EXHIBIT 10.16
LANDLORD'S CONSENT TO ASSIGNMENT OF LEASE
OF PREMISES AT 380 PORTAGE AVENUE, PALO ALTO, CALIFORNIA
EL CAMINO CENTER, A CALIFORNIA LIMITED PARTNERSHIP, as Landlord under the
Lease attached hereto and made a part hereof as Exhibit A, consents to the
Assignment of the Lease by TELLME NETWORKS, INC., Assignor, to BILL GROSS'
IDEALAB!, Assignee, and, contingent upon the execution of the Assignment And
Assumption of Lease Agreement dated of even date herewith by Assignor and
Assignee, a copy of which Agreement is attached hereto as Exhibit B, fully and
completely releases Assignor from any and all liability of Assignor for any and
all acts or omissions, liabilities or obligations arising from and after the
Effective Date of the Assignment. Assignee acknowledges that pursuant to
Paragraph 42 of said Lease, in signing this Consent, Landlord has relied upon
the completeness and accuracy of the financial information provided to Landlord
by Assignee, although Landlord acknowledges that its release of Assignor shall
be fully effective notwithstanding any such reliance. Landlord further waives
the requirement to augment the Security Deposit by the Letter of Credit or
Certificate of Deposit as set forth in Paragraph 4 of said Lease.
"Landlord"
EL CAMINO CENTER,
A CALIFORNIA LIMITED PARTNERSHIP
By: /s/ RICHARD M. JACOBSEN
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RICHARD M. JACOBSEN, PARTNER
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[Print Name]
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ASSIGNMENT AND ASSUMPTION OF LEASE AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION OF LEASE AGREEMENT (this "Assignment") is dated
as of January 7, 2000 by and between TELLME NETWORKS, INC., a Delaware
corporation ("Assignor") and BILL GROSS' IDEALAB!, a California corporation
("Assignee").
WHEREAS, Assignor is Tenant under that certain Office Lease dated October 12,
1999 (the "Lease"), between El Camino Center, a California limited partnership
("Landlord"), and Assignor, as Tenant, for approximately 22,167 rentable square
feet in that certain building (the "Premises") located at 380 Portage Avenue,
California; and
WHEREAS, Assignor desires to assign its interest in the Lease to Assignee and
Assignee desires to assume Assignor's obligations under the Lease.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Assignor and Assignee agree as follows:
1. EFFECTIVE DATE OF ASSIGNMENT. This assignment contained in this Assignment
shall take effect on January 15, 2000 (the "Effective Date"). Assignor shall
give possession of the Premises to Assignee on that date.
2. ASSIGNMENT OF LEASE. Assignor does hereby transfer, assign, convey and
deliver to Assignee its entire right, title and interest in the Lease and the
Premises. Assignor hereby agrees to indemnify Assignee against and hold Assignee
harmless from any and all cost, liability, loss, damage or expense, including,
without limitation, attorneys' fees, arising out of Assignor's breach of the
Lease prior to the Effective Date.
3. ASSUMPTION OF OBLIGATIONS. Assignee does hereby accept this assignment and,
for the benefit of Assignor and Landlord, expressly assumes and agrees to
hereafter perform all of the terms, covenants, conditions and obligations of
Assignor under the Lease. Assignee hereby agrees to indemnify Assignor against
and hold Assignor harmless from any and all cost, liability, loss, damage or
expense, including, without limitation, attorneys' fees, arising out of or
relating to events occurring after the Effective Date and arising out of
Assignee's obligations as tenant under the Lease or Assignee's breach of the
Lease. If Assignee breaches its obligations under the Lease and (i) Assignor
pays rent to Landlord; and/or (2) fulfills any of Assignee's other obligations
in order to prevent Assignee from being in default, Assignee immediately shall
reimburse Assignor for the amount of rent or costs expended by Assignor together
with interest on those sums at the highest rate allowed by law.
4. SECURITY DEPOSIT. The parties acknowledge that Landlord currently holds a
security deposit in the amount of $50,000.00 (the "Security Deposit") pursuant
to the terms of the Lease. Upon execution of this Assignment, Assignee agrees to
pay Assignor in cash the amount of the Security Deposit and upon such payment,
Assignor shall
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release all claims to the Security Deposit, which thereafter will be held by
Landlord for the benefit of Assignee, subject to the provisions of the Lease.
5. ASSIGNMENT REIMBURSEMENT. Upon execution of this Assignment, Assignee agrees
to reimburse Assignor in cash the amount of $34,294.98 for the following costs,
fees, and expenses paid by Assignor:
A. Ninth Month's Rent (prepaid): $24,383.70
B. Design Fees: $9,335.00
C. Tax Reimbursement: $576.28
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Total: $34,294.98
6. BROKERAGE COMMISSIONS. Upon execution of this Assignment, Assignee agrees to
pay a commission to Cornish & Carey Commercial in the amount of Two Hundred Five
Thousand Three Hundred Thirty-three and 76/100 Dollars ($205,333.76). Neither
Assignor nor Landlord shall have any obligation to pay commissions to any real
estate broker in connection with this transaction.
7. CONTINGENCY. Notwithstanding anything to the contrary herein, this Assignment
shall be contingent upon the unconditional written consent of Landlord,
including full and complete release of Assignor from all liability satisfactory
to Assignor, which shall be received by the parties no later than the Effective
Date.
8. SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure to the benefit of
the parties hereto and their respective successors and assigns.
9. ENFORCEMENT BY LANDLORD. Landlord is a third party beneficiary of this
Assignment. As such, the provisions of this Assignment inure to the benefit of,
and are enforceable by, Landlord.
10. COUNTERPARTS. This Agreement may be executed in multiple counterparts, each
of which shall be deemed an original.
11. ATTORNEY'S FEES. If there is any legal or arbitration action or proceeding
between the parties to enforce any provision of this Assignment or to protect or
establish any right or remedy of any of the parties, the unsuccessful party to
such action or proceeding will pay to the prevailing party all costs and
expenses, including reasonable attorney's fees incurred by such prevailing party
in such action or proceeding and in any appearance in connection therewith, and
if such prevailing party recovers a judgment in any such action, proceeding or
appeal, such costs, expenses and attorney's fees will be determined by the court
or arbitration panel handling the proceeding and will be included in and as a
part of such judgment.
12. NOTICES. Any notices or other communications required or permitted under
this Agreement will be in writing and either served personally or sent by
prepaid, first-class
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mail and addressed to the other party at the address set forth below. Either
party may change its address by notifying the other party of the change of
address.
13. REPRESENTATION OF ASSIGNOR. Assignor holds all of the right, title and
interest of Tenant under the Lease and has the complete and unrestricted power
and the unqualified right to assign the Lease to Assignee, subject to consent of
Landlord.
ASSIGNOR:
TELLME NETWORKS, INC., a Delaware
corporation
By: /s/ J. W. PITTS, III
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Name: J.W. PITTS, III
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Its: VICE PRESIDENT
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ADDRESS:
977 Commercial Street
Palo Alto, California 94303
Fax: 650-815-0291
ASSIGNEE:
BILL GROSS' IDEALAB!, a California
corporation
By: /s/ BRIAN A.C. STEEL
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Name: BRIAN A.C. STEEL
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Its: Managing Director &
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Chief Operating Officer
ADDRESS:
idealab!
501 Macara Avenue
Sunnyvale, California 94086
3.
LEASE AGREEMENT
This Lease, made this 12TH day of October, 1999 between the El Camino
Center, a California Limited Partnership, hereinafter called Landlord, and
TELLME NETWORKS, INC., A DELAWARE CORPORATION, hereinafter called Tenant.
WITNESSETH:
Landlord hereby leases to Tenant and Tenant hereby hires and takes from
Landlord those certain premises (the "Premises") more particularly described as
follows: Approximately 18,550 square feet of enclosed warehouse and 3,617 square
feet of roofed and fenced open area as outlined in red on Exhibit "A", attached
hereto and incorporated herein by this reference thereto. Premises are further
identified as:
380 Portage Avenue, Palo Alto, Santa Clara County, California
As used herein the Complex shall mean and include all of the land outlined in
red and described in Exhibit "B", attached hereto, and all of the buildings,
improvements, fixtures and equipment now or hereafter situated on said land.
Said letting and hiring is upon and subject to the terms, covenants and
conditions hereinafter set forth and Tenant covenants as a material part of the
consideration for this Lease to perform and observe each and all of said terms,
covenants and conditions. This Lease is made upon the conditions of such
performance and observance.
1. USE Landlord hereby discloses to Tenant and Tenant hereby acknowledges that
the prior use of the Premises was for warehousing and distribution, and that any
change in use is subject to the approval of the City of Palo Alto. Landlord is
in the process of obtaining approval from the City of Palo Alto to allow the
Premises to be used for software development and other similar uses. This Lease
is specifically conditioned upon Landlord's obtaining approval from the City of
Palo Alto, by November 1, 1999, for a use of the Premises that will allow Tenant
to conduct Tenant's intended business. Landlord shall deliver to Tenant a copy
of all documents issued by the City of Palo Alto to Landlord which indicate the
City of Palo Alto's approval. In the event Landlord is unable to obtain the City
of Palo Alto's approval for the proposed change in use by November 1, 1999, this
Lease shall be void and of no force and effect between the parties and neither
Landlord nor Tenant shall be liable to one another for having entered into this
Lease and Landlord shall return to Tenant any security deposit and Letter of
Credit (if so received). Tenant shall use the Premises only in conformance with
applicable governmental laws, regulations, rules and ordinances and shall
conform to any specific guidelines as issued by the City of Palo Alto. Tenant
shall not do or permit to be done in or about the Premises or the Complex nor
bring or keep or permit to be brought or kept in or about the Premises or the
Complex anything which is prohibited by or will in any way increase the existing
rate of (or otherwise affect) fire or any insurance covering the Complex or any
part thereof, or any of its contents, or will cause a cancellation of any
insurance covering the Complex or any part thereof, or any of its contents.
Tenant shall not do or permit to be done anything in, on or about the Premises
or the Complex which will in any way obstruct or interfere with the rights of
other tenants or occupants of the Complex or injure or annoy them, or use or
allow the Premises to be used for any improper, immoral, unlawful or
objectionable purpose, nor shall Tenant cause, maintain or permit any nuisance
in, on or about the Premises or the Complex. No physical sale by auction shall
be permitted on the Premises. Tenant shall not place any loads upon the floors,
walls, or ceiling, which endanger the structure, or place any harmful fluids or
other materials in the drainage system of the building, or overload existing
electrical or other mechanical systems. No waste materials or refuse shall be
dumped upon or permitted to remain upon any part of the Premises or outside of
the building in which the Premises are a part, except in trash containers placed
inside exterior enclosures designated by Landlord for that purpose or inside of
the building proper where designated or allowed by Landlord. No materials,
supplies, equipment, finished products or semi-finished products, raw materials
or articles of any nature shall be stored upon or permitted to remain outside
the Premises or on any portion of common area of the Complex. No loudspeaker or
other device, system or apparatus which can be heard outside the Premises shall
be used in or at the Premises without the prior written consent of Landlord.
