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Exhibit 10.39
[CORNISH & CAREY COMMERCIAL LETTERHEAD]
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SUBLEASE
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SUBLESSOR: KVO Public Relations, Inc., an SUBLEASED 1172 Castro Street
Oregon corporation PREMISES: Mountain View, CA 94040
SUBLESSEE: VIVUS, Inc., a Delaware DATE: December 21, 1999
corporation
1. PARTIES:
This Sublease is made and entered into as of December 21, 1999, by and
between KVO Public Relations, Inc., an Oregon Corporation (Sublessor), and
VIVUS, Inc., a Delaware corporation (Sublessee), under the Master Lease
dated July 30, 1996, between DLC -- Castro Commons, a California Limited
Partnership, as (Lessor) and KVO Public Relations, Inc., as (Lessee.) A
copy of the Master Lease is attached hereto as Exhibit "A" and incorporated
herein by this reference.
2. PROVISIONS CONSTITUTING SUBLEASE:
2.1. This Sublease is subject to all of the terms and conditions of the
Master Lease. Sublessee hereby agrees to perform all of the obligations of
Lessee under the Master Lease to the extent said obligations apply to the
Subleased Premises and Sublessee's use of the common areas, except as
specifically set forth herein. Sublessor hereby agrees to use best efforts
to cause Lessor, under the Master Lease, to perform all of the obligations
of Lessor thereunder to the extent said obligations apply to the Subleased
Premises and Sublessee's use of the common areas. Sublessee shall not
commit or permit to be committed on the Subleased Premises or on any other
portion of the Project any act or omission which violates any term or
condition of the Master Lease. Sublessor shall not, without Sublessee's
prior written consent, terminate the Master Lease, commit any acts that
would entitle Lessor to terminate the Master Lease, or amend or waive any
provisions of the Master Lease or make any elections, exercise any right
or remedy or give any consent or approval under the Master Lease.
2.2. All of the terms and conditions contained in the Master Lease are
incorporated herein, except as specifically provided below, and shall
together with the terms and conditions specifically set forth in this
Sublease constitute the complete terms and conditions of this Sublease.
The following paragraphs of the Master Lease SHALL NOT be included in this
Sublease:
PARAGRAPH 2: First Sentence in Paragraph 5; Paragraph 6 (including
Exhibit C); Subset (v) of Subsection A in paragraph 21; Paragraph 40.
3. PREMISES:
Sublessor leases to Sublessee and Sublessee leases from Sublessor the
Subleased Premises upon all of the terms, covenants and conditions
contained in this Sublease. The Subleased Premises consist of
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SUBLEASE
approximately Fourteen Thousand Two Hundred Thirty Seven (14,237) rentable
square feet located at 1172 Castro Street, Mountain View, California as
shown and described in Exhibit "B".
4. RENT:
Upon execution of this Agreement, Sublessee shall pay to Sublessor the sum
of Thirty Nine Thousand One Hundred Fifty One and 75/100 Dollars
($39,151.75), representing the current Base Rent for the Subleased
Premises, plus Thirteen Thousand Four Hundred Eighty Two and 00/100 Dollars
($13,482.00) representing the current monthly Operating Expenses for a
total monthly rental amount of Fifty Two Thousand Six Hundred Thirty Three
and 75/100 Dollars ($55,633.75). Sublessee acknowledges that the Base Rent
and Operating Expenses shall be adjusted on February 1, 2000 and annually
thereafter, beginning February 1, 2001 in accordance with the terms set
forth in the Master Lease Paragraphs 3(A), 3(B), 3(C), 3(D).
The total rental amount shall be paid to Sublessor, without deductions,
offset, prior notice or demand. Such rental amounts shall be payable by
Sublessee to Sublessor in consecutive monthly installments on or before the
1st day of each calendar month during the Sublease term. If the
commencement date or the termination date of the Sublease occurs on a date
other than the first day or the last day, respectively, of a calendar
month, then the Rent for such partial month shall be prorated and the
prorated Rent shall be payable on the Sublease commencement date or on the
first day of the calendar month in which the Sublease termination date
occurs, respectively.
5. SECURITY DEPOSIT:
Upon execution of this Agreement, Sublessee shall pay to Sublessor One
Hundred Twenty Thousand and 00/100 Dollars ($120,000.00) as a noninterest
bearing Security Deposit. Provided Sublessee has met all of its rental
obligations and has not been in default beyond applicable notice and cure
provisions for the first eighteen (18) months of the Sublease term.
Sublessor shall refund Forty Thousand and 00/100 Dollars ($40,000.00) of
the Security Deposit to Sublessee on or before May 31, 2001. In addition,
provided Sublessee has met all of its rental obligations and has not been
in default beyond applicable notice and cure provisions for the first
thirty six (36) months of the Sublease term, Sublessor shall refund Twenty
Thousand and 00/100 Dollars ($20,000.00) of the Security Deposit to
Sublessee on or before November 30, 2002. In the event Sublessee has
performed all of the terms and conditions of this Sublease during the
entire Sublease term, Sublessor shall return to Sublessee, within ten (10)
days after Sublessee has vacated the Subleased Premises, the remaining
Security Deposit less any sums due and owing to Sublessor; provided,
however that if Sublessor fails to return the remaining Security Deposit
(less any sums due and owing to Sublessor) to Sublessee in accordance with
this sentence, then Sublessor shall assign its own security deposit
(described in Paragraph 4 of the Master Lease) to Sublessee, and any
obligation Landlord has of returning such security deposit to Sublessor
shall be assigned to Sublessee. This shall not be Sublessee's sole remedy
should Sublessor fail to return the deposit.
6. RIGHTS OF ACCESS AND USE:
6.1 Use:
Sublessee shall use the Subleased Premises for General office purposes.
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represents both parties, then Sublessor and Sublessee consent to such dual
representation and waive any conflict of interest arising out of such dual
agency.
11. COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT:
Sublessee shall be responsible for the installation and cost of any and all
improvements, alterations or other work required on or to the Subleased
Premises or to any other portion of the property and/or building of which
the Subleased Premises are a part, required or reasonably necessary because
of: (1) Sublessee's particular use of the Subleased Premises or any portion
thereof; (2) the particular use by a Sublessee by reason of assignment or
sublease; or (3) both, including any improvements, alterations or other
work required under the Americans With Disabilities Act of 1990. Compliance
with the provisions of this Section 8 shall be a condition of Sublessor
granting its consent to any assignment or Sublease of all or a portion of
this Sublease and the Subleased Premises described in this Sublease.
12. COMPLIANCE WITH NONDISCRIMINATION REGULATIONS:
It is understood that it is illegal for Sublessor to refuse to display or
sublease the Subleased Premises or to assign, surrender or sell the Master
Lease, to any person because of race, color, religion, national origin,
sex, sexual orientation, marital status or disability.
13. TOXIC CONTAMINATION DISCLOSURE:
Sublessor and Sublessee each acknowledge that Broker has no specific
expertise with respect to environmental assessment or physical condition of
the Subleased Premises, including, but not limited to, matters relating to:
(i) problems which may be posed by the presence or disposal of hazardous or
toxic substances on or from the Subleased Premises, (ii) problems which may
be posed by the Subleased Premises being within the Special Studies Zone as
designated under the Alquist-Priolo Special Studies Zone Act (Earthquake
Zones), Section 2621-2630, inclusive of California Public Resources Code,
and (iii) problems which may be posed by the Subleased Premises being
within a HUD Flood Zone as set forth in the U.S. Department of Housing and
Urban Development "Special Flood Zone Area Maps," as applicable.
Sublessor and Sublessee each acknowledge that Broker has not made an
independent investigation or determination of the physical or environmental
condition of the Subleased Premises, including, but not limited to, the
existence or nonexistence of any underground tanks, sumps, piping, toxic or
hazardous substances on the Subleased Premises. Neither Sublessor nor
Sublessee shall rely upon Broker to determine the physical and
environmental condition of the Subleased Premises or to determine whether,
to what extent or in what manner, such condition must be disclosed to
potential Sublessees, assignees, purchasers or other interested parties.
14. RENT ABATEMENT AND DAMAGES TO PERSONAL PROPERTY:
In the event Sublessor, pursuant to the terms of the Master Lease, is
entitled to and receives rent abatement, Sublessee shall be entitled to
such rent abatement. In addition, any amounts paid or credited to Sublessor
under the terms of the Master Lease for damage to personal property of the
Sublessee shall be credited to Sublessee.
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15. CONDITIONS OF PREMISES: Sublessor shall deliver the Premises to Sublessee
in "As Is" condition except for the following improvements:
a. Touch-up paint as needed
b. Professionally clean the Premises including the carpets
16. ALTERATIONS AND ADDITIONS: Sublessee shall comply with all terms and
conditions of paragraph 11 contained in Master Lease except that Sublessee
shall not be required to remove any additions made to the Premises by
Sublessor and/or restore the Premises to original condition if Sublessor
had performed the alterations.
17. ASSIGNMENT AND SUBLETTING: Sublessee shall have the right to
Subsublease/Assign all or any portion of its Premises during the term of
the sublease to a qualified Subsublessee or Subsublessees, subject to
Sublessor's and Lessor's approval which shall not be unreasonably withheld
or delayed and subject to Paragraph 21 [excluding subparagraph (A) subset
(v)] and excluding the last two sentences of the first paragraph of
Paragraph 21A of the Master Lease.
18. SUBLESSORS REPRESENTATION: Sublessor hereby represents to Sublessee that
(i) the Master Lease attached hereto as Exhibit A has been executed and
delivered by Master Lessor and Sublessor, in full force and effect and has
not been terminated, and constitutes the entire agreement of the parties,
thereto relating to the Lease of the Subleased Premises, (ii) no default or
breach by Sublessor or, to the best of Sublessor's knowledge, by Master
Lessor exists under the Master Lease, (iii) no event has occurred that,
with the passage of time, the giving of notice, or both, would constitute a
default or breach by Sublessor or to the best of Sublessor's knowledge, by
Master Lessor under the Master Lease, and (iv) subject to receipt of Master
Lessor's written consent hereto. Sublessor has the right and power to
execute and deliver this Sublease and perform its obligations hereunder.
19. MUTUAL INDEMNITY: Each party shall indemnify, defend, protect and hold
harmless the other from, all losses, damages, liabilities, judgments,
actions, claims, attorneys' fees, consultants' fees, payments, costs or
expenses arising from the negligence or willful misconduct of the
indemnifying party or its agents, contractors, licensees or invitees, or a
breach of the indemnifying party's obligations or representations under the
Sublease.
20. ASSIGNMENT AND SUBLETTING: Sublessee, without Sublessor's or Lessor's prior
written consent and without being subject to any bonus rent provisions, may
sublet the Premises or assign the Sublease to: (a) a corporation
controlling, controlled by or under common control with Sublessee; (b) a
corporation related to Sublessee by merger, consolidation or non-bankruptcy
reorganization; or (c) a purchaser of substantially all of Sublessee's
assets. A sale of Sublessee's capital stock shall not be deemed an
assignment, subletting or other transfer of the Sublease or the Premises.
21. SURRENDER OF PREMISES: In no event shall Sublessee's obligation to
surrender the Subleased Premises require Sublessee to repair or restore the
Subleased Premises to a condition better than the condition in which the
Subleased Premises existed as of the Commencement Date of the Sublease, and
Sublessee shall only be responsible for repairing or restoring or paying
for the repair or restoration of those elements of the Subleased Premises
damaged during the Sublease Term. Additionally,
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Sublessee shall not be required to remove at the Sublease term or
otherwise, alterations or improvements to the Premises made by or for the
account of Sublessor or personal property of Sublessor.
22. QUIET ENJOYMENT: Sublessor conveys that if, and so long as, Sublessee keeps
and performs each and every covenant, agreement, term, provision and
condition herein contained on the part and on behalf of Sublessee to be
kept and performed, Sublessee shall quietly enjoy the Premises from and
against the claims of all persons.
23. AUTHORIZATION TO DIRECT SUBLEASE PAYMENTS: Sublessee shall have the right
to pay all rent and other sums owing by Sublessee to Sublessor hereunder
for those items which also are owed by Sublessor to Master Landlord under
the Master Lease directly to Master Landlord if Sublessee reasonably
believes that Sublessor has failed to make any payment required to be made
by Sublessor to master Landlord under the Master Lease and Sublessor fails
to provide adequate proof of payment within two (2) business days after
Sublessee's written demand requesting such proof. Notwithstanding the
foregoing, (i) Sublessee shall provide to Sublessor concurrently with any
payment to Master Landlord reasonable evidence of such payment, and (ii) if
Sublessor notifies Sublessee that it disputes any amount demanded by Master
Landlord, Sublessee shall not make any such payment to Master Landlord
unless Master Landlord has provided a three-day notice to pay such amount
or forfeit the Master Lease.
Any sums paid directly by Sublessee to Master Landlord in accordance with
this paragraph shall be credited toward the amounts payable by Sublessee to
Sublessor under the Sublease. In the event Sublessee tenders payment
directly to Master Landlord in accordance with this paragraph and Master
Landlord refuses to accept such payment. Sublessee shall have the right to
deposit such funds in an account with a national bank for the benefit of
Master Landlord and Sublessor, and the deposit of said funds in such
account shall discharge Sublessee's obligation under the Sublease to make
the payment in question.
24. SUBLESSOR'S OBLIGATIONS: Sublessor, with respect to the obligations of
Master Landlord under the Master Lease, shall use Sublessor's diligent good
faith efforts to cause Master Landlord to perform such obligations for the
benefit of Sublessee. Such diligent good faith efforts shall include,
without limitation: (a) upon Sublessee's written request, immediately
notifying Master Landlord of its nonperformance under the Master Lease, and
requesting that Master Landlord perform its obligations under the Master
Lease; and (b) permitting Sublessee to commence a lawsuit or other action
in Sublessee's name to obtain the performance required from Master Landlord
under the Master Lease; provided, however, that if Sublessee commences a
lawsuit or other action. Sublessee shall pay all costs and expenses
incurred in connection therewith, and Sublessee shall indemnify Sublessor
against, and hold Sublessor harmless from, all reasonable costs and
expenses incurred by Sublessor in connection therewith.
25. RENTAL ADJUSTMENTS: In no event shall Sublessee's obligation to pay
Operating Expenses and Taxes exceed the amount of Operating Expenses and
Taxes due and payable by Sublessor under the Master Lease and the Consent
to Sublease. Sublessee shall pay Sublessee's share of such expenses as and
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when the same are due and payable to Sublessor under the Master Lease.
Sublessee shall be entitled to its share of all credits, if any, given by
Master Landlord to Sublessor for Sublessor's overpayment of such expenses.
Notwithstanding anything to the contrary in the Sublease, Sublessee shall
not be required to pay any additional rent or perform any obligation that
is (i) fairly allocable to any period of time prior to the commencement
date of the Sublease or following the expiration of the Sublease or (ii)
payable as a result of a default by Sublessor of any of its obligations
under the Master Lease.
26. DEFAULT: Sublessee shall not be deemed in default of the Sublease in the
event Sublessee fails to pay rent when due unless such failure continues
for five (5) days after written notice of such failure, provided that
Sublessor shall not be required to give such written notice on more than
one occasion during each year of the Sublease.
SUBLESSOR: KVO PUBLIC RELATIONS, INC.
By: /s/ signature illegible Date: 12/27/99
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SUBLESSEE: VIVUS, INC.
By: /s/ signature illegible Date: 12-22-99
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NOTICE TO SUBLESSOR AND SUBLESSEE: CORNISH & CAREY COMMERCIAL, IS NOT AUTHORIZED
TO GIVE LEGAL OR TAX ADVICE; NOTHING CONTAINED IN THIS SUBLEASE OR ANY
DISCUSSIONS BETWEEN CORNISH & CAREY COMMERCIAL AND SUBLESSOR AND SUBLESSEE SHALL
BE DEEMED TO BE A REPRESENTATION OR RECOMMENDATION BY CORNISH & CAREY COMMERCIAL
OR ITS AGENTS OR EMPLOYEES AS TO THE LEGAL EFFECT OR TAX CONSEQUENCES OF THIS
DOCUMENT OR ANY TRANSACTION RELATING THERETO. ALL PARTIES ARE ENCOURAGED TO
CONSULT WITH THEIR INDEPENDENT FINANCIAL CONSULTANTS AND/OR ATTORNEYS REGARDING
THE TRANSACTION CONTEMPLATED BY THIS PROPOSAL.
EXHIBIT "A" MASTER LEASE
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CONSENT TO SUBLEASE
THIS AGREEMENT ("Agreement") is made as of this 7th day of January, 2000,
by and among MOUNTAIN VIEW INCOME PARTNERS LLC, a California limited liability
company ("Landlord"), KVO PUBLIC RELATIONS, INC. an Oregon corporation
("Sublandlord"), and VIVUS, INC., a Delaware corporation ("Subtenant").
