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Exhibit 10.43
1399 MOFFETT PARK DRIVE, SUNNYVALE, CA
STANDARD NNN LEASE -- MULTI-TENANT
W I T N E S S E T H
This lease ("LEASE") is entered into by and between Limar Realty Corp. #8, a
California corporation ("LANDLORD") and Infoseek Corporation, a California
corporation ("TENANT"). For and in consideration of the payment of rents and the
performance of the covenants herein set forth by Tenant, Landlord does lease to
Tenant and Tenant accepts the Premises described below subject to the agreements
herein contained.
1. BASIC LEASE TERMS
a. DATE OF LEASE: March 4, 1997
TENANT: Infoseek Corporation, a California corporation
Address (of the Premises): 1399 Moffett Park Drive, Sunnyvale, CA 94086
Address (for Notices): (Please provide if other than the Premises)
b. LANDLORD: Limar Realty Corp. #8
Address (for Notices): 1730 El Camino Real, Suite 400
San Mateo, CA 94402
c. TENANT'S USE OF PREMISES: Office and related research/development
activities.
d. PREMISES AREA: 1) Initial Premises: 47,888 Rentable Square
Feet consisting of Building A and the First
Floor of Building B.
2) Must Take Premises: 13,500 Rentable Square
Feet consisting of the Second Floor of
Building B.
e. BUILDING: 1399 Moffett Park Drive, Sunnyvale, CA 94086
f. INSURING PARTY: Landlord is the "INSURING PARTY" unless
otherwise stated herein.
g. TERM or INITIAL TERM (inclusive):Commencement Date: Approximately April
16, 1997 (See
Paragraph 29.)
Expiration Date: October 15, 2002
("EXPIRATION DATE")
Number of Months: Approximately Sixty-
six (66) Months
h. TENANT'S SHARE OF BUILDING: 61.77% (61,388 sq. ft./99,384 sq. ft.)
i. TENANT'S NUMBER OF PARKING SPACES: 4.2 Spaces per 1,000 Rentable Square
Feet of Leased area.
j. INITIAL BASE RENT: Initial Premises: $69,437.60 per month.
Must Take Premises: $19,575.00 per month.
k. BASE RENT ADJUSTMENT:
(a) COST OF LIVING. Intentionally deleted.
(b) STEP INCREASE. The step adjustment provisions of Paragraph 4.b.
apply for the periods shown below:
MONTHLY BASE RENT AMOUNT
PERIODS (INCLUSIVE) (61,388 RENTABLE SQUARE FEET)
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Month 13 - Month 24 $ 92,082.00
Month 25 - Month 36 $ 95,151.40
Month 37 - Month 48 $ 98,220.80
Month 49 - Month 60 $101,290.20
Month 61 - Expiration Date $104,359.60
l. TOTAL TERM BASE RENT: $6,217,791.60. (Assumes Total term is exactly 66
Months and the Must Take Premises commences with seventh Lease month.)
m. PREPAID BASE RENT: $69,437.60 in payment of the first months
rent.
n. SECURITY DEPOSIT: $445,063.00
o. BROKER(S): BT Commercial Real Estate (Landlord) & Bishop
Hawk, Inc. (Tenant)
p. EXHIBITS: Exhibits lettered "A" through "E" are attached hereto and made
a part hereof.
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2. PREMISES, PARKING AND COMMON AREAS
a. PREMISES. The Premises as described in Paragraph 1. and
Exhibit A, are a portion of a building, herein sometimes
referred to as the "BUILDING" identified in Paragraph 1. The
Premises, the Building, the Common Areas, the land upon which
the same are located, along with all other buildings and
improvements thereon or thereunder, are herein collectively
referred to as the "PROPERTY" as described in Paragraph 1. and
Exhibit B. Landlord hereby leases to Tenant and Tenant leases
from Landlord for the Term (as defined below), at the rental,
and upon all of the conditions set forth herein, the real
property referred to in the Basic Lease Terms, Paragraph 1. as
the "PREMISES", including rights to the Common Areas as
hereinafter specified. Subject to any additional work Landlord
has agreed herein to do, Tenant hereby accepts the Premises in
their condition existing as of the date of the execution
hereof, subject to all applicable zoning, municipal, county
and state laws, ordinances and regulations governing and
regulating the use of the Premises, and accepts this Lease
subject thereto and to all matters disclosed thereby and by
any exhibits attached hereto. Tenant acknowledges that neither
Landlord nor Landlord's Broker has made any representation or
warranty as to the suitability of the Premises for the conduct
of Tenant's business. Tenant acknowledges that prior to the
Commencement Date the square footage specified for the
Premises in Paragraph 1. may be revised as reasonably
determined by Landlord pursuant to the final approval of the
Preliminary Plan, in which case all amounts of Base Rent and
Security Deposit shall be adjusted accordingly. Tenant will
not thereafter challenge such determination and agreement. The
rental payable by Tenant pursuant to this Lease is not subject
to revision in the event of any discrepancy in the rentable
square footage for the Premises. (See Paragraph 29.)
b. VEHICLE PARKING. So long as Tenant is not in default, and
subject to the Rules and Regulations attached hereto as
Exhibit C, and as established by Landlord from time to time,
Tenant shall be entitled to use the number or parking spaces
set forth in Paragraph 1 on a non-reserved basis. If Tenant
commits, permits or allows any of the prohibited activities
described in the Lease or the Rules and Regulations then in
effect, then Landlord shall have the right, without notice, in
addition to such other rights and remedies that it may have,
to remove or tow away the vehicle involved and charge the cost
to Tenant, which cost shall be immediately payable upon demand
by Landlord.
c. COMMON AREAS -- DEFINITION. The term "COMMON AREAS" is defined
as all areas and facilities outside the Premises and within
the exterior boundary line of the Property that are provided
and designated by the Landlord from time to time for the
general non-exclusive use of Landlord, Tenant and of other
tenants of the Property and their respective employees,
suppliers, shippers, customers, and invitees, including but
not limited to common entrances, lobbies, corridors, stairways
and stairwells, public restrooms, elevators, parking areas to
the extent not otherwise prohibited by this Lease, loading and
unloading areas, trash areas, roadways, sidewalks, walkways,
parkways, ramps, driveways, landscaped areas and decorative
walls.
d. COMMON AREAS -- RULES AND REGULATIONS. Tenant agrees to abide
by and conform to the Rules and Regulations attached hereto as
Exhibit C with respect to the Property and Common Areas, and
to cause its employees, suppliers, shippers, customers, and
invitees to so abide and conform. Landlord or such other
person(s) as Landlord may appoint shall have the exclusive
control and management of the Common Areas and shall have the
right, from time to time, to modify, amend and enforce said
rules and regulations. Landlord shall not be responsible to
Tenant for the non-compliance with said rules and regulations
by other tenants, their agents, employees and invitees.
e. BUILDING AND COMMON AREAS -- CHANGES. Landlord shall have the
right, in Landlord's sole discretion, from time to time:
(1) To make changes to the Building interior and exterior
and Common Areas, including, without limitation,
changes in the location, size, shape, number, and
appearance thereof, including but not limited to the
lobbies, windows, stairways, air shafts, elevators,
restrooms, driveways, entrances, parking spaces,
parking areas, loading and unloading areas, ingress,
egress, direction of traffic, decorative walls,
landscaped areas and walkways;
(2) To close temporarily any of the Common Areas for
maintenance purposes so long as reasonable access to
the Premises remains available;
(3) To designate other land and improvements outside the
boundaries of the Property to be a part of the Common
Areas, provided that such other land and improvements
have a reasonable and functional relationship to the
Property;
(4) To add improvements to the Common Areas;
(5) To use the Common Areas while engaged in making
additional improvements, repairs or alterations to
the Property or any portion thereof; and
(6) To do and perform such other acts and make such other
changes in, to or with respect to the Common Areas
and Property as Landlord may, in the exercise of
sound business judgment deem to be appropriate.
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f. ACCEPTANCE. Landlord represents that it is the fee simple
owner of the Premises and has full right and authority to make
this Lease. Landlord hereby leases the Premises to Tenant and
Tenant hereby accepts the same from Landlord, in accordance
with the provisions of this Lease. Landlord covenants that
Tenant shall have peaceful and quiet enjoyment of the Premises
during the Term (as defined below) of this Lease.
3. TERM. The term ("TERM") of this Lease is for the period that commences
at 12:01 a.m. on the Commencement Date and expires at 11:59 p.m. on the
Expiration Date. If Landlord, for any reason, cannot deliver possession
of the Premises to Tenant on or before the Commencement Date, this Lease
shall not be void or voidable, nor shall Landlord be liable to Tenant for
any loss or damage resulting from such delay. In that event, however,
there shall be an abatement of Base Rent (as defined below) covering the
period between the Commencement Date and the date when Landlord delivers
possession to Tenant, all other terms and conditions of this Lease shall
remain in full force and effect, provided, however, that if Landlord
cannot deliver possession of the Premises to Tenant, this Lease shall be
void. If a delay in possession is caused by Tenant's failure to perform
any obligation in accordance with this Lease, the Term shall commence as
of the Commencement Date, and there shall be no reduction of Base Rent
between the Commencement Date and the time Tenant takes possession. (See
Paragraph 29.)
4. RENT
a. BASE RENT. Tenant shall pay Landlord in lawful money of the
United States, without notice, demand, offset or deduction,
rent in the amount(s) set forth in Paragraph 1. commencing
upon the Commencement Date set forth in Paragraph 3. payable
in advance on the first day of each and every calendar month
("BASE RENT") provided, however, the first month's Base Rent
is due and payable upon execution of this Lease. Unless
otherwise specified in writing by Landlord, all installments
of Base Rent shall be payable at Limar Realty Corp. #8,
Department #44292, P.O. Box 44000, San Francisco, California
94144-4294. Base Rent for any partial month at the beginning
or end of this Lease will be prorated in accordance with the
number of days in the subject month.
For purposes of Section 467 of the Internal Revenue Code, the
parties to this Lease hereby agree to allocate the stated Base
Rent provided herein to the periods which correspond to the
actual Base Rent payments as provided under the terms and
conditions of this Agreement.
b. STEP INCREASE. The Base Rent shall be increased periodically
to the amounts and at the times set forth in Paragraph 1.
based upon the actual Commencement Date of the Lease. For
example, if the actual Commencement Date is April 12, 1997,
then the $92,082.00 rental amount will be effective April 12,
1998.
c. RENT WITHOUT OFFSET AND LATE CHARGE. All Rent shall be paid
without prior demand or notice and without any deduction of
offset whatsoever. All Rent shall be paid in lawful currency
of the United States of America. Tenant acknowledges that late
payment by Tenant to Landlord of any Rent will cause Landlord
to incur costs not contemplated by this Lease, the exact
amount of such cost being extremely difficult and
impracticable to ascertain. Such costs include, without
limitation, processing and accounting charges and late charges
that may be imposed on Landlord by the terms of any
encumbrance or note secured by the Premises. Therefor, if any
Rent is not received by Landlord within five (5) days of its
due date, Tenant shall pay to Landlord a late charge equal to
ten percent (10%)of such overdue payment. Landlord and Tenant
hereby agree that such late charge represents a fair and
reasonable estimate of the costs that Landlord will incur by
reason of any such late payment and that the late charge is in
addition to any and all remedies available to the Landlord and
that the assessment and/or collection of the late charge shall
not be deemed a waiver of any other default. Additionally, all
such delinquent Rent or other sums, plus this late charge,
shall bear interest from the due date thereof at the lesser of
ten percent (10%) per annum or the maximum legal interest rate
permitted by law. Any payments of any kind returned for
insufficient funds will be subject to an additional handling
charge of $25.00, and thereafter, Landlord may require Tenant
to pay all future payments of Rent or other sums due by
cashier's check.
d. RENT. The term "RENT" as used in this Lease shall refer to
Base Rent, prepaid rent, Real Property Taxes, Operating
Expenses, repairs and maintenance costs, insurance, utilities,
late charges and other similar charges payable by Tenant
pursuant to this Lease either directly to Landlord or
otherwise.
