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Exhibit 10.17
FIRST AMENDMENT TO LEASE AGREEMENT
This First Amendment to Lease Agreement (the "Amendment") is made and entered
into to be effective as of December 14, 2000, by and between AMB PROPERTY, L.P.,
a Delaware limited partnership ("Landlord"), and HYSEQ, INC., a Nevada
corporation ("Tenant"), with reference to the following facts:
RECITALS
A. Landlord and Tenant have entered into that certain Lease Agreement dated June
23, 2000 (the "Lease"), for the leasing of certain premises containing
approximately 59,300 rentable square feet of space located at 225, 249 and 257
Humboldt Court, Sunnyvale, California (the "Premises") as such Premises are more
fully described in the Lease.
B. Landlord and Tenant wish to amend certain provisions of the Lease associated
with a Change in the Commencement Date.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Landlord and Tenant hereby agree as follows:
1. RECITALS: Landlord and Tenant agree that the above recitals are
true and correct.
2. PREMISES: Tenant's occupancy of the Expansion Premises 1 shall
be modified to March 1, 2001
3. TERM: The Expansion Premises 1 Commencement Date of the Lease
shall be March 1, 2001 (the "EP 1 Commencement Date").
4. BASE RENT: The dates on which the Base Rent will be adjusted
are:
August 1, 2000 through and including February 28, 2001 = $ 98,175.00
March 1, 2001 through and including July 31, 2001 = $252,025.00
August 1, 2001 through and including July 31, 2002 = $264,626.00
August 1, 2002 through and including July 31, 2003 = $277,858.00
August 1, 2003 through and including July 31, 2004 = $291,750.00
August 1, 2004 through and including July 31, 2005 = $306,338.00
August 1, 2005 through and including July 31, 2006 = $321,655.00
August 1, 2006 through and including July 31, 2007 = $337,738.00
August 1, 2007 through and including July 31, 2008 = $354,625.00
August 1, 2008 through and including July 31, 2009 = $372,356.00
August 1, 2009 through and including July 31, 2010 = $390,974.00
August 1, 2010 through and including July 31, 2011 = $410,522.00
5. TENANT'S SHARE OF OPERATING EXPENSES: As of the EP 1 Commencement
Date, the Lease shall be modified to provide that Tenant's Share of Operating
Expenses (as defined in the Basic Provisions and Section 4.2 of the Lease) shall
be increased to 83.05%.
6. EFFECT OF AMENDMENT: Except as modified herein, the terms and
conditions of the Lease shall remain unmodified and continue in full force and
effect. In the event of any conflict between the terms and conditions of the
Lease and this Amendment, the terms and conditions of this Amendment shall
prevail.
7. DEFINITIONS: Unless otherwise defined in this Amendment, all terms
not defined in this Amendment shall have the meaning set forth in the Lease.
8. AUTHORITY: Subject to the provisions of the Lease, this Amendment
shall be binding upon and inure to the benefit of the parties hereto, their
respective heirs, legal representatives, successors and assigns. Each party
hereto and the persons signing below warrant that the person signing below on
such party's behalf is authorized to do so and to bind such party to the terms
of this Amendment.
9. The terms and provisions of the Lease are hereby incorporated in this
Amendment.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date and
year first above written.
Landlord: Tenant:
AMB PROPERTY, L.P., HYSEQ, INC.,
a Delaware limited partnership a Nevada corporation
By: AMB PROPERTY CORPORATION,
a Maryland corporation,
its general partner
By: /s/ JOHN L. ROSSI By: /s/ GEORGE B. RATHMANN
----------------------- ---------------------------
John L. Rossi George B. Rathmann
Its: Vice President Its: Chief Executive Officer
----------------------- --------------------------
Executed at: San Francisco, CA Executed at: Sunnyvale, CA
------------------------- ------------------
on: March 16, 2001 on: February 28, 2001
---------------------------------- ---------------------------
Landlord's Address: Tenant's Address:
Pier 1, Bay 1 670 Almanor Ave.
San Francisco, CA 94111 Sunnyvale, CA 94085
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With a copy to: Tenant's Address:
Legacy Partners Commercial, Inc. __________________________________
101 Lincoln Center Drive/4th Floor __________________________________
Foster City, California 94404
Attention: Humboldt Business Center
Phone: (650) 571-2200
FAX: (650) 571-2211
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INDUSTRIAL MULTI-TENANT LEASE
HUMBOLDT BUSINESS CENTER
SUNNYVALE, CALIFORNIA
DATED JUNE 23, 2000
AMB PROPERTY, L.P.,
A DELAWARE LIMITED PARTNERSHIP
AS LANDLORD,
AND
HYSEQ, INC.,
A NEVADA CORPORATION
AS TENANT
AFFECTING PREMISES COMMONLY KNOWN AS
225, 249 & 257 HUMBOLDT CT.
SUNNYVALE, CALIFORNIA
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TABLE OF CONTENTS
1. BASIC PROVISIONS ("BASIC PROVISIONS")....................................................2
1.1 PARTIES..............................................................................2
1.2 PREMISES.............................................................................2
1.3 TERM.................................................................................2
1.4 BASE RENT............................................................................2
1.5 TENANT'S SHARE OF OPERATING EXPENSES ("TENANT'S SHARE"):.............................3
1.6 TENANT'S ESTIMATED MONTHLY RENT PAYMENT..............................................3
1.7 SECURITY DEPOSIT.....................................................................3
1.8 PERMITTED USE ("PERMITTED USE")......................................................3
1.9 GUARANTOR............................................................................3
1.10 ADDENDUM...........................................................................3
1.11 EXHIBITS...........................................................................3
1.12 ADDRESS FOR RENT PAYMENTS..........................................................3
2. PREMISES, PARKING AND COMMON AREAS.......................................................3
2.1 LETTING..............................................................................3
2.2 COMMON AREAS - DEFINITION............................................................4
2.3 COMMON AREAS - TENANT'S RIGHTS.......................................................4
2.4 COMMON AREAS - RULES AND REGULATIONS.................................................4
2.5 COMMON AREA CHANGES..................................................................4
2.6 PARKING..............................................................................4
3. TERM.....................................................................................4
3.1 TERM.................................................................................4
3.2 DELAY IN POSSESSION..................................................................4
3.3 COMMENCEMENT DATE CERTIFICATE........................................................5
4. RENT.....................................................................................5
4.1 OPERATING EXPENSES...................................................................5
5. SECURITY DEPOSIT.........................................................................6
6. USE......................................................................................6
6.1 PERMITTED USE........................................................................6
6.2 HAZARDOUS SUBSTANCES.................................................................6
6.3 TENANT'S COMPLIANCE WITH REQUIREMENTS................................................7
6.4 INSPECTION; COMPLIANCE WITH LAW......................................................8
6.5 HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE...........................................8
7. MAINTENANCE, REPAIRS, TRADE FIXTURES AND ALTERATIONS.....................................8
7.1 TENANT'S OBLIGATIONS.................................................................8
7.2 LANDLORD'S OBLIGATIONS...............................................................8
7.3 ALTERATIONS..........................................................................8
7.4 SURRENDER/RESTORATION................................................................8
8. INSURANCE; INDEMNITY.....................................................................9
8.1 PAYMENT OF PREMIUMS..................................................................9
8.2 TENANT'S INSURANCE...................................................................9
8.3 LANDLORD'S INSURANCE.................................................................9
8.4 WAIVER OF SUBROGATION...............................................................10
8.5 INDEMNITY...........................................................................10
8.6 EXEMPTION OF LANDLORD FROM LIABILITY................................................10
9. DAMAGE OR DESTRUCTION...................................................................10
9.1 TERMINATION RIGHT...................................................................10
9.2 DAMAGE CAUSED BY TENANT.............................................................11
10. REAL PROPERTY TAXES.....................................................................11
10.1 PAYMENT OF REAL PROPERTY TAXES....................................................11
10.2 REAL PROPERTY TAX DEFINITION......................................................11
10.3 JOINT ASSESSMENT..................................................................11
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10.4 TENANT'S PROPERTY TAXES...........................................................11
11. UTILITIES...............................................................................11
12. ASSIGNMENT AND SUBLETTING...............................................................11
12.1 LANDLORD'S CONSENT REQUIRED.......................................................11
12.2 RENT ADJUSTMENT...................................................................12
12.3 EXCESS CONSIDERATION..............................................................12
12.4 AFFILIATED........................................................................12
13. DEFAULT; REMEDIES.......................................................................13
13.1 DEFAULT...........................................................................13
13.2 REMEDIES..........................................................................14
13.3 LATE CHARGES......................................................................14
14. CONDEMNATION............................................................................14
15. ESTOPPEL CERTIFICATE AND FINANCIAL STATEMENTS...........................................14
15.1 ESTOPPEL CERTIFICATE..............................................................14
15.2 FINANCIAL STATEMENT...............................................................14
16. ADDITIONAL COVENANTS AND PROVISIONS.....................................................14
16.1 SEVERABILITY......................................................................14
16.2 INTEREST ON PAST-DUE OBLIGATIONS..................................................14
16.3 TIME OF ESSENCE...................................................................15
16.4 LANDLORD LIABILITY................................................................15
16.5 NO PRIOR OR OTHER AGREEMENTS......................................................15
16.6 NOTICE REQUIREMENTS...............................................................15
16.7 DATE OF NOTICE....................................................................15
16.8 WAIVERS...........................................................................15
16.9 HOLDOVER..........................................................................15
16.10 CUMULATIVE REMEDIES...............................................................15
16.11 BINDING EFFECT: CHOICE OF LAW.....................................................16
16.12 LANDLORD..........................................................................16
16.13 ATTORNEYS' FEES AND OTHER COSTS...................................................16
16.14 LANDLORD'S ACCESS; SHOWING PREMISES; REPAIRS......................................16
16.15 SIGNS.............................................................................16
16.16 TERMINATION: MERGER...............................................................16
16.17 QUIET POSSESSION..................................................................16
16.18 SUBORDINATION; ATTORNMENT; NON-DISTURBANCE........................................16
16.19 RULES AND REGULATIONS.............................................................17
16.20 SECURITY MEASURES.................................................................17
16.21 RESERVATIONS......................................................................17
16.22 CONFLICT..........................................................................17
16.23 OFFER.............................................................................17
16.24 AMENDMENTS........................................................................17
16.25 MULTIPLE PARTIES..................................................................18
16.26 AUTHORITY.........................................................................18
17. LETTER OF CREDIT........................................................................18
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AMB PROPERTY CORPORATION
INDUSTRIAL MULTI-TENANT LEASE
1. BASIC PROVISIONS ("BASIC PROVISIONS").
1.1 PARTIES: This Lease ("Lease") dated June 23, 2000, is made by and
between AMB PROPERTY, L.P., a Delaware limited partnership, ("Landlord") and
HYSEQ, INC., a Nevada corporation, ("Tenant") (collectively the "Parties," or
individually a "Party").
1.2 PREMISES: Commencing August 1, 2000, a portion of the buildings
("Building" or "Buildings") consisting of 23,100 square feet of leasable area
located at 257 Humboldt Court ("Initial Premises") increasing on November 1,
2000 by 25,200 square feet, of the Building located at 225 Humboldt Court
("Expansion Premises 1"), increasing on March 1, 2001 by 11,000 square feet, of
the Building located at 249 Humboldt Court ("Expansion Premises 2") to an
aggregate of 59,300 square feet, located at 225, 249 & 257 Humboldt Court, in
the City of Sunnyvale, State of California collectively & hereinafter referred
to as ("Premises"), as outlined on Exhibit A attached hereto. The Buildings are
located in the business center commonly known as Humboldt Business Center (the
"Business Center"). Tenant shall have non-exclusive rights to the Common Areas
(as defined in Paragraph 2.3 below), but shall not have any rights to the roof,
exterior walls or utility raceways of the Building or to any other buildings in
the Business Center. The Premises, the Building, the Common Areas, the land upon
which they are located and all other buildings and improvements thereon are
herein collectively referred to as the "Business Center." Tenant acknowledges
that the Initial Premises, Expansion Premises 1 and Expansion Premises 2 are
presently occupied by tenants (the "Existing Tenants"). In the event the
Existing Tenants do not vacate the Initial Premises, Expansion Premises 1 or
Expansion Premises 2 by the Commencement Dates, Section 3.2 of this Lease shall
apply. In the event any of the Commencement Dates are delayed, the parties agree
to enter into an amendment to this Lease setting forth the new Commencement
Dates and the modified Base Rent schedule.
1.3 TERM: The term for the Initial Premises shall be Eleven (11) years;
the term for the Expansion Premises 1 shall be Ten (10) years and Nine (9)
months and the term for the Expansion Premises 2 shall be Ten (10) years and
Five (5) months (collectively the "Term"), commencing on August 1, 2000 for the
Initial Premises, November 1, 2000 for the Expansion Premises 1 and March 1,
2001 for the Expansion Premises 2, (collectively hereinafter referred to as the
"Commencement Dates") and ending July 31, 2011 ("Expiration Date"). The Lease
shall commence on the Commencement Dates without regard to completion of Tenant
Improvements.
