1
EXHIBIT 10.3.4
LEASE
TERRADEV JEFFERSON LLC LESSOR
CHOLESTECH CORPORATION LESSEE
dba WellCheck.com
TABLE OF CONTENTS
Page
----
1. PARTIES...........................................................1
2. PREMISES..........................................................1
3. TERM..............................................................1
4. POSSESSION........................................................1
5. RENTAL............................................................1
6. LATE CHARGES......................................................1
7. SECURITY DEPOSIT..................................................2
8. SERVICES..........................................................2
9. INSURANCE.........................................................2
10. TAX INCREASES.....................................................3
11. MAINTENANCE AND REPAIRS...........................................4
12. SIGNS.............................................................5
13. USE...............................................................5
14. ENTRY BY LESSOR...................................................6
15. ELEVATORS.........................................................6
16. CONDITION OF PREMISES.............................................7
17. COMPLIANCE WITH LAW...............................................6
18. DESTRUCTION OF PREMISES...........................................7
19. ASSIGNMENT AND SUBLETTING.........................................8
20. SURRENDER OF LEASE................................................8
21. DEFAULT...........................................................9
22. INSOLVENCY OR BANKRUPTCY..........................................9
23. ALTERATIONS.......................................................9
24. INDEMNIFICATION OF LESSOR........................................10
25. WAIVER OF CLAIMS AND LIMITATION OF LIABILITY.....................10
26. WAIVER OF TERMS..................................................11
27. HOLDING OVER.....................................................11
28. ESTOPPEL CERTIFICATE.............................................11
29. TRANSFER OF LESSOR'S INTEREST....................................11
30. CONDEMNATION.....................................................12
31. SUBORDINATION....................................................12
32. SECURITY.........................................................12
33. ATTORNEYS FEES...................................................12
34. NOTICES..........................................................12
35. LIENS............................................................12
36. RECORDATION......................................................13
37. RULES AND REGULATIONS............................................13
38. QUIET ENJOYMENT..................................................13
2
39. RELOCATION.......................................................13
40. CORPORATE RESOLUTION.............................................13
41. GENERAL PROVISIONS...............................................13
SIGNATURE PAGE...................................................14
LEASE
PARTIES
1. This Lease is made this 28th day of July, 2000 by TERRADEV
JEFFERSON LLC, a California Limited Liability Company, hereinafter
referred to as "Lessor" and CHOLESTECH CORPORATION, a California
Corporation dba WellCheck.com, hereinafter referred to as "Lessee".
PREMISES
2. Lessor hereby leases to Lessee and Lessee hereby leases from
Lessor for the term , at the rental, and upon all of the conditions set
forth herein, that certain commercial space consisting of approximately
5,158 rentable square feet consisting of the ground floor and mezzanine
at 331 Jefferson Street, Oakland, California, hereinafter referred to as
the "Premises". Lessee's pro rata share of the rentable square feet of
the Building wherein the Premises are located is calculated by dividing
the rentable square feet of the Premises by the rentable square feet of
the Building.
Diagrammatic floor plans of the Premises are attached hereto as
Exhibit "A" and incorporated herein by reference.
TERM
3. This Lease is for a term ("The Term") commencing on the
earlier of 30 days after substantial completion of Lessor's Work
constructed pursuant to Paragraph 16 hereof which is estimated to be
September 1, 2000, or Lessee's occupancy of the Premises ("The
Commencement Date") and ending on the last day of the sixtieth month
thereafter. Once the Commencement Date and the last day of the term have
been determined, Lessor and Lessee shall execute a memorandum confirming
same.
POSSESSION
4. If Lessor, for any reason whatsoever, cannot deliver
possession of the Premises to Lessee within sixty (60) days after the
estimated completion of Lessor's Work, this Lease shall be void or
voidable at the option of the Lessee, written notice of which shall be
delivered to Lessor on such date; however, Lessor shall not be liable to
Lessee for any loss or damage resulting therefrom.
RENTAL
5. All rent is payable in advance and is due on the first day of
each calendar month, without deduction or offset at the address
specified by Lessor. Partial months, whether at the commencement or
termination of the Term, shall be prorated on a thirty (30) day basis.
Upon execution of this Lease, Lessee shall pay to Lessor in advance
the estimated first full months rent in the amount of $13,998.70 which
will be credited to Lessee's account commencing on the Commencement
Date, as hereinbefore defined. Minimum Monthly Rent during the first 12
full months following the Commencement Date shall be $2.70 per square
foot of space as reasonably calculated by Lessors Architect.
The initial Monthly Rent per square foot shall be subject to a four
percent (4%) adjustment on the first day of the month twelve full months
following the Commencement Date (the "Anniversary Date") and
1
3
on each Anniversary Date of the initial term thereafter as follows: year
2 - $2.81; year 3 - $2.92; year 4 - $3.04; year 5 - $3.16.
LATE CHARGES
6. Monthly Rent shall be due and payable on the first day of each
month during the Term of this Lease. Lessee acknowledges that late
payment by Lessee to Lessor of Monthly Rent will cause Lessor to incur
costs not contemplated by this Lease, the exact amount of such costs
being extremely difficult and impracticable to fix. Such costs include,
without limitation, processing and accounting charges, and late charges
that may be imposed on Lessor by the terms of any encumbrance and note
secured by the Premises. Therefore, if any installment of rent due from
Lessee is not received by Lessor on or before the fifth day of the
month, Lessee shall pay to Lessor an additional sum of ten percent (10%)
of the Monthly Rent as a late charge.
The parties agree that this late charge represents a fair and
reasonable estimate of the costs that Lessor will incur by reason of
late payment by Lessor. Acceptance of any late charge or late rent shall
not constitute a waiver of Lessee's default with respect to the overdue
amount, nor prevent Lessor from exercising any of the other rights and
remedies available to Lessor.
SECURITY
DEPOSIT
7. Lessor acknowledges receipt of the amount of $41,310.00 which
Lessor is to retain as security for the faithful performance of all of
the covenants, conditions and agreements of the Lessee under the Lease.
