1
EXHIBIT 10.26
LEASE
DATED APRIL 18, 2000
BY AND BETWEEN
AMB PROPERTY, L.P.
as Landlord
and
HARMONIC, INC.
as Tenant
AFFECTING PREMISES COMMONLY KNOWN AS
603-611 BALTIC WAY
SUNNYVALE, CALIFORNIA
2
TABLE OF CONTENTS
Page
1. Basic Provisions 1
1.1 Parties 1
1.2 Premises 1
1.3 Term 1
1.4 Base Rent 1
1.5 Tenant's Share of Operating Expenses 1
1.6 Tenant's Estimated Monthly Rent Payment 1
1.7 Security Deposit 1
1.8 Permitted Use 1
1.9 Guarantor I
1.10 Addenda and Exhibits I
1.11 Address for Rent Payments 1
2. Premises, Parking and Common Areas 2
2.1 Letting 2
2.2 Common Areas - Definition 2
2.3 Common Areas - Tenant's Rights 2
2.4 Common Areas - Rules and Regulations 2
2.5 Common Area Changes 2
3. Term 2
3.1 Term 2
3.2 Delay in Possession 2
3.3 Commencement Date Certificate 2
4. Rent 2
4.1 Base Rent 2
4.2 Operating Expenses 3
5. Security Deposit 3
6. Use 4
6.1 Permitted Use 4
6.2 Hazardous Substances 4
6.3 Tenant's Compliance with Requirements 5
6.4 Inspection: Compliance with Law 5
7. Maintenance, Repairs, Trade Fixtures and Alterations 5
7.1 Tenant's Obligations 5
7.2 Landlord's Obligations 6
7.3 Alterations 6
7.4 Surrender/Restoration 6
8. Insurance; Indemnity 6
8.1 Payment of Premiums 7
8.2 Tenant's Insurance 7
8.3 Landlord's Insurance 7
8.4 Waiver of Subrogation 7
8.5 Indemnity 7
8.6 Exemption of Landlord from Liability 8
9. Damage or Destruction 8
9.1 Termination Right 8
9.2 Damage Caused by Tenant 8
10. Real Property Taxes 8
10.1 Payment of Real Property Taxes 8
10.2 Real Property Tax Definition 9
10.3 Additional Improvements 9
10.4 Joint Assessment 9
10.5 Tenant's Property Taxes 9
11. Utilities 9
12. Assignment and Subletting 9
12.1 Landlord's Consent Required 9
12.2 Rent Adjustment 9
13. Default; Remedies 9
13.1 Default 10
13.2 Remedies 10
13.3 Late Charges 10
i
3
TABLE OF CONTENTS
Page
14. Condemnation 10
15. Estoppel Certificate and Financial Statements 11
15.1 Estoppel Certificate 11
15.2 Financial Statement 11
16. Additional Covenants and Provisions 11
16.1 Severability 11
16.2 Interest on Past-Due Obligations 11
16.3 Time of Essence 11
16.4 Landlord Liability 11
16.5 No Prior or Other Agreements 11
16.6 Notice Requirements 11
16.7 Date of Notice 11
16.8 Waivers 12
16.9 Holdover 12
16.10 Cumulative Remedies 12
16.11 Binding Effect; Choice of Law 12
16.12 Landlord 12
16.13 Attorneys' Fees and Other Costs 12
16.14 Landlord's Access: Showing Premises; Repairs 12
16.15 Signs 12
16.16 Termination: Merger 12
16.17 Quiet Possession 12
16.18 Subordination: Attornment; Non-Disturbance 13
16.19 Rules and Regulations 13
16.20 Security Measures 13
16.21 Reservations 13
16.22 Conflict 13
16.23 Offer 13
16.24 Amendments 13
16.25 Multiple Parties 14
16.26 Authority 14
Signatures 14
EXHIBIT A
EXHIBIT B
Not Applicable
Not Applicable
Not Applicable
Not Applicable
EXHIBIT G
Not Applicable
EXHIBIT I
ii
4
AMB PROPERTY CORPORATION
INDUSTRIAL MULTI-TENANT LEASE
1. BASIC PROVISIONS ("Basic Provisions").
1.1 Parties: This Lease ("Lease") dated April 18, 2000, is made by and
between AMB PROPERTY, L.P., a Delaware limited partnership, ("Landlord") and
HARMONIC, INC., a Delaware corporation ("Tenant") (collectively the "Parties,"
or individually a "Party").
1.2 Premises: The area consisting of 43,500 square feet of leasable area
as outlined on Exhibit A attached hereto ("Premises"), of the building
("Building") located at 603611 Baltic Way in the City of Sunnyvale, State of
California. The Building is located in the industrial center commonly known as
MBC/Moffett Business Center (the "Industrial Center"). Tenant shall have
non-exclusive rights to the Common Areas (as defined in Paragraph 2.3 below),
but shall not have any rights to the roof, exterior walls or utility raceways of
the Building or to any other buildings in the Industrial Center. The Premises,
the Building, the Common Areas, the land upon which they are located and all
other buildings and improvements thereon are herein collectively referred to as
the "Industrial Center."
1.3 Term: Eight (8) years and Nine (9) months ("Term") commencing
January 1, 2002 ("Commencement Date") and ending September 30, 2010 ("Expiration
Date").
1.4 Base Rent: $95,700.00 per month ("Base Rent"). $95,700.00 payable on
execution of this Lease for period January 1, 2002 through and including January
31, 2002.
1.5 Tenant's Share of Operating Expenses ("Tenant's Share"):
(a) Industrial Center 15.24%
(b) Building 100%
1.6 Tenant's Estimated Monthly Rent Payment: Following is the estimated
monthly Rent payment to Landlord pursuant to the provisions of this Lease. This
estimate is made at the inception of the Lease and is subject to adjustment
pursuant to the provisions of this Lease:
(a) Base Rent (Paragraph 4.1) $ 95,700.00
(b) Operating Expenses (Paragraph 4.2;
excluding Real Property Taxes, Landlord
Insurance) $ 2,838.00
(c) Landlord Insurance (Paragraph 8.3) $ 254.00
(d) Real Property Taxes (Paragraph 10) $ 3,565.00
Estimated Monthly Payment $102,357.00
1.7 Security Deposit: $130,500.00 ("Security Deposit").
1.8 Permitted Use ("Permitted Use") Research and development,
manufacturing, storage and distribution, offices and marketing and other legal
related uses.
1.9 Guarantor: N/A
1.10 Addenda and Exhibits: Attached hereto are the following Addenda and
Exhibits, all of which constitute a part of this Lease:
(a) Addenda: First Addendum to Lease
(b) Exhibits: Exhibit A: Diagram of Premises.
Exhibit B: Commencement Date Certificate.
Exhibit C:
Exhibit D:
Exhibit E:
Exhibit F:
Exhibit G: Hazardous Materials Questionnaire.
Exhibit H:
Exhibit I: Rules and Regulations.
1.11 Address for Rent Payments: All amounts payable by Tenant to
Landlord shall until further notice from Landlord be paid to AMB PROPERTY L.
P./MBC MOFFETT BUSINESS CENTER, C/O ORCHARD PROPERTIES at the following address:
File No.: 3750789034
P.O. Box 840349
Dallas, TX 75284-0349
1
5
2. PREMISES, PARKING AND COMMON AREAS.
2.1 Letting. Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord the Premises upon all of the terms, covenants and conditions set
forth in this Lease. Any statement of square footage set forth in this Lease or
that may have been used in calculating Base Rent and/or Operating Expenses is an
approximation which Landlord and Tenant agree is reasonable and the Base Rent
and Tenant's Share based thereon is not subject to revision whether or not the
actual square footage is more or less.
2.2 Common Areas - Definition. "Common Areas" are all areas and
facilities outside the Premises and within the exterior boundary line of the
Industrial Center and interior utility raceways within the Premises that are
provided and designated by the Landlord from time to time for the general
non-exclusive use of Landlord, Tenant and other tenants of the Industrial Center
and their respective employees, suppliers, shippers, tenants, contractors and
invitees.
2.3 Common Areas - Tenant's Rights. Landlord hereby grants to Tenant,
for the benefit of Tenant and its employees, suppliers, shippers, contractors,
customers and invitees, during the term of this Lease, the non-exclusive right
to use, in common with others entitled to such use, the Common Areas as they
exist from time to time, subject to any rights, powers, and privileges reserved
by Landlord under the terms hereof or under the terms of any rules and
regulations or covenants, conditions and restrictions governing the use of the
Industrial Center.
2.4 Common Areas - Rules and Regulations. Landlord shall have the
exclusive control and management of the Common Areas and shall have the right,
from time to time, to establish, modify, amend and enforce reasonable Rules and
Regulations with respect thereto in accordance with Paragraph 16.19.
2.5 Common Area Changes. Landlord shall have the right, in Landlord's
sole discretion, from time to time:
(a) To make changes to the Common Areas, including, without
limitation, changes in the locations, size, shape and number of driveways,
entrances, parking spaces, parking areas, loading and unloading areas, ingress,
egress, direction of traffic, landscaped areas, walkways and utility raceways;
(b) To close temporarily any of the Common Areas for maintenance
purposes so long as reasonable access to the Premises remains available;
(c) To designate other land outside the boundaries of the
Industrial Center to be a part of the Common Areas;
(d) To add additional buildings and improvements to the Common
Areas;
(e) To use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Industrial Center, or any portion
thereof; and
(f) To do and perform such other acts and make such other changes
in, to or with respect to the Common Areas and Industrial Center as Landlord
may, in the exercise of sound business judgment, deem to be appropriate.
3. TERM.
3.1 Term. The Commencement Date, Expiration Date and Term of this Lease
are as specified in Paragraph 1.3.
3.2 Delay in Possession. If for any reason Landlord cannot deliver
possession of the Premises to Tenant by the Commencement Date, Landlord shall
not be subject to any liability therefor, nor shall such failure affect the
validity of this Lease or the obligations of Tenant hereunder. In such case,
Tenant shall not, except as otherwise provided herein, be obligated to pay Rent
or perform any other obligation of Tenant under the terms of this Lease until
Landlord delivers possession of the Premises to Tenant. The term of the Lease
shall COMMENCE 30 days following notice to Tenant that Landlord is prepared to
tender possession of the Premises to Tenant. If possession of the Premises is
not delivered to Tenant within 120 days after the Commencement Date and such
delay is not due to Tenant's acts, failure to act or omissions Tenant may by
notice in writing to Landlord within 10 days after the end of said 120 day
period cancel this Lease and the parties shall be discharged from all
obligations hereunder. If such written notice of Tenant is not received by
Landlord within said 10 day period, Tenant's right to cancel this Lease shall
terminate.
