Exhibit 10.22
BASIC LEASE INFORMATION
Lease Date: For identification purposes only, the date of
this Lease is April 9, 1999
Landlord: PRUNEYARD ASSOCIATES, LLC
a California limited liability company
Tenant: AmeriCom USA, Inc.
a Delaware corporation
(dba "AdCast, Inc.")
Project: The Pruneyard Office Towers
Building Address: Pruneyard Office Tower I
1901 South Bascom Avenue
Campbell, CA 95008
Rentable Area of
Building: Approximately 116,743 square feet
Premises: Floor: Eighth (8th)
Suite Number: 880
Rentable Area: Approximately 1,431 rentable
square feet
Term: 36 full calendar months (plus any partial
month at the beginning of the Term); subject
to Tenant's Extension Option, as provided in
Section 36 in the Additional Provisions Rider
(Exhibit D)
Scheduled
Commencement Date: May 1, 1999
Expiration Date: The last day of the 36th full calendar month
in the Term; subject to Tenant's Extension
Option, as provided in Section 36 in the
Additional Provisions Rider (Exhibit D)
Base Rent: Months 01 - 12: $4,221.45 per month
Months 13 - 24: $4,293.00 per month
Months 25 - 36: $4,364.55 per month
Base Year: The calendar year 1999
Tenant's Share: 1.226%
Security Deposit: $4,221.45
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Landlord's Address
for Payment of Rent: Pruncyard Associates, LLC
File #72847
P.O. Box 61000
San Francisco, CA 94161-2847
Business Hours: 7:00 a.m. - 6:00 p.m. Monday - Friday,
except Holidays
9:00 a.m. - 3:00 p.m. Saturday, except
Holidays
Landlord's Address
for Notices: Pruneyard Associates, LLC
Wilson Cornerstone Properties
1999 South Bascom Avenue, Suite 200
Campbell, CA 95008
Attention: Property Manager
with a copy to:
Wilson Cornerstone Properties
2929 Campus Drive, Suite 450
San Mateo, CA 94403
Attention: General Counsel
Tenant's Address
for Notices: 1901 South Bascom Avenue, Suite 880
Campbell, CA 95008
Broker(s): Colliers Parrish International
Guarantor(s): (None)
Property Manager: Cornerstone Properties Limited Partnership
(dba "Wilson-Cornerstone Properties Limited
Partnership")
Additional Provisions: 36. Extension Option
Exhibits:
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Exhibit A: The Premises
Exhibit B: Construction Rider
Exhibit C: Building Rules
Exhibit D: Additional Provisions
Exhibit E: Asbestos Notification
The Basic Lease Information set forth above is part of the Lease. In
the event of any conflict between any provision in the Basic Lease Information
and the Lease, the Lease shall control.
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THIS LEASE is made as of the Lease Date set forth in the Basic Lease
Information, by and between the Landlord identified in the Basic Lease
information ("Landlord"), and the Tenant identified in the Basic Lease
Information ("Tenant"). Landlord and Tenant hereby agree as follows:
1. PREMISES. Landlord hereby leases to Tenant, and Tenant hereby leases
from Landlord, upon the terms and subject to the conditions of this Lease, the
office space identified in the Basic Lease Information as the Premises (the
"Premises"), in the Building located at the address specified in the Basic Lease
Information (the "Building"). The approximate configuration and location of the
Premises is shown on Exhibit A. Landlord and Tenant agree that the rentable area
of the Premises for all purposes under this Lease shall be the Rentable Area
specified in the Basic Lease Information. The Building, together with the
parking facilities serving the Building (the "Parking Facility"), and the
parcel(s) of land on which the Building and the Parking Facility are situated
(collectively, the "Property"), is part of the Project identified in the Basic
Lease Information (the "Project").
2. TERM; POSSESSION. The term of this Lease (the "Term") shall commence on
the Commencement Date as described below and, unless sooner terminated, shall
expire on the Expiration Date set forth in the Basic Lease Information (the
"Expiration Date"). The "Commencement Date" shall be the earlier of (a) the date
on which Landlord tenders possession of the Premises to Tenant, with all of
Landlord's construction obligations, if any, "Substantially Completed" as
provided in the Construction Rider attached as Exhibit B (the "Construction
Rider") or, in the event of any "Tenant Delay," as defined in the Construction
Rider, the date on which Landlord could have done so had there been no such
Tenant Delay; or (b) the date upon which Tenant, with Landlord's written
permission, actually occupies and conducts business in any portion of the
Premises. The parties anticipate that the Commencement Date will occur on or
about the Scheduled Commencement Date set forth in the Basic Lease Information
(the "Scheduled Commencement Date"); provided, however, that Landlord shall not
be liable for any claims, damages or liabilities if the Premises are not ready
for occupancy by the Scheduled Commencement Date. When the Commencement Date has
been established, Landlord and Tenant shall at the request of either party
confirm the Commencement Date and Expiration Date in writing.
3. RENT.
3.1 Base Rent. Tenant agrees to pay to Landlord the Base Rent set forth in
the Basic Lease Information, without prior notice or demand, on the
first day of each and every calendar month during the Term, except
that Base Rent for the first full calendar month in which Base Rent is
payable shall be paid upon Tenant's execution of this Lease and Base
Rent for any partial month at the beginning of the Term shall be paid
on the Commencement Date. Base Rent for any partial month at the
beginning or end of the Term shall be prorated based on the actual
number of days in the month.
If the Basic Lease Information provides for any change in Base Rent by
reference to years or months (without specifying particular dates), the change
will take effect on the applicable annual or monthly anniversary of the
Commencement Date (which won't necessarily be the first day of a calendar
month).
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3.2 Additional Rent: Increases in Operating Costs and Taxes.
(a) Definitions.
(1) "Base Operating Costs" means Operating Costs for the calendar
year specified as the Base Year in the Basic Lease Information (excluding
therefrom, however, any Operating Costs of a nature that would not ordinarily be
incurred on an annual, recurring basis).
(2) "Base Taxes" means Taxes for the calendar year specified as the
Base Year in the Basic Lease Information.
(3) "Operating Costs" means all costs of managing, operating,
maintaining and repairing the Property, including all costs, expenditures, fees
and charges for: (A) operation, maintenance and repair of the Property
(including maintenance, repair and replacement of glass, the roof covering or
membrane, and landscaping); (B) utilities and services (including
telecommunications facilities and equipment, recycling programs and trash
removal), and associated supplies and materials; (C) compensation (including
employment taxes and fringe benefits) for persons who perform duties in
connection with the operation, management, maintenance and repair of the
Building, such compensation to be appropriately allocated for persons who also
perform duties unrelated to the Building; (D) property (including coverage for
earthquake and flood if carried by Landlord), liability, rental income and other
insurance relating to the Property, and expenditures for deductible amounts paid
under such insurance; (E) licenses, permits and inspections; (F) complying with
the requirements of any law, statute, ordinance or governmental rule or
regulation or any orders pursuant thereto (collectively "Laws"); (G)
amortization of capital improvements required to comply with Laws, or which are
intended to reduce Operating Costs or improve the utility, efficiency or
capacity of any Building System, with interest on the unamortized balance at the
rate paid by Landlord on funds borrowed to finance such capital improvements
(or, if Landlord finances such improvements out of Landlord's funds without
borrowing, the rate that Landlord would have paid to borrow such funds, as
reasonably determined by Landlord), over such useful life as Landlord shall
reasonably determine; (H) an office in the Project for the management of the
Property, including expenses of furnishing and equipping such office and the
rental value of any space occupied for such purposes; (I) property management
fees; (J) accounting, legal and other professional services incurred in
connection with the operation of the Property and the calculation of Operating
Costs and Taxes; (K) a reasonable allowance for depreciation on machinery and
equipment used to maintain the Property and on other personal property owned by
Landlord in the Property (including window coverings and carpeting in common
areas); (L) contesting the validity or applicability of any Laws that may affect
the Property; (M) the Building's share of any shared or common area maintenance
fees and expenses (including costs and expenses of operating, managing, owning
and maintaining the Parking Facility and the common areas of the Project and any
fitness center or conference center in the Project); and (N) any other cost,
expenditure, fee or charge, whether or not hereinbefore described, which in
accordance with generally accepted property management practices would be
considered an expense of managing, operating, maintaining and repairing the
Property. Operating Costs for any calendar year during which average occupancy
of the Building is less than one hundred percent (100%) shall be calculated
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based upon the Operating Costs that would have been incurred if the Building had
an average occupancy of one hundred percent (100%) during the entire calendar
year.
Operating Costs shall not include (i) capital improvements (except as otherwise
provided above); (ii) costs of special services rendered to individual tenants
(including Tenant) for which a special charge is made; (iii) interest and
principal payments on loans or indebtedness secured by the Building; (iv) costs
of improvements for Tenant or other tenants of the Building; (v) costs of
services or other benefits of a type which are not available to Tenant but which
are available to other tenants or occupants, and costs for which Landlord is
reimbursed by other tenants of the Building other than through payment of
tenants' shares of increases in Operating Costs and Taxes; (vi) leasing
commissions, attorneys' fees and other expenses incurred in connection with
leasing space in the Building or enforcing such leases; (vii) depreciation or
amortization, other than as specifically enumerated in the definition of
Operating Costs above; and (viii) costs, fines or penalties incurred due to
Landlord's violation of any Law.
(4) "Taxes" means: all real property taxes and general, special or
district assessments or other governmental impositions, of whatever kind, nature
or origin, imposed on or by reason of the ownership or use of the Property;
governmental charges, fees or assessments for transit or traffic mitigation
(including area-wide traffic improvement assessments and transportation system
management fees), housing, police, fire or other governmental service or
purported benefits to the Property; personal property taxes assessed on the
personal property of Landlord used in the operation of the Property, service
payments in lieu of taxes and taxes and assessments of every kind and nature
whatsoever levied or assessed in addition to, in lieu of or in substitution for
existing or additional real or personal property taxes on the Property or the
personal property described above; any increases in the foregoing caused by
changes in assessed valuation, tax rate or other factors or circumstances; and
the reasonable cost of contesting by appropriate proceedings the amount or
validity of any taxes, assessments or charges described above. To the extent
paid by Tenant or other tenants as "Tenant's Taxes" (as defined in Section 8 -
Tenant's Taxes), "Tenant's Taxes" shall be excluded from Taxes.
(5) "Tenant's Share" means the Rentable Area of the Premises divided
by the total Rentable Area of the Building, as set forth in the Basic Lease
Information. If the Rentable Area of the Building is changed or the Rentable
Area of the Premises is changed by Tenant's leasing of additional space
hereunder or for any other reason, Tenant's Share shall be adjusted accordingly.
(b) Additional Rent.
(1) Tenant shall pay Landlord as "Additional Rent" for each calendar
year or portion thereof during the Term Tenant's Share of the sum of (x) the
amount (if any) by which Operating Costs for such period exceed Base Operating
Costs, and (y) the amount (if any) by which Taxes for such period exceed Base
Taxes.
