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EXHIBIT 10.38
LEASE AGREEMENT
BY AND BETWEEN
HARBOR INVESTMENT PARTNERS,
A CALIFORNIA GENERAL PARTNERSHIP
AS LANDLORD
AND
COMBICHEM, INC.,
a California corporation
AS TENANT
DATED OCTOBER 6, 1997
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TABLE OF CONTENTS
Page
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Basic Lease Information..............................................................iv
1. Demise.............................................................................1
2. Premises...........................................................................1
3. Term...............................................................................2
4. Rent...............................................................................2
5. Utilities And Services.............................................................9
6. Late Charge.......................................................................10
7. Letter of Credit..................................................................11
8. Possession........................................................................13
9. Use Of Premises...................................................................13
10. Acceptance Of Premises...........................................................15
11. Surrender........................................................................16
12. Alterations And Additions........................................................17
13. Maintenance and Repairs Of Premises..............................................19
14. Landlord's Insurance.............................................................20
15. Tenant's Insurance...............................................................20
16. Indemnification..................................................................22
17. Subrogation......................................................................23
18. Signs............................................................................23
19. Free From Liens..................................................................23
20. Entry By Landlord................................................................24
21. Destruction And Damage...........................................................24
22. Condemnation.....................................................................27
23. Assignment And Subletting........................................................28
24. Tenant's Default.................................................................31
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Page
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25. Landlord's Remedies..............................................................33
26. Landlord's Right to Perform Tenant's Obligations.................................36
27. Attorney's Fees..................................................................37
28. Taxes............................................................................37
29. Effect Of Conveyance.............................................................37
30. Tenant's Estoppel Certificate....................................................38
31. Subordination....................................................................38
32. Environmental Covenants..........................................................39
33. Notices..........................................................................42
34. Waiver...........................................................................43
35. Holding Over.....................................................................43
36. Successors And Assigns...........................................................44
37. Time.............................................................................44
38. Brokers..........................................................................44
39. Limitation Of Liability..........................................................44
40. Financial Statements.............................................................44
41. Rules And Regulations............................................................45
42. Mortgagee Protection.............................................................45
43. Entire Agreement.................................................................46
44. Substituted Premises.............................................................46
45. Interest.........................................................................46
46. Construction.....................................................................46
47. Representations And Warranties Of Tenant.........................................47
48. Security.........................................................................47
49. Jury Trial Waiver................................................................48
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Exhibit
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A Diagram of the Premises
B Commencement and Expiration Date
Memorandum
C Rules and Regulations
D Hazardous Materials Disclosure Certificate
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LEASE AGREEMENT
BASIC LEASE INFORMATION
Lease Date: October 6, 1997
Landlord: HARBOR INVESTMENT PARTNERS,
a California general partnership
Landlord's Address: c/o Allegis Realty Investors LLC
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
All notices sent to Landlord under this Lease
shall be sent to the above address, with copies
to:
Insignia Commercial Group, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Tenant: CombiChem, Inc.,
a California corporation
Tenant's Contact Person: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Chief Financial Officer/
Vice President, Finance and Administration
Tenant's Address and ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇
Telephone Number: ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
Premises Square Footage: Approximately Five Thousand Nine Hundred Eighty-Five (5,985)
rentable square feet
Premises Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Project: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ and ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, consisting of approximately two
hundred fifty-nine thousand, two hundred
thirty-seven (259,237) rentable square feet,
together with the land on which the Project is
situated and all Common Areas
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Building (if not the same ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, consisting
as the Project): of approximately forty thousand (40,000)
rentable square feet
Tenant's Proportionate 2.31%
Share of Project:
Tenant's Proportionate 14.96%
Share of Building:
Length of Term: Sixty (60) months
Estimated Commencement Date: November 1, 1997
Estimated Expiration Date: October 31, 2002
Monthly Base Rent:
Monthly Base Monthly Base
Months Sq. Ft. Rate Rent
------ ------- ---- ----
1-12 5,985 x $ 3.65 = $ 21,845.25
13-60 Monthly Base Rent to be increased
in accordance with the Consumer
Price Index Price (see Paragraph
4(a) of the Lease)
Prepaid Rent: Twenty-One Thousand Eight Hundred Forty-Five and 25/100 Dollars
($21,845.25)
Month to which Prepaid Base First (1st) full month of the Term
Rent will be Applied:
Base Year: 1997
Letter of Credit: Two Hundred Sixty-Two Thousand One Hundred Forty-Three Dollars
($262,143)
Permitted Use: General office, research and development of computer software
and software engineering and design
Unreserved Parking Spaces: Nineteen (19) nonexclusive and undesignated parking spaces
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Broker(s): Cornish & ▇▇▇▇▇ Commercial and BT Commercial (Landlord's Broker)
CPS (Tenant's Broker)
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LEASE AGREEMENT
THIS LEASE AGREEMENT is made and entered into by and between Landlord and
Tenant on the Lease Date. The defined terms used in this Lease which are defined
in the Basic Lease Information attached to this Lease Agreement ("BASIC LEASE
INFORMATION") shall have the meaning and definition given them in the Basic
Lease Information. The Basic Lease Information, the exhibits, the addendum or
addenda described in the Basic Lease Information, and this Lease Agreement are
and shall be construed as a single instrument and are referred to herein as the
"LEASE".
1. DEMISE
In consideration for the rents and all other charges and payments payable
by Tenant, and for the agreements, terms and conditions to be performed by
Tenant in this Lease, LANDLORD DOES HEREBY LEASE TO TENANT, AND TENANT DOES
HEREBY HIRE AND TAKE FROM LANDLORD, the Premises described below (the
"PREMISES"), upon the agreements, terms and conditions of this Lease for the
Term hereinafter stated.
2. PREMISES
The Premises demised by this Lease is located in that certain building (the
"BUILDING") specified in the Basic Lease Information, which Building is located
in that certain real estate development (the "PROJECT") specified in the Basic
Lease Information. The Premises and the Project have the address and contain the
square footage specified in the Basic Lease Information. The location and
dimensions of the Premises are depicted on EXHIBIT A, which is attached hereto
and incorporated herein by this reference. Tenant shall have the non-exclusive
right (in common with the other tenants, Landlord and any other person granted
use by Landlord) to use the Common Areas (as hereinafter defined), except that,
with respect to parking, Tenant shall have only an irrevocable license (subject
to the terms and conditions of this Lease) for the entire Term to use the number
of non-exclusive and undesignated parking spaces set forth in the Basic Lease
Information in the Project's parking areas (the "PARKING AREAS") at no
additional cost to Tenant; provided, however, that Landlord shall not be
required to enforce Tenant's right to use such parking spaces; and, provided
further, that the number of parking spaces allocated to Tenant hereunder shall
be reduced on a proportionate basis in the event any of the parking spaces in
the Parking Areas are taken or otherwise eliminated as a result of any
Condemnation (as hereinafter defined) or casualty event affecting such Parking
Areas. No easement for light or air is incorporated in the Premises. For
purposes of this Lease, the term "COMMON AREAS" shall mean all areas and
facilities outside the Premises and within the exterior boundary line of the
Project that are provided and designated by Landlord for the non-exclusive use
of
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Landlord, Tenant and other tenants of the Project and their respective
employees, guests and invitees.
Landlord has the right, in its sole discretion, from time to time, to: (a)
make changes to the Common Areas, including, without limitation, changes in the
location, size, shape and number of driveways, entrances, parking spaces,
parking areas, ingress, egress, direction of driveways, entrances, corridors and
walkways; (b) close temporarily any of the Common Areas for maintenance purposes
so long as reasonable access to the Premises remains available; (c) add
additional buildings and improvements to the Common Areas or remove existing
buildings or improvements therefrom; (d) use the Common Areas while engaged in
making additional improvements, repairs or alterations to the Project or any
portion thereof; and (e) do and perform any other acts or make any other changes
in, to or with respect to the Common Areas and the Project as Landlord may, in
its sole discretion, deem to be appropriate; provided, however, that none of the
foregoing actions by Landlord shall materially and substantially interfere with
Tenant's business in the Premises, except to the extent that such actions are
undertaken by Landlord in emergency situations or in connection with the
performance of Landlord's obligations under this Lease.
3. TERM
The term of this Lease (the "TERM") shall be for the period of months
specified in the Basic Lease Information, commencing on the date Landlord
delivers possession of the Premises to Tenant (the "COMMENCEMENT DATE"), but not
earlier than the Estimated Commencement Date specified in the Basic Lease
Information. In the event the actual Commencement Date is a date other than the
Estimated Commencement Date specified in the Basic Lease Information, then
Landlord and Tenant shall promptly execute a Commencement and Expiration Date
Memorandum in the form attached hereto as EXHIBIT B, wherein the parties shall
specify the Commencement Date and the date on which the Term expires (the
"EXPIRATION DATE").
4. RENT
(a) BASE RENT. Tenant shall pay to Landlord, in advance on the first day of
each month, without further notice or demand and without offset or deduction,
the monthly installments of rent specified in the Basic Lease Information (the
"BASE RENT"). If the Term begins on a day other than the first day of a month,
the Tenant shall pay, in advance, the prorated Base Rent for such partial month
and the Prepaid Base Rent shall be applied to the Base Rent payable on the first
day of the following month. If the Term ends on a day other than the last day of
a month, Base Rent shall be prorated based upon the actual number of days in
such month.
The Base Rent under this Paragraph 4(a) shall be adjusted, as stated below,
on November 1 of each year during the Term commencing on November 1,
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1998 to reflect percentage increases in the cost of living. The Consumer Price
Index (U.S. Department of Labor Consumer Price Index (all items) for Urban Wage
Earners and Clerical Workers, San Francisco Bay Area (1982-1984=100),
hereinafter referred to as the "INDEX") published for the month immediately
preceding each such adjustment date (each, an "ADJUSTMENT INDEX") and the Index
published for the month immediately preceding the Commencement Date of this
Lease ("BASE INDEX") shall be compared and the percentage difference between the
Adjustment Index and the Base Index shall be determined. The initial Base Rent
specified in the Basic Lease Information shall be increased by adding to said
initial Base Rent the percentage amount of said initial Base Rent equal to the
percentage difference between the Base Index and the applicable Adjustment
Index; provided, however, in no event shall the initial Base Rent hereunder be
increased by less than five percent (5%) or more than eight percent (8%) for any
one year. When the adjusted Base Rent is determined after each adjustment date,
Landlord shall give Tenant written notice indicating the amount thereof and the
method of computation. If the Consumer Price Index is changed or discontinued,
Landlord shall substitute an official index published by the Bureau of Labor
Statistics or its successor or similar governmental agency as may then be in
existence and shall be most nearly equivalent thereto.
Upon execution of this Lease, Tenant shall pay to Landlord the Prepaid Base
Rent specified in the Basic Lease Information to be applied toward Base Rent for
the month of the Term specified in the Basic Lease Information.
(b) ADDITIONAL RENT. During the term, in addition to the Base Rent, Tenant
shall pay to Landlord as additional rent (the "ADDITIONAL RENT"), in accordance
with this Paragraph 4, Tenant's Proportionate Share(s) of the total dollar
increase, if any, in Expenses (as defined below) each calendar year over
Expenses in the Base Year (as specified in the Basic Lease Information).
Following the Base Year, any Expenses attributable to a period which falls
outside the Term shall be prorated between Tenant and Landlord so that Tenant
shall pay only that portion thereof which is attributable to the period within
the Term. As used in this Lease, "EXPENSES" means all costs and expenses paid or
incurred by Landlord in connection with the ownership, operation, maintenance,
management and repair of the Premises, the Building and/or the Project or any
part thereof, including, without limitation, all the following items:
(1) Taxes and Assessments. All real estate taxes and assessments,
which shall include any form of tax, assessment, fee, license fee, business
license fee, levy, penalty (if a result of Tenant's delinquency), or tax (other
than net income, estate, succession, inheritance, transfer or franchise taxes),
imposed by any authority having the direct or indirect power to tax, or by any
city, county, state or federal government or any improvement or other district
or division thereof, whether such tax is (i) determined by the area of the
Premises, the Building and/or the Project or any part thereof, or the Rent and
other sums payable hereunder by Tenant or by other tenants, including, but not
limited to, any gross income or
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excise tax levied by any of the foregoing authorities with respect to receipt of
Rent and/or other sums due under this Lease; (ii) upon any legal or equitable
interest of Landlord in the Premises, the Building and/or the Project or any
part thereof; (iii) upon this transaction or any document to which Tenant is a
party creating or transferring any interest in the Premises, the Building and/or
the Project; (iv) levied or assessed in lieu of, in substitution for, or in
addition to, existing or additional taxes against the Premises, the Building
and/or the Project, whether or not now customary or within the contemplation of
the parties; or (v) surcharged against the parking area. Tenant and Landlord
acknowledge that Proposition 13 was adopted by the voters of the State of
California in the June, 1978 election and that assessments, taxes, fees, levies
and charges may be imposed by governmental agencies for such purposes as fire
protection, street, sidewalk, road, utility construction and maintenance, refuse
removal and for other governmental services which may formerly have been
provided without charge to property owners or occupants. It is the intention of
the parties that all new and increased assessments, taxes, fees, levies and
charges due to any cause whatsoever are to be included within the definition of
real property taxes for purposes of this Lease. "TAXES AND ASSESSMENTS" shall
also include legal and consultants' fees, costs and disbursements incurred in
connection with proceedings to contest, determine or reduce taxes, Landlord
specifically reserving the right, but not the obligation, to contest by
appropriate legal proceedings the amount or validity of any taxes.
Notwithstanding the foregoing, "TAXES AND ASSESSMENTS" shall not include (i) any
special assessment levied by any governmental authority to pay the costs of the
removal of any Hazardous Materials disposed of by Landlord on the Property, (ii)
any item to the extent otherwise included within another category of "Expenses,"
(iii) costs of building permits or development fees (including fees for transit,
housing, schools, open space, child care, arts programs, traffic mitigation
measures, environmental impact reports, traffic studies and transportation
system management plans) payable to public authorities in connection with any
tenant improvement work performed by Landlord for another tenant of the Project,
(iv) reserves for taxes and assessments payable in future real property tax
fiscal years, and (v) any documentary transfer taxes arising out of a voluntary
transfer or sale by Landlord of all or a portion of the Project. In the case of
any assessment which may be evidenced by improvement or other bonds and which
may be paid in annual or other periodic installments, Landlord shall elect to
cause such assessment to be paid in installments over the maximum period
permitted by law. If a reduction in Taxes and Assessments is obtained for any
year of the Term during which Tenant paid Tenant's Proportionate Share of such
Taxes and Assessments, then Expenses for such year shall be retroactively
adjusted and Landlord shall provide Tenant with a credit against Tenant's next
due obligations for Additional Rent or, if none, refund such amount to Tenant
within thirty (30) days based on such adjustment, provided that if Tenant has
vacated the Premises, Landlord shall provide such refund only if Tenant has
furnished Landlord with a current forwarding address.
(2) Insurance. All insurance premiums for the Building and/or the
Project or any part thereof, including premiums for "all risk" fire and extended
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coverage insurance, commercial general liability insurance, rent loss or
abatement insurance, earthquake insurance, flood or surface water coverage, and
other insurance as Landlord deems necessary in its sole discretion, and any
deductibles paid under policies of any such insurance.
(3) Utilities. The cost of all electricity, water, gas, sewers, oil
and other utilities (collectively, "UTILITIES"), including any surcharges
imposed, serving the Premises, the Building and the Project that are not
separately metered to Tenant or any other tenant, any assessments or charges for
Utilities or similar purposes included within any tax ▇▇▇▇ for the Building or
the Project, including without limitation, entitlement fees, allocation unit
fees, and/or any similar fees or charges and any penalties (if a result of
Tenant's delinquency) related thereto, and any amounts, taxes, charges,
surcharges, assessments or impositions levied, assessed or imposed upon the
Premises, the Building or the Project or any part thereof, or upon Tenant's use
and occupancy thereof, as a result of any rationing of Utility services or
restriction on Utility use affecting the Premises, the Building and/or the
Project, as contemplated in Paragraph 5 below (collectively, "UTILITY
EXPENSES").
(4) Common Area Expenses. All costs to operate, maintain, repair,
replace, supervise, insure and administer the Common Areas, including supplies,
materials, labor and equipment used in or related to the operation and
maintenance of the Common Areas, including parking areas (including, without
limitation, all costs of resurfacing and restriping parking areas), signs and
directories on the Building and/or the Project, landscaping (including
maintenance contracts and fees payable to landscaping consultants), amenities,
sprinkler systems, sidewalks, walkways, driveways, curbs, lighting systems and
security services, if any, provided by Landlord for the Common Areas, and any
charges, assessments, costs or fees levied by any association or entity of which
the Project or any part thereof is a member or to which the Project or any part
thereof is subject.
(5) Parking Charges. Any parking charges or other costs levied,
assessed or imposed by, or at the direction of, or resulting from statutes or
regulations, or interpretations thereof, promulgated by any governmental
authority or insurer in connection with the use or occupancy of the Building or
the Project.
(6) Maintenance and Repair Costs. Except for costs which are the
responsibility of Landlord pursuant to Paragraph 13(b) below, all costs to
maintain, repair, and replace the Premises, the Building and/or the Project or
any part thereof, including without limitation, (i) all costs paid under
maintenance and service agreements such as contracts for janitorial, security
and refuse removal, (ii) all costs to maintain, repair and replace the roof
coverings of the Building or the Project or any part thereof, (iii) all costs to
maintain, repair and replace the heating, ventilating, air conditioning,
plumbing, sewer, drainage, electrical, fire protection, life safety and security
systems and other mechanical and electrical systems and equipment serving the
Premises, the Building and/or the Project or any
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part thereof (collectively, the "SYSTEMS"), (iv) the cost of all cleaning
and janitorial services and supplies, and (v) the cost of window glass
replacement and repair.
