Exhibit 10.18
[LETTERHEAD]
INHALE
December 6, 1999
Phillip H. Raiser
Harvey E. Chapman, Jr.
Harbor Belmont Associates
800 S. Claremont Street, Suite 201
San Mateo, CA 94402
Re: 260 Harbor Boulevard
Gentlemen:
In connection with the pending Sublease by and between Webvan Group, Inc. as
Sublessor and Inhale Therapeutic Systems, Inc. as Sublessee, for Subleased
Premises of approximately 7,985 rentable square feet located at 260 Harbor
Boulevard, said Sublease to be for the Term commencing on December 1, 1999
and ending on June 30, 2003, (capitalized terms as defined in the Sublease
and/or Master Lease), Sublessee, in order to induce Harbor Belmont Associates,
the Master Lessor, to consent to the Sublease and, specifically, to the Tenant
Improvement Plan (Exhibit B, dated December 2, 1999, to the Sublease) herewith
agrees that all Tenant Improvement work shall be performed by Raiser
Construction Co., Inc. or, at the option of Master Lessor, another general
contractor acceptable to Master Lessor. It is further understood and agreed
that all Tenant Improvements of any kind made to the Subleased Premises
during the Term shall require obtaining applicable building permits.
SUBLESSEE: MASTER LESSOR:
By: /s/ Sharon Reiss-Miller By:
------------------------------- --------------------------------
Name Printed: SHARON REISS-MILLER Name Printed:
--------------------- ----------------------
Its: V.P. OPERATIONS MGMT Its:
------------------------------ -------------------------------
Date: 12/7/99 Date:
----------------------------- ------------------------------
[LETTERHEAD]
December 6, 1999
Ms. Sharon Reiss Miller
INHALE THERAPEUTIC SYSTEMS, INC.
150 Industial Road
San Carlos, CA 94070
RE: 260 HARBOR BOULEVARD
BELMONT, CA
Dear Sharon:
Enclosed is your copy of the fully executed Sublease Agreement by and between
Webvan Group, Inc. (Sublessor) and Inhale Therapeutic Systems, Inc.
(Sublessee) for the property located at 260 Harbor Boulevard, Belmont.
We are excited to have Inhale Therapeutic Systems, Inc. as a tenant at Harbor
Park.
Sincerely,
CB RICHARD ELLIS, INC.
/s/ Bob McSweeney
Robert L. McSweeney
First Vice President
Enclosure
cc: Greg Domanico
SUBLEASE
BY AND BETWEEN
WEBVAN GROUP, INC. AS SUBLESSOR
AND
INHALE THERAPEUTIC SYSTEMS, INC. AS SUBLESSEE
260 HARBOR BOULEVARD
BELMONT, CA
DATED: NOVEMBER 3, 1999
Sublease
11/16/99
Page 1 of 12
TABLE OF CONTENTS
RECITALS 3
Section 1. Sublease. 3
Section 2. Warranty by Sublessor 3
Section 3. Term. 4
Section 4. Rent. 4
Section 5. Security Deposit. 5
Section 6. Use of Premises. 5
Section 7. Assignment and Subletting 6
Section 8. Other Provisions of Sublease 6
Section 9. Hazardous Materials 7
Section 10. Attorney Fees. 8
Section 11. Brokers. 8
Section 12. Notices. 8
Section 13. Successors and Assigns. 9
Section 14. Attornment. 9
Section 15. Entry 9
Section 16. Late Charge and Interest. 9
Section 17. Master Lessor's Performance and Consent 9
Section 18. Entire Agreement. 10
Section 19. Time of Essence. 10
Section 20. Consent by Master Lessor 10
Section 21. Governing Law. 11
Section 22. Purchase of Equipment and Furniture 11
MASTER LESSOR'S CONSENT TO SUBLEASE 11
Sublease
11/16/99
Page 2 of 12
THIS SUBLEASE ("SUBLEASE") dated as of November 3, 1999, is made between
WEBVAN GROUP, INC., a California corporation ("SUBLESSOR"), and INHALE
THERAPEUTIC SYSTEMS, INC., a Delaware corporation ("SUBLESSEE").
RECITALS
A. Sublessor is the lessee under "Standard Form Industrial Net Lease" dated
as of March 20, 1998 (hereinafter, the "MASTER LEASE"), pursuant to which
Harbor Belmont Associates, a California General Partnership ("MASTER
LESSOR") leased to Intelligent Systems for Retail, Inc., (prior name of
Webvan Group, Inc.), a California Corporation, the real property located
in the City of Belmont, County of San Mateo, State of California,
described as 260 Harbor Boulevard (the "MASTER PREMISES").
B. The Master Lease has been amended by the following amendments: Amendment
to Lease dated June 4, 1998; Amendment No. 2 to Lease dated
December 4, 1998; and Amendment No. 3 to Lease dated December 31, 1998.
C. The Master Lease, together with any amendments, are collectively referred
to as the "MASTER LEASE."
D. A copy of the Master Lease and all amendments thereto, with certain
confidential information having been omitted, is attached and
incorporated in this Sublease as Exhibit A.
SECTION 1. SUBLEASE.
Sublessor subleases to Sublessee on the terms and conditions in this Sublease
the following portion of the Master Premises ("SUBLEASED PREMISES"):
Approximately 7,985 rentable square feet of office / R&D space in a building
consisting of approximately 29,425 rentable square feet, which is part of a
Project consisting of 212,000 square feet, of which Sublessee's Percentage
Share is 3.77%.
In addition, Sublessee shall have the right to use all of the parking spaces
allocated to Sublessor pursuant to the original Master Lease, pursuant to the
provisions of Section 8 of the Addendum thereto
The parties hereto acknowledge that Amendments No. 2 and No. 3 to the Master
Lease added additional premises ("ADDITIONAL PREMISES") to the original
Master Premises. These Additional Premises are not included in the Subleased
Premises, nor are the terms and conditions of Amendments No. 2 or No. 3
incorporated into this Sublease.
SECTION 2. WARRANTY BY SUBLESSOR
Sublessor warrants to Sublessee that the Master Lease is in full force and
effect; has not been amended or modified except as expressly set forth in
this Sublease; that neither the Master Lessor nor the Sublessor is now, and
as of the commencement of the Term (defined in this Sublease) of this
Sublease will not be, in default or breach of any of the provisions of the
Master Lease; and that Sublessor has no knowledge of any claim by Master
Lessor that Sublessor is in default or breach of any of the provisions of the
Master Lease. Sublessor agrees to keep the Master Lease in effect during the
entire Term of this Sublease Agreement (subject, however, to any earlier
termination of the Master Lease which is not the fault of the Sublessor), and
to comply with and perform all of Sublessor's obligations under the Master
Lease that Sublessee is not obligated to perform as part of Sublessee's
obligations under this Sublease Agreement.
Sublease
11/16/99
Page 3 of 12
SECTION 3. TERM.
The term of this Sublease (the "TERM") will commence on the later of December
1, 1999 ("COMMENCEMENT DATE"), or when Master Lessor consents to this
Sublease, whichever occurs later, and end on June 30, 2003 ("TERMINATION
DATE"), unless terminated sooner in accordance with the provisions of this
Sublease. If the Term commences on a date other than the Commencement Date,
Sublessor and Sublessee will execute a memorandum setting forth the actual
date of commencement of the Term. Possession of the Subleased Premises
("POSSESSION") will be delivered to Sublessee on the commencement of the
Term. If for any reason Sublessor does not deliver Possession to Sublessee on
the Commencement of the Term, Sublessor will not be subject to any liability
for this failure, the Termination Date will not be extended by the delay, and
the validity of this Sublease will not be impaired. Rent will be abated until
delivery of Possession. However, if Sublessor has not delivered Possession to
Sublessee within thirty (30) days after the Commencement Date, at any time
after that and before delivery of Possession, Sublessee may give written
notice to Sublessor of Sublessee's intention to cancel this Sublease. The
notice will set forth an effective date for the cancellation, which will be
at least ten (10) days after delivery of notice to Sublessor. If Sublessor
delivers Possession to Sublessee on or before this effective date, this
Sublease will remain in full force. If Sublessor fails to deliver Possession
to Sublessee on or before this effective date, this Sublease will be
canceled. Upon cancellation, all consideration previously paid by Sublessee
to Sublessor on account of this Sublease will be returned to Sublessee, this
Sublease will have no further force, and Sublessor will have no further
liability to Sublessee because of this delay or cancellation. If Sublessor
permits Sublessee to take Possession prior to the commencement of the Term,
the early Possession will not advance the Termination Date and will be
subject to the provisions of this Sublease, including, without limitation,
the payment of rent.
SECTION 4. RENT.
(a) BASE RENT. Sublessee will pay to Sublessor as Base Rent, without
deduction, setoff, notice, or demand, at 1241 E. Hillsdale Boulevard,
Suite 210, Foster City, CA 94404, or at any other place Sublessor
designates by notice to Sublessee, the sum of $19,164.00 for Months
1-12 of the Sublease, and thereafter such Base Rent as adjusted
pursuant to subsection (b) below, in advance of the first day of each
month of the Term. Sublessee will pay to Sublessor on execution of this
Sublease the sum of $19,164 as Base Rent for December 1-31, 1999. If the
Term begins or ends on a day other than the first or last day of a
month, the Base Rent for the partial months will be prorated on a per diem
basis.
(b) BASE RENT ADJUSTMENTS: Beginning on the first anniversary of the Sublease
Commencement Date and on each successive anniversary thereafter during the
Sublease Term ("ADJUSTMENT DATE"), Base Rent shall be increased by
one-hundred percent (100%) of the percentage of increase, if any, shown by
the Consumer Price Index for All Urban Consumers, San Francisco Bay Area,
All Items (base years 1982-1984 = 100) ("INDEX"), published by the United
States Department of Labor, Bureau of Labor Statistics, for the month
immediately preceding the Adjustment Date as compared with the Index for
the same month in the immediately preceding calendar year; provided,
however, that Base Rent shall be increased by not less than three percent
(3%) per year nor more than six percent (6%) per year. Sublessor shall
calculate the amount of this increase in Base Rent after the United States
Department of Labor publishes the statistics on which the amount of the
increase will be based. Sublessor shall give written notice of the amount
of the increase, multiplied by the number of installments of rent due
under this Lease since the Adjustment Date. Sublessee shall pay this
amount, together with the monthly rent next becoming due under this
Sublease, and shall thereafter pay the monthly rent due under this
Sublease at this increased rate, which shall constitute Base Rent.
Sublessor's failure to make the required
Sublease
11/16/99
Page 4 of 12
calculations promptly shall not be considered a waiver of
Sublessor's rights to adjust the monthly rent due, nor shall it
affect Sublessee's obligations to pay the increased Base Rent. If
the Index is changed so that the base year differs from that in
effect on the Sublease Commencement Date, the Index shall be
converted in accordance with the conversion factor published by the
United States Department of Labor, Bureau of Labor Statistics. If
the Index is discontinued or revised during the Sublease Term, the
government index or computation with which it is replaced shall be
used to obtain substantially the same result as if the Index had not
been discontinued or revised.
(c) OPERATING COSTS. The parties acknowledge that the Master Lease
requires Sublessor to pay to Master Lessor a portion of the expenses
of operating the project of which the Subleased Premises are a part
(collectively, "OPERATING COSTS"), including, but not limited to,
taxes, utilities, or insurance. During the Term of this Sublease,
Sublessee will pay to Sublessor as additional rent one hundred
percent (100%) of the amounts payable by Sublessor for Operating
Costs incurred during the Term for the Subleased Premises. This
additional rent will be payable as and when Operating Costs are
payable by Sublessor to Master Lessor. If the Master Lease provides
for payment by Sublessor of Operating Costs on the basis of an
estimate, then as and when adjustments between estimated and actual
Operating Costs for the Subleased Premises are made under the Master
Lease, the obligations of Sublessor and Sublessee will be adjusted
in the same manner. If this adjustment occurs after the expiration
or earlier termination of the Term, the obligations of Sublessor and
Sublessee under this Subsection will survive this expiration or
termination. Sublessor will, on request by Sublessee, furnish
Sublessee with copies of all statements submitted by Master Lessor
of the actual or estimated Operating Costs during the Term.
SECTION 5. SECURITY DEPOSIT.
Sublessee will deposit with Sublessor on execution of this Sublease the
sum of Twenty Thousand ($20,000.00) Dollars as security for Sublessee's
faithful performance of Sublessee's obligations under this Sublease
("SECURITY DEPOSIT"). If Sublessee fails to pay rent or other charges
when due under this Sublease, or fails to perform any obligations under
this Sublease, Sublessor may use any portion of the Security Deposit for
the payment of any rent or other amount then due and unpaid, for the
payment of any other sum for which Sublessor may become obligated
because of Sublessee's default or breach, or for any loss sustained by
Sublessor as a result of Sublessee's default or breach. If Sublessor
uses any portion of the Security Deposit, Sublessee will, within ten
(10) days after written demand by Sublessor, restore the Security
Deposit to the full amount originally deposited. Sublessee's failure to
do so will constitute a default under this Sublease. Sublessor will not
be required to keep the Security Deposit separate from its general
accounts, and will have no obligation or liability for payment of
interest on the Security Deposit. If Sublessor assigns its interest in
this Sublease, Sublessor will deliver to its assignee as much of the
Security Deposit as Sublessor then holds. Within ten (10) days after the
Term has expired or Sublessee has vacated the Subleased Premises or any
final adjustment pursuant to Subsection 4(b) of this Sublease has been
made, whichever occurs last, and provided that Sublessee is not then in
default under this Sublease, the Security Deposit, or as much as remains
that has not been applied by Sublessor, will be returned to Sublessee or
to the last assignee, if any, of Sublessee's interest under this
Sublease.