5. SECURITY DEPOSIT. Upon execution of this Lease, Tenant shall deposit a
security deposit ("SECURITY DEPOSIT") in the amount set forth in
Paragraph 1. with Landlord. If Tenant is in default, Landlord can use the
Security Deposit or any portion of it to cure the default or to
compensate Landlord for any damages sustained by Landlord resulting from
Tenant's default. Upon demand, Tenant shall immediately pay to Landlord a
sum equal to the portion of the Security Deposit expended or applied by
Landlord to restore the Security Deposit to its full amount including any
interest which would have been earned on the portion of the Security
Deposit expended or applied by the Landlord, from the date of such
expense or application. In no event will Tenant have the right to apply
any part of the Security Deposit to any Rent due under this Lease. If
Tenant is not in default at the expiration or termination of this Lease,
Landlord shall return the Security Deposit to Tenant. Landlord's
obligations with respect to the Security Deposit are those of a debtor
and not a trustee, and Landlord can commingle the Security Deposit with
Landlord's general funds. Landlord shall not be required to pay Tenant
interest on the Security Deposit. Landlord shall be entitled to
immediately endorse and cash Tenant's Security Deposit; however, such
endorsement and cashing shall not constitute Landlord's acceptance of
this Lease. In the event Landlord does not accept this Lease, Landlord
shall return said Security Deposit. Subject to the provisions of
Paragraph 30. below, each time the Base Rent is increased, Tenant shall
deposit additional funds with Landlord sufficient to increase the
Security Deposit to an amount which bears the same relationship to the
Base Rent as the initial Security Deposit bore to the initial Base Rent.
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6. USE OF PREMISES
a. TENANT'S USE. Tenant shall use the Premises solely for the
purposes stated in Paragraph 1. and for no other purposes
without obtaining the prior written consent of Landlord.
Tenant acknowledges that neither Landlord nor any agent of
Landlord has made any representation or warranty with respect
to the Premises or with respect to the suitability of the
Premises to the conduct of Tenant's business, nor has Landlord
agreed to undertake any modification, alteration or
improvement to the Premises, except as provided in writing in
this Lease. Tenant acknowledges that Landlord may from time to
time, at its sole discretion, but with reasonable prior notice
to Tenant, make such modifications, alterations, deletions or
improvements to the Premises as Landlord may reasonably deem
necessary or desirable, without compensation or notice to
Tenant. Tenant shall promptly comply with all laws, statutes,
ordinances, orders and governmental regulations affecting the
Premises. Tenant shall not do or permit anything to be done in
or about the Premises or bring or keep anything in the
Premises that will in any way increase the premiums paid by
Landlord on its insurance related to the Premises. Tenant will
not perform any act or carry on any practices that may injure
the Premises. Tenant shall not use the Premises for sleeping,
washing clothes, cooking or the preparation, manufacture or
mixing of anything that emits any objectionable odor, noises,
vibrations or lights onto such other tenants. If sound
insulation is required to muffle noise produced by Tenant on
the Premises, Tenant at its own cost shall provide all
necessary insulation. Tenant shall not do anything on the
Premises which will overload any existing parking or service
to the Premises. Pets and/or animals of any type shall not be
kept on or about the Premises.
b. CC&R's. Tenant agrees that this Lease is subject and
subordinate to the Covenants, Conditions and Restrictions for
the Moffett Industrial Park No. 11, recorded May 5, 1980, as
Recorders' Serial No. 6721997 in the Official Records of Santa
Clara County, California, a copy of which is attached hereto
as Exhibit D, as they may be amended from time to time
("CC&R's"), and further agrees that the CC&R's are an integral
part of this Lease. Throughout the Term or any extension
thereof, notwithstanding any other provision hereof, Tenant
shall faithfully and timely assume and perform all obligations
of Landlord and/or Tenant under the CC&R's and any
modifications or amendments thereto, including the payment of
any periodic or special dues or assessments against the
Premises. Such dues and assessments shall be included within
the definition of Operating Expenses pursuant to Paragraph
13.b.11), and Tenant shall pay such amounts as further set
forth in Paragraph 13. Tenant shall hold Landlord, its
subsidiaries, directors, officers, agents and employees
harmless and indemnify Landlord, its subsidiaries, directors,
officers, agents and employees against any loss, expense and
damage, including attorneys' fees and costs, arising out of
the failure of Tenant to perform or comply with the CC&R's.
c. RULES AND REGULATIONS. Tenant shall comply with and use the
Premises in accordance with the Rules and Regulations attached
hereto as Exhibit C and to any reasonable modifications to
such Rules and Regulations as Landlord may adopt from time to
time.
7. EMISSIONS; STORAGE, USE AND DISPOSAL OF WASTE
a. EMISSIONS. Tenant shall not:
1) Permit any vehicle on the Premises or in the Commons
Areas to emit exhaust which is in violation of any
governmental law, rule, regulation or requirement;
2) Discharge, emit or permit to be discharged or
emitted, any liquid, solid or gaseous matter, or any
combination thereof, into the atmosphere or on, into
or under the Premises, any building or other
improvements of which the Premises are a part, or the
ground or any body of water which matter, as
reasonably determined by Landlord or any governmental
entity, does or may pollute or contaminate the same,
or is, or may become, radioactive or does, or may,
adversely affect the (a) health or safety of persons,
wherever located, whether on the Premises or anywhere
else, (b) condition, use or enjoyment of the Premises
or any other real or personal property, whether on
the Premises or anywhere else, or (c) Premises or any
of the improvements thereto including buildings,
foundations, pipes, utility lines, landscaping or
parking areas;
3) Produce, or permit to be produced, any intense glare,
light or heat;
4) Create, or permit to be created, any sound pressure
level which will interfere with the quiet enjoyment
of any real property outside the Premises, or which
will create a nuisance or violate any governmental
law, rule, regulation or requirement;
5) Create, or permit to be created, any vibration that
is discernible outside the Premises; or
6) Transmit, receive or permit to be transmitted or
received, any electromagnetic, microwave or other
radiation which is or may be harmful or hazardous to
any person or property in, or about the Premises, or
anywhere else.
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b. STORAGE AND USE.
1) STORAGE. Subject to the uses permitted and prohibited
to Tenant under this Lease, Tenant shall store in
appropriate leak proof containers all solid, liquid
or gaseous matter, or any combination thereof, which
matter, if discharged or emitted into the atmosphere,
the ground or any body of water, does or may (a)
pollute or contaminate the same, or (b) adversely
affect the (i) health or safety of persons, whether
on the Premises or anywhere else, (ii) condition, use
or enjoyment of the Premises or any real or personal
property, whether on the Premises or anywhere else,
or (iii) Premises.
2) USE. In addition, without Landlord's prior written
consent, Tenant shall not use, store or permit to
remain on or about the Premises any solid, liquid or
gaseous matter which is, or may become radioactive.
If Landlord does give its consent, Tenant shall store
the materials in such a manner that no radioactivity
will be detectable outside a designated storage area
and Tenant shall use the materials in such a manner
that (a) no real or personal property outside the
designated storage area shall become contaminated
thereby and (b) there are and shall be no adverse
effects on the (i) health or safety of persons,
whether on the Premises or anywhere else, (ii)
condition, use or enjoyment of the Premises or any
real or personal property thereon or therein, or
(iii) Premises or any of the improvements thereto or
thereon.
3) HAZARDOUS MATERIALS. Subject to the uses permitted
and prohibited to Tenant under this Lease, Tenant
shall store, use, employ, transport and otherwise
deal with all Hazardous Materials (as defined below)
employed on or about the Premises in accordance with
all federal, state, or local law, ordinances, rules
or regulations applicable to Hazardous Materials in
connection with or respect to the Premises.
c. DISPOSAL OF WASTE.
1) REFUSE DISPOSAL. Tenant shall not keep any trash,
garbage, waste or other refuse on the Premises except
in sanitary containers and shall regularly and
frequently remove same from the Premises. Tenant
shall keep all incinerators, containers or other
equipment used for storage or disposal of such
materials in a clean and sanitary condition.
2) SEWAGE DISPOSAL. Tenant shall properly dispose of all
sanitary sewage and shall not use the sewage disposal
system (a) for the disposal of anything except
sanitary sewage or (b) amounts in excess of the
lesser of: (i) that reasonably contemplated by the
uses permitted under this Lease or (ii) that
permitted by any governmental entity. Landlord shall
cause the sewage disposal system to be free of all
obstructions as of the Commencement Date. During the
Term hereof, Tenant shall keep the sewage disposal
system free of all obstructions and in good operating
condition.
3) DISPOSAL OF OTHER WASTE. Tenant shall properly
dispose of all other waste or other matter delivered
to, stored upon, located upon or within, used on, or
removed from, the Premises in such a manner that it
does not, and will not, adversely affect the (a)
health or safety of persons, wherever located,
whether on the Premises or elsewhere, (b) condition,
use or enjoyment of the Premises or any other real or
personal property, wherever located, whether on the
Premises or anywhere else, or (c) Premises or any of
the improvements thereto or thereon including
buildings, foundations, pipes, utility lines,
landscaping or parking areas.
d. INFORMATION. Tenant shall provide Landlord with any and all
information regarding Hazardous Materials in the Premises,
including copies of all filings and reports to governmental
entities at the time they are originated, and any other
information requested by Landlord. In the event of any
accident, spill or other incident involving Hazardous
Materials, Tenant shall immediately report the same to
Landlord and supply Landlord with all information and reports
with respect to the same. All information described herein
shall be provided to Landlord regardless of any claim by
Tenant that it is confidential or privileged.
e. COMPLIANCE WITH LAW. Notwithstanding any other provision in
this Lease to the contrary, Tenant shall comply with all laws,
statutes, ordinances, regulations, rules and other
governmental requirements in complying with its obligations
under this Lease, and in particular, relating to the storage,
use and disposal of Hazardous Materials.
f. INDEMNITY. Tenant hereby agrees to indemnify, defend and hold
Landlord, its agents, employees, lenders, directors,
representatives, successors and assigns harmless from and
against any and all actions, causes of action, losses,
damages, costs, claims, expenses, penalties, obligations or
liabilities of any kind whatsoever (including but not limited
to reasonable attorneys' fees) arising out of or relating to
any Hazardous Materials employed, used, transported across, or
otherwise dealt with by Tenant (or invitees, or persons or
entities under the control of Tenant) in connection with or
with respect to the Premises and the Property. Notwithstanding
any other provision of this Lease, the indemnity obligation of
Tenant pursuant to this Paragraph 7.f. shall survive the
termination of this Lease and shall relate to any occurrence
as described in this Paragraph 7.f. occurring in connection
with this Lease. For purposes of this Lease the term
"HAZARDOUS MATERIALS" shall mean any hazardous, toxic or
dangerous waste, substance or material, pollutant or
contaminant, as defined for purposes of the Comprehensive
Environmental Response, Compensation and Liability Act of 1980
(42 U.S.C. Sections 9601 et seq.), as amended, or the Resource
Conservation and Recovery Act (42 U.S.C. Sections 6901 et
seq.), as amended, or any other federal, state, or local law,
ordinance, rule or regulation applicable to the Premises, or
any substance which is toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic, or otherwise
hazardous, or any substance which contains gasoline,
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diesel fuel or other petroleum hydrocarbons, polychlorinated
biphenyis (PCB's), or radon gas, urea formaldehyde, asbestos
or lead.