(7) Life Safety Costs. All costs to install, maintain, repair and
replace all life safety systems, including, without limitation, all fire alarm
systems, serving the Premises, the Building and/or the Project or any part
thereof (including all maintenance contracts and fees payable to life safety
consultants) whether such systems are or shall be required by Landlord's
insurance carriers, Laws (as hereinafter defined) or otherwise.
(8) Management and Administration. All costs for management and
administration of the Premises, the Building and/or the Project or any part
thereof, including, without limitation, a property management fee, accounting,
auditing, billing, postage, salaries and benefits for clerical and supervisory
employees, whether located on the Project or off-site, payroll taxes and legal
and accounting costs and fees for licenses and permits related to the ownership
and operation of the Project.
Notwithstanding anything in this Paragraph 4(b) to the contrary, with
respect to all sums payable as Additional Rent under this Paragraph 4(b) for the
repair or replacement of any item or the construction, installation or
acquisition of any new item in connection with the physical operation of the
Premises, the Building or the Project (i.e., HVAC, roof membrane or coverings
and parking area) which is a capital item the repair or replacement of which
properly would be capitalized under generally accepted accounting principles,
Tenant shall be required to pay only its Percentage Share of the prorata share
of the cost of the item falling due within the Term (including any Renewal Term)
based upon the amortization of the same over the useful life of such item, as
reasonably determined by Landlord.
(c) EXCLUSIONS FROM ADDITIONAL RENT. Notwithstanding anything to the
contrary contained in Paragraph 4(b) above, the following items shall be
specifically excluded from the definition of "Expenses":
(1) Principal and interest payments and loan fees on mortgages or
deeds of trust encumbering the Building, and all rental and other sums payable
under any ground lease affecting the Building, unless such costs are
attributable to the activities of Tenant or Tenant's Agents on the Project, or
as a result of Tenant's breach or default under this Lease;
(2) Salaries of executive officers of Landlord above the level of
asset manager or its equivalent;
(3) Reserves for Expenses payable or projected to be incurred by
Landlord in future years, except as provided in Paragraph 4(b)(1) above with
respect to Taxes and Assessments;
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(4) Deductions for depreciation and other non-cash expenditures;
(5) Leasing commissions and attorneys' fees in connection with the
preparation and negotiation of letters of intent, leases, subleases and/or
assignments with other tenants of the Building;
(6) The cost (including permit, license and inspection costs) of
performing tenant improvements and alterations for other tenants of the
Building, and the cost of services that Landlord provides selectively to one or
more tenants of the Building, the cost of which services is separately charged
to and reimbursed by such tenant or tenants;
(7) Excess costs, fines or penalties incurred because Landlord
intentionally and willfully violated any governmental rule or authority; for
purposes of this clause (7), "EXCESS COSTS" shall mean the excess costs
resulting from such violation and shall exclude the ordinary costs which would
have been incurred in complying with such governmental rule or authority absent
such violation;
(8) Excess costs, fines or penalties incurred because Landlord
intentionally and willfully violated any terms or conditions of this Lease or
any other lease relating to the Project; for purposes of this clause (8),
"EXCESS COSTS" shall mean the excess costs resulting from such violation and
shall exclude the ordinary costs which would have been incurred in complying
with such terms and conditions absent such violation; and
(9) the cost of repairing and maintaining the structural portions of
the roof (specifically excluding the roof coverings), the foundation, the
footings, the floor slab, and the load bearing walls and exterior walls of the
Building (excluding any glass and any routine maintenance, including, without
limitation, any painting, sealing, patching and waterproofing of such walls).
Notwithstanding the specific itemization elsewhere in this Lease as to
certain components of Expenses, Landlord shall not be entitled to recover from
all tenants of the Project more than one hundred percent (100%) of Expenses.
(d) PAYMENT OF ADDITIONAL RENT.
(1) During the last month of the Base Year and each calendar year
thereafter, or as soon thereafter as practicable, Landlord shall submit to
Tenant an estimate of monthly Additional Rent for the following calendar year,
and Tenant shall pay such estimated Additional Rent on a monthly basis, in
advance, on the first day of each month. Tenant shall continue to make said
monthly payments until notified by Landlord of a change therein. By April 1 of
each calendar year, Landlord shall endeavor to provide to Tenant a statement
("EXPENSE STATEMENT") showing the actual Additional Rent due to Landlord for the
prior calendar year. If the total of the monthly payments of Additional Rent
that Tenant has made for the
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prior calendar year is less than the actual Additional Rent chargeable to Tenant
for such prior calendar year, then Tenant shall pay the difference in a lump sum
within fifteen (15) days after receipt of such Expense Statement from Landlord.
Any overpayment by Tenant of Additional Rent for the prior calendar year shall
be credited towards the Additional Rent next due.
(2) Landlord's then-current annual operating and capital budgets for
the Building and the Project or the pertinent part thereof shall be used for
purposes of calculating Tenant's monthly payment of estimated Additional Rent
for the current year, subject to adjustment as provided above. Landlord shall
make the final determination of Additional Rent for the portion of the year in
which this Lease terminates as soon as possible after termination of such year.
Even though the Term has expired and Tenant has vacated the Premises, Tenant
shall remain liable for payment of any amount due to Landlord in excess of the
estimated Additional Rent previously paid by Tenant, and, conversely, Landlord
shall promptly return to Tenant any overpayment. Failure of Landlord to submit
Expense Statements as called for herein shall not be deemed a waiver of Tenant's
obligation to pay Additional Rent as herein provided.
(3) With respect to Expenses which Landlord allocates to the Building,
Tenant's "PROPORTIONATE Share" shall be the percentage set forth in the Basic
Lease Information as Tenant's Proportionate Share of the Building, as adjusted
by Landlord from time to time for a remeasurement of or changes in the physical
size of the Premises or the Building, whether such changes in size are due to an
addition to or a sale or conveyance of a portion of the Building or otherwise.
With respect to Expenses which Landlord allocates to the Project as a whole or
to only a portion of the Project, Tenant's "PROPORTIONATE SHARE" shall be, with
respect to Expenses which Landlord allocates to the Project as a whole, the
percentage set forth in the Basic Lease Information as Tenant's Proportionate
Share of the Project and, with respect to Expenses which Landlord allocates to
only a portion of the Project, a percentage calculated by Landlord from time to
time in its sole discretion and furnished to Tenant in writing, in either case
as adjusted by Landlord from time to time for a remeasurement of or changes in
the physical size of the Premises or the Project, whether such changes in size
are due to an addition to or a sale or conveyance of a portion of the Project or
otherwise. Notwithstanding the foregoing, Landlord may equitably adjust Tenant's
Proportionate Share(s) for all or part of any item of expense or cost
reimbursable by Tenant that relates to a repair, replacement, or service that
benefits only the Premises or only a portion of the Building and/or the Project
or that varies with the occupancy of the Building and/or the Project. Without
limiting the generality of the foregoing, Tenant understands and agrees that
Landlord shall have the right to adjust Tenant's Proportionate Share(s) of any
Utility Expenses based upon Tenant's use of the Utilities or similar services as
reasonably estimated and determined by Landlord based upon factors such as size
of the Premises and intensity of use of such Utilities by Tenant such that
Tenant shall pay the portion of such charges reasonably consistent with Tenant's
use of such Utilities and similar services.
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(4) In the event the average occupancy level of the Building or the
Project for the Base Year and/or any subsequent Comparison Year is not ninety
percent (90%) or more of full occupancy, then the Expenses for such year shall
be apportioned among the tenants by the Landlord to reflect those costs which
would have occurred had the Building or the Project, as applicable, been ninety
percent (90%) occupied during such year.
(e) GENERAL PAYMENT TERMS. The Base Rent, Additional Rent and all other
sums payable by Tenant to Landlord hereunder, including, without limitation, any
late charges assessed pursuant to Paragraph 6 below and any interest assessed
pursuant to Paragraph 45 below, are referred to as the "RENT". All Rent shall be
paid without deduction, offset or abatement in lawful money of the United States
of America. Checks are to be made payable to Harbor Investment Partners and
shall be mailed to: Dept. ▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, or to such
other person or place as Landlord may, from time to time, designate to Tenant in
writing. The Rent for any fractional part of a calendar month at the
commencement or termination of the Lease term shall be a prorated amount of the
Rent for a full calendar month based upon a thirty (30) day month.
(f) AUDIT RIGHTS. Provided Tenant is not in Default under the terms of this
Lease (nor is any event occurring which with the giving of notice or the passage
of time, or both, would constitute a Default hereunder), Tenant, at its sole
expense subject to the last sentence of this Paragraph 4(f), shall have the
right within ninety (90) days after the delivery of each Expense Statement to
review and audit Landlord's books and records regarding such Expense Statement
for the sole purpose of determining the accuracy of such Expense Statement. Such
review or audit shall be performed by a nationally recognized accounting firm
that calculates its fees with respect to hours actually worked and that does not
discount its time or rate (as opposed to a calculation based upon percentage of
recoveries or other incentive arrangement), shall take place during normal
business hours in the office of Landlord or Landlord's property manager and
shall be completed within three (3) business days after the commencement
thereof. If Tenant does not so review or audit Landlord's books and records,
Landlord's Expense Statement shall be final and binding upon Tenant. In the
event that Tenant determines on the basis of its review of Landlord's books and
records that the amount of Expenses paid by Tenant pursuant to this Paragraph 4
for the period covered by such Expense Statement is less than or greater than
the actual amount properly payable by Tenant under the terms of this Lease,
Tenant shall promptly pay any deficiency to Landlord or, if Landlord concurs
with the results of such audit, Landlord shall promptly refund any excess
payment to Tenant, as the case may be.
5. UTILITIES AND SERVICES
(a) From 7:00 a.m. to 6:00 p.m. on weekdays ("NORMAL BUSINESS HOURS")
(excluding legal holidays), Landlord shall furnish to the Premises electricity
for lighting and operation of low-power usage office machines, water, heat and
air conditioning, and elevator service. During all other hours, Landlord shall
furnish such service except for heat and air
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conditioning. Landlord shall provide janitorial services for the Premises on
weekdays (excluding legal holidays) as determined necessary by Landlord.
Landlord shall cause such janitorial services to generally be provided after
Normal Business Hours.
(b) If requested by Tenant, Landlord shall furnish heat and air
conditioning at times other than Normal Business Hours and the cost of such
services, based upon actual usage (as reflected on a meter installed in or
around the Premises by Landord at the cost of Tenant) or Landlord's reasonable
estimate of the actual cost thereof, shall be paid by Tenant as Additional Rent,
payable concurrently with the next installment of Base Rent.
(c) Tenant acknowledges that the Premises, the Building and/or the Project
may become subject to the rationing of Utility services or restrictions on
Utility use as required by a public utility company, governmental agency or
other similar entity having jurisdiction thereof. Tenant acknowledges and agrees
that its tenancy and occupancy hereunder shall be subject to such rationing or
restrictions as may be imposed upon Landlord, Tenant, the Premises, the Building
and/or the Project, and Tenant shall in no event be excused or relieved from any
covenant or obligation to be kept or performed by Tenant by reason of any such
rationing or restrictions. Tenant agrees to comply with energy conservation
programs implemented by Landlord by reason of rationing, restrictions or Laws.
(d) Landlord shall not be liable for any loss, injury or damage to
property caused by or resulting from any variation, interruption, or failure of
Utilities due to any cause whatsoever, or from failure to make any repairs or
perform any maintenance. No temporary interruption or failure of such services
incident to the making of repairs, alterations, improvements, or due to
accident, strike, or conditions or other events shall be deemed an eviction of
Tenant or relieve Tenant from any of its obligations hereunder. In no event
shall Landlord be liable to Tenant for any damage to the Premises or for any
loss, damage or injury to any property therein or thereon occasioned by
bursting, rupture, leakage or overflow of any plumbing or other pipes
(including, without limitation, water, steam, and/or refrigerant lines),
sprinklers, tanks, drains, drinking fountains or washstands, or other similar
cause in, above, upon or about the Premises, the Building, or the Project.
6. LATE CHARGE
Notwithstanding any other provision of this Lease, Tenant hereby
acknowledges that late payment to Landlord of Rent, or other amounts due
hereunder will cause Landlord to incur costs not contemplated by this Lease, the
exact amount of which will be extremely difficult to ascertain. If any Rent or
other sums due from Tenant are not received by Landlord or by Landlord's
designated agent within five (5) days after their due date, then Tenant shall
pay to Landlord a
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late charge equal to ten percent (10%) of such overdue amount, plus any costs
and attorneys' fees incurred by Landlord by reason of Tenant's failure to pay
Rent and/or other charges when due hereunder. Landlord and Tenant hereby agree
that such late charges represent a fair and reasonable estimate of the cost that
Landlord will incur by reason of Tenant's late payment and shall not be
construed as a penalty. Landlord's acceptance of such late charges shall not
constitute a waiver of Tenant's default with respect to such overdue amount or
estop Landlord from exercising any of the other rights and remedies granted
under this Lease.
Initials: Landlord _______ Tenant _______
7. LETTER OF CREDIT
(a) Upon execution of this Lease, Tenant shall deliver to Landlord, at
Tenant's sole cost and expense, the Letter of Credit described below in the
amount specified in the Basic Lease Information (the "LC FACE AMOUNT") as
security for Tenant's performance of all of Tenant's covenants and obligations
under this Lease; provided, however, that neither the Letter of Credit nor any
Letter of Credit Proceeds (as defined below) shall be deemed an advance rent
deposit or an advance payment of any other kind, or a measure of Landlord's
damages upon Tenant's Default. The Letter of Credit shall be maintained in
effect from the date hereof through the date that is sixty (60) days after the
Expiration Date (the "LC TERMINATION DATE"). On the LC Termination Date,
Landlord shall return to Tenant the Letter of Credit and any Letter of Credit
Proceeds then held by Landlord (other than those Letter of Credit Proceeds
Landlord is entitled to retain under the terms of this Paragraph 7(a));
provided, however, that in no event shall any such return be construed as an
admission by Landlord that Tenant has performed all of its obligations
hereunder. Landlord shall not be required to segregate the Letter of Credit
Proceeds from its other funds and no interest shall accrue or be payable to
Tenant with respect thereto. Landlord may (but shall not be required to) draw
upon the Letter of Credit and use the proceeds therefrom (the "LETTER OF CREDIT
PROCEEDS") or any portion thereof to (i) cure any Default under this Lease and
to compensate Landlord for any loss or damage Landlord incurs as a result of
such Default, (ii) repair damage to the Premises caused by Tenant, (iii) restore
the Premises upon termination of this Lease to the condition required by
Paragraph 11 below, and (iv) reimburse Landlord for the payment of any amount
which Landlord may reasonably spend or be required to spend by reason of
Tenant's Default, it being understood that any use of the Letter of Credit
Proceeds shall not constitute a bar or defense to any of Landlord's remedies set
forth in Paragraph 25 below. In such event and upon written notice from Landlord
to Tenant specifying the amount of the Letter of Credit Proceeds so utilized by
Landlord and the particular purpose for which such amount was applied, Tenant
shall immediately deliver to Landlord an amendment to the Letter of Credit or a
replacement Letter of Credit in an amount equal to the full LC Face Amount.
Tenant's failure to deliver such replacement Letter of Credit to Landlord within
ten (10) days of Landlord's notice shall constitute a Default hereunder.
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(b) On or about the date that is six (6) months after the Commencement
Date and every six (6) months thereafter, Landlord shall, at Tenant's written
request, review Tenant's financial statements and other information requested by
Landlord regarding the prospects for Tenant's continued business operations
throughout the remainder of the Term (collectively, "TENANT'S FINANCIALS"). In
the event Tenant's Financials are acceptable to Landlord in its sole and
absolute discretion, then Landlord shall permit Tenant to reduce the LC Face
Amount to an amount equal to four (4) months of Base Rent at the time of such
reduction.
(c) As used herein, Letter of Credit shall mean an unconditional, stand-by
irrevocable letter of credit (herein referred to as the "LETTER OF CREDIT")
issued by a Silicon Valley office of Silicon Valley Bank or the San Francisco
office of a major national bank insured by the Federal Deposit Insurance
Corporation and otherwise satisfactory to Landlord (the "BANK"), naming Landlord
as beneficiary, in the amount of the LC Face Amount, and otherwise in form and
substance satisfactory to Landlord. The Letter of Credit shall be for a one-year
term and shall provide: (i) that Landlord may make partial and multiple draws
thereunder, up to the face amount thereof, (ii) that Landlord may draw upon the
Letter of Credit up to the full amount thereof and the Bank will pay to Landlord
the amount of such draw upon receipt by the Bank of a sight draft signed by
Landlord and accompanied by a written certification from Landlord to the Bank
stating either that: (A) a Default has occurred and is continuing under this
Lease and any applicable grace period has expired, or (B) Landlord has not
received notice from the Bank at least thirty (30) days prior to the then
current expiry date of the Letter of Credit that the Letter of Credit will be
renewed by the Bank for at least one (1) year beyond the relevant annual
expiration date or, in the case of the last year of the Term, sixty (60) days
after the Expiration Date, together with a replacement Letter of Credit or a
modification to the existing Letter of Credit effectuating such renewal, and
Tenant has not otherwise furnished Landlord with a replacement Letter of Credit
as hereinafter provided; and (iii) that, in the event of Landlord's assignment
or other transfer of its interest in this Lease, the Letter of Credit shall be
freely transferable by Landlord, without recourse and without the payment of any
fee or consideration, to the assignee or transferee of such interest and the
Bank shall confirm the same to Landlord and such assignee or transferee. In the
event that the Bank shall fail to (y) notify Landlord that the Letter of Credit
will be renewed for at least one (1) year beyond the then applicable expiration
date, and (z) deliver to Landlord a replacement Letter of Credit or a
modification to the existing Letter of Credit effectuating such renewal, and
Tenant shall not have otherwise delivered to Landlord, at least thirty (30) days
prior to the relevant annual expiration date, a replacement Letter of Credit in
the amount required hereunder and otherwise meeting the requirements set forth
above, then Landlord shall be entitled to draw on the Letter of Credit as
provided above, and shall hold the proceeds of such draw as Letter of Credit
Proceeds pursuant to Paragraph 7(a) above.
