Exhibit 10.9
STANDARD OFFICE/MULTI-TENANT LEASE –
NNN
by and between
GRANITE CREEK BUSINESS CENTER
(“Landlord”)
and
VirnetX, INC.
(“Tenant”)
For the approximately 995 sq. ft. premises at
5615 Scotts Valley Drive, Suite 110, Scotts Valley, California
TABLE OF CONTENTS
Page
1.
PARTIES
1
2.
PREMISES
1
3.
DEFINITION
1
A.
Alterations
1
B.
Building
1
C.
Commencement Date
1
D.
Common Area
1
E.
HVAC
1
F.
Interest Rate
1
G.
Landlord’s Agents
1
H.
Monthly Rent
1
I.
Outside Area
1
J.
Project
2
K.
Real Property Taxes
2
L.
Rent
2
M.
Security Deposit
2
N.
Sublet
2
O.
Subrent
2
P.
Subtenant
2
Q.
Tenant Improvements
2
R.
Tenant Improvements Allowance
2
S.
Tenant’s Percentage
2
T.
Tenant’s Personal Property
3
U.
Term
3
V.
Consent
3
4.
LEASE TERM
3
A.
Term
3
B.
Early Entry
3
5.
RENT
3
A.
Monthly Rent
3
B.
Additional Rent
4
6.
LATE PAYMENT CHARGES
4
7.
SECURITY DEPOSIT
4
8.
HOLDING OVER
4
9.
TENANT IMPROVEMENTS
5
10.
CONDITION OF PREMISES
5
11.
USE OF THE PREMISES
5
A.
Tenant’s Use
5
B.
Compliance
5
12.
QUIET ENJOYMENT
6
13.
ALTERATIONS
6
14.
SURRENDER OF THE PREMISES
6
15.
REAL PROPERTY TAXES
7
A.
Payment by Tenant
7
B.
Taxes on Tenant Improvements and Personal Property
7
C.
Proration
8
16.
UTILITIES AND SERVICES
8
17.
REPAIR AND MAINTENANCE
8
A.
Landlord’s Obligations
8
B.
Tenant’s Obligations
9
C.
Tenant to Pay Expenses
9
D.
Monthly Payments
9
E.
Compliance with Governmental Regulations
10
18.
LIENS
10
19.
LANDLORD’S RIGHT TO ENTER THE PREMISES
10
20.
SIGNS
10
21.
INSURANCE
11
A.
Indemnification
11
B.
Tenant’s Insurance
11
C.
Premises Insurance
11
D.
Increased Coverage
12
E.
Co-Insurer
12
F.
Insurance Requirements
12
G.
Landlord’s Disclaimer
12
22.
WAIVER OF SUBROGATION
12
23.
DAMAGE OR DESTRUCTION
13
A.
Landlord’s Obligation to Rebuild
13
B.
Right to Terminate
13
C.
Limited Obligation to Repair
13
D.
Abatement of Rent
14
E.
Damage Near End of Term
14
24.
CONDEMNATION
14
25.
ASSIGNMENT AND SUBLETTING
15
A.
Landlord’s Consent
15
B.
Information to be Furnished
15
C.
Landlord’s Alternatives
15
D.
Exempt Sublets
15
26.
DEFAULT
15
A.
Tenant’s Default
15
B.
Remedies
16
C.
Landlord’s Default
17
27.
SUBORDINATION
17
28.
ESTOPPEL CERTIFICATES
18
29.
TRANSFER OF THE BUILDING OR THE PROJECT BY LANDLORD
19
30.
LANDLORD’S RIGHT TO PERFORM TENANT’S COVENANTS
19
31.
TENANT’S REMEDY
19
32.
MORTGAGEE PROTECTION
19
33.
BROKERS
19
34.
MODIFICATIONS FOR LENDER
19
35.
PARKING
20
36.
GENERAL
20
A.
Notices
20
B.
Attorneys’ Fees
20
C.
Acceptance
20
D.
Captions
20
E.
Executed Copy
20
F.
Time
20
G.
Separability
20
H.
Choice of Law
21
I.
Gender; Singular, Plural
21
J.
