California-Santa Clara-2441 Mission College Boulevard Lease - Sobrato Interests and Integrated Information Technology Inc.
1. PARTIES: THIS LEASE, is entered into on this _____ day of June,
1990, between SOBRATO INTERESTS, a California Limited Partnership, and
INTEGRATED INFORMATION TECHNOLOGY, INC., a California Corporation, hereinafter
called respectively Landlord and Tenant.
2. PREMISES: Landlord hereby leases to Tenant, and Tenant hires from
Landlord those certain Premises with the appurtenances, situated in the City of
Santa Clara, County of Santa Clara, State of California, and more particularly
described as follows, to-wit:
A part of that certain real property commonly known and
designated 2441 Mission College Boulevard of 100,272 square
feet ("Building") consisting of a part of the first floor
totaling 42,450 square feet as outlined in red on Exhibit "A";
in a complex comprised of four buildings (including the
Building) totaling 419,357 square feet ("Project").
3. USE: Tenant shall use the Premises only for the following purposes
and shall not change the use of the Premises without the prior written consent
of Landlord: Office, research, development, testing, light manufacturing,
ancillary warehouse, and related legal uses.
4. TERM AND RENTAL: The term shall be for eighty-four (84) months,
commencing, as adjusted pursuant to paragraph 7, on the first day of October,
1990 ("Commencement Date"), and ending as adjusted pursuant to Paragraph 7 on
the thirtieth day of September 1997 at the effective rent of $0.94 per square
foot for a total rent or sum of Three Million Three Hundred Fifty-one Thousand
Eight Hundred Fifty-Two and No/100 Dollars ($3,351,852.00), payable, without
deduction or offset, in monthly installments of:
10/1/90-9/30/91 $16,980.00 per month $203,760.00 $0.40/sq.ft.
10/1/91-9/20/92 $35,233.50 per month $422,802.00 $0.83/sq.ft.
10/1/92-9/30/93 $40,327.50 per month $483,930.00 $0.95/sq.ft.
10/1/93-9/30/94 $42,874.50 per month $514,494.00 $1.01/sq.ft.
10/1/94-9/30/95 $45,421.50 per month $545,059.00 $1.07/sq.ft.
10/1/95-9/30/96 $47,968.40 per month $575,622.00 $1.13/sq.ft.
10/1/96-9/30/97 $50,515.50 per month $606,196.00 $1.19/sq.ft.
due on or before the full day of each calendar month during the term hereof.
Said rental shall be paid in lawful money of the United States of America,
without offset or deduction, and shall be paid to Landlord at such place or
places as may be designated from time to time by Landlord. Rent for any period
less than a calendar month shall be a pro rata portion of the monthly
installment.
Concurrently with Tenant's execution of this Lease, Tenant shall pay to
Landlord the sum of Sixteen Thousand Nine Hundred Eighty and No/100 Dollars
($16,980.00) as prepaid rent for the first month of the term.
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4.(a) Tenant shall be allowed to use the Premises prior to
October 1, 1990, at the rate to cover the utility charges only.
5. SECURITY DEPOSIT: Concurrently with Tenant's execution of this
Lease, Tenant his deposited with Landlord the sum of Thirty-Five Thousand Two
Hundred Thirty-Three and 50/100 Dollars ($35,233.50) as a security deposit. If
Tenant defaults with respect to any provisions of this lease, including but not
limited to the provisions relating to payment of rent or other charges, Landlord
may, to the extent reasonably necessary to remedy Tenant's default, use all or
any part of said deposit for the payment of rent or other charges in default or
the payment of any other payment of any other amount which Landlord may spend or
become obligated to spend by reason of Tenant's default or to compensate
Landlord for any other loss or damage which Landlord may suffer by reason of
Tenant's default. If any portion of said deposit is so used or applied, Tenant
shall, within ten (10) days after written demand therefor, deposit cash with
Landlord in an amount sufficient to restore said deposit to the full amount
hereinabove stated and shall pay to Landlord such other sums as shall be
necessary to reimburse Landlord for any sums paid by Landlord. Said deposit
shall be returned to Tenant within thirty (30) days after the expiration of the
term hereof less any amount deducted in accordance with this paragraph, together
with Landlord's written notice itemizing the amounts and purposes for such
retention. In the event of termination of Landlord's interest in this Lease,
Landlord shall transfer said deposit to Landlord's successor in interest.
In addition to the cash security deposit provided above, Tenant shall
provide Landlord a lease guarantee ("Lease Guarantee"), in the initial amount of
Five Hundred Thousand and No/100 Dollars ($500,000.00). The Lease Guarantee
shall be delivered to Landlord promptly after Lease execution.
Upon the occurrence of any default by Tenant as defined in paragraph 24
of this Lease, Landlord shall be entitled to draw upon the Lease Guarantee to
the extent necessary to cure such default. The Lease Guarantee shall be
irrevocable, and shall be conditioned solely upon Landlord's certifying to the
issuer thereof that a default exists under this Lease. Such Lease Guarantee
shall provide for a schedule of reduction in the following amounts:
10/1/91-9/30/92 $425,000.00
10/1/92-9/30/93 $350,000.00
10/1/93-9/30/94 $275,000.00
10/1/94-9/30/95 $200,000.00
10/1/95-9/30/96 $125,000.00
10/1/96-9/30/97 $ 50,000.00
6. LATE CHARGES: Tenant hereby acknowledges that late payment by Tenant
to Landlord of rent and other sums due hereunder will cause Landlord to incur
costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
administrative, processing, accounting charges, and late charges, which may be
imposed on Landlord by the terms of any contract, revolving credit, mortgage or
trust deed covering the Premises. Accordingly, if any installment of rent or any
other sum due from Tenant shall not be received by Landlord or Landlord's
designee within ten (10) days after such amount shall be due,
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Tenant shall pay to Landlord a late charge equal to five (5%) percent of such
overdue amount which shall be due and payable with the payment then delinquent.
The parties hereby agree that such late charge represents a fair and reasonable
estimate of the costs Landlord will incur by reason of late payment by Tenant.
Acceptance of such late charge by Landlord shall in no event constitute a waiver
of Tenant's default with respect to such overdue amount, nor prevent Landlord
from exercising any of the other rights and remedies granted hereunder. In the
event that a late charge is payable hereunder, whether or not collected, for
three (3) consecutive installments of rent, then rent shall automatically become
due and payable quarterly in advance, rather than monthly, notwithstanding any
provision of this Lease to the contrary.
IT IS FURTHER MUTUALLY AGREED BETWEEN THE PARTIES AS FOLLOWS:
7. CONSTRUCTION AND POSSESSION: The Tenant Improvements shall be
constructed by independent contractors to be employed by and under the
supervision of Landlord, as general contractor, in accordance with plans
prepared by Dennis Kobza and Associates, to be attached as Exhibit "B" ("Working
Drawings"). Landlord shall construct the Tenant Improvements in accordance with
all existing applicable municipal, local, state and federal laws, statutes,
rules, regulations and ordinances.
Landlord shall be responsible for and shall pay the cost of the Tenant
Improvements up to the amount of Four Hundred Eighty-Eight Thousand Four Hundred
Five and No/100 Dollars ($488,405.00) ("Tenant Improvement Allowance"). In the
event the cost of Tenant Improvements is less than the Tenant Improvement
Allowance, the monthly rental under the f case shall be reduced at the rate of
Fifteen Dollars ($15.00) per month for each One Thousand Dollars ($1,000.00) of
the Tenant Improvement Allowance not used. The cost of the Tenant Improvements
including fit-up of special areas shall include a fee of eight and one half
percent (8.5%) to cover all Landlord's Costs and Expenses including but riot
limited to: a field superintendent temporary on-site facilities; home office
administration, supervision, and coordination; financing fees, and construction
interest Landlord hereby guarantees that, under no circumstance, will the
expense for Tenant Improvements exceed the said allowance without Tenant's prior
approval Tenant shall have the right to approve the budget of the Tenant
Improvements prior to the Landlord's contracting for the improvements. If the
cost of the Tenant improvements exceed the Tenant Improvement Allowance by
virtue of Tenant's written approval, Tenant shall pay for such excess costs in
cash within thirty (30) days after Landlord has provided Tenant with evidence
that Landlord's progress payments to subcontractors has exceeded said Tenant
Improvement budget. All costs for Tenant Improvements shall be fully documented
to and verified by Tenant. Anything to the contrary in the foregoing
notwithstanding, Landlord shall provide Tenant with a list of contractors to
whom Landlord proposes to let the contract for the Tenant Improvements to be
constructed by Landlord hereunder. Tenant shall promptly notify Landlord of any
reasonable objections to the use of any such contractor and shall also provide
Landlord with the name of any contractor Tenant desires to have an opportunity
to bid on the contract to construct the Tenant Improvements. Landlord will
consult with Tenant in the final selection of a contractor and the letting of
any contract to construct the Tenant Improvements. Tenant shall not unreasonably
object to the selection of a contractor chosen by Landlord or the terms of the
contract for the construction of the Tenant Improvements agreed to by Landlord.
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Tenant, at Tenants expense, to supply Landlord with preliminary
improvement information ("Preliminary Information") including one line drawings
of Tenants wall layout electrical and air conditioning requirements by July 7,
1990. Based on this information, Landlord shall prepare the final working
drawings ("Working Drawings") which shall be approved by both Landlord and
Tenant In the event (i) Tenant fails to provide the Preliminary Information by
July 7, 1990 or, (ii) Tenant makes any changes to the Working Drawings which
cause Landlord's construction schedule to be delayed, the Commencement Date
shall occur one (1) day in advance of Substantial Completion as defined below
for each day of delay. If the delay is not caused by Tenant and is to be more
than three (3) months after the originally scheduled date, Landlord shall notify
the Tenant not later than the original schedule date and the Tenant shall have
the right to terminate this Lease at Tenants option. In all events, Landlord
shall provide Tenant will a minimum of two (2) weeks prior written notice of the
Commencement Date of the Lease.
If Landlord, for any reason whatsoever, cannot deliver possession of
the said Premises to Tenant at the commencement of the said term, as
hereinbefore specified,; and if Tenant has not terminated this Lease, Tenant
shall be entitled to one(1) free day of rent for every day of delay. In that
event the Commencement Date and termination date of the Lease and all other
dates affected thereby in that event the Commencement Date and termination date
of the Lease and all other dates affected thereby in that event the Commencement
Date and termination date of the Lease and all other dates affected thereby
shall be revised to conform to the date of Landlord's delivery of possession.
The term of the Lease shall not commence until substantial completion of the
Premises occurs. "Substantial Completion" shall mean that: (i) all necessary
governmental approvals, permits, consents, and certificates have been obtained
by or for Landlord for the lawful construction by Landlord, and occupancy by
Tenant, or said Premises, excluding work attributable to any special fit-up
requested or required by Tenant, (ii) all of the Premises interior fully meet
all of the Working Drawings, excluding Tenant's special fit-up, (iii) all of the
Premises exterior substantially meets the applicable Working Drawings, including
paved parking areas, and (iv) said interior is in a "broom clean" finished
condition. If necessary, Landlord reserves the right to post a bond for the
uncompleted portion of the landscaping.
8. ACCEPTANCE OF PREMISES AND COVENANTS TO SURRENDER: By
entry hereunder, Tenant accepts the Premises as being in good and sanitary
order, condition and repair and accepts the Building and the other improvements
in their present condition, except for a"punch list" delivered by Tenant to
Landlord within five (5) business days after Tenant's entry onto the Premises.
