02-094 Devcon Associates, Net Lease Agreement, The City of Cupertino Library,; ~' 1'`
CITY OF
CUPE~lNO
17G~
~ ~~ City Hall
10300 Torre Avenue
Cupertino, CA 95014-3255
Telephone: (408) 777-3354
FAX: (408) 777-3333
DEPARTMENT OF PUBLIC WORKS
October 7, 2002
Devcon Associates XVI
3880 South Bascom Avenue, Ste. 210
San Jose, CA 95124
SUBJECT: NET LEASE AGREEMENT
Enclosed is a Net Lease Agreement by and between the City of Cupertino and Devcon Associates XVI
that has been executed by City of Cupertino officials.
If you have any questions or need further information., please contact Terry Greene at (408) 777-3248.
Sincerely,
~~~~~~
Carol Shepherd
Administrative Secretary
Enclosure
Printed on F'ecycled Paper
NET LEASE A~~REEMENT
(Multi-Tenant)
by and bc;tween
The City of Cupertino Library
("Tenant" )
and
Devcon Assc-ciates XVI
("Land~~ord" )
TABLE OF CONTENTS
Paee
1. Summary of Lease Provisions .........................................................................................................................1
2. Property Leased ...............................................................................................................................................2
2.1 Premises ............................................................................................................................................2
2.2 Improvements ....................................................................................................................................2
2.3 Acceptance of Premises .....................................................................................................................3
3. Term ................................................................................................................................................................3
3.1 Commencement Date ........................................................................................................................3
3.2 Delay of Commencement Date ..........................................................................................................4
3.3 Early Occupancy ...............................................................................................................................4
3.4 Tenant to Physically Occupy Premises ..............................................................................................4
4. Rent .................................................................................................................................................................4
4.1 Rent ...................................................................................................................................................4
4.2 Late Charge .......................................................................................................................................4
4.3 Additional Rent ................................................................................................................................5
5. Security Deposit .............................................................................................................................................5
6. Use of Premises ...............................................................................................................................................5
6.1 Permitted Uses ..................................................................................................................................5
6.2 Tenant to Comply with Legal Requirements .....................................................................................6
6.3 Prohibited Uses .................................................................................................................................6
6.4 Hazardous Materials ......................................................................................................................... 6
7. Taxes ............................................................................................................................................................. 8
7.1 Personal Property Taxes .................................................................................................................. 8
7.2 Other Taxes Payable Separately by Tenam :..................................................................................... 8
7.3 Common Taxes ............................................................................................................................... 8
8. Insurance; Indemnity; Waiver ......................................................................................................................... 9
8.1 Insurance by Landlord ...................................................................................................................... 9
8.2 Insurance by Tenant ......................................................................................................................... 9
8.3 Failure by Tenant to Obtain Insurance ........................................................................................... 10
8.4 Indemnification ............................................................................................................................. 11
8.5 Claims by Tenant ........................................................................................................................... 11
8.6 Mutual Waiver of Subrogation ....................................................................................................... 11
9. Utilities ......................................................................................................................................................... 11
10. Repairs and Maintenance .............................................................................................................................. 12
10.1 Landlord's Responsibilities ............................................................................................................. 12
10.2 Tenant's Responsibilities ................................................................................................................ 12
11. Common Area ............................................................................................................................................... 12
11.1 In General ....................................................................................................................................... 12
11.2 Parking Areas ................................................................................................................................. 13
11.3 Maintenance by Landlord ............................................................................................................... 13
12. Common Area Charges ................................................................................................................................. 13
12.1 Definition ..........................................................................................:............................................ 13
12.2 Payment of Common Area Chazges by Tenant .............................................................................. 14
12.3 Exclusions From Common Area Chazges ...................................................................................... 15
13. Alterations and Improvements ...................................................................................................................... 16
13.1 In General ....................................................................................................................................... 16
13.2 Removal Upon Lease Termination ................................................................................................. 16
13.3 Landlord's Improvements ............................................................................................................... 16
14. Default and Remedies ................................................................................................................................... 17
14.1 Events of Default ............................................................................................................................ 17
14.2 Remedies ........................................................................................................................................ 17
15. Damage or Destruction ................................................................................................................................. 18
15.1 Definition of Terms ........................................................................................................................ 18
15.2 Insured Casualty ............................................................................................................................. 19
15.3 Uninsured Casualty ........................................................................................................................ 19
15.4 Tenant's Election ............................................................................................................................ 20
15.5 Damage or Destruction Neaz End of Lease Term ........................................................................... 20
15.6 Termination of Lease ...................................................................................................................... 20
15.7 Abatement of Rentals ..................................................................................................................... 20
15.8 Liability for Personal Property ....................................................................................................... 20
15.9 Waiver of Civil Code Remedies ..................................................................................................... 20
15.10 Damage or Destruction to the Building .......................................................................................... 21
16. Condemnation ...............................................................................................................................................21
16.1 Definition of Terms ........................................................................................................................ 21
16.2 Rights ............................................................................................................................................. 21
16.3 Total Taking ................................................................................................................................... 21
16.4 Partial Taking ................................................................................................................................. 21
17. Liens ............................................................................................................................................................. 21
17.1 Premises to Be Free of Liens .......................................................................................................... 21
17.2 Notice of Lien; Bond ...................................................................................................................... 22
18. Landlord's Right of Access to Premises ........................................................................................................ 22
19. Landlord's Right to Perform Tenant's Covenants .......................................................................................... 22
20. Lender Requirements .................................................................................................................................... 22
20.1 Subordination ................................................................................................................................. 22
20.2 Subordination Agreements ............................................................................................................. 23
20.3 Approval by Lenders ...................................................................................................................... 23
20.4 Attornment ..................................................................................................................................... 23
20.5 Estoppel Certificates and Financial Statem~~nts .............................................................................. 23
21. Holding Over ................................................................................................................................................ 24
22. Notices ..........................................................................................................................................................24
23. Attorneys' Fees ............................................................................................................................................. 24
24. Assignment, Subletting and Hypothecation .................................................................................................. 24
24.1 In General ....................................................................................................................................... 24
24.2 Voluntary Assignment and Subletting ............................................................................................ 25
24.3 Collection of Rent .......................................................................................................................... 26
24.4 Corporations and Partnerships ....................................................................................................... 26
24.5 Reasonable Provisions .................................................................................................................... 27
24.6 Professional Fees ............................................................................................................................ 27
24.7 Involuntary Transfer ....................................................................................................................... 27
24.8 Hypothecation ................................................................................................................................ 27
24.9 Binding on Successors .................................................................................................................... 28
25. Successors .................................................................................................................................................... 28
26. Landlord Default; Mortgagee Protection ...................................................................................................... 28
27. Exhibits .........................................................................................................................................................28
28. Surrender of Lease Not Merger .................................................................................................................... 28
29. Waiver ..........................................................................................................................................................28
30. General ......................................................................................................................................................... 28
30.1 Captions and Headings ................................................................................................................... 28
30.2 Definitions ...................................................................................................................................... 28
30.3 Copies ............................................................................................................................................. 29
30.4 Time of Essence ............................................................................................................................. 29
30.5 Severability .................................................................................................................................... 29
30.6 Governing Law ............................................................................................................................... 29
30.7 Joint and Several Liability .............................................................................................................. 29
30.8 Construction of Lease Provisions ................................................................................................... 29
30.9 Construction of Lease Provisions ................................................................................................... 29
30.10 Tenant's Financial Statements ........................................................................................................ 29
30.11 Withholding of Landlord's Consent ................................................................................................ 30
31. Signs ............................................................................................................................................................. 30
32. Landlord as Party Defendant ........................................................................................................................ 30
33. Landlord Not a Trustee ................................................................................................................................. 30
34. Interest .......................................................................................................................................................... 30
35. Surrender of Premises ................................................................................................................................... 30
36. Labor Disputes .............................................................................................................................................. 31
37. No Partnership or Joint Venture ................................................................................................................... 31
38. Entire Agreement .......................................................................................................................................... 31
39. Submission of Lease ..................................................................................................................................... 31
40. Quiet Enjoyment ........................................................................................................................................... 31
41. Building Plans .............................................................................................................................................. 31
42. Authority ....................................................................................................................................................... 31
43. Cancellation .................................................................................................................................................. 32
44. Addendum .....................................................................................................................................................32
NET LEASE AGREEMENT
(Multi-Ti~nant)
For and inconsideration of the rentals, covenants, and conditions hereinafter set forth, Landlord hereby leases to Tenant,
and Tenant hereby rents from Landlord, the following described Premises for the term, at the rental and subject to and
upon all of the terms, covenants and agreements set forth in this Net Lease Agreement, including Landlord's right to
recover the Premises pursuant to Paragraph 24 below ("Lease"):
Summazy of Lease Provisions.
1.1 Tenant: The City of Cupertino Library ("Tenant").
1.2 Landlord: Devcon Associates XVI, a California General Partnership ("Landlord").
1.3 Date of Lease, for reference purposes only: August 20, 2002.
1.4 Premises: That certain space hereinafter more particulazly described, situated in that
certain building shown crosst-atched on the site plan attached hereto as Exhibit A and
commonly referred to as 10411 Bandley Drive and located in the City of Cupertino,
County of Santa Claza, State of California. (Paragraph 2.1)
1.5 Term: Twenty-Two (22) Months (Paragraph 3)
Tenant may extend Lease for two (2) additional months on the same terms and
conditions, upon giving written Notice to Landlord no later than one hundred
eighty (180) days prior to the end of Lease.
1.6 Commencement Date: November 1, 002 'subject to the provisions of Pazagraph 3
below. (Pazagraph 3) ~~y~
rz c~:x/ j'-
1.7 Ending Date: August 31, ;~I~, un s ooner terminated pursuant to the terms of this
Lease. (Paragraph 3)
1.8 Rent: Thirteen Thousand acrd 00/100 Dollars ($13,000.00) per month.
(Paragraph 4)
Receipt of the first month's Rent and Operating Expenses is hereby acknowledged by
Landlord.
1.9 Use of Premises: Library Use (Paragraph 6)
1.10 Tenant's shaze of Common Area Chazges: Three Thousand One Hundred Eighty and
00/100 Dollars ($3,180.00) leer month. (Pazagraph 12)
1.11 Security Deposit: Sixteen Thousand Seven Hundred Eighty-nine and 00/100 Dollars
($16,789.00) (Paragraph 5)
1.12 Addresses for Notices:
To Landlord: Devcon Associates XVI
3880 South Bascom Avenue, Suite 210
San Jose, CA 95124
City of Cupertino Library
August 20, 2002
r
To Tenant: To the :Premises, with a courtesy copy to:
Chuck Killian
C/o City of Cupertino
10300 'Come Avenue
Cupertino, CA 95014-3255
1.13 Nonexclusive Right to Use I~To More Than: Forty (40) parking spaces within the
Common Area. (Paragraph 11.2).
1.14 Summary Provisions in General. Parenthetical references in this Paragraph 1 to other
pazagraphs in this Lease aze for convenience of reference, aild designate some of the other Lease paragraphs where
applicable provisions aze set forth. All of the terms and conditions of each such referenced paragraph shall be construed
to be incorporated within and made a part of each of the about; referring Summazy of Lease Provisions. In the event of
any conflict between any Summazy of Lease Provision as set forth above and the balance of the Lease, the latter shall
control.
2. Property Leased.
2.1 Premises. Landlord hereby lt;ases to Tenant and Tenant hereby leases from Landlord
upon the terms and conditions herein set forth, those certain premises ("Premises")referred to in Paragraph 1.4 above and
shown crosshatched on the floor plan attached hereto as Exhit~it B. In addition, Tenant shall have such rights in and to
the Common Area (defined in Paragraph 11.1 below) as are more fully described in Pazagraph 11.1 below.
The building in which the Premises are located is referred to herein as the "Building." The "Land" shall mean
and refer to all of the real property outlined in red on Exhibit A„ and shall not be limited to the pazcel of real property on
which the Building is located (if the same is a sepazate legal parcel). Any reference in this Lease to the "Pazcel" shall be
deemed a reference to the Land. The Land, Building and any other building(s) or improvement(s) now or hereafter
located on the Land aze referred to herein collectively as the "Project."
Landlord reserves the right to grant to tenants of the: Project or of the buildings or improvements which now
exist or may hereafter be constructed upon real property owned by Landlord adjacent to the Land, and to the agents,
employees, servants, invitees, contractors, guests, customers and representatives of such tenants or to any other user
authorized by Landlord, the nonexclusive right to use the L«nd for pedestrian and vehiculaz ingress and egress and
vehiculaz parking (excluding only that portion of the Land designated herein for Tenant's exclusive use for vehicular
parking, if any).
2.2 Improvements. The improvements to be constructed by Landlord for Tenant's use in the Premises are
set forth in detail on the attached Exhibit C. The work described in Exhibit C includes any additional improvements to
the Premises, the Building and/or the Common Area that m~ty be required pursuant to Title 24 and Title III of the
Americans with Disabilities Act of 1990, 42 U.S.C. section 12101 et. Seq., and the regulations promulgated thereunder
(the "ADA") by reason of the construction of the improvements in the Premises.
In the event of changes to any of the work set forth in Exhibit C (whether such changes aze required by any
public agency, or by reason of any error or omission in plans because of information provided to Landlord by Tenant, or
because requested in writing by Tenant and accepted in wiitin; by Landlord), Tenant shall pay to Landlord Landlord's
costs related to such changes before work in regard to such changes is commenced; provided, however, in no event shall
Landlord's failure to demand such payment before commencement of work in regazd to such changes, or Tenant's failure
to pay for the same before commencement of work in regazd to such changes be deemed to be a waiver of Landlord's
right to require or enforce collection of such payment for changes at any time thereafter. Landlord's costs related to the
changes shall include, without limitation, all architectural, contractor, and engineering expenses, and the cost of all
buildings and other permits and inspection fees. Tenant acknowledges that Landlord or a person or entity related to
Landlord and/or controlled by Landlord may serve as Landlord's azchitect, engineer, and/or contractor in regazd to the
above-described work and in the event of any changes, Landlord's costs shall be deemed to include azchitect, engineering
City of Cupertino Library
August 20, 2002
J
and/or contractor expenses at the rates charged to third parties by Landlord and/or such related person or entity for such
services, unless otherwise expressly provided in this Lease.
Since any construction work on the Premises by Tenant prior to substantial completion of the work required of
Landlord pursuant to this Pazagraph 2.2 may interfere with the; work required of Landlord or with Landlord's ability to
obtain a certificate of occupancy (or equivalent) therefore, any such work by Tenant shall be subject to the provisions of
Paragraph 13.1 hereof, and Landlord may in its reasonable discretion withhold its consent to any such work by Tenant.
2.3 Acceptance of Premises. By taking possession of the Premises, Tenant shall be deemed
to have accepted the Premises as being in good and sanitazy order, condition and repair and to have accepted the
Premises in their condition existing as of the date Tenant takes possession of the Premises, subject to all applicable laws,
covenants, conditions, restrictions, easements and other matters of public record and the reasonable rules and regulations
from time to time promulgated by Landlord (and non-discriminatorily applied) governing the use of any portion of the
Project and further, to have accepted tenant improvements to tre constructed by Landlord (if any) as being completed in
accordance with the plans and specifications for such improvements, subject only to completion of items on Landlord's punch
list. Tenant acknowledges that neither Landlord nor Landlord'; agents have made any representation or warranty as to the
suitability of the Premises for the conduct of Tenant's business;, the condition of the Building or Premises, or the use or
occupancy which may be made thereof and Tenant has independently investigated and is satisfied that the Premises aze
suitable for Tenant's intended use and that the Building and Premises meet all governmental requirements for such
intended use. In addition, except for such improvements as may be included in Exhibit "C", Landlord makes no
representation or warranty as to the compliance of the Building or the Project with the requirements of the ADA.
Notwithstanding anything to the contrazy contained in this Lease, Tenant's acceptance of the Premises or
submission of a "punchlist" shall not be deemed a waiver of Tenant's right to have defects in the improvements
constructed by Landlord pursuant to Paragraph 2.2 or the Premises repaired at no cost to Tenant. Tenant shall give
notice to Landlord whenever any such defect becomes reasonably apparent, and Landlord shall repair the defect as soon
as practicable. Landlord also hereby assigns to Tenant all warranties with respect to the Premises, including warranties
that would reduce Tenant's maintenance obligations under this Lease, and shall cooperate with Tenant to enforce such
warranties. Finally, notwithstanding anything to the contrazy c ontained in this Lease, as of the Commencement Date, the
roof (including roof screens and membrane), plumbing, electrical (including all outlets), heating and air conditioning
systems in the Premises shall be in good working order and repair.
3. Term.
3.1 Commencement Date. The berm of this Lease ("Lease Term") shall be for the period
specified in Pazagraph 1.5 above, commencing on the date set :Forth in Paragraph 1.6 ("Commencement Date"); provided,
however, in the event any improvements to be constructed by Landlord, as set forth on Exhibit "C", are not completed by
the aforesaid Commencement Date, then the Commencement Date shall be the date on which the improvements to be
constructed by Landlord are substantially completed. Such improvements shall be deemed to be substantially completed
upon the occurrence of the earlier of the following:
(a) The date on which all improvements to be constructed by Landlord have been
substantially completed except for punch list items which do not prevent Tenant from using the Premises for its intended
use, and the appropriate governmental approvals for occupancy of the Premises have been issued; or
(b) The date on whic}t all improvements to be constructed by Landlord would
have been substantially completed except for such work as Latdlord is required to perform but which is delayed because
of any of the following (each, a "Tenant Delay"): (i) fault ~or neglect of Tenant, acts of Tenant or Tenant's agents
(including without limitation delays caused by work done on the Premises by Tenant or Tenant's agents or by acts of
Tenant's contractors or subcontractors); (ii) delays caused by <;hange orders requested by Tenant or required because of
any errors or omissions in plans submitted by Tenant: and (iii;. such work as Landlord is required to perform but cannot
complete until Tenant performs necessazy portions of construction work it has elected or is required to do; or
(c) The date Tenant opens for business in the Premises.
