Exhibit 10.36
LEASE
BETWEEN
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
A NEW JERSEY CORPORATION
AND
ADAPTEC, INC.
A CALIFORNIA CORPORATION
FOR THE PREMISES LOCATED AT
631 SOUTH MILPITAS BOULEVARD
MILPITAS, CALIFORNIA 95035
DATED: DECEMBER 20, 1996
BASIC LEASE INFORMATION
DATE: December 20, 1996
LANDLORD: THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a
New Jersey corporation
TENANT: ADAPTEC, INC., a California corporation
PREMISES: Building Address: 631 South Milpitas Boulevard
Milpitas, CA
USE: General office, assembly, warehouse, research
and development not involving use of Hazardous
Substances, except for small amounts
customarily used and found in products used in
reasonable office use (i.e. whiteout, kitchen
cleaning products, etc.)
TERM: One hundred twenty (120) months from Base Rent
Commencement Date as defined in Section 4
ESTIMATED COMMENCEMENT DATE: April 1, 1997
BASE RENT: Months Base Rent
(Months measured from Base Rent Commencement
Date)
1-48 $16,445.52 per month
49-120 Annual CPI adjustments per Section
4 of the Lease
ADVANCE RENT: $16,445.52
ESTIMATED EXPENSES: OPERATING: $722.88 per month
REAL PROPERTY TAXES $1,175 per month
1897.88
TENANT'S PERCENTAGE SHARE: 30.5% of Building
BROKERS: Tenant's Broker: CB Madison Advisory Group
Landlord's Broker: Grubb & Ellis Commercial
Real Estate
CONTRACT MANAGER: Voit Management Company
ADDRESS FOR NOTICES: LANDLORD: The Prudential Insurance
Company of America
2029 Century Park East,
Suite 2050
Los Angeles, CA 90067
CONTRACT MANAGER: Voit Management Company,
L.P.
1111 Broadway, Suite 1510
Oakland, CA 94607
TENANT: Adaptec, Inc.
691 South Milpitas
Boulevard
Milpitas, CA 95035
Attn: Robert Kraiss
EXHIBITS AND ADDENDUM: Exhibit A - Site Plan of Premises
Exhibit B-1 - Commencement Date Memorandum
Exhibit B-2 - Base Rent Commencement Date
Memorandum
Exhibit C - Rules and Regulations
Exhibit D - Parking
INITIALS: _____________ ______________
LANDLORD TENANT
THIS LEASE, which is effective as of the date set forth in the Basic Lease
Information, is entered into by Landlord and Tenant, as set forth in the Basic
Lease Information. Terms which are capitalized in this Lease and not expressly
defined herein shall have the meanings set forth in the Basic Lease
Information.
1. PREMISES. Landlord leases to Tenant, and Tenant leases from Landlord, the
Premises described in the Basic Lease Information, together with the right in
common to use the Common Areas of the Building and the Property (as shown in
Exhibit A). The Common Areas shall mean the areas and facilities within the
Building and the Property provided and designated by Landlord for the general
use, convenience or benefit of Tenant and other tenants and occupants of the
Building and/or the Property (e.g., loading and unloading areas; sidewalks;
walkways; driveways; landscaped areas; common entrances and hallways; trash
disposal facilities; and unreserved parking areas).
2. TERM.
(a) Lease Term. The Term of this Lease shall commence on the later of
April 1, 1997 or the date Landlord tenders legal and physical possession of
the Premises to Tenant (the "Commencement Date") and, unless terminated on
an earlier date in accordance with the terms of this Lease, shall expire on
the date which is the date before the tenth anniversary of the Base Rent
Commencement Date (the "Expiration Date"), as defined in Section 4
("Term").
(b) Premises Not Delivered. If, for any reason, Landlord cannot deliver
possession of the Premises to Tenant by Estimated Commencement Date (as set
forth in the Basic Lease Information), (i) the Term shall not commence
until the Commencement Date; (ii) the failure shall not affect the validity
of this Lease, or the obligations of Tenant under this Lease; and (iii)
Landlord shall not be subject to any liability. If the Commencement Date
has not occurred on or before September 30, 1997, Tenant shall have the
right as Tenant's exclusive remedy to terminate this Lease, which notice
shall be delivered on or before October 15,1997. Upon such cancellation,
Landlord shall refund any advance rent to Tenant and Landlord and Tenant
shall have no further liability under this Lease.
(c) Commencement Date Memorandum. When the Commencement Date is
determined, the parties shall execute a Commencement Date Memorandum, in
the form attached hereto as Exhibit B-1, setting forth the Commencement
Date.
(d) Early Entry. If Tenant is permitted to enter the Premises prior to
the Commencement Date for the purposes of fixturing or any purpose other
that occupancy permitted by Landlord, the entry shall be subject to all the
terms and provisions of this Lease, except that the payment of Rent shall
commence as of the Base Rent Commencement Date.
3. RENT. As used in this Lease, the term "Rent" shall include: (i) the Base
Rent; (ii) Tenant's Percentage Share of the Operating Expenses paid or incurred
by Landlord during the calendar year; and (iii) all other amounts which Tenant
is obligated to pay under the terms of this Lease. All amounts of money payable
by Tenant to Landlord shall be paid without prior notice or demand, deduction or
offset. This Lease is intended to be a triple net lease, with all costs,
expenses and charges (including the Operating Expenses) paid by Tenant, except
as expressly prohibited herein. Tenant hereby acknowledges that late payment by
Tenant to Landlord of Rent will cause Landlord to incur costs not contemplated
by this Lease, the exact amount of which will be difficult to ascertain. Such
costs include, but are not limited to, processing and accounting charges, and
late charges, which may be imposed on Landlord by the terms of any trust deed
covering the Premises. Accordingly, if any installment of Rent or any other sums
due from Tenant shall not be received by Landlord when due, Tenant shall pay to
Landlord a late charge equal to six percent (6%) 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. In
addition, any amount which is not paid when due shall bear interest from the
date due until the date paid at the rate ("Interest Rate") which is the lesser
of the Wall Street Journal Prime Rate (or such other comparable rate reasonably
designated by Landlord) plus four percent (4%) per annum or the maximum rate
permitted by law. Notwithstanding the foregoing, with respect to the first two
(2) failures to pay an amount payable to Landlord when due under this Lease
during any twelve (12) month period, no late charge or interest shall be
assessed until five (5) days after written notice has been delivered by Landlord
to Tenant regarding such delinquent payment. After such second notice, no
further notices shall be required with respect to interest and late charges
during the remainder of such twelve (12) month period.
4. BASE RENT.
(a) Tenant shall pay Base Rent to Contract Manager (or other entity
designated by Landlord), in
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advance, on the first day of each calendar month of the Term commencing as of
the Base Rent Commencement Date, at Contract Manager's address for notices (as
set forth in the Basic Lesse Information) or at such other address as Landlord
may designate. The Base Rent shall be the amount set forth in the Basic Lease
Information, as adjusted pursuant to subsections 4(b) and (c) below. As used
herein, the term "Base Rent Commencement Date" shall mean the date which is the
earlier of (i) one hundred thirty five (135) days after the Commencement Date,
(ii) sixty (60) days after the date the applicable local governmental authority
(e.g., the city in which the Building is located) approves the improvements
which Tenant intends to construct within the Premises prior to commencing
business operations which would permit Tenant to use and occupy the Premises, as
evidenced by a final signed-off building permit or certificate of occupancy for
such improvements; or (iii) sixty (60) days after the date that Tenant commences
business operations on the Premises. Notwithstanding the foregoing, if Landlord
has not completed Landlord's Work (as defined in Section 7 below) and Tenant is
not reasonably able to commence business operations on the Premises as a result
of such incomplete work, than the Base Rent Commencement Date shall not be
deemed to have occurred until Landlord's Work is completed to the extent that
the items to be corrected as part of Landlord's Work do not prevent the
reasonable ability of Tenant to commence business operations on the Premises. In
addition, if Tenant is unable to substantially complete the Initial Alterations
(as defined in subsection 9(a) within the Premises during the one hundred thirty
five (135) day period referenced in clause (i) above because the performance of
Landlord's Work has delayed such construction (as reasonably determined by the
Architect, as defined in subsection 9(a)(i) and reasonably approved by
Landlord), then such one hundred thirty five (135) day period shall be extended
one (1) day for each day of such delay. Landlord and Tenant shall reasonably
cooperate in scheduling the construction of the initial Alterations and
Landlord's Work to avoid such delays. When the Base Rent Commencement Date is
determined, the parties shall execute a Base Rent Commencement Date Memorandum,
in the form attached hereto as Exhibit B-2 setting forth the Base Rent
Commencement Date and the expiration date ("Expiration Date") of this Lease.
(b) CPI Adjustment Definitions. The following terms are used in this Section 4
as follows:
(i) "Consumer Price Index" shall mean the Consumer Price Index (All
Items) for All Urban Consumers for the locality in which the Building is
located (1982-1984 equals 100) of the United States Department of Labor,
Bureau of Labor Statistics. If such index is no longer published at any
time, the Consumer Price Index shall mean a comparable index selected by
Landlord.
(ii) "CPI Adjustment Dates" means (a) the fifth anniversary of the
Base Rent Commencement Date and each anniversary of the Base Rent
Commencement Date thereafter (or, if the Base Rent Commencement Date is not
the first day of a calendar month, each anniversary of the first day of the
calendar month following the month in which the Base Rent Commencement Date
occurs).
(iii) "CPI Base Month" means the calendar month prior to the month in
which the Base Rent Commencement Date occurs for, if the Base Rent
Commencement Date is not the first day of a calendar month, the calendar
month in which the Commencement Date occurs).
(iv) " Minimum Increase Multiple" means 108.243% on the CPI Adjustment
Date which occurs on the fifth anniversary of the Base Rent Commencement
Date and 102% with respect to all other CPI Adjustment Dates. "Maximum
Increase Multiple" means 121.551% on the CPI Adjustment Date which occurs
on the fifth anniversary of the Base Rent Commencement Date and 105% with
respect to all other CPI Adjustment Dates.
(c) CPI Adjustment. Effective on each CPI Adjustment Date, the then current
Base Rent shall be adjusted as follows: The Initial Base Rent hereunder shall
first be multiplied by a fraction, the numerator of which is the Consumer Price
Index for the calendar month prior to such CPI Adjustment Date and the
denominator of which is the Consumer Price Index for the CPI Base Month. If the
foregoing calculation results in an amount which is equal to or less than
Minimum Increase Multiple of the then current Base Rent with respect to such CPI
Adjustment Date, then the Base Rent shall be increased to an amount equal to
Minimum Increase Multiple of the then current Base Rent. If the foregoing
calculation would result in an amount which exceeds Minimum Increase Multiple of
the then current Base Rent, such amount shall be the new Base Rent, provided
however, such increase shall not result in an amount which exceeds Maximum
Increase Multiple of the then current Base Rent. Landlord shall endeavor to
provide Tenant with written notice of each such Base Rent adjustment prior to
the applicable CPI Adjustment Date, or as soon thereafter as the necessary
Consumer Price Index Information is reasonably available. In the event that
Tenant receives notice of any such increase after Tenant has already made one or
more of the Base Rent payments which is increased thereby, Tenant shall
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pay Landlord, within five (5) business days thereafter, the incremental
amount(s) necessary to supplement such Base Rent payments.
5. OPERATING EXPENSES.
(a) Operating Expenses as Portion of Rent. Tenant shall pay as additional
Rent Tenant's Percentage Share of the Operating Expenses paid or incurred
by Landlord during the calendar year. Tenant acknowledges that certain
Operating Expenses will be allocated to the Building and certain Operating
Expenses will be allocated to the Property. Landlord's reasonable
allocation of Operating Expenses to the Building and the Property shall be
conclusive and binding on the parties.
(b) Definition of Operating Expenses. The term "Operating Expenses" shall
mean (i) all of Landlord's direct costs and expenses of operation, repair
and maintenance of the Building, the Property and the Common Areas and
supporting facilities, as determined by Landlord in accordance with
generally accepted accounting principles or other recognized accounting
principles, consistently applied; (ii) costs, or a portion thereof,
properly allocable to the Building, Property or Common Areas of any capital
improvements made to the Building, Property or Common Areas by Landlord
which comprise labor-saving devices or other equipment intended to improve
the operating efficiency of any system within the Building, Property or
Common Areas (such as an energy management computer, system) to the extent
of cost savings in Operating Expenses as a result of the device or
equipment, as reasonably determined by Landlord; and (iii) costs properly
allocable to the Building, Property or Common Areas of any capital
improvements made to the Building, Property or Common Areas by Landlord
that are required under any governmental law or regulation that was not
applicable to the Building, Property and Common Areas at the time they were
constructed, or that are reasonably required for the health and safety of
tenants in the Property or Building, or that are reasonably required to
replace capital items on the Property, the costs, or allocable portion
thereof, to be amortized over the useful life of such improvement (as
reasonably determined by Landlord) on a straight-line basis in accordance
with generally accepted accounting principles, together with interest upon
the unamortized balance at the Interest Rate or such higher rate as may
have been paid by Landlord on funds borrowed for the purpose of
constructing the capital improvements. The term "Operating Expenses" shall
include the costs of all utilities (including surcharges) for the Common
Areas; the cost of all insurance which Landlord or Landlord's lender deems
necessary for the Property and Building; a reasonable management fee; dues
imposed by any property owner's association ("Association"); and the Real
Property Taxes (as defined in subsection 5(f)). If Landlord elects to
self-insure or includes the Property under blanket insurance policies
covering multiple properties, then the term "Operating Expenses" shall
include the portion of the cost of such self-insurance or blanket insurance
reasonably allocated by Landlord to this Property. If less than ninety
percent (90%) of the rentable area of the Building is occupied, Operating
Expenses shall be adjusted to equal Landlord's reasonable estimate of
Operating Expenses as if ninety percent (90%) of the total rentable area of
the Building were occupied. Operating Expenses may include a fee to
Landlord for managing the Property, provided that the amount of any such
fee shall not be unreasonable in comparison to management fees then being
charged by landlords of comparable properties in the vicinity of the
Property and shall not in any event for any calendar year exceed five
percent (5%) of total Property revenues (including all rent and
reimbursement for taxes and operating expenses) payable to Landlord during
such year.
(c) Exclusions from Operating Expenses. Notwithstanding anything to the
contrary contained in this Lease, the term "Operating Expenses" shall not
include (i) the cost of any additional or extraordinary services provided
to any other tenant of the Property; (ii) costs to comply with violations
of building code or other governmental violation existing as of the
Commencement Date, provided that the condition of the Building shall not be
deemed to violate any such code or requirement if it was constructed in
compliance with such code or requirement and applicable law does not
require modification of such condition as of the Commencement Date; (iii)
costs paid directly by any tenant of the Property; (iv) principal and
interest payments on loans; (v) real estate sales or leasing brokerage
commissions or finders fees; (vi) salaries of off-site personnel employed
by Landlord except for the charge (or pro rata share) of the manager of the
Property and Building (employed to operate or repair the common area);
(vii) personal property taxes paid by any tenant; (viii) depreciation on
improvements or equipment and machinery; (ix) advertising or promotional
expenses; (x) attorneys' fees incurred in connection with negotiation or
enforcement of leases; (xi) costs or expenses incurred for loss or damage
to the Property to the extent insured by applicable insurance maintained by
Landlord, provided however any deductible may be included as a replacement
capital improvement amortized in accordance with subsection (b); or (xii)
capital improvements to the structural portion of the Building, structural
roof system, footings, foundations and load bearing walls, except to the
extent such improvement is required as a result of a change after the
Commencement Date in governmental laws, rules and regulations applicable to
the Building.
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(d) Estimates of Operating Expenses. Excluding all separately metered utility
expenses for any other tenants in the Building, during December of each
calendar year during the Term, or as soon thereafter as practicable,
Landlord shall give Tenant written notice of Landlord's estimate of the
amount of Operating Expenses which will be payable for the ensuing calendar
year. On or before the first day of each month during the ensuing calendar
year, Tenant shall pay to Landlord one-twelfth (1/12) of the estimated
amount; provided, however, that if notice is not given in December, Tenant
shall continue to pay on the basis of the then applicable Rent until the
month after the notice is given. If at any time it appears to Landlord that
the amount payable for the current calendar year will vary from Landlord's
estimate by more than five percent (5%), Landlord may give notice to Tenant
of Landlord's revised estimate for the year, and subsequent payments by
Tenant for the year shall be based on the revised estimate; provided,
however, that Landlord shall not give notice of a revised estimate for any
year more frequently than once a calender quarter.
(e) Annual Adjustment. Within one hundred twenty (120) days after the close of
each calendar year of the Term, or as soon after the one hundred twenty
(120) day period as practicable, Landlord shall deliver to Tenant a
statement of the actual Operating Expenses for the prior calendar year.
Such statement shall include a reasonable line-item breakdown of Operating
Expenses. If, on the basis of the statement, Tenant owes an amount that is
less than the estimated payments for the calendar year previously made by
Tenant, Landlord shall apply the excess to the next payment of Operating
Expenses due or refund such amount in cash with respect to the final lease
year. If, on the basis of the statement, Tenant owes an amount that is more
than the estimated payments for the calendar year previously made by the
Tenant, Tenant shall pay the deficiency to Landlord within thirty (30) days
after delivery of the statement. The statement of Operating Expenses shall
be presumed correct and shall be deemed final and binding upon Tenant
unless (i) Tenant in good faith objects in writing thereto within thirty
(30) days after delivery of the statement to Tenant (which writing shall
state, in reasonable detail, all of the reasonable detail, all of the
reasons for the objection); and (ii) Tenant pays in full, within thirty
(30) days after delivery or the statement to Tenant, any amount owed by
Tenant with respect to the statement which is not in dispute. Tenant's
failure to pay undisputed the amount shown on Landlord's statement within
thirty (30) days after delivery thereof or Tenant's failure to pay in a
timely manner the undisputed amount set forth on the revised estimate of
Landlord's determination of Operating Expenses shall be deemed an
irrevocable waiver of Tenant's right to contest and/or receive any credit
or reimbursement for an overcharge of Operating Expenses shown on the
Landlord's statement under which payment is required at that time. If
Tenant objects to Landlord's allocation to this Property of the cost of
self-insurance or blanket insurance, such allocation shall nonetheless be
presumed correct and shall be deemed final and binding upon Tenant unless
Tenant's timely written objection includes credible evidence that Landlord
could have obtained substantially comparable insurance coverage for this
Property alone at lower cost.
(f) Tenant's Right to Audit Landlord's Records. Within ninety (90) days after
timely giving Landlord its notice of its objection to Landlord's statement
of actual Operating Expenses in accordance with subsection 5(e), (the
"Landlord's Statement"), Tenant shall have the right to audit at Landlord's
local offices, at Tenant's expense, Landlord's accounts and records
relating to Operating Expenses and Real Property Taxes. Such audit shall be
conducted by a certified public accountant approved by Landlord, which
approval shall not be unreasonably withheld, and shall be completed within
such ninety (90) day period. If such audit reveals that Landlord has
overcharged Tenant, the amount overcharged shall be paid (or at Landlord's
option credited toward amounts next payable by Tenant under this Lease) to
Tenant within thirty (30) days after the audit is concluded. In addition,
if, following such audit, the parties agree that Landlord's Statement of
Operating Expenses exceeds the actual Operating Expenses which should have
been charged to Tenant by more than ten percent (10%), the cost of such
audit shall be paid by Landlord.
(g) Definition of Real Property Taxes. The term "Real Property Taxes" shall
mean any ordinary or extraordinary form of assessment or special
assessment, license fee, rent tax, levy, penalty (if a result of Tenant's
delinquency), or tax, other than net income, estate, succession,
inheritance, transfer or franchise taxes, imposed by any authority having
the direct or indirect power to tax, or by any city, county, state or
federal government for any maintenance or improvement or other district or
division thereof. The term shall include all transit charges, housing fund
assessments, real estate taxes and all other taxes relating to the
Premises, Building and/or Property, all other taxes which may be levied in
lieu of real estate taxes, all assessments, assessment bonds, levies, fees
and other governmental charges (including, but not limited to, charges for
traffic facilities, improvements, child care, water services studies and
improvements, and fire services studies and improvements) for amounts
necessary to be expended because of governmental orders, whether general or
special, ordinary or extraordinary, unforeseen as well as foreseen, or any
kind and nature for public improvement, services, benefits or any other
purposes which are assessed, levied, confirmed, imposed or become a lien
upon the Premises, Building or Property or become payable during the Term.
(h) Acknowledgment of Parties. It is acknowledged by Landlord and Tenant that
Proposition 13 was
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adopted by the voters of the State of California in the June, 1978
election, and that assessments, taxes, fees, levies and charges may be
imposed by governmental agencies for such purposes as fire protection,
street, sidewalk, road, utility construction and maintenance, refuse
removal and for other governmental services which formerly may have been
provided without charge to property owners or occupants. It is the
intention of the parties that all new and increased assessments, taxes,
fees, levies and charges due to Proposition 13 or any other cause are to be
included within the definition of Real Property Taxes for purposes of this
Lease.
(i) Taxes on Tenant Improvements and Personal Property. Notwithstanding
any other provision hereof, Tenant shall pay the full amount of any Real
Property Taxes during the Term resulting from any and all alterations and
tenant improvements of any kind whatsoever placed in, on or about the
Premises for the benefit of, at the request of, or by Tenant. Tenant shall
pay, prior to delinquency, all taxes assessed or levied against Tenant's
personal property in, on or about the Premises. When possible, Tenant shall
cause its personal property to be assessed and billed separately from the
real or personal property of Landlord. Tenant shall not be responsible for
payment of taxes to the extent assessed as a result of improvements
installed by or for the benefit of another tenant which are in excess of
Landlord's standard tenant improvements for the Property.
6. PRORATION OF RENT. If the Base Rent Commencement Date is not the first day
of the month, or if the end of the Term is not the last day of the month, Base
Rent shall be prorated on a monthly basis (based upon a thirty (30) day month)
for the fractional month during the month which this Lease commences or
terminates. The termination of this Lease shall not affect the obligations of
Landlord and Tenant pursuant to subsection 5(e) which are to be performed after
the termination.
7. LANDLORD'S WORK.
(a) On or before March 1, 1997, Tenant shall prepare and deliver to
Landlord a detailed report which itemizes (1) portions of the HVAC system,
roof and roof membrane, Building structure, plumbing, electrical, systems
and parking lot which are not in good operating condition, and (2)
conditions in the Premises which were not constructed in compliance with or
were not subsequently modified as was required under municipal, State of
California or federal statutes, laws, rules, regulations, orders
specifically applicable to the Premises (including without limitation all
applicable fire and building codes) (collectively, "Laws"), including
without limitation any laws requiring installation of a fire sprinkler
system, seismic reinforcement and related alterations, removal of asbestos
and compliance with the Americans with Disabilities Act and California Code
of Regulations Title 24 (except that Tenant shall be responsible for all
modifications to the interior of the Premises which may not comply with
Laws related to persons with disabilities, including without limitation the
Americans with Disabilities Act). Upon delivery of prior written notice to
Landlord, Tenant shall have reasonable access to the Premises for the
purpose of performing such inspections; provided that Tenant shall not
disturb the use and occupancy of the Premises by Landlord's existing
tenant. Tenant shall not make any boring or otherwise alter or modify the
Premises without the prior written consent of Landlord. If Landlord grants
such consent, Tenant shall return any such boring, modification or
alteration to the condition which existed prior to such work. At Landlord's
request, Tenant shall deliver to Landlord copies of all consultant's
reports prepared by or on behalf of Tenant in its investigation of the
physical condition of the Premises. Tenant shall indemnify, protect, defend
and hold harmless Landlord and Landlord's employees agents and contractors
from and against all claims, demands, losses, liabilities, costs, fees and
expenses (including attorneys and consultants' fees) arising out of or
related to such inspections by Tenant and or Tenant's agents employees or
contractors, except that the foregoing shall not apply to matters which
arise solely because they are identified in a report prepared by or on
behalf of Tenant.
(b) Within five (5) days after receipt of such report, Landlord shall
either approve the items listed on such report or deliver written notice to
Tenant of items which Landlord reasonably believes are not required to be
repaired or corrected under clauses (1) and (2) above (the "Disputed
Items"). Landlord shall only be obligated to perform such items as are
properly included under clauses (1) and (2) above and may select any
commercially reasonable method designed to cause the conditions identified
by Tenant to be in good operating condition or in compliance with such laws
as the case may be ("Landlord's Work"). If Landlord and Tenant cannot agree
within five (5) days after the delivery of Landlord's notice on the
conditions which require repair or correction, Landlord may elect to
perform all such repairs and corrections but reserving the right to recover
from Tenant amounts which Landlord expends on items which Landlord notifies
Tenant are not required to be repaired or corrected under clauses (1) and
(2) above. Disputed items shall be resolved by arbitration under the
Commercial Real Estate Rules of the American Arbitration Association.
Tenant shall reimburse Landlord for costs (plus interest at the Interest
Rate from the date such cost is incurred) incurred by Landlord in
correcting conditions identified by Tenant which are not properly included
under clauses (1)
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and (2) above. Landlord shall perform all Landlord's Work in a good and
workmanlike manner in accordance with applicable Laws at Landlord's sole
cost and expense without right of reimbursement from Tenant. Tenant shall
allow Landlord to have access to the Premises at all times in order for
Landlord to perform Landlord's Work and the parties shall mutually
cooperate in scheduling contractors to perform such work.
(c) Except as provided in subsection 7(a) above, Tenant shall accept the
Premises and the Building in their as-is condition and Landlord shall have
no obligation to improve or modify the Premises and/or the Building, except
that Landlord shall use reasonable efforts to obtain and enforce a one year
warranty of Landlord's Work from Landlord's contractor performing
Landlord's Work.
8. USES OF PREMISES.
(a) Tenant shall use the Premises solely for the use set forth in the
Basic Lease Information, and Tenant shall not use the premises for any
other purpose without obtaining the prior written consent of Landlord,
which consent shall be given or withheld in the sole and absolute
discretion of Landlord without any requirement of reasonableness in the
exercise of that discretion. Tenant shall, at its own cost and expense,
comply with all laws, rules, regulations, orders, permits, licenses and
ordinances issued by any governmental authority which relate to the
condition, use or occupancy of the Premises during the term of this Lease,
provided however, Tenant shall not be required to comply with Laws which
require capital improvements to the Premises which are not a result of
Tenant's particular use (including employment practices) or alteration of
the Premises. Tenant shall not use the Premises in any manner that will
constitute waste, nuisance, or unreasonable annoyance (including, without
limitation, the use of loudspeakers or sound or light apparatus that can be
heard or seen outside the Premises) to other tenants in the Property.
(b) "Hazardous Substance" shall mean the substances including within the
definitions of the term "Hazardous Substance" under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended,
42 U.S.C. Section 9601 et seq., and the California Carpenter-Presley-Tanner
Hazardous Substance Account Act; California Health & Safety Code Section
25300 et seq., and regulations promulgated thereunder, as amended.
"Hazardous Waste" shall mean (a) any waste listed as or meeting the
identified characteristics of a "Hazardous Waste" under the Resource
Conservation and Recovery Act of 1978, 42 U.S.C. Section 8901 et seq., and
regulations promulgated pursuant thereto, collectively "RCRA", or (b) any
waste meeting the identified characteristics of "Hazardous Waste" under
California Hazardous Waste Control law, California Health and Safety Code
Section 25100 et seq., and regulations promulgated pursuant thereto,
collectively "CHWCL". "Hazardous Waste Facility" shall mean a hazardous
waste facility as defined under CHWCL.
(c) Tenant covenants that, at its sole cost and expense, it will comply
with all applicable laws, rules, regulations, orders, permits, licenses and
operating plans of any governmental authority with respect to the use,
handling, generation, transportation, storage, treatment and/or disposal of
hazardous substances or wastes, and Tenant will provide Landlord with
copies of all permits, registrations or other similar documents that
authorize Tenant to conduct any such activities in connection with its
authorized use of the Premises. Additionally, Tenant agrees to comply with
the Rules and Regulations attached hereto as Exhibit C, the requirements of
the Board of Fire Underwriters or Landlord's insurance carrier, and to
comply with covenants, conditions and restrictions ("CC&R's"), if any,
applicable to the Property.