SECTION 6. USE OF PREMISES.
The Subleased Premises will be used and occupied only for office,
administration, marketing, and all related legal uses, all subject to
Master Lessor's approval; and for no other use or purpose.
Sublease
11/16/99
Page 5 of 12
SECTION 7. ASSIGNMENT AND SUBLETTING.
Sublessee will not assign this Sublease or further sublet all or any
part of the Subleased Premises without the prior written consent of
Sublessor (and the consent of Master Lessor, if this is required under
the terms of the Master Lease).
The foregoing notwithstanding, Sublessee shall be entitled to assign or
sublease the Subleased Premises without the consent of Sublessor to any
Affiliated Company of Sublessee, meaning any corporation which controls,
is controlled by, or is under common control with Sublessee, or to any
corporation resulting from a merger or consolidation with Sublessee, or
to any person or entity which acquires all, or substantially all, of the
assets of Sublessee as a going concern, provided that any such assignee
assumes, in full, the obligations of Sublessee under this Sublease
Agreement, and provided further that Sublessee shall not be released
from its obligations under or liabilities arising out of this Sublease
Agreement.
The above provision notwithstanding, Sublessee shall be required to
secure Master Lessor's consent to any subsequent assignment or
subletting to the full extent as required under the Master Lease, whose
terms and provisions are expressly incorporated herein.
SECTION 8. OTHER PROVISIONS OF SUBLEASE.
(a) All applicable terms and conditions of the Master Lease are
incorporated into and made a part of this Sublease as if Sublessor
were the Lessor, Sublessee the lessee, and the Subleased Premises
the Master Premises, except for the following: Section 2; Section 3
(but only to the extent that the Base Rent payable under the Master
Lease differs from the Rent set forth herein); Section 32; Section
38; Section 39; Addendum Sections 1-3, Section 5, Addendum Sections
9-10; Section 11(a); Amendment No. 2 to Lease (in its entirety);
Amendment No. 1 to Lease (except to the extent that such amendment
extended the term of the Master Lease); and Amendment No. 3 to Lease
(in its entirety).
(b) Sublessee assumes and agrees to perform the Lessee's obligations
under the Master Lease during the Term to the extent that these
obligations are applicable to the Subleased Premises. However, the
obligation to pay rent and operating costs to Master Lessor under
the Master Lease will be considered performed by Sublessee to the
extent and in the amount rent and operating costs are paid to
Sublessor in accordance with Section 4 of this Sublease.
(c) Sublessee will not commit or suffer any act or omission that will
violate any of the provisions of the Master Lease. Sublessor will
exercise due diligence in attempting to cause Master Lessor to
perform its obligations under the Master Lease for the benefit of
Sublessee.
(d) If the Master Lease terminates, at the option of Master Lessor, this
Sublease will terminate and the parties will be relieved of any
further liability or obligation under this Sublease. However, if
the Master Lease terminates as a result of a default or breach by
Sublessor or Sublessee under this Sublease or the Master Lease, the
defaulting party will be liable to the nondefaulting party for the
damage suffered as a result of the termination. Regardless, if the
Master Lease gives Sublessor any right to terminate the Master Lease
in the event of the partial or total damage, destruction, or
condemnation of the Master Premises or the building or project of
which the Master Premises are a part, the exercise of this right by
Sublessor will not constitute a default or breach.
(e) If Sublessor fails to cure any default by Sublessor in the
performance of its obligations, covenants and agreements under this
Sublease Agreement, including without limitation Sublessor's
obligation to perform its obligations under the Master Lease, either
within ten (10) days in the case
Sublease
11/16/99
Page 6 of 12
of a payment default under this Sublease Agreement or the Master
Lease, or within thirty (30) days after written notice of such
default from Sublessee in the case of other defaults, Sublessee
shall have the right, but not the obligation, to cure any such
default and to thereafter be reimbursed by Sublessor for the
reasonable costs incurred in effecting such cure and by reason of
such default by Sublessor.
(f) Sublessor shall not amend or otherwise modify the Master Lease in a
manner that would adversely affect the Subleased Premises,
Sublessee's use or occupancy thereof (or its use of the Common
Areas), or Sublessor's or Sublessee's rights or obligations under
this Sublease Agreement without the prior written consent of
Sublessee, which shall not be unreasonably withheld.
(g) Sublessor shall provide to Sublessee, promptly upon receipt thereof,
copies of any notices from the Master Lessor that are relevant to
Sublessee's use or occupancy of the Subleased Premises, the conduct
of Sublessee's business thereon, or Sublessee's rights and
obligations under this Sublease Agreement, including without
limitation copies of any notices stating that Sublessor is in
default of its obligations under the Master Lease.
SECTION 9. HAZARDOUS MATERIALS
(a) USE OF HAZARDOUS MATERIAL. Sublessor has no knowledge of the
presence of any Hazardous Material, as hereinafter defined, in, on
or about the Subleased Premises. Sublessee shall not cause or
permit any Hazardous Material, to be generated, brought onto, used,
stored, or disposed of in or about the Subleased Premises or the
Project by Sublessee or its agents, employees, contractors,
subtenants or invitees ("Sublessee's Hazardous Materials").
Sublessee shall:
(i) Use, store, and dispose of all such Sublessee's Hazardous Material
in strict compliance with all applicable statutes, ordinances, and
regulations in effect during the Sublease Term that relate to
public health and safety and protection of the environment
("ENVIRONMENTAL LAWS"), including but not limited to those
Environmental Laws identified herein; and
(ii) Comply at all times during the Sublease Term with all Environmental
Laws applicable to Sublessee's Hazardous Materials.
(b) INDEMNIFICATION.
(i) Sublessee shall, at Sublessee's sole expense and with counsel
reasonably acceptable to Sublessor, indemnify, defend, and hold
harmless Sublessor and Sublessor's shareholders, directors,
officers, employees, partners, affiliates, and agents with respect
to all losses arising out of or resulting from the release of any
Hazardous Material in or about the Subleased Premises or the
Building, or the violation of any Environmental Law, by Sublessee
or Sublessee's agents, contractors, or invitees.
(ii) Sublessor shall, at Sublessor's sole expense and with counsel
reasonably acceptable to Sublessee, indemnify, defend and hold
harmless Sublessee and Sublessee's shareholders, directors,
officers, employees, partners, affiliates and agents with respect
to all losses arising out of or resulting from any Hazardous
Materials brought onto the Subleased Premises by or at the
direction of Sublessor.
(c) DEFINITION OF "HAZARDOUS MATERIAL." As used in this Sublease, the
term "HAZARDOUS MATERIAL" shall mean any hazardous or toxic
substance, material, or waste that is or becomes regulated by
Sublease
11/16/99
Page 7 of 12
the United States, the State of California, or any local government authority
having jurisdiction over the Building. Hazardous Material includes:
(i) Any "hazardous substance," as that term is defined in the
Comprehensive Environmental Response, Compensation, and Liability Act of
1980 (CERCLA) (42 United States Code sections 9601-9675);
(ii) "Hazardous waste," as that term is defined in the Resource Conservation
and Recovery Act of 1976 (RCRA) (42 United States Code sections
6901-6992k);
(iii) Any pollutant, contaminant, or hazardous, dangerous, or toxic chemical,
material, or substance, within the meaning of any other applicable
federal, state, or local law, regulation, ordinance, or requirement
(including consent decrees and administrative orders imposing liability
or standards of conduct concerning any hazardous, dangerous, or toxic
waste, substance, or material, now or hereafter in effect);
(iv) Petroleum products;
(v) Radioactive material, including any source, special nuclear,
or byproduct material as defined in 42 United States Code
sections 2011-2297g-4;
(vi) Asbestos in any form or condition; and
(viii) Polychlorinated biphenyls (PCBs) and substances or compounds
containing PCBs.
SECTION 10. ATTORNEY FEES.
If either party commences an action against the other in connection with this
Sublease, the prevailing party will be entitled to recover costs of suit and
reasonable attorney fees.
SECTION 11. BROKERS.
Sublessor and Sublessee each warrant that they have not dealt with any real
estate broker in connection with this transaction except for CB Richard Ellis,
representing Sublessor and BT Commercial, representing Sublessee. Sublessor
and Sublessee each agree to indemnify, defend, and hold the other harmless
against any damages incurred as a result of the breach of the warranty
contained in this Sublease.
SECTION 12. NOTICES.
All notices and demands that may be required or permitted by either party to
the other will be in writing. All notices and demands by the Sublessor to
Sublessee will be sent by United States Mail, postage prepaid, addressed to
the Sublessee at the Subleased Premises, and to the address in this Sublease
below, or to any other place that Sublessee may from time to time designate
in a notice to the Sublessor. All notices and demands by the Sublessee to
Sublessor will be sent by United States Mail, postage prepaid, addressed to
the Sublessor at the address in this Sublease, and to any other person or
place that the Sublessor may from time to time designate in a notice to the
Sublessee.
To Sublessor:
Webvan Group, Inc., 1241 E. Hillsdale Blvd., Suite 210, Foster City, CA 94404
ATTENTION: Kim Marlan
Sublease
11/16/99
Page 8 of 12
To Sublessee:
Inhale Therapeutic Systems, Inc., __________________________.
ATTENTION: _______________________________________
SECTION 13. SUCCESSORS AND ASSIGNS.
This Sublease will be binding on and inure to the benefit of the parties to
it, their heirs, executors, administrators, successors in interest, and
assigns.
SECTION 14. ATTORNMENT.
If the Master Lease terminates, Sublessee will, if requested, attorn to
Master Lessor and recognize Master Lessor as Sublessor under this Sublease.
However, Sublessee's obligation to attorn to Master Lessor will be
conditioned on Sublessee's receipt of a nondisturbance agreement.
SECTION 15. ENTRY.
Sublessor reserves the right to enter the Subleased Premises on reasonable
notice to Sublessee to inspect the Subleased Premises or the performance by
Sublessee of the terms and conditions of this Sublease. In an emergency, no
notice will be required for entry.
SECTION 16. LATE CHARGE AND INTEREST.
The late payment of any Rent will cause Sublessor to incur additional costs,
including the cost to maintain in full force the Master Lease, administration
and collection costs, and processing and accounting expenses. If Sublessor
has not received any installment of Rent within five (5) days after that
amount is due, Sublessee will pay five percent (5%) of the delinquent amount,
which is agreed to represent a reasonable estimate of the cost incurred by
Sublessor. In addition, all delinquent amounts will bear interest from the
date the amount was due until paid in full at a rate per annum ("Applicable
Interest Rate") equal to the greater of (a) five percent (5%) per annum plus
the then federal discount rate on advances to member banks in effect at the
Federal Reserve Bank of San Francisco on the 25th day of the month preceding
the date of this Sublease or (b) ten percent (10%). However, in no event will
the Applicable Interest Rate exceed the maximum interest rate permitted by
law that may be charged under these circumstances. Sublessor and Sublessee
recognize that the damage Sublessor will suffer in the event of Sublessee's
failure to pay this amount is difficult to ascertain and that the late charge
and interest are the best estimate of the damage that Sublessor will suffer.
If a late charge becomes payable for any three (3) installments of Rent
within any twelve (12) month period, the Rent will automatically become
payable quarterly in advance.
SECTION 17. MASTER LESSOR'S PERFORMANCE AND CONSENT
(a) Sublessee recognizes that Sublessor is not in a position to provide any
of the utilities or services required or appropriate for the Building or
the Subleased Premises or to perform any of the obligations required of
Master Lessor by the terms of the Master Lease. To the extent that the
provision of any services or the performance of any maintenance or any
other act respecting the Subleased Premises or the Building is the
responsibility of the Master Lessor, (collectively, "MASTER LESSOR
OBLIGATIONS"), upon Sublessee's request, Sublessor shall make reasonable
efforts to cause Master Lessor to perform such Master Lessor Obligations;
provided, however, that in no event shall Sublessor be liable to Sublessee
for any liability, loss or damage whatsoever in
Sublease
11/16/99
Page 9 of 12
the event that Master Lessor should fail to perform the same, nor shall
Sublessee be entitled to withhold that payment of Rent or terminate this
Sublease. It is expressly understood that the services and repairs which
are incorporated herein by reference, including but not limited to the
maintenance of exterior walls, structural portions of the roof,
foundations, walls and floors, driveways, parking areas, and landscaping
will in fact be furnished by Master Lessor and not by Sublessor, except to
the extent otherwise provided in the Master Lease. In addition, Sublessor
shall not be liable for any maintenance, restoration (following casualty
or destruction) or repairs in or to the Building or Premises, other than
its obligation hereunder to use reasonable efforts to cause Master Lessor
to perform its obligations under the Master Lease. With respect to any
maintenance or repair to be performed by Master Lessor respecting the
Subleased Premises, the parties expressly agree that Sublessee shall have
the right to contact Master Lessor directly to cause it to so perform.
