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EXHIBIT 10.15
TRIPLE NET BUILDING LEASE
Between
PACIFIC SHORES CENTER LLC,
as
LESSOR
and
INFORMATICA CORP.
A DELAWARE CORPORATION
as
LESSEE
for
PREMISES
at
PACIFIC SHORES CENTER
BUILDING 2
REDWOOD CITY, CALIFORNIA
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ARTICLE I
PARTIES
Section 1.01. Parties. This Lease, dated for reference purposes, and
effective as of February 22, 2000, is made by and between PACIFIC SHORES CENTER
LLC, or assignee, ("Lessor") and INFORMATICA CORP., a Delaware corporation
("Lessee").
ARTICLE II
PREMISES
Section 2.01. Demise of Premises. Lessor hereby leases to Lessee and
Lessee leases from Lessor for the term, at the rental, and upon all of the terms
and conditions set forth herein, Premises consisting of one building
("Building") of ten free standing, office and research and development buildings
("Buildings") to be constructed by Lessor on real property situated in Redwood
City, County of San Mateo, State of California and commonly known as Pacific
Shores Center which Lessor is in the process of acquiring (the "Property"). The
Building will be four stories tall and will consist of approximately one hundred
forty-four thousand ninety-two (144,092) rentable square feet, as more
particularly described and depicted herein in Exhibit "A." The actual rentable
square footage of the Building (the "Rentable Area") will be determined and
certified by Lessor's architect by a method described as "dripline," whereby the
measurement encompasses the outermost perimeter of the constructed building,
including every projection thereof and all area beneath each such projection,
whether or not enclosed, with no deduction for any inward deviation of structure
and with the measurement being made floor by floor, beginning from the top of
the Building. The Building and appurtenances described herein, the Property, and
all other improvements to be built on the Property are together designated as
the "Project." The Building leased hereunder, commonly known as Building 1 -
Pacific Shores Center, Redwood City, California, and its appurtenances described
herein are herein designated as the "Premises."
Section 2.02. Common Area. During the Lease Term, Lessee shall have the
non-exclusive right to use the Common Area defined herein. Lessor reserves the
right to modify the Common Area, including reducing the size or changing the
use, configuration and elements thereof in its sole discretion and to close or
restrict access from time to time for repair, maintenance or to prevent a
dedication thereof, provided that Lessee nonetheless shall have access to
parking and the Premises during such activities and there shall be no material,
adverse impact on Lessee's use of the Premises. Lessor further reserves the
right to establish, repeal and amend from time to time rules and regulations for
the use of the Common Area and to grant reciprocal easements or other rights to
use the Common Area to owners of other property. "Common Area" includes, without
limitation, landscaping, sidewalks, walkways, driveways, curbs, parking lots
(including striping), sprinkler systems, lighting, surface water drainage
systems as well as baseball and soccer fields, an amenities/athletic facility
and, to the extent required by government authorities having jurisdiction over
Lessor's development of the Project, a waterfront park, perimeter walking/biking
trail, amphitheater, marine life resource center, retreat and conference center,
child care center and such further portions of the Project or additional or
different facilities as Lessor may from time to time designate or install or
make available for the use by Lessee in common with others.
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Section 2.03. Parking. Lessor shall provide Lessee with parking spaces
within the Common Area in the ratio to space within the Building as required by
law, which is three (3) spaces per one thousand (1,000) square feet of interior
space within the Building. In the event Lessor elects or is required by any law
to limit or control parking at the Premises, whether by validation of parking
tickets or any other method of assessment, Lessee agrees to participate in such
validation or assessment program under such reasonable rules and regulations as
are from time to time established by Lessor. Said parking shall be provided at
no additional cost except as expressly provided herein in Article VI for
reimbursement of repair, replacement and maintenance, and except for any
governmental or public authority charges, fees or impositions of any nature
hereafter imposed.
Section 2.04. Construction.
(a) Government Approvals. Lessor shall diligently pursue obtaining
governmental approval of a Site Plan and Building design and elevations with
respect to the development of the Premises, copies of which are attached hereto
as Exhibit "A." The parties acknowledge and agree that the final footprint and
elevations of the Building may vary from those attached as Exhibit "A" because
the plans and specifications will undergo a plancheck process with the City of
Redwood City and Lessor will make such revisions as are required or are
otherwise deemed necessary or appropriate by Lessor, provided however, that
nothing herein shall be deemed to relieve Lessor from the duty to develop the
Building substantially in compliance with Exhibit "A."
(b) Construction of Shell Building. Lessor, utilizing Rudolph & Sletten
(or such alternate as Lessor in its sole discretion may select) as general
contractor ("General Contractor"), shall construct the "Building Shell" (as
defined in the attached Exhibit "D") in accordance with (i) plans and
specifications to be attached as Exhibit "B" and (ii) all existing applicable
municipal, local, state and federal laws, statutes, rules, regulations and
ordinances. Lessor shall pay all costs of constructing the Building Shell.
(c) Construction of Tenant Improvements. All improvements not included
within the scope of the Building Shell shall be deemed "Tenant Improvements."
Lessor, using the General Contractor, shall construct the Tenant Improvements
and shall contribute the Tenant Improvement Allowance towards the payment of
same and Lessee shall pay all costs associated with same in excess of the Tenant
Improvement Allowance.
(d) Tenant Improvement Plans and Cost Estimate. Lessee shall work with
Lessor's architect to develop interior schematic drawings and Lessee shall
approve final interior schematic drawings for the Building Tenant Improvements
no later than May 15, 2000. Lessee shall work with Lessor's architect to develop
working drawings outlining, among other things, Lessee's wall layout, detailed
electrical and air conditioning requirements and finishes ("Working Drawings")
and Lessee shall approve final Working Drawings on or before July 15, 2000. The
cost of the interior schematic drawings and Working Drawings shall be a Tenant
Improvement cost. Based on this information, Landlord shall cause the General
Contractor to
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prepare and deliver to Lessee a budget for the Tenant Improvements ("Budget").
Lessee shall approve the Budget (or modify the same with Lessor's consent), in
writing, within ten (10) business days thereafter. The Working Drawings and
Budget must be approved by Lessor in writing and be of quality equal to or
greater than the Interior Specifications Standards set forth in Exhibit "C" and
must encompass the build-out of the entire Premises. Once the Budget is
approved, Lessor shall enter into a guaranteed maximum price contract with the
General Contractor for the construction of the Tenant Improvements.
(e) Cost Responsibilities. Attached as Exhibit "C" to this Lease is a Work
Letter Agreement for Tenant Improvements, and Exhibit "D," Cost Responsibilities
of Lessor and Lessee, which together with this Section 2.04, describe the
planning and payment responsibilities of the Lessor and Lessee with respect to
the construction of the Shell Building and Tenant Improvements at the Premises.
All approved Tenant Improvements shall be constructed in accordance with a
construction schedule approved by Lessor and no portion of the Building interior
shall remain unimproved.
(f) Tenant Improvement Allowance. Lessor shall provide to Lessee
semi-improved "cold shell" facilities as described in Exhibit "D" attached and a
Tenant Improvement Allowance of $25.00 per square foot to be used for the Tenant
Improvements outlined in Exhibit "D," all as outlined in the Tenant Improvement
Work Letter attached as Exhibit "C." Subcontracts for all Tenant Improvement
Work shall be obtained by a sealed competitive bid process (involving at least
two qualified bidders) wherever practical and as to work done without such
process, Lessor or the General Contractor shall provide reasonable assurance to
Lessee that the cost and expense of same is competitive in the industry for
first-class workmanship and materials.
(g) Payment for Tenant Improvements. Within five (5) business days after
the Budget is approved by Lessor and Lessee, Lessee shall deposit Lessee's share
of the amount budgeted for the entire Tenant Improvement construction schedule
(together with the cost of any Tenant Improvements already made) with Lessor's
construction lender to be held in an escrow account. Lessee's share is the
portion of the budgeted amount not paid from the Tenant Improvement Allowance as
described in the following sentence. Said construction lender shall issue
payments from said account pursuant to the construction contract for the Tenant
Improvements with a portion of each payment being taken from the Tenant
Improvement Allowance (in the same ratio as the Tenant Improvement Allowance
bears to the entire Budget total) and the balance being paid from Lessee's
deposit, until the Tenant Improvement Allowance is exhausted, whereupon any
remaining payments shall be made 100% by Lessee. Lessor shall manage the
construction of the Tenant Improvements for a construction management fee of
2.5% of the Tenant Improvement Contract amount (as the same may change by
agreement of the parties) due and payable in nine equal monthly installments
beginning on the first day of the calendar month following the calendar month in
which the Budget is first approved.
(h) Lessee's Fixturing Period. Lessor shall provide Lessee access to the
Premises during the thirty (30) day period prior to the Commencement Date
("Lessee's Fixturing Period") for the purpose of installing furnishings and
equipment, e.g. security system, furniture system and phone and data system,
provided, that Lessee and Lessee's employees and
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contractors shall at all times avoid interfering with Lessor's ongoing work to
bring the Premises to a substantially completed condition. Except for payment of
Base Rent, all terms and provisions of this Lease shall apply during Lessee's
Fixturing Period, including, without limitation, Lessee's indemnity and other
obligations set forth in Sections 7.07., 7.08. and 17.22. hereof and payment of
Additional Rent pursuant to Section 4.05 hereof.
ARTICLE III
TERM
Section 3.01. Lease Term.
(a) Commencement Date. The term of this Lease ("Lease Term") shall be for
twelve (12) years beginning on the earlier of (i) the date a Certificate of
Occupancy first is issued affecting the Building, or (ii) the date on which
Lessee first occupies or conducts business at the Premises (the "Commencement
Date") provided that, (i) for each day of delay by Lessee in failing to approve
the interior schematic drawings or the Working Drawings when required under
Section 2.04(d), or (ii) for each day of delay by Lessee in failing to approve
the Budget, in writing, within fourteen (14) days after delivery by the General
Contractor as provided in Section 2.04(d), or (iii) for each day of delay caused
by any changes to the approved Working Drawings requested by Lessee, or (iv) for
each day that any other act or omission by Lessee causes the construction
schedule for Tenant Improvements to be delayed (collectively "Lessee Delay"),
the Commencement Date shall occur one (1) day in advance of the date of the
Certificate of Occupancy for each such day of delay. For example, if seven (7)
days of Lessee Delay causes the date of issuance of the Certificate of Occupancy
to occur on July 8, 2001 rather than July 1, 2001, the Commencement Date shall
be July 1, 2001 for all purposes, including payment of Base Rent. The Lease Term
shall expire, unless sooner terminated or extended as provided herein, on the
date which completes twelve (12) years after the Commencement Date occurs, e.g.
if the date on which the Commencement Date occurs is July 1, 2001, the Lease
Term shall expire on June 30, 2013 and if the Commencement Date is July 3, 2001,
the Lease Term shall expire on July 2, 2013 ("Expiration Date"). The parties
shall execute a "Memorandum of Commencement of Lease Term" when the Commencement
Date becomes known, which shall include a certification of the actual Rentable
Area of the Building determined by the methodology described in Section 2.01.
and the actual monthly installments of Base Rent to be paid pursuant to Section
4.01., and shall be substantially in the form attached hereto as Exhibit "E."
(b) Scheduled Commencement Date. Lessor shall use commercially reasonable
efforts to cause the Certificate of Occupancy for the Building to be issued no
later than July 1, 2001 ("Scheduled Commencement Date"). If a Certificate of
Occupancy is not issued for the Building on or before the Scheduled Commencement
Date, this failure shall not affect the validity of this Lease or the
obligations of Lessee under it. If the Commencement Date is adjusted for delay
from any cause, the Expiration Date shall be likewise adjusted for a like
period.
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(c) Termination in Event of Delay. If for any reason Lessor is unable to
cause the issuance of a Certificate of Occupancy for the Building, on or before
the date which is one hundred forty-five (145) days after the Scheduled
Commencement Date (for a reason other than Lessee Delay or delay excused under
Section 17.21.), Lessee, at its sole election, may terminate this Lease upon
giving notice within ten (10) days thereafter. Failure to give such notice
within said time period constitutes an irrevocable waiver of the foregoing right
to terminate under this Section 3.01(c).