The Tenant agrees on the last day of the term hereof, or on the sooner
termination of this Lease, to surrender the Premises unto Landlord in good
condition and repair, reasonable wear and tear excepted. "Good condition" shall
mean that the interior walls of all office and warehouse areas, the floors of
all office and warehouse areas, all suspended ceilings and any carpeting will be
cleaned to the same condition as existed at the commencement of the Lease,
normal wear and tear excepted. Tenant shall ascertain from Landlord within
thirty (30) days before the end of the term of this Lease whether Landlord
desires to have the Premises or any part or parts thereof restored to their
condition as of the commencement of this Lease or to cause Tenant to surrender
all alterations, additions, and improvements in place to Landlord. If Landlord
shall so desire, then Tenant shall remove such alterations, additions, and
improvements as Landlord may require and shall repair and
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restore said Premises or such part or parts thereof before the termination of
this Lease at Tenants sole cost and expense. Tenant on or before the end of the
term or sooner termination of this Lease, shall remove all his or its personal
property and trade fixtures from the Premises, and all property not so removed
shall be deemed to be abandoned by Tenant. If the Premises are not surrendered
at the end of the term or sooner termination of this Lease, Tenant shall
indemnify Landlord against loss or liability resulting from delay by Tenant in
so surrendering the Premises including, without limitation, any claims made by
any succeeding tenant founded on such delay.
9. USES PROHIBITED: Tenant shall not commit or suffer to be committed
any waste upon the said Premises, or any nuisance, or other act or thing which
may disturb the quiet enjoyment of any other tenant in or around the Buildings
in which the Premises may be located or allow any sale by auction upon the
Premises, or allow the Premises to be used for any unlawful or objectionable
purpose, or place any loads upon the floor, walls, or ceiling which endanger the
structure, or use any machinery or apparatus which will in any abnormal manner
vibrate or shake the Premises or the Building of which it is a part, or place
any harmful liquids, waste materials, or hazardous materials in the drainage
system of, or upon or in the soils surrounding the Building. No materials,
supplies, equipment, finished products or semi-finished products, raw materials
or articles of any nature or any waste materials, refuse, scrap or debris shall
be stored upon or permitted to remain on any portion of the Premises outside of
the Building proper without Landlord's prior approval, which approval may be
withheld in its sole discretion.
10. ALTERATIONS AND ADDITIONS: Tenant shall not make, or suffer to be
made, any major alteration or addition to the said Premises, or any part
thereof, without the written consent of Landlord first had and obtained, which
consent will not be unreasonably withheld or delayed, based upon Tenants
delivering to Landlord the proposed architectural and structural plans for all
such alterations; any addition or alteration to the said Premises except movable
furniture and trade fixtures, shall become at once a part of the realty and
belong to Landlord unless otherwise agreed between Landlord and Tenant.
Alterations and additions which are not to be deemed as trade fixtures shall
include heating, lighting, electrical systems, air conditioning, partitioning,
carpeting, or any other installation which has become an integral part of the
Premises. After having obtained Landlord's consent, Tenant agrees that it will
not proceed to make such alterations or additions, until three (3) days from the
receipt of such consent, in order that Landlord may post appropriate notices to
avoid any liability to contractors or material suppliers for payment for
Tenant's improvements. Tenant will at all times permit such notices to be posted
and to remain posted until the completion of work. Tenant acknowledges
Landlord's right to and hereby consents to construction of additional Buildings
and improvements in the Building, on the Land where the Building is situated, in
the Project and on adjacent land owned by Landlord subject; always, to
recalculation of Tenants Allocable share of Costs as set forth below. Anything
to the contrary in the foregoing notwithstanding, Tenant shall have the right to
make improvements or alterations to the Premises upon notice to Landlord if such
alterations or improvements do not cause any major alteration to the appearance
of the Building or any material alteration in the electrical, heating, air
conditioning, ventilation or plumbing systems of the Building and, in any case,
cost less than Twenty-Five Thousand and No/100 Dollars ($25,000.00).
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11. LANDLORD'S AND TENANT'S OBLIGATIONS REGARDING COMMON AREA COSTS:
Tenant agrees to reimburse Landlord for the reasonable expenses resulting from
Landlords payment of Common Area Costs as defined in paragraph 1.1(a) incurred
by Landlord because the cost is not directly allocable to or payable by a single
tenant in the Building or the Project. Tenant agrees to pay Tenants Allocable
Share as defined in paragraph 1.1.(b) of the Common Area Costs, as additional
rental, within thirty (30) days of written invoice from Landlord.
11.(A) COMMON AREA COSTS: For purposes of calculating Tenants
Allocable Share of Building and of Project Costs, the term "Common Area Costs"
shall mean all costs and expenses of the nature hereinafter described which am
incurred in connection with ownership and operation of the Building or the
Project in which the Premises are located, as the case may be not directly
allocable to or payable by a single tenant in the Building or the Project,
together with such additional facilities as may be determined by Landlord to be
reasonably desirable or necessary to the ownership and operation of the Building
and/or Project. Common Area Costs shall not include any capital expenditures,
except to the extent such expenditures benefit the occupants of the Project,
Building, and Tenant during the term of the Lease and are amortized over the
useful life of the property acquired or constructed as a result of such
expenditure. All costs and expenses shall be determined in accordance with
generally accepted accounting principles which shall be consistently applied
(with accruals appropriate to Landlord's business), including but not limited
to, the following:
(i) Common area utilities, including water and power,
heating, lighting, air-conditioning, ventilating and Building
utilities to the extent not separately metered and are not in
an area separately rented out and are the located only in a
common area;
(ii) All common area maintenance and service
agreements for the Building or the Project and the equipment
therein including, without limitation, common area janitorial
services, alarm and security services, exterior window
cleaning, and maintenance of the sidewalks, landscaping,
waterscape, roof membrane, parking areas, driveways, service
areas, mechanical rooms, elevators, and the building exterior,
(iii) All insurance premiums and costs, including
without limitation, the premiums and cost of fire, casualty
and liability coverage and rental abatement and earthquake (if
commercially available) insurance applicable to the Building
or Project;
(iv) Repairs, replacements and general maintenance
(excluding repairs and general maintenance paid by proceeds of
insurance or by Tenant or other third parties, and repairs or
alterations attributable solely to tenants of the Building or
Project other than Tenant). This also includes the repairs and
maintenance for the area which is common to the Premises and
the floor above the Premises such as roof membrane and
exterior walls, sidewalks, etc.;
(v) All real estate taxes, special assessment service
payments in lieu of taxes, excises, transit charges, housing
fund assessment, levies, fees or charges and including any
substitutes or additions thereto which may occur during the
Term (and
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Renewal Terms, if any) of this lease which are assessed, or
imposed by any public authority upon the Building or Project,
the act of entering this Lease, the occupancy by Tenant, the
rent provided for in this Term and including real estate tax
increases due to a sale or transfer of the Building or the
Project, in which the Premises are located, as such taxes are
levied or appear on the City and County tax bills and
assessment rolls. Nothing in the foregoing shall be construed
to require Tenant to pay any taxes or other fees of the sort
usually denominated as general income taxes by any federal,
state, county or city governmental unit.
(vi) At a sum equal to eight and one-half percent
(8.5%) of all the above operating costs to reimburse Landlord
for its supervisory, managerial, administration and collection
services therewith.
This shall be a Net Lease and the Rental shall be paid to Landlord
absolutely net of all costs and expenses. The provision for payment of Common
Area Costs by mews of periodic payment of Tenants Allocable Share of Building
and/or Project Costs are intended to pass on to Tenant and reimburse Landlord
for all costs of operating and managing the Building and/or Project.
11.(B) TENANT'S ALLOCABLE SHARE: For purposes of prorating
Common Area Costs which Tenant shall pay, Tenant's Allocable Share of Building
Costs is computed by multiplying the total Common Area Costs for services shared
by the Building by a fraction, the numerator of which is the rentable square
footage of the Building (excluding common areas). Tenant's Allocable Share of
Project Costs shall be computed on a shared service by service basis, by
multiplying the total Common Area Costs for services shared by the Building and
one or more buildings in the Project by a fraction, the numerator of which is
the rentable square footage of the Buildings in the Project which share the
services. It is understood and agreed by Landlord and Tenant that Tenant's
Allocable Share of Building Costs is 42.33% and of Project Costs is 10.12%. For
all tax-related expenses, tenant's allocable share shall be 17.19% of the Parcel
cost.
It is understood and agreed that Tenant's obligation to share in Common
Area Costs shall be adjusted to reflect the commencement and termination dates
of the Lease Term and are subject to recalculation in the event of expansion of
the Building or Project.
12. MAINTENANCE OF PREMISES: Except as provided in paragraph 11 Tenant
shall at its sole cost, keep and maintain, repair and replace, said Premises and
appurtenances and every part hereof. including but not limited to, exterior
walls, roof, glazing, sidewalks, parking plumbing, electrical and HVAC systems
excluding those areas that have been designated as Common Areas in Paragraph
11.(a); and all the Tenant Interior Improvements in good and sanitary order,
condition, and repair, ordinary wear and tear excepted. Tenant shall provide
Landlord with a copy of a service contract between Tenant and a licensed
air-conditioning and heating contractor which contract shall provide for
maintenance of all air conditioning and heating equipment with reasonable
routine intervals at the Premises. Tenant shall pay the cost of all
air-conditioning and heating equipment repairs or replacements which are either
excluded from such service contract or any existing equipment warranties. Tenant
shall be responsible for the preventive maintenance of the
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membrane of the roof, which responsibility shall be deemed properly discharged
if (i) Tenant contracts with a licensed roof contractor who is reasonably
satisfactory to both Tenant and Landlord, at Tenant's sole cost, to inspect the
roof membrane at least every six months, with the first inspection due the sixth
(6th) month after the Commencement Date, and (ii) Tenant performs, at Tenant's
sole cost, all preventive maintenance recommendations made by such contractor
within a reasonable time after such recommendations are made. Such preventive
maintenance might include acts such as clearing storm gutters and drains,
removing debris from the roof membrane, trimming trees overhanging the roof
membrane, applying coating materials to seal roof penetrations, repairing
blisters and other routine measures. Tenant shall provide to Landlord a copy of
such preventive maintenance contract and paid invoices for the recommended work.
All vinyl wall surfaces and floor tile are to be maintained in an as good a
condition as when Tenant took possession free of holes, gouges, or defacements.
Tenant agrees to limit attachments to vinyl wall surfaces exclusively to
V-joints. Landlord shall, at Landlords cost and expense, maintain and repair the
exterior walls of the Building, the roof structure of the building, the
structural components of the Building, except to the extent such repair and
maintenance is the responsibility of Tenant under this Lease or some other
provision of this Lease may excuse Landlord's performance form such duties on
account of casualty or similar cause, and the Common Areas of the complex of
which the Building is a part.
13. HAZARD INSURANCE: Tenant shall not use, or permit said Premises, or
any part thereof, to be used for any purpose other than that for which the said
Premises are hereby leased; and no use shall be made or permitted to be made of
the said Premises, nor acts done, which will cause an increase in premiums or a
cancellation of any insurance policy covering said Building, or any part
thereof, nor shall Tenant sell or permit to be kept, used or sold, in or about
said Premises, any article which may be prohibited by the standard form of fire
insurance policies. Tenant shall, at its sole cost and expense, comply with any
and all requirements, pertaining to said Premises, of any insurance organization
or company, necessary for the maintenance of reasonable fire and public
liability insurance, covering said Building and appurtenances. The Landlord
agrees to purchase and keep in force fire, earthquake (if commercially available
and/or required by Landlord's Lender), and extended coverage insurance covering
the Premises in amounts not to exceed the actual insurable value of the
Building, including the Premises, as determined by Landlord's insurance
company's appraisers.
