EXHIBIT 10.10
LEASE
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Landlord: Hayward Point Eden I Limited Partnership
Tenant: AllAdvantage.com
Date: December 22, 1999
TABLE OF CONTENTS
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Page #
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1. PREMISES............................................................ 1
1.1 Premises...................................................... 1
1.2 Landlord's Reserved Rights.................................... 1
2. TERM .............................................................. 1
2.1 Term.......................................................... 1
2.2 Early Possession.............................................. 2
2.3 Delay in Possession........................................... 2
2.4 Construction.................................................. 2
2.5 Acknowledgement Of Lease Commencement......................... 3
2.6 Holding Over.................................................. 3
2.7 Termination Right............................................. 3
3. RENTAL.............................................................. 4
3.1 Minimum Rental................................................ 4
3.2 Late Charge................................................... 4
4. TAXES .............................................................. 5
4.1 Personal Property............................................. 5
4.2 Real Property................................................. 5
5. OPERATING EXPENSES.................................................. 5
5.1 Payment Of Operating Expenses................................. 5
5.2 Definition Of Operating Expenses.............................. 6
5.3 Determination of Operating Expenses........................... 6
5.4. Final Accounting For Lease Year............................... 7
5.5. Proration..................................................... 7
6. UTILITIES........................................................... 7
6.1. Payment....................................................... 7
6.2. Interruption.................................................. 7
7. ALTERATIONS......................................................... 7
7.1. Right To Make Alterations..................................... 7
7.2. Title To Alterations.......................................... 8
7.3. Tenant Fixtures............................................... 8
7.4. No Liens...................................................... 8
8. MAINTENANCE AND REPAIRS............................................. 8
8.1. Landlord's Work............................................... 8
8.2. Tenant's Obligation For Maintenance........................... 9
(a) Good Order, Condition And Repair........................... 9
(b) Landlord's Remedy......................................... 9
(c) Condition Upon Surrender.................................. 9
9. USE OF PREMISES................................................. 9
9.1. Permitted Use............................................. 10
9.2. Requirement Of Continued Use.............................. 10
9.3. No Nuisance............................................... 10
9.4. Compliance With Laws...................................... 10
9.5. Liquidation Sales......................................... 11
9.6. Environmental Matters..................................... 11
10. INSURANCE AND INDEMNITY.......................................... 11
10.1. Liability Insurance....................................... 11
10.2. Quality Of Policies And Certificates...................... 12
10.3. Workers' Compensation..................................... 12
10.4. Waiver Of Subrogation..................................... 12
10.5. Increase In Premiums...................................... 12
10.6. Indemnification........................................... 13
10.7. Blanket Policy............................................ 13
11. SUBLEASE AND ASSIGNMENT.......................................... 13
11.1. Assignment And Sublease Of Premises....................... 13
11.2. Rights Of Landlord........................................ 14
12. RIGHT OF ENTRY AND QUIET ENJOYMENT............................... 14
12.1. Right Of Entry............................................ 14
12.2. Quiet Enjoyment........................................... 15
13. CASUALTY AND TAKING.............................................. 15
13.1. Termination Or Reconstruction............................. 15
13.2. Tenant's Rights........................................... 15
13.3. Lease To Remain In Effect................................. 15
13.4. Reservation Of Compensation............................... 15
13.5. Restoration Of Fixtures................................... 16
14. DEFAULT.......................................................... 16
14.1. Events Of Default......................................... 16
(a) Abandonment............................................... 16
(b) NonPayment................................................ 16
(c) Other Obligations......................................... 16
(d) General Assignment........................................ 16
(e) Bankruptcy................................................ 17
(f) Receivership.............................................. 17
(g) Attachment................................................ 17
(h) Insolvency................................................ 17
14.2. Remedies Upon Tenant's Default............................ 17
14.3. Remedies Cumulative....................................... 18
15. SUBORDINATION, ATTORNMENT AND SALE............................... 18
15.1. Subordination To Mortgage................................. 18
15.2. Sale Of Landlord's Interest............................... 19
15.3. Estoppel Certificates..................................... 19
15.4. Subordination to CC&Rs.................................... 20
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16. SECURITY.......................................................... 20
16.1. Deposit................................................... 20
17. MISCELLANEOUS..................................................... 20
17.1. Notices................................................... 20
17.2. Successors And Assigns.................................... 21
17.3. No Waiver................................................. 21
17.4. Severability.............................................. 22
17.5. Litigation Between Parties................................ 22
17.6. Surrender................................................. 22
17.7. Interpretation............................................ 22
17.8. Entire Agreement.......................................... 22
17.9. Governing Law............................................. 22
17.10. No Partnership............................................ 22
17.11. Financial Information..................................... 23
17.12. Costs..................................................... 23
17.13. Time...................................................... 23
17.14. Rules And Regulations..................................... 23
17.15. Brokers................................................... 24
17.16. Memorandum Of Lease....................................... 24
17.17. Corporate Authority....................................... 24
17.18. Execution and Delivery.................................... 24
17.19. Exercise of Option........................................ 24
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LEASE
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THIS LEASE is made and entered into as of the 22nd day of December, 1999,
by and between Hayward Point Eden I Limited Partnership, a Delaware limited
partnership ("Landlord") and AllAdvantage.com a California corporation
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("Tenant").
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THE PARTIES AGREE AS FOLLOWS:
1. PREMISES
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1.1 Premises. Landlord leases to Tenant and Tenant hires and leases
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from Landlord, on the terms, covenants and conditions hereinafter set forth, the
premises (the "Premises") designated in Exhibit A attached hereto and
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incorporated herein by this reference, consisting of approximately 45,000 square
feet of space located within Building K (the "Building") in the Britannia Point
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Eden Business Park (the "Center") in the City of Hayward, County of Alameda,
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State of California, commonly known as 4010 Point Eden Way, Hayward, California
94945, and located on the real property (the "Property") described in Exhibit B
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attached hereto and incorporated herein by this reference, together with the
nonexclusive right to use any common areas designated from time to time in any
Declaration of Covenants, Conditions and Restrictions or similar document
affecting the Center.
1.2 Landlord's Reserved Rights. Landlord reserves the right from time
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to time to (i) install, use, maintain, repair and replace pipes, ducts,
conduits, wires and appurtenant meters and equipment for service to other parts
of the Building above the ceiling surfaces, below the floor surfaces, within the
walls or leading through the Premises in locations which will not materially
interfere with Tenant's use thereof, (ii) relocate any pipes, ducts, conduits,
wires and appurtenant meters and equipment included in the Premises which are so
located or located elsewhere outside the Premises, (iii) make alterations or
additions to the Building, (iv) construct, alter or add to other buildings or
improvements on the Property, (v) build adjoining to the Property, and (vi)
lease any part of the Property for the construction of improvements or
buildings. Landlord may modify or enlarge the common area, alter or relocate
accesses to the Premises, or alter or relocate any common facility. For any
work within the Building performed pursuant to this Section 1.2, Landlord shall
provide prior written notice of such work to Tenant before performing such work,
except in the event of an emergency. Landlord shall not exercise rights
reserved to it pursuant to this Section 1.2 in such a manner as to materially
impair Tenant's ability to conduct its activities in the normal manner;
provided, however, that the foregoing shall not limit or restrict Landlord's
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right to undertake reasonable construction activity and Tenant's use of the
Premises shall be subject to reasonable temporary disruption incidental to such
activity diligently prosecuted.
2. TERM
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2.1 Term. The term of this Lease shall commence on the earlier to occur
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of (i) the date which is five (5) days after the date Landlord notifies Tenant
that Landlord's work pursuant to Section 2.4 is substantially complete, or (ii)
the date Tenant takes occupancy of the Premises, the earlier of such dates being
herein called the "Commencement Date," and shall end on the day immediately
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preceding the date thirty-six (36) months thereafter, unless sooner terminated
or
extended (if applicable) as hereinafter provided. Landlord presently estimates
that the Commencement Date will be January 1, 2000.
2.2 Early Possession. If Landlord permits Tenant to occupy, use or take
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possession of the Premises prior to the Commencement Date determined under
Section 2.1, such occupancy, use or possession shall be subject to and upon all
of the terms and conditions of this Lease, including the obligation to pay rent
and other charges, unless Landlord and Tenant agrees otherwise; provided,
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however, that such early possession shall not advance or otherwise affect the
Commencement Date or termination date determined under Section 2.1; and provided
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further, that Tenant shall not interfere with or delay Landlord's contractors by
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such early possession and shall indemnify, defend and hold harmless Landlord and
its agents and employees from and against any and all claims, demands,
liabilities, actions, losses, costs and expenses, including (but not limited to)
reasonable attorneys' fees, arising out of or in connection with Tenant's early
entry upon the Premises hereunder.
2.3 Delay in Possession. Landlord agrees to use its best efforts to
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complete promptly the work described in Section 2.4; provided, however, Landlord
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shall not be liable for any damages caused by any delay in the completion of
such work, nor shall any such delay affect the validity of this Lease or the
obligations of Tenant hereunder.