City of Cupertino Library
August 20, 2002
3
If the improvements to be constructed by Landlord are deemed to be substantially completed pursuant to
Paragraph 3.1(b) above, Tenant acknowledges that the Commencement Date shall occur, and therefore Tenant's
obligation to pay Rentals shall commence, earlier than the date of actual completion of such improvements. The
improvements to be constructed by Landlord shall be deemed i:o be substantially completed one day eazlier than the date
of actual completion for each day that actual completion is delayed by reason of a Tenant Delay.
If the Commencement Date is a date other than the date set forth in Paragraph 1.6, then the Ending Date set forth in
Paragraph 1.7, the rental adjustment dates set forth in PazagraE~h 1.8 and any other certain dates specified herein shall be
adjusted accordingly. When the Commencement Date, Ending Date, rental adjustment dates, and such other dates
become ascertainable, Landlord and Tenant shall specify the s:une in writing, in the form of the attached Exhibit D, which
writing shall be deemed incorporated herein. Tenant's failure to execute and deliver the letter attached hereto as
Exhibit D within thirty (30) days after Tenant receives written request from Landlord to do so (subject to any legitimate
disagreement by Tenant with the terms thereof, which both I~arties shall use reasonable efforts to resolve) shall be a
Default by Tenant hereunder. The expiration of the Lease Term or sooner termination of this Lease is referred to herein
as the "Lease Termination."
3.2 Delay of Commencement Date. Landlord shall not be liable for any damage or loss
incurred by Tenant for Landlord's failure for whatever cause to deliver possession of the Premises by a particulaz date
(including the Commencement Date), nor shall this Lease be; void or voidable on account of such failure to deliver
possession of the Premises; provided that if Landlord does not. deliver possession of the Premises to Tenant by the date
which is ninety (90) days from the date indicated in Paragraph 1.6, Tenant shall have the right to terminate this Lease by
written notice delivered to Landlord within five (5) days thereafter, and Landlord and Tenant shall be relieved of their
respective obligations hereunder; provided further that said ninety (90) day period shall be extended by the number of
days work on the Premises is delayed due to fault or neglect of Tenant, acts of Tenant or Tenant's agents, or due to acts of
God, labor disputes, strikes, fires, rainy or stormy weather, acts or failures to act of public agencies, inability to obtain
labor or materials, earthquake, war, insurrection, riots and other causes beyond Landlord's reasonable control, excluding,
however, delays caused solely by Landlord, its agents, employees, contractors or invitees.
3.3 Early Occupancy. If Tenant takes possession of the Premises prior to the
Commencement Date, other than making Alterations or installing trade fixtures, Tenant shall do so subject to all of the
terms and conditions hereof and shall pay the Rentals provide~~ for herein. Notwithstanding the foregoing, in the event
Tenant takes possession of the Premises prior to the Commena~ment Date for any reason, Tenant shall pay the Common
Area Maintenance and any and all utility charges as of the date of possession.
3.4 Tenant to Physically Occupy ]?remises. Tenant shall, no later than thirty (30) days after
the Commencement Date, go into actual physical occupancy of the Premises and open the Premises for business in
accordance with the uses specified in Pazagraph 6 below; prov:~ded, however, the date of Tenant's physical occupancy of
the Premises shall in no event extend the Commencement Date, the Lease Termination date or the date the payment of
Rentals hereunder commences. Time is of the essence.
4. Rent.
4.1 Rent. Tenant shall pay to Landlord as rent for the Premises ("Rent" ), in advance, on the
first day of each calendar month, commencing on the date specified in Paragraph 1.6 and continuing throughout the Lease
Term the Rent set forth in Paragraph 1.8 above. Rent shall be prorated, based on thirty (30) days per month, for any
partial month during the Lease Term. Rent shall be payable without deduction, offset, prior notice or demand in lawful
money of the United States to Landlord at the address herein specified for purposes of notice or to such other persons or
such other places as Landlord may designate in writing.
4.2 Late Charse. Tenant hereby acknowledges that late payment by Tenant to Landlord of
Rent will cause Landlord to incur costs not contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but aze not limited to, processing and accounting chazges, and late chazges
which may be imposed on Landlord by the terms of any mortgage or deed of trust covering the Premises. Accordingly,
City of Cupertino Library
August 20, 2002
4
Tenant shall pay to Landlord, as Additional Rent (as defined in Paragraph 4.3 below), without the necessity of prior
notice or demand, a late charge equal to ten percent (10%) of a.ny installment of Rent which is not received by Landlord
within ten (10) days after the due date for such installment. The parties hereby agree that such late chazge represents a
fair and reasonable estimate of the costs Landlord will incur b:y reason of late payment by Tenant. In no event shall this
provision for a late charge be deemed to grant to Tenant a grace period or extension of time within which to pay any
installment of Rent or prevent Landlord from exercising any right or remedy available to Landlord upon Tenant's failure
to pay such installment of Rent when due, including without limitation the right to terminate this Lease. In the event any
installment of Rent is not received by Landlord by the thirtieth (30th) day after the due date for such installment, such
installment shall beaz interest at the annual rate set forth in Paz;~graph 34 below, commencing on the thirty-first (31st) day
after the due date for such installment and continuing until such installment is paid in full.
4.3 Additional Rent. All taxes, ctrazges, costs and expenses and other sums which Tenant is
required to pay hereunder (together with all interest and charges that may accrue thereon in the event of Tenant's failure
to pay the same), and all damages, costs and reasonable expenses which Landlord may incur by reason of any Default by
Tenant shall be deemed to be additional rent hereunder ("Additional Rent"). Additional Rent shall accrue commencing
on the Commencement Date. In the event of nonpayment by Tenant of any Additional Rent, Landlord shall have all the
rights and remedies with respect thereto as Landlord has for the nonpayment of Rent. The term "Rentals" as used in this
Lease shall mean Rent and Additional Rent.
5. Security Deposit. Concurrently with Tenant's execution of this Lease, Tenant shall deposit with
Landlord a security deposit ("Security Deposit") in the amount set forth in Pazagraph 1.11 above. The Security Deposit
shall be held by Landlord as security for the faithful performance by Tenant of each and every term, covenant and
condition of this Lease applicable to Tenant, and not as prepayment of Rent. If Tenant shall at any time fail to keep or
perform any term, covenant or condition of this Lease applicable to Tenant, including without limitation, the payment of
Rentals or those provisions requiring Tenant to repair damage to the Premises caused by Tenant or to surrender the
Premises in the condition required pursuant to Pazagraph 35 below, Landlord may, but shall not be obligated to, and
without waiving or releasing Tenant from any obligation under this Lease, use, apply or retain the whole or any pazt of
the Security Deposit reasonably necessazy for the payment ~~f any amount which Landlord may spend by reason of
Tenant's default or as necessazy to compensate Landlord for arry loss or damage which Landlord may suffer by reason of
Tenant's default. In the event Landlord uses or applies any portion of the Security Deposit, Tenant shall, within five (5)
business days after written demand by Landlord, remit to Landlord sufficient funds to restore the Security Deposit to its
original sum. Failure by Tenant to so remit funds shall be a Default by Tenant. Should Tenant comply with all of the
terms, covenants and conditions of this Lease applicable to Tenant, the balance of the Security Deposit shall be returned
to Tenant within fourteen (14) days after Lease Termination acrd surrender of the Premises by Tenant; provided, however,
if any portion of the Security Deposit is to be applied to repair damages to the Premises caused by Tenant or Tenant's
agents, to clean the Premises, or to remove alterations and restore the Premises pursuant to Paragraph 13.2 below, then
the balance of the Security Deposit shall be returned to Ten•~nt no later than thirty (30) days after the date Landlord
receives possession of the Premises.
6. Use of Premises.
6.1 Permitted Uses. Tenant shall use the Premises and the Common Area only in
conformance with applicable governmental or quasi-governmental laws, statutes, orders, regulations, rules, ordinances
and other requirements now or hereafter in effect (collectively, "Laws")for the purposes set forth in Paragraph 1.9 above,
and for no other purpose without the prior written consent of Landlord, which consent shall not be unreasonably withheld
or delayed, provided that such other use is in conformance with applicable Laws. Landlord acknowledges that Tenant's
use requires that the City of Cupertino issue a Conditional Use: Permit ("Permit"). Tenant shall obtain this Permit prior to
occupancy at no cost to Landlord. In no event will Tenant's lack of obtaining said Permit eliminate, abate or limit in any
way Tenant's compliance with this Lease including, but not limited to the payment of Rent and Additional Rent as of the
Commencement Date, subject to section 43, hereof. Tenant a~:knowledges and agrees that Landlord has selected or will
be selecting tenants for the Building in order to produce a mist of tenant uses compatible and consistent with the design
integrity of the Building and with other uses of the Building; provided, however, the selection of Building tenants shall be
in Landlord's reasonable discretion and Landlord in making sr-ch selection shall not be deemed to be warranting that any
use of the Building made by any such tenant is compatible or consistent with the design integrity of the Building or other
City of Cupertino Library
August 20, 2002
5
uses of the Building. Any change in use of the Premises or the Common Area without the prior written consent of
Landlord shall be a Default by Tenant. Tenant and Tenant's al;ents shall comply with the provisions of any Declazation
of Covenants, Conditions, and Restrictions affecting the Prenises and the Common Area.
6.2 Tenant to Comply with Le ag 1 Requirements. Tenant shall, at its sole cost, promptly comply
with all Laws relating to or affecting the use, occupational safety, occupancy, or condition of the Premises, including
without limitation those relating to utility usage and load or number of permissible occupants or users of the Premises,
whether or not the same aze now contemplated by the parties; v/ith the provisions of all recorded documents affecting the
Premises or the Common Area insofaz as the same relate to or ~iffect the use, occupational safety, occupancy, or condition
of the Premises the Common Area; and with the requirements of any board of fire underwriters (or similaz body now or
hereafter constituted) relating to or affecting the use, occupational safety, occupancy, or condition of the Premises or the
Common Area. Tenant's obligations pursuant to this paragraph shall include, without limitation, maintaining or restoring
the Premises and making structural and nonstructural alterations and additions in compliance and conformity with all
Laws and recorded documents relating to the use, occupationaa safety, occupancy, or condition of the Premises during the
Lease Term;provided, however, that Landlord shall make any alteration or addition required to bring the Premises or the
Common Area into compliance with legal requirements in effect at the time the Premises, any improvements installed
therein by Landlord, or the Common Area, respectively, were originally constructed. At Landlord's option, Landlord
may make the required alteration, addition or change, and Tenant shall pay the cost thereof as Additional Rent. With
respect to any structural alterations or additions as may be hereafter required due to a change in laws and unrelated to
Tenant's specific use of the_Premises or the Common Area, Te nant shall be required to pay a pro rata portion of the cost
thereof, which amount shall be determined by multiplying the total cost by a fraction, the numerator of which is the
number of months remaining in the Lease Term at the time of the alteration or addition, and the denominator of which is
the number of months in the useful life of the alteration or addition. Tenant shall obtain prior to taking possession of the
Premises any permits, licenses or other authorizations required for the lawful operation of its business at the Premises.
The judgment of any court of competent jurisdiction or the ~~dmission of Tenant in any action or proceeding against
Tenant, regardless of whether Landlord is a pazty thereto or not, that Tenant has violated such Law or recorded document
relating to the use, occupational safety, occupancy, or conditi~~n of the Premises shall be conclusive of the fact of such
violation by Tenant. Any alterations or additions undertaken by Tenant pursuant to this Paragraph 6.2 shall be subject to
the requirements of Pazagraph 13.1 below.
6.3 Prohibited Uses. Tenant and Tenant's agents shall not commit or suffer to be committed any
waste upon the Premises. Tenant and Tenant's agents shall nod: do or permit anything to be done in or about the Premises
or Common Area which will in any way obstruct or interfere ~Nith the rights of any other tenants of the Building, other
authorized users of the Common Area, or occupants of neighboring property, or injure or annoy them. Tenant and
Tenant's agents shall not use or allow the Premises to be used for any unlawful, immoral or hazardous purpose or any
purpose not permitted by this Lease, nor shall Tenant or Tenant's agents cause, maintain, or permit any nuisance in, on or
about the Premises. Tenant and Tenant's agents shall not do or permit anything to be done in or about the Premises nor
bring or keep anything in the Premises which will in any way increase the rate of any insurance upon any portion of the
Project or any of its contents, or cause a cancellation of any insurance policy covering any portion of the Project or any of
its contents, nor shall Tenant or Tenant's agents keep, use or sell or permit to be kept, used or sold in or about the
Premises any azticles which may be prohibited by a standazd i'orm policy of fire insurance. In the event the rate of any
insurance upon any portion of the Project or any of its content; is increased because of the acts or omissions of Tenant
or Tenant's agents, Tenant shall pay, as Additional Rent, the full cost of such increase; provided, however this provision
shall in no event be deemed to constitute a waiver of Landlord's right to declare a default hereunder by reason of such
increase or of any other rights or remedies of Landlord in connection with such increase. Tenant and Tenant's agents
shall not place any loads upon the floor, walls or ceiling of 'the Premises which would endanger the Building or the
structural elements thereof or of the Premises, nor place any harmful liquids in the drainage system of the Building or
Common Area. No waste materials or refuse shall be dumped upon or permitted to remain upon any part of the Project
except in enclosed trash containers designated for that purpose by Landlord. No materials, supplies, equipment, finished
products (or semi-finished products), raw materials, or other articles of any nature shall be stored upon, or be permitted to
remain on, any portion of the Project outside the Premises.
6.4 Hazazdous Materials. Neither Tenant nor Tenant's agents shall permit the introduction,
placement, use, storage, manufacture, transportation, release ~r disposition (collectively "Release") of any Hazardous
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Material(s) (defined below) on or about any portion of the Project without the prior written consent of Landlord, which
consent may be withheld in the sole and absolute discretion of :Landlord without any requirement of reasonableness in the
exercise of that discretion. Notwithstanding the immediatel}~ preceding sentence to the contrary, Tenant may use de
minimis quantities of the types of materials which aze technically classified as Hazazdous Materials but commonly used in
domestic or office use to the extent not in an amount, which, either individually or cumulatively, would be a "reportable
quantity" under any applicable Law. Tenant covenants that, at its sole cost and expense, Tenant will comply with all
applicable Laws with respect to the Release by Tenant, its agents, employees, contractors or invitees of such permitted
Hazardous Materials. Any Release beyond the scope allowf;d in this pazagraph shall be subject to Landlord's prior
consent, which may be withheld in Landlord's sole and absolute discretion, and shall require an amendment to the Lease
in the event Landlord does consent which shall set forth the materials, scope of use, indemnification and any other matter
required by Landlord in Landlord's sole and absolute discretio n. Tenant shall indemnify, defend and hold Landlord and
Landlord's agents harmless from and against any and all claims, losses, damages, liabilities, or expenses arising in
connection with the Release of Hazardous Materials in violation of Hazardous Materials Laws by Tenant, Tenant's agents
or any other person using the Premises with Tenant's knowledge and consent or authorization. Tenant's obligation to
defend, hold harmless and indemnify pursuant to this Pazagraph 6.4 shall survive Lease Termination.
The foregoing indemnity shall not apply to, and Tenant shall not be responsible for, the presence of Hazardous
Materials on, under, or about the Premises, Building or Corrunon Area to the extent caused by any third parties or by
Landlord or Landlord's employees, agents, contractors or invitees.
Notwithstanding anything to the contrazy contained in this Lease, Landlord hereby represents and warrants to
Tenant that, to the best of Landlord's knowledge, (i) the Premises, the Building, and Project aze in compliance with all
laws regarding Hazardous Materials ("Hazardous Materials Laws"); (ii) no asbestos-containing materials exist in or on
the Premises, the Building, or Project; and (iii) any handling, transportation, storage or use of Hazazdous Materials that
occurred in the Premises, the Building, or Project prior to the Commencement Date is now in compliance with all
Hazardous Materials Laws. Landlord further represents and warrants that, to the best of Landlord's knowledge, no
litigation has been brought or threatened, nor any settlements ruched with any governmental or private party, concerning
the actual or alleged presence of Hazazdous Materials on or about the Premises, Building, or Project, nor has Landlord
received any notice of any violation, or alleged violation, of arty Hazardous Materials Laws, pending claims or pending
investigations with respect to the presence of Hazardous M,~terials on or about the Premises, Building, or Project.
Landlord's representations and warranties set forth in this paz;igraph shall survive termination of this Lease.
As used in this Lease, the term "Hazardous Materials" means any chemical, substance, waste or material which
has been or is hereafter determined by any federal, state or local governmental authority to be capable of posing risk of
injury to health or safety, including without limitation, those ;substances included within the definitions of "hazardous
substances," "hazazdous materials," "toxic substances," or "solid waste" under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, the Resource Conservation and Recovery Act of 1976, and the
Hazardous Materials Transportation Act, as amended, and in the regulations promulgated pursuant to said laws; those
substances defined as "hazazdous wastes" in section 25117 o F the California Health & Safety Code, or as "hazazdous
substances" in section 25316 of the California Health & Safety Code, as amended, and in the regulations promulgated
pursuant to said laws; those substances listed in the United States Department of Transportation Table (49 CFR 172.101
and amendments thereto) or designated by the Environmental Protection Agency (or any successor agency) as hazardous
substances (see, e.~, 40 CFR Pazt 302 and amendments thereto); such other substances, materials and wastes which are
or become regulated or become classified as hazardous or toxic under any Laws, including without limitation the
California Health & Safety Code, Division 20, and Title 26 of the California Code of Regulations; and any material,
waste or substance which is (i) petroleum, (ii) asbestos, (iii) polychlorinated biphenyls, (iv) designated as a "hazazdous
substance" pursuant to section 311 of the Clean Water Act of 1977, 33 U.S.C. sections 1251 et sec .. (33 U.S.C. § 1321)
or listed pursuant to section 307 of the Clean Water Act of 1977 (33 U.S.C. § 1317), as amended; (v) flammable
explosives; (vi) radioactive materials; or (vii) radon gas.
