Exhibit 10.1
LEASE
BY AND BETWEEN
MENLO BUSINESS PARK, LLC, LESSOR
AND
ACCOM, INC., LESSEE
Menlo Business Park
0000 X'Xxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx
November 19, 1999
TABLE OF CONTENTS
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Paragraph Page
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1. Lease.....................................................................1
2. Term......................................................................1
3. Monthly Base Rent.........................................................2
4. Additional Rent; Operating Expenses and Taxes.............................3
5. Payment of Rent...........................................................7
6. Security Deposit..........................................................8
7. Use.......................................................................8
8. Hazardous Materials.......................................................8
9. Taxes on Lessee's Property...............................................11
10. Insurance................................................................11
11. Indemnification..........................................................12
12. Tenant Improvement Work..................................................14
13. Maintenance and Repairs; Alterations; Surrender and Restoration..........14
14. Utilities and Services...................................................16
15. Liens....................................................................17
16. Assignment and Subletting................................................17
17. Waiver...................................................................20
18. Holding Over.............................................................20
19. Damage or Destruction....................................................21
20. Eminent Domain...........................................................23
21. Remedies.................................................................23
22. Lessee's Personal Property...............................................25
23. Notices..................................................................25
24. Estoppel Certificate.....................................................25
25. Signage..................................................................26
26. Real Estate Brokers......................................................26
27. Subordination; Attornment................................................26
28. No Termination Right.....................................................27
29. Lessor's Entry...........................................................27
30. Attorneys' Fees..........................................................27
31. Compliance with CC&R's...................................................27
32. Quiet Enjoyment..........................................................28
33. General Provisions.......................................................28
SCHEDULE OF EXHIBITS
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EXHIBIT "A" Legal Description
EXHIBIT "B" Menlo Business Park Master Plan
EXHIBIT "C" Floor Plan
EXHIBIT "D" Commencement Memorandum
EXHIBIT "E" Cost Estimate for Tenant Improvement Work
EXHIBIT "F" Lessee Estoppel Certificate
L E A S E
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Menlo Business Park
0000 X'Xxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx
THIS LEASE, referred to herein as "this Lease," is made and entered
into as of November 19, 1999 by and between MENLO BUSINESS PARK, LLC, a
California limited liability company, hereafter referred to as "Lessor," and
ACCOM, INC., a Delaware corporation, hereafter referred to as "Lessee" or
"Accom."
RECITALS:
A. Lessor is the owner of the real property located in Xxxxx Xxxxxxxx
Xxxx, Xxxxx Xxxx, Xxxxxxxxxx, commonly referred to as 0000 X'Xxxxx Xxxxx, Xxxxx
Xxxx, Xxxxxxxxxx, more particularly described on Exhibit "A" attached hereto and
incorporated by reference herein, consisting of a parcel of land containing
approximately 1.68 acres, together with all easements and appurtenances thereto
(the "Land") and the existing building thereon, referred to as Xxxxxxxx #00,
0000 X'Xxxxx Xxxxx, containing approximately 30,623 rentable square feet, and
all other improvements located thereon (collectively, the "Improvements"). The
Land and Improvements are referred to herein collectively as the "Premises." The
Premises are shown on the Menlo Business Park Master Plan attached hereto as
Exhibit "B." Building #10 is sometimes referred to herein as "the Building." The
floor plan of Building #10 is attached hereto as Exhibit "C."
X. Xxxxxx and Lessee wish to enter into this Lease of the Premises upon
the terms and conditions set forth herein.
NOW, THEREFORE, the parties agree as follows:
1. Lease. Lessor hereby leases to Lessee, and Lessee leases from Lessor
the Premises at the rental and upon all of the terms and conditions set forth
herein.
2. Term.
(a) Accom is currently in possession of the Premises pursuant
to an existing Lease between Lessor and Accom dated January 28, 1992 (the
"Original Lease"), the term of which expires on February 26, 2000. The term of
this Lease (the "term") and Lessee's obligation to pay rent pursuant to this
Lease shall commence at 12:01 A.M. on February 27, 2000 (the "Commencement
Date").
The term of this Lease shall expire, unless sooner terminated in accordance with
the provisions hereof, on August 31, 2005. Upon the Commencement Date, Lessor
and Lessee shall confirm in writing the expiration of the term of the Original
Lease, the Commencement Date of this Lease, and the expiration date of the term
of this Lease by executing and delivering the Commencement Memorandum in the
form attached hereto as Exhibit "D."
3. Monthly Base Rent.
(a) Lessee shall pay to Lessor for each full calendar month
during the first twelve (12) full calendar months of the term of this Lease,
plus the partial month if any at the commencement of the lease term, Monthly
Base Rent of Sixty-Four Thousand Three Hundred Eight and Thirty One Hundredths
Dollars ($64,308.30) per 1
1month ($2.10/rentable square foot/month). Upon the execution
and delivery of this Lease by Lessor and Lessee, Lessee shall pay to Lessor the
sum of Sixty-Four Thousand Three Hundred Eight and Thirty One Hundredths Dollars
($64,308.30) representing the Monthly Base Rent for the first full month of the
lease term. Monthly Base Rent for any partial calendar month at the commencement
of the lease term shall 0be prorated on the basis of a thirty (30) day month.
(b) The Monthly Base Rent shall be adjusted as of the first
day of the calendar month immediately following the first anniversary of the
Commencement Date and annually on the first day of the calendar month
immediately following each anniversary of the Commencement Date thereafter
during the entire lease term (the "Rental Adjustment Date") to reflect any
increases in the cost of living. The adjustment shall be calculated upon the
basis of the United States Department of Labor, Bureau of Labor Statistics
Consumer Price Index, all items, for all Urban Consumers - San
Francisco-Oakland-San Xxxx (1982-84=100), hereafter referred to as the "Index."
The Index for said subgroup published most recently as of the end of the
calendar month immediately preceding the month in which the Commencement Date
occurs shall be considered the "base Index."
(c) The Monthly Base Rent shall be adjusted as of each Rental
Adjustment Date to an amount equal to the product obtained by multiplying the
initial Monthly Base Rent referred to in Paragraph 3(a) by a fraction, the
numerator of which is the Index most recently published as of the end of the
calendar month immediately preceding each Rental Adjustment Date and the
denominator of which is the base Index; provided that in no event shall the
Monthly Base Rent be increased on any Rental Adjustment Date to an amount less
than three percent (3%) per annum or more than eight percent (8%) per annum,
calculated for each individual year from the previous Rental Adjustment Date, of
the Monthly Base Rent payable before such Rental Adjustment Date.
(d) When the new Monthly Base Rent is determined for each
Rental Adjustment Date, Lessor shall give Lessee written notice to that effect
indicating how the new Monthly Base Rent figure was computed in accordance with
subparagraph (c). If the Index does not exist on any Rental Adjustment Date in
the same format as referred to in subparagraph (b), Lessor shall substitute in
lieu thereof an index reasonably comparable to the Index referred to above which
is acceptable to Lessee and which is then published by the Bureau of Labor
Statistics, or successor or similar governmental agency, or if no governmental
agency then publishes an index, Lessor shall substitute therefor any index
commonly accepted which is published by a reputable private organization.
4. Additional Rent; Operating Expenses and Taxes.
(a) In addition to the Monthly Base Rent payable by Lessee
pursuant to Xxxxxxxxx 0, Xxxxxx shall pay to Lessor, as "Additional Rent," the
Operating Expenses of the Premises in accordance with Paragraph 4(b) hereof and
real property taxes and assessments levied or assessed against the Premises in
accordance with Paragraph 5(c) hereof. Monthly Base Rent and Additional Rent are
referred to herein collectively as "rent."
(b) "Operating Expenses," as used herein, shall include all
direct costs of management, operation, maintenance, repair and replacement of
the Premises as determined by standard accounting practices (unless excluded by
this Lease), including, but not limited to:
Personal property taxes related to the Premises; any parking
taxes or parking levies imposed on the Premises in the future by any
governmental agency; a pro rata portion of the management fee charged for the
management and operation of Menlo Business Park, in an amount equal to four
percent (4%) of the total gross income received by Lessor from the operation of
Menlo Business Park (including Monthly Base Rent and Additional Rent received
from tenants); water and sewer charges; waste disposal; insurance premiums for
insurance coverages maintained by Lessor pursuant to Paragraph 11(b) hereof;
license, permit, and inspection fees; charges for electricity, heating, air
conditioning, gas, and any other utilities (including, without limitation, any
temporary or permanent utility surcharge or other exaction); security; painting
and repairing, interior and exterior; maintenance and replacement of floor and
window coverings; repair, maintenance, and replacement of air-conditioning,
heating, mechanical and electrical systems, elevators, plumbing and sewage
systems; landscaping and gardening of Outside Areas; glazing; repair,
maintenance, cleaning, sweeping, striping, and resurfacing of the parking area;
supplies, materials, equipment and tools in the maintenance of the Premises;
costs for accounting services incurred in the calculation of Operating Expenses
and Taxes as defined herein; and the cost of any other capital expenditures for
any improvements or changes to the Buildings which are
required by laws, ordinances, or other governmental regulations adopted after
the Commencement Date, or for any items or capital expenditures voluntarily made
by Lessor which are intended to and have the effect of reducing Operating
Expenses; provided, however, that except for capital improvements required
because of Lessee's specific use of the Premises, if Lessor is required to or
voluntarily makes such capital improvements, Lessor shall amortize the cost of
said improvements over the useful life of said improvements (together with
interest on the unamortized balance at the rate equal to the effective rate of
interest on Lessor's bank line of credit at the time of completion of said
improvements, but in no event in excess of twelve percent (12%) per annum) as an
Operating Expense in accordance with standard accounting practices, except that
with respect to capital improvements made to save Operating Expenses such
amortization shall not be at a rate greater than the anticipated savings in
Operating Expenses. Operating Expenses shall also include any other expense or
charge, whether or not described herein not specifically excluded by other
provisions of this Lease, which in accordance with generally accepted accounting
and management practices would be considered an expense of managing, operating,
maintaining, and repairing the Premises.