(d) Tenant agrees that it shall not operate on the Premises any facility
required to be permitted or licensed as a Hazardous Waste Facility or for
which interim status as such is required. Nor shall Tenant store any
Hazardous Wastes on the Premises for ninety (90) days or more.
(e) Tenant agrees to comply with all applicable laws, rules, regulations,
orders, and permits relating to underground storage, tanks (including any
installation, monitoring, maintenance, closure and/or removal of such
tanks) as such tanks are defined in California Health and Safety Code,
Section 25281(u) including, without limitation, complying with California
Health and Safety Code Sections 25280-25299.6 and the regulations
promulgated thereunder. Tenant shall furnish to Landlord copies of all
registrations and permits for all underground storage tanks.
(f) If applicable, Tenant shall provide to Landlord in writing the
following information and/or documentation at the Commencement Date and
within sixty (60) days of any change in the required information and/or
documentation:
(1) A list of all hazardous substances and/or wastes that Tenant uses,
handles, generates, transports, stores, treats or disposes in connection
with its operations on the Premises.
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(ii) Copies of all Material Safety Data Sheets ("MSDS's")
required to be completed with respect to operations of Tenant at the
Premises in accordance with Title 8, California Code of Regulations
Section 5194 or 42 U.S.C. Section 11021, or any amendments thereto. In
lieu of this requirement, Tenant may provide a Hazardous Materials
Inventory Sheet that details the MSDS's.
(iii) Copies of all hazardous waste manifests, as defined in Title
26, California Code of Regulations Section 22-66260.10, that Tenant is
required to complete in all connections with its operations at the
Premises.
(iv) A copy of any Hazardous Materials Management Plans required
with respect to Tenant's operations.
(v) Copies of any Contingency Plans and Emergency Procedures
required of Tenant due to its operations in accordance with Title 26,
Section 22-66260.10, of the California Code of Regulations, and any
amendments thereto.
(vi) Copies of any biennial reports to be furnished to California
Department of Health Services relating to hazardous substances or
wastes.
(vii) Copies of all industrial waste water discharge permits.
(g) Tenant shall secure Landlord's prior written approval for any
proposed receipt, storage, possession, use, transfer or disposal of
"Radioactive Materials" or "Radiation", as such materials are defined in Title
26, California Code of Regulations Sections 17-30100 or possessing the
characteristics of the materials so defined, which approval Landlord may
withhold in its sole and absolute discretion. The Tenant in connection with any
authorized receipt, storage, possession, use, transfer or disposal of
radioactive materials or radiation shall:
(i) Comply with all federal, state and local laws, rules,
regulations, orders, licenses and permits;
(ii) Furnish Landlord with a list of all radioactive materials
or radiation received, stored, possessed, used, transferred or
disposed; and
(iii) Furnish Landlord with all licenses, registration materials,
inspection reports, orders and permits in connection with the receipt,
storage, possession, use, transfer or disposal or radioactive
materials or radiation.
(h) Tenant agrees to comply with any and all applicable laws, rules,
regulations, and orders with respect to the release into the environment of any
hazardous wastes or substances or radiation or radioactive materials. Tenant
agrees to notify Landlord in writing of any unauthorized release into the
environment within twenty-four (24) hours of the time at which Tenant becomes
aware of such release.
(i) Tenant shall indemnify, defend, and hold Landlord harmless from any
and all claims, losses (including, but not limited to, loss of rental income and
loss due to business interruption), damages, (including diminution in value or
loss of rental value following expiration or earlier termination of the Term)
liabilities, costs, legal fees, and expenses of any sort arising out of or
relating to any unauthorized release into the environment of hazardous
substances or wastes or radiation or radioactive materials by Tenant or any of
Tenant's agents, contractors or invitees, or Tenant's failure to comply with
Subparagraphs (a)-(h) of this section of the Lease.
(j) Tenant agrees to cooperate with Landlord in furnishing Landlord with
complete information regarding Tenant's receipt, handling, use, storage,
transportation, generation, treatment and/or disposal of hazardous substances
or wastes or radiation or radioactive materials. Upon request, Tenant agrees to
grant Landlord reasonable access at reasonable times to the Premises to inspect
Tenant's receipt, handling, use, storage, transportation, generation, treatment
and/or disposal of hazardous substances wastes or radiation or radioactive
materials without being deemed guilty of any disturbance of Tenant's use or
possession and without being liable to Tenant in any manner.
(k) Notwithstanding Landlord's rights of inspection and review under this
paragraph, Landlord shall have no obligation or duty to so inspect or review,
and no third party shall be entitled to rely on Landlord to conduct any sort of
inspection or review by reason of the provisions of this paragraph.
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(i) Landlord agrees that Tenant shall have no liability or responsibility
whatsoever for any Hazardous Substances or Hazardous Waste on or about
the Premises, the Common Areas or the Property except if brought onto
the Property or caused or exacerbated by Tenant and/or Tenant's
agents, contractors, licensees, invitees, employees or other persons
in the Premises during the Term.
(m) This Section 8 of the Lease shall survive termination of the Lease.
9. ALTERATIONS.
(a) Initial Alterations.
(i) Preliminary Plans. Preliminary plans and specifications for
construction of the tenant improvements to be initially installed by
Tenant in the Premises ("Initial Alterations") shall be prepared by a
licensed architect as is proposed by Tenant and reasonably approved by
Landlord (the "Architect"). The preliminary plans and specifications
shall be submitted to Landlord for Landlord's approval which approval
shall not be unreasonably withheld, conditioned or delayed, provided
that Landlord may withhold such consent, in Landlord's sole
discretion, if the construction contemplated by such preliminary plans
will affect the structure, roof, or the exterior appearance of the
Building, or will have an adverse affect on the utility systems of the
Building. The preliminary plans and specifications approved as set
forth above are referred to herein as the "Approved Preliminary
Plans."
(ii) Working Drawings. Promptly following approval of the Approved
Preliminary Plans, Tenant shall instruct the Architect to produce, and
submit to Landlord for review and approval, which approval shall not
be unreasonably withheld, conditioned or delayed, working drawings and
specifications. The working drawings and specifications which have
been approved as provided herein are hereinafter referred to as the
"Approved Working Drawings."
(iii) Selection of Contractor. Tenant shall engage a general
contractor as is proposed by Tenant and reasonably approved by
Landlord (the "Contractor") to construct the Initial Alterations.
(iv) Construction. Tenant shall cause construction of the Initial
Alterations to be completed in a good and workmanlike manner and in
compliance with all applicable laws, rules and regulations. Tenant
shall provide access to Landlord at all reasonable times for the
purpose of inspecting the construction of the Initial Alterations and
shall cooperate with Landlord and Landlord's agents during such
inspections and provide to Landlord and Landlord's agents such
information as Landlord or Landlord's agents may reasonably request.
Landlord shall not charge a plan review, construction management fee
or any other fee in connection with the design and construction of the
Initial Alterations.
(v) Change Requests. No material changes to the Approved Working
Drawings requested by Tenant shall be made without Landlord's prior
approval which shall not be unreasonably withheld, condition or
delayed. Any changes to the Approved Working Drawings shall be in
writing and shall be signed by both Landlord and Tenant prior to the
change being made.
(vi) Plans and Specifications. Upon completion, Tenant shall deliver
to Landlord a complete set of "as-built" plans and specifications for
the Initial Alterations.
(b) Additional Alterations. As used in this Section 9, the term
"alteration" shall include the Initial Alterations and any subsequent
alteration, addition or improvement. Tenant shall give Landlord not less
than ten (10) days' notice of any alteration Tenant desires to make to the
Premises. Except for the Initial Alterations, Tenant shall not make any
alteration in, on or about the Premises without the prior written consent
of Landlord unless the alteration does not affect the Building structure,
the exterior appearance of the Building, the roof or the Building systems
(e.g., electrical systems) and such alteration does not require a building
permit and the cost of the alteration is not in excess of Fifteen Thousand
Dollars ($15,000.00). Tenant shall comply with all rules, laws, ordinances
and requirements applicable at the time Tenant makes any alteration and
shall deliver to Landlord a complete set of "as built" plans and
specifications for each alteration. Tenant shall be solely responsible for
maintenance and repair of all alterations made by Tenant.
(c) Liens. If, because of any act or omission of Tenant or anyone
claiming by, through, or under Tenant, any mechanics' lien or other lien is
filed against the Premises or against other property of Landlord (whether
or not the lien is valid or enforceable), Tenant, at its own expense, shall
cause it to be discharged
8
of record (by lien release bond or otherwise) within a reasonable time, not
to exceed thirty (30) days, after the date of the filing. In addition,
Tenant shall defend and indemnify Landlord and hold it harmless from any
and all claims, losses, damages, judgments, settlements, cost and expenses,
including attorneys' fees, resulting from the lien.
(d) Ownership of Alterations. Any alteration made by Tenant shall become
Landlord's property, at Landlord's election, upon the expiration or earlier
termination of the Term. Except as provided in subsection 9(d), Landlord
may require Tenant, at Tenant's sole expense and by the end of the Term, to
remove any alterations (including the Initial Alterations) made by Tenant
and to restore the Premises to its condition prior to the alteration.
(e) Request Regarding Removal Obligation. At the time that Tenant requests
Landlord's consent to any alteration (including the Initial Alterations),
Tenant may request, and promptly following receipt of such request,
Landlord shall notify Tenant if Landlord will require Tenant, at Tenant's
sole expense, to remove any or all of the alteration by the end of the
Term, and to restore the Premises to its condition prior to the alteration.
Landlord will not require removal of the Initial Alterations to the extent
such alterations are for general office use and will not require unusual
expenses of demolition and removal, as reasonably determined by Landlord.
10. REPAIRS.
(a) Tenant's Obligation. Except as provided in subsection 10(b), Tenant,
at all times during the Term and at Tenant's sole cost and expense, shall
keep the Premises and every part thereof in good condition and repair,
ordinary wear and tear, damage thereto not caused by Tenant, by fire,
earthquake, acts of God or the elements excepted. Tenant hereby waives all
right to make repairs at the expense of Landlord or in lieu thereof to
vacate the Premises as provided in California Civil Code Section 1942 or
any other law, statute or ordinance now or hereafter in effect.
Notwithstanding anything to the contrary contained in this Lease, Tenant
shall not be responsible for repairing or restoring the Premises or any
part thereof to the extent required as a result of the willful misconduct
or active negligence of Landlord or its agents, representatives, employees
or contractors.
(b) Landlord's Obligations. Landlord, at Landlord's expense, without
reimbursement from Tenant (other than the cost of a capital improvement
required to be made during the Term as a result of a change in applicable
Laws after the date hereof, as may be included in Operating Expenses under
subsection 5(b), shall repair and maintain the structural portions of the
roof (but not roof membrane or other non-structural elements of the roof)
and structural portions of the Building except that Tenant shall pay to
Landlord the cost of the maintenance and repairs to the extent required as
a result of the act, neglect or fault of Tenant and/or Tenant's agents,
contractors, employees or invitees. There shall be no abatement of Rent and
no liability of Landlord by reason of any injury to or interference with
Tenant's business arising from the making of any repairs, alterations or
improvements in or to the fixtures, appurtenances and equipment therein.
Landlord shall maintain the Common Areas subject to reimbursement of its
expenses.
11. DAMAGE OR DESTRUCTION.
(a) Landlord's Obligation to Rebuild. If the Premises are damaged or
destroyed, Landlord promptly and diligently shall repair the Premises
(subject to the limitations specified in this Section 11) unless Landlord
has the option to terminate this Lease as provided herein, and Landlord
elects to terminate.
(b) Right to Terminate. Landlord and Tenant each shall have the option to
terminate this Lease if the Premises or the Building is destroyed or
damaged by fire or other casualty, regardless of whether the casualty is
insured against under this Lease, if Landlord reasonably determines that
Landlord's obligation to repair the Premises or the Building under this
Section 11 cannot be completed within two hundred seventy (270) days after
the casualty. If a party desires to exercise the right to terminate this
Lease as a result of a casualty, the party shall exercise the right by
giving the other party written notice of its election to terminate within
thirty (30) days after Landlord delivers written notice of the estimated
time to complete such repairs, in which event this Lease shall terminate
fifteen (15) days after the date of the notice. If neither Landlord nor
Tenant exercises the right to terminate this Lease, Landlord promptly shall
commence the process of obtaining necessary permits and approvals, and
shall commence repair of the Premises as soon as practicable and thereafter
prosecute the repair diligently to completion, in which event this Lease
shall continue in full force and effect.
(c) Limited Obligation to Repair. Landlord's obligation, should Landlord
elect or be obligated to repair or rebuild, shall be limited to the
Building shell and other portions of the Premises to the extent actually
9
insured by Landlord under insurance policies carried by Landlord. Tenant,
at its option and expense, shall replace or fully repair all trade
fixtures, equipment and other improvements installed by Tenant and existing
at the time of the damage or destruction.
(d) Abatement of Rent. In the event of any damage or destruction to thirty
percent (30%) or more of the square footage of the Premises which does not
result in the termination of this Lease, both the Base Rent and Operating
Expenses shall be temporarily abated proportionately to the degree the
Premises are untenantable as a result of the damage or destruction,
commencing from the date of the damage or destruction and continuing during
the period required by Landlord to substantially complete its repair and
restoration of the Premises. In the event of any damage or destruction to
less than thirty percent (30%) of the square footage of the Premises, which
does not result in the termination of this Lease, only the Base Rent shall
be temporarily abated proportionately to the degree the Premises are
untenantable as a result of the damage or destruction, commencing from the
date of the damage or destruction and continuing during the period required
by Landlord to substantially complete its repair and restoration of the
Premises. Notwithstanding the foregoing, nothing herein shall preclude
Landlord from being entitled to collect the full amount of any rent loss
insurance proceeds. Tenant shall not be entitled to any compensation or
damages from Landlord for loss of the use of the Premises, damage to
Tenant's personal property or any inconvenience occasioned by any damage,
repair or restoration. Tenant hereby waives the provisions of Section 1932,
Subdivision 2, and Section 1933, Subdivision 4, of the California Civil
Code, and the provisions of any similar law hereafter enacted.
(e) Damage Near End of Term and Extensive Damage. In addition to the
rights to termination under subsection 11(b), either Landlord or Tenant
shall have the right to cancel and terminate this Lease as of the date of
the occurrence of destruction or damage if the Premises or the Building is
substantially destroyed or damaged (i.e., there is damage or destruction
which Landlord determines would require more than six (6) months to
repair) and made untenantable during the last twelve (12) months of the
Term. Landlord or Tenant shall give notice of its election to terminate
this Lease under this subsection 11(e) within thirty (30) days after
Landlord determines that the damage or destruction would require more than
six (6) months to repair. If neither Landlord nor Tenant elects to
terminate this Lease, the repair of the damage shall be governed by
subsection 11(a) or 11(b), as the case may be. For purposes of this
Section, if Tenant has been granted an option to extend the Term and the
period within which Tenant is entitled to exercise such option has not
lapsed, then the damage or destruction shall not be deemed to have occurred
during the last year of the Term if Tenant exercises its option to extend
within twenty (20) days after the event of damage or destruction or the
date Tenant is required to exercise such option under this Lease, whichever
is earlier, in accordance with the requirements of this Lease.
(f) Insurance Proceeds. If this Lease is terminated, Landlord may keep all
the insurance proceeds resulting from the damage, except for those proceeds
which specifically insured Tenant's personal property and trade fixtures.
12. EMINENT DOMAIN. If all or any part of the Premises is taken for public or
quasi-public use by a governmental authority under the power of eminent domain
or is conveyed to a governmental authority in lieu of such taking, and if the
taking or conveyance causes the remaining part of the Premises to be
untenantable and inadequate for use by Tenant for the purpose for which they
were leased, then Tenant, at its option and by giving notice within fifteen (15)
days after the taking, may terminate this Lease as of the date Tenant is
required to surrender possession of the Premises. If a part of the Premises is
taken or conveyed but the remaining part is tenantable and adequate for Tenant's
use, then this Lease shall be terminated as to the part taken or conveyed as of
the date Tenant surrenders possession; Landlord shall make such repairs,
alterations and improvements as may be necessary to render the part not taken or
conveyed tenantable; and the Rent shall be reduced in proportion to the part of
the Premises taken or conveyed. All compensation awarded for the taking or
conveyance shall be the property of Landlord without any deduction therefrom for
any estate of Tenant, and Tenant hereby assigns to Landlord all its right, title
and interest in and to the award. Tenant shall have the right, however, to
recover from the governmental authority, but not from Landlord, such
compensation as may be awarded to Tenant on account of the interruption of
Tenant's business, moving and relocation expenses; and removal of Tenant's trade
fixtures and personal property.
13. INDEMNITY AND INSURANCE.
(a) Indemnity. Tenant shall be responsible for, shall insure against, and
shall indemnify Landlord and hold Landlord harmless from, any and all claims,
demands, losses, liabilities, cost, fees and expenses, including attorneys',
experts' and consultants' fees in any way related to any loss, damage or injury
to person or property occurring in, on or about the Premises, except to the
extent it is determined that such loss or damage was caused by the negligence
or willful misconduct of Landlord or Landlord's representatives, servants,
employees or contractors, and Tenant hereby releases Landlord from any and
10
all liability for the same. Tenant's obligation to indemnify Landlord and
its constituent parts hereunder shall include the duty to defend against
any claims asserted by reason of any loss, damage or injury, and to pay
any judgments, settlements, costs, fees and expenses, including attorneys'
fees, incurred in connection therewith.
(b) Insurance. At all times during the term of this Lease, Tenant shall
carry, at its own expense, for the protection of Tenant, Landlord, and
Landlord's management agents, as their interests may appear, one or more
policies of comprehensive general public liability and property damage
insurance, issued by one or more insurance companies acceptable to
Landlord, with minimum coverages of One Million Dollars ($1,000,000.00)
for injury to one person in any one accident, Three Million Dollars
($3,000,000.00) for injuries to more than one person in any one accident
and Two Million Dollars ($2,000,000.00) in property damage per accident
and insuring against any and all liability for which Tenant is responsible
under this Lease. The insurance policy or policies shall name Landlord,
Landlord's constituent parts and Landlord's management agents as
additional insureds, and shall provide that the policy or policies may not
be cancelled on less than thirty (30) days' prior written notice to
Landlord. Tenant shall furnish Landlord with certificates evidencing the
insurance. If Tenant fails to carry the insurance and furnish Landlord
with copies of all the policies after a request to do so, Landlord shall
have the right to obtain the insurance and collect the cost thereof from
Tenant as additional Rent.
(c) Landlord's Insurance. Landlord agrees to purchase and keep in force
and effect commercial general liability insurance in an amount not less
than One Million Dollars ($1,000,000.00) per occurrence and Three Million
Dollars ($3,000,000.00) general aggregate, and All Risk property insurance
with an agreed amount endorsement, and Boiler and Machinery insurance on
the Building, with such deductibles as Landlord may in its discretion
determine. Notwithstanding the foregoing, so long as the Landlord
hereunder shall be The Prudential Insurance Company of America
("Prudential"), the blanket coverage maintained by Prudential under its
insurance program for its portfolio of properties shall be deemed to be
satisfactory under this clause. Landlord's insurance shall provide that it
is specific and not contributory and the property insurance shall contain
a clause pursuant to which the insurance carriers waive all rights of
subrogation against Tenant with respect to losses payable under such
policies.
14. ASSIGNMENT AND SUBLETTING.
(a) Landlord's Consent. Tenant shall not assign, sublet or otherwise
transfer all or any portion of Tenant's interest in this Lease
(collectively, "sublet") without Landlord's prior written consent, which
consent shall not be unreasonably withheld, conditioned or delayed.
Consent by Landlord to one sublet shall not be deemed to be a consent to
any subsequent sublet. Notwithstanding the foregoing, Tenant shall not, in
any event, enter into any sublease for a term longer than twenty four (24)
months nor, during the Term, shall the Premises be subject to any sublease
or subleases for a period in the aggregate longer than thirty six (36)
months (i.e. the Premises during the initial term shall not be subject to
any subleases for at least seven (7) years of the ten (10) years of the
Term).
(b) Effect of Sublet. Each sublet to which Landlord has consented shall
be by an instrument in writing, in a form satisfactory to Landlord as
evidenced by Landlord's written approval. Each sublessee shall agree in
writing, for the benefit of Landlord, to assume, to be bound by and to
perform the terms, conditions and covenants of this Lease to be performed
by Tenant. Tenant shall not be released from personal liability for the
performance of each term, condition and covenant of this Lease, and
Landlord shall have the right to proceed against Tenant without proceeding
against the subtenant.
(c) Information to be Furnished. If Tenant desires at any time to sublet
the Premises, Tenant first shall notify Landlord of its desire to do so
and shall submit in writing to Landlord: (i) the name of the proposed
subtenant; (ii) the nature of the proposed subtenant's business to be
carried on in the Premises; (iii) the terms and provisions of the proposed
sublease and a copy of the proposed sublease form; and (iv) such financial
information, including financial statements, as Landlord reasonably may
request concerning the proposed subtenant.
(d) Landlord's Election. At any time within twenty (20) days after
Landlord's receipt of the information specified in subsection 14(c),
Landlord, by written notice to Tenant, may elect either (i) to consent to
the sublet by Tenant; or (ii) to refuse its consent to the sublet. If
Landlord fails to elect either of the alternatives within the thirty (30)
day period, its shall be deemed that Landlord has refused its consent to
the sublet. If Landlord refuses its consent, Landlord shall deliver to
Tenant a statement of the basis for its refusal. Any attempted sublet
without Landlord's consent shall not be effective.
(e) Payment Upon Sublet. If Landlord consents to the sublet, Tenant
thereafter may enter into a valid
11
sublet of the Premises or portion thereof, upon the terms and conditions
set forth in the information furnished by Tenant to Landlord pursuant to
subsection 14(c), subject to the condition that fifty percent (50%) of any
excess of the monies due to Tenant under the sublet ("subrent") over the
Rent required to be paid by Tenant hereunder plus any commissions paid by
Tenant in connection with such sublease shall be paid to Landlord. For
purposes of such calculations, commissions paid by Tenant shall be
amortized over the term of the sublease. Any subrent to be paid to
Landlord pursuant hereto shall be payable to Landlord as and with the Base
Rent payable to Landlord hereunder pursuant to the terms of Section 4. The
term "subrent" as used herein shall include any consideration of any kind
received, or to be received, by Tenant from the subtenant, if the sums are
related to Tenant's interest in this Lease or in the Premises, including,
without limitation, bonus money, and payments (in excess of fair market
value thereof) for Tenant's assets, fixtures, inventory, accounts,
goodwill, equipment, furniture, general intangibles and any capital stock
or other equity ownership of Tenant.
(f) Executed Counterparts. No sublet shall be valid nor shall any
subtenant take possession of the Premises until an executed counterpart of
the sublease has been delivered to Landlord and approved in writing.
(g) Transfer to Purchaser. A transfer of this Lease to one or more
purchasers of a majority interest in Tenant shall be deemed a sublet under
this Lease.
(h) Transfers to Affiliates. Notwithstanding anything to the contrary in
this Lease, Tenant may assign this Lease or sublet the Premises, without
Landlord's consent, to any corporation which controls, is controlled by or
is under common control with Tenant, or to any corporation resulting from
the merger or consolidation with Tenant, or to any person or entity which
acquires all the assets of Tenant as a going concern of the business that
is being conducted on the Premises, provided that the assignee assumes, in
full, the obligations of Tenant under this Lease.
(i) Costs. In the event Tenant shall assign or sublet the Premises or
request the consent of Landlord to any assignment, subletting,
hypothecation or other action requiring Landlord's consent hereunder, then
Tenant shall pay a processing fee in the amount of $500 plus Landlord's
reasonable attorneys' fees incurred in connection therewith. Landlord's
charge for attorneys' fees in connection with a review of a proposed
assignment or sublease shall not exceed $2000 so long as the sublease does
not purport to amend any of the terms of this Lease or to obligate
Landlord to perform any additional obligations under this Lease and Tenant
does not request any modifications to Landlord's form consent to such
assignment or sublease.
15. DEFAULT.
(a) Tenant's Default. At the option of Landlord, a material breach of
this Lease by Tenant shall exist if any of the following events
(severally, "Event of Default"; collectively, "Events of Default") shall
occur: (i) if Tenant shall have failed to pay Rent, including Tenant's
Percentage Share of Operating Expenses, or any other sum required to be
paid hereunder when due and such failure is not cured within five (5) days
after written notice from Landlord (which notice may be in the form of a
statutory notice to pay rent or quit); (ii) if Tenant shall have failed to
perform any term, covenant or condition of this Lease except those
requiring the payment of money, and Tenant shall have failed to cure the
breach within fifteen (15) days after written notice from Landlord if the
breach could reasonably be cured within the fifteen (15) day period;
provided, however, if the failure could not reasonably be cured within the
fifteen (15) day period, then Tenant shall not be in default unless it has
failed to promptly commence and thereafter continue to make diligent and
reasonable efforts to cure the failure as soon as practicable as
reasonably determined by Landlord; (iii) if Tenant shall have assigned its
assets for the benefit of its creditors; (iv) if the sequestration of,
attachment of, or execution on, any material part of the property of
Tenant or on any property essential to the conduct of Tenant's business
shall have occurred, and Tenant shall have failed to obtain a return or
release of the property within thirty (30) days thereafter, or prior to
sale pursuant to any sequestration, attachment or levy, whichever is
earlier; (v) if Tenant shall have abandoned the Premises and failed to pay
Rent; (vi) if a court shall have made or entered any decree or order
adjudging Tenant to be insolvent, or approving as properly filed a
petition seeking reorganization of Tenant, or directing the winding up or
liquidation of Tenant, and the decree or order shall have continued for a
period of thirty (30) days; (vii) if Tenant shall make or suffer any
transfer which constitutes a fraudulent or otherwise avoidable transfer
under any provision of the federal Bankruptcy laws or any applicable state
law; or (viii) if Tenant shall have failed to comply with the provisions
of Section 23 or 25. An Event of Default shall constitute a default under
this Lease.
(b) Remedies Upon Tenant's Default. Upon an Event of Default, Landlord
shall have the following remedies, in addition to all other rights and
remedies provided by law, equity, statute or otherwise provided
12
in this Lease, to which Landlord may resort cumulatively or in the
alternative:
(i) Landlord may continue this Lease in full force and effect, and
this Lease shall continue in full force and effect as long as Landlord
does not terminate Tenant's right to possession, and Landlord shall
have the right to collect Rent when due. During the period Tenant is
in default, Landlord may enter the Premises and relet it, or any part
of it, to third parties for Tenant's account, provided that any Rent
in excess of the Rent due hereunder shall be payable to Landlord.
Tenant shall be liable immediately to Landlord for all costs Landlord
incurs in reletting the Premises, including, without limitation,
brokers' commissions, expenses of cleaning and redecorating the
Premises required by the reletting and like costs. Reletting may be
for a period shorter or longer than the remaining Term of this Lease.
Tenant shall pay to Landlord the Rent and other sums due under this
Lease on the dates the Rent is due, less the Rent and other sums
Landlord receives from any reletting. No act by Landlord allowed by
this subsection (i) shall terminate this Lease unless Landlord
notifies Tenant in writing that Landlord elects to terminate this
Lease.