Landlord shall have the right, upon reasonable advance notice to Tenant, to inspect, investigate, sample and/or
monitor the Premises, the Building and Common Area, including any soil, water, groundwater, or other sampling, to the
extent reasonably necessary to determine whether Tenant is complying with the terms of this Lease with respect to
Hazardous Materials. Unless a previous inspection has disclosed a violation by Tenant of the covenants contained in this
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Paragraph 6.4, such inspections, investigations, sampling and/~~r monitoring shall be performed not more often than semi-
annually. In connection therewith, Tenant shall provide Landlord with reasonable access to all portions of the Premises;
provided, however, that Landlord shall avoid any unreasonable: interference with the operation of Tenant's business on the
Premises. All costs incurred by Landlord in performing such inspections, investigation, sampling and/or monitoring shall
be reimbursed by Tenant to Landlord as Additional Rent within ten (10) days after Landlord's demand for payment.
Taxes.
7.1 Personal Property Taxes. 'Cenant shall cause Tenant's trade fixtures, equipment,
furnishings, furniture, merchandise, inventory, machinery, appliances and other personal property installed or located on
the Premises (collectively the "personal property") to be assessed and billed sepazately from the Land and the Building.
Tenant shall pay before delinquency any and all taxes, assessments and public charges levied, assessed or imposed upon
or against Tenant's personal property. If any of Tenant's personal property shall be assessed with the Land or the
Building, Tenant shall pay to Landlord, as Additional Rent, the: amounts attributable to Tenant's personal property within
thirty (30) days after receipt of a written statement from Landlord setting forth the amount of such taxes, assessments and
public charges attributable to Tenant's personal property. Tenant shall comply with the provisions of any Law which
requires Tenant to file a report of Tenant's personal property .located on the Premises.
7.2 Other Taxes Payable Seaazate:ly by Tenant. Tenant shall pay (or reimburse Landlord, as
Additional Rent, if Landlord is assessed), prior to delinquency or within thirty (30) days after receipt of Landlord's
statement thereof, any and all taxes, levies, assessments or surc hazges payable by Landlord or Tenant and relating to this
Lease or the Premises (other than Landlord's net income, succession, transfer, gift, franchise, estate or inheritance taxes,
and Taxes, as that term is defined in Paragraph 7.3(a) below, ~~ayable as a Common Area Charge), whether or not now
customazy or within the contemplation of the pazties hereto, wltether or not now in force or which may hereafter become
effective, including but not limited to taxes:
(a) Upon, allocable to, or measured by the azea of the Premises or the Rentals
payable hereunder, including without limitation any gross rer-tal receipts, excise, or other tax levied by the state, any
political subdivision thereof, city or federal government with respect to the receipt of such Rentals;
(b) Upon or with respect to the use, possession occupancy, leasing, operation and
management of the Premises or any portion thereof;
(c) Upon this transaction or any document to which Tenant is a party creating or
transferring an interest or an estate in the Premises; or
(d) Imposed as a means of controlling or abating environmental pollution or the
use of energy or any natural resource (including without limita~:ion gas, electricity or water), including, without limitation,
any parking taxes, levies or chazges or vehicular regulations imposed by any governmental agency. Tenant shall also pay,
prior to delinquency, all privilege, sales, excise, use, business., occupation, or other taxes, assessments, license fees, or
charges levied, assessed or imposed upon Tenant's business operations conducted at the Premises.
In the event any such taxes are payable by Landlord and it shall not be lawful for Tenant to reimburse Landlord
for such taxes, then the Rentals payable hereunder shall be increased to net Landlord the same net Rental after imposition
of any such tax upon Landlord as would have been payable to Landlord prior to the imposition of any such tax.
7.3 Common Taxes.
(a) Definition of Taxes. The term "Taxes" as used in this Lease shall collectively
mean (to the extent any of the following are not paid by Tenant pursuant to Paragraphs 7.1 and 7.2 above) all real estate
taxes and general and special assessments (including, but not limited to, assessments for public improvements or benefit);
personal property taxes; taxes based on vehicles utilizing parking areas on the Land; taxes computed or based on rental
income or on the squaze footage of the Premises or the Buildin;; (including without limitation any municipal business tax
but excluding federal, state and municipal net income taxes); environmental surcharges; excise taxes; gross rental receipts
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August 20, 2002
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taxes; sales and/or use taxes; employee taxes; water and sewer taxes, levies, assessments and other chazges in the nature
of taxes or assessments (including, but not limited to, assessrnents for public improvements or benefit); and all other
governmental, quasi-governmental or special district impositions of any kind and nature whatsoever; regazdless of
whether any of the foregoing are now customary or within the contemplation of the parties hereto and regardless of
whether resulting from increased rate and/or valuation, or whether extraordinary or ordinazy, general or special,
unforeseen or foreseen, or similaz or dissimilaz to any of the foregoing and which during the Lease Term are laid, levied,
assessed or imposed upon Landlord and/or become a lien upon or chazgeable against any portion of the Project under or
by virtue of any present or future laws, statutes, ordinances, regulations, or other requirements of any governmental,
quasi-governmental or special district authority whatsoever. The term "environmental surcharges" shall include any and
all expenses, taxes, charges or penalties imposed by the Federal Department of Energy, Federal Environmental Protection
Agency, the Federal Clean Air Act, or any regulations promullgated thereunder, or imposed by any other local, state or
federal governmental agency or entity now or hereafter vested with the power to impose taxes, assessments or other types
of surchazges as a means of controlling or abating environmental pollution or the use of energy or any natural resource in
regazd to the use, operation or occupancy of the Project. The term "Taxes" shall include (to the extent the same are not
paid by Tenant pursuant to Pazagraphs 7.1 and 7.2 above), without limitation, all taxes, assessments, levies, fees,
impositions or chazges levied, imposed, assessed, measured, or based in any manner whatsoever upon or with respect to
the use, possession, occupancy, leasing, operation or management of the Project or in lieu of or equivalent to any Taxes
set forth in this Pazagraph 7.3(a). In the event any such Tax~:s aze payable by Landlord and it shall not be lawful for
Tenant to reimburse Landlord for such Taxes, then the Rental:; payable hereunder shall be increased to net Landlord the
same net Rental after imposition of any such Tax upon Landlord as would have been payable to Landlord prior to the
imposition of any such Tax.
(b) Common Area Chaz¢e. All Taxes which aze levied or assessed or which
become a lien upon any portion of the Projector which become due or accrue during the Lease Term shall be a Common
Area Charge, and Tenant shall pay as Additional Rent each month during the Lease Term 1/12th of its annual share of
such Taxes, based on Landlord's estimate thereof, pursuant to Pazagraph 12 below. Tenant's share of Taxes during any
partial tax fiscal year(s) within the Lease Term shall be prorat~:d according to the ratio which the number of days during
the Lease Term or of actual occupancy of the Premises by Tenant, whichever is greater, during such yeaz beazs to 365.
8. Insurance; Indemnity: Waiver.
8.1 Insurance by Landlord. Land] ord shall, during the Lease Term, procure and keep in force
the following insurance, the cost of which shall be a Common .Area Charge, payable by Tenant pursuant to Paragraph 12
below:
(a) Properry Insurance. "All risk" property insurance, including,
without limitation, coverage for earthquake and flood; boiler and machinery (if applicable); sprinkler damage; vandalism;
malicious mischief; full coverage plate glass insurance; and demolition, increased cost of construction and contingent
liability from change in building laws on the Building and the :Land, including any improvements or fixtures constructed
or installed in the Building and on the Land by Landlord. Such insurance shall be in the full amount of the replacement
cost of the foregoing, with reasonable deductible amounts, which deductible amounts shall be a Common Area Charge,
payable by Tenant pursuant to Pazagraph 12. Such insurance ;hall also include rental income insurance, insuring that one
hundred percent (100%) of the Rentals (as the same may be adjusted hereunder) will be paid to Landlord for a period of
up to twelve (12) months if the Premises axe destroyed or damaged, or such longer period as may be required by any
beneficiary of a deed of trust or any mortgagee of any mortgage affecting the Premises. Such insurance shall not cover
any leasehold improvements installed in the Premises by Te~rant at its expense, or Tenant's equipment, trade fixtures,
inventory, fixtures or personal property located on or in the Premises;
(b) LiabilitYInsurance. Comprehensive general liability (lessor's risk)
insurance against any and all claims for personal injury, death. or property damage occurring in or about the Building or
the Land. Such insurance shall have a combined single limit of not less than Three Million Dollars ($3,000,000) per
occurrence and Five Million Dollars ($5,000,000) aggregate; and
(c) Other. Such other insurance as Landlord deems necessary and
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Augus[ 20, 2002
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prudent.
8.2 Insurance by Tenant. Tenant shall, during the Lease Term, at Tenant's sole cost and
expense, procure and keep in force the following insurance:
(a) Personal Property nsurance. "All risk" property insurance, including, without
limitation, coverage for earthquake and flood; boiler and machinery (if applicable); sprinkler damage; vandalism;
malicious mischief; and demolition, increased cost of construction and contingent liability from changes in building laws
on all leasehold improvements installed in the Premises by Tenant at its expense (if any), and on all equipment, trade
fixtures, inventory, fixtures and personal property located on or in the Premises, including improvements or fixtures
hereinafter constructed or installed on the Premises. Such insurance shall be in an amount equal to the full replacement
cost of the aggregate of the foregoing and shall provide coverage compazable to the coverage in the standazd ISO all risk
form, when such form is supplemented with the coverages required above.
(b) Liability Insurance:. Comprehensive general liability insurance for the mutual
benefit of Landlord and Tenant, against any and all claims for :personal injury, death or property damage occurring in or
about the Premises and Common Area or arising out of Tenant's or Tenant's agents' use of the Common Area, use or
occupancy of the Premises or Tenant's operations on the Premises. Such insurance shall have a combined single limit of
not less than Three Million Dollazs ($3,000,000) per occurrence and Five Million Dollars ($5,000,000) aggregate. Such
insurance shall contain across-liability (severability of interests) clause and an extended ("broad form") liability
endorsement, including blanket contractual coverage. The minimum limits specified above aze the minimum amounts
required by Landlord, and may be revised by Landlord from time to time to meet changed circumstances, including
without limitation to reflect (i) changes in the purchasing power of the dollar, (ii) changes indicated by the amount of
plaintiffs' verdicts in personal injury actions in the State of (:alifornia, or (iii) changes consistent with the standards
required by other landlords in the county in which the Premise:; aze located. Such liability insurance shall be primary and
not contributing to any insurance available to Landlord, and Landlord's insurance (if any) shall be in excess thereto. Such
insurance shall specifically insure Tenant's performance of the indemnity, defense and hold harmless agreements
contained in Pazagraph 8.4, although Tenant's obligations pursuant to Paragraph 8.4 shall not be limited to the amount of
any insurance required of or carried by Tenant under this Paragraph 8.2(b). Tenant shall be responsible for insuring that
the amount of insurance maintained by Tenant is sufficient for Tenant's purposes.
(c) Other. Such other insurance as required bylaw, including, without limitation,
workers' compensation insurance.
(d) Form of the Policies. The policies required to be maintained by Tenant
pursuant to Pazagraphs 8.2(a), (b), and (c) above shall be with companies, on forms, with deductible amounts (if any),
and loss payable clauses reasonably satisfactory to Landlord, shall include Landlord and the beneficiary or mortgagee of
any deed of trust or mortgage encumbering the Premises and/or the Land as additional insureds, and shall provide that
such pazties may, although additional insureds, recover for any loss suffered by Tenant's negligence. Certified copies of
policies or certificates of insurance shall be delivered to Landlord prior to the Commencement Date; a new policy or
certificate shall be delivered to Landlord at least ten (10) business days prior to the expiration date of the old policy.
Tenant shall have the right to provide insurance coverage which it is obligated to carry pursuant to the terms hereof in a
blanket policy, provided such blanket policy expressly affords coverage to the Premises and Common Area and to Tenant
as required by this Lease. Tenant shall obtain a written obligation on the part of Tenant's insurer(s) to notify Landlord
and any beneficiary or mortgagee of a deed of trust or mortgage encumbering the Premises and/or the Land in writing of
any delinquency in premium payments and at least thirty (3(i) days prior to any cancellation or modification of any
policy. Tenant's policies shall provide coverage on an occurrence basis and not on a claims made basis. In no event shall
the limits of any policies maintained by Tenant be considered as limiting the liability of Tenant under this Lease.
(e) Landlord acknowlc;dges that the evidence of insurance coverage provided by
Tenant to Landlord from ABAG ("Association of Bay Area Governments") is accepted as compliance of Tenant's
insurance obligations pursuant to this Lease.
8.3 Failure by Tenant to Obtain Insurance. If Tenant does not take out the insurance required
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August 20, 2002
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pursuant to Paragraph 8.2 or keep the same in full force and effect, Landlord may, but shall not be obligated to, take out
the necessary insurance and pay the premium therefore, and Tenant shall repay to Landlord, as Additional Rent, the
amount so paid promptly upon demand. In addition, Landlor~~ may recover from Tenant and Tenant agrees to pay, as
Additional Rent, any and all reasonable expenses (including reasonable attorneys' 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.
8.4 Indemnification. Tenant shall indemnify, hold harmless, and defend Landlord with
competent counsel reasonably satisfactory to Landlord (except for Landlord's negligence or willful misconduct) against
all claims, losses, damages, expenses or liabilities for injury or death to any person or for damage to or loss of use of any
property arising out of any occurrence in, on or about the Building, Common Area or Land, if caused or contributed to by
Tenant or Tenant's agents, or arising out of any occurrence in, upon or at the Premises or on account of the use,
condition, occupational safety or occupancy of the Premises. It is the intent of the pazties hereto that the indemnity
contained in this Paragraph 8.4 shall not be limited or barred b~/ reason of any passive negligence of the part of Landlord
or Landlord's agents, except as expressly provided herein. Tenant's indemnification, defense and hold hazmless
obligations under this Lease shall include and apply to reasonable attorneys' fees, investigation costs, and other costs
actually incurred by Landlord. Tenant shall further indemnify, defend and hold harmless Landlord from and against any
and all claims, losses, damages, liabilities or expenses arising from any breach or default in the performance of any
obligation on Tenant's part to be performed under the terms of this Lease. The provisions of this Paragraph 8.4 shall
survive Lease Termination with respect to any damage, injury, death, breach or default occurring prior to such
termination. This Lease is made on the express condition that Landlord shall not be liable for, or suffer loss by reason of,
injury to person or property, from whatever cause, in any way connected with the condition, use, occupational safety or
occupancy of the Premises specifically including, without limitation, any liability for injury to the person or property of
Tenant or Tenant's agents.
8.5 Claims by Tenant. Landlord shall not be liable to Tenant, and Tenant waives all claims
against Landlord, for injury or death to any person, damage to ,any property, or loss of use of any property in any portion
of the Project by and from all causes, including without limitation, any defect in any portion of the Project and/or any
damage or injury resulting from fire, steam, electricity, gas, water or rain, which may leak or flow from or into any part of
the Premises, or from breakage, leakage, obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing, air
conditioning or lighting fixtures, whether the damage or injury results from conditions arising upon the Premises or upon
other portions of the Project or from other sources. Landlord shall not be liable for any damages arising from any actor
negligence of any other tenant or user of the Project. Tenant or Tenant's agents shall immediately notify Landlord in
writing of any known defect in the Project. The provisions of this Paragraph 8.5 shall not apply to any damage or injury
caused by Landlord's willful misconduct or sole negligence.
8.6 Mutual Waiver of Subrogation. Landlord hereby releases Tenant, and Tenant hereby
releases Landlord, and their respective officers, agents, employees and servants, from any and all claims or demands of
damages, loss, expense or injury to the Project, or to the furnishings, fixtures, equipment, inventory or other property of
either Landlord or Tenant in, about or upon the Project, which is caused by or results from perils, events or happenings
which are the subject of insurance cazried by the respective pazties pursuant to this Pazagraph 8 and in force at the time of
any such loss, whether due to the negligence of the other party or its agents and regazdless of cause or origin; provided,
however, that such waiver shall be effective only to the extent permitted by the insurance covering such loss, to the extent
such insurance is not prejudiced thereby, and to the extent insured against.
