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LEASE AGREEMENT
Between
WATER TOWER CAMPBELL, LLC
-------------------------
A CALIFORNIA LIMITED LIABILITY COMPANY
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As Landlord
And
Netrix Corporation
a Delaware Corporation
doing business as Nx Networks, Inc.
As Tenant
Dated as of
May 18, 2000
PROPERTY:
307 Orchard City Drive
Campbell, California 95008
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THIS AGREEMENT made this 18th day of May, 2000.
BETWEEN:
WATER TOWER CAMPBELL, LLC A
California limited liability
company, and having a local office
at 1690 Dell Avenue in the City of
Campbell, California
(hereinafter called the "Landlord")
OF THE FIRST PART,
--- and ---
Netrix Corporation,,
A Delaware corporation doing
business as Nx Networks, Inc.having
an office at 13595 Dallas Technology
Drive, Suite 100 in the City of
Herndon, Virginia 20171
(hereinafter called the "Tenant")
OF THE SECOND PART,
In consideration of the rents, covenants and agreements
hereinafter contained, the Landlord and Tenant hereby agree as
follows:
1. LEASED PREMISES
LEASED PREMISES The Landlord does demise and lease to the Tenant the
premises (the "Leased Premises") located in a building (the
"Building") having a municipal address of 307 Orchard City
Drive, in the city of Campbell, and known as Suites 350 and
309, Water Tower II (the Leased Premises, the Building,
together with the lands described in Schedule "A" attached
hereto and present and future improvements, additions and
changes thereto being herein called the "Property"). The
Leased Premises are located on the Third floor and the
approximate location is outlined in heavy black and cross
hatched on the plan or plans marked Schedule(s) "B1"
attached hereto. The parties agree that the Rentable Area
of the Leased Premises is eight thousand five hundred
thirty-six (8,536) square feet and has been measured in
accordance with the provisions of Schedule "B" attached
hereto.
2. TERM
TERM (a) TO HAVE AND TO HOLD the Leased Premises for and during
the term of seven (7) years and 0 days (the "Term") to be
computed from the 1st day of June 2000, and to be fully
complete and ended on the 31st day of May 2007, unless
otherwise terminated. Suite 350 shall be delivered to Tenant
June 1, 2000 and Suite 309 shall be delivered to Tenant July
1, 2000.
DELAY (b) If the Leased Premises or any part thereof are not
IN OCCUPANCY ready for occupancy on the date of commencement of the
Term, no part of the "Rent" (as hereinafter defined) or
only a proportionate part thereof, in the event that the
Tenant shall occupy a part of the Leased Premises, shall be
payable for the period prior to the date when the entire
Leased Premises are ready for occupancy and the full Rent
shall accrue only after such last mentioned date. The Tenant
agrees to accept any such abatement of Rent in full
settlement of all claims which the Tenant might otherwise
have by reason of the Leased Premises not being ready for
occupancy on the date of commencement of the Term, provided
that when the Landlord has completed construction of such
part of the Leased Premises as it is obliged hereunder to
construct, the Tenant shall not be entitled to any abatement
of Rent for any delay in occupancy due to the Tenant's
failure or delay to provide plans or to complete any special
installations or other work required for its purposes or due
to any other reason, nor shall the Tenant be entitled to any
abatement of Rent for any delay in occupancy if the Landlord
has been unable to complete construction of the Leased
Premises by reason of such failure or delay by the Tenant. A
certificate of the Landlord as to the date the Leased
Premises were ready for occupancy and such construction as
the Landlord is obliged to complete is substantially
completed, or as to the date upon which the same would have
been ready for occupancy and completed respectively but for
the failure or delay of the Tenant, shall be conclusive and
binding on the Tenant and Rent in full shall accrue and
become payable from the date set out in the said
certificate. Notwithstanding any delay in occupancy, the
expiry date of this Lease shall remain unchanged.
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OVER-HOLDING (c) If at the expiration of the Term or sooner termination
hereof, the Tenant shall remain in possession without any
further written agreement or in circumstances where a
tenancy would thereby be created by implication of law or
otherwise, a tenancy from year to year shall not be created
by implication of law or otherwise, but the Tenant shall be
deemed to be a monthly tenant only, at double "Basic Rent"
(as hereinafter defined) payable monthly in advance plus
"Additional Rent" (as hereinafter defined) and otherwise
upon and subject to the same terms and conditions as herein
contained, excepting provisions for renewal (if any) and
leasehold improvement allowance (if any), contained herein,
and nothing, including the acceptance of any Rent by the
Landlord, for periods other than monthly periods, shall
extend this Lease to the contrary except an agreement in
writing between the Landlord and the Tenant and the Tenant
hereby authorizes the Landlord to apply any moneys received
from the Tenant in payment of such monthly Rent.
Notwithstanding the foregoing, in the event that the Tenant
shall hold over after the expiration of the Term and the
Landlord shall desire to regain possession of the Leased
Premises promptly at the expiration of the Term, then the
Landlord, at its sole option, may forthwith re-enter and
take possession of the Leased premises without process, or
by any legal process in force, Tenant hereby expressly
waiving any and all notices to cure or vacate or to quit the
Leased Premises provided by current or future law (except
for those notices specifically outlined in this Lease).
3. RENT
FIRST MONTHLY (a) (i) The Tenant shall without demand, deduction or right
BASIC RENT of offset pay to the Landlord (herein called "Basic Rent"),
the sum of Thirty-Seven Thousand Five Hundred Fifty-Two
and 56/100 Dollars ($37,552.56) of lawful money of the
jurisdiction in which the Leased Premises are located
upon execution of the lease, for Suite 350 for the month of
June, 2000.
BASIC RENT (ii) Commencing on the 1st day of July, 2000 and
continuing until the 31st day of May, 2001, the Basic Rent
shall be increased to Five Hundred Sixty-Five Thousand Four
Hundred Twenty-Four and 64/100 dollars ($565,424.64) per
annum of lawful money of the jurisdiction in which the
Leased Premises are located payable in equal monthly
installments of Forty-Seven Thousand One Hundred Eighteen
and 72/100 dollars ($47,118.72) each in advance on the first
day of each month during the Term, the first payment to be
made on the 1st day of July, 2000.
INCREASE IN (iii) Commencing on the 1st day of June, 2001 and
BASIC RENT continuing until the 31st day of May, 2002, the Basic Rent
shall be increased to Five Hundred Ninety-Three Thousand Six
Hundred Ninety-Five and 87/100 dollars ($593,695.87) per
annum of lawful money of the jurisdiction in which the
Leased Premises are located payable in equal monthly
installments of Forty - Nine Thousand Four Hundred
Seventy-Four and 66/100 dollars ($49,474.66) each in advance
on the first day of each month during the Term, the first
payment to be made on the 1st day of June, 2001.
INCREASE IN (iv) Commencing on the 1st day of June, 2002 and
BASIC RENT continuing until the 31st day of May, 2003, the Basic
Rent shall be increased to Six Hundred Twenty-Three Thousand
Three Hundred Eighty and 64/100 dollars ($623,380.64) per
annum of lawful money of the jurisdiction in which the
Leased Premises are located payable in equal monthly
installments of Fifty - One Thousand Nine Hundred
Forty-Eight and 39/100 dollars ($51,948.39) each in advance
on the first day of each month during the Term, the first
payment to be made on the 1st day of June, 2002.
INCREASE IN (v) Commencing on the 1st day of June, 2003 and
BASIC RENT continuing until the 31st day of May, 2004, the Basic Rent
shall be increased to Six undred Fifty-Four Thousand Five
Hundred Forty-Nine and 70/100 dollars ($654,549.70) per
annum of lawful money of the jurisdiction in which the
Leased Premises are located payable in equal monthly
installments of Fifty - Four housand Five Hundred
Forty-Five and 81/100 dollars ($54,545.81) each in advance
on the first day of each month during the Term, the first
payment to be made on the 1st day of June, 2003.
