INDUSTRIAL SPACE LEASE (MULTI-TENANT NET)
File
No.
______________________
(MULTI-TENANT
NET)
This
Lease,
dated
October __, 2006 for reference purposes only, is made by and between
Renco
Bayside Investors,
a
California Limited Partnership (“Landlord”), and Rackable
Systems, Inc.,
a
Delaware corporation (“Tenant”), to be effective and binding upon the parties as
of the date the last of the designated signatories to this Lease shall have
executed this Lease (the “Effective Date of this Lease”).
ARTICLE
1
References
1.1 References.
All
references in this Lease (subject to any further clarifications contained in
this Lease) to the following terms shall have the following meaning or refer
to
the respective address, person, date, time period, amount, percentage, calendar
year or fiscal year as below set forth:
|
A.
|
Tenant’s
Address for Notices:
|
00000
Xxxxxxx Xxxxxxx
|
|
Xxxxxxx,
XX 00000
|
||
|
B.
|
Tenant’s
Representative:
|
Xxxxxxxx
Xxxxx
|
|
Phone
Number:
|
(000)
000-0000
|
|
|
C.
|
Landlord’s
Address for Notices:
|
Renco
Bayside Investors
|
|
000
Xxxxxxxx Xxxxxx
|
||
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Xxxxxxxx
Xxxx, XX 00000
|
||
|
D.
|
Landlord’s
Representative:
|
Xxxxxxx
X. Xxxxxx
|
|
Phone
Number:
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(000)
000-0000
|
|
|
E.
|
Lease
Commencement Date:
|
The
Lease shall commence on the later of (i) substantial completion of
the
tenant improvements, or (ii) March 1, 2007.
|
|
F.
|
Intended
Term:
|
Six
(6) years and ten (10) months or a total of 82 months
|
|
G.
|
Lease
Expiration Date:
|
The
last day of the eighty-second (82nd) full calendar month following
the
Commencement Date
|
|
H.
|
Tenant’s
Punchlist Period:
|
Ten
(10) Business Days
|
|
I.
|
First
Month’s Prepaid Rent:
|
$13,304.00
|
|
J.
|
Last
Month’s Prepaid Rent:
|
N/A
|
|
K.
|
Tenant’s
Security Deposit:
|
$40,316.00
|
|
L.
|
Late
Charge Amount:
|
Five
(5%) percent of any delinquent amount due
|
|
M.
|
Tenant’s
Required Liability Coverage:
|
$3,000,000
Single Limit
|
|
N.
|
Tenant’s
Number of Parking Spaces:
|
150
unreserved parking spaces
|
|
O.
|
Brokers:
|
Xxxxx
Xxxxxx - Xxxxxxx & Xxxxx Commercial - representing Tenant and Xxxxx
Xxxxxxx & Xxxx Xxxxxxxx - Xxxxxxx & Xxxxx Commercial -
representing Landlord
|
P. Project
or Property.
That
certain real property situated in the City of Fremont, County of Alameda, State
of California, as presently improved with one (1) building, which real property
is shown on the Site Plan attached hereto as Exhibit “A” and is commonly
known as or otherwise described as follows:
RENCO
40
46600
- 00000 Xxxxxxx Xxxxxxx
Xxxxxxx,
XX 00000
Q. Building.
That
certain Building within the Project in which the Leased Premises are located,
which Building is shown outlined in red on Exhibit “A” hereto.
1.
R. Common
Areas.
The
“Common Areas” shall mean those areas within the Project which are located
outside the buildings and which are provided and designated by Landlord from
time to time for general use by tenants of the Project including driveways,
pedestrian walkways, parking spaces, landscaped areas and enclosed trash
disposal areas.
S. Leased
Premises.
That
certain space which is a portion of the Building, which space is shown outlined
in red on the Floor Plan attached hereto as Exhibit “B” consisting of
approximately 40,316 square feet of gross leasable area and, for purposes of
this Lease, agreed to contain said number of square feet. The Leased Premises
are commonly known as or otherwise described as follows:
00000
Xxxxxxx Xxxxxxx
Xxxxxxx,
XX 00000
T. Base
Monthly Rent.
The term
“Base Monthly Rent” pursuant to paragraph 3.1 shall mean the
following:
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Months
|
||||
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From
|
To
|
#
Mos
|
Base
Monthly Rent
|
|
|
1
|
5
|
5
|
(a)
|
$0.00
|
|
6
|
12
|
7
|
$13,304.00
|
|
|
13
|
24
|
12
|
$30,237.00
|
|
|
25
|
36
|
12
|
$32,253.00
|
|
|
37
|
48
|
12
|
$34,269.00
|
|
|
49
|
60
|
12
|
$36,284.00
|
|
|
61
|
72
|
12
|
$38,300.00
|
|
|
73
|
82
|
10
|
$40,316.00
|
|
|
Total
|
82
|
|||
|
(a)
|
Tenant
shall not pay Landlord the Base Monthly Rent for the initial five
months
of the Lease Term; however, Tenant shall pay Landlord the monthly
Additional Rent Charges during the initial five months of the Lease
Term.
|
U. Permitted
Use.
The term
“Permitted Use” shall mean the following:
General
office, sales, engineering, marketing, manufacturing, warehouse and other
legally related uses.
V. Exhibits.
The term
“Exhibits” shall mean the Exhibits to this Lease which are described as
follows:
Exhibit
“A” - Site
Plan
showing the Project and delineating the Building in which the Leased Premises
are located.
Exhibit
“B” - Floor
Plan outlining the Leased Premises.
Exhibit
“C” - Subordination
Agreement
Exhibit
“D” - Tenant
Estoppel Certificate
Exhibit
“E” - Acceptance
Agreement
Exhibit
“F” - Tenant
Improvement Agreement
W. Addenda.
The term
“Addenda” shall mean the Addendum (or Addenda) to this Lease which is (or are)
described as follows: N/A
ARTICLE
2
Leased
Premises, Term and Possession
2.1 Demise
of Leased Premises.
Landlord
hereby leases to Tenant and Tenant hereby leases from Landlord for Tenant’s own
use in the conduct of Tenant’s business and not for purposes of speculating in
real estate, for the Lease Term and upon the terms and subject to the conditions
of this Lease, that certain interior space described in Article 1(s) as the
Leased Premises, reserving and excepting to Landlord the exclusive right to
50%
of all profits to be derived from any assignments or sublettings by Tenant
during the Lease Term by reason of the appreciation in the fair market rental
value of the Leased Premises. Landlord further reserves the right to install,
maintain, use and replace ducts, wires, conduits and pipes leading through
the
Leased Premises in locations which will not materially interfere with Tenant’s
use of the Leased Premises. Tenant’s lease of the Leased Premises, together with
the appurtenant right to use the Common Areas as described in Article 2.2 below,
shall be subject to the continuing compliance by Tenant with (i) all the
terms and conditions of the Lease, (ii) all Laws governing the use of the
Leased Premises and the Project, (iii) all Private Restrictions, easements
and other matters now of public record respecting the use of the Leased Premises
and the Project, and (iv) all reasonable rules and regulations from time to
time established by Landlord.
2.
2.2 Right
To Use Common Areas.
As an
appurtenant right to Tenant’s right to the use of the Leased Premises, Tenant
shall have the non-exclusive right to use the Common Areas in conjunction with
other tenants of the Project and their invitees, subject to the limitations
on
such use as set forth in Article 4, and solely for the purposes for which they
were designed and intended. Tenant’s right to use the Common Areas shall
terminate concurrently with any termination of this Lease.
2.3 Lease
Commencement Date and Lease Term.
The term
of this Lease shall begin, and the Lease Commencement Date shall be determined
pursuant to Article 2.4 below but in no event prior to March 1, 2007 unless
Tenant occupies the Leased Premises for the purpose of conducting business
therein prior to such date, in which case the Lease Commencement Date shall
be
as determined pursuant to Article 2.7 below. The term of this Lease shall end
on
the Lease Expiration Date (as set forth in Article 1). The Lease Term shall
be
that period of time commencing on the Lease Commencement Date and ending on
the
Lease Expiration Date (the “Lease Term”).
2.4 Delivery
of Possession.
Landlord
shall deliver to Tenant possession of the Leased Premises on or before the
Intended Commencement Date (as set forth in Article 1) in their presently
existing condition, broom clean, unless Landlord shall have agreed, as a
condition to Tenant’s obligation to accept possession of the Leased Premises,
pursuant to an Exhibit or Addenda attached to and made a part of this Lease
to
modify existing interior improvements or to make, construct and/or install
additional specified improvements within the Leased Premises, in which case
Landlord shall deliver to Tenant possession of the Leased Premises on the
Intended Commencement Date as so modified and/or improved. If Landlord is unable
to so deliver possession of the Leased Premises to Tenant on or before the
Intended Commencement Date, for whatever reason, Landlord shall not be in
default under this Lease, nor shall this Lease be void, voidable or cancelable
by Tenant until the lapse of ninety (90) days after the Intended Commencement
Date (the “delivery grace period”). The Lease Commencement Date shall not be
deemed to have occurred until such date as Landlord notifies Tenant that the
Leased Premises are Ready for Occupancy and delivers possession of the Leased
Premises to Tenant. Additionally, the delivery grace period above set forth
shall be extended for such number of days as Landlord may be delayed in
delivering possession of the Leased Premises to Tenant by reason of the actions
of Tenant. If Landlord is unable to deliver possession of the Leased Premises
to
Tenant within the described delivery grace period (including any extensions
thereof by reason of Force Majeure or the actions of Tenant), then Tenant’s sole
remedy shall be to cancel and terminate this Lease, and in no event shall
Landlord be liable to Tenant for such delay. Tenant may not cancel this Lease
at
any time after the date Landlord notifies Tenant the Leased Premises are Ready
for Occupancy.
2.5 Acceptance
of Possession.
Tenant
acknowledges that it has inspected the Leased Premises and is willing to accept
them in their existing condition, broom clean, unless Landlord shall have
agreed, as a condition to Tenant’s obligation to accept possession of the Leased
Premises, pursuant to an Exhibit or Addenda attached to and made a part of
this
Lease to modify existing interior improvements or to make, construct and/or
install additional specified improvements within the Leased Premises, in which
case Tenant agrees to accept possession of the Leased Premises when Landlord
has
substantially completed such modifications or improvements and the Leased
Premises are Ready for Occupancy. If Landlord shall have so modified existing
improvements or constructed additional improvements within the Leased Premises
for Tenant, Tenant shall, within Tenant’s Punchlist Period (as set forth in
Article 1) which shall commence on the date that Landlord notifies Tenant
that the Leased Premises are Ready for Occupancy and delivers possession of
the
Leased Premises to Tenant, submit to Landlord a signed copy of the Acceptance
Agreement attached hereto as Exhibit “E” together with a punchlist of all
incomplete and/or improper work performed by Landlord. Upon the expiration
of
Tenant’s Punchlist Period, Tenant shall be conclusively deemed to have accepted
the Leased Premises in their then-existing condition as so delivered by Landlord
to Tenant, except as to those items reasonably set forth in the punchlist
submitted to Landlord prior to the expiration of said period. Landlord agrees
to
correct promptly all items reasonably set forth in Tenant’s punchlist,
provided
that
such
punchlist was submitted to Landlord within Tenant’s Punchlist Period.
Additionally, Landlord agrees to place in good working order all existing
plumbing, lighting, electrical, life safety, access control, heating,
ventilating and air conditioning systems within the Leased Premises and all
man
doors and roll-up truck doors serving the Leased Premises to the extent that
such systems and/or items are not in good operating condition as of the date
Tenant accepts possession of the Leased Premises; provided
that,
and
only if, Tenant notifies Landlord in writing of such failures or deficiencies
within the Punchlist Period.
2.6 Surrender
of Possession.
Immediately prior to the expiration or upon the sooner termination of this
Lease, Tenant shall remove all of Tenant’s signs from the exterior of the
Building and shall remove all of Tenant’s equipment, trade fixtures, furniture,
supplies, wall decorations and other personal property from the Leased Premises,
and shall vacate and surrender the Leased Premises to Landlord in the same
condition, broom clean, as existed at the Lease Commencement Date. Tenant shall
repair all damage to the Leased Premises caused by Tenant or by Tenant’s removal
of Tenant’s property and all damage to the exterior of the Building caused by
Tenant’s removal of Tenant’s signs. Tenant shall patch and refinish, to
Landlord’s reasonable satisfaction, all penetrations made by Tenant or its
employees to the floor, walls or ceiling of the Leased Premises, whether such
penetrations were made with Landlord’s approval or not. Tenant shall clean,
repair or replace all stained or damaged ceiling tiles, wall coverings and
clean
or replace as may be required floor coverings to the reasonable satisfaction
of
Landlord. Tenant shall replace all burned out light bulbs and damaged light
lenses, and clean and repaint all painted walls. Tenant shall repair all damage
caused by Tenant to the exterior surface of the Building and the paved surfaces
of the outside areas adjoining the Leased Premises and, where necessary, replace
or resurface same. Additionally, Tenant shall, prior to the expiration or sooner
termination of this Lease, remove any improvements installed by Tenant (other
than the initial tenant improvements install pursuant to Exhibit F) and repair
all damage caused by such removal, unless Landlord, at the time it consented
to
such improvements waived the right to require such removal. If the Leased
Premises are not surrendered to Landlord in the condition required by this
Article at the expiration or sooner termination of this Lease, Landlord may,
at
Tenant’s expense, so remove Tenant’s signs, property and/or improvements not so
removed and make such repairs and replacements not so made or hire, at Tenant’s
expense, independent contractors to perform such work. Tenant shall be liable
to
Landlord for all costs incurred by Landlord in returning the Leased Premises
to
the required condition, plus interest on all costs incurred from the date paid
by Landlord at the then maximum rate of interest not prohibited by Law until
paid, payable by Tenant to Landlord within ten days after receipt of a statement
therefore from Landlord, and Tenant shall be deemed to have impermissibly held
over until such time as such required work is completed, and Tenant shall pay
Base Monthly Rent and Additional Rent in accordance with the terms of Section
13.2 (Holding Over) until such work is completed. Tenant shall indemnify
Landlord against loss or liability resulting from delay by Tenant in so
surrendering the Leased Premises, including, without limitation, any claims
made
by any succeeding tenant or any losses to Landlord due to lost opportunities
to
lease to succeeding tenants.
3.
2.7 Early
Occupancy.
Provided
that Tenant and its agents do not interfere with Landlord performance of the
Tenant Improvement Work, Landlord shall allow Tenant access to the Leased
Premises not less than thirty (30) days prior to the Substantial Completion
of
the Tenant Improvements for the purpose of Tenant installing furniture,
equipment or fixtures (including Tenant’s data and telephone equipment) in the
Leased Premises and otherwise prepare the Leased Premises for occupancy.
Tenant’s entry shall be subject to the terms of this Lease, except that Base
Monthly Rent shall not commence until the Lease Commencement Date. If Tenant
occupies the Leased Premises for the purpose of conducting its business therein
prior to the Lease Commencement Date, unless otherwise agreed in writing by
Landlord, the Lease Commencement Date shall be deemed to have occurred on such
sooner date, and Tenant shall be obligated to perform all its obligations under
this Lease, including the obligation to pay rent, from that sooner date.
ARTICLE
3
Rent,
Late Charges and Security Deposits
3.1 Base
Monthly Rent.
Commencing on the Lease Commencement Dated (as determined pursuant
Article 2.3 above) and continuing throughout the Lease Term, Tenant shall
pay to Landlord, without prior demand therefore, in advance on the first day
of
each calendar month, as base monthly rent, the amount set forth as “Base Monthly
Rent” in Article 1 (the Base Monthly Rent”).
3.2 Additional
Rent.
Commencing on the Lease Commencement Date (as determined pursuant to Article
2.3
above) and continuing throughout the Lease Term, in addition to the Base Monthly
Rent, Tenant shall pay to Landlord as additional rent (the “Additional Rent”)
the following amounts:
A. Tenant’s
Proportionate Share of all Building Operating Expenses (as defined in Article
13).
Payment
shall be made by whichever of the following methods (or combination of methods)
is (are) from time to time designated by Landlord:
(1) Landlord
may xxxx to Tenant, on a periodic basis not more frequently than monthly,
Tenant’s Proportionate Share of such expenses (or group of expenses) as paid or
incurred by Landlord, and Tenant shall pay such share of such expenses within
ten days after receipt of a written xxxx therefore from Landlord;
and/or
(2) Landlord
may deliver to Tenant Landlord’s reasonable estimate of any given expense (or
group of expenses, such as Landlord’s Insurance Costs or Real Property Taxes)
which it anticipates will be paid or incurred for the ensuing calendar or fiscal
year, as Landlord may determine, and Tenant shall pay its Proportionate Share
of
such expenses for such year in equal monthly installments during such year
with
the installments of Base Monthly Rent. Landlord reserves the right to change
from time to time the method of billing Tenant its Proportionate Share of such
expenses or the periodic basis on which such expenses are billed.
B. Landlord’s
share of the consideration received by Tenant upon certain assignments and
sublettings as required by Article 7;
C. Any
legal
fees and costs that Tenant is obligated to pay or reimburse to Landlord pursuant
to Article 13; and
D. Any
other
charges or reimbursements due Landlord from Tenant pursuant to the terms of
this
Lease.
3.3 Year-End
Adjustments.
If
Landlord shall have elected to charge Tenant its Proportionate Share of the
Building Operating Expenses (or any group of such expenses) on an estimated
basis in accordance with the provisions of Article 3.2A(2) above, Landlord
shall
furnish to Tenant within three months following the end of the applicable
calendar or fiscal year, as the case may be, a statement setting forth (i)
the
amount of such expenses paid or incurred during the just ended calendar or
fiscal year, as appropriate, and (ii) Tenant’s Proportionate Share of such
expenses for such period. If Tenant shall have paid more than its Proportionate
Share of such expenses for the stated period, Landlord shall, at its election,
either (i) credit the amount of such overpayment toward the next ensuing payment
or payments of Additional Rent that would otherwise be due or (ii) refund in
cash to Tenant the amount of such overpayment. If such year-end statement shall
show that Tenant did not pay its Proportionate Share of any such expenses in
full, then Tenant shall pay to Landlord the amount of such underpayment within
thirty (30) days from Landlord’s billing of same to Tenant. The provisions of
this Article shall survive the expiration or sooner termination of this
Lease.