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8. POSSESSION
(a) TENANT'S RIGHT OF POSSESSION. Subject to Paragraph 8(b), Tenant shall
be entitled to possession of the Premises upon commencement of the Term.
(b) DELAY IN DELIVERING POSSESSION. If for any reason whatsoever, Landlord
cannot deliver possession of the Premises to Tenant on or before the Estimated
Commencement Date, this Lease shall not be void or voidable, nor shall Landlord,
or Landlord's agents, advisors, employees, partners, shareholders, directors,
invitees or independent contractors (collectively, "LANDLORD'S AGENTS"), be
liable to Tenant for any loss or damage resulting therefrom. Tenant shall not be
liable for Rent until Landlord delivers possession of the Premises to Tenant.
The Expiration Date shall be extended by the same number of days that Tenant's
possession of the Premises was delayed beyond the Estimated Commencement Date.
(c) EARLY OCCUPANCY. Subject to the vacancy of the Premises by the prior
tenant thereof, Tenant shall be permitted to move its furniture, trade fixtures,
equipment, machinery, goods and supplies into the Premises from and after
October 15, 1997 and prior to the Estimated Commencement Date specified in the
Basic Lease Information. Such entry upon the Premises shall be subject to all of
the provisions of this Lease, except that Tenant shall not be required to pay
Base Rent or Additional Rent as long as Tenant is not operating its business in
the Premises during such early possession period; provided, however, that Tenant
shall have previously provided Landlord with proof of Tenant's insurance as set
forth in Paragraph 15 of this Lease. All materials, work, installations,
equipment and decorations of any nature brought upon or installed by Tenant in
the Premises prior to the Commencement Date shall be at Tenant's sole risk.
(d) RIGHT TO TERMINATE LEASE. Notwithstanding the terms of Paragraph 8(b)
above, if possession of the Premises is not delivered to Tenant on or before
December 31, 1997 ("TERMINATION OPTION DATE"), Tenant's sole remedy shall be the
option to terminate this Lease by the delivery to Landlord of written notice
within ten (10) days after the Termination Option Date. If Tenant fails to
deliver such notice to Landlord in a timely manner as provided herein, Tenant's
right to terminate this Lease shall be null and void and of no further force or
effect. Tenant shall not be entitled to terminate or cancel this Lease for any
delay in delivery of the Premises prior to the Termination Option Date.
9. USE OF PREMISES
(a) PERMITTED USE. The use of the Premises by Tenant and Tenant's agents,
advisors, employees, partners, shareholders, directors, invitees and independent
contractors (collectively, "TENANT'S AGENTS") shall be solely for the Permitted
Use specified in the Basic Lease Information and for no other use. Tenant shall
not permit any objectionable or unpleasant odor, smoke, dust, gas, noise or
vibration to emanate from or near the Premises. The Premises shall not be used
to create any
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nuisance or trespass, for any illegal purpose, for any purpose not permitted by
Laws, for any purpose that would invalidate the insurance or increase the
premiums for insurance on the Premises, the Building or the Project or for any
purpose or in any manner that would interfere with other tenants' use or
occupancy of the Project. If any of Tenant's office machines or equipment
disturb any other tenant in the Building, then Tenant shall provide adequate
insulation or take such other action as may be necessary to eliminate the noise
or disturbance. Tenant agrees to pay to Landlord, as Additional Rent, any
increases in premiums on policies resulting from Tenant's Permitted Use or any
other use or action by Tenant or Tenant's Agents which increases Landlord's
premiums or requires additional coverage by Landlord to insure the Premises.
Tenant agrees not to overload the floor(s) of the Building.
(b) COMPLIANCE WITH GOVERNMENTAL REGULATIONS AND PRIVATE RESTRICTIONS.
Tenant and Tenant's Agents shall, at Tenant's expense, faithfully observe and
comply with (1) all municipal, state and federal laws, statutes, codes, rules,
regulations, ordinances, requirements, and orders (collectively, "LAWS"), now in
force or which may hereafter be in force pertaining to the Premises or Tenant's
use of the Premises, the Building or the Project; (2) all recorded covenants,
conditions and restrictions affecting the Project ("PRIVATE RESTRICTIONS") now
in force or which may hereafter be in force; and (3) any and all rules and
regulations set forth in EXHIBIT C and any other rules and regulations now or
hereafter promulgated by Landlord related to parking or the operation of the
Premises, the Building and/or the Project (collectively, the "RULES AND
REGULATIONS"). The judgment of any court of competent jurisdiction, or the
admission of Tenant in any action or proceeding against Tenant, whether Landlord
be a party thereto or not, that Tenant has violated any such Laws or Private
Restrictions, shall be conclusive of that fact as between Landlord and Tenant.
(c) COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT. Landlord and Tenant
hereby agree and acknowledge that the Premises, the Building and/or the Project
may be subject to, among other Laws, the requirements of the Americans with
Disabilities Act, a federal law codified at 42 U.S.C. 12101 et seq., including,
but not limited to Title III thereof, and all regulations and guidelines related
thereto, together with any and all laws, rules, regulations, ordinances, codes
and statutes now or hereafter enacted by local or state agencies having
jurisdiction thereof, including all requirements of Title 24 of the State of
California, as the same may be in effect on the date of this Lease and may be
hereafter modified, amended or supplemented (collectively, the "ADA"). Any
Tenant Improvements to be constructed hereunder shall be in compliance with the
requirements of the ADA, and all costs incurred for purposes of compliance
therewith shall be a part of and included in the costs of the Tenant
Improvements. Tenant shall be solely responsible for conducting its own
independent investigation of this matter and for ensuring that the design of all
Tenant Improvements strictly complies with all requirements of the ADA. Subject
to reimbursement pursuant to Paragraph 4 above, if any barrier removal work or
other work is required to the Building, the
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Common Areas or the Project under the ADA, then such work shall be the
responsibility of Landlord; provided, if such work is required under the ADA as
a result of Tenant's use of the Premises or any work or Alteration (as
hereinafter defined) made to the Premises by or on behalf of Tenant, then such
work shall be performed by Landlord at the sole cost and expense of Tenant.
Except as otherwise expressly provided in this provision, Tenant shall be
responsible at its sole cost and expense for fully and faithfully complying with
all applicable requirements of the ADA relating to Tenant's use and occupancy of
the Premises and the operation of its business therein, including without
limitation, not discriminating against any disabled persons in the operation of
Tenant's business in or about the Premises, and offering or otherwise providing
auxiliary aids and services as, and when, required by the ADA. Within ten (10)
days after receipt, Tenant shall advise Landlord in writing, and provide
Landlord with copies of (as applicable), any notices alleging violation of the
ADA relating to any portion of the Premises, the Building or the Project; any
claims made or threatened orally or in writing regarding noncompliance with the
ADA and relating to any portion of the Premises, the Building, or the Project;
or any governmental or regulatory actions or investigations instituted or
threatened regarding noncompliance with the ADA and relating to any portion of
the Premises, the Building or the Project. Tenant shall and hereby agrees to
protect, defend (with counsel acceptable to Landlord) and hold Landlord and
Landlord's Agents harmless and indemnify Landlord and Landlord's Agents from and
against all liabilities, damages, claims, losses, penalties, judgments, charges
and expenses (including attorneys' fees, costs of court and expenses necessary
in the prosecution or defense of any litigation including the enforcement of
this provision) arising from or in any way related to, directly or indirectly,
Tenant's or Tenant's Agents' violation or alleged violation of the ADA. Tenant
agrees that the obligations of Tenant herein shall survive the expiration or
earlier termination of this Lease
10. ACCEPTANCE OF PREMISES
(a) By entry hereunder, Tenant accepts the Premises as suitable for
Tenant's intended use and as being in good and sanitary operating order,
condition and repair, AS IS, and without representation or warranty by Landlord
as to the condition, use or occupancy which may be made thereof. Any exceptions
to the foregoing must be by written agreement executed by Landlord and Tenant.
(b) Notwithstanding the terms of Paragraph 10(a) above, Landlord shall
cause the HVAC, electrical and plumbing systems serving the Premises to be in
good working order and the roof on the Building to be in good condition on the
Possession Date. Any claims by Tenant under the preceding sentence shall be made
in writing not later than the fifteenth (15th) day after the Commencement Date.
In the event Tenant fails to deliver a written claim to Landlord on or before
such fifteenth (15th) day, then Landlord shall be conclusively deemed to have
satisfied its obligations under this Paragraph 10.
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(c) Prior to the Commencement Date, Landlord shall clean the carpet, touch
up the paint where required, replace all stained and/or damaged ceiling tiles
and replace any burned-out light bulbs in the Premises. Except for the
foregoing, Landlord shall have no obligation to remodel, improve or otherwise
alter the Premises prior to or after the Commencement Date.
11. SURRENDER
Tenant agrees that on the last day of the Term, or on the sooner
termination of this Lease, Tenant shall surrender the Premises to Landlord (a)
in good condition and repair (damage by acts of God, fire, and normal wear and
tear excepted), but with all interior walls painted or cleaned so they appear
painted, any carpets cleaned, all floors cleaned and waxed and all non-working
light bulbs and ballasts replaced, and (b) otherwise in accordance with
Paragraph 32(h). Normal wear and tear shall not include any damage or
deterioration to the floors of the Premises arising from the use of forklifts
in, on or about the Premises (including, without limitation, any marks or stains
on any portion of the floors) any damage or deterioration that would have been
prevented by proper maintenance by Tenant, or Tenant otherwise performing all of
its obligations under this Lease. On or before the expiration or sooner
termination of this Lease, (i) Tenant shall remove all of Tenant's Property (as
hereinafter defined) and Tenant's signage from the Premises, the Building and
the Project and repair any damage caused by such removal, and (ii) Landlord may,
by notice to Tenant given not later than ninety (90) days prior to the
Expiration Date (except in the event of a termination of this Lease prior to the
scheduled Expiration Date, in which event no advance notice shall be required),
require Tenant at Tenant's expense to remove any or all Alterations and to
repair any damage caused by such removal. Any of Tenant's Property not so
removed by Tenant as required herein shall be deemed abandoned and may be
stored, removed, and disposed of by Landlord at Tenant's expense, and Tenant
waives all claims against Landlord for any damages resulting from Landlord's
retention and disposition of such property; provided, however, that Tenant shall
remain liable to Landlord for all costs incurred in storing and disposing of
such abandoned property of Tenant. All Tenant Improvements and Alterations
except those which Landlord requires Tenant to remove shall remain in the
Premises as the property of Landlord. If the Premises are not surrendered at the
end of the Term or sooner termination of this Lease, and in accordance with the
provisions of this Paragraph 11 and Paragraph 32(h) below, Tenant shall continue
to be responsible for the payment of Rent (as the same may be increased pursuant
to Paragraph 35 below) until the Premises are so surrendered in accordance with
said Paragraphs, and Tenant shall indemnify, defend and hold Landlord harmless
from and against any and all loss or liability resulting from delay by Tenant in
so surrendering the Premises including, without limitation, any loss or
liability resulting from any claim against Landlord made by any succeeding
tenant or prospective tenant founded on or resulting from such delay and losses
to Landlord due to lost opportunities to lease any portion of
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the Premises to any such succeeding tenant or prospective tenant, together with,
in each case, actual attorneys' fees and costs.
12. ALTERATIONS AND ADDITIONS
(a) Tenant shall not make, or permit to be made, any alteration, addition
or improvement (hereinafter referred to individually as an "ALTERATION" and
collectively as the "ALTERATIONS") to the Premises or any part thereof without
the prior written consent of Landlord, which consent shall not be unreasonably
withheld; provided, however, that Landlord shall have the right in its sole and
absolute discretion to consent or to withhold its consent to any Alteration
which affects the interior or exterior walls of the Premises, the roof system,
the structural portions of the Premises, the Building or the Project or the
Systems serving the Premises, the Building and/or the Project or any portion
thereof. Landlord shall use commercially reasonable efforts to approve or deny
Tenant's request to proceed with the installation of Alterations within thirty
(30) days after Landlord's receipt of such request in writing, together with
plans and specifications for such Alterations and such other documentation as
Landlord may require in connection therewith. Notwithstanding the foregoing,
Tenant shall have the right without the consent of Landlord, but subject to full
compliance with the other terms of this Paragraph 12, to make nonstructural and
nonmechanical Alterations not exceeding Two Thousand Five Hundred Dollars
($2,500) in cost on an individual basis or Ten Thousand Dollars ($10,000) in the
aggregate over the Term (collectively, "PERMITTED ALTERATIONS"), provided that
(A) Tenant shall not move or alter any walls in the Premises in connection with
the making of such Permitted Alterations, (B) such Permitted Alterations shall
not affect the HVAC, plumbing, electrical, fire protection, life safety,
security and other mechanical, electrical and communications systems of the
Building, and (C) such Permitted Alterations shall not be visible from the
exterior of the Premises.
(b) Any Alteration to the Premises shall be at Tenant's sole cost and
expense, in compliance with all applicable Laws and all requirements requested
by Landlord, including, without limitation, the requirements of any insurer
providing coverage for the Premises or the Project or any part thereof, and in
accordance with plans and specifications approved in writing by Landlord, and
shall be constructed and installed by a contractor approved in writing by
Landlord. As a further condition to giving consent, Landlord may require Tenant
to provide Landlord, at Tenant's sole cost and expense, a payment and
performance bond in form acceptable to Landlord, in a principal amount not less
than one and one-half times the estimated costs of such Alterations, to ensure
Landlord against any liability for mechanic's and materialmen's liens and to
ensure completion of work. Before Alterations may begin, valid building permits
or other permits or licenses required must be furnished to Landlord, and, once
the Alterations begin, Tenant will diligently and continuously pursue their
completion. Landlord may monitor construction of the Alterations and Tenant
shall reimburse Landlord for its costs (including, without limitation, the costs
of any construction manager retained by
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Landlord) in reviewing plans and documents and in monitoring construction.
Tenant shall maintain during the course of construction, at its sole cost and
expense, builders' risk insurance for the amount of the completed value of the
Alterations on an all-risk non-reporting form covering all improvements under
construction, including building materials, and other insurance in amounts and
against such risks as Landlord shall reasonably require in connection with the
Alterations. In addition to and without limitation on the generality of the
foregoing, Tenant shall ensure that its contractor(s) procure and maintain in
full force and effect during the course of construction a "broad form"
commercial general liability and property damage policy of insurance naming
Landlord, Tenant and Landlord's lenders as additional insureds. The minimum
limit of coverage of the aforesaid policy shall be in the amount of not less
than Three Million Dollars ($3,000,000.00) for injury or death of one person in
any one accident or occurrence and in the amount of not less than Three Million
Dollars ($3,000,000.00) for injury or death of more than one person in any one
accident or occurrence, and shall contain a severability of interest clause or a
cross liability endorsement. Such insurance shall further insure Landlord and
Tenant against liability for property damage of at least One Million Dollars
($1,000,000.00).
(c) All Alterations, including, but not limited to, heating, lighting,
electrical, air conditioning, fixed partitioning, drapery, wall covering and
paneling, built-in cabinet work and carpeting installations made by Tenant,
together with all property that has become an integral part of the Premises or
the Building (but not including any temporary cubicles or similar temporary
partitions), shall at once be and become the property of Landlord, and shall not
be deemed trade fixtures or Tenant's Property. If requested by Landlord, Tenant
will pay, prior to the commencement of construction, an amount determined by
Landlord necessary to cover the costs of demolishing such Alterations and/or the
cost of returning the Premises and the Building to its condition prior to such
Alterations.
(d) No private telephone systems and/or other related computer or
telecommunications equipment or lines may be installed without Landlord's prior
written consent, which consent may be given or withheld by Landlord in
accordance with the standards for consent set forth in Paragraph 12(a) above. If
Landlord gives such consent, all equipment must be installed within the Premises
and, at the request of Landlord made at any time prior to the expiration of the
Term, removed upon the expiration or sooner termination of this Lease and the
Premises restored to the same condition as before such installation.
(e) Notwithstanding anything herein to the contrary, before installing any
equipment or lights which generate an undue amount of heat in the Premises, or
if Tenant plans to use any high-power usage equipment in the Premises, Tenant
shall obtain the written permission of Landlord. Landlord may refuse to grant
such permission unless Tenant agrees to pay the costs to Landlord for
installation of supplementary air conditioning capacity or electrical systems
necessitated by such equipment.
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(f) Tenant agrees not to proceed to make any Alterations, notwithstanding
consent from Landlord to do so, until Tenant notifies Landlord in writing of the
date Tenant desires to commence construction or installation of such Alterations
and Landlord has approved such date in writing, in order that Landlord may post
appropriate notices to avoid any liability to contractors or material suppliers
for payment for Tenant's improvements. Tenant will at all times permit such
notices to be posted and to remain posted until the completion of work.
13. MAINTENANCE AND REPAIRS OF PREMISES
(a) MAINTENANCE BY TENANT. Throughout the Term, Tenant shall, at its sole
expense, subject to Paragraphs 5(a) and 13(b) hereof, (1) keep and maintain in
good order and condition the Premises and Tenant's Property, and (2) keep and
maintain in good order and condition, repair and replace all of Tenant's
security systems in or about or serving the Premises. Tenant shall not do nor
shall Tenant allow Tenant's Agents to do anything to cause any damage,
deterioration or unsightliness to the Premises, the Building or the Project.