Tenant shall not commit or suffer to be committed any waste in or upon the
Premises. Tenant shall indemnify, defend and
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hold Landlord harmless against any loss, expense, damage, attorney's fees, or
liability arising out of failure of Tenant to comply with any applicable law.
Tenant shall comply with any covenant, condition, or restriction ("CC&R's")
affecting the Premises. The provisions of this paragraph are for the benefit of
Landlord only and shall not be construed to be for the benefit of any tenant or
occupant of the Complex.
2. TERM
A. Subject to the contingency described in Paragraph 1 above, the term of
this Lease shall be for a period of Seven Years and Two Months (7 and 2/12)
years (unless sooner terminated as hereinafter provided) and, subject to
Paragraphs 2(B) and 3, shall commence on the 15th day of November, 1999 and
end on the 14TH day of January, 2007.
B. Subject to the contingency described in Paragraph 1 above, possession of
the Premises shall be deemed tendered and the term of this Lease shall commence
November 1, 1999.
3. POSSESSION Subject to paragraph 1 above, if Landlord, for any reason
whatsoever, cannot deliver possession of said Premises to Tenant at the
commencement of said term, as hereinbefore specified, this Lease shall not be
void or voidable; no obligation of Tenant shall be affected thereby; nor shall
Landlord or Landlord's agents be liable to Tenant for any loss or damage
resulting therefrom; but in that event the commencement and termination dates of
the Lease, and all other dates affected thereby shall be revised to conform to
the date of Landlord's delivery of possession, as specified in Paragraph 2 (B),
above. The above, is, however, subject to the provision that the period of delay
of delivery of the Premises shall not exceed 45 days from the commencement date
herein (except those delays caused by Acts of God, strikes, war, utilities,
governmental bodies, weather, unavailable materials, and delays beyond
Landlord's control shall be excluded in calculating such period) in which
instance Tenant, at its option, may, by written notice to Landlord, terminate
this Lease.
4. RENT
A. BASIC RENT. Tenant agrees to pay to Landlord at such place as Landlord
may designate without deduction, offset, prior notice, or demand, and Landlord
agrees to accept as Basic Rent for the leased Premises the total sum of Three
Million Seven Hundred Eighty-Five Thousand Three Hundred Seventy and 29/100
($3,785,370.29 ) Dollars in lawful money of the United States of America,
payable as follows: $24,383.70 upon execution of this lease, represents the
Basic Rent for the 9th month of the Lease Term
Month of Lease Term Total Monthly Basic Rent
0-8 $0
9-20 $24,383.70 (9th month paid)
21-26 $48,767.40
27-38 $50,230.42
39-50 $51,737.33
51-62 $53,289.45
63-74 $54,888.14
75-86 $56,534.78
B. TIME FOR PAYMENT. In the event that the term of this Lease commences on
a date other than the first day of a calendar month, on the date of commencement
of the term hereof Tenant shall pay to Landlord as rent for the period from such
date of commencement to the first day of the next succeeding calendar month that
proportion of the monthly rent hereunder which the number of days between such
date of commencement and the first day of the next succeeding calendar month
bears to thirty (30). In the event that the term of this Lease for any reason
ends on a date other than the last day of a calendar month, on the first day of
the last calendar month of the term hereof Tenant shall pay to Landlord as rent
for the period from said first day of said last calendar month to and including
the last day of the term hereof that proportion of the monthly rent hereunder
which the number of days between said first day of said last calendar month and
the last day of the term hereof bears to thirty (30).
C. LATE CHARGE. Notwithstanding any other provision of this Lease, if
Tenant is in default in the payment of rent as set forth in this Paragraph 4
when due, or any part thereof, Tenant agrees to pay Landlord, in addition to the
delinquent rental due, a late charge for each rental payment in default ten (10)
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days. Said late charge shall equal five (5%) percent of each rental payment so
in default.
D. ADDITIONAL RENT. Beginning with the commencement date of the term of
this Lease, Tenant shall pay to Landlord in addition to the Basic Rent and as
Additional Rent the following:
(1) Tenant's proportionate share of all utilities relating to the Complex
as set forth in Paragraph 11, and
(2) Tenant's proportionate share of all Taxes relating to the Complex as
set forth in Paragraph 12, and
(3) Tenant's proportionate share of all insurance premiums relating to the
Complex, as set forth in Paragraph 15, and
(4) Tenant's proportionate share of expenses for the operation,
management, maintenance and repair of the Building (including common
areas of the Building) and Common Areas of the Complex in which the
Premises are located as set forth in Paragraph 7, and
(5) All charges, costs and expenses, which Tenant is required to pay
hereunder, together with all interest and penalties, costs and
expenses including attorney's fees and legal expenses, that may accrue
thereto in the event of Tenant's failure to pay such amounts, and all
damages, reasonable costs and expenses which Landlord may incur by
reason of default of Tenant or failure on Tenant's part to comply with
the terms of this Lease. In the event of nonpayment by Tenant of
Additional Rent, Landlord shall have all the rights and remedies with
respect thereto as Landlord has for nonpayment of rent.
Tenant shall pay to Landlord monthly, in advance, Tenant's prorata share of an
amount estimated by Landlord to be Landlord's approximate average monthly
expenditure for such Additional Rent items, which estimated amount shall be
reconciled at the end of each calendar year as compared to Landlord's actual
expenditure for said Additional Rent items, with Tenant paying to Landlord, upon
demand, any amount of actual expenses expended by Landlord in excess of said
estimated amount, or Landlord refunding to Tenant (providing Tenant is not in
default in the performance of any of the terms, covenants and conditions of this
Lease) any amount of estimated payments made by Tenant in excess of Landlord's
actual expenditures for said Additional Rent items.
Tenant's payment for such Additional rent as of the commencement of the term of
this lease shall be Two Thousand One Hundred ($2,100.00) Dollars per month. Any
payments required to be made by Tenant for Additional Rent shall be made by
check or instrument separate from that check or instrument used by Tenant to
make any payments for Basic Rent pursuant to paragraph 4 A.
The respective obligations of Landlord and Tenant under this paragraph shall
survive the expiration or other termination of the term of this Lease, and if
the term hereof shall expire or shall otherwise terminate on a day other than
the last day of a calendar year, the actual Additional Rent incurred for the
calendar year in which the term hereof expires or otherwise terminates shall be
determined and settled on the basis of the statement of actual Additional Rent
for such calendar year and shall be prorated in the proportion which the number
of days in such calendar year preceding such expiration or termination bears to
365.
E. PLACE OF PAYMENT OF RENT AND ADDITIONAL RENT. All Basic Rent hereunder
and all payments hereunder for Additional Rent shall be paid to Landlord at the
office of Landlord at 3201 Ash Street, Palo Alto, California 94306, or to such
other person or to such other place as Landlord may from time to time designate
in writing.
F. SECURITY DEPOSIT. Concurrently with Tenant's execution of this Lease,
Tenant shall deposit with Landlord the sum of Fifty Thousand ($50,000.00)
Dollars. Said sum shall be held by Landlord as a Security Deposit for the
faithful performance by Tenant of all the terms, covenants, and conditions of
this Lease to be kept and performed by Tenant during the term hereof. If Tenant
defaults with respect to any provisions of this Lease, including, but not
limited to, the provisions relating to the payment of rent and any of the
monetary sums due herewith, Landlord may (but shall not be required to) use,
apply or retain all or any part of this Security Deposit for the payment of any
other amount which Landlord may spend by reason of Tenant's default or to
compensate Landlord for any other loss or damage which Landlord may suffer by
reason of Tenant's default. If any portion of said Deposit is so used or
applied, Tenant shall, within ten (10) days after written demand therefor,
deposit cash with Landlord in the amount sufficient to restore the Security
Deposit to its original amount. Tenant's failure to do so shall be a material
breach of this Lease. Landlord shall not be required to keep this Security
Deposit separate from its general funds, and Tenant shall not be entitled to
interest on such Deposit. If Tenant fully and
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faithfully performs every provision of this Lease to be performed by it, the
Security Deposit or any balance thereof shall be returned to Tenant (or at
Landlord's option, to the last assignee of Tenant's interest hereunder) at the
expiration of the Lease term and after Tenant has vacated the Premises. In the
event of termination of Landlord's interest in this Lease, Landlord shall
transfer said Deposit to Landlord's successor in interest whereupon Tenant
agrees to release Landlord from liability for the return of such Deposit or the
accounting therefor.
In addition to the cash Security Deposit as defined in this paragraph 4.F.
Tenant agrees to tender to Landlord no later than January 2, 2000, an
irrevocable standby Letter of Credit in the amount of $300,000. The form of the
irrevocable standby Letter of Credit must be acceptable to Landlord. The Letter
of Credit must provide that Landlord has the ability to cash or draw the entire
amount solely upon Landlord's representing to the issuing Bank that Tenant is in
an uncured monetary default of the Lease. The Letter of Credit required
hereunder shall remain in full force and effect until December 31st, 2003. In
the event Tenant has not provided Landlord the Letter of Credit as required,
then on January 15, 2000, Tenant agrees to tender to Landlord a Certificate of
Deposit in Landlord's name in the amount of $300,000. Any interest generated by
the Certificate of Deposit during the term of the Lease shall be given to
Tenant.
5. RULES AND REGULATIONS AND COMMON AREA Subject to the terms and conditions of
this Lease and such Rules and Regulations as Landlord may from time to time
prescribe, Tenant and Tenant's employees, invitees and customers shall, in
common with other occupants of the Complex in which the Premises are located,
and their respective employees, invitees and customers, and others entitled to
the use thereof, have the non-exclusive right to use the access roads, parking
areas, and facilities provided and designated by Landlord for the general use
and convenience of the occupants of the Complex in which the Premises are
located, which areas and facilities are referred to herein as "Common Area" This
right shall terminate upon the termination of this Lease. Landlord reserves the
right from time to time to make changes in the shape, size, location, amount and
extent of Common Area. Landlord further reserves the right to promulgate such
reasonable rules and regulations relating to the use of the Common Area, and any
part or parts thereof, as Landlord may deem appropriate for the best interests
of the occupants of the Complex. The Rules and Regulations shall be binding upon
Tenant upon delivery of a copy of them to Tenant, and Tenant shall abide by them
and cooperate in their observance. Such Rules and Regulations may be amended by
Landlord from time to time, with or without advance notice, and all amendments
shall be effective upon delivery of a copy to Tenant. Landlord shall not be
responsible to Tenant for the non-performance by any other tenant or occupant of
the Complex of any of said Rules and Regulations.