2.4 Construction. (a) The obligation of Landlord to perform work to
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improve the Premises for occupancy by Tenant is limited to the following, all of
which work shall be performed promptly, diligently and prior to the Commencement
Date (subject to delays for causes beyond Landlord's reasonable control), in a
neat and workmanlike manner, in compliance with all applicable governmental
codes, laws and regulations in force at the time such work is completed, and at
no expense to Tenant: (i) Landlord shall install carpeting in the manufacturing
area of the Premises, the area of which is approximately 10,736 square feet and
(ii) Landlord shall remove the chain link fencing in the manufacturing area of
the Premises. Except as specifically set forth in this Section 2.4(a), Landlord
shall have no responsibilities or obligations with respect to preparation of the
Premises for Tenant's occupancy and Tenant shall take possession of the Premises
in their presently existing condition "AS IS," in all respects. Acceptance by
Tenant of possession of the Premises after performance of such work by Landlord
shall constitute acceptance by Tenant of such work in its then completed
condition and Landlord shall have no further responsibility of any kind or
character for improvement of the Premises or in connection with such work;
provided, however, that within fifteen (15) days after the Commencement Date,
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Tenant may furnish to Landlord a "punch list" identifying any items or matters
in the Premises which are not in the condition required hereunder and Landlord
shall promptly and diligently correct all such matters at its sole cost and
expense. Upon request by Tenant, Landlord shall conduct a "walk-through" of the
Premises with Tenant prior to the Commencement Date in order to identify work
required to be performed in accordance with this Section 2.4.
(b) Tenant may make alterations to the Premises to prepare the
Premises for Tenant's occupancy, provided that such alterations are made in
accordance with Article 7 of this Lease and provided that Landlord has approved
the contractors performing the work. Landlord will pay the cost of Fifty
Thousand Dollars ($50,000) of such alterations. Landlord will make
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the payment for such alterations (up to $50,000) directly to the contractors
performing such alterations promptly after Landlord receives invoices from such
contractors for work completed.
2.5 Acknowledgement Of Lease Commencement. Upon commencement of the term
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of this Lease, Landlord and Tenant shall execute a written acknowledgement of
the Commencement Date, date of termination, square footage of the Premises and
related matters, substantially in the form attached hereto as Exhibit C
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(with appropriate insertions), which acknowledgement shall be deemed to be
incorporated herein by this reference. Notwithstanding the foregoing
requirement, the failure of one or both parties to execute such a written
acknowledgement shall not affect the determination of the Commencement Date,
date of termination, square footage of the Premises and related matters in
accordance with the provisions of this Lease.
2.6 Holding Over. If Tenant holds possession of the Premises after the
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term of this Lease with Landlord's written consent, then except as otherwise
specified in such consent, Tenant shall become a tenant from month to month at
one hundred twenty-five percent (125%) of the rental and otherwise upon the
terms herein specified for the period immediately prior to such holding over and
shall continue in such status until the tenancy is terminated by either party
upon not less than thirty (30) days prior written notice. If Tenant holds
possession of the Premises after the term of this Lease without Landlord's
written consent, then Landlord in its sole discretion may elect (by written
notice to Tenant) to have Tenant become a tenant either from month to month or
at will, at one hundred fifty percent (150%) of the rental (prorated on a daily
basis for an at-will tenancy, if applicable) and otherwise upon the terms herein
specified for the period immediately prior to such holding over, or may elect to
pursue any and all legal remedies available to Landlord under applicable law
with respect to such unconsented holding over by Tenant. Tenant shall indemnify
and hold Landlord harmless from any loss, damage, claim, liability, cost or
expense (including reasonable attorneys' fees) resulting from any delay by
Tenant in surrendering the Premises (except with Landlord's prior written
consent), including but not limited to any claims made by a succeeding tenant by
reason of such delay. Acceptance of rent by Landlord following expiration or
termination of this Lease shall not constitute a renewal of this Lease.
2.7 Termination Right. Tenant may terminate the term of this Lease as
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of any date after the eighteen (18) month anniversary of the Commencement Date,
provided that: (a) Tenant gives Landlord written notice of Tenant's election to
terminate (which notice must specify the termination date) on or before March
30, 2001 and (b) Tenant pays Landlord the unamortized portion of the sum of (x)
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Fifty Thousand Dollars ($50,000) plus (y) Landlord's costs to improve the
Premises for Tenant under Section 2.4(a). The amortization referred to in
clause (b) of the preceding sentence will be calculated over a thirty-six (36)
month period with an eleven percent (11%) interest component. Tenant shall
receive a credit against Tenant's payment to Landlord pursuant to clause (b) of
the preceding sentence if Tenant has reimbursed Landlord for the cost of
replacement for the HVAC equipment or related mechanical systems pursuant to the
last sentence of Section 8.2(a); the amount of such credit shall equal the
amount paid to Landlord for such replacement multiplied by a fraction, the
numerator of which is the number of months between the date the termination
becomes effective and the thirty-six (36) month anniversary of the Commencement
Date and the denominator of which is the number of months between the date of
such replacement and the thirty-six (36) month anniversary of the Commencement
Date.
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3. RENTAL
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3.1 Minimum Rental.
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(a) Tenant shall pay to Landlord as minimum rental for the Premises,
in advance, without deduction, offset, notice or demand, on or before the
Commencement Date and on or before the first day of each subsequent calendar
month of the term of this Lease, the following amounts per month:
Months Minimum Rental
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1 - 12 $57,887.08
13 - 24 60,137.08
25 - 36 62,447.08
If the obligation to pay minimum rental hereunder commences on other than the
first day of a calendar month or if the term of this Lease terminates on other
than the last day of a calendar month, the minimum rental for such first or last
month of the term of this Lease, as the case may be, shall be prorated based on
the number of days the term of this Lease is in effect during such month. If an
increase in minimum rental becomes effective on a day other than the first day
of a calendar month, the minimum rental for that month shall be the sum of the
two applicable rates, each prorated for the portion of the month during which
such rate is in effect.
(b) The minimum rental amounts specified in this Section 3.1 are
based upon an estimated area of 45,000 square feet for the Premises. If the
actual area of the Premises, when completed, is greater or less than such
estimated area, then the minimum rentals specified in this Section 3.1 shall be
adjusted proportionately to the change in the area of the Premises, as
determined in good faith by Landlord's architect on a basis consistent with that
used in measuring other leased premises within the Center.
3.2 Late Charge. If Tenant fails to pay when due rental or other amounts
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due Landlord hereunder, such unpaid amounts shall bear interest for the benefit
of Landlord at a rate equal to the lesser of fifteen percent (15%) per annum or
the maximum rate permitted by law, from the date due to the date of payment. In
addition to such interest, Tenant shall pay to Landlord a late charge in an
amount equal to ten percent (10%) of any installment of minimum rental and any
other amounts due Landlord if not paid in full on or before the fifth (5th) day
after such rental or other amount is due. Tenant acknowledges that late payment
by Tenant to Landlord of rental or other amounts due hereunder will cause
Landlord to incur costs not contemplated by this Lease, including, without
limitation, processing and accounting charges and late charges which may be
imposed on Landlord by the terms of any loan relating to the Property. Tenant
further acknowledges that it is extremely difficult and impractical to fix the
exact amount of such costs and that the late charge set forth in this Section
3.2 represents a fair and reasonable estimate thereof. Acceptance of any late
charge by Landlord shall not constitute a waiver of Tenant's default with
respect to overdue rental or other amounts, nor shall such acceptance prevent
Landlord from exercising any other rights and remedies available to it.
Acceptance of rent or other payments by Landlord shall not constitute a waiver
of late charges or interest accrued with respect to such rent or other payments
or any prior installments thereof, nor
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of any other defaults by Tenant, whether monetary or non-monetary in nature,
remaining uncured at the time of such acceptance of rent or other payments.
4. TAXES
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4.1 Personal Property. Tenant shall be responsible for and shall pay
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prior to delinquency all taxes and assessments levied against or by reason of
all alterations and additions and all other items installed or paid for by
Tenant under this Lease, and the personal property, trade fixtures and other
property placed by Tenant in or about the Premises. Upon request by Landlord,
Tenant shall furnish Landlord with satisfactory evidence of payment thereof. If
at any time during the term of this Lease any of said alterations, additions or
personal property, whether or not belonging to Tenant, shall be taxed or
assessed as part of the Property, then such tax or assessment shall be paid by
Tenant to Landlord immediately upon presentation by Landlord of copies of the
tax bills in which such taxes and assessments are included and shall, for the
purposes of this Lease, be deemed to be personal property taxes or assessments
under this Section 4.1.
4.2 Real Property. To the extent the real property taxes and assessments
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on the Premises are assessed separately from the remainder of the Property,
Tenant shall be responsible for and shall pay prior to delinquency all such
taxes and assessments levied against the Premises. Upon request by Landlord,
Tenant shall furnish Landlord with satisfactory evidence of payment thereof. To
the extent the Premises are taxed or assessed as part of the Property, such real
property taxes and assessments shall constitute Operating Expenses (as that term
is defined in Section 5.2 of this Lease) and shall be paid in accordance with
the provisions of Article 5 of this Lease.
5. OPERATING EXPENSES
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5.1 Payment Of Operating Expenses.
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(a) Tenant shall pay to Landlord, at the time and in the manner
hereinafter set forth, as additional rental, an amount equal to sixty percent
(60%) ("Tenant's Operating Cost Share") of the Operating Expenses defined in
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Section 5.2.
