California-Redwood City-575/595 Broadway Lease - Martin/Campus Associates LP and BroadVision Inc.
LEASE
1. PARTIES.
THIS LEASE (the "LEASE"), dated as of February 5, 1997, is entered
into by and between MARTIN/CAMPUS ASSOCIATES, L.P., a Delaware limited
partnership ("LANDLORD"), whose address is 100 Bush Street, San Francisco, CA
94104, and BROADVISION, INC., a Delaware corporation ("TENANT"), whose
address is 1975 El Camino Real West, Suite 303, Mountain View, CA 94040.
2. PREMISES.
Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord those certain premises consisting of a total area of approximately
Fifty-Eight Thousand Eight Hundred (58,800) square feet, which comprises a
portion of the Rentable Area (as defined below) of that certain building
commonly known as 575-595 Broadway (the "BUILDING"), in the City of Redwood
City, County of San Mateo, State of California, as more particularly shown on
EXHIBIT A (the "PREMISES"). On or before the Commencement Date, Landlord
shall measure the Rentable Area of the Premises to the outside of all
exterior walls, and to the middle of the interior demising wall, that form
the boundaries of the Premises, and Landlord and Tenant shall amend this
Lease if necessary to reflect any discrepancy in the size of the Premises
disclosed by Landlord's measurement of the Premises by Landlord's architect.
The Premises also includes the appurtenant right to use in common with other
tenants of the Project (as defined below) the Common Area (as defined below)
of the Project owned by Landlord.
3. DEFINITIONS.
The following terms shall have the following meanings in this Lease:
A. AFFILIATE. Any Person that controls, or is controlled by or is
under common control with, Landlord or Tenant. No Person shall be deemed in
control of another simply by virtue of being a partner, director, officer or
holder of voting securities of any Person. For purposes of this PARAGRAPH
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3.A, "control" shall mean the ownership of, and/or the right to vote, stock,
partnership interests, membership interests, or other indicia of ownership
possessing at least fifty-one percent (51%) of either the total combined
interests in a Person, or the voting power of all classes of a Person's
capital stock, partnership interests, membership interests, or other indicia
of ownership, that have been issued, outstanding, and (if applicable) are
entitled to vote.
B. ALTERATIONS. Any alterations, additions or improvements made
in, on or about the Premises after the substantial completion of the
Improvements, including, but not limited to, lighting, heating, ventilating,
air conditioning, electrical, partitioning, drapery and carpentry
installations.
C. BUILDING. The term "Building" shall have the meaning set forth
in PARAGRAPH 2.A above.
D. CAPITAL IMPROVEMENTS. Those certain improvements to the
Building to be constructed by Landlord pursuant to PARAGRAPH 10.A and the
Work Letter Agreement attached to this Lease as EXHIBIT B (the "WORK LETTER").
E. CC&RS. Any declaration of conditions, covenants and/or
restrictions, or similar instrument, that now encumbers, or may in the future
encumber the Project or the Premises, as adopted by Landlord or its
successors in interest from time to time, and any modifications or amendments
thereto.
F. COMMENCEMENT DATE. The Commencement Date of this Lease shall be
the first day of the Term determined in accordance with PARAGRAPH 4.A.
G. COMMON AREA. All areas and facilities within the Project not
appropriated to the exclusive occupancy of tenants, including the Parking
Area, the sidewalks, pedestrian ways, driveways, signs, pools, ponds, service
delivery facilities, common storage areas, common utility facilities and all
other areas in the Project established by Landlord and/or its successors for
non-exclusive use. Landlord may, by written notice to Tenant, elect in its
sole discretion to increase and/or decrease the Common Area from time to time
during the Term for
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any reason whatsoever (including without limitation an election by Landlord
and/or its successors in their sole discretion to make changes to the
buildings situated in the Project, and/or to subdivide, sell, exchange,
dispose of, transfer, or change the configuration of all or any portion of
the Common Area from time to time), so long as Landlord neither unreasonably
interferes with ingress to or egress from the Building, nor reduces the
number of parking spaces available for Tenant's use below the minimum
requirements set forth in PARAGRAPH 37 for a period of sixty (60) consecutive
days or more. No such subdivision, sale, exchange, disposition, transfer, or
change to the configuration of all or any portion of the Common Area shall
cause the Common Area to be increased or decreased unless and until Landlord
has given Tenant written notice of such increase or decrease. However,
Landlord shall make no changes which have a material adverse effect upon
Tenant's use and enjoyment of the Premises or the accessibility of parking
thereto.
H. COMMON AREA MAINTENANCE COSTS. The total of all costs and
expenses paid or incurred by Landlord in connection with the operation,
maintenance, ownership and repair of the Common Area, and the performance of
Landlord's obligations under PARAGRAPHS 17.A, and the exercise of Landlord's
rights under PARAGRAPH 17.D. Without limiting the generality of the
foregoing, Common Area Maintenance Costs include all costs of and expense
for: (i) maintenance and repairs of the Common Area; (ii) resurfacing,
resealing, remarking, painting, repainting, striping or restriping the
Parking Area; (iii) maintenance and repair of all public or common
facilities; (iv) maintenance, repair and replacement of sidewalks, curbs,
paving, walkways, Parking Area, Project signs, landscaping, planting and
irrigation systems, trash facilities, loading and delivery areas, lighting,
drainage and common utility facilities, directional or other signs, markers
and bumpers, and any fixtures, equipment and personal property located on the
Common Area; (v) wages, salaries, benefits, payroll burden fees and charges
of personnel employed by Landlord and the charges of all independent
contractors retained by Landlord (to the extent that such personnel and
contractors are utilized by Landlord) for the maintenance, repair, management
and/or supervision of the Project, and of any security personnel retained by
Landlord in connection with the operation and maintenance of the Common Area
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(although Landlord shall not be required to obtain security services); (vi)
maintenance, repair and replacement of security systems and alarms installed
by Landlord (if any); (vii) depreciation or amortization (or in lieu thereof,
rental payments) on all tools, equipment and machinery used in the operation
and maintenance of the Common Area; (viii) premiums for Comprehensive General
Liability Insurance or Commercial General Liability Insurance, casualty
insurance, workers compensation insurance or other insurance on the Common
Area, or any portion thereof or interest therein, and any deductibles payable
with respect to such insurance policies; (ix) all personal property or real
property taxes and assessments levied or assessed on the Project, or any
portion thereof or interest therein, including without limitation the Real
Property Taxes for the Project, if applicable under PARAGRAPH 15.A; (x)
cleaning, collection, storage and removal of trash, rubbish, dirt and debris,
and sweeping and cleaning the Common Area; (xi) legal, accounting and other
professional services for the Project, including costs, fees and expenses of
contesting the validity or applicability of any law, ordinance, rule,
regulation or order relating to the Building, and of contesting, appealing or
otherwise attempting to reduce any Real Property Taxes assessed against the
Project; (xii) any alterations, additions or improvements required to be made
to the Common Area in order to reduce Common Area Maintenance Costs or to
protect the health or safety of occupants of the Project, but only to the
extent of any actual cost savings realized thereby (provided that if the cost
of any such alterations, additions or improvements during any year exceeds
the amount of cost savings realized thereby for that year, Landlord may in
its sole discretion elect to include such excess amounts in Common Area
Maintenance Costs for the following year, but only to the extent of any
actual cost savings realized during such year by reason of such alterations,
additions or improvements); (xiii) all costs and expenses of providing,
creating, maintaining, repairing, managing, operating, and supervising an
amenity center for the Project, which may include without limitation a dining
facility (provided, however, that Landlord shall not be required to provide
or create such an amenity center), which costs and expenses may include
without limitation rent charged by Landlord for the space occupied by such
amenity center; (xiv) all costs and expenses incurred by Landlord in
performing its obligations under PARAGRAPHS 17.A or
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exercising its rights under PARAGRAPH 17.D, including without limitation all
costs and expenses incurred in performing any alterations, additions or
improvements required to be made to the Building in order to comply with
applicable laws, ordinances, rules, regulations and orders (to the extent
that such laws, ordinances, rules, regulations and orders are either enacted
after, or become applicable to the Building due to an amendment thereto that
becomes effective after, the Commencement Date) and all capital improvements
required to made in connection with the operation, maintenance and repair of
the Building, provided that the cost of any such alterations, additions,
improvements or capital improvements, together with interest at the Interest
Rate, shall be amortized over the useful life of the alteration, addition,
improvement or capital improvement in question and included in Common Area
Maintenance Costs for each year over which such costs are amortized; (xv) all
costs and expenses incurred in performing any alterations, additions or
improvements required to be made to the Common Area in order to comply with
applicable laws, ordinances, rules, regulations and orders and all capital
improvements required to made in connection with the operation, maintenance
and repair of the Common Area, provided that the cost of any such
alterations, additions, improvements or capital improvements, together with
interest at the Interest Rate, shall be amortized over the useful life of the
alteration, addition, improvement or capital improvement in question and
included in Common Area Maintenance Costs for each year over which such costs
are amortized; and (xvi) any and all payments due and owing on behalf of the
Project or any portion thereof with respect to any CC&Rs, including without
limitation any and all assessments and association dues. However,
notwithstanding the foregoing or anything to the contrary in this Lease,
Common Area Maintenance Costs shall not include the cost of or expenses for
the following: (A) leasing commissions, attorneys' fees or other costs or
expenses incurred in connection with negotiations or disputes with other
tenants of the Project; (B) depreciation of buildings in the Project; (C)
payments of principal, interest, late fees, prepayment fees or other charges
on any debt secured by a mortgage covering the Project, or rental payments
under any ground lease or underlying lease; (D) any penalties incurred due to
Landlord's violation of any governmental rule or authority (but not excluding
the cost of compliance therewith, if such cost is chargeable to Tenant
pursuant to this Lease); (E) any Real
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Property Taxes or costs for which Landlord is separately and directly
reimbursed by Tenant or any other tenant of the Project which are assessed
against the Premises or the premises leased by such other tenant(s); (F)
items for which Landlord is reimbursed by insurance; (G) all costs associated
with the operation of the business of the entity which constitutes "Landlord"
(as distinguished from the costs of operations, the costs described in clause
(v) of this PARAGRAPH 3.H, and the property management fee described in
PARAGRAPH 5.C below), including, but not limited to, costs of partnership
accounting and legal matters, costs of defending any lawsuits with any
mortgagee (except as the actions of Tenant may be in issue), costs of
selling, syndicating, financing, mortgaging, or hypothecating any of the
Landlord's interest in the Project and/or Common Area, or any portion
thereof, costs of any disputes between Landlord and its employees, costs of
disputes of Landlord with Building management or costs paid in connection
with disputes with Tenant or any other tenants; (H) all costs (including
permit, license and inspection fees) incurred in renovating or otherwise
improving or decorating, painting or redecorating space for other tenants in
the Project; (I) the creation of any reserves for equipment or capital
replacement (but not the expenditure of any funds from such reserves); (J)
all costs arising from monitoring, cleaning up and otherwise remediating any
release of Hazardous Materials at the Premises to the extent that either (1)
Landlord (who shall use reasonable efforts to obtain reimbursement) is
actually reimbursed by third parties for such costs (but not the costs of
collection incurred by Landlord, unless such costs of collection are also
reimbursed by third parties), or (2) such release of Hazardous Materials
occurred prior to the Commencement Date and did not arise from Tenant's early
occupancy of the Premises pursuant to PARAGRAPH 40 below; (K) all costs and
expenses incurred in performing any alterations, additions or improvements
required to be made to the Building in order to comply with applicable laws,
ordinances, rules, regulations and orders, to the extent that such laws,
ordinances, rules, regulations and orders are enacted before the Commencement
Date (unless any such law, ordinance, rule, regulation or order becomes
applicable to the Building due to an amendment that becomes effective after
the Commencement Date, in which event such costs and expenses shall be
includable in Common Area Maintenance Costs); and (L) all costs and expenses
incurred in removing asbestos-containing
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materials from, or encapsulating asbestos-containing materials within, the
Premises.
Notwithstanding anything to the contrary in the definition of Common
Area Maintenance Costs set forth in this Lease, Common Area Maintenance Costs
shall not include the following:
1. any depreciation on the Building and Project;
2. interest, principal, points and fees on debt or
amortization on any mortgages and deeds of trust or other debt instruments
secured by the Building or the Project or any underlying ground lease;
3. costs of repairs and general maintenance paid from
insurance proceeds but excluding the amount of any deductibles paid by
Landlord;
4. repairs and replacements covered by warranties or
guaranties (to the extent actually collected by Landlord);
5. costs of special services rendered to individual tenants
(including Tenant) for which a special charge is made;
6. costs of improvements for other tenants in the Building or
Project;
7. costs of the Landlord for which a tenant is obligated to
reimburse Landlord, including, for example, taxes and property insurance
premiums on improvements for tenants of the Building and Project that are
above the building standard;
8. costs incurred by Landlord due to violations of any of the
terms and conditions of any lease in the Building or Project (other than this
Lease);
9. Marketing costs including without limitation, leasing
commissions, attorneys' fees, space planning costs and other costs and
expenses incurred in connection with the leasing of the Building; and
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10. Overhead and profit increment paid to Landlord and Landlord's
subsidiaries for goods and/or services in or to the Building or Project to
the extent the same exceeds the costs of such goods and/or services rendered
by unaffiliated third parties on a competitive basis.
I. EXISTING BUILDINGS. Those buildings currently situated within
the Project and commonly known as 401 Broadway, 525-555 Broadway, 575-595
Broadway, 475 Broadway and 2945 Bay Road; provided, however, that if at any
time Landlord sells, exchanges, disposes of, or otherwise transfers its
interest in any such building, then effective upon the date of such sale,
exchange, disposition, or other transfer, the building shall cease to be an
Existing Building for the purposes of this Lease; and provided further, that
if at any time Landlord demolishes any Existing Building, neither the
demolished building nor any new building constructed on or about the location
of the demolished building (even if such new building uses the same address
as the demolished building) shall be considered to be an Existing Building
for the purposes of this Lease.
J. EXISTING PROJECT SPACE. All Rentable Area located within the
Existing Buildings.
K. FINAL PLANS. As defined in the Work Letter.
L. FIXED CHARGE RATIO. A ratio determined by taking (i) the sum of
(a) Tenant's Consolidated EBITDA for its annual fiscal period, plus (b) the
aggregate amount paid in cash for the same annual fiscal period as rent
expense under all Non-cancelable Operating Leases, divided by (ii) the sum of
(x) all Interest Charges occurring during the fiscal period, plus (y) the sum
of regular monthly scheduled debt and Capital Lease principal payments,
whereby such principal payments exclude any end of term balloon principal
payments and balloon principal payments which are, at the option of Tenant,
paid during the same annual fiscal period, plus (z) the aggregate amount paid
in cash for the same annual fiscal period as rent expense under all
Non-cancelable Operating Leases. For the purposes of this Paragraph 3.L, the
following terms shall have the following meanings:
(1) CONSOLIDATED EBITDA. For any period, (a) Net
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Income for that period, plus (b) consolidated Interest Charges of Tenant and
its Subsidiaries for that period, plus (c) the aggregate amount of federal
and state taxes on or measured by income of the Tenant and its Subsidiaries
for that period (whether or not payable during that period), plus (d)
depreciation, amortization and all other non-cash expenses of Tenant and its
Subsidiaries for that period, in each case as determined in accordance with
Generally Accepted Accounting Principles.
