EXHIBIT 10.119


STANDARD INDUSTRIAL LEASE


BY AND BETWEEN


C & J DEVELOPMENT CO.,


AS LANDLORD


AND


SOUTHWALL TECHNOLOGIES, INC.


AS TENANT


 


 

















 


TABLE
OF CONTENTS


 


	
  ITEM

  
	
   

  
	
  1.

  	
  USE

  
	
  2.

  	
  TERM

  
	
  3.

  	
  POSSESSION

  
	
  4.

  	
  MONTHLY
  RENT

  
	
  5.

  	
  ADJUSTMENT OF BASIC RENT

  
	
  6.

  	
  RESTRICTION ON USE

  
	
  7.

  	
  COMPLIANCE WITH LAWS

  
	
  8.

  	
  ALTERATIONS

  
	
  9.

  	
  REPAIR AND MAINTENANCE

  
	
  10.

  	
  LIENS

  
	
  11.

  	
  INSURANCE

  
	
  12.

  	
  UTILITIES AND SERVICE

  
	
  13.

  	
  TAXES AND OTHER CHARGES

  
	
  14.

  	
  ENTRY
  BY LANDLORD

  
	
  15.

  	
  COMMON AREA; PARKING

  
	
  16.

  	
  COMMON AREA CHARGES

  
	
  17.

  	
  DAMAGE BY FIRE; CASUALTY

  
	
  18.

  	
  INDEMNIFICATION

  
	
  19.

  	
  ASSIGNMENT AND SUBLETTING

  
	
  20.

  	
  DEFAULT

  
	
  21.

  	
  LANDLORD’S RIGHT TO CURE TENANT’S DEFAULT

  
	
  22.

  	
  EMINENT
  DOMAIN

  
	
  23.

  	
  NOTICE AND COVENANT TO SURRENDER

  
	
  24.

  	
  TENANT’S QUITCLAIM

  
	
  25.

  	
  HOLDING
  OVER

  
	
  26.

  	
  SUBORDINATION

  
	
  27.

  	
  CERTIFICATE OF ESTOPPEL

  
	
  28.

  	
  SALE
  BY LANDLORD

  
	
  29.

  	
  ATTORNMENT TO LENDER OR THIRD PARTY

  
	
  30.

  	
  DEFAULT BY LANDLORD

  
	
  31.

  	
  CONSTRUCTION CHANGES

  
	
  32.

  	
  MEASUREMENT OF PREMISES

  
	
  33.

  	
  ATTORNEY
  FEES

  
	
  34.

  	
  SURRENDER

  
	
  35.

  	
  WAIVER

  
	
  36.

  	
  EASEMENTS; AIRSPACE RIGHTS

  
	
  37.

  	
  RULES AND REGULATIONS

  
	
  38.

  	
  NOTICES

  
	
  39.

  	
  NAME

  
	
  40.

  	
  GOVERNING LAW; SEVERABILITY

  
	
  41.

  	
  DEFINITIONS

  
	
  42.

  	
  TIME

  
	
  43.

  	
  EXAMINATION OF LEASE

  
	
  44.

  	
  INTEREST ON PAST DUE OBLIGATIONS; LATE
  CHARGE

  
	
  45.

  	
  ENTIRE
  AGREEMENT

  
	
  46.

  	
  CORPORATE AUTHORITY

  
	
  47.

  	
  RECORDING

  
	
  48.

  	
  REAL ESTATE BROKERS

  
	
  49.

  	
  EXHIBITS AND ATTACHMENTS

  
	
  50.

  	
  ENVIRONMENTAL MATTERS

  
	
  51.

  	
  SIGNAGE

  
	
  52.

  	
  SUBMISSION OF LEASE

  
	
  53.

  	
  ADDITIONAL
  RENT

  
	
  54.

  	
  PREMISES TAKEN “AS IS”

  
	
  55.

  	
  CAPITAL EXPENDITURES

  



 


 


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LEASE


 


        THIS
LEASE is made this ____ day of October, 1999, by and between C&J
Development Co., a California limited partnership, (“Landlord”) and Southwall
Technologies, Inc. (formerly The Southwall Corporation), a Delaware corporation
(“Tenant”).


 


W I T N E S S E T H:


 


        Landlord
leases to Tenant and Tenant leases from Landlord those certain premises
outlined in red on Exhibit A (the “Premises”) commonly known as 1029
Corporation Way, Palo Alto, California, which Landlord and Tenant hereby agree
consists of approximately nineteen thousand seven hundred and eighty-two
(19,782) square feet in 1029 Corporation Way, Palo Alto, California (the
“Project”). As used herein the term Project shall mean and include all of the
land described in Exhibit B and all the buildings, improvements, fixtures and
equipment new or hereafter situated on said land.


 


        Tenant
covenants, as a material part of the consideration of this lease, to perform
and observe each and all of the terms, covenants and conditions set forth
below, and this lease is made upon the condition of such performance and
observance.


 


        1.     USE


 


                Subject to the restrictions contained in
paragraph 6 hereof, Tenant shall use the Premises for marketing, sales, research
and development, general office and administrative uses and shall not use or
permit the Premises to be used for any other purpose.


 


        2.     TERM


 


                (a) The term shall be for three (3) years
(unless sooner terminated or hereinafter provided) and, subject to paragraph 3,
shall commence on January 1, 2000 and end on December 31, 2002.


 


        3.     POSSESSION


 


                (a) If Landlord for any reason cannot deliver
possession of the Premises to Tenant by the date of commencement set forth in
paragraph 2, this lease shall not be void or voidable, Landlord shall not be
liable to Tenant for any loss or damage on account thereof and Tenant shall not
be liable for rent until Landlord delivers possession of the Premises. If the
term commences on a date other than the date specified in paragraph 2 above,
then the parties shall immediately execute an amendment to this lease stating
the actual date of commencement and the revised expiration date. The expiration
date of the term shall be extended by the same number of days that Tenant’s possession
of the Premises was delayed from that set forth in paragraph 2.


 


                (b) Tenant’s inability or failure to take
possession of the Premises when delivery is tendered by Landlord shall not
delay the commencement of the term of this lease or Tenant’s obligation to pay
rent. Tenant acknowledges that Landlord shall incur significant expenses upon
the execution of this lease, even if Tenant never takes possession of the
Premises, including without limitation brokerage commissions and fees and legal
and other professional fees. Tenant acknowledges that all of said expenses
shall be included in measuring Landlord’s damages should Tenant breach the
terms of this lease.


 


        4.     MONTHLY RENT


 


                (a) Basic Rent. Tenant shall pay to
Landlord as basic rent for the Premises, in advance and subject to adjustment
as provided in paragraph b, the sum of Fifty Thousand and Four Hundred and
Forty-Five and 10/100 Dollars ($50,444.10) on or before the first day of the
first full calendar month of the term and on or before the first day of each
and every successive calendar month. Basic rent for any partial month shall be
payable in advance and shall be prorated at the rate of 1/30th of the monthly
basic rent per day.


 


                (b) Common Area Charges. In addition
to the above basic rent, and as additional rent, Tenant shall pay to Landlord,
subject to adjustments and reconciliation as provided in paragraph 16 of this
lease, the sum of Three Thousand Seven Hundred and Five and 00/100 Dollars
($3,705.00) on or before the first day of the first full calendar month of the
term and on the first day of each and every succeeding calendar month, said sum
representing Tenant’s estimated payment of its percentage share of common area
charges as provided for in paragraph 16 of this lease. Payment of common area
charges for any partial month shall be payable in advance and shall be prorated
at the rate of 1/30th of the monthly payment of common area charges per day.


 


                (c) Manner and Place of Payment. All
payments of basic rent and common area charges shall be paid to Landlord,
without deduction or offset, in lawful money of the United States of 


 


 


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America, at the office of Landlord at 360 S.
San Antonio Road, Suite 14, Los Altos, California, 94022 or to such other
person or place as Landlord may from time to time designate in writing.


 


                (d) Last Month’s Rent. Concurrently with Tenant’s execution of
this lease, Tenant shall deposit with Landlord, the sum of Twenty-Two Thousand
Seven Hundred and Forty-Nine and 30/100 Dollars ($22,749.30), to be applied
against the basic rent and common area charges for the last lease month of the
term.


 


                (e) Security Deposit. Concurrently with Tenant’s execution of
this lease, Tenant shall deposit with Landlord the sum of Twenty-Two Thousand
Seven Hundred and Forty-Nine and 30/100 Dollars ($22,749.30), which sum shall
be held by Landlord as a security deposit for the faithful performance by
Tenant of all of the terms, covenants and conditions of this lease to be kept and
performed by Tenant. If Tenant defaults with respect to any provision of this
lease, including but not limited to, the provisions relating to the payment of
basic rent and common area charges, Landlord may (but shall not required to)
use, apply, or retain all or any part of this security deposit for the payment
of any amount which Landlord may spend by reason of Tenant’s default or to
compensate Landlord for any other loss or damage which Landlord may suffer by
reason of default. If any portion of said deposit is so used, Tenant shall,
within ten (10) days after written demand therefor, deposit cash with Landlord
in the amount sufficient to restore the security deposit to its original
amount; Tenant’s failure to do so shall be a material breach of this lease.
Landlord shall not be required to keep this security deposit separate from its
general funds and Tenant shall not be entitled to interest on such deposit. If
Tenant is not in default at the expiration or termination of this lease, the
security deposit or any balance thereof shall be returned to Tenant after
Tenant has vacated the Premises. In the event of termination of Landlord’s
interest in this lease, Landlord shall transfer said deposit to Landlord’s
successor in interest, and Tenant agrees that Landlord shall thereupon be
released from liability for the return of such deposit or any accounting
therefor.


 


        5.     ADJUSTMENT OF BASIC RENT


 


                The basic rent provided for in paragraph 4(a) shall be adjusted
periodically and the monthly basic rent for each period shall be as set forth
below:


 


	
  Lease Months  1-12

  	
   

  	
  (1/1/00-12/31/00)

  	
   

  	
  $

  	
  50,444.10 per month

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lease Months  1-12

  	
   

  	
  (1/1/01-12/31/01)

  	
   

  	
  $

  	
  51,957.42 per month

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lease Months  1-12

  	
   

  	
  (1/1/02-12/31/02)

  	
   

  	
  $

  	
  53,516.15 per month

  



 


                6.     RESTRICTION ON USE


 


                Tenant shall not do or permit to be done in or about the Premises or
the Project, nor bring or keep or permit to be brought or kept in or about the
Premises or Project, anything which is prohibited by or will in any way
increase the existing rate of, otherwise affect, fire or any other insurance
covering the Project or any part thereof, or any of its contents, or will cause
a cancellation of any insurance covering the Project or any part thereof, or
any of its contents. Tenant shall not do or permit to be done anything in or
about the Premises or the Project which will constitute waste or which will in
any way obstruct or interfere with the rights of other tenants, business
invitees or occupants of the Project or injure or annoy them, or use or allow the
Premises to be used  for any unlawful
purpose, nor shall Tenant cause, maintain or permit any nuisance in or about
the Premises or the Project. No loudspeaker or other device, system or
apparatus which can be heard outside the Premises shall be used in or at the
Premises without the prior written consent of Landlord. Tenant shall not use
the Premises for the preparation, or mixing of anything that might emit any
objectionable odor, noise or light into the adjoining premises or Common Area.
Tenant shall not do anything on the Premises that will cause damage to the
Project and Tenant shall not overload the floor capacity of the Premises or the
Project. No machinery, apparatus or other appliance shall be used or operated
in or on the Premises that will in any manner injure, vibrate or shake the
Premises. Landlord shall be the sole judge, of whether such odor, noise, light
or vibration is such as to violate the provisions of this paragraph. No waste
materials or refuse shall be dumped upon or permitted to remain upon any part
of the Premises or the Project except in trash containers placed inside
exterior enclosures designated for that purpose by Landlord, or where otherwise
designated by Landlord; and no toxic or hazardous materials shall be disposed
of through the plumbing or sewage system. No materials, supplies, equipment,
finished products or semi finished products, raw materials or articles of any
nature shall be stored or permitted to remain outside of the building proper.
No retail sales shall be made on the Premises


 


        7.     COMPLIANCE WITH LAWS


 


                Tenant shall, in connection with its use and occupation of the
Premises, at its sole cost and expense, promptly observe and comply with (i)
all laws, statutes, ordinances and governmental rules, regulations and requirements
now or hereafter in effect, (ii) with the requirements of any board of fire
underwriters or other similar body now or hereafter constituted and (iii) with
any direction or occupancy certificate issued pursuant to law by any public
authority; provided, however, that no such failure shall be deemed a breach of
these provisions if Tenant, immediately upon notification, 


 


 


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commences to remedy or rectify said failure.
The judgment of any court of competent jurisdiction or the admission of Tenant
in any action against Tenant (whether or not Landlord is a party thereto) that
Tenant has violated any such law, statute, ordinance or governmental rule,
regulation, requirement, direction or provision, shall be conclusive of that
fact as between Landlord and Tenant. This lease shall remain in full force and
effect notwithstanding any loss of use or other effect on Tenant’s enjoyment of
the Premises by reason of any governmental laws, statutes, ordinances, rules,
regulations and requirements now or hereafter in effect.