1.4 BASE RENT: Initially $98,175.00 per month ("Base Rent"). Tenant
shall pay advance Base Rent to Landlord in the amount of $2,000,000.00, which
amount shall be payable on execution of this Lease and shall be for the period
of August 1, 2000 through a portion of June, 2001. The initial monthly Base Rent
shall increase according to the following schedule:
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August 1, 2000 through and including October 31, 2000 = $ 98,175.00
November 1, 2000 through and including February 28, 2001 = $205,275.00
March 1, 2001 through and including July 31, 2001 = $252,025.00
August 1, 2001 through and including July 31, 2002 = $264,626.00
August 1, 2002 through and including July 31, 2003 = $277,858.00
August 1, 2003 through and including July 31, 2004 = $291,750.00
August 1, 2004 through and including July 31, 2005 = $306,338.00
August 1, 2005 through and including July 31, 2006 = $321,655.00
August 1, 2006 through and including July 31, 2007 = $337,738.00
August 1, 2007 through and including July 31, 2008 = $354,625.00
August 1, 2008 through and including July 31, 2009 = $372,356.00
August 1, 2009 through and including July 31, 2010 = $390,974.00
August 1, 2010 through and including July 31, 2011 = $410,522.00
Tenant shall pay to Landlord Base Rent eleven months in advance on the first day
of each month commencing August 1, 2000. For example, (1) the Base Rent due on
August 1, 2000, shall be the Base Rent due for June 1, 2001, which amount will
be the balance of the amount due for this month, which amount shall be
$123,725.00 (of the full monthly amount of $252,025.00); and (2) the Base Rent
due on September 1, 2000, shall be the Base Rent due for July 1, 2001, which
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amount shall be $252,025.00. At such time as Tenant has paid all of the Base
Rent for the entire Term, Tenant shall no longer be required to pay Base Rent to
Landlord.
1.5 TENANT'S SHARE OF OPERATING EXPENSES ("TENANT'S SHARE"):
(a) Business Center 32.35% initially, increasing to 67.65% commencing on
November 1, 2000, increasing to 83.05% commencing
March 1, 2001.
(b) Building N/A
1.6 TENANT'S ESTIMATED MONTHLY RENT PAYMENT: Following is the estimated
monthly Rent payment to Landlord pursuant to the provisions of this Lease. This
estimate is made at the inception of the Lease and is subject to adjustment
pursuant to the provisions of this Lease:
(a) Base Rent (Paragraph 4.1) $98,175.00
(b) Estimated Operating Expenses (Paragraph 4.2) $ 3,407.00
(c) Estimated Landlord Insurance (Paragraph 8.3) $ 135.00
(d) Estimated Real Property Taxes (Paragraph 10) $ 2,903.00
ESTIMATED MONTHLY PAYMENT $104,620.00
1.7 SECURITY DEPOSIT: $410,522.00 ("Security Deposit").
1.8 PERMITTED USE ("PERMITTED USE"): General office, storage,
administration, labs and animal facility and assembly, but only to the extent
permitted by the City of Sunnyvale and any and all agencies having jurisdiction
1.9 GUARANTOR: George Rathmann.
1.10 ADDENDUM: Attached hereto is the following Addendum which
constitutes a part of this Lease:
Addendum 1: Landlord's Remedies Addendum in Event of Tenant
Default
1.11 EXHIBITS: Attached hereto are the following Exhibits, all of which
constitute a part of this Lease:
Exhibit A: Diagram of Premises
Exhibit B: Commencement Date Certificate
Exhibit C: Rules and Regulations
Exhibit D: Hazardous Materials Disclosure Certificate
Exhibit E: Tenant Improvements (Intentionally omitted)
1.12 ADDRESS FOR RENT PAYMENTS: All amounts payable by Tenant to
Landlord shall until further notice from Landlord be paid to AMB Property, L.P.
at the following address:
c/o Legacy Partners Commercial, Inc.
P.O. Box 840437
Dallas, TX 75284-0437
2. PREMISES, PARKING AND COMMON AREAS.
2.1 LETTING. Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord the Premises upon all of the terms, covenants and conditions set
forth in this Lease. Any statement of square footage set forth in this Lease or
that may have been used in calculating Base Rent and/or Operating Expenses is an
approximation which Landlord and Tenant agree is reasonable and the Base Rent
and Tenant's Share based thereon is not subject to revision whether or not the
actual square footage is more or less. Tenant accepts the Premises in its
present condition, state of repair and operating order and in its present
"As-Is" condition.
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2.2 COMMON AREAS - DEFINITION. "Common Areas" are all areas and
facilities outside the Premises and within the exterior boundary line of the
Business Center and interior utility raceways within the Premises that are
provided and designated by the Landlord from time to time for the general
non-exclusive use of Landlord, Tenant and other tenants of the Business Center
and their respective employees, suppliers, shippers, tenants, contractors and
invitees.
2.3 COMMON AREAS - TENANT'S RIGHTS. Landlord hereby grants to Tenant,
for the benefit of Tenant and its employees, suppliers, shippers, contractors,
customers and invitees, during the term of this Lease, the non-exclusive right
to use, in common with others entitled to such use, the Common Areas as they
exist from time to time, subject to any rights, powers, and privileges reserved
by Landlord under the terms hereof or under the terms of any rules and
regulations or covenants, conditions and restrictions governing the use of the
Business Center.
2.4 COMMON AREAS - RULES AND REGULATIONS. Landlord shall have the
exclusive control and management of the Common Areas and shall have the right,
from time to time, to establish, modify, amend and enforce reasonable Rules and
Regulations with respect thereto in accordance with Paragraph 16.19.
2.5 COMMON AREA CHANGES. Landlord shall have the right, in Landlord's
sole discretion, from time to time:
(a) To make changes to the Common Areas, including, without
limitation, changes in the locations, size, shape and number of driveways,
entrances, parking spaces, parking areas, loading and unloading areas, ingress,
egress, direction of traffic, landscaped areas, walkways and utility raceways;
(b) To close temporarily any of the Common Areas for maintenance
purposes so long as reasonable access to the Premises remains available;
(c) To designate other land outside the boundaries of the
Business Center to be a part of the Common Areas;
(d) To add additional buildings and improvements to the Common
Areas;
(e) To use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Business Center, or any portion
thereof; and
To do and perform such other acts and make such other changes in, to or with
respect to the Common Areas and Business Center as Landlord may, in the exercise
of sound business judgment, deem to be appropriate.
2.6 PARKING. Tenant may use a proportionate share of undesignated
vehicle parking spaces, unreserved and unassigned, on those portions of the
Common Areas designated by Landlord for such parking. Tenant shall not use more
parking spaces than such number. Such parking spaces shall be used only for
parking by vehicles no larger than full sized passenger automobiles or pick-up
trucks. Tenant shall not permit or allow any vehicles that belong to or are
controlled by Tenant or Tenant's employees, suppliers, shippers, customers or
invitees to be loaded, unloaded or parked in areas other than those designated
by Landlord for such activities. If Tenant permits or allows any of the
prohibited activities described herein, then Landlord shall have the right,
without notice, in addition to such other rights and remedies that it may have,
to remove or tow away the vehicle involved and charge the cost to Tenant, which
cost shall be immediately payable as additional rent upon demand by Landlord.
3. TERM.
3.1 TERM. The Commencement Date, Expiration Date and Term of this Lease
are as specified in Paragraph 1.3.
3.2 DELAY IN POSSESSION. If for any reason Landlord cannot deliver
possession of the Premises to Tenant by the Commencement Date, Landlord shall
not be subject to any liability therefor, nor shall such failure affect the
validity of this Lease or the obligations of Tenant hereunder. In such case,
Tenant shall not, except as otherwise provided herein, be obligated to pay Rent
or perform any other obligation of Tenant under the terms of this Lease until
Landlord delivers possession of the Premises to Tenant. The term of the Lease
shall commence on the
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earlier of (i) the date Tenant takes possession of the Premises to Tenant or
(ii) 10 days following notice to Tenant that Landlord is prepared to tender
possession of the Premises to Tenant. If possession of the Premises is not
delivered to Tenant within 180 days after the Commencement Date and such delay
is not due to Tenant's acts, failure to act or omissions Tenant may by notice in
writing to Landlord within 10 days after the end of said 180 day period cancel
this Lease and the parties shall be discharged from all obligations hereunder.
If such written notice of Tenant is not received by Landlord within said 10 day
period, Tenant's right to cancel this Lease shall terminate.
3.3 COMMENCEMENT DATE CERTIFICATE. At the request of Landlord, Tenant
shall execute and deliver to Landlord a completed certificate ("Commencement
Date Certificate") in the form attached hereto as Exhibit B.
4. RENT.
4.1 Base Rent. Tenant shall pay to Landlord Base Rent and other monetary
obligations of Tenant to Landlord under the terms of this Lease (such other
monetary obligations are herein referred to as "Additional Rent") in lawful
money of the United States, without offset or deduction, in advance on or before
the first day of each month as set forth in Section 1.4. Base Rent and
Additional Rent for any period during the term hereof which is for less than one
full month shall be prorated based upon the actual number of days of the month
involved. Payment of Base Rent and Additional Rent shall be made to Landlord at
its address stated herein or to such other persons or at such other addresses as
Landlord may from time to time designate in writing to Tenant. Base Rent and
Additional Rent are collectively referred to as "Rent". All monetary obligations
of Tenant to Landlord under the terms of this Lease are deemed to be rent.
4.2 OPERATING EXPENSES. Tenant shall pay to Landlord on the first day of
each month during the term hereof, in addition to the Base Rent, Tenant's Share
of all Operating Expenses in accordance with the following provisions:
(a) "Operating Expenses" are all costs incurred by Landlord
relating to the ownership and operation of the Business Center, Building and
Premises including, but not limited to, the following:
(i) the operation, repair, maintenance and replacement in
neat, clean, good order and condition of the Common Areas, including parking
areas, loading and unloading areas, trash areas, roadways, sidewalks, walkways,
parkways, driveways, landscaped areas, striping, bumpers, irrigation systems,
drainage systems, lighting facilities, fences and gates, exterior signs and
tenant directories.
(ii) Water, gas, electricity, telephone and other
utilities servicing the Common Areas.
(iii) Trash disposal, janitorial services, snow removal
and the property management fee.
(iv) Reserves set aside for maintenance, repair and
replacement of the Common Areas and Building.
(v) Real Property Taxes.
(vi) Premiums for the insurance policies maintained by
Landlord under Paragraph 8 hereof.
(vii) Environmental monitoring and insurance programs.
(viii) Monthly amortization of capital improvements to the
Common Areas and the Building. The monthly amortization of any given capital
improvement shall be the sum of the (i) quotient obtained by dividing the cost
of the capital improvement by Landlord's estimate of the number of months of
useful life of such improvement plus (ii) an amount equal to the cost of the
capital improvement times 1/12 of the lesser of 12% or the maximum annual
interest rate permitted by law.
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(ix) Maintenance of the Building including, but not
limited to, painting, caulking and repair and replacement of Building
components, including, but not limited to, roof, elevators and fire detection
and sprinkler systems.
(x) If Tenant fails to maintain the Premises, any expense
incurred by Landlord for such maintenance.
(b) Tenant's Share of Operating Expenses that are not
specifically attributed to the Premises or Building ("Common Area Operating
Expenses") shall be that percentage shown in Paragraph 1.5(a). Landlord in its
sole discretion shall determine which Operating Expenses are Common Area
Operating Expenses or expenses to be entirely borne by Tenant.
(c) The inclusion of the improvements, facilities and services
set forth in Subparagraph 4.2(a) shall not be deemed to impose any obligation
upon Landlord to either have said improvements or facilities or to provide those
services.
(d) Tenant shall pay monthly in advance on the same day as the
Base Rent is due Tenant's Share of estimated Operating Expenses in the amount
set forth in Paragraph 1.6. Landlord shall deliver to Tenant within 90 days
after the expiration of each calendar year a reasonably detailed statement
showing Tenant's Share of the actual Operating Expenses incurred during the
preceding year. If Tenant's estimated payments under this Paragraph 4(d) during
the preceding year exceed Tenant's Share as indicated on said statement, Tenant
shall be credited the amount of such overpayment against Tenant's Share of
Operating Expenses next becoming due. If Tenant's estimated payments under this
Paragraph 4.2(d) during said preceding year were less than Tenant's Share as
indicated on said statement, Tenant shall pay to Landlord the amount of the
deficiency within 10 days after delivery by Landlord to tenant of said
statement. At any time Landlord may adjust the amount of the estimated Tenant's
Share of Operating Expenses and HVAC maintenance costs to reflect Landlord's
estimate of such expenses for the year.
