Cupertino Master Lease Agreement
Exhibit 10.8
STANDARD FORM OFFICE LEASE
"AS-IS"
It is Lease dated May 29, 1998 (this "Lease") is entered into by and
between DE ANZA PLAZA II, LLC, a Delaware limited liability company
("Landlord"), and IMGIS, a California corporation ("Tenant").
ARTICLE 1.
BASIC LEASE PROVISIONS
Each reference in this Lease to the "Basic Lease Provisions" shall mean and
refer to the following terms, the application of which shall be governed by
the provisions in the remaining Articles of this Lease:
1. Address of Landlord: c/o Insignia/ESG of California, Inc.
--------------------------------------------------
160 W. Santa Clara Street, Suite 1350
--------------------------------------------------
San Jose, CA 95113 Attn: Mark E. Schmidt
--------------------------------------------------
2. Premises Address: 10101 N. De Anza Blvd., Ste. 230
--------------------------------------------------
Cupertino, CA 95014
--------------------------------------------------
3. Address of Tenant:
(a) Notices: 10101 N. De Anza Blvd., Ste. 230
--------------------------------------------------
Cupertino, CA 95014
--------------------------------------------------
(b) Billing: 10101 N. De Anza Blvd., Ste. 230
--------------------------------------------------
Cupertino, CA 95014
--------------------------------------------------
4. Tenant's Trade Name: IMGIS
--------------------------------------------------
5. Tenant's Contact: Nadine Franczyk Telephone: (408)873-3680
----------------------- --------------------
6. Premises Square footage: Approximately 4,025 Square Feet
----------
Project Square Footage: Approximately 74,589 Square Feet
-----------
7. Commencement Date: July 1, 1998
--------------------------------------------------
8. Term: Five (5) years
------------
9. Initial Monthly Rent: $12,880.00/month
-----------
(subject to adjustment per Addendum)
10. Security Deposit: $56,914.45
---------------
11. Permitted Uses: General office purposes only, all in accordance with
Applicable Laws and Restrictions (as hereafter defined) and pursuant to
approvals to be obtained by Tenant from all relevant City, County and
other required governmental agencies and authorities.
12. Broker: CPS; Cornish & Carey Commercial
-----------------------------------
13. Landlord's Architect: n/a
---------------------------------------------------
14. Guarantor: n/a
--------------------------------------------------------------
15. Vehicle Parking Spaces: Thirteen (13) non-exclusive parking spaces
-------------------------------------------------
16. Additional Insureds: De Anza Plaza I, LLC, De Anza Plaza II, LLC,
---------------------------------------------------
Insignia/ESG of California, Inc.
---------------------------------------------------
17. Tenant's Liability Insurance Limits: $2,000,000
------------------------------------
18. Tenant's Share: See Section 7.2 and Exhibit I
------------------------------------
19. Operating Expense Base: Operating Expenses for the 1998 calendar year
-------------------------------------------------
Exhibits:
A Description of Premises G Rules and Regulations
B Project Site Plan H
C I
D Commencement Date Memorandum J
E K
F L Calculation of Tenant's Share
Exhibits C,E,F,H,I,J and K
Riders: have been intentionally omitted.
Addendum to Lease
-----------------------------------------------------------------------------
-1-
ARTICLE II
DEFINITIONS
2.1. Certain Definitions. The capitalized terms set forth below,
unless the context clearly requires otherwise, shall have the following
meanings in this Lease:
"Additional Rent" means any and all sums (whether or not specifically
called "Additional Rent" in this Lease) other than Monthly Rent which Tenant
is or becomes obligated to pay to Landlord under this Lease. See also Rent.
"Alterations" means any alterations, decorations, modifications,
additions or improvements made in, on, about, under or contiguous to the
Building or the Premises after the Commencement Date, including, but not
limited to, lighting, HVAC and electrical fixtures, pipes and conduits,
transfer, storage and disposal facilities, partitions, drapery, wall
coverings, shelves, cabinetwork, carpeting and other floor coverings, ceiling
tiles, fixtures and carpentry installations.
"Applicable Laws" means the laws, rules, regulations, ordinances,
restrictions, and practices described in Section 5.2.
"Applicable Rate" means the greater of ten percent (10%) per annum or
five percent (5%) in excess of the discount rate of the Federal Reserve Bank
of San Francisco in effect on the twenty-fifth (25th) day of the calendar
month immediately prior to the event giving rise to the Applicable Rate
Imposition; provided, however, the Applicable Rate shall in no event exceed
the maximum interest rate permitted to be charged by applicable law.
"Broker" means the person or entity identified in Item 12 of the Basic
Lease Provisions.
"Building" means that certain building within which the Premises are
located.
"Casualty" is defined in Section 12.1.
"CC&R's" means the Declaration of Covenants, Conditions and Restrictions
applicable to the Project recorded in the Official Records of the County as
the same may be amended from time to time.
"City" means the city in which the Premises are located.
"Commencement Date" means the commencement date of the Term, described
in Section 3.2.
"Common Area" means all areas and facilities within the Project
exclusive of the Premises and other portions of the Project leased (or to be
leased) exclusively to other tenants. The Common Area includes, but is not
limited to, parking areas, access and perimeter roads, sidewalks, landscaped
areas and similar areas and facilities. Tenant's use of the Common Area, and
its rights and obligations with respect thereto, are more particularly
described in Article X.
"County" means the county in which the Premises are located.
"Event of Default" means the Tenant defaults described in Section 15.1.
"Guarantor" means the person(s) or entity identified in Item 14 of the
Basic Lease Provisions, if any.
"HVAC" means the heating, ventilating and air conditioning system
serving the Building.
"Hazardous Materials" is defined in Section 6.1.
"Landlord's Agents" means Landlord's authorized agents, representatives,
property managers (whether as agents or independent contractors),
consultants, contractors, partners, subsidiaries, affiliates, directors,
officers and employees, including without limitation the Additional Insureds
named in Item 16 of the Basic Lease Provisions.
"Landlord's Architect" means the architect or architectural firm from
time to time designated by Landlord to perform the function of Landlord's
Architect set forth in this Lease. Landlord's Architect initially shall be
the architect or architectural firm designated in Item 13 of the Basic Lease
Provisions.
"Lease" means this instrument together with all exhibits, amendments,
addends and riders attached hereto and made a part hereof.
"Monthly Rent" means the monthly rental which Tenant is to pay to
Landlord pursuant to Section 4.1, as the same may be adjusted from time to
time as set forth in this Lease. See also Rent.
"Mortgage" means any mortgage, deed of trust, or similar lien on or
covering the Project or any part thereof.
"Mortgagee" means any mortgagee of a mortgage, beneficiary of a deed of
trust or lender having a lien on or covering the Project or any part thereof.
"Notice" means each and every notice, communication, request, demand,
reply or advice, or duplicate thereof, in this Lease provided or permitted to
be given, made or accepted by either party to any other party, which shall be
in writing and given in accordance with the provisions of Section 21.6.
"Operating Expenses" means, collectively, Project Costs and Real
Property Taxes.
"Operating Expense Base" means the allowance for Operating Expenses that
Landlord will credit to Tenant's Share of Operating Expenses under Article
VII, which allowance amount is set forth under Item 19 of the Basic Lease
Provisions.
"Premises" means the premises shown in EXHIBIT A, and all areas
appurtenant thereto, if any, for the exclusive use of Tenant, as shown in
EXHIBIT A. The Premises are located within and constitute a portion of the
Building at the address set forth in Item 2 of the Basic Lease Provisions.
-2-
"Premises Square Footage" means (a) the entire area included within the
Premises, being the area bounded by the inside surface of any exterior glass
walls (or the inside surface of the permanent exterior wall where there is no
glass) of the Building bounding the Premises, the inside surface of the
exterior of all walls separating the Premises from any public corridors or
such other public areas on such floor, and the centerline of all walls
separating the Premises from other areas leased or to be leased to other
tenants on such floor; and (b) an amount equal to Tenant's Share of the lobby
areas, elevator shafts, stairwells, corridors, restrooms, mechanical rooms,
janitorial rooms, electrical rooms and telephone closets in the Building. The
Premises Square Footage as of the execution of this Lease is set forth in
Item 6 of the Basic Lease Provisions.
"Project" means that certain real property, and all Improvements
thereon, including the Building and other buildings, if any, located within
the boundaries of such property, shown on the Project Site Plan.
"Project Costs" is defined in Section 7.3.
"Project Site Plan" means EXHIBIT B.
"REA" means the Reciprocal Easement Agreement applicable to the Project,
if any, recorded in the Official Records of the County as the same may be
amended from time to time.
"Real Property Taxes" is defined in Section 7.4.
"Rent" means Monthly Rent and Additional Rent, collectively.
"Restrictions" means, collectively, the CC&R's, the REA and any other
covenants, conditions or restrictions affecting the Premises or any portion
thereof, as the same may be amended from time to time.
"Rules and Regulations" means the rules and regulations attached hereto
as EXHIBIT G and any modifications thereto promulgated by Landlord or
Landlord's Agents from time to time.
"Security Deposit" means the amount set forth in Item 10 of the Basic
Lease Provisions, which shall be paid to Landlord by Tenant pursuant to
Section 4.6.
"Substantial Completion" and "substantially completed" means repair of
the Premises following a Casualty has been fully completed except for minor
details of construction, mechanical adjustments or decoration which do not
materially interfere with Tenant's use and enjoyment of the Premises (items
normally referred to as "punch list" items).
"Tenant Delays" means any and all delays due to the fault of the Tenant,
including without limitation Tenant's failure to deliver to Landlord prior to
the Commencement Date executed copies of policies of insurance or
certificates thereof as required under Section 11.8.
"Tenant's Agents" means Tenant's agents, representatives, consultants,
contractors, affiliates, subsidiaries, officers, directors, employees,
subtenants, guests and invitees.
"Tenant's Personal Property" means Tenant's removable trade fixtures,
furniture, equipment and other personal property located in or on the
Premises.
"Term" means the term of this Lease, as provided in Section 3.2.
"Unavoidable Delay" means any delays which are beyond a party's
reasonable control, including, but not limited to, delays due to inclement
weather, strikes, acts of God, inability to obtain labor or materials,
inability to secure governmental approvals or permits, governmental
restrictions, civil commotion, fire, earthquake, explosion, flood, hurricane,
the elements, or the public enemy, action or interference of governmental
authorities or agents, war, invasion, insurrection, rebellion, riots,
lockouts or any other cause whether similar or dissimilar to the foregoing
which is beyond a party's reasonable control; provided however, that in no
event shall any of the foregoing ever apply with respect to the payment of
any monetary obligation.
2.2. Other Definitions. Terms defined elsewhere in this Lease, unless
the context clearly requires otherwise, shall have the meaning as there given.
ARTICLE III
PREMISES AND TERM
3.1. Lease of Premises. Subject to and upon the terms and conditions
set forth herein, Landlord hereby leases the Premises to Tenant, and Tenant
hereby leases the Premises from Landlord.
3.2. Term and Commencement. Unless sooner terminated as provided herein,
the Term of this Lease shall be for that period of years and months set forth
in Item 8 of the Basic Lease Provisions, as the same may be extended in
accordance with any option or options to extend the Term granted herein, and
shall commence on the date set forth in Item 7 of the Basic Lease Provisions
(the "Commencement Date"). Promptly following the Commencement Date, Landlord
and Tenant shall execute a Commencement Date Memorandum in the form shown in
EXHIBIT D.
3.3.
3.4. Delay in Possession. If for any reason Landlord cannot deliver
possession of the Premises to Tenant on or before the Commencement Date,
Landlord shall not be subject to any liability therefor, and such failure
shall not affect the validity of this Lease or the obligations of Tenant
hereunder, but in such case.
-3-
Tenant shall not be obligated to pay Monthly Rent or Additional Rent other
than as provided in Section 3.3 and Section 3.5 until possession of the
Premises has been delivered to Tenant (which date shall then be deemed the
"Commencement Date" for all purposes under this Lease). If, due to Landlord's
delay in delivering possession of the Premises, the Commencement Date has not
occurred within one hundred twenty (120) days following the date set forth in
Item 7 of the Basic Lease Provisions plus periods attributable to Tenant
Delays or Unavoidable Delay, Tenant may, at its option, by Notice to Landlord
within ten (10) days thereafter, terminate this Lease, in which event the
parties shall be discharged from all further obligations hereunder; provided,
however, if Tenant fails to give such notice to Landlord within such ten-day
period, Tenant shall no longer have the right to terminate this Lease under
this Section 3.4. Tenant understands that, notwithstanding anything to the
contrary contained herein, Landlord shall have no obligation to deliver
possession of the Premises to Tenant for so long as Tenant fails to deliver
to Landlord executed copies of policies of insurance or certificates thereof
as required under Section 11.8.
3.5. Tenant Delays. The Commencement Date shall not be delayed or
postponed due to Tenant Delays, and the Term, Tenant's obligations to pay
Rent and all of Tenant's other obligations under this Lease shall commence
upon the date which would have been the Commencement Date but for Tenant
Delays.
3.6. Condition of Premises. The taking of possession or use of the
Premises by Tenant for any purpose other than as provided in Section 3.3
shall conclusively establish that Tenant has inspected the Premises and
accepts them as being in good and sanitary order, condition and repair.
3.7. No Representations. Tenant acknowledges that neither Landlord nor
any of Landlord's Agents has made any representations or warranties as to the
suitability or fitness of the Premises for the conduct of Tenant's business,
including, but not limited to, any representations or warranties regarding
zoning or other land use matters, or for any other purpose, and that neither
Landlord nor any of Landlord's Agents has agreed to undertake any alterations
or additions to the Premises except as expressly provided in this Lease.
ARTICLE IV
RENT AND ADJUSTMENTS
4.1. Monthly Rent. From and after the Commencement Date, Tenant shall
pay to the Landlord, for each calendar month of the Term, the Monthly Rent
set forth in Item 9 of the Basic Lease Provisions, as the same may be
adjusted from time to time as provided in Section 4.2. Monthly Rent shall be
due and payable to Landlord in lawful money of the United States, in advance,
on the first (1st) day of each calendar month of the Term, without abatement,
deduction, claim or offset, and without prior notice, invoice or demand, at
Landlord's address forth in Item 1 of the Basic Lease Provisions or at such
place as Landlord may from time to time designate. Tenant's payment of
Monthly Rent for the first (1st) month of the Term shall be delivered to
Landlord concurrently with Tenant's execution of this Lease.
4.2. Adjustments. Monthly Rent shall be adjusted from time to time as
provided in the Addendum to Lease.
4.3. Additional Rent. All Additional Rent shall be due and payable to
Landlord in lawful money of the United States, at Landlord's address set
forth in Item 1 of the Basic Lease Provisions or at such other place as
landlord may from time to time designate, without abatement, deduction, claim
or offset, within ten (10) days of receipt of Landlord's invoice or statement
for same, or, if this Lease provides another time for the payment of certain
items of Additional Rent, then at such other time.
4.4. Prorations. If the Commencement Date is not the first (1st) day
of a month, or if the expiration of the Term of this Lease is not the last
day of a month, a prorated installment of Monthly Rent based on a thirty
(30) day month shall be paid for the fractional month during which the Term
commences or terminates.
4.5. Late Payment Charges. Tenant acknowledges that late payment by
Tenant to Landlord of Rent under this Lease will cause Landlord to incur
costs not contemplated by this Lease, the exact amount of which is extremely
difficult or impracticable to determine. Such costs include, but are not
limited to, processing and accounting charges, late charges that may be
imposed on Landlord by the terms of any Mortgage, and late charges and
penalties that may be imposed due to late payment of Real Property Taxes.
Therefore, if any installment of Monthly Rent or any payment of Additional
Rent due from Tenant is not received by Landlord in good funds by the second
(2nd) calendar day from the applicable due date, Tenant shall pay to Landlord
an additional sum equal to five percent (5%) of the amount overdue as a late
charge for every month or portion thereof that such amount remains unpaid.
The parties acknowledge that this late charge represents a fair and
reasonable estimate of the costs that Landlord will incur by reason of the
late payment by Tenant. Acceptance of any late Rent and late charge therefor
shall not prevent Landlord from exercising any of the other rights and
remedies available to Landlord for any other Event of Default under this
Lease. Notwithstanding the foregoing (i) should any payment of Rent by
personal check be rejected for insufficient funds, Landlord shall have the
right, upon notice to Tenant, to require that all future payments by Tenant
under this Lease be by cashier's check acceptable to Landlord, and (ii) upon
the third (3rd) occurrence during the Term of Tenant's failure to timely pay
Rent when due, Landlord may, upon notice to Tenant, require that Monthly Rent
for the balance of the Term be made in quarterly installments, in advance, in
an amount equal to the sum of the Monthly Rent amounts payable during such
three (3) month period.