In no event shall Lessor be obligated during the Term to apply all or
any part of the same towards rents or other charges or for damages upon
Lessee's failure to perform any of the covenants, conditions and
agreements of the Lease.
The security deposit, to the extent not used by Lessor, shall be
returned to Lessee (without interest for the period said moneys were
held by Lessor) after the Lessor receives possession of the Premises or
Lessor shall notify Lessee of its disposition. Lessor's obligations with
respect to the security deposit are those of a debtor and not a trustee.
In the event that during the Term Lessor uses all or any portion
of such security deposit to remedy any default of Lessee, Lessee agrees
to redeposit the amount so used or applied within ten (10) days from the
date of Lessor's demand therefore.
SERVICES
8. (a) Except as provided below, Lessee agrees to pay for
utilities furnished to the Premises during the Term, including but not
limited to electricity, gas, water, telephone service, janitorial
service or any other services contracted for by Lessee. If the Premises
are not separately metered, Lessee shall reimburse Lessor for Lessee's
pro rata usage based on the ratio of the square footage of Lessee's
Premises to the square footage of building served by the meter in
question.
(b) Lessor will provide space for Lessee to maintain a trash bin
for normal office use in the designated common area of the Building.
Lessee shall deposit and confine all trash and refuse of Lessee in the
bin and pay for the removal thereof.
(c) Lessee shall provide and maintain fire extinguishers in such
numbers and locations specified by the insurance underwriters, the
Oakland Fire department, and all applicable governmental regulations.
2
4
INSURANCE
9.1 (a) Lessee, at Lessee's sole expense, shall obtain, update
and keep in force during the Term all-risk insurance policies providing
the following coverage:
(1) Standard fire insurance, with extended coverage, covering all
of Lessee's fixtures, furniture, equipment, inventory, goods and other
personal property on the Premises and also covering any of Lessee's
leasehold improvements and alterations not constructed by Lessor
pursuant to Paragraph 16, to the extent of at least eighty percent (80%)
of the replacement value thereof;
(2) Commercial public liability and property damage insurance
insuring against all claims, accidents injuries and damages or bodily
injury to, and death of, persons, and for loss of, or damage to,
property, arising out of the use, occupancy or maintenance of the
Premises by Lessee, its employees, agents, representatives and invitees.
Such insurance shall have liability limits of (i) not less than $500,000
per occurrence for bodily injuries or death and (ii) not less than
$500,000 per occurrence for property damage.
(b) Policies or confirmation thereof, of insurance provided for
herein shall be delivered to Lessor prior to the Lease Commencement Date
and shall (i) be approved as to form and substance by Lessor, which
approval shall not be unreasonably withheld, (ii) be issued by insurance
companies which are qualified to do business in the State of California
and which are rated A-VIII or better in the most currently available
'Best's Insurance Reports", (iii) be issued in the name of Lessee and
Lessor shall be named an additional insured for the mutual and joint
benefit and protection of Lessor and Lessee as their interests may
appear, provided, however, that Lessee's interest in any proceeds of a
fire insurance or casualty policy shall be subordinate to Lessor's to
the extent that any funds advanced by Lessor for Tenant Improvements
shall not be fully repaid, (iv) give Lessor thirty (30) days' prior
written notice of any cancellation or lapse or any reduction in the
amounts of insurance, and (v) contain an endorsement containing an
express waiver of any right of subrogation by the insurance company
against Lessor (whether Lessor is named as an insured or not). All
public liability, property damage and other casualty policies provided
for herein shall (i) contain a provision that Lessor, although named as
an additional insured, shall nevertheless be entitled to recover under
said policies for any loss occasioned to Lessor or to Lessor's
employees, agents, invitees, or representatives or to Lessor's property
by reason of the negligence of Lessee or Lessee's employees, agents or
representatives, and (ii) be written as primary policies, not
contributing to, or in excess of, coverage which Lessor may carry.
(c) Executed copies of such policies of insurance or certificates
thereof shall be delivered to Lessor within ten (10) days after delivery
of possession of the Premises to Lessee and thereafter renewal notices
at least fifteen (15) days prior to the expiration of the term of such
policy. If not so delivered, Lessor may, but shall not be required to,
order such insurance and charge the cost thereof to Lessee, which amount
shall be payable on demand.
(d) No more than once every two years during the term hereof,
Lessor may request that Lessee increase the limits of its public
liability insurance to such limits as Lessor shall deem reasonably
necessary.
9.2 Lessor shall obtain and keep in force during the term hereof
a policy or policies of insurance covering loss or damage to Lessor's
buildings, providing protection against all perils included within the
classification of fire, extended coverage, vandalism, and malicious
mischief, such insurance to be in an amount of at least eighty percent
of the replacement cost of Lessor's buildings, and to contain an agreed
amount endorsement. Lessor shall also maintain commercial public
liability insurance. Annually, Lessee shall reimburse Lessor by Lessee's
pro rata share specified in paragraph 2 hereof of costs incurred by
Lessor for Lessor's insurance provided pursuant to this paragraph.
3
5
9.3 Any insurance carried by either party with respect to the
premises and property or occurrences relating to them shall include a
clause or endorsement denying to the insurer rights of subrogation
against the other party to the extent rights have been waived by the
insured prior to occurrence of injury or loss. Each party,
notwithstanding any provisions of this lease to the contrary, waives any
right of recovery against the other for injury or loss due to hazards
covered by insurance containing such clause or endorsement to the extent
that the injury or loss is covered by such insurance.
REAL PROPERTY TAXES
10. On April 1 and December 1 of each year during the Term,
Lessee shall pay to the Lessor upon notice its pro rata share of the
total Real Property Taxes upon the whole of the land and Building upon
and within which the Premises are situate. Tenant's pro rata share is
calculated by dividing the square foot area of the Premises by the total
square feet of the Building as provided in paragraph 2. Lessee shall be
solely responsible for any increase in taxes caused by an increase in
assessed valuation due to work done, construction improvements made or
equipment installed, by Lessee in the Premises at any time during the
Term.