Binding Effect
21
K.
Waiver
21
L.
Entire Agreement
21
M.
Authority
21
N.
Exhibits
21
O.
Lease Summary
21
Exhibits
24
LEASE AGREEMENT
1.
Parties . THIS LEASE (the
“Lease”), dated March 15, 2006 is entered into by
and between Granite Creek Business Center, a California general
partnership (“Landlord”), whose address is c/o
Toeniskoetter & Breeding, Inc., Development, 1960 The
Alameda, San Jose, CA 95126 and VirnetX Inc., a Delaware
Corporation (“Tenant”), whose address is
157 Provincetown Court, Aptos, California 95003.
2.
Premises . Landlord hereby
leases to Tenant and Tenant hereby leases from Landlord those
certain premises consisting of approximately nine hundred
ninety-five (995) rentable square feet, as shown in EXHIBIT A
(the “Premises”) in that certain building, commonly
known as 5615 Scotts Valley Drive (the “Building”),
as further defined in Paragraph 3.B., in the City of Scotts
Valley (the “City”), County of Santa Cruz, (the
“County”), California, together with a right in
common to the Common Area as defined in Paragraph 3.D., and a
right in common to the Outside Area, as defined in Paragraph
3.1. Tenant’s right to use the Common Area and
Outside Area shall be a right in common with other tenants of
the Building.
3.
Definition . The following
terms shall have the following meanings in this Lease:
A.
Alterations . Any alterations,
additions or improvements made in, on or about the Building or
the Premises after the Commencement Date.
B.
Building . That certain building on
the Project consisting of approximately thirty-two thousand
(32,000) rentable square feet.
C.
Commencement Date . The
Commencement Date of this Lease shall be the first day of
the Term determined in accordance with Paragraph 4.A.
D.
Common Area . All areas and
facilities within the Building provided and designated by
Landlord for the general use and convenience of Tenant and other
tenants and occupants of any part of the Building, subject to
the reasonable rules and regulations and changes therein from
time to time promulgated by Landlord governing the use of the
Common Area.
E.
HVAC . Heating, ventilating and air
conditioning.
F.
Interest Rate . Twelve percent
(12%) per annum, however, in no event to exceed the maximum rate
of interest permitted by law.
G.
Landlord’s Agents .
Landlord’s authorized agents, partners,
subsidiaries, directors, officers, and employees.
H.
Monthly Rent . The rent payable
pursuant to Paragraph 5.A., as adjusted from time to time
pursuant to the terms of this Lease.
I.
Outside Area . All areas and
facilities within the Project, exclusive of the interior of the
Building and the Adjacent Buildings, provided and designated by
Landlord for the general use and convenience of Tenant and other
tenants and occupants of the Project, subject to the reasonable
rules and regulations and changes therein from time to time
promulgated by Landlord governing the use of the Outside
Area.
J.
Project . That certain real
property described in EXHIBIT B consisting of approximately 5.35
acres, upon which are located the Building, together with two
(2) buildings of approximately fifty-eight thousand (58,000)
total rentable square feet (the “Adjacent
Buildings”).
K.
Real Property Taxes . Any form of
assessment, property tax, fee, rent tax, or penalty (if a result
of Tenant’s delinquency), imposed by any authority having
the direct or indirect power to tax, or by any city, county,
state or federal government or any improvement or other district
or division thereof, whether such tax is: (i) determined by the
area of the Project or any part thereof or the rent and other
sums payable hereunder by Tenant or by other tenants;
(ii) upon any legal or equitable interest of Landlord in
the Project or the Premises or any part thereof; (iii) upon this
transaction or any document to which Tenant is a party creating
or transferring any interest in the Project; (iv) levied or
assessed in lieu of, in substitution for, or in addition to,
existing or additional taxes against the Project whether or not
now customary or within the contemplation of the parties; or (v)
surcharged against the parking area.
L.
Rent . Monthly Rent plus the
Additional Rent defined in Paragraph 5.B.
M.
Security Deposit . That amount paid
by Tenant pursuant to Paragraph 7.
N.