4.6. Security Deposit. Tenant has deposited with Landlord the sum set
forth in item 10 of the Basic Lease Provisions as a Security Deposit for the
full and faithful performance of every provision of this Lease to be
performed by Tenant. Landlord may apply, in its sole discretion at any time
during the Term of this Lease, all or any part of the Security Deposit to the
payment of all prepaid expenses by Landlord for which Tenant would be
required to reimburse Landlord under this Lease, including without limitation
for Broker commissions. Such application of the Security Deposit is not and
shall never be dependent upon an Event of Default. Upon an Event of Default,
and whether or not Landlord is informed of or has knowledge of the Event of
Default, the Security Deposit (if not already applied as hereinabove
provided) shall be deemed to be automatically applied, without waiver of any
rights Landlord may have under this Lease or at law or in equity as a result
of an Event of Default, to the payment of any Rent not paid when due, the
repair of damage to the Premises or the payment of any other amount which
Landlord may spend or become obligated to spend by reason of an Event of
Default, or to compensate Landlord for any other loss or damage which
Landlord may suffer by reason of an Event of Default, to the full extent
permitted by law. If any portion of the Security Deposit is so applied,
Tenant shall, within ten (10) days after written demand therefor, deposit
cash with Landlord in an amount sufficient to restore the Security Deposit to
its original amount. Landlord shall not be required to keep the Security
Deposit separate from its general funds. The unused portion of the Security
Deposit, if any, shall be returned to Tenant within thirty (30) days of the
expiration of this Lease or any termination of this Lease not resulting from
an Event of Default, so long as Tenant has vacated the Premises in the manner
required
-4-
by this Lease and paid all sums required to be paid under this Lease,
provided however that Landlord may retain the Security Deposit until such
time as any amounts of Additional Rent due from Tenant have been determined
and paid In full. Tenant hereby waives the provisions of Section 1950.7(c) of
the California Civil Code and any present or future laws otherwise governing
the return of the Security Deposit to Tenant to the extent of reasonably
anticipated Additional Rent retained by Landlord pursuant to the previous
sentence.
ARTICLE V
USE
5.1. Tenant's Use. Tenant shall use the Premises solely for the
purposes set forth in Item 11 of the Basic Lease Provisions and shall use
the Premises for no other purpose. Tenant's use of the Premises shall be
subject to all of the terms and conditions of this Lease, including, but not
limited to, all the provisions of this Article V. Tenant, at Tenant's sole
cost and expense, shall procure, maintain and make available for Landlord's
inspection throughout the Term, all governmental approvals, licenses and
permits required for the proper and lawful conduct of Tenant's permitted use
of the Premises. At Landlord's request, Tenant shall deliver copies of all
such approvals, licenses and permits to Landlord.
5.2. Compliance With Applicable Laws. Throughout the Term, Tenant, at
Tenant's sole cost and expense, shall comply with, and shall not use the
Premises, Building or Common Area, or suffer or permit anything to be done in
or about the same which will in any way conflict with, (i) any and all
present and future laws, statutes, zoning restrictions, ordinances, orders,
regulations, directions, rules and requirements of all governmental or
private authorities having jurisdiction over all or any part of the Premises
(including, but not limited to, state, municipal, county and federal
governments and their departments, bureaus, boards and officials) pertaining
to the use or occupancy of, or applicable to, the Premises or privileges
appurtenant to or in connection with the enjoyment of the Premises, (ii) any
and all applicable federal, state and local laws, regulations or ordinances
pertaining to air and water quality, Hazardous Materials (as defined in
Section 6.1), waste disposal, air emissions and other environmental or
health and safety matters, zoning, land use and utility availability, which
impose any duty upon Landlord or Tenant directly or with respect to the use
or occupation of the Project or any portion thereof, (iii) the requirements
of the Board of Fire Underwriters or other similar body now or hereafter
constituted relating to or affecting the condition, use or occupancy of the
Project or any portion thereof, (iv) any covenants, conditions, easements or
restrictions, including but not limited to the Restrictions, now or hereafter
affecting or encumbering the Project or any portion thereof, regardless of
when they become effective, (v) the Rules and Regulations, and (vi) good
business practices (collectively, (i) through (vi) above are hereinafter
referred to as "Applicable Laws"). Tenant shall not commit any waste of the
Premises, Building or Project, or any public or private nuisance or any other
act or thing which might or would disturb the quiet enjoyment of any other
tenant of Landlord or any occupant of nearby property. Tenant shall not place
or permit to be placed any loads upon the floors, walls or ceilings in excess
of the maximum designed load specified by Landlord or which might damage the
Premises or the Building, or place or permit to be placed any harmful liquids
in the drainage systems, and Tenant shall not dump or store, or permit to be
dumped or stored, any inventory, waste materials, refuse or other materials
or allow any such materials to remain outside the Building proper, except in
designated enclosed trash areas. Tenant shall not conduct or permit any
auctions, sheriff's sales or other like activities at the Project or any
portion thereof.
5.3. Restrictions. Tenant agrees that this Lease is subject and
subordinate to the Restrictions, as the same may now or hereafter exist, and
that it will execute and deliver to Landlord within fifteen (15) days of
Landlord's request therefor, any further documentation or instruments which
Landlord deems necessary or desirable to evidence or effect such
subordination. Without limiting the provisions of Section 5.2, Tenant shall
throughout the Term timely comply with all of the terms, provisions,
conditions and restrictions of the Restrictions which pertain to, restrict or
affect the Premises or Tenant's use thereof, or Tenant's use of any other
area of the Project permitted hereunder, including the payment by Tenant of
any periodic or special dues or assessments charged against the Premises or
Tenant which may be allocated to the Premises or Tenant in accordance with
the provisions of the Restrictions. Tenant shall hold Landlord, Landlord's
Agents and the Premises harmless and shall indemnify, protect and defend
Landlord and Landlord's Agents from and against any loss, expense, damage,
attorney's fees and costs or liability arising out of or in connection with
the failure of Tenant to so perform or comply with the Restrictions. Tenant
agrees that it will subordinate this Lease to any other covenants, conditions
and restrictions and any reciprocal easement agreements or any similar
agreements which Landlord may hereafter record against the Premises and to
any amendment or modification to any of the existing Restrictions, provided
that such subordination does not unreasonably interfere with Tenant's use and
employment of the Premises.
5.4. Landlord's Right of Entry. Landlord and Landlord's Agents shall
have the right to enter the Premises at all reasonable times upon reasonable
notice to Tenant, except for emergencies in which case no notice shall be
required, to inspect the Premises, to take samples and conduct environmental
investigations, to post notices of nonresponsibility and similar notices and
signs indicating the availability of the Premises for sale, to show the
Premises to interested parties such as prospective lenders and purchasers, to
make necessary Alterations or maintenance and repairs, to perform Tenant's
obligations as permitted herein when Tenant has failed to do so and, at any
reasonable time after one hundred eighty (180) days prior to the expiration
of the Term, to place upon the Premises reasonable signs indicating the
availability of the Premises for lease and to show the Premises to
prospective tenants, all without being deemed to have caused an eviction of
Tenant and without any liability to Tenant or abatement of Rent. The above
rights are subject to reasonable security regulations of Tenant, and in
exercising its rights set forth herein, Landlord shall endeavor to cause the
least possible interference with Tenant's business. Landlord shall at all
times have the right to retain a key which unlocks all of the doors in the
Premises, excluding Tenant's vaults and safes, and Landlord and Landlord's
Agents shall have the right to use any and all means which Landlord may deem
proper to open the doors in an emergency to obtain entry to the Premises, and
any entry to the Premises so obtained by Landlord or Landlord's Agents shall
not under any circumstances be deemed to be a forcible or unlawful entry
into, or a detainer of, the Premises, or an eviction of Tenant from the
Premises.
ARTICLE VI
HAZARDOUS MATERIALS
6.1. Definition of Hazardous Materials. For purposes of this Lease, the
term "Hazardous Materials" includes (i) any "hazardous materials" as defined
in Section 25501(k) of the California Health and Safety Code unless Tenant
establishes, to the satisfaction of Landlord, that because of the quantity,
concentration, or physical or chemical characteristics, such substance or
matter does not pose a present or potential hazard to human health and
safety or to the environment, (ii) any other substance or matter which
results in liability to any person or entity from exposure to such
substance or matter under any statutory or common law theory, and (iii) any
substance or matter which is in excess of relevant and appropriate levels set
forth in any applicable
-5-
federal, state or local law or regulation pertaining to any hazardous or
toxic substance, material or waste, or for which any applicable federal,
state or local agency orders or otherwise requires removal, treatment or
remediation.
6.2. Use of Hazardous Materials. Tenant shall not cause or permit any
Hazardous Materials to be brought upon, stored, used, generated, released
into the environment or disposed of on, under, from or about the Premises
(which for purposes of this Article VI shall include, but is not limited to,
subsurface soil and ground water) by Tenant or Tenant's Agents without the
prior written consent of Landlord. Landlord may, in its sole discretion,
place such conditions as Landlord deems appropriate with respect to such
Hazardous Materials, and may further require that Tenant demonstrates to
Landlord that such Hazardous Materials are necessary or useful to Tenant's
business and will be generated, stored, used and disposed of in a manner that
complies with all Applicable Laws regulating such Hazardous Materials and
with good business practices. Without limiting any other rights or remedies
of Landlord under this Lease, Tenant shall pay the cost of any cleanup work
performed on, under or about the Premises, the Building and the Project as
required by this Lease or any Applicable Laws in connection with the removal,
disposal, neutralization or other treatment of such Hazardous Materials
caused or permitted by Tenant or Tenant's Agents.
6.3. Disclosures. Tenant shall promptly notify Landlord of, and shall
promptly provide Landlord with true, correct, complete and legible copies of,
all of the following environmental items relating to the Premises: reports
filed pursuant to any self-reporting requirements; reports filed pursuant to
any Applicable Laws or this Lease; all permit applications, permits,
monitoring reports, workplace exposure and community exposure warnings or
notices, and all other reports, disclosures, plans or documents (even those
which may be characterized as confidential) relating to water discharges, air
pollution, waste generation or disposal, underground storage tanks or
Hazardous Materials; all orders, reports, notices, listings and
correspondence (even those which may be considered confidential) of or
concerning the release, investigation, compliance, clean up, remedial and
corrective actions, and abatement of Hazardous Materials whether or not
required by Applicable Laws; and all complaints, pleadings and other legal
documents filed against Tenant related to Tenant's use, handling, storage or
disposal of Hazardous Materials.
6.4. Inspection: Compliance. Landlord and Landlord's Agents shall have
the right, but not the obligation, to inspect, investigate, sample and/or
monitor the Premises, including any air, soil, water, groundwater or other
sampling, and any other testing, digging, drilling or analyses, at any time
to determine whether Tenant is complying with the terms of this Article VI,
and in connection therewith, Tenant shall provide Landlord with full access
to all relevant facilities, records and personnel. If Tenant is not in
compliance with any of the provisions of this Article VI, or in the event of
a release of any Hazardous Material on, under, from or about the Premises,
Landlord and Landlord's Agents shall have the right, but not the obligation,
without limitation on any of Landlord's other rights and remedies under this
Lease, to immediately enter upon the Premises and to discharge Tenant's
obligations under this Article VI at Tenant's expense, including without
limitation the taking of emergency or long-term remedial action. Landlord and
Landlord's Agents shall endeavor to minimize interference with Tenant's
business but shall not be liable for any such interference. All sums
reasonably disbursed, deposited or incurred by Landlord in connection
herewith, including, but not limited to, all costs, expenses and actual
attorneys fees, shall be due and payable by Tenant to Landlord, as an item of
Additional Rent, on demand by Landlord, together with interest thereon at the
Applicable Rate from the date of such demand until paid by Tenant.
6.5. Indemnification. To the fullest extent permitted by law, Tenant
hereby agrees to indemnify, hold harmless, protect and defend (with attorneys
acceptable to Landlord) Landlord and Landlord's Agents, and any successors to
all or any portion of Landlord's interest in the Premises, the Building and
the Project and their directors, officers, partners, employees, authorized
agents, affiliates, representatives and Mortgagees, from and against any and
all liabilities, losses, damages (including, but not limited to, damages for
the loss or restriction on use of rentable or usable space or any amenity of
the Premises, the Building and the Project or damages arising from any
adverse impact on marketing of space in the Premises, the Building and the
Project), diminution in the value of the Premises, the Building and the
Project, judgments, fines, demands, claims, recoveries, deficiencies, costs
and expenses (including, but not limited to, reasonable attorneys' fees,
disbursements and court costs and all other professional or consultant's
expenses), whether foreseeable or unforeseeable, arising directly or
indirectly out of the presence, use, generation, storage, treatment, on or
off-site disposal or transportation of Hazardous Materials on, into, from,
under or about the Premises, the Building and the Project by Tenant or
Tenant's Agents, and specifically including the cost of any required or
necessary repair, restoration, clean-up (including, but not limited to, the
costs of investigation and removal of Hazardous Materials) or detoxification
of the Premises, the Building and the Project and the preparation of any
closure or other required plans, whether or not such action is require or
necessary during the Term or after the expiration of this Lease.
6.6 [See Addendum]
ARTICLE VII
OPERATING EXPENSES; TAXES; UTILITIES
7.1. Tenant to Bear Tenant's Share of Operating Expenses. Tenant shall
pay to Landlord Tenant's Share (as defined in Section 7.2) of Operating
Expenses in excess of the Operating Expense Base as follows: Prior to the
Commencement Date and thereafter prior to the commencement of each of
Landlord's fiscal years during the Term, Landlord shall give Tenant a written
estimate of Tenant's Share of Operating Expenses in excess of the Operating
Expense Base for the ensuing fiscal year or partial fiscal year, as the case
may be. Tenant shall pay, as an item of Additional Rent, such estimated
amount in equal monthly installments, in advance, on or before the first
(1st) day of each calendar month concurrent with its payment of Monthly
Rent. If Landlord has not furnished its written estimate by the time set
forth above, Tenant shall pay monthly installments of Operating Expenses in
excess of the Operating Expense Base at the rate established for the prior
fiscal year, if any; provided that when the new estimate is delivered to
Tenant, Tenant shall at the next monthly payment date pay Landlord any
accrued deficiency based on the new estimate, or Landlord shall credit any
accrued overpayment based on such estimate toward Tenant's next installment
payment hereunder. Within a reasonable period of time after the end of each
fiscal year (in no event less than one hundred (120) days after the end of
each fiscal year unless sooner completed by Landlord) Landlord shall furnish
Tenant a statement showing in reasonable detail Tenant's share of the actual
Operating Expenses in excess of the Operating Expense Base incurred for the
period in question. If Tenant's estimated payments are less than Tenant's
Share of actual Operating Expenses in excess of the Operating Expense Base as
shown by the applicable statement, Tenant shall pay the difference to
Landlord within thirty (30) days thereafter. If Tenant shall have overpaid
Landlord, Landlord shall credit such overpayment toward Tenant's next
installment payment hereunder. When the final
-6-
determination is made of Tenant's Share of the actual Operating Expenses in
excess of the Operating Expense. Base for the fiscal year in which this Lease
terminates, Tenant shall, even if this Lease has terminated, pay to Landlord
within fifteen (15) days after notice the excess of Tenant's Share of such
actual Operating Expenses in excess of the Operating Expense Base over the
estimate of Tenant's Share of such Operating Expenses paid. Conversely, any
overpayment shall be rebated by Landlord to Tenant. If Landlord shall
determine at any time that the estimate of Tenant's Share of Operating
Expenses in excess of the Operating Expense Base for the current fiscal year
is or will become inadequate to meet Tenant's Share of all such Operating
Expenses for any reason, Landlord shall immediately determine the
approximate amount of such inadequacy and issue a supplemental estimate as
to Tenant's Share of such Operating Expenses and Tenant shall pay any
increase as reflected by such supplemental estimate. Landlord shall keep or
cause to be kept separate and complete books of accounting covering all
Operating Expenses and showing the method of calculating Tenant's Share of
Operating Expenses in excess of the Operating Expense Base, and shall
preserve for at least twelve (12) months after the close of each fiscal year
all material documents evidencing said Operating Expenses for that fiscal
year. Tenant, at its sole cost and expense, through any certified public
accountant designated by it, shall have the right, during reasonable business
hours and not more frequently than once during any fiscal year, to examine
and/or audit the books and documents mentioned above evidencing such costs
and expenses for the previous fiscal year. Any delay or failure by Landlord
in delivering any estimate or statement pursuant to this Section 7.1 shall
not constitute a waiver of its right to require Tenant to pay Tenant's Share
of Operating Expenses in excess of the Operating Expense Base pursuant hereto.
7.2. Definition of Tenant's Share. The term "Tenant's Share" means
that portion of an Operating Expense determined by multiplying the cost of
such item by a fraction, the numerator of which is the Premises Square
Footage and the denominator of which is the total square footage of the floor
area, as of the date on which the computation is made, to be charged with
such Operating Expense. A determination of Tenant's Share for various
Operating Expenses is set forth in Exhibit I attached to and made a part of
this Lease.