3.3 Commencement Date Certificate. At the request of Landlord, Tenant
shall execute and deliver to Landlord a completed certificate ("Commencement
Date Certificate") in the form attached hereto as Exhibit B.
4. RENT.
4.1 Base Rent. Tenant shall pay to Landlord Base Rent and other monetary
obligations of Tenant to Landlord under the terms of this Lease (such other
monetary obligations are herein referred to as "Additional Rent") in lawful
money of the United States, without offset or deduction, in advance on or before
the first day of each month. Base Rent and Additional Rent for any period during
the term hereof which is for less than one full month shall be prorated based
upon the actual number of days of the month involved. Payment of
2
6
Base Rent and Additional Rent shall be made to Landlord at its address stated
herein or to such other persons or at such other addresses as Landlord may from
time to time designate in writing to Tenant. Base Rent and Additional Rent are
collectively referred to as "Rent". All monetary obligations of Tenant to
Landlord under the terms of this Lease are deemed to be rent.
4.2 Operating Expenses. Tenant shall pay to Landlord on the first day of
each month during the term hereof, in addition to the Base Rent, Tenant's Share
of all Operating Expenses in accordance with the following provisions:
(a) "Operating Expenses" are all costs incurred by Landlord
relating to the ownership, management and operation of the Industrial Center,
Building and Premises including, but not limited to, the following:
(i) The management, operation, repair, maintenance and
replacement in neat, clean, good order and condition of the Common Areas,
including parking areas, loading and unloading areas, trash areas, roadways,
sidewalks, walkways, parkways, driveways, landscaped areas, striping, bumpers,
irrigation systems, drainage systems, lighting facilities, fences and gates,
exterior signs and tenant directories.
(ii) Water, gas, electricity, telephone and other
utilities servicing the Common Areas.
(iii) Trash disposal, janitorial services, snow removal,
property management and security services.
(iv) Reserves set aside for maintenance, repair and
replacement of the Common Areas and Building.
(v) Real Property Taxes.
(vi) Premiums for the insurance policies maintained by
Landlord under Paragraph 8 hereof.
(vii) Environmental monitoring and insurance programs.
(viii) Monthly amortization of capital improvements to the
Common Areas and the Building. The monthly amortization of any given capital
improvement shall be the sum of the (i) quotient obtained by dividing the cost
of the capital improvement by Landlord's estimate of the number of months of
useful life of such improvement plus (ii) an amount equal to the cost of the
capital improvement times 1/12 of the lesser of 12% or the maximum annual
interest rate permitted by law.
(ix) Maintenance of the Building including, but not
limited to, painting, caulking and repair and replacement of Building
components, including, but not limited to, roof, elevators and fire detection
and sprinkler systems.
(x) If Tenant fails to maintain the Premises, any
expense incurred by Landlord for such maintenance.
(b) Tenant's Share of Operating Expenses that are not
specifically attributed to the Premises or Building ("Common Area Operating
Expenses") shall be that percentage shown in Paragraph 1.5(a). Tenant's Share of
Operating Expenses that are attributable to the Building ("Building Operating
Expenses") shall be that percentage shown in Paragraph 1.5(b). Landlord in its
sole discretion shall determine which Operating Expenses are Common Area
Operating Expenses, Building Operating Expenses or expenses to be entirely borne
by Tenant.
(c) The inclusion of the improvements, facilities and services
set forth in Subparagraph 4.2(a) shall not be deemed to impose any obligation
upon Landlord to either have said improvements or facilities or to provide those
services.
(d) Tenant shall pay monthly in advance on the same day as the
Base Rent is due Tenant's Share of estimated Operating Expenses in the amount
set forth in Paragraph 1.6. Landlord shall deliver to Tenant within 90 days
after the expiration of each calendar year a reasonably detailed statement
showing Tenant's Share of the actual Operating Expenses incurred during the
preceding year. If Tenant's estimated payments under this Paragraph 4(d) during
the preceding year exceed Tenant's Share as indicated on said statement, Tenant
shall be credited the amount of such overpayment against Tenant's Share of
Operating Expenses next becoming due. If Tenant's estimated payments under this
Paragraph 4.2(d) during said preceding year were less than Tenant's Share as
indicated on said statement, Tenant shall pay to Landlord the amount of the
deficiency within 30 days after delivery by Landlord to Tenant of said
statement. At any time Landlord may adjust the amount of the estimated Tenant's
Share of Operating Expenses to reflect Landlord's estimate of such expenses for
the year.
5. SECURITY DEPOSIT. Tenant shall deposit with Landlord prior to
Commencement Date or Early Occupancy the Security Deposit set forth in Paragraph
1.7 as security for Tenant's faithful performance of Tenant's obligations under
this Lease. If Tenant fails to pay Base Rent or Additional Rent or otherwise
defaults under this Lease (as defined in Paragraph 13.1), Landlord may use the
Security Deposit for the payment of any amount due Landlord or to reimburse or
compensate Landlord for any liability, cost, expense, loss or damage (including
attorney's fees) which Landlord may suffer or incur by reason thereof. Tenant
shall on demand
3
7
pay Landlord the amount so used or applied so as to restore the Security Deposit
to the amount set forth in Paragraph 1.7. Landlord shall not be required to keep
all or any part of the Security Deposit separate from its general accounts.
Landlord shall, at the expiration or earlier termination of the term hereof and
after Tenant has vacated the Premises, return to Tenant that portion of the
Security Deposit not used or applied by Landlord. No part of the Security
Deposit shall be considered to be held in trust, to bear interest, or to be
prepayment for any monies to be paid by Tenant under this Lease.
6. USE.
6.1 Permitted Use. Tenant shall use and occupy the Premises only for the
Permitted Use set forth in Paragraph 1.8. Tenant shall not commit any nuisance,
permit the emission of any objectionable noise or odor, suffer any waste, make
any use of the Premises which is contrary to any law or ordinance or which will
invalidate or increase the premiums for any of Landlord's insurance. Tenant
shall not service, maintain or repair vehicles on the Premises, Building or
Common Areas. Tenant shall not store foods, pallets, drums or any other
materials outside the Premises.
6.2 Hazardous Substances.
(a) Reportable Uses Require Consent. The term "Hazardous
Substance" as used in this Lease shall mean any product, substance, chemical,
material or waste whose presence, nature, quantity and/or intensity of
existence, use, manufacture, disposal, transportation, spill, release or effect,
either by itself or in combination with other materials expected to be on the
Premises, is either: (i) potentially injurious to the public health, safety or
welfare, the environment, or the Premises; (ii) regulated or monitored by any
governmental authority; or (iii) a basis for potential liability of Landlord to
any governmental agency or third party under any applicable statute or common
law theory. Hazardous Substance shall include, but not be limited to,
hydrocarbons, petroleum, gasoline, crude oil or any products or by-products
thereof. Tenant shall not engage in any activity in or about the Premises which
constitutes a Reportable Use (as hereinafter defined) of Hazardous Substances
without the express prior written consent of Landlord and compliance in a timely
manner (at Tenant's sole cost and expense) with all Applicable Requirements (as
defined in Paragraph 6.3). "Reportable Use" shall mean (i) the installation or
use of any above or below ground storage tank, (ii) the generation, possession,
storage, use, transportation, or disposal of a Hazardous Substance that requires
a permit from, or with respect to which a report, notice, registration or
business plan is required to be filed with, any governmental authority, and
(iii) the presence in, on or about the Premises of a Hazardous Substance with
respect to which any Applicable Requirements require that a notice be given to
persons entering or occupying the Premises or neighboring properties.
Notwithstanding the foregoing, Tenant may, without Landlord's prior consent, but
upon notice to Landlord and in compliance with all Applicable Requirements, use
any ordinary and customary materials reasonably required to be used by Tenant in
the normal course of the Permitted Use, so long as such use is not a Reportable
Use and does not expose the Premises, or neighboring properties to any
meaningful risk of contamination or damage or expose Landlord to any liability
therefor. In addition, Landlord may (but without any obligation to do so)
condition its consent to any Reportable Use of any Hazardous Substance by Tenant
upon Tenant's giving Landlord such additional assurances as Landlord, in its
reasonable discretion, deems necessary to protect itself, the public, the
Premises and the environment against damage, contamination or injury and/or
liability therefor, including but not limited to the installation (and, at
Landlord's option, removal on or before Lease expiration or earlier termination)
of reasonably necessary protective modifications to the Premises (such as
concrete encasements) and/or the deposit of an additional Security Deposit.
(b) Duty to Inform Landlord. If Tenant knows, or has reasonable
cause to believe, that a Hazardous Substance is located in, under or about the
Premises or the Building, Tenant shall immediately give Landlord written notice
thereof, together with a copy of any statement, report, notice, registration,
application, permit, business plan, license, claim, action, or proceeding given
to, or received from, any governmental authority or private party concerning the
presence, spill, release, discharge of, or exposure to, such Hazardous
Substance. Tenant shall not cause or permit any Hazardous Substance to be
spilled or released in, on, under or about the Premises (including, without
limitation, through the plumbing or sanitary sewer system).
(c) Indemnification by Tenant. Tenant shall indemnify, protect,
defend and hold Landlord, Landlord's affiliates, Lenders, and the officers,
directors, shareholders, partners, employees, managers, independent contractors,
attorneys and agents of the foregoing ("Landlord Entities") and the Premises,
harmless from and against any and all damages, liabilities, judgments, costs,
claims, liens, expenses, penalties, loss of permits and attorneys' and
consultants' fees arising out of or involving any Hazardous Substance brought
onto the Premises by or for Tenant or by any of Tenant's employees, agents,
contractors or invitees. Tenant's obligations under this Paragraph 6.2(c) shall
include, but not be limited to, the effects
4
8
of any contamination or injury to person, property or the environment created or
suffered by Tenant, and the cost of investigation (including consultants' and
attorneys' fees and testing), removal, remediation, restoration and/or abatement
thereof, or of any contamination therein involved. Tenant's obligations under
this Paragraph 6.2(c) shall survive the expiration or earlier termination of
this Lease.