(ii) Landlord may terminate Tenant's right to possession of the
Premises at any time by giving written notice to that effect. No act
by Landlord other than giving written notice to Tenant shall terminate
this Lease. Acts of maintenance, efforts to relet the Premises or the
appointment of a receiver on Landlord's initiative to protect
Landlord's interest under this Lease shall not constitute a
termination of Tenant's right to possession. On termination, Landlord
shall have the right to remove all personal property of Tenant and
store it at Tenant's cost and to recover from Tenant as damages: (a)
the worth at the time of award of unpaid Rent and other sums due and
payable which had been earned at the time of termination; plus (b) the
worth at the time of award of the amount by which the unpaid Rent and
other sums due and payable which would have been payable after
termination until the time of award exceeds the amount of the Rent
loss that Tenant proves could have been reasonably avoided; plus (c)
the worth at the time of award of the amount by which the unpaid Rent
and other sums due and payable for the balance of the Term after the
time of award exceeds the amount of the Rent loss that Tenant proves
could be reasonably avoided; plus (d) any other amount necessary to
compensate Landlord for all the detriment proximately caused by
Tenant's failure to perform Tenant's obligations under this Lease, or
which, in the ordinary course of things, would be likely to result
therefrom, including, without limitation, any costs or expenses
incurred by Landlord: (1) in retaking possession of the Premises,
including reasonable attorneys' fees and costs therefor; (2)
maintaining or preserving the Premises for reletting to a new tenant,
including repairs or alterations to the Premises for the reletting;
(3) leasing commissions; (4) any other costs necessary or appropriate
to relet the Premises; and (5) 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 the laws of the State of California.
The "worth at the time of award" of the amounts referred to in subsections
(ii)(a) and (ii)(b) is computed by allowing interest at the Interest Rate, on
the unpaid Rent and other sums due and payable from the termination date
through the date of award. The "worth at the time of award" of the amount
referred to in subsection (ii)(c) is computed by discounting the 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, if Tenant is evicted or Landlord takes
possession of the Premises by reason of any default of Tenant hereunder.
(c) Landlord's Default. Landlord shall not be deemed to be in default in
the performance of any obligation required to be performed by Landlord
hereunder unless and until Landlord has failed to perform the obligation
within fifteen (15) days after receipt of written notice by Tenant to
Landlord specifying wherein Landlord has failed to perform the obligation;
provided, however, that if the nature of Landlord's obligation is such that
more than fifteen (15) days are required for its performance, then Landlord
shall not be deemed to be in default if Landlord shall commence the
performance within the fifteen (15) day period and thereafter shall
diligently prosecute the same to completion.
16. LANDLORD'S RIGHT TO PERFORM TENANT'S COVENANTS. If Tenant shall at any
time fail to make any payment or perform any other act on its part to be made
or performed under this Lease and Tenant does not cure such failure within the
applicable cure period provided herein (or such shorter period as Landlord may
reasonably deem appropriate in the event of an emergency), Landlord may, but
shall not be obligated to, make the payment or perform any other act to the
extent Landlord may deem desirable and, in connection therewith, pay expenses
and employ counsel. Any payment or performance by Landlord shall not waive or
release Tenant from any obligations of Tenant under this Lease. All sums so
paid by Landlord, and all penalties, interest and costs in connection therewith,
shall be due and payable by Tenant on the next day after any payment by
Landlord, together with interest thereon at the Interest Rate, from that date
to the date of payment thereof by Tenant to Landlord, plus collection costs and
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attorneys' fees. Landlord shall have the same rights and remedies for the
nonpayment thereof as in the case of default in the payment of Rent.
17. [Intentionally Omitted]
18. SURRENDER OF PREMISES. By taking possession of the Premises, except as
provided in Section 7, Tenant shall be deemed to have accepted the Premises and
the Property in good condition and repair, subject to all applicable laws, codes
and ordinances. On the expiration or early termination of this Lease, Tenant
shall surrender the Premises to Landlord in its condition as of the Base Rent
Commencement Date, normal wear and tear and damage due to casualty or
condemnation excepted. The foregoing exception for damage to the Premises shall
not apply to damage caused by Tenant and/or Tenant's agents, contractors,
employees and invitees except to the extent the waiver of certain claims
contained in Section 22 applies to such damage. Tenant shall remove from the
Premises all of Tenant's personal property, trade fixtures and any alterations
(including the Initial Alterations to the extent required to be removed under
subsection 9(e)) required to be removed pursuant to Section 9. Tenant shall
repair damage or perform any restoration work required by the removal. If Tenant
fails to remove any personal property, trade fixtures or alterations after the
end of the Term, Landlord may remove the property and store it at Tenant's
expense, including interest at the Interest Rate. If the Premises are not so
surrendered at the termination of this Lease, Tenant shall indemnify Landlord
against all loss or liability resulting from delay by Tenant in so surrendering
the Premises, including, without limitation, any claims made by any succeeding
tenant, losses to Landlord due to lost opportunities to lease to succeeding
tenants, and attorneys' fees and costs.
19. HOLDING OVER. If Tenant remains in possession of all or any part of the
Premises after the expiration of the Term or the termination of this Lease, the
tenancy shall be month-to-month only and shall not constitute a renewal or
extension for any further term. In such event, Base Rent shall be increased in
an amount equal to one hundred fifty percent (150%) of the Base Rent during the
last month of the Term (including any extensions), and any other sums due under
this Lease shall be payable in the amount, and at the times, specified in this
Lease. The month-to-month tenancy shall be subject to every other term,
condition, covenant and agreement contained in this Lease and Tenant shall
vacate the Premises immediately upon Landlord's request.
20. ACCESS TO PREMISES. Tenant shall permit Landlord and its agents to enter
the Premises at all reasonable times upon reasonable notice, except in the case
of an emergency (in which event no notice shall be necessary), to inspect the
Premises; to post Notices of Nonresponsibility and similar notices and to show
the Premises to interested parties such as prospective mortgagors, purchasers
and tenants; to make necessary alterations, additions, improvements or repairs
either to the Premises, the Building or other premises within the Building; and
to discharge Tenant's obligations hereunder when Tenant has failed to do so
within a reasonable time after written notice from Landlord. The above rights
are subject to reasonable security regulations of Tenant, and to the
requirement that Landlord shall at all times act in a manner to cause the least
possible interference with Tenant's operations.
21. SIGNS. The size, design, color, location and other physical aspects of any
sign in or on the Building shall be subject to the CC&R's, if any, Rules and
Landlord's approval (not unreasonably withheld) prior to installation, and to
any appropriate municipal or other governmental approvals. The costs of any
permitted sign, and the costs of its installation, maintenance and removal,
shall be at Tenant's sole expense and shall be paid within ten (10) days of
Tenant's receipt of a bill from Landlord for the costs.
22. WAIVER OF SUBROGATION. Anything in this Lease to the contrary
notwithstanding, Landlord and Tenant each hereby waives and releases the other
of and from any and all rights of recovery, claim, action or cause of action
against the other, its subsidiaries, directors, agents, officers and employees,
for any loss or damage that may occur in the Premises, the Building or the
Property; to improvements to the Building or personal property (building
contents) within the Building; or to any furniture, equipment, machinery, goods
and supplies not covered by this Lease which Tenant may bring or obtain upon the
Premises or any additional improvements which Tenant may construct on the
Premises by reason of fire, the elements or any other cause which is required to
be insured against under this Lease, regardless of cause or origin, including
negligence of Landlord or Tenant and their agents, subsidiaries, directors,
officers and employees, to the extent insured against under the terms of any
insurance policies carried by Landlord or Tenant and in force at the time of any
such damage, but only if the insurance in question permits such a partial
release in connection with obtaining a waiver of subrogation from the insurer.
Because this Section 22 will preclude the assignment of any claim mentioned in
it by way of subrogation or otherwise to an insurance company or any other
person, each party to this Lease agrees immediately to give to each insurance
company written notice of the terms of the mutual waivers contained in this
Section and to have the insurance policies properly endorsed, if necessary, to
prevent the invalidation of the insurance coverages by reason of the mutual
waivers contained in this Section.
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23. Subordination.
(a) Subordinate Nature. Except as provided in subsection 23(b), this Lease
is subject and subordinate to all ground and underlying leases, mortgages
and deeds of trust which now or may hereafter affect the Property, the
Building or the Premises, to the CC&R's, if any, and to all renewals,
modifications, consolidations, replacements and extensions thereof. Subject
to subsection 23(c), within fifteen (15) days after Landlord's written
request therefor, Tenant shall execute any and all documents required by
Landlord, the lessor under any ground or underlying lease ("Lessor"), or
the holder or holders of any mortgage or deed of trust ("Holder") to make
this Lease subordinate to the lien of any lease, mortgage or deed of trust,
as the case may be.
(b) Possible Priority of Lease. If a Lessor or a Holder advises Landlord
that it desires or requires this Lease to be prior and superior to a lease,
mortgage or deed of trust, Landlord may notify Tenant. Within seven (7)
days of Landlord's notice, Tenant shall execute, have acknowledged and
deliver to Landlord any and all documents or instruments, in the form
presented to Tenant, which Landlord, Lessor or Holder deems necessary or
desirable to make this Lease prior and superior to the lease, mortgage or
deed of trust.
(c) Recognition or Attornment Agreement. If Landlord or Holder requests
Tenant to execute a document subordinating this Lease, the document shall
provide that, so long as Tenant is not in default, Lessor or Holder shall
agree to enter into either a recognition or attornment agreement with
Tenant, or a new lease with Tenant upon the same terms and conditions as to
possession of the Premises, which shall provide that Tenant may continue to
occupy the Premises so long as Tenant shall pay the Rent and observe and
perform all the provisions of this Lease to be observed and performed by
Tenant.
24. TRANSFER OF THE PROPERTY. Upon transfer of the Property and assignment of
this Lease and assumption of this Lease by Landlord's successor, Landlord shall
be entirely freed and relieved of all liability under any and all of its
covenants and obligations contained in or derived from this Lease occurring
after the consummation of the transfer and assignment, and from all liability
for the Security Deposit. Subject to subsection 23(c), Tenant shall attorn to
any entity purchasing or otherwise acquiring the Premises at any sale or other
proceeding.
25. ESTOPPEL CERTIFICATES. Within fifteen (15) days following written request
by Landlord, Tenant shall execute and deliver to Landlord an estoppel
certificate, in the form prepared by Landlord. The certificate shall: (i)
certify that this Lease is unmodified and in full force and effect or, if
modified, state the nature of the modification and certify that this Lease, as
so modified, is in full force effect, and the date to which the Rent and other
charges are paid in advance, if any; (ii) acknowledge that there are not, to
Tenant's knowledge, any uncured defaults on the part of Landlord hereunder, or
if there are uncured defaults on the part of the Landlord, state the nature of
the uncured defaults; and (iii) evidence the status of the Lease as may be
reasonably required either by a lender making a loan to Landlord to be secured
by deed of trust or mortgage covering the Premises or a purchaser of the
Property from Landlord.
26. MORTGAGEE PROTECTION. In the event of any default on the part of
Landlord, Tenant will give notice by registered or certified mail to any
beneficiary of a deed of trust or mortgagee of a mortgage covering the Property
(provided Tenant has received notice of the name and address of such person)
and shall offer the beneficiary or mortgagee a reasonable opportunity to cure
the default, including time to obtain possession of the Property or the
Premises by power of sale or a judicial foreclosure, if such should prove
necessary to effect a cure; provided, however, that the time to cure such
default shall not exceed thirty (30) days after the expiration of the time
period granted to Landlord to cure such default, or if additional time is
requested, the beneficiary, mortgagor or ground lessor shall have the right to
such extra time only upon giving Tenant reasonable assurances that such default
will be cured.
27. ATTORNEYS' FEES. If either party shall bring any action or legal
proceeding for damages for an alleged breach of any provision of this Lease, to
recover rent or other sums due, to terminate the tenancy of the Premises or to
enforce, protect or establish any term, condition or covenant of this Lease or
right of either party, the prevailing party shall be entitled to recover, as a
part of the action or proceedings, or in a separate action brought for that
purpose, such attorneys' fees and court costs as may be fixed by the court or
jury. The prevailing party shall be the party which secures a final judgement
in its favor.
28. BROKERS. Each party warrants and represents to the other that it has had
no dealings with any real estate broker or agent in connection with the
negotiation of this Lease, except for any brokers(s) specified in the Basic
Lease Information, and that it knows of no other real estate broker or agent
who is or might be entitled to a commission in connection with this Lease. The
representing party shall indemnify and hold harmless the other party from and
against any and all liabilities or expenses arising out of claims made by any
other broker or individual for commissions or fees resulting from a breach of
the foregoing representation.
15
29. PARKING. Tenant shall have the right to park passenger vehicles in the
parking stalls shown on attached Exhibit D for use by Tenant's employees,
contractors, agents, licensees and invitees ("Tenant's Parkers") during the Term
and any extension thereof. Tenant acknowledges that Kaiser Foundation Health
Plan, Inc. ("Kaiser") has the right to use the other spaces designated on
Exhibit D during the term of Kaiser's lease with Landlord. Landlord shall have
no obligation to police such parking or otherwise to assure that only Tenant's
Parkers are using the parking allocated to Tenant under this Section 29. Tenant
agrees not to use in excess of the foregoing parking allocation and agrees to
cooperate with Landlord and other tenants in the use of the parking facilities.
Landlord shall not be liable to Tenant, nor shall this Lease be affected, if any
parking is impaired by moratorium, initiative, referendum, law, ordinance,
regulation or order passed, issued or made by any governmental or
quasi-governmental body. The foregoing parking rights shall be furnished at no
cost to Tenant, except for such costs as are properly included in Operating
Expenses (i.e. parking lot maintenance and repairs, Real Estate Taxes, etc.).
30. UTILITIES AND SERVICES. Tenant shall be solely responsible for obtaining
and paying for all utilities and services, including heating, air conditioning,
ventilation (i.e., HVAC service contracts, janitorial and security) in
connection with the Premises. Landlord shall not be liable for, and Tenant shall
not be entitled to any abatement or reduction of Rent by reason of, no eviction
of Tenant shall result from and, further, Tenant shall not be relieved from the
performance of any covenant or agreement in this Lease because of, Landlord's
failure to furnish or Tenant's failure to obtain any such utility or service any
of the foregoing.
31. MODIFICATION FOR LENDER. If, in connection with obtaining institutional
financing for the Premises or any portion thereof, Landlord's lender shall
request reasonable modification to this Lease as a condition to such financing,
Tenant shall not unreasonably withhold, delay or defer its consent thereto,
provided such modifications do not materially affect Tenant's rights hereunder,
are reasonable (in Tenant's sole discretion), do not increase the obligations of
Tenant under this Lease, and do not materially or unreasonably interfere with
Tenant's use, enjoyment or occupation of the Premises in accordance with this
Lease.
32. ACCEPTANCE. Delivery of this Lease, duly executed by Tenant, constitutes
an offer to lease the Premises as set forth herein, and under no circumstances
shall such delivery be deemed to create an option or reservation to lease the
Premises for the benefit of Tenant. This Lease shall become effective and
binding only upon execution hereof by Landlord and delivery of a signed copy to
Tenant. Upon acceptance of Tenant's offer to lease under the terms hereof and
receipt by Landlord of the Rent for the first month of the Term and the Security
Deposit in connection with Tenant's submission of the offer, Landlord shall be
entitled to retain the sums and apply them to damages, costs and expenses
incurred by Landlord if Tenant fails to occupy the Premises. If Landlord rejects
the offer, the sums shall be returned to Tenant.
33. USE OF NAMES. Tenant shall not use the name of the Building or the name of
the business park in which the Building is located in the name or title of its
business or occupation without Landlord's prior written consent, which consent
Landlord may withhold in its sole discretion. Landlord reserves the right to
change the name of the Building without Tenant's consent and without any
liability to Landlord.
34. RECORDING. Neither Landlord nor Tenant shall record this Lease, nor a
short form memorandum of this Lease, without the prior written consent of the
other.
35. QUITCLAIM. Upon any termination of this Lease pursuant to its terms,
Tenant, at Landlord's request, shall execute, have acknowledged and deliver to
Landlord a quitclaim deed of all Tenant's interest in the Premises, Building and
Property created by this Lease.
36. NOTICES. Any notice or demand required or desired to be given under this
Lease shall be in writing and shall be given by hand delivery, telecopy or the
United States mail. Notices which are sent by telecopy shall be deemed to have
been given upon receipt. Notices which are mailed shall be deemed to have been
given when seventy-two (72) hours have elapsed after the notice was deposited in
the United States mail, registered or certified, the postage prepaid, addressed
to the party to be served. As of the date of execution of this Lease, the
addresses of Landlord and Tenant are as specified in the Basic Lease
Information. Either party may change its address by giving notice of the change
in accordance with this Section.
37. LANDLORD'S EXCULPATION. In the event of default, breach or violation by
Landlord (which term includes Landlord's partners, co-venturers and co-tenants,
and officers, directors, employees, agents and representatives of Landlord and
Landlord's partners, co-venturers and co-tenants) of any of Landlord's
obligations under this Lease, Landlord's liability to Tenant shall be limited to
its ownership interest in the Building and Property or the proceeds of a public
sale of the ownership interest pursuant to the foreclosure of a judgment against
Landlord. Landlord shall not be personally liable, or liable in any event, for
any deficiency beyond its ownership interest in the Building and Property.
16
38. ADDITIONAL STRUCTURES. Any diminution or interference with light, air or
view by any structure which may be erected on land adjacent to the Building
shall in no way alter this Lease or impose any liability on Landlord.
39. OPTION TO EXTEND.
(a) Notice of Exercise. Tenant shall have the right to extend the
initial term hereof for two (2) additional and consecutive periods of five
years each upon the same terms and conditions as stated herein, except for Base
Rent and, further, that Landlord shall not be obligated to make alterations or
modifications to the Building and/or Premises and the number of additional
periods shall be reduced by one for each extension that is exercised. Each such
extension is herein referred to as "Extended Term." Failure to timely exercise
any extension option hereunder shall cause all subsequent options to
immediately become null and void. Tenant must exercise its right, if at all, by
written notification (the "Notice of Exercise") to Landlord not less than nine
(9) months nor more than twelve (12) months prior to the expiration of the
initial term hereof, or the then current Extended Term, if any. Tenant's rights
under this Section 39 shall be null and void if Tenant is in default of any of
the provisions of this Lease beyond the expiration of the time period granted
to Tenant to cure such default either at the time Tenant gives Landlord its
Notice of Exercise or as of the date of the scheduled commencement of the
Extended Term.
(b) Options are Personal. The options to extend granted herein are
personal to the Adaptec, Inc. and to Adaptec's permitted affiliates as
described in subsection 14(h) and notwithstanding anything to the contrary
contained in the Lease, the rights contained in this Section 39 are not
assignable or transferable by Adaptec, Inc. Landlord grants the rights
contained herein to Tenant in consideration of Tenant's strict compliance with
the provisions hereof, including, without limitation, the manner of exercise of
this option.
(c) Fair Market Rental. If Tenant exercises the right to extend the term
then the Base Rent shall be adjusted to equal the Fair Market Rental for the
Premises as of the date of the commencement of each such Extended Term,
pursuant to the procedures hereinafter set forth. The term "Fair Market Rental"
means the Base Rent chargeable for the Leased Premises based upon the following
factors applicable to the Premises or any comparable premises:
(i) Rental rates being charged for comparable premises in the same
geographical location.
(ii) The relative locations of the comparable premises.
(iii) Improvements, or allowances provided for improvements, or to
be provided.
(iv) Rental adjustments, if any, or rental concessions.
(v) Services and utilities provided or to be provided.
(vi) Use limitations or restrictions.
(vii) Any other relevant Lease terms or conditions.
In no event, however, shall the Fair Market Rental be less than the Base
Rent in effect immediately prior to the commencement date of the Extended Term
in question. The Fair Market Rental evaluation may include provision for
further rent adjustments during the Extended Term in question if such
adjustments are commonly required in the market place for similar types of
leases.
(d) Determination of Fair Market Rental. Upon exercise of the right to
extend the term, and included within the Notice of Exercise, Tenant shall
notify Landlord of its opinion of Fair Market Rental as above defined for the
Extended Term. If Landlord disagrees with Tenant's opinion of the Fair Market
Rental, it shall so notify Tenant ("Landlord's Value Notice") within thirty
(30) days after receipt of Tenant's Notice of Exercise. If the parties are
unable to resolve their differences within ten (10) days thereafter, either
party may apply for Arbitration as provided below. If neither party applies for
Arbitration within ten (10) days after receipt by Tenant of Landlord's Value
Notice, Tenant shall be bound to the Fair Market Rental stated in Landlord's
Value Notice. Should either party elect to arbitrate, and if the arbitration is
not concluded before the commencement of the Extended Term, Tenant shall pay
Base Rent to Landlord in an amount equal to the Base Rent payable immediately
prior to the commencement of the Extended Term, until the Fair Market Rental is
determined in accordance with the arbitration provisions hereof ("Arbitration").
If the Fair Market Rental as determined by Arbitration differs from the Base
Rent payable immediately prior to the commencement of the Extended Term, then
any adjustment required to correct the amount previously paid by Tenant shall
be made by payment by the appropriate party within thirty (30) days after the
determination of Fair Market Rental by Arbitration has been concluded, as
provided herein. Tenant shall be obligated to make payment during the entire
Extended Term of the Base Rent determined in accordance with the Arbitration
17
procedures hereunder.
(e) Arbitration. In the event either party seeks Arbitration of Fair
Market Rental under the provisions hereof for the Extended Term, the other
party shall be bound to submit the matter for determination by Arbitration. The
Arbitration shall be conducted and determined in the County where the Leased
Premises are located.
(f) Demand for Arbitration. A party demanding Arbitration hereunder shall
make its demand in writing ("Demand Notice") within ten (10) days after service
of Landlord's Value Notice. A copy of the Demand Notice shall be sent to the
American Arbitration Association ("AAA"), San Francisco office, requesting that
a qualified Arbitrator be appointed in accordance with the Commercial Real
Estate Rules of AAA. The Arbitrator shall be a real estate broker with at least
seven (7) years' experience leasing properties in the same county for the
general type of use to which the Premises are devoted under the terms of this
Lease. The Arbitrator shall be a person who would be qualified to serve as an
expert witness and to give opinion testimony addressed to the issue in a court
of competent jurisdiction. Such a party is hereinafter referred to as the
"Arbitrator." The parties may, however, before sending the Demand Notice to AAA,
mutually agree upon an Arbitrator of their own choice, in which event such
appointment shall nullify the necessity of appointment of an Arbitrator by AAA.
(g) Decision of the Arbitrator. The Arbitrator so selected shall, within
ninety (90) days after his appointment, state in writing his determination as
to whether Landlord's valuation, or Tenant's valuation of Fair Market Rental,
most closely approximates his own. The Arbitrator may not state his own opinion
of Fair Market Rental, but is strictly limited to the selection of Landlord's
Fair Market Rental evaluation as stated in Landlord's Value Notice or Tenant's
Fair Market Rental evaluation as stated in the Notice of Exercise. The
Arbitrator shall have the right to consult experts and competent authorities
with factual information or evidence pertaining to a determination of Fair
Market Rental, but any such consultation shall be made in the presence of both
parties with full right to cross examine. The Arbitrator shall have no right to
propose a middle ground or any modification of either of the proposed
valuations, and shall have no power to modify the provisions of this Lease. The
valuation so chosen as most closely approximating that of the Arbitrator shall
constitute the decision of the Arbitrator and shall be final and binding upon
the parties, absent fraud or gross error. The Arbitrator shall render a
decision and award in writing, with counterpart copies to each party and
judgment thereon may be entered in any court of competent jurisdiction.
(h) Successor Arbitrator; Fees and Expenses. In the event of failure,
refusal, or inability of the Arbitrator to act in a timely manner, a successor
shall be appointed in the same manner referenced above. The fees and expenses
of the Arbitrator and the administrative hearing fee, if any, shall be divided
equally between the parties. Each party shall bear its own attorneys' fees and
other expenses including fees for witnesses in presenting evidence to the
Arbitrator.
40. GENERAL.
(a) Captions. The captions and headings used in this Lease are for the
purpose of convenience only and shall not be construed to limit or extend
the meaning of any part of this Lease.
(b) Time. Time is of the essence for the performance of each term,
condition and covenant of this Lease.
(c) Severability. If any provision of this Lease is held to be invalid,
illegal or unenforceable, the invalidity, illegality, or unenforceability
shall not affect any other provision of this Lease, but this Lease shall be
construed as if the invalid, illegal or unenforceable provision had not
been contained herein.
(d) Choice of Law; Construction. 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.
(e) Gender; Singular, Plural. 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.
(f) Binding Effect. The covenants and agreements contained in this Lease
shall be binding on the parties hereto and on their respective successors
and assigns (to the extent this Lease is assignable).
(g) Waiver. The waiver of either party of any breach of any term,
condition or covenant of this Lease shall not be deemed to be a waiver of
the provision or any subsequent breach of the same or any other term,
condition or covenant of this Lease. The subsequent acceptance of Rent
hereunder by Landlord shall not be deemed to be a waiver of any preceding
breach at the time of acceptance of the payment. No
18
covenant, term or condition of this Lease shall be deemed to have been waived
by either party unless the waiver is in writing signed by such party.
(h) Entire Agreement. This Lease is the entire agreement between the
parties, and there are no agreements or representations between the parties
except as expressed herein. Except as otherwise provided herein, no subsequent
change or addition to this Lease shall be binding unless in writing and signed
by the parties hereto.
(i) Waiver of Jury. To the extent permitted by law, Tenant hereby waives
any right it may have to a jury trial in the event of litigation between Tenant
and Landlord pertaining to this Lease.
(j) Counterparts. This Lease may be executed in counterparts, each of
which shall be an original, but all counterparts shall constitute one (1)
instrument.
(k) Exhibits. The Basic Lease Information and all exhibits attached
hereto are hereby incorporated herein and made an integral part hereof.
(l) Addendum. The Addendum, if any, attached hereto is hereby
incorporated herein and made an integral part hereof.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties have executed this Lease effective as of the
date first above written.
"LANDLORD"
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
a New Jersey corporation
By: /s/ Gary L. Frazier
-----------------------
Its: Vice President
"TENANT"
ADAPTEC, INC.
a California corporation
By: /s/ Robert W. Kraiss
-----------------------
Its: Director of Corporate
Facilities and Real Estate
12-20-96
20
Schematic of Town Center Business Park
Exhibit A
EXHIBIT B-1
COMMENCEMENT DATE MEMORANDUM
LANDLORD: THE PRUDENTIAL INSURANCE OF AMERICA, a
New Jersey corporation
TENANT: ADAPTEC, INC. a California corporation
LEASE DATE: December 20, 1996
PREMISES: 831 South Milpitas Boulevard, Milpitas,
California 95035
Pursuant to Section 2 of the above-referenced Lease, the Commencement Date
hereby is established as _____________.
TENANT: LANDLORD:
ADAPTEC, INC. THE PRUDENTIAL INSURANCE OF AMERICA
a California corporation a New Jersey corporation
By By
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Name Name
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Title Title
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EXHIBIT B-2
BASE RENT COMMENCEMENT DATE MEMORANDUM
LANDLORD: THE PRUDENTIAL INSURANCE OF AMERICA, a
New Jersey corporation
TENANT: ADAPTEC, INC. a California corporation
LEASE DATE: December 20, 1996
PREMISES: 831 South Milpitas Boulevard, Milpitas,
California 95035
Pursuant to Section 4 of the above-referenced Lease, the Base Rent Commencement
Date hereby is established as Sept. 17, 1997, and the Expiration Date is hereby
established as Sept. 16, 2007.
TENANT: LANDLORD:
ADAPTEC, INC. THE PRUDENTIAL INSURANCE OF AMERICA
a California corporation a New Jersey corporation
By /s/ Robert W. Kraiss By /s/ Gary L. Frazier
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Name Robert W. Kraiss Name Gary L. Frazier
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Title Director of Corporate Title Vice President
Facilities and Real Estate -------------------
----------------------
EXHIBIT C
RULES AND REGULATIONS
1. No sign, placard, picture, advertisement, name or notice shall be installed
or displayed on any part of the outside or inside of the Building without the
prior written consent of Landlord. Landlord shall have the right to remove, at
Tenant's expense and without notice, any sign installed or displayed in
violation of this rule.
2. Except as consented to in writing by Landlord or in accordance with Building
standard improvements, no draperies, curtains, blinds, shades, screens or other
devices shall be hung at or used in connection with any window or exterior door
or doors of the Premises. No awning shall be permitted on any part of the
Premises. Tenant shall not place anything against or near glass partitions or
doors or windows which may appear unsightly from outside the Premises.