8. SIGNS.
a. Tenant shall not place any sign upon the Premises or the
Property, except that Tenant may, with Landlord's prior
written consent, install (but not on the roof) such signs as
are reasonably required to advertise Tenant's own business
provided such signs are in compliance with all applicable
governmental requirements and the CC&R's. The installation of
any sign on the Premises or Property by or for Tenant shall be
subject to the provisions of Paragraph 12. (Repairs and
Maintenance). Landlord reserves all rights to install signs
advertising "for sale" or "for lease" on the Property, to the
extent such signs do not unreasonably interfere with the
conduct of Tenant's business.
b. Notwithstanding anything set forth in Paragraph 8.a. above,
Tenant shall be entitled to construct a "front-lit" monument
sign on the common area of the Premises indicating the
Tenant's company name or logo. Furthermore, Tenant shall be
entitled to install two signs which may be either "front-lit"
or "back-lit" on the exterior walls of the Premises indicating
its company name or logo. The location, size, materials,
design, etc. of any such sign shall be subject to Landlord's
written approval.
Notwithstanding anything set forth in this Paragraph 8, all
signage installed by Tenant on the Premises shall be in
compliance with the Covenants, Conditions & Restrictions
governing the Building.
9. PERSONAL PROPERTY TAXES. Tenant shall pay prior to delinquency all
taxes assessed against and levied upon Tenant owned leasehold
improvements, trade fixtures, furnishings, equipment and all personal
property of Tenant contained in the Premises or elsewhere. When possible,
Tenant shall cause its leasehold improvements, trade fixtures,
furnishings, equipment and all other personal property to be assessed and
billed separately from the real property of Landlord. If any of Tenant's
said personal property shall be assessed with Landlord's real property,
Tenant shall pay Landlord the taxes attributable to Tenant within ten
(10) days after receipt of a written statement setting forth the taxes
applicable to Tenant's property.
10. REAL PROPERTY TAXES
a. PAYMENT OF TAXES. Landlord shall pay the Building's Real
Property Taxes, as defined in Paragraph 10.c., during the Term
of this Lease. Subject to 10.b., Tenant shall promptly
reimburse Landlord according to Paragraph 13. for Tenant's
Share of Building of such Real Property Taxes paid by
Landlord.
b. ADVANCE PAYMENT. In order to ensure payment when due and
before delinquency of any or all Real Property Taxes, Landlord
reserves the right, at Landlord's option, to estimate the
current Real Property Taxes applicable to the Premises, and to
require each installment of the Real Property Taxes to be paid
in advance to Landlord by Tenant, either: (i) in a lump sum
amount, at least twenty (20) days prior to the applicable
delinquency date, or (ii) monthly in advance with the payment
of the Base Rent. If Landlord elects to require payment
monthly in advance, the monthly payment shall be that equal
monthly amount which, over the number of months remaining
before the month in which the applicable tax installment would
become delinquent, would provide a fund large enough to fully
discharge before delinquency the estimated installment of Real
Property Taxes to be paid. When the actual amount of the
applicable tax bill is known, Landlord may, but is not
required to, adjust the amount of such equal monthly advance
payment so as to provide the funds needed to pay the
applicable Real Property Taxes before delinquency. If the
amounts paid to Landlord by Tenant under the provisions of
this Paragraph 10. are insufficient to discharge the
obligations of Tenant to pay such Real Property Taxes as the
same become due, Tenant shall pay to Landlord, upon Landlord's
demand, such additional sums as are necessary to pay such
obligations. All moneys paid to Landlord under this Paragraph
10. may be intermingled with other moneys of Landlord and
shall not bear interest. In the event of a breach by Tenant in
the performance of the obligations of Tenant under this Lease,
then any balance of funds paid to Landlord under the
provisions of this Paragraph 10. may, at the option of
Landlord, be treated as an additional Security Deposit under
Paragraph 5.
c. DEFINITION OF "REAL PROPERTY TAXES". As used herein, the term
"REAL PROPERTY TAXES" shall include any form of real estate
tax or assessment, general, special, ordinary or
extraordinary, and any license fee, commercial rental tax,
improvement bond or bonds, levy or tax or other fee, charge,
or excise which may be imposed as a substitute for any of the
foregoing (other than inheritance, personal income or estate
taxes) imposed upon the Premises by any authority having the
direct or indirect power to tax, including any city, county,
state or federal government, or any school, agricultural,
sanitary, fire, street, drainage or other improvement district
thereof, levied against any legal or equitable interest of
Landlord in the Premises, Landlord's right to rent or other
income therefrom, and/or Landlord's business of leasing the
Premises. The term "Real Property Taxes" shall also include
any tax, fee, levy, assessment or charge, or any increase
therein, imposed by reason of events occurring, or changes in
applicable law taking effect, during the Term of this Lease,
including but not limited to a change in the ownership of the
Premises or in the improvements thereon, the execution of this
Lease, or any modification, amendment or transfer thereof, and
whether or not contemplated by the parties hereto.
11. UTILITIES. Tenant shall pay for all water, gas, heat, light, power,
telephone, trash disposal and other utilities and services supplied to
the Premises, together with any taxes thereon. If any such services are
not separately metered to Tenant, Tenant shall pay a reasonable
proportion, to be determined by Landlord, of all charges jointly metered
with other premises.
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12. REPAIRS AND MAINTENANCE
a. LANDLORD'S OBLIGATIONS. Landlord shall keep the Property,
including the foundation, exterior walls, roof, all plumbing
facilities leading up to (but not situated within) the
Building and the common area of the Building, and the
equipment whether used exclusively for the Premises or in
common with other premises, in good condition and repair
subject to reimbursement by Tenant in accordance with
Paragraph 13. There shall be no abatement of Rent or liability
to Tenant on account of any injury or interference with
Tenant's business with respect to any improvements,
alterations or repairs made by Landlord to the Property or any
part thereof.
b. TENANT'S OBLIGATIONS.
1) GENERAL. Tenant shall, at Tenant's sole cost and
expense and at all times, contract for janitorial
services and supplies, keep the Premises in good
order, condition and repair, including, without
limiting the generality of the foregoing, all
equipment or facilities serving the Premises, such as
heating, air conditioning and ventilation ("HVAC"),
subject to Paragraph 34. below, plumbing facilities
situated within the Premises, electrical, lighting
facilities, boilers, fired or unfired pressure
vessels, fixtures, interior walls, ceilings, floors,
windows, doors, plate glass, and skylights. Tenant
shall not cause or permit any Hazardous Material to
be spilled or released in, on, under or about the
Premises (including through the plumbing or sanitary
sewer system) and shall promptly, at Tenant's
expense: take all investigatory and/or remedial
action reasonably recommended, whether or not
formally ordered or required, for the cleanup of any
contamination of, and for the maintenance, security
and/or monitoring of the Premises, the elements
surrounding same, or neighboring properties, that was
caused or materially contributed to by Tenant, or
pertaining to or involving any Hazardous Materials
and/or storage tank brought onto the Premises by or
for Tenant or under its control. Tenant, in keeping
the Premises in good order, condition and repair,
shall exercise and perform good maintenance
practices. Tenant's obligations shall include
restorations, replacements or renewals when necessary
to keep the Premises and all improvements thereon or
a part thereof in good order, condition and state of
repair.
2) CONTRACTS. Tenant shall, at Tenant's sole cost and
expense, procure and maintain contracts, with copies
to Landlord, in customary form and substance for, and
with contractors specializing and experienced in, the
inspection, maintenance and service of heating, air
conditioning and ventilation equipment, if any,
located on the Premises. Tenant shall keep a detailed
preventative maintenance schedule and log showing the
frequency of maintenance on all HVAC, mechanical,
electrical and other systems of the Premises and
provide Landlord with a copy of same quarterly. (See
Paragraph 34.)
3) AS-IS CONDITION. The parties affirm that Landlord,
its subsidiaries, officers, directors, agents and/or
employees have made no representations to Tenant
respecting the condition of the Premises except as
specifically stated herein.
4) AMERICANS WITH DISABILITIES ACT. Tenant acknowledges
that as of the Commencement Date, the Premises may
not comply with the Americans with Disabilities Act
of 1990 ("ADA"). Landlord shall be obligated to cause
the Premises to so comply, except to the extent that
any ADA issues are triggered by tenant improvements
which are installed other than Landlord's Tenant
Improvements as outlined in Paragraph 28 hereof.
Tenant acknowledges that Landlord will provide the
existing elevator in the Premises in its "as is"
condition and Tenant shall be responsible for any ADA
compliance required by Tenant's use of the elevator
for any purpose whatsoever. Tenant shall, at its
cost, at any time during the Term as required by any
applicable governmental agency having jurisdiction
over the Premises, make such modifications and
alterations to the Premises as may be required in
order to fully comply with the provisions of the ADA,
as from time to time amended, and any and all
regulations issued pursuant to or in connection with
the ADA in such a manner as to satisfy the applicable
governmental agency or agencies requiring
remediation. Tenant shall at least thirty (30) days
prior to the commencement of any construction in
connection with satisfaction of the ADA, give written
notice to Landlord of its intended commencement of
construction together with sufficient details so as
to reasonably disclose to Landlord the nature of the
proposed construction, copies of any notices received
by Tenant from applicable governmental agencies in
connection with the ADA and such other documents or
information as Landlord may reasonably request. In
any event, notwithstanding anything to the contrary
contained in this Lease, prior to the termination of
the Term, Tenant shall, at its cost, make such
modifications and alterations to the Premises as may
be required to comply fully with the ADA as from time
to time amended and any and all regulations issued
thereunder. Tenant shall give the Landlord thirty
(30) days prior written notice as described above in
connection with any such construction. Any and all
construction required to so comply with the ADA shall
be completed by Tenant prior to the expiration of the
Term.
5) ELEVATOR. Notwithstanding anything to the contrary
set forth in Paragraph 12.b.4) above, the parties
hereby acknowledge that the existing elevator in its
present size and configuration ("ELEVATOR") is not in
compliance with the guidelines as set forth in the
ADA. Landlord and Tenant agree to use their mutual
best efforts to obtain the necessary City of
Sunnyvale Building Official approval ("CITY
APPROVAL") for the continued use of the Elevator for
the Premises. Should there be changes required to be
made to the condition/configuration of the Elevator
in order to obtain said City Approval, Landlord
agrees to perform said required changes at its sole
cost, providing such cost does not exceed $10,000.00.
However, if the cost referred to in the preceding
sentence exceeds said $10,000.00 sum, the Tenant
shall bear the entire amount of said cost which
exceeds said $10,000.00 amount.
Should the City Approval not be obtained, Landlord
shall have a new elevator installed to replace the
Elevator in order to obtain City Approval, and
Landlord and Tenant shall share the cost, including
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related permit, architectural and engineering fees,
on a 50%/50% basis, provided, however, Landlord's
obligation shall not exceed Seventeen Thousand Five
Hundred Dollars ($17,500). Landlord further agrees to
loan to Tenant Tenant's share of such cost, in which
case Tenant shall repay Landlord via amortization
payments over the Initial Term of the Lease with 10%
interest, payable monthly as additional Rent.
c. COMPLIANCE WITH GOVERNMENTAL REGULATIONS. Tenant shall, at its
own cost and expense, promptly and properly observe and comply
with all present and future orders, regulations, directions,
rules, laws, ordinances, and requirements of all governmental
authorities (including but not limited to state, municipal,
county and federal governments and their departments, bureaus,
boards and officials) arising from the use or occupancy of, or
applicable to, the Premises or privileges appurtenant to or in
connection with the enjoyment of the Premises. Tenant shall
also comply with all such rules, laws, ordinances and
requirements at the time Tenant makes any alteration, addition
or change to the Premises.
d. MISCELLANEOUS.
1) Landlord and Tenant shall each do all acts required
to comply with all applicable laws, ordinances and
rules of any public authority relating to their
respective maintenance obligations as set forth
herein.
2) Tenant expressly waives the benefits of any statute
now or hereafter in effect which would otherwise
afford the Tenant the right to make repairs at
Landlord's expense or to terminate this Lease because
of Landlord's failure to keep the Premises and the
Property in good order, condition and repair.
