EXHIBIT 10.5
LEASE
BY AND BETWEEN
SAN XXXX TECHNOLOGY PROPERTIES, LLC,
a Delaware limited liability company
as Landlord
and
SIRF TECHNOLOGY, INC.
a California corporation
as Tenant
For Premises located at
000 Xxxxxx Xxxx, Xxx Xxxx, XX
TABLE OF CONTENTS
Page
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SUMMARY OF BASIC LEASE TERMS.......................................... 1
ARTICLE 1 DEFINITIONS................................................. 1
ARTICLE 2 DEMISE, CONSTRUCTION, AND ACCEPTANCE........................ 3
ARTICLE 3 RENT........................................................ 4
ARTICLE 4 USE OF PREMISES............................................. 5
ARTICLE 5 TRADE FIXTURES AND ALTERATIONS.............................. 7
ARTICLE 6 REPAIR AND MAINTENANCE...................................... 8
ARTICLE 7 WASTE DISPOSAL AND UTILITIES................................ 10
ARTICLE 8 COMMON OPERATING EXPENSES................................... 11
ARTICLE 9 INSURANCE................................................... 13
ARTICLE 10 LIMITATION ON LANDLORD'S LIABILITY AND INDEMNITY........... 15
ARTICLE 11 DAMAGE TO PREMISES......................................... 15
ARTICLE 12 CONDEMNATION............................................... 17
ARTICLE 13 DEFAULT AND REMEDIES....................................... 18
ARTICLE 14 ASSIGNMENT AND SUBLETTING.................................. 20
ARTICLE 15 GENERAL PROVISIONS......................................... 23
SUMMARY OF BASIC LEASE TERMS
----------------------------
SECTION TERMS
(LEASE REFERENCE)
A. Lease Reference Date: September 23, 1999
(Introduction) --------------------
B. Landlord: SAN XXXX TECHNOLOGY PROPERTIES, LLC
(Introduction) -------- a Delaware limited liability company
C. Tenant: SIRF TECHNOLOGY, INC.
(Introduction) ------ a California corporation
D. Premises: That area consisting of approximately
((S) 1.21) -------- 24,666 square feet of gross leasable area
the address of which is 000 Xxxxxx Xxxx,
Xxx Xxxx, XX, within the Building as shown
on Exhibit A.
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E. Project: The land and improvements shown on
((S) 1.22) ------- Exhibit A consisting of the Building
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referred to below and another commercial
buildings containing approximately 48,700
gross leasable area.
F. Building: The building in which the Premises are
((S) 1.7) -------- located known as 000 Xxxxxx, Xxxx, Xxx
Xxxx, XX containing 48,666 square feet of
gross leasable area.
G. Tenant's Share: 50.68% of the Building (24,666/48,666)
((S) 1.29) -------------- 25.33% of the Project (24,666/97,366)
H. Tenant's Allocated Parking Stalls: Tenant shall be entitled
((S) 4.5) ---------------------------------
to use Tenant's Share the parking available to the Building,
which parking for the Building is outlined in Exhibit A
attached hereto.
I. Scheduled Commencement Date: December 1, 1999
((S) 1.26) ---------------------------
J. Lease Term: Eighty-four (84) calendar months following the
((S) 1.18) ----------
Commencement Date, plus, if the Commencement Date is other
than the first day of the calendar month, the remainder of
the calendar month in which the Commencement Date occurs. If
the Commencement Date is other than the first day of a
calendar month, the first month shall include the remainder
of the calendar month in which the Commencement Date occurs
plus the first full calendar month thereafter, and Base
Monthly Rent for such first month shall include the full
Base Monthly Rent for the first full calendar month plus
Base Monthly Rent for the partial month in which the
Commencement Date occurs prorated on a daily basis as
hereinafter provided.
K. Base Monthly Rent:
((S) 3.1) -----------------
Monthly Amount Monthly Period
-------------- --------------
1 - 12 $40,698.90
13 - 24 $41,932.20
1
25 - 36 $43,165.50
37 - 48 $44,398.80
49 - 60 $45,632.10
61 - 72 $46,865.40
73 - 84 $48,098.70
L. Prepaid Rent: $40,698.90
((S) 3.3) ------------
M. Security Deposit: $192,394.80, of which not more than
((S) 3.5) ---------------- $96,197.40 may be in the form of a letter
of Credit (as defined in Addendum No. 1
attached hereto) and the balance in the
form of cash. See Addendum No. 1 attached
hereto.
N. Permitted Use: General office use, software development,
((S) 4.1) ------------- research and development.
O. Permitted Tenant's Alterations limit: $15,000.00
((S) 5.2) ------------------------------------
P. Tenant's Liability Insurance Minimum: $3,000,000.00
((S) 9.1) ------------------------------------
Q. Landlord's Address: c/o The Xxxxxx Group
((S) 1.3) ------------------ 0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, Xxxxxxxxxx 00000
Attn: Property Manager
With a copy to: Divco West Group, LLC
000 Xxxxxxx Xxxx., Xxxxx 000
Xxx Xxxx, XX 00000
Attn.: Asset Manager
R. Tenant's Address:
((S) 1.3) ----------------
Before the Commencement Date:
Sirf Technologies, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxx Xxxxx, XX 00000
Attn.: Xxxxxx X. Xxxxxxx,
Vice President Operations
From and after the Commencement Date: At the Premises,
attn.: Xxxxxx X. Xxxxxxx,
Vice President Operations
S. Retained Real Estate Brokers: Cornish & Xxxxx representing Landlord and Xxxxx Xxxxxx of
((S) 15.13) ----------------------------
Commercial Property Services representing Tenant.
T. Lease: This Lease includes the summary of the Basic Lease Terms, the
((S) 1.17) ----- Lease, and the following exhibits and addenda which are attached
hereto and incorporated herein by this reference.
Exhibit A - Project Site Plan and Outline of the Premises
---------
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Exhibit B - Improvement Agreement
---------
Exhibit C - Acceptance Agreement
---------
Addendum No. 1
--------------
The foregoing Summary is hereby incorporated into and made a part of this
Lease. Each reference in this Lease to any term of the Summary shall mean the
respective information set forth above and shall be construed to incorporate all
of the terms provided under the particular paragraph pertaining to such
information. In the event of any conflict between the Summary and the Lease,
the Summary shall control.
LANDLORD: TENANT:
SAN XXXX TECHNOLOGY PROPERTIES, LLC By: SIRF TECHNOLOGY, INC.
a California corporation
a Delaware limited liability company
By: Diveo West Group, LLC, By: /s/ Xxxxxxx Xx
-----------------------------------
a Delaware limited liability company Name: Xxxxxxx Xx
--------------------------------
Its Agent Title: President & CEO
--------------------------------
By: /s/ Xxxxx Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------- ------------------------------------
Name: Xxxxx Xxxxxxxx Name: Xxxxxx X. Xxxxxxx
---------------------------------
Its: President Title: Vice President Operations
---------------------------------
Dated: September 27, 1999 Dated: September __, 1999
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LEASE
This Lease is dated as of the lease reference date specified in Section A
---------
of the Summary and is made by and between the party identified as Landlord in
Section B of the Summary and the party identified as Tenant in Section C of the
--------- ---------
Summary.
ARTICLE 1 DEFINITIONS
---------------------
1.1 General: Any initially capitalized term that is given a special
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meaning by this Article 1, the Summary, or by any other provision of this Lease
(including the exhibits attached hereto) shall have such meaning when used in
this Lease or any addendum or amendment hereto unless otherwise clearly
indicated by the context.
1.2 Additional Rent: The term "Additional Rent" is defined in (P)3.2.
---------------
1.3 Address for Notices: The term "Address for Notices" shall mean the
-------------------
addresses set forth in Sections Q and R of the Summary; provided, however, that
----------------
after the Commencement Date, Tenant's Address for Notices shall be the address
of the Premises.
1.4 Agents: The term "Agents" shall mean the following: (i) with respect
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to Landlord or Tenant, the agents, employees, contractors, and invitees of such
party; and (ii) in addition with respect to Tenant, Tenant's subtenants and
their respective agents, employees, contractors, and invitees.
1.5 Agreed Interest Rate: The term "Agreed Interest Rate" shall mean that
--------------------
interest rate determined as of the time it is to be applied that is equal to the
lesser of (i) 5% in excess of the discount rate established by the Federal
Reserve Bank of San Francisco as it may be adjusted from time to time, or (ii)
the maximum interest rate permitted by Law.
1.6 Base Monthly Rent: The term "Base Monthly Rent" shall mean the fixed
-----------------
monthly rent payable by Tenant pursuant to (P)3.1 which is specified in Section
-------
K of the Summary.
-
1.7 Building: The term "Building" shall mean the building in which the
--------
Premises are located which Building is identified in Section F of the Summary,
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the gross leasable area of which is referred to herein as the "Building Gross
Leasable Area."
1.8 Commencement Date: The term "Commencement Date" shall mean the earlier
-----------------
of: (i) the date Landlord offers to deliver possession of the Premises to Tenant
following "Substantial Completion" of the "Tenant Improvements" (as such terms
are defined in Exhibit B attached hereto) except for such work as Landlord is
---------
required to perform but cannot complete until Tenant performs necessary portions
of construction work it has elected or is required to do; or (ii) the date
Tenant enters into occupancy of the Premises. To the extent the Commencement
Date is delayed due to any "Tenant Delay" (as defined in Exhibit B attached
hereto), then the calculation of the date under clause (i) above shall be deemed
the date the Tenant Improvements would have been Substantially Completed (as
defined in Exhibit B) but for such Tenant Delay.
1.9 Common Area: The term "Common Area" shall mean all areas and
-----------
facilities within the Project that are not designated by Landlord for the
exclusive use of Tenant or any other lessee or other occupant of the Project,
including the parking areas, access and perimeter roads, pedestrian sidewalks,
landscaped areas, trash enclosures, recreation areas and the like.
1.10 Common Operating Expenses: The term "Common Operating Expenses" is
-------------------------
defined in (P)8.2.
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1.11 Effective Date: The term "Effective Date" shall mean the date the
--------------
last signatory to this Lease whose execution is required to make it binding on
the parties hereto shall have executed this Lease.
1.12 Event of Tenant's Default: The term "Event of Tenants Default" is
-------------------------
defined in (P)13.1.
1.13 Hazardous Materials: The terms "Hazardous Materials" and "Hazardous
-------------------
Materials Laws" are defined in (P)7.2E.
1.14 Insured and Uninsured Peril: The terms "Insured Peril" and "Uninsured
---------------------------
Peril" are defined in (P)1.2E.
1.15 Law: The term "Law" shall mean any judicial decision, statute,
---
constitution, ordinance, resolution, regulation, rule, administrative order, or
other requirement of any municipal, county, state, federal or other government
agency or authority having jurisdiction over the parties to this Lease or the
Premises, or both, in effect either at the Effective Date or any time during the
Lease Term, including, without limitation, any Hazardous Material Law (as
defined in (P)7.2E) and the Americans with Disabilities Act, 42 U.S.C. (S)(S)
12101 et. seq. and any rules, regulations, restrictions, guidelines,
-- ---
requirements or publications promulgated or published pursuant thereto.
1.16 Lease: The term "Lease" shall mean the Summary and all elements of
-----
this Lease identified in Section T of the Summary, all of which are attached
---------
hereto and incorporated herein by this reference.
1.17 Lease Term: The term "Lease Term" shall mean the term of this Lease
----------
which shall commence on the Commencement Date and continue for the period
specified in Section J of the Summary.
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1.18 Lender: The term "Lender" shall mean any beneficiary, mortgagee,
------
secured party, lessor, or other holder of any Security Instrument.
1.19 Permitted Use: The term "Permitted Use" shall mean the use specified
-------------
in Section N of the Summary.
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1.20 Premises: The term "Premises" shall mean that building area described
--------
in Section D of the Summary that is within the Building.
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1.21 Project: The term "Project" shall mean that real property and the
-------
improvements thereon which are specified in Section E of the Summary, the
---------
aggregate gross leasable area of which is referred to herein as the "Project
Gross Leasable Area."
1.22 Private Restrictions: The term "Private Restrictions" shall mean all
--------------------
recorded covenants, conditions and restrictions, private agreements, reciprocal
easement agreements, and any other recorded instruments affecting the use of the
Premises which (i) exist as of the Effective Date, or (ii) are recorded after
the Effective Date and are approved by Tenant.
1.23 Real Property Taxes: The term "Real Property Taxes" is defined in
-------------------
(P)8.3.
1.24 Scheduled Commencement Date: The term "Scheduled Commencement Date"
---------------------------
shall mean the date specified in Section I of the Summary.
---------
1.25 Security Instrument: The term "Security Instrument" shall mean any
-------------------
underlying lease, mortgage or deed of trust which now or hereafter affects the
Project, and any renewal, modification, consolidation, replacement or extension
thereof.
1.26 Summary: The term "Summary" shall mean the Summary of Basic Lease
-------
Terms executed by Landlord and Tenant that is part of this Lease.
2
1.27 Tenant's Alterations: The term "Tenant's Alterations" shall mean all
--------------------
improvements, additions, alterations, and fixtures installed in the Premises by
Tenant at its expense which are not Trade Fixtures.
1.28 Tenant's Share: The term "Tenant's Share" shall mean the percentage
--------------
obtained by dividing Tenant's gross leasable area identified in Section D of the
---------
Summary by the Building Gross Leasable Area, which as of the Effective Date is
the percentage identified in Section G of the Summary. While Tenant is
---------
obligated to pay a reduced Base Monthly Rent during the first month of the Lease
Term, no such reduction shall apply to Tenant's obligation to pay Tenant's Share
of Common Operating Expenses, Taxes and all other charges and sums under this
Lease, and Tenant's Share shall be calculated based on the total gross leasable
area of the Premises.
1.29 Trade Fixtures: The term "Trade Fixtures" shall mean (i) Tenant's
--------------
inventory, furniture, signs, and business equipment, and (ii) anything affixed
to the Premises by Tenant at its expense for purposes of trade, manufacture,
ornament or domestic use (except replacement of similar work or material
originally installed by Landlord) which can be removed without material injury
to the Premises unless such thing has, by the manner in which it is affixed,
become an integral part of the Premises.
ARTICLE 2 DEMISE, CONSTRUCTION, AND ACCEPTANCE
----------------------------------------------
2.1 Demise of Premises: Landlord hereby leases to Tenant, and Tenant
------------------
leases from Landlord, for the Lease Term upon the terms and conditions of this
Lease, the Premises for Tenant's own use in the conduct of Tenant's business
together with (i) the non-exclusive right to use the number of Tenants Allocated
Parking Stalls within the Common Area (subject to the limitations set forth in
(P)4.5), and (ii) the non-exclusive right to use the Common Area for ingress to
and egress from the Premises. Landlord reserves the use of the exterior walls,
the roof and the area beneath and above the Premises, together with the right to
install, maintain, use, and replace ducts, wires, conduits and pipes leading
through the Premises in locations which will not materially interfere with
Tenant's use of the Premises.
2.2 Commencement Date: The Scheduled Commencement Date shall be only an
-----------------
estimate of the actual Commencement Date, and the term of this Lease shall begin
on the Commencement Date (as defined in Article 1).
2.3 Construction of Improvements: Prior to the Commencement Date,
----------------------------
Landlord shall construct certain improvements that shall constitute or become
part of the Premises if required by, and then in accordance with, the terms of
Exhibit B.