3. Tenant shall not obstruct any sidewalks, halls, lobbies, passages, exits,
entrances, elevators or stairways of the Building. No tenant and no employee or
invitee of any tenant shall go upon the roof of the Building or make any roof
or terrace penetrations.
4. If Tenant requires a burglar alarm, it shall first obtain, and comply with,
Landlord's instructions for its installation.
5. Tenant shall not place a load upon any floor of the Premises which exceeds
the maximum load per square foot which the floor was designed to carry and
which is allowed by law. Tenant's business machines and mechanical equipment
which cause noise or vibration which may be transmitted to the structure of
the Building or to any space therein, and which is objectionable to Landlord or
to any tenants in the Building, shall be placed and maintained by Tenant, at
Tenant's expense, on vibration eliminators or other devices sufficient to
eliminate noise or vibration.
6. Tenant shall not use or keep in the Premises any toxic or hazardous materials
or any kerosene, gasoline or inflammable or combustible fluid or material other
than those limited quantities necessary for the operation or maintenance of
office equipment and as otherwise as may be permitted under the Lease. Tenant
shall not use or permit to be used in the Premises any foul or noxious gas or
substance, or permit or allow the Premises to be occupied or used in a manner
offensive or objectionable to Landlord or other occupants of the Building by
reason of noise, odors or vibrations. No animal, except seeing eye dogs when in
the company of their masters, may be brought into or kept in the Building.
7. Tenant shall cooperate fully with Landlord to assure the most effective
operation of the Building's heating and air-conditioning and to comply with any
governmental energy-saving rules, laws or regulations.
8. Landlord reserves the right, exercisable without notice and without liability
to Tenant, to change the name and street address of the Building.
9. Tenant shall close and lock the doors of its Premises, shut off all water
faucets or other water apparatus and turn off all lights and other equipment
which is not required to be continuously run. Tenant shall be responsible for
any damage or injuries sustained by other tenants or occupants of the Building
or Landlord for noncompliance with this Rule.
10. The toilet rooms, toilets, urinals, wash bowls and other apparatus shall not
be used for any purpose other than that for which they were constructed, and no
foreign substance of any kind whatsoever shall be placed therein. The expense of
any breakage, stoppage or damage resulting from any violation of this rule shall
be borne by the tenant who, or whose employees or invitees, shall have caused
it.
11. Tenant shall not install any radio or television antenna, loudspeaker or
other device on the roof or exterior walls of the Building. Tenant shall not
interfere with radio or television broadcasting or reception from or in the
Building or elsewhere.
12. Tenant shall not affix any floor covering to the floor of the Premises in
any manner except as approved by Landlord. Tenant shall repair, or be
responsible for the cost of repair of any damage resulting from noncompliance
with this Rule.
13. Canvassing, soliciting and distributing handbills or any other written
material and peddling in the Building are prohibited, and each tenant shall
cooperate to prevent these activities.
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14. Tenant shall store all its trash and garbage in a separate designated area.
Tenant shall not place in any trash box or receptacle any material which cannot
be disposed of in the ordinary and customary manner of trash and garbage
disposal. All garbage and refuse disposal shall be made in accordance with
directions issued from time to time by Landlord.
15. Use by Tenant of Underwriters' Laboratory approved equipment for brewing
coffee, tea, hot chocolate and similar beverages and microwaving food shall be
permitted, provided that the equipment and use in accordance with all applicable
federal, state, county and city laws, codes, ordinances, rules and regulations.
16. Tenant shall not use the name of the Building in connection with or in
promoting or advertising the business of Tenant, except as Tenant's address,
without the written consent of Landlord.
17. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.
Tenant shall be responsible for any increased insurance premiums attributable
to Tenant's unique and particular use of the Premises, Building or Property.
18. Tenant assumes any and all responsibility for protecting its Premises from
theft and robbery, which responsibility includes keeping doors locked and other
means of entry to the Premises closed.
19. Tenant shall not use the Premises, or suffer or permit anything to be done
on, in or about the Premises, which may result in an increase to Landlord in
the cost of insurance maintained by Landlord on the Building and Common Areas.
20. Tenant shall not park its vehicles in any parking areas designated by
Landlord as areas for parking by visitors to the Building or other reserved
parking spaces. Tenant shall not leave vehicles in the Building parking areas
overnight, nor park any vehicles in the Building parking areas other than
automobiles, motorcycles, motor driven or non-motor driven bicycles or
four-wheeled trucks. Tenant, its agents, employees and invitees, shall not park
any one (1) vehicle in more than one (1) parking space.
21. Landlord may waive any one or more of these Rules and Regulations for the
benefit of Tenant or any other tenant, but no waiver by Landlord shall be
construed as a waiver of the Rules and Regulations in favor of Tenant or any
other tenant, nor prevent Landlord from thereafter enforcing the Rules and
Regulations against any or all of the tenants of the Building.
22. These Rules and Regulations are in addition to, and shall not be construed
to in any way modify or amend, in whole or in part, the terms, covenants,
agreements and conditions of any lease of premises in the Building.
23. Landlord reserves the right to make other reasonable Rules and Regulations
as, in its judgment, may from time to time be needed for safety and security,
for care and cleanliness of the Building and for the preservation of good order
therein. Tenant agrees to abide by all Rules and Regulations hereinabove stated
and any additional rules and regulations which are adopted.
24. Tenant shall be responsible for the observance of all of the foregoing
rules by Tenant's employees, agents, clients, customers, invitees, and guests.
2
Schematic of Tenant Parking
COMMENCEMENT DATE MEMORANDUM; ESTOPPEL
LANDLORD: THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey
corporation
TENANT: ADAPTEC, INC., a California corporation
LEASE DATE: DECEMBER 20, 1996
PREMISES: 631 South Milpitas Blvd., Milpitas, CA 95035
Pursuant to Section 2 of the above referenced Lease, the Commencement Date
hereby is established as May 6, 1997.
Pursuant to Section 9(e) of the Lease, Landlord acknowledges and agrees
that Tenant's Initial Alterations shall not be required to be removed by Tenant
at the expiration or earlier termination of this Lease.
Landlord and Tenant agree that the condition of the Premises includes the
deficiencies listed below. Landlord agrees that Tenant shall be entitled to
surrender the Premises in the same condition, subject to the corrective action
described in subparagraph 2, below.
1. The light bulbs within the Premises are not of one type, i.e.,
they are a mixture of warm and cool bulbs.
2. Several floor tiles are missing in the room immediately adjacent
to the break room (the "Adjacent Room"). Tenant will carpet over the
Adjacent Room in connection with Tenant's Initial Alterations; however, the
floor tiles used to level the floor will not be color matched to the floor
tile currently in the Adjacent Room.
3. The floor covering in the Premises is not new.
4. The walls of the Premises have been patched; however, they have
not been freshly painted.
TENANT: LANDLORD:
ADAPTEC, INC., THE PRUDENTIAL INSURANCE COMPANY OF
a California corporation AMERICA, a New Jersey corporation
By: /s/ Robert W. Kraiss By: /s/ Gary L. Frazier
-------------------------------- --------------------------------
Robert W. Kraiss
Its: Director of Facilities Its: Vice President
& Real Estate -------------------------------
Date: 6-3-97 Date: 6-13-97
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FIRST AMENDMENT TO LEASE
THIS FIRST AMENDMENT TO LEASE (the "Amendment"), dated for reference
purposes only as of this 11 day of June, 1998, is made by and between THE
PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey corporation ("Landlord"),
and ADAPTEC, INC., a California corporation ("Tenant").
RECITALS
A. Landlord and Tenant are the parties to that certain lease, dated
December 20, 1996 (the "Adaptec Lease"), whereby Landlord has leased to Tenant
a portion of that certain real property, commonly known as 631 South Milpitas
Boulevard, Milpitas, California ("the Property").
B. Landlord agreed that Tenant would have the exclusive right to use
those parking spaces on the Property designated on Exhibit D to the Adaptec
Lease.
C. Landlord and Tenant now desire to amend the Adaptec Lease to
redesignate the number and location of exclusive parking spaces on the Property
which Adaptec is entitled to use.
NOW, THEREFORE, in consideration of the foregoing Recitals and the parties'
mutual agreement to be bound hereby, it is agreed as follows:
1. Defined Terms. Capitalized terms used herein shall have the same
meanings provided in the Adaptec Lease unless otherwise stated.
2. Substitution of Parking Diagram. Exhibit D to the Adaptec Lease, the
parking diagram, is hereby held for naught and shall be of no further force or
effect, and the parking diagram attached hereto as Exhibit D is hereby
substituted in lieu therefor. Henceforth, all references in the Adaptec Lease
to "Exhibit D" shall be deemed to mean the parking diagram attached hereto as
Exhibit D.
3. Amendment to Section 29 - Parking. Section 29 of the Adaptec Lease is
hereby deleted and shall be of no further force or effect and the following is
hereby substituted in lieu thereof (in the following quoted material, the terms
"Property" and "Exhibit D" shall have the same meanings they have in this
Amendment):
"29. Parking. Tenant shall have the exclusive right to park fifty-eight
(58) passenger vehicles on the Property in the parking stalls designated as
"--Adaptec
1
Leased Spaces" on attached Exhibit D for exclusive use by Tenant's
employees, contractors, agents, licensees, and invitees ("Tenant's
Parkers") during the Term and any extension thereof. Tenant agrees not
to use in excess of the foregoing parking allocation on the Property,
and Tenant agrees that it has no right under this Lease to park on the
adjacent property shown on Exhibit D. Handicapped spaces shall be
available on a "first-come, first-served" basis. Tenant acknowledges
that Kaiser Foundation Health Plan, Inc. ("Kaiser") has the exclusive
right to use one hundred thirty-eight (138) other spaces within the
Property designated as "X-Kaiser Leased Spaces" on Exhibit D. Landlord
shall have no obligation to police such parking or otherwise assure
that only Tenant's Parkers are using the parking allocated to Tenant
under this Section 29. Landlord shall not be liable to Tenant, nor
shall this Lease be affected, if any parking is impaired by
moratorium, initiative, referendum, law, ordinance, regulation, or
order passed, issued or made by any governmental or quasi-governmental
body. The foregoing parking rights shall be furnished at no cost to
Tenant, except for such costs as are properly included in Operating
Expenses (i.e. parking lot maintenance and repairs, Real Estate Taxes,
etc.)."
4. Rules and Regulations. The first sentence of paragraph 20 of the
Rules and Regulations attached as Exhibit C to the Adaptec Lease is hereby
deleted in its entirety.
5. Binding Effect. This Amendment shall be binding upon and shall
inure to the benefit of the respective transferees, successors, and assigns of
Landlord and Tenant.
6. Authority. Each of the individuals who has executed this Amendment on
behalf of a party represents and warrants to the other party that he or she is
duly authorized to execute this Amendment on behalf of Landlord or Tenant, as
the case may be; that all corporate, partnership, or other action necessary for
such party to execute and perform the terms of this Amendment has been duly
taken by such party; and that no other signature and/or authorization is
necessary for such party to enter into and perform the terms of this Amendment.
7. Integration. This Amendment is an integral part of the Adaptec Lease;
however, in the case of an inconsistency or conflict between the terms of the
Adaptec Lease and the terms of this Amendment, the terms of this Amendment
shall control and supersede any such inconsistency or conflict.
2
8. Ratification. Landlord and Tenant hereby ratify and affirm that the
Adaptec Lease is in full force and effect and unmodified, except as otherwise
provided in this Amendment.
IN WITNESS WHEREOF, Landlord and Tenant have entered into this Amendment
as of the day and year first written above.
LANDLORD: TENANT:
THE PRUDENTIAL INSURANCE ADAPTEC, INC., a California
COMPANY OF AMERICA, a New corporation
Jersey corporation
By: /s/ Robert W. Kraiss
--------------------
By: /s/ Gary L. Frazier Its:
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Its Vice President
Robert W. Kraiss
Director of Corporate Facilities
and Real Estate
3
EXHIBITS
Exhibit D New parking diagram
4
RECORDING REQUESTED BY:
The Prudential Insurance
Company of America
WHEN RECORDED RETURN TO:
Cassidy, Cheatham, Shimko & Dawson
20 California Street, 5th Floor
San Francisco, CA 94111
Attention: Marilyn K. Johnston
- --------------------------------------------------------------------------------
AMENDMENT NO. 1 TO DECLARATION OF EASEMENT
THIS AMENDMENT NO. 1 TO DECLARATION OF EASEMENT (the "Amendment"), dated
for reference purposes only as of this 11 day of June, 1998, is made by and
between THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey corporation
("Prudential"), and ADAPTEC, INC., a California corporation ("Adaptec").
RECITALS
A. Prudential is the fee owner of that certain real property located in
the City of Milpitas, County of Santa Clara, State of California, commonly
known as 611-631 South Milpitas Boulevard, and more particularly described on
Exhibit A, attached hereto and incorporated herein ("Parcel 1").
B. Adaptec is the fee owner of that certain real property located in the
City of Milpitas, County of Santa Clara, State of California, commonly known as
628 Gibraltar Court, and more particularly described on Exhibit B, attached
hereto and incorporated herein ("Parcel 2").
C. Prudential and Kaiser Foundation Health Plan, Inc. ("Kaiswer") are the
parties to that certain lease, dated July 16, 1990, as amended, pursuant to
which Prudential leases to Kaiswer a portion of Parcel 1 (the "Kaiswer Lease").
D. Prudential, as Declarant and the then owner of both Parcel 1 and
Parcel 2, entered into that certain Declaration of Easement, dated May 15, 1992
and recorded the same against both Parcels on May 14, 1992 as Instrument No.
11361897 of the Santa Clara County Official Records (the "Declaration of
Easement"). The Declaration of Easement, among other things, granted the owner
of Parcel 1 the exclusive right to use 37 parking spaces on Parcel 2 ("Easement
G"), and granted the owner of Parcel 2 the exclusive right to use 14 parking
spaces on Parcel 1 ("Easement
1
H") (collectively, the "Parking Easements"). The Parking Easements are shown on
Exhibit C to the Declaration of Easement (the "Parking Easement Map"). The
Parking Easements were to continue until twenty-four (24) months after Kaiser
or another medical user had the legal right to occupy the building on Parcel 1.
E. Prudential has discovered that the granting language of Sections 1(b)
and 1(c) of the Declaration of Easement conflicts with, and is the reverse of,
the designation of the Parking Easements on the Parking Easement Map. That is,
the designation "Easement G" on the Parking Easement Map should be "Easement
H", and the designation "Easement H" on the Parking Easement Map should be
"Easement G" in order to conform to those references in Sections 1(b) and 1(c)
of the Declaration of Easement.
F. Prudential and Adaptec now desire to amend the Declaration of Easement
to replace Easement G and Easement H and grant new parking easements in their
stead, provide for the encroachment of parking stalls and related curbing on
certain easements created by the Declaration of Easement, and create new
easements for the benefit of Parcel 2.
NOW, THEREFORE, in consideration of the foregoing Recitals and the
parties' mutual agreement to be bound hereby, it is agreed as follows:
1. Defined Terms. Capitalized terms used herein shall have the same
meanings provided in the Declaration of Easement unless otherwise stated.
2. Substitution of Parking Easement Map. Exhibit C to the Declaration of
Easement, the Parking Easement Map, is hereby held for naught and shall be of
no further force or effect, and the parking easement map attached hereto as
Exhibit C is hereby substituted in lieu therefor. Henceforth, all references in
the Declaration of Easement to "Exhibit C" or to the "Parking Easement Map"
shall be deemed to mean and refer to the parking easement map attached hereto
as Exhibit C.
3. Grant of Encroachment Easement Over Easement "A". Notwithstanding the
provisions of Section 2(b) of the Declaration of Easement to the contrary,
Prudential hereby grants to Adaptec, its successors and assigns with respect to
Parcel 2, for the benefit of Parcel 2, a perpetual, non-exclusive easement over
a portion of Easement "A" for the encroachment of approximately 945 square feet
of parking area (the "Encroachment Easement Over Easement "A"). The portion of
Easement "A" burdened by the Encroachment Easement Over Easement "A" is shown on
Exhibit D and legally described in Exhibit E, attached hereto and hereby
incorporated herein. Prudential hereby accepts such encroachment
2
as it affects Easement "A"; provided, however, that the acceptance by Prudential
of such encroachment shall not constitute a waiver of the rights of Prudential
with respect to Easement "A", and Prudential, its successors and assigns with
respect to Parcel 1, shall continue to be entitled to the benefits of Easement
"A" as it benefits Parcel 1. The Encroachment Easement Over Easement "A" shall
run with the land and bind the owner and all future owners of Easement "A" and
benefit the owner and all future owners of Parcel 2.
4. Grant of Encroachment Easements Over Easement "B". Notwithstanding the
provisions of Section 2(b) of the Declaration of Easement to the contrary,
Adaptec hereby grants to Prudential, its successors and assigns, for the benefit
of Parcel 1, a perpetual, non-exclusive easement over a portion of Easement "B"
for the encroachment of approximately 662 square feet of parking area (the
"Encroachment Easement No. 1 Over Easement "B"), and a perpetual, non-exclusive
easement over a portion of Easement "B" for the encroachment of curbing at the
southeast corner of Parcel 1 (the "Encroachment Easement No. 2 Over Easement
"B"). The portion of Easement "B" burdened by the Encroachment Easement No. 1
Over Easement "B" is shown on Exhibit D and legally described in Exhibit F,
attached hereto and hereby incorporated herein. The portion of Easement "B"
burdened by the Encroachment Easement No. 2 Over Easement "B" is shown on
Exhibit D. Adaptec hereby accepts such encroachments as they affect Easement
"B"; provided, however, that neither the acceptance by Adaptec of such
encroachments shall constitute a waiver of the rights of Adaptec with respect to
Easement "B", and Adaptec, its successors and assigns with respect to Parcel 2
shall continue to be entitled to the benefits of Easement "B" as it benefits
Parcel 2. The Encroachment Easements Nos. 1 and 2 Over Easement "B" shall run
with the land and bind the owner and all future owners of Easement "B" and
benefit the owner and all future owners of Parcel 1.
5. Grant of Parking Encroachment Easements.
(a) Adaptec hereby grants to Prudential, its successors and assigns
with respect to Parcel 2, for the benefit of Parcel 1, and subjects Parcel 2
to, a perpetual, exclusive easement over Parcel 2 for the encroachment of
approximately 648 square feet of parking area along the common boundary of
Parcel 1 and Parcel 2 (the "Parcel 2 Parking Encroachment Easement"). The
portion of Parcel 2 burdened by the Parcel 2 Parking Encroachment Easement is
shown on Exhibit G and legally described in Exhibit H, attached hereto and
hereby incorporated herein (the "Parcel 2 Parking Encroachment Easement Area").
Adaptec reserves to itself, and its successors and assigns with respect to
Parcel 2, for the benefit of Parcel 2, the right to use the Parcel 2 Parking
Encroachment Easement Area for any purpose that does not
3
interfere with Prudential's (and its successors') right to maintain and
exclusively use parking stalls within the Parcel 2 Parking Encroachment
Easement Area.
(b) Adaptec hereby grants to Prudential, its successors and assigns
with respect to Parcel 2, for the benefit of Parcel 1, and subjects Parcel 2
to, a perpetual, exclusive easement over Parcel 2 for the encroachment of
approximately 99 square feet of parking area along the southernmost portion of
the common boundary of Parcel 1 and Parcel 2 (the "Additional Parcel 2 Parking
Encroachment Easement"). The portion of Parcel 2 burdened by the Additional
Parcel 2 Parking Encroachment Easement is shown on Exhibit G and legally
described in Exhibit I, attached hereto and hereby incorporated herein (the
"Additional Parcel 2 Parking Encroachment Easement Area"). Adaptec reserves to
itself, and its successors and assigns with respect to Parcel 2, for the
benefit of Parcel 2, the right to use the Additional Parcel 2 Parking
Encroachment Easement Area for any purpose that does not interfere with
Prudential's right to maintain and exclusively use a parking stall within the
Additional Parcel 2 Parking Encroachment Easement Area.
(c) The Parcel 2 Parking Encroachment Easement shall run with the
land and bind the owner and all future owners of Parcel 2 and benefit the owner
and all future owners of Parcel 1. The Parcel 2 Parking Encroachment Easement
shall be considered an Easement, and the Parcel 2 Parking Encroachment Easement
Area shall be considered an Easement Area, for all purposes of the Declaration
of Easement, as amended hereby.
(d) The Additional Parcel 2 Parking Encroachment Easement shall run
with the land and bind the owner and all future owners of Parcel 2 and benefit
the owner and all future owners of Parcel 1. The Additional Parcel 2 Parking
Encroachment Easement shall be considered an Easement, and the Additional Parcel
2 Parking Encroachment Easement Area shall be considered an Easement Area, for
all purposes of the Declaration of Easement, as amended hereby.
6. Amendment of Recitals C and D.
(a) Recital C. The reference of "Easement 'E'" in Recital C of the
Declaration of Easement is hereby deleted and replaced with "Easement 'F'".
(b) Recital D. The last sentence of Recital D of the Declaration of
Easement is hereby deleted and restated in its entirety as follows:
The areas designated as Easement "A" through Easement "F" on the Map
and Easement "G" and Easement "H" on the
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Parking Easement Map are hereinafter individually referred to as an
"Easement Area" and collectively referred to as the "Easement Areas".
There is no Easement "D" shown on the Map.
7. Amendment of Section 1(b). Section 1(b) of the Declaration of
Easement is hereby deleted and restated in its entirety as follows (as used in
the following indented material "Adaptec" means Adaptec, Inc., a California
corporation):
b. Easements Benefitting Parcel 1. Adaptec hereby creates and grants
for the benefit of Parcel 1 and each future owner of Parcel 1, and
subjects Parcel 2 and each future owner of Parcel 2 to , the
Easements over the portions of Parcel 2 indicated on the Map as
Easement "A" (ingress and egress), Easement "E" (storm drainage),
Easement "F" (storm drainage), and the Easement over the portion of
Parcel 2 indicated on the Parking Easement Map as Easement "G"
(parking). Such Easements are and shall remain non-exclusive
Easements appurtenant to Parcel 1, except for Easement "F" which is
for the joint benefit of Parcel 1 and Parcel 2, and Easement "G",
which shall be an exclusive parking easement appurtenant to Parcel 1.
easement "A" shall be used solely for the purpose of vehicular and
pedestrian ingress and egress. Easements "E" and "F" shall be used
solely for the purpose of transportation of water drainage through
storm drain lines. To the extent permitted by law, Easement "G" shall
be used solely for the purpose of parking standard passenger
automobiles, carts, motorcycles, bicycles, delivery trucks and light
pick-up trucks and no other motor vehicles.
8. Amendment of Section 1(c). Section 1(c) of the Declaration of
Easement is hereby deleted and restated in its entirety as follows (as
used in the following indented material "Declarant" means The
Prudential Insurance Company of America, a New Jersey corporation, and
"Exhibit D" means Exhibit D attached hereto):
c. Easements Benefitting Parcel 2. Declarant hereby creates and
grants for the benefit of Parcel 2 and each future owner of Parcel 2
to, and subjects Parcel 1, and each future owner of Parcel 1 to, the
Easements over the portions of Parcel 1 indicated on the Map as
Easement "B" (ingress and egress), Easement "C" (surface drainage and
storm drain lines), Easement "F" (storm drainage) and the Easement
over the portion of Parcel 1 indicated on the Parking Easement Map as
Easement "H" (parking). Declarant hereby creates and grants for the
5
benefit of Parcel 2 and each future owner of Parcel 2 to, and subjects
Parcel 1, and each future owner of Parcel 1 to, a perpetual,
non-exclusive easement over the southeast corner of Parcel 1 for
ingress and egress ("Easement B-1"). The portion of Parcel 1 burdened
by Easement B-1 is shown on Exhibit D. Easement B-1 shall run with the
land and bind the owner and all future owners of Parcel 1 and benefit
the owner and all future owners of Parcel 2. Such Easements are and
shall remain non-exclusive easements appurtenant to Parcel 2, except
for Easement "F" which is for the joint benefit of Parcel 1 and Parcel
2, and Easement "H", which shall be an exclusive parking easement
appurtenant to Parcel 2. Easement "B" and Easement B-1 shall be used
solely for the purpose of vehicular and pedestrian ingress and egress.
Easement "C" shall be used solely for the purpose of surface drainage
and the transportation of water drainage through storm drain lines.
Easement "F" shall be used solely for the purpose of transportation of
water drainage through storm drain lines. To the extent permitted by
law, Easement "H" shall be used solely for the purpose of parking
standard passenger automobiles, carts, motorcycles, bicycles, delivery
trucks and light pick-up trucks and no other motor vehicles.
9. Amendment of Section 1(d). Section 1(d) of the Declaration of
Easement is hereby deleted and restated in its entirety as follows (as used in
the following indented material "Declarant means the Prudential Insurance
Company of America, a New Jersey corporation, and "Adaptec" means Adaptec,
Inc., a California corporation):
(d) Parking Easements. Notwithstanding the terms of this Declaration
of Easement to the contrary, Declarant, with respect to Parcel 1, and
Adaptec, with respect to Parcel 2, hereby declare that Parcel 1 shall
only be burdened by Easement "H" and Parcel 2 shall only be burdened
by Easement "G", and that Easement "G" and Easement "H" shall only
continue to benefit, respectively, Parcel 1 and Parcel 2, until the
date which is twenty-four (24) months after the expiration or prior
termination of the lease between Kaiser Foundation Health Plan, Inc.,
as tenant, and Declarant, as landlord, dated July 16, 1990, as such
lease may be amended, extended, and/or renewed (the "Kaiser Lease").
Notwithstanding the foregoing, if before the expiration of such
twenty-four (24) month period, any other entity which provides medical
services by doctors, nurses, pharmacists, opticians, or other medical
personnel to individuals (a "Medical User") obtains the right to
6
occupy at least 36,000 square feet of the building located on Parcel 1
for a Medical Use pursuant to a leasehold or fee interest, then
Easement "G" and Easement "H" shall continue in full force and effect
until the date which is twenty-four (24) months after such Medical
User ceases to have the right to occupy at least 36,000 square feet of
the building located on Parcel 1 pursuant to a leasehold or fee
interest. For purposes of this Declaration of Easement, "Medical Use"
shall mean the provision of medical services by doctors, nurses,
pharmacists, opticians, or other medical personnel to individuals. On
the commencement of the applicable twenty-four (24) month period
described above, the then owner of Parcel 1 shall, within thirty (30)
days following the commencement of such twenty-four (24) month period,
give the then owner of Parcel 2 written notice of such commencement.
On the expiration of the applicable twenty-four (24) month period
described above, Easement "G" and Easement "H" shall automatically
terminate, and the then owner of Parcel 1 shall, within thirty (30)
days following the expiration of such twenty-four (24) month period,
give the then owner of Parcel 2 written notice of such termination,
and the then owners of Parcel 1 and Parcel 2 shall execute,
acknowledge, and record in the Official Records of Santa Clara County
an amendment to this Declaration of Easement which confirms the
termination of Easement "G" and Easement "H"; provided, however, that
the failure by the owner of Parcel 1 to give such notices and/or to
execute, acknowledge, or record such amendment shall not affect the
termination of such Easements.
10. Amendment of Section 3(c). Section 3(c) of the Declaration of Easement
is hereby deleted and restated in its entirety as follows (as used in the
following indented material, "Declarant" means The Prudential Insurance Company
of America, a New Jersey corporation):
c. Repaving Work. Declarant shall, throughout the period of
Declarant's ownership of Parcel 1, repair, resurface, and replace as
necessary all pavement areas located on both Parcel 1 and Parcel 2
("Pavement Areas") in the same manner and at the same intervals to
insure that all Pavement Areas are of consistent grade and quality and
are otherwise of the same quality as other first class business parks
in the general geographical area as Parcel 1 and Parcel 2. The work of
repairing, resurfacing, and/or replacing (as necessary) of the
Pavement Areas is hereinafter referred to as the "Repaving Work".