In addition, Tenant agrees to insure its personal property, additions,
alterations, and improvements for their full replacement value (without
depreciation) and to obtain workers compensation and public liability and
property damage insurance for occurrences within the Premises of $5,000,000.00
combined single limit for bodily injury and property damage. Tenant shall name
Landlord as an additional insured, shall deliver a copy of the policies and
renewal certificates to Landlord. All such policies shall provide for thirty
(30) days' prior written notice to Landlord of any cancellation or termination.
Notwithstanding the above, Landlord retains the right to have Tenant provide
other forms of insurance which may be reasonably required to cover future risks
customarily insured against by reasonably prudent businesses in Tenant's
industry located in the Santa Clara-San Jose area.
Landlord and Tenant hereby waive any rights each may have against the
other on account of any loss or damage occasioned to the Landlord or the Tenant
as the case may be, or to the Premises
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or its contents, and which my arise from any risk covered by their respective
insurance policies, as set forth above. The parties shall obtain from their
respective insurance companies a waiver of any right of subrogation which said
insurance company may have against the Landlord or the Tenant, as the case may
be.
14. TAXES: Tenant shall be liable for all taxes levied against personal
property and/or business fixtures, and agrees to pay, as additional rental,
all real estate taxes and special assessment installments levied on the
Premises, upon the occupancy of the Premises and including any substitute or
additional charges which may be imposed during, or applicable to the Lease term
including real estate tax increases due to a sale or other transfer of the
Premises, as they appear on the City and County tax bills during the Lease term
and as they become due. It is understood and agreed that Tenant's obligation
under this paragraph will be prorated to reflect the commencement and
termination dates of this Lease. If Tenant's Allocable Share of Taxes (based on
square footage) is not consistent with the method used by the (county Tax
Assessor, Landlord shall allocate based on the County's formula In any time
during the term of this Lease a tax, excise on rents, business license tax, or
any other tax, however described, is levied or assessed against Landlord, as a
substitute or addition in whole or in part for taxes assessed or imposed on land
or Buildings, Tenant shall pay and discharge his program share of such or excise
on rents or other tax before it becomes delinquent, except that this provision
is not intended to cover net income taxes, inheritance, gift or estate tax
imposed upon the Landlord.
15. UTILITIES: Except as provided in paragraph 11, Tenant shall pay
directly to the providing utility all water, gas, heat, light, power, telephone
and other utilities supplied to the Premises.
16. WAIVER OF LIABILITY: Failure by Landlord to perform any defined
services, or any cessation thereof, when such failure is caused by accident,
breakage, repairs, strikes, lockout or other labor disturbances or labor
disputes of any character, or by any other cause, similar or dissimilar, beyond
the reasonable control of Landlord, shall not render Landlord liable in any
respect for damages to either person or property, nor be construed as an
eviction of Tenant, nor relieve Tenant from fulfillment of any covenant or
agreement hereof. Should any of the equipment or machinery utilized in supplying
the services listed herein break down, or for any cause cease to function
property, upon receipt of written notice from Tenant of any deficiency or
failure of any defined Services, Landlord shall use reasonable diligence to
repair the same promptly, but Tenant shall have no right to terminate this
Lease, and shall have no claim for rebate of rent or damages, on account of any
interruptions in service occasioned thereby or resulting therefrom. Tenant
waives the provisions of California Civil Code Sections 1941 and 1942 concerning
the Landlord's obligation of tenantabilty and Tenant's right to make repairs and
deduct the cost of such repairs from the rent. Landlord shall not be liable for
a loss of or injury to property, however occurring, through or in connection
with or incidental to furnishing or its failure to furnish any of the foregoing
except if such loss is due to Landlord's own intentional acts or omissions.
17. ABANDONMENT: Tenant shall not vacate or abandon the Premises at any
time during the term without Landlords approval; and if Tenant shall abandon,
vacate or surrender said
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Premises or be dispossessed by process of law, or otherwise, any personal
property belonging to Tenant and left on the Premises shall be deemed to be
abandoned at the option of Landlord, except such property as may be mortgaged to
Landlord.
18. FREE FROM LIENS: Tenant shall keep the Premises and the Building in
which the Premises are situated, free from any liens arising out of any work
performed, materials furnished, or obligations incurred by Tenant.
19. COMPLIANCE WITH GOVERNMENTAL REGULATIONS: Tenant shall, at its sole
cost and expense, comply with all of the requirements of all Municipal, State
and Federal authorities now in force, or which may hereafter be in force,
pertaining to the said Premises, and shall faithfully observe in the use of the
Promises all Municipal ordinances and State and Federal statutes now in force or
which may hereafter be in force. The judgement of any court of competent
jurisdiction, or the admission of Tenant in any action or proceeding against
Tenant, whether Landlord be a party thereto or not, that Tenant has violated any
such ordinance or statute in the use of the Premises, shall be conclusive of
that fact as between Landlord and Tenant.
20. TOXIC WASTE AND ENVIRONMENTAL DAMAGE: Without the prior written
consent of Landlord, Tenant shall not bring, allow, use or permit upon the
Premises, or generate or create at or emit or dispose from the Premises any
chemicals, toxic or hazardous gaseous, liquid or solid or waste, including
without limitation, material or substance having characteristics of
ignitability, corrosivity, reactivity, or extraction procedure toxicity or
substances or materials which are listed on any of the Environmental Protection
Agency's lists of hazardous wastes or which are identified in Sections 66680
through 66685 of Title 22 of the California Administrative Code as the same may
be amended from time to time. Tenant shall comply, at its sole cost, with all
laws pertaining to, and shall indemnify and hold Landlord harmless from any
claims, liabilities, costs or expenses incurred or suffered by Landlord arising
from such bringing, allowing, using, permitting, generating, creating, or
emitting or disposing of any such material & Tenant's indemnification and hold
harmless obligations include, without limitation, (i) claims, liability, costs
or expenses resulting from or based upon administrative, judicial (civil or
criminal) or other action, legal or equitable, brought by any private or public
person under common law or under the Comprehensive Environmental Response,
Compensation and Liability, Act of 1980 ("RCRA") or any other Federal, State,
County or Municipal law, ordinance or regulation, (ii) claims, liabilities,
costs or expenses pertaining to the cleanup or containment of wastes, the
identification of the pollutants in the waste, the identification of scope of
any environmental contamination, the removal of pollutants from soils, riverbeds
or aquifers, the provision of an alternative public drinking water source, or
the long term monitoring of ground water and surface waters, and (iii) all costs
of defending such claims. Landlord shall, however, be responsible for damages
directly caused by its own intentional acts and omissions and all costs and
expenses, including reasonable attorney's fees, incurred in defending claims
based upon them. In order to obtain consent, Tenant shall deliver to Landlord
its written proposal describing the toxic material to be brought onto the
Premises, measures to be taken for storage and disposal thereof, safety measures
to be employed to prevent pollution of the air, grand, surface and ground water.
Landlord's approval may be withheld in its reasonable judgement. Tenant further
agrees to properly close the facility with regard to hazardous materials and
obtain a Closure
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Certificate from the local administering agency. Landlord represents and
warrants that it knows of no claim, and knows of no basis of any claim by any
governmental agency or other person that the Premises, the Building or the land
under them are put of any toxic waste site, nuisance or are otherwise
environmentally harmful. Landlord represents and warrants that it has taken no
action of its own and knows of no action or omission of anyone else or of any
condition of the, Premises, the Building, or the land and complex of which the
Premises and the Building are a part, that could lead to such a claim in the
future.
21. INDEMNITY: As a material part of the consideration to be rendered
to Landlord, Tenant hereby waives all claims against Landlord for damages to
goods, wares and merchandise, and all other personal property in, upon or about
said Premises and for injuries to persons in or about said Premises, from any
cause arising at any time, and Tenant will hold Landlord exempt and harmless
from any damage or injury to any person, or to the goods, ware and merchandise
and all other personal property of any person, arising form the use of the
Premises by Tenant, or from the failure of Tenant to keep the Premises in good
condition and repair, as herein provided. Further, in the event Landlord is made
party to any litigation due to the acts or omission of Tenant, Tenant will
indemnify and hold Landlord harmless from any such claim or liability including
Landlord's costs and expenses and reasonable attorney's fees incurred in
defending such claims.
22. ADVERTISEMENTS AND SIGNS: Tenant will not place or permit to be
placed, in, upon or about the said Premises any unusual or extraordinary sips,
or any sips except temporary signs or small signs not approved by the city or
other governing authority. The Tenant will not place, or permit to be placed.
upon the Premises, any signs, advertisements or notices without the written
consent of the Landlord as to type, size, design, lettering, coloring and
location, and such consent will not be unreasonably withheld. Landlord grants
the right to Tenant, subject to approval by the City of Santa Clara to install
an electrically lighted sip on the panel at the southwest corner of the Building
facing Mission College Boulevard. Any sign so placed on the Premises shall be so
placed upon the understanding and agreement that Tenant will remove same at the
termination of the tenancy herein created and repair any damage or injury to the
Premises caused thereby, and if not so removed by Tenant then Landlord may have
same so removed at Tenant's expense.
23. ATTORNEY'S FEES: In case suit should be brought for the possession
of the Premises, for the recovery of any sum due hereunder, or because of the
breach of any other covenant herein, the losing party shall pay to the
prevailing party a reasonable attorney's fee as part of its costs which shall be
deemed to have accrued on the commencement of such action and shall be
enforceable whether or not such action is prosecuted to judgement
24. TENANT'S DEFAULT: The occurrence of any of the following shall
constitute a material default and breach of this Lease by Tenant: a) Any failure
by Tenant to pay the rental or to make any other payment request to be made by
Tenant hereunder, where such failure continues for ten (10) days after written
notice thereof by Landlord to Tenant; b) The abandonment or vacation of the
Premises by Tenant without Landlord's approval; c) A failure by Tenant to
observe and perform any other provision of this Lease to be observed or
performed by Tenant, where such failure continues for thirty (30) days after
written notice thereof by Landlord to Tenant; provided, however,
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that if the nature of such default is such that the same cannot reasonably be
cured within such thirty (30) day period Tenant shall not be deemed to be in
default if Tenant shall within such period commence such cure and thereafter
diligently prosecute the same to completion; d) The making by Tenant of any
general assignment for the benefit of creditors; the filing by or against Tenant
of a petition to have Tenant adjudged a bankrupt or of a petition for
reorganization or arrangement under any law relating to bankruptcy (unless, in
the case of a petition for reorganization or arrangement under any law relating
to bankruptcy (unless, in the case of a petition filed against Tenant, the same
is dismissed after the filing); the appointment of a trustee or receiver to take
possession of substantially all of Tenant's assets located at the Premises or of
Tenant's interest in this Lease, where possession is not restored to Tenant
within sixty (60) days; or the attachment execution or other judicial seizure of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where such seizure is not discharged within sixty (60)
days. The notice requirements set forth herein are in lieu of and not in
addition to the notices required by California Code of Civil Procedure Section
1161.
24.(a) REMEDIES: In the event of any such default by Tenant
then in addition to any other remedies available to Landlord at law or in
equity, Landlord shall have the immediate option to terminate this Lease and all
rights of Tenant hereunder by giving written notice of such intention to
terminate. In the event that Landlord shall elect to so terminate this Lease
then Landlord may recover from Tenant: a) the worth at the time of award of any
unpaid rent which had been earned at the time of such termination; plus b) the
worth at the time of award of the amount by which the unpaid rent would have
been earned after termination until the time of award exceeds the amount of such
rental loss Tenant proves could have been reasonably avoided; plus c) the worth
at the time of award of the amount by which the unpaid rent for the balance of
the term after the time of award exceeds the amount of such rental loss that
Tenant proves could be reasonably avoided; plus d) any other amount necessary to
compensate Landlord for all the detriment proximately caused by Tenant's failure
to perform his obligation sunder this Lease or which In the ordinary course of
things would be likely to result therefrom, and e) at Landlord's election, such
other amounts in addition to or in lieu of the foregoing as may be permitted
from time to time by applicable California law. The term "rent", as used herein,
shall be deemed to be and to mean the minimum monthly installments of rent and
all other sums required to be paid by Tenant pursuant to the terms of this
Lease, all other such sums being deemed to be additional rental due hereunder.