(b) MAINTENANCE BY LANDLORD. Subject to the provisions of Paragraphs 12(a),
21 and 22, and further subject to Tenant's obligation under Paragraph 4 to
reimburse Landlord, in the form of Additional Rent, for Tenant's Proportionate
Share(s) of the cost and expense of the following items, Landlord agrees to
repair and maintain the following items: the roof coverings (provided that
Tenant installs no additional air conditioning or other equipment on the roof
that damages the roof coverings, in which event Tenant shall pay all costs
resulting from the presence of such additional equipment); the Systems serving
the Premises and the Building; and the Parking Areas, pavement, landscaping,
sprinkler systems, sidewalks, driveways, curbs, and lighting systems in the
Common Areas. Subject to the provisions of Paragraphs 13(a), 21 and 22,
Landlord, at its own cost and expense, agrees to repair and maintain the
following items: the structural portions of the roof (specifically excluding the
roof coverings), the foundation, the footings, the floor slab, and the load
bearing walls and exterior walls of the Building (excluding any glass and any
routine maintenance, including, without limitation, any painting, sealing,
patching and waterproofing of such walls). Notwithstanding anything in this
Paragraph 13 to the contrary, Landlord shall have the right to either repair or
to require Tenant to repair any damage to any portion of the Premises, the
Building and/or the Project caused by or created due to any act, omission,
negligence or willful misconduct of Tenant or Tenant's Agents and to restore the
Premises, the Building and/or the Project, as applicable, to the condition
existing prior to the occurrence of such damage; provided, however, that in the
event Landlord elects to perform such repair and restoration work, Tenant shall
reimburse Landlord upon demand for all costs and expenses incurred by Landlord
in connection therewith; provided, further that if any of said costs are covered
by any policy of insurance maintained by Landlord pursuant to Paragraph 14
below, then Landlord shall submit a claim under the applicable policy and shall,
solely to the extent of proceeds actually received by Landlord under such
policy, reimburse Tenant for the
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actual costs so paid by Tenant to Landlord. Landlord's obligation hereunder to
repair and maintain is subject to the condition precedent that Landlord shall
have received written notice of the need for such repairs and maintenance and a
reasonable time to perform such repair and maintenance. Tenant shall promptly
report in writing to Landlord any defect or other condition which Landlord is
required to repair, and failure to so report such defects shall make Tenant
responsible to Landlord for the costs and expenses of repairing any additional
damage or deterioration occurring after the date Tenant obtains knowledge of
such defective condition and any liability incurred by Landlord by reason of
Tenant's failure to notify Landlord of such defective condition in a timely
manner as provided herein.
(c) TENANT'S WAIVER OF RIGHTS. Tenant hereby expressly waives all rights to
make repairs at the expense of Landlord or to terminate this Lease, as provided
for in California Civil Code Sections 1941 and 1942, and 1932(1), respectively,
and any similar or successor statute or law in effect or any amendment thereof
during the Term.
14. LANDLORD'S INSURANCE
Landlord shall purchase and keep in force fire, extended coverage and "all
risk" insurance covering the Building and the Project and commercial general
liability insurance covering the Project, insuring Landlord against any
liability arising out of the ownership, use, occupancy or maintenance of the
Common Areas ("LANDLORD'S LIABILITY POLICY"). Tenant shall, at its sole cost and
expense, comply with any and all reasonable requirements pertaining to the
Premises, the Building and the Project of any insurer necessary for the
maintenance of reasonable fire and commercial general liability insurance,
covering the Building and the Project. Landlord, at Tenant's cost, may maintain
"Loss of Rents" insurance, insuring that the Rent will be paid in a timely
manner to Landlord for a period of at least twelve (12) months if the Premises,
the Building or the Project or any portion thereof are destroyed or rendered
unusable or inaccessible by any cause insured against under this Lease.
15. TENANT'S INSURANCE
(a) COMMERCIAL GENERAL LIABILITY INSURANCE. Tenant shall, at Tenant's
expense, secure and keep in force a commercial general liability insurance,
umbrella liability policy and property damage policy covering the Premises,
insuring Tenant, and naming Landlord and its lenders as additional insureds,
against any liability arising out of the ownership, use, occupancy or
maintenance of the Premises. The minimum limit of coverage of such policy shall
be in the amount of not less than Two Million Dollars ($2,000,000.00) for injury
or death of one person in any one accident or occurrence and in the amount of
not less than Two Million Dollars ($2,000,000.00) for injury or death of more
than one person in any one accident or occurrence, shall include an extended
liability endorsement
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providing contractual liability coverage (which shall include coverage for
Tenant's indemnification obligations in this Lease), and shall contain a
severability of interest clause or a cross liability endorsement. Such insurance
shall further insure Landlord and Tenant against liability for property damage
of at least Two Million Dollars ($2,000,000.00). Landlord may from time to time
require commercially reasonable increases in any such limits if Landlord
believes that additional coverage is necessary or desirable. The limit of any
insurance shall not limit the liability of Tenant hereunder. No policy
maintained by Tenant under this Paragraph 15(a) shall contain a deductible
greater than ten thousand dollars ($10,000.00). No policy shall be cancelable or
subject to reduction of coverage without thirty (30) days prior written notice
to Landlord, and loss payable clauses shall be subject to Landlord's approval,
provided that Tenant may add additional loss payees without Landlord's prior
consent. Such policies of insurance shall be issued as primary policies and not
contributing with or in excess of coverage that Landlord may carry (except that
Landlord's Liability Policy shall be primary with respect to losses occurring in
the Common Areas, other than losses resulting from the acts, negligence or
willful misconduct of Tenant or Tenant's Agents), by an insurance company
authorized to do business in the State of California for the issuance of such
type of insurance coverage and rated A-:VIII or better in Best's Key Rating
Guide.
(b) PERSONAL PROPERTY INSURANCE. Tenant shall maintain in full force and
effect on all of its personal property, furniture, furnishings, trade or
business fixtures and equipment (collectively, "TENANT'S PROPERTY") on the
Premises, a policy or policies of fire and extended coverage insurance with
standard coverage endorsement to the extent of the full replacement cost
thereof. No such policy shall contain a deductible greater than two thousand
five hundred dollars ($2,500.00). During the term of this Lease the proceeds
from any such policy or policies of insurance shall be used for the repair or
replacement of the fixtures and equipment so insured to the extent necessary for
the ordinary conduct of Tenant's business. Landlord shall have no interest in
Tenant's Property or in the insurance upon Tenant's Property and will sign all
documents reasonably necessary in connection with the settlement of any claim or
loss by Tenant. Landlord will not carry insurance on Tenant's possessions.
(c) WORKER'S COMPENSATION INSURANCE; EMPLOYER'S LIABILITY INSURANCE. Tenant
shall, at Tenant's expense, maintain in full force and effect worker's
compensation insurance with not less than the minimum limits required by law,
and employer's liability insurance with a minimum limit of coverage of One
Million Dollars ($1,000,000).
(d) EVIDENCE OF COVERAGE. Tenant shall deliver to Landlord certificates of
insurance and true and complete copies of any and all endorsements required
herein for all insurance required to be maintained by Tenant hereunder at the
time of execution of this Lease by Tenant. Tenant shall, at least thirty (30)
days prior to expiration of each policy, furnish Landlord with certificates of
renewal or
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"binders" thereof. Each certificate shall expressly provide that such policies
shall not be cancellable or otherwise subject to material modification except
after thirty (30) days prior written notice to Landlord and the other parties
named as additional insureds as required in this Lease (except for cancellation
for nonpayment of premium, in which event cancellation shall not take effect
until at least ten (10) days notice has been given to Landlord).
16. INDEMNIFICATION
(a) OF LANDLORD. Except to the extent of damage caused by the gross
negligence or willful misconduct of Landlord or Landlord's Agents, Tenant shall
indemnify and hold harmless Landlord and Landlord's Agents against and from any
and all claims, liabilities, judgments, costs, demands, causes of action and
expenses (including, without limitation, reasonable attorneys' fees) to the
extent arising from (1) the use of the Premises, the Building or the Project by
Tenant or Tenant's Agents, or from any activity done, permitted or suffered by
Tenant or Tenant's Agents in or about the Premises, the Building or the Project,
and (2) any act, neglect, fault, willful misconduct or omission of Tenant or
Tenant's Agents, or from any breach or default in the terms of this Lease by
Tenant or Tenant's Agents, and (3) any action or proceeding brought on account
of any matter in items (1) or (2). If any action or proceeding is brought
against Landlord by reason of any such claim, upon notice from Landlord, Tenant
shall defend the same at Tenant's expense by counsel reasonably satisfactory to
Landlord. As a material part of the consideration to Landlord, Tenant hereby
releases Landlord and Landlord's Agents from responsibility for, waives its
entire claim of recovery for and assumes all risk of (i) damage to property or
injury to persons in or about the Premises, the Building or the Project from any
cause whatsoever (except to the extent caused by the sole active gross
negligence or willful misconduct of Landlord or Landlord's Agents or by the
failure of Landlord to observe any of the terms and conditions of this Lease, if
such failure has persisted for an unreasonable period of time after written
notice of such failure), or (ii) loss resulting from business interruption or
loss of income at the Premises. The obligations of Tenant under this Paragraph
16 shall survive any termination of this Lease.
(b) OF TENANT. Landlord shall indemnify and hold harmless Tenant and its
Agents against and from any and all claims, liabilities, judgments, costs,
demands, causes of action and expenses (including, without limitation,
reasonable attorneys' fees) arising from the gross negligence or willful
misconduct of Landlord. If any action or proceeding is brought against Tenant by
reason of any such claim, upon notice from Tenant, Landlord shall defend the
same at Landlord's expense by counsel reasonably satisfactory to Tenant. The
obligations of Landlord under this Paragraph 16(b) shall survive any termination
of this Lease.
(c) NO IMPAIRMENT OF INSURANCE. The foregoing indemnity shall not relieve
any insurance carrier of its obligations under any policies required to be
carried by
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either party pursuant to this Lease, to the extent that such policies cover the
peril or occurrence that results in the claim that is subject to the foregoing
indemnity.
17. SUBROGATION
Landlord and Tenant hereby mutually waive any claim against the other and
its Agents for any loss or damage to any of their property located on or about
the Premises, the Building or the Project that is caused by or results from
perils covered by property insurance carried by the respective parties, to the
extent of the proceeds of such insurance actually received with respect to such
loss or damage, whether or not due to the negligence of the other party or its
Agents. Because the foregoing waivers will preclude the assignment of any claim
by way of subrogation to an insurance company or any other person, each party
now agrees to immediately give to its insurer written notice of the terms of
these mutual waivers and shall have their insurance policies endorsed to prevent
the invalidation of the insurance coverage because of these waivers. Nothing in
this Paragraph 17 shall relieve a party of liability to the other for failure to
carry insurance required by this Lease.
18. SIGNS
Tenant shall not place or permit to be placed in, upon, or about the
Premises, the Building or the Project any exterior lights, decorations,
balloons, flags, pennants, banners, advertisements or notices, or erect or
install any signs, windows or door lettering, placards, decorations, or
advertising media of any type which can be viewed from the exterior the Premises
without obtaining Landlord's prior written consent (which shall not be
unreasonably withheld or delayed beyond thirty (30) days following Tenant's
written request therefor and Tenant's delivery to Landlord of drawings and
specifications and other information requested by Landlord) or without complying
with Landlord's signage criteria, as the same may be modified by Landlord from
time to time, and with all applicable Laws, and will not conduct, or permit to
be conducted, any sale by auction on the Premises or otherwise on the Project.
Tenant shall remove any sign, advertisement or notice placed on the Premises,
the Building or the Project by Tenant upon the expiration of the Term or sooner
termination of this Lease, and Tenant shall repair any damage or injury to the
Premises, the Building or the Project caused thereby, all at Tenant's expense.
If any signs are not removed, or necessary repairs not made, Landlord shall have
the right to remove the signs and repair any damage or injury to the Premises,
the Building or the Project at Tenant's sole cost and expense.
19. FREE FROM LIENS
Tenant shall keep the Premises, the Building and the Project free from any
liens arising out of any work performed, material furnished or obligations
incurred by or for Tenant. In the event that Tenant shall not, within ten (10)
days following the imposition of any such lien, cause the lien to be released of
record by payment
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or posting of a proper bond, Landlord shall have in addition to all other
remedies provided herein and by law the right but not the obligation to cause
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, without limitation,
attorneys' fees) shall be payable to Landlord by Tenant upon demand. Landlord
shall have the right at all times to post and keep posted on the Premises any
notices permitted or required by law or that Landlord shall deem proper for the
protection of Landlord, the Premises, the Building and the Project, from
mechanics' and materialmen's liens. Tenant shall give to Landlord at least five
(5) business days' prior written notice of commencement of any repair or
construction on the Premises.
20. ENTRY BY LANDLORD
Tenant shall permit Landlord and Landlord's Agents to enter into and upon
the Premises at all reasonable times, upon reasonable notice (except in the case
of an emergency, for which no notice shall be required), and subject to Tenant's
reasonable security arrangements, for the purpose of inspecting the same or
showing the Premises to prospective purchasers, lenders or, during the last
twelve (12) months of the Term, tenants, or to alter, improve, maintain and
repair the Premises or the Building as required or permitted of Landlord under
the terms hereof, or for any other business purpose, without any rebate of Rent
and without any liability to Tenant for any loss of occupation or quiet
enjoyment of the Premises thereby occasioned (except for actual damages
resulting from the sole active gross negligence or willful misconduct of
Landlord); and Tenant shall permit Landlord to post notices of
non-responsibility and ordinary "for sale" or, during the last twelve (12)
months of the Term, "for lease," signs. No such entry shall be construed to be a
forcible or unlawful entry into, or a detainer of, the Premises, or an eviction
of Tenant from the Premises. Landlord may temporarily close entrances, doors,
corridors, elevators or other facilities without liability to Tenant by reason
of such closure in the case of an emergency and when Landlord otherwise deems
such closure necessary.
21. DESTRUCTION AND DAMAGE
(a) If the Premises are damaged by fire or other perils covered by extended
coverage insurance, Landlord shall, at Landlord's option:
(1) In the event of total destruction (which shall mean destruction or
damage in excess of twenty-five percent (25%) of the full insurable value
thereof) of the Premises, elect either to commence promptly to repair and
restore the Premises and prosecute the same diligently to completion, in which
event this Lease shall remain in full force and effect; or not to repair or
restore the Premises, in which event this Lease shall terminate. Landlord shall
give Tenant written notice of its intention within sixty (60) days after the
date (the "CASUALTY DISCOVERY DATE") Landlord obtains actual knowledge of such
destruction. If Landlord elects not to
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restore the Premises, this Lease shall be deemed to have terminated as of the
date of such total destruction.
(2) In the event of a partial destruction (which shall mean
destruction or damage to an extent not exceeding twenty-five percent (25%) of
the full insurable value thereof) of the Premises for which Landlord will
receive insurance proceeds sufficient to cover the cost to repair and restore
such partial destruction and, if the damage thereto is such that the Premises
may be substantially repaired or restored to its condition existing immediately
prior to such damage or destruction within one hundred eighty (180) days from
the Casualty Discovery Date, Landlord shall commence and proceed diligently with
the work of repair and restoration, in which event the Lease shall continue in
full force and effect. If such repair and restoration requires longer than one
hundred eighty (180) days or if the insurance proceeds therefor (plus any
amounts Tenant may elect or is obligated to contribute) are not sufficient to
cover the cost of such repair and restoration, Landlord may elect either to so
repair and restore, in which event the Lease shall continue in full force and
effect, or not to repair or restore, in which event the Lease shall terminate.
In either case, Landlord shall give written notice to Tenant of its intention
within sixty (60) days after the Casualty Discovery Date. If Landlord elects not
to restore the Premises, this Lease shall be deemed to have terminated as of the
date of such partial destruction.
(3) Notwithstanding anything to the contrary contained in this
Paragraph, in the event of damage to the Premises occurring during the last
twelve (12) months of the Term, Landlord and Tenant may each elect to terminate
this Lease by written notice of such election given to the other within thirty
(30) days after the Casualty Discovery Date; provided, however, that Tenant
shall have the right to terminate this Lease under this Paragraph 21(a)(3) only
if its use of the Premises is materially disrupted as a result of such damage.
(b) If the Premises are damaged by any peril not covered by extended
coverage insurance, and the cost to repair such damage exceeds any amount Tenant
may agree to contribute, Landlord may elect either to commence promptly to
repair and restore the Premises and prosecute the same diligently to completion,
in which event this Lease shall remain in full force and effect; or not to
repair or restore the Premises, in which event this Lease shall terminate.
Landlord shall give Tenant written notice of its intention within sixty (60)
days after the Casualty Discovery Date. If Landlord elects not to restore the
Premises, this Lease shall be deemed to have terminated as of the date on which
Tenant surrenders possession of the Premises to Landlord, except that if the
damage to the Premises materially impairs Tenant's ability to continue its
business operations in the Premises, then this Lease shall be deemed to have
terminated as of the date such damage occurred.
(c) Notwithstanding anything to the contrary in this ▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇
shall have the option to terminate this Lease, exercisable by notice to Tenant
within
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sixty (60) days after the Casualty Discovery Date, in each of the following
instances:
(1) If more than twenty-five percent (25%) of the full insurable value
of the Building or the Project is damaged or destroyed, regardless of whether or
not the Premises are destroyed.
(2) If the Building or the Project or any portion thereof is damaged
or destroyed and the repair and restoration of such damage requires longer than
one hundred eighty (180) days from the Casualty Discovery Date.
(3) If the Building or the Project or any portion thereof is damaged
or destroyed and the insurance proceeds therefor are not sufficient to cover the
costs of repair and restoration.
(4) If the Building or the Project or any portion thereof is damaged
or destroyed during the last twelve (12) months of the Term.