(c) Real property taxes and assessments upon the Premises,
during each lease year or partial lease year during the term of this Lease are
referred to herein as "Taxes."
As used herein, "Taxes" shall mean:
(1) all real estate taxes, assessments and any other
taxes levied or assessed against the Premises including the underlying land, the
Buildings, all improvements located thereon, including any increase in Taxes
resulting from a reassessment following any transfer of ownership of the
Premises or any interest therein; and
(2) all other taxes which may be levied in lieu of
real estate taxes, assessments, and other fees, charges, and levies, general and
special, ordinary and extraordinary, unforeseen as well as foreseen, of any kind
and nature by any authority having the direct or indirect power to tax,
including without limitation any governmental authority or any improvement or
other district or division thereof, for public improvements, services, benefits,
or environmental matters which are assessed, levied, confirmed, imposed, or
become a lien (i) upon the Premises, and/or any legal or equitable interest of
Lessor in any part thereof; or (ii) upon this transaction or any document to
which Lessee is a party creating or transferring any interest in the Premises;
and (iii) any tax or excise, however described, imposed in addition to, or in
substitution partially or totally of, any tax previously included within the
definition of "Taxes" or any tax the nature of which was previously included in
the definition "Taxes."
Not included within the definition of "Taxes" are any
net income, profits, transfer, franchise, estate or inheritance taxes imposed by
any governmental authority; late payment penalties or interest, provided that
Lessee is not in default in the payment of Monthly Base Rent or Additional Rent.
With respect to any assessments which may be levied
against or upon the Premises, or the underlying land, which under the laws then
in force may be evidenced by improvement or other bonds, or may be paid in
annual installments, only the amount of such annual installment (with
appropriate proration of any partial year) and statutory interest shall be
included within the computation of the annual Taxes levied against the Premises,
the Buildings and improvements thereon, and the underlying land.
(d) The following costs ("Costs") shall be excluded from the
definition of Operating Expenses:
(1) Costs occasioned by the act, omission or
violation of law by Lessor, or its respective agents, employees or contractors;
(2) Costs for which Lessor receives reimbursement
from others, including reimbursement from insurance;
(3) Interest, charges and fees incurred on debt or
payments on any deed of trust on the Property;
(4) Advertising or promotional costs or other costs
incurred by Lessor in procuring tenants for the Premises or other portions of
Menlo Business Park;
(5) Costs incurred in repairing, maintaining or
replacing any structural elements of the Buildings for which Lessor is
responsible pursuant to Paragraph 13(a) hereof;
(6) Any wages, bonuses or other compensation of
employees above the grade of building manager and any executive salary of any
officer or employee of Lessor, including fringe benefits other than insurance
plans and tax-qualified benefit plans, or any fee, profit or compensation
retained by Lessor or its affiliates for management and administration of the
Premises in excess of the maximum sum specified in Paragraph 4(b) of this Lease;
(7) General office overhead and general and
administrative expenses of Lessor, except as specifically provided in Paragraph
4(b); and
(8) Leasing expenses and broker commissions payable
by Lessor.
Lessor shall at all times use its best efforts to operate the
Buildings in an economically reasonable manner at costs not disproportionately
higher than those experienced by other comparable buildings in the market area
in which the Premises are located (Menlo Park).
(e) At the Commencement Date, and as close as reasonably
possible to the end of each calendar year thereafter, Lessor shall notify Lessee
of the Operating Expenses estimated by Lessor for the calendar year 2000, and
for each following calendar year. Concurrent with such notice, Lessor shall
provide a description of such Operating Expenses and Taxes. Commencing on the
Commencement Date, and on the first day of every month thereafter, Lessee shall
pay to Lessor, as Additional Rent, one-twelfth (1/12th) of the estimated
Operating Expenses and Taxes. If at any time during any such calendar year, it
appears to Lessor that the Operating Expenses or Taxes for such year will vary
from Lessor's estimate, Lessor may, by written notice to Lessee, revise Lessor's
estimate for such year and the Additional Rent and Taxes payments by Lessee for
such year shall thereafter be based upon such revised estimate. Lessor shall
furnish to Lessee with such revised estimate written verification showing that
the actual Operating Expenses or Taxes are greater than Lessor's estimate. The
increase in the monthly installments of Additional Rent and Taxes resulting from
Lessor's revised estimate shall not be retroactive, but the Additional Rent and
Taxes for each calendar year shall be subject to adjustment between Lessor and
Lessee after the close of the calendar year, as provided below.
Not later than ninety (90) days after the expiration of each
calendar year of the term, Lessor shall furnish Lessee a statement certified by
a responsible employee or agent of Lessor (the "Operating Statement") with
respect to such year, prepared by an employee or agent of Lessor, showing
Operating Expenses and Taxes broken down by component expenses, Base Taxes and
Base Operating Expenses of the Premises broken down by component expenses, and
the total payments made by Lessee on the basis of any previous estimate of such
Operating Expenses and Taxes, all in sufficient detail for verification by
Lessee. Unless Lessee raises any objections to the Operating Statement within
ninety (90) days after receipt of the same, such statement shall conclusively be
deemed correct and Lessee shall have no right thereafter to dispute such
statement or any item therein or the computation of Operating Expenses and/or
Taxes. Lessee or its accountants shall have the right to inspect and audit
Lessor's books and records with respect to this Lease once each Lease Year to
verify actual Operating Expenses and/or Taxes. Lessor's books and records shall
be kept in accord with generally accepted accounting principles. If Lessee's
audit of the Operating Expenses and/or Taxes for any year reveals a net
overcharge of more than five percent (5%), Lessor promptly shall reimburse
Lessee for the cost of the audit; otherwise, Lessee shall bear the cost of
Lessee's audit. If Lessee objects to Lessor's Operating Statement, Lessee shall
continue to pay on a monthly basis the Operating Expenses
and/or Taxes based upon the prior year's Operating Statement until the dispute
is resolved.
If the Operating Expenses and Taxes for the year as finally
determined exceeds the total payments made by Lessee based on Lessor's
estimates, Lessee shall pay to Lessor the deficiency, within thirty (30) days
after the receipt of Lessor's Operating Statement. If the total payments made by
Lessee based on Lessor's estimate of the Operating Expenses and/or Taxes exceed
the Operating Expenses and/or Taxes, Lessee's extra payment, plus the cost of
the audit if charged to Lessor, shall be credited against payments of Additional
Rent next due hereunder.
Notwithstanding the termination of this Lease, within thirty
(30) days after Lessee's receipt of Lessor's Operating Statement or the
completion of Lessee's audit regarding the Operating Expenses and/or Taxes for
the calendar year in which this Lease terminates, Lessee shall pay to Lessor or
shall receive from Lessor, as the case may be, an amount equal to the difference
between the Operating Expenses and/or Taxes for such year, as finally
determined, and the amount previously paid by Lessee on account thereof
(prorated to the expiration date or the termination date of this Lease).
5. Payment of Rent.
(a) All rent shall be due and payable in lawful money of the
United States of America at the address of Lessor set forth in Paragraph 23,
"Notices," without deduction or offset and without prior demand or notice,
unless otherwise specified herein. Monthly Base Rent and Additional Rent shall
be payable monthly, in advance, on the first day of each calendar month.
Lessee's obligation to pay rent for any partial month at the commencement of the
lease term shall be as provided in Paragraph 3(a) hereof and rent for any
partial month at the expiration or termination of the lease term shall be
prorated on the basis of a thirty (30) day month.
(b) If any installment of Monthly Base Rent, Additional Rent
or any other sum due from Lessee is not received by Lessor within five (5) days
after the same is due, Lessee shall pay to Lessor an additional sum equal to
five percent (5%) of the amount overdue as a late charge. The parties agree that
this late charge represents a fair and reasonable estimate of the costs that
Lessor will incur by reason of the late payment by Lessee. Acceptance of any
late charge shall not constitute a waiver of Lessee's default with respect to
the overdue amount. Any amount not paid within ten (10) days after Lessee's
receipt of written notice that such amount is due shall bear interest from the
date due until paid at the lesser rate of (1) the prime rate of interest plus
five percent (5%) or (2) the maximum rate allowed by law, in addition to the
late payment charge.