(2) INTEREST CHARGES. As of the last day of any fiscal
period, the sum of (a) all interest, fees, charges and related expenses
payable with respect to that fiscal period to a lender in connection with
borrowed money or the deferred purchase price of assets that is treated as
interest in accordance with Generally Accepted Accounting Principles, plus
(b) the portion of rent payable with respect to that fiscal period under
Capital Leases that should be treated as interest in accordance with
Generally Accepted Accounting Principles.
(3) GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. As of any date
of determination, accounting principles set forth as generally accepted in
then currently effective Statements of the Financial Accounting Standards
Board ("FASB"), or other authoritative statements of the American Institute
of Certified Public Accountants ("AICPA") and the Securities and Exchange
Commission ("SEC") which are deemed to be generally acceptable accounting
principles, or if such statements of the FASB, AICPA or SEC are not then in
effect, accounting principles that are then approved by a significant segment
of the accounting profession in the United States of America. The term
"consistently applied," as used in connection therewith, means that the
accounting principles applied are consistent in all material respects to
those applied at prior dates or for prior periods.
(4) CAPITAL LEASE. A lease of any kind of property or asset,
whether real, personal or mixed, or tangible or intangible, by Tenant or its
Subsidiaries as lessee, that is, or should be, in accordance with FASB Statement
No. 13, as amended from time to time, or if such Statement No. 13 is not then in
effect, such other statement of Generally Accepted
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Accounting Principles may be applicable, recorded as a "capital lease" on the
balance sheet of Tenant prepared in accordance with Generally Acceptable
Accounting Principles.
(5) NON-CANCELABLE OPERATING LEASE. A non-cancelable lease of
any kind of property or asset, whether real, personal or mixed, or tangible
or intangible, by Tenant or its Subsidiaries as lessee, that is, or should
be, in accordance with FASB Statement No. 13, as amended from time to time,
or if such Statement No. 13 is not then in effect, such other statement of
Generally Accepted Accounting Principles may be applicable, recorded as an
"operating lease" in the financial statements of Tenant prepared in
accordance with Generally Acceptable Accounting Principles.
(6) SUBSIDIARY. As of any day of determination and with
respect to Tenant, any corporation, general partnership, limited partnership,
joint stock company, unincorporated organization, firm, joint venture,
limited liability company, or limited liability partnership, whether now
existing or hereafter organized or acquired: (a) in the case of a corporation
or joint stock company, of which a majority of the securities having ordinary
voting power for the election of directors or other governing body (other
than securities having such power only by reason of the happening of a
contingency) are at the time beneficially owned by Tenant and/or one or more
Subsidiaries of Tenant, or (b) in the case of a general partnership, limited
partnership, unincorporated organization, firm, joint venture, limited
liability company, or limited liability partnership, of which Tenant or a
Subsidiary of Tenant is a general partner, general manager, or of which a
majority of the partnership or other ownership interests are at the time
beneficially owned by Tenant and/or one or more of its Subsidiaries.
M. HVAC. Heating, ventilating and air conditioning.
N. IMPOSITIONS. Taxes, assessments, charges, excises and levies,
business taxes, license, permit, inspection and other authorization fees,
transit development fees, assessments or charges for housing funds, service
payments in lieu of taxes and any other fees or charges of any kind at any
time levied, assessed, charged or imposed by any federal, state or local
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entity, (i) upon, measured by or reasonably attributable to the cost or value
of Tenant's equipment, furniture, fixtures or other personal property located
in the Premises, or the cost or value of any Alterations; (ii) upon, or
measured by, any Rent payable hereunder, including any gross receipts tax;
(iii) upon, with respect to or by reason of the development, possession,
leasing, operation, management, maintenance, alteration, repair, use or
occupancy by Tenant of the Premises, or any portion thereof; or (iv) upon
this Lease transaction, or any document to which Tenant is a party creating
or transferring any interest or estate in the Premises. Impositions do not
include franchise, transfer, inheritance or capital stock taxes, or income
taxes measured by the net income of Landlord from all sources, except to the
extent any such taxes are levied or assessed against Landlord as a substitute
for, in whole or in part, any item that would otherwise be deemed an
Imposition under this PARAGRAPH 3.N. Impositions also do not include any
increases in the taxes, assessments, charges, excises and levies assessed
against the Project due solely to the construction or installation of tenant
improvements or other alterations by tenants of the Project other than Tenant
and any other tenants or occupants of the Building; provided, however, that
if any Impositions are imposed or increased due to the construction or
installation of tenant improvements or other alterations in the Building,
such Impositions shall be equitably prorated in Landlord's reasonable
judgment between Tenant and any other tenants of the Building.
O. IMPROVEMENTS. Collectively, the Tenant Improvements and the
Capital Improvements.
P. INDEX. The Consumer Price Index, All Urban Consumers, All
Items, published by the U.S. Department of Labor, Bureau of Labor Statistics
for the San Francisco-Oakland-San Jose Metropolitan Area (1982-84=100). If
the Base Year of the Index is changed, then all calculations pursuant to this
Lease which require the use of the Index shall be made by using the
appropriate conversion factor published by the Bureau of Labor Statistics (or
successor agency) to correlate to the Base Year of the Index herein
specified. If no such conversion factor is published, then Landlord shall,
if possible, make the necessary calculation to achieve such conversion. If
such conversion is not in Landlord's good-faith, business judgment possible,
or if
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publication of the Index is discontinued, or if the basis of calculating the
Index is materially changed, then the term "INDEX" shall mean comparable
statistics on the cost of living, as computed either (i) by an agency of the
United States Government performing a function similar to the Bureau of Labor
Statistics, or (ii) if no such agency performs such function, by a
substantial and responsible periodical or publication of recognized authority
most closely approximating the result which would have been achieved by the
Index, as may be determined by Landlord in the exercise of its reasonable
good faith business judgment.
Q. INTEREST RATE. Either (i) the greater of (a) eleven percent
(11%) per annum, or (b) the reference rate, or succeeding similar index,
announced from time to time by the Bank of America's main San Francisco
office, plus two percent (2%) per annum; or (ii) the maximum rate of interest
permitted by law, whichever is less.
R. LANDLORD'S AGENTS. Landlord's authorized agents, partners,
subsidiaries, directors, officers, and employees.
S. MONTHLY RENT. The rent payable pursuant to PARAGRAPHS 4.D AND
5.A., as adjusted from time to time pursuant to the terms of this Lease.
T. PARKING AREA. All Common Area (except sidewalks and service
delivery facilities) now or hereafter designated by Landlord for the parking
or access of motor vehicles, including roads, traffic lanes, vehicular
parking spaces, landscaped areas and walkways, and including any parking
structure constructed during the Term. Landlord and/or its successors may,
by written notice to Tenant, elect in their sole discretion to increase
and/or decrease the Parking Area from time to time during the Term for any
reason whatsoever (including without limitation an election by Landlord
and/or its successors in their sole discretion to make changes to the
buildings situated in the Project, and/or to subdivide, sell, exchange,
dispose of, transfer, or change the configuration of all or any portion of
the Parking Area from time to time), so long as such changes to the Parking
Area do not reduce the number of parking spaces available for Tenant's use
below the minimum requirements set
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forth in PARAGRAPH 37 for a period of sixty (60) consecutive days or more.
No such subdivision, sale, exchange, disposition, transfer, or change to the
configuration of all or any portion of the Parking Area shall cause the
Parking Area to be increased or decreased unless and until Landlord has given
Tenant written notice of such increase or decrease.
U. PERSON. Any individual, partnership, firm, association,
corporation, limited liability company, trust, or other form of business or
legal entity.
V. PREMISES. The term "Premises" shall have the meaning set forth in
PARAGRAPH 2 above.
W. PROJECT. That certain real property shown on EXHIBIT C, upon
which are currently located the Building and five (5) other buildings,
currently consisting of a total building square footage of approximately
Three Hundred Eighty-Three Thousand Seven Hundred Thirty-Six (383,736) square
feet of Rentable Area. Landlord and/or its successors may, by written notice
to Tenant, elect in their sole discretion to increase and/or decrease the
number of buildings and/or the amount of Rentable Area situated in the
Project from time to time during the Term for any reason whatsoever.
X. REAL PROPERTY TAXES. Taxes, assessments and charges now or
hereafter levied or assessed upon, or with respect to, the Project, or any
personal property of Landlord used in the operation thereof or located
therein, or Landlord's interest in the Project or such personal property, by
any federal, state or local entity, including: (i) all real property taxes
and general and special assessments; (ii) charges, fees or assessments for
transit, housing, day care, open space, art, police, fire or other
governmental services or benefits to the Project, including assessments,
taxes, fees, levies and charges imposed by governmental agencies for such
purposes as street, sidewalk, road, utility construction and maintenance,
refuse removal and for other governmental services; (iii) service payments in
lieu of taxes; (iv) any tax, fee or excise on the use or occupancy of any
part of the Project, or on rent for space in the Project; (v) any other tax,
fee or excise, however described, that may be levied or assessed as a
substitute for, or as an addition to, in
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whole or in part, any other Real Property Taxes; and (vi) reasonable
consultants' and attorneys' fees and expenses incurred in connection with
proceedings to contest, determine or reduce Real Property Taxes. Real
Property Taxes do not include: (A) franchise, transfer, inheritance or
capital stock taxes, or income taxes measured by the net income of Landlord
from all sources, unless any such taxes are levied or assessed against
Landlord as a substitute for, in whole or in part, any Real Property Tax; (B)
Impositions and all similar amounts payable by tenants of the Project under
their leases; and (C) penalties, fines, interest or charges due for late
payment of Real Property Taxes by Landlord. If any Real Property Taxes are
payable, or may at the option of the taxpayer be paid, in installments, such
Real Property Taxes shall, together with any interest that would otherwise be
payable with such installment, be deemed to have been paid in installments,
amortized over the maximum time period allowed by applicable law. If the tax
statement from a taxing authority does not allocate Real Property Taxes to
the Building, Landlord shall make the determination of the proper allocation
of such Real Property Taxes based, to the extent possible, upon records of
the taxing authority and, if not so available, then on an equitable basis.
Real Property Taxes also do not include any increases in the taxes,
assessments, charges, excises and levies assessed against the Project due
solely to the construction or installation of tenant improvements or other
alterations by tenants of the Project other than Tenant and any other tenants
or occupants of the Building; provided, however, that if any Real Property
Taxes are imposed or increased due to the construction or installation of
tenant improvements or other alterations in the Building, such Real Property
Taxes shall be equitably prorated in Landlord's reasonable judgment between
Tenant and any other tenants of the Building.
Y. RENT. Monthly Rent plus the Additional Rent as defined in
PARAGRAPH 5.E.
Z. RENTABLE AREA. The aggregate square footage in any one or more
buildings in the Project, as appropriate, as reasonably determined by
Landlord's architect from time to time.
AA. SECURITY DEPOSIT. That amount paid by Tenant pursuant to
PARAGRAPH 7.
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BB. SUBLET. Any transfer, sublet, assignment, license or
concession agreement, change of ownership, mortgage, or hypothecation of this
Lease or the Tenant's interest in the Lease or in and to all or a portion of
the Premises. As used herein, a Sublet includes the following: (i) if Tenant
is a partnership or a limited liability company, a transfer, voluntary or
involuntary, of all or any part of any interest in such partnership or
limited liability company, or the dissolution of the partnership or limited
liability company, whether voluntary or involuntary; (ii) if Tenant is a
corporation, any dissolution, merger, consolidation or other reorganization
of Tenant, or the transfer, either by a single transaction or in a series of
transactions, of a controlling percentage of the stock of Tenant (except that
a Sublet shall not include any such transfer of a controlling percentage of
the stock of Tenant occurring at a time when the stock of Tenant is publicly
traded on a nationally recognized stock exchange or over the counter), or the
sale, by a single transaction of or series of transaction, within any one (1)
year period, of corporate assets equaling or exceeding twenty percent (20%)
of the total value of Tenant's assets (except in connection with an initial
public offering of the stock of Tenant on a nationally recognized stock
exchange or over the counter); (iii) if Tenant is a trust, the transfer,
voluntarily or involuntarily, of all or any part of the controlling interest
in such trust; and (iv) if Tenant is any other form of entity, a transfer,
voluntary or involuntary, of all or any part of any interest in such entity.
As used herein, the phrases "controlling percentage" and "controlling
interest" means the ownership of, and/or the right to vote, stock,
partnership interests, membership interests, or other indicia of ownership
possessing at least fifty-one percent (51%) of either the total combined
interests in Tenant, or the voting power of all classes of Tenant's capital
stock, partnership interests, membership interests, or other indicia of
ownership, that have been issued, outstanding, and (if applicable) are
entitled to vote.
CC. SUBRENT. Any consideration of any kind received, or to be
received, by Tenant from a subtenant if such sums are related to Tenant's
interest in this Lease or in the Premises.
DD. SUBTENANT. The person or entity with whom a Sublet agreement
is proposed to be or is made.
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EE. TENANT DELAY. Any delay that Landlord may encounter in the
performance of Landlord's obligations under the Lease because of any act or
omission of any nature by Tenant or its agents or contractors, including
without limitation any (i) delay attributable to the postponement of any
Improvements at the request of Tenant; (ii) delay by Tenant in the submission
of information or the giving of authorizations or approvals within the time
limits set forth in the Lease or the Work Letter; (iii) delay attributable to
the failure of Tenant to pay, when due, any amounts required to be paid by
Tenant pursuant to the Lease or the Work Letter; and (iv) delay resulting
from any change order request initiated or requested by Tenant.
FF. TENANT IMPROVEMENTS. Those certain improvements to the
Premises to be constructed by Landlord pursuant to EXHIBIT B, other than the
Capital Improvements. The Tenant Improvements shall at all times be the
property of Landlord and shall not be deemed Tenant's Personal Property.
GG. TENANT'S BUILDING SHARE. The ratio (expressed as a percentage)
of the total Rentable Area of the Premises to the total Rentable Area of the
Building as determined by Landlord from time to time, which as of the
Commencement Date shall equal seventy percent (70%). Tenant's Building Share
shall be recalculated any time that the amount of Rentable Area contained in
Premises is adjusted, or there is a change in the total Rentable Area of the
Building.