(d) If the Premises is damaged or destroyed to the extent that the Premises
cannot be fully repaired or restored by Landlord within two hundred seventy
(270) days after the Casualty Discovery Date, Tenant may terminate this Lease
immediately upon notice thereof to Landlord, which notice shall be given, if at
all, not later than ten (10) days after Landlord notifies Tenant of Landlord's
estimate of the period of time required to repair such damage or destruction.
(e) In the event of repair and restoration as herein provided, the monthly
installments of Base Rent shall be abated proportionately in the ratio which
Tenant's use of the Premises is impaired during the period of such repair or
restoration, but only to the extent of rental abatement insurance proceeds
received by Landlord; provided, however, that Tenant shall not be entitled to
such abatement to the extent that such damage or destruction resulted from the
acts or inaction of Tenant or Tenant's Agents. Except as expressly provided in
the immediately preceding sentence with respect to abatement of Base Rent,
Tenant shall have no claim against Landlord for, and hereby releases Landlord
and Landlord's Agents from responsibility for and waives its entire claim of
recovery for any cost, loss or expense suffered or incurred by Tenant as a
result of any damage to or destruction of the Premises, the Building or the
Project or the repair or restoration thereof, including, without limitation, any
cost, loss or expense resulting from any loss of use of the whole or any part of
the Premises, the Building or the Project and/or any inconvenience or annoyance
occasioned by such damage, repair or restoration.
(f) If Landlord is obligated to or elects to repair or restore as herein
provided, Landlord shall repair or restore only the initial tenant improvements,
if any, constructed by Landlord in the Premises pursuant to the terms of this
Lease, substantially to their condition existing immediately prior to the
occurrence of the damage or destruction; and Tenant shall promptly repair and
restore, at Tenant's
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expense, Tenant's Alterations (to the extent required for the ordinary course of
Tenant's business) which were not constructed by Landlord.
(g) Tenant hereby waives the provisions of California Civil Code Section
1932(2) and Section 1933(4) which permit termination of a lease upon destruction
of the leased premises, and the provisions of any similar law now or hereinafter
in effect, and the provisions of this Paragraph 21 shall govern exclusively in
case of such destruction.
22. CONDEMNATION
(a) If twenty-five percent (25%) or more of either the Premises, the
Building or the Project or the parking areas for the Building or the Project is
taken for any public or quasi-public purpose by any lawful governmental power or
authority, by exercise of the right of appropriation, inverse condemnation,
condemnation or eminent domain, or sold to prevent such taking (each such event
being referred to as a "CONDEMNATION"), Landlord may, at its option, terminate
this Lease as of the date title vests in the condemning party. If twenty-five
percent (25%) or more of the Premises are taken and if the Premises remaining
after such Condemnation and any repairs by Landlord would be untenantable for
the conduct of Tenant's business operations, Tenant shall have the right to
terminate this Lease as of the date title vests in the condemning party. In
addition to the foregoing, if a sufficient number of parking spaces in the
Parking Areas are taken by Condemnation such that Landlord is compelled to
reduce Tenant's allocation of parking spaces under Paragraph 2 above to fewer
than fourteen (14) spaces (the "MINIMUM PARKING ALLOCATION"), and if as a result
of such reduction it would no longer be practical for Tenant to conduct its
business operations in the Premises, then Tenant shall have the right to
terminate this Lease by written notice to Landlord given not later than thirty
(30) days after Landlord notifies Tenant of such reduction in parking spaces;
provided, however, that Tenant shall have no right to terminate this Lease under
the aforesaid clause if Landlord is able to provide Tenant with a sufficient
number of parking spaces in a location reasonably proximate to the Project (the
"ALTERNATE PARKING SPACES") such that the sum of the parking spaces allocated to
Tenant in the Project's Parking Areas and the Alternate Parking Spaces equal or
exceed the Minimum Parking Allocation. Except as provided in the immediately
preceding sentence, if either party elects to terminate this Lease as provided
herein, such election shall be made by written notice to the other party given
within thirty (30) days after the nature and extent of such Condemnation have
been finally determined. If neither Landlord nor Tenant elects to terminate this
Lease to the extent permitted above, Landlord shall promptly proceed to restore
the Premises, to the extent of any Condemnation award received by Landlord, to
substantially the same condition as existed prior to such Condemnation, allowing
for the reasonable effects of such Condemnation, and a proportionate abatement
shall be made to the Base Rent corresponding to the time during which, and to
the portion of the floor area of the Premises (adjusted for any increase thereto
resulting from any reconstruction) of which, Tenant is deprived on
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account of such Condemnation and restoration, as reasonably determined by
Landlord. Except as expressly provided in the immediately preceding sentence
with respect to abatement of Base Rent, Tenant shall have no claim against
Landlord for, and hereby releases Landlord and Landlord's Agents from
responsibility for and waives its entire claim of recovery for any cost, loss or
expense suffered or incurred by Tenant as a result of any Condemnation or the
repair or restoration of the Premises, the Building or the Project or the
parking areas for the Building or the Project following such Condemnation,
including, without limitation, any cost, loss or expense resulting from any loss
of use of the whole or any part of the Premises, the Building, the Project or
the parking areas and/or any inconvenience or annoyance occasioned by such
Condemnation, repair or restoration. The provisions of California Code of Civil
Procedure Section 1265.130, which allows either party to petition the Superior
Court to terminate the Lease in the event of a partial taking of the Premises,
the Building or the Project or the parking areas for the Building or the
Project, and any other applicable law now or hereafter enacted, are hereby
waived by Tenant.
(b) Landlord shall be entitled to any and all compensation, damages,
income, rent, awards, or any interest therein whatsoever which may be paid or
made in connection with any Condemnation, and Tenant shall have no claim against
Landlord for the value of any unexpired term of this Lease or otherwise;
provided, however, that Tenant shall be entitled to receive any award separately
allocated by the condemning authority to Tenant for Tenant's relocation expenses
or the value of Tenant's Property (specifically excluding fixtures, Alterations
and other components of the Premises which under this Lease or by law are or at
the expiration of the Term will become the property of Landlord), provided that
such award does not reduce any award otherwise allocable or payable to Landlord.
23. ASSIGNMENT AND SUBLETTING
(a) Tenant shall not voluntarily or by operation of law, (1) mortgage,
pledge, hypothecate or encumber this Lease or any interest herein, (2) assign or
transfer this Lease or any interest herein, sublease the Premises or any part
thereof, or any right or privilege appurtenant thereto, or allow any other
person (the employees and invitees of Tenant excepted) to occupy or use the
Premises, or any portion thereof, without first obtaining the written consent of
Landlord, which consent shall not be withheld unreasonably provided that (i)
Tenant is not then in Default under this Lease nor is any event then occurring
which with the giving of notice or the passage of time, or both, would
constitute a Default hereunder, and (ii) Tenant has not previously assigned or
transferred this Lease or any interest herein or subleased the Premises or any
part thereof. When Tenant desires Landlord's consent to such assignment or
subletting, it shall notify Landlord of such request in writing (a "REQUEST
NOTICE") and shall provide to Landlord in the Request Notice the name and
address of the proposed assignee or subtenant and the nature and character of
the business of the proposed assignee or subtenant and shall provide current and
prior financial statements for the proposed assignee or subtenant prepared in
accordance
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with generally accepted accounting principles. Tenant shall also provide
Landlord with a copy of the proposed sublease or assignment agreement, including
all material terms and conditions thereof. Landlord shall have the option, to be
exercised within thirty (30) days of receipt of the foregoing, to (1) terminate
this Lease as of the commencement date stated in the proposed sublease or
assignment, (2) sublease or take an assignment, as the case may be, from Tenant
of the interest, or any portion thereof, in this Lease and/or the Premises that
Tenant proposes to assign or sublease, on the same terms and conditions as
stated in the proposed sublet or assignment agreement, (3) consent to the
proposed assignment or sublease, or (4) refuse its consent to the proposed
assignment or sublease, providing that such consent shall not be unreasonably
withheld so long as Tenant is not then in Default under this Lease nor is any
event then occurring which with the giving of notice or the passage of time, or
both, would constitute a Default hereunder. Notwithstanding the foregoing, in
the event Landlord elects to terminate this Lease or enter into a sublease or
assignment with Tenant as provided in the foregoing clauses (1) and (2),
respectively, then Tenant shall have ten (10) days to rescind its Request Notice
by delivery to Landlord of a notice of rescission (a "RESCISSION NOTICE"). If
Tenant fails to deliver a Rescission Notice to Landlord in a timely manner as
provided herein, then in addition to terminating this Lease or entering into a
sublease or assignment with Tenant, as the case may be, Landlord shall have the
additional right to negotiate directly with Tenant's proposed assignee or
subtenant and to enter into a direct lease or occupancy agreement with such
party on such terms as shall be acceptable to Landlord in its sole and absolute
discretion, and Tenant hereby waives any claims against Landlord related
thereto, including, without limitation, any claims for any compensation or
profit related to such lease or occupancy agreement.
(b) Without otherwise limiting the criteria upon which Landlord may
withhold its consent, Landlord shall be entitled to consider all reasonable
criteria including, but not limited to, the following: (1) whether or not the
proposed subtenant or assignee is engaged in a business which, and the use of
the Premises will be in an manner which, is in keeping with the then character
and nature of all other tenancies in the Project, (2) whether the use to be made
of the Premises by the proposed subtenant or assignee will conflict with any
so-called "exclusive" use then in favor of any other tenant of the Building or
the Project, and whether such use would be prohibited by any other portion of
this Lease, including, but not limited to, any rules and regulations then in
effect, or under applicable Laws, and whether such use imposes a greater load
upon the Premises and the Building and Project services then imposed by Tenant,
(3) the business reputation of the proposed individuals who will be managing and
operating the business operations of the assignee or subtenant, and the
long-term financial and competitive business prospects of the proposed assignee
or subtenant, and (4) the creditworthiness and financial stability of the
proposed assignee or subtenant in light of the responsibilities involved. In any
event, Landlord may withhold its consent to any assignment or sublease, if (i)
the actual use proposed to be conducted in the Premises or portion thereof
conflicts with the provisions of Paragraph 9(a) or (b)
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above or with any other lease which restricts the use to which any space in the
Building or the Project may be put, or (ii) the proposed assignment or sublease
requires alterations, improvements or additions to the Premises or portions
thereof.
(c) If Landlord approves an assignment or subletting as herein provided,
Tenant shall pay to Landlord, as Additional Rent, the difference, if any,
between (1) the Base Rent plus Additional Rent allocable to that part of the
Premises affected by such assignment or sublease pursuant to the provisions of
this Lease, and (2) the rent and any additional rent payable by the assignee or
sublessee to Tenant, less reasonable and customary market-based leasing
commissions and reasonable attorneys' fees, if any, incurred by Tenant in
connection with such assignment or sublease. The assignment or sublease
agreement, as the case may be, after approval by Landlord, shall not be amended
without Landlord's prior written consent, and shall contain a provision
directing the assignee or subtenant to pay the rent and other sums due
thereunder directly to Landlord upon receiving written notice from Landlord that
Tenant is in default under this Lease with respect to the payment of Rent. In
the event that, notwithstanding the giving of such notice, Tenant collects any
rent or other sums from the assignee or subtenant, then Tenant shall hold such
sums in trust for the benefit of Landlord and shall immediately forward the same
to Landlord. Landlord's collection of such rent and other sums shall not
constitute an acceptance by Landlord of attornment by such assignee or
subtenant. A consent to one assignment, subletting, occupation or use shall not
be deemed to be a consent to any other or subsequent assignment, subletting,
occupation or use, and consent to any assignment or subletting shall in no way
relieve Tenant of any liability under this Lease. Any assignment or subletting
without Landlord's consent shall be void, and shall, at the option of Landlord,
constitute a Default under this Lease.
(d) Notwithstanding any assignment or subletting, Tenant shall at all times
remain fully responsible and liable for the payment of the Rent and for
compliance with all of Tenant's other obligations under this Lease (regardless
of whether Landlord's approval has been obtained for any such assignment or
subletting).
(e) Tenant shall pay Landlord's reasonable fees (including, without
limitation, the fees of Landlord's counsel, not to exceed $1,500.00), incurred
in connection with Landlord's review and processing of documents regarding any
proposed assignment or sublease.
(f) Notwithstanding anything in this Lease to the contrary, in the event
Landlord consents to an assignment or subletting by Tenant in accordance with
the terms of this Paragraph 23, Tenant's assignee or subtenant shall have no
right to further assign this Lease or any interest therein or thereunder or to
further sublease all or any portion of the Premises. In furtherance of the
foregoing, Tenant acknowledges and agrees on behalf of itself and any assignee
or subtenant claiming under it (and any such assignee or subtenant by accepting
such assignment or
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sublease shall be deemed to acknowledge and agree) that no sub-subleases or
further assignments of this Lease shall be permitted at any time.
(g) Tenant acknowledges and agrees that the restrictions, conditions and
limitations imposed by this Paragraph 23 on Tenant's ability to assign or
transfer this Lease or any interest herein, to sublet the Premises or any part
thereof, to transfer or assign any right or privilege appurtenant to the
Premises, or to allow any other person to occupy or use the Premises or any
portion thereof, are, for the purposes of California Civil Code Section 1951.4,
as amended from time to time, and for all other purposes, reasonable at the time
that the Lease was entered into, and shall be deemed to be reasonable at the
time that Tenant seeks to assign or transfer this Lease or any interest herein,
to sublet the Premises or any part thereof, to transfer or assign any right or
privilege appurtenant to the Premises, or to allow any other person to occupy or
use the Premises or any portion thereof.
24. TENANT'S DEFAULT
The occurrence of any one of the following events shall constitute an event
of default on the part of Tenant ("DEFAULT"):
(a) The vacation or abandonment of the Premises by Tenant for a period of
ten (10) consecutive days or any vacation or abandonment of the Premises by
Tenant which would cause any insurance policy to be invalidated or otherwise
lapse, or the failure of Tenant to continuously operate Tenant's business in the
Premises, in each of the foregoing cases irrespective of whether or not Tenant
is then in monetary default under this Lease. Tenant agrees to notice and
service of notice as provided for in this Lease and waives any right to any
other or further notice or service of notice which Tenant may have under any
statute or law now or hereafter in effect;
(b) Failure to pay any installment of Rent or any other monies due and
payable hereunder, said failure continuing for a period of five (5) days after
the same is due;
(c) A general assignment by Tenant or any guarantor or surety of Tenant's
obligations hereunder (collectively, "GUARANTOR") for the benefit of creditors;
(d) The filing of a voluntary petition in bankruptcy by Tenant or any
Guarantor, the filing by Tenant or any Guarantor of a voluntary petition for an
arrangement, the filing by or against Tenant or any Guarantor of a petition,
voluntary or involuntary, for reorganization, or the filing of an involuntary
petition by the creditors of Tenant or any Guarantor, said involuntary petition
remaining undischarged for a period of sixty (60) days;
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(e) Receivership, attachment, or other judicial seizure of substantially
all of Tenant's assets on the Premises, such attachment or other seizure
remaining undismissed or undischarged for a period of sixty (60) days after the
levy thereof;
(f) Death or disability of Tenant or any Guarantor, if Tenant or such
Guarantor is a natural person, or the failure by Tenant or any Guarantor to
maintain its legal existence, if Tenant or such Guarantor is a corporation,
partnership, limited liability company, trust or other legal entity;
(g) Failure of Tenant to execute and deliver to Landlord any estoppel
certificate, subordination agreement, or lease amendment within the time periods
and in the manner required by Paragraphs 30 or 31 or 42;
(h) An assignment or sublease, or attempted assignment or sublease, of this
Lease or the Premises by Tenant contrary to the provision of Paragraph 23,
unless such assignment or sublease is expressly conditioned upon Tenant having
received Landlord's consent thereto;
(i) Failure of Tenant to restore the Letter of Credit to the amount and
within the time period provided in Paragraph 7, above;
(j) Failure in the performance of any of Tenant's covenants, agreements or
obligations hereunder (except those failures specified as events of Default in
subparagraphs (b), (l) or (m) above or any other subparagraphs of this Paragraph
24, which shall be governed by such other Paragraphs), which failure continues
for ten (10) days after written notice thereof from Landlord to Tenant, provided
that, if Tenant has exercised reasonable diligence to cure such failure and such
failure cannot be cured within such ten (10) day period despite reasonable
diligence, Tenant shall not be in default under this subparagraph so long as
Tenant thereafter diligently and continuously prosecutes the cure to completion
and actually completes such cure within thirty (30) days after the giving of the
aforesaid written notice;
(k) Chronic delinquency by Tenant in the payment of Rent, or any other
periodic payments required to be paid by Tenant under this Lease. "CHRONIC
DELINQUENCY" shall mean failure by Tenant to pay Rent, or any other payments
required to be paid by Tenant under this Lease within five (5) days after
written notice thereof for any three (3) months (consecutive or nonconsecutive)
during any period of twelve (12) months. In the event of a Chronic Delinquency,
in addition to Landlord's other remedies for Default provided in this Lease, at
Landlord's option, Landlord shall have the right to require that Rent be paid by
Tenant quarterly, in advance;
(l) Chronic overuse by Tenant or Tenant's Agents of the number of
undesignated parking spaces set forth in the Basic Lease Information. "CHRONIC
OVERUSE" shall mean use by Tenant or Tenant's Agents of a number of parking
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spaces greater than the number of parking spaces set forth in the Basic Lease
Information more than three (3) times during the Term after written notice by
Landlord;
(m) Any insurance required to be maintained by Tenant pursuant to this
Lease shall be canceled or terminated or shall expire or be reduced or
materially changed, except as permitted in this Lease; and
(n) Any failure by Tenant to discharge any lien or encumbrance placed on
the Project or any part thereof in violation of this Lease within ten (10) days
after the date such lien or encumbrance is filed or recorded against the Project
or any part thereof.