The amount of Lessee's obligation under this paragraph for the
first and last years of the Term shall be prorated in the proportion
that the period this Lease is in effect during the tax year in which
this Lease is in force bears to the full tax year.
Lessee shall also pay, before delinquency any and all taxes
levied or assessed and which become payable, during the Term upon
Lessee's equipment, furniture, fixtures and other personal property
located in the Premises. In addition to rental and other charges to be
paid by Lessee hereunder, Lessee shall reimburse to Lessor, upon demand,
any and all taxes, assessments or special assessments payable by Lessor
(other than net income taxes) whether or not now customary or within the
contemplation of the parties hereto: (a) upon, allocable to, or measured
by or on the same percentage as the square foot area of the Premises
bears to the square foot area of the entire Building including, without
limitation, any gross income tax or excise tax levied by the State, any
political subdivision thereof, or Federal Government with respect to the
receipt of such rental; or (b) upon, or with respect to, the possession,
leasing, operation, management, maintenance, alteration, repair, use of
occupancy by Lessee of the Premises or any portion thereof; or (c) upon
or measured by the value of Lessee's equipment, furniture, fixtures and
other personal property located in the Premises or by the cost or value
of any leasehold improvements located in the Premises; or (d) upon this
transaction or any document to which Lessee is a party creating or
transferring an interest or an estate in the Premises. The term "Real
Property Taxes" shall not include and Lessee shall not be required to
pay any portion of any tax or assessment expense or any increase therein
(a) levied on Lessor's rental income, unless such tax or assessment
expense is imposed in lieu of real property taxes; (b) in excess of the
amount which would be payable if such tax or assessment expense were
paid in installments over the longest possible term; (c) imposed on land
and improvements other than the Building; or (d) attributable to
Lessor's net income, inheritance, gift, transfer, or estate taxes.
Lessor shall furnish copies of the tax bill for the year in
question at Lessee's request.
MAINTENANCE
AND REPAIRS
11. (a) Except as provided in paragraphs 18 and 30 hereunder,
Lessor shall, at Lessor's sole cost and expense, keep and maintain, in
good condition, the structural parts of the Building in which the
Premises are located. As used herein, "structural parts" include only
the foundations, bearing and exterior walls (excluding glass and doors),
sub-flooring and roof and the unexposed plumbing and sewage systems,
servicing the Premises. Notwithstanding any of the above, Lessee shall
be liable for any damage to the structural parts or other parts of the
Building which are caused by, or result from the acts or omissions of
Lessee, its authorized agents, or representatives or employees or
invitees.
4
6
(b) Lessor shall maintain the common areas of the building
including the landscaping and any HVAC, plumbing, or electrical systems
serving the building as a whole as opposed to systems devoted
exclusively to a particular tenant. Lessee shall reimburse Lessor its
pro rata share of such common area expenses pursuant to Paragraph 1.
Such common area expenses shall not include costs which could properly
be capitalized under generally accepted accounting principles, except to
the extent amortized over the useful life of the capital item in
question.
(c) Lessee shall, at Lessee's sole cost and expense, keep and
maintain the Premises, and all improvements in or exclusively serving
said Premises in good condition and repair. Lessor shall have no
responsibility to maintain or repair the Premises unless any damage to
said Premises are caused by (i) acts or omissions of the Lessor, or its
authorized agents, representatives or employees, or (ii) Lessor's
negligent failure to perform its obligations above stated.
In the event Lessee fails to maintain and repair the Premises or
fails to commence appropriate work within ten (10) days following notice
from Lessor, Lessor may, at Lessor's option, cause the maintenance and
repairs to be made and Lessee shall pay to Lessor the total cost thereof
within ten (10) days of Lessor's written demand for said payment. Lessor
may, at its discretion, determine that a particular needed repair
constitutes an emergency. If Lessor determines that a repair is an
emergency, Lessor shall make reasonable efforts to notify Lessee of said
emergency condition and request immediate repairs. In the event that
Lessor is unable to contact Lessee or Lessee fails to make said
emergency repairs immediately upon the request of Lessor, Lessor may, in
its discretion, cause said emergency repairs to be made and Lessee shall
pay to Lessor the cost of said repairs within ten (10) days' written
notice thereof. Nothing contained in this paragraph shall be construed
to impose upon Lessor any obligation to make any emergency or
non-emergency maintenance or repairs to said Premises.
SIGNS
12. At Lessor's cost, Lessor shall provide one door or wall sign
to the Premises, said door or wall sign to include the street address.
At Lessee's cost, Lessor will permit Lessee to install a sign on the
exterior of the building. The location and design of the sign shall be
subject to the requirements of the City of Oakland and Lessor's
reasonable approval.
Except as approved by Lessor, Lessee agrees that Lessee will not
construct or place, or permit to be constructed or placed, signs,
displays, advertisements, awnings, marquees, or other items on the
exterior of the Premises, nor on the interior of the windows. Any signs,
displays, advertisements, or decorations placed by Lessee without
Lessor's prior written consent shall be removed within ten (10) days
after receiving written notice from Lessor to remove same, Lessor
reserves the right to enter the Premises and remove them at Lessee's
expense.
Any approved sign provided for or allowed herein to be installed
by Lessee shall, unless otherwise agreed, be removed at the expiration
or earlier termination of the Lease at Lessee's expense and Lessee shall
repair any damage caused to the Premises resulting from such removal. If
Lessee fails to do so, Lessor may cause such removal and repair on
Lessee's behalf, at Lessee's expense.
USE
13. Lessee shall use the Premises for general offices, and shall
not use or permit the Premises to be used for any other purpose without
the prior written consent of Lessor.
Ingress and egress for the moving of office furniture,
furnishings, equipment, file cabinets and supplies shall be a done in
accordance with Building policy and with notification to Lessor.