As used in (a) and (b) above, the "worth at the time of award" is computed by
allowing interest at the rate of the discount rate of the Federal Reserve Bank
of San Francisco plus five (5%) percent per annum. As used in (c) above, the
"worth at the time of award" is computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco at the time of award
plus one (1%) percent.
24.(b) RIGHT TO RE-ENTER: In the vent of any such default by
Tenant, Landlord shall also have the right, with or without terminating this
Lease, to re-enter the Premises and remove all persons and property from the
Premises; such property may be removed and stored in a public warehouse or
elsewhere at the cost of and for the account of Tenant.
24.(c) ABANDONMENT: In the event of the vacation or
abandonment of the Premises by Tenant or in the event that Landlord shall elect
to re-enter as provided in paragraph 24.(b) above or shall take possession of
the Premises pursuant to legal proceeding or pursuant to any notice
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provided by law, then if Landlord does not elect to terminate this Lease as
provided in paragraph 24.(a) above, then the provisions of California Civil Code
Section 1951.4, as amended from time to time, shall apply and Landlord may from
time to time, without terminating this Lease, either recover all rental as it
becomes due or relet the Premises or any part thereof for such term or terms and
at such rental or rentals and upon such other terms and conditions as Landlord
in its sole discretion may deem advisable with the right to make alterations and
repairs to the Premises. In the event that Landlord shall elect to so relet,
then rentals received by Landlord form such reletting shall be applied: first,
to the payment of any indebtedness other than rent due hereunder from Tenant to
Landlord; second, to the payment of any cost of such reletting; third, to the
payment of the cost of any alterations and repairs to the Premises; fourth, to
the payment of rent due and unpaid hereunder; and the residue, if any, shall be
held by Landlord and applied in payment of future rent as the same may become
due and payable hereunder. Should that portion of such rentals received from
such reletting during any month, which is applied by the payment of rent
hereunder, be less than the rent payable during that month by Tenant hereunder,
then Tenant shall pay such deficiency to Landlord immediately upon demand
therefor by Landlord. Such deficiency shall be calculated and paid monthly.
Tenant shall also pay to Landlord, as soon as ascertained, any costs and
expenses incurred by Landlord in such reletting or in making such alterations
and repairs not covered by the rentals received from such reletting.
24(d) NO TERMINATION: No re-entry or taking possession of the
Premises by Landlord pursuant to 24.(b) or 24.(c) of this Article 24 shall be
construed as an election to terminate this Lease unless a written notice of such
intention be given to Tenant or unless the termination thereof be decreed by a
court of competent jurisdiction. Notwithstanding any reletting without
termination by Landlord because of any default by Tenant, Landlord may at any
time after such reletting elect to terminate this Lease for any such default.
25. SURRENDER OF LEASE: The voluntary or other surrender of this Lease
by Tenant, or a mutual cancellation thereof, shall not automatically effect a
merger of the Lease with Landlord's ownership of the Building and Premises.
Instead, at the option of Landlord, Tenant's surrender may terminate all or any
existing sublease or subtenancies, or may operate as an assignment to Landlord
of any or all such subleases or subtenancies, thereby creating a direct
Landlord-Tenant relationship between Landlord and any subtenants.
26. HABITUAL DEFAULT: Notwithstanding anything to the contrary
contained in paragraph 24, 24 (a) (b) (c) and (d), the parties hereto agree that
if the Tenant shall have defaulted in the performance of any (but not
necessarily the same) material term or condition of this Lease for three or more
times during any twelve month period during the term hereof, then such conduct
shall at the election of the Landlord, represent a separate event of default
which cannot be cured by the Tenant. Tenant acknowledges that the purpose of
this provision is to prevent repetitive defaults by the Tenant under the Lease,
which work a hardship upon the Landlord, and deprive the Landlord of the timely
performance by the Tenant hereunder.
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27. LANDLORD'S DEFAULT: In the event of Landlords failure to perform
any of its covenants or agreements under this Term, Tenant shall give Landlord
written notice of such failure and shall give Landlord the reasonable
opportunity not more than thirty (30) days to cure such failure prior to any
claim for breech or for damages resulting from such failure Tenant shall also
have the right to deduct the cost to cure from the Rent in the event Landlord
has not cured its default within the time period provided above.
28. NOTICES: All notices required to be given under this Lease shall be
sent by U.S. mail return receipt requested, or by personal delivery addressed to
the party to be notified at the address for such party specified in paragraph 1
of this Lease, or to such other place as the party to be notified may from time
to time designate by at least fifteen (15) days notice to the notifying party.
29. ENTRY BY LANDLORD: Tenant shall permit Landlord and his agents to
enter into and upon said Premises at all reasonable times subject to the
permission and any security regulations of Tenant for the purpose of inspecting
the same or for the purpose of maintaining the Premises or the Building in which
said Premises are situated, or for the purpose of making repairs, alterations or
additions to any other portion of said Building or for the purpose of renting
additional buildings) and improvements in the Building, on the land where the
Building is situated, in the Project, or on adjacent land owned by Landlord,
including the erection and maintenance of such scaffolding, canopies, fences and
props as may be required and Tenant shall be entitled to a reasonable Rent
abatement when said interruption occurs; and Tenant shall permit Landlord and
his agents, at any time within ninety (90) days prior to the expiration of this
Lease, to place upon said Premises any "For Sale" or "to lease" signs and
exhibit the Premises to prospective tenants at reasonable hours.
30. DESTRUCTION OF PREMISES: In the event of a partial destruction of
the Premises by an insured casualty during the said term from any cause,
Landlord shall forthwith repair the same, provided such repairs can be made
within one hundred eighty (180) days, including receipt of all necessary
governmental approvals, under the laws and regulations of State, Federal, County
or Municipal authorities, but such partial destruction shall in no way annul or
void this Lease, except that Tenant shall be entitled to a proportionate
reduction of rent while such repairs are being made, such proportionate
reduction to be based upon the extent to which the making of such repairs shall
interfere with the business carried on by Tenant in the said Premises in the
mmnable judgement of Landlord. If such repairs cannot be made in one hundred
eighty (180) days, Tenant, or Landlord may, at their option, terminate this
Lease. For purposes of this paragraph 'partial destruction" shall mean
destruction to the extent of one-third (1/3) of the Replacement Cost of the
Premises including the Replacement Cost of Tenant's Interior Improvements paid
for by Landlord, or less. In the event the Premises are more than partially
destroyed, Landlord may elect to terminate this Lease or may proceed with
repairs, this Lease continuing in full force and the rent to be proportionately
reduced as aforesaid provided, however, that if such repairs are to take more
than one-hundred eighty (180) days, Tenant may elect to terminate the Lease. In
respect to any partial destruction which Landlord is obligated to repair or may
elect to repair under the terms of this paragraph, the provision of Section
1932, Subdivision 2, and of Section 1933, Subdivision 4, of the Civil Code of
the State of California are waived by Tenant. When a partial destruction of the
Premises by an uninsured casualty, Landlord agrees to repair the damage at its
own cost up to Two Hundred Fifty Thousand and No/100
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Dollars ($250,000.00) for Tenant's portion of the Building. If such damage can
not be repaired within one hundred eighty (180) days and within the specified
cost, the Landlord or Tenant may then terminate this Lease.
In the event that the Building in which the Premises may be situated be
destroyed to the extent of not less than 33-1/3% of the replacement cost
thereof, Landlord may elect to terminate this Lease, whether the Premises be
inured or not. A total destruction of the Building in which the said Premises
may be situated shall terminate this Lease at the option of Landlord or Tenant.
In all events Landlord shall not be required to restore additions, alterations
or improvements made by Tenant or replace Tenant's fixtures or personal
property.
31. ASSIGNMENT OR SUBLEASE: In the event Tenant desires to assign this
Lease or any interest including, without limitation, a pledge, mortgage or other
hypothecation, or sublet the Premises or any part thereof, Tenant shall deliver
to landlord executed counterparts of any such agreement and of all ancillary
agreements with the proposed assignee or subtenant, financial statements, and
any additional information as reasonably required to determine whether it will
consent to the proposed assignment/subtenant, proposed use of the Premises,
rental rate and current financial statement; and upon request to Tenant,
Landlord shall be given additional information as reasonably required to
determine whether it will consent to the proposed assignment or sublease.
Landlord shall then have a period of ten (10) business days following receipt of
such notice within which to notify Tenant in writing that Landlord elects (i) to
terminate this Lease as to the space so affected as of the date so specified by
Tenant in which event Tenant will be relieved of all further obligations
hereunder as to such space, (ii) to permit Tenant to assign or sublet such space
to the named assign subtenant on the terms and conditions set forth in the
notice. If Landlord should fail to notify Tenant in writing of such election
within said ten (10) business days period, Landlord shall be deemed to have
elected option (ii) above. Any rent or other economic consideration realized by
Tenant under any such sublease and assignment in excess of the Base Rental and
Additional Rental payable hereunder (including an allocation of the purchase
price attributable to Tenant's Leasehold interest in the event of a sale of the
Tenant's business), after the net unamortized cost of the Tenant Extra
Improvements for which Tenant has itself paid, and reasonable subletting and
assignment costs, shall be delivered and paid fifty percent (50%) to Landlord
and fifty percent (50%) to Tenant. Tenant's obligation to pay over Landlord's
portion of the consideration shall constitute an obligation for additional rent
hereunder. The above provisions relating to Landlord's right to terminate the
lease and relating to the allocation of bonus rent are independently negotiated
terms of the Lease, constitute a material inducement for the Landlord to enter
into the Lease, and are agreed as between the parties to be commercially
reasonable. No assignment or subletting by Tenant shall relive Tenant of any
obligation under this Lease. Any assignment or subletting which conflicts with
the provisions hereof shall be void.
If Landlord exercises its option to terminate this Lease in part in the event
Tenant desires to sublet or assign part of the Premises, then (a) this Lease
shall end and expire, with respect to such part of the Premises, on the date
upon which the proposed sublease was to commence, and (b) from and after such
date, the amount and Tenants allocable share of all other costs and charges
shall be adjusted,
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based upon the proportion that the rental area of the Premises remaining bears
to the total rentable area of the Premises.
If Landlord does not exercise its option to terminate this Lease, Landlord's
consent (which must be in writing and in form reasonably satisfactory to
Landlord) to the proposed assignment or sublease shall not be unreasonably
withheld or delayed, provided and upon condition that:
(a) In Landlord's reasonable judgement, the proposed assignee
or subtenant is engaged in such a business, and the Premises, or the relevant
part thereof, will be used in such a manner, that: (i) is limited to the use
expressly permitted under this Lease; and (ii) will not violate any negative
covenant as to use contained in any other lease of space in the Building;
(b) The proposed assignee or subtenant is a company with
sufficient financial worth and management ability similar to that of the Tenant
at the commencement of the Lease to undertake the responsibility involved, and
Landlord has been furnished with reasonable proof thereof or the Tenant takes
responsibility for the proposed assignee or subtenant in the case of default of
the said subtenant or assignee;
(c) Neither (i) the proposed assignee or subtenant nor (ii)
any person that, directly or indirectly, controls, is controlled by, or is under
common control with, the proposed assignee or subtenant or any person who
controls the proposed assignee or subtenant, is then an occupant of any part of
the Building or Project of which the Premises are part;
(d) The proposed sublease shall be in form reasonably
satisfactory to Landlord;
(e) There shall not be more than two (2) subtenants of the
Premises at any one time;
(f) Tenant shall reimburse Landlord on demand for any costs
that may be incurred by Landlord in connection with said assignment or sublease,
including the costs of making investigations as to the acceptability of the
proposed assignee or subtenant and legal costs incurred in connection with the
granting of any requested consent in no case to be greater than One Thousand and
No/100 Dollars ($1,000.00); and
(g) Tenant shall not have: (i) advertised or publicized in any
way the availability of the Premises without prior notice to, and approval by,
Landlord.