(D). LANDLORD'S REPRESENTATION REGARDING HAZARDOUS MATERIALS.
LANDLORD HEREBY MAKES THE FOLLOWING REPRESENTATIONS TO TENANT AS OF THE
EFFECTIVE DATE WITHOUT HAVING MADE ANY INVESTIGATION THEREOF (AND WITHOUT BEING
REQUIRED TO MAKE OR BEING DEEMED TO HAVE MADE ANY SUCH INVESTIGATION) TO VERIFY
THE ACCURACY THEREOF AND IS SUBJECT TO AND QUALIFIED BY ALL INFORMATION AND
DISCLOSURES MADE TO TENANT BY LANDLORD. TO THE BEST OF THE LANDLORD'S KNOWLEDGE:
1. THE SOIL AND GROUNDWATER ON OR UNDER THE PROJECT DOES
NOT CONTAIN HAZARDOUS MATERIALS IN AMOUNTS WHICH VIOLATE ANY HAZARDOUS MATERIALS
LAWS TO THE EXTENT THAT ANY GOVERNMENTAL ENTITY COULD REQUIRE EITHER LANDLORD OR
TENANT TO TAKE ANY REMEDIAL ACTION WITH RESPECT TO SUCH HAZARDOUS MATERIALS.
2. DURING THE TIME THAT LANDLORD HAS OWNED THE PROJECT,
LANDLORD HAS RECEIVED NO WRITTEN NOTICE OF: (I) ANY VIOLATION, OR ALLEGED
VIOLATION, OF ANY HAZARDOUS MATERIALS LAW WITH RESPECT TO THE PROJECT THAT HAS
NOT BEEN REMEDIATED TO THE EXTENT THAT NO OTHER REMEDIATION IS THEN LEGALLY
REQUIRED BY APPLICABLE LAW; (II) ANY PENDING CLAIMS RELATING TO THE PRESENCE OF
HAZARDOUS MATERIALS ON THE PROJECT; OR, (III) ANY PENDING INVESTIGATION BY ANY
GOVERNMENTAL AGENCY CONCERNING THE PROJECT RELATING TO HAZARDOUS MATERIALS.
6.3 Tenant's Compliance with Requirements. Tenant shall, at Tenant's
sole cost and expense, fully, diligently and in a timely manner, comply with all
"Applicable Requirements," which term is used in this Lease to mean all laws,
rules, regulations, ordinances, directives, covenants, easements and
restrictions of record, permits, the requirements of any applicable fire
insurance underwriter or rating bureau, and the REASONABLE recommendations of
Landlord's engineers and/or consultants, relating in any manner to the Premises
(including but not limited to matters pertaining to (i) industrial hygiene, (ii)
environmental conditions on, in, under or about the Premises, including soil and
groundwater conditions, and (iii) the use, generation, manufacture, production,
installation, maintenance, removal, transportation, storage, spill or release of
any Hazardous Substance), now in effect or which may hereafter come into effect.
Tenant shall, within 5 days after receipt of Landlord's written request, provide
Landlord with copies of all documents and information evidencing Tenant's
compliance with any Applicable Requirements and shall immediately upon receipt,
notify Landlord in writing (with copies of any documents involved) of any
threatened or actual claim, notice, citation, warning, complaint or report
pertaining to or involving failure by Tenant or the Premises to comply with any
Applicable Requirements.
6.4 Inspection; Compliance with Law. In addition to Landlord's
environmental monitoring and insurance program, the cost of which is included in
Operating Expenses, Landlord and the holders of any mortgages, deeds of trust or
ground leases on the Premises ("Lenders") shall have the right to enter the
Premises at any time in the case of an emergency, and otherwise at reasonable
times PROVIDED LANDLORD HAS PROVIDED TWENTY-FOUR (24) HOUR NOTICE TO TENANT, for
the purpose of inspecting the condition of the Premises and for verifying
compliance by Tenant with this Lease and all Applicable Requirements. Landlord
shall be entitled to employ experts and/or consultants in connection therewith
to advise Landlord with respect to Tenant's installation, operation, use,
monitoring, maintenance, or removal of any Hazardous Substance on or from the
Premises. The cost and expenses of any such inspections shall be paid by the
party requesting same unless a violation of Applicable Requirements exists or is
imminent or the inspection is requested or ordered by a governmental authority.
In such case, Tenant shall upon request reimburse Landlord or Landlord's Lender,
as the case may be, for the costs and expenses of such inspections.
7. MAINTENANCE, REPAIRS, TRADE FIXTURES AND ALTERATIONS.
7.1 Tenant's Obligations. Subject to the provisions of Paragraph 7.2
(Landlord's Obligations), Paragraph 9 (Damage or Destruction) and Paragraph 14
(Condemnation), Tenant shall, at Tenant's sole cost and expense and at all
times, keep the Premises and every part thereof in good order, condition and
repair (whether or not such portion of the Premises requiring repair, or the
means of repairing the same, are reasonable or readily accessible to Tenant and
whether or not the need for such repairs occurs as a result of Tenant's use, any
prior use, the elements or the age of such portion of the Premises) including,
without limiting the generality of the foregoing, all equipment or facilities
specifically serving the Premises, such as plumbing, heating, air conditioning,
ventilating, electrical, lighting facilities, boilers, fired or unfired pressure
vessels, fire hose connectors if within the Premises, fixtures, interior walls,
interior surfaces of exterior walls, ceilings, floors, windows, doors, plate
glass, and skylights, but excluding any items which are the responsibility of
Landlord pursuant to Paragraph 7.2
5
9
below. Tenant's obligations shall include restorations, replacements or renewals
when necessary to keep the Premises and all improvements thereon or a part
thereof in good order, condition and state of repair.
7.2 Landlord's Obligations. Subject to the provisions of Paragraph 6
(Use), Paragraph 7.1 (Tenant's Obligations), Paragraph 9 (Damage or Destruction)
and Paragraph 14 (Condemnation), Landlord at its expense and not subject to
reimbursement pursuant to Paragraph 4.2, shall keep in good order, condition and
repair the foundations and exterior walls of the Building and utility systems
outside the Building. Landlord, subject to reimbursement pursuant to Paragraph
4.2, shall keep in good order, condition and repair the Building roof and Common
Areas.
7.3 Alterations. Construction by Tenant of Alterations shall be governed
by the following:
A. Except as set forth below, Tenant shall not construct any
Tenant Alterations or otherwise alter, improve, modify, or perform any work of
improvement to the Premises without Landlord's prior written approval. However,
Tenant shall be entitled, without Landlord's prior approval, to make Tenant
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 Alterations, together do not exceed the
Permitted Tenant Alterations Limit per work of improvement. In the event
Landlord's approval for any Tenant Alterations is required, Tenant shall not
construct the Tenant Alterations until Landlord has approved in writing the
plans and specifications therefor. Such Tenant Alterations shall be constructed
substantially in compliance with such approved plans and specifications by a
licensed contractor first approved by Landlord. All Tenant Alterations (whether
Landlord's consent is required or not) shall be constructed by a licensed
contractor in accordance with all Laws (including the ADA) using new materials
of good quality.
B. Tenant shall not commence construction of any Tenant
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
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 the Lease.
C. All Tenant Alterations shall remain the property of Tenant
during the Lease Term but shall not be altered or removed from the Premises
except with Landlord's advance written permission. At the expiration or sooner
termination of the Lease Term, all Tenant 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 Alterations, Tenant shall so remove such Tenant Alterations
prior to the expiration or sooner termination of the Lease Term. Notwithstanding
the foregoing, Tenant shall not be obligated to remove any Tenant 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 Leasehold
Improvement 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 Leasehold Improvement 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
Leasehold Improvement at the expiration of the Lease Term.
D. Landlord's consent to the construction of Tenant Alterations
may be withheld in Landlord's sole discretion. Landlord's consent to
construction of Tenant Alterations and Landlord's approval of plans and
specifications for Tenant Alterations shall not create any responsibility or
liability on Landlord's part in regard to the completeness, competency, design
sufficiency, or compliance with Law of such Tenant Alterations or the plans and
specifications therefor.
7.4 Surrender/Restoration. Tenant shall surrender the Premises by the
end of the last day of the Lease term or any earlier termination date, clean and
free of debris and in good operating order, condition and state of repair
ordinary wear and tear excepted. Without limiting the generality of the above,
Tenant shall remove all personal property, trade fixtures and floor bolts, patch
all floors and cause all lights to be in good operating condition.
8. INSURANCE; INDEMNITY.
8.1 Payment of Premiums. The cost of the premiums for the insurance
policies maintained by Landlord under this Paragraph 8 shall be a Common Area
Operating Expense pursuant to Paragraph 4.2 hereof. Premiums for policy periods
commencing prior to, or
6
10
extending beyond, the term of this Lease shall be prorated to coincide with the
corresponding Commencement Date of Expiration Date.
8.2 Tenant's Insurance.
(i) At its sole cost and expense, Tenant shall maintain in full
force and effect during the Term of the lease the following insurance coverages
insuring against claims which may arise from or in connection with the Tenant's
operation and use of the leased premises.
(a) Commercial General Liability with minimum limits of
$1,000,000 per occurrence; $3,000,000 general aggregate for bodily injury,
personal injury and property damage. If required by Landlord, liquor liability
coverage will be included.
(b) Workers' Compensation insurance with statutory limits
and Employers Liability with a $1,000,000 per accident limit for bodily injury
or disease.
(c) Automobile Liability covering all owned, non-owned and
hired vehicles with a $1,000,000 per accident limit for bodily injury and
property damage.
(d) Property insurance against all risks of loss to any
tenant improvements or betterments and business personal property on a full
replacement cost basis with no coinsurance penalty provision; and Business
Interruption Insurance with a limit of liability representing loss of at least
approximately THREE months of income.
(ii) Tenant shall deliver to AMB certificates of all insurance
reflecting evidence of required coverages prior to initial occupancy; and
annually thereafter.