Specifically, Tenant waives the provisions of
California Civil Code Sections 1941 and 1942 with
respect to Landlord's obligations for Tenant
tenantability of the Premises and Tenant's right to
make repairs and deduct the expenses of such repairs
from Rent.
3) Tenant shall not place a load upon any floor of the
Premises which exceeds the load per square foot which
such floor was designed to carry, as determined by
Landlord or Landlord's structural engineer. The cost
of any such determination made by Landlord's
structural engineer shall be paid for by Tenant upon
demand.
4) Except as otherwise expressly provided in this Lease,
Landlord shall have no liability to Tenant nor shall
Tenant's obligations under this Lease be reduced or
abated in any manner whatsoever by reason of any
inconvenience, annoyance, interruption or injury to
business arising from Landlord making any repairs or
changes which Landlord is required to make or is
permitted to make by this Lease or by any tenant's
lease or is required by law to make in or to any
portion of the Premises. Landlord shall nevertheless
use reasonable efforts to minimize any interference
with Tenant's business in the Premises.
5) Tenant shall give Landlord prompt notice of any
damage to or defective condition in any part or
appurtenance of the Premises' mechanical, electrical,
plumbing, HVAC or other systems serving, located in
or passing through the Premises. Upon request by
Landlord, Tenant shall provide Landlord with evidence
reasonably acceptable to Landlord of service
contracts on such systems.
6) Upon the expiration or early termination of this
Lease, Tenant shall return the Premises to Landlord
clean and in the same condition as on the date Tenant
took possession, except for normal wear and tear. Any
damage to the Premises, including any structural
damage, resulting from Tenant's use or from the
removal of Tenant's fixtures, furnishings and
equipment shall be repaired by Tenant at Tenant's
expense.
7) Landlord may, at Landlord's option, choose to perform
any of the Tenant's obligations in this Paragraph 12.
The cost of any such Tenant's obligations so
performed by Landlord shall be at Tenant's sole cost
and expense. Landlord agrees to make every reasonable
effort to obtain commercially competitive prices for
such work, excluding emergency work. Tenant shall
reimburse Landlord for any such costs incurred by
Landlord in the performance of such Tenant's
obligations within ten (10) days of receipt of a
billing from Landlord.
13. OPERATING EXPENSES
a. PAYMENT BY TENANT. During the Term of this Lease, Tenant shall
pay to Landlord, as additional Rent, on a monthly basis
Tenant's Share of the Operating Expenses of the Property,
except that until Rent has commenced on the Must Take Space in
accordance with Paragraph 29.b., Tenant's Share shall be
limited to 48.18% (47,888 sq.ft./99,384 sq.ft.).
b. OPERATING EXPENSES. The term "OPERATING EXPENSES" shall mean
all expenses, costs and disbursements (not specifically
excluded from the definition of Operating Expenses below) of
every kind and nature which Landlord shall pay or become
obligated to pay because of or in connection with the
ownership, maintenance, repair and operation of the Property
or any portion thereof (including all Common Areas of the
Property). Operating Expenses shall include, but not be
limited to, the following:
1) Wages and salaries of all employees engaged in the
operation, maintenance and security of the Property,
including taxes, insurance and benefits relating
thereto; and the rental cost and overhead of any
office and storage space used to provide such
services.
2) All supplies and materials used in the operation,
repair or maintenance of the Property.
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3) Cost of all utilities, including surcharges, for the
Property, including the cost of water, power and
lighting which are not separately billed to and paid
for by Tenant.
4) Cost of all maintenance and service agreements for
the Property and the equipment thereon, including but
not limited to, security services, exterior window
cleaning, janitorial service, engineers, gardeners
and trash removal services.
5) All Insurance Costs, as such term is defined in
Paragraph 16.
6) Cost of repairs and general maintenance (excluding
repairs and general maintenance paid by proceeds of
insurance or by Tenant or other third parties, and
alterations attributable solely to the other tenants
of the Property).
7) A management fee for the property management of the
Property, which fee the parties hereto stipulate
shall be three percent (3%) of Rent. Management of
the Property can be contracted to Landlord or its
affiliate.
8) The costs of any additional services not provided to
the Property at the Commencement Date but thereafter
provided by Landlord in its management of the
Property.
9) The cost of any capital improvements made to the
Property after the Commencement Date that reduce
other operating expenses or are required under any
governmental law or regulation, such cost thereof to
be amortized over such reasonable period as Landlord
shall determine consistent with applicable
governmental requirements.
10) Real Property Taxes, as that term is defined in
Paragraph 10.
11) Assessments, dues and other amounts payable pursuant
to the CC&R's described in Paragraph 6.b.
c. OPERATING EXPENSES SHALL NOT INCLUDE:
1) Costs paid for directly by Tenant;
2) Principal and interest payments on loans secured by
deeds of trust recorded against the Property or the
Building of which the Property is a part;
3) Real estate sales or leasing brokerage commissions;
or
4) Executive salaries of off-site personnel employed by
Landlord except for the charge (or pro rata share) of
the property manager of the Property.
d. EXTRAORDINARY SERVICES. Tenant shall pay within ten (10) days
of receipt of an invoice from Landlord the cost of additional
or extraordinary services provided to Tenant and not paid or
payable by Tenant pursuant to other provisions of this Lease.
e. IMPOUND. Landlord reserves the right, at Landlord's option, to
estimate the annual cost of Operating Expenses performed by
Landlord ("PROJECTED OPERATING EXPENSES") and to require same
to be paid in advance. Tenant shall pay to Landlord, monthly
in advance as additional Rent, one-twelfth (1/12) of the
Projected Operating Expenses.
f. ADJUSTMENT.
1) ACCOUNTING. Within ninety (90) days (or as soon
thereafter as possible) after the close of each
calendar year or portion thereof of occupancy,
Landlord shall provide Tenant a statement of such
year's actual Operating Expenses showing the actual
Operating Expenses compared to the Projected
Operating Expenses. If the actual Operating Expenses
are more than the Projected Operating Expenses then
Tenant shall pay Landlord, within ten (10) days of
receipt of a bill therefor, the difference. If the
actual Operating Expenses are less than the Projected
Operating Expenses, then Tenant shall receive a
credit against future Operating Expenses payments
equal to the difference; provided, that in the case
of an overpayment for the final lease year of the
Term, Landlord shall credit the difference against
any sums due from Tenant to Landlord in accordance
with the terms of this Lease; and if no sums are due
and unpaid, shall promptly refund the amount to
Tenant.
2) PRORATION. Tenant's liability to pay Operating
Expenses shall be prorated on the basis of a 365 (or
366, as the case may be) day year to account for any
fractional portion of a year included at the
commencement or expiration of the Term of this Lease.
3) SURVIVAL. Landlord and Tenant's obligations to pay
for or credit any increase or decrease in payments
pursuant to this Paragraph 13. shall survive this
Lease.
g. FAILURE TO PAY. Failure of Tenant to pay any of the charges
required to be paid under this Paragraph 13. shall constitute
a material default and breach of this Lease and Landlord's
remedies shall be as specified in Paragraph 21.
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h. OPERATING EXPENSE AUDIT. Within twelve (12) months of receipt
of any billing statement ("STATEMENT"), and upon thirty (30)
days prior written notice Tenant shall have the right to
examine, to copy and to have an audit conducted of all books
and records of Landlord at Landlord's office pertaining to the
Operating Expenses for the period covered by the Statement. If
Tenant disputes the inclusion or amount of any item or items
in any such Statement, the Parties will use good faith efforts
to settle such dispute within thirty (30) days after notice of
the dispute. In the event that such dispute is not settled
within this time period, the dispute shall be resolved by a
firm of real estate audit professionals ("AUDIT
PROFESSIONALS") mutually acceptable to Landlord and Tenant.
Audit Professionals shall mean for the purposes of this
Paragraph 13.h. an independent firm of Certified Public
Accountants with experience in real estate expense reviews. If
Landlord and Tenant cannot agree on Audit Professionals within
fifteen (15) days, then Landlord and Tenant shall each, within
fifteen (15) days, select one (1) independent firm of Audit
Professionals, and such two (2) Audit Professionals shall
together select a third firm of Audit Professionals, which
third firm shall be the Audit Professionals who shall resolve
the dispute. The Audit Professionals shall be entitled to
review all records relating to the disputed items. The
determination of the Audit Professionals shall be final and
binding upon both Landlord and Tenant. The expenses of the
Audit Professionals shall be borne by Tenant unless said audit
discloses an overall overstatement of Operating Expenses of
five percent (5%) or more for the period being audited, in
which case Landlord shall pay the audit expenses. If the Audit
Professionals determine that Tenant has made an over-payment
or under-payment, then the procedures in Paragraph 13.f.1)
shall be followed.
14. ALTERATIONS. Tenant shall not make any alterations to the Premises,
or the Property without Landlord's prior written consent unless such
alterations are non-structural and have a total aggregate cost of less
than $3,000.00 per occurrence. If Landlord gives its consent to such
alterations, Landlord may post notices in accordance with the laws of the
state in which the Premises are located. All alterations made by Tenant,
whether or not subject to the approval of Landlord, shall be performed by
Tenant and its contractors in a first class workmanlike manner and
permits and inspections shall be obtained from all required governmental
entities. Any alterations made shall remain on and be surrendered with
the Premises upon expiration or termination of this Lease, except that
Landlord may, within thirty (30) days before or thirty (30) days after
expiration of the Term, elect to require Tenant to remove some or all of
the alterations which Tenant may have made to the Premises, unless
Landlord has previously agreed in writing that any one or more particular
such improvements need not be removed at the end of the Term. If Landlord
so elects, Tenant shall at its own cost restore the Premises to the
condition designated by Landlord in its election, before the last day of
the Term or within thirty (30) days after notice of its election is
given, whichever is later. Should Landlord consent in writing to Tenant's
alteration of the Premises, Tenant shall contract with a contractor
approved by Landlord for the construction of such alterations, shall
secure all appropriate governmental approvals and permits, and shall
complete such alterations with due diligence in compliance with plans and
specifications approved by Landlord. Tenant shall pay all costs for such
construction and shall keep the Premises free and clear of all mechanics'
liens which may result from construction by Tenant.
15. RELEASE AND INDEMNITY. As material consideration to Landlord, Tenant
agrees that Landlord shall not be liable to Tenant for any damage to
Tenant or Tenant's property from any cause, except for damages resulting
from Landlord's gross negligence or willful misconduct, and Tenant waives
all claims against Landlord for damage to persons or property arising for
any reason, except for damage resulting directly from Landlord's breach
of its express obligations under this Lease which Landlord has not cured
within a reasonable time after written notice of such breach from Tenant.
Tenant shall indemnify and hold Landlord harmless from all damages
including attorneys' fees and costs arising out of any damage to any
person or property occurring in, on or about the Premises or Tenant's use
of the Premises or Tenant's breach of any term of this Lease.
16. INSURANCE
a. PAYMENT FOR INSURANCE. Regardless of whether the Landlord or
Tenant is the Insuring Party, Tenant shall pay for all
insurance for the Premises required under this Paragraph 16.
("INSURANCE COSTS"). Premiums for policy periods commencing
prior to or extending beyond the Lease Term shall be prorated
to correspond to the Lease Term. Payment shall be made by
Tenant to Landlord within ten (10) days following receipt of
an invoice for any amount due.
b. LIABILITY INSURANCE.
