EXHIBIT 10.17
BLDG: Macara A
OWNER: 500
PROP:
UNIT: 1
TENANT:
LEASE AGREEMENT
THIS LEASE, made this 21st day of May, 1996 between JOHN ARRILLAGA,
Trustee, or his Successor Trustee, UTA dated 7/20/77 (ARRILLAGA FAMILY TRUST) as
amended, and RICHARD T. PEERY, Trustee, or his Successor Trustee, UTA dated
7/20/77 (RICHARD T. PEERY SEPARATE PROPERTY TRUST) as amended, hereinafter
called Landlord, and POINTCAST, INC., a California corporation, hereinafter
called Tenant.
WITNESSETH:
Landlord hereby leases to Tenant and Tenant hereby hires and takes from
Landlord those certain premises (the "Premises") outlined in red on Exhibit "A",
attached hereto and incorporated herein by this reference thereto more
particularly described as follows:
All of that certain 64,800 +/- square foot, two-story building, parking and
landscape appurtenant thereto, to be constructed by Landlord and located at the
corner of West Maude Avenue and Macara Avenue, Sunnyvale, California (previously
known as 1001 West Maude Avenue but which address is subject to approval by the
City of Sunnyvale). Said Premises is more particularly shown within the area
outlined in Red on Exhibit A to be attached hereto. The entire parcel, of which
---------
the Premises is a part, and Tenant's exclusive parking are shown within the area
outlined in Green on Exhibit A to be attached hereto. The interior of the
---------
Premises will be improved as shown in Red on Exhibit B to be attached hereto.
---------
The building shell and site improvements shall be constructed in accordance with
the shell and site improvements specifications set forth on Exhibit A. Landlord
---------
shall use the same architect for the design of said building that Landlord uses
for the design of the building leased by Tenant under the Macara A Lease (as
hereinafter defined).
The word "Premises" as used throughout this lease is hereby defined to
include the nonexclusive use of landscaped areas, sidewalks, and driveways in
front of or adjacent to the Premises, and the nonexclusive use of the area
directly underneath or over such sidewalks and driveways. The gross leasable
area of the building shall be measured from outside of exterior walls to outside
of exterior walls, and shall include any atriums, covered entrances or egresses
and covered loading areas.
Said letting and hiring is upon and subject to the terms, covenants and
conditions hereinafter set forth and Tenant covenants as a material part of the
consideration for this Lease to perform and observe each and all of said terms,
covenants and conditions. This Lease is made upon the conditions of such
performance and observance.
1. USE Tenant shall use the Premises only in conformance with applicable
governmental laws, regulations, rules and ordinances for the purpose of general
office, light manufacturing, research and development, and storage and other
uses necessary for Tenant to conduct Tenant's business, provided that such uses
shall be in accordance with all applicable governmental laws and ordinances, and
for no other purpose. Tenant shall not do or permit to be done in or about the
Premises nor bring or keep or permit to be brought or kept in or about the
Premises anything which is prohibited by or will in any way increase the
existing rate of (or otherwise affect) fire or any insurance covering the
Premises or any part thereof, or any of its contents, or will cause a
cancellation of any insurance covering the Premises or any part thereof, or any
of its contents. Tenant shall not do or permit to be done anything in, on or
about the Premises which will in any way obstruct or interfere with the rights
of other tenants or occupants of the Premises or neighboring premises or injure
or annoy them, or use or allow the Premises to be used for any improper,
immoral, unlawful or objectionable purpose, nor shall Tenant cause, maintain or
permit any nuisance in, on or about the Premises. No sale by auction shall
be permitted on the Premises. Tenant shall not place any loads upon floors,
walls, or ceiling which endanger the structure, or place any harmful fluids or
other materials in the drainage system of the building, or overload existing
electrical or other mechanical systems. No waste materials or refuse shall be
dumped upon or permitted to remain upon any part of the Premises or outside of
the building in which the Premises are a part, except in trash containers placed
inside exterior enclosures designated by Landlord for that purpose or inside of
the building proper where designated by Landlord. No materials, supplies,
equipment, finished products or semi-finished products, raw materials or
articles of any nature shall be stored upon or permitted to remain outside the
Premises. Tenant shall not place anything or allow anything to be placed near
the glass of any window, door partition or wall which may appear unsightly from
outside the Premises. No loudspeaker or other device, system or apparatus which
can be heard outside the Premises shall be used in or at the Premises without
the prior written consent of Landlord. Tenant shall not commit or suffer to be
committed any waste in or upon the Premises. Tenant shall indemnify, defend and
hold Landlord harmless against any loss, expense, damage, reasonable attorneys'
fees, or liability arising out of failure of Tenant to comply with any
applicable law that governs Tenant's use of the Premises. Tenant shall comply
with any covenant, condition, or restriction ("CC&R's") affecting the Premises.
The provisions of this paragraph are for the benefit of Landlord only and shall
not be construed to be for the benefit of any tenant or occupant of the
Premises.
2. TERM*
A. The term of this Lease shall be for a period of FIVE (5) YEARS SIX (6)
months (unless sooner terminated as hereinafter provided) and, subject to
Paragraphs 2B and 3, shall commence on the 1st day of February, 1997 and end on
the 31st day of July, 2002.
B. Possession of the Premises shall be deemed tendered and the term of
the Lease shall commence when the first of the following occurs:
(a) One day after a Certificate of Occupancy is granted by the proper
governmental agency, or, if the governmental agency having jurisdiction over the
area in which the Premises are situated does not issue certificates of
occupancy, then the same number of days after certification by Landlord's
architect or contractor that Landlord's construction work has been completed);
and when the Tenant Improvements have been substantially completed for Tenant's
use and occupancy, in accordance with Exhibit B of this Lease Agreement; or
---------
(b) Upon the occupancy of the Premises by any Tenant's operating
personnel; or
(c) As otherwise agreed in writing.
*It is agreed in the event said Lease commences on a date other than the first
day of the month the term of the Lease will be extended to account for the
number of days in the partial month. The Basic Rent during the resulting
partial month will be pro-rated (for the number of days in the partial month) at
the Basic Rent rate scheduled for the projected commencement date as shown in
Paragraph 39.
page 1 of 8
3. POSSESSION If Landlord, for any reason whatsoever, cannot deliver
possession of said premises to Tenant at the commencement of the said term, as
hereinbefore specified, this Lease shall not be void or voidable; no obligation
of Tenant shall be affected thereby; nor shall Landlord or Landlord's agents be
liable to Tenant for any loss or damage resulting therefrom; but in that event
the commencement and termination dates of the Lease, and all other dates
affected thereby shall be revised to conform to the date of Landlord's delivery
of possession, as specified in Paragraph 2B, above. The above is, however,
subject to the provision that the period of delay of delivery of the Premises
shall not exceed 180 days from the commencement date herein (except those delays
caused by acts of god, strikes, war, utilities, governmental bodies, weather,
unavailable materials, and delays beyond Landlord's control shall be excluded in
calculating such period) in which instance Tenant, at its option, may, by
written notice to Landlord, terminate this Lease.
4. RENT
A. Basic Rent. Tenant agrees to pay to Landlord at such place as
Landlord may designate without deduction, offset, prior notice, or demand, and
Landlord agrees to accept as Basic Rent for the leased Premises the total sum of
TO BE DETERMINED Dollars ($ TO BE DETERMINED) in lawful money of the United
States of America, payable as follows:
See Paragraph 39 for Basic Rent Schedule and Aggregate Basic Rent
B. Time for Payment. Full monthly rent is due in advance on the first day
of each calendar month. In the event that the term of this Lease commences on a
date other than the first day of a calendar month, on the date of commencement
of the term hereof Tenant shall pay to Landlord as rent for the period from such
date of commencement to the first day of the next succeeding calendar month that
proportion of the monthly rent hereunder which the number of days between such
date of commencement and the first day of the next succeeding calendar month
bears to thirty (30). In the event that the term of this Lease for any reason
ends on a date other than the last day of a calendar month, on the first day of
the last calendar month of the term hereof Tenant shall pay to Landlord as rent
for the period from said first day of said last calendar month to and including
the last day of the term hereof that proportion of the monthly rent hereunder
which the number of days between said first day of said last calendar month and
the last day of the term hereof bears to thirty (30).
C. Late Charge. Notwithstanding any other provision of this Lease, if
Tenant is in default in the payment of rental as set forth in this Paragraph 4
when due, or any part thereof, Tenant agrees to pay Landlord, in addition to the
delinquent rental due, a late charge for each rental payment in default ten (10)
days. Said late charge shall equal ten percent (10%) of each rental payment so
in default.
D. Additional Rent. Beginning with the commencement date of the term of
this Lease, Tenant shall pay to Landlord or to Landlord's designated agent in
addition to the Basic Rent and as Additional Rent the following:
(a) All Taxes relating to the Premises as set forth in Paragraph 9,
and
(b) All insurance premiums relating to the Premises, as set forth in
Paragraph 12, and
(c) All charges, costs and expenses, which Tenant is required to pay
hereunder, together with all interest and penalties, costs and expenses
including reasonable attorneys' fees and legal expenses, that may accrue thereto
in the event of Tenant's failure to pay such amounts, and damages, reasonable
costs and expenses which Landlord may incur by reason of default of Tenant or
failure on Tenant's part to comply with the terms of this Lease. In the event of
nonpayment by Tenant of Additional Rent, Landlord shall have all the rights and
remedies with respect thereto as Landlord has for nonpayment of rent.
The Additional Rent due hereunder shall be paid to Landlord or Landlord's
agent (i) within five days for taxes and insurance and within thirty (30) days
for all other Additional Rent items after presentation of invoice from Landlord
or Landlord's agent setting forth such Additional Rent and/or (ii) at the option
of Landlord, Tenant shall pay to Landlord monthly, in advance, Tenant's prorata
share of an amount estimated by
Landlord to be Landlord's approximate average monthly expenditure for such
Additional Rent items, which estimated amount shall be reconciled within 120
days of each calendar year or more frequently if Landlord elects to do so at
Landlord's sole and absolute discretion as compared to Landlord's actual
expenditure for said Additional Rent items, with Tenant paying to Landlord, upon
demand, any amount of actual expenses expended by Landlord in excess of said
estimated amount, or Landlord refunding to Tenant (providing Tenant is not in
default in the performance of any of the terms, covenants and conditions of this
Lease)in which case Landlord shall credit such amount towards cure of Tenant's
default and, once default is cured, return any balance to Tenant any amount of
estimated payments made by Tenant in excess of Landlord's actual expenditures
for said Additional Rent items.
E. Fixed Management Fee. Beginning with the Commencement Date of the Term
--------------------
of this Lease, Tenant shall pay to Landlord, in addition to the Basic Rent and
Additional Rent, a fixed monthly management fee equal to 1% of the Basic Rent
due for each month during the Lease Term ("Management Fee")
The respective obligations of Landlord and Tenant under this paragraph
shall survive the expiration or other termination of the term of this Lease, and
if the term hereof shall expire or shall otherwise terminate on a day other than
the last day of a calendar year, the actual Additional Rent incurred for the
calendar year in which the term hereof expires or otherwise terminates shall be
determined and settled on the basis of the statement of actual Additional Rent
for such calendar year and shall be prorated in the proportion which the number
of days in such calendar year preceding such expiration or termination bears to
365.
F. Place of Payment of Rent and Additional Rent. All Basic Rent hereunder
and all payments hereunder for Additional Rent shall be paid to Landlord at the
office of Landlord at PEERY/ARRILLAGA, File 1504, P.O. Box 60000, San Francisco,
CA 94160 or to such other person or to such other place as Landlord may from
time to time designate in writing.
G. Security Deposit Subject to Paragraph 49, concurrently with Tenant's
execution of this Lease, Tenant shall deposit with Landlord the sum of TWO
HUNDRED SIXTY FIVE THOUSAND SIX HUNDRED EIGHTY AND 00/100----- Dollars
($265,680.00-------------. Said sum shall be held by Landlord as a Security
Deposit for the faithful performance by Tenant 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, but not limited to, the provisions relating to the payment of rent
and any of the monetary sums due herewith, Landlord may (but shall not be
required to) use, apply or retain all or any part of this Security Deposit for
the payment of any other amount which Landlord may spend by reason of Tenant's
default or to compensate Landlord for
page 2 of 8
any other loss or damage which Landlord may suffer by reason of Tenant's
default. If any portion of said Deposit is so used or applied, Tenant shall,
within ten (10) days after written demand therefor, deposit cash with Landlord
in the amount sufficient to restore the Security Deposit to its original amount.