5. SECURITY DEPOSIT. Tenant shall deposit with Landlord upon Tenant's execution
hereof the Security Deposit set forth in Paragraph 1.7 as security for Tenant's
faithful performance of Tenants obligations under this Lease. If Tenant fails to
pay Base Rent or Additional Rent or otherwise defaults under this Lease (as
defined in Paragraph 13.1), Landlord may use the Security Deposit for the
payment of any amount due Landlord or to reimburse or compensate Landlord for
any liability, cost, expense, loss or damage (including attorney's fees) which
Landlord may suffer or incur by reason thereof. Tenant shall on demand pay
Landlord the amount so used or applied so as to restore the Security Deposit to
the amount set forth in Paragraph 1.7. Landlord shall not be required to keep
all or any part of the Security Deposit separate from its general accounts.
Landlord shall, at the expiration or earlier termination of the term hereof and
after Tenant has vacated the Premises, return to Tenant that portion of the
Security Deposit not used or applied by Landlord. No part of the Security
Deposit shall be considered to be held in trust, to bear interest, or to be
prepayment for any monies to be paid by Tenant under this Lease.
6. USE.
6.1 PERMITTED USE. Tenant shall use and occupy the Premises only for the
Permitted Use set forth in Paragraph 1.8. Tenant shall not commit any nuisance,
permit the emission of any objectionable noise or odor, suffer any waste, make
any use of the Premises which is contrary to any law or ordinance or which will
invalidate or increase the premiums for any of Landlord's insurance. Tenant
shall not service, maintain or repair vehicles on the Premises, Building or
Common Areas. Tenant shall not store foods, pallets, drums or any other
materials outside the Premises, except in designated areas.
6.2 HAZARDOUS SUBSTANCES.
(a) Reportable Uses Require Consent. The term "Hazardous
Substance" as used in this Lease shall mean any product, substance, chemical,
material or waste whose presence, nature, quantity and/or intensity of
existence, use, manufacture, disposal,
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transportation, spill, release or effect, either by itself or in combination
with other materials expected to be on the Premises, is either: (i) potentially
injurious to the public health, safety or welfare, the environment, or the
Premises; (ii) regulated or monitored by any governmental authority; or (iii) a
basis for potential liability of Landlord to any governmental agency or third
party under any applicable statute or common law theory. Hazardous Substance
shall include, but not be limited to, hydrocarbons, petroleum, gasoline, crude
oil or any products or by-products thereof. Tenant shall not engage in any
activity in or about the Premises which constitutes a Reportable Use (as
hereinafter defined) of Hazardous Substances without the express prior written
consent of Landlord and compliance in a timely manner (at Tenant's sole cost and
expense) with all Applicable Requirements (as defined in Paragraph 6.3).
"Reportable Use" shall mean (i) the installation or use of any above or below
ground storage tank, (ii) the generation, possession, storage, use,
transportation, or disposal of a Hazardous Substance that requires a permit
from, or with respect to which a report, notice, registration or business plan
is required to be filed with, any governmental authority, and (iii) the presence
in, on or about the Premises of a Hazardous Substance with respect to which any
Applicable Requirements require that a notice be given to persons entering or
occupying the Premises or neighboring properties. Notwithstanding the foregoing,
Tenant may, without Landlord's prior consent, but upon notice to Landlord and in
compliance with all Applicable Requirements, use any ordinary and customary
materials reasonably required to be used by Tenant in the normal course of the
Permitted Use, so long as such use is not a Reportable Use and does not expose
the Premises, or neighboring properties to any meaningful risk of contamination
or damage or expose Landlord to any liability therefor. In addition, Landlord
may (but without any obligation to do so) condition its consent to any
Reportable Use of any Hazardous Substance by Tenant upon Tenant's giving
Landlord such additional assurances as Landlord, in its reasonable discretion,
deems necessary to protect itself, the public, the Premises and the environment
against damage, contamination or injury and/or liability therefor, including but
not limited to the installation (and, at Landlord's option, removal on or before
Lease expiration or earlier termination) of reasonably necessary protective
modifications to the Premises (such as concrete encasements) and/or the deposit
of an additional Security Deposit.
(b) Duty to Inform Landlord. If Tenant knows, or has reasonable
cause to believe, that a Hazardous Substance is located in, under or about the
Premises or the Building, Tenant shall immediately give Landlord written notice
thereof, together with a copy of any statement, report, notice, registration,
application, permit, business plan, license, claim, action, or proceeding given
to, or received from, any governmental authority or private party concerning the
presence, spill, release, discharge of, or exposure to, such Hazardous
Substance. Tenant shall not cause or permit any Hazardous Substance to be
spilled or released in, on, under or about the Premises (including, without
limitation, through the plumbing or sanitary sewer system).
(c) Indemnification. Tenant shall indemnify, protect, defend and
hold Landlord, Landlord's affiliates, Lenders, and the officers, directors,
shareholders, partners, employees, managers, independent contractors, attorneys
and agents of the foregoing ("Landlord Entities") and the Premises, harmless
from and against any and all damages, liabilities, judgments, costs, claims,
liens, expenses, penalties, loss of permits and attorneys' and consultants' fees
arising out of or involving any Hazardous Substance brought onto the Premises by
or for Tenant or by any of Tenant's employees, agents, contractors or invitees.
Tenant's obligations under this Paragraph 6.2(c) shall include, but not be
limited to, the effects of any contamination or injury to person, property or
the environment created or suffered by Tenant, and the cost of investigation
(including consultants' and attorneys' fees and testing), removal, remediation,
restoration and/or abatement thereof, or of any contamination therein involved.
Tenant's obligations under this Paragraph 6.2(c) shall survive the expiration or
earlier termination of this Lease.
6.3 TENANT'S COMPLIANCE WITH REQUIREMENTS. Tenant shall, at Tenant's
sole cost and expense, fully, diligently and in a timely manner, comply with all
"Applicable Requirements," which term is used in this Lease to mean all laws,
rules, regulations, ordinances, directives, covenants, easements and
restrictions of record, permits, the requirements of any applicable fire
insurance underwriter or rating bureau, and the recommendations of Landlord's
engineers and/or consultants, relating in any manner to the Premises (including
but not limited to matters pertaining to (i) industrial hygiene, (ii)
environmental conditions on, in, under or about the Premises, including soil and
groundwater conditions, and (iii) the use, generation, manufacture, production,
installation, maintenance, removal, transportation, storage, spill or release of
any Hazardous Substance), now in effect or which may hereafter come into effect.
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Tenant shall, within 5 days after receipt of Landlord's written request, provide
Landlord with copies of all documents and information evidencing Tenant's
compliance with any Applicable Requirements and shall immediately upon receipt,
notify Landlord in writing (with copies of any documents involved) of any
threatened or actual claim, notice, citation, warning, complaint or report
pertaining to or involving failure by Tenant or the Premises to comply with any
Applicable Requirements.
6.4 INSPECTION; COMPLIANCE WITH LAW. In addition to Landlord's
environmental monitoring and insurance program, the cost of which is included in
Operating Expenses, Landlord and the holders of any mortgages, deeds of trust or
ground leases on the Premises ("Lenders") shall have the right to enter the
Premises at any time in the case of an emergency, and otherwise at reasonable
times, for the purpose of inspecting the condition of the Premises and for
verifying compliance by Tenant with this Lease and all Applicable Requirements.
Landlord shall be entitled to employ experts and/or consultants in connection
therewith to advise Landlord with respect to Tenant's installation, operation,
use, monitoring, maintenance, or removal of any Hazardous Substance on or from
the Premises. The cost and expenses of any such inspections shall be paid by the
party requesting same unless a violation of Applicable Requirements exists or is
imminent or the inspection is requested or ordered by a governmental authority.
In such case, Tenant shall upon request reimburse Landlord or Landlord's Lender,
as the case may be, for the costs and expenses of such inspections.
6.5 HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE. Prior to executing this
Lease, Tenant has completed, executed and delivered to Landlord the Hazardous
Material Disclosure Certificate (the "Hazardous Material Disclosure
Certificate"), a copy of which is attached hereto as Exhibit D and incorporated
herein by this reference. Tenant covenants, represents and warrants to Landlord
that the information on the Hazardous Material Disclosure Certificate is true
and correct and accurately describes the use(s) of Hazardous Substances, which
will be made and/or used on the Premises by Tenant.
7. MAINTENANCE, REPAIRS, TRADE FIXTURES AND ALTERATIONS.
7.1 TENANT'S OBLIGATIONS. Subject to the provisions of Paragraph 7.2
(Landlord's Obligations), Paragraph 9 (Damage or Destruction) and Paragraph 14
(Condemnation), Tenant shall, at Tenant's sole cost and expense and at all
times, keep the Premises and every part thereof in good order, condition and
repair (whether or not such portion of the Premises requiring repair, or the
means of repairing the same, are reasonable or readily accessible to Tenant and
whether or not the need for such repairs occurs as a result of Tenant's use, any
prior use, the elements or the age of such portion of the Premises) including,
without limiting the generality of the foregoing, all equipment or facilities
specifically serving the Premises, such as plumbing, heating, air conditioning,
ventilating, electrical, lighting facilities, boilers, fired or unfired pressure
vessels, fire hose connectors if within the Premises, fixtures, interior walls,
interior surfaces of exterior walls, ceilings, floors, windows, doors, plate
glass, skylights and dock doors related equipment (including but not limited to
dock levelers, bumpers, lights and adjacent dock wells), but excluding any items
which are the responsibility of Landlord pursuant to Paragraph 7.2 below.
Tenant's obligations shall include restorations, replacements or renewals when
necessary to keep the Premises and all improvements thereon or a part thereof in
good order, condition and state of repair.
7.2 LANDLORD'S OBLIGATIONS. Subject to the provisions of Paragraph 6
(Use), Paragraph 7.1 (Tenant's Obligations), Paragraph 9 (Damage or Destruction)
and Paragraph 14 (Condemnation), Landlord at its expense and not subject to
reimbursement pursuant to Paragraph 4.2, shall keep in good order, condition and
repair the foundations and exterior walls of the Building and utility systems
outside the Building. Landlord, subject to reimbursement pursuant to Paragraph
4.2, shall keep in good order, condition and repair the air conditioning systems
servicing the Premises, Building roof and Common Areas.
7.3 ALTERATIONS. Tenant shall not make nor cause to be made any
alterations, installations in, on, under or about the Premises without
Landlord's prior written consent which consent shall not be unreasonably
withheld or delayed.
7.4 SURRENDER/RESTORATION. Upon the termination of this Lease, Tenant
shall surrender the Premises by the end of the last day of the Lease term or any
earlier termination date, clean and free of debris and in good operating order,
condition and state of repair ordinary wear and tear excepted. Without limiting
the generality of the above, Tenant shall remove all
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personal property, trade fixtures, unless Landlord requests, in writing, that
Tenant not remove some or all of such fixtures (other than trade fixtures),
additions or improvements installed by, or on behalf of Tenant or situated in or
about the Premises and floor bolts, patch all floors and cause all lights to be
in good operating condition. By the date which is sixty (60) days prior to such
termination of this Lease, Landlord shall notify Tenant in writing of those
fixtures (other than trade fixtures), alterations, additions and other
improvements which Landlord shall require Tenant not to remove from the
Premises. Tenant shall repair any damage caused by the installation or removal
of such signs, trade fixtures, furniture, furnishings, fixtures, additions and
improvements which are to be removed from the Premises by Tenant hereunder. If
Landlord fails to so notify Tenant at least sixty (60) days prior to such
termination of this Lease, then Tenant shall remove all tenant signage,
alterations, furniture, furnishings, trade fixtures, additions and other
improvements (other than the Tenant Improvements) installed in or about the
Premises by, or on behalf of Tenant. Tenant shall ensure that the removal of
such items and the repair of the Premises will be completed prior to such
termination of this Lease.
8. INSURANCE; INDEMNITY.
8.1 PAYMENT OF PREMIUMS. The cost of the premiums for the insurance
policies maintained by Landlord under this Paragraph 8 shall be a Common Area
Operating Expense pursuant to Paragraph 4.2 hereof. Premiums for policy periods
commencing prior to, or extending beyond, the term of this Lease shall be
prorated to coincide with the corresponding Commencement Date of Expiration
Date.
8.2 TENANT'S INSURANCE.
(i) At its sole cost and expense, Tenant shall maintain in full
force and effect during the Term of the lease the following insurance coverages
insuring against claims which may arise from or in connection with the Tenant's
operation and use of the leased premises.
(a) Commercial General Liability with minimum limits of
$1,000,000 per occurrence; $3,000,000 general aggregate for bodily injury,
personal injury and property damage. If required by Landlord, liquor liability
coverage will be included.
(b) Workers' Compensation insurance with statutory limits
and Employers Liability with a $1,000,000 per accident limit for bodily injury
or disease.
(c) Automobile Liability covering all owned, non-owned and
hired vehicles with a $1,000,000 per accident limit for bodily injury and
property damage.