(iii) If, in the opinion of Landlord's insurance advisor, the
amount of scope of such coverage is deemed inadequate at any time during the
Term, Tenant shall increase such coverage to such reasonable amounts or scope as
Landlord's advisor deems adequate.
(iv) All insurance required under Paragraph 8.2 (i) shall be
primary and non-contributory (ii) shall provide for severability of interests,
(iii) shall be issued by insurers, licensed to do business in the state in which
the Premises are located and which are rated A:VII or better by Best's Key
Rating Guide, (iv) shall be endorsed to include Landlord and such other persons
or entities as Landlord may from time to time designate, as additional insureds
(Commercial General Liability only), and (v) shall be endorsed to provide at
least 30-days prior notification of cancellation or material change in coverage
to said additional insureds.
8.3 Landlord's Insurance. Landlord may, but shall not be obligated to,
maintain all risk, including earthquake and flood, insurance covering the
buildings within the Industrial Center, Commercial General Liability and such
other insurance in such amounts and covering such other liability or hazards as
deemed appropriate by Landlord. The amount and scope of coverage of Landlord's
insurance shall be determined by Landlord from time to time in its sole
discretion and shall be subject to such deductible amounts as Landlord may
elect. Landlord shall have the right to reduce or terminate any insurance or
coverage. Premiums for any such insurance shall be a Common Area Operating
Expense.
8.4 Waiver of Subrogation. To the extent permitted by law and without
affecting the coverage provided by insurance required to be maintained
hereunder, Landlord and Tenant each waive any right to recover against the other
on account of any and all claims Landlord or Tenant may have against the other
with respect to property insurance actually carried, or required to be carried
hereunder, to the extent of the proceeds realized from such insurance coverage.
8.5 Indemnity. TO THE FULLEST EXTENT PERMITTED BY LAW, TENANT HEREBY
AGREES TO DEFEND (WITH ATTORNEYS ACCEPTABLE TO LANDLORD), INDEMNIFY, PROTECT AND
HOLD HARMLESS LANDLORD AND LANDLORD'S AGENTS AND ANY SUCCESSORS TO ALL OR ANY
PORTION OF LANDLORD'S INTEREST IN THE PREMISES AND THEIR DIRECTORS, OFFICERS,
PARTNERS, EMPLOYEES, AUTHORIZED AGENTS, REPRESENTATIVES, AFFILIATES AND
MORTGAGES, FROM AND AGAINST ANY AND ALL DAMAGE, LOSS, CLAIM, LIABILITY AND
EXPENSE INCLUDING, BUT NOT LIMITED TO, ACTUAL ATTORNEY'S FEES AND LEGAL COSTS,
INCURRED DIRECTLY OR INDIRECTLY BY REASON OF ANY CLAIM, SUIT OR JUDGMENT BROUGHT
BY OR ON BEHALF OF (I) ANY PERSON OR PERSONS FOR DAMAGE, LOSS OR EXPENSE DUE TO,
BUT NOT LIMITED TO, BODILY INJURY OR PROPERTY DAMAGE SUSTAINED BY SUCH PERSON OR
PERSONS WHICH ARISE OUT OF, ARE OCCASIONED BY, OR ARE IN ANY WAY ATTRIBUTABLE TO
THE CONDITION, USE OR OCCUPANCY OF THE PREMISES OR THE ACTS OR OMISSIONS OF THE
TENANT OR TENANT'S AGENTS IN OR ABOUT THE PREMISES OR THE PROJECT (INCLUDING BUT
NOT LIMITED TO ANY EVENT OF DEFAULT HEREUNDER), OR (II) TENANT OR TENANT'S
AGENTS FOR DAMAGE, LOSS OR EXPENSE DUE TO, BUT NOT LIMITED TO, BODILY INJURY OR
PROPERTY DAMAGE WHICH ARISE OUT OF, ARE OCCASIONED BY, OR ARE IN ANY WAY
ATTRIBUTABLE TO THE USE IF ANY OF THE COMMON AREA, EXCEPT TO THE EXTENT CAUSED
SOLELY BY GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF LANDLORD. NOTWITHSTANDING
ANYTHING TO THE CONTRARY IN THIS LEASE, LANDLORD SHALL NOT BE RELEASED OR
INDEMNIFIED FROM, AND SHALL INDEMNIFY, DEFEND, PROTECT AND HOLD HARMLESS TENANT
FROM, ALL DAMAGES, LIABILITIES, JUDGMENTS, ACTIONS, CLAIMS, ATTORNEY'S FEES,
CONSULTANTS' FEES, PAYMENTS, COSTS AND EXPENSES ARISING FROM THE GROSS
NEGLIGENCE OR WILLFUL
7
11
MISCONDUCT OF LANDLORD OR ITS AGENTS, CONTRACTORS OR LICENSEES, OR LANDLORD'S
VIOLATION OR APPLICABLE LAW.
8.6 Exemption of Landlord from Liability. Except to the extent caused by
the gross negligence or willful misconduct of Landlord, Landlord Entities shall
not be liable for and Tenant waives any claims against Landlord Entities for
injury or damage to the person or the property of Tenant, Tenant's employees,
contractors, invitees, customers or any other person in or about the Premises,
Building or Industrial Center from any cause whatsoever, including, but not
limited to, damage or injury which is caused by or results from (i) fire, steam,
electricity, gas, water or rain, or from the breakage, leakage, obstruction or
other defects of pipes, fire sprinklers, wires, appliances, plumbing, air
conditioning or lighting fixtures or (ii) from the condition of the Premises,
other portions of the Building or Industrial Center. Landlord shall not be
liable for any damages arising from any act or neglect of any other tenant of
Landlord nor from the failure by Landlord to enforce the provisions of any other
lease in the Industrial Center. Notwithstanding Landlord's negligence or breach
of this Lease, Landlord shall under no circumstances be liable for injury to
Tenant's business, for any loss of income or profit therefrom or any indirect,
consequential or punitive damages.
9. DAMAGE OR DESTRUCTION.
9.1 Termination Right. Tenant shall give Landlord immediate written
notice of any damage to the Premises. Subject to the provisions of Paragraph
9.2, if the Premises or the Building shall be damaged to such an extent that
there is substantial interference for a period exceeding 90 consecutive days
with the conduct by Tenant of its business at the Premises, Tenant, at any time
prior to commencement of repair of the Premises and following 10 days written
notice to Landlord, may terminate this Lease effective 30 days after delivery of
such notice to Landlord. Such termination shall not excuse the performance by
Tenant of those covenants which under the terms hereof survive termination. Rent
shall be abated in proportion to the degree of interference during the period
that there is such substantial interference with the conduct of Tenant's
business at the Premises. Abatement of rent and Tenant's right of termination
pursuant to this provision shall be Tenant's sole remedy for failure of Landlord
to keep in good order, condition and repair the foundations and exterior walls
of the Building, Building roof, utility systems outside the Building and the
Common Areas.
9.2 Damage Caused by Tenant. Tenant's termination rights under Paragraph
9.1 shall not apply if the damage to the Premises or Building is the result of
any act or omission of Tenant or of any of Tenant's agents, employees,
customers, invitees or contractors ("Tenant Acts"). Any damage resulting from a
Tenant Act shall be promptly repaired by Tenant. Landlord at its option may at
Tenant's expense repair any damage caused by Tenant Acts. Tenant shall continue
to pay all rent and other sums due hereunder and shall be liable to Landlord for
all damages that Landlord may sustain resulting from a Tenant Act.
10. REAL PROPERTY TAXES.
10.1 Payment of Real Property Taxes. Landlord shall pay the Real
Property Taxes due and payable during the term of this Lease and, except as
otherwise provided in Paragraph 10.3, any such amounts shall be included in the
calculation of Operating Expenses in accordance with the provisions of Paragraph
4.2.
10.2 Real Property Tax Definition. As used herein, the term "Real
Property Taxes" is any form of tax or assessment, general, special, ordinary or
extraordinary, imposed or levied upon (a) the Industrial Center, (b) any
interest of Landlord in the Industrial Center, (c) Landlord's right to rent or
other income from the Industrial Center, and/or (d) Landlord's business of
leasing the Premises. Real Property Taxes include (i) any license fee,
commercial rental tax, excise tax, improvement bond or bonds, levy or tax; (ii)
any tax or charge which replaces or is in addition to any of such
above-described "Real Property Taxes" and (iii) any fees, expenses or costs
(including attorney's fees, expert fees and the like) incurred by Landlord in
protesting or contesting any assessments levied or any tax rate. The term "Real
Property Taxes" shall also include any increase resulting from a change in the
ownership of the Industrial Center or Building, the execution of this Lease or
any modification, amendment or transfer thereof. Real Property Taxes for tax
years commencing prior to, or extending beyond, the term of this Lease shall be
prorated to coincide with the corresponding Commencement Date and Expiration
Date.
10.3 Additional Improvements. Operating Expenses shall not include Real
Property Taxes attributable to improvements placed upon the Industrial Center by
other tenants or by Landlord for the exclusive enjoyment of such other tenants.
Notwithstanding Paragraph 10.1 hereof, Tenant shall, however, pay to Landlord at
the time Operating Expenses are payable under Paragraph 4.2, the entirety of any
increase in Real Property Taxes if assessed by reason of improvements placed
upon the Premises by Tenant or at Tenant's request.
10.4 Joint Assessment. If the Building is not separately assessed, Real
Property Taxes allocated to the Building shall be an equitable proportion of the
Real Property Taxes for all of the land and improvements included within the
tax parcel assessed.
8
12
10.5 Tenant's Property Taxes. Tenant shall pay prior to delinquency all
taxes assessed against and levied upon Tenant's improvements, fixtures,
furnishings, equipment and all personal property of Tenant contained in the
Premises or stored within the Industrial Center.
11. UTILITIES. Tenant shall pay directly for all utilities and services
supplied to the Premises, including but not limited to electricity, telephone,
security, gas and cleaning of the Premises, together with any taxes thereon.