Lessee shall not do, or permit anything to be done, in or about
the Premises therein which will in any way increase the existing rate
of, or affect any fire or other, insurance coverage upon the Building or
its contents, or cause cancellation of any insurance policy covering
said Building or any part thereof or its contents. Lessee shall not do,
or permit anything to be done in or about the Premises, including common
5
7
areas, which will in any way obstruct or interfere with the rights of
other Lessees or occupants of the Building or injure or annoy them or
use or allow the Premises to be used for any improper, immoral, unlawful
or objectionable purpose. Lessee shall not cause, maintain or permit any
nuisance or waste in, on or about the Premises.
Lessee shall not use the Premises, or permit them to be used, for
any auction, fire, liquidation, or bankruptcy sale.
In the event of the Lessee's failure to comply with any provision
in this paragraph, Lessor, at its option, may treat such failure as a
breach of this Lease or require that Lessee pay for any increase in the
rate of any insurance, or for any other damages, resulting from said
failure to comply.
ENTRY BY
LESSOR
14. Upon reasonable notice (24 hours except in case of
emergency), Lessee will permit Lessor and his agents to enter into the
Premises at all reasonable times to inspect them and to maintain the
Building in which the Premises are situated, or to make repairs,
alterations, or additions to any other portion of said Building. Lessor
shall use reasonable efforts to minimize any disturbance to Lessee's
business operations during any such entry. This entry shall be without
any rebate of rent to the Lessee for any loss of occupancy or quiet
enjoyment of the Premises thereby occasioned. The work to be performed
by Lessor shall include the right to penetrate walls, floor and ceilings
of the Premises if necessary for improvements or alterations or areas
outside of the Premises. Lessor shall use reasonable efforts to confine
such activities within the demising walls. If, however, it is
impractical to confine such alterations to the demising walls, Lessor
may invade the demised Premises to accomplish such work without
abatement of rent so long as there is a reduction of no more than 2-1/2
square feet of floor area from the demised Premises. Such installations
shall be concealed and made as inconspicuous as reasonably possible.
Such penetrations shall be diligently and promptly repaired to its
previous appearance and condition and shall not materially or
unreasonably affect or interrupt the Lessee's conduct of business. Such
installations shall be made in a workmanlike manner during normal
business days and hours observed by local trades or crafts involved in
such work and with minimum disruption of the Premises of Lessee.
Lessor may also have access to said Premises to exhibit them
during reasonable hours to prospective purchasers and tenants. Lessor
reserves the right to place "For Sale" of Building (not business) signs
on the Premises at any time during the Lease, or "For Lease" or "For
Rent' signs on the Premises at any time within ninety (90) days of the
expiration of the Lease.
For each of the aforesaid purposes, Lessor and/or its agent shall
at all times have and retain a key with which to unlock all of the doors
in, upon and about the Premises, excluding Lessee's vaults and safes.
Lessee shall not alter any lock or install a new or additional lock or
any bolt on any door of the Premises without prior written consent of
the Lessor. If Lessor shall give its consent, Lessee shall in each case
furnish the Lessor with a key for any such lock.
ELEVATORS
15. Not Applicable.
CONDITION OF
PREMISES
16. As of the date of this Lease, Lessor is in the process of
renovating and making additions to the building of which the Premises
are a part. At Lessor's sole cost, the building and Premises will be
provided with the following improvements referred to as "Lessor's Work":
HVAC delivered to the open areas of the
6
8
Premises and into toilet areas; exterior doors; guard rail on the
mezzanine and stair; painted walls as shown on Lessor's floor plan;
light fixtures based on Lessor's existing lighting plan which includes
lights above and below the mezzanine; irregularities in floor to be
filled pursuant to plans and specifications of Lessor's Architect and
made ready for carpet; sound proofing of mezzanine to be accomplished by
installation of pad and carpet; plumbing to kitchen to include single
stainless steel sink, single lever faucet, and limited kitchen counter
and under counter cabinets in melamine/Formica per Lessor's choice; 200
amp power panel; electrical lines/outlets provided per Lessor's existing
power plan; and an allowance for carpet and pad of $27.00 per square
yard. Lessor shall complete Lessor's Work in a good and workmanlike
manner and in compliance with all laws. Lessee's acceptance of the
Premises shall not be deemed a waiver of Lessee's right to have Lessor
at Lessor's expense repair any defects in Lessor's Work. Lessor
represents as of the Commencement Date that the Premises will be in good
condition and repair, the roof water tight and in good condition, and
the electrical, mechanical, plumbing, HVAC and other systems serving the
Premises will be in good condition and repair.
In addition, Lessee shall improve the Premises pursuant to plans
and specifications prepared by Lessee's Architect and approved by
Lessor. Lessor shall provide a Tenant Improvement Allowance of Ten
Dollars ($10.00) per square foot of Premises. The Tenant Improvement
Allowance includes the charges of Lessee's architect, engineers,
permits, as well as direct costs of construction. In the event Lessee
employs consultants and contractors other than those retained by Lessor,
any costs incurred by Lessor to review Lessee's Tenant Improvement plans
shall be paid from the Tenant Improvement Allowance. Lessor will not
assess any charge for its own personnel in reviewing such plans or
inspecting the construction. Any costs in excess of $10.00 per square
foot shall be paid by Lessee.
By entry hereunder, excepting any "punchlist" items specified by
Lessee, Lessee accepts the Premises as being in good and sanitary order,
condition and repair. Lessee agrees on the last day of the Term, or
sooner termination of this Lease, to surrender to Lessor the Premises in
the same condition and state as when received, reasonable use and wear
excepted, and to remove all of the Lessee's signs from said Premises.
COMPLIANCE
WITH LAW
17. Lessee shall not use, nor permit anything to be done in or
about the Premises which will in any way conflict with any law, statute,
ordinance or governmental rule or regulation now in force or hereafter
enacted or promulgated. Lessee shall, at its sole cost and expense,
promptly comply with all laws, statutes, ordinances and governmental
rules, regulations and requirements now or hereafter in force, and with
the requirements of any board of fire insurance underwriters or other
similar bodies now or hereafter constituted, relating to, or affecting
the condition, use or occupancy of the Premises, excluding structural
changes not related to or affected by Lessee's improvements or acts. The
judgment of any court of competent jurisdiction or the admission of
Lessee in any action against Lessee, whether Lessor be a party thereto
or not, that Lessee has violated any law, statute, ordinance or
governmental rule, regulation or requirement, shall be conclusive of
that fact as between the Lessor and Lessee.