 


                Landlord represents that the project was constructed in accordance with
applicable laws, statutes, ordinances and/or governmental rules, regulations or
requirements in effect as of the date of construction of the Project, and that
the improvements to be constructed in accordance with Exhibit C of the original
lease between Landlord and Tenant dated October 21, 1983 were constructed in
accordance with applicable laws, statutes, ordinances and/or governmental
rules, regulations or requirements in effect as of the date of construction of
such improvements.


 


                Landlord and Tenant hereby acknowledge that the Americans with
Disabilities Act and Title 24 of the Code of California Regulations may affect
Tenant’s use and occupancy of the Premises and require Tenant to modify or
alter the design, layout or other physical elements of the interior of the
Premises or provide auxiliary aids and services in connection with its business
operations. Tenant shall, at Tenant’s sole cost and expense, comply in all
respects with the requirements of the Americans with Disabilities Act and Title
24 of the Code of California Regulations as it affects Tenant’s use and
occupancy of the Premises throughout the term of the lease, as may be extended,
and Tenant acknowledges and agrees that, notwithstanding any modifications to
the Common Area which may be made by Landlord in order to conform such areas
with the requirements of the Americans with Disabilities Act and Title 24 of the
Code of California Regulations, Landlord makes no representations or warranties
regarding the compliance of the Premises or the Project with the Americans with
Disabilities Act and Title 24 of the Code of California Regulations, nor shall
Landlord have any obligations or liabilities to Tenant to construct any
modifications or alterations to the interior of the Premises in order to comply
with the Americans with Disabilities Act and Title 24 of the Code of California
Regulations.


 


        8.     ALTERATIONS


 


                Tenant shall not make or suffer to be made any alteration, addition or
improvement to or of the Premises or any part thereof (collectively referred to
herein as “alterations”) without (i) the prior written consent of Landlord
(which consent shall not be unreasonably withheld and Landlord further agrees
that Landlord shall not raise the basic rent as of condition of such consent),
(ii) a valid building permit issued by the appropriate governmental authority
and (iii) otherwise complying with all applicable laws, regulations and
requirements of governmental agencies having jurisdiction and with the rules,
regulations and requirements of any board of fire underwriters or similar body.
Any alteration made by Tenant (excluding moveable furniture and trade fixtures not
attached to the Premises) shall at once become a part of the Premises and
belong to Landlord. Without limiting the foregoing, all heating, lighting,
electrical (including all wiring, conduit, outlets, drops, buss ducts, main and
subpanels), air conditioning, partitioning, drapery and carpet installations
made by Tenant, regardless of how attached to the Premises, together with all
other alterations that have become an integral part of the Project in which the
Premises are a part, shall be and become part of the Premises and belong to
Landlord upon installation and shall not be deemed trade fixtures, and shall
remain upon and be surrendered with the Premises at the termination of the
lease.


 


                If Landlord consents to the making of any alteration by Tenant, the
same shall be made by Tenant at its sole risk, cost and expense and only after
Landlord’s written approval of any contractor or person selected by Tenant for
that purpose (provided that Landlord waives the right to approve such
contractor or person if the same is a duly licensed contractor and a valid
building permit is issued by the appropriate governmental authority), and the
same shall be made at such time and in such manner as Landlord may from time to
time designate. Tenant shall, if required by Landlord, secure at Tenant’s cost
a completion and lien indemnity bond for such work. Upon the expiration or
sooner termination of the term, Landlord may, at is sole option, require
Tenant, at Tenant’s sole cost and expense, to promptly both remove any such alteration
made by Tenant and designated by Landlord to be removed and repair any damage
to the Premises caused by such removal. Any moveable furniture and equipment or
trade fixtures remaining on the Premises at the expiration or other termination
of the term shall become the property of the Landlord unless promptly removed
by Tenant.


 


                If during the term, and subject to paragraph 7 above, any alteration,
addition or change of the Premises or the Project is required by law,
regulation, ordinance or order of any public or quasi-public authority, Tenant,
at its sole cost and expense, shall promptly make the same. If during the term
any alterations, additions or changes to the Common Area or to the Project in
which the Premises is located is required by law, regulation, ordinance or
order of any public or quasi-public authority, and it is impractical in the
Landlord’s judgment for the affected tenants to individually make such
alterations, additions or changes, Landlord shall make such alterations,
additions or changes and the cost thereof shall be a common area charge and
Tenant shall pay its percentage share of such cost to Landlord as provided in
paragraph 16.


 


 


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        9.     REPAIR AND MAINTENANCE


 


                By entry hereunder, Tenant accepts the Premises as being in good and
sanitary order, condition and repair (excepting only “punchlist items”). Except
as expressly provided below, Tenant shall at its sole cost keep and maintain
the entire Premises and every part thereof including, without limitation, the
windows, window frames, plate glass, glazing, elevators within the Premises,
truck doors, doors and all door hardware, the interior walls and partitions,
lighting and the electrical, mechanical, and plumbing systems. Tenant shall
also repair and maintain the heating and air conditioning systems (unless
Landlord has elected to keep and maintain the heating and air conditioning
systems as provided below) which shall include, without limitation, a periodic
maintenance agreement with a reputable and licensed heating and air
conditioning service company. If Tenant’s use of the heating and air
conditioning systems is limited to normal business hours (8:00 a.m. to 6:00
p.m.), such agreement shall provide for service at least as often as every 60
days, if Tenant’s use of the heating and air conditioning systems extends
beyond such normal business hours this service shall be as often as may be
required by landlord and in any event such service shall meet all warranty
enforcement requirements of such equipment and comply with all manufacturer
recommended maintenance. Landlord may elect, at its option, to keep and
maintain the heating and air conditioning systems of the premises and in such
event, Tenant shall pay to Landlord upon demand the full cost of such
maintenance.


 


                Subject to the provisions of paragraph 17, Landlord shall keep and
reasonably maintain the roof, structural elements, and exterior walls of the
buildings constituting the Project and Common Area in reasonably good order and
repair. Tenant waives all rights under and benefits of California Civil Code
Sections 1932(1), 1941, and 1942 and under any similar law, statute or
ordinance now or hereafter in effect. The cost of the repairs and maintenance
which are the obligation of Landlord hereunder, including without limitation,
maintenance contracts and supplies, materials, equipment and tools used in such
repairs and maintenance shall be obtained at competitive prices for major
repairs and shall be a common area charge and Tenant shall pay its percentage
of such costs to Landlord as provided in paragraph 16; provided, however, that
if any repairs or maintenance is required because of an act or omission of
Tenant, or its agents, employees or invitees, Tenant shall pay to Landlord upon
demand the full cost of such repairs or maintenance.


 


                As used herein, “punchlist items” shall mean minor repairs to painting,
carpets, walls and other interior improvements to the Premises as reasonably
determined by Tenant and disclosed to Landlord within thirty (30) days of the
date Tenant takes possession of the Premises. Landlord shall repair all
punchlist items subject to the terms of paragraph 16, below. Landlord shall
have no obligation to repair items that are not disclosed to Landlord by Tenant
in writing within thirty (30) days of the date possession of the Premises is
delivered to Tenant.


 


        10.  LIENS


 


                Tenant shall keep the Premises and the Project free from any liens
arising out of any work performed, materials furnished or obligations incurred
by Tenant, its agents, employees or contractors. Upon Tenant’s receipt of a
preliminary twenty (20) day notice filed by a claimant pursuant to California
Civil Code Section 3097, Tenant shall immediately provide Landlord with a copy
of such notice. Should any such lien be filed against the Project, Tenant shall
give immediate notice of such lien to Landlord. In the event that Tenant shall
not, within ten (10) days following the imposition of such lien, cause the same
to be released of record, Landlord shall have, in addition to all other
remedies provided herein and by law, the right, but no obligation, to cause the
same to be released by such means as it shall deem proper, including payment of
the claim giving rise to such lien. All sums paid by Landlord for such purpose,
and all expenses (including attorneys’ fees) incurred by it in connection
therewith, shall be payable to Landlord by Tenant on demand with interest at
the rate of ten percent (10%) per annum or the maximum rate permitted by law, whichever
is less. Landlord shall have the right at all times to post and, keep posted on
the Premises any notices permitted or required by law, or which Landlord shall
deem proper for the protection of Landlord, the Premises and the Project and
any other party having an interest therein, from mechanics’ and material men’s
liens and like liens. Tenant shall give Landlord at least fifteen (15) days
prior notice of the date of the commencement of any construction on the
Premises in order to permit the posting of such notices. In the event Tenant is
required to post an improvement bond with a public agency in connection with
any work performed by Tenant on or to the Premises, Tenant shall include
Landlord as an additional obligee.


 


        11.  INSURANCE


 


                Tenant, at its sole cost and expense, shall keep in force during the
term (i) commercial general liability and property damage insurance with a
combined single limit of at least $5,000,000 per occurrence insuring against
personal or bodily injury to or death of persons occurring in, on or about the
Premises or Project and any and all liability of the insured with respect to,
the Premises or arising out of Tenant’s maintenance, use or occupancy of the
Premises and all areas appurtenant thereto, (ii) direct physical loss special
insurance covering the leasehold improvements in the Premises and all of
Tenant’s equipment, trade fixtures, appliances, furniture, furnishings, and
personal property from time to time located in, on or about the Premises, with
coverage in the amount of the full replacement cost thereof, (iii) Worker’s
Compensation Insurance as required by law, together with employer’s liability
coverage with a limit of not less than $1,000,000 for bodily injury for each
accident and for bodily injury by disease for each employee. Tenant’s
commercial general liability and property damage insurance 


 


 


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and Tenant’s Workers Compensation Insurance
shall be endorsed to provide that said insurance shall not be canceled or
reduced except upon at least thirty (30) days prior written notice to Landlord
and (iv) full replacement cost plate glass insurance. Further, Tenant’s
commercial general liability and property damage insurance shall be primary and
shall name Landlord and McCandless Simons Company, Inc., and their respective
partners, officers, directors and employees and such other persons or entities
as directed from time to time by Landlord as additional insured for all
liability using ISO Bureau Form CG20111185 (or a successor form); shall contain
a severability of interest clause and cross-liability endorsement; shall be
endorsed to provide that the limits and aggregates apply per location using ISO
Bureau Form CG25041185; and shall be issued by an insurance company admitted to
transact business in the State of California and rated A+VIII or better in
Best’s Insurance Reports (or successor report). The deductibles for all
insurance required to be maintained by Tenant hereunder shall be no more than
$5,000 per occurrence. The commercial general liability insurance carried by
Tenant shall specifically insure the performance by Tenant of the
indemnification provisions set forth in paragraph 18 of this lease provided,
however, nothing contained in this paragraph 11 shall be construed to limit the
liability of Tenant under the indemnification provisions set forth in said
paragraph 18. If Landlord or any of the additional insured named on any of
Tenant’s insurance have other insurance which is applicable to the covered loss
on a contributing, excess or contingent basis, the amount of the Tenant’s
insurance company’s liability under the policy of insurance maintained by
Tenant shall not be reduced by the existence of such other insurance. Any
insurance carried by Landlord or any of the additional insured named on
Tenant’s insurance policies shall be excess and non-contributing with the
insurance so provided by Tenant.


 


                Tenant shall, prior to the commencement of the term, provide Landlord
with a completed Certificate of Insurance using a form acceptable in Landlord’s
reasonable judgment, attaching thereto copies of all endorsements required to
be provided by Tenant under this lease. Tenant agrees to increase the coverage
or otherwise comply with changes in connection with said commercial general
liability, property damage, direct physical loss and Worker’s Compensation
Insurance as Landlord or Landlord’s lender may from time to time require.


 


                Landlord shall obtain and keep in force a policy or policies of
insurance covering loss or damage to the Premises and Project in the amount of
the full replacement value thereof, providing protection against those perils
included within the classification of 
“all risk” insurance, with increased cost of reconstruction and
contingent liability (including demolition), plus a policy of rental income
insurance in the amount of one hundred percent (100%) of twelve (12) months’
rent (including sums paid as additional rent) and such other insurance as
Landlord or Landlord’s lender may from time to time require. Landlord may, but
shall not be obligated to, also obtain flood and/or earthquake insurance.
Landlord shall have no liability to Tenant if Landlord elects not to obtain
flood and/or earthquake insurance. The cost of all such insurance purchased by
Landlord, plus any charges for deferred payment of premiums and the amount of
any deductible incurred upon any covered loss within the Project, shall be
common area charges and Tenant shall pay to Landlord its percentage share of
such costs as provided in paragraph 16.