1) CARRIED BY TENANT. Whether or not Tenant is the
Insuring Party, Tenant shall obtain and keep in force
during the Term of this Lease a commercial general
liability policy of insurance protecting Tenant and
Landlord (as an additional insured) against claims
for bodily injury, personal injury and property
damage based upon, involving or arising out of the
ownership, use, occupancy or maintenance of the
Premises and all areas appurtenant thereto. Such
insurance shall be on an occurrence basis providing
single limit coverage in an amount not less than
$3,000,000 per occurrence with an "Additional
Insured-Managers or Landlords of Premises"
endorsement and contain an "Amendment of the
Pollution Exclusion" for damage caused by heat, smoke
or fumes from a hostile fire or other such forms as
may be acceptable to Landlord. The policy shall not
contain any intra-insured exclusions as between
insured persons or organizations, but shall include
coverage for liability assumed under this Lease as an
"insured contract" for the performance of Tenant's
indemnity obligations under this Lease. The limits of
said insurance required by this Lease or as carried
by Tenant shall not, however, limit the liability of
Tenant nor relieve Tenant of any obligation
hereunder. All insurance to be carried by Tenant
shall be primary to and not contributory with any
similar insurance carried by Landlord, whose
insurance shall be considered excess insurance only.
All insurance coverage required pursuant to this
Paragraph 16. which is to name Landlord as a named
insured shall also name Landlord's subsidiaries,
directors, agents, officers and employees as named
insureds.
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2) CARRIED BY LANDLORD. In the event Landlord is the
Insuring Party, Landlord shall also maintain
liability insurance as described in Paragraph
16.b.1), in addition to, and not in lieu of the
insurance required to be maintained by Tenant. In the
event Tenant is the Insuring Party, Landlord shall in
addition carry Landlord's Risk Coverage and insure
the Premises on Landlord's umbrella policy. Tenant
shall not be named as an additional insured therein
under any insurance obtained by Landlord in
accordance with this Paragraph 16.b.2).
c. PROPERTY INSURANCE - BUILDING, IMPROVEMENTS AND RENTAL VALUE.
1) BUILDING AND IMPROVEMENTS. The Insuring Party shall
obtain and keep in force during the Term of this
Lease a policy or policies in the name of Landlord,
with loss payable to Landlord and to the holders of
any mortgages, deeds of trust or ground leases on the
Premises ("LENDER(s)"), insuring loss or damage to
the Premises. The amount of such insurance shall be
equal to the full replacement cost of the Premises,
as the same shall exist from time to time, or the
amount required by Lender(s), but in no event more
than the commercially reasonable and available
insurable value thereof if, by reason of the unique
nature or age of the improvements involved, such
latter amount is less than full replacement cost.
Such policy or policies shall insure against all
risks of direct physical loss or damage (including
the perils of flood and earthquake), including
coverage for any additional costs resulting from
debris removal and reasonable amounts of coverage for
the enforcement of any ordinance or law regulating
the reconstruction or replacement of any undamaged
sections of the Premises required to be demolished
shall also contain an agreed valuation provision in
lieu of any coinsurance clause, waiver of subrogation
and inflation guard protection causing an increase in
the annual property insurance coverage amount by a
factor of not less than the adjusted U.S. Department
of Labor Consumer Price Index for All Urban Consumers
for the city nearest to where the Premises are
located. If such insurance coverage has a deductible
clause, then Tenant shall be liable for such
deductible amount. Even if Landlord is the Insuring
Party, Tenant's personal property shall be insured by
Tenant under Paragraph 16.d. rather than by Landlord.
2) RENTAL VALUE. The Insuring Party shall, in addition,
obtain and keep in force during the term of this
Lease a policy or policies in the name of Landlord,
with loss payable to Landlord and Lender(s), insuring
the loss of the full rental and other charges payable
by Tenant to Landlord under this Lease for one (1)
year (including all Real Property Taxes, Insurance
Costs and any scheduled Rent increases). Said
insurance shall provide that in the event the Lease
is terminated by reason of an insured loss, the
period of indemnity for such coverage shall be
extended beyond the date of the completion of repairs
or replacement of the Premises, to provide for one
full year's loss of Rent from the date of any such
loss. Said insurance shall contain an agreed
valuation provision in lieu of any coinsurance
clause, and the amount of coverage shall be adjusted
annually to reflect the projected Rent, Real Property
Taxes, Insurance Costs and other expenses, if any,
otherwise payable by Tenant, for the next twelve (12)
month period. Tenant shall be liable for any
deductible amount in the event of such loss.
3) ADJACENT PREMISES. If the Premises are part of a
larger building, or if the Premises are part of a
group of buildings owned by Landlord which are
adjacent to the Premises, the Tenant shall pay for
any increase in the premiums for the property
insurance of such building or buildings if said
increase is caused by Tenant's acts, omissions, use
or occupancy of the Premises.
4) TENANT'S IMPROVEMENTS. If the Landlord is the
Insuring Party, the Landlord shall not be required to
insure Tenant's personal property and leasehold
improvements unless the item in question has become
the property of Landlord under the terms of this
Lease. If Tenant is the Insuring Party, the policy
carried by tenant under this Paragraph 16.c. shall
insure Tenant's personal property and leasehold
improvements.
d. TENANT'S PROPERTY INSURANCE. Subject to the requirements of
Paragraph 16.e., Tenant at its cost shall either by separate
policy, or at Landlord's option, by endorsement to a policy
already carried, maintain insurance coverage on all of
Tenant's personal property and Tenant owned leasehold
improvements in, on or about the Premises similar in coverage
to that carried by the insuring Party under Paragraph 16.c.
Such insurance shall be full replacement cost coverage with a
deductible of not to exceed $10,000 per occurrence. The
proceeds from any such insurance shall be used by Tenant for
the replacement of personal property or the restoration of
Tenant owned leasehold improvements. Tenant shall be the
Insuring Party with respect to the insurance required by this
Paragraph 16.d. and shall provide Landlord with written
evidence that such insurance is in force.
e. INSURANCE POLICIES. If Tenant is the Insuring Party, Insurance
required per this Paragraph 16. shall be with companies duly
licensed to transact business in the state where the Premises
are located, and maintaining during the policy term a "General
Policyholders Rating" of at least A- X, or such other minimal
rating as may be required by Lender(s) as set forth in the
most current issue of "Best's Insurance Guide." Tenant shall
not do or permit to be done anything which shall invalidate
the insurance policies referred to in this Paragraph 16. If
Tenant is the Insuring Party, Tenant shall cause to be
delivered to Landlord certified copies of policies of such
insurance or certificates evidencing the existence and amounts
of such insurance with the insureds and loss payable clauses
as required by this Lease. No such policy shall be cancelable
or subject to modification except after thirty (30) days prior
written notice to Landlord. Tenant shall at least thirty (30)
days prior to the expiration of such policies, furnish
Landlord with evidence of renewals or "insurance binders"
evidencing renewal thereof, or Landlord may order such
insurance and charge the cost thereof to Tenant, which amount
shall be payable by Tenant to Landlord upon demand. If the
Insuring Party shall fail to procure and maintain the
insurance required to be carried by the Insuring Party under
this Paragraph 16., the other Party may, but shall not be
required to, procure and maintain the same, but at Tenant's
expense.
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f. MUTUAL WAIVER. Notwithstanding anything to the contrary
contained in this Lease, to the extent that this release and
waiver does not invalidate or impair their respective
insurance policies, the parties hereto release each other and
their respective agents, employees, officers, directors,
shareholders, successors, assignees and subtenants from all
liability for injury to any person or damage to any property
that is caused by or results from a risk which is actually
insured against pursuant to the provisions of this Lease
without regard to the negligence or willful misconduct of the
parties so released. Each party shall use its best efforts to
cause each insurance policy it obtains to provide that the
insurer thereunder waives all right of recovery by way of
subrogation as required herein in connection with any injury
or damage covered by the policy. If such insurance policy
cannot be obtained with such waiver of subrogation, or if such
waiver of subrogation is only available at additional cost and
the party for whose benefit the waiver is not obtained does
not pay such additional costs after reasonable notice, then
the party obtaining such insurance shall promptly notify the
other party of the inability to obtain insurance coverage with
the waiver of subrogation.
17. DAMAGE AND DESTRUCTION
a. DAMAGE - INSURED. In the event that the Building containing
the Premises is damaged by fire or other casualty which is
covered under insurance pursuant to the provisions of
Paragraph 16. above, Landlord shall restore such damage
provided that: (i) the destruction of the Building containing
the Premises does not exceed sixty percent (60%) of the then
replacement value of the Building containing the Premises;
(ii) the insurance proceeds are available (inclusive of any
deductible amounts) to pay one hundred percent (100%) of the
cost of restoration; and (iii) in the reasonable judgment of
Landlord, the restoration can be completed within two hundred
and seventy (270) days after the date of the damage or
casualty under the laws and regulations of the state, federal,
county and municipal authorities having jurisdiction. The
deductible amount of any insurance coverage shall be paid by
Tenant. If such conditions apply so as to require Landlord to
restore such damage pursuant to this Paragraph 17.a., this
Lease shall continue in full force and effect, unless
otherwise agreed to in writing by Landlord and Tenant. Tenant
shall be entitled to a proportionate reduction of Rent while
such restoration takes place, such proportionate reduction to
be based on the extent to which the damage and restoration
efforts interfere with Tenant's business in the Premises.
Tenant's right to a reduction of Rent hereunder shall be
Tenant's sole and exclusive remedy in connection with any such
damage.
b. DAMAGE - UNINSURED. In the event that the Building containing
the Premises is damaged by a fire or other casualty and
Landlord is not required to restore such damage in accordance
with the provisions of Paragraph 17.a. immediately above,
Landlord shall have the option to either (i) repair or restore
such damage, with the Lease continuing in full force and
effect, but Rent to be proportionately abated as provided in
Paragraph 17.a. above; or (ii) give notice to Tenant at any
time within thirty (30) days after the occurrence of such
damage terminating this Lease as of a date to be specified in
such notice which date shall not be less than thirty (30) nor
more than sixty (60) days after the date on which such notice
of termination is given. In the event of the giving of such
notice of termination, this Lease shall expire and all
interest of Tenant in the Premises shall terminate on the date
so specified in such notice and the Rent, reduced by any
proportionate reduction in Rent as provided for in Paragraph
17.a. above, shall be paid to the date of such termination.
Notwithstanding the foregoing, if Tenant delivers to Landlord
the funds necessary to make up the shortage (or absence) in
insurance proceeds and the restoration can be completed in a
two hundred seventy (270) day period, as reasonably determined
by Landlord, and the destruction of the Building containing
the Premises does not exceed sixty percent (60%) of the then
replacement value, Landlord shall restore the Premises as
provided in Paragraph 17.a. above.
c. END OF TERM CASUALTY. Notwithstanding the provisions of
Paragraph 17.a. and Paragraph 17.b. above, either Landlord or
Tenant may terminate this Lease if the Building containing the
Premises is damaged by fire or other casualty (and Landlord's
reasonably estimated cost of restoration of the Building
containing the Premises exceeds ten percent (10%) of the then
replacement value of the Building containing the Premises) and
such damage or casualty occurs during the last twelve (12)
months of the Term of this Lease (or the Term of any renewal
option, if applicable) by giving the other notice thereof at
any time within thirty (30) days following the occurrence of
such damage or casualty. Such notice shall specify the date of
such termination which date shall not be less than thirty (30)
nor more than sixty (60) days following the date on which such
notice of termination is given. In the event of the giving of
such notice of termination, this Lease shall expire and all
interest of Tenant in the Premises shall terminate on the date
so specified in such notice and the Rent shall be paid to the
date of such termination.
d. TERMINATION BY TENANT. In the event that the destruction to
the Building containing the Premises cannot be restored as
required herein under applicable laws and regulations within
two hundred seventy (270) days of the damage or casualty,
notwithstanding the availability of insurance proceeds, Tenant
shall have the right to terminate this Lease by giving the
Landlord notice thereof within thirty (30) days of date of the
occurrence of such casualty specifying the date of termination
which shall not be less than thirty (30) days nor more than
sixty (60) days following the date on which such notice of
termination is given. In the event of the giving of such
notice of termination, this Lease shall expire and all
interest of Tenant in the Premises shall terminate on the date
so specified in such notice and the Rent, reduced by any
proportionate reduction in Rent as provided for in Paragraph
17.a. above, shall be paid to the date of such termination.
e. RESTORATION. Landlord agrees that, in any case in which
Landlord is required to, or otherwise agrees to restore the
Building containing the Premises, Landlord shall proceed with
due diligence to make all appropriate claims and applications
for the proceeds of insurance and to apply for and obtain all
permits necessary for the restoration of the Building
containing the Premises. Landlord shall use reasonable efforts
to enforce any and all provisions in any mortgage, deed of
trust or other encumbrance on the Building containing the
Premises requiring Landlord and Lender to permit insurance
proceeds to be used for restoration. Landlord shall restore
the Premises to the condition existing prior to the date of
the damage if permitted by applicable law.