(d) Lessee Termination Rights. In the event that either (i) Lessor is not
the fee owner of the Property on or before May 15, 2000, or (ii) Lessor has not
presented Lessee with reasonable evidence on or before July 15, 2000, that it
has obtained a commitment letter for financing in an amount sufficient to
complete the construction of the Building Shell and fund the Tenant Improvement
Allowance, then Lessee shall have the right to terminate this Lease upon written
notice to Lessor within sixty (60) days after either May 15, 2000 or July 15,
2000, as applicable. If Lessee terminates this Lease in accordance with this
paragraph, neither party shall have any further rights or obligations hereunder.
Section 3.02. Option to Extend.
(a) Exercise. Lessee is given one (1) option to extend the Lease Term
("Option to Extend") for a five (5) year period ("Extended Term") following the
date on which the initial Lease Term would otherwise expire, which option may be
exercised only by written notice ("Option Notice") from Lessee to Lessor given
not less than twelve (12) months prior to the end of the initial Lease Term
("Option Exercise Date"); provided, however, if Lessee is in material default
under this Lease (beyond the expiration of any applicable notice period) on the
Option Exercise Date or on any day thereafter on or before the last day of the
initial Lease Term, the Option Notice shall be totally ineffective, and this
Lease shall expire on the last day of the initial Lease Term, if not sooner
terminated. The right of Lessee to exercise an Option to Extend shall not be
affected by any sublease or assignment of this Lease previously entered into by
Lessee pursuant to the provisions of this Lease.
(b) Extended Term Rent. In the event Lessee exercises its Option to Extend
set forth herein, all the terms and conditions of this Lease shall continue to
apply except that the Base Rent payable by Lessee during each Option Term shall
be equal to one hundred percent (100%) of Fair Market Rent (defined below), as
determined under subparagraph (c) below with annual three and five tenths
percent (3.5%) increases pursuant to Section 4.02 below. "Fair Market Rent"
shall mean the effective rate being charged (including periodic adjustments
thereto as applicable during the period of the Extended Term), for comparable
space in similar buildings in the vicinity, i.e. of a similar age and quality
considering any recent renovations or modernization, and floor plate size or, if
such comparable space is not available, adjustments shall be made in the
determination of Fair Market Rent to reflect the age and quality of the Building
and Premises as contrasted to other buildings used for comparison purposes, with
similar amenities, taking into consideration: size, location, floor level,
leasehold improvements or allowances provided or to be provided, term of the
lease, extent of services to be provided, the time that the particular rate
under consideration became or is to become effective, and any other relevant
terms or conditions
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applicable to both new and renewing tenants, but in no event less than the
monthly Base Rent prevailing during the last year of the initial Lease Term.
(c) Determination of Fair Market Rent.
(i) Negotiation. If Lessee so exercises its Option to Extend in a
timely manner, the parties shall then meet in good faith to negotiate the Base
Rent for the Premises for the Extended Term, during the first thirty (30) days
after the date of the delivery by Lessee of the Option Notice (the "Negotiation
Period"). If, during the Negotiation Period, the parties agree on the Base Rent
applicable to the Premises for the Extended Term, then such agreed amount shall
be the Base Rent payable by Lessee during the Extended Term.
(ii) Arbitration. In the event that the parties are unable to agree
on the Base Rent for the Premises within the Negotiation Period, then within ten
(10) days after the expiration of the Negotiation Period, each party shall
separately designate to the other in writing an appraiser to make this
determination. Each appraiser designated shall be a member of MAI and shall have
at least ten (10) years experience in appraising commercial real property, of
similar quality and use as the Premises, in San Mateo County. The failure of
either party to appoint an appraiser within the time allowed shall be deemed
equivalent to appointing the appraiser appointed by the other party, who shall
then determine the Fair Market Rent for the Premises for the Extended Term.
Within five (5) business days of their appointment, the two designated
appraisers shall jointly designate a third similarly qualified appraiser. Within
thirty (30) days after their appointment, each of the two appointed appraisers
shall submit to the third appraiser a sealed envelope containing such appointed
appraiser's good faith determination of the Fair Market Rent for the Premises
for the Extended Term; concurrently with such delivery, each such appraiser
shall deliver a copy of his or her determination to the other appraiser. The
third appraiser shall within ten (10) days following receipt of such
submissions, then determine which of the two appraisers' determinations most
closely reflects Fair Market Rent as defined above. The determination most
closely reflecting the third appraiser's determination shall be deemed to be the
Fair Market Rent for the Premises during the Extended Term; the third appraiser
shall have no rights to adjust, amend or otherwise alter the determinations made
by the appraiser selected by the parties, but must select one or the other of
such appraisers' submissions. The determination by such third appraiser shall be
final and binding upon the parties. Said third appraiser shall, upon selecting
the determination which most closely resembles Fair Market Rent, concurrently
notify both parties hereto. The Base Rent for the Extended Term shall be the
determination so selected. The parties shall share the appraisal expenses
equally. If the Extended Term begins prior to the determination of Fair Market
Rent, Lessee shall pay monthly installments of Base Rent equal to one hundred
ten percent (110%) of the monthly installment of Base Rent in effect for the
last year of the initial Lease Term. Once a determination is made, any over
payment or under payment shall be reimbursed as a credit against, or paid by
adding to, the monthly installment of Base Rent next falling due.
ARTICLE IV
RENT: TRIPLE NET LEASE
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Section 4.01. Base Rent. Lessee shall pay to Lessor as Base Rent an
initial monthly installment of Three Dollars and Fifty Cents ($3.50) per square
foot of Rentable Area as determined under Section 2.01., in advance, on the
first day of each calendar month of the Lease Term, commencing on the
Commencement Date. Base Rent for any period during the Lease Term which is for
less than one month shall be a pro rata portion of the monthly installment
(based on the actual days in that month).
Section 4.02. Rent Adjustment. The Base Rent set forth in Section 4.01.
above shall be adjusted upward by an annual compounded increase of three and
five tenths percent (3.5%), as of the first day of the thirteenth (13th) full
calendar month following the Commencement Date and as of each anniversary of
that date thereafter during the Lease Term, as shown on Exhibit "E" attached
hereto.
Section 4.03. First Payment of Base Rent. The first payment of Base Rent
shall be due within five (5) days after Lessee's execution of this Lease. Base
Rent payments shall resume on the first day of the calendar month immediately
succeeding the Commencement Date. If the Commencement Date is other than the
first day of a calendar month, the first payment of Base Rent subsequent to the
Commencement Date, but only that payment of Base Rent, shall be reduced by any
excess of the first Base Rent installment paid in advance over the prorated
amount actually due for such partial first month of the Lease Term.
Section 4.04. Absolute Triple Net Lease. This Lease is what is commonly
called a "Absolute Triple Net Lease," it being understood that Lessor shall
receive the Base Rent set forth in Section 4.01. free and clear of any and all
expenses, costs, impositions, taxes, assessments, liens or charges of any nature
whatsoever. Lessee shall pay all rent in lawful money of the United States of
America to Lessor at the notice address stated herein or to such other persons
or at such other places as Lessor may designate in writing on or before the due
date specified for same without prior demand, set-off or deduction of any nature
whatsoever. It is the intention of the parties hereto that this Lease shall not
be terminable for any reason by Lessee, and that except as herein expressly
provided in Articles III, VIII and XIII, concerning delay, destruction and
condemnation, Lessee shall in no event be entitled to any abatement of or
reduction in rent payable under this Lease. Any present or future law to the
contrary shall not alter this agreement of the parties.
Section 4.05. Additional Rent. In addition to the Base Rent reserved by
Section 4.01., Lessee shall pay, as Additional Rent, all taxes, assessments,
fees and other impositions in accordance with the provisions of Article IX,
insurance premiums in accordance with the provisions of Article VII, operating
charges, and Common Area facility use privilege charges with respect to the
amenities/athletic facility equating to Lessee's share of said facilities
allocation of Base Rent and Additional Rent as well as, maintenance, repair and
replacement costs and expenses, utility charges, and other costs and charges
allocable to the Common Area and the Common Area facilities and the Outside
Areas of the Premises, all in accordance with the provisions of Article VI and
any other charges, costs and expenses (including appropriate reserves therefor)
which are contemplated or which may arise under any provision of this Lease
during the Lease Term, plus a Management Fee to Lessor equal to 3% of the Base
Rent. The Management Fee is due and payable, in advance, with each installment
of Base Rent. All of such
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charges, costs, expenses, Management Fee and all other amounts payable by Lessee
hereunder, shall constitute Additional Rent, and upon the failure of Lessee to
pay any of such charges, costs or expenses, Lessor shall have the same rights
and remedies as otherwise provided in this Lease for the failure of Lessee to
pay Base Rent. To the extent any of the aforesaid amounts are fairly allocable
to the Common Area or to other portions of the Project, Lessee's obligation is
to pay only its proportionate share as determined by Lessor based upon the ratio
of the Rentable Area of the Premises to the Rentable Area of other office and
research and development buildings at the Project.
(b) Payment. To the extent not paid pursuant to other provisions of this
Lease, and at Lessor's sole election, Lessor may submit invoices and Lessee
shall pay Lessee's share of Additional Rent in monthly installments on the first
day of each month in advance in an amount to be estimated by Lessor, based on
Lessor's experience in managing office/research and development projects. Within
ninety (90) days following the end of the period used by Lessor in estimating
Additional Rent, Lessor shall furnish to Lessee a statement (hereinafter
referred to as "Lessor's Statement") of the actual amount of Lessee's
proportionate share of such Additional Rent for such period. Within fifteen (15)
days thereafter, Lessee shall pay to Lessor, as Additional Rent, or Lessor shall
remit or credit to Lessee, as the case may be, the difference between the
estimated amounts paid by Lessee and the actual amount of Lessee's Additional
Rent for such period as shown by such statement. Monthly installments for the
ensuing year shall be adjusted upward or downward as set forth in Lessor's
Statement.
Section 4.06. Security Deposit. Upon the date this Lease is executed by
Lessee, Lessee shall deposit with Lessor a Security Deposit equal to twelve (12)
month's estimated Base Rent in the amount of Six Million, Fifty-One Thousand,
Eight Hundred Sixty-Four and no cents ($6,051,864.00) in the form of cash or an
unconditional, irrevocable letter of credit without documents, with Lessor as
beneficiary, drawable in whole or in part, and providing for payment in San
Francisco on presentation of Lessee's drafts on sight, drawable and otherwise
from a bank and in a form acceptable to Lessor (the "Security Deposit"). The
Security Deposit shall be held by Lessor as security for the faithful
performance by Lessee of all of the terms, covenants, and conditions of this
Lease applicable to Lessee. If Lessee is in breach of this Lease (beyond any
applicable cure period provided herein) with respect to any provision of this
Lease, including but not limited to the provisions relating to the condition of
the Premises upon Lease Termination, Lessor may (but shall not be required to)
use, apply or retain all or any part of the Security Deposit for the payment of
any amount which Lessor may spend by reason of Lessee's default or to compensate
Lessor for any loss or damage which Lessor may suffer by reason of Lessee's
default. If any portion of the Security Deposit is so used or applied, Lessee
shall, within ten days after written demand therefor, deposit cash with Lessor
in an amount sufficient to restore the Security Deposit to its original amount.