Any assignment or transfer shall be made only if and shall not be effective
until the assignee shall execute, acknowledge and deliver to Landlord an
agreement, in form and substance satisfactory to Landlord, whereby the assignee
shall assume all of the obligations of this Lease on the part of Tenant to be
performed or observed and shall be subject to all of the covenants, agreements,
terms, provisions and conditions contained in this Lease. Notwithstanding any
such sublease or assignment and the acceptance of rent or additional rent by
Landlord from any subtenant or assignee, Tenant shall and will remain fully
liable for the payment of the rent and additional rent due, and to become due
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hereunder, for the performance of all of the covenants, agreements, terms,
provisions and conditions contained in this Lease. Notwithstanding any such
sublease or assignment and the acceptance of rent or additional rent by Landlord
from any subtenant or assignee, Tenant shall and will remain fully liable for
the payment of the rent and additional rent due, and to become due hereunder,
for the performance of all of the covenants, agreements, terms, provisions and
conditions contained in this Lease on the part of Tenant to be performed and for
all acts and omissions of any license, subtenant, assignee or any other person
claiming under or through any subtenant that shall be in violation of any of the
obligations of this Lease, and any such violation shall be deemed to be a
violation by Tenant. Tenant shall further indemnify, defend and hold Landlord
harmless from and against any and all losses, liabilities, damages, costs and
expenses (including reasonable attorney fees) resulting from any claims that may
be made against Landlord by the proposed assignee or subtenant or by any real
estate brokers or other persons claiming a commission or similar compensation in
connection with the proposed assignment or sublease.
In the event of Tenant's default, Tenant hereby assigns all rents due from any
assignment or subletting to Landlord as security for performance of its
obligations under this Lease and Landlord may collect such rents as Tenants
Attorney-in-Fact, except that Tenant may collect such rents unless a default
occurs as described in Paragraph 24 above. The termination of this Lease due to
Tenant's default shall not automatically terminate any assignment or sublease
then in existence. At the election of Landlord, the assignee or subtenant shall
attorney to Landlord and Landlord shall undertake the obligations of the Tenant
under the sublease or assignment; provided the Landlord shall not be liable for
prepaid rent security deposits or other defaults of the Tenant to the subtenant
or assignee.
If Tenant is a corporation or partnership, all the above provisions shall apply
to a transfer (by one or more transfers) of a majority of the stock of the
corporation or the majority of ownership or control of the partnership, as if
such transfer were an assignment of this Lease; but said provisions shall not
apply to transactions with a corporation or partnership that controls, is
controlled by, or is under common control with Tenant, provided that, in any of
such events: (i) the successor to Tenant has a net worth, computed in accordance
with generally accepted accounting principles, at least equal to the greater of
(x) the net worth of Tenant immediately prior to such transfer or (y) the net
worth of Tenant herein named on the date of this Lease; and (ii) proof
satisfactory to Landlord of such net worth shall have been delivered to Landlord
at least ten (10) days prior to the effective date of any such transaction.
32. CONDEMNATION: If any part of the Premises shall be taken for any
public or quasi public use, under any statute or by right of eminent domain or
private purchase in lieu thereof, 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 condemn or purchaser, and the
rent payable hereunder shall be adjusted so that the Tenant shall be required to
pay for the remainder of the term only such portion of such rent as the value of
the part remaining after such taking bears to the value of the entire Premises
prior to such taking, but in such event Landlord or Tenant shall have the option
to terminate this Lease as of the date when title to the part so taken vests in
the condemnor or purchaser. If all of the premises, or such part of be taken so
that there does not remain a portion susceptible for occupation hereunder, this
Lease shall thereupon terminate. If a part or all of the
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Premises be taken, all compensation awarded upon such taking shall go to the
Landlord and the Tenant shall have no claim thereto but Landlord shall cooperate
with Tenant to recover compensation for damage to or taking of any alterations,
additions or improvements made by Tenant. Tenant hereby waives the provisions of
California Code of Civil Procedures Section 1265.130.
33. EFFECTS OF CONVEYANCE: The term "Landlord" as used in this Lease,
means only the owner for the time being of the land and Building, containing the
Premises, so that, in the event of any sale of said land or Building, or in the
event of a master Lease of the Building, the Landlord shall be and hereby is
entirely freed and relieved of all covenants and obligations of the Landlord
hereunder, and it shall be deemed and construed, without further agreement
between the parties and the purchaser at any such sale, or the master tenant of
the Building, that the purchaser or master tenant of the Building has assumed
and agreed to carry out any and all covenants and obligations of the Landlord
hereunder. Landlord shall transfer and deliver Tenant's security deposit, to the
purchaser at any such sale or the master tenant of the Building, and thereupon
the Landlord shall be discharged from any further liability in reference
thereto.
34. SUBORDINATION: In the event Landlord notifies Tenant in writing,
this Lease shall be subordinate to any ground Lease, deed of trust, or 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 renewals, modifications, replacements and extensions thereof.
Tenant agrees to promptly execute any documents which may be required to
effectuate such subordination. Notwithstanding such subordination, Tenant's
right to quiet possession of the Premises shall not be disturbed if Tenant is
not in default and so long as Tenant shall pay the rent and observe and perform
all of the provisions of this Lease. At the request of any lender, Tenant agrees
to execute and deliver any reasonable modifications of this Lease which do not
materially adversely affect the leasehold or Tenant's rights hereunder.
35. WAIVER: The waiver by Landlord of any breach of any term, covenant
or condition, herein contained shall not be deemed to be a waiver of such term,
covenant or condition or any subsequent breach of the same or any other term
covenant or condition herein contained. The subsequent acceptance of rent
hereunder by Landlord shall not be deemed to be a waiver of any breach by
Tenant of any term, covenant or condition of this Lease, other than the failure
of Tenant to pay the particular rental so accepted, regardless of Landlords
knowledge of such preceding breach at the time of acceptance of such rent.
36. HOLDING OVER: Any holding over after the termination or expiration
of the said term, shall be construed to be a hold over tenancy and Tenant shall
pay rent to Landlord at a rate equal to the average of (i) one hundred thirty
percent (130%) of the effective rent of the current term of the Lease, or (ii)
the Fair Market Rental (as defined in paragraph 39). Any holding over shall
otherwise be on the terms and conditions herein specified, except those
provisions relating to the term and any options to extend or renew, which terms
are expressly waived during any hold over. Furthermore, no holding over shall be
deemed or construed to exercise any option to extend or renew this Lease in lieu
of full and timely exercise of any such option as required hereunder.
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37. SUCCESSORS AND ASSIGNS: The covenants and conditions herein
contained shall, subject to the provisions as to assignment, apply to and bind
the heirs, successors, executors, administrators and assigns of all the parties
hereto; and all of the parties hereto shall be jointly and severally liable
hereunder.
38. ESTOPPEL CERTIFICATES: Tenant shall at any time during the term of
this Lease, upon not less than five (5) business days prior written notice from
Landlord, execute and deliver to Landlord a statement in writing certifying that
this Lease is unmodified and in full force and effect (or, if modified, stating
the nature of such modification) and the date to which the rent and other
charges are paid in advance, if any, and acknowledging that there are not, to
Tenant's knowledge, any uncured defaults on the part of Landlord hereunder or
specifying such defaults if they are claimed. Any such statement may be
conclusively relied upon by any prospective purchaser or encumbrancer of the
Premises. Tenant's failure to deliver such statement within such time shall be
conclusive upon the Tenant that: (a) this Lease is in full force and effect,
without modification except as may be represented by Landlord; (b) them are not
uncured defaults in Landlord's performance. Tenant also agrees to provide when
available up to three (3) years of audited financial statements within five (5)
days of a request by Landlord for Landlord's use in financing the premises with
commercial lenders. As a condition of Tenant providing such financial
statements, Landlord shall secure the written agreement of any such commercial
lender to use the financial statements only for the purpose of evaluating the
applied for financing and not to disclose the financial statements to any other
person without the prior written consent of Tenant.
39. OPTION TO EXTEND THE TERM: Landlord hereby grants to Tenant, upon
and subject to the terms and conditions set forth in this paragraph, the option
(the "Option") to extend the term of this Lease for an additional term (the
"Option Term"), which Option Term shall be a period of sixty (60) months. The
Option Term shall be exercised, if at all by written notice to Landlord on or
before the date that is three (3) months prior to the expiration date of the
initial term of the Lease. If Tenant exercises the Option. each of the terms,
covenants and conditions of this Lease except this paragraph shall apply during
the Option Term as though the expiration date of the Option Term was the date
originally set forth herein as the expiration date of the initial term provided
that the rent to be paid shall be the Fair Market Rental, as hereinafter
defined, for the Premises for the Option Term. Anything contained herein to the
contrary notwithstanding, if Tenant is in monetary or material non-monetary
default under any of the terms, covenants or conditions of this Lease either at
the time Tenant exercises the Option or at any time thereafter prior to the
commencement date of the Option Term, Landlord shall have, in addition to all of
Landlords other rights and remedies provided in this Lease, the right to
terminate the Option upon notice to Tenant, in which event the expiration date
of this Lease shall be and remain the expiration date of the initial term. As
used herein, the term "Fair Market Rental" for the Premises shall mean the
rental and all other monetary payments that Landlord could obtain during the
Option Term from a third party desiring to lease the Premises for the Option
Term taking into account the age of the Building, the quality of construction of
the Building and the Premises, the services provided under the terms of this
Lease, the rental and other monetary payments, and any escalations and
adjustments thereto (including without limitation Consumer Price Indexing) then
being obtained for new leases of space comparable to the Premises in the
locality of the Building and all other factors that would be relevant to a third
party desiring to lease the Premises
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<PAGE> 20
for the Option Term in determining the rental such party would be willing to pay
therefor. The Lease Guarantee will no longer be required for the Option Term.
If Tenant exercises the Option, Landlord shall send to Tenant a notice setting
forth the Fair Market Rental for the Premises for the Option Term, on or before
the date that is one hundred fifty (150) days prior to the expiration date of
the initial term. If Tenant disputes Landlord's determination of the Fair Market
Rental for the Option Term, Tenant shall within thirty (30) days after the date
of Landlords notice setting forth the Fair Market Rental for the Option Term,
send to Landlord a notice stating that Tenant either (x) elects to terminate its
exercise of the Option, in which event the Option shall lapse and this Lease
shall terminate on the expiration date of the initial term in the manner
provided herein, or (y) disagrees with Landlord's determination of Fair Market
Rental for the Option Term and elects to resolve the disagreement as provided in
paragraph 39(a) below. If Tenant does not send to Landlord a notice as provided
in the previous sentence, Landlord's determination of the Fair Market Rental
shall be the basis for determining the rent to be paid by Tenant hereunder
during the Option Term. If Tenant elects to resolve the disagreements as
provided in paragraph 39(a) below and such procedures shall not have bene
concluded prior to the commencement date of the Option Term, Tenant shall pay
rent to Landlord hereunder adjusted to reflect the Fair Market Rental as
determined by Landlord In the manner provided above. If the amount of Fair
Market Rental as finally determined pursuant to in paragraph 39(a) below is
greater than Landlord's determination, Tenant shall pay to Landlord the
difference between the amount paid by Tenant and the Fair Market Rental as so
determined in paragraph 39(a) below within thirty (30) days after the
determination. If the Fair Market Rental as finally determined in paragraph
39(a) below is less than Landlord's determination, the difference between the
amount paid by Tenant and the Fair Market Rental as so determined in paragraph
39(a) below shall be credited against the next installments of rent due from
Tenant to Landlord hereunder.