7.3. Definition of Project Costs. The term "Project Costs" means all
costs and expenses incurred by Landlord or Landlord's Agents in connection
with the operation of the Project, including, but not limited to, the
following: repair and maintenance of the roof, foundation and exterior walls
of the buildings in the Project, periodic painting of the buildings in the
Project, periodic cleaning of the exterior windows of the buildings in the
Project, landscaping services, outside pest control, normal maintenance and
repair of the HVAC through maintenance contracts or otherwise, sweeping,
maintenance services, repairs to and replacement of asphalt paving, bumpers,
striping, light bulbs, light standards, monument and directional signs and
lighting systems, perimeter walls, retaining walls, sidewalks, planters,
landscaping and sprinkler system in planting area, any and all assessments
levied against the Project pursuant to the Restrictions, water, electrical
and other utility services not supplied directly to a tenant, removal of
trash, rubbish and other refuse from the Project, cleaning of and replacement
of signs of the Project, including relamping and repairs made as required;
repair, operation and maintenance of the Common Area, including, but not
limited to, removal of any obstructions not reasonably required for the
Common Area uses, prohibition and removal of the sale or display of
merchandise or the storing of materials and/or equipment in the Common Area,
and payment of all electrical, water and other utility charges or fees for
services furnished to the Common Area; obtaining and maintaining public
liability, property damage and other forms of insurance which Landlord may or
is required to maintain in connection with the Project (including the payment
of any deductibles thereunder); costs incurred in connection with compliance
of any laws or changes in laws applicable to the Project, excepting any laws
or changes in laws regarding Hazardous Materials; establishment of reasonable
reserves for replacements and/or repair of Common Area improvements,
equipment and supplies; employment of such personnel as Landlord may deem
reasonably necessary, if any, to direct parking and police the Common Area
and facilities; the cost of any capital improvements (other than tenant
improvements for specific tenants) made by or on behalf of Landlord to the
Project or Common Area to the extent of the amortized amount thereof over the
useful life of such capital improvements calculated at a market cost of
funds, all as determined by Landlord, for each such year of useful life
during the Term; depreciation of machinery and equipment used in connection
with the maintenance and operation of the Common Area for which a reasonable
reserve has not been established as herein provided; employment of personnel
used in connection with any of the foregoing, including, but not limited to,
payment or provision for unemployment insurance, worker's compensation
insurance and other employee costs; the cost of bookkeeping, accounting and
auditing and legal services provided in connection with any of the foregoing;
the cost of any tax, insurance or other consultant utilized in connection
with the Project; and any other items reasonably necessary from time to time
to properly repair, replace, maintain and operate the Project. Project Costs
shall also include a management fee to cover Landlord's management, overhead
and administrative expenses; provided, however, if Landlord elects to
delegate its duties hereunder to a professional property manager, then
Project Costs shall not include any management fee to Landlord (except for
any costs and/or administrative and overhead expenses reasonably incurred by
Landlord in monitoring and auditing the performance delegated to the
professional property manager), but under such circumstances any reasonable
amounts paid to the professional property manager shall be added to and
deemed a part of Project Costs. If Landlord elects to perform any maintenance
or repair herein described in conjunction with properties other than the
Project, and if a common maintenance contractor is contracted with for such
purpose, the contract amount allocable to the Project, as reasonably
determined by Landlord, shall be added to and deemed a part of Project Costs
hereunder. Increases in Project Costs by reason of a disproportionate impact
by Tenant thereon (for example, and not by way of limitation, increases in
costs of trash collection because of Tenant's excessive generation of trash
or increases in costs of Common Area maintenance because of Tenant's
unpermitted storage of inventory or materials in the Common Area), In
Landlord's reasonable judgment, may be billed by Landlord, as an item of
Additional Rent, directly to Tenant.
7.4. Definition of Real Property Taxes. The term "Real Property Taxes"
means any form of tax, assessment, charge, license, fee, rent tax, levy,
penalty (if a result of Tenant's delinquency), real property or other tax
(other than Landlord's net income, estate, succession, inheritance, or
franchise taxes), now or hereafter imposed with respect to the Project or any
part thereof (including any Alterations), this lease or any Rent payable
under this Lease by any authority having the direct or indirect power to tax,
or by any city, county, state or federal government or any improvement
district or other district or division thereof, whether such tax or any
portion thereof (i) is determined by the area of the Project or any part
thereof or the Rent payable under this Lease by Tenant including, but not
limited to, any gross income or excise tax levied by any of the foregoing
authorities with respect to receipt of the Rent due under this Lease, (ii) is
levied or assessed in lieu of, in substitution for, or in addition to,
existing or additional taxes with respect to the Project or any part thereof
whether or not now customary or within the contemplation of Landlord or
Tenant, or (iii) is based upon any legal or equitable interest of Landlord in
the Project or any part thereof.
7.5. Apportionment of Taxes. If the Project is assessed as part of a
larger parcel, then Landlord shall equitably apportion the Real Property
Taxes assessed against the real property which includes the Project and
reasonably determine the amount of Real Property Taxes attributable to the
Project. If other buildings exist on the assessed parcel, the Real Property
Taxes apportioned to the project shall be based upon the ratio
-7-
of the square footage of all buildings within the Project to the square
footage of all buildings on the assessed parcel, and the amount of Real
Property Taxes so apportioned to the Project shall be included as part of
Operating Expenses. Landlord's reasonable determination of such apportionment
shall be conclusive.
7.6. Tax on Improvements; Permitted contests. Tenant shall, at
Landlord's election, be directly responsible for and shall pay the full
amount of any increase in Real Property Taxes attributable to any
improvements of any kind whatsoever placed in, on or about the Premises for
the benefit of, at the request of, or by Tenant. Tenant may contest the
amount or validity of any Real Property Taxes by appropriate proceedings,
provided that Tenant gives Landlord prior Notice of any such contest and
keeps Landlord advised as to all proceedings, and provided further that
Tenant shall continue to reimburse Landlord for Landlord's payment of such
Reel Property Taxes unless such proceedings shall operate to prevent or stay
such payment and the collection of the tax so contested. Landlord shall join
in any such proceedings if any Applicable Laws shall so require, provided
that Tenant shall hold harmless, indemnify, protect and defend Landlord from
and against any liability, claim, demand, cost or expense in connection
therewith, including, but not limited to, actual attorneys' fees and costs
reasonably incurred.
7.7. Utilities and Services. Provided that no Event of Default has
occurred and is continuing, Landlord agrees to furnish to the Premises during
reasonable hours of generally recognized business days, subject to the
conditions and in accordance with the standards set forth in the Rules and
Regulations, as may be amended in writing by Landlord from time to time
during the Term of this Lease and delivered to Tenant, reasonable quantities
of electric current for normal lighting and fractional horsepower office
machines, water for lavatory and drinking purposes, heat and air conditioning
required in Landlord's judgment for the comfortable use and occupation of the
Premises, Janitorial service, and to the extent provided in the Building
only, elevator service by non-attended automatic elevators. The cost of all
such utilities and services shall be included within the definition of
Project Costs, and shall be paid by Tenant in the manner set forth in Section
7.1. Landlord shall not be liable for, and Tenant shall not be entitled to
any abatement or reduction of Rent by reason of Landlord's failure to furnish
any of the foregoing when such failure is caused by accident, breakage,
repairs, Unavoidable Delay or for any other causes. If Tenant requires or
utilizes more water or electrical power than is considered reasonable or
normal by Landlord, Landlord may at its option require Tenant to pay, as
Additional Rent, the cost, as reasonably determined by Landlord, incurred by
such extraordinary usage. In addition, Landlord may install separate meter(s)
for the Premises, at Tenant's sole expense, and Tenant thereafter shall pay
all charges of the metered service. Tenant shall cooperate with any present
or future government conservation requirements and with any conservation
practices established by Landlord. If there is any failure, stoppage or
interruption of any services provided hereunder, Landlord shall use
reasonable diligence to resume services promptly. Landlord shall at all times
have free access to all mechanical installations of the Building and
Premises, including but not limited to air conditioning equipment and vents,
fans, ventilating and machine rooms and electrical closets.
ARTICLE VIII
ALTERATIONS
8.1. Permitted Alterations. After the Commencement Date. Tenant shall
not make or permit any Alterations in, on or about the Premises without the
prior written consent of Landlord. Notwithstanding the foregoing, in no event
shall any Alterations (i) affect the exterior of the Building or the outside
areas (or be visible from adjoining sites), (ii) affect or penetrate any of
the structural portions of the Building, including, but not limited to, the
roof, (iii) require any change to the basic floor plan of the Premises, any
change to the structural or mechanical components of the Premises, or any
governmental approval or permit as a prerequisite to the construction
thereof, (iv) interfere in any manner with the proper functioning of or
Landlord's access to any mechanical, electrical, plumbing or HVAC systems,
facilities or equipment located in or serving the Building, or (v) diminish
the value of the Premises. All Alterations shall be constructed pursuant to
plans and specifications previously provided to and, when applicable,
approved in writing by Landlord, shall be installed by a licensed contractor
at Tenant's sole expense in compliance with all Applicable Laws, and shall be
accomplished in a good and workmanlike manner conforming in quality and
design with the Premises existing as of the Commencement Date. No Hazardous
Materials, including, but not limited to, asbestos or asbestos-containing
materials, shall be used by Tenant or Tenant's Agents in the construction of
any Alterations permitted hereunder. All Alterations made by Tenant shell be
and become the property of Landlord upon the installation thereof and shall
not be deemed Tenant's Personal Property; provided, however, that Landlord
may, at its option, require that Tenant, upon the termination of this Lease,
at Tenant's expense, remove any or all non-structural Alterations installed
by or on behalf of Tenant and return the Premises to its condition as of the
Commencement Date of this Lease, normal wear and tear excepted.
Notwithstanding any other provisions of this Lease, Tenant shall be solely
responsible for the maintenance, repair and replacement of any and all
Alterations made by or on behalf of Tenant (including without limitation by
Landlord on behalf of Tenant) to the Premises.
8.2. Trade Fixtures. Tenant shall, at its own expense, provide, install
and maintain in good condition all of Tenant's Personal Property required in
the conduct of its business in the Premises.
8.3. Mechanics' Liens. Tenant shall give Landlord Notice of Tenant's
intention to perform any work on the Premises which might result in any claim
of lien at least twenty (20) days prior to the commencement of such work to
enable Landlord to post and record a notice of nonresponsibility or other
notice Landlord deems proper prior to the commencement of any such work.
Tenant shall not permit any mechanic's, materialmen's or other liens to be
filed against the property of which the Premises are a part or against
Tenant's leasehold interest in the Premises. If Tenant fails to cause the
release of record of any lien(s) filed against the Premises or its Leasehold
estate therein by payment or posting of a proper bond within ten (10) days
from the date of the lien filing(s), then Landlord may, at Tenant's expense,
cause such lien(s) to be released by any means Landlord deems proper,
including, but not limited to, payment of or defense against the claim giving
rise to the lien(s). All sums reasonably disbursed, deposited or incurred by
Landlord in connection with the release of the lien(s), including, but not
limited to, all costs, expenses and actual attorneys fees, shall be due and
payable by Tenant to Landlord. as an item of Additions Rent. on demand by
Landlord, together with interest thereon at the Applicable Rate from the date
of such demand until paid by Tenant.
8.4 Alterations by Landlord, Landlord reserves the right at any time
and from time to time without the same constituting an actual or constructive
eviction and without incurring any liability to Tenant therefor or otherwise
affecting Tenant's obligations under this Lease, to make such changes,
alterations, additions, improvements, repairs or replacements in or to the
Building (including the Premises required to do so by any Applicable Laws)
and the fixtures and equipment thereof, as well as in or to the street
entrances, walls, passages, and stairways thereof, or to change the name by
which the Building is commonly known, as Landlord may deem necessary or
desirable. Nothing contained herein shall be deemed to relieve Tenant of any
duty, obligation or liability of Tenant with respect to making any repair,
replacement or improvement or complying with any Applicable Laws in
connection with the Premises, and nothing contained herein shall be deemed or
construed to
-8-
impose upon Landlord any obligation, responsibility or liability whatsoever
for the care, supervision or repair of the Building or any part thereof other
than as otherwise especially provided in this lease.
ARTICLE IX
MAINTENANCE AND REPAIR
9.1. Landlord's Maintenance and Repair Obligations. Landlord shall,
subject to receiving Tenant's Share of Operating Expenses in excess of the
Operating Expense Base, and subject to Section 9.2, Article XII and Article
XII, maintain in good condition and repair the roof (excluding any
skylights, but including as needed any replacement thereof), exterior walls
and foundation of the Building, provide normal maintenance services for the
HVAC serving the Building through maintenance contracts or otherwise, and
paint the exterior of the Building and clean the exterior windows of the
Building as and when such painting or window cleaning, as the case may be,
becomes necessary in Landlord's sole discretion. Landlord shall also provide
maintenance and repair services to the electrical, plumbing, and mechanical
systems serving the Premises. Landlord shall not be required to make any
repairs to the roof, exterior walls, foundation or any systems within the
Premises unless and until Tenant has notified Landlord in writing of the need
for such repair and Landlord shall have a reasonable period of time
thereafter to commence and complete said repair, if warranted. The cost of
any maintenance and repairs on the part of Landlord provided for in this
Section 9.1 shall be considered part of Project Costs, except that repairs
which Landlord deems arise out of any act or omission of Tenant or Tenant's
Agents shall be made at the expense of Tenant. Landlord's obligation to so
repair and maintain the Premises shall be limited to the cost of effecting
such repair and maintenance and in no event shall Landlord be liable for any
costs or expenses in excess of said amounts, including, but not limited to,
any consequential damages, opportunity costs or lost profits incurred or
suffered by Tenant.
9.2. Tenant's Maintenance and Repair Obligations. Tenant shall at all
times during the Term of this Lease, at Tenant's sole cost and expense,
clean, keep, maintain, repair and make necessary improvements to, the
Premises and every portion thereof and all improvements therein or thereto,
in good and sanitary order and condition to the reasonable satisfaction of
Landlord and in compliance with all Applicable Laws, usual wear and tear
excepted. Any damage or deterioration of the Premises shall not be deemed
usual wear and tear if the same could have been prevented by good maintenance
practices by Tenant. Tenant's repair and maintenance obligations herein shall
include, but are not limited to, all necessary maintenance and repairs to all
portions of the Premises, and all exterior entrances, all glass, windows,
window casements, show window moldings, partitions, doors, door jambs, door
closures, hardware, fixtures, electrical lighting and outlets, plumbing
fixtures, sewage facilities, interior walls, floors, callings, skylights,
fans and exhaust equipment, and fire extinguisher equipment and systems. As
part of its maintenance obligations hereunder, Tenant shall, at Landlord's
request, provide Landlord with copies of all maintenance schedules, reports
and notices prepared by, for, or on behalf of Tenant. Landlord may impose
reasonable restrictions and requirements with respect to repairs by Tenant,
which repairs shall be at least equal in quality to the original work, and
the provisions of Section 8.3 shall apply to all such repairs. Tenant's
obligation to repair includes the obligation to replace, as necessary,
regardless of whether the benefit of such replacement extends beyond the
Term. Notwithstanding the foregoing, Landlord shall have the right, upon
notice to Tenant, to undertake the responsibility for maintenance and repair
of automatic fire extinguisher equipment, such as sprinkler systems and
alarms, and other obligations of Tenant hereunder which Landlord deems
appropriate to undertake that affect the Building as a whole, in which event
the cost thereof shall be included as part of Project Costs and paid by
Tenant in the manner set forth in Section 7.1. Tenant shall not permit or
authorize any person to go onto the roof of the Building without the prior
written consent of Landlord.
9.3. Waiver. Tenant hereby waives all rights provided for by the
provisions of Sections 1941 and 1942 of the California Civil Code and any
present or future laws regarding Tenant's right to make repairs at the
expense of Landlord or to terminate this Lease because of the condition of
the Premises.
9.4. Self-Help. If Tenant refuses or fails to repair and maintain the
Premises as required hereunder within ten (10) days from the date on which
Landlord makes a written demand on Tenant to effect such repair and
maintenance, Landlord may enter upon the Premises and make such repairs or
perform such maintenance without liability to Tenant for any loss or damage
that may accrue to Tenant or its merchandise, fixtures or other property or
to Tenant's business by reason thereof. All sums reasonably disbursed,
deposited or incurred by Landlord in connection with such repairs or
maintenance, plus ten percent (10%) for overhead, shall be due and payable by
Tenant to Landlord, as an item of Additional Rent, on demand by Landlord,
together with interest at the Applicable Rate on such aggregate amount from
the date of such demand until paid by Tenant.
ARTICLE X
COMMON AREA AND PARKING
10.1. Grant of Nonexclusive Common Area License and Right. Landlord
hereby grants to Tenant and its permitted subtenants, in common with Landlord
and all persons, firma and corporations conducting business in the Project
and their respective customers, guests, licensees, invitees, subtenants,
employees and agents, to use the Common Area within the Project for vehicular
parking, for pedestrian and vehicular ingress, egress and travel, and for
such other purposes and for doing such other things as may be provided for,
authorized and/or permitted by the Restrictions, such nonexclusive license
and right to be appurtenant to Tenant's leasehold estate created by this
Lease. The nonexclusive license and rights granted pursuant to the provisions
of this Article X shall be subject to the provisions of the Restrictions,
which pertain in any way to the Common Area covered by such Restrictions, and
the provisions of this Lease.
10.2. Use of Common Area. Notwithstanding anything to the contrary
herein, Tenant and its successors, assigns, employees, agents and invitees
shall use the Common Area only for the purposes permitted hereby and by the
Restrictions and the Rules and Regulations. All uses permitted within the
Common Area shall be undertaken with reason and judgment so as not to
interfere with the primary use of the Common Area which is to provide parking
and vehicular and pedestrian access throughout the Common Area within the
Project and to adjacent public streets for the Landlord, Landlord's Agents,
Its tenants, subtenants and all persons, firms and corporations conducting
business within the Project and their respective customers, guests and
licensees. In no event shall Tenant erect, install, or place, or cause to be
erected, installed, or placed any structure, building, trailer, fence, wall,
signs or other obstructions on the Common Area except as otherwise permitted
herein and in the Restrictions, and Tenant shall not store or sell any
merchandise, equipment or materials on the Common Area.