Sublet . Any transfer, sublet,
assignment, license or concession agreement, change of
ownership, mortgage, or hypothecation of this Lease or the
Tenant’s interest in the Lease or in and to all or a
portion of the Premises.
O.
Subrent . Any consideration of any
kind received, or to be received, by Tenant from a subtenant if
such sums are related to Tenant’s interest in this Lease
or in the Premises, including, but not limited to, bonus money
and payments (in excess of book value) for Tenant’s
assets.
P.
Subtenant . The person or entity
with whom a Sublet agreement is proposed to be or is made.
Q.
Tenant Improvements . Those certain
improvements to the Premises to be constructed by Landlord
pursuant to Paragraph 9.
R.
Tenant Improvements Allowance .
That allowance to be provided by Landlord for construction
of the Tenant Improvements.
S.
Tenant’s Percentage .
(i)
Tenant’s Building Percentage .
The percentage of the area of the Premises to the total
area of the Building. Tenant’s Building Percentage
is agreed to be three and 11/100 percent (3.11%) for the
purpose of this Lease.
(ii)
Tenant’s Project Percentage .
The percentage of the area of the Premises to the total
area of all of the buildings on the Project.
Tenant’s Project Percentage is agreed to be one and
11/100 percent (1.11%) for the purpose of this Lease.
T.
Tenant’s Personal Property .
Tenant’s trade fixtures, furniture, equipment and
other personal property in the Premises.
U.
Term . The term of this Lease set
forth in Paragraph 4.A., as it may be extended hereunder
pursuant to any options to extend granted herein.
V.
Consent . Where consent is required
herein by either party, such consent shall not be unreasonably
withheld or delayed.
4.
Lease Term .
A.
Term . The Term of this Lease shall
be twelve (12) months, commencing April 1, 2006 (the
“Commencement Date”) and ending March 31, 2007,
subject to any sooner termination of this Lease pursuant to the
terms hereof. Tenant agrees that if Landlord, for any
reason whatsoever, is unable to deliver possession of the
Premises by April 1, 2006, Landlord shall not be liable to
Tenant for any loss or damage therefrom, nor shall this Lease be
void or voidable. In such event, the Commencement Date,
termination date and all other dates of this Lease shall be
extended to conform to the date of Landlord’s tender of
possession of the Premises to Tenant and Tenant shall not be
obligated to pay Monthly Rent or other sums due Landlord
hereunder until possession of the Premises is tendered to
Tenant.
B.
Early Entry . If Tenant is
permitted to enter the Premises prior to the Commencement Date
for the purpose of fixturing or any other purpose permitted by
Landlord, such early entry shall be at Tenant’s sole risk
and subject to all the terms and provisions hereof, except for
the payment of Rent, which shall commence on the Commencement
Date. Landlord shall have the right to impose such
additional conditions on Tenant’s early entry as Landlord
shall deem appropriate, and shall further have the right to
require that Tenant execute an early entry agreement containing
such conditions prior to Tenant’s early entry.
5.
Rent .
A.
Monthly Rent . Tenant shall pay to
Landlord, in lawful money of the United States, for each calendar
month of the Term, net Monthly Rent in advance, on the first day of
each calendar month, without abatement, deduction, claim, offset,
prior notice or demand in accordance with the schedule set forth
below. Additionally, Tenant shall pay, as and with the net
Monthly Rent, Tenant’s Building Percentage of the estimated
monthly Common Area Expenses and Tenant’s Project Percentage
of the estimated monthly Outside Area Expenses, as set forth in
Paragraph 17.C., and Tenant’s Building Percentage of the
monthly cost of insurance premiums required pursuant to Paragraph
21.C., as adjusted from time to time hereunder. Tenant shall
deposit with Landlord upon execution of this Lease One Thousand One
Hundred Forty-Four and 25/100 Dollars ($1,144.25) to be applied
toward the net Monthly Rent due for the first month of the
Term.
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Months of Term
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Net Monthly Rent
|
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April 1, 2006 - May 31, 2006
|
$ 0.00 *
|
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June 1, 2006 - October 31, 2006
|
$1,144.25/month
|
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November 1, 2006 - March 31, 2007
|
$1,243.75/month
|
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*
Triple net expenses to be paid during free rent period
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B.
