EXHIBIT 10.15
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
STANDARD SUBLEASE
(Short-form to be used with post 1995 AIR leases)
1. Parties. This Sublease, dated, for reference purposes only, June 30,
1999 , is made by and between Advanced Fibre Communications, Inc. a Delaware
Corporation ("Sublessor") and Cerent Corporation ("Sublessee").
2. Premises. Sublessor hereby subleases to Sublessee and Sublessee hereby
subleases from Sublessor for the term, at the rental, and upon all of the
conditions set forth herein, that certain real property, including all
improvements therein, and commonly known by the street address of ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Petaluma located in the County of Sonoma State of California
and generally described as (describe briefly the nature of the property) a
freestanding commercial building of approximately 39,830 s.f. single level and
all the buildings parking area and common areas. See Exhibit A ("Premises").
3. Term.
3.1 Term. The term of this Sublease shall be for approximately 8
years, 8 months and 25 days commencing on July 6th, 1999 and ending on March 31,
2008 sooner terminated pursuant to any provision hereof.
3.2 Delay in Commencement. Sublessor agrees to use its best commercially
reasonable efforts to deliver possession of the Premises by the commencement
date. If, despite said efforts, Sublessor is unable to deliver possession as
agreed, the rights and obligations of Sublessor and Sublessee shall be as set
forth in Paragraph 2 of the Master Lease (as modified by Paragraph 7.3 of this
Sublease) .
4. Rent.
4.1 Base Rent. Sublessee shall pay to Sublessor as Base Rent for the
Premises equal monthly payments of $ See Addendum #1 13 a. & b. In advance, on
the first day of each month of the term hereof. Sublessee shall pay Sublessor
upon the execution hereof $9,507 as Base Rent for July 6, 1999 through August 8,
1999. See Addendum #13 a.& b. Base Rent for any period during the term hereof
which is for less than one month shall be a pro rata portion of the monthly
installment.
4.2 Rent Defined. All monetary obligations of Sublessee to Sublessor under
the terms of this Sublease (except for the Security Deposit) are deemed to be
rent ("Rent"). Rent shall be payable in lawful money of the United States to
Sublessor at the address stated herein or to such other persons or at such other
places as Sublessor may designate in writing.
5. Security Deposit. Sublessee shall deposit with Sublessor upon
execution hereof $ N/A as security for Sublessee's faithful performance of
Sublessee's obligations hereunder. The rights and obligations of Sublessor and
Sublessee as to said Security Deposit shall be as set forth in Paragraph 5 of
the Master Lease (as modified by Paragraph 7.3 of this Sublease).
6. Use.
6.1 Agreed Use. The Premises shall be used and occupied only for
General office and research & development uses and for no other unlawful
purpose.
6.2 Compliance NOTE: Sublessee is responsible for determining whether or
not the zoning is appropriate for its intended use, and acknowledges that past
uses of the Premises may no longer be allowed. If the Premises do not comply
with said warranty, or in the event that the Applicable Requirements are
hereafter changed, the rights and obligations of Sublessor and Sublessee shall
be as provided in Paragraph 2.3 of the Master Lease (as modified by Paragraph
7.3 of this Sublease). See Addendum #19 for continuation .
6.3 Acceptance of Premises and Lessee. Sublessee acknowledges that:
(a) it has been advised by Brokers to satisfy itself with
respect to the condition of the Premises (including but not limited to the
electrical, HVAC and fire sprinkler systems, security, environmental aspects,
and compliance with Applicable Requirements), and their suitability for
Sublessee's intended use,
(b) Sublessee has made such investigation as it deems necessary
with reference to such matters and assumes all responsibility therefor as the
same relate to its occupancy of the Premises, and
(c) neither Sublessor, Sublessor's agents, nor any Broker has
made any oral or written representations or warranties with respect to said
matters other than as set forth in this Sublease. In addition, Sublessor
acknowledges that:
(a) Broker has made no representations, promises or warranties
concerning Sublessee's ability to honor the Sublease or suitability to occupy
the Premises, and
(b) it is Sublessor's sole responsibility to investigate the
financial capability and/or suitability of all proposed tenants.
7. Master Lease
7.1 Sublessor is the lessee of the Premises by virtue of a lease,
hereinafter the "Master Lease", a copy of which is attached hereto marked
Exhibit 1, wherein G&W/Redwood Associates Joint Venture, a California General
Partnership is the lessor, hereinafter the "Master Lessor"
7.2 This Sublease is and shall be at all times subject and
subordinate to the Master Lease.
7.3 The terms, conditions and respective obligations of Sublessor and
Sublessee to each other under this Sublease shall be the terms and conditions of
the Master Lease
Therefore, for the purposes of this Sublease, wherever in the Master Lease the
word "Lessor" is used it shall be deemed to mean the Sublessor herein and
wherever in the Master Lease the word "Lessee" is used it shall be deemed to
mean the Sublessee herein.
7.4 During the term of this Sublease and for all periods subsequent
for obligations which have arisen prior to the termination of this Sublease,
Sublessee does hereby expressly assume and agree to perform and comply with, for
the benefit of Sublessor and Master Lessor, each and every obligation of
Sublessor under the Master Lease except for the following paragraphs which are
excluded therefrom: none
----
7.5 The obligations that Sublessee has assumed under paragraph 7.4
hereof are hereinafter referred to as the "Sublessee's Assumed Obligations" The
obligations that Sublessee has not assumed under paragraph 7.4 hereof are
hereinafter referred to as the "Sublessor's Remaining Obligations".
7.6 Sublessee shall hold Sublessor free and harmless from all
liability, judgments, costs, damages, claims or demands. including reasonable
attorneys' fees, arising out of Sublessee's failure to comply with or perform
Sublessee's Assumed Obligations.
7.7 Sublessor agrees to maintain the Master Lease during the entire
term of this Sublease, subject, however, to any earlier termination of the
Master Lease without the fault of the Sublessor, and to comply with or perform
Sublessor's Remaining Obligations and to hold Sublessee free and harmless from
all liability, judgments, costs, damages, claims or demands arising out of
Sublessor's failure to comply with or perform Sublessor's Remaining Obligations.
7.8 Sublessor represents to Sublessee that the Master Lease is in
full force and effect and that no default exists on the part of any Party to the
Master Lease.
8. Assignment of Sublease and Default.
8.1
8.2 Sublessor may receive, collect and enjoy the Rent accruing under
this Sublease. However, if Sublessor shall Default in the performance of its
obligations to Master Lessor then Master Lessor may, at its option, receive and
collect, directly from Sublessee, all Rent owing and to be owed under this
Sublease. Master Lessor shall not, by reason of this assignment of the Sublease
nor by reason of the collection of the Rent from the Sublessee, be deemed liable
to Sublessee for any failure of the Sublessor to perform and comply with
Sublessor's Remaining Obligations.
8.3 Sublessor hereby irrevocably authorizes and directs Sublessee
Upon receipt of any written notice from the Master Lessor stating that a Default
exists in the performance of Sublessor's obligations under the Master Lease, to
pay to Master Lessor the Rent due and to become due under the Sublease.
Sublessor agrees that Sublessee shall have the right to rely upon any such
statement and request from Master Lessor, and that Sublessee shale pay such Rent
to Master Lessor without any obligation or right to inquire as to whether such
Default exists and notwithstanding any notice from or claim from Sublessor to
the contrary and Sublessor shall have no right or claim against Sublessee for
any such Rent so paid by Sublessee.
9. Consent of Master Lessor.
9.2
9.3 In the event that Master Lessor does give such consent then:
(a) Such consent shall not release Sublessor of its obligations
or alter the primary liability of Sublessor to pay the Rent and perform and
comply with all of the obligations of Sublessor to be performed under the Master
Lease.
(b) The acceptance of Rent by Master Lessor from Sublessee or
anyone else liable under the Master Lease shall not be deemed a waiver by Master
Lessor of any provisions of the Master Lease.
(c) The consent to this Sublease shall not constitute a consent
to any subsequent subletting or assignment.
(d)
(e)
(f) In the event that Sublessor shall Default in its obligations
under the Master Lease, then Master Lessor, at its option and without being
obligated to do so, may require Sublessee to attorn to Master Lessor in which
event Master Lessor shall undertake the obligations of Sublessor under this
Sublease from the time of the exercise of said option to termination of this
Sublease but Master Lessor shall not be liable for any prepaid Rent nor any
Security Deposit paid by Sublessee, nor shall Master Lessor be liable for any
other Defaults of the Sublessor under the Sublease.
9.4
9.5
9.6
10. Brokers Fee.
10.1 Upon execution hereof by all parties, Sublessee shall pay to
▇▇▇▇▇▇ & Coppin Company. Inc. a licensed real estate broker, ("Broker"), a fee
as set forth in a separate agreement between Sublessor and Broker, or in the
event there is no such separate agreement, the sum of $ separate agreement for
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brokerage services rendered by Broker to Sublessor in this transaction .
10.2 Sublessor agrees that if Sublessee exercises any option or right
of first refusal as granted by Sublessor herein, or any option or right
substantially similar thereto, either to extend the term of this Sublease, to
renew this Sublease, to purchase the Premises, or to lease or purchase adjacent
property which Sublessor may own or in which Sublessor has an interest, then
Sublessor shall pay to Broker a fee in accordance with the schedule of-Broker in
effect at the time of the execution of this Sublease. Notwithstanding the
foregoing, Sublessor's obligation under this Paragraph 10.2 is limited to a
transaction in which Sublessor is acting as a Sublessor, lessor or seller.
10.3
10.4
10.5 Any transferee of Sublessor's interest in this Sublease, or
Master Lessor's interest in the Master lease, by accepting an assignment
thereof, shall be deemed to have assumed the respective obligations of Sublessor
or Master Lessor under this paragraph 10. Broker shall be deemed to be a third-
party beneficiary of this paragraph 10.
11. Attorney's Fees. If any party of the Broker named herein brings an
action to enforce the terms hereof or to declare rights hereunder, the
prevailing party in any such action, on trial and appeal, shall be entitled to
his reasonable attorney's fees to be paid by the losing party as fixed by the
Court.
12. Additional Provisions. [ If there are no additional provisions, draw a
line from this point to the next printed word after the space left here. If
there are additional provisions place the same here.]
See Attached Addendum #13-23
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ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN
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INDUSTRIAL REAL ESTATE ASSOCIATION OR BY ANY REAL ESTATE BROKER AS TO THE LEGAL
SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS SUBLEASE OR THE
TRANSACTION TO WHICH IT RELATES. THE PARTIES ARE URGED TO:
1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS SUBLEASE.
2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE
PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE
PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PROPERTY, THE STRUCTURAL
INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, AND THE SUITABILITY
OF THE PREMISES FOR SUBLESSEE'S INTENDED USE.
WARNING: IF THE SUBJECT PROPERTY IS LOCATED IN A STATE OTHER THAN CALIFORNIA,
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CERTAIN PROVISIONS OF THE SUBLEASE MAY NEED TO BE REVISED TO COMPLY WITH THE
LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED.
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Executed at: Petaluma, California Advanced Fibre Communications
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on: ______________________________ By ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
By /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇ -Chief Financial
Officer
Address:__________________________ --------------------------------
"Sublessor" (Corporate Seal)
Executed at: Petaluma, California Cerent Corporation
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By /s/ Cerent Corporation
on:_______________________________ --------------------------------
Address___________________________ By Cerent Corporation
---------------------------------
"Master Sublessee" (Corporate Seal)
Executed at: Petaluma, California
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on:_______________________________ By ________________________________
Address:__________________________ By ________________________________
"Master Lessor"" (Corporate Seal)
NOTE: These forms are often modified to meet changing requirements of law and
needs of the industry. Always write or call to make sure you are utilizing the
most current form: AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, ▇▇▇ ▇▇. ▇▇▇▇▇▇
▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. (▇▇▇) ▇▇▇-▇▇▇▇.