4.
3.4 Late
Charge and Interest on Rent in Default.
Tenant
acknowledges that the late payment by Tenant of any monthly installment of
Base
Monthly Rent or any Additional Rent will cause Landlord to incur certain costs
and expenses not contemplated under this Lease, the exact amounts of which
are
extremely difficult or impractical to fix. Such costs and expenses will include,
without limitation, administration and collection costs and processing and
accounting expenses. Therefore, if any installment of Base Monthly Rent is
not
received by Landlord from Tenant within six calendar days after the same becomes
due, Tenant shall immediately pay to Landlord a late charge in an amount equal
to the amount set forth in Article 1 as the “Late Charge Amount”, and if any
Additional Rent is not received by Landlord within six calendar days after
same
becomes due, Tenant shall immediately pay to Landlord a late charge in an amount
equal to ten percent of the Additional Rent not so paid. Landlord and Tenant
agree that this late charge represents a reasonable estimate of such costs
and
expenses and is fair compensation to Landlord for its loss suffered by reason
of
Tenant’s failure to make timely payment. In no event shall this provision for a
late charge be deemed to grant to Tenant a grace period or extension of time
within which to pay any rental installment or prevent Landlord from exercising
any right or remedy available to Landlord upon Tenant’s failure to pay each
rental installment due under this Lease when due, including the right to
terminate this Lease. If any rent remains delinquent for a period in excess
of
six calendar days, then, in addition to such late charge, Tenant shall pay
to
Landlord interest on any rent that is not so paid from said sixth day at the
then maximum rate of interest not prohibited by Law until paid. Notwithstanding
the above, once but only once in any twelve (12) month period during the Lease
Term, Tenant shall be entitled to written notice of non-receipt of Base Monthly
Rent or Additional Rent from Landlord, and Tenant shall not be liable for any
Late Charge Amount, interest or other late charge hereunder if such installment
of Base Monthly Rent or Additional Rent is received by Landlord within five
(5)
days after Tenant’s receipt of such notice from Landlord.
3.5 Payment
of Rent.
All rent
shall be paid in lawful money of the United States, without any abatement,
deduction or offset for any reason whatsoever, to Landlord at such address
as
Landlord may designate from time to time. Tenant’s obligation to pay Base
Monthly Rent and all Additional Rent shall be prorated at the commencement
and
expiration of the Lease Term. The failure by Tenant to pay any Additional Rent
as required pursuant to this Lease when due shall be treated the same as a
failure by Tenant to pay Base Monthly Rent when due, and Landlord shall have
the
same rights and remedies against Tenant as Landlord would have if Tenant failed
to pay the Base Monthly Rent when due.
3.6 Prepaid
Rent.
Upon
signing this Lease, Tenant shall immediately pay to Landlord the amount set
forth in Article 1 as “First Month’s Prepaid Rent” as prepayment of rent for
credit against the first installment(s) of Base Monthly Rent due
hereunder.
3.7 Security
Deposit.
Upon
signing this Lease, Tenant shall immediately deposit with Landlord the amount
set forth in Article 1 as the “Security Deposit” as security for the performance
by Tenant of the terms of this Lease to be performed by Tenant, and not as
prepayment of rent. Landlord may apply such portion or portions of the Security
Deposit as are reasonably necessary for the following purposes: (i) to remedy
any default by Tenant in the payment of Base Monthly Rent or Additional Rent
or
a late charge or interest on defaulted rent; (ii) to repair damage to the Leased
Premises caused by Tenant; (iii) to clean and repair the Leased Premises
following their surrender to Landlord if not surrendered in the condition
required pursuant to the provisions of Article 2; and (iv) to remedy any other
default of Tenant to the extent permitted by Law including, without limitation,
paying in full on Tenant’s behalf any sums claimed by materialmen or contractors
of Tenant to be owing to them by Tenant for work done or improvements made
at
Tenant’s request to the Leased Premises. In this regard, Tenant hereby waives
any restriction on the uses to which the Security Deposit may be applied as
contained in Section 1950.7(c) of the California Civil Code and/or any successor
statute. In the event the Security Deposit or any portion thereof is so used,
Tenant shall pay to Landlord, promptly upon demand, an amount in cash sufficient
to restore the Security Deposit to the full original sum. Landlord shall not
be
deemed a trustee of the Security Deposit. Landlord may use the Security Deposit
in Landlord’s ordinary business and shall not be required to segregate it from
its general accounts. Tenant shall not be entitled to any interest on the
Security Deposit. If Landlord transfers the Building during the Lease Term,
Landlord shall pay the Security Deposit to any subsequent owner in conformity
with the provisions of Section 1950.7 of the California Civil Code and/or any
successor statute, in which event the transferring landlord shall be released
from all liability for the return of the Security Deposit. Tenant specifically
grants to Landlord (and hereby waives the provisions of California Civil Code
Section 1950.7 to the contrary) a period of sixty days following a surrender
of
the Leased Premises by Tenant to Landlord within which to return the Security
Deposit (less permitted deductions) to Tenant, it being agreed between Landlord
and Tenant that sixty days is a reasonable period of time within which to
inspect the Leased Premises, make required repairs, receive and verify workmen’s
xxxxxxxx therefore, and prepare a final accounting with respect to such deposit.
In no event shall the Security Deposit, or any portion thereof, be considered
prepaid rent.
ARTICLE
4
Use
of Leased Premises and Common Areas
4.1 Permitted
Use.
Tenant
shall be entitled to use the Leased Premises solely for the “Permitted Use” as
set forth in Article 1 and for no other purpose whatsoever. Subject to the
limitations contained in this Article 4, Tenant shall have the right to use
the
Common Areas, in conjunction with other tenants and during normal business
hours, solely for the purposes for which they were intended and for no other
purposes whatsoever. Tenant shall not have the right to use the exterior
surfaces of exterior walls, the area beneath the floor or the area above the
ceiling of the Leased Premises.
4.2 General
Limitations on Use.
Tenant
shall not do or permit any person for whom Tenant is responsible to do anything
in or about the Leased Premises, the Building, the Common Areas or the Project
which does or could (i) interfere with the rights of other tenants or
occupants of the Building or the Project, (ii) jeopardize the structural
integrity of the Building or (iii) cause damage to any part of the Building
or the Project. Tenant shall not operate any equipment within the Leased
Premises which does or could (i) injure, vibrate or shake the Leased
Premises or the Building, (ii) damage, overload, corrode, or impair the
efficient operation of any electrical, plumbing, sewer, heating, ventilating
or
air conditioning systems within or servicing the Leased Premises or the Building
or (iii) damage or impair the efficient operation of the sprinkler system
(if any) within or servicing the Leased Premises or the Building. Tenant shall
not install any equipment or antennas on or make any penetrations of the
exterior walls or roof of the Building. Tenant shall not affix any equipment
to
or make any penetrations or cuts in the floor, ceiling or walls of the Leased
Premises. Tenant shall not place any loads upon the floors, walls, ceiling
or
roof systems which could endanger the structural integrity of the Building
or
damage its floors, foundations or supporting structural components. Tenant
shall
not place any explosive, flammable or harmful fluids, including Hazardous
Materials, or other waste materials in the drainage systems of the Building
or
the Project. Tenant shall not drain or discharge any fluids in the landscaped
areas or across the paved areas of the Project. Tenant shall not use any area
located outside the Leased Premises for the storage of its materials, supplies,
inventory or equipment, and all such materials, supplies, inventory and
equipment shall at all times be stored within the Leased Premises. Tenant shall
not commit nor permit to be committed any waste in or about the Leased Premises,
the Common Areas or the Project.
5.
4.3 Noise
and Emissions.
All
noise generated by Tenant in its use of the Leased Premises shall be confined
or
muffled so that it does not interfere with the businesses of or annoy other
tenants of the Building or the Project. All dust, fumes, odors and other
emissions generated by Tenant’s use of the Leased Premises shall be sufficiently
dissipated in accordance with sound environmental practices and exhausted from
the Leased Premises in such a manner so as not to interfere with the businesses
of or annoy other tenants of the Building or the Project, or cause any damage
to
the Leased Premises or the Building or any component part thereof or the
property of other tenants of the Building or the Project.
4.4 Trash
Disposal.
Tenant
shall provide trash and garbage disposal facilities inside the Leased Premises
for all of its trash, garbage and waste requirements and shall cause such trash,
garbage and waste to be regularly removed from the Leased Premises at Tenant’s
sole cost. Tenant shall keep all areas outside the Leased Premises and all
fire
corridors and mechanical equipment rooms in or about the Leased Premises free
and clear of all trash, garbage, waste and boxes containing same at all
times.
4.5 Parking.
Tenant
is allocated, and Tenant and its employees and invitees shall have the
non-exclusive right to use, not more than the number of parking spaces set
forth
in Article 1 as “Tenant’s Number of Parking Spaces”. Tenant shall not, at any
time, use or permit its employees or invitees to use more parking spaces than
the number so allocated to Tenant. Tenant shall not have the exclusive right
to
use any specific parking space, and Landlord reserves the right to designate
from time to time the location of the parking spaces allocated for Tenant’s use.
In the event Landlord elects or is required by any Law to limit or control
parking within the Project, whether by validation of parking tickets or any
other method, Tenant agrees to participate in such validation or other program
as reasonably established by Landlord. Tenant shall not, at any time, park
or
permit to be parked any trucks or vehicles adjacent to entryways or loading
areas within the Project so as to interfere in any way with the use of such
areas, nor shall Tenant, at any time, park or permit the parking of Tenant’s
trucks or other vehicles, or the trucks and vehicles of Tenant’s suppliers or
others, in any portion of the Common Areas not designated by Landlord for such
use by Tenant. Tenant shall not, at any time, park or permit to be parked any
recreational vehicles, inoperative vehicles or equipment on any portion of
the
common parking area or other Common Areas of the Project. Tenant agrees to
assume responsibility for compliance by its employees and invitees with the
parking provisions contained herein. If Tenant or its employees park any vehicle
within the Project in violation of these provisions, then Landlord may charge
Tenant, as Additional Rent, and Tenant agrees to pay, as Additional Rent, Fifty
Dollars per day for each day or partial day that each such vehicle is illegally
parked, or parked in any area other than that designated. Tenant hereby
authorizes Landlord, at Tenant’s sole expense, to tow away from the Project and
store until redeemed by its owner any vehicle belonging to Tenant or Tenant’s
employees parked in violation of these provisions.
4.6 Signs.
Tenant
shall not place or install on or within any portion of the Leased Premises,
the
Building, the Common Areas or the Project any sign (other than a business
identification sign first approved by Landlord in accordance with this Article),
advertisements, banners, placards or pictures which are visible from the
exterior of the Leased Premises. Tenant shall not place or install on or within
any portion of the Leased Premises, the Building, the Common Areas or the
Project any business identification sign which is visible from the exterior
of
the Leased Premises until Landlord shall have first approved in writing the
location, size, content, design, method of attachment and material to be used
in
the making of such sign. Any signs, once approved by Landlord, shall be
installed only in strict compliance with Landlord’s approval, at Tenant’s
expense, using a person first approved by Landlord to install same. Landlord
may
remove any signs (not first approved in writing by Landlord), advertisements,
banners, placards or pictures so placed by Tenant on or within the Leased
Premises, the Building, the Common Areas or the Project and charge to Tenant
the
cost of such removal, together with any costs incurred by Landlord to repair
any
damage caused thereby, including any cost incurred to restore the surface upon
which such sign was so affixed to its original condition. Tenant shall remove
any such signs, repair any damage caused thereby, and restore the surface upon
which the sign was affixed to its original condition, all to Landlord’s
reasonable satisfaction, upon the termination of this Lease.
4.7 Compliance
With Laws and Private Restrictions.
Tenant
shall not use or permit any person for whom Tenant is responsible to use the
Leased Premises in any manner which violates any Laws or Private Restrictions.
Tenant shall abide by and shall promptly observe and comply with, at its sole
cost and expense, all Laws and Private Restrictions respecting the use and
occupancy of the Leased Premises, the Building, the Common Areas or the Project
and shall defend with competent counsel, indemnify and hold Landlord harmless
from any claims, damages or liability resulting from Tenant’s failure to do
so.
4.8 Compliance
With Insurance Requirements.
With
respect to any insurance policies carried by Landlord in accordance with the
provisions of this Lease, Tenant shall not conduct (nor permit any other person
to conduct) any activities within the Leased Premises, or store, keep or use
anything within the Leased Premises which (i) is prohibited under the terms
of
any of such policies, (ii) could result in the termination of the coverage
afforded under any of such policies, (iii) could give to the insurance carrier
the right to cancel any of such policies, or (iv) could cause an increase in
the
rates (over standard rates) charged for the coverage afforded under any of
such
policies. Tenant shall comply with all requirements of any insurance company,
insurance underwriter, or Board of Fire Underwriters which are necessary to
maintain, at standard rates, the insurance coverages carried by either Landlord
or Tenant pursuant to this Lease.
6.
4.9 Landlord’s
Right to Enter.
Landlord
and its agents shall have the right to enter the Leased Premises during normal
business hours and subject to Tenant’s reasonable security measures for the
purpose of (i) inspecting the same; (ii) supplying any services to be provided
by Landlord to Tenant; (iii) showing the Leased Premises to prospective
purchasers or mortgagees (or prospective tenants for the Leased Premises during
the last six (6) months of the Lease Term); (iv) making necessary alterations,
additions or repairs; (v) performing any of Tenant’s obligations when
Tenant has failed to do so after giving Tenant reasonable written notice of
its
intent to do so; and (vi) posting notices of non-responsibility or “For Lease”
or “For Sale” signs. Additionally, Landlord shall have the right to enter the
Leased Premises at times of emergency. Any entry into the Leased Premises or
portions thereof obtained by Landlord in accordance with this Article shall
not
under any circumstances be construed or deemed to be a forcible or unlawful
entry into, or a detainer of, the Leased Premises, or an eviction, actual or
constructive, of Tenant from the Leased Premises or any portion thereof. In
exercising its right to enter the Leased Premises for any reason, Landlord
shall
use commercially reasonable efforts not to interfere with Tenant’s use of and
operations within the Leased Premises and its access thereto, including
parking.
4.10 Control
of Common Areas.
Landlord
shall at all times have exclusive control of the Common Areas. Landlord shall
have the right, without the same constituting an actual or constructive eviction
and without entitling Tenant to any reduction in or abatement of rent, to:
(i)
temporarily close any part of the Common Areas to whatever extent required
in
the opinion of Landlord’s counsel to prevent a dedication thereof or the accrual
of any prescriptive rights therein; (ii) temporarily close all or any part
of
the Common Areas to perform maintenance or for any other reason deemed
sufficient by Landlord; (iii) change the shape, size, location, number and
extent of improvements within the Common Areas including, without limitation,
changing the location of driveways, entrances, exits, parking spaces, parking
areas, sidewalks, directional or locator signs, or the direction of the flow
of
traffic; and (iv) to make additions to the Common Areas including, without
limitation, the construction of parking structures. Landlord shall have the
right to change the name or address of the Building. Tenant, in its use of
the
Common Areas, shall keep the Common Areas free and clear of all obstructions
created or permitted by Tenant. If, in the opinion of Landlord, unauthorized
persons are using any of the Common Areas by reason of, or under claim of,
the
express or implied authority or consent of Tenant, then Tenant, upon demand
of
Landlord, shall restrain, to the fullest extent then allowed by Law, such
unauthorized use, and shall initiate such appropriate proceedings as may be
required to so restrain such use. Nothing contained herein shall affect the
right of Landlord at any time to remove any unauthorized person from the Common
Areas or to prohibit the use of the Common Areas by unauthorized persons,
including, without limitation, the right to prohibit mobile food and beverage
vendors. In exercising any such right regarding the Common Areas, Landlord
shall
make a reasonable effort to minimize any disruption to Tenant’s
business.
4.11 Rules
and Regulations.
Landlord
shall have the right from time to time to establish reasonable rules and
regulations and/or amendments or additions thereto respecting the use of space
within the Project and the use of the Common Areas for the care and orderly
management of the Project and the safety of its tenants, occupants and invitees.
Upon delivery to Tenant of a copy of such rules and regulations or any
amendments or additions thereto, Tenant shall comply with such rules and
regulations. A violation by Tenant of any of such rules and regulations shall
constitute a default by Tenant under this Lease. If there is a conflict between
the rules and regulations and any of the provisions of this Lease, the
provisions of this Lease shall prevail. Landlord shall not be responsible or
liable to Tenant for the violation of such rules and regulations by any other
tenant of the Project.
4.12 Environmental
Protection.
Landlord
may voluntarily cooperate in a reasonable manner with the efforts of all
governmental agencies in reducing actual or potential environmental damage.
Tenant shall not be entitled to terminate this Lease or to any reduction in
or
abatement of rent by reason of such compliance or cooperation. Tenant agrees
at
all times to cooperate fully with Landlord and to abide by all rules and
regulations and requirements which Landlord may reasonably prescribe in order
to
comply with the requirements and recommendations of governmental agencies
regulating, or otherwise involved in, the protection of the environment.
4.13 Outside
Areas.
No
materials, pallets, supplies, tanks or containers whether above or below ground
level, equipment, finished products or semi-finished products, raw materials,
inoperable vehicles or articles of any nature shall be stored upon or permitted
to remain outside of the Leased Premises except in fully fenced and screened
areas outside the Building which have been designed for such purpose and have
been approved in writing by Landlord for such use by Tenant.
4.14 Hazardous
Materials.
Landlord
and Tenant agree as follows with respect to the existence or use of Hazardous
Materials on the Property:
A. Any
handling, transportation, storage, treatment, disposal or use of Hazardous
Materials by Tenant, Tenant’s Agents, or any other party after the Effective
Date of this Lease in or about the Property shall strictly comply with all
applicable Hazardous Materials Laws. Tenant shall indemnify, defend upon demand
with counsel reasonably acceptable to Landlord, and hold harmless Landlord
from
and against any and all liabilities, losses, claims, damages, lost profits,
consequential damages, interest, penalties, fines, court costs, remediation
costs, investigation costs, and other expenses which result from or arise in
any
manner whatsoever out of the use, storage, treatment, transportation, release,
or disposal of Hazardous Materials on or about the Property by Tenant, or
Tenant’s Agents or Permitees after the Effective Date.
7.