Additional Rent . All monies
required to be paid by Tenant under this Lease, including,
without limitation, Real Property Taxes pursuant to Paragraph
15, Outside Area and Common Area Expenses pursuant to Paragraph
17, and insurance premiums pursuant to Paragraph 21, shall be
deemed Additional Rent.
6.
Late Payment Charges . Tenant
acknowledges that late payment by Tenant to Landlord of Rent and
other charges provided for under this Lease will cause Landlord to
incur costs not contemplated by this Lease, the exact amount of
such costs being extremely difficult or impracticable to fix.
Therefore, if any installment of Rent or any other charge due
from Tenant is not received by Landlord within five (5) days of
becoming due, then Tenant shall pay to Landlord an additional sum
equal to five percent (5%) of the amount overdue as a late charge.
The parties agree that this late charge represents a fair and
reasonable estimate of the costs that Landlord will incur by reason
of the late payment by Tenant.
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Initials :
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Landlord
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Tenant
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7.
Security Deposit . Upon
execution of this Lease, Tenant shall deposit with Landlord the
sum of One Thousand Two Hundred Forty Three and 75/100 Dollars
($1,243.75) as a Security Deposit. The Security Deposit
shall be held by Landlord as security for the full and faithful
performance of every provision of this Lease to be performed by
Tenant. If Tenant defaults with respect to any provision
of this Lease, Landlord may apply all or any part of the
Security Deposit for the payment of any Rent or other sum in
default, the repair of such damage to the Premises or the
payment of any other amount which Landlord may spend or become
obligated to spend by reason of Tenant’s default or to
compensate Landlord for any other loss or damage which Landlord
may suffer by reason of Tenant’s default to the full
extent permitted by law. If any portion of the Security
Deposit is so applied, Tenant shall, within ten (10) days after
written demand therefor, deposit cash with Landlord in an amount
sufficient to restore the Security Deposit to its original
amount. If Tenant is not otherwise in default, the
Security Deposit or any balance thereof shall be returned to
Tenant within thirty (30) days after the later of the
termination of the Lease or the surrender of the Premises by
Tenant.
8.
Holding Over . If Tenant
remains in possession of all or any part of the Premises after
the expiration of the Term, with the express or implied consent
of Landlord, such tenancy shall be month-to-month only and shall
not constitute a renewal or extension for any further term.
If Tenant remains in possession either with or without
Landlord’s consent, Monthly Rent shall be increased to an
amount equal to one hundred fifty percent (150%) of the Monthly
Rent payable during the last month of the Term, and any other
sums due under this Lease shall be payable in the amount and at
the times specified in this Lease. Such month-to-month
tenancy shall be subject to every other term, condition, and
covenant contained herein.
9.
Tenant Improvements . None
– Premises delivered in as-is condition.
10.
Condition of Premises . By
taking possession of the Premises, Tenant shall be deemed to
have accepted the Premises in good, clean and completed
condition and repair, subject to all applicable laws, codes and
ordinances. Any damage to the Premises caused by
Tenant’s move-in shall be repaired or corrected by Tenant,
at its expense. Tenant acknowledges that neither Landlord
nor its Agents have made any representations or warranties as to
the suitability or fitness of the Premises for the conduct of
Tenant’s business or for any other purpose, nor has
Landlord or its Agents agreed to undertake any Alterations or
construct any Tenant Improvements to the Premises except as
expressly provided in this Lease.
11.
Use of the Premises .
A.
Tenant’s Use . Tenant shall
use the Premises solely for general office purposes and shall
not use the Premises for any other purpose without obtaining the
prior written consent of Landlord.
B.
Compliance .
(i)
Tenant shall not use the Premises or suffer or
permit anything to be done in or about the Premises or the
Project which will in any way conflict with any law, statute,
zoning restriction, ordinance or governmental law, rule,
regulation or requirement of public authorities now in force or
which may hereafter be in force, relating to or affecting the
condition, use or occupancy of the Premises or the Project.