Declarant shall
7
notify the then owner of Parcel 2 at least ten (10) days prior to the
commencement of any Repaving Work and shall only conduct Repaving Work
on the weekends, in a time and manner reasonably acceptable to the
owner of Parcel 2. Upon completion of Repaving Work, Declarant shall
deliver to the owner of Parcel 2 written invoices which set forth in
reasonable detail the actual and reasonable costs of Repaving Work.
Within ten (10) days after receipt of such billing statements, the
owner of Parcel 2 shall reimburse Declarant for 42.92% of such costs,
which percentage corresponds to the total square footage of the
Pavement Area located on Parcel 2 relative to the sum of the total
square footage of the Pavement Area located on Parcel 1 and Parcel 2.
If the owner of Parcel 2 fails to reimburse Declarant within such ten
(10) day period, the owner of Parcel 2 shall also pay interest on such
amount at the prime rate, as established from time to time by Wells
Fargo Bank, N.A., (or its successor) plus two (2) percent, from the
date due until paid. Upon conveyance of title of Parcel 1 from
Declarant to a third party, Declarant's duty to maintain the Pavement
Areas as described in this Section 3.c shall pass to the then owner of
Parcel 2, and upon the assumption of the Repaving Work obligations by
the then owner of Parcel 2, the then owner of Parcel 1 shall be
required to reimburse the then owner of Parcel 2 for 57.08% of the
costs of the Repaving Work under the terms and conditions provided
above.
11. Additional Ingress and Egress Easements.
(a) Prudential hereby grants to Adaptec, its successors and assigns
with respect to Parcel 2, for the benefit of Parcel 2, and subjects Parcel 1
to, a non-exclusive easement over Parcel 1 for ingress and egress of
pedestrians and vehicles (the "Driveway Easement"). The portion of Parcel 1
burdened by the Driveway Easement is shown on Exhibit J and legally described
in Exhibit K, attached hereto and hereby incorporated herein.
(b) Prudential hereby grants to Adaptec, its successors and assigns
with respect to Parcel 2, for the benefit of Parcel 2, and subjects Parcel 1
to, non-exclusive easements over Parcel 1 for ingress and egress of pedestrians
(individually, "Pedestrian Easement No. 1" and "Pedestrian Easement No. 2", and
collectively, the "Pedestrian Easements"). The portion of Parcel 1 burdened by
Pedestrian Easement No. 1 is shown on Exhibit J and legally described in
Exhibit L, attached hereto and hereby incorporated herein. The portion of
Parcel 1 burdened by Pedestrian Easement No. 2 is shown on Exhibit J and
legally described in Exhibit M, attached hereto and hereby
8
incorporated herein.
(c) The purpose of the Driveway Easement and the Pedestrian Easements
is to provide access between Parcel 2 and the real property immediately north
of and sharing a common boundary with the Driveway Easement and the Pedestrian
Easements, which property to the north is legally described as Parcel "A" shown
on Parcel Map filed for record in Book 542 of Maps, pages 50-51, Santa Clara
County Official Records ("Parcel A"). The Driveway Easement and Pedestrian
Easements shall continue in effect and shall benefit Parcel 2 and burden Parcel
1 only so long as the owner of the fee or leasehold interest in Parcel 2 is
also the owner of the fee or leasehold interest in Parcel A, or any portion
thereof.
(d) The Driveway Easement and the Pedestrian Easements shall run with
the land and bind the owner and all future owners of Parcel 1 and benefit the
owner and all future owners of Parcel 2. The Driveway Easement and the
Pedestrian Easements shall each be considered an Easement, and the land
burdened by the Driveway Easement and the Pedestrian Easements shall be
considered Easement Area, for all purposes of the Declaration of Easement, as
amended hereby.
12. Binding Effect. This Amendment shall be binding upon and shall inure
to the benefit of the parties hereto and their respective transferees,
successors, and assigns and shall create covenants running with the land and
binding upon all future owners of any interest therein.
13. Authority. Each of the individuals who has executed this Amendment on
behalf of a party represents and warrants to the other party that he or she is
duly authorized to execute this Amendment on behalf of Prudential or Adaptec,
as the case may be; that all corporate, partnership, or other action necessary
for such party to execute and perform the terms of this Amendment has been duly
taken by such party; and that no other signature and/or authorization is
necessary for such party to enter into and perform the terms of this Amendment.
14. Integration. This Amendment is an integral part of the Declaration of
Easement; however, in the case of an inconsistency or conflict between the
terms of the Declaration of Easement and the terms of this Amendment, the terms
of this Amendment shall control and supersede any such inconsistency or
conflict.
15. Ratification. Prudential and Adaptec hereby ratify and affirm that the
Declaration of Easement is in full force and effect and unmodified, except as
otherwise provided in this Amendment.
9
IN WITNESS WHEREOF, Prudential and Adaptec have entered into this Amendment
as of the day and year first written above.
PRUDENTIAL: ADAPTEC:
THE PRUDENTIAL INSURANCE COMPANY OF ADAPTEC, INC., a California
AMERICA, a New Jersey corporation corporation
By: /s/ Gary L. Frazier By: /s/ Robert W. Kraiss
-------------------------------- --------------------------------
Its Vice President Its:
-------------------------------
Robert W. Kraiss
Director of Corporate Facilities
and Real Estate
10
EXHIBITS
<Table>
Exhibit A Legal description of Parcel 1
Exhibit B Legal description of Parcel 2
Exhibit C New Parking Easement Map
Exhibit D Plat showing Encroachment Easement Over Easement "A",
Encroachment Easements Nos. 1 and 2 Over Easement "B", and
Easement B-1
Exhibit E Legal description of portion of Parcel 2 burdened by Encroachment
Easement Over Easement "A"
Exhibit F Legal description of portion of Parcel 1 burdened by Encroachment
Easement No. 1 Over Easement "B"
Exhibit G Plat showing Parcel 2 Parking Encroachment Easement Area and
Additional Parcel 2 Parking Encroachment Easement Area
Exhibit H Legal description of Parcel 2 Parking Encroachment Easement Area
Exhibit I Legal description of Additional Parcel 2 Parking Encroachment
Easement Area
Exhibit J Plat showing Driveway Easement, Pedestrian Easement Nos. 1 and 2
Exhibit K Legal description of portion of Parcel 1 burdened by Driveway
Easement
Exhibit L Legal description of portion of Parcel 1 burdened by Pedestrian
Easement No. 1
Exhibit M Legal description of portion of Parcel 1 burdened by Pedestrian
Easement No. 2
</Table>
11
Page No. 10
EXHIBIT "A"
REAL PROPERTY in the City of Milpitas, County of Santa Clara, State of
California, described as follows:
PARCEL ONE:
Parcel 1, so designated and delineated on the Parcel Map recorded MAY 14, 1992
IN BOOK 636 OF MAPS, PAGES 44 AND 45, Santa Clara County Roads.
EXCEPTING THEREFROM that interest therein reserved to Standard Realty and
Development Company, a California corporation, its successors and assigns
forever, by Deed recorded September 30, 1981 in Book G366, page 82, Official
Records, described as all minerals, oil, gas and other hydrocarbon substances
below a depth of 600 feet measured vertically from the contour of the surface
of said real property; provided, however, Standard Realty and Development
Company, a California corporation, its successors and assigns, shall not have
the right for any purpose whatsoever to enter upon, into or through the surface
of said real property or any part thereof between said surface and 500 feet
below the surface.
PARCEL TWO:
Easements for (1) ingress and egress, shown as Easement "A" on said Parcel Map;
for (2) storm drainage, shown as Easement "E" on said Parcel Map; and for (3)
storm drainage, shown as Easement "F" on said Parcel Map - as reserved for the
benefit of Parcel 1 in the deed from The Prudential Insurance Company of
America to Adaptec, Inc., recorded May 14, 1992 in Book M191, page 1706,
Official Records.
APN: 086-42-029
ARB: 086-30-X3
EXHIBIT B
LEGAL DESCRIPTION: "SCHEDULE C" SP55185
All that real property situate in the City of Milpitas, County of Santa Clara,
State of California, described as follows:
TRACT I:
PARCEL ONE:
All of Parcel 2, as shown on that certain Parcel Map recorded May 14, 1992 in
Book 636 of Maps at pages 44 and 45, Santa Clara County Records.
EXCEPTING AND RESERVING THEREFROM to Grantor, by Deed recorded September 30,
1981 in Book G 366, Page 82, it's successors and assigns forever, all minerals,
oil, gas and other hydrocarbon substances below a depth of 500 feet measured
vertically from the contour of the surface of said real property; provided,
however, Grantor, its successors and assigns, shall not have the right for any
purpose whatsoever to enter upon, into or through the surface of said real
property or any part thereof between said surface and 500 feet below the
surface.
ALSO RESERVING THEREFROM for the benefit of Parcel 1, the following easements
as shown on the aforementioned Map:
(a) an easement for ingress and egress, shown as Easement "A" on said Parcel
Map.
(b) an easement for storm drainage, shown as Easement "E" on said Parcel Map.
(c) an easement for storm drainage, shown as Easement "F" on said Parcel Map.
PARCEL TWO:
An easement for ingress and egress, shown as Easement "B" on said Parcel Map.
PARCEL THREE:
An easement for surface drainage and storm drain lines, shown as Easement "C"
on said Parcel Map.
PARCEL FOUR:
An easement for storm drainage, shown as Easement "F" on said Parcel Map.
Exhibit C
Schematic of Perpendicular Parking Easement "G" and "H"
Exhibit D
Schematic of Encroachment Easements Over Easement "A" and "B"
EXHIBIT E
LEGAL DESCRIPTION
ENCROACHMENT EASEMENT OVER EASEMENT "A"
ACROSS A PORTION OF PARCEL 2 (636 MAPS 44 & 45)
MILPITAS, SANTA CLARA COUNTY, CALIFORNIA
All that certain real property situate in the City of Milpitas, County of Santa
Clara, State of California, described as follows:
Being a portion of Parcel 2, as shown upon that certain Parcel Map, filed May
14, 1992 in Book 636 of Maps at Pages 44 and 45, Records of Santa Clara County,
more particularly described as follows:
Beginning at the most easterly corner of said Parcel 2;
Thence along the northeasterly line of said Parcel, North 23 degrees 59'43"
West, 256.00 feet to the northwesterly line thereof;
Thence along the said northwesterly line of said Parcel, South 66 degrees 00'11"
West, 17.00 feet to the True Point of Beginning of this description, said point
also being on the northeasterly line of Easement "A", as shown on said map;
Thence leaving last said line, along the said northeasterly line of said
Easement "A", also being parallel with and distant thereon 17.00 feet
southwesterly, right angle measurement, from the northeasterly line of said
Parcel, South 23 degrees 59'43" East, 180.00 feet;
Thence South 66 degrees 00'17" West, 5.25 feet;
Thence North 23 degrees 59'43" West, 180.00 feet to a point on the said
northwesterly line of said Parcel;
Thence along the said northwesterly line, North 66 degrees 00'11" East, 5.25
feet to the True Point of Beginning of this description.
Containing an area of 945 square feet, more or less.
Subject to limitations, if any, by covenants, conditions, restrictions,
exceptions, reservations, easements, right of ways and other matters of record.
Prepared by:
Brian Kangas Foulk
/s/ Davis Thresh [SEAL]
- ----------------------------- LICENSED LAND SURVEYOR
Davis Thresh, P.L.S. No. 6868 STATE OF CALIFORNIA
License Expires 9-30-2000 DAVIS THRESH
EXP. 9/30/00
Dated: 5-18-98 No. 6868
-----------------------
BKF No. 986007-52 JVK
EXHIBIT F
LEGAL DESCRIPTION
ENCROACHMENT EASEMENT OVER EASEMENT "B"
ACROSS A PORTION OF PARCEL 1 (636 MAPS 44 & 45)
MILPITAS, SANTA CLARA COUNTY, CALIFORNIA
All that certain real property situate in the City of Milpitas, County of Santa
Clara, State of California, described as follows:
Being a portion of Parcel 1, as shown upon that certain Parcel Map, filed May
14, 1992 in Book 636 of Maps at Pages 44 and 45, Records of Santa Clara County,
more particularly described as follows:
Beginning at the most southerly corner of said Parcel 1;
Thence along the southwesterly line of said Parcel, North 23 degrees 59'43"
West, 256.00 feet to the southeasterly line thereof;
Thence along the said southeasterly line of said Parcel, South 66 degrees 00'11"
West, 17.00 feet to the True Point of Beginning of this description, said point
also being on the northeasterly line of Easement "B", as shown on said map;
Thence continuing along the said southeasterly line, South 66 degrees 00'11"
West, 5.25 feet;
Thence leaving last said line, parallel with and distant thereon 14.80 feet
northeasterly, right angle measurement, from the southwesterly line of said
Parcel, North 23 degrees 59'43" West, 126.00 feet;
Thence North 66 degrees 00'17" East, 5.25 feet to the said northeasterly line of
said Easement "B";
Thence along said line, South 23 degrees 59'43" East, 126.00 feet to the True
Point of Beginning of this description.
Containing an area of 662 square feet, more or less.
Subject to limitations, if any, by covenants, conditions, restrictions,
exceptions, reservations, easements, right of ways and other matters of record.
Prepared by:
Brian Kangas Foulk
/s/ Davis Thresh [SEAL]
- ----------------------------- LICENSED LAND SURVEYOR
Davis Thresh, P.L.S. No. 6868 STATE OF CALIFORNIA
License Expires 9-30-2000 DAVIS THRESH
EXP. 9/30/00
Dated: 5-18-98 No. 6868
-----------------------
BKF No. 986007-52 JVK
Exhibit G
Schematic of Parcel 2 Parking Encroachment Easements
EXHIBIT H
LEGAL DESCRIPTION
PARCEL 2
PARKING ENCROACHMENT EASEMENT AREA
ACROSS A PORTION OF PARCEL 2 (636 MAPS 44 & 45)
MILPITAS, SANTA CLARA COUNTY, CALIFORNIA
All that certain real property situate in the City of Milpitas, County of Santa
Clara, State of California, described as follows:
Being a portion of Parcel 2, as shown upon that certain Parcel Map, filed May
14, 1992 in Book 636 of Maps at Pages 44 and 45, Records of Santa Clara County,
more particularly described as follows:
Beginning at the most easterly corner of said Parcel 2;
Thence along the northeasterly line of said Parcel, North 23 degrees 59'43"
West, 56.60 feet to the True Point of Beginning of this description.
Thence leaving said northeasterly line, South 66 degrees 00'17" West, 3.25 feet;
Thence North 23 degrees 59'43" West, 199.40 feet to a point on the northwesterly
line of said Parcel;
Thence along the said northwesterly line, North 66 degrees 00'11" East, 3.25
feet to the said northeasterly line of said Parcel;
Thence along the said northeasterly line, South 23 degrees 59' 43" East, 199.40
feet to the True Point of Beginning of this description.
Containing an area of 648 square feet, more or less.
Subject to limitations, if any, by covenants, conditions, restrictions,
exceptions, reservations, easements, right of ways and other matters of record.
Prepared by:
Brian Kangas Foulk
/s/Davis Thresh
- ---------------
Davis Thresh, P.L.S. No. 6868
License Expires 9-30-2000
Dated: 5-18-98
BKF No. 986007-52 JVK
[STATE OF CALIFORNIA LICENSED LAND SURVEYOR SEAL]
DAVIS THRESH
EXP. 9/30/00
No.6868
EXHIBIT I
LEGAL DESCRIPTION
ADDITIONAL PARCEL 2
PARKING ENCROACHMENT EASEMENT AREA
ACROSS A PORTION OF PARCEL 2 (636 MAPS 44 & 45)
MILPITAS, SANTA CLARA COUNTY, CALIFORNIA
All that certain real property situate in the City of Milpitas, County of Santa
Clara, State of California, described as follows:
Being a portion of Parcel 2, as shown upon that certain Parcel Map, filed May
14, 1992 in Book 636 of Maps at Pages 44 and 45, Records of Santa Clara County,
more particularly described as follows:
Beginning at the most easterly corner of said Parcel 2;
Thence along the southeasterly line of said Parcel, South 66 degrees 00'17"
West, 4.30 feet;
Thence leaving the said southeasterly line, North 23 degrees 59'43" West, 23.00
feet to a point on the southeasterly line of the 24 foot wide Easement "A", as
shown on said map;
Thence along the said southeasterly line, North 66 degrees 00'11" East, 4.30
feet to a point on the northeasterly line of said Parcel;
Thence leaving said southeasterly line and along the said northeasterly line of
said Parcel, South 23 degrees 59'43" East, 23.00 feet to the Point of Beginning
of this description;
Containing an area of 99 square feet, more or less.
Subject to limitations, if any, by convenants, conditions, restrictions,
exceptions, reservations, easements, right of ways and other matters of record.
Prepared by:
Brian Kangas Foulk
/s/Davis Thresh
- ---------------
Davis Thresh, P.L.S. No. 6868
License Expires 9-30-2000
Dated: 5-18-98
BKF No. 986007-52 JVK
[STATE OF CALIFORNIA LICENSED LAND SURVEYOR SEAL]
DAVIS THRESH
EXP. 9/30/00
No.6868
Exhibit J
Schematic of Easement and Pedestrian ESMT. No. 1 & No. 2
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
State of California
County of Santa Clara
On June 8, 1998 before me, Martha A. Stolle, Notary Public,
Date Name and Title of Officer (e.g., "Jane Doe, Notary Public")
personally appeared Robert W. Kraiss
Name(s) of Signer(s)
[X] personally known to me - OR - [ ] proved to me on the basis of satisfactory
evidence to be the person whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his authorized capacity, and
that by his signature on the instrument the person, or the entity upon behalf
of which the person acted, executed the instrument.
WITNESS my hand and official seal.
Martha A. Stolle
Signature of Notary Public
- -------------------------------------
[STATE OF CALIFORNIA NOTARY STAMP]
MARTHA A. STOLLE
Commission # 1168099
Notary Public - California
Santa Clara County
My Comm. Expires Jan 8, 2002
- -------------------------------------
- ----------------------------------OPTIONAL-------------------------------------
Though the information below is not required by law, it may prove valuable to
persons relying on the document and could prevent fraudulent removal and
reattachment of this form to another document.
DESCRIPTION OF ATTACHED DOCUMENT
Title or Type of Document:
-----------------------------------------------------
Document Date: Number of Pages:
------------------------------------- ------------
Signer(s) Other Than Named Above:
----------------------------------------------
CAPACITY(IES) CLAIMED BY SIGNER(S)
Signer's Name: Signer's Name:
----------------------- -----------------------
[ ] Individual [ ] Individual
[ ] Corporate Officer [ ] Corporate Officer
Titles(s): Titles(s):
----------------------- -----------------------
[ ] Partner - [ ] Limited [ ] General [ ] Partner - [ ] Limited [ ] General
[ ] Attorney-in-Fact [ ] Attorney-in-Fact
[ ] Trustee [ ] Trustee
[ ] Guardian or Conservator [ ] Guardian or Conservator
[ ] Other: [ ] Other:
--------------------------- ---------------------------
--------------------------------- ---------------------------------
Signer is Representing: Signer is Representing:
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
RIGHT THUMBPRINT RIGHT THUMBPRINT
OF SIGNER OF SIGNER
Top of thumb here Top of thumb here
EXHIBIT K
LEGAL DESCRIPTION
DRIVEWAY EASEMENT
ACROSS A PORTION OF PARCEL 1 (636 MAPS 44 & 45)
MILPITAS, SANTA CLARA COUNTY, CALIFORNIA
All that certain real property situate in the City of Milpitas, County of Santa
Clara, State of California, described as follows:
Being a portion of Parcel 1, as shown upon that certain Parcel Map, filed May
14, 1992 in Book 636 of Maps at Pages 44 and 45, Records of Santa Clara County,
more particularly described as follows:
Beginning at the most northerly corner of said Parcel 1;
Thence along the northwesterly like of said Parcel, South 66 degrees 00'11"
West, 354.55 feet to the True Point of Beginning of this description.
Thence leaving the side northwesterly line, South 23 degrees 59'49" East, 20.00
feet to a point on the northwesterly line of the 24 foot wide Easement "B", as
shown on said map;
Thence along the said northwesterly line, South 66 degrees 00'11" West, 15.00
feet;
Thence leaving said line, North 23 degrees 59'49" West, 20.00 feet to said
northwesterly line of said Parcel;
Thence along said line, North 66 degrees 00'11" East, 15.00 feet to the True
Point of Beginning of this description.
Containing an area of 300 square feet, more or less.
Subject to limitations, if any, by covenants, conditions, restrictions,
exceptions, reservations, easements, right of ways and other matters of record.
Prepared by:
Brian Kangas Foulk
/s/ Davis Thresh
- ----------------
Davis Thresh, P.L.S. No. 6868
License Expires 9-30-2000
Dated: 5-18-98
BFK No. 986007-52 JVK
[STATE OF CALIFORNIA LICENSED LAND SURVEYOR SEAL]
DAVIS THRESH
EXP. 9/30/00
No. 6868
EXHIBIT L
LEGAL DESCRIPTION
PEDESTRIAN EASEMENT NO. 1
ACROSS A PORTION OF PARCEL 1 (636 MAPS 44 & 45)
MILPITAS, SANTA CLARA COUNTY, CALIFORNIA
All that certain real property situate in the City of Milpitas, County of Santa
Clara, State of California, described as follows:
Being a portion of Parcel 1, as shown upon that certain Parcel Map, filed May
14, 1992 in Book 636 of Maps at Pages 44 and 45, Records of Santa Clara County,
more particularly described as follows:
Beginning at the most northerly corner of said Parcel 1;
Thence along the northwesterly line of said Parcel, South 66 degrees 00'11"
West, 326.35 feet to the True Point of Beginning of this description.
Thence leaving the said northwesterly line, South 23 degrees 59'49" East, 4.00
feet;
Thence South 66 degrees 00'11" West, 2.85 feet;
Thence South 23'59'49" East, 16.00 feet to a point on the northwesterly line of
the 24 foot wide Easement "B", as shown on said map;
Thence along the said northwesterly line, South 66'00'11" West, 7.55 feet;
Thence leaving said line, North 23 degrees 59'49" West, 20.00 feet to said
northwesterly line of said Parcel;
Thence along said line, North 66 degrees 00'11" East, 10.40 feet to the True
Point of Beginning of this description.
Containing an area of 162 square feet, more or less.
Subject to limitations, if any, by covenants, conditions, restrictions,
exceptions, reservations, easements, right of ways and other matters of record.
Prepared by:
Brian Kangas Foulk
/s/ Davis Thresh
- ----------------
Davis Thresh, P.L.S. No. 6868
License Expires 9-30-2000
Dated: 5-18-98
BFK No. 986007-52 JVK
[STATE OF CALIFORNIA LICENSED LAND SURVEYOR SEAL]
DAVIS THRESH
EXP. 9/30/00
No. 6868
EXHIBIT M
LEGAL DESCRIPTION
PEDESTRIAN EASEMENT NO. 2
ACROSS A PORTION OF PARCEL 1 (636 MAPS 44 & 45)
MILPITAS, SANTA CLARA COUNTY, CALIFORNIA
All that certain real property situate in the City of Milpitas, County of Santa
Clara, State of California, described as follows:
Being a portion of Parcel 1, as shown upon that certain Parcel Map, filed May
14, 1992 in Book 636 of Maps at Pages 44 and 45, Records of Santa Clara County,
more particularly described as follows:
Beginning at the most northerly corner of said Parcel 1;
Thence along the northwesterly line of said Parcel, South 66 degree 00'11"
West, 119.40 feet to the True Point of Beginning of this description.
Thence leaving the said northwesterly line, South 23 degree 59'49" East, 20.00
feet to a point on the northwesterly line of the 24 foot wide Easement "B", as
shown on said map;
Thence along the said northwesterly line, South 66 degree 00'11" West, 7.30
feet;
Thence leaving said line, North 23 degree 59'49" West, 20.00 feet to the said
northwesterly line of said Parcel;
Thence along said line, North 66 degree 00'11" East, 7.30 feet to the True
Point of Beginning of this description.
Containing an area of 146 square feet, more or less.
Subject to limitations, if any, by covenants, conditions, restrictions,
exceptions, reservations, easements, right of ways and other matters of record.
Prepared by:
Brian Kangas Foulk
/s/Davis Thresh
- ---------------
Davis Thresh, P.L.S. No. 6868
License Expires 9-30-2000
Dated: 5-18-98
BKF No. 986007-52 JVK
[STATE OF CALIFORNIA LICENSED LAND SURVEYOR SEAL]
DAVIS THRESH
EXP. 9/30/00
No.6868
This Document Attached To: AMENDMENT NO. 1 TO
DECLARATION OF EASEMENT
Date of Document: June 11, 1998
Number of Pages of document 24
Document Signed By: Gary L. Frazier
STATE OF CALIFORNIA )
) SS.
COUNT OF LOS ANGELES )
On this 11th day of June, 1998, before me Terry Morris, the undersigned
Notary Public, personally appeared Gary L. Frazier, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person whose
name is subscribed to the within instrument and acknowledged to me that he
executed the same in his authorized capacity, and that by his signature on the
instrument the person, or the entity upon behalf of which the person acted,
executed the instrument.
WITNESS my hand and official seal.
/s/ Terry Morris
----------------
Notary Public
[SEAL OF CALIFORNIA]
TERRY MORRIS
COMM. # 1048275
Notary Public - California
LOS ANGELES COUNTY
My Comm. Expires DEC 26, 1998
CAFETERIA LICENSE AGREEMENT
THIS CAFETERIA LICENSE AGREEMENT (this "Agreement") is dated November 5th,
2002 by and between ADAPTEC, INC. ("Adaptec") and PCTEL, INC. ("PCTEL") with
reference to the following facts and circumstances:
A. Adaptec owns that certain complex consisting of multiple buildings,
together with related driveways, parking areas, and related fixtures and
improvements located at 463/471, 461, 691, and 801 South Milpitas Blvd.,
628/638/658 and 698 Gibraltar Court, and 500 Yosemite Drive, Milpitas California
(the "Complex"). The Complex consists of seven (7) buildings designated on
Exhibit A hereto.
B. Adaptec, as Sublessor, and PCTEL, as Sublessee, are parties to that
certain Sublease Agreement dated November 5th, 2002 (the "Sublease") with
respect to certain Premises located in Building 8 at 631 South Milpitas
Boulevard, Milpitas, California.
C. The Complex includes certain amenities for Adaptec's employees
including a cafeteria (the "Cafeteria") located between Buildings 4 and 7 and a
fitness center located in Building 6, both designated on Exhibit B, attached
hereto.
D. PCTEL desires to obtain from Adaptec, and Adaptec desires to
grant to PCTEL and its employees (including independent contractors) a
license to use the Cafeteria.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Adaptec and PCTEL hereby agree as follows:
1. License. Adaptec grants to PCTEL a non-exclusive, revocable
license (the "License") to use the Cafeteria. Such use of the Cafeteria shall be
on a first-come, first-served basis, and PCTEL and its employees shall have no
priority or preference in the use of the Cafeteria. Use of the Cafeteria shall
be subject to payment by PCTEL's employees of the applicable charges for the
food and other items purchased therein. Adaptec makes no representations or
warranties of any kind whatsoever regarding the Cafeteria or the Complex, and
Adaptec shall incur no loss, cost, liability or damage in connection with
PCTEL's use of the Cafeteria.
2. Term. The term of the License shall commence as of the date by
which the "Premises" under the Sublease are delivered to PCTEL pursuant to the
Sublease and shall automatically expire and terminate concurrently with the
expiration or earlier termination of the Sublease or earlier vacation of the
Premises under the Sublease by PCTEL. This License may be revocable in whole or
in part by Adaptec at any time and for any reason or for no reason whatsoever.
In addition, the License shall be revocable in whole or in part by Adaptec
effective ten (10) days after Adaptec's giving notice to PCTEL that PCTEL or its
employees have failed to comply with any term or condition of this Agreement.
Adaptec may also prohibit any PCTEL employee from using the Cafeteria if such
employee violates any term or condition set forth in Section 3 of this
Agreement.