10.3. Control of Common Area. Subject to provisions of the
Restrictions, all Common Area and all improvements located from time to time
within the Common Area shall at all times be subject to the exclusive control
and management of the Landlord. Landlord shall have the right to construct,
maintain and operate
-9-
lighting facilities within the Common Area; to police the Common Area from time
to time; to change the area, level, location and arrangement of the parking
areas and other improvements within the Common Area: to restrict parking by
tenants, their officers, agents and employees to employee parking areas; to
enforce parking charges (by operation of meters or otherwise); to close all
or any portion of the Common Area or improvements therein to such extent as
may, in the opinion of counsel for Landlord, be legally sufficient to prevent
a dedication thereof or the accrual of any rights to any person or to the
public therein; to close temporarily all or any portion of the Common Area
and/or the improvements thereon; to discourage noncustomer parking; and to do
and perform such other acts in and to said Common Area and improvements
thereon as, in the use of good business judgment, Landlord shall determine to
be advisable.
10.4. Maintenance of Common Area. Subject to the provisions of the
Restrictions, Landlord shall operate and maintain (or cause to be operated
and maintained) the Common Area in a first-class condition, in such manner as
Landlord in its sole discretion shall determine from time to time. Without
limiting the scope of such discretion, Landlord shall have the full right and
authority to employ or cause to be employed all personnel and to make or
cause to be made all rules and regulations pertaining to or necessary for the
proper operation and maintenance of the Common Area and the improvements
located thereon. The cost of such maintenance of the Common Area shall be
included as part of Project Costs. No part of the Common Area may be used for
the storage of any items, including without limitation, vehicles, materials,
inventory and equipment. All trash and other refuse shall be placed In
designated receptacles. No work of any kind, including, but not limited to,
painting, drying, cleaning, repairing, manufacturing, assembling, cutting,
merchandising or displaying shall be permitted upon the Common Area.
10.5. Revocation of License. All Common Area and Improvements located
thereon which Tenant is permitted to use and occupy pursuant to the
provisions of this Lease are to be used and occupied under a revocable
license and right, and If any such license be revoked, or if the amount of
such areas be diminished, Landlord shall not be subject to any liability nor
shall Tenant be entitled to compensation or diminution or abatement of Rent,
and such revocation or diminution of such areas shall not be deemed
constructive or actual eviction. It is understood and agreed that the
condemnation or other taking or appropriation by any public or quasi-public
authority, or sale in lieu of condemnation, of all or any portion of the
Common Area shall not constitute a violation of Landlord's agreements
hereunder, and Tenant shall not be entitled to participate in or make any
claim for any award or other condemnation proceeds arising from any such
taking or appropriation of the Common Area. Notwithstanding the foregoing,
so long as no Event of Default has occurred and is continuing, Landlord shall
provide to Tenant the number of vehicle parking spaces set forth in item 15
of the Basic Lease Provisions throughout the Term (subject to the rights of
Landlord under this Article X).
10.6. Landlord's Reserved Rights. Landlord reserves the right to
install, use, maintain, repair, relocate and replace pipes, ducts, conduits,
wires and appurtenant meters and equipment included in the Premises or
outside the Premises, change the boundary lines of the Project and install,
use, maintain, repair, alter or relocate, expand and replace any Common Area;
provided, however, Landlord shall not unreasonably interfere with Tenant's
use of the Premises. Such rights of Landlord shall include, but are not
limited to, designating from time to time certain portions of the Common Area
as exclusively for the benefit of certain tenants in the Project.
10.7. Parking. Tenant shall be entitled to the number of vehicle
parking spaces set forth in Item 15 of the Basic Lease Provisions, which
spaces shall be unreserved and unassigned, on those portions of the Common
Area designated by Landlord for parking. Tenant shall not use more parking
spaces than such number. All parking spaces shall be used only for parking by
vehicles no larger than full size passenger automobiles or pick-up trucks.
Tenant shall not permit or allow any vehicles that belong to or are controlled
by Tenant or Tenant's employees, suppliers, shippers, customers, or
invitees to be loaded, unloaded, or parked in areas other than those
designated by Landlord for such activities. If Tenant permits or allows any
of the prohibited activities described above, then Landlord shall have the
right, without notice, in addition to such other rights and remedies that
Landlord may have, to remove or tow away the vehicle involved and charge the
cost to Tenant, which cost shall be immediately payable upon demand by
Landlord. Parking within the Common Area shall be limited to striped parking
stalls, and no parking shall be permitted in any driveways, accessways or in
any area which would prohibit or impede the free flow of traffic within the
Common Area. There shall be no overnight parking of any vehicles of any kind,
and vehicles which have been abandoned or parking in violation of the terms
hereof may be towed away at the owner's expense.
ARTICLE XI
INDEMNITY AND INSURANCE
11.1. Indemnification. To the fullest extent permitted by law, Tenant
hereby agrees to defend (with attorneys acceptable to), indemnify, protect
and hold harmless Landlord and Landlord's Agents and any successors to all
or any portion of Landlord's interest in the Premises and their directors,
officers, partners, employees, authorized agents, representatives, affiliates
and Mortgagees, from and against any and all damage, loss, claim, liability
and expense including, but not limited to, actual attorneys' fees and legal
costs, incurred directly or indirectly by reason of any claim, suit or
judgment brought by or on behalf of (i) any person or persons for damage,
loss or expense due to, but not limited to, bodily injury or property damage
sustained by such person or persons which arise out of, are occasioned by, or
are in any way attributable to the use or occupancy of the Premises or the
acts or omissions of the Tenant or Tenant's Agents in or about the Premises
or the Project (including but not limited to any Event of Default hereunder),
or (ii) Tenant or Tenant's Agents for damage, loss or expanse due to, but not
limited to, bodily Injury or property damage which arise out of, are
occasioned by, or are in any way attributable to the use of any of the Common
Area, except to the extent caused by the sole active negligence or willful
misconduct of Landlord.
11.2. Property Insurance. Landlord shall obtain and keep in force
during the term of this Lease a policy or policies of insurance, with
deductibles at the sole discretion of Landlord, covering loss or damage to
the Premises, the Building, and objects owned by Landlord and normally
covered under a "Boiler and Machinery" policy (as such term is used in the
insurance industry), at least in the amount of the full replacement cost
thereof, and in no event less than the total amount required by Mortgagees,
against all perils included within the classification of fire, extended
coverage, vandalism, malicious mischief, special extended perils ("all risk"
or "special causes of action," as such terms are used in the insurance
industry, including, at Landlord's option, collapse, earthquake and flood)
and other perils as required by the Mortgagees or deemed necessary by
Landlord. A stipulated value or agreed amount endorsement deleting any co-
insurance provision of said policy or policies shall be procured with said
insurance. The cost of such insurance policies shall be included in the
definition of Project Costs, and shall be paid by Tenant in the manner set
forth in Section 7.1. Such insurance Policies shall provide for payment of
loss thereunder to Landlord or, at Landlord's election, to the Mortgagees. If
the Premises are part of a larger building, or if the Premises are part of a
group of buildings owned by Landlord which are adjacent to the Premises, then
Tenant shall pay for any increase in the property insurance of the Building
or such other building or buildings within the Project if such increase is
caused by
-10-
Tenant's acts, omissions, use or occupancy of the Premises. Tenant shall
obtain and keep in force during the Term, at its sole cost and expense, (i) an
"all risk" or "special causes of action" property policy in the amount of the
full replacement cost covering Tenant's Personal Property and any Alterations
made by or at the request of Tenant, with Landlord insured as its interest
may appear.
11.3. LIABILITY/MISCELLANEOUS INSURANCE. Tenant shall maintain in full
force and collect at all times during the term (plug such earlier and later
periods as Tenant may be in occupancy of the Premises), at its sole cost and
expense, for the protection of Tenant, Landlord and Landlord's Agents and
Mortgagees, policies of insurance issued by a carrier or carriers acceptable
to Landlord and the Mortgagees which afford the following coverages: (i)
statutory workers' compensation, (ii) employer's liability with minimum
limits of Five Hundred Thousand Dollars ($500,000), (iii)
comprehensive/commercial general liability insurance including, but not
limited to, fire and water, legal liability, broad form property damage,
personal injury, completed operations, products liability, independent
contractors, warehouser's legal liability and, if alcoholic beverages are
served, manufactured, distributed or sold in the Premises, comprehensive
liquor liability, and owned, non-owned and hired vehicles, of not less than
the limits set forth in Item 17 of the Basic Lease Provisions (or current
limit carried, whichever is greater), naming Landlord, the Mortgagees, and
the Additional Insureds named in Item 16 of the Basic Lease Provisions as
additional insureds, and including a cross-liability or severability of
interests indorsement, and (iv) such other insurance in such form and amounts
as may be required by Landlord or the Mortgagees from time to time. Landlord
or Landlord's Agents on behalf of Landlord may, at Landlord's election,
obtain liability insurance in such amounts and on such terms as Landlord
shall determine, and the cost thereof shall be included in Project Costs and
paid by Tenant in the manner described in Section 7.1.
11.4. DEDUCTIBLES. Any policy of insurance required pursuant to this
Lease containing a deductible exceeding Five Thousand Dollars ($5,000.00) per
occupancy must be approved in writing by Landlord prior to the issuance of
such policy. Tenant shall be solely responsible for the payment of any
deductible.
11.5 BLANKET COVERAGE. Any insurance required of Tenant pursuant to
this Lease may be provided by means of a so-called "blanket policy", so long
as (i) the Premises are specifically covered (by rider, endorsement or
otherwise), (ii) the limits of the policy are applicable on a "per location"
basis to the Premises and provide for restoration of the aggregate limits,
and (iii) the policy otherwise complies with the provisions of this Lease.
11.7. SUFFICIENCY OF COVERAGE. Neither Landlord nor any of Landlord's
Agents makes any representation that the types of insurance and limits
specified to be carried by Tenant under this Lease are adequate to protect
Tenant. If Tenant believes that any such insurance coverage is insufficient,
Tenant shall provide, at its own expense, such additional insurance as
Tenant deems adequate. Nothing contained herein shall limit Tenant's
liability under this Lease, and Tenant's liability under any provision of
this Lease, including without limitation under any indemnity provisions,
shall not be limited to the amount of any insurance obtained.
11.8. INSURANCE REQUIREMENTS. Tenant's insurance (i) shall be in a form
satisfactory to Landlord and the Mortgagees and shall be carried with
companies that have a general policyholder's rating of not less than "A" and
that are determined by Landlord, in its sole discretion, as financially sound
on a current basis, (ii) shall provide that such policies shall not be
subject to material alteration or cancellation except after at least thirty
(30) days prior written notice to Landlord, and (iii) shall be primary, and
any insurance carried by Landlord or Landlord's Agents shall be
noncontributing. Tenant's policy or policies, or duly executed certificates
for them in the form and content acceptable to Landlord, shall be deposited
with Landlord prior to the Commencement Date, and prior to renewal of such
policies. If Tenant falls to procure and maintain the insurance required to
be procured by Tenant under this Lease, Landlord may, but shall not be
required to, order such insurance at Tenant's expense. All sums reasonably
disbursed, deposited or incurred by Landlord in connection therewith,
including, but not limited to, all costs, expenses and actual attorneys' fees,
shall be due and payable by Tenant to Landlord, as an item of Additional
Rent, on demand by Landlord, together with Interest thereon at the Applicable
Rate from the date of such demand until paid by Tenant.
11.9. IMPOUND FUNDS. If requested by any Mortgagees to whom Landlord
has granted a security interest in the Premises, or if any Event of Default
occurs under this Lease, Tenant shall, at Landlord's election, pay Landlord,
concurrently with each payment of Monthly Rent, a sum equal to one-twelfth
(1/12) of the annual insurance premiums payable by Tenant for all insurance
which Tenant is required to obtain pursuant to this Article XI. Such sums
(the "Impound Funds") shall be held by Landlord and applied to the payment of
such insurance premiums when due; provided, however, Landlord shall not be
required to keep the Impound Funds separate from other funds, Tenant shall
not be entitled to interest on the Impound Funds and no trust relationship
shall be created with respect to the Impound Funds. The amount of the Impound
Funds when unknown shall be reasonably estimated by Landlord. If the Impound
Funds paid to Landlord by Tenant under this Section 11.9 are insufficient to
discharge the obligations of Tenant to pay such insurance premiums as the
same become due, Tenant shall pay to Landlord, within ten (10) days after
Landlord's written request therefor, such additional sums necessary to pay
such obligations. If an Event of Default has occurred, any balance remaining
from the Impound Funds may, at the option of Landlord, be applied to any
obligation then due under this Lease in lieu of being applied to the payment
of insurance premiums. The unused portion of the Impound Funds, if any, shall
be returned to Tenant within thirty (30) days of the expiration of this Lease
or any termination of this Lease not resulting from an Event of Default,
provided that Tenant has vacated the Premises in the manner required by this
Lease.
11.10. LANDLORD'S DISCLAIMER. Notwithstanding any other provisions of
this Lease, and to the fullest extent permitted by law, Landlord and
Landlord's Agents shall not be liable for any loss or damage to persons or
property resulting from theft, vandalism, fire, explosion, falling materials,
glass, tile or sheetrock, steam, gas, electricity, water or rain which may
leak from any part of the Premises, or from the pipes, appliances or plumbing
works therein or from the roof, street or subsurface or whatsoever, unless
caused by or due to the sole active negligence or willful misconduct of
Landlord. Landlord and Landlord's Agents shall not be liable for interference
with light or air, or for any latent defect in the Premises except as
otherwise expressly provided in this Lease. Tenant shall give prompt Notice
to Landlord in case of a casualty, accident or repair needed to the Premises.
11.11. WAIVER OF SUBROGATION. Landlord, except to the extent Tenant's
insurance covers loss to Landlord plus Tenant's obligations with respect to
maintenance and repair and payment of insurance deductibles hereunder,
-11-
and Tenant each hereby waives all rights of recovery against the other and
the other's agents on account of loss and damage occasioned to such waiving
party to the extent only that such loss or damage is insured against under
any insurance policies required by this Article XI (and to the extent such
insurance is inadequate to cover such loss, this waiver shall not apply to
amounts of loss above such coverage). Tenant and Landlord shall, upon
obtaining policies of insurance required hereunder, give notice to the
insurance carriers that the foregoing waiver of subrogation is contained in
this Lease. Notwithstanding the foregoing, it is agreed that in the event
that any loss is due to the act, omission or negligence or willful misconduct
of Tenant or Tenant's Agents, Tenant's liability insurance shall be primary
and shall cover all losses and damages prior to any other insurance hereunder.
ARTICLE XII
DAMAGE OR DESTRUCTION
12.1. LANDLORD'S OBLIGATION TO REBUILD. if the Premises are damaged or
destroyed by fire or other casualty (a "Casualty"), Tenant shall promptly
give notice thereof to Landlord, and Landlord shall thereafter repair the
Premises as set forth in Sections 12.4 and 12.5 unless Landlord has the right
to terminate this Lease as provided in Section 12.2 and Landlord elects to so
terminate or Tenant has the right to terminate this Lease as provided in
Section 12.3 and Tenant elects to so terminate.
12.2. LANDLORD'S RIGHT TO TERMINATE. Landlord shall have the right to
terminate this Lease following a Casualty if any of the following occurs: (i)
Insurance proceeds (together with any additional amounts Tenant elects, at
its option, to contribute) are not available to Landlord to pay one hundred
percent (100%) of the cost to fully repair the Premises, excluding the
deductible (for which Tenant shall pay Tenant's Share of such deductible);
(ii) Landlord's Architect determines that the Premises cannot, with
reasonable diligence, be fully repaired by Landlord (or cannot be safely
repaired because of the presence of hazardous factors, including, but not
limited to, Hazardous Materials, earthquake faults, radiation, chemical waste
and other similar dangers) within one hundred eighty (180) days after the
date of such Casualty; (iii) the Premises are destroyed or damaged during the
last twelve (12) months of the Term; or (iv) an Event of Default has occurred
and is continuing at the time of such Casualty. If Landlord elects to
terminate this Lease following a Casualty pursuant to this Section 12.2,
Landlord shall give Tenant Notice of its election to terminate within thirty
(30) days after landlord has knowledge of such Casualty, and this Lease shall
terminate fifteen (15) days after the date of such Notice.