(b) Tenant's Operating Cost Share as specified in paragraph (a) of
this Section is based upon an estimated area of 45,000 square feet for the
Premises and upon an aggregate area of 75,000 square feet for the buildings
owned by Landlord on the Property. If the actual area of the Premises (when
completed) or of the buildings owned by Landlord on the Property, as determined
in good faith by Landlord's architect on a basis consistent with that used in
measuring other leased premises within the Center, differs from the assumed
numbers set forth above, then Tenant's Operating Cost Share shall be adjusted to
reflect the actual areas so determined.
(c) If Landlord constructs additional buildings on the Property (or
on any adjacent property owned by Landlord and operated, for common area
purposes, on an integrated basis with the Property) from time to time, Tenant's
Operating Cost Share shall be adjusted to be equal to the percentage determined
by dividing the gross square footage of the Premises as they then exist by the
gross square footage of all buildings located on portions of the Property owned
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by Landlord (or on any applicable adjacent property owned by Landlord as
described above). In determining said percentage, a building shall be taken into
account from and after the date on which a tenant first enters into possession
of the building or a portion thereof, and the good faith determination of the
gross square footage of any such building by Landlord's architects shall be
final and binding upon the parties.
5.2 Definition Of Operating Expenses. Subject to the exclusions and
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provisions hereinafter contained, the term "Operating Expenses" shall mean the
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total costs and expenses incurred by or allocable to Landlord for management,
operation and maintenance of the Building and the Property, including, without
limitation, costs and expenses of (i) insurance, property management,
landscaping and operations, repairs and maintenance of buildings and common
areas; (ii) all utilities and services; (iii) real and personal property taxes
and assessments or substitutes therefor, including (but not limited to) any
possessory interest, use, business, license or other taxes or fees, any taxes
imposed directly on rents or services, and assessments or charges for police or
fire protection, housing, transit, open space, street or sidewalk construction
or maintenance or other similar services from time to time by any governmental
or quasi-governmental entity, and any other new taxes on landlords in addition
to taxes now in effect; (iv) supplies, equipment, utilities and tools used in
management, operation and maintenance of the Property; (v) capital improvements
to the Property or the Building amortized over a reasonable period, (aa) which
reduce or will cause future reduction of other items of Operating Expenses for
which Tenant is otherwise required to contribute or (bb) which are required by
law, ordinance, regulation or order of any governmental authority or (cc) of
which Tenant has use or which benefit Tenant; and (vi) any other costs
(including, but not limited to, any parking or utilities fees or surcharges)
allocable to or paid by Landlord, as owner of the Property or Building, pursuant
to any applicable laws, ordinances, regulations or orders of any governmental or
quasi-governmental authority or pursuant to the terms of any declarations of
covenants, conditions and restrictions now or hereafter affecting the Property
(or any applicable adjacent property owned by Landlord as described above).
Operating Expenses shall not include any costs attributable to increasing the
size of or otherwise expanding the Building or the cost of the work for which
Landlord is required to pay under Section 2.4. The distinction between items of
ordinary operating maintenance and repair and items of a capital nature shall be
made in accordance with generally accepted accounting principles applied on a
consistent basis.
5.3 Determination of Operating Expenses. On or before the Commencement
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Date and during the last month of each calendar year of the term of this Lease
("Lease Year"), or as soon thereafter as practical, Landlord shall provide
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Tenant notice of Landlord's estimate of the Operating Expenses for the ensuing
Lease Year or applicable portion thereof. On or before the first day of each
month during the ensuing Lease Year or applicable portion thereof, beginning on
the Commencement Date, Tenant shall pay to Landlord Tenant's Operating Cost
Share of the portion of such estimated Operating Expenses allocable (on a
prorata basis) to such month; provided, however, that if such notice is not
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given in the last month of a Lease Year, Tenant shall continue to pay on the
basis of the prior year's estimate, if any, until the month after such notice is
given. If at any time or times it appears to Landlord that the actual Operating
Expenses will vary from Landlord's estimate by more than five percent (5%),
Landlord may, by notice to Tenant, revise its estimate for such year and
subsequent payments by Tenant for such year shall be based upon such revised
estimate.
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5.4. Final Accounting For Lease Year. Within ninety (90) days after the
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close of each Lease Year, or as soon after such 90-day period as practicable,
Landlord shall deliver to Tenant a statement of Tenant's Operating Cost Share of
the Operating Expenses for such Lease Year prepared by Landlord from Landlord's
books and records, which statement shall be final and binding on Landlord and
Tenant. If on the basis of such statement Tenant owes an amount that is more or
less than the estimated payments for such calendar year previously made by
Tenant, Tenant or Landlord, as the case may be, shall pay the deficiency to the
other party within thirty (30) days after delivery of the statement. Failure or
inability of Landlord to deliver the annual statement within such ninety (90)
day period shall not impair or constitute a waiver of Tenant's obligation to pay
Operating Expenses, or cause Landlord to incur any liability for damages.
5.5. Proration. If the Commencement Date falls on a day other than the
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first day of a Lease Year or if this Lease terminates on a day other than the
last day of a Lease Year, the amount of Tenant's Operating Cost Share payable by
Tenant applicable to such first and last partial Lease Year shall be prorated on
the basis which the number of days during such Lease Year in which this Lease is
in effect bears to 365. The termination of this Lease shall not affect the
obligations of Landlord and Tenant pursuant to Section 5.4 to be performed after
such termination.
6. UTILITIES
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6.1. Payment. Commencing with the Commencement Date and thereafter
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throughout the term of this Lease, Tenant shall pay, before delinquency, all
charges for water, gas, heat, light, electricity, power, sewer, telephone, alarm
system, janitorial and other services or utilities supplied to or consumed in or
upon the Premises, including any taxes on such services and utilities. It is the
intention of the parties that all such services shall be separately metered to
the Premises. In the event that any of such services supplied to the Premises
are not separately metered, then the amount thereof shall be an item of
Operating Expenses and shall be paid as provided in Article 5.
6.2. Interruption. There shall be no abatement of rent or other charges
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required to be paid hereunder and Landlord shall not be liable in damages or
otherwise for interruption or failure of any service or utility furnished to or
used in the Premises because of accident, making of repairs, alterations or
improvements, severe weather, difficulty or inability in obtaining services or
supplies, labor difficulties or any other cause.
7. ALTERATIONS
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7.1. Right To Make Alterations. Tenant shall make no alterations, additions
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or improvements to the Premises, other than interior non-structural alterations
costing less than Ten Thousand Dollars ($10,000.00) in each instance, without
the prior written consent of Landlord. All such alterations, additions and
improvements shall be completed with due diligence in a first-class workmanlike
manner and in material compliance with plans and specifications approved in
writing by Landlord and all applicable laws, ordinances, rules and regulations.
7.2. Title To Alterations. All alterations, additions and improvements
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installed in, on or about the Premises shall be part of the Building and the
property of Landlord, unless Landlord
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elects to require Tenant to remove the same upon the termination of this Lease;
provided, however, that the foregoing shall not apply to Tenant's movable
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furniture and trade fixtures.
7.3. Tenant Fixtures. Notwithstanding the provisions of Sections 7.1 and
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7.2, Tenant may install, remove and reinstall trade fixtures without Landlord's
prior written consent, except that any fixtures which are affixed to the
Premises or which affect the exterior or structural portions of the Building
shall require Landlord's written approval. The foregoing shall apply to Tenant's
signs, logos and insignia, all of which Tenant shall have the right to place and
remove and replace solely with Landlord's prior written consent as to location,
size and composition. Tenant shall immediately repair any damage caused by
installation and removal of fixtures under this Section 7.3.
7.4. No Liens. Tenant shall at all times keep the Premises free from all
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liens and claims of any contractors, subcontractors &, materialmen, suppliers or
any other parties employed either directly or indirectly by Tenant in
construction work on the Premises. Tenant may contest any claim of lien, but
only if, prior to such contest, Tenant either (i) posts security in the amount
of the claim, plus estimated costs and interest, or (ii) records a bond of a
responsible corporate surety in such amount as may be required to release the
lien from the Premises. Tenant shall indemnify, defend and hold Landlord
harmless against any and all liability, loss, damage, cost and other expenses,
including, without limitation, reasonable attorneys' fees, arising out of claims
of any lien for work performed or materials or supplies furnished at the request
of Tenant or persons claiming under Tenant.
8. MAINTENANCE AND REPAIRS
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8.1. Landlord's Work. Landlord shall repair and maintain or cause to
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be repaired and maintained those portions of the Building outside of the
Premises, the common areas of the Property, and the roof, exterior walls and
other structural portions of the Building. The cost of all work performed by
Landlord under this Section 8.1 shall be an Operating Expense hereunder, except
to the extent such work (i) is required due to the negligence of Landlord or any
other tenant of the Building, (ii) is a service to a specific tenant or tenants,
other than Tenant, for which Landlord has received or has the right to receive
full reimbursement, (iii) is a capital expense not includible as an Operating
Expense under Section 5.2 hereof, or (iv) is required due to the negligence or
willful misconduct of Tenant or its agents, employees or invitees (in which
event Tenant shall bear the full cost of such work pursuant to the
indemnification provided in Section 10.6 hereof). Tenant knowingly and
voluntarily waives the right to make repairs at Landlord's expense, or to offset
the cost thereof against rent, under any law, statute, regulation or ordinance
now or hereafter in effect.