Tenant agrees that any notice given by Landlord pursuant to Paragraph
24(j), (k) or (l) above shall satisfy the requirements for notice under
California Code of Civil Procedure Section 1161, and Landlord shall not be
required to give any additional notice in order to be entitled to commence an
unlawful detainer proceeding.
25. LANDLORD'S REMEDIES
(a) TERMINATION. In the event of any Default by Tenant, then in addition to
any other remedies available to Landlord at law or in equity and under this
Lease, Landlord shall have the immediate option to terminate this Lease and all
rights of Tenant hereunder by giving written notice of such intention to
terminate. In the event that Landlord shall elect to so terminate this Lease
then Landlord may recover from Tenant:
(1) the worth at the time of award of any unpaid Rent and any other
sums due and payable which have been earned at the time of such termination;
plus
(2) the worth at the time of award of the amount by which the unpaid
Rent and any other sums due and payable which would have been earned after
termination until the time of award exceeds the amount of such rental loss
Tenant proves could have been reasonably avoided; plus
(3) the worth at the time of award of the amount by which the unpaid
Rent and any other sums due and payable for the balance of the term of this
Lease after the time of award exceeds the amount of such rental loss that Tenant
proves could be reasonably avoided; plus
(4) any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform its obligations
under this Lease or which in the ordinary course would be likely to result
therefrom, including, without limitation, (A) any costs or expenses incurred by
Landlord (1) in retaking possession of the Premises; (2) in maintaining,
repairing, preserving,
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restoring, replacing, cleaning, altering, remodeling or rehabilitating the
Premises or any affected portions of the Building or the Project, including such
actions undertaken in connection with the reletting or attempted reletting of
the Premises to a new tenant or tenants; (3) for leasing commissions,
advertising costs and other expenses of reletting the Premises; or (4) in
carrying the Premises, including taxes, insurance premiums, utilities and
security precautions; (B) any unearned brokerage commissions paid in connection
with this Lease; (C) reimbursement of any previously waived or abated Base Rent
or Additional Rent or any free rent or reduced rental rate granted hereunder;
and (D) any concession made or paid by Landlord to the benefit of Tenant in
consideration of this Lease including, but not limited to, any moving
allowances, contributions, payments or loans by Landlord for tenant improvements
or build-out allowances (including without limitation, any unamortized portion
of the Tenant Improvement Allowance (such Tenant Improvement Allowance to be
amortized over the Term in the manner reasonably determined by Landlord), if
any, and any outstanding balance (principal and accrued interest) of the Tenant
Improvement Loan, if any), or assumptions by Landlord of any of Tenant's
previous lease obligations; plus
(5) such reasonable attorneys' fees incurred by Landlord as a result
of a Default, and costs in the event suit is filed by Landlord to enforce such
remedy; and plus
(6) at Landlord's election, such other amounts in addition to or in
lieu of the foregoing as may be permitted from time to time by applicable law.
As used in subparagraphs (1) and (2) above, the "worth at the time of award" is
computed by allowing interest at an annual rate equal to twelve percent (12%)
per annum or the maximum rate permitted by law, whichever is less. As used in
subparagraph (3) above, the "worth at the time of award" is computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award, plus one percent (1%). Tenant waives redemption
or relief from forfeiture under California Code of Civil Procedure Sections 1174
and 1179, or under any other pertinent present or future Law, in the event
Tenant is evicted or Landlord takes possession of the Premises by reason of any
Default of Tenant hereunder.
(b) CONTINUATION OF LEASE. In the event of any Default by Tenant, then in
addition to any other remedies available to Landlord at law or in equity and
under this Lease, Landlord shall have the remedy described in California Civil
Code Section 1951.4 (Landlord may continue this Lease in effect after Tenant's
Default and abandonment and recover Rent as it becomes due, provided Tenant has
the right to sublet or assign, subject only to reasonable limitations). In
addition, Landlord shall not be liable in any way whatsoever for its failure or
refusal to relet the Premises. For purposes of this Paragraph 25(b), the
following acts by Landlord will not constitute the termination of Tenant's right
to possession of the Premises:
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(1) Acts of maintenance or preservation or efforts to relet the
Premises, including, but not limited to, alterations, remodeling, redecorating,
repairs, replacements and/or painting as Landlord shall consider advisable for
the purpose of reletting the Premises or any part thereof; or
(2) The appointment of a receiver upon the initiative of Landlord to
protect Landlord's interest under this Lease or in the Premises.
(c) RE-ENTRY. In the event of any Default by Tenant, Landlord shall also
have the right, with or without terminating this Lease, in compliance with
applicable law, to re-enter the Premises and remove all persons and property
from the Premises; such property may be removed and stored in a public warehouse
or elsewhere at the cost of and for the account of Tenant.
(d) RELETTING. In the event of the abandonment of the Premises by Tenant or
in the event that Landlord shall elect to re-enter as provided in Paragraph
25(c) or shall take possession of the Premises pursuant to legal proceeding or
pursuant to any notice provided by law, then if Landlord does not elect to
terminate this Lease as provided in ▇▇▇▇▇▇▇▇▇ ▇▇(▇), ▇▇▇▇▇▇▇▇ may from time to
time, without terminating this Lease, relet the Premises or any part thereof for
such term or terms and at such rental or rentals and upon such other terms and
conditions as Landlord in its sole discretion may deem advisable with the right
to make alterations and repairs to the Premises in Landlord's sole discretion.
In the event that Landlord shall elect to so relet, then rentals received by
Landlord from such reletting shall be applied in the following order: (1) to
reasonable attorneys' fees incurred by Landlord as a result of a Default and
costs in the event suit is filed by Landlord to enforce such remedies; (2) to
the payment of any indebtedness other than Rent due hereunder from Tenant to
Landlord; (3) to the payment of any costs of such reletting; (4) to the payment
of the costs of any alterations and repairs to the Premises; (5) to the payment
of Rent due and unpaid hereunder; and (6) the residue, if any, shall be held by
Landlord and applied in payment of future Rent and other sums payable by Tenant
hereunder as the same may become due and payable hereunder. Should that portion
of such rentals received from such reletting during any month, which is applied
to the payment of Rent hereunder, be less than the Rent payable during the month
by Tenant hereunder, then Tenant shall pay such deficiency to Landlord. Such
deficiency shall be calculated and paid monthly. Tenant shall also pay to
Landlord, as soon as ascertained, any costs and expenses incurred by Landlord in
such reletting or in making such alterations and repairs not covered by the
rentals received from such reletting.
(e) TERMINATION. No re-entry or taking of possession of the Premises by
Landlord pursuant to this Paragraph 25 shall be construed as an election to
terminate this Lease unless a written notice of such intention is given to
Tenant or unless the termination thereof is decreed by a court of competent
jurisdiction. Notwithstanding any reletting without termination by Landlord
because of any
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Default by Tenant, Landlord may at any time after such reletting elect to
terminate this Lease for any such Default.
(f) CUMULATIVE REMEDIES. The remedies herein provided are not exclusive and
Landlord shall have any and all other remedies provided herein or by law or in
equity.
(g) NO SURRENDER. No act or conduct of Landlord, whether consisting of the
acceptance of the keys to the Premises, or otherwise, shall be deemed to be or
constitute an acceptance of the surrender of the Premises by Tenant prior to the
expiration of the Term, and such acceptance by Landlord of surrender by Tenant
shall only flow from and must be evidenced by a written acknowledgment of
acceptance of surrender signed by Landlord. The surrender of this Lease by
Tenant, voluntarily or otherwise, shall not work a merger unless Landlord elects
in writing that such merger take place, but shall operate as an assignment to
Landlord of any and all existing subleases, or Landlord may, at its option,
elect in writing to treat such surrender as a merger terminating Tenant's estate
under this Lease, and thereupon Landlord may terminate any or all such subleases
by notifying the sublessee of its election so to do within five (5) days after
such surrender.
26. LANDLORD'S RIGHT TO PERFORM TENANT'S OBLIGATIONS
(a) Without limiting the rights and remedies of Landlord contained in
Paragraph 25 above, if Tenant shall be in Default in the performance of any of
the terms, provisions, covenants or conditions to be performed or complied with
by Tenant pursuant to this Lease, then Landlord may at Landlord's option,
without any obligation to do so, and without notice to Tenant perform any such
term, provision, covenant, or condition, or make any such payment and Landlord
by reason of so doing shall not be liable or responsible for any loss or damage
thereby sustained by Tenant or anyone holding under or through Tenant or any of
Tenant's Agents.
(b) Without limiting the rights of Landlord under Paragraph 26(a) above,
Landlord shall have the right at Landlord's option, without any obligation to
do so, to perform any of Tenant's covenants or obligations under this Lease
without notice to Tenant in the case of an emergency, as determined by Landlord
in its sole and absolute judgment, or if Landlord otherwise determines in its
sole discretion that such performance is necessary or desirable for the proper
management and operation of the Building or the Project or for the preservation
of the rights and interests or safety of other tenants of the Building or the
Project.
(c) If Landlord performs any of Tenant's obligations hereunder in
accordance with this Paragraph 26, the full amount of the cost and expense
incurred or the payment so made or the amount of the loss so sustained shall
immediately be owing by Tenant to Landlord, and Tenant shall promptly pay to
Landlord upon demand, as Additional Rent, the full amount thereof with interest
thereon from the
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date of payment by Landlord at the lower of (1) ten percent (10%) per annum, or
(2) the highest rate permitted by applicable law.
27. ATTORNEY'S FEES
(a) If either party hereto fails to perform any of its obligations under
this Lease or if any dispute arises between the parties hereto concerning the
meaning or interpretation of any provision of this Lease, then the defaulting
party or the party not prevailing in such dispute, as the case may be, shall pay
any and all costs and expenses incurred by the other party on account of such
default and/or in enforcing or establishing its rights hereunder, including,
without limitation, court costs and reasonable attorneys' fees and
disbursements. Any such attorneys' fees and other expenses incurred by either
party in enforcing a judgment in its favor under this Lease shall be recoverable
separately from and in addition to any other amount included in such judgment,
and such attorneys' fees obligation is intended to be severable from the other
provisions of this Lease and to survive and not be merged into any such
judgment.
(b) Without limiting the generality of Paragraph 26(a) above, if Landlord
utilizes the services of an attorney for the purpose of collecting any Rent due
and unpaid by Tenant or in connection with any other breach of this Lease by
Tenant, Tenant agrees to pay Landlord actual attorneys' fees as determined by
Landlord for such services, regardless of the fact that no legal action may be
commenced or filed by Landlord.
28. TAXES
Tenant shall be liable for and shall pay, prior to delinquency, all taxes
levied against Tenant's Property. If any Alteration installed by Tenant pursuant
to Paragraph 12 or any of Tenant's Property is assessed and taxed with the
Project or Building, Tenant shall pay such taxes to Landlord within ten (10)
days after delivery to Tenant of a statement therefor.
29. EFFECT OF CONVEYANCE
The term "LANDLORD" as used in this Lease means, from time to time, the
then current owner of the Building or the Project containing the Premises, so
that, in the event of any sale of the Building or the Project, Landlord shall be
and hereby is entirely freed and relieved of all covenants and obligations of
Landlord hereunder arising from and after the date of such sale, and it shall be
deemed and construed, without further agreement between the parties and the
purchaser at any such sale, that the purchaser of the Building or the Project
has assumed and agreed to carry out any and all covenants and obligations of
Landlord hereunder.
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30. TENANT'S ESTOPPEL CERTIFICATE
From time to time, upon written request of Landlord, Tenant shall execute,
acknowledge and deliver to Landlord or its designee, a written certificate
stating (a) the date this Lease was executed, the Commencement Date of the Term
and the date the Term expires; (b) the date Tenant entered into occupancy of the
Premises; (c) the amount of Rent and the date to which such Rent has been paid;
(d) that this Lease is in full force and effect and has not been assigned,
modified, supplemented or amended in any way (or, if assigned, modified,
supplemented or amended, specifying the date and terms of any agreement so
affecting this Lease); (e) that this Lease represents the entire agreement
between the parties with respect to Tenant's right to use and occupy the
Premises (or specifying such other agreements, if any); (f) that all obligations
under this Lease to be performed by Landlord as of the date of such certificate
have been satisfied (or specifying those as to which Tenant claims that Landlord
has yet to perform); (g) that all required contributions by Landlord to Tenant
on account of Tenant's improvements have been received (or stating exceptions
thereto); (h) that on such date there exist no defenses or offsets that Tenant
has against the enforcement of this Lease by Landlord (or stating exceptions
thereto); (i) that no Rent or other sum payable by Tenant hereunder has been
paid more than one (1) month in advance (or stating exceptions thereto); (j)
that security has been deposited with Landlord, stating the original amount
thereof and any increases thereto; and (k) any other factual matters evidencing
the status of this Lease that may be required either by a lender making a loan
to Landlord to be secured by a deed of trust covering the Building or the
Project or by a purchaser of the Building or the Project. Any such certificate
delivered pursuant to this Paragraph 30 may be relied upon by a prospective
purchaser of Landlord's interest or a mortgagee of Landlord's interest or
assignee of any mortgage upon Landlord's interest in the Premises. If Tenant
shall fail to provide such certificate within fifteen (15) days of receipt by
Tenant of a written request by Landlord as herein provided, such failure shall,
at Landlord's election, constitute a Default under this Lease, and Tenant shall
be deemed to have given such certificate as above provided without modification
and shall be deemed to have admitted the accuracy of any information supplied by
Landlord to a prospective purchaser or mortgagee.
31. SUBORDINATION
Landlord shall have the right to cause this Lease to be and remain subject
and subordinate to any and all mortgages, deeds of trust and ground leases, if
any ("ENCUMBRANCES") that are now or may hereafter be executed covering the
Premises, or any renewals, modifications, consolidations, replacements or
extensions thereof, for the full amount of all advances made or to be made
thereunder and without regard to the time or character of such advances,
together with interest thereon and subject to all the terms and provisions
thereof; provided only, that in the event of termination of any such ground
lease or upon the foreclosure of any such mortgage or deed of trust, so long as
Tenant is not in default, the holder thereof ("HOLDER")
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shall agree to recognize Tenant's rights under this Lease as long as Tenant
shall pay the Rent and observe and perform all the provisions of this Lease to
be observed and performed by Tenant. Within ten (10) days after Landlord's
written request, Tenant shall execute, acknowledge and deliver any and all
reasonable documents required by Landlord or the Holder to effectuate such
subordination, provided that such documents provide for the nondisturbance of
Tenant's rights as set forth in the preceding sentence. If Tenant fails to do
so, such failure shall constitute a Default by Tenant under this Lease.
Notwithstanding anything to the contrary set forth in this Paragraph 31, Tenant
hereby attorns and agrees to attorn to any person or entity purchasing or
otherwise acquiring the Premises at any sale or other proceeding or pursuant to
the exercise of any other rights, powers or remedies under such Encumbrance.
32. ENVIRONMENTAL COVENANTS
(a) Prior to executing this Lease, Tenant has completed, executed and
delivered to Landlord a Hazardous Materials Disclosure Certificate ("INITIAL
DISCLOSURE CERTIFICATE"), a fully completed copy of which is attached hereto as
EXHIBIT D and incorporated herein by this reference. Tenant covenants,
represents and warrants to Landlord that the information on the Initial
Disclosure Certificate is true and correct and accurately describes the
Hazardous Materials which will be manufactured, treated, used or stored on or
about the Premises by Tenant or Tenant's Agents. Tenant shall, on each
anniversary of the Commencement Date and at such other times as Tenant desires
to manufacture, treat, use or store on or about the Premises new or additional
Hazardous Materials which were not listed on the Initial Disclosure Certificate,
complete, execute and deliver to Landlord an updated Disclosure Certificate
(each, an "UPDATED DISCLOSURE CERTIFICATE") describing Tenant's then current and
proposed future uses of Hazardous Materials on or about the Premises, which
Updated Disclosure Certificates shall be in the same format as that which is set
forth in EXHIBIT D or in such updated format as Landlord may require from time
to time. Tenant shall deliver an Updated Disclosure Certificate to Landlord not
less than thirty (30) days prior to the date Tenant intends to commence the
manufacture, treatment, use or storage of new or additional Hazardous Materials
on or about the Premises, and Landlord shall have the right to approve or
disapprove such new or additional Hazardous Materials in its sole and absolute
discretion. Tenant shall make no use of Hazardous Materials on or about the
Premises except as described in the Initial Disclosure Certificate or as
otherwise approved by Landlord in writing in accordance with this Paragraph
32(a).
(b) As used in this Lease, the term "HAZARDOUS MATERIALS" shall mean and
include any substance that is or contains (1) any "hazardous substance" as now
or hereafter defined in Section 101(14) of the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended ("CERCLA") (42
U.S.C. Section 9601 et seq.) or any regulations promulgated under CERCLA; (2)
any "hazardous waste" as now or hereafter defined in the Resource Conservation
and Recovery Act, as amended ("RCRA") (42 U.S.C. Section 6901 et seq.) or any
regulations
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promulgated under RCRA; (3) any substance now or hereafter regulated by the
Toxic Substances Control Act, as amended ("TSCA") (15 U.S.C. Section 2601 et
seq.) or any regulations promulgated under TSCA; (4) petroleum, petroleum
by-products, gasoline, diesel fuel, or other petroleum hydrocarbons; (5)
asbestos and asbestos-containing material, in any form, whether friable or
non-friable; (6) polychlorinated biphenyls; (7) lead and lead-containing
materials; or (8) any additional substance, material or waste (A) the presence
of which on or about the Premises (i) requires reporting, investigation or
remediation under any Environmental Laws (as hereinafter defined), (ii) causes
or threatens to cause a nuisance on the Premises or any adjacent area or
property or poses or threatens to pose a hazard to the health or safety of
persons on the Premises or any adjacent area or property, or (iii) which, if it
emanated or migrated from the Premises, could constitute a trespass, or (B)
which is now or is hereafter classified or considered to be hazardous or toxic
under any Environmental Laws.