12.3. TENANT'S RIGHT TO TERMINATE. Subject to the later terms hereof,
Tenant shall have the right to terminate this Lease following the destruction
of the Premises (or damage to the Premises so extensive as to reasonably
prevent Tenant's substantial use and enjoyment of the Premises) if any of
the following occurs: (i) the Premises cannot, with reasonable diligence, be
fully repaired by Landlord within one hundred eighty (180) days after the
date of the damage or destruction, as determined by Landlord's Architect;
(ii) the Premises cannot safely be repaired because of the presence of
hazardous factors, including Hazardous Materials, earthquake faults,
radiation, chemical waste and other similar dangers; or (iii) the damage or
destruction occurs during the last twelve (12) months of the Term and cannot,
with reasonable diligence, be fully repaired by Landlord within ninety (90)
days after the date of the destruction or damage, as determined by
Landlord's Architect. Notwithstanding the foregoing, Tenant shall not have
the right to terminate under this Section 12.3 if (a) an Event of Default has
occurred and is continuing at the time of such damage or destruction or at
the time of exercising the right to terminate, or (b) the damage or
destruction was caused, in whole or in part, by the act or omission of Tenant
or Tenant's Agents. If Tenant elects to terminate this Lease pursuant to this
Section 12.3, Tenant shall give Landlord Notice of its election to terminate
within ten (10) days after the date of such damage or destruction, and this
Lease shall terminate thirty (30) days after the date of such Notice.
12.4. EFFECT OF TERMINATION. If this Lease is terminated following a
Casualty pursuant to Section 12.2 or Section 12.3, Landlord shall, subject to
the rights of the Mortgagees, be entitled to receive and retain all the
insurance proceeds resulting from or attributable to such Casualty, except
for those proceeds payable under policies obtained by Tenant which
specifically insure Tenant's Personal Property. If neither party exercises
any such right to terminate this Lease, this Lease will continue in full
force and effect, and Landlord shall, promptly following the tenth (10th) day
after the date of such Casualty and receipt of the amounts set forth in
clause (i) of Section 12.2, commence the process of obtaining necessary
permits and approvals for the repair of the Premises, and shall commence such
repair and prosecute the same diligently to completion as soon thereafter as
is practicable. Tenant shall fully cooperate with Landlord in removing
Tenant's Personal Property and any debris from the Premises to facilitate the
making of such repairs.
12.5. LIMITED OBLIGATION TO REPAIR. Landlord's obligation, should it
elect or be obligated to repair the Premises following a Casualty, shall be
limited to the basic Building and Tenant shall, at its expense, replace or
fully repair all Tenant's Personal Property and any Alterations installed by
Tenant existing at the time of such Casualty.
12.6. ABATEMENT OF MONTHLY RENT. During any period when Landlord or
Landlord's Architect reasonably determines that there is substantial
interference with Tenant's use of the Premises by reason of a Casualty,
Monthly Rent shall be temporarily abated in proportion to the degree of such
substantial interference, but only to the extent of any business
interruption or loss of income insurance proceeds received by Landlord from
Tenant's insurance described in Section 11.2. Such abatement shall commence
upon the date Tenant notifies Landlord of such Casualty and shall end upon
the Substantial Completion of the repair of the Premises which landlord
undertakes or is obligated to undertake hereunder. Tenant shall not be
entitled to any compensation or damages from Landlord for loss of the use of
the Premises, Tenant's Personal Property or other damage or any
inconvenience occasioned by a Casualty or by the repair or restoration of the
Premises thereafter, including, but not limited to, any consequential
damages, opportunity costs or lost profits incurred or suffered by Tenant.
Tenant hereby waives the provisions of Section 1932(2) and Section 1933(4) of
the California Civil Code, and the provisions of any similar or successor
statutes.
12.7. LANDLORD'S DETERMINATION. The determination in good faith by
Landlord's Architect of or relating to the estimated cost of repair of any
damage, replacement cost, the time period required for repair or the
interference with or suitability of the Premises for Tenant's use or
occupancy shall be conclusive for purposes of this Article XII and Article
XIII.
-12-
ARTICLE XIII
CONDEMNATION
13.1. TOTAL TAKING--TERMINATION. If title to the Premises or so much
thereof is taken for any public or quasi-public use under any statute or by
right of eminent domain so that reconstruction of the Premises will not
result in the Premises being reasonably suitable for Tenant's continued
occupancy for the uses and purposes permitted by this Lease, this Lease shall
terminate as of the date possession of the Premises or part thereof is so
taken.
13.2. PARTIAL TAKING. If any part of the Premises is taken for any
public or quasi-public use under any statute or by right of eminent domain
and the remaining part is reasonably suitable for Tenant's continued
occupancy for the uses permitted by this lease, this Lease shall, as to the
part so taken, terminate as of the date that possession of such part of the
Premises is taken and the Monthly Rent shall be reduced in the same
proportion that the floor area of the portion of the Premises so taken (less
any addition thereto by reason of any reconstruction) bears to the original
floor area of the Premises, as reasonably determined by Landlord or
Landlord's Architect. Landlord shall, at its own cost and expense, make all
necessary repairs or alterations to the Premises so as to make the portion of
the Premises not taken a complete architectural unit. Such work shall not,
however, exceed the scope of the work done by Landlord in originally
constructing the Premises. If severance damages from the condemning authority
are not available to Landlord in sufficient amounts to permit such
restoration, Landlord may terminate this Lease upon Notice to Tenant.
Monthly Rent due and payable hereunder shall be temporarily abated during
such restoration period in proportion to the degree to which there is
substantial interference with Tenant's use of the Premises, as reasonably
determined by Landlord or Landlord's Architect. Each party hereby waives the
provisions of Section 1265.130 of the California Code of Civil Procedure and
any present or future law allowing either party to petition the Superior
Court to terminate this Lease in the event of a partial taking of the
Building or Premises.
13.3. NO APPORTIONMENT OF AWARD. No award for any partial or total
taking shall be apportioned, it being agreed and understood that Landlord
shall be entitled to the entire award for any partial or entire taking.
Tenant assigns to Landlord its interest in any award which may be made in
such taking or condemnation, together with any and all rights of Tenant
arising in or to the same or any part thereof. Nothing contained herein
shall be deemed to give Landlord any interest in or require Tenant to assign
to Landlord any separate award made to Tenant for the taking of Tenant's
Personal Property, for the interruption of Tenant's business or its moving
costs, or for the loss of its goodwill.
13.4. TEMPORARY TAKING. No temporary taking of the Premises (which for
purposes hereof shall mean a taking of all or any part of the Premises for
one hundred eighty (180) days or less) shall terminate this Lease or give
Tenant any right to any abatement of Rent. Any award made to Tenant by
reason of such temporary taking shall belong entirely to Tenant and
Landlord shall not be entitled to share therein. Each party agrees to execute
and deliver to the other all instruments that may be required to effectuate
the provisions of this Section 13.4.
13.5. SALE UNDER THREAT OF CONDEMNATION. A sale made in good faith to
any authority having the power of eminent domain, either under threat of
condemnation or while condemnation proceedings are pending, shall be deemed a
taking under the power of eminent domain for all purposes of this Article
XIII.
ARTICLE XIV
ASSIGNMENT AND SUBLETTING
14.1. PROHIBITION. Tenant shall not directly or indirectly, voluntarily
or by operation of law, assign which term shall include any transfer,
assignment, pledge, mortgage or hypothecation) this lease, or any right or
interest hereunder, or sublet the Premises or any part thereof, or allow any
other person or entity to occupy or use all or any part of the Premises
without first obtaining the written consent of Landlord in each instance,
which consent shall not be unreasonably withheld. No assignment, encumbrance,
subletting, or other transfer in violation of the terms of this Article XIV,
whether voluntary or involuntary, by operation of law, under legal process or
proceedings, by receivership, in bankruptcy, or otherwise shall be valid or
effective and, at the option of Landlord, shall constitute an Event of
Default under this Lease. To the extent not prohibited by provisions of the
Bankruptcy Code of 1978, 11 U.S.C. Section 101 ET SEQ.. (the "Bankruptcy
Code"), Tenant on behalf of itself, creditors, administrators and assigns
waives the applicability of Sections 541(c) and 365(e) of the Bankruptcy
Code unless the proposed assignee of the trustee for the estate of the
bankrupt meets Landlord's standards for consent as set forth below. Landlord
has entered into this Lease with Tenant in order to obtain for the benefit
of the Project the unique attraction of Tenant's name and business; the
foregoing prohibition on assignment or subletting is expressly agreed to by
Tenant in consideration of such fact. If this Lease is assigned to any
person or entity pursuant to the provisions of the Bankruptcy Code, any and
all monies or other considerations payable or otherwise to be delivered in
connection with such assignment shall be paid or delivered to Landlord, shall
be and remain the exclusive property of Landlord and shall not constitute
property of Tenant or the estate of Tenant within the meaning of the
Bankruptcy Code. Any and all monies or other considerations constituting
Landlord's property under the preceding sentence not paid or delivered to
Landlord shall be held in trust for the benefit of Landlord and be promptly
paid or delivered to Landlord. Any person or entity to which this Lease is
assigned pursuant to the provisions of the Bankruptcy Code shall be deemed
without further act or deed to have assumed all of the obligations arising
under this Lease on and after the date of such assignment. Any such
assignee shall upon demand execute and deliver to Landlord an instrument
confirming such assumption.
14.2. LANDLORD'S CONSENT. In the event Landlord consents to any
assignment or subletting, such consent shall not constitute a waiver of any
of the restrictions of this Article XIV and the same shall apply to each
successive assignment or subletting hereunder, if any. In no event shall
Landlord's consent to an assignment or subletting affect the continuing
primary liability of Tenant (which, following assignment, shall be joint and
several with the assignee), or relieve Tenant of any of its obligations
hereunder without an express written release being given by Landlord. In the
event that Landlord shall consent to an assignment or subletting under this
Article XIV, such assignment or subletting shall not be effective until the
assignee or sublessee shall assume all of the obligations of this Lease on
the part of Tenant to be performed or observed and whereby the assignee or
sublessee shall agree that the provisions contained in this Lease shall,
notwithstanding such assignment or subletting, continue to be binding upon it
with respect to all future assignments and sublettings. Such assignment or
sublease agreement shall be duly executed and a fully executed copy thereof
shall be delivered to Landlord, and Landlord may collect Monthly Rent and
Additional Rent due hereunder directly from the assignee or sublessee.
Collection of Monthly Rent and Additional Rent directly from an assignee or
sublessee shall not constitute a consent or a waiver of the necessity of
consent to such assignment or subletting, nor shall such collection
constitute a recognition of such assignee or sublessee as the Tenant
hereunder or a release of Tenant from the performance of all of its
obligations hereunder.
-13-
14.3 INFORMATION. Regardless of whether Landlord's consent is
required under this Article XIV, Tenant shall notify Landlord in writing of
Tenant's intent to assign this Lease or any right or interest hereunder, or
to sublease the Premises or any part thereof, end of the name of the proposed
assignee or sublessee, the nature of the proposed assignee's or sublessee's
business to be conducted on the Premises, the terms and provisions of the
proposed assignment or sublease, a copy of the proposed assignment or
sublease form, and such other information as Landlord may reasonably request
concerning the proposed assignee or sublessee, including, but not limited to,
net worth, income statements and other financial statements for a two-year
period preceding Tenant's request for consent, evidence of insurance
complying with the requirements of Article XI, and the fee described in
Section 14.7.
14.4. STANDARD FOR CONSENT. Landlord shall, within thirty (30) days of
receipt of such Notice and all information requested by Landlord concerning
the proposed assignee or sublessee, elect to take one of the following
actions:
(a) consent to such proposed assignment or sublease;
(b) refuse to consent to such proposed assignment or sublease,
which refusal shall be on reasonable grounds; or
(c) if Tenant proposes to sublease all or part of the Premises for
the entire remaining Term, Landlord may, at its option exercised by thirty
(30) days Notice to Tenant, elect to recapture such portion of the Premises
as Tenant proposes to sublease and as of the thirtieth (30th) day after
Landlord so notifies Tenant of its election to recapture, this Lease shall
terminate as to the portion of the Premises recaptured and the Monthly Rent
payable under this Lease shall be reduced in the same proportion that the
floor area of that portion of the Premises so recaptured bears to the floor
area of the Premises prior to such recapture.
Tenant agrees, by way of example and without limitation, that it shall
not be unreasonable for Landlord to withhold its consent to a proposed
assignment or subletting if any of the following situations exist or may
exist:
(i) Landlord determines that the proposed assignee's or
sublessee's use of the Premises conflicts with Article V or Article VI,
presents an unacceptable risk, as determined by Landlord, under Article
VI, or conflicts with any other provision under this Lease;
(ii) Landlord determines that the proposed assignee or
sublessee is not as financially responsible as Tenant as of the date of
Tenant's request for consent or as of the effective date of such
assignment or subletting;
(iii) Landlord determines that the proposed assignee or
sublessee lacks sufficient business reputation or experience to conduct
on the Premises a business of a type and quality equal to that
conducted by Tenant:
(iv) Landlord determines that the proposed assignment or
subletting would breach a covenant, condition or restriction in some
other lease, financing agreement or other agreement relating to the
Project, the Building, the Premises or this Lease; or
(v) An Event of Default has occurred and is continuing at
the time of Tenant's request for Landlord's consent, or as of the
effective date of such assignment or subletting.
Tenant acknowledges that if Tenant has any exterior sign rights under this
Lease, such rights are personal to Tenant and may not be assigned or
transferred to any assignee of this Lease or sublessee of the Premises
without Landlord's prior written consent, which consent may be withheld in
Landlord's sole and absolute discretion.
14.5. BONUS VALUE. Tenant agrees that seventy-five percent (75%) of any
amounts paid by assignee or sublessee. however described, in excess of (i)
the Monthly Rent payable by Tenant hereunder (or, in the case of sublease of
a portion of the Premises, in excess of the Monthly Rent reasonably
allocable to such portion), plus (ii) Tenant's direct out-of-pocket costs
which Tenant certifies to Landlord have been paid to provide occupancy
related services to such assignee or sublessee of a nature commonly provided
by landlords of similar space, shall be the property of Landlord and such
amounts shall be payable directly to Landlord by the assignee or sublessee.
At Landlord's request, a written agreement shall be entered into by and among
Tenant, Landlord and the proposed assignee or sublessee confirming the
requirements of this Section 14.5.
14.6. CERTAIN TRANSFERS. The sale of all or substantially all of
Tenant's assets (other than bulk sales in the ordinary course of business),
or, if Tenant is a corporation, an unincorporated association, or a
partnership, the transfer, assignment or hypothecation of any stock or
interest in such corporation, association or partnership in the aggregate in
excess of twenty-five percent (25%) (except for publicly traded shares of
stock constituting a transfer of twenty-five percent (25%) or more in the
aggregate, so long as no change in the controlling interests of Tenant occurs
as a result thereof) shall be deemed an assignment within the meaning
and provisions of this Article XIV.
14.7. LANDLORD'S FEE AND EXPENSES. If Tenant requests Landlord's consent
to an assignment or subletting by Tenant under this Lease, Tenant shall pay
to Landlord a fee of Five Hundred Dollars ($500) and all of Landlord's
out-of-pocket expenses, including, but not limited to, attorneys' fees
reasonably incurred related to such assignment or subletting by Tenant,
whether or not the assignment or subletting is approved.
14.8. TRANSFER OF THE PREMISES BY LANDLORD. Upon any conveyance of the
Premises and assignment by Landlord of this Lease, Landlord shall and is
hereby entirely released from all liability under any and all of its
covenants and obligations contained in or derived from this Lease occurring
after the date of such conveyance and assignment, and Tenant agrees to
attorn to any entity purchasing or otherwise acquiring the Premises.
14.9 [See Addendum]
ARTICLE XV
DEFAULTS AND REMEDIES
15.1. TENANT'S DEFAULT. At the option of Landlord, a default under this
Lease by Tenant shall exist if any of the following events shall occur
(each is called an "Event of Default"):
-14-
(a) Tenant fails to pay the Rent payable hereunder, as and when
due, for a period of three (3) days after Notice by Landlord; provided,
however, the Notice given hereunder shall be in lieu of, and not in addition
to, any notice required under Section 1161, ET SEQ., of the California Code
of Civil Procedure;
(b) Tenant attempts to make or suffers to be made any transfer,
assignment or subletting, except as provided in Article XIV hereof;
(c) Any of Tenant's rights under this Lease are sold or otherwise
transferred by or under court order or legal process or otherwise or if any
of the actions described in Section 15.2 are taken by or against Tenant or
any Guarantor;
(d) The Premises are used for any purpose other than as permitted
pursuant to Article V;
(e) Tenant vacates or abandons the Premises or fails to
continuously and uninterruptedly conduct its business in the Premises;
(f) Any representation or warranty given by Tenant under or in
connection with this Lease proves to be materially false or misleading;
(g) Tenant fails to timely comply with the provisions of Article VI
("Hazardous Materials"), Article XIV ("Assignment and Subletting"), Article
XVI ("Subordination; Estoppel Certificate; Financials"), Section 21.5
("Modifications for Mortgagees") or Section 21.19 ("Authority'); or
(h) Tenant fails to observe, keep, perform or cure within fifteen
(15) days after Notice by Landlord any of the other terms, covenants,
agreements or conditions contained in this Lease or those set forth in any
other agreements or rules or regulations which Tenant is obligated to
observe or perform. In the event such default reasonably could not be cured
or corrected within such fifteen-day period, but is reasonably susceptible to
cure or correction, then Tenant shall not be in default hereunder if Tenant
commences the cure or correction of such default within such fifteen-day
period and diligently prosecutes the same to completion after commencing
such cure or correction. The Notice required by this subparagraph 15.1(h)
shall be in lieu of, and not in addition to, any notice required under
Section 1161, ET SEQ., of the California Code of Civil Procedure.