HH. TENANT'S PERCENTAGE SHARE. The ratio (expressed as a
percentage) of the total Rentable Area of the Premises to the total Rentable
Area of all of the buildings at the Project owned by Landlord from time to
time, which as of the Commencement Date shall equal Fifteen and 32/100ths
percent (15.32%) (i.e., the Rentable Area of the Premises divided by the
Rentable Area of the buildings at the Project owned by Landlord as of the
date of this Lease). Tenant's Percentage Share shall be recalculated any
time that the amount of Rentable Area contained in Premises is adjusted, or
there is a change in the total Rentable Area of those buildings in the
Project owned by Landlord, or Landlord sells, exchanges, or otherwise
transfers any or all of the buildings situated in the Project (including
without limitation the Building). The parties acknowledge and agree that the
total
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Rentable Area of all of the buildings in the Project owned by Landlord may
increase and/or decrease from time to time during the Term, since Landlord
may elect in its sole discretion to sell a building or buildings or to make
changes to the buildings it owns in the Project.
II. TENANT'S PERSONAL PROPERTY. Tenant's trade fixtures,
furniture, equipment and other personal property in the Premises.
JJ. TERM. The Term of this Lease set forth in PARAGRAPH 4.A., as
it may be extended hereunder pursuant to any options to extend granted herein.
4. LEASE TERM.
A. TERM. The Term shall commence on the date that Landlord has
substantially completed the Improvements (the "COMMENCEMENT DATE"), and shall
terminate on the date which is ten (10) years from the Commencement Date.
For the purposes of this Lease, Landlord shall be deemed to have
substantially completed the Improvements at such time as the building
inspector for the City of Redwood City has given its final approval of the
Improvements, and the Landlord reasonably believes that a certificate of
occupancy will be issued by the City of Redwood City for the Premises in due
course. If a certificate of occupancy is not issued for the Premises on or
before the Commencement Date, then from and after the Commencement Date
Landlord shall diligently pursue the issuance of such a certificate of
occupancy.
B. DELAYS IN COMPLETION. Landlord shall diligently prosecute the
completion of the Improvements in accordance with the schedule attached to
EXHIBIT B. Tenant agrees that if Landlord, for any reason whatsoever, is
unable to substantially complete the Improvements on or before the Estimated
Commencement Date (as defined below), Landlord shall not be liable to Tenant
for any loss or damage therefrom, nor shall this Lease be void or voidable.
Landlord and Tenant estimate that the Commencement Date shall be August 1,
1997 (the "ESTIMATED COMMENCEMENT DATE"). Upon the establishment of the
actual Commencement Date, Landlord and Tenant shall execute a Commencement
Date Memorandum in the
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form set forth in EXHIBIT D. No delay in Landlord's completion of the
Improvements caused by any Tenant Delay shall delay the commencement of
Monthly Rent or the commencement of the Term hereunder. In the event of such
a delay, Landlord shall set the "Commencement Date" by written notice to
Tenant as the date the Improvements would have been substantially completed
without the delay as reasonably determined by Landlord. Landlord shall then
subsequently deliver the Premises to Tenant upon substantial completion as
hereinabove defined. Tenant shall pay any and all costs and expenses
incurred by Landlord which result from any Tenant Delay, including, without
limitation, any and all costs and expenses attributable to increases in the
cost of labor or materials. Notwithstanding the foregoing, if Landlord is
delayed in the performance of the Improvements because of acts of any other
party, actions of the elements, acts of nature, war, riot, strikes, lockouts,
labor disputes, inability to procure or general shortage of labor or
materials in the normal channels of trade, or delay in governmental action or
inaction where action is required, then the Commencement Date shall be
extended by the period of the delay, and the period for Landlord's
performance of the Improvements shall be extended for a period equivalent to
the period of such delay. Notwithstanding anything to the contrary contained
herein, if (i) Landlord has not delivered the Premises substantially
completed to Tenant on or before the date that is sixty (60) days after the
Estimated Commencement Date for any reason other than force majeure delays,
or (ii) Landlord has not delivered the Premises substantially completed to
Tenant on or before the date that is ninety (90) days after the Estimated
Commencement Date for any reason, including but not limited to force majeure
delays, then in either such event Tenant shall have the right thereafter to
cancel this Lease, and upon such cancellation, Landlord shall return all sums
theretofore deposited by Tenant with Landlord, and neither party shall have
any further liability to the other.
C. OPTION TO EXTEND.
(i) GRANT OF OPTION. Landlord hereby grants to Tenant one (1)
option ("OPTION TO EXTEND") to extend the Term of this Lease for an
additional term of five (5) years. The five-year option term (the "EXTENDED
TERM") shall commence upon the expiration of the initial Term. The Option to
Extend is
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expressly conditioned upon Tenant's not being in default under any term or
condition of this Lease after notice from Landlord and the expiration of any
applicable cure period granted by this Lease, either at the time the Option
to Extend is exercised or at the time the Extended Term would commence. The
Option to Extend shall be personal to the Tenant originally named in this
Lease, and shall not be assigned, sold, conveyed or otherwise transferred to
any other party, except to an Affiliate or a Permitted Transferee in
accordance with PARAGRAPH 25.G below (including without limitation any
assignee or sublessee of such Tenant) without the prior written consent of
Landlord, which consent may be withheld in Landlord's sole discretion. The
Option to Extend shall be exercisable only so long as the Lease remains in
full force and effect and shall be an interest appurtenant to and not
separable from Tenant's estate under the Lease. Under no circumstances shall
Landlord be required to pay any real estate commission to any party with
respect to Tenant's exercise of the Option to Extend.
(ii) MANNER OF EXERCISE. Tenant may exercise the Option to
Extend only by giving Landlord written notice not less than one (1) year
prior to the expiration of the Term. If Tenant fails to exercise the Option
to Extend, then the Option to Extend automatically shall lapse and thereafter
Tenant shall have no right to exercise the Option to Extend.
(iii) TERMS AND RENT. The initial Monthly Rent for the
Premises for the Extended Term shall be equal to the greater of (w) one
hundred percent (100%) of the fair market rent, as determined below, for the
Premises as of the commencement of the Extended Term, or (x) an amount equal
to the Monthly Rent payable during the tenth (10th) year of the Term,
multiplied by the greater of (A) the lesser of (I) a fraction, the numerator
of which is the Index published most recently before the tenth (10th)
anniversary of the Commencement Date, and the denominator of which is the
Index published most recently before the ninth (9th) anniversary of the
Commencement Date, or (II) one hundred six percent (106%), or (B) one hundred
three and five-tenths percent (103.5%). All other terms and conditions of
the Lease, as amended from time to time by the parties in accordance with the
provisions of the Lease, shall remain in full force and effect and shall
apply during the Extended Term;
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provided, however, that neither the Option to Extend nor Landlord's
obligations under the Work Letter shall be of any force or effect during the
Extended Term.
(iv) DETERMINATION OF RENT. For the purposes of calculating
the Monthly Rent for the Extended Term, the fair market rent shall be equal
to the net effective rent per rentable square foot being charged for leases
executed within the preceding twelve (12) months for comparable space at
either the Project (if any), or if there are none, for comparable space in
office and research and development complexes located in the Redwood Shores
area or the Menlo Oaks Business Park (located in Menlo Park, California),
with terms comparable to the terms contained in this Lease, taking into
consideration relevant factors such as the presence or absence of tenant
improvement contributions by the lessor (but excluding the value of any
tenant improvements paid for by Tenant), and incorporating increases in the
Rent during the Extended Term, if appropriate. Any value added to the
Premises by the Tenant Improvements and any Alterations paid for by Tenant
shall not be considered or included in the determination of the fair market
rent. The fair market rent shall be determined by mutual agreement of the
parties or, if the parties are unable to agree within forty-five (45) days
after Tenant's exercise of the Option to Extend, then fair market rent shall
be determined pursuant to the procedure set forth in PARAGRAPHS 4.C.(v) and
4.C.(vi). The determination of the Monthly Rent for the Extended Term for
the Premises shall take into account the fact that the Premises shall be
leased in its shell condition.
(v) LANDLORD'S INITIAL DETERMINATION. If the parties are
unable mutually to agree upon the fair market rent pursuant to PARAGRAPH
4.C.(iv), then the fair market rent initially shall be determined by Landlord
by written notice ("LANDLORD'S NOTICE") given to Tenant promptly following
the expiration of the 45-day period set forth in PARAGRAPH 4.C.(iv). If
Tenant disputes the amount of fair market rent set forth in Landlord's
Notice, then, within thirty (30) days after the date of Landlord's Notice,
Tenant shall send Landlord a written notice ("TENANT'S NOTICE") which
specifically (a) disputes the fair market rent set forth in Landlord's
Notice, (b) demands arbitration pursuant to PARAGRAPH 4.C.(vi), and (c)
states the
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name and address of the person who shall act as arbitrator on Tenant's
behalf. Tenant's Notice shall be deemed defective, and not given to
Landlord, if it fails to substantially comply with the requirements or fails
to strictly comply with the time period set forth above. If Tenant does not
send Tenant's Notice within thirty (30) days after the date of Landlord's
Notice, or if Tenant's Notice fails to contain all of the required
information, then Tenant shall be deemed to have rejected Landlord's Notice.
If Tenant is deemed to have rejected Landlord's Notice, and Landlord
thereafter gives Tenant a written notice ("LANDLORD'S SECOND NOTICE")
demanding that Tenant respond to Landlord's Notice, and Tenant does not send
Tenant's Notice within five (5) days of the date of Landlord's Second Notice,
then the Monthly Rent for the Extended Term shall equal one hundred percent
(100%) of the fair market rent specified in Landlord's Notice. If Tenant
sends Tenant's Notice in the proper form within thirty (30) days after the
date of Landlord's Notice, then the Monthly Rent for the Extended Term shall
be determined by arbitration pursuant to PARAGRAPH 4.C(vi) below. If the
arbitration is not concluded prior to the commencement of the Extended Term,
then Tenant shall pay Monthly Rent equal to one hundred twenty-five percent
(125%) of the Monthly Rent payable immediately prior to the commencement of
the Extended Term. If the fair market rent determined by arbitration differs
from that paid by Tenant pending the results of arbitration, then any
adjustment required to adjust the amount previously paid shall be made by
payment by the appropriate party within ten (10) days after the determination
of fair market rent.
(vi) ARBITRATION. The arbitration shall be conducted in the
City of San Francisco in accordance with the then prevailing rules of the
American Arbitration Association (or its successor) for the arbitration of
commercial disputes, except that the procedures mandated by such rules shall
be modified as follows:
(a) Each arbitrator must be a real estate appraiser with
at least five (5) years of full-time commercial appraisal experience who is
familiar with the fair market rent of office and research and development
complexes located in the vicinity of the Premises. Within ten (10) business
days after receipt of Tenant's Notice, Landlord shall notify Tenant of the
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name and address of the person designated by Landlord to act as arbitrator on
Landlord's behalf.
(b) The two arbitrators chosen pursuant to PARAGRAPH
4.C.(vi)(a) shall meet within ten (10) business days after the second
arbitrator is appointed and shall either agree upon the fair market rent or
appoint a third arbitrator possessing the qualifications set forth in
PARAGRAPH 4.C.(vi)(a). If the two arbitrators agree upon the fair market
rent within such ten (10) business day period, the Monthly Rent for the
Extended Term shall equal one hundred percent (100%) of such fair market
rent. If the two arbitrators are unable to agree upon the fair market rent
and are unable to agree upon the third arbitrator within five (5) business
days after the expiration of such ten (10) business day period, the third
arbitrator shall be selected by the parties themselves. If the parties do
not agree on the third arbitrator within five (5) business days after the
expiration of such five (5) business day period, then either party, on behalf
of both, may request appointment of the third arbitrator by the Association
of South Bay Brokers. The three arbitrators shall decide the dispute, if it
has not been previously resolved, by following the procedures set forth in
PARAGRAPH 4.C.(vi)(c). Each party shall pay the fees and expenses of its
respective arbitrator and both shall share the fees and expenses of the third
arbitrator. Each party shall pay its own attorneys' fees and costs of
witnesses.
(c) The three arbitrators shall determine the fair market
rent in accordance with the following procedures. Each of Landlord's
arbitrator and Tenant's arbitrator shall state, in writing, his or her
determination of the fair market rent, supported by the reasons therefor, and
shall make counterpart copies for the other arbitrators. All of the
arbitrators shall arrange for a simultaneous exchange of the proposed
resolutions within ten (10) business days after appointment of the third
arbitrator. If any arbitrator fails to deliver his or her own determination
to the other arbitrators within such ten (10) business day period, then the
fair market rent shall equal the average of the resolutions submitted by the
other arbitrators. If all three (3) arbitrators deliver their determinations
to the other arbitrators within such ten (10) business day period, then the
two (2) closest determinations of
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the arbitrators shall be averaged, and the resulting quotient shall be the
fair market rent, and the Monthly Rent for the Extended Term shall equal one
hundred percent (100%) of such fair market rent; provided, however, that if
the determination of one (1) of the arbitrators (the "AVERAGE DETERMINATION")
is equal to the average of the determinations of the other two (2)
arbitrators, then the Average Determination shall be the fair market rent.
However, the arbitrators shall not attempt to reach a mutual agreement of the
fair market rent; each arbitrator shall independently arrive at his or her
proposed resolution.
(d) The arbitrators shall have the right to consult
experts and competent authorities for factual information or evidence
pertaining to a determination of fair market rent, but any such consultation
shall be made in the presence of both parties with full right on their part
to cross-examine. The arbitrators shall render the decision and award in
writing with counterpart copies to each party. The arbitrators shall have no
power to modify the provisions of this Lease. In the event of a failure,
refusal or inability of any arbitrator to act, his or her successor shall be
appointed by him or her, but in the case of the third arbitrator, his or her
successor shall be appointed in the same manner as that set forth herein with
respect to the appointment of the original third arbitrator.
(e) Notwithstanding anything to the contrary herein, if
the determination of fair market rent for the Premises for the Extended Term
shall be unacceptable to either party, either party may, by written notice to
the other party, given within ten (10) days of such determination by the
arbitrators, revoke Tenant's exercise of its Option to Extend, and any
advance rent paid by Tenant to Landlord hereunder shall be refunded, the
Lease shall terminate upon the expiration of the Term, and neither party
shall have any further liability to the other on account hereof.
5. RENT AND ADDITIONAL CHARGES.
A. MONTHLY RENT. Tenant shall pay to Landlord, in lawful money of
the United States, Monthly Rent as follows: commencing on the Commencement
Date, and continuing throughout the balance of the Term (subject to
adjustment pursuant to
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PARAGRAPH 5.B), the Monthly Rent shall equal One and 50/100ths Dollars
($1.50) multiplied by the number of square feet of Rentable Area situated
within the Premises, as determined by Landlord under PARAGRAPH 2. If
Landlord so determines, or assumes, that the Rentable Area of the Premises is
equal to Sixty Thousand (60,000) square feet, the initial Monthly Rent shall
be equal to Ninety Thousand Dollars ($90,000.00).