INCREASE IN (vi) Commencing on the 1st day of June, 2004 and
BASIC RENT continuing until the 31st day of May, 2005, the Basic
Rent shall be increased to Six Hundred Eighty-Seven Thousand
Two Hundred Seventy-Seven and 18/100 dollars ($687,277.18)
per annum of lawful money of the jurisdiction
in which the Leased Premises are located payable in equal
monthly installments of Fifty-Seven Thousand Two Hundred
Seventy-Three and 10/100 dollars ($57,273.10) each in
advance on the first day of each month during the Term, the
first payment to be made on the 1st day of June, 2004.
INCREASE IN (vii) Commencing on the 1st day of June, 2005 and
BASIC RENT continuing until the 31st day of May, 2006, the Basic Rent
shall be increased to Seven Hundred Twenty-One Thousand Six
Hundred Forty-One and 04/100 dollars ($721,641.04) per
annum of lawful money of the jurisdiction in which
the Leased Premises are located payable in equal monthly
installments of Sixty Thousand One Hundred Thirty-Six
and 75/100 dollars ($60,136.75) each in advance on the
first day of each month during the Term, the first
payment to be made on the 1st day of June, 2005.
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INCREASE IN (viii) Commencing on the 1st day of June, 2006 and
BASIC RENT continuing until the 31st day of May, 2007, the Basic Rent
shall be increased to Seven Hundred Fifty-Seven Thousand
Seven Hundred Twenty-Three and 10/100 dollars ($757,723.10)
per annum of lawful money of the jurisdiction in which the
Leased Premises are located payable in equal monthly
installments of Sixty - Three Thousand One Hundred
Forty-Three and 58/100 dollars ($63,143.58) each in advance
on the first day of each month during the Term, the first
payment to be made on the 1st day of June, 2006.
ADDITIONAL (b) The Tenant shall, without deduction or right of
RENT offset pay to the Landlord yearly and every year during the
Term as additional rental (herein called "Additional Rent")
(i) the amounts of any Taxes payable by the Tenant to
the Landlord pursuant to the provisions of
Schedule "C" attached hereto; and
(ii) the amounts required to be paid to the
Landlord pursuant to the provisions of
Schedule "D" attached hereto.
PAYMENT - (c) Additional Rent shall be paid and adjusted with
ADDITIONAL RENT reference to a fiscal period of twelve (12) calendar months
("Fiscal Period"), which shall be a calendar year unless the
Landlord shall from time to time have selected a Fiscal
Period which is not a calendar year by written notice to the
Tenant.
The Landlord shall advise the Tenant in writing of
its estimate of the Additional Rent to be payable by the
Tenant during the Fiscal Period (or broken portion of the
Fiscal Period, as the case may be, if applicable at the
commencement or end of the term or because of a change in
Fiscal Period) which commenced upon the commencement date of
the Term and for each succeeding Fiscal Period or broken
portion thereof which commences during the Term. Such
estimate shall in every case be a reasonable estimate and,
if requested by the Tenant, shall be accompanied by
reasonable particulars of the manner in which it was
calculated. The Additional Rent payable by the Tenant shall
be paid in equal monthly installments in advance at the same
time as payment of Basic Rent is due hereunder based on the
Landlord's estimate as aforesaid. From time to time, the
Landlord may re-estimate, on a reasonable basis, the amount
of Additional Rent for any Fiscal Period or broken portion
thereof, in which case the Landlord shall advise the Tenant
in writing of such re-estimate and fix new equal monthly
installments for the remaining balance of such Fiscal Period
or broken portion thereof. After the end of each such Fiscal
Period or broken portion thereof the Landlord shall provide
the Tenant with a statement of the actual Additional Rent
payable in respect of such Fiscal Period or broken portion
thereof and a calculation of the amounts by which the
Additional Rent payable by the Tenant exceeds or is less
than (as the case may be) the aggregate installments paid by
the Tenant on account of Additional Rent for such Fiscal
Period.
Within thirty (30) days after the submission of such
statement either the Tenant shall pay to the Landlord any
amount by which the amount found payable by the Tenant with
respect to such Fiscal Period or broken portion thereof
exceeds the aggregate of the monthly payments made by it on
account thereof during such Fiscal Period or broken portion
thereof, or the Landlord shall pay to the Tenant any amount
by which the amount found payable as aforesaid is less than
the aggregate of such monthly payments.
RECOVERY OF RENT (d) In this Lease "Rent" means all amounts required
to be paid by the Tenant pursuant to this Lease including
without limitation Basic Rent and Additional Rent.
ACCRUAL OF RENT (e) Basic Rent and Additional Rent shall be considered as
accruing from day to day, and for an irregular period of
less than one year or less than one calendar month shall be
apportioned and adjusted by the Landlord for the Fiscal
Periods of the Landlord in which the tenancy created hereby
commences and expires. Where the calculation of Additional
Rent for a period cannot be made until after the termination
of this Lease, the obligation of the Tenant to pay
Additional Rent shall survive the termination hereof and
Additional Rent for such period shall be payable by the
Tenant upon demand by the Landlord. If the Term commences or
expires on any day other than the first or the last day of a
month, Basic Rent and Additional Rent for such fraction of a
month shall be apportioned and adjusted as aforesaid and
paid by the Tenant on the commencement date of the Term.
LIMITATIONS (f) The information set out in statements,
documents or other writings setting out the amount of
Additional Rent submitted to the Tenant under or pursuant to
this Lease shall be binding on the Tenant and deemed to be
accepted by it and shall not be subject to amendment for any
reason unless the Tenant gives written notice (the "Dispute
Notice") to the Landlord within sixty (60) days of the
Landlord's submission of such statement, document, or
writing identifying the statement, document, or writing. The
Dispute Notice shall set out in reasonable detail the reason
why such statement, document or writing is in error or
otherwise should not be binding on the Tenant. If the Tenant
disputes the amount of the Additional Rent as aforesaid, and
if such dispute is not resolved within thirty (30) days
after the
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Tenant delivers the Dispute Notice to the Landlord, then the
Landlord shall cause an audited statement of Additional Rent
to be prepared by an independent nationally recognized firm
of chartered accountants. The statement of Additional Rent
as prepared by such accountants shall be final and binding
upon the parties hereto and within fifteen (15) days after
delivery of such statement of Additional Rent to the parties
by the accountants the Landlord and Tenant shall readjust
Additional Rent as contemplated by section 3(c). The cost of
preparation of such audited statement shall be paid by the
Tenant as Rent unless the amount of Additional Rent payable
by the Tenant as set forth in such audited financial
statement is at least 4% less than the amount of Additional
Rent demanded by the Landlord in accordance with the
statement delivered to the Tenant pursuant to section 3(c).
4. SECURITY DEPOSIT
SECURITY DEPOSIT The Tenant shall pay to the Landlord on execution of this
Lease by the Tenant the sum of One Hundred Twenty-Six
Thousand Two Hundred Eighty-Seven and 18/100 Dollars
($126,287.18) as a deposit to the Landlord to stand as
security for the payment by the Tenant of any and all
present and future debts and liabilities of the Tenant to
the Landlord and for the performance by the Tenant of all of
its obligations arising under or in connection with this
Lease (the "Debts, Liabilities and Obligations"). The
Landlord shall not be required to keep the deposit separate
from its general funds. In the event of the Landlord
disposing of its interest in this Lease, the Landlord shall
credit the deposit to its successor and thereupon shall have
no liability to the Tenant to repay the security deposit to
the Tenant. Subject to the foregoing and to the Tenant not
being in default under this Lease, the Landlord shall repay
the security deposit to the Tenant without interest at the
end of the Term or sooner termination of the Lease provided
that all Debts, Liabilities and Obligations of the Tenant to
the Landlord are paid and performed in full, failing which
the Landlord may on notice to the Tenant elect to retain the
security deposit and to apply it in reduction of the Debts,
Liabilities and Obligations and the Tenant shall remain
fully liable to the Landlord for payment and performance of
the remaining Debts, Liabilities and Obligations.