Initials: Lessor_________ Lessee_________
6. Security Deposit. Lessee shall deposit with Lessor upon execution
hereof the sum of Sixty-Four Thousand Three Hundred Eight and Thirty One
Hundredths Dollars ($64,308.30) (the "Security Deposit") as security for
Lessee's faithful performance of Lessee's obligations under this Lease. If
Lessee fails to pay Monthly Base Rent or Additional Rent or charges due
hereunder, or otherwise defaults under this Lease (as defined in Paragraph 21),
Lessor may use, apply or retain all or any portion of said Security Deposit for
the payment of any amount due Lessor or to reimburse or compensate Lessor for
any liability, cost, expense, loss or damage (including attorneys' fees) which
Lessor may suffer or incur by reason thereof. If Lessor uses or applies all or
any portion of said Security Deposit, Lessee shall within ten (10) days after
written request therefor deposit moneys with Lessor sufficient to restore said
Security Deposit to the full amount required by this Lease. Lessor shall not be
required to keep all or any part of the Security Deposit separate from its
general accounts. Lessor shall, at the expiration or earlier termination of the
term hereof and after Lessee has vacated the Premises, return to Lessee (or, at
Lessor's option, to the last assignee, if any, of Lessee's interest herein),
that portion of the Security Deposit not used or applied by Lessor. No part of
the Security Deposit shall be considered to be held in trust, to bear interest
or other increment for its use, or to be prepayment for any moneys to be paid by
Lessee under this Lease.
7. Use. Lessee shall use and occupy the Premises only for general
offices, research and development, and electronic assembly/testing, and for no
other use or purpose without Lessor's prior written consent. Use of the Premises
for the manufacture of integrated circuits or the manufacture of other
electronic components is expressly prohibited. Any use of the Premises by Lessee
or by any sublessee or assignee approved by Lessor pursuant to Paragraph 16
shall comply with the provisions of this Paragraph 7.
8. Hazardous Materials.
(a) The term "Hazardous Materials" as used in this Lease shall
mean any product, substance, or waste whose presence, use, manufacture,
disposal, transportation, or release, either by itself or in combination with
other materials expected to be on the Premises, is either: (i) potentially
injurious to the public health, safety or welfare, the environment or the
Premises, (ii) regulated or monitored by any governmental authority, or (iii) a
basis for potential liability of Lessor to any governmental agency or third
party under any applicable statute or common law theory. Hazardous Materials
shall include, but not be limited to hydrocarbons, petroleum, gasoline, and/or
crude oil or any products, by-products or fractions thereof. Lessee shall not
engage in any activity in or on the Premises which constitutes a Reportable Use
of Hazardous Materials without the express prior written consent of Lessor and
timely compliance (at Lessee's expense) with all Environmental Laws. "Reportable
Use" shall mean (i) the installation or use of any above or below ground storage
tank,
(ii) the generation, possession, storage, use, transportation, or disposal of
Hazardous Materials that require a permit from, or with respect to which a
report, notice, registration or business plan is required to be filed with, any
governmental authority, and/or (iii) the presence at the Premises of Hazardous
Materials with respect to which any Environmental Law requires that a notice be
given to persons entering or occupying the Premises or neighboring properties.
Notwithstanding the foregoing, Lessee may use any ordinary and customary
materials reasonably required to be used in the normal course of Lessee's agreed
use of the Premises, so long as such use is in compliance with all Environmental
Laws, is not a Reportable Use, and does not expose the Premises or neighboring
property to any meaningful risk of contamination or damage or expose Lessor to
any liability therefor. In addition, Lessor may condition its consent to any
Reportable Use upon receiving such additional assurances as Lessor reasonably
deems necessary to protect itself, the public, the Premises and/or the
environment against damage, contamination, injury and/or liability, including,
but not limited to, the installation (and removal on or before Lease expiration
or termination) of protective modifications (such as concrete encasements)
and/or increasing the Security Deposit.
(b) "Environmental Laws" shall mean and include any Federal,
State, or local statute, law, ordinance, code, rule, regulation, order, or
decree regulating, relating to, or imposing liability or standards of conduct
concerning, any hazardous, toxic, or dangerous waste, substance, element,
compound, mixture or material, as now or at any time hereafter in effect
including, without limitation, California Health and Safety Codes ss.25100 et
seq., ss.25300 et seq., Sections 25281(f) and 25501 of the California Health and
Safety Code, Section 13050 of the Water Code, the Federal Comprehensive
Environmental Response, Compensation and Liability Act, as amended, 42 U.S.C.
ss.9601 et seq., the Superfund Amendments and Reauthorization Act, 42 U.S.C.
ss.ss.9601 et seq., the Federal Toxic Substances Control Act, 15 U.S.C. ss.2601
et seq., the Federal Resource Conservation and Recovery Act as amended, 42
U.S.C. ss.6901 et seq., the Federal Hazardous Material Transportation Act, 49
U.S.C. ss.1801 et seq., the Federal Clean Air Act, 42 U.S.C. ss.7401 et seq.,
the Federal Water Pollution Control Act, 33 U.S.C.ss.1251 et seq., the River and
Harbors Act of 1899, 33 U.S.C. ss.401 et seq., and all rules and regulations of
the EPA, the California Environmental Protection Agency, or any other state or
federal department, board or any other agency or governmental board or entity
having jurisdiction over the Security, as any of the foregoing have been, or are
hereafter amended.
(c) If Lessee knows, or has reasonable cause to believe, that
Hazardous Materials have come to be located in, on, under or about the Premises,
other than as previously consented to by Lessor, Lessee shall immediately give
written notice of such fact to Lessor and provide Lessor with a copy of any
report, notice, claim or other documentation which it has concerning the
presence of such Hazardous Materials.
(d) Lessee and Lessee's agents, employees, and contractors
shall not cause any Hazardous Materials to be discharged into the plumbing or
sewage system of the Buildings or into or onto the Land underlying or adjacent
to the Buildings in violation of any Environmental Laws. Lessee shall promptly,
at Lessee's expense, take all investigatory and/or remedial action reasonably
recommended, whether or not formally ordered or required, for the cleanup of any
contamination, and for the maintenance, security and/or monitoring of the
Premises or neighboring properties, that was caused or materially contributed to
by Lessee, or pertaining to or involving any Hazardous Materials brought onto
the Premises during the term of this Lease, by or for Lessee, or any third
party.
(e) Lessee shall indemnify, defend and hold Lessor harmless
from any and all claims, damages, fines, judgments, penalties, costs,
liabilities or losses (including, without limitation, any and all sums paid for
settlement of claims, attorneys' fees, consultant and expert fees) arising
during or after the term (as such may be extended) from or in connection with
the presence of Hazardous Materials in or on the Premises, the Buildings or
Menlo Business Park as a result of Lessee's breach of the foregoing covenant, or
as a result of the negligence, willful misconduct or other acts of Lessee,
Lessee's agents, employees, and contractors or invitees. Without limitation of
the foregoing, this indemnification shall include any and all costs incurred due
to any investigation of the site or any cleanup, removal or restoration mandated
by a federal, state or local agency or political subdivision. The foregoing
indemnity shall survive the expiration or earlier termination of this Lease.
(f) Lessor shall indemnify, defend and hold Lessee harmless
from any and all claims, damages, fines, judgments, penalties, costs,
liabilities or losses (including, without limitation, any and all sums paid for
settlement of claims, attorneys' fees, consultant and expert fees) arising
before, during or after the term (as such may be extended) from or in connection
with the presence of Hazardous Materials in or on the Premises, the Buildings or
Menlo Business Park, unless the (1) Hazardous Materials are present in whole or
in part as a result of the breach of this Lease by Lessee, or the negligence,
willful misconduct, or other acts of Lessee, Lessee's agents, employees,
contractors or invitees; or (2) such Hazardous Materials have flowed, diffused,
migrated, or percolated into, onto, or under the Premises, the Buildings, or
Menlo Business Park from other property, unless such other property is owned or
controlled by Lessor. Without limitation of the foregoing, this indemnification
shall include any and all costs incurred due to any investigation of the site or
any cleanup, removal or restoration mandated by a federal, state or local agency
or political subdivision, unless the Hazardous Materials are present solely as a
result of the negligence, willful misconduct or other acts of Lessee, Lessee's
agents, employees, contractors or invitees. The foregoing indemnity shall
survive the expiration or earlier termination of this Lease.
9. Taxes on Lessee's Property. Lessee shall pay before delinquency any
and all taxes, assessments, license fees, and public charges levied, assessed,
or imposed and which become payable during the initial lease term and any
extension thereof upon Lessee's equipment, fixtures, furniture, and personal
property installed or located in the Premises.
10. Insurance.
(a) Lessee shall, at Lessee's sole cost and expense, provide
and keep in force during the lease term and any extension thereof, and for the
benefit of Lessee, Lessor, and Lessor's property manager, a general commercial
liability insurance policy with a recognized casualty insurance company
qualified to do business in California, insuring Lessor and Lessee against any
and all liability occasioned by any occurrence in, on, about, or related to the
Premises, or arising out of the condition, use, occupancy, alteration or
maintenance of the Premises, and shall provide for contractual liability assumed
in Paragraph 11(a) of this Lease, having a combined single limit for both bodily
injury and property damage in an amount not less than Five Million Dollars
($5,000,000). Prior to the Commencement Date, Lessee agrees to furnish to Lessor
certificates of insurance confirming such coverage naming Lessor and Lessor's
property manager as additional insureds.