Monthly Rent shall be paid in advance, on the first day of each
calendar month during the Term, without abatement, deduction, claim, offset,
prior notice or demand. The sum of Ninety Thousand Dollars ($90,000.00),
representing an advance payment of Landlord's initial estimate of the Monthly
Rent for the Premises, shall be paid by Tenant to Landlord upon the execution
of this Lease by Landlord and Tenant. Additionally, Tenant shall pay, as and
with the Monthly Rent, the management fee described in PARAGRAPH 5.C.,
Tenant's share of Common Area Maintenance Costs pursuant to PARAGRAPH 5.D,
the Real Property Taxes and Impositions payable by Tenant pursuant to
PARAGRAPH 15, and the monthly cost of insurance premiums required pursuant to
PARAGRAPH 21.C.
B. ADJUSTMENTS TO MONTHLY RENT. The Monthly Rent shall be
increased, but not decreased, as of the first day of the month that is
thirteen (13) months from the Commencement Date and each and every
anniversary of such date occurring thereafter during the Term (including
without limitation the Extended Term) (each, an "ADJUSTMENT DATE") by the
greater of (i) the percentage increase in the Index from the previous
Adjustment Date (or, for the first Adjustment Date, from the Commencement
Date), up to a maximum of six percent (6%), or (ii) three and five-tenth
percent (3.5%). If, however, the last Adjustment Date occurs at any time
after the first day of a calendar month, the first Adjustment Date shall be
the first day of the immediately following calendar month. On each
Adjustment Date, the total aggregate amount of Monthly Rent then in effect
shall be multiplied by the greater of (x) the lesser of (A) a fraction, the
numerator of which is the Index published most recently before the applicable
Adjustment Date, and the denominator of which is the Index published most
recently before the prior Adjustment Date (or, in the case of the first
Adjustment Date, the Index published most recently before the Commencement
Date), or (B) one hundred six percent (106%), or
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(y) one hundred three and five-tenths percent (103.5%); and the corresponding
product shall be the Monthly Rent in effect until the next Adjustment Date.
In no event shall the Monthly Rent in effect after an Adjustment Date be less
than one hundred three and five-tenths percent (103.5%) of the Monthly Rent
in effect immediately prior to such Adjustment Date. If no Index is
published for either of the months set forth above, the Index for the next
preceding month shall be used.
C. MANAGEMENT FEE. Tenant shall pay to Landlord monthly, as
Additional Rent, a management fee equal to three percent (3%) of the then
Monthly Rent.
D. COMMON AREA MAINTENANCE COSTS.
(i) ESTIMATED PAYMENTS. Commencing on the Commencement Date
and continuing throughout the entire Term, Tenant shall pay Tenant's
Percentage Share of all Common Area Maintenance Costs paid or payable by
Landlord in each year; provided, however, that Tenant shall pay Tenant's
Building Share of those Common Area Maintenance Costs arising from Landlord's
performance of its obligations under PARAGRAPHS 17.A and Tenant's obligations
under PARAGRAPH 17.D. Before commencement of the Term and during December of
each calendar year or as soon thereafter as practicable, Landlord shall give
Tenant notice of its estimate of amounts payable under this PARAGRAPH 5.D.(i)
for the ensuing calendar year. Such notice shall show in reasonable detail
the basis on which the estimate was determined. On or before the first day
of each month during the ensuing calendar year, Tenant shall pay to Landlord
one-twelfth (1/12th) of such estimated amounts, provided that if such notice
is not given in December, Tenant shall continue to pay on the basis of the
prior year's estimate until the month after such notice is given. If at any
time or times it appears to Landlord, in its reasonable judgment, that the
amounts payable under this PARAGRAPH 5.D.(i) for the current calendar year
will vary from its then-current estimate by more than five percent (5%),
Landlord may, in its sole discretion, by notice to Tenant, showing in
reasonable detail the basis for such variance, revise its estimate for such
year, in which case subsequent payments by Tenant for such year shall be
based upon such revised estimate. Landlord's election not to give the notice
described in the foregoing sentence shall
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not affect Landlord's ability to charge Tenant for, nor Tenant's liability to
pay for, any shortfall in the estimated payments for such calendar year
previously made by Tenant, as set forth in PARAGRAPH 5.D.(ii).
(ii) ADJUSTMENT. Within one hundred twenty (120) days after
the close of each calendar year or as soon after such 120-day period as
reasonably practicable, Landlord shall deliver to Tenant a reasonably
detailed statement of Common Area Maintenance Costs for such calendar year,
certified by Landlord or its property manager, subject to Tenant's right to
audit as hereinafter provided. At that time, Landlord shall also deliver to
Tenant a statement, certified as correct by Landlord, of the adjustments to
be made pursuant to PARAGRAPH 5.D.(i) above. If Landlord's statement shows
that Tenant owes an amount that is less than the estimated payments for such
calendar year previously made by Tenant, Landlord shall refund such excess to
Tenant within thirty (30) days after delivery of the statement. If such
statement shows that Tenant owes an amount that is more than the estimated
payments for such calendar year previously made by Tenant, Tenant shall pay
the deficiency to Landlord within thirty (30) days after delivery of the
statement.
(iii) LAST YEAR. If this Lease shall terminate on a day other
than the last day of a calendar year, the adjustment in Rent applicable to
the calendar year in which such termination shall occur shall be prorated on
the basis which the number of days from the commencement of such calendar
year to and including such termination date bears to three hundred sixty
(360). The termination of this Lease shall not affect the obligations of
Landlord and Tenant pursuant to PARAGRAPH 5.D.(ii) to be performed after such
termination.
(iv) AUDIT. Within one hundred eighty (180) days after receipt
of Landlord's statement of Common Area Maintenance Costs as provided in
PARAGRAPH 5.D.(ii), Tenant or its designee, on not less than five (5) days'
prior written notice to Landlord, shall have the right to, at Tenant's sole
cost and expense, audit, examine and copy Landlord's books and records with
respect to the Common Area Maintenance Costs for the year for which the
Landlord's statement pertains. If Tenant fails to give such written notice
to Landlord within such 180-day period, Tenant
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shall be deemed to have forever waived its right to audit the Common Area
Maintenance Costs for the year for which the Landlord's statement pertains.
Landlord shall cooperate with Tenant in any such examination of its books and
records. Tenant shall have the right to audit at Landlord's local offices,
at Tenant's expense, Landlord's accounts and records relating to Common Area
Maintenance Costs and Impositions. If such audit reveals to the reasonable
satisfaction of Landlord and Tenant that Landlord has overcharged Tenant, the
amount overcharged shall be paid to Tenant within thirty (30) days after the
audit is concluded. If such audit reveals to the reasonable satisfaction of
Landlord and Tenant that Landlord has undercharged Tenant, the amount
undercharged shall be paid to Landlord within thirty (30) days after the
audit is concluded. In addition, if the audit reveals to the reasonable
satisfaction of Landlord and Tenant that Landlord's statement exceeds the
actual Common Area Maintenance Costs and Impositions which should have been
charged to Tenant by more than seven percent (7%), the cost of the audit
shall be paid by Landlord. If Tenant retains or utilizes a third party to
perform such an audit of the Common Area Maintenance Costs and Impositions,
Tenant shall not compensate such third party on anything other than an hourly
basis.
E. ADDITIONAL RENT. All monies required to be paid by Tenant under
this Lease, including, without limitation, the Tenant Improvement costs
pursuant to EXHIBIT B, the management fee described in PARAGRAPH 5.D,
Tenant's share of Common Area Maintenance Costs pursuant to PARAGRAPH 5.D,
Real Property Taxes and Impositions pursuant to PARAGRAPH 15, and the monthly
cost of insurance premiums required pursuant to PARAGRAPH 21.C, shall be
deemed Additional Rent.
F. PRORATIONS. If the Commencement Date is not the first (1st) day
of a month, or if the termination date of this Lease is not the last day of a
month, a prorated installment of Monthly Rent based on a 30-day month shall
be paid for the fractional month during which such date occurs or the Lease
terminates.
G. INTEREST. Any amount of Rent or other charges provided for
under this Lease due and payable to Landlord which
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is not paid within five (5) days after written notice from Landlord shall
bear interest at the Interest Rate from (i) the date such Rent is due until
such Rent is paid, or (ii) the date that is ten (10) days after Tenant
receives written notice from Landlord that any other charge provided for
under this Lease (other than Rent) is due and payable, until such other
charge is paid.
6. LATE PAYMENT CHARGES.
Tenant acknowledges that late payment by Tenant to Landlord of Rent
and other charges provided for under this Lease will cause Landlord to incur
costs not contemplated by this Lease, the exact amount of such costs being
extremely difficult or impracticable to fix. Therefore, if any installment
of Rent or any other charge due from Tenant is not received by Landlord
within five (5) days after Landlord gives Tenant notice that such Rent or
other charge is due, Tenant shall pay to Landlord an additional sum equal to
seven percent (7%) of the amount overdue as a late charge for every month or
portion thereof that the Rent or other charges remain unpaid. The parties
agree that this late charge represents a fair and reasonable estimate of the
costs that Landlord will incur by reason of the late payment by Tenant.
INITIALS:
/s/ illegible /s/ illegible
------------------------ ------------------------
Landlord Tenant
7. SECURITY DEPOSIT.
A. DEPOSIT REQUIRED. Tenant shall deposit with Landlord upon the
execution of this Lease by Landlord and Tenant, the sum of Seven Hundred
Ninety-Three Thousand Eight Hundred Dollars ($793,800.00) (i.e., an amount
equal to nine (9) installments of Monthly Rent) as the "SECURITY DEPOSIT"
for the full and faithful performance of every provision of this Lease to be
performed by Tenant. At Tenant's option, the Security Deposit may be in the
form of an irrevocable standby letter of credit ("L-C"). Landlord shall not
be required to segregate the
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Security Deposit from Landlord's general funds; Landlord's obligations with
respect to the Security Deposit shall be those of a debtor and not a trustee,
and Tenant shall not be entitled to any interest on the Security Deposit.
Invocation by Landlord of its rights hereunder shall not constitute a waiver
of nor relieve Tenant from any liability or obligation for any default by
Tenant under this Lease.
(i) REDUCTION OR REPLACEMENT. So long as Tenant has not
committed any default under this Lease, which default is continuing after
notice from Landlord and the expiration of any applicable grace period
provided for in this Lease, then (a) if Tenant can demonstrate to the
reasonable satisfaction of Landlord that Tenant has maintained a Fixed Charge
Ratio of at least 1.15 to 1 for a period of two (2) consecutive fiscal years
at any time after the Commencement Date, then Tenant may elect to reduce the
Security Deposit to a sum equal to six (6) installments of the then-current
amount of Monthly Rent; (b) if Tenant can demonstrate to the reasonable
satisfaction of Landlord that Tenant has maintained a Fixed Charge Ratio of
at least 1.15 to 1 for a period of three (3) consecutive fiscal years at any
time after the Commencement Date, then Tenant may elect to reduce the
Security Deposit to a sum equal to four (4) installments of the then-current
amount of Monthly Rent; and (c) if Tenant can demonstrate to the reasonable
satisfaction of Landlord that Tenant has maintained a Fixed Charge Ratio of
at least 1.15 to 1 for a period of four (4) consecutive fiscal years at any
time after the Commencement Date, then Tenant may elect to reduce the
Security Deposit to a sum equal to two (2) installments of the then-current
amount of Monthly Rent; provided, however, that in no event shall Tenant be
entitled to reduce the Security Deposit below an amount equal to two (2)
installments of the then-current amount of Monthly Rent. For the purposes of
this PARAGRAPH 7, in order for Tenant to demonstrate that it has maintained
the required Fixed Charge Ratio for the fiscal year or years in question,
Tenant must at a minimum deliver to Landlord an audited financial statement
of Tenant, showing that Tenant has maintained the required Fixed Charge Ratio
for the fiscal year or years in question.
If Tenant is entitled to and does elect to reduce the amount of the
Security Deposit pursuant to this PARAGRAPH
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7.A.(i), and Tenant delivers to Landlord written notice of its election to so
reduce the amount of the Security Deposit and the financial statement
described in the foregoing grammatical paragraph, then either (x) if the
Security Deposit is in the form of cash, Landlord shall pay to Tenant the
excess amount of the Security Deposit, without interest, within thirty (30)
days after Landlord's receipt of such notice and statement; or (y) if the
Security Deposit is in the form of an L-C, then Tenant may, not less than ten
(10) days after Landlord's receipt of such notice and statement, replace the
L-C with an L-C in an amount equal to the reduced amount of the Security
Deposit.
(ii) CONSEQUENCES OF DEFAULT. If Tenant defaults with respect
to any provision of this Lease, after notice from Landlord and the expiration
of any applicable cure or grace periods expressly provided for in this Lease,
Landlord may apply all or any part of the Security Deposit for the payment of
any Rent or other sum in default, the repair of such damage to the Premises
or the 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 to the full extent permitted by law. If any portion of a cash
Security Deposit is so applied, or any portion of an L-C posted as the
Security Deposit, if applicable, is drawn upon, by Landlord for such
purposes, Tenant shall either, within ten (10) days after written demand
therefor, deposit cash with Landlord in an amount sufficient to restore the
Security Deposit to its original amount or deposit a replacement L-C with
Landlord in the amount of the original L-C. The Security Deposit or any
balance thereof remaining after Landlord cures any default of Tenant
hereunder shall be returned to Tenant within thirty (30) days of termination
of the Lease.
(iii) FORM OF L-C. If at any time Tenant elects to deposit an
L-C as the Security Deposit, the L-C shall be issued by a bank reasonably
acceptable to Landlord, shall be issued for a term of at least twelve (12)
months and shall be in a form and with such content acceptable to Landlord in
its sole discretion. Tenant shall either replace the expiring L-C with an
L-C in an amount equal to the original L-C or renew the expiring L-C, in any
event no later than thirty (30) days prior to the
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expiration of the term of the L-C then in effect. If Tenant fails to deposit
a replacement L-C or renew the expiring L-C, Landlord shall have the right to
draw upon the expiring L-C for the full amount thereof and hold the same as
the Security Deposit; provided, however, that if Tenant provides a
replacement L-C that meets the requirements of this PARAGRAPH 7.A, then
Landlord shall return to Tenant promptly in cash that amount of the L-C that
had been drawn upon by Landlord. Drawing upon the L-C shall be conditioned
upon notice to Tenant of Landlord's intention to draw upon the L-C and the
presentation to the issuer of the L-C of a certified statement executed by a
general partner of Landlord that (i) Tenant is in default under the Lease,
which default is continuing after notice to Tenant and the expiration of any
applicable grace period provided for herein, and Landlord is exercising its
right to draw upon so much of the L-C as is necessary to cure Tenant's
default, or (ii) Tenant has not renewed or replaced an expiring L-C as
required by this Lease and Landlord is authorized to draw upon the L-C prior
to its expiration. The L-C shall not be mortgaged, assigned or encumbered in
any manner whatsoever by Tenant without the prior written consent of
Landlord. The use, application or retention of the L-C, or any portion
thereof, by Landlord shall not prevent Landlord from exercising any other
right or remedy provided by this Lease or by law, it being intended that
Landlord shall not first be required to proceed against the L-C, and such
use, application or retention shall not operate as a limitation on any
recovery to which Landlord may otherwise be entitled.