Tenant's failure to do so shall be a material breach of this Lease. Landlord
shall not be required to keep this Security Deposit separate from its general
funds, and Tenant shall not be entitled to interest of such Deposit. 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)
within thirty (30) days of the expiration of the Lease term and after Tenant has
vacated the Premises. In the event of termination of Landlord's interest in this
Lease, Landlord shall transfer said Deposit to Landlord's successor in interest
whereupon Tenant agrees to release Landlord from liability for the return of
such Deposit or the accounting therefor. The use or disposition of the Security
Deposit shall be subject to the provisions of California Civil Code Section
1950.7.
5. ACCEPTANCE AND SURRENDER OF PREMISES By entry hereunder, Tenant accepts the
Premises as being in good and sanitary order, condition and repair and accepts
the building and improvements included in the Premises in their present
condition and without representation or warranty by Landlord as to the condition
of such building or as to the use or occupancy which may be made thereof. Any
exceptions to the foregoing must be by written agreement executed by Landlord
and Tenant. Tenant agrees on the last day of the Lease term, or on the sooner
termination of this Lease, to surrender the Premises promptly and peaceably to
Landlord in good condition and repair (damage by Acts of God, fire, normal wear
and tear excepted), with all interior walls painted or cleaned so that they
appear freshly painted, and repaired and replaced, if damaged; all floors
cleaned and waxed; all carpets cleaned and shampooed; all broken, marred and
nonconforming acoustical ceiling tiles replaced; all windows washed; the
airconditioning and heating systems serviced by a reputable and licensed service
firm and in good operating condition and repair; the plumbing and electrical
systems and lighting in good order and repair, including replacement of any
burned out or broken light bulbs or ballasts; the lawn and shrubs in good
condition including the replacement of any dead or damaged plantings; the
sidewalk, driveways and parking areas in good order, condition and repair;
together with all alterations, additions, and improvements which may have been
made in, to, or on the Premises (except moveable trade fixtures installed at the
expenses of Tenant) except that Tenant shall ascertain from Landlord within
ninety (90) days before the end of the term of this Lease whether Landlord
desires to have the Premises or any part or parts thereof restored to their
condition and configuration as when the Premises were delivered to Tenant and if
Landlord shall so desire, then Tenant shall restore said Premises or such part
or parts thereof before the end of this Lease at Tenant's sole cost and expense.
Tenant, on or before the end of the term or sooner termination of this Lease,
shall remove all of Tenant's personal property and trade fixtures from the
Premises, and all property not so removed on or before the end of the term or
sooner termination of this Lease shall be deemed abandoned by Tenant and title
to same shall thereupon pass to Landlord without compensation to Tenant.
Landlord may, upon termination of this Lease, remove all moveable furniture and
equipment so abandoned by Tenant, at Tenant's sole cost and repair any damage
caused by such removal at Tenant's sole cost. If the Premises be not surrendered
at the end of the term or sooner termination of this Lease, Tenant shall
indemnify Landlord against loss or liability resulting from the delay by Tenant
in so surrendering the Premises including, without limitation, any claims made
by any succeeding tenant founded on such delay. Nothing contained herein shall
be construed as an extension of the term hereof or as a consent of Landlord to
any holding over by Tenant. The voluntary or other surrender of this Lease or
the Premises by Tenant or a mutual cancellation of this Lease shall not work as
a merger and, at the option of Landlord, shall either terminate all or any
existing subleases or subtenancies or operate as an assignment to Landlord of
all or any such subleases or subtenancies. See Paragraph 52.
6. ALTERATIONS AND ADDITIONS Tenant shall not make, or suffer to be made, any
alteration or addition to the Premises, or any part thereof, without the written
consent of Landlord first had and obtained by Tenant (such consent not to be
unreasonably withheld), but at the cost of Tenant, and any addition to, or
alteration of, the
Premises, except moveable furniture and trade fixtures, shall at once become a
part of the Premises and belong to Landlord. Landlord reserves the right to
approve all contractors and mechanics proposed by Tenant to make such
alterations and additions. Tenant shall refrain title to all moveable furniture
and trade fixtures placed in the Premises. All heating, lighting, electrical,
airconditioning, floor to ceiling partitioning, permanent hard walls, drapery,
carpeting, and floor installations made by Tenant, together with a property that
has become an integral part of the Premises, shall not be deemed trade fixtures.
Tenant agrees that it will not proceed to make such alteration or additions,
without having obtained consent from Landlord to do so, and until five (5) days
from the receipt of such consent, in order that Landlord may post appropriate
notices to avoid any liability to contractors or material suppliers for payment
for Tenant's improvements. Tenant will at all times permit such notices to be
posted and to remain posted until the completion of work. Tenant shall, if
required by Landlord, secure at Tenant's own cost and expense, a completion and
lien indemnity bond, satisfactory to Landlord, for such work. Tenant further
covenants and agrees that any mechanic's lien filed against the Premises for
work claimed to have been done for, or materials claimed to have been furnished
to Tenant, will be discharged by Tenant, by bond or otherwise, within ten (10)
days after the filing thereof, at the cost and expense of Tenant. Any exceptions
to the foregoing must be made in writing and executed by both Landlord and
Tenant. See Paragraph 52.
7. TENANT MAINTENANCE Tenant shall, at its sole cost and expense, keep and
maintain the Premises (including appurtenances) and every part thereof in a high
standard of maintenance and repair, or replacement, and in good and sanitary
condition. Tenant's maintenance and repair responsibilities herein referred to
include, but are not limited to, janitorization, all windows (interior and
exterior), window frames, plate glass and glazing (destroyed by accident or act
of third parties), truck doors, plumbing systems (such as water and drain lines,
sinks, toilets, faucets, drains, showers and water fountains), electrical
systems (such as panels, conduits, outlets, lighting fixtures, lamps, bulbs,
tubes and ballasts), heating and airconditioning systems (such as compressors,
fans, air handlers, ducts, mixing boxes, thermostats, time clocks, boilers,
heaters, supply and return grills), structural elements and exterior surfaces of
the building, store fronts, roofs, downspouts, all interior improvements within
the premises including but not limited to wall coverings, window coverings,
carpet, floor coverings, partitioning, ceilings, doors (both interior and
exterior), including closing mechanisms, latches, locks, skylights (if any),
automatic fire extinguishing systems, and elevators and all other interior
improvements of any nature whatsoever, and all exterior improvements including
but not limited to landscaping, sidewalks, driveways, parking lots including
striping and sealing, sprinkler systems, lighting, ponds, fountains, waterways,
and drains. Tenant agrees to provide carpet shields under all rolling chairs or
to otherwise be responsible for wear and tear of the carpet caused by such
rolling chairs if such wear and tear exceeds that caused by normal foot traffic
in surrounding areas. Areas of excessive wear shall be replaced at Tenant's sole
expense upon Lease termination. Tenant hereby waives all rights under, and
benefits of, Subsection 1 of Section 1932 and Section 1941 and 1942 of the
California Civil Code and under any similar law, statute or ordinance now or
hereafter in effect. In the event any of the above maintenance responsibilities
apply to any other tenant(s) of Landlord where there is common usage with other
tenant(s), such maintenance responsibilities and charges shall be allocated to
the leased Premises by square footage or other equitable basis as calculated and
determined by Landlord. See Paragraph 44
8. UTILITIES Tenant shall pay promptly, as the same become due, all charges
for water, gas, electricity, telephone, telex and other electronic communication
service, sewer service, waste pick-up and any other utilities, materials or
services furnished directly to or used by Tenant on or about the Premises during
the term of this Lease, including, without limitation, any temporary or
permanent utility surcharge or other exactions whether or not hereinafter
imposed. In the event the above charges apply to any other tenant(s) of Landlord
where there is common usage with other tenant(s), such charges shall be
allocated to the leased Premises by square footage or other equitable basis as
calculated and determined by Landlord.
Landlord shall not be liable for and Tenant shall not be entitled to any
abatement or reduction of rent by reason of any interruption or failure of
utility services to the
Premises when such interruption or failure is caused by accident, breakage,
repair, strikes, lockouts, or other labor disturbances or labor disputes of any
nature, or by any other cause, similar or dissimilar, beyond the reasonable
control of Landlord.
9. TAXES
A. As Additional Rent and in accordance with Paragraph 4D of this Lease,
Tenant shall pay to Landlord, or if Landlord so directs, directly to the Tax
Collector, all Real Property Taxes relating to the Premises. In the event the
Premises leased hereunder consist of only a portion of the entire tax parcel,
Tenant shall pay to Landlord Tenant's proportionate share of such real estate
taxes allocated to the leased Premises by square footage or other reasonable
basis as calculated and determined by Landlord. If the tax billing pertains 100%
to the Leased Premises, and the Landlord chooses to have Tenant pay said real
estate taxes directly to the Tax Collector, then in such event it shall be the
responsibility of Tenant to obtain the tax and assessment bills and pay, prior
to delinquency, the applicable real property taxes and assessments pertaining to
the leased Premises, and failure to receive a bill for taxes and/or assessments
shall not provide a basis for cancellation of or nonresponsibility for payment
of penalties for nonpayment or late payment by Tenant. The term "Real Property
Taxes", as used herein, shall mean (i) all taxes, assessments, levies and other
charges of any kind or nature whatsoever, general and special, foreseen and
unforeseen (including all installments of principal and interest required to pay
any general or special assessments for public improvements and any increases
resulting from reassessments caused by any change in ownership of the Premises)
now or hereafter imposed by any governmental or quasi-governmental authority or
special district having the direct or indirect power to tax or levy assessments,
which are levied or assessed against, or with respect to the value, occupancy or
use of, all or any portion of the Premises (as now constructed or as may at any
time hereafter be constructed, altered, or otherwise changed) or Landlord's
interest therein; any improvements located within the Premises (regardless of
ownership); the fixtures, equipment and other property of Landlord, real or
personal, that are an integral part of and located in the Premises; or parking
areas, public utilities, or energy within the Premises; (ii) all charges, levies
or less imposed by reason of environmental regulation or other governmental
control of the Premises; and (iii) all costs and fees (including
page 3 of 8
reasonable attorneys' fees) incurred by Landlord in reasonably contesting any
Real Property Tax and in negotiating with public authorities as to any Real
Property Tax. If at any time during the term of this Lease the taxation or
assessment of the Premises prevailing as of the commencement date of this Lease
shall be altered so that in lieu of or in addition to any Real Property Tax
described above there shall be levied, assessed or imposed (whether by reason of
a change in the method of taxation or assessment, creation of a new tax or
charge, or any other cause) an alternate or additional tax or charge (i) on the
value, use or occupancy of the Premises or Landlord's interest therein or (ii)
on or measured by the gross receipts, income or rentals from the Premises, on
Landlord's business of leasing the Premises, or computed in any manner with
respect to the operation of the Premises, then any such tax or charge, however
designated, shall be included with the meaning of the term "Real Property Taxes"
for purposes of this Lease. If any Real Property Tax is based upon property or
rents unrelated to the Premises, then only that part of such Real Property Tax
that is fairly allocable to the Premises shall be included within the meaning of
the term "Real Property Taxes". Notwithstanding the foregoing, the term "Real
Property Taxes" shall not include estate, inheritance, gift or franchise taxes
of Landlord or the federal or state net income tax imposed on Landlord's income
from all sources. See Paragraph 53
8. Taxes on Tenant's Property Tenant shall be liable for and shall pay ten
days before delinquency, taxes levied against any personal property or trade
fixtures placed by Tenant in or about the Premises. If any such taxes on
Tenant's personal property or trade fixtures are levied against Landlord or
Landlord's property or if the assessed value of the Premises is increased by the
inclusion therein of a value placed upon such personal property or trade
fixtures of Tenant and if Landlord, after written notice to Tenant, pays the
taxes based on such increased assessment, which Landlord shall have the right to
do regardless of the validity thereof, but only under proper protest if
requested by Tenant. Tenant shall upon demand, as the case may be, repay to
Landlord the taxes so levied against Landlord, or the proportion of such taxes
resulting from such increase in the assessment; provided that in any such event
Tenant shall have the right, in the name of Landlord and with Landlord's full
cooperation, to bring suit in any court of competent jurisdiction to recover the
amount of such taxes so paid under protext, and any amount so recovered shall
belong to Tenant.