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2.4 Delivery and Acceptance of Possession: If this Lease provides that
-------------------------------------
Landlord must deliver possession of the Premises to Tenant on a certain date,
then if Landlord is unable to deliver possession of the Premises to Tenant on or
before such date for any reason whatsoever, this Lease shall not be void or
voidable for a period of 60 days thereafter (subject to further extension due to
"Tenant Delays" and "Force Majeure Delays" as such terms are defined in Exhibit
B attached hereto), and Landlord shall not be liable to Tenant for any loss or
damage resulting therefrom. Tenant shall accept possession and enter into good
faith occupancy of the entire Premises and commence the operation of its
business therein within 30 days after the Commencement Date. Tenant
acknowledges that it has had an opportunity to conduct, and has conducted, such
inspections of the Premises as it deems necessary to evaluate its condition.
Except as otherwise specifically provided herein, Tenant agrees to accept
possession of the Premises in its then existing condition, "as-is," including
all patent and latent defects except as expressly provided below in this
section. Tenant's taking possession of any part of the Premises shall be deemed
to be an acceptance by Tenant of any work of improvement done by Landlord in
such part as complete and in accordance with the terms of this Lease except for
defects of which Tenant has given Landlord written notice as hereinafter
provided. At the time Landlord delivers possession of the Premises to Tenant,
Landlord and Tenant shall together execute an acceptance agreement in the form
attached as Exhibit C, appropriately completed. Landlord shall have no
---------
obligation to deliver possession, nor shall Tenant be entitled to take
occupancy, of the Premises until such acceptance agreement has been executed,
and Tenant's obligation to pay Base Monthly Rent and Additional Rent shall not
be excused or delayed because of Tenant's failure to execute such acceptance
agreement.
3
Landlord represents and warrants to its actual knowledge as of the date
hereof, without independent investigation or the imputation of knowledge from
any other party, that the plumbing, electrical and HVAC system are or will be in
good working condition as of the Commencement Date. Within sixty (60) days
after the Commencement Date, Tenant may provide Landlord with a written notice
of any electrical, plumbing or building systems for the Premises that were not
working as of the Commencement Date, and Landlord agrees to promptly repair such
system in a manner reasonably determined by Landlord; provided, however, that
Tenant's obligation to pay Base Monthly Rent, additional rent and other sums
under the Lease shall not be affected thereby. If Tenant fails to submit such a
written notice to Landlord within such sixty (60) day period, Tenant agrees that
it will conclusively be deemed to have found the Premises to be in satisfactory
condition, with all work required of Landlord completed.
2.5 Early Occupancy: If Tenant enters or permits its contractors to enter
---------------
the Premises prior to the Commencement Date with the written permission of
Landlord, it shall do so upon all of the terms of this Lease (including its
obligations regarding indemnity and insurance) except those regarding the
obligation to pay rent, which shall commence on the Commencement Date.
ARTICLE 3 RENT
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3.1 Base Monthly Rent: Commencing on the Commencement Date and continuing
-----------------
throughout the Lease Term, Tenant shall pay to Landlord the Base Monthly Rent
set forth in Section K of the Summary.
---------
3.2 Additional Rent: Commencing on the Commencement Date and continuing
---------------
throughout the Lease Term, Tenant shall pay the following as additional rent
(the "Additional Rent"): (i) any late charges or interest due Landlord pursuant
to (P)3.4; (ii) Tenant's Share of Common Operating Expenses as provided in
(P)8.1; (iii) Landlord's share of any Subrent received by Tenant upon certain
assignments and sublettings as required by (P)14.1; (iv) any legal fees and
costs due Landlord pursuant to (P)15.9; and (v) any other charges due Landlord
pursuant to this Lease.
3.3 Payment of Rent: Concurrently with the execution of this Lease by both
---------------
parties, Tenant shall pay to Landlord the amount set forth in Section L of the
---------
Summary as prepayment of rent for credit against the first installment(s) of
Base Monthly Rent. All rent required to be paid in monthly installments shall be
paid in advance on the first day of each calendar month during the Lease Term.
If Section K of the Summary provides that the Base Monthly Rent is to be
---------
increased during the Lease Term and if the date of such increase does not fall
on the first day of a calendar month, such increase shall become effective on
the first day of the next calendar month. All rent shall be paid in lawful money
of the United States, without any abatement, deduction or offset whatsoever
(except as specifically provided in (P)11.4 and (P)12.3), and without any prior
demand therefor. Rent shall be paid to Landlord at its address set forth in
Section Q of the Summary, or at such other place as Landlord may designate from
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time to time. Tenant's obligation to pay Base Monthly Rent and Tenant's Share of
Common Operating Expenses shall be prorated at the commencement and expiration
of the Lease Term.
3.4 Late Charge, Interest and Quarterly Payments:
--------------------------------------------
(a) Late Charge. Tenant acknowledges that the late payment by Tenant
-----------
of any installment of rent, or any other sum of money required to be paid by
Tenant under this Lease, will cause Landlord to incur certain costs and expenses
not contemplated under this Lease, the exact amount of such costs being
extremely difficult and impractical to fix. Such costs and expenses will
include, without limitation, attorneys' fees, administrative and collection
costs, and processing and accounting expenses and other costs and expenses
necessary and incidental thereto. If any Base Monthly Rent or Additional Rent is
not received by Landlord from Tenant within five (5) days after receipt of
written notice, Tenant shall immediately pay to Landlord a late charge equal to
5% of such delinquent rent as liquidated damages for Tenant's failure to make
timely payment; provided, however, that if Landlord has provided two notices of
a late payment or default during any calendar year, Landlord shall not be
obligated to provide any notice during the remainder of the calendar year and
such late charge shall be due if payment is not made when due without any grace
period or notice. In no event shall this provision for a late charge be deemed
4
to prevent Landlord from exercising any right or remedy available to Landlord
upon Tenant's failure to pay any rent due under this Lease in a timely fashion,
including any right to terminate this Lease pursuant to (P)13.2B.
(b) Interest. If any rent remains delinquent for a period in excess
--------
of ten (10) days then, in addition to such late charge, Tenant shall pay to
Landlord interest on any rent that is not paid when due at the Agreed Interest
Rate following the date such amount became due until paid.
(c) Quarterly Payments. If Tenant during any six (6) month period
------------------
shall be more than five (5) days delinquent in the payment of any rent or other
amount payable by Tenant hereunder on three (3) or more occasions, then,
notwithstanding anything herein to the contrary, Landlord may, by written notice
to Tenant, elect to require Tenant to pay all Base Monthly Rent and Additional
Rent quarterly in advance. Such right shall be in addition to and not in lieu of
any other right or remedy available to Landlord hereunder or at law on account
of Tenant's default hereunder.
3.5 Security Deposit: On the Effective Date, Tenant shall deposit with
----------------
Landlord the amount set forth in Section M of the Summary as security for the
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performance by Tenant of its obligations under this Lease, and not as prepayment
of rent (the "Security Deposit"). Landlord may from time to time apply such
portion of the Security Deposit as is reasonably necessary for the following
purposes: (i) to remedy any default by Tenant in the payment of rent; (ii) to
repair damage to the Premises caused by Tenant; (iii) to clean the Premises upon
termination of the Lease; and (iv) to remedy any other default of Tenant to the
extent permitted by Law and, in this regard, Tenant hereby waives any
restriction on the uses to which the Security Deposit may be put contained in
California Civil Code Section 1950.7. In the event the Security Deposit or any
portion thereof is so used, Tenant agrees to pay to Landlord promptly upon
demand an amount in cash sufficient to restore the Security Deposit to the full
original amount. Landlord shall not be deemed a trustee of the Security Deposit,
may use the Security Deposit in 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 Premises during the Lease Term,
Landlord may pay the Security Deposit to any transferee of Landlord's interest
in conformity with the provisions of California Civil Code Section 1950.7 and/or
any successor statute, in which event the transferring Landlord will be released
from all liability for the return of the Security Deposit.
3.6 Electronic Payment: Landlord shall have the right, on not less than
------------------
thirty (30) days prior written notice to Tenant (the "Electronic Payment
Notice"), to require Tenant to make subsequent payments of Monthly Base Rent and
Additional Rent due pursuant to the terms of this Lease by means of a federal
funds wire transfer or such other method of electronic funds transfer as may be
required by Landlord in its sole and absolute discretion (the "Electronic
Payment"). The Electronic Payment Notice shall set forth the proper bank ABA
number, account number and designation of the account to which such Electronic
Payment shall be made. Tenant shall promptly notify Landlord in writing of any
additional information that will be required to establish and maintain
Electronic Payment from Tenant's bank or financial institution. Landlord shall
have the right, after at least ten (10) days-prior written notice to Tenant, to
change the name of the depository for receipt of any Electronic Payment and to
discontinue payment of any sum by Electronic Payment.
ARTICLE 4 USE OF PREMISES
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4.1 Limitation on Use: Tenant shall use the Premises solely for the
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Permitted Use specified in Section N of the Summary, without the prior written
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consent of Landlord which will not be unreasonably withheld. Tenant shall not do
anything in or about the Premises which will (i) cause structural injury to the
Building, or (ii) cause damage to any part of the Building except to the extent
reasonably necessary for the installation of Tenant's Trade Fixtures and
Tenant's Alterations, and then only in a manner which has been first approved by
Landlord in writing. Tenant shall not operate any equipment within the Premises
which will (i) materially damage the Building or the Common Area, (ii) overload
existing electrical systems or other mechanical equipment servicing the
Building, (iii) impair the efficient operation of the sprinkler system or the
heating, ventilating or air conditioning ("HVAC') equipment within or servicing
the Building, or (iv) damage, overload or corrode the sanitary sewer system.
Tenant shall not attach, hang or suspend anything from the ceiling, roof, walls
or columns of the Building or set any load on the floor in excess of the load
limits for which such items are designed nor operate hard wheel forklifts within
the
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Premises. Any dust, fumes, or waste products generated by Tenant's use of the
Premises shall be contained and disposed so that they do not (i) create an
unreasonable fire or health hazard, (ii) damage the Premises, or (iii) result in
the violation of any Law. Except as approved by Landlord, Tenant shall not
change the exterior of the Building or install any equipment or antennas on or
make any penetrations of the exterior or roof of the Building. Tenant shall not
commit any waste in or about the Premises, and Tenant shall keep the Premises in
a neat, clean, attractive and orderly condition, free of any nuisances. If
Landlord designates a standard window covering for use throughout the Building,
Tenant shall use this standard window covering to cover all windows in the
Premises. Tenant shall not conduct on any portion of the Premises or the Project
any public or private auction, fire sale, going-out-of-business sale, distress
sale or other liquidation sale. Notwithstanding the foregoing, Tenant may
conduct sales and marketing of its products in the ordinary course of its
ongoing business.
4.2 Compliance with Regulations: Tenant shall not use the Premises in any
---------------------------
manner which violates any Laws or Private Restrictions which affect the
Premises. Tenant shall abide by and promptly observe and comply with all Laws
and Private Restrictions. Tenant shall not use the Premises in any manner which
will cause a cancellation of any insurance policy covering Tenant's Alternations
or any improvements installed by Landlord at its expense or which poses an
unreasonable risk of damage or injury to the Premises. Tenant shall not sell,
or permit to be kept, used, or sold in or about the Premises any article which
may be prohibited by the standard form of fire insurance policy. Tenant shall
comply with all reasonable requirements of any insurance company, insurance
underwriter, or Board of Fire Underwriters which are necessary to maintain the
insurance coverage carried by either Landlord or Tenant pursuant to this Lease.
4.3 Outside Areas: No materials, supplies, tanks or containers, equipment,
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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 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.
4.4 Signs: Tenant shall not place on any portion of the Premises any sign,
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placard, lettering in or on windows, banner, displays or other advertising or
communicative material which is visible from the exterior of the Building
without the prior written approval of Landlord. All such approved signs shall
strictly conform to all Laws, Private Restrictions, and Landlord's sign criteria
then in effect, and shall be installed at the expense of Tenant. Tenant shall
maintain such signs in good condition and repair.
4.5 Parking: Tenant is allocated and shall have the non-exclusive right to
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use not more than the number of Tenant's Allocated Parking Stalls contained
within the Project described in Section H of the Summary for its use and the use
---------
of Tenant's Agents, the location of which may be designated from time to time by
Landlord. Tenant shall not at any time use more parking spaces than the number
so allocated to Tenant or park its vehicles or the vehicles of others in any
portion of the Project not designated by Landlord as a non-exclusive parking
area. Tenant shall not have the exclusive right to use any specific parking
space. If Landlord grants to any other tenant the exclusive right to use any
particular parking space(s), Tenant shall not use such spaces. Landlord reserves
the right, after having given Tenant reasonable notice, to have any vehicles
owned by Tenant or Tenant's Agents utilizing parking spaces in excess of the
parking spaces allowed for Tenant's use to be towed away at Tenant's cost. All
trucks and delivery vehicles shall be (i) parked at the rear of the Building,
(ii) loaded and unloaded in a manner which does not interfere with the
businesses of other occupants of the Project and (iii) permitted to remain on
the Project only so long as is reasonably necessary to complete loading and
unloading. In the event Landlord elects or is required by any Law to limit or
control parking in the Project, whether by validation of parking tickets or any
other method of assessment, Tenant agrees to participate in such validation or
assessment program under such reasonable rules and regulations as are from time
to time established by Landlord.
4.6 Rules and Regulations: Landlord may from time to time promulgate
---------------------
reasonable and nondiscriminatory rules and regulations applicable to all
occupants of the Project for the care and orderly management of the Project and
the safety of its tenants and invitees. Such rules and regulations shall be
binding upon Tenant upon delivery of a copy thereof to Tenant, and Tenant agrees
to abide by such rules and regulations. If there is a conflict between the
rules and regulations and any of the provisions of this
6
Lease, the provisions of this Lease shall prevail. Landlord shall not be
responsible for the violation by any other tenant of the Project of any such
rules and regulations.
ARTICLE 5 TRADE FIXTURES AND ALTERATIONS
----------------------------------------
5.1 Trade Fixtures: Throughout the Lease Term, Tenant may provide and
--------------
install, and shall maintain in good condition, any Trade Fixtures required in
the conduct of its business in the Premises. All Trade Fixtures shall remain
Tenant's property.
5.2 Tenant's Alterations: Construction by Tenant of Tenant's Alterations
--------------------
shall be governed by the following:
A. Tenant shall not construct any Tenant's Alterations or otherwise
alter the Premises without Landlord's prior written approval, which will not be
unreasonably withheld, except if the Tenant's Alteration affects the roof,
structural portions of the Premises or Building, the Common Area or the
electrical, plumbing or HVAC systems servicing areas outside of the Premises in
which case Landlord may withhold its consent in its sole and absolute
discretion. Tenant shall be entitled, without Landlord's prior approval, to make
Tenant's Alterations (i) which do not affect the structural or exterior parts or
water tight character of the Building, and (ii) the reasonably estimated cost of
which, plus the original cost of any part of the Premises removed or materially
altered in connection with such Tenant's Alterations, together do not exceed the
Permitted Tenant Alterations Limit specified in Section O of the Summary per
---------
work of improvement. In the event Landlord's approval for any Tenant's
Alterations is required, Tenant shall not construct the Leasehold Improvement
until Landlord has approved in writing the plans and specifications therefor,
and such Tenant's Alterations shall be constructed substantially in compliance
with such approved plans and specifications by a licensed contractor first
approved by Landlord. All Tenant's Alterations constructed by Tenant shall be
constructed by a licensed contractor in accordance with all Laws using new
materials of good quality.