B. If
the
presence of Hazardous Materials on the Property caused or permitted by Tenant
or
Tenant’s Agents or Permitees after the Effective Date of this Lease results in
contamination or deterioration of water or soil or any other part of the
Property, then Tenant shall promptly take any and all action necessary to
investigate and remediate such contamination. Tenant shall further be solely
responsible for, and shall defend, indemnify and hold Landlord and its agents
harmless from and against all claims, costs and liabilities, including
attorney’s fees and costs, arising out of or in connection with any
investigation and remediation (including investigative analysis, removal,
cleanup, and/or restoration work) required hereunder to return the Leased
Premises, Building, Common Areas, Outside Areas, and/or Property and any other
property of whatever nature to their condition existing prior to the appearance
of such Hazardous Materials.
C. Landlord
and Tenant shall each give written notice to the other as soon as reasonably
practicable of (i) any communication received from any governmental authority
concerning Hazardous Materials which relates to the Property, and (ii) any
contamination of the Property by Hazardous Materials which constitutes a
violation of any Hazardous Materials Law. Tenant acknowledges that Landlord,
as
the owner of the Property, at Landlord’s election, shall have the sole right at
Tenant’s expense to negotiate, defend, approve, and/or appeal any action taken
or order issued with regard to Hazardous Materials by any applicable
governmental authority. Tenant may use small quantities of household chemicals
such as adhesive, lubricants, and cleaning fluids in order to conduct its
business at the Premises and such other Hazardous Materials as are necessary
to
the operation of Tenant’s business of which Landlord receives notice prior to
such Hazardous Materials being brought onto the Property (or any portion
thereof) and which Landlord consents in writing may be brought onto the
Property. In granting Landlord’s consent, Landlord may specify the location and
manner or use, storage, or handling of any Hazardous Material. Landlord’s
consent shall in no way relieve Tenant from any of its obligations as contained
herein. Tenant shall notify Landlord in writing at least ten (10) days prior
to
the first introduction by Tenant of any Hazardous Material on the Leased
Premises, Building, Common Areas, Outside Areas, and/or Property. Tenant shall
provide Landlord with a list of all Hazardous Materials and the quantities
of
each Hazardous Material to be stored, or used, on any portion of the Property,
and upon Landlord’s request Tenant shall provide Landlord with copies of any and
all Hazardous Materials Management Plans, Material Safety Data Sheets, Hazardous
Waste Manifests, and other documentation maintained or received by Tenant
pertaining to the Hazardous Materials used, stored, or transported or to be
used, stored, or transported on any portion of the Property. At any time during
the Lease Term, Tenant shall, within five days after written request therefor
received from Landlord, disclose in writing all Hazardous Materials that are
being used by Tenant on the Property (or have been used on the Property), the
nature of such use, and the manner of storage and disposal.
D. Landlord
may cause testing xxxxx to be installed on the Property and may cause the ground
water to be tested to detect the presence of Hazardous Material by the use
of
such tests as are then customarily used for such purposes. If Tenant so
requests, Landlord shall supply Tenant with copies of such test results. The
cost of such tests and of the installation, maintenance, repair and replacement
of such xxxxx shall be paid by Landlord unless such tests disclose the existence
of facts which give rise to liability of Tenant pursuant to its indemnity given
in A and/or B above. If reasonably required due to Tenant’s use of the Leased
Premises, Landlord may retain consultants to inspect the Property, conduct
periodic environmental audits, and review any information provided by Tenant.
Tenant shall pay the reasonable cost of fees charged by Landlord’s
consultants.
E. Upon
the
expiration or earlier termination of the Lease, Tenant, at its sole cost, shall
remove from the Property all Hazardous Materials introduced by Tenant and shall
provide a certificate to Landlord from a registered consultant satisfactory
to
Landlord, certifying that Tenant has caused no contamination of building(s),
soil or groundwater in or about the Leased Premises, Building, Common Areas,
Outside Areas, or Property. If Tenant fails to so surrender the Property, Tenant
shall indemnify and hold Landlord harmless from all damages resulting from
Tenant’s failure to surrender the Property as required by this Subsection,
including, without limitation, any claims or damages in connection with the
condition of the Property including, without limitation, damages occasioned
by
the inability to Lease the Property (or any portion thereof) or a reduction
in
the fair market and/or rental value of the Property, Building, Common Areas,
Outside Areas, and/or Property by reason of the existence of any Hazardous
Materials in or around the Leased Premises, Building, Common Areas, Outside
Areas, and/or Property. If any action is required to be taken by a governmental
authority to test, monitor, and/or clean up Hazardous Materials from the Leased
Premises, Building, Common Areas, Outside Areas, and/or Property and such action
is not completed prior to the expiration or earlier termination of the Lease,
Tenant shall be deemed to have impermissibly held over until such time as such
required action is completed, and Tenant shall pay Base Monthly Rent and
Additional Rent in accordance with the terms of Section 13.2 (Holding Over).
In
addition, Landlord shall be entitled to all damages directly or indirectly
incurred in connection with such holding over, including without limitation,
damages occasioned by the inability to Lease the Property or a reduction of
the
fair market and/or rental value of the Leased Premises, Building, Common Areas,
Outside Areas, and/or Property.
F. As
used
herein, the term “Hazardous Materials(s)” means any hazardous or toxic
substance, material or waste, which is or becomes regulated by any federal,
state, regional or local governmental authority because it is in any way
hazardous, toxic, carcinogenic, mutagenic or otherwise adversely affects any
part of the environment or creates risks of any such hazards or effects,
including, but not limited to, petroleum; asbestos, and polychlorinated bipheyls
and any material, substance, or waste (a) defined as a “hazardous waste,”
“extremely hazardous waste” or “restricted hazardous waste” under Sections
25115, 25117 or 25122.7, or listed pursuant to Section 25140 of the California
Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law);
(b) defined as a “hazardous substance” under Section 25316 of the California
Health and Safety Code, Division 20, Chapter 6.8 (Xxxxxxxxx-Xxxxxxx Xxxxxx
Hazardous Substance Account Act); (c) defined as a “hazardous material,”
“hazardous substance” or “hazardous waste” under Section 25501 of the California
Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release
Response Plans and Inventory); (d) defined as a “hazardous substance” under
Section 25281 of the California Health and Safety Code, Division 20, Chapter
6.7
(Underground Storage of Hazardous Substances); (e) defined as a “hazardous
substance” pursuant to Section 311 of the Clean Xxxxx Xxx, 00 Xxxxxx Xxxxxx Code
Sections 1251 et
seq.
(33
U.S.C. 1321) or listed pursuant to Section 307 of the Clean Water Act (33 U.S.C.
1317); (f) defined as a “hazardous waste” pursuant to Section 1004 of the
Resource Conservation and Xxxxxxxx Xxx, 00 Xxxxxx Xxxxxx Code Sections 6901
et
seq.
(42
U.S.C. 6903); or (g) defined as a “hazardous substance” pursuant to Section 101
of the Comprehensive Environmental Response, Compensation, and Liability Act,
42
United States Code Section 9601 et
seq.
(42
U.S.C. 9601) or (h) defined as a “hazardous substance” pursuant to Section 311
of the Federal Water Pollution Control Act, 33 U.S.C. 1251 et
seq.
or (i)
listed pursuant to Section 307 of the Federal Water Pollution Control Act (33
U.S.C. 1317 ) or (j) regulated under the Toxic Substances Control Act (15 U.S.C.
2601 et
seq.)
or (k)
defined as a “hazardous material “under Section 66680 or 66084 of Title 22 of
the California Code of Regulations (Administrative Code) (l) listed in the
United States Department of Transportation Hazardous Materials Table (49 C.F.R.
172.101) or (m) listed by the Environmental Protection Agency as “hazardous
substances” ( 4 0 C.F.R. Part 302 ) and amendments thereto. The term “Hazardous
Material Laws” shall mean (i) all of the foregoing laws as amended from time to
time and (ii) any other federal, state, or local law, ordinance, regulation,
or
order regulating Hazardous Materials.
8.
G. Tenant’s
failure to comply with any of the requirements of this Section regarding the
storage, use, disposal, or transportation of Hazardous Materials, or the
appearance of any Hazardous Materials on the Leased Premises, Building, Common
Area, Outside Area, and/or the Property without Landlord’s consent shall be an
Event of Default as defined in this Lease. The obligations of Landlord and
Tenant under this Section shall survive the expiration or earlier termination
of
the Lease Term as to occurrences during Tenant’s occupancy. The rights and
obligations of Landlord and Tenant within respect to issues relating to
Hazardous Materials are exclusively established by this section. In the event
of
any inconsistency between any other part of this Lease and this Section, the
terms of this Section shall control.
ARTICLE
5
Repairs,
Maintenance, Services And Utilities
5.1 Repair
and Maintenance.
Except
in the case of damage to or destruction of the Leased Premises, the Building
or
the Project caused by an Act of God or other peril, in which case the provisions
of Article 10 shall control, the parties shall have the following obligations
and responsibilities with respect to the repair and maintenance of the Leased
Premises, the Building and the Common Areas.
A. Tenants
Obligation.
Tenant
shall, at all times during the Lease Term and at its sole cost and expense,
regularly clean and continuously keep and maintain in good order, condition
and
repair the Leased Premises and every part thereof and all appurtenances thereto,
including, without limiting the generality of the foregoing, (i) all interior
walls, floors and ceilings, (ii) all windows, doors and skylights, (iii) all
interior electrical wiring, conduits, connectors and fixtures, (iv) all interior
plumbing, pipes, sinks, toilets, faucets and drains, (v) all interior lighting
fixtures, bulbs and lamps, (vi) all heating, ventilating and air conditioning
equipment located within the Leased Premises or located outside the Leased
Premises (e.g.,
rooftop
compressors) and serving the Leased Premises only (other than Common HVAC as
defined in Subarticle B below), and (vii) all entranceways to the Leased
Premises. Tenant, if requested to do so by Landlord, shall hire, at Tenant’s
sole cost and expense, a licensed heating, ventilating and air conditioning
contractor to regularly, and periodically inspect (not less frequently than
every three months) and perform required maintenance on the heating, ventilating
and air conditioning equipment and systems serving the Leased Premises, or
alternatively, Landlord may, at its election, contract in its own name for
such
regular and periodic inspections of and maintenance on such heating, ventilating
and air conditioning equipment and systems and charge to Tenant, as Additional
Rent, the cost thereof. Tenant shall, at its sole cost and expense, repair
all
damage to the Building, the Common Areas or the Project caused by the activities
of Tenant, its employees, invitees or contractors promptly following written
notice from Landlord to so repair such damage. If Tenant shall fail to perform
the required maintenance or fail to make repairs required of it pursuant to
this
Article within a reasonable period of time following notice from Landlord to
do
so, then Landlord may, at its election and without waiving any other remedy
it
may otherwise have under this Lease or at Law, perform such maintenance or
make
such repairs and charge to Tenant, as Additional Rent, the costs so incurred
by
Landlord for same. All glass within or a part of the Leased Premises, both
interior and exterior, is at the sole risk of Tenant and any broken glass shall
promptly be replaced by Tenant at Tenant’s expense with glass of the same kind,
size and quality.
B. Landlord’s
Obligation.
Landlord
shall, at all times during the Lease Term, maintain in good condition and
repair: (i) the exterior and structural parts of the Building (including the
foundation, subflooring, load-bearing and exterior walls, and roof); (ii) the
Common Areas; and (iii) the electrical and plumbing systems located outside
the
Leased Premises which service the Building. Additionally, to the extent that
the
Building contains central heating, ventilating and/or air conditioning systems
located outside the Leased Premises which are designed to service, and are
then
servicing, more than a single tenant within the Building (“Common HVAC”),
Landlord shall maintain in good operating condition and repair such Common
HVAC
equipment and systems. The provisions of this Subarticle B shall in no way
limit
the right of Landlord to charge to tenants of the Project, as Additional Rent
pursuant to Article 3, the costs incurred by Landlord in making such repairs
and/or performing such maintenance.
5.2 Services
and Utilities.
The
parties shall have the following responsibilities and obligations with respect
to obtaining and paying the cost of providing the following utilities and other
services to the Leased Premises.
A. Gas
and Electricity.
Tenant
shall arrange, at its sole cost and expense and in its own name, for the supply
of gas and electricity to the Leased Premises. In the event that such services
are not separately metered, Tenant shall, at its sole expense, cause such meters
to be installed. Tenant shall be responsible for determining if the local
supplier of gas and/or electricity can supply the needs of Tenant and whether
or
not the existing gas and/or electrical distribution systems within the Building
and the Leased Premises are adequate for Tenant’s needs. Tenant shall pay all
charges for gas and electricity as so supplied to the Leased
Premises.
9.
B. Water.
Landlord
shall provide the Leased Premises with water for lavatory and drinking purposes
only. Tenant shall pay, as Additional Rent, the cost to Landlord of providing
water to the Leased Premises. In the event Landlord believes that Tenant is
using more water than what normally would be required for lavatory and drinking
purposes, Landlord at its election may (i) periodically charge Tenant, as
Additional Rent, a sum equal to Landlord’s estimate of the cost of Tenant’s
excess water usage or (ii) install (or require Tenant to install at Tenant’s
sole cost) a separate meter for purposes of measuring Tenant’s water usage and,
based upon such meter readings, periodically charge Tenant, as Additional Rent,
a sum equal to Landlord’s estimate of the cost of Tenant’s excess water usage.
In the event that Landlord shall so install such a separate meter, Tenant shall
pay to Landlord, upon demand, the costs incurred by Landlord in purchasing
and
installing such meter and thereafter all costs incurred by Landlord in
maintaining said meter. The cost of Tenant’s water usage shall include any costs
to Landlord in keeping account of such usage and all governmental fees, public
charges or the like attributable to or based upon (such as sewer usage fees)
the
use of water to the extent of such usage.
C. Security
Service.
Tenant
acknowledges that Landlord is not responsible for the security of the Leased
Premises or the protection of Tenant’s property or Tenant’s employees, invitees
or contractors, and that to the extent Tenant determines that such security
or
protection services are advisable or necessary, Tenant shall arrange for and
pay
the costs of providing same.
D. Trash
Disposal.
Tenant
acknowledges that Landlord is not responsible for the disposal of Tenant’s
waste, garbage or trash and that Tenant shall arrange, in its own name and
at
its sole cost, for the regular and periodic removal of such waste, garbage
or
trash from the Leased Premises. In no event shall Landlord be required to
provide trash bins for the disposal of Tenant’s waste, garbage or
trash.
5.3 Energy
and Resource Consumption.
Landlord
may voluntarily cooperate in a reasonable manner with the efforts of
governmental agencies and/or utility suppliers in reducing energy or other
resource consumption within the Project. Tenant shall not be entitled to
terminate this Lease or to any reduction in or abatement of rent by reason
of
such compliance or cooperation. Tenant agrees at all times to cooperate fully
with Landlord and to abide by all reasonable rules established by Landlord
(i)
in order to maximize the efficient operation of the electrical, heating,
ventilating and air conditioning systems and all other energy or other resource
consumption systems within the Project and/or (ii) in order to comply with
the
requirements and recommendations of utility suppliers and governmental agencies
regulating the consumption of energy and/or other resources.
5.4 Limitation
of Landlord’s Liability.
Landlord
shall not be liable to Tenant for injury to Tenant, its employees, agents,
invitees or contractors, damage to Tenant’s property or loss of Tenant’s
business or profits, nor shall Tenant be entitled to terminate this Lease or
to
any reduction in or abatement of rent by reason of (i) Landlord’s failure
to perform any maintenance or repairs to the Project until Tenant shall have
first notified Landlord, in writing, of the need for such maintenance or
repairs, and then only after Landlord shall have had a reasonable period of
time
following its receipt of such notice within which to perform such maintenance
or
repairs, or (ii) any failure, interruption, rationing or other curtailment
in the supply of water, electric current, gas or other utility service to the
Leased Premises, the Building or the Project from whatever cause (other than
Landlord’s active negligence or willful misconduct), or (iii) the unauthorized
intrusion or entry into the Leased Premises by third parties (other than
Landlord).
ARTICLE
6
Alterations
and Improvements
6.1 By
Tenant.
Tenant
shall not make any alterations to or modifications of the Leased Premises or
construct any improvements to or within the Leased Premises without Landlord’s
prior written approval, and then not until Landlord shall have first approved,
in writing, the plans and specifications therefore, which approval shall not
be
unreasonably withheld. Notwithstanding the foregoing, Tenant shall be permitted
to make alterations following not less than ten (10) business days notice to
Landlord, but without Landlord’s prior approval, to the extent any such
alteration is merely cosmetic in nature (i.e.,
re-painting and re-carpeting) and together with all other such alterations
in
any calendar year costs less than $20,000, and provided
that
such
alteration does not (a) affect the exterior of the Building, (b) affect the
structure of the Building or the systems and equipment of the Building, and/or
(c) interfere with Building services or the use of the Property or the Building
by other tenants or occupants. All such modifications, alterations or
improvements, once so approved, shall be made, constructed or installed by
Tenant at Tenant’s expense, using a licensed contractor first approved by
Landlord, in substantial compliance with the Landlord-approved plans and
specifications therefore. All work undertaken by Tenant shall be done in
accordance with all Laws and in a good and workmanlike manner using new
materials of good quality that match or complement the original improvements
existing as of the Lease Commencement Date. Tenant shall not commence the making
of any such modifications or alterations or the construction of any such
improvements until (i) all required governmental approvals and permits shall
have been obtained, (ii) all requirements regarding insurance imposed by this
Lease have been satisfied, (iii) Tenant shall have given Landlord at least
five
business days prior written notice of its intention to commence such work so
that Landlord may post and file notices of non-responsibility, and (iv) if
requested by Landlord, Tenant shall have obtained contingent liability and
broad
form builder’s risk insurance in an amount satisfactory to Landlord to cover any
perils relating to the proposed work not covered by insurance carried by Tenant
pursuant to Article 9. In no event shall Tenant make any modifications,
alterations or improvements to the Common Areas or any areas outside of the
Leased Premises. As used in this Article, the term “modifications, alterations
and/or improvements” shall include, without limitation, the installation of
additional electrical outlets, overhead lighting fixtures, drains, sinks,
partitions, doorways, or the like. If Landlord reserves the right to require
Tenant to remove any alterations or modifications at the end of the Lease Term,
and the cost of such removal and restoration together with the cost of removal
and restoration of all other alterations and modifications which Landlord may
require Tenant to remove exceeds $25,000.00, then as a condition to granting
its
consent, Landlord may require Tenant to increase the amount of its Security
Deposit hereunder to cover such costs to the extent they exceed $25,000.00.