3. PCTEL Covenants. PCTEL shall, and shall cause its employees to,
(i) operate under the License in a clean, safe and sanitary manner and shall not
damage any property in the Cafeteria or commit, permit or suffer to exist any
waste or nuisance at the Complex, (ii) minimize any interference with Adaptec's
and other parties' use of the Cafeteria, (iii) permit only PCTEL and its
authorized employees (including independent contractors) to use the Cafeteria,
(iv) enter the Cafeteria only through the S. Milpitas Boulevard entrance, and
(v) comply with the rules and regulations now or hereafter established by
Adaptec from time to time regarding the use of the Cafeteria. PCTEL's rights
under this License are conditioned on (a) the execution by PCTEL and its
employees of agreements that release Adaptec and its employees, agents and other
representatives from all loss or damage to the employees' property and bodily
injury or death, including, without limitation, the agreement attached hereto as
Exhibit C, (b) the compliance by PCTEL's employees with building security and
Cafeteria use rules and policies established by Adaptec from time to time, (c)
the use of the Cafeteria by PCTEL and its employees only during certain
designated hours, (d) PCTEL maintaining the insurance set forth in
1
Paragraph 4 below, and (e) such other matters as Adaptec reasonably may
determine. PCTEL and its employees shall not enter any areas in Buildings 4 or 7
outside of the Cafeteria.
4. Insurance. PCTEL shall maintain a policy of commercial general
liability insurance satisfying the requirements of Article 10 of the Sublease
against any and all claims for personal injury, death, property damage, or other
liabilities related to the License or PCTEL's or its employees' use of the
Cafeteria. Certificates evidencing such insurance shall be furnished to Adaptec
in accordance with Article 10 of the Sublease. All of the provisions of Article
10 of the Sublease, including, without limitation, all of the covenants and
requirements contained therein, shall apply to the insurance hereunder.
5. Release and Indemnity. PCTEL and its employees shall use the
Cafeteria under the License at PCTEL's and its employees' sole and entire risk,
and PCTEL shall be solely responsible for the health and safety of all employees
of PCTEL that use the Cafeteria. Accordingly, PCTEL hereby releases, acquits and
forever discharges Adaptec and Adaptec's directors, partners, members,
shareholders, officers and employees (collectively, the "Adaptec Parties"), from
and against any and all losses, costs, claims, liabilities and damages arising
from or relating in any manner to the License or PCTEL's or its employees' use
of the Cafeteria. The foregoing release shall not apply for the benefit of an
employee to the extent of such employee's gross negligence or willful
misconduct, but shall in all events apply with respect to all other Adaptec
Parties without regard to the negligence or willful misconduct of any Adaptec
employee. In addition, PCTEL shall indemnify, defend (with counsel reasonably
satisfactory to Adaptec) and hold harmless Adaptec and all other Adaptec Parties
from and against all losses, costs, claims, liabilities and damages (including
attorneys' fees and expenses) arising from or relating in any manner to the
License or PCTEL's or its employees' use of the Cafeteria, except to the extent
of the gross negligence or willful misconduct of an Adaptec Party. PCTEL
acknowledges and intends that all released and indemnified parties shall be
third party beneficiaries to PCTEL 's covenants under this paragraph and that
all such parties shall have the right to enforce such covenants as provided
herein.
6. Assignment. The License is personal to PCTEL and may not be
assigned, nor may any right or interest of PCTEL under this Agreement be
assigned, whether voluntarily or by operation of law. Subject to the foregoing,
this Agreement shall be binding upon and inure to benefit of the parties thereto
and their respective successors and assigns. Notwithstanding the foregoing,
Adaptec agrees to reasonably cooperate with any assignee or sublessee of PCTEL
(pursuant to the terms of Article 15 of the Sublease) and to enter into a
Cafeteria License Agreement with such party subject to terms substantially
similar to those contained herein.
7. Miscellaneous. This Agreement constitutes the entire agreement
between Adaptec and PCTEL regarding the subject matter hereof and supersedes all
prior representations, warranties, covenants and agreements relating thereto.
This Agreement may not be modified, nor may any provision hereof be waived,
orally, but only by a writing duly executed by Adaptec and PCTEL. If either
party brings any action or legal proceeding with respect to this Agreement, the
prevailing party in such action shall be entitled to recover its reasonable
attorneys' fees and expenses. All representations, warranties, covenants and
indemnities of PCTEL in this Agreement shall survive the expiration or sooner
termination of the License and the Agreement. PCTEL shall, at any time and from
time to time, execute such additional documents (including, without limitation,
estoppel certificates and waivers for the benefit of the Adaptec Parties) and
take such additional actions as any Adaptec Party may reasonably require to
carry out the purposes of this Agreement. The validity, construction,
performance, effect and enforcement of this Agreement shall be governed in all
respects by the laws of the State of California. The language and all parts of
this Agreement shall in all cases be construed as a whole according to their
fair meaning and not strictly for or against either Adaptec or PCTEL. All
captions used in this Agreement are for convenience of reference only and shall
not be considered in construing any provision hereof. If any provision of this
Agreement shall be illegal, invalid or unenforceable in any respect, the
legality, validity and enforceability of the remaining provisions hereof shall
not in any way be affected or impaired thereby. This Agreement may be executed
in one or more counterparts, each of which shall be an original, but all of
which, taken together, shall constitute one and the same Agreement.
2
IN WITNESS WHEREOF, Adaptec and PCTEL have executed this Agreement as of
the day and year first above written.
ADAPTEC, INC.
By: /s/ Robert W. Kraiss
-------------------------------------
Name: Robert W. Kraiss
---------------------------------
Title: Director of Corporate Facilities
and Real Estate
---------------------------------
PCTEL, INC.
By: /s/ John W. Schoen
-------------------------------------
Name: John W. Schoen
---------------------------------
Title: PCTEL COO/CFO
---------------------------------
3
SUBLEASE AGREEMENT
DATED: November 5, 2002
ARTICLE 1: FUNDAMENTAL SUBLEASE PROVISIONS.
1.1 PARTIES: Sublessor: Adaptec, Inc., a Delaware corporation
Sublessee: PCTEL, Inc., a Delaware corporation
Master Lessor: Limar Realty Corp. #7, a California
corporation, successor in interest to The
Prudential Insurance Company of America as
owner of the Premises
1.2 MASTER LEASE: (Article 3): Sublessor, as tenant, is leasing from Master
Lessor, as landlord, approximately 18,072 square feet of leasable area located
at: 631 South Milpitas Boulevard in the City of Milpitas, State of California
(the "PREMISES") on the terms and subject to the conditions of that certain
lease agreement dated as of December 20, 1996, as amended by the First Amendment
to Lease dated June 11, 1998 (collectively, the "MASTER LEASE"). A copy of the
Master Lease is attached hereto as EXHIBIT A.
1.3 SUBLEASE PREMISES: (Article 2): The Sublease Premises constitutes One
Hundred Percent (100%) of the Premises, and contains approximately 18,072 square
feet of leasable area (the "SUBLEASE PREMISES"). The Sublease Premises is
further described on the drawings attached to the Master Lease.
1.4 SUBLEASE TERM: (Article 4): Approximately Fifty-six and one-half (56-1/2)
calendar months, beginning on the Commencement Date and ending on the
Termination Date described below, unless commenced later or terminated earlier
pursuant to the terms of this Sublease.
1.5 COMMENCEMENT DATE: (Article 4.1): January 1, 2003.
1.6 TERMINATION DATE: (Article 4.1): September 16, 2007
1.7 RENTAL COMMENCEMENT DATE: (Article 5.2): March 1, 2003
1.8 MINIMUM MONTHLY RENT: (Article 5.2):
Lease Year 1 $1.03/rsf/month $18,614.16/month
Lease Year 2 $1.07/rsf/month $19,337.04/month
Lease Year 3 $1.11/rsf/month $20,059.92/month
Lease Year 4 $1.15/rsf/month $20,782.80/month
Lease Year 5 $1.19/rsf/month $21,505.68/month
As used herein, the term "LEASE YEAR" shall mean each 12-month period during the
Sublease Term, beginning on the Commencement Date and expiring on the last day
of the Sublease Term. The phrase "LEASE YEAR" shall also mean any period of time
that is not a 12-month period during the Sublease Term that begins at the end of
a Lease Year and ends on the last day of the Sublease Term. The first Lease Year
shall include the "Fit Up Period" described in Article 5.5, although Minimum
Monthly Rent shall not be payable until the Rental Commencement Date as defined
above.
1
1.9 ADDITIONAL RENT: (Article 5.3):
Operating Expenses under Master Lease $0.24/rsf/month $4,337.28/month
Janitorial and Trash Removal $0.12/rsf/month $2,168.64/month
Sublease Premises Maintenance and Repair $0.08/rsf/month $1,445.76/month
Security System and Maintenance $0.01/rsf/month $ 180.72/month
1.10 PREPAID RENT: (Article 5.6): $18,614.00
1.11 SECURITY DEPOSIT: (Article 6): Not applicable.
1.12 PERMITTED USE: (Article 7): general office, research and development,
marketing and other related legal uses, all in strict compliance with the
terms of the Master Lease.
1.13 ADDRESSES FOR NOTICES: (Article 11):
Master Lessor: Limar Realty Corp. #7
1730 So. El Camino Real, Suite 400
San Mateo, CA 94402
Fax: (650) 525-1738
Sublessor: Adaptec, Inc.
691 South Milpitas Boulevard, MS 20
Milpitas, CA 95035
Attn: Robert W. Kraiss
Fax: (408) 957-6600
With a copy to:
Silicon Valley Law Group
152 North Third Street, Suite 900
San Jose, CA 95112
Attn: Lucy Lofrumento
Sublessee: PCTEL, Inc.
Prior to the Commencement Date:
1331 California Circle
Milpitas, CA 95035
Attn: John W. Schoen
Fax: (773) 243-3050
Following the Commencement Date:
631 South Milpitas Boulevard
Milpitas, CA 95035
Attn: John W. Schoen
Fax: (408) _______________
2
With a copy to:
Much Shelist
200 North LaSalle Street, Suite 2100
Chicago, IL 60601
Attn: Joel S. Polisky
Fax: (312) 621-1750
With notices after February 1, 2003 to:
191 North Wacker Drive, Suite 1800
Chicago, Illinois 60606
1.14 SUBLESSOR'S BROKER: (Article 25.4): CPS, a Commercial Real Estate
Company, Inc.
1.15 SUBLESSEE'S BROKER: (Article 25.4): Cornish & Carey Commercial and Hudson
Jones
1.16 EXHIBITS AND ADDENDA: The following exhibits and any addenda are annexed
to this Sublease:
Exhibit A - Master Lease
Exhibit B - Sublessee Improvement Plan
Exhibit C - Commencement Date Memorandum
Exhibit D - Final Furniture Plan
Exhibit E - Information Services Agreement
Exhibit F - Rules & Regulations
Each reference in this Sublease Agreement ("SUBLEASE") to any provision in
Article 1 shall be construed to incorporate all of the terms of each such
provision. In the event of any conflict between this Article 1 and the balance
of the Sublease, the balance of the Sublease shall control.
ARTICLE 2: SUBLEASE PREMISES.
2.1 SUBLEASE. Sublessor hereby subleases to Sublessee and Sublessee hereby
subleases from Sublessor for the Sublease Term (hereinafter defined), at the
Rent (hereinafter defined) and upon the terms and conditions hereinafter set
forth, the Sublease Premises, and all common areas related thereto. Sublessee
acknowledges that the leasable area of the Sublease Premises as specified in
Article 1 is an estimate and that Sublessor does not warrant the exact leasable
area of the Sublease Premises. By taking possession of the Sublease Premises,
Sublessee accepts the leasable area of the Sublease Premises as that specified
in Article 1.
2.2 CONDITION OF THE SUBLEASE PREMISES. Sublessor shall deliver the Sublease
Premises to Sublessee (a) with all carpets, walls and ceilings in good repair,
(b) in broom-clean condition, and (c) with the roof, electrical, HVAC, plumbing
and other building systems (collectively, the "BUILDING SYSTEMS") in good
repair; and Sublessee thereupon shall accept possession of the Sublease Premises
in its "As Is" condition. If during the Sublease Term the Building Systems are
found not to be in good repair, then, to the extent repairs of such Building
Systems are the responsibility of Sublessor under the terms of the Master Lease
and are not otherwise necessitated by the act, neglect or fault of Sublessee, or
its agents, employees, invitees, visitors or contractors, Sublessor shall cause
the same to be corrected at its own expense promptly after receiving written
notice from Sublessee to do so.
2.3 IMPROVEMENTS TO THE SUBLEASE PREMISES.
2.3.1 CONSTRUCTION OF SUBLESSEE IMPROVEMENTS. Sublessor agrees to complete
certain interior improvements to the Sublease Premises (collectively, the
"SUBLESSEE IMPROVEMENTS"), which are more particularly described and depicted on
EXHIBIT B attached hereto (the "SUBLESSEE IMPROVEMENT PLAN"). Sublessor shall
have no
3
obligation to make any improvement or alteration to the Sublease Premises except
as specifically and expressly agreed to in writing by Sublessor, and all other
improvements or alterations required by Sublessee for Sublessee's use and
occupancy of the Premises shall be Sublessee's sole responsibility at
Sublessee's sole cost, in accordance with Article 2.6 and other applicable
provisions of this Sublease and the Master Lease.
Sublessor shall complete the Sublessee Improvements in compliance with the
terms of the Master Lease, in a good workmanlike manner, and in compliance with
all laws, rules, regulations, permit requirements, codes and ordinances. To the
extent that the costs for the Sublessee Improvements exceed One Hundred Thirty
Seven Thousand Five Hundred Sixty Four Dollars ($137,564.00), Sublessee shall be
responsible for such excess costs, which shall be payable by Sublessee to
Sublessor as Additional Rent within ten (10) days following submission to
Sublessee of an invoice.
2.3.2 CHANGE ORDER PROCESS. No material changes, modifications or
alterations to the Sublessee Improvement Plan shall be made by either party
without the prior written consent of the other, which consent shall not be
unreasonably withheld, conditioned or delayed. All requests for change orders
shall be made and agreed to in writing, and shall specify the added (or reduced)
costs and time required for completion. All approved changes shall be made in
the form of a change order ("CHANGE ORDER") setting forth the increased costs,
if any, caused by the change and specifying any anticipated delay relating to
that Change Order, if any. Any delay as a result of a Change Order requested by
Sublessee shall not delay the date of Substantial Completion (as defined below),
i.e., in case of any such delay the date of Substantial Completion shall be the
date that the Sublessee Improvements would have been completed in accordance
with the original Sublessee Improvement Plan without regard to the delay caused
by such Change Order. Sublessee shall reimburse Sublessor for any increased
costs within ten (10) days of Sublessee's receipt of the invoice from Sublessor
for those increased costs.
2.3.3 COMPLETION OF SUBLESSEE IMPROVEMENTS. Sublessor shall notify
Sublessee in writing when the Sublessee Improvements are Substantially
Completed. "SUBSTANTIAL COMPLETION" as used in this Sublease shall mean the date
that the Sublessee Improvements have been completed in accordance with all
material aspects of the Sublessee Improvement Plan, except that in the case of
any delay resulting from (i) a Change Order requested by Sublessee or (ii)
interference with the construction work caused by Sublessee or its contractors,
the date of Substantial Completion shall be the date that the Sublessee
Improvements would have been completed but for such delay. In any event,
Substantial Completion shall be deemed to have occurred notwithstanding
Sublessor's obligation to complete any "punch list" items (described below) that
do not materially diminish the usefulness of the Sublease Premises for the
Permitted Use (as described in Article 1). If Sublessee disagrees with
Sublessor's determination of the date of Substantial Completion, the parties
shall meet and confer in good faith to try to resolve their differences.
Within five (5) business days after Sublessor notifies Sublessee that the
Sublessee Improvements are Substantially Complete, Sublessee and Sublessor shall
perform a walk-through of the Sublease Premises and within ten (10) days
following the date of such walk-through Sublessee shall deliver to Sublessor a
statement describing all non-latent defects, errors and/or omissions observed in
the Sublessee Improvements (the "PUNCH LIST"). The Punch List shall constitute
the conclusive determination by Sublessee of the existence of any non-latent
defects, errors and/or omissions within the Sublease Premises, and Sublessee's
failure to sign and deliver such Punch List to Sublessor within said ten (10)
day period shall constitute a conclusive determination by Sublessee that no such
defects, errors or omissions exist. Upon receipt of the Punch List, Sublessor
shall date and sign a copy of it as to items Sublessor agrees are appropriately
listed, and shall return the signed copy to Sublessee. Sublessor shall, within
thirty (30) days after receipt of the Punch List, correct the agreed-upon items.
If Sublessee disagrees with Sublessor's determination of the appropriate Punch
List items, the parties shall meet and confer in good faith to try to resolve
their differences.
2.4 PERSONAL PROPERTY. Except as provided in Articles 19 and 20, Sublessee
acknowledges that the Sublease Premises shall not include any of the fixtures,
equipment, cabling, furniture, or other personal property belonging to
4
Sublessor, unless the parties have specifically agreed to the same in writing.
2.5 COMPLIANCE WITH LAWS.
2.5.1 SUBLESSOR'S OBLIGATIONS. Sublessor represents and warrants that to
Sublessor's Knowledge (as defined in Article 25.5 below), the Sublease Premises
as they exist on the date of this Sublease do not violate any ordinance, rule,
code, or regulation of any governmental agency, including the Americans with
Disabilities Act and Title 24 requirements ("ADA") and Sublessor has not
received any notice of such violation. Sublessor agrees to cure (or cause to be
cured) such violations existing as of the date of this Sublease (to the extent
such cure is the responsibility of Sublessor under the terms of the Master
Lease) or to request Master Lessor to cure such violations (if applicable) that
interfere with Sublessee's ability to use and occupy the Sublease Premises for
the Permitted Use.
2.5.2 SUBLESSEE'S OBLIGATIONS. Sublessee shall, at Sublessee's sole cost
and expense, be responsible for bringing the Sublease Premises into compliance
with any statutes, rules, regulations, ordinances (whether presently existing or
hereinafter enacted), or insurance regulations, including but not limited to
compliance with ADA requirements (collectively, "APPLICABLE LAWS") to the extent
that compliance with such Applicable Laws is "triggered" by (i) Sublessee's
specific and unique use or occupancy of the Sublease Premises; or (ii)
construction work in, or alterations to, the Sublease Premises (other than the
Sublessee Improvements), or (iii) Sublessee's application for a building permit
or any other governmental approval (other than for the Sublessee Improvements).
2.6 ALTERATIONS TO PREMISES. Sublessee shall not make any alterations,
additions, or improvements (collectively, "Alterations") to the Sublease
Premises without the prior written consent of Sublessor, unless (i) the
Alteration does not affect the Building structure, the exterior appearance of
the Building, or the Building Systems, (ii) such Alteration does not require a
building permit, (iii) the costs of the Alteration do not exceed Fifteen
Thousand Dollars ($15,000), and (iv) Sublessee complies with the other
requirements of Section 9(b) of the Master Lease relative to such Alteration.
ARTICLE 3: TERMS OF THE MASTER LEASE.
3.1 SUBLEASE SUBORDINATE. This Sublease is subordinate and subject to all of
the terms and conditions of the Master Lease.
3.1.1 If the Master Lease terminates for any reason whatsoever, this
Sublease shall terminate concurrently, and the parties hereto shall be relieved
of any liability thereafter accruing under this Sublease, except for the
liabilities of the parties which by the terms of this Sublease survive the
expiration or earlier termination of this Sublease. Notwithstanding the
foregoing, Sublessee agrees that in the event that Sublessor shall default in
its obligations under the Master Lease, then Master Lessor, at its option and
without being obligated to do so, may require Sublessee to attorn to Master
Lessor, provided that as a condition to such attornment, Master Lessor shall
agree to undertake the obligations of Sublessor under this Sublease from the
time of the exercise of said option to termination of this Sublease.
3.1.2 Sublessor covenants that during the Sublease Term, it shall not
assign or attempt to assign its interests and obligations under either the
Master Lease or this Sublease, without notifying Sublessee at least five (5)
days in advance of such action (unless such advance notice is precluded by
applicable securities or other laws, in which event notice will be given within
five (5) days after it is lawfully permitted).
3.1.3 Sublessor covenants that during the Sublease Term, it shall not make
or agree to any amendments or modifications to the Master Lease, without first
obtaining Sublessee's written consent thereto, which consent shall not be
unreasonably withheld, delayed or conditioned.
3.1.4 Upon execution of this Sublease, Sublessor will send Master Lessor a
letter requesting (a) that Master Lessor
5
send to Sublessee any notice of default by Sublessor under the Master Lease, at
the same time Master Lessor sends such notice to Sublessor; and (b) that Master
Lessor permit Sublessee the opportunity to cure or cause to be cured any such
default in the same manner as Sublessor would be permitted to do so under the
Master Lease, prior to Master Lessor's exercising any of its remedies under the
Master Lease. However, acceptance by Master Lessor of the requests in such
letter shall not be a condition precedent to the effectiveness of this Sublease
or affect any of the parties' respective rights and remedies as more
specifically set forth herein.
3.1.5 Sublessor hereby certifies to Sublessee that to the best of
Sublessor's Knowledge (as defined in Section 25.5 below), the following
statements are true:
(a) The Master Lease attached as Exhibit A hereto constitutes the
entire agreement between Master Lessor and Sublessor, and there are no
amendments, supplements or modifications thereto or thereof or any other
agreements between Master Lessor and Sublessor with respect to the Sublease
Premises which otherwise amend, modify, rescind, revoke or change in any manner
whatsoever the Master Lease;
(b) The Master Lease is in full force and effect in accordance with
its terms, Sublessor is not in default under any of the terms of the Master
Lease, and there exists no event which with the passage of time or the giving of
notice or both would constitute a default under the Master Lease;
(c) Except for Sublessor, there are no parties in possession or
occupancy of the Sublease Premises or any part thereof, nor are there any
parties who have any possessory rights with respect to the Sublease Premises or
any part thereof; and
(d) There is no existing or pending or threatened condemnation of
any part of the Sublease Premises.
3.2 SUBLESSEE'S OBLIGATIONS. To the extent applicable to the Sublease Premises
and Sublessee's use of the common areas, Sublessee hereby expressly assumes and
agrees to perform and discharge, as and when required by the Master Lease, all
debts, duties and obligations to be paid, performed or discharged by Sublessor
under the terms, covenants and conditions of the Master Lease from and after the
Commencement Date, except as specifically set forth in this Sublease. Sublessee
shall not commit or suffer at any time any act or omission that would violate
any provision of the Master Lease.
3.3 SUBLESSOR'S OBLIGATIONS. Notwithstanding anything to the contrary contained
in this Sublease, Sublessor shall keep and maintain the Sublease Premises
(including appurtenances) to the extent required of the "TENANT" by Section 10
of the Master Lease. The fee for such service shall be paid by Sublessee in
compliance with the terms of Article 5 of this Sublease; provided, however, if a
required repair is the result of the act, neglect or fault of Sublessee or
Sublessee's agents, employees, contractors or invitees, then Sublessee shall be
liable for the entire cost of such repair. Sublessee shall permit Sublessor and
its agents and contractors to enter the Sublease Premises at all reasonable
times upon reasonable notice to make necessary improvements or repairs required
under this Sublease. Sublessor shall have no obligation to perform under this
paragraph until a reasonable time after receipt of notice from Sublessee of such
need, which notice shall be provided by calling Sublessor's Maintenance Service
Line at (408) 957-7110, Monday through Friday (excluding holidays) between the
hours of 8:00AM-12:00PM and 1:00PM-5:00 PM, with emergency response available 24
hours a day via communication through the on-site security personnel. Required
labor and materials shall be consistent with those provided to Sublessor's
employees in response to a maintenance request. In no event shall any payments
owed by Sublessee under this Sublease be abated on account of Sublessor's
failure to make repairs under this Paragraph. Sublessee hereby waives all
statutory rights to make repairs for or at the expense of Sublessor.
So long as Sublessee complies with all of its obligations under this
Sublease and cures any failure to comply within the applicable cure periods,
Sublessor shall not commit any act or omission during the Sublease Term that
would lead to the termination of the Master Lease by Master Lessor.
Notwithstanding the foregoing, if Sublessee fails to
6
comply with any of its obligations under this Sublease (including without
limitation the obligations assumed by Sublessee under the Master Lease), and
does not cure such failure within the applicable cure period (or if no cure
period is specified in either this Sublease or the Master Lease, then within
five (5) days after receiving written notice of such failure), then Sublessor
shall have no obligation to Sublessee to maintain the Master Lease for
Sublessee's benefit.
3.4 MASTER LESSOR'S OBLIGATIONS. Sublessor shall not be responsible to Sublessee
for furnishing any service, maintenance or repairs to the Sublease Premises that
are the obligation of the Master Lessor under the Master Lease, it being
understood that Sublessee shall look solely to Master Lessor for performance of
any such service, maintenance or repairs. However, if Master Lessor shall fail
to perform its obligations under the Master Lease, Sublessor, upon receipt of
written notice from Sublessee, shall use commercially reasonable efforts to
attempt to enforce the obligations of Master Lessor under the Master Lease;
provided, however, that Sublessor shall not be required to incur any costs or
expenses in connection therewith unless Sublessee agrees to reimburse Sublessor
for any such costs and expenses as Additional Rent hereunder.
3.5 SUBLESSOR'S RIGHTS AND REMEDIES. In addition to all the rights and remedies
provided to Sublessor at law, in equity, or under the terms of this Sublease,
(a) in the event of any breach by Sublessee of any of its obligations under this
Sublease, Sublessor shall have all of the rights and remedies with respect to
such breach which are available to Master Lessor in the event of any breach
under the Master Lease; and (b) as a further remedy, if Sublessee fails to
perform any act on its part to be performed pursuant to the requirements of the
Master Lease or as otherwise required by this Sublease, within any applicable
grace periods provided herein, then Sublessor may, but shall not be obligated
to, fulfill such obligations of Sublessee, including entering the Sublease
Premises to perform any such act, and all costs and expenses incurred by
Sublessor in doing so shall be deemed Additional Rent payable by Sublessee to
Sublessor upon demand.
3.6 SUBLESSEE'S RIGHT TO CURE. If Master Lessor notifies Sublessor of any
default by Sublessor under the Master Lease, Sublessor shall deliver a copy of
such notice to Sublessee within 24 hours' after Sublessor's receipt thereof, as
required by Section 11.2. At the time of delivery of such notice, Sublessor
shall advise Sublessee in writing as to whether Sublessor plans to cure such
default, or whether Sublessor disputes such default.
3.6.1 If Sublessor does not dispute such default, then Sublessor shall
promptly cure the default and provide proof of such cure to Sublessee at least
two (2) business days prior to the expiration of the applicable cure period in
the Master Lease. If Sublessor fails to cure such default within such time
period, then subject to Master Lessor's agreement (if so required under the
Master Lease), Sublessee shall have the right and opportunity to cure such
default in place of Sublessor.
3.6.2 If Sublessor disputes such default, then Sublessee shall not have
the right to cure the default unless Master Lessor shall have provided a
statutory notice to cure the default or "quit" in which event Sublessee shall
have the right to make any payments or otherwise cure the default to the extent
necessary to avoid a forfeiture of the Master Lease.
3.6.3 In the event that Sublessee cures such default by Sublessor in
accordance with the foregoing provisions, and Sublessee is not then in default
under this Sublease (after the expiration of any applicable cure periods), then
Sublessee shall have the right to offset the amount paid to cure such default
and other related costs, including reasonable attorneys' fees, against any
amounts owed by Sublessee under this Sublease.
ARTICLE 4: SUBLEASE TERM.
4.1 COMMENCEMENT AND TERMINATION DATES. The term of this Sublease ("SUBLEASE
TERM") shall be for the period of time commencing on the commencement date
described in Article 1 (the "COMMENCEMENT DATE") and ending on the termination
date described in Article 1 or on such earlier date of termination as provided
herein (the "TERMINATION DATE"). Within 10 days following the Commencement Date,
Sublessor shall prepare, sign and deliver
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to Sublessee a certificate substantially in the form of EXHIBIT C, and within 10
days following the receipt thereof Sublessee will execute and deliver it to
Sublessor. If Sublessee disagrees with any of Sublessor's statements in such
certificate, the parties shall meet and confer in good faith to try to resolve
their differences.