Except as otherwise provided herein, Sublessor shall have no other
obligations to Sublessee with respect to the performance of Master Lessor
Obligations.
(b) Sublessor and Sublessee recognize that certain actions Sublessee may wish
to undertake pursuant to this Sublease Agreement will require, in addition
to or in lieu of the consent of Sublessor, the consent of the Master
Lessor. Whenever the consent of the Master Lessor is required under the
Master Lease, and whenever the Master Lessor fails to perform its
obligations under the Master Lease, Sublessor agrees to use its
commercially reasonable, good faith efforts to obtain, at Sublessee's sole
cost and expense, that consent or performance on behalf of Sublessee; and
Sublessee shall cooperate with such efforts.
(c) Subject to Master Lessor's approval, as described below, Sublessor and
Sublessee agree that Sublessee shall have the right to install tenant
improvements in the Subleased Premises in accordance with and subject to
the Tenant Improvement Plan attached hereto as Exhibit B (the "INITIAL
TENANT IMPROVEMENTS") and incorporated herein by this reference. Anything
in this Sublease Agreement to the contrary notwithstanding, it is agreed
and understood by Sublessor and Sublessee (i) that Sublessor shall not
impose any obligation on Sublessee to remove, at the expiration or earlier
termination of the Sublease, the Initial Tenant Improvements, except to
the extent that Master Lessor imposes such an obligation upon Sublessor,
and (ii) that Sublessee's obligation to remove such tenant improvements
shall be only that, if any, imposed by the Master Lessor in accordance
with the Master Lease.
SECTION 18. ENTIRE AGREEMENT.
This Sublease sets forth all the agreements between Sublessor and Sublessee
concerning the Subleased Premises, and there are no other agreements either
oral or written other than as set forth in this Sublease.
SECTION 19. TIME OF ESSENCE.
Time is of the essence in this Sublease.
SECTION 20. CONSENT BY MASTER LESSOR.
THIS SUBLEASE WILL HAVE NO EFFECT UNLESS CONSENTED TO BY MASTER LESSOR WITHIN
10 DAYS AFTER EXECUTION IF CONSENT IS REQUIRED UNDER THE TERMS OF THE MASTER
LEASE.
Sublease
11/16/99
Page 10 of 12
SECTION 21. GOVERNING LAW.
This Sublease will be governed by and construed in accordance with
California law.
SECTION 22. PURCHASE OF EQUIPMENT AND FURNITURE
Sublessee shall, separate and apart from the payment of Rent, purchase
certain furniture belonging to Sublessor presently located on the Subleased
Premises, all of which are listed on attached Exhibit A, for a purchase price
of $30,000.00. Payments in the amount of $10,000 each shall be due on
December 1, 1999, January 1, 2000 and February 1, 2000. The parties expressly
understand and agree that these payments represent compensation for the
purchase of Sublessor's personal property, and do not constitute rent.
IN WITNESS WHEREOF, THE PARTIES HAVE EXECUTED THE SUBLEASE:
SUBLESSEE: SUBLESSOR:
By /s/Stephen L. Hurst By /s/ David S. Rock
-------------------------------- -----------------------------
Name Printed: Stephen L. Hurst Name Printed: David S. Rock
--------------------- ------------------
Its: General Counsel Its: Vice President Real Estate
------------------------------ ---------------------------
Date: 23 November 1999 Date: November 24, 1999
----------------------------- --------------------------
By /s/ Sharron Reiss-Muller By
-------------------------------- -----------------------------
Name Printed: Sharron Reiss-Muller Name Printed:
--------------------- ------------------
Its: V.P. Operations Mgmt Its:
------------------------------ ---------------------------
Date: 11/23/99 Date:
----------------------------- --------------------------
MASTER LESSOR'S CONSENT TO SUBLEASE
The undersigned ("Master Lessor"), Lessor under the Master Lease, consents to
the Sublease without waiver of any restriction in the Master Lease concerning
further assignment or subletting. Master Lessor certifies that, as of the
date of Master Lessor's execution, Sublessor is not in default or breach of
any of the provisions of the Master Lease, and that the Master Lease has not
been amended or modified except as expressly set forth in the Sublease.
Master Lessor hereby consents to the installation of the Initial Tenant
Improvements at the Subleased Premises in accordance with and subject to the
Tenant Improvement Plan attached hereto as Exhibit B and incorporated herein
by this reference. Neither Sublessor nor Sublessee shall have any obligation
to remove, at the expiration or earlier termination of the Sublease, any such
Initial Tenant Improvements.
MASTER LESSOR:
By /s/ Phillip Raiser
--------------------------
Name Printed: Phillip Raiser
---------------
Its General Partner
-------------------------
Date: 12/1/99
-----------------------
Sublease
11/16/99
Page 11 of 12
EXHIBIT A
PERSONAL PROPERTY INVENTORY
DESCRIPTION QUANTITY
- ----------- --------
Corner Desk - 36 x 36 x 25 6
Corner Desk - 36 x 36 x 26 3
Double Ped Return - 25 x 60 6
Conference Reference Table - 36 x 36 1
Conference Table - 42 x 66 1
Solo Side Arm Chairs 24
Opening Bookcases - 12 x 42 x 36 8
Round Table - 42" 2
Driset/Desk Mounted Bookcase - 14 x 36 x 34 2
Steelcase Locking Overhead Bookshelf - 60 x 14 1
Steelcase Panel Leg 1
Free Standing Return Open Shell - 24 x 48 x 29 1
Return w/b-b-f 20' w/o Ped 2
Free Standing Return Worksurface - 30 x 25 6
Free Standing Return Worksurface - 36 x 25 1
Free Standing Return Worksurface - 25 x 42 3
Free Standing Return Worksurface - 48 x 25 4
Free Standing Return Worksurface - 6/6/12 60 x 25 2
Free Standing Return Worksurface - 60 x 25 4
Free Standing Return Worksurface - 36 x 25 7
Panel End Leg - 25" 2
Overhead w/lock 3
Wall Channel 6
Overhead 60" w/lock 1
60" Tack Board 3
Workstations 10
Work stations, conference/training area, reception
PROPERTY NOT INCLUDED:
Approximately 82 Aeron Chairs
Sublease
11/16/99
Page 12 of 12
STANDARD FORM INDUSTRIAL NET LEASE
BASIC LEASE INFORMATION
DATE: March 20, 1998
LESSOR: Harbor Belmont Associates, a California General Partnership
LESSEE: Intelligent Systems for Retail, Inc., a California Corporation
LEASE REFERENCE
PREMISES: 260 Harbor Boulevard, Belmont, CA PARAGRAPH 1
RENTABLE AREA OF PREMISES: Seven Thousand Nine Hundred Eighty-Five sq. ft. PARAGRAPH 1
(7,985 sq. ft.)
TERM COMMENCEMENT: May 15, 1998 PARAGRAPH 2
TERM EXPIRATION: May 31, 2003 PARAGRAPH 2
TENANT IMPROVEMENT ALLOWANCE: $15,000; see addendum PARAGRAPH 2
BASE RENT: $1.55 PARAGRAPH 3
LESSEE'S PERCENTAGE SHARE: 3.77% PARAGRAPH 3
USE: Research and development, administration, office and marketing, and PARAGRAPH 4
all other uses as approved by the City of Belmont
SECURITY DEPOSIT: Twenty Seven Thousand Nine Hundred Forty Seven and PARAGRAPH 32
00/100 Dollars ($27,947.00)
LESSEE'S ADDRESS FOR NOTICES:
1241 Hillsdale Blvd., Suite 203
- -------------------------------
Foster City, CA 94404
- -------------------------------
- ------------------------------- PARAGRAPH 34
LESSOR'S ADDRESS FOR NOTICES:
800 SOUTH CLAREMONT AVENUE
SAN MATEO, CA 94402 PARAGRAPH 34
EXHIBIT(S) AND ADDENDUM: PARAGRAPH 41
EXHIBIT A - DIAGRAM OF PREMISES
Addendum to Lease
THE PROVISIONS OF THE LEASE IDENTIFIED ABOVE ARE THOSE PROVISIONS WHERE
REFERENCES TO PARTICULAR BASIC LEASE INFORMATION APPEAR. EACH SUCH REFERENCE
SHALL INCORPORATE THE APPLICABLE BASIC LEASE INFORMATION. IN THE EVENT OF ANY
CONFLICT BETWEEN ANY BASIC LEASE INFORMATION AND THE LEASE, THE LATTER SHALL
CONTROL.
LESSEE: Intelligent Systems for Retail, LESSOR: Harbor Belmont Associates,
Inc., a California Corporation a California General Partnership
By /s/ Louis H. Borders By /s/ Phillip Raiser
------------------------------------ --------------------------------
Louis H. Borders
Its President Its General Partner
----------------------------------- -------------------------------
STANDARD FORM INDUSTRIAL NET LEASE
TABLE OF CONTENTS
Page
1. The Premises.................................................. 1
2. Term; Initial Tenant Improvements............................. 1
3. Rental........................................................ 1
4. Use........................................................... 2
5. Services and Utilities........................................ 2
6. Other Taxes and Charges Payable by Lessee..................... 2
7. Alterations and Additions..................................... 2
8. Liens......................................................... 2
9. Maintenance and Repairs....................................... 3
10. Destruction or Damage......................................... 3
11. Insurance..................................................... 3
12. Waiver of Subrogation......................................... 3
13. Indemnification............................................... 3
14. Compliance with Legal Requirements............................ 3
15. Assignment and Subletting..................................... 3
16. Rules......................................................... 4
17. Entry by Lessor............................................... 4
18. Events of Default............................................. 4
19. Termination Upon Default...................................... 5
20. Continuation After Default.................................... 5
21. Other Relief.................................................. 5
22. Lessor's Right to Cure Defaults............................... 5
23. Attorneys' Fees............................................... 5
24. Eminent Domain................................................ 5
25. Subordination................................................. 5
26. No Merger..................................................... 5
27. Sale.......................................................... 5
28. Estoppel Certificate.......................................... 5
29. No Light, Air, or View Easement............................... 5
30. Holding Over.................................................. 5
31. Abandonment................................................... 5
32. Security Deposit.............................................. 5
33. Waiver........................................................ 6
34. Notices....................................................... 6
35. Complete Agreement............................................ 6
36. Corporate Authority........................................... 6
37. Miscellaneous................................................. 6
38. Limitations of Lessor's Liability............................. 6
39. Brokerage Commissions......................................... 6
40. Parking....................................................... 6
41. Exhibits and Addendum......................................... 6
Rules and Regulations
Exhibit(s) and Addendum
STANDARD FORM INDUSTRIAL NET LEASE
THIS LEASE, dated March 20, 1998 for purposes of reference only, is made
and entered into by and between Harbor Belmont Associates, a California
General Partnership ("Lessor") and Intelligent Systems for Retail, Inc.,
a California Corporation ("Lessee").
1. THE PREMISES: Lessor hereby leases to Lessee and Lessee hereby leases
from Lessor the premises (the "premises"), designated on the floor plan
attached hereto as Exhibit A, comprising 7985 rentable square feet
located in unit 260 in Building A of Harbor Park, located at 300 Harbor
Boulevard in Belmont, California for the term and subject to the
covenants and conditions hereinafter set forth, to each and all of which
Lessor and Lessee hereby mutually agree.
2. TERM; INITIAL TENANT IMPROVEMENTS: (a) The term of this Lease shall
commence and, unless sooner terminated as hereinafter provided, shall
end on the dates respectively specified in the Basic Lease information.
If Lessor, for any reason whatsoever, cannot deliver possession of the
premises to Lessee at the commencement of said term as above specified,
this Lease shall not be void or voidable, nor shall Lessor be liable to
Lessee for any loss or damage resulting therefrom, but in that event
rental shall be waived for the period between the commencement of said
term and the time when Lessor can deliver possession. No delay of
possession shall operate to extend the term hereof commensurately.
(b) Prior to the commencement of the term, Lessee shall complete the
Tenant improvements to be constructed or installed in the premises
pursuant to ADDENDUM attached hereto (the "Tenant Improvements"). SEE
ADDENDUM [ILLEGIBLE].
(c) Lessor shall pay the cost of the Tenant improvements up to the sum
specified in the Basic Lease information as the Tenant Improvement
Allowance and all other Tenant Improvement Costs shall be paid by
Lessee, as provided in the Addendum [ILLEGIBLE].
(d) In the event Lessor permits Lessee to occupy the premises prior to
the commencement date of the term, such occupancy shall be subject to
all provisions of this Lease. See Addendum paragraph 3
3. RENTAL: (a) Base Rent. Lessee shall pay to Lessor throughout the term
of the Lease as rental for the premises the sum specified in the Basic
Lease information as the Base Rent, subject to the following adjustment:
See Addendum paragraph 1
(b) LESSEE'S PERCENTAGE SHARE OF OPERATING EXPENSES AND PROPERTY TAXES.