9. Utilities. Tenant shall pay during the Least; Term and prior to delinquency all chazges for water, gas,
light, heat, power, electricity, telephone or other communicati~~n service, janitorial service, trash pick-up, sewer and all
other services supplied to Tenant or consumed by Tenant on the Premises (collectively the "Services") and all taxes,
levies, fees or surcharges therefore. Tenant shall arrange for ~iervices to be supplied to the Premises and shall contract
for all of the Services in Tenant°s name prior to the Commencement Date. The Commencement Date shall not be delayed
by reason of any failure by Tenant to so contract for Services. In the event that any of the Services aze not sepazately
billed or metered to the Premises, or if any of the Services aze riot sepazately metered as of the Commencement Date, the
cost of such Services shall be a Common Area Chazge and Tenant shall pay, as Additional Rent, Tenant's proportionate
share of such cost to Landlord as provided in Paragraph 12 below, except that if any meter services less than the entire n
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August 20, 2002
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Building, Tenant's proportionate share of the costs measured by such meter shall be based upon the squaze footage of the
gross leasable area in the Premises as a percentage of the total squaze footage of the gross leasable area of the portion of
the Building serviced by such meter. If Landlord determines that Tenant is using a disproportionate amount of any
commonly metered Services or an amount in excess of the customazy amount of any Services ordinarily furnished for use
of the Premises in accordance with the uses set forth in Paz~~graph 6 above, then Landlord may elect to periodically
charge Tenant, as Additional Rent, a sum equal to Landlord's estimate of the cost of Tenant's excess use of any or all such
Services. The lack or shortage of any Services due to any cause whatsoever (except for a lack or shortage proximately
caused by the negligent acts or willful misconduct Landlord or that of its agents, employees, contractors or invitees) shall
not affect any obligation of Tenant hereunder, and Tenant shall faithfully keep and observe all the terms, conditions and
covenants of this Lease and pay all Rentals due hereunder, all. without diminution, credit or deduction.
10. Repairs and Maintenance.
10.1 Landlord's Responsibilities.:>ubject to the provisions of Paragraph 15 below, Landlord
shall maintain in reasonably good order and repair the structural roof, roof membrane and roof surface, structural and
exterior walls (including painting thereof) and foundations of the Building. In addition, Landlord shall maintain the
service contract (covering periodic inspection and servicing) f~~r the heating and air conditioning systems of the Premises.
Tenant shall give prompt written notice to Landlord of any known maintenance work required to be made by Landlord
pursuant to this Pazagraph 10.1. The costs of (i) repairs and maintenance of the roof membrane, (ii) periodic inspection
and regular servicing of the heating and air conditioning systt;ms of the Premises, and (iii) painting the exterior of the
Premises which aze the obligation of Landlord hereunder shall be a Common Area Chazge and Tenant shall pay, as
Additional Rent, Tenant's shaze of such costs to Landlord as provided in Pazagraph 12 below except that all heating,
ventilating, or air conditioning system repairs or replacements required during the first sixty (60) days of occupancy shall
be the responsibility of the Landlord with no pass through of costs to Tenant. The costs of maintenance, repair, and
replacement of the structural pazts of the Premises and the Building (including foundations, floor slab, load bearing walls
and roof structure) which aze the obligation of Landlord hereunder shall be at the cost and expense of Landlord and shall
not be a Common Area Charge, except for any repairs required because of the wrongful act of Tenant or Tenant's agents,
which repairs shall be made at the expense of Tenant and as ~~dditional Rent.
10.2 Tenant's Responsibilities. Except as expressly provided in Pazagraph 10.1 above, and
subject to the provisions of Pazagraph 2.3 above, Tenant shall, at its sole cost, maintain the entire Premises and every part
thereof, including without limitation, windows, skylights, window frames, plate glass, freight docks, doors and related
hazdwaze, interior walls and paztitions, and the electrical, plumbing, lighting, heating and air conditioning systems in
good order, condition and repair. Tenant's obligations with respect to the heating and air conditioning systems of the
Premises shall include the replacement of components thereof. If Tenant fails to make repairs or perform maintenance
work required of Tenant hereunder within fourteen (14) days after written notice from Landlord specifying the need for
such repairs or maintenance work, Landlord or Landlord's agents may, in addition to all other rights and remedies
available hereunder or by law and without waiving any alternative remedies, enter into the Premises and make such
repairs and/or perform such maintenance work. If Landlord m;~kes such repairs and/or performs such maintenance work,
Tenant shall reimburse Landlord upon demand and as Additional Rent, for the cost of such repairs and/or maintenance
work. Landlord shall use reasonable efforts to avoid causing a~iy inconvenience to Tenant or interference with the use of
the Premises by Tenant or Tenant's agents during the perform,~nce of any such repairs or maintenance. Landlord shall
have no liability to Tenant for any damage, inconvenience or interference with the use of the Premises by Tenant or
Tenant's agents as a result of Landlord performing any such repairs or maintenance (except for the negligent acts or
willful misconduct Landlord or that of its agents, employees, a~ntractors or invitees). Tenant shall reimburse Landlord,
on demand and as Additional Rent, for the cost of damage to the Project caused by Tenant or Tenant's agents. Tenant
expressly waives the benefits of any statute now or hereafter in effect (including without limitation the provisions of
subsection 1 of Section 1932, Section 1941 and Section 1942 of the California Civil Code and any similar law, statute or
ordinance now or hereafter in effect) which would otherwise afford Tenant the right to make repairs at Landlord's
expense (or to deduct the cost of such repairs from Rentals due hereunder) or to terminate this Lease because of
Landlord's failure to keep the Premises in good and sanitazy order.
11. Common Area.
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11.1 In General. Subject to the terms and conditions of this Lease and such rules and
regulations as Landlord may from time to time prescribe, Ten,~nt and Tenant's agents shall have, in common with other
tenants of the Building and other permitted users, the nonexclusive right to use during the Lease Term the access roads,
parking areas, sidewalks, landscaped areas and other facilities on the Land or in the Building designated by Landlord for
the general use and convenience of the occupants of the Building and other authorized users, which azeas and facilities
are referred to herein as the "Common Area." This right to use the Common Area shall terminate upon Lease
Termination. Landlord reserves the right to promulgate such reasonable rules and regulations relating to the use of all or
any portion of the Common Area and to amend such rules and regulations from time to time with or without advance
notice, as Landlord may deem appropriate for the best intere~;ts of the occupants of the Building and other authorized
users. Any amendments to the rules and regulations shall be effective as to Tenant, and binding on Tenant, upon delivery
of a copy of such rules and regulations to Tenant. Tenant and. Tenant's agents shall observe such rules and regulations
and any failure by Tenant or Tenant's agents to observe and comply with the rules and regulations shall be a Default by
Tenant. Landlord shall not be responsible for the nonperformance of the rules and regulations by any tenants or
occupants of the Building or other authorized users, nor shall ]Landlord be liable to Tenant by reason of the noncompli-
ance with or violation of the rules and regulations by any other tenant or user.
11.2 Parking Areas. Tenant is allocated and Tenant and Tenant's employees and invitees shall
have the nonexclusive right to use not more than the number of parking spaces set forth in Pazagraph 1.13, the location of
which may be designated from time to time by Landlord. Neither Tenant nor Tenant's agents shall at any time use more
parking spaces than the number so allocated to Tenant or pazk or permit the parking of their vehicles in any portion of the
Land not designated by Landlord as a nonexclusive pazking az~~a. Tenant and Tenant's agents shall not have the exclusive
right to use any specific pazking space except as called for in Paragraph 1.13 of the Lease. Notwithstanding the number
of pazking spaces designated for Tenant's nonexclusive use, in the event by reason of any Law relating to or affecting
pazking on the Land, or any other cause beyond Landlord's reasonable control, Landlord is required to reduce the number
of pazking spaces on the Land, Landlord shall have the right to proportionately reduce the number of Tenant's pazking
spaces and the nonexclusive pazking spaces of other tenants in the Building.
Landlord reserves the right to promulgate :such reasonable rules and regulations relating to the use of
such parking areas on the Land as Landlord may deem appropriate. Landlord furthermore reserves the right, after having
given Tenant reasonable notice, to have any vehicles owned by Tenant or Tenant's agents which are parked in violation of
the provisions of this Paragraph 11.2 or in violation of Landlord's rules and regulations relating to pazking, to be towed
away at Tenant's cost. In the event Landlord elects or is required by any law to limit or control pazking on the Land, by
validation of parking tickets or any other method, Tenant agre~:s to participate in such validation or other program under
such reasonable rules and regulations as are from time to time established by Landlord. Provided that Tenant's use,
occupancy and enjoyment of the Premises or access to the Premises is not unreasonably interfered with, Landlord shall
have the right to close, at reasonable times, all or any portion of the pazking azeas for any reasonable purpose, including
without limitation, the prevention of a dedication thereof, or th a accrual of rights of any person or public therein. Tenant
and Tenant's agents shall not at any time pazk or permit the parking of (i) trucks or other vehicles (whether owned by
Tenant or other persons) adjacent to any loading azeas so as to interfere in any manner with the use of such azeas, (ii)
Tenant's or Tenant's agents' vehicles or trucks, or the 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, or (iii) any inoperative vehicles or equipment on
any portion of the Common Area.
11.3 Maintenance by Landlord. L~~ndlord shall maintain the Common Area in good repair and
condition and shall manage the Common Area to reasonable and customary standazds. The expenditures for such
maintenance shall be at the reasonable discretion of Landlord. The cost of such maintenance, operation and management
shall be a "Common Area Chazge," and Tenant shall pay to Landlord, as Additional Rent, Tenant's share of such costs as
provided in Pazagraph 12 below.
12. Common Area Chazges.
12.1 Definition. "Common Area Chazge" or "Common Area Chazges" as used in this Lease
shall mean and include all items identified in other pazagraphs of this Lease as a Common Area Chazge and the total cost
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paid or incurred by Landlord for the operation, maintenance, repair, and management of the Project which costs shall
include, without limitation: the cost of Services and utilities supplied to the Project (to the extent the same aze not
sepazately charged or metered to tenants of the Building); wager; sewage; trash removal; fuel; electricity; heat; lighting
systems; professional management fee (not to exceed three and twenty-five hundreds percent (3.25%) of the Premises'
gross rental income); fire protection systems; storm drainage: and sanitazy sewer systems; 12 hr per day operation of
HVAC maintenance, periodic inspection and regular servicing of the heating and air conditioning systems of the
Premises; maintaining, repairing and replacing the roof memb~°ane; property and liability insurance covering the Building
and the Land and any other insurance carried by Landlord pursuant to Paragraph 8 above; window cleaning; cleaning,
sweeping, striping, resurfacing of parking and driveway azeas; cleaning the Common Area following storms or other
severe weather; cleaning and repairing of sidewalks, curbs, stairways; costs related to irrigation systems and Project
signs; fees for licenses and permits required for the operation of the Project; the cost of complying with Laws, including,
without limitation, maintenance, alterations and repairs required in connection therewith (subject to the provisions of
Paragraph 12.3 hereof); costs related to landscape maintenance; and the cost of contesting the validity or applicability of
any governmental enactments which may affect Common Area Chazges. If the Project contains more than one (1)
building at any time during the Lease Term, then the term "Common Area Charges" shall mean and include all of the
Common Area Charges allocable to the Building and a proportionate share (based on the square footage of gross leasable
area in the Building as a percentage of the total of square footage of gross leasable area of the buildings in the Project at
the time in question) of all Common Area Chazges which are related to the Project in general and are not allocated to any
one building in the Project. Common Area Charges shall also include an accounting fee to Landlord in an amount equal
to five percent (5%) of the total Common Area Charges. The cost of (i) capital repair items (i.e., items which Landlord is
required to capitalize and not expense in the current yeaz for federal income tax purposes), (ii) replacement of the roof
membrane or roof surface, (iii) resurfacing the parking lot, (iv) repainting the exterior of the Building, and shall be
amortized at ten percent (10%) over the useful life of the repai r or item, and be paid monthly by Tenant from the date of
installation or repair through Lease Termination.
(a) During the first twenty-four (24) months of this Lease, Tenant's Common
Area Chazges shall be as specified in Paragraph 1.10, and shall be fixed for the following items: Real Property Taxes,
Property Management, Real Property Insurance, standazd scheduled exterior landscaping and parking lot sweeping,
garbage, water, HVAC maintenance, roof maintenance and structural maintenance.
(b) Tenant shall be re;~ponsible for gas and electricity, liability insurance, and
excess use and wear and teaz beyond twelve (12) hours per day, six (6) days per week of equipment and premises, and as
otherwise stated in this lease.
The specific examples of Common Area Chazges stated in this Paragraph 12.1 aze in no way intended to and
shall not limit the costs comprising Common Area Chazges, nor shall such examples be deemed to obligate Landlord to
incur such costs or to provide such services or to take such actit~ns except as Landlord may be expressly required in other
portions of this Lease, or except as Landlord, in its reasonable; discretion, may elect. All reasonable costs incurred by
Landlord in good faith for the operation, maintenance, repair and management of the Project shall be deemed
conclusively binding on Tenant.
12.2 Payment of Common Area Cl~azge, s by Tenant. Prior to the Commencement Date, and
annually thereafter, Landlord shall deliver to Tenant an estimate of Common Area Charges for the succeeding yeaz.
Tenant's payment of Common Area Charges shall be based upon Landlord's estimate of Common Area Chazges and shall
be payable in equal monthly installments in advance on the first day of each calendar month commencing on the date
specified in Paragraph 1.6 and continuing throughout the Least; Term. Tenant shall pay to Landlord, as Additional Rent
and without deduction or offset, an amount equal to Tenant's ~~ercentage share (stated in Paragraph 1.10 above) of the
Common Area Chazges.
Except as stated in Paragraph 12.1 (a) and (b), Landlord shall revise its estimate of Common Area Charges on
an annual basis, and Landlord may adjust the amount of Tenant's monthly installment in the event of a material change in
Common Area Charges during any year. Landlord shall furnish Tenant an annual statement (and a statement within one
hundred eighty (180) days after Lease Termination) showing the actual Common Area Charges for the period to which
Landlord's estimate pertains and shall concurrently either bill Tenant for the balance due (payable upon demand by
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August 20, 2002
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Landlord) or credit Tenant's account for the excess previousl:~ paid.
Alternatively, Common Area Charges actually incurred or paid by Landlord but not theretofore billed to
Tenant, as invoiced by Landlord shall be payable by Tenant within ten (10) days after receipt of Landlord's invoice, but
not more often than once each calendar month.
Notwithstanding the foregoing provisions of this Paragraph 12, Landlord and Tenant agree that if Landlord
incurs any costs for insurance, Services, repairs or maintenance exclusively for or to the Premises or for less than all the
tenants of the Building and such costs are Common Area Charges, or if any improvements installed in the Premises by
Tenant or Landlord aze valued by the assessor disproportionately higher than those of any other tenants in the Building,
then Tenant's share of such Common Area Charges shall be equitably increased by Landlord to reflect the portion of any
such costs or taxes incurred by Landlord in regard to the Premises, and Tenant shall pay the same to Landlord as
Additional Rent.
12.3 Exclusions From Common ~-rea Charges. Notwithstanding anything to the contrary
contained in this Lease, in no event shall Tenant have any obli€;ation to perform, to pay directly, or to reimburse Landlord
for, all or any portion of the following repairs, maintenance, irrtprovements, replacements, premiums, claims, losses, fees,
commissions, chazges, disbursements, attorneys' fees, experts' fees, costs and expenses (collectively, "Costs").
(a) Losses Caused by Others and Construction Defects. Costs occasioned by the
act, omission or violation of Law by Landlord, any other occupant of the Project, or their respective agents, employees or
contractors, or Costs to correct any construction defect in the Premises (other than alterations constructed by Tenant),
Building or Project, or costs azising out of the failure to construct the Building, Premises, tenant improvements installed
by Landlord pursuant to Pazagraph 2.2, or Common Areas in a~~cordance with Laws and private restrictions applicable at
the time of construction thereof.
(b) Condemnation and. Insurance Costs. Costs occasioned by the exercise of the
power of eminent domain, or increases in insurance Costs caused by the activities of other occupant(s) of the Project.
(c) Reimbursable Ex~oenses. Costs for which Landlord has aright of
reimbursement from others, or Costs which Tenant pays directly to a third person.
(d) Utilities or Services. Costs (i) azising from the disproportionate use of any
utility or service supplied by Landlord to any other occupant oi'the Project; or (ii) associated with utilities and services of
a type not provided to Tenant.
(e) Leasing Expenses. Costs incurred in connection with negotiations or disputes
with other occupant(s) of the Project, and Costs azising from the violation by Landlord or any occupant of the Project
(other than Tenant) of the terms and conditions of any lease or other agreement.
(f) Reserves. Depreciation, amortization or other expense reserves.
(g) Mortgages. Interest, charges and fees incurred on debt, payments or
mortgages and rent under ground leases.
(h) Hazazdous Materials. Costs incurred to investigate the presence of any
Hazazdous Material, Costs to respond to any claim of Hazazdous Material contamination or damage, Costs to remove any
Hazazdous Material from the Premises, Building or Project or to remediate any Hazardous Material contamination, and
any judgments or other Costs incurred in connection with an.y Hazazdous Material exposure or release, except to the
extent such Costs are incurred by Landlord in accordance w:~th Pazagraph 6.4 or incurred by Landlord or caused by
reason of the storage, use or disposal of the Hazardous Material in question by Tenant, its agents, employees, contractors
or invitees.
(i) Mana eg ment. W~iges, salazies, compensation and labor burden for any
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August 20, 2002
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employee not stationed on the Project on a full-time basis, or any fee, profit or compensation retained by Landlord or its
affiliates for management and administration of the Project in f;xcess of the management fee and accounting fee specified
in Paragraph 12.1.
(j) CaQital Improvements Required by Law. Costs for structural alterations
required by Law that do not relate solely to Tenant's particulaz use or occupancy of the Premises, and Costs of retrofitting
any part of the Project, other than the Premises, in order to ~~omply with the ADA in connection with the leasing or
alteration of portions of the Project other than the Premises.