RECITALS
A. Landlord is the landlord, as successor-in-interest to DLC-Castro
Commons, a California limited partnership pursuant to that certain Assignment
of Leases dated December 8, 1997, and Sublandlord is the tenant under a lease
dated July 30, 1996, as amended by the First Amendment to Lease dated of even
date herewith (the "Master Lease"), for approximately 14,237 rentable square
feet of space (the "Premises"), located at the office building whose address is
1172 Castro Street, Mountain View, California (the "Building").
B. Sublandlord has requested that Landlord consent to the subletting by
Sublandlord to Subtenant of a portion of the Premises ("Sublet Premises"),
pursuant to the Sublease dated December 21, 1999 (the "Sublease"), to which this
Agreement is attached.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants contained herein, Landlord, Sublandlord and Subtenant hereby agree as
follows:
Landlord hereby consents to the Sublease subject to and upon the following
terms and conditions, as to each of which Sublandlord and Subtenant expressly
agree; provided, however, that this Agreement shall not be effective until and
unless Sublandlord executes and delivers to Landlord an original Amendment to
Lease in the form attached hereto as EXHIBIT A:
1. Notwithstanding any provision of the Sublease to the contrary, nothing
contained in this Agreement or the Sublease shall;
(a) operate as a consent to or approval or ratification by Landlord of
any specific provisions of the Sublease or as a representation or warranty by
Landlord, or cause Landlord to be estopped or bound in any way by any of the
provisions of the Sublease; or
(b) be construed to modify, waive or affect (i) any of the provisions,
covenants or conditions in the Master Lease, (ii) any of Sublandlord's
obligations under the Master Lease, or (iii) any rights or remedies of Landlord
under the Master Lease or otherwise; or to enlarge or increase Landlord's
obligations or Sublandlord's rights under the Master Lease or otherwise; or
(c) be deemed to make Subtenant a third party beneficiary of the
provisions of the Master Lease, or create or permit any direct right of action
by Subtenant against Landlord for
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breach of the covenant of quiet enjoyment or any other covenant of Landlord
under the Master Lease; or
(d) be construed to waive any past, present or future breach or
default on the part of Sublandlord under the Master Lease.
2. This consent is not assignable.
3. The Sublease shall be subject and subordinate at all times to the
Master Lease and to all of its provisions, covenants and conditions. Except
for rent payable under the Master Lease, Subtenant shall perform faithfully and
be bound by all the terms, covenants, conditions, provisions and agreements of
the Master Lease, for the period covered by the Sublease, but only to the
extent applicable to the Sublet Premises. In case of any conflict between the
provisions of the Master Lease and the provisions of the Sublease, the
provisions of the Master Lease shall prevail unaffected by the Sublease.
4. Neither the Sublease nor this consent thereto shall release or
discharge the Sublandlord from any liability under the Master Lease.
Sublandlord shall remain liable and responsible for the full performance and
observance of all the provisions, covenants and conditions set forth in the
Master Lease to be performed and observed by Sublandlord. Any breach or
violation of any provision of the Master Lease by Subtenant shall constitute a
default by Sublandlord in fulfilling such provision.
5. This consent by Landlord shall not be construed as a consent by
Landlord to any further subletting by Sublandlord or Subtenant or to any
assignment by Sublandlord of the Master Lease or assignment by Subtenant of the
Sublease, whether or not the Sublease purports to permit the same, and, without
limiting the generality of the foregoing, both Sublandlord and Subtenant agree
that Subtenant has no right whatsoever to assign, mortgage or encumber the
Sublease nor to sublet any portion of the Sublet Premises or permit any portion
of the Sublet Premises to be used or occupied by any other party; further, in
connection therewith, both Sublandlord and Subtenant agree that an assignment
by operation of law or a transfer of control of Subtenant (including but not
limited to a transfer of the controlling interest of the stock of Subtenant, if
Subtenant is a corporation) shall be deemed to be a prohibited assignment
hereunder. This consent shall not be construed as a consent by Landlord to any
modification, amendment, extension or renewal of the Sublease. Sublandlord and
Subtenant acknowledge and agree that the attempted exercise of any option to
extend the term of the Sublease or to expand the Sublet Premises by the
Subtenant shall, for purposes of the Master Lease and this Agreement,
constitute a further subletting subject to the provisions of this Article 5.
6. In the event of Sublandlord's default under any of the provisions of
the Master Lease, the rent due from Subtenant under the Sublease shall be
deemed assigned to Landlord and Landlord shall have the right, upon such
default, at any time at its option, to give notice to Subtenant and Sublandlord
of such assignment. Landlord shall credit Sublandlord with any rent received by
Landlord under such assignment, but the acceptance of any payment on account of
rent from Subtenant as the result of any such default shall in no manner
whatsoever serve to release Sublandlord from any liability under the terms,
covenants, conditions, provisions or agreements under the Master Lease, except
to the extent of the rent so credited.
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7. If the Master Lease shall terminate during the term of the Sublease due
either to condemnation or to destruction by fire or other cause, the Sublease
and its term shall thereupon expire and come to an end and Subtenant shall
vacate the Sublet Premises on or before the effective date of such termination.
If the Master Lease shall expire or terminate during the term of the Sublease
for any reason other than either condemnation or destruction by fire or other
cause, or if Sublandlord shall surrender the Master Lease to Landlord during the
term of the Sublease, Landlord will so notify Sublandlord and Subtenant in
writing and within not more than thirty (30) days after the giving of such
written notice, Landlord will, in its sole discretion, either; (a) elect by
written notice to all such parties to require Subtenant to vacate the Sublet
Premises in not less than seventy-five (75) days after such written election, in
which event the Sublease and its term shall expire and come to an end on the
effective date stated in such notice; or (b) elect (by written notice to all
such parties) to continue the Sublease (without any additional or further
agreement of any kind on the part of Subtenant) with the same force and effect
as if Landlord as landlord and Subtenant as tenant had entered into a lease as
of the effective date of such expiration, termination or surrender for a term
equal to the then unexpired term of the Sublease and containing the same terms
and conditions as those contained in the Sublease, in which event Subtenant
shall attorn to Landlord and Landlord and Subtenant shall have the same rights,
obligations and remedies thereunder as were had by Sublandlord and Subtenant
thereunder prior to such effective date, except that in no event shall Landlord
be (1) liable for any act or omission by Sublandlord, (2) subject to any offsets
or defenses which Subtenant had or might have against Sublandlord, (3) bound by
any rent or additional rent or other payment paid by Subtenant to Sublandlord
more than thirty (30) days in advance, or (4) bound by any amendment to the
Sublease not consented to by Landlord. If Landlord fails to notify Sublandlord
and Subtenant of its election hereunder within the thirty (30) day period
provided above, the Sublease and its term shall automatically expire and come to
an end on the date which is seventy-five (75) days after the end of such thirty
(30) day period. Upon expiration of the Sublease pursuant to the provisions of
this Article 7, in the event of the failure of Subtenant to vacate the Sublet
Premises as herein provided, Landlord shall be entitled to all of the rights and
remedies available to a landlord against a tenant holding over without consent
after the expiration of a term.
8. In addition to complying with Sublandlord's obligations under the
Master Lease to maintain insurance, Subtenant shall add and maintain Landlord as
an additional insured under such insurance policies.
9. Both Sublandlord and Subtenant shall be and continue to be liable for
the payment of (a) all bills rendered by Landlord for charges incurred by or
imposed upon Subtenant for services and materials supplied to the Sublet
Premises beyond that which is required by the terms of the Master Lease, and (b)
any additional costs incurred by Landlord for maintenance and repair of the
Sublet Premises as the result of Subtenant occupying the Sublet Premises
(including, but not limited to, any excess costs to Landlord of services
furnished to or for the Sublet Premises).
10. Requests for (a) any service to be supplied by Landlord to the Sublet
Premises, (b) to make improvements or alterations to the Sublet premises, (c) to
further sublet the Sublet Premises or assign the Sublease and (d) all other
requests for Landlord's consent or approval may be made directly by Subtenant.
Landlord's consent to any such requests made directly by
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Subtenant shall in no way alter Sublandlord's liability under the Master Lease
as set forth elsewhere herein and Sublandlord expressly acknowledges that it
shall remain liable and responsible for the full performance and observance of
all the provisions, covenants and conditions set forth in the Master Lease
including to the extent modified by such requests by Subtenant.
11. Sublandlord and Subtenant each covenants and agrees that under no
circumstances shall Landlord be liable for any brokerage commission or other
charge or expense in connection with the Sublease.
12. Sublandlord and Subtenant understand and acknowledge that Landlord's
consent herein is not a consent to any improvement or alteration work to be
performed in the Sublet Premises (including without limitation any improvement
work contemplated in the Sublease), that Landlord's consent for such work must
be separately sought, and that any such work shall be subject to all the
provisions of the Master Lease with respect thereto.
13. In the event of any conflict between the provisions of this Agreement
and the provisions of the Sublease, the provisions of this Agreement shall
prevail unaffected by the Sublease.
14. Any notice or communication that any party hereto may desire or be
required to give to any other party under or with respect to this Agreement
shall be given prepaid, by hand delivery, Federal Express, or other nationally
recognized overnight courier service, addressed to such other party, in the case
of Landlord, at Mountain View Partners LLC c/o Menlo Equities Management
Company LLC, 2901 Tasman Drive, Ste. 220 Santa Clara, CA 95054, and in the case
of either Sublandlord or Subtenant, at the Sublet Premises, or in any case at
such other address any party may have designated by notice given in accordance
with the provisions of this paragraph.
15. Sublandlord and Subtenant agree, at any time and from time to time,
upon not less than fifteen (15) days' prior notice by Landlord, to execute,
acknowledge and deliver to Landlord a statement in writing certifying that the
Sublease is unmodified and in full force and effect (or, if there have been
modifications, that the Sublease is unmodified and in full force and effect as
modified and stating the modification), and the dates to which the annual base
rental, additional rent and other charges have been paid, and stating whether
or not Sublandlord or Subtenant is in default in performance of any covenant,
agreement, term, provision or condition contained in the Sublease and, if so,
specifying each such default, it being intended that any such statement
delivered pursuant hereto may be relied upon by Landlord and any prospective
purchaser or lessee of the Building, or any trustee or beneficiary under any
deed of trust affecting the Building. Sublandlord and Subtenant also agree to
execute and deliver from time to time such other estoppel certificates as any
lender may require with respect to the Sublease.
16. In the event of any arbitration or action proceeding at law or in
equity between or among the parties to this Agreement as a consequence of any
controversy, claim or dispute relating to this Agreement or the breach thereof,
or to enforce any of the provisions and/or rights hereunder, the unsuccessful
party or parties to such arbitration, action or proceeding shall pay to the
prevailing party or parties all costs and expenses, including reasonable
attorney's fees
4
11
incurred therein by such prevailing party or parties, and if such prevailing
party or parties shall recover judgment in any such arbitration, action or
proceeding, such costs, expenses and fees shall be included in and as part of
such judgment.
17. Subtenant hereby agrees that it shall indemnify, defend and hold
Landlord harmless from and against any and all claims arising out of (a)
Subtenant's use of the Sublet Premises or any part thereof for the conduct of
its business, or (b) any activity, work or other thing done, permitted or
suffered by Subtenant in or about the Building or the Sublet Premises, or any
part thereof, or (c) any breach or default in the performance of any obligation
on Subtenant's part to be performed under the terms of the Sublease or this
Agreement, (d) any act, omission, or negligence of Subtenant or any officer,
agent, employee, contractor, servant, invitee or guest of Subtenant, or (e) any
claim for brokerage commissions or other charges or expenses in connection with
the Sublease; and in each case from and against any and all damages, losses,
liabilities, lawsuits, judgments, and costs and expenses (including without
limitation reasonable attorneys' fees) arising in connection with any such claim
or claims as described in clauses (a) through (e) above, or any action or
proceeding brought thereon. If any such action or proceeding be brought against
Landlord, Subtenant, upon notice from Landlord, shall defend such action or
proceeding at Subtenant's sole expense by counsel reasonably satisfactory to
Landlord. Subtenant, as a material part of the consideration to Landlord, hereby
assumes all risk of damage or loss to property or injury or death to persons,
in, upon or about the Sublet Premises, from any cause, and Subtenant hereby
waives all claims in respect thereof against Landlord.
18. This Agreement shall be construed in accordance with the laws of the
State of California and, together with the Sublease and the Master Lease,
contains the entire agreement of the parties hereto with respect to the subject
matter hereof and may not be changed or terminated orally or by course of
conduct.
19. Sublandlord agrees to reimburse to Landlord all reasonable costs and
reasonable attorneys' fees incurred by Landlord in conjunction with the
processing and documentation of the Sublease.
[The remainder of this page has been intentionally left blank.]
5
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20. This Agreement is hereby incorporated into the Sublease and shall be
attached to the Sublease.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
LANDLORD: MOUNTAIN VIEW INCOME PARTNERS LLC,
a California limited liability company
By: Menlo Equities Associates VIII LLC, a
California limited liability company
By: Menlo Equities LLC, a California
limited liability company
By: Menlo Equities Inc., a
California corporation
By: /s/ Henry D. Bullock
---------------------------
Henry D. Bullock,
President
SUBLANDLORD: KVO PUBLIC RELATIONS, INC., an Oregon
corporation
By: /s/ Sharon VanSickle
--------------------------------
Name: Sharon VanSickle
--------------------------
Its: President/CEO
--------------------------
By:
--------------------------------
Name:
--------------------------
Its:
--------------------------
SUBTENANT: VIVUS, INC., a Delaware corporation
By: /s/ Richard Walliser
--------------------------------
Name: Richard Walliser
--------------------------
Its: CFO
--------------------------
By: /s/ Leland F. Wilson
--------------------------------
Name: Leland F. Wilson
--------------------------
Its: President CEO
--------------------------
6
13
EXHIBIT A
FORM OF AMENDMENT TO LEASE
This AMENDMENT TO LEASE (this "Amendment") is dated as of this ____ day of
January ___, 2000 by and between MOUNTAIN VIEW INCOME PARTNERS LLC, a
California limited liability company ("Landlord"), and KVO PUBLIC RELATIONS,
INC., an Oregon corporation ("Tenant").
RECITALS
A. DLC-Castro Commons, a California limited partnership ("DLC"), as
landlord, and Tenant, entered into that certain Office Lease dated July 30, 1996
(the "Lease"), for premises (the "Premises") with a street address of 1172
Castro Street, Mountain View, California, and more particularly described in the
Lease.
B. Landlord acquired the property on which the Premises are located on or
about December 8, 1997, and succeeded to the interest of DLC under the Lease.
C. Landlord and Tenant now desire to amend the Lease on the terms and
conditions set forth herein. Capitalized terms used in this Amendment and not
otherwise defined shall have the meanings assigned to them in the Lease.
AGREEMENT
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree
as follows:
1. BASIC RENT. The first paragraph of subparagraph 3.A of the Lease is
deleted in its entirety and replaced with the following:
"Tenant shall pay to Landlord, as monthly rent ("Rent") for the
Premises the amount ("Basic Rent") of Thirty Seven Thousand One Hundred Fifty
Eight and 57/100 Dollars ($37,158.57) in lawful money of the United States of
America, subject to adjustment as provided in subparagraph 3.B, below. All Rent
shall be paid without deduction or offset, prior notice, abatement or demand,
except as herein provided to Landlord c/o Menlo Equities Management Company
LLC, 2901 Tasman Drive, Ste. 220, Santa Clara, California 95054 or at such
other place as may be designated from time to time by Landlord."
2. BASIC RENT INCREASES. The first sentence of subparagraph 3.B of the
Lease is deleted in its entirety and replaced with the following:
"The Basic Rent shall be subject to adjustment on each anniversary of
the Commencement Date as follows:"
7
14
3. USE OF THE PREMISES. The first sentence of paragraph 5 of the Lease
is deleted in its entirety and replaced with the following:
"The Premises shall be used exclusively for the purpose of general
and executive offices."
4. SUBLEASE PREMIUM. Notwithstanding anything to the contrary contained
in paragraph 21.A of the Lease, Tenant may retain fourteen cents ($0.14) per
rentable square foot per month of all Basic Rent (or its equivalent) received
by Tenant in excess of the Basic Rent provided hereunder (the "Sublease
Premium") so long as (i) Vivus, Inc., a Delaware corporation is subleasing all
of the Premises pursuant to that certain sublease dated ______________, 1999
attached hereto as EXHIBIT A (the "Sublease"), (ii) Tenant is not in default of
the Lease beyond any applicable cure and notice periods and (iii) all remaining
amounts of the Sublease Premium are paid to Landlord at the same time as Basic
Rent. Tenant expressly acknowledges (i) that in the event the Sublease is
terminated or expires prior to the termination or earlier expiration of the
Lease or Tenant is in default beyond the applicable cure and notice periods,
this paragraph 4 shall be inoperative and the terms and conditions of paragraph
21.A shall govern the allocation of any Sublease Premium, and (ii) the
provisions of this paragraph 4 shall apply only to the Basic Rent (or its
equivalent) payable under the Sublease and not to any other rents or payments
made pursuant thereto.
5. RATIFICATION. The Lease, as amended by this Amendment, is hereby
ratified by Landlord and Tenant and Landlord and Tenant hereby agree that the
Lease, as so amended, shall continue in full force and effect.
6. MISCELLANEOUS.
(a) VOLUNTARY AGREEMENT. The parties have read this Amendment and
on the advice of counsel they have freely and voluntarily entered into this
Amendment.