Tenant shall not commit any public or private nuisance or
any other act or thing which might or would disturb the quiet
enjoyment of any other tenant of Landlord or any occupant of
nearby property. Tenant shall place no loads upon the
floors, walls or ceilings in excess of the maximum designed load
determined by Landlord or which endanger the structure; nor
place any harmful liquids in the drainage systems; nor dump or
store waste materials or refuse or allow such to remain outside
the Building proper, except in the enclosed trash areas
provided. Tenant shall not store or permit to be stored or
otherwise placed any other material of any nature whatsoever
outside the building.
(ii)
In particular, Tenant, at its sole cost, shall
comply with all laws relating to the storage, use and disposal
of hazardous, toxic or radioactive matter, including those
materials identified in Sections 66680 through 66685 of Title 22
of the California Administrative Code, Division 4, Chapter 30
(“Title 22”) as they may be amended from time to
time (collectively “Toxic Materials”). If
Tenant does store, use or dispose of any Toxic Materials, Tenant
shall notify Landlord in writing at least ten (10) days prior to
their first appearance on the Premises. Tenant shall be
solely responsible for and shall defend, indemnify and hold
Landlord and its Agents harmless from and against all claims,
costs and liabilities, including attorneys’ fees and
costs, arising out of or in connection with its storage, use and
disposal of Toxic Materials. Tenant shall further be
solely responsible for and shall defend, indemnify and hold
Landlord and its Agents harmless from and against any and all
claims, costs, and liabilities, including attorneys’ fees
and costs, arising out of or in connection with the removal,
clean-up and restoration work and materials necessary to return
the Premises and the Project and any other property of whatever
nature to their condition existing prior to the appearance of
the Toxic Materials on the Premises. Tenant’s
obligations hereunder shall survive the termination of this
Lease.
12.
Quiet Enjoyment . Landlord
covenants that Tenant, upon performing the terms, conditions and
covenants of this Lease, shall have quiet and peaceful
possession of the Premises as against any person claiming the
same by, through or under Landlord.
13.
Alterations . After the
Commencement Date, Tenant shall not make or permit any
Alterations in, on or about the Premises, except for
nonstructural Alterations that do not impact the Building
systems nor exceed One Thousand Dollars ($1,000.00) in cost,
without the prior written consent of Landlord, and according to
plans and specifications approved in writing by Landlord, which
consent shall not be unreasonably withheld.
Notwithstanding the foregoing Tenant shall not, without
the prior written consent of Landlord, make any: (i) Alterations
to the exterior of the Building; (ii) Alterations to and
penetrations of the roof of the Building; and
(iii) Alterations visible from outside the Premises,
including the Common Area, to which Landlord may withhold
Landlord’s consent on wholly aesthetic grounds.
All Alterations shall be installed at
Tenant’s sole expense, in compliance with all applicable
laws, by a licensed contractor, shall be done in a good and
workmanlike manner conforming in quality and design with the
Premises existing as of the Commencement Date, and shall not
diminish the value of either the Building or the Premises.
All Alterations made by Tenant shall be and become the
property of Landlord upon installation and shall not be deemed
Tenant’s Personal Property; provided, however, that if
Landlord informed Tenant at the time of its approval of any
Alterations that Tenant would be required to remove such
Alterations from the Premises at the expiration or sooner
termination of this Lease, then Tenant shall, at Tenant’s
expense, remove such Alterations from the Premises at the
expiration or sooner termination of this Lease and restore the
Premises to their condition existing prior to the installation
of such Alterations. Notwithstanding any other provision
of this Lease, Tenant shall be solely responsible for the
maintenance and repair of any and all Alterations made by it to
the Premises. Tenant shall give Landlord written notice of
Tenant’s intention to perform work on the Premises at
least twenty (20) days prior to the commencement of such work to
enable Landlord to post and record a Notice of Nonresponsibility
or other notice deemed proper before the commencement of any
such work.
14.
Surrender of the Premises .