5. GENERAL COVENANTS
LANDLORD'S (a) The Landlord covenants with the Tenant:
COVENANT
(i) for quiet enjoyment; and
(ii) to observe and perform all the covenants and
obligations of the Landlord herein.
TENANT'S COVENANT (b) The Tenant covenants with the Landlord:
(i) to pay Rent; and
(ii) to observe and perform all the covenants and
obligations of the Tenant herein.
6. USE AND OCCUPANCY
USE The Tenant covenants with the Landlord:
(a) not to use the Leased Premises for any purpose other
than an office for the conduct of the Tenant's business
which is general office and such use shall be consistent
with the character of the Property and compatible with the
other uses of the Property;
WASTE, NUISANCE, (b) not to commit, or permit, any waste, injury or damage to
ETC. the Property including the Leasehold Improvements and
any trade fixtures therein, any loading of the floors
thereof in excess of the maximum degree
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of loading as determined by the Landlord acting reasonably,
any nuisance therein or any use or manner of use causing
annoyance to other tenants and occupants of the Property or
to the Landlord;
INSURANCE RISKS (c) not to do, omit or permit to be done or omitted to be
done upon the Property anything which would cause to be
increased the Landlord's cost of insurance or the costs of
insurance of another tenant of the Property against perils
as to which the Landlord or such other tenant has insured or
which shall cause any policy of insurance on the Property to
be subject to cancellation;
COMPLIANCE WITH (d) to comply at its own expense with all governmental laws,
LAW regulations and requirements (1) related to Tenant's
specific manner of use of the Premises, Tenant's change in
use of the Premises, Tenant's alterations,
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additions, or improvements to the Premises, Tenant's
application for governmental approvals, licenses or permits
or Tenant's negligence of willful misconduct or (2)
pertaining to the condition of the Leasehold Improvements,
trade fixtures, furniture and equipment installed by or on
behalf of the Tenant in the Premises and the making by the
Tenant of any repairs, changes or improvements therein. The
foregoing shall not be a limitation to any Operating
Expenses Tenant is responsible for pursuant to Schedule "D".
ENVIRONMENTAL (e) (i) to conduct and maintain its business and operations
COMPLIANCE at the Leased Premises so as to comply in all respects with
common law and with all present and future applicable
federal, provincial/ state, local,
municipal, governmental or quasi-governmental laws, by-laws,
rules, regulations, licenses, orders, guidelines,
directives, permits, decisions or requirements concerning
occupational or public health and safety or the environment
and any order, injunction, judgment, declaration, notice or
demand issued thereunder, ("Environmental Laws"), in each
case to the extent applicable to Tenant's business and
operations at the Leased Premises;
(ii) not to permit or suffer any substance which is
hazardous or is prohibited, restricted, regulated or
controlled under any Environmental Law to be present at, on
or in the Leased Premises, excluding normal office supplies
in customary quantities, unless it has received the prior
written consent of the Landlord which consent may be
arbitrarily withheld;
RULES AND (f) to observe and perform, and to cause its employees,
REGULATIONS invitees and others over whom the Tenant can reasonably
be expected to exercise control to observe and perform, the
Rules and Regulations contained in Schedule "E" hereto, and
such further and other reasonable rules and regulations and
amendments and additions therein as may hereafter be made by
the Landlord and notified in writing to the Tenant, except
that no change or addition may be made that is inconsistent
with this Lease unless as may be required by governmental
regulation or unless the Tenant consents thereto. The
imposition of such Rules and Regulations shall not create or
imply any obligation of the Landlord to enforce them or
create any liability of the Landlord for their
non-enforcement or otherwise.
6A. LANDLORD REPRESENTATION OF COMPLIANCE
Landlord represents to Tenant that, to the actual knowledge
of Scott Trobbe and Jim Mair (and without any duty of
investigation or inquiry), the Leased Premises comply with
all applicable building codes and other laws and regulations
in effect at the time the applicable improvements comprising
the Leased Premises were constructed. Landlord further
represents to Tenant that, to the actual knowledge of Scott
Trobbe and Jim Mair (and without any duty of investigation
or inquiry), Landlord has received no written notice from
any governmental agency that the Leased Premises are in
violation of any applicable building codes or other laws in
effect as of the date of this Lease.
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7. ASSIGNMENT AND SUB-LETTING
NO ASSIGNMENT (a) The Tenant covenants that it will not assign this Lease
AND SUB-LETTING or sublet all or any part of the Leased Premises or
mortgage or encumber this Lease or the Leased Premises or
any part thereof, or suffer or permit the occupation of
all or any part thereof by others (each of
which is a "Transfer") without the prior written consent of
the Landlord, which consent the Landlord covenants not to
withhold unreasonably (i) as to any assignee, subtenant or
occupant (the "Transferee") who is in a satisfactory
financial condition, agrees to use the Leased Premises for
those purposes permitted hereunder, and (ii) as to any
portion of the Leased Premises which, in the Landlord's
reasonable judgment, is a proper and rational division of
the Leased Premises, subject to the Landlord's right of
termination arising under this paragraph. This prohibition
against a Transfer shall not be construed to include a
prohibition against any Transfer by operation of law. As
used herein "Transfer" shall not include any assignment by
Tenant to a subsidiary of the Tenant so long as Sections
7(d) and 7(e) hereof are complied with by the Tenant, and
provided said subsidiary has a net worth of at least Ten
Million Dollars ($10,000,000.00).
ASSIGNMENT OR (b) The Tenant shall not effect a Transfer unless:
SUB-LETTING
PROCEDURES (i) it shall have received or procured a bona fide written
offer to take an assignment or sublease which is not
inconsistent with the Lease, and the acceptance of which
would not breach any provision of this Lease if this
paragraph is complied with and which the Tenant has
determined to accept subject to this paragraph being
complied with, and
(ii) it shall have first requested and obtained the
consent in writing of the Landlord thereto pursuant to
Section 7(a).
Any request for consent shall be in writing and accompanied
by a copy of the offer certified by the Tenant to be true
and complete, and the Tenant shall furnish to the Landlord
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all information available to the Tenant and reasonably
requested by the Landlord as to the responsibility,
financial standing and business of the proposed Transferee.
Notwithstanding the provisions of sub-paragraph (a), within
twenty (20) days after the receipt by the Landlord of such
request for consent and of all information which the
Landlord shall have requested hereunder, the Landlord shall
have the right upon written notice of termination submitted
to the Tenant, if the request is to assign this Lease or
sublet the whole of the Leased Premises, to cancel and
terminate this Lease, or if the request is to sublet a part
of the Leased Premises only, to cancel and terminate this
Lease with respect to such part, in each case as of a
termination date to be stipulated in the notice of
termination which shall be not less than sixty (60) days or
more than ninety (90) days following the giving of such
notice. In such event the Tenant shall surrender the whole
or part, as the case may be, of the Leased Premises in
accordance with such notice of termination and Basic Rent
and Additional Rent shall be apportioned and paid to the
date of surrender and, if a part only of the Leased Premises
is surrendered, Basic Rent and Additional Rent shall after
the date of surrender abate proportionately. If such consent
shall be given the Tenant shall effect the Transfer only
upon the terms set out in the offer submitted to the
Landlord as aforesaid and not otherwise. Any consent shall
be given without prejudice to the Landlord's rights under
the Lease and shall be limited to the particular Transfer in
respect of which it was given and shall not be deemed to be
an authorization for or consent to any further or other
Transfer.