(b) ATTORNEY'S FEES. If either party commences an action against
the other party arising out of or in connection with this Amendment, the
prevailing party shall be entitled to recover from the losing party reasonable
attorney's fees and costs of suit.
(c) SUCCESSORS. This Amendment shall be binding on and inure to the
benefit of the parties and their successors.
(d) COUNTERPARTS. This Amendment may be signed in two or more
counterparts. When at least one counterpart has been signed by each party, this
Amendment shall be deemed to have been fully executed, each counterpart shall
be deemed to be an original, and all counterparts shall be deemed to be one and
the same agreement.
8
15
IN WITNESS WHEREOF, Landlord and Tenant have executed this Agreement as of
the date first written above.
LANDLORD:
MOUNTAIN VIEW INCOME PARTNERS LLC,
a California limited liability company
By: Menlo Equities Associates VIII LLC, a
California limited liability company
By: Menlo Equities LLC, a California
limited liability company
By: Menlo Equities Inc., a
California corporation
By:
---------------------------
Henry D. Bullock,
President
TENANT
KVO PUBLIC RELATIONS, INC., an Oregon
corporation
By:
------------------------------
Name:
------------------------
Its:
-------------------------
By:
------------------------------
Name:
------------------------
Its:
-------------------------
9
16
AMENDMENT TO LEASE
This AMENDMENT TO LEASE (this "Amendment") is dated as of this 7th day of
January , 2000 by and between MOUNTAIN VIEW INCOME PARTNERS LLC, a California
limited liability company ("Landlord"), and KVO PUBLIC RELATIONS, INC., an
Oregon corporation ("Tenant").
RECITALS
A. DLC-Castro Commons, a California limited partnership ("DLC"), as
landlord, and Tenant, entered into that certain Office Lease dated July 30, 1996
(the "Lease"), for premises (the "Premises") with a street address of 1172
Castro Street, Mountain View, California, and more particularly described in the
Lease.
B. Landlord acquired the property on which the Premises are located on or
about December 8, 1997, and succeeded to the interest of DLC under the Lease.
C. Landlord and Tenant now desire to amend the Lease on the terms and
conditions set forth herein. Capitalized terms used in this Amendment and not
otherwise defined shall have the meanings assigned to them in the Lease.
AGREEMENT
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree
as follows:
1. BASIC RENT. The first paragraph of subparagraph 3.A. of the Lease is
deleted in its entirety and replaced with the following:
"Tenant shall pay to Landlord, as monthly rent ("Rent") for the
Premises the amount ("Basic Rent") of Thirty Seven Thousand One Hundred Fifty
Eight and 57/100 Dollars ($37,158.57) in lawful money of the United States of
America, subject to adjustment as provided in subparagraph 3.B, below. All Rent
shall be paid without deduction or offset, prior notice, abatement or demand,
except as herein provided to Landlord c/o Menlo Equities Management Company LLC,
2901 Tasman Drive, Ste. 220, Santa Clara, California 95054 or at such other
place as may be designated from time to time by Landlord."
2. BASIC RENT INCREASES. The first sentence of subparagraph 3.B of the
Lease is deleted in its entirety and replaced with the following:
"The Basic Rent shall be subject to adjustment on each anniversary of
the Commencement Date as follows:"
1.
17
3. USE OF THE PREMISES. The first sentence of paragraph 5 of the Lease
is deleted in its entirety and replaced with the following:
"The Premises shall be used exclusively for the purpose of general and
executive offices."
4. SUBLEASE PREMIUM. Notwithstanding anything to the contrary contained
in paragraph 21.A of the Lease, Tenant may retain fourteen cents ($0.14) per
rentable square foot per month of all Basic Rent (or its equivalent) received
by Tenant in excess of the Basic Rent provided hereunder (the "Sublease
Premium") so long as (i) Vivus, Inc., a Delaware corporation is subleasing all
of the Premises pursuant to that certain sublease dated December 21, 1999
attached hereto as EXHIBIT A (the "Sublease"), (ii) Tenant is not in default of
the Lease beyond any applicable cure and notice periods and (iii) all remaining
amounts of the Sublease Premium are paid to Landlord at the same time as Basic
Rent. Tenant expressly acknowledges (i) that in the event the Sublease is
terminated or expires prior to the termination or earlier expiration of the
Lease or Tenant is in default beyond the applicable cure and notice periods,
this paragraph 4 shall be inoperative and the terms and conditions of paragraph
21.A shall govern the allocation of any Sublease Premium, and (ii) the
provisions of this paragraph 4 shall apply only to the Basic Rent (or its
equivalent) payable under the Sublease and not to any other rents or payments
made pursuant thereto.
5. RATIFICATION. The Lease, as amended by this Amendment, is hereby
ratified by Landlord and Tenant and Landlord and Tenant hereby agree that the
Lease, as so amended, shall continue in full force and effect.
6. MISCELLANEOUS.
(a) VOLUNTARY AGREEMENT. The parties have read this Amendment and on
the advice of counsel they have freely and voluntarily entered into this
Amendment.
(b) ATTORNEY'S FEES. If either party commences an action against the
other party arising out of or in connection with this Amendment, the prevailing
party shall be entitled to recover from the losing party reasonable attorney's
fees and costs of suit.
(c) SUCCESSORS. This Amendment shall be binding on and inure to the
benefit of the parties and their successors.
(d) COUNTERPARTS. This Amendment may be signed in two or more
counterparts. When at least one such counterpart has been signed by each party,
this Amendment shall be deemed to have been fully executed, each counterpart
shall be deemed to be an original, and all counterparts shall be deemed to be
one and the same agreement.
2.
18
IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as of
the date first written above.
LANDLORD:
MOUNTAIN VIEW INCOME PARTNERS LLC,
a California limited liability company
By: Menlo Equities Associates VIII LLC, a
California limited liability company
By: Menlo Equities LLC, a California
limited liability company
By: Menlo Equities Inc., a
California corporation
By: /s/ Henry D. Bullock
----------------------------
Henry D. Bullock,
President
TENANT:
KVO PUBLIC RELATIONS, INC., an Oregon
corporation
By: /s/ Sharon VanSickle
----------------------
Name: Sharon VanSickle
Its: President/CEO
By:
------------------------
Name:
Its:
3.
19
OFFICE LEASE
THIS LEASE is made on the 30th day of July, 1996 by and between DLC-Castro
Commons, a California limited partnership (hereinafter called "Landlord"), and
Karakas Van Sickle Ouellette, an Oregon Corporation (hereinafter called
"Tenant").
IN CONSIDERATION OF THE MUTUAL PROMISES CONTAINED HEREIN, THE PARTIES AGREE
AS FOLLOWS:
1. Premises. Landlord leases to Tenant and Tenant leases from Landlord, upon
the terms and conditions herein set forth, those certain premises (the
"Premises") situated at 1172 Castro Street which is part of a two building
("Complex") in the City of Mountain View County of Santa Clara, California,
as outlined in Exhibit A, attached hereto and incorporated herein by this
reference, and described as follows: approximately fourteen thousand two
hundred thirty-seven (14,237) rentable square feet on the first and second
floors as shown on Exhibit "A".
2. Term. The term of this Lease shall commence on the date ("Commencement
Date") which is the earlier of the following:
A. Ten (10) days following the date that the existing tenant (Syntex)
vacates the Premises; or
B. The date on which Tenant takes possession of the Premises.
Landlord shall send to Tenant a notification, in the form attached hereto
as Exhibit B and incorporated herein by this reference, stating the
Commencement Date, when it is ascertained.
The term of the Lease shall end ten (10) years from the Commencement Date,
unless sooner terminated pursuant to any provision hereof. Should Lease not
commence on the first (1st) day of the month, the Lease shall nonetheless
terminate on the last day of the month of the last year of the Term as
provided herein.
3. Rent.
A. Basic Rent. Tenant shall pay to Landlord, as monthly rent ("Rent") for
the Premises the amount ("Basic Rent") of Thirty-One Thousand Three
Hundred Twenty-One and 40/100ths Dollars ($31,321.40) in lawful money of
the United States of America, subject to adjustment as provided in
subparagraph 3.B, below. All Rent shall be paid without deduction or
offset, prior notice, abatement or demand, except as herein provided, to
Landlord, at c/o Dewey Land Company, 999 Baker Way, Suite 300, San
Mateo, CA 94404. Attention: Accounting, or at such other place as may be
designated from time to time by Landlord.
Basic Rent for the term of this Lease shall be paid, in advance, on the
first (1st) day of each calendar month until the end of the term; Rent
for the first month of the term is paid pursuant to Paragraph 3E below.
Rent for any period during the term hereof which is for less than one
(1) full month shall be a pro rata portion of the monthly Rent payment.
Tenant acknowledges that late payment by Tenant to Landlord of Rent or
any other payment due Landlord will cause Landlord to incur costs not
contemplated by this Lease, the exact amount of such costs being
extremely difficult and impracticable to fix. Such costs include,
without limitation, processing and accounting charges, and late charges
that may be imposed on Landlord by the terms of any encumbrance and note
secured by any encumbrance covering the Premises. Therefore, if any
installment of Rent or other payment due from Tenant is not received by
Landlord within five (5) days following the date it is due and payable,
Tenant shall pay to Landlord, in addition to the Rent due, and in
addition to interest thereon as provided in Paragraph 14, an additional
sum of five percent (5%) of the overdue amount as a late charge. In the
event Lender's late charge to Landlord as Borrower is higher, then
Lender's late charge penalty shall be the percentage used for
calculating such a late charge; in no event, however shall such late
charge exceed ten percent (10%) of the amount delinquent. The parties
agree that this late charge and interest represents a fair and
reasonable estimate of the costs that Landlord will incur by reason of
late payment by Tenant. Acceptance of any late charge shall not
constitute a waiver of Tenant's default with respect to the overdue
amount, nor prevent Landlord from exercising any of the other rights and
remedies available to Landlord. Upon receipt of the rent, late charge,
or other sums due, this monetary default shall be deemed cured.
1
20
If the parties hereto have agreed upon a specific date for the
Commencement Date and if for any reason whatsoever Landlord cannot
deliver possession of the Premises on the Commencement Date, this
Lease shall not be void or voidable, nor shall Landlord be liable
to Tenant for any loss or damage resulting therefrom; but in such event.
Tenant shall not be obligated to pay Rent until possession of the Premises
is tendered to Tenant, and the Commencement Date and termination date of
this Lease shall be revised to conform to the date of Landlord's delivery
of possession.
B. BASIC RENT INCREASE. The Basic Rent shall be subject adjustment at the
commencement of the third (3rd) lease year of the term and each successive
year thereafter as follows:
The base for computing the first adjustment is the Consumer Price Index.
All Urban Consumers, San Francisco-Oakland-San Jose Metropolitan Area
average (1982-1984-100), published by the United States Department of
Labor, Bureau of Labor Statistics ("Index"), which is published most
immediately preceding the Commencement Date ("Beginning Index"). The Index
published most immediately preceding the adjustment date in question
("Extension Index") is to be used in determining the amount of the
adjustment. If the Extension Index has increased over the Beginning Index,
the Basic Rent for the following year (until the next Rent adjustment)
shall be set by multiplying the monthly Basic Rent set forth in Paragraph
3A by a fraction, the numerator of which is the Extension Index and the
denominator of which is the Beginning Index. Beginning with the
commencement of the fourth lease year, the Rent applicable immediately
prior to the Adjustment date shall be multiplied by a fraction, the
numerator of which is the Extension Index and the denominator of which is
the index used in determining the last prior adjustment in no event shall
the increase in the Basic Rent be less than two percent (2%) per year nor
any greater than six percent (6%) per year.
If the index is changed so that the base year differs from that in effect
when the term commences, the Index shall be converted in accordance with
the conversion factor published by the United States Department of Labor,
Bureau of Labor Statistics. If the Index is discontinued or revised during
the term, such other government index or computation with which it is
replaced shall be used to obtain substantially the same result as would be
obtained if the Index had not been discontinued or revised.
C. ADDITIONAL RENT; OPERATING EXPENSES AND TAXES. For purposes of this Lease,
the parties agree to the following:
(1) "Operating Expenses and Taxes" shall be the amount of the Operating
Expenses and Taxes for the 1996 calendar year. Landlord's estimate
for the calendar year 1996 is sixty-three cents ($0.63) per rentable
square foot per month.
(2) Tenant's proportionate share of Operating Expenses and Taxes is agreed
to be one hundred percent (100%) of the Building and thirty-four and
three tenths percent (34.3%) of the Complex. (Tenant's share of the
Complex's Operating Expenses and Taxes shall not include any costs for
the 1172 Castro Building billed to and reimbursed by Tenant).
(3) "Operating Expenses" shall mean all direct costs of operating,
maintaining and managing the Building and the Property (including
parking areas) including, but not limited to, all charges paid or
expenses incurred by Landlord for repairs; maintenance; utilities;
water; capital improvements required to meet changed government
regulations; cleaning and janitorial services; security services;
modifications or additional capital improvements or replacement of
existing building systems and equipment to reduce the Operating
Expenses; replacement of capital improvements or Building sewer
equipment existing as of the Commencement Date when required because
of normal wear and tear; maintenance and replacement of landscaping,
glazing, plumbing systems, electrical systems, heating and air
conditioning systems, a fitness center including rent at the same per
square foot rent that Tenant pays, automatic fire extinguishing
systems, conference center including rent at the same per square foot
rent that Tenant pays, roofs, down spouts, elevators, common area
interiors, ceilings, and Building exterior and common area doors;
rubbish removal; property and liability insurance; licenses, permits
and inspections; reasonable accounting, administrative, property
management equal to five percent (5%) of revenue, and legal expenses;
amortization (together with interest at the rate of twelve percent
(12%) per annum on the unamortized balance) on machinery and equipment
used to maintain the Premises, the Building, the parking areas or the
Property:
2
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amortization (together with interest at the rate of twelve percent
(12%) per annum on the unamortized balance) on other personal property
used by Landlord in the Building (including but not limited to window
coverings and carpeting in public corridors and common areas); costs,
expenses and overhead for maintaining and operating a management or
tenant relations office in the Building; and the reasonable cost of
contesting the validity or applicability of any government enactments
that may affect Operating Expenses. Notwithstanding anything to the
contrary herein, cost for replacement to the foundation and cost for
the repair/replacement of the structural element of the exterior wall,
i.e., structural beam, shall not be included as an Operating Expense
(and any such cost shall be borne by Landlord except that should such
repair or replacement be occasioned by the act or failure to act by
Tenant, then Tenant shall pay all of such cost upon demand by
Landlord). For example, should a major subsidence occur in the
foundation whereby twenty-five percent (25%) or more of the foundation
requires replacement, Landlord shall pay for such work. For example,
should a structural member of the exterior wall, i.e., structural
beam, fall, Landlord shall be responsible for cost of such
replacement.
(4) "Taxes" shall mean all Real Property Taxes as hereafter defined in
Paragraph 7, but excluding all other taxes which are paid by Landlord
and reimbursed by Tenant under this Lease.
In addition to the Base Rent, Tenant shall pay to Landlord, as Additional
Rent, Tenant's pro-rata share of the Operating Expenses and Taxes
(hereinafter "OPT"). For the calendar year 1998, the OPT is estimated to be
sixty-three cents ($0.63) per rentable square foot.
Notwithstanding anything in this Lease to the contrary, Landlord shall
calculate Tenant's proportionate share of the OPT (for purposes of both
estimated and actual calculations) as if the Building were fully occupied
regardless of the actual occupancy rate.
Tenant's pro rata share of OPT shall be Additional Rent and shall be paid
to Landlord, except as otherwise provided in this Lease, as follows: prior
to the commencement of each calendar year or within a reasonable period
thereafter, Landlord shall estimate Tenant's pro rata share of such OPT for
the following calendar year and Landlord shall notify Tenant of such
estimate in writing. Commencing on the first day of the first month of the
calendar year for which Landlord has notified Tenant of the estimated OPT,
and on the first day of every month thereafter in such year, Tenant shall
pay to Landlord, as Additional Rent, one-twelfth (1/12th) of Tenant's
estimated pro rata share of the yearly OPT. Within ninety (90) days of the
end of each calendar year for which Tenant has made estimated payments (the
"Adjustment Date"), Landlord shall furnish Tenant a statement with respect
to such year, showing actual charges for the past calendar year and the
total payments made by Tenant on the basis of Landlord's estimate. If
Tenant's actual pro rata share of the OPT exceeds the payments made by
Tenant based on Landlord's estimate, Tenant shall pay the deficiency to
Landlord within thirty (30) days of Tenant's receipt of Landlord's
statement. If the total payments by Tenant based on Landlord's estimate
exceed Tenant's actual pro rata share of the OPT, Tenant's excess payment
shall be credited toward future payments by Tenant of Basic Rent and/or
Additional Rent or refunded to Tenant within thirty (30) days of Landlord's
statement to Tenant if no future Basic Rent or Additional Rent is to become
due.
Upon request by Tenant to Landlord, Landlord shall allow Tenant to review
Landlord's records, at Landlord's office in place where the records are
kept, with respect to Operating Expenses at all reasonable times. Tenant
shall reimburse Landlord (within ten (10) days) for any costs incurred by
Landlord during such review by Tenant.