Lessee's failure to do so shall be a Default by Lessee. The rights of Lessor
pursuant to this Section 4.06. are in addition to any rights which Lessor may
have pursuant to Article 12 below. If Lessee fully and faithfully performs every
provision of this Lease to be performed by it, the Security Deposit or any
balance thereof shall be returned (without interest) to Lessee (or, at Lessor's
option, to the last assignee of Lessee's interests hereunder) at Lease
expiration or termination and after Lessee has vacated the Premises. Lessor
shall not be required to keep the Security Deposit separate from Lessor's
general funds or be
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deemed a trustee of same. Subject to the prior written approval of Lessor and
Lessor's lender(s), the letter of credit may be reduced to an amount not less
than the total of three (3) months of Base Rent at the then current rate, if
Lessee establishes through financial statements prepared in accordance with
generally accepted accounting principles and in a form acceptable to Lessor that
Lessee has achieved annual revenue for a period of at least one (1) fiscal year
of at least Seven Hundred Fifty Million Dollars ($750,000,000) and has further
achieved quarterly operating profit of at least One Hundred Million Dollars
($100,000,000) for not less than four (4) consecutive calendar quarters. If the
Security Deposit is in whole or in part in the form of a Letter of Credit,
failure of Lessee to deliver a replacement Letter of Credit to Lessor at least
forty-five (45) days prior to the expiration date of any current Letter of
Credit shall constitute a separate default entitling Lessor to draw down
immediately and entirely on the current Letter of Credit and the proceeds shall
constitute a cash Security Deposit.
ARTICLE V
USE
Section 5.01. Permitted Use and Limitations on Use. The Premises shall be
used and occupied only for office, research and development, together with such
ancillary uses which do not cause excessive wear of the Premises or increase the
potential liability of Lessor, and for no other use, without Lessor's prior
written consent. Lessee shall not use, suffer or permit the use of the Premises
in any manner that will tend to create or constitute waste, nuisance or unlawful
acts. In no event shall it be unreasonable for Lessor to withhold its consent as
to uses which it determines would tend to increase materially the wear of the
Premises or any part thereof or increase the potential liability of Lessor or
decrease the marketability, financability, leasability or value of the Premises
or Project. Lessee shall not do anything in or about the Premises which will (i)
cause structural injury to the Building or Premises, or (ii) cause damage to any
part of the Building or Premises except to the extent reasonably necessary for
the installation of Lessee's trade fixtures and Lessee's Alterations, and then
only in a manner which has been first approved by Lessor in writing. Lessee
shall not operate any equipment within the Building or Premises which will (i)
materially damage the Building or the Common Area, (ii) overload existing
electrical systems or other mechanical equipment servicing the Building, (iii)
impair the efficient operation of the sprinkler system or the heating,
ventilating or air conditioning ("HVAC") equipment within or servicing the
Building, (iv) damage, overload or corrode the sanitary sewer system, or (v)
damage the Common Area or any other part of the Project. Lessee shall not
attach, hang or suspend anything from the ceiling, roof, walls or columns of the
Building or set any load on the floor in excess of the load limits for which
such items are designed nor operate hard wheel forklifts within the Premises.
Any dust, fumes, or waste products generated by Lessee's use of the Premises
shall be contained and disposed so that they do not (i) create an unreasonable
fire or health hazard, (ii) damage the Premises, or (iii) result in the
violation of any law. Except as approved by Lessor, Lessee shall not change the
exterior of the Building, or the outside area of the Premises, or install any
equipment or antennas on or make any penetrations of the exterior or roof of the
Building. Lessee shall not conduct on any portion of the Premises any sale of
any kind, including any public or private auction, fire sale,
going-out-of-business sale, distress sale or other liquidation sale. No
materials, supplies, tanks or containers, equipment, finished products or
semifinished products, raw materials, inoperable vehicles or articles of any
nature shall be stored upon or permitted to remain within the outside areas of
the Premises except
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in fully fenced and screened areas outside the Building which have been designed
for such purpose and have been approved in writing by Lessor for such use by
Lessee.
Section 5.02. Compliance with Law.
(a) Lessor shall deliver the Premises to Lessee on the Commencement Date
(without regard to the use for which Lessee will use the Premises) free of
violations of any covenants or restrictions of record, or any applicable law,
building code, regulation or ordinance in effect on such Commencement Date,
including without limitation, the Americans with Disability Act, and free of
Year Two Thousand computer programming defects.
(b) Except as provided in paragraph 5.02.(a), Lessee shall, at Lessee's
cost and expense, comply promptly with all statutes, ordinances, codes, rules,
regulations, orders, covenants and restrictions of record, and requirements
applicable to the Premises and Lessee's use and occupancy of same in effect
during any part of the Lease Term, whether the same are presently foreseeable or
not, and without regard to the cost or expense of compliance.
(c) By executing this Lease, Lessee acknowledges that it has reviewed and
satisfied itself as to its compliance, or intended compliance with the
applicable zoning and permit laws, hazardous materials and waste requirements,
and all other statutes, laws, or ordinances relevant to the uses stated in
Section 5.01., above.
Section 5.03. Condition of Premises at Commencement Date. Subject to all
of the terms of this Lease for the construction of Tenant Improvements, Lessor
shall deliver the Building to Lessee on the Commencement Date with the Building
plumbing, lighting, heating, ventilating, air conditioning, gas, electrical, and
sprinkler systems and loading doors as set forth in Exhibit "D" in proper
operating condition and built substantially in accordance with the approved
plans therefor, and in a workmanlike manner. Except as otherwise provided in
this Lease, Lessee hereby accepts the Premises in their condition existing as of
the Commencement Date, subject to all applicable zoning, municipal, county and
state laws, ordinances and regulations governing and regulating the use and
condition of the Premises, and any covenants or restrictions, liens,
encumbrances and title exceptions of record, and accepts this Lease subject
thereto and to all matters disclosed thereby and by any exhibits attached
hereto. Lessee acknowledges that neither Lessor nor any agent of Lessor has made
any representation or warranty as to the present or future suitability of the
Premises for the conduct of Lessee's business.
Section 5.04. Defective Condition at Commencement Date. In the event that
it is determined, and Lessee notifies Lessor in writing within one year after
the Commencement Date, that any of the obligations of Lessor set forth in
Section 5.02.(a) or Section 5.03.(a) were not performed, then it shall be the
obligation of Lessor, and the sole right and remedy of Lessee, after receipt of
written notice from Lessee setting forth with specificity the nature of the
failed performance, to promptly, within a reasonable time and at Lessor's sole
cost, correct same. Except as to certain defects which remain Lessor's
responsibility under Section 6.01(b) Lessee's failure to give such written
notice to Lessor within one year after the Commencement Date shall
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constitute a conclusive presumption that Lessor has complied with all of
Lessor's obligations under the foregoing sections 5.02. and 5.03., and any
required correction after that date shall be performed by Lessee, at its sole
cost and expense. At the end of the first year of the Lease Term, Lessor shall
promptly assign to Lessee all of Lessor's contractor's, and/or manufacturer's
guarantees, warranties, and causes of action which do not relate to Lessor's
obligations under Section 6.01(b).
Section 5.05. Building Security. Lessee acknowledges and agrees that it
assumes sole responsibility for security at the Premises for its agents,
employees, invitees, licensees, contractors, guests and visitors and will
provide such systems and personnel for same including, without limitation, any
portion of the Common Area located on the legal parcel on which the Building is
located as it deems necessary or appropriate and at its sole cost and expense.
Lessee acknowledges and agrees that Lessor does not intend to provide any
security system or security personnel at the Premises or Project, including,
without limitation, at the Common Areas, provided, however, that nothing herein
shall be deemed to prevent Lessor from providing such system or personnel in the
future, the cost of which will be included in those items for which Lessee pays
Additional Rent.
Section 5.06. Rules and Regulations. Lessor may from time to time
promulgate reasonable and nondiscriminatory rules and regulations applicable for
the care and orderly management of the Premises. Such rules and regulations
shall be binding upon Lessor upon delivery of a copy thereof to Lessor, and
Lessor agrees to abide by such rules and regulations. A copy of the initial
Rules and Regulations is attached hereto as Exhibit "L." If there is a conflict
between the rules and regulations and any of the provisions of this Lease, the
provisions of this Lease shall prevail. Lessor shall not be responsible for the
violation of any such rules and regulations by any person, including, without
limitation, Lessee or its employees, agents, invitees, licensees, guests,
visitors or contractors.
ARTICLE VI
MAINTENANCE, REPAIRS AND ALTERATIONS
Section 6.01. Maintenance of Premises.
(a) Throughout the Lease Term, Lessee, at its sole cost and expense, shall
keep, maintain, repair and replace the Premises (except as provided in 6.01.(b))
and all improvements and appurtenances in or serving the Premises, including,
without limitation, all interior and exterior walls, all doors and windows, the
roof membrane, all elevators and stairways, all wall surfaces and floor
coverings, all Tenant Improvements and alterations, additions and improvements
installed during the Lease Term, all sewer, plumbing, electrical, lighting,
heating, ventilation and cooling systems, fire sprinklers, fire safety and
security systems, fixture and appliances and all wiring and glazing, in the same
good order, condition and repair as they are in on the Commencement Date, or may
be put in during the Lease Term, reasonable wear excepted, provided that wear
which could be prevented by first class maintenance shall not be deemed
reasonable.
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(b) Lessor, at its sole cost and expense, shall repair defects in the
exterior walls (including all exterior glass which is damaged by structural
defects in such exterior walls), supporting pillars, structural walls, roof
structure and foundations of the Building and sewer and plumbing systems outside
the Building, provided that the need for repair is not caused by Lessee, in
which event Lessor shall, at Lessee's sole cost and expense, repair same. Lessor
shall replace the roof membrane of the Building, the parking lot surface,
landscaping, drainage, irrigation, sprinkler and sewer and plumbing systems
outside the Building systems when the useful life of each has expired, and
Lessee shall pay that portion of the cost of each replacement, together with
annual interest at the Agreed Rate which shall be amortized over the useful life
of each such replacement applicable to the balance of the Lease Term, in equal
monthly installments due and payable with installments of Base Rent provided
that as to repairs and replacements within the Common Area, Lessee shall pay its
proportionate share. Lessee shall give Lessor written notice of any need of
repairs which are the obligation of Lessor hereunder and Lessor shall have a
reasonable time to perform same. Should Lessor default as provided in Section
12.03 with respect to its obligation to make any of the repairs assumed by it
hereunder with respect to the Building, Lessee shall have the right to perform
such repairs and Lessor agrees that within thirty (30) days after written demand
accompanied by detailed invoice(s), it shall pay to Lessee the cost of any such
repairs together with accrued interest from the date of Lessee's payment at the
Agreed Rate. Lessor shall not be liable to Lessee, its employees, invitees, or
licensees for any damage to person or property, and Lessee's sole right and
remedy shall be the performance of said repairs by Lessee with right of
reimbursement from Lessor of the reasonable fair market cost of said repairs,
not exceeding the sum actually expended by Lessee, together with accrued
interest from the date of Lessee's payment at the Agreed Rate, provided that
nothing herein shall be deemed to create a right of setoff or withholding by
Lessee of Base Rent or Additional Rent or any other amounts due herein. Lessee
hereby expressly waives all rights under and benefits of Sections 1941 and 1942
of the California Civil Code or under any similar law, statute or ordinance now
or hereafter in effect to make repairs and offset the cost of same against rent
or to withhold or delay any payment of rent or any other of its obligations
hereunder as a result of any default by Lessor under this Section 6.01.(b).
(c) Lessee agrees to keep the Premises, both inside and out, clean and in
sanitary condition as required by the health, sanitary and police ordinances and
regulations of any political subdivision having jurisdiction and to remove all
trash and debris which may be found in or around the Premises. Lessee further
agrees to keep the interior surfaces of the Premises, including, without
limitation, windows, floors, walls, doors, showcases and fixtures clean and neat
in appearance.
(d) If Lessee refused or neglects to commence such repairs and/or
maintenance for which Lessee is responsible under this Article VI (including
with respect to any portion of the Common Area located on the legal parcel on
which the Building is located) within a thirty (30) day period (or as soon as
practical and in no event later than five (5) days, if the failure to initiate
the repair threatens to cause further damage to the Premises) after written
notice from Lessor and thereafter diligently prosecute the same to completion,
then Lessor may (i) enter the Premises (except in an emergency, upon at least 24
hours advanced written notice) during Lessor's business hours and cause such
repairs and/or maintenance to be made and shall not be
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responsible to Lessee for any loss or damage occasioned thereby and Lessee
agrees that upon demand, it shall pay to Lessor the reasonable cost of any such
repairs, not exceeding the sum actually expended by Lessor, together with
accrued interest from the date of Lessor's payment at the Agreed Rate and (ii)
elect to enter into a maintenance contract at a market rate for first-rate
maintenance with a third party for the performance of all or a part of Lessee's
maintenance obligations, whereupon, Lessee shall be relieved from its
obligations to perform only those maintenance obligations covered by such
maintenance contract, and Lessee shall bear the entire cost of such maintenance
contract which shall be paid in advance, as Additional Rent, on a monthly basis
with Lessee's Base Rent payments.