(d) Property insurance against all risks of loss to any
tenant improvements or betterments and business personal property on a full
replacement cost basis with no coinsurance penalty provision; and Business
Interruption Insurance with a limit of liability representing loss of at least
approximately six months of income.
(ii) Tenant shall deliver to AMB or Landlord's property
management company certificates of all insurance reflecting evidence of required
coverages prior to initial occupancy; and annually thereafter.
(iii) If, in the opinion of Landlord's insurance advisor, the
amount of scope of such coverage is deemed inadequate at any time during the
Term, Tenant shall increase such coverage to such reasonable amounts or scope as
Landlord's advisor deems adequate.
(iv) All insurance required under Paragraph 8.2 (i) shall be
primary and non-contributory (ii) shall provide for severability of interests,
(iii) shall be issued by insurers, licensed to do business in the state in which
the Premises are located and which are rated A:VII or better by Best's Key
Rating Guide, (iv) shall be endorsed to include Landlord and such other persons
or entities as Landlord may from time to time designate, as additional insureds
(Commercial General Liability only), and (v) shall be endorsed to provide at
least 30-days prior notification of cancellation or material change in coverage
to said additional insureds.
8.3 LANDLORD'S INSURANCE. Landlord may, but shall not be obligated to,
maintain all risk, including earthquake and flood, insurance covering the
buildings within the Business Center, Commercial General Liability and such
other insurance in such amounts and covering such other liability or hazards as
deemed appropriate by Landlord. The amount and scope of
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coverage of Landlord's insurance shall be determined by Landlord as reasonable
and customary from time to time in its sole discretion and shall be subject to
such deductible amounts as Landlord may elect. Landlord shall have the right to
reduce or terminate any insurance or coverage. Premiums for any such insurance
shall be a Common Area Operating Expense.
8.4 WAIVER OF SUBROGATION. To the extent permitted by law and without
affecting the coverage provided by insurance required to be maintained
hereunder, Landlord and Tenant each waive any right to recover against the other
on account of any and all claims Landlord or Tenant may have against the other
with respect to property insurance actually carried, or required to be carried
hereunder, to the extent of the proceeds realized from such insurance coverage.
8.5 INDEMNITY. Tenant shall protect, indemnify and hold the Landlord
Entities harmless from and against any and all loss, claims, liability or costs
(including court costs and attorney's fees) incurred by reason of:
(i) any damage to any property (including but not limited to
property of any Landlord Entity) or death or injury to any person occurring in
or about the Premises, the Building or the Business Center to the extent that
such injury or damage shall be caused by or arise from any actual or alleged
act, neglect, fault or omission by or of Tenant, its agents, servants,
employees, invitees, or visitors;
(ii) the conduct or management of any work or anything whatsoever
done by the Tenant on or about the Premises or from transactions of the Tenant
concerning the Premises;
(iii) Tenant's failure to comply with any and all governmental
laws, ordinances and regulations applicable to the condition or use of the
Premises or its occupancy; or
(iv) any breach or default of the part of Tenant in the
performance of any covenant or agreement on the part of the Tenant to be
performed pursuant to this Lease.
The provisions of this Paragraph 8.5 shall survive the termination of this Lease
with respect to any claims or liability accruing prior to such termination.
8.6 EXEMPTION OF LANDLORD FROM LIABILITY. Except to the extent caused by
the gross negligence or willful misconduct of Landlord, Landlord Entities shall
not be liable for and Tenant waives any claims against Landlord Entities for
injury or damage to the person or the property of Tenant, Tenant's employees,
contractors, invitees, customers or any other person in or about the Premises,
Building or Business Center from any cause whatsoever, including, but not
limited to, damage or injury which is caused by or results from (i) fire, steam,
electricity, gas, water or rain, or from the breakage, leakage, obstruction or
other defects of pipes, fire sprinklers, wires, appliances, plumbing, air
conditioning or lighting fixtures or (ii) from the condition of the Premises,
other portions of the Building or Business Center. Landlord shall not be liable
for any damages arising from any act or neglect of any other tenant of Landlord
nor from the failure by Landlord to enforce the provisions of any other lease in
the Business Center. Notwithstanding Landlord's negligence or breach of this
Lease, Landlord shall under no circumstances be liable for injury to Tenant's
business, for any loss of income or profit therefrom or any indirect,
consequential or punitive damages.
9. DAMAGE OR DESTRUCTION.
9.1 TERMINATION RIGHT. Tenant shall give Landlord immediate written
notice of any damage to the Premises. Subject to the provisions of Paragraph
9.2, if the Premises or the Building shall be damaged to such an extent that
there is substantial interference for a period exceeding 120 consecutive days
with the conduct by Tenant of its business at the Premises, Tenant, at any time
prior to commencement of repair of the Premises and following 10 days written
notice to Landlord, may terminate this Lease effective 30 days after delivery of
such notice to Landlord. Such termination shall not excuse the performance by
Tenant of those covenants, which under the terms hereof survive termination.
Rent shall be abated in proportion to the degree of interference during the
period that there is such substantial interference with the conduct of Tenant's
business at the Premises. Abatement of rent and Tenant's right of termination
pursuant to this provision shall be Tenant's sole remedy for failure of Landlord
to keep in good order, condition and repair the foundations and exterior walls
of the Building, Building roof, utility systems outside the Building, the Common
Areas and HVAC.
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9.2 DAMAGE CAUSED BY TENANT. Tenant's termination rights under Paragraph
9.1 shall not apply if the damage to the Premises or Building is the result of
any act or omission of Tenant or of any of Tenant's agents, employees,
customers, invitees or contractors ("Tenant Acts"). Any damage resulting from a
Tenant Act shall be promptly repaired by Tenant. Landlord at its option may at
Tenant's expense repair any damage caused by Tenant Acts. Tenant shall continue
to pay all rent and other sums due hereunder and shall be liable to Landlord for
all damages that Landlord may sustain resulting from a Tenant Act.
10. REAL PROPERTY TAXES.
10.1 PAYMENT OF REAL PROPERTY TAXES. Landlord shall pay the Real
Property Taxes due and payable during the term of this Lease and, except as
otherwise provided in Paragraph 10.3, any such amounts shall be included in the
calculation of Operating Expenses in accordance with the provisions of Paragraph
4.2.
10.2 REAL PROPERTY TAX DEFINITION. As used herein, the term "Real
Property Taxes" is any form of tax or assessment, general, special, ordinary or
extraordinary, imposed or levied upon (a) the Business Center, (b) any interest
of Landlord in the Business Center, (c) Landlord's right to rent or other income
from the Business Center, and/or (d) Landlord's business of leasing the
Premises. Real Property Taxes include (i) any license fee, commercial rental
tax, excise tax, improvement bond or bonds, levy or tax; (ii) any tax or charge
which replaces or is in addition to any of such above-described "Real Property
Taxes" and (iii) any fees, expenses or costs (including attorney's fees, expert
fees and the like) incurred by Landlord in protesting or contesting any
assessments levied or any tax rate. The term "Real Property Taxes" shall also
include any increase resulting from a change in the ownership of the Business
Center or Building, or the improvements thereon, the execution of this Lease or
any modification, amendment or transfer thereof. Real Property Taxes for tax
years commencing prior to, or extending beyond, the term of this Lease shall be
prorated to coincide with the corresponding Commencement Date of Expiration
Date. Real Estate Taxes shall specifically exclude any Federal and State income
taxes.
10.3 JOINT ASSESSMENT. If the Building is not separately assessed, Real
Property Taxes allocated to the Building shall be an equitable proportion of the
Real Property Taxes for all of the land and improvements included within the tax
parcel assessed.
10.4 TENANT'S PROPERTY TAXES. Tenant shall pay prior to delinquency all
taxes assessed against and levied upon Tenant's improvements, fixtures,
furnishings, equipment and all personal property of Tenant contained in the
Premises or stored within the Business Center.
11. UTILITIES. Tenant shall pay directly for all utilities and services supplied
to the Premises, including but not limited to electricity, telephone, security,
gas and cleaning of the Premises, together with any taxes thereon.
12. ASSIGNMENT AND SUBLETTING.
12.1 LANDLORD'S CONSENT REQUIRED.
(a) Except as expressly set forth herein with respect to an
Affiliated company (as hereinafter defined), Tenant shall not assign, transfer,
mortgage or otherwise transfer or encumber (collectively, "assign") or sublet
all or any part of Tenant's interest in this Lease or in the Premises without
Landlord's prior written consent which consent shall not be unreasonably
withheld. Relevant criteria in determining reasonability of consent include, but
are not limited to, credit history of a proposed assignee or sublessee,
references from prior landlords, any change or intensification of use of the
Premises or the Common Areas and any limitations imposed by the Internal Revenue
Code and the Regulations promulgated thereunder relating to Real Estate
Investment Trusts. Assignment or sublet shall not release Tenant from its
obligations hereunder. Tenant shall not (i) sublet or assign or enter into other
arrangements such that the amounts to be paid by the sublessee or assignee
thereunder would be based, in whole or in part, on the income or profits derived
by the business activities of the sublessee or assignee; (ii) sublet the
Premises or assign this Lease to any person in which Landlord owns an interest,
directly or indirectly (by applying constructive ownership rules set forth in
Section 856(d)(5) of the Internal Revenue Code (the "Code"); or (iii) sublet the
Premises or assign this Lease in any other manner which could cause any portion
of the amounts received by Landlord pursuant to this Lease or any sublease to
fail to qualify as "rents from real property" within the meaning of
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Section 856(d) of the Code, or which could cause any other income
received by Landlord to fail to qualify as income described in Section 856(c)(2)
of the Code. The requirements of this Section 12.1 shall apply to any further
subleasing by any subtenant.
(b) A change in the control of Tenant shall constitute an
assignment requiring Landlord's consent. The transfer, on a cumulative basis, of
40% or more of the voting or management control of Tenant shall constitute a
change in control for this purpose.
12.2 RENT ADJUSTMENT. As of the effective date of any permitted
assignment or subletting, Landlord may, as a condition to its consent: (i)
require that the amount and adjustment schedule of the rent payable on the
portion of the Premises under this Lease subject to the sublease or assignment
be adjusted to what is then the market value and/or adjustment schedule for
property similar to the Premises as then constituted, as determined by Landlord
(or, in the event of a sublease, the portion of the Premises subject to such
sublease (and for the term of such sublease)); or (ii) terminate the Lease as of
the date of assignment or subletting subject to the performance by Tenant of
those covenants which under the terms hereof survive termination if (i) the
permitted assignment or subletting by itself or taken together with then
existing or pending assignment or subleases covers or totals, as the case may
be, more than forty three percent (43%) of the rentable square feet of the
Premises, or (ii) if for a term which by itself or taken together with the then
existing or pending assignment or subleases is greater than fifty percent (50%)
of the period then remaining in the term of this Lease as of the time of the
effective date then Landlord shall have the right, to be exercised by giving
written notice to tenant to recapture the proposed subleased or assigned space.
12.3 EXCESS CONSIDERATION. In the event of any assignment or sublease,
Landlord shall receive as additional rent hereunder fifty percent (50%) of
Tenant's "Excess Consideration" derived from such assignment or sublease. If
Tenant shall elect to assign or sublet, Tenant shall use reasonable and good
faith efforts to secure consideration from any such assignee or subtenant which
would be generally equivalent to then-current market rent, but in no event shall
Tenant's monetary obligations to Landlord, as set forth in this Lease, be
reduced. In the event of a sublease, "Excess Consideration" shall mean all rent,
additional rent or other consideration actually received by Tenant from such
subtenant and/or actually paid by such subtenant on behalf of Tenant in
connection with the subletting in excess of the rent, additional rent and other
sums payable by Tenant under this Lease during the term of the sublease on a per
square foot basis if less than all of the Premises is subleased, less marketing
costs, attorneys' fees and brokerage commissions, if any, reasonably incurred by
Tenant to procure the sublease, and the cost of any alterations made by Tenant
specifically for the benefit of such subtenant. In the event of an assignment,
"Excess Consideration" shall mean key money, bonus money or other consideration
paid by the assignee to Tenant in connection with such assignment, and any
payment in excess of fair market value for services rendered by Tenant to
assignee or for assets, fixtures, inventory, equipment, or furniture transferred
by Tenant to assignee in connection with such assignment, less marketing costs,
attorneys' fees and brokerage commissions, if any, reasonably incurred by Tenant
to procure the assignment, and the cost of any alterations made by Tenant
specifically for the benefit of such assignee. If part of the Excess
Consideration shall be payable by the assignee or subtenant other than in case,
then Landlord's share of such non-cash consideration shall be in such form as is
reasonably satisfactory to Landlord.