B. Tenant shall not commence construction of any Tenant's
Alterations until (i) all required governmental approvals and permits have been
obtained, (ii) all requirements regarding insurance imposed by this Lease have
been satisfied, (iii) Tenant has given Landlord at least five days' prior
written notice of its intention to commence such construction, and (iv) if
reasonably requested by Landlord, Tenant has obtained contingent liability and
broad form builders' risk insurance in an amount reasonably satisfactory to
Landlord if there are any perils relating to the proposed construction not
covered by insurance carried pursuant to Article 9.
C. All Tenant's Alterations shall remain the property of Tenant
during the Lease Term but shall not be altered or removed from the Premises. At
the expiration or sooner termination of the Lease Term, all Tenant's Alterations
shall be surrendered to Landlord as part of the realty and shall then become
Landlord's property, and Landlord shall have no obligation to reimburse Tenant
for all or any portion of the value or cost thereof; provided, however, that if
Landlord requires Tenant to remove any Tenant's Alterations, Tenant shall so
remove such Tenant's Alterations prior to the expiration or sooner termination
of the Lease Term. Notwithstanding the foregoing, Tenant shall not be obligated
to remove any Tenant's Alterations with respect to which the following is true:
(i) Tenant was required, or elected, to obtain the approval of Landlord to the
installation of the Tenant's Alteration in question; (ii) at the time Tenant
requested Landlord's approval, Tenant requested of Landlord in writing that
Landlord inform Tenant of whether or not Landlord would require Tenant to remove
such Tenant's Alteration at the expiration of the Lease Term; and (iii) at the
time Landlord granted its approval, it did not inform Tenant that it would
require Tenant to remove such Tenant's Alteration at the expiration of the Lease
Term.
5.3 Alterations Required by Law: Tenant shall make any alteration,
---------------------------
addition or change of any sort to the Premises that is required by any Law
because of (i) Tenant's particular use or change of use of the Premises; (ii)
Tenant's application for any permit or governmental approval; or (iii) Tenant's
construction or installation of any Tenant's Alterations or Trade Fixtures. Any
other alteration, addition, or change required by Law which is not the
responsibility of Tenant pursuant to the foregoing shall be made by Landlord
(subject to Landlord's right to reimbursement from Tenant specified in (P)5.4).
7
5.4 Amortization of Certain Capital Improvements: Tenant shall pay
--------------------------------------------
Additional Rent in the event Landlord reasonably elects or is required to make
any of the following kinds of capital improvements to the Project: (i) capital
improvements required to be constructed in order to comply with any Law
(excluding any Hazardous Materials Law) not in effect or applicable to the
Project as of the Effective Date; (ii) modification of existing or construction
of additional capital improvements or building service equipment for the purpose
of reducing the consumption of utility services or Common Operating Expenses of
the Project; (iii) replacement of capital improvements or building service
equipment existing as of the Effective Date when required because of normal wear
and tear; and (iv) restoration of any part of the Project that has been damaged
by any peril to the extent the cost thereof is not covered by insurance proceeds
actually recovered by Landlord up to a maximum amount per occurrence of 10% of
the then replacement cost of the Project. The amount of Additional Rent Tenant
is to pay with respect to each such capital improvement shall be determined as
follows:
A. All costs paid by Landlord to construct such improvements
(including financing costs) shall be amortized over the useful life of such
improvement (as reasonably determined by Landlord in accordance with generally
accepted accounting principles) with interest on the unamortized balance at the
then prevailing market rate Landlord would pay if it borrowed funds to construct
such improvements from an institutional lender, and Landlord shall inform Tenant
of the monthly amortization payment required to so amortize such costs, and
shall also provide Tenant with the information upon which such determination is
made.
B. As Additional Rent, Tenant shall pay at the same time the Base
Monthly Rent is due an amount equal to Tenant's Share of that portion of such
monthly amortization payment fairly allocable to the Building (as reasonably
determined by Landlord) for each month after such improvements are completed
until the first to occur of (i) the expiration of the Lease Term (as it may be
extended), or (ii) the end of the term over which such costs were amortized.
5.5 Mechanic's Liens: Tenant shall keep the Project free from any liens
----------------
and shall pay when due all bills arising out of any work performed, materials
furnished, or obligations incurred by Tenant or Tenants Agents relating to the
Project. If any claim of lien is recorded (except those caused by Landlord or
Landlord's Agents), Tenant shall bond against or discharge the same within 10
days after receipt of written notice that the same has been recorded against the
Project. Should any lien be filed against the Project or any action be commenced
affecting title to the Project, the party receiving notice of such lien or
action shall immediately give the other party written notice thereof.
5.6 Taxes on Tenant's Property: Tenant shall pay before delinquency any
--------------------------
and all taxes, assessments, license fees and public charges levied, assessed or
imposed against Tenant or Tenant's estate in this Lease or the property of
Tenant situated within the Premises which become due during the Lease Term. If
any tax or other charge is assessed by any governmental agency because of the
execution of this Lease, such tax shall be paid by Tenant. On demand by
Landlord, Tenant shall furnish Landlord with satisfactory evidence of these
payments.
ARTICLE 6 REPAIR AND MAINTENANCE
--------------------------------
6.1 Tenant's Obligation to Maintain: Except as otherwise provided in
-------------------------------
(P)6.2, (P)11.1, and (P) 12.3, Tenant shall be responsible for the following
during the Lease Term:
A. Tenant shall clean and maintain in good order, condition, and
repair and replace when necessary the Premises and every part thereof, through
regular inspections and servicing, including, but not limited to: (i) all
plumbing and sewage facilities (including all sinks, toilets, faucets and
drains), and all ducts, pipes, vents or other parts of the HVAC or plumbing
system; (ii) all fixtures, interior walls, floors, carpets and ceilings; (iii)
all windows, doors, entrances, plate glass, showcases and skylights (including
cleaning both interior and exterior surfaces); (iv) all electrical facilities
and all equipment (including all lighting fixtures, lamps, bulbs, tubes, fans,
vents, exhaust equipment and systems); and (v) any automatic fire extinguisher
equipment in the Premises.
B. With respect to utility facilities serving the Premises
(including electrical wiring and conduits, gas lines, water pipes, and plumbing
and sewage fixtures and pipes), Tenant shall be responsible for the
8
maintenance and repair of any such facilities which serve only the Premises,
including all such facilities that are within the walls or floor, or on the roof
of the Premises, and any part of such facility that is not within the Premises,
but only up to the point where such facilities join a main or other junction
(e.g., sewer main or electrical transformer) from which such utility services
are distributed to other parts of the Project as well as to the Premises. Tenant
shall replace any damaged or broken glass in the Premises (including all
interior and exterior doors and windows) with glass of the same kind, size and
quality. Tenant shall repair any damage to the Premises (including exterior
doors and windows) caused by vandalism or any unauthorized entry.
C. Tenant shall (i) maintain, repair and replace when necessary all
HVAC equipment which services only the Premises, and shall keep the same in good
condition through regular inspection and servicing, and (ii) maintain
continuously throughout the Lease Term a service contract for the maintenance of
all such HVAC equipment with a licensed HVAC repair and maintenance contractor
approved by Landlord, which contract provides for the periodic inspection and
servicing of the HVAC equipment at least once every three months during the
Lease Term. Notwithstanding the foregoing, Landlord may elect at any time to
assume responsibility for the maintenance, repair and replacement of such HVAC
equipment which serves only the Premises. Tenant shall maintain continuously
throughout the Lease Term a service contract for the washing of all windows
(both interior and exterior surfaces) in the Premises with a contractor approved
by Landlord, which contract provides for the periodic washing of all such
windows at least once every three months (or more frequently to the extent
necessary) during the Lease Term. Tenant shall furnish Landlord with copies of
all such service contracts, which shall provide that they may not be canceled or
changed without at least 30 days' prior written notice to Landlord.
D. All repairs and replacements required of Tenant shall be promptly
made with new materials of like kind and quality. If the work affects the
structural parts of the Building or if the estimated cost of any item of repair
or replacement is in excess of the Permitted Tenant's Alterations Limit, then
Tenant shall first obtain Landlord's written approval of the scope of the work,
plans therefor, materials to be used, and the contractor.
6.2 Landlord's Obligation to Maintain: Landlord shall repair, maintain and
---------------------------------
operate the Common Area and repair and maintain the roof, exterior and
structural parts of the building(s) located on the Project so that the same are
kept in good order and repair. If there is central HVAC or other building
service equipment and/or utility facilities serving portions of the Common Area
and/or both the Premises and other parts of the Building, Landlord shall
maintain and operate (and replace when necessary) such equipment. Landlord shall
not be responsible for repairs required by an accident, fire or other peril or
for damage caused to any part of the Project by any act or omission of Tenant or
Tenant's Agents except as otherwise required by Article 11. Landlord may engage
contractors of its choice to perform the obligations required of it by this
Article, and the necessity of any expenditure to perform such obligations shall
be at the sole discretion of Landlord.
6.3 Control of Common Area: Landlord shall at all times have exclusive
----------------------
control of the Common Area. Landlord shall have the right, without the same
constituting an actual or constructive eviction and without entitling Tenant to
any abatement of rent, to: (i) close any part of the Common Area 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 the Common Area to perform maintenance or for any other reason deemed
sufficient by Landlord; (iii) change the shape, size, location and extent of the
Common Area; (iv) eliminate from or add to the Project any land or improvement,
including multi-deck parking structures; (v) make changes to the Common Area
including, without limitation, changes in the location of driveways, entrances,
passageways, doors and doorways, elevators, stairs, restrooms, exits, parking
spaces, parking areas, sidewalks or the direction of the flow of traffic and the
site of the Common Area; (vi) remove unauthorized persons from the Project;
and/or (vii) change the name or address of the Building or Project. Tenant shall
keep the Common Area clear of all obstructions created or permitted by Tenant.
If in the opinion of Landlord unauthorized persons are using any of the Common
Area by reason of the presence of Tenant in the Building, Tenant, upon demand of
Landlord, shall restrain such unauthorized use by appropriate proceedings. In
exercising any such rights regarding the Common Area, (i) Landlord shall make a
reasonable effort to minimize any disruption to Tenant's business, and (ii)
Landlord shall not exercise its rights to control the Common Area in a manner
that would materially interfere with Tenant's use of the Premises without first
obtaining Tenant's consent. Landlord shall have no obligation to provide guard
services or other security measures for the benefit of the Project. Tenant
assumes all responsibility for the protection of Tenant and Tenant's Agents
9
from acts of third parties; provided, however, that nothing contained herein
shall prevent Landlord, at its sole option, from providing security measures for
the Project.
ARTICLE 7 WASTE DISPOSAL AND UTILITIES
--------------------------------------
7.1 Waste Disposal: Tenant shall store its waste either inside the
--------------
Premises or within outside trash enclosures that are fully fenced and screened
in compliance with all Private Restrictions, and designed for such purpose. All
entrances to such outside trash enclosures shall be kept closed, and waste shall
be stored in such manner as not to be visible from the exterior of such outside
enclosures. Tenant shall cause all of its waste to be regularly removed from the
Premises at Tenant's sole cost. Tenant shall keep all fire corridors and
mechanical equipment rooms in the Premises free and clear of all obstructions at
all times.
7.2 Hazardous Materials: Landlord and Tenant agree as follows with respect
-------------------
to the existence or use of Hazardous Materials on the Project:
A. Any handling, transportation, storage, treatment, disposal or use
of Hazardous Materials by Tenant and Tenant's Agents after the Effective Date in
or about the Project 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 liabilities, losses, claims, damages, lost profits, consequential damages,
interest, penalties, fines, monetary sanctions, attorneys' fees, experts' fees,
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
(collectively, "Hazardous Material Activity") on or about the Project by Tenant
or Tenant's Agents after the Effective Date. The foregoing indemnity does not
apply to any Hazardous Material Activity by Landlord or any third parties, other
than Tenant or Tenant's Agents. Landlord agrees during the Lease Term that
Landlord will not engage in any Hazardous Material Activity in violation of any
Hazardous Materials Laws.
B. If the presence of Hazardous Materials on the Project caused or
permitted by Tenant or Tenant's Agents after the Effective Date results in
contamination or deterioration of water or soil resulting in a level of
contamination greater than the levels established as acceptable by any
governmental agency having jurisdiction over such contamination, then Tenant
shall promptly take any and all action necessary to investigate and remediate
such contamination if required by Law or as a condition to the issuance or
continuing effectiveness of any governmental approval which relates to the use
of the Project or any part thereof. Tenant shall further be responsible for, and
shall defend, indemnify and hold Landlord and its agents harmless from and
against all claims, costs and liabilities, including attorneys' fees and costs,
arising out of or in connection with any investigation and remediation required
hereunder to return the Project to its 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
Project, and (ii) any contamination of the Project by Hazardous Materials which
constitutes a violation of any Hazardous Materials Law. Tenant may use small
quantities of office supplies and household chemicals such as adhesives,
lubricants, and cleaning fluids in order to conduct its business at the Premises
and such other Hazardous Materials as are necessary for the operation of
Tenant's business of which Landlord receives notice prior to such Hazardous
Materials being brought onto the Premises and which Landlord consents in writing
may be brought onto the Premises. 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
Project, the nature of such use, and the manner of storage and disposal.
D. Landlord may cause testing xxxxx to be installed on the Project,
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
10
paid by Tenant if such tests disclose the existence of facts which give rise to
liability of Tenant pursuant to its indemnity given in (P)7.2A and/or (P)7.2B.
E. As used herein, the term "Hazardous Material," means any
hazardous or toxic substance, material or waste which is or becomes regulated by
any local governmental authority, the State of California or the United States
Government. The term "Hazardous Material," includes, without limitation,
petroleum products, asbestos, PCB's, and any material or substance which is (i)
listed under Article 9 or defined as hazardous or extremely hazardous pursuant
to Article 11 of Title 22 of the California Administrative Code, Division 4,
Chapter 20, (ii) defined as a "hazardous waste" pursuant to Section 1004 of the
Federal Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq. (42
U.S.C. 6903), or (iii) defined as a "hazardous substance" pursuant to Section
101 of the Comprehensive Environmental Response; Compensation and Liability Act,
42 U.S.C. 9601 et seq. (42 U.S.C. 960 1). As used herein, the term "Hazardous
Material Law" shall mean any statute, law, ordinance, or regulation of any
governmental body or agency (including the U.S. Environmental Protection Agency,
the California Regional Water Quality Control Board, and the California
Department of Health Services) which regulates the use, storage, release or
disposal of any Hazardous Material.
F. The obligations of Landlord and Tenant under this (P)7.2 shall
survive the expiration or earlier termination of the Lease Term. The rights and
obligations of Landlord and Tenant with respect to issues relating to Hazardous
Materials are exclusively established by this (P)7.2. In the event of any
inconsistency between any other part of this Lease and this (P)7.2, the terms of
this (P)7.2 shall control.
7.3 Utilities: Tenant shall promptly pay, as the same become due, all
---------
charges for water, gas, electricity, telephone, sewer service, waste pick-up and
any other utilities, materials or services furnished directly to or used by
Tenant on or about the Premises during the Lease Term, including, without
limitation, (i) meter, use and/or connection fees, hook-up fees, or standby fee
(excluding any connection fees or hook-up fees which relate to making the
existing electrical, gas, and water service available to the Premises as of the
Commencement Date), and (ii) penalties for discontinued or interrupted service.