13. Alterations and Improvements.
13.1 In General. Tenant shall not make, or permit to be made, any alterations, removals,
changes, enlargements, improvements or additions (collective;ly "Alterations") in, on, about or to the Premises, or any
pazt thereof, including Alterations required pursuant to Pazal;raph 6.2, without the prior written consent of Landlord
(which consent shall not be unreasonably withheld or delayed) and without acquiring and complying with the conditions
of all permits required for such Alterations by any governrental authority having jurisdiction thereof. The term
"Alterations" as used in this Pazagraph 13 shall also include all. heating, lighting, electrical (including all wiring, conduit
outlets, drops, buss ducts, main and subpanels), air conditioning and paztitioning in the Premises made by Tenant
regardless of how affixed to the Premises. As a condition to the giving of its consent, Landlord may impose such
reasonable requirements as Landlord reasonably may deem ne~~essazy, including without limitation, the manner in which
the work is done; a right of approval of the contractor by whore the work is to be performed; the times during which the
work is to be accomplished; the requirement that Tenant poet a completion bond in an amount and form reasonably
satisfactory to Landlord; for any improvement whose cost exce;eds $100,000; and the requirement that Tenant reimburse
Landlord, as Additional Rent, for Landlord's actual costs for outside consultants incurred in reviewing any proposed
Alteration, whether or not Landlord's consent is granted. In the; event Landlord consents to the making of any Alterations
by Tenant, the same shall be made by Tenant at Tenant's sole cost and expense, in accordance with the plans and
specifications approved by Landlord and in a manner causing Landlord and Landlord's agents and other tenants of the
Building the least interference and inconvenience practicable under the circumstances. Tenant shall give written notice to
Landlord five (5) days prior to employing any laborer or contr~-ctor to perform services related to, or receiving materials
for use upon the Premises, and prior to the commencement of any work of improvement on the Premises. Any
Alterations to the Premises made by Tenant shall be made in accordance with applicable Laws and in a first-class
workmanlike manner. Tenant further agrees to provide Landlord with updated CAD architectural drawings whenever any
Alterations are completed. In making any such Alterations, Tenant shall, at Tenant's sole cost and expense, file for and
secure and comply with any and all permits or approvals required by any governmental departments or authorities having
jurisdiction thereof and any utility company having an interest therein. In no event shall Tenant make any structural
changes to the Premises or make any changes to the Premises which would weaken or impair the structural integrity of
the Building.
13.2 Removal Upon Lease Termination. At the time Tenant requests Landlord's consent,
Tenant shall request a decision from Landlord in writing as to whether Landlord will require Tenant, at Tenant's expense,
to remove any such Alterations and restore the Premises to their prior condition at Lease Termination. In the event
Tenant fails to eazlier obtain Landlord's written decision as to whether Tenant will be required to remove any Alteration,
then no less than ninety (90) nor more than one hundred twenty (120) days prior to the expiration of the Lease Term,
Tenant by written notice to Landlord shall request Landlord t~~ inform Tenant whether or not Landlord desires to have
any of such Alterations removed at Lease Termination. Follovring receipt of such notice, Landlord may elect to have all
or a portion of such Alterations removed from the Premises at Lease 'Termination, and Tenant shall, at its sole cost and
expense, remove at Lease Termination such Alterations designated by Landlord for removal and repair all damage to the
Project azising from such removal. In the event Tenant fails to so request Landlord's decision or fails to remove any such
Alterations designated by Landlord for removal, Landlord ma~/ remove any Alterations made to the Premises by Tenant
and repair all damage to the Premises and Common Area azis ing from such removal, and may recover from Tenant all
reasonable costs and expenses incurred thereby. Tenant's obligation to pay such costs and expenses to Landlord shall
survive Lease Termination. Unless Landlord elects to have Tenant remove (or, upon Tenant's failure to obtain Landlord's
decision, Landlord removes) any such Alterations, all such Alterations, except for moveable furniture, personal property
and equipment, and trade fixtures of Tenant not affixed to th~~ Premises, shall become the property of Landlord upon
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{,
Lease Termination (without any payment therefore) and remain upon and be surrendered with the Premises at Lease
Termination.
13.3 Landlord's Improvements. Al.l fixtures, improvements or equipment which aze installed,
constructed on or attached to the Premises, Building or Corrunon Area by Landlord shall be a pazt of the realty and
belong to Landlord.
14. Default and Remedies.
14.1 Events of Default. The term "Default by Tenant" as used in this Lease shall mean the
occurrence of any of the following events:
(a) Tenant's failure to pay when due any Rentals;
(b) Commencement and continuation for at least sixty (60) days of any case,
action or proceeding by, against or concerning Tenant under any federal or state bankruptcy, insolvency or other debtor's
relief law, including without limitation, (i) a case under Title a. l of the United States Code concerning Tenant, whether
under Chapter 7, 11, or 13 of such Title or under any other Chapter, or (ii) a case, action or proceeding seeking Tenant's
financial reorganization or an arrangement with any of Tenant's creditors;
(c) Voluntary or involuntazy appointment of a receiver, trustee, keeper or other
person who takes possession for more than sixty (60) days of substantially all of Tenant's assets or of any asset used in
Tenant's business on the Premises, regazdless of whether such ,appointment is as a result of insolvency or any other cause;
(d) Execution of an a:;signment for the benefit of creditors of substantially all
assets of Tenant available by law for the satisfaction of judgment creditors;
(e) Commencement of proceedings for winding up or dissolving (whether
voluntary or involuntazy) the entity of Tenant, if Tenant is a corporation or a partnership;
(f) Levy of a writ of attachment or execution on Tenant's interest under this
Lease, if such writ continues for a period of thirty (30) days;
(g) Transfer or attempted Transfer of this Lease or the Premises by Tenant
contrary to the provisions of Pazagraph 24 below;
(h) Breach by Tenan~: of any term, covenant, condition, warranty, or other
provision contained in this Lease or of any other obligation owing or due to Landlord; or
(i) Tenant's vacation or abandonment of the Premises.
14.2 Remedies. Upon any Default by Tenant, Landlord shall have the following remedies, in
addition to all other rights and remedies provided by law, to which Landlord may resort cumulatively, or in the
alternative:
14.2.1 Termination. Upon any Default by Tenant, Landlord shall have the right (but
not the obligation) to give written notice to Tenant of such default and terminate this Lease and Tenant's right to
possession of the Premises if (i) such default is in the payment of Rentals and is not cured within three (3) days after any
such notice, or, (ii) with respect to the defaults referred to in subparagraphs 14.1(d), (e), (g) and (h), such default is not
cured within thirty (30) days after any such notice (or if a default under subparagraph 14.1(h) cannot be reasonably cured
within thirty (30) days, if Tenant does not commence to cure the default within the thirty (30) day period or does not
diligently and in good faith prosecute the cure to completion), or, (iii) with respect to the defaults specified in
subpazagraphs 14.1(b), (c) and (f) such default is not cured within the respective time periods specified in those
subparagraphs. The parties agree that any notice given by Landlord to Tenant pursuant to this Paragraph 14.2.1 shall be
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sufficient notice for purposes of California Code of Civil Procedure Section 1161 and Landlord shall not be required to
give any additional notice in order to be entitled to commence an unlawful detainer proceeding. Upon termination of this
Lease and Tenant's right to possession of the Premises, Landlord shall have the right to recover from Tenant:
which had been earned at the time of termination;
(a) The worth at the time of award of the unpaid Rentals
(b) The worth at the time of award of the amount by which
the Rentals which would have been earned after termination rtntil the time of award exceeds the amount of such rental
loss that Tenant proves could have been reasonably avoided;
(c) The worth at the time of award (computed by
discounting at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent) of
the amount by which the Rentals for the balance of the Lease Term after the time of award exceed the amount of such
rental loss that Tenant proves could be reasonably avoided;
(d) Any other amounts necessary to compensate Landlord
for all detriment proximately caused by the Default by Tenant or which in the ordinary course of events would likely
result, including without limitation the following:
Premises;
the Premises;
commission paid in connection with this Lease;
(i) Expenses in retaking possession of the
(ii) Expenses for cleaning, repairing or restoring
(iii) Any unamortized real estate brokerage
(iv) Expenses for removing, transporting, and
storing any of Tenant's property left at the Premises (although landlord shall have no obligation to remove, transport, or
store any such property);
(v) Expenses of reletting the Premises,
including without limitation, brokerage commissions for the remaining term of the lease and reasonable attorneys' fees;
and
(vi) Reasonable attorneys' fees and court costs;
(vii) Costs of carrying the Premises such as
repairs, maintenance, taxes and insurance premiums, utilities and security precautions (if any).
(e) The "worth at the time of award" of the amounts referred
to in subparagraphs (a) and (b) of this Paragraph 14.2.1 is corputed by allowing interest at an annual rate equal to the
greater of: ten percent (10%); or five percent (5%) plus the rate established by the Federal Reserve Bank of San
Francisco, as of the twenty-fifth (25th) day of the month imm~;diately preceding the Default by Tenant, on advances to
member banks under Sections 13 and 13(a) of the Federal Re:~erve Act, as now in effect or hereafter from time to time
amended, not to exceed the maximum rate allowable by law.
14.2.2 Continuance of Lc;ase. Upon any Default by Tenant and unless and until
Landlord elects to terminate this Lease pursuant to Paragraph 14.2.1 above, this Lease shall continue in effect after the
Default by Tenant and Landlord may enforce all its rights and remedies under this Lease, including without limitation, the
right to recover payment of Rentals as they become due. Neither efforts by Landlord to mitigate damages caused by a
Default by Tenant nor the acceptance of any Rentals shall con:;titute a waiver by Landlord of any of Landlord's rights or
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August 20, 2002 y'~
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remedies, including the rights and remedies specified in Paragraph 14.2.1 above.
15. Damage or Destruction.
15.1 Definition of Terms. For the purposes of this Lease, the term: (a) "Insured Casualty"
means damage to or destruction of the Premises from a cause actually insured against, or required by this Lease to be
insured against, for which the insurance proceeds paid or made available to Landlord are sufficient to rebuild or restore
the Premises under then existing building codes to the condition existing immediately prior to the damage or destruction;
and (b) "Uninsured Casualty" means damage to or destruction of the Premises from a cause not actually insured against,
or not required to be insured against, or from a cause actually insured against but for which the insurance proceeds paid
or made available to Landlord are for any reason insufficient to rebuild or restore the Premises under then existing
building codes to the condition existing immediately prior to tt-e damage or destruction, or from a cause actually insured
against but for which the insurance proceeds are not paid or made available to Landlord within ninety (90) days of the
event of damage or destruction.
15.2 Insured Casualtv.
15.2.1 Rebuilding Required. In the event of an Insured Casualty where the extent of
damage or destruction is less than twenty-five percent (25%) of the then full replacement cost of the Premises, Landlord
shall rebuild or restore the Premises to the condition existing i mmediately prior to the damage or destruction, provided
the damage or destruction was not a result of a negligent or willful act of Tenant, and that there exist no governmental
codes or regulations that would interfere with Landlord's ability to so rebuild or restore.
15.2.2 Landlord's Election. In the event of an Insured Casualty where the extent of
damage or destruction is equal to or greater than twenty-five; percent (25%) of the then full replacement cost of the
Premises, Landlord may, at its option and at its sole discretion, rebuild or restore the Premises to the condition existing
immediately prior to the damage or destruction, or terminate this Lease. Landlord shall notify Tenant in writing within
sixty (60) days after the event of damage or destruction of Landlord's election to either rebuild or restore the Premises or
terminate this Lease.
15.2.3 Continuance of Luse. If Landlord is required to rebuild or restore the
Premises pursuant to Paragraph 15.2.1 or if Landlord elects to rebuild or restore the Premises pursuant to
Paragraph 15.2.2, this Lease shall remain in effect and Tenant shall have no claim against Landlord for compensation for
inconvenience or loss of business during any period of repair or restoration.
15.3 Uninsured Casualtv.
15.3.1 Landlord's Election. In the event of an Uninsured Casualty, Landlord may, at
its option and at its sole discretion (i) rebuild or restore the Premises as soon as reasonably possible at Landlord's expense
(unless the damage or destruction was caused by a negligent or willful act of Tenant, in which event Tenant shall pay all
costs of rebuilding or restoring), in which event this Lease shall continue in full force and effect or (ii) terminate this
Lease, in which event Landlord shall give written notice to Tenant within sixty (60) days after the event of damage or
destruction of Landlord's election to terminate this Lease as oi'the date of the event of damage or destruction, and if the
damage or destruction was caused by a negligent or willful act of Tenant, Tenant shall be liable therefore to Landlord.
15.3.2 Tenant's Ability to Continue Lease. If Landlord elects to terminate this Lease
and the extent of damage or destruction is less than twenty-five percent (25%) of the then full replacement cost of the
Premises or the proceeds paid or made available to Landlord are for any reason insufficient to rebuild or restore the
Premises under then existing building codes to the condition e:isting immediately prior to the damage or destruction, and
if there exist no governmental codes or regulations that would interfere with Landlord's ability to so repair or restore, then
Tenant may nevertheless cause the Lease to continue in effect: by (i) notifying Landlord in writing within ten (10) days
after Landlord's notice of termination of Tenant's agreement to pay all costs of rebuilding or restoring not covered by
insurance, and (ii) providing Landlord with reasonable security for or assurance of such payment. Tenant shall pay to
Landlord in cash no later than thirty (30) days prior to the date of commencement of construction the reasonable
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August 20, 2002
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estimated cost of rebuilding or restoring. In the event Tenant fails to pay such cost to Landlord by the date specified,
Landlord may immediately terminate the Lease and recover from Tenant all reasonable costs incurred by Landlord in
preparation for construction. If the actual cost of rebuilding or restoring exceeds the estimated cost of such work, Tenant
shall pay the difference to Landlord in cash upon notification by Landlord of the final cost. If the cost of rebuilding or
restoring is less than the estimated cost of such work, Ten.tnt shall be entitled to a refund of the difference upon
completion of the rebuilding or restoring and determination of final cost.
15.4 Tenant's Election. Notwithstanding anything to the contrary contained in this
Pazagraph 15, Tenant may elect to terminate this Lease in the event the Premises are damaged or destroyed and, in the
reasonable opinion of Landlord's azchitect or construction consultants, the restoration of the Premises cannot be
commenced within ninety (90) days after the event of damage or destruction. Tenant's election shall be made by written
notice to Landlord within ten (10) days after Tenant receives from Landlord the estimate of the time needed to complete
repair or restoration of the Premises. If Tenant does not delivf;r said notice within said ten (10) day period, Tenant may
not later terminate this Lease even if substantial completion of the rebuilding or restoration occurs subsequent to said one
hundred eighty (180) day period, provided that Landlord is proceeding with diligence to rebuild or restore the Premises.
If Tenant delivers said notice within said ten (10) day period, this Lease shall terminate as of the date of the event of
damage or destruction.
15.5 Damage or Destruction Neat• End of Lease Term. Notwithstanding anything to the
contrazy contained in this Paragraph 15, in the event the Premises aze damaged or destroyed in whole or in part
(regardless of the extent of damage) from any cause during thc; last twelve (12) months of the Lease Term, Landlord or
Tenant may, at its option, terminate this Lease as of the date of the event of damage or destruction by giving written
notice to the other of its election to do so within thirty (30) days after the event of such damage or destruction. For
purposes of this Paragraph 15.5, if Tenant has been granted an option to extend or renew the Lease Term pursuant to
another provision of this Lease, then the damage or destructio~i shall be deemed to have occurred during the last twelve
(12) months of the Lease Term if Tenant fails to exercise its option to extend or renew within twenty (20) days after the
event of damage or destruction.
15.6 Termination of Lease. If the; Lease is terminated pursuant to this Paragraph 15, the
unused balance of the Security Deposit shall be refunded to Tc;nant. The current Rent shall be proportionately reduced
during the period following the event of damage or destructio~i until the date on which Tenant surrenders the Premises,
based upon the extent to which the damage or destruction interferes with Tenant's business conducted in the Premises, as
reasonably determined by Landlord and Tenant, to the extent such loss is covered as an insured peril by the insurance
cazried by Landlord pursuant to Paragraph 8.1. All other Rentals due hereunder shall continue unaffected during such
period. The proceeds of insurance carried by Tenant pursuant to Paragraph 8.2 shall be paid to Landlord and Tenant, as
their interests appear.
15.7 Abatement of Rentals. If thf; Premises aze to be rebuilt or restored pursuant to this
Pazagraph 15, the then current Rentals shall be proportionatel}~ reduced during the period of repair or restoration, based
upon the extent to which the making of repairs interferes with Tenant's business conducted in the Premises, as reasonably
determined by Landlord and Tenant, to the extent such loss i:; covered as an insured peril by the insurance carried, or
required to be carried, by Landlord pursuant to Paragraph 8.1.
15.8 Liability for Personal Proper. Except for the negligent acts or willful misconduct
Landlord or that of its agents, employees, contractors or invitc;es, in no event shall Landlord have any liability for, nor
shall it be required to repair or restore, any injury or damage to any Alterations to the Premises made by Tenant, trade
fixtures, equipment, merchandise, furniture, or any other property installed by Tenant or at the expense of Tenant. If
Landlord or Tenant do not elect to terminate this Lease pur~;uant to this Paragraph 15, Tenant shall be obligated to
promptly rebuild or restore the same to the condition existing immediately prior to the damage or destruction in
accordance with the provisions of Pazagraph 13.1.
15.9 Waiver of Civil Code Remedies. Landlord and Tenant acknowledge that the rights and
obligations of the parties upon damage or destruction of the Premises are as set forth herein; therefore Tenant hereby
expressly waives any rights to terminate this Lease upon damage or destruction of the Premises, except as specifically
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provided by this Lease, including without limitation any righ~:s pursuant to the provisions of Subdivision 2 of Section
1932 and Subdivision 4 of Section 1933 of the California Civil Code, as amended from time to time, and the provisions
of any similar law hereinafter enacted, which provisions relate to the termination of the hiring of a thing upon its
substantial damage or destruction.