Addendum #1 To The Standard Sublease
By and Between
Advanced Fibre Communications, Inc. (Sublessor)
and
Cerent Corporation (Sublessee)
The parties hereby agree as follows:
13 a. Sublease Base Rent Schedule: Sublessee shall pay to Sublessor monthly
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base rent according to the following schedule: (Sublessee will also be
responsible for monthly Cam charges per Section 4 of the master lease).
Year 1: July 6, 1999 to June 30, 2000 $1.15 psf, per month
Year 2: July 1, 2000 to June 30, 2001 $1.185 psf, per month
Year 3: July 1, 2001 to June 30, 2002 $1.22 psf, per month
Year 4: July 1, 2002 to June 30, 2003 $1.26 psf, per month
Year 5: July 1, 2003 to June 30, 2004: $1.29 psf, per month
Year 6: July 1, 2004 to June 30, 2005: $1.33 psf, per month
Year 7: July 1, 2005 to June 30, 2006: $1.37 psf, per month
Year 8: July 1, 2006 to June 30, 2007: $1.41 psf, per month
Year 9: July 1, 2007 to March 31, 2008: $1.46 psf, per month
13 b. Phased Occupancy: (See Exhibit B)
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Sublessee shall occupy the facility in 3 phases:
Phase I occupancy: July 6, 1999 (approximately 8,000 square feet)
Phase II occupancy: August 9, 1999 (approximately 11,000 additional
square feet)
Phase III occupancy: November 1, 1999 (approximately 20,8.30 additional
square feet, Sublessee now occupies
the entire facility of 39,830)
Sublessee shall pay a prorated monthly rent based upon the square footage
occupied between the period of July 6, 1999 and November 1, 1999.
From July 6, 1999 to August 8, 1999 Sublessee shall pay $9,507
(8,000 square feet multiplied by $1.15 psf, multiplied by 31 days)
From August 9, 1999 to August 31, 1999 Sublessee shall pay $16,752.00
(19,000 square feet multiplied by $1.15 psf, multiplied by 23 days)
From September 1, 1999 through October 31, 1999, (2 months) Sublessee shall
pay monthly rent equal to $21,850 (19,000 square feet multiplied by $1.15 psf).
Rent Abatement Period
---------------------
From November 1, 1999 through May 15, 2000 (6.5 months)Sublessee shall be
relieved of their base rent obligation, and shall only be responsible for
ongoing CAM charges, utilities, and interior janitorial.
14. Financial Statement Approval: Sublessor has previously reviewed and
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approved Sublessee's Financial Statements and Credit Report.
15. Tenant Improvements: Sublessor shall grant Sublessee an interior tenant
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improvement allowance equal to $597,450. This allowance shall be divided into
one-half cash ($299,720), and one-half in the form of free base rent to
Sublessee. Sublessor shall convey the cash portion to Sublessee on or before
November 1, 1999. Sublessee shall receive six and one-half (6.5) months of free
base rent. This abated rent period shall commence November 1, 1999 and run
through May 15, 1999. (See rent schedule above, 13 a. & b.) All interior tenant
improvements shall be designed and constructed by the Sublessee at Sublessee's
sole cost. Sublessee will pay for all costs of architectural fees and any
required permits. Sublessee shall construct said premises to meet all applicable
codes including ADA requirements and codes. Sublessee shall be responsible to
provide all tenant workstations and other personal property, including all
telephone, data and computer equipment.
Sublessor and Sublessee to approve plans and specifications covering the
layout of the premises and the scope of responsibility of the Tenant
Improvements between Sublessor and Sublessee as stipulated in the sublease.
Sublessee to install tenant improvements in a quality, good workmanlike
manner in accordance with approved plan and specifications in a timely
fashion.
Sublessee shall have full responsibility as indicated above and
additionally Sublessee shall remove all mechanics liens, to satisfy all
claims and meet all contract requirements with suppliers, contractors and
employees arising out of said installation of improvements. Sublessee to
have ▇▇▇▇▇▇▇ compensation and liability insurance with a minimum $500,000
per occurrence for said installation and to name Sublessor additional
insured. Sublessee shall indemnify and hold harmless Sublessor for all
claims of employees, invitees, materialmen, or suppliers arising out of
said installation, except on the case of Sublessor's negligence.
Area Measurements: Sublessee has reviewed and approved the system of
-----------------
measurement and the usable and rentable square footage of the subject
premises.
Restoration: If required by Master Lessor (G&W/Redwood Associates, or its
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successor), Sublessee (Cerent) will restore those improvements or
alterations that Sublessee installs in the premises. All improvements or
alterations done by Sublessee shall be done per architects drawings,
previously approved by Sublessor and Master Lessor. Any existing
improvements (not altered by Cerent) will be the responsibility of
Sublessor (AFC).
16. Use Permit: If deemed necessary Sublessee shall obtain a use permit for
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the use stated herein from the applicable Governmental Agency, within
twenty (20) calendar days of acceptance hereof. Sublessor shall use due
diligence in pursuing the use permit. Any permit application costs
associated with obtaining the use permit shall be borne by Sublessee.
17. Signage: Upon the commencement of Phase II (approximately August 9, 1999),
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AFC (Sublessor), will remove all existing building signage. Upon the
commencement of Phase III (approximately November 1, 1999), Cerent
(Sublessee), shall be allowed to install building and/or monument signage
on the property consistent with and subject to the rules and regulations of
the business park, and at the sole cost of Sublessee.
18. Real Estate Agency: ▇▇▇▇▇▇ & Coppin Company, Inc., is representing Cerent
--------------------
Corporation exclusively in this sublease transaction.
19. Compliance (continued from Page. 1, Paragraph 6.2) Sublessee accepts the
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Premises "AS IS" without any warranty, express or implied. Sublessee shall
be responsible for any improvements or changes currently or hereinafter
required by any statute or regulation including, but not limited to, the
Americans with Disabilities Act. Upon full occupancy, Sublessee shall
assume all maintenance for the HVAC and security systems installed in the
Premises.
20. Subordinate: This Sublease shall be subject and subordinate at all times to
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the Master Lease and to all of its provisions, covenants and conditions.
Sublessee is to perform faithfully and is bound by all of the terms,
covenants, conditions, provisions and agreements of the Master Lease
(including, without limitation, insurance requirements, as though Sublessee
were the "Tenant" under the Master Lease) for the period covered by the
Sublease.
21. Assignment & Subletting: The Sublease set forth in this agreement shall not
-------------------------
be assignable or transferable and shall not be construed as a consent by
Sublessor to any further subletting by Sublessee or to any assignment by
Sublessee of the Sublease, whether or not the Sublease purports to permit
the same, and, without limiting the generality of the foregoing. Subtenant
has no right whatsoever to assign, mortgage or encumber the Sublease nor to
sublet any portion of the Premises or permit any portion of the premises to
be used or occupied by any other party or in any other manner to transfer
all or any part of Sublessee's rights
with respect to the Sublease or the Premises. All provisions in the Master
Lease restricting or prohibiting transfer of Sublessor's interests shall
also apply to restrict or prohibit transfer by Sublessee.
22. Alterations: Sublessee understands and acknowledges that (i) Landlord's
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consent to the Sublease expressed herein is not a consent to any
improvements or alteration work to be performed in the Premises (including
without limitation any improvement work contemplated in the Sublease), (ii)
Landlord's consent for such work must be separately sought and (iii) any
such work shall be subject to all the provisions of the Master Lease with
respect thereto.
The herein agreement, upon execution by both parties, is herewith made an
integral part of the aforementioned Standard Office Sublease.
Sublessor: Sublessee:
/s/Advanced Fibre Communications Inc. /s/Cerent Corporation
---------------------------------- ------------------------------
Advanced Fibre Communications, Inc. Cerent Corporation
Date: Date:7-8-99
____________________________ ------------------------------
ADDENDUM #23
STANDARD LEASE DISCLOSURE ADDENDUM
Notice to Owners, Buyers and Tenants Regarding Hazardous Wastes or Substances
-----------------------------------------------------------------------------
and Underground Storage Tanks
------------------------------
Comprehensive federal and state laws and regulations have been enacted in the
last few years in all effort to develop controls over the use, storage,
handling, cleanup, removal and disposal of hazardous wastes or substances. Some
of these laws and regulations, such as, for example, the so-called "Super Fund
Act", provide for broad liability schemes wherein an owner, tenant or other user
of the property may be liable for cleanup costs and damages regardless of fault.
Other laws and regulations set standards for the handling of asbestos or
establish requirements for the use, modification, abandonment, or closing of
underground storage tanks.
It is not practical or possible to list all such laws and regulations in this
Notice. Therefore, lessors and lessees are urged to consult legal counsel to
determine their respective rights and liabilities with respect to the issues
described in this Notice as well as other aspects of the proposed transaction.
If various materials that have been or may be in the future determined to be
toxic, hazardous or undesirable, or are going to be used, stored, handled or
disposed of on the property, or if the property has or may have underground
storage tanks for storage of such hazardous materials, or that such materials
may be in the equipment, improvements or soil, it is essential that legal and
technical advice be obtained to determine, among other things, what permits and
approvals have been or may be required, if any, the estimated costs and expenses
associated with the use. storage, handling, cleanup, removal or disposal of the
hazardous wastes or substances and what contractual provisions and protection
are necessary or desirable. It may also be important to obtain expert assistance
for site investigations and building inspections. The past uses of the property
may provide valuable information as to the likelihood of hazardous wastes or
substances, or underground storage tanks being on the property.
The term "hazardous wastes or substances" is used in this Notice in its very
broadest sense and includes, but is not limited to, all those listed under
Proposition 65, petroleum base products, paints and solvents, lead, cyanide,
DDT, printing inks, acids, pesticides, ammonium compounds, asbestos, PCBs and
other chemical products. Hazardous wastes or substances and underground storage
tanks may be present on all types of real property. This Notice is, therefore,
meant to apply to any transaction involving any type of real property, whether
improved or unimproved.
Although ▇▇▇▇▇▇ & ▇▇▇▇▇▇ Co., Inc. or its salespeople, will disclose any
knowledge it actually possesses with respect to the existence of hazardous
wastes or substances, or underground storage tanks on the property, ▇▇▇▇▇▇ &
Coppin Co., Inc. has not made investigations or obtained reports regarding the
subject matter of this Notice, except as may be described in a separate written
document, studies or investigation by experts. Therefore, unless there are
additional documents or studies attached to this notice, lease or contract, this
will serve as notification that ▇▇▇▇▇▇ & ▇▇▇▇▇▇ Co., Inc. or its salespeople
make no representation regarding the existence or non-existence of hazardous
wastes or substances, or underground storage tanks on the property. You should
contact a professional, such as a civil engineer, geologist, industrial
hygienist or other persons with experience in these matters to advise you
concerning the property.
Americans with Disabilities Act (ADA)
-------------------------------------
On July 26, 1991, the federal legislation blown as the Americans with
Disabilities Act (ADA) was signed into law by ▇▇▇▇▇▇▇▇▇ ▇▇▇▇. The purpose of the
ADA is to integrate persons with disabilities into the economic and social
mainstream of American life. Title III of the ADA applies to Lessors and Lessees
of "places of public accommodation" and "commercial facilities", and requires
that places of public accommodation undertake "readily achievable" removal of
communication and access barriers to the disabled. This requirement of Title III
of the ADA is effective January 26, 1992.