(2) Prior to the end of the Base Year and each calendar year
thereafter, Landlord shall notify Tenant of Landlord's estimate of Operating
Costs, Taxes and Tenant's Additional Rent for the following calendar year.
Commencing on the first day of January of each calendar year and continuing on
the first day of every month thereafter in such year, Tenant shall
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pay to Landlord one-twelfth (1/12th) of the estimated Additional Rent. If
Landlord thereafter estimates that Operating Costs or Taxes for such year will
vary from Landlord's prior estimate, Landlord may, by notice to Tenant, revise
the estimate for such year (and Additional Rent shall thereafter be payable
based on the revised estimate).
(3) As soon as reasonably practicable after the end of the Base Year
and each calendar year thereafter, Landlord shall furnish Tenant a statement
with respect to such year, showing Operating Costs, Taxes and Additional Rent
for the year, and the total payments made by Tenant with respect thereto. Unless
Tenant raises any objections to Landlord's statement within ninety (90) days
after receipt of the same, such statement shall conclusively be deemed correct
and Tenant shall have no right thereafter to dispute such statement or any item
therein or the computation of Additional Rent based thereon. If Tenant does
object to such statement, then Landlord shall provide Tenant with reasonable
verification of the figures shown on the statement and the parties shall
negotiate in good faith to resolve any disputes. Any objection of Tenant to
Landlord's statement and resolution of any dispute shall not postpone the time
for payment of any amounts due Tenant or Landlord based on Landlord's statement,
nor shall any failure of Landlord to deliver Landlord's statement in a timely
manner relieve Tenant of Tenant's obligation to pay any amounts due Landlord
based on Landlord's statement.
(4) If Tenant's Additional Rent as finally determined for any calendar
year exceeds the total payments made by Tenant on account thereof, Tenant shall
pay Landlord the deficiency within ten (10) days of Tenant's receipt of
Landlord's statement. If the total payments made by Tenant on account thereof
exceed Tenant's Additional Rent as finally determined for such year, Tenant's
excess payment shall be credited toward the rent next due from Tenant under this
Lease. For any partial calendar year at the beginning or end of the Term,
Additional Rent shall be prorated on the basis of a 365-day year by computing
Tenant's Share of the increases in Operating Costs and Taxes for the entire year
and then prorating such amount for the number of days during such year included
in the Term. Notwithstanding the termination of this Lease, Landlord shall pay
to Tenant or Tenant shall pay to Landlord, as the case may be, within ten (10)
days after Tenant's receipt of Landlord's final statement for the calendar year
in which this Lease terminates, the difference between Tenant's Additional Rent
for that year, as finally determined by Landlord, and the total amount
previously paid by Tenant on account thereof.
If for any reason Base Taxes or Taxes for any year during the Term are reduced,
refunded or otherwise changed, Tenant's Additional Rent shall be adjusted
accordingly. If Taxes are temporarily reduced as a result of space in the
Building being leased to a tenant that is entitled to an exemption from property
taxes or other taxes, then for purposes of determining Additional Rent for each
year in which Taxes are reduced by any such exemption, Taxes for such year shall
be calculated on the basis of the amount the Taxes for the year would have been
in the absence of the exemption. The obligations of Landlord to refund any
overpayment of Additional Rent and of Tenant to pay any Additional Rent not
previously paid shall survive the expiration of the Term. Notwithstanding
anything to the contrary in this Lease, if there is at any time a decrease in
Taxes below the amount of the Taxes for the Base Year, then for purposes of
calculating Additional Rent for the year in which such decrease occurs and all
subsequent periods, Base Taxes shall be reduced to equal the Taxes for the year
in which the decrease occurs.
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3.3 Payment of Rent. All amounts payable or reimbursable by Tenant under
this Lease, including late charges and interest (collectively, "Rent"), shall
constitute rent and shall be payable and recoverable as rent in the manner
provided in this Lease. All sums payable to Landlord on demand under the terms
of this Lease shall be payable within ten (10) days after notice from Landlord
of the amounts due. All rent shall be paid without offset, recoupment or
deduction in lawful money of the United States of America to Landlord at
Landlord's Address for Payment of Rent as set forth in the Basic Lease
Information, or to such other person or at such other place as Landlord may from
time to time designate.
4. SECURITY DEPOSIT. On execution of this Lease, Tenant shall deposit with
Landlord the amount specified in the Basic Lease Information as the Security
Deposit, if any (the "Security Deposit"), as security for the performance of
Tenant's obligations under this Lease. Landlord may (but shall have no
obligation to) use the Security Deposit or any portion thereof to cure any Event
of Default under this Lease or to compensate Landlord for any damage Landlord
incurs as a result of Tenant's failure to perform any of Tenant's obligations
hereunder. In such event Tenant shall pay to Landlord on demand an amount
sufficient to replenish the Security Deposit. If Tenant is not in default at the
expiration or termination of this Lease, Landlord shall return to Tenant the
Security Deposit or the balance thereof then held by Landlord and not applied as
provided above. Landlord may commingle the Security Deposit with Landlord's
general and other funds. Landlord shall not be required to pay interest on the
Security Deposit to Tenant.
5. USE AND COMPLIANCE WITH LAWS.
5.1 Use. The Premises shall be used and occupied for general business
office purposes and for no other use or purpose. Tenant shall comply with all
present and future Laws relating to Tenant's use or occupancy of the Premises
(and make any repairs, alterations or improvements as required to comply with
all such Laws), and shall observe the "Building Rules" (as defined in Section 27
- Rules and Regulations). Tenant shall not do, bring, keep or sell anything in
or about the Premises that is prohibited by, or that will cause a cancellation
of or an increase in the existing premium for, any insurance policy covering the
Property or any part thereof. Tenant shall not permit the Premises to be
occupied or used in any manner that will constitute waste or a nuisance, or
disturb the quiet enjoyment of or otherwise annoy other tenants in the Building.
Without limiting the foregoing, the Premises shall not be used for educational
activities, practice of medicine or any of the healing arts, providing social
services, for any governmental use (including embassy or consulate use), or for
personnel agency, customer service office, studios for radio, television or
other media, travel agency or reservation center operations or uses. Tenant
shall not, without the prior consent of Landlord, (i) bring into the Building or
the Premises anything that may cause substantial noise, odor or vibration,
overload the floors in the Premises or the Building or any of the heating,
ventilating and air-conditioning ("HVAC"), mechanical, elevator, plumbing,
electrical, fire protection, life safety, security or other systems in the
Building ("Building Systems"), or jeopardize the structural integrity of the
Building or any part thereof; (ii) connect to the utility systems of the
Building any apparatus, machinery or other equipment other than typical office
equipment; or (iii) connect to any electrical circuit in the Premises any
equipment or other load with aggregate electrical power requirements in excess
of 80% of the rated capacity of the circuit.
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5.2 Hazardous Materials.
(a) Definitions.
(1) " Hazardous Materials" shall mean any substance: (A) that now
or in the future is regulated or governed by, requires investigation or
remediation under, or is defined as a hazardous waste, hazardous substance,
pollutant or contaminant under any governmental statute, code, ordinance,
regulation, rule or order, and any amendment thereto, including the
Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C.
ss.9601 et seq., and the Resource Conservation and Recovery Act, 42 U.S.C.
ss.6901 et seq., or (B) that is toxic, explosive, corrosive, flammable,
radioactive, carcinogenic, dangerous or otherwise hazardous, including gasoline,
diesel fuel, petroleum hydrocarbons, polychlorinated biphenyls (PCBs), asbestos,
radon and urea formaldehyde foam insulation.
(2) "Environmental Requirements" shall mean all present and
future Laws, orders, permits, licenses, approvals, authorizations and other
requirements of any kind applicable to Hazardous Materials.
(3) "Handled by Tenant" and "Handling by Tenant" shall mean and
refer to any installation, handling, generation, storage, use, disposal,
discharge, release, abatement, removal, transportation, or any other activity of
any type by Tenant or its agents, employees, contractors, licensees, assignees,
sublessees, transferees or representatives (collectively, "Representatives") or
its guests, customers, invitees, or visitors (collectively, "Visitors"), at or
about the Premises in connection with or involving Hazardous Materials.
(4) "Environmental Losses" shall mean all costs and expenses of
any kind, damages, including foreseeable and unforeseeable consequential
damages, fines and penalties incurred in connection with any violation of and
compliance with Environmental Requirements and all losses of any kind
attributable to the diminution of value, loss of use or adverse effects on
marketability or use of any portion of the Premises or Property.
(b) Tenant's Covenants. No Hazardous Materials shall be Handled by
Tenant at or about the Premises or Property without Landlord's prior written
consent, which consent may be granted, denied, or conditioned upon compliance
with Landlord's requirements, all in Landlord's absolute discretion.
Notwithstanding the foregoing, normal quantities and use of those Hazardous
Materials customarily used in the conduct of general office activities, such as
copier fluids and cleaning supplies ("Permitted Hazardous Materials"), may be
used and stored at the Premises without Landlord's prior written consent,
provided that Tenant's activities at or about the Premises and Property and the
Handling by Tenant of all Hazardous Materials shall comply at all times with all
Environmental Requirements. At the expiration or termination of the Lease,
Tenant shall promptly remove from the Premises and Property all Hazardous
Materials Handled by Tenant at the Premises or the Property. Tenant shall keep
Landlord fully and promptly informed of all Handling by Tenant of Hazardous
Materials other than permitted Hazardous Materials. Tenant shall be responsible
and liable for the compliance with all of the provisions of this Section by all
of Tenant's Representatives and Visitors, and all of Tenant's obligations under
this Section (including its indemnification obligations under paragraph (e)
below) shall survive the expiration or termination of this Lease.
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(c) Compliance. Tenant shall at Tenant's expense promptly take all
actions required by any governmental agency or entity in connection with or as a
result of the Handling by Tenant of Hazardous Materials at or about the Premises
or Property, including inspection and testing, performing all cleanup, removal
and remediation work required with respect to those Hazardous Materials,
complying with all closure requirements and post-closure monitoring, and filing
all required reports or plans. All of the foregoing work and all Handling by
Tenant of all Hazardous Materials shall be performed in a good, safe and
workmanlike manner by consultants qualified and licensed to undertake such work
and in a manner that will not interfere with any other tenant's quiet enjoyment
of the Property or Landlord's use, operation, leasing and sale of the Property.
Tenant shall deliver to Landlord prior to delivery to any governmental agency,
or promptly after receipt from any such agency, copies of all permits,
manifests, closure or remedial action plans, notices, and all other documents
relating to the Handling by Tenant of Hazardous Materials at or about the
Premises or Property. If any lien attaches to the Premises or the Property in
connection with or as a result of the Handling by Tenant of Hazardous Materials,
and Tenant does not cause the same to be released, by payment, bonding or
otherwise, within ten (10) days after the attachment thereof, Landlord shall
have the right but not the obligation to cause the same to be released and any
sums expended by Landlord (plus Landlord's administrative costs) in connection
therewith shall be payable by Tenant on demand.