EXCESS TRANSFER (c) In the event the Landlord consents to any Transfer,
RENT the Tenant shall p ay to the Landlord, as and when amounts
on account are due or paid by the Transferee to the Tenant,
50 of all excess Transfer rents (hereinafter called the
"Excess Transfer Rent"), if any, as Rent. The Excess
Transfer Rent shall be determined in accordance with the
following:
It shall be a condition to Landlord's consent to any
subleasing, assignment or other transfer of part or all of
Tenant's interest in the Premises (hereinafter referred to
as a "Transfer") that upon Landlord's consent to any
Transfer, Tenant shall pay and continue to pay as Additional
Rent over the term of the sublease or assignment to Landlord
fifty percent (505%) of all consideration of any kind
whatsoever (including, but not by way of limitation, a
premium rental for a sublease or lump sum payment for an
assignment, and/or the value of any stock warrants or stock
options given as consideration for an assignment or
subletting, and/or any consideration or money paid in
consideration of or for any leasehold improvements
constructed or installed by or for Tenant at Tenant's cost,
or any portion of such leasehold improvements constructed by
or for Tenant, and/or consideration or other money paid (in
excess of the fair market value thereof) for Tenant's
fixtures, trade fixtures, equipment and/or personal property
used in connection with the Premises) in excess of the
rental and other charges due Landlord under this Lease
(prorated in the event of a sublease of less than the entire
Premises), paid to or on account of Tenant, after Tenant's
deduction therefrom of all reasonable brokerage commissions
and reasonable attorney's fees to effect such assignment or
subletting.
The Tenant agrees to promptly furnish such information with
regard to the Excess Transfer Rent as the Landlord may
reasonably request from time to time.
ASSUMPTION OF (d) No Transfer shall be effective unless the Transferee
OBLIGATIONS shall execute an agreement on the Landlord's form,
assuming all the obligations of the Tenant hereunder, and
shall have paid to the Landlord its reasonable fee for
processing the Transfer.
TENANT'S (e) The Tenant agrees that any consent to a Transfer shall
CONTINUING not thereby release the Tenant of its obligations hereunder.
OBLIGATIONS
CHANGE OF CONTROL (f) If the Tenant or occupant of the Leased Premises at any
time is a corporation, it is acknowledged and agreed that
the transfer of the majority of the issued apital stock
of the corporation or the transfer or issuance
of any capital stock of the corporation sufficient to
transfer effective voting control of the corporation to
others than the shareholder or shareholders having effective
voting control of the corporation immediately prior to such
transfer or issuance, shall be deemed for all purposes of
this paragraph 7 to be a Transfer and, accordingly, a
violation of this paragraph 7 respecting assignment of this
Lease unless the prior written consent of the Landlord is
first obtained, and the Landlord shall have all of the same
rights in respect thereof as though any such transfer or
issuing of shares or proposed transferring or issuing of
shares were a Transfer. The Landlord shall have access at
all times to the corporate books and records of the Tenant,
and the Tenant shall make the same available to the Landlord
or its representatives upon request, for inspection and
copying at all times in order to ascertain whether or not
there has at any time during the Term of this Lease been a
transfer or issuing of shares sufficient to constitute a
change in the effective voting control of the Tenant. This
subparagraph 7 (f) shall not apply to the Tenant if and for
so long as the Tenant is a corporation whose shares are
listed and traded on any recognized stock exchange in Canada
or the United States, and shall not apply to a corporation
that controls the Tenant if such controlling corporation
itself is a corporation with a net worth of at least Fifty
Million Dollars ($50,000,000.00). Tenant agrees that any
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consent of transfer or change of control does not release
Tenant from its obligations hereunder.
(g) Notwithstanding anything in this Lease to the contrary,
the Tenant shall not be permitted without the written
consent of the Landlord pursuant to this Section 7 to effect
a Transfer to tenants currently occupying space in the
Property. Landlord consents to a sublease to the current
tenant, Nick Talesfore, dba Talesfore Design, pursuant to
Section 7 (a), provided that Tenant complies with the
remaining provisions of this Section 7 with respect to such
transfer.
8. REPAIR & DAMAGE
LANDLORD'S (a) The Landlord covenants with the Tenant to keep in a
REPAIRS TO good and reasonable state of repair and decoration:
BUILDING &
PROPERTY (i) those portions of the Property consisting of the
entrance, lobbies, stairways, corridors, landscaped
areas, parking areas, and other facilities from time to
time provided for use in common by the Tenant and other
tenants of the Building or Property, and the exterior
portions (including foundations and roofs) of all
buildings and structures from time to time forming part
of the Property and affecting its general appearance;
and
(ii) the Building (other than the Leased Premises and
premises of other tenants) including the systems for
interior climate control, the elevators and escalators
(if any), entrance lobbies, stairways, corridors and
washrooms from time to time provided for use in common
by the Tenant and other tenants of Building or
Property and the systems provided for use in common by
the Tenant and other tenants of the Building or
Property and the systems provided for bringing utilities
to the Leased Premises.
LANDLORD'S (b) The Landlord covenants with the Tenant to repair, so
REPAIRS TO THE far as reasonably feasible, and as expeditiously as
LEASED PREMISES reasonably feasible, defects in standard demising walls or
in structural elements, exterior walls of the Building,
suspended ceiling, electrical and mechanical
installations standard to the Building installed by the
Landlord in the Leased Premises (if and to the extent that
such defects are sufficient to impair the Tenant's use of
the Leased Premises while using them in a manner consistent
with this Lease) and "Insured Damage" (as herein defined).
The Landlord shall in no event be required to make repairs
to Leasehold Improvements made by the Tenant, or by the
Landlord on behalf of the Tenant or another tenant or to
make repairs to wear and tear within the Leased Premises.
Tenant's Repairs (c) The Tenant covenants with the Landlord to repair,
maintain and keep at the Tenant's own cost, except insofar
as the obligation to repair rests upon the Landlord pursuant
to this paragraph, the Leased Premises, including Leasehold
Improvements in good and substantial repair, reasonable wear
and tear excepted, provided that this obligation shall not
extend to structural elements or to exterior glass or to
repairs which the Landlord would be required to make under
this paragraph but for the exclusion therefrom of defects
not sufficient to impair the Tenant's use of the Leased
Premises while using them in a manner consistent with this
Lease. The Landlord may enter the Leased Premises at all
reasonable times and view the condition thereof and the
Tenant covenants with the Landlord to repair, maintain and
keep the Leased Premises in good and substantial repair
according to notice in writing, reasonable wear and tear
excepted. If the Tenant shall fail to repair as aforesaid
after reasonable notice to do so, the Landlord may effect
the repairs and the Tenant shall pay the reasonable cost
thereof to the Landlord on demand. The Tenant covenants with
the Landlord that the Tenant will at the expiration of
the Term or sooner termination thereof peaceably surrender
the Leased Premises and appurtenances in good and
substantial repair and condition, reasonable wear and tear
excepted.
Indemnification (d) If any part of the Property becomes out of repair,
damaged or destroyed through the negligence of, or misuse
by, the Tenant or its employees, agents, invitees or others
under its control, the Tenant shall pay the Landlord on
demand the expense of repairs or replacements, including the
Landlord's reasonable administration charge thereof,
necessitated by such negligence or misuse.