 


                Landlord and Tenant hereby mutually waive any and all rights of
recovery against one another for real or personal property loss or damage
occurring to the Premises or the Project, or any part thereof, or to any
personal property therein, from perils insured against under fire and extended
insurance and any other property insurance policies existing for the benefit of
the respective parties so long as such insurance permits waiver of liability
and contains a waiver of subrogation without additional premiums.


 


                If Tenant does not take out and maintain insurance as required pursuant
to this paragraph 11, Landlord may, but shall not be obligated to, take out the
necessary insurance and pay the premium therefore, and Tenant shall repay to
Landlord promptly on demand, as additional rent, the amount so paid. In
addition, Landlord may recover from Tenant and Tenant agrees to pay, as
additional rent, any and all reasonable expenses (including attorney fees) and
damages which Landlord may sustain by reason of the failure of Tenant to obtain
and maintain such insurance, it being expressly declared that the expenses and
damages of Landlord shall not be limited to the amount of the premiums thereon.


 


        12.  UTILITIES AND
SERVICE


 


                Tenant shall pay for all water, gas, light, heat power, electricity,
telephone, trash pickup, sewer charges and all other services supplied to or
consumed on the Premises. In the event that any service is not separately
metered or billed to the Premises, the cost of such utility service or other
service shall be a common area charge and Tenant shall pay its percentage share
of such cost to Landlord as provided in paragraph 16. In addition, the cost of
all utilities and services furnished by Landlord to the Common Area shall be a
common area charge and Tenant shall pay its percentage share of such cost to
Landlord as provided in paragraph 16.


 


                If Tenant’s use of any such utility or service is materially in excess
of the average furnished to the other tenants of the Project, and such utility
or service is not separately metered, then Tenant shall pay to Landlord upon
demand, as additional rent, the full cost of such excess use, or Landlord may
cause such utility or service to be separately metered, in which case Tenant
shall pay the full cost of such utility or service and reimburse Landlord upon
demand for the cost of installing the separate meter.


 


 


7

















 


                Landlord shall not be liable for, and Tenant shall not be entitled to
any abatement or reduction of rent by reason of, the failure of any person or
entity to furnish any of the foregoing services when such failure is caused by
accident, breakage, repairs, strikes, lockouts or other labor disturbances or
labor disputes of any character, governmental moratoriums, regulations or other
governmental actions, or by any other cause, similar to dissimilar, beyond the
reasonable control of Landlord. In addition, Tenant shall not be relieved from
the performance of any covenant or agreement in this lease because of any such
failure, and no eviction of Tenant shall result from such failure.


 


        13.  TAXES AND OTHER
CHARGES


 


                All real estate taxes and assessments and other taxes, fees and charges
of every kind or nature, foreseen or unforeseen, which are levied, assessed or
imposed upon Landlord and/or against the Premises, building, Common Area or
Project, or any part thereof by any federal, state, county, regional, municipal
or other governmental or quasi-public authority, together with any increase
therein for any reason, shall be a common area charge and Tenant shall pay its
percentage share of such costs to Landlord as provided in paragraph 16. By way
of illustration and not limitation, “other taxes, fees and charges” as used
herein include any and all taxes payable by Landlord (other than state and
federal personal or corporate income taxes measured by the net income of
Landlord from all sources, and premium taxes), whether or not now customary or
within the contemplation of the parties hereto, (i) upon, allocable to, or
measured by the rent payable hereunder, including, without limitation, any
gross income or excise tax levied by the local, state or federal government
with respect to the receipt of such rent, (ii) upon or with respect to the possession,
leasing, operation, management, maintenance, alteration, repair, use or
occupancy by tenant of the Premises or any part thereof, (iii) upon or measured
by the value of Tenant’s personal property or leasehold improvements located in
the Premises, (iv) upon this transaction or any document to which Tenant is a
party creating or transferring an interest or estate in the Premises, (v) upon
or with respect to vehicles, parking or the number of persons employed in or
about the Project, and (vi) and tax, license, franchise fee or other imposition
upon Landlord which is otherwise measured by or based in whole or in part upon
the Project or any portion thereof. If Landlord contests any such tax, fee or
charge, the cost and expense incurred by Landlord thereby (including, but not
limited to, costs of attorneys and experts) shall also be common area charges
and Tenant shall pay its percentage share of such costs to Landlord as provided
in paragraph 16. In the event the Premises and any improvements installed therein
by Tenant or Landlord are valued by the assessor disproportionately higher than
those of other tenants on the building or Project or in the event alterations
or improvements are made to the Premises, Tenant’s percentage share of such
taxes, assessments, fees and/or charges shall be readjusted upward accordingly
and Tenant agrees to pay such readjusted share. Such determination shall be
made by Landlord from the respective valuations assigned in the assessor’s work
sheet or such other information as may be reasonably available and Landlord’s
determination thereof shall be conclusive.


 


                Tenant agrees to pay, before delinquency, any and all taxes levied or
assessed during the term hereof upon Tenant’s equipment, furniture, fixtures
and other personal property located in the Premises, including carpeting and
other property installed by Tenant notwithstanding that such carpeting or other
property has become a part of the Premises. If any of Tenant’s personal
property shall be assessed with the Project, Tenant shall pay to Landlord, as
additional rent, the amount attributable to Tenant’s personal property within
ten (10) days after receipt of a written statement from Landlord setting forth
the amount of such taxes, assessments and public charges attributable to
Tennant’s personal property.


 


        14.  ENTRY BY LANDLORD


 


                Landlord reserves, and shall at all reasonable times have, the right to
enter the Premise (i) to inspect the Premises, (ii) to supply services to be
provided by Landlord hereunder, (iii) to show the Premises to prospective
purchasers, lenders or tenants and to put ‘for sale’ or ‘for lease’ signs
thereon, (iv) to post notices required or allowed by this lease or by law, (v)
to alter, improve or repair the Premises and any portion of the Project, and (vi)
to erect scaffolding and other necessary structures in or through the Premises
or the Project where reasonably required by the character of the work to be
performed. Landlord shall not be liable in any manner for any inconvenience,
disturbance, loss of business, nuisance or other damage arising from Landlord’s
entry and acts pursuant to this paragraph and Tenant shall not be entitled to
an abatement or reduction of rent if Landlord exercises any rights presented in
this paragraph. For each of the foregoing purposes, Landlord shall at all times
have and retain a key with which to unlock all of the doors in, on and about
the Premises (excluding Tenant’s vaults, safes and similar areas designated in
writing by Tenant in advance), and Landlord shall have the right to use any and
all means which Landlord may deem proper to open said doors in an emergency in
order to obtain entry to the Premises. Any entry by Landlord to the Premises
pursuant to this paragraph shall not under any circumstances by construed or deemed
to be a forcible or unlawful entry into or a detainer of the Premises or an
eviction, actual or constructive, of Tenant from the premises or any portion
thereof. Notwithstanding the foregoing, and except in the case of emergency,
Landlord shall give Tenant at least twenty-four (24) hours prior notice of its
intent to enter the Premises.


 


 


8

















 


        15.  COMMON AREA PARKING


 


                Subject to the terms and conditions of this lease and such rules and
regulations as Landlord may from time to time prescribe and so long as such
rules and regulations do not conflict with the terms and conditions of this
lease, Tenant and Tenant’s employees and invitees shall, in common with other
occupants of the Project, and their respective employees and invitees shall, in
common with other occupants of the Project, and their respective employees and
invitees and others entitled to the use thereof, have the non-exclusive right
to use the access roads, parking areas and facilities within the Project
provided and designated by Landlord for the general use and convenience of the
occupants of the Project which areas and facilities shall include, but not be
limited to, sidewalks, parking, refuse, landscape and plaza areas, roofs and
building exteriors, which areas and facilities are referred to herein as
“Common area”. This right shall terminate upon the termination of this lease.


 


                Landlord reserves the right from time to time to make changes in the
shape, size, location, amount and extent of the Common Area. Landlord shall
also have the right at any time to change the name, number or designation by
which the Project is commonly known. Landlord further reserves the right to
promulgate such rules and regulations relating to the use of the Common Area,
and any part thereof, as Landlord may deem appropriate for the best interests
of the occupants of the Project. The rules and regulations shall be binding
upon Tenant upon delivery of a copy of them to Tenant and Tenant shall abide by
them and cooperate in their observance. Such rules and regulations may be
amended by Landlord from time to time, with or without advance notice.


 


                Tenant shall have the non-exclusive use of seventy five (75) parking
spaces in the Common Area as designated from time to time by Landlord. Landlord
reserves the right at its sole option to assign and label parking spaces, but
it is specifically agreed that Landlord is not responsible for policing any
such parking spaces. Tenant shall not at any time park or permit the parking of
Tenant’s trucks or other vehicles, or the trucks or other vehicles of others;
adjacent to loading areas so as to interfere in any way with the use of such
areas; nor shall Tenant at any time park or permit the parking of Tenant’s
vehicles or trucks, or other vehicles or trucks of Tenant’s suppliers or
others, in any portion of the Common Area not designated by Landlord for such
use by Tenant. Tenant shall not park or permit any inoperative vehicle or
equipment to be parked on any portion of the Common Area. Tenant shall not
permit, allow or place any type of circulars or advertisements on vehicles
parking in the Common Area. Tenant shall not use any Common Area, including the
space directly adjacent to the Premises for sales or displays.


 


                Landlord shall operate, manage and maintain the Common Area. The manner
in which the Common Area shall be operated, managed and maintained and the
expenditures for such operation, management and maintenance shall be at the
sole discretion of Landlord. The cost of such maintenance, operation and
management of the Common Area, including, but not limited to landscaping,
repair of paving, parking lots and sidewalks, repaving, resurfacing, repairs,
replacements, painting, lighting, cleaning, trash removal, roof replacement and
repair, heating, ventilating and air-conditioning repair and replacement, fire
protection and similar items; non-refundable contributions toward one or more
reserves for replacements other than equipment; rental on equipment; security
and exterminator services and salaries and employee benefits (including union
benefits) of on-site and accounting personnel engaged in such maintenance and
operations management, shall be a common area change and Tenant shall pay to
Landlord its percentage share of such costs as provided in paragraph 16.


 


        16.  COMMON AREA CHARGES


 


                Tenant shall pay to Landlord, as additional rent, an amount equal to
One Hundred percent (100.00%) of the total common area charges as defined
below. Tenant’s percentage share of common area charges shall be paid as
follows.


 


                Tenant’s estimated monthly payment of common area charges payable by
Tenant during the calendar year in which the term commences is set forth in
paragraph 4(b) of this lease. Prior to the commencement of each succeeding calendar
year of the term (or as soon as practicable thereafter, Landlord shall deliver
to Tenant a written estimate of Tenant’s monthly payment of common area
charges. Tenant shall pay, as additional rent, on the first day of each month
during the term in accordance with paragraph 4(b) of the lease, its monthly
share of common area charges as estimated by Landlord. Within one hundred
twenty (120) days of the end of each calendar year and of the termination of
this lease (or as soon as practicable thereafter), Landlord shall deliver to
Tenant a statement of actual common area charges incurred for the preceding
year. If such statement shows that Tenant has paid for less than its actual
percentage, then Tenant shall on demand pay to Landlord the amount of such deficiency.
If Tenant fails to pay such deficiency due within ten (10) days after demand,
Tenant shall pay an additional ten percent (10%) of the amount due as a
penalty. If such statement shows that Tenant has paid more than its actual
percentage share then Landlord shall, at its option, promptly refund such
excess to Tenant or credit the amount thereof to the common area charge next
becoming due from Tenant. Landlord reserves the right to revise any estimate of
common area charges if actual or projected common area charges show an increase
or decrease in excess of 10% from any earlier estimate for the same period. In
such event, Landlord shall deliver the revised estimate to Tenant, together
with an explanation of the reasons therefore, and Tenant shall revise its
payments accordingly. Landlord’s and Tenant’s obligation with respect to
adjustments at the end of the term or earlier expiration of this lease shall
survive such termination or expiration.


 


 


9

















 


                “Common area charges,” as used in this lease, shall include, but not be
limited to, (i) all items identified in paragraphs 8, 9, 11, 12, 13 and 16 as
being common area charges; (ii) amortization of such capital improvements
having a useful life greater than one year as Landlord may have installed for
the purpose of reducing operating costs and/or to comply with governmental
rules and regulations promulgated after completion of the building (Tenant’s
share of any such capital improvement shall equal Tenant’s proportionate share
of the fraction of the cost of such capital improvement equal to the remaining
term of the lease over the useful life of such capital improvement); (iii)
salaries and employee benefits (including union benefits) of personnel engaged
in the operation and maintenance of the Project (or the building in which the
Premises are located) and payroll taxes applicable thereto; (iv) supplies,
materials, equipment and tools used or required in connection with the
operation and maintenance of the Project; (v) licenses, permits and inspection
fees; (vi) a reasonable reserve for repairs and replacement of equipment used
in the maintenance and operation of the Project; (vii) all other operating
costs incurred by Landlord in maintaining and operating the Project; and (viii)
an amount equal to five percent (5%) of the actual expenditures for the
aggregate of all other common area charges as compensation for Landlord’s
accounting and processing services.