Tenant shall pay Landlord’s reasonable costs to inspect the construction of
Tenant’s alterations or modifications and to have Landlord’s architect revise
Landlord’s drawings to show the work performed by Tenant.
10.
6.2 Ownership
Of Improvements.
All
modifications, alterations or improvements made or added to the Leased Premises
by Tenant (other than Tenant’s inventory, equipment, movable furniture, wall
decorations and trade fixtures) shall be deemed real property and a part of
the
Leased Premises, but shall remain the property of Tenant during the Lease Term.
Any such modifications, alterations or improvements, once completed, shall
not
be altered or removed from the Leased Premises during the Lease Term without
Landlord’s written approval first obtained in accordance with the provisions of
Article 6.1 above. At the expiration or sooner termination of the Lease, all
such modifications, alterations and improvements (other than Tenant’s inventory,
equipment, movable furniture, wall decorations and trade fixtures) shall
automatically become the property of Landlord and shall be surrendered to
Landlord as a part of the Leased Premise as required pursuant to Article 2,
unless Landlord shall require Tenant to remove any of such modifications,
alterations or improvements in accordance with the provisions of Article 2,
in
which case Tenant shall so remove same. Landlord shall have no obligation to
reimburse to Tenant all or any portion of the cost or value of any such
modifications, alterations or improvements so surrendered to Landlord. All
modifications, alterations or improvements which are installed or constructed
on
or attached to the Leased Premises by Landlord at Landlord’s expense shall be
deemed real property and a part of the Leased Premises and shall be the property
of Landlord. All lighting, plumbing, electrical, heating, ventilating and air
conditioning fixtures, partitioning, window coverings, wall coverings and floor
coverings installed by Tenant shall be deemed improvements to the Leased
Premises and not trade fixtures of Tenant.
6.3 Alterations.
Landlord, at its sole cost and expense and not as a Project Maintenance Cost,
shall be responsible for correcting any violations of applicable laws
(including, without limitation, Title III of the Americans with Disabilities
Act) with respect to the Leased Premises, Building and the Project existing
as
of the Lease Commencement Date. At its sole cost, Tenant shall make all
modifications, alterations and improvements to the Leased Premises that are
required by any Law because of (i) Tenant’s use or occupancy of the Leased
Premises, the Building, the Outside Areas, or the Property, (ii) Tenant’s
application for any permit or governmental approval, or (iii) Tenant’s making of
any modifications, alterations or improvements to or within the Leased Premises.
If Landlord shall, at any time during the Lease Term, (i) be required by any
governmental authority to make any modifications, alterations or improvements
to
the Building or the Project, (ii) modify the existing (or construct additional)
capital improvements or provide building service equipment for the purpose
of
reducing the consumption of utility services or project maintenance costs for
the property, the cost incurred by Landlord in making such modifications,
alterations or improvements shall be considered a Project Maintenance
Cost.
6.4 Liens.
Tenant
shall keep the Leased Premises, the Building and the Property free from any
liens and shall pay when due all bills arising out of any work performed,
materials furnished, or obligations incurred by Tenant, its agents, employees
or
contractors relating to the Leased Premises. If any such claim of lien is
recorded against Tenant’s interest in this Lease, the Leased Premises, the
Building or the Project, Tenant shall bond against, discharge or otherwise
cause
such lien to be entirely released within ten days after the same has been so
recorded.
6.5 Tenant
Improvements By Landlord.
Pursuant
to Exhibit “F” Tenant Improvement Work Letter; Landlord agrees to construct the
tenant improvements as outlined in the mutually agreed upon and approved Tenant
Improvement Plan and Specifications to be prepared by Habitect and to be
attached to this Lease as Exhibit “F-1”. Said tenant improvements shall
include the construction of new private offices, conference rooms, upgraded
lobby, install glass windows in the roll-up door, remodel existing kitchen
with
appliances, install new carpet and VCT where necessary. Any additional cost
related to changes Tenant may make to the tenant improvement plan after said
plan has been approved by Landlord shall be Tenant’s responsibility.
ARTICLE
7
Assignment
and Subletting By Tenant
7.1 By
Tenant.
Tenant
shall not sublet the Leased Premises (or any portion thereof) or assign or
encumber its interest in this Lease, whether voluntarily or by operation of
Law,
without Landlord’s prior written consent first obtained in accordance with the
provisions of this Article 7. Any attempted subletting, assignment or
encumbrance without Landlord’s prior written consent, at Landlord’s election,
shall constitute a default by Tenant under the terms of this Lease. The
acceptance of rent by Landlord from any person or entity other than Tenant,
or
the acceptance of rent by Landlord from Tenant with knowledge of a violation
of
the provisions of this Article, shall not be deemed to be a waiver by Landlord
of any provision of this Article or this Lease or to be a consent to any
subletting by Tenant or any assignment or encumbrance of Tenant’s interest in
this Lease.
7.2 Merger
or Reorganization.
If
Tenant is a corporation, any dissolution, merger, consolidation or other
reorganization of Tenant, or the sale or other transfer in the aggregate over
the Lease Term of a controlling percentage of the capital stock of Tenant,
shall
be deemed a voluntary assignment of Tenant’s interest in this Lease. The phrase
“controlling percentage” means the ownership of and the right to vote stock
possessing more than fifty percent of the total combined voting power of all
classes of Tenant’s capital stock issued, outstanding and entitled to vote for
the election of directors. If Tenant is a partnership, a withdrawal or change,
whether voluntary, involuntary or by operation of Law, of any general partner,
or the dissolution of the partnership, shall be deemed a voluntary assignment
of
Tenant’s interest in this Lease.
11.
7.3 Landlord’s
Election.
If
Tenant or Tenant’s successors shall desire to assign its interest under this
Lease or to sublet the Leased Premises, Tenant and Tenant’s successors must
first notify Landlord, in writing, of its intent to so assign or sublet, at
least thirty days in advance of the date it intends to so assign its interest
in
this Lease or sublet the Leased Premises but not sooner than sixty days in
advance of such date, specifying in detail the terms of such proposed assignment
or subletting, including the name of the proposed assignee or sublessee, the
proposed assignee’s or Sublessee’s intended use of the Leased Premises, a
current financial statement of such proposed assignee or sublessee and the
form
of documents to be used in effectuating such assignment or subletting. Landlord
shall have a period of fifteen days following receipt of such notice and receipt
of all information requested by Landlord regarding the proposed assignee or
sublessee within which to do one of the following: (a) in the case of an
assignment or of a sublease of all or substantially all the Leased Premises
for
all or substantially all the then remaining Lease Term, terminate this Lease,
or
(b) if Landlord shall not have elected to cancel and terminate this Lease,
to
either (i) consent to such requested assignment or subletting subject to
Tenant’s and Tenant’s successors’ compliance with the conditions set forth in
Article 7.4 below or (ii) refuse to so consent to such requested assignment
or
subletting, provided
that
such
consent shall not be unreasonably refused. If Landlord elects to terminate
this
Lease, the Lease shall so terminate in its entirety fifteen (15) days after
Landlord has notified Tenant and Tenant’s successors in writing of such
election. Landlord and Tenant or Tenant’s successors shall execute a
cancellation agreement with respect to the Lease to effect such termination.
It
shall not be unreasonable for Landlord to withhold its consent to any proposed
assignment or subletting if (i) the proposed assignee’s or subtenant’s
anticipated use of the Leased Premises is more intensive than Tenant’s and/or
involves the storage, use or disposal of a Hazardous Material; (ii) if the
proposed assignee or subtenant has been required by any prior landlord, lender
or governmental authority to clean up Hazardous Materials unlawfully discharged
by the proposed assignee or subtenant; or (iii) if the proposed assignee or
subtenant is subject to investigation or enforcement order or proceeding by
any
governmental authority in connection with the use, disposal or storage of a
Hazardous Material. Tenant and Tenant’s successors covenant and agree to supply
to Landlord, upon request, with all necessary or relevant information which
Landlord may reasonably request respecting such proposed assignment or
subletting and/or the proposed assignee or sublessee. Landlord’s review period
shall not commence until Landlord has received all information requested by
Landlord.
7.4 Conditions
to Landlord’s Consent.
If
Landlord elects to consent, or shall have been ordered to so consent by a court
of competent jurisdiction, to such requested assignment, subletting or
encumbrance, such consent shall be expressly conditioned upon the occurrence
of
each of the conditions below set forth, and any purported assignment, subletting
or encumbrance made or ordered prior to the full and complete satisfaction
of
each of the following conditions shall be void and, at the election of Landlord,
which election may be exercised at any time following such a purported
assignment, subletting or encumbrance shall constitute a material default by
Tenant under this Lease giving Landlord the absolute right to terminate this
Lease. The conditions are as follows:
A. Landlord
having approved in form and substance the assignment or sublease agreement
(or
the encumbrance agreement), which approval shall not be unreasonably withheld
by
Landlord if the requirements of this Article 7 are otherwise complied
with.
B. Each
such
assignee having agreed, in writing satisfactory to Landlord and its counsel
and
for the benefit of Landlord, to assume, to be bound by, and to perform the
obligations of this Lease to be performed by Tenant (or, in the case of an
encumbrance, each such encumbrancer having similarly agreed to assume, be bound
by and to perform Tenant’s obligations upon a foreclosure or transfer in lieu
thereof).
C. Tenant
having fully and completely performed all of its obligations under the terms
of
this Lease through and including the date of the requested consent, as well
as
through and including the date such assignment or subletting is to become
effective.
D. Tenant
having reimbursed to Landlord all reasonable costs and attorneys fees incurred
by Landlord in conjunction with the processing and documentation of any such
requested subletting, assignment or encumbrance.
E. Tenant
having delivered to Landlord a complete and fully-executed duplicate original
of
such sublease agreement, assignment agreement or encumbrance (as applicable)
and
all related agreements.
F. Tenant
having paid, or having agreed in writing to pay as to future payments, to
Landlord fifty percent of all assignment consideration or excess rentals to
be
paid to Tenant or to any other on Tenant’s behalf or for Tenant’s benefit for
such assignment or subletting after deduction of broker’s
commissions.
7.5 Intentionally
Deleted.
7.6 Payments.
All
payments required by this Article to be made to Landlord shall be made in cash
in full as and when they become due. At the time Tenant, Tenant’s assignee or
sublessee makes each such payment to Landlord, Tenant or Tenant’s assignee or
sublessee, as the case may be, shall deliver to Landlord an itemized statement
in reasonable detail showing the method by which the amount due Landlord was
calculated and certified by the party making such payment as true and correct.
Landlord may require that fifty (50%) percent of the Excess Rentals and/or
Assignment Consideration, less reasonable subleasing brokerage fee, to be made
hereunder be made directly to Landlord by such Transferee.
7.7 Good
Faith.
The
rights granted to Tenant by this Article are granted in consideration of
Tenant’s express covenant that all pertinent allocations which are made by
Tenant between the rental value of the Leased Premises and the value of any
of
Tenant’s personal property which may be conveyed or leased concurrently with and
which may reasonably be considered a part of the same transaction as the
permitted assignment or subletting shall be made fairly, honestly and in good
faith. If Tenant shall breach this Covenant of Good Faith, Landlord may
immediately declare Tenant to be in default under the terms of this Lease and
terminate this Lease and/or exercise any other rights and remedies Landlord
would have under the terms of this Lease in the case of a material default
by
Tenant under this Lease.
12.
7.8 Effect
of Landlord’s Consent.
No
subletting, assignment or encumbrance, even with the consent of Landlord, shall
relieve Tenant of its personal and primary obligation to pay rent and to perform
all of the obligations to be performed by Tenant hereunder. Consent by Landlord
to one or more assignments or encumbrances of Tenant’s interest in this Lease or
to one or more sublettings of the Leased Premises shall not be deemed to be
a
consent to any subsequent assignment, encumbrance or subletting. If Landlord
shall have been ordered by a court of competent jurisdiction to consent to
a
requested assignment or subletting, or such an assignment or subletting shall
have been ordered over the objection of Landlord, such assignment or subletting
shall not be binding between the assignee (or sublessee) and Landlord until
such
time as all conditions set forth in Article 7.4 above have been fully satisfied
(to the extent not then satisfied) by the assignee or sublessee, including,
without limitation, the payment to Landlord of all agreed assignment
considerations and/or excess rentals then due Landlord.
7.9 Permitted
Transfers.
Notwithstanding the above Tenant shall have the right, without Landlord’s
consent and without triggering Landlord’s recapture or rent sharing rights, (A)
to enter into an occupancy agreement, license, assignment or sublease with:
(i)
a parent corporation or entity; (ii) any subsidiary corporation or entity of
Tenant or Tenant’s parent corporation or entity; (iii) an affiliated entity in
which Tenant, or its subsidiaries or parent corporation or entity holds a
controlling share of the outstanding shares or ownership interest; (iii) any
person or entity that acquires all or substantially all of Tenant’s assets or
all the capital stock or other ownership interest in Tenant; (iv) any entity
with which Tenant merges, regardless of whether Tenant is the surviving entity,
or (v) any person or entity that acquires all or substantially all of the
business or assets operated or located on the Premises; or (B) to cause a sale
or transfer of a controlling interest or all the capital stock or other
ownership interests in Tenant (each such transaction in (A) or (B) above being
referred to herein as a “Permitted Transfer and each such occupant, licensee,
assignee or sublessee being referred to herein as a “Permitted Transferee”);
provided
that
in all
cases the transaction is not a subterfuge intended to avoid Tenant’s obligations
hereunder. If Tenant enters into to a Permitted Transfer, Tenant shall promptly
following the effective date thereof deliver written notice of such transfer
to
Landlord with a copy of the operative documents.
ARTICLE
8
Limitation
on Landlord’s Liability and Indemnity
8.1 Limitation
on Landlord’s Liability and Release.
Landlord
shall not be liable to Tenant for, and Tenant hereby releases Landlord and
its
partners and officers from, any and all liability, whether in contract, tort
or
on any other basis, for any injury to or any damage sustained by Tenant, its
agents, employees, contractors or invitees; any damage to Tenant’s property; or
any loss to Tenant’s business, loss of Tenant’s profits or other financial loss
of Tenant resulting from or attributable to the condition of, the management
of,
the maintenance of, or the protection of the Leased Premises, the Building,
the
Project or the Common Areas, including, without limitation, any such injury,
damage or loss resulting from (i) the failure, interruption, rationing or other
curtailment or cessation in the supply of electricity, water, gas or other
utility service to the Project, the Building or the Leased Premises; (ii) the
vandalism or forcible entry into the Building or the Leased Premises; (iii)
the
penetration of water into or onto any portion of the Leased Premises through
roof leaks or otherwise; (iv) the failure to provide security and/or adequate
lighting in or about the Project, the Building or the Leased Premises; (v)
the
existence of any design or construction defects within the Project, the Building
or the Leased Premises; (vi) the failure of any mechanical systems to function
properly (such as the HVAC systems); or (vii) the blockage of access to any
portion of the Project, the Building or the Leased Premises, except in any
matter covered by subsections 8.1(i) through (vii) above to the extent such
damage was proximately caused by Landlord’s active negligence or willful
misconduct, or Landlord’s failure to perform an obligation expressly undertaken
pursuant to this Lease but only if Tenant shall have given Landlord prior
written notice to perform such obligation and Landlord shall have failed to
perform such obligation within a reasonable period of time following receipt
of
written notice from Tenant to so perform such obligation. In this regard, Tenant
acknowledges that it is fully apprised of the provisions of Law relating to
releases, and particularly to those provisions contained in Section 1542 of
the
California Civil Code which read as follows: A general release does not extend
to claims which the creditor does not know or suspect to exist in his favor
at
the time of executing the release, which if known by him must have materially
affected his settlement with the debtor. Notwithstanding such statutory
provision, and for the purpose of implementing a full and complete release
and
discharge, Tenant hereby (i) waives the benefit of such statutory provision
and
(ii) acknowledges that, subject to the exceptions specifically set forth herein,
the release and discharge set forth in this Article is a full and complete
settlement and release and discharge of all claims and is intended to include
in
its effect, without limitation, all claims which Tenant, as of the date hereof,
does not know of or suspect to exist in its favor.
8.2 Tenant’s
Indemnification of Landlord.
Tenant
shall defend, with competent counsel satisfactory to Landlord, any claims made
or legal actions filed or threatened by third parties against Landlord which
result in the death, bodily injury, personal injury, damage to property or
interference with contractual or other rights suffered by any third party
(including other tenants within the Project) which (i) occurred within the
Leased Premises or (ii) resulted from Tenant’s use or occupancy of the
Leased Premises or the Common Areas or (iii) resulted from Tenant’s activities
in or about the Leased Premises, the Building or the Project, and Tenant shall
indemnify and hold Landlord, Landlord’s principals, employees and agents
harmless from any loss (including loss of rents by reason of vacant space which
otherwise would have been leased but for such activities), liabilities,
penalties, or expense whatsoever (including all legal fees incurred by Landlord
with respect to defending such claims) resulting therefrom, except in any event
to the extent proximately caused by the active negligence or willful misconduct
of Landlord or Landlord’s failure to perform an obligation expressly undertaken
pursuant to this Lease but only if Tenant shall have given Landlord prior
written notice to perform such obligation and Landlord shall have failed to
perform such obligation within a reasonable period of time following receipt
of
written notice from Tenant to so perform such obligation. This indemnity
agreement shall survive the expiration or sooner termination of this Lease,
provided
that
Tenant
shall not be required to indemnify Landlord under this section 8.2 with respect
to events that first occur after the later of (a) the date of the expiration,
or
sooner termination, of this Lease, or (b) the date Tenant actually vacates
the
Premises, provided
that
Landlord
has actual notice of such vacation.
13.
ARTICLE
9
Insurance
9.1 Tenant’s
Insurance.