DAMAGE AND (e) It is agreed between the Landlord and the Tenant
DESTRUCTION that:
(i) in the event of damage to the Property or to any
part thereof, if in the reasonable opinion of the
Landlord the damage is such that the Leased Premises
or any substantial part thereof is rendered not
reasonably capable of use and occupancy by the Tenant
for the purposes of its business for any period of
time in excess of ten (10) days, then
(1) unless the damage was caused by the
fault or negligence of the Tenant or its
employees, agents, invitees or others
under its control, from the date of
occurrence of the damage and until the
Leased Premises are again reasonably
capable for use and occupancy as
aforesaid, the Rent payable pursuant to
this Lease shall abate from time to time
in proportion to the part or parts of
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the Leased Premises not reasonably
capable of such use and occupancy, and
(2) unless this Lease is terminated as
hereinafter provided, the Landlord or
the Tenant as the case may be (according
to the nature of the damage and their
respective obligations to repair as
provided in sub-paragraphs (a), (b) and
(c) of this paragraph) shall repair such
damage with all reasonable diligence,
but to the extent that any part of the
Leased Premises is not reasonably
capable of such use and occupancy by
reason of damage which the Tenant is
obligated to repair hereunder, any
abatement of Rent to which the Tenant
would otherwise be entitled hereunder
shall not extend later than the time by
which, in the reasonable opinion of the
Landlord, repairs by the Tenant ought to
have been completed with reasonable
diligence;
(ii) if the damage is such that the Leased Premises
are rendered untenantable, in whole or in part, and
if, in the opinion of the Landlord, the damage cannot
be repaired with reasonable diligence within one
hundred and eighty (180) days from the happening of
the damage, then the Landlord may, within thirty (30)
days after the date of the damage, terminate this
Lease by notice to the Tenant. Upon the Landlord
giving such notice, this Lease shall be terminated as
of the date of the damage and the Rent and all other
payments for which the Tenant is liable under the
terms of this Lease shall be apportioned and paid in
full to the date of the damage. If the Leased
Premises are not repaired within 180 days after the
date of damage, the Tenant may, within 30 days after
such 180th day, terminate this Lease by notice to the
Landlord. Upon the Tenant giving such notice, this
Lease shall be terminated as of the date of damage
and the Rent and all other payments for which the
Tenant is liable under the terms of this Lease shall
be apportioned and paid in full to the date of
damage;
(iii) the Landlord shall not be required to use plans
and specifications and working drawings used in the
original construction of the Building and nothing in
this Section requires the Landlord to rebuild the
Building in the condition and state that existed
before the damage, but the Building, as rebuilt, will
have reasonably similar facilities and services to
those in the Building prior to the damage; and
(iv) if premises whether of the Tenant or other
tenants of the Property comprising in the aggregate
half or more of the total number of square feet of
rentable office area in the Property or half or more
of the total number of square feet of rentable office
area in the Building (as determined by the Landlord)
or portions of the Property which affect access or
services essential thereto, are substantially damaged
or destroyed by any cause and if in the reasonable
opinion of the Landlord the damage cannot reasonably
be repaired within one hundred and eighty (180) days
after the occurrence thereof, then the Landlord may,
by written notice to the Tenant given within thirty
(30) days after the occurrence of such damage or
destruction, terminate this Lease, in which event
neither the Landlord nor the Tenant shall be bound to
repair as provided in sub-paragraphs (a) (b) and (c)
of this paragraph, and the Tenant shall instead
deliver up possession of the Leased Premises to the
Landlord with reasonable expedition but in any event
within sixty (60) days after delivery of such notice
of termination, and Rent shall be apportioned and
paid to the date upon which possession is so
delivered up (but subject to any abatement to which
the Tenant may be entitled under sub-paragraph (e)
(i) of this paragraph).
9. INSURANCE AND LIABILITY
LANDLORD'S (a) The Landlord shall take out and keep in force during
INSURANCE the Term insurance with respect to the Property except
for the "Leasehold Improvements" (as hereinafter defined)
in the Leased Premises. The insurance to be
maintained by the Landlord shall be in respect of perils and
in amounts and on terms and conditions which from time to
time are insurable at a reasonable premium and which are
normally insured by reasonable prudent owners of properties
similar to the Property, all as from time to time determined
at reasonable intervals by insurance advisors selected by
the Landlord, and whose opinion shall be conclusive. Unless
and until the insurance advisors shall state that any such
perils are not customarily insured against by owners of
properties similar to the Property, the perils to be insured
against by the Landlord shall include, without limitation,
public liability, boilers and machinery, fire and extended
perils and may include at the option of the Landlord losses
suffered by the Landlord in its capacity as Landlord through
business interruption. The insurance to be maintained by the
Landlord shall contain a waiver by the insurer of any rights
of subrogation or indemnity or any other claim over which
the insurer might otherwise be entitled against the Tenant
or the agents or employees of the Tenant.
TENANT'S (b) The Tenant shall take out and keep in force during the
INSURANCE Term:
(i) comprehensive general public liability insurance
all on an occurrence basis with respect to the
business carried on in or from the Leased Premises
and the Tenant's use and occupancy of the
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Leased Premises and of any other part of the
Property, with coverage for any one occurrence or
claim of not less than Five Million Dollars
($5,000,000) or such other amount as the Landlord
may reasonably require upon not less than one (1)
month notice at any time during the Term, which
insurance shall include the Landlord as a named
insured and shall contain a cross liability
clause protecting the Landlord in respect of claims
by the Tenant as if the Landlord were separately
insured; and,
(ii) insurance against such other perils and in
such amounts as the Landlord may from time to
time reasonably require upon not less than
ninety (90) days' written notice, such
requirement to be made on the basis that the
required insurance is customary at the time
for similarly situated tenants of properties
similar to the Property.
All insurance required to be maintained by the Tenant shall
be on terms and with insurers satisfactory to the Landlord.
Each policy shall contain: (A) a waiver by the insurer of
any rights of subrogation or indemnity or any other claim
over to which the insurer might otherwise be entitled
against the Landlord or the agents or employees of the
Landlord, (B) a cross liability clause and (C) an
undertaking by the insurer that no material change adverse
to the Landlord or the Tenant will be made, and the policy
will not lapse or be canceled, except after not less than
thirty (30) days' written notice to the Landlord of the
intended change, lapse or cancellation. The Tenant shall
furnish to the Landlord, if and whenever requested by it,
certificates or other evidences acceptable to the Landlord
as to the insurance from time to time effected by the Tenant
and its renewal or continuation in force, together with
evidence as to the method of determination of full
replacement cost of the Tenant's Leasehold Improvements,
trade fixtures, furniture and equipment, and if the Landlord
reasonably concludes that the full replacement cost has been
underestimated, the Tenant shall forthwith arrange for any
consequent increase in coverage required under sub-paragraph
(b). If the Tenant shall fail to take out, renew and keep in
force such insurance, or if the evidences submitted to the
Landlord are unacceptable to the Landlord (or no such
evidences are submitted within a reasonable period after
request therefor by the Landlord), then the Landlord may
give to the Tenant written notice requiring compliance with
this sub-paragraph and specifying the respects in which the
Tenant is not then in compliance with this sub-paragraph. If
the Tenant does not within forty-eight (48) hours provide
appropriate evidence of compliance with this sub-paragraph,
the Landlord may (but shall not be obligated to) obtain some
or all of the additional coverage or other insurance which
the Tenant shall have failed to obtain, without prejudice to
any other rights of the Landlord under this Lease or
otherwise, and the Tenant shall pay all premiums and other
reasonable expenses incurred by the Landlord to the Landlord
on demand.
LIMITATION OF (c) The Tenant agrees that the Landlord shall not be
LANDLORD'S liable for any bodily injury or death of, or loss or damage
LIABILITY to any property belonging to, the Tenant or its employees,
invitees or licensees or any other person in, on or about
the Property unless resulting from the actual willful
misconduct or gross negligence of the Landlord or its own
employees; provided however, under no circumstances shall
Landlord be liable for any claims of lost profits, loss of
income or lost business. In no event shall the Landlord be
liable for any damage, including indirect, special or
consequential damages, which is caused by steam, water,
rain or snow or other thing which may leak into, issue or
flow from any part of the Property or from the pipes or
plumbing works, including the sprinkler system (if any)
therein or from any other place or for any damage caused by
or attributable to the condition or arrangement of any
electric or other wiring or of sprinkler heads (if any)
or for any such damage caused by anything done or omitted by
any other tenant, except to the extent the same arise from
the actual willful misconduct or gross negligence of the
Landlord or its employees. In the event Tenant has any claim
against Landlord under this Lease, such claim shall only be
against Landlord's interest in the Property and Landlord's
members shall have no liability hereunder.
INDEMNITY OF (d) Except with respect to claims or liabilities in respect
LANDLORD of any damage which is Insured Damage to the extent of
the cost of repairing such Insured Damage, the Tenant agrees
to indemnify and save harmless the Landlord in respect of:
(i) all claims for bodily injury or death,
property damage or other loss or damage
arising from the conduct of any work or any
act or omission of the Tenant or any assignee,
sub-tenant, agent, employee, contractor,
invitee or licensee of the Tenant, and in
respect of all costs, expenses and liabilities
incurred by the Landlord in connection with or
arising out of all such claims, including the
expenses of any action or proceeding
pertaining thereto; and
(ii) any loss, cost, (including, without
limitation, lawyers' fees and disbursements),
expense or damage suffered by the Landlord
arising from any breach by the Tenant of any
of its covenants and obligations under this
Lease.