It is important that building owners identify and undertake "readily achievable"
removal of any such barriers in the common areas, sidewalks, parking lots and
other areas of the building under their control.
The lessor and lessee are responsible for compliance with ADA relating to
removal of barriers within the workplace i.e. arrangement of interior
furnishings and access within the premises, and any improvements installed by
lessor and lessee.
▇▇▇▇▇▇ & ▇▇▇▇▇▇ Company, Inc. recommends that both parties seek expert advice
regarding the implications of the Act as it affects this agreement.
▇▇▇▇▇▇▇-▇▇▇▇▇▇:
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"The property which is the subject of this contract may be situated in a Special
Study Zone as designated tinder the ▇▇▇▇▇▇▇-▇▇▇▇▇▇ Geologic Hazard Act, Sections
2621-2625, inclusive, of the California Public Resources Code: and, as such, the
construction or development on this property of any structure for human
occupancy may be subject to the findings of a geologic report prepared by a
geologist registered in the State of California, unless such report is waived by
the City or County under the terms of that act. No representations on the
subject are made by the lessor or agent, and the lessee should make his own
inquiry or investigation".
Flood Hazard Area Disclosure:
-----------------------------
The subject property may be situated in a "Special Flood Hazard Area" as set
forth on a Federal Emergency Management Agency (FEMA) "Flood Insurance Rate Map"
(FIRM) or "Flood Hazard Boundary Map" (FHBM). The law provides that, as a
condition of obtaining financing on most structures located in a "Special Floods
Hazard Area", lender requires flood insurance where the property or its
attachments are security for a loan. Lessee should consult with experts
concerning the possible risk of flooding.
Acknowledgment:
Lessee:/s/ Cerent Corporation Date: 7-8-99
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Lessor:/s/ Advanced Fibre Communications,Inc. Date: ________________
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EXHIBIT A
[FLOOR PLAN OF REDWOOD BUSINESS PARK APPEARS HERE]
PHASED MOVE SCHEDULE FROM BLDG #144C
EXHIBIT B
[FLOOR PLAN APPEARS HERE]
Exhibit ▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
NET LEASE
THIS LEASE, dated July 10 ,1995 , is made and entered into by and between
G & W/Redwood Associates Joint Venture, a California general partnership
("Landlord"), and Advanced Fibre Communications. a California Corporation
("Tenant").
1. Premises.
---------
Landlord leases to Tenant, and Tenant hereby leases from Landlord for the
term of this Lease ("Term") and at the rent and upon the conditions set forth
below, the Premises described in the Basic Lease Information and identified on
the floor plan attached hereto as Exhibit A. The Premises are located within the
Building described in the Basic Lease Information, and constitute part of the
Project described in the Basic Lease Information and as shown in Exhibit A-1
attached hereto, at the Redwood Business Park, located in Petaluma, California.
All areas and facilities outside the Buildings and within the exterior
boundaries of the Project that are provided and designated by Landlord from time
to time for the general nonexclusive use and convenience of the tenants of the
Project shall be known as "Common Areas".
2. Term.
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(a) The Term shall commence upon the date ("Commencement Date") which is
the earlier of: (i) substantial completion of the Premises, as the term
"substantial completion" is defined in the Work Letter Agreement, attached
hereto as Exhibit B; or (ii) the date substantial completion would have occurred
but for Tenant Delays (as the term is defined in the Work Letter Agreement). The
Estimated Commencement Date is set forth in the Basic Lease Information, which
date may be postponed due to a delay in delivering the Premises as provided in
Paragraph 2(b) below. A "Lease Year" is a period of twelve (12) consecutive
calendar months. A "Lease Month" is a calendar month. The initial Term of this
Lease shall be determined as follows:
(1) If the Commencement Date of this Lease occurs on the first
calendar day of a calendar month, the Term shall be for a period of Lease Years
and Months as specified in the Basic Lease Information, unless terminated sooner
as provided in this Lease.
(2) If the Commencement Date of this Lease occurs on other than the
first calendar day of a calendar month, the Term shall be for a period of Lease
Years and Months as specified in the Basic ease Information, plus the number of
days remaining in the calendar month in which the Commencement Date occurs,
unless terminated sooner as provided in this Lease.
(b) Subject to the provisions of Paragraph 22 below, in the event the
Premises are not substantially completed (in accordance with the Work Letter
Agreement) on or within six (6) months after the Estimated Commencement Date,
then Tenant may, at Tenant's option, by notice in writing to Landlord within ten
(10) days thereafter, cancel this Lease, in which event, (i) this Lease shall be
deemed null and void and have no further force or effect, (ii) all security or
other deposits made herewith shall be promptly returned to Tenant, and (iii) the
parties shall have no further obligation to each other; provided further,
however, that if such written notice of Tenant is not received by Landlord
within said 10-day period, Tenant's right to cancel this Lease hereunder shall
terminate and be of no further force or effect.
3. Rent.
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(a) For purposes of this Lease, the term "Rent" shall mean the Base
Rent, Advanced Base Rent, all additional rent, and all of the other monetary
obligations of Tenant under this Lease. Upon execution of this Lease, Tenant
shall pay to Landlord the Advanced
Base Rent set forth in the Basic Lease Information. Tenant shall pay to Landlord
the Base Rent specified in the Basic Lease Information, payable on or before the
first day of each and every successive calendar month following the Commencement
Date. If the Term commences on other than the first day of a calendar month, the
first payment of Base Rent shall be appropriately prorated, on the basis of a
30-day month. Tenant's payment of any Advanced Base Rent (excluding that portion
attributable to last month's rent, if any) shall be credited against Tenant's
obligation to pay Base Rent beginning as of the Commencement Date.
(b) Tenant shall pay, as additional rent, all amounts of money required to
be paid to Landlord by Tenant under this Lease in addition to monthly Base Rent,
whether or not the same be designated "additional rent." If such amounts are not
paid at the time provided in this Lease, they shall nevertheless be collectable
as additional rent with the next installment of monthly Base Rent thereafter
falling due, but nothing herein contained shall be deemed to suspend or delay
the payment of any amount of money at the time the same becomes due and payable
hereunder, or limit any other remedy of Landlord.
(c) Tenant acknowledges that late payment by Tenant to Landlord of Rent
after the expiration of any applicable grace period 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, and late charges which may be imposed on
Landlord by the terms of any trust deed covering the Premises. Accordingly, if
any installment of Rent or any other sums due from Tenant shall not be received
by Landlord when due, Tenant shall pay to Landlord a late charge equal to two
percent (2%)of such overdue amount. The parties 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.
(d) Any amount due to Landlord, if not paid when due, shall bear interest
from the date due until paid at the rate of ten percent (10%) per annum. Payment
of interest shall not excuse or cure any default hereunder by Tenant.
(e) All payments due from Tenant to Landlord hereunder shall be made to
Landlord without deduction or offset, in lawful money of the United States of
America at Landlord's address for notices hereunder, or to such other person or
at such other place as Landlord may from time to time designate in writing to
Tenant.
4. Taxes and Operating Expenses.
-----------------------------
(a) In addition to the Base Rent, Tenant shall pay (i) Tenant's Percentage
Share of Property Taxes (according to the percentage set forth in the Basic
Lease Information) relating to those Property Taxes (as the term is defined
under Paragraph 4(a)(1) below) which are assessed during the Term, and (ii)
Tenant's Percentage Share of Operating Expenses (according to the percentage set
forth in the Basic Lease Information) relating to those Operating Expenses (as
the term is defined under Paragraph 4(a)(2) below) which are paid or incurred by
Landlord during the Term.
(1) "Property Taxes" shall mean all real property taxes, bonds and
assessments and governmentally imposed fees or charges (and any tax levied
wholly or partly in lieu thereof) levied, assessed, confirmed, imposed or which
have become a lien against the Building (which for the purposes of defining
"Property Taxes" shall include the tax parcel of which the Building is a part)
and Common Areas.
(2) "Operating Expenses" shall mean the following: (A) all costs of
management, operation, maintenance and repair of the Building and Common Areas,
including, without limitation, property management expenses, maintenance and
repair materials, supplies and
equipment; (B) all costs of water, power, electricity, refuse collection,
parking lot sweeping, landscaping, and other services relating to the Common
Areas; (C) all costs of alterations or improvements to the Building or Common
Areas made to achieve compliance with federal, state and local law including,
without limitation, the Americans with Disabilities Act (42 U.S.C. Section 12101
et seq.), which costs will be amortized over the useful life of each alteration
or improvement; (D) all costs of public liability and casualty insurance
maintained by Landlord with respect to the Building and Common Areas; (E) all
costs incurred by Landlord for making any capital improvements, structural
repairs or modifications to the Building or Common Areas or making any
improvements or modifications to reduce the operating expenses, which costs will
be amortized over the useful life of each capital improvement, structural repair
or modification; (F) all costs of maintaining machinery, equipment and
directional signage or other markers; and (G) the share allocable to the
Building of dues and assessments payable under any reciprocal easement or common
area maintenance agreements or declarations or by any owners' associations
affecting the Building. That portion of the Operating Expenses relating to the
property management expenses for the Building and Common Areas which shall be
charged to Tenant shall be four percent (4%) of both Tenant's annual Base Rent
and the subtotal of Tenant's share of Operating Expenses of the Building. In the
event that Landlord calculates the Operating Expenses based upon the Project
instead of the Building, as indicated on the Basic Lease Information, then the
term "Project" shall be substituted in the place of all references to the term
"Building" in this paragraph.
(b) The Property Taxes to be paid by Tenant shall be determined by
multiplying the total amount of the Property Taxes by Tenant's Percentage Share
of Property Taxes (which percentage is determined by multiplying 100% by a
fraction, the numerator of which is the rentable area of the Premises and the
denominator of which is the total rentable area of all improvements located
within the tax parcel of which the Premises are a part). Landlord may cause the
Common Areas of the Project to be separately assessed from other areas and
buildings of the Project. In such case, Tenant's Percentage Share of Property
Taxes attributable to the Common Areas shall be determined by the ratio that the
total rentable square feet in the Premises bears to the total number of square
feet of rentable area which is included in the property subject to the
assessment.
(c) Operating Expenses for each calendar year shall be adjusted to equal
Landlord's reasonable estimate of Operating Expenses as though ninety-five
percent (95%) of the total rentable area of the Building had been occupied. When
the Building is one hundred percent (100%) occupied, the Operating Expenses
shall be adjusted to reflect a 100% occupied building. The Operating Expenses to
be paid by Tenant shall be determined by multiplying the total amount of the
Operating Expenses as adjusted above by Tenant's Percentage Share of Operating
Expenses (which percentage is determined by multiplying 100% by a fraction, the
numerator of which is the rentable area of the Premises and the denominator of
which is the total rentable area located within the Building, if the Operating
Expenses are calculated for the Building, or within the Project, if the
Operating Expenses are calculated for the Project).
(d) Tenant shall pay to Landlord each month at the same time and in the
same manner as monthly Base Rent one-twelfth (1/12th) of Landlord's estimate of
the amount of Property Taxes and one-twelfth (1/12th) of Landlord's estimate of
Operating Expenses payable by Tenant for the then-current calendar year. The
initial monthly amount shall be as set forth in the Basic Lease Information.
Within one hundred twenty (120) days after the close of each calendar year, or
as soon after such 120-day period as practicable, Landlord shall deliver to
Tenant a statement in reasonable detail of the actual amount of Property Taxes
and Operating Expenses payable by Tenant in accordance with this Paragraph 4 for
such calendar year. Tenant may request further information if desired.