12. ASSIGNMENT AND SUBLETTING.
12.1 Landlord's Consent Required.
(a) Tenant shall not assign, transfer, mortgage or otherwise
transfer or encumber (collectively, "assign") or sublet all or any part of
Tenant's interest in this Lease or in the Premises without Landlord's prior
written consent which consent shall not be unreasonably withheld. Relevant
criteria in determining reasonability of consent include, but are not limited
to, credit history of a proposed assignee or sublessee, references from prior
landlords, any change or intensification of use of the Premises or the Common
Areas and any limitations imposed by the Internal Revenue Code and the
Regulations promulgated thereunder relating to Real Estate Investment Trusts.
Assignment or sublet shall not release Tenant from its obligations hereunder.
Tenant shall not (i) sublet or assign or enter into other arrangements such that
the amounts to be paid by the sublessee or assignee thereunder would be based,
in whole or in part, on the income or profits derived by the business activities
of the sublessee or assignee; (ii) sublet the Premises or assign this Lease to
any person in which Landlord owns an interest, directly or indirectly (by
applying constructive ownership rules set forth in Section 856(d)(5) of the
Internal Revenue Code (the "Code"); or (iii) sublet the Premises or assign this
Lease in any other manner which could cause any portion of the amounts received
by Landlord pursuant to this Lease or any sublease to fail to qualify as "rents
from real property" within the meaning of Section 856(d) of the Code, or which
could cause any other income received by Landlord to fail to qualify as income
described in Section 856(c)(2) of the Code. The requirements of this Section
12.1 shall apply to any further subleasing by any subtenant.
(b) A change in the control of Tenant shall constitute an
assignment requiring Landlord's consent. The transfer, on a cumulative basis, of
50% or more of the voting or management control of Tenant shall constitute a
change in control for this purpose.
12.2 Rent Adjustment. If, as of the effective date of any permitted
assignment or subletting the then remaining term of this Lease is less than ONE
(1) YEAR, Landlord may, as a condition to its consent: (i) require that the
amount and adjustment schedule of the rent payable under this Lease be adjusted
to what is then the market value and/or adjustment schedule for property similar
to the Premises as then constituted, as determined by Landlord; or (ii)
terminate the Lease as of the date of assignment or subletting subject to the
performance by Tenant of those covenants which under the terms hereof survive
termination.
13. DEFAULT; REMEDIES.
13.1 Default. The occurrence of any one of the following events shall
constitute an event of default on the part of Tenant ("Default"):
(a) The abandonment of the Premises by Tenant;
(b) Failure to pay any installment of Base Rent, Additional Rent
or any other monies due and payable hereunder, said failure continuing for a
period of 3 business days after the same is due;
(c) A general assignment by Tenant or any guarantor for the
benefit of creditors;
(d) The filing of a voluntary petition in bankruptcy by Tenant or
any guarantor, the filing of a voluntary petition for an arrangement, the filing
of a petition, voluntary or involuntary, for reorganization, or the filing of an
involuntary petition by Tenant's creditors or guarantors;
(e) Receivership, attachment, of other judicial seizure of the
Premises or all or substantially all of Tenant's assets on the Premises;
(f) Failure of Tenant to maintain insurance as required by
Paragraph 8.2;
(g) Any breach by Tenant of its covenants under Paragraph 6.2;
(h) Failure in the performance of any of Tenant's covenants,
agreements or obligations hereunder (except those failures specified as events
of Default in other Paragraphs of this Paragraph 13.1 which shall be governed by
such other Paragraphs), which failure continues for 10 days after written notice
thereof from Landlord to Tenant provided that, if Tenant has exercised
reasonable diligence to cure such failure and such failure cannot be cured
within such 10 day period despite reasonable diligence, Tenant shall not be in
default under this subparagraph unless Tenant fails thereafter diligently and
continuously to prosecute the cure to completion;
(i) Any transfer of a substantial portion of the assets of
Tenant, or any incurrence of a material obligation by Tenant, unless such
transfer or obligation is undertaken
9
13
or incurred in the ordinary course of Tenants business or in good faith for
equivalent consideration, or with Landlord's consent; and
(j) The default of any guarantors of Tenant's obligations
hereunder under any guaranty of this Lease, or the attempted repudiation or
revocation of any such guaranty.
13.2 Remedies. In the event of any Default by Tenant, Landlord shall
have the remedies set forth in the Addendum attached hereto entitled "Landlord's
Remedies in Event of Tenant Default".
13.3 Late Charges. Tenant hereby acknowledges that late payment by
Tenant to Landlord of rent and other sums due hereunder will cause Landlord to
incur costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges. Accordingly, if any installment of rent or
other sum due from Tenant shall not be received by Landlord or Landlord's
designee within 10 days after such amount shall be due, then, without any
requirement for notice to Tenant, Tenant shall pay to Landlord a late charge
equal to 5% of such overdue amount. The parties hereby agree that such late
charge represents a fair and reasonable estimate of the costs Landlord will
incur by reason of late payment by Tenant. Acceptance of such late charge by
Landlord shall in no event constitute a waiver of Tenant's Default with respect
to such overdue amount, nor prevent Landlord from exercising any of the other
rights and remedies granted hereunder. NOTWITHSTANDING ANYTHING TO THE CONTRARY
IN THIS LEASE, IF TENANT IS DELINQUENT IN THE PAYMENT OF RENT AND IS SUBJECT TO
A LATE CHARGE OR INTEREST FEE, LANDLORD AGREES TO WAIVE THE LATE CHARGE OR
INTEREST FEE IF (i) TENANT HAS NOT BEEN LATE IN ITS PAYMENT OF RENT DURING THE
TWELVE (12) MONTH PERIOD PRECEDING THE RENT DELINQUENCY IN QUESTION AND (ii) THE
RENT DUE IS PAID WITHIN FIVE (5) DAYS OF LANDLORD'S WRITTEN NOTICE TO THE TENANT
OF THE DELINQUENCY AMOUNT OWED.
14. CONDEMNATION. If the Premises or any portion thereof are taken under the
power of eminent domain or sold under the threat of exercise of said power (all
of which are herein called "condemnation"), this Lease shall terminate as to the
part so taken as of the date the condemning authority takes title or possession,
whichever first occurs. If more than 10% of the floor area of the Premises, or
more than 25% of the portion of the Common Areas designated for Tenant's
parking, is taken by condemnation, Tenant may, at Tenant's option, to be
exercised in writing within 10 days after Landlord shall have given Tenant
written notice of such taking (or in the absence of such notice, within 10 days
after the condemning authority shall have taken possession) terminate this Lease
as of the date the condemning authority takes such possession. If Tenant does
not terminate this Lease in accordance with the foregoing, this Lease shall
remain in full force and effect as to the portion of the Premises remaining,
except that the Base Rent shall be reduced in the same proportion as the
rentable floor area of the Premises taken bears to the total rentable floor area
of the Premises. No reduction of Base Rent shall occur if the condemnation does
not apply to any portion of the Premises. Any award for the taking of all or any
part of the Premises under the power of eminent domain or any payment made under
threat of the exercise of such power shall be the property of Landlord,
provided, however, that Tenant shall be entitled to any compensation, separately
awarded to Tenant for Tenant's relocation expenses and/or loss of Tenants trade
fixtures. In the event that this Lease is not terminated by reason of such
condemnation, Landlord shall to the extent of its net severance damages in the
condemnation matter, repair any damage to the Premises caused by such
condemnation authority. Tenant shall be responsible for the payment of any
amount in excess of such net severance damages required to complete such repair.
15. ESTOPPEL CERTIFICATE AND FINANCIAL STATEMENTS.
15.1 Estoppel Certificate. Each party (herein referred to as "Responding
Party") shall within 10 days after written notice from the other Party (the
"Requesting Party") execute, acknowledge and deliver to the Requesting Party, to
the extent it can truthfully do so, an estoppel certificate, plus such
additional information, confirmation and/or statements as be reasonably
requested by the Requesting Party.
15.2 Financial Statement. If Landlord desires to finance, refinance, or
sell the Building, Industrial Center or any part thereof, Tenant and all
Guarantors shall deliver to any potential lender or purchaser designated by
Landlord such financial statements of Tenant and such Guarantors as may be
reasonably required by such lender or purchaser, including but not limited to
Tenant's financial statements for the past 3 years. All such financial
statements shall be received by Landlord and such lender or purchaser in
confidence and shall be used only for the purposes herein set forth.
16. ADDITIONAL COVENANTS AND PROVISIONS.
16.1 Severability. The invalidity of any provision of this Lease, as
determined by a court of competent jurisdiction, shall not affect the validity
of any other provision hereof.
16.2 Interest on Past-Due Obligations. Any monetary payment due Landlord
hereunder not received by Landlord within 10 days following the date on which it
was due shall
10
14
bear interest from the date due at 12% per annum, but not exceeding the maximum
rate allowed by law in addition to the late charge provided for in Paragraph
13.3.
16.3 Time of Essence. Time is of the essence with respect to the
performance of all obligations to be performed or observed by the Parties under
this Lease.
16.4 Landlord Liability. Tenant, its successors and assigns, shall not
assert nor seek to enforce any claim for breach of this Lease against any of
Landlord's assets other than Landlord's interest in the Industrial Center.
Tenant agrees to look solely to such interest for the satisfaction of any
liability or claim against Landlord under this Lease. In no event whatsoever
shall Landlord (which term shall include, without limitation, any general or
limited partner, trustees, beneficiaries, officers, directors, or stockholders
of Landlord) ever be personally liable for any such liability.
16.5 No Prior or Other Agreements. This Lease contains all agreements
between the Parties with respect to any matter mentioned herein, and supersedes
all oral, written prior or contemporaneous agreements or understandings.
16.6 Notice Requirements. All notices required or permitted by this
Lease shall be in writing and may be delivered in person (by hand or by
messenger or courier service) or may be sent by regular, certified or registered
mail or U.S. Postal Service Express Mail, with postage prepaid, or by facsimile
transmission during normal business hours, and shall be deemed sufficiently
given if served in a manner specified in the Paragraph 16.6. The addresses noted
adjacent to a Party's signature on this Lease shall be that Party's address for
delivery or mailing of notice purposes. Either Party may by written notice to
the other specify a different address for notice purposes, except that upon
Tenant's taking possessing of the Premises, the Premises shall constitute
Tenant's address for the purpose of mailing or delivering notices to Tenant. A
copy of all notices required or permitted to be given to Landlord hereunder
shall be concurrently transmitted to such party or parties at such addresses as
Landlord may from time to time hereafter designate by written notice to Tenant.