4.2 DELAY IN COMMENCEMENT. If for any reason possession of the Sublease Premises
has not been delivered to Sublessee by January 1, 2003, or any other date,
Sublessor shall not be liable to Sublessee or any other person or entity for any
loss or damage resulting therefrom. However, if the Sublessee Improvements have
not been Substantially Completed by February 1, 2003, due to no fault of
Sublessee, then the Commencement Date and the Rental Commencement Date shall be
delayed by one day for each day of such delay, but the Termination Date shall
not be extended. Further, if Sublessor is unable to deliver possession of the
Sublease Premises to Sublessee by February 21, 2003, then Sublessee may
terminate this Sublease by giving written notice to Sublessor within ten (10)
days after that date, and the parties shall have no further liability thereafter
accruing under this Sublease.
4.3 EARLY OCCUPANCY. Sublessor shall permit Sublessee to occupy the Sublease
Premises following the Commencement Date in order to fit up the Sublease
Premises for Sublessee's use subject to the following conditions: (i)
Sublessee's fit up work shall not interfere with or hinder Sublessor's
completion of the Sublessee Improvements; (ii) such occupancy shall be subject
to all of the provisions of this Sublease (including, without limitation,
Articles 10 and 14) and the Master Lease, including the payment of Operating
Expenses as required under Article 5.3(1), but excluding the payment of Minimum
Monthly Rent and other Additional Rent items. Early occupancy of the Sublease
Premises shall not advance the Termination Date. Sublessee shall, prior to
entering the Sublease Premises, deliver to Sublessor certificates of insurance
evidencing the policies required of Sublessee under this Sublease.
4.4 ONE-TIME RIGHT TO TERMINATE. Sublessor grants Sublessee a one-time right to
terminate the Sublease ("TERMINATION RIGHT"), which termination, if exercised,
shall be effective as of the first day of the thirty-seventh (37th) month of the
Sublease Term. Sublessee shall exercise the Termination Right, if at all, by
giving Sublessor six months prior written notice (i.e., no later than the first
day of the 31st month of the Sublease Term), with a concurrent payment of three
(3) months Minimum Monthly Rent based on the amount due for the 37th month of
the Sublease Term (i.e., a total of $62,348.40) and the unamortized cost of the
Sublessee Improvements and the Brokerage Commission as of the date of such
notice. Sublessor shall designate the amount of the unamortized cost of the
Sublessee Improvements and the Brokerage Commission in EXHIBIT C. All contracts
and rights with respect to Sublessor provided services shall terminate as of the
effective termination date at no additional cost to Sublessee.
ARTICLE 5: RENT AND ADDITIONAL EXPENSES.
5.1 PAYMENT OF RENT. All monies payable by Sublessee under this Sublease shall
constitute "RENT." All Rent shall be paid in lawful money of the United States,
without any deduction, offset (unless otherwise expressly provided in this
Sublease) or demand, to Sublessor at the address of Sublessor specified in
Article 1 or such other place as Sublessor may designate in writing. No payment
by Sublessee of a lesser amount than the Rent herein stipulated shall be deemed
to be other than on account of the earliest stipulated Rent, nor shall any
endorsement or statement on any check or any letter accompanying any check or
payment of Rent be deemed an accord and satisfaction, and Sublessor may accept
such check or payment without prejudice to its right to recover the balance of
such Rent or to pursue any other remedy. Rent for any partial calendar months at
the beginning or end of the Sublease Term or by early occupancy of the Sublease
Premises shall be prorated based on a thirty (30) day month. In the event of
nonpayment by Sublessee of any of the following items of "Rent," Sublessor shall
have all the rights and remedies with respect thereto as Sublessor has for
nonpayment of Minimum Monthly Rent.
5.2 MINIMUM MONTHLY RENT. Sublessee shall pay to Sublessor the sum set forth in
Article 1 hereof as Minimum Monthly Rent, in advance, on the first day of each
calendar month throughout the Sublease Term, commencing on the Rental
Commencement Date.
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5.3 ADDITIONAL RENT. In addition to Minimum Monthly Rent, Sublessee shall pay to
Sublessor, in advance, on the first day of each calendar month for the Sublease
Term, the following sums (collectively, "ADDITIONAL RENT"):
(1) Commencing on the Commencement Date, the sum set forth in Article 1.9
for Operating Expenses, which amount represents an estimate of the real property
taxes, insurance, common area utilities, common area maintenance and repair, and
other charges attributable to and/or accruing against the Sublease Premises
under the Master Lease.
(2) Commencing on the Rental Commencement Date, the sum set forth in
Article 1.9 for Sublease Premises Maintenance and Repair, which services are
described in Section 3.3 of this Sublease.
(3) Commencing on the Rental Commencement Date, the sum set forth in
Article 1.9 for Janitorial and Trash Removal, which services shall include
janitorial service and trash removal five (5) days per week (excluding holidays)
and all supplies pertaining to such services.
(4) Commencing on the Rental Commencement Date, the sum set forth in
Article 1.9 for Security System and Maintenance, which services shall include a
cardkey system for the Sublease Premises, updates, all maintenance and badges;
provided, however, in addition to such amount, Sublessee shall pay to Sublessor
$10 for each security badge issued or replaced.
The Additional Rent items described in subparagraphs (1) through (4) above
shall be fixed for the Sublease Term and pro-rated for any partial month based
on a thirty (30) day month.
5.4 INFORMATION SERVICES. Commencing on the Rental Commencement Date, Sublessee
shall pay Sublessor the sums required under the terms and conditions of the
Information Services Agreement, as set forth in Article 20.
5.5 UTILITIES. Commencing on the earlier of (i) the date of commencement of the
Fit Up Period or (ii) thirty (30) days after the Commencement Date, Sublessee
shall be responsible for the cost of all utilities serving the Sublease
Premises, which payments shall be made directly to the providers of such
services. For purposes of this Sublease, the term "FIT UP PERIOD" shall mean the
period of time from the first date that Sublessee occupies the Sublease Premises
until the Rent Commencement Date.
5.6 PREPAID RENT. Concurrently with Sublessee's execution and delivery of this
Sublease to Sublessor, Sublessee shall deposit with Sublessor a check payable in
the sum specified in Article 1 as Prepaid Rent, which shall be applied to the
installments of Minimum Monthly Rent first coming due under this Sublease, or
returned to Sublessee pursuant to Section 25.6 if this Sublease is terminated
due to failure to obtain Master Lessor's consent to this Sublease. Sublessor
shall have the right to negotiate such check upon Sublessor's execution and
delivery of this Sublease to Sublessee.
5.7 MISCELLANEOUS CHARGES. Sublessee shall pay to Sublessor, within five (5)
days after written demand therefor, any and all non-recurring, special or other
miscellaneous charges and expenses that Sublessor may incur under the Master
Lease by reason of Sublessee's occupancy, defaults or activities (which charges
and expenses are not covered by the other fees described above), such as late
charges for late payment of rent, fines for violation of laws, work orders,
repairs caused by Sublessee's negligence, and so forth.
5.8 LATE CHARGE. If Sublessee fails to pay any Rent within five (5) days after
such payment becomes due hereunder, then Sublessee shall pay Sublessor a late
charge equal to six percent (6%) of such delinquent amount as liquidated damages
for Sublessee's failure to make timely payment; provided, however, that
Sublessor shall waive such charge one time only during the First Lease Year. Any
notice given by Sublessor pursuant to any statute governing unlawful detainer
actions shall be deemed to be concurrent with, and not in addition to, the
notice required herein. This provision for a late charge shall not be deemed to
grant Sublessee a grace period or extension of time for performance. If any Rent
remains delinquent for a period in excess of thirty (30) days then, in addition
to such late charge, Sublessee
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shall pay to Sublessor interest on the delinquent amount from the date such
amount became due until paid, at the rate of ten percent (10%) per annum or the
maximum rate permitted by law.
5.9 LEGAL EXPENSES. Sublessee shall pay to Sublessor, as part of Rent, all costs
and expenses (including without limitation attorneys' fees and legal expenses),
that may accrue in the event of Sublessee's failure to pay any of the items
described above, and all damages, reasonable costs and expenses that Sublessor
may incur by reason of default of Sublessee or failure on Sublessee's part to
comply with the terms of this Sublease.
ARTICLE 6: SECURITY DEPOSIT. [Intentionally Omitted.]
ARTICLE 7: USE.
7.1 USE OF THE SUBLEASE PREMISES. Sublessee shall use the Sublease Premises
solely for the purpose specified in Article 1 (the "PERMITTED USE") in strict
conformance with the applicable requirements of the Master Lease, and for no
other purpose whatsoever.
7.2 NO VIOLATION OF APPLICABLE LAWS. To Sublessor's Knowledge, the Permitted
Use does not violate any Applicable Laws in effect as of the date hereof.
7.3 SUITABILITY. Sublessee acknowledges that, except as explicitly stated in
this Sublease, neither Sublessor nor any agent of Sublessor has made any
representation or warranty with respect to the Sublease Premises, the permitted
uses that can be made of the Sublease Premises under existing laws, or the
suitability of the Sublease Premises for the conduct of Sublessee's business,
nor has Sublessor agreed to undertake any modification, alteration or
improvement to the Sublease Premises.
7.3 HAZARDOUS MATERIALS.
7.3.1 DEFINITIONS. As used herein, the term "HAZARDOUS MATERIAL" shall
mean any hazardous or toxic substance, material or waste which is or becomes
regulated by any state, federal, or local government authority, including
without limitation all of those materials and substances designated as hazardous
or toxic by the Environmental Protection Agency, the Department of Labor, the
Department of Transportation, the Department of Agriculture, the Department of
Health Services or the Food and Drug Agency. Without limiting the generality of
the foregoing, the term "HAZARDOUS MATERIAL" shall include (i) any substance,
product, waste or other material of any nature whatsoever which may give rise to
liability under any statutory or common law theory based on negligence,
trespass, intentional tort, nuisance or strict liability or under any reported
decisions of a state or federal court; (ii) gasoline, diesel fuel, or other
petroleum hydrocarbons; (iii) polychlorinated biphenyls; (iv) asbestos
containing materials; (v) urea formaldehyde foam insulation; and (vi) radon gas.
As used herein, the term "HAZARDOUS MATERIAL LAW" shall mean any applicable
statute, law, ordinance, or regulation of any governmental body or agency which
regulates the use, storage, generation, discharge, treatment, transportation,
release, or disposal of any Hazardous Material.
7.3.2 USE RESTRICTION. Except for small quantities of household cleaners
and office supplies typically used in connection with professional offices,
Sublessee shall not cause or permit any Hazardous Material to be used, stored,
generated, discharged, treated, transported to or from, released or disposed of
in, on, over, through, or about the Sublease Premises, or any other land or
improvements in the vicinity of the Sublease Premises, without the prior written
consent of Master Lessor and Sublessor, which consent may be withheld in the
sole and absolute discretion of Master Lessor and/or Sublessor. Without limiting
the generality of the foregoing, (a) any use, storage, generation, discharge,
treatment, transportation, release, or disposal of Hazardous Material by
Sublessee shall strictly comply with all applicable Hazardous Material Laws, and
(b) if the presence of Hazardous Material on the Sublease Premises caused or
permitted by Sublessee or its agents, employees, invitees, visitors or
contractors results in contamination of the Sublease Premises or any soil, air,
ground or surface waters under, through, over, on, in or about the Sublease
Premises, Sublessee, at its expense, shall promptly take all actions necessary
to return the Sublease Premises to the condition
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existing prior to the existence of such Hazardous Material.
7.3.3 SUBLESSOR'S REPRESENTATION RELATING TO HAZARDOUS MATERIALS.
Sublessor represents that to Sublessor's Knowledge as of the Commencement Date
(i) the Sublease Premises are in compliance with Hazardous Materials Laws; (ii)
the handling, transportation, storage, treatment, disposal, release and use of
Hazardous Materials by Sublessor on or about the Sublease Premises (including
soil, ground water or surface water thereof) prior to the Commencement Date, has
been in compliance with all Hazardous Material Laws; and (iii) no action,
proceeding or claim is pending or threatened regarding the Sublease Premises
concerning any Hazardous Material or pursuant to any environmental law.
Sublessor agrees to cure (or cause to be cured) any violations of Hazardous
Materials Laws existing prior to the Commencement Date (to the extent such cure
is the responsibility of Sublessor under the terms of the Master Lease) or to
request Master Lessor to cure such violations (if applicable).
7.3.4 EXEMPTION OF SUBLESSEE. Sublessee shall not be responsible for the
clean-up or remediation of, and shall not be required to indemnify Sublessor
against, any claims, losses, liabilities or expenses resulting from any,
Hazardous Materials existing at the Sublease Premises prior to the Commencement
Date, except to the extent that Sublessee or Sublessee's agents, employees,
invitees, visitors or contractors have (a) increased the severity of such
contamination (other than by use of the Sublease Premises in accordance with the
terms of this Sublease) or (b) contributed to such contamination, either by
their conduct or by Sublessee's failure to perform its obligations under this
Article 7. Any costs pertaining to the removal of Hazardous Materials placed on
or about the Sublease Premises prior to the Commencement Date shall be excluded
from Operating Costs that would otherwise be payable by Sublessee pursuant to
Article 5.
ARTICLE 8: SURRENDER.
8.1 CONDITION OF THE SUBLEASE PREMISES. Upon the expiration or earlier
termination of this Sublease, Sublessee shall surrender the Sublease Premises
broom clean and in good condition and repair, excepting only ordinary wear and
tear and damage by fire, earthquake, act of God or the elements. Sublessee shall
repair any damage to the Sublease Premises, or the building of which the
Sublease Premises are a part, caused by or related to the removal of any
articles of personal property, business or trade fixtures, machinery, equipment,
cabinetwork, signs, furniture, movable partitions or permanent improvements or
additions which Sublessor allows or requires Sublessee to remove, including,
without limitation, repairing the floor and patching and/or painting the walls
where required by Sublessor to the reasonable satisfaction of Sublessor and/or
Master Lessor, all at Sublessee's sole cost and expense. Sublessee shall
indemnify Sublessor against any loss or liability resulting from delay by
Sublessee in so surrendering the Sublease Premises, including, without
limitation, any claims made by the Master Lessor and/or any succeeding tenant
founded on such delay. Such indemnity obligation shall survive the expiration or
earlier termination of this Sublease.
8.2 SUBLESSOR'S RIGHT TO ACCESS. In the ten (10) days prior to the
expiration of this Sublease, or such longer time as is reasonably necessary for
Sublessor to fulfill its surrender obligations under the Master Lease, Sublessor
shall have the right, upon at least twenty-four (24) hours prior notice, to
enter the Sublease Premises to remove personal property belonging to Sublessor,
if any (including without limitation any business or trade fixtures, machinery,
equipment, cabinetwork, signs, furniture, and movable partitions owned by
Sublessor and located within the Sublease Premises) and to remove any
improvements or additions, if any, that Sublessor is required to remove prior to
surrender of the Premises pursuant to the Master Lease (not including those
items to be removed by Sublessee pursuant to Article 8.1 of this Sublease). Any
work performed by Sublessor pursuant to the terms of the preceding sentence
shall be done in a reasonable manner to minimize the amount of inconvenience and
interference to Sublessee's use and occupancy of the Sublease Premises;
provided, however, Sublessor shall not be liable to Sublessee for any such
inconvenience or interference caused by Sublessor's exercise of its rights
pursuant to this provision.
ARTICLE 9: CONSENT. Whenever the consent or approval of Master Lessor is
required pursuant to the terms of the Master Lease, for the purposes of this
Sublease, Sublessee, in each such instance, shall be required to obtain the
written consent or approval of both Master Lessor and Sublessor pursuant to the
terms of the Master Lease. If Master Lessor
11
refuses to grant its consent or approval, Sublessor may withhold its consent or
approval and Sublessee agrees that such action by Sublessor shall be deemed
reasonable.
ARTICLE 10: INSURANCE. All insurance policies required to be carried by
Sublessor under the Master Lease shall be maintained by Sublessee pursuant to
the terms of the Master Lease, and shall name Sublessor and Master Lessor (and
such other lenders, persons, firms, or corporations as are designated by
Sublessor or Master Lessor) as additional insureds by endorsement. All policies
shall be written as primary policies with respect to the interests of Master
Lessor and Sublessor and such other additional insureds and shall provide that
any insurance carried by Master Lessor or Sublessor or such other additional
insureds is excess and not contributing insurance with respect to the insurance
required hereunder. All policies shall also contain "cross liability" or
"severability of interest" provisions and shall insure the performance of the
indemnity set forth in Article 14 of this Sublease. Sublessee shall provide
Master Lessor and Sublessor with copies or certificates of all policies,
including in each instance an endorsement providing that such insurance shall
not be cancelled or amended except after thirty (30) days prior written notice
to Master Lessor and Sublessor. All deductibles, if any, under any such
insurance policies shall be subject to the prior reasonable approval of
Sublessor, and all certificates delivered to Master Lessor and Sublessor shall
specify the limits of the policy and all deductibles thereunder.
ARTICLE 11: NOTICES.
11.1 NOTICE REQUIREMENTS. All notices, demands, consents, and approvals which
may or are required to be given by either party to the other under this Sublease
shall be in writing and may be given by (i) personal delivery, (ii) overnight
courier such as Federal Express, (iii) facsimile transmission, or (iv) United
States registered or certified mail addressed as shown in Article 1. Any notice
or demand so given shall be deemed to be delivered or made on (i) the date
personal service is effected, (ii) the next business day if sent by overnight
courier, (iii) the same day as given if sent by facsimile transmission which is
received by 5:00 p.m. Pacific time with a copy deposited in the United States
mail, postage prepaid, or (iv) the third business day after the same is
deposited in the United States Mail as registered or certified and addressed as
above provided with postage thereon fully prepaid. Either party hereto may
change its address at any time by giving written notice of such change to the
other party in the manner provided herein at least ten (10) calendar days prior
to the date such change is desired to be effective.
11.2 NOTICES FROM MASTER LESSOR. Each party shall provide to the other party a
copy of any notice or demand received from or delivered to Master Lessor within
twenty four (24) hours of receiving or delivering such notice or demand.
ARTICLE 12: DAMAGE, DESTRUCTION, CONDEMNATION. To the extent that the Master
Lease gives Sublessor any rights following the occurrence of any damage,
destruction or condemnation to terminate the Master Lease, to repair or restore
the Sublease Premises, to contribute toward such repair or restoration costs to
avoid termination, to obtain and utilize insurance or condemnation proceeds to
repair or restore the Sublease Premises, or any similar rights, such rights
shall be reserved to and exercisable solely by Sublessor, in its sole and
absolute discretion, and not by Sublessee. The exercise of any such right by
Sublessor shall under no circumstances constitute a default or breach under this
Sublease or subject Sublessor to any liability therefor.
ARTICLE 13: INSPECTION OF THE SUBLEASE PREMISES. Sublessee shall permit
Sublessor and its agents to enter the Sublease Premises at any reasonable time
for the purpose of inspecting the same or posting a notice of non-responsibility
for Alterations or repairs, provided that Sublessor provides at least
twenty-four (24) hours prior notice (except in the case of emergency).
ARTICLE 14: INDEMNITY; EXEMPTION OF SUBLESSOR FROM LIABILITY.
14.1 SUBLESSEE INDEMNITY. Sublessee shall indemnify, defend (with counsel
reasonably satisfactory to Sublessor), protect and hold harmless Sublessor and
its agents, employees, contractors, stockholders, officers, directors,
successors
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and assigns from and against any and all claims, demands, actions, suits,
proceedings, liabilities, obligations, losses, damages, judgments, costs,
penalties, fines, and expenses (including, but not limited to, attorneys',
consultants' and expert witness fees) (collectively, "COSTS") arising out of,
resulting from, or related to (i) any injury or death to any person or injury or
damage to property caused by, arising out of, or involving (A) Sublessee's use
of the Sublease Premises, the conduct of Sublessee's business therein, or any
activity, work or thing done, permitted or suffered by Sublessee in or about the
Sublease Premises or the common areas, (B) a breach by Sublessee in the
performance in a timely manner of any obligation of Sublessee to be performed
under this Sublease, or (C) the negligence or intentional acts of Sublessee or
Sublessee's agents, contractors, employees, subtenants, licensees, or invitees,
and/or (ii) the storage, use, generation, discharge, treatment, transportation,
release or disposal of Hazardous Material by Sublessee or its agents, employees,
invitees, visitors or contractors in, on, over, through, from, about, or beneath
the Sublease Premises or any nearby premises. This indemnity shall survive the
expiration or earlier termination of this Sublease.
14.2 SUBLESSOR INDEMNITY. Sublessor shall indemnify, defend (with counsel
reasonably satisfactory to Sublessee), protect and hold harmless Sublessee and
its agents, employees, contractors, stockholders, officers, directors,
successors and assigns from and against any and all Costs arising out of,
resulting from, or related to: (i) any injury or death to any person or injury
or damage to property caused by, arising out of, or involving: (A) the
negligence or willful misconduct of Sublessor or Sublessor's agents,
contractors, employees, subtenants, licensees, or invitees, or (B) a breach by
Sublessor in the performance in a timely manner of any obligation of Sublessor
to be performed under this Sublease, or (C) any breach of any representation or
warranty of Sublessor made under this Sublease, or (D) any breach under the
Master Lease by Sublessor, or (ii) the existence of any Hazardous Material at
the Sublease Premises prior to the Commencement Date to the extent that such
Costs are the obligation of Sublessor under terms of the Master Lease and are
not otherwise the obligation of Sublessee under the terms of Section 7 of this
Sublease, or (iii) the storage, use, generation, discharge, treatment,
transportation, release or disposal of Hazardous Material by Sublessor or its
agents, employees, invitees, visitors or contractors in, on, over, through,
from, about, or beneath the Sublease Premises or any nearby premises. This
indemnity shall survive the expiration or earlier termination of this Sublease.
14.3 SUBLESSEE WAIVER. Sublessee, as a material part of the consideration to
Sublessor, hereby assumes all risk of damage to property or injury to persons
in, upon or about the Sublease Premises arising from any cause and Sublessee
hereby waives all claims in respect thereof against Sublessor, except in
connection with damage or injury caused solely by the gross negligence or
willful misconduct of Sublessor or its authorized agents; provided, however,
that in no event shall Sublessor be liable for any loss of profits or any
special, indirect, incidental, consequential or punitive damages, however caused
and on any theory of liability. This waiver shall survive the expiration or
earlier termination of this Sublease.
14.4 MUTUAL WAIVER OF SUBROGATION. Each party (the "FIRST PARTY") hereby
releases the other party (the "SECOND PARTY"), and its partners, officers,
directors, agents, employees, and servants, from any and all claims, demands,
loss, expense, or injury to the Sublease Premises or to the furnishings,
fixtures, equipment, inventory, or other property in, about, or upon the
Sublease Premises, which is caused by or results from perils, events, or
happenings which are the subject of fire or other casualty insurance carried by
the First Party at the time of such loss or which would have been in force had
the First Party carried the insurance required hereunder or by the Master Lease
(collectively, the "EFFECTIVE COVERAGE") irrespective of any negligence on the
part of the Second Party that may have contributed to or caused such loss;
subject to the following limitations: (i) the Second Party shall not be released
from any liability to the extent that such damages are not covered by the
insurance recovery under the Effective Coverage or are the result of willful
acts by the Second Party, and (ii) the Second Party shall be responsible for
reimbursing the First Party for any deductible owed as a result of such damages
up to One Hundred Thousand Dollars ($100,000). Each party shall use commercially
reasonable efforts to obtain, if needed, appropriate endorsements to its
policies of insurance with respect to the foregoing releases; provided, however,
that failure to obtain such endorsements shall not affect the releases
hereinabove given.
ARTICLE 15: ASSIGNMENT AND SUBLETTING. Sublessee shall not voluntarily or by
operation of law assign this Sublease or enter into license or concession
agreement, sublet all or any part of the Sublease Premises, or otherwise
transfer, mortgage, pledge, hypothecate or encumber all or any part of
Sublessee's interest in this Sublease or in the
13
Sublease Premises or any part thereof, without the prior written consent of
Master Lessor (pursuant to the terms of the Master Lease) and Sublessor (which
consent shall not be unreasonably withheld or delayed). Any attempt to do so
without such consent being first had and obtained shall be wholly void and shall
constitute a default by Sublessee under this Sublease. Sublessee hereby
irrevocably assigns to Sublessor all Rent and other sums or consideration in any
form, from any subletting or assignment, and agrees that Sublessor, as assignee
and as attorney-in-fact for Sublessee, or a receiver for Sublessee appointed
upon Sublessor's application, may collect such Rent and other sums and apply the
same against amounts owing to Sublessor in the event of Sublessee's default;
provided, however, that until the occurrence of any act of default by Sublessee
or Sublessee's subtenant, Sublessee shall have the right to collect such sums,
provided that all sums in excess of the Minimum Monthly Rent set forth herein
which any subtenant covenants to pay shall belong solely and exclusively to
Sublessor. Notwithstanding any assignment or subletting, Sublessee shall not be
relieved of its obligations hereunder, and a consent to one assignment or
subletting shall not constitute a consent to any other assignment or subletting
or a waiver of the provisions of this section.
ARTICLE 16: DELIVERY OF DOCUMENTS. Sublessee shall execute and deliver any
document or other instrument required by Master Lessor or Sublessor pursuant to
the Master Lease within ten (10) days following receipt of a written request
from Master Lessor or Sublessor. Failure to comply with this provision shall
constitute a default by Sublessee under this Sublease.
ARTICLE 17: HOLDING OVER.
17.1 WITHOUT CONSENT. Any holding over by Sublessee after the Termination Date,
without the prior written consent of Master Lessor and Sublessor, shall not
constitute a renewal or extension of this Sublease or give Sublessee any rights
in or to the Sublease Premises. In the event of any such non-permissive holding
over, Sublessor and Master Lessor may seek any and all remedies available to
Sublessor and/or Master Lessor at law or in equity, and Sublessee shall pay
Sublessor upon demand, (i) and amount equal to One Hundred Seventy-Five Percent
(175%) of the most recent applicable Base Rent payable under the Master Lease,
computed on a daily basis for each day of the holdover period, plus (ii) all
other amounts due and payable under the Sublease, plus (iii) all other amounts
that Sublessor may become liable for under the Master Lease, plus (iv) any and
all other damages, costs, expenses, and fees incurred or suffered by Sublessor
as a result of such holdover by Sublessee.
17.2 WITH CONSENT. Any holding over by Sublessee after the Termination Date,
with the prior written consent of Master Lessor and Sublessor, shall be
construed as a month-to-month tenancy on the same terms and conditions as
specified in this Sublease, except that the Minimum Monthly Rent during such
tenancy shall be increased to an amount equal to One Hundred Fifty Percent
(150%) of the most recent applicable Minimum Monthly Rent payable under the
Master Lease.
ARTICLE 18: OPTIONS. Any right of Sublessor to extend or renew the term of the
Master Lease or to expand the Premises (if any), shall be reserved to and
exercisable solely by Sublessor, in its sole discretion, and not by Sublessee.
Sublessor agrees to exercise such rights to extend or renew the Master Lease
only to the extent necessary to fulfill its obligations under this Sublease.
Sublessee, in its sole discretion, shall have the right to negotiate an extended
term with the Master Lessor.
ARTICLE 19: FURNITURE. For the Sublease Term and subject to the terms of Article
14, Sublessee shall be entitled to use the furniture currently located at the
Sublease Premises, which is shown on the Final Furniture Plan attached as
EXHIBIT D (the "FURNITURE"). In the event that Sublessee requires additional
furniture, fixtures or equipment, Sublessee shall acquire such furniture,
fixtures or equipment at its sole cost and expense. Sublessee agrees to take
possession of the Furniture "AS IS", without relying on any representation or
warranty by Sublessor as to the condition of the Furniture. Sublessee further
acknowledges that neither Sublessor nor its agents have made any representations
or warranties, express or implied, as to the suitability or fitness of the
Furniture for the conduct of Sublessee's business or for any other purpose.