8.2. Tenant's Obligation For Maintenance.
------------------------------------
(a) Good Order, Condition And Repair. By accepting possession of
--------------------------------
the Premises, Tenant acknowledges that the Premises are in good and sanitary
order, condition and repair. Except as provided in Section 8.1 hereof, Tenant
at its sole cost and expense shall keep and maintain in good and sanitary order,
condition and repair the Premises and every part thereof, wherever located,
including but not limited to the signs, interior, the face of the ceiling over
Tenant's floor space, HVAC equipment and related mechanical systems serving the
-8-
Premises (for which equipment and systems Tenant shall enter into a service
contract with a person or entity designated or approved by Landlord), all doors,
door checks, windows, plate glass, door fronts, exposed plumbing and sewage and
other utility facilities, fixtures, lighting, wall surfaces, floor surfaces and
ceiling surfaces and all other interior repairs, foreseen and unforeseen, as
required. If (i) Tenant would otherwise be required to replace HVAC equipment
or related mechanical systems serving the Premises because such equipment or
systems are not functioning and (ii) the cost of such replacement would be
---
considered a capital cost under generally accepted accounting principles, then
Landlord shall replace such HVAC equipment or related mechanical systems and
Tenant shall reimburse Landlord for a fraction of the cost of such replacement;
the numerator of such fraction shall equal the number of months remaining during
the term of this Lease and the denominator of such fraction shall equal the
useful life of the equipment or systems (as determined in accordance with
generally accepted accounting principles).
(b) Landlord's Remedy. If Tenant, after written notice from Landlord,
------------------
fails to make or perform promptly any repairs or maintenance which are the
obligation of Tenant hereunder, Landlord shall have the right, but shall not be
required, to enter the Premises and make the repairs or perform the maintenance
necessary to restore the Premises to good and sanitary order, condition and
repair. Immediately on demand from Landlord, the cost of such repairs shall be
due and payable by Tenant to Landlord.
(c) Condition Upon Surrender. At the expiration or sooner termination
------------------------
of this Lease, Tenant shall surrender the Premises, including any additions,
alterations and improvements thereto, broom clean, in good and sanitary order,
condition and repair, ordinary wear and tear excepted, first, however, removing
all goods and effects of Tenant and any and all fixtures and items required to
be removed or specified to be removed at Landlord's election pursuant to this
Lease, and repairing any damage caused by such removal. Tenant shall not have
the right to remove fixtures or equipment if Tenant is in default hereunder
unless Landlord specifically waives this provision in writing. Tenant expressly
waives any and all interest in any personal property and trade fixtures not
removed from the Premises by Tenant at the expiration or termination of this
Lease, agrees that any such personal property and trade fixtures may, at
Landlord's election, be deemed to have been abandoned by Tenant, and authorizes
Landlord (at its election and without prejudice to any other remedies under this
Lease or under applicable law) to remove and either retain, store or dispose of
such property at Tenant's cost and expense, and Tenant waives all claims against
Landlord for any damages resulting from any such removal, storage, retention or
disposal.
9. USE OF PREMISES
---------------
9.1. Permitted Use. Tenant shall use the Premises solely for general office
-------------
and administrative purposes, and for no other purpose.
9.2. Requirement Of Continued Use. Tenant shall not at any time leave the
----------------------------
Premises unoccupied or vacant, and shall continuously during the term of this
Lease (except during any period when the Premises are unusable by reason of
events described in Article 13 hereof) conduct and carry on in the Premises the
use permitted hereunder.
-9-
9.3. No Nuisance. Tenant shall not use the Premises for or carry on or
-----------
permit upon the Premises or any part thereof any offensive, noisy or dangerous
trade, business, manufacture, occupation, odor or fumes, or any nuisance or
anything against public policy, nor interfere with the rights or business of any
other tenants or of Landlord in the Building or the Property, nor commit or
allow to be committed any waste in, on or about the Premises, nor make any other
unreasonable use of the Premises. Tenant shall not do or permit anything to be
done in or about the Premises, nor bring nor keep anything therein, which will
in any way cause the Premises to be uninsurable with respect to the insurance
required by this Lease or with respect to standard fire and extended coverage
insurance with vandalism, malicious mischief and riot endorsements.
9.4. Compliance With Laws. Tenant shall not knowingly use the Premises or
--------------------
permit the Premises to be used in whole or in part for any purpose or use that
is in violation of any applicable laws, ordinances, regulations or rules of any
governmental agency or public authority. Tenant shall keep the Premises equipped
with all safety appliances required by law, ordinance or insurance on the
Premises, or any order or regulation of any public authority because of Tenant's
particular use of the Premises. Tenant shall procure all licenses and permits
required for use of the Premises. Tenant shall use the Premises in strict
accordance with all applicable ordinances, rules, laws and regulations and shall
comply with all requirements of all governmental authorities now in force or
which may hereafter be in force pertaining to the use of the Premises by Tenant,
including, without limitation, regulations applicable to noise, water, soil and
air pollution, and making such nonstructural alterations and additions thereto
as may be required from time to time by such laws, ordinances, rules,
regulations and requirements of governmental authorities or insurers of the
Premises (collectively, "Requirements") because of Tenant's construction of
------------
improvements in or other particular use of the Premises. Any structural
alterations or additions required from time to time by applicable Requirements
because of Tenant's construction of improvements in or other particular use of
the Premises shall, at Landlord's election, either (i) be made by Tenant, at
Tenant's sole cost and expense, in accordance with the procedures and standards
set forth in Section 7.1 for alterations by Tenant, or (ii) be made by Landlord
at Tenant's sole cost and expense, in which event Tenant shall pay to Landlord
as additional rent, within ten (10) days after demand by Landlord, an amount
equal to all costs incurred by Landlord in connection with such alterations or
additions. The judgment of any court, or the admission by Tenant in any
proceeding against Tenant, that Tenant has violated any law, statute, ordinance
or governmental rule, regulation or requirement shall be conclusive of such
violation as between Landlord and Tenant.
9.5. Liquidation Sales. Tenant shall not conduct or permit to be conducted
-----------------
any auction, bankruptcy sale, liquidation sale, or going out of business sale,
in, upon or about the Premises or the Property, whether said auction or sale be
voluntary, involuntary or pursuant to any assignment for the benefit of
creditors, or pursuant to any bankruptcy or other insolvency proceeding.
9.6. Environmental Matters. Without limiting the generality of Tenant's
---------------------
obligations set forth in Section 9.4 of this Lease:
(a) Tenant shall not cause or permit any hazardous or toxic substance
or hazardous waste (as defined in any federal, state or local law, ordinance or
regulation applicable
-10-
to such substances or wastes) to be brought upon, kept, stored or used on or
about the Property without the prior written consent of Landlord.
(b) Tenant shall comply with all applicable laws, rules,
regulations, orders, permits, licenses and operating plans of any governmental
authority with respect to the receipt, use, handling, generation,
transportation, storage, treatment release and/or disposal of hazardous or toxic
substances or wastes in the course of or in connection with the conduct of
Tenant's business on the Property, and shall provide Landlord with copies of any
and all permits, licenses, registrations and other similar documents that
authorize Tenant to conduct any such activities in connection with Tenant's use
of the Property.
(c) Tenant shall indemnify, defend and hold Landlord harmless from
and against any and all claims, losses, damages, liabilities, costs, legal fees
and expenses of any sort arising out of or relating to (i) any failure by Tenant
to comply with any provisions of subparagraph (a) or (b) above, or (ii) any
receipt, use, handling, generation, transportation, storage, treatment, release
and/or disposal of any hazardous or toxic substances or wastes on or about the
Property in connection with Tenant's use or occupancy of the Property or as a
result of any intentional or negligent acts or omissions of Tenant or of any
agent or employee of Tenant.
(d) Landlord shall indemnify, defend and hold Tenant harmless from
and against any and all claims, losses, damages, liabilities, costs, legal fees
and expenses of any sort arising out of or relating to (i) the presence on the
Property of any hazardous or toxic substances or wastes present on the Property
as of the Commencement Date (except to the extent their presence is the result
of any intentional or negligent acts or omissions of Tenant or of any agent or
employee of Tenant), and/or (ii) any unauthorized release into the environment
of hazardous or toxic substances or wastes to the extent they result from the
negligence of or willful misconduct or omission by Landlord or its agents or
employees.
(e) The provisions of this Section 9.6 shall survive the termination
of this Lease.
10. INSURANCE AND INDEMNITY
-----------------------
10.1. Liability Insurance. Tenant shall procure and maintain in full
-------------------
force and effect at all times during the term of this Lease, at Tenant's cost
and expense, comprehensive public liability and property damage insurance to
protect against any liability to the public, or to any invitee of Tenant or
Landlord, arising out of or related to the use of or resulting from any accident
occurring in, upon or about the Premises, with limits of liability of not less
than (i) One Million Dollars ($1,000,000.00) for injury to or death of one
person, (ii) Three Million Dollars ($3,000,000.00) for personal injury or death,
per occurrence, and (iii) Five Hundred Thousand Dollars ($500,000.00) for
property damage, or a combined single limit of public liability and property
damage insurance of not less than Five Million Dollars ($5,000,000.00). Such
insurance shall name Landlord and its general partners and Managing Agent as
additional insureds thereunder. The amount of such insurance shall not be
construed to limit any liability or obligation of Tenant under this Lease.