16.7 Date of Notice. Any notice sent by registered or certified mail,
return receipt requested, shall be deemed given on the date of delivery shown on
the receipt card, or if no delivery date is shown, the postmark thereon. If sent
by regular mail, the notice shall be deemed given 48 hours after the same is
addressed as required herein and mailed with postage prepaid. Notices delivered
by United States Express Mail or overnight courier that guarantees next day
delivery shall be deemed given 24 hours after delivery of the same to the United
States Postal Service or courier. If any notice is transmitted by facsimile
transmission or similar means, the same shall be deemed served or delivered upon
telephone or facsimile confirmation of receipt of the transmission thereof,
provided a copy is also delivered via hand or overnight delivery or certified
mail. If notice is received on a Saturday or a Sunday or a legal holiday, it
shall be deemed received on the next business day.
16.8 Waivers. No waiver by Landlord of a Default by Tenant shall be
deemed a waiver of any other term, covenant or condition hereof, or of any
subsequent Default by Tenant of the same or any other term, covenant or
condition hereof.
16.9 Holdover. Tenant has no right to retain possession of the Premises
or any part thereof beyond the expiration or earlier termination of this Lease.
If Tenant holds over with the consent of Landlord: (i) the Base Rent payable
shall be increased to 150% of the Base Rent applicable during the month
immediately preceding such expiration or earlier termination; (ii) Tenant's
right to possession shall terminate on 30 days notice from Landlord and (iii)
all other terms and conditions of this Lease shall continue to apply. Nothing
contained herein shall be construed as a consent by Landlord to any holding over
by Tenant. Tenant shall indemnify, defend and hold Landlord harmless from and
against any and all claims, demands, actions, losses, damages, obligations,
costs and expenses, including, without limitation, attorneys' fees incurred or
suffered by Landlord by reason of Tenant's failure to surrender the Premises on
the expiration or earlier termination of this Lease in accordance with the
provisions of this Lease.
16.10 Cumulative Remedies. No remedy or election hereunder shall be
deemed exclusive but shall, wherever possible, be cumulative with all other
remedies in law or in equity.
16.11 Binding Effect; Choice of Law. This Lease shall be binding upon
the Parties, their personal representatives, successors and assigns and be
governed by the laws of the State in which the Premises are located. Any
litigation between the Parties hereto concerning this Lease shall be initiated
in the county in which the Premises are located.
16.12 Landlord. The covenants and obligations contained in this Lease on
the part of Landlord are binding on Landlord, its successors and assigns, only
during and in respect of their respective period of ownership of such interest
in the Industrial Center. In the event of any transfer or transfers of such
title to the Industrial Center, Landlord (and in case of any subsequent
transfers or conveyances, the then grantor) shall be concurrently freed and
relieved from and after the date of such transfer or conveyance, without any
further instrument or
11
15
agreement, of all liability with respect to the performance of any covenants or
obligations on the part of Landlord contained in this Lease thereafter to be
performed.
16.13 Attorneys' Fees and Other Costs. If any Party brings an action or
proceeding to enforce the terms hereof or declare rights hereunder, the
Prevailing Party (as hereafter defined) in any such proceeding shall be entitled
to reasonable attorneys' fees. The term "Prevailing Party" shall include,
without limitation, a Party who substantially obtains or defeats the relief
sought. Landlord shall be entitled to attorneys' fees, costs and expenses
incurred in preparation and service of notices of Default and consultations in
connection therewith, whether or not a legal action is subsequently commenced in
connection with such Default or resulting breach. Tenant shall reimburse
Landlord on demand for all reasonable legal, engineering and other professional
services expenses incurred by Landlord in connection with all requests by Tenant
for consent or approval hereunder.
16.14 Landlord's Access; Showing Premises; Repairs. Landlord and
Landlord's agents shall have the right to enter the Premises at any time, in the
case of an emergency, and otherwise at reasonable times upon reasonable notice
for the purpose of showing the same to prospective purchasers, lenders, or
tenants, and making such alterations, repairs, improvements or additions to the
Premises or to the Building, as Landlord may reasonably deem necessary. Landlord
may at any time place on or about the Premises or Building any ordinary "For
Sale" signs and Landlord may at any time during the last 180 days of the term
hereof place on or about the Premises any ordinary "For Lease" signs. All such
activities of Landlord shall be without abatement of rent or liability to
Tenant.
16.15 Signs. Tenant shall not place any signs at or upon the exterior of
the Premises or the Building, except that Tenant may, with Landlord's prior
written consent, install (but not on the roof) such signs as are reasonably
required to advertise Tenant's own business so long as such signs are in a
location designated by Landlord and comply with sign ordinances and the signage
criteria established for the Industrial Center by Landlord.
16.16 Termination; Merger. Unless specifically stated otherwise in
writing by Landlord, the voluntary or other surrender of this Lease by Tenant,
the mutual termination or cancellation hereof, or a termination hereof by
Landlord for Default by Tenant, shall terminate any sublease or lesser estate in
the Premises; provided, however, Landlord shall, in the event of any such
surrender, termination or cancellation, have the option to continue any one or
all of any existing subtenancies.
16.17 Quiet Possession. Upon payment by Tenant of the Base Rent and
Additional Rent for the Premises and the performance of all of the covenants,
conditions and provisions on Tenant's part to be observed and performed under
this Lease, Tenant shall have quiet possession of the Premises for the entire
term hereof subject to all of the provisions of this Lease.
16.18 Subordination; Attornment; Non-Disturbance.
(a) Subordination. This Lease shall be subject and subordinate to
any ground lease, mortgage, deed of trust, or other hypothecation or mortgage
(collectively, "Mortgage") now or hereafter placed by Landlord upon the real
property of which the Premises are a part, to any and all advances made on the
security thereof and to all renewals, modifications, consolidations,
replacements and extensions thereof. Tenant agrees that any person holding any
Mortgage shall have no duty, liability or obligation to perform any of the
obligations of Landlord under this Lease. In the event of Landlord's default
with respect to any such obligation, Tenant will give any Lender, whose name and
address have previously in writing been furnished Tenant, notice of a default by
Landlord. Tenant may not exercise any remedies for default by Landlord unless
and until Landlord and the Lender shall have received written notice of such
default and a reasonable time (not less than 60 DAYS) shall thereafter have
elapsed without the default having been cured. If any Lender shall elect to have
this Lease superior to the lien of its Mortgage and shall give written notice
thereof to Tenant, this Lease shall be deemed prior to such Mortgage. The
provisions of a Mortgage relating to the disposition of condemnation and
insurance proceeds shall prevail over any contrary provisions contained in this
Lease.
(b) Attornment. Subject to the non-disturbance provisions of
subparagraph C of this Paragraph 16.18, Tenant agrees to attorn to a Lender or
any other party who acquires ownership of the Premises by reason of a
foreclosure of a Mortgage. In the event of such foreclosure, such new owner
shall not: (i) be liable for any act or omission of any prior landlord or with
respect to events occurring prior to acquisition of ownership, (ii) be subject
to any offsets or defenses which Tenant might have against any prior Landlord,
or (iii) be liable for security deposits or be bound by prepayment of more than
one month's rent.
(c) Non-Disturbance. With respect to Mortgage entered into by
Landlord after the execution of this Lease, Tenant's subordination of this Lease
shall be subject to receiving assurance (a "non-disturbance agreement") from the
Mortgage holder that Tenant's
12
16
possession and this Lease will not be disturbed so long as Tenant is not in
default and attorns to the record owner of the Premises.
(d) Self-Executing. The agreements contained in this Paragraph
16.18 shall be effective without the execution of any further documents;
provided, however, that upon written request from Landlord or a Lender in
connection with a sale, financing or refinancing of Premises, Tenant and
Landlord shall execute such further writings as may be reasonably required to
separately document any such subordination or non-subordination, attornment
and/or non-disturbance agreement as is provided for herein. Landlord is hereby
irrevocably vested with full power to subordinate this Lease to a Mortgage.
16.19 Rules and Regulations. Tenant agrees that it will abide by, and to
cause its employees, suppliers, shippers, customers, tenants, contractors and
invitees to abide by all reasonable rules and regulations ("Rules and
Regulations") which Landlord may make from time to time for the management,
safety, care, and cleanliness of the Common Areas, the parking and unloading of
vehicles and the preservation of good order, as well as for the convenience of
other occupants or tenants of the Building and the Industrial Center and their
invitees. Landlord shall not be responsible to Tenant for the non-compliance
with said Rules and Regulations by other tenants of the Industrial Center.
16.20 Security Measures. Tenant acknowledges that the rental payable to
Landlord hereunder does not include the cost of guard service or other security
measures. Landlord has no obligations to provide same. Tenant assumes all
responsibility for the protection of the Premises, Tenant, its agents and
invitees and their property from the acts of third parties.
16.21 Reservations. Landlord reserves the right to grant such easements
that Landlord deems necessary and to cause the recordation of parcel maps, so
long as such easements and maps do not reasonably interfere with the use of the
Premises by Tenant. Tenant agrees to sign any documents reasonable requested by
Landlord to effectuate any such easements or maps.
16.22 Conflict. Any conflict between the printed provisions of this
Lease and the typewritten or handwritten provisions shall be controlled by the
typewritten or handwritten provisions.
16.23 Offer. Preparation of this Lease by either Landlord or Tenant or
Landlord's agent or Tenant's agent and submission of same to Tenant or Landlord
shall not be deemed an offer to lease. This Lease is not intended to be binding
until executed and delivered by all Parties hereto.
16.24 Amendments. This Lease may be modified only in writing, signed by
the parties in interest at the time of the modification.
16.25 Multiple Parties. Except as otherwise expressly provided herein,
if more than one person or entity is named herein as Tenant, the obligations of
such persons shall be the joint and several responsibility of all persons or
entities named herein as such Tenant.
16.26 Authority. Each person signing on behalf of Landlord or Tenant
warrants and represents that he or she is authorized to execute and deliver this
Lease and to make it a binding obligation of Landlord or Tenant.
The parties hereto have executed this Lease at the place and on
the dates specified above their respective signatures.