 


        17.  DAMAGE BY FIRE; CASUALTY


 


                In the event the Premises are damaged by any casualty which is fully
covered under an insurance policy required to be maintained by Landlord
pursuant to paragraph 11, Landlord shall be entitled to the use of all
insurance proceeds and shall repair such damage as soon as reasonably possible
and this lease shall continue in full force and effect.


 


                In the event the Premises are damaged by any casualty not fully covered
under an insurance policy required to be maintained pursuant to paragraph 11,
Landlord may, at Landlord’s option, either (i) repair such damage, at
Landlord’s expense, as soon as reasonably possible, in which event this lease
shall continue in full force and effect, or (ii) give written notice to Tenant
within thirty (30) days after the date of the occurrence of such damages of
Landlord’s intention to cancel and terminate this lease as of the date of the
occurrence of the damages; provided, however, that if such damage is caused by
an act or omission of Tenant or its agent, servants or employees, then Tenant
shall repair such damage promptly at its sole cost and expense. In the event
Landlord elects to terminate this lease pursuant hereto, Tenant shall have the
right within ten (10) days after receipt of the required notice to notify
Landlord in writing of Tenant’s intention to repair such damage at Tenant’s
expense, without reimbursement from Landlord, in which event this lease shall
continue in full force and effect and Tenant shall proceed to make such repairs
as soon as reasonably possible. If Tenant does not give such notice within the
ten (10) day period, this lease shall be canceled and terminated as of the date
of the occurrence of such damage. Under no circumstances shall Landlord be
required to repair any injury or damage to (by fire or other cause), or to make
any restoration or replacement of, any of Tenant’s personal property, trade
fixtures or property leased from third parties, whether or not the same is
attached to the Premises.


 


                If the Premises are totally destroyed during the term from any cause (including
any destruction required by any authorized public authority), whether or not
covered by the insurance required under paragraph 11, this lease shall
automatically terminate as of the date of such total destruction; provided,
however, that if the Premises can reasonably and lawfully be repaired or
restored within twelve (12) months of the date of destruction to substantially
the condition existing prior to such destruction and if the proceeds of the
insurance payable to the Landlord by reason of such destruction are sufficient
to pay the cost of such repair or restoration, then the insurance proceeds
shall be so applied, Landlord shall promptly repair and restore the Premises
and this lease shall continue, without interruption, in full force and effect.
If the Premises are totally destroyed during the last twelve (12) months of the
term, either Landlord or Tenant may at either parties’ option cancel and
terminate this lease as of the date of occurrence of such damage by giving
written notice to the other of its’ election to do so within thirty (30) days
after the occurrence of such damage.


 


                If the Premises are partially or totally destroyed or damaged and
Landlord or Tenant repair them pursuant to this lease, the rent payable
hereunder for the period during which such damage and repair continues shall be
abated only in proportion to the square footage of the Premises rendered
untenantable to Tenant by such damage or destruction. Tenant shall have no
claim against Landlord for any damage, loss or expense suffered by reason of
any such damage, destruction, repair or restoration or Landlord’s election
under this paragraph 17 not to repair or restore such damage or destruction.
The parties waive the provisions of California Civil Code sections 1932(2) and
1933(4) (which provisions permit the termination of a lease upon destruction of
the leased premises), and hereby agree that the provisions of this paragraph 17
shall govern in the event of such destruction.


 


        18.  INDEMNIFICATION


 


                Landlord shall not be liable to Tenant and Tenant hereby waives all
claims against Landlord for any injury to or death of any person or damage to
or destruction of property in or about the Premises or the Project (including
but not limited to damage to person or property caused by water leakage of any
character from the roof, walls, ceiling, basement or other portions of the
Project or caused by gas, fire, oil, fumes, electricity, steam or land or
structural movement) by or from any cause whatsoever except the material
failure of Landlord to perform its obligations under this lease where such
failure has persisted for an unreasonable period of time after written notice
of such failure. 


 


 


10

















 


Without limiting the foregoing, Landlord shall
not be liable to Tenant for any injury to or death of any person or damages to
or destruction of property by reason of, or arising from, any latent defect in
the Premises or Project or the act or negligence of any other tenant of the
Project. Tenant shall immediately notify Landlord of any defect in the Premises
or Project.


 


                Except as to injury to persons or damage to property the principal
cause of which is the material failure by Landlord to observe any of the terms
and conditions of this lease where such failure has persisted for an
unreasonable period of time after written notice of such failure, Tenant shall
hold Landlord harmless from and defend Landlord against any claim, liability,
loss, damage or expense (including attorney fees) arising out of any injury to
or death of any person or damage to or destruction of property occurring in, on
or about the Premises from any cause whatsoever or on account of the use,
condition, occupational safety or occupancy of the Premises. Tenant shall
further hold Landlord harmless from and defend Landlord against any claim,
liability, loss, damage or expense (including reasonable attorney fees) arising
(i) from Tenant’s use of the Premises or from the conduct of its business or
from any activity or work done, permitted or suffered by Tenant or its agents
or employees in or about the Premises or Project, (ii) out of the failure of
Tenant to observe or comply with Tenant’s obligation to observe and comply with
laws or other requirements as set forth in paragraph 7, (iii) by reason of
Tenant’s use, handling, storage, or disposal of toxic or hazardous materials or
waste, (iv) by reason of any labor or service performed for, or materials used
by or furnished to, Tenant or any contractor engaged by Tenant with respect to
the Premises, or (v) from any other act, neglect, fault or omission of Tenant
or its agents, employees or invitees. The provisions of this paragraph 18 shall
survive the expiration or earlier termination of this lease.


 


        19.  ASSIGNMENT AND SUBLETTING


 


                Tenant shall not voluntarily assign, encumber or otherwise transfer its
interest in this lease or in the Premises, or sublease all of any part of the
Premises, or allow any other person, concessionaire or entity to occupy or use
all or any part of the Premises, without first obtaining Landlord’s written
consent (which consent shall not be unreasonably withheld) and otherwise
complying with the requirements of this paragraph 19. Any assignment,
encumbrance or sublease without Landlord’s consent, shall constitute a default.


 


                If Tenant desires to sublet or assign all or any portion of the
Premises, Tenant shall give Landlord written notice thereof, specifying the
projected commencement date of the proposed sublet or assignment (which date
shall be not less than thirty (30) days or more than ninety (90) days after the
date of such notice), the portions of the Premises proposed to be sublet or
assigned, and the identity of the proposed assignee or subtenant. Tenant shall
further provide Landlord with such other information concerning the proposed
assignee or subtenant as requested by Landlord. Any proposed assignee or
sublessee must agree to assume and agree to perform all the covenants and
conditions of Tenant under this lease. In the case of any proposed assignment,
or in the case of a proposed sublet of fifty percent (50%) or more of the
Premises at a time when Tenant has not occupied the Premises, or if the
proposed sublet is for fifty percent (50%) or more of the Premises for a sublet
term ending within the last twelve (12) months of the term of this lease,
Landlord shall have the right, exercisable by written notice to be delivered to
Tenant within thirty (30) days of receipt of Tenant’s notice, to terminate this
lease effective as of the date specified in Tenant’s notice as the proposed
commencement date of the assignment or sublease. If Landlord does not elect to
terminate this lease and if Landlord consents in writing to the proposed
assignment or sublet (regardless of whether Landlord had a termination right),
Tenant shall be free to assign or sublet all or a portion of the Premises
subject to the following conditions: (i) any sublease shall be on the same
terms set forth in the notice given to Landlord; (ii) no sublease shall be
valid and no subtenant shall take possession of the sublet premises until an
executed counterpart of such sublease has been delivered to Landlord; (iii) no
subtenant shall have a further right to sublet; (iv) any sums or other economic
consideration received by Tenant as a result of such assignment or sublet
(except rental or other payments received which are attributable to the
amortization over the term of this lease of the cost of leasehold improvements
constructed for such assignees or subtenant, and brokerage fees) whether denominated
rentals or otherwise, which exceed, in the aggregate, the total sums which
Tenant is obligated to pay Landlord under this lease (prorated to reflect
obligations allocable to that portion of the Premises subject to such
sublease), shall be shared equally between Landlord and Tenant (50%/50%); and
(v) no sublet or assignment shall release Tenant  of Tenant’s obligation or alter the primary liability of Tenant
to pay the rent and to perform all other obligations to be performed by Tenant
hereunder. Tenant shall pay to Landlord promptly upon demand as additional
rent, Landlord’s actual attorneys’ fees and other costs incurred for reviewing,
processing or documenting any requested assignment or sublease, whether or not
Landlord’s consent is granted.


 


                If Tenant is a partnership, a withdrawal or change, voluntary or
involuntary or by operation of law, of any general partner or the dissolution
of the partnership shall be deemed an assignment of this lease subject to all
conditions of this paragraph 19. If Tenant is a corporation any dissolution,
merger, consolidation or other reorganization of Tenant or the sale or other
transfer of a controlling percentage of the capital stock of Tenant or the sale
of more than fifty percent (50%) of the value of Tenant’s assets shall be an
assignment of this lease subject to all the conditions of this paragraph 19.
The term “controlling percentage” means the ownership of, and the right to
vote, stock possessing more than 50% of the total combined voting power of all
classes of Tenant’s capital stock issued, outstanding and entitled to vote.
This paragraph shall not apply if Tenant is a corporation the


 


 


11

















 


stock of which is traded through an exchange.


 


                The acceptance of rent by Landlord from any other person shall not be
deemed to be a waiver by Landlord of any provision hereof. Consent to one
assignment or sublet shall not be deemed consent to any subsequent assignment
or sublet. In the event of default by any assignee of Tenant or any successor
of Tenant in the performance of any of the terms hereof, Landlord may proceed
directly against Tenant without the necessity of exhausting remedies against
such assignee or successor. Landlord may consent to subsequent assignments or sublets
of this lease or amendments or modifications to this lease with assignees of
Tenant, without notifying Tenant, or any successor of Tenant, and without
obtaining its or their consent thereto and such action shall not relieve Tenant
of liability under this lease.


 


                No interest of Tenant in this lease shall be assignable by operation of
law (including, without limitation, the transfer of this lease by testacy or
intestacy). Each of the following acts shall be considered an involuntary
assignment: (i) if Tenant is or becomes bankrupt or insolvent, makes an
assignment for the benefit of creditors or institutes a proceeding under the
Bankruptcy Act in which Tenant is the bankrupt; or, if Tenant is a partnership
or consists of more than one person or entity, if any partner of the
partnership or other person or entity is or becomes bankrupt or insolvent, or
makes an assignment for the benefit of creditors; (ii) if a writ of attachment
or execution is levied on this lease; or (iii) if, in any proceeding or action
in which Tenant is a party, a receiver is appointed with authority to take
possession of the Premises. An involuntary assignment shall constitute a
default by Tenant and Landlord shall have the right to elect to terminate this
lease, in which case this lease shall not be treated as an asset of Tenant.


 


                Tenant immediately and irrevocably assigns to Landlord, as security for
Tenant’s obligations under this lease, all rent from any subletting of all or a
part of the Premises as permitted by this lease, and Landlord, as assignee and
as attorney-in-fact for Tenant, or a receiver of Tenant appointed on Landlord’s
application, may collect such rent and apply it toward Tenant’s obligations
under this lease; except that, until the occurrence of an act or default by
Tenant, Tenant shall have the right to collect such rent, subject to promptly
forwarding to Landlord any portion thereof to which Landlord is entitled
pursuant to this paragraph 19.


 


                Notwithstanding the above requirement that Tenant obtain the consent of
Landlord prior to any assignment or sublet, Tenant may, without obtaining the
prior consent of Landlord, assign or sublease the whole or any part of the
Premises to any corporation or other entity which is wholly owned by Tenant or
of which Tenant is a wholly owned subsidiary, or which is wholly owned by
either of the foregoing or which merges with Tenant provided that (i) Tenant
shall give written notice thereof to Landlord in the manner required for other
assignments or subleases by this paragraph 19; (ii) Tenant shall continue to be
fully obligated under this lease; (iii) any such assignee or sublessee shall
expressly assume and agree to perform all of the terms and conditions of this
lease to be performed by Tenant; and (iv) any such assignment of sublet shall
be subject to all other terms and conditions of this paragraph 19 pertaining to
assignments and/or sublets (excepting only the requirement concerning prior
written consent of Landlord).