Section 6.02. Maintenance of Common Areas and Outside Areas. Subject to
6.01.(c) and subject to Lessee paying Lessee's share of the cost and expense for
same pursuant to Section 4.05, Lessor shall maintain, repair and replace all
landscape, hardscape and other improvements within the Common Areas and shall
operate and manage the amenities/athletic facility and other Common Area
features and facilities described in Section 2.02 and Lessor shall also
maintain, repair and replace all landscape, hardscape and other improvements
within the outside areas of the Premises ("Outside Areas") whether or not all or
any portion thereof has been designated by Lessor as Common Area, including
without limitation, walkways, driveways, parking areas and lighting and
sprinkler systems.
Section 6.03. Alterations, Additions and Improvements. No alterations,
additions, or improvements ("Alterations") shall be made to the Premises by
Lessee without the prior written consent of Lessor which Lessor will not
unreasonably withhold, provided, however, that Lessee may make Alterations which
do not affect the Building systems, exterior appearance, structural components
or structural integrity and which do not exceed collectively One Hundred
Thousand Dollars ($100,000) in cost within any twelve (12) month period, without
Lessor's prior written consent. As a condition to Lessor's obligation to
consider any request for consent hereunder, Lessee shall pay Lessor upon demand
for the reasonable costs and expenses of consultants, engineers, architects and
others for reviewing plans and specifications and for monitoring the
construction of any proposed Alterations. Lessor may require Lessee to remove
any such Alterations at the expiration or termination of the Lease Term and to
restore the Premises to their prior condition by written notice given on or
before the earlier of (i) the expiration of the Lease Term or (ii) thirty (30)
days after termination of the Lease or (iii) thirty (30) days after a written
request from Lessee for such notice from Lessor provided, that, if Lessee
requests same from Lessor, Lessor will notify Lessee within five (5) business
days after receipt of Lessee's request and a copy of all plans and
specifications for the proposed Alteration whether it will require removal. All
Alterations to be made to the Premises shall be made under the supervision of a
competent, California licensed architect and/or competent California licensed
structural engineer (each of whom has been approved by Lessor) and shall be made
in accordance with plans and specifications which have been furnished to and
approved by Lessor in writing prior to commencement of work. All Alterations
shall be designed, constructed and installed at the sole cost and expense of
Lessee by California licensed architects, engineers, and contractors approved by
Lessor, in compliance with all applicable law, and in good and workmanlike
manner. Any Alteration except furniture and trade fixtures, shall become the
property of Lessor at the expiration, or sooner termination of the Lease, unless
Lessor directs otherwise, provided that Lessee shall retain title to all
furniture and trade fixtures placed on the Premises. All heating,
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lighting, electrical, air conditioning, full height partitioning (but not
moveable, free standing cubicle-type partitions which do not extend to the
ceiling or connect to Building walls), drapery and carpeting installations made
by Lessee together with all property that has become an integral part of the
Premises, shall be and become the property of Lessor upon the expiration, or
sooner termination of the Lease, and shall not be deemed trade fixtures. Within
thirty (30) days after completion of any Alteration, Lessee, Lessee shall
provide Lessor with a complete set of "as built" plans for same.
Section 6.04. Covenant Against Liens. Lessee shall not allow any liens
arising from any act or omission of Lessee to exist, attach to, be placed on, or
encumber Lessor's or Lessee's interest in the Premises or Project, or any
portion of either, by operation of law or otherwise. Lessee shall not suffer or
permit any lien of mechanics, material suppliers, or others to be placed against
the Premises or Project, or any portion of either, with respect to work or
services performed or claimed to have been performed for Lessee or materials
furnished or claimed to have been furnished to Lessee or the Premises. Lessor
has the right at all times to post and keep posted on the Premises any notice
that it considers necessary for protection from such liens. At least seven (7)
days before beginning construction of any Alteration, Lessee shall give Lessor
written notice of the expected commencement date of that construction to permit
Lessor to post and record a notice of nonresponsibility. If any such lien
attaches or Lessee received notice of any such lien, Lessee shall cause the lien
to be immediately released and removed of record. Despite any other provision of
this Lease, if the lien is not released and removed within twenty (20) days
after Lessor delivers notice of the lien to Lessee, Lessor may immediately take
all action necessary to release and remove the lien, without any duty to
investigate the validity of it. All expenses (including reasonable attorney fees
and the cost of any bond) incurred by Lessor in connection with a lien incurred
by Lessee or its removal shall be considered Additional Rent under this Lease
and be immediately due and payable by Lessee.
Section 6.05 Reimbursable Capital Expenditures. Except for items of
capital expenditures which are to be made at Lessor's sole cost and expense
pursuant to the first sentence of Section 6.01(b) above, capital expenditures,
together with interest thereon at the Agreed Rate, for any replacement item at
the Premises made by Lessor in excess of Ten Thousand Dollars ($10,000.00)
during the Lease Term shall be amortized over the remaining Lease Term for the
useful life of such replacement item within the numerator being the number of
months remaining in the Lease Term and the denominator being the number of
months of the "useful life" of the improvements. Lessee shall be obligated for
such amortized portion of any such expenditure in equal monthly installments due
and payable with each installment of Base Rent.
ARTICLE VII
INSURANCE
Section 7.01. Property/Rental Insurance for Premises: At all times during
the Lease Term, Lessor shall keep the Premises insured against loss or damage by
fire and those risks normally included in the term "all risk," including,
without limitation, coverage for (i) earthquake and earthquake sprinkler
leakage, (ii) flood, (iii) loss of rents and extra expense for
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eighteen (18) months, including scheduled rent increases, (iv) boiler and
machinery, (v) Tenant Improvements and (vi) fire damage legal liability form,
including waiver of subrogation. Any deductibles shall be paid by Lessee. The
amount of such insurance shall not be less than 100% of replacement cost.
Insurance shall include a Building Ordinance and Increased Cost of Construction
Endorsement insuring the increased cost of reconstructing the Premises incurred
due to the need to comply with applicable statutes, ordinances and requirements
of all municipal, state and federal authorities now in force, which or may be in
force hereafter. Any recovery received from said insurance policy shall be paid
to Lessor and thereafter applied by Lessor to the reconstruction of the Premises
in accordance with the provisions of Article VIII below. Lessee, in addition to
the rent and other charges provided herein, shall reimburse Lessor for the cost
of the premiums for all such insurance covering the Premises in accordance with
Article IV. Such reimbursement and shall be made within (15) days of Lessee's
receipt of a copy of Lessor's statement therefor. Lessee shall pay to Lessor any
deductible (subject to the above conditions) owing within fifteen (15) days
after receipt of notice from Lessor of the amount owing. To the extent
commercially available, Lessor's insurance shall have a deductible not greater
than fifteen percent (15%) for earthquake and ten percent (10%) for the basic
"all risk" coverage.
Section 7.02. Property Insurance for Fixtures and Inventory. At all times
during the Lease Term, Lessee shall, at its sole expense, maintain insurance
with "all risk" coverage on any fixtures, furnishings, merchandise equipment or
personal property in or on the Premises, whether in place as of the date hereof
or installed hereafter. The amount of such insurance shall not be less than one
hundred percent (100%) of the replacement cost thereof, and Lessor shall not
have any responsibility nor pay any cost for maintaining any types of such
insurance. Lessee shall pay all deductibles.
Section 7.03. Lessor's Liability Insurance. During the Lease Term, Lessor
shall maintain a policy or policies of comprehensive general liability insurance
naming Lessor (and such others as designated by Lessor) against liability for
bodily injury, property damage on our about the Project, with combined single
limit coverage of not less than Thirty Million Dollars ($30,000,000.00). Lessee,
in addition to the rent and other charges provided herein, agrees to pay to
Lessor, Lessor's proportionate share of the premiums for all such insurance
pursuant to Section 4.05. The insurance premiums shall be paid in accordance
with Article IV, within (15) days of Lessee's receipt of a copy of Lessor's
statement therefore.
Section 7.04. Liability Insurance Carried by Lessee. At all times during
the Lease Term (and any holdover period) Lessee shall obtain and keep in force a
commercial general liability policy of insurance protecting Lessee, Lessor and
any Lender(s) whose names are provided to Lessee as Additional Insureds against
claims from bodily injury, personal injury and property damage based upon
involving or arising out of ownership, use, occupancy or maintenance of the
Premises and all areas appurtenant thereto. Such insurance shall be on an
occurrence basis providing a single limit coverage in amount of not less than
Ten Million Dollars ($10,000,000) per occurrence with an Additional Lessors or
Premises Endorsements and containing an "Amendment of the Pollution Exclusion
Endorsement" for damage caused by heat, smoke, fumes from a hostile fire. The
limits of said insurance required by this Lease as carried by Lessee shall not,
however limit the liability of Lessee nor relieve Lessee of any obligation
hereunder. All
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insurance to be carried by the Lessee shall be primary to and not contributory
with, any similar insurance carried by Lessor whose insurance shall be
considered excess insurance only.
Section 7.05. Lessee to Furnish Proof of Insurance. Lessee shall furnish
to Lessor prior to the Commencement Date, and at least fifteen (15) days prior
to the expiration date of any policy, certificates indicating that the property
insurance and liability insurance required to be maintained by Lessee is in full
force and effect for the twelve (12) month period following such expiration
date; that Lessor has been named as an additional insured to the extent of
contractual liability assumed in Section 7.07. "indemnification" and Section
7.08. "Lessor as Party Defendant"; and that all such policies will not be
canceled unless thirty (30) days' prior written notice of the proposed
cancellation has been given to Lessor. The insurance shall be with insurers
approved by Lessor, provided, however, that such approval shall not be
unreasonably withheld so long as Lessee's insurance carrier has a Best's
Insurance Guide rating not less than A+ VIII.
Section 7.06. Mutual Waiver of Claims and Subrogation Rights. Lessor and
Lessee hereby release and relieve the other, and waive their entire claim of
recovery for loss or damage to property arising out of or incident to fire,
lightning, and the other perils included in a standard "all risk" insurance
policy of a type described in Sections 7.01 and 7.02 above, when such property
constitutes the Premises, or is in, on or about the Premises, whether or not
such loss or damage is due to the negligence of Lessor or Lessee, or their
respective agents, employees, guests, licensees, invitees, or contractors.
Lessee and Lessor waive all rights of subrogation against each other on behalf
of, and shall obtain a waiver of all subrogation rights from, all property and
casualty insurers referenced above.
Section 7.07. Indemnification and Exculpation.
(a) Except as otherwise provided in Section 7.07.(b), Lessee shall
indemnify and hold Lessor free and harmless from any and all liability, claims,
loss, damages, causes of action (whether in tort or contract, law or equity, or
otherwise), expenses, charges, assessments, fines, and penalties of any kind,
including without limitation, reasonable attorney fees, expert witness fees and
costs, arising by reason of the death or injury of any person, including any
person who is an employee, agent, invitee, licensee, permittee, visitor, guest
or contractor of Lessee, or by reason of damage to or destruction of any
property, including property owned by Lessee or any person who is an employee,
agent, invitee, permitee, visitor, or contractor of Lessee, caused or allegedly
caused (1) while that person or property is in or about the Premises; (2) by
some condition of the Premises; (3) by some act or omission by Lessee or its
agent, employee, licensee, invitee, guest, visitor or contractor or any person
in, adjacent, on, or about the Premises with the permission, consent or
sufferance of Lessee; (4) by any matter connected to or arising out of Lessee's
occupation and use of the Premises, or any breach or default in timely
observance or performance of any obligation on Lessee's part to be observed or
performed under this Lease.
(b) Notwithstanding the provisions of Section 7.07.(a) of this Lease,
Lessee's duty to indemnify and hold Lessor harmless shall not apply to any
liability, claims, loss or damages arising because of Lessor's sole active
negligence or willful acts of misconduct.