LANDLORD: TENANT:
AMB PROPERTY, L.P. HARMONIC, Inc.
a Delaware limited partnership a Delaware corporation
By: AMB Property Corporation,
a Maryland corporation By: /s/ ROBIN N. DICKSON
-------------------------------
By: /s/ JOHN L. ROSSI Robin N. Dickson
-------------------------------
John L. Rossi Its: Chief Financial Officer
Its: Regional Manager ------------------------------
By:
------------------------------
Its:
------------------------------
Telephone: (415) 394-9000 Telephone: (408) 542-2661
------------------------ ------------------------
Facsimile: (415) 394-0903 Facsimile: (408) 542-2516
------------------------ ------------------------
Executed at: 505 Montgomery Street Executed at: 632 Caribbean Avenue
6th Floor Sunnyvale, CA 94089
San Francisco, CA 94111
Date: 5-12-00 Date:
---------------------------- ----------------------------
13
17
FIRST ADDENDUM TO LEASE
THIS FIRST ADDENDUM is dated for reference purposes as April 18, 2000,
and is made a part of that Lease Agreement (the "Lease") dated April 18, 2000,
by and between AMB PROPERTY L.P., a Delaware limited partnership ("LANDLORD")
and HARMONIC, INC., a Delaware corporation ("Tenant") affecting certain real
property commonly known as 603-611 Baltic Way, Sunnyvale, California, with
reference to the following facts:
1. Base Monthly Rent:
January 1, 2002 - December 31, 2002: $2.20 NNN per square foot per month
January 1, 2003 - December 31, 2003: $2.30 NNN per square foot per month
January 1, 2004 - December 31, 2004: $2.40 NNN per square foot per month
January 1, 2005 - December 31, 2005: $2.50 NNN per square foot per month
January 1, 2006 - December 31, 2006: $2.60 NNN per square foot per month
August 2, 2006 Adjustment to Fair market Value (FMV)
January 1, 2007 - December 31, 2007: $2.70 NNN per square foot per month or FMV
January 1, 2008 - December 31, 2008: $2.80 NNN per square foot per month of FMV
January 1, 2009 - December 31, 2009: $2.90 NNN per square foot per month or FMV
January 1, 2010 - September 30, 2010: $3.00 NNN per square foot per month or FMV
A. The Base Monthly Rent for the Period after August 2, 2006
shall be the greater of (i) one hundred percent (100%) of the Base Monthly Rent
Schedule, or (ii) one hundred percent (100%) of the then fair market
monthly rent determined as of the commencement of the Period in question based
upon like buildings with like improvements in the area within the boundaries of
Highways 101, 880 and the San Francisco Bay. However, the Fair Market Value Rent
as determined by appraisal shall not exceed $4.00 per square foot per month in
August 2006 with 5% annual increases through the balance of the term. The Period
shall contain no free rent and the Premises shall be taken "as-is". If the
parties are unable to agree upon the fair market monthly rent for the Premises
for the option period in question at least seventy-five (75) days prior to the
commencement of the option period in question, then the fair market monthly rent
shall be determined by appraisal conducted pursuant to subparagraph B.
B. In the event it becomes necessary to determine by appraisal
the fair market rent of the Premises for the purpose of establishing the Base
Monthly Rent during the Period, then such fair market monthly rent shall be
determined by three (3) real estate appraisers, all of whom shall be members of
the American Institute of Real Estate Appraisers with not less than five (5)
years experience appraising real property (other than residential or
agricultural property) located in Santa Clara County, California, in accordance
with the following procedures:
(1) The party demanding an appraisal (the "Notifying
Party") shall notify the other party (the "Non-Notifying Party") thereof by
delivering a written demand for appraisal, which demand, to be effective, must
give the name, address, and qualifications of an appraiser selected by the
Notifying Party. Within ten (10) days of receipt of said demand, the
Non-Notifying Party shall select its appraiser and notify the Notifying Party,
in writing, of the name, address, and qualifications of an appraiser selected by
it. Failure by the Non-Notifying Party to select a qualified appraiser within
said ten (10) day period shall be deemed a waiver of its right to select a
second appraiser on its own behalf and the Notifying Party shall select a second
appraiser on behalf of the Non-Notifying Party within five (5) days after the
expiration of said ten (10) day period. Within ten (10) days from the date the
second appraiser shall have been appointed, the two (2) appraisers so selected
shall appoint a third appraiser. If the two appraisers fail to select a third
qualified appraiser, the third appraiser shall be selected by the American
Arbitrations Association or if it shall refuse to perform this function, then at
the request of either Landlord or Tenant, such third appraiser shall be promptly
appointed by the then Presiding Judge of the Superior Court of the State of
California for the County of Santa Clara.
(2) The three (3) appraisers so selected shall meet in San
Jose, California, not later than twenty (20) days following the selection of the
third appraiser. At said meeting the appraisers so selected shall attempt to
determine the fair market monthly rent of the Premises for the period in
question (including the timing and amount, periodic increases).
1
18
(3) If the appraisers so selected are unable to complete
their determinations in one meeting, they may continue to consult at such times
as they deem necessary for a fifteen (15) day period from the date of the first
meeting, in an attempt to have at least two (2) of them agree. If, at the
initial meeting or at any time during said fifteen (15) day period, two (2) or
more of the appraisers so selected agree on the fair market rent of the Leased
Premises, such agreement shall be determinative and binding on the parties
hereto, and the agreeing appraisers shall, in simple letter form executed by the
agreeing appraisers, forthwith notify both Landlord and Tenant of the amount set
by such agreement.
(4) If two (2) or more appraisers do not so agree within
said fifteen (15) day period, then each appraiser shall, within five (5) days
after the expiration of said fifteen (15) day period, submit his independent
appraisal in simple letter form to Landlord and Tenant stating his determination
of the fair market rent of the Premises for the period in question. The parties
shall then determine the fair market rent for the Premises by determining the
average of the fair market rent set by each of the appraisers. However, if the
lowest appraisal is less than eighty-five percent (85%) of the middle appraisal
then such lowest appraisal shall be disregarded and/or if the highest appraisal
is greater than one hundred fifteen percent (115%) of the middle appraisal then
such highest appraisal shall be disregarded. If the fair market rent set by any
appraisal is so disregarded, then the average shall be determined by computing
the average set by the other appraisals that have not been disregarded.
(5) Nothing contained herein shall prevent Landlord and
Tenant from jointly selecting a single appraiser to determine the fair market
rent of the Premises, in which event the determination of such appraisal shall
be conclusively deemed the fair market rent of the Premises.
(6) Each party shall bear the fees and expenses of the
appraiser selected by or for it, and the fees and expenses of the third
appraiser (or the joint appraiser if one joint appraiser is used) shall be borne
fifty percent (50%) by Landlord and fifty percent (50%) by Tenant.
2. Early Occupancy:
A. As consideration for Tenant's performance of all obligations
to be performed by Tenant under the Lease, and upon receipt of (i) the first
month's Base Monthly Rent and Security Deposit totaling $221,850.00, and (ii) a
certificate of insurance as provided by Article 9.1C of the Lease, Landlord
shall permit Tenant to enter and use the Premises commencing thirty (30) days
prior to Commencement until the Commencement Date (the "Early Occupancy
Period"). Such occupancy during the Early Occupancy Period shall be subject to
all of the terms, covenants and conditions of the Lease provided, however, that
the rent payable during the Early Occupancy Period shall be waived.
B. In the event either party shall bring any action or legal
proceeding for damages for alleged breach of any provision of this agreement, to
recover rent, to terminate tenancy of the Premises, or to enforce, protect or
establish any term or covenant of this agreement or the Lease or right of remedy
of either party, the prevailing party shall be entitled to recover as a part of
such action or proceeding, reasonable attorney's fees and court costs as may be
fixed by the court or jury.
C. In consideration of executing this Early Occupancy Agreement,
Tenant agrees to indemnify and save Landlord harmless of and from any and all
liability, damage, expense, cause of action, suits or claims or judgments
resulting from injury to person or property arising from the use of the Premises
by Tenant during the Early Occupancy Period, including loss or damage to Tenant,
its equipment, materials or supplies.
D. Tenant agrees to cooperate with construction personnel
completing the Interior Improvements in the Premises and not cause any delay in
the completion of these improvements. It is the intent of Landlord and Tenant
that Tenant's obligation to pay the Base Monthly Rent and all Additional Rent
not be delayed by any cause or other act of Tenant and, if it is so delayed, and
provided that Landlord promptly notifies Tenant in writing of each separate
delay and the estimated period of delay, then Tenant's obligation to pay the
Base Monthly Rent and all Additional Rent shall commence as of the date it would
have commenced absent said delay caused by Tenant.
2
19
E. During the Early Occupancy Period, Tenant shall arrange to
have all utility services, including but not limited to gas, electric, water and
trash, billed directly to Tenant for payment.
3. Tenant Maintenance: 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
sixty (60) days during the Lease Term. Tenant shall furnish Landlord with a copy
of such service contract, which shall provide that it may not be cancelled or
changed without at least thirty (30) day's prior written notice to Landlord.
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
through the Lease Term a service contract for the washing of all windows (both
interior and exterior surfaces) in the Premises.
4. Landlord's Remedies in Event of Tenant Default: (AMB)
A. Termination. In the event of any Default by Tenant, then in
addition to any other remedies available to Landlord at law or in equity and
under this Lease, Landlord shall have the immediate option to terminate this
Lease and all rights of Tenant hereunder by giving written notice of such
intention to terminate. In the event that Landlord shall elect to so terminate
this Lease then Landlord may recover from Tenant:
(1) the worth at the time of award of any unpaid Rent and
any other sums due and payable which have been earned at the time of such
termination; plus
(2) the worth at the time of award of the amount by which
the unpaid Rent and any other sums due and payable which would have been earned
after termination until the time of award exceeds the amount of such rental loss
Tenant proves could have been reasonably avoided; plus
(3) the worth at the time of award of the amount by which
the unpaid Rent and any other sums due and payable for the balance of the term
of this Lease after the time of award exceeds the amount of such rental loss
that Tenant proves could be reasonably avoided; plus
(4) any other amount necessary to compensate Landlord for
all the detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which in the ordinary course would be likely to
result therefrom, including, without limitation, any costs or expenses incurred
by Landlord (i) in retaking possession of the Premises; (ii) in maintaining,
repairing, preserving, restoring, replacing, cleaning, altering or
rehabilitating the Premises or any portion thereof, including such acts for
reletting to a new lessee or lessees; (iii) for leasing commissions; or (iv) for
any other costs necessary or appropriate to relet the Premises; plus
(5) such reasonable attorneys' fees incurred by Landlord
as a result of a Default, and costs in the event suit is filed by Landlord to
enforce such remedy; and plus
(6) at Landlord's election, such other amounts in addition
to or in lieu of the foregoing as may be permitted from time to time by
applicable law.