Landlord shall operate, manage and maintain the Common Area. The manner in
which the Common Area shall be maintained and the expenditures for such
maintenance shall be at the discretion of Landlord.
6. PARKING Tenant shall have the right to use with other tenants or occupants of
the Complex 80 parking spaces in the common parking areas of the Complex
outlined in red on Exhibit C. Tenant agrees that Tenant, Tenant's employees,
agents, representatives and/or invitees shall not use parking spaces in excess
of said 80 spaces allocated to Tenant hereunder. Landlord shall have the right,
at Landlord's sole discretion, to specifically designate the location of
Tenant's parking spaces within the common parking areas of the Complex in the
event of a dispute among the tenants occupying the building and/or Complex
referred to herein, in which event Tenant agrees that Tenant, Tenant's
employees, agents, representatives and/or invitees shall not use any parking
spaces other than those parking spaces specifically designated by Landlord for
Tenant's use. Said parking spaces, if specifically designated by landlord to
Tenant, may be relocated by Landlord at any time, and from time to time.
Landlord reserves the right, at Landlord's sole discretion, to rescind any
specific designation of parking spaces, thereby returning Tenant's parking
spaces to the common parking area. Landlord shall give Tenant written notice of
any change in Tenant's parking spaces. Tenant shall not, at any time, park, or
permit to be parked, any trucks or vehicles adjacent to the loading areas so as
to interfere in any way with the use of such areas, nor shall Tenant at any time
park, or permit the parking of Tenant's trucks or other vehicles or the trucks
and vehicles of Tenant's suppliers or others, in any portion of the common area
not designated by Landlord for such use by Tenant. Tenant shall not park not
permit to be parked, any inoperative vehicles or equipment on any portion of the
common parking area or other common areas of the Complex. Tenant agrees to
assume responsibility for compliance by its employees with the parking provision
contained herein. If Tenant or its employees park in other than such designated
parking areas, then Landlord may charge Tenant, as an
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additional charge, and Tenant agrees to pay, ten ($10.00) Dollars per day for
each day or partial day each such vehicle is parked in any area other than that
designated. Tenant hereby authorizes Landlord at Tenant's sole expense to tow
away from the Complex any vehicle belonging to Tenant or Tenant's employees
parked in violation of these provisions, or to attach violation stickers or
notices to such vehicles. Tenant shall use the parking areas for vehicle parking
only, and shall not use the parking areas for storage.
7. EXPENSES OF OPERATION, MANAGEMENT AND MAINTENANCE OF THE COMMON AREAS OF THE
COMPLEX, PREMISES AND BUILDING IN WHICH THE PREMISES ARE LOCATED As Additional
Rent and in accordance with Paragraph 4 D of this Lease, Tenant shall pay to
Landlord Tenant's proportionate share (calculated on a square footage or other
equitable basis as calculated by Landlord) of all expenses of operation,
management, maintenance and repair of the Common Areas of the Complex including,
but not limited to, license, permit and inspection fees; security; utility
charges associated with exterior landscaping and lighting (including water and
sewer charges); all charges incurred in the maintenance of landscaped areas,
lakes, parking lots, sidewalks, driveways; maintenance, repair and replacement
of all fixtures and electrical, mechanical and plumbing systems; structural
elements and exterior surfaces of the buildings; salaries and employee benefits
of personnel and payroll taxes applicable thereto; supplies, materials,
equipment and tools; the cost of capital expenditures which have the effect of
reducing operating expenses, provided, however, that in the event Landlord makes
such capital improvements, Landlord may amortize its investment in said
improvements (together with interest at the rate of fifteen (15%) percent per
annum on the unamortized balance) as an operating expense in accordance with
standard accounting practices, provided, that such amortization is not at a rate
greater than the anticipated savings in the operating expenses.
"Additional Rent" as used herein shall not include Landlord's debt
repayments; interest on charges; expenses directly or indirectly incurred by
Landlord for the benefit of any other tenant; cost for the installation of
partitioning or any other tenant improvements; cost of attracting tenants;
depreciation; interest, or executive salaries.
Tenant agrees to contract and pay for five-day janitorial service for the
leased Premises and Landlord agrees to maintain the Complex in a first-class
manner.
Expenses for the operation, management and maintenance of the Premises and
Building shall not include and Tenant shall in no event have any obligation to
perform or to pay directly, or to reimburse Landlord for, all or any portion of
the following repairs, maintenance, improvements, replacements, premiums,
claims, losses, fees, charges, costs and expenses (collectively, "Costs"): Costs
occasioned by the act, omission or violation of any law by Landlord, or its
respective agents, employees or contractors; (b) Costs occasioned by fire,
(except fires caused by Tenant), acts of God, or other casualties or by the
exercise of the power of eminent domain; (c) Interest, charges and fees incurred
on debt; (d) Costs of structural repairs to the Premises (other than repairs or
modifications required because of Tenant's improvements); (e) costs which could
properly be capitalized under generally accepted accounting principles, except
to the extent amortized over the useful life of the capital item in question.
8. ACCEPTANCE AND SURRENDER OF PREMISES By entry hereunder, Tenant accepts the
Premises as being in good and sanitary order, condition and repair and accepts
the building and improvements included in the Premises in their present
condition and without representation or warranty by Landlord as to the condition
of such building or as to the use or occupancy which may be made thereof. Tenant
agrees to lease the Premises in an AS-IS condition, and any alteration,
addition, or modification to the Premises shall be made in accordance with this
Paragraph 8 and Paragraph 9 of the Lease and shall be made at Tenant's sole cost
and expense and shall not delay the commencement of Lease nor delay the payment
of any rental due hereunder. Notwithstanding anything herein to the contrary,
Landlord shall have the right to review and approve Tenant's initial build-out
of the Premises, and Tenant shall only be required to restore the Premises to
the condition and configuration in existence upon completion of the initial
build-out. Any exceptions to the foregoing must be by written agreement executed
by Landlord and Tenant. Tenant agrees on the last day of the Lease term, or on
the sooner termination of this Lease, to surrender the Premises promptly and
peaceably to Landlord in good condition and repair (damage by Acts of God, fire
or normal wear and tear excepted), with all interior walls cleaned and repaired
and replaced, if damaged; all floors cleaned and waxed; all carpets cleaned and
shampooed; the air conditioning and heating equipment serviced by a reputable
and licensed service firm and in good operating condition (provided the
maintenance of such equipment has been Tenant's responsibility during the term
of this Lease) together with all alterations, additions and improvements which
may have been made in, to, or on the Premises (except movable trade fixtures
installed at the
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expense of Tenant) except that Tenant shall ascertain from Landlord within
thirty (30) days before the end of the term of this Lease whether Landlord
desires to have the Premises or any part or parts thereof restored to their
condition and configuration as when the Premises were delivered to Tenant and if
Landlord shall so desire, then Tenant shall restore said Premises or such part
or parts thereof before the end of this Lease at Tenant's sole cost and expense.
Tenant, on or before the end of the term or sooner termination of this Lease,
shall remove all of Tenant's personal property and trade fixtures from the
Premises, and all property not so removed on or before the end of the term or
sooner termination of this Lease shall be deemed abandoned by Tenant and title
to same shall thereupon pass to Landlord without compensation to Tenant.
Landlord may, upon termination of this Lease, remove all moveable furniture and
equipment so abandoned by Tenant, at Tenant's sole cost, and repair any damage
caused by such removal at Tenant's sole cost. If the Premises be not surrendered
at the end of the term or sooner termination of this Lease, Tenant shall
indemnify Landlord against loss or liability resulting from the delay by Tenant
in so surrendering the Premises including, without limitation, any claims made
by any succeeding tenant founded on such delay. Nothing contained herein shall
be construed as an extension of the term hereof or as a consent of Landlord to
any holding over by Tenant. The voluntary or other surrender of this Lease or
the Premises by Tenant or a mutual cancellation of this Lease shall not work as
a merger and, at the option of Landlord, shall either terminate all or any
existing subleases or subtenancies or operate as an assignment to Landlord of
all or any such subleases or subtenancies.
9. ALTERATIONS AND ADDITIONS Tenant shall not make, or suffer to be made, any
alteration or addition to the Premises, or any part thereof, without the written
consent of Landlord first had and obtained by Tenant, but at the cost of Tenant,
and any addition to, or alteration of, the Premises, except moveable furniture
and trade fixtures, shall at once become a part of the Premises and belong to
Landlord. Tenant shall request in writing Landlord's approval of any alterations
or additions to the Premises, and Landlord shall approve or disapprove Tenant's
request for alterations within 5 working days of receipt of Tenant's written
request. At such time as Landlord approves or disapproves Tenant's request for
alterations, Landlord shall also indicate which alterations, if any, must be
removed and restored to the condition of the initial build-out, such restoration
to be performed pursuant to the terms and conditions of Paragraph 8 above. If
Landlord consents to the making of any alteration, addition, or improvement to
or of the Premises by Tenant, the same shall be made by Landlord at Tenant's
sole cost and expense. In the event Landlord elects not to perform the
construction of Tenant's improvements, Landlord shall have the right to review
and approve in writing Tenant's contractor and to set forth reasonable rules and
guidelines that must be followed in the construction of Tenant's improvements.
In the event Landlord performs the construction, Landlord shall receive a
construction fee equal to 10% of the direct cost of construction of the
improvements. Any modifications to the building or building systems as a result
of Tenant's alterations, additions or improvements required by governmental code
or otherwise shall be made at Tenant's sole cost and expense. Tenant shall
retain title to all moveable furniture and trade fixtures placed in the
Premises. All heating, lighting, electrical, airconditioning, partitioning,
drapery, carpeting and floor installations made by Tenant, together with all
property that has become an integral part of the Premises, shall not be deemed
trade fixtures. Tenant agrees that it will not proceed to make any alterations
or additions, without having obtained consent from Landlord to do so, and until
five (5) days from the receipt of such consent, in order that Landlord may post
appropriate notices to avoid any liability to contractors or material suppliers
for payment for Tenant's improvements. Tenant will at all times permit such
notices to be posted and to remain posted until the completion of work. Tenant
shall, if required by Landlord, secure at Tenant's own cost and expense, a
completion and lien indemnity bond, satisfactory to Landlord, for such work.