Upon the expiration or earlier termination of the Term,
Tenant shall surrender the Premises to Landlord in its condition
existing as of the Commencement Date, normal wear and tear and
fire or other casualty excepted, with all interior walls
repaired if damaged, all carpets shampooed and cleaned, all
broken, marred or nonconforming acoustical ceiling tiles
replaced, all windows washed, the plumbing and electric systems
and lighting in good order and repair, including replacement of
any burned out or broken light bulb or ballasts, and all floors
cleaned and waxed, all to the reasonable satisfaction of
Landlord. Tenant shall remove from the Premises all of
Tenant’s Alterations required to be removed pursuant to
Paragraph 13 and all Tenant’s Personal Property, and
repair any damage and perform any restoration work caused by
such removal. If Tenant fails to remove such Alterations
and Tenant’s Personal Property, and such failure continues
after the termination of this Lease, Landlord may retain such
property and all rights of Tenant with respect to it shall
cease, or Landlord may place all or any portion of such property
in public storage for Tenant’s account. Tenant shall
be liable to Landlord for costs of removal of any such
Alterations and Tenant’s Personal Property and storage and
transportation costs of same, and the cost of repairing and
restoring the Premises, together with interest at the Interest
Rate from the date of expenditure by Landlord. If the
Premises are not so surrendered at the termination of this
Lease, Tenant shall indemnify Landlord and its Agents against
all loss or liability, including attorneys’ fees and
costs, resulting from delay by Tenant in so surrendering the
Premises.
Normal wear and tear, for the purposes of this
Lease, shall be construed to mean wear and tear caused to the
Premises by a natural aging process which occurs in spite of
prudent application of the best standards for maintenance,
repair, and janitorial practices. It is not intended, nor
shall it be construed, to include items of neglected or deferred
maintenance which would have or should have been attended to
during the Term of the Lease if the best standards had been
applied to properly maintain and keep the Premises at all times
in good condition and repair.
15.
Real Property Taxes .
A.
Payment by Tenant . On or before
April 1 and December 1 of each calendar year during the Term,
Tenant shall pay to Landlord, as Additional Rent, Tenant’s
Project Percentage of all Real Property Taxes as set forth on
the County assessor’s tax statement for the Project.
Landlord shall give Tenant at least fifteen (15)
days’ prior written notice of the amount so due.
Upon Landlord’s receipt of the Real Property Tax
payment from Tenant and other tenants of the Property, Landlord
shall pay the taxes to the County. If Tenant fails to pay
Tenant’s Project Percentage of the Real Property Taxes on
or before April 1 and December 1, respectively, Tenant shall pay
to Landlord any penalty incurred by such late payment.
Tenant shall pay Tenant’s Project Percentage of any
Real Property Tax not included within the County tax
assessor’s tax statement within thirty (30) days after
being billed for same by Landlord. The foregoing dates are
based on the dates established by the County as the dates on
which Real Property Taxes become delinquent if not paid.
If such delinquency dates change, the dates on which
Tenant must pay Tenant’s Project Percentage of such taxes
shall be at least ten (10) days prior to the delinquency dates.
Notwithstanding the foregoing, at any time, upon prior
written notice to Tenant, Landlord shall have the right to
require that Tenant pay one-twelfth (1/12th) of the Real
Property Taxes payments to Landlord directly, on the first (1st)
day of each calendar month. Assessments, taxes, fees,
levies and charges may be imposed by governmental agencies for
such purposes as fire protection, street, sidewalk, road,
utility construction and maintenance, refuse removal and for
other governmental services which may formerly have been
provided without charge to property owners or occupants.
It is the intention of the parties that all new and
increased assessments, taxes, fees, levies and charges are to be
included within the definition of Real Property Taxes for
purposes of this Lease.
B.
Taxes on Tenant Improvements and Personal
Property . Tenant shall pay any increase in Real
Property Taxes resulting from any and all Alterations and Tenant
Improvements of any kind whatsoever placed in, on or about the
Premises for the benefit of, at the request of, or by Tenant.
Tenant shall pay prior to delinquency all taxes assessed
or levied against Tenant’s Personal Property in, on or
about the Premises or elsewhere. When possible, Tenant
shall cause its Personal Property to be assessed and billed
separately from the real or personal property of Landlord.
C.