(b) Lessor shall obtain and carry in Lessor's name, as
insured, as an Operating Expense of the Premises as provided in Paragraph 4(b),
during the lease term, standard fire and extended coverage insurance (with
rental loss insurance coverage for a period of one year), public liability and
property damage insurance, and insurance against such other risks or casualties
as Lessor shall determine, including, but not limited to, insurance coverages
required of Lessor by the beneficiary of any deed of trust which encumbers the
Property, and earthquake insurance, insuring Lessor's interest in the Premises
(including leasehold improvements installed at Lessor's expense) in an amount
not less than the full replacement cost of the Buildings and other Improvements
from time to time. The proceeds of any such insurance shall be payable solely to
Lessor and Lessee shall have no right or interest therein. Lessor shall have no
obligation to insure against loss by Lessee to Lessee's leasehold improvements
installed at Lessee's expense, or Lessee's equipment, fixtures, furniture, or
other personal property of Lessee in or about the Premises occurring from any
cause whatsoever. Lessor's public liability insurance shall provide for
contractual liability assumed in Paragraph 11(b) of this Lease.
(c) The parties release each other, and their respective
authorized representatives, from any claims for damage to any person or to the
Premises and to the fixtures, personal property, leasehold improvements and
alterations of either Lessor or Lessee in or on the Premises that are caused by
or result from risks required by this Lease to be insured against or actually
insured against under any insurance policies
carried by the parties and in force at the time of any such damage, whichever is
greater. This waiver applies whether or not the loss is due to the negligent
acts or omissions of Lessor or Lessee or their respective officers, directors,
employees, agents, contractors, or invitees.
(d) Each party shall cause each insurance policy obtained by
it to provide that the insurance company waives all right of recovery by way of
subrogation against either party in connection with the above waiver and any
damage covered by any policy; provided, however, that such provision or
endorsement shall not be required if the applicable policy of insurance permits
the named insured to waive rights of subrogation on a blanket basis, in which
case the blanket waiver shall be acceptable. Neither party shall be liable to
the other for any damage caused by fire or any of the risks insured against
under any insurance policy required by this Lease.
11. Indemnification.
(a) Lessee waives all claims against Lessor for damages to
property, or to goods, wares, and merchandise stored in, upon, or about the
Premises, and for injuries to persons in, upon, or about the Premises from any
cause arising at any time, except as may be caused by the negligence or willful
misconduct of Lessor or its employees, agents or contractors. Lessee shall
indemnify, defend, and hold harmless Lessor from claims, suits, actions, or
liabilities for personal injury, death or for loss or damage to property that
arise from (1) any activity, work, or thing done, permitted or suffered by
Lessee in or about the Premises, (2) for bodily injury or damage to property
which arises in or about the Buildings or the Outside Areas to the extent the
injury or damage to property results from the negligent acts or omissions of
Lessee, its employees, agents or contractors, and (3) based on any breach or
default by Lessee in the performance of any obligation on Lessee's part to be
performed under this Lease.
(b) Lessor shall indemnify, defend, and hold harmless Lessee
from claims, suits, actions, or liabilities for personal injury, death or for
loss or damage to property that arise from (1) any activity, work, or thing
done, permitted or suffered by Lessor in or about the Premises, (2) for bodily
injury or damage to property which arises in or about the Buildings or the
Outside Areas to the extent the injury or damage to property results from the
negligent acts or omissions of Lessor, its employees, agents or contractors, and
(3) based on any breach or default by Lessor in the performance of any
obligation on Lessor's part to be performed under this Lease.
(c) In the absence of comparative or concurrent negligence on
the part of Lessee or Lessor, their respective agents, affiliates, and
subsidiaries, or their respective officers, directors, members, employees or
contractors, the foregoing indemnities by Lessee and Lessor shall also include
reasonable costs, expenses and attorneys' fees incurred in connection with any
indemnified claim or incurred by the
indemnitee in successfully establishing the right to indemnity. The indemnitor
shall have the right to assume the defense of any claim subject to the foregoing
indemnities with counsel reasonably satisfactory to the indemnitee. The
indemnitee agrees to cooperate fully with the indemnitor and its counsel in any
matter where the indemnitor elects to defend, provided the indemnitor shall
promptly reimburse the indemnitee for reasonable costs and expenses incurred in
connection with its duty to cooperate.
The foregoing indemnities are conditioned upon the indemnitee
providing prompt notice to the indemnitor of any claim or occurrence that is
likely to give rise to a claim, suit, action or liability that will fall within
the scope of the foregoing indemnities, along with sufficient details that will
enable the indemnitor to make a reasonable investigation of the claim.
When the claim is caused by the joint negligence or willful
misconduct of Lessee and Lessor or by the indemnitor party and a third party
unrelated to the indemnitor party (except indemnitor's agents, officers,
employees or invitees), the indemnitor's duty to indemnify and defend shall be
proportionate to the indemnitor's allocable share of joint negligence or willful
misconduct.
(d) Lessor shall not be liable to Lessee for any damage
because of any act or negligence of any other owner or occupant of adjoining or
contiguous property, nor for overflow, breakage, or leakage of water, steam,
gas, or electricity from pipes, wires, or otherwise in the Premises or the
Buildings. Except as otherwise herein provided, Lessee will pay for damage to
the Premises caused by the misuse or neglect of the Premises by Lessee or its
employees, agents, or contractors, including, but not limited to, the breakage
of glass in the Premises. Any damage to the Premises caused by other tenants of
Menlo Business Park shall be paid for by such other tenants or by Lessor.
12. Tenant Improvement Work.
(a) Lessor shall enter into a contract with a licensed general
contractor selected by Lessor for the construction of the Tenant Improvement
Work listed on the Cost Estimate set forth on Exhibit "E" attached hereto. The
Tenant Improvement Work shall be performed pursuant to the plans and
specifications prepared by Lessor and the Work Letter Agreement attached hereto
as Exhibit "F." Said plans and specifications shall be subject to Lessee's
written approval prior to commencement of construction of the Tenant Improvement
Work, which approval shall not be unreasonably withheld. Lessor shall contribute
the sum of Two Hundred Thousand Dollars ($200,000) to the cost of the Tenant
Improvement Work as Lessor's Tenant Improvement Allowance. Any cost of the
Tenant Improvement Work in excess of Lessor's Tenant Improvement Allowance shall
be paid by Lessee.
(b) The Tenant Improvement Work shall be constructed under the
direct supervision of Xxxxxxx Properties, Inc., as construction manager, at a
fee of five percent (5%) of hard construction costs. The general contractor
shall perform the work pursuant to a negotiated fixed fee guaranteed maximum
price contract. The work shall be performed on an "open book" basis with a
post-job audit of all costs by a representative from both Lessee and Xxxxxxx
Properties, Inc.
(c) Subject to completion of the Tenant Improvement Work,
Lessee waives all right to make repairs at the expense of Lessor, or to deduct
the costs thereof from the rent, and Lessee waives all rights under Section 1941
and 1942 of the Civil Code of the State of California. At the termination of
this Lease, Lessee shall surrender the Premises in a clean and good condition,
except for ordinary wear and tear and except for damage caused by casualty, the
elements, acts of God, a partial taking by eminent domain, or latent defects in
the Premises existing as of the Commencement Date.
13. Maintenance and Repairs; Alterations; Surrender and Restoration.
(a) Lessor shall, at Lessor's sole expense, keep in good
order, condition, and repair and replace when necessary, the structural elements
of the roof (excluding the roof membrane) , and the structural elements of the
foundation and exterior walls (except the interior faces thereof), of the
Buildings, and other structural elements of the Buildings and the Premises as
"structural elements" are defined in building codes applicable to the Buildings,
excluding any alterations, structural or otherwise, made by Lessee to the
Buildings which are not approved in writing by Lessor prior to the construction
or installation thereof by Lessee.
(b) Lessor shall repair, maintain, and replace as needed, as
an Operating Expense pursuant to Paragraph 4 hereof, the roof membrane, the
Outside Areas, including the landscaping, tree trimming, resurfacing and
restriping of the parking lot and walkways, exterior building painting, exterior
building lighting, parking lot lighting, and exterior security patrol. In the
event Lessee provides Lessor with written notice of the need for any repairs,
Lessor shall commence any such repairs promptly following receipt by Lessor of
such notice and Lessor shall diligently prosecute such repairs to completion.
(c) Subject to the foregoing and except as provided elsewhere
in this Lease, Lessee shall at all times at Lessee's expense keep the Premises
in good and safe order, condition, and repair. Lessee shall execute and maintain
in full force and effect throughout the term at Lessee's expense a service
contract with an authorized air conditioning service company. Lessee shall
submit a copy of said contract and any amendments thereto to Lessor for Lessor's
review and approval, which approval shall not be unreasonably withheld. Lessor
shall have the right to obtain on a semi-annual
basis an inspection report of the HVAC system from an HVAC service firm
designated by Lessor for the purpose of monitoring the performance of the HVAC
maintenance and repair work performed by Lessee's HVAC service firm. The cost of
such inspection report shall be an Operating Expense pursuant to Paragraph 4.