39(a) RESOLUTION OF A DISAGREEMENT OVER THE FAIR MARKET
RENTAL: Any disagreement regarding the Fair Market Rental shall be resolved as
follows:
(i) Within thirty (30) days after Tenant's response
to Landlords notice to Tenant of the Fair Market Rental, Landlord and Tenant
shall meet no less than two (2) times, at a mutually agreeable time and place,
to attempt to resolve any such disagreement.
(ii) If within the thirty (30) day period referred to
in (i) above, Landlord and Tenant can not reach agreement as to the Fair Market
Rental, they shall each select one appraiser to determine the Fair Market
Rental. Each such appraiser shall arrive at a determination of the Fair Market
Rental and submit their conclusions to Landlord and Tenant within thirty (30)
days after the expiration of the thirty (30) day consultation period described
in (i) above.
(iii) If only one appraisal is submitted within the
requisite time period, it shall be deemed to be the Fair Market Rental. If both
appraisals are submitted within such time period, and if the two appraisals so
submitted differ by less than ten percent (10%) of the higher of the two, the
average of the two shall be the Fair Market Rental. If the two appraisals differ
by more than ten percent (10%) of the higher of the two, then the two appraisers
shall immediately select a
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<PAGE> 21
third appraiser who shall within thirty (30) days after his or her selection
make a determination of the Fair Market Rental and submit such determination to
Landlord and Tenant. This third appraisal will then be averaged with the closer
of the two previous appraisals and the result shall be the Fair Market Rental.
(iv) All appraisers specified pursuant to this
paragraph shall be members of the American Institute of Real Estate Appraisers
with not less than ten (10) years experience appraising commercial properties in
the Santa Clara Valley. Each party shall pay the cost of the appraiser selected
by such party and one-half of the cost of the third appraiser plus one-half of
any other incurred in resolving the dispute pursuant to this paragraph.
40. OPTION AND RIGHT OF FIRST OFFERING TO LEASE:
40(a). OPTION TO LEASE: Subject to the rights of any existing
tenants, Landlord hereby grants Tenant an option to lease the space comprising
the balance of the Building of 58,601 square feet ("Expansion Space") upon the
expiration of the existing lease on the Expansion Space. Tenant shall have the
option, which may be exercised by written notice to Landlord at any time within
forty-five (45) days after Tenant's receipt of Landlord's notice, to agree to
lese the Expansion Space at Fair Market Rental determined pursuant to paragraph
39. The lease term for the Expansion Space shall be coterminous with the
expiration of this Lease and shall provide for a five year option to extend at
Fair Market Rental. Notwithstanding the foregoing, in the event Tenant fails to
exercise this option within said forty-five (45) days, Landlord shall have one
hundred eighty (180) days thereafter to lese the Expansion Space at Fair Market
Rental. In the event Landlord fails to lease the Expansion Space within said one
hundred eighty (180) day period, Landlord shall be required to resubmit such
offer to Tenant in accordance with this paragraph 40(a).
40(b) RIGHT OF FIRST OFFERING TO LEASE: Subject to the rights
of any existing tenants and if Tenant does not exercise its option provided in
paragraph 40(a) above, Landlord hereby grants Tenant a right of first offering
to lease the Expansion Space at such time as the Expansion Space again becomes
available for lease. Prior to Landlord offering to lease the Expansion Space to
a third party, Landlord shall first give Tenant prior written notice of such
desire and the terms and other information under which Landlord intends to lease
the Expansion Space. Tenant shall have the option, which may be exercised by
written notice to Landlord at any time within ten (10) business days after
Tenant's receipt of Landlord's notice, to agree to lese the Expansion Space at
the rent and terms of lease specified in the notice. In the event Tenant agrees
to lease the Expansion Space, Landlord shall lease the Expansion Space to Tenant
in accordance with the notice. In the event Tenant fails to exercise Tenant's
option within said ten (10) days, Landlord shall have ninety (90) days
thereafter to lease the Expansion space at the same or higher rent and upon the
same terms of lease as specified in the notice to Tenant. In the event Landlord
fails to lease the Expansion Space to a third party within said ninety (90) day
period or in the event Landlord proposes to lease the Expansion Space to a third
party at a lower rent or on more favorable terms than that proposed to Tenant,
Landlord shall be required to resubmit such offer to Tenant in accordance with
this paragraph 40(b).
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<PAGE> 22
41. OPTIONS: All Options provided Tenant in this Lease are personal and
granted to original Tenant and are not exercisable by any third party should
Tenant assign or sublet all or a portion of its rights under this Lease, unless
Landlord consents to permit exercise of any option by any assignee or subtenant,
in Landlords sole discretion. In the event that Tenant hereunder has any
multiple options to extend this Lease, a later option to extend the Lease cannot
be exercised unless the prior option has been so exercised. Any purchaser of
Tenant's assets, or successor to Tenant by way of merger or other corporate
reorganization shall not be considered a third party if said successor's credit
worthiness and the ability of its management is, in Landlord's reasonable
opinion, equivalent to those of the original Tenant.
42. QUIET ENJOYMENT: Upon Tenant's faithful and timely performance of
all the terms and covenants of the Lease, Tenant shall quietly have and hold the
Premises for the term and any extensions thereof.
43. BROKERS: Tenant represents it has not utilized or contacted a real
estate broker or finder with respect to this Lease other than Grubb & Ellis and
Tenant agrees to indemnify and hold Landlord harmless against any claim, cost,
liability or cause of action asserted by any broker or finder claiming through
Landlord.
44. LANDLORD'S LIABILITY: If tenant should recover a money judgment
against Landlord arising in connection with this Lease, the judgment shall be
satisfied only out of Landlord's interest in the Premises including the
improvements and real property and neither Landlord or any of its partners shall
be liable personally for any deficiency. General partners of Landlord shall be
liable personally for any deficiency if their own intentional acts or omissions
are responsible for the claim upon which the judgment was obtained.
45. AUTHORITY OF PARTIES:
45(a) CORPORATE AUTHORITY: If Tenant is a corporation, each
individual executing this Lease on behalf of said corporation represents and
warrants that he is duly authorized to execute and deliver this Lease on behalf
of said corporation, in accordance with a duly adopted resolution of the Board
of Directors of said corporation or in accordance with the bylaws of said
corporation, and that this Lease is binding upon said corporation in accordance
with its terms.
45(b) LIMITED PARTNERSHIPS: If the Landlord herein is a
limited partnership, it is understood and agreed that any claim by Tenant on
Landlord shall be limited to the assets of the limited partnership. And
furthermore, Tenant expressly waives any and all rights to proceed against the
individual partners or the officers, directors or shareholders of any corporate
partner, except to the extent of their interest in said limited partnership.
46. TRANSPORTATION DEMAND MANAGEMENT REQUIREMENTS: Should a government
agency or municipality require Landlord to institute TDM (Transportation Demand
Management) facilities and/or program, Tenant hereby agrees that the cost of IDM
imposed facilities required on the Premises, including but not limited w
employee showers, lockers, cafeteria, or
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<PAGE> 23
lunchroom facilities, shall be included as Tenant Improvement Costs and any
ongoing costs or expenses associated with a TDM program such as an on-site TDM
coordinator, which are required for premises and not provided by Tenant shall be
provided by Landlord with such costs being included as Additional Rent and
reimbursed to Landlord by Tenant.
47. MISCELLANEOUS PROVISIONS: All rights and remedies hereunder are
cumulative and not alternative to the extent permitted by law and are in
addition to all other rights and remedies in law and in equity.
If any term or provision of this Lease is held unenforceable or invalid by a
court of competent jurisdiction. the remainder of the term shall not be
invalidated thereby but shall be enforceable in accordance with its terms,
omitting the invalid or unenforceable term.
This Lease shall be governed by and construed in accordance with California law.
Tenant shall not permit or condone any nuisance or distance of any kind on the
Premises which annoys or disturbs Landlord, or other occupants of the Building.
All sums due hereunder, including rent and additional rent, if not paid when
due, shall bear interest at a reasonable rate under California law accruing from
the date due until the date paid to Landlord.
Time is of the essence hereunder.
The headings or titles to the paragraphs of this Lease am not a part of this
Lease and shall have no effect upon the construction or interpretation of any
part thereof nor shall any phrases in capital letters have any increased
emphasis. This instrument contains all of the ingredients and conditions made
between the parties hereto and may not be modified orally or in any other manner
than by an agreement in writing signed by all of the parties hereto or their
respective successors in interest.
If Tenant fails to perform any obligation required under this Lease or by law or
governmental regulation, Landlord in its sole discretion may with ten (10)
business days notice perform such obligation, in which event Tenant shall pay
Landlord as additional rent all sums paid by Landlord in connection with such
substitute performance within ten (10) business days following Landlord's
written notice for such payment. Any delinquent sum shall bear interest at a
reasonable lawful contract rate to be charged under California law.
All monetary sums due from Tenant to Landlord under this Lease shall be deemed
to be rent.
Tenant acknowledges that neither Landlord or its affiliates or agents have made
any agreements, representations, warranties or promises with respect to the
demised Premises or the Building of which they are a part, or with respect to
present or future rents, expenses, operations, tenancies or any other matter.
Except as herein expressly set forth, Tenant relied on no statement of Landlord
or its agents for that purpose.
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<PAGE> 24
48. ARBITRATION: It is the express intention of the parties that any
claim or controversy of any land arising out of or relating in any way to this
Agreement shall be resolved only by submission to binding arbitration in
accordance with the then prevailing American Arbitration rules with the
following modifications:
(a) The Parties will attempt to agree upon one arbitrator: in
the event that they cannot so agree, them shall be three (3) arbitrators, one
appointed in writing by each of the parties within five (5) days after either
party gives notice to the other of failure to agree on a single arbitrator, and
a third arbitrator shall be chosen within ten (10) days by the two (2)
arbitrators appointed by the parties. Should either party refuse or neglect to
name the arbitrator to be appointed by it within said five (5) days, such party
shall be conclusively presumed to have waived its right to appoint such
arbitrator, the arbitrator named by the other party may appoint the third
arbitrator, and such two arbitrators may proceed with determination of the
dispute. Should the two (2) arbitrators to be appointed by the parties fail to
choose a third arbitrator within said ten (10) days, the Arbitration Association
shall name the third arbitrator on the request of either party.
(b) Arbitration shall take place in the County of Santa Clara,
California.
(c) Notwithstanding any provision to the contrary in the
applicable law or in the rules of the American Arbitration Association, the
arbitrators shall have authority to award injunctive relief, specific
performance, and damages for lost profits, as well as punitive and consequential
damages of any nature, in addition to awarding actual damages, the cost of the
arbitration and reasonable attorney's fees.
(d) Pursuant to California Code of Civil Procedure l283.1(b),
the Parties agree that the provisions of 1283.05 are hereby incorporated into,
made a part of and are applicable to this Agreement to arbitrate solely for the
purpose of obtaining the production of documents.
(e) To the extent not covered by the arbitrator's award, the
cost of the arbitration shall be shared equally by the parties.
(f) Any award rendered by the arbitrator may be entered for
enforcement, if necessary, in any court of competent jurisdiction, the party
against whom enforcement is sought bearing the costs and expenses, including
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<PAGE> 25
IN WITNESS WHEREOF, Landlord and Tenant have executed these presents,
the day and year first above written.