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(c) Lessee hereby waives all claims against Lessor for damages to goods,
wares and merchandise and all other personal property in, on or about the
Premises and for injury or death to persons in, on or about the Premises from
any cause arising at any time to the fullest extent permitted by law and in no
event shall Lessor be liable for lost profits or other consequential damages
arising from any cause or for any damage which is or could be covered by the
insurance Lessee is required to carry under this Lease. Lessor hereby waives all
claims against Lessee for any damage which is or could be covered by the
insurance Lessor is required to carry under this Lease.
Section 7.08. Lessor as Party Defendant. If by reason of an act or
omission of Lessee or any of its employees, agents, invitees, licensee,
visitors, guests or contractors, Lessor is made a party defendant or a
cross-defendant to any action involving the Premises or this Lease, Lessee shall
hold harmless and indemnify Lessor from all liability or claims of liability,
including all damages, attorney fees and costs of suit.
ARTICLE VIII
DAMAGE OR DESTRUCTION
Section 8.01. Destruction of the Premises.
(a) In the event of a partial destruction of the Premises during the Lease
Term from any cause, Lessor, upon receipt of, and to the extent of, insurance
proceeds paid in connection with such casualty, shall forthwith repair the same,
provided the repairs can be made within a reasonable time under state, federal,
county and municipal applicable law, but such partial destruction shall in no
way annul or void this Lease, (except as provided in Section 8.01.(b) below)
provided that Lessee shall be entitled to a proportionate credit for rent equal
to the payment of Rental Income Insurance received by Lessor. Lessor shall use
diligence in making such repairs within a reasonable time period, subject to the
Force Majeure provisions of Section 17.21, in which instance the time period
shall be extended accordingly, and this Lease shall remain in full force and
effect, with the rent to be proportionately reduced as provided in this Section.
If the Premises are damaged by any peril within twelve (12) months prior to the
last day of the Lease Term and, in the reasonable opinion of the Lessor's
architect or construction consultant, the restoration of the Premises cannot be
substantially completed within ninety (90) days after the date of such damage
and such damage renders unusable more than thirty percent (30%) of the Premises,
Lessor may terminate this Lease on sixty (60) days written notice to Lessee.
(b) If the Building is damaged from any cause, Lessor shall promptly
furnish Lessee with the written opinion of Lessor's architect of when the
restoration work to repair the damage may be complete. Lessee shall have the
option to terminate this Lease if the time estimated to substantially complete
the restoration exceeds fifteen (15) months from the date Lessor's architect's
opinion is delivered to Lessee, which shall be (i) exercised by written notice
to Lessor delivered within thirty (30) days after delivery to Lessee of Lessor's
architect's opinion or (ii) irrevocably and automatically waived if not so
timely exercised. In the event of termination, Lessee shall pay to Lessor all
insurance proceeds, if any, received by Lessee as a result of the
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damage or destruction except to the extent allocable to the unamortized (over
the Lease Term) cost of (i) Tenant Improvements paid for by Lessee over and
above the Tenant Improvement Allowance and (ii) or other Alterations installed
therein at Lessee's sole cost and expense.
Section 8.02. Waiver of Civil Code Remedies. Lessee hereby expressly
waives any rights to terminate this Lease upon damage or destruction to the
Premises, including without limitation any rights pursuant to the provisions of
Section 1932, Subdivisions 1 and 2 and Section 1933, Subdivision 4, of the
California Civil Code, as amended from time-to-time, and the provisions of any
similar law hereinafter enacted.
Section 8.03. No Abatement of Rentals. The Rentals and other charges due
under this Lease shall not be reduced or abated by reason of any damage or
destruction to the Premises (except to the extent of proceeds received by Lessor
from the Rental Loss Insurance), and Lessor shall be entitled to all proceeds of
the insurance maintained pursuant to Section 7.01. above during the period of
rebuilding pursuant to Section 8.01.(a) above, or if the Lease is terminated
pursuant to Section 8.01.(a) above. Lessee shall have no claim against Lessor,
including, without limitation, for compensation for inconvenience or loss of
business, profits or goodwill during any period of repair or reconstruction.
Section 8.04. Liability for Personal Property. In no event shall Lessor
have any liability for, nor shall it be required to repair or restore, any
injury or damage to Lessee's personal property or to any other personal property
or to Alterations in or upon the Premises by Lessee.
ARTICLE IX
REAL PROPERTY TAXES
Section 9.01. Payment of Taxes. Subject to Lessee timely paying Lessor the
same in advance as provided below, Lessee shall pay all real property taxes,
including any escaped or supplemental tax and any form of real estate tax or
assessment, general, special, ordinary or extraordinary, and any license, fee,
charge, excise or imposition ("real property tax"), imposed, assessed or levied
on or with respect to the Premises (and Lessee shall pay its proportionate share
of real property taxes imposed, assessed or levied on or with respect to the
Common Area) by any Federal, State, County, City or other political subdivision
or public authority having the direct or indirect power to tax, including,
without limitation, any improvement district or any community facilities
district, as against any legal or equitable interest of Lessor in the Premises
or against the Premises or any part thereof applicable to the Premises for all
periods of time included within the Lease Term (as the same may be extended and
during any holdover period), as well as any government or private cost sharing
agreement assessments made for the purpose of augmenting or improving the
quality of services and amenities normally provided by government agencies. All
such payments shall be made by Lessee directly pursuant to Section 4.05 hereof
no later than ten (10) days after Lessor's delivery to Lessee of a statement of
the real property tax due, together with a copy of the applicable tax bill.
Notwithstanding the foregoing, Lessee shall not be required to pay any net
income taxes, franchise taxes, or any succession or inheritance taxes of Lessor.
If at anytime during the Lease Term, the State of California or any political
subdivision of the state, including any county, city, city and county, public
corporation, district,
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or any other political entity or public corporation of this state, levies or
assesses against Lessor a tax, fee, charge, imposition or excise on rents under
the Lease, the square footage of the Premises, the act of entering into this
Lease, or the occupancy of Lessee, or levies or assesses against Lessor any
other tax, fee, or excise, however described, including, without limitation, a
so-called value added, business license, transit, commuter, environmental or
energy tax fee, charge or excise or imposition related to the Premises as a
direct substitution in whole or in part for, or in addition to, any real
property taxes on the Premises, Lessee shall pay ten (10) days before
delinquency or ten (10) days after receipt of the tax bill, whichever is later,
that tax, fee, charge, excise or imposition.
Section 9.02. Pro Ration for Partial Years. If any such taxes paid by
Lessee shall cover any period prior to the Commencement Date or after the
Expiration Date of the Lease Term, Lessee's share of such taxes shall be
equitably prorated to cover only the period of time within the tax fiscal year
during which this Lease shall be in effect, and Lessor shall reimburse Lessee to
any extent required. If Lessee shall fail to pay any such taxes, Lessor shall
have the right to pay the same in which case Lessee shall repay such amount to
Lessor within ten (10) days after written demand, together with interest at the
Agreed Rate.
Section 9.03. Personal Property Taxes.
(a) Lessee shall pay prior to delinquency all taxes imposed, assessed
against and levied upon trade fixtures, furnishings, equipment and all other
personal property of Lessee contained in the Premises or elsewhere. When
possible, Lessee shall cause said trade fixtures, furnishings, equipment and all
other personal property to be assessed and billed separately from the real
property of Lessor.
(b) If any of Lessee's said personal property shall be assessed with
Lessor's real property, Lessee shall pay Lessor the taxes attributable to Lessee
within ten (10) days after receipt of a written statement setting forth the
taxes applicable to Lessee's property.
(c) If Lessee shall fail to pay any such taxes, Lessor shall have the
right to pay the same, in which case Lessee shall repay such amount to Lessor
with Lessee's next rent installment together with interest at the Agreed Rate.
ARTICLE X
UTILITIES
Section 10.01. Lessee to Pay. Lessee shall pay prior to delinquency and
throughout the Lease Term, all charges for water, gas, heating, cooling, sewer,
telephone, electricity, garbage, air conditioning and ventilation, janitorial
service, landscaping and all other materials and utilities supplied to the
Premises. The disruption, failure, lack or shortage of any service or utility
due to any cause whatsoever shall not affect any obligation of Lessee hereunder,
and Lessor shall faithfully keep and observe all the terms, conditions and
covenants of this Lease and pay all rent due hereunder, all without diminution,
credit or deduction.
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ARTICLE XI
ASSIGNMENT AND SUBLETTING
Section 11.01. Lessor's Consent Required. Except as provided in Section
11.02, Lessee shall not voluntarily or by operation of law assign, transfer,
mortgage, sublet, license or otherwise transfer or encumber all or any part of
Lessee's interest in this Lease or in the Premises or any part thereof, without
Lessor's prior written consent within fifteen (15) business days after Lessor's
receipt of a signed Letter of Intent and complete financial information
concerning the proposed transferee which Lessor shall not unreasonably withhold,
or delay, provided that if Lessor fails to respond within said fifteen (15)
business days, it shall be deemed to have withheld consent. Lessor shall respond
in writing to Lessee's request for consent hereunder in a timely manner and any
attempted assignment, transfer, mortgage, encumbrance, subletting or licensing
without such consent shall be void, and shall constitute a breach of this Lease.
By way of example, but not limitation, reasonable grounds for denying consent
include: (i) poor credit history or insufficient financial strength of
transferee, (ii) transferee's intended use of the Premises is inconsistent with
the permitted use or will materially and adversely affect Lessor's interest.
Lessee shall reimburse Lessor upon demand for Lessor's reasonable costs and
expenses (including attorneys' fees, architect fees and engineering fees)
involved in renewing any request for consent whether or not consent is granted.
Section 11.02. Lessee Affiliates. Lessee may assign or sublet the
Premises, or any portion thereof, to any corporation which controls, is
controlled by, or is under common control with Lessee, or to any corporation
resulting from the merger or consolidation with Lessee, or to any person or
entity which acquires all, or substantially all of the assets of Lessee as a
going concern of the business that is being conducted on the Premises, provided
that said assignee or sublessee assumes, in full, the obligations of Lessee
under this Lease and provided further that the use to which the Premises will be
put does not materially change. Any such assignment shall not, in any way,
affect or limit the liability of Lessee under the terms of this Lease.
Section 11.03. No Release of Lessee. Regardless of Lessor's consent, no
subletting or assignment shall release Lessee of Lessee's obligation or alter
the primary liability of Lessee to pay the rent and to perform all other
obligations to be performed by Lessee hereunder. The acceptance of rent by
Lessor from any other person shall not be deemed consent to any subsequent
assignment or subletting. In the event of default by any assignee of Lessee or
any successor of Lessee, in the performance of any of the terms hereof, Lessor
may proceed directly against Lessee without the necessity of exhausting remedies
against said assignee.
Section 11.04. Excess Rent. In the event Lessor shall consent to a
sublease or an assignment, Lessee shall pay to Lessor with its regularly
scheduled Base Rent payments, fifty percent (50%) of all sums and the fair
market value of all consideration collected or received by Lessee from a
sublessee or assignee which are in excess of the Base Rent and Additional Rent
due and payable with respect to the subject space pursuant to Article IV for the
time period encompassed by the sublease or assignment term, after first
deducting (i) reasonable leasing commissions paid by Lessee with respect to such
sublease or assignment, and (ii) that portion of
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the cost of Tenant Improvements paid by Lessee (up to $30 per square foot) which
remains unamortized (using an amortization schedule of the first 60 months of
the Lease Term) during any portion of the sublease or assignment term.
Section 11.05. No Impairment of Security. Lessee's written request to
Lessor for consent to an assignment or subletting or other form of transfer
shall be accompanied by (a) the name and legal composition of the proposed
transferee; (b) the nature of the proposed transferee's business to be carried
on in the Premises; (c) the terms and provisions of the proposed transfer
agreement; and (d) such financial and other reasonable information as Lessor may
request concerning the proposed transferee.
Section 11.06. Lessor's Recapture Rights.