 


        20.  DEFAULT


 


                The occurrence of any of the following shall constitute a default by
Tenant: (i) failure of Tenant to pay any rent or other sum payable hereunder
within five (5) days of when due;
(ii) abandonment of the Premises (Tenant’s failure to occupy and conduct
business in the Premises for fourteen (14) consecutive days shall be deemed an
abandonment); or (iii) failure of Tenant to perform any other term, covenant or
condition of this lease if the failure to perform is not cured within thirty
(30) days after notice thereof has been given to Tenant (provided that if such
default cannot reasonably be cured within thirty (30) days, Tenant shall not be
in default if Tenant commences to cure such failure to perform within the
thirty (30) days, period and diligently and in good faith continues to cure the
failure to perform).  The notice
referred to in clause (iii) above shall specify the failure to perform and the
applicable lease provision and shall demand that Tenant perform the provisions
of this lease within the applicable period of time. No notice shall be deemed a
forfeiture or termination of this lease unless Landlord so elects in the
notice. No notice shall be required in the event of abandonment or vacation of
the Premises.


 


                In addition to the above, the occurrence of any of the following events
shall also constitute a default by Tenant: (i) Tenant fails to pay its debts as
they become due or admits in writing its inability to pay its debts, or makes a
general assignment for the benefit of creditors (for purposes of determining
whether Tenant is not paying its debts as they become due, a debt shall be
deemed overdue upon the earliest to occur of the following: thirty (30) days
from the date a statement therefor has been rendered; the date on which any
action or proceeding therefor is commenced; or the date on which a formal
notice of default or demand has been sent); (ii) Tenant fails to furnish
Landlord a schedule of Tenant’s aged accounts payable within ten (10) days
after Landlord’s written request, (iii) any financial statements given to
Landlord by Tenant, any assignee of Tenant, subtenant of Tenant, any guarantor
of Tenant, or successor in interest of Tenant (including, without limitation,
any schedule of Tenant’s aged accounts payable) are materially false. At any
time during the term of this lease Landlord, at Landlord’s option, shall have
the right to receive from Tenant upon Landlord’s request, a current annual
balance sheet for Landlord’s review. If the balance sheet shows a negative net
worth,


 


 


12

















 


Landlord may terminate this lease by giving
Tenant sixty (60) days prior notice.


 


                In the event of a default by Tenant, then Landlord, in addition to any
other rights and remedies of Landlord at law or in equity, shall have the right
either to terminate Tenant’s right to possession of the Premises (and thereby
terminate this lease) or, from time to time and without termination of this
lease, to relet the premises or any part thereof for the account and in the
name of Tenant for such term and on such terms and conditions as Landlord in
its sole discretion may deem advisable, with the right to make alterations and
repairs to the Premises.


 


                Should Landlord elect to keep this lease in full force and effect,
Landlord shall have the right to enforce all of Landlord’s rights and remedies
under this lease, including but not limited to the right to recover and to
relet the Premises. If Landlord relets the Premises, then Tenant shall pay to
Landlord, as soon as ascertained, the costs and expenses incurred by Landlord
in such reletting and in making alterations and repairs. Rentals received by
Landlord from such reletting shall be applied (i) to the payment of any
indebtedness due hereunder, other than basic rent and common area charges, from
Tenant to Landlord; (ii) to the payment of the cost of any repairs necessary to
return the Premises to good condition normal wear and tear excepted, including
the cost of alterations and the cost of storing any of Tenant’s property left
on the Premises at the time of reletting; and (iii) to the payment of basic
rent or common area charges due and unpaid hereunder. The residue, if any,
shall be held by Landlord and applied in payment of future rent or damages in
the event of termination as the same may become due and payable hereunder and
the balance, if any at the end of the term of this lease, shall be paid to
Tenant. Should the basic rent and common area charges received from time to
time from such reletting during any month be less than that agreed to be paid
during that month by Tenant hereunder, Tenant shall pay such deficiency to
Landlord. Such deficiency shall be calculated and paid monthly. No such
reletting of the Premises by Landlord shall be construed as an election on its
part to terminate this lease unless a notice of such intention is given to
Tenant or unless the termination hereof is decreed by a court of competent
jurisdiction. Notwithstanding any such reletting without termination, Landlord
may at any time thereafter elect to terminate this lease for such previous breach,
provided it has not been cured. Landlord shall have the remedy described in
California Civil Code section 1951.4 (Landlord may continue the lease in effect
after Tenant’s breach and abandonment and recover as rent as it becomes due, if
Tenant has the right to sublet or assign, subject only to reasonable
limitations).


 


                Should Landlord at any time terminate this lease for any breach, in
addition to any other remedy it may have, it shall have the immediate right of
entry and may remove all persons and property from the Premises and shall have
all the rights and remedies of a landlord provided by California Civil Code
Section 1951.2 or any successor code section. Upon such termination, in
addition to all its other rights and remedies, Landlord shall be entitled to
recover from Tenant all damages it may incur by reason of such breach,
including the cost of recovering the Premises and including (i) the worth at
the time of award of the unpaid rent which had been earned by the time of
termination; (ii) the worth at the time of award of the amount by which the
unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; (iii) the worth at the time of the award of the amount by
which the unpaid rent for the balance of the term after the time of award
exceeds the amount of such rental loss that Tenant proves could be reasonably
avoided; and (iv) any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant’s failure to perform its obligations
under this lease or which in the ordinary course of events would be likely to
result therefrom. The “worth at the time of award of the amounts referred to in
(i) and (ii) above is computed by allowing interest at the rate of twelve
percent (12%) per annum or the maximum rate permitted by law, whichever is
less. The “worth at the time of award of the amount referred to in (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%). Property removed from the Premises may be stored in a public or private
warehouse or elsewhere at the sole cost and expense of Tenant. In the event
that Tenant shall not immediately pay the cost of storage of such property
after the same has been stored for a period of thirty (30) days or more,
Landlord may sell any or all thereof at a public or private sale in such manner
and at such times and places that Landlord, in its sole discretion, may deem
proper, without notice to or demand upon Tenant.


 


        21.  LANDLORD’S RIGHT TO CURE TENANT’S
DEFAULT


 


                Landlord, at any time after Tenant commits a default, may, but shall
not be obligated to, cure the default at Tenant’s cost. If Landlord at any
time, by reason of Tenant’s default, pays any sum or does any act that requires
the payment of any sum, the sum paid by Landlord shall be due immediately from
Tenant to Landlord and shall bear interest at the rate of twelve percent (12%)
per annum or the maximum rate permitted by law, whichever is less, from the
date the sum is paid by Landlord until Landlord is reimbursed by Tenant.
Amounts due Landlord hereunder shall be additional rent.


 


        22.  EMINENT DOMAIN


 


                If all or any part of the Premises shall be taken by any public or
quasi-public authority under the power of eminent domain or conveyance in lieu
thereof, this lease shall terminate as to any portion of the Premises so taken
or conveyed on the date when title vests in the condemner, and Landlord shall
be entitled to any and all payments, income, rent, award or any interest
therein whatsoever which may be paid or made in connection with such taking or
conveyance Tenant shall


 


 


 


13

















 


have no claim against Landlord or otherwise
for the value of any unexpired term of this lease. Notwithstanding the
foregoing, Tenant shall be entitled to any compensation for depreciation to and
cost of removal of Tenant’s equipment and fixtures and any compensation for its
relocation expenses necessitated by such taking, but in each case only to the
extent the condemning authority makes a separate award therefor or specifically
identifies a portion of the award as being therefor. Each party waives the
provisions of Section 1265.130 of the California Code of Civil Procedure (which
section allows either party to petition the Superior Court to terminate this
lease in the event of a partial taking of the Premises).


 


                If any action or proceeding is commenced for such taking of the
Premises or any portion thereof or of any other space in the Project, or if
Landlord is advised in writing by any entity or body having the right or power
of condemnation of its intention to condemn the Premises or any portion thereof
or of any other space in the Project, and Landlord shall decide to discontinue
the use and operation of the Project or decide to demolish, alter or rebuild
the Project, then Landlord shall have the right to terminate this lease by giving
Tenant written notice thereof within sixty (60) days of the earlier of the date
of Landlord’s receipt of such notice of intention to condemn or the
commencement of said action or proceeding. Such termination shall be effective
as of the last day of the calendar month next following the month in which such
notice is given or the date on which title shall vest in the condemnor,
whichever occurs first. In the event of a partial taking, or conveyance in lieu
thereof, of the Premises and fifty percent (50%) or more of the number of
square feet in the Premises are taken then Tenant may terminate this lease. Any
election by Tenant to so terminate shall be by written notice given to Landlord
within sixty (60) days from the date of such taking or conveyance and shall be
effective on the last day of the calendar month next following the month in
which such notice is given or the date on which title shall vest in the
condemnor, whichever occurs first.


 


                If a portion of the Premises is taken by power of eminent domain or
conveyance in lieu thereof and neither Landlord nor Tenant terminates this
lease as provided above, then this lease shall continue in full force and
effect as to the part of the Premises not so taken or conveyed and all payments
of rent shall be apportioned as of the date of such taking or conveyance so
that thereafter the amounts to be paid by Tenant shall be in the ratio that the
area of the portion of the Premises not so taken bears to the total area of the
Premises prior to such taking.


 


        23.  NOTICE AND COVENANT TO SURRENDER


 


                On the last day of the term or on the effective date of any earlier
termination, Tenant shall surrender to Landlord the Premises and all of
Tenant’s improvements and alterations in their condition existing as of the
commencement of the term (normal wear and tear excepted), with all originally
painted interior walls washed or repainted if marked or damaged, interior vinyl
covered walls cleaned and repaired or replaced if marked or damaged, all
carpets shampooed and cleaned, the air conditioning and heating system serviced
and repaired by a reputable and licensed service firm (unless Landlord has
elected to maintain such system pursuant to paragraph 8; and all floors cleaned
and waxed; all to the reasonable satisfaction of Landlord, Tenant shall remove
all of Tenant’s personal property and trade fixtures, together with
improvements or alterations that Tenant is obligated to remove pursuant to the
provisions of  paragraph 8, from the
Premises, and all such property not removed shall be deemed abandoned.


 


                If the Premises are not surrendered as required in this paragraph,
Tenant shall indemnify Landlord against all loss, liability and expense
(including but not limited to, attorney fees) resulting from the failure by
Tenant in so surrendering the Premises, including, without limitation, any
claims made by any succeeding tenants. It is agreed between Landlord and Tenant
that the provisions of this paragraph shall survive termination of this lease.


 


        24.  TENANT’S QUITCLAIM


 


                At the expiration or earlier termination of this lease, Tenant shall
execute, acknowledge and deliver to Landlord, within ten (10) days after
written demand from Landlord to Tenant, any quitclaim deed or other document
required to remove the cloud or encumbrance created by this lease from the real
property of which the Premises are a part. This obligation shall survive said
expiration or termination.


 


        25.  HOLDING OVER


 


                Any holding over after the expiration or termination of this lease with
the written consent of Landlord shall be construed to be a tenancy from month
to month at double the monthly rent as adjusted, in effect on the date of such
expiration or termination. All provisions of this lease, except those
pertaining to the term and any option to extend, shall apply to the month to
month tenancy. The provisions of this paragraph are in addition to, and do not
affect, Landlord’s right of reentry or other rights hereunder or provided by
law.


 


                If Tenant shall retain possession of the Premises or any part thereof
without Landlord’s consent following the expiration or sooner termination of
this lease for any reason, then Tenant shall pay to Landlord for each day of
such retention double the amount of the daily rental an effect during the last
month prior to the date of such expiration or termination. Tenant shall also
indemnify and hold


 


 


14

















 


Landlord harmless from any loss, liability
and expense (including, but not limited to, attorneys fees) resulting from
delay by Tenant in surrendering the Premises, including without limitation any
claims made by any succeeding tenant founded on such delay. Acceptance of rent
by Landlord following expiration or termination shall not constitute a renewal
of this lease, and nothing contained in this paragraph shall waive Landlord’s
right to re entry or any other right. Tenant shall be only a Tenant at
sufferance, whether or not Landlord accepts any rent from Tenant, while Tenant
is holding over without Landlord’s written consent.


 


        26.  SUBORDINATION


 


                In the event Landlord’s title or leasehold interest is now or hereafter
encumbered in order to secure a loan to Landlord, Tenant shall, at the request
of Landlord or the lender, execute in writing an agreement subordinating its
rights under this lease to the lien of such encumbrance, or, if so requested,
agreeing that the lien of lender’s encumbrance shall be or remain subject and
subordinate to the rights of Tenant under this lease. Tenant hereby irrevocably
appoints Landlord the attorney-in-fact of Tenant to execute, deliver and record
any such instrument or instruments for and in the name and on behalf of Tenant.
Notwithstanding any such subordination, Tenant’s possession under this lease
shall not be disturbed if Tenant is not in default and so long as Tenant shall
pay all amounts due hereunder and otherwise observe and perform all provisions
of this lease. In addition, if in connection with any such loan the lender
shall request reasonable modifications of this lease as a condition to such
financing, Tenant will not unreasonably withhold, delay or defer its consent
thereof, provided that such modifications do not increase the obligations of
Tenant hereunder or materially adversely affect the leasehold interest hereby
created or Tenant’s rights hereunder.