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18. CONDEMNATION
a. DEFINITIONS. The following definitions shall apply: (1)
"CONDEMNATION" means (a) the exercise of any governmental
power of eminent domain, whether by legal proceedings or
otherwise by condemnor, or (b) the voluntary sale or transfer
by Landlord to any condemnor either under threat of
condemnation or while legal proceedings for condemnation are
proceeding; (2) "DATE OF TAKING" means the date the condemnor
has right to possession of the property being condemned; (3)
"AWARD" means all compensation, sums or anything of value
awarded, paid or received on a total or partial Condemnation;
and (4) "CONDEMNOR" means any public or quasi-public
authority, or private corporation or individual, having power
of Condemnation.
b. OBLIGATIONS TO BE GOVERNED BY LEASE. If during the Term of the
Lease there is any taking of all or any part of the Building
containing the Premises, the rights and obligations of the
parties shall be determined strictly pursuant to this Lease.
c. TOTAL OR PARTIAL TAKING. If the Building containing the
Premises are totally taken by Condemnation, this Lease shall
terminate on the Date of Taking. If any portion of the
Building containing the Premises is taken by Condemnation,
this Lease shall remain in effect, except that Tenant can
elect to terminate this Lease if the remaining portion of the
Premises is rendered unsuitable for Tenant's continued use of
the Premises. If Tenant elects to terminate this Lease, Tenant
must exercise its right to terminate by giving notice to
Landlord within thirty (30) days after the nature and extent
of the Condemnation have been finally determined. If Tenant
elects to terminate this Lease, Tenant shall also notify
Landlord of the date of termination, which date shall not be
earlier than thirty (30) days nor later than ninety (90) days
after Tenant has notified Landlord of its election to
terminate; except that this Lease shall terminate on the Date
of Taking if the Date of Taking falls on a date before the
date of termination as designated by Tenant. If any portion of
the Premises is taken by Condemnation and this Lease remains
in full force and effect, on the Date of Taking the Base Rent
shall be reduced by an amount in the same ratio as the total
number of square feet in the building(s) which are a part of
the Premises taken bears to the total number of square feet in
the building(s) which are a part of the Premises immediately
before the Date of Taking. Any Award for the taking of all or
any part of the Premises under the power of eminent domain or
any payment made under threat of the exercise of such power
shall be the property of Landlord, whether such Award shall be
made as compensation for diminution in value of the leasehold
or for the taking of the fee, or as severance damages;
provided, however, that Tenant shall be entitled to any
compensation separately awarded to Tenant for Tenant's
relocation expenses and/or loss of Tenant's trade fixtures.
19. ASSIGNMENT OR SUBLEASE
a. Tenant shall not assign or encumber its interest in this Lease
or the Premises or sublease all or any part of the Premises or
allow any other person or entity (except Tenant's authorized
representatives, employees, invitees or guests) to occupy or
use all or any part of the Premises without first obtaining
Landlord's consent, which consent shall not be unreasonably
withheld. Any assignment, encumbrance or sublease without
Landlord's prior written consent shall be voidable and at
Landlord's election, shall constitute a default. If Tenant is
a partnership, a withdrawal or change, voluntary, involuntary
or by operation of law of any partner, or the dissolution of
the partnership, shall be deemed a voluntary assignment. If
Tenant consists of more than one person, a purported
assignment, voluntary or involuntary or by operation of law
from one person to the other shall be deemed a voluntary
assignment. If Tenant is a corporation, any dissolution,
merger, consolidation or other reorganization of Tenant, or
sale or other transfer of a controlling percentage of the
capital stock of Tenant, or the sale of at least fifty percent
(50%) of the value of the assets of Tenant shall be deemed a
voluntary assignment. All Rent received by Tenant from its
subtenants in excess of the Rent payable by Tenant to Landlord
under this Lease applicable to the portion of the Premises
subleased shall be paid to Landlord, or any sums to be paid by
an assignee to Tenant in consideration of the assignment of
this Lease shall be paid to Landlord. If Tenant requests
Landlord to consent to a proposed assignment or subletting,
Tenant shall pay to Landlord, whether or not consent is
ultimately given, an amount equal to Landlord's reasonable
attorneys' fees and costs incurred in connection with such
request up to $1,000.00 per request. Tenant shall, upon
completion of any assignment or subletting of all or any
portion of the Premises, immediately and irrevocably assign to
Landlord as security for Tenant's obligations under the Lease,
all Rent from any such subletting or assignment. Landlord, as
assignee and attorney in fact for Tenant, shall have the right
to collect all rent and other revenues collectable pursuant to
any such sublet or assignment and apply such rent and other
revenues towards Tenant's obligations under the Lease
provided, however, that Landlord shall have no right to
collect such rent and other revenues until the occurrence of
an act of default under this Lease.
b. No interest of Tenant in this Lease shall be assignable by
involuntary assignment through operation of law (including
without limitation the transfer of this Lease by testacy or
intestacy). Each of the following acts shall be considered an
involuntary assignment: (a) if Tenant is or becomes bankrupt
or insolvent, makes an assignment for the benefit of
creditors, or institutes proceedings under the Bankruptcy Act
in which Tenant is the bankrupt; or if Tenant is a partnership
or consists of more than one person or entity, if any partner
of the partnership or other person or entity is or becomes
bankrupt or insolvent, or makes an assignment for the benefit
of creditors; or (b) if a writ of attachment or execution is
levied on this Lease; or (c) if in any proceeding or action to
which Tenant is a party, a receiver is appointed with
authority to take possession of the Premises. An involuntary
assignment shall constitute a default by Tenant and Landlord
shall have the right to elect to terminate this Lease, in
which case this Lease shall not be treated as an asset of
Tenant.
c. Landlord may at its option, elect to terminate the Lease
instead of approving the requested assignment or sublease.
Should Landlord so elect to terminate this Lease, all of the
obligations of the parties thereunder shall terminate on the
later of sixty (60) days following Landlord's notice to Tenant
of its election hereunder,
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or the effective date of the proposed assignment or subletting
sought by the Tenant, but in no event later than one hundred
twenty (120) days following the date of Landlord's election
under this Paragraph 19.c. At the time of termination, all
obligations of both parties hereunder shall terminate as to
obligations thereafter accruing except as otherwise expressly
provided in this Lease.
20. DEFAULT. The occurrence of any of the following shall constitute a
default by Tenant: (a) a failure of Tenant to pay Rent within five (5)
days of its due date; (b) abandonment and vacation of the Premises
(failure to occupy and operate the Premises for ten(10) consecutive
days shall be deemed an abandonment and vacation); or (c) failure to
timely perform any other provision of this Lease.
21. LANDLORD'S REMEDIES. Landlord shall have the following remedies if
Tenant is in default. (These remedies are not exclusive; they are
cumulative and in addition to any remedies now or later allowed by
law):
a. Landlord may continue this Lease in full force and effect, and
this Lease will continue in effect so long as Landlord does
not terminate Tenant's right to possession, and Landlord shall
have the right to collect Rent when due. During the period
Tenant is in default, Landlord can enter the Premises and
relet the Premises, or any part of the Premises, to third
parties for Tenant's account. Tenant shall be liable
immediately to Landlord for all costs Landlord incurs in
reletting the Premises, including without limitation, brokers'
commissions, expenses of remodeling the Premises required by
the reletting, and like costs. Reletting can be for a period
shorter or longer than the remaining Term of this Lease.
Tenant shall pay to Landlord the Rent due under this Lease on
the dates the Rent is due, less the Rent Landlord receives
from any reletting. No act by Landlord allowed by this
Paragraph 21.a. shall terminate this Lease unless Landlord
notifies Tenant in writing that Landlord elects to terminate
this Lease. After Tenant's default and for so long as Landlord
does not terminate Tenant's right to possession of the
Premises, if Tenant obtains Landlord's consent, Tenant shall
have the right to assign or sublet its interest in this Lease,
but Tenant shall not be released from liability. Landlord's
consent to such a proposed assignment or subletting shall not
be unreasonably withheld. If Landlord elects to relet the
Premises as provided in this Paragraph 21.a., Rent that
Landlord receives from reletting shall be applied to the
payment of: first, any indebtedness from Tenant to Landlord
other than Rent due from Tenant; second, all costs, including
for maintenance incurred by Landlord in reletting; and third,
Rent due and unpaid under this Lease. After deducting the
payments referred to in this Paragraph 21.a., any sum
remaining from the Rent Landlord receives from reletting shall
be held by Landlord and applied in payment of future Rent as
Rent becomes due under this Lease. In no event shall Tenant be
entitled to any excess Rent received by Landlord. If, on the
date Rent is due under this Lease, the Rent received from the
reletting is less than the Rent due on that date, Tenant shall
pay to Landlord, in addition to the remaining Rent due, all
reasonable costs including for maintenance Landlord incurred
in reletting that remain after applying the Rent received from
the reletting as provided in this Paragraph 21.a.; and
b. Landlord may terminate Tenant's right to possession of the
Premises at any time. No act by Landlord other than giving
express written notice thereof to Tenant shall terminate this
Lease. Acts of maintenance, efforts to relet the Premises, or
the appointment of a receiver on Landlord's initiative to
protect Landlord's interest under this Lease shall not
constitute a termination of Tenant's right to possession. Upon
termination of Tenant's right to possession, Landlord has the
right to recover from Tenant: (1) the Worth of the unpaid Rent
that had been earned at the time of termination of Tenant's
right to possession; (2) the Worth of the amount by which the
unpaid Rent that would have been earned after the date of
termination until the time of award exceeds the amount of the
loss of Rent that Tenant proves could have been reasonably
avoided; (3) the Worth of the amount of the unpaid Rent that
would have been earned after the award throughout the
remaining Term of the Lease to the extent such unpaid Rent
exceeds the amount of the loss of Rent that Tenant proves
could have been reasonably avoided; and (4) any other amount,
including but not limited to, all reasonable expenses incurred
to relet the Premises, court costs, attorneys' fees and
collection costs necessary to compensate Landlord for all
detriment caused by Tenant's default. The "Worth", as used
above in (1) and (2) in this Paragraph 21.b. is to be computed
by allowing interest at the lesser of 18 percent per annum or
the maximum legal interest rate permitted by law. The "Worth",
as used above in (3) in this Paragraph 21.b. is to be computed
by discounting the amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of the award, plus
one percent (1%).
22. ENTRY OF PREMISES. Landlord and/or its authorized representatives shall
have the right to enter the Premises after reasonable notice, except
for any case of emergency, for any of the following purposes: (a) to
determine whether the Premises are in good condition and whether Tenant
is complying with its obligations under this Lease; (b) to do any
necessary maintenance and to make any restoration to the Premises that
Landlord has the right or obligation to perform; (c) to post "for sale"
signs at any time during the Term, or to post "for rent" or "for lease"
signs during the last one hundred eighty (180) days of the Term or
during any period while Tenant is in default; (d) to show the Premises
to prospective brokers, agents, buyers, tenants or persons interested
in leasing or purchasing the Premises, at any time during the Term; or
(e) to repair, maintain or improve the Premises and to erect
scaffolding and protective barricades around and about the Premises but
not so as to prevent entry to the Premises and to do any other act or
thing necessary for the safety or preservation of the Premises.