Landlord's failure to provide such statement to Tenant within the 120-day period
shall not act as a waiver and shall not excuse Tenant or Landlord from making
the adjustments to reflect actual costs as provided herein. If on
the basis of such statement Tenant owes an amount that is less than the
estimated payments for such calendar year previously made by Tenant, Landlord
shall credit such excess to Tenant against future additional rent due under this
Paragraph 4. If on the basis of such statement Tenant owes an amount that is
more than the estimated payments for such calendar year previously made by
Tenant, Tenant shall pay the deficiency to Landlord within fifteen (15) days
after delivery of the statement. The obligations of Landlord and Tenant under
this Paragraph 4(d) with respect to the reconciliation between the estimated and
actual amounts of Property Taxes and operating Expenses payable by Tenant for
the last year of the Term shall survive the termination of the Lease. When the
final determination is made of the actual amounts of Property Taxes and
Operating Expenses payable by Tenant for the year in which this Lease
terminates, Tenant shall immediately pay any increase due over the estimated
payments and, conversely, any overpayment made by Tenant shall be immediately
reimbursed to Tenant by Landlord.
5. Other Taxes.
------------
In addition to Tenant's obligations under Paragraph 4 above, Tenant shall
pay or reimburse Landlord for (i) any taxes upon, measured by or reasonably
attributable to the cost or value of Tenant's equipment, furniture, fixtures,
and other personal property located in the Premises or leasehold improvements
made in or to the Premises at Tenant's expense, (ii) for taxes, if any, measured
by or reasonably attributable to tenant improvements paid for by Tenant, and
(iii) for any taxes, assessments, fees, or charges imposed by any public
authority or private community maintenance association upon or by reason of the
development, possession, use or occupancy of the Premises or the parking
facilities used by Tenant in connection with the Premises. On request by
Landlord, Tenant shall furnish Landlord with satisfactory evidence of payment of
Tenant's business personal property taxes and deliver copies of such business
personal property tax bills to Landlord.
6. Use.
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6.1 Prohibited Uses.
----------------
(a) The Premises shall be used and occupied by Tenant solely for the
use set forth in the Basic Lease Information. Tenant shall, at Tenant's expense,
comply promptly with all applicable federal, state and local laws, regulations,
ordinances, rules, orders, and requirements in effect during the Term relating
to the condition, use or occupancy of the Premises. Tenant shall not use or
permit the use of the Premises in any manner that will tend to create waste or a
nuisance, or that unreasonably disturbs other tenants of the Building or
Project, nor shall Tenant place or maintain any signs, antennas, awnings,
lighting or plumbing fixtures, loudspeakers, exterior decoration or similar
devises on or visible from the exterior of the Premises, without Landlord's
prior written consent, which may be withheld in Landlord's sole discretion.
Tenant shall not use any corridors, sidewalks, stairs, elevators, or other areas
outside of the Premises for storage or any purpose other than access to the
Premises. Tenant shall not use, keep, or permit to be used or kept on the
Premises any foul or noxious gas or substance, nor shall Tenant do or permit to
be done anything in and about the Premises, either in connection with activities
hereunder expressly permitted or otherwise, which would cause an increase in
premiums for or a cancellation of any policy of insurance (including fire
insurance) maintained by Landlord in connection with the Premises or the
Building or which would violate the terms of any covenants, conditions, or
restrictions, or the design guidelines, or the sign guidelines affecting the
Building or the land on which it is located, or the Rules (as the term is
defined under Paragraph 6.3(b) below).
(b) Tenant shall not attach any signage to or on any part of the
outside of the Premises; the Building or the Project, or in the halls, lobbies,
windows or elevator banks of the Building without Landlord's prior written
consent, which consent may be withheld in Landlord's sole discretion. Any
signage so permitted shall be subject to prior approval of and conformance with
the
requirements of the design review committee of the Project and the design review
agency of the city. At Tenant's expense, Tenant shall (i) maintain all permitted
signage, and (ii) upon the expiration or termination of this Lease, remove such
signage and repair any damage caused by their removal. If Tenant fails to do so,
Landlord may maintain, repair or remove such signage without notice to Tenant
and at Tenant's expense, the cost of which shall be payable by Tenant as
additional rent in accordance with Paragraph 14(b)(2) below.
6.2 Suitability. Tenant acknowledges that neither Landlord nor any agent
-----------
of Landlord has made any representation or warranty with respect to the Premises
or the Building or with respect to the suitability or fitness of either for the
conduct of Tenant's business or for any other purpose. Nor has Landlord agreed
to undertake any modification, alteration or improvement to the Premises except
as provided in this Lease. Tenant acknowledges that the Premises are located in
a 100-year flood zone and that the finished floor elevations of the Building are
designed to be at least one (1) foot above the federal government's estimate of
the 100-year flood level at the time of initial construction.
6.3 Use of Common Areas.
--------------------
(a) Landlord gives Tenant and its authorized employees, agents,
customers, representatives, and invitees the nonexclusive right to use the
Common Areas, with others who are entitled to use the Common Areas, subject to
Landlord's rights as set forth in this Paragraph 6.3.
(b) All Common Areas shall be subject to the exclusive control and
management of Landlord and Landlord shall have the right to establish, modify,
amend, and enforce reasonable rules and regulations with respect to the Common
Areas. Tenant acknowledges receipt of a copy of the current rules and
regulations, attached hereto as Exhibit C, and agrees that they may, from time
to time, be modified or amended by Landlord in a commercially reasonable manner
(the "Rules"). Tenant agrees to abide by and conform with such Rules; to cause
its concessionaires and its and their employees and agents to abide by such
Rules; and to use its best efforts to cause its customers, invitees, and
licensees to abide by such Rules.
(c) Landlord shall have the right to close temporarily any portion of
the Common Areas for the purpose of discouraging use by parties who are not
tenants or customers of tenants; to use portions of the Common Areas while
engaged in making additional improvements or repairs or alterations to the
Property; to use or permit the use of the Common Areas by others to whom
Landlord may grant or have granted such rights; and to do and perform such acts
in, to, and with respect to, the Common Areas as in the use of good business
judgment Landlord shall determine to be appropriate for the Project.
(d) Landlord shall have the unqualified right to increase or reduce
the Common Areas, provided the Project meets the parking requirement under
Paragraph 6.5 below.
(e) Tenant shall cooperate with Landlord and other tenants in the
Project in recycling waste paper, cardboard, or such other materials identified
under any trash recycling program that may be established in order to reduce
trash collection costs.
6.4 Environmental Matters.
----------------------
(a) (1) The term "Hazardous Materials" as used herein means any
petroleum products, asbestos, polychlorinated biphenyls, P.C.B.'s , chemicals,
compounds, materials, mixtures or substances that are now or hereafter defined
or listed in, or otherwise classified as a 'hazardous substance", "hazardous
material", "hazardous waste", "extremely hazardous waste","infectious waste",
"toxic substance", "toxic pollutant" or any other formulation intended to
define, list or classify substances by reason of deleterious properties such as
ignitability, corrosivity, reactivity, carcinogenicity or toxicity pursuant to
any federal, state or local
environmental law, regulation, ordinance, resolution, order or decree relating
to industrial hygiene, environmental protection or the use, analysis,
generation, manufacture, storage, release, disposal or transportation of the
same ("Hazardous Materials Laws").
(2) Except for ordinary office supplies and janitorial cleaning
materials which in common business practice are customarily and lawfully used,
stored and disposed of in small quantities, and except for those Hazardous
Materials listed on Exhibit D attached hereto, Tenant shall not use,
manufacture, store, release, dispose or transport any Hazardous Materials in,
on, under or about the Premises, the Building or the Project without giving
prior written notice to Landlord and obtaining Landlord's prior written consent,
which consent Landlord may withhold in its sole discretion. Subject to
Landlord's prior written consent, Hazardous Materials may be added to Exhibit D
on an annual review basis; any such amendments to Exhibit D shall be signed by
each party and attached hereto. Tenant shall at its own expense procure,
maintain in effect, and comply with all conditions of any and all permits,
licenses, and other governmental and regulatory approvals required in connection
with Tenant's generation, use, storage, disposal and transportation of Hazardous
Materials. Except as discharged into the sanitary sewer in strict accordance and
conformity with all applicable Hazardous Materials Laws, Tenant shall cause any
and all Hazardous Materials removed from the Premises to be removed and
transported solely by duly licensed haulers to duly licensed facilities for
final disposal of such materials and wastes. Regardless whether permitted under
the Hazardous Materials Laws, Tenant shall not maintain in, on, under, or about
the Premises, the Building or the Project any above or below ground storage
tanks, clarifiers, or sumps, nor shall any ▇▇▇▇▇ for the monitoring of ground
water, soils, or subsoils be allowed.
(3) Tenant shall immediately notify Landlord in writing of: (a) any
enforcement, cleanup, removal or other governmental or regulatory action
instituted, completed or threatened pursuant to any Hazardous Materials Law; (b)
any claim made or threatened by any person or entity against Tenant or the
Premises relating to damage, contribution, cost, recovery, compensation, loss or
injury resulting from or claimed to result from any Hazardous Materials; and (c)
any reports, information, inquiries or demands made, ordered, or received by or
on behalf of Tenant which arise out of or in connection with the existence or
potential existence of any Hazardous Materials in, on, under or about the
Premises, the Building, or the Project, including, without limitation, any
complaints, notices, warnings, asserted violations, or mandatory or voluntary
informational filings with any governmental agency in connection therewith, and
immediately supply Landlord with copies thereof.
(b) Tenant shall indemnify, defend (by counsel reasonably acceptable
to Landlord), protect, and hold Landlord, and each of Landlord's partners,
officers, directors, partners, employees, affiliates, joint venturers, members,
trustees, owners, shareholders, principals, agents, representatives, attorneys,
successors and assigns, free and harmless from and against any and all claims,
liabilities, damages, fines, penalties, forfeitures, losses, cleanup and
remediation costs or expenses (including attorneys' fees) or death of or injury
to any person or damage to any property whatsoever, arising from or caused in
whole or in part, directly or indirectly, by (i) Tenant's use, analysis,
generation, manufacture, storage, release, disposal, or transportation of
Hazardous Materials by Tenant, Tenant's agents, employees, contractors,
licensees or invitees to, in, on, under, about or from the Premises, the
Building, or the Project, or (ii) Tenant's failure to comply with any Hazardous
Materials Law. Tenant's obligations hereunder shall include, without limitation,
and whether foreseeable or unforeseeable, all costs of any required or necessary
repair, cleanup, detoxification or decontamination of the Premises, the
Building, or the Project and the preparation and implementation of any closure,
remedial action or other required plans in connection therewith, and shall
survive the expiration or earlier termination of this Lease.
(c) Landlord shall have the right to enter the Premises during
regular business hours upon reasonable prior notice at all times for the
purposes of ascertaining compliance by Tenant with all applicable Hazardous
Materials Laws, provided, however, that in the instance of an emergency
Landlord's entry onto the Premises shall not be restricted to regular business
hours nor shall notice be required.
(d) Landlord shall have the option to declare a default of this Lease
for the release or discharge of Hazardous Materials by Tenant, Tenant's
employees, agents, contractors, or invitees on the Premises, Building or Project
or in violation of law or in deviation from prescribed procedures in Tenant's
use or storage of Hazardous Materials. If Tenant fails to comply with any of the
provisions under this Paragraph 6.4, Landlord shall have the right (but not the
obligation) to remove or otherwise cleanup any Hazardous Materials from the
Premises, the Building or the Project. In such case, the costs of any Hazardous
Materials investigation, removal or other cleanup (including, without
limitation, transportation, storage, disposal and attorneys' fees and costs)
will be additional rent due under this Lease, whether or not a court has ordered
the cleanup, and will become due and payable on demand by Landlord.