 


                Within ten (10) days after written request from Landlord, Tenant shall
deliver to Landlord such financial statements as are reasonably required by
Landlord or Landlord’s lender to verify the net worth of Tenant. In addition,
Tenant shall deliver to Landlord’s lender any financial statements required by
such holder to facilitate the financing or refinancing of Landlord’s interest
in the Project. Tenant represents and warrants to Landlord that each such
financial statement is a true and accurate statement as of the date of such
statement. All financial statements shall be confidential and shall be used
only for the purposes set forth herein.


 


        27.  CERTIFICATE OF ESTOPPEL


 


                Each party shall, within five (5) calendar days after request therefor,
execute and deliver to the other party, in recordable form, a certificate
stating that the lease is unmodified and in full force and effect, or in full
force and effect as modified and stating the modifications. The certificate
shall also state the amount of the monthly rent, the date to which monthly rent
has been paid in advance, the amount of the security deposit and/or prepaid
monthly rent, and, if the request is made by Landlord, shall include such other
items as Landlord or Landlord’s lender may reasonably request. Failure to
deliver such certificate within such time shall constitute a conclusive
acknowledgment by the party failing to deliver the certificate that the lease
is in full force and effect and has not been modified except as may be
represented by the party requesting the Certificate. Any such Certificate
requested by Landlord may be conclusively relied upon by any prospective
purchaser or encumbrance of the Premises or Project. Further, within five (5)
calendar days following written request made from time to time by Landlord,
Tenant shall furnish to Landlord current financial statements of Tenant.


 


        28.  SALE BY LANDLORD


 


                In the event the original Landlord hereunder, or any successor owner of
the Project or Premises, shall sell or convey the Project or Premises, all
liabilities and obligations on the part of the original Landlord, or such
successor owner, under this lease accruing thereafter shall terminate, and
thereupon all such liabilities and obligations shall be binding upon the new
owner. Tenant agrees to attorn to such new owner and to look solely to such new
owner for performance of any and all such liabilities and obligations.


 


        29.  ATTORNMENT TO LENDER OR THIRD PARTY


 


                In the event the interest of Landlord in the land and buildings in
which the Premises are located (whether such interest of Landlord is a fee
title interest or a leasehold interest) is encumbered by deed of trust, and
such interest is acquired by a lender or any other third party through judicial
foreclosure or by exercise of a power of sale at private trustee’s foreclosure
sale, Tenant hereby agrees to release Landlord of any obligation arising on or
after any such foreclosure sale and to attorn to the purchaser at any such
foreclosure sale and to recognize such purchaser as the Landlord under this
lease.


 


        30.  DEFAULT BY LANDLORD


 


                Landlord shall not be in default unless Landlord fails to perform
obligations required of Landlord within a reasonable time but in no event
earlier than thirty (30) days after written notice by Tenant to Landlord and to
the holder of any first mortgage or deed of trust covering the Premises
specifying wherein Landlord has failed to perform such obligations, provided,
however, that if the nature of Landlord’s obligations is such that more than
thirty (30) days are required by performance, then Landlord shall not be in
default if Landlord commences performance within such thirty (30) day 


 


 


15

















 


period and thereafter diligently prosecutes
the same to completion.


 


                If Landlord is in default of this lease, Tenant’s sole remedy shall be
to institute suit against Landlord in a court of competent jurisdiction, and
Tenant shall have no right to offset any sums expended by Tenant as a result of
Landlord’s default against future rent and other sums due and payable pursuant
to this lease. If Landlord is in default of this lease, and as a consequence
Tenant recovers a money judgment against Landlord, the judgment shall be
satisfied only out of the proceeds of sale received on execution of the
judgment and levy against the right, title and interest of Landlord in the
Project of which the Premises are a part, and out of rent or other income from
such real property receivable by Landlord or out of the consideration received
by Landlord from the sale or other disposition of all or any part of Landlord’s
right, title and interest in the Project of which the Premises are a part.
Neither Landlord nor any of the partners comprising the partnership designated
as Landlord shall be personally liable for any deficiency.


 


        31.  CONSTRUCTION CHANGES


 


                It is understood that the description of the Premises and the location
of ductwork, plumbing and other facilities therein are subject to such changes
as Landlord or Landlord’s architect determines to be desirable in the course of
construction of the Premises and/or the improvements constructed or being
constructed therein and no such changes or any changes in plans for any other
portions of the Project, shall affect this lease or entitle Tenant to any
reduction of rent hereunder or result in any liability of Landlord to Tenant.


 


        32.  MEASUREMENT OF PREMISES


 


                Tenant understands and agrees that any reference to square footage of
the Premises is approximate only and includes all interior partitions, columns
and exterior walls, and one-half of the partitions separating the Premises from
the rest of the Project, Tenant’s proportionate share of the Common Area and,
if applicable, covered areas immediately outside the entry doors or loading
docks. Tenant waives any claim against Landlord regarding the accuracy of any
such measurement and agrees that there shall not be any adjustment in basic
rent or common area charges or other amounts payable hereunder by reason of
inaccuracies in such measurement.


 


        33.  ATTORNEY FEES


 


                If either party commences an action against the other party arising out
of or in connection with this lease, the prevailing party shall be entitled to
have and recover from the losing party all expenses of litigation, including,
without limitation, travel expenses, reasonable attorney fees, expert witness
fees, trial and appellate court costs, and deposition and transcript expenses.
If either party becomes a party to any litigation concerning this lease, or concerning
the Premises of the Project, by reason of any act or omission of the other
party or its authorized representatives, the party that causes the other party
to become involved in the litigation shall be liable to the other party for all
expenses of litigation reasonably incurred, including, without limitation,
travel expenses, attorney fees, expert witness fees, trial and appellate court
costs, and deposition and transcript expenses.


 


        34.  SURRENDER


 


                The voluntary or other surrender of this lease or the Premises by
Tenant, or a mutual cancellation of this lease, shall not work a merger, and at
the option of Landlord shall either terminate all or any existing subleases or
subtenancies or operate as an assignment to Landlord of all or any such subleases
or subtenancies.


 


        35.  WAIVER


 


                No delay or omission in the exercise of any right or remedy of either
party on any default by the other party shall impair such right or remedy or be
construed as a waiver. The receipt and acceptance by Landlord of delinquent
rent or other payments shall not constitute a waiver of any other default and
acceptance of partial payments shall not be construed as a waiver of the
balance of such payment due. No act or conduct of Landlord, including, without
limitation, the acceptance of keys to the Premises, shall constitute an
acceptance of the surrender of the Premises by Tenant before the expiration of
the term. Only a written notice from Landlord to Tenant shall constitute
acceptance of the surrender of the Premises and accomplish a termination of
this lease. Landlord’s consent to or approval of any act by Tenant requiring
Landlord’s consent or approval shall not be deemed to waive or render
unnecessary Landlord’s consent to or approval of any subsequent act by Tenant.
Any waiver by Landlord of any default must be in writing and shall not be a
waiver of any other default concerning the same or any other provision of this
lease.


 


        36.  EASEMENTS; AIRSPACE RIGHTS


 


                Landlord reserves the right to alter the boundaries of the Project and
grant easements and dedicate for public use portions of the Project without
Tenant’s consent, provided that no such grant or dedication shall interfere
with Tenant’s use of the Premises or otherwise cause Tenant to incur cost or
expense. From time to time, and upon Landlord’s demand, Tenant shall execute,
acknowledge and


 


 


16

















 


deliver to Landlord, in accordance with
Landlord’s instructions, any and all documents, instruments, maps or plats
necessary to effectuate Tenant’s covenants hereunder.


 


                This lease confers no rights either with regard to the subsurface of or
airspace above the land on which the Project is located or with regard to
airspace above the building of which the Premises are a part. Tenant agrees
that no diminution or shutting off of light or view by a structure which is or
may be erected (whether or not by Landlord) on property adjacent to the
building of which the Premises are a part or to property adjacent thereto,
shall in any way affect this lease, or entitle Tenant to any reduction of rent,
or result in any liability of Landlord to Tenant.


 


        37.  RULES AND REGULATIONS


 


                Landlord shall have the right from time to time to promulgate reasonable rules and regulations for the
safety, care and cleanliness of the Premises, the Project and the Common Area,
or for the preservation of good order. On delivery of a copy of such rules and
regulations to Tenant, Tenant shall comply with the rules and regulations, and
a violation of any of them shall constitute a default by Tenant under this
lease. If there is a conflict between the rules and regulations and any of the
provisions of this lease, the provisions of this lease shall prevail. Such
rules and regulations may be amended by Landlord from time to time with or
without advance notice. No such rules and regulations shall require Tenant to
pay additional rent under this lease.


 


        38.  NOTICES


 


                All notices, demands, requests, consents and other communications which
may be given or are required to be given by either party to the other shall be
in writing and shall be sufficiently made and delivered if personally served or
if sent by United States first class mail, postage prepaid. All such
communications from Landlord to Tenant shall be addressed to Tenant at the
Premises. All such communications by Tenant to Landlord shall be sent to
Landlord at its offices at 360 S. San Antonio Road, Suite 14, Los Altos,
California 94022. Either party may change its address by notifying the other of
such change. Each such communication shall be deemed received on the date of
the personal service or mailing thereof in the manner herein provided, as the
case may be.


 


        39.  NAME


 


                Tenant shall not use the name of the Project for any purpose, other
than as the address of the business conducted by Tenant in the Premises,
without the prior written consent of Landlord.


 


        40.  GOVERNING LAW; SEVERABILITY


 


                This lease shall in all respects be governed by and construed in
accordance with the laws of the State of California. If any provision of this
lease shall be held or rendered invalid, unenforceable or ineffective for any
reason whatsoever, all other provisions hereof shall be and remain in full
force and effect.


 


        41.  DEFINITIONS


 


                As used in this lease, the following words and phrases shall have the
following meanings:


 


                Additional
Rent any amount described in paragraph 53, below.


 


                Authorized
representatives any of officer, agent, employee or independent contractor
retained or employed by either party, acting within authority given him by that
party.


 


                Encumbrance:
any deed of trust, mortgage or other written security device or agreement
affecting the Premises or the Project that constitutes security for the payment
of a debt or performance of an obligation, and the note or obligation secured
by such deed of trust, mortgage or other written security device or agreement.


 


                Lease
month: the period of time determined by reference to the day of the month
in which the term commences and continuing to one day short of the same numbered
day of the next succeeding month; e.g., the tenth day of one month to and
including the ninth day in the next succeeding month.


 


                Lender:  the beneficiary, mortgagee or other holder
of an encumbrance, as defined above.


 


                Lien:
a charge imposed on the Premises by someone other than Landlord, by which the
Premises are made security for the performance of an act. Most of the liens
referred to in this lease are mechanic’s liens.


 


                Maintenance:
repairs, replacement, repainting and cleaning


 


                Monthly
Rent:  the sum of the monthly
payments of basic rent and common area charges.


 


                Person:
one or more human beings, or legal entities or other artificial persons,
including,


 


 


17

















 


without limitation, partnerships,
corporations, trusts, estates, associations and any combination of human being
and legal entities.


 


                Provision:
any term, agreement, covenant, condition, clause, qualification, restriction,
reservation or other stipulation in the lease that defines or otherwise
controls, establishes or limits the performance required or permitted by either
party


 


                Punchlist
items: minor repairs to painting, carpets, walls and other interior
improvements as described in paragraph 9, above.


 


                Rent:  basic rent, common area charges, additional
rent, and all other amounts payable by Tenant to Landlord required by this
lease or arising by subsequent actions of the parties made pursuant to this
lease.


 


                Words used in any gender include other genders. If there be more than
one Tenant, the obligations of Tenant hereunder are joint and several. All
provisions whether covenants or conditions, on the part of Tenant shall be
deemed to be both covenants and conditions. The paragraph headings are for
convenience of reference only and shall have no effect upon the construction or
interpretation of any provision hereof.


 


        42.  TIME


 


                Time is of the essence of this lease and of each and all of its
provisions.


 


        43.  EXAMINATION OF LEASE


 


                Submission of this lease for examination or signature by Tenant does
not constitute a reservation or option for a lease, and this lease is not
effective until its execution and delivery by both Landlord and Tenant.