(c) As used in this Lease, the term "ENVIRONMENTAL LAWS" shall mean and
include (1) CERCLA, RCRA and TSCA; and (2) any other federal, state or local
laws, ordinances, statutes, codes, rules, regulations, orders or decrees now or
hereinafter in effect relating to (A) pollution, (B) the protection or
regulation of human health, natural resources or the environment, (C) the
treatment, storage or disposal of Hazardous Materials, or (D) the emission,
discharge, release or threatened release of Hazardous Materials into the
environment.
(d) Tenant agrees that during its use and occupancy of the Premises it will
(1) not (A) permit Hazardous Materials to be present on or about the Premises
except in a manner and quantity necessary for the ordinary performance of
Tenant's business or (B) release, discharge or dispose of any Hazardous
Materials on, in, at, under, or emanating from, the Premises, the Building or
the Project; provided, however, that Tenant shall have the right to use and
dispose of de minimis amounts of cleaning materials, toner fluids and other
office and janitorial supplies, provided that the same are necessary for the
conduct of Tenant's business operations in the Premises and are used and
disposed of at all times in full compliance with all Environmental Laws; (2)
comply with all Environmental Laws relating to the Premises and the use of
Hazardous Materials on or about the Premises and not engage in or permit others
to engage in any activity at the Premises in violation of any Environmental
Laws; and (3) immediately notify Landlord of (A) any inquiry, test,
investigation or enforcement proceeding by any governmental agency or authority
against Tenant, Landlord or the Premises, Building or Project relating to any
Hazardous Materials or under any Environmental Laws or (B) the occurrence of any
event or existence of any condition that would cause a breach of any of the
covenants set forth in this Paragraph 32.
(e) If Tenant's use of Hazardous Materials on or about the Premises results
in a release, discharge or disposal of Hazardous Materials on, in, at, under, or
emanating from, the Premises, the Building or the Project, Tenant agrees to
investigate, clean up, remove or remediate such Hazardous Materials in full
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compliance with (1) the requirements of (A) all Environmental Laws and (B) any
governmental agency or authority responsible for the enforcement of any
Environmental Laws; and (2) any additional requirements of Landlord that are
reasonably necessary to protect the value of the Premises, the Building or the
Project.
(f) Upon reasonable notice to Tenant, Landlord may inspect the Premises and
surrounding areas for the purpose of determining whether there exists on or
about the Premises any Hazardous Material or other condition or activity that is
in violation of the requirements of this Lease or of any Environmental Laws.
Such inspections may include, but are not limited to, entering the Premises or
adjacent property with drill rigs or other machinery for the purpose of
obtaining laboratory samples. Landlord shall not be limited in the number of
such inspections during the Term of this Lease. In the event (1) such
inspections reveal the presence of any such Hazardous Material or other
condition or activity in violation of the requirements of this Lease or of any
Environmental Laws, or (2) Tenant or its Agents contribute or knowingly consent
to the presence of any Hazardous Materials in, on, under, through or about the
Premises, the Building or the Project or exacerbate the condition of or the
conditions caused by any Hazardous Materials in, on, under, through or about the
Premises, the Building or the Project, Tenant shall reimburse Landlord for the
cost of such inspections within ten (10) days of receipt of a written statement
therefor. Tenant will supply to Landlord such historical and operational
information regarding the Premises and surrounding areas as may be reasonably
requested to facilitate any such inspection and will make available for meetings
appropriate personnel having knowledge of such matters. Tenant agrees to give
Landlord at least sixty (60) days' prior notice of its intention to vacate the
Premises so that Landlord will have an opportunity to perform such an inspection
prior to such vacation. The right granted to Landlord herein to perform
inspections shall not create a duty on Landlord's part to inspect the Premises,
or liability on the part of Landlord for Tenant's use, storage, treatment or
disposal of Hazardous Materials, it being understood that Tenant shall be solely
responsible for all liability in connection therewith.
(g) Landlord shall have the right, but not the obligation, prior or
subsequent to a Default, without in any way limiting Landlord's other rights and
remedies under this Lease, to enter upon the Premises, or to take such other
actions as it deems necessary or advisable, to investigate, clean up, remove or
remediate any Hazardous Materials or contamination by Hazardous Materials
present on, in, at, under, or emanating from, the Premises, the Building or the
Project in violation of Tenant's obligations under this Lease or under any
Environmental Laws. Notwithstanding any other provision of this Lease, Landlord
shall also have the right, at its election, in its own name or as Tenant's
agent, to negotiate, defend, approve and appeal, at Tenant's expense, any action
taken or order issued by any governmental agency or authority with regard to any
such Hazardous Materials or contamination by Hazardous Materials. All costs and
expenses paid or incurred by
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Landlord in the exercise of the rights set forth in this Paragraph 32 shall be
payable by Tenant upon demand.
(h) Tenant shall surrender the Premises to Landlord upon the expiration or
earlier termination of this Lease free of debris, waste or Hazardous Materials
placed on, about or near the Premises by Tenant or Tenant's Agents and in a
condition which complies with all Environmental Laws and any additional
requirements of Landlord that are reasonably necessary to protect the value of
the Premises, the Building or the Project, including, without limitation, the
obtaining of any closure permits or other governmental permits or approvals
related to Tenant's use of Hazardous Materials in or about the Premises.
Tenant's obligations and liabilities pursuant to the provisions of this
Paragraph 32 shall survive the expiration or earlier termination of this Lease.
If it is determined by Landlord that the condition of all or any portion of the
Premises, the Building, and/or the Project is not in compliance with the
provisions of this Lease with respect to Hazardous Materials, including, without
limitation, all Environmental Laws, at the expiration or earlier termination of
this Lease, then at Landlord's sole option, Landlord may require Tenant to hold
over possession of the Premises until Tenant can surrender the Premises to
Landlord in the condition in which the Premises existed as of the Commencement
Date and prior to the appearance of such Hazardous Materials except for normal
wear and tear, including, without limitation, the conduct or performance of any
closures as required by any Environmental Laws. The burden of proof hereunder
shall be upon Tenant. For purposes hereof, the term "normal wear and tear" shall
not include any deterioration in the condition or diminution of the value of any
portion of the Premises, the Building, and/or the Project in any manner
whatsoever related to directly, or indirectly, Hazardous Materials. Any such
holdover by Tenant will be with Landlord's consent, will not be terminable by
Tenant in any event or circumstance and will otherwise be subject to the
provisions of Paragraph 35 of this Lease.
(i) Tenant agrees to indemnify and hold harmless Landlord from and against
any and all claims, losses (including, without limitation, loss in value of the
Premises, the Building or the Project, liabilities and expenses (including
attorney's fees)) sustained by Landlord attributable to (1) any Hazardous
Materials placed on or about the Premises, the Building or the Project by Tenant
or Tenant's Agents, or (2) Tenant's breach of any provision of this Paragraph
32.
(j) The provisions of this Paragraph 32 shall survive the expiration or
earlier termination of this Lease.
33. NOTICES
All notices and demands which are required or may be permitted to be given
to either party by the other hereunder shall be in writing and shall be sent by
United States mail, postage prepaid, certified, or by personal delivery or
overnight courier, addressed to the addressee at Tenant's Address or Landlord's
Address as specified
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in the Basic Lease Information, or to such other place as either party may from
time to time designate in a notice to the other party given as provided herein.
Copies of all notices and demands given to Landlord shall additionally be sent
to Landlord's property manager at the address specified in the Basic Lease
Information or at such other address as Landlord may specify in writing from
time to time. Notice shall be deemed given upon actual receipt (or attempted
delivery if delivery is refused ), if personally delivered, or one (1) business
day following deposit with a reputable overnight courier that provides a
receipt, or on the third (3rd) day following deposit in the United States mail
in the manner described above.
34. WAIVER
The waiver of any breach of any term, covenant or condition of this Lease
shall not be deemed to be a waiver of such term, covenant or condition or of any
subsequent breach of the same or any other term, covenant or condition herein
contained. The subsequent acceptance of Rent by Landlord shall not be deemed to
be a waiver of any preceding breach by Tenant, other than the failure of Tenant
to pay the particular rental so accepted, regardless of Landlord's knowledge of
such preceding breach at the time of acceptance of such Rent. No delay or
omission in the exercise of any right or remedy of Landlord in regard to any
Default by Tenant shall impair such a right or remedy or be construed as a
waiver. Any waiver by Landlord of any Default must be in writing and shall not
be a waiver of any other Default concerning the same or any other provisions of
this Lease.
35. HOLDING OVER
Any holding over after the expiration of the Term, without the express
written consent of Landlord, shall constitute a Default and, without limiting
Landlord's remedies provided in this Lease, such holding over shall be construed
to be a tenancy at sufferance, at a rental rate of one hundred fifty percent
(150%) of the Base Rent last due in this Lease, plus Additional Rent, and shall
otherwise be on the terms and conditions herein specified, so far as applicable;
provided, however, in no event shall any renewal or expansion option or other
similar right or option contained in this Lease be deemed applicable to any such
tenancy at sufferance. If the Premises are not surrendered at the end of the
Term or sooner termination of this Lease, and in accordance with the provisions
of Paragraphs 11 and 32(h), Tenant shall indemnify, defend and hold Landlord
harmless from and against any and all loss or liability resulting from delay by
Tenant in so surrendering the Premises including, without limitation, any loss
or liability resulting from any claim against Landlord made by any succeeding
tenant or prospective tenant founded on or resulting from such delay and losses
to Landlord due to lost opportunities to lease any portion of the Premises to
any such succeeding tenant or prospective tenant, together with, in each case,
actual attorneys' fees and costs.
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36. SUCCESSORS AND ASSIGNS
The terms, covenants and conditions of this Lease shall, subject to the
provisions as to assignment, apply to and bind the heirs, successors, executors,
administrators and assigns of all of the parties hereto. If Tenant shall consist
of more than one entity or person, the obligations of Tenant under this Lease
shall be joint and several.
37. TIME
Time is of the essence of this Lease and each and every term, condition and
provision herein.
38. BROKERS
Landlord and Tenant each represents and warrants to the other that neither
it nor its officers or agents nor anyone acting on its behalf has dealt with any
real estate broker except the Broker(s) specified in the Basic Lease Information
in the negotiating or making of this Lease, and each party agrees to indemnify
and hold harmless the other from any claim or claims, and costs and expenses,
including attorneys' fees, incurred by the indemnified party in conjunction with
any such claim or claims of any other broker or brokers to a commission in
connection with this Lease as a result of the actions of the indemnifying party.
39. LIMITATION OF LIABILITY
Tenant agrees that, in the event of any default or breach by Landlord with
respect to any of the terms of the Lease to be observed and performed by
Landlord (1) Tenant shall look solely to the then-current landlord's interest in
the Building for the satisfaction of Tenant's remedies for the collection of a
judgment (or other judicial process) requiring the payment of money by Landlord;
(2) no other property or assets of Landlord, its partners, shareholders,
officers, directors, employees, investment advisors, or any successor in
interest of any of them (collectively, the "LANDLORD PARTIES") shall be subject
to levy, execution or other enforcement procedure for the satisfaction of
Tenant's remedies; (3) no personal liability shall at any time be asserted or
enforceable against the Landlord Parties; and (4) no judgment will be taken
against the Landlord Parties. The provisions of this section shall apply only to
the Landlord and the parties herein described, and shall not be for the benefit
of any insurer nor any other third party.
40. FINANCIAL STATEMENTS
Within fifteen (15) days after Landlord's request, Tenant shall deliver to
Landlord the then current financial statements of Tenant (including interim
periods following the end of the last fiscal year for which annual statements
are available), prepared or compiled by a certified public accountant, including
a balance sheet
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and profit and loss statement for the most recent prior year, all prepared in
accordance with generally accepted accounting principles consistently applied.
Landlord shall keep Tenant's financial statements confidential, except that
Landlord shall have the right to disclose such statements to prospective
purchasers and lenders and to Landlord's partners, property managers,
consultants and advisors, including accountants and attorneys, and otherwise as
required by law or legal process.
41. RULES AND REGULATIONS
Tenant agrees to comply with such reasonable rules and regulations as
Landlord may adopt from time to time for the orderly and proper operation of the
Building and the Project. Such rules may include, but shall not be limited, to
restrictions on the location of employee parking. The then current rules and
regulations shall be binding upon Tenant upon delivery of a copy of them to
Tenant. Landlord shall not be responsible to Tenant for the failure of any other
person to observe and abide by any of said rules and regulations. Landlord's
current rules and regulations are attached to this Lease as EXHIBIT C.
42. MORTGAGEE PROTECTION
(a) MODIFICATIONS FOR LENDER. If, in connection with obtaining financing
for the Project or any portion thereof, Landlord's lender shall request
reasonable modifications to this Lease as a condition to such financing, Tenant
shall not unreasonably withhold, delay or defer its consent to such
modifications, provided such modifications do not materially adversely affect
Tenant's rights or increase Tenant's obligations under this Lease.
(b) RIGHTS TO CURE. Tenant agrees to give to any trust deed or mortgage
holder ("HOLDER") of whom Tenant has received notice from Landlord, by
registered mail, at the same time as it is given to Landlord, a copy of any
notice of default given to Landlord, provided that prior to such notice Tenant
has been notified, in writing, (by way of notice of assignment of rents and
leases, or otherwise) of the address of such Holder. Tenant further agrees that
if Landlord shall have failed to cure such default within the time provided for
in this Lease, then the Holder shall have an additional twenty (20) days after
expiration of such period, or after receipt of such notice from Tenant (if such
notice to the Holder is required by this Paragraph 42(b)), whichever shall last
occur within which to cure such default or if such default cannot be cured
within that time, then such additional time as may be necessary if within such
twenty (20) days, any Holder has commenced and is diligently pursuing the
remedies necessary to cure such default (including but not limited to
commencement of foreclosure proceedings, if necessary to effect such cure), in
which event this Lease shall not be terminated.
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43. ENTIRE AGREEMENT
This Lease, including the Exhibits and any Addenda attached hereto, which
are hereby incorporated herein by this reference, contains the entire agreement
of the parties hereto, and no representations, inducements, promises or
agreements, oral or otherwise, between the parties, not embodied herein or
therein, shall be of any force and effect.
44. SUBSTITUTED PREMISES
Landlord shall have the right at any time, upon giving Tenant not less than
thirty (30) days' notice in writing, to provide and furnish Tenant with space
elsewhere in the Project of approximately the same size as the Premises and to
place Tenant in such space, without any increase in Tenant's Base Rent or
Proportionate Share(s) hereunder. In the event of any such relocation of Tenant,
Landlord shall pay for Tenant's reasonable moving costs and the cost of
replacing Tenant's Alterations. Should Tenant refuse to permit Landlord to move
Tenant to such new space by the end of such thirty (30) day period, Tenant shall
be in Default hereunder without further notice or opportunity to cure and
Landlord in such event shall have all rights and remedies provided herein, at
law and in equity, including, without limitation, the right to forthwith cancel
and terminate this Lease. If Landlord moves Tenant to such new space, this Lease
and each and all of its terms, covenants and conditions shall remain in full
force and effect and be deemed applicable to such new space, and such new space
shall thereafter be deemed to be the "PREMISES".
45. INTEREST
Any installment of Rent and any other sum due from Tenant under this Lease
which is not received by Landlord within ten (10) days from when the same is due
shall bear interest from the date such payment was originally due under this
Lease until paid at an annual rate equal to the maximum rate of interest
permitted by law. Payment of such interest shall not excuse or cure any Default
by Tenant. In addition, Tenant shall pay all costs and attorneys' fees incurred
by Landlord in collection of such amounts.
46. CONSTRUCTION
This Lease shall be construed and interpreted in accordance with the laws
of the State of California. The parties acknowledge and agree that no rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall be employed in the interpretation of this Lease, including
the Exhibits and any Addenda attached hereto. All captions in this Lease are for
reference only and shall not be used in the interpretation of this Lease.
Whenever required by the context of this Lease, the singular shall include the
plural, the masculine shall include the feminine, and vice versa. If any
provision of this Lease
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shall be determined to be illegal or unenforceable, such determination shall not
affect any other provision of this Lease and all such other provisions shall
remain in full force and effect.
47. REPRESENTATIONS AND WARRANTIES OF TENANT
Tenant hereby makes the following representations and warranties, each of
which is material and being relied upon by Landlord, is true in all respects as
of the date of this Lease, and shall survive the expiration or termination of
the Lease.
(a) If Tenant is an entity, Tenant is duly organized, validly existing and
in good standing under the laws of the state of its organization and the persons
executing this Lease on behalf of Tenant have the full right and authority to
execute this Lease on behalf of Tenant and to bind Tenant without the consent or
approval of any other person or entity. Tenant has full power, capacity,
authority and legal right to execute and deliver this Lease and to perform all
of its obligations hereunder. This Lease is a legal, valid and binding
obligation of Tenant, enforceable in accordance with its terms.
(b) Tenant has not (1) made a general assignment for the benefit of
creditors, (2) filed any voluntary petition in bankruptcy or suffered the filing
of an involuntary petition by any creditors, (3) suffered the appointment of a
receiver to take possession of all or substantially all of its assets, (4)
suffered the attachment or other judicial seizure of all or substantially all of
its assets, (5) admitted in writing its inability to pay its debts as they come
due, or (6) made an offer of settlement, extension or composition to its
creditors generally.
48. SECURITY
(a) Tenant acknowledges and agrees that, while Landlord may engage security
personnel to patrol the Building or the Project, Landlord is not providing any
security services with respect to the Premises, the Building or the Project and
that Landlord shall not be liable to Tenant for, and Tenant waives any claim
against Landlord with respect to, any loss by theft or any other damage suffered
or incurred by Tenant in connection with any unauthorized entry into the
Premises or any other breach of security with respect to the Premises, the
Building or the Project.