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DEFINITION OF
"INSURED DAMAGE" e) For purposes of this Lease, "Insured Damage"
means that part of any damage occurring to the Property of
which the entire cost of repair (or the entire cost of
repair other than deductible amount properly collectable by
the Landlord as part of the Additional Rent) is actually
recovered by the Landlord under a policy or policies of
insurance from time to time effected by the Landlord
pursuant to sub-paragraph (a) Where an applicable policy of
insurance contains an exclusion for damages recoverable from
a third party, claims as to which the exclusion applies
shall be considered to constitute Insured Damage only if the
Landlord successfully recovers from the third party.
10. EVENTS OF DEFAULT AND REMEDIES
EVENTS OF DEFAULT (a) In the event of the happening of any one of the
AND REMEDIES following events:
(i) the Tenant shall have failed to pay an
installment of Rent or any other amount
payable hereunder when due, and such failure
shall be continuing for a period of more than
ten (10) days after the date such installment
or amount was due;
(ii) there shall be a default of or with any
condition, covenant, agreement or other
obligation on the part of the Tenant to be
kept, observed or performed hereunder (other
than the obligation to pay Rent or any other
amount of money) and such default shall be
continuing for a period of more than fifteen
(15) days after written notice by the Landlord
to the Tenant specifying the default and
requiring that it be cured;
(iii) if any policy of insurance upon the Property
or any part thereof from time to time effected
by the Landlord shall be canceled or about to
be canceled by the insurer by reason of the
use or occupation of the Leased Premises by
the Tenant or any assignee, sub-tenant or
licensee of the Tenant or anyone permitted by
the Tenant to be upon the Leased Premises and
the Tenant after receipt of notice in writing
from the Landlord shall have failed to take
such immediate steps in respect of such use or
occupation as shall enable the Landlord to
reinstate or avoid cancellation (as the case
may be) of such policy of insurance;
(iv) the Leased Premises shall, without the prior
written consent of the Landlord, be used by
any other persons than the Tenant or a
permitted Transferee or for any purpose other
than that for which they were leased or
occupied or by any persons whose occupancy is
prohibited by this Lease;
(v) the Leased Premises shall be vacated or
abandoned, or remain unoccupied without the
prior written consent of the Landlord for
fifteen (15) consecutive days or more while
capable of being occupied;
(vi) the balance of the Term of this Lease or any
of the goods and chattels of the Tenant
located in the Leased Premises, shall at any
time be seized in execution or attachment; or
(vii) the Tenant shall make any assignment for the
benefit of creditors or become bankrupt or
insolvent or take the benefit of any statute
for bankrupt or insolvent debtors or, if a
corporation, shall take any steps or suffer
any order to be made for its winding-up or
other termination of its corporate existence;
or a trustee, receiver or receiver-manager or
agent or other like person shall be appointed
of any of the assets of the Tenant;
then the Landlord shall have the following rights and
remedies all of which are cumulative and not alternative and
not to the exclusion of any other or additional rights and
remedies in law or equity available to the Landlord by
statute or otherwise:
(A) to remedy or attempt to remedy any default of the
Tenant, and in so doing to make any payments due or
alleged to be due by the Tenant to third parties and
to enter upon the Leased Premises to do any work or
other things therein, and in such event all
reasonable expenses of the Landlord in remedying or
attempting to remedy such default shall be payable by
the Tenant to the Landlord on demand;
(B) with respect to unpaid overdue Rent, to the payment
by the Tenant of the Rent and of interest (which said
interest shall be deemed included herein in the term
"Rent") thereon at a rate equal to the lesser of
three percent (3%) above the prime commercial loan
rate charged to borrowers having the highest credit
rating from time to time by the Landlord's principal
bank from the date upon which the same was due until
actual payment thereof and the maximum amount allowed
under the laws of the jurisdiction in which the
Building is located;
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<PAGE>
(C) to terminate this Lease forthwith by leaving upon the
Leased Premises or by affixing to an entrance door to
the Leased Premises notice terminating the Lease and
to immediately thereafter cease to furnish any
services hereunder and enter into and upon the Leased
Premises or any part thereof in the name of the whole
and the same to have again, re-possess and enjoy as
of its former estate, anything in this Lease
contained to the contrary notwithstanding. The Tenant
hereby expressly waives any and all notices (other
than those notices specifically outlined in this
Lease) to cure or vacate or to quit the Leased
Premises provided by current or future law;
(D) to enter the Leased Premises as agent of the Tenant
and as such agent to re-let them and to receive the
rent therefor and as the agent of the Tenant to take
possession of any furniture or other property thereon
and upon giving ten (10) days' written notice to the
Tenant to store the same at the expense and risk of
the Tenant or to sell or otherwise dispose of the
same at public or private sale without further notice
and to apply the proceeds thereof and any rent
derived from re-letting the Leased Premises upon
account of the Rent due and to become due under this
Lease and the Tenant shall be liable to the Landlord
for the deficiency if any; and
(E) in the event of any breach by the Tenant of any of
the covenants or provisions of this Lease, the
Landlord shall have the right of injunction and the
right to invoke any remedy allowed at law or in
equity, and mention in this Lease of any particular
remedy shall not preclude the Landlord from any other
remedy at law or in equity. Tenant hereby expressly
waives any and all rights of redemption or to any
notice to quit granted by or under any present or
future laws in the event of this Lease being
terminated and/or Landlord obtaining possession of
the Leased Premises pursuant to the provisions of
this section.
PAYMENT OF RENT, (b) Upon the giving by the Landlord of a notice in
ETC.ON writing terminating this Lease under paragraph 10
TERMINATION (a)(C), above, this Lease and the Term shall
terminate, the Tenant shall remain liable for and
shall pay on demand by the Landlord (i) the full
amount of all Rent which would have accrued until the
date on which this Lease would have expired had such
such termination
not occurred, and any and all damages and expenses
incurred by the Landlord in re-entering and
repossessing the Leased Premises in making good any
default of the Tenant, in making any alterations to
the Leased Premises, and any and all expenses which
the Landlord may incur during the occupancy of any
new tenant, less (ii) the net proceeds of any
re-letting of the Leased Premises which has occurred
at the time of the aforesaid demand by the Landlord
to the Tenant. The Tenant agrees to pay to the
Landlord the difference between items (i) and (ii)
above for the period through and including the date
on which this Lease would have expired if it had not
been terminated. The Landlord shall be entitled to
any excess with no credit to the Tenant. The Landlord
may, in its sole discretion, make demand on the
Tenant as aforesaid on any one or more occasions, and
any suit brought by the Landlord to enforce
collection of such difference for any one month shall
not prejudice the Landlord's right to enforce the
collection of any difference for any subsequent month
or months. In addition to the foregoing, and without
regard to whether this Lease has been terminated,
Tenant shall pay to the Landlord all costs incurred
by the Landlord, including reasonable attorneys'
fees, with respect to any lawsuit or action
instituted or taken by the Landlord to enforce the
provisions of this Lease. The Tenant's liability
shall survive the institution of summary proceedings
and the issuance of any warrant hereunder.