6.5 Parking. Landlord grants to Tenant and Tenant's customers, suppliers,
-------
employees and invitees a nonexclusive license to use unassigned and unreserved
parking spaces in the Common Areas for the use of motor vehicles during the Term
subject to rights reserved to Landlord as specified in this Paragraph 6.5.
Landlord reserves the right to grant similar nonexclusive and unassigned and
unreserved use to other tenants; to promulgate rules and regulations relating to
the use of the Common Areas including parking by tenants and employees of
tenants; to make changes in the parking layout from time to time; and to do and
perform any other acts in and to these areas and improvements as Landlord
determines to be advisable. Tenant agrees not to overburden the parking
facilities and to abide by and conform with the rules and regulations and to
cause its employees and agents to abide by and conform to the rules and
regulations. Upon request, Tenant shall provide Landlord with license plate
numbers of all vehicles driven by its employees and to cause Tenant's employees
to park only in spaces specifically designated for tenant parking. Landlord
shall have the unqualified right to rearrange or reduce the number of parking
spaces; provided, however, the ratio of the number of parking spaces available
to Tenant will be no less than three point five (3.5) spaces per 1,000 usable
square feet of the Premises.
7. Services.
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(a) Tenant shall pay for all water, sewer, gas, electricity, heat,
cooling, telephone, refuse collection, and other utility-type services furnished
to Tenant or the Premises, together with all related installation or connection
charges or deposits. Wherever it is practical to do so such services shall be
separately metered or charged to Tenant by the provider thereof and paid for
directly by Tenant. To the extent any of the foregoing services are provided by
Landlord, Tenant shall reimburse Landlord for all costs incurred by Landlord in
connection with the provision of such services based on Landlord's reasonable
estimate of the level of Tenant's use or consumption of such services. Landlord
shall ▇▇▇▇ Tenant on a monthly or other periodic basis for such services and
payment shall be made by Tenant within ten (10) days after submittal of
Landlord's statement.
(b) Landlord shall not be in default hereunder or be liable for any
damages or personal injuries to any person directly or indirectly resulting
from, nor shall there be any Rent abatement by reason of, any interruption or
curtailment whatsoever in utility services.
8. Maintenance, Repairs and Alterations.
-------------------------------------
(a) Tenant shall, at Tenant's expense, maintain every part of the Premises
in good order, condition and repair, including without limitation, (i) all
interior surfaces, ceilings, walls, door frames, window frames, floors, carpets,
draperies, window coverings and fixtures, (ii) all windows, doors, locks and
closing devices, entrances, plate glass, and signs, (iii) all plumbing and
sewage pipes, fixtures and fittings, (iv) all phone lines, electrical wiring,
equipment, switches, outlets, and lightbulbs, (v) any fire detection, fire
sprinkler or extinguisher equipment, (vi) all of Tenant's personal property,
improvements and alterations, and (vii) all other fixtures and special items
installed by or for the benefit of, or at the expense of Tenant. Tenant shall,
at its expense, cause to be maintained in good operating condition and repair,
all heating, ventilating, and air conditioning equipment installed in, or on the
roof of the Premises. Tenant shall keep in force a preventive maintenance
contract with a qualified maintenance company covering all heating, ventilating
and air conditioning equipment and shall annually provide Landlord with a copy
of this contract. Tenant shall not enter onto the roof area of the Building,
except for the purpose of maintaining the heating, ventilating, and air
conditioning equipment and provided that Tenant shall repair any damage to the
roof area caused by its entry. Tenant shall be responsible for its own
janitorial service. Landlord shall incur no expense (nor have any obligation) of
any kind whatsoever in connection with the maintenance of the Premises.
(b) Landlord shall keep in good condition and repair the foundation, roof
structure, exterior walls and other structural parts of the Building, and all
other portions of the Building not the obligation of Tenant or any other tenant
in the Building. Tenant expressly waives the benefits of any statute, including
Civil Code Sections 1941 and 1942, which would afford Tenant the right to make
repairs at Landlord's expense or to terminate this Lease due to Landlord's
failure to keep the Building in good order, condition and repair. Landlord shall
have no liability to Tenant for any damage, inconvenience, or interference with
the use of the Premises by Tenant as the result of Landlord performing any such
maintenance and repair work.
(c) In the event Tenant fails to perform Tenant's obligations under this
▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇ may, but shall not be required to, give Tenant notice to
do such acts as are reasonably required to so maintain the Premises. If Tenant
shall fail to commence such work and diligently prosecute it to completion, then
Landlord shall have the right (but not the obligation) to do such acts and
expend such funds at the expense of Tenant as are reasonably required to perform
such work. Any amounts so expended by Landlord will be additional rent due under
this Lease, and such amounts will become due and payable on demand by Landlord.
Landlord shall have no liability to Tenant for any such damages, inconvenience,
or interference with the use of the Premises by Tenant as a result of performing
such work.
(d) Upon the expiration or earlier termination of this Lease, Tenant shall
surrender the Premises in good condition and repair, only ordinary wear and tear
excepted. Tenant, at its sole cost and expense, agrees to repair any damages to
the Premises caused by or in connection with the removal of any articles of
personal property, business or trade fixtures, signs, machinery, equipment,
cabinetwork, furniture, moveable partitions, or permanent improvements or
additions, including without limitation thereto, repairing the floor and
patching and painting the walls where required by Landlord, to Landlord's
reasonable satisfaction. Tenant shall indemnify Landlord against any loss or
liability resulting from delay by Tenant in so surrendering the Premises,
including without limitation, any claims made by any succeeding tenant resulting
from such delay.
(e) Tenant shall not make any alterations, improvements, or additions in,
on, or about the Premises without Landlord's prior written consent, except that
Tenant may make alterations, improvements, or additions without Landlord's prior
written consent where (i) the reasonably estimated cost does not exceed $2,500,
and
(ii) such alterations, improvements, or additions do not affect or involve the
structural integrity, roof membrane, exterior areas, building systems, or water-
tight nature of the Premises, the Building or the Project. In requesting
Landlord's consent, Tenant shall, at Tenant's sole cost, submit to Landlord
complete drawings and specifications describing such work and the identity of
the proposed contractor at least ten (10) business days prior to the
commencement of any work.
With respect to any alterations, improvements or additions made to the
Premises by Tenant:
(1) Before commencing any work relating to alterations, additions, or
improvements affecting the Premises, Tenant shall notify Landlord of the
expected date of commencement thereof and of the anticipated cost thereof.
Landlord shall then have the right at any time and from time to time to post and
maintain on the Premises such notices as Landlord reasonably deems necessary to
protect the Premises and Landlord from mechanics' liens or any other liens.
(2) Tenant shall pay when due all claims for labor or materials
furnished to Tenant for use in the Premises. Tenant shall not permit any
mechanics' liens or any other liens to be levied against the Premises for any
labor or materials furnished to Tenant in connection with work performed on the
Premises by or at the direction of Tenant. Tenant shall indemnify, hold harmless
and defend Landlord (by counsel reasonably satisfactory to Landlord) from any
liens and encumbrances arising out of any work performed or materials furnished
by, or at the direction of Tenant. In the event that Tenant shall not, within
twenty (20) days following the imposition of any such lien, cause such lien to
be released of record by payment or posting of a proper bond, Landlord shall
have, in addition to all other remedies provided herein by law, the right, but
not the obligation, to cause the same to be released by such means as it shall
deem proper, including payment of the claim giving rise to such lien. All such
sums paid by Landlord and all expenses incurred by it in connection therewith,
including attorneys' fees and costs, shall be payable to Landlord by Tenant on
demand with interest at the rate of ten percent (10%) per annum.
(3) All alterations, improvements or additions in or about the
Premises performed by or on behalf of Tenant shall be done in a first-class,
workmanlike manner, shall not unreasonably lessen the value of leasehold
improvements in the Premises, and shall be completed in compliance with all
applicable laws, ordinances, regulations and orders of any governmental
authority having jurisdiction thereover, as well as the requirements of insurers
of the Premises and the Building.
(4) Upon Landlord's request, Tenant shall remove any contractor,
subcontractor or material supplier from the Premises and the Building if the
work or presence of such person or entity results in labor disputes in or about
the Building or Project or damage to the Premises, Building or Project.
(5) Landlord, at Landlord's sole discretion, may refuse to grant
Tenant permission for alterations, improvements or additions which require,
because of application of Americans with Disabilities Act or other laws,
substantial improvements or alterations to be made to the Common Areas.
(6) Landlord may, up to sixty (60) days prior to the expiration of
the Term, require that Tenant, at Tenant's expense, remove any such alterations,
improvements or additions prior to or upon the expiration of this Lease, and
restore the Premises to their condition prior to such alterations, improvements
or additions.
(7) Unless Landlord requires their removal, as set forth above, all
alterations, improvements, or additions made to the Premises shall become the
property of Landlord and remain upon and be surrendered with the Premises upon
the expiration of this Lease; provided, however, that Tenant's machinery,
equipment, and trade fixtures, other than any which may be affixed to the
Premises so that
they cannot be removed without material damage to the Premises, shall remain the
property of Tenant and may be removed by Tenant subject to the provisions of
Paragraph 8(d) above.
9. Construction of Tenant Improvements.
------------------------------------
Landlord shall be responsible for constructing the tenant improvements
("Tenant Improvements") in the Premises, as provided in the Work Letter
Agreement, attached hereto as Exhibit B.
10. Insurance and Indemnity.
-----------------------
10.1 Insurance.
---------
(a) Tenant shall obtain and maintain during the Term
comprehensive general liability insurance with a combined single limit for
personal injury and property damage in an amount of not less than $2,000,000 (in
a form, with a deductible amount, and with carriers reasonably acceptable to
Landlord) and employer's liability and workers' compensation insurance as
required by law. The insurance carrier shall be authorized to do business in the
State of California, with a policyholders and financial rating of at least A:IX
Class status as rated in the most recent edition of Best's Key-Rating guide.
Tenant's comprehensive general liability insurance policy shall be endorsed to
provide that (i) it may not be canceled or altered in such a manner as to
adversely affect the coverage afforded thereby without thirty (30) days' prior
written notice to Landlord, (ii) Landlord is designated as an additional
insured, (iii) the insurer acknowledges acceptance of the mutual waiver of
claims by Landlord and Tenant pursuant to Paragraph 10.2(b) below, and (iv) such
insurance is primary with respect to Landlord and that any other insurance
maintained by Landlord is excess and noncontributing with such insurance. If, in
the reasonable opinion of Landlord's lender or in the commercially reasonable
opinion of Landlord's insurance adviser, the specified amounts of coverage are
no longer adequate, such coverage shall, within 30 days written notice to
Tenant, be appropriately increased. Prior to the commencement of the Term,
Tenant shall deliver to Landlord a duplicate of such policy or a certificate
thereof to Landlord for retention by it, with endorsements. At least thirty (30)
days prior to the expiration of such policy or any renewal or modification
thereof, Tenant shall deliver to Landlord a replacement or renewal binder
followed by a duplicate policy or certificate within a reasonable time
thereafter. If Tenant fails to obtain such insurance or to furnish Landlord any
such duplicate policy or certificate as herein required, Landlord may, at its
election, without notice to Tenant and without any obligation to do so, procure
and maintain such coverage and Tenant shall reimburse Landlord on demand as
additional rent for any premium so paid by Landlord.