12.4 AFFILIATED. Companies/Restructuring of Business Organization . The
assignment or subletting by Tenant of all or any portion of this Lease or the
Premises to (i) a parent or subsidiary of Tenant, or (ii) any person or entity
which controls, is controlled by or under the common control with Tenant, or
(iii) any entity which purchases all or substantially all of the assets of
Tenant, or (iv) any entity into which Tenant is merged or consolidated (all such
persons or entities described in clauses (i), (ii), (iii) and (iv) being
sometimes herein referred to as "Affiliate") shall not be deemed a sublet or
assign under Section 12 (hence, the aforesaid events shall not be subject to
obtaining Landlord's prior consent; Landlord shall not have any right to receive
any Excess Consideration in connection therewith; and Landlord shall not have
the termination rights described in Section 12.2 above), provided in all
instances that:
12.4.1 any such Affiliate was not formed as a subterfuge to avoid
the obligations of this Section 12;
12.4.2 Tenant give Landlord prior notice of any such assignment or
sublease to an Affiliate;
12.4.3 the successor of Tenant has as of the effective date of any
such assignment or sublease a tangible net worth and net assets, in the
aggregate, computed in accordance with generally accepted accounting principles
(but excluding goodwill as an asset), which is sufficient to meet the
obligations of Tenant under this Lease, as reasonably determined by Landlord;
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12.4.4 any such assignment or sublease shall be subject to all of
the terms and provisions of this Lease, and such assignee or sublessee (i.e. any
such Affiliate), other than in the case of an Affiliate resulting from a merger
or consolidation as described in Section 12.4(iv) above, shall assume, in a
written document reasonably satisfactory to Landlord and delivered to Landlord
upon or prior to the effective date of such assignment or sublease, all the
obligations of Tenant under this Lease; and
12.4.5 Tenant and any guarantor shall remain fully liable for all
obligations to be performed by Tenant under this Lease, except in the case of an
Affiliate resulting from the acquisition of all or substantially all of the
assets of Tenant described in Section 12.4(iii) or from a merger or
consolidation as described in Section 12.4(iv) above.
For purposes hereof, if Tenant is a publicly held corporation, the public
offering or trading of stock shall not be deemed an assignment or transfer
within the meaning of this paragraph. If Tenant is a business entity, direct or
indirect transfer of fifty percent (50%) or more of the ownership interest of
the entity (whether in a single transaction or in the aggregate through more
than one transaction) to any party other than an Affiliate in accordance with
the provisions of Section 12.4 hereof shall be deemed an assignment or sublease
to a non-affiliated company and shall be subject to all the provisions set forth
in Sections 12.1, 12.2, & 12.3.
13. DEFAULT; REMEDIES.
13.1 DEFAULT. The occurrence of any one of the following events shall
constitute an event of default on the part of Tenant ("Default"):
(a) The abandonment of the Premises by Tenant;
(b) Failure to pay any installment of Base Rent, Additional Rent or
any other monies due and payable hereunder, said failure continuing for a period
of 5 days after delivery of written notice from Landlord that said payment is
due. Tenant agrees that such written notice shall serve as the statutorily
required notice under the law;
(c) A general assignment by Tenant or any guarantor for the benefit
of creditors;
(d) The filing of a voluntary petition in bankruptcy by Tenant or
any guarantor, the filing of a voluntary petition for an arrangement, the filing
of a petition, voluntary or involuntary, for reorganization, or the filing of an
involuntary petition by Tenant's creditors or guarantors;
(e) Receivership, attachment, of other judicial seizure of the
Premises or all or substantially all of Tenant's assets on the Premises;
(f) Failure of Tenant to maintain insurance as required by
Paragraph 8.2;
(g) Any breach by Tenant of its covenants under Paragraph 6.2;
(h) Failure in the performance of any of Tenant's covenants,
agreements or obligations hereunder (except those failures specified as events
of Default in other Paragraphs of this Paragraph 13.1 which shall be governed by
such other Paragraphs), which failure continues for 10 days after written notice
thereof from Landlord to Tenant provided that, if Tenant has exercised
reasonable diligence to cure such failure and such failure cannot be cured
within such 10 day period despite reasonable diligence, Tenant shall not be in
default under this subparagraph unless Tenant fails thereafter diligently and
continuously to prosecute the cure to completion;
(i) Any transfer of a substantial portion of the assets of Tenant,
or any incurrence of a material obligation by Tenant, unless such transfer or
obligation is undertaken or incurred in the ordinary course of Tenants business
or in good faith for equivalent consideration, or with Landlord's consent; and
(j) The default of any guarantors of Tenant's obligations hereunder
under any guaranty of this Lease, or the attempted repudiation or revocation of
any such guaranty.
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13.2 REMEDIES. In the event of any Default by Tenant, Landlord shall
have the remedies set forth in the Addendum attached hereto entitled "Landlord's
Remedies in Event of Tenant Default".
13.3 LATE CHARGES. Tenant hereby acknowledges that late payment by
Tenant to Landlord of rent and other sums due hereunder will cause Landlord to
incur costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges. Accordingly, if any installment of rent or
other sum due from Tenant shall not be received by Landlord or Landlord's
designee within 5 days after such amount shall be due, then, without any
requirement for notice to Tenant, Tenant shall pay to Landlord a late charge
equal to 5% of such overdue amount. The parties hereby agree that such late
charge represents a fair and reasonable estimate of the costs Landlord will
incur by reason of late payment by Tenant. Acceptance of such late charge by
Landlord shall in no event constitute a waiver of Tenant's Default with respect
to such overdue amount, nor prevent Landlord from exercising any of the other
rights and remedies granted hereunder.
14. CONDEMNATION. If the Premises or any portion thereof are taken under the
power of eminent domain or sold under the threat of exercise of said power (all
of which are herein called "condemnation"), this Lease shall terminate as to the
part so taken as of the date the condemning authority takes title or possession,
whichever first occurs. If more than 10% of the floor area of the Premises, or
more than 25% of the portion of the Common Areas designated for Tenant's
parking, is taken by condemnation, Tenant may, at Tenant's option, to be
exercised in writing within 10 days after Landlord shall have given Tenant
written notice of such taking (or in the absence of such notice, within 10 days
after the condemning authority shall have taken possession) terminate this Lease
as of the date the condemning authority takes such possession. If Tenant does
not terminate this Lease in accordance with the foregoing, this Lease shall
remain in full force and effect as to the portion of the Premises remaining,
except that the Base Rent shall be reduced in the same proportion as the
rentable floor area of the Premises taken bears to the total rentable floor area
of the Premises. No reduction of Base Rent shall occur if the condemnation does
not apply to any portion of the Premises. Any award for the taking of all or any
part of the Premises under the power of eminent domain or any payment made under
threat of the exercise of such power shall be the property of Landlord,
provided, however, that Tenant shall be entitled to any compensation, separately
awarded to Tenant for Tenant's relocation expenses and/or loss of Tenants trade
fixtures. In the event that this Lease is not terminated by reason of such
condemnation, Landlord shall to the extent of its net severance damages in the
condemnation matter, repair any damage to the Premises caused by such
condemnation authority. Tenant shall be responsible for the payment of any
amount in excess of such net severance damages required to complete such repair.
15. ESTOPPEL CERTIFICATE AND FINANCIAL STATEMENTS.
15.1 ESTOPPEL CERTIFICATE. Each party (herein referred to as "Responding
Party") shall within 10 days after written notice from the other Party (the
"Requesting Party") execute, acknowledge and deliver to the Requesting Party, to
the extent it can truthfully do so, an estoppel certificate in the form attached
hereto, plus such additional information, confirmation a/or statements as be
reasonably requested by the Requesting Party.
15.2 FINANCIAL STATEMENT. If Landlord desires to finance, refinance, or
sell the Building, Business Center or any part thereof, Tenant and all
Guarantors shall deliver to any potential lender or purchaser designated by
Landlord such financial statements of Tenant and such Guarantors as may be
reasonably required by such lender or purchaser, including but not limited to
Tenant's financial statements for the past 3 years. All such financial
statements shall be received by Landlord and such lender or purchaser in
confidence and shall be used only for the purposes herein set forth.
16. ADDITIONAL COVENANTS AND PROVISIONS.
16.1 SEVERABILITY. The invalidity of any provision of this Lease, as
determined by a court of competent jurisdiction, shall not affect the validity
of any other provision hereof.
16.2 INTEREST ON PAST-DUE OBLIGATIONS. Any monetary payment due Landlord
hereunder not received by Landlord within 10 days following the date on which it
was due shall
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bear interest from the date due at 12% per annum, but not exceeding the maximum
rate allowed by law in addition to the late charge provided for in Paragraph
13.3.
16.3 TIME OF ESSENCE. Time is of the essence with respect to the
performance of all obligations to be performed or observed by the Parties under
this Lease.
16.4 LANDLORD LIABILITY. Tenant, its successors and assigns, shall not
assert nor seek to enforce any claim for breach of this Lease against any of
Landlord's assets other than Landlord's interest in the Business Center. Tenant
agrees to look solely to such interest for the satisfaction of any liability or
claim against Landlord under this Lease. In no event whatsoever shall Landlord
(which term shall include, without limitation, any general or limited partner,
trustees, beneficiaries, officers, directors, or stockholders of Landlord) ever
be personally liable for any such liability.
16.5 NO PRIOR OR OTHER AGREEMENTS. This Lease contains all agreements
between the Parties with respect to any matter mentioned herein, and supersedes
all oral, written prior or contemporaneous agreements or understandings.
16.6 NOTICE REQUIREMENTS. All notices required or permitted by this
Lease shall be in writing and may be delivered in person (by hand or by
messenger or courier service) or may be sent by regular, certified or registered
mail or U.S. Postal Service Express Mail, with postage prepaid, or by facsimile
transmission during normal business hours, and shall be deemed sufficiently
given if served in a manner specified in the Paragraph 16.6. The addresses noted
adjacent to a Party's signature on this Lease shall be that Party's address for
delivery or mailing of notice purposes. Either Party may by written notice to
the other specify a different address for notice purposes, except that upon
Tenant's taking possessing of the Premises, the Premises shall constitute
Tenant's address for the purpose of mailing or delivering notices to Tenant. A
copy of all notices required or permitted to be given to Landlord hereunder
shall be concurrently transmitted to such party or parties at such addresses as
Landlord may from time to time hereafter designate by written notice to Tenant.
16.7 DATE OF NOTICE. Any notice sent by registered or certified mail,
return receipt requested, shall be deemed given on the date of delivery shown on
the receipt card, or if no delivery date is shown, the postmark thereon. If sent
by regular mail, the notice shall be deemed given 48 hours after the same is
addressed as required herein and mailed with postage prepaid. Notices delivered
by United States Express Mail or overnight courier that guarantees next day
delivery shall be deemed given 24 hours after delivery of the same to the United
States Postal Service or courier. If any notice is transmitted by facsimile
transmission or similar means, the same shall be deemed served or delivered upon
telephone or facsimile confirmation of receipt of the transmission thereof,
provided a copy is also delivered via hand or overnight delivery or certified
mail. If notice is received on a Saturday or a Sunday or a legal holiday, it
shall be deemed received on the next business day.
16.8 WAIVERS. No waiver by Landlord of a Default by Tenant shall be
deemed a waiver of any other term, covenant or condition hereof, or of any
subsequent Default by Tenant of the same or any other term, covenant or
condition hereof.
16.9 HOLDOVER. Tenant has no right to retain possession of the Premises
or any part thereof beyond the expiration or earlier termination of this Lease.
If Tenant holds over with the consent of Landlord: (i) the Base Rent payable
shall be increased to 175% of the Base Rent applicable during the month
immediately preceding such expiration or earlier termination; (ii) Tenant's
right to possession shall terminate on 30 days notice from Landlord and (iii)
all other terms and conditions of this Lease shall continue to apply. Nothing
contained herein shall be construed as a consent by Landlord to any holding over
by Tenant. Tenant shall indemnify, defend and hold Landlord harmless from and
against any and all claims, demands, actions, losses, damages, obligations,
costs and expenses, including, without limitation, attorneys' fees incurred or
suffered by Landlord by reason of Tenant's failure to surrender the Premises on
the expiration or earlier termination of this Lease in accordance with the
provisions of this Lease.
16.10 CUMULATIVE REMEDIES. No remedy or election hereunder shall be
deemed exclusive but shall, wherever possible, be cumulative with all other
remedies in law or in equity.
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16.11 BINDING EFFECT: CHOICE OF LAW. This Lease shall be binding upon
the Parties, their personal representatives, successors and assigns and be
governed by the laws of the State in which the Premises are located. Any
litigation between the Parties hereto concerning this Lease shall be initiated
in the county in which the Premises are located.
16.12 LANDLORD. The covenants and obligations contained in this Lease on
the part of Landlord are binding on Landlord, its successors and assigns, only
during and in respect of their respective period of ownership of such interest
in the Business Center. In the event of any transfer or transfers of such title
to the Business Center, Landlord (and in case of any subsequent transfers or
conveyances, the then grantor) shall be concurrently freed and relieved from and
after the date of such transfer or conveyance, without any further instrument or
agreement, of all liability with respect to the performance of any covenants or
obligations on the part of Landlord contained in this Lease thereafter to be
performed.