-11-
10.2. Quality Of Policies And Certificates. All policies of insurance
------------------------------------
required hereunder shall be issued by responsible insurers and shall be written
as primary policies not contributing with and not in excess of any coverage that
Landlord may carry. Tenant shall deliver to Landlord copies of policies or
certificates of insurance showing that said policies are in effect. The
coverage provided by such policies shall include the clause or endorsement
referred to in Section 10.4. If Tenant fails to acquire, maintain or renew any
insurance required to be maintained by it under this Article 10 or to pay the
premium therefor, then Landlord, at its option and in addition to its other
remedies, but without obligation so to do, may procure such insurance, and any
sums expended by it to procure any such insurance shall be repaid upon demand,
with interest as provided in Section 3.2 hereof. Tenant shall obtain written
undertakings from each insurer under policies required to be maintained by it to
notify all insureds thereunder at least thirty (30) days prior to cancellation,
amendment or revision of coverage.
10.3. Workers' Compensation. Tenant shall maintain in full force and
---------------------
effect during the term of this Lease workers' compensation insurance covering
all of Tenant's employees working on the Premises.
10.4. Waiver Of Subrogation. To the extent permitted by law and without
---------------------
affecting the coverage provided by insurance required to be maintained
hereunder, Landlord and Tenant each waive any right to recover against the other
(i) damages for injury to or death of persons, (ii) damage to property, (iii)
damage to the Premises or any part thereof, or (iv) claims arising by reason of
any of the foregoing, but only to the extent that any of the foregoing damages
and claims under subparts (i)-(iv) hereof are covered, and only to the extent of
such coverage, by casualty insurance actually carried or required to be carried
hereunder by either Landlord or Tenant. This provision is intended to waive
fully, and for the benefit of each party, any rights and claims which might give
rise to a right of subrogation in any casualty insurance carrier. Each party
shall procure a clause or endorsement on any casualty insurance policy required
under this Article 10 denying to the insurer rights of subrogation against the
other party to the extent rights have been waived by the insured prior to the
occurrence of injury or loss. Coverage provided by insurance maintained by
Tenant under this Article 10 shall not be limited, reduced or diminished by
virtue of the subrogation waiver herein contained.
10.5. Increase In Premiums. Tenant shall do all acts and pay all expenses
--------------------
necessary to insure that the Premises are not used for purposes prohibited by
any applicable fire insurance, and that Tenant's use of the Premises complies
with all requirements necessary to obtain any such insurance. If Tenant uses or
permits the Premises to be used in a manner which increases the existing rate of
any insurance on the Premises carried by Landlord, Tenant shall pay the amount
of the increase in premium caused thereby, and Landlord's costs of obtaining
other replacement insurance policies, including any increase in premium, within
ten (10) days after demand therefor by Landlord.
10.6. Indemnification.
---------------
(a) Tenant shall indemnify, defend and hold Landlord, its partners,
shareholders, officers, directors, affiliates, agents, employees and
contractors, harmless from any and all liability for injury to or death of any
person, or loss of or damage to the property of any
-12-
person, and all actions, claims, demands, costs (including, without limitation,
reasonable attorneys' fees), damages or expenses of any kind arising therefrom
which may be brought or made against Landlord or which Landlord may pay or incur
by reason of the use, occupancy and enjoyment of the Premises by Tenant or any
invitees, sublessees, licensees, assignees, employees, agents or contractors of
Tenant or holding under Tenant from any cause whatsoever other than negligence
or willful misconduct or omission by Landlord, its agents or employees.
Landlord, its partners, shareholders, officers, directors, affiliates, agents,
employees and contractors shall not be liable for, and Tenant hereby waives all
claims against such persons for, damages to goods, wares and merchandise in or
upon the Premises, or for injuries to Tenant, its agents or third persons in or
upon the Premises, from any cause whatsoever other than negligence or willful
misconduct or omission by Landlord, its agents or employees. Tenant shall give
prompt notice to Landlord of any casualty or accident in, on or about the
Premises.
(b) Landlord shall indemnify, defend and hold Tenant, its partners,
shareholders, officers, directors, affiliates, agents, employees and
contractors, harmless from any and all liability for injury to or death of any
person or loss of or damage to the property of any person, and all actions,
claims, demands, costs (including, without limitation, reasonable attorneys'
fees), damages or expenses of any kind arising therefrom which may be brought or
made against Tenant or which Tenant may pay or incur, to the extent such
liabilities, claims or other matters arise by reason of any negligence or
willful misconduct or omission by Landlord, its agents or employees.
10.7. Blanket Policy. Any policy required to be maintained hereunder may
--------------
be maintained under a so-called "blanket policy" insuring other parties and
other locations so long as the amount of insurance required to be provided
hereunder is not thereby diminished.
11. SUBLEASE AND ASSIGNMENT
-----------------------
11.1. Assignment And Sublease Of Premises. Tenant shall not have the right
-----------------------------------
or power to assign its interest in this Lease, or make any sublease, nor shall
any interest of Tenant under this Lease be assignable involuntarily or by
operation of law, without on each occasion obtaining the prior written consent
of Landlord, which consent shall not be unreasonably withheld. Any purported
sublease or assignment of Tenant's interest in this Lease requiring but not
having received Landlord's consent thereto shall be void. Any dissolution,
consolidation, merger or other reorganization of Tenant, or any sale or transfer
of the stock of or other interest in Tenant, or any series of one or more of
such events, involving in the aggregate a change of fifty percent (50%) or more
in the beneficial ownership of Tenant or its assets shall be deemed to be an
assignment hereunder and shall be void without the prior written consent of
Landlord as required above. Notwithstanding anything to the contrary in this
paragraph, a transfer of Tenant's assets to a newly formed Delaware corporation
for the sole purpose of enabling that successor entity to Tenant to make an
initial public offering of shares will not require Landlord's consent.
11.2. Rights Of Landlord. Consent by Landlord to one or more assignments
------------------
of this Lease, or to one or more sublettings of the Premises, or collection of
rent by Landlord from any assignee or sublessee, shall not operate to exhaust
Landlord's rights under this Article 11, nor constitute consent to any
subsequent assignment or subletting. No assignment of Tenant's interest in this
Lease and no sublease shall relieve Tenant of its obligations hereunder,
-13-
notwithstanding any waiver or extension of time granted by Landlord to any
assignee or sublessee, or the failure of Landlord to assert its rights against
any assignee or sublessee, and regardless of whether Landlord's consent thereto
is given or required to be given hereunder. In the event of a default by any
assignee, sublessee or other successor of Tenant in the performance of any of
the terms or obligations of Tenant under this Lease, Landlord may proceed
directly against Tenant without the necessity of exhausting remedies against any
such assignee, sublessee or other successor. In addition, Tenant immediately
and irrevocably assigns to Landlord, as security for Tenant's obligations under
this Lease, all rent from any subletting of all or a part of the Premises as
permitted under this Lease, and Landlord, as Tenant's assignee and as attorney-
in-fact for Tenant, or any receiver for Tenant appointed on Landlord's
application, may collect such rent and apply it toward Tenant's obligations
under this Lease; except that, until the occurrence of an act of default by
Tenant, Tenant shall have the right to collect such rent; any amounts of such
rent collected by Landlord may not exceed the total rents due from Tenant during
the term of this Lease.
12. RIGHT OF ENTRY AND QUIET ENJOYMENT
----------------------------------
12.1. Right Of Entry. Landlord and its authorized representatives shall
--------------
have the right to enter the Premises at any time during the term of this Lease
during normal business hours and upon not less than twenty-four (24) hours prior
notice, except in the case of emergency (in which event no notice shall be
required and entry may be made at any time), for the purpose of inspecting and
determining the condition of the Premises or for any other proper purpose
including, without limitation, to make repairs, replacements or improvements
which Landlord may deem necessary, to show the Premises to prospective
purchasers, to show the Premises to prospective tenants, and to post notices of
nonresponsibility. Landlord shall not be liable for inconvenience, annoyance,
disturbance, loss of business, quiet enjoyment or other damage or loss to Tenant
by reason of making any repairs or performing any work upon the Premises, the
Building or the Property, and the obligations of Tenant under this Lease shall
not thereby be affected in any manner whatsoever, provided, however, Landlord
--------
shall use reasonable efforts to minimize the inconvenience to Tenant's normal
business operations caused thereby.
12.2. Quiet Enjoyment. Landlord covenants that Tenant, upon paying the
---------------
rent and performing its obligations hereunder and subject to all the terms and
conditions of this Lease, shall peacefully and quietly have, hold and enjoy the
Premises throughout the term of this Lease, or until this Lease is terminated as
provided by this Lease.
13. CASUALTY AND TAKING
-------------------
13.1. Termination Or Reconstruction. If during the term of this Lease the
-----------------------------
Premises or Building, or any substantial part of either, (i) is damaged
materially by fire or other casualty or by action of public or other authority
in consequence thereof, (ii) is taken by eminent domain or by reason of any
public improvement or condemnation proceeding, or in any manner by exercise of
the right of eminent domain (including any transfer in avoidance of an exercise
of the power of eminent domain), or (iii) receives irreparable damage by reason
of anything lawfully done under color of public or other authority, this Lease
shall terminate as to the entire Premises at Landlord's election by written
notice given to Tenant within sixty (60) days after the damage or taking has
occurred. If Landlord does not elect to terminate this Lease as hereinabove
provided,
-14-
Landlord shall repair any such damage and restore the Premises (to the extent of
Landlord's work therein under Section 2.4) and the Building as nearly as
reasonably possible to the condition existing before the damage or taking.