15.10 Damage or Destruction to the Building. The foregoing notwithstanding, in the event the
Building is damaged or destroyed to the extent of more than thirty-three and one-third percent (33 1/3%) of the then
replacement cost thereof, Landlord may elect to terminate this Lease, whether or not the Premises are injured.
16. Condemnation.
16.1 Definition of Terms. For the purposes of this Lease, the term: (a) "Taking" means a
taking of the Premises, Common Area or Building or damage related to the exercise of the power of eminent domain and
includes, without limitation, a voluntary conveyance, in lieu of court proceedings, to any agency, authority, public utility,
person or corporate entity empowered to condemn property; (t~) "Total Taking" means the Taking of the entire Premises
or so much of the Premises, Building or Common Area as to prevent or substantially impair the use thereof by Tenant for
the uses herein specified; provided, however, that in no event shall the Taking of less than twenty percent (20%) of the
Premises or fifty percent (50%) of the Building and Common Area be considered a Total Taking; (c) "Partial Taking"
means the Taking of only a portion of the Premises, Building or Common Area which does not constitute a Total Taking;
(d) "Date of Taking" means the date upon which the title to the Premises, Building or Common Area or a portion thereof,
passes to and vests in the condemnor or the effective date of any order for possession if issued prior to the date title vests
in the condemnor; and (e) "Award" means the amount of any ~twazd made, consideration paid, or damages ordered as a
result of a Taking.
16.2 Rights. The parties agree that. in the event of a Taking all rights between them or in and
to an Award shall be as set forth herein.
16.3 Total Taking. In the event oi' a Total Taking during the Lease Term: (a) the rights of
Tenant under this Lease and the leasehold estate of Tenant in and to the Premises shall cease and terminate as of the Date
of Taking; (b) Landlord shall refund to Tenant any prepaid Rent and the unused balance of the Security Deposit; (c)
Tenant shall pay Landlord any Rentals due Landlord under the Lease, prorated as of the Date of Taking; (d) to the extent
the Awazd is not payable to the beneficiary or mortgagee of a deed of trust or mortgage affecting the Premises, Tenant
shall receive from the Award those portions of the Awazd attrit~utable to trade fixtures of Tenant; and (e) the remainder of
the Award shall be paid to and be the property of Landlord. Nothing contained in this Paragraph 16.3 shall be deemed to
deny Tenant its right to recover awazds made by the condemning authority for moving costs, relocation costs, and costs
attributable to goodwill and leasehold improvements installed by Tenant.
16.4 Paztial Taking. In the event of a Paztial Taking during the Lease Term: (a) the rights of
Tenant under the Lease and the leasehold estate of Tenant in and to the portion of the Premises taken shall cease and
terminate as of the Date of Taking; (b) from and after the Date of Taking the Rent shall be an amount equal to the product
obtained by multiplying the then current Rent by the quotient obtained by dividing the fair market value of the Premises
immediately after the Taking by the fair market value of the Premises immediately prior to the Taking; (c) to the extent
the Awazd is not payable to the beneficiary or mortgagee of a deed of trust or mortgage affecting the Premises, Tenant
shall receive from the Awazd the portions of the Award attributable to trade fixtures of Tenant; and (d) the remainder of
the Awazd shall be paid to and be the property of Landlord. Each party waives the provisions of California Code of Civil
Procedure Section 1265.130 allowing either pazty to petition the Superior Court to terminate this Lease in the event of a
Partial Taking. Nothing contained in this Pazagraph 16.4 sh;tll be deemed to deny Tenant its right to recover awards
made by the condemning authority for moving costs, relocation costs, and costs attributable to goodwill and leasehold
improvements installed by Tenant.
17. Liens.
17.1 Premises to Be Free of Liens. Tenant shall pay for all labor and services performed for,
and all materials used by or furnished to Tenant, Tenant's agents, or any contractor employed by Tenant with respect to
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the Premises. Tenant shall indemnify, defend and hold Landlord hazmless from and keep the Project free from any liens,
claims, demands, encumbrances, or judgments, including all costs, liabilities and attorneys' fees with respect thereto,
created or suffered by reason of any labor or services performed for, or materials used by or furnished to Tenant or
Tenant's agents or any contractor employed by Tenant with re:;pect to the Premises. 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 and the Premises, Building, Common Area and Land, and any other party having an
interest therein, from mechanics' and materialmen's liens, including without limitation a notice of nonresponsibility. 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.
17.2 Notice of Lien; Bond. Should any claims of lien be filed against, or any action be
commenced affecting the Premises, Tenant's interest in the Premises or any other portion of the Project, Tenant shall give
Landlord notice of such lien or action within five (5) business clays after Tenant receives notice of the filing of the lien or
the commencement of the action. In the event that Tenant shall not, within twenty (20) days following the imposition of
any such lien, cause such lien to be released of record by paytnent or posting of a proper bond, Landlord shall have, in
addition to all other remedies provided herein and by law, tl~e right, but not the obligation, to cause the same to be
released by such means as Landlord shall deem proper, including payment of the claim giving rise to such lien or posting
of a proper bond. All such sums paid by Landlord and all expenses incurred by Landlord in connection therewith,
including attorneys' fees and costs, shall be payable to Landlord by Tenant as Additional Rent on demand.
18. Landlord's Right of Access to Premises. Landlord reserves and shall have the right and Tenant and
Tenant's agents shall permit Landlord and Landlord's agents to enter the Premises at any reasonable time during normal
business hours (except in the event of an emergency) and subject to any security measures of Tenant that aze applied to
visitors to the Premises on anon-discriminatory basis for the; purpose of (i) inspecting the Premises, (ii) performing
Landlord's maintenance and repair responsibilities set forth herein, (iii) posting notices of nonresponsibility, (iv) placing
upon the Premises at any time "For Sale" signs, (v) placing on the Premises ordinazy "For Lease" signs at any time within
one hundred eighty (180) days prior to Lease Termination, or at any time Tenant is in uncured default hereunder, or at
such other times as agreed to by Landlord and Tenant, (vi) protecting the Premises in the event of an emergency and (vii)
exhibiting the Premises to prospective purchasers or lenders a~: any reasonable time or to prospective tenants within one
hundred eighty (180) days prior to Lease Termination. In the a vent of an emergency, Landlord shall have the right to use
any and all means which Landlord reasonably may deem proper to gain access to the Premises. Any entry to the
Premises by Landlord or Landlord's agents in accordance with this Paragraph 18 or any other provision of this Lease shall
not under any circumstances be construed or deemed to be a forcible or unlawful entry into, or a detainer of the Premises,
or an eviction of Tenant from the Premises or any portion thereof nor give Tenant the right to abate the Rentals payable
under this Lease. Except to the extent caused by the negligence or willful misconduct of Landlord, its agents, employees,
contractors or invitees, Tenant hereby waives any claims for d;~tnages for any injury or inconvenience to or interference
with Tenant's business, any loss of occupancy or quiet enjoyment of the Premises, and any other loss occasioned by
Landlord's or Landlord's agents' entry into the Premises as permitted by this Paragraph 18 or any other provision of this
Lease. Notwithstanding anything to the contrary contained in this Lease, Landlord and Landlord's agents, except in the
case of emergency, shall provide Tenant with twenty-four (24) hours' notice prior to entry of the Premises. Any entry by
Landlord and Landlord's agents shall not impair Tenant's operations more than reasonably necessazy, and Tenant shall
have the right to have an employee accompany Landlord at all times that Landlord is present on the Premises.
19. Landlord's Right to Perform Tenant's Cov~:nants. Except as otherwise expressly provided herein, if
Tenant shall at any time fail to make any payment or perform ~tny other act required to be made or performed by Tenant
under this Lease, Landlord may upon ten (10) days written notice to Tenant, but shall not be obligated to and without
waiving or releasing Tenant from any obligation under this Lease, make such payment or perform such other act to the
extent that Landlord may deem desirable, and in connection therewith, pay expenses and employ counsel. All reasonable
sums so paid by Landlord and all penalties, interest and reasonable costs in connection therewith shall be due and payable
by Tenant as Additional Rent upon demand.
20. Lender Requirements.
20.1 Subordination. This Lease, at Landlord's option, shall be subject and subordinate to the
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lien of any mortgages or deeds of trust (including all advattces thereunder, renewals, replacements, modifications,
supplements, consolidations, and extensions thereof) in any amount(s) whatsoever now or hereafter placed on or against
or affecting the Premises, Building or Land, or Landlord's inte rest or estate therein without the necessity of the execution
and delivery of any further instruments on the pazt of Tenant to effectuate such subordination. If any mortgagee or
beneficiary shall elect to have this Lease prior to the lien of its mortgage or deed of trust, and shall give written notice
thereof to Tenant, this Lease shall be deemed prior to such mortgage or deed of trust, whether this Lease is dated prior or
subsequent to the date of such mortgage or deed of trust or the date of the recording thereof.
20.2 Subordination Agreements. '],enant shall execute and deliver, without chazge therefore,
such further instruments evidencing subordination of this Lease to the lien of any mortgages or deeds of trust affecting the
Premises, Building or Land as may be required by Landlord within ten (10) days following Landlord's request therefore;
provided that such mortgagee or beneficiary under such mortgage or deed of trust agrees in writing that this Lease shall
not be terminated or modified in any material way in the event of any foreclosure if Tenant is not in default under this
Lease. Failure of Tenant to execute such instruments evidencing subordination of this Lease shall constitute a Default by
Tenant hereunder.
20.3 Approval by Lenders. Tenant recognizes that the provisions of this Lease may be subject
to the approval of any financial institution that may make ~~ loan secured by a new or subsequent deed of trust or
mortgage affecting the Premises, Building or Land. If the financial institution should require, as a condition to such
financing, any modifications of this Lease in order to protec:t its security interest in the Premises including without
limitation, modification of the provisions relating to damage to and/or condemnation of the Premises, Tenant agrees to
negotiate in good faith with Landlord and such financial insti~:ution to agree on mutually acceptable modifications and
execute the appropriate amendments; provided, however, that tto modification shall substantially change the size, location
or dimension of the Premises, or increase the Rentals payable t>y Tenant hereunder. If Tenant refuses to execute any such
amendment, Landlord may, in Landlord's reasonable discretion, terminate this Lease.
20.4 Attornment. In the event of foreclosure or the exercise of the power of sale under any
mortgage or deed of trust made by Landlord and covering the Premises, Building or Land, Tenant shall attorn to the
purchaser upon any such foreclosure or sale and recognize such purchaser as the Landlord under this Lease, provided
such purchaser expressly agrees in writing to be bound by the -terms of the Lease, including, but not limited to, the quiet
enjoyment provisions of Paragraph 40.
Landlord and Tenant shall diligently seek to obtain and execute a Subordination, Attornment, and Non-Disturbance
Agreement upon execution of the Lease. Landlord makes no representation as to Landlord's ability to obtain such
Subordination, Attornment, and Non-Disturbance Agreement upon execution of the Lease.
20.5 Estoppel Certificates and Financial Statements.
(a) Delivery by Tenant. Tenant shall, within ten (10) business days following
request by Landlord therefore and without charge, execute and deliver to Landlord any and all documents, estoppel
certificates, and current financial statements of Tenant reasonably requested by Landlord in connection with the sale or
financing of the Premises, Building or Land, or requested by atry lender making a loan affecting the Premises, Building or
Land. Landlord may require that Tenant in any estoppel certil-icate shall (i) certify that this Lease is unmodified and in
full force and effect (or, if modified, state the nature of such modification and certify that this Lease, as so modified, is in
full force and effect) and has not been assigned, (ii) certify the date to which Rentals are paid in advance, if any, (iii)
acknowledge that there are not, to Tenant's knowledge, any uncured defaults on the part of Landlord hereunder, or
specify such defaults if claimed, (iv) evidence the status of this Lease as may be required either by a lender making a loan
to Landlord to be secured by a deed of trust or mortgage covering the Premises, Building or Land or a purchaser of the
Premises, Building or Land from Landlord, (v) warrant that in the event any beneficiary of any security instrument
encumbering the Premises, Building or Land forecloses on the security instrument or sells the Premises, Building or Land
pursuant to any power of sale contained in such security instrument, such beneficiazy shall not be liable for the Security
Deposit, unless the Security Deposit actually has been receivc;d by the beneficiary from Landlord, (vi) certify the date
Tenant entered into occupancy of the Premises and that Tenam: is conducting business at the Premises, (vii) certify that all
improvements to be constructed on the Premises by Landlord have been substantially completed except for punch list
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August 20, 2002
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items which do not prevent Tenant from using the Premises for its intended use, and (viii) certify such other matters
relating to the Lease and/or Premises as may be reasonably requested by a lender making a loan to Landlord or a
purchaser of the Premises, Building or Land from Landlord. Any such estoppel certificate may be conclusively relied
upon by any prospective purchaser or encumbrancer of the Premises, Building or Land. Any financial statements of
Tenant shall include an opinion of a certified public accountant (if available) and a balance sheet and profit and loss
statement for the most recent fiscal yeaz, or a reasonable substitute for the form of such financial information, all prepazed
in accordance with generally accepted accounting principles ~~onsistently applied.
(b) Nondeliver~bv TeTe;pant. Tenant's failure to deliver an estoppel certificate as
required pursuant to Paragraph 20.5(a) above shall be conclusive upon Tenant that (i) this Lease is in full force and
effect, without modification except as may be represented by :Landlord and has not been assigned, (ii) there are now no
uncured defaults in Landlord's performance, (iii) no Rentals have been paid in advance except those that are set forth in
this Lease, (iv) no beneficiary of any security instrument encutnbering the Premises, Building or Land shall be liable for
the Security Deposit in the event of a foreclosure or sale under such security instrument, unless the Security Deposit
actually has been received by the beneficiary from Landlord, (v) the improvements to be constructed on the Premises by
Landlord have been substantially completed except for punch list items which do not prevent Tenant from using the
Premises for its intended use, and (vi) Tenant has entered into occupancy of the Premises on such date as may be
represented by Landlord and is open and conducting business at the Premises. Tenant's failure to deliver any financial
statements, estoppel certificates or other documents as require~j pursuant to Paragraph 20.5(a) above shall be a Default by
Tenant.
21. Holding Over. This Lease shall terminate without further notice at the expiration of the Lease Term.
It is the desire of Landlord either to enter into a new lease with Tenant for the Premises prior to the expiration of the
Lease Term, or to have Tenant vacate the Premises upon expiration of the Lease Term pursuant to Pazagraph 35 below.
Therefore, any holding over by Tenant after Lease Termination shall not constitute a renewal or extension of the Lease
Term, nor give Tenant any rights in or to the Premises except as expressly provided in this Lease. Any holding over after
Lease Termination with the consent of Landlord shall be construed to be a tenancy from month to month, at two hundred
percent (200%) of the monthly Rent for the month preceding Lease Termination in addition to all Additional Rent
payable hereunder, and shall otherwise be on the terms and conditions herein specified insofar as applicable. If Tenant
remains in possession of the Premises after Lease Termination without Landlord's consent, Tenant shall indemnify,
defend and hold Landlord harmless from and against any loss, damage, expense, claim or liability resulting from Tenant's
failure to surrender the Premises, including without limitation, any claims made by any succeeding tenant based on delay
in the availability of the Premises.
22. Notices. Any notice required or desired to be given under this Lease shall be in writing, and all
notices shall be given by personal delivery or mailing. All notices personally given on Tenant may be delivered to any
person apparently in charge at the Premises, on any corporate officer or agent of Tenant if Tenant is a corporation, or on
any one signatory pazty if more than one party signs this Lease on behalf of Tenant; any notice so given shall be binding
upon all signatory parties as if served upon each such party personally. Any notice given pursuant to this Paragraph 22
shall be deemed to have been given when personally delivered, or if mailed, when three (3) business days have elapsed
from the time when such notice was deposited in the United States mail, certified or registered mail and postage prepaid,
addressed to the party at the last address given for purposes of notice pursuant to the provisions of this Paragraph 22. At
the date of execution of this Lease, the addresses of Landlord and Tenant aze set forth in Paragraph 1.12 above.
23. Attorneys' Fees. In the event either pazty hereto shall bring any action or legal proceeding for
damages for an alleged breach of any provision of this Lease, t~~ recover Rentals, to enforce an indemnity, defense or hold
hazmless obligation, to terminate the tenancy of the Premise,, or to enforce, protect, interpret, or establish any term,
condition, or covenant of this Lease or right or remedy of either party, the prevailing pazty shall be entitled to recover, as
a part of such action or proceeding, reasonable attorneys' fees and court costs, including reasonable attorneys' fees and
costs for appeal, as may be fixed by the court or jury. Notwithstanding anything to the contrazy contained in this Lease,
"prevailing party" as used in this pazagraph shall include the party who dismisses an action for recovery hereunder in
exchange for sums allegedly due, performance of covenants allegedly breached or considerations substantially equal to
the relief sought in the action.
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24. Assignment, Sublettin ag nd Hypothecaticn.
24.1 In General. Tenant shall not ~/oluntazily sell, assign or transfer all or any part of Tenant's
interest in this Lease or in the Premises or any part thereof, sublease all or any pazt of the Premises, or permit all or any
pazt of the Premises to be used by any person or entity other than Tenant or Tenant's employees, except as specifically
provided in this Paragraph 24. Landlord acknowledges that the County of Santa Clara will be the operator of the City of
Cupertino Library and that this relationship is consistent with the provisions of the Lease.
24.2 Volunt Assignment and Sublettine.
(a) Notice to Landlord. Tenant shall, by written notice, advise Landlord of
Tenant's desire on a stated date (which date shall not be less than fifteen (15) days nor more than ninety (90) days after
the date of Tenant's notice) to assign this Lease or to sublet all or any part of the Premises for any pazt of the Lease Term.