16.13 ATTORNEYS' FEES AND OTHER COSTS. If any Party brings an action or
proceeding to enforce the terms hereof or declare rights hereunder, the
Prevailing Party (as hereafter defined) in any such proceeding shall be entitled
to reasonable attorneys' fees. The term "Prevailing Party" shall include,
without limitation, a Party who substantially obtains or defeats the relief
sought. Landlord shall be entitled to attorneys' fees, costs and expenses
incurred in preparation and service of notices of Default and consultations in
connection therewith, whether or not a legal action is subsequently commenced in
connection with such Default or resulting breach. Tenant shall reimburse
Landlord on demand for all reasonable legal, engineering and other professional
services expenses incurred by Landlord in connection with all requests by Tenant
for consent or approval hereunder.
16.14 LANDLORD'S ACCESS; SHOWING PREMISES; REPAIRS. Landlord and
Landlord's agents shall have the right to enter the Premises at any time, in the
case of an emergency, and otherwise at reasonable times upon reasonable notice
for the purpose of showing the same to prospective purchasers, lenders, or
tenants, and making such alterations, repairs, improvements or additions to the
Premises or to the Building, as Landlord may reasonably deem necessary. Landlord
may at any time place on or about the Premises or Building any ordinary "For
Sale" signs and Landlord may at any time during the last 180 days of the term
hereof place on or about the Premises any ordinary "For Lease" signs. All such
activities of Landlord shall be without abatement of rent or liability to
Tenant.
16.15 SIGNS. Tenant shall not place any signs at or upon the exterior of
the Premises or the Building, except that Tenant may, with Landlord's prior
written consent, install (but not on the roof) such signs as are reasonably
required to advertise Tenant's own business so long as such signs are in a
location designated by Landlord and comply with sign ordinances and the signage
criteria established for the Business Center by Landlord.
16.16 TERMINATION: MERGER. Unless specifically stated otherwise in
writing by Landlord, the voluntary or other surrender of this Lease by Tenant,
the mutual termination or cancellation hereof, or a termination hereof by
Landlord for Default by Tenant, shall automatically terminate any sublease or
lesser estate in the Premises; provided, however, Landlord shall, in the event
of any such surrender, termination or cancellation, have the option to continue
any one or all of any existing subtenancies. Landlord's failure within 10 days
following any such event to make a written election to the contrary by written
notice to the holder of any such lesser interest, shall constitute Landlord's
election to have such event constitute the termination of such interest.
16.17 QUIET POSSESSION. Upon payment by Tenant of the Base Rent and
Additional Rent for the Premises and the performance of all of the covenants,
conditions and provisions on Tenant's part to be observed and performed under
this Lease, Tenant shall have quiet possession of the Premises for the entire
term hereof subject to all of the provisions of this Lease.
16.18 SUBORDINATION; ATTORNMENT; NON-DISTURBANCE.
(a) Subordination. This Lease shall be subject and subordinate to
any ground lease, mortgage, deed of trust, or other hypothecation or mortgage
(collectively, "Mortgage") now or hereafter placed by Landlord upon the real
property of which the Premises are a part, to any and all advances made on the
security thereof and to all renewals, modifications, consolidations,
replacements and extensions thereof. Tenant agrees that any person holding any
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Mortgage shall have no duty, liability or obligation to perform any of the
obligations of Landlord under this Lease. In the event of Landlord's default
with respect to any such obligation, Tenant will give any Lender, whose name and
address have previously in writing been furnished Tenant, notice of a default by
Landlord. Tenant may not exercise any remedies for default by Landlord unless
and until Landlord and the Lender shall have received written notice of such
default and a reasonable time (not less than 90 days) shall thereafter have
elapsed without the default having been cured. If any Lender shall elect to have
this Lease superior to the lien of its Mortgage and shall give written notice
thereof to Tenant, this Lease shall be deemed prior to such Mortgage. The
provisions of a Mortgage relating to the disposition of condemnation and
insurance proceeds shall prevail over any contrary provisions contained in this
Lease.
(b) Attornment. Subject to the non-disturbance provisions of
subparagraph C of this Paragraph 16.18, Tenant agrees to attorn to a Lender or
any other party who acquires ownership of the Premises by reason of a
foreclosure of a Mortgage. In the event of such foreclosure, such new owner
shall not: (i) be liable for any act or omission of any prior landlord or with
respect to events occurring prior to acquisition of ownership, (ii) be subject
to any offsets or defenses which Tenant might have against any prior Landlord,
or (iii) be liable for security deposits or be bound by prepayment of more than
one month's rent.
(c) Non-Disturbance. With respect to Mortgage entered into by
Landlord after the execution of this Lease, Tenant's subordination of this Lease
shall be subject to receiving assurance (a "non-disturbance agreement") from the
Mortgage holder that Tenant's possession and this Lease will not be disturbed so
long as Tenant is not in default and attorns to the record owner of the
Premises.
(d) Self-Executing. The agreements contained in this Paragraph
16.18 shall be effective without the execution of any further documents;
provided, however, that upon written request from Landlord or a Lender in
connection with a sale, financing or refinancing of Premises, Tenant and
Landlord shall execute such further writings as may be reasonably required to
separately document any such subordination or non-subordination, attornment
and/or non-disturbance agreement as is provided for herein. Landlord is hereby
irrevocably vested with full power to subordinate this Lease to a Mortgage.
16.19 RULES AND REGULATIONS. Tenant agrees that it will abide by, and to
cause its employees, suppliers, shippers, customers, tenants, contractors and
invitees to abode by all the rules and regulations attached hereto as Exhibit C
("Rules and Regulations") which Landlord may change from time to time for the
management, safety, care, and cleanliness of the Common Areas, the parking and
unloading of vehicles and the preservation of good order, as well as for the
convenience of other occupants or tenants of the Building and the Business
Center and their invitees. Landlord shall not be responsible to Tenant for the
non-compliance with said Rules and Regulations by other tenants of the Business
Center.
16.20 SECURITY MEASURES. Tenant acknowledges that the rental payable to
Landlord hereunder does not include the cost of guard service or other security
measures. Landlord has no obligations to provide same. Tenant assumes all
responsibility for the protection of the Premises, Tenant, its agents and
invitees and their property from the acts of third parties.
16.21 RESERVATIONS. Landlord reserves the right to grant such easements
that Landlord deems necessary and to cause the recordation of parcel maps, so
long as such easements and maps do not reasonably interfere with the use of the
Premises by Tenant. Tenant agrees to sign any documents reasonable requested by
Landlord to effectuate any such easements or maps.
16.22 CONFLICT. Any conflict between the printed provisions of this
Lease and the typewritten or handwritten provisions shall be controlled by the
typewritten or handwritten provisions.
16.23 OFFER. Preparation of this Lease by either Landlord or Tenant or
Landlord's agent or Tenant's agent and submission of same to Tenant or Landlord
shall not be deemed an offer to lease. This Lease is not intended to be binding
until executed and delivered by all Parties hereto.
16.24 AMENDMENTS. This Lease may be modified only in writing, signed by
the parties in interest at the time of the modification.
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16.25 MULTIPLE PARTIES. Except as otherwise expressly provided herein,
if more than one person or entity is named herein as Tenant, the obligations of
such persons shall be the joint and several responsibility of all persons or
entities named herein as such Tenant.
16.26 AUTHORITY. Each person signing on behalf of Landlord or Tenant
warrants and represents that she or is authorized to execute and deliver this
Lease and to make it a binding obligation of Landlord or Tenant.
17. LETTER OF CREDIT. By no later than August 1, 2001, in accordance with the
provisions of Sections 1.4 and 4.1 above, Tenant shall deliver to Landlord, as
collateral for the full and faithful performance by Tenant of all of its
obligations under this Lease and for all losses and damages Landlord may suffer
as a result of any default by Tenant under this Lease, an irrevocable and
unconditional negotiable letter of credit, in the form and containing the terms
required herein, payable in the City of Foster City, California (or in addition
you may state "payable in the County of San Mateo") running in favor of Landlord
issued by a solvent nationally recognized bank with a long term rating of BBB or
higher, under the supervision of the Superintendent of Banks of the State of
California, or a National Banking Association, in the amount of Two Million and
00/100 Dollars ($2,000,000.00) (the "Two Million Dollar Letter of Credit"). By
no later than August 1, 2002, Tenant shall increase the Two Million Dollar
Letter of Credit by One Million Dollars ($1,000,000.00) (the "Three Million
Dollar Letter of Credit"). By no later than August 1, 2003, Tenant shall
increase the Three Million Dollar Letter of Credit by One Million Dollars
($1,000,000.00) (the "Four Million Dollar Letter of Credit"). On August 1, 2007,
provided Tenant has not been in default of any term of this Lease (following
notice and an opportunity to cure as set forth in this Lease), Landlord will
agree to allow Tenant to reduce the Four Million Dollar Letter of Credit by Two
Million Dollars ($2,000,000.00). Subject to the foregoing, the Letters of Credit
referenced above (hereinafter referred to as the "Letter of Credit") shall be
(a) at sight and irrevocable and unconditional, (b) maintained in effect,
whether through replacement, renewal or extension, for the entire Lease Term
(the "Letter of Credit Expiration Date") and Tenant shall deliver a new Letter
of Credit or certificate of renewal or extension to Landlord at least thirty
(30) days prior to the expiration of the Letter of Credit, without any action
whatsoever on the part of Landlord, (c) subject to the Uniform Customs and
Practices for Documentary Credits (1993-Rev) International Chamber of Commerce
Publication #500, (d) acceptable to Landlord in its sole discretion, and (e)
fully assignable by Landlord and permit partial draws. In addition to the
foregoing, the form and terms of the Letter of Credit (and the bank issuing the
same) shall be acceptable to Landlord, in Landlord's sole discretion, and shall
provide, among other things, in effect that: (1) Landlord, or its then managing
agent, shall have the right to draw down an amount up to the face amount of the
Letter of Credit upon the presentation to the issuing bank of Landlord's (or
Landlord's then managing agent's) statement that such amount is due to Landlord
under the terms and conditions of this Lease, it being understood that if
Landlord or its managing agent be a limited liability company, corporation,
partnership or other entity, then such statement shall be signed by a managing
member (if a limited liability company) an officer (if a corporation), a general
partner (if a partnership), or any authorized party (if another entity); (2) the
Letter of Credit will be honored by the issuing bank without inquiry as to the
accuracy thereof and regardless of whether the Tenant disputes the content of
such statement; and (3) in the event of a transfer of Landlord's interest in the
Building, Landlord shall transfer the Letter of Credit, in whole or in part (or
cause a substitute letter of credit to be delivered, as applicable), to the
transferee and thereupon the Landlord shall, without any further agreement
between the parties, be released by Tenant from all liability therefor, and it
is agreed that the provisions hereof shall apply to every transfer or assignment
of the whole or any portion of said Letter of Credit to a new Landlord. Tenant
hereby acknowledges and agrees that Landlord is entering into this Lease in
material reliance upon the ability of Landlord to draw upon the Letter of Credit
upon the occurrence of any default on the part of Tenant hereunder which
continues beyond any applicable notice and cure periods. Tenant further
acknowledges and agrees that if Landlord cannot draw upon the Letter of Credit
within the times and in the manner as anticipated by Landlord herein, Landlord
shall suffer irreparable damage, harm and injury. From time to time during the
Term of this Lease it is anticipated by the parties that the Letter of Credit
will need to be amended, modified and, possibly reissued. Landlord and Tenant
hereby covenant and agree to cooperate with one another to promptly effectuate
any such amendments, modifications and new issuances, including without
limitation, executing and submitting to the Issuer any and all documents or
instruments as may be reasonably required to effectuate same. Each and every
time during the Term of this Lease there is a change in the identity or address
of the parties, including without limitation, any change in the identity of
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Landlord due to the sale, transfer or other conveyance by Landlord of its rights
and interests in, to and under this Lease to any other party, person or entity,
the Letter of Credit shall immediately be amended or reissued to reflect such
changes and the parties hereby agree to execute and submit to the Issuer such
further applications, documents and instruments as may be necessary to
effectuate same. It is the intention of the parties that each and every
successor and assign of both Landlord and Tenant be bound by and subject to the
terms and provisions of this Section 17. Landlord may, at any time and without
notice to Tenant and without first obtaining Tenant's consent thereto, assign
all or any portion of its interest in and to the Letter of Credit to another
party, person or entity, regardless of whether or not such assignment is
separate from or as a part of the assignment by Landlord of its rights and
interests in and to this Lease. If, as a result of any such application of all
or any part of the Letter of Credit, the amount of the Letter of Credit shall be
less than the face amount of the Letter of Credit (the "Face Amount") then
required of Tenant pursuant to the foregoing, Tenant shall within five (5) days
thereafter provide Landlord with additional letter(s) of credit in an amount
equal to the deficiency (or a replacement letter of credit in the Face Amount
and each such additional (or replacement) letter of credit shall comply with all
of the provisions of this Section 17, and if Tenant fails to do so,
notwithstanding anything to the contrary contained in Section 13 hereof, the
same shall constitute an incurable default by Tenant. Tenant further covenants
and warrants that it will neither assign nor encumber the Letter of Credit or
any part thereof and that neither Landlord nor its successors or assigns will be
bound by any such assignment, encumbrance, attempted assignment or attempted
encumbrance. Without limiting the generality of the foregoing, if the Letter of
Credit expires earlier than the Letter of Credit Expiration Date, Landlord will
accept a renewal thereof or substitute letter of credit (such renewal or
substitute letter of credit to be in effect not later than thirty (30) days
prior to the expiration thereof), which shall be irrevocable and automatically
renewable as above provided through the Letter of Credit Expiration Date upon
the same terms as the expiring letter of credit or such other terms as may be
acceptable to Landlord in its sole discretion. However, if the Letter of Credit
is not timely renewed or a substitute letter of credit is not timely received,
or if Tenant fails to maintain the Letter of Credit in the amount and terms set
forth in this Section 17, Landlord shall have the right to present such Letter
of Credit to the bank in accordance with the terms of this Section 17, and the
entire sum evidenced thereby shall be paid to and held by Landlord as collateral
for performance of all of Tenant's obligations under this Lease and for all
losses and damages Landlord may suffer as a result of any default by Tenant
under this Lease. If there shall occur a default under this Lease as set forth
in Section 13 of this Lease, Landlord may, but without obligation to do so, draw
upon the Letter of Credit, in part or in whole, to cure any default of Tenant
and/or to compensate Landlord for any and all damages of any kind or nature
sustained or which may be sustained by Landlord resulting from Tenant's default.