8. HOLDING OVER.
If Tenant remains in possession of all or any part of the Premises
after the expiration of the Term, with the express or implied consent of
Landlord, such tenancy shall be at sufferance only, and shall not constitute
a renewal or extension for any further term. If Tenant remains in possession
after the expiration of the Term, without Landlord's consent, Rent shall be
payable at a rental equal to one hundred fifty percent (150%) of the Monthly
Rent payable during the last month of the Term (which rental shall be due and
payable at the same time as Monthly Rent is due under this Lease), and any
other sums due under this Lease shall be payable in the amount and at the
times specified in this Lease. If Tenant remains in possession after the
expiration of
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the Term with Landlord's consent, Rent shall be payable at a rental equal to
one hundred percent (100%) of the Monthly Rent payable during the last month
of the Term (which rental shall be due and payable at the same time as
Monthly Rent is due under this Lease), and any other sums due under this
Lease shall be payable in the amount and at the times specified in this
Lease. Any such holdover tenancy (with or without Landlord's consent) shall
be subject to every other term, condition, and covenant contained herein;
provided, however, that Landlord's obligations under the Work Letter shall
not be of any force or effect during any such holdover tenancy.
9. TENANT IMPROVEMENTS.
Landlord agrees to construct the Tenant Improvements pursuant to the
terms of EXHIBIT B.
10. CONDITION OF PREMISES.
A. CAPITAL IMPROVEMENTS. Prior to the Commencement Date, Landlord
shall complete the Capital Improvements to the Premises in accordance with
the terms of EXHIBIT B. Except for its obligation to perform the Capital
Improvements and the Tenant Improvements as set forth in this Lease and the
Work Letter, Landlord shall have no obligation whatsoever to do any work or
perform any improvements whatsoever to any portion of the Premises or the
Building.
B. ACCEPTANCE OF PREMISES. Within ten (10) days after completion
of the Tenant Improvements, Tenant shall conduct a walk-through inspection of
the Premises with Landlord and complete a punch list of items needing
additional work. Other than the items specified in the punch list, if any,
and latent defects in the Capital Improvements that could not have been
discovered by a reasonably thorough visual inspection of the Capital
Improvements, and subject to Landlord's representations and warranties
described below, by taking possession of the Premises, Tenant shall be deemed
to have accepted the Premises in good, clean and completed condition and
repair, subject to all applicable laws, codes and ordinances. Any damage to
the Premises caused by Tenant's move-in shall be repaired or corrected by
Tenant, at its sole cost and expense. Tenant
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acknowledges that neither Landlord nor Landlord's Agents have made any
representations or warranties as to the suitability or fitness of the
Premises for the conduct of Tenant's business or for any other purpose, nor
has Landlord or Landlord's Agents agreed to undertake any Alterations or
construct any Improvements to the Premises except as expressly provided in
this Lease. If Tenant fails to submit a punch-list to Landlord within such
10-day period, it shall be deemed that there are no Improvement items needing
additional work or repair. Landlord's contractor shall complete all
reasonable punch-list items within thirty (30) days after the walk-through
inspection; provided, however, that if such punch-list items cannot
reasonably be completed within the 30-day period, Landlord's contractor shall
commence such performance within the 30-day period and diligently thereafter
prosecute the same to completion. Upon completion of such punch-list items,
Tenant shall approve such completed items in writing to Landlord. If Tenant
fails to approve such items within fourteen (14) days of completion, such
items shall be deemed approved by Tenant.
C. LANDLORD'S REPRESENTATIONS AND WARRANTIES. Landlord represents
and warrants (the "Condition Warranties") to Tenant that as of the
Commencement Date the following portions of the Building shall be in good
condition (i.e. in an operable (but not new) state of repair, free of defects
that would adversely affect Tenant's operation of its business in the
Premises): (i) the HVAC system serving the Premises, (ii) the roof of the
Building, (iii) the main electrical supply to a main distribution point in
the Building, (iv) the working sanitary sewer stub to the Building, and (v)
water service to the Building. The Condition Warranties shall terminate on a
date one hundred eighty (180) days after the Commencement Date, except to the
extent that Tenant has delivered to Landlord within such 180-day period a
written notice specifying in detail any defaults by Landlord under the
Condition Warranties (a "Violation Notice"), and Landlord shall thereafter
have absolutely no liability to Tenant for the inaccuracy of any Condition
Warranty, except to the extent set forth in a Violation Notice. Landlord's
liability for the correction of any defects described in a Violation Notice
shall be subject to Landlord's reasonable right to dispute the claims set
forth in any Violation Notice. Landlord's sole liability with respect to any
breach of any Condition Warranty
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that is properly set forth in a timely delivered Violation Notice shall be to
promptly correct such defect; Landlord shall have no liability for any other
loss, cost, damage, expense or lost profit in connection with such breach,
and Tenant shall have no right to any abatement or offset of Rent in
connection with such breach.
D. LANDLORD'S ADDITIONAL REPRESENTATION AND WARRANTY. Landlord
represents and warrants (the "Environmental Warranty") to Tenant that to the
best of Landlord's knowledge, as of the Commencement Date no
asbestos-containing materials (other than asbestos-containing materials that
a fully encapsulated) shall be present in the Premises. The parties
acknowledge and agree that (i) there are two (2) sump pump areas located in
proximity to the Building (the "Sump Areas"), (ii) the San Francisco Bay
Regional Water Quality Control Board has issued a letter to Ampex Systems
Corporation dated August 6, 1996, a copy of which is attached hereto as
EXHIBIT E, (iii) as between Landlord and Tenant, Landlord has no further
obligation to clean up or remediate the Sump Areas. Landlord's sole liability
with respect to any breach of the Environmental Warranty shall be to promptly
correct such defect; Landlord shall have no liability for any other loss,
cost, damage, expense or lost profit in connection with such breach, and
Tenant shall have no right to any abatement or offset of Rent in connection
with such breach.
11. USE OF THE PREMISES AND COMMON AREA.
A. TENANT'S USE. Tenant shall use the Premises only for general
office, administration, research and development, manufacturing, warehousing
and any other legal use related to such activities and consistent with any
CC&Rs. Tenant shall not use the Premises or suffer or permit anything to be
done in or about the Premises which will in any way conflict with any law,
statute, zoning restriction, ordinance or governmental law, rule, regulation
or requirement of public authorities now in force or which may hereafter be
in force, relating to or affecting the condition, use or occupancy of the
Premises. Tenant shall not commit any public or private nuisance or any
other act or thing which might or would disturb the quiet enjoyment of any
other tenant of Landlord or any occupant of nearby property. Tenant shall
place no loads upon the floors, walls or ceilings in excess
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of the maximum designed load determined by a licensed structural engineer or
which endanger the structure; nor place any harmful liquids in the drainage
systems; nor dump or store waste materials or refuse or allow waste materials
or refuse to remain outside the Building proper, except in the enclosed trash
areas provided. Tenant shall not store or permit to be stored or otherwise
placed any other material of any nature whatsoever outside the Building,
except on a temporary basis.
B. HAZARDOUS MATERIALS.
(i) HAZARDOUS MATERIALS DEFINED. As used herein, the term
"HAZARDOUS MATERIALS" shall mean any wastes, materials or substances (whether
in the form of liquids, solids or gases, and whether or not air-borne), which
are or are deemed to be (a) pollutants or contaminants, or which are or are
deemed to be hazardous, toxic, ignitable, reactive, corrosive, dangerous,
harmful or injurious, or which present a risk to public health or to the
environment, or which are or may become regulated by or under the authority
of any applicable local, state or federal laws, judgments, ordinances,
orders, rules, regulations, codes or other governmental restrictions,
guidelines or requirements, any amendments or successor(s) thereto,
replacements thereof or publications promulgated pursuant thereto, including,
without limitation, any such items or substances which are or may become
regulated by any of the Environmental Laws (as hereinafter defined); (b)
listed as a chemical known to the State of California to cause cancer or
reproductive toxicity pursuant to Section 25249.8 of the California Health
and Safety Code, Division 20, Chapter 6.6 (Safe Drinking Water and Toxic
Enforcement Act of 1986); or (c) a pesticide, petroleum, including crude oil
or any fraction thereof, asbestos or any asbestos-containing material, a
polychlorinated biphenyl, radioactive material, or urea formaldehyde.
(ii) ENVIRONMENTAL LAWS DEFINED. In addition to the laws
referred to in PARAGRAPH 11.B.(i) above, the term "ENVIRONMENTAL LAWS" shall
be deemed to include, without limitation, 33 U.S.C. Section 1251 ET SEQ., 42
U.S.C. Section 6901 ET SEQ., 42 U.S.C. Section 7401 ET SEQ., 42 U.S.C.
Section 9601 ET SEQ., and California Health and Safety Code Section 25100 ET
SEQ., and 25300 ET SEQ., California Water Code, Section 13020
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ET SEQ., or any successor(s) thereto, all local, state and federal laws,
judgments, ordinances, orders, rules, regulations, codes and other
governmental restrictions, guidelines and requirements, any amendments and
successors thereto, replacements thereof and publications promulgated
pursuant thereto, which deal with or otherwise in any manner relate to, air
or water quality, air emissions, soil or ground conditions or other
environmental matters of any kind.
(iii) USE OF HAZARDOUS MATERIALS. Tenant agrees that during
the Term of this Lease, Tenant shall not use, or permit the use of, nor
store, generate, treat, manufacture or dispose of Hazardous Materials on,
from or under the Premises (individually and collectively, "HAZARDOUS USE")
except to the extent that, and in accordance with such conditions as,
Landlord may have previously approved in writing in its sole and absolute
discretion. Notwithstanding the foregoing, Tenant shall be entitled to use
and store only those Hazardous Materials which are (a) set forth in a list
prepared by Tenant and approved in writing by Landlord, which shall be deemed
given with respect to the Approved Hazardous Materials (hereinafter defined),
(b) necessary for Tenant's business, but then only in the amounts and for the
purposes previously disclosed in writing to and approved in writing by
Landlord, and (c) in full compliance with Environmental Laws, and all
judicial and administrative decisions pertaining thereto. All Hazardous
Materials approved in writing by Landlord as provided in the preceding
sentence shall collectively be referred to as the "APPROVED HAZARDOUS
MATERIALS". Within thirty (30) days after request by Landlord, Tenant shall
deliver to Landlord a list of the Approved Hazardous Materials. Tenant shall
not be entitled to install any tanks under, on or about the Premises for the
storage of Hazardous Materials without the express written consent of
Landlord, which may be given or withheld in Landlord's sole discretion. For
the purposes of this PARAGRAPH 11.B.(iii), the term Hazardous Use shall
include Hazardous Use(s) on, from or under the Premises by Tenant, any
Subtenant occupying all or any portion of the Premises during the Term, or
any of their directors, officers, employees, shareholders, partners,
invitees, agents, contractors or occupants (collectively, "TENANT'S
PARTIES"), whether known or unknown to Tenant, occurring during the Term of
this Lease. The term "TENANT'S PARTIES" shall not include any tenants of the
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Project other than Tenant, except that the term "TENANT'S PARTIES" shall
include any Subtenant occupying all or any portion of the Premises during the
Term. Notwithstanding anything herein to the contrary, Tenant may use normal
amounts of cleaning supplies and office products customarily used by office
tenants without Landlord's prior consent thereto.
(iv) HAZARDOUS MATERIALS REPORT; WHEN REQUIRED. Tenant shall
submit to Landlord a written report with respect to Hazardous Materials
("REPORT") in the form prescribed in PARAGRAPH 11.B.(v) below on the
following dates:
(a) At any time within ten (10) days after written
request by Landlord, and
(b) At any time when there has been a violation of any
Environmental Law, or in connection with any proposed request for Landlord's
consent to any change in the list of Approved Hazardous Materials or for an
increase in the intensity of usage or storage of such Approved Hazardous
Materials.
(v) HAZARDOUS MATERIALS REPORT; CONTENTS. The Report shall
contain, without limitation, the following information:
(a) Whether on the date of the Report and (if applicable)
during the period since the last Report there has been any Hazardous Use on,
from or under the Premises, other than the use of Approved Hazardous
Materials.
(b) If there was such Hazardous Use, the exact identity
of the Hazardous Materials (other than the Approved Hazardous Materials), the
dates upon which such materials were brought upon the Premises, the dates
upon which such Hazardous Materials were removed therefrom, and the quantity,
location, use and purpose thereof.
(c) If there was such Hazardous Use, any governmental
permits maintained by Tenant with respect to such Hazardous Materials, the
issuing agency, original date of issue, renewal dates (if any) and expiration
date. Copies of any such
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permits and applications therefor shall be attached.
(d) If there was such Hazardous Use, any governmental
reporting or inspection requirements with respect to such Hazardous
Materials, the governmental agency to which reports are made and/or which
conducts inspections, and the dates of all such reports and/or inspections
(if applicable) since the last Report. Copies of any such Reports shall be
attached.
(e) If there was such Hazardous Use, identification of
any operation or business plan prepared for any government agency with
respect to Hazardous Use.
(f) Any liability insurance carried by Tenant with
respect to Hazardous Materials, if any, the insurer, policy number, date of
issue, coverage amounts, and date of expiration. Copies of any such policies
or certificates of coverage shall be attached.
(g) Any notices of violation of Environmental Laws,
written or oral, received by Tenant from any governmental agency since the
last Report, the date, name of agency, and description of violation. Copies
of any such written notices shall be attached.
(h) Any knowledge, information or communication which
Tenant has acquired or received relating to (x) any enforcement, cleanup,
removal or other governmental or regulatory action threatened or commenced
against Tenant or with respect to the Premises pursuant to any Environmental
Laws; (y) any claim made or threatened by any person or entity against Tenant
or the Premises on account of any alleged loss or injury claimed to result
from any alleged Hazardous Use on or about the Premises; or (z) any report,
notice or complaint made to or filed with any governmental agency concerning
any Hazardous Use on or about the Premises. The Report shall be accompanied
by copies of any such claim, report, complaint, notice, warning or other
communication that is in the possession of or is available to Tenant.
(i) Such other pertinent information or documents as are
reasonably requested by Landlord in writing.
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(vi) RELEASE OF HAZARDOUS MATERIALS; NOTIFICATION AND CLEANUP.