If any utility service is not separately metered to the Premises, then Tenant
shall pay its pro rata share of the cost of such utility service with all others
served by the service not separately metered. However, if Landlord determines
that Tenant is using a disproportionate amount of any utility service not
separately metered, then Landlord at its election may (i) periodically charge
Tenant, as Additional Rent, a sum equal to Landlord's reasonable estimate of the
cost of Tenant's excess use of such utility service, or (ii) install a separate
meter (at Tenant's expense) to measure the utility service supplied to the
Premises.
7.4 Compliance with Governmental Regulations: Landlord and Tenant shall
----------------------------------------
comply with all rules, regulations and requirements promulgated by national,
state or local governmental agencies or utility suppliers concerning the use of
utility services, including any rationing, limitation or other control. Tenant
shall not be entitled to terminate this Lease nor to any abatement in rent by
reason of such compliance.
ARTICLE 8 COMMON OPERATING EXPENSES
-----------------------------------
8.1 Tenant's Obligation to Reimburse: As Additional Rent, Tenant shall pay
--------------------------------
Tenant's Share (specified in Section G of the Summary) of all Common Operating
---------
Expenses; provided, however, if the Project contains more than one building,
then Tenant shall pay Tenant's Share of all Common Operating Expenses fairly
allocable to the Building, including (i) all Common Operating Expenses paid with
respect to the maintenance, repair, replacement and use of the Building, and
(ii) a proportionate share (based on the Building Gross Leasable Area as a
percentage of the Project Gross Leasable Area) of all Common Operating Expenses
which relate to the Project in general are not fairly allocable to any one
building that is part of the Project. Tenant shall pay such share of the actual
Common Operating Expenses incurred or paid by Landlord but not theretofore
billed to Tenant within 10 days after receipt of a written xxxx therefor from
Landlord, on such periodic basis as Landlord shall designate, but in no event
more frequently than once a month. Alternatively, Landlord may from time to time
require that Tenant pay Tenant's Share of Common Operating Expenses in advance
in estimated monthly installments, in accordance with the following: (i)
Landlord shall deliver to Tenant Landlord's reasonable estimate of the Common
Operating expenses it anticipates will be paid or incurred for the Landlord's
fiscal year in question; (ii) during such Landlord's fiscal year Tenant shall
pay such share of the estimated Common Operating Expenses in advance in monthly
installments as
11
required by Landlord due with the installments of Base Monthly Rent; and (iii)
within 90 days after the end of each Landlord's fiscal year, Landlord shall
furnish to Tenant a statement in reasonable detail of the actual Common
Operating Expenses paid or incurred by Landlord during the just ended Landlord's
fiscal year and thereupon there shall be an adjustment between Landlord and
Tenant, with payment to Landlord or credit by Landlord against the next
installment of Base Monthly Rent, as the case may require, within 10 days after
delivery by Landlord to Tenant of said statement, so that Landlord shall receive
the entire amount of Tenant's Share of all Common Operating Expenses for such
Landlord's fiscal year and no more. Tenant shall have the right at its expense,
exercisable upon reasonable prior written notice to Landlord, to inspect at
Landlord's office during normal business hours Landlord's books and records as
they relate to Common Operating Expenses. Such inspection must be within 30
days of Tenant's receipt of Landlord's annual statement for the same, and shall
be limited to verification of the charges contained in such statement. Tenant
may not withhold payment of such xxxx pending completion of such inspection.
8.2 Common Operating Expenses Defined: The term "Common Operating
---------------------------------
Expenses" shall mean the following:
A. All costs and expenses paid or incurred by Landlord in doing the
following (including payments to independent contractors providing services
related to the performance of the following): (i) maintaining, cleaning,
repairing and resurfacing the roof (including repair of leaks) and the exterior
surfaces (including painting) of all buildings located on the Project; (ii)
maintenance of the liability, fire, property damage, earthquake and other
insurance covering the Project carried by Landlord pursuant to (P)9.2 (including
the prepayment of premiums for coverage of up to one year); (iii) maintaining,
repairing, operating and replacing when necessary HVAC equipment, utility
facilities and other building service equipment; (iv) providing utilities to the
Common Area (including lighting, trash removal and water for landscaping
irrigation); (v) complying with all applicable Laws and Private Restrictions;
(vi) operating, maintaining, repairing, cleaning, painting, restriping and
resurfacing the Common Area; (vii) replacement or installation of lighting
fixtures, directional or other signs and signals, irrigation systems, trees,
shrubs, ground cover and other plant materials, and all landscaping in the
Common Area; and (viii) providing security (provided, however, that Landlord
shall not be obligated to provide security and if it does, Landlord may
discontinue such service at any time and in any event Landlord shall not be
responsible for any act or omission of any security personnel); and (ix) capital
improvements as provided in (P)5.4 hereof;
B. The following costs: (i) Real Property Taxes as defined in
(P)8.3; (ii) the amount of any "deductible" paid by Landlord with respect to
damage caused by any Insured Peril; (iii) the cost to repair damage caused by an
Uninsured Peril up to a maximum amount in any 12 month period equal to 2% of the
replacement cost of the buildings or other improvements damaged; and (iv) that
portion of all compensation (including benefits and premiums for workers'
compensation and other insurance) paid to or on behalf of employees of Landlord
but only to the extent they are involved in the performance of the work
described by (P)8.2A that is fairly allocable to the Project;
C. Reasonable and customary fees for management services rendered by
either Landlord or a third party manager engaged by Landlord (which may be a
party affiliated with Landlord), and the parties agree that the total amount
charged for management services and included in Tenant's Share of Common
Operating Expenses shall be 5% of the Base Monthly Rent which is reasonable and
customary.
D. All additional costs and expenses incurred by Landlord with
respect to the operation, protection, maintenance, repair and replacement of the
Project which would be considered a current expense (and not a capital
expenditure) pursuant to generally accepted accounting principles; provided,
however, that Common Operating Expenses shall not include any of the following:
(i) payments on any loans or ground leases affecting the Project; (ii)
depreciation of any buildings or any major systems of building service equipment
within the Project; (iii) leasing commissions; (iv) the cost of tenant
improvements installed for the exclusive use of other tenants of the Project;
and (v) any cost incurred in complying with Hazardous Materials Laws, which
subject is governed exclusively by (P)7.2.
8.3 Real Property Taxes Defined: The term "Real Property Taxes" shall mean
---------------------------
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 existing or future
general or special assessments for
12
public improvements, services or benefits, and any increases resulting from
reassessments resulting from a change in ownership, new construction, or any
other cause), 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 against, or with respect to the value,
occupancy or use of all or any portion of the Project (as now constructed or as
may at any time hereafter be constructed, altered, or otherwise changed) or
Landlord's interest therein, the fixtures, equipment and other property of
Landlord, real or personal, that are an integral part of and located on the
Project, the gross receipts, income, or rentals from the Project, or the use of
parking areas, public utilities, or energy within the Project or Landlord's
business of leasing the Project. If at any time during the Lease Term the method
of taxation or assessment of the Project prevailing as of the Effective Date
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 or additional tax or charge (i) on the
value, 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, on
Landlord's business of leasing the Project, or 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 term "Real Property
Taxes" for purposes of this Lease. If any Real Property Tax is 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 term "Real Property Taxes". Notwithstanding the foregoing,
the term "Real Property Taxes" shall not include estate, inheritance, transfer,
gift or franchise taxes of Landlord or the federal or state net income tax
imposed on Landlord's income from all sources.
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
the following:
(1) Commercial general liability insurance, including property
damage, against liability for personal injury, bodily injury, death and damage
to property occurring in or about, or resulting from an occurrence in or about,
the Premises with combined single limit coverage of not less than the amount of
Tenant's Liability Insurance Minimum specified in Section P of the Summary,
---------
which insurance shall contain a "contractual liability" endorsement insuring
Tenant's performance of Tenant's obligation to indemnify Landlord contained in
(P)10.3;
(2) Fire and property damage insurance in so-called "all risk"
form insuring Tenant's Trade Fixtures and Tenant's Alterations for the full
actual replacement cost thereof;
(3) Business interruption insurance with limits of liability
representing at least approximately six months of income, business auto
liability covering owned, non-owned and hired vehicles with a limit of not less
than $1,000,000 per accident, insurance protecting against liability under
workers' compensation laws with limits at least as required by statute,
insurance for all plate glass in the Premises, and such other insurance that is
either (i) required by any Lender, or (ii) reasonably required by Landlord and
customarily carried by tenants of similar property in similar businesses.
B. Where applicable and required by Landlord, each policy of
insurance required to be carried by Tenant pursuant to this (P)9.1: (i) shall
name Landlord and such other parties in interest as Landlord reasonably
designates as additional insured; (ii) shall be primary insurance which provides
that the insurer shall be liable for the full amount of the loss up to and
including the total amount of liability set forth in the declarations without
the right of contribution from any other insurance coverage of Landlord; (iii)
shall be in a form reasonably satisfactory to Landlord; (iv) shall be carried
with companies reasonably acceptable to Landlord; (v) shall provide that such
policy shall not be subject to cancellation, lapse or change except after at
least 30 days prior written notice to Landlord so long as such provision of 30
days notice is reasonably obtainable, but in any event not less than 10 days
prior written notice; (vi) shall not have a "deductible" in excess of such
amount as is approved by Landlord; (vii) shall contain a cross liability
endorsement; and (viii) shall contain a "severability" clause. If Tenant has in
full
13
force and effect a blanket policy of liability insurance with the same coverage
for the Premises as described above, as well as other coverage of other premises
and properties of Tenant, or in which Tenant has some interest, such blanket
insurance shall satisfy the requirements of this (P)19.1.
C. A copy of each paid-up policy evidencing the insurance required
to be carried by Tenant pursuant to this (P)9.1 (appropriately authenticated by
the insurer) or a certificate of the insurer, certifying that such policy has
been issued, providing the coverage required by this (P)9.1, and containing the
provisions specified herein, shall be delivered to Landlord prior to the time
Tenant or any of its Agents enters the Premises and upon renewal of such
policies, but not less than 5 days prior to the expiration of the term of such
coverage. Landlord may, at any reasonable time, and from time to time, inspect
and/or copy any and all insurance policies required to be procured by Tenant
pursuant to this (P)9.1. If any Lender or insurance advisor reasonably
determines at any time that the amount of coverage required for any policy of
insurance Tenant is to obtain pursuant to this (P)9.1 is not adequate, then
Tenant shall increase such coverage for such insurance to such amount as such
Lender or insurance advisor reasonably deems adequate, not to exceed the level
of coverage for such insurance commonly carried by comparable businesses
similarly situated.
9.2 Landlord's Insurance: Landlord shall have the following obligations
--------------------
and options regarding insurance:
A. Landlord shall maintain a policy or policies of fire and property
damage insurance in so-called "all risk" form insuring Landlord (and such others
as Landlord may designate) against loss of rents for a period of not less than
12 months and from physical damage to the Project with coverage of not less than
the full replacement cost thereof. Landlord may so insure the Project
separately, or may insure the Project with other property owned by Landlord
which Landlord elects to insure together under the same policy or policies.
Landlord shall have the right, but not the obligation, in its sole and absolute
discretion, to obtain insurance for such additional perils that Landlord deems
appropriate, including, without limitation, coverage for damage by earthquake
and/or flood. All such coverage shall contain "deductibles" which Landlord deems
appropriate, which in the case of earthquake and flood insurance, may be up to
10% of the replacement value of the property insured or such higher amount as is
then commercially reasonable. Landlord shall not be required to cause such
insurance to cover any-Trade Fixtures or Tenant's Alterations of Tenant.
B. Landlord may maintain a policy or policies of 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 or resulting from an occurrence in, on or about the
Project, with combined single limit coverage in such amount as Landlord from
time to time determines is reasonably necessary for its protection.
C. Tenant's Obligation to Reimburse: If Landlord's insurance rates
--------------------------------
for the Building are increased at any time during the Lease Term as a result of
the nature of Tenant's use of the Premises, Tenant shall reimburse Landlord for
the full amount of such increase immediately upon receipt of a xxxx from
Landlord therefor.
9.3 Release and Waiver of Subrogation: The parties hereto release each
---------------------------------
other, and their respective agents and employees, from any liability for injury
to any person or damage to property that is caused by or results from any risk
insured against under any valid and collectible insurance policy carried by
either of the parties which contains a waiver of subrogation by the insurer and
is in force at the time of such injury or damage; subject to the following
limitations: (i) the foregoing provision shall not apply to the commercial
general liability insurance described by subparagraphs (P)9.1A and (P)9.2B; (ii)
such release shall apply to liability resulting from any risk insured against or
covered by self-insurance maintained or provided by Tenant to satisfy the
requirements of (P)9.1 to the extent permitted by this Lease; and (iii) Tenant
shall not be released from any such liability to the extent any damages
resulting from such injury or damage are not covered by the recovery obtained by
Landlord from such insurance, but only if the insurance in question permits such
partial release in connection with obtaining a waiver of subrogation from the
insurer. This release shall be in effect only so long as the applicable
insurance policy contains a clause to the effect that this release shall not
affect the right of the insured to recover under such policy. Each party shall
use reasonable efforts to cause each insurance policy obtained by it to provide
that the insurer waives all
14
right of recovery by way of subrogation against the other party and its agents
and employees in connection with any injury or damage covered by such policy.
However, if any insurance policy cannot be obtained with such a waiver of
subrogation, or if such waiver of subrogation is only available at additional
cost and the party for whose benefit the waiver is to be obtained does not pay
such additional cost, then the party obtaining such insurance shall notify the
other party of that fact and thereupon shall be relieved of the obligation to
obtain such waiver of subrogation rights from the insurer with respect to the
particular insurance involved.
ARTICLE 10 LIMITATION ON LANDLORD'S LIABILITY AND INDEMNITY
-----------------------------------------------------------
10.1 Limitation on Landlord's Liability: Landlord shall not be liable to
----------------------------------
Tenant, nor shall Tenant be entitled to terminate this Lease or to any abatement
of rent (except as expressly provided otherwise herein), for any injury to
Tenant or Tenant's Agents, damage to the property of Tenant or Tenant's Agents,
or loss to Tenant's business resulting from any cause, including without
limitation any: (i) failure, interruption or installation of any HVAC or other
utility system or service; (ii) failure to furnish or delay in furnishing any
utilities or services when such failure or delay is caused by fire or other
peril, the elements, labor disturbances of any character, or any other accidents
or other conditions beyond the reasonable control of Landlord; (iii) limitation,
curtailment, rationing or restriction on the use of water or electricity, gas or
any other form of energy or any services or utility serving the Project; (iv)
vandalism or forcible entry by unauthorized persons or the criminal act of any
person; or (v) penetration of water into or onto any portion of the Premises or
the Building through roof leaks or otherwise. Notwithstanding the foregoing but
subject to (P)9.3, Landlord shall be liable for any such injury, damage or loss
which is proximately caused by Landlord's willful misconduct or active
negligence.
10.2 Limitation on Tenant's Recourse: If Landlord is a corporation, trust,
-------------------------------
partnership, joint venture, unincorporated association or other form of business
entity: (i) the obligations of Landlord shall not constitute personal
obligations of the officers, directors, trustees, partners, joint venturers,
members, owners, stockholders, or other principals or representatives of such
business entity; and (ii) Tenant shall not have recourse to the assets of such
officers, directors, trustees, partners, joint venturers, members, owners,
stockholders, principals or representatives except to the extent of their
interest in the Project. Tenant shall have recourse only to the interest of
Landlord in the Project for the satisfaction of the obligations of Landlord and
shall not have recourse to any other assets of Landlord for the satisfaction of
such obligations.