(b) Landlord waives all claims against Tenant, and Tenant's officers,
directors, partners, employees, agents and representatives for loss or damage to
the extent that such loss or damage is insured against under any valid and
collectable insurance policy insuring Landlord or would have been insured
against but for any deductible amount under any such policy. Tenant waives all
claims against Landlord, and Landlord's officers, directors, partners,
employees, affiliates, joint venturers, members, trustees, owners, shareholders,
principals, agents, representatives, successors and assigns, for loss or damage
to the extent such loss or damage is insured against under any valid and
collectable insurance policy insuring Tenant or required to be maintained by
Tenant under this Lease, or would have been insured against but for any
deductible amount under any such policy. The insuring party shall, upon
obtaining the policies of insurance required under this Lease, give notice to
the insurance carrier or carriers that the foregoing mutual waiver of
subrogation is contained in this Lease. Tenant agrees that in the event of a
sale, assignment or transfer of the Premises by Landlord, this waiver of
subrogation shall continue in favor of the original Landlord and any subsequent
Landlord.
(c) Tenant shall at its own cost maintain on all its personal
property, Tenant's improvements, and alterations, in, on, or about the Premises,
a policy of standard fire and extended coverage insurance, with vandalism and
malicious mischief endorsements, to the extent of at least one hundred percent
(100%) of their full replacement value. The proceeds from any such policy shall
be used by Tenant for the replacement of personal property and the restoration
of Tenant's improvements or alterations. Notwithstanding any other provisions of
the Lease, Landlord shall have no liability for damage to or destruction of
Tenant's personal property, regardless of whether the damage or destruction
results from the acts or omissions of Landlord.
(d) During the Term, Landlord shall keep the Building, and
improvements within which the Premises are located, insured against loss or
damage by (i) fire, with extended coverage and vandalism, malicious mischief and
special extended perils (all risk) endorsements or their equivalents, in amounts
not less than one hundred percent (100%) of the replacement cost of the Building
and structures insured, and (ii) flood, in the maximum amount provided for by
FEMA under its flood loss insurance program, with loss payable thereunder to
Landlord and to any authorized encumbrancer of Landlord (with standard mortgagee
loss payable clause) in accordance with their respective interests. Landlord may
maintain rent insurance, for the benefit of Landlord, equal to at least one
year's Base Rent hereunder. If the Lease is terminated as a result of damage by
fire, casualty or earthquake as set forth in this Paragraph 10, all insurance
proceeds shall be paid to and retained by Landlord, subject to the rights of any
authorized encumbrancer of Landlord.
(e) Tenant acknowledges that Landlord does not, at the time of the
signing of this Lease, insure the Building for earthquake damage. Landlord may,
when Landlord deems the premiums to be reasonable, insure the Building fully or
partially for earthquake damage. At such time, the premium for earthquake
insurance will be added to the Operating Expenses for purposes of determining
additional rent.
10.2 Indemnity.
----------
(a) Tenant waives all claims against Landlord for damage to any
property or injury to or death of any person in, on, or about the Premises, the
Building, or any other portion of the Project arising at any time and from any
cause, unless caused by the active negligence or willful misconduct of Landlord,
its agents, employees, or contractors. Tenant shall indemnify, defend (by
counsel reasonably satisfactory to Landlord) and hold harmless Landlord, and
Landlord's officers, directors, partners, employees, affiliates, joint
venturers, members, trustees, owners, shareholders, principals, agents,
representatives, successors and assigns, from and against all claims, costs,
damages, actions, indebtedness and liabilities (except such as may arise from
the active negligence or willful misconduct of Landlord, and Landlord's
officers, directors, partners, employees, affiliates, joint venturers, members,
trustees, owners, shareholders, principals, agents, representatives, successors
and assigns) arising by reason of any death, bodily injury, personal injury,
property damage or any other injury or damage in connection with (i) any
condition or occurrence in or about or resulting from any condition or
occurrence in or about the Premises during the Term, or (ii) any act or omission
of Tenant, or Tenant's agents, representatives, officers, directors,
shareholders, partners, employees, successors and assigns, wherever it occurs.
The foregoing indemnity obligation of Tenant shall include reasonable attorneys'
fees, and all other reasonable costs and expenses incurred by Landlord from the
first notice that any claim or demand is to be made. The provisions of this
Paragraph 10.2 shall survive the termination or expiration of this Lease with
respect to any damage, injury, or death occurring prior to such expiration or
termination.
(b) Neither party shall be liable to the other for any unauthorized
or criminal entry of third parties into the Premises, Building, Project, Common
Areas, or parking facilities, or for any damage to person or property, or loss
of property in and about the
Premises, Building, Project, Common Areas, parking facilities and the
approaches, entrances, streets, sidewalks, stairs, elevators, restrooms, or
corridors thereto, by or from any unauthorized or criminal acts of third
parties, regardless of any breakdown, malfunction or insufficiency of any
security measures, practices or equipment provided by Landlord or Tenant. Tenant
shall immediately notify Landlord in writing of any breakdown or malfunction of
any security measures, practices or equipment provided by Landlord as to which
Tenant has knowledge.
(c) Any diminution or interference with light, air or view by any
structure which may be erected on land adjacent to the Building or resulting
from any other cause shall in no way alter this Lease or impose any liability on
Landlord.
(d) Tenant agrees that in no event shall Landlord be liable for
consequential damages, including injury to Tenant's business or any loss of
income therefrom.
(e) In the event that Landlord or any successor owner of the Building
sells or conveys the Building, then all liabilities and obligations of Landlord
or the successor owner under this Lease accruing after the sale or conveyance
shall terminate and become binding on the new owner, and Tenant shall release
Landlord from all liability under this Lease (including, without limitation, the
Security Deposit, as defined under Paragraph 16 below), except for acts or
omissions of Landlord occurring prior to such sale or conveyance.
(f) Tenant expressly agrees that so long as Landlord is a
corporation, limited liability company, trust, partnership, joint venture,
unincorporated association or other form of business entity, (i) the obligations
of Landlord shall not constitute personal obligations of the officers,
directors, partners, employees, affiliates, joint venturers, members, trustees,
owners, shareholders, or other principals, agents or representatives of such
business entity ("Member of Landlord"), and (ii) Tenant shall have recourse only
to the interest of such business entity in the Building of which the Premises
are a part for the satisfaction of such obligations and not against the assets
of such Member of Landlord other than to the extent of their respective
interests in the Building. In this regard, Tenant agrees that in the event of
any actual or alleged failure, breach or default by Landlord of its obligations
under this Lease, that (i) no Member of Landlord shall be sued or named as a
party in any suit or action (except as may be necessary to secure jurisdiction
of Landlord), (ii) no judgment will be taken against any Member of Landlord, and
any judgment taken against any Member of Landlord may be vacated and set aside
at any time without hearing,(iii) no writ of execution will ever be levied
against the assets of any Member of Landlord, and (iv) these agreements by
Tenant are enforceable both by Landlord and by any Member of Landlord.
11. Damage or Destruction.
---------------------
(a) Subject to the provisions of Paragraphs 11(b) and ll(c) below, if,
during the Term, the Premises are totally or partially destroyed from any
insured casualty, Landlord shall, within ninety (90) days after the destruction,
commence to restore the Premises to substantially the same condition as they
were in immediately before the destruction and prosecute the same diligently to
completion. Such destruction shall not terminate this Lease. Landlord's
obligation shall not include repair or replacement of Tenant's alterations or
Tenant's equipment, furnishings, fixtures and personal property. If the existing
laws do not permit the Premises to be restored to substantially the same
condition as they were in immediately before destruction, and Landlord is unable
to get a variance to such laws to permit the commencement of restoration of the
Premises within the 90-day period, then either party may terminate this Lease by
giving written notice to the other party within thirty (30) days after
expiration of the 90-day period.
(b) Despite the provisions of Paragraph ll(a) above, Landlord may decide
within ninety (90) days after such destruction to demolish the Building rather
than rebuild it, in which case this Lease will terminate as of the date of the
destruction. Landlord shall give Tenant written notice of its intention within
ninety (90) days after the destruction.
(c) If any destruction occurs to the Premises during the last six (6)
months of the initial Term or during the last six (6) months of any extension
period, regardless of the nature and extent of the destruction, either party can
elect to terminate this Lease within thirty (30) days after the destruction
occurs. If this Lease does not terminate pursuant to this Paragraph ll(c), the
provisions of Paragraph ll(a) above shall apply.
(d) If the Premises are damaged from any uninsured casualty to any extent
whatsoever, Landlord may within ninety (90) days following the date of such
damage: (i) commence to restore the Premises to substantially the same condition
as they were in immediately before the destruction and prosecute the same
diligently to completion, in which event this Lease shall continue in full force
and effect; or (ii) within the 90-day period Landlord may elect not to so
restore the Premises, in which event this Lease shall cease and terminate. In
either such event, Landlord shall give Tenant written notice of its intention
within the 90-day period.
(e) In the event of destruction or damage to the Premises which materially
interferes with Tenant's use of the Premises, if this Lease is not terminated as
above provided, there shall be an abatement or reduction of Base Rent between
the date of destruction and the date Landlord substantially completes its
reconstruction obligations, based upon the extent to which the destruction
materially interferes with Tenant's use of the Premises. All other obligations
of Tenant under this Lease shall remain in full force and effect. Except for
abatement of Base Rent, Tenant shall have no claim against Landlord for any loss
suffered by Tenant due to damage or destruction of the Premises or any work of
repair undertaken as herein provided.
(f) The provisions of California Civil Code Sections 1932(2) and 1933(4),
and any successor statutes, are inapplicable with respect to any destruction of
the Premises, such sections providing that a lease terminates upon the
destruction of the Premises unless otherwise agreed between the parties to the
contrary.
12. Eminent Domain.
--------------
(a) If all or any part of the Premises shall be taken as a result of the
exercise of the power of eminent domain, this Lease shall terminate as to the
part so taken as of the date of taking. In the case of a partial taking of
greater than fifty percent (50%) of the rentable area of the Premises, either
Landlord or Tenant shall have the right to terminate this Lease as to the
balance of the Premises by notice to the other within thirty (30) days after the
date of the taking. In the event of a partial taking of the Premises which does
not result in a termination of this Lease, the monthly Base Rent thereafter to
be paid shall be equitably reduced on a square footage basis. If the continued
occupancy of Tenant is materially interfered with for any time during the
partial taking, notwithstanding the partial taking does not terminate this Lease
as to the part not so taken, the Base Rent shall proportionately ▇▇▇▇▇ so long
as Tenant is not able to continuously occupy the part remaining and not so
taken.
(b) All compensation awarded or paid upon a total or partial taking of the
fee title shall belong to Landlord whether such compensation be awarded or paid
as compensation for diminution in value of the leasehold or of the fee except:
Tenant shall retain and have a claim for the following, to the extent
specifically designated by the condemning authority: (i) the unamortized value
over the Term of Tenant's leasehold improvements (to the extent Landlord has not
contributed to the cost thereof); (ii) that portion (if any) of the award made
to Landlord as a result of removing fixtures, removable by
Tenant herein, under the terms of this Lease but which are required to be taken
by the condemnor or are so acquired by the condemnor; and (iii) all relocation
assistance, moving and relocation expenses to the extent (if any) provided by
the condemning authority directly to Tenant.