Notices given under this Section 15.1 shall specify the alleged default and
shall demand that Tenant perform the provisions of this Lease or pay the Rent
that is in arrears, as the case may be, within the applicable period of
time, or quit the Premises. No such Notice shall be deemed a forfeiture or a
termination of this Lease unless Landlord so elects in the Notice.
15.2. BANKRUPTCY OR INSOLVENCY. In no event shall this Lease be
assigned or assignable by operation of law and in no event shall this Lease
be an asset of Tenant in any receivership, bankruptcy, insolvency or
reorganization proceeding. In the event:
(a) A court makes or enters any decree or order adjudging Tenant to
be insolvent, or approving as properly filed by or against Tenant a petition
seeking reorganization or other arrangement of Tenant under any provisions of
the Bankruptcy Code or any applicable state law, or directing the winding up
or liquidation of Tenant and such decree or order shall have continued for a
period of thirty (30) days;
(b) Tenant makes or suffers any transfer which constitutes a
fraudulent or otherwise avoidable transfer under any provisions of the
Bankruptcy Code or any applicable state law;
(c) Tenant assigns its assets for the benefit of its creditors; or
(d) The material part of the property of Tenant or any property
essential to Tenant's business or of Tenant's interest in this Lease is
sequestered, attached or executed upon, and Tenant fails to secure a return
or release of such property within ten (10) days thereafter, or prior to sale
pursuant to such sequestration, attachment or levy, whichever is earlier;
then this Lease shall, at Landlord's election, immediately terminate and be
of no further force or effect whatsoever, without the necessity for any
further action by Landlord, except that Tenant shall not be relieved of
obligations which have accrued prior to the date of such termination. Upon
such termination, the provisions herein relating to the expiration or earlier
termination of this Lease shall control and Tenant shall immediately
surrender the Premises in the condition required by the provisions of this
Lease. Additionally, landlord shall be entitled to all relief, including
recovery of damages from Tenant, which may from time to time be permitted, or
recoverable, under the Bankruptcy Code or any other applicable state laws.
15.3. LANDLORD'S REMEDIES. Upon the occurrence of an Event of Default,
then, in addition to and without waiving any other rights and remedies
available to Landlord at law or in equity or otherwise provided in this
Lease, Landlord may, at its option, cumulatively or in the alternative,
exercise the following remedies:
(a) Landlord may terminate Tenant's right to possession of the
Premises, in which case this Lease shall terminate and Tenant shall
immediately surrender possession of the Premises to Landlord. No act by
Landlord other than giving Notice to Tenant of Landlord's election to
terminate Tenant's right to possession shall terminate this Lease. Acts of
maintenance, efforts to relet the Premises, or the appointment of a receiver
on Landlord's initiative to protect Landlord's interest under this Lease
shall not constitute a termination of Tenant's right to possession.
Termination shall terminate Tenant's right to possession of the Premises but
shall not relieve Tenant of any obligation under this Lease which has
accrued prior to the date of such termination. Upon such termination,
Landlord shall have the right to re-enter the Premises, and remove all
persons and property, and Landlord shall also be entitled to recover from
Tenant:
(i) The worth at the time of award of the unpaid Monthly Rent
and Additional Rent which had been earned at the time of termination;
(ii) The worth at the time of award of the amount by which the
unpaid Monthly Rent and Additional Rent which would have been earned after
termination until the time of award exceeds the amount of such rental loss
that Tenant proves could have been reasonably avoided;
(iii) The worth at the time of award of the amount by which the
unpaid Monthly Rent and Additional Rent for the balance of the Term after the
time of award exceeds the amount of such rental loss that Tenant proves could
be reasonably avoided;
-15-
(iv) Any other amount necessary to compensate Landlord for all
the detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which in the ordinary course of things would
be likely to result from Tenant's default, including, but not limited to, the
cost of recovering possession of the Premises, comissions and other expenses
of reletting, including necessary repair, demolition and renovation of the
Premises to the condition existing immediately prior to Tenant's occupancy,
the unamortized portion of any brokerage commissions funded by Landlord in
connection with this Lease, the cost of rectifying any damage to the Premises
occasioned by the act or omission of Tenant, reasonable attorneys' fees, and
any other reasonable costs; and
(v) At Landlord's election, all other amounts in addition to
or in lieu of the foregoing as may be permitted by law.
As used in subsections (i) and (ii) above, the "worth at the time of
award" shall be computed by allowing interest at the maximum legal rate
permitted by law. As used in subsection (iii) above, the "worth at the time
of award" shall be computed by discounting the amount at the discount rate of
the Federal Reserve Bank of San Francisco at the time of award plus one
percent (1%).
(b) Landlord may elect not to terminate Tenant's right to
possession of the Premises, in which event this Lease will continue in full
force and effect as long as Landlord does not terminate Tenant's right to
possession, and Landlord may continue to enforce all of its rights and
remedies under this Lease, including the right to collect all Rent as it
becomes due. In the event that Landlord elects to avail itself of the remedy
provided by this subparagraph 15.3(b), Landlord shall not unreasonably
withhold its consent to an assignment or subletting of the Premises subject
to the reasonable standards for Landlord's consent as are contained in this
Lease. In addition, in the event Tenant has entered into a sublease which
is valid under the terms of this Lease, Landlord may also, at its option,
cause Tenant to assign to Landlord the interest of Tenant under said
sublease, including, but not limited to, Tenant's right to payment of Rent as
it becomes due. Landlord may elect to enter the Premises and relet them, or
any part of them, to third parties for Tenant's account. Tenant shall be
liable immediately to Landlord for all costs Landlord incurs in reletting the
Premises, including, but not limited to, broker's commissions, expenses of
cleaning and remodeling the Premises required by the reletting, attorneys
fees and like costs. Reletting can be for a period shorter or longer than the
remaining Term of this Lease and for the entire Premises or any portion
thereof. Tenant shall pay to Landlord the Monthly Rent and Additional Rent
due under this Lease on the dates the Monthly Rent and such Additional Rent
are due, less the Rent Landlord actually collects from any reletting. Except
as provided in the preceding sentence, if Landlord relets the Premises or any
portion thereof, such reletting shall not relieve Tenant of any obligation
hereunder. Notwithstanding the above, no act by Landlord allowed by this
subparagraph 15.3(b) shall terminate this Lease unless Landlord notifies
Tenant in writing that Landlord elects to terminate this Lease.
15.4. NO SURRENDER. Tenant waives any right of redemption or relief
from forfeiture under California Code of Civil Procedure Sections 1174 and
1179, or under any other present or future law in the event Tenant is evicted
or Landlord takes possession of the Premises by reason of an Event of
Default. No act or thing done by Landlord or Landlord's Agents during the
Term shall be deemed an acceptance of a surrender of the Premises, and no
agreement to accept a surrender shall be valid unless in writing and signed
by Landlord. No employee of Landlord or of Landlord's Agents shall have any
power to accept the keys to the Premises prior to the termination of this
Lease, and the delivery of the keys to any employee shall not operate as a
termination of this Lease or a surrender of the Premises.
15.5. INTEREST ON LATE PAYMENTS. Any Rent due under this Lease that is
not paid to Landlord within three (3) days of the date when due shall
commence to bear interest at the Applicable Rate until fully paid. Neither
the accrual nor the payment of interest shall cure any default by Tenant
under this Lease.
15.6. ATTORNEYS' AND OTHER FEES. All sums reasonably incurred by
Landlord in connection with an Event of Default or holding over of possession
by Tenant after the expiration or termination of this Lease, including, but
not limited to, all costs, expenses and actual accountants', appraisers',
attorneys' and other professional fees, and any collection agency or other
collection charges, shall be due and payable by Tenant to Landlord on demand,
and shall bear interest at the Applicable Rate from the date of such demand
until paid by Tenant. In addition, in the event that any action shall be
instituted by either of the parties hereto for the enforcement of any of its
rights in and under this Lease, the party in whose favor judgment shall be
rendered shall be entitled to recover from the other party all expenses
reasonably incurred by the prevailing party in such action, including actual
costs and reasonable attorneys fees.
15.7. LANDLORD'S DEFAULT. Landlord shall not be deemed to be in default
in the performance of any obligation required to be performed by it hereunder
unless and until it has failed to perform such obligation within thirty (30)
days after receipt of Notice by Tenant to Landlord (and the Mortgagees who
have provided Tenant with notice) specifying the nature of such default;
provided, however, that if the nature of Landlord's obligation is such that
more than thirty (30) days are required for its performance, then Landlord
shall not be deemed to be in default if it shall commence such performance
within such thirty (30) day period and thereafter diligently prosecutes the
same to completion.
15.8. LIMITATION OF LANDLORD'S LIABILITY. The obligations of Landlord
do not constitute the personal obligations of the individual partners,
trustees, directors, officers or shareholders of Landlord or its constituent
partners. If Landlord shall fail to perform any covenant, term, or condition
of this Lease upon Landlord's part to be performed, Tenant shall be required
to deliver to Landlord Notice of the same. If, as a consequence of such
default, Tenant shall recover a money judgment against Landlord, such
judgment shall be satisfied only out of the proceeds of sale received upon
execution of such judgment and levied thereon against the right, title and
interest of Landlord in the Building and out of rent or other income from
such property receivable by Landlord or out of consideration received by
Landlord from the sale or other disposition of all or any part of Landlord's
right, title or interest in the Building, and no action for any deficiency
may be sought or obtained by Tenant.
15.9. MORTGAGEE PROTECTION. Upon any default on the part of Landlord,
Tenant will give notice by registered or certified mail to any Mortgagee who
has provided Tenant with notice of its interest together with an address for
receiving notice, and shall offer such Mortgagee a reasonable opportunity to
cure the default (which in no event shall be less than sixty (60) days),
including time to obtain possession of the Premises by power of sale or a
Judicial foreclosure, if such should prove necessary, to effect a cure.
Tenant agrees that each of the Mortgagees to whom this Lease has been
assigned by Landlord is an express third party beneficiary hereof. Tenant
shall not make any prepayment of Monthly Rent more than one (1) month in
advance without the prior written consent of such Mortgagee. Tenant waives
any right under California Civil Code Section 1950.5 or any other present or
future law to the collection of any deposit from such Mortgagee or any
purchaser at a foreclosure sale of such Mortgagee's interest unless such
Mortgagee or such purchaser shall have actually received and not refunded
the deposit. Tenant agrees to make all payments under this Lease to the
Mortgagee with the most senior encumbrance upon receiving a direction, in
writing, to pay said amounts to such Mortgagee.
-16-
Tenant shall comply with such written direction to pay without determining
whether an event of default exists under such Mortgagee's loan to Landlord.
15.10. LANDLORD'S RIGHT TO PERFORM. If Tenant shall at any time fail
to make any payment or perform any other act on its part to be made or
performed under this Lease, Landlord may (but shall not be obligated to), at
Tenant's expense, and without waiving or releasing Tenant from any
obligation of Tenant under this Lease, make such payment or perform such
other act to the extent Landlord may deem desirable, and in connection
therewith, pay expenses and employ counsel. All sums paid by Landlord and
all penalties, interest and costs, including, but not limited to, collection
costs and attorneys' fees reasonably incurred in connection therewith,
shall be due and payable by Tenant to Landlord, as an item of Additional
Rent, on demand by Landlord, together with interest thereon at the Applicable
Rate from the date of such demand until paid by Tenant.
15.11. LIMITATION OF ACTIONS AGAINST LANDLORD. Any claim, demand or
right of any kind by Tenant which is based upon or arises in connection with
this Lease shall be barred unless Tenant commences an action thereon within
six (6) months after the date that the act, omission, event or default upon
which the claim, demand or right arises, has occurred.
15.12. WAIVER OF JURY TRIAL. To the full extent permitted by law,
Tenant hereby waives the right to trial by jury in any action, proceeding or
counterclaim brought by Tenant on any matter whatsoever arising out of or in
any way connected with this Lease, the relationship of Landlord and Tenant,
Tenant's use or occupancy of the Premises and/or any claim of injury or
damage.
ARTICLE XVI
SUBORDINATION; ESTOPPEL CERTIFICATE; FINANCIALS
16.1. SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE. Without the
necessity of any additional document being executed by Tenant for the purpose
of effecting a subordination, and at the election of Landlord or any
Mortgagee or any ground lessor with respect to the land of which the Premises
are a part, this Lease shall be subject and subordinate at all times to (i)
all ground leases or underlying leases which may now exist or hereafter be
executed affecting the Building, and (ii) the lien of any Mortgage which may
now exist or hereafter be executed in any amount for which the Project, the
Building, ground leases or underlying leases, or Landlord's interest or
estate in any of said items is specified as security. Landlord or any such
Mortgagee or ground lessor shall have the right, at its election, to
subordinate or cause to be subordinated any such ground leases or underlying
leases or any such liens to this Lease. No subordination shall permit
material interference with Tenant's rights hereunder, and any ground lessor
or Mortgagee shall recognize Tenant and its permitted successors and assigns
as the tenant of the Premises and shall not disturb Tenant's right to quiet
possession of the Premises during the Term so long as no Event of Default has
occurred and is continuing under this Lease. If Landlord's interest in the
Premises is acquired by any ground Lessor or Mortgagee, or in the event
proceedings are brought for the foreclosure of, or in the event of exercise
of the power of sale under, any Mortgage made by Landlord covering the
Premises or any part thereof, or in the event a conveyance in lieu of
foreclosure is made for any reason, Tenant shall, notwithstanding any
subordination and upon the request of such successor in interest to
Landlord, attorn to and become the Tenant of the successor in interest to
Landlord and recognize such successor in interest as the Landlord under this
Lease. Although this Section 16.1 is self-executing, Tenant covenants and
agrees to execute and deliver, upon demand by Landlord and in the form
requested by Landlord, or any Mortgagee or ground lessor, any additional
documents evidencing the priority or subordination of this Lease with respect
to any such ground leases or underlying leases or the lien of any such
Mortgage, or evidencing the attornment of Tenant to any successor in Interest
to Landlord as herein provided. Tenant's failure to timely execute and
deliver such additional documents shall, at Landlord's option, constitute an
Event of Default hereunder.
16.2. ESTOPPEL CERTIFICATE. Tenant shall within ten (10) days following
written request by Landlord, execute and deliver to Landlord any documents,
including estoppel certificates, in a form required by Landlord (i)
certifying that this Lease is unmodified and in full force and effect or, if
modified, attaching a copy 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, (ii) acknowledging that
there are not, to Tenant's knowledge, any uncured defaults on the part of the
Landlord or stating the nature of any uncured defaults, (iii) evidencing the
status of this Lease as may be required by a Mortgagee or a purchaser of the
Premises, (iv) certifying the current Monthly Rent amount and the amount and
form of Security Deposit on deposit with Landlord, and (v) certifying to such
other information as Landlord, Landlord's Agents, Mortgagees and prospective
purchasers may reasonably request, including, but not limited to, any
requested information regarding Hazardous Materials. Tenant's failure to
deliver an estoppel certificate within ten (10) days after delivery of
Landlord's written request therefor shall constitute an Event of Default
hereunder.
16.3. FINANCIAL INFORMATION. Tenant shall deliver to Landlord, prior to
the execution of this Lease, and within ten (10) days following written
request therefor by Landlord at any time during the Term, Tenant's current
financial statements, and Tenant's financial statements for the two (2)
years prior to the current fiscal financial statement's year, certified to be
true, accurate and complete by the chief financial officer of Tenant,
including a balance sheet and profit and loss statement for the most recent
prior year (collectively, the "Statements") , which Statements shall
accurately and completely reflect the financial condition of Tenant. Landlord
agrees that it will keep the Statements confidential, except that Landlord
shall have the right to deliver the same to any proposed purchaser of the
Premises, the Project or any portion thereof, and to the Mortgagees of
Landlord or such purchaser. Tenant acknowledges that Landlord is relying on
the Statements in its determination to enter into this Lease, and Tenant
represents to Landlord, which representation shall be deemed made on the date
of this Lease and again on the Commencement Date, that no material change in
the financial condition of Tenant, as reflected in the Statements, has
occurred since the date Tenant delivered the Statements to Landlord. If any
material change in Tenant's financial condition, as reflected in the
Statements, occurs prior to the date of this Lease or prior to the
Commencement Date, as the case may be, or if Tenant fails to inform Landlord
of any such material change, Landlord shall have the right, in addition to
any other rights and remedies of Landlord, to terminate this Lease by notice
to Tenant given within thirty (30) days after Landlord learns of such
material change.
ARTICLE XVII
SIGNS AND GRAPHICS
Landlord shall designate the location on the Premises, if any, for one
(1) or more identification signs for Tenant. Tenant shall have no right to
maintain identification signs in any other location in, on or about the
Premises and shall not display or erect any other signs, displays or other
advertising materials that are visible from the exterior of the Building.
The size, design, color and other physical aspects of permitted
-17-
signs shall be subject to Landlord's written approval prior to installation,
which approval may be withheld in landlord's discretion, any Restrictions and
any applicable municipal or other governmental permits and approvals. All
such signs end graphics shall conform to the Sign Criteria. The cost of all
signs and graphics, including the installation, maintenance and removal
thereof, shall be at Tenant's sole cost and expense. If Tenant fails to
maintain its signs, or if Tenant fails to remove same upon termination of
this Lease and repair any damage caused by such removal (including, but not
limited to, repainting the affected area, if required by Landlord), Landlord
may do so at Tenant's expense. All sums reasonably disbursed, deposited or
incurred by Landlord in connection with such removal, including, but not
limited to, all costs, expenses and actual attorneys' fees, shall be due and
payable by Tenant to Landlord on demand by Landlord, together with interest
thereon at the Applicable Rate from the date of such demand until paid by
Tenant.