Landlord shall not be liable in any manner for any inconvenience,
disturbance, loss of business, nuisance or other damage arising out of
Landlord's entry onto the Premises as provided in this Paragraph 22.
Tenant shall not be entitled to an abatement or reduction of Rent if
Landlord exercises any rights reserved in this Paragraph 22. Landlord
shall conduct its activities on the Premises as provided herein in a
commercially reasonable manner that will lessen the inconvenience,
annoyance or disturbance to Tenant.
23. SUBORDINATION
a. AUTOMATIC SUBORDINATION. Without the necessity of any
additional document being executed by Tenant for the purpose
of effecting a subordination, and at the election of Landlord
or any Lender(s) against the Building
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containing the Premises, this Lease shall be subject and
subordinate at all times to (i) all ground leases or
underlying leases which may now exist or hereafter be executed
affecting the Building containing the Premises, (ii) the lien
of any mortgage or deed of trust which may hereafter be
executed affecting the Building containing the Premises, and
(iii) the lien of any mortgage or deed of trust which may
hereafter be executed in any amount for which the Premises,
ground leases or underlying leases, or Landlord's interest or
estate in any of said items is specified as security. In the
event that any ground lease or underlying lease terminates for
any reason or any mortgage or deed of trust is foreclosed or a
conveyance in lieu of foreclosure is made for any reason,
Tenant shall, notwithstanding any subordination, attorn to and
become the Tenant of the successor in interest to Landlord. In
connection with any such termination of a ground lease or
underlying lease or any foreclosure or conveyance in lieu of
foreclosure made in connection with any mortgage or deed of
trust, then so long as Tenant is not in default pursuant to
this Lease, Tenant shall not be disturbed in its possession of
the Premises or in the enjoyment of its rights pursuant to
this Lease during the Term of this Lease or any extension or
renewal thereof.
b. ADDITIONAL SUBORDINATION. From time to time at the request of
Landlord, Tenant covenants and agrees to execute and deliver
within ten (10) days following the date of written request
from Landlord, documents evidencing the priority or
subordination of this Lease with respect to any ground lease
or underlying lease or the lien of any mortgage or deed of
trust in connection with the Building containing the Premises.
Any and all such documents shall be in such form as is
reasonably acceptable to Tenant and Landlord as well as the
Lender(s) and other applicable party. Any subordination
agreement so requested by Landlord shall provide for Tenant to
attorn to the successor in interest to Landlord and shall
further provide that Tenant shall not be disturbed in its
possession of the Premises or in the enjoyment of its rights
pursuant to this Lease so long as Tenant is not in default
with respect to its obligations pursuant to the Lease. Any
such Subordination, Non-disturbance and Attornment Agreement
shall be recorded in the official records of the office of the
County Recorder in the County in which the Premises is
located.
c. NOTICE FROM LENDER. Tenant shall be entitled to rely upon any
notice given by Lender(s) in connection with the Premises
requesting that Tenant make all future Rent payments to such
Lender(s), and Tenant shall not be liable to Landlord for any
payment made to such Lender(s) in accordance with such notice.
24. ESTOPPEL CERTIFICATE -- TENANT FINANCIAL STATEMENTS. Tenant, at any
time and from time to time, upon not less than ten (10) days written
notice from Landlord, will execute, acknowledge and deliver to Landlord
and, at Landlord's request, to any existing or prospective purchaser,
ground lessor or mortgagee of any part of the Premises, a certificate
of Tenant stating: (a) that Tenant has accepted the Premises (or, if
Tenant has not done so, Tenant has not accepted the Premises and
specifying the reasons therefor); (b) the Commencement and Expiration
Dates of this Lease; (c) that this Lease is unmodified and in full
force and effect (or, if there have been modifications, that same is in
full force and effect as modified and stating the modifications); (d)
whether or not to the best of Tenant's knowledge there are then
existing any defenses against the enforcement of any of the obligations
of Tenant under this Lease (and, if so, specifying same); (e) whether
or not to the best of Tenant's knowledge there are then existing any
defaults by Landlord in the performance of its obligations under this
Lease (and, if so, specifying same); (f) the dates, if any, to which
the Rent and other charges under this Lease have been paid; (g) whether
or not there are Rent increases during the Lease Term and if so the
amount of same; (h) whether or not the Lease contains any options or
rights of first offer or first refusal; (i) the amount of any Security
Deposit or other sums due Tenant; (j) the current notice address for
Tenant; and (k) any other information that may reasonably be required
by any of such persons. It is intended that any such certificate of
Tenant delivered pursuant to this Paragraph 24. may be relied upon by
Landlord and any existing or prospective purchaser, ground lessor or
mortgagee of the Building containing the Premises. Tenant agrees, at
any time upon request by Landlord, to deliver to Landlord the current
financial statements of Tenant with an opinion of a certified public
accountant, if available, including a balance sheet and profit and loss
statement for the most recent prior three years all prepared in
accordance with generally accepted accounting principles consistently
applied.
25. WAIVER. No delay or omission in the exercise of any right or remedy by
Landlord shall impair such right or remedy or be construed as a waiver.
No act or conduct of Landlord, including without limitation, acceptance
of the keys to the Premises, shall constitute an acceptance of the
surrender of the Premises by Tenant before the expiration of the Term.
Only written notice from Landlord to Tenant shall constitute acceptance
of the surrender of the Premises and accomplish termination of the
Lease. Landlord's consent to or approval of any act by Tenant requiring
Landlord's consent or approval shall not be deemed to waive or render
unnecessary Landlord's consent to or approval of any subsequent act by
Tenant. Any waiver by Landlord of any Default must be in writing and
shall not be a waiver of any other Default concerning the same or any
other provision of the Lease.
26. SURRENDER OF PREMISES; HOLDING OVER. Upon expiration of the Term,
Tenant shall surrender to Landlord the Premises and all tenant
improvements and alterations in the same condition as existed at the
Commencement Date, except for ordinary wear and tear and alterations
which Tenant has the right or is obligated to remove under the
provisions of Paragraph 14. herein. Tenant shall remove all personal
property including, without limitation, all wallpaper, paneling and
other decorative improvements or fixtures and shall perform all
restoration made necessary by the removal of any alterations or
Tenant's personal property before the expiration of the Term,
including, for example, restoring all wall surfaces to their condition
as of the Commencement Date. Landlord can elect to retain or dispose of
in any manner Tenant's personal property not removed from the Premises
by Tenant prior to the expiration of the Term. Tenant waives all claims
against Landlord for any damage to Tenant resulting from Landlord's
retention or disposition of Tenant's personal property. Tenant shall be
liable to Landlord for Landlord's reasonable cost for storage, removal
and disposal of Tenant's personal property.
If Tenant with Landlord's consent remains in possession of the Premises
after expiration of the Term or after the date in any notice given by
Landlord to Tenant terminating this Lease, such possession by Tenant
shall be deemed to be a month to month tenancy cancelable by either
party on thirty (30) days written notice given at any time by
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either party and all provisions of this Lease, except those pertaining
to Term, renewal options and Base Rent shall apply and Tenant shall pay
monthly Base Rent in an amount equal to one hundred fifty percent
(150%) of the Base Rent for the last full calendar month immediately
preceding expiration of the Term.
27. NOTICES. All notices, demands, or other communications required or
contemplated under this Lease shall be in writing and shall be deemed
to have been duly given 48 hours from the time of mailing if mailed by
registered or certified mail, return receipt requested, postage
prepaid, or 24 hours from the time of shipping by overnight carrier, or
the actual time of delivery if delivered by personal service to the
parties at the addresses specified in Paragraph 1. Either Tenant or
Landlord may change the address to which notices are to be given to
such party hereunder by giving written notice of such change of address
to the other in accordance with the notice provisions hereof.
28. LANDLORD'S TENANT IMPROVEMENTS. Landlord will provide the following
Tenant Improvements hereinafter "LANDLORD'S TENANT IMPROVEMENTS" as
part of the Base Rental rate in accordance with the provisions of the
Work Letter Agreement attached as Exhibit E.
a. New T-bar ceiling.
b. New drop in parabolic light fixtures.
c. New building standard carpet.
d. New paint.
e. Majority open office.
f. Up to twenty new private office/conference rooms with
sidelight glass.
g. Functional HVAC system using existing units, certified by an
HVAC contractor to be in good operating condition with no
known material defects.
h. Window blinds on exterior windows.
i. Lobby upgrades including wallcovering, flooring and lighting.
j. Adequate number (per City code) of clean and sanitary
restroom facilities.
k. All architectural and planning expenses pertaining to the
above.
l. Lunch Room to include fifteen (15) lineal feet of building
standard counter and upper and lower cabinets and plumbing
limited to a working sink with garbage disposal, but
exclusive of any kitchen equipment or other plumbing.
m. Perimeter wall of Computer Room.
To the extent that Tenant is willing to accept the Premises with a
lesser degree of Landlord Tenant Improvements than is represented by
the above list, Landlord will credit Tenant with a $19.60/month rent
reduction for the 5 1/2 year Term for each $1,000 of cost savings to
Landlord.
Any additional Tenant Improvements for upgrades, hard wall
partitioning, cabling, computer room improvements (other than the
perimeter wall), et cetera are to be paid for by Tenant. At Tenant's
request, Landlord will provide additional generic Tenant Improvements
during the initial construction and then amortize the cost thereof into
the Rent over the initial Lease Term.
If not already completed, Tenant will immediately design a preliminary
space plan to be mutually approved by Landlord and Tenant and
incorporated into the Lease. Tenant and Landlord shall mutually agree
on finishes including carpet colors, et cetera.
29. COMMENCEMENT DATE AND EXPIRATION DATE
a. INITIAL PREMISES. The Term of the Lease as to the "Initial
Premises" containing 47,888 rentable square feet as outlined
on the attached Exhibit A shall commence on or about April
16, 1997 and more particularly upon the earlier of (the
"COMMENCEMENT DATE"):
1) Substantial completion of "Landlord's Tenant
Improvements" (which may be subject to completion of
certain "punch list" items) and Landlord or Tenant
having obtained permission to occupy by the City, or
2) Commencement of Tenant's actual move-in of personnel.
Provided, however, Tenant shall be allowed to enter
the Premises no earlier than April 1, 1997, to
install wiring, furniture and equipment, and to work
in the main Computer Room in the Premises no earlier
than March 17, 1997, provided that in either such
case such early occupancy does not delay the
completion of "Landlord's Tenant Improvements".
b. MUST TAKE PREMISES. The Term of the Lease (and the
commencement of Rent) as to the "Must Take Premises"
consisting of 13,500 rentable square feet as outlined on the
attached Exhibit A shall commence
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upon the earlier of: (i) Tenant's actual move in of personnel
to the "Must Take Premises", or (ii) the beginning of the
seventh Lease month (i.e., six (6) months after the actual
Commencement Date of the Lease).
c. EXPIRATION DATE. Regardless of the actual Commencement Date,
the Expiration Date shall be October 15, 2002.
30. SECURITY DEPOSIT: Notwithstanding the provisions of Paragraph 5. of the
Lease, Tenant shall provide a Security Deposit of $445,063.00 which is
equal to five (5) month's Initial Base Rent on the Initial Premises and
Must Take Premises. Commencing with the second Lease year provided
Tenant is not then in default and that Tenant's equity public market
capitalization is then at least $180 million, the amount of the
Security Deposit shall be reduced at the commencement of the following
Lease years so that the Security Deposit is as follows:
SECURITY DEPOSIT =
LEASE YEAR # # MONTHS OF THEN CURRENT RENT
------------ -----------------------------
2 4 Months @ $92,082.00 per Month
3 3 Months @ $95,151.40 per Month
4 2 Months @ $98,220.80 per Month
However, if at any time and from time to time during the Lease Term,
Tenant's equity public market capitalization is less than $180 million,
the amount of the Security Deposit shall be increased within thirty
(30) calendar days thereafter to an amount equal to five (5) months of
then current Rent, subject to Tenant still being able to have the
Security Deposit reduced per the table above if Tenant's equity public
market capitalization is later restored to more than $180 million.