10. LIABILITY INSURANCE Tenant, at Tenant's expense, agrees to keep in force
during the term of this Lease a policy of commercial general liability insurance
with combined single limit coverage of not less than Two Million Dollars
($2,000,000) per occurrence for bodily injury and property damage occurring in,
on or about the Premises, including parking and landscaped areas. Such insurance
shall be primary and noncontributory as respects any insurance carried by
Landlord. The policy or policies effecting such insurance shall name Landlord as
additional insureds, and shall insure any liability of Landlord, contingent or
otherwise, as respects acts or omissions of Tenant, its agents, employees or
invitees or otherwise by any conduct or transactions of any of said persons in
or about or concerning the Premises, including any failure of Tenant to observe
or perform any of its obligations hereunder; shall be issued by an insurance
company admitted to transact business in the State of California; and shall
provide that the insurance effected thereby shall not be canceled, except upon
thirty (30) days' prior written notice to Landlord. A certificate of insurance
of said policy shall be delivered to Landlord. If, during the term of this
Lease, in the considered opinion of Landlord's Lender, insurance advisor, or
counsel, the amount of insurance described in this Paragraph 10 is not adequate,
Tenant agrees to increase said coverage to such reasonable amount as Landlord's
Lender, insurance advisor, or counsel shall deem adequate.
11. TENANT'S PERSONAL PROPERTY INSURANCE AND WORKMAN'S COMPENSATION INSURANCE
Tenant shall maintain a policy or policies of fire and property damage insurance
in "all risk" form with a sprinkler leakage endorsement insuring the personal
property, inventory, trade fixtures, and leasehold improvements within the
leased Premises for the full replacement value thereof. The proceeds from any of
such policies shall be used for the repair or replacement of such items so
insured.
Tenant shall also maintain a policy or policies of workman's compensation
insurance and any other employee benefit insurance sufficient to comply with all
laws.
12. PROPERTY INSURANCE Landlord shall purchase and keep in force, and as
Additional Rent and in accordance with Paragraph 4D of this Lease, Tenant shall
pay to Landlord (or Landlord's agent if so directed by Landlord) Tenant's
proportionate share (allocated to the leased Premises by square footage or other
equitable basis as calculated and determined by Landlord) of the deductibles on
insurance claims and the cost of, policy or policies of insurance covering loss
or damage to the Premises (excluding routine maintenance and repairs and
incidental damage or destruction caused by accidents or vandalism for which
Tenant is responsible under Paragraph 7) in the amount of the full replacement
value thereof, providing protection against those perils included within the
classification of "all risks" insurance and flood and/or earthquake insurance,
if available, plus a policy of rental income insurance in the amount of one
hundred (100%) percent of twelve (12) months Base Rent, plus sums paid as
Additional Rent. If such insurance cost is increased due to Tenant's use of the
Premises, Tenant agrees to pay to Landlord the full cost of such increase.
Tenant shall have no interest in nor any right to the proceeds of any insurance
procured by Landlord for the Premises.
Landlord and Tenant do each hereby respectively released the other, to the
extent of insurance coverage of the releasing party, from any liability for loss
or damage caused by fire or any of the extended coverage casualties included in
the releasing party's insurance policies, irrespective of the cause of such fire
or casualty; provided, however, that if the insurance policy of either releasing
party prohibits such waiver, then this waiver shall not take effect until
consent to such waiver is obtained. If such waiver is so prohibited, the insured
party affected shall promptly notify the other party thereof.
13. INDEMNIFICATION Landlord shall not be liable to Tenant and Tenant hereby
waives all claims against Landlord for any injury to or death of any person or
damage to or destruction of property in or about the Premises by or from any
cause whatsoever, including, without limitation, gas, fire, oil, electricity or
leakage of any character from the roof, walls, basement or other portion of the
Premises but excluding, however, the willful misconduct or negligence of
Landlord, its agents, servants, employees, invitees, or contractors of which
negligence Landlord has knowledge and reasonable time to correct. Except as to
injury to person or damage to property to the extent arising from the willful
misconduct or the negligence of Landlord, its agents, servants, employees,
invitees or contractors, and subject to the last two (2) sentences of Paragraph
12, Tenant shall hold Landlord harmless from and defend Landlord against any and
all expenses, including reasonable attorneys' fees, in connection therewith,
arising out of any injury to or death of any person or damage to or destruction
of property occurring in, on or about the Premises, or any part thereof, from
any cause whatsoever.
14. COMPLIANCE Tenant, at its sole cost and expense, shall promptly comply
with all laws, statutes, ordinances and governmental rules, regulations or
requirements now or hereafter in effect; with the requirements of any board of
the fire underwriters or other similar body now or hereafter constituted; and
with any direction or occupancy certificate issued pursuant to law by any public
officer; provided, however, that no such failure shall be deemed a breach of the
provisions if Tenant, immediately upon notification, commences to remedy or
rectify said failure. The judgment of any court of competent jurisdiction of the
admission of Tenant in any action against Tenant, whether Landlord be a party
thereto or not, that Tenant has violated any such law, statute, ordinance or
governmental rule, regulation, requirement, direction or provision, shall be
conclusive of that fact as between Landlord and Tenant. Tenant shall, at its
sole cost and expense, comply with any and all requirements pertaining to said
Premises, of any insurance organization or company, necessary for the
maintenance of reasonable fire and public liability insurance covering
requirements pertaining to said Premises, of any insurance organization or
company, necessary for the maintenance of reasonable fire and public liability
insurance covering the Premises. See Paragraph 45
15. LIENS Tenant shall keep the Premises free from any liens arising out of
any work performed, materials furnished or obligation incurred by Tenant. In
the event that Tenant shall not, within ten (10) days following the imposition
of such lien, cause the same to be released of record, Landlord shall have in
addition to all other remedies provided herein and by law, the right, but no
obligation, to cause the same to be
released by such means as it shall deem proper, including payment of the claim
giving rise to such lien. All sums paid by Landlord for such purpose, and all
expenses incurred by it in connection therewith, shall be payable to Landlord by
Tenant on demand with interest at the prime rate of interest as quoted by the
Bank of America.
16. ASSIGNMENT AND SUBLETTING Tenant shall not assign, transfer, or
hypothecate the leasehold estate under this Lease, or any interest therein, and
shall not sublet the Premises, or any part thereof, or any right or privilege
appurtenant thereto, or suffer any other person or entity to occupy or use the
Premises, or any portion thereof, without, in each case, the prior written
consent of Landlord which consent will not be unreasonably withheld. As a
condition for granting this consent to any assignment, transfer, or subletting,
Landlord may require that Tenant agrees to pay to Landlord, as additional rent,
fifty percent (50%) of all rents or additional consideration received by Tenant
from its assignees, transferees, or subtenants in excess of the rent payable by
Tenant to Landlord hereunder provided, however, that before sharing such excess
rent, Tenant shall first be entitled to recover from such excess rent the amount
of any reasonable leasing commissions paid by Tenant to third parties not
affiliated with Tenant. Tenant shall by thirty (30) days written notice, advise
Landlord of its intent to assign or transfer Tenant's interest in the Lease or
sublet the Premises or any portion thereof for any part of the term hereof.
Within thirty (30) days after receipt of said written notice, Landlord may, in
its sole discretion, elect to terminate this Lease as to the portion of the
Premises described in Tenant's notice on the date specified in Tenant's notice
by giving written notice of such election to terminate. If no such notice to
terminate is given to Tenant within said thirty (30) day period, Tenant may
proceed to locate an acceptable sublessee, assignee, or other transferee for
presentment to Landlord for Landlord's approval, all in accordance with the
terms, covenants, and conditions of this paragraph 16. If Tenant intends to
sublet the entire Premises and Landlord elects to terminate this Lease, this
Lease shall be terminated on the date specified in Tenant's notice. If,
however, this Lease shall terminate pursuant to the foregoing with respect to
less than all the Premises, the rent, as defined and reserved hereinabove shall
be adjusted on a pro rata basis to the number of square feet retained by Tenant,
and this Lease as so amended shall continue in full force and effect.
Notwithstanding the above, Landlord shall not have the right to terminate said
Lease for preauthorized sublet(s) or assignment(s) as directed in Paragraph 46.
In the event Tenant is allowed to assign, transfer or sublet the whole or any
part of the Premises, with the prior written
page 4 of 8
consent of Landlord, no assignee, transferee or subtenant shall assign or
transfer this Lease, either in whole or in part, or sublet the whole or any part
of the Premises, without also having obtained the prior written consent of
Landlord which consent shall not be unreasonably withheld. A consent of
Landlord to one assignment, transfer, hypothecation, subletting, occupation or
use by any other person shall not release Tenant from any Tenant's obligations
hereunder or be deemed to be a consent to any subsequent similar or dissimilar
assignment, transfer, hypothecation, subletting, occupation or use by any other
person. Any such assignment, transfer, hypothecation, subletting, occupation or
use without such consent shall be void and shall constitute a breach of this
Lease by Tenant and shall, at the option of Landlord exercised by written notice
to Tenant, terminate this Lease. The leasehold estate under this Lease shall
not, nor shall any interest therein, be assignable for any purpose by operation
of law without the written consent of Landlord which consent shall not be
unreasonably withheld. As a condition to its consent, Landlord may require
Tenant to pay all expenses in connection with the assignment, and Landlord may
require Tenant's assignee or transferee (or other assignees or transferees) to
assume in writing all of the obligations under this Lease and for Tenant to
remain liable to Landlord under the Lease. Notwithstanding the above, in no
event will Landlord consent to a sub-sublease. See Paragraph 46.
17. SUBORDINATION AND MORTGAGES In the event Landlord's title or leasehold
interest is now or hereafter encumbered by a deed of trust, upon the interest of
Landlord in the land and buildings in which the demised Premises are located, to
secure a loan from a lender (hereinafter referred to as "Lender") to Landlord,
Tenant shall, at the request of Landlord or Lender, execute in writing an
agreement subordinating its rights under this Lease to the lien of such deed of
trust, or, if so requested, agreeing that the lien of Lender's deed of trust
shall be or remain subject and subordinate to the rights of Tenant under this
Lease. Notwithstanding any such subordination, Tenant's possession under this
Lease shall not be disturbed if Tenant is not in default and so long as Tenant
shall pay all rent and observe and perform all of the provisions set forth in
this Lease.
18. ENTRY BY LANDLORD Landlord reserves, and shall at all reasonable times
after at least 24 hours notice (except in emergencies) have, the right to enter
the Premises to inspect them; to perform any services to be provided by Landlord
hereunder,; to make repairs or provide any services to a contiguous tenant(s);
to submit the Premises to prospective purchasers, mortgagers or tenants; to post
notices of nonresponsibility; and to alter, improve or repair the Premises or
other parts of the building, all without abatement of rent, and may erect
scaffolding and other necessary structures in or through the Premises where
reasonable required by the character of the work to be performed, however that
the business of Tenant shall be interfered with to the least extent that is
reasonably practical. Any entry to the Premises by Landlord for the purposes
provided for herein shall not under any circumstances be construed or deemed to
be a forcible or unlawful entry into or a detainer of the Premises or an
eviction, actual or constructive, of Tenant from the Premises or any portion
thereof. See Paragraph 55
19. BANKRUPTCY AND DEFAULT The commencement of a bankruptcy action or
liquidation action or reorganization action or insolvency action or an
assignment of or by Tenant for the benefit of creditors, or any similar action
undertaken by Tenant, or the insolvency of Tenant, shall, at Landlord's option,
constitute a breach of this Lease by Tenant. If the trustee or receiver
appointed to serve during a bankruptcy, liquidation, reorganization, insolvency
or similar action elects to reject Tenant's unexpired Lease, the trustee or
receiver shall notify Landlord in writing of its election within thirty (30)
days after an order for relief in a liquidation action or within thirty (30)
days after the commencement of any action.
Within thirty (30) days after court approval of the assumption of this
Lease, the trustee or receiver shall cure (or provide adequate assurance to the
reasonable satisfaction of Landlord that the trustee or receiver shall cure) any
and all previous defaults under the unexpired Lease and shall compensate
Landlord for all actual pecuniary loss and shall provide adequate assurance of
future performance under said Lease to the reasonable satisfaction of Landlord.