As used in subparagraphs (1) and (2) above, the "worth at the time of award" is
computed by allowing interest at an annual rate equal to twelve percent (12%)
per annum or the maximum rate permitted by law, whichever is less. As used in
subparagraph (3) above, the "worth at the time of award" is computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award, plus one percent (1%). Tenant waives redemption
or relief from forfeiture under California Code of Civil Procedure Sections 1174
and 1179, or under any other present or future law, in the event Tenant is
evicted or Landlord takes possession of the Premises by reason of any Default of
Tenant hereunder.
B. Continuation of Lease. In the event of any Default by Tenant,
then in addition to any other remedies available to Landlord at law or in equity
and under this Lease,
3
20
Landlord shall have the remedy described in California Civil Code Section 1951.4
(Landlord may continue this Lease in effect after Tenant's Default and
abandonment and recover Rent as it becomes due, provided tenant has the right to
sublet or assign, subject only to reasonable limitations).
C. Re-entry. In the event of any Default by Tenant, Landlord
shall also have the right, with or without terminating this Lease, in compliance
with applicable law, to reenter the Premises and remove all persons and property
from the Premises; such property may be removed and stored in a public warehouse
or elsewhere at the cost of and for the account of Tenant.
D. Reletting. In the event of the abandonment of the Premises by
Tenant or in the event that Landlord shall elect to re-enter or shall take
possession of the Premises pursuant to legal proceeding or pursuant to any
notice provided by law, then if Landlord does not elect to terminate this Lease
as provided in Paragraph a, Landlord may from time to time, without terminating
this Lease, relet the Premises or any part thereof for such term or terms and at
such rental or rentals and upon such other terms and conditions as Landlord in
its sole discretion may deem advisable with the right to make alterations and
repairs to the Premises. In the event that Landlord shall elect to so relet,
then rentals received by Landlord from such reletting shall be applied in the
following order: (1) to reasonable attorneys' fees incurred by Landlord as a
result of a Default and costs in the event suit is filed by Landlord to enforce
such remedies; (2) to the payment of any indebtedness other than Rent due
hereunder from Tenant to Landlord; (3) to the payment of any costs of such
reletting; (4) to the payment of the costs of any alterations and repairs to the
Premises; (5) to the payment of Rent due and unpaid hereunder; and (6) the
residue, if any, shall be held by Landlord and applied in payment of future Rent
and other sums payable by Tenant hereunder as the same may become due and
payable hereunder. Should that portion of such rentals received from such
reletting during any month, which is applied to the payment of Rent hereunder,
be less than the Rent payable during the month by Tenant hereunder, then Tenant
shall pay such deficiency to Landlord. Such deficiency shall be calculated and
paid monthly. Tenant shall also pay to Landlord, as soon as ascertained, any
costs and expenses incurred by Landlord in such reletting or in making such
alterations and repairs not covered by the rentals received from such reletting.
E. Termination. No re-entry or taking of possession of the
Premises by Landlord pursuant to this Addendum shall be construed as an election
to terminate this Lease unless a written notice of such intention is given to
Tenant or unless the termination thereof is decreed by a court of competent
jurisdiction. Notwithstanding any reletting without termination by Landlord
because of any Default by Tenant, Landlord may at any time after such reletting
elect to terminate this Lease for any such Default.
F. Cumulative Remedies. The remedies herein provided are not
exclusive and Landlord shall have any and all other remedies provided herein or
by law or in equity.
G. No Surrender. No act or conduct of Landlord, whether
consisting of the acceptance of the keys to the Premises, or otherwise, shall be
deemed to be or constitute an acceptance of the surrender of the Premises by
Tenant prior to the expiration of the Term, and such acceptance by Landlord of
surrender by Tenant shall only flow from and must be evidenced by a written
acknowledgment of acceptance of surrender signed by Landlord. The surrender of
this Lease by Tenant, voluntarily or otherwise, shall not work a merger unless
Landlord elects in writing that such merger take place, but shall operate as an
assignment to Landlord of any and all existing subleases, or Landlord may, at
its option, elect in writing to treat such surrender as a merger terminating
Tenant's estate under this Lease, and thereupon Landlord may terminate any or
all such subleases by notifying the sublessee of its election so to do within
five (5) days after such surrender.
H. Notice Provisions. Tenant agrees that any notice given by
Landlord pursuant to Paragraph 13.1 of the Lease shall satisfy the requirements
for notice under California Code of Civil Procedure Section 1161, and Landlord
shall not be required to give any additional notice in order to be entitled to
commence an unlawful detainer proceeding.
5. Year 2000 Disclaimer: Landlord hereby disclaims any liability
for any and all damages, injuries or other losses, whether ordinary, special,
consequential, punitive or otherwise, arising out of, relating to, or in
connection with, (a) the failure of any automated, computerized and/or software
system or other technology used in, on, or about the Property or relating to the
management or operation of the Property to accurately receive, provide or
4
21
process date/time data (including, but not limited to, calculating, comparing
and sequencing) both before and after September 9, 1999, and before, after,
during and between the years 1999 A. D. and 2000 A. D., and leap year
calculations and, or (b) the malfunction, ceasing to function or providing of
invalid or incorrect results by any such technology as a result of date/time
data. The foregoing disclaimer shall apply to any such technology used in, on,
or about the Property or that affects the Property, whether or not such
technology is within the control of Owner or any of Owner's agents or
representatives. THE FOREGOING DISCLAIMER INCLUDES A DISCLAIMER OF ALL
WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED, WITH RESPECT TO THE MATTERS
DESCRIBED HEREIN, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE.
LANDLORD: TENANT:
AMB PROPERTY, L.P. HARMONIC, INC.
a Delaware limited partnership a Delaware corporation
By: AMB Property Corporation,
a Maryland corporation By: /s/ ROBIN N. DICKSON
-------------------------------
By: /s/ JOHN L. ROSSI Robin N. Dickson
-------------------------------
John L. Rossi Its: Chief Financial Officer
Its: Regional Manager ------------------------------
By:
------------------------------
Its:
------------------------------
Telephone: (415) 394-9000 Telephone: (408) 542-2661
------------------------ ------------------------
Facsimile: (415) 394-0903 Facsimile: (408) 542-2516
------------------------ ------------------------
Executed at: 505 Montgomery Street Executed at: 632 Caribbean Avenue
6th Floor Sunnyvale, CA 94089
San Francisco, CA 94111
Date: 5-12-00 Date:
---------------------------- ----------------------------
5
22
Exhibit "A"
Site Plan
AMB PROPERTY, L.P.
PROJECT 8J01 MBC/MOFFET BUSINESS CENTER
R&D TOTAL PROJECT SQUARE FOOTAGE: 285,480
- --------------------------------------------------------------------------------
[DIAGRAM]
23
EXHIBIT B
COMMENCEMENT DATE CERTIFICATE
THIS COMMENCEMENT DATE CERTIFICATE is made as of April 18, 2000, by and
between the parties hereto with regard to that Lease dated April 18, 2000, by
and between AMB PROPERTY, L.P., a Delaware limited partnership, as Landlord
("Landlord"), and HARMONIC, INC., a California corporation as Tenant ("Tenant"),
affecting those Premises commonly known as 603-611 Baltic Way, Sunnyvale,
California. The parties hereto agree as follows:
1. Possession of the Premises has been delivered to Tenant and
Tenant has accepted and taken possession of the Premises.
2. The Commencement Date of the Lease Term is January 1, 2002 and
the Lease Term shall expire on September 30, 2010 unless sooner terminated
according to the terms of the Lease or by mutual agreement.
3. The Base Monthly Rent initially due pursuant to the Lease is
Ninety-Five Thousand Seven Hundred and 00/100 Dollars ($95,700.00) per month,
subject to any subsequent adjustments required by the Lease.
4. Landlord has received a Security Deposit in the amount of One
Hundred Thirty Thousand Five Hundred and 00/Dollars ($130,500.00). In addition,
Tenant has prepaid rent in the amount of Ninety-Five Thousand Seven Hundred and
00/Dollars ($95,700.00), which shall be applied to the first installment of Base
Monthly Rent.
5. The Lease is in full force and effect, neither party is in
default of its obligations under the Lease, and Tenant has no setoffs, claims,
or defenses to the enforcement of the Lease.
LANDLORD: TENANT:
AMB PROPERTY, L.P. HARMONIC, INC.
a Delaware limited partnership a Delaware corporation
By: AMB Property Corporation,
a Maryland corporation By: /s/ ROBIN N. DICKSON
-------------------------------
By: /s/ JOHN L. ROSSI Robin N. Dickson
-------------------------------
John L. Rossi Its: Chief Financial Officer
Its: Regional Manager ------------------------------
By:
------------------------------
Its:
------------------------------
Telephone: (415) 394-9000 Telephone: (408) 542-2661
------------------------ ------------------------
Facsimile: (415) 394-0903 Facsimile: (408) 542-2516
------------------------ ------------------------
Executed at: 505 Montgomery Street Executed at: 632 Caribbean Avenue
6th Floor Sunnyvale, CA 94089
San Francisco, CA 94111
Date: 5-12-00 Date:
---------------------------- ----------------------------
1
24
EXHIBIT "C"
IMPROVEMENT AGREEMENT
NOT APPLICABLE
25
EXHIBIT "D"
APPROVED SPECIFICATIONS
NOT APPLICABLE
26
EXHIBIT "E"
DESCRIPTION OF PRIVATE RESTRICTIONS
(NOT APPLICABLE)
27
EXHIBIT "F"
SIGN CRITERIA
(NOT APPLICABLE)
28
EXHIBIT "H"
LEGAL DESCRIPTION
NOT APPLICABLE