Sublessee agrees, at its sole cost and expense, to 1) insure the Furniture (or
provide Sublessor with evidence of adequate self-insurance); and, 2) maintain
the Furniture in the same condition
14
and repair, allowing for reasonable wear and tear. In the event that the
Furniture is damaged during the Sublease Term, Sublessor shall be under no
obligation to service, maintain, repair or replace the damaged Furniture. Any
installations, replacements, and substitutions of parts or accessories with
respect to any of the Furniture shall be paid for by Sublessee and shall
constitute accessions and shall become part of the Furniture and shall be the
property of Sublessor. The Furniture shall remain at all times the property of
Sublessor, and shall be used by Sublessee during the Sublease Term free of
charge. Upon the expiration or earlier termination of this Sublease, Sublessee
shall return the Furniture in the same configuration, condition and repair as
the Furniture was delivered to Sublessee, excepting only ordinary wear and tear;
provided, however, that the configuration may be changed if Sublessor agrees to
such change in writing, in Sublessor's sole discretion.
The Furniture will be delivered to Sublessee in the configuration shown on
the Final Furniture Plan, except that if Sublessee notifies Sublessor of changes
needed to such configuration prior to the commencement of Sublessee's
reconfiguration by Sublessor's contractor, and such needed changes do not
increase the estimated cost of such reconfiguration, Sublessor shall endeavor to
incorporate the requested changes into the Final Furniture Plan which shall then
be modified/confirmed with the Commencement Date Memorandum.
ARTICLE 20: INFORMATION SERVICES. Subject to the terms and conditions of the
Information Services Agreement (attached hereto as EXHIBIT E and incorporated
herein by this reference), Sublessor shall provide to Sublessee telephone
infrastructure and support. The cost of such service shall be payable by
Sublessee to Sublessor as Additional Rent in accordance with Article 5.
ARTICLE 21: ADDITIONAL SERVICES.
21.1 AMENITY AGREEMENTS. Sublessee and its employees shall have the right to
use the fitness center and cafeteria pursuant to the terms and conditions of a
separate license agreement.
21.2 OTHER AMENITIES. As an accommodation to Sublessee, Sublessee and its
employees shall be entitled to utilize oil change facilities, ATM machines, dry
cleaning services, film developing, and any other services specifically
identified by Sublessor as being available to Sublessee, subject to such terms
and conditions as Sublessor may establish from time to time, and further subject
to Sublessor's right, at Sublessor's sole discretion, to cancel any of such
services or modify the terms and conditions thereof at any time.
ARTICLE 22: SIGNAGE. Subject to Section 21 of the Master Lease and to the prior
approval of Sublessor (which approval shall not be unreasonably withheld or
delayed), Master Lessor and all applicable governmental agencies, Sublessee
shall have the right to place a sign on the building and the monument near the
front entrance and on any directory signs for the complex of which the Sublease
Premises is a part.
ARTICLE 23: PARKING. Subject to the terms of the Master Lease and such
reasonable rules and regulations that may be promulgated by Master Lessor and/or
Sublessor from time to time, Sublessee shall have the non-exclusive right in
common with other tenants and occupants to use, free of a monthly fee during the
Sublease Term, fifty-four (54) parking spaces.
ARTICLE 24: ARBITRATION.
24.1 PROCEDURE. If a dispute under this Sublease (other than a dispute relating
to Sublessee's nonpayment of Rent) is in an amount less than Twenty Thousand
Dollars ($20,000.00) and is not resolved by the parties within any applicable
grace period or time to cure provided in this Sublease, either party may give
notice to the other of its desire to arbitrate the dispute, in which event the
dispute shall be settled by binding arbitration by the American Arbitration
Association in accord with its then-prevailing rules. The arbitration hearing
shall be held in the County of Santa Clara, California. Judgment upon the
arbitration award may be entered in any court having jurisdiction. The
arbitrators shall have no power to change the Sublease provisions. Both parties
shall continue performing their
15
Sublease obligations pending the award in the arbitration proceeding. The
arbitrators shall award the prevailing party reasonable expenses and costs,
including reasonable attorneys' fees, plus interest on the amount due at the
Interest Rate. This agreement to arbitrate shall not apply to any action for
unlawful detainer (eviction) that Sublessor may bring under applicable
California law.
24.2 PAYMENT. The losing party shall pay to the prevailing party the amount of
the final arbitration award. If payment is not made within ten (10) business
days after the date of the arbitration award, then, in addition to any remedies
under the law: (a) If Sublessor is the prevailing party, it shall have the same
remedies as it has in the event of a breach under the Sublease; (b) If Sublessee
is the prevailing party, it may deduct any remaining unpaid award from its
monthly payment of Minimum Monthly Rent, Additional Rent, or other charges
otherwise due Sublessor.
ARTICLE 25: GENERAL PROVISIONS.
25.1 SEVERABILITY. If any term or provision of this Sublease shall, to any
extent, be determined by a court of competent jurisdiction to be invalid or
unenforceable, the remainder of this Sublease shall not be affected thereby, and
each term and provision of this Sublease shall be valid and enforceable to the
fullest extent permitted by law.
25.2 ATTORNEYS' FEES; COSTS OF SUIT. If Sublessee or Sublessor shall bring any
action or proceeding for any relief against the other, declaratory or otherwise,
arising out of this Sublease, including any suit by Sublessor for the recovery
of Rent or possession of the Sublease Premises, the prevailing party shall be
entitled to recover its reasonable attorneys' fees and costs.
25.3 WAIVER. No covenant, term or condition or the breach thereof shall be
deemed waived, except by written consent of the party against whom the waiver is
claimed, and any waiver of the breach of any covenant, term or condition shall
not be deemed to be a waiver of any other covenant, term or condition or any
subsequent failure to perform the same or any other such term, covenant or
condition. Acceptance by Sublessor of any performance by Sublessee after the
time the same shall have become due shall not constitute a waiver by Sublessor
of the breach or default of any covenant, term or condition unless otherwise
expressly agreed to by Sublessor in writing.
25.4 BROKERAGE COMMISSIONS. The parties represent and warrant to each other that
they have dealt with no brokers, finders, agents or other person in connection
with the transaction contemplated hereby to whom a brokerage or other commission
or fee may be payable, except for the brokers named in Article 1, whose fees
shall be paid pursuant to a separate agreement. Each party shall indemnify,
defend and hold the other harmless from any claims arising from any breach by
the indemnifying party of the representation and warranty set forth in this
Article 25.4. Pursuant to separate written agreements, Sublessor shall be
responsible for the payment of a commission to Sublessor's broker in connection
with this Sublease, and Sublessor's broker shall be responsible for any
commission or fee payable to Sublessee's broker. Neither Sublessor nor Sublessee
shall have any responsibility for payment of a commission to Sublessee's broker.
25.5 SUBLESSOR'S KNOWLEDGE. As used in this Sublease, the term "SUBLESSOR'S
KNOWLEDGE" or words of similar import shall mean the actual current knowledge of
Robert W. Kraiss and/or Catherine Eckerman, without the duty of further
investigation or inquiry with respect to the matter to which such actual
knowledge pertains; provided, however, in no event shall this Sublease give rise
to any personal obligation, liability or duty on the part of Robert W. Kraiss
and/or Catherine Eckerman, or any other trustee, officer, director, agent,
representative or employee of Sublessor. Neither Robert W. Kraiss nor Catherine
Eckerman shall be charged with constructive or inquiry notice or knowledge, or
imputed knowledge of any agents, contractors, or employees.
25.6 BINDING EFFECT. Preparation of this Sublease by Sublessor or Sublessor's
agent and submission of the same to Sublessee shall not be deemed an offer to
lease. This Sublease shall become binding upon Sublessor and Sublessee only when
fully executed by Sublessor and Sublessee. Sublessor and Sublessee acknowledge
and agree that this Sublease is expressly conditioned upon obtaining the consent
of Master Lessor hereto following such full execution by Sublessor
16
and Sublessee. In the event such consent is not so obtained within thirty-one
(31) days following the date of this Sublease, then this Sublease shall, upon
written notice by either party to the other, terminate and be without further
force or effect, and in such event Sublessor shall promptly return to Sublessee
the advance rent and Security Deposit paid by Sublessee to Sublessor pursuant to
Article 5.6 above.
25.7 ENTIRE AGREEMENT. This instrument, along with any exhibits and addenda
hereto, constitutes the entire agreement between Sublessor and Sublessee
relative to the Sublease Premises. This Sublease may be altered, amended or
revoked only by an instrument in writing signed by both Sublessor and Sublessee.
There are no oral agreements or representations between the parties affecting
this Sublease, and this Sublease supersedes and cancels any and all previous
negotiations, arrangements, brochures, agreements, representations and
understandings, if any, between the parties hereto.
25.8 COVENANT OF QUIET ENJOYMENT. Sublessor covenants with Sublessee that, so
long as Sublessor has not terminated this Sublease due to Sublessee's default,
Sublessee shall be entitled to possession of the Sublease Premises for the
Sublease Term, in accordance with and subject to the terms of this Sublease.
25.9 EXECUTION. This Sublease may be executed in one or more counterparts, each
of which shall be considered an original counterpart, and all of which together
shall constitute one and the same instrument. Each person executing this
Sublease represents that the execution of this Sublease has been duly authorized
by the party on whose behalf the person is executing this Sublease.
25.10 RULES AND REGULATIONS. Sublessee shall comply with the Rules and
Regulations attached to this Sublease as EXHIBIT F, and such amendments,
changes, or supplements thereto that may be promulgated by Sublessor from time
to time.
Sublessor: Sublessee:
ADAPTEC, INC., PCTEL, INC.,
a Delaware corporation a Delaware corporation
By: /s/ Robert W. Kraiss By: /s/ John W. Schoen
-------------------------------- --------------------------
Name: Robert W. Kraiss Name: John W. Schoen
-------------------------------- --------------------------
Title: Director of Corporate Facilities Title: COO/CFO
and Real Estate
By:
--------------------------
Name:
--------------------------
Title: Secretary or Treasurer
(circle one)
17
EXHIBIT A
COPY OF MASTER LEASE
[TO BE ATTACHED]
EXHIBIT B
SUBLESSEE IMPROVEMENT PLAN
[TO BE ATTACHED]
EXHIBIT C
COMMENCEMENT DATE MEMORANDUM
Sublessor: ADAPTEC, INC., a Delaware corporation
Sublessee: PCTEL, INC., a Delaware corporation
Sublease Premises: 631 South Milpitas Boulevard, Milpitas, California
For the Sublease dated November 5, 2002, the undersigned hereby certifies:
I. That the undersigned Sublessee occupies the above-described Sublease
Premises consisting of approximately 18,072 square feet.
II. That the initial Sublease term commenced on January 24, 2003, and will
terminate on September 16, 2007.
III. That Sublessee's obligation to pay monthly Minimum Monthly Rent in the
amount of $18,614.16 commenced or will commence on March 1, 2003.
IV. That a security deposit of $ 0 been paid by Sublessee to Sublessor.
V. That all Sublessee Improvements to be completed by Sublessor are complete
and have been accepted by Sublessee.
VI. That in the event that Sublessee exercises its Termination Right under
Article 4.4 of the Sublease, as of the required notice date, the
unamortized cost of the Sublessee Improvements shall be $$46,696.04 (18.5
months @ $2,524.11/month) and the unamortized Brokerage Commission shall
be $27,546.13 (18.5 months @ $1,488.98).
VII. That the Final Furniture Plan has/has not been amended and attached
pursuant to paragraph 20 of the Sublease.
Sublessor: Sublessee:
ADAPTEC, INC., PCTEL, INC.,
a Delaware corporation a Delaware corporation
By: /s/ Robert W. Kraiss By: /s/ John W. Schoen
------------------------------- -------------------------------
Name: Robert W. Kraiss Name: John W. Schoen
Title: Director of Corporate Facilities Title: Chief Operating Officer and
and Real Estate Chief Financial Officer
Date: February 3, 2003 Date: March 10, 2003
------------------------------- -------------------------------
EXHIBIT D
FINAL FURNITURE PLAN
[TO BE ATTACHED]
EXHIBIT E
INFORMATION SERVICES AGREEMENT
[TO BE ATTACHED]
EXHIBIT F
RULES AND REGULATIONS
1. No sign, placard, picture, advertisement, name or notice shall be inscribed,
displayed, or printed or affixed on or to any part of the outside or inside
common area of the Building without the written consent of Landlord first had
and obtained and Landlord shall have the right to remove any such sign, placard,
picture, advertisement, name or notice without notice to and at the expense of
Tenant.
All approved signs or lettering on doors shall be printed, painted,
affixed or inscribed at the expense of Tenant by a person approved of by
Landlord.
Tenant shall not place anything or allow anything to be placed near the
glass of any window, door, partition or wall which may appear unsightly from
outside the Premises, provided, however, that Landlord may furnish and install a
Building standard window covering at all exterior windows. Tenant shall not
without prior written consent of Landlord cause or otherwise sunscreen any
window.
2. The sidewalks, halls, passages, exits, entrances, elevators and stairways
shall not be obstructed by any of the tenants or used by them for any purpose
other than for ingress and egress from their respective premises.
3. Tenant shall not alter any lock or install any new or additional locks
outside tenant suite or any bolts on any doors or windows of the Premises.
4. The toilet rooms, urinals, wash bowls and other apparatus shall not be used
for any purpose other than that for which they were constructed and no foreign
substance of any kind whatsoever shall be thrown therein and the expense of any
breakage, stoppage or damage resulting from the violation of this rule shall be
borne by Tenant who, or whose employees or invitees shall have caused it.
5. Tenant shall not disturb, solicit, or canvass any occupant of the Building
and shall cooperate to prevent the same.
6. Landlord shall have the right to control and operate the public portions of
the Building, and the public facilities, and heating and air conditioning, as
well as facilities furnished for the common use of the tenants, in such manner
as it deems best for the benefit of the tenants generally.
7. Landlord shall clean the Premises as provided in the Lease, and except with
the written consent of Landlord, no person or persons other than those approved
by Landlord will be permitted to enter the Building for such purposes. Tenant
shall not cause unnecessary labor by reason of Tenant's carelessness and
indifference in the preservation of good order and cleanliness. All cardboard
boxes must be "broken down", and all styrofoam chips must be bagged or otherwise
contained so as not to constitute a nuisance. Landlord shall have no
responsibility whatsoever for the theft of or damage to any property of Tenant
or its employees resulting from any acts or omissions of janitorial personnel,
and Tenant hereby waives any and all claims against Landlord therefor.
8. Landlord shall not be responsible to Tenant or to any other person for the
violation of these or other rules and regulations by any other tenant or other
person. Tenant shall be deemed to have read these Rules and Regulations and to
have agreed to abide by them as a condition precedent, waivable only by
Landlord, to Tenant's occupancy of the Premises.
9. Business machines and mechanical equipment belonging to Tenant which cause
noise or vibration that may be transmitted to the structure of the Building, to
such a degree as to be reasonably objectionable to Landlord or other tenants,
shall be placed and maintained by Tenant, at Tenant's expense, on vibration
eliminators or in noise-dampening housing or other devices sufficient to
eliminate
noise or vibration.
10. All goods, including material used to store goods, delivered to the Premises
of Tenant shall be immediately moved into the Premises and shall not be left in
parking or receiving areas overnight.
11. Except to the extent (if any) that trash removal is provided by Landlord as
part of Common Area maintenance services, Tenant is responsible for the storage
and removal of all trash and refuse. All such trash and refuse shall be
contained in suitable receptacles at locations approved by Landlord.
12. Tenant shall not store or permit the storage or placement of goods or
merchandise in or around the common areas surrounding the Premises. No displays
or sales of merchandise shall be allowed in the parking lots or other common
areas.
13. Tenant shall not permit any animals, including but not limited to, any
household pets, to be brought or kept in or about the Premises, the Building,
the Complex or any of the Common Areas, except for seeing-eye animals.
14. Tenant shall not obstruct sidewalks, entrances, passages, corridors,
vestibules, halls, or stairways in and about the Complex which are used in
common with other tenants, and which are not a part of the Premises of Tenant.
Tenant shall not place objects against glass partitions or doors or windows
which would be unsightly from the Building corridors or from the exterior of the
Complex and will promptly remove any such objects upon notice from Landlord.
15. Tenant shall not waste electricity, water or air conditioning furnished by
Landlord, if any, and shall cooperate fully with Landlord to insure the most
effective operation of the Project's heating and air conditioning systems
consistent with Tenant's business operations as permitted by the Lease.
16. Tenant assumes full responsibility for protecting its space from theft,
robbery and pilferage, which includes keeping doors locked and other means of
entry to the Premises closed and secured after normal business hours.
17. The Premises shall not be used for cooking (as opposed to heating of food),
lodging, sleeping or for any immoral or illegal purpose.
18. Tenant shall observe faithfully and comply strictly with the foregoing rules
and regulations and such other and further appropriately reasonable rules and
regulations as Landlord or Landlord's agent may from time to time adopt;
provided, however, that in the event of any inconsistency or conflict between
the rules and regulations and provisions of the Lease, the latter shall control.
Reasonable notice of any additional rules and regulations shall be given in such
manner as Landlord may reasonably elect.
19. No electric circuits for any purpose shall be brought into the Premises
without Landlord's written permission specifying the manner in which same may be
done. Tenant shall not overload any utilities serving the Premises.
20. Wherever in these Rules and Regulations the word "Tenant" occurs, it is
understood and agreed that it shall mean Tenant's associates, employees,
contractors, agents, subtenants, and licensees. Wherever the word "Landlord"
occurs, it is understood and agreed that it shall mean Landlord's assigns,
employees, contractors, and agents.
21. Tenant shall, when using the common parking facilities in and around the
Complex, observe and obey all signs regarding fire lanes and no parking zones,
and when parking shall always park between the designated lines. Landlord
reserves the right to tow away, at the expense of the owner, any vehicle which
is improperly parked or parked in a no parking zone. All vehicles shall be
parked at the sole risk of the owner, and Landlord assumes no responsibility for
any damage to or loss of vehicles.
22. In case of invasion, mob, riot, public excitement, or other commotion,
Landlord reserves the right to prevent access to the Complex during the
continuance of the same by closing the doors or otherwise, for the safety of the
tenants or the protection of the Project and the property therein. Landlord
shall in no case be liable for damages for any error or other action taken with
regard to the admission to or exclusion from the Complex of any person.
INFORMATION SERVICES AGREEMENT
This Information Services Agreement ("AGREEMENT") is made pursuant to
and is incorporated into that certain Sublease Agreement ("SUBLEASE") dated
November 5, 2002 ("SUBLEASE"), by and between Adaptec, Inc., as "SUBLESSOR", and
PCTEL, Inc., as "SUBLESSEE", for certain Premises containing approximately
18,072 leasable square feet located at 631 So. Milpitas Blvd., Milpitas,
California. Any terms used in this Agreement that are not otherwise defined
shall have the same meaning as in the Sublease. The provisions of this Agreement
shall supersede any inconsistent or conflicting provisions of the Sublease. In
consideration of the mutual covenants contained in this Agreement and in the
Sublease, Sublessor and Sublessee hereby agree as follows:
1. TELEPHONE SERVICES.
Sublessor shall provide Sublessee with telephone services as noted herein
through the Sublease Term. Telephone Services shall be defined as the Initial
Installation (hereinafter defined), and ongoing maintenance, troubleshooting and
system repair for up to 100 Direct in Dial ("DID") lines.
a. Equipment Sublessee shall provide all desktop/wall mounted
telephone units to be installed within the Premises (the "Telephone Units") and
Sublessor shall install such Telephone Units within the Sublease Premises,
provided, however, that such Telephone Units are compatible with Sublessor's
existing infrastructure and phone switch and no upgrades/modifications are
required to Sublessor's infrastructure and/or phone switch to ensure
functionality of the Telephone Units. Sublessee shall confirm the functionality
of the Telephone Units prior to the Initial Installation by Sublessor and place
each of the Telephone Units in the cube/office where it should be installed.
Sublessee shall be responsible for contracting for, ordering and
paying any and all costs associated with the provision of DSL, T1, ISDN and 1MB
connectivity to the DEMARC which is located in the common electrical room within
the building the Sublease Premises are located in. Access to the DEMARC shall be
requested through and escorted by Sublessor's Telecom Staff. Sublessee shall be
responsible for any and all ongoing maintenance and support (and charges for
same) of these services.
b. Initial Installation. The Initial Installation shall be deemed to
include: 1) connecting each phone unit to the jack within the cubicle/office; 2)
building the set within Sublessor's phone switch; 3) creating each voice mail
box in Sublessor's voice mail system; 4) installation of 13 analog lines on
existing B ports (within the engineering pod of cubes); and, 5) testing and
troubleshooting throughout. The specifics required to complete the Initial
Installation (i.e. name, and location of each employee), must be submitted by
Sublessee, no later than three (3) weeks prior the date the Initial Installation
is required to be complete. Initial Installation will be performed by
Sublessor's Telecom Staff at no charge to Sublessee and is not considered part
of the Sublessee Improvements as defined in the Sublease; provided, however,
that if through no fault of Sublessee the Initial Installation work is not
completed within ten (10) Business Days following the Substantial Completion of
the Sublessee Improvements, and as a result thereof Sublessee is delayed in
commencing business operations within the Sublease Premises, then the
Commencement Date and Rent Commencement Date will be delayed by one day for each
day of such delay, but the Termination Date shall not be extended. Any delay due
to Sublessee's failure to timely provide the required information to complete
the Initial Installation shall not affect the Commencement Date or Rent
Commencement Date of the Sublease.
INFORMATION SERVICES AGREEMENT - PAGE 1
c. Telephone Lines. Each telephone line will come with one (1) DID
number, and one (1) voice mailbox. Each voice mailbox will have a 25-message
capacity that can be retained for thirty (30) days. Analog lines (i.e. modems,
faxes) will not have voice mail capabilities.
d. Calling Services and Charges. Calling Services provided by
Sublessor shall include; 1) local calls at no charge to Sublessee; 2) long
distance calls billed at six cents ($.06) per minute for calls within the
continental United States; 3) international calls billed at Sublessor's contract
rate; 4) port usage, phone switch connectivity, voicemail and Call Data
Reporting ("CDR"), all of which shall be billed at four ($4.00) dollars per
port, per month.
Upon Sublessee's written request, accompanied by an executed
Non-Disclosure Agreement in a form acceptable to Sublessor, Sublessor shall
provide a contract rate sheet reflecting Sublessor's then current contract rates
for international long distance.
e. Moves, Adds or Changes. Any Moves, Adds or Changes ("MAC") must
be requested by Sublessee in writing or e-mail. Sublessee will be charged for
required parts, if any, at Sublessor's cost. Sublessee may, upon Sublessor's
prior written approval, use an outside Telco contractor for work within the
Premises. Access to Sublessor's Telecommunications room (which houses the master
telco system for the campus) will not be permitted. Any telecom issues affecting
the Sublease Premises that are caused by Sublessee or Sublessee's contractor and
require Sublessor's Telecom Staff assistance will be chargeable at the rates
specified in paragraph 3 of this Agreement. If outside services are needed (new
cables, etc.) the repair/install time will be negotiated between the Sublessee
and Sublessor's IS Telecom staff.
If for any reason the Sublease is terminated prior to the expiration
of the Sublease Term, including, but not limited to Sublessee's election to
exercise its One-Time Right To Terminate pursuant to paragraph 4.4 of the
Sublease, Sublessee shall prior to vacating the Sublease Premises, return the
connectivity within the telecom room of the Sublease Premises to its original
condition, at its sole cost and expense.
2. TECHNICAL SUPPORT.
a. Support. Upon Sublessee's request, Sublessor shall provide
Sublessee with telecom support between the hours of 7:00 a.m. and 5:00 p.m.
Pacific Time on Business Days. Sublessee may request telecom support via E-Mail
at adaptec telecom@adaptec.com. Sublessor's IS Telecom staff will respond within
one Business Day to define a resolution to the problem. If outside services are
required (new cables, contractor/service provider support, etc.), then at
Sublessee's request, prior to contracting for the services, Sublessor shall
provide Sublessee with an estimate from the vendor of the repair/install time
charges and parts charges (and any other applicable terms per the vendor
agreement), and obtain Sublessee's written consent thereto. Whether or not
Sublessee elects to obtain an estimate prior to the work being done, Sublessor
shall bill Sublessee only for Sublessor's actual costs and expenses incurred as
a result of such outside services, without any surcharge by Sublessor.
b. After-Hours Support. Sublessee may call Sublessor's security
contractor at (408) 957-2521 or extension 2521 (internal) for emergency services
required during non-business hours. Sublessor IS Telecom staff will endeavor to
respond within four (4) hours of receipt of the call from Sublessor's security
contractor.
INFORMATION SERVICES AGREEMENT - PAGE 2
c. Costs. Technical Support shall be chargeable at the rates
specified in paragraph 3 of this Agreement.
3. CHARGES/BILLING.
a. Billing. All charges pertaining to this Agreement shall be paid
by Sublessee to Sublessor as Additional Rent. Billing will be generated within
10 Business Days at the beginning of each month, which amount shall be paid by
Sublessee to Sublessor with the next month's Rent coming due.
b. Charges. Telephone Services (including but not limited to MACs)
and Technical support charges shall be determined by the amount of time required
for the work to be done. If Sublessee does not request Sublessor to complete the
work within two (2) Business Days, the charge shall be $75.00 per hour, which
charges will be billed in fifteen (15) minute increments. If Sublessee requests
the work to be done on a rush basis (i.e. within two (2) Business Days), the
charge shall be $100.00 per hour, with a minimum of one (1) hour charge and time
in excess of one (1) hour charged in fifteen (15) minute increments. If
Sublessor's work requires an outside vendor to be called, those charges shall be
paid by Sublessee.
Sublessor reserves the right to renegotiate long distance and other
telecommunication services, contracts and/or change Telephone Services providers
at its sole and absolute discretion and will notify Sublessee in writing of any
contract changes that affect the billing rates for outside vendors referenced in
this Agreement.
4. LIMITATION OF LIABILITY.
a. No Representation or Warranty. Sublessor has made no
representations or warranties regarding the condition or suitability of
Sublessor's Telephone Lines or Services, and Sublessee accepts the same in their
current condition.
b. No Liability For Interruption of Services. The services described
herein shall be provided by Sublessor in accordance with Sublessor's typical
practices and standards in Sublessor's sole determination. In accepting
Sublessor's agreement to provide such services, Sublessee expressly acknowledges
that there is a possibility of error or malfunction in any or all of the same,
and agrees that Sublessee is fully assuming all risks associated with
Sublessee's use or dependence on such services, and Sublessee hereby waives all
claims in respect thereof, except for the gross negligence or intentional
misconduct of Sublessor or its agents, contractors or employees.
c. Limitation Regarding Consequential Damages. Notwithstanding any
provision in the Sublease to the contrary, neither party shall be liable to the
other nor to any other person, firm or entity for incidental, indirect, special,
consequential, punitive or reliance damages of any nature whatsoever regardless
of the foreseeability thereof (including, but not limited to, any claim from any
client, customer, third party or patron for loss of services, lost profits or
lost revenues) arising under or in connection with the this Agreement, or
arising out of any act or omission by either Sublessor or Sublessee, or their
respective employees, consultants, servants or agents whether based on breach of
contract, breach of warranty, negligence or any other theory of liability.
5. BUSINESS DAYS. As used herein, Business Days shall be defined as those
days that Sublessor's Milpitas campus employees are required to work. Sublessee
acknowledges that
INFORMATION SERVICES AGREEMENT - PAGE 3
Sublessor may elect to "shut-down" its operations for the entire company on days
that are not typically observed holiday days, such as during the weeks of July
4th and Thanksgiving. Sublessor will make every reasonable effort to notify
Sublessee in advance of any "extended closures of operations" and to accommodate
any and all requests for service made by Sublessee. Requests that occur on non
Business Days should follow the process for emergency and after-hours requests
and will be responded to accordingly.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
respective dates set forth below.
(Sublessor)
By:
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Title:
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Date Signed:
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(Sublessee)
By:
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Title:
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Date Signed:
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INFORMATION SERVICES AGREEMENT - PAGE 4