(a) Lessor's Recapture Rights. Notwithstanding any other provision of this
Article 11, in the event that Lessee proposes at any time after the first
twenty-four (24) months of the Lease Term to sublease or assign or otherwise
transfer any interest in this Lease or the Premises or any part thereof
affecting (collectively with all other such subleases, assignments, or transfers
then in effect) more than fifty percent (50%) of the square footage of the
Rentable Area of the Building (Recapture Space) more than half of the then
remaining Lease Term, then Lessor shall have the option to recapture the
Recapture Space by written notice to Lessee (Recapture Notice) given within ten
(10) business days after Lessor receives any notice of such proposed assignment
or sublease or other transfer ("Transfer Notice"). A timely Recapture Notice
terminates this Lease for the Recapture Space, effective as of the date
specified in the Transfer Notice. If Lessor declines or fails timely to deliver
a Recapture Notice, Lessor shall have no further right under this Section 11.06
to the Recapture Space unless it becomes available again after transfer by
Lessee.
(b) Consequences of Recapture. Base Rent and Additional Rent shall be
recalculated upon any recapture. To recalculate the Base Rent under this Lease
if Lessor recaptures the Recapture Space, the then current Base Rent
(immediately before Lessor's recapture) under the Lease shall be multiplied by a
fraction, numerator of which is the square feet of the Rentable Area retained by
Lessee after Lessor's recapture and the denominator of which is the total square
feet of the Rentable Area before Lessor's recapture. The Additional Rent, to the
extent that it is calculated on the basis of Rentable Area of the Building,
shall be recalculated in identical fashion. This Lease as so amended shall
continue thereafter in full force and effect. Either party may require written
confirmation of the amendments to this Lease necessitated by Lessor's recapture
of the Recapture Space. If Lessor recaptures the Recapture Space, Lessor shall,
at Lessor's sole expense, construct, paint, and furnish any partitions required
to segregate the Recapture Space from the remaining Premises retained by Lessee.
ARTICLE XII
DEFAULTS; REMEDIES
Section 12.01. Defaults. The occurrence of any one or more of the
following events shall constitute a material default and breach of this Lease by
Lessee:
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(a) The abandonment of the Premises by Lessee or the commission of waste
at the Premises or the making of an assignment or subletting in violation of
Article XI, provided however, abandonment shall be considered to not occur if
the Premises are maintained and occupied to the extent necessary to maintain the
insurance on each and every portion of the Premises;
(b) The failure by Lessee to make any payment of rent or any other payment
required to be made by Lessee hereunder, as and when due, if such failure
continues for a period of five (5) business days after written notice thereof
from Lessor to Lessee. In the event that Lessor serves Lessee with a Notice to
Pay Rent or Quit in the form required by applicable Unlawful Detainer statutes
such Notice shall constitute the notice required by this paragraph, provided
that the cure period stated in the Notice shall be five (5) business days rather
than the statutory three (3) days;
(c) Lessee's failure to provide (i) any instrument or assurance as
required by Section 7.05 or (ii) estoppel certificate as required by Section
15.01 or (iii) any document subordinating this Lease to a Lender's deed of trust
if such failure continues for five (5) business days after written notice of the
failure. In the event Lessor serves Lessee with a Notice to Perform Covenant or
Quit in the form required by applicable Unlawful Detainer Statutes, such Notice
shall constitute the notice required by this paragraph, provided that the cure
period stated in the Notice shall be five (5) business days rather than the
statutory three (3) days;
(d) The failure by Lessee to observe or perform any of the covenants,
conditions or provisions of this Lease to be observed or performed by Lessee,
other than described in paragraph (a) (b) or (c) above, if such failure
continues for a period of ten (10) days after written notice thereof from Lessor
to Lessee; provided, however, that if the nature of Lessee's default is such
that more than ten (10) days are reasonably required for its cure, then Lessee
shall not be deemed to be in default if Lessee commences such cure within said
ten (10) day period and thereafter diligently prosecutes such cure to
completion;
(e) (i) The making by Lessee of any general arrangement or assignment for
the benefit of creditors; (ii) the filing by Lessee of a voluntary petition in
bankruptcy under Title 11 U.S.C. or the filing of an involuntary petition
against Lessee which remains uncontested for a period of sixty days; (iii) the
appointment of a trustee or receiver to take possession of substantially all of
Lessee's assets located at the Premises or of Lessee's interest in this Lease;
or (iv) the attachment, execution or other judicial seizure of substantially all
of Lessee's assets located at the Premises or of Lessee's interest in this
Lease, provided, however, in the event that any provisions of this Section
12.01(e) is contrary to any applicable law, such provision shall be of no force
or effect;
(f) The discovery by Lessor that any financial statement given to Lessor
by Lessee, or any guarantor of Lessee's obligations hereunder, was materially
false.
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(g) The occurrence of a material default and breach by Lessee under any
other Lease between Lessee and Lessor (or any affiliate of Lessor) for Premises
in Pacific Shores Center.
Section 12.02. Remedies. In the event of any such material default and
breach by Lessee, Lessor may at any time thereafter, and without limiting Lessor
in the exercise of any right or remedy which Lessor may have by reason of such
default and breach:
(a) Terminate Lessee's right to possession of the Premises by any lawful
means including by way of unlawful detainer (and without any further notice if a
notice in compliance with the unlawful detainer statutes and in compliance with
paragraphs (b), (c) and (d) of Section 12.01 above has already been given), in
which case this Lease shall terminate and Lessee shall immediately surrender
possession of the Premises to Lessor. In such event Lessor shall be entitled to
recover from Lessee all damages incurred by Lessor by reason of Lessee's default
including, but not limited to, (i) the cost of recovering possession of the
Premises including reasonable attorney's fees related thereto; (ii) the worth at
the time of the award of any unpaid rent that had been earned at the time of the
termination, to be computed by allowing interest at the Agreed Rate but in no
case greater than the maximum amount of interest permitted by law, (iii) the
worth at the time at the time of the award of the amount by which the unpaid
rent that would have been earned between the time of the termination and the
time of the award exceeds the amount of unpaid rent that Lessee proves could
reasonably have been avoided, to be computed by allowing interest at the Agreed
Rate but in no case greater than the maximum amount of interest permitted by
law, (iv) the worth at the time of the award of the amount by which the unpaid
rent for the balance of the Lease Term after the time of the award exceeds the
amount of unpaid rent that Lessee proves could reasonably have been avoided, to
be computed by discounting that amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of the award plus one percent (1%),
(v) any other amount necessary to compensate Lessor for all the detriment
proximately caused by Lessee's failure to perform obligations under this Lease,
including brokerage commissions and advertising expenses, expenses of remodeling
the Premises for a new tenant (whether for the same or a different use), and any
special concessions made to obtain a new tenant, and (vi) any other amounts, in
addition to or in lieu of those listed above, that may be permitted by
applicable law.
(b) Maintain Lessee's right to possession as provided in Civil Code
Section 1951.4 in which case this Lease shall continue in effect whether or not
Lessee shall have abandoned the Premises. In such event Lessor shall be entitled
to enforce all of Lessor's rights and remedies under this Lease, including the
right to recover the rent as it becomes due hereunder.
(c) Pursue any other remedy now or hereafter available to Lessor under the
laws or judicial decisions of the state of California. Unpaid amounts of rent
and other unpaid monetary obligations of Lessee under the terms of this Lease
shall bear interest from the date due at the Agreed Rate.
Section 12.03. Default by Lessor. Lessor shall not be in default under
this Lease unless Lessor fails to perform obligations required of Lessor within
a reasonable time, but in no event later than thirty (30) days after written
notice by Lessee to Lessor and to the holder of any first mortgage or deed of
trust covering the Premises whose name and address shall have theretofore
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been furnished to Lessee in writing, specifying that Lessor has failed to
perform such obligation; provided, however, that if the nature of Lessor's
obligation is such that more than thirty (30) days are required for performance
then Lessor shall not be in default if Lessor commences performance within such
thirty day period and thereafter diligently prosecutes the same to completion.
In the event Lessor does not commence performance within the thirty (30) day
period provided herein, Lessee may perform such obligation and will be
reimbursed for its expenses by Lessor together with interest thereon at the
Agreed Rate. Lessee waives any right to terminate this Lease or to vacate the
Premises on Lessor's default under this Lease. Lessee's sole remedy on Lessor's
default is an action for damages or injunctive or declaratory relief.
Notwithstanding the foregoing, nothing herein shall be deemed applicable in the
event of Lessor's delay in delivery of the Premises. In that situation, all
rights and remedies shall be determined under Section 3.01 above.
Section 12.04. Late Charges. Lessee hereby acknowledges that late payment
by Lessee to Lessor of rent and other sums due hereunder will cause Lessor to
incur costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges, and late charges which may be imposed on
Lessor by the terms of any mortgage or trust deed covering the Premises.
Accordingly, if any installment of rent or any other sum due from Lessee shall
not be received by Lessor or Lessor's designated agent within five (5) business
days after such amount is due and owing, Lessee shall pay to Lessor a late
charge equal to five percent (5%) of such overdue amount. The parties hereby
agree that such late charge represents a fair and reasonable estimate of the
costs Lessor will incur by reason of late payment by Lessee. Acceptance of such
late charge by Lessor shall in no event constitute a waiver of Lessee's default
with respect to such overdue amount, nor prevent Lessor from exercising any of
the other rights and remedies granted hereunder. In the event that a late charge
is payable hereunder, whether or not collected, for three (3) consecutive
installments of rent, then rent shall automatically become due and payable
quarterly in advance, rather than monthly, notwithstanding Section 4.01 or any
other provision of this Lease to the contrary. Lease provided that if no further
late payments (and no other default) occur for a continuous six (6) month
period, payment of Base Rent shall return to the original payment schedule.
ARTICLE XIII
CONDEMNATION OF PREMISES.
Section 13.01. Total Condemnation. If the entire Premises, whether by
exercise of governmental power or the sale or transfer by Lessor to any
condemnor under threat of condemnation or while proceedings for condemnation are
pending, at any time during the Lease Term, shall be taken by condemnation such
that there does not remain a portion suitable for occupation, this Lease shall
then terminate as of the date transfer of possession is required. Upon such
condemnation, all rent shall be paid up to the date transfer of possession is
required, and Lessee shall have no claim against Lessor or the award for the
value of the unexpired portion of this Lease Term.
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Section 13.02. Partial Condemnation. If any portion of the Premises is
taken by condemnation during the Lease Term, whether by exercise of governmental
power or the sale for transfer by Lessor to an condemnor under threat of
condemnation or while proceedings for condemnation are pending, this Lease shall
remain in full force and effect except that in the event a partial taking leaves
the Premises unfit for the conduct of the business of Lessee, then Lessee shall
have the right to terminate this Lease effective upon the date transfer of
possession is required. Moreover, Lessor shall have the right to terminate this
Lease effective on the date transfer of possession is required if more than
thirty-three percent (33%) of the total square footage of the Premises is taken
by condemnation. Lessee and Lessor may elect to exercise their respective rights
to terminate this Lease pursuant to this Section by serving written notice to
the other within thirty (30) days after receipt of notice of condemnation. All
rent shall be paid up to the date of termination, and Lessee shall have no claim
against Lessor for the value of any unexpired portion of the Lease Term. If this
Lease shall not be canceled, the rent after such partial taking shall be that
percentage of the adjusted base rent specified herein, equal to the percentage
which the square footage of the untaken part of the Premises, immediately after
the taking, bears to the square footage of the entire Premises immediately
before the taking. If Lessee's continued use of the Premises requires
alterations and repair by reason of a partial taking, all such alterations and
repair shall be made by Lessee at Lessee's expense. Lessee waives all rights it
may have under California Code of Civil Procedure Section 1265.130 or otherwise,
to terminate this Lease based on partial condemnation.
Section 13.03. Award to Lessee. In the event of any condemnation, whether
total or partial, Lessee shall have the right to claim and recover from the
condemning authority such compensation as may be separately awarded or
recoverable by Lessee for loss of its business fixtures, or equipment belonging
to Lessee immediately prior to the condemnation. The balance of any condemnation
award shall belong to Lessor (including, without limitation, any amount
attributable to any excess of the market value of the Premises for the remainder
of the Lease Term over the then present value of the rent payable for the
remainder of the Lease Term) and Lessee shall have no further right to recover
from Lessor or the condemning authority for any claims arising out of such
taking.