Tenant further covenants and agrees that any mechanic's liens file against the
Premises or against the Complex for work claimed to have been done for, or
materials claimed to have been furnished to Tenant, will be discharged by
Tenant, by bond or otherwise, within ten (10) days alter the filing thereof, at
the cost and expense of Tenant. Any exceptions to the foregoing must be made in
writing and executed by both Landlord and Tenant.
10. MAINTENANCE Tenant shall at its sole cost and expense, keep and maintain the
interior of the Premises (including appurtenances) and every part thereof in a
high standard of maintenance and repair, and in good and sanitary condition.
Tenant's maintenance and repair responsibilities herein referred to include, but
are not limited to, all windows, window frames, plate glass, glazing, truck
doors, plumbing systems (such as water and drain lines, sinks, toilets, faucets,
drains, showers and water fountains), electrical systems (such as panels,
conduits, outlets, lighting fixtures, lamps, bulbs, tubes, ballasts), heating
and air-conditioning systems (such as compressors, fans, air handlers, ducts,
mixing boxes, thermostats, time clocks, boilers, heaters, supply and return
grills), store
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fronts, roofs, downspouts, all interior improvements within the Premises
including but not limited to wall coverings, window coverings, carpet, floor
coverings, partitioning, ceilings, doors (both interior and exterior, including
closing mechanisms, latches, locks, skylights (if any), automatic fire
extinguishing systems, and all other interior improvements of any nature
whatsoever. Areas of excessive wear shall be replaced at Tenant's sole expense
upon Lease termination. Tenant hereby waives all rights under, and benefits of,
subsection 1 of Section 1932 and Section 1941 and 1942 of the California Civil
Code and under any similar law, statute or ordinance now or hereafter in effect.
Tenant specifically agrees to maintain the interior of the Premises, all
mechanical equipment and plumbing and electrical systems in a first-class
manner. Copies of all maintenance contracts entered into by Tenant shall be
supplied to Landlord on a regular basis. In the event the Premises are damaged
and Landlord has elected to rebuild the Premises, as set forth in paragraph 24
below, then Tenant shall be excused from maintaining the Premises during the
period of rebuilding.
11. UTILITIES OF THE BUILDING IN WHICH THE PREMISES ARE LOCATED
Tenant shall pay promptly, as the same become due, all charges for water, gas,
electricity, telephone, telex and other electronic communications service, sewer
service, waste pick-up and any other utilities, materials or services furnished
directly to or used by Tenant on or about the Premises during the term of this
Lease, including, without limitation, any temporary or permanent utility
surcharge or other exactions whether or not hereinafter imposed. Landlord shall
not be liable for and Tenant shall not be entitled to any abatement or reduction
of rent by reason of any interruption or failure of utility services to the
Premises when such interruption or failure is caused by accident, breakage,
repair, strikes, lockouts, or other labor disturbances or labor disputes of any
nature, or by any other cause, similar or dissimilar, beyond the reasonable
control of Landlord.
12 TAXES A. As Additional Rent and in accordance with paragraph 4D of this
Lease, Tenant shall pay to Landlord Tenant's proportionate share of all Real
Property Taxes, which prorata share shall be allocated to the leased Premises by
square footage or other equitable basis, as calculated by Landlord. The term
"Real Property Taxes", as used herein, shall mean (i) all taxes, assessments,
levies and other charges of any kind or nature whatsoever, general and special,
foreseen and unforeseen (including all installments of principal and interest
required to pay any general or special assessments for public improvements and
any increases resulting from reassessments caused by any change in ownership of
the Complex) now or hereafter imposed by any governmental or quasi-governmental
authority or special district having the direct or indirect power to tax or levy
assessments, which are levied or assessed against, or with respect to the value,
occupancy or use of, all or any portion of the Complex (as now constructed or as
may at any time hereafter be constructed, altered, or otherwise changed) or
Landlord's interest therein; any improvements located within the Complex
(regardless of ownership); the fixtures, equipment and other property of
Landlord, real or personal, that are an integral part of and located in the
Complex; or parking areas, public utilities, or energy within the Complex; (ii)
all charges, levies or fees imposed by reason of environmental regulation or
other governmental control of the Complex; and (iii) all costs and fees
(including attorney's fees) incurred by Landlord in contesting any Real Property
Tax and in negotiating with public authorities as to any Real Property Tax. If
at any time during the term of this Lease the taxation or assessment of the
Complex prevailing as of the commencement date of this Lease shall be altered so
that in lieu of or in addition to any Real Property Tax described above there
shall be levied, assessed or imposed (whether by reason of a change in the
method of taxation or assessment, creation of a new tax or charge, or any other
cause) an alternate or additional tax or charge (i) on the value, use or
occupancy of the Complex or Landlord's interest therein or (ii) on or measured
by the gross receipts, income or rentals from the Complex, on Landlord's
business of leasing the Complex, or computed in any manner with respect to the
operation of the Complex, then any such tax or charge, however designated, shall
be included within the meaning of the term "Real Property Taxes" for purposes of
this Lease. If any Real Property Tax is based upon property or rents unrelated
to the Complex, then only that part of such Real Property Tax that is fairly
allocable to the Complex shall be included within the meaning of the term "Real
Property Taxes". Notwithstanding the foregoing, the term "Real Property Taxes"
shall not include estate, inheritance, gift or franchise taxes of Landlord or
the federal or state net income tax imposed on Landlord's income from all
sources.
Real Property Taxes shall not include and Tenant shall not be required to pay
any portion of any tax or
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assessment expense or any increase therein: (a) Levied on Landlord's rental
income, unless such tax or assessment expense is imposed in lieu of real
property taxes; (b) In excess of the amount which would be payable if such tax
or assessment expense were paid in installments over the longest permitted term;
(c) Attributable to Landlord's net income, transfer, or state taxes.
B. TAXES ON TENANT'S PROPERTY
(1) Tenant shall be liable for and shall pay ten days before delinquency, taxes
levied against any personal property or trade fixtures placed by Tenant in or
about the Premises. If any such taxes on Tenant's personal property or trade
fixtures are levied against Landlord or Landlord's property or if the assessed
value of the Premises is increased by the inclusion therein of a value placed
upon such personal property or trade fixtures of Tenant and if Landlord, after
written notice to Tenant, pays the taxes based on such increased assessment,
which Landlord shall have the right to do regardless of the validity thereof,
but only under proper protest if requested by Tenant, Tenant shall upon demand,
as the case may be, repay to Landlord the taxes so levied against Landlord, or
the proportion of such taxes resulting from such increase in the assessment;
provided that in any such event Tenant shall have the right, in the name of
Landlord and with Landlord's full cooperation, to bring suit in any court of
competent jurisdiction to recover the amount of any such taxes so paid under
protest, and any amount so recovered shall belong to Tenant.
(2) If the Tenant improvements in the Premises, whether installed, and/or paid
for by Landlord or Tenant and whether or not affixed to the real property so as
to become a part thereof, are assessed for Real Property Tax purposes at a
valuation higher than the valuation at which standard office improvements in
other space in the Complex are assessed, then the Real Property Taxes and
assessments levied against Landlord or the Complex by reason of such excess
assessed valuation shall be deemed to be taxes levied against personal property
of Tenant and shall be governed by the provisions of 12A(i), above. If the
records of the County Assessor are available and sufficient detailed to serve as
a basis for determining whether said Tenant improvements are assessed at a
higher valuation than standard office improvements in other space in the
Complex, such records shall be binding on both the Landlord and the Tenant. If
the records of the County Assessor are not available or sufficiently detailed to
serve as a basis for making said determination, the actual cost of construction
shall be used.
13. LIABILITY INSURANCE Tenant, at Tenant's expense, agrees to keep in force
during the term of this Lease a policy of comprehensive public liability
insurance with limits in the amount of $1,000,000/1,000,000 for injuries to or
death of persons occurring in, on or about the Premises or the Complex, and
property damage insurance with limits of $500,000. The policy or policies
affecting such insurance, certificates of which shall be furnished to Landlord,
shall name Landlord as additional insured, and shall insure any liability of
Landlord, contingent or otherwise, as respects acts or omissions of Tenant, its
agents, employees or invitees or otherwise by any conduct or transactions of any
of said persons in or about or concerning the Premises, including any failure of
Tenant to observe or perform any of its obligations hereunder; shall be issued
by an insurance company admitted to transact business in the State of
California; and shall provide that the insurance effected thereby shall not be
canceled, except upon thirty (30) days' prior written notice to Landlord. If,
during the term of this Lease, in the considered opinion of Landlord's Lender,
insurance advisor or counsel, the amount of insurance described in this
paragraph 13 is not adequate, Tenant agrees to increase said coverage to such
reasonable amount as Landlord's Lender, insurance advisor or counsel shall deem
adequate.
14. TENANT'S PERSONAL PROPERTY INSURANCE AND WORKER'S COMPENSATION INSURANCE
Tenant shall maintain a policy or policies of fire and property damage insurance
in "all risk" form with a sprinkler leakage endorsement insuring the personal
property, inventory, trade fixtures and leasehold improvements within the leased
Premises for the full replacement value thereof. The proceeds from any of such
policies shall be used for the repair or replacement of such items so insured.
Tenant shall also maintain a policy or policies of worker's compensation
insurance and any other employee benefit insurance sufficient to comply with all
laws.
15. PROPERTY INSURANCE Landlord shall purchase and keep in force and, as
Additional Rent and in accordance with Paragraph 4D of this Lease, Tenant shall
pay to Landlord Tenant's proportionate share (calculated on a square footage or
other equitable basis as calculated by Landlord) of the cost of policy or
policies of insurance covering loss or damage to the Premises and Complex in the
amount of the full replacement value thereof, providing protection against those
perils included within the classification
8
of "all risks" insurance and flood and/or earthquake insurance, if available,
plus a policy of rental income insurance in the amount of one hundred (100%)
percent of twelve (12) months Basic Rent, plus sums paid as Additional Rent. If
such insurance cost is increased due to Tenant's use of the Premises or the
Complex, Tenant agrees to pay to Landlord the full cost of such increase. Tenant
shall have no interest in nor any right to the proceeds of any insurance
procured by Landlord for the Complex.
Landlord and Tenant do each hereby respectively release the other, to the
extent of insurance coverage of the releasing party, from any liability for loss
or damage caused by fire or any of the extended coverage casualties included in
the releasing party's insurance policies, irrespective of the cause of such fire
or casualty; provided, however, that if the insurance policy of either releasing
party prohibits such waiver, then this waiver shall not take effect until
consent to such waiver is obtained. If such waiver is so prohibited, the insured
party affected shall promptly notify the other party thereof.
