
following: (i) the holding over or retention of possession of any tenant,
tenants or occupants, or (ii) for any other reason, then Landlord shall not be
subject to any liability for the failure to give possession on said date. Under
such circumstances the Commencement Date as to each of the 301 Chesapeake Space
and the 575 Chesapeake Space shall be determined as provided in Subsection (b)
above. No such failure to give possession shall affect the validity of this
Lease or the obligations of the Tenant hereunder. Within thirty (30) days
following the later to occur of the Commencement Date for the 301 Chesapeake
Space and the Commencement Date for the 575 Chesapeake Space, respectively,
Landlord and Tenant shall enter into an agreement (which is attached to this
Lease as Rider 1) confirming the Commencement Date for each space, as
-------
applicable, and the Expiration Date. If Tenant fails to enter into such
agreement, then the Commencement Date for each respective space shall be the
date designated by Landlord in such agreement.
Rider 2 - Page 1 of 1
2.2 Landlord Work. Notwithstanding any provision of the Lease to the
-------------
contrary, there is no Landlord Work required under with this Lease.
2.3. Tenant Work Generally. Landlord and Tenant acknowledge and agree
---------------------
that notwithstanding any provisions of the Lease to the contrary: (a) Tenant
desires to do certain remodeling, repair, improvement or alteration in
connection with its initial occupancy, which for purposes of this Lease is
referred to as the Tenant Work; (b) all Tenant Work, if any, shall be done as
Tenant Alterations under the Lease, subject to and in compliance with all
conditions and provisions of the Lease applicable to Tenant Alterations, except
as otherwise expressly provided in this Rider; (c) without limiting the
generality of any provisions of Article Nine, Tenant's selection of Tenant's
space planner and/or architect and Tenant's selection of contractor(s) shall be
subject to Landlord's prior written approval, which shall not unreasonably be
withheld, except that Landlord may in its sole discretion specify or approve the
engineers and contractors to perform work relating to the Building's systems;
(d) if the Tenant Work does not exceed the amount of Landlord's Maximum
Contribution, Tenant shall not be required to obtain a completion and lien
indemnity bond for the Tenant Work; (e) such work, including all design, plan
review, obtaining all approvals and permits, and construction shall be at
Tenant's sole cost and expense (subject to reimbursement from Landlord's Maximum
Contribution), including delivery to Landlord of plans and specifications of
such Tenant Work, and (f) Tenant shall pay Landlord a fee ("Construction
Monitoring Fee") for monitoring such design, construction and work by Tenant
which shall not exceed one and one-half percent (1.5%) of all costs of materials
and construction (including all costs, overhead and profit under construction
contract[s]) of the Tenant Work. The design and performance of Tenant Work may
(at Tenant's election) be done separately for each of the 301 Chesapeake Space
and the 575 Chesapeake Space, and in such event this Section 2 applies to and
governs each separate part of such Tenant Work, and shall apply separately to
each of the 301 Chesapeake Space and the 575 Chesapeake Space in the same way as
if each were a separate job or separate Tenant Work.
2.4. Design & Construction Responsibility for any Tenant Work. Tenant
--------------------------------------------------------
shall be responsible for the suitability for the Tenant's needs and business of
the design and function of all Tenant Work and for its construction in
compliance with all Law as applicable and as interpreted at the time of
construction of the Tenant Work, including all building codes and the ADA (as
defined in the Lease). In the event that this Lease or any improvements or
alterations in connection herewith triggers any upgrades or modifications of
existing improvements in the Premises to comply with Law, Tenant shall also be
responsible for such upgrades and modifications, except to the extent of any
Landlord Work and Landlord Maximum Contribution, if any. Tenant, through its
architects and/or space planners ("Tenant's Architect"), shall prepare all
architectural plans and specifications, and engineering plans and
specifications, for the real property improvements to be constructed by Tenant
in the Premises in sufficient detail to be submitted to Landlord for approval,
to the extent required pursuant to Article Nine of the Lease, and to be
submitted by Tenant for governmental approvals and building permits and to serve
as the detailed construction drawings and specifications for the contractor, and
shall include, among other things, all partitions, doors, heating, ventilating
and air conditioning installation and distribution, ceiling systems, light
fixtures, plumbing installations, electrical installations and outlets,
telephone installations and outlets, any other installations required by Tenant,
fire and life-safety systems, wall finishes and floor coverings, whether to be
newly installed or requiring changes from the as-is condition of the Premises as
of the date of execution of the Lease. Tenant shall be responsible for the
oversight, supervision and construction of all Tenant Work in compliance with
this Lease, including compliance with all Law as applicable and as interpreted
at the time of construction, including all building codes and the ADA.