Tenant
shall maintain insurance complying with all of the following:
A. Tenant
shall procure, pay for and keep in full force and effect, at all times during
the Lease Term, the following:
(1) Commercial
General Liability insurance insuring Tenant against liability for bodily injury,
death, property damage and personal injury occurring at the Leased Premises,
or
resulting from Tenant’s use or occupancy of the Leased Premises or the Building,
Outside Areas, Property, or Common Areas or resulting from Tenant’s activities
in or about the Leased Premises. Such insurance shall be on an occurrence basis
with a combined single limit of liability of not less than the amount of
Tenant’s Required Liability Coverage (as set forth in Article 1). The
policy or policies shall be endorsed to name Landlord and such others as are
designated by Landlord as additional insureds in the form equivalent to
CG20111185 or successor and shall contain the following additional endorsement:
“The insurance afforded to the additional insureds is primary insurance. If
the
additional insureds have other insurance which is applicable to the loss on
a
contributing, excess or contingent basis, the amount of this insurance company’s
liability under this policy shall not be reduced by the existence of such other
insurance. Any insurance carried by the additional insureds shall be excess
and
non contributing with the insurance provided by the Tenant.” The policy shall
not be canceled or reduced without at least 10 days written notice to additional
insureds. If the policy insures more than one location, it shall be endorsed
to
show that the limits and aggregate apply per location using endorsement
CG25041185 or successor. Tenant’s policy shall also contain the severability of
interest and cross-liability endorsement or clauses.
(2) Fire
and
property damage insurance in so-called Special Form (except earthquake and
flood) insuring Tenant against loss from physical damage to Tenant’s personal
property, inventory, stock, trade fixtures and improvements within the Leased
Premises with coverage for the full actual replacement cost
thereof;
(3) Plate-glass
insurance, at actual replacement cost;
(4) Boiler
and Machinery insurance, if applicable;
(5) Product
Liability insurance (including without limitation Liquor Liability insurance
for
liability arising out of the distribution, sale, or consumption of food and/or
beverages including alcoholic beverages at the Leased Premises for not less
than
the Tenant’s Required Liability Coverage as set forth in Article 1;
(6) Workers’
compensation insurance and any other employee benefit insurance sufficient
to
comply with all Laws which policy shall be endorsed to provide thirty (30)
days
written notice of cancellation to Landlord;
(7) With
respect to making of alterations or the construction of improvements or the
like
undertaken by Tenant, contingent liability and builder’s risk insurance, in an
amount and with coverage satisfactory to Landlord;
(8) Business
Income Insurance at a minimum of 50% co-insurance including coverage for loss
of
business income due to damage to equipment from perils covered under the
so-called Special Form excepting perils of earth quake and flood;
and
(9) Comprehensive
Auto Liability insurance with a combined single limit coverage of not less
than
the amount of Tenant’s Required Liability Coverage (as set forth in Article l)
for bodily injury and/or property damage liability for: (a) Owned autos, (b)
Hired or borrowed autos, and (c) Non-owned autos. The policy shall be endorsed
to provide 10 days written notice of cancellation to Landlord.
B. Each
policy of liability insurance required to be carried by Tenant pursuant to
this
Article or actually carried by Tenant with respect to the Leased Premises or
the
Property (i) shall be in a form satisfactory to Landlord, (ii) Shall be provided
by carriers admitted to do business in the state of California, with a Best
rating of “A/VI” or better and/or acceptable to Landlord. Property insurance
shall contain a waiver and/or a permission to waive by the insurer any right
of
subrogation against Landlord, its principals, employees, agents and contractors
which might arise by reason of any payment under such policy or by reason of
any
act or omission of Landlord, its principals, employees, agents or
contractors.
C. Prior
to
the time Tenant or any of its contractors enters the Leased Premises, Tenant
shall deliver to the Landlord with respect to each policy of insurance required
to be carried by Tenant pursuant to this Article, a certificate of the insurer
certifying, in a form satisfactory to the Landlord, that the policy has been
issued and premium paid providing the coverage required by this Article and
containing the provisions herein. Attached to such a certificate shall be
endorsements naming Landlord as additional insured, and including the wording
under primary insurance above. With respect to each renewal or replacement
of
any such insurance, the requirements of this Article must be complied with
not
less than 10 days prior to the expiration or cancellation of the policy being
renewed or replaced. Landlord may at any time and from time-to-time inspect
and/or copy any and all insurance policies required to be carried by Tenant
pursuant to this article. If Landlord’s lender, insurance broker or advisor or
counsel reasonably determines at any time that the form or amount of coverage
set forth in Article 9.1.(A) for any policy of insurance Tenant is required
to
carry pursuant to this Article is not adequate, then Tenant shall increase
the
amount of coverage for such insurance to such greater amount or change the
form
as Landlord’s lender, insurance broker or advisor or counsel reasonably deems
adequate (provided,
however,
such
increase level of coverage may not exceed the level of coverage for such
insurance commonly carried by comparable businesses similarly situated and
operating under similar circumstances).
14.
D. The
Commercial General Liability insurance carried by Tenant shall specifically
insure the performance by Tenant of the Indemnification provisions set forth
in
Article 8.2 of this lease; provided,
however,
nothing
contained in this Article 9 shall be construed to limit the liability of Tenant
under the Indemnification provisions set forth in said Article 8.2.
9.2 Landlord’s
Insurance.
With
respect to insurance maintained by Landlord:
A. Landlord
shall maintain, as the minimum coverage required of it by this Lease, property
insurance in so-called “Special” form insuring Landlord (and such others as
Landlord may designate) against loss from physical damage to the Building with
coverage of not less than one hundred percent of the full actual replacement
cost thereof and against loss of rents for a period of not less than twelve
months. Such property damage insurance, at Landlord’s election but without any
requirement on Landlord’s behalf to do so, (i) may be written in so-called
Special Form, excluding only those perils commonly excluded from such coverage
by Landlord’s then property damage insurer; (ii) may provide coverage for
physical damage to the improvements so insured for up to the entire full actual
replacement cost thereof; (iii) may be endorsed to include (or separate policies
which may be carried to cover) loss or damage caused by any additional perils
against which Landlord may elect to insure, including earthquake and/or flood;
(iv) may provide coverage for loss of rents for a period of up to twelve months;
and/or (v) may contain “deductibles” per occurrence in an amount reasonably
acceptable to Landlord. Landlord shall not be required to cause such insurance
to cover any of Tenant’s personal property, inventory and trade fixtures, or any
modifications, alterations or improvements made or constructed by Tenant to
or
within the Leased Premises.
B. Landlord
shall maintain Commercial General Liability insurance insuring Landlord (and
such others as are designated by Landlord) against liability for personal
injury, bodily injury, death, and damage to property occurring in, on or about,
or resulting from the use or occupancy of the Project, or any portion thereof,
with combined single limit coverage of at least Two Million Dollars. Landlord
may carry such greater coverage as Landlord or Landlord’s Lender, insurance
broker or advisor or counsel may from time to time determine is reasonably
necessary for the adequate protection of Landlord and the Project.
C. Landlord
may maintain any other insurance which in the opinion of its lender, insurance
broker or advisor, or legal counsel is prudent to carry under the given
circumstances.
9.3 Mutual
Waiver of Subrogation.
Notwithstanding anything to the contrary set forth in this Lease, Landlord
hereby releases Tenant, and Tenant hereby releases Landlord and its respective
partners and officers, agents, employees and servants, from any and all
liability for loss, damage or injury to the property of the other in or about
the Leased Premises which is caused by or results from a peril or event or
happening which would be covered by insurance required to be carried under
the
terms of this Lease, or is covered by insurance actually carried and in force
at
the time of the loss, by the party sustaining such loss; provided,
however,
that
such waiver shall be effective only to the extent permitted by the insurance
covering such loss and to the extent such insurance is not prejudiced
thereby.
ARTICLE
10
Damage
to Leased Premises
10.1 Landlord’s
Duty to Restore.
If the
Leased Premises are damaged by any peril after the Effective Date of this Lease,
Landlord shall restore the Leased Premises, as and when required by this
Article, unless this Lease is terminated by Landlord pursuant to Article 10.2
or
by Tenant pursuant to Article 10.3. All insurance proceeds available from the
fire and property damage insurance carried by Landlord shall be paid to and
become the property of Landlord. If this Lease is terminated pursuant to either
Article 10.2 or 10.3, all insurance proceeds available from insurance carried
by
Tenant which cover loss to property that is Landlord’s property or would become
Landlord’s property on termination of this Lease shall be paid to and become the
property of Landlord, and the remainder of such proceeds shall be paid to and
become the property of Tenant. If this Lease is not terminated pursuant to
either Article 10.2 or 10.3, all insurance proceeds available from insurance
carried by Tenant which cover loss to property that is Landlord’s property shall
be paid to and become the property of Landlord, and all proceeds available
which
cover loss to property which would become the property of Landlord upon the
termination of this Lease shall be paid to and remain the property of Tenant.
If
this Lease is not so terminated, then upon receipt of the insurance proceeds
(if
the loss is covered by insurance) and the issuance of all necessary governmental
permits, Landlord shall commence and diligently prosecute to completion the
restoration of the Leased Premises, to the extent then allowed by Law, to
substantially the same condition in which the Leased Premises existed as of
the
Lease Commencement Date. Landlord’s obligation to restore shall be limited to
the Leased Premises and interior improvements constructed by Landlord. Landlord
shall have no obligation to restore any other improvements to the Leased
Premises or any of Tenant’s personal property, inventory or trade fixtures. Upon
completion of the restoration by Landlord, Tenant shall forthwith replace or
fully repair all of Tenant’s trade fixtures and other improvements constructed
by Tenant to like or similar condition as existed at the time of such damage
or
destruction.
15.
10.2 Landlord’s
Right to Terminate.
Landlord
shall have the option to terminate this Lease in the event any of the following
occurs, which option may be exercised only by delivery to Tenant of a written
notice of election to terminate within thirty days after the date of such damage
or destruction:
A. The
Building is damaged by any peril covered by valid and collectible insurance
actually carried by Landlord and in force at the time of such damage or
destruction (an “insured peril”) to such an extent that the estimated cost to
restore the Building exceeds the lesser of (i) the insurance proceeds available
from insurance actually carried by Landlord, or (ii) seventy-five percent of
the
then actual replacement cost thereof;
B. The
Building is damaged by an uninsured peril, which peril Landlord was required
to
insure against pursuant to the provisions of Article 9 of this Lease, to such
an
extent that the estimated cost to restore the Building exceeds the lesser of
(i)
the insurance proceeds which would have been available had Landlord carried
such
required insurance, or (ii) seventy-five percent of the then actual replacement
cost thereof;
C. The
Building is damaged by an uninsured peril, which peril Landlord was not required
to insure against pursuant to the provisions of Article 9 of this Lease, to
any
extent.
D. The
Building is damaged by any peril and, because of the Laws then in force, the
Building (i) can not be restored at reasonable cost or (ii) if restored, can
not
be used for the same use being made thereof before such damage.
10.3 Tenant’s
Right to Terminate.
If the
Leased Premises are damaged by any peril and Landlord does not elect to
terminate this Lease or is not entitled to terminate this Lease pursuant to
this
Article, then as soon as reasonably practicable, Landlord shall furnish Tenant
with the written opinion of Landlord’s architect or construction consultant as
to when the restoration work required of Landlord may be complete. Tenant shall
have the option to terminate this Lease in the event any of the following
occurs, which option may be exercised in the case of A or B below only by
delivery to Landlord of a written notice of election to terminate within fifteen
days after Tenant receives from Landlord the estimate of the time needed to
complete such restoration:
A. The
Leased Premises are damaged by any peril and, in the reasonable opinion of
Landlord’s architect or construction consultant, the restoration of the Leased
Premises cannot be substantially completed within ninety (90) days after the
date of such notice from Landlord; or
B. The
Leased Premises are damaged by any peril within nine months of the last day
of
the Lease Term and, in the reasonable opinion of Landlord’s architect or
construction consultant, the restoration of the Leased Premises cannot be
substantially completed within sixty days after the date such restoration is
commenced.
10.4 Tenant’s
Waiver.
Landlord
and Tenant agree that the provisions of Article 10.3 above, captioned “Tenant’s
Right to Terminate”, are intended to supersede and replace the provisions
contained in California Civil Code, Section 1932, Subdivision 2, and California
Civil Code, Section 1934, and accordingly, Tenant hereby waives the provisions
of said Civil Code Sections and the provisions of any successor Code Sections
or
similar Laws hereinafter enacted.
10.5 Abatement
of Rent.
In the
event of damage to the Leased Premises which does not result in the termination
of this Lease, the Base Monthly Rent (and any Additional Rent) shall be
temporarily abated during the period of restoration in proportion to the degree
to which Tenant’s use of the Leased Premises is impaired by such damage and
repair.
ARTICLE
11
Condemnation
11.1 Landlord’s
Right To Terminate.
Subject
to Article 11.3, Landlord shall have the option to terminate this Lease if,
as a
result of a taking by means of the exercise of the power of eminent domain
(including inverse condemnation and/or a voluntary sale or transfer by Landlord
under threat of condemnation to an entity having the power of eminent domain),
(i) all or any part of the Leased Premises is so taken, (ii) more than
thirty-three and one-third percent of the Buildings leasable area is so taken,
(iii) more than thirty-three and one-third percent of the Common Area is so
taken, or (iv) because of the Laws then in force, the Leased Premises may not
be
used for the same use being made thereof before such taking, whether or not
restored as required by Article 11.4 below. Any such option to terminate by
Landlord must be exercisable within a reasonable period of time, to be effective
as of the date possession is taken by the condemnor.
11.2 Tenant’s
Right to Terminate.
Subject
to Article 11.3, Tenant shall have the option to terminate this Lease if, as
a
result of any taking by means of the exercise of the power of eminent domain
(including inverse condemnation and/or a voluntary sale or transfer by Landlord
to an entity having the power of eminent domain under threat of condemnation),
(i) all of the Leased Premises is so taken, (ii) thirty-three and
one-third percent or more of the Leased Premises is so taken and the part of
the
Leased Premises that remains cannot, within a reasonable period of time, be
made
reasonably suitable for the continued operation of the Tenant’s business, or
(iii) there is a taking of a portion of the Common Area and, as a result of
such taking, Landlord cannot provide parking spaces within the Project (or
within a reasonable distance therefrom) equal in number to at least sixty-six
and two-thirds percent of Tenant’s Number of Parking Spaces (as set forth in
Article 1), whether by rearrangement of the remaining parking areas in the
Common Area (including, if Landlord elects, construction of multi-dock parking
structures or restriping for compact cars where permitted by Law), or by
providing alternative parking facilities on other land within reasonable walking
distance of the Leased Premises. Tenant must exercise such option within a
reasonable period of time, to be effective on the later to occur of (i) the
date
that possession of that portion of the Common Area or the Leased Premises that
is condemned is taken by the condemnor or (ii) the date Tenant vacates the
Leased Premises.
16.
11.3 Temporary
Taking.
If any
portion of the Leased Premises is temporarily taken for one year or less, this
Lease shall remain in effect. If any portion of the Leased Premises is
temporarily taken for a period which either exceeds one year or which extends
beyond the natural expiration of the Lease Term, then Landlord and Tenant shall
each independently have the option to terminate this Lease, effective on the
date possession is taken by the condemnor.
11.4 Restoration
and Abatement of Rent.
If any
part of the Leased Premises is taken by condemnation and this Lease is not
terminated, then Landlord shall repair any damage occasioned thereby to the
remainder of the Leased Premises to a condition reasonably suitable for Tenant’s
continued operations and otherwise, to the extent practicable, in the manner
and
to the extent provided in Article 10.1. As of the date possession is taken
by
the condemning authority, (i) the Base Monthly Rent shall be reduced in the
same
proportion that the area of that part of the Leased Premises so taken (less
any
addition to the area of the Leased Premises by reason of any reconstruction)
bears to the area of the Leased Premises immediately prior to such taking,
and
(ii) Tenant’s Proportionate Share shall be appropriately adjusted.
11.5 Division
of Condemnation Award.
Any
award made for any condemnation of the Project, the Building, the Common Areas
or the Leased Premises, or any portion thereof, shall belong to and be paid
to
Landlord, and Tenant hereby assigns to Landlord all of its right, title and
interest in any such award; provided,
however,
that
Tenant shall be entitled to receive any condemnation award that is made directly
to Tenant (i) for the taking of personal property, inventory or trade fixtures
belonging to Tenant, (ii) for the interruption of Tenant’s business or its
moving costs, (iii) for loss of Tenant’s goodwill, or (iv) for any temporary
taking where this Lease is not terminated as a result of such taking. The rights
of Landlord and Tenant regarding any condemnation shall be determined as
provided in this Article, and each party hereby waives the provisions of Section
1265.130 of the California Code of Civil Procedure, and the provisions of any
similar law hereinafter enacted, allowing either party to petition the Superior
Court to terminate this Lease and/or allocating condemnation awards between
Landlord and Tenant in the event of a taking of the Leased
Premises.
ARTICLE
12
Default
and Remedies
12.1 Events
of Tenant’s Default.
Tenant
shall be in default of its obligations under this Lease if any of the following
events occur:
A. Tenant
shall have failed to pay Base Monthly Rent or any Additional Rent when due
and
such failure continues for more than five (5) days after written notice of
delinquency from Landlord; or
B. Tenant
shall have failed to perform any term, covenant or condition of this Lease,
except those requiring the payment of Base Monthly Rent or Additional Rent,
within 30 days after written notice from Landlord to Tenant specifying the
nature of such failure and requesting Tenant to perform same; provided,
however,
that in
the event such act, use, thing or failure and the consequences thereof are
curable but completing such cure is not reasonable within said thirty (30)
day
period, then Tenant shall have a reasonable time to cure such default provided
Tenant commences such cure within such thirty (30) days and diligently
prosecutes such cure to completion; or
C. Tenant
shall have sublet the Leased Premises or assigned or encumbered its interest
in
this Lease in violation of the provisions contained in Article 7, whether
voluntarily or by operation of Law; or
D. Tenant
or
any Guarantor of this Lease shall have permitted or suffered the sequestration
or attachment of, or execution on, or the appointment of a custodian or receiver
with respect to, all or any substantial part of the property or assets of Tenant
(or such Guarantor) or any property or asset essential to the conduct of
Tenant’s (or such Guarantor’s) business, and Tenant (or such Guarantor) shall
have failed to obtain a return or release of the same within thirty days
thereafter, or prior to sale pursuant to such sequestration, attachment or
levy,
whichever is earlier; or
E. Tenant
or
any Guarantor of this Lease shall have made a general assignment of all or
a
substantial part of its assets for the benefit of its creditors; or
F. Tenant
or
any Guarantor of this Lease shall have allowed (or sought) to have entered
against it a decree or order which: (i) grants or constitutes an order for
relief, appointment of a trustee, or confirmation of a reorganization plan
under
the bankruptcy laws of the United States; (ii) approves as properly filed a
petition seeking liquidation or reorganization under said bankruptcy laws or
any
other debtor’s relief law or similar statute of the United States or any state
thereof; or (iii) otherwise directs the winding up or liquidation of Tenant;
provided,
however,
if any
decree or order was entered without Tenant’s consent or over Tenant’s objection,
Landlord may not terminate this Lease pursuant to this Subarticle if such decree
or order is rescinded or reversed within sixty days after its original
entry.