Lessee shall pay to Lessor throughout the term hereof as additional
rental Lessee's Percentage Share of Operating Expenses and Property
Taxes.
(1) The term "Operating Expenses" shall mean (1) all costs of
management, operation and maintenance of the Project including,
without limitation, wages, salaries, fringe benefits and payroll
burden of employees, maintenance, guard, security and other
services, Project office rent or rental value, water and waste
disposal for the Project, janitorial services, gas, electricity
and other utilities for the Building and Project common areas,
materials and supplies, maintenance and repairs, landscaping,
insurance, depreciation on personal property, and (2) the cost of
any capital improvements made to the Project by Lessor that are
anticipated to reduce other Operating Expenses or made to the
Project by Lessor that are required under any governmental law or
regulation, such cost or allocable portion thereof to be amortized
over such reasonable period as Lessor shall determine together
with interest on the unamortized balance at the reference rate
from time to time announced by the Bank of America, San Francisco
main office, plus 2% per annum or such higher rate as may have
been paid by Lessor on funds borrowed for the purpose of
constructing such capital improvements; provided, however, that
Operating Expenses shall not include Property Taxes, depreciation
on the buildings in the Project, costs of tenants' improvements in
excess of tenant standard, real estate brokers' commissions,
interest and capital items other than those referred to in clause
(2) above and any expense to the extent Lessor receives direct
reimbursement by tenants, insurers or other third parties. Actual
Operating Expenses for calendar year shall be adjusted to equal
Lessor's reasonable estimate of Operating Expenses had 100% of the
rentable area of the Project been occupied.
(2) The term "Property Taxes" shall mean all real property taxes
and personal property taxes, licenses, charges and assessments
which are levied, assessed or imposed by any governmental or
quasi-governmental authority, improvement or assessment district
with respect to the Project or any other fixtures, improvements,
equipment or other property of Lessor, real or personal, located
in the Project and used in connection with the operation thereof,
whether or not now customary or within the contemplation of the
parties hereto, including, without limitation, any taxes, charges
or assessments for public improvements, services or benefits,
irrespective of when commenced or completed, transit fees, housing
funds, education funds, street, highway or traffic fees, as well
as any tax which shall be levied or assessed in addition to or in
lieu of such taxes, any charge upon Lessor's business of leasing of
the Project (unless included in paragraph 6) and any costs or
expenses of contesting any such taxes, licenses, charges or
assessments, but excluding any federal or state income or gift tax
or any franchise, capital stock, estate or inheritance taxes. In
the event that it shall not be lawful for Lessee to reimburse
Lessor for Lessee's percentage share of any Property Tax, as
defined herein, the rent payable to Lessor under this Lease shall
be revised to yield to Lessor the same net rent from the premises
after imposition of any such tax upon Lessor as would have been
received by Lessor hereunder prior to the imposition of any such
tax.
(3) The term "Lessee's Percentage Share" shall mean the
percentage figure specified in the Basic Lease information. Lessor
and Lessee acknowledge that Lessee's percentage share has been
obtained by dividing the net rentable area of the premises,
specified in the Basic Lease information, by the total net
rentable area in the Project, which Lessor and Lessee agree is
212,000 square feet, and multiplying such quotient by 100. In the
event Lessor's Percentage Share is changed during a calendar
year by reason of a change in the net rentable area of the
premises, Lessee's Percentage Share shall thereafter mean the
result obtained by dividing the new net rentable area of the
premises by 212,000 square feet and multiplying such quotient by
100, and for the purposes of section 3, Lessee's Percentage Share
shall be determined on the basis of the number of days during such
calendar year at each such Percentage Share.
(4) Prior to the commencement of the term hereof, and in December
of each subsequent calendar year, or as soon thereafter as
practicable, Lessor shall give Lessee written notice of its
estimate of Lessee's Percentage Share of Operating Expenses and
Property Taxes. On or before the first day of each month during
the ensuing calendar year, Lessee shall pay to Lessor 1/12 of such
estimated amounts, provided that if such notice is not given in
December, Lessee shall continue to pay on the basis of the then
applicable rental until the month after such notice is given. If at
any time or times it
INDUSTRIAL NET LEASE
INITIAL HERE:
[ILLEGIBLE]
--------------------
Page 1
appears to Lessor that the amounts payable under this paragraph (b)
for the current calendar year will vary from its estimate by more
than 5%. Lessor may, by notice to Lessee, revise its estimate for
such year, and subsequent payments by Lessee for such year shall be
based upon such revised estimate.
(5) Within 90 days after the close of each calendar year or as soon
after such 90-day period as practicable, Lessor shall deliver to
Lessee a statement of actual Property Taxes and Operating Expenses
for such calendar year. If, on the basis of such statement, Lessee
owes an amount that is less than the estimated payments for such
calendar year previously made by Lessee, Lessor shall credit such
excess against the next payment of rental due from Lessee
hereunder, or, if at the end of the term hereof, if no payments are
due from Lessee, Lessor shall pay the excess to Lessee within 30
days after the statement is delivered. If on the basis of such
statement Lessee owes an amount that is more than the estimated
payments for such calendar year previously made by Lessee, Lessee
shall pay the deficiency to Lessor within 30 days after delivery of
the statement. The obligation of Lessor and Lessee to make the
reconciling payments referred to in this paragraph (s) shall
survive the termination of this Lease. The payments to be made
pursuant to this paragraph (b) for partial years at the beginning or
end of the term hereof shall be prorated on the basis which the number
of days from the commencement of such calendar year to and including
such termination date bears to 365.
(c) Rental shall be paid to Lessor on or before the first day of the
term hereof and on or before the first day of each and every successive
calendar month thereafter during the term hereof. In the event the term
of this Lease commences on a day other than the first day of a calendar
month or ends on a day other than the last day of a calendar month, then
the monthly rental for the first and last fractional months of the term
hereof shall be appropriately prorated.
(d) Lessee hereby acknowledges that late payment by Lessee to Lessor of
rent and other sums due hereunder after the expiration of any applicable
grace period will cause Lessor to incur costs not contemplated by this
Lease, the exact amount of which will be extremely difficult to
ascertain. Such costs include, but are not limited to, processing and
accounting charges, and late charges which may be imposed on Lessor by
the terms of any mortgage or trust deed covering the premises.
Accordingly, if any installment of rent or any other sums due from
Lessee shall not be received by Lessor when due or if a grace period is
applicable, prior to the expiration of the grace period, Lessee shall pay
to Lessor a late charge equal to 6% of such overdue amount. The
parties hereby agree that such late charge represents a fair and
reasonable estimate of the costs Lessor will incur by reason of late
payment by Lessee. Acceptance of such late charge by Lessor shall in no
event constitute a waiver of Lessee's default with respect to such
overdue amount, nor prevent Lessor from exercising any of the other
rights and remedies available to Lessor hereunder or at law.
(e) Rental and all other payments to be made by Lessee hereunder shall
be paid to Lessor without deduction or offset, in lawful money of the
United States of America at Lessor's address for notices hereunder or to
such other person or at such other place as Lessor may from time to time
designate in writing.
(f) All sums of money or charges required to be paid by Lessee
hereunder shall be deemed rental for the premises and may be designated
in as such any statutory notice to pay rent or quit the premises.
4. USE: The premises shall be used for the purpose set forth in the Basic
Lease information and no other and shall be continuously occupied by
Lessee. Lessee shall not do or permit to be done in or about the
premises, nor bring or keep or permit to be brought or kept therein,
anything which is prohibited by or will in any way conflict with any
law, statute, ordinance or governmental rule or regulation now in force
or which may hereafter be enacted or promulgated, or which is prohibited
by the standard form of fire insurance policy, or will in any way
increase the existing rate of or affect any fire or other insurance upon
the Building or any of its contents, or cause a cancellation of any
insurance policy covering the Building or any part thereof or any of its
contents. Lessee shall not do or permit anything to be done in or about
the premises which will in any way obstruct or interfere with the rights
of other tenants of the Building, or injure or annoy them, or use or
allow the premises to be used for any improper, immoral, unlawful or
objectionable purpose, nor shall Lessee cause, maintain or permit any
nuisance in, on or about the premises or commit or suffer to be
committed any waste in, on or about the premises.
5. SERVICES AND UTILITIES: Lessee shall pay for all gas, electricity,
heat, cooling energy, telephone, janitorial service, water, waste
disposal, refuse collection and other utility-type services furnished to
Lessee or the premises, together with all related installation or
connection charges or deposits. Lessor shall designate which of the
above utilities shall be separately metered to the premises, and, as to
such utilities, Lessee shall pay the cost of the metering and shall
contract directly with and shall directly pay the provider of such
services. Lessor reserves the right at any time or from time to time
during the term of the Lease to require any of the above utilities to be
separately metered to the premises, at Lessee's expense, or any of the
above services to be contracted for directly by Lessee. Lessor shall
furnish the premises with any of the above services and utilities not
designated by Lessor for direct contracting or metering and the expense
thereof shall be included in Operating Expenses, of which Lessee shall
pay its Percentage Share pursuant to paragraph 3(b), provided that
Lessee shall promptly reimburse Lessor upon demand for the cost of such
utilities or services used on the premises in excess of the average
level of such services consumed by other tenants of the Building or the
Project. Lessor shall not be liable in damages, consequential or
otherwise, nor shall there be any rent abatement, arising out of any
interruption whatsoever in utility services which is due to fire,
accident, strike, governmental authority, acts of God, or other causes
beyond the reasonable control of Lessor or any temporary interruption
in such service which is necessary to the making of alterations,
repairs, or improvements to Building or the Project or any part of it.
6. OTHER TAXES AND CHARGES PAYABLE BY LESSEE: In addition to the monthly
rental and other charges to be paid by Lessee hereunder. Lessee shall
pay or reimburse Lessor for any and all of the following, whether or not
now customary or in the contemplation of the parties hereto: taxes
(other than local, state and federal personal or corporate income taxes
measured by the net income of Lessor from all sources), assessments
(including, without limitation, all assessments for public improvements,
services or benefits, irrespective of when commenced or completed),
excises, levies, business taxes, license, permit, inspection and other
authorization fees, transit development fees, assessments or charges for
housing funds, service payments in lieu of taxes and any other fees or
charges of any kind, which are levied, assessed, confirmed or imposed by
any public authority: (a) upon, measured by or reasonably attributable to
the cost or value of Lessee's equipment, furniture, fixtures and other
personal property located in the premises or by the cost of any leasehold
improvements made in or to the premises by or for Lessee, regardless of
whether title to such improvements shall be in Lessee or Lessor; (b) upon
or measured by the monthly rental or other charges payable hereunder,
including, without limitation, any gross income tax or excise tax levied
by the City and County of San Francisco, the State of California, the
Federal Government or any other governmental body with respect to the
receipt of such rental; (c) upon, with respect to or by reason of the
development, possession, leasing, operation, management, maintenance,
alteration, repair, use or occupancy by Lessee of the premises or any
portion thereof; (d) upon this transaction or any document to which
Lessee is a party creating or transferring an interest or an estate in the
premises. In the event that it shall not be lawful for Lessee so to
reimburse Lessor, the monthly rental payable to Lessor under this Lease
shall be revised to net Lessor the same net rental after imposition of
any such tax or other charge upon Lessor as would have been payable to
Lessor prior to the imposition of any such tax or other charge.
7. ALTERATIONS AND ADDITIONS: Lessee shall not make or suffer to be made
any alterations, additions or improvements to or of the premises or any
part thereof or attach any fixtures to the premises without first
obtaining the written consent of Lessor. Any alterations, additions or
improvements to the premises, including, but not limited to, wall
covering, paneling and built-in cabinet work, (but excepting movable
furniture and trade fixtures, which may be removed at the end of the
Lease term provided their removal will not cause material damage to the
premises and the Lessee posts reasonable security with Lessor to pay for
any repair costs caused by such removal) shall, on the expiration of the
term, become a part of the realty and belong to Lessor and shall be
surrendered with the premises. Lessee shall submit detailed
specifications and floor plans and necessary permits (if applicable)
with respect to any requested alterations or improvements to Lessor for
review. Lessor may require reasonable changes to such specifications or
plans as a condition to giving its consent. In no event shall any
alterations or improvements affect the structure of the Building or its
facade. Any work consented to by Lessor hereunder shall be done at
Lessee's expense and shall be performed either by Lessor a contractor or
by contractors approved by Lessor, as Lessor may elect. In addition, as
a condition to its consent, Lessor shall be entitled to request
adequate assurance that all contractors who will perform such work have
in force workmen's compensation and such other employee and public
liability insurance as Lessor deems necessary to supplement the
insurance coverage provided below. In case of material alterations,
additions, improvements, Lessor may require Lessee or its contractors to
post adequate completion and performance bonds.
8. LIENS: Lessee shall keep the premises and the Building free from any
liens arising out of any work performed, materials furnished or
obligations incurred by Lessee. Lessor shall have the right to post and
keep posted on the premises any notices that may be provided by law or
which Lessor may deem to be proper for the protection of Lessor, the
premises and the Building from such liens.