If the Landlord determines that it is impracticable
or extremely difficult to fix the actual damages,
then, as an alternative to the remedy set forth in
the preceding paragraph, the Tenant will pay to the
Landlord on demand, liquidated and agreed final
damages for the Tenant's default calculated in
accordance with this paragraph. Liquidated damages
hereunder shall be an amount equal to the present
value at a rate of six percent (6%) per annum of the
excess, if any, of (i) all Rent payable under this
Lease from the date of such demand for what would be
the then unexpired Term of this Lease in the absence
of such termination over (ii) the then fair market
rental value of the Leased Premises (as determined by
the Landlord). If any law shall limit the amount
agreed upon, the Landlord shall be entitled to the
maximum amount allowable under such law. Nothing
herein shall be construed to affect or prejudice the
Landlord's right to prove, and claim in full, unpaid
rent accrued prior to termination of this Lease. Upon
termination of this Lease and the Term, the Tenant
shall immediately deliver up possession of the Leased
Premises to the Landlord, and the Landlord may
forthwith re-enter and take possession of them.
(c) The Tenant shall pay to the Landlord on demand all
costs and expenses, including lawyers' fees, incurred
by the Landlord in enforcing any of the obligations
of the Tenant under this Lease.
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ADDITIONAL PROVISIONS
COMMON AREAS 11. The Tenant acknowledges and agrees that the common
areas of the Property shall at all times be subject
to the exclusive management and control of the Landlord.
Without limiting the generality of the foregoing, the Tenant
specifically acknowledges and agrees that the Landlord may
temporarily close or restrict the use of all or any part of
the common areas of the Property in an emergency, or for
security or crowd control purposes, to facilitate tenants
moving in or out of the building, or for the purpose of
making repairs, alterations or renovations. The Landlord
agrees not to permanently alter such common areas in any
manner which would deny reasonable access to the Leased
Premises. In the event of any such temporary closure or
restriction of use or if changes are made to such common
areas by the Landlord, the Landlord shall not be subject to
any liability nor shall the Tenant be entitled to any
compensation or any diminution or abatement of Rent and such
closures, restriction and changes shall not be deemed to be
a constructive or actual eviction or a breach of the
Landlord's covenant for quiet enjoyment.
12. [Intentionally omitted]
SUBORDINATION AND 13. This Lease and all rights of the Tenant hereunder are
ATTORNMENT subject and subordinate to all underlying leases and
charges, or mortgages now or hereafter existing (including
charges, and mortgages by way of debenture, note, bond,
deeds of trust and mortgage and all instruments supplemental
thereto) which may now or hereafter affect the Property or
any part thereof and to all renewals, modifications,
consolidations, replacements and extensions thereof provided
the lessor, chargee, mortgagee or trustee agrees to accept
this Lease if not in default; and in recognition of the
foregoing the Tenant agrees that it will, whenever
requested, attorn to such lessor, chargee, mortgagee as a
tenant upon all the terms of this Lease. The Tenant agrees
to execute promptly whenever requested by the Landlord or by
the holder of any such lease, charge, or mortgage an
instrument of subordination or attornment as may be required
of it.
CERTIFICATES 14. The Tenant agrees that it shall promptly whenever
requested by the Landlord from time to time execute and
deliver to the Landlord, and if required by the Landlord, to
any lessor, chargee, or mortgagee (including any trustee) or
other person designated by the Landlord, an acknowledgment
in writing as to the then status of this Lease, including as
to whether it is in full force and effect, is modified or
unmodified, confirming the Rent payable hereunder and the
state of the accounts between Landlord and the Tenant, the
existence or non-existence of defaults, and any other
matters pertaining to this Lease as to which the Landlord
shall request an acknowledgment.
INSPECTION OF AND 15. The Landlord shall be permitted at any time and from
ACCESS TO THE time to time to enter and to have its authorized agents,
LEASED PREMISES employees and contractors enter the Leased Premises for the
purposes of inspection, window cleaning, maintenance,
providing janitor service, making repairs, alterations or
improvements to the Leased Premises or the Property, or to
have access to utilities and services (including all ducts
and access panels (if any), which the Tenant agrees not to
obstruct) and the Tenant shall provide free and unhampered
access for the purpose, and shall not be entitled to
compensation or any diminution or abatement of Rent for any
inconvenience, nuisance or discomfort caused thereby. The
Landlord and its authorized agents and employees shall be
permitted entry to the Leased Premises for the purpose of
exhibiting them to prospective tenants. The Landlord in
exercising its rights under this paragraph shall do so to
the extent reasonably necessary so as to minimize
interference with the Tenant's use and enjoyment of the
Leased Premises provided that in an emergency the Landlord
or persons authorized by it may enter the Leased Premises
without regard to minimizing interference.
DELAY 16. Except as herein otherwise expressly provided, if and
whenever and to the extent that either the Landlord or the
Tenant shall be prevented, delayed or restricted in the
fulfillment of any obligation hereunder in respect of the
supply or provision of any service or utility, the making of
any repair, the doing of any work or any other thing (other
than the payment of moneys required to be paid by the Tenant
to the Landlord hereunder) by reason of:
(a) strikes or work stoppages;
(b) being unable to obtain any material, service,
utility or labor required to fulfill such
obligation;
(c) any statute, law or regulation of, or
inability to obtain any permission from any
government authority having lawful
jurisdiction preventing, delaying or
restricting such fulfillment; -or-
(d) other unavoidable occurrence,
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the time for fulfillment of such obligation shall be
extended during the period in which such circumstance
operates to prevent, delay or restrict the fulfillment
thereof, and the other party to this Lease shall not be
entitled to compensation for any inconvenience, nuisance or
discomfort thereby occasioned; provided that nevertheless
the Landlord will use its best efforts to maintain services
essential to the use and enjoyment of the Leased Premises
and provided further that if the Landlord shall be
prevented, delayed or restricted in the fulfillment of any
such obligation hereunder by reason of any of the
circumstances set out in sub-paragraph (c) of this paragraph
15 and to fulfill such obligation could not, in the
reasonable opinion of the Landlord, be completed without
substantial additions to or renovations of the Property, the
Landlord may on sixty (60) days' written notice to the
Tenant terminate this Lease.
WAIVER 17. If either the Landlord or the Tenant shall overlook,
excuse, condone or suffer any default, breach,
non-observance, improper compliance or non-compliance by the
other of any obligation hereunder, this shall not operate as
a waiver of such obligation in respect of any continuing or
subsequent default, breach, or non-observance, and no such
waiver shall be implied but shall only be effective if
expressed in writing.
SALE, DEMOLITION 18. (a) The term "Landlord" as used in this Lease,
AND RENOVATION means only the owner for the time being of the
Property, so that in the event of any sale or sales or
transfer or transfers of the Property, or the making of
any lease or leases thereof, or the sale or sales or
the transfer or transfers or the assignment or
assignments of any such lease or leases, previous
landlords shall be and hereby are relieved of all
covenants and obligations of Landlord hereunder. It
shall be deemed and construed without further agreement
between the parties, or their successors in interest,
or between the parties and the transferee or acquirer,
at any such sale, transfer or assignment, or lessee on
the making of any such lease, that the transferee,
acquirer or lessee has assumed and agreed to carry out
any and all of the covenants and obligations of
Landlord hereunder to Landlord's exoneration, and
Tenant shall thereafter be bound to and shall attorn to
such transferee, acquirer or lessee, as the case may
be, as Landlord under this Lease;
(b) Notwithstanding anything contained in this
Lease to the contrary, in the event the
Landlord intends to demolish or to renovate
substantially all the Building, then the
Landlord, upon giving the Tenant one hundred
and eighty (180) days' written notice, shall
have the right to terminate this Lease and
this Lease shall thereupon expire on the
expiration of one hundred and eighty (180)
days from the date of the giving of such
notice without compensation of any kind to the
Tenant.
PUBLIC TAKING 19. The Landlord and Tenant shall co-operate, each with the
other, in respect of any Public Taking of the Leased
Premises or any part thereof so that the Tenant may receive
the maximum award to which it is entitled in law for
relocation costs and business interruption and so that the
Landlord may receive the maximum award for all other
compensation arising from or relating to such Public Taking
(including all compensation for the value of the Tenant's
leasehold interest subject to the Public Taking) which shall
be the property of the Landlord, and the Tenant's rights to
such compensation are hereby assigned to the Landlord. If
the whole or any part of the Leased Premises is Publicly
Taken, as between the parties hereto, their respective
rights and obligations under this Lease shall continue until
the day on which the Public Taking authority takes
possession thereof. If the whole or any part of the Leased
Premises is Publicly Taken, the Landlord shall have the
option, to be exercised by written notice to the Tenant, to
terminate this Lease and such termination shall be effective
on the day the Public Taking authority takes possession of
the whole or the portion of the Property Publicly Taken.