Adequate assurance of future performance, as used herein, includes, but shall
not be limited to: (i) assurance of source and payment of rent, and other
consideration due under this Lease; (ii) assurance that the assumption or
assignment of this Lease will not breach substantially any provision, such as
radius, location, use, or exclusivity provision, in any agreement relating to
the above described Premises.
Nothing contained in this section shall affect the existing right of
Landlord to refuse to accept an assignment upon commencement of or in connection
with a bankruptcy, liquidation, reorganization or insolvency action or an
assignment of Tenant for the benefit of creditors or other similar act. Nothing
contained in this Lease shall be construed as giving or granting or creating an
equity in the demised Premises to Tenant. In no event shall the leasehold
estate under this Lease, or any interest therein, be assigned by voluntary or
involuntary bankruptcy proceeding without the prior written consent of Landlord.
In no event shall this Lease or any rights or privileges hereunder be an asset
of Tenant under any bankruptcy, insolvency or reorganization proceedings.
The failure to perform or honor any covenant, condition or representation
made under this Lease shall constitute a default hereunder by Tenant upon
expiration of the appropriate grace period hereinafter provided. Tenant shall
have a period of five (5) days from the date of written notice from Landlord
within which to cure any default to the payment of rental or adjustment thereto.
Tenant shall have a period of thirty (30) days from the date of written notice
from Landlord within which to cure any other default under this Lease; provided,
however, that if the nature of Tenant's failure is such that more than thirty
(30) days is reasonably required to cure the same, Tenant shall not be in
default so long as Tenant commences performance with in such thirty (30) day
period and thereafter prosecutes the same to completion. Upon an uncured
default of this Lease by Tenant, Landlord shall have the following rights and
remedies in addition to any other rights or remedies available to Landlord at
law or in equity:
(a) The rights and remedies provided for by California Civil Code Section
1951.2, including but not limited to, recovery of the worth at the time of award
of the amount by which the unpaid rent for the balance of the term after the
time of award exceeds the amount of rental loss for the same period that Tenant
proves could be reasonable avoided, as computed pursuant to subsection (b) of
said Section 1951.2. Any proof by Tenant under subparagraphs (2) and (3) of
Section 1951.2 of the California Civil Code of the amount of rental loss that
could be reasonably avoided shall be made in the following manner: Landlord and
Tenant shall each select a licensed real estate broker in the business of
renting property of the same type and use as the Premises and in the same
geographic vicinity. Such two real estate brokers shall select third licensed
real estate broker, and the three licensed real estate brokers so selected shall
determine the amount of the rental loss that could be reasonably avoided from
the balance of the term of this Lease after the time of award. The decision of
the majority of said licensed real estate brokers shall be final and binding
upon the parties hereto.
(b) The rights and remedies provided by California Civil Code Section which
allows Landlord to continue the Lease in effect and to enforce all of its rights
and remedies under this Lease, including the right to recover rent as it becomes
due, for so long as Landlord does not terminate Tenant's right to possession;
acts of maintenance or preservation, efforts to relet the Premises, or the
appointment of a receiver upon Landlord's initiative to protect its interest
under this Lease shall not constitute a termination of Tenant's right to
possession.
(c) The right to terminate this Lease by giving notice to Tenant in
accordance with applicable law.
(d) To the extent permitted by law and in any event not less that three (3)
business days' prior written notice, the right and power, to enter the Premises
and remove therefrom all persons and property, to store such property in a
public warehouse or elsewhere at the cost of and for the account of Tenant, and
to sell such property and apply such proceeds therefrom pursuant to applicable
California law. Landlord may from time to time sublet the Premises or any part
thereof for such term or terms (which may extend beyond the term of this Lease)
and at such rent and such other terms as Landlord in its reasonable sole
discretion may deem advisable, with the right to make alterations and repairs to
the Premises. Upon each subletting, (i) Tenant shall be immediately liable to
pay Landlord, in addition to indebtedness other than rent due hereunder, the
reasonable cost of such subletting, including, but not limited to, reasonable
attorneys' fees, and any real estate commissions actually paid, and the cost of
such reasonable alterations and repairs incurred by Landlord and the amount, if
any, by which the rent hereunder for the period of such subletting (to the
extent such period does not exceed the term hereof) exceeds the amount to be
paid as renter for the Premises for such period or (ii) at the option of
Landlord, rents received from such subletting shall be applied first to payment
of indebtedness other than rent due hereunder from Tenant to Landlord; second,
to the payment of any costs of such subletting and of such alterations and
repairs; third to payment of rent due and unpaid hereunder; and the residue, if
any, shall be held by Landlord and applied in payment of future rent as the same
becomes due hereunder. If Tenant has been credited with any rent to be received
by such subletting under option (i) and such rent shall not be promptly paid to
Landlord by the subtenant(s), or if such rentals received from such subletting
under option (ii) during any month be less than that to be paid during that
month by Tenant hereunder, Tenant shall pay any such deficiency to Landlord.
Such deficiency shall be calculated and paid monthly. No taking possession of
the Premises by Landlord shall be construed as an election on its part to
terminate this Lease unless a written notice of such intention be given to
Tenant. Notwithstanding any such subletting without terminate, Landlord may at
any time hereafter elect to terminate this Lease for such previous breach.
(e) The right to have a receiver appointed for Tenant upon application by
Landlord to take possession of the Premises and to apply any rental collected
from the Premises and to exercise all other rights and remedies granted to
Landlord pursuant to subparagraph d above.
20. ABANDONMENT Tenant shall not vacate or abandon the Premises at any time
during the term of this Lease (except that Tenant may vacate so long as it pays
rent, provides an on-site security guard during normal business hours from
Monday through Friday, and otherwise performs its obligations hereunder) and if
Tenant shall abandon, vacate or surrender said Premises, or be dispossessed by
the process of law, or otherwise, any personal property belonging to Tenant and
left on the Premises shall be deemed to be abandoned, at the option of Landlord,
except such property as may be mortgaged to Landlord.
21. DESTRUCTION In the event the Premises are destroyed in whole or in part
from any cause, except for routine maintenance and repairs and incidental
page 5 of 8
damage and destruction caused from vandalism and accidents for which Tenant is
responsible under Paragraph 7. Landlord must either, at its option;
(a) Rebuild or restore the Premises to their condition prior to the damage
or destruction, or
(b) Terminate this Lease. (providing that the Premises is damaged to the
extent of more than 33 1/3% of the replacement cost)
If Landlord does not give Tenant notice in writing within thirty (30) days
from the destruction of the Premises of its election to either rebuild and
restore them, or to terminate this Lease, Landlord shall be deemed to have
elected to rebuild or restore them, in which event Landlord agrees, at its
expense, promptly to rebuild or restore the Premises to their condition prior to
the damage or destruction. Tenant shall be entitled to a reduction in rent
while such repair is being made in the proportion that the area of the Premises
rendered untenantable by such damage bears to the total area of the Premises.
If Landlord initially estimates that the rebuilding or restoration will exceed
180 days or if Landlord does not complete the rebuilding or restoration within
one hundred eighty (180) days following the date of destruction (such period of
time to be extended for delays caused by the fault or neglect of Tenant or
because of Acts of God, acts of public agencies, labor disputes, strikes, fires,
freight embargos, rainy or stormy weather, inability to obtain materials,
supplies or fuels, acts of contractors or subcontractors, or delay of the
contractors or subcontractors due to such causes or other contingencies beyond
the control of Landlord), then Tenant shall have the right to terminate this
Lease by giving fifteen (15) days prior written notice to Landlord.
Notwithstanding anything herein to the contrary, Landlord's obligation to
rebuild or restore shall be limited to the building and interior improvements
constructed by Landlord as they existed as of the commencement date of the Lease
and shall not include restoration of Tenant's trade fixtures, equipment,
merchandise, or any improvements, alterations or additions made by Tenant to the
Premises, which Tenant shall forthwith replace or fully repair at Tenant's sole
cost and expense provided this Lease is not cancelled according to the
provisions above.
Unless this Lease is terminated pursuant to the foregoing provisions, this
Lease shall remain in full force and effect. Tenant hereby expressly waives the
provisions of Section 1932, Subdivision 2, in Section 1933, Subdivision 4 of the
California Civil Code.
In the event that the building in which the Premises are situated is
damaged or destroyed to the extent of not less than 33 1/3% of the replacement
cost thereof, Landlord may elect to terminate this Lease, whether the Premises
be injured or not.
22. EMINENT DOMAIN If all or any part of the Premises shall be taken by any
public or quasi-public authority under the power of eminent domain or conveyance
in lieu thereof, this Lease shall terminate as to any portion of the Premises so
taken or conveyed on the date when title vests in the condemnor, and Landlord
shall be entitled to any and all payment, income, rent, award, or any interest
therein whatsoever which may be paid or made in connection with such taking or
conveyance, and Tenant shall have no claim against Landlord or otherwise for the
value of any unexpired term of this Lease. Notwithstanding the foregoing
paragraph, any compensation specifically awarded Tenant for loss of business,
Tenant's personal property, moving costs or loss of goodwill, shall be and
remain the property of Tenant.
If any action or proceeding is commenced for such taking of the Premises or
any part thereof, or if Landlord is advised in writing by any entity or body
having the right or power of condemnation of its intention to condemn the
premises or any portion thereof, then Landlord shall have the right to terminate
this Lease by giving Tenant written notice thereof within sixty (60) days of the
date of receipt of said written advice, or commencement of said action or
proceeding, or taking conveyance, which termination shall take place as of the
first to occur of the last day of the calendar month next following the month in
which such notice is given or the date on which title to the Premises shall vest
in the condemnor.
In the event of such a partial taking or conveyance of the Premises, if the
portion of the Premises taken or conveyed is so substantial that the Tenant can
no longer
reasonably conduct its business, Tenant shall have the privilege of terminating
this Lease within sixty (60) days from the date of such taking or conveyance,
upon written notice to Landlord of its intention so to do, and upon giving of
such notice this Lease shall terminate on the last day of the calendar month
next following the month in which such notice is given, upon payment by Tenant
of the rent from the date of such taking or conveyance to the date of
termination.
If a portion of the Premises be taken buy condemnation or conveyance in
lieu thereof and neither Landlord nor Tenant shall terminate this Lease as
provided here, this Lease shall continue in full force and effect as to the part
of the Premises not so taken or conveyed, and the rent herein shall be
apportioned as of the date of such taking or conveyance so that thereafter the
rent to be paid by Tenant shall be in the ratio that the area of the portion of
the Premises not so taken or conveyed bears to the total area of the Premises
prior to such taking.
22. SALE OR CONVEYANCE BY LANDLORD In the event of a sale or conveyance of the
Premises or any interest therein, by any owner of the reversion then
constituting Landlord, the transferor shall thereby be released from any further
liability upon any of the terms, covenants or conditions (express or implied)
herein contained in favor of Tenant, and in such event, insofar as such transfer
is concerned, Tenant agrees to look solely to the responsibility of the
successor in interest of such transferor in and to the Premises and this Lease.
This Lease shall not be affected by any such sale or conveyance, and Tenant
agrees to attorn to the successor in interest of such transferor. See Paragraph
56
24. ATTORNMENT TO LENDER OR THIRD PARTY In the event the interest of Landlord
in the land and buildings in which the leased Premises are located (whether such
interest of Landlord is a fee title interest or a leasehold interest) is
encumbered by deed of trust, and such interest is acquired by the lender or any
third party through judicial foreclosure or by exercise of a power of sale at
private trustee's foreclosure sale, Tenant hereby agrees to attorn to the
purchaser at any such foreclosure sale and to recognize such purchaser as the
Landlord under this Lease. In the event the lien of the deed of trust securing
the loan from a Lender or Landlord is prior and paramount to the Lease, this
Lease shall nonetheless continue in full force and effect for the remainder of
the unexpired term hereof, at the same rental herein reserved and upon all the
other terms, conditions and covenants herein contained.
25. HOLDING OVER Any holding over by Tenant after expiration or other
termination of the term of this Lease with the written consent of Landlord
delivered to Tenant shall not constitute a renewal or extension of the Lease or
give Tenant any rights in or to the leased Premises except as expressly provided
in this Lease. Any holding over after the expiration or other termination of
the term of this Lease, with the consent of Landlord, shall be construed to be a
tenancy from month to month, on the same terms and conditions herein specified
insofar as applicable except that the monthly Basic Rent shall be increased to
an amount equal to one hundred fifty (150%) percent of the monthly Basic Rent
required during the last month of the Lease term.