To the best of Lessor's knowledge, (a) no Hazardous Material is
present in the Property or the soil, surface water, or groundwater
thereof, (b) no underground storage tanks are present on the property,
and (c) no action, proceeding, or claim is pending or threatened
regarding the Property concerning any Hazardous Material or pursuant to
any environmental law. Under no circumstances shall Lessee be liable for
any losses, costs, claims liabilities and damages (including attorneys'
fees and consultants' fees) of every type and nature, directly or
indirectly arising out of or in connection with any Hazardous Material
present at any time on or about the Property, or the soil, air,
improvements, groundwater or surface water thereof, except to the extent
that any of the foregoing actually results from the release or emission
of Hazardous Material by Lessee or its agents or employees in violation
of applicable environmental laws. "Hazardous Material" shall mean any
material which is now or hereafter regulated by any governmental
authority or which poses a hazard to the environment or human life.
7
9
DESTRUCTION
OF PREMISES
18. In the event of a partial destruction of said Premises during
the Term, from an insured cause, Lessor shall forthwith repair the
Premises provided such repairs, in Lessor's sole opinion can be
completed within ninety (90) days, such repairs to be made in accordance
with the laws and regulations of State, Federal, County or Municipal
authorities. Such partial destruction shall in no way annul or void this
Lease, except that Lessee shall be entitled to a reduction of rent while
such repairs are being made, in proportion to the square footage of the
Premises which is rendered unusable by Lessee in the conduct of its
business.
If such repairs, in Lessor's sole opinion, cannot be completed in
ninety (90) days or, if such partial destruction results from an
uninsured cause, Lessor may, at its option repair the same within a
reasonable time, not to exceed 180 days or Lessor and Lessee may
mutually agree that Lessor may make such repairs within such greater
period of time as Lessor and Lessee may designate, this Lease continuing
in full force and effect and the rent to be proportionately reduced as
said in the preceding paragraph.
In the event that Lessor determines that such partial destruction
cannot be repaired in ninety (90) days or if such partial destruction
results from an uninsured cause and Lessor elects not to make such
repairs, this Lease may be terminated at the option of either party. In
the event that the Building in which the Premises are situated is
destroyed to the extent of at least 33-1/3 % of the replacement cost
thereof, Lessor may elect to terminate this Lease, whether the Premises
be injured or not. A total destruction of the Building in which the
Premises may be situated shall terminate this Lease.
If Lessor is required or elects to restore the Premises as
provided in this paragraph, Lessor shall not be required to restore
alterations made by Lessee including Lessee's Initial Tenant
Improvements or Lessee's personal property, such items being the sole
responsibility of Lessee to restore at Lessee's sole cost and expense.
Lessee hereby waives any rights it may have to terminate this
Lease pursuant to California Civil Code Sections 1932(2) and 1933(4),
except as provided hereunder.
ASSIGNMENT AND
SUBLETTING
19. Lessee shall not assign, mortgage or hypothecate this Lease,
or any interest in this Lease, or permit the use of the Premises by any
person or persons other than Lessee, or sublet the Premises, or any part
of the Premises without Lessor's prior written consent, which consent
shall not be unreasonably withheld. Any sublease rents in excess of the
base rent reserved under this lease shall be divided 50% to Lessee and
50% to Lessor.
Lessor's consent to any proposed assignment or subletting may
take into account the financial worth and stability and the business
experience of any proposed transferee.
A transfer of this Lease from Lessee to a) a corporation into
which Lessee is merged or consolidated or acquiring all of the property
of Lessee and assuming all of Lessee's liability and the net worth of
said corporation is equal or more than the net worth of Lessee at the
time of commencement of this Lease, or b) a subsidiary of Lessee in
which Lessee owns greater than fifty percent (50%) of the shares of such
subsidiary, shall not constitute an assignment or sublease for the
purposes of this Lease and shall not require Lessor's consent hereunder,
however, Lessee agrees to give Lessor prompt written notice of any such
transfer.
Except as specified hereinabove, any attempted assignment or
subletting without Lessor's prior written consent shall be void and
shall, at the option of the Lessor, terminate this Lease. Consent by
Lessor to any assignment or subletting shall not release Lessee from its
primary liability under the Lease and Lessor's consent to one
assignment, subletting or occupation or use by other parties shall not
be deemed a consent to other subleases or assignments or occupation or
use by other parties.
8
10
Lessee immediately and irrevocably assigns to Lessor, as security
for Lessee's obligations under this Lease, all rent from any subletting
of all or a part of the Premises as permitted by this lease, and Lessor,
as assignee, shall be the attorney-in-fact for Lessee to collect such
rent and apply it towards Lessee's obligations under this Lease; except
that, until the occurrence of an act of default by Lessee, Lessee shall
have the right to collect such rent.
SURRENDER
OF LEASE
20. The voluntary or other surrender of this Lease by Lessee, or
a mutual cancellation thereof, shall not work a merger, and shall, at the option
of Lessor, terminate all or any existing subleases or subtenancies, or may, at
the option of Lessor, operate as an assignment to Lessor of any or all such
subleases or subtenancies.
DEFAULT
21. The occurrence of any one or more of the following events in
addition to those provided elsewhere in this Lease shall
constitute a material default and breach of this Lease by
Lessee:
(a) The vacating or abandonment of the Premises by Lessee,
(b) The failure by Lessee to make any payment of rent or any
other payment required to be made by Lessee hereunder, as and when due,
where such failure shall continue for a period of five (5) working days
after written notice thereof from Lessor to Lessee.