(a) At any time during the Term, if Tenant knows or
believes that any release of any Hazardous Materials has come or will come to
be located upon, about or beneath the Premises, then Tenant shall
immediately, either prior to the release or following the discovery thereof
by Tenant, give verbal and follow-up written notice of that condition to
Landlord.
(b) At its sole cost and expense, Tenant covenants to
investigate, clean up and otherwise remediate any release of Hazardous
Materials which were caused or created by Tenant or any of Tenant's Parties.
Such investigation, clean-up and remediation shall be performed only after
Tenant has obtained, if practicable, Landlord's written consent, which shall
not be unreasonably withheld; provided, however, that Tenant shall be
entitled to respond immediately to an emergency without first obtaining
Landlord's written consent. All clean-up and remediation shall be done in
compliance with Environmental Laws and to the reasonable satisfaction of
Landlord; provided, however, that Landlord shall not require Tenant to
perform any clean-up or remediation work in excess of that work required to
return the property affected by such release of Hazardous Materials to the
condition it was in prior to the date of such release.
(c) Notwithstanding the foregoing, Landlord shall have
the right, but not the obligation, in Landlord's sole and absolute
discretion, exercisable by written notice to Tenant, to undertake within or
outside the Premises all or any portion of any reasonable investigation,
clean-up or remediation with respect to any Hazardous Use of such Hazardous
Materials by Tenant or any of Tenant's Parties (or, once having undertaken
any of such work, to cease same, in which case Tenant shall perform the
work), all at Tenant's sole cost and expense, which shall be paid by Tenant
as Additional Rent within ten (10) days after receipt of written request
therefor by Landlord (and which Landlord may require to be paid prior to
commencement of any work by Landlord); provided, however, that Tenant's
obligation to pay for such work shall only be applicable if Tenant fails to
perform its obligations under this PARAGRAPH 11 (including without
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limitation the obligations described in PARAGRAPH 11.B.(vi)(b)). No such
work by Landlord shall create any liability on the part of Landlord to Tenant
or any other party in connection with such Hazardous Materials by Tenant or
any of Tenant's Parties or constitute an admission by Landlord of any
responsibility with respect to such Hazardous Materials.
(d) It is the express intention of the parties hereto
that Tenant shall be liable under this PARAGRAPH 11.B.(vi) for any and all
conditions covered hereby which were or are caused or created by Tenant or
any of Tenant's Parties, whether occurring (x) on or after the Commencement
Date, or (y) prior to the Commencement Date (to the extent that such
condition or conditions occurring prior to the Commencement Date arise from
Tenant's early occupancy of the Premises pursuant to PARAGRAPH 40 below).
Tenant shall not enter into any settlement agreement, consent decree or other
compromise with respect to any claims relating to any Hazardous Materials in
any way connected to the Premises without first (A) notifying Landlord of
Tenant's intention to do so and affording Landlord the opportunity to
participate in any such proceedings, and (B) obtaining Landlord's written
consent, which shall not be unreasonably withheld.
(vii) INSPECTION AND TESTING BY LANDLORD. Landlord shall have
the right at all times during the Term of this Lease to (a) inspect the
Premises, as well as such of Tenant's books and records pertaining to the
Premises and the conduct of Tenant's business therein, and to (b) conduct
tests and investigations to determine whether Tenant is in compliance with
the provisions of this PARAGRAPH 11.B. Except in case of emergency, Landlord
shall give reasonable notice to Tenant before conducting any inspections,
tests, or investigations in accordance with PARAGRAPH 19, shall provide
Tenant with a work plan describing any testing that shall be performed at the
Premises, and shall use reasonable efforts to minimize interference with the
conduct of Tenant's business at the Premises caused by any such inspections,
tests, or investigations. The cost of all such inspections, tests and
investigations shall be borne by Tenant if Landlord reasonably concludes on
the basis of such investigation that Tenant has failed to comply with its
obligations under this PARAGRAPH 11.B. Neither any action nor inaction on
the part of Landlord pursuant
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to this PARAGRAPH 11.B.(vii) shall be deemed in any way to release Tenant
from, or in any way modify or alter, Tenant's responsibilities, obligations,
and liabilities incurred pursuant to PARAGRAPH 11.B hereof.
(viii) INDEMNITY. Tenant shall indemnify, defend, protect,
hold harmless, and, at Landlord's option (with such attorneys as Landlord may
approve in advance and in writing), defend Landlord, Landlord's Agents, and
Landlord's officers, directors, shareholders, partners, employees,
contractors, property managers, agents and mortgagees and other lien holders,
from and against any and all Losses (as defined below), whenever such Losses
arise, arising from or related to: (a) any violation or alleged violation by
Tenant or any of Tenant's Parties of any of the requirements, ordinances,
statutes, regulations or other laws referred to in this PARAGRAPH 11.B,
including, without limitation, the Environmental Laws, whether such violation
or alleged violation occurred prior to (but only to the extent that such
violation or alleged violation arises from Tenant's early occupancy of the
Premises pursuant to PARAGRAPH 40 below), on, or after the Commencement Date;
(b) any breach of the provisions of this PARAGRAPH 11.B by Tenant or any of
Tenant's Parties; or (c) any Hazardous Use on, about or from the Premises by
Tenant or any of Tenant's Parties of any Hazardous Materials (whether or not
approved by Landlord under this Lease), whether such Hazardous Use occurred
prior to, on, or after the Commencement Date. The term "LOSSES" shall mean
all claims, demands, expenses, actions, judgments, damages (whether
consequential, direct or indirect, known or unknown, foreseen or unforeseen),
penalties, fines, liabilities, losses of every kind and nature (including,
without limitation, property damage, diminution in value of Landlord's
interest in the Premises, damages for the loss of restriction on use of any
space or amenity within the Premises, damages arising from any adverse impact
on marketing space in the Premises, sums paid in settlement of claims and any
costs and expenses associated with injury, illness or death to or of any
person), suits, administrative proceedings, costs and fees, including, but
not limited to, reasonable attorneys' and consultants' fees and expenses, and
the costs of cleanup, remediation, removal and restoration, that are in any
way related to any matter covered by the foregoing indemnity.
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(ix) SURVIVAL. The provisions of this PARAGRAPH 11.B shall
survive the expiration or earlier termination of this Lease.
C. SPECIAL PROVISIONS RELATING TO THE AMERICANS WITH DISABILITIES
ACT OF 1990.
(i) ALLOCATION OF RESPONSIBILITY TO LANDLORD. As between
Landlord and Tenant, Landlord shall be responsible for assuring that the
Common Area owned by Landlord and the exterior of the Building comply with
the requirements of Title III of the Americans with Disabilities Act of 1990
(42 U.S.C. 12181, et seq., The Provisions Governing Public Accommodations and
Services Operated by Private Entities), and all regulations promulgated
thereunder, and all amendments, revisions or modifications thereto now or
hereafter adopted or in effect in connection therewith (hereinafter
collectively referred to as the "ADA"), and to take such actions and make
such alterations and improvements as are necessary for such compliance;
provided, however, that to the extent such requirements arise from the
construction of any Alterations to the Premises made by or on behalf of
Tenant, then as between Landlord and Tenant, Tenant shall be responsible that
the Common Area complies with the requirements of the ADA, and to take such
actions and make such alterations and improvements as are necessary for such
compliance.
(ii) ALLOCATION OF RESPONSIBILITY TO TENANT. Except as
expressly provided in the Work Letter, as between Landlord and Tenant,
Tenant, at its sole cost and expense, shall be responsible for assuring that
the Premises (and all modifications made by Tenant of access to the Premises
from the street), and all alterations and improvements in the Premises
(including without limitation the Tenant Improvements), and Tenant's use and
occupancy of the Premises, and Tenant's performance of its obligations under
this Lease, comply with the requirements of the ADA, and to take such actions
and make such alterations and improvements as are necessary for such
compliance; provided, however, that Tenant shall not make any such
alterations or improvements except upon Landlord's prior written consent
(which shall not be unreasonably withheld) pursuant to the terms and
conditions of this Lease. If Tenant
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fails diligently to take such actions or make such alterations or
improvements as are necessary for such compliance, Landlord may, but shall
not be obligated to, take such actions and make such alterations and
improvements and may recover all of the costs and expenses of such actions,
alterations and improvements from Tenant as Additional Rent. Tenant shall be
entitled to utilize the Tenant Improvements Allowance to pay for the cost of
any improvements required by ADA that are triggered by the construction of
the Tenant Improvements.
(iii) GENERAL. Notwithstanding anything in this Lease
contained to the contrary, no act or omission of either party, including any
approval, consent or acceptance by it or its agents, employees or other
representatives, shall be deemed an agreement, acknowledgment, warranty, or
other representation by it that the other party has complied with the ADA as
provided under PARAGRAPHS 11.C.(i) or 11.C.(ii) or that any action,
alteration or improvement by it complies or will comply with the ADA as
provided under PARAGRAPHS 11.C.(i) or 11.C.(ii) or constitutes a waiver by it
of the other party's obligations to comply with the ADA under PARAGRAPHS
11.C.(i) or 11.C.(ii) of this Lease or otherwise. Any failure of either
party to comply with its obligations of the ADA under PARAGRAPHS 11.C.(i) or
11.C.(ii) shall not relieve such party from any obligations under this Lease
or in the case of Landlord's failure to comply under PARAGRAPH 11.C.(i),
constitute or be construed as a constructive or other eviction of Tenant or
disturbance of Tenant's use and possession of the Premises.
D. USE AND MAINTENANCE OF COMMON AREA. Tenant and its employees
and invitees shall have the non-exclusive right to use the Common Area in
common with other persons during the Term of this Lease, subject to the CC&Rs
and such reasonable rules and regulations as may from time to time be deemed
necessary or advisable in Landlord's reasonable discretion for the proper and
efficient operation and maintenance of the Common Area. Such rules and
regulations may include, among other things, the hours during which the
Common Area shall be open for use. Landlord shall maintain and operate the
Common Area from time to time owned by Landlord in good condition, provided
that any damage thereto, other than normal wear and tear, occasioned by the
negligence of Tenant or its employees or invitees shall be paid
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by Tenant upon demand by Landlord.
12. QUIET ENJOYMENT.
Landlord covenants that Tenant, upon performing the terms,
conditions and covenants of this Lease, shall have quiet and peaceful
possession of the Premises as against any person claiming the same by,
through or under Landlord.
13. ALTERATIONS.
A. ALTERATION RIGHTS. After the Commencement Date, Tenant shall
not make or permit any Alterations in, on or about the Premises, without the
prior written consent of Landlord, and according to plans and specifications
approved in writing by Landlord, which consent shall not be unreasonably
withheld. Notwithstanding the foregoing Tenant shall not, without the prior
written consent of Landlord, make any:
(i) Alterations to the exterior of the Building;
(ii) Alterations to the roof of the Building; and
(iii) Alterations visible from outside the Building, to which
Landlord may withhold Landlord's consent on wholly aesthetic grounds.
Notwithstanding anything to the contrary herein, Tenant may make alterations
to the Premises without Landlord's prior consent (but with notice to
Landlord) provided the same do not cost in excess of Twenty-Five Thousand
Dollars ($25,000) in each instance (and that Tenant has not performed
alterations to the Premises during any period of twelve (12) consecutive
months that in the aggregate cost in excess of Seventy-Five Thousand Dollars
($75,000)), are not structural in nature, do not affect Building systems or
the exterior of or the roof of the Building, and are not visible from the
outside of the Building.
B. PERFORMANCE OF ALTERATIONS. All Alterations shall be installed
at Tenant's sole expense, in compliance with all applicable laws, by a
licensed contractor, shall be done in a good and workmanlike manner
conforming in quality and design with
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the Premises existing as of the Commencement Date, and shall not diminish the
value of either the Building or the Premises. All Alterations made by Tenant
shall be and become the property of Landlord upon installation and shall not
be deemed Tenant's Personal Property, and Tenant shall not remove any
Alterations from the Premises unless Tenant has first obtained Landlord's
written consent to such removal. Landlord may require Tenant to remove, at
Tenant's expense, any Alterations from the Premises at the expiration or
earlier termination of this Lease; provided, however, that at the time any
Alterations are constructed, Tenant shall have the right to request
Landlord's written approval (which shall not be unreasonably withheld or
delayed) that Landlord will not require the removal of such Alterations at
the expiration or earlier termination of this Lease. Notwithstanding any
other provision of this Lease, Tenant shall be solely responsible for the
maintenance and repair of any and all Alterations made by it to the Premises.
Tenant shall give Landlord written notice of Tenant's intention to perform
work on the Premises at least ten (10) days prior to the commencement of such
work to enable Landlord to post and record a Notice of Nonresponsibility or
other notice deemed proper before the commencement of any such work.
Notwithstanding anything to the contrary contained herein, Tenant shall not
be required to remove (i) any of the initial Tenant Improvements constructed
by or on behalf of Tenant, and (ii) any alterations, additions or
improvements for which Tenant has obtained Landlord's consent, but only if at
the time Tenant requested Landlord's consent thereto, Tenant gave Landlord a
written request that Landlord identify in writing which, if any, of Tenant's
alterations, additions or improvements must in Landlord's sole discretion be
removed upon the expiration of the Term, and Landlord did not notify Tenant
within twenty (20) days after Landlord's receipt of such notice that such
alterations, additions or improvements must be removed upon the expiration of
the Term.
14. SURRENDER OF THE PREMISES.
Upon the expiration or earlier termination of the Term, Tenant shall
surrender the Premises to Landlord in its condition existing as of the date
of substantial completion of the Improvements, normal wear and tear and fire
or other casualty excepted, with all interior walls repaired if damaged, all
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broken, marred or nonconforming acoustical ceiling tiles replaced, all
windows washed, the plumbing and electrical systems and lighting in good
order and repair, including replacement of any burned out or broken light
bulbs or ballasts, the HVAC equipment serviced and repaired by a reputable
and licensed service firm, and all floors cleaned, all to the reasonable
satisfaction of Landlord. Tenant shall remove from the Premises all of
Tenant's Alterations required to be removed pursuant to PARAGRAPH 13, and all
of Tenant's Personal Property, and repair any damage and perform any
restoration work caused by such removal. If Tenant fails to remove such
Alterations and Tenant's Personal Property, and such failure continues after
the expiration or earlier termination of this Lease, Landlord may, to the
extent permitted by law, retain such Alterations and Tenant's Property and
all rights of Tenant with respect to it shall cease, or Landlord may place
all or any portion of such Alterations and Tenant's Property in public
storage for Tenant's account. Tenant shall be liable to Landlord for costs
of removal of any such Alterations and Tenant's Personal Property and storage
and transportation costs of same, and the cost of repairing and restoring the
Premises, together with interest at the Interest Rate from the date of
expenditure by Landlord. If the Premises are not so surrendered at the
expiration or earlier termination of this Lease, Tenant shall indemnify
Landlord and Landlord's Agents against all loss or liability, including
reasonable attorneys' fees and costs, resulting from delay by Tenant in so
surrendering the Premises.