16. INDEMNIFICATION Landlord shall not be liable to Tenant and Tenant hereby
waives all claims against Landlord for any injury to or death of any person or
damage to or destruction of property in or about the Premises or the Complex by
or from any cause whatsoever, including, without limitation, gas, fire, oil,
electricity or leakage of any character from the roof, walls, basement or other
portion of the Premises or the Complex but excluding, howeve, the negligence of
Landlord, its agents, servants, employees, invitees, or contractors. Except as
to injury to persons or damage to property the principal cause of which is the
negligence of Landlord, Tenant shall hold Landlord harmless from and defend
Landlord against any and all expenses, including reasonable attorney's fees, in
connection therewith, arising out of any injury to or death of any person or
damage to or destruction of property occurring in, on or about the Premises, or
any part thereof, from any cause whatsoever.
17. COMPLIANCE Tenant, at its sole cost and expense, shall promptly comply with
all laws, statutes, ordinances and governmental rules, regulations or
requirements now or hereafter in effect; with the requirements of any board of
fire underwriters or other similar body now or hereafter constituted; and with
any direction or occupancy certificate issued pursuant to law by any public
officer; provided, however, that no such failure shall be deemed a breach of
these provisions if Tenant, immediately upon notification, commences to remedy
or rectify said failure. The judgement of any court of competent jurisdiction or
the admission of Tenant in any action against Tenant, whether Landlord be a
party thereto or not, that Tenant has violated any such law, statute, ordinance
or governmental rule, regulation, requirement, direction or provision, shall be
conclusive of that fact as between Landlord and Tenant. This paragraph shall not
be interpreted as requiring Tenant to make structural changes or improvements,
except to the extent such changes or improvements are required as a result of
Tenant's use of the Premises. Tenant shall, at its sole cost and expense, comply
with any and all requirements pertaining to said Premises, of any insurance
organization or company, necessary for the maintenance of reasonable fire and
public liability insurance covering the Premises.
18. LIENS Tenant shall keep the Premises and the Complex free from any liens
arising out of any work performed, materials furnished or obligation incurred by
Tenant. In the event that Tenant shall not, within ten (10) days following the
imposition of such lien, cause the same to be released of record, Landlord shall
have, in addition to all other remedies provided herein and by law, the right,
but no obligation, to cause the same to be released by such means as it shall
deem proper, including payment of the claim giving rise to such lien. All sums
paid by Landlord for such purpose, and all expenses incurred by it in connection
therewith, shall be payable to Landlord by Tenant on demand with interest at the
prime rate of interest as quoted by the Bank of America.
19. ASSIGNMENT AND SUBLETTING Tenant shall not assign, transfer or hypothecate
the leasehold estate under this Lease, or any interest therein, and shall not
sublet the Premises, or any part thereof, or any right or privilege appurtenant
thereto, or suffer any other person or entity to occupy or use the Premises, or
any portion thereof, without, in each case, the prior written consent of
Landlord which consent will not be unreasonably withheld. Landlord shall respond
to Tenant's request for consent hereunder with 15 days after receiving the
written notice by Tenant. As a condition for granting its consent to any
subletting, Landlord may require that Tenant agrees to pay to Landlord, as
additional rent, all rents received by Tenant from its subtenants in excess of
the rent payable by Tenant to Landlord hereunder (after first deducting from
such excess rent Tenant's reasonable costs and expenses of assigning the lease
or subletting all or any portion of the Premises, including the cost of any
special improvements made to the Premises by Tenant specific to said sublease or
assignment, reasonable advertising fees, reasonable brokerage fees, reasonable
legal fees, the unamortized cost of any alterations
9
or additions made to the Premises which were paid for by Tenant). Tenant shall,
by forty five (45) days' written notice, advise Landlord of its intent to sublet
the Premises or any portion thereof for any part of the term hereof. Upon
receipt of said notice, Landlord may, in its sole discretion, elect to terminate
this Lease as to the portion of the Premises described in Tenant's notice on the
date specified in Tenant's notice. If Tenant intends to sublet the entire
Premises and Landlord elects to terminate this Lease, this Lease shall be
terminated on the date specified in Tenant's notice. If, however this Lease
shall terminate pursuant to the foregoing with respect to less than all the
Premises, the rent, as defined and reserved hereinabove shall be adjusted on a
pro-rata basis to the number of square feet retained by Tenant, and this Lease
as so amended shall continue in full force and effect. In the event Tenant is
allowed to assign, transfer or sublet the whole or any part of the Premises,
with the prior written consent of Landlord, no assignee, transferee or subtenant
shall assign or transfer this Lease, either in whole or in part, or sublet the
whole or any part of the premises, without also having obtained the prior
written consent of Landlord. A consent of Landlord to one assignment, transfer,
hypothecation, subletting, occupation or use by any other person shall not
release Tenant from any of Tenant's obligations hereunder to be deemed to be a
consent to any subsequent similar or dissimilar assignment, transfer,
hypothecation, subletting, occupation or use by any other person. Any such
assignment, transfer, hypothecation, subletting, occupation or use without such
consent shall be void and shall constitute a breach of this Lease by Tenant and
shall, at the option of Landlord exercised by written notice to Tenant,
terminate this Lease. The leasehold estate under this Lease shall not, nor
shall any interest therein, be assignable for any purpose by operation of law
without the written consent of Landlord. As a condition to its consent, Landlord
may require Tenant to pay all expenses in connection with the assignment, and
Landlord may require Tenant's assignee or transferee (or other assignees or
transferees) to assume in writing all of the obligations under this Lease and
for Tenant to remain liable to Landlord under the Lease.
Tenant may, without Landlord's prior written consent, sublet the Premises or
assign the Lease to (a) a subsidiary, affiliate or corporation controlling,
controlled by or under common control with Tenant, (b) a successor corporation
related to Tenant by merger, consolidation, nonbankruptcy, reorganization, or
government action, or (c) a purchases of substantially all of Tenant's assets
located in the Premises. A sale or transfer of Tenant's capital stock shall not
be deemed an assignment, subletting or any other transfer of the Lease or the
Premises. Tenant shall in these instances remain fully liable for their
performance of Tenant's obligations under the Lease.
20. SUBORDINATION AND MORTGAGES In the event Landlord's title or leasehold
interest is now or hereafter encumbered by a deed of trust, upon the interest of
Landlord in the land and buildings in which the demised Premises are located, to
secure a loan from a lender (hereinafter referred to as "Lender") to Landlord,
Tenant shall, at the request of Landlord or Lender, execute in writing an
agreement subordinating its rights under this Lease to the lien of such deed of
trust, or, if so requested, agreeing that the lien of Lender's deed of trust
shall be or remain subject and subordinate to the rights of Tenant under this
Lease. Tenant hereby irrevocably appoints Landlord the attorney in fact of
Tenant to execute, deliver and record any such instrument or instruments for and
in the name and on behalf of Tenant. Notwithstanding any such subordination,
Tenant's possession under this Lease shall not be disturbed if Tenant is not in
default and so long as Tenant shall pay all rent and observe and perform all of
the provisions set forth in this Lease. Tenant agrees to send to any mortgagees
and/or deed of trust holders, by registered mail, a copy of any notice of
default served by Tenant upon the Landlord, provided that prior to such notice,
Tenant has been notified, in writing (by way of notice of assignment of rents or
otherwise) of the addresses of such mortgages and/or deed of trust holders.
Tenant further agrees that if Landlord shall have failed to cure such default
within the time provided for in this Lease, any such mortgagees and/or deed of
trust holders shall have an additional thirty (30) days within which to cure
such default, or if such default is not reasonably susceptible of cure within
that time, then such additional time as may be reasonably necessary if within
such (30) days, any mortgagee and/or deed of trust holder has commenced and is
diligently pursuing the remedies necessary to cure such default, (including but
not limited to commencement of foreclosure proceedings), in which event this
Lease shall not be terminated when such remedies are being diligently pursued.
21. ENTRY BY LANDLORD Landlord reserves, and shall at all reasonable times have,
the right to enter the Premises to inspect them; to perform any services to be
provided by Landlord hereunder; to submit the Premises to prospective
purchasers, mortgagers or tenants; to post notices of nonresponsibility; and to
alter, improve or repair the Premises and any portion of the Complex, all
without abatement of rent; and may erect scaffolding and other necessary
structures in or through the Premises where reasonably required by the character
of the work to be performed; provided, however,
10
that the business of Tenant shall be interfered with to the least extent that is
reasonably practical. For each of the foregoing purposes, Landlord shall at all
times have and retain a key with which to unlock all of the doors in an
emergency in order to obtain entry to the Premises, and any entry to the
Premises obtained by Landlord by any of said means, or otherwise, shall not
under any circumstances be construed or deemed to be a forcible or unlawful
entry into or a detainer of the Premises or an eviction, actual or constructive,
of Tenant from the Premises or any portion thereof. Landlord shall also have the
right at any time to change the arrangement or location of entrances or
passageways, doors and doorways, and corridors, elevators, stairs, toilets or
other public parts of the Complex and to change the name, number or designation
by which the Complex is commonly known, and none of the foregoing shall be
deemed an actual or constructive eviction of Tenant, or shall entitle Tenant to
any reduction of rent hereunder. Landlord agrees to respect the confidentiality
of Tenant's business information that may be observed during any such entry.
22. BANKRUPTCY AND DEFAULT The commencement of a bankruptcy action or
liquidation action or reorganization action or insolvency action or an
assignment of or by Tenant for the benefit of creditors, or any similar action
undertaken by Tenant, or the insolvency of Tenant, shall, at Landlord's option,
constitute a breach of this Lease by Tenant. If the trustee or receiver
appointed to serve during a bankruptcy, liquidation, reorganization, insolvency
or similar action elects to reject Tenant's unexpired Lease, the trustee or
receiver shall notify Landlord in writing of its election within thirty (30)
days after an order for relief in a liquidation action or within thirty (30)
days after the commencement of any action.
Within thirty (30) days after court approval of the assumption of this
Lease, the trustee or receiver shall cure (or provide adequate assurance to the
reasonable satisfaction of Landlord that the trustee or receiver shall cure) any
and all previous defaults under the unexpired Lease and shall compensate
Landlord for all actual pecuniary loss and shall provide adequate assurance of
future performance under said Lease to the reasonable satisfaction of Landlord.
Adequate assurance of future performance, as used herein, includes, but shall
not be limited to: (i) assurance of source and payment of rent, and other
consideration due under this Lease; (ii) assurance that the assumption or
assignment of this Lease will not breach substantially any provision, such as
radius, location, use, or exclusivity provision, in any agreement relating to
the above described Premises.
Nothing contained in this section shall affect the existing right of
Landlord to refuse to accept an assignment upon commencement of or in connection
with a bankruptcy, liquidation, reorganization or insolvency action or an
assignment of Tenant for the benefit of creditors or other similar act. Nothing
contained in this Lease shall be construed as giving or granting or creating an
equity in the demised Premises to Tenant. In no event shall the leasehold estate
under this Lease, or any interest therein, be assigned by voluntary or
involuntary bankruptcy proceeding without the prior written consent of Landlord.