13.2. Tenant's Rights. If any portion of the Premises is so taken by
---------------
condemnation, Tenant may elect to terminate this Lease if the portion of the
Premises taken is of such extent and nature as substantially to handicap, impede
or permanently impair Tenant's use of the balance of the Premises. Tenant must
exercise its right to terminate by giving notice to Landlord within thirty (30)
days after the nature and extent of the taking have been finally determined. If
Tenant elects to terminate this Lease, Tenant shall also notify Landlord of the
date of termination, which date shall not be earlier than thirty (30) days nor
later than ninety (90) days after Tenant has notified Landlord of its election
to terminate, except that this Lease shall terminate on the date of taking if
the date of taking falls on any date before the date of termination designated
by Tenant.
13.3. Lease To Remain In Effect. If neither Landlord nor Tenant terminates
-------------------------
this Lease as hereinabove provided, this Lease shall continue in full force and
effect, except that minimum monthly rental and Tenant's Operating Cost Share
shall abate to the extent Tenant's use of the Premises is impaired for any
period that any portion of the Premises is unusable or inaccessible because of a
casualty or taking hereinabove described. Each party waives the provisions of
Code of Civil Procedure Section 1265.130, allowing either party to petition the
Superior Court to terminate this Lease in the event of a partial condemnation of
the Premises.
13.4. Reservation Of Compensation. Landlord reserves, and Tenant waives
---------------------------
and assigns to Landlord, all rights to any award or compensation for damage to
the Premises, Building, Property and the leasehold estate created hereby,
accruing by reason of any taking in any public improvement, condemnation or
eminent domain proceeding or in any other manner by exercise of the right of
eminent domain or of anything lawfully done by public authority, except that
Tenant shall be entitled to any and all compensation or damages paid for or on
account of Tenant's moving expenses, trade fixtures, equipment and any leasehold
improvements in the Premises, the cost of which was borne by Tenant, but only to
the extent of the then remaining unamortized value of such improvements computed
on a straight-line basis over the term of this Lease. Tenant covenants to
deliver such further assignments of the foregoing as Landlord may from time to
time request.
13.5. Restoration Of Fixtures. If Landlord repairs or causes repair of the
-----------------------
Premises after such damage or taking, Tenant at its sole expense shall repair
and replace promptly all fixtures, equipment and other property of Tenant
located at, in or upon the Premises and all additions, alterations and
improvements and all other items installed or paid for by Tenant under this
Lease that were damaged or taken, so as to restore the same to a condition
substantially equal to that which existed immediately prior to the damage or
taking. Tenant shall have the right to make modifications to the Premises,
fixtures and improvements, subject to the prior written approval of Landlord. In
its review of Tenant's plans and specifications, Landlord may take into
consideration the effect of the proposed modifications on the exterior
appearance, the structural integrity and the mechanical and other operating
systems of the Building.
-15-
14. DEFAULT
-------
14.1. Events Of Default. The occurrence of any of the following shall
-----------------
constitute an event of default on the part of Tenant:
(a) Abandonment. Abandonment of the Premises. Tenant waives any
-----------
right Tenant may have to notice under Section 1951.3 of the California Civil
Code, the terms of this subsection (a) being deemed such notice to Tenant as
required by said Section 1951.3;
(b) NonPayment. Failure to pay, when due, any amount payable to
----------
Landlord hereunder, such failure continuing for a period of five (5) days after
written notice of such failure; provided, however, that any such notice shall be
--------
in lieu of, and not in addition to, any notice required under California Code of
Civil Procedure Section 1161 et seq., as amended from time to time;
-- ---
(c) Other Obligations. Failure to perform any obligation, agreement
-----------------
or covenant under this Lease other than those matters specified in subsection
(b) hereof, such failure continuing for fifteen (15) days after written notice
of such failure, or, if it is not possible to cure such default within fifteen
(15) days, failure to commence cure within said fifteen (15) day period and
thereafter to proceed diligently to complete cure; provided, however, that any
--------
such notice shall be in lieu of, and not in addition to, any notice required
under California Code of Civil Procedure Section 1161 et seq., as amended from
-- ---
time to time;
(d) General Assignment. A general assignment by Tenant for the
------------------
benefit of creditors;
(e) Bankruptcy. The filing of any voluntary petition in bankruptcy
----------
by Tenant, or the filing of an involuntary petition by Tenant's creditors, which
involuntary petition remains undischarged for a period of thirty (30) days. In
the event that under applicable law the trustee in bankruptcy or Tenant has the
right to affirm this Lease and continue to perform the obligations of Tenant
hereunder, such trustee or Tenant shall, in such time period as may be permitted
by the bankruptcy court having jurisdiction, cure all defaults of Tenant
hereunder outstanding as of the date of the affirmance of this Lease and provide
to Landlord such adequate assurances as may be necessary to ensure Landlord of
the continued performance of Tenant's obligations under this Lease.
Specifically, but without limiting the generality of the foregoing, such
adequate assurances must include assurances that the Premises continue to be
operated only for the use permitted hereunder. The provisions hereof are to
assure that the basic understandings between Landlord and Tenant with respect to
Tenant's use of the Premises and the benefits to Landlord therefrom are
preserved, consistent with the purpose and intent of applicable bankruptcy laws;
(f) Receivership. The employment of a receiver appointed by court
------------
order to take possession of substantially all of Tenant's assets or the
Premises, if such receivership remains undissolved for a period of thirty (30)
days;
(g) Attachment. The attachment, execution or other judicial seizure
----------
of all or substantially all of Tenant's assets or the Premises, if such
attachment or other seizure remains undismissed or undischarged for a period of
thirty (30) days after the levy thereof, or
-16-
(h) Insolvency. The admission by Tenant in writing of its inability
----------
to pay its debts as they become due, the filing by Tenant of a petition seeking
any reorganization or arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any present or future statute, law or
regulation, the filing by Tenant of an answer admitting or failing timely to
contest a material allegation of a petition filed against Tenant in any such
proceeding or, if within thirty (30) days after the commencement of any
proceeding against Tenant seeking any reorganization or arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
present or future statute, law or regulation, such proceeding shall not have
been dismissed.
14.2. Remedies Upon Tenant's Default.
------------------------------
(a) Upon the occurrence of any event of default described in Section
14.1 hereof (meaning that the applicable cure period, if any, has lapsed),
Landlord, in addition to and without prejudice to any other rights or remedies
it may have, shall have the immediate right to re-enter the Premises or any part
thereof and repossess the same, expelling and removing therefrom all persons and
property (which property may be stored in a public warehouse or elsewhere at the
cost and risk of and for the account of Tenant), using such force as may be
necessary to do so (as to which Tenant hereby waives any claim for loss or
damage that may thereby occur). In addition to or in lieu of such re-entry, and
without prejudice to any other rights or remedies it may have, Landlord shall
have the right either (i) to terminate this Lease and recover from Tenant all
damages incurred by Landlord as a result of Tenant's default, as hereinafter
provided, or (ii) to continue this Lease in effect and recover rent and other
charges and amounts as they become due.
(b) Even if Tenant has breached this Lease or abandoned the Premises,
this Lease shall continue in effect for so long as Landlord does not terminate
Tenant's right to possession under subsection (a) hereof and Landlord may
enforce all of its rights and remedies under this Lease, including the right to
recover rent as it becomes due, and Landlord, without terminating this Lease,
may exercise all of the rights and remedies of a lessor under California Civil
Code Section 1951.4 (lessor may continue lease in effect after lessee's breach
and abandonment and recover rent as it becomes due, if lessee has right to
sublet or assign, subject only to reasonable limitations), or any successor Code
section. Acts of maintenance, preservation or efforts to relet the Premises or
the appointment of a receiver upon application of Landlord to protect Landlord's
interests under this Lease shall not constitute a termination of Tenant's right
to possession.
(c) If Landlord terminates this Lease pursuant to this Section 14.2,
Landlord shall have all of the rights and remedies of a landlord provided by
Section 1951.2 of the Civil Code of the State of California, or any successor
Code section, which remedies include Landlord's right to recover from Tenant (i)
the worth at the time of award of the unpaid rent and additional rent which had
been earned at the time of termination, (ii) the worth at the time of award of
the amount by which the unpaid rent and additional rent which would have been
earned after termination until the time of award exceeds the amount of such
rental loss that Tenant proves could have been reasonably avoided, (iii) the
worth at the time of award of the amount by which the unpaid rent and additional
rent for the balance of the term after the time of award exceeds the amount of
such rental loss that Tenant proves could be reasonably avoided, and (iv)
-17-
any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant's failure to perform its obligations under this
Lease or which in the ordinary course of things would be likely to result
therefrom, including, but not limited to, the cost of recovering possession of
the Premises, expenses of reletting, including necessary repair, renovation and
alteration of the Premises, reasonable attorneys' fees, and other reasonable
costs. The "worth at the time of award" of the amounts referred to in clauses
(i) and (ii) above shall be computed by allowing interest at ten percent (10%)
per annum from the date such amounts accrued to Landlord. The "worth at the time
of award" of the amounts referred to in clause (iii) above shall be computed by
discounting such amount at one percentage point above the discount rate of the
Federal Reserve Bank of San Francisco at the time of award.