Said notice shall state that the notice constitutes an offer to terminate the Lease or Tenant's interest in the portion of the
Premises specified pursuant to Paragraph 24.2(b) if the notice applies to a proposed assignment of the Lease or Tenant's
interest therein, a proposed sublease of all or any part of tt~e Premises. Tenant's notice shall state the name, legal
composition and address of the proposed assignee or subtena~lt, and Tenant shall provide the following information to
Landlord with said notice: a true and complete copy of the proposed assignment agreement or sublease; an audited
financial statement of the proposed assignee or subtenant prepared in accordance with generally accepted accounting
principles within one yeaz prior to the proposed effective date of the assignment or sublease; the nature of the proposed
assignee's or subtenant's business to be carried on in the Premises; the payments to be made or other consideration to be
given on account of the assignment or sublease; a current financial statement of Tenant; and such other pertinent
information as may be requested by Landlord, all in sufficient detail to enable Landlord to evaluate the proposed
assignment or sublease and the prospective assignee or subtenant. Tenant's notice shall not be deemed to have been
served or given until such time as Tenant has provided Landlord with all information reasonably requested by Landlord
pursuant to this Paragraph 24.2. Tenant shall immediately notify Landlord of any modification to the proposed terms of
such assignment or sublease. Tenant may withdraw its noticc; at any time prior to exercise by Landlord of Landlord's
right to terminate as described in Paragraph 24.2(b).
(b) Offer to Terminatf_. If Tenant notifies Landlord of its desire to assign this
Lease or any interest herein, to sublet all or any part of the Premises, Tenant's notice shall constitute an offer to terminate
this Lease or Tenant's interest in the portion of the Premises specified and Landlord shall have the right, to be exercised
by giving written notice to Tenant within fifteen (15) days alter receipt of Tenant's notice, to terminate the Lease (i)
entirely, in the event of a proposed assignment or a sublease;, as specified in Tenant's notice. For purposes of this
Pazagraph 24.2(b), (i) the terms of a proposed sublease shall include all options to extend or renew, and (ii) a proposed
sublease shall be deemed to be for the remainder of the Lease Term if the term of the proposed sublease will expire
within one yeaz prior to the end of the Lease Term. If Tenant's notice specifies all of the Premises and Landlord elects to
terminate, then this Lease shall terminate on the date stated in the notice given by Tenant pursuant to Paragraph 24.2(a),
subject to any obligations which have accrued and aze unfulfilled as of such date. If Tenant's notice specifies less than all
of the Premises and Landlord elects to terminate, this Lease shrill terminate on the date stated with respect to that portion
of the Premises, and the Rent and Tenant's percentage share of Common Area Charges shall be adjusted, based upon the
number of net leasable square feet retained by Tenant after the termination, compazed to the number of net leasable
square feet in the entire Premises excluding any areas of the Pr~:mises designated in the proposed sublease for ingress and
egress and common azeas, if any. The Lease as so amended shall continue thereafter in full force and effect. Landlord
and Tenant shall execute an amendment to this Lease specifying the new Premises, the adjusted Rent, and Tenant's
adjusted percentage shaze of Common Area Charges; provided, however, that failure by either party to execute such an
amendment shall not affect the validity of this Lease.
(c) Landlord's Conserd. If Landlord does not exercise its right to terminate
pursuant to Pazagraph 24.2(b) within fifteen (15) days after rc;ceipt of Tenant's notice or if a proposed sublease is not
subject to the provisions of Paragraph 24.2(b), Landlord shall not unreasonably withhold its consent to the proposed
assignment or subletting, on the terms and conditions specified in said notice. If Tenant's notice fails to state that it
constitutes an offer to terminate the Lease as may be required pursuant to Paragraph 24.2(a), such notice shall be deemed
insufficient for the purposes of this Paragraph 24.2, and Landlord may withhold its consent to the proposed assignment or
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August 20, 2002
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subletting in Landlord's absolute discretion. Without otherwi~;e limiting the criteria upon which Landlord may withhold
its consent to any proposed assignment or sublease, if Landlord withholds its consent where Tenant is in default at the
time of the giving of Tenant's notice or at any time thereafter, or where the net worth of the proposed assignee or
subtenant (according to generally accepted accounting principles) is less than the greater of (i) the net worth of Tenant
immediately prior to the assignment or sublease (ii) or the net worth of Tenant at the time this Lease is executed, such
withholding of consent shall be presumptively reasonable. Fifty percent (50%) of any and all rent paid by an assignee or
subtenant, including, but not limited to, any rent in excess of ttie Rentals to be paid under this Lease (prorated in the event
of a sublease of less than the entire Premises), after Tenant's deduction therefrom of all reasonable costs to effect the
assignment or subletting, including without limitation, brokerage commissions, attorneys' fees, and the cost of leasehold
improvements or alterations installed or redecorating performed by Tenant for the sublessee, shall be paid directly to
Landlord, as Additional Rent, at the time and place specified in this Lease. For the purposes of this Pazagraph 24, the
term "rent" shall include any consideration of any kind recerived, or to be received, by Tenant from an assignee or
subtenant, if such sums are related to Tenant's interest in this Lease or in the Premises, including, but not limited to key
money, bonus money, and payments (in excess of the fair tnazket value thereof) for Tenant's assets, fixtures, trade
fixtures, inventory, accounts, goodwill, equipment, furniture, general intangibles, and any capital stock or other equity
ownership interest of Tenant. Any assignment or subletting v~~ithout Landlord's consent shall be voidable at Landlord's
option, and shall constitute a Default by Tenant. Landlord's consent to any one assignment or sublease shall not
constitute a waiver of the provisions of this Pazagraph 24 as to any subsequent assignment or sublease nor a consent to
any subsequent assignment or sublease; further, Landlord's consent to an assignment or sublease shall not release Tenant
from Tenant's obligations under this Lease, and Tenant shall remain jointly and severally liable with the assignee or
subtenant.
(d) Assumption of Obli atg ions. In the event Landlord consents to any
assignment, such consent shall be conditioned upon the assignee expressly assuming and agreeing to be bound by each of
Tenant's covenants, agreements and obligations contained in this Lease, pursuant to a written assignment and assumption
agreement in a form reasonably approved by Landlord. Landlord's consent to any assignment or sublease shall be
evidenced by Landlord's signature on said assignment and as;~umption agreement or on said sublease or by a sepazate
written consent. In the event Landlord consents to a proposed assignment or sublease, such assignment or sublease shall
be valid and the assignee or subtenant shall have the right to take possession of the Premises only if an executed original
of the assignment or sublease is delivered to Landlord, and such document contains the same terms and conditions as
stated in Tenant's notice to Landlord given pursuant to Paragraph 24.2(a) above, except for any such modifications to
which Landlord has consented in writing. Furthermore, In the event of a Default by Tenant, as defined in Pazagraph I4
of the Master Lease, and specifically if Tenant is in bankruptcy and rejects the Lease, then the sublease shall remain in
effect as a direct lease between the Landlord and the subtenant. The direct relationship will begin immediately upon any
Default by Tenant that is not cured by Tenant in accordance with the Lease or Tenant's rejection of the Lease if Tenant is
in bankruptcy, without the necessity of an assignment or further documentation and that each party (Landlord and
subtenant) will honor and be bound by the terms and conditions of the sublease as a direct lease between them.
24.3 Collection of Rent. Tenant h~:reby irrevocably gives to and confers upon Landlord, as
security for Tenant's obligations under this Lease, the right, power and authority to collect all rents from any assignee or
subtenant of all or any part of the Premises as permitted by this Pazagraph 24, or otherwise, and Landlord, as assignee of
Tenant, or a receiver for Tenant appointed on Landlord's appli~~ation, may collect such rent and apply it towazd Tenant's
obligations under this Lease; provided, however, that until the occurrence of any Default by Tenant, subject to applicable
cure periods, or except as provided by the provisions of Pazagraph 24.2(c) above, Tenant shall have the right to collect
such rent. Upon the occurrence of any Default by Tenant, La~idlord may at any time without notice in Landlord's own
name sue for or otherwise collect such rent, including rent Fast due and unpaid, and apply the same, less costs and
expenses of operation and collection, including reasonable attorneys' fees, towazd Tenant's obligations under this Lease.
Landlord's collection of such rents shall not constitute an acceptance by Landlord of attornment by such subtenants. In
the event of a Default by Tenant, Landlord shall have all right:s provided by this Lease and by law, and Landlord may,
upon re-entry and taking possession of the Premises, eject all f~arties in possession or eject some and not others, or eject
none, as Landlord shall determine in Landlord's sole discretion.
24.4 Corporations and Paztnership,~. If Tenant is a partnership, any withdrawal or substitution
(whether voluntazy, involuntazy, or by operation of law and whether occurring at one time or over a period of time) of
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any partner(s) owning fifty percent (50%) or more (cumulatively) of the partnership, any assignment(s) of fifty percent
(50%) or more (cumulatively) of any interest in the capital or profits of the partnership, or the dissolution of the
partnership shall be deemed an assignment of this Lease requiring the prior written consent of Landlord. If Tenant is a
corporation, any dissolution, merger, consolidation or other reorganization of Tenant, any sale or transfer (or cumulative
sales or transfers) of the capital stock of Tenant in excess of fifty percent (50%), or any sale (or cumulative sales) of all of
the assets of Tenant shall be deemed an assignment of this Lease requiring the prior written consent of Landlord. Any
such withdrawal or substitution of partners or assignment of ar~y interest in or dissolution of a partnership tenant, and any
such sale of stock or assets of a corporate tenant without the prior written consent of Landlord shall be a Default by
Tenant hereunder. The foregoing notwithstanding, the sale or transfer of any or all of the capital stock of a corporation,
the capital stock of which is now or hereafter becomes publicl:~ traded, shall not be deemed an assignment of this Lease.
Notwithstanding anything to the contrary contained in this Lease, Tenant, without Landlord's prior written
consent (but with notice to Landlord), may sublet the Premise: or assign this Lease to (i) a subsidiary, affiliate, division
or corporation controlled by or under common control with 'Cenant; (ii) a successor corporation related to Tenant by
merger, consolidation, non-bankruptcy reorganization or government action; or (iii) a purchaser of substantially all of
Tenant's assets located at the Premises, provided that in either ~~f the latter two instances the successor or purchaser has a
net worth not less than the net worth of Tenant at the time that'Cenant executes this Lease (each, a "Permitted Assignee").
Notwithstanding that a Transfer is made to a Permitted Assigr..ee, Tenant shall not be released from any of its obligations
under this Lease and such Permitted Assignee shall be required to assume all of Tenant's obligations hereunder as a
condition to such transfer being permitted without Landlord's prior written consent.
24.5 Reasonable Provisions. Tenant expressly agrees that the provisions of this Paragraph 24
are not unreasonable standards or conditions for purposes of Section 1951.4(b)(2) of the California Civil Code, as
amended from time to time, under bankruptcy laws, or for an.y other purpose.
24.6 Professional Fees. Tenant shall pay, as Additional Rent, Landlord's actual costs
including but not limited to attorneys' fees, third party consultant fees, and Landlord's administrative fees for reviewing,
investigating, processing and/or documenting any requested assignment or sublease, whether or not Landlord's consent is
granted.
24.7 Involuntary Transfer. No interest of Tenant in this Lease shall be assignable
involuntarily or 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 assig~iment:
(a) If Tenant is or bec~~mes bankrupt or insolvent, makes an assignment for the
benefit of creditors, or a proceeding under any bankruptcy law is instituted in which Tenant is the bankrupt; or, if Tenant
is a partnership or consists of more than one person or entity, ii' 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;
(b) Levy of a writ of attachment or execution on this Lease;
(c) Appointment of a receiver with authority to take possession of the Premises in
any proceeding or action to which Tenant is a party; or
(d) Foreclosure of any lien affecting Tenant's interest in the Premises, which lien
was not consented to by Landlord pursuant to Paragraph 24.9.
An involuntary assignment shall constitute a Default by Tenant and Landlord shall have the right to terminate this Lease,
in which case this Lease shall not be treated as an asset of Tenant. In the event the Lease is not terminated, the provisions
of Paragraph 24.2(c) regarding rents paid by an assignee or subtenant shall apply. If a writ of attachment or execution is
levied on this Lease, or if any involuntary proceeding in bankrtptcy is brought against Tenant or a receiver is appointed,
Tenant shall have sixty (60) days in which to cause the attachment or execution to be removed, the involuntary
proceeding dismissed, or the receiver removed.
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August 20, 2002
27
24.8 Hvpothecation. Tenant shall not hypothecate, mortgage or encumber Tenant's interest in
this Lease or in the Premises or otherwise use this Lease as a security device in any manner without the consent of
Landlord, which consent Landlord may withhold in its sole and absolute discretion. Consent by Landlord to any such
hypothecation or creation of a lien or mortgage shall not constitute consent to an assignment or other transfer of this
Lease following foreclosure of any permitted lien or mortgage.
24.9 Binding on Successors. The provisions of this Paragraph 24 expressly apply to all heirs,
successors, sublessees, assignees and transferees of Tenant.
25. Successors. Subject to the provisions of Paragraph 24 above and Paragraph 30.2(a) below, the
covenants, conditions, and agreements contained in this Lease shall be binding on the parties hereto and on their
respective heirs, successors and assigns.
26. Landlord Default: Mortgagee Protection. Landlord shall not be in default under this Lease unless
Tenant shall have given Landlord written notice of the breach and, within thirty (30) days after notice, Landlord has not
cured the breach or, if the breach is such that it cannot reasonably be cured under the circumstances within thirty (30)
days, has not commenced diligently to prosecute the cure to completion. Any money judgment obtained by Tenant based
upon Landlord's breach of this Lease shall be satisfied only out of the proceeds of the sale or disposition of Landlord's
interest in the Premises (whether by Landlord or by execution of judgment). In the event of any default on the part of
Landlord under this Lease, Tenant shall give notice by registered or certified mail to any beneficiary of a deed of trust or
any mortgagee of a mortgage affecting the Premises, Building or Land whose address shall have been furnished to
Tenant, and shall offer such beneficiary or mortgagee a reas~~nable opportunity to cure the default, including time to
obtain possession of the Premises by power of sale or judicial oreclosure, if such should prove necessary to effect a cure.
27. Exhibits. All exhibits attached to this Lease shall be deemed to be incorporated herein by the
individual reference to each such exhibit, and all such exhibits shall be deemed to be a part of this Lease as though set
forth in full in the body of the Lease.
28. Surrender of Lease Not Mereer. The voluntary or other surrender of this Lease by Tenant, or a
mutual cancellation thereof, shall not work a merger and shall, at the option of Landlord, terminate all or any existing
subleases or subtenants, or may, at the option of Landlord, operate as an assignment to Landlord of any or all such
subleases or subtenants.
29. Waiver. The waiver by Landlord of any breach of any term, covenant or condition herein contained
(or the acceptance by Landlord of any performance by Tenant after the time the same shall become due) shall not be
deemed to be a waiver of such term, covenant or condition or any subsequent breach thereof or of any other term,
covenant or condition herein contained, unless otherwise expressly agreed to by Landlord in writing. The acceptance by
Landlord of any sum less than that which is required to be paid by Tenant shall be deemed to have been received only on
account of the obligation for which it is paid (or for which it is allocated by Landlord, in Landlord's reasonable discretion,
if Tenant does not designate the obligation as to which the p;~yment should be credited), and shall not be deemed an
accord and satisfaction notwithstanding any provisions to the contrary written on any check or contained in any letter of
transmittal. The acceptance by Landlord of any sum tendered Icy a purported assignee or transferee of Tenant shall not be
deemed a consent by Landlord to any assignment or transfer of Tenant's interest herein. No custom or practice which
may arise between the parties hereto in the administration of the terms of this Lease shall be construed as a waiver or
diminution of Landlord's right to demand performance by Tenant in strict accordance with the terms of this Lease.
30. General.
30.1 Captions and Headin¢s. The captions and paragraph headings used in this Lease are for
convenience of reference only. They shall not be construed to limit or extend the meaning of any part of this Lease, and
shall not be deemed relevant in resolving any question of interpretation or construction of any paragraph of this Lease.
30.2 Definitions.
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August 20, 2002 ~.
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(a) Landlord. The team Landlord as used in this Lease, so far as the covenants or
obligations on the part of Landlord are concerned, shall be limited to mean and include only the owner at the time in
question of the fee title to the Premises. In the event of any tr~cnsfer(s) of such interest, the Landlord herein named (and
in case of any subsequent transfers or conveyances, the then l;rantor) shall have no further liability under this Lease to
Tenant except as to matters of liability which have accrued and aze unsatisfied as of the date of such transfer, it being
intended that the covenants and obligations contained in this Lease on the part of Landlord shall be binding on Landlord
and its successors and assigns only during and in respect of their respective periods of ownership of the fee; provided that
any funds in the possession of Landlord or the then grantor arcd as to which Tenant has an interest, less any deductions
permitted by law or this Lease, shall be turned over to the grantee. The covenants and obligations contained in this Lease
on the pazt of Landlord shall, subject to the provisions of this Paragraph 30.2(a), be binding upon each Landlord and such
Landlord's heirs, personal representatives, successors and assigns only during its respective period of ownership. Except
as provided in this Pazagraph 30.2(a), this Lease shall not lie affected by any transfer of Landlord's interest in the
Premises, and Tenant shall attorn to any transferee of Landlord provided that all of Landlord's obligations hereunder are
assumed in writing by such transferee.