ARTICLE XVIII
QUIET ENJOYMENT
Landlord covenants that Tenant, upon performing the terms, conditions
and covenants of this Lease, shall have quiet and peaceful possession of the
Premises as against any person claiming the same by, through or under
Landlord.
ARTICLE XIX
SURRENDER: HOLDING OVER
19.1. SURRENDER OF THE PREMISES. Upon the expiration or earlier
termination of this Lease, Tenant shall surrender the Premises to Landlord in
its condition existing as of the Commencement Date, normal wear and tear and
acts of God excepted, with all interior walls in good repair, all carpets
shampooed and cleaned, the HVAC equipment, plumbing, electrical and other
mechanical installations in good operating order and all floors cleaned and
waxed, all to the reasonable satisfaction of Landlord. Tenant shall remove
from the Premises all of Tenant's Alterations which Landlord requires Tenant
to remove pursuant to Section 8.1 and all Tenant's Personal Property, and
shall repair any damage and perform any restoration work caused by such
removal. If Tenant fails to remove such Alterations and Tenant's Personal
Property which Tenant is authorized and obligated to remove pursuant to the
above, and such failure continues after the termination of this Lease,
Landlord may retain such property and all rights of Tenant with respect to it
shall cease, or Landlord may place all or any portion of such property in
public storage for Tenant's account. Tenant shall pay to Landlord, upon
demand, the costs of removal of any such Alterations and Tenant's Personal
Property and storage and transportation costs of same, and the cost of
repairing and restoring the Premises, together with attorneys' fees and
interest on said amounts at the Applicable Rate from the date of expenditure
by Landlord. If the Premises are not so surrendered at the termination of
this Lease, Tenant hereby agrees to indemnify Landlord and Landlord's Agents
against all loss or liability resulting from any delay by Tenant in so
surrendering the Premises, including, but not limited to, any claims made by
any succeeding tenant, losses to Landlord due to lost opportunities to lease
to succeeding tenants, and actual attorneys' fees and costs.
19.2. HOLDING OVER. If Tenant remains in possession of all or any part
of the Premises after the expiration of the Term with the prior written
consent of Landlord, such possession shall constitute a month-to-month
tenancy only and shall not constitute a renewal or extension for any further
term. If Tenant remains in possession of all or any part of the Premises
after the expiration of the Term without the prior written consent of
Landlord, such possession shall constitute a tenancy at sufferance. In
either of such events, Monthly Rent shall be increased to an amount equal to
one hundred fifty percent (150%) of the Monthly Rent payable during the last
month of the Term, and any other sums due hereunder shall be payable in the
amounts and at the times specified in this Lease. Any such tenancy shall
be subject to every other term, condition, and covenant contained in this
Lease.
ARTICLE XX
[INTENTIONALLY OMITTED]
ARTICLE XXI
MISCELLANEOUS AND INTERPRETIVE PROVISIONS
21.1. BROKER. Landlord and Tenant each warrant and represent to the
other that neither has had any dealings with any real estate broker, agent
or finder in connection with the negotiation of this Lease or the
introduction of the parties to this transaction, except for the Broker (whose
commission shall be paid by Landlord), and that it knows of no other real
estate broker, agent or finder who is or might be entitled to a commission or
fee in connection with this Lease. In the event of any additional claims for
brokers' or finders' fees with respect to this Lease, Tenant shall indemnify,
hold harmless, protect and defend Landlord from and against such claims if
they shall be based upon any statement or representation or agreement made
by Tenant, and Landlord shall indemnify, hold harmless, protect and defend
Tenant from and against such claims if they shall be based upon any
statement, representation or agreement made by Landlord.
21.2. EXAMINATION OF LEASE. Submission of this Lease for examination or
signature by Tenant does not create a reservation of or option to lease.
This Lease shall become effective and binding only upon full execution of
this Lease by both Landlord and Tenant.
21.3. NO RECORDING. Tenant shall not record this lease or any
memorandum of this Lease without Landlord's prior written consent, but if
Landlord so requests, Tenant agrees to execute, have acknowledged and
deliver a memorandum of this Lease in recordable form which Landlord
thereafter may file for record.
21.4. QUITCLAIM. Upon any termination of this Lease, Tenant shall, at
Landlord's request, execute, have acknowledged and deliver to Landlord an
instrument in writing releasing and quitclaiming to Landlord all right,
title and interest of Tenant in and to the Premises by reason of this Lease
or otherwise.
21.5. MODIFICATIONS FOR MORTGAGEES. If in connection with obtaining
financing for the Premises or any portion thereof, Landlord's Mortgagees
shall request reasonable modifications to this Lease as a condition to such
financing, Tenant shall not unreasonably withhold, delay or defer its consent
thereto, provided such
-18-
modifications do not adversely affect Tenant's rights hereunder. Tenant's
failure to so consent shall constitute an Event of Default under this Lease.
21.6. NOTICE. Any Notice required or desired to be given under this
Lease shall be in writing and shall be addressed to the address of the party
to be served. The addresses of Landlord and Tenant are as set forth in Items
1 and 3, respectively, of the Basic Lease Provision, except that (a) prior to
the Commencement Date, the address for Notices to Tenant shall be as set
forth opposite Tenant's signature on this Lease, and (b) from and after the
Commencement Date, notwithstanding the addresses for Tenant set forth in
Item 3 of the Basic Lease Provisions, all Notices regarding the operation
and maintenance of the Project shall be delivered to Tenant at the Premises.
Each such Notice shall be deemed effective and given (i) upon receipt, if
personally delivered (which shall include delivery by courier or overnight
delivery service), (ii) upon being telephonically confirmed as transmitted,
if sent by telegram, telex or telecopy, (iii) two (2) business days after
deposit in the United States mail in Orange County or in the county in which
the Premises are located, certified and postage prepaid, properly addressed
to the party to be served, or (iv) upon receipt if sent in any other way. Any
party hereto may from time to time, by Notice to the other in accordance with
this Section 21.6, designate a different address than that set forth above
for the purposes of Notice.
21.7. CAPTIONS. The captions and headings used in this Lease are for
the purpose of convenience only and shall not be construed to limit or extend
the meaning of any part of this Lease.
21.8. EXECUTED COPY. Any fully executed copy of this Lease shall be
deemed an original for all purposes.
21.9. TIME. Time is of the essence for the performance of each term,
condition and covenant of this Lease.
21.10. SEVERABILITY. If any one or more of the provisions contained
herein shall for any reason be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality, or unenforceability shall not
affect any other provision of this Lease, but this Lease shall be construed
as if such invalid, illegal or unenforceable provision had not been contained
herein.
21.11. SURVIVAL. All covenants and indemnities set forth herein which
contemplate the payment of sums, or the performance by Tenant after the Term
or following an Event of Default, including specifically, but not limited to,
the covenants and indemnities set forth in Section 5.3, Article VI, Article
VII, Section 8.1, Section 9.2, Section 11.1, Section 11.10, Article XV, and
Article XIX, and all representations and warranties of Tenant, shall
survive the expiration or sooner termination of this Lease.
21.12. CHOICE OF LAW. This Lease shall be construed and enforced in
accordance with the laws of the State of California. The language in all
parts of this Lease shall in all cases be construed as a whole according to
its fair meaning and not strictly for or against either Landlord or Tenant.
21.13. GENDER; SINGULAR, PLURAL. When the context of this Lease
requires, the neuter gender includes the masculine, the feminine, a
partnership or corporation or joint venture, the singular includes the plural
and the plural includes the singular.
21.14. NON-AGENCY. It is not the intention of Landlord or Tenant to
create hereby a relationship of master-servant or principal-agent, and under
no circumstance shall Tenant herein be considered the agent of Landlord, it
being the sole purpose and intent of the parties hereto to create a
relationship of Landlord and tenant.
21.15. SUCCESSORS. The terms, covenants, conditions and agreements
contained in this Lease shall, subject to the provisions as to assignment,
subletting, and bankruptcy contained herein and any other provisions
restricting successors or assigns, apply to and bind the heirs, successors,
legal representatives and assigns of the parties hereto.
21.16. WAIVER; REMEDIES CUMULATIVE. The waiver by either party of any
term, covenant, agreement or condition herein contained shall not be deemed
to be a waiver of any subsequent breach of the same or any other term,
covenant, agreement or condition herein contained, nor shall any custom or
practice which may grow up between the parties in the administration of this
Lease be construed to waive or to lessen the right of Landlord to insist upon
the performance by Tenant in strict accordance with all of the provisions of
this Lease. The subsequent acceptance of Rent hereunder by Landlord shall
not be deemed to be a waiver of any preceding breach by Tenant of any
provisions, covenant, agreement or condition of this Lease, other than the
failure of Tenant to pay the particular Rent payment so accepted, regardless
of Landlord's knowledge of such preceding breach at the time of acceptance of
such Rent payment. Landlord's acceptance of any check, letter or payment
shall in no event be deemed an accord and satisfaction, and Landlord shall
accept the check, letter or payment without prejudice to Landlord's right to
recover the balance of the Rent or pursue any other remedy available to it.
The rights and remedies of either party under this Lease shall be
cumulative and in addition to any and all other rights and remedies which
either party has or may have.
21.17. UNAVOIDABLE DELAY. Except for the monetary obligations of Tenant
under this Lease, neither party shall be chargeable with, liable for, or
responsible to the other for anything or in any amount for any Unavoidable
Delay and any Unavoidable Delay shall not be deemed a breach of or default in
the performance of this Lease, it being specifically agreed that any time
limit provision contained in this Lease (other than the scheduled expiration
of the Term) shall be extended for the same period of time lost by
Unavoidable Delay.
21.18. ENTIRE AGREEMENT. This Lease is the entire agreement between
the parties, and supersedes any prior agreements, representations,
negotiations or correspondence between the parties except as expressed
herein. Except as otherwise provided herein, no subsequent change or addition
to this Lease shall be binding unless in writing and signed by the parties
hereto.
21.19. AUTHORITY. If Tenant is a corporation or a partnership, each
individual executing this Lease on behalf of the corporation or partnership,
as the case may be, represents and warrants that he is duly authorized to
execute and deliver this Lease on behalf of said entity in accordance with
its corporate bylaws, statement of partnership or certificate of limited
partnership, as the case may be, and that this Lease is binding upon said
entity in accordance with its terms. If Tenant is a corporation, Tenant
shall, if requested by Landlord, within thirty (30) days after execution of
this Lease and prior to entering into possession of the Premises, deliver to
Landlord a certified copy of a resolution of the Board of Directors of the
corporation or certificate of the Secretary of the corporation, authorizing,
ratifying or confirming the execution of this Lease. If Tenant is a
partnership, Tenant shall, if requested by Landlord, within thirty (30) days
after the execution of this Lease and prior to entering into possession of
the Premises, deliver to Landlord a certified copy of its partnership
agreement authorizing such execution.
-19-
21.20. GUARANTY. As a condition to the execution of this Lease by
Landlord, the obligations, covenants and performance of the Tenant as herein
provided shall be guaranteed in writing by the Guarantor listed in Item 14 of
the Basic Lease Provisions, if any, on a form of guarantee provided by
Landlord.
21.21. EXHIBITS; REFERENCES. All exhibits, amendments, riders and
addenda attached to this Lease are hereby incorporated into and made a part
of this Lease. In the event of variation or discrepancy, the duplicate
original hereof (including exhibits, amendments, riders and addenda, if any,
specified above) held by Landlord shall control. All references in this
Lease to Articles, Sections, Exhibits, Riders and clauses are made,
respectively, to Articles, Sections, Exhibits, Riders and clauses of this
Lease, unless otherwise specified.
21.22. BASIC LEASE PROVISIONS. The Basic Lease Provisions at the
beginning of this Lease are intended to provide general information only. In
the event of any inconsistency between the Basic Lease Provisions and the
specific provisions of this Lease, the specific provisions of this Lease
shall prevail.
21.23. NO MERGER. The voluntary or other surrender of this Lease by
Tenant, or a mutual cancellation thereof, or a termination by Landlord, shall
not work a merger, and shall, at the option of Landlord, terminate all or any
existing subtenancies or may, at the option of Landlord, operate as an
assignment to Landlord of any or all such subtenancies.
21.24. JOINT AND SEVERAL OBLIGATIONS. If more than one person or entity
is Tenant, the obligations imposed on each such parson or entity shall be
joint and several.
21.25. NO LIGHT OR AIR EASEMENT. Any diminution or shutting off of
light or air by any structure which may be erected on lands adjacent to the
Building shall in no way affect this Lease, abate Rent or otherwise impose
any liability on Landlord. This Lease does not confer any right with regard
to the subsurface below the ground level of the Building.
21.26. SECURITY MEASURES. Tenant hereby acknowledges that Landlord shall
have no obligation whatsoever to provide guard service or other security
measures for the benefit of the Premises or the Project. Tenant assumes all
responsibility for the protection of Tenant, Tenant's Agents and the property
of Tenant and of Tenant's Agents from acts of third parties. Nothing herein
contained shall prevent Landlord, at Landlord's sole option, from providing
security protection for the Project or any part thereof, in which event the
cost thereof shall be included within the definition of Project Costs and
paid by Tenant in the manner set forth in Section 7.1.
THIS LEASE is effective as of the date the last signatory necessary
to execute this Lease shall have executed this Lease.
"LANDLORD"
[See Attachment No. 1 for
Landlord's signature block]
ADDRESS FOR NOTICES PRIOR TO "TENANT"
COMMENCEMENT DATE:
IMGIS, a California corporation
---------------------------------
10101 N. De Anza Blvd., Ste.
- ------------------------------------- ---------------------------------
210, Cupertino, CA 95014
- ------------------------------------- ---------------------------------
Attn: Nadine Franczyk By: /s/ [ILLEGIBLE]
----------------------------
Name: /s/ [ILLEGIBLE]
----------------------------
Title: /s/ [ILLEGIBLE]
----------------------------
By:
----------------------------
Name:
----------------------------
Title:
----------------------------
-20-
ATTACHMENT NO. 1
"LANDLORD"
DE ANZA PLAZA II, LLC, a Delaware
limited liability company
By: BINGHAM PARTNERS, LP, a
Delaware limited partnership
Its: Sole Member
By: ICIG BINGHAM, LLC, a Dela-
ware limited liability company
Its: Managing Limited Partner
By: INSIGNIA/ESG, INC., a
Delaware corporation
Its: Managing Member
By:
-----------------------------
Title:
--------------------------
Exhibit 10.8
EXHIBIT A
DESCRIPTION OF PREMISES
This Exhibit is attached to and made a part of that certain Standard
Form Office Lease dated May 29, 1998, by and between DE ANZA PLAZA II, LLC
("Landlord"), and IMGIS ("Tenant"), for the Premises known as 10101 North
De Anza Boulevard, Suite 230, Cupertino, California.
SECOND FLOOR
10101 N. DE ANZA BLVD.
[Floor Plan showing shaded space described as Lease Space (West Side),
3,531 USF, 4,025 USF, and other spaces described as Lease Space, 1,792 USF,
2,043 RSF (North Side); Lease Space (South Side), 3,461 USF, 3,946 RSF; and
Lease Space (East Side) 2,286 USF, 2,606 RSF.]
Exhibit 10.8
EXHIBIT B
PROJECT SITE PLAN
This Exhibit is attached to and made a part of that certain Standard
Form Office Lease dated May 29, 1998, by and between DE ANZA PLAZA II, LLC
("Landlord"), and IMGIS ("Tenant"), for the Premises known as 10101 North
De Anza Boulevard, Suite 230, Cupertino, California.
[MAP of the PROJECT SITE PLAN showing the 10101 De Anza Boulevard Site
surrounded by Stevens Creek Boulevard, Brandley Drive and Alves Drive on the
other three sides. Details of the site show a grassy area and
concrete/planter boxes on either side of the entrance to underground parking
and the stairway entrance to garage and garage exhaust fan house on the other
side of the building at 10101 De Anza Boulevard.]
EXHIBIT D
COMMENCEMENT DATE MEMORANDUM
("AS-IS")
DATE:_______________________, 199__
RE: Standard Form Lease dated ______________________________, by and between
________________________________________________________________________
________________________________, as "Landlord", and ___________________
________________________________________________________________________
as "Tenant", for the Premises known as _________________________________
_______________________________________________, California.
AGREEMENT
The undersigned hereby agree as follows:
1. The Commencement Date, as defined in and determined in accordance
with the Lease, is hereby stipulated for all purposes to be __________________
__________________________.
2. In accordance with the Lease, Monthly Rent (as defined in the
Lease) in the amount of $_______________, subject to adjustment in accordance
with the terms of the Lease, commences to accrue on _______________ and is due
and payable in advance on the first day of each end every month during the Term
(as defined in the Lease). Unless and until notified by Landlord to the
contrary, Tenant shall make its Rent checks payable to ________________________,
c/o 2201 Dupont Drive, Suite 100, Irvine, California 92715.