14.3. Remedies Cumulative. All rights, privileges and elections or
-------------------
remedies of Landlord contained in this Article 14 are cumulative and not
alternative to the extent permitted by law and except as otherwise provided
herein.
15. SUBORDINATION, ATTORNMENT AND SALE
----------------------------------
15.1. Subordination To Mortgage. This Lease, and any sublease entered
-------------------------
into by Tenant under the provisions of this Lease, shall be subject and
subordinate to any ground lease, mortgage, deed of trust, sale/leaseback
transaction or any other hypothecation for security now or hereafter placed upon
the Building, the Property, or both, and the rights of any assignee of Landlord
or of any ground lessor, mortgagee, trustee, beneficiary or leaseback lessor
under any of the foregoing, and to any and all advances made on the security
thereof and to all renewals, modifications, consolidations, replacements and
extensions thereof. If any mortgagee, trustee, beneficiary, ground lessor,
sale/leaseback lessor or assignee elects to have this Lease be an encumbrance
upon the Property prior to the lien of its mortgage, deed of trust, ground lease
or leaseback lease or other security arrangement and gives notice thereof to
Tenant, this Lease shall be deemed prior thereto, whether this Lease is dated
prior or subsequent to the date thereof or the date of recording thereof.
Tenant, and any sublessee, shall execute such documents as may reasonably be
requested by any mortgagee, trustee, beneficiary, ground lessor, sale/leaseback
lessor or assignee to evidence the subordination herein set forth or to make
this Lease prior to the lien of any mortgage, deed of trust, ground lease,
leaseback lease or other security arrangement, as the case may be, and if Tenant
fails to do so within ten (10) days after demand from Landlord, Tenant
constitutes and appoints Landlord as Tenant's attorney-in-fact and in Tenant's
name, place and stead to do so. Upon any default by Landlord in the performance
of its obligations under any mortgage, deed of trust, ground lease, leaseback
lease or assignment, Tenant (and any sublessee) shall, notwithstanding any
subordination hereunder, attorn to the mortgagee, trustee, beneficiary, ground
lessor, leaseback lessor or assignee thereunder upon demand and become the
tenant of the successor in interest to Landlord, at the option of such successor
in interest, and shall execute and deliver any instrument or instruments
confirming the attornment herein provided for.
15.2. Sale Of Landlord's Interest. Upon sale, transfer or assignment of
---------------------------
Landlord's entire interest in the Building and Property, Landlord shall be
relieved of its obligations hereunder with respect to liabilities accruing from
and after the date of such sale, transfer or assignment.
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15.3. Estoppel Certificates. Tenant shall at any time and from time to
---------------------
time, within ten (10) days after written request by Landlord, execute,
acknowledge and deliver to Landlord a certificate in writing stating: (i) that
this Lease is unmodified and in full force and effect, or if there have been any
modifications, that this Lease is in full force and effect as modified and
stating the date and the nature of each modification (ii) the date to which
rental and all other sums payable hereunder have been paid; (iii) that Landlord
is not in default in the performance of any of its obligations under this Lease,
that Tenant has given no notice of default to Landlord and that no event has
occurred which, but for the expiration of the applicable time period, would
constitute an event of default hereunder, or if Tenant alleges that any such
default, notice or event has occurred, specifying the same in reasonable detail;
and (iv) such other matters as may reasonably be requested by Landlord or any
institutional lender, mortgagee, trustee, beneficiary, ground lessor,
sale/leaseback lessor or prospective purchaser of the Property. Any such
certificate provided under this Section 15.3 may be relied upon by any lender,
mortgagee, trustee, beneficiary, assignee or successor in interest to Landlord,
by any prospective purchaser, by any purchaser on foreclosure or sale, by any
grantee under a deed in lieu of foreclosure of any mortgage or deed of trust on
the Property or Premises, or by any other third party. Failure to execute and
return within the required time any estoppel certificate requested hereunder
shall be deemed to be an admission of the truth of the matters set forth in the
form of certificate submitted to Tenant for execution.
15.4. Subordination to CC&Rs. This Lease, and any permitted sublease
----------------------
entered into by Tenant under the provisions of this Lease, shall be subject and
subordinate (a) to any declarations of covenants, conditions and restrictions
affecting the Property from time to time, provided that the terms of such
declarations are reasonable and do not discriminate against Tenant relative to
other similarly situated tenants occupying portions of the Property, and (b) to
the Declaration of Covenants, Conditions and Restrictions dated June 20, 1979
and recorded on July 5, 1979 as Instrument No.79-130777, Alameda County Records,
as amended from time to time (the "Master Declaration"), the provisions of which
------------------
Master Declaration are an integral part of this Lease. Tenant agrees to
execute, upon request by Landlord, any documents reasonably required from time
to time to evidence such subordination.
16. SECURITY
--------
16.1. Deposit. Concurrently with Tenant's execution of this Lease,
-------
Tenant shall deposit with Landlord the sum of Fifty-Six Thousand Two Hundred
Fifty Dollars ($56,250), which sum (the "Security Deposit") shall be held by
----------------
Landlord as security for the faithful performance of all of the terms,
covenants, and conditions of this Lease to be kept and performed by Tenant
during the term hereof. If Tenant defaults with respect to any provision of
this Lease, including, without limitation, the provisions relating to the
payment of rental and other sums due hereunder, Landlord shall have the right,
but shall not be required, to use, apply or retain all or any part of the
Security Deposit for the payment of rental or any other amount which Landlord
may spend or become obligated to spend by reason of Tenant's default or to
compensate Landlord for any other loss or damage which Landlord may suffer by
reason of Tenant's default. If any portion of the Security Deposit is so used
or applied, Tenant shall, within ten (10) days after written demand therefor,
deposit cash with Landlord in an amount sufficient to restore the Security
Deposit to its original amount and Tenant's failure to do so shall be a material
breach of this Lease. Landlord shall not be required to keep any deposit under
this Section separate from
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Landlord's general funds, and Tenant shall not be entitled to interest thereon.
If Tenant fully and faithfully performs every provision of this Lease to be
performed by it, the Security Deposit, or any balance thereof, shall be returned
to Tenant or, at Landlord's option, to the last assignee of Tenant's interest
hereunder, at the expiration of the term of this Lease and after Tenant has
vacated the Premises. In the event of termination of Landlord's interest in this
Lease, Landlord shall transfer all deposits then held by Landlord under this
Section to Landlord's successor in interest, whereupon Tenant agrees to release
Landlord from all liability for the return of such deposit or the accounting
thereof.
17. MISCELLANEOUS
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17.1. Notices. All notices, consents, waivers and other communications
-------
which this Lease requires or permits either party to give to the other shall be
in writing and shall be deemed given when delivered personally (including
delivery by private courier or express delivery service) or four (4) days after
deposit in the United States mail, registered or certified mail, postage
prepaid, addressed to the parties at their respective addresses as follows:
To Tenant: (until Commencement Date)
AllAdvantage.com
25954 Eden Landing Road
Hayward, CA 94545
Attn: Jamin Seid
(after Commencement Date)
AllAdvantage.com
4010 Point Eden Way
Hayward, CA 94545
Attn: Jamin Seid
To Landlord: Hayward Point Eden I Limited Partnership
c/o Britannia Developments, Inc.
1939 Harrison Street, Suite 715
Park Plaza Building
Oakland, CA 9461.2
Attn: T. J. Bristow
with copy to: Folger Levin & Kahn LLP
Embarcadero Center West
275 Battery Street, 23rd Floor
San Francisco, CA 94111
Attn: Donald E. Kelley, Jr.
or to such other address as may be contained in a notice at least fifteen (l5)
days prior to the address change from either party to the other given pursuant
to this Section. Rental payments and other sums required by this Lease to be
paid by Tenant shall be delivered to Landlord at
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Landlord's address provided in this Section, or to such other address as
Landlord may from time to time specify in writing to Tenant, and shall be deemed
to be paid only upon actual receipt.
17.2. Successors And Assigns. The obligations of this Lease shall run
----------------------
with the land, and this Lease shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns, except that the
original Landlord named herein and each successive Landlord under this Lease
shall be liable only for obligations accruing during the period of its ownership
of the Property, said liability terminating upon termination of such ownership
and passing to the successor lessor.
17.3. No Waiver. The failure of Landlord to seek redress for violation,
---------
or to insist upon the strict performance, of any covenant or condition of this
Lease shall not be deemed a waiver of such violation, or prevent a subsequent
act which would originally have constituted a violation from having all the
force and effect of an original violation.
17.4. Severability. If any provision of this Lease or the application
------------
thereof is held to be invalid or unenforceable, the remainder of this Lease or
the application of such provision to persons or circumstances other than those
as to which it is invalid or unenforceable shall not be affected thereby, and
each of the provisions of this Lease shall be valid and enforceable, unless
enforcement of this Lease as so invalidated would be unreasonable or grossly
inequitable under all the circumstances or would materially frustrate the
purposes of this Lease.