LANDLORD: TENANT:
SOBRATO INTEREST INTEGRATED INFORMATION
a California Limited Partnership TECHNOLOGY, INC.
a California Corporation
BY: __________________________ BY: ______________________
ITS: Managing General Partner ITS: President
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<PAGE> 26
LANDLORD'S CONSENT TO ALTERATIONS AND
IMPROVEMENTS
Premises: 2445 Mission College Boulevard, Santa Clara, CA
Landlord: Sobrato Interests
Tenant: 8 x 8
Lease Agreement Dated: July 3, 1990
Pursuant to Paragraph 4 of the Lease Agreement between the Parties, by
signature below, Landlord consents to the construction by Tenant of the
alterations and improvements proposed in accordance with the following
description:
Install a Fiber Optic cable for 8 x 8, Inc.: This will require Brooks
Fiber Communications to place 45 feet of 4" conduit rising on the rear of
building 2445 at the telephone/equipment room. The conduit win start from the
outside at column D1 and penetrate into the telephone room. The 4" conduit will
rise approximately 10 feet on the building exterior wall and terminate in a
weatherproof NEMA enclosure and then enter the building.
This consent is expressly conditioned upon Tenant's acknowledgment of
and timely and faithful performance as follows:
1. Landlord's consent to the plans and specifications is an
accommodation to Tenant only, and Landlord shall have no liability or
responsibility, either express or implied, for the completeness or suitability
of the plans and specifications for their intended purpose.
2. Tenant shall construct the improved alterations and improvements in
accordance with all existing applicable municipal, local, state and federal
laws, statutes, rules, regulations and ordinances.
3. Tenant will not commence construction until it has obtained validly
issued and fully paid permits for the contemplated work.
4. Tenant will obtain Landlord's prior written consent to substantial
and material changes in the nature or scope of the work.
5. Tenant will indemnify and hold Landlord harmless from any loss,
cost, damage or expense of any kind or nature resulting from the work,
including, without limitation, any loss or damage as result of defective work
from any cause; any damage or injury to persons or property, including any
damage to the structure or adjacent improvements; claims of workmen, suppliers
and/or professional consultants, including mechanics lien claims; and any cost
or expense incurred by Landlord in defense of, repair of or payment of such
claims, including its reasonable attorneys' fees. Upon written demand from
Landlord, Tenant shall immediately pay to Landlord any such cost or
<PAGE> 27
expense incurred by Landlord, and such obligation shall be a claim for
"additional rent" due from Tenant under the terms of the Lease Agreement.
6. If applicable, Tenant covenants and agrees it will not interfere
with the use or occupancy of the premises by other tenants, or their licensees
or invitees, and will not disturb their quiet enjoyment of the premises and
appurtenant amenities, including access to parking, etc.
7. Tenant agrees to post and insure continued posting of the statutory
Notice of Non responsibility of Landlord prior to commencement of any of the
work.
8. On or before the expiration of the term or sooner termination of the
Lease, Tenant shall remove all of its personal property, trade fixtures and any
alterations and improvements constructed hereunder from the premises unless the
Landlord shall notify Tenant in writing of any exception to this obligation and
all property not so removed shall be deemed abandoned by Tenant. Any damage or
destruction caused by Tenant's removal of such items shall be repaired and paid
for at Tenant's sole cost and expenses.
9. Tenant agrees to provide Lessor with half size (15" X 21") vellums
of the as-built floor, electrical and mechanical plans describing the entire
Premises within 2 weeks of completion of all alterations and improvements that
properly reflect all of the demised premises in its revised state.
Landlord: Sobrato Interests
By: _________________________
Date: _______________________
Tenant: 8 x 8, Inc.
By: _________________________
Date: _______________________
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<PAGE> 28
LANDLORD'S CONSENT TO ALTERATIONS AND IMPROVEMENTS
PREMISES: 2445 Mission College Boulevard
LANDLORD: Sobrato Interests, a California Limited Partnership
TENANT: Integrated Information Technology, Inc.
LEASE AGREEMENT DATED: July 3, 1990
Pursuant to Paragraph 10 of the Lease Agreement between the Parties, by
signature below, Landlord consents to the construction by Tenant of a wall
mounted sign at 2445 Mission College Boulevard proposed in accordance with the
specifications submitted to Landlord dated February 22, 1991:
This consent is expressly conditioned upon Tenant's acknowledgment of
and timely and faithful performance as follows:
1. Landlord's consent to the plans and specifications is an
accommodation to Tenant only, and Landlord shall have no liability or
responsibility, either express or implied, for the completeness or suitability
of the plans and specifications for their intended purpose.
2. Tenant shall construct the improved alterations and improvements in
accordance with all existing applicable municipal, local, state and federal
laws, statutes, rules, regulations and ordinances.
3. Tenant will not commence construction until it has obtained validly
issued and fully paid permits for the contemplated work.
4. Tenant will obtain Landlord's prior written consent to substantial
and material changes in the nature or scope of the work.
5. Tenant will indemnify and hold Landlord harmless from any loss,
cost, damage or expense of any kind or nature resulting from the work,
including, without limitation, any loss or damage as result of defective work
from any cause; any damage or injury to persons or property, including any
damage to the structure or adjacent improvements; claim of workmen, suppliers
and/or professional consultants, including mechanics lien claims; and any cost
or expense incurred by Landlord in defense of, repair of or payment of such
claims, including its reasonable attorneys' fees. Upon written demand from
Landlord, Tenant shall immediately pay to Landlord any such cost or expense
incurred by Landlord, and such obligation shall be a claim for "additional rent"
due from Tenant under the terms of the Lease Agreement.
6. If applicable, Tenant covenants and agrees it will not interfere
with the use or occupancy of the premises by other tenants, or their licensees
or invitees, and will not disturb their quiet enjoyment of the premises and
appurtenant amenities, including access to parking, etc.
<PAGE> 29
7. Tenant agrees to post and insure continued posting of the statutory
Notice of Nonresponsibility of Landlord prior to commencement of any of the
work.
8. On or before the expiration of the term or sooner termination of the
Lease, Tenant shall remove all of its personal property, trade fixtures and any
alterations and improvements consumed hereunder from the premises unless the
Landlord shall notify Tenant in writing of any exception to this obligation and
all property not so removed shall be deemed abandoned by Tenant. Any damage or
destruction caused by Tenants removal of such items shall be repaired and paid
for at Tenant's sole cost and expenses.
LANDLORD:
Sobrato Interests,
a California Limited Partnership
By: _________________________
Date: _______________________
TENANT:
Integrated Information Technology, Inc.
By: _________________________
Date: _______________________
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<PAGE> 30
FIRST AMENDMENT TO LEASE
This Amendment is made this 31st day of March 1991 by and between
SOBRATO INTERESTS, a California Limited Partnership having an address at 10600
N. DeAnza Blvd., Suite 200, Cupertino, California 95014 ("Landlord") and
INTEGRATED INFORMATION TECHNOLOGY, INC., a California corporation ("Tenant").
WITNESSETH
WHEREAS Landlord and Tenant entered into a lease ("Lease") dated July
3, 1990 for the premises ("Premises") located at 2441 Mission College Boulevard,
Santa Clara, California; and
WHEREAS effective ]December 15, 1990, Landlord and Tenant wish to
modify the Lease to document the Commencement Date; and
WHEREAS Landlord and Tenant wish to modify the address of the Premises
to 2445 Mission College Boulevard, Santa Clara, California; and
WHEREAS Landlord and Tenant wish to modify the square footage, adjust
Tenant's Allocable Share of the Common Area Costs and adjust the rent schedule
of the Premises to reflect the elimination of 63 square feet by the toilet room
constructed for Stanford Telecommunications' cafeteria.
NOW, THEREFORE, in order to effect the intent of the parties as set
forth above and for good and valuable consideration exchanged between the
parties, the Lease is amended effective December 15, 1990 as follows:
1. The Lease Commencement Date shall be December 15, 1990 and the Lease
shall expire on December 14, 1997.
2. The address of the Premises shall be changed to 2445 Mission College
Boulevard and the square footage of the Premises shall be reduced to 42,387
square feet.
3. The revised rent schedule, total shall be $3,346,877.52, paid in
monthly installments as follows:
12/15/90-12/14/91 $16,954.80 $203,457.60 $0.40/sq.ft.
12/15/91-12/14/92 $35,181.21 $422,174.52 $0.83/sq.ft.
12/15/92-12/14193 $40,267.65 $483,211.80 $0.95/sq.ft.
12/15/93-12/14/94 $42,810.87 $513,730.44 $1.01/sq.ft.
12/15/94-12/14/95 $45,354.09 $544,249.08 $1.07/sq.ft.
12/15/95-12/14/96 $47,897.31 $574,767.72 $1.13/sq.ft.
12/15/96-12/14/97 $50,440.53 $605,286.36 $1.19/sq.ft.
<PAGE> 31
4. Tenant's Allocable Share of Building Costs shall be changed to
42.27%, Share of Project Costs to 10.11%, and for all tax-related expenses, to
17.89%.
5. Except as hereby amended, the Lease and all of the terms, covenants
and conditions thereof are ratified and confirmed.
IN WITNESS WHEREOF, the parties hereto have set their hands to this
Amendment as of the day and date first above written.
LANDLORD TENANT
Sobrato Interests Integrated Information Technology, Inc.,
a California limited partnership a California corporation
By: ______________________________ By: _______________________________
Its: General Partner Its: Vice President
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<PAGE> 32
SECOND AMENDMENT TO LEASE
This second amendment to lease ("Amendment") is made this 22nd day of
March, 1994 by and between Sobrato Interests, a California Limited Partnership
having an address at 10600 N. DeAnza Blvd., Suite 200, Cupertino, California
95014 ("Landlord") and Integrated Information Technology, Inc., a California
Corporation having its principal place of business at 2445 Mission
College Boulevard, Santa Clara, California ("Tenant").
WITNESSETH
WHEREAS Landlord and Tenant entered into a lease dated July 3, 1990 and
a First Amendment to Lease dated March 31, 1991 (collectively the "Lease") for
the premises ("Premises") located on the first floor of 2441-45 Mission College
Boulevard, Santa Clara, California; and
WHEREAS effective July 6, 1993, Landlord and Tenant wish to modify the
Lease to reflect the Tenant's lease of certain space within the Building
totaling an additional 13,568 rentable square feet on the first and second
floors ("Expansion Space") and the first floor cafeteria area ("Cafeteria") of
2,933 square feet as more particularly outlined in red on Exhibit "A-1 & A-2"
attached hereto.
NOW, THEREFORE, in order to effect the intent of the parties as set
forth above and for good and valuable consideration exchanged between the
parties, the Lease is amended as follows:
1. Beginning on August 8, 1993 and continuing through the expiration of
the Lease on December 14, 1997 the Premises shall be increased to include the
Cafeteria resulting in a total square footage leased by tenant of 45,320 square
feet and the monthly rent due from Tenant shall increase at that time by
$3,000.00 to $43,267.65.
2. Beginning on April 1, 1994 or sixty (60) days following the
termination of the existing lease with Xerox for the Expansion Space, whichever
is later, and continuing through the expiration of the Lease on December 14,
1997 the Premises shall be increased to include Expansion Space resulting in a
total square footage leased by Tenant of 58,888 square feet and the monthly rent
shall increase by $11,125.76 at that time to $56,936.63.
3. The rent schedule specified in the First Amendment to Lease shall be
modified as follows:
04/01/94-12/14/94 $56,936.63 per month
12/15/94-12/14/95 $59,479.85 per month
12/15/95-12/14/96 $62,023.07 per month
12/15/96-12/14/97 $64,566.29 per month
4. Within five (5) days of the date of this Amendment Tenant shall
deposit $15,766.50 as an additional security deposit to provide a total security
deposit of $51,000.00.