INDUSTRIAL NET LEASE
INITIAL HERE:
[ILLEGIBLE]
--------------------
Page 2
9. MAINTENANCE AND REPAIRS: See Addendum, paragraph 4 Lessee shall, at all
times during the term hereof and at Lessee's sole cost and expense, keep
the premises and every part thereof in good condition and repair, ordinary
wear and tear, damage thereto by fire, earthquake, act of God or the
elements excepted, Lessee hereby waiving all rights to make repairs at the
expense of Lessor or in lieu thereof to vacate the premises as provided by
California Civil Code Section 1942 or any other law, statute or
ordinance now or hereafter in effect. Lessee shall at the end of the
term hereof surrender to Lessor the premises and all alterations,
additions and improvements thereto in the same condition as when
received, ordinary wear and tear and damage by fire, earthquake, act of
God or the elements excepted. Lessor has no obligation and has made no
promise to alter, remodel, improve, repair, decorate or paint the
premises or any part thereof, except as specifically herein set forth.
No representations respecting the condition of the premises or the
Building have been made by Lessor to Lessee, except as specifically
herein set forth.
Lessor shall have the right to require Lessee to replace, or reimburse
Lessor for replacement of, all plate glass, including windows, in or
upon the premises or in the Building which may be damaged or broken by
Lessee, its employees, agents, guests or invitees.
(b) Lessor shall maintain the roof, exterior walls and foundation of the
Building, driveways, parking areas and landscaping for exterior common
areas in the Project, in reasonably good order and condition except for
damaged caused by the act of Lessee, its agents, employees, guests, or
invitees, which damage shall be repaired at Lessee's expense by Lessor
or Lessee, as Lessor may elect.
10. DESTRUCTION OR DAMAGE: (a) In the event the premises or the portion of
the Building necessary for Lessee's occupancy are damaged by fire,
earthquake, act of God, the elements or other casualty, Lessor shall
forthwith repair the same, subject to the provisions of this section
hereinafter set forth, if such repairs can, in Lessor's opinion, be made
within 90 days and if insurance proceeds are available to pay the cost
thereof. This Lease shall remain in full force and effect except that,
if such damage is not the result of the negligence or willful misconduct
of Lessee or Lessee's employees or invitees, an abatement of rental
shall be allowed Lessee for such part of the premises as shall be
rendered unusable by Lessee in the conduct of its business during the
time such part is so unusable. See Addendum, paragraph 6
(b) If such repairs cannot, in Lessor's opinion, be made within 90 days,
or if sufficient insurance proceeds are unavailable, Lessor may elect,
upon notice to Lessee within 30 days after the date of such fire or
other casualty, to repair or restore such damage, in which event this
Lease shall continue in full force and effect, but the rent shall be
partially abated as hereinabove in this section provided. If Lessor does
not so elect to make such repairs, this Lease shall terminate as of the
date of such fire or other casualty.
(c) A total destruction of the Building shall automatically terminate
this Lease. Lessee waives California Civil Code Sections 1932(2) and
1933(4) providing for termination of hiring upon destruction of the
thing hired.
(d) If the premises are to be repaired under this section, Lessor shall
repair at its cost any injury or damage to the Building itself and all
leasehold improvements in the premises other than tenant improvements
made by or for Lessee. Lessee shall pay the cost of repairing any tenant
improvements made by or for Lessee and the cost of repairs or replacing
Lessee's fixtures and personal property in the premises.
11. INSURANCE: Lessee shall obtain and maintain during the term of this
Lease comprehensive general liability insurance with a combined single
limit for personal injury and property damage in an amount not less than
$1,000,000, and employer's liability and worker's compensation insurance
as required by law. If Lessee's insurance contains a split limit of
liability the liability limit shall be not less than $1,000,000 for
bodily injury and $300,000 for property damage. Such insurance policy
shall also specifically cover Lessee's indemnity obligations set forth
in paragraph 13. Lessee's comprehensive general liability insurance
policy shall (1) provide that (i) it may not be cancelled or altered in
such a manner as adversely to affect the coverage afforded thereby
without 30 days' prior written notice to Lessor, (ii) Lessor is named as
additional insured, (iii) such insurance is primary with respect to
Lessor and any entity managing the Building and that any other insurance
maintained by Lessor or such management company is excess and
noncontributing with such insurance, (2) contain a cross-liability
endorsement or a severability of interest clause (3) contain a waiver of
subrogation as provided in paragraph 12; (4) provide for blanket
contractual coverage, broad form property damage coverage and products
completed operations coverage (where applicable); and (6) afford
coverage for all claims based on acts, omissions, injury or damage which
occurred or arose (or the onset of which occurred or arose) in whole
or in part during the policy period. Lessee shall insure the full
replacement cost of all personal property and fixtures of tenant and all
improvements made by or for tenant to the premises. All insurance to be
provided by Lessee shall be provided by a carrier or carriers rated
"A-ix" in Best's Insurance Guide or shall otherwise be satisfactory to
Lessor. If, in the opinion of Lessor's insurance advisor, based on a
substantial increase in recovered liability claims generally, the
specified amounts of coverage are no longer adequate, such coverage
shall be appropriately increased. Prior to the commencement of the term,
a duplicate of such policy or a certificate thereof shall be delivered to
Lessor for retention by it. If Lessee fails to obtain such insurance or to
furnish Lessor any such duplicate policy or certificate as herein required,
Lessor may, at its election, without notice to Lessee and without any
obligation so to do, procure and maintain such coverage and Lessee shall
reimburse Lessor on demand as additional rent for any premium so paid by
Lessor. See Addendum, paragraph 10
12. WAIVER OF SUBROGATION: To the extent of insurance proceeds received with
respect to the loss, Lessor and Lessee each hereby waive any right of
recovery against the other party for any loss or damage maintained by
such other party with respect to the Building or the premises or any
portion thereof or any contents thereof or any operation therein whether
or not such loss is caused by the fault or negligence of such
other party. Lessee and Lessor shall each obtain from its insurers under
all policies of insurance maintained by it at any time during the term
hereof in connection with Building, the premises, the contents or
operations therein, a waiver of all rights of subrogation which the
insurer of one party might have against the other party.
13. INDEMNIFICATION: Lessee shall hold Lessor harmless from any damage to
any property or injury to or death of any person arising from the
use of the premises or the Building by Lessee, its agents, employees,
contractors and invitees, except such as is caused solely by the gross
negligence or willful act of Lessor. The foregoing indemnity obligation
of Lessee shall include reasonable attorneys' fees, investigation costs
and all other reasonable costs and expenses incurred by Lessor from the
first notice that any claim or demand is to be made or may be made. The
provisions of this section 13 shall survive the termination of this
Lease with respect to any damage, injury or death occurring prior to
such termination.
14. COMPLIANCE WITH LEGAL REQUIREMENTS: Lessee shall at its sole cost and
expense promptly comply with all laws, statutes, ordinances and
governmental rules, regulations or requirements now in force or which
may hereafter be in force, with the requirements of any board of fire
underwriters or other similar body now or hereafter constituted, with
any direction or occupancy certificate issued pursuant to any law by any
public officer or officers, as well as the provisions of all recorded
documents affecting the premises, insofar as any thereof relate to or
affect the condition, use or occupancy of the premises.
15. ASSIGNMENT AND SUBLETTING: (a) Lessee shall not, without the prior written
consent of Lessor, assign this Lease or any interest herein, sublet the
premises or any part thereof, permit the use or occupancy of the
premises by any person other than Lessee, or hypothecate this Lease or
any interest herein. Any of the foregoing acts without such consent
shall be void and shall, at the option of Lessor, constitute a
default that shall entitle Lessor to terminate this Lease. This Lease
shall not, nor shall any interest herein, be assignable as to the interest
of Lessee involuntarily or by operation of law without the prior written
consent of Lessor. Any transfer of more than 50% of Lessee's stock, or
of a majority of general partnership interests in Lessee shall
constitute a prohibited assignment under this Section 15. See Addendum,
paragraph 11.
INDUSTRIAL NET LEASE
INITIAL HERE:
[ILLEGIBLE]
--------------------
Page 3
(c) Lessor's consent to a proposed assignment or sublet shall not be
unreasonably withheld. Without limiting the other instances in which it
may be reasonable for Lessor to withhold its consent to an assignment or
subletting. Lessor and Lessee acknowledge that it shall be reasonable
for Lessor to withhold its consent in the following instances:
(1) the proposed assignee or sublessee is a governmental agency;
(2) in Lessor's reasonable judgment, the use of the premises by the
proposed assignee or sublessee would entail any alterations which
would lessen the value of the leasehold improvements in the premises,
or would require increased services by Lessor;
(3) in Lessor's reasonable judgment, the financial worth of the
proposed assignee or sublessee does not meet the credit standards
applied by Lessor for other tenants under leases with comparable
terms;
(4) in Lessor's reasonable judgment the character, reputation or
business of the proposed assignee or sublessee is not consistent with
the quality of the other tenancies in the Building or the Project;
(5) Lessor has received from any prior lessor to the proposed assignee
or subtenant a negative report concerning such prior lessor's
experience with the proposed assignee or subtenant;
(6) Lessor has experienced previous defaults by or is in litigation
with the proposed assignee or subtenant;
(7) in Lessor's reasonable judgment, the premises, or the relevant
part thereof, will be used in a manner that will violate any negative
covenant as to use contained in any other lease of space in the
Building or the Project;
(8) the used of the premises by the proposed assignee or subtenant
will violate any applicable law, ordinance or regulation;
(9) the proposed assignment or sublease will create a vacancy
elsewhere in the Building or the Project;
(11) the proposed assignment or sublease fails to include all of the
terms and provisions required to be included therein pursuant to this
paragraph 15;
(12) Lessee is in default of any obligation of Lessee under this
lease, or Lessee has defaulted under this Lease on three (3) or more
occasions during the twelve (12) months preceding the date that
Lessee shall request consent; or
(13) in the case of a subletting of less than the entire premises, if
the subletting would result in the division of the premises into more
than two subparcels or would require access to be provided through
space leased or held for lease to another tenant or improvements to
be made outside of the premises.
(d) In the case of an assignment one half of any sums or other economic
consideration received by Lessor as compensation for its leasehold interest
as a result of such assignment shall be paid to Lessor after first
deducting the unamortized cost of leasehold improvements paid for by
Lessee, and the cost of any real estate commissions incurred in connection
with such assignment. In the case of a subletting one half of any sum or
economic consideration received by Lessee as compensation for its leasehold
interest as a result of such subletting shall be paid to Lessor after first
deducting (1) the rental due hereunder, prorated to reflect only rental
allocable to the sublet portion of the premises, and (2) the cost of any
real estate commissions incurred in connection with such subletting,
amortized over the term of the sublease. Upon Lessor's request Lessee
shall assign to Lessor one half of all amounts to be paid to Lessee by any
such subtenant or assignee and shall direct such subtenant or assignee to
pay the same directly to Lessor.
(e) Lessee agrees that the instrument by which any assignment or subletting
consented to by Lessor is accomplished shall expressly provide that the
assignee or subtenant will perform and observe all the agreements,
covenants, conditions and provisions to be performed and observed by Lessee
under this Lease as and when performance and observance is due, that no
assignee or subtenant shall have the further right to assign or sublet, and
that Lessor shall have the right to enforce such agreements, covenants,
conditions and provisions directly against such assignee or subtenant.
Consent by Lessor to an assignment or subletting shall not release Lessee
from any of Lessee's obligations hereunder and shall not be deemed to be a
consent to any subsequent transfer, assignment or subletting. Lessee shall
in all cases remain responsible for the performance by any subtenant or
assignee as indicated thereon of all such agreements, covenants, conditions
and provisions. Any assignment or subletting without an instrument
containing the foregoing provision shall be void and shall, at the option
of Lessor, constitute a default that entitles Lessor to terminate this
Lease.
(f) In the event Lessee shall assign or sublet the premises or request the
consent of Lessor to any assignment or subletting then Lessee shall pay
Lessor's reasonable attorney's fees incurred in connection therewith.
16. RULES: Lessee shall faithfully observe and comply with the rules and
regulations annexed to this Lease and, after notice thereof, all reasonable
modifications thereof and additions thereto from time to time promulgated
in writing by Lessor, Lessor shall not be responsible to Lessee for the
nonperformance by any other tenant or occupant of the Building of any said
rules and regulations.
17. ENTRY BY LESSOR: Lessor may enter the premises at reasonable hours and
(except in emergencies) upon 24 hours prior notice to (a) inspect the same,
(b) exhibit the same to prospective purchases, lenders or tenants, (c)
determine whether Lessee is complying with all its obligations hereunder,
(d) supply janitor service and any other service to be provided by Lessor
to Lessee hereunder, (e) post notices of nonresponsibility, and (f) make
repairs required of Lessor under the terms hereof or repairs to any
adjoining space or utility services or make repairs, alterations or
improvements to any other portion of the Building; provided, however, that
all such work shall be done as promptly as reasonably possible and so as
to cause as little interference to Lessee as reasonably possible. Lessee
hereby waives any claims for damages for any injury or inconvenience to or
interference with Lessee's business, any loss of occupancy or quiet
enjoyment of the premises or any other loss occasioned by such entry.