All Lease provisions with respect to late charges and interest on unpaid
Rent shall be applicable to Additional Rent, as well as to Basic Rent and
all other monetary amounts due from Tenant under this Lease.
D. Monetary Obligations as Rent. All monetary amounts payable by Tenant to
Landlord under this Lease including but not limited to Basic and Additional
Rent, and amounts paid by Landlord to cure Tenant's default(s) shall be
deemed "Rent" hereunder.
E. First Month's Rent. Landlord hereby acknowledges that upon Tenant's
execution of the Lease, Tenant shall have deposited Forth Thousand Two
Hundred Ninety and 71/100ths Dollars ($40,290.71) which represents the
First Month's Basic Rent of Thirty-One
3
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Thousand Three Hundred Twenty-One and 40/100ths Dollars ($31,321.40)
and the estimated OPT for the first month of Eight Thousand Nine
Hundred Sixty-Nine and 31/100ths Dollars ($8,969.31), i.e., $0.63 per
rentable sq. ft.
4. Security Deposit. Landlord acknowledges that, upon Tenant's execution of
the Lease, Tenant shall have deposited with Landlord a security deposit in
the sum of Forty Thousand and 00/100 Dollars ($40,000.00) to secure
Tenant's full and faithful performance of each term, covenant, and
condition of this Lease to be performed by Tenant. If Tenant fails to pay
any Basic Rent, Additional Rent or any other monetary amount due from
Tenant hereunder, or fails to keep or perform any term, covenant or
condition on its part to be made or performed or kept under this Lease,
then 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 part of said security deposit (i) to the extent of
any sum due to Landlord; or (ii) to make any required payment on Tenant's
behalf; or (iii) to compensate Landlord for any loss, damage, attorneys'
fees or expense sustained by Landlord due to Tenant's default. In such
event, Tenant shall, within ten (10) days of written demand by Landlord,
remit to Landlord sufficient funds to restore the security deposit to its
original sum. Tenant's failure to do so shall be a material breach of this
Lease. No interest shall accrue on the security deposit.
5. Use of the Premises. The Premises shall be used exclusively for the
purpose of office use for public relations and advertising uses. Tenant
shall not use, or permit the Premises or any part thereof to be used, for
any purpose other than the purpose for which the Premises are hereby
leased; and no use shall be made or permitted to be made of the Premises,
nor acts done in, on or about the Premises, which will increase the
existing rate of insurance upon the Building, or cause a cancellation of
any insurance policy covering the Building, or any part thereof, nor shall
Tenant sell or permit to be kept, used or sold,in or about the Premises,
any article which may be prohibited by the standard form of fire insurance
policies. Tenant shall not commit, or suffer to be committed, any waste
upon the Premises, or any public or private nuisance, or other act or
thing which may injure, annoy or disturb the quiet enjoyment of any
occupant of neighboring properties or other tenant in the Building or on
the Property; nor, without limiting the generality of the foregoing, shall
Tenant allow the Premises to be used for any improper, immoral, unlawful
or objectionable purpose. Tenant shall not place any harmful liquids in
the drainage system of the Premises or of the Building. Tenant shall not
place any loads upon the floors, walls, ceilings or roof which might
endanger the structure, nor overload any electrical, mechanical or other
systems.
No waste materials or refuse shall be dumped upon or permitted to remain
upon any part of the Premises outside the Building except in trash
containers placed inside exterior enclosures approved for that purpose by
Landlord, or inside the Building proper where designated by Landlord. No
materials or articles of any nature shall be stored upon or permitted to
remain outside of the Building. Subject to the provisions of Paragraph 35
of this Lease, Tenant shall not place anything or allow anything to be
placed near the glass of any window, door, partition or wall which may
appear unsightly from outside the Premises (including the common areas and
hallways of the Building). No loudspeaker or other device, system or
apparatus which can be heard outside the Premises shall be used in or at
the Premises without the prior written consent of Landlord which consent
may be granted at Landlord's absolute discretion.
Tenant covenants and agrees that no diminution of light, air or view by
any structure which may be hereafter erected, whether or not by Landlord,
or use of the Building by any other occupants or use of neighboring
buildings or areas by others, shall in any way affect this Lease, entitle
Tenant to any reduction of Rent hereunder, or result in any liability of
Landlord to Tenant.
Tenant shall comply with all the covenants, conditions and/or restrictions
("CC&R's") affecting the Premises, the Building and the Property, and all
rules and regulations affecting the Premises, which rules and regulations
shall be enforced by Landlord in a non-discriminatory and non-arbitrary
manner.
The term "Hazardous Material" means 'any hazardous or toxic substance,
material or waste, the storage, use or disposition of which is or becomes
regulated by any local governmental authority, the State of California or
the United States government. The term "Hazardous Material" includes,
without limitation, any material or substance which is (i) defined as a
"hazardous waste", "extremely hazardous waste" or "restricted hazardous
waste" under Sections 25115, 25117 or 25122.7, or listed pursuant to
Section 25140, of the California Health and Safety Code, Division 20,
Chapter 6.5 (Hazardous Waste Control Law), (ii) defined as a "hazardous
substance" under Section 25136 of the California Health and Safety Code,
Division 20, Chapter 6.8 (Carpenter-Presley-Tanner Hazardous Substance
Account Act), (iii) defined as a "hazardous material", "hazardous
substance" or "hazardous waste" under Section 25501 of the California
Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials
Release Response
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Plans and Inventory), (iv) defined as a "hazardous substance" under Section
25281 of the California Health and Safety Code, Division 20, Chapter 6.7
(Underground Storage of Hazardous Substances), (v) petroleum, (vi)
asbestos, (vii) listed under Article 9 or defined as hazardous or extremely
hazardous pursuant to Article 11 of Title 22 of the California
Administrative Code, Division 4, Chapter 20, (viii) designated as a
"hazardous substance" pursuant to Section 311 of the Federal Water
Pollution Control Act (33 U.S.C. Section 1317), (ix) defined as a
"hazardous waste", pursuant to Section 1004 of the Federal Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq. (42 U.S.C.
Section 6903), (x) defined as a "hazardous substance" pursuant to Section
101 of the Comprehensive Environmental Response Compensation and Liability
Act, 42 U.S.C. Section 9601 et seq. (42 U.S.C. Section 9601) or (xi) listed
or defined as "hazardous waste", "hazardous substance" or other similar
designation by any regulatory scheme of the State of California or the
United States government.
Tenant, at its sole cost, shall comply with all laws and regulations
relating to the storage, use and disposal of Hazardous Materials on the
premises. If Tenant does store, use or dispose of any Hazardous Materials
on the Premises, Tenant shall notify Landlord, in writing, at least five
(5) days prior to their first appearance on the Premises; provided,
however, that Tenant shall have the right to store reasonable amounts of
chemicals and/or solvents used for ordinary office equipment without
notifying Landlord. Tenant shall be solely responsible for and shall
defend, indemnify and hold Landlord, and Landlord's partners, officers,
employees, successors, assigns and agents, harmless from and against all
claims, demands, damages, costs and liabilities, including attorneys' fees
and costs, arising out of or in connection with the storage, use or
disposal of Hazardous Materials by Tenant, its agents, employees,
contractors, or sublessees.
If the presence of Hazardous Materials on the Premises caused or permitted
by Tenant, its agents, employees, contractors, or sublessees results in or
is likely to result in contamination or deterioration of water or soil
resulting in a level of contamination greater than the safe levels
established by any governmental agency having jurisdiction over such
contamination, or if any investigation of conditions, or any clean-up,
remedial removal or restoration work is required by any federal, state or
local governmental agency or political subdivision ("Governmental Agency")
because of the level of Hazardous Material in the soil or ground water or
on the Premises caused or permitted by Tenant, its agents, employees,
contractors and or sublessees, then Tenant shall promptly, and at its sole
cost, take any and all action necessary to investigate and clean up such
contamination. Tenant shall further be solely responsible for, and shall
defend, indemnify and hold Landlord and Landlord's partners, officers,
employees, successors, assigns and agents harmless from and against, all
claims, demands, damages, costs and liabilities, including attorneys' fees
and costs, arising out of or in connection with any removal, clean-up and
restoration work and materials required hereunder to return the Premises,
the Property or the surrounding properties to the condition existing prior
to the appearance of the Hazardous Materials caused or permitted by Tenant,
its agents, employees, contractors, or sublessees.
If Landlord has good cause to believe that the Premises or the Property
have or may become contaminated by Hazardous Materials, Landlord may cause
tests to be performed, including wells to be installed on the Property, and
may cause the soil or ground water to be tested to detect the presence of
Hazardous Materials by the use of such tests as are then customarily used
for such purposes. The cost of such tests of the installation, maintenance,
repair and replacement of such wells shall be paid by Tenant.
The termination of the Lease shall not terminate the parties' respective
rights and obligations under this Paragraph 5, and the parties hereto
expressly agree that the provisions contained herein shall survive the
termination of Tenant's leasehold estate.
Tenant shall abide by all laws, ordinances and statutes, as they now exist
or may hereafter be enacted by legislative bodies having jurisdiction
thereof, relating to its use and occupancy of the Premises.
The provisions of this Paragraph 5 are for the benefit of the Landlord only
and shall not be construed to be for the benefit of any other person or
occupant of the Premises.
6. Improvements. Landlord will, at its sole expense and using contractors of
its choice, make improvements ("Improvements") to the Premises as specified
in Exhibit C attached hereto and incorporated herein by this reference. On
or before September 1, 1996, Tenant shall deliver to Landlord, for
Landlord's approval, its final plans with detailed specifications and
listing of finish materials, all of which have been approved by Tenant.
Notwithstanding anything in this Lease to the contrary, if Tenant fails to
provide Landlord with such final plans, specifications, and finish material
approved by Tenant on or before the date specified for such delivery, or if
Tenant changes any of the plans, specifications or finish materials
subsequent to such date, then the Commencement Date shall be the
Anticipated Completion Date as hereafter set forth, or the date
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of Landlord's notification to Tenant of Substantial Completion (as hereinafter
defined) of the improvements, or the date on which Tenant takes possession of
the Premises, whichever shall first occur.
Upon Landlord's approval (which shall not be unreasonably withheld or delayed)
of such final plans and specifications including finish materials approved by
Tenant, and upon Landlord's approval of the same, Landlord shall diligently
undertake to construct the improvements in accordance with such final plans,
specifications and finish materials as approved by Landlord and Tenant
(collectively referred to as "Final Plans"). All such construction shall be
performed with due diligence and in substantial accordance with the Final Plans.
Landlord agrees to use all commercially reasonable efforts to substantially
complete the improvements by January 1, 1997 ("Anticipated Completion Date"),
but without any warranty as to when such improvements shall be substantially
completed.
Landlord's obligation to construct the improvements is specifically subject to
any changes or other requirements of or imposed by all applicable governmental
body(ies), agency(ies) and/or utility(ies); Landlord shall notify Tenant of any
such changes and/or requirements promptly after Landlord becomes aware of the
same. Any improvements to the Premises not expressly shown or stated in the
Final Plans shall be made by Tenant at its sole cost and expense in accordance
with Paragraph 11 of this Lease; provided, however, that notwithstanding
anything in this Lease to the contrary, any delay in Landlord's construction of
the improvements caused in whole or in part by Tenant including, but not limited
to, delays caused by additional improvements made or any changes requested by
Tenant, shall not delay the Commencement Date of this Lease, and Substantial
Completion, as hereinafter defined, for purposes of determining the Commencement
Date of this Lease, shall be at such time as the improvements would have been
Substantially Complete absent such additional improvements made or changes
requested by Tenant.
It is understood that the Final Plans and the exact location of doors, walks,
lighting, plumbing and all other facilities and improvements are subject to such
minor changes (for example: Schlage lock set can be replaced with like kind
alternate) as Landlord, or Landlord's architect or general contractor in charge
of the construction of the improvements, determine to be necessary desirable in
the course of construction of or to the Premises, and no such changes shall
affect this Lease or constitute a breach by Landlord hereunder. Landlord agrees
to not materially deviate from the final approved plans without Tenant's
consent, which consent shall not be timely or unreasonably withheld.
Tenants shall have twenty (20) days from the date of Substantial Completion to
provide Landlord with a list of items requiring repair or replacement. Upon
Landlord's receipt of such list, Landlord shall proceed to correct such "punch
list" items with due diligence.
7. Taxes and Assessments.
A. Tenant shall pay before delinquency any and all taxes, assessments, license
fees and public charges levied, assessed or imposed upon or against
Tenant's fixtures, equipment, furnishings, furniture, appliances and
personal property installed or located on or within the Premises. Tenant
shall cause said fixtures, equipment, furnishings, furniture, appliances
and personal property to be assessed and billed separately from the real
property of Landlord. If any of Tenant's said personal property shall be
assessed with Landlord's real property, Tenant shall pay to Landlord the
taxes attributable to Tenant within thirty (30) days after receipt of a
written statement from Landlord setting forth the taxes applicable to
Tenant's property.
B. All Real Property Taxes shall be paid by Landlord. The term "Real Property
Taxes", as used herein, shall mean and include: (i) all taxes, assessments,
levies and other charges of any kind or nature whatsoever, general and
special, foreseen and unforeseen (including without limitation, all
installments of principal and interest required to pay any general or
special assessments for public improvements, and any increases resulting
from reassessments caused by any change in ownership of the Premises, the
Building or the Property, or otherwise) now or hereafter imposed by any
governmental or quasi-governmental authority or special district having the
direct or indirect power to tax or levy assessments, which are levied or
assessed against, or with respect to the value, occupancy, or use of all or
any portion of the Property, the Building or the Premises (as now
constructed or as may at any time hereafter be constructed, altered, or
otherwise changed) or Landlord's interest therein; any improvements located
within the Property, the Building or the Premises (regardless of
ownership); the fixtures, equipment and other property of Landlord, real or
personal, that are an integral part of and located in, on or about the
Property, the Building or the Premises; and landscaping areas, walkways and
parking areas; and (ii) all costs and fees (including reasonable attorney's
fees) incurred by
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Landlord in reasonably contesting any Real Property Tax and in
negotiating with public authorities as to any Real Property Tax.
"Real Property Taxes" shall not include any franchise, rental, income,
inheritance or profit tax, capital levy or excise tax payable by
Landlord.
If at any time during the term of this Lease the taxation or
assessment of the Property, the Building or the Premises prevailing as
of the Commencement Date of this Lease shall be altered so that in
lieu of or in addition to any Real Property Tax described above there
shall be levied, assessed or imposed (whether by reason of a change in
the method of taxation or assessment, creation of a new tax or charge,
or any other cause) an alternate or additional tax or charge (i) on
the value, use or occupancy of the Property, the Building or the
Premises or Landlord's interest therein, or (ii) on or measured by the
gross receipts, income or rentals from the Property, the Building or
the Premises, on Landlord's business of leasing the Property, the
Building or the Premises, or Landlord's interest therein, or based on
parking, employment, production or the like in, on or about the
Property, the Building or the Premises, or computed in any manner with
respect to the operation of the Property, the Building or the
Premises, then any such tax or charge, however designated, shall be
included within the meaning of the term "Real Property Taxes" for
purposes of this Lease. If any Real Property Tax is based in part upon
property or rents unrelated to the Property, the Building or the
Premises, then only that part of such Real Property Tax that is fairly
allocable to the Property, the Building or the Premises shall be
included within the meaning of the term "Real Property Taxes".
If, at any time during the term of this Lease, any assessments which
would be deemed to be Real Property Taxes are levied against the
Premises, the Building or the Property, Landlord may elect either to
pay the assessment in full or to allow the assessment to go to bond
and to pay it in installments. In either case, however, Tenant shall
only be obligated to pay to Landlord, with regard to any such
assessment, each time payment of Real Property Taxes is made, a sum
equal to that which would have been payable by Tenant as its pro rata
percentage of the installments of principal and interest which would
have become due during the term of this Lease had Landlord allowed the
assessment to go to bond.
8. Insurance.
A. Indemnity. Except for Landlord's gross negligence or willful
misconduct, Tenant agrees to indemnify and defend (with counsel
acceptable to Landlord) Landlord against the hold Landlord and
Landlord's partners, employees, officers, assigns and successors
harmless from any and all demands, claims, causes of action,
judgments, obligations or liabilities, and all reasonable expenses
incurred in investigating or resisting the same (including reasonable
attorney's fees), on account of, or arising out of, the use or
occupancy of the Premises. 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 use or occupancy of the Premises specifically
including, without limitation, any liability for injury to the person
or property of Tenant, its agents, officers, employees, licensees and
invitees.
B. Liability and Worker's Compensation Insurance. Tenant shall, at
Tenant's expense, obtain and keep in force during the term of this
Lease a policy of worker's compensation insurance and a policy of
comprehensive public liability insurance insuring Landlord and Tenant,
with cross-liability endorsements, against any liability arising out
of the use or occupancy of the Premises and all areas appurtenant
thereto, including parking areas. Such insurance shall be in an amount
satisfactory to Landlord of not less than $1,000,000 combined single
limit for bodily injury or death as a result of any one occurrence,
and $1,000,000 for damage to property as a result of any one
occurrence. The insurance shall be with companies admitted to do
business in the State of California and companies of Best's Rating
Guide of A+9 or better. Tenant shall deliver to Landlord, prior to
taking possession of the Premises, a certificate of insurance
evidencing the existence of the policy required hereunder, and such
certificate shall certify that the policy (i) names Landlord as an
additional insured; (ii) shall not be cancelled or altered without
thirty (30) days prior written notice to Landlord; and (iii) the
coverage is primary and any coverage carried or obtained by Landlord
is in excess thereto.