In no event shall this Lease or any rights or privileges hereunder be an asset
of Tenant under any bankruptcy, insolvency or reorganization proceedings.
The failure to perform or honor any covenant, condition or representation
made under this Lease shall constitute a default hereunder by Tenant upon
expiration of the appropriate grace period hereinafter provided. Tenant shall
have a period of five (5) days from the date of written notice from Landlord
within which to cure any default in the payment of rental or adjustments
thereto. Tenant shall have a period of ten (10) days from the date of written
notice from Landlord within which to cure any other default under this Lease.
Upon an uncured default of this Lease by Tenant, Landlord shall have the
following rights and remedies in addition to any other rights or remedies
available to Landlord at law or in equity:
(a) The rights and remedies provided for by California Civil Code
Section 1951.2, including but not limited to, recovery of the worth at the time
of award of the amount by which the unpaid rent for the balance of the term
after the time of award exceeds the amount of rental loss for the same period
that Tenant proves could be reasonably avoided, as computed pursuant to
subsection (b) of said Section 1951.2. Any proof by Tenant under subparagraphs
(2) and (3) of Section 1951.2 of the California Civil Code of the amount of
rental loss that could be reasonably avoided shall be made in the following
manner: Landlord and Tenant shall each select a licensed real estate broker in
the business of renting property of the same type and use as the Premises and in
the same geographic vicinity. Such two real estate brokers shall select a third
licensed real estate broker, and the three licensed real estate brokers so
selected shall determine the amount of the rental loss that could be reasonably
avoided from the balance of the term of this Lease after the time of award. The
decision of the majority of said licensed real estate brokers shall be final and
binding upon the parties hereto.
(b) The rights and remedies provided by California Civil Code which
allows Landlord to continue the Lease in effect and to enforce all of its rights
and remedies under this Lease, including the
11
right to recover rent as it becomes due, for so long as Landlord does not
terminate Tenant's right to possession; acts of maintenance or preservation,
efforts to relet the Premises, or the appointment of a receiver upon Landlord's
initiative to protect its interest under this Lease shall not constitute a
termination of Tenant's right to possession.
(c) The right to terminate this Lease by giving notice to Tenant in
accordance with applicable law.
(d) The right and power, as attorney-in-fact for Tenant, to enter the
Premises and remove therefrom all persons and property, to store such property
in a public warehouse or elsewhere at the cost of and for the account of Tenant
and to sell such property and apply such proceeds therefrom pursuant to
applicable California law. Landlord, as attorney-in-fact for Tenant, may from
time to time sublet the Premises or any part thereof for such term or terms
(which may extend beyond the term of this Lease) and at such rent and such other
terms as Landlord in its sole discretion may deem advisable, with the right to
make alterations and repairs to the Premises. Upon each subletting, (i) Tenant
shall be immediately liable to pay Landlord, in addition to indebtedness other
than rent due hereunder, the cost of such subletting, including, but not limited
to, reasonable attorney's fees, and any real estate commissions actually paid,
and the cost of such alterations and repairs incurred by Landlord and the
amount, if any, by which the rent hereunder for the period of such subletting
(to the extent such period does not exceed the term hereof) exceeds the amount
to be paid as rent for the Premises for such period or (ii) at the option of
Landlord, rents received from such subletting shall be applied first to payment
of indebtedness other than rent due hereunder from Tenant to Landlord; second,
to the payment of any costs of such subletting and of such alterations and
repairs; third to payment of rent due and unpaid hereunder; and the residue, if
any, shall be held by Landlord and applied in payment of future rent as the same
becomes due hereunder. If Tenant has been credited with any rent to be received
by such subletting under option (i) and such rent shall not be promptly paid to
Landlord by the subtenant(s), or if such rentals received from such subletting
under option (ii) during any month be less than that to be paid during that
month by Tenant hereunder, Tenant shall pay any such deficiency to Landlord.
Such deficiency shall be calculated and paid monthly. For all purposes set forth
in this subparagraph (d), Landlord is hereby irrevocably appointed
attorney-in-fact for Tenant, with power of substitution. No taking possession of
the Premises by Landlord, as attorney-in-fact for Tenant, shall be construed as
an election on its part to terminate this Lease unless a written notice of such
intention be given to Tenant. Notwithstanding any such subletting without
termination, Landlord may at any time hereafter elect to terminate this Lease
for such previous breach.
(e) The right to have a receiver appointed for Tenant upon application
by Landlord, to take possession of the Premises and to apply any rental
collected from the Premises and to exercise all other rights and remedies
granted to Landlord as attorney-in-fact for Tenant pursuant to subparagraph (d)
above.
23. ABANDONMENT Tenant shall not vacate or abandon the Premises at any time
during the term of this Lease; and if Tenant shall abandon, vacate or surrender
said Premises, or be dispossessed by the process of law, or otherwise, any
personal property belonging to Tenant and left on the Premises shall be deemed
to be abandoned, at the option of Landlord, except such property as may be
mortgaged to Landlord.
24. DESTRUCTION In the event the Premises are destroyed in whole or in part from
any cause, Landlord may, at its option:
(a) Rebuild or restore the Premises to their condition prior to the
damage or destruction, or
(b) Terminate this Lease.
If Landlord does not give Tenant notice in writing within thirty (30)
days from the destruction of the Premises of its election to either rebuild and
restore them, or to terminate this Lease, Landlord shall be deemed to have
elected to rebuild or restore them, in which event Landlord agrees, at its
expense, promptly to rebuild or restore the Premises to their condition prior to
the damage or destruction. Tenant shall be entitled to a reduction in rent while
such repair is being made in the proportion that the area of the Premises
rendered untenantable by such damage bears to the total area of the Premises. If
Landlord does not complete the rebuilding or restoration within one hundred
eighty (180) days following the date of destruction (such period of time to be
extended for delays caused by the fault or neglect of Tenant or because of Acts
of God, acts of public agencies, labor disputes, strikes, fires, freight
embargoes, rainy or stormy weather, inability to obtain materials, supplies or
fuels, acts of contractors or subcontractors, or delay of the contractors or
subcontractors dues to such causes or other contingencies beyond the control of
Landlord), then Tenant shall have the right to terminate this Lease by giving
fifteen (15) days prior
12
written notice to Landlord. Notwithstanding anything herein to the contrary,
Landlord's obligation to rebuild or restore shall be limited to the building and
interior improvements constructed by Landlord as they existed as of the
commencement date of the Lease and shall not include restoration of Tenant's
trade fixtures, equipment, merchandise or any improvements, alterations or
additions made by Tenant to the Premises, which Tenant shall forthwith replace
or fully repair at Tenant's sole cost and expense provided this Lease is not
canceled according to the provisions above.
Unless this Lease is terminated pursuant to the foregoing provisions,
this Lease shall remain in full force and effect. Tenant hereby expressly waives
the provisions of Section 1932, Subdivision 2, and Section 1933, Subdivision 4
of the California Civil Code.
In the event that the building in which the Premises are situated is
damaged or destroyed to the extent of not less than 33 1/3% of the replacement
cost thereof, Landlord may elect to terminate this Lease, whether the Premises
be injured or not. In the event the destruction of the Premises is caused by
Tenant, Tenant shall pay the deductible portion of Landlord's insurance
proceeds.
25. EMINENT DOMAIN If all or any part of the Premises shall be taken by any
public or quasi-public authority under the power of eminent domain or conveyance
in lieu thereof, this Lease shall terminate as to any portion of the Premises so
taken or conveyed on the date when title vests in the condemnor, and Landlord
shall be entitled to any and all payment, income, rent, award or any interest
therein whatsoever which may be paid or made in connection with such taking or
conveyance, and Tenant shall have no claim against Landlord or otherwise for the
value of any unexpired term of this Lease. Notwithstanding the foregoing
paragraph, any compensation specifically awarded Tenant for loss of business,
Tenant's personal property, moving cost or loss of goodwill, shall be and remain
the property of Tenant.
If (i) any action or proceeding is commenced for such taking of the
Premises or any part thereof, or if Landlord is advised in writing by any entity
or body having the right or power of condemnation of its intention to condemn
the Premises or any portion thereof, or if any of the foregoing events occur
with respect to the taking of any space in the Complex not leased hereby, or any
such spaces is so taken or conveyed in lieu of such taking and Landlord shall
decide to discontinue the use and operation of the Complex, or decide to
demolish, alter or rebuild the Complex, then in any of such events Landlord
shall have the right to terminate this Lease by giving Tenant written notice
thereof within sixty (60) days of the date of receipt of said written advice, or
commencement of said action or proceeding, or taking or conveyance, which
termination shall take place as of the first to occur of the last day of the
calendar month next following the month in which such notice is given or the
date on which title to the Premises shall vest in the condemnor.
In the event of such a partial taking or conveyance of the Premises,
if the portion of the Premises taken or conveyed is so substantial that the
Tenant can no longer reasonably conduct its business, Tenant shall have the
privilege of terminating this Lease within sixty (60) days from the date of such
taking or conveyance, upon written notice to Landlord of its intention so to do,
and upon giving of such notice this Lease shall terminate on the last day of the
calendar month next following the month in which such notice is given, upon
payment by Tenant of the rent from the date of such taking or conveyance to the
date of termination.
If a portion of the Premises be taken by condemnation or conveyance in
lieu thereof and neither Landlord nor Tenant shall terminate this Lease as
provided herein, this Lease shall continue in full force and effect as to the
part of the Premises not so taken or conveyed, and the rent herein shall be
apportioned as of the date of such taking or conveyance so that thereafter the
rent to be paid by Tenant shall be in the ratio that the area of the portion of
the Premises not so taken or conveyed bears to the total area of the Premises
prior to such taking.
26. SALE OR CONVEYANCE BY LANDLORD In the event of a sale or conveyance of the
Complex or any interest therein, by any owner of the reversion then constituting
Landlord, the transferor shall thereby be released from any further liability
upon any of the terms, covenants or conditions (express or implied) herein
contained in favor of Tenant, and in such event, insofar as such transfer is
concerned, Tenant agrees to look solely to the responsibility of the successor
in interest of such transferor in and to the Complex and this Lease. This Lease
shall not be affected by any such sale or conveyance, and Tenant agrees to
attorn to the successor in interest of such transferor.