"Landlord"
----------------------------------------
----------------------------------------
By:
----------------------------------
Its:
-----------------------------
By:
----------------------------------
Its:
-----------------------------
"Tenant"
----------------------------------------
----------------------------------------
By:
----------------------------------
Its:
-----------------------------
By:
----------------------------------
Its:
-----------------------------
-1-
EXHIBIT G
RULES AND REGULATIONS
(Office)
This Exhibit is attached to and made a part of that certain Standard
Form Lease dated May 29, 1998, by and between De Anza Plaza II, LLC as
"Landlord", and IMGIS, as "Tenant", for the Premises known as 10101 North De
Anza Boulevard, Suite 230, Cupertino, California.
This Exhibit sets forth the rules and regulations governing Tenant's use
of the Common Area and the Premises leased to Tenant pursuant to the terms,
covenants and conditions of the Lease to which this Exhibit is attached and
therein made part thereof. Unless otherwise defined, capitalized terms used
herein shall have the same meanings as set forth in the Lease. In the event
of any conflict or inconsistency between this Exhibit and the lease, the
Lease shall control.
1. 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.
2. The walls, walkways, sidewalks, entrance passages, courts and
vestibules shall not be obstructed or used for any purpose other than
ingress and egress of pedestrian travel to and from the Premises, and shall
not be used for loitering or gathering, or to display, store or place any
merchandise, equipment or devices, or for any other purpose. The walkways,
entrance passageways, courts, vestibules and roof are not for the use of
the general public and Landlord shall in all cases retain the right to
control and prevent access thereto by all persons whose presence in the
judgment of the Landlord shall be prejudicial to the safety, character,
reputation and interests of the Building and its tenants, provided that
nothing herein contained shall be construed to prevent such access to
persons with whom Tenant normally deals in the ordinary course of Tenant's
business unless such persons are engaged in illegal activities. No tenant
or employee or invitee of any tenant shall be permitted upon the roof of the
Building.
3. No awnings or other projection shall be attached to the outside
walls of the Building. No security bars or gates, curtains, blinds, shades or
screens shall be attached to or hung in, or used in connection with, any
window or door of the Premises without the prior written consent of Landlord.
Neither the interior nor exterior of any windows shall be coated or
otherwise sunscreened without the express written consent of Landlord.
4. Tenant shall not in anyway deface any part of the Premises or the
Building. Tenant shall not lay linoleum, tile, carpet or other similar floor
covering so that the same shall be affixed to the floor of the Premises in
any manner except as approved by Landlord in writing. The expense of
repairing any damage resulting from a violation of this rule or removal of
any floor covering shall be borne by Tenant.
5. The toilet room, urinals, wash bowls and other plumbing apparatus
shall not be used for any purpose other than that for which they were
constructed and no foreign substance of any kind whatsoever shall be thrown
therein. The expense of any breakage, stoppage or damage resulting from the
violation of this rule shall be borne by Tenant.
6. Landlord shall direct electricians as to the manner and location of
any future telephone wiring. No boring or cutting for wires will be allowed
without the prior written consent of Landlord. The locations of the
telephone, call boxes and other office equipment affixed to the Premises
shall be subject to the prior written approval of Landlord.
7. The Premises shall not be used for manufacturing, retail sales, or
the storage of merchandise. No exterior storage shall be allowed at any
time without the prior written approval of Landlord. The Premises shall not
be used for a beauty parlor, manicuring, any medical use or washing of
clothes without the prior written consent of Landlord, or for lodging or
sleeping or for any immoral or illegal purposes. No Vending machines shall be
installed by or on behalf of Tenant within the Premises or the Project.
8. Tenant shall not make, or permit to be made, any unseemly or
disturbing noises or disturb or interfere with occupants of this or
neighboring buildings or premises or those having business with them, whether
by the use of any musical instrument, radio, phonograph, machinery, or
otherwise. Tenant shall not use, keep or permit to be used, or kept, any foul
or obnoxious gas or substance in the Premises or permit or suffer the
Premises to be used or occupied in any manner offensive or objectionable to
Landlord or other occupants of this or neighboring buildings or premises by
reason of any odors, fumes or gases.
9. Neither Tenant nor any of Tenant's Agents shall at any time bring
or keep upon the Premises any toxic, hazardous, inflammable, combustible or
explosive fluid, chemical or substance without the prior written consent of
Landlord. Smoking or carrying cigars or cigarettes in the common Area may be
regulated from time to time as determined by Landlord, and Tenant and
Tenant's Agents shall strictly comply with any such regulations.
10. No animals shall be permitted at any time within the Premises.
11. Tenant shall not use the name of the Building or the Project in
connection with or in promoting or advertising the business of Tenant, except
as Tenant's address, without the prior written consent of Landlord. Landlord
shall have the right to prohibit any advertising by Tenant which, in
Landlord's reasonable opinion, tends to impair the reputation of the Project
or its desirability for Its intended uses, and upon written notice from
Landlord Tenant shall refrain from or discontinue such advertising.
12. Canvassing, soliciting, peddling, parading, picketing,
demonstrating or otherwise engaging in any conduct that unreasonably impairs
the value or use of the Premises or the Project are prohibited and Tenant
shall cooperate to prevent the same.
13. All equipment of any electrical or mechanical nature shall be
placed by Tenant on the Premises, in settings approval by Landlord in
writing, in such a way as to best minimize, absorb and prevent any
G-1
vibration, noise or annoyance. No cooking shall be done or permitted upon
the Premises except pursuant to normal use of a microwave oven, toaster oven
and coffee maker for the sole benefit of Tenant and Tenant's Agents.
14. No safes, computers or other objects larger or heavier than the
freight elevators of the Building are limited to carry shall be brought into
or installed in the Premises. Landlord shall have the right to prescribe and
approve of the weight and position of safes, computers or other large or
heavy objects which shall, if deemed necessary by Landlord, be placed on some
type of applicable platform prescribed by Landlord to distribute the weight.
The moving of safes, computers or other large or heavy objects shall occur
only between those hours as may be designated by, and only upon previous
written notice to, Landlord, and the persons employed to move those objects
in or out of the Building must be reasonably acceptable to Landlord. No
freight, furniture or bulky matter of any description shall be received into
or moved out of the lobby of the Building or carried into the elevators
during normal business hours (i.e., Monday through Friday, 8:00 a.m. to 6:00
p.m.) unless approved in writing by Landlord.
15. No air conditioning unit or other similar apparatus shall be
installed or used by Tenant without the prior written consent of Landlord.
Tenant shall not install equipment, such as but not limited to electronic
tabulating or computer equipment, requiring electrical or air conditioning
service in excess of that to be provided by Landlord under the Lease.
16. No aerial antenna shall be erected on the roof or exterior walls
of the Premises, or on the grounds, without in each instance the prior
written consent of Landlord. Any aerial or antenna so installed by or on
behalf of Tenant without such written consent shall be subject to removal by
Landlord at any time without prior notice at the expense of Tenant, and
Tenant shall upon Landlord's demand pay a removal fee to Landlord of not less
than $200.00.
17. Landlord shall clean the Premises as provided in the Lease, and
except with the written consent of Landlord, no person or persons other than
those approved by Landlord will be permitted to enter the Building for that
purpose. Tenant shall not cause unnecessary labor by reason of Tenant's
carelessness and indifference in the preservation of good order and
cleanliness. All cardboard boxes must be "broken down", and all styrofoam
chips must be bagged or otherwise contained so as not to constitute a
nuisance.
18. Tenant shall see that the windows, transoms and doors of the
Premises are closed end securely locked before leaving the Building and
shall observe strict care not to leave windows open, if applicable, when it
rains. Tenant shall exercise extraordinary care and caution that all water
faucets or water apparatus are entirely shut off before Tenant or Tenant's
employees leave the Building, and that all electricity, gas or air shall
likewise be carefully shut off, so as to prevent waste or damage, and for
any default or carelessness Tenant shall make good all injuries sustained by
other tenants or occupants of the Building or Landlord.
19. All keys for the Premises shall be provided to Tenant by Landlord
and Tenant shall return to Landlord any of such keys so provided upon the
termination of the Lease. Tenant shall not change locks or install other
locks on doors of the Premises, without the prior written consent of
Landlord. In the event of loss of any keys furnished by Landlord for Tenant,
Tenant shall pay to Landlord the costs thereof. Upon termination of its
tenancy, Tenant shall deliver to Landlord all keys and access cards to the
Premises, the Building and Common Area.
20. No person shall enter or remain within the Project while
intoxicated or under the influence of liquor or drugs. Landlord shall have
the right to exclude or expel from the Project any person who, in the
absolute discretion of Landlord, is under the influence of liquor or drugs.
21. Tenant shall furnish and utilize masonite or plastic floor mats
so as to minimize carpet damage resulting from the use of rollers on chairs.
Tenant agrees to comply with all such Rules and Regulations. Should
Tenant not abide by these Rules and Regulations, Landlord or any "Operator,"
"Association" or "Declarant" under any Restrictions may serve a three (3) day
notice to correct the deficiencies. If Tenant has not corrected the
deficiencies by the end of the notice period, Tenant will be in default of
the Lease, and Landlord and/or its designee shall have the right, without
further notice, to cure the violation at Tenant's expense.
Landlord reserves the right to amend or supplement the foregoing Rules
and Regulations and to adopt and promulgate additional rules and
regulations applicable to the Premises. Notice of such rules and regulations
and amendments and supplements thereto, if any, shall be given to the Tenant.
Neither Landlord nor Landlord's Agents or any other person or entity
shall be responsible to Tenant or to any other person for the ignorance or
violation of these Rules and Regulations by any other tenant or other
person. Tenant shall be deemed to have read these Rules and Regulations and
to have agreed to abide by them as a condition precedent, waivable only by
Landlord, to Tenant's occupancy of the Premises.
G-2
EXHIBIT L
CALCULATION OF TENANT'S SHARE
This Exhibit is attached to and made a part of that certain Standard Form
Lease dated May 29, 1998, by and between De Anza Plaza II, LLC as "Landlord",
and IMGIS, as "Tenant", for the Premises known as 10101 North De Anza
Boulevard, Suite 230, Cupertino, California.
The capitalized terms used and not otherwise defined herein shall have
the same definitions as set forth in the Lease. The provisions of this
Exhibit shall supersede any inconsistent or conflicting provisions of the
Lease.
BUILDING AND PROJECT:
Tenant understands that the Premises are a part of a multi-tenant
Building, and that the Building is part of a multi-building Project containing
as of the date of the Lease approximately 74,589 square feet of space.
CALCULATION OF TENANT'S SHARE:
Tenant's Share of various Operating Expenses under the Lease shall
be determined as a function of Project square footage. Tenant acknowledges
that the total square footage of the Project may change from time to time,
and that Tenant's Share may vary accordingly, effective on the first day of
the month after each such change occurs.
Set forth below is the initial Tenant's Share (i.e. calculated as of
the date of the Lease) with respect to Operating Expenses to be charged as a
function of the Project, as of the date of the Lease.
Tenant's Share of the Project: 5.4%
-1-
ADDENDUM TO LEASE
This Addendum to Lease ("Addendum") is attached to and made a part of
that certain Standard Form Office Lease dated May 28, 1998, by and between DE
ANZA PLAZA II, LLC, a Delaware limited liability company, as "Landlord", and
IMGIS, a California corporation, as "Tenant", for the Premises known as 10101
North De Anza Boulevard, Suite 230, Cupertino, California. The capitalized
terms used and not otherwise defined herein shall have the same definitions
as set forth in the Lease. The provisions of this Addendum shall supersede
any inconsistent or conflicting provisions of the Lease.
1. PROJECT; BUILDING; PREMISES. The Premises are part of that certain
multi-building Project located in Cupertino, California, which Project is
commonly known as De Anza Plaza, and contains as of the date of the Lease
approximately 74,589 square feet of space. The Premises consist of a portion
of a building located within the Project, which portion is commonly known as
10101 North De Anza Boulevard, Suite 230 and consists of approximately 4,025
square feet. The Premises is shown as cross-hatched on EXHIBIT A attached to
the Lease. The term "Building" as used in the Lease (including this
Addendum) shall mean the building within which the Premises are located.
2. ADJUSTMENTS TO MONTHLY RENT. The Monthly Rent payable by Tenant
under the Lease during the Term shall be as follows:
Months Monthly Rent
------ ------------
01 - 12 $12,880.00 per month
13 - 24 $13,395.20 per month
25 - 36 $13,931.00 per month
37 - 48 $14,488.25 per month
49 - 60 $15,067.77 per month
3. NOTICES TO LANDLORD. The address of Landlord shall be c/o
Insignia/ESG of California, Inc., 160 W. Santa Clara Street, Suite 1350, San
Jose, California 95113, Attn: Mr. Mark Schmidt, or such other place as
Landlord may designate in writing to Tenant from time to time. Copies of all
notices and communications from Tenant to Landlord shall be sent by Tenant to
Insignia/ESG of California, Inc., One Technology Drive, Building G, Irvine,
California 92618-2339, Attn: Mr. John Combs.
4. CONSTRUCTION MANAGEMENT FEE. With respect to any Alterations made
by or on behalf of Tenant during the Term, Tenant shall pay to Landlord, upon
demand, a construction management fee equal to five percent (5%) of the total
cost of the Alterations in question.
5. ADJUSTMENTS IN SECURITY DEPOSIT.
5.1 FIRST ADJUSTMENT. Provided that no Event of Default occurs
during the first twelve (12) months of the Term, Landlord shall apply
$13,395.20 of the Security Deposit toward the Monthly Rent payable by Tenant
for the thirtieth (13th) month of the Term. Upon such application, the
Security Deposit shall be deemed to be reduced to $43,519.25. Upon the
occurrence of any Event of Default during the first twelve (12) months of the
Term, this Section 5 shall automatically become null and void and be without
further force or effect, and the Security Deposit shall remain $56,914.45
for the balance of the Term, without further adjustments.
5.2 SECOND ADJUSTMENT. Provided that no Event of Default occurs
during the first twenty-four (24) months of the Term, Landlord shall apply
$13,931.00 of the Security Deposit (as reduced pursuant to Section 5.1 above)
toward the Monthly Rent
1
payable by Tenant for the twenty-fifth (25th) month of the Term. Upon such
application, the Security Deposit shall be deemed to be further reduced to
$29,588.25. Upon the occurrence of any Event of Default during the period
from the thirteenth (13th) month of the Term and continuing until the end of
the twenty-fourth (24th) month of the Term, this Section 5.2 and Section 5.3
below shall automatically become null and void and be without further force
or effect, and the Security Deposit shall remain $43,519.25 for the balance
of the Term.
5.3 THIRD ADJUSTMENT. Provided that no Event of Default occurs
during the first thirty-six (36) months of the Term, Landlord shall apply
$14,488.25 of the Security Deposit (as reduced pursuant to Sections 5.1 and
5.2 above) toward the Monthly Rent payable by Tenant for the thirty-seventh
(37th) month of the Term. Upon such application, the Security Deposit shall
be deemed to be further reduced to $15,100.00. Upon the occurrence of any
Event of Default during the period from the twenty-fifth (25th) month of the
Term and continuing until the end of the thirty-sixth (36th) month of the
Term, this Section 5.3 shall automatically become null and void and be
without further force or effect, and the Security Deposit shall remain
$29,588.25 for the balance of the Term.
6. HAZARDOUS MATERIALS. The following is hereby added to the Lease as
Section 6.6:
6.6 Notwithstanding anything to the contrary contained in this
Article VI, Tenant shall only be liable with respect to Hazardous
Materials brought onto the Premises by Tenant, Tenant's Agents or persons
acting under the direction or control of Tenant or Tenant's Agents (e.g.,
a delivery person making a delivery to the Premises).
7. ASSIGNMENT AND SUBLETTING. The following is hereby added to the Lease
as Section 14.9:
14.9 TRANSFERS NOT REQUIRING LANDLORD'S CONSENT. Notwithstanding
the foregoing provisions of this Article XIV, Tenant may assign this
Lease or sublet the Premises or any portion of the Premises without the
necessity of Landlord's consent, to any corporation which controls, is
controlled by, or is under common control with Tenant, to any
corporation resulting from a merger or consolidation with Tenant, or to
any person or entity that acquires all of the assets of Tenant as a
going concern, if, and only if (i) Tenant provides Landlord with prior
written notice of such assignment or subletting and promptly
furnishes Landlord with the documents and information described in
Section 14.3 above, (ii) any such assignment or subletting is not a
subterfuge by Tenant to avoid its obligations under this Lease, and
(iii) in the case of a merger or consolidation or the acquisition of all
of the assets of Tenant as a going concern, the resulting entity or
transferee has a net worth at least equal to Tenant's net worth existing
as of Tenant's execution of this Lease, and such net worth of such
resulting entity or transferee does not decrease as a result of such
merger, consolidation or acquisition. All terms and conditions of this
Article XIV shall apply to any assignment or subletting permitted to be
made pursuant to this Section 14.9 without Landlord's consent
(including, without limitation, the terms and conditions of Section
14.2 above, but expressly excluding the terms of Sections 14.4(c) and
14.5 above), and, for purposes of such application, Tenant shall be
deemed to have requested Landlord's consent to, and Landlord shall be
deemed to
2
have consented to, the assignment or subletting in question.
3