G. Tenant
or
any Guarantor of this Lease shall have availed itself of the protection of
any
debtor’s relief law, moratorium law or other similar Law which does not require
the prior entry of a decree of order.
17.
12.2 Landlord’s
Remedies.
In the
event of any default by Tenant, and without limiting Landlord’s right to
indemnification as provided in Article 8.2, Landlord shall have the following
remedies, in addition to all other rights and remedies provided by Law or
otherwise provided in this Lease, to which Landlord may resort cumulatively,
or
in the alternative:
A. Landlord
may, at Landlord’s election, keep this Lease in effect and enforce, by an action
at law or in equity all of its rights and remedies under this Lease including,
without limitation, (i) the right to recover the rent and other sums as they
become due by appropriate legal action, (ii) the right to make payments required
of Tenant, or perform Tenant’s obligations and be reimbursed by Tenant for the
cost thereof with interest at the then maximum rate of interest not prohibited
by Law from the date the sum is paid by Landlord until Landlord is reimbursed
by
Tenant, and (iii) the remedies of injunctive relief and specific performance
to
prevent Tenant from violating the terms of this Lease and/or to compel Tenant
to
perform its obligations under this Lease, as the case may be.
B. Landlord
may, at Landlord’s election, terminate this Lease by giving Tenant written
notice of termination, in which event this Lease shall terminate on the date
set
forth for termination in such notice. Any termination under this Subarticle
shall not relieve Tenant from its obligation to pay to Landlord all Base Monthly
Rent and Additional Rent then or thereafter due, or any other sums due or
thereafter accruing to Landlord, or from any claim against Tenant for damages
previously accrued or then or thereafter accruing. In no event shall any one
or
more of the following actions by Landlord, in the absence of a written election
by Landlord to terminate this Lease, constitute a termination of this
Lease:
(1) Appointment
of a receiver or keeper in order to protect Landlord’s interest
hereunder;
(2) Consent
to any subletting of the Leased Premises or assignment of this Lease by Tenant,
whether pursuant to the provisions hereof or otherwise; or
(3) Any
other
action by Landlord or Landlord’s agents intended to mitigate the adverse effects
of any breach of this Lease by Tenant, including, without limitation, any action
taken to maintain and preserve the Leased Premises or any action taken to relet
the Leased Premises, or any portion thereof, for the account of Tenant and
in
the name of Tenant.
C. In
the
event Tenant breaches this Lease and abandons the Leased Premises, Landlord
may
terminate this Lease, but this Lease shall not terminate unless Landlord gives
Tenant written notice of termination. No act by or on behalf of Landlord
intended to mitigate the adverse effect of such breach, including those
described by Subarticles B(l), (2) and (3) immediately preceding, shall
constitute a termination of Tenant’s right to possession unless Landlord gives
Tenant written notice of termination. If Landlord does not terminate this Lease
by giving written notice of termination, Landlord may enforce all its rights
and
remedies under this Lease, including the right to recover rent as it becomes
due
under this Lease as provided in California Civil Code Section 1951.4, as in
effect on the Effective Date of this Lease.
D. In
the
event Landlord terminates this Lease, Landlord shall be entitled, at Landlord’s
election, to damages in an amount as set forth in California Civil Code Section
1951.2, as in effect on the Effective Date of this Lease. For purposes of
computing damages pursuant to said Section 1951.2, an interest rate equal to
the
maximum rate of interest then not prohibited by Law shall be used where
permitted. Such damages shall include, without limitation:
(1) The
worth
at the time of award of the amount by which the unpaid rent for the balance
of
the term after the time of award exceeds the amount of such rental loss that
Tenant proves could be reasonably avoided, 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; and
(2) Any
other
amount necessary to compensate Landlord for all detriment proximately caused
by
Tenant’s failure to perform Tenant’s obligations under this Lease, or which in
the ordinary course of things would be likely to result therefrom, including,
without limitation, the following: (i) expenses for cleaning, repairing or
restoring the Leased Premises; (ii) expenses for altering, remodeling or
otherwise improving the Leased Premises for the purpose of reletting, including
removal of existing leasehold improvements and/or installation of additional
leasehold improvements (regardless of how the same is funded, including
reduction of rent, a direct payment or allowance to a new tenant, or otherwise);
(iii) broker’s fees, advertising costs and other expenses of reletting the
Leased Premises; (iv) costs of carrying the Leased Premises, which costs would
have been billed to Tenant as Additional Rent had Tenant not defaulted and
which
include, but are not limited to; taxes, insurance premiums, landscape
maintenance, HVAC maintenance, utility charges and security precautions; (v)
expenses incurred in removing, disposing of and/or storing any of Tenant’s
personal property, inventory or trade fixtures remaining therein; (vi)
attorneys’ fees, expert witness fees, court costs and other reasonable expenses
incurred by Landlord (but not limited to taxable costs) in retaking possession
of the Leased Premises, establishing damages hereunder, and re-leasing the
Leased Premises; and (vii) any other expenses, costs or damages otherwise
incurred or suffered as a result of Tenant’s default.
12.3 Landlord’s
Default and Tenant’s Remedies.
In the
event Landlord fails to perform any of its obligations under this Lease,
Landlord shall nevertheless not be in default under the terms of this Lease
until such time as Tenant shall have first given Landlord written notice
specifying the nature of such failure to perform its obligations, and then
only
after Landlord shall have had a reasonable period of time following its receipt
of such notice within which to perform such obligations. In the event of
Landlord’s default as above set forth, then, and only then, Tenant shall have
the following remedies only:
18.
A. Tenant
may then proceed in equity or at law to compel Landlord to perform its
obligations and/or to recover damages proximately caused by such failure to
perform (except as and to the extent Tenant has waived its right to damages
as
provided in this Lease).
B. Tenant,
at its option, may then cure any default of Landlord at Landlord’s cost. If,
pursuant to this Subarticle, Tenant reasonably pays any sum to any third party
or does any act that requires the payment of any sum to any third party at
any
time by reason of Landlord’s default, the sum paid by Tenant shall be
immediately due from Landlord to Tenant at the time Tenant supplies Landlord
with an invoice therefore (provided such invoice sets forth and is accompanied
by a written statement of Tenant setting forth in reasonable detail the amount
paid, the party to whom it was paid, the date it was paid, and the reasons
giving rise to such payment), together with interest at twelve percent per
annum
from the date of such invoice until Tenant is reimbursed by Landlord. Tenant
may
not offset such sums against any installment of rent due Landlord under the
terms of this Lease.
12.4 Limitation
on Tenant’s Recourse.
If
Landlord is a corporation, trust, partnership, joint venture, unincorporated
association, or other form of business entity, Tenant agrees that (i) the
obligations of Landlord under this Lease shall not constitute personal
obligations of the officers, directors, trustees, partners, joint venturers,
members, owners, stockholders, or other principals of such business entity
and
(ii) Tenant shall have recourse only to Landlord’s then equity interest, if any,
in the Property, rental income, sales and financing proceeds, and insurance
proceeds for the satisfaction of such obligations and not against the assets
of
such officers, directors, trustees, partners, joint venturers, members, owners,
stockholders or principals (other than to the extent of their interest in the
Property). Tenant shall look exclusively to such interests of Landlord, if
any,
in the Property for payment and discharge of any obligations imposed upon
Landlord hereunder, and Landlord is hereby released and relieved of any other
obligations hereunder. Additionally, if Landlord is a partnership, then Tenant
covenants and agrees:
A. No
partner of Landlord shall be sued or named as a party in any suit or action
brought by Tenant with respect to any alleged breach of this Lease (except
to
the extent necessary to secure jurisdiction over the partnership and then only
for that sole purpose);
B. No
service of process shall be made against any partner of Landlord except for
the
sole purpose of securing jurisdiction over the partnership; and
C. No
writ
of execution shall be levied against the assets of any partner of Landlord
other
than to the extent of his interest in Property.
Tenant
further agrees that each of the foregoing covenants and agreements shall be
enforceable by Landlord and by any partner of Landlord and shall be applicable
to any actual or alleged misrepresentation or non-disclosure made respecting
this Lease or the Leased Premises or any actual or alleged failure, default
or
breach of any covenant or agreement either expressly or implicitly contained
in
this Lease or imposed by statute or at common law.
12.5 Tenant’s
Waiver.
Landlord
and Tenant agree that the provisions of Article 12.3 above are intended to
supersede and replace the provisions of California Civil Code 1932(l), 1941
and
1942, and accordingly, Tenant hereby waives the provisions of Section 1932(l),
1941 and 1942 of the California Civil Code and/or any similar or successor
Law
regarding Tenant’s right to terminate this Lease or to make repairs and deduct
the expenses of such repairs from the rent due under this Lease. Tenant hereby
waives any right of redemption or relief from forfeiture under the Laws of
the
State of California, or under any other present or future Law, in the event
Tenant is evicted or Landlord takes possession of the Leased Premises by reason
of any default by Tenant.
ARTICLE
13
General
Provisions
13.1 Taxes
on Tenant’s Property.
Tenant
shall pay before delinquency any and all taxes, assessments, license fees,
use
fees, permit fees and public charges of whatever nature or description levied,
assessed or imposed against Tenant or Landlord by a governmental agency arising
out of, caused by reason of or based upon Tenant’s estate in this Lease,
Tenant’s ownership of property, improvements made by Tenant to the Leased
Premises, improvements made by Landlord for Tenant’s use within the Leased
Premises, Tenant’s use (or estimated use) of public facilities or services or
Tenant’s consumption (or estimated consumption) of public utilities, energy,
water or other resources. On demand by Landlord, Tenant shall furnish Landlord
with satisfactory evidence of these payments. If any such taxes, assessments,
fees or public charges are levied against Landlord, Landlord’s property, the
Building or the Project, or if the assessed value of the Building or the Project
is increased by the inclusion therein of a value placed upon same, then
Landlord, after giving written notice to Tenant, shall have the right,
regardless of the validity thereof, to pay such taxes, assessment, fee or public
charge and xxxx Tenant, as Additional Rent, the amount of such taxes,
assessment, fee or public charge so paid on Tenant’s behalf. Tenant shall,
within ten days from the date it receives an invoice from Landlord setting
forth
the amount of such taxes, assessment, fee or public charge so levied, pay to
Landlord, as Additional Rent, the amount set forth in said invoice. Failure
by
Tenant to pay the amount so invoiced within said ten day period shall be
conclusively deemed a default by Tenant under this Lease. Tenant shall have
the
right, and with Landlord’s full cooperation if Tenant is not then in default
under the terms of this Lease, to bring suit in any court of competent
jurisdiction to recover from the taxing authority the amount of any such taxes,
assessment, fee or public charge so paid.
13.2 Holding
Over.
This
Lease shall terminate without further notice on the Lease Expiration Date (as
set forth in Article 1). Any holding over by Tenant after expiration of the
Lease Term shall neither constitute a renewal nor extension of this Lease nor
give Tenant any rights in or to the Leased Premises except as expressly provided
in this Article. Any such holding over shall be deemed an unlawful detainer
of
the Leased Premises unless Landlord has consented to same. Any such holding
over
to which Landlord has consented shall be construed to be a tenancy from month
to
month, on the same terms and conditions herein specified insofar as applicable,
except that the Base Monthly Rent shall be increased to an amount equal to
one
hundred fifty percent of the Base Monthly Rent payable during the last full
month immediately preceding such holding over.
19.
13.3 Subordination
to Mortgages.
This
Lease is subject and subordinate to all underlying ground leases and to all
mortgages and deeds of trust which affect the Building and are of public record
as of the Effective Date of this Lease, and to all renewals, modifications,
consolidations, replacements and extensions thereof. However, if the lessor
under any such ground lease or any Lender holding any such mortgage or deed
of
trust shall advise Landlord that it desires or requires this Lease to be made
prior and superior thereto, then, upon written request of Landlord to Tenant,
Tenant shall promptly execute, acknowledge and deliver any and all documents
or
instruments which Landlord and such lessor or Lender deem necessary or desirable
to make this Lease prior thereto. Tenant hereby consents to Landlord’s ground
leasing the land underlying the Building and/or encumbering the Building as
security for future loans on such terms as Landlord shall desire, all of which
future ground leases, mortgages or deeds of trust shall be subject and
subordinate to this Lease. However, if any lessor under any such future ground
lease or any Lender holding such future mortgage or deed of trust shall desire
or require that this Lease be made subject and subordinate to such future ground
lease, mortgage or deed of trust, then Tenant agrees, within ten days after
Landlord’s written request therefore, to execute, acknowledge and deliver to
Landlord any and all documents or instruments requested by Landlord or such
lessor or Lender as may be necessary or proper to assure the subordination
of
this Lease to such future ground lease, mortgage or deed of trust; but only
if
such lessor or Lender agrees to recognize Tenant’s rights under this Lease and
not to disturb Tenant’s quiet possession of the Leased Premises so long as
Tenant is not in default under this Lease.
13.4 Tenant’s
Attornment Upon Foreclosure.
Tenant
shall, upon request, attorn (i) to any purchaser of the Building at any
foreclosure sale or private sale conducted pursuant to any security instrument
encumbering the Building, (ii) to any grantee or transferee designated in any
deed given in lieu of foreclosure of any security interest encumbering the
Building, or (iii) to the lessor under any underlying ground lease of the land
underlying the Building, should such ground lease be terminated; provided
that
such
purchaser, grantee or lessor recognizes Tenant’s rights under this
Lease.
13.5 Mortgagee
Protection.
In the
event of any default on the part of Landlord, Tenant will give notice by
registered mail to any Lender or lessor under any underlying ground lease who
shall have requested, in writing, to Tenant that it be provided with such
notice, and Tenant shall offer such Lender or lessor a reasonable opportunity
to
cure the default, including time to obtain possession of the Leased Premises
by
power of sale or judicial foreclosure or other appropriate legal proceedings
if
reasonably necessary to effect a cure.
13.6 Estoppel
Certificates.
Tenant
will, following any request by Landlord, promptly execute and deliver to
Landlord an estoppel certificate (i) certifying that this Lease is unmodified
and in full force and effect, or, if modified, stating the nature of such
modification and certifying that this Lease, as so modified, is in full force
and effect, (ii) stating the date to which the rent and other charges are paid
in advance, if any, (iii) acknowledging that there are not, to Tenant’s
knowledge, any uncured defaults on the part of Landlord hereunder, or specifying
such defaults if any are claimed, and (iv) certifying such other information
about this Lease as may be reasonably requested by Landlord. Tenant’s failure to
execute and deliver such estoppel certificate within ten days after Landlord’s
request therefore shall be a material default by Tenant under this Lease, and
Landlord shall have all of the rights and remedies available to Landlord as
Landlord would otherwise have in the case of any other material default by
Tenant, including the right to terminate this Lease and xxx for damages
proximately caused thereby, it being agreed and understood by Tenant that
Tenant’s failure to so deliver such estoppel certificate in a timely manner
could result in Landlord being unable to perform committed obligations to other
third parties which were made by Landlord in reliance upon this covenant of
Tenant. Landlord and Tenant intend that any statement delivered pursuant to
this
Article may be relied upon by any Lender or purchaser or prospective Lender
or
purchaser of the Building, the Project, or any interest therein.
13.7 Tenant’s
Financial Information.
Tenant
shall, within ten business days after Landlord’s request therefore, deliver to
Landlord a copy of a current financial statement, including an income statement
and balance sheet, and any such other information reasonably requested by
Landlord regarding Tenant’s financial condition. Tenant acknowledges that
Landlord has and will rely on the truth and accuracy of the information provided
by Tenant to Landlord both prior to and during the term of the Lease. Landlord
shall be entitled to disclose such financial statements or other information
to
its Lender, to any present or prospective principal of or investor in Landlord,
or to any prospective Lender or purchaser of the Building, the Project or any
portion thereof or interest therein. Any such financial statement or other
information which is marked “confidential” or “company secrets” (or is otherwise
similarly marked by Tenant) shall be confidential and shall not be disclosed
by
Landlord to any third party except as specifically provided in this Article,
unless the same becomes a part of the public domain without the fault of
Landlord.
13.8 Transfer
By Landlord.
Landlord
and its successors in interest shall have the right to transfer their interest
in the Building, the Project, or any portion thereof at any time and to any
person or entity. In the event of any such transfer, the Landlord originally
named herein (and in the case of any subsequent transfer, the transferor),
from
the date of such transfer, (i) shall be automatically relieved, without any
further act by any person or entity, of all liability for the performance of
the
obligations of the Landlord hereunder which may accrue after the date of such
transfer and (ii) shall be relieved of all liability for the performance of
the
obligations of the Landlord hereunder which have accrued before the date of
transfer if its transferee agrees to assume and perform all such prior
obligations of the Landlord hereunder. Tenant shall attorn to any such
transferee. After the date of any such transfer, the term “Landlord” as used
herein shall mean the transferee of such interest in the Building or the
Project.
20.
13.9 Force
Majeure.
The
obligations of each of the parties under this Lease (other than the obligation
to pay money) shall be temporarily excused if such party is prevented or delayed
in performing such obligation by reason of any strikes, lockouts or labor
disputes; inability to obtain labor, materials, fuels or reasonable substitutes
therefore; governmental restrictions, regulations, controls, action or inaction;
civil commotion; inclement weather, fire or other acts of God; or other causes
(except financial inability) beyond the reasonable control of the party
obligated to perform (including acts or omissions of the other party for a
period equal to the period of any such prevention, delay or
stoppage.
13.10 Notices.
Any
notice required or desired to be given by a party regarding this Lease shall
be
in writing and shall be personally served, or in lieu of personal service may
be
given by: (i) delivery by Federal Express, United Parcel Service or similar
commercial service, (ii) electronic facsimile transmission, or (iii) by
depositing such notice in the United States mail, postage prepaid, addressed
to
the other party as follows:
A. If
addressed to Landlord, to Landlord at its Address for Notices (as set forth
in
Article 1).