Subject to the release of claims and waiver of subrogation contained in
Paragraphs 10(c) and 10(d), if Lessor is required to make any repairs by reason
of Lessee's negligent acts or omission to act, Lessor may add the cost of such
repairs to the next installment of rent which shall thereafter become due, and
Lessee shall promptly pay the same upon receipt of an invoice therefor.
(d) Lessee may, from time to time, at its own cost and expense
and without the consent of Lessor make nonstructural alterations to the interior
of the Premises the cost of which in any one instance is Ten Thousand Dollars
($10,000) or less, and the aggregate cost of all such work during the term of
this Lease does not exceed Fifty Thousand Dollars ($50,000), provided Lessee
first notifies Lessor in writing of any such nonstructural alterations.
Otherwise, Lessee shall not make any additional alterations, improvements, or
additions to the Premises without delivering to Lessor a complete set of plans
and specifications for such work and obtaining Lessor's prior written consent
thereto. If any nonstructural alterations to the interior of the Premises exceed
Ten Thousand Dollars ($10,000) in cost in any one instance, or exceed the
aggregate cost of Fifty Thousand Dollars ($50,000) during the term of this
Lease, Lessee shall employ, at Lessee's expense, Xxxxxxx Properties, Inc. as
construction manager for such alterations at a fee equal to five percent (5%) of
hard construction costs. Lessor may condition its consent to Lessee agreeing in
writing to remove any such alterations prior to the expiration of the lease term
and Lessee agreeing to restore the Premises to its condition prior to such
alterations at Lessee's expense. Lessor shall advise Lessee in writing at the
time consent is granted whether Lessor reserves the right to require Lessee to
remove any alterations from the Premises prior to the termination of this Lease.
All alterations, trade fixtures and personal property
installed in the Premises solely at Lessee's expense ("Lessee's Property) shall
during the term of this Lease remain Lessee's property and Lessee shall be
entitled to all depreciation, amortization and other tax benefits with respect
thereto. Upon the expiration or sooner termination of this Lease all
alterations, fixtures and improvements to the Premises, whether made by Lessor
or installed by Lessee at Lessee's expense, shall be surrendered by Lessee with
the Premises and shall become the property of Lessor.
(e) Lessee, at Lessee's sole cost and expense, shall promptly
and properly observe and comply with all present and future orders, regulations,
rules, laws, and ordinances of all governmental agencies or authorities, and the
Board of Fire Underwriters. Any structural changes or repairs or other repairs
or changes of any nature which would be considered a capital expenditure under
generally accepted
accounting principles to the Premises shall be made by Lessor at Lessee's
expense if such structural repairs or changes are required by reason of the
specific nature of the use of the Premises by Lessee. If such structural changes
or repairs are not required by reason of the specific nature of Lessee's use of
the Premises, the cost of such structural changes or repairs shall be treated as
an Operating Expense and amortized in accordance with the provisions of
Paragraph 4(b).
(f) Lessee shall surrender the Premises by the last day of the
lease term or any earlier termination date, with all of the improvements to the
Premises, parts, and surfaces thereof clean and free of debris and in good
operating order, condition, and state of repair, ordinary wear and tear
excepted. "Ordinary wear and tear" shall not include any damage or deterioration
that would have been prevented by good maintenance practice or by Lessee
performing all of its obligations under this Lease. The obligations of Lessee
shall include the repair of any damage occasioned by the installation,
maintenance, or removal of Lessee's trade fixtures, furnishings, equipment, and
alterations, and the restoration by Lessee of the Premises to its condition
prior to any alterations, additions, or improvements (1) if Lessor's consent
thereto was conditioned upon such removal and restoration upon expiration or
sooner termination of the Lease term pursuant to Paragraph 13(d), or (2) if
Lessee made any such alterations, additions, or improvements without obtaining
Lessor's prior written consent in breach of Paragraph 13(d) and within a
reasonable time after the expiration or sooner termination of the Lease term
Lessor gives written notice to Lessee requiring Lessee to perform such removal
and restoration. Any removal and remediation of Hazardous Materials by Lessee
shall be certified by the San Mateo County Health Department and a copy of such
certification shall be delivered to Lessor.
14. Utilities and Services.
(a) Lessee shall contract for and pay for all electricity,
telephone, gas, water, heat and air conditioning service, janitorial service,
refuse pick-up, sewer charges, and all other utilities or services supplied to
or consumed by Lessee, its agents, employees, contractors, and invitees on or
about the Premises.
(b) Lessor shall not be liable to Lessee for any interruption
or failure of any utility services to the Buildings or the Premises which is not
caused by the negligence or willful acts of Lessor, or Lessor's employees,
agents, or contractors. Lessee shall not be relieved from the performance of any
covenant or agreement in this Lease because of any such failure. Unless such
failure is caused by the negligence or willful acts of Lessor or Lessor's
employees, agents, or contractors, Lessee shall be responsible for and shall
make all repairs to the Premises required to restore such services to the
Premises.
15. Liens. Lessee agrees to keep the Premises free from all liens
arising out of any work performed, materials furnished, or obligations incurred
by Lessee. Lessee shall give Lessor at least ten (10) days prior written notice
before commencing any work of improvement on the Premises, the contract price
for which exceeds Ten Thousand Dollars ($10,000). Lessor shall have the right to
post notices of non-responsibility with respect to any such work. If Lessee
shall, in good faith, contest the validity of any such lien, claim or demand,
then Lessee shall, at its sole expense, defend and protect itself, Lessor and
the Premises against the same, and shall pay and satisfy any such adverse
judgment that may be rendered thereon before the enforcement thereof against the
Lessor or the Premises. If Lessor shall require, Lessee shall furnish to Lessor
a surety bond satisfactory to Lessor in an amount equal to one and one-half
times the amount of such contested claim or demand, indemnifying Lessor against
liability for the same, as required by law for the holding of the Premises free
from the effect of such lien or claim.
16. Assignment and Subletting.
(a) Except as otherwise provided in this Xxxxxxxxx 00, Xxxxxx
shall not assign this Lease, or any interest, voluntarily or involuntarily, and
shall not sublet the Premises or any part thereof, or any right or privilege
appurtenant thereto, or suffer any other person (the agents and servants of
Lessee excepted) to occupy or use the Premises, or any portion thereof, without
the prior written consent of Lessor in each instance pursuant to the terms and
conditions set forth below, which consent shall not be unreasonably withheld,
subject to the following provisions.
(b) Prior to any assignment or sublease which Lessee desires
to make, Lessee shall provide to Lessor the name and address of the proposed
assignee or sublessee, and true and complete copies of all documents relating to
Lessee's prospective agreement to assign or sublease, a copy of a current
financial statement for such proposed assignee or sublessee, and shall specify
all consideration to be received by Lessee for such assignment or sublease in
the form of lump sum payments, installments of rent, or otherwise. For purposes
of this Paragraph 16, the term "consideration" shall include all money or other
consideration to be received by Lessee for such assignment or sublease. Within
fifteen (15) days after the receipt of such documentation and other information,
Lessor shall (1) notify Lessee in writing that Lessor elects to consent to the
proposed assignment or sublease subject to the terms and conditions hereinafter
set forth; or (2) notify Lessee in writing that Lessor refuses such consent,
specifying reasonable grounds for such refusal; or (3) notify Lessee that Lessor
elects to terminate this Lease as to the entire Premises, or as to the portion
of the Premises which Lessee proposes to sublease, as the case may be, and
specifying the effective date of termination. If Lessor elects to terminate this
Lease as to the entire Premises, or as to the portion of the Premises which
Lessee proposes to sublease, as the case may be, as of the effective date of
termination Lessor and Lessee shall each be
released and discharged from any liability or obligation to the other under this
Lease accruing thereafter, and Lessee agrees that Lessor may enter into a direct
lease with such proposed assignee or sublessee without any obligation or
liability to Lessee.
In deciding whether to consent to any proposed assignment or
sublease, Lessor may take into account whether or not reasonable conditions,
including, but not limited to, the following, have been satisfied:
(1) In Lessor's reasonable judgment, the proposed
assignee or subtenant is engaged in such a business, that the Premises, or the
relevant part thereof, will be used in such a manner which complies with
Paragraph 7 hereof entitled "Use" and Lessee or the proposed assignee or
sublessee submits to Lessor documentary evidence reasonably satisfactory to
Lessor that such proposed use constitutes a permitted use of the Premises
pursuant to the ordinances and regulations of the City of Menlo Park;
(2) The proposed assignee or subtenant is a reputable
entity or individual with sufficient financial net worth so as to reasonably
indicate that it will be able to meet its obligations under this Lease or the
sublease in a timely manner;
(3) The proposed assignment or sublease is of the
entire Premises and not a portion thereof;
(4) The proposed assignment or sublease is approved
by Lessor's mortgage lender if such lender has the right to approve or
disapprove proposed assignments or subleases; and
(5) The proposed assignment or sublease shall
expressly prohibit further assignment or subletting of all or any part of the
Premises by the assignee or sublessee and shall otherwise be in form reasonably
satisfactory to Lessor and Lessor's counsel.