Lessor shall at all times have and retain a key with which to unlock all
of the doors in, on or about the premises (excluding Lessee's vaults, sales
and similar areas designated in writing by Lessee in advance); and Lessor
shall have the right to use any and all means which Lessor may deem proper
to open said doors in an emergency in order to obtain entry to the
premises, and any entry to the premises obtained by Lessor by any of said
means, or otherwise, shall not under any circumstances be construed or
deemed to be a forcible or unlawful entry into or a detainer of the
premises or as eviction, actual or constructive, of Lessee from the
premises, or any portion thereof.
18. EVENTS OF DEFAULT: The occurrence of any one or more of the following
events ("Events of Default") shall constitute a breach of this Lease by
Lessee: (a) if Lessee shall fail to pay any rental when and as the same
becomes due and payable; or (b) if Lessee shall fail to pay any other sum
when and as the same becomes due and payable and such failure shall
continue for more that 10 days; or (c) if Lessee shall fail to perform or
observe any other term hereof or of the rules and regulations described in
section 16 to be performed or observed by Lessee, such failure shall
continue for more than 30 days after notice therefore from Lessor, and
Lessee shall not within such period commence with due diligence and
dispatch the curing of such default, or, having so commenced, shall
thereafter fail or neglect to prosecute or complete with due diligence
and dispatch the curing of such default; (d) if Lessee shall make a
general assignment for the benefit of creditors, shall become insolvent
or shall admit in writing its inability to pay its debts as they become
due or shall file a petition in bankruptcy, or shall be adjudicated as
bankrupt or insolvent, or shall file a petition in any proceeding seeking
any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any present or future statute, law or
regulation, or shall file an answer admitting or fail timely to contest
the material allegations of a petition filed against it in any such
proceeding, or shall seek or consent to or acquiesce in the appointment of
any trustee, receiver or liquidator of Lessee or any material part of its
properties; or (e) if within 90 days after the commencement of any
proceeding against Lessee seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief
under any present or future statute, law or regulation, such proceeding
shall not have been dismissed, or if, within 90 days after the appointment
without the consent is acquiescence of Lessee, of any trustee, receiver
or liquidator of Lessee or of any material part of its properties, such
appointment shall not have been vacated; or (f) if this Lease or any
estate of Lessee hereunder shall be levied upon under any attachment
or execution and such attachment or execution is not vacated within 10
days.
INDUSTRIAL NET LEASE
INITIAL HERE:
[ILLEGIBLE]
--------------------
Page 4
19. TERMINATION UPON DEFAULT: (a) If an Event of Default shall occur, Lessor
at any time thereafter may give a written termination notice to Lessee,
and on the date specified in such notice Lessee's right to possession
shall terminate and this Lease shall terminate, unless on or before
such date all arrears of rental and all other sums payable by Lessee
under this Lease and all costs and expenses incurred by or on behalf of
Lessor hereunder shall have been paid by Lessee and all other breaches
of this Lease by Lessee at the time existing shall have been fully
remedied to the satisfaction of Lessor. Upon such termination, Lessor
may recover from Lessee: (a) the worth at the time of award of the
unpaid rental which had been earned at the time of termination; (b) the
worth at the time of award of the amount by which the unpaid rental
which would have been earned after termination until the time of award
exceeds the amount of such rental loss that Lessee proves could have
been reasonably avoided; (c) the worth at the time of award of the
amount by which the unpaid rental for the balance of the term of this
Lease after the time of award exceeds the amount of such rental loss
that Lessee proves could be reasonably avoided; and (d) any other amount
necessary to compensate Lessor for all the detriment proximately caused
by Lessee's failure to perform its obligations under this Lease or which
in the ordinary course of things would be likely to result therefrom.
The "worth at the time of award" of the amounts referred to in clauses
(a) and (b) above is computed by allowing interest at the rate of 10%
per annum or, if a higher rate is legally permissible, at the highest
rate legally permitted. The "worth at the time of award" of the amount
referred to in clause (c) above is computed by discounting such amount
at the discount rate of the Federal Reserve Bank of San Francisco at the
time of award plus 1%.
(b) Lessee hereby waives all right now or hereafter existing to redeem
the premises after termination pursuant to this Paragraph 19 or by order
or judgment of any court or by any legal process.
20. CONTINUATION AFTER DEFAULT: Even though Lessee has breached this Lease
and abandoned the premises, this Lease shall continue in effect for so
long as Lessor does not terminate Lessee's right to possession, and
Lessor may enforce all its rights and remedies under this Lease,
including the right to recover the rental as it becomes due under this
Lease. Acts of maintenance or preservation or efforts to relet the
premises or the appointment of a receiver upon initiative of Lessor to
protect Lessor's interest under this Lease shall not constitute a
termination of Lessee's right to possession.
21. OTHER RELIEF: The remedies provided for in this Lease shall be
cumulative and are in addition to any other remedies available to Lessor
at law or in equity by statute or otherwise.
22. LESSOR'S RIGHT TO CURE DEFAULTS. All agreements and provisions to be
performed by Lessee under any of the terms of this Lease shall be at its
sole cost and expense and without any abatement of rental. If Lessee
shall fail to pay any sum of money, other than rental, required to be
paid by it hereunder or shall fail to perform any other act on its part
to be performed hereunder and such failure shall continue for 30 days
after notice thereof by Lessor, Lessor may, but shall not be obligated
so to do, and without waiving or releasing Lessee from any obligations
of Lessee, make any such payment or perform any such other act on
Lessee's part to be made or performed as in this Lease provided. All
sums so paid by Lessor and all necessary incidental costs shall be
deemed additional rent hereunder and shall be payable to Lessor on
demand, and Lessor shall have (in addition to any other right or remedy
of Lessor) the same rights and remedies in the event of the nonpayment
thereof by Lessee as in the case of default by Lessee in the payment of
rental.
23. ATTORNEYS' FEES: If as a result of any breach or default in the
performance of any of the provisions of this Lease, Lessor uses the
services of an attorney in order to secure compliance with such
provisions or recover damages therefor, or to terminate this Lease or
evict Lessee, Lessee shall reimburse Lessor upon demand for any and all
attorneys' fees and expenses so incurred by Lessor, provided that if
Lessee shall be the prevailing party in any legal action brought by
Lessor against Lessee, Lessee shall be entitled to recover for the fees
of its attorneys in such amount as the court may adjudge reasonable.
24. EMINENT DOMAIN: If all or any part of the premises shall be taken as a
result of the exercise of the power of eminent domain, this Lease shall
terminate as to the part so taken as of the date of taking, and, in the
case of a partial taking, either Lessor or Lessee shall have the right
to terminate this Lease as to the balance of the premises by written
notice to the other within 30 days after such date, provided, however,
that a condition to the exercise by Lessee of such right to terminate
shall be that the portion of the premises taken shall be of such extent
and nature as substantially to handicap, impede or impair Lessee's use
of the balance of the premises. In the event of any taking, Lessor shall
be entitled to any and all compensation, damages, income, rent, awards,
or any interest therein whatsoever which may be paid or made in
connection therewith, and Lessee shall have no claim against Lessor for
the value of any unexpired term of this Lease or otherwise. In the event
of a partial taking of the premises which does not result in a
termination of this Lease, the monthly rental thereafter to be paid
shall be equitably reduced.
25. SUBORDINATION: This Lease shall be subject and subordinated at all times
to (1) all ground or underlying leases now existing or which may
hereafter be executed affecting the Building, and (2) the lien of all
mortgages and deeds of trust in any amount or amounts whatsoever now or
hereafter placed on or against the Building, the Project or on or
against Lessor's interest or estate therein or on or against all such
ground or underlying leases, all without the necessity of having further
instruments executed on the part of Lessee to effectuate such
subordination. Lessee agrees to execute and deliver upon demand such
further instruments evidencing such subordination of this Lease to said
deed, to such ground or underlying leases, and to the lien of any such
mortgages or deeds of trust as may reasonably be required by Lessor.
26. NO MERGER: The voluntary or other surrender of this Lease by Lessee, or
a mutual cancellation thereof, shall not work a merger, and shall, at
the option of Lessor terminate all or any existing subleases or
subtenancies, or may, at the option of Lessor, operate as an assignment
to it of any or all such subleases or subtenancies.
27. SALE: In the event the original Lessor hereunder, or any successor owner
of the Building, shall sell or convey the Building, all liabilities and
obligations on the part of the original Lessor, or such successor owner,
under this Lease accruing thereafter shall terminate, and thereupon all
such liabilities and obligations shall be binding upon the new owner.
Lessee agrees to attorn to such new owner.
28. ESTOPPEL CERTIFICATE: At any time and from time to time but on not less
than 10 days prior written request by Lessor, Lessee will execute,
acknowledge and deliver to Lessor, promptly upon request, a certificate
certifying (a) that this Lease is unmodified and in full force and
effect (or, if there have been modifications, that this Lease is in full
force and effect, as modified, and stating the date and nature of each
modification), (b) the date, if any, to which rental and other sums
payable hereunder have been paid, (c) that no notice has been received
by Lessee of any default which has not been cured, except as to defaults
specified in said certificate, and (d) such other matters as may be
reasonably requested by Lessor. Any such certificates may be relied upon
by a prospective purchaser, mortgagee or beneficiary under any deed of
trust on the Building or any part thereof.
29. NO LIGHT, AIR OR VIEW EASEMENT: Any diminution or shutting off of light,
air or view by any structure which may be erected on lands adjacent to
the Building shall in no way affect this Lease or impose any liability
on Lessor.
30. HOLDING OVER: If, without objection by Lessor, Lessee holds possession
of the premises after expiration of the term of this Lease, Lessee shall
become a tenant from month to month upon the terms herein specified but
at a monthly rental equivalent to 200% of the then prevailing monthly
rental paid by Lessee at the expiration of the term of this Lease,
payable in advance on or before the first day of each month. Each party
shall give the other notice at least one month prior to the date of
termination of such monthly tenancy of its intention to terminate such
tenancy.
31. ABANDONMENT: If Lessee shall abandon or surrender the premises, or be
dispossessed by process of law or otherwise, any personal property
belonging to Lessee and left on the premises shall be deemed to be
abandoned, at the option of Lessor, except such property as may be
mortgaged to Lessor.
32. SECURITY DEPOSIT: Lessee has deposited with Lessor the sum specified in
the Basic Lease information (the "deposit"). The deposit shall be held
by Lessor as security for the faithful performance by Lessee of all of
the provisions of this Lease to be performed or observed by Lessee. If
Lessee fails to pay rent or other charges due hereunder, or otherwise
defaults with respect to any provision of this Lease, Lessor may use,
apply or retain all or any portion of the deposit for the payment of any
rent or other charge in default or for the payment of any other sum to
which Lessor may become obligated by reason of Lessee a default, or to
compensate Lessor for any loss or damage which Lessor may suffer
thereby. If Lessor so uses or applies all or any portion of the deposit,
Lessee shall within 10 days after demand therefor deposit cash with
Lessor in an amount sufficient to restore the deposit to the full amount
thereof and Lessee's failure to do so shall be a material breach of this
Lease. Lessor shall not be required to keep the deposit separate from
its general accounts. If Lessee performs all of Lessee's obligations
hereunder, the deposit, or so much thereof as has not theretofore been
applied by Lessor, shall be returned, without payment of interest or
other increment for its use, to Lessee (or, at Lessor's option, to the
last assignee, if any, of Lessee's interest
INDUSTRIAL NET LEASE
INITIAL HERE:
[ILLEGIBLE]
--------------------
Page 5
hereunder) at the expiration of the term hereof, and after Lessee has
vacated the premises. No trust relationship is created herein between
Lessor and Lessee with respect to the deposit.
33. WAIVER: The waiver by Lessor of any agreement, condition or provision
herein contained shall not be deemed to be a waiver of any subsequent
breach of the same or any other agreement, condition or provision
herein contained, nor shall any custom or practice which may grow up
between the parties in the administration of the terms hereof be
construed to waive or to lessen the right of Lessor to insist upon the
performance by Lessee in strict accordance with said terms. The
subsequent acceptance of rental hereunder by Lessor shall not be deemed
to be a waiver of any preceding breach by Lessee of any agreement,
condition or provision of this Lease, other than the failure of Lessee to
pay the particular rental so accepted, regardless of Lessor's knowledge
of such preceding breach at the time of acceptance of such rental.
34. NOTICES: All notices and demands which may be or are required to be
given by either party to the other hereunder shall be in writing and
shall be deemed to have been fully given when deposited in the United
States mail, certified or registered, postage prepaid, and addressed as
follows: to Lessee at the address specified in the Basic Lease
Information, or to such other place as Lessee may from time to time
designate in a notice to Lessor: to Lessor at the address secified in
the Basic Lease information, or to such other place as Lessor may from
time to time designate in a notice to Lessee; or, in the case of Lessee,
delivered to Lessee at the premises. Lessee hereby appoints as its agent
to receive the service of all dispossessory or distraint proceedings and
notices thereunder the person in charge of or occupying the premises at
the time, and, if no person shall be in charge of or occupying the same,
then such service may be made by attaching the same on the main entrance
of the premises.