Landlord shall, at all times during the term hereof, maintain in
effect a policy of public liability and property damage insurance
insuring against any liability (including bodily injury or property
damage) arising on or about the Property with policy limits determined
by Landlord in its sole discretion. Such insurance costs shall be
included in Operating Expenses described in Paragraph 3 above.
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C. Insurance of Personal Property, Fixtures and Equipment. Tenant shall
at all times during the term hereof, and at its sole cost and expense,
maintain in effect policies of insurance covering: (i) its personal
property, inventory, alterations, fixtures and equipment located on
the Premises, in an amount not less than one hundred percent (100%) of
their actual replacement value, providing protection against any peril
included within the classification "Fire and Extended Coverage,"
together with insurance against sprinkler damage, vandalism and
malicious mischief; and (ii) all plate glass on the Premises. The
proceeds of such insurance, so long as this Lease remains in effect,
shall be used to repair or replace the personal property, inventory,
alterations, fixtures, equipment and plate glass so insured. In
addition, Tenant shall obtain and keep in force, at all times during
the term of this Lease, a policy of business interruption insurance
coverage, insuring that one hundred percent (100%) of the monthly
Basic Rent, and all Additional Rent due hereunder, will be paid to
Landlord for a period of not less than one (1) year, if the Premises
are damaged or destroyed or rendered unfit for occupancy by a risk
insured against by a policy of standard fire and extended coverage
insurance, with vandalism, sprinkler damage and malicious mischief
endorsements.
D. Property Insurance. Landlord shall obtain and keep in force during the
term of this Lease a policy or policies of insurance coverage
including fire and extended coverage (and, at Landlord's sole and
absolute discretion, earthquake and flood), for loss or damage to the
Premises and to the Building, in the amount of the full replacement
value thereof. Such insurance costs and deductibles shall be included
in Operating Expenses described in Paragraph 3 above.
E. Mutual Waiver of Subrogation. The parties hereto release each other
and their respective authorized representatives, partners, officers,
agents, employees and servants, from any and all claims, demands,
loss, expense or injury to any person, or to the Premises or Building,
or to the furnishings, fixtures or equipment located therein, caused
by or resulting from perils, events or happenings which are the
subject of insurance in force at the time of such loss. Each party
shall cause each insurance policy obtained by it to provide that the
insurer waives all right of recovery by way of subrogation against
either party in connection with any damage covered by any policy.
Neither party shall be liable to the other for any damage caused by
fire or any of the risks insured against under any insurance policy in
effect as required by this Lease.
9. Operation, Management, Services and Utilities. All expenses of operation
and management of the Premises and the Building or the Property, including,
but not limited to, water, gas, light, heat, power, electricity, telephone,
trash pick-up, property management services, landscaping, janitorial
services, sewer charges, pest control, security charges, and all other
services supplied to or consumed on the Premises or the Building or the
Property shall be controlled by Landlord and be included in Operating
Expenses described in Paragraph 3 above, except to the extent such charges
are directly billed to Tenant. Landlord agrees to manage the Property in a
first class manner similar to other comparable buildings in the El Camino
Hospital/Mountain View marketplace. Landlord shall not be liable for and
Tenant shall not be entitled to any abatement or reduction of Rent by
reason of any interruption or failure of utility or other services to the
Premises during the Lease term. Utilities and services shall be provided in
accordance with the Standards for Utilities and Services set forth in
Exhibit D attached hereto and incorporated herein. The parties agree to the
terms and provisions set forth in the Standards and to any modifications or
additions thereto.
10. Repair and Maintenance.
A. Subject to provisions of Paragraph 15 of this Lease, below, Landlord
shall keep and maintain the roof, paving, structural elements,
landscaping, irrigation systems and exterior walls of the Building and
the Property in good order and repair. Landlord shall also keep and
maintain in good order and repair the windows, window frames, doors,
hardware, interior walls, and the electrical, plumbing, lighting,
heating and air conditioning systems. Landlord agrees to make such
repairs as necessary as promptly as possible. Such expenses shall be
included in Operating Expenses for purposes of Paragraph 3 above. If,
however, any repairs or maintenance are required because of an act
or omission of Tenant, or its agents, employees or invitees, then
Tenant shall pay to Landlord upon demand one hundred percent (100%) of
the costs of such repair or maintenance. Notwithstanding anything in
this Lease to the contrary, after the initial construction of the
improvements in the Premises by Landlord pursuant to the provisions of
Paragraph 6 of this Lease, Landlord shall have no obligation to alter,
remodel, improve, decorate, or paint the Premises or any part thereof.
B. Except as expressly provided in subparagraph 10.A above, Tenant shall,
at its sole cost, keep and maintain the interior of the Premises in
good and sanitary order, condition and repair.
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Should Tenant fail to maintain the Premises as required hereunder
forthwith upon notice from Landlord, then Landlord, in addition to all
other remedies available hereunder or by law, and without waiving any
alternative remedies, may make or do the same, and in that event,
Tenant shall reimburse Landlord for the cost of such maintenance or
repairs as Additional Rent, at Landlord's election on demand or on the
next date upon which Basic Rent becomes due.
Tenant hereby expressly waives the provisions of Subsection 1 of
Section 1932, and Sections 1941 and 1942 of the Civil Code of
California and all rights to make repairs at the expense of Landlord,
as provided in Section 1942 of said Civil Code.
Alterations and Additions. Tenant shall not make, or suffer to be made, any
alterations, improvements or additions in, on or about, or to the Premises
or any part thereof, without the prior written consent of Landlord, which
consent shall not be unreasonably withheld, and without a valid building
permit issued by the appropriate governmental authority. Such alterations,
improvements and additions shall then be performed by Landlord's
contractors.
As a condition to giving such consent, Landlord may require that Tenant
agree to remove any such alterations, improvements or additions at the
termination of this Lease, and to restore the Premises to their prior
condition. Any alteration, addition or improvements to the Premises, except
movable furniture and trade fixtures not affixed to the Premises, shall
become the property of Landlord upon installation, and shall (subject to
the provisions of the immediately preceding sentence) remain upon and be
surrendered with the Premises at the termination of this Lease. Landlord
can elect, however, within thirty (30) days before expiration of the term
or within five (5) days after termination of the term, to require Tenant to
remove any alterations, additions or improvements that Tenant has made to
the Premises. If Landlord so elects, Tenant shall restore the Premises to
the condition designated by Landlord in its election, before the last day
of the term, or within thirty (30) days after notice of election is given,
whichever is later.
Alterations, additions and improvements which are not to be deemed trade
fixtures include heating, lighting and electrical systems, air
conditioning, partitioning, window coverings, carpeting, or any other
installation which has become an integral part of the Premises.
If Landlord consents to Tenant's making any alterations, improvements or
additions in the Premises, Tenant shall be responsible for the timely
posting of notices of non-responsibility on Landlord's behalf, which shall
remain posted until completion of the alterations, additions or
improvements, and Tenant shall provide Landlord with a copy of such notice
of non-responsibility prior to commencement of any such construction.
Tenant's failure to post notices of non-responsibility as required
hereunder shall be a breach of this Lease and Tenant shall indemnify
Landlord from and against all claims, losses, damages, and/or liability
resulting therefrom, including reasonable attorney's fees.
If, during the term hereof, any alteration, addition or change of any sort
through all or any portion of the Premises is required, due to Tenant's
particular use of the Premises, by law, regulation, ordinance or order of
any public agency. Tenant, at its sole cost and expense, shall promptly
make the same.
12. Acceptance of the Premises and Covenant to Surrender. By entry and taking
possession of the Premises pursuant to this Lease, upon Substantial
Completion of the Improvements, Tenant, subject to Landlord's obligation to
correct so-called "punch list" items, as provided in Paragraph 6, above,
accepts the Premises as being in good and sanitary order, condition and
repair, and accepts the Building and the Improvements included in the
Premises in their condition existing as of the date of such entry and
without representation or warranty by Landlord as to the condition of the
Building or the Premises, or as to the use or occupancy which may be made
thereof. Tenant further accepts any Improvements to be constructed by
Landlord as being completed in accordance with the Final Plans for such
improvements, except for items specified in writing as punch list items
pursuant to Paragraph 6.
Tenant agrees, on the last day of the term hereof, or on any sooner
termination of this Lease, to surrender the Premises, together with all
alterations, additions and improvements which may have been made in, to or
on the Premises by Landlord or Tenant, to Landlord, broom clean, in good
and sanitary order, condition and repair, except for such wear and tear as
would be normal for the period of Tenant's occupancy. Tenant further agrees
that at the end of the term of this Lease or upon any sooner termination of
this Lease, Tenant, at its sole expense, shall have damage interior walls
and columns patched and repainted as necessary, any damaged ceiling tile
replaced, light lenses and ballasts restored to good order and repair, the
drapes/blinds cleaned, any damaged doors and cabinetry replaced or repaired
and the carpet steam cleaned and, if damaged, replaced to match the
existing carpet.
Tenant, on or before the end of the term of this Lease or on any sooner
termination of this Lease, shall remove all its personal property and trade
fixtures from the Premises, and all property not so
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removed shall be deemed to be abandoned by Tenant and title to the same
shall thereupon pass to Landlord without compensation to Tenant. Landlord
may, upon termination of this Lease, remove, store and/or sell all moveable
personal property and trade fixtures so abandoned by Tenant, at Tenant's
sole cost, and repair any damage caused by such removal at Tenant's sole
cost.
If the Premises are not so surrendered at the end of the term or sooner
termination of this Lease, then Tenant shall indemnify Landlord against
loss or liability resulting from the delay by Tenant in so surrendering the
Premises, including, without limitation, any claims made by any succeeding
tenant founded on such delay.
No act or conduct of Landlord, whether consisting of the acceptance of the
keys to the Premises or otherwise, shall be deemed to be or to constitute
an acceptance of the surrender of the Premises by Tenant prior to the
expiration of the term hereof, and such acceptance of any surrender by
Tenant shall only be evidenced by a written acknowledgement of acceptance
of surrender signed by Landlord. The voluntary or other surrender of the
Premises by Tenant or a mutual cancellation of this Lease shall not work as
a merger and, at the option of Landlord, shall either terminate all
existing subleases or operate as an assignment to Landlord of all such
subleases.
After the expiration or earlier termination of this Lease, Tenant shall
execute, acknowledge and deliver to Landlord, within ten (10) days after
written demand from Landlord to Tenant, any quitclaim deed or other
document required by any reputable title company, licensed to operate in
the State of California, to remove the cloud or encumbrance created by this
Lease from the Property.
13. Events of Default. The occurrence of any of one or more of the following
events shall constitute a default hereunder by Tenant:
A. The abandonment of the Premises by Tenant. Abandonment is herein
defined to include, but is not limited to, any absence by Tenant from
the Premises for five (5) days or longer.
B. The failure by Tenant to make any payment of Rent, or other payment
required to be made by Tenant hereunder, when due.
C. The failure by Tenant to observe or perform any of the express or
implied covenants or provisions of this Lease to be observed or
performed by Tenant, other than monetary or as specified in
subparagraphs 13.A or 13.B, above, where such failure continues for a
period of twenty (20) days after written notice thereof from Landlord
to Tenant; provided, however, that any such notice shall be in lieu of,
and not in addition to, any notice required under California Code of
Civil Procedure Section 1161; provided further, that if the nature of
Tenant's default is such that more than twenty (20) days are reasonably
required for its cure, then Tenant shall not be deemed to be in default
if Tenant shall commence such cure within said twenty (20) day period
and thereafter diligently prosecute such cure to completion.
D. Any assignment or subletting of this Lease without the consent of
Landlord, including, without limitation, an involuntary assignment as
defined in Paragraph 21, below.
E. Chronic delinquency by Tenant in the payment of Rent or any other
periodic payments required to be paid by Tenant under this Lease.
"Chronic delinquency" shall mean failure by Tenant to pay Rent, or any
other payments required to be paid by Tenant under this Lease, within
three (3) days after written notice thereof for any three (3) months
(consecutive or nonconsecutive) during any twelve (12) month period. In
the event of a chronic delinquency, at Landlord's option, Landlord
shall have the right, in addition to all other remedies under this
Lease and at law, to require that Rent be paid by Tenant quarterly, in
advance. This provision shall not limit in any way nor be construed as
a waiver of the rights and remedies of Landlord provided herein or by
law in the event of even one instance of delinquency.
14. Remedies for Default.
A. In the event of any breach of this Lease by Tenant, or an abandonment
of the Premises by Tenant, Landlord has the option of (i) removing all
persons and property from the Premises and repossessing the Premises,
in which case any of Tenant's property which Landlord removes from the
Premises may be stored in a public warehouse or elsewhere at the cost
of, and for the account of, Tenant, or (ii) allowing Tenant to remain
in full possession and control of the Premises. If Landlord chooses to
repossess the Premises, then this Lease will automatically terminate in
accordance with the provisions of California Civil Code Section 1951.2.
In the event of such termination of this Lease, Landlord may recover
from Tenant: (a) the worth at the time of award of the unpaid Rent
which had
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been earned at the time of termination, including interest at the maximum
rate an individual is permitted by law to charge; (b) the worth at the time
of award of the amount by which the unpaid Rent which would have been
earned after termination until the time of award exceeds the amount of such
rental loss that Tenant proves could have been reasonably avoided,
including interest at the maximum rate an individual is permitted by law to
charge; (c) the worth at the time of award of the amount by which the
unpaid Rent for the balance of the term after the time of award exceeds the
amount of such rental loss that Tenant proves could be reasonably avoided;
and (d) any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform its obligations
under this Lease or which, in the ordinary course of things, would be
likely to result therefrom. "The worth at the time of the award", as used
in (a) and (b) of this paragraph, is to be computed by allowing interest at
the maximum rate an individual is permitted by law to charge. "The worth at
the time of the award", as referred to in (c) of this paragraph, is to be
computed by discounting the amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of the award, plus one percent
(1%).
B. If Landlord chooses not to repossess the Premises, but allows Tenant to
remain in full possession and control of the Premises, in accordance with
provisions of California Civil Code Section 1951.4, then Landlord may treat
this Lease as being in full force and effect, and may collect from Tenant
all Rents as they become due through the termination date of this Lease, as
specified in this Lease. For the purpose of this Paragraph 14, the
following shall not constitute a termination of Tenant's right to
possession:
(1) Acts of maintenance or preservation, or efforts to relet the Premises;
(2) The appointment of a receiver on the initiative of Landlord to protect
its interest under this Lease.
C. Tenant shall be liable immediately to Landlord for all costs Landlord
incurs in reletting the Premises, including, without limitation, brokers'
commissions, expenses of remodeling the Premises required by the reletting,
and like costs. Reletting can be for a period shorter or longer than the
remaining term of this Lease. Tenant shall pay to Landlord the Rent due
under the new lease, on the dates the Rent is due, less the Rent Landlord
receives from this Lease, unless Landlord notifies Tenant that Landlord
elects to terminate this Lease. After Tenant's default and for as long as
Landlord does not terminate Tenant's right to possession of the Premises,
if Tenant obtains Landlord's consent, Tenant shall have the right to assign
its Interest in this Lease, or sublet all or a portion of the Premises, but
Tenant shall not be released from liability and obligations under this
Lease. Landlord's consent to a proposed assignment or subletting shall be
as required in Paragraph 21.
D. If Landlord elects to relet the Premises as provided in this Paragraph 14,
then any Rent that Landlord receives from reletting shall be applied to the
payment of:
(1) First, any indebtedness from Tenant to Landlord other than Rent due
from Tenant;
(2) Second, all costs, including for maintenance, incurred by Landlord in
reletting; and
(3) Third, Rent due and unpaid under this Lease.
E. After deducting the payments referred to in this Paragraph 14, any sum
remaining from any Rent which Landlord receives from reletting shall be
held by Landlord and applied in payment of future Rent as Rent becomes due
under this Lease. In no event shall Tenant be entitled to any excess Rent
received by Landlord. If, on the date Rent is due under this Lease, the
Rent received from any reletting is less than the Rent due on that date,
then Tenant shall pay to Landlord, in addition to the remaining Rent due,
all costs which Landlord incurred in reletting, including without
limitation maintenance, that remain after applying the Rent received from
the reletting, as provided in this Paragraph 14.
F. Landlord, at any time after Tenant commits a default, can cure the default
at Tenant's cost. If Landlord at any time, by reason of Tenant's default,
pays any sum or does any act that requires the payment of any sum, then the
sum paid by Landlord shall be due immediately from Tenant to Landlord at
the time the sum is paid and, if paid at a later date, shall bear interest
at the maximum rate an individual is permitted by law to charge from the
date the sum is paid by Landlord until Landlord is reimbursed by Tenant.
The sum, together with interest on it, shall be Additional Rent.