(b) Tenant hereby agrees to the exercise by Landlord and Landlord's Agents,
within their sole discretion, of such security measures as, but not limited to,
the evacuation of the Premises, the Building or the Project for cause, suspected
cause or for drill purposes, the denial of any access to the Premises, the
Building or the Project and other similarly related actions that it deems
necessary to prevent any threat of property damage or bodily injury. The
exercise of such security measures by Landlord and Landlord's Agents, and the
resulting interruption of service and cessation of Tenant's business, if any,
shall not be deemed an eviction or disturbance of Tenant's use and possession of
the Premises, or any part thereof, or
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render Landlord or Landlord's Agents liable to Tenant for any resulting damages
or relieve Tenant from Tenant's obligations under this Lease.
49. JURY TRIAL WAIVER
Tenant hereby waives any right to trial by jury with respect to any action
or proceeding (i) brought by Landlord, Tenant or any other party, relating to
(A) this Lease and/or any understandings or prior dealings between the parties
hereto, or (B) the Premises, the Building or the Project or any part thereof, or
(ii) to which Landlord is a party. Tenant hereby agrees that this Lease
constitutes a written consent to waiver of trial by jury pursuant to the
provisions of California Code of Civil Procedure Section 631, and Tenant does
hereby constitute and appoint Landlord its true and lawful attorney-in-fact,
which appointment is coupled with an interest, and Tenant does hereby authorize
and empower Landlord, in the name, place and stead of Tenant, to file this Lease
with the clerk or judge of any court of competent jurisdiction as a statutory
written consent to waiver of trial by jury.
Landlord and Tenant have executed and delivered this Lease as of the Lease
Date specified in the Basic Lease Information.
LANDLORD: TENANT:
HARBOR INVESTMENT PARTNERS, COMBICHEM, INC.,
a California general partnership a California corporation
By: Aetna Life Insurance Company,
a Connecticut corporation,
General Partner By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------
Print Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------
By: Allegis Realty Investors LLC, Its: Vice President Finance/
Its Investment Advisor --------------------------
and Agent Administration
--------------------------
By:
---------------------------
Print Name:
-------------------
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Its:
--------------------------- --------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President
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EXHIBIT A
DIAGRAM OF THE PREMISES
A-1
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EXHIBIT B
COMMENCEMENT AND EXPIRATION DATE MEMORANDUM
LANDLORD: HARBOR INVESTMENT PARTNERS
TENANT: COMBICHEM, INC.
LEASE DATE: October 6, 1997
PREMISES: Located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Tenant hereby accepts the Premises as being in the condition required under
the Lease, with all Tenant Improvements completed (except for minor punchlist
items which Landlord agrees to complete).
The Commencement Date of the Lease is hereby established
as____________________, 1997 and the Expiration Date is___________________,
_____.
TENANT: COMBICHEM, INC.,
a California corporation
By: ____________________________________
Print Name: ____________________________
Its: ___________________________________
B-1
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Approved and Agreed:
LANDLORD:
HARBOR INVESTMENT PARTNERS,
a California general partnership
By: Aetna Life Insurance Company,
a Connecticut corporation,
General Partner
By: Allegis Realty Investors LLC,
Its Investment Advisor
and Agent
By:_________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President
B-2
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EXHIBIT C
RULES AND REGULATIONS
This exhibit, entitled "Rules and Regulations," is and shall constitute
EXHIBIT C to the Lease Agreement, dated as of the Lease Date, by and between
landlord and Tenant for the Premises. The terms and conditions of this EXHIBIT C
are hereby incorporated into and are made a part of the Lease. Capitalized terms
used, but not otherwise defined, in this EXHIBIT C have the meanings ascribed to
such terms in the Lease.
1. Tenant shall not use any method of heating or air conditioning other
than that supplied by Landlord without the consent of Landlord.
2. All window coverings installed by Tenant and visible from the outside of
the building require the prior written approval of Landlord.
3. Tenant shall not use, keep or permit to be used or kept any foul or
noxious gas or substance or any flammable or combustible materials on or around
the Premises, except to the extent that Tenant is permitted to use the same
under the terms of Paragraph 33 of the Lease.
4. Tenant shall not alter any lock or install any new locks or bolts on any
door at the Premises without the prior consent of Landlord.
5. Tenant shall not make any duplicate keys without the prior consent of
Landlord.
6. Tenant shall park motor vehicles in parking areas designated by Landlord
except for loading and unloading. During those periods of loading and unloading,
Tenant shall not unreasonably interfere with traffic flow around the Building or
the Project and loading and unloading areas of other tenants. Tenant shall not
park motor vehicles in designated parking areas after the conclusion of normal
daily business activity.
7. Tenant shall not disturb, solicit or canvas any tenant or other occupant
of the Building or Project and shall cooperate to prevent same.
8. No person shall go on the roof without Landlord's permission.
9. Business machines and mechanical equipment belonging to Tenant which
cause noise or vibration that may be transmitted to the structure of the
Building, to such a degree as to be objectionable to Landlord or other tenants,
shall be placed and maintained by Tenant, at Tenant's expense, on vibration
eliminators or in noise-dampening housing or other devices sufficient to
eliminate noise or vibration.
C-1
60
10. All goods, including material used to store goods, delivered to the
Premises of Tenant shall be immediately moved into the Premises and shall not be
left in parking or receiving areas overnight.
11. Tractor trailers which must be unhooked or parked with dolly wheels
beyond the concrete loading areas must use steel plates or wood blocks under the
dolly wheels to prevent damage to the asphalt paving surfaces. No parking or
storing of such trailers will be permitted in the auto parking areas of the
Project or on streets adjacent thereto.
12. Forklifts which operate on asphalt paving areas shall not have solid
rubber tires and shall only use tires that do not damage the asphalt.
13. Tenant is responsible for the storage and removal of all trash and
refuse. All such trash and refuse shall be contained in suitable receptacles
stored behind screened enclosures at locations approved by Landlord.
14. Tenant shall not store or permit the storage or placement of goods or
merchandise in or around the common areas surrounding the Premises. No displays
or sales of merchandise shall be allowed in the parking lots or other common
areas.
15. Tenant shall not permit any animals, including but not limited to, any
household pets, to be brought or kept in or about the Premises, the Building,
the Project or any of the common areas.
INITIALS:
TENANT:______________
LANDLORD:____________
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EXHIBIT D
HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE
Your cooperation in this matter is appreciated. Initially, the information
provided by you in this Hazardous Materials Disclosure Certificate is necessary
for the Landlord to evaluate your proposed uses of the premises (the "PREMISES")
and to determine whether to enter into a lease agreement with you as tenant. If
a lease agreement is signed by you and the Landlord (the "LEASE AGREEMENT"), on
an annual basis in accordance with the provisions of Paragraph 33 of the Lease
Agreement, you are to provide an update to the information initially provided by
you in this certificate. Any questions regarding this certificate should be
directed to, and when completed, the certificate should be delivered to:
Landlord: Harbor Investment Partners
c/o Allegis Realty Investors LLC
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Name of (Prospective) Tenant: CombiChem, Inc.
Mailing Address: __________________________________________________________
___________________________________________________________________________
Contact Person, Title and Telephone Number(s): ____________________________
Contact Person for Hazardous Waste Materials Management and Manifests and
Telephone Number(s):_______________________________________________________
___________________________________________________________________________
Address of (Prospective) Premises: ________________________________________
___________________________________________________________________________
Length of (Prospective) initial Term: _____________________________________
___________________________________________________________________________
D-1
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1. GENERAL INFORMATION:
Describe the proposed operations to take place in, on, or about the
Premises, including, without limitation, principal products processed,
manufactured or assembled, and services and activities to be provided or
otherwise conducted. Existing tenants should describe any proposed
changes to on-going operations.
2. USE, STORAGE AND DISPOSAL OF HAZARDOUS MATERIALS
2.1 Will any Hazardous Materials (as hereinafter defined) be used,
generated, treated, stored or disposed of in, on or about the
Premises? Existing tenants should describe any Hazardous
Materials which continue to be used, generated, treated, stored
or disposed of in, on or about the Premises.
Wastes Yes [ ] No [ ]
Chemical Products Yes [ ] No [ ]
Other Yes [ ] No [ ]
If Yes is marked, please explain: _______________________________
_________________________________________________________________
_________________________________________________________________
2.2 If Yes is marked in Section 2.1, attach a list of any Hazardous
Materials to be used, generated, treated, stored or disposed of
in, on or about the Premises, including the applicable hazard
class and an estimate of the quantities of such Hazardous
Materials to be present on or about the Premises at any given
time; estimated annual throughput; the proposed location(s) and
method of storage (excluding nominal amounts of ordinary
household cleaners and janitorial supplies which are not
regulated by any Environmental Laws, as hereinafter defined); and
the proposed location(s) and method(s) of treatment or disposal
for each Hazardous Material, including, the estimated frequency,
and the proposed contractors or subcontractors. Existing tenants
should attach a list setting forth the information requested
above and such list should include actual data from on-going
operations and the identification of any variations in such
information from the prior year's certificate.
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3. STORAGE TANKS AND SUMPS
3.1 Is any above or below ground storage or treatment of gasoline,
diesel, petroleum, or other Hazardous Materials in tanks or sumps
proposed in, on or about the Premises? Existing tenants should
describe any such actual or proposed activities.
Yes [ ] No [ ]
If yes, please explain: _________________________________________
_________________________________________________________________
_________________________________________________________________
4. WASTE MANAGEMENT
4.1 Has your company been issued an EPA Hazardous Waste Generator
I.D. Number? Existing tenants should describe any additional
identification numbers issued since the previous certificate.
Yes [ ] No [ ]
4.2 Has your company filed a biennial or quarterly reports as a
hazardous waste generator? Existing tenants should describe any
new reports filed.
Yes [ ] No [ ]
If yes, attach a copy of the most recent report filed.
5. WASTEWATER TREATMENT AND DISCHARGE
5.1 Will your company discharge wastewater or other wastes to:
_____ storm drain? _____ sewer?
_____ surface water? _____ no wastewater or other wastes discharged.
Existing tenants should indicate any actual discharges. If so,
describe the nature of any proposed or actual discharge(s).
_________________________________________________________________
_________________________________________________________________
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5.2 Will any such wastewater or waste be treated before discharge?
Yes [ ] No [ ]
If yes, describe the type of treatment proposed to be conducted.
Existing tenants should describe the actual treatment conducted.
_________________________________________________________________
_________________________________________________________________
6. AIR DISCHARGES
6.1 Do you plan for any air filtration systems or stacks to be used
in your company's operations in, on or about the Premises that
will discharge into the air; and will such air emissions be
monitored? Existing tenants should indicate whether or not there
are any such air filtration systems or stacks in use in, on or
about the Premises which discharge into the air and whether such
air emissions are being monitored.
Yes [ ] No [ ]
If yes, please explain: _________________________________________
_________________________________________________________________
_________________________________________________________________
6.2 Do you propose to operate any of the following types of
equipment, or any other equipment requiring an air emissions
permit? Existing tenants should specify any such equipment being
operated in, on or about the Premises.
_____ Spray booth(s) _____ Incinerator(s)
_____ Dip tank(s) _____ Other (Please describe)
_____ Drying oven(s) _____ No Equipment Requiring Air Permits
If yes, please explain: _________________________________________
_________________________________________________________________
_________________________________________________________________
6.3 Please describe (and submit copies of with this Hazardous
Materials Disclosure Certificate) any reports you have filed in
the past [thirty-six] months with any governmental or
quasi-governmental agencies or authorities related to air
discharges or clean air requirements and any such reports which
have been issued during such period by any such agencies or
authorities with respect to you or your business operations.
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7. HAZARDOUS MATERIALS DISCLOSURES
7.1 Has your company prepared or will it be required to prepare a
Hazardous Materials management plan ("MANAGEMENT PLAN") or
Hazardous Materials Business Plan and Inventory ("BUSINESS PLAN")
pursuant to Fire Department or other governmental or regulatory
agencies' requirements? Existing tenants should indicate whether
or not a Management Plan is required and has been prepared.
Yes [ ] No [ ]
If yes, attach a copy of the Management Plan or Business Plan.
Existing tenants should attach a copy of any required updates to
the Management Plan or Business Plan.
7.2 Are any of the Hazardous Materials, and in particular chemicals,
proposed to be used in your operations in, on or about the
Premises listed or regulated under Proposition 65? Existing
tenants should indicate whether or not there are any new
Hazardous Materials being so used which are listed or regulated
under Proposition 65.
Yes [ ] No [ ]
If yes, please explain: _________________________________________
_________________________________________________________________
_________________________________________________________________
▇-▇
▇▇
▇. ENFORCEMENT ACTIONS AND COMPLAINTS
8.1 With respect to Hazardous Materials or Environmental Laws, has
your company ever been subject to any agency enforcement actions,
administrative orders, or consent decrees or has your company
received requests for information, notice or demand letters, or
any other inquiries regarding its operations? Existing tenants
should indicate whether or not any such actions, orders or
decrees have been, or are in the process of being, undertaken or
if any such requests have been received.
Yes [ ] No [ ]
If yes, describe the actions, orders or decrees and any
continuing compliance obligations imposed as a result of these
actions, orders or decrees and also describe any requests,
notices or demands, and attach a copy of all such documents.
Existing tenants should describe and attach a copy of any new
actions, orders, decrees, requests, notices or demands not
already delivered to Landlord pursuant to the provisions of
Paragraph 33 of the Lease Agreement.
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
8.2 Have there ever been, or are there now pending, any lawsuits
against your company regarding any environmental or health and
safety concerns?
Yes [ ] No [ ]
If yes, describe any such lawsuits and attach copies of the
complaint(s), cross-complaint(s), pleadings and other documents
related thereto as requested by Landlord. Existing tenants should
describe and attach a copy of any new complaint(s),
cross-complaint(s), pleadings and other related documents not
already delivered to Landlord pursuant to the provisions of
Paragraph 33 of the Lease Agreement.
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
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8.3 Have there been any problems or complaints from adjacent tenants,
owners or other neighbors at your company's current facility with
regard to environmental or health and safety concerns? Existing
tenants should indicate whether or not there have been any such
problems or complaints from adjacent tenants, owners or other
neighbors at, about or near the Premises and the current status
of any such problems or complaints.
Yes [ ] No [ ]
If yes, please describe. Existing tenants should describe any
such problems or complaints not already disclosed to Landlord
under the provisions of the signed Lease Agreement and the
current status of any such problems or complaints.
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
9. PERMITS AND LICENSES
9.1 Attach copies of all permits and licenses issued to your company
with respect to its proposed operations in, on or about the
Premises, including, without limitation, any Hazardous Materials
permits, wastewater discharge permits, air emissions permits, and
use permits or approvals. Existing tenants should attach copies
of any new permits and licenses as well as any renewals of
permits or licenses previously issued.
As used herein, "HAZARDOUS MATERIALS" shall mean and include any substance
that is or contains (a) any "hazardous substance" as now or hereafter defined in
Section 101(14) of the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended ("CERCLA") (42 U.S.C. Section 9601 et seq.) or
any regulations promulgated under CERCLA; (b) any "hazardous waste" as now or
hereafter defined in the Resource Conservation and Recovery Act, as amended
("RCRA") (42 U.S.C. Section 6901 et seq.) or any regulations promulgated under
RCRA; (c) any substance now or hereafter regulated by the Toxic Substances
Control Act, as amended ("TSCA") (15 U.S.C. Section 2601 et seq.) or any
regulations promulgated under TSCA; (d) petroleum, petroleum by-products,
gasoline, diesel fuel, or other petroleum hydrocarbons; (e) asbestos and
asbestos-containing material, in any form, whether friable or non-friable; (f)
polychlorinated biphenyls; (g) lead and lead-containing materials; or (h) any
additional substance, material or waste (A) the presence of which on or about
the Premises (i) requires reporting, investigation or remediation under any
Environmental Laws (as hereinafter defined), (ii) causes or threatens to cause a
nuisance on the Premises or any adjacent property or poses or threatens to pose
a hazard to the health or safety of persons on the Premises or any adjacent
property, or (iii) which, if it emanated or migrated from the Premises,
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could constitute a trespass, or (B) which is now or is hereafter classified or
considered to be hazardous or toxic under any Environmental Laws; and
"ENVIRONMENTAL LAWS" shall mean and include (a) CERCLA, RCRA and TSCA; and (b)
any other federal, state or local laws, ordinances, statutes, codes, rules,
regulations, orders or decrees now or hereinafter in effect relating to (i)
pollution, (ii) the protection or regulation of human health, natural resources
or the environment, (iii) the treatment, storage or disposal of Hazardous
Materials, or (iv) the emission, discharge, release or threatened release of
Hazardous Materials into the environment.
The undersigned hereby acknowledges and agrees that this Hazardous
Materials Disclosure Certificate is being delivered to Landlord in connection
with the evaluation of a Lease Agreement and, if such Lease Agreement is
executed, will be attached thereto as an exhibit. The undersigned further
acknowledges and agrees that if such Lease Agreement is executed, this Hazardous
Materials Disclosure Certificate will be updated from time to time in accordance
with Paragraph 33 of the Lease Agreement. The undersigned further acknowledges
and agrees that the Landlord and its partners, lenders and representatives may,
and will, rely upon the statements, representations, warranties, and
certifications made herein and the truthfulness thereof in entering into the
Lease Agreement and the continuance thereof throughout the term, and any
renewals thereof, of the Lease Agreement. I [print name] , acting with full
authority to bind the (proposed) Tenant and on behalf of the (proposed) Tenant,
certify, represent and warrant that the information contained in this
certificate is true and correct.
(PROSPECTIVE) TENANT:
CombiChem, Inc.,
a California corporation
By: ____________________________________
Title: ____________________________________
Date: ____________________________________
INITIALS:
TENANT: ______________
LANDLORD: ______________
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