Proration . Tenant’s
liability to pay Real Property Taxes shall be prorated on the
basis of a 365-day year to account for any fractional portion of
a fiscal tax year included at the commencement or expiration of
the Term. With respect to any assessments which may be
levied against or upon the Property, or which under the laws
then in force may be evidenced by improvements or other bonds or
may be paid in annual installments, only the amount of such
annual installment (with appropriate proration for any partial
year) and interest due thereon shall be included within the
computation of the annual Real Property Taxes levied against the
Premises.
16.
Utilities and Services .
Tenant shall be responsible for and shall pay promptly all
charges for water, gas, electricity, telephone, refuse pickup,
janitorial service and all other utilities, materials and
services furnished directly to or used by Tenant in, on or about
the Premises during the Term, together with any taxes thereon.
If such utilities are not separately metered to the
Premises, Landlord shall bill Tenant for Tenant’s pro rata
share based on Tenant’s Building Percentage or other
equitable basis as determined by Landlord. Landlord shall
not be liable in damages or otherwise for any failure or
interruption of any utility service or other service furnished
to the Premises, except that resulting from the willful
misconduct of Landlord.
17.
Repair and Maintenance .
A.
Landlord’s Obligations .
Landlord shall keep in good order, condition and repair,
at Landlord’s sole cost and expense, the roof membrane and
the structural parts of the Building, which structural parts
include only the foundation, subflooring, roof structure,
exterior walls and exterior plumbing, except that any damage
thereto caused by the negligence or willful misconduct of Tenant
or Tenant’s agents, employees or invitees, or by reason of
the failure of Tenant to perform or comply with any terms of
this Lease, or caused by Alterations made by Tenant or by
Tenant’s agents, employees or contractors, shall be
repaired at Tenant’s expense. Landlord shall also
maintain in good order, condition and repair the Common Areas of
the Building and the Outside Area of the Project and Tenant
shall reimburse Landlord for the cost thereof as provided in
Paragraphs 17.C and 17.D. The manner in which the Common
Area and the Outside Area shall be maintained and the
expenditures therefor shall be at the sole discretion of
Landlord. Landlord shall at all times have exclusive
control of the Common Area and Outside Area and may at any time
temporarily close any part thereof, exclude and restrain anyone
from any part thereof, except the bona fide customers, employees
and invitees of Tenant who use the Common Area and Outside Area
in accordance with the rules and regulations as Landlord may
from time to time promulgate, and may change the configuration
or location of the Common Area and Outside Area. In
exercising any such rights, Landlord shall make a reasonable
effort to minimize any disruption of Tenant’s business.
Tenant waives the provisions of Sections 1941 and 1942 of
the California Civil Code and any similar or successor law
regarding Tenant’s right to make repairs and deduct the
expenses of such repairs from the Rent due under this Lease.
B.
Tenant’s Obligations . Tenant
shall at all times and at its own expense clean, keep and
maintain in good order, condition and repair every part of the
Premises which is not within Landlord’s obligation
pursuant to Paragraph 17.A. Tenant’s repair and
maintenance obligations shall include, all plumbing and sewage
facilities within the Premises, fixtures, interior walls and
ceiling, floors, windows, doors, entrances, plateglass,
showcases, skylights, all electrical facilities and equipment,
including lighting fixtures, lamps, fans and any exhaust
equipment and systems, any automatic fire extinguisher equipment
within the Premises, electrical motors and all other appliances
and equipment of every kind and nature located in, upon or about
the Premises. Tenant shall also be responsible for all
pest control within the Premises.
C.
Tenant to Pay Expenses . Tenant
shall pay, as Additional Rent, Tenant’s Building
Percentage of all reasonable costs and expenses paid or incurred
by Landlord during the Term in operating, maintaining, repairing
and replacing the Common Area (the “Common Area
Expenses”), and Tenant’s Project Percentage of all
reasonable costs and expenses paid or incurred by Landlord in
operating, maintaining, repairing and replacing the Outside Area
(the “Outside Area Expenses”). The Common Area
Expenses and Outside Area Expenses may include, as appropriate,
the cost of labor, materials, supplies and services used or
consumed in o