Rent and all other payments shall be adjusted as of the date
of such termination and the Tenant shall, on the date of
such Public Taking, vacate the Leased Premises and surrender
the same to the Landlord, with the Landlord having the right
to re-enter and re-possess the Leased Premises discharged of
this Lease and to remove all persons therefrom. In this
paragraph, the words "Public Taking" shall include
expropriation and condemnation and shall include a sale by
the Landlord to an authority with powers of expropriation,
condemnation or taking, in lieu of or under threat of
expropriation or taking and "Publicly Taken" shall have a
corresponding meaning.
REGISTRATION OF 20. The Tenant agrees with the Landlord not to register this
LEASE Lease in any recording office and not to register notice of
this Lease in any form without the prior written consent of
the Landlord. If such consent is provided such notice of
Lease or caveat shall be in such form as the Landlord shall
have approved and upon payment of the Landlord's reasonable
fee for same and all applicable transfer or recording taxes
or charges. The Tenant shall remove and discharge at
Tenant's expense registration of such a notice or caveat at
the expiry or earlier termination of the Term, and in the
event of Tenant's failure to so remove or discharge such
notice or caveat after ten (10) days' written notice by
Landlord to Tenant, the Landlord may in the name and on
behalf of the Tenant execute a discharge of such a notice or
caveat in order to remove and discharge such notice of
caveat and for the purpose thereof the Tenant hereby
irrevocably constitutes and appoints any officer of the
Landlord the true and lawful attorney of the Tenant.
LEASE ENTIRE 21. The Tenant acknowledges that there are no covenants,
AGREEMENT representations, warranties, agreements or conditions
express or implied, collateral or otherwise forming part of
or in any way affecting or relating to this Lease save as
expressly set out in this Lease and Schedules attached
hereto and that this Lease and such Schedules constitute the
entire agreement between the Landlord and the Tenant and may
not be modified except as herein explicitly provided or
except by agreement in writing executed by the Landlord and
the Tenant.
14
<PAGE>
NOTICES 22. Any notice, advice, document or writing required or
contemplated by any provision hereof shall be given in
writing and if to the Landlord, either delivered personally
to an officer of the Landlord or mailed by prepaid mail
addressed to the Landlord at the said local office address
of the Landlord shown above, and if to the Tenant, either
delivered personally to the Tenant (or to an officer of the
Tenant, if a corporation) or mailed by prepaid mail
addressed to the Tenant at the Leased Premises, or if an
address of the Tenant is shown in the description of the
Tenant above, to such address. Every such notice, advice,
document or writing shall be deemed to have been given when
delivered personally, or if mailed as aforesaid, upon the
fifth day after being mailed. The Landlord may from time to
time by notice in writing to the Tenant designate another
address as the address to which notices are to be mailed to
it, or specify with greater particularity the address and
persons to which such notices are to be mailed and may
require that copies of notices be sent to an agent
designated by it. The Tenant may, if an address of the
Tenant is shown in the description of the Tenant above, from
time to time by notice in writing to the Landlord, designate
another address as the address to which notices are to be
mailed to it, or specify with greater particularity the
address to which such notices are to be mailed.
INTERPRETATION 23. In this Agreement "herein", "hereof"', "hereby",
"hereunder", "hereto", "hereinafter" and similar expressions
refer to this Lease and not to any particular paragraph,
clause or other portion thereof, unless there is something
in the subject matter or context inconsistent therewith; and
the parties agree that all of the provisions of this Lease
are to be construed as covenants and agreements as though
words importing such covenants and agreements were used in
each separate paragraph hereof, and that should any
provision or provisions of this Lease be illegal or not
enforceable it or they shall be considered separate and
severable from the Lease and its remaining provisions shall
remain in force and be binding upon the parties hereto as
though the said provision or provisions had never been
included, and further that the captions appearing for
the provisions of this Lease have been inserted as a matter
of convenience and for reference only and in no way define,
limit or enlarge the scope or meaning of this Lease or of
any provisions hereof.
EXTENT OF LEASE 24. This Agreement and everything herein contained shall
OBLIGATIONS enure to the benefit of and be binding upon the
respective heirs, executors, administrators, successors,
assigns and other legal representatives, as the case
may be, of each and every of the parties hereto, subject to
the granting of consent by the Landlord to any assignment or
sublease, and every reference herein to any party hereto
shall include the heirs, executors, administrators,
successors, assigns and other legal representatives of such
party, and where there is more than one tenant or there is a
male or female party the provisions hereof shall be read
with all grammatical changes thereby rendered necessary and
all covenants shall be deemed joint and several.
USE AND 25. If the Tenant shall for any reason use or occupy the
OCCUPANCY Leased Premises in any way prior to the commencement of
PRIOR TO TERM the Term without there being an existing lease between the
Landlord and Tenant under which the Tenant has occupied the
Leased Premises, then during such prior use or occupancy
the Tenant shall be a Tenant of the Landlord and shall be
subject to the same covenants and agreements in this Lease
mutatis mutandis.
LIMITATION ON 26. Notwithstanding any other provision of this Lease, it
LANDLORD LIABILITY is expressly understood and agreed that the total
liability of the Landlord arising out of or in connection
with this Lease, the relationship of the Landlord and
the Tenant hereunder and/or the Tenant's use of the Leased
Premises, shall be limited to the estate of the Landlord in
the Property. No other property or asset of the Landlord or
any partner or owner of the Landlord shall be subject to
levy, execution, or other enforcement proceedings or other
judicial process for the satisfaction of any judgment or any
other right or remedy of the Tenant arising out of or in
connection with this Lease, the relationship of the Landlord
and the Tenant hereunder and/or the Tenant's use of the
Leased Premises.
WAIVER OF JURY 27. The Tenant hereby waives trial by jury in any claim,
TRIAL action, proceeding or counterclaim brought by either
party against the other on any matters arising out of or in
any way connected with this Lease, the relationship of the
Landlord and the Tenant, or the Tenant's use and occupancy
of the Leased Premises.
CHOICE OF LAW 28. This Lease shall be governed by the laws of the State in
which the Leased Premises are located. Any litigation
between the Landlord and the Tenant concerning this Lease
shall be initiated in the county in which the Premises are
located.
SCHEDULES 29. The provisions of the following Schedules attached
hereto shall form part of this Lease as if the same were
embodied herein:
Schedule "A" - Legal Description
of Property
Schedule "B" - Measurement of
Rentable Area
Schedule "B-1" - Location of Leased
Premises
Schedule "C" - Taxes Payable by
Landlord and
Tenant
Schedule "D" - Services and Costs
Schedule "E" - Rules and
Regulations
Schedule "F" - Leasehold
Improvements
15
<PAGE>
IN WITNESS WHEREOF the parties hereto have executed
this Agreement. I/We have authority to bind the corporation.
<TABLE>
<CAPTION>
<S> <C> <C>
Landlord:
WATER TOWER CAMPBELL, LLC
-------------------------
A California limited liability company,
--------------------------------------
Checked /s/ Paula D. Francis
-------------- -------------------------------------------------- by Signature /s/ Jim Mair
Verified Witness as to signing by Landlord Title: Member
--------------
Tenant: Nx Networks, a Delaware corporation
Witness/Attest
/s/ Peter Kendrick By Signature /s/ Jay R. Schifferli
--------------------------------------------------
Witness as to signing by Title: General Counsel
Tenant or officer(s) of Tenant Name: Jay R. Schifferli
</TABLE>
16
<PAGE>
PROPERTY NAME: 307 Orchard City Drive
Campbell, California 95008
INITIAL
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Landlord | Tenant
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