26. CERTIFICATE OF ESTOPPEL Tenant shall at any time upon not less than ten
(10) days prior written notice from Landlord execute, acknowledge and deliver to
Landlord a statement in writing (i) certifying that this Lease is unmodified and
in full force and effect (or, if modified, stating the nature of such
modification and certifying that this Lease, as so modified, is in full force
and effect) and the date to which the rent and other charges are paid in
advance, if any, and (ii) acknowledging that there are not, to Tenant's
knowledge, any uncured defaults on the part of Landlord hereunder, or specifying
such defaults, if any, are claimed. Any such statement may be conclusively
relied upon by any prospective purchaser or encumbrancer of the Premises.
Tenant's failure to deliver such statement within such time shall be conclusive
upon Tenant that this Lease is in full force and effect, without modification
except as may be represented by Landlord, that there are no uncured defaults in
Landlord's performance, and that not more than one month's rent has been paid in
advance.
27. CONSTRUCTION CHANGES It is understood that the description of the Premises
and the location of ductwork, plumbing and other facilities therein are subject
to such minor
changes as Landlord or Landlord's architect determines to be desirable in the
course of construction of the Premises, and no such changes shall affect this
Lease or entitle Tenant to any reduction of rent hereunder or result in any
liability of Landlord to Tenant. Landlord does not guarantee the accuracy of any
drawing supplied to Tenant and verification of the accuracy of such drawings
rests with Tenant.
28. RIGHT OF LANDLORD TO PERFORM All terms, covenants and conditions of this
Lease to be performed or observed by Tenant shall be performed or observed by
Tenant at Tenant's sole cost and expense and without any reduction of rent. If
Tenant shall fail to pay any sum of money, or other rent, required to be paid by
it hereunder or shall fail to perform any other term or covenant hereunder on
its part to be performed, and such failure shall continue for five (5)days after
written notice thereof by Landlord, Landlord, without waiving or releasing
Tenant from any obligation of Tenant hereunder, may, but shall not be obliged
to, make any such payment or perform any such other term or covenant on Tenant's
part to be performed. All sums so paid by Landlord and all necessary costs of
such performance by Landlord together with interest thereon at the rate of the
prime rate of interest per annum as quoted by the Bank of America from the date
of such payment on performance by Landlord, shall be paid (and Tenant covenants
to make such payment) to Landlord on demand by Landlord, and Landlord shall have
(in addition to any other right or remedy of Landlord) the same rights and
remedies in the event of nonpayment by Tenant as in the case of failure by
Tenant in the payment of rent hereunder.
29. ATTORNEYS' FEES
A. In the vent that either Landlord or Tenant should bring suit for the
possession of the Premises, for the recovery of any sum due under this Lease or
because of the breach of any provision of this Lease, or for any other relief
against the other party hereunder, then all costs and expenses, including
reasonable attorneys' fees,
page 6 of 8
incurred by the prevailing party, which obligation on the part of the other
party shall be deemed to have accrued on the date of the commencement of such
action and shall be enforceable whether or not the action is prosecuted to
judgment.
B. Should Landlord be named as a defendant in any suit brought against
Tenant in connection with or arising out of Tenant's occupancy hereunder, Tenant
shall pay to Landlord its costs and expenses incurred in such suit, including a
reasonable attorney's fee.
30. WAIVER The waiver by either party of the other party's failure to perform
or observe any term, covenant or condition herein contained to be performed or
observed by such waiving party shall not be deemed to be a waiver of such term,
covenant or condition or of any subsequent failure of the party failing to
perform or observe the same or any other such term, covenant or condition
therein contained, and no custom or practice which may develop between the
parties hereto during the term hereof shall be deemed a waiver of, or in any way
affect, the right of either party to insist upon performance and observance by
the other party in strict accordance with the terms hereof.
31. NOTICES All notices, demands, requests, advises or designations which may
be or are required to be given by either party to the other hereunder shall be
in writing. All notices, demands, requests, advises or designations by Landlord
to Tenant shall be sufficiently given, made or delivered if personally served on
Tenant by leaving the same at the Premises of it sent by United Stated certified
or registered mail, postage prepaid, addressed to Tenant at the Premises. All
notices, demands, requests, advises or designations by Tenant to Landlord shall
be sent by United States certified or registered mail, postage prepaid,
addressed to Landlord at its offices at PEERY/ARRILLAGA, 2560 Mission College
Blvd., Suite 101, Santa Clara, CA 95054. Each notice, request, demand, advice
or designation referred to in this paragraph shall be deemed received on the
date of receipt of the personal service or mailing thereof in the manner herein
provided, as the case may be.
32. EXAMINATION OF LEASE Submission of this instrument for examination or
signature by Tenant does not constitute a reservation of or option for a lease,
and this instrument is not effective as a lease or otherwise until its execution
and delivery by both Landlord and Tenant.
33. DEFAULT BY LANDLORD Landlord shall not be in default unless Landlord fails
to perform obligations required of Landlord within a reasonable time, but in no
event earlier than (30) days after written notice by Tenant to Landlord and to
the holder of any first mortgage or deed of trust covering the Premises whose
name and address shall have heretofore been furnished to Tenant in writing,
specifying wherein Landlord has failed to perform such obligations; provided,
however, that if the nature of Landlord's obligations is such that more than
thirty (30) days are required for performance, then Landlord shall not be in
default if Landlord commences performance within such thirty (30) day period and
thereafter diligently prosecutes the same to completion.
34. CORPORATE AUTHORITY If Tenant is a corporation (or a partnership), each
individual executing this Lease on behalf of said corporation (or partnership)
represents and warrants that he is duly authorized to execute and deliver this
Lease on behalf of said corporation (or partnership) in accordance with the by-
laws of said corporation (or partnership in accordance with the partnership
agreement) and that this Lease is binding upon said corporation (or partnership)
in accordance with its terms. If Tenant is a corporation, Tenant shall, within
thirty (30) days after execution of this Lease, deliver to Landlord a certified
copy of the resolution of the Board of Directors of said corporation authorizing
or ratifying the execution of this Lease.
36. LIMITATION OF LIABILITY In consideration of the benefits accruing
hereunder, Tenant and all successors and assigns covenant and agree that, in the
event of any actual or alleged failure, breach or default hereunder by Landlord:
(a) the sole and exclusive remedy shall be against Landlord's interest in
the Premises leased herein;
(b) no partner of Landlord shall be sued or named as a party in any suit or
action (except as may be necessary to secure jurisdiction of the partnership);
(c) no service of process shall be made against any partner of Landlord
(except as may be necessary to secure jurisdiction of the partnership);
(d) no partner of Landlord shall be required to answer or otherwise plead
to any service of process;
(e) no judgment will be taken against any partner of Landlord;
(f) any judgment taken against any partner of Landlord may be vacated and
set aside at any time without hearing;
(g) no writ of execution will ever by levied against the assets of any
partner of Landlord;
(h) these covenants and agreements are enforceable both by Landlord and
also by any partner of Landlord.
Tenant agrees that each of the foregoing covenants and agreements shall be
applicable to any covenant or agreement either expressly contained in this Lease
or imposed by statute or at common law.
37. SIGNS No sign, placard, picture, advertisement, name or notice shall be
inscribed, displayed or printed or affixed on or to any part of the outside of
the Premises or any exterior windows of the Premises without the written consent
of Landlord first had and obtained and Landlord shall have the right to remove
any such sign, placard, picture, advertisement, name or notice without notice to
and at the expense of Tenant. If Tenant is allowed to print or affix or in any
way place a sign in, on, or about the Premises, upon expiration or other sooner
termination of this Lease, Tenant at Tenant's sole cost and expense shall both
remove such sign and repair all damage in such a manner as to restore all
aspects of the appearance of the Premises to the condition prior to the
placement of said sign.
All approved signs or lettering on outside doors shall be printed, painted,
affixed or inscribed at the expense of Tenant by a person approved by Landlord.
Tenant shall not place anything or allow anything to be placed near the
glass of any window, door partition or wall which may appear unsightly from
outside the Premises.
38. MISCELLANEOUS AND GENERAL PROVISIONS
A. Use of Building Name. Tenant shall not, without the written consent of
Landlord, use the name of the building for any purpose other than as the address
of the business conducted by Tenant in the Premises.
page 7 of 8
B. Choice of Law; Severability. this Lease shall in all respects be
governed by and construed in accordance with the laws of the State of
California. If any provision of this Lease shall be invalid, unenforceable or
ineffective for any reason whatsoever, all other provisions hereof shall be and
remain in full force and effect.
C. Definition of Terms. The term "Premises" includes the space leased
hereby and any improvements now or hereafter installed therein or attached
thereto. The term "Landlord" or any pronoun used in place thereof includes the
plural as well as the singular and the successors and assigns of Landlord. The
term "Tenant" or any pronoun used in place thereof includes the plural as well
as the singular and individuals, firms, associations, partnerships and
corporations, and their and each of their respective heirs, executors,
administrators, successors and permitted assigns, according to the context
hereof, and the provisions of this Lease shall inure to the benefit of and bind
such heirs, executors, administrators, successors and permitted assigns.
The term "person" includes the plural as well as the singular and
individuals, firms, associations, partnerships and corporations. Words used in
any gender include other genders. If there be more than one Tenant the
obligations of Tenant hereunder are joint and several. The paragraph heading of
this Lease are for convenience of reference only and shall have no effect upon
the construction or interpretation of any provision hereof.
D. Time of Essence. Time is of the essence of this Lease and of each and
all of its provisions.
E. Quitclaim. At the expiration or earlier termination of this Lease,
Tenant shall execute, acknowledge and deliver to Landlord, within ten (10) days
after written demand from Landlord to Tenant, any quitclaim deed or other
document required by any reputable title company, licensed to operate in the
State of California, to remove the cloud or encumbrance created by this Lease
from the real property of which Tenant's Premises are a part.
F. Incorporation of Prior Agreements; Amendments. This instrument along
with any exhibits and attachments hereto constitutes the entire agreement
between Landlord and Tenant relative to the Premises and this agreement and the
exhibits and attachments may be altered, amended or revoked only by an
instrument in writing signed by both Landlord and Tenant. Landlord and Tenant
agree hereby that all prior or contemporaneous oral agreements between and among
themselves and their agents or representatives relative to the leasing of the
Premises are merged in or revoked by this agreement.
G. Recording. Neither Landlord nor Tenant shall record this Lease or a
short form memorandum hereof without the consent of the other.
H. Amendments for Financing. Tenant further agrees to execute any
amendments reasonably required by a lender to enable Landlord to obtain
financing, so long as Tenant's rights hereunder; are not materially or adversely
affected and there is no change in Basic Rent, Additional Rent, Options to
Extend, Term or Construction obligations of Landlord.
I. Additional Paragraphs. Paragraph 39 through 57 are added hereto and
are included as a part of this lease.
J. Clauses, Plats and Riders. Clauses, plats and riders, if any, signed
by Landlord and Tenant and endorsed on or affixed to this Lease are a part
hereof.
K. Diminution of Light, Air or View. Tenant convenants and agrees that no
diminution or shutting off of light, air or view by any structure which may be
hereafter erected (whether or not by Landlord) shall in any way affect his
Lease, entitle Tenant to any reduction of rent hereunder or result in any
liability of Landlord to Tenant.
IN WITNESS WHEREOF, Landlord and Tenant have executed and delivered this
Lease as of the day and year last written below.
LANDLORD: TENANT:
ARRILLAGA FAMILY TRUST POINTCAST, INC.
a California corporation
By /s/ John Arrillaga By /s/ John P. Jewett
John Arrillaga, Trustee
Date: 8/13/96 Title Vice President, Finance &
Operations
RICHARD T. PEERY SEPARATE PROPERTY TRUST
Type or Print Name John P. Jewett
By /s/ Richard T. Peery Date: August 12, 1996
Richard T. Peery, Trustee
Date: 8/13/96
page 8 of 8
Paragraphs 39 through 57 to Lease Agreement Dated May 21, 1996, By and Between
The Arrillaga Family Trust and the Richard T. Peery Separate Property Trust, as
Landlord, and PointCast, Inc., a California corporation, as Tenant for 64,800+
Square Feet of Space Located at the corner of West Maude Avenue and Macara
Avenue, Sunnyvale, California.