(c) The failure by Lessee to observe or perform any of the
covenants, conditions or provisions of this Lease to be observed or
performed by Lessee, other than described in paragraph (b) above, where
such failure shall continue for a period of thirty (30) days after
written notice hereof from Lessor to Lessee; provided, however, that if
the nature of Lessee's default is such that more than thirty (30) days
are reasonably required for its cure, then Lessee shall not be deemed to
be in default if Lessee commenced such cure within said twenty-day
period and thereafter diligently pursues such cure to completion.
(d) In the event of any breach of this Lease by Lessee, then
Lessor, besides other rights and remedies it may have, shall have the
immediate right of re-entry and may remove all persons and property from
the Premises. If the Lessor's right of re-entry is exercised following
abandonment of the Premises by the Lessee, then Lessor may consider any
personal property belonging to Lessee and left on the Premises to also
have been abandoned, in which case Lessor may dispose of all such
personal property in any manner Lessor shall deem proper and is hereby
relieved of all liability for doing so.
(e) If Lessee breaches this Lease and abandons the Premises
before the end of the Term, or if Lessee's right to possession is
terminated by Lessor because of a breach of the Lease, then in either
such case Lessor may recover from Lessee all damages suffered by Lessor
as the result of Lessee's failure to perform its obligations hereunder,
described in Civil Code Section 1951.2, including, but not restricted
to, the worth at the time of the award (computed in accordance with
paragraph (3) of subdivision (a) of Section l951.2 of the California
Civil Code) of the amount by which the rent then unpaid hereunder for
the balance of the Lease Term exceeds the amount of such rental loss for
the same period which the Lessee proves could be reasonably avoided by
Lessor, and in such case, Lessor, prior to the award, may relet the
Premises for the purpose of mitigating damages suffered by Lessor
because of Lessee's failure to perform its obligations hereunder;
provided, however, that even though Lessee has abandoned the Premises
following such breach, this Lease shall nevertheless continue in full
force and effect for as long as the Lessor does not terminate Lessee's
right of possession, and until such termination, Lessor may enforce all
its rights and remedies under this Lease, including the right to recover
the rent from Lessee as it becomes due hereunder.
INSOLVENCY
OR BANKRUPTCY
9
11
22. Either (a) the appointment of a receiver to take possession
of all of the assets of Lessee, or (b) a general assignment by Lessee
for the benefit of creditors, or (c) any action taken or suffered by
Lessee under any insolvency or bankruptcy act shall constitute a breach
of this Lease by Lessee. Upon the happening of any such event, this
Lease shall terminate immediately upon written notice of termination
from Lessor to Lessee. Lessee shall not be deemed to be in default as a
consequence of the filing of an involuntary bankruptcy petition, the
appointment of a receiver, the attachment of any interest in the Lease
or of Lessee's other assets or the exercise by any third party of any
other remedy with respect to Lessee, Lessee's interest in the Lease, or
Lessee's other assets, unless the petition, receiver, attachment or
other remedy is not discharged within sixty (60) days.
ALTERATIONS
23. Alterations shall not be made to the Premises without the
prior written consent of Lessor which may not be unreasonably withheld
or delayed. Lessee shall provide to Lessor any proposed alterations in
writing and, upon approval by Lessor, said written description of
alterations shall be attached to this Lease as an exhibit. In the event
Lessee makes any alterations to the Premises as provided in this
paragraph, said alterations shall not be commenced until ten (10) days
after Lessor has received notice from Lessee stating the date the
installation of the alterations is to commence so that Lessor can post
and record an appropriate notice of non-responsibility.
Any alterations made shall remain on and be surrendered with the
Premises on expiration or earlier termination of the Term except that
Lessor can elect at the time of approving such alterations to require
Lessee to remove any alterations that Lessee has made to the Premises.
If Lessor so elects, Lessee, at its sole cost and expense, shall restore
the Premises to the condition and state it was in prior to said
alterations. Lessee's movable furniture and trade fixtures shall not
become part of the realty and shall not belong to Lessor in any event.
INDEMNIFICATION
OF LESSOR
24. From and after the Commencement Date, Lessee shall indemnify,
defend, protect and hold harmless Lessor from and against any and all
claims arising from Lessee's use of the Premises or the conduct of its
business or from any activity, work, or thing done, permitted or
suffered by the Lessee in or about the Premises, and shall further
indemnify and hold harmless Lessor against and from any and all claims
arising from any breach of default in the performance of any obligation
on Lessee's part to be performed under the terms of this Lease, or
arising from any act, neglect, fault or omission of the Lessee, or of
its agents or employees, and from and against all costs, attorneys'
fees, expenses and liabilities incurred in, connected with, or about
such claims, actions or proceedings brought as a result, except to the
extent arising out of the negligence or willful misconduct of Lessor or
Lessor's employees or agents or contractors. In case any action or
proceeding be brought against Lessor by reason of such claim, Lessee,
upon notice from Lessor, shall defend the same at Lessee's expense by
counsel reasonably satisfactory to Lessor.
The obligations of Lessee under this section arising by reason of
any occurrence taking place during the term of this Lease shall survive
the expiration on any termination of this Lease.
WAIVER OF CLAIMS
AND LIMITATION
OF LIABILITY
25. (a) Lessee, as a material part of the consideration to be
rendered to Lessor, hereby assumes all risk of damage to the Premises or
injury to persons in or about the Premises and waives all claims against
Lessor for damages to goods, wares and merchandise, in upon or about the
Premises and for injury to Lessee, its agents, employees, invitees, or
third persons on or about the Premises from any cause excepting causes
arising by reason of the intentional acts or negligence of Lessor, its
agents or employees.
10
12
(b) If Lessor is in default of this Lease, and as a consequence,
Lessee recovers a money judgment against Lessor, the judgment shall be
satisfied only out of the proceeds of sale received on execution of the
judgment and levy against the right, title and interest of Lessor in the
Building of which the Demised Premises are a part, and out of rent or
other income from such Building receivable by Lessor or out of the
consideration received by Lessor from the sale or other disposition of
all or any part of Lessor's right, title and interest in the Building.