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G. Any Rent not paid when due shall bear interest at the maximum rate an
individual is permitted by law to charge from the date due until paid
and shall be subject to the late charge set forth in subparagraph 3.A
above.
15. Destruction.
A. In the event the Premises or the Building are damaged by any casualty
which is covered under insurance carried by Tenant or Landlord, then
Landlord or Tenant, whichever receives such insurance proceeds, shall
restore such damage to the extent that the insurance proceeds are
available provided such restoration can be completed within ninety (90)
days after the commencement of the work. In such event, this Lease shall
continue in full force and effect except that Tenant shall be entitled to
proportionate reduction of Rent while such restoration takes place, such
proportionate reduction to be based upon the extent to which the
restoration efforts interfere with the Tenant's business in the Premises.
Landlord shall, at all times during the Term of this Lease, procure and
continue the force insurance coverage to cover an amount equal to at least
ninety (90%) replacement value of the building. Notwithstanding the
foregoing, if any such damage or destruction occurs during the last six
(6) months of the term of this Lease and Tenant has not previously
exercised its option to renew pursuant to Section 39 hereof, Landlord
shall not be obligated to repair such damage.
B. If the Premises, the Building or common areas are damaged by risks
not covered by such insurance or the insurance proceeds available to
Landlord are less than ninety percent (90%) of the cost of restoration, or
if the restoration cannot be completed within six (6) months after the
commencement of work in the opinion of the architect or engineer appointed
by Landlord, then Landlord shall have the option to (i) repair or restore
such damage, this Lease continuing in full force and effect so long as the
Premises can be used by Tenant but the Base Rent and Additional Rent to be
equitably reduced, or (ii) give notice to Tenant at any time within ninety
(90) days after such damage terminating this Lease as of the date to be
specified in such notice, which date shall not be less than thirty (30)
and no more than sixty (60) days after giving of such notice.
Notwithstanding the foregoing, if any such uninsured damage or destruction
occurs during the last six (6) months of the term of this Lease, and
Tenant has not previously exercised its option to renew pursuant to
Section 39 hereof, Landlord shall not be obligated to repair such damage.
C. If the Premises are destroyed ("Destroyed" shall mean more than fifty
percent (50%) of the Premises), in whole or in part, from any cause,
Landlord shall, at its option, either:
(1) Rebuild or restore the Premises to their condition prior to the
damage or destruction; or
(2) Terminate this Lease.
If Landlord does not give Tenant notice in writing within sixty (60) days
from the destruction of the Premises of its election to either rebuild and
restore the Premises, or to terminate this Lease, and provided that
insurance proceeds actually available to Landlord for the purpose of
restoring the complex or the Premises are sufficient to rebuild or restore
the Premises, then Landlord shall be deemed to have elected to rebuild or
restore the Premises, in which event Landlord agrees, at its expense,
promptly to rebuild or restore the Premises to the condition existent as of
the date of Substantial Completion.
If Landlord does not complete the re-building or restoration within one
hundred eighty (180) days following the date of destruction (such period
of time to be extended for delays as provided in Paragraph 36, then Tenant
shall have the right to terminate this Lease by giving written notice to
Landlord within fifteen (15) days of the expiration of such period.
Landlord's obligation to rebuild or restore the Premises shall not include
restoration of Tenant's trade fixtures, equipment or merchandise, or any
improvements, alterations or additions made by Tenant to the Premises.
Unless this Lease is terminated pursuant to the foregoing provisions, this
Lease shall remain in full force and effect. Tenant hereby expressly
waives the provisions of Section 1932, Subdivision 2, and Sections 1933,
Subdivision 4, of the California Civil Code.
In case of destruction or damage caused by a risk not covered by business
interruption insurance described in Paragraph 8, there shall be an
abatement or reduction of Rent between the date of destruction and the
date of substantial completion of restoration, based on the extent to
which the destruction interferes with Tenant's use of the Premises.
If the Complex is damaged or destroyed to the extent of not less than
thirty three and one third percent (33 1/3%) of the replacement cost
thereof, then Landlord may elect to terminate this Lease, whether the
Premises are injured or not, provided that Landlord terminates the leases
of all other tenants in the Complex similarly situated in terms of damage
or destruction to their respective premises.
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16. Condemnation. If any part of the Premises shall be taken for any public or
quasi-public use, under any statute or by right of eminent domain, or
private purchase in lieu thereof, and a part thereof remains which is
susceptible of occupancy hereunder, then this Lease shall, as to the part
so taken, terminate as of the date title vests in the condemnor or
purchaser, and the Rent payable hereunder shall be adjusted so that Tenant
shall be required to pay for the remainder of the term only such portion of
the Rent as the value of the part remaining after such taking bears to the
value of the entire Premises prior to such taking. Landlord shall have the
right to terminate this Lease in the event that such taking causes a
reduction in Rent payable hereunder by twenty-five percent (25%) or more.
If all of the Premises or such part thereof is taken so that there does not
remain a portion susceptible for occupancy hereunder, as reasonably
necessary for Tenant's conduct of its business as contemplated in this
Lease, then this Lease shall thereupon terminate. If a part or all of the
Premises is taken, then all compensation awarded upon such taking shall go
to Landlord and Tenant shall have no claim thereto, and Tenant hereby
irrevocably assigns and transfers to Landlord any right to compensation or
damages to which Tenant may become entitled during the term hereof by
reason of the purchase or condemnation of all or a part of the Premises.
Tenant shall have the right to separately petition and to claim and recover
from the condemning authority, but not from Landlord, such compensation as
may be separately awarded or recoverable by Tenant in Tenant's own right on
account of any and all damage to Tenant's business, including without
limitation the loss of goodwill by reason of any appropriation, and for or
on account of any cost or loss to which Tenant might be put in removing and
relocating Tenant's merchandise, furniture, movable trade fixtures and
equipment. In no event, however, shall the loss of goodwill include any
diminution in the value of the leasehold or the bonus value of this Lease.
Each party waives the provisions of Code of Civil Procedure, Section
1265.130, allowing either party to petition the Superior Court to terminate
this Lease in the event of a partial taking of the Premises.
17. Free from Liens. Tenant shall (i) pay for all labor and services performed
or materials used by or furnished to Tenant or any contractor employed by
Tenant with respect to the Premises, and (ii) indemnify, defend and hold
Landlord and the Premises harmless and free from any liens, claims,
demands, encumbrances or judgments created or suffered by reason of any
labor or services performed or materials used by or furnished by Tenant or
any contractor employed by Tenant with respect to the Premises.
18. Compliance with Laws. Tenant shall, at its own cost, comply with and
observe all requirements of all municipal, county, state and federal
authority now in force, or which may hereafter be in force, pertaining to
the use and occupancy of the Premises.
19. Subordination. Tenant agrees that this Lease shall, at the option of
Landlord, be subject and subordinate to any mortgage, deed of trust or
other instrument of security which has been or shall be placed on the
Property and the Building, and this subordination is hereby made effective
without any further act of Tenant or Landlord. Tenant shall, at any time
hereinafter, on demand, execute any instruments, releases or other
documents that may be required by a mortgagee, mortgagor, trustor or
beneficiary under any deed of trust, for the purpose of subjecting or
subordinating this Lease to the lien of any such mortgage, deed of trust or
other instrument of security. If Tenant fails to execute and deliver any
such documents or instruments, such failure shall, at Landlord's option,
constitute a default by Tenant under this Lease.
If this Lease is or becomes subordinate to any encumbrance now of record or
any encumbrance recorded after this date affecting the Premises, then
Tenant agrees to attorn to any purchaser at any foreclosure sale, or to any
grantee or transferee designated in any deed given in lieu of foreclosure.
In such event, Tenant shall execute, at Landlord's or the lender's request,
such recognition and attornment agreement as the lender, at its option, may
require. Landlord agrees to use its best efforts and negotiate in good
faith with any Lender to obtain quiet enjoyment of the Premises provided
that Tenant is in conformance with the terms and conditions of the Lease.
20. Abandonment. Tenant shall not vacate nor abandon the Premises at any time
during the term of this Lease; and if Tenant shall abandon, vacate or
surrender said Premises, or be dispossessed by process of law, or
otherwise, then any personal property belonging to Tenant and left on the
Premises shall be deemed to be abandoned, at the option of Landlord, except
such property as may be mortgaged to Landlord.
21. Assignment and Subletting.
A. Landlord's Consent Required. Tenant shall not, either voluntarily or
by operation of law, sell, encumber, pledge or otherwise transfer all
or any part of Tenant's leasehold estate hereunder or permit the
Premises to be occupied by anyone other than Tenant or Tenant's
employees, or sublet the Premises or any portion thereof, without
Landlord's prior written consent in each instance, which consent may
not unreasonably be withheld by Landlord. In exercising its reasonable
discretion, Landlord may consider all commercially relevant factors
involved in the leasing, subleasing or assignment of the space,
including but not limited to, the following: (i) the creditworthiness
and financial
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stability of the prospective assignee or sublessee; (ii) the compatibility
of the prospective assignee or sublessee with other tenants in the
Building; (iii) the references from prior landlords of such prospective
sublessee or assignee; (iv) the past history of such sublessee or assignee
with respect to involvement in litigation and bankruptcy proceedings; (v)
whether the proposed use of the Premises by the prospective sublessee or
assignee falls within the use permitted under Paragraph 5; (vi) whether the
proposed use is suitable and in keeping with the ambiance and tone of the
Building; (vii) the impact of said sublessee or assignee and the proposed
use of the Premises on pedestrian and vehicular traffic and parking
facilities; and (viii) the anticipated use, storage, generation, treatment
and disposal of Hazardous Materials by such prospective sublessee or
assignee. The presence of one negative factor enumerated above shall be
deemed reasonable justification for Landlord's withholding consent. Tenant
shall provide Landlord with prior notice of any proposed assignment or
sublease as provided in subparagraph 21.B, below. Consent by Landlord to
one or more assignments of this Lease or to one or more subletting of the
Premises shall not operate to exhaust Landlord's rights under this
Paragraph 21. If Tenant is a corporation, unincorporated association, or
partnership, the transfer, assignment, or hypothecation of any stock or
ownership interest in such corporation, unincorporated association or
partnership in excess of forty-nine percent (49%) shall be deemed an
assignment within the meaning and provision of this Paragraph 21. If in
excess of forty-nine percent (49%) of the ownership of Tenant's stock is
transferred, or all or substantially all of its assets are transferred or
Tenant merges with another corporation, then such transferee of the stock
shall promptly execute a guarantee ("Guarantee") of the Lease as attached
hereto in Exhibit "F" and in the case of a transfer of assets or a merger,
such transferee or merged corporation shall assume this Lease without
modification.
As a condition of Landlord's consent to an assumption of the Lease by the
transferee after such a stock transfer, asset sale or merger, which
condition Tenant agrees is reasonable, the proposed transferee shall have a
minimum net worth equal to Ten Million and No/100ths U.S. Dollars
($10,000,000.00) at the time of the transfer of Tenant's stock or assets.
The voluntary or other surrender of this Lease by Tenant or a mutual
cancellation hereof shall not work a merger, and shall, at the option of
Landlord, terminate all or any existing subleases or subtenancies. All Rent
received by Tenant from its subtenants in excess of the Rent payable by
Tenant to Landlord under this Lease shall be paid to Landlord, and any sums
to be paid by an assignee to Tenant in consideration of the assignment of
this Lease shall be paid to Landlord. However, from the sublease rent in
excess of the Base and Additional Rent hereunder, Tenant may recover its
direct documented third-party expenses of subleasing of reasonable legal
fees, reasonable brokerage commissions, and reasonable tenant improvement
costs. Any sublease or assignment permitted herein, shall, at Landlord's
election, automatically terminate Tenant's option(s), if any, to extend the
term of this Lease and, in such event, any such options shall not be
available to any sublessee or other transferee.
B. Notice to Landlord. If Tenant desires at any time to assign this Lease or
to sublet the Premises or any portion thereof, it shall first notify
Landlord of its desire to do so and shall submit in writing to Landlord (i)
the name of the proposed sublessee or assignee; (ii) the nature of the
proposed sublessee's or assignee's business to be carried on in the
Premises; (iii) the material business terms of the proposed sublease or
assignment; and (iv) such reasonable financial information concerning the
proposed sublessee or assignee as Landlord may need to make a prudent and
considered decision. Tenant shall also provide to Landlord a copy of the
sublease or assignment after such document has been fully executed.
C. Tenant Not Released. No subletting or assignment, even with the written
consent of Landlord, shall relieve Tenant of its obligation to pay the Rent
and perform all of the other obligations to be performed by Tenant
hereunder. Tenant shall indemnify and hold Landlord harmless from any and
all claims, damages, liability and expenses, including reasonable
attorneys' fees and costs, arising out of any claims by brokers or others
for commissions or finder's fees with respect to any subletting or
assignment by Tenant. The acceptance of Rent by Landlord from any other
person shall not be deemed to be a waiver by Landlord of any provision of
this Lease or to be a consent to any assignment or subletting. Tenant
immediately and irrevocably assigns to Landlord, as security for Tenant's
obligations under this Lease, all Rent from any subletting, and Landlord,
as assignee and attorney in fact for Tenant, or any receiver for Tenant
appointed on Landlord's application, may collect such Rent and apply it
toward Tenant's obligations under this Lease, except that, until the
occurrence of any act of default by Tenant. Tenant shall have the right to
collect such Rent.
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D. Involuntary Assignment. No interest of Tenant in this Lease shall be
assignable by operation of law. Without limiting the foregoing, each
of the following acts shall be considered an involuntary assignment:
(i) Transfer of this Lease by testacy or intestacy;
(ii) If Tenant is or becomes bankrupt or insolvent, makes an
assignment for the benefit of creditors, or institutes a
proceeding under the Bankruptcy Act in which Tenant is the
bankrupt; or, if Tenant is a partnership or consists of more
than one person or entity, if any general partner of the
partnership or other person or entity is or becomes bankrupt
or insolvent, or makes an assignment for the benefit of
creditors;
(iii) The appointment of a trustee or receiver to take possession
of substantially all of Tenant's assets located at the
Premises or of Tenant's interests in this Lease, where
possession is not restored to Tenant within thirty (30)
days; or
(iv) The attachment, execution or other judicial seizure of
substantially all of Tenant's assets located at the Premises
or of Tenant's interest in this Lease, where seizure is not
discharged within thirty (30) days.
An involuntary assignment shall constitute a default by Tenant under
this Lease, and in such event Landlord shall have the right to elect
to terminate this Lease, in which case this Lease shall not be treated
as an asset of Tenant.
E. Tenant to Reimburse Landlord for Expenses. Tenant agrees to reimburse
Landlord, as Additional Rent, upon demand, for Landlord's reasonable
costs and attorney's fees, incurred in conjunction with the
processing, investigation and documentation of any requested
assignment, subletting, transfer, change of ownership or hypothecation
of this Lease or Tenant's interest in and to the Premises, regardless
of whether any request actually results in a permitted assignment,
sublease or other transfer.
22. Parking. Any parking charges, surcharges or any other cost hereafter levied
or assessed by local, state or federal governmental agencies in connection
with the use of the parking facilities serving the Premises, including,
without limitation, any parking surcharge imposed by or under the authority
of the Federal Environmental Protection Agency, shall be included in
Operating Expenses as defined in Paragraph 3, above.
Each tenant, its agents, officers, employees and invitees, shall have the
non-exclusive right (in conjunction with the use of the part of the
Building leased to such tenant) to make reasonable use of any driveways,
sidewalks and parking area located on the Property, except such parking
areas as may from time to time be leased for exclusive use by other
tenant(s). Tenant's reasonable use of the parking area shall not exceed
that percent of the total parking area which is equal to Tenant's
proportionate share of Operating Expenses and Taxes set forth in
subparagraph 3.C. above. Notwithstanding anything in this Lease to the
contrary, Landlord reserves the right, at any time during the Lease term,
to convert the parking area to a pay-for-parking lot with charges for
parking determined by Landlord in its sole discretion. However, Landlord
agrees not to charge Tenant or its employees for parking during the initial
ten (10) years of the lease term.
23. Insolvency or Bankruptcy. Any of (i) the appointment of a receiver to take
possession of all or substantially all of the assets of Tenant, and such
possession is not fully restored to Tenant within thirty (30) days, or (ii)
a general assignment by Tenant for the benefit of creditors, or (iii) any
action taken or suffered by Tenant under any insolvency or bankruptcy act
shall constitute a breach of this Lease by Tenant. Upon the happening of
any such event, this Lease shall terminate ten (10) days after written
notice of termination from Landlord to Tenant. The provisions of this
Paragraph 23 are to be applied consistent with applicable state and
federal law in effect at the time such event occurs.