Tenant agrees not to interfere in any way with payment to Landlord of the
proceeds of the Letter of Credit, either prior to or following a "draw" by
Landlord of any portion of the Letter of Credit, regardless of whether any
dispute exists between Tenant and Landlord as to Landlord's right to draw from
the Letter of Credit. No condition or term of this Lease shall be deemed to
render the Letter of Credit conditional to justify the issuer of the Letter of
Credit in failing to honor a drawing upon such Letter of Credit in a timely
manner. Landlord and Tenant acknowledge and agree that in no event or
circumstance shall the Letter of Credit or any renewal thereof or substitute
therefor be (i) deemed to be or treated as a "security deposit" within the
meaning of California Civil Code Section 1950.7 (as supplemented, amended,
replaced and substituted from time to time), (ii) subject to the terms of such
Section 1950.7 (as supplemented, amended, replaced and substituted from time to
time), or (iii) intended to serve as a "security deposit" within the meaning of
such Section 1950.7 (as supplemented, amended, replaced and substituted from
time to time). The parties hereto recite that with respect to the Letter of
Credit, (x) the Letter of Credit is not intended to serve as a security deposit
and such Section 1950.7 (as supplemented, amended, replaced and substituted from
time to time), and any and all other laws, rules and regulations applicable to
security deposits in the commercial context ("Security Deposit Laws") shall have
no applicability or relevancy to the Letter of Credit and (y) Tenant waives any
and all rights, duties and obligations it may now or, in the future, will have
relating to or arising from the Security Deposit Laws.
The parties hereto have executed this Lease at the place and on
the dates specified above their respective signatures.
Landlord: Tenant:
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AMB PROPERTY, L.P., HYSEQ, INC.,
a Delaware limited partnership a Nevada corporation
By: AMB PROPERTY CORPORATION,
a Maryland corporation, its general
partner
By: /s/ JOHN L. ROSSI By: /s/ MARK GILTER
-------------------------------- ----------------------------
John L. Rossi Mark Gilter
Its: Vice President Its: Chief Financial Officer
---------------------------
Executed at: San Francisco, CA Executed at: Sunnyvale, CA
------------------------------- -------------------
on: July 17, 2000 on: July 7, 2000
---------------------------------------- ----------------------------
Landlord's Address: Tenant's Address:
505 Montgomery Street, 5th Floor
San Francisco, CA 94111
With a copy to: Tenant's Address:
Legacy Partners Commercial, Inc. 675 Almanor
101 Lincoln Center Drive/4th Floor -------------------------------
Foster City, California 94404 Sunnyvale, CA 94085
Attention: Humboldt Business Center -------------------------------
Phone: (650) 571-2200
FAX: (650) 571-2211
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EXHIBIT A
DIAGRAM OF PREMISES
26
EXHIBIT B
COMMENCEMENT DATE CERTIFICATE
LANDLORD: AMB PROPERTY, L.P.
TENANT:
------------------------------------------------
LEASE DATE:
------------------------------------------------
PREMISES:
------------------------------------------------
------------------------------------------------
Tenant hereby accepts the Premises as being in the condition required
under the Lease. The Commencement Date of the Lease is
_______________________, ____. The Expiration Date of the Lease is
_______________________, ____.
Landlord: Tenant:
AMB PROPERTY, L.P., __________________________________
a Delaware limited partnership __________________________________
By: AMB PROPERTY CORPORATION,
a Maryland corporation, its general
partner
By:_________________________ By: ______________________________
John L. Rossi ______________________________
Its: Vice President Its: Vice President
Executed at:________________________ Executed at:______________________
on:_________________________________ on:_______________________________
B-1
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EXHIBIT C
RULES & REGULATIONS
1. No advertisement, picture or sign of any sort shall be displayed on or
outside the Premises or the Building without the prior written consent of
Landlord. Landlord shall have the right to remove any such unapproved item
without notice and at Tenant's expense.
2. Tenant shall not regularly park motor vehicles in designated parking areas
after the conclusion of normal daily business activity.
3. Tenant shall not use any method of heating or air conditioning other than
that supplied by Landlord without the prior written consent of Landlord, which
shall not be unreasonably withheld.
4. All window coverings installed by Tenant and visible from the outside of the
Building require the prior written approval of Landlord.
5. Tenant shall not use, keep or permit to be used or kept any foul or noxious
gas or substance or any flammable or combustible materials on or around the
Premises, the Building or the Business Center, except as expressly permitted by
Tenant's Hazardous Materials Plan and disclosed in accordance with Exhibit D -
Hazardous Materials Disclosure Certificate.
6. Tenant shall not alter any lock or install any new locks or bolts on any door
at the Premises without the prior consent of Landlord.
7. Tenant agrees not to make any duplicate keys without the prior consent of
Landlord.
8. Tenant shall park motor vehicles in those general parking areas as designated
by Landlord except for loading and unloading. During those periods of loading
and unloading, Tenant shall not unreasonably interfere with traffic flow within
the Business Center and loading and unloading areas of other tenants.
9. Tenant shall not disturb, solicit or canvas any occupant of the Building or
Business Center and shall cooperate to prevent same.
10. No person shall go on the roof without Landlord's permission.
11. Business machines and mechanical equipment belonging to Tenant which cause
noise or vibration that may be transmitted to the structure of the Building, to
such a degree as to be objectionable to Landlord or other Tenants, shall be
placed and maintained by Tenant, at Tenant's expense, on vibration eliminators
or other devices sufficient to eliminate noise or vibration.
12. All goods, including material used to store goods, delivered to the Premises
of Tenant shall be immediately moved into the Premises and shall not be left in
parking or receiving areas overnight.
13. Tractor trailers, which must be unhooked or parked with dolly wheels beyond
the concrete loading areas must use steel plates or wood blocks under the dolly
wheels to prevent damage to the asphalt paving surfaces. No parking or storing
of such trailers will be permitted in the auto parking areas of the Business
Center or on streets adjacent thereto.
14. Forklifts which operate on asphalt paving areas shall not have solid rubber
tires and shall only use tires that do not damage the asphalt.
15. Tenant is responsible for the storage and removal of all trash and refuse.
All such trash and refuse shall be contained in suitable receptacles stored
behind screened enclosures at locations approved by Landlord.
16. Tenant shall not store or permit the storage or placement of goods, or
merchandise or pallets or equipment of any sort outside of the Premises nor in
or around the Building, the Business Center or any of the Common Areas of the
foregoing. No displays or sales of merchandise shall be allowed in the parking
lots or other Common Areas.
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17. Tenant shall not permit any motor vehicles to be washed on any portion of
the Premises or in the Common Areas of the Business Center, nor shall Tenant
permit mechanical work or maintenance of motor vehicles to be performed on any
portion of the premises or in the Common Areas of the Business Center.
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EXHIBIT D
HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE
Your cooperation in this matter is appreciated. Initially, the information
provided by you in this Hazardous Materials Disclosure Certificate is necessary
for the Landlord (identified below) to evaluate and finalize a lease agreement
with you as Tenant. After a lease agreement is signed by you and the Landlord
(the "Lease Agreement"), on an annual basis in accordance with the provisions of
Section 6.5 of the signed Lease Agreement, you are to provide an update to the
information initially provided by you in this certificate. The information
contained in the initial Hazardous Materials Disclosure Certificate and each
annual certificate provided by you thereafter will be maintained in
confidentiality by Landlord subject to release and disclosure as required by (i)
any lenders and owners and their respective environmental consultants, (ii) any
prospective purchaser(s) of all or any portion of the property on which the
Premises are located, (iii) Landlord to defend itself or its lenders, partners
or representatives against any claim or demand, and (iv) any laws, rules,
regulations, orders, decrees, or ordinances, including, without limitation,
court orders or subpoenas. Any and all capitalized terms used herein, which are
not otherwise defined herein, shall have the same meaning ascribed to such term
in the signed Lease Agreement. Any questions regarding this certificate should
be directed to, and when completed, the certificate should be delivered to:
Landlord: AMB Property, L.P., a Delaware limited partnership
c/o Legacy Partners Commercial, Inc.
101 Lincoln Centre Drive, Fourth Floor
Foster City, California 94404
Attn:_____________________________
Phone: (650) 571-2200
Name of (Prospective) Tenant:__________________________________________________
Mailing Address:_______________________________________________________________
_______________________________________________________________________________
Contact Person, Title and Telephone Number(s):_________________________________
Contact Person for Hazardous Waste Materials Management and Manifests and
Telephone Number(s):
_______________________________________________________________________________
_______________________________________________________________________________
Address of (Prospective) Premises:_____________________________________________
Length of (Prospective) Initial Term:__________________________________________
_______________________________________________________________________________
1. GENERAL INFORMATION:
Describe the initial proposed operations to take place in, on, or about
the Premises, including, without limitation, principal products processed,
manufactured or assembled services and activities to be provided or otherwise
conducted. Existing Tenants should describe any proposed changes to on-going
operations.
_______________________________________________________________________________
_______________________________________________________________________________
2. USE, STORAGE AND DISPOSAL OF HAZARDOUS MATERIALS
2.1 Will any Hazardous Materials be used, generated, stored or disposed
of in, on or about the Premises? Existing Tenants should describe any Hazardous
Materials which continue to be used, generated, stored or disposed of in, on or
about the Premises.
Wastes Yes [ ] No [ ]
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Chemical Products Yes [ ] No [ ]
Other Yes [ ] No [ ]
If Yes is marked, please explain:______________________________________
_______________________________________________________________________________
_______________________________________________________________________________
2.2 If Yes is marked in Section 2.1, attach a list of any Hazardous
Materials to be used, generated, stored or disposed of in, on or about the
Premises, including the applicable hazard class and an estimate of the
quantities of such Hazardous Materials at any given time; estimated annual
throughput; the proposed location(s) and method of storage (excluding nominal
amounts of ordinary household cleaners and janitorial supplies which are not
regulated by any Environmental Laws); and the proposed location(s) and method of
disposal for each Hazardous Material, including, the estimated frequency, and
the proposed contractors or subcontractors. Existing Tenants should attach a
list setting forth the information requested above and such list should include
actual data from on-going operations and the identification of any variations in
such information from the prior year's certificate.
3. STORAGE TANKS AND SUMPS
3.1 Is any above or below ground storage of gasoline, diesel, petroleum,
or other Hazardous Materials in tanks or sumps proposed in, on or about the
Premises? Existing Tenants should describe any such actual or proposed
activities.
Yes [ ] No [ ]
If yes, please explain:________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
4. WASTE MANAGEMENT
4.1 Has your company been issued an EPA Hazardous Waste Generator I.D.
Number? Existing Tenants should describe any additional identification numbers
issued since the previous certificate.
Yes [ ] No [ ]
4.2 Has your company filed a biennial or quarterly reports as a
hazardous waste generator? Existing Tenants should describe any new reports
filed.
Yes [ ] No [ ]
If yes, attach a copy of the most recent report filed.
5. WASTEWATER TREATMENT AND DISCHARGE
5.1 Will your company discharge wastewater or other wastes to:
______ storm drain? ______ sewer?
______ surface water? ______ no wastewater or other wastes discharged.
Existing Tenants should indicate any actual discharges. If so, describe
the nature of any proposed or actual discharge(s).
_______________________________________________________________________________
_______________________________________________________________________________
5.2 Will any such wastewater or waste be treated before discharge?
Yes [ ] No [ ]
If yes, describe the type of treatment proposed to be conducted.