 


        44.  INTEREST ON PAST DUE OBLIGATIONS; LATE
CHARGE


 


                Any amount due from Tenant to Landlord hereunder which is not paid
within thirty (30) days of the date due shall bear interest at the rate of ten
percent (10%) per annum from when due until paid, unless otherwise specifically
provided herein, but the payment of such interest shall not excuse or cure any
default by Tenant under this lease. In addition, Tenant acknowledges that late
payment by Tenant to Landlord of basic rent or common area charges or of any
other amount due Landlord from Tenant, will cause Landlord to incur costs not contemplated
by this lease, the exact amount of such costs being extremely difficult and
impractical to fix. Such costs include, without limitation, processing and
accounting charges, and late charges that may be imposed on Landlord, e.g., by
the terms of any encumbrance and note secured by any encumbrance covering the
Premises. Therefore, if any such payment due from Tenant is not received by
Landlord within five (5) days of the date due (without the requirement of
providing Tenant notice), Tenant shall pay to Landlord an additional sum of
five percent (5%) of the overdue payment as a late charge. The parties agree
that this late charge represents a fair and reasonable estimate of the costs
that Landlord will incur by reason of late payment by Tenant. Acceptance of any
late charge shall not constitute a waiver of Tenant’s default with respect to
the overdue amount, nor prevent Landlord from exercising, any of the other
rights and remedies available to Landlord. No notice to Tenant of failure to
pay shall be required prior to the imposition of such interest and/or late
charge, and any notice period provided for in paragraph 20 shall not affect the
imposition of such interest and/or late charge.


 


        45.  ENTIRE AGREEMENT


 


                This lease, including any exhibits and attachments, constitutes the
entire agreement between Landlord and Tenant relative to the Premises and this
lease and the exhibits and attachments may be altered, amended or revoked only
by an instrument in writing signed by both Landlord and Tenant, Landlord and
Tenant agree hereby that all prior or contemporaneous oral agreements between
and among themselves or their agents or representatives relative to the leasing
of the Premises are merged in or revoked by this lease.


 


        46.  CORPORATE AUTHORITY


 


                If Tenant is a corporation, each individual executing this lease on
behalf of the corporation represents and warrants that he is duly authorized to
execute and deliver this lease on behalf of the corporation in accordance with
a duly adopted resolution of the Board of Directors of said corporation and
that this lease is binding upon said corporation in accordance with its terms.
If Tenant is a corporation, Tenant shall deliver to Landlord, within ten (10)
days of the execution of this lease, a copy of the resolution of the Board of
Directors of Tenant authorizing the execution of this lease and naming the
officers that are authorized to execute this lease on behalf of Tenant, which
copy shall be certified by Tenant’s president or secretary as correct and in
full force and effect.


 


 


18

















 


        47.  RECORDING


 


                Neither Landlord nor Tenant shall record this lease or any short form
memorandum heretofore without the consent of the other.


 


        48.  REAL ESTATE BROKERS


 


                Each
party represents that it has nor had dealings with any real estate broker
finder or other person with respect to this lease in any manner Each party
shall hold harmless the other party from all damages resulting from any claims
that may be asserted against the other party by any broker, finder or other
person with whom the other party has or purportedly has dealt.


 


        49.  EXHIBITS AND ATTACHMENTS


 


                All exhibits and attachments to this lease are a part hereof.


 


        50.  ENVIRONMENTAL MATTERS


 


                A. Tenant’s Covenants Regarding Hazardous Materials.


 


                        (1)
Without limiting Tenant’s obligations under paragraph 7 hereof, Tenant shall
comply with and shall cause the Project to comply with, all federal, state, and
local laws, statutes, rules, regulations, codes, ordinances, and other
governmental requirements (including, without limitation, permits, licenses,
consent decrees and administrative orders) now or hereafter in effect relating
or pertaining in any way to (i) human health, safety or protection, (ii)
workplace safety, (iii) industrial hygiene, (iv) the use, generation, handling,
maintenance, treatment, removal, transportation, storage, release, discharge,
disposal, or disclosure of Hazardous Materials, or (v) the protection or
regulation of the environment, all as amended and modified from time to time
(collectively, “Environmental Requirements”) Tenant shall cause all
governmental permits and other approvals relating in the use or operation of
the Project required by applicable Environmental Requirements or any other applicable
laws to all times remain in effect, and Tenant shall at all times comply with
such permits and other approvals.


 


                        (2) Tenant shall not cause, or permit to occur, any release, discharge,
use, generation, manufacture, storage, treatment, transportation, or disposal
by Tenant or any of its employees, agents, contractors, visitors, clients,
customers, sublessees, assignees, successors licensees or invitees, of any
Hazardous Materials on, in, under, about, or from the Premises or any other
part of the Project. However, notwithstanding the foregoing, Tenant may use on
the Premises, without Landlord’s prior written consent, but only upon written
notice to Landlord and in compliance with all Environmental Requirements and
other applicable laws, any ordinary and customary materials reasonably required
for use by Tenant in the normal course of the permitted use described in
paragraph 7 hereof and further, but only so long as such use is not a
Reportable Use (defined below) and does not expose the Premises or any other
part of the Project or neighboring properties to any meaningful risk of
contamination or damage or expose Landlord to any liability whatsoever therefor
.. In addition, Landlord may (but without any obligation to do so) condition its
consent to any Reportable Use of any Hazardous Materials by Tenant upon
Tenant’s giving Landlord such additional assurances as Landlord in its sole
discretion, deems necessary to protect itself, the public, the Premises, the
Project, and the environment against damage, contamination or injury and/or
liability therefor, including but not limited to the installation (and, at
Landlord’s option, removal on or before the expiration or earlier termination
of this lease) of reasonably necessary protective modifications to the Premises
(such as concrete encasement) and/or the deposit of an additional security
deposit. As used herein, “Reportable Use” shall mean (i) the installation or
use of any above or below ground storage tank, (ii) the release, generation,
possession, storage, use, transportation, discharge or disposal of any
Hazardous Materials that requires a permit from, or with respect to which a
report, notice, registration or business plan is required to be filed with, any
governmental agency or authority, and (iii) the presence in, on or about the
Premises, the Project of any Hazardous Materials with respect to which any
Environmental Requirements or other applicable laws require that a notice be
given to persons entering or occupying the Premises, the Project or neighboring
properties.


 


                        (3) If Tenant knows, or has reasonable cause to believe, that any
Hazardous Materials have come to be located in, on, under or about the Premises
or the Project (other than those Hazardous Materials that have come to be
located beneath and/or in the vicinity of the Project prior to the date of this
lease and other than those Hazardous Materials as previously consented to by
Landlord in writing, if any), to by Landlord, Tenant shall immediately give
Landlord written notice thereof, together with a copy of any statement, report,
notice, registration, application, permit, business plan, license, claim,
action, or proceeding, given to, or received from, any governmental authority
or private party concerning the presence, spill, release, discharge of, or
exposure to, such Hazardous Materials including but not limited to all such
documents as may be involved in any Reportable Use involving the Premises or
the Project. Landlord’s receipt of any notice, documents or other information
from Tenant as provided above in this paragraph shall not create any obligation
on the part of Landlord to respond in any way to such notice, documents or
information or the conditions described therein.


 


 


19

















 


                        (4) Tenant shall immediately notify Landlord and provide copies upon
receipt of all written complaints, claims, citations, demands, inquiries,
reports, or notices relating to the condition of the Premises or compliance
with Environmental Requirements (provided, however, that Landlord’s receipt of
any of the foregoing shall in no way create or impose any duty or obligation
upon Landlord to respond thereto. Tenant shall promptly cure and have dismissed
with prejudice any of those actions and proceedings to the satisfaction of
Landlord.


 


                        (5) Landlord, its agents, employees, contractors and designated
representatives, and the holders of any mortgages, deeds of trust or ground
leases on the Premises or Project shall have the right, but not the obligation,
to enter the Premises at any time in the case of an emergency, and otherwise at
reasonable times, for the purpose of inspecting the condition of the Premises
and for verifying compliance by Tenant with this lease (including compliance
with Environmental Requirements) and Landlord shall be entitled to employ
experts and/or consultants in connection therewith to advise Landlord with
respect to Tenant’s activities, including but not limited to Tenant’s use,
storage, handling, transportation, maintenance, or removal of any Hazardous
Materials on or from the Premises. The costs and expenses of any such
inspections shall be paid by the party requesting same, unless a default or
breach of this lease by Tenant or a violation of any Environmental Requirement
or a contamination caused or materially contributed to by the Tenant as found
to exist or to be imminent, or unless the inspection is requested or ordered by
a governmental agency or authority as the result of any such existing or
imminent violation or contamination, in such case, Tenant shall upon request
reimburse Landlord, for the costs and expenses of such inspections.


 


                        (6) If Tenant breaches any of its warranties, representations, or
covenants under this paragraph 50, Landlord may, without obligation, cause the
removal (or other cleanup or other response acceptable to Landlord) of any
Hazardous Materials from the Project, and the costs of any Hazardous Materials
removal, remediation, detoxification, or other response (including, without
limitation, disposal, transportation and storage costs and all costs of
refitting or otherwise altering the Premises or any other part of the Project
shall be covered by the indemnity in paragraph 50B, below, whether or not a
court or other governmental authority has ordered such removal, remediation,
detoxification or other response and those costs shall become due and payable
on demand by Landlord. Tenant shall give Landlord, its agents, contractors, and
employees access to the Premises to remove, remediate, detoxify, clean up or
otherwise respond to any Hazardous Materials, and this lease shall not be
construed as creating any such obligation.


 


                B. Indemnification of Landlord.
Tenant agrees to indemnify, defend (with counsel acceptable to
Landlord and at Tenant’s sole cost), and hold Landlord and Landlord’s partners,
employees, agents, attorneys, successors and assigns free and harmless from and
against any and all losses, liabilities, obligations, penalties, claims,
litigation, orders, demands, defenses, costs, judgments, suits, penalties,
proceedings, damages (including, without limitation, consequential damages,
diminution of the value of the Premises or Project, disbursements, losses, or
expenses of any kind (including, without limitation, attorneys’ and experts’
fees and expenses incurred in investigating, defending, or prosecuting any
litigation, claim, or proceeding) that may at any time be imposed upon,
suffered by, incurred by, or asserted or awarded against Landlord or any of its
partners, employees, agents, attorneys, successors or assigns in connection
with or arising directly or indirectly out of:


 


                        (1) Any release, threatened release, discharge, handling, use, storage,
presence, transportation, or disposal of any Hazardous Materials (whether or
not the use thereof is a Reportable Use or has been consented to by Landlord
on, in, under, or affecting all or any part of the Premises or Project which is
(or are) attributable, in whole or in part, directly or indirectly, to any act
or omission of Tenant or any employee, agent, contractor, visitor, client,
customer, sublessee, assignee, successor, licensee or invitee of Tenant;


 


                        (2) Any misrepresentation, inaccuracy, or breach of any warranty,
covenant, or agreement contained or referred to in this paragraph 50;


 


                        (3) Any failure by Tenant or any employee, agent, contractor, visitor,
customer, sublessee, assignee, successor, client, licensee or invitee of Tenant
to comply with any Environmental Requirement or other applicable law, whether
such failure was made knowingly or unknowingly or intentionally or
unintentionally.


 


                This indemnification is the personal obligation of Tenant and shall
survive the expiration or sooner termination of this lease. Tenant, its
successors, and assigns waive, release, and agree not to make any claim or
bring any cost recovery action against Landlord under the Comprehensive
Environmental Response, Compensation and Liability Act, as amended and
reauthorized to date (42 U.S.C. § § 9601 et seq.) (“CERCLA”), or any state
equivalent or any similar law now existing or enacted after this date. To the
extent that Landlord is strictly liable under any such law, regulation,
ordinance, or requirement, Tenant’s obligation to Landlord under this indemnity
shall also be without regard to fault on the part of Tenant with respect to the
violation or condition that results in liability to Landlord.


 


                C. Definition of Hazardous Materials. “Hazardous Materials” means any product substance,
chemical, material or waste whose presence, nature, quantity and/or intensity
or existence, use, manufacture, disposal, transportation, spill, release, or
effect, either by itself or in combination with any other materials, substances
or chemicals is either (i) potentially injurious or harmful to the


 


 


20

















 


                        (4) Tenant shall immediately notify Landlord and provide copies upon
receipt of all written complaints, claims, citations, demands, inquiries,
reports or notices relating to the condition of the Premises or compliance with
Environmental Requirements (provided, however, that Landlord’s receipt of any
of the foregoing shall in no way create or impose any duty or obligation upon
Landlord to respond thereto. Tenant shall promptly cure and have dismissed with
prejudice any of those actions and proceedings to the satisfaction of Landlord.


 


                        (5) Landlord, its agents, employees, contractors and designated
representatives, and the holders of any mortgages, deeds of trust or ground
leases on the Premises or Project shall have the right, but not the obligation,
to enter the Premises at any time in the case of an emergency, and otherwise at
reasonable times, for the purpose of inspecting the condition of the Premises
and for verifying compliance by Tenant with this lease (including compliance with
Environmental Requirements) and Landlord shall be entitled to employ experts
and/or consultants in connection therewith to advise Landlord with respect to
Tenant’s activities, including but not limited to Tenant’s use, storage,
handling, transportation, maintenance, or removal of any Hazardous Materials on
or from the Premises. The costs and expenses of any such inspections shall be
paid by the party requesting same, unless a default or breach of this lease by
Tenant or a violation of any Environmental Requirement or a contamination
caused or materially contributed to by the Tenant is found to exist or to be
imminent, or unless the inspection is requested or ordered by a governmental
agency or authority as the result of any such existing or imminent violation or
contamination, in such case, Tenant shall upon request reimburse Landlord, for
the costs and expenses of such inspections.