(d) Landlord's Rights. Landlord shall have the right, but not the
obligation, to enter the Premises at any reasonable time (i) to confirm Tenant's
compliance with the provisions of this Section 5.2, and (ii) to perform Tenant's
obligations under this Section if Tenant has failed to do so after reasonable
notice to Tenant. Landlord shall also have the right to engage qualified
Hazardous Materials consultants to inspect the Premises and review the Handling
by Tenant of Hazardous Materials, including review of all permits, reports,
plans, and other documents regarding same. Tenant shall pay to Landlord on
demand the costs of Landlord's consultants' fees and all costs incurred by
Landlord in performing Tenant's obligations under this Section. Landlord shall
use reasonable efforts to minimize any interference with Tenant's business
caused by Landlord's entry into the Premises, but Landlord shall not be
responsible for any interference caused thereby.
(e) Tenant's Indemnification. Tenant agrees to indemnify, defend,
protect and hold harmless Landlord and its partners or members and its or their
partners, members, directors, officers, shareholders, employees and agents from
all Environmental Losses and all other claims, actions, losses, damages,
liabilities, costs and expenses of every kind, including reasonable attorneys',
experts' and consultants' fees and costs, incurred at any time and arising from
or in connection with the Handling by Tenant of Hazardous Materials at or about
the Property or Tenant's failure to comply in full with all Environmental
Requirements with respect to the Premises.
(f) Asbestos. Tenant acknowledges that Tenant has received the
asbestos notification letter attached as Exhibit E hereto pursuant to California
Health and Safety Code Sections 25915 et seq. (as amended from time to time, the
"Connelly Act"), disclosing the existence of asbestos in the Building. As part
of Tenant's obligations under paragraph (c) of this Section, Tenant agrees to
comply with the Connelly Act, including providing copies of Landlord's asbestos
notification letter to all of Tenant's "employees" and "owners," as those terms
are defined in the Connelly Act.
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6. TENANT IMPROVEMENTS & ALTERATIONS.
6.1 Landlord and Tenant shall perforce their respective obligations
with respect to design and construction of any improvements to be constructed
and installed in the Premises (the "Tenant Improvements"), as provided in the
Construction Rider. Except for any Tenant Improvements to be constructed by
Tenant as provided in the Construction Rider, Tenant shall not make any
alterations, improvements or changes to the Premises, including installation of
any security system or telephone or data communication wiring, ("Alterations"),
without Landlord's prior written consent; provided, however, that Tenant shall
not be required to obtain Landlord's prior approval or consent for minor,
non-structural Alterations that cost less than $2,500, do not require a building
permit, do not affect any of the Building Systems, and are not visible from
outside the Premises ("Minor Alterations"). Any Alterations shall be completed
by Tenant at Tenant's sole cost and expense: (i) with due diligence, in a good
and workmanlike manner, using new materials; (ii) in compliance with plans and
specifications approved by Landlord; (iii) in compliance with the construction
rules and regulations promulgated by Landlord from time to time; (iv) in
accordance with all applicable Laws (including all work, whether structural or
nonstructural, inside or outside the Premises, required to comply fully with all
applicable Laws and necessitated by Tenant's work); and (v) subject to all
conditions which Landlord may in Landlord's discretion impose. Such conditions
may include requirements for Tenant to: (i) provide payment or performance bonds
or additional insurance (from Tenant or Tenant's contractors, subcontractors or
design professionals); (ii) use contractors or subcontractors designated by
Landlord; and (iii) remove all or part of the Alterations prior to or upon
expiration or termination of the Term, as designated by Landlord. If any work
outside the Premises, or any work on or adjustment to any of the Building
Systems, is required in connection with or as a result of Tenant's work, such
work shall be performed at Tenant's expense by contractors designated by
Landlord. Landlord's right to review and approve (or withhold approval of)
Tenant's plans, drawings, specifications, contractor(s) and other aspects of
construction work proposed by Tenant is intended solely to protect Landlord, the
Property and Landlord's interests. No approval or consent by Landlord shall be
deemed or construed to be a representation or warranty by Landlord as to the
adequacy, sufficiency, fitness or suitability thereof or compliance thereof with
applicable Laws or other requirements. Except as otherwise provided in
Landlord's consent, all Alterations shall upon installation become part of the
realty and be the property of Landlord.
6.2 Before making any Alterations, Tenant shall submit to Landlord for
Landlord's prior approval reasonably detailed final plans and specifications
prepared by a licensed architect or engineer, a copy of the construction
contract, including the name of the contractor and all subcontractors proposed
by Tenant to make the Alterations and a copy of the contractor's license. Tenant
shall reimburse Landlord upon demand for any expenses incurred by Landlord in
connection with any Alterations made by Tenant, including reasonable fees
charged by Landlord's contractors or consultants to review plans and
specifications prepared by Tenant and to update the existing as-built plans and
specifications of the Building to reflect the Alterations. Tenant shall obtain
all applicable permits, authorizations and governmental approvals and deliver
copies of the same to Landlord before commencement of any Alterations.
6.3 Tenant shall keep the Premises and the Property free and clear of
all liens arising out of any work performed, materials famished or obligations
incurred by Tenant. If any such
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lien attaches to the Premises or the Property, and Tenant does not cause the
same to be released by payment, bonding or otherwise within ten (10) days after
the attachment thereof, Landlord shall have the right but not the obligation to
cause the same to be released, and any sums expended by Landlord (plus
Landlord's administrative costs) in connection therewith shall be payable by
Tenant on demand with interest thereon from the date of expenditure by Landlord
at the Interest Rate (as defined in Section 16.2 - Interest). Tenant shall give
Landlord at least ten (10) days' notice prior to the commencement of any
Alterations and cooperate with Landlord in posting and maintaining notices of
non-responsibility in connection therewith.
6.4 Subject to the provisions of Section 5 - Use and Compliance with
Laws and the foregoing provisions of this Section, Tenant may install and
maintain furnishings, equipment, movable partitions, business equipment and
other trade fixtures ("Trade Fixtures") in the Premises, provided that the Trade
Fixtures do not become an integral part of the Premises or the Building. Tenant
shall promptly repair any damage to the Premises or the Building caused by any
installation or removal of such Trade Fixtures.
7. MAINTENANCE AND REPAIRS.
7.1 By taking possession of the Premises Tenant agrees that the
Premises are then in a good and tenantable condition. During the Term, Tenant at
Tenant's expense but under the direction of Landlord, shall repair and maintain
the Premises, including the interior walls, floor coverings, ceiling (ceiling
tiles and grid), Tenant Improvements, Alterations, fire extinguishers, outlets
and fixtures, and any appliances (including dishwashers, hot water heaters and
garbage disposers) in the Premises, in a first class condition, and keep the
Premises in a clean, safe and orderly condition.
7.2 Landlord shall maintain or cause to be maintained in reasonably
good order, condition and repair, the structural portions of the roof,
foundations, floors and exterior walls of the Building, the Building Systems,
and the public and common areas of the Property, such as elevators, stairs,
corridors and restrooms; provided, however, that Tenant shall pay the cost of
repairs for any damage occasioned by Tenant's use of the Premises or the
Property or any act or omission of Tenant or Tenant's Representatives or
Visitors, to the extent (if any) not covered by Landlord's property insurance.
Landlord shall be under no obligation to inspect the Premises. Tenant shall
promptly report in writing to Landlord any defective condition known to Tenant
which Landlord is required to repair. As a material part of the consideration
for this Lease, Tenant hereby waives any benefits of any applicable existing or
future Law, including the provisions of California Civil Code Sections 1932(1),
1941 and 1942, that allows a tenant to make repairs at its landlord's expense.
7.3 Landlord hereby reserves the right, at any time and from time to
time, without liability to Tenant, and without constituting an eviction,
constructive or otherwise, or entitling Tenant to any abatement of rent or to
terminate this Lease or otherwise releasing Tenant from any of Tenant's
obligations under this Lease:
(a) To make alterations, additions, repairs, improvements to or
in or to decrease the size of area of, all or any part of the Building, the
fixtures and equipment therein, and the Building Systems (except that Landlord
shall not have any right under this provision
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materially to reduce the size of the Premises or permanently, materially and
adversely to affect Tenant's access to the Premises and ability to use the
Premises for the purposes intended and contemplated under this Lease);
(b) To change the Building's name or street address;
(c) To install and maintain any and all signs on the exterior and
interior of the Building;
(d) To reduce, increase, enclose or otherwise change at any time
and from time to time the size, number, location, lay-out and nature of the
common areas (including the Parking Facility) and other tenancies and premises
in the Property and to create additional rentable areas through use or enclosure
of common areas (except that Landlord shall not have any right under this
provision materially to reduce the size of the Premises or permanently,
materially and adversely to affect Tenant's access to the Premises and ability
to use the Premises for the purposes intended and contemplated under this
Lease); and
(e) If any governmental authority promulgates or revises any Law
or imposes mandatory or voluntary controls or guidelines on Landlord or the
Property relating to the use or conservation of energy or utilities or the
reduction of automobile or other emissions or reduction or management of traffic
or parking on the Property (collectively "Controls"), to comply with such
Controls, whether mandatory or voluntary, or make any alterations to the
Property related thereto.
8. TENANT'S TAXES. "Tenant's Taxes" shall mean (a) all taxes, assessments,
license fees and other governmental charges or impositions levied or assessed
against or with respect to Tenant's personal property or Trade Fixtures in the
Premises, whether any such imposition is levied directly against Tenant or
levied against Landlord or the Property, (b) all rental, excise, sales or
transaction privilege taxes arising out of this Lease (excluding, however, state
and federal personal or corporate income taxes measured by the income of
Landlord from all sources) imposed by any taxing authority upon Landlord or upon
Landlord's receipt of any rent payable by Tenant pursuant to the terms of this
Lease ("Rental Tax"), and (c) any increase in Taxes attributable to inclusion of
a value placed on Tenant's personal property, Trade Fixtures or Alterations.
Tenant shall pay any Rental Tax to Landlord in addition to and at the same time
as Base Rent is payable under this Lease, and shall pay all other Tenant's Taxes
before delinquency (and, at Landlord's request, shall furnish Landlord
satisfactory evidence thereof). If Landlord pays Tenant's Taxes or any portion
thereof Tenant shall reimburse Landlord upon demand for the amount of such
payment, together with interest at the Interest Rate from the date of Landlord's
payment to the date of Tenant's reimbursement.
9. UTILITIES AND SERVICES.
9.1 Description of Services. Landlord shall furnish to the Premises:
reasonable amounts of heat, ventilation and air-conditioning during the Business
Hours specified in the Basic Lease Information ("Business Hours") on weekdays
except public holidays ("Business Days"); reasonable amounts of electricity; and
janitorial services five days a week (except public holidays). Landlord shall
also provide the Building with normal fluorescent tube replacement,
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window washing, elevator service, and common area toilet room supplies. Any
additional utilities or services that Landlord may agree to provide (including
lamp or tube replacement for other than Building Standard lighting fixtures)
shall be at Tenant's sole expense.