Normal wear and tear, for the purposes of this Lease, shall be
construed to mean wear and tear caused to the Premises by a natural aging
process which occurs in spite of prudent application of good standards for
maintenance, repair and janitorial practices. It is not intended, nor shall
it be construed, to include items of neglected or deferred maintenance which
would have or should have been attended to during the Term of the Lease if
good standards had been applied to properly maintain and keep the Premises at
all times in good condition and repair.
15. IMPOSITIONS AND REAL PROPERTY TAXES.
A. PAYMENT BY TENANT. Tenant shall pay all
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Impositions prior to delinquency. If billed directly, Tenant shall pay such
Impositions and concurrently present to Landlord satisfactory evidence of
such payments. If any Impositions are billed to Landlord or included in
bills to Landlord for Real Property Taxes, then Tenant shall pay to Landlord
all such amounts not less than five (5) days prior to the date such
Imposition would be delinquent. If applicable law prohibits Tenant from
reimbursing Landlord for an Imposition, but Landlord may lawfully increase
the Monthly Rent to account for Landlord's payment of such Imposition, the
Monthly Rent payable to Landlord shall be increased so that the amount of
such increased Monthly Rent, together with any accompanying increases in the
Real Property Taxes payable by Tenant with respect to such Imposition, are
sufficient to net to Landlord the same return without reimbursement of such
Imposition as would have been received by Landlord with reimbursement of such
Imposition. In addition, on or before April 10 and December 10 of each year
of the Term, Tenant shall pay directly to the San Mateo County assessor the
Real Property Taxes for the Premises as set forth on the assessor's tax bill
for the Premises. If, however, the Premises are not a separate parcel for
tax purposes but constitute a portion of a larger tax parcel or parcels, the
Real Property Taxes payable by Tenant under this Lease shall be a percentage
of the Real Property Taxes payable for such parcel or parcels, which
percentage shall be determined by dividing the Rentable Area of the Premises
by the total Rentable Area of all buildings on such parcel or parcels and
multiplying the result by 100, which Real Property Taxes shall be payable by
Tenant to Landlord monthly as part of the Common Area Maintenance Costs.
Tenant, at its cost, shall have the right at any time to seek a reduction in
or otherwise contest any Real Property Taxes for which it is obligated to
reimburse Landlord pursuant to this PARAGRAPH 15, by action or proceeding
against the entity with authority to assess or impose the same. Landlord
shall not be required to join in any proceeding or action brought by Tenant
unless the provisions of applicable regulations require that such proceeding
or action be brought by or in the name of Landlord, in which event Landlord
shall join in such proceeding or action or permit it to be brought in
Landlord's name, provided that Tenant shall protect, indemnify, defend, and
hold Landlord free and harmless from and against any and all loss, liability,
cost, damage, claim or expense in connection with such proceeding or contest.
Tenant
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shall continue, during the pendency of such proceeding or action, to pay the
Real Property Taxes due as determined by landlord pursuant to this PARAGRAPH
15. If Tenant is successful in such action or proceeding, Landlord shall
reimburse to Tenant its prorata share of the reduction in Real Property Taxes
realized by Tenant in such contest or proceeding within ten (10) days after
the amount of such reduction has been determined.
(i) TAX PARCELS. If Landlord determines in its reasonable
discretion that the configuration of tax parcels within the Project
(including without limitation the tax parcel on which the Premises is
situated) causes the allocation of Real Property Taxes between the affected
tax parcels to be unfair or inequitable, Landlord reserves the right to
internally reallocate the Real Property Taxes assessed against such affected
tax parcels in a manner that reasonably addresses such unfairness or
inequity. If Landlord effects any such reallocation, then the Real Property
Taxes payable by Tenant under this Lease shall be those Real Property Taxes
allocated to the Premises pursuant to this PARAGRAPH 15.A.(i).
(ii) PAYMENT. Promptly following payment of the Real Property
Taxes, Tenant shall provide Landlord with copies of paid receipts or other
documentary evidence that the Real Property Taxes have been paid by Tenant.
If Tenant fails to pay the Real Property Taxes on or before April 10 and
December 10, respectively, or if Tenant fails to pay its share of Real
Property Taxes as part of the Common Area Maintenance Costs, Tenant shall pay
to Landlord any penalty incurred by such late payment. In addition, Tenant
shall pay any Real Property Tax not included within the county tax assessor's
tax bill within ten (10) days after being billed for same by Landlord. The
foregoing dates are based on the dates established by the county as the dates
on which Real Property Taxes become delinquent if not paid. If such
delinquency dates change, the dates on which Tenant must pay the Real
Property Taxes for the Premises shall be at least ten (10) days prior to the
new delinquency dates. Assessments, taxes, fees, levies and charges may be
imposed by governmental agencies for such purposes as fire protection,
street, sidewalk, road, utility construction and maintenance, refuse removal
and for other governmental services which may formerly have been
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provided without charge to property owners or occupants. It is the intention
of the parties that all new and increased assessments, taxes, fees, levies
and charges are to be included within the definition of Real Property Taxes
for the purposes of this Lease.
B. TAXES ON TENANT IMPROVEMENTS AND PERSONAL PROPERTY. Tenant
shall pay any increase in Real Property Taxes resulting from any and all
Alterations and Tenant Improvements of any kind whatsoever placed in, on or
about the Premises for the benefit of, at the request of, or by Tenant.
Tenant shall pay prior to delinquency all taxes assessed or levied against
Tenant's Personal Property in, on or about the Premises or elsewhere. When
possible, Tenant shall cause its Personal Property to be assessed and billed
separately from the Premises and the real property or Personal Property of
Landlord.
C. PRORATION. Tenant's liability to pay Real Property Taxes shall
be prorated on the basis of a 360-day year to account for any fractional
portion of a fiscal tax year included at the commencement or expiration of
the Term. With respect to any assessments which may be levied against or
upon the Premises or all or any portion of the Project, or which under the
laws then in force may be evidenced by improvements or other bonds or may be
paid in annual installments, only the amount of such annual installment (with
appropriate proration for any partial year) and interest due thereon shall be
included within the computation of the annual Real Property Taxes levied
against the Premises or such portion of the Project, as applicable.
16. UTILITIES AND SERVICES.
Tenant shall be responsible for and shall pay promptly all charges
for water, gas, electricity, telephone, refuse pick-up, janitorial service
and all other utilities, materials and services furnished directly to or used
by Tenant in, on or about the Premises during the Term, together with any
taxes thereon. If any utility, material or service is not separately charged
or metered to any portion of the Premises, Tenant shall pay to Landlord,
within ten (10) days after written demand therefor, Tenant's pro rata share
of the total cost thereof as may be determined by Landlord. Landlord shall
not be liable in
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damages or otherwise for any failure or interruption of any utility service
or other service furnished to the Premises, except that resulting from the
gross negligence or willful misconduct of Landlord. Tenant shall have the
right to contract directly with vendors for janitorial and maintenance
services, provided such vendors must be approved in advance by Landlord,
which approval shall not be unreasonably withheld; and provided further, that
Tenant shall have no right to contract with any vendor to maintain the
Building's HVAC system, which shall be the sole responsibility of Landlord as
set forth in PARAGRAPH 17.A.
17. REPAIR AND MAINTENANCE.
A. LANDLORD'S OBLIGATIONS. Landlord shall keep in good order,
condition and repair the structural parts of the Building, which structural
parts consist only of the foundation, subflooring, exterior walls (excluding
the interior of all walls and the exterior and interior of all windows,
doors, ceilings, and plate glass), and roof of the Building, and all plumbing
and electrical facilities leading up to (but not situated within) the
Building, except for any damage thereto caused by the negligence or willful
acts or omissions of Tenant or of Tenant's agents, employees or invitees, or
by reason of the failure of Tenant to perform or comply with any terms of
this Lease, or caused by Alterations made by Tenant or by Tenant's agents,
employees or contractors. It is an express condition precedent to all
obligations of Landlord to repair and maintain that Tenant shall have
notified Landlord of the need for such repairs or maintenance. Tenant waives
the provisions of Sections 1941 and 1942 of the California Civil Code and any
similar or successor law regarding Tenant's right to make repairs and deduct
the expenses of such repairs from the Rent due under this Lease. Landlord
shall keep in good order, condition, repair and maintenance the Building's
HVAC system and roof, and shall maintain an HVAC system preventive
maintenance service contract from a qualified vendor at a competitive price
for the purpose of maintaining the Building's HVAC system, and a roof
maintenance service contract from a qualified vendor for the purpose of
maintaining the Building's roof. Landlord shall determine in its sole
discretion whether any such vendor is qualified. Any and all costs of any
maintenance or repair of the HVAC system or the roof (including without
limitation the cost of maintaining HVAC
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system preventative maintenance contracts and roof maintenance service
contracts) shall be included in the Common Area Maintenance Costs payable by
Tenant for the year in which such cost is incurred. Landlord may elect, in
its sole discretion, to paint the exterior of the Building and/or to replace
or perform capital improvements to any area or aspect of the Building which
Landlord is required keep in good order, condition and repair. Subject to
the provisions of PARAGRAPH 17.A(i) below, if Landlord decides, in its sole
discretion, to replace the roof of the Building or make other capital
improvements or replacements to the Building or its systems during the Term,
then the cost of so replacing the roof or performing such replacement,
together with interest at the Interest Rate, shall be amortized on a
straight-line basis over the useful life of the roof or capital improvement
or replacement (as determined by Landlord in its sole discretion) (the
"USEFUL LIFE"), and the entire amount of such amortized costs and interest
allocable to each month, multiplied by Tenant's Building Share, shall be
included in the monthly Common Area Maintenance Costs payable by Tenant
during the entire period over which such costs are amortized, until Tenant
has paid to Landlord that proportion of the total amount of such amortized
costs equal to (a) the number of months remaining during the Term as of the
date such roof replacement was completed, divided by (b) the number of months
of the Useful Life, multiplied by (c) Tenant's Building Share. For the
purposes of example only and not by way of limitation, if the Building's roof
is replaced twenty-four (24) months before the end of the Term, at a cost of
Fifty Thousand Dollars ($50,000.00), and the Useful Life is one hundred
twenty (120) months, then (a) the cost of such replacement shall be amortized
at the rate of Four Hundred Sixteen and 67/100ths Dollars ($416.67) per
month, with interest at the Interest Rate, and (b) the amount to be included
in the monthly Common Area Maintenance Costs payable solely by Tenant for the
balance of the Term shall equal Two Hundred Ninety-One and 67/100ths Dollars
($291.67), with interest at the Interest Rate, until Tenant has paid to
Landlord a total aggregate amount of Seven Thousand Dollars ($7,000.00),
together with interest at the Interest Rate, towards such amortized costs
(i.e., Fifty Thousand Dollars ($50,000.00) multiplied by
[Twenty-Four (24) months divided by One Hundred Twenty (120) months])
multiplied by Tenant's Building Share. If Tenant exercises the Option to
Extend, the total length of the Term (i.e., the initial Term and
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the Extended Term) shall be utilized to calculate the maximum amount of such
amortized costs that shall be includable in the monthly Common Area
Maintenance Costs payable solely by Tenant pursuant to this PARAGRAPH 17.A.
It is the express intent of the parties that except as specifically
set forth in this PARAGRAPH 17.A, Landlord shall have no obligation
whatsoever to repair or maintain the Premises or the Building, and that
Tenant shall be responsible for performing all repair, operation, and
maintenance of the Premises except for those tasks specifically described in
this PARAGRAPH 17.A. If Tenant gives Landlord written notice ("DEFECT
NOTICE") that there is a defect or other problem with the Capital
Improvements that may be covered by a warranty issued by Contractor (as
defined in EXHIBIT B) or any subcontractor that performed any of the Capital
Improvements, Landlord shall (i) assign to Tenant the benefit of those
warranties (if any) held by Landlord that are applicable to the defects
described in the Defect Notice, (ii) at no cost or expense to Landlord, take
such actions as may be reasonably requested by Tenant to assist Tenant's
efforts to enforce any such warranties.
It is also the express intent of the parties that if Landlord for
any reason fails to complete all of the Capital Improvements before the
Commencement Date, Landlord shall complete the construction of the Capital
Improvements at its sole cost and expense, and shall have no right to include
the cost of completing the Capital Improvements in Common Area Maintenance
Costs or otherwise seek reimbursement from Tenant for the cost of completing
the Capital Improvements.
(i) The parties acknowledge and agree that as part of the
Capital Improvements, Landlord will install a new roof on the Building, that
the roof will be covered by one or more warranties (collectively, the "Roof
Warranties"), and that the roof has an estimated useful life of ten (10)
years. Notwithstanding anything to the contrary set forth above in this
PARAGRAPH 17.A, if Landlord elects to replace the roof of the Building within
ten (10) years from the date such roof was originally installed, and the cost
of so replacing the roof exceeds any amounts covered or paid for under the
Roof Warranties, then (i) the amount of any such excess shall be
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collectively called the "Excess Roof Replacement Costs"; (ii) the cost of the
initial roof installation (as reasonably determined by Landlord) shall be
amortized on a straight-line basis, over the ten (10) year useful life of
such roof, determined as of the date the roof replacement commences, and the
unamortized portion of such costs shall hereafter be called the "Unamortized
Roof Costs"; and (iii) only those Excess Roof Replacement Costs that exceed
the Unamortized Roof Costs (if any) shall be includable in Common Area
Maintenance Costs in the manner set forth above in this Paragraph 17.A.
B. TENANT'S OBLIGATIONS. Tenant shall at all times and at its
sole cost and expense clean, keep and maintain in good order, condition and
repair (and replace, if necessary) every part of the Premises which is not
within Landlord's obligation pursuant to PARAGRAPH 17.A. Tenant's repair and
maintenance obligations shall include without limitation all plumbing and
electrical facilities situated within the Premises, fixtures, interior walls
and ceiling, floors, windows, window frames, doors, entrances, plate glass,
showcases, skylights, all lighting fixtures, lamps, fans and any exhaust
equipment and systems, all mechanical systems (but not the HVAC system), any
automatic fire extinguisher equipment within the Premises, all security
systems and alarms, all electrical motors and all other appliances and
equipment of every kind and nature located in, upon or about the Premises.
Tenant shall also be responsible for all pest control within the Premises.