 


                        (6) If Tenant breaches any of its warranties, representations, or
covenants under this paragraph 50, Landlord may, without obligation, cause the
removal (or other cleanup or other response acceptable to Landlord) of any
Hazardous Materials from the Project, and the costs of any Hazardous Materials
removal, remediation, detoxification, or other response (including, without limitation,
disposal, transportation and storage costs and all costs of refitting or
otherwise altering the Premises or any other part of the Project shall be
covered by the indemnity in paragraph 50B, below, whether or not a court or
other governmental authority has ordered such removal, remediation,
detoxification or other response and those costs shall become due and payable
on demand by Landlord. Tenant shall give Landlord, its agents, contractors, and
employees access to the Premises to remove, terminate, detoxify, clean up or
otherwise respond to any Hazardous Materials, and this lease shall not be
construed as creating any such obligation


 


                8. Indemnification of Landlord.
Tenant agrees to indemnify, defend (with counsel acceptable to Landlord and at
Tenant’s sole cost), and hold Landlord and Landlord’s partners, employees,
agents, attorneys, successors and assigns free and harmless from and against
any and all losses, liabilities, obligations, penalties, claims, litigation,
orders, demands, defenses, costs, judgments, suits, penalties, proceedings,
damages (including, without limitation, consequential damages, diminution of
the value of the Premises or Project, disbursements, losses, or expenses of any
kind (including, without limitation, attorney’s and experts’ fees and expenses
incurred in investigating, defending, or prosecuting any litigation, claim, or
proceeding) that may at any time be imposed upon, suffered by, incurred by, or
asserted or awarded against Landlord or any of its partners, employees, agents,
attorneys, successors or assigns in connection with or arising directly or
indirectly out of:


 


                        (1) Any release, threatened release, discharge, handling, use, storage,
presence, transportation, or disposal of any Hazardous Materials (whether or not
the use thereof is a Reportable Use or has been consented to by Landlord on,
in, under, or affecting all or any part of the Premises or Project which is (or
are) attributable, in whole or in part, directly or indirectly, to any act or
omission of Tenant or any employee, agent, contractor, visitor, client,
customer, sublessee, assignee, successor, license or invitee of Tenant;


 


                        (2) Any misrepresentation, inaccuracy, or breach of any warranty,
covenant, or agreement contained or referred to in this paragraph 50;


 


                        (3) Any failure by Tenant or any employee, agent, contractor, visitor,
customer, sublessee, assignee, successor, client, licensee or invitee of Tenant
to comply with any Environmental Requirement or other applicable law, whether
such failure was made knowingly or unknowingly or intentionally or
unintentially.


 


                This indemnification is the personal obligation of Tenant and shall
survive the expiration or sooner termination of this lease. Tenant, its
successors, and assigns waive, release, and agree not to make any claim or
bring any cost recovery action against Landlord under the Comprehensive
Environmental Response, Compensation and Liability Act, as amended and
reauthorized to date (42 U.S.C. § § 9601 et seq.) (“CERCLA”), or any state equivalent
or any similar law now existing or enacted after this date. To the extent that
Landlord is strictly liable under any such law, regulation, ordinance, or
requirement, Tenant’s obligation to Landlord under this indemnity shall also be
without regard to fault on the part of Tenant with respect to the violation or
condition that results in liability to Landlord.


 


                C. Definition of Hazardous Materials. “Hazardous Materials” means any product substance,
chemical, material or waste whose presence, nature, quantity and/or intensity
or existence, use, manufacture, disposal, transportation, spill, release, or
effect, either by itself or in combination with any other materials, substances
or chemicals is either (i) potentially injurious or harmful to the 


 


 


21

















 


Public health, safety or welfare, the
Premises, or the environment (including, without limitation, any soil, air,
groundwater, and subsurface media on, in, under, above or about the Project);
(ii) regulated or monitored by any federal, state or local governmental
authority; or (iii) a basis for potential liability of Landlord to any
governmental agency, private party, or other third party under any
Environmental Requirement or any other applicable statute, regulation, code,
ordinance or common law theory. Without limiting the scope or generality of the
foregoing, Hazardous Material shall include, but not be limited to any
petroleum or petroleum byproducts or petroleum hydrocarbons, flammable
explosives, asbestos, urea formaldehyde, radioactive materials or waste and any
“hazardous substance” or “toxic waste” as those terms are defined under the
provision of the California Health and Safety Code and/or CERCLA.


 


                D. Survival. The provisions of this paragraph 50 shall survive
the expiration or earlier termination of the term of this lease.


 


                E. Limitation on Tenant Liability. Notwithstanding the provisions in
this lease to the contrary, Tenant shall have no obligation to clean up or to
reimburse, release, indemnify, or defend Landlord with respect to removal or
liability respecting Hazardous Materials unless the Hazardous Materials in
question were stored, used, generated, manufactured, treated, analyzed,
released, threaten to be released, discharged, disposed, transported or
otherwise caused to be present in, on or about the Premises or the Project by
Tenant or its agent’s, employees, contractors, visitors, clients; customers,
sublessees, assignees, successors, licensees, invitees or others acting for or
on behalf of Tenant (whether or not they are negligent, intentional, willful or
unlawful).


 


        51.  SIGNAGE


 


                Tenant shall not, without obtaining the prior written consent of
Landlord, install or attach any sign or advertising material on any part of the
outside of the Premises, or on any part of the inside of the Premises which is
visible from the outside of the Premises, or in the halls, lobbies, windows or
elevators of the building in which the Premises are located or on or about any
other portion of the Common Area or Project. If Landlord consents to the
installation of any sign or other advertising material, the location, size,
design, color and other physical aspects thereof shall be subject to Landlord’s
prior written approval and shall be in accordance with any sign program
applicable to the Project. In addition to any other requirements of this
paragraph 51, the installation of any sign or other advertising material by or
for Tenant must comply with all applicable laws, statutes, requirements, rules,
ordinances and any C.C.&R.’s or other similar requirements. With respect to
any permitted sign installed by or for Tenant, Tenant shall maintain such sign
or other advertising material in good condition and repair and shall remove
such sign or other advertising material on the expiration or earlier
termination of the term of this lease. The cost of any permitted sign or
advertising material and all costs associated with the installation,
maintenance and removal thereof shall be paid for solely by Tenant. If Tenant fails
to properly maintain or remove any permitted sign or other advertising
material, Landlord may do so at Tenant’s expense. Any cost incurred by Landlord
in connection with such maintenance or removal shall be deemed additional rent
and shall be paid by Tenant to Landlord within ten (10) days following notice
from Landlord. Landlord may remove any unpermitted sign or advertising material
without notice to Tenant and the cost of such removal shall be additional rent
and shall be paid by Tenant within ten (10) days following notice from
Landlord. Landlord shall not be liable to Tenant for any damage, loss or
expense resulting from Landlord’s removal of any sign or advertising material
in accordance with this paragraph 51. The provisions of this paragraph 51 shall
survive the expiration or earlier termination of this lease.


 


        52.  SUBMISSION OF LEASE


 


                The submission of this lease to Tenant is not an offer to lease the
Premises, or an agreement by Landlord to reserve the Premises for Tenant.
Landlord will not be bound to Tenant until Tenant has duly executed and
delivered duplicate original leases to Landlord and Landlord has duly executed
and delivered one of those duplicate original leases to Tenant.


 


        53.  ADDITIONAL RENT


 


                All costs, charges, fees, penalties, interest and any other payments
(including Tenant’s reimbursement to Landlord of costs incurred by Landlord)
which Tenant is required to make to Landlord pursuant to the terms and
conditions of this lease and any amendments to this lease shall be and constitute
additional rent payable by Tenant to Landlord when due as specified in this
lease and any amendments to this lease.


 


        54.  PREMISES TAKEN “AS IS”


 


                Tenant is leasing the Premises from Landlord “as is” in its existing
condition as of the date hereof. Landlord shall have no obligation to alter or
improve the Premises except only to paint the exterior of the building in which
the Premises are located. The cost of such exterior painting shall be deemed a
common area charge as provided in paragraph 16 and shall be amortized over the
remaining term of the lease.


 


 


22

















 


                Tenant acknowledges that, except as expressly contained in this lease,
neither Landlord nor anyone acting for or on behalf of Landlord has made any
representation, warranty or promise to Tenant concerning the physical aspects
or condition of any of the Project; the feasibility, desirability or
convertibility of any of the Project into any particular use; the zoning,
building or land use restrictions applicable to the zoning, building or land
use restrictions applicable to the Project; the projected income or expenses
for any of the Project or any business conducted thereon; the suitability of
the Project for any particular use; or the presence or absence of any Hazardous
Materials; and that in entering into this lease, Tenant has not relied upon any
representation, statement or warranty of Landlord or anyone acting for or on
behalf of Landlord, other than as expressly contained in this lease, and that
all matters concerning the Premises shall be independently verified by Tenant
and that Tenant shall enter into this lease on Tenant’s own examination thereof
(or Tenant’s election not to do so). Tenant does hereby waive, and Landlord
does hereby disclaim, all warranties of any type or kind whatsoever with
respect to the Project, express or implied, including by way of description,
but not limitation, those of fitness for a particular purpose, tenantability,
habitability and use. Tenant hereby expressly assumes the risk that adverse
physical conditions and the full extend thereof (including, without limitation,
soil, groundwater and surface water contamination and air pollution from
Hazardous Materials), may not be revealed by Tenant’s inspections, reviews and
studies of the Project prior to the date of possession.


 


                No person acting on behalf of Landlord is authorized to make, and by
execution hereof Tenant acknowledges that no such person has made, any
representation, warranty, guaranty or promise except as may be expressly set
forth herein; and no agreement, statement, representation, guaranty or promise
made by any such person which is not expressly contained herein shall be valid
or binding on Landlord and Landlord’s agents, heirs, successors or assigns. The
only representations or warranties outstanding with respect to the Project, or
Landlord, either express or implied by law, are expressly set forth herein.


 


                Tenant acknowledges that any and all documentary information, soil
reports, environmental audits, site assessments, analyses or reports, insurance
policies or other information of whatever type which Tenant has received or may
receive from Landlord or Landlord’s agents is furnished on the express
condition that Tenant shall make Tenant’s own independent verification of the
accuracy and completeness of such information. Tenant agrees that Tenant shall
not attempt to assert any liability upon Landlord or Landlord’s agents for
furnishing such information and Tenant does hereby release Landlord and
Landlord’s agents, heirs, successors and assigns free and harmless from and
against, any and all such claims or liability.


 


        55.  CAPITAL EXPENDITURES


 


                Notwithstanding anything to the contrary in paragraphs 7, 8 and 9, (i)
as to any required capital improvement to the Premises of a structural nature
(and including, when necessary in Landlord’s sole judgment, replacement of the
roof and individual heating, ventilating and air-conditioning units but
excluding capital improvements required for ADA compliance except where such
ADA compliance is the responsibility of Landlord as described in this lease)
having a useful life of more than one year and which is not required by reason
of Tenant’s specific use of or activities on the Premises, Landlord shall make
such capital improvement and Tenant shall pay to Landlord, as additional rent
and in equal monthly installments over the remaining term of this lease, the
fraction of the cost of such capital improvements equal to the remaining term
of this lease over the useful life of such capital improvement; (ii) as to any
required capital improvement to the common area having a useful life of more
than one year and which is not required by Tenant’s specific use of or
activities on the Premises, the cost thereof shall be included within common
area charges ratably over the useful life of such capital improvement. Any
determination of useful life, as such term is used in this paragraph 55, shall
be reasonably made by Landlord.


 


                IN WITNESS WHEREOF, Landlord and Tenant have executed and delivered
this lease on the date first above written.


 


	
  Landlord:

  	
   

  	
  Tenant:

  
	
  C&J Development Co., a California Limited Partnership

  	
   

  	
  Southwall
  Technologies, Inc., a Delaware corporation

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Sandra M. Simons

  	
  By:

  	
  /s/ Bill R. Finley 

  
	
  Sandra M. Simons, as Trustee under the
  Charles S. and Jean A. McCandless Inter Vivos Trust Agreement dated January
  25, 1977, a General Partner

  	
   

  	
  (Signature)

  
	
   

  	
  Bill R. Finley

  
	
   

  	
  (Name)

  
	
   

  	
  Vice President and CFO 

  
	
   

  	
  (Title)

  
	
  Date:

  	
  Oct-14, 1999

  	
  Date:

  	
  13 October 1999

  



 


 


23

















 


 


Exhibit A


 


[Drawing
of Premises]


 


 


 


 


 


Exhibit B


 


[Drawing
of Project]


 


 


 


 


 


24