ARTICLE XIV
ENTRY BY LESSOR
Section 14.01. Entry by Lessor Permitted. Lessee shall permit Lessor and
its employees, agents and contractors to enter the Premises and all parts
thereof (i) upon twenty-four (24) hours notice (or without notice in an
emergency), including without limitation, the Building and all parts thereof at
all reasonable times for any of the following purposes: to inspect the Premises;
to maintain the Premises; to make such repairs to the Premises as Lessor is
obligated or may elect to make; to make repairs, alterations or additions to any
other portion of the Project and (ii) upon twenty-four (24) hours notice to show
the Premises and post no more than two "To Lease" signs which are customary in
size and location for similarly situated and sized buildings (without blocking
windows or access) for the purposes of reletting during the last nine (9) months
of the Lease Term (provided that Lessee has failed to exercise its option to
extend) or extended Lease Term to show the Premises as part of a prospective
sale by Lessor or to post
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notices of nonresponsibility. Lessor shall have such right of entry without any
rebate of rent to Lessee for any loss of occupancy or quiet enjoyment of the
Premises hereby occasioned.
ARTICLE XV
ESTOPPEL CERTIFICATE
Section 15.01. Estoppel Certificate.
(a) Lessee shall at any time upon not less than fifteen (15) days' prior
written notice from Lessor execute, acknowledge and deliver to Lessor a
statement in writing (i) certifying, if true, that this Lease is unmodified and
in full force and effect (or, if modified, stating the nature of such
modification and certifying, if true, 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, and (ii) acknowledging, if true, that there are not, to
Lessee's knowledge, any uncured defaults on the part of Lessor hereunder, or
specifying such defaults if any are claimed and (iii) certifying or
acknowledging such other matters as are requested by any prospective lender or
buyer which are reasonably related to the loan or sale transaction. Any such
statement may be conclusively relied upon by any prospective purchaser or
encumbrancer of the Premises.
(b) Lessee's failure to deliver such statement within such time shall be
conclusive upon Lessee (i) that this Lease is in full force and effect, without
modification except as may be represented by Lessor, (ii) that there are no
uncured defaults in Lessor's performance, and (iii) that not more than one
month's rent has been paid in advance.
ARTICLE XVI
LESSOR'S LIABILITY
Section 16.01. Limitations on Lessor's Liability. The term "Lessor" as
used herein shall mean only the owner or owners at the time in question of the
fee title of the Premises. In the event of any transfer of such title or
interest, Lessor herein named (and in case of any subsequent transfers then the
grantor) shall be relieved from and after the date of such transfer of all
liability as respects Lessor's obligations thereafter to be performed, provided
that any funds in the hands of Lessor or the then grantor at the time of such
transfer, in which Lessee has an interest, shall be delivered to the grantee.
The obligations contained in this Lease to be performed by Lessor shall, subject
as aforesaid, be binding on Lessor's successors and assigns, only during their
respective periods of ownership. For any breach of this Lease by Lessor, the
liability of Lessor (including all persons and entities that comprise Lessor,
and any successor Lessor) and any recourse by Lessee against Lessor shall be
limited to the interest of Lessor, and Lessor's successors in interest, in and
to the Premises. On behalf of itself and all persons claiming by, through, or
under Lessee, Lessee expressly waives and releases Lessor and each member, agent
and employee of Lessor from any personal liability for breach of this Lease.
ARTICLE XVII
GENERAL PROVISIONS
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Section 17.01. Severability. The invalidity of any provision of this Lease
as determined by a court of competent jurisdiction, shall in no way affect the
validity of any other provision hereof.
Section 17.02. Agreed Rate Interest on Past-Due Obligations. Except as
expressly herein provided, any amount due to either party not paid when due
shall bear interest at the Bank of America prime rate plus one percent (1%)
("Agreed Rate"). Payment of such interest shall not excuse or cure any default
by Lessee under this Lease. Despite any other provision of this Lease, the total
liability for interest payments shall not exceed the limits, if any, imposed by
the usury laws of the State of California. Any interest paid in excess of those
limits shall be refunded to the payor by application of the amount of excess
interest paid against any sums outstanding in any order that payee requires. If
the amount of excess interest paid exceeds the sums outstanding, the portion
exceeding those sums shall be refunded in cash to the payor by the payee. To
ascertain whether any interest payable exceeds the limits imposed, any
nonprincipal payment (including late charges) shall be considered to the extent
permitted by law to be an expense or a fee, premium, or penalty rather than
interest.
Section 17.03. Time of Essence. Time is of the essence in the performance
of all obligations under this Lease.
Section 17.04. Additional Rent. Any monetary obligations of Lessee to
Lessor under the terms of this Lease shall be deemed to be Additional Rent and
Lessor shall have all the rights and remedies for the nonpayment of same as it
would have for nonpayment of Base Rent, except that the one year requirement of
Code of Civil Procedure Section 1161(2) shall apply only to scheduled
installments of Base Rent and not to any Additional Rent. All references to
"rent" (except specific references to either Base Rent or Additional Rent) shall
mean Base Rent and Additional Rent.
Section 17.05. Incorporation of Prior Agreements, Amendments and Exhibits.
This Lease (including Exhibits A, B, C, D, E, F, G, H, I, J, K and L) contains
all agreements of the parties with respect to any matter mentioned herein. No
prior agreement or understanding pertaining to any such matter shall be
effective. This Lease may be modified in writing only, signed by the parties in
interest at the time of the modification. Except as otherwise stated in this
Lease, Lessee hereby acknowledges that neither the Lessor nor any employees or
agents of the Lessor has made any oral or written warranties or representations
to Lessee relative to the condition or use by Lessee of said Premises and Lessee
acknowledges that Lessee assumes all responsibility regarding the Occupational
Safety Health Act, the legal use and adaptability of the Premises and the
compliance thereof with all applicable laws and regulations in effect during the
Lease Term except as otherwise specifically stated in this Lease. Neither party
has been induced to enter into this Lease by, and neither party is relying on,
any representation or warranty outside those expressly set forth in this Lease.
Section 17.06. Notices.
(a) Written Notice. Any notice required or permitted to be given hereunder
shall be in writing and shall be given by a method described in paragraph (b)
below and shall be
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addressed to Lessee or to Lessor at the addresses noted below, next to the
signature of the respective parties, as the case may be. Either party may by
notice to the other specify a different address for notice purposes. A copy of
all notices required or permitted to be given to Lessor hereunder shall be
concurrently transmitted to such party or parties at such addresses as Lessor
may from time to time hereafter designate by notice to Lessee, but delay or
failure of delivery to such person shall not affect the validity of the delivery
to Lessor or Lessee.
(b) Methods of Delivery:
(i) When personally delivered to the recipient, notice is effective
on delivery. Delivery to the person apparently designated to receive deliveries
at the subject address is personally delivered if made during business hours
(e.g. receptionist).
(ii) When mailed by certified mail with return receipt requested,
notice is effective on receipt if delivery is confirmed by a return receipt.
(iii) When delivery by overnight delivery Federal
Express/Airborne/United Parcel Service/DHL WorldWide Express with charges
prepaid or charged to the sender's account, notice is effective on delivery if
delivery is confirmed by the delivery service.
(c) Refused, Unclaimed or Undeliverable Notices. Any correctly addressed
notice that is refused, unclaimed, or undeliverable because of an act or
omission of the party to be notified shall be considered to be effective as of
the first date that the notice was refused, unclaimed, or considered
undeliverable by the postal authorities, messenger, or overnight delivery
service.
Section 17.07. Waivers. No waiver of any provision hereof shall be deemed
a waiver of any other provision hereof or of any subsequent breach of the same
or any other provisions. Any consent to, or approval of, any act shall not be
deemed to render unnecessary the obtaining of consent to or approval of any
subsequent act. The acceptance of rent hereunder by Lessor shall not be a waiver
of any preceding breach by Lessee of any provision hereof, other than the
failure of Lessee to pay the particular rent so accepted, regardless of Lessor's
knowledge of such preceding breach at the time of acceptance of such rent.
Section 17.08. Recording. Either Lessor or Lessee shall, upon request of
the other, execute, acknowledge and deliver to the other a "short form"
memorandum of this Lease for recording purposes, provided that Lessee shall also
simultaneously execute in recordable form and delivering to Lessor a Quit Claim
Deed as to its leasehold and any other interest in the Premises and hereby
authorizes Lessor to date and record the same only upon the expiration or sooner
termination of this Lease.
Section 17.09. Surrender of Possession; Holding Over.
(a) At the expiration of the Lease, Lessee agrees to deliver up and
surrender to Lessor possession of the Premises and all improvements thereon
broom clean and, in as good order and
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condition as when possession was taken by Lessee, excepting only ordinary wear
and tear (wear and tear which could have been avoided by first class maintenance
practices and in accordance with industry standards shall not be deemed
"ordinary"). Upon expiration or sooner termination of this Lease, Lessor may
reenter the Premises and remove all persons and property therefrom. If Lessee
shall fail to remove any personal property which it is entitled or obligated to
remove from the Premises upon the expiration or sooner termination of this
Lease, for any cause whatsoever, Lessor, at its option, may remove the same and
store or dispose of them, and Lessee agrees to pay to Lessor on demand any and
all expenses incurred in such removal and in making the Premises free from all
dirt, litter, debris and obstruction, including all storage and insurance
charges. If the Premises are not surrendered at the end of the Lease Term,
Lessee shall indemnify Lessor against loss or liability resulting from delay by
Lessee in so surrendering the Premises, including, without limitation, actual
damages for lost rent and with respect to any claims of a successor occupant.
(b) If Lessee, with Lessor's prior written consent, remains in possession
of the Premises after expiration of the Lease Term and if Lessor and Lessee have
not executed an express written agreement for payment of rent during such
consented to holdover, then such occupancy shall be a tenancy from month to
month at a monthly Base Rent equivalent to one hundred twenty-five percent
(125%) (for the first month and 150% thereafter) of the monthly rental in effect
immediately prior to such expiration, such payments to be made as herein
provided for Base Rent. In the event of such holding over, all of the terms of
this Lease, including the payment of Additional Rent and all charges owing
hereunder other than rent shall remain in force and effect on said month to
month basis.
Section 17.10. Cumulative Remedies. No remedy or election hereunder by
Lessor shall be deemed exclusive but shall, wherever possible, be cumulative
with all other remedies at law or in equity, provided that notice and cure
periods set forth in Article XII are intended to extend and modify statutory
notice provisions to the extent expressly stated in Section 12.01.
Section 17.11. Covenants and Conditions. Each provision of this Lease to
be observed or performed by Lessee shall be deemed both a covenant and a
condition.
Section 17.12. Binding Effect; Choice of Law. Subject to any provisions
hereof restricting assignment or subletting by Lessee and subject to the
provisions of Article XVI, this Lease shall bind the parties, their personal
representatives, successors and assigns. This Lease shall be governed by the
laws of the State of California and any legal or equitable action or proceeding
brought with respect to the Lease or the Premises shall be brought in Santa
Clara County, California.
Section 17.13. Lease to be Subordinate. Lessee agrees that this Lease is
and shall be, at all times, subject and subordinate to the lien of any mortgage
or other encumbrances which Lessor may create against the Premises including all
renewals, replacements and extensions thereof provided, however, that regardless
of any default under any such mortgage or encumbrance or any sale of the
Premises under such mortgage, so long as Lessee timely performs all covenants
and conditions of this Lease and continues to make all timely payments
hereunder, this Lease and Lessee's possession and rights hereunder shall not be
disturbed by the
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mortgagee or anyone claiming under or through such mortgagee. Lessee shall
execute any documents subordinating this Lease within ten (10) days after
delivery of same by Lessor so long as the Lender agrees therein that this Lease
will not be terminated if Lessee is not in default following a foreclosure,
including, without limitation, any Subordination Non-Distribution and Attornment
Agreement ("SNDA") which is substantially in the form attached hereto as Exhibit
"F."