10.3 Indemnification of Landlord: Tenant shall hold harmless, indemnify
---------------------------
and defend Landlord, and its employees, agents and contractors, with competent
counsel reasonably satisfactory to Landlord (and Landlord agrees to accept
counsel that any insurer requires be used), from all liability, penalties,
losses, damages, costs, expenses, causes of action, claims and/or judgments
arising by reason of any death, bodily injury, personal injury or property
damage resulting from (i) any cause or causes whatsoever (other than the willful
misconduct or active negligence of Landlord) occurring in or about or resulting
from an occurrence in or about the Premises during the Lease Term, (ii) the
negligence or willful misconduct of Tenant or its agents, employees and
contractors, wherever the same may occur, or (iii) an Event of Tenant's Default.
The provisions of this (P)10.3 shall survive the expiration or sooner
termination of this Lease and shall be subject to the release and waiver of
subrogation provisions of section 9.3.
10.4 Indemnification of Tenant. Landlord shall hold harmless, indemnify
-------------------------
and defend Tenant, from all liability, penalties, losses, damages, costs,
expenses, causes of action, claims and/or judgments arising by reason of any
death, bodily injury, personal injury or property damage resulting from the
willful misconduct or active negligence of Landlord occurring in or about the
Common Areas. The provisions of this (P)10.4 shall survive the expiration or
sooner termination of this Lease. and shall be subject to the release and waiver
of subrogation provisions of section 9.3.
ARTICLE 11 DAMAGE TO PREMISES
-----------------------------
11.1 Landlord's Duty to Restore: If the Premises are damaged by any peril
--------------------------
after the Effective Date, Landlord shall restore the Premises unless the Lease
is terminated by Landlord pursuant to (P)11.2 or by Tenant pursuant to (P)11.3.
All insurance proceeds available from the fire and property damage insurance
carried by
15
Landlord pursuant to (P)9.2 shall be paid to and become the property of
Landlord. If this Lease is terminated pursuant to either (P)11.2 or (P)11.3,
then all insurance proceeds available from insurance carried by Tenant which
covers 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. 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 Premises, to the extent then allowed by
Law, to substantially the same condition in which the Premises were immediately
prior to such damage. Landlord's obligation to restore shall be limited to the
Premises and interior improvements constructed by Landlord as they existed as of
the Commencement Date, excluding any Tenant's Alterations, Trade Fixtures and/or
personal property constructed or installed by Tenant in the Premises. Tenant
shall, if practical, forthwith replace or fully repair substantially all
Tenant's Alterations and Trade Fixtures installed by Tenant and existing at the
time of such damage or destruction, and the insurance proceeds received by
Tenant from the insurance carried by it pursuant to (P)9.1A(2) shall be used for
such purpose.
11.2 Landlord's Right to Terminate: Landlord shall have the right to
-----------------------------
terminate this Lease in the event any of the following occurs, which right may
be exercised only by delivery to Tenant of a written notice of election to
terminate within 30 days after the date of such damage:
A. Either the Project or the Building is damaged by an Insured
Peril to such an extent that the estimated cost to restore exceeds 33% of the
then actual replacement cost thereof;
B. Either the Project or the Building is damaged by an Uninsured
Peril to such an extent that the estimated cost to restore exceeds 2% of the
then actual replacement cost thereof; provided, however, that Landlord may not
terminate this Lease pursuant to this (P)11.2B if one or more tenants of the
Project agree in writing to pay the amount by which the cost to restore the
damage exceeds such amount and subsequently deposit such amount with Landlord
within 30 days after Landlord has notified Tenant of its election to terminate
this Lease;
C. The Premises are damaged by any peril within 12 months of the
last day of the Lease Term to such an extent that the estimated cost to restore
equals or exceeds an amount equal to six times the Base Monthly Rent then due;
provided, however, that Landlord may not terminate this Lease pursuant to this
(P)11.2C if Tenant, at the time of such damage, has a then valid express written
option to extend the Lease Term and Tenant exercises such option to extend the
Lease Term within 15 days following the date of such damage; or
D. Either the Project or the Building is damaged by any peril and,
because of the Laws then in force, (i) cannot be restored at reasonable cost to
substantially the same condition in which it was prior to such damage, or (ii)
cannot be used for the same use being made thereof before such damage if
restored as required by this Article.
E. As used herein, the following terms shall have the following
meanings: (i) the term "Insured Peril" shall mean a peril actually insured
against for which the insurance proceeds actually received by Landlord are
sufficient (except for any "deductible" amount specified by such insurance) to
restore the Project under then existing building codes to the condition existing
immediately prior to the damage; and (ii) the term "Uninsured Peril" shall mean
any peril which is not an Insured Peril. Notwithstanding the foregoing, if the
"deductible" for earthquake or flood insurance exceeds 2% of the replacement
cost of the improvements insured, such peril shall be deemed an "Uninsured
Peril."
11.3 Tenant's Right to Terminate: If the 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 (P)11.2, 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 completed. Tenant shall have the right to terminate
this Lease in the event any of the following occurs, which right may be
exercised only by delivery to Landlord of a written notice of election to
terminate within 7 days after Tenant receives from Landlord the estimate of the
time needed to complete such restoration.
16
A. The Premises are damaged by any peril and, in the reasonable
opinion of Landlord's architect or construction consultant, the restoration of
the Premises cannot be substantially completed within 160 days after the date of
such damage; or
B. The Premises are damaged by any peril within 12 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 Premises cannot be
substantially completed within 90 days after the date of such damage and such
damage renders unusable more than 20% of the Premises.
11.4 Abatement of Rent: In the event of damage to the Premises which does
-----------------
not result in the termination of this Lease, the Base Monthly Rent and the
Additional Rent shall be temporarily abated during the period of restoration in
proportion to the degree to which Tenant's use of the Premises is impaired by
such damage. Tenant shall not be entitled to any compensation or damages from
Landlord for loss of Tenant's business or property or for any inconvenience or
annoyance caused by such damage or restoration. Tenant hereby waives the
provisions of California Civil Code Sections 1932(2) and 1933(4) and the
provisions of any similar law hereinafter enacted.
ARTICLE 12 CONDEMNATION
-----------------------
12.1 Landlord's Termination Right: Landlord shall have the right to
----------------------------
terminate this Lease if, as a result of a taking by means of the exercise of the
power of eminent domain (including a voluntary sale or transfer by Landlord to a
condemnor under threat of condemnation), (i) all or any part of the Premises is
so taken, (ii) more than 10% of the Building Leasable Area is so taken, or (iii)
more than 50% of the Common Area is so taken. Any such right to terminate by
Landlord must be exercised within a reasonable period of time, to be effective
as of the date possession is taken by the condemnor.
12.2 Tenant's Termination Right: Tenant shall have the right to terminate
--------------------------
this Lease if, as a result of any taking by means of the exercise of the power
of eminent domain (including any voluntary sale or transfer by Landlord to any
condemnor under threat of condemnation), (i) 10% or more of the Premises is so
taken and that part of the Premises that remains cannot be restored within a
reasonable period of time and thereby made reasonably suitable for the continued
operation of the Tenant's business, or (ii) there is a taking affecting the
Common Area and, as a result of such taking, Landlord cannot provide parking
spaces within reasonable walking distance of the Premises equal in number to at
least 80% of the number of spaces allocated to Tenant by (P)2.1, whether by
rearrangement of the remaining parking areas in the Common Area (including
construction of multi-deck parking structures or restriping for compact cars
where permitted by Law) or by alternative parking facilities on other land.
Tenant must exercise such right within a reasonable period of time, to be
effective on the date that possession of that portion of the Premises or Common
Area that is condemned is taken by the condemnor.
12.3 Restoration and Abatement of Rent: If any part of the Premises or the
---------------------------------
Common Area is taken by condemnation and this Lease is not terminated, then
Landlord shall restore the remaining portion of the Premises and Common Area and
interior improvements constructed by Landlord as they existed as of the
Commencement Date, excluding any Tenant's Alterations, Trade Fixtures and/or
personal property constructed or installed by Tenant. Thereafter, except in the
case of a temporary taking, as of the date possession is taken the Base Monthly
Rent and Additional Rent shall be reduced in the same proportion that the floor
area of that part of the Premises so taken (less any addition thereto by reason
of any reconstruction) bears to the original floor area of the Premises.
12.4 Temporary Taking: If any portion of the Premises is temporarily taken
----------------
for one year or less, this Lease shall remain in effect (subject to rent
abatement). If any portion of the Premises is temporarily taken by condemnation
for a period which exceeds one year or which extends beyond the natural
expiration of the Lease Term, and such taking materially and adversely affects
Tenant's ability to use the Premises for the Permitted Use, then Tenant shall
have the right to terminate this Lease, effective on the date possession is
taken by the condemnor.
12.5 Division of Condemnation Award: Any award made as a result of any
------------------------------
condemnation of the Premises or the Common Area 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
17
condemnation award that is made directly to Tenant for the following: (i) for
the taking of personal property 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 xxxxx hereby waives the provisions of California Code of Civil Procedure
Section 1265.130 and the provisions of any similar law hereinafter enacted
allowing either party to petition the Superior Court to terminate this Lease in
the event of a partial taking of the Premises.
ARTICLE 13 DEFAULT AND REMEDIES
-------------------------------
13.1 Events of Tenant's Default: Tenant shall be in default of its
--------------------------
obligations under this Lease if any of the following events occurs (an "Event of
Tenant's Default"):
A. Tenant shall have failed to pay Base Monthly Rent or Additional
Rent when due, and such failure is not cured within 5 business days after
delivery of written notice from Landlord specifying such failure to pay; 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, and Tenant shall have failed to cure such breach within 30
days after written notice from Landlord specifying the nature of such breach
where such breach could reasonably be cured within said 30 day period, or if
such breach could not be reasonably cured within said 30 day period, Tenant
shall have failed to commence such cure within said 30 day period and thereafter
continue with due diligence to prosecute such cure to completion within such
time period as is reasonably needed but not to exceed 90 days from the date of
Landlord's notice; or
C. Tenant shall have sublet the Premises or assigned its interest
in the Lease in violation of the provisions contained in Article 14; or
D. Tenant shall have abandoned the Premises or left the Premises
substantially vacant; or
E. The occurrence of the following: (i) the making by Tenant of any
general arrangements or assignments for the benefit of creditors; (ii) Tenant
becomes a "debtor" as defined in 11 USC (S) 101 or any successor statute thereto
(unless, in the case of a petition filed against Tenant, the same is dismissed
within 60 days); (iii) the appointment of a trustee or receiver to take
possession of substantially all of Tenant's assets located at the Premises or of
Tenant's interest in this Lease, where possession is not restored to Tenant
within 30 days; or (iv) the attachment, execution or other judicial seizure of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where such seizure is not discharged within 30 days;
provided, however, in the event that any provision of this Section 13.1E is
contrary to any applicable Law, such provision shall be of no force or effect;
or
F. Tenant shall have failed to deliver documents required of it
pursuant to (P)15.4 or (P)15.6 within the time periods specified therein.
Any written notice of default sent by Landlord to Tenant shall be in lieu
of, and not in addition to, any termination notice required under applicable
statutory or regulatory provisions (and no further notice shall be required
should Landlord elect to terminate this Lease as set forth below).
13.2 Landlord's Remedies: If an Event of Tenant's Default occurs, Landlord
-------------------
shall have the following remedies, in addition to all other rights and remedies
provided by any Law or otherwise provided in this Lease, to which Landlord may
resort cumulatively or in the alternative:
A. Landlord may 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
(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
18
and be reimbursed by Tenant for the cost thereof with interest at the Agreed
Interest Rate 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 compel Tenant to perform its obligations under this Lease.
Notwithstanding anything contained in this Lease, in the event of a breach of an
obligation by Tenant which results in a condition which poses an imminent danger
to safety of persons or damage to property, an unsightly condition visible from
the exterior of the Building, or a threat to insurance coverage, then if Tenant
does not cure such breach within 3 business days after delivery to it of written
notice from Landlord identifying the breach, Landlord may cure the breach of
Tenant and be reimbursed by Tenant for the cost thereof with interest at the
Agreed Interest Rate from the date the sum is paid by Landlord until Landlord is
reimbursed by Tenant.
B. Landlord may enter the Premises and release them to third
parties for Tenant's account for any period, whether shorter or longer than the
remaining Lease Term. Tenant shall be liable immediately to Landlord for all
reasonable costs Landlord incurs in releasing the Premises, including brokers'
commissions, expenses of altering and preparing the Premises required by the
releasing; provided, however, that the cost to make alterations and improvements
(as opposed to repairs) to the Premises for reletting shall be amortized over
the initial term of the new lease with another party with Tenant only
responsible for the amortized portion for the reminder of the Lease Term under
this Lease if such Lease Term had not been terminated as a result of an Event of
Tenant's Default. Tenant shall pay to Landlord the rent and other sums due under
this Lease on the date the rent is due, less the rent and other sums Landlord
received from any releasing. No act by Landlord allowed by this subparagraph
shall terminate this Lease unless Landlord notifies Tenant in writing that
Landlord elects to terminate this Lease. Notwithstanding any releasing without
termination, Landlord may later elect to terminate this Lease because of the
default by Tenant.
C. Landlord may 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 (P)13.2C shall
not relieve Tenant from its obligation to pay sums then due Landlord or from any
claim against Tenant for damages or rent previously accrued or then 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: (i) appointment of a receiver or keeper in order to
protect Landlord's interest hereunder, (ii) consent to any subletting of the
Premises or assignment of this Lease by Tenant, whether pursuant to the
provisions hereof or otherwise; or (iii) 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 Premises or any action taken to relet the Premises or any portions
thereof to the extent such actions do not affect a termination of Tenant's right
to possession of the Premises.
D. In the event Tenant breaches this Lease and abandons the
Premises, this Lease shall not terminate unless Landlord gives Tenant written
notice of its election to so terminate this Lease. No act by or on behalf of
Landlord intended to mitigate the adverse effect of such breach, including those
described by (P)13.C, shall constitute a termination of Tenant's right to
possession unless Landlord gives Tenant written notice of termination. Should
Landlord not terminate this Lease by giving Tenant written notice, Landlord may
enforce all its rights and remedies under this Lease, including the right to
recover the rent as it becomes due under the Lease as provided in California
Civil Code Section 1951.4.
E. 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. For
purposes of computing damages pursuant to California Civil Code Section 1951.2,
(i) an interest rate equal to the Agreed Interest Rate shall be used where
permitted, and (ii) the term "rent" includes Base Monthly Rent and Additional
Rent. Such damages shall include:
(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 (1%); and
19
(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 the following: (i) expenses for cleaning, repairing
or restoring the Premises; (ii) expenses for altering, remodeling or otherwise
improving the Premises for the purpose of reletting, including installation of
leasehold improvements (whether such installation be funded by a reduction of
rent, direct payment or allowance to a new tenant, or otherwise); (iii) brokers
fees, advertising costs and other expenses of reletting the Premises; (iv) costs
of carrying the Premises, such as taxes, insurance premiums, utilities and
security precautions; (v) expenses in retaking possession of the Premises; and
(vi) reasonable attorneys' fees and court costs incurred by Landlord in retaking
possession of the Premises and in releasing the Premises or otherwise incurred
as a result of Tenant's default.
F. Nothing in this (P)13.2 shall limit Landlord's right to
indemnification from Tenant as provided in (P)7.2 and (P) 10.3. Any notice given
by Landlord in order to satisfy the requirements of (P)13.1A or (P)13.1B above
shall also satisfy the notice requirements of California Code of Civil Procedure
Section 1161 regarding unlawful detainer proceedings.