(c) As a condition to Lessor's granting its consent to any
assignment or sublease, (1) Lessor may require that Lessee pay to Lessor, as and
when received by Lessee, one hundred percent (100%) of the amount of any excess
of the consideration to be received by Lessee in connection with said assignment
or sublease over and above the rental amount fixed by this Lease and payable by
Lessee to Lessor, after deducting only reasonable marketing costs incurred by
Lessee in consummating such assignment or sublease which are approved in writing
by Lessor; and (2) Lessee and the proposed assignee or sublessee shall
demonstrate to Lessor's reasonable satisfaction that each of the criteria
referred to in subparagraph (b) above is satisfied.
(d) Each assignment or sublease agreement to which Lessor has
consented shall be an instrument in writing in form satisfactory to Lessor, and
shall be
executed by both Lessee and the assignee or sublessee, as the case may be. Each
such assignment or sublease agreement shall recite that it is and shall be
subject and subordinate to the provisions of this Lease, that the assignee or
sublessee accepts such assignment or sublease, that Lessor's consent thereto
shall not constitute a consent to any subsequent assignment or subletting by
Lessee or the assignee or sublessee, and, except as otherwise set forth in a
sublease approved by Lessor, agrees to perform all of the obligations of Lessee
hereunder (to the extent such obligations relate to the portion of the Premises
assigned or subleased), and that the termination of this Lease shall, at
Lessor's sole election, constitute a termination of every such assignment or
sublease.
(e) In the event Lessor shall consent to an assignment or
sublease, Lessee shall nonetheless remain primarily liable for all obligations
and liabilities of Lessee under this Lease, including but not limited to the
payment of rent.
(f) Lessee hereby stipulates that the foregoing terms and
conditions are reasonable and comply with the California Civil Code Section
1951.4.
(g) Notwithstanding the foregoing, Lessee may, without
Lessor's prior written consent and without any participation by Lessor in
assignment and subletting proceeds, sublet the entire Premises or assign this
Lease to a subsidiary, affiliate, division or corporation controlled or under
common control with Lessee ("affiliate"), or to a successor corporation related
to Lessee by merger, consolidation or reorganization, provided that any such
assignee or sublessee shall have a current verifiable net worth at least equal
to that of Lessee as of the date of the execution of this Lease. Lessee's
foregoing rights to assign this Lease shall be subject to the following
conditions: (1) Lessee shall not be in default hereunder past any applicable
cure period; (2) in the case of an assignment or subletting to an affiliate,
Lessee shall remain liable to Lessor hereunder; and (3) the transferee or
successor entity shall expressly assume in writing Lessee's obligations
hereunder.
(h) Subject to the provisions of this Paragraph 16 any
assignment or sublease without Lessor's prior written consent shall at Lessor's
election be void. The consent by Lessor to any assignment or sublease shall not
constitute a waiver of the provisions of this Paragraph 16, including the
requirement of Lessor's prior written consent, with respect to any subsequent
assignment or sublease. If Lessee shall purport to assign this Lease, or
sublease all or any portion of the Premises, or permit any person or persons
other than Lessee to occupy the Premises, without Lessor's prior written consent
(if such consent is required hereunder), Lessor may collect rent from the person
or persons then or thereafter occupying the Premises and apply the net amount
collected to the rent reserved herein, but no such collection shall be deemed a
waiver of Lessor's rights and remedies under this Paragraph 16, or the
acceptance of any such purported assignee, sublessee, or occupant, or a release
of Lessee from the further performance by Lessee of covenants on the part of
Lessee herein contained.
(i) Lessee shall not hypothecate or encumber its interest
under this Lease or any rights of Lessee hereunder, or enter into any license or
concession agreement respecting all or any portion of the Premises, without
Lessor's prior written consent which consent Lessor may grant or withhold in
Lessor's absolute discretion without any liability to Lessee. Lessee's granting
of any such encumbrance, license, or concession agreement shall constitute an
assignment for purposes of this Paragraph 16.
(j) In the event of any sale or exchange of the Premises by
Lessor and assignment of this Lease by Lessor, Lessor shall, upon providing
Lessee with written confirmation that Lessor has delivered any security deposit
held by Lessor to Lessor's successor in interest, be and hereby is entirely
relieved of all liability under any and all of Lessor's covenants and
obligations contained in or derived from this Lease with respect to the period
commencing with the consummation of the sale or exchange and assignment.
(k) The parties acknowledge that Lessor has the remedy
described in California Civil Code Section 1951.4 (Lessor may continue the Lease
in effect after Lessee's breach and abandonment and recover rent as it becomes
due, if Lessee has right to sublet or assign, subject only to reasonable
limitations).
17. Waiver. The waiver by Lessor or Lessee of any breach of any term,
covenant, or condition contained herein shall not be deemed to be a waiver of
such term, covenant, or condition of any subsequent breach of the same or any
other term, covenant, or condition contained herein. The subsequent acceptance
of rent hereunder by Lessor shall not be deemed to be a waiver of any preceding
breach by Lessee of any term, covenant, or condition of this Lease, other than
the failure of Lessee to pay the particular rent so accepted, regardless of
Lessor's knowledge of such preceding breach at the time of acceptance of such
rent.
18. Holding Over. Lessee shall vacate the Premises and deliver the same
to Lessor upon the expiration or sooner termination of this Lease. In the event
of holding over by Lessee after the expiration or termination of this Lease,
such holding over shall be on a month-to-month tenancy and all of the terms and
provisions of this Lease shall be applicable during such period, except that
Lessee shall pay Lessor as Monthly Base Rent during such holdover an amount
equal to the greater of (i) one hundred fifty percent (150%) of the Monthly Base
Rent in effect at the expiration of the term, or (ii) the then market rent for
comparable research and development/office space. If such holdover is without
Lessor's written consent, Lessee shall be liable to Lessor for all costs,
expenses, and consequential damages incurred by Lessor as a result of such
holdover. The rental payable during such holdover period shall be payable to
Lessor on demand.
19. Damage or Destruction.
(a) In the event of a total destruction of the Buildings and
improvements during the lease term from any cause, either party may elect to
terminate this Lease by giving written notice of termination to the other party
within thirty (30) days after the casualty occurs. A total destruction shall be
deemed to have occurred for this purpose if the Buildings or the Premises are
destroyed to the extent of seventy-five percent (75%) or more of the replacement
cost thereof. If the Lease is not terminated, Lessor shall repair and restore
the Premises in a diligent manner and this Lease shall continue in full force
and effect, except that Monthly Base Rent and Additional Rent shall be abated in
accordance with Paragraph 19(d) below.
(b) In the event of a partial destruction of the Buildings or
the Premises to an extent not exceeding twenty-five percent (25%) of the
replacement cost thereof and if the damage thereto can be repaired,
reconstructed, or restored within a period of one hundred twenty (120) days from
the date of such casualty, and if the casualty is from a cause which is required
to be insured under Lessor's fire and extended coverage insurance, or is insured
under any other coverage then carried by Lessor, and Lessor receives proceeds of
insurance sufficient to repair and restore the Buildings and improvements,
Lessor shall forthwith repair the same, and this Lease shall continue in full
force and effect, except that Monthly Base Rent and Additional Rent shall be
abated in accordance with Paragraph 19(d) below. If any of the foregoing
conditions is not met, Lessor shall have the option of either repairing and
restoring the Buildings and improvements, or terminating this Lease by giving
written notice of termination to Lessee within thirty (30) days after the
casualty, subject to the provisions of Paragraph 19(c).
(c) In the event of a partial destruction of the Buildings and
improvements of the Premises to an extent equal to or exceeding twenty-five
percent (25%) but less than seventy-five percent (75%) of the replacement cost
thereof, or if the damage thereto cannot be repaired, reconstructed, or restored
within a period of one hundred twenty (120) days from the date of such casualty,
either Lessor or Lessee may terminate this Lease by giving written notice of
termination to the other within thirty (30) days after the casualty.
Furthermore, if such casualty is from a cause which is not
required to be insured under Lessor's fire and extended coverage insurance, or
is not insured under any other insurance carried by Lessor, or if the proceeds
of insurance received by Lessor are not sufficient (or would not have been
sufficient if required insurance were carried) to repair and restore the
Buildings and improvements, Lessor may elect to repair and restore the Buildings
and improvements (provided that Lessee has not elected to terminate this Lease
pursuant to the first sentence of this Paragraph 19(c)), or Lessor may terminate
this Lease by giving written notice of termination to Lessee.
Lessor's election to repair and restore the Buildings and improvements or to
terminate this Lease, shall be made and written notice thereof shall be given to
Lessee within thirty (30) days after the casualty. Notwithstanding the
foregoing, (1) if Lessor has not obtained all necessary governmental permits for
the restoration and commenced construction of the restoration within one hundred
twenty (120) days after the casualty, Lessee may terminate this Lease by written
notice to Lessor given at any time prior to the actual commencement of
construction of the restoration; or (2) if Lessor elects to repair and restore
the Buildings and improvements under subparagraph (b) or (c) above, but the
repairs and restoration are not substantially completed within one hundred
eighty (180) days after the casualty, Lessee may terminate this Lease by written
notice to Lessor given within thirty (30) days after the expiration of said
period of one hundred eighty (180) days after the casualty.
If this Lease is not terminated by Lessor or Lessee pursuant
to the foregoing provisions, Lessor shall complete the repairs in a diligent
manner and this Lease shall continue in full force and effect, except that
Monthly Base Rent and Additional Rent shall be abated in accordance with
Paragraph 19(d) below.