B. If
addressed to Tenant, to Tenant at its Address for Notices (as set forth in
Article 1).
Any
notice given by registered mail shall be deemed to have been given on the third
business day after its deposit in the United States mail. Any notice given
by
certified mail shall be deemed given on the date receipt was acknowledged to
the
postal authorities. Any notice given by mail other than registered or certified
mail shall be deemed given only if received by the other party, and then on
the
date of receipt. In the event of notice by electronic facsimile transmission
or
commercial carrier, notice shall be deemed received on the business day
following the date of confirmation documented by the transmission or carrier.
Each party may, by written notice to the other in the manner aforesaid, change
the address to which notices addressed to it shall thereafter be
mailed.
13.11 Attorneys’
Fees.
In the
event any party shall bring any action, arbitration proceeding or legal
proceeding alleging a breach of any provision of this Lease to recover rent,
to
terminate this Lease, or to enforce, protect, determine or establish any term
or
covenant of this Lease or rights or duties hereunder of either party, the
prevailing party shall be entitled to recover from the non-prevailing party
as a
part of such action or proceeding, or in a separate action for that purpose
brought within one year from the determination of such proceeding, reasonable
attorneys’ fees, expert witness fees, court costs and other reasonable expenses
incurred by the prevailing party. Landlord may enforce this provision by either
(i) requiring Tenant to pay such fees and costs as a condition to curing its
default or (ii) bringing a separate action to enforce such payment, it being
agreed by and between Landlord and Tenant that Tenant’s failure to pay such fees
and costs upon demand shall constitute a breach of this Lease in the same manner
as a failure by Tenant to pay the Base Monthly Rent, giving Landlord the same
rights and remedies as if Tenant failed to pay the Base Monthly
Rent.
13.12 Definitions.
Any term
that is given a special meaning by any provision in this Lease shall, unless
otherwise specifically stated, have such meaning whenever used in this Lease
or
in any Addenda or amendment hereto. In addition to the terms defined in Article
1, the following terms shall have the following meanings:
A. Real
Property Taxes.
The term
“Real Property Tax” or “Real Property Taxes” shall each mean (i) all taxes,
assessments, levies and other charges of any kind or nature whatsoever, general
and special, foreseen and unforeseen (including all installments of principal
and interest required to pay any general or special assessments for public
improvements and any increases resulting from reassessments caused by any change
in ownership or new construction), now or hereafter imposed by any governmental
or quasi-governmental authority or special district having the direct or
indirect power to tax or levy assessments, which are levied or assessed for
whatever reason against the Project or any portion thereof, or Landlord’s
interest therein, or the fixtures, equipment and other property of Landlord
that
is an integral part of the Project and located thereon, or Landlord’s business
of owning, leasing or managing the Project or the gross receipts, income or
rentals from the Project; (ii) all charges, levies or fees imposed by any
governmental authority against Landlord by reason of or based upon the use
of or
number of parking spaces within the Project, the amount of public services
or
public utilities used or consumed (e.g.,
water,
gas, electricity, sewage or surface water disposal) at the Project, the number
of persons employed by tenants of the Project, the size (whether measured in
area, volume, number of tenants or whatever) or the value of the Project, or
the
type of use or uses conducted within the Project; and (iii) all costs and fees
(including attorneys’ fees) incurred by Landlord in contesting any Real Property
Tax and in negotiating with public authorities as to any Real Property Tax.
If,
at any time during the Lease Term, the taxation or assessment of the Project
prevailing as of the Effective Date of this Lease shall be altered so that
in
lieu of or in addition to any Real Property Tax described above there shall
be
levied, assessed or imposed (whether by reason of a change in the method of
taxation or assessment, creation of a new tax or charge, or any other cause)
an
alternate, substitute, or additional tax or charge (i) on the value, size,
use
or occupancy of the Project or Landlord’s interest therein or (ii) on or
measured by the gross receipts, income or rentals from the Project, or on
Landlord’s business of owning, leasing or managing the Project or (iii) computed
in any manner with respect to the operation of the Project, then any such tax
or
charge, however designated, shall be included within the meaning of the terms
“Real Property Tax” or “Real Property Taxes” for purposes of this Lease. If any
Real Property Tax is partly based upon property or rents unrelated to the
Project, then only that part of such Real Property Tax that is fairly allocable
to the Project shall be included within the meaning of the terms “Real Property
Tax” or “Real Property Taxes”. Notwithstanding the foregoing, the terms “Real
Property Tax” or “Real Property Taxes” shall not include estate, inheritance,
transfer, gift or franchise taxes of Landlord or the federal or state income
tax
imposed on Landlord’s income from all sources or any documentary transfer
taxes.
B. Landlord’s
Insurance Costs.
The term
“Landlord’s Insurance Costs” shall mean the costs to Landlord to carry and
maintain the policies of fire and property damage insurance, including quake
and
flood, for the Project and general liability insurance required, or permitted,
to be carried by Landlord pursuant to Article 9, together with any deductible
amounts paid by Landlord upon the occurrence of any insured casualty or loss;
provided
that with
respect to any deductible applied to any cost which is capitalized in accordance
with generally accepted accounting principles, such deductible shall be
amortized as provided in Paragraph 13.12C below.
21.
C. Project
Maintenance Costs.
The term
“Project Maintenance Costs” shall mean all costs and expenses (except Landlord’s
Insurance Costs and Real Property Taxes) paid or incurred by Landlord in owning,
protecting, operating, maintaining, repairing and preserving the Project and
all
parts thereof, including without limitation, (i) professional management fees
(equal to three percent of the annualized Base Monthly Rent), (ii) the costs
incurred by Landlord in the making of any modifications, alterations or
improvements as set forth in Article 6 including costs of complying with any
governmental regulation or court order coming into effect after the Lease
Commencement Date such as costs associated with complying with the Americans
with Disabilities Act (ADA) or any similar laws or court cases, (iii) costs
of
complying with governmental regulations governing Tenant’s use of Hazardous
Materials, and Landlord’s costs of monitoring Tenant’s use of Hazardous
Materials including fees charged by Landlord’s consultants to periodically
inspect the Premises and the Property, (iv) all costs, fees, expenses,
assessments, and the like charged by any public or private maintenance
association or district whether such costs are incurred on or off the Project,
for the benefit of the Project, also including any costs required to be paid
by
Landlord pursuant to any covenants, conditions, and/or restrictions effecting
the Project for the benefit of any common property owners association, and
(v)
such other costs as may be paid or incurred with respect to owning, operating,
maintaining and preserving the Project, such as repairing, replacing and
resurfacing the exterior surfaces of the buildings (including roofs), repairing,
replacing, and resurfacing paved areas, repairing structural parts of the
buildings, cleaning, maintaining, repairing, or replacing the interior of the
Leased Premises both during the Lease Term and upon termination of the Lease,
and maintaining, repairing or replacing, when necessary electrical, plumbing,
sewer, drainage, heating, ventilating and air conditioning systems serving
the
buildings, providing utilities to the common areas, maintenance, repair,
replacement or installation of lighting fixtures, directional or other signs
and
signals, irrigation or drainage systems, trees, shrubs, materials, maintenance
of all landscaped areas, and depreciation and financing costs on maintenance
and
operating machinery and equipment (if owned) and rental paid for such machinery
and equipment (if leased). As to the costs of capital improvements,
replacements, repairs, equipment and other capital costs (“Capital Items”), such
costs shall be included in Project Maintenance Costs as follows: (i) as to
Capital Items with a reasonable useful life of less than five (5) years, all
such costs shall be included in the calendar year during which such costs were
paid, and (ii) as to Capital Items with a reasonable useful life of five (5)
years or more, the first $20,000 of such costs shall be included in Project
Maintenance Costs for the calendar year during which such costs were paid and
the remaining amount shall be amortized over the reasonable useful life of
the
Capital Item, as determined by Landlord in accordance with generally accepted
accounting principles, at an interest rate announced from time to time by Xxxxx
Fargo Bank as its “prime rate” plus 2%, provided further that such amortized
costs included in Project Maintenance Costs shall not exceed $40,000 in any
calendar year.
Exclusions
from Project Maintenance Costs.
Notwithstanding the above, Project Maintenance Costs shall not include the
following:
(i) Interest,
principal, depreciation, and other lender costs and closing costs on any
mortgage or mortgages, ground lease payments, or other debt instrument
encumbering the Building or Project;
(ii) Any
bad
debt loss, rent loss, or reserves for bad debt or rent loss;
(iii) Costs
associated with operation of the business of the ownership of the Building
or
Project or entity that constitutes Landlord or Landlord’s property manager, as
distinguished from the cost of Building operations, including the costs of
partnership or corporate accounting and legal matters; defending or prosecuting
any lawsuit with any mortgagee, lender, ground lessor, broker, tenant, occupant,
or prospective tenant or occupant; selling or syndicating any of Landlord’s
interest in the Building or Project; and disputes between Landlord and
Landlord’s property manager;
(iv) Landlord’s
general corporate or partnership overhead and general administrative expenses,
including the salaries of management personnel who are not directly related
to
the Building or Project and primarily engaged in the operation, maintenance,
and
repair of the Building or Project, except to the extent that those costs and
expenses are included in the management fees;
(v) Advertising,
promotional expenditures and leasing expenses primarily directed toward leasing
tenant space in the Project;
(vi) Leasing
commissions, space-planning costs, attorney fees and costs, disbursements,
and
other expenses incurred in connection with leasing, other negotiations, or
disputes with tenants, occupants, prospective tenants, or other prospective
occupants of the Project, or associated with the enforcement of any
leases;
(vii) Charitable
or political contributions;
(viii) Costs
for
which Landlord is reimbursed; and
(ix) Fees
paid
to any affiliate or party related to Landlord to the extent such fees exceed
the
charges for comparable services rendered by unaffiliated third parties of
comparable skill, stature and reputation in the same market.
D. Ready
For Occupancy.
The term
“Ready for Occupancy” shall mean the date upon which (i) the Leased Premises are
available for Tenant’s occupancy in a broom clean condition and (ii) the
improvements, if any, to be made to the Leased Premises by Landlord as a
condition to Tenant’s obligation to accept possession of the Leased Premises
have been substantially completed as evidenced by a Certificate of Completion
by
Tenant’s architect and the appropriate governmental building department
(i.e.,
the
City building department, if the Project is located within a City, or otherwise
the County building department) shall have approved the construction of the
improvements as substantially complete or is willing to so approve the
construction of such improvements as substantially complete subject only to
compliance with specified conditions which are the responsibility of Tenant
to
satisfy or is willing to allow Tenant to occupy subject to its receiving
assurances that specified work will be completed within 30 days.
22.
E. Tenant’s
Proportionate Share.
The term
“Tenant’s Proportionate Share” or “Tenant’s Share”, as used with respect to an
item pertaining to the Building, shall each mean that percentage obtained by
dividing the leasable square footage contained within the Leased Premises (as
set forth in Article 1) by the total leasable square footage contained within
the Building as the same from time to time exists or, as used with respect
to an
item pertaining to the Project, shall each mean that percentage obtained by
dividing the leasable square footage contained within the Leased Premises (as
set forth in Article 1) by the total leasable square footage contained within
the Project as the same from time to time exists, unless, as to any given item,
such a percentage allocation unfairly burdens or benefits a given tenant(s),
in
which case Landlord shall have the exclusive right to equitably allocate such
item so as to not unfairly burden or benefit any given tenant(s). Landlord’s
determination of any such special allocation shall be final and binding upon
Tenant unless made in bad faith.
F. Building’s
Proportionate Share.
The term
“Building’s Proportionate Share” or “Building’s Share” shall each mean that
percentage which is obtained by dividing the leasable square footage contained
within the Building by the leasable square footage contained within all
buildings located within the Project, unless, as to any given item, such a
percentage allocation unfairly burdens or benefits a given building(s), in
which
case Landlord shall have the exclusive right to equitably allocate such item
so
as to not unfairly burden or benefit any given building(s). Landlord’s
determination of any such special allocation shall be final and binding upon
Tenant unless made in bad faith.
G. Building
Operating Expenses.
The term
“Building Operating Expenses” shall mean and include the Building’s Share of all
Real Property Taxes, plus the Building’s Share of all Landlord’s Insurance
Costs, plus the Building’s Share of all Project Maintenance Costs plus an
accounting fee equal to three percent (3%) of Building Operating Expenses (other
than said fee).
H. Law.
The term
“Law” shall mean any judicial decision and any statute, constitution, ordinance,
resolution, regulation, rule, administrative order, or other requirement of
any
municipal, county , state, federal, or other governmental agency or authority
having jurisdiction over the parties to this Lease, the Leased Premises, the
Building or the Project, or any of them in effect either at the Effective Date
of this Lease or at any time during the Lease Term, including, without
limitation, any regulation, order, or policy of any quasi-official entity or
body (e.g.,
a board
of fire examiners or a public utility or special district).
I. Lender.
The term
“Lender” shall mean the holder of any Note or other evidence of indebtedness
secured by the Project or any portion thereof.
J. Private
Restrictions.
The term
“Private Restrictions” shall mean all recorded covenants, conditions and
restrictions, private agreements, easements, and any other recorded instruments
affecting the use of the Project, as they may exist from time to
time.
K. Rent.
The term
“rent” shall mean collectively Base Monthly Rent and all Additional
Rent.
13.13 General
Waivers.
One
party’s consent to or approval of any act by the other party, requiring the
first party’s consent or approval shall not be deemed to waive or render
unnecessary the first party’s consent to or approval of any subsequent similar
act by the other party. No waiver of any provision hereof or any breach of
any
provision hereof shall be effective unless in writing and signed by the waiving
party. The receipt by Landlord of any rent or payment with or without knowledge
of the breach of any other provision hereof shall not be deemed a waiver of
any
such breach. No waiver of any provision of this Lease shall be deemed a
continuing waiver unless such waiver specifically states so in writing and
is
signed by both Landlord and Tenant. No delay or omission in the exercise of
any
right or remedy accruing to either party upon any breach by the other party
under this Lease shall impair such right or remedy or be construed as a waiver
of any such breach theretofore or thereafter occurring. The waiver by either
party of any breach of any provision of this Lease shall not be deemed to be
a
waiver of any subsequent breach of the same or any other provisions herein
contained.
13.14 Miscellaneous.
Should
any provision of this Lease prove to be invalid or illegal, such invalidity
or
illegality shall in no way affect, impair or invalidate any other provision
hereof, and such remaining provisions shall remain in full force and effect.
Time is of the essence with respect to the performance of every provision of
this Lease in which time of performance is a factor. Any copy of this Lease
which is executed by the parties shall be deemed an original for all purposes.
This Lease shall, subject to the provisions regarding assignment, apply to
and
bind the respective heirs, successors, executors, administrators and assigns
of
Landlord and Tenant. The term “party” shall mean Landlord or Tenant as the
context implies. If Tenant consists of more than one person or entity, then
all
members of Tenant shall be jointly and severally liable hereunder. This Lease
shall be construed and enforced in accordance with the Laws of the State in
which the Leased Premises are located. The language in all parts of this Lease
shall in all cases be construed as a whole according to its fair meaning, and
not strictly for or against either Landlord or Tenant. The captions used in
this
Lease are for convenience only and shall not be considered in the construction
or interpretation of any provision hereof. When the context of this Lease
requires, the neuter gender includes the masculine, the feminine, a partnership
or corporation or joint venture, and the singular includes the plural. The
terms
“must”, “shall”, “will” and “agree” are mandatory. The term “may” is permissive.
When a party is required to do something by this Lease, it shall do so at its
sole cost and expense without right of reimbursement from the other party unless
specific provision is made therefore. Where Tenant is obligated not to perform
any act or is not permitted to perform any act, Tenant is also obligated to
restrain any others reasonably within its control, including agents, invitees,
contractors, subcontractors and employees, from performing said act. Landlord
shall not become or be deemed a partner or a joint venturer with Tenant by
reason of any of the provisions of this Lease.
23.
13.15 Tenant’s
Audit Right.
Tenant
shall have the right, to be exercised not more than once during any calendar
year, within ninety (90) days after Landlord’s final statement, to audit
Building Operating Expenses for the prior year, and to examine Landlord’s
records relating to the same. The costs of any such audit shall be borne by
Tenant, provided,
however,
that in
the event such audit reveals that the amounts charged to Tenant were more than
five percent (5%) greater than the amounts permitted by this Lease to be charged
to Tenant, then Landlord shall pay the reasonable costs of that audit. In
addition, Landlord shall pay to Tenant, within ten (10) days of notice thereof,
any amounts determined to be owed to Tenant as a result of such
audit.
ARTICLE
14
Corporate
Authority
Brokers
And Entire Agreement
14.1 Corporate
Authority.
If
Tenant is a corporation, the Tenant represents and warrants that each individual
executing this Lease on behalf of said corporation is duly authorized to execute
and deliver this Lease on behalf of Tenant in accordance with the bylaws and/or
a board of directors’ resolution of Tenant, that Tenant is validly formed and
duly authorized and existing, that Tenant is qualified to do business in the
State in which the Leased Premises are located, that Tenant has the full right
and legal authority to enter into this Lease, and that this Lease is binding
upon Tenant in accordance with its terms. Tenant shall, within thirty days
after
Landlord’s written request, deliver to Landlord a certified copy of the
resolution of its board of directors authorizing or ratifying the execution
of
this Lease.
14.2 Brokerage
Commissions.
Tenant
warrants that it has not had any dealings with any real estate broker(s),
leasing agent(s), finder(s) or salesmen, other than those persons or entities
named in Article I as the “Brokers” with respect to the lease by it of the
Leased Premises pursuant to this Lease, and that it will indemnify, defend
with
competent counsel, and hold Landlord harmless from any liabilities for the
payment of any real estate brokerage commissions, leasing commissions or
finder’s fees claimed by any other real estate broker(s), leasing agent(s),
finder(s) or salesmen to be earned or due and payable by reason of Tenant’s
agreement or promise (implied or otherwise) to pay (or have Landlord pay) such
a
commission or finder’s fee by reason of its leasing the Leased Premises pursuant
to this Lease. Landlord shall pay all commissions due to the Brokers on account
of this Lease.
14.3 Entire
Agreement.