13.3 Waiver: 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. 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 unless such waiver is in writing
and signed by Landlord. 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 of any other provisions herein contained.
13.4 Limitation On Exercise of Rights: At any time that an Event of
--------------------------------
Tenant's Default has occurred and remains uncured, (i) it shall not be
unreasonable for Landlord to deny or withhold any consent or approval requested
of it by Tenant which Landlord would otherwise be obligated to give, and (ii)
Tenant may not exercise any option to extend, right to terminate this Lease, or
other right granted to it by this Lease which would otherwise be available to
it.
13.5 Waiver by Tenant of Certain Remedies: Tenant waives the provisions of
------------------------------------
Sections 1932(l), 1941 and 1942 of the California Civil Code and 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, including the provisions of Sections 1174 and 1179 of the California Code
of Civil Procedure.
ARTICLE 14 ASSIGNMENT AND SUBLETTING
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14.1 Transfer By Tenant: The following provisions shall apply to any
------------------
assignment, subletting or other transfer by Tenant or any subtenant or assignee
or other successor in interest of the original Tenant (collectively referred to
in this (P)14.1 as "Tenant"):
(a) Tenant shall not do any of the following (collectively referred
to herein as a "Transfer"), whether voluntarily, involuntarily or by operation
of law, without the prior written consent of Landlord, which consent shall not
be unreasonably withheld: (i) sublet all or any part of the Premises or allow it
to be sublet, occupied or used by any person or entity other than Tenant; (ii)
assign its interest in this Lease; (iii) mortgage or encumber the Lease (or
otherwise use the Lease as a security device) in any manner; or (iv) materially
amend or modify an assignment, sublease or other transfer that has been
previously approved by Landlord. Tenant shall reimburse Landlord for all
reasonable costs and attorneys' fees incurred by Landlord in connection with the
evaluation, processing, and/or documentation of any requested Transfer, whether
or not Landlord's consent is granted, not to exceed $1,000.00 in each instance,
unless Tenant or its transferee request changes in this Lease or the form of
consent. Landlord's reasonable costs shall include the cost of any review or
investigation reasonably
20
performed by Landlord or consultant acting on Landlord's behalf of (i) Hazardous
Materials (as defined in Section 7.2E of this Lease) used, stored, released, or
disposed of by the potential Subtenant or Assignee, and/or (ii) violations of
Hazardous Materials Law (as defined in Section 7.2E of this lease) by the Tenant
or the proposed Subtenant or Assignee. Any Transfer so approved by Landlord
shall not be effective until Tenant has delivered to Landlord an executed
counterpart of the document evidencing the Transfer which (i) is in a form
reasonably approved by Landlord, (ii) contains the same terms and conditions as
stated in Tenant's notice given to Landlord pursuant to (P)14.1B, and (iii) in
the case of an assignment of the Lease, contains the agreement of the proposed
transferee to assume all obligations of Tenant under this Lease arising after
the effective date of such Transfer and to remain jointly and severally liable
therefor with Tenant. Any attempted Transfer without Landlord's consent shall
constitute an Event of Tenant's Default and shall be voidable at Landlord's
option. Landlord's consent to any one Transfer shall not constitute a waiver of
the provisions of this (P)14.1 as to any subsequent Transfer or a consent to any
subsequent Transfer. No Transfer, even with the consent of Landlord, shall
relieve Tenant of its personal and primary obligation to pay the rent and to
perform all of the other obligations to be performed by Tenant hereunder. The
acceptance of rent by Landlord from any person shall not be deemed to be a
waiver by Landlord of any provision of this Lease nor to be a consent to any
Transfer.
B. At least 30 days before a proposed Transfer is to become
effective, Tenant shall give Landlord written notice of the proposed terms of
such Transfer and request Landlord's approval, which notice shall include the
following: (i) the name and legal composition of the proposed transferee; (ii) a
current financial statement of the transferee, financial statements of the
transferee covering the preceding three years if the same exist, and (if
available) an audited financial statement of the transferee for a period ending
not more than one year prior to the proposed effective date of the Transfer, all
of which statements are prepared in accordance with generally accepted
accounting principles; (iii) the nature of the proposed transferee's business to
be carried on in the Premises; (iv) all consideration to be given on account of
the Transfer; (v) a current financial statement of Tenant; and (vi) an
accurately filled out response to Landlord's standard Hazardous Materials
Questionnaire. Tenant shall provide to Landlord such other information as may be
reasonably requested by Landlord within seven days after Landlord's receipt of
such notice from Tenant. Landlord shall respond in writing to Tenant's request
for Landlord's consent to a Transfer within the later of (i) 30 days of receipt
of such request together with the required accompanying documentation, or (ii)
15 days after Landlord's receipt of all information which Landlord reasonably
requests within seven days after it receives Tenant's first notice regarding the
Transfer in question. If Landlord fails to respond in writing within said
period, then Tenant shall provide a second written notice to Landlord requesting
such consent and if Landlord fails to respond within 7 days after receipt of
such second notice, then Landlord will be deemed to have consented to such
Transfer. Tenant shall immediately notify Landlord of any material modification
to the proposed terms of such Transfer, which shall also be subject Landlord's
consent in accordance with the same process for obtaining Landlord's initial
consent to such Transfer.
C. In the event that Tenant seeks to make any Transfer, Landlord
shall have the right to terminate this Lease or, in the case of a sublease of
less than all of the Premises, terminate this Lease as to that part of the
Premises proposed to be so sublet, either (i) on the condition that the proposed
transferee immediately enter into a direct lease of the Premises with Landlord
(or, in the case of a partial sublease, a lease for the portion proposed to be
so sublet) on the same terms and conditions contained in Tenant's notice, or
(ii) so that Landlord is thereafter free to lease the Premises (or, in the case
of a partial sublease, the portion proposed to be so sublet) to whomever it
pleases on whatever terms are acceptable to Landlord. In the event Landlord
elects to so terminate this Lease, then (i) if such termination is conditioned
upon the execution of a lease between Landlord and the proposed transferee,
Tenant's obligations under this Lease shall not be terminated until such
transferee executes a new lease with Landlord, enters into possession and
commences the payment of rent, and (ii) if Landlord elects simply to terminate
this Lease (or, in the case of a partial sublease, terminate this Lease as to
the portion to be so sublet), the Lease shall so terminate in its entirety (or
as to the space to be so sublet) fifteen (15) days after Landlord has notified
Tenant in writing of such election. Upon such termination, Tenant shall be
released from any further obligation under this Lease if it is terminated in its
entirety, or shall be released from any further obligation under the Lease with
respect to the space proposed to be sublet in the case of a proposed partial
sublease. In the case of a partial termination of the Lease, the Base Monthly
Rent and Tenant's Share shall be reduced to an amount which bears the same
relationship to the original amount thereof as the area of that part of the
Premises which remains
21
subject to the Lease bears to the original area of the Premises. Landlord and
Tenant shall execute a cancellation and release with respect to the Lease to
effect such termination.
D. If Landlord consents to a Transfer proposed by Tenant, Tenant may
enter into such Transfer, and if Tenant does so, the following shall apply:
(1) Tenant shall not be released of its liability for the
performance of all of its obligations under the Lease.
(2) If Tenant assigns its interest in this Lease, then Tenant
shall pay to Landlord 80% of all Subrent (as defined in (P)14.1D(5)) received by
Tenant over and above (i) the assignee's agreement to assume the obligations of
Tenant under this Lease, and (ii) all Permitted Transfer Costs related to such
assignment. In the case of assignment, the amount of Subrent owed to Landlord
shall be paid to Landlord on the same basis, whether periodic or in lump sum,
that such Subrent is paid to Tenant by the assignee. All Permitted Transfer
Costs shall be amortized on a straight line basis over the term of such sublease
(including any extension options) for purposes of calculating the amount due
Landlord hereunder.
(3) If Tenant sublets any part of the Premises, then with
respect to the space so subleased, Tenant shall pay to Landlord 80% of the
positive difference, if any, between (i) all Subrent paid by the subtenant to
Tenant, less (ii) the sum of all Base Monthly Rent and Additional Rent allocable
to the space sublet and all Permitted Transfer Costs related to such sublease.
Such amount shall be paid to Landlord on the same basis, whether periodic or in
lump sum, that such Subrent is paid to Tenant by its subtenant. All Permitted
Transfer Costs shall be amortized on a straight line basis over the term of such
sublease (including any extension options) for purposes of calculating the
amount due Landlord hereunder.
(4) Tenant's obligations under this (P)14.1D shall survive any
Transfer, and Tenant's failure to perform its obligations hereunder shall be an
Event of Tenant's Default. At the time Tenant makes any payment to Landlord
required by this (P)14.D), Tenant shall deliver an itemized statement of the
method by which the amount to which Landlord is entitled was calculated,
certified by Tenant as true and correct. Landlord shall have the right at
reasonable intervals to inspect Tenant's books and records relating to the
payments due hereunder. Upon request therefor, Tenant shall deliver to Landlord
copies of all bills, invoices or other documents upon which its calculations are
based. Landlord may condition its approval of any Transfer upon obtaining a
certification from both Tenant and the proposed transferee of all Subrent and
other amounts that are to be paid to Tenant in connection with such Transfer.
(5) As used in this (P)14.1D, the term "Subrent" shall mean any
consideration of any kind received, or to be received, by Tenant as a result of
the Transfer, if such sums are directly related to Tenant's interest in this
Lease or in the Premises. As used in this (P)14.1D, the term "Permitted Transfer
Costs" shall mean (i) all reasonable leasing commissions and other customary and
reasonable expenses paid to third parties not affiliated with Tenant in order to
obtain the Transfer in question, and (ii) all reasonable attorneys' fees
incurred by Tenant with respect to the Transfer in question.
E. If Tenant is a corporation, the following shall be deemed a
voluntary assignment of Tenant's interest in this Lease: (i) any dissolution,
merger, consolidation, or other reorganization of or affecting Tenant, whether
or not Tenant is the surviving corporation; and (ii) if the capital stock of
Tenant is not publicly traded, the sale or transfer to one person or entity (or
to any group of related persons or entities) stock possessing more than 50% 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, limited liability company or other entity any withdrawal or
substitution (whether voluntary, involuntary or by operation of law, and whether
occurring at one time or over a period of time) of any partner, member or other
party owning 25% or more (cumulatively) of any interest in the capital or
profits of the partnership, limited liability company or other entity or the
dissolution of the partnership, limited liability company or other entity, shall
be deemed a voluntary assignment of Tenant's interest in this Lease.
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F. Notwithstanding anything contained in (P)14.1, so long as Tenant
otherwise complies with the provisions of (P)14.1 Tenant may enter into any of
the following transfers (a "Permitted Transfer") without Landlord's prior
written consent, and Landlord shall not be entitled to terminate the Lease
pursuant to (P)14.1C or to receive any part of any Subrent resulting therefrom
that would otherwise be due it pursuant to (P)14.1D:
(1) Tenant may sublease all or part of the Premises or assign
its interest in this Lease to any corporation which controls, is controlled by,
or is under common control with the original Tenant to this Lease by means of an
ownership interest of more than 50%;
(2) Tenant may assign its interest in the Lease to a
corporation which results from a merger, consolidation or other reorganization
in which Tenant is not the surviving corporation, so long as the surviving
corporation has a net worth at the time of such assignment that is equal to or
greater than the net worth of Tenant immediately prior to such transaction; and
(3) Tenant may assign this Lease to a corporation which
purchases or otherwise acquires all or substantially all of the assets of
Tenant, so long as such acquiring corporation has a net worth at the time of
such assignment that is equal to or greater than the net worth of Tenant
immediately prior to such transaction.
14.2 Transfer By Landlord: Landlord and its successors in interest shall
--------------------
have the right to transfer their interest in this Lease and the Project 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, 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, provided that the purchaser assumes the obligations
of the Landlord under this Lease from and after the effective date of such
transfer. Landlord agrees to transfer the Security Deposit, not previously
applied toward any obligation of Tenant, to such purchaser as provided in
section 3.5 hereof. After the date of any such transfer, the term "Landlord" as
used herein shall mean the transferee of such interest in the Premises.
ARTICLE 15 GENERAL PROVISIONS
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15.1 Landlord's Right to Enter: Landlord and its agents may enter the
-------------------------
Premises at any reasonable time after giving at least 24 hours' prior notice to
Tenant (and immediately in the case of emergency) for the purpose of: (i)
inspecting the same; (ii) posting notices of non-responsibility; (iii) supplying
any service to be provided by Landlord to Tenant; (iv) showing the Premises to
prospective purchasers, mortgagees or tenants; (v) making necessary alterations,
additions or repairs; (vi) performing Tenant's obligations when Tenant has
failed to do so after written notice from Landlord; (vii) placing upon the
Premises ordinary "for lease" signs or "for sale" signs; and (viii) responding
to an emergency. Landlord shall have the right to use any and all means Landlord
may deem necessary and proper to enter the Premises in an emergency. Any entry
into the Premises obtained by Landlord in accordance with this (P)15.1 shall not
be a forcible or unlawful entry into, or a detainer of, the Premises, or an
eviction, actual or constructive, of Tenant from the Premises.
15.2 Surrender of the Premises: Upon the expiration or sooner termination
-------------------------
of this Lease, Tenant shall vacate and surrender the Premises to Landlord in the
same condition as existed at the Commencement Date, except for (i) reasonable
wear and tear, (ii) damage caused by any peril or condemnation, and (iii)
contamination by Hazardous Materials for which Tenant is not responsible
pursuant to (P)7.2A or (P)7.2B. In this regard, normal wear and tear shall be
construed to mean wear and tear caused to the Premises by the natural aging
process which occurs in spite of prudent application of reasonable standards for
maintenance, repair and janitorial practices, and does not include items of
neglected or deferred maintenance. In any event, Tenant shall cause the
following to be done prior to the expiration or the sooner termination of this
Lease: (i) all interior walls shall be cleaned so that they appear in a neat and
clean condition reasonable wear and tear excepted, and if cleaning is not
sufficient to achieve such condition, then the walls will be painted; (ii) all
tiled floors shall be cleaned and waxed; (iii) all carpets shall be cleaned and
shampooed; (iv) all broken, marred, stained or nonconforming acoustical ceiling
tiles shall be replaced; (v) all windows shall be washed; (vi) the HVAC system
shall be serviced by a reputable and licensed service firm
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and left in good operating condition and repair as so certified by such firm;
and (vii) the plumbing and electrical systems and lighting shall be placed in
good order and repair (including replacement of any burned out, discolored or
broken light bulbs, ballasts, or lenses). If Landlord so requests, Tenant
shall, prior to the expiration or sooner termination of this Lease, (i) remove
any Tenant's Alterations which Tenant is required to remove pursuant to (P)5.2
and repair all damage caused by such removal, and (ii) return the Premises or
any part thereof to its original configuration existing as of the time the
Premises were delivered to Tenant. If the Premises are not so surrendered at
the termination of this Lease, Tenant shall be liable to Landlord for all costs
incurred by Landlord in returning the Premises to the required condition, plus
interest on all costs incurred at the Agreed Interest Rate. Tenant shall
indemnify Landlord against loss or liability resulting from delay by Tenant in
so surrendering the Premises, including, without limitation, any claims made by
any succeeding tenant or losses to Landlord due to lost opportunities to lease
to succeeding tenants.