27. ATTORNMENT TO LENDER OR THIRD PARTY In the event the interest of Landlord in
the land and buildings in which the leased Premises are located (whether such
interest of Landlord is a fee
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title interest or a leasehold interest) is encumbered by deed of trust, and such
interest is acquired by the lender or any third party through judicial
foreclosure or by exercise of a power of sale at private trustee's foreclosure
sale, Tenant hereby agrees to attorn to the purchaser at any such foreclosure
sale and to recognize such purchaser as the Landlord under this Lease. In the
event the lien of the deed of trust securing the loan from a Lender to Landlord
is prior and paramount to the lease, this Lease shall nonetheless continue in
full force and effect for the remainder of the unexpired term hereof, at the
same rental herein reserved and upon all the other terms, conditions and
covenants herein contained.
28. HOLDING OVER Any holding over by Tenant after expiration or other
termination of the term of this Lease with the written consent of Landlord
delivered to Tenant shall not constitute a renewal or extension of the Lease or
give Tenant any rights in or to the leased Premises except as expressly provided
in this Lease. Any holding over after the expiration or other termination of the
term of this lease, with the consent of Landlord, shall be construed to be a
tenancy from month to month, on the same terms and conditions herein specified
insofar as applicable except that the monthly Basic Rent shall be increased to
an amount equal to one hundred fifty (150%) percent of the monthly Basic Rent
required during the last month of the Lease term.
29. CERTIFICATE OF ESTOPPEL Tenant shall at any time upon not less than ten
(10) days' prior written notice from Landlord execute, acknowledge and deliver
to Landlord a statement in writing (i) certifying that this Lease is unmodified
and in full force and effect (or, if modified, stating the nature of such
modification and certifying that this Lease, as so modified, is in full force
and effect) and the date to which the rent and other charges are paid in
advance, if any, and (ii) acknowledging that there are not, to Tenant's
knowledge, any uncured defaults on the part of Landlord hereunder, or specifying
such defaults, if any, are claimed. Any such statement may be conclusively
relied upon by any prospective purchaser or encumbrancer of the Premises.
Tenant's failure to deliver such statement within such time shall be conclusive
upon Tenant that this Lease is in full force and effect, without modifications
except as may be represented by Landlord; that there are no uncured defaults in
Landlord's performance, and that not more than one month's rent has been paid in
advance.
30. CONSTRUCTION CHANGES It is understood that the description of the Premises
and the location of the ductwork, plumbing and other facilities therein are
subject to such minor changes as Landlord or Landlord's architect determines to
be desirable in the course of construction of the Premises, and no such changes,
or any changes in plans for any other portions of the Complex shall affect this
Lease or entitle Tenant to any reduction of rent hereunder or result in any
liability of Landlord to Tenant. Landlord does not guarantee the accuracy of any
drawings supplied to Tenant and verification of the accuracy of such drawings
rests with Tenant.
31. RIGHT OF LANDLORD TO PERFORM All terms, covenants and conditions of this
Lease to be performed or observed by Tenant shall be performed or observed by
Tenant at Tenant's sole cost and expense and without any reduction of rent. If
Tenant shall fail to pay any sum of money, or other rent, required to be paid by
it hereunder or shall fail to perform any other term or covenant hereunder on
its part to be performed, and such failure shall continue for five (5) days
after written notice thereof by Landlord, Landlord, without waiving or releasing
Tenant from any obligation of Tenant hereunder, may, but shall not be obligated
to, make any such payment or perform any such other term or covenant on Tenant's
part to be performed. All sums so paid by Landlord and all necessary costs of
such performance by Landlord together with interest thereon at the rate of the
prime rate of interest per annum as quoted by the Bank of America from the date
of such payment of performance by Landlord, shall be paid (and Tenant covenants
to make such payment) to Landlord on demand by Landlord, and Landlord shall have
(in addition to any other right or remedy of Landlord) the same rights and
remedies in the event of non-payment by Tenant as in the case of failure by
Tenant in the payment of rent hereunder.
32. ATTORNEYS FEES
(A) In the event that Landlord should bring suit for the possession of
the Premises, for the recovery of any sum due under this Lease, or because of
the breach of any provision of this Lease, or for any other relief against
Tenant hereunder, then all costs and expenses, including reasonable attorney's
fees, incurred by the prevailing party therein shall be paid by the other party,
which obligation on the part of the other party shall be deemed to have accrued
on the date of the commencement of such action and shall be enforceable whether
or not the action is prosecuted to judgement.
(B) Should Landlord be named as a defendant in any suit brought
against Tenant in connection
14
with or arising out of Tenant's occupancy hereunder, Tenant shall pay to
Landlord its costs and expenses incurred in such suit, including a reasonable
attorney's fee.
33. WAIVER The waiver by either party of the other party's failure to perform or
observe any term, covenant or condition herein contained to be performed or
observed by such waiving party shall not be deemed to be a waiver of such term,
covenant or condition or of any subsequent failure of the party failing to
perform or observe the same or any other such term, covenant or condition
therein contained, and no custom or practice which may develop between the
parties hereto during the term hereof shall be deemed a waiver of, or in any way
affect, the right of either party to insist upon performance and observance by
the other party in strict accordance with the terms hereof.
34. NOTICES All notices, demands, requests, advices or designations which may be
or are required to be given by either party to the other hereunder shall be in
writing. All notices, demands, requests, advices or designations by Landlord to
Tenant shall be sufficiently given, made or delivered if personally served on
Tenant by leaving the same at the Premises or if sent by United States certified
or registered mail, postage prepaid, addressed to Tenant at the Premises. All
notices, demands, requests, advices or designations by Tenant to Landlord shall
be sent by United States certified or registered mail, postage prepaid,
addressed to Landlord at its offices at 3201 Ash Street, Palo Alto, CA 94306.
Each notice, request, demand advice or designation referred to in this paragraph
shall be deemed received on the date of the personal service or mailing thereof
in the manner herein provided, as the case may be.
35. EXAMINATION OF LEASE Submission of this instrument for examination or
signature by Tenant does not constitute a reservation of or option for a lease,
and this instrument is not effective as a lease or otherwise until its execution
and delivery by both Landlord and Tenant. Landlord and Tenant mutually intend
that neither shall have any binding contractual obligations to the other with
respect to the matters referred to herein unless and until this instrument has
been fully executed by both parties.
36. DEFAULT BY LANDLORD Landlord shall not be in default unless Landlord fails
to perform obligations required of Landlord within a reasonable time, but in no
event earlier than thirty (30) days after written notice by Tenant to Landlord
and to the holder of any first mortgage or deed of trust covering the Premises
whose name and address shall have heretofore been furnished to Tenant in
writing, specifying wherein Landlord has failed to perform such obligations;
provided, however, that if the nature of Landlord's obligations is such than
more than thirty (30) days are required for performance, then Landlord shall not
be in default if Landlord commences performance within such thirty (30) day
period and thereafter diligently prosecutes the same to completion.
37. CORPORATE AUTHORITY
If Tenant is a corporation (or a partnership) each individual
executing this Lease on behalf of said corporation (or partnership) represents
and warrants that he is duly authorized to execute and deliver this Lease on
behalf of said corporation (or partnership) in accordance with the by-laws of
said corporation (or partnership in accordance with the partnership agreement)
and that this Lease is binding upon said corporation (or partnership) in
accordance with its terms. If Tenant is a corporation, Tenant shall, within
thirty (30) days after execution of this Lease, deliver to Landlord a certified
copy of the resolution of the Board of Directors of said corporation authorizing
or ratifying the execution of this Lease.
38. (deleted)
39. LIMITATION OF LIABILITY In consideration of the benefits accruing hereunder,
Tenant and all successors and assigns covenant and agree that, in the event of
any actual or alleged failure, breach or default hereunder by Landlord:
(i) the sole and exclusive remedy shall be against Landlord and
Landlord's assets;
(ii) no partner of Landlord shall be sued or named as a party in
any suit or action (except as may be necessary to secure
jurisdiction of the partnership)
(iii) no service of process shall be made against any partner of
Landlord (except as may be necessary to secure jurisdiction
of the partnership)
(iv) no partner of Landlord shall be required to answer or
otherwise plead to any service of process;
(v) no judgement shall be taken against any partner of Landlord;
(vi) any judgement taken against any partner of Landlord may be
vacated and set aside at any
15
time without hearing;
(vii) no writ of execution will ever be levied against the assets
of any partner of Landlord;
(viii) these covenants and agreements are enforceable both by
Landlord and also by any partner of Landlord.
(ix) The term, "Landlord", as used in this section, shall mean
only the owner or owners from time to time of the fee title
or the tenant's interest under a ground lease of the land
described in Exhibit "B", and in the event of any transfer
of such title or interest, Landlord herein named (and in
case of any subsequent transfers the then grantor) shall be
relieved from and after the date of such transfer of all
liability as respects Landlord's obligations thereafter to
be performed, provided that any funds in the hands of
Landlord or the then grantor at the time of such transfer,
in which Tenant has an interest, shall be delivered to the
grantee. Similarly, the obligations contained in this Lease
to be performed by Landlord shall be binding on Landlord's
successors and assigns only during their respective periods
of ownership. Tenant agrees that each of the foregoing
covenants and agreements shall be applicable to any covenant
or agreement either expressly contained in this Lease or
imposed by statute or at common law.
40. BROKERS Tenant warrants that it had dealing with only of the following real
estate brokers or agents in connection with the negotiation of this Lease:
CORNISH AND CAREY and that it knows of no other real estate broker or agent who
is entitled to a commission in connection with this Lease.
41. SIGNS No sign, placard, picture, advertisement, name or notice shall be
inscribed, displayed, printed or affixed on or to any part of the outside of the
Premises or any exterior windows of the Premises without the written consent of
Landlord first had and obtained and Landlord shall have the right to remove any
unconsented to sign, placard, picture, advertisement, name or notice without
notice to and at the expense of Tenant. If Tenant is allowed to print or affix
or in any way place a sign in, on, or about the Premises, then upon expiration
or other sooner termination of this Lease, Tenant at Tenant's sole cost and
expense shall both remove such sign and repair all damage in such manner as to
restore all aspects of the appearance of the Premises to the condition prior to
the placement of said sign.
All approved signs or lettering on outside 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.
42. FINANCIAL STATEMENTS In the event Tenant tenders to Landlord any information
on the financial stability, credit worthiness or ability of the Tenant to pay
the rent due and owing under the Lease, then Landlord shall be entitled to rely
upon the information provided in determining whether or not to enter into this
Lease Agreement with Tenant and Tenant hereby represents and warrants to
Landlord the following: (i) That all documents provided by Tenant to Landlord
are true and correct copies of the original; and (ii) Tenant has not withheld
any information from Landlord which is material to Tenant's credit worthiness,
financial condition or ability to pay the rent; and (iii) all information
supplied by Tenant to Landlord is true, correct and accurate; and (iv) no part
of the information supplied by Tenant to Landlord contains misleading or
fraudulent statements.