24. Landlord Loan or Sale. Tenant agrees, promptly following request by
Landlord, to execute and deliver to Landlord any documents, including
estoppel certificates presented to Tenant by Landlord, (i) certifying that
this Lease is unmodified and in full force and effect (or, if modified,
stating the nature of such modification and certifying that this Lease, as
so modified, is in full force and effect) and the date to which the Rent
and other charges are paid in advance, if any; (ii) acknowledging that
there are not, to Tenant's knowledge, any uncured defaults on the part of
Landlord hereunder (or, if there are any such uncured defaults, stating the
nature of any such default[s]; and (iii) evidencing the status of the Lease
as may be required either by a lender making a loan to Landlord, to be
secured by deed of trust or mortgage covering the Premises, or a purchase
of the Property, the Building or the Premises from Landlord. Tenant's
failure to deliver an estoppel certificate with three (3) days following
such request shall constitute a default under this Lease and shall be
conclusive upon Tenant that this Lease is in full force and effect and has
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not been modified except as may be represented by Landlord, and that there
are no uncured defaults in Landlord's performance. In addition, if
requested by Landlord, Tenant shall deliver to any prospective lender or
purchaser of the Property and/or the Building, audited financial
statements of Tenant covering the two (2) fiscal years immediately
preceding the request, certified by an independent certified public
accountant (or, if such statements are not normally prepared, audited and
certified by an independent public accountant, then certified by the chief
financial officer or a principal of Tenant).
25. Surrender of Lease. The voluntary or other surrender of this Lease by
Tenant, or a mutual cancellation thereof, shall not work a merger nor
relieve Tenant of any of Tenant's obligations under this Lease, and shall,
at the option of Landlord, either terminate all or any existing subleases
or subtenancies, or operate as an assignment to Landlord of any or all such
subleases or subtenancies.
26. Attorneys' Fees. If, for any reason, any action or other proceeding is
initiated to enforce or interpret any provision of this Lease, the
prevailing party shall be entitled to legal costs, expert witnesses
expenses and reasonable attorneys' fees as fixed by the court.
27. Notices. All notices to be given to either party shall be given in
writing, personally or by depositing the same in the United States mail,
postage prepaid, or by commercial overnight courier, and addressed to
Tenant at the said Premises, whether or not Tenant has departed from,
abandoned or vacated the Premises, as well as to the address set forth
below, or to such other address as Tenant may specify by notice given in
accordance with the provisions of this Paragraph 27. Any notice Lease to
be given to Landlord shall be addressed to Landlord at the address set
forth below, or at such other address as it may have theretofore specified
by notice delivered in accordance herewith:
Landlord: DLC-CASTRO COMMONS
c/o Dewey Land Company, Inc.
999 Baker Way, Suite 300
San Mateo, CA 94404
(415) 571-1010 Fax (415) 571-1019
Tenant: BEFORE COMMENCEMENT:
Karakas Van Sickle Ouellette After Commencement:
200 SW Market Street At the Premises
Suite 1400
Portland, OR 97201-5741
503/221-1551 (Fax) 503/221-0564
28. Waiver. The waiver by Landlord or Tenant of any breach of any term,
covenant or condition herein contained shall not be deemed to be a waiver
of such term, covenant or condition. The subsequent acceptance of Rent
hereunder by Landlord shall not be deemed to be a waiver of any preceding
breach by Tenant of any term, covenant or condition of this Lease, other
than the failure of Tenant to pay the particular Rent so accepted,
regardless of Landlord's knowledge of such preceding breach at the time of
acceptance of such Rent.
29. Holding Over. Any holding over by Tenant after the expiration of the term
of this Lease or any extension hereof, with the consent of Landlord, shall
be construed to be a tenancy from month-to-month, at a Basic Rent of one
and one-half (1-1/2) times the monthly Basic Rent in effect during the
last month of the Lease term, of any extension thereof, and shall
otherwise be on the terms and conditions herein specified, so far as
applicable.
30. Covenants, Conditions and Restrictions. The parties by this reference
incorporate herein as if set out in full, all Covenants, Conditions and
Restrictions ("CC&R's") pertaining to the Building and/or to the Property.
As a condition to this Lease, Tenant agrees to abide by all of said
CC&R's. Moreover, such reasonable rules and regulations as may be
hereafter adopted by Landlord for the safety, care and cleanliness of the
Building and/or Premises and the preservation of good order thereon, are
hereby expressly made a part hereof, and Tenant agrees to obey all such
rules and regulations.
31. Limitation on Landlord's Liability. If Landlord is in default of this
Lease, and as a consequence Tenant recovers a money judgment against
Landlord, any such judgment shall be satisfied only out of the proceeds of
sale received on execution of the judgement and levy against the right,
title and interest of Landlord in the Premises, or in the Building, other
improvements and the Property, and out of Rent or other income from such
real property receivable by Landlord, or out of the consideration received
by Landlord from the sale or other disposition of all or any part of
Landlord's right, title and interest in the Premises or in the Building,
other improvements and the Property. Neither Landlord nor any of the
partners comprising the partnership or officers of the corporation
designated as Landlord shall be personally liable for any deficiency.
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32. Sale or Transfer of Premises. If Landlord sells or transfers all or any
portion of the Premises, the Building or the Property, then Landlord, on
consummation of the sale or transfer, shall be released from any liability
thereafter accruing under this Lease. If any security deposit or prepaid
Rent has been paid by Tenant, Landlord agrees to transfer the security
deposit or prepaid Rent to Landlord's successor, other than any portion of
the security deposit applied or retained to compensate Landlord for any
loss or damage which Landlord may have suffered as a result of Tenant's
default, and thereupon Landlord shall be discharged from any further
liability in reference thereto.
33. Landlord's Right to Perform. All terms, covenants and conditions of this
Lease to be performed or observed by Tenant shall be performed or observed
by Tenant, at Tenant's sole cost and expense, and without any reduction of
Rent. If Tenant fails to pay any sum of money required to be paid by it
hereunder or fails to perform or observe any other term hereunder on its
part to be performed or observed, then Landlord may, at its option, without
waiving or releasing Tenant from any obligation of Tenant hereunder, make
any such payment, or perform or observe any such other term or act on
Tenant's part to be performed or observed. All sums so paid by Landlord and
all reasonably necessary costs of such performance or observation by
Landlord together with interest thereon from the date incurred at the
maximum rate an individual is permitted by law to charge, shall be paid by
Tenant to Landlord as Additional Rent, on demand, in which event and as to
the same Landlord shall have the rights and remedies against Tenant as in
the case of nonpayment of Rent hereunder.
34. Landlord's Right of Entry. Landlord (and/or its representatives) shall have
the right, at all reasonable times, to enter the Premises in order to post
notices; to improve, or alter the Building; to inspect or repair the
Premises or the Building; and to erect scaffolding and other necessary
structures in or near the Premises (provided the same do not unreasonably
impair access to the Premises), the Building and the Property; and to post
"For Sale" signs with respect to the Building or the Property. During the
last six (6) months of the then current term of this Lease, Landlord
(and/or its representatives) shall have the right, at all reasonable times,
to enter the Premises to place "For Lease" signs on the Premises. Landlord
and any purchaser, lessee or encumbrancer may enter the Premises, at all
reasonable times, with respect to any existing or prospective sale, lease
or encumbrance. Landlord shall also have the right to enter the Premises at
any time, without prior notice, in those emergency situations which could
involve potential injury to persons or loss of property. All of the above
shall be without abatement of Rent and any such entry shall not be
construed as a forcible or unlawful entry, or a detainer, or an actual or
constructive eviction of Tenant from the Premises.
35. Signs. No sign, placard, picture, advertisement, name or notice shall be
inscribed, displayed, printed or affixed on or to any part of the outside
of the Premises, or any exterior windows of the Premises, or any interior
windows visible from common areas of the Building, without the prior
written consent of Landlord (which consent may be granted in Landlord's
absolute discretion) and Landlord shall have the right to remove the same
without notice to and at the expense of Tenant. If Tenant is allowed to
display a sign on or about the Premises, then, at Landlord's option, upon
expiration or other sooner termination of this Lease, Tenant shall, at
Tenant's sole cost, remove such sign, repair all damage caused thereby and
restore the appearance of the Premises to its condition prior to the
placement of said sign. All approved signs (or lettering on outside doors)
shall be done at the expense of Tenant by a person contracted by Landlord.
36. Force Majeure. Subject to the provisions of Paragraphs 15 and 16 of this
Lease, neither Landlord nor Tenant shall be deemed in default of their
respective obligations under this Lease if performance thereof is delayed
or becomes impossible because the fault or neglect of the other party, or
because acts of God, war (whether declared or undeclared), earthquake,
fire, labor dispute, strike, acts of public agencies, embargoes, rainy,
stormy or other adverse weather, riot, civil commotion, insurrection,
blockade, inability to obtain materials, supplies or fuels, acts and delays
of subcontractors or contractors, and such other contingencies beyond the
control of the performing party. Upon such an event, the time for
performance shall be reasonably extended, but in no event shall such
extension be longer than sixty (60) days beyond the original date for
performance, in which case the party to whom the obligation is owned may
terminate this Lease by giving notice to the other party. This Paragraph 36
shall not be applicable to the payment of Rent or other monetary sums under
this Lease.
37. Exercise Facility. By its execution of this Lease, Tenant acknowledges that
it is aware that the Building may, in the future, contain an exercise
facility. Tenant and its employees over the age of eighteen (18) years may
reasonably use the exercise facility and its equipment; provided, however,
that no person shall use the exercise facility or its equipment unless
he/she has signed a waiver and release in the form attached hereto as
Exhibit E and made a part hereof, and the original of such executed waiver
and release has been delivered to Landlord. In consideration for the right
to use the exercise facility, Tenant agrees to faithfully enforce the
provision of this Paragraph 37, and to indemnify and hold Landlord harmless
from any claims or damages, including attorney's fees, incurred as a result
of the use of the exercise facility and its equipment
17
36
pursuant to this Paragraph 37. Use of the exercise facility in violation of
the provisions of this Paragraph 37 or any other unauthorized use of the
exercise facility shall constitute a material breach of this Lease.
38. Quiet Enjoyment. Landlord covenants that if, and so long as, Tenant keeps
and performs each and every covenant, agreement, term, provision and
condition herein contained on the part and on behalf of Tenant to be kept
and performed, Tenant shall quietly enjoy the Premises from and against the
claims of all persons.
39. Miscellaneous.
A. Time is of the essence of this Lease, and each and all of its
provisions.
B. The term "Building" shall mean the building in which the Premises are
situated; the term "Complex" shall mean both buildings at the
Property.
C. The term "Property" shall mean the real property on which the Building
is situated.
D. The term "assign" shall include the term "transfer".
E. The invalidity or unenforceability of any provision of this Lease
shall not affect the validity or enforceability of the remainder of
this Lease.
F. The headings and titles to the paragraphs of this Lease are not a part
of this Lease and shall have no effect upon the construction or
interpretation of any part thereof.
G. Landlord has made no representation(s) whatsoever to Tenant (express
or implied) except as may be expressly stated in writing in this
Lease.
H. This instrument contains all of the agreements and conditions between
the parties hereto with respect to the Premises, and may not be
modified orally or in any other manner than by agreement in writing,
signed by all of the parties hereto or their respective successors in
Interest.
I. It is understood and agreed that the remedies herein given to Landlord
shall be cumulative, and the exercise of any one remedy by Landlord
shall not be to the exclusion of any other remedy.
J. The covenants and conditions herein contained shall, subject to the
provisions as to assignment, apply to and bind the heirs, successors,
executors, administrators and assigns of all the parties hereto.
K. This Lease has been negotiated jointly by the parties hereto, and the
language hereof shall not be construed for or against either party.
L. All exhibits to which reference is made in this Lease are deemed
incorporated into this Lease, whether or not actually attached.
M. All provisions of this Lease, whether covenants or conditions,
applicable to Tenant shall be deemed to be both covenants and
conditions.
N. This Lease shall in all respects be governed by, and construed and
enforced in accordance with the laws of the State of California.
O. As used in this Lease, the term "Effective Date" shall mean the latest
date when executed by Landlord and Tenant.
18
37
P. Tenant hereby warrants that each individual executing this Lease has
been duly authorized to execute and deliver this Lease by all
necessary corporate action. Tenant warrants that it is qualified to do
business in and is in good standing in the State of California.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease on the
date first above written.
LANDLORD
DLC-CASTRO COMMONS,
a California limited partnership
By MIRAMONTE CASTRO CORPORATION
A California corporation
its General Partner
By /s/ Richard R. Dewey, Jr.
-------------------------------------
Richard R. Dewey, Jr.
President
Date 8/6/96
--------------------------------
TENANT
Karakas Van Sickle Ouellette
an Oregon Corporation
By /s/ Sharon Van Sickle
-------------------------------------
Date 7/31/96
--------------------------------
19
38
ADDENDUM
TO THAT CERTAIN LEASE DATED July 30, 1996, BY AND BETWEEN DLC-CASTRO COMMONS A
CALIFORNIA LIMITED PARTNERSHIP ("LANDLORD") AND KARAKAS VAN SICKLE OUELLETTE AN
OREGON CORPORATION ("TENANT").
39. Option to Extend. Tenant shall have the option to renew the term of this
Lease for one (1) additional seven (7) year term the "Extended Term". The
option rent shall be Fair Market Rent including annual increases as
reflected in the determination of Fair Market Rent as provided herein. Fair
Market Rent shall be defined to be rent for first class well maintained
mid-rise office projects located proximate to the Property, including the
most recent comparable leases Landlord has consummated with other tenants
at the Complex. Should Landlord and Tenant be unable to agree upon the Fair
Market Rent within twenty-one (21) days of Landlord's timely receipt of
Tenant's written notice as required herein, then Tenant may elect to either
(i) revoke its written notice and have the lease expire at the end of the
lease term as provided in this Lease or (ii) notify Landlord within five
(5) days that it elects to set the Fair Market Rent by appraisal.
Following such election to set the Fair Market Rent by appraisal, each
party, within fifteen (15) days at its cost and by giving notice to the
other party, shall appoint a licensed real estate appraiser (MAJ) with at
least five (5) years' full-time commercial appraisal experience in the area
in which the Premises are located to determine the Fair Market Rental as
specified above. If a party does not appoint an appraiser within fifteen
(15) days, the single appraiser appointed shall be the sole appraiser and
shall set the Fair Market Rent for the extended Term. If the two appraisers
are appointed by the parties as stated in this paragraph, they shall meet
promptly and attempt to set the Fair Market Rent for the extended term. If
they are unable to agree within twenty (20) days after the second appraiser
has been appointed, they shall elect a third appraiser meeting the
qualifications stated in this paragraph within ten (10) days after the last
day the two appraisers are given to set the Fair Market Rent. The cost of
said third appraiser shall be borne equally by Landlord and Tenant.
Within five (5) days after the selection of the third appraiser, a majority
of the appraisers shall set the Fair Market Rent for the Extended Term. If
a majority of the appraisers are unable to set the Fair Market Rent within
the stipulated period of time, then the two (2) closest appraisals shall be
added together and their total divided by two (2); the resulting quotient
shall be the Base Rent for the Premises during the Extended Term. In no
event shall Fair Market Rent be less than the Basic Rent paid in the last
month of the primary term of the Lease. Said minimum monthly rental as set
by the appraisers shall be binding upon the parties hereto and the Lease
shall remain in effect through the Extended Term. Tenant shall have no
other right to extend the term beyond the Extended Term herein granted.
Tenant shall notify Landlord of its desire to exercise such option within
a minimum of nine (9) months and a maximum of twelve (12) months prior to
the expiration date of the primary lease term. This option shall be void,
at Landlord's option, if Tenant has been chronically delinquent as defined
in Section 13 of this Lease, or is in default at the time of exercise
or at any time subsequent to Tenant giving timely notice up to commencement
of the Extended Term. This option is personal to Tenant and may not be
assigned or transferred without Landlord's expressed written consent which
may be withheld in Landlord's sole and absolute discretion. TIME IS OF THE
ESSENCE.
Except for adjustments to the Rent, any extended term shall be at the same
terms and conditions as the Primary Term of the Lease.
40. Right to Terminate. Tenant shall have the right to terminate this Lease
effective at the first day of the eighth (8th) lease year of the term by
providing Landlord with:
(i) Advance written notice so stating that Tenant is electing to terminate
this Lease effective of the first day of the eighth year of the Lease
Term; said notice must be received by Landlord on or before the
expiration of the third (3rd) month of the seventh (7th) year of the
Lease Term ("Notice Date"). For example, if the Lease Term commences
on January 1, 1997, then Tenant must tender its written notice to
Landlord on or before March 31, 2003 to be effective as of January 1,
2004.
20
39
ADDENDUM - Page 2
(ii) Pay to Landlord as a cancellation penalty the sum of Seventy Thousand
and No/100ths Dollars ($70,000.00) on or before the Notice Date.
TIME IS OF THE ESSENCE.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
LANDLORD TENANT
DLC-CASTRO COMMONS KARAKAS VAN SICKLE OUELLETTE
a California limited partnership an Oregon corporation
by MIRAMONTE CASTRO CORPORATION
a California corporation
Its General Partner
By: /s/ Richard R. Dewey, Jr. Date: 8/6/96 By: /s/ Sharon Van Sickle Date: 7/31/96
- -------------------------------------------- --------------------------------------------
Richard R. Dewey, Jr. Authorized Officer
President Its: Treasurer
---------------------------------------
40
EXHIBIT A
Description of Premises, including description of Property on which the
Premises are located:
41
[LEGEND]
COMMON
CONFERENCE
CENTER
OCTOBER ?, 199?