15.3 Holding Over: This Lease shall terminate without further notice at
------------
the expiration of the Lease Term. Any holding over by Tenant after expiration of
the Lease Term shall not constitute a renewal or extension of the Lease or give
Tenant any rights in or to the Premises except as expressly provided in this
Lease. Any holding over after such expiration with the written consent of
Landlord shall be construed to be a tenancy from month to month on the same
terms and conditions herein specified insofar as applicable except that Base
Monthly Rent shall be increased to an amount equal to 150% of the greater of (a)
the Base Monthly Rent payable during the last full calendar month of the Lease
Term, or (b) the then prevailing fair market rent.
15.4 Subordination: The following provisions shall govern the relationship
-------------
of this Lease to any Security Instrument:
A. The Lease is subject and subordinate to all Security Instruments
existing as of the Effective Date. However, if any Lender so requires, this
Lease shall become prior and superior to any such Security Instrument.
B. At Landlord's election, this Lease shall become subject and
subordinate to any Security Instrument created after the Effective Date.
Notwithstanding such subordination, Tenant's right to quiet possession of the
Premises shall not be disturbed so long as Tenant is not in default and performs
all of its obligations under this Lease, unless this Lease is otherwise
terminated pursuant to its terms.
C. Tenant shall upon request execute any document or instrument
required by any Lender to make this Lease either prior or subordinate to a
Security Instrument, which may include such other matters as the Lender
customarily and reasonably requires in connection with such agreements,
including provisions that the Lender not be liable for (i) the return of any
security deposit unless the Lender receives it from Landlord, and (ii) any
defaults on the part of Landlord occurring prior to the time the Lender takes
possession of the Project in connection with the enforcement of its Security
Instrument. Tenant's failure to execute any such document or instrument within
10 days after written demand therefor shall constitute an Event of Tenant's
Default.
15.5 Mortgagee Protection and Attornment: In the event of any default on
-----------------------------------
the part of the Landlord, Tenant will use reasonable efforts to give notice by
registered mail to any Lender whose name has been provided to Tenant and shall
offer such Lender a reasonable opportunity to cure the default, including time
to obtain possession of the Premises by power of sale or judicial foreclosure or
other appropriate legal proceedings, if such should prove necessary to effect a
cure. Tenant shall attorn to any purchaser of the Premises at any foreclosure
sale or private sale conducted pursuant to any Security Instrument encumbering
the Premises, or to any grantee or transferee designated in any deed given in
lieu of foreclosure, provided such purchaser agrees to abide by the terms of
this Lease.
15.6 Estoppel Certificates and Financial Statements: At all times during
----------------------------------------------
the Lease Term, each party agrees, following any request by the other party,
promptly to execute and deliver to the requesting party within 15 days following
delivery of such request 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
24
any, (iii) acknowledging that there are not, to the certifying party's
knowledge, any uncured defaults on the part of any party hereunder or, if there
are uncured defaults, specifying the nature of such defaults, and (iv)
certifying such other information about the Lease as may be reasonably required
by the requesting party. A failure to deliver an estoppel certificate within 15
days after delivery of a request therefor shall be a conclusive admission that,
as of the date of the request for such statement: (i) this Lease is unmodified
except as may be represented by the requesting party in said request and is in
full force and effect, (ii) there are no uncured defaults in the requesting
party's performance, and (iii) no rent has been paid more than 30 days in
advance. At any time during the Lease Term Tenant shall, upon 15 days' prior
written notice from Landlord, provide Tenant's most recent financial statement
and financial statements covering the 24 month period prior to the date of such
most recent financial statement to any existing Lender or to any potential
Lender or buyer of the Premises. Such statements shall be prepared in accordance
with generally accepted accounting principles and, if such is the normal
practice of Tenant, shall be audited by an independent certified public
accountant. Landlord shall use its good faith efforts to treat such financial
statements as confidential information, but such information may be disclosed to
Landlord's current and prospective lenders, investors and advisers or
purchasers.
15.7 Consent: Whenever Landlord's approval or consent is required by this
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Lease, such approval or consent may be exercised in Landlord's sole and absolute
discretion, unless a different standard has been expressly provided in this
Lease for the particular matter requiring Landlord's consent or approval.
15.8 Notices: Any notice required or desired to be given regarding this
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Lease shall be in writing and may be given by personal delivery, by facsimile,
by courier service, or by mail. A notice shall be deemed to have been given (i)
on the third business day after mailing if such notice was deposited in the
United States mail, certified or registered, postage prepaid, addressed to the
party to be served at its Address for Notices specified in Section Q or Section
--------- -------
R of the Summary (as applicable), (ii) when delivered if given by personal
-
delivery, and (iii) in all other cases when actually received at the party's
Address for Notices. Either party may change its address by giving notice of the
same in accordance with this (P)15.8, provided, however, that any address to
which notices may be sent must be a California address.
15.9 Attorneys' Fees: In the event either Landlord or Tenant shall bring
---------------
any action or legal proceeding for an alleged breach of any provision of this
Lease, to recover rent, to terminate this Lease or otherwise to enforce, protect
or establish any term or covenant of this Lease, the prevailing party shall be
entitled to recover as a part of such action or proceeding, or in a separate
action brought for that purpose, reasonable attorneys' fees, court costs, and
experts' fees as may be fixed by the court.
15.10 Corporate Authority: If Tenant is a corporation (or partnership),
-------------------
each individual executing this Lease on behalf of Tenant represents and warrants
that he is duly authorized to execute and deliver this Lease on behalf of such
corporation in accordance with the by-laws of such corporation (or partnership
in accordance with the partnership agreement of such partnership) and that this
Lease is binding upon such corporation (or partnership) in accordance with its
terms. Each of the persons executing this Lease on behalf of a corporation does
hereby covenant and warrant that the party for whom it is executing this Lease
is a duly authorized and existing corporation, that it is qualified to do
business in California, and that the corporation has full right and authority to
enter into this Lease.
15.11 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. The captions used in this Lease are for convenience only and shall not
be considered in the construction or interpretation of any provision hereof. Any
executed copy of this Lease 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. "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 of California.
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.
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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 "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 a provision of this Lease
expressly requires reimbursement. Landlord and Tenant agree that (i) the gross
leasable area of the Premises includes any atriums, depressed loading docks,
covered entrances or egresses, and covered loading areas, (ii) each has had an
opportunity to determine to its satisfaction the actual area of the Project and
the Premises, (iii) all measurements of area contained in this Lease are
conclusively agreed to be correct and binding upon the parties, even if a
subsequent measurement of any one of these areas determines that it is more or
less than the amount of area reflected in this Lease, and (iv) any such
subsequent determination that the area is more or less than shown in this Lease
shall not result in a change in any of the computations of rent, improvement
allowances, or other matters described in this Lease where area is a factor.
Where a party hereto is obligated not to perform any act, such party is also
obligated to restrain any others within its control from performing said act,
including the Agents of such party. Landlord shall not become or be deemed a
partner or a joint venturer with Tenant by reason of the provisions of this
Lease.
15.12 Termination by Exercise of Right: If this Lease is terminated
--------------------------------
pursuant to its terms by the proper exercise of a right to terminate
specifically granted to Landlord or Tenant by this Lease, then this Lease shall
terminate 30 days after the date the right to terminate is properly exercised
(unless another date is specified in that part of the Lease creating the right,
in which event the date so specified for termination shall prevail), the rent
and all other charges due hereunder shall be prorated as of the date of
termination, and neither Landlord nor Tenant shall have any further rights or
obligations under this Lease except for those that have accrued prior to the
date of termination or those obligations which this Lease specifically provides
are to survive termination. This (P)15.12 does not apply to a termination of
this Lease by Landlord as a result of an Event of Tenant's Default.
15.13 Brokerage Commissions: Each party hereto (i) represents and warrants
---------------------
to the other that it has not had any dealings with any real estate brokers,
leasing agents or salesmen, or incurred any obligations for the payment of real
estate brokerage commissions or finder's fees which would be earned or due and
payable by reason of the execution of this Lease, other than to the Retained
Real Estate Brokers described in Section S of the Summary, and (ii) agrees to
---------
indemnify, defend, and hold harmless the other party from any claim for any such
commission or fees which result from the actions of the indemnifying party.
Landlord shall be responsible for the payment of any commission owed to the
Retained Real Estate Brokers if there is a separate written commission agreement
between Landlord and the Retained Real Estate Brokers for the payment of a
commission as a result of the execution of this Lease.
15.14 Force Majeure: Any prevention, delay or stoppage due to strikes,
-------------
lock-outs, inclement weather, labor disputes, inability to obtain labor,
materials, fuels or reasonable substitutes therefor, governmental restrictions,
regulations, controls, action or inaction, civil commotion, fire or other acts
of God, and other causes beyond the reasonable control of either party (except
financial inability) shall excuse the performance by such party, for a period
equal to the period of any said prevention, delay or stoppage, of any obligation
hereunder. A party claiming a force majeure delay under this section must notify
the other party of such force majeure delay within a reasonable period of time
not to exceed thirty (30) days after the event giving rise to such force majeure
delay occurs.
15.15 Entire Agreement: This Lease constitutes the entire agreement
----------------
between the parties, and there are no binding agreements or representations
between the parties except as expressed herein. Tenant acknowledges that neither
Landlord nor Landlord's Agents has made any legally binding representation or
warranty as to any matter except those expressly set forth herein, including any
warranty as to (i) whether the Premises may be used for Tenant's intended use
under existing Law, (ii) the suitability of the Premises or the Project for the
conduct of Tenant's business, or (iii) the condition of any improvements. There
are no oral agreements between Landlord and Tenant affecting this Lease, and
this Lease supersedes and cancels any and all previous negotiations,
arrangements, brochures, agreements and understandings, if any, between Landlord
and Tenant or displayed by Landlord to Tenant with respect to the subject matter
of this Lease. This instrument shall not be legally binding, until it is
executed by both Landlord and Tenant. No subsequent change or addition to this
Lease shall be binding unless in writing and signed by Landlord and Tenant.
26
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease with the
intent to be legally bound thereby, to be effective as of the Effective Date.
LANDLORD: TENANT:
SAN XXXX TECHNOLOGY PROPERTIES, LLC By: SIRF TECHNOLOGY, INC.
a California corporation
a Delaware limited liability company
By: Divco West Group, LLC, By: /s/ Xxxxxx X. Xxxxxxx
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a Delaware limited liability company Name: Xxxxxx X. Xxxxxxx
----------------------
Its Agent Title: Vice President
---------------------
Operations
---------------------
By: /s/ Xxxxx Xxxxxxxx By: /s/ Xxxxxxx Xx
--------------------- ------------------------
Name: Xxxxx Xxxxxxxx Name: Xxxxxxx Xx
----------------------
Its: President Title: President & CEO
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Dated: September 27, 1999 Dated: September 23, 1999
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EXHIBIT A
PROJECT SITE PLAN
AND OUTLINE OF THE PREMISES
PROJECT 8168: 5&6 CALSTRS
R & D Total Project Square Footage: 97,366
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[Graphic of site plan for Building 5 at 000 Xxxxxx Xxxx.]
EXHIBIT B
IMPROVEMENT AGREEMENT
EXHIBIT B-1
SPACE PLAN
[Graphic of interior lay-out of 000 Xxxxxx Xxxx.]
EXHIBIT B
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IMPROVEMENT AGREEMENT
---------------------
This Exhibit B forms a part of that certain Lease (the "Lease") by and
---------
between San Xxxx Properties, LLC, a Delaware limited liability company, as
Landlord, and Sirf Technology, Inc., a California corporation, as Tenant, to
which this Exhibit is attached. If there is any conflict between this Exhibit
and the Lease, this Exhibit shall govern.
1. Defined Terms. All defined terms referred to in this Exhibit shall
-------------
have the same meaning as defined in the Lease to which this Exhibit is a part,
except where expressly defined to the contrary.
2. Additional Definitions. Each of the following terms shall have the
----------------------
following meaning:
"Construction Plans" -The complete plans and specifications for the
------------------
construction of the Tenant Improvements consisting of all architectural,
engineering, mechanical and electrical drawings and specifications which are
required to obtain all building permits, licenses and certificates from the
applicable governmental authority(ies) for the construction of the Tenant
Improvements. The Construction Plans shall be prepared by duly licensed and/or
registered architectural and/or engineering professionals selected by Landlord
in its sole and absolute discretion, and in all respects shall be in substantial
compliance with all applicable laws, rules, regulations, building codes for the
city and county where the Building is located.
"Force Majeure Delays" - Any delay, other than a Tenant Delay, by
--------------------
Landlord in completing the Tenant Improvements by the Scheduled Commencement
Date set forth in the Lease by reason of (i) any strike, lockout or other labor
trouble or industrial disturbance (whether or not on the part of the employees
of either party hereto), (ii) governmental preemption of priorities or other
controls in connection with a national or other public emergency, civil
disturbance, riot, war, sabotage, blockade, embargo, inability to secure
customary materials, supplies or labor through ordinary sources by reason of
regulation or order of any government or regulatory body, or (iii) shortages of
fuel, materials, supplies or labor, (iv) lightning, earthquake, fire, storm,
tornado, flood, washout explosion, inclement weather or any other similar
industry-wide or Building-wide cause beyond the reasonable control of Landlord,
or (v) any other cause, whether similar or dissimilar to the above, beyond
Landlord's reasonable control. The time for performance of any obligation of
Landlord to construct Landlord's Work under this Work Letter or the Lease shall
be extended at Landlord's election by the period of any delay caused by any of
the foregoing events.
"Space Plan" - That certain Space Plan attached hereto as Exhibit B-1,
---------- -----------
which reflect the Tenant Improvements to be constructed by Landlord. Landlord
and Tenant hereby approve of the Space Plan.
"Substantial Completion," "Substantially Complete," "Substantially
---------------------- ---------------------- -------------
Completed" -The terms Substantial Completion, Substantially Completed and
---------
Substantially Complete shall mean when the following have occurred or would have
occurred but for Tenant Delays:
(a) Landlord has delivered to Tenant a written notice stating that the
Tenant Improvements have been Substantially Completed substantially in
accordance with the Construction Plans, except "punch list" items which may be
completed without materially impairing Tenant's use of the Leased Premises or a
material portion thereof; and
(b) Landlord has obtained from the appropriate governmental authority
a temporary, conditional or final certificate of occupancy or signed building
permit (or equivalent), if one is required, for the Tenant Improvements
permitting occupancy of the Leased Premises by Tenant.
"Tenant Delay" Any delay incurred by Landlord in completing the Tenant
------------
Improvements due to (i) a delay by Tenant, or by any person employed or engaged
by Tenant, in approving or delivering to Landlord any plans, schedules or
information, including, without limitation, the Construction Plans beyond the
applicable time
1
period set forth in this Exhibit, if any; (ii) a delay in the performance of
work in the Premises by Tenant or any person employed by Tenant; (iii) any
changes requested by Tenant in or to previously approved work or in the Space
Plan or Construction Plans; (iv) requests for materials and finishes which are
not readily available, and/or delays in delivery of any materials specified by
Tenant through change orders; (v) the failure of Tenant to pay as and when due
under this Exhibits all costs and expenses to construct the Tenant Improvements
to the extent Tenant is required to pay for such costs in this Exhibit; (vi)
interference with the construction of the Tenant Improvements; (vii) any delay
attributable to the failure of Tenant to pay, when due, any amounts required to
be paid by Tenant pursuant to this Exhibit or otherwise provided in the Lease.
"Tenant Improvements" - The tenant improvements to be installed by
-------------------
Landlord in the portion of the Leased Premises substantially in accordance with
the Space Plan and which will be shown in greater detail in the Construction
Plans.