(d) In the event of repair, reconstruction, or restoration as
provided herein, the Monthly Base Rent and Additional Rent shall be abated
proportionally in the ratio which the Lessee's use of the Premises is impaired
during the period of such repair, reconstruction, or restoration, from the date
of the casualty until such repair, reconstruction or restoration is completed.
(e) With respect to any destruction of the Premises which
Lessor is obligated to repair, or may elect to repair, under the terms of this
Paragraph 19, the provisions of Section 1932, Subdivision 2, and of Section
1933, Subdivision 4, of the Civil Code of the State of California are waived by
the parties. Lessor's obligation to repair and restore the Premises shall be
limited to the improvements originally constructed by Lessor at Lessor's
expense. Lessee shall repair or replace, at Lessee's expense, all leasehold
improvements, fixtures, and equipment installed by Lessee or paid for by Lessee.
Lessor's time for completion of the repairs and restoration of the Premises
shall be extended by a period equal to any delays caused by strikes, labor
disputes, unavailability of materials, inclement weather, acts of God, or other
causes beyond Lessor's control.
(f) In the event of termination of this Lease pursuant to any
of the provisions of this Paragraph 19, the monthly rent shall be apportioned on
a per diem basis and shall be paid to the date of the casualty. In no event
shall Lessor be liable to Lessee for any damages resulting to Lessee from the
occurrence of such casualty, or from the repairing or restoration of the
Buildings and improvements, or from the termination of this Lease as provided
herein, nor shall Lessee be relieved thereby from
any of Lessee's obligations hereunder, except to the extent and upon the
conditions expressly set forth in this Paragraph 19.
20. Eminent Domain.
(a) If the whole or any substantial part of the Buildings or
appurtenant real property owned by Lessor shall be taken or condemned by any
competent public authority for any public use or purpose, the term of this Lease
shall end upon the earlier to occur of the date when the possession of the part
so taken shall be required for such use or purpose or the vesting of title in
such public authority. Rent shall be apportioned as of the date of such
termination. Lessee shall be entitled to receive any damages awarded by the
court for (i) leasehold improvements installed at Lessee's expense or other
property owned by Lessee, and (ii) reasonable costs of moving by Lessee to
another location in San Mateo County. The entire balance of the award shall be
the property of Lessor.
(b) If there is a partial taking of the Premises by eminent
domain which is not a substantial part of the Buildings and the balance of the
Premises remains reasonably suitable for continued use and occupancy by Lessee
in Lessee's reasonable judgment for the purposes referred to in Paragraph 7,
Lessor shall complete any necessary repairs in a diligent manner and this Lease
shall remain in full force and effect with a just and proportionate abatement of
the Monthly Base Rent and Additional Rent, to reflect the number of square feet
of the Premises taken and the number of square feet remaining. If after a
partial taking, the Premises and parking are not reasonably suitable for
Lessee's continued use and occupancy for the uses permitted herein, Lessee may
terminate this Lease effective on the earlier of the date title vests in the
public authority or the date possession is taken. Subject to the provisions of
Paragraph 20(a), the entire award for such taking shall be the property of
Lessor.
21. Remedies. If Lessee fails to make any payment of rent or any other
sum due under this Lease for ten (10) days after receipt by Lessee of written
notice from Lessor; or if Lessee breaches any other term of this Lease for
thirty (30) days after receipt by Lessee of written notice from Lessor (unless
such default is incapable of cure within thirty (30) days and Lessee commences
cure within thirty (30) days and diligently prosecutes the cure to completion
within a reasonable time); or if Lessee's interest herein, or any part thereof,
is assigned or transferred, either voluntarily or by operation of law (except as
expressly permitted by other provisions of this Lease); or if Lessee makes a
general assignment for the benefit of its creditors; or if this Lease is
rejected (i) by a bankruptcy trustee for Lessee, (ii) by Lessee as debtor in
possession, or (iii) by failure of Lessee as a bankrupt debtor to act timely in
assuming or rejecting this Lease; then any of such events shall constitute an
event of default and breach of this Lease by Lessee and Lessor may, at its
option, elect the remedies specified in either subparagraph (a) or (b) below.
Any such rejection of this Lease referred to above shall
not cause an automatic termination of this Lease. Whenever in this Lease
reference is made to a default by Lessee, such reference shall refer to an event
of default as defined in this Paragraph 21.
(a) Lessor may repossess the Premises and remove all persons
and property therefrom. If Lessor repossesses the Premises because of a breach
of this Lease, this Lease shall terminate and Lessor may recover from Lessee:
(1) the worth at the time of award of the unpaid rent
which had been earned at the time of termination including interest thereon at a
rate equal to the Federal discount rate plus one percent (1%) per annum, or the
maximum legal rate of interest, whichever is less, from the time of termination
until paid;
(2) the worth at the time of award of the amount by
which the unpaid rent which would have been earned after termination until the
time of award exceeds the amount of such rental loss that Lessee proves could
have been reasonably avoided, including interest thereon at a rate equal to the
Federal discount rate plus one percent (1%) per annum, or the maximum legal rate
of interest, whichever is less, from the time of termination until paid;
(3) the worth at the time of award of the amount by
which the unpaid rent for the balance of the term after the time of award
exceeds the amount of such rental loss for the same period that Lessee proves
could be reasonably avoided; and
(4) any other amount necessary to compensate Lessor
for all the detriment proximately caused by Lessee's breach or by Lessee's
failure to perform its obligations under this Lease or which in the ordinary
course of things would be likely to result therefrom.
(b) If Lessor does not repossess the Premises, then this Lease
shall continue in effect for so long as Lessor does not terminate Lessee's right
to possession and Lessor may enforce all of its rights and remedies under this
Lease, including the right to recover the rent and other sums due from Lessee
hereunder. For the purposes of this Paragraph 21, the following do not
constitute a repossession of the Premises by Lessor or a termination of the
Lease by Lessor:
(1) Acts of maintenance or preservation by Lessor or
efforts by Lessor to relet the Premises; or
(2) The appointment of a receiver by Lessor to
protect Lessor's interests under this Lease.
(c) Lessor's failure to perform or observe any of its
obligations under this Lease or to correct a breach of any warranty or
representation made in this Lease within thirty (30) days after receipt of
written notice from Lessee setting forth in reasonable detail the nature and
extent of the failure referencing pertinent Lease provisions or if more than
thirty (30) days is required to cure the breach, Lessor's failure to begin
curing within the thirty (30) day period and diligently prosecute the cure to
completion, shall constitute a default. If Lessor commits a default, Lessee's
sole remedy shall be to institute an action against Lessor for damages, without
rent abatement or offset against rent.
22. Lessee's Personal Property. If any personal property of Lessee
remains on the Premises after (1) Lessor terminates this Lease pursuant to
Paragraph 21 above following an event of default by Lessee, or (2) after the
expiration of the Lease term or after the termination of this Lease pursuant to
any other provisions hereof, Lessor shall give written notice thereof to Lessee
pursuant to applicable law. Lessor shall thereafter release, store, and dispose
of any such personal property of Lessee in accordance with the provisions of
applicable law.
23. Notices. All notices, statements, demands, requests, or consents
given hereunder by either party to the other shall be in writing and shall be
personally delivered or sent by United States mail, registered or certified,
return receipt requested, postage prepaid, and addressed to the parties as
follows:
Lessor: Menlo Business Park, LLC
c/o Tarlton Properties, Inc.
000 Xxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Lessee: Accom, Inc.
0000 X'Xxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxx
President and CEO
or to such other address as either party may have furnished to the other as a
place for the service of notice. Notices shall be deemed given upon receipt or
attempted delivery where delivery is not accepted.
24. Estoppel Certificate. Lessee and Lessor shall within fifteen (15)
days following request by the other party (the "Requesting Party"), execute and
deliver to the Requesting Party a Lessee Estoppel Certificate substantially in
the form attached hereto as Exhibit "G" (1) certifying that this Lease has not
been modified and certifying that
this Lease is 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; (2) stating the date to which the rent and other charges are
paid in advance, if at all; (3) stating the amount of any security deposit held
by Lessor; and (4) acknowledging that there are not, to the responding party's
knowledge, any uncured defaults on the part of the Requesting Party hereunder,
or if there are uncured defaults on the part of the Requesting Party, stating
the nature of such uncured defaults.
25. Signage. Lessor shall provide to Lessee space for Lessee's signs on
the monument signs for the Buildings located in the landscaped median in front
of the Buildings. Lessee may also place Lessee's vinyl lettering signage at the
glass door entrances to the Buildings. All of Lessee's signage shall comply with
the Menlo Park sign ordinances and regulations and shall be subject to Lessor's
approval as to the location, size and design thereof. The cost of the
installation of the vinyl lettering on the monument signs and at the glass door
entrances shall be paid by Lessee. Any additional signage shall be subject to
Lessor's prior approval and, if approved, shall be installed at Lessee's
expense.