Section 17.14. Attorneys' Fees. If either party herein brings an action to
enforce the terms hereof or to declare rights hereunder, the prevailing party in
any such action, on trial or appeal, shall be entitled to recover its reasonable
attorney's fees, expert witness fees and costs as fixed by the Court.
Section 17.15. Signs. Lessee shall not place any sign upon the exterior of
the Building without Lessor's prior written consent, which consent shall not be
unreasonably withheld and subject to approval by the City of Redwood. Lessee, at
its sole cost and expense, after obtaining Lessor's prior written consent, shall
install, maintain and remove prior to expiration of this Lease (or within ten
(10) days after any earlier termination of this Lease) all signage in full
compliance with (i) all applicable law, statutes, ordinances and regulations and
(ii) all provisions of this Lease concerning alterations.
Section 17.16. Merger. The voluntary or other surrender of this Lease by
Lessee, or a mutual cancellation thereof, or a termination by Lessor, shall not
work a merger, and shall, at the option of Lessor, terminate all or any existing
subtenancies or may, at the option of Lessor, operate as an assignment to Lessor
of any or all of such subtenancies.
Section 17.17. Guarantor. [Intentionally Omitted]
Section 17.18. Quiet Possession. Upon Lessee timely paying the rent for
the Premises and timely observing and performing all of the covenants,
conditions and provisions on Lessee's part to be observed and performed
hereunder, Lessee shall have quiet possession of the Premises for the entire
Lease Term, subject to all of the provisions of this Lease.
Section 17.19. Easements. Lessor reserves to itself the right, from time
to time, to grant such easements, rights and dedications that Lessor deems
necessary or desirable, and to cause the recordation of Parcel Maps and
conditions, covenants and restrictions, so long as such easements, rights,
dedications, Maps and conditions, covenants and restrictions do not unreasonably
interfere with the use of the Premises by Lessee. Lessee shall sign any of the
aforementioned or other documents, and take such other actions, which are
reasonably necessary or appropriate to accomplish such granting recordation and
subordination of the Lease to same, upon request of Lessor, and failure to do so
within ten (10) business days of a written request to do so shall constitute a
material breach of this Lease.
Section 17.20. Authority. Each individual executing this Lease on behalf
of a corporation, limited liability company or partnership represents and
warrants that he or she is duly authorized to execute and deliver this Lease on
behalf of such entity in accordance with a
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duly adopted resolution of the governing group of the entity empowered to grant
such authority, and that this Lease is binding upon said entity in accordance
with its terms.
Section 17.21. Force Majeure Delays. In any case where either party hereto
is required to do any act (other than the payment of money), delays caused by or
resulting from Acts of God or Nature, war, civil commotion, fire, flood or other
casualty, labor difficulties, shortages of labor or materials or equipment,
government regulations, delay by government or regulatory agencies with respect
to approval or permit process, unusually severe weather, or other causes beyond
such party's reasonable control the time during which act shall be completed,
shall be deemed to be extended by the period of such delay, whether such time be
designated by a fixed date, a fixed time or "a reasonable time."
Section 17.22. Hazardous Materials.
(a) Definition of Hazardous Materials and Environmental Laws. "Hazardous
Materials" means any (a) substance, product, waste or other i material of any
nature whatsoever which is or becomes listed regulated or addressed pursuant to
the Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. sections 9601, et seq. ("CERCLA"); the Hazardous Materials Transportation
Act ("HMTA") 49 U.S.C. section 1801, et seq., the Resource Conservation and
Recovery Act, 42 U.S.C. section 6901, et seq. ("RCRA"); the Toxic Substances
Control Act, 15 U.S.C. sections 2601, et seq. ("TSCA"); the Clean Water Act, 33
U.S.C. sections 1251, et seq.; the California Hazardous Waste Control Act,
Health and Safety Code sections 25100, et seq.; the California Hazardous
Substances Account Act, Health and Safety Code sections 26300, et seq.; the
California Safe Drinking Water and Toxic Enforcement Act, Health and Safety Code
sections 25249.5, et seq.; California Health and Safety Code sections 25280, et
seq.; (Underground Storage of Hazardous Substances); the California Hazardous
Waste Management Act, Health and Safety Code sections 25170.1, et seq.;
California Health and Safety Code sections 25501. et seq. (Hazardous Materials
Response Plans and Inventory); or the Porter-Cologne Water Quality Control Act,
California Water Code sections 13000, et seq., all as amended, or any other
federal, state or local statute, law, ordinance, resolution, code, rule,
regulation, order or decree regulating, relating to or imposing liability
(including, but not limited to, response, removal and remediation costs) or
standards of conduct or performance concerning any hazardous, toxic or dangerous
waste, substance or material, as now or at any time hereafter may be in effect
(collectively, "Environmental Laws"); (b) any substance, product, waste or other
material of any nature whatsoever whose presence in and of itself may give rise
to liability under any of the above statutes or under any statutory or common
law theory based on negligence, trespass, intentional tort, nuisance, strict or
absolute liability or under any reported decisions of a state or federal court,
(c) petroleum or crude oil, including but not limited to petroleum and petroleum
products contained within regularly operated motor vehicles and (d) asbestos.
(b) Lessor's Representations and Disclosures. Lessor represents that it
has provided Lessee with a description of the Hazardous Materials on or beneath
the Property as of the date hereof, attached hereto as Exhibit I and
incorporated herein by reference. Lessee acknowledges that in providing the
attached Exhibit I, Lessor has satisfied its obligations of disclosure pursuant
to California Health & Safety Code Section 25359.7 which requires:
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"Any owner of nonresidential real property who knows, or has
reasonable cause to believe, that any release of hazardous substances has come
to be located on or beneath that real property shall, prior to the sale, lease
or rental of the real property by that owner, give written notice of that
condition to the buyer, lessee or renter of the real property."
(c) Use of Hazardous Materials. Lessee shall not cause or permit any
Hazardous Materials to be brought upon, kept or used in, on or about the Project
by Lessee, its agents, employees, contractors, licensee, guests, visitors or
invitees without the prior written consent of Lessor. Lessor shall not
unreasonably withhold such consent so long as Lessee demonstrates to Lessor's
reasonable satisfaction that such Hazardous Materials are necessary or useful to
Lessee's business and will be used, kept and stored in a manner that complies
with all applicable Environmental Laws. Lessee shall, at all times, use, keep,
store, handle, transport, treat or dispose all such Hazardous Materials in or
about the Property in compliance with all applicable Environmental Laws. Lessee
shall remove all Hazardous Materials used or brought onto the Premises during
the Lease Term from the Project prior to the expiration or earlier termination
of the Lease.
(d) Lessee's Environmental Indemnity. Lessee agrees to indemnify and hold
Lessor harmless from any liabilities, losses, claims, damages, penalties, fines,
attorney fees, expert fees, court costs, remediation costs, investigation costs,
or other expenses resulting from or arising out of the use, storage, treatment,
transportation, release, presence, generation, or disposal of Hazardous
Materials on, from or about the Project, and/or subsurface or ground water,
after the Commencement Date from an act or omission of Lessee (or Lessee's
successor), its agents, employees, invitees, vendors, contractors, guests or
visitors.
(e) Lessee's Obligation to Promptly Remediate. If the presence of
Hazardous Materials on the Premises after the Commencement Date results from an
act or omission of Lessee (or Lessee's successors), its agents, employees,
invitees, vendors, contractors, guests, or visitors results in contamination or
deterioration of the Premises or Project or any water or soil beneath the
Premises or Project, Lessee shall promptly take all action necessary or
appropriate to investigate and remedy that contamination, at its sole cost and
expense, provided that Lessor's consent to such action shall first be obtained.
Lessor's consent shall not be unreasonably withheld. In no event shall Lessee be
responsible for the remediation of Hazardous Materials identified in Exhibit I
at the Project prior to Commencement Date.
(f) Notification. Lessor and Lessee each agree to promptly notify the
other of any communication received from any governmental entity concerning
Hazardous Materials or the violation of Environmental Laws that relate to the
Property.
Section 17.23. Modifications Required by Lessor's Lender. If any lender of
Lessor requires a modification of this Lease that will not increase Lessee's
cost or expense or materially and adversely change Lessee's rights and
obligations, this Lease shall be so modified and Lessee shall execute whatever
documents are required by such lender and deliver them to Lessor within ten (10)
days after the request.
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Section 17.24. Brokers. Lessor and Lessee each represents to the other
that it has had no dealings with any real estate broker or agent in connection
with the negotiation of this Lease, except for the real estate brokers or agents
identified on the signature page hereof ("Brokers") and that they know of no
other real estate broker or agent who is entitled to a commission or finder's
fee in connection with this Lease. Each party shall indemnify, protect, defend,
and hold harmless the other party against all claims, demands, losses,
liabilities, lawsuits, judgments, and costs and expenses (including reasonable
attorney fees) for any leasing commission, finder's fee, or equivalent
compensation alleged to be owning on account of the indemnifying party's
dealings with any real estate broker or agent other than the Brokers. The terms
of this Section 17.24 shall survive the expiration or earlier termination of the
Lease Term.
Section 17.25. [Intentionally Deleted]
Section 17.26. Acknowledgment of Notices. Lessor has provided and Lessee
hereby acknowledges receipt of the Notices attached as Exhibits J and K hereto,
concerning the presence of certain uses and operations of neighboring parcels of
land.
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Section 17.27. List of Exhibits.
Ref. Page
---------
EXHIBIT A: Real Property Legal Description, Site Plan, and Building Elevations
EXHIBIT B: Plans and Specifications for Shell Building
EXHIBIT C: Work Letter Agreement for Tenant Improvements and Interior
Specification Standards
EXHIBIT D: Cost Responsibilities of Lessor and Lessee
EXHIBIT E: Memorandum of Commencement of Lease Term and Schedule of Base Rent
EXHIBIT F: SNDA
EXHIBIT G: Signage Exhibit
EXHIBIT H: Guaranty of Lease [Intentionally Omitted]
EXHIBIT I: Hazardous Materials Disclosure
EXHIBIT J: Notice to Tenants
EXHIBIT K: Notice to Tenants
EXHIBIT L: Rules and Regulations
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LESSOR AND LESSEE EACH HAS CAREFULLY READ AND HAS REVIEWED THIS LEASE AND BEEN
ADVISED BY LEGAL COUNSEL OF ITS OWN CHOOSING AS TO EACH TERM AND PROVISION
CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOWS ITS INFORMED AND
VOLUNTARY CONSENT THERETO. EACH PARTY HEREBY AGREE THAT, AT THE TIME THIS LEASE
IS EXECUTED, THE TERMS AND CONDITIONS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.
Executed at San Jose, California, as of the reference date.
LESSOR: ADDRESS:
c/o Jay Paul Company
353 Sacramento Street, Suite 1740
- ---------------------------------------, San Francisco, California 94111
- ---------------------------------------
By:
---------------------------------
Jay Paul, President
With a copy to:
Thomas G. Perkins, Esq.
99 Almaden Blvd., 8th Floor
San Jose, CA 95113
Telephone: 408-993-9911
Facsimile: 408-286-3312
LESSEE: ADDRESS:
INFORMATICA CORP.
a ________ corporation
--------------------------------------
--------------------------------------
By: (Before Commencement Date)
---------------------------------
(Type or print name) Pacific Shores Center
Its: Building 1
--------------------------------- Redwood City, CA
(After Commencement Date)
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BROKER EXECUTION
By signing below, the indicated real estate broker or agent is not being
made a party hereto, but is signifying its agreement with the provisions hereof
concerning brokerage.
LESSOR'S BROKER: ADDRESS:
Cornish & Carey Commercial 2804 Mission College Blvd., Suite 120
Santa Clara, California 95054
By:
--------------------------------
--------------------------------
(Type or print name)
Its: Executive Vice President
LESSEE'S BROKER: ADDRESS:
BT Commercial 2445 Faber Place, Suite 250
Palo Alto, CA 94303-4226
By:
--------------------------------
--------------------------------
(Type or print name)
Its:
--------------------------------
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