39. BASIC RENT: In accordance with Paragraphs 2B and 4A herein, the Basic
----------
Rent due shall be payable as follows during the months of the term of the Lease:
Monthly
Basic Rent Monthly
Period Rate PSF Basic Rent
------ ------------------ -----------
Months 01-06 $1.142/sf* $ 74,000.00
(plus the partial calendar *(effective rate
month, if any, following calculated from
the Commencement Date) 40,000sf@$1.85psf)
Months 07-12 $1.85/sf $119,880.00
Months 13-24 $1.90/sf $123,120.00
Months 25-36 $1.95/sf $126,360.00
Months 37-48 S2.00/sf $129,600.00
Months 49-66 S2.05/sf $132,840.00
The total Aggregate Rent shall be determined once the actual Lease
Commencement Date is established.
40. ASSIGNMENT OF WARRANTIES: During the Term of the Lease, Landlord hereby
------------------------
assigns to Tenant all of Landlord's Contractor's warranties and shall cooperate
with Tenant in enforcing any of such warranties except that Landlord shall not
be required to pay any legal fees or incur any expenses in this regard.
41. CONSENT: Whenever the consent of one party to the other is required
-------
hereunder, such consent shall not be unreasonably withheld.
42. CHOICE OF LAW; SEVERABILITY. This Lease shall in all respects be governed
---------------------------
by and construed in accordance with the laws of the State of California. If any
provisions of this Lease shall be invalid, unenforceable, or ineffective for any
reason whatsoever, all other provisions hereof shall be and remain in full force
and effect.
43. ASSESSMENT CREDITS: The demised property herein may be subject to a
------------------
special assessment levied by the City of Sunnyvale as part of an Improvement
District. As a part of said special assessment proceedings (if any), additional
bonds were or may be sold and assessments were or may be levied to provide for
construction contingencies and reserve funds. Interest shall be earned on such
funds created for contingencies and on reserve funds which will be credited for
the benefit of said assessment district. To the extent surpluses are created in
said district through unused contingency funds, interest earnings or reserve
funds, such surpluses shall be deemed the property of Landlord. Notwithstanding
that such surpluses may be credited on assessments otherwise due against the
Leased Premises, Tenant shall pay to Landlord, as additional rent if, and at the
time of any such credit of surpluses, an amount equal to all such surpluses so
credited.
44. MAINTENANCE OF THE PREMISES: In addition to, and notwithstanding anything
---------------------------
to
the contrary in Paragraph 7 Landlord shall maintain, replace and repair damage
to the structural shell, foundation and roof structure (but not the interior
improvements, roof membrane, or glazing) of the building leased hereunder at
Landlord's cost and expense provided Tenant has not caused such damage, in which
event Tenant shall be responsible for 100 percent of any such costs for repair
or damage so caused by the Tenant. Notwithstanding the foregoing, a crack in
the foundation, or exterior
Page 9
walls that does not endanger the structural integrity of the building, or which
is not life-threatening, shall not be considered material, nor shall Landlord be
responsible for repair of same.
45. COMPLIANCE (CONTINUED): Any non-conformance of the improvements installed
----------------------
and paid for by Landlord as set forth on Exhibit B, required to be corrected by
---------
the governing agency, shall be corrected at the cost and expense of Landlord if
such non-conformance exists as of the Commencement Date of the Lease. Any non-
conformance of the Premises occurring after the Commencement Date of this Lease
Agreement shall be the responsibility of Tenant to correct at Tenant's cost and
expense.
46. ASSIGNMENT AND SUBLETTING (CONTINUED): In addition to and notwithstanding
-------------------------------------
anything to the contrary in Paragraph 16 of this Lease, Landlord hereby agrees
to consent to Tenant's assigning or subletting said Lease to: (i) any parent or
subsidiary corporation, affiliate, or corporation with which Tenant merges or
consolidates, provided that the net worth of said parent or subsidiary
corporation, affiliate, or said corporation has a net worth equal to or greater
than the net worth of Tenant at the time of such assignment, merger, or
consolidation; or (ii) any third party or entity to whom Tenant sells all or
substantially all of its assets; provided, that the net worth of the resulting
or acquiring corporation has a net worth after the merger, consolidation or
acquisition equal to or greater than the net worth of Tenant at the time of such
merger, consolidation or acquisition. No such assignment or subletting will
release the Tenant from its liability and responsibility under this Lease to the
extent Tenant continues in existence following such transaction. Notwithstanding
the above, Tenant shall be required to (a) give Landlord written notice prior to
such assignment or subletting to any party as described in (i) and (ii) above,
and (b) execute Landlord's consent document prepared by Landlord reflecting the
assignment or subletting. Any and all sublease agreement(s) between Tenant and
any and all subtenant(s) (which agreements must be consented to by Landlord,
pursuant to the requirements of this Lease) shall contain the following
language:
"If Landlord and Tenant jointly and voluntarily elect, for any reason
whatsoever, to terminate the Master Lease prior to the scheduled Master Lease
termination date, then this Sublease (if then still in effect) shall terminate
concurrently with the termination of the Master Lease. Subtenant expressly
acknowledges and agrees that (1) the voluntary termination of the Master Lease
by Landlord and Tenant and the resulting termination of this Sublease shall not
give Subtenant any right or power to make any legal or equitable claim against
Landlord, including without limitation any claim for interference with contract
or interference with prospective economic advantage, and (2) Subtenant hereby
waives any and all rights it may have under law or at equity against Landlord to
challenge such an early termination of the Sublease, and unconditionally
releases and relieves Landlord, and its officers, directors, employees and
agents, from any and all claims, demands, and/or causes of action whatsoever
(collectively, "Claims"), whether such matters are known or unknown, latent or
apparent, suspected or unsuspected, foreseeable or unforeseeable, which
Subtenant may have arising out of or in connection with any such early
termination of this Sublease. Subtenant knowingly and intentionally waives any
and all protection which is or may be given by Section 1542 of the California
Civil Code which provides as follows: "A general release does not extend to
claims which the creditor does not know or suspect to exist in his favor at the
time of executing the release, which if known by him must have materially
affected his settlement with debtor.
The term of this Sublease is therefore subject to early termination.
Subtenant's initials here below evidence (a) Subtenant's consideration of and
agreement to this early termination provision, (b) Subtenant's acknowledgment
that, in determining the net benefits to be derived by Subtenant under the terms
of this Sublease, Subtenant has anticipated the potential for early termination,
and (c) Subtenant's agreement to the general waiver and release of Claims above.
Initials:_______________ Initials:_______________"
Subtenant Tenant
47. TWO (2)- FIVE (5) YEAR OPTIONS TO EXTEND: Landlord hereby grants to
----------------------------------------
Tenant, subject to the provisions below, two (2)- five (5) year Options to
Extend this Lease Agreement as follows:
Page 10
A. FIRST FIVE (5)-YEAR OPTION PERIOD: Provided Tenant is not in default
---------------------------------
(pursuant to Paragraph 19 of the Lease, i.e., Tenant has received notice and any
----
applicable cure period has expired without cure) in any of the terms, covenants,
and conditions of this Lease Agreement, Landlord hereby grants to Tenant an
Option to Extend this Lease Agreement for an additional five (5) year period
("Extended Term") upon the following terms and conditions:
1. Tenant shall give Landlord written notice of Tenant's exercise of this
Option to Extend not later than one hundred eighty (180) days prior to the
scheduled Lease Termination Date, which Termination Date is currently projected
to be July 31, 2002, in which event the Lease shall be considered extended for
an additional five (5) years upon the same terms and conditions, absent this
Paragraph 47, and subject to the Basic Rental provisions set forth below. In
the event that Tenant fails to timely exercise Tenant's option as set forth
herein in writing, Tenant shall have no further Option to Extend this Lease, and
this Lease shall continue in full force and effect for the full remaining term
hereof, absent this Paragraph 47(A) and Paragraph 47(B).
2. In the event Tenant timely exercises Tenant's Option to Extend as set
forth herein, Landlord shall, within fifteen (15) days after receipt of Tenant's
exercise of option, advise Tenant of the Basic Rental required for the Extended
Term of the Lease. Tenant shall have five (5) days after receipt from the
Landlord of said new Basic Rental in which to accept said new Basic Rental and
enter into written documentation confirming same. In the event Tenant fails to
execute said written documentation confirming said new Basic Rental for the
Extended Term of Lease within said five (5) day period, Tenant shall have no
further Option to Extend this Lease, and this Lease shall continue in full force
and effect for the full remaining Term hereof absent of this Paragraph 47, with
Landlord having no further responsibility or obligation to Tenant with respect
to Tenant's Option to Extend.
3. It is agreed that if Tenant is at any time prior to exercising its
Option to Extend in default of this Lease and has failed to cure the default in
the time period allowed, this Paragraph 47 will be null and void and Tenant will
have no further rights under this Paragraph. It is further agreed that if
Tenant has exercised its Option to Extend and is subsequently in default prior
to, or at the scheduled Commencement Date of the first Extended Term, Landlord
may at its sole and absolute discretion, cancel Tenant's Option to Extend, and
this Lease will continue in full force and effect for the full remaining Term
hereof, absent of this Paragraph 47.
4. The option rights of Tenant under this Paragraph 47, and the Extended Term
thereunder, are granted for Tenant's personal benefit and may not be assigned or
transferred by Tenant (except to: a parent or a subsidiary corporation; or a
corporation with which Tenant merges or consolidates; or a corporation to whom
Tenant sells all or substantially all of its assets, provided that Landlord has
pre-approved the assignment of the Lease to any such entities as provided for in
Paragraph 46) either voluntarily or by operation of law, in any manner
whatsoever. In the event that Landlord consents to a sublease or assignment
under Paragraph 16, the option granted herein and any Extended Term thereunder
shall be void and of no force and effect, unless Tenant is occupying no less
than ten percent (10%) of the Premises after subleasing the remainder of the
Premises during the initial Lease Term and further provided Tenant occupies ten
percent (10%) of the Premises during any and all Extended Terms as provided for
herein and in Paragraph 47B ("Second Five (5)- Year Option Period").
5. INCREASED SECURITY DEPOSIT: In the event the Term of Tenant's Lease
is extended pursuant to this Paragraph 47(A), Tenant's Security Deposit shall be
increased to equal twice the Basic Rental due for the last month of the Extended
Term.
B. SECOND FIVE (5)-YEAR OPTION PERIOD: Provided Tenant is not in default
----------------------------------
(pursuant to Paragraph 19 of the Lease, i.e., Tenant has received notice and any
----
applicable cure period has expired without cure) in any of the terms, covenants,
and conditions of this Lease Agreement and has extended the Lease for an
additional five (5) year period as set forth in Paragraph 47(A) above, Landlord
hereby grants to Tenant an Option to Extend this Lease Agreement for an
additional five (5) years ("Second Extended Term") upon the following terms and
conditions:
1. Tenant shall give Landlord written notice of Tenant's exercise of this
Option to Extend at least one hundred eighty (180) days prior to the expiration
of the Extended Term pursuant to Paragraph 47(A) hereof, which Termination Date
is scheduled to be July 31, 2007, in which event the Lease shall be considered
extended for an additional five (5) years upon the same terms and conditions,
absent this Paragraph 47(B), and subject to the Basic Rental provisions set
forth below. In the event that Tenant fails to timely exercise Tenant's option
as set forth herein in writing, Tenant shall have no further Option to Extend
this Lease, and this Lease shall continue in full force and effect for the full
remaining Term hereof, absent this Paragraph 47(B).
Page 11
2. In the event Tenant timely exercises Tenant's Option to Extend as set
forth herein, Landlord shall, within fifteen (15) days after receipt of Tenant's
exercise of option, advise Tenant of the Basic Rental (which shall not be less
than the Basic Rental for the fifth year of the first five (5) year Extended
Term) required for the Second Extended Term of the Lease. Tenant shall have
five (5) days after receipt from the Landlord of said new Basic Rental in which
to accept said new Basic Rental and enter into written documentation confirming
same. In the event Tenant fails to execute said written documentation
confirming said new Basic Rental for the Second Extended Term of Lease within
said five (5) day period, Tenant shall have no further Option to Extend this
Lease, and this Lease shall continue in full force and effect for the full
remaining Term hereof absent of this Paragraph 47(B), with Landlord having no
further responsibility or obligation to Tenant with respect to Tenant's Option
to Extend.