(c) Lessor shall not be personally liable for any deficiency, and
if Lessor (or a successor Lessor against which action is brought) is a
partnership or Limited Liability Company, the partners or members of
Lessor shall not be sued or named as a party in any suit or action or
service of process be made against any partner or member of Lessor
except as may be necessary to secure jurisdiction of the partnership. No
partner or member of Lessor shall be required to answer or otherwise
plead to any service of process and no judgment will be taken or writ of
execution levied against any partner or member of Lessor.
(d) Nothing contained within this paragraph 25 shall permit
Lessor to make distribution of its rentals or other cash proceeds to its
partners of share holders (if any) at any date after Lessee's judgment
has become final, no appeal being then pending and time for further
appeal having passed unless and until the judgment owed to Lessee shall
have been paid in full, and nothing herein shall prevent Lessee from
taking such actions as may be permitted under law or in equity to
recover any funds so disbursed by Lessor in violation of the provisions
of this section.
WAIVER OF
TERMS
26. The failure of Lessor to object to any breach of any term,
covenant or condition by Lessee shall not be deemed to be a waiver of
such term, covenant or condition. The subsequent acceptance of rent or
other performance hereunder by Lessor shall not be deemed to be a waiver
of any preceding breach by Lessee of any term, covenant or condition of
this Lease, other than the failure of Lessee to pay the particular
rental so accepted, regardless of Landlord's knowledge of such preceding
breach at the time of acceptance of such rent.
HOLDING OVER
27. If Lessee should remain in possession of the Premises after
the expiration of the Lease term and without executing a new lease, then
such holding over shall be construed as a tenancy from month to month,
subject to all the conditions, provisions and obligations of this Lease
insofar as the same are applicable to a month-to-month tenancy, except
that the minimum monthly rent payable by Lessee to Lessor shall be 125%
of the minimum monthly rent during the last year of the Lease Term.
ESTOPPEL
CERTIFICATE
28. (a) Lessee shall, within ten (10) days after written notice
from Lessor, execute, acknowledge and deliver to Lessor a statement in
writing (i) certifying that this Lease is unmodified and in full force
and effect (or, if modified, stating the nature of such modification and
certifying that this Lease, as so modified, is in full force and effect)
and the date to which the rent and other charges are paid in advance, if
any, and (ii) acknowledging that there are not, to Lessee's knowledge,
any uncured defaults on the part of the Lessor hereunder, or specifying
such defaults if any are claimed. Any such statement may be conclusively
relied upon by any prospective purchaser or encumbrancer of the
Premises.
(b) Lessee's failure to deliver such statement within such
time shall be conclusive upon Lessee (i) that this Lease is in full
force and effect, without modification, except as may be represented by
Lessor, (ii) that there are no uncured defaults in Lessor's performance,
and (iii) that not more than one month's rent has been paid in advance
or at Lessor's option be considered by Lessor as a default by Lessee
under this Lease.
(c) If Lessor desires to finance or refinance the Premises,
or any part thereof, Lessee hereby agrees to deliver to any lender
designated by Lessor such financial statements of Lessee as may be
reasonably
11
13
required by such lender. Such statements shall include the past three
(3) years' financial statements of Lessee. All such financial statements
shall be received in confidence and shall be used only for the purposes
herein set forth.
TRANSFER OF
LESSOR'S
INTEREST
29. In the event of a sale or conveyance by Lessor of Lessor's
interest in the Premises, other than a transfer for security purposes
only, Lessor shall be relieved from and after the date specified in any
such notice of transfer of all obligations and liabilities accruing
thereafter on the part of Lessor. The Lessee's right of occupancy under
this Lease shall not be affected by any such sale, and Lessee agrees to
attorn to the purchaser or assignee.
CONDEMNATION
30. If any part of the Premises shall be taken or condemned for a
public or quasi-public use, and a part thereof remains which is
susceptible of occupation hereunder, this Lease shall, as to the part so
taken, terminate as of the date title shall vest in the condemnor, and
the rent payable hereunder shall be adjusted for the remainder of the
Term in proportion to the number of square feet remaining after the
condemnation to the number of square feet in the entire Premises at the
date of condemnation. In any event, Lessor shall also have the option to
terminate this Lease as of the date when title to the part so condemned
vests in the condemnor. If a part or all of the Premises be taken or
condemned, all compensation awarded upon such condemnation or taking
shall go to the Lessor and the Lessee shall have no claim thereto, and
the Lessee hereby irrevocably assigns and transfers to the Lessor any
right to compensation or damages to which the Lessee may be entitled
during the term hereof by reason of the condemnation of all, or part of
the Premises.
Each party waives the provisions of Code of Civil Procedure
Section 1265.130 allowing either party to petition the superior court to
terminate this Lease in the event of a partial taking of the Premises
for public use.
SUBORDINATION
31. This Lease, at Lessor's option, shall be subordinate to any
ground lease, mortgage, deed of trust, or any other hypothecation for
security now or hereafter placed upon the real property of which the
Premises are a part and to any and all advances made on the security
thereof and to all renewals, modifications, consolidations, replacements
and extensions thereof. If any mortgagee, trustee or ground lessor shall
elect to have this Lease prior to the lien of its mortgage, deed of
trust, or ground lease, and shall give written notice thereof to Lessee,
this Lease shall be deemed prior to such mortgage, deed of trust, or
ground lease, whether this Lease is dated prior or subsequent to the
date of said mortgage, deed of trust or ground lease or the date of
recording thereof. Notwithstanding the above, Lessees' Lease shall
remain undisturbed.
SECURITY
32. Lessor shall have no obligation to provide policing or
security to the common areas, Premises or the Building of which the
Premises are a part. Lessor shall not be responsible for loss or damage
to person or property for damages sustained by Lessee, its employees or
business invitees. Lessee shall provide security protection within said
Premises, at Lessee's option and at Lessee's sole expense but not
without first providing written notice to Lessor.