C. CONDITIONS APPLICABLE TO REPAIRS. All repairs, replacements and
reconstruction made by or on behalf of Tenant or any person claiming through
or under Tenant shall be made and performed (i) at Tenant's sole cost and
expense, in a good and workmanlike manner and at such time and in such manner
as Landlord may reasonably designate, (ii) by contractors approved in advance
by Landlord, (iii) so that the repairs, replacements or reconstruction shall
be at least equal in quality, value and utility to the original work or
installation, (iv) in accordance with such reasonable requirements as
Landlord may impose with respect to insurance and bonds to be obtained by
Tenant in connection with the proposed work (provided that Tenant shall not
be required to post a bond if the total cost of any such repair, replacement
or reconstruction work is equal to or less than
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Twenty-Five Thousand Dollars ($25,000.00)), and (v) in accordance with any
rules and regulations for the Building as may be adopted by Landlord from
time to time and in accordance with all applicable laws and regulations of
governmental authorities having jurisdiction over the Premises.
D. LANDLORD'S RIGHTS. If Tenant fails to perform Tenant's
obligations under PARAGRAPH 17.B, Landlord may in its sole discretion give
Tenant notice of such work as is reasonably required to fulfill such
obligations. If Tenant fails to commence the work within thirty (30) days
after receipt of such notice and diligently prosecute the work to completion,
then Landlord shall have the right (but not the obligation) to do such acts
or expend such funds at the expense of Tenant as are reasonably required to
perform such work. Any amount so expended by Landlord shall be paid by
Tenant to Landlord promptly after demand with interest at the Interest Rate.
Landlord shall have no liability to Tenant for any damage to, or interference
with Tenant's use of, the Premises, or inconvenience to Tenant as a result of
performing any such work.
E. COMPLIANCE WITH GOVERNMENTAL REGULATIONS. Tenant shall, at its
sole cost and expense, comply with, including the making by Tenant of any
Alteration to the Premises, all present and future regulations, rules, laws,
ordinances, and requirements of all governmental authorities (including,
without limitation state, municipal, county and federal governments and their
departments, bureaus, boards and officials) applicable to the Premises.
18. LIENS.
Tenant shall keep the Building and the Premises free from any liens
arising out of any work performed, materials furnished, or obligations
incurred by or on behalf of Tenant, and free from any liens arising out of
any effort by Tenant to reduce or contest Impositions, or Tenant's exercise
of its rights under Paragraph 39 below, and Tenant hereby agrees to
indemnify, defend, protect and hold Landlord and Landlord's Agents harmless
from and against any and all loss, claim, damage, liability, cost and
expense, including attorneys' fees and costs, in connection with or arising
out of any such lien or claim of lien. Tenant
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shall cause any such lien imposed to be released of record by payment or
posting of a proper bond acceptable to Landlord within ten (10) days after
written request by Landlord. Tenant shall give Landlord written notice of
Tenant's intention to perform work on the Premises which might result in any
claim of lien at least ten (10) days prior to the commencement of such work
to enable Landlord to post and record a Notice of Nonresponsibility or any
such other notice(s) as Landlord may deem appropriate. If Tenant fails to so
remove any such lien within the prescribed ten 10-day period, then Landlord
may do so at Tenant's expense and Tenant shall reimburse Landlord for such
amounts upon demand. Such reimbursement shall include all costs incurred by
Landlord including Landlord's reasonable attorneys' fees with interest
thereon at the Interest Rate.
19. LANDLORD'S RIGHT TO ENTER THE PREMISES.
Tenant shall permit Landlord and Landlord's Agents to enter the
Premises at all reasonable times with reasonable notice, except for
emergencies in which case no notice shall be required, to inspect the same,
to post Notices of Nonresponsibility and similar notices, and real estate
"For Sale" signs, to show the Premises to interested parties such as
prospective lenders and purchasers, to make necessary repairs, to discharge
Landlord's obligations under this Lease, to discharge Tenant's obligations
under this Lease when Tenant has failed to do so within a reasonable time
after written notice from Landlord, and to place upon the Building ordinary
"For Lease" signs and to show the Premises to prospective tenants (provided
that so long as Tenant is not in default under any term or condition of this
Lease after notice from Landlord and the expiration of any applicable cure
period granted by this Lease, Landlord shall only be permitted to show the
Premises to prospective tenants during the last twelve (12) months of the
Term).
20. SIGNS.
Subject to Tenant obtaining all necessary approvals from the City of
Redwood City and subject to Landlord's review and approval of plans and
specifications for any proposed signage, which approval may be withheld only
in Landlord's
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commercially reasonable judgment, Tenant shall have the exclusive right to
install identification signage with its name and logo on the wing wall to be
constructed by Landlord on the exterior of the Building adjacent to the
entrance to the Premises so long as such signage complies with Landlord's
project sign program. Tenant shall have no right to maintain any Tenant
identification sign in any other location in, on or about the Building or the
Premises and shall not display or erect any other Tenant identification sign,
display or other advertising material that is visible from the exterior of
the Building. Any changes to the size, design, color or other physical
aspects of Tenant's identification sign(s) shall be subject to the Landlord's
prior written approval, which shall not be unreasonably withheld, and any
appropriate municipal or other governmental approvals. The cost of Tenant's
sign(s) and their installation, maintenance and removal shall be Tenant's
sole cost and expense. If Tenant fails to maintain its sign(s), or, if
Tenant fails to remove its sign(s) upon termination of this Lease, Landlord
may do so at Tenant's expense and the amounts expended by Landlord in doing
so shall be immediately payable by Tenant to Landlord as Additional Rent.
21. INSURANCE.
A. INDEMNIFICATION. Tenant shall indemnify, defend, protect and
hold Landlord harmless of and from any and all loss, liens, liability, claims,
causes of action, damage, injury, cost or expense arising out of or in
connection with, or related to (i) the making of Alterations, or (ii) injury to
or death of persons or damage to property occurring or resulting directly or
indirectly from: (A) the use or occupancy of, or the conduct of business in, the
Premises; (B) any other occurrence or condition in or on the Premises; and
(C) acts, neglect or omissions of Tenant, its officers, directors, agents,
employees, invitees or licensees in or about any portion of the Project.
Tenant's indemnity obligation includes reasonable attorneys' fees and costs,
investigation costs and all other reasonable costs and expenses incurred by
Landlord. If Landlord reasonably disapproves the legal counsel proposed by
Tenant for the defense of any claim indemnified against hereunder, Landlord
shall have the right to appoint its own legal counsel, the reasonable fees,
costs and expenses of which shall be included as part of Tenant's
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indemnity obligation hereunder. The indemnification contained in this
PARAGRAPH 21.A shall extend to the officers, directors, shareholders,
partners, employees, agents and representatives of Landlord. The obligations
assumed by Tenant herein shall survive this Lease. Notwithstanding the
foregoing, Landlord shall have the right, in its sole discretion, but without
being required to do so, to defend, adjust, settle or compromise any claim,
obligation, debt, demand, suit or judgment against Landlord arising out of or
in connection with the matters covered by the foregoing indemnity and, in
such event, Tenant shall reimburse Landlord for all reasonable charges and
expenses incurred by Landlord in connection therewith, including reasonable
attorneys' fees; provided, however, that Landlord shall not undertake any
unilateral action or settlement so long as Tenant or an insurance company, at
its or their sole expense, is contesting in good faith, diligently and with
continuity such claim, action, obligation, demand or suit, and so long as
such claim, action, obligation, demand or suit does not have or threaten to
have a material adverse impact on Landlord's assets, reputation or business
affairs.
B. TENANT'S INSURANCE. Tenant agrees to maintain in full force
and effect at all times during the Term, at its sole cost and expense, for
the protection of Tenant and Landlord, as their interests may appear,
policies of insurance issued by a responsible carrier or carriers acceptable
to Landlord which afford the following coverages:
(i) Commercial general liability insurance in an amount not
less than Three Million Dollars ($3,000,000) combined single limit for both
bodily injury and property damage, with a limit of not less than One Million
Dollars ($1,000,000) per occurrence and not less than Two Million Dollars
($2,000,000) in excess liability coverage, which includes blanket contractual
liability broad form property damage, personal injury, completed operations,
and products liability, which policy shall name Landlord and Landlord's
Agents as additional insureds and shall contain a provision that "the
insurance provided Landlord hereunder shall be primary and non-contributing
with any other insurance available to Landlord with respect to any damage,
loss, liability or expense covered by Tenant's indemnity obligations under
PARAGRAPH 21.A of the Lease."
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(ii) Causes of loss-special form property insurance
(including, without limitation, vandalism, malicious mischief, inflation
endorsement, and sprinkler leakage endorsement) on Tenant's Personal Property
located on or in the Premises. Such insurance shall be in the full amount of
the replacement cost, as the same may from time to time increase as a result
of inflation or otherwise. As long as this Lease is in effect, the proceeds
of such policy shall be used for the repair and replacement of such items so
insured. Landlord shall have no interest in the insurance proceeds on
Tenant's Personal Property. Notwithstanding the foregoing, Tenant shall have
the right, at its election, to self-insure with respect to any loss or damage
to Tenant's Personal Property.
(iii) Boiler and machinery insurance, including steam pipes,
pressure pipes, condensation return pipes and other pressure vessels and HVAC
equipment, including miscellaneous electrical apparatus, in an amount
satisfactory to Landlord.
(iv) Workers compensation insurance in the manner and to the
extent required by applicable law and with limits of liability not less than
the minimum required under applicable law, covering all employees of Tenant
having any duties or responsibilities in or about the Premises.
Any policy required to be maintained by Tenant under this Lease may be
maintained under a so-called "blanket policy" insuring other parties and/or
other locations, so long as the amount of insurance and type of coverage
required to be provided hereunder is not thereby diminished, changed or
adversely affected.
C. BUILDING INSURANCE. During the Term Landlord shall maintain
causes of loss-special form property insurance (including inflation
endorsement, sprinkler leakage endorsement, and, at Landlord's option,
earthquake and flood coverage; provided, however, that Landlord shall not be
entitled to pass through to Tenant the cost of earthquake insurance unless
such insurance is obtained at commercially reasonable rates) on the
Building, excluding coverage of all Tenant's Personal Property located on or
in the Premises, but including the Tenant Improvements; such insurance shall
be for the full replacement value of the Building, if such full replacement
coverage is
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available from insurers, and at commercially reasonable rates, reasonably
acceptable to Landlord. Such insurance shall also include insurance against
loss of rents, including, at Landlord's option, coverage for earthquake and
flood, in an amount equal to the Monthly Rent and Additional Rent, and any
other sums payable under the Lease, for a period of at least twelve (12)
months commencing on the date of loss. Such insurance shall name Landlord and
Landlord's Agents as named insureds and include a lender's loss payable
endorsement in favor of Landlord's lender (Form 438 BFU Endorsement). Tenant
shall reimburse Landlord monthly, as Additional Rent, for Tenant's Building
Share of one-twelfth (12th) of the annual cost of such insurance on the first
day of each calendar month of the Term, prorated for any partial month, or on
such other periodic basis as Landlord shall elect. If the insurance premiums
are increased after the Commencement Date for any reason, including without
limitation due to an increase in the value of the Building or its replacement
cost, Tenant shall pay Tenant's Building Share of such increase within ten
(10) days of notice of such increase; provided, however, that if any increase
in such insurance premiums is due to any action or failure to act of Tenant,
including without limitation Tenant's use of the Premises or any improvements
installed by Tenant at the Premises, Tenant shall pay the entire amount of
such increase within ten (10) days of notice of such increase. Landlord may,
in its sole discretion, maintain the insurance coverage described in this
PARAGRAPH 21.C as part of an umbrella insurance policy covering other
properties owned by Landlord.
D. INCREASED COVERAGE. Upon demand, Tenant shall provide
Landlord, at Tenant's expense, with such increased amount of existing
insurance, and such other insurance as Landlord or Landlord's lender may
reasonably require, consistent with prudent industry practice, to afford
Landlord and Landlord's lender adequate protection.
E. FAILURE TO MAINTAIN. If Tenant fails to maintain any insurance
coverage that Tenant is required to maintain under this PARAGRAPH 21, and
Landlord incurs any liability to its insurance carrier arising out of
Tenant's failure to so maintain such insurance coverage, then any and all
loss or damage Landlord shall sustain by reason thereof, including attorneys'
fees and
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costs, shall be borne by Tenant and shall be immediately paid by Tenant upon
its receipt of a bill therefor and evidence of such loss. Nothing contained
in this PARAGRAPH 21.E shall be deemed to limit or affect any other remedies
or rights available to Landlord under this Lease that arise from Tenant's
failure to so maintain such insurance coverage.
F. INSURANCE REQUIREMENTS. All insurance shall be in a form
satisfactory to Landlord and shall be carried in companies that have a
general policy holder's rating of not less than "A" and a financial rating of
not less than Class "X" in the most current edition of BEST'S INSURANCE
REPORTS; and shall provide that such policies shall not be subject to
material alteration or cancellation except after at least thirty (30) days'
prior written notice to Landlord. The policy or policies, or duly executed
certificates for them, together with satisfactory evidence of payment of the
premiums thereon shall be deposited with Landlord prior to the Commencement
Date, and upon renewal of such policies, not less than thirty (30) days prior
to the expiration of the term of such coverage. If Tenant fails to procure
and maintain the insurance it is required to maintain under this PARAGRAPH
21, Landlord may, but shall not be required to, order such insurance at
Tenant's expense and Tenant shall reimburse Landlord therefor. Such
reimbursement shall include all costs incurred by Landlord in obtaining such
insurance including Landlord's reasonable attorneys' fees, with interest
thereon at the Interest Rate.
G. WAIVER AND RELEASE. Except to the extent due to the negligence
or willful misconduct of Landlord, Landlord shall not be liable to Tenant or
Tenant's employees, agents, contractors, licenses or invitees for, and Tenant
waives as against and releases Landlord and Landlord's Agents from, all
claims for loss or damage to any property or injury, illness or death of any
person in, upon or about the Premises and/or any other portion of the
Project, arising at any time and from any cause whatsoever (including without
limitation any claim caused in whole or in part by the act, omission, or
neglect of other tenants, contractors, licensees, invitees or other occupants
of the Project or their agents or employees; and any claim arising from any
construction activities taking place in, upon or about the Premises and/or
any other portion of the Project). Landlord
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and Landlord's Agents shall not be liable for any latent defect in the
Premises.
22. WAIVER OF SUBROGATION.
Landlord and Tenant each hereby waive all rights of recovery against
the other on account of loss or damage occasioned by such waiving party to
its property or the property of others under its control, to the extent that
such loss or damage would be covered by any causes of loss-special form
policy of insurance or its equivalent required to be or actually carried
under PARAGRAPH 21. Tenant and Landlord shall, upon obtaining policies of
insurance required hereunder, give notice to the insurance carrier that the
foregoing mutual waiver of subrogation is contained in this Lease and Tenant
and Landlord shall cause each insurance policy obtained by such party to
provide that the insurance company waives all right of recovery by way of
subrogation against either Landlord or Tenant in connection with any damage
covered by such policy.
23. DAMAGE OR DESTRUCTION.
A. LANDLORD'S OBLIGATION TO REBUILD. If all or any part of the
Premises or the Building is damaged or destroyed, Landlord shall promptly and
diligently repair the same unless