13. Assignment and Subletting.
--------------------------
(a) Tenant shall not assign, sublet or hypothecate this Lease or any
interest herein or sublet the Premises or any part thereof or permit the use of
the Premises by any party other than Tenant without the prior written consent of
Landlord, which consent shall not be unreasonably withheld. Any of the foregoing
acts without Landlord's consent shall be void and shall, at the option of
Landlord, terminate this Lease. In connection with each consent requested by
Tenant, Tenant shall submit to Landlord the terms of the proposed transaction,
the identity of the parties to the transaction, the proposed documentation for
the transaction, current financial statements of any proposed assignee or
sublessee and all other information reasonably requested by Landlord concerning
the proposed transaction and the parties involved therein.
(b) As used in this Paragraph 13, the term "assign" or "assignment" shall
include, without limitation, any sale, transfer, or other disposition of all or
any portion of Tenant's estate under this Lease, whether voluntary or
involuntary, and whether by operation of law or otherwise, including any of the
following:
(1) if Tenant is a corporation or a limited liability company: (A)
any dissolution, merger, consolidation, or other reorganization of Tenant; or
(B) a sale or other transfer of more than fifty percent (50%) of the value of
the assets of Tenant; or (C) if Tenant is a corporation with fewer than 500
shareholders, a sale or other transfer of a controlling percentage of the
capital stock of Tenant; or (D) if Tenant is a limited liability company, a sale
or other transfer of a controlling percentage of the interest in Tenant. The
phrase "controlling percentage" means the ownership of, and the right to vote,
stocks or interests possessing at least fifty percent (50%) of the total
combined voting power of the limited liability company or, in the case of a
corporation, of all classes of Tenant's stock issues, outstanding and permitted
to vote for the election of directors of the corporation;
(2) if Tenant is a trust, the transfer of more than fifty percent
(50%) of the beneficial interest of Tenant, or the dissolution of the trust;
(3) if Tenant is a partnership or joint venture, the withdrawal, or
the transfer of the interest, of any general partner or joint venturer or the
dissolution of the partnership or joint venture; and
(4) if Tenant is composed of tenants-in-common, the transfer of
interest of any cotenants or the partition or dissolution of the cotenancy.
(c) No sublessee shall have a right further to sublet, and any assignment
by a sublessee of its sublease shall be subject to Landlord's prior written
consent in the same manner as if Tenant were entering into a new sublease.
(d) Regardless of Landlord's consent, no subletting or assignment shall
release Tenant of Tenant's obligation, or alter the primary liability of Tenant
to pay the Rent and to perform all other obligations to be performed by Tenant
hereunder. The acceptance of Rent by Landlord from any other person shall not be
deemed to be a waiver by Landlord of any provisions hereof. Consent to one
assignment or subletting shall not be deemed consent to any subsequent
assignment or subletting. In the event of default by any assignee of Tenant or
any successor of Tenant in the performance of any of the terms hereof, Landlord
may proceed directly against Tenant without the necessity of exhausting remedies
against such assignee or successor.
(e) In the event Tenant shall assign or sublet the Premises or request the
consent of Landlord to any assignment or subletting, then Tenant shall reimburse
Landlord for reasonable costs and attorneys' fees incurred in connection
therewith in an amount not to exceed $1,000.00.
14. Default by Tenant.
-----------------
(a) The following events shall constitute events of default under this
Lease:
(1) a failure by Tenant to pay any Rent or to deliver an estoppel
certificate (as provided in Paragraph 17 below) where such failure continues for
five (5) days after written notice by Landlord to Tenant;
(2) the bankruptcy or insolvency of Tenant, any transfer by Tenant to
defraud creditors, any assignment by Tenant for the benefit of creditors, or the
commencement of any proceedings of any kind by or against Tenant under any
provision of the Federal Bankruptcy Act or under any other insolvency,
bankruptcy or reorganization act unless, in the event any such proceedings are
involuntary, Tenant is discharged from the same within sixty (60) days
thereafter; the appointment of a receiver for a substantial part of the assets
of Tenant; or the levy upon this Lease or any estate of Tenant hereunder by any
attachment or execution;
(3) the abandonment or vacation of the Premises;
(4) the discovery by Landlord that any financial statement given to
Landlord by Tenant, any assignee of Tenant, any subtenant of Tenant, any
successor in interest of Tenant or any guarantor of Tenant's obligation
hereunder, and any of them, was materially false; and
(5) a failure by Tenant to perform any of the terms, covenants,
agreements or conditions of this Lease to be observed or performed by Tenant
(excluding any event of default under Paragraph 14(a)(1) above), where such
failure continues for thirty (30) days after written notice thereof by Landlord
to Tenant; provided, however, that if the nature of the default is such that the
same cannot reasonably be cured within the 30-day period, Tenant shall not be
deemed to be in default if Tenant shall within such period commence such cure
and thereafter diligently prosecute the same to completion.
(b) In the event of any material default or breach by Tenant, Landlord may
at any time thereafter, without limiting Landlord in the exercise of any right
or remedy at law or in equity which Landlord may have by reason of such default
or breach:
(1) Pursue the remedy described in California Civil Code Section
1951.4 whereby Landlord may continue this Lease in full force and effect after
Tenant's breach and abandonment and recover the Rent and any other monetary
charges as they become due, without terminating Tenant's right to sublet or
assign this Lease, subject only to reasonable limitations as herein provided.
During the period Tenant is in default, Landlord shall have the right to do all
acts necessary to preserve and maintain the Premises as Landlord deems
reasonable and necessary, including removal of all persons and property from the
Premises, and Landlord can enter the Premises and relet them, or any part of
them, to third parties for Tenant's account. Tenant shall be liable immediately
to Landlord for all costs Landlord incurs in reletting the Premises, including,
without limitation, brokers' commissions, expenses of remodeling the Premises
required by the reletting, and like costs. Reletting can be for a period shorter
or longer than the remaining Term.
(2) Pay or perform such obligation due (but shall not be obligated to
do so), if Tenant fails to pay or perform any obligations when due under this
Lease within the time permitted for their payment or performance. In such case,
the costs incurred by
Landlord in connection with the performance of any such obligation will be
additional rent due under this Lease and will become due and payable on demand
by Landlord.
(3) Terminate Tenant's rights to possession by any lawful means, in
which case this Lease shall terminate and Tenant shall immediately surrender
possession of the Premises to Landlord. In such event Landlord shall be entitled
to recover from Tenant all damages incurred by Landlord by reason of Tenant's
default, including, without limitation, the following: (A) the worth at the time
of award of any unpaid Rent which had been earned at the time of such
termination; plus (B) the worth at the time of award of the amount by which the
unpaid Rent which would have been earned after termination until the time of
award exceeds the amount of such Rent loss that is proved could have been
reasonably avoided; plus (C) the worth at the time of award of the amount by
which the unpaid Rent for the balance of the Term after the time of award
exceeds the amount of such Rent loss that is proved could be reasonably avoided;
plus (D) any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant's failure to perform its obligations under this
Lease or which in the ordinary course of events would be likely to result
therefrom; plus (E) 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
State law. Upon any such termination of Tenant's possessory interest in and to
the Premises, Tenant (and at Landlord's sole election, Tenant's sublessees)
shall no longer have any interest in the Premises, and Landlord shall have the
right to make any reasonable repairs, alterations or modifications to the
Premises which Landlord in its sole discretion deems reasonable and necessary.
The "worth at the time of award" of the amounts referred to in subparagraphs (A)
and (B) above is computed by allowing interest at the maximum rate an individual
is permitted by law to charge. The worth at the time of award of the amount
referred to in subparagraph (C) above 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%).
(4) Pursue any other legal or equitable remedy available to Landlord.
Unpaid installments of Rent and other unpaid monetary obligations of Tenant
under the terms of this Lease shall bear interest from the date due at the rate
of ten percent (10%) per annum.
(c) In the event Tenant is evicted or Landlord takes possession of the
Premises by reason of any default by Tenant hereunder, Tenant hereby waives any
right of redemption or relief from forfeiture as provided by law.
(d) Even though Tenant has breached this Lease and abandoned the Premises,
this Lease shall continue in effect for so long as Landlord does not terminate
Tenant's right to possession, and Landlord may enforce all its rights and
remedies under this Lease, including the right to recover Rent as it becomes due
under this Lease. Acts of maintenance or preservation, efforts to relet the
Premises, or the appointment of a receiver upon initiative of Landlord to
protect Landlord's interest under this Lease, shall not constitute a termination
of Tenant's right to possession.
(e) In the event Tenant is in material default under any provision of this
Lease then, at Landlord's sole election: (i) Tenant shall not have the right to
exercise any available right, option or election under this Lease ("Tenant's
Exercise Rights") if at such time Tenant is in default hereunder, (ii) Tenant
shall not have the right to consummate any transaction or event triggered by the
exercise of any of Tenant's Exercise Rights if at such time Tenant is in default
hereunder, and (iii) Landlord shall not be obligated to give Tenant any required
notices or information relating to the exercise of any of Tenant's Exercise
Rights hereunder.
15. Default by Landlord, Notice to Mortgagee.
-----------------------------------------
Landlord shall not be in default unless Landlord, or the holder of any
mortgage, deed of trust or ground lease covering the Premises, fails to perform
obligations required of Landlord within a reasonable time, but in no event later
than thirty (30) days after written notice by Tenant to Landlord certified mail,
postage prepaid, and to the holder of any first mortgage, deed of trust or
ground lease covering the Premises whose name and address shall have been
furnished to Tenant in writing, specifying wherein Landlord has failed to
perform such obligations; provided, however, that if the nature of Landlord's
obligation is such that more than thirty (30) days are required for performance
then Landlord shall not be in default if Landlord or the holder of any such
mortgage, deed of trust or ground lease commences performance within such 30-day
period and thereafter diligently prosecutes the same to completion. In no event
shall Tenant be entitled to terminate this Lease by reason of Landlord's
default, and Tenant's remedies shall be limited to an action for monetary
damages at law.
16. Security Deposit.
-----------------
On execution of this Lease, Tenant shall deposit with Landlord the sum
specified in the Basic Lease Information (the "Security Deposit"). The Security
Deposit shall be held by Landlord as security for the performance by Tenant of
all of the provisions of this Lease. If Tenant fails to pay Rent or other
charges due hereunder, or otherwise defaults with respect to any provision of
this Lease, Landlord may use, apply, or retain all or any portion of the
Security Deposit for the payment of any Rent or other charge in default, or the
payment of any other sum to which Landlord may become obligated by reason of
Tenant's default, or to compensate Landlord for any loss or damage which
Landlord may suffer thereby. If Landlord so uses or applies all or any portion
of the Security Deposit, then within ten (10) days after demand therefor Tenant
shall deposit cash with Landlord in an amount sufficient to restore the deposit
to the full amount thereof, and Tenant's failure to do so shall be a material
breach of this Lease. Landlord shall not be required to keep the Security
Deposit separate from its general accounts. If Tenant performs all of Tenant's
obligations hereunder, the Security Deposit, or so much thereof as has not
theretofore been applied by Landlord, shall be returned, without payment of
interest for its use, to Tenant (or, at Landlord's option to the last assignee,
if any, of Tenant's interest hereunder) at the expiration of the Term, and after
Tenant has vacated the Premises. No trust relationship is created herein between
Landlord and Tenant with respect to the Security Deposit.
17. Estoppel Certificate.
---------------------
(a) Tenant shall within ten (10) days of notice from Landlord execute,
acknowledge and deliver to Landlord a statement certifying (i) that this Lease
is unmodified and in full force and effect (or, if modified, stating the nature
of such modification and certifying that this Lease, as so modified, is in full
force and effect), (ii) the amount of the Security Deposit, (iii) the date to
which the Rent has been paid, (iv) acknowledging that there are not, to Tenant's
knowledge, any uncured defaults on the part of Landlord hereunder, or specifying
such defaults, if any are claimed, and (v) such other matters as may reasonably
be requested by Landlord. Any such statement may be conclusively relied upon by
any prospective purchaser or encumbrancer of the Building.