17.5. Litigation Between Parties. In the event of any litigation or
--------------------------
other dispute resolution proceedings between the parties hereto arising out of
or in connection with this Lease, the prevailing party shall be reimbursed for
all reasonable costs, including, but not limited to, reasonable accountants'
fees and attorneys' fees, incurred in connection with such proceedings
(including, but not limited to, any appellate proceedings relating thereto) or
in connection with the enforcement of any judgment or award rendered in such
proceedings. "Prevailing party" within the meaning of this Section shall
----------------
include, without limitation, a party who dismisses an action for recovery
hereunder in exchange for payment of the sums allegedly due, performance of
covenants allegedly breached or consideration substantially equal to the relief
sought in the action.
17.6. Surrender. A voluntary or other surrender of this Lease by
---------
Tenant, or a mutual termination thereof between Landlord and Tenant, shall not
result in a merger but shall, at the option of Landlord, operate either as an
assignment to Landlord of any and all existing subleases and subtenancies, or a
termination of all or any existing subleases and subtenancies. This provision
shall be contained in any and all assignments or subleases made pursuant to this
Lease.
17.7. Interpretation. The provisions of this Lease shall be construed
--------------
as a whole, according to their common meaning, and not strictly for or against
Landlord or Tenant. The captions preceding the text of each Section and
subsection hereof are included only for convenience of reference and shall be
disregarded in the construction or interpretation of this Lease.
17.8. Entire Agreement. This written Lease, together with the exhibits
----------------
hereto, contains all the representations and the entire understanding between
the parties hereto with respect to the
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subject matter hereof. Any prior correspondence, memoranda or agreements are
replaced in total by this Lease and the exhibits hereto. This Lease may be
modified only by an agreement in writing signed by each of the parties.
17.9. Governing Law. This Lease and all exhibits hereto shall be
-------------
construed and interpreted in accordance with and be governed by all the
provisions of the laws of the State of California.
17.10. No Partnership. The relationship between Landlord and Tenant is
--------------
solely that of a lessor and lessee. Nothing contained in this Lease shall be
construed as creating any type or manner of partnership, joint venture or joint
enterprise with or between Landlord and Tenant.
17.11. Financial Information. From time to time Tenant shall promptly
---------------------
provide directly to prospective lenders and purchasers of the Property
designated by Landlord such financial information pertaining to the financial
status of Tenant as Landlord may reasonably request; provided, Tenant shall be
--------
permitted to provide such financial information in a manner which Tenant deems
reasonably necessary to protect the confidentiality of such information. In
addition, from time to time, Tenant shall provide Landlord with such financial
information pertaining to the financial status of Tenant as Landlord may
reasonably request. Landlord agrees that all financial information supplied to
Landlord by Tenant shall be treated as confidential material, and shall not be
disseminated to any person or entity without Tenant's prior written consent,
except that Landlord shall be entitled to provide such information, subject to
reasonable precautions to protect the confidential nature thereof, (i) to
Landlord's partners and professional advisors, solely for use in connection with
Landlord's execution and enforcement of this Lease, and (ii) to prospective
lenders and/or purchasers of the Property, solely for use in connection with
their bona fide consideration of a proposed financing or purchase of the
Property, provided that such prospective lenders and/or purchasers are not
---------
engaged in businesses directly competitive with the business then being
conducted by Tenant. For purposes of this Section, without limiting the
generality of the obligations provided herein, it shall be deemed reasonable for
Landlord to request copies of Tenant's most recent audited annual financial
statements, or, if audited statements have not been prepared, unaudited
financial statements for Tenant's most recent fiscal year, accompanied by a
certificate of Tenant's chief financial officer that such financial statements
fairly present Tenant's financial condition as of the date(s) indicated.
Landlord and Tenant recognize the need of Tenant to maintain the
confidentiality of information regarding its financial status and the need of
Landlord to be informed of, and to provide to its partners and to prospective
lenders and purchasers of the Property financial information pertaining to,
Tenant's financial status. Landlord and Tenant agree to cooperate with each
other in achieving these needs within the context of the obligations set forth
in this Section.
17.12. Costs. If Tenant requests the consent of Landlord under any
-----
provision of this Lease for any act that Tenant proposes to do hereunder,
including, without limitation, assignment or subletting of the Premises, Tenant
shall, as a condition to doing any such act and the receipt of such consent,
reimburse Landlord promptly for any and all reasonable costs and expenses
incurred by Landlord in connection therewith, including, without limitation,
reasonable attorneys' fees.
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17.13. Time. Time is of the essence of this Lease, and of every term and
----
condition hereof.
17.14. Rules And Regulations. Tenant shall observe, comply with and
---------------------
obey, and shall cause its employees, agents and, to the best of Tenant's
ability, invitees to observe, comply with and obey such rules and regulations as
Landlord may promulgate from time to time for the safety, care, cleanliness,
order and use of the Premises, the Building and the Property.
17.15. Brokers. Landlord agrees to pay a brokerage commission to Cornish
-------
& Carey Commercial in connection with the consummation of this Lease in
accordance with a separate agreement. Tenant represents and warrants that no
other broker participated in the consummation of this Lease and agrees to
indemnify, defend and hold Landlord harmless against any liability, cost or
expense, including, without limitation, reasonable attorneys' fees, arising out
of any claims for brokerage commissions or other similar compensation in
connection with any conversations, prior negotiations or other dealings by
Tenant with any other broker.
17.16. Memorandum Of Lease. At any time during the term of this Lease,
-------------------
either party, at its sole expense, shall be entitled to record a memorandum of
this Lease and, if either party so elects, both parties agree to cooperate in
the preparation, execution, acknowledgement and recordation of such document in
reasonable form.
17.17. Corporate Authority. The person signing this Lease on behalf of
-------------------
Tenant warrants that he or she is fully authorized to do so and, by so doing, to
bind Tenant.
17.18. Execution and Delivery. Submission of this Lease for examination
----------------------
or signature by Tenant does not constitute an agreement or reservation of or
option for lease of the Premises. This instrument shall not be effective or
binding upon either party, as a lease or otherwise, until executed and delivered
by both Landlord and Tenant. This Lease may be executed in one or more
counterparts and by separate parties on separate counterparts, but each such
counterpart shall constitute an original and all such counterparts together
shall constitute one and the same instrument.
17.19. Exercise of Option. The effectiveness of this Lease is conditioned
------------------
on Tenant's proper exercise, on or before the effective date of this Lease, of
its option to lease from Landlord premises it is currently subleasing from
Worldcom, pursuant to that certain Option Agreement between Landlord and Tenant
dated September ___, 1999.
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IN WITNESS WHEREOF, the parties hereto have executed this Lease as of
the day and year first set forth above.
"Landlord" "Tenant"
Hayward Point Eden I Limited AllAdvantage.com,
Partnership, a Delaware limited a California corporation
partnership
By: Britannia Developments, Inc.,
a California corporation, Its By: /S/ JAMIN SEID
--------------
General Partner Its: Director of Real Estate.
By: /S/T.J. BRISTOW
---------------
T.J. Bristow By:_______________________________
President Its:___________________________
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EXHIBITS
--------
EXHIBIT A Location of Premises
EXHIBIT B Real Property Description
EXHIBIT C Acknowledgement of Lease Commencement
-25-
LOCATION OF PREMISES
--------------------
[LOCATION OF PREMISES MAP]
EXHIBIT A
---------
REAL PROPERTY DESCRIPTION
-------------------------
THE PROPERTY
Improved real property located in the City of Hayward, County of Alameda, State
of California more particularly described as follows:
Lot 7, Tract 4019, filed June 28, 1979, Map Book 100, Pages 97, 98 and 99,
Alameda County Records.
Subject to easements, restrictions and other matters of record affecting title.
THE CENTER
Improved real property located in the City of Hayward, County of Alameda, State
of California, more particularly described as follows:
Lots 1,2,3,4,5 and 7, Tract 4019, filed June 28, 1979, Map Book 100, Pages
97,98 and 99, Alameda County Records.
Subject to easements, restrictions and other matters of record affecting title.
EXHIBIT B
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ACKNOWLEDGEMENT OF LEASE COMMENCEMENT
-------------------------------------
This Acknowledgement is executed as of January 11, 2000, by Hayward Point
Eden I Limited Partnership, a Delaware limited partnership ("Landlord"), and
--------
AllAdvantage.com, a California corporation ("Tenant"), pursuant to Section 2.5
------
of the Lease dated December 22, 1999 between Landlord and Tenant (the "Lease")
-----
covering premises located at 4010 Point Eden Road, Hayward, CA 94545 (the
"Premises").
- ---------
Landlord and Tenant hereby acknowledge and agrees as follows:
1. The Commencement Date under the Lease is January, 2000.
2. The termination date under the Lease shall be December 31, 2000,
subject to any applicable provisions of the Lease for extension or early
termination thereof.
3. The agreed square footage of the Premises, as built, is 45,000 square
feet.
4. Tenant accepts the Premises and acknowledges the satisfactory
completion of all improvements therein (if any) required to be made by Landlord,
subject only to any applicable "punch list" or similar procedures specifically
provided under the Lease.
EXECUTED as of the date first set forth above.
"Landlord" "Tenant"
Hayward Point Eden I Limited AllAdvantage.com,
Partnership, a Delaware limited a California corporation
partnership
By: Britannia Developments, Inc.,
a California corporation, Its By: /S/ JAMIN SEID
---------------
General Partner Its: Director of Real Estate.
By: /S/ T.J. BRISTOW
----------------
T.J. Bristow By:________________________________
President Its:____________________________
EXHIBIT C
---------