9.2 Payment for Additional Utilities and Services.
(a) Upon request by Tenant in accordance with the procedures
established by Landlord from time to time for furnishing HVAC service at times
other than Business Hours on Business Days, Landlord shall furnish such service
to Tenant and Tenant shall pay for such services on an hourly basis of the then
prevailing rate established for the Building by Landlord.
(b) If the temperature otherwise maintained in any portion of the
Premises by the HVAC systems of the Building is affected as a result of (i) any
lights, machines or equipment used by Tenant in the Premises, or (ii) the
occupancy of the Premises by more than one person per 150 square feet of
rentable area, then Landlord shall have the right to install any machinery or
equipment reasonably necessary to restore the temperature, including
modifications to the standard air-conditioning equipment. The cost of any such
equipment and modifications, including the cost of installation and any
additional cost of operation and maintenance of the same, shall be paid by
Tenant to Landlord upon demand.
(c) If Tenant's usage of electricity, water or any other utility
service exceeds the use of such utility Landlord determines to be typical,
normal and customary for the Building, Landlord may determine the amount of such
excess use by any reasonable means (including the installation at Landlord's
request but at Tenant's expense of a separate meter or other measuring device)
and charge Tenant for the cost of such excess usage. In addition, Landlord may
impose a reasonable charge for the use of any additional or unusual janitorial
services required by Tenant because of any unusual Tenant Improvements or
Alterations, the carelessness of Tenant or the nature of Tenant's business
(including hours of operation).
9.3 Interruption of Services. In the event of an interruption in or
failure or inability to provide any services or utilities to the Premises or
Building for any reason (a "Service Failure"), such Service Failure shall not,
regardless of its duration, impose upon Landlord any liability whatsoever,
constitute an eviction of Tenant, constructive or otherwise, entitle Tenant to
an abatement of rent or to terminate this Lease or otherwise release Tenant from
any of Tenant's obligations under this Lease, except only as otherwise provided
in this Section 9.3.
(a) If any Service Failure caused by Landlord's gross negligence
or willful misconduct and not caused by Tenant or its Representatives prevents
Tenant from reasonably using a material portion of the Premises and Tenant in
fact ceases to use such portion of the Premises, Tenant shall be entitled to an
abatement of Base Rent and Additional Rent with respect to the portion of the
Premises that Tenant is prevented from using by reason of such Service Failure
if the Service Failure is not remedied within five (5) Business Days following
Landlord's receipt of notice of the occurrence of the Service Failure, and such
failure has persisted and continuously prevented Tenant from using a material
portion of the Premises during that period, in which event the abatement of rent
shall commence on the sixth Business Day following Landlord's receipt of notice
of the Service Failure and continue until Tenant is no longer so prevented from
using such portion of the Premises.
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(b) If a Service Failure is caused by Tenant or its
Representatives, Landlord shall nonetheless remedy the Service Failure, at the
expense of Tenant, pursuant to Landlord's maintenance and repair obligations
under Section 7 - "Maintenance and Repair" or Section 12.1 - "Landlord's Duty to
Repair," as the case may be, but Tenant shall not be entitled to an abatement of
rent or to terminate this Lease as a result of any such Service Failure.
(c) Notwithstanding Tenant's entitlement to rent abatement under
the preceding provisions, Tenant shall continue to pay Tenant's then current
rent until such time as Landlord and Tenant agree on the amount of the rent
abatement. If Landlord and Tenant are unable to agree on the amount of such
abatement within ten (10) Business Days of the date they commence negotiations
regarding the abatement, then either party may submit the matter to binding
arbitration pursuant to Sections 1280 et seq. of the California Code of Civil
Procedure.
(d) In addition to the foregoing provisions, if there is a
Service Failure caused by Landlord's gross negligence or willful misconduct and
not caused by Tenant or its Representatives and such Service Failure prevents
Tenant from reasonably using a material portion of the Premises and Tenant in
fact ceases to use such portion of the Premises, and (i) Landlord fails to
commence reasonable efforts to remedy the Service Failure within ninety (90)
days following Landlord's receipt of notice of the occurrence of the Service
Failure, or (ii) the Service Failure in all events is not remedied within one
(1) year following Landlord's receipt of notice of the occurrence of the Service
Failure its occurrence and such failure has persisted and continuously prevented
Tenant from using a material portion of the Premises during that period, and
Tenant in fact does not conduct any business in the Premises for an
uninterrupted period of one (1) year or more, Tenant shall have the right to
terminate this Lease by written notice delivered to Landlord within ten (10)
Business Days following the event described in clauses (i) or (ii) above giving
rise to the right to terminate.
(e) Where the cause of a Service Failure is within the control of
a public utility or other public or quasi-public entity outside Landlord's
control, notification to such utility or entity of the Service Failure and
request to remedy the failure shall constitute "reasonable efforts" by Landlord
to remedy the Service Failure.
(f) Tenant hereby waives any benefits of any applicable existing
or future Law, including the provisions of California Civil Code Section
1932(1), permitting the termination of this Lease due to such interruption,
failure or inability.
10. EXCULPATION AND INDEMNIFICATION.
10.1 Landlord's Indemnification of Tenant. Landlord shall indemnify,
protect, defend and hold Tenant harmless from and against any claims, actions,
liabilities, damages, costs or expenses, including reasonable attorneys' fees
and costs incurred in defending against the same ("Claims") asserted by any
third party against Tenant for loss, injury or damage, to the extent such loss,
injury or damage is caused by the willful misconduct or negligent acts or
omissions of Landlord or its authorized representatives.
10.2 Tenant's Indemnification of Landlord. Tenant shall indemnify,
protect, defend and hold Landlord and Landlord's authorized representatives
harmless from and against Claims
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arising from (a) the acts or omissions of Tenant or Tenant's Representatives or
Visitors in or about the Property, or (b) any construction or other work
undertaken by Tenant on the Premises (including any design defects), or (c) any
breach or default under this Lease by Tenant, or (d) any loss, injury or damage,
howsoever and by whomsoever caused, to any person or property, occurring in or
about the Premises during the Term, excepting only Claims described in this
clause (d) to the extent they are caused by the willful misconduct or negligent
acts or omissions of Landlord or its authorized representatives.
10.3 Damage to Tenant and Tenant's Property. Landlord shall not be
liable to Tenant for any loss, injury or other damage to Tenant or to Tenant's
property in or about the Premises or the Property from any cause (including
defects in the Property or in any equipment in the Property; fire, explosion or
other casualty; bursting, rupture, leakage or overflow of any plumbing or other
pipes or lines, sprinklers, tanks, drains, drinking fountains or washstands in,
above, or about the Premises or the Property; or acts of other tenants in the
Property), and Tenant hereby waives all claims against Landlord for any such
loss, injury or damage and the cost and expense of defending against claims
relating thereto, including any loss, injury or damage caused by Landlord's
negligence (active or passive) or willful misconduct, except only (subject to
the mutual waiver of rights of recovery and subrogation as provided in Section
11.3) for damage to tangible personal property and bodily injury, to the extent
(but only to the extent) that the damage or injury is both (x) determined by the
final judgment of a court of competent jurisdiction to have been proximately
caused by Landlord's fraud, willful injury to person or property, violation of
law, or negligence and not caused or contributed to by act or omission of
Tenant, and (y) not covered by any insurance carried by Tenant (and would not be
covered by any insurance required to be carried by Tenant pursuant to this
Lease). Notwithstanding any other provision of this Lease to the contrary, in no
event shall Landlord be liable to Tenant for any punitive or consequential
damages or damages for loss of business by Tenant.
10.4 Survival. The obligations of the parties under this Section 10
shall survive the expiration or termination of this Lease.
11. INSURANCE.
11.1 Tenant's Insurance.
(a) Liability Insurance. Tenant shall maintain in full force
throughout the Term, commercial general liability insurance providing coverage
on an occurrence form basis with limits of not less than Two Million Dollars
($2,000,000.00) each occurrence for bodily injury and property damage combined,
Two Million Dollars ($2,000,000.00) annual general aggregate, and Two Million
Dollars ($2,000,000.00) products and completed operations annual aggregate.
Tenant's liability insurance policy or policies shall: (i) include premises and
operations liability coverage, products and completed operations liability
coverage, broad form property damage coverage including completed operations,
blanket contractual liability coverage including, to the maximum extent
possible, coverage for the indemnification obligations of Tenant under this
Lease, and personal and advertising injury coverage; (ii) provide that the
insurance company has the duty to defend all insureds under the policy; (iii)
provide that defense costs are paid in addition to and do not deplete any of the
policy limits; (iv) cover liabilities arising out of or incurred in connection
with Tenant's use or occupancy of the Premises or the
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Property; (v) extend coverage to cover liability for the actions of Tenant's
Representatives and Visitors; and (vi) designate separate limits for the
Property. Each policy of liability insurance required by this Section shall: (1)
contain a cross liability endorsement or separation of insureds clause; (2)
provide that any waiver of subrogation rights or release prior to a loss does
not void coverage; (3) provide that it is primary to and not contributing with,
any policy of insurance carried by Landlord covering the same loss; (4) provide
that any failure to comply with the reporting provisions by Tenant shall not
affect coverage provided to Landlord, its partners, property managers and
Mortgagees; and (5) name Landlord, its partners, the Property Manager identified
in the Basic Lease Information (the "Property Manager"), and such other parties
in interest as Landlord may from time to time reasonably designate to Tenant in
writing, as additional insureds. Such additional insureds shall be provided at
least the same extent of coverage as is provided to Tenant under such policies
with respect to liability arising out of the ownership, maintenance or use of
the Premises. All endorsements effecting such additional insured status shall be
at least as broad as additional insured endorsement form number CG 20 11 11 85
or CG 20 11 11 01 96 promulgated by the Insurance Services Office.
(b) Property Insurance. Tenant shall at all times maintain in
effect with respect to any Alterations and Tenant's Trade Fixtures and personal
property, commercial property insurance providing coverage, on an "all risk" or
"special form" basis, in an amount equal to at least 90% of the full replacement
cost of the covered property. Tenant may carry such insurance under a blanket
policy, provided that such policy provides coverage equivalent to a separate
policy. During the Term, the proceeds from any such policies of insurance shall
be used for the repair or replacement of the Alterations, Trade Fixtures and
personal property so insured. Landlord shall be provided coverage under such
insurance to the extent of its insurable interest and, if requested by Landlord,
both Landlord and Tenant shall sign all documents reasonably necessary or proper
in connection with the settlement of any claim or loss under such insurance.
Landlord will have no obligation to carry insurance on any Alterations or on
Tenant's Trade Fixtures or personal property.
(c) Requirements For All Policies. Each policy of insurance
required under this Section 11.1 shall: (i) be in a form, and written by an
insurer, reasonably acceptable to Landlord, (ii) be maintained at Tenant's sole
cost and expense, and (iii) require at least thirty (30) days' written notice to
Landlord prior to any cancellation, nonrenewal or modification of insurance
coverage. Insurance companies issuing such policies shall have rating
classifications of "A" or better and financial size category ratings of "VII" or
better according to the latest edition of the A.M. Best Key Rating Guide. All
insurance companies issuing such policies shall be admitted carriers licensed to
do business in the state where the Property is located. Any deductible amount
under such insurance shall not exceed $5,000. Tenant shall provide to Landlord,
upon request, evidence that the insurance required to be carried by Tenant
pursuant to this Section, including any endorsement effecting the additional
insured status, is in full force and effect and that premiums therefor have been
paid.