31. OPTION TO RENEW
a. GRANT OF OPTION. Tenant shall have the right, at its option,
to extend the Lease for one (1) period of five (5) years
("EXTENDED TERM") commencing at the expiration of the Initial
Term, provided that at the time of exercise and at the time of
commencement of such Extended Term, Tenant is not in default
under this Lease.
b. EXERCISE OF OPTION. If Tenant decides to extend the Lease for
the Extended Term, Tenant shall give written notice to
Landlord of its election to extend not less than nine (9)
months prior to the expiration of the Initial Term. Tenant's
failure to give timely notice to Landlord of Tenant's election
to extend shall be deemed a waiver of Tenant's right to
extend. The terms and conditions applicable to the Extended
Term shall be the same terms and conditions contained in this
Lease except that Tenant shall not be entitled to any further
option to extend. The Base Rent for the Extended Term shall be
as determined in accordance with Paragraph 31.c.
c. DETERMINATION OF BASE RENT DURING THE EXTENDED TERM.
1) AGREEMENT ON INITIAL BASE RENT. Landlord shall not be
obligated to provide Tenant with the proposed fair
market rental value until eight (8) months prior to
the expiration of the Initial Term. Landlord and
Tenant shall have thirty (30) days after Landlord
provides the proposed fair market rental value in
which to agree on the Initial Base Rent (i.e., the
Base Rent for the first twelve (12) months) during
the Extended Term, which shall be ninety-five percent
(95%) of the fair market rental value of the Premises
during said Extended Term. The fair market rental
value of the Premises during said Extended Term shall
be based on the uses of the Premises permitted under
this Lease, the quality, size, design and location of
the Premises, and the rental value for lease renewals
or extensions of comparable size, quality and
location. If Landlord and Tenant agree on the Initial
Base Rent for the Extended Term during the thirty
(30) day period, they shall immediately execute an
amendment to this Lease stating the new Initial Base
Rent.
2) SELECTION OF APPRAISERS. If Landlord and Tenant are
unable to agree on the Initial Base Rent for the
Extended Term within the thirty (30) day period, then
within ten (10) days after the expiration of the
thirty (30) day period and provided that Tenant has
timely exercised the subject renewal option in
accordance with Paragraph 31.b., Landlord and Tenant
each at its own cost and by giving notice to the
other party, shall appoint a competent and
disinterested real estate appraiser with at least
five (5) years full-time commercial appraisal
experience in the market area to appraise the fair
market rental value of the Premises and set the
Initial Base Rent during said Extended Term. If
either Landlord or Tenant does not appoint an
appraiser within said ten (10) days, the single
appraiser appointed shall be the sole appraiser and
shall set the Initial Base Rent during said Extended
Term. If two (2) appraisers are appointed by Landlord
and Tenant as stated herein, they shall meet promptly
and attempt to set the Initial Base Rent for said
Extended Term. If the two (2) appraisers are unable
to agree within thirty (30) days after the second
appraiser has been appointed, they shall attempt to
select a third appraiser meeting the same
qualifications within ten (10) days after the last
day the two (2) appraisers are given to set the
Initial Base Rent. If they are unable to agree on the
third appraiser, either Landlord or Tenant, by giving
ten (10) days' notice to the other party, can apply
to the then President of the Real Estate Board of
Santa Clara County or to the Presiding Judge of the
Superior Court of Santa Clara County, for the
selection of a third appraiser who meets the
qualifications stated herein. Landlord and Tenant
each shall bear one-half (1/2) of the cost of
appointing the third appraiser and of paying the
third appraiser's fee. The
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third appraiser, however selected, shall be a person
who has not previously acted in any capacity for
either Landlord or Tenant, or their affiliates.
3) VALUE DETERMINED BY THREE (3) APPRAISERS. Within
thirty (30) days after the selection of the third
appraiser, a majority of the appraisers shall set the
Initial Base Rent for the Extended Term. If a
majority of the appraisers are unable to set the
Initial Base Rent within the stipulated period of
time, Landlord's appraiser shall arrange for
simultaneous exchange of written appraisals from each
of the appraisers and the three (3) appraisals shall
be added together and their total divided by three
(3); the resulting quotient shall be the Initial Base
Rent for the Premises during the Extended Term. If,
however, the low appraisal and/or the high appraisal
are/is more than fifteen percent (15%) lower and/or
higher than the middle appraisal, such low appraisal
and/or high appraisal shall be disregarded. If only
one (1) appraisal is disregarded, the remaining two
(2) appraisals shall be added together and their
total divided by two (2); the resulting quotient
shall be the Initial Base Rent for the Premises
during the Extended Term. If both the low appraisal
and the high appraisal are disregarded as stated in
this Paragraph 31.c.3), the middle appraisal shall be
the Initial Base Rent for the Premises during the
Extended Term.
4) MINIMUM INITIAL BASE RENT LEVEL. Notwithstanding any
other provision of this Lease, in no event shall the
Initial Base Rent for the Extended Term be less than
the Base Rent prevailing immediately prior to the
expiration of the Initial Term.
5) ANNUAL INCREASE. The monthly Base Rent for the
Extended Term shall be increased by five cents
($.05) per Rentable Square Foot at the beginning of
each of Lease years 2, 3, 4 and 5 of the Extended
Term.
32. ADDITIONAL POWER. Landlord shall allow Tenant to install, at Tenant's
sole cost, a generator outside of the Building close to the computer
room in a location approved by Landlord, to provide backup power in the
event of a power failure. Landlord shall cooperate with Tenant and the
City of Sunnyvale to complete this item.
33. RIGHT OF FIRST REFUSAL (ROFR). Provided Tenant is not in default during
the Term of the Lease, should Landlord receive an offer from a third
party ("THIRD PARTY OFFER") to lease all or part of the Expansion Area
as outlined on the attached Exhibit A, Landlord shall notify Tenant in
writing of the general business terms of the Third Party Offer and
Tenant shall have the right to lease the space outlined in the Third
Party Offer under the same Rent and Tenant Improvement Allowance terms
thereof, provided Tenant exercise this Right within five (5) business
days from the date of Landlord's notice. The terms and conditions of
the Lease for the Expansion Area (except for Rent and Tenant
Improvement Allowance) shall be the same as the original Lease and be
coterminous with the original Lease or any extension thereof. Tenant's
ROFR shall be subject to rights of then existing tenants.
However, if the term of the Lease as to the Expansion Area is less than
sixty-six (66) months, Landlord shall adjust the Tenant Improvement
Allowance to reflect the shorter amortization term for the Tenant
Improvements.
34. HVAC CAPITAL REPLACEMENTS. Notwithstanding the provisions of Paragraph
12.b., Landlord shall be responsible only during the first two years of
the Term of the Lease at its own cost and without reimbursement from
Tenant, for the replacement of HVAC units as they wear out and for any
"MAJOR HVAC REPAIR" (defined as a single occurrence repair or
replacement costing in excess of $1,500 per unit).
35. NON-DISTURBANCE AGREEMENT. Upon request by Tenant, Landlord shall use
its best efforts to provide a Non- Disturbance Agreement to Tenant from
its Lender(s) on behalf of Tenant.
36. MISCELLANEOUS PROVISIONS.
a. TIME OF ESSENCE. Time is of the essence of each provision of
this Lease.
b. SUCCESSOR. This Lease shall be binding on and inure to the
benefit of the parties and their successors, except as
provided in Paragraph 19.
c. LANDLORD'S CONSENT. Any consent required by Landlord under
this Lease must be granted in writing and may be withheld or
conditioned by Landlord in its sole and absolute discretion
unless otherwise provided.
d. COMMISSIONS. Each party represents that it has not had
dealings with any real estate broker, finder or other person
with respect to this Lease in any manner, except for the
Broker(s) identified in Paragraph 1., who shall be compensated
by Landlord in accordance with the separate agreement between
Landlord and the Broker(s).
e. LITIGATION. If either party commences any litigation against
the other party or files an appeal of a decision arising out
of or in connection with the Lease, the prevailing party shall
be entitled to recover from the other party reasonable
attorneys' fees and costs of suit. If Landlord employs a
collection agency to recover delinquent charges, Tenant agrees
to pay all collection agency and attorneys' fees charged to
Landlord in addition to Rent, late charges, interest and other
sums payable under this Lease.
f. LANDLORD'S SUCCESSORS. In the event of a sale or conveyance by
Landlord of the Building containing the Premises, the same
shall operate to release Landlord from any liability under
this Lease, and in such event Landlord's successor in interest
shall be solely responsible for all obligations of Landlord
under this Lease.
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g. INTERPRETATION. This Lease shall be construed and interpreted
in accordance with the laws of the state in which the Premises
are located. This Lease constitutes the entire agreement
between the parties with respect to the Premises, except for
such guarantees or modifications as may be executed in writing
by the parties from time to time. When required by the context
of this Lease, the singular shall include the plural, and the
masculine shall include the feminine and/or neuter. "Party"
shall mean Landlord or Tenant. If more than one person or
entity constitutes Landlord or Tenant, the obligations imposed
upon that party shall be joint and several. The
enforceability, invalidity or illegality of any provision
shall not render the other provisions unenforceable, invalid
or illegal.
h. AUCTIONS. Tenant shall not conduct, nor permit to be
conducted, either voluntarily or involuntarily, any auction
upon the Premises without first having obtained Landlord's
prior written consent. Notwithstanding anything to the
contrary in this Lease, Landlord shall not be obligated to
exercise any standard of reasonableness in determining whether
to grant such consent.
i. QUIET POSSESSION. Upon payment by Tenant of the Rent for the
Premises and the observance and performance of all of the
covenants, conditions and provisions on Tenant's part to be
observed and performed under this Lease, Tenant shall have
quiet possession of the Premises for the entire Term hereof
subject to all of the provisions of this Lease.
j. CONFLICT. Any conflict between the printed provisions of this
Lease and the typewritten or handwritten provisions shall be
controlled by the typewritten or handwritten provisions.
k. OFFER. Preparation of this Lease by Landlord or Landlord's
agent and submission of same to Tenant shall not be deemed an
offer to lease to Tenant. This Lease is not intended to be
binding until executed by all Parties hereto.
l. AMENDMENTS. This Lease may be modified only in writing, signed
by the Parties in interest at the time of the modification.
The parties shall amend this Lease from time to time to
reflect any adjustments that are made to the Base Rent or
other Rent payable under this Lease. As long as they do not
materially change Tenant's obligations hereunder, Tenant
agrees to make reasonable non-monetary modifications to this
Lease as may be reasonably required by Lender(s) in connection
with the obtaining of normal financing or refinancing of the
property of which the Premises are a part.
m. CONSTRUCTION. The Landlord and Tenant acknowledge that each
has had its counsel review this Lease, and hereby agree that
the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of this Lease or
in any amendments or exhibits hereto.
n. CAPTIONS. Article, section and paragraph captions are not a
part hereof.
o. EXHIBITS. For reference purposes the Exhibits are listed
below:
Exhibit A: The Premises
Exhibit B: The Property
Exhibit C: Rules and Regulations
Exhibit D: Covenants, Conditions and Restrictions
Exhibit E: Work Letter Agreement
LANDLORD: TENANT:
LIMAR REALTY CORP. #8, a California INFOSEEK CORPORATION, a California
corporation corporation
By: /s/ Theodore H. Kruttschnitt By: /s/ Andrew E. Newton
---------------------------- ---------------------------
Theodore H. Kruttschnitt Name: Andrew E. Newton
President Title: V.P. and General Counsel
Date: March 10, 1997 Date: March 10, 1997
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