2. Construction of the Tenant Improvements.
---------------------------------------
2.1 Construction Plans. Landlord shall cause to be prepared the
------------------
Construction Plans for the Tenant Improvements that are consistent with and are
logical evolutions of the Space Plan and the building standards. Tenant's
approval of the Construction Plans shall not be required. However, if requested
by Landlord, Tenant shall notify Landlord in writing within five (5) days after
receipt of Construction Plans or any preliminary plans that (i) Tenant approves
of such plans; or (ii) Tenant disapproves the plans because they vary in design
from the Space Plan approved by Landlord and Tenant in the particular instances
specified by Tenant in such notice (including, without limitation, the specific
changes requested by Tenant), but such disapproval shall constitute a Tenant
Delay unless the plans materially deviate from the Space Plan or changes in such
Space Plan that have been approved in writing by Landlord. The failure of
Tenant to provide such written notice within said five (5) day period shall be
deemed as approval by Tenant of such plans.
2.2 Construction. Landlord shall construct the Tenant Improvements
------------
substantially in accordance with the Construction Plans. The construction
contract for constructing the Tenant Improvements and the contractor(s) to
perform the work shall be approved and/or selected, as the case may be, by
Landlord at its sole and absolute discretion without the consent of Tenant. The
parties anticipate that the Tenant Improvements will be Substantially Completed
by the estimated Commencement Date, subject to Tenant Delays and Force Majeure
Delays.
2.3 Tenant's Responsibility. Tenant shall be solely responsible for the
-----------------------
suitability for the Tenant's needs and business of the design and function of
the Tenant Improvements. Tenant shall also be responsible for procuring or
installing in the Premises any trade fixtures, equipment, furniture,
furnishings, telephone equipment or other personal property ("Personal
Property") to be used in the Premises by Tenant, and the cost of such Personal
Property shall be paid by Tenant. Tenant shall conform to the Building's wiring
standards in installing any telephone equipment and shall be subject to any and
all rules of the site during construction.
3. Payment of Construction Costs. Landlord shall pay for the costs to
-----------------------------
construct the Tenant Improvements based on the Space Plan in existence as of the
date hereof. Any additional costs due to changes in the Tenant Improvements
reflected in the Space Plan or in the Construction Plans requested by Tenant or
as a result of any Tenant Delay shall be paid by Tenant as provided in section 4
below.
4. Changes in Work. Tenant shall not be permitted to make any change in
---------------
the Tenant Improvements without the prior written approval of Landlord, which
may be exercised, and made subject to such conditions as Landlord may require,
in its sole and absolute discretion. Any change approved by Landlord that in
Landlord's judgment results in a delay in constructing the Tenant Improvements
shall be deemed a Tenant Delay, and shall extend the time period by which
Landlord must Substantially Complete the Tenant Improvements, but shall not
extend or postpone the date for payment of rent or for commencement of the term
under this Lease. The cost of such changes and the additional costs as a result
of any other Tenant Delay, including the cost to revise the Construction Plans,
obtain any additional permits and construct any additional improvements required
as a result thereof, and the cost for materials and labor, and all other
additional costs incurred by Landlord from resulting
2
delays in completing the Tenant Improvements, shall be paid by Tenant to
Landlord within ten (10) days after Tenant's receipt of notice from Landlord.
If Landlord does not receive such payment within said ten (10) day period,
Landlord shall have the right, in addition to any other rights or remedies
available under the Lease, at law or in equity, to (i) discontinue all or any
portion of the work until it receives said payment; (ii) proceed with the other
work not affected by such change until such payment is received; (iii) proceed
with the work contemplated with such change; or (iv) proceed with the work
without making such change; in which case the commencement or completion of such
work shall not be deemed a waiver of Tenant's obligation to pay for same or any
additional costs or expenses incurred as a result thereof. Any delay caused as
a result of such a change or request for a change shall constitute a Tenant
Delay.
5. Acceptance and Punch List Work. Within thirty (30) days after the date
------------------------------
of Substantial Completion of the Tenant Improvements, Tenant may provide
Landlord with a punch list which sets forth any corrective work to be performed
by Landlord with respect to the Tenant Improvements; provided, however, that
Tenant's obligation to pay Base Monthly Rent, additional rent and other sums
under the Lease shall not be affected thereby. If Tenant fails to submit a
punch list to Landlord within such thirty (30) day period, Tenant agrees that it
will conclusively be deemed to have inspected the Tenant Improvements and found
it to be in satisfactory condition, with all work required of Landlord
completed.
3
EXHIBIT B-1
SPACE PLAN
EXHIBIT C
ACCEPTANCE AGREEMENT
Exhibit "C"
-----------
ACCEPTANCE AGREEMENT
This Acceptance Agreement is made as of ______________, 19___, by and
between the parties hereto with regard to that Lease dated _______________,
1999, by and between San Xxxx Technology Properties, LLC, a Delaware limited
liability company, as Landlord ("Landlord"), and Sirf Technology, Inc., a
California corporation, as Tenant ("Tenant"), affecting those premises commonly
known as 000 Xxxxxx Xxxx, Xxx Xxxx, Xxxxxxxxxx. The parties hereto 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.
2. The Commencement Date of the Lease Term is _______________, 19__, and the
Lease Term for the Premises shall expire on _______________, ____ unless
sooner terminated according to the terms of the Lease.
LANDLORD: TENANT:
SAN XXXX TECHNOLOGY PROPERTIES, LLC Sirf Technology, Inc.
a Delaware limited liability company a California corporation
By: Divco West Group, LLC By:_____________________
a Delaware limited liability company Name:
Its Agent Its:____________________
Dated:__________________
By:____
Name:_______________________
Its:________________________
Dated:___________________________
ADDENDUM XX. 0
XXXXXXXX XX. 0
This ADDENDUM NO. 1 (this "Addendum") is made in connection with and is a
part of that certain Office Lease, dated as of September 23, 1999, by and
between SAN XXXX TECHNOLOGY PROPERTIES, LLC, a Delaware limited liability
company, as Landlord, and SIRF TECHNOLOGY, INC., a California corporation, as
Tenant, (the "Lease").
1. Definitions and Conflict. All capitalized terms referred to in this
------------------------
Addendum shall have the same meaning as provided in the Lease, except as
expressly provided to the contrary in this Addendum. In case of any conflict
between any term or provision of the Lease and any exhibits attached thereto and
this Addendum, this Addendum shall control.
2. Letter of Credit Security Deposit. Pursuant to the terms of the Lease,
---------------------------------
a Security Deposit of $192,394.80 is required from Tenant. In lieu of
depositing cash for the full amount of the Security Deposit, Tenant shall have
the right to deposit a letter of credit for up to $96,197.40 (the "Maximum
Letter of Credit Amount"), with the balance of the Security Deposit in the form
of cash. Said letter of credit shall be in the form of an irrevocable,
unconditional and clean standby letter of credit and otherwise in the form set
forth below (the "Letter of Credit"). The term Security Deposit shall mean the
cash portion of the Security Deposit and the Letter of Credit.
2.1 Form of Letter of Credit. The Letter of Credit shall be issued by a
------------------------
national bank acceptable to Landlord in its reasonable discretion, with offices
in the San Francisco Bay Area that will accept and pay on any draw on the Letter
of Credit. The Letter of Credit shall be issued for a term of at least twelve
(12) months (with a term during the last year of the Lease Term of at least one
full month following the expiration of the Lease Term) and shall be in a form
and with such content acceptable to Landlord in its sole and absolute
discretion. Any Letter of Credit that Tenant delivers to Landlord in
replacement of an existing Letter of Credit shall be in an amount equal to the
replaced Letter of Credit (prior to any draws) so that the cash and Letter of
Credit together equal the amount of the Security Deposit specified in the Lease
under the Lease. Any such replacement Letter of Credit shall be delivered to
and received by Landlord no later than thirty (30) days prior to the expiration
of the term of the Letter of Credit then in effect. If Tenant fails to deposit
a replacement Letter of Credit or renew the expiring Letter of Credit, Landlord
shall have the right to draw upon the expiring Letter of Credit for the full
amount thereof and hold the same as Security Deposit; provided, however, that if
Tenant provides a replacement Letter of Credit that meets the requirements of
this section, Landlord shall promptly return to Tenant in cash that amount of
the Letter of Credit that had been drawn upon by Landlord. The Letter of Credit
shall expressly permit full and partial draws. If for any reason the Letter of
Credit does not permit partial draws, then Landlord shall have the right to make
a full draw on the Letter of Credit, notwithstanding that the full amount may
not be required to cure any Event of Tenant's Default. The Letter of Credit
shall designate Landlord as beneficiary and shall be transferable by beneficiary
to any transferee, successor, and assign (including any lender of Landlord) at
no cost or expense to beneficiary. The Letter of Credit shall provide that it
may be drawn by Landlord (or its assignee) upon presentation by Landlord to the
issuing bank (at its offices in the San Francisco Bay Area) of a sight draft(s),
together with a written statement executed by Landlord stating that the amount
requested is due Landlord under the Lease. The amount of the draw requested by
Landlord shall be payable by the bank without further inquiry or any other
documentation or further action required of the bank, Landlord, or Tenant. All
costs and expenses to obtain the Letter of Credit and all renewals shall be
borne by Tenant.
If the Letter of Credit is drawn upon by Landlord, Tenant shall, within ten
(10) days after written demand therefor, deposit cash with Landlord in an amount
sufficient to restore the Security
1
Deposit to amount required under the Lease and this Addendum. At all times the
Security Deposit, whether in the form of cash and/or Letter of Credit, shall be
in the amount specified in the Lease. The use, application or retention of the
Letter of Credit, or any portion thereof, by Landlord shall not prevent Landlord
from exercising any other right or remedy provided by this Lease or by law, it
being intended that Landlord shall not first be required to use all or any part
of the Letter of Credit or cash portion of the Security Deposit, and such use
shall not operate as a limitation on any recovery to which Landlord may
otherwise be entitled. Tenant shall not be entitled to any interest on the cash
portion of the Security Deposit. The exercise of any rights of Landlord to the
Security Deposit shall not constitute a waiver of nor relieve Tenant from any
liability or obligation for any default by Tenant. If the Letter of Credit
permits partial draws, Landlord shall only draw upon the Letter of Credit in the
actual amount necessary to remedy a cure of said default, and not any excess.
If Landlord draws upon the entire amount of the Letter of Credit, Tenant may
deliver a replacement Letter of Credit to Landlord, instead of depositing cash
with Landlord, equal to the original amount of the Letter of Credit.
2.2 Return or Transfer of Letter of Credit. Within thirty (30) days after
--------------------------------------
the expiration or earlier termination of the Lease and provided Tenant has
complied with all of its obligations under the Lease, Landlord shall promptly
return the refundable portion of the Security Deposit, including the Letter of
Credit, to Tenant. In the event of a transfer of the Premises, Building or
Project by Landlord, Landlord or any subsequent transferor shall deliver the
refundable portion of the Security Deposit, including both the cash portion and
the Letter of Credit to the successor landlord or transferee.
3. Roof Antenna. Notwithstanding the limitation in section 4.3 of the
------------
Lease regarding the installation of any equipment outside of the Premises,
Tenant shall have the non-exclusive right, subject to the limitations set forth
herein, at its sole cost and expense, to construct, install, maintain and
operate one receiver antenna that is not more than twelve inches in diameter
("Antenna") on the roof of the Building containing the Premises. Tenant's
rights under this section are personal to the original Tenant executing the
Lease, but not any other assignee, sublessee or transferee of any Tenant, other
than an affiliate of Tenant, and such rights exist only so long as Tenant is in
occupancy of the Premises. Tenants right's hereunder are expressly conditioned
upon and limited by the following:
(a) The precise location of the Antenna on the roof of the Building
shall be subject to the approval of Landlord in its reasonable discretion and
shall be shielded from view to the extent deemed necessary by Landlord after
considering the size and location of the Antenna. Tenant shall submit to
Landlord any plans for Landlord's prior written approval in its reasonable
discretion;
(b) Tenant shall indemnify, defend and hold harmless Landlord from and
against all loss, cost, liability, obligation or expense whatsoever or any
allegation or claim thereof arising as a result of the installation, existence,
or operation of the Antenna, including, without limitation, damage to the roof,
to the Building or to persons or property;
(c) The installation, use, operation and maintenance of the Antenna by
Tenant shall be in compliance with all statutes, laws, rules, regulations,
ordinances, decrees or orders of any governmental authority, whether federal,
state or local, having jurisdiction in connection therewith at Tenant's sole
cost and expense. Without limitation on the generality of the foregoing, Tenant
shall secure and maintain in force and effect all governmental licenses, permits
and approvals required for the installation and use of the Antenna, including
any requisite building permits;
2
(d) Tenant's access to the roof of the Building for purposes of
installing and maintaining the Antenna and related facilities shall be subject
to such procedures, regulations and limitations as Landlord may impose;
provided, however, that any such procedures, regulations and limitations shall
not effectively prohibit or preclude access at all times. However, to the
extent any cost to operate the Antenna is not separately metered to Tenant,
Tenant shall reimburse Landlord for any cost incurred in connection therewith,
which payment shall be made within ten (10) days after request therefor;
(e) Tenant agrees that, if Landlord makes any repairs or maintenance
to the Building or Common Areas, or any alterations, modifications, additions or
improvements to the Building or Common Areas, including any such work to the
electrical, mechanical or other operating systems within the Building, Tenant at
its sole cost shall make any concomitant adjustments or modifications to the
Antenna and its related facilities, as such adjustments and modifications are
determined to be necessary by any architect, engineer or other contractor
engaged by Landlord in connection therewith, or, at Tenant's option, the Antenna
may be removed by Tenant from the roof at any time. The making of the requisite
adjustments and modifications for the Antenna and its related facilities shall
be made in accordance with plans and specifications which are prepared,
submitted, reviewed and approved by Landlord in its reasonable discretion; and
(f) At the expiration or earlier termination of the Lease or time for
removal of the Antenna, Tenant must remove or cause the removal of the Antenna
and its related facilities from the Building at Tenant's sole cost and expense.
Such removal shall be done in a good and workmanlike manner, and Tenant at its
sole cost and expense shall repair and restore any resulting injury or damage to
the Building and Common Areas. If Tenant fails to complete the removal by the
expiration or earlier termination of this Lease, then at Landlord's election,
the Antenna and its related facilities shall be deemed abandoned and at
Landlord's option in its sole and absolute discretion, shall thereupon become
the property of Landlord, in which case Landlord may possess, use, dispose of
and otherwise enjoy the beneficial incidents of the ownership thereof as
Landlord deems appropriate. Tenant hereby irrevocably waives any rights it has
to the contrary under applicable laws.
Tenant agrees and understands that the review of all plans by Landlord is
solely to protect the interests of Landlord in the Building, and Landlord shall
not be the guarantor of, nor responsible for, the correctness, completeness or
accuracy of any such plans or compliance of such plans with applicable laws.
Landlord's approval of any plans, work or any matter under this section shall
not: (i) constitute an opinion or agreement by Landlord that such plans for the
Antenna are in compliance with all applicable laws, (ii) impose any present or
future liability on Landlord; (iii) constitute a waiver of Landlord's rights
hereunder or under the Lease; (iv) impose on Landlord any responsibility for a
design and/or construction defect or fault in the Antenna, (v) constitute a
representation or warranty regarding the accuracy, completeness or correctness
thereof of any plans, or (vi) such plans or any work are in accordance with
industry standards or will make the Antenna operational or functional upon
completion.
3