CASTRO COMMONS
PROFESSIONAL
CENTER
[GRAPHIC OF FLOOR PLAN]
1172 CASTRO
BUILDING 1
FIRST FLOOR
- ------------
DEWEY
LAND COMPANY
- ------------
ARCHITOPIA
EXHIBIT "A"
42
[ARROW LEFT] NORTH
[LEGEND]
[FLOOR PLAN GRAPHIC]
FEBRUARY ?, 199?
CASTRO
COMMONS
PROFESSION
CENTER
1172 CASTRO
BUILDING 1
SECOND FLOOR
------------
DEWEY
LAND
COMPANY
------------
EXHIBIT "A" ARCHITOPIA
43
EXHIBIT B
[Date]
Karakas Van Sickle Ouellette
200 SW Market Street
Suite 1400
Portland, OR 97201-5741
Re: Commencement Date under Lease dated July 30, 1996 Between DLC-Castro
Commons, a California limited partnership, as Landlord, and Karakas Van Sickle
Ouellette an Oregon Corporation as Tenant
Dear ________________:
Pursuant to Paragraph 2 of the above-mentioned Lease, you are hereby
informed of the following:
Commencement Date of the term of the Lease;
Expiration Date of the term of the Lease:
Very truly yours,
DLC-CASTRO COMMONS,
a California limited partnership
By MIRAMONTE CASTRO CORPORATION
A California corporation
Its General Partner
Richard R. Dewey, Jr.
President
RD/vc
44
EXHIBIT C
Improvements
- ------------
Landlord shall provide a Tenant improvement allowance of thirty five thousand
dollars and No/100ths Dollars ($35,000.00) ("Base Allowance") in order to assist
in the recarpeting and re-painting of the Premises (or towards any other
modifications to the Premises). It is understood that Landlord's general
contractor will complete all improvements done at the Premises. Landlord shall
provide Tenant with its written cost summary of the improvements (construction
costs, city fees, architectural/structural fees, etc.) plus a contingency of
five percent (5%). Should the estimated cost of the improvements exceed the Base
Allowance, then, within ten (10) days from receipt of Landlord's written
estimate, Tenant shall deposit such estimated amount in excess of the Base
Allowance with Landlord. Tenant's failure to so timely forward said excess
amount shall be deemed a default under the Lease as well as a delay caused by
Tenant. During construction, any additional costs in excess of the Base
Allowance, shall be paid by Tenant to Landlord within ten (10) days of Tenant's
receipt of Landlord's invoice. Tenant's failure to timely pay as required herein
shall be a default under the Lease as well as a delay as caused by Tenant. At
the end of the construction of the improvements, Landlord shall provide Tenant
with a cost summary of the actual costs of the improvements. Should the actual
cost of the improvements be in excess of the Base Allowance plus the cost so
paid by Tenant, Tenant shall pay this difference (i.e. actual cost of the
improvements less Base Allowance, less amount paid by Tenant) to Landlord within
ten (10) days of receipt of written invoice.
45
EXHIBIT "D"
STANDARDS FOR UTILITIES AND SERVICES
The following Standards for Utilities and Services shall apply to the Building.
Landlord reserves the right to adopt nondiscriminatory modifications and
additions hereto at any time as Landlord, in its sole discretion, deems
advisable.
A. On the Commencement Date through the date the Lease terminates, during
usual business hours (and at other times for a reasonable additional
charge to be fixed by Landlord), Landlord shall ventilate the Premises and
furnish air-conditioning or heating on such days and hours, when in the
judgment of Landlord it may be required for the comfortable occupancy of
the Premises. The air-conditioning system achieves maximum cooling when
the window coverings are closed. Landlord shall not be responsible for
room temperatures if Tenant does not keep all window coverings in the
Premises closed whenever the system is in operation. Tenant agrees to
cooperate fully at all times with Landlord, and to abide by all
regulations and requirements which Landlord may prescribe for the proper
functioning and projection of said air-conditioning system. Tenant agrees
not to connect any apparatus, device, conduit or pipe to the Building
air-conditioning supply lines. Tenant further agrees that neither Tenant
nor its servants, employees, agents, visitors, licensees or contractors
shall at any time enter mechanical installations or facilities of the
Building or adjust, tamper with, touch or otherwise in any manner affect
said installations or facilities.
B. The Landlord shall furnish to the Premises during the usual business
hours, electric current as required by the Building's standard office
lighting and fractional horsepower office lighting and fractional
horsepower office business machines in the amount of approximately three
(3) watts per square foot. The Tenant agrees, should its electrical
installation or electrical consumption be in excess of the aforesaid
quantity or extend beyond usual business hours, to reimburse Landlord
monthly on the date Basic Rent is due for the measured consumption at the
terms, classifications and rates charged similar consumers by said public
utility serving the neighborhood in which the Building is located. If a
separate meter is not installed at Tenant's cost, such excess cost will be
established by an estimate agreed upon by Landlord and Tenant, and if the
parties fail to agree, as established by an independent licensed engineer,
selected by Landlord and approved by Tenant, Tenant agrees not to use any
apparatus or device in, or upon, or about the Premises which may in any
way increase the amount of such services usually furnished or supplied to
said Premises, and Tenant further agrees not to connect any apparatus or
device with wires, conduits or pipes, or other means by which such
services are supplied, for the purpose of using additional or unusual
amounts of such services without the prior written consent of Landlord.
Should Tenant use the same to excess, Tenant shall pay to Landlord, upon
demand, the amount established by Landlord for such excess usage. At all
times Tenant's use of electric current shall never exceed the capacity of
the feeders to the Building or the risers or wiring installation and
Tenant shall not install or use or permit the installation or use of any
computer or electronic data processing equipment in the Premises without
the prior written consent of Landlord.
C. Water will be available in public areas for drinking and lavatory purposes
only, but if, in Landlord's sole determination, Tenant requires, uses or
consumes water for any purpose in addition to ordinary drinking and
lavatory purposes, Landlord may install a water meter and thereby measure
Tenant's water consumption for all purposes. Tenant shall pay Landlord,
upon demand, for the cost of the meter and the cost of the installation
thereof and throughout the duration of Tenant's occupancy Tenant shall
keep said meter and installation equipment in good working order and repair
at Tenant's own cost and expense. If Tenant is in default of its
obligations to keep the meter and equipment in good repair, then Landlord,
in addition to all other remedies for breach in this Lease and at law, may
cause such meter and equipment to be replaced or repaired and collect the
cost thereof from Tenant. Tenant agrees to pay for water consumed, as
shown on said meter, as and when bills are rendered, and on default in
making such payment, Landlord may, in addition to all other remedies for
breach in this Lease and at law, pay such charges and collect the same from
Tenant.
D. The Landlord shall provide janitorial services on the Premises, provided
the same are used exclusively as offices and are kept reasonably in order
by Tenant. If the Premises are not used exclusively as offices, they shall
be kept clean and in order by Tenant, at Tenant's expense, and to the
satisfaction of Landlord, and by persons approved by Landlord. Tenant shall
pay to Landlord, upon demand, the cost of removal of Tenant's refuse and
rubbish, to the extent that the same exceeds the refuse and rubbish
usually attendant upon the use of the Premises as offices
46
Exhibit "D"
Page 2
E. "Holidays" for purposes of this Lease, shall be defined as holidays
observed by the United States Post Office. "Usual business hours" for
purposes of this Lease, are from 8:00 a.m. until 6:00 p.m., Monday through
Friday, except holidays.
Tenant may operate its business at hours other than usual business hours
provided that Tenant acknowledges that it shall pay the cost of operation
of HVAC and electricity for power and lighting on a monthly basis as
invoiced by Landlord and payable by Tenant to landlord within fifteen (15)
days of invoice for Landlord to Tenant.
Landlord reserves the right to stop service of the elevator, plumbing,
ventilation, air-conditioning and electric systems, when necessary, by reason of
accident or emergency or for repairs, alterations or improvements, in the
judgment of Landlord desirable or necessary to be made, until said repairs,
alterations or improvements shall have been completed. Landlord's obligations to
provide utilities and services hereunder shall also be subject to and limited by
the Force Majeure provisions of the Lease. Any failure to supply utilities or
services, whether caused by a Force Majeure described in the Lease or by reason
of accident, emergency, repair, alteration or improvement, shall not be
construed as an eviction of Tenant, whether actual or constructive, and shall
not cause an abatement of Rent, either in whole or in part.
Landlord shall have no obligation whatsoever to supply utilities and services to
the Premises if Tenant is in default of any term, covenant, or condition of this
Lease.
Any costs or expenses incurred by Landlord with respect to Tenant's default
hereunder as well as all payments to be made by Tenant to Landlord pursuant to
the above provisions, as stated herein or as may be later modified, shall be
deemed to be Additional Rent under the Lease and Landlord shall have all its
rights and remedies under the Lease and at law with respect to the same
including but not limited to the right to late fees and interest upon default.
The cost for operating the HVAC at times other than usual business hours is
forty and No/100ths Dollars ($40.00) per hour. This cost shall be adjusted to
reflect increases in the Index as provided in Paragraph 3B of the Lease.
The cost for operating the lighting systems at times other than usual business
hours is twelve and No/100ths Dollars ($12.00) per hour. This cost shall be
adjusted to reflect increases in the Index as provided in Paragraph 3B of the
Lease.
47
EXHIBIT "E"
WAIVER AND RELEASE
In consideration for being authorized to use the Exercise Facility, I, the
undersigned, for myself, my heirs, executors, administrators and assigns waive
and release all rights and claims for damages for death, personal injury or
loss of property which I may have as a result of my utilization of the Exercise
Facility and its equipment located at .
-------------------------
I, the undersigned, for myself, my heirs, executors, administrators and
assigns release and forever discharge the building owners, lessees of the
building, and management of the building and their respective agents,
directors, partners, officers, employees and representative from any and all
liability, losses, claims, and damages arising out of or connected in any way
with my use of the Exercise Facility. I understand that exercise entails risk
of personal injury and my participation is voluntary and done entirely at my
own risk. I attest that I have no medical condition which would increase the
usual risks of physical exercise.
I have read and fully understand everything written above.
Dated:
------------------
Signature:
--------------
Printed Name:
-----------
48
EXHIBIT "F"
LEASE GUARANTEE
WHEREAS, Karakas, Vansickle, Ouellete an Oregon Corporation (the "Tenant"),
has entered into a lease agreement dated July 30, 1996 as Tenant, with
DLC-Castro Commons, a California limited partnership ("Landlord") concerning
real property commonly known as 1172 Castro Street, Mountain View, California
(the "Lease"); and
WHEREAS, Tenant has entered into or desires to enter into a transaction
which is defined as an assignment of the Lease according to the provisions
thereof; and
WHEREAS, the undersigned Guarantor is willing to execute and deliver this
Lease Guarantee for the express and intended purpose of inducing Landlord to
consent to the assignment of the Lease.
NOW, THEREFORE, the Guarantor, in order to induce Landlord to consent to
the assignment of Lease with Tenant, does hereby absolutely and unconditionally
guarantee to Landlord the full and prompt payment of all amounts which Tenant,
any sublessee and/or any assignee of the Lease (collectively, "Obligors"), may
at any time owe under the Lease, any extensions, renewals or modifications
thereof, and further guarantees to Landlord and shall be liable to Landlord for
the full, prompt and faithful performance of the Obligors of each and all of
the covenants, terms, and conditions of the Lease, or any extensions,
modifications or renewals thereof, to be hereafter performed and kept by the
lessee of the Lease, or any Obligor.
The Guarantor's obligations hereunder are independent of the obligations
of the Obligors, and a separate action or actions may be brought and prosecuted
against the Guarantor whether or not action is brought against the Obligors or
whether or not the Obligors be joined in any such action or actions. Landlord's
rights hereunder shall not be exhausted by its exercise of any of its rights or
remedies or by any such action or by any number of successive actions until and
unless all indebtedness and obligations, the payment and performance of which
are hereby guaranteed, have been paid and fully performed.
The Guarantor authorizes Landlord, without notice or demand and without
affecting the liability of Guarantor hereunder, from time to time to (a)
consent to any extensions, accelerations or other changes in the time for any
payment provided for in the Lease, or consent to any other alteration of any
covenant, term or condition of the Lease in any respect so long as Tenant
consents thereto, and to consent to any assignment, subletting or reassignment
of the Lease; (b) take and hold security for any payment provided for in the
Lease or for the performance of any covenant, term or condition of the Lease,
or exchange, waive or release any such security; (c) apply such security and
direct the order or manner of sale thereof as Landlord in its discretion may
determine. Landlord may, without notice, assign this Guarantee to any party who
assumes the obligations of lessor under the Lease. Notwithstanding any
termination, renewal, extension or holding over of the Lease, this Guarantee
shall continue until all of the covenants, terms and conditions on the part of
the Obligors to be performed have been fully and completely performed by the
Obligors, and the Guarantor shall not be released of any obligation or
liability hereunder so long as there is any claim against the Obligors arising
out of the Lease that has not been settled or discharged in full.
Guarantor hereby waives and relinquishes all rights and remedies accorded
by applicable law to guarantors and agrees not to assert or take advantage of
any such rights or remedies including but not limited to: (a) any right to
require Landlord to
49
proceed against any Obligor or any other person or to proceed against or
exhaust any security held by Landlord at any time or to pursue any other remedy
in Landlord's power before proceeding against Guarantor; (b) the defense of the
statute of limitations in any action hereunder or in any action for the
collection of any obligation or indebtedness or the performance of any
obligation hereby guaranteed; (c) any defense that may arise by reason of the
incapacity, lack of authority, death or disability of any other person or
persons or the failure of Landlord to file or enforce a claim against the
estate (in administration, bankruptcy or any other proceeding) or any other
person or persons; (d) demand, protest and notice of any kind, including but
not limited to notice of the existence, creation or incurring of any new or
additional obligation or of any action or non-action on the part of Landlord,
any Obligor or on the part of any other person whomsoever under this or any
other instrument in connection with any obligation hereby guaranteed; (e) any
defense based upon an election of remedies by Landlord, which destroys or
otherwise impairs the subrogation rights of Guarantor or the right of Guarantor
to proceed against Tenant and/or the Obligors for reimbursement or both; (f)
any defense based upon any statute or rule of law which provides that the
obligation of a surety must be neither larger in amount nor in other respects
more burdensome than that of the principal; (g) any duty on the part of
Landlord to disclose to Guarantor any facts Landlord may now or hereafter know
about Tenant, regardless of whether Landlord has reason to believe that any
such facts materially increase the risk beyond that which Guarantor intends to
assume or has reason to believe that such facts are unknown to Guarantor or has
a reasonable opportunity to communicate such facts to Guarantor, it being
understood and agreed that the Guarantor is fully responsible for being and
keeping informed of the financial condition of Tenant and of all circumstances
bearing on the risk of non-performance of any obligation of the lessee under
the Lease; (h) any defense arising because of Landlord's election, in any
proceeding instituted under the federal Bankruptcy Code, of the application of
Section 1111(b)(2) of the federal Bankruptcy Code; (i) any defense based on any
borrowing or grant of a security interest under Section 364 of the federal
Bankruptcy Code; and (j) any defense based on the assumption or rejection of
the Lease by any Obligor or any bankruptcy trustee under Section 365(a) of the
federal Bankruptcy Code. Without limiting the generality of the foregoing or
any other provision hereof, Guarantor hereby expressly waives any and all
benefits which might otherwise be available to Guarantor under California Civil
Code Sections 2809, 2810, 2819, 2839, 2845, 2849, 2850, 2899 and 3433.
The Guarantor shall have no right of subrogation and waives, any right to
proceed against any Obligor for reimbursement, as well as any right to enforce
any remedy which Landlord now has or may hereafter have against any Obligor,
and waives any benefit of, and any right to participate in, any security now or
hereafter held by Landlord.
The Guarantor waives all demands upon and notices to Guarantor or to any
Obligor, including demands for performance, notices of non-performance, notices
of non-payment and notice of acceptance of this Guarantee.
Guarantor agrees to pay reasonable attorneys' fees and all other costs and
expenses which may be incurred by Landlord in the enforcement of this Guarantee.
No right or power of Landlord shall be deemed to have been waived by any
act or conduct on the part of Landlord, or by any neglect to exercise such
right or power, or by any delay in so doing; and every right and power of
Landlord shall continue in full
50
force and effect until such right or power is specifically waived by an
instrument in writing executed by Landlord.
This Guarantee shall bind the Guarantor, its successors and assigns, and
shall inure to the benefit of Landlord and its successors and assigns.
This Guarantee and each and every term and provision thereof shall be
construed in accordance with the laws of the State of California. Venue for an
action on this Guarantee shall be in the proper courts for the County of San
Mateo, State of California, and the undersigned consents to the jurisdiction of
said courts.
If any provision or portion thereof of this Guarantee is declared
unenforceable by a court of competent jurisdiction, the remaining provisions
shall continue in full force and effect.
Notwithstanding the above to the contrary, provided Tenant has timely
performed each and every covenant of the Lease, including the payment of Rent
when due, and no default under the lease has occurred, this Guarantee shall
expire at the expiration of the fifth (5th) year of this Lease.
IN WITNESS WHEREOF, Guarantor has executed this instrument on this day ___
of ________________.
"GUARANTOR"
______________________________