This
Lease, the Exhibits (as described in Article 1) and the Addenda (as described
in
Article 1), which Exhibits and Addenda are by this reference incorporated
herein, constitute the entire agreement between the parties, and there are
no
other agreements, understandings or representations between the parties relating
to the lease by Landlord of the Leased Premises to Tenant, except as expressed
herein. No subsequent changes, modifications or additions to this Lease shall
be
binding upon the parties unless in writing and signed by both Landlord and
Tenant.
14.4 Landlord’s
Representations.
Tenant
acknowledges that neither Landlord nor any of its agents made any
representations or warranties respecting the Project, the Building or the Leased
Premises, upon which Tenant relied in entering into this Lease, which are not
expressly set forth in this Lease. Tenant further acknowledges that neither
Landlord nor any of its agents made any representations as to (i) whether the
Leased Premises may be used for Tenant’s intended use under existing Law or (ii)
the suitability of the Leased Premises for the conduct of Tenant’s business or
(iii) the exact square footage of the Leased Premises, and that Tenant relied
solely upon its own investigations respecting said matters. Tenant expressly
waives any and all claims for damage by reason of any statement, representation,
warranty, promise or other agreement of Landlord or Landlord’s agent(s), if any,
not contained in this Lease or in any Addenda hereto.
ARTICLE
15
Option
to Renew
15.1 Option
to Renew.
Landlord
hereby grants to Tenant one (1) option to renew the Lease, for a period of
an
additional three (3) years (the “Renewal Term”). The Renewal Term shall commence
upon the expiration of the preceding lease term (the “Renewal Commencement
Date”) such that there shall not be a gap in the time between the Lease Term and
the Renewal Term.
1. The
lease
of the Leased Premises for the Renewal Term shall be on the same terms and
conditions as set forth in the Lease, except:
A. That
the
rental for the Leased Premises during the Renewal Term shall be as set forth
below in Paragraph 3, and
B. That
the
Security Deposit shall be increased to the rental amount for the final month
of
the Renewal Term as determined in Paragraph 3 (the “Increased Security Deposit
Amount”).
24.
2. Tenant
shall notify Landlord of Tenant’s exercise of its right to renew the Lease for
the Renewal Term only by giving to Landlord written notice one hundred eighty
(180) days prior to the Renewal Commencement Date (time is expressly of the
essence to Landlord). Any attempted exercise of this Option made other than
within the time period stated or in the manner stated shall be void and of
no
force or effect. In the event that Tenant does not or is not entitled to
exercise its option Tenant shall have no further rights hereunder.
3. If
Tenant
shall have properly and timely exercised its right to extend the term of the
Lease, the term of the Lease shall be so extended for the Renewal Term on the
same terms and conditions contained in the Lease; provided,
however,
the Base
Monthly Rent for each month of the Renewal Term shall be the Then Market Rental
Rate for the Leased Premises.
4. The
term
“Then Monthly Market Rental Rate” shall be determined by mutual agreement
between Landlord and Tenant or, in the event such agreement cannot be made
within thirty (30) days from the date Tenant shall have exercised this option,
Landlord and Tenant shall each appoint a real estate appraiser with at least
five (5) years full-time commercial/industrial appraisal experience in Alameda
County to appraise and determine the fair market monthly rental rate the Leased
Premises, in their then existing condition for the use specified in the Lease
could be leased for, on the same terms and conditions set forth in the Lease,
to
a qualified tenant ready, willing and able to lease the Leased Premises for
a
term equal to the Renewal Term. If either party does not appoint an appraiser
within ten (10) days after the other party has given notice of the name of
its
appraiser, the other party can then apply to the President of the Alameda County
Real Estate Board or the presiding Judge of the Superior Court of that County
for the selection of a second appraiser who meets the qualifications stated
above. The failing party shall bear the cost of appointing the second appraiser
and of paying the second appraiser’s fee. The two appraisers shall attempt to
establish the Then Fair Market Rental Rate for the Leased Premises. If the
two
appraisers are unable to agree on the Then Fair Market Rental Rate for the
Leased Premises within ten (10) days after the second appraiser has been
selected or appointed, then the two appraisers shall attempt to select a third
appraiser meeting the qualifications stated above. If they fail to agree on
a
third appraiser, either party can follow the above procedure for having an
appraiser appointed by the Real Estate Board or a judiciary. Each of the parties
shall bear one-half (1/2) of the cost of appointing the third appraiser and
of
paying the third appraiser’s fee. Unless the three appraisers are able to agree
on the Then Fair Market Rental Rate for the Leased Premises within ten (10)
days
after the selection or appointment of the third appraiser, the two appraisal
amounts being calculated most closely together, after having discarded the
appraisal amount which most greatly varies from the other two appraisal amounts,
shall be added together then divided by two (2). The resulting rental amount
shall be defined as the Then Fair Market Rental Rate for the Leased
Premises.
In
Witness Whereof,
Landlord
and Tenant have executed this Lease as of the respective dates below set forth
with the intent to be legally bound thereby as of the Effective Date of this
Lease.
|
As
Landlord:
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As
Tenant:
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|
Renco
Bayside Investors,
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|
|
a
California limited partnership
|
a
Delaware corporation
|
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By:
Renco Properties I
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|
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a
California general partnership
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By:
/s/ Xxx
Xxxxxx
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By:
Renco Properties, Inc.
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Title:
CEO
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a
California corporation
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Its:
General Partner
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By:
/s/ Xxxx
Xxxx
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By:
/s/ Xxxxx
Xxxxxx
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Title:
President
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Title:
President
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By:
/s/ Xxxxxxx X.
Xxxxx
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Title:Trustee
UTA dated 7/20/77
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(Xxxxxxx
X. Xxxxx Separate Property Trust)
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Date:
11/1/06
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Date:
11/1/06
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If
Tenant
is a CORPORATION, the authorized officers must sign on behalf of the corporation
and indicate the capacity in which they are signing. This Lease must be executed
by the chairman of the board, president or vice president, and the secretary,
assistant secretary, the chief financial officer or assistant treasurer, unless
the bylaws or a resolution of the board of directors shall otherwise provide,
in
which event a certified copy of the bylaws or a certified copy of the
resolution, as the case may be, must be attached to this Lease.
25.
EXHIBIT
“A”
26.
EXHIBIT
“B”
Floor
Plan Outlining the Premises
27.
EXHIBIT
“C”
Subordination
Agreement
|
RECORDING
REQUESTED
BY
AND WHEN
RECOFRDED
RETURN TO:
________________________,
Esq.
________________________
________________________
________________________
|
SUBORDINATION
NONDISTURBANCE
AND
ATTORNMENT AGREEMENT
| OTICE: |
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.
|
TABLE
OF
DEFINITIONS
|
Execution
Date:
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|
Beneficiary
& Address:
Attn.
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Tenant
& Address:
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Landlord
& Address:
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Loan:
A first mortgage loan in the original principal amount of $
From
Beneficiary to Landlord
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Note:
A Promissory Note executed by Landlord in favor of Beneficiary in
the
amount of the Loan date as of
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Deed
of Trust: A Deed of Trust and Security Agreement with Assignment
of Rents
and Fixture Filing dated as of executed
by
Landlord, to as
Trustee, in
favor of Beneficiary securing repayment of the Note to be recorded
in the
records of the County in which the Property is located.
|
|
Property:
[Property Name]
[Street
Address 1]
[City,
State, Zip]
The
Property is more particularly described on Exhibit
A.
|
THIS
SUBORDINATION, NODISTURBANCE 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 Table of Definitions. This
Agreement is entered into as of the Execution Date with reference to the
following facts:
28.
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 a 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 the 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. Acknowledgements
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
others 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 the 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) beyond one month’s
rental; 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 warranties, or (vi) liable for o 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.
(c)
Notwithstanding
any provisions of the Lease to the contrary, from and after that Beneficiary
acquires title to the Property as a result of a Foreclosure Sale, (i)
Beneficiary will not be obligated to expend any monies to restore casualty
damage in excess of available insurance proceeds; (ii) tenant shall not have
the
right to make repairs and deduct the cost of such repairs from the rent without
a judicial determination that Beneficiary is in default of its obligations
under
the Lease; (iii) Beneficiary shall not be required to grant nondisturbance
to
any subtenants of Tenant; (iv) in no event will Beneficiary be obligated to
indemnify Tenant, except where Beneficiary is in breach of its obligations
under
the Lease or where Beneficiary has been actively negligent in the performance
of
its obligations as landlord; and (v) other than determination of fair market
value, no disputes under the Lease shall be subject to arbitration unless
Beneficiary and Tenant agree to submit a particular dispute to arbitration.
29.
4. Subordination
and Release of Purchase Options. Lessee
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. Acknowledgement
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 or upon any renewal or extension of the
Lease or upon the addition of additional space, pursuant to any expansion rights
contained in the Lease.
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 Table of Definitions (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 the 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 Premises. 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 IMPROVEMENTS 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:
|
By
________________________________________
Its
_________________________________________
|
|
TENANT:
|
__________________________________________
a
_________________________________________
By
________________________________________
Its
________________________________________
|
30.
|
LANDLORD:
|
__________________________________________
a
_________________________________________
By
________________________________________
Its
________________________________________
|
31.
EXHIBIT
“D”
Estoppel
Certificate
TENANT
ESTOPPEL CERTIFICATE
_______________,
20__
To:
Lender
Gentlemen:
The
undersigned, _____________ (“Tenant”), as tenant under a lease (“the “Lease”) of
certain premises dated _________, executed by Tenant and __________ (“Landlord”)
does hereby state, declare, represent and warrant as follows:
1.
The
copy
of the Lease attached hereto as Exhibit “A” is a true and correct copy of the
Lease and the Lease is in full force and effect and has not been amended,
supplemented or changed, except as follows [if none, so state]:
________________________
___________________________________________________________________________
2. Tenant
has accepted possession of the premises demised under the Lease, and all items
of an executory nature have been completed under the terms of the Lease,
including, but not limited to, completion of construction of the demised
premises (and all other improvements required under the Lease) in accordance
with applicable plans and specifications and within the time periods set forth
in the Lease and otherwise in accordance with the Lease, and payment of any
improvement allowance or other funds owing by Landlord to Tenant. Tenant further
acknowledges that the term commenced on __________ and shall expire on
_____________, unless sooner terminated or extended in accordance with the
terms
of the Lease.
3. No
default or event that with the passing of time or the giving of notice, or
both,
would constitute a default (referred to herein collectively as a “default”) on
the part of the undersigned exists under the Lease in the performance of the
terms, covenants and conditions of the Lease required to performed on the part
of the undersigned.
4. No
default on the part of Landlord exists under the Lease in the performance of
the
terms, covenants, and conditions of the Lease required to be performed on the
part of Landlord.
5. Tenant
has no option to renew the Lease or to expand and no right to purchase the
property of which the premises are a part, or any part thereof.
6. No
rentals are accrued and unpaid under the Lease.
7. No
prepayments of rentals due under the Lease have been made and no security or
deposits as security have been made thereunder, except as set forth in the
Lease.
8. The
undersigned has no defense as to its obligations under the Lease and claims
no
setoff or counterclaim against Landlord.
9. The
undersigned has not received notice of any assignment, hypothecation, mortgage,
or pledge of Landlord’s interest in the Lease or the rents or other amounts
payable thereunder.
10. The
undersigned agrees to notify you of any default on the part of Landlord under
the Lease which would entitle the undersigned to cancel the Lease or the xxxxx
the rent payable thereunder, and further agrees that, notwithstanding any
provisions of the Lease, no
notice
or
cancellation thereof shall be effective unless you have received said notice
and
have failed within thirty (30) days after the expiration of the cure period
provided to Landlord under the Lease to cure or commence to cure the default
which gave rise to the notice of cancellation.
32.
11. The
undersigned understands and acknowledges that you are about to make a loan
to
Landlord and receive as part of the security for such loan (i) a Deed of Trust
and Security Agreement with Assignment of Rents and Fixture Filing encumbering
Landlord’s fee interest in the property of which the leased premises are a
portion and the rents, issues and profits of the Lease and (ii) an Assignment
of
Lease which affects the Lease, and that you are relying upon the representations
and warranties contained herein in making such loan.
|
TENANT:
|
|
|
By:
_____________________________
|
|
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Its:
_____________________________
|
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By:
_____________________________
|
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Its:
_____________________________
|
33.
EXHIBIT
“E”
ACCEPTANCE
AGREEMENT
This
Acceptance Agreement is made as of ___________
by
and
between the parties hereto with regard to the Lease dated _________, 2006 and
between Renco
Bayside Investors, a California Limited Partnership (“Landlord”)
and Rackable
Systems, Inc., a Delaware corporation (“Tenant”),
affecting those premises commonly known as Renco 40, located at 00000-00000
Xxxxxxx Xxxxxxx, Xxxxxxx, Xxxxx of California
(the
“Premises:). The parties agree as follows:
| 1. |
All
improvements required to be constructed by Landlord by the Lease
have
been completed in accordance with the terms of the Lease and are
hereby
accepted by Tenant, subject to the completion of punch list items
identified
on Exhibit “A” attached hereto.
|
|
2.
|
Possession
of the Premises has been delivered to Tenant and Tenant has accepted
and
taken possession of the Premises.
|
| 3. |
The
Lease Commencement Date is
______________________
|
|
4.
|
The
Lease Term shall expire on __________ unless sooner terminated according
to the terms of the Lease or by mutual
agreement.
|
| 5. |
Base
Monthly Rent due pursuant to the Lease is as
follows:
|
| 6. |
Landlord
has received a Security Deposit in the amount
of
|
($)______________
| 7. |
Landlord
has received prepaid Rent in the amount of
|
($)_________ ,
which
shall be applied to the first installment of Base Monthly Rent.
|
8.
|
The
Lease is in full force and effect, neither party is in default of
its
obligations under the Lease, and Tenant has no set offs, claims or
defenses to the enforcement of the
Lease
|
|
As
Landlord:
|
As
Tenant:
|
|
Renco
Bayside Investors,
|
|
|
a
California limited partnership
|
a
Delaware corporation
|
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By: Renco
Properties I
|
|
|
a
California general partnership
|
By:
___________________________
|
|
By:
Renco Properties, Inc.
|
Title:
__________________________
|
|
a
California corporation
|
|
|
Its:
General Partner
|
|
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By:
___________________________
|
|
|
By:
___________________________
|
Title:
__________________________
|
|
|
|
|
Title:
__________________________
|
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By:____________________________
|
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Title:
__________________________
|
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Date:
_____________________________
|
Date:
_____________________________
|
34.
EXHIBIT
“F”
TENANT
IMPROVEMENT
WORK
LETTER AGREEMENT
In
connection with the Tenant Improvements to be installed on the Premises Landlord
and Tenant hereby agree as follows:
1. Plans
and Specifications for Tenant Improvements.
Attached to this Agreement as Exhibit B is the Preliminary Floor Plan for the
Tenant Improvements, prepared by Habitec
Architects (“Architect”),
dated October 25, 2006 (“Approved Plans”). Landlord and Tenant hereby approve
said Approved Plans. Landlord shall engage to prepare the final working
architectural, engineering plans and specifications for the Tenant Improvements
to be constructed on the Premises based upon the approved space plan (“Final
Plans and Specifications”). Tenant shall cooperate diligently with Architect,
and shall furnish to Architect, within five (5) days after Landlord’s approval
of the space plan, all information required by Architect for the completion
of
the Final Plans and Specifications. Landlord and Tenant shall indicate their
approval of the Final Plans and Specifications by initialing, dating and
attaching the Final Plans and Specifications to this Lease as Exhibit B. Upon
completion of the Final Plans and Specifications and approval thereof by
Landlord and Tenant, Landlord shall obtain bids from general contractors
(“Contractor”). Landlord and Tenant agree to approve the construction drawings
to the extent that they are consistent with Exhibit B.
5. Substantial
Completion.
The
Commencement Date of the Lease shall be effective upon the Substantial
Completion of the Tenant Improvements. Substantial Completion shall be defined
as to the date that the City of Fremont issues temporary occupancy of the
premises or upon the City’s execution of the final building permit, whichever
occurs sooner provided that the Architect delivers a Certificate of Completion
confirming that the Tenant Improvements have been constructed substantially
in
accordance with the Final Plans and Specifications.
Landlord
Initial: ____________
Tenant
Initial: ____________
35.
6. Payment
for Tenant Improvements.
Landlord shall construct the Tenant Improvements including those items listed
as
Items 1 through 16 on the Approved Plans and the costs of designing and
constructing such Tenant Improvements shall be at Landlord’s sole cost and
expense (“Landlord Work”). Landlord shall also contribute up to $85,000.00
toward the cost of the Tenant Improvements other than the Landlord Work
(“Allowance”). The amount of Allowance applied shall be repaid by Tenant, as an
increase in the Base Monthly Rent, amortized over the initial Lease Term, at
interest accruing at ten percent (10%) per annum commencing as of the Lease
Commencement Date. Any cost of designing and constructing the Tenant
Improvements other than Landlord’s Work and in excess of the Allowance shall be
at Tenant’s expense. Tenant shall reimburse Landlord for such costs within ten
(10) days after Landlord delivers to Tenant written documentation reasonably
satisfactory to Tenant that Landlord has incurred expenses for which Tenant
is
liable hereunder. If Landlord's estimate of the cost of construction shall
exceed the Allowance, Landlord, prior to commencing any construction, shall
submit to Tenant a written estimate setting forth the anticipated cost of the
work, including but not limited to labor and materials, contractor's fees and
permit fees. Within five (5) business days thereafter, Tenant shall either
notify Landlord in writing of its approval of the cost estimate, or specify
its
objections thereto and any desired changes to the Approved Plans. If Tenant
notifies Landlord of such objections and desired changes, Tenant shall work
with
Landlord to reach a mutually acceptable alternative cost estimate and if the
parties cannot agree upon such alternative cost estimate within five (5)
business days, Landlord shall not be required to accept any changes to the
Approved Plans arising from Tenant’s objection. In the event that any Tenant
caused changes result in a delay in the completion of construction of the Tenant
Improvements and provided that Landlord so notifies Tenant at the time such
alleged delay is occurring, Tenant agrees that the Commencement Date of the
Lease and the date for payment of rent shall commence as if such Tenant caused
delay had not occurred, as reasonably documented by Landlord.
Landlord
Initial: ____________
Tenant
Initial: ____________
36.