35. COMPLETE AGREEMENT: There are no oral agreements between Lessor and
Lessee affecting this Lease, and this Lease supersedes and cancels any
and all previous negotiations, arrangements, brochures, agreements and
understandings, if any, between Lessor and Lessee or displayed by Lessor
to Lessee with respect to the subject matter of this Lease or the
Building. There are no representations between Lessor and Lessee other
than those contained in this Lease and all reliance with respect to any
representations is solely upon such representations.
36. CORPORATE AUTHORITY: If Lessee signs as a corporation, each of the
persons executing this Lease on behalf of Lessee does hereby convenant
and warrant that Lessee is a duly authorized and existing corporation,
that Lessee has and is qualified to do business in California, that the
Corporation has full right and authority to enter into this Lease, and that
each and both of the persons signing on behalf of the corporation were
authorized to do so.
37. MISCELLANEOUS: The words "Lessor" and "Lessee" as used herein shall
include the plural as well as the singular. If there be more than one
Lessee, the obligations hereunder imposed upon Lessee shall be joint and
several. Time is of the essence of this Lease and each and all of its
provisions. Submission of this instrument for examination or signature by
Lessee does not constitute a reservation of or option for lease, and it is
not effective as a lease or otherwise until execution and delivery by both
Lessor and Lessee. The agreements, conditions and provisions herein
contained shall, subject to the provisions as to assignment, apply to and
bind the heirs, executors, administrators, successors and assigns of the
parties hereto. If any provision of this Lease shall be determined to
be illegal or unenforceable, such determination shall not affect any other
provision of this Lease and all such other provisions shall remain in full
force and effect. This Lease shall be governed by and construed pursuant
to the laws or the State of California.
38. LIMITATIONS OF LESSOR'S LIABILITY: Lessor shall not be responsible for
or liable to Lessee ane Lessee hereby waives all claims against Lessor
for any injury, loss or damage to any person or property in or about the
premises by or from any cause whatsoever (other than Lessor's gross
negligence or willful misconduct) including, without limitation, acts or
omissions of persons occupying adjoining premises or any part of the
Building adjacent to or connected with the premises; theft; burst,
stopped or leaking water, gas, sewer or steam pipes; or gas, fire, oil
or electricity in, on or about the premises or the Building. The
liability of Lessor under this Lease shall be and is hereby limited to
Lessor's interest in the Building, and no other assets of Lessor shall be
affected by reason of any liability which Lessor may have to Lessee or to
any other person by reason of this Lease.
39. BROKERAGE COMMISSIONS: Lessee represents and warrants that it has dealt
with no broker, agent or other person in connection with this transaction
other than CB COMMERCIAL REAL ESTATE GROUP, INC and Lessee agrees to
indemnify and hold Lessor harmless from and against any claims by any
other broker, agent or other person claiming a commission or other form
of compensation by virtue of having dealt with Lessee with regard to
this leasing transaction. The provisions of this paragraph shall survive
the termination of this Lease.
40. PARKING: Lessee shall have the non-exclusive right to park in common
with other tenants in the Project in the Project parking facilities
provided by Lessor for tenants subject to Lessor's right to alter,
modify, reduce or change the location of such parking facilities. Lessee
agrees not to overburden the parking facilities and agrees to cooperate
with Lessor and other lessees in the use of the parking facilities.
Lessor reserves the right to determine whether the parking facilities are
becoming crowded and, in such event, to allocate parking spaces among
Lessee and other lessees or to otherwise limit the number of parking
spaces available for use by Lessee and its employees and invitees.
SEE ADDENDUM, PARAGRAPH 8.
41. EXHIBITS AND ADDENDUM: The exhibits and addendums hereto are a part of
this Lease and are incorporated herein by this reference.
IN WITNESS WHEREOF, the parties have executed this Lease as of the date
first written above.
LESSEE: Intelligent Systems for LESSOR: Harbor Belmont Associates,
Retail, Inc., a California a California General Partnership
corporation
By /s/ Louis H. Borders By /s/ Phillip Raisen
------------------------------ ---------------------------------
Louis H. Borders
Its President/CEO Its General Partner
--------------------------- -----------------------------
42. Lessor will furnish each Lessee free of charge with two (2) keys to
each door lock in the premises. Lessor shall require payment of a $10.00
($5.00 of which is refundable upon return of keys) deposit for each key
provided to Lessee. No Lessee shall have any keys made. No Lessee shall
alter any lock or install a new or additional lock or any bolt on any
door of its premises without the prior written consent of Lessor. Lessee
shall in each case furnish Lessor with a key for any such lock. Each
Lessee, upon the termination of its tenancy, shall deliver to Lessor all
keys to doors in the building which shall have been furnished to Lessee.
INDUSTRIAL NET LEASE
INITIAL HERE:
[ILLEGIBLE]
--------------------
Page 6
ADDENDUM TO LEASE
BETWEEN
HARBOR BELMONT ASSOCIATES, AS LESSOR,
AND
INTELLIGENT SYSTEMS FOR RETAIL, INC., AS LESSEE
260 HARBOR BOULEVARD, BELMONT, CALIFORNIA
1. BASE RENT SCHEDULE. Lessee shall pay to Lessor base monthly
rental according to the following schedule:
Months 01-12 $ per sq. ft. NNN $ 00 per month
Months 13-24 $ per sq. ft. NNN $ 00 per month
Months 25-36 $ per sq. ft. NNN $ 00 per month
Months 37-48 $ per sq. ft. NNN $ 00 per month
Months 49-60 $ per sq. ft. NNN $ 00 per month
2. CURRENT ESTIMATE OF OPERATING EXPENSES AND PROPERTY TAXES.
Lessor and Lessee acknowledge and agree that Lessee's estimated Percentage
Share of Operating Expenses and Property Taxes for calendar year 1998 is
20 CENTS per square foot per month, based on Lessor's current estimate of
such Operating Expenses and Property Taxes, provided that Lessee and Lessor
acknowledge that such amount is an estimate only, and is subject to change in
accordance with the terms of paragraph 3 of the Lease.
3. EARLY OCCUPANCY. Lessee shall be entitled to occupy the
Premises prior to the Commencement Date upon mutual execution and delivery of
the Lease, subject to the provisions of paragraph 2(d) of the Lease;
provided, however, that during such period of occupancy prior to the
Commencement Date, no Base Rent, or Lessee's Percentage Share of Operating
Expenses and Property Taxes shall be due or payable by Lessee. Without
limiting the provisions of paragraph 2(d) of the Lease, Lessee acknowledges
that it shall be responsible for the cost of gas, electricity, and any other
utilities metered separately to its Premises, and for the maintenance of
insurance in accordance with the requirements of the Lease during the early
occupancy period.
4. CONDITION OF PREMISES. Lessor, at its sole expense, shall
deliver the Premises to Lessee clean and free of debris on the Commencement
Date (other than any condition caused by Lessee in connection with its early
occupancy of the Premises).
(a) Lessor warrants to Lessee that, as of the
Commencement Date, all of the fixtures and equipment in the men's and women's
restrooms are complete and operable, and in good and working condition,
including without
-1-
limitation, all exhaust and supply HVAC, lighting, water heaters, partitions,
doors and fixtures;
(b) Lessor further warrants to Lessee that all
electrical, HVAC, plumbing, fire sprinkler, and lighting equipment and
equipment, fixtures and systems, and loading doors, if any, existing in the
Premises as of the date of this Lease, shall be in good operating condition
as of the Commencement Date, and shall not be subject to deferred maintenance
or in need of immediate replacement.
(c) If non-compliance with any of the warranties set
forth above exists as of the Commencement Date, then Lessor shall, except as
otherwise provided in the Lease, rectify the same at Lessor's expense,
promptly after receipt of written notice from Lessee setting forth with
specificity the nature and extent of such non-compliance. Notwithstanding
the foregoing, if Lessee does not give Lessor written notice of
non-compliance with any of the warranties set forth above within sixty (60)
days after the Commencement Date, then the above warranties shall be of no
force and effect, and correction of any such noncompliance shall be the
obligation of Lessee at Lessee's sole cost and expense. Notwithstanding
anything to the contrary above, Lessor shall have no obligation for any
failure of the above warranties due to the acts of Lessee, its agents,
employees or contractors.
5. INITIAL TENANT IMPROVEMENTS.
(a) Lessor shall provide Lessee with a $15,000.00 tenant
improvement allowance (the "Tenant Improvement Allowance"). All additional
costs of tenant improvements shall be paid by Lessee. All tenant improvement
work shall be made in accordance with paragraph 7 of the Lease, provided that
all such improvement work shall be performed by Lessor's contractor, Raiser
Construction Company. Lessee shall enter into a general construction contract
with Raiser Construction Company on terms to be mutually agreed by Lessee and
Raiser Construction Company. Lessor agrees that Raiser Construction Company
shall solicit competitive bids from subcontractors for all major trades, and
shall disclose all such bid to Lessee. The Tenant Improvement Allowance
shall be paid to Raiser Construction Company upon completion of the tenant
improvements in reduction of the sum owed by Lessee to Raiser Construction
Company under its construction contract.
(b) Notwithstanding any other provision of the Lease to
the contrary, Lessee shall not be required to remove its initial tenant
improvements from the Premises at the expiration or termination of the Lease,
and such improvements shall become the sole property of Lessor.
-2-
6. DESTRUCTION OR DAMAGE. Paragraph 10 of the Lease is modified
by the addition of the following provision at the end of subparagraph (b):
If such repairs cannot, in Lessor's reasonable opinion, be
made within 180 days after the date of such fire or other
casualty, then Lessor shall notify Lessee, and Lessee shall
have the right, by notice given to Lessor within 30 days
after receipt of Lessor's notice, to terminate this Lease
effective as of the date of such fire or other casualty.
7. SIGNAGE. Lessor shall allow, at Lessee's sole cost and
expense, the installation of signage on the Building consistent with Harbor
Park's current signage program and subject to the approval of Lessor and the
City of Belmont.
8. PARKING.
(a) Lessee shall have a total of nineteen (19) reserved
parking stalls free of additional charge throughout the term of this Lease.
Thirteen (13) of said spaces shall face Harbor Boulevard, three (3) shall be
located at the front entrance of the Premises, and three (3) shall be near
the back roll-up doors. Lessor shall, at its sole cost and expense, have such
space as marked for Lessee's exclusive use.
(b) In addition to the parking spaces set forth in
Subparagraph (a) above, Lessee shall be entitled to the nonexclusive use in
common with other tenants of the Property of five (5) unreserved parking
spaces in the Harbor Park parking area.
9. ADDITIONAL DEPOSIT. In addition to the Security Deposit
described in the Basic Lease Information, Lessee shall, upon execution of
this Lease, deliver to Lessor the additional sum of $49,348.00 in cash as
additional security for this Lease (the "Additional Deposit"). Provided that
Lessee is not in default and has met all of its obligations under the Lease,
Lessor shall apply said Additional Deposit to the rental obligations coming
due in the beginning of the second, thirteenth, twenty-fifth and
thirty-seventh month of the Lease Term.
10. LESSOR'S INSURANCE. Lessor shall maintain throughout the
term of this Lease casualty insurance with respect to the Premises in an
amount and with coverages at least equivalent to insurance customarily
carried by comparable owners of comparable industrial property in the City of
Belmont, California, provided that in no event shall Lessor be required to
carry earthquake or flood insurance. Lessor's costs in connection with
such insurance are included in the Operating Expenses as set forth in
paragraph 3(b) of the Lease.
-3-
11. ASSIGNMENT AND SUBLETTING.
(a) Notwithstanding the provisions of paragraphs 15(a)
through (c) of the Lease, Lessee shall have the right, without the consent
of Lessor, to assign the Lease to a franchisee of Lessee, or any entity
controlled by or under common control with the Lessee, or to a corporation
with which Lessee has merged or consolidated. In such event the provisions
of paragraphs 15(a) through (d) of the Lease shall not apply. Any such
assignment shall conform to the provisions of paragraphs (d) and (f) of the
Lease, and Lessee shall notify Lessor of such assignment prior to the
execution thereof, and shall deliver to Lessor a copy of such assignment
and any other documents evidencing such assignment. In the event of any
assignment contemplated hereby, Lessee shall remain fully liable for all
obligations of Lessee under the Lease.