26. Real Estate Brokers. Lessor shall pay a leasing commission to
Xxxxxxx Properties, Inc., Lessor's broker, pursuant to a separate agreement
between Lessor and said broker. Each party represents that it has not had any
dealings with any real estate broker, finder, or other person with respect to
this Lease other than Xxxxxxx Properties, Inc. who has acted as exclusive
leasing agent for Lessor, and each party shall hold harmless the other party
from all damages, expenses, and liabilities resulting from any claims that may
be asserted against the other party by an other broker, finder, or other person
with whom the other party has or purportedly has dealt.
27. Subordination; Attornment.
(a) This Lease, without any further instrument, shall at all
times be subject and subordinate to any and all mortgages and deeds of trust
which may now or hereafter affect Lessor's estate in the real property of which
the Premises form a part, and to all advances made or hereafter to be made upon
the security thereof, and to all renewals, modifications, consolidations,
replacements and extensions thereof. Lessor shall use reasonable efforts to
cause the beneficiary of any deed of trust executed by Lessor as trustor after
the date hereof to execute a recognition and non-disturbance agreement in a form
reasonably satisfactory to Lessor, Lessee and such beneficiary which (i)
provides that this Lease shall not be terminated so long as Lessee is not in
default under this Lease, and (ii) that upon acquiring title to the Premises by
foreclosure or otherwise such holder shall recognize all of Lessee's rights
hereunder which accrue thereafter.
(b) In confirmation of such subordination, Lessee shall
promptly execute any certificate or other instrument which Lessor may deem
proper to evidence such subordination, without expense to Lessor; provided,
however, that if any person or persons purchasing or otherwise acquiring the
real property of which the Premises form a part by any sale, sales and/or other
proceedings under such mortgages and/or deeds of trust, shall elect to continue
this Lease in full force and effect in the same manner and with like effect as
if such person or persons had been named as Lessor herein, then this Lease shall
continue in full force and effect as aforesaid, and Lessee hereby attorns and
agrees to attorn to such person or persons.
(c) If Lessee is notified in writing of Lessor's default under
any deed of trust affecting the Premises and if Lessee is instructed in writing
by the party giving notice to make Lessee's rental payments to beneficiary
Lessee shall comply with such request without liability to Lessor until Lessee
receives written confirmation that such default has been cured by Lessor and
that the deed of trust has been reinstated.
28. No Termination Right. Lessee shall not have the right to terminate
this Lease as a result of any default by Lessor and Lessee's remedies in the
event of a default by Lessor shall be limited to the remedy set forth in
Paragraph 21(c). Lessee expressly waives the defense of constructive eviction.
29. Lessor's Entry. Except in the case of an emergency and except for
permitted entry during Lessee's normal working hours, Lessor and Lessor's agents
shall provide Lessee with at least twenty-four (24) hours' notice prior to entry
of the Premises. Such entry by Lessor and Lessor's agents shall not impair
Lessee's operations more than reasonably necessary. Lessor and Lessor's agents
shall at all times be accompanied by Lessee during any such entry except in case
of emergency and except for janitorial work. Lessor may enter the Premises
without prior notice to Lessee if Lessee has vacated the Premises.
30. Attorneys' Fees. If any action at law or in equity shall be brought
to recover any rent under this Lease, or for or on account of any breach of or
to enforce or interpret any of the provisions of this Lease or for recovery of
the possession of the Premises, the prevailing party shall be entitled to
recover from the other party costs of suit and reasonable attorneys' fees, the
amount of which shall be fixed by the court and shall be made a part of any
judgment rendered.
31. Compliance with CC&R's. During the term of this Lease and any
option extension period, Lessee shall comply, at Lessee's expense, with all of
the covenants, conditions, and restrictions affecting the Premises which are
recorded in the Official Records of San Mateo County, California, and which are
in effect as of the date of this Lease.
32. Quiet Enjoyment. Upon payment by Lessee of the rent for the
Premises and the observance and performance of all of the covenants, conditions,
and provisions on Lessee's part to be observed and performed under this Lease,
Lessee shall have quiet enjoyment and possession of the Premises for the entire
term hereof subject to all of the provisions of this Lease.
33. General Provisions.
(a) During the term of this Lease and any option extension
period, Lessee and its employees and agents shall comply with the Rules and
Regulations attached hereto as Exhibit "H."
(b) Nothing contained in this Lease shall be deemed or
construed by the parties hereto or by any third person to create the
relationship of principal and agent or of partnership or of joint venture of any
association between Lessor and Lessee, and neither the method of computation of
rent nor any other provisions contained in this Lease nor any acts of the
parties hereto shall be deemed to create any relationship between Lessor and
Lessee other than the relationship of landlord and tenant.
(c) Each and all of the provisions of this Lease shall be
binding upon and inure to the benefit of the parties hereto, and except as
otherwise specifically provided elsewhere in this Lease, their respective heirs,
executors, administrators, successors, and assigns, subject at all times,
nevertheless, to all agreements and restrictions contained elsewhere in this
Lease with respect to the assignment, transfer, encumbering, or subletting of
all or any part of Lessee's interest in this Lease.
(d) The captions of the paragraphs of this Lease are for
convenience only and shall not be considered or referred to in resolving
questions of interpretation or construction.
(e) This Lease is and shall be considered to be the only
agreement between the parties hereto and their representatives and agents. All
negotiations and oral agreements acceptable to both parties have been merged
into and are included herein. There are no other representations or warranties
between the parties and all reliance with respect to representations is solely
upon the representations and agreements contained in this instrument.
(f) The laws of the State of California shall govern the
validity, performance, and enforcement of this Lease. Notwithstanding which of
the parties may be deemed to have prepared this Lease, this Lease shall not be
interpreted either for or against Lessor or Lessee, but this Lease shall be
interpreted in accordance with the general tenor of the language in an effort to
reach an equitable result.
(g) Time is of the essence with respect to the performance of
each of the covenants and agreements contained in this Lease.
(h) Lessee hereby expressly waives any and all rights of
redemption granted by or under any present or future law in the event of Lessee
being evicted or dispossessed for any cause, or in the event of Lessor obtaining
possession of the Premises by reason of the breach by Lessee of any of the
covenants and conditions of the Lease or otherwise. The rights given to Lessor
herein are in addition to any rights that may be given to Lessor by any statute
or otherwise.
(i) Recourse by Lessee for breach of this Lease by Lessor
shall be expressly limited to Lessor's interest in the Premises and the rents,
issues and profits therefrom, and in the event of any such breach or default by
Lessor Lessee hereby waives the right to proceed against any other assets of
Lessor or against any other assets of any manager or member of Lessor.
(j) Any provision or provisions of this Lease which shall be
found to be invalid, void or illegal by a court of competent jurisdiction, shall
in no way affect, impair, or invalidate any other provisions hereof, and the
remaining provisions hereof shall nevertheless remain in full force and effect.
(k) This Lease may be modified in writing only, signed by the
parties in interest at the time of such modification.
(l) Each party represents to the other that the person signing
this Lease on its behalf is properly authorized to do so, and in the event this
Lease is signed by an agent or other third party on behalf of either Lessor or
Lessee, written authority to sign on behalf of such party in favor of the agent
or third party shall be provided to the other party hereto either prior to or
simultaneously with the return to such other party of a fully executed copy of
this Lease.
(m) No binding agreement between the parties with respect to
the Premises shall arise or become effective until this Lease has been duly
executed by both Lessee and Lessor and a fully executed copy of this Lease has
been delivered to both Lessee and Lessor.
(n) Lessor and Lessee acknowledge that the terms and
conditions of this Lease constitute confidential information of Lessor and
Lessee. Neither party shall disseminate orally or in written form a copy of this
Lease, lease proposals, lease drafts, or other documentation containing the
terms, details or conditions contained herein to any third party without
obtaining the prior written consent of the other party, except to the attorneys,
accountants, or other authorized business representatives or agents of the
parties. Neither Lessor nor Lessee shall make any public announcement of the
consummation of this Lease transaction without the prior approval of the other
party.
(o) The rights and remedies that either party may have under
this Lease or at law or in equity, upon any breach, are distinct, separate and
cumulative and shall not be deemed inconsistent with each other, and no one of
them shall be deemed to be exclusive of any other.
(p) Lessor and Lessee waive any claim for consequential
damages which one may have against the other for breach of or failure to perform
or observe the requirements and obligations created by this Lease.
(q) Lessor and Lessee each agree to and they hereby do waive
trial by jury in any action, proceeding or counterclaim brought by either of the
parties hereto against the other on any matters whatsoever arising out of or in
any way connected with this Lease, the relationship of Lessor and Lessee,
Lessee's use or occupancy of the Premises and/or any claim of injury or damage,
and any statutory remedy.
(r) This Lease shall not be recorded.
IN WITNESS WHEREOF, the Lessor and Lessee have duly executed this Lease
as of the date first set forth herein.
"Lessor"
MENLO BUSINESS PARK, LLC
a California limited liability company
By: /s/ XXXX X. XXXXX
-----------------------------------
Xxxx X. Xxxxx, Manager
By: /s/ X. X. XXXXXXX, XX
-----------------------------------
X. X. Xxxxxxx, XX, Manager
"Lessee"
ACCOM, INC.,
a Delaware corporation
By: /s/ XXXXXX XXXXXX
-----------------------------------
Xxxxxx Xxxxxx, President
By: /s/ XXXXXX XXXXXXXX
-----------------------------------
Xxx Xxxxxxxx, Vice President