Existing Tenants should describe the actual treatment conducted.
_______________________________________________________________________________
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_______________________________________________________________________________
6. AIR DISCHARGES
6.1 Do you plan for any air filtration systems or stacks to be used in
your company's operations in, on or about the Premises that will
discharge into the air; and will such air emissions be monitored?
Existing Tenants should indicate whether or not there are any such air
filtration systems or stacks in use in, on or about the Premises which
discharge into the air and whether such air emissions are being
monitored.
Yes [ ] No [ ]
If yes, please describe:_______________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
6.2 Do you propose to operate any of the following types of equipment,
or any other equipment requiring an air emissions permit? Existing
Tenants should specify any such equipment being operated in, on or about
the Premises.
_______ Spray booth(s) ______ Incinerator(s)
_______ Dip tank(s) ______ Other (Please describe)
_______ Drying oven(s) ______ No Equipment Requiring Air
Permits
If yes, please describe:_______________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
7. HAZARDOUS MATERIALS DISCLOSURES
7.1 Has your company prepared or will it be required to prepare a
Hazardous Materials management plan ("Management Plan") pursuant to Fire
Department or other governmental or regulatory agencies' requirements?
Existing Tenants should indicate whether or not a Management Plan is
required and has been prepared.
Yes [ ] No [ ]
If yes, attach a copy of the Management Plan. Existing Tenants
should attach a copy of any required updates to the Management Plan.
7.2 Are any of the Hazardous Materials, and in particular chemicals,
proposed to be used in your operations in, on or about the Premises
regulated under Proposition 65? Existing Tenants should indicate whether
or not there are any new Hazardous Materials being so used which are
regulated under Proposition 65.
Yes [ ] No [ ]
If yes, please describe:_______________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
8. Enforcement Actions and Complaints
8.1 With respect to Hazardous Materials or Environmental Laws, has your
company ever been subject to any agency enforcement actions,
administrative orders, or consent decrees or has your company received
requests for information, notice or demand letters, or any other
inquiries regarding its operations? Existing Tenants should indicate
whether
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or not any such actions, orders or decrees have been, or are in the
process of being, undertaken or if any such requests have been received.
Yes [ ] No [ ]
If yes, describe the actions, orders or decrees and any continuing
compliance obligations imposed as a result of these actions, orders or decrees
and also describe any requests, notices or demands, and attach a copy of all
such documents. Existing Tenants should describe and attach a copy of any new
actions, orders, decrees, requests, notices or demands not already delivered to
Landlord pursuant to the provisions of Section 6.2, 6.3, 6.4 and 6.5 of the
signed Lease Agreement.
_______________________________________________________________________________
_______________________________________________________________________________
8.2 Have there ever been, or are there now pending, any lawsuits against your
company regarding any environmental or health and safety concerns?
Yes [ ] No [ ]
If yes, describe any such lawsuits and attach copies of the
complaint(s), cross-complaint(s), pleadings and all other documents related
thereto as requested by Landlord. Existing Tenants should describe and attach a
copy of any new complaint(s), cross-complaint(s), pleadings and other related
documents not already delivered to Landlord pursuant to the provisions of
Section 6.2, 6.3, 6.4 and 6.5 of the signed Lease Agreement.
_______________________________________________________________________________
_______________________________________________________________________________
8.3 Have there been any problems or complaints from adjacent Tenants,
owners or other neighbors at your company's current facility with regard
to environmental or health and safety concerns? Existing Tenants should
indicate whether or not there have been any such problems or complaints
from adjacent Tenants, owners or other neighbors at, about or near the
Premises.
Yes [ ] No [ ]
If yes, please describe. Existing Tenants should describe any such
problems or complaints not already disclosed to Landlord under the provisions of
the signed Lease Agreement.
_______________________________________________________________________________
_______________________________________________________________________________
9. PERMITS AND LICENSES
9.1 Attach copies of all Hazardous Materials permits and licenses
including a Transporter Permit number issued to your company with
respect to its proposed operations in, on or about the Premises,
including, without limitation, any wastewater discharge permits, air
emissions permits, and use permits or approvals. Existing Tenants should
attach copies of any new permits and licenses as well as any renewals of
permits or licenses previously issued.
The undersigned hereby acknowledges and agrees that (A) this Hazardous Materials
Disclosure Certificate is being delivered in connection with, and as required
by, Landlord in connection with the evaluation and finalization of a Lease
Agreement and will be attached thereto as an exhibit; (B) that this Hazardous
Materials Disclosure Certificate is being delivered in accordance with, and as
required by, the provisions of Section 6.5 of the Lease Agreement; and (C) that
Tenant shall have and retain full and complete responsibility and liability with
respect to any of the Hazardous Materials disclosed in the HazMat Certificate
notwithstanding Landlord's/Tenant's receipt and/or approval of such certificate.
Tenant further agrees that none of the following described acts or events shall
be construed or otherwise interpreted as either (a) excusing, diminishing or
otherwise limiting Tenant from the requirement to fully and faithfully perform
its
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obligations under the Lease with respect to Hazardous Materials, including,
without limitation, Tenant's indemnification of the Indemnitees and compliance
with all Environmental Laws, or (b) imposing upon Landlord, directly or
indirectly, any duty or liability with respect to any such Hazardous Materials,
including, without limitation, any duty on Landlord to investigate or otherwise
verify the accuracy of the representations and statements made therein or to
ensure that Tenant is in compliance with all Environmental Laws; (i) the
delivery of such certificate to Landlord and/or Landlord's acceptance of such
certificate, (ii) Landlord's review and approval of such certificate, (iii)
Landlord's failure to obtain such certificate from Tenant at any time, or (iv)
Landlord's actual or constructive knowledge of the types and quantities of
Hazardous Materials being used, stored, generated, disposed of or transported on
or about the Premises by Tenant or Tenant's Representatives. Notwithstanding the
foregoing or anything to the contrary contained herein, the undersigned
acknowledges and agrees that Landlord and its partners, lenders and
representatives may, and will, rely upon the statements, representations,
warranties, and certifications made herein and the truthfulness thereof in
entering into the Lease Agreement and the continuance thereof throughout the
term, and any renewals thereof, of the Lease Agreement.
I (print name)_______________, acting with full authority to bind the (proposed)
Tenant and on behalf of the (proposed) Tenant, certify, represent and warrant
that the information contained in this certificate is true and correct.
(PROSPECTIVE) TENANT:
By:________________________________
Title:_____________________________
Date:______________________________
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EXHIBIT E
TENANT IMPROVEMENTS
[INTENTIONALLY OMITTED]
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ADDENDUM 1
LANDLORD'S REMEDIES ADDENDUM IN EVENT OF TENANT DEFAULT
(STATE OF CALIFORNIA)
(a) TERMINATION. In the event of any Default by Tenant, then in
addition to any other remedies available to Landlord at law or in equity and
under this Lease, Landlord shall have the immediate option to terminate this
Lease and all rights of Tenant hereunder by giving written notice of such
intention to terminate. In the event that Landlord shall elect to so terminate
this Lease then Landlord may recover from Tenant:
(1) the worth at the time of award of any unpaid Rent and
any other sums due and payable which have been earned at the time of such
termination; plus
(2) the worth at the time of award of the amount by which
the unpaid Rent and any other sums due and payable which would have been earned
after termination until the time of award exceeds the amount of such rental loss
Tenant proves could have been reasonably avoided; plus
(3) the worth at the time of award of the amount by which
the unpaid Rent and any other sums due and payable for the balance of the term
of this Lease after the time of award exceeds the amount of such rental loss
that Tenant proves could be reasonably avoided; plus
(4) any other amount necessary to compensate Landlord for
all the detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which in the ordinary course would be likely to
result therefrom, including, without limitation, any costs or expenses incurred
by Landlord (i) in retaking possession of the Premises; (ii) in maintaining,
repairing, preserving, restoring, replacing, cleaning, altering or
rehabilitating the Premises or any portion thereof, including such acts for
reletting to a new tenant or tenant's; (iii) for leasing commissions; or (iv)
for any other costs necessary or appropriate to relet the Premises; plus
(5) such reasonable attorneys' fees incurred by Landlord
as a result of a Default, and costs in the event suit is filed by Landlord to
enforce such remedy; and plus
(6) at Landlord's election, such other amounts in addition
to or in lieu of the foregoing as may be permitted from time to time by
applicable law.
As used in subparagraphs (1) and (2) above, the "worth at the time of award" is
computed by allowing interest at an annual rate equal to twelve percent (12%)
per annum or the maximum rate permitted by law, whichever is less. As used in
subparagraph (3) above, the "worth at the time of award" is computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award, plus one percent (1%). Tenant waives redemption
or relief from forfeiture under California Code of Civil Procedure Sections 1174
and 1179, or under any other present or future law, in the event Tenant is
evicted or Landlord takes possession of the Premises by reason of any Default of
Tenant hereunder.
(b) CONTINUATION OF LEASE. In the event of any Default by Tenant,
then in addition to any other remedies available to Landlord at law or in equity
and under this Lease, Landlord shall have the remedy described in California
Civil Code Section 1951.4 (Landlord may continue this Lease in effect after
Tenant's Default and abandonment and recover Rent as it becomes due, provided
tenant has the right to sublet or assign, subject only to reasonable
limitations).
(c) RE-ENTRY. In the event of any Default by Tenant, Landlord
shall also have the right, with or without terminating this Lease, in compliance
with applicable law, to re-enter the Premises and remove all persons and
property from the Premises; such property may be removed and stored in a public
warehouse or elsewhere at the cost of and for the account of Tenant.
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(d) RELETTING. In the event of the abandonment of the Premises by
Tenant or in the event that Landlord shall elect to re-enter or shall take
possession of the Premises pursuant to legal proceeding or pursuant to any
notice provided by law, then if Landlord does not elect to terminate this Lease
as provided in Paragraph a, Landlord may from time to time, without terminating
this Lease, relet the Premises or any part thereof for such term or terms and at
such rental or rentals and upon such other terms and conditions as Landlord in
its sole discretion may deem advisable with the right to make alterations and
repairs to the Premises. In the event that Landlord shall elect to so relet,
then rentals received by Landlord from such reletting shall be applied in the
following order: (1) to reasonable attorneys' fees incurred by Landlord as a
result of a Default and costs in the event suit is filed by Landlord to enforce
such remedies; (2) to the payment of any indebtedness other than Rent due
hereunder from Tenant to Landlord; (3) to the payment of any costs of such
reletting; (4) to the payment of the costs of any alterations and repairs to the
Premises; (5) to the payment of Rent due and unpaid hereunder; and (6) the
residue, if any, shall be held by Landlord and applied in payment of future Rent
and other sums payable by Tenant hereunder as the same may become due and
payable hereunder. Should that portion of such rentals received from such
reletting during any month, which is applied to the payment of Rent hereunder,
be less than the Rent payable during the month by Tenant hereunder, then Tenant
shall pay such deficiency to Landlord. Such deficiency shall be calculated and
paid monthly. Tenant shall also pay to Landlord, as soon as ascertained, any
costs and expenses incurred by Landlord in such reletting or in making such
alterations and repairs not covered by the rentals received from such reletting.
(e) TERMINATION. No re-entry or taking of possession of the
Premises by LANDLORD pursuant to this Addendum shall be construed as an election
to terminate this Lease unless a written notice of such intention is given to
Tenant or unless the termination thereof is decreed by a court of competent
jurisdiction. Notwithstanding any reletting without termination by Landlord
because of any Default by Tenant, Landlord may at any time after such reletting
elect to terminate this Lease for any such Default.
(f) CUMULATIVE REMEDIES. The remedies herein provided are not
exclusive and Landlord shall have any and all other remedies provided herein or
by law or in equity.
(g) NO SURRENDER. No act or conduct of Landlord, whether
consisting of the acceptance of the keys to the Premises, or otherwise, shall be
deemed to be or constitute an acceptance of the surrender of the Premises by
Tenant prior to the expiration of the Term, and such acceptance by Landlord of
surrender by Tenant shall only flow from and must be evidenced by a written
acknowledgment of acceptance of surrender signed by Landlord. The surrender of
this Lease by Tenant, voluntarily or otherwise, shall not work a merger unless
Landlord elects in writing that such merger take place, but shall operate as an
assignment to Landlord of any and all existing subleases, or Landlord may, at
its option, elect in writing to treat such surrender as a merger terminating
Tenant's estate under this Lease, and thereupon Landlord may terminate any or
all such subleases by notifying the sublessee of its election so to do within
five (5) days after such surrender.
(h) NOTICE PROVISIONS. Tenant agrees that any notice given by
Landlord pursuant to Paragraph 13.1 of the Lease shall satisfy the requirements
for notice under California Code of Civil Procedure Section 1161, and Landlord
shall not be required to give any additional notice in order to be entitled to
commence an unlawful detainer proceeding.
TENANT INITIALS LANDLORD INITIALS
_______________________________ ___________________________________
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