(b) Agents. For purF~oses of this Lease and without otherwise affecting the
definition of the word "agent" or the meaning of an "agency," the term "agents" shall be deemed to include the agents,
employees, officers, directors, servants, invitees, contractors, successors, representatives, subcontractors, guests,
customers, suppliers, partners, affiliated companies, and any other person or entity related in any way to the respective
pazty, Tenant or Landlord.
(c) Interpretation of Terms. The words "Landlord" and "Tenant" as used herein
shall include the plural as well as the singular. Words in the neuter gender include the masculine and feminine and words
in the masculine or feminine gender include the neuter.
30.3 Copies. Any executed copy of this Lease shall be deemed an original for all purposes.
30.4 Time of Essence. Time is of the essence as to each and every provision in this Lease
requiring performance within a specified time.
30.5 Severabilitv. In case any one or more of the provisions contained herein shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall
not affect any other provision of this Lease, but this Lease shall be construed as if such invalid, illegal or unenforceable
provision had not been contained herein. However, if Tenant'; obligation to pay the Rentals is determined to be invalid
or unenforceable, this Lease at the option of Landlord shall terminate.
30.6 Governing Law. This Lease shall be construed and enforced in accordance with the laws
of the State of California.
30.7 Joint and Several Liability. If Tenant is more than one person or entity, each such person
or entity shall be jointly and severally liable for the obligations of Tenant hereunder. If Tenant is a husband and wife, the
obligations hereunder shall extend to their sole and separate I~roperty as well as community property.
30.8 Construction of Lease Provi;~ions. Although printed provisions of this Lease were
prepazed by Landlord, this Lease shall not be construed either i-or or against Tenant or Landlord, but shall be construed in
accordance with the general tenor of the language to reach a fair and equitable result.
30.9 Conditions. All agreements ley Tenant contained in this Lease, whether expressed as
covenants or conditions, shall be construed to be both covenants and conditions, conferring upon Landlord, in the event
of a breach thereof, the right to terminate this Lease.
30.10 Tenant's Financial Statements. Tenant hereby warrants that all financial statements
delivered by Tenant to Landlord aze true, correct, and complete, and prepazed in accordance with generally accepted
accounting principles. Tenant acknowledges and agrees that Landlord is relying on such financial statements in accepting
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this Lease, and that a breach of Tenant's warranty as to such t.-financial statements shall constitute a Default by Tenant.
Notwithstanding anything to the contrary contained in this Lease, Landlord shall keep confidential all such financial
information received from Tenant, except that Landlord may provide such financial information to Landlord's lenders or
prospective lenders with respect to the Premises.
30.11 Withholding of Landlord's Consent. Notwithstanding any other provision of this Lease
where Tenant is required to obtain the consent (whether written or oral) of Landlord to do any act, or to refrain from the
performance of any act, Tenant agrees that if Tenant is in default with respect to any term, condition, covenant or
provision of this Lease, then Landlord shall be deemed to have acted reasonably in withholding its consent if said consent
is, in fact, withheld.
31. Siens. Tenant shall not place or permit to be placed any sign or decoration on the Land or the
exterior of the Building or that would be visible from the exterior of the Building or Premises, without the prior written
consent of Landlord, which consent shall not be unreasonably withheld or delayed. Tenant may place "for lease" signs in
connection with efforts to assign or sublease the Premises, subject to the prior written consent of Landlord, which consent
shall not be unreasonably withheld or delayed; provided that all such signs shall be removed not later than the one
hundred eightieth (180th) day prior to Lease Termination. In rio event shall any such sign revolve, rotate, move or create
the illusion of revolving, rotating or moving or be internally illuminated and there shall be no exterior spotlighting or
other illumination on any such sign. Tenant, upon written noti~;e by Landlord, shall immediately remove any of Tenant's
signs or decorations that are visible from the exterior of the Building or Premises or that Tenant has placed or permitted
to be placed on the Land or the exterior of the Building without the prior written consent of Landlord, or which remain
beyond the one hundred eightieth (180th) day prior to Lease Termination. If Tenant fails to so remove such sign or
decoration within five (5) days after Landlord's written notice, Landlord may enter the Premises and remove such sign or
decoration and Tenant shall pay Landlord, as Additional Rent upon demand, the cost of such removal. All signs placed
on the Premises, Building or Land by Tenant shall comply with all recorded documents affecting the Premises, including
but not limited to any Declaration of Conditions, Covenants and Restrictions; the sign criteria attached hereto as
Exhibit E if applicable (as the same may be amended from tinte to time); and applicable statutes, ordinances, rules and
regulations of governmental agencies having jurisdiction thereof. At Landlord's option, Tenant shall at Lease
Termination remove any sign which it has placed on the Premises, Land or the Building, and shall, at its sole cost, repair
any damage caused by the installation or removal of such sigh.
32. Landlord as Party Defendant. If, by reas~~n of any act or omission by Tenant or Tenant's agents,
Landlord is made a pazty defendant concerning this Lease, or any portion of the Project, Tenant shall indemnify Landlord
against all liability actually incurred (or threatened against) Landlord as a party defendant, including all damages, costs
and reasonable attorneys' fees.
33. Landlord Not a Trustee. Landlord shall not be deemed to be a trustee of any funds paid to Landlord
by Tenant (or held by Landlord for Tenant) pursuant to this Lease, including without limitation the Security Deposit.
Landlord shall not be required to keep any such funds sepazare from Landlord's general funds or segregated from any
funds paid to Landlord by (or held by Landlord for) other tena~its of the Building. Any funds held by Landlord pursuant
to this Lease shall not bear interest.
34. Interest. Any payment due from Tenant to Landlord, except for Rent received by Landlord within
thirty (30) days after the same is due, shall beaz interest from the date due until paid, at an annual rate equal to the greater
of: ten percent (10%); or five percent (5%) plus the rate established by the Federal Reserve Bank of San Francisco, as of
the twenty-fifth (25th) day of the month immediately preceding the due date, on advances to member banks under
Sections 13 and 13(a) of the Federal Reserve Act, as now in effect or hereafter from time to time amended. In addition,
Tenant shall pay all costs and reasonable attorneys' fees incurred by Landlord in the collection of such amounts.
35. Surrender of Premises. On the last day of the Lease Term or upon the sooner termination of this
Lease, Tenant shall, to the reasonable satisfaction of Landlord, surrender the Premises to Landlord in good condition
(reasonable wear and teaz excepted) with all originally painted interior walls washed, or re-painted if mazked or damaged,
and other interior walls cleaned and repaired or replaced, all carpets cleaned and in good condition, the air conditioning,
ventilating and heating equipment inspected, serviced and repaired by a reputable and licensed service firm (unless
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August 20, 2002
30 ~
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Landlord has elected to maintain heating and air conditioning ;systems pursuant to Paragraph 10.1 above), and all floors
cleaned and waxed. Tenant shall remove all of Tenant's personal property and trade fixtures from the Premises, and all
property not so removed shall be deemed abandoned by Tenant. Furthermore, Tenant shall immediately repair all
damage to the Project caused by any such removal. If the Premises are not so surrendered at Lease Termination, Tenant
shall indemnify, defend and hold Landlord harmless from acid against any loss, damage, expense, claim or liability
resulting from delay by Tenant in so surrendering the Premises including, without limitation, any claims made by any
succeeding tenant or losses to Landlord due to lost opportuniries to lease to succeeding tenants.
36. Labor Disputes. In the event Tenant shall in any manner be involved in or be the object of a labor
dispute which subjects the Premises or any part of the Project to any picketing, work stoppage or other concerted activity
which in the reasonable opinion of Landlord is detrimental to the operation of the Project or its tenants, Landlord shall
have the right to require Tenant, at Tenant's own expense and within a reasonable period of time, to use Tenant's best
efforts to either resolve such labor dispute or terminate or control any such picketing, work stoppage or other concerted
activity to the extent necessary to eliminate any interference v~~ith the operation of the Project. To the extent such labor
dispute interferes with the performance of Landlord's duties hereunder, Landlord shall be excused from the performance
of such duties. Failure by Tenant to use its best efforts to so resolve such dispute or terminate or control such picketing,
work stoppage or other concerted activity within a reasonable period of time shall constitute a Default by Tenant
hereunder. Nothing contained in this Paragraph 36 shall be ~;onstrued as placing Landlord in an employer/employee
relationship with any of Tenant's employees or with any other employees who may be involved in such labor dispute.
37. No Partnership or Joint Venture. Nothing in this Lease shall be construed as creating a partnership or
joint venture between Landlord, Tenant, or any other party, or cause Landlord to be responsible for the debts or
obligations of Tenant or any other party.
38. Entire Agreement. Any agreements, warranties, or representations not expressly contained herein
shall in no way bind either Landlord or Tenant, and Landlor~j and Tenant expressly waive all claims for damages by
reason of any statement, representation, warranty, promise or agreement, if any, not contained in this Lease. This Lease
supersedes and cancels any and all previous negotiations, arrangements, brochures, agreements and understandings,
whether written or oral, between Landlord and its agents and Tenant and its agents with respect to the Project or this
Lease. This Lease constitutes the entire agreement between th~~ parties hereto and no addition to, or modification of, any
term or provision of this Lease shall be effective until and unless set forth in a written instrument signed by both Landlord
and Tenant.
39. Submission of Lease. Submission of this instrument for Tenant's examination or execution does not
constitute a reservation of space nor an option to lease. This instrument shall not be effective until executed by both
Landlord and Tenant. Execution of this Lease by Tenant shall constitute an offer by Tenant to lease the Premises, which
offer shall be deemed accepted by Landlord when this Lease is executed by Landlord and delivered to Tenant.
40. Ouiet Enjoy. Landlord covenants anti agrees with Tenant that upon Tenant paying Rentals and
performing its covenants and conditions under the Lease, Tenant shall and may peaceably and quietly have, hold and
enjoy the Premises for the Lease Term, subject, however, to the terms of this Lease and of any mortgages or deeds of
trust affecting the Premises, and the rights reserved by Landlord hereunder. Any purchaser upon any foreclosure or
exercise of the power of sale under any mortgage or deed of trust made by Landlord and covering the Premises, Building
or Land to whom Tenant attorns pursuant to Paragraph 20.4 ~ibove shall be bound by the terms of this Paragraph 40.
41. Buildin Pg lans. Tenant acknowledges that any plan of the Project which may have been displayed or
furnished to the Tenant or which may be part of Exhibit A or Exhibit B is tentative; Landlord may change the exterior of the
Project buildings and the shape, size, location, number, and extent of Project buildings or improvements to the Project shown
on any such plan and eliminate or add any improvements to the buildings in Landlord's sole discretion
42. Authority. The undersigned parties hereby warrant that they have proper authority and are
empowered to execute this Lease on behalf of the Landlord and Tenant, respectively. If Tenant is a corporation (or
partnership), each individual executing this Lease on behalf of said corporation (or partnership) represents and warrants
that he is duly authorized to execute and deliver this Lease ~~n behalf of said corporation in accordance with a duly
City of Cupertino Library
August 20, 2002 ' ~' ~
31
adopted resolution of the Boazd of Directors of said corporati~~n or in accordance with the by-laws of said corporation (or
on behalf of said paztnership in accordance with the partnership agreement of such paztnership), and that this Lease is
binding upon said corporation (or partnership) in accordance with its terms. If Tenant is a corporation, and this Lease is
not executed by two corporate officers, Tenant shall, upon execution of this Lease, deliver to Landlord evidence of the
authority of the individual executing this Lease on behalf of Tenant to execute this Lease on behalf of Tenant. In the
event Tenant should fail to deliver such evidence to Landlord upon execution of this Lease, Landlord shall not be deemed
to have waived its right to require delivery of such evidena:, and at any time during the Lease Term Landlord may
request Tenant to deliver the same, and Tenant agrees it shall thereafter promptly deliver such evidence to Landlord. If
Tenant is a corporation, Tenant warrants that:
(a) Tenant is a valid and existing; corporation;
(b) Tenant is qualified to do business in California;
(c) All fees and all franchise anti corporate taxes are paid to date, and will be paid when due;
(d) All required forms and reports will be filed when due; and
(e) The signers of this Lease are properly authorized to execute this Lease.
T ~ r-~.~~~,v~ ~~.~~s~, -,vim y ~/aa ~.
43. Cancellat' n. Upon signing a Lease, Tenant shall deposit with the Landlord the first month's rent ~ Z ~ 9 C)
and the security deposit al g with one months' worth of operating expenses totaling '''"~~'~~ ~"~°° 'r'"^~~~ ~ F' ~'y~
.Tenant shall have the right to cancel the Lease at any time "~i
prior to occupancy and the City's planned bond sale schedule~j for October 16, 2002. Should Tenant cancel the Lease,
Landlord shall retain the entire combined deposit ofy--ti
without offset and the parties shall hav no further obligations to each other. Otherwise after
October 16, 2002, the Lease shall be in full force and effect '-7~r.•c~y tu~a,~~"~louaa~•-~~ru.e ~sS • .~~-~.v ~y
C A~//bv ,0~,!~stis- ~~ 32, 909 00) ~L~~~, "' /
44. Addendum. Paragraphs _0_ through _ 0_ are added hereto and made a art of this Leas~e.'C
P
IN WITNESS WHEREOF, the pazties have executed this Lease effective as of the date set forth below.
LANDLORD:
Devcon Associates XVI
a California General PaztnershipQ
BY ~ • ~d/k~.,..
Title ~Vl.~'r
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Date ~7 ~ ~ L~ /C~
TENAPdT
City Cupertino
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Title ~~ ~ L ~ ~t ~"~'v/""~C~+
Date L~~p~GJ,~d2.
By.
Date
City of Cupertino Library
August 20, 2002 32
b
/..y
Date ~ - 'L .S -_ C~ Z-
EXHIF3ITS
A Site Plan Paragraph 1.4 (S}iows Building crosshatched and the Land outlined in red
pursuant to Paragraph 2.1)
B Floor Plan Pazagraph 2.1 (Shows Premises crosshatched)
C Improvements Pazagraph 2.2
D Commencement Pazagraph 3.1
Date Letter
E Sign Criteria Paragraph 31
F Lease Termination Paragraph 35
EXHIBIT A
EXHIBIT B
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EXHIBIT "C"
Improvements
Tenant is accepting Premises in an "AS IS" condition except that Landlord shall construct such
improvement as reasonable necessary to demise Tenant's space from the remainder of the Building as
shown on attached Exhibit "C 1".
The City of Cupertino Library
August 20, 2002
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EXHIBIT "D"
Commencement Date Letter
Date
Re:
Dear
In regard to that certain Lease dated by and between
as Landlord, and a
as Tenant, this letter shall confirm our understandings and agreements relative to the Lease
commencement date.
Notwithstanding anything to the contrary contained in the Lease it is agreed that the Lease commenced on
,and shall terminate on
Please acknowledge receipt of this letter and your Agreement rind Approval of the foregoing, by signing below and return
one copy of this letter to our office.
Very truly yours,
The City of Cupertino Library
August 20, 2002
~~'~ ,~~
EXHIBIT "E"
Sign Criteria
Tenant shall be allowed their pro rata shad; of signage on one sign in front of the property
consistent with the other tenants in the project and other signage on the Premises subject to
approval of the City of Cupertino and the Landlord, which shall not be unreasonably withheld.
The City of Cupertino Library
August 20, 2002
EXHIBIT "F"
LEASE TERMINATION AGREEMENT
Notwithstanding anything to the contrary contained in this Lease, Tenant understands and agrees to the following Lease
Termination conditions.
Tenant agrees to provide written notice to Landlord no less than ninety (90) nor more than one hundred twenty (120)
days prior to the expiration of the Lease Term, requesting Landlord to inform Tenant whether or not Landlord desires to
have any of such Alterations by Tenant removed at Lease Termination. Following receipt of such notice, Landlord may
elect to have all or a portion of such Alterations removed from the Premises at Lease Termination, and Tenant shall, at
its sole cost and expense, remove at Lease Termination such Alterations designated by Landlord for removal and repair
all damage to the Premises and Common Area arising from such removal. In addition, no less than thirty (30) days prior
to the expiration of the Lease Term, Tenant agrees to provide written notice to Landlord to schedule and conduct awalk-
through inspection of the Premises to insure that the agreed up~~n restoration is in process and including all Tenant work
required to return the Premises in good condition defined in Section 35.
In the event Tenant fails to request Landlord's decision, or fail; to notify Landlord regarding the walk-through
inspection, or fails to remove any such Alternations designated by Landlord for removal at Lease Termination, then
Landlord may remove any Alterations made to the Premises by Tenant and repair all damage to the Premises and
Common Area arising from such removal, and may recover frcm Tenant all reasonable costs and expense incurred
thereby, including a holding over rate defined in Section 20 of the Lease Agreement for a period not to exceed ninety
(90) days. In addition to all other costs and expenses Tenant is obligated to pay, Tenant shall also pay the holding over
rate until Landlord's completion of the removal of Alterations ;ind repair of all damage to the Premises and Common
Area arising from such removal, which shall be prorated on thi:Ry (30) days per month. Tenant's failure to surrender the
Premises to Landlord in good condition on the last day of the Lease Term or upon sooner termination of this Lease, shall
also be subject to the holding over rate defined in Section 20.
Tenant's obligation to pay such costs and expenses to Landlord shall survive Lease Termination. Unless Landlord elects
to have Tenant remove (or, upon Tenant's failure to obtain Landlord's decision, Landlord removes) any such
Alterations, then all such Alterations shall become the property of Landlord upon Lease Termination (without any
payment therefore) and remain upon and be surrendered with the Premises at Lease Termination. All other property not
removed by Tenant at Lease Termination shall be deemed abandoned by Tenant and shall become the property of
Landlord (without any payment therefore).
The City of Cupertino Library
August 20, 2002