<PAGE> 33
5. Tenant's Allocable Share of Building Costs for costs allocable to
the entire Building shall be equal to 58.73%, Share of Building Costs for costs
allocable to the second floor only shall be equal to 24.56%, Share of Project
Costs shall be equal to 14.04% and Share of tax related costs (shared with 2451
Mission) shall be equal to 24.85%. Tenant shall not be responsible for its
pro-rata share of utilities until Tenant occupies any portion of the Expansion
Space.
6. No tenant improvement allowance shall be provided by Landlord for
the Cafeteria or the Expansion Space.
7. Tenant agrees to allow access to the Cafeteria to SynOptics
Communication and Xerox ("SynOptics") on the same basis as it is provided to
Tenant's employees through December 31, 1993. In the event, SynOptics or Xerox
utilizes the Cafeteria, the rent paid by Tenant for the Cafeteria during such
period of shared use shall be reduced to an amount equal to $3,000 times a
fraction, the numerator of which is the headcount of Tenant, the denominator of
which is the headcount of Tenant plus the headcount of SynOptics and Xerox
within the Project.
8. Article 7 (Construction) and Article 40 (Option and Right of First
Offering) are deleted.
9. Landlord shall install, at its expense, one door in the northwest
corner of the Expansion Space and shall reconfigure the first floor loading area
as shown on Exhibit "A-1 & A-2".
10. Tenant shall have the right to utilize the freight elevator within
the SynOptics' or Xerox space one or two times monthly with prior written notice
to, and accompaniment by, SynOptics or Xerox. In addition Tenant shall have the
right to utilize the passenger elevator at the Xerox lobby as necessary to
accommodate handicapped persons pursuant to ADA and other applicable
regulations.
11. This Amendment shall replace that certain Second Amendment to Lease
executed by the parties dated September 23,1993.
12. All defined terms shall have the same meanings as in the Lease,
except as otherwise stated in this Amendment.
13. Except as hereby amended, the Lease and all of the terms, covenants
and conditions thereof shall remain unmodified and in full force and effect. In
the event of any conflict or inconsistency between the terms and provisions of
this Amendment and the terms and provisions of the Lease, the terms and
provisions of this Amendment shall prevail.
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<PAGE> 34
IN WITNESS WHEREOF, the parties hereto have set their hands to this
Amendment as of the day and date first above written.
LANDLORD TENANT
Sobrato Interests, Integrated Information Technology, Inc.,
a California Limited Partnership a California Corporation
By: ______________________________ By: _____________________________________
Its: General Partner Its: Chief Operating Officer
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<PAGE> 35
BUILDING FOOTAGE ANALYSIS (SQ. FT.)
<TABLE>
<CAPTION>
XEROX
ITT SYNOPTICS COMMON
------ --------- ------
<S> <C> <C> <C> <C>
FIRST FLOOR 45,115 1,053 192
795 1,018
------ ----- -----
TOTALS 45,910 + 2,071 192 = 48,173
PRORATED 182 8 0
TOTAL 46,094 2,079 0 = 48,173
SECOND FLOOR 11,716 36,578 3,615 = 52,099
190
------ ------ -----
TOTALS 11,906 + 36,578 + 3,615 = 52,099
PRORATED 888 2,727 0
TOTAL 12,794 + 39,305 0 = 52,099
-------------------------------------------------------------
TOTALS 58,888 + 41,384 + 0 = 100,272
</TABLE>
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<PAGE> 36
[XEROX/SYNOPTICS SQUARE FOOTAGE MAP]
<PAGE> 37
[XEROX/SYNOPTICS SQUARE FOOTAGE MAP]
<PAGE> 38
THIRD AMENDMENT TO LEASE
This third amendment to lease ("Amendment") is made this 18th day of
December, 1995 by and between Sobrato Interests, a California Limited
partnership having an address at 10600 N. DeAnza Blvd., Suite 200, Cupertino,
California 95014 ("Landlord") and Integrated Information Technology, Inc., a
California corporation having its principal place of business at 2445 Mission
College Boulevard, Santa Clara, California ("Tenant").
WITNESSETH
WHEREAS Landlord and Tenant entered into a lease dated July 3, 1990 a
First Amendment to Lease dated March 31, 1991 and a Second Amendment to Lease
dated March 22, 1994 (collectively the "Lease") for the premises ("Premises")
located on the first and second floors of 2441-2445 Mission College Boulevard,
Santa Clara, California; and
WHEREAS effective October 25, 1995, Landlord and Tenant wish to clarify
the language in the Lease regarding the payment of common area expenses for the
second floor space leased to Tenant ("Expansion Space");
NOW, THEREFORE, in order to effect the intent of the parties as set
forth above and for good and valuable consideration exchanged between the
parties, the Lease is amended as follows:
1. Beginning on May 14, 1994, the date the Expansion Space was added to
the Premises, Tenant agrees to reimburse Landlord for common area operating
expenses related to Tenants occupancy of the Expansion Space, on a monthly basis
as provided herein. Tenants allocable share of such costs shall be twenty-four
percent (24%). The foregoing electric allocable shares shall be subject to
further adjustment in the event (i) the meter configuration is modified so the
meters no longer service just the second floor or (ii) if either tenant on the
second floor disproportionately utilizes the utility services.
2. The parties estimate that Tenants allocable share of costs for
common area operating expenses associated with the Expansion Space for 1994 and
1995 will be equal to the following:
Electric, Water - $12,000 x 24% $2,880.00
HVAC Monthly Maint. (11,906 sf x $.007 psf) $83.00
Janitorial Common Area $72.00
HVAC Common Area (3,615 sf x $.007 x 24%) $6.00
------------
Total $3,041.00
In addition, 24% of all costs and expenses for repairs to the Common Areas and
building systems (which are not included in the above costs and cannot be
determined at this time) shall be paid by Tenant to Landlord promptly when due.
<PAGE> 39
Within thirty (30) days following the end of each calendar year,
Landlord shall provide Tenant an accounting reconciling the amount paid by
Tenant against the amount owed by Tenant based on the actual costs for the year.
Any amount due from one party to the other shall be paid within ten (10) days of
such determination.
3. All defined terms shall have the same meanings as in the Lease,
except as otherwise stated in this Amendment.
4. Except as hereby amended, the Lease and all of the terms, covenants
and conditions thereof shall remain unmodified and in full force and effect. In
the event of any conflict or inconsistency between the terms and provisions of
this Amendment and the terms and provisions of the Lease, the terms and
provisions of this Amendment shall prevail.
IN WITNESS WHEREOF, the parties hereto have set their hands to this
Amendment as of the day and date first above written.
LANDLORD TENANT
Sobrato Interests, Integrated Information Technology, Inc.,
a California Limited Partnership a California Corporation
By: ______________________________ By: _____________________________________
Its: General Partner Its: Vice President, Finance
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<PAGE> 40
I.I.T. XEROX CHGS
I.I.T.
<TABLE>
<CAPTION>
TENANT: 442TR 2445 MISSION COLLEGE
DATE XEROX CHARGES MARK-UP 8.5% AMOUNT
<S> <C> <C> <C> <C> <C>
5/15/94-8/31/94 $10,822.63 + $919.92 = $11,742.55
9/1/94-11/30/94 $9,123.00 + $775.46 = $9,898.46
12/1/94-4/30/94 $15,205.00 $1,292.43 = $16,497.43
----------
TOTALS $35,150.63 $2,987.80 $38,138.43
----------
</TABLE>
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<PAGE> 41
EXHIBIT "A"
PREMISES
[FLOOR PLAN]
FEATURES
- Prestigious location adjacent to Marriott Hotel, two blocks from City
of Santa Clara's Convention Center, Techmart, and Light Rail Terminus.
- Dock high loading facilities.
- Surrounded by lush landscaping and waterscape
- 296 Parking spaces [3.6/1000 SF]
- 225 Tons of HVAC, 4000 Amps at 277/480v
- All Ground Floor Space
- Use of full service cafeteria - No Rental to be Paid.
- Cafeteria to be relocated at landlord's expense to the northeast corner
of the building and Exhibit to be revised accordingly
18
<PAGE> 42
EXHIBIT "B"
WORKING DRAWINGS
19
<PAGE> 43
FOURTH AMENDMENT TO LEASE
This fourth amendment to lease ("Fourth Amendment") is made this _____
day of March, 1997 by and between Sobrato Interests, a California limited
partnership having an address at 10600 North De Anza Boulevard, Suite 200,
Cupertino, California 95014 ("Landlord") and 8x8, Inc., a Delaware corporation
("Tenant"), which changed its name in April 1996 from Integrated Information
Technology, Inc. ("IIT").
WITNESSETH
WHEREAS Landlord and IIT entered into a lease dated July 3, 1990, a
lease amendment dated March 31, 1991, a second amendment dated March 22, 1994,
and a third amendment dated December 18, 1995, (collectively the "Lease") for
the premises located at 2445 Mission College Boulevard, California ("Premises");
and
WHEREAS effective April 1, 1997, Landlord and Tenant wish to modify the
Lease to (i) change the expiration date of the Lease, (ii) specify the monthly
rent due during the extended Lease term, and (iii) modify the provisions of
Lease paragraph 39 regarding Tenant's Option to Extend the Lease;
NOW, THEREFORE, in order to effect the intent of the parties as set
forth above and for good and valuable consideration exchanged between the
parties, the Lease is amended effective April 1, 1997 as follows:
1. The expiration date of the Lease is changed from December 14, 1997
to April 30, 1999.
2. Monthly rent for the period from December 15, 1997 through April 30,
1999 is One Hundred Three Thousand Fifty Four and No/100 Dollars ($103,054.00),
which represents 95% of current fair market value for the Premises. The parties
acknowledge that the 5% discount reflects the fact that (i) Tenant is already
occupying and using the Premises in its existing condition and (ii) Landlord is
not incurring any costs or commissions associated with this Fourth Amendment.
3. The first two sentences of Lease paragraph 39 are deleted and
replaced by the following:
Landlord hereby grants to Tenant, upon and subject to the
terms and conditions set forth in this paragraph 39 and the
terms of paragraph 4 of the Fourth Amendment, the option
("Option") to extend the term of this Lease for an additional
term ("Option Term"), which Option Term shall be for a period
of forty-eight (48) months. The Option Term shall be
exercised, if at all, by written notice to Landlord on or
before December 5, 1998.
4. Tenant's ability to exercise its option to extend the Lease is
expressly conditioned upon (i) the election by the tenant in balance of the
Building ("the Other Tenant") not to lease the Premises, and (ii) the Other
Tenant's election to exercise its option to extend its lease for the remaining
portion of the Building, which elections are required to be made by the Other
Tenant on or before December 1, 1998. Further, in the event the Other Tenant
does not exercise its option to extend its lease on the
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<PAGE> 44
remaining portion of the Building, instead of Tenant having an option to extend
the lease for the Premises, Tenant shall only have an option to extend the lease
on the entire Building.
5. All defined terms shall have the same meanings as in the Lease,
except as otherwise stated in this Fourth Amendment.
6. Except as hereby amended, the Lease and all the terms, covenants and
conditions thereof shall remain unmodified and in full force and effect. In the
event of any conflict or inconsistency between the terms and provisions of this
Fourth Amendment and the terms and provisions of the Lease, the terms and
provisions of this Fourth Amendment shall prevail.
IN WITNESS WHEREOF, the parties hereto have set their hands to this
Fourth Amendment as of the day and date first above written.
LANDLORD TENANT
Sobrato Interests, 8x8, Inc.,
a California limited partnership a Delaware corporation
By: By:
------------------------------ ------------------------------
Its: General Partner Its:
----------------------------
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