ATTORNEYS'
FEES
33. In the event of any legal action or proceeding between the
parties hereto, reasonable attorneys' fees and expenses in any such
action or proceeding shall be awarded to the prevailing party. Should
Lessor be named as a defendant in any suit brought against Lessee in
connection with or arising out of Lessee's
12
14
occupancy hereunder, Lessee shall pay to Lessor Lessor's costs and
expenses incurred in such suit, including reasonable attorneys' fees.
NOTICES
34. Any notices or demands to be given hereunder shall be given
to Lessor at 650 Fifth Street, Suite 303, San Francisco, CA 94107 and to
Lessee at 331 Jefferson Street, Oakland California 94607. All notices or
demands of any kind required or desired to be given by Lessor to Lessee
hereunder shall be in writing and shall be deemed delivered forty-eight
(48) hours after depositing the notice or demand in the United States
mail, certified or registered, postage prepaid, or in the alternative,
an express mail service which provides overnight delivery and a receipt
of delivery, addressed to the Lessor or Lessee, respectively, at the
addresses set forth in this paragraph.
LIENS
35. Lessee shall keep the Premises and the property in which the
Premises are situated, free from any liens arising out of any work
performed, materials furnished, or obligations incurred by Lessee.
Lessee shall give ten (10) days written notice to Lessor before
commencing any alterations, repairs, or other work, or taking any other
action, which might give rise to any lien against the Premises or
property in which the Premises are situated, so as to give Lessor an
opportunity to post and record an appropriate notice of
non-responsibility.
RECORDATION
36. Lessee shall not record this Lease or short form memorandum
hereof without the prior written consent of Lessor.
RULES AND
REGULATIONS
37. Lessee shall faithfully observe and comply with any Rules and
Regulations that Lessor shall from time to time promulgate. Lessor
reserves the right from time to time to make all reasonable
modifications to said rules. The additions and modifications to those
rules shall be binding upon Lessee upon delivery of a copy of them to
Lessee. Lessor shall not be responsible to Lessee for the nonperformance
of any said rules by any other tenants or occupants.
QUIET
ENJOYMENT
38. Lessor covenants and agrees with Lessee that upon Lessee
paying rent and other monetary sums due under the Lease, performing its
covenants and conditions under the Lease, Lessee shall and may peaceably
and quietly have, hold and enjoy the Premises for the Term, subject,
however, to the terms of the Lease and any of the aforesaid ground
leases, mortgages, or deed of trust described above. Lessor will not be
financially responsible for any damage caused to Premises by other
Building tenants.
PARKING
39. Lessor shall provide Lessee with up to ten tandem parking
spaces on a month to month basis on property leased by Lessor off
premises. The charge per parking space is $90.00 per month. Lessor
reserves the right to increase the parking charge after the first year
to the then current building rate which shall be consistent with parking
rates being charged in downtown Oakland. The parking charge will not
increase more than once during a lease year.
CORPORATE
AUTHORITY AND
FINANCIAL
40. The Corporate Officer executing this Lease acknowledges he
has the authority to bind the Corporation under this Lease.
Lessee agrees to provide Lessor with the current Corporate
Financial Statements and personal financial statements of Lessee upon
request by Lessor.
13
15
GENERAL
PROVISIONS
41. (a) Whenever the singular number is used in this Lease and
when required by the context, the same shall include the plural, and the
masculine gender shall include the feminine and neuter genders, and word
"person" shall include corporation, firm or association. If there be
more than one Lessee, the obligations imposed upon Lessee under this
Lease shall be joint and several.
(b) The headings or titles to paragraphs of this Lease are
not part of this Lease and shall have no effect upon the construction or
interpretation of any part of this Lease.
(c) This instrument contains all of the agreements and
conditions made between the parties of this Lease and may not be
modified orally or in any other manner than by agreement in writing
signed by all parties to this Lease.
(d) Time is of the essence of each term and provision of
this Lease.
(e) Except as otherwise expressly stated, each payment
required to be made by Lessee shall be in addition to and not in
substitution for other payments to be made by Lessee.
(f) The terms and provisions of this Lease shall be binding
upon and inure to the benefit of the heirs, executors, administrators,
successors and permitted assigns of Lessor and Lessee under this Lease.
(g) All covenants and agreements to be performed by Lessee
under any of the terms of this Lease shall be performed by Lessee at
Lessee's sole cost and expense and without any abatement of rent.
(h) The rights, powers, elections and remedies of the Lessor
contained in this Lease shall be construed as cumulative and none of
them is or shall be considered exclusive and none of them is or shall be
considered exclusive of any rights or remedies allowed by law, and the
exercise of one or more rights, powers, elections or remedies shall not
impair Lessor's right to exercise any other.
(i) All sums required to be paid by Tenant under this Lease
shall bear interest from the date due until paid at the greater of ten
percent (10%) or the maximum rate an individual is permitted by law to
charge.
(j) If any term, covenant, condition or provision of this
Lease is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the provisions shall remain in full
force and effect and shall in no way be affected, impaired or
invalidated.
(k) Lessee acknowledges that it has had no contact or
dealings regarding this Lease with any licensed real estate broker or
other party who can claim a right to a commission or fee (other than
Terranomics Development representing Lessor and Cornish and Carey
representing Lessee), and Lessee agrees to indemnify, defend and hold
harmless Lessor from any cost, loss or expense, including attorneys'
fees and court costs, resulting from any claim for a fee or commission
from a broker claiming to represent Lessee other than Cornish and Carey.
(l) As used herein, rent shall mean all payments made
pursuant to this Lease, including, but not limited to, minimum monthly
rent, prepaid rent, security deposit, real property taxes and
assessments, common area charges, operating costs, parking fees,
insurance, utilities and all other charges payable by Lessee to Lessor.
IN WITNESS WHEREOF, the parties set their signatures hereto as of
the date stated hereinbelow.
14
16
LESSOR: LESSEE:
TERRADEV JEFFERSON LLC CHOLESTECH CORPORATION
by TERRANOMICS, its Manager dba WellCheck.com
by /s/ Peter Morse by /s/ Warren E. Pinckert II
------------------------------ -----------------------------
Peter Morse, Vice President
15