(b) Tenant's failure to deliver such statement within such time shall be
conclusive upon Tenant, (i) that this Lease is in full force and effect, without
modification except as may be represented by Landlord, (ii) that there are no
uncured defaults in Landlord's performance, and (iii) that not more than one
month's Base Rent has been paid in advance.
(c) If Landlord desires to finance or refinance the Building, Tenant
agrees to deliver to any lender designated by Landlord such financial statements
of Tenant as may be reasonably required by such
lender. All such financial statements shall be received by Landlord in
confidence and shall be used for the purposes herein set forth.
18. Subordination.
-------------
This Lease, at Landlord's sole option, shall be subordinate to any ground
lease, mortgage, deed of trust, or any other hypothecation for security now or
hereafter placed upon the Building and to any and all advances made on the
security thereof and to all renewals, modifications, consolidations,
replacements, refinancings and extensions thereof. Notwithstanding such
subordination, Tenant's right to quiet possession of the Premises shall not be
disturbed if Tenant is not in default and so long as Tenant shall pay the Rent
and observe and perform all of the provisions of this Lease, unless this Lease
is otherwise terminated pursuant to its terms. If any mortgagee, trustee, or
ground lessor shall elect to have this Lease prior to the lien of its mortgage,
deed of trust or ground lease, and shall give notice thereof to Tenant, this
Lease shall be deemed prior to such mortgage, deed of trust, or ground lease,
whether this Lease is dated prior to or subsequent to the date of said mortgage,
deed of trust or ground lease or the date of recording thereof. If any mortgage
or deed of trust to which this Lease is subordinate is foreclosed or a deed in
lieu of foreclosure is given to the mortgagee or beneficiary, Tenant shall
attorn to the purchaser at the foreclosure sale or to the grantee under the deed
in lieu of foreclosure; if any ground lease to which this Lease is subordinate
is terminated, Tenant shall attorn to the ground lessor. Tenant agrees to
execute any documents required to effectuate such subordination or to make this
Lease prior to the lien of any mortgage, deed of trust or ground lease, as the
case may be, or to evidence such attornment. Any such document of attornment
shall also provide that the successor shall not disturb Tenant in its use of the
Premises in accordance with this Lease.
19. Attorneys' Fees.
---------------
In the event legal action is initiated by either party, the prevailing
party shall be entitled to recover all costs and expenses incurred in such
action, including, without limitation, reasonable attorneys' fees and costs,
including attorneys' fees incurred at trial and on appeal, if any.
20. Notices.
-------
All notices, consents, demands, and other communications from one party to
the other given pursuant to the terms of this Lease shall be in writing and
shall be deemed to have been fully given when personally delivered, delivered by
courier service, sent via facsimile (confirmation receipt required), or forty-
eight (48) hours after the same is deposited in the United States mail,
certified or registered, postage prepaid, and addressed as follows: To Tenant at
the address specified in the Basic Lease Information or to such other place as
Tenant may from time to time designate in a notice to Landlord; to Landlord at
the address specified in the Basic Lease Information, or to such other place and
to such other parties as Landlord may from time to time designate in a notice to
Tenant.
21. General Provisions.
-------------------
(a) This Lease shall be governed by and construed in accordance with the
internal laws of the State of California, notwithstanding any choice of law
statutes, regulations, provisions or requirements to the contrary.
(b) The invalidity of any provision of this Lease, as determined by a
court of competent jurisdiction, shall in no way affect the validity of any
other provision hereof.
(c) This Lease including attached Exhibits, Addenda, and Basic Lease
Information contains all agreements and understandings of the parties and
supersedes and cancels any and all prior or contemporaneous written or oral
agreements, instruments, understandings, and communications of the parties with
respect to the
subject matter herein. This Lease, including the attached Exhibits, Addenda, and
Basic Lease Information, may be modified only in a writing signed by each of the
parties.
(d) No waiver of any provision hereof by either party shall be deemed by
the other party to be a waiver of any other provision, or of any subsequent
breach of the same provision. Landlord's or Tenant's consent to, or approval of,
any act shall not be deemed to render unnecessary the obtaining of Landlord's or
Tenant's consent to, or approval of, any subsequent act by the other party.
(e) If Tenant remains in possession, with the expressed consent of
Landlord, of all or any part of the Premises after the expiration of the Term,
such tenancy shall be from month to month only, and not a renewal hereof or an
extension for any further term, and in such case, Rent shall be payable in the
amount of the last month's Base Rent and all other charges under the Lease and
such month-to-month tenancy shall be subject to every other term, covenant and
agreement contained herein.
(f) Subject to the provisions of this Lease restricting assignment or
subletting by Tenant, this Lease shall bind the parties, their personal
representatives, successors, and assigns.
(g) Upon reasonable prior notice to Tenant (which notice shall not be
required in the event of an emergency), Landlord and Landlord's representatives
and agents shall have the right to enter the Premises during regular business
hours for the purpose of inspecting the same, showing the same to prospective
purchasers or lenders, and making such alterations, repairs, improvements, or
additions to the Premises, the Building or the Common Areas as Landlord may deem
necessary or desirable. Landlord may at any time during the last one hundred
twenty (120) days of the Term place on or about the Premises any ordinary #For
Lease" sign. Landlord may at any time place on or about the Premises any
ordinary "For Sale" sign.
(h) The voluntary or other surrender of this Lease by Tenant, the mutual
cancellation thereof or the termination of this Lease by Landlord as a result of
Tenant's default shall, at the option of Landlord, terminate all or any existing
subtenancies or may, at the option of Landlord, operate as an assignment to
Landlord of any or all of such subtenancies.
(i) If Tenant is a corporation, limited liability company or partnership,
each individual executing this Lease on behalf of Tenant represents and warrants
that he is duly authorized to execute and deliver this Lease on behalf of the
corporation, company or partnership in accordance with, where applicable, a duly
adopted resolution of the board of directors of the corporation, the vote of the
members of the limited liability company or the vote of the partners within the
partnership, and that this Lease is binding upon the corporation, company or
partnership in accordance with its respective articles of incorporation and
bylaws, operating agreement or partnership agreement.
(j) Time is expressly declared to be of the essence of this Lease and of
each and every covenant, term, condition, and provision hereof, except as to the
conditions relating to the delivery of possession of the Premises to Tenant.
(k) If there is more than one party comprising Tenant, the obligations
imposed on Tenant shall be joint and several.
(l) The language in all parts of this Lease shall be in all cases construed
as a whole according to its fair meaning and not strictly for nor against either
Landlord or Tenant.
(m) As used in this Lease and whenever required by the context thereof,
each number, both singular and plural, shall include all numbers and in each
gender shall include all genders. Landlord and Tenant, as used in this Lease or
in any other instrument referred to in or made a part of this Lease, shall
likewise include both the singular and the plural, a corporation, limited
liability company,
partnership, individual or person acting in any fiduciary capacity as executor,
administrator, trustee or in any other representative capacity.
(n) The Exhibits and Addendum, if any, specified in the Basic Lease
Information are attached to this Lease and by this reference made a part hereof.
22. Force Majeure.
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Any delay in construction, repairs, or rebuilding any building,
improvement or other structure herein shall be excused and the time limit
extended to the extent that the delay is occasioned by reason of acts of God,
labor troubles, laws or regulations of general applicability, acts of Tenant or
Tenant Delays (as the term is defined in the Work Letter Agreement attached
hereto as Exhibit B), or other occurrences beyond the reasonable control of
Landlord. Accordingly, Landlord's obligation to perform shall be excused for the
period of the delay and the period for performance shall be extended for a
period equal to the period of such delay.
23. Broker's Fee.
------------
Each party represents that it has not had dealings with any real estate
broker, finder, or other person, with respect to this Lease in any manner,
except the brokerage firm(s) specified in the Basic Lease Information. Each
party shall hold harmless the other party from all damages resulting from any
claim that may be asserted against the other party by any broker, finder, or
other person with whom the other party has or purportedly has dealt. Landlord
shall pay any commissions or fees that are payable to the broker or finder
specified in the Basic Lease Information, with respect to this Lease in
accordance with the provisions of a separate commission contract.
24. Financial Statement.
-------------------
It is acknowledged by all parties hereto that the attached financial
declaration of Tenant is incorporated as a part of this Lease as Exhibit E, that
the information contained therein is true and correct in all material respects,
and that the accuracy of the information is a significant fact upon which
Landlord has relied in the granting of this Lease.
IN WITNESS WHEREOF, the parties have executed this Lease on the date first
mentioned above.
TENANT: LANDLORD:
Advanced Fibre Communications G & W/Redwood Associates Joint Venture,
a California general partnership
--------------------------------- By: G & W/▇▇▇▇▇▇▇▇ Associates: 1985, a
a California general partnership
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------- ----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Managing General Partner
/s/ Advanced Fibre Communications
By:---------------------------------
VP, CFO
Its:-----------------------------
AMENDMENT NO. 2
TO
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ NET LEASE
THIS AMENDMENT NO. 2 TO ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ North Net Lease ("Amendment No.
2") is entered into as of August 4 , 1997, by and between G & W/▇▇▇▇▇▇
--------
Redwood Business Park, L.P., a California limited partnership, and successor to
G & W/Redwood Associates Joint Venture, a California general partnership
("Landlord"), and Advanced Fibre Communications, a Delaware corporation
("Tenant"). Terms which are capitalized in this Amendment No. 2 but not defined
herein shall have the meanings stated in the Lease.
This Amendment No. 2 is entered into on the basis of the following facts,
intentions and understandings of the parties:
A. Landlord and Tenant entered into that certain ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Net Lease and Addendum No. 1 on July 10, 1995, and further amended by
Amendment # 1 to Redwood Business Park Net Lease Agreement dated January 4,
1996 collectively ("1440 Lease").
B. Landlord and Tenant have also entered into that certain ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Net Lease and Addendum No. 1 ("1435 Lease") as of the
execution date of this Amendment No. 2.
C. As partial consideration for Landlord leasing to Tenant the space subject
to the terms of the 1435 Lease, Tenant is willing to extend the current
term of the 1440 Lease an additional three (3) years.
NOW, THEREFORE, in consideration of the mutual covenants and promises of the
parties, the parties agree as follows:
1. TERM.
The term of the I440 Lease shall be extended three (3) years from its
current termination date making the new termination date March 31, 2008.
The commencement date of the 1440 Lease shall remain unchanged.
2. REMAINDER UNCHANGED.
This Amendment shall supersede and cancel all prior and contemporaneous
written and oral agreements, correspondence and communications between the
parties regarding the subject matter hereof. Except as provided in this
Amendment No. 2, the 1440 Lease shall remain in full force and effect and
unamended.
IN WITNESS WHEREOF, this Amendment No. 2 is executed by the parties on the date
first written and shall be deemed effective as of the execution date of the 1435
Lease.
TENANT: LANDLORD:
Advanced Fibre Communications, Inc., G & W/▇▇▇▇▇▇ Redwood Business Park, L.P.
a Delaware corporation a limited partnership
By: G & W Management Co.
Its: Manager
By:/S/ ▇▇▇▇▇ ▇ ▇▇▇▇▇▇
------------------------
▇▇▇▇▇ ▇ ▇▇▇▇▇▇
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
G & W Management Co.
Its:
-----------------------
Vice President, CFO
[FLOOR PLAN APPEARS HERE]
(EXHIBIT A)
[PLAN APPEARS HERE]
(EXHIBIT B)