3. It is agreed that if Tenant is at any time prior to exercising its
Option to Extend in default of this Lease and has failed to cure the default in
the time period allowed, this Paragraph 47(B) will be null and void and Tenant
will have no further rights under this Paragraph. It is further agreed that if
Tenant has exercised its Option to Extend and is subsequently in default prior
to, or at the time the lease commences on the Second Extended Term, Landlord may
at its sole and absolute discretion, cancel Tenant's Option to Extend, and this
Lease will continue in full force and effect for the full remaining term hereof,
absent of this Paragraph 47(B).
4. The option rights of Tenant under this Paragraph 47(B), and the Second
Extended Term thereunder, are granted for Tenant's personal benefit and may not
be assigned or transferred by Tenant, (except to: a parent or a subsidiary
corporation; or a corporation with which Tenant merges or consolidates; or a
corporation to whom Tenant sells all or substantially all of its assets,
provided that Landlord has pre-approved the assignment of the Lease to any such
entities as provided for in Paragraph 46) either voluntarily or by operation of
law, in any manner whatsoever. In the event that Landlord consents to a
sublease or assignment under Paragraph 16, the option granted herein and any
Second Extended Term thereunder shall be void and of no force and effect, unless
Tenant is occupying no less than ten percent (10%) of the Premises after
subleasing the remainder of the Premises during the initial Lease Term, during
Tenant's first Extended Term and further provided Tenant occupies ten percent
(10%) of the Premises during any and all Extended Terms as provided for herein.
5. INCREASED SECURITY DEPOSIT: In the event the Term of Tenant's Lease is
extended pursuant to this Paragraph 47(B), Tenant's Security Deposit shall be
increased to equal twice the Basic Rental due for the last month of the Second
Extended Term.
48. TENANT INTERIOR IMPROVEMENTS: Landlord shall, at its sole cost and
----------------------------
expense, construct certain interior improvements (the "Tenant Improvements") in
the Premises, as shown on Exhibit B to be attached to the Lease and Landlord
---------
agrees to deliver the Premises leased hereunder to Tenant, at Landlord's
expense, in the configuration shown in Red on Exhibit B to be attached hereto.
---------
Notwithstanding anything to the contrary above, it is specifically understood
and agreed that Landlord shall be required to furnish only a standard air
conditioning/heating system, normal electrical outlets, standard fire sprinkler
systems, standard bathroom, standard lobby, 2'x 4' suspended acoustical tile
drop ceiling throughout the entire space leased, carpeting and/or vinyl-coated
floor tile, and standard office partitions and doors, as shown on Exhibit B to
---------
be attached hereto; provided however, that any special HVAC and/or plumbing
and/or electrical requirements over and above that normally supplied by Landlord
shall be 100 percent the responsibility of and be paid for 100 percent by
Tenant. By June 15, 1996, Tenant shall furnish Landlord, for Landlord's review
and approval, Tenant's required specification and a preliminary space plan
(collectively, the "Preliminary Plans") showing the layout of the improvements
to be constructed in the Premises. Upon completion of Landlord's review and
approval, Landlord shall, as soon as possible thereafter, have the working
drawings of the interior plans (the "Working Drawings") drawn by Landlord's
architect which Working Drawings shall be consistent with, and
logical evolutions of, the Preliminary Plans. Within three (3) business days
following receipt of the Working Drawings, Tenant shall approve in writing the
final plans for the interior improvements or notify Landlord in writing of its
specific objections (if any) within such three (3)-day period. If Tenant so
objects, the parties shall confer and use their best efforts to reach agreement
upon final interior improvement plans and together shall apply the standards set
forth in this Paragraph 57 to resolve Tenant's objections and incorporate such
resolution into final interior improvement plans. In resolving Tenant's
objections, the parties agree to act reasonably so as to promptly finalize the
final interior improvement plans. The interior finishes, except as otherwise
requested by Tenant, shall be substantially similar to those finishes within
that certain building located at 3201 Scott Boulevard, Santa Clara, California.
The final interior improvement plans, as approved Landlord and Tenant, shall be
attached to this Lease as Exhibit B.
---------
Page 12
If the Preliminary Plans are not received by Landlord for Landlord's approval
(which approval shall not be unreasonably withheld) by June 15, 1996, then it is
agreed that, notwithstanding anything to the contrary in this Lease, this lease
and Tenant's obligation to perform all terms, covenants and conditions of this
Lease shall commence as of the date it would otherwise have commenced absent
delay caused by Tenant. Landlord shall complete construction of the interior
improvements as soon as reasonably possible thereafter.
Notwithstanding anything to the contrary, it is agreed that in the event Tenant
makes changes, additions, or modifications to the final interior plans
reflecting the improvements (as approved by Tenant and Landlord) to be
constructed by Landlord as set forth herein, or improvements are installed for
Tenant in excess of those to be provided Tenant by Landlord as set forth on
Exhibit B, any increased cost(s) resulting from said changes, additions, and/or
- ---------
modifications and/or improvements in excess of those to be provided Tenant shall
be contracted for with Landlord and paid for one hundred percent (100%) by
Tenant.
The interior shall be constructed in accordance with Exhibit B of the Lease, it
---------
being agreed, however, that if the interior improvements constructed by Landlord
relating thereto, do not conform exactly but conform materially to the plans and
specifications as set forth in the Lease, and the general appearance, structural
integrity, and Tenant's uses and occupancy of the Premises and interior
improvements relating thereto are not materially or unreasonably affected by
such deviation, it is agreed that the commencement date of the Lease, and
Tenant's obligation to pay rental, shall not be affected, and Tenant hereby
agrees, in such event, to accept the Premises and interior improvements as
constructed by Landlord.
Tenant shall have thirty (30) days after the Commencement Date to provide
Landlord with a "punch list" pertaining to Landlord's work with respect to
Tenant's interior improvements. As soon as reasonably possible thereafter,
Landlord, or one of Landlord's representatives (if so approved by Landlord), and
Tenant shall conduct a joint walk-through of the Premises (if Landlord so
requires), and inspect such Tenant Improvements, using their best efforts to
agree on the incomplete or defective construction related to the Tenant
Improvements installed by Landlord. After such inspection has been completed,
Landlord shall prepare, and both parties shall sign, a list of all "punch list"
items which the parties reasonably agree are to be corrected by Landlord (but
which shall exclude any damage or defects caused by Tenant, its employees,
agents or parties Tenant has contracted with to work on the Premises). Landlord
shall have thirty (30) days thereafter (or longer if necessary, provided
Landlord is diligently pursuing the completion of the same) to complete, at
Landlord's expense, the repairs on the "punch list" without the Commencement
Date of the Lease and Tenant's obligation to pay Rental thereunder being
affected provided that such "punch list" items do not materially affect Tenant's
total use of the Premises. This Paragraph shall be of no force and effect if
Tenant shall fail to give any such notice to Landlord within thirty (30) days
after the Commencement Date of this Lease.
49. SECURITY DEPOSIT IN THE FORM OF AN IRREVOCABLE STANDBY LETTER OF CREDIT:
-----------------------------------------------------------------------
The cash Security Deposit provided for in Paragraph 4G of the Lease shall be
deposited by Tenant with Landlord upon execution of this Lease; however, Tenant
shall have the right, at Tenant's sole election, to replace the cash Security
Deposit held by Landlord with an irrevocable letter of credit, drawn upon an
institutional lender reasonably acceptable to Landlord in form and content
reasonably satisfactory to Landlord and for a term equal to the Term of this
Lease plus a period of thirty (30) days. Such irrevocable letter of credit
shall be renewed by the issuer prior to the renewal date thereof from time to
time during the Lease Term, and shall be held by Landlord as security for the
faithful performance by Tenant of all the terms, covenants and conditions of
this Lease to be kept and performed by Tenant. Notwithstanding anything to the
contrary above, if, for any reason, the issuer is unable or unwilling to so
renew the irrevocable letter of credit, the issuer shall automatically, without
demand from Landlord, on or before any renewal date of such irrevocable letter
of credit, deposit cash with Landlord in the amount of
$265,680.00 as set forth in Paragraph 4G of this Lease or the adjusted amounts,
if applicable, under Paragraph 47(A) and/or 47(B). The cash Security Deposit
held by Landlord shall be refunded to Tenant upon Landlord's receipt of an
acceptable irrevocable letter or credit. If Tenant defaults with respect to any
provisions of this Lease, including but not limited to provisions relating to
the payment of Rent, Landlord may (but shall not be required to) draw down on
the irrevocable letter of credit for payment of any sum which Landlord may spend
or become obligated to spend by reason of Tenant's default, or to compensate
Landlord for any loss or damage which Landlord may suffer by reason of Tenant's
default. Landlord and Tenant acknowledge that such irrevocable letter of credit
will be treated as if it were a cash Security Deposit, and such irrevocable
letter of credit may be drawn down upon by Landlord upon demand and presentation
of evidence of the identity of Landlord to the issuing bank, in the event that
Tenant defaults with respect to any provision of this Lease and such default is
not cured within any applicable cure period. Landlord acknowledges that it is
not entitled to draw down such irrevocable letter of credit unless Landlord
would have been
Page 13
entitled to draw upon a cash Security Deposit pursuant to the terms of Paragraph
4G of the Lease. Concurrently with the delivery of the required information to
the issuing bank, Landlord shall deliver to Tenant written evidence of the
default upon which the draw down was based, together with evidence that Landlord
has provided to Tenant the written notice of such default which was required
under the applicable provision of the Lease, and evidence of the failure of
Tenant to cure such default within the applicable grace period following receipt
of such notice of default. If any portion of the irrevocable letter of credit
is used or applied pursuant hereto, Tenant shall, within ten (10) days after
receipt of a written demand therefor from Landlord, restore and replace the
value of such security by either (i) depositing cash with Landlord in the amount
equal to the sum drawn down under the irrevocable letter of credit, or (ii)
increasing the irrevocable letter of credit to its value immediately prior to
such application. Tenant's failure to replace the value of the security as
provided in the preceding sentence shall be a material breach of its obligation
under this Lease.
50. HAZARDOUS MATERIALS: Landlord and Tenant agree as follows with respect to
-------------------
the existence or use of "Hazardous Materials" (as defined herein) on, in, under
or about the Premises and real property located beneath said Premises
(hereinafter collectively referred to as the "Property"):
As used herein, the term "Hazardous Materials" shall mean any hazardous or toxic
substance, material or waste which is or becomes subject to or regulated by any
local governmental authority, the State of California, or the United States
Government. The term "Hazardous Materials" includes, without limitation any
material or hazardous substance which is (i) listed under Article 9 or defined
as "hazardous" or "extremely hazardous" pursuant to Article II of Title 22 of
the California Administrative Code, Division 4, Chapter 30, (ii) listed or
defined as a "hazardous waste" pursuant to the Federal Resource Conservation and
Recovery Act, Section 42 U.S.C. Section 6901 et. seq., (iii) listed or defined
as a "hazardous substance" pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601 et. seq. (42 U.S.C.
Section 9601), (iv) petroleum or any derivative of petroleum, or (v) asbestos.
Subject to the terms of this Paragraph 50, Tenant shall have no obligation to
"clean up", reimburse, release, indemnify, or defend Landlord with respect to
any Hazardous Materials or wastes which Tenant (prior to and during the term of
the Lease) or other parties on the Property, (during the term of this Lease) did
not store, dispose, or transport in, use, or cause to be on the Property in
violation of applicable law.
Tenant shall be 100 percent liable and responsible for: (i) any and all
"investigation and cleanup" of said Hazardous Materials contamination which
Tenant, its agents, employees, contractors, vendors, invitees, visitors or its
future subtenants and/or assignees (if any) (prior to or during the Term of this
Lease, or other parties on the Property (during the Term of this Lease), does
store, dispose, or transport in, use or cause to be on the Property, and (ii)
any claims, including third party claims, resulting from such Hazardous
Materials contamination. Tenant shall indemnify Landlord and hold Landlord
harmless from any liabilities, demands, costs, expenses and damages, including,
without limitation, attorney fees incurred as a result of any claims resulting
from such Hazardous Materials contamination.