(b) Paragraph 15(b) of the Lease is hereby amended in
its entirety to read as follows:
"(b) Before entering into any sublease or
assignment of this Lease for all or part of the premises,
Lessee shall deliver to Lessor a letter of intent executed by
Lessee and the proposed sublessee or assignee, specifying
the terms of the intended sublease or assignment. For a
period of thirty (30) days after such letter of intent is
delivered to Lessor, Lessor shall have the right by written
notice to Lessee to recapture the premises or port[illegible]
there of, as fol[illegible] (1) in the case of a proposed
sublease, either (A) sublet from Lessee any portion of the
premises proposed to be sublet for the term for which such
portion is proposed to be sublet but at the same rent as
Lessee is required to pay to Lessor under this Lease for
the same space, computed on a pro-rata square foot basis, or
(B) if the proposed subletting is for substantially the
remaining period of the term of this Lease, terminate this
Lease as it pertains to the portion of the premises so
proposed by Lessee to be sublet, or (ii) in the case of a
proposed assignment, terminate this Lease. Lessor may, if
it elects, enter into a new lease covering the recaptured
premises or portion thereof with any intended assignee or
subtenant on such terms as Lessor and such person may agree,
or enter into a new lease covering the premises or a portion
thereof with any other person. In the event that Lessor
exercises its rights to recapture set forth herein, Lessee
shall not be entitled to any portion of the profit, if any,
which Lessor may realize on account of such recapture,
termination and
-4-
reletting; however, Lessee shall be entitled to recover from
Lessor the unamortized actual costs of all Initial Tenant
Improvements (less the Tenant Improvements Allowance),
as well as any additional permanent improvements installed
by Lessee during the initial one hundred twenty (120) days
of the Lease. Lessor's exercise of its aforesaid option
shall not be construed to impose any liability upon
Lessor with respect to any real estate brokerage
commissions or any other costs or expenses incurred by
Lessee in connection with its proposed subletting or
assignment."
12. WARRANTY OF AUTHORITY. Each individual executing this Lease
on behalf of Lessor and Lessee represents and warrants that he or she is
authorized to execute and deliver this Lease on its behalf, and to bind said
Lessor and Lessee, as applicable.
-5-
HARBOR PARK, BELMONT
[FLOOR PLAN]
260 HARBOR BLVD.
EXHIBIT A
AMENDMENT NO. ONE TO LEASE
INTELLIGENT SYSTEMS FOR RETAIL, INC.
This Amendment, dated June 4, 1998, is by and between Harbor Belmont
Associates ("Lessor") and Intelligent Systems for Retail, Inc. ("Lessee").
Lessor and Lessee entered into a lease agreement dated March 20, 1998 (the
"Lease") for the Premises known as 260 Harbor Boulevard, Belmont, California.
Such Lease is hereby amended as follows:
LEASE COMMENCEMENT DATE: June 15, 1998
LEASE TERMINATION DATE: June 30, 2003
COST OF IMPROVEMENTS:
It is hereby agreed that the total cost of the Initial Tenant Improvements
shall be $287,207.00 according to the estimate from Raiser Construction Co.,
Inc. dated May 29, 1998. Lessee's net cost for the Initial Tenant
Improvements is $272,207.00 after the deduction of Lessor's Tenant
Improvement Allowance of $15,000.00.
Simultaneously with the execution of this Amendment No. One to Lease, Lessee
shall deposit the sum of $99,999.04 with Raiser Construction Co., Inc., which
amount shall be credited against the contract for the Initial Tenant
Improvements as earned during the course of construction. All other terms and
conditions of the Lease shall remain unchanged.
AGREED & ACCEPTED:
LESSOR: Harbor Belmont Associates LESSEE: Intelligent Systems for Retail, Inc.
/s/ Phillip [illegible] /s/ David A. [illegible]
- ----------------------- ------------------------
AS AGENT FOR THE TRUST, Vice President, Retail
GENERAL PARTNER
Date: 6/4/98 Date: 6/4/84
------ ------
AMENDMENT NO. TWO TO LEASE
HARBOR BELMONT ASSOCIATES AS LESSOR AND
INTELLIGENT SYSTEMS FOR RETAIL, INC. AS LESSEE
PROPERTY ADDRESS
260 HARBOR BOULEVARD, BELMONT, CALIFORNIA
AMENDMENT DATE (FOR REFERENCE PURPOSES): DECEMBER 4, 1998
This Amendment is incorporated into and made a part of that certain lease
dated March 20, 1998 as described above, as amended by Amendment No. 1 to
Lease dated June 4, 1998 (collectively, the "Lease"). In the event of any
conflict between the terms of the lease and the terms of this Amendment, the
terms of this Amendment shall prevail, as to the Additional Premises only. All
capitalized terms not otherwise defined herein shall have the meaning set forth
in the Lease.
1. ADDITIONAL PREMISES: Lessee hereby leases from Lessor, and Lessor leases
to Lessee, as Additional Premises, those premises located at 498 Harbor
Boulevard in Belmont, California (the "Additional Premises") designated
on the floor plan attached hereto as Exhibit B, comprising 2,475 rentable
square feet. The provisions of this Lease Amendment apply only to the
Additional Premises. No terms or conditions of this Second Addendum shall
be deemed to alter or affect the original terms of the Lease, except as
the same apply to the Additional Premises and except as expressly set forth
herein.
2. TERM APPLICABLE TO ADDITIONAL PREMISES ONLY: The Term of the lease of
the Additional Premises shall commence on December 1, 1998 (the
"Additional Premises Commencement Date") and, unless sooner terminated as
provided in the Lease, shall end on November 30, 2000 (the "Additional
Premises Termination Date").
3. BASE RENTAL SCHEDULE APPLICABLE TO ADDITIONAL PREMISES ONLY: Lessee
shall pay as monthly Base Rent for the Additional Premises the following
sums:
Months 1-12: $ per sq. ft NNN - $ per month
Months 13-24: $ per sq. ft NNN - $ per month
4. EARLY OCCUPANCY: Lessee shall be entitled to occupy the Additional
Premises prior to the Commencement Date upon mutual execution and
delivery of this Lease Amendment, subject to the provisions of paragraph
3 of the Addendum to Lease.
5. CONDITION OF PREMISES; WARRANTIES: Lessor shall deliver the Premise to
Lessee clean and free of debris on the Commencement Date, in good and
operating condition and repair as more fully set forth in paragraph 4 of
the Addendum to Lease. Except as expressly set forth in this paragraph
5, Lessee accepts the Premises "as is," and Lessor has no obligation to
repair, alter or improve the Additional Premises.
Addendum to Lease
Rev. 12/02/98
Page 1 of 2
6. INITIAL TENANT IMPROVEMENTS: Lessee shall construct its Initial Tenant
Improvements for the Additional Premises, consisting of HVAC and other
non-structural improvements, at Lessee's sole cost and expense, subject
to Lessor's prior written approval thereof, which shall not be
unreasonably withheld or delayed. Lessor shall provide no tenant
improvement allowance for the Additional Premises. Lessee may construct
its Initial Tenant Improvements utilizing licensed contractors and
subcontractors selected by Lessee and approved by Lessor. Such work shall
comply with section 7 of the Lease.
7. PARKING: During the term of this lease of the Additional Premises,
Lessee shall have the use of an additional 3 reserved and 10 nonreserved
parking spaces at no additional cost.
8. OTHER TERMS AND CONDITIONS: Except as set forth herein, each and every
other term and condition of the Lease and the Addendum thereto applies to
the Additional Premises, as if set forth fully herein; provided, however,
that any warranties, rights or obligations that accrue to either party
shall, for purposes of this Amendment and with respect to the Additional
Premises only, accrue on the Additional Premises Commencement Date set
forth above, and shall terminate with respect to the Additional Premises
on the Additional Premises Termination Date (except with respect to any
obligations under the Lease that expressly survive the termination of the
Lease).
9. LESSEE'S PERCENTAGE SHARE: The Lease is hereby amended, effective
during the Term for the Additional Premises only, as follows: Lessee's
Percentage Share under the Lease (for both the original and the
Additional Premises) shall be 4.93%.
10. SECURITY DEPOSIT: Lessee shall deliver a security deposit of upon
execution of this Amendment.
LESSEE: LESSOR:
INTELLIGENT SYSTEMS FOR RETAIL, INC., a HARBOR BELMONT ASSOCIATES, a California
California corporation General Partnership
By /s/ Louis H. Borders By /s/ Philip Raiser
------------------------------- -----------------------------------
Louis H. Borders Philip Raiser
Its President Its General Partner
Addendum to Lease
Rev. 12/02/98
Page 2 of 2
EXHIBIT B
[FLOOR PLAN]
EXHIBIT "C"
EXISTING FLOOR PLAN
[FLOOR PLAN]
AMENDMENT NO. THREE TO LEASE
HARBOR BELMONT ASSOCIATES AS LESSOR AND
INTELLIGENT SYSTEMS FOR RETAIL, INC. AS LESSEE
PROPERTY ADDRESS
260 HARBOR BOULEVARD, BELMONT, CALIFORNIA
Amendment Date (for reference purposes): December 31, 1998
This Amendment is incorporated into and made a part of that certain lease
dated March 20, 1998 as described above, as amended by Amendment No. 1 to
Lease dated June 4, 1998 and Amendment No. 2 to Lease dated December 4, 1998
(collectively, the "Lease"). In the event of any conflict between the terms
of the lease and the terms of the Amendments, the terms of this Amendment
shall prevail, as to the Additional Premises only. All capitalized terms not
otherwise defined herein shall have the meaning set forth in the Lease.
1. ADDITIONAL PREMISES: Lessee hereby leases from Lessor, and Lessor
leases to Lessee, as Additional Premises, those premises located at 288
Harbor Boulevard in Belmont, California (the "Additional Premises")
designated on the floor plan attached hereto as Exhibit B, comprising
1,375 rentable square feet. The provisions of this Lease Amendment apply
only to the Additional Premises. No terms or conditions of this Amendment
No. 3 shall be deemed to alter or affect the original terms of the
Lease, except as the same apply to the Additional Premises and except as
expressly set forth herein.
2. TERM APPLICABLE TO ADDITIONAL PREMISES ONLY: The Term of the lease of
the Additional Premises shall commence on January 15, 1999 (the
"Additional Premises Commencement Date") and, unless sooner terminated
as provided in the Lease, shall end on January 31, 2002 (the "Additional
Premises Termination Date").
3. BASE RENTAL SCHEDULE APPLICABLE TO ADDITIONAL PREMISES ONLY: Lessee
shall pay as monthly Base Rent for the Additional Premises the following
sums:
January 15 - 31, 1999 _______ Total
February 1999 - January 2000 _______ Per Month
February 2000 - January 2001 _______ Per Month
February 2001 - January 2002 _______ Per Month
4. EARLY OCCUPANCY: Lessee shall be entitled to occupy the Additional
Premises prior to the Commencement Date upon mutual execution and
delivery of this Lease Amendment, subject to the provisions of paragraph
3 of the Addendum to Lease.
5. CONDITION OF PREMISES; WARRANTIES: Lessor shall deliver the Premises to
Lessee clean and free of debris on the Commencement Date, in good and
operating condition and repair as more fully set forth in paragraph 4 of
the Addendum to Lease. Except as expressly set forth in this
INITIAL
[ILLEGIBLE]
Addendum to Lease
Rev. 12/20/98
Page 1 of 2
paragraph 5. Lessee accepts the Premises "as is," and Lessor has no
obligation to repair, alter or improve the Additional Premises.
6. INITIAL TENANT IMPROVEMENTS: Lessee shall construct its Initial Tenant
Improvements for the Additional Premises, at Lessee's sole cost and
expense, subject to Lessor's prior WRITTEN approval thereof, which shall
not be unreasonably withheld or delayed. Lessor shall provide no tenant
improvement allowance for the Additional Premises. Lessee may construct
its Initial Tenant Improvements utilizing licensed contractors and
subcontractors selected by Lessee and approved by Lessor, in writing.
Such work shall comply with section 7 of the Lease. All work involving
wall changes, electrical, fire sprinklers and HVAC shall have a building
permit.
7. PARKING: During the term of this lease of the Additional Premises,
Lessee shall have the use of an additional 2 reserved parking spaces at
no additional cost.
8. OTHER TERMS AND CONDITIONS: Except as set forth herein, each and every
other term and condition of the Lease and the Addendum thereto applies
to the Additional Premises, as if set forth fully herein; provided,
however, that any warranties, rights or obligations that accrue to
either party shall, for purposes of the Amendment and with respect to
the Additional Premises only, accrue on the Additional Premises
Commencement Date set forth above, and shall terminate with respect to
the Additional Premises on the Additional Premises Termination Date
(except with respect to any obligations under the Lease that expressly
survive the termination of the Lease).
9. LESSEE'S PERCENTAGE SHARE: The Lease is hereby amended, effective
during the Terms for the Additional Premises only, as follows: Lessee's
Percentage Share under the Lease (for both the original and the
Additional Premises) shall be 5.58%.
10. SECURITY DEPOSIT: Lessee shall deliver a security deposit of $2,118.00
upon execution of this Amendment.
LESSEE LESSOR:
INTELLIGENT SYSTEMS FOR RETAIL, INC., HARBOR BELMONT ASSOCIATES,
a California corporation a California General Partnership
By /s/ Louis H. Borders By /s/ Phillip Raiser
----------------------------------- -----------------------------------
Louis H. Borders Phillip Raiser
Its President Its General Partner
INITIAL
[ILLEGIBLE]
Addendum to Lease
Rev. 12/20/98
Page 2 of 2
[FLOORPLAN]
LEASE EXHIBIT A
INITIAL
LHB/PR
HARBOR PARK
BUILDING 'D' - STE. 288
HARBOR BOULEVARD
1,375 SQ. FT. BELMONT, CA.