2.5. Landlord's Maximum Contribution: Amount; Reimbursable Costs &
--------------------------------------------------------------
Payment. Landlord's Maximum Contribution means the amount or amounts, as
-------
applicable, described below to reimburse Tenant for the actual costs of design,
engineering, plan review, obtaining all approvals and permits, and construction
of Tenant Work respectively in each of the 301 Chesapeake Space and 575
Chesapeake Space, and shall be payable as provided below: (a) up to a maximum
of One Hundred and Fifty-two Thousand Six Hundred and Forty Dollars
($152,640.00) only for Tenant Work in the 301 Chesapeake Space, and (b) up to a
maximum of Fifty-eight Thousand Eight Hundred and Eighty Dollars ($58,880.00)
only for Tenant Work in the 575 Chesapeake Space. In no event shall the
Landlord's Maximum Contribution be used to reimburse any costs of designing,
procuring or installing in the Premises any trade fixtures, movable equipment,
furniture, furnishings, telephone equipment, cabling for any of the foregoing,
or other personal property (collectively "Personal Property" for purposes of
this Rider), and the cost of such Personal Property shall be paid by Tenant.
With respect to each of the 301 Chesapeake Space and the 575 Chesapeake Space,
Landlord's Maximum Contribution shall be paid to Tenant within 30 days after the
later of final completion of the Tenant Work in the respective space and
Landlord's receipt with respect to such space of (i) a certificate of occupancy
(if applicable), (ii) final as-built plans and specifications, (iii) full,
final, unconditional lien releases, and (iv) reasonable substantiation of costs
incurred by Tenant with respect to the Tenant Work. If Tenant does not fully
use all the funds allocable to one of the spaces, it may be used in the other.
Provided, however, Tenant must prior to December 1, 2000 submit written
application with the items required above for disbursement or reimbursement for
any reimbursable costs out of the Landlord's Maximum Contribution, and to the
extent of any funds for which application has not been made prior to that date
or if and to the extent that the reimbursable costs of the Tenant Work are less
than the amount of Landlord's Maximum Contribution, then Landlord shall retain
the unapplied or unused balance of the Landlord's Maximum Contribution and shall
have no obligation or liability to Tenant with respect to such excess.
SECTION 3. MONUMENT SIGNAGE.
3.1 Grant of Right. Notwithstanding any provision of Section 6.06 of the
--------------
Lease to the contrary, so long as Tenant is in continuous operation at and
occupancy of at least fifty percent (50%) of the entire Premises, Tenant shall
have the right, to place Tenant identification on one line of one existing,
exterior
Rider 2 - Page 2 of 2
monument sign for the Building in which the 301 Chesapeake Space is located and
the Building in which the 575 Chesapeake Space is located, subject to the terms
and conditions of this Section ("Exterior Sign Right").
3.2 General Conditions & Requirements. The size, type, style, materials,
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color, method of installation and exact location of the sign, and the contractor
for and all work in connection with the sign, contemplated by this Section shall
(i) be subject to Tenant's compliance with all applicable laws, regulations and
ordinances and with any covenants, conditions and restrictions of record which
affect the Property; (ii) be subject to Tenant's compliance with all
requirements of Landlord's current Project signage criteria at the time of
installation; (iii) be consistent with the design of the Building and the
Project; (iv) be further subject to Landlord's prior written consent. Tenant
shall, at its sole cost and expense, procure, install, maintain and remove such
sign.
3.3 Removal & Restoration. Upon the expiration or termination of the
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Exterior Sign Right, but in no event later than the expiration of the Term or
earlier termination of the Lease, Tenant shall, at its sole cost and expense,
remove such sign and shall repair and restore the area in which the sign was
located to its condition prior to installation of such sign.
3.4 Right Personal. The Exterior Sign Right under this Section is
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personal to Clarent and may not be used by, and shall not be transferable or
assignable (voluntarily or involuntarily) to any person or entity other than an
assignee of the Lease which has satisfied the requirements of Article Ten of the
Lease.
IN WITNESS WHEREOF, the parties hereto have executed this Rider 2 as of the
date first set forth in the Lease.
TENANT: LANDLORD:
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Clarent Corporation, Metropolitan Life Insurance Company,
a Delaware corporation a New York corporation
By ________________________________ By ________________________________
_________________________________ _________________________________
Print name Print name
Its _________________________________ Its _________________________________
(Chairman of Board, President or Vice
President)
By ________________________________
_________________________________
Print name
Its __________________________________
(Secretary, Assistant Secretary, CFO or
Assistant Treasurer)
Rider 2 - Page 3 of 3