Tenant also agrees not to use or dispose of any Hazardous Materials on the
Property without first obtaining Landlord's written consent. Tenant agrees to
complete compliance with governmental regulations regarding the use or removal
or remediation of Hazardous Materials used, stored, disposed of, transported or
caused to be on the Property as stated above, and prior to the termination of
said Lease Tenant agrees to follow the proper closure procedures and will obtain
a clearance from the local fire department and/or the appropriate governing
agency. If Tenant uses Hazardous Materials, Tenant also agrees to install, at
Tenant's expense, such Hazardous Materials monitoring devices as Landlord deems
reasonably necessary. It is agreed that the Tenant's responsibilities related
to Hazardous Materials will survive the termination date of the Lease and that
Landlord may obtain specific performance of Tenant's responsibilities under this
Paragraph 50.
51. LANDLORD'S RIGHT TO TERMINATE: It is understood that the Premises to be
-----------------------------
leased by Tenant are to be constructed by Landlord, and that Landlord is
required to obtain the necessary building permits before construction of said
Premises can commence. Therefore, it is agreed, that in the event Landlord
cannot obtain all of the necessary building permits for said Premises within one
hundred twenty (120) days from the date this executed Lease is received by
Landlord, that Landlord can terminate this Lease Agreement without any liability
to Tenant of any type whatsoever, and that this Lease Agreement will be null and
void as of the date of said cancellation. Landlord agrees to use its best
efforts to obtain the required permits within the aforementioned 120-day period.
Page 14
52. ALTERATIONS AND TRADE FIXTURES: The provisions of this Paragraph 52 shall
------------------------------
modify Paragraphs 5 and 6:
A. As used herein, the Term "Alteration" shall mean any alteration,
addition or improvement made by Tenant to the Premises during the Term of the
Lease, but shall not include Tenant's trade fixtures so long as such trade
fixtures are not installed in such a manner that they have become an integral
part of the building.
B. Notwithstanding the foregoing, Tenant shall have the right to
reconfigure modular freestanding walls and the non-floor-to-ceiling partitions
without Landlord's prior consent, which have been installed by Tenant and paid
for by Tenant. Notwithstanding the above, Tenant may not remove or reconfigure
the floor-to-ceiling ultrawall partitions without receiving Landlord's prior
written consent; however, Tenant may remove and/or reconfigure its furniture
partitions (including its floor-to-ceiling furniture partitions).
C. At all times during the Lease Term: (i) Tenant shall maintain and keep
updated "as-built plans for all alterations constructed by Tenant, and (ii)
Tenant shall provide to Landlord 1/8 inch scale sepias of such "as-built" plans
as such Alterations arc made.
D. At the time Tenant requests the consent of Landlord to approve the
installation of an Alteration requiring the consent of Landlord, Tenant shall
seek from Landlord a written statement of whether or not Landlord will require
Tenant to remove such Alteration and restore all or part of the Premises as
required by Landlord in accordance with this Paragraph and Paragraph 5 at the
expiration or earlier termination of the Term of the Lease. If Tenant does not
obtain from Landlord a statement in writing that Landlord will not require such
Alteration to be removed, then at the expiration or sooner termination of the
Term of this Lease, it is agreed that Tenant may be required by Landlord to
remove all or part of such Alterations, and return the Premises to the condition
and configuration existing prior to the installation of such Alterations as
provided for in Paragraph 5 above. Alterations for which Landlord has given its
written consent to Tenant that such Alteration need not be removed, need not be
removed by Tenant at the expiration or earlier termination of the Term of the
Lease.
53. REAL PROPERTY TAXES: Paragraph 9 is modified by the following:
-------------------
A. If any assessments for public improvements are levied against the
Premises, Landlord may elect either to pay the assessment in full or to allow
the assessment to go to bond. If Landlord pays the assessment in full, Tenant
shall pay to Landlord or any assignee or purchaser of the Premises, each time
payment of Real Property Taxes is made, a sum equal to that which would have
been payable (as both principal and interest) had Landlord allowed the
assessment to go to bond.
B. In addition to and notwithstanding anything to be contrary contained
in Paragraph 9, it is agreed that Tenant shall have the right to contest the
real estate taxes and/or assessments levied against the Premises leased
hereunder with the specific understanding and agreement that any such contest
shall in no way and in no event relieve Tenant from Tenant's responsibility to
pay all real estate taxes and assessments as they appear on the tax bill as they
become due. In the event any such contest by Tenant is successfully, the
proportionate portion of the refund relating to real estate taxes and assessment
actually paid by Tenant shall be refunded to Tenant. It is further understood
and agreed that Landlord shall in no event be responsible for any liability or
for any cost or expense incurred by Tenant by reason of Tenant's contest of such
taxes and/or assessments.
54. SUBORDINATION AND MORTGAGES: Paragraph 17 is modified to provide that this
---------------------------
Lease shall not be subordinate to a mortgage or deed of trust unless the Lender
holding such mortgage or deed of trust enters into a written subordination, non-
disturbance and attornment agreement in which the Lender agrees that
notwithstanding any subordination of
this Lease to such Lender's mortgage or deed of trust, (i) such Lender shall
recognize all or Tenant's rights under this Lease, and (ii) in the event of a
foreclosure, this Lease shall not be terminated so long as Tenant is not in
default of its obligations under this Lease, but shall continue in effect and
Tenant and such Lender (or any party acquiring the Premises through such
foreclosure) shall each be bound to perform the respective obligations of Tenant
and Landlord with respect to the Premises arising after such foreclosure.
55. LANDLORD'S RIGHT TO ENTER: Notwithstanding the provisions of Paragraph 18,
-------------------------
(i) except in the event of an emergency, Landlord shall give Tenant twenty-four
(24) hours notice prior to entering the Premises, agrees to comply with any
reasonable safety and/or security regulations imposed
Page 15
by Tenant with respect to such entry, and shall only enter the Premises when
accompanied by Tenant or its agent (so long as Tenant makes itself reasonably
available for this purpose), and (ii) Landlord may install "for lease" signs
relating to the Premises only during the last 180 days of the Lease term.
Landlord agrees to use its reasonable, good faith efforts such that any entry by
Landlord, and Landlord's agents, employees, contractors and invitees shall be
performed in a manner with as minimal interference as possible with Tenant's
business at the Premises. Subject to the foregoing, Tenant agrees to cooperate
with Landlord and Landlord's agents, employees and contractors so that
responsibilities of Landlord under the Lease can be fulfilled in a reasonable
manner during normal business hours so that no extraordinary costs arc incurred
by Landlord.
56. TRANSFER BY LANDLORD: The provisions of Paragraph 23 of the Lease to the
--------------------
contrary notwithstanding, Landlord shall not be relieved of its obligations
under the Lease which may accrue after the date of a sale or other transfer
unless and until (i) the transferee agrees to assume and be bound by the terms
of this Lease and to perform all obligations of the Landlord under the Lease
which may accrue after the date of such transfer, and (ii) Landlord transfers
the balance, as of the date of said transfer of the Security Deposit to its
successor in interest (transferee) in accordance with the provisions of
California Civil Code Section 1950.7, as amended or recodified.
57. TENANT'S INSTALLATION OF ROOFTOP SATELLITE DISHES: Landlord agrees to
-------------------------------------------------
allow Tenant to install and connect satellite dishes on the rooftop of the
building (provided said satellite dishes are not visible and are completely
hidden from view from the street), with Tenant bearing sole responsibility for
all costs, permits, structural engineering, construction and installation
related to said satellite dishes, and complying with any and all regulations
imposed by a governing agency regarding the installation and/or use of said
satellite dishes. Tenant shall be responsible for removing said satellite dishes
and for repairing and restoring any area altered and/or damaged, as a result of
said satellite dishes' installation and/or removal, to its original condition,
subject to Paragraph 8 ("Acceptance and Surrender of Premises") prior to the
Lease: Termination Date.
Page 16
[PRELIMINARY FIRST FLOOR SPACE PLAN IMAGE NOT SHOWN]
[PRELIMINARY SECOND FLOOR SPACE PLAN IMAGE NOT SHOWN]
[SITE PLAN STATISTICS IMAGE NOT SHOWN]
MACARA A
AMENDMENT NO. 1
TO LEASE
THIS AMENDMENT NO. 1 is made and entered into this 22nd day of January,
1997, by and between JOHN ARRILLAGA, Trustee, or his Successor Trustee UTA dated
7/20/77 (ARRILLAGA FAMILY TRUST) as amended, and RICHARD T. PEERY, Trustee, or
his Successor Trustee UTA dated 7/20/77 (RICHARD T. PEERY SEPARATE PROPERTY
TRUST) as amended, collectively as LANDLORD, and POINTCAST, INC., a California
corporation, as TENANT.
RECITALS
A. WHEREAS, by Lease Agreement dated May 21, 1997 Landlord leased to
Tenant all of that certain 64,800+ square foot building located at 1001 W. Maude
-
Avenue, Sunnyvale, California, the details of which are more particularly set
forth in said May 21, 1996 Lease Agreement, and
B. WHEREAS, it is now the desire of the parties hereto to amend the Lease
by (i) confirming the street address of the Premises, (ii) adding a "Cross
Default" Paragraph and a "Co-terminous" Paragraph to said Lease Agreement as
hereinafter set forth.
AGREEMENT
NOW THEREFORE, for valuable consideration, receipt of which is hereby
acknowledged, and in consideration of the hereinafter mutual promises, the
parties hereto do agree as follows:
1. ADDRESS OF LEASED PREMISES: It is hereby agreed that the address for
--------------------------
the Premises, as assigned by the City of Sunnyvale, shall be 501 Macara Avenue,
Sunnyvale, California 94086.
2. CROSS DEFAULT: It is understood that concurrently with the execution
-------------
of this Amendment No. 1, Landlord and Tenant shall enter into another lease,
dated January 22, 1997, for premises located at 500 Macara Avenue, Sunnyvale,
California (hereinafter referred to as the "Macara B Lease"), which property is
contiguous to the Premises leased hereunder. As a material part of the
consideration for the execution of said Macara B Lease by Landlord, it is agreed
between Landlord and Tenant (as long as Landlord is the fee owner of the real
property subject to this Lease and subject to the Macara B Lease) that a default
under this Lease, or a default under said Macara B Lease may, at the option of
Landlord, be considered a default under both leases, in which event Landlord
shall be entitled (but in no event required) to apply all rights and remedies of
Landlord under the terms of one lease to both leases including, but not limited
to, the right to terminate one or both of said leases by reason of a default
under said Macara B Lease or hereunder.
3. INITIAL LEASE TERMS CO-TERMINOUS: It is acknowledged that it is the
--------------------------------
intention of the parties that the initial Term or this Lease be co-terminous
with the initial term of the Macara B Lease such that the initial terms of both
leases expire on the same date; provided, however, the termination of this Lease
resulting from the terms and conditions stated under Paragraph 21
("Destruction") or Paragraph 22 ("Eminent Domain") shall not result in a
termination of the Macara B Lease. It is hereby agreed that following the date
upon which the commencement date of the Macara B Lease becomes established, the
initial Term of this Lease shall be extended to coincide with the termination
date of the Macara B Lease ("Extension Period"), however, in no event will the
Term of this Lease be for a period of less than five (5) years and six (6)
months. As soon as the parties are able to implement the provisions of this
Paragraph because the commencement date of them Macara B Lease has been
determined, the parties shall execute
an amendment to this Lease extending the initial Term of this Lease to be co-
terminous with the initial termination date of the Macara B Lease. The monthly
Basic Rent during the Extension Period shall be increased by $.05 per square
foot on the commencement date of said Extension Period. For example, if the
Macara B Lease commences on the
MACARA A
projected lease commencement date of May 1, 1997, and this Lease commences on
March 1, 1997, the initial Term of this Lease shall be extended by two months
and the monthly Basic Rent during the Extension Period shall be S136,080.00
($2.05 + $0.05 per square foot x 64,800 square feet = $136,080.00).
EXCEPT AS MODIFIED HEREIN, all other terms, covenants, and conditions of
said May 21, 1996 Lease Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment No. 1
to Lease as of the day and year last written below.
LANDLORD: TENANT:
ARRILLAGA FAMILY TRUST POINTCAST, INC.
a California corporation
By: /s/ John Arrillaga By: /s/ Christopher Hassett
John Arrillaga, Trustee CHRISTOPHER HASSETT
Print or Type Name
Date: 4/4/97
Title: President
RICHARD T. PEERY SEPARATE
PROPERTY TRUST
By: /s/ Richard T. Peery Date: 4/3/97
Richard T. Peery, Trustee
Date: 4/3/97