(d) Updating Coverage. Tenant shall increase the amounts of
insurance as required by any Mortgagee, and, not more frequently than once every
three (3) years, as recommended by Landlord's insurance broker, if, in the
opinion of either of them, the amount of insurance then required under this
Lease is not adequate. Any limits set forth in this Lease on the
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amount or type of coverage required by Tenant's insurance shall not limit the
liability of Tenant under this Lease.
(e) Certificates of Insurance. Prior to occupancy of the Premises
by Tenant, and not less than thirty (30) days prior to expiration of any policy
thereafter, Tenant shall furnish to Landlord a certificate of insurance
reflecting that the insurance required by this Section is in force, accompanied
by an endorsement showing the required additional insureds satisfactory to
Landlord in substance and form. Notwithstanding the requirements of this
paragraph, Tenant shall at Landlord's request provide to Landlord a certified
copy of each insurance policy required to be in force at any time pursuant to
the requirements of this Lease or its Exhibits.
11.2 Landlord's Insurance. During the Term, to the extent such
coverages are available at a commercially reasonable cost, Landlord shall
maintain in effect insurance on the Building with responsible insurers, on an
"all risk" or "special form" basis, insuring the Building and the Tenant
Improvements in an amount equal to at least 90% of the replacement cost thereof,
excluding land, foundations, footings and underground installations. Landlord
may, but shall not be obligated to, carry insurance against additional perils
and/or in greater amounts.
11.3 Mutual Waiver of Right of Recovery & Waiver of Subrogation.
Landlord and Tenant each hereby waive any right of recovery against each other
and the partners, managers, members, shareholders, officers, directors and
authorized representatives of each other for any loss or damage that is covered
by any policy of property insurance maintained by either party (or required by
this Lease to be maintained) with respect to the Premises or the Property or any
operation therein, regardless of cause, including negligence (active or passive)
of the party benefiting from the waiver. If any such policy of insurance
relating to this Lease or to the Premises or the Property does not permit the
foregoing waiver or if the coverage under any such policy would be invalidated
as a result of such waiver, the party maintaining such policy shall obtain from
the insurer under such policy a waiver of all right of recovery by way of
subrogation against either party in connection with any claim, loss or damage
covered by such policy.
12. DAMAGE OR DESTRUCTION.
12.1 Landlord's Duty to Repair.
(a) If all or a substantial part of the Premises are rendered
untenantable or inaccessible by damage to all or any part of the Property from
fire or other casualty then, unless either party is entitled to and elects to
terminate this Lease pursuant to Sections 12.2 - Landlord's Right to Terminate
and 12.3 - Tenant's Right to Terminate, Landlord shall, at its expense, use
reasonable efforts to repair and restore the Premises and/or the Property, as
the case may be, to substantially their former condition to the extent permitted
by then applicable Laws; provided, however, that in no event shall Landlord have
any obligation for repair or restoration beyond the extent of insurance proceeds
received by Landlord for such repair or restoration, or for any of Tenant's
personal property, Trade Fixtures or Alterations.
(b) If Landlord is required or elects to repair damage to the
Premises and/or the Property, this Lease shall continue in effect, but Tenant's
Base Rent and Additional Rent shall be abated with regard to any portion of the
Premises that Tenant is prevented from using by
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reason of such damage or its repair from the date of the casualty until
substantial completion of Landlord's repair of the affected portion of the
Premises as required under this Lease. In no event shall Landlord be liable to
Tenant by reason of any injury to or interference with Tenant's business or
property arising from fire or other casualty or by reason of any repairs to any
part of the Property necessitated by such casualty.
12.2 Landlord's Right to Terminate. Landlord may elect to terminate
this Lease following damage by fire or other casualty under the following
circumstances:
(a) If, in the reasonable judgment of Landlord, the Premises and
the Property cannot be substantially repaired and restored under applicable Laws
within one (1) year from the date of the casualty;
(b) If, in the reasonable judgment of Landlord, adequate proceeds
are not, for any reason, made available to Landlord from Landlord's insurance
policies (and/or from Landlord's funds made available for such purpose, at
Landlord's sole option) to make the required repairs;
(c) If the Building is damaged or destroyed to the extent that,
in the reasonable judgment of Landlord, the cost to repair and restore the
Building would exceed twenty-five percent (25%) of the full replacement cost of
the Building, whether or not the Premises are at all damaged or destroyed; or
(d) If the fire or other casualty occurs during the last year of
the Term.
If any of the circumstances described in subparagraphs (a), (b), (e) or (d) of
this Section 12.2 occur or arise, Landlord shall give Tenant notice within one
hundred and twenty (120) days after the date of the casualty, specifying whether
Landlord elects to terminate this Lease as provided above and, if not,
Landlord's estimate of the time required to complete Landlord's repair
obligations under this Lease.
12.3 Tenant's Right to Terminate. If all or a substantial part of the
Premises are rendered untenantable or inaccessible by damage to all or any part
of the Property from fire or other casualty, and Landlord does not elect to
terminate as provided above, then Tenant may elect to terminate this Lease if
Landlord's estimate of the time required to complete Landlord's repair
obligations under this Lease is greater than one (1) year, in which event Tenant
may elect to terminate this Lease by giving Landlord notice of such election to
terminate within thirty (30) days after Landlord's notice to Tenant pursuant to
Section 12.2 - Landlord's Right to Terminate.
12.4 Waiver. Landlord and Tenant each hereby waive the provisions of
California Civil Code Sections 1932(2), 1933(4) and any other applicable
existing or future Law permitting the termination of a lease agreement in the
event of damage or destruction under any circumstances other than as provided in
Sections 12.2 - Landlord's Right to Terminate and 12.3 - Tenant's Right to
Terminate.
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13. CONDEMNATION.
13.1 Definitions.
(a) "Award" shall mean all compensation, sums, or anything of
value awarded, paid or received on a total or partial Condemnation.
(b) "Condemnation" shall mean (i) a permanent taking (or a
temporary taking for a period extending beyond the end of the Term) pursuant to
the exercise of the power of condemnation or eminent domain by any public or
quasi-public authority, private corporation or individual having such power
("Condemnor"), whether by legal proceedings or otherwise, or (ii) a voluntary
sale or transfer by Landlord to any such authority, either under threat of
condemnation or while legal proceedings for condemnation are pending.
(c) "Date of Condemnation" shall mean the earlier of the date
that title to the property taken is vested in the Condemnor or the date the
Condemnor has the right to possession of the property being condemned.
13.2 Effect on Lease.
(a) If the Premises are totally taken by Condemnation, this Lease
shall terminate as of the Date of Condemnation. If a portion but not all of the
Premises is taken by Condemnation, this Lease shall remain in effect; provided,
however, that if the portion of the Premises remaining after the Condemnation
will be unsuitable for Tenant's continued use, then upon notice to Landlord
within thirty (30) days after Landlord notifies Tenant of the Condemnation,
Tenant may terminate this Lease effective as of the Date of Condemnation.
(b) If twenty-five percent (25%) or more of the Project or of the
parcel(s) of land on which the Building is situated or of the Parking Facility
or of the floor area in the Building is taken by Condemnation, or if as a result
of any Condemnation the Building is no longer reasonably suitable for use as an
office building, whether or not any portion of the Premises is taken, Landlord
may elect to terminate this Lease, effective as of the Date of Condemnation, by
notice to Tenant within thirty (30) days after the Date of Condemnation.
(c) If all or a portion of the Premises is temporarily taken by a
Condemnor for a period not extending beyond the end of the Term, this Lease
shall remain in full force and effect.
13.3 Restoration. If this Lease is not terminated as provided in
Section 13.2 - Effect on Lease, Landlord, at its expense, shall diligently
proceed to repair and restore the Premises to substantially its former condition
(to the extent permitted by then applicable Laws) and/or repair and restore the
Building to an architecturally complete office building; provided, however, that
Landlord's obligations to so repair and restore shall be limited to the amount
of any Award received by Landlord and not required to be paid to any Mortgagee
(as defined in Section 20.2 below). In no event shall Landlord have any
obligation to repair or replace any improvements in the Premises beyond the
amount of any Award received by Landlord for such repair or to repair or replace
any of Tenant's personal property, Trade Fixtures, or Alterations.
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13.4 Abatement and Reduction of Rent. If any portion of the Premises is
taken in a Condemnation or is rendered permanently untenantable by repairs
necessitated by the Condemnation, and this Lease is not terminated, the Base
Rent and Additional Rent payable under this Lease shall be proportionally
reduced as of the Date of Condemnation based upon the percentage of rentable
square feet in the Premises so taken or rendered permanently untenantable. In
addition, if this Lease remains in effect following a Condemnation and Landlord
proceeds to repair and restore the Premises, the Base Rent and Additional Rent
payable under this Lease shall be abated during the period of such repair or
restoration to the extent such repairs prevent Tenant's use of the Premises.
13.5 Awards. Any Award made shall be paid to Landlord, and Tenant
hereby assigns to Landlord, and waives all interest in or claim to, any such
Award, including any claim for the value of the unexpired Term; provided,
however, that Tenant shall be entitled to receive, or to prosecute a separate
claim for, an Award for a temporary taking of the Premises or a portion thereof
by a Condemnor where this Lease is not terminated (to the extent such Award
relates to the unexpired Term), or an Award or portion thereof separately
designated for relocation expenses or the interruption of or damage to Tenant's
business or as compensation for Tenant's personal property, Trade Fixtures or
Alterations.
13.6 Waiver. Landlord and Tenant each hereby waive the provisions of
California Code of Civil Procedure Section 1265.130 and any other applicable
existing or future Law allowing either party to petition for a termination of
this Lease upon a partial taking of the Premises and/or the Property.
14. ASSIGNMENT AND SUBLETTING.
14.1 Landlord's Consent Required. Tenant shall not assign this Lease or
any interest therein, or sublet or license or permit the use or occupancy of the
Premises or any part thereof by or for the benefit of anyone other than Tenant,
or in any other manner transfer all or any part of Tenant's interest under this
Lease (each and all a "Transfer"), without the prior written consent of
Landlord, which consent (subject to the other provisions of this Section 14)
shall not be unreasonably withheld. If Tenant is a business entity, any direct
or indirect transfer of fifty percent (50%) or more of the ownership interest of
the entity (whether in a single transaction or in the aggregate through more
than one transaction) shall be deemed a Transfer. Notwithstanding any provision
in this Lease to the contrary, Tenant shall not mortgage, pledge, hypothecate or
otherwise encumber this Lease or all or any part of Tenant's interest under this
Lease.
14.2 Reasonable Consent.
(a) Prior to any proposed Transfer, Tenant shall submit in
writing to Landlord (i) the name and legal composition of the proposed assignee,
subtenant, user or other transferee (each a "Proposed Transferee"); (ii) the
nature of the business proposed to be carried on in the Premises; (iii) a
current balance sheet, income statements for the last two years and such other
reasonable financial and other information concerning the Proposed Transferee as
Landlord may request; and (iv) a copy of the proposed assignment, sublease or
other agreement governing the proposed Transfer. Within fifteen (15) Business
Days after Landlord receives all such
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information it shall notify Tenant whether it approves or disapproves such
Transfer or if it elects to proceed under Section 14.7 - Landlord's Right to
Space.
(b) Tenant acknowledges and agrees that, among other
circumstances for which Landlord could reasonably withhold consent to a proposed
Transfer, it shall be reasonable for Landlord to withhold consent where (i) the
Proposed Transferee does not intend itself to occupy the entire portion of the
Premises assigned or sublet, (ii) Landlord reasonably disapproves of the
Proposed Transferee's business operating ability or history, reputation or
creditworthiness or the character of the business to be conducted by the
Proposed Transferee at the Premises, (iii) the Proposed Transferee is a
governmental agency or unit or an existing tenant in the Project, (iv) the
proposed Transfer would violate any "exclusive" rights of any tenants in the
Project, (v) Landlord or Landlord's agent has shown space in the Building to the
Proposed Transferee or responded to any inquiries from the Proposed Transferee
or the Proposed Transferee's agent concerning availability of space in the
Building, at any time within the preceding nine months, or (vi) Landlord
otherwise determines that the proposed Transfer would have the effect of
decreasing the value of the Building or increasing the expenses associated with
operating, maintaining and repairing the Property. In no event may Tenant
publicly offer or advertise all or any portion of the Premises for assignment or
sublease at a rental less than that then sought by Landlord for a direct lease
(nonsublease) of comparable space in the Project.
14.3 Excess Consideration. If Landlord consents to the Transfer, Tenant
shall pay to Landlord as additional rent, within ten (10) days after receipt by
Tenant, any consideration paid by any transferee (the "Transferee") for the
Transfer, including, in the case of a sublease, the excess of the rent and other
consideration payable by the subtenant over the amount of Base Rent and
Additional Rent payable hereunder applicable to the subleased space.
14.4 No Release Of Tenant. No consent by Landlord to any Transfer shall
relieve Tenant of any obligation to be performed by Tenant under this Lease,
whether occurring before or after such consent, assignment, subletting or other
Transfer. Each Transferee shall be jointly and severally liable with Tenant (and
Tenant shall be jointly and severally liable with each Transferee) for the
payment of rent (or, in the case of a sublease, rent in the amount set forth in
the sublease) and for the performance of all other terms and provisions of this
Lease. The consent by Landlord to any Transfer shall not relieve Tenant or any
such Transferee from the obligation to obtain Landlord's express prior written
consent to any subsequent Transfer by Tenant or any Transferee. The acceptance
of rent by Landlord from any other person (whether or not such person is an
occupant of the Premises) shall not be deemed to be a waiver by Landlord of any
provision of this Lease or to be a consent to any Transfer.
14.5 Expenses and Attorneys' Fees. Tenant shall pay to Landlord on
demand all costs and expenses (including reasonable attorneys' fees) incurred by
Landlord in connection with reviewing or consenting to any proposed Transfer
(including any request for consent to, or any waiver of Landlord's rights in
connection with, any security interest in any of Tenant's property at the
Premises). Landlord shall not be entitled under this provision to reimbursement
from Tenant for expenses in excess of $500 per request
14.6 Effectiveness of Transfer. Prior to the date on which any
permitted Transfer (whether or not requiring Landlord's consent) becomes
effective, Tenant shall deliver to
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Landlord a counterpart of the fully executed Transfer document and Landlord's
standard form of Consent to Assignment or Consent to Sublease executed by Tenant
and the Transferee in which each of Tenant and the Transferee confirms its
obligations pursuant to this Lease. Failure or refusal of a Transferee to
execute any such instrument shall not release or discharge the Transferee from
liability as provided herein. The voluntary, involuntary or other surrender of
this Lease by Tenant, or a mutual cancellation by Landlord and Tenant, shall not
work a merger, and any such surrender or cancellation shall, at the option of
Landlord, either terminate all or any existing subleases or operate as an
assignment to Landlord of any or all of such subleases.
14.7 Landlord's Right to Space. Notwithstanding any of the above
provisions of this Section to the contrary, if Tenant notifies Landlord that it
desires to enter into a Transfer, Landlord, in lieu of consenting to such
Transfer, may elect (x) in the case of an assignment or a sublease of the entire
Premises, to terminate this Lease, or (y) in the case of a sublease of less than
the entire Premises, to terminate this Lease as it relates to the space proposed
to be subleased by Tenant. In such event, this Lease will terminate (or the
space proposed to be subleased will be removed from the Premises subject to this
Lease and the Base Rent and Tenant's Share under this Lease shall be
proportionately reduced) on the date the Transfer was proposed to be effective,
and Landlord may lease such space to any party, including the prospective
Transferee identified by Tenant
14.8 Assignment of Sublease Rents. Tenant hereby absolutely and
irrevocably assigns to Landlord any and all rights to receive rent and other
consideration from any sublease and agrees that Landlord, as assignee or as
attorney-in-fact for Tenant for purposes hereof, or a receiver for Tenant
appointed on Landlord's application may (but shall not be obligated to) collect
such rents and other consideration and apply the same toward Tenant's
obligations to Landlord under this Lease; provided, however, that Landlord
grants to Tenant at all times prior to occurrence of any breach or default by
Tenant a revocable license to collect such rents (which license shall
automatically and without notice be and be deemed to have been revoked and
terminated immediately upon any Event of Default).
15. DEFAULT AND REMEDIES.
15.1 Events of Default. The occurrence of any of the following shall
constitute an "Event of Default" by Tenant:
(a) Tenant fails to make any payment of rent when due, or any
amount required to replenish the security deposit as provided in Section 4
above, if payment is full is not received by Landlord within three (3) days
after written notice that it is due.
(b) Tenant abandons the Premises.
(c) Tenant fails timely to deliver any subordination document,
estoppel certificate or financial statement requested by Landlord within the
applicable time period specified in Sections 20 - Encumbrances - and 21 -
Estoppel Certificates and Financial Statements - below.
(d) Tenant violates the restrictions on Transfer set forth in
Section 14 - Assignment and Subletting.
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(e) Tenant ceases doing business as a going concern; makes an
assignment for the benefit of creditors; is adjudicated an insolvent, files a
petition (or files an answer admitting the material allegations of a petition)
seeking relief under any state or federal bankruptcy or other statute, law or
regulation affecting creditors' rights; all or substantially all of Tenant's
assets are subject to judicial seizure or attachment and are not released within
30 days, or Tenant consents to or acquiesces in the appointment of a trustee,
receiver or liquidator for Tenant or for all or any substantial part of Tenant's
assets.
(f) Tenant fails, within ninety (90) days after the commencement
of any proceedings against Tenant seeking relief under any state or federal
bankruptcy or other statute, law or regulation affecting creditors' rights, to
have such proceedings dismissed, or Tenant fails, within ninety (90) days after
an appointment, without Tenant's consent or acquiescence, of any trustee,
receiver or liquidator for Tenant or for all or any substantial part of Tenant's
assets, to have such appointment vacated.
(g) Tenant fails to perform or comply with any provision of this
Lease other than those described in (a) through (f) above, and does not fully
cure such failure within fifteen (15) days after notice to Tenant or, if such
failure cannot be cured within such fifteen (15)-day period, Tenant fails within
such fifteen (15)-day period to commence, and thereafter diligently proceed
with, all actions necessary to cure such failure as soon as reasonably possible
but in all events within ninety (90) days of such notice; provided, however,
that if Landlord in Landlord's reasonable judgment determines that such failure
cannot or will not be cured by Tenant within such ninety (90) days, then such
failure shall constitute an Event of Default immediately upon such notice to
Tenant.
15.2 Remedies. Upon the occurrence of an Event of Default, Landlord
shall have the following remedies, which shall not be exclusive but shall be
cumulative and shall be in addition to any other remedies now or hereinafter
allowed by law:
(a) Landlord may terminate Tenant's right to possession of the
Premises at any time by written notice to Tenant. Tenant expressly acknowledges
that in the absence of such written notice from Landlord, no other act of
Landlord, including re-entry into the Premises, efforts to relet the Premises,
reletting of the Premises for Tenant's account, storage of Tenant's personal
property and Trade Fixtures, acceptance of keys to the Premises from Tenant or
exercise of any other rights and remedies under this Section, shall constitute
an acceptance of Tenant's surrender of the Premises or constitute a termination
of this Lease or of Tenant's right to possession of the Premises. Upon such
termination in writing of Tenant's right to possession of the Premises, as
herein provided, this Lease shall terminate and Landlord shall be entitled to
recover damages from Tenant as provided in California Civil Code Section 1951.2
and any other applicable existing or future Law providing for recovery of
damages for such breach, including the worth at the time of award of the amount
by which the rent which would be payable by Tenant hereunder for the remainder
of the Term after the date of the award of damages, including Additional Rent as
reasonably estimated by Landlord, exceeds the amount of such rental loss as
Tenant proves could have been reasonably avoided, discounted at the discount
rate published by the Federal Reserve Bank of San Francisco for member banks at
the time of the award plus one percent (1%).
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(b) Landlord shall have the remedy described in California Civil
Code Section 1951.4 (Landlord may continue this Lease in effect after Tenant's
breach and abandonment and recover rent as it becomes due, if Tenant has the
right to sublet or assign, subject only to reasonable limitations).
(c) Landlord may cure the Event of Default at Tenant's expense.
If Landlord pays any sum or incurs any expense in curing the Event of Default,
Tenant shall reimburse Landlord upon demand for the amount of such payment or
expense with interest at the Interest Rate from the date the sum is paid or the
expense is incurred until Landlord is reimbursed by Tenant.
(d) Landlord may remove all Tenant's property from the Premises,
and such property may be stored by Landlord in a public warehouse or elsewhere
at the sole cost and for the account of Tenant. If Landlord does not elect to
store any or all of Tenant's property left in the Premises, Landlord may
consider such property to be abandoned by Tenant, and Landlord may thereupon
dispose of such property in any manner deemed appropriate by Landlord. Any
proceeds realized by Landlord on the disposal of any such property shall be
applied first to offset all expenses of storage and sale, then credited against
Tenant's outstanding obligations to Landlord under this Lease, and any balance
remaining after satisfaction of all obligations of Tenant under this Lease shall
be delivered to Tenant.
16. LATE CHARGE AND INTEREST.
16.1 Late Charge. If any payment of rent is not received by Landlord
when due, Tenant shall pay to Landlord on demand as a late charge an additional
amount equal to four percent (4%) of the overdue payment. A late charge shall
not be imposed more than once on any particular installment not paid when due,
but imposition of a late charge on any payment not made when due does not
eliminate or supersede late charges imposed on other (prior) payments not made
when due or preclude imposition of a late charge on other installments or
payments not made when due.
16.2 Interest. In addition to the late charges referred to above, which
are intended to defray Landlord's costs resulting from late payments, any
payment from Tenant to Landlord not paid when due shall at Landlord's option
bear interest from the date due until paid to Landlord by Tenant at the rate of
fifteen percent (15%) per annum or the maximum lawful rate that Landlord may
charge to Tenant under applicable laws, whichever is less (the "Interest Rate").
Acceptance of any late charge and/or interest shall not constitute a waiver of
Tenant's default with respect to the overdue sum or prevent Landlord from
exercising any of its other rights and remedies under this Lease.
17. WAIVER. No provisions of this Lease shall be deemed waived by Landlord
unless such waiver is in a writing signed by Landlord. The waiver by Landlord of
any breach of any provision of this Lease shall not be deemed a waiver of such
provision or of any subsequent breach of the same or any other provision of this
Lease. No delay or omission in the exercise of any right or remedy of Landlord
upon any default by Tenant shall impair such right or remedy or be construed as
a waiver. Landlord's acceptance of any payments of rent due under this Lease
shall not be deemed a waiver of any default by Tenant under this Lease
(including Tenant's
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recurrent failure to timely pay rent) other than Tenant's nonpayment of the
accepted sums, and no endorsement or statement on any check or payment or in any
letter or document accompanying any check or payment shall be deemed an accord
and satisfaction. Landlord's consent to or approval of any act by Tenant
requiring Landlord's consent or approval shall not be deemed to waive or render
unnecessary Landlord's consent to or approval of any subsequent act by Tenant.
18. ENTRY, INSPECTION AND CLOSURE. Upon reasonable oral or written notice
to Tenant (and without notice in emergencies), Landlord and its authorized
representatives may enter the Premises at all reasonable times to: (a) determine
whether the Premises are in good condition, (b) determine whether Tenant is
complying with its obligations under this Lease, (c) perform any maintenance or
repair of the Premises or the Building that Landlord has the right or obligation
to perform, (d) install or repair improvements for other tenants where access to
the Premises is required for such installation or repair, (e) serve, post or
keep posted any notices required or allowed under the provisions of this Lease,
(f) show the Premises to prospective brokers, agents, buyers, transferees,
Mortgagees or tenants, or (g) do any other act or thing necessary for the safety
or preservation of the Premises or the Building. When reasonably necessary
Landlord may temporarily close entrances, doors, corridors, elevators or other
facilities in the Building without liability to Tenant by reason of such
closure. Landlord shall conduct its activities under this Section in a manner
that will minimize inconvenience to Tenant without incurring additional expense
to Landlord. In no event shall Tenant be entitled to an abatement of rent on
account of any entry by Landlord, and Landlord shall not be liable in any manner
for any inconvenience, loss of business or other damage to Tenant or other
persons arising out of Landlord's entry on the Premises in accordance with this
Section. No action by Landlord pursuant to this paragraph shall constitute an
eviction of Tenant, constructive or otherwise, entitle Tenant to an abatement of
rent or to terminate this Lease or otherwise release Tenant from any of Tenant's
obligations under this Lease.
19. SURRENDER AND HOLDING OVER.
19.1 Surrender. Upon the expiration or termination of this Lease,
Tenant shall surrender the Premises and all Tenant Improvements and Alterations
to Landlord broom-clean and in their original condition, except for reasonable
wear and tear, damage from casualty or condemnation and any changes resulting
from approved Alterations; provided, however, that prior to the expiration or
termination of this Lease Tenant shall remove all telephone and other cabling
installed in the Building by Tenant and remove from the Premises all Tenant's
personal property and any Trade Fixtures and all Alterations that Landlord has
elected to require Tenant to remove as provided in Section 6.1 - Tenant
Improvements & Alterations, and repair any damage caused by such removal. If
such removal is not completed before the expiration or termination of the Term,
Landlord shall have the right (but no obligation) to remove the same, and Tenant
shall pay Landlord on demand for all costs of removal and storage thereof and
for the rental value of the Premises for the period from the end of the Term
through the end of the time reasonably required for such removal. Landlord shall
also have the right to retain or dispose of all or any portion of such property
if Tenant does not pay all such costs and retrieve the property within ten (10)
Business Days after notice from Landlord (in which event title to all such
property described in Landlord's notice shall be transferred to and vest in
Landlord). Tenant waives all Claims against Landlord for any damage or loss to
Tenant resulting from Landlord's
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removal, storage, retention, or disposition of any such property. Upon
expiration or termination of this Lease or of Tenant's possession, whichever is
earliest, Tenant shall surrender all keys to the Premises or any other part of
the Building and shall deliver to Landlord all keys for or make known to
Landlord the combination of locks on all safes, cabinets and vaults that may be
located in the Premises. Tenant's obligations under this Section shall survive
the expiration or termination of this Lease.
19.2 Holding Over. If Tenant (directly or through any Transferee or
other successor-in-interest of Tenant) remains in possession of the Premises
after the expiration or termination of this Lease, Tenant's continued possession
shall be on the basis of a tenancy at the sufferance of Landlord. No act or
omission by Landlord, other than its specific written consent, shall constitute
permission for Tenant to continue in possession of the Premises, and if such
consent is given or declared to have been given by a court judgment, Landlord
may terminate Tenant's holdover tenancy at any time upon seven (7) days written
notice. In such event, Tenant shall continue to comply with or perform all the
terms and obligations of Tenant under this Lease, except that the monthly Base
Rent during Tenant's holding over shall be 175% of the Base Rent payable in the
last full month prior to the termination hereof. Acceptance by Landlord of rent
after such termination shall not constitute a renewal or extension of this
Lease; and nothing contained in this provision shall be deemed to waive
Landlord's right of re-entry or any other right hereunder or at law. Tenant
shall indemnify, defend and hold Landlord harmless from and against all Claims
arising or resulting directly or indirectly from Tenant's failure to timely
surrender the Premises, including (i) any rent payable by or any loss, cost, or
damages claimed by any prospective tenant of the Premises, and (ii) Landlord's
damages as a result of such prospective tenant rescinding or refusing to enter
into the prospective lease of the Premises by reason of such failure to timely
surrender the Premises.
20. ENCUMBRANCES.
20.1 Subordination. This Lease is expressly made subject and
subordinate to any mortgage, deed of trust, ground lease, underlying lease or
like encumbrance affecting any part of the Property or any interest of Landlord
therein which is now existing or hereafter executed or recorded ("Encumbrance");
provided, however, that such subordination shall only be effective, as to future
Encumbrances, if the holder of the Encumbrance agrees that this Lease shall
survive the termination of the Encumbrance by lapse of time, foreclosure or
otherwise so long as Tenant is not in default under this Lease. Provided the
conditions of the preceding sentence are satisfied, Tenant shall execute and
deliver to Landlord, within ten (10) days after written request therefor by
Landlord and in a form reasonably requested by Landlord, any additional
documents evidencing the subordination of this Lease with respect to any such
Encumbrance and the nondisturbance agreement of the holder of any such
Encumbrance. If the interest of Landlord in the Property is transferred pursuant
to or in lieu of proceedings for enforcement of any Encumbrance, Tenant shall
immediately and automatically attorn to the new owner, and this Lease shall
continue in full force and effect as a direct lease between the transferee and
Tenant on the terms and conditions set forth in this Lease.
20.2 Mortgagee Protection. Tenant agrees to give any holder of any
Encumbrance covering any part of the Property ("Mortgagee"), by registered mail,
a copy of any notice of default served upon Landlord, provided that prior to
such notice Tenant has been notified in
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writing (by way of notice of assignment of rents and leases, or otherwise) of
the address of such Mortgagee. If Landlord shall have failed to cure such
default within thirty (30) days from the effective date of such notice of
default, then the Mortgagee shall have an additional thirty (30) days within
which to cure such default or if such default cannot be cured within that time,
then such additional time as may be necessary to cure such default (including
the time necessary to foreclose or otherwise terminate its Encumbrance, if
necessary to effect such cure), and this Lease shall not be terminated so long
as such remedies are being diligently pursued.
21. ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS.
21.1 Estoppel Certificates. Within ten (10) days after written request
therefor, Tenant shall execute and deliver to Landlord, in a form provided by or
satisfactory to Landlord, a certificate stating that this Lease is in full force
and effect, describing any amendments or modifications hereto, acknowledging
that this Lease is subordinate or prior, as the case may be, to any Encumbrance
and stating any other information Landlord may reasonably request, including the
Term, the monthly Base Rent, the date to which Rent has been paid, the amount of
any security deposit or prepaid rent, whether either party hereto is in default
under the terms of the Lease, and whether Landlord has completed its
construction obligations hereunder (if any). Tenant irrevocably constitutes,
appoints and authorizes Landlord as Tenant's special attorney-in-fact for such
purpose to complete, execute and deliver such certificate if Tenant fails timely
to execute and deliver such certificate as provided above. Any person or entity
purchasing, acquiring an interest in or extending financing with respect to the
Property shall be entitled to rely upon any such certificate. If Tenant fails to
deliver such certificate within ten (10) days after Landlord's second written
request therefor, Tenant shall be liable to Landlord for any damages incurred by
Landlord including any profits or other benefits from any financing of the
Property or any interest therein which are lost or made unavailable as a result,
directly or indirectly, of Tenant's failure or refusal to timely execute or
deliver such estoppel certificate.
21.2 Financial Statements. Within ten (10) days after written request
therefor, but not more than once a year, Tenant shall deliver to Landlord a copy
of the financial statements (including at least a year end balance sheet and a
statement of profit and loss) of Tenant (and of each guarantor of Tenant's
obligations under this Lease) for each of the three most recently completed
years, prepared in accordance with generally accepted accounting principles
(and, if such is Tenant's normal practice, audited by an independent certified
public accountant), all then available subsequent interim statements, and such
other financial information as may reasonably be requested by Landlord or
required by any Mortgagee.
22. NOTICES. Any notice, demand, request, consent or approval that either
party desires or is required to give to the other party under this Lease shall
be in writing and shall be served personally, delivered by messenger or courier
service, or sent by U.S. certified mail, return receipt requested, postage
prepaid, addressed to the other party at the party's address for notices set
forth in the Basic Lease Information. Any notice required pursuant to any Laws
may be incorporated into, given concurrently with or given separately from any
notice required under this Lease. Notices shall be deemed to have been given and
be effective on the earlier of (a) receipt (or refusal of delivery or receipt);
or (b) one (1) day after acceptance by the independent service for delivery, if
sent by independent messenger or courier service, or three (3) days after
mailing if sent by mail in accordance with this Section. Either party may change
its
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address for notices hereunder, effective fifteen (15) days after notice to the
other party complying with this Section. If Tenant sublets the Premises, notices
from Landlord shall be effective on the subtenant when given to Tenant pursuant
to this Section.
23. ATTORNEYS' FEES. In the event of any dispute between Landlord and
Tenant in any way related to this Lease, and whether involving contract and/or
tort claims, the non-prevailing party shall pay to the prevailing party all
reasonable attorneys' fees and costs and expenses of any type, without
restriction by statute, court rule or otherwise, incurred by the prevailing
party in connection with any action or proceeding (including any appeal and the
enforcement of any judgment or award), whether or not the dispute is litigated
or prosecuted to final judgment (collectively, "Fees"). The "prevailing party"
shall be determined based upon an assessment of which party's major arguments or
positions taken in the action or proceeding could fairly be said to have
prevailed (whether by compromise, settlement, abandonment by the other party of
its claim or defense, final decision, after any appeals, or otherwise) over the
other party's major arguments or positions on major disputed issues. Any Fees
incurred in enforcing a judgment shall be recoverable separately from any other
amount included in the judgment and shall survive and not be merged in the
judgment. The Fees shall be deemed an "actual pecuniary loss" within the meaning
of Bankruptcy Code Section 365(b)(1)(B), and notwithstanding the foregoing, all
Fees incurred by either party in any bankruptcy case filed by or against the
other party, from and after the order for relief until this Lease is rejected or
assumed in such bankruptcy case, will be "obligations of the debtor" as that
phrase is used in Bankruptcy Code Section 365(d)(3).
24. QUIET POSSESSION. Subject to Tenant's full and timely performance of
all of Tenant's obligations under this Lease and subject to the terms of this
Lease, including Section 20 - Encumbrances, Tenant shall have the quiet
possession of the Premises throughout the Term as against any persons or
entities lawfully claiming by, through or under Landlord.
25. SECURITY MEASURES. Landlord may, but shall be under no obligation to,
implement security measures for the Property, such as the registration or search
of all persons entering or leaving the Building, requiring identification for
access to the Building, evacuation of the Building for cause, suspected cause,
or for drill purposes, the issuance of magnetic pass cards or keys for Building
or elevator access and other actions that Landlord deems necessary or
appropriate to prevent any threat of property loss or damage, bodily injury or
business interruption; provided, however, that such measures shall be
implemented in a way as not to inconvenience tenants of the Building
unreasonably. If Landlord uses an access card system, Landlord may require
Tenant to pay Landlord a deposit for each after-hours Building access card
issued to Tenant. Tenant shall be responsible for any loss, theft or breakage of
any such cards, which must be returned by Tenant to Landlord upon expiration or
earlier termination of the Lease. Landlord may retain the deposit for any card
not so returned. Landlord shall at all times have the right to change, alter or
reduce any such security services or measures. Tenant shall cooperate and comply
with, and cause Tenant's Representatives and Visitors to cooperate and comply
with, such security measures. Landlord, its agents and employees shall have no
liability to Tenant or its Representatives or Visitors for the implementation or
exercise of, or the failure to implement or exercise, any such security measures
or for any resulting disturbance of Tenant's use or enjoyment of the Premises.
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26. FORCE MAJEURE. If Landlord is delayed, interrupted or prevented from
performing any of its obligations under this Lease, including its obligations
under the Construction Rider (if any), and such delay, interruption or
prevention is due to fire, act of God, governmental act or failure to act, labor
dispute, unavailability of materials or any cause outside the reasonable control
of Landlord, then the time for performance of the affected obligations of
Landlord shall be extended for a period equivalent to the period of such delay,
interruption or prevention.
27. RULES AND REGULATIONS. Tenant shall be bound by and shall comply with
the rules and regulations attached to and made a part of this Lease as Exhibit C
to the extent those rules and regulations are not in conflict with the terms of
this Lease, as well as any reasonable rules and regulations hereafter adopted by
Landlord for all tenants of the Building, upon notice to Tenant thereof
(collectively, the "Building Rules"). Landlord shall not be responsible to
Tenant or to any other person for any violation of, or failure to observe, the
Building Rules by any other tenant or other person.
28. LANDLORD'S LIABILITY. The term "Landlord," as used in this Lease, shall
mean only the owner or owners of the Building at the time in question. In the
event of any conveyance of title to the Building, then from and after the date
of such conveyance, the transferor Landlord shall be relieved of all liability
with respect to Landlord's obligations to be performed under this Lease after
the date of such conveyance. Notwithstanding any other term or provision of this
Lease, the liability of Landlord for its obligations under this Lease is limited
solely to Landlord's interest in the Building as the same may from time to time
be encumbered, and no personal liability shall at any time be asserted or
enforceable against any other assets of Landlord or against Landlord's partners
or members or its or their respective partners, shareholders, members,
directors, officers or managers on account of any of Landlord's obligations or
actions under this Lease.
29. CONSENTS AND APPROVALS.
29.1 Determination in Good Faith. Wherever the consent, approval,
judgment or determination of Landlord is required or permitted under this Lease,
Landlord may exercise its good faith business judgment in granting or
withholding such consent or approval or in making such judgment or determination
without reference to any extrinsic standard of reasonableness, unless the
specific provision contained in this Lease providing for such consent, approval,
judgment or determination specifies that Landlord's consent or approval is not
to be unreasonably withheld, or that such judgment or determination is to be
reasonable, or otherwise specifies the standards under which Landlord may
withhold its consent. If it is determined that Landlord failed to give its
consent where it was required to do so under this Lease, Tenant shall be
entitled to injunctive relief but shall not to be entitled to monetary damages
or to terminate this Lease for such failure.
29.2 No Liability Imposed on Landlord. The review and/or approval by
Landlord of any item or matter to be reviewed or approved by Landlord under the
terms of this Lease or any Exhibits or Addenda hereto shall not impose upon
Landlord any liability for the accuracy or sufficiency of any such item or
matter or the quality or suitability of such item for its intended use. Any such
review or approval is for the sole purpose of protecting Landlord's interest in
the Property, and no third parties, including Tenant or the Representatives and
Visitors of Tenant or
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any person or entity claiming by, through or under Tenant, shall have any rights
as a consequence thereof.
30. WAIVER OF RIGHT TO JURY TRIAL. Landlord and Tenant waive their
respective rights to trial by jury of any contract or tort claim, counterclaim,
cross-complaint, or cause of action in any action, proceeding, or hearing
brought by either party against the other on any matter arising out of or in any
way connected with this Lease, the relationship of Landlord and Tenant, or
Tenant's use or occupancy of the Premises, including any claim of injury or
damage or the enforcement of any remedy under any current or future law,
statute, regulation, code, or ordinance.
31. BROKERS. Landlord shall pay the fee or commission of the broker or
brokers identified in the Basic Lease Information (the "Broker") in accordance
with Landlord's separate written agreement with the Broker, if any. Tenant
warrants and represents to Landlord that in the negotiating or making of this
Lease neither Tenant nor anyone acting on Tenant's behalf has dealt with any
broker or finder who might be entitled to a fee or commission for this Lease
other than the Broker. Tenant shall indemnify and hold Landlord harmless from
any claim or claims, including costs, expenses and attorney's fees incurred by
Landlord asserted by any other broker or finder for a fee or commission based
upon any dealings with or statements made by Tenant or Tenant's Representatives.
32. RELOCATION OF PREMISES. For the purpose of maintaining an economical
and proper distribution of tenants acceptable to Landlord throughout the
Project, Landlord shall have the right from time to time during the Term to
relocate the Premises within the Project, provided that (a) the rentable and
usable area of the new Premises is of equivalent size to the existing Premises,
subject to a variation of up to ten percent (10%), (b) Landlord shall pay the
cost of providing tenant improvements in the new Premises, which shall be
substantially comparable in layout to those in the existing Premises, and (c)
Landlord shall pay reasonable costs (to the extent such costs are submitted in
writing to Landlord and approved in writing by Landlord prior to such move) of
moving Tenant's Trade Fixtures and personal property to the new Premises.
Landlord shall deliver to Tenant written notice of Landlord's election to
relocate the Premises, specifying the new location and the amount of rent
payable therefor, at least sixty (60) days prior to the date the relocation is
to be effective.
33. ENTIRE AGREEMENT. This Lease, including the Exhibits and any Addenda
attached hereto, and the documents referred to herein, if any, constitute the
entire agreement between Landlord and Tenant with respect to the leasing of
space by Tenant in the Building, and supersede all prior or contemporaneous
agreements, understandings, proposals and other representations by or between
Landlord and Tenant, whether written or oral, all of which are merged herein.
Neither Landlord nor Landlord's agents have made any representations or
warranties with respect to the Premises, the Building, the Project or this Lease
except as expressly set forth herein, and no rights, easements or licenses shall
be acquired by Tenant by implication or otherwise unless expressly set forth
herein. The submission of this Lease for examination does not constitute an
option for the Premises and this Lease shall become effective as a binding
agreement only upon execution and delivery thereof by Landlord to Tenant.
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34. MISCELLANEOUS. This Lease may not be amended or modified except by a
writing signed by Landlord and Tenant Subject to Section 14 - Assignment and
Subletting and Section 28 - Landlord's Liability, this Lease shall be binding on
and shall inure to the benefit of the parties and their respective successors,
assigns and legal representatives. The determination that any provisions hereof
may be void, invalid, illegal or unenforceable shall not impair any other
provisions hereof and all such other provisions of this Lease shall remain in
full force and effect. The unenforceability, invalidity or illegality of any
provision of this Lease under particular circumstances shall not render
unenforceable, invalid or illegal other provisions of this Lease, or the same
provisions under other circumstances. This Lease shall be construed and
interpreted in accordance with the laws (excluding conflict of laws principles)
of the State in which the Building is located. The provisions of this Lease
shall be construed in accordance with the fair meaning of the language used and
shall not be strictly construed against either party, even if such party drafted
the provision in question. When required by the context of this Lease, the
singular includes the plural. Wherever the term "including" is used in this
Lease, it shall be interpreted as meaning "including, but not limited to" the
matter or matters thereafter enumerated. The captions contained in this Lease
are for purposes of convenience only and are not to be used to interpret or
construe this Lease. If more than one person or entity is identified as Tenant
hereunder, the obligations of each and all of them under this Lease shall be
joint and several. Time is of the essence with respect to this Lease, except as
to the conditions relating to the delivery of possession of the Premises to
Tenant. Neither Landlord nor Tenant shall record this Lease.
35. AUTHORITY. If Tenant is a corporation, partnership, limited liability
company or other form of business entity, each of the persons executing this
Lease on behalf of Tenant warrants and represents that Tenant is a duly
organized and validly existing entity, that Tenant has full right and authority
to enter into this Lease and that the persons signing on behalf of Tenant are
authorized to do so and have the power to bind Tenant to this Lease. Tenant
shall provide Landlord upon request with evidence reasonably satisfactory to
Landlord confirming the foregoing representations.
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WITNESS WHEREOF, Landlord and Tenant have entered into this Lease as of
the date first above written.
TENANT: LANDLORD:
AMERICOM USA, INC. PRUNEYARD ASSOCIATES, LLC,
a Delaware corporation a California limited liability company
By: /s/ Authorized Signatory By: Cornerstone Holdings, LLC,
------------------------- a Delaware limited liability company,
Name: ______________ its Manager
Title: ______________
By: /s/ David Loomis By: /s/ Authorized Signatory
----------------------- --------------------------
Name: David Loomis Name:
Title: President Title: Authorized Signatory
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