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EXHIBIT 10.4
[CPS LOGO]
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LEASE SUMMARY
PREMISES: 750 N. PASTORIA, SUNNYVALE, CA
SQUARE FEET: 10,560
LEASE COMMENCEMENT: August 1, 2000
LEASE EXPIRATION: July 31, 2004
LANDLORD: Renault & Handley
LANDLORD CONTACT NAME: Ray Handley
LANDLORD CONTACT NUMBER: (650) 321-3040
TERM OF LEASE: 48 months
TENANT IMPROVEMENT ALLOWANCE: As-is
INITIAL RENT: $4.50 psf
RENT ADJUSTMENTS: 4% annual increases
SECURITY DEPOSIT: $53,453.54 in cash;
$641,000.00 in Letter of Credit
PRESENTED TO
Alliance Fiber Optics, Inc.
BY
Wendy Roberts
Brittain Cheney
CPS, THE COMMERCIAL PROPERTY SERVICES COMPANY
475 EL CAMINO REAL, SUITE 100
SANTA CLARA, CA 95050
(408) 615-3400
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Renault & Handley
INDUSTRIAL & COMMERCIAL REAL ESTATE
THIS LEASE, executed in duplicate at Palo Alto, California,
this 26th day of June, 2000, by and between
PARTIES
Renault & Handley Employees Investment Co.
and
Alliance Fiber Optic Products, Inc., a California corporation
hereinafter referred to respectively as "Lessor" and "Lessee",
without regard to number or gender,
PREMISES 1. WITNESSETH: That Lessor hereby leases to Lessee, and Lessee
hires from Lessor, those certain premises, hereinafter referred
to as "the Premises," situated in the City of Sunnyvale, County
of Santa Clara, State of California, and more particularly
described as follows:
An approximate 10,560 square foot freestanding building
situated on and including an approximate 0.6-acre lot, commonly
known as 750-752 N. Pastoria Avenue.
USE 2. The Premises shall be used and occupied by Lessee solely
for the following purposes:
Research & Development and manufacturing of fiber optic
components and general office and for no other purpose without
the prior written consent of Lessor.
TERM 3. The term shall be for four (4) years, commencing on the
1st day of August, 2000, and ending on the 31st day of July,
2004.
RENTAL 4. Monthly Base Rent shall be payable to the Lessor without
defense, deduction or offset at the address set forth in
paragraph 23 below, or at such other place or places as may be
designated from time to time by the Lessor, in the following
amounts:
Forty Seven Thousand Five Hundred Twenty and No/100ths
Dollars ($47,520.00) shall be due upon execution of this Lease
constituting Base Rent for August 2000. Forty Seven Thousand Five
Hundred Twenty and No/100ths Dollars ($47,520.00) shall be due on
September 1, 2000 and on the first day of each succeeding month
to and including July 1, 2001. Forty Nine Thousand Four Hundred
Twenty and 80/100ths Dollars $49,420.80) shall be due August 1,
2001 and on the first day of each succeeding month to and
including July 1, 2002. Fifty One Thousand Three Hundred Ninety
Seven and 63/100ths Dollars ($51,397.63) shall be due August 1,
2002 and on the first day of each succeeding month to and
including July 1, 2003. Fifty Three Thousand Four Hundred Fifty
Three and 54/100ths Dollars ($53,453.54) shall be due August 1,
2003 and on the first day of each succeeding month to and
including July 1, 2004.
Base Rent shall be paid monthly in advance. In addition,
Lessee shall pay to Lessor with the Monthly Base Rent, as
additional rent, a monthly management fee equal to three percent
(3%) of the Monthly Base Rent. All other costs and charges
payable by Lessee in accordance with the terms of this Lease
(including property taxes, insurance premiums and maintenance
costs) shall be deemed to be additional rent.
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SECURITY 5. Lessee has deposited with Lessor $53,453.54 as security
DEPOSIT for the full and faithful performance of each and every term,
provision, covenant and condition of this Lease. In the event
Lessee defaults in respect of any of the terms, provisions,
covenants or conditions of this Lease, including, but not
limited to the payment of rent, Lessor may use, apply or retain
the whole or any part of such security for the payment of any
rent in default or for any other sum which Lessor may spend or
be required to spend by reason of Lessee's default. Should
Lessee faithfully and fully comply with all of the terms,
provisions, covenants and conditions of this Lease, the security
or any balance thereof shall be returned to Lessee or, at the
option of Lessor, to the last assignee of Lessee's interest in
this Lease at the expiration of the term hereof. Lessee shall
not be entitled to any interest on said security deposit. SEE
PARAGRAPH 37
POSSESSION 6. If Lessor, for any reason whatsoever, cannot deliver
possession of the Premises to Lessee at the commencement of the
said term, as hereinbefore specified, this Lease shall not be
void or voidable, nor shall Lessor, or Lessor's agents, be
liable to Lessee for any loss or damage resulting therefrom; but
in that event the commencement and termination dates of the
Lease and all other dates affected thereby shall be revised to
conform to the date of Lessor's delivery of possession.
Notwithstanding the foregoing, if the period of delay of
delivery exceeds thirty (30) days, Lessee, at his or its option,
may declare this Lease null and void by notice to Lessor at any
time prior to delivery of the Premises.
ACCEPTANCE OF 7. By entry hereunder, the Lessee accepts the Premises from
PREMISES AND Lessor in its "as is", "where is" condition. Lessor has made no
CONSENT TO representations or warranties respecting the Premises and
SURRENDER Lessee has investigated and inspected the Premises and has
satisfied itself that the Premises are suitable for the Lessee's
intended use thereof and are in compliance with applicable laws
and codes; provided, however, Lessor hereby warrants that it
shall repair any material defects in the roof covering, HVAC
system, (excluding however, those elements of the HVAC system
serving and/or dedicated to the existing clean rooms),
electrical and plumbing systems existing as of the commencement
of the Lease, provided Lessee gives Lessor written notice
specifying such defects in reasonable detail within thirty (30)
days following commencement of this Lease. Lessor shall have no
obligation to contribute toward any improvements to the Premises
whatsoever. The Lessee agrees on the last day of the term
hereof, or on sooner termination of this Lease, to surrender to
Lessor the Premises, which shall, except as otherwise provided
in paragraph 9 below, include all alterations, additions, and
improvements which may have been made in, to, or on the Premises
by Lessor or Lessee, in the same good condition as at Lessee's
entry into the Premises excepting for such wear and tear as
would be normal for the period of the Lessee's occupancy. The
Lessee, on or before the end of the term or sooner termination
of this Lease, shall remove all Lessee's personal property and
trade fixtures from the premises and all property not so removed
shall be deemed to be abandoned by the Lessee. If the Premises
are not surrendered at the end of the term or sooner termination
of this Lease, the Lessee shall indemnify the Lessor against
loss or liability resulting from delay by the Lessee in so
surrendering the Premises including, without limitation, any
claims made by any succeeding tenant founded on such delay.
USES PROHIBITED 8. Lessee shall not commit, or suffer to be committed, any
waste upon the Premises, or any nuisance, or other act or thing
which may disturb the quiet enjoyment of any other tenant in or
around the buildings in which the Premises may be located, or
allow any sale by auction upon the Premises, or allow the
Premises to be used for any improper, immoral, unlawful or
objectionable purpose, or place any loads upon the floor, walls,
or roof which endanger the structure, or place any harmful
liquids in the drainage system of the building. No waste
materials or refuse shall be dumped upon or permitted to remain
upon any part of the Premises outside of the building proper. No
materials, supplies, equipment, finished products or
semi-finished products, raw materials or articles of any nature
shall be stored upon or permitted to remain on any portion of
the Premises outside of the buildings proper.
ALTERATIONS AND 9. Lessee shall make no alterations, additions or
ADDITIONS improvements to the Premises or any part thereof
(collectively "Alterations") without first obtaining the prior
written consent of the Lessor. All Alterations shall be in
accordance with plans and specifications approved by Lessor and
shall be carried out by a reputable licensed contractor and in
compliance with all applicable laws, codes, rules and
regulations. The Lessor may impose as a condition to the
aforesaid consent such additional requirements as Lessor may
deem necessary in Lessor's sole discretion, including without
limitation requirements respecting the manner in which the work
is done, Lessor's right of approval of the contractor by whom
the work is to be performed, and the times during which it is to
be accomplished. Upon written request of Lessor prior to the
expiration or earlier termination of the Lease, Lessee will
remove any or all Alterations installed by or for Lessee. All
Alterations not specified to be removed shall at the expiration
of earlier termination of the lease become the property of the
Lessor and remain upon and be surrendered with the Premises. All
movable furniture, business and trade fixtures, and machinery
and equipment shall remain the property of the Lessee and may be
removed by the Lessee at any time during the Lease term when
Lessee is not in default hereunder. Items which are not to be
deemed as movable furniture, business and trade fixtures, or
machinery and equipment shall include heating, lighting,
electrical systems, air conditioning, partitioning, carpeting,
or any other installation which has become an integral part of
the Premises. The Lessee will give the Lessor five (5) business
days notice prior to the commencement of any Alterations work
and will at all times permit notices of non-responsibility to be
posted and to remain posted until the completion of Alterations.
SEE PARAGRAPH 38
MAINTE- 10. Lessee shall, at Lessee's sole cost, keep and maintain
NANCE OF the Premises and appurtenances and every part thereof, including
PREMISES but not limited to, glazing, sidewalks, plumbing, and electrical
systems, any store front, exterior paint and all components of
the interior of the Premises in good order, condition, and
repair. Lessor shall, at Lessor's sole cost and expense,
maintain the structural integrity of the exterior walls, and
structural portions of the roof, foundations and floors, except
that Lessee shall pay, as additional rent, the cost of any
repairs or replacements necessitated by the negligence or
wrongful act of the Lessee or Lessee's agents or employees.
Lessor shall, at Lessee's sole cost and expense, maintain,
repair and (if necessary in the judgment of Lessor's experts)
replace the roof covering, HVAC system, landscaping and parking
lot surface ("Lessor's Maintenance Services") during the term of
this Lease, as may be extended. Lessee shall reimburse Lessor as
Additional Rent the cost incurred by Lessor in performing
Lessor's Maintenance Services, without mark-up, within thirty
(30) days after receipt of invoice from Lessor; provided,
however, that (except where replacement of the parking lot
surface, landscaping, roof or HVAC components are necessitated
by the acts of the Lessee or Lessee's agents or employees, in
which event Lessee shall pay the costs thereof in a lump sum on
demand), costs of replacement (as opposed to repair) of the
foregoing shall be amortized over the useful life thereof, and
Lessee shall pay Lessor as Additional Rent a monthly payment
equal to the monthly amortization, together with interest on the
unamortized amount at an annual rate of twelve percent (12%).
Lessee expressly waives the benefits of any statute now or
hereafter in effect which would otherwise afford the Lessee the
right to make repairs at Lessor's expense or to terminate this
Lease because of Lessor's failure to
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keep the Premises in good order, condition or repair.
FIRE AND 11. Lessee shall not use, or permit the Premises, or any
EXTENDED part thereof, to be used, for any purposes other than that for
COVERAGE which the Premises are hereby leased and no use shall be made
INSURANCE AND or permitted to be made on the Premises, nor acts done, which
SUBROGATION will cause a cancellation of any insurance policy covering the
Premises, or any part thereof, nor shall Lessee sell or permit
to be kept, used or sold, in or about the Premises, any article
which may be prohibited by the standard form of fire insurance
policies. Lessee shall, at its sole cost and expense, comply
with any and all requirements, pertaining to the Premises, of
any insurance organization or company, necessary for the
maintenance of reasonable fire and public liability insurance,
covering said building and appurtenances.
11.1 Lessee shall, at its expense, obtain and keep in
force during the term of this Lease a policy of commercial
general liability insurance (including cross liability)
insuring Lessee, Lessor, Lessor's Officers, Lessor's property
manager and Lessor's lender, against any liability arising out
of the condition, use, occupancy or maintenance of the
Premises. Evidence of coverage must be in the form of a
certificate of insurance accompanied by the appropriate
additional insured endorsements. Such insurance policy shall
have a combined single limit for both bodily injury and
property damage in an amount not less than Two Million and
no/100ths Dollars ($2,000,000), which aggregate amount shall be
specific to the Premises. The limits of said insurance shall
not limit the liability of Lessee hereunder.
11.2 Lessee shall at its expense, keep in force during
the term of this Lease, a policy of fire and property damage
insurance in a "special" form with a sprinkler leakage
endorsement, insuring Lessee's inventory, fixtures, equipment
and personal property within the Premises for the full
replacement value thereof. Upon execution of this Lease and
annually thereafter upon renewal of such policies, Lessee shall
provide Lessor with certificates of insurance, together with
appropriate endorsements, evidencing coverages the Lessee is
required to carry pursuant to 11.1 and 11.2. The policies shall
provide for thirty (30) days advance written notice of
cancellation to Lessor and Lessor's lender.
11.3 Lessor shall maintain a policy of commercial
general liability insurance and a policy or policies of fire
and property damage insurance in a "special" form, with
sprinkler leakage and, at the option of Lessor, earthquake
endorsements, covering loss or damage to the building,
including Lessee's leasehold improvements installed with the
written consent of Lessor, for the full replacement cost
thereof.
11.4 Lessee shall pay to Lessor as additional rent,
during the term hereof, upon receipt of an invoice therefore,
one hundred percent (100%) of the premiums and deductibles
(provided, the deductible amount shall be amortized over the
useful life of the improvement for which such insurance
deductible is applicable and Lessee shall only be obligated to
reimburse Lessor for the amortized portion of the deductible
amount that occurs during the term of this Lease) for any
insurance obtained by Lessor pursuant to 11.3 above. Lessor may
obtain such insurance for the Premises separately, or together
with other property which Lessor elects to insure together
under blanket policies of insurance. In such case Lessee shall
be liable for only such portion of the premiums for such
blanket policies as are allocable to the Premises. It is
understood and agreed that Lessee's obligation under this
paragraph shall be prorated to reflect the Commencement Date
and Expiration Date of the Lease.
11.5 Lessee and Lessor each hereby waive any and all
rights of recovery against the other, or against the officers,
directors, employees, partners, agents and representatives of
the other, for loss of or damage to the property of the waiving
party or the property of others under its control, to the
extent such loss or damage is insured against under any
insurance policy carried or required to be carried by Lessor or
Lessee hereunder. Each party shall notify their respective
insurance carriers of this waiver.
ABANDON- 12. Lessee shall not abandon the Premises at any time during
MENT the term; and if Lessee shall abandon or surrender the
Premises, or be dispossessed by process of law, or otherwise,
any personal property belonging to Lessee and left on the
Premises shall be deemed to be abandoned, at the option of
Lessor, except such property as may be mortgaged to Lessor.
FREE FROM LIENS 13. Lessee shall keep the Premises and the property
in which the Premises are situated, free from any liens arising
out of any work performed, materials furnished, or obligations
incurred by Lessee.
COMPLIANCE WITH 14. Lessee shall, at his sole cost and expense, comply with
GOVERN- all statutes, codes, ordinances, rules, regulations and other
MENTAL requirements of all Municipal, State and Federal authorities
REGULATIONS (collectively, "Laws") now in force, or which may hereafter be
in force, pertaining to the Premises, and shall faithfully
observe in the use of the Premises all Municipal ordinances and
State and Federal statutes now in force or which may hereafter
be in force. The judgment of any court of competent
jurisdiction, or the admission of Lessee in any action or
proceeding against Lessee, whether Lessor be a party thereto or
not, that Lessee has violated, or that the Premises are not in
compliance with, any Laws in the use of the Premises, shall be
conclusive of that fact as between Lessor and Lessee. Lessee's
obligations under this paragraph 14 shall include the obligation
to make, at Lessee's sole cost, any alterations or improvements
to the Premises which are required by applicable Laws, provided
that (a) as to such alterations or improvements which are not
required by reason of Lessee's particular use of the Premises or
by reason of other alterations or improvements being undertaken
by Lessee, Lessee shall only be required to pay an allocable
portion of the costs of such required alterations or
improvements based on the ratio of the remaining lease term to
the useful life of such alterations or improvements, and (b)
Lessee shall not be required to pay any portion of the cost of
alterations or improvements which are legally required to be
made as of the date of this Lease and as to which Lessor
receives notice of such requirement prior to the date thirty
(30) days after the date Lessor delivers possession of the
Premises to Lessee.
INDEMNI- 15. Neither Lessor nor Lessor's agents, nor any shareholder,
FICATION OF constituent partner or other owner of Lessor or any agent of
LESSOR Lessor, nor any contractor, officer, director or employee of any
thereof shall be liable to Lessee and Lessee waives all claims
against Lessor and such other persons for any injury to or death
of any person or for loss of use of or damage to or destruction
of property in or about the Premises by or from any cause
whatsoever, unless caused solely by the gross negligence or
willful misconduct of Lessor, its agents or employees. Lessee
agrees to indemnify and hold Lessor, Lessor's agents, the
shareholders, constituent partners and/or other owners of Lessor
or any agent of Lessor, and all contractors, officers, directors
and employees of any thereof (collectively, "Indemnitees"), and
each of them, harmless from and to protect and defend each
Indemnitee against any and all claims, demands, suits,
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liability, damage or loss and against all costs and expenses,
including reasonable attorneys' fees incurred in connection
therewith, (a) arising out of any injury or death of any person
or damage to or destruction of property occurring in, on or
about the Premises, from any cause whatsoever, unless caused
solely by the gross negligence or willful misconduct of such
Indemnitee, or (b) occurring in, on or about the Premises, when
such claim, injury or damage is caused or allegedly caused in
whole or in part by the act, neglect, default, or omission of
any duty by Lessee, its former or current agents, contractors,
employees, invitees, or subtenants, or (c) arising from any
failure of Lessee to observe or perform any of its obligations
hereunder. The provisions of this paragraph shall survive the
termination of this Lease with respect to any claims or
liability occurring prior to such termination.
ADVERTISE- 16. Lessee will not place or permit to be placed, in, upon
MENTS AND or about the Premises any unusual or extraordinary signs, or
SIGNS any signs not approved by the city or other governing
authority. The Lessee will not place, or permit to be placed,
upon the Premises, any signs, advertisements or notices without
the written consent of the Lessor first had and obtained. Any
sign so placed on the Premises shall be so placed upon the
understanding and agreement that Lessee will remove same at the
termination of the tenancy herein created and repair any damage
or injury to the Premises caused thereby, and if not so removed
by Lessee then Lessor may have same so removed at Lessee's
expense.
UTILITIES 17. Lessee shall pay for all water, gas, heat, light, power,
telephone service and all other service supplied to the
Premises. If the Premises are not served by a separate water
meter, Lessee shall pay to Lessor its share of the water bill
for the entire property covered by said bill and of which the
Premises are a part, as determined by Lessor based on square
footage or other equitable method.
ATTORNEY'S 18. In case suit should be brought for the possession of
FEES the Premises, for the recovery of any sum due hereunder, or
because of the breach of any other covenant herein, the losing
party shall pay to the prevailing party a reasonable attorney's
fee, which shall be deemed to have accrued on the commencement
of such action and shall be enforceable whether or not such
action is prosecuted to judgment.
DEFAULT AND 19. The occurrence of any one or more of the following
REMEDIES events (each an "Event of Default") shall constitute a breach
of this Lease by Lessee:
(a) Lessee fails to pay any Monthly Base Rent or
additional rent under this Lease as and when it becomes
due and payable and such failure continues for more
than ten (10) days; or
(b) Lessee fails to perform or breaches any
other covenant of this Lease to be performed or
observed by Lessee as and when performance or
observance is due and such failure or breach continues
for more than ten (10) days after Lessor gives written
notice thereof to Lessee; provided, however, that if
such failure or breach cannot reasonably be cured
within such period of ten (10) days, an Event of
Default shall not exist as long as Lessee commences
with due diligence and dispatch the curing of such
failure or breach within such period of ten (10) days
and, having so commenced, thereafter prosecutes with
diligence and dispatch and completes the curing of such
failure or breach within a reasonable time; or
(c) Lessee files, or consents by answer or
otherwise to the filing against it of, a petition for
relief or reorganization or arrangement or any other
petition in bankruptcy or for liquidation or to take
advantage of any bankruptcy, insolvency or other
debtors' relief law of any jurisdiction; makes an
assignment for the benefit of its creditors; or
consents to the appointment of a custodian, receiver,
trustee or other officer with similar powers of Lessee
or of any substantial part of Lessee's property; or
(d) A court or government authority enters an
order, and such order is not vacated within thirty (30)
days, appointing a custodian, receiver, trustee or
other officer with similar powers with respect to
Lessee or with respect to any substantial part of
Lessee's property; or constituting an order for relief
or approving a petition for relief or reorganization or
arrangement or any other petition in bankruptcy or for
liquidation or to take advantage of any bankruptcy,
insolvency or other debtors' relief law of any
jurisdiction; or ordering the dissolution, winding-up
or liquidation of Lessee; or
(e) Lessee abandons the Premises.
19.1 If an Event of Default occurs, Lessor shall have the
right at any time to give a written termination notice to
Lessee and, on the date specified in such notice, Lessee's
right to possession shall terminate and this Lease shall
terminate. Upon such termination, Lessor shall have the right
to recover from Lessee:
(i) The worth at the time of award of all unpaid rent
which had been earned at the time of termination;
(ii) The worth at the time of award of the amount by
which all unpaid rent which would have been earned
after termination until the time of award exceeds the
amount of such rental loss that Lessee proves could
have been reasonably avoided;
(iii) The worth at the time of award of the amount by
which all unpaid rent for the balance of the term of
this Lease after the time of award exceeds the amount
of such rental loss that Lessee proves could be
reasonably avoided; and
(iv) All other amounts necessary to compensate Lessor
for all the detriment proximately caused by Lessee's
failure to perform all of Lessee's obligations under
this Lease or which in the ordinary course of things
would be likely to result therefrom.
The "worth at the time of award" of the amounts referred to in
clauses (i) and (ii) above shall be computed by allowing
interest at the maximum annual interest rate allowed by law for
business loans (not primarily for personal, family or household
purposes) not exempt from the usury law at the time of
termination or, if there is no such
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maximum annual interest rate, at the rate of eighteen percent
(18%) per annum. The "worth at the time of award" of the amount
referred to in clause (iii) above shall be computed by
discounting such amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of award plus one
percent (1%). For the purpose of determining unpaid rent under
clauses (i), (ii) and (iii) above, the rent reserved in this
Lease shall be deemed to be the total rent payable by Lessee
under this Lease, including Monthly Base Rent, additional rent
and all other sums payable by Lessee under this Lease.
19.2 Even though Lessee has breached this Lease, this Lease
shall continue in effect for so long as Lessor does not
terminate Lessee's right to possession, and Lessor shall have
all of its rights and remedies, including the right, pursuant to
California Civil Code section 1951.4, to recover all rent as it
becomes due under this Lease. Acts of maintenance or
preservation or efforts to relet the Premises or the appointment
of a receiver upon initiative of Lessor to protect Lessor's
interest under this Lease shall not constitute a termination of
Lessee's right to possession unless written notice of
termination is given by Lessor to Lessee.
19.3 The remedies provided for in this Lease are in
addition to all other remedies available to Lessor at law or in
equity by statute or otherwise.
LATE CHARGES 20. Lessee hereby acknowledges that late payment by Lessee
AND INTEREST to Lessor of rent and other sums due hereunder will cause
Lessor to incur costs not contemplated by this lease, the exact
amount of which will be extremely difficult to ascertain. Such
costs include, but are not limited to, processing and accounting
charges, and late charges which may be imposed on Lessor by the
terms of any mortgage or trust deed covering the Premises.
Accordingly, if any installment of rent or any other sum due
from Lessee shall not be received by Lessor or Lessor's designee
within ten (10) days after such amount shall be due, Lessee
shall pay to Lessor a late charge equal to ten percent (10%) of
such overdue amount. The parties hereby agree that such late
charge represents a fair and reasonable estimate of the costs
Lessor will incur by reason of late payment by Lessee.
Acceptance of such late charge by Lessor shall in no event
constitute a waiver of Lessee's default with respect to such
overdue amount, nor prevent Lessor from exercising any of the
other rights and remedies granted hereunder.
If any rent payable under the Lease remains delinquent
for a period in excess of ten (10) calendar days, then, in
addition to any late charge payable, Lessee shall pay to Lessor
interest on any rent that is not so paid from the date due until
paid at the then maximum rate of interest not prohibited or made
usurious by Law.
SURRENDER OF 21. The voluntary or other surrender of this Lease by
LEASE Lessee, or a mutual cancellation thereof, shall not work a
merger, and shall, at the option of Lessor, terminate all or any
existing subleases or subtenancies, or may, at the option of
Lessor, operate as an assignment to Lessor of any or all such
subleases or subtenancies.
TAXES 22. The Lessee shall be liable for all taxes levied against
personal property and trade or business fixtures. The Lessee
also agrees to pay, as additional rental, during the term of
this Lease and any extensions thereof, all real estate taxes
plus the yearly installments of any special assessments which
are of record or which may become of record during the term of
this lease. If the Premises are a portion of a tax parcel or
parcels and this Lease does not cover an entire tax parcel or
parcels, the taxes and assessment installments allocated to the
Premises shall be pro-rated on a square footage or other
equitable basis, as calculated by the Lessor. It is understood
and agreed that the Lessee's obligation under this paragraph
will be pro-rated to reflect the commencement and termination
dates of this Lease.
NOTICES 23. All notices to be given to Lessee may be given in writing
personally, by commercial overnight courier or by depositing the
same in the United States mail, postage prepaid, and addressed
to Lessee at the said Premises, whether or not Lessee has
departed from, abandoned or vacated the Premises, and any other
address of Lessee set forth below. Notices given in accordance
with this paragraph shall be deemed received one business day
after sent by commercial overnight courier, three business days
after being deposited in the United States mail, or when
delivered if delivered personally. All notices to be given to
Lessor may be given in writing personally or by depositing the
same in the United States mail, postage prepaid, and addressed
to Lessor at the following address or such other address as
Lessor may, from time to time designate:
c/o Renault & Handley
2500 El Camino Real
Palo Alto, CA 94306
ENTRY BY LESSOR 24. Lessee shall permit Lessor and his agents to enter into
and upon the Premises at all reasonable times for the purpose of
inspecting the same or for the purpose of maintaining the
building in which the Premises are situated, or for the purpose
of making repairs, alterations or additions to any other portion
of said building, including the erection and maintenance of such
scaffolding, canopies, fences and props as may be required
without any rebate of rent and without any liability to Lessee
for any loss of occupation or quiet enjoyment of the Premises
thereby occasioned; and shall permit Lessor and his agents, at
any time within ninety days prior to the expiration of this
Lease, to place upon the Premises any usual or ordinary "For
Sale" or "For Lease" signs and exhibit the Premises to
prospective tenants at reasonable hours.
DESTRUCTION OF 25. In the event of a partial destruction of the Premises
PREMISES during the term of this Lease from any cause covered by
insurance carried, or required to be carried, by Lessor under
this Lease, Lessor shall forthwith repair the same, provided
such repairs can be made within one hundred eighty (180) days
under the laws and regulations of State, Federal, County or
Municipal authorities, but such partial destruction shall in no
way annul or void this Lease, except that Lessee shall be
entitled to a proportionate reduction of rent while such repairs
are being made, such proportionate reduction to be based upon
the extent to which the making of such repairs shall interfere
with the business carried on by Lessee in the Premises. If the
cause of such repairs is not so covered by insurance or cannot
be made in one hundred eighty (180) days, Lessor may, at his
option, make same within a reasonable time, this Lease
continuing in full force and effect and the rent to be
proportionately reduced as aforesaid in this paragraph
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<PAGE> 8
provided. In the event that Lessor does not so elect to make
such repairs the cause of which is not so covered by insurance
or cannot be made in one hundred eighty (180) days, or such
repairs cannot be made under such laws and regulations, this
Lease may be terminated at the option of either party. In
respect to any partial destruction which Lessor is obligated to
repair or may elect to repair under the terms of this paragraph,
the provision of Section 1932, Subdivision 2, and of Section
1933, Subdivision 4, of the Civil Code of the State of
California are waived by Lessee. In the event that the building
in which the Premises may be situated be destroyed to the extent
of not less than 33 1/3% the replacement cost thereof, Lessor
may elect to terminate this Lease, whether the Premises be
injured or not. A total destruction of the building in which the
Premises may be situated shall terminate this Lease. In the
event of any dispute between Lessor and Lessee relative to the
provisions of this paragraph, they shall each select an
arbitrator, the two arbitrators so selected shall select a third
arbitrator and the three arbitrators so selected shall hear and
determine the controversy and their decision thereon shall be
final and binding upon both Lessor and Lessee, who shall bear
the cost of such arbitration equally between them.
ASSIGNMENT AND 26. The Lessee shall not assign, transfer, or hypothecate the
SUBLET- leasehold estate under this Lease, or any interest therein, and
TING shall not sublet the Premises, or any part thereof, or any
right or privilege appurtenant thereto, or suffer any other
person or entity to occupy or use the Premises, or any portion
thereof, without, in each case, the prior written consent of the
Lessor. Lessor shall not unreasonably withhold its consent to a
subletting or assignment. The Lessee shall, by thirty (30) days
written notice, advise the Lessor of its intent to assign this
Lease or sublet the Premises or any portion thereof for any part
of the term hereof, which notice shall include a description of
all of the material terms of such assignment or subletting, and
a reasonably detailed description of the proposed assignee or
sublessee and its business and financial condition. Within
thirty (30) days after receipt of Lessee's notice, Lessor shall
either give approval to Lessee to assign the Lease or sublease
the portion of the Premises described in Lessee's notice, or
notify Lessee of Lessor's disapproval. In addition, Lessor shall
have the right to terminate this Lease as to the portion of the
Premises described in Lessee's notice on the date specified in
Lessee's notice. If Lessee intends to assign this Lease or
sublet the entire Premises and Lessor elects to terminate this
Lease, this Lease shall be terminated on the date specified in
Lessee's notice. If, however, this Lease shall terminate
pursuant to the foregoing with respect to less than all the
Premises, the rent, as defined and reserved hereinabove shall be
adjusted on a prorata basis to the number of square feet
retained by Lessee, and this Lease as so amended shall continue
in full force and effect. If the Lessor approves an assignment
or subletting, the Lessee may assign or sublet immediately after
receipt of the Lessor's written approval. In the event Lessee is
allowed to assign, transfer or sublet the whole or any part of
the Premises, with the prior written consent of Lessor, then no
assignee, transferee or sublessee shall assign or transfer this
Lease, either in whole or in part, or sublet the whole or any
part of the Premises, without also having obtained the prior
written consent of the Lessor. In the event of any approved
assignment or subletting, Lessee shall pay to the Lessor, as
additional rental, fifty percent (50%) of all assignment
proceeds and rents received by the Lessee from its assignee or
sublessee which are in excess of the amount payable by the
Lessee to the Lessor hereunder, after deducting the amount of
any market rate real estate brokerage commissions paid by Lessee
in connection with the assignment or subletting. A consent of
Lessor to one assignment, transfer, hypothecation, subletting,
occupation or use by any other person shall not release Lessee
from any of Lessee's obligations hereunder or be deemed to be a
consent to any subsequent similar or dissimilar assignment,
transfer, hypothecation, subletting, occupation or use by any
other person. Any such assignment, transfer, hypothecation,
subletting, occupation or use without such consent shall be void
and shall constitute a breach of this Lease by Lessee and shall,
at the option of Lessor exercised by written notice to Lessee,
terminate this Lease. The leasehold estate under this Lease
shall not, nor shall any interest therein, be assignable for any
purpose by operation of law without the written consent of
Lessor. As a condition to its consent, Lessor may require Lessee
to pay all expenses in connection with the assignment, and
Lessor may require Lessee's assignee or transferee (or other
assignees or transferees) to assume in writing all of the
obligations under this Lease.
Any dissolution, merger, consolidation, recapitalization
or other reorganization of Lessee, or the sale or other transfer
in the aggregate over the term of the Lease of a controlling
percentage of the capital stock of Lessee (excluding transfers
over a national securities exchange), or the sale or transfer of
all or a substantial portion of the assets of Lessee, shall be
deemed a voluntary assignment of Lessee's interest in this
Lease; provided that, a merger, consolidation, recapitalization,
reorganization or sale of assets shall not require Lessor's
consent hereunder unless Lessee's tangible net worth (determined
in accordance with generally accepted accounting principles)
immediately after such transaction is less than Lessee's
tangible net worth immediately prior to such transaction. The
phrase "controlling percentage" means the ownership of and the
right to vote stock possessing more than fifty percent of the
total combined voting power of all classes of Lessee's capital
stock issued, outstanding and entitled to vote for the election
of directors. If Lessee is a partnership, a withdrawal or
change, voluntary, involuntary or by operation of Law, of any
general partner, or the dissolution of the partnership, shall be
deemed a voluntary assignment of Lessee's interest in this
Lease. In the event that, through a merger, stock sale or other
transaction, Lessee becomes the subsidiary of any other entity
(a "parent"), Lessor shall have the right to require that the
parent guaranty all of Lessee's obligations under the Lease
pursuant to a form of guaranty reasonably satisfactory to
Lessor.
CONDEM- 27. If any part of the premises shall be taken for any
NATION public or quasi-public use, under any statute or by right of
eminent domain or private purchase in lieu thereof, and a part
thereof remains which is susceptible of occupation hereunder,
this Lease shall, as to the part so taken, terminate as of the
date title shall vest in the condemnor or purchaser, and the
rent payable hereunder shall be adjusted so that the Lessee
shall be required to pay for the remainder of the term only such
portion of such rent as the value of the part remaining after
such taking bears to the value of the entire Premises prior to
such taking; but in such event Lessor shall have the option to
terminate this Lease as of the date when title to the part so
taken vests in the condemnor or purchaser. If all of the
premises, or such part thereof be taken so that there does not
remain a portion susceptible for occupation hereunder, this
Lease shall thereupon terminate. If a part or all of the
Premises be taken, all compensation awarded upon such taking
shall go to the Lessor and the Lessee shall have no claim
thereto.
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EFFECT OF 28. The term "Lessor" as used in this Lease, means only the
CONVEYANCE owner for the time being of the land and building containing
the Premises, so that, in the event of any sale of said land or
building, the Lessor shall be and hereby is entirely freed and
relieved of all covenants and obligations of the Lessor
hereunder, and it shall be deemed and construed, without further
agreement between the parties and the purchaser at any such
sale, that the purchaser of the building has assumed and agreed
to carry out any and all covenants and obligations of the Lessor
hereunder. If any security be given by the Lessee to secure the
faithful performance of all or any of the covenants of this
Lease on the part of the Lessee, the Lessor may transfer and
deliver the security, as such, to the purchaser at any such
sale, and thereupon the Lessor shall be discharged from any
further liability in reference thereto.
SUBORDI- 29. Lessee agrees that this Lease shall be subject and
NATION subordinate to any mortgage, deed of trust or other instrument
of security which has been or shall be placed on the land and
building or land or building of which the Premises form a part,
and this subordination is hereby made effective without any
further act of Lessee. The Lessee shall, at any time
hereinafter, on demand, execute any instruments, releases, or
other documents that may be required by any mortgagee,
mortgagor, or trustor or beneficiary under any deed of trust for
the purpose of subjecting and subordinating this Lease to the
lien of any such mortgage, deed of trust or other instrument of
security, and the failure of the Lessee to execute any such
instruments, releases or documents, shall constitute a default
hereunder. Notwithstanding Lessee's obligations, and the
subordination of the Lease, under this paragraph 29, no
mortgagee, trustee or beneficiary under any deed of trust or
other instrument of security which may be placed on the Premises
shall have the right to terminate the Lease or disturb Lessee's
occupancy thereunder so long as no Event of Default has occurred
and is continuing under this Lease.
WAIVER 30. The waiver by Lessor of any breach of any term, covenant
or condition, herein contained shall not be deemed to be a
waiver of such term, covenant or condition or any subsequent
breach of the same or any other term, covenant or condition
therein contained. The subsequent acceptance of rent hereunder
by Lessor shall not be deemed to be a waiver of any preceding
breach by Lessee of any term, covenant or condition of this
Lease, other than the failure of Lessee to pay the particular
rental so accepted, regardless of Lessor's knowledge of such
preceding breach at the time of acceptance of such rent.
HOLDING OVER 31. Any holding over after the expiration or other
termination of the term of this Lease with the written consent
of Lessor, shall be construed to be a tenancy from month to
month, at a rental to be negotiated by Lessor and Lessee prior
to the expiration of said term, and shall otherwise be on the
terms and conditions herein specified, so far as applicable. Any
holding over after the expiration or other termination of the
term of this Lease without the written consent of Lessor shall
be construed to be a tenancy at sufferance on all the terms set
forth herein, except that the monthly rental shall be an amount
equal to two hundred percent (200%) of the Monthly Base Rent
payable by Tenant immediately prior to such holding over, or the
fair market rent for the Premises as of such date, whichever is
greater.
SUCCESSORS AND 32. The covenants and conditions herein contained shall,
ASSIGNS subject to the provisions as to assignment, apply to and bind
the heirs, successors, executors, administrators and assigns of
all of the parties hereto; and all of the parties hereto shall
be jointly and severally liable hereunder.
TIME 33. Time is of the essence of this Lease.
MARGINAL 34. The marginal headings or titles to the paragraphs of
CAPTIONS; this Lease are not a part of this Lease and shall have no
COMPLETE effect upon the construction or interpretation of any part
AGREEMENT; thereof. This instrument contains all of the agreements and
AMENDMENT conditions made between the parties hereto and may not be
modified orally or in any other manner than by an agreement in
writing signed by all of the parties hereto or their
respective successors in interest.
ENVIRON- 35. Lessee's obligations under Paragraph 35 shall survive
MENTAL the expiration or termination of this Lease.
OBLIGATIONS
35.1 As used herein, the term "Hazardous Materials" shall
mean any toxic or hazardous substance, material or waste or any
pollutant or infectious or radioactive material, including but
not limited to those substances, materials or wastes regulated
now or in the future under any of the following statutes or
regulations and any and all of those substances included within
the definitions of "hazardous substances," "hazardous
materials," "hazardous waste," "hazardous chemical substance or
mixture," "imminently hazardous chemical substance or mixture,"
"toxic substances," "hazardous air pollutant," "toxic
pollutant," or "solid waste" in the (a) Comprehensive
Environmental Response, Compensation and Liability Act of 1990
("CERCLA" or "Superfund"), as amended by the Superfund
Amendments and Reauthorization Act of 1986 ("SARA"), 42 U.S.C.
Section 9601 et seq., (b) Resource Conservation and Recovery Act
of 1976 ("RCRA"), 42 U.S.C. Section 6901 et seq., (c) Federal
Water Pollution Control Act ("FSPCA"), 33 U.S.C. Section 1251 et
seq., (d) Clean Air Act ("CAA"), 42 U.S.C. Section 7401 et seq.,
(e) Toxic Substances Control Act ("TSCA"), 14 U.S.C. Section
2601 et seq., (f) Hazardous Materials Transportation Act, 49
U.S.C. Section 1801, et seq., (g) Carpenter-Presley-Tanner
Hazardous Substance Account Act ("California Superfund"), Cal.
Health & Safety Code Section 25300 et seq., (h) California
Hazardous Waste Control Act, Cal. Health & Safety code Section
25100 et seq., (i) Porter-Cologne Water Quality Control Act
("Porter-Cologne Act"), Cal. Water Code Section 13000 et seq.,
(j) Hazardous Waste Disposal Land Use Law, Cal. Health & Safety
codes Section 25220 et seq., (k) Safe Drinking Water and Toxic
Enforcement Act of 1986 ("Proposition 65"), Cal. Health & Safety
code Section 25249.5 et seq., (l) Hazardous Substances
Underground Storage Tank Law, Cal. Health & Safety code Section
25280 et seq., (m) Air Resources Law, Cal. Health & Safety Code
Section 39000 et seq., and (n) regulations promulgated pursuant
to said laws or any replacement thereof, or as similar terms are
defined in the federal, state and local laws, statutes,
regulations, orders or rules. The term "Hazardous Materials"
shall also mean any and all other biohazardous wastes and
substances, materials and wastes which are, or in the future
become, regulated under applicable Laws for the protection of
health or the environment, or which are classified as hazardous
or toxic substances, materials or wastes, pollutants or
contaminants, as defined, listed or regulated by any federal,
state or local law, regulation or order or by common law
decision. The term "Hazardous Materials" shall include, without
limitation, (i) trichloroethylene, tetrachloroethylene,
perchloroethylene and other chlorinated solvents, (ii) any
petroleum products or fractions thereof, (iii) asbestos, (iv)
polychlorinted biphenyls, (v) flammable explosives, (vi) urea
formaldehyde, (vii) radioactive materials and waste, and (viii)
materials and wastes that are harmful to or may threaten human
health, ecology or the environment.
35.2 Notwithstanding anything to the contrary in this Lease,
Lessee, at its sole cost, shall comply with all Laws relating to
the storage, use and disposal of Hazardous Materials; provided,
however, that Lessee shall not be responsible for contamination
of the Premises by Hazardous Materials existing as of the date
the Premises are
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<PAGE> 10
delivered to Lessee unless caused by Lessee. Lessee shall not
store, use or dispose of any Hazardous Materials except for
those Hazardous Materials ("Permitted Materials") which are (a)
listed in a Hazardous Materials management plan ("HMMP") which
Lessee shall submit to appropriate governmental authorities as
and when required under applicable Laws, and (b) are either
normal quantities of ordinary office supplies or are approved in
writing by Lessor. Lessee may use, store and dispose of provided
Permitted Materials provided that (i) such Permitted Materials
are used, stored, transported, and disposed of in strict
compliance with applicable Laws, and (ii) such Permitted
Materials shall be limited to the materials listed on and may be
used only in the quantities specified in the HMMP. In no event
shall Lessee cause or permit to be discharged into the plumbing
or sewage system of the Premises or onto the land underlying or
adjacent to the Premises any Hazardous Materials. If the
presence of Hazardous Materials on the Premises caused or
permitted by Lessee results in contamination or deterioration of
water or soil, then Lessee shall promptly take any and all
action necessary to clean up such contamination, but the
foregoing shall in no event be deemed to constitute permission
by Lessor to allow the presence of such Hazardous Materials.
35.3 Lessee shall immediately notify Lessor in writing
of:
(a) Any enforcement, cleanup, removal, or other
governmental or regulatory action instituted, completed or
threatened against Lessee related to any Hazardous Materials;
(b) Any claim made or threatened by any person against
Lessee or the Premises relating to damage, contribution, cost
recovery compensation, loss or injury resulting from or claimed
to result from any Hazardous Materials; and,
(c) Any reports made to any environmental agency arising
out of or in connection with any Hazardous Materials in,
discharged at, or removed from the Premises, including any
complaints, notices, warnings or asserted violations in
connection therewith.
Lessee shall also supply to Lessor as promptly as possible, and
in any event within five (5) business days after Lessee first
receives or sends the same, with copies of all claims, reports,
complaints, notices, warnings or asserted violations related in
any way to the existence of Hazardous Materials at, in, under or
about the Premises or Lessee's use thereof. Lessee shall, upon
Lessor's request, promptly deliver to Lessor copies of any
documents or information relating to the use, storage or
disposal of Hazardous Material on or from the Premises.
35.4 Upon termination or expiration of the Lease, Lessee
at its sole expense shall cause all Hazardous Materials placed
in or about the Premises, by Lessee, its agents, contractors, or
invitees, and all installations (whether interior or exterior)
made by or on behalf of Lessee relating to the storage, use,
disposal or transportation of Hazardous Materials to be removed
from the property and transported for use, storage or disposal
in accordance and compliance with all Laws and other
requirements respecting Hazardous Materials used or permitted to
be used by Lessee. Lessee shall apply for and shall obtain from
all appropriate regulatory authorities (including any applicable
fire department or regional water quality control board) all
permits, approvals and clearances necessary for the closure of
the Premises and shall take all other actions as may be required
to complete the closure of the Premises. In addition, prior to
vacating the Premises, Lessee shall undertake and submit to
Lessor an environmental site assessment from an environmental
consulting company reasonably acceptable to Lessor which site
assessment shall evidence Lessee's compliance with this
Paragraph 35.
35.5 At any time prior to expiration of the Lease term,
subject to reasonable prior notice (not less than forty-eight
(48) hours) and Lessee's reasonable security requirements and
provided such activities do not unreasonably interfere with the
conduct of Lessee's business at the Leased Premises, Lessor
shall have the right to enter in and upon the Premises in order
to conduct appropriate tests of water and soil to determine
whether levels of any Hazardous Materials in excess of legally
permissible levels has occurred as a result of Lessee's use
thereof. Lessor shall furnish copies of all such test results
and reports to Lessee and, at Lessee's option and cost, shall
permit split sampling for testing and analysis by Lessee. Such
testing shall be at Lessee's expense if Lessor has a reasonable
basis for suspecting and confirms the presence of Hazardous
Materials in the soil or surface or ground water in, on, under,
or about the Premises, which has been caused by or resulted from
the activities of Lessee, its agents, contractors, or invitees.
35.6 Lessor may voluntarily cooperate in a reasonable
manner with the efforts of all governmental agencies in reducing
actual or potential environmental damage. Lessee shall not be
entitled to terminate this Lease or to any reduction in or
abatement of rent by reason of such compliance or cooperation.
Lessee agrees at all times to cooperate fully with the
requirements and recommendations of governmental agencies
regulating, or otherwise involved in, the protection of the
environment.
35.7 Lessee shall indemnify, defend by counsel
reasonably acceptable to Lessor, protect and hold Lessor and
each of Lessor's partners, employees, agents, attorneys,
successors, and assignees, free and harmless from and against
any and all claims, damages, liabilities, penalties,
forfeitures, losses or expenses (including reasonable attorney's
fees) or death of or injury to any person or damage to any
property whatsoever arising from or caused in whole or in part,
directly or indirectly by (A) the presence in, or under or about
the Premises or discharge in or from the Premises of any
Hazardous Materials caused by Lessee, its agents, employees,
invitees, contractors, assignees, or Lessee's use, analysis,
storage, transportation, disposal, release, threatened release,
discharge or generation of Hazardous Materials to, in, on,
under, about or from the leased Premises, or (B) Lessee's
failure to comply with any Hazardous Materials Law. Lessee's
obligations hereunder shall include, without limitation, whether
foreseeable or unforeseeable, all costs, of any required or
necessary repair, cleanup or detoxification or decontamination
of the Premises, and the preparation and implementation of any
closure, remedial action or other required plans in connection
therewith, and shall survive the expiration or earlier
termination of the term of this Lease. For purposes of indemnity
provision hereof, any actions or omissions of Lessee or by
employees, agents, assignees, contractors or subcontractors of
Lessee or others acting for or on behalf of Lessee (whether or
not they are negligent, intentional, willful or unlawful) shall
be strictly attributable to Lessee.
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<PAGE> 11
LESSOR'S RIGHT 36. If Lessee shall fail to perform any obligation or
TO PERFORM covenant pursuant to this Lease within a reasonable
period of time (not to exceed 15 days) following notice from
Lessor to do so, then Lessor may, at its election and without
waiving any other remedy it may otherwise have under this Lease
or at law, perform such obligation or covenant and Lessee shall
pay to Lessor, as Additional Rent, the costs incurred by Lessor
in performing such obligation or covenant.
37. In addition to the Security Deposit set forth in
paragraph 5 of this Lease, Lessee shall deliver to Lessor
concurrent with the execution of this Lease an unconditional,
irrevocable stand-by letter of credit (the "LC") in the amount
of Six Hundred Forty One Thousand and No/100ths Dollars
($641,000.00), which LC shall be issued by a national bank with
assets of over $500 million ( a bank which has a local office in
Santa Clara County which will negotiate a letter of credit and
whose deposits are insured by the FDIC) reasonably acceptable to
Lessor, and which LC shall be in a form and content as presented
in Exhibit "A" to this Lease. Lessee shall pay all expenses,
points and/or fees incurred by Lessee in obtaining and
maintaining the LC. Lessee shall maintain the LC (or a
substitute letter of credit acceptable to Lessor) in full force
and effect during the entire term of the Lease (including any
extension period).
The LC shall be held by Lessor as security for the faithful
performance by Lessee of all the terms, covenants and conditions
of this Lease to be kept and performed by Lessee during the
Lease Term. The LC shall not be mortgaged, assigned or
encumbered in any manner whatsoever by Lessee without the prior
written consent of Lessor. If Lessee is in default under the
Lease with all applicable cure periods having expired during the
Lease Term, Lessor may, but shall not be required to, draw upon
all or any portion of the LC for the payment of any amount that
Lessor may reasonably spend or may become obligated to spend by
reason of any such default by Lessee, or to compensate Lessor
for any other loss or damage that Lessor may suffer by reason of
a default by Lessee under the Lease. The use, application or
retention of the LC, or any portion thereof, by Lessor shall not
prevent Lessor from exercising any other right or remedy
provided by this Lease or by law, it being intended that Lessor
shall not be first required to proceed against the LC and shall
not operate as a limitation on any recovery to which Lessor may
otherwise be entitled. If any portion of the LC is drawn upon,
Lessee shall, within five (5) days after written demand
therefor, reinstate the LC to the amount required under the
Lease. Within ten (10) days following expiration of the Lease,
Lessor shall return LC to Lessee, less any portion drawn by
Lessor pursuant to the terms hereunder. In addition, Lessor
shall be entitled to draw upon the LC at any time within sixty
(60) days of the expiration date of the LC, unless Lessee shall
have delivered to Lessor a replacement LC meeting the
requirements of this Paragraph and with an expiration date not
less than twelve (12) months after the date of delivery. If
Lessor so draws upon the LC in accordance with the immediately
preceding sentence, Lessor shall hold the proceeds thereof as
security for the performance of Lessee's covenants, and such
proceeds shall be available to Lessor in accordance with the
terms of this Paragraph.
38. Notwithstanding anything to the contrary contained
in Paragraph 9 hereof, Lessor hereby agrees that Lessee may
remove the existing clean rooms at its sole expense during the
lease term and shall not be required to restore them upon
expiration or sooner termination of the Lease, provided,
however, said removal shall be subject to all the terms of this
Lease including but not limited to Paragraphs 9 and 14.
THIS LEASE HAS BEEN PREPARED FOR SUBMISSION TO YOUR ATTORNEY WHO
WILL REVIEW THE DOCUMENT AND ASSIST YOU TO DETERMINE WHETHER
YOUR LEGAL RIGHTS ARE ADEQUATELY PROTECTED. RENAULT & HANDLEY IS
NOT AUTHORIZED TO GIVE LEGAL AND TAX ADVICE. NO REPRESENTATION
OR RECOMMENDATION IS MADE BY RENAULT & HANDLEY OR ITS AGENTS OR
EMPLOYEES AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT OR TAX
CONSEQUENCES OF THIS DOCUMENT OR ANY TRANSACTION RELATING
THERETO. THESE ARE QUESTIONS FOR YOUR ATTORNEY WITH WHOM YOU
SHOULD CONSULT BEFORE SIGNING THIS DOCUMENT.
IN WITNESS WHEREOF, Lessor and Lessee have executed these
presents, the day and year first above written.
<TABLE>
<CAPTION>
<S> <C>
LESSOR LESSEE
Renault & Handley Employees Investment Co. Alliance Fiber Optic Products, Inc.
/s/ R. G. Handley By: /s/ Peter Chang
------------------------------------------ ---------------------------------------
Raymond G. Handley, President
Its: CEO
------------------------------------------ ---------------------------------------
By:
------------------------------------------ ---------------------------------------
Its:
------------------------------------------ ---------------------------------------
</TABLE>
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<PAGE> 12
EXHIBIT A
[Issuing Bank Letterhead]
__________, 19__
IRREVOCABLE LETTER OF CREDIT NO. __________
BENEFICIARY: APPLICANT:
Amount: $___________
Expiry Date: ________, 19__
Gentlemen:
By order of and for the account of __________ (the "Applicant"), we (the
"Bank") hereby establish this Irrevocable Standby Letter of Credit (the "Letter
or Credit") in the aggregate amount of $__________ in your favor.
Funds under this Letter of Credit are available to you or the transferee
of this Letter of Credit (you, or such transferee during the period such
transferee has possession of this Letter of Credit, being referred to herein as
"Beneficiary") against Beneficiary's sight draft(s) drawn on us, at our office
at ________________________________________, mentioning our Letter of Credit No.
__________ and accompanied by the original of this Letter of Credit and
Beneficiary's signed statement, in the form of Annex A attached hereto, that the
Beneficiary is entitled to draw under this Letter of Credit.
We engage with you that all drafts drawn by Beneficiary under and in
compliance with this Letter of Credit will be duly honored by us.
Partial draws are permitted under this Letter of Credit. Upon any partial
draw, this Letter of Credit shall immediately be returned to the Beneficiary.
This Letter of Credit shall expire on __________, 19__; provided, however,
that on __________, 19__ and each anniversary thereof, this Letter of Credit
shall automatically be extended for successive periods of one year until not
later than __________, 19__; and provided further that this Letter
<PAGE> 13
-------------------
19
------------' ----
Page 2
L/C No.
---------
of Credit shall not be so extended if the Bank in its sole discretion gives to
you and the Beneficiary (if different) and to Applicant, sixty days' written
notice prior to the Expiration Date (as hereinafter defined) then in effect that
the Bank will not renew this Letter of Credit for any additional period. It is
understood that, if, upon such notice of nonrenewal, the Applicant fails to
deliver to the Beneficiary a replacement letter of credit from a bank acceptable
to the Beneficiary, and in form and substance to the Beneficiary, this Letter of
Credit may be drawn upon by Beneficiary at any time within thirty days prior to
the Expiration Date.
This Letter of Credit shall automatically expire at 5:00 P.M. local time
in __________, ____, on the date (the "Expiration Date") which is the earlier of
(i) __________, 19__, or the date to which expiration has been extended pursuant
to the immediately preceding paragraph hereof; (ii) the date on which the Bank
shall have honored Beneficiary's draft or drafts presented hereunder in the full
amount hereof; and (iii) the date when Beneficiary surrenders this Letter of
Credit to the Bank (it being understood that presentation of this Letter of
Credit for purposes of transfer of or a partial draw under this Letter of Credit
shall not constitute a surrender of this Letter of Credit).
All documents presented to the Bank in connection with any drawing and all
other communications and notices to the Bank with respect to this Letter of
Credit, shall be in writing, and delivered to the Bank in person, by registered
or certified mail or via express delivery service at the address set forth in
the second paragraph of this Letter of Credit, and shall specifically refer to
__________ __________ Bank Irrevocable Standby Letter of Credit No. __________.
This Letter of Credit is transferable by the Beneficiary in its entirety,
from time to time, in each case upon presentation to the Bank of a Certificate
of Transfer in the form of Annex B attached hereto.
<PAGE> 14
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19
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Page 3
L/C No.
---------
This Letter of Credit is irrevocable. This letter of Credit is subject
to the Uniform Customs and Practices for Documentary Credits, 1983 Revision,
International Chamber of Commerce Publication No. 400.
Very truly yours,
------------------------------- --------------------------------------
(Authorized Signature) (Authorized Signature)
<PAGE> 15
THIS FORMS AN INTEGRAL PART OF OUR IRREVOCABLE STANDBY
LETTER OF CREDIT NO. __________ DATED __________, 19__
"ANNEX A
TO IRREVOCABLE STANDBY
LETTER OF CREDIT
CERTIFICATE OF DRAWING
The undersigned hereby certifies to [Issuing Bank] (the "Bank"), with
reference to the Bank's Irrevocable Standby Letter of Credit No. __________ (the
"Letter of Credit," the terms defined therein and not otherwise defined herein
being used herein as therein defined) in favor of __________ that:
1. He/she is a duly authorized officer of the undersigned.
2. The undersigned is the Beneficiary under the Letter of Credit.
3. The undersigned is entitled to draw under the Letter of Credit.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Certificate as of the __________ day of __________, 19__.
By
----------------------------------
Name
--------------------------------
Title "
------------------------------
<PAGE> 16
THIS FORMS AN INTEGRAL PART OF OUR IRREVOCABLE STANDBY
LETTER OF CREDIT NO. __________ DATED __________, 19__
"ANNEX B
TO IRREVOCABLE STANDBY
LETTER OF CREDIT
CERTIFICATE OF TRANSFER
__________ __, 19__
------------------------------
------------------------------
------------------------------
Attn: Letter of Credit Department
Gentlemen:
The undersigned authorized officer of the beneficiary of your Irrevocable
Standby Letter of Credit No. __________ (the "Letter of Credit") hereby
irrevocably instructs you to transfer the Letter of Credit in its entirety to:
------------------------------------------------------------
(Name of transferee)
------------------------------------------------------------
(Address)
who shall upon your transfer of the Letter of Credit have the sole rights as
beneficiary thereof. This request for transfer complies with the requirements of
the Letter of Credit pertaining to transfers.
The original of the Letter of Credit is returned herewith, and in
accordance therewith we ask you to endorse the transfer on the reverse thereof
and deliver it directly to the above-named transferee together with your
customary notice of transfer.
By this transfer, all rights of the undersigned beneficiary in the Letter
of Credit are transferred to the above-named transferee who shall hereafter have
the sole rights as beneficiary thereof.
By
----------------------------------
Name
--------------------------------
Title "
------------------------------