A default under this paragraph shall be a non-curable default on
behalf of Tenant and Landlord shall be entitled to pursue any right or remedy
available to Landlord under the terms of this Lease or available to Landlord
under the laws of the State of California.
43. HAZARDOUS MATERIALS
A. As used herein, the term "Hazardous Material" shall mean any
substance or material which has been determined by any state, federal or local
governmental authority to be capable of posing a risk of injury to health,
safety or property including all of those materials and substances designated or
defined as "hazardous" or "toxic" by (i) the Environmental Protection Agency,
the California Water Quality Control Board, the Department of Labor, the
California Department of Industrial Relations, the Department of Transportation,
the Department of Agriculture, the Consumer Product Safety Commission, the
Department of Health and Human Services, the Food and Drug Agency or any other
governmental agency now or hereafter authorized to regulate materials and
substances in the environment, or by (ii) the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42 U.S.C. 9601 et seq., as
amended; the Hazardous Materials Transportation Act, 49 U.S.C. 1801, et seq., as
amended; the
16
Resource Conservation and Recovery Act, 42 U.S.C. 6901, et seq., as amended; the
Hazardous Waste Control Law, California Health & Safety Code 25100 et seq., as
amended; Sections 66680 through 66685 of Title 22 of the California
Administration Code, Division 4, Chapter 30, as amended; and in the regulations
adopted and publications promulgated pursuant to said laws.
B. Tenant shall not cause or permit any Hazardous Material to be
improperly or illegally used, stored, discharged, released or disposed of in,
from, under or about the Premises or the Complex, or any other land or
improvements in the vicinity of the Premises or the Complex. Without limiting
the generality of the foregoing, Tenant, at its sole cost, shall comply with all
laws relating to Hazardous Materials. If the presence of Hazardous Materials on
the Premises or the Complex caused or permitted by Tenant results in
contamination of the Premises or the Complex or any soil in or about the
Premises or the Complex, Tenant, as its expense shall promptly take all actions
necessary to return the Premises or the Complex to the condition existing prior
to the appearance of such Hazardous Material. The termination of this Lease
shall not terminate or reduce the liability or obligations of Tenant under this
Section, or as may be required by law, to clean up, monitor or remove any
Hazardous Materials from the Premises or the Complex.
Tenant shall defend, hold harmless and indemnify Landlord and its
agents and employees with respect to all claims, damages and liabilities arising
out of or in connection with any Hazardous Material used, stored, discharged,
released or disposed of in, from, under or about the Premises or the Complex,
where said Hazardous Material is or was attributable to the activities of
Tenant, its agents or contractors during the Lease term and whether or not
Tenant had knowledge of such Hazardous Material, including, without limitation,
any cost of monitoring or removal, any reduction in the fair market value or
fair rental value of the Premises or the Complex and any loss, claim or demand
by any third person or entity relating to bodily injury or damage to real or
personal property.
Tenant shall not suffer any lien to be recorded against the Premises
or the Complex as a consequence of a Hazardous Material, including any so called
state, federal or local "super fund" lien related to the "clean up" of a
Hazardous Material in or about the Premises, where said Hazardous Material is or
was attributable to the activities of Tenant.
C. In the event Hazardous Materials are discovered in or about the
Premises or the Complex, and Landlord has substantial reason to believe that
Tenant was responsible for the presence of the Hazardous Material, then Landlord
shall have the right to appoint a consultant, at Tenant's expense, to conduct an
investigation to determine whether Hazardous Materials are located in or about
the Premises or the Complex and to determine the corrective measures, if any,
required to remove such Hazardous Materials. Tenant, at its expense, shall
comply with all recommendations of the consultant, as required by law. To the
extent it is determined that Tenant was not responsible for the presence of the
Hazardous Materials, then Landlord shall reimburse Tenant for any costs incurred
by Landlord and paid by Tenant under the terms of this paragraph 45.C.
Tenant shall immediately notify Landlord of any inquiry, test,
investigation or enforcement proceeding by or against Tenant or the Premises or
the Complex concerning a Hazardous Material. Tenant acknowledges that Landlord,
as the owner of the Property, at its election, shall have the sole right, at
Tenant's expense, to negotiate, defend, approve and appeal any action taken or
order issued with regard to a Hazardous Material by an applicable governmental
authority. Provided Tenant is not in default under the terms of this Lease,
Tenant shall likewise have the right to participate in any negotiations,
approvals or appeals of any actions taken or orders issued with regard to the
Hazardous Material and Landlord shall not have the right to bind Tenant in said
actions or orders.
D. It shall not be unreasonable for Landlord to withhold its consent
to any proposed assignment or subletting if (i) the proposed assignee's or
subtenant's anticipated use of the Premises involves the storage, use or
disposal of Hazardous Material; (ii) if the proposed assignee or subtenant has
been required by any prior landlord, lender or governmental authority to "clean
up" Hazardous Material; (iii) if the proposed assignee or subtenant is subject
to investigation or enforcement order or proceeding by any governmental
authority in connection with the use, disposal or storage of a Hazardous
Material.
E. Tenant shall surrender the Premises to Landlord, upon the
expiration or earlier termination of the Lease, free of Hazardous Materials
which are or were attributable to Tenant. If Tenant fails to so surrender the
Premises, Tenant shall indemnify and hold Landlord harmless from all damages
resulting from Tenant's failure to surrender the Premises as required by this
paragraph, including, without limitation, any claims or damages in connection
with the condition of the Premises including, without
17
limitation, damages occasioned by the inability to relet the Premises or a
reduction in the fair market and/or rental value of the Premises or the Complex
by reason of the existence of any Hazardous Materials, which are or were
attributable to the activities of Tenant, in or around the Premises or the
Complex. Notwithstanding any provision to the contrary in this Lease, if any
action is required to be taken by a governmental authority to clean-up, monitor
or remove any Hazardous Materials, which are or were attributable to the
activities of Tenant, from the Premises or the Complex and such action is not
completed prior to the expiration or earlier termination of the Lease, then at
Landlord's election (i) this Lease shall be deemed renewed for a term commencing
on the expiration date of this Lease and ending on the date the clean-up,
monitoring or removal procedure is completed (provided, however, that the total
term of this Lease shall not be longer than 34 years and 11 months); or (ii)
Tenant shall be deemed to have impermissibly held over and Landlord shall be
entitled to all damages directly or indirectly incurred in connection with such
holding over, including without limitation damages occasioned by the inability
to relet the Premises or a reduction in the fair market and/or fair rental value
of the Premises or the Complex by reason of the existence of the Hazardous
Material.
F. Upon the Lease Commencement Date, Tenant shall provide to Landlord
a complete list of all chemicals, toxic waste or Hazardous Materials employed
by Tenant within the Premises. Throughout the terms of the Lease, Tenant shall
continue to update this list of chemicals, contaminants and Hazardous Materials.
Landlord hereby represents to Tenant that Landlord is not aware
(without a duty to inspect) of the presence of any Hazardous Materials that
would affect Tenant's use and occupancy of the Premises. Notwithstanding
anything herein to the contrary, Landlord agrees to hold Tenant harmless from
any cost or expense related to Hazardous Materials that were in existence at the
Premises or Complex prior to the commencement of the Lease or which are not
attributable to Tenant's activities or Tenant's use and occupancy of the
Premises.
44. MISCELLANEOUS AND GENERAL PROVISIONS
a. Tenant shall not, without the written consent of Landlord, use the
name of the building for any purpose other than as the address of the
business conducted by Tenant in the Premises.
b. This Lease shall in all respects be governed by and construed in
accordance with the laws of the State of California. If any provision
of this Lease shall be invalid, unenforceable or ineffective for any
reason whatsoever, all other provisions hereof shall be and remain in
full force and effect.
c. The term "Premises" includes the space leased hereby and any
improvements now or hereafter installed therein or attached thereto.
The term "Landlord" or any pronoun used in place thereof includes the
plural as well as the singular and the successors and assigns of
Landlord. The term "Tenant" or any pronoun used in place thereof
includes the plural as well as the singular and individuals, firms,
associations, partnerships and corporations, and each of their
respective heirs, executors, administrators, successors and permitted
assigns, according to the context hereof, and the provisions of this
Lease shall inure to the benefit of and bind such heirs, executors,
administrators, successors and permitted assigns.
The term "person" includes the plural as well as the singular and
individuals, firms, associations, partnerships and corporations. Words
used in any gender include other genders. If there be more than one
Tenant the obligations of Tenant hereunder are joint and several. The
paragraph headings of this Lease are for convenience of reference only
and shall have no effect upon the construction or interpretation of
any provision hereof.
d. Time is of the essence of this Lease and of each and all of its
provisions.
e. At the expiration or earlier termination of this Lease, Tenant
shall execute, acknowledge and deliver to Landlord, within ten (10)
days after written demand from Landlord to Tenant, any quitclaim deed
or other document required by any reputable title company, licensed to
operate in the State of California, to remove the cloud or encumbrance
created by this Lease from the real property of which Tenant's
Premises are a part.
f. This instrument along with any exhibits and attachments hereto
constitutes the entire agreement
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between Landlord and Tenant relative to the Premises and this
agreement and the exhibits and attachments may be altered, amended or
revoked only by an instrument in writing signed by both Landlord and
Tenant. Landlord and Tenant hereby agree that all prior or
contemporaneous oral agreements between and among themselves and the
agents or representatives relative to the leasing of the Premises are
merged in or revoked by this agreement.
g. Neither Landlord nor Tenant shall record this Lease or a short form
memorandum hereof without the consent of the other.
h. Tenant further agrees to execute any amendments required by a
lender to enable Landlord to obtain financing, so long as Tenant's
rights hereunder are not substantially affected.
i. Paragraph(s) _________ through _________ are/is added hereto and
are/is included as a part of this Lease.
j. Clauses, plats and riders, if any, signed by Landlord and Tenant
and endorsed on or affixed to this Lease are a part hereof.
k. Tenant covenants and agrees that no diminution or shutting off of
light, air or view by any structure which may be hereafter erected
(whether or not by Landlord) shall in any way affect this Lease,
entitle Tenant to any reduction of rent hereunder or result in any
liability of Landlord to Tenant.
IN WITNESS WHEREOF, Landlord and Tenant have executed and delivered this
Lease as of the day and year first above written.
LANDLORD: TENANT:
By /s/[ILLEGIBLE] By: /s/[ILLEGIBLE]
-------------------------------- ---------------------------------
Date: 13 OCT 99 Date: 10/12/99
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EXHIBIT "A"
380 PORTAGE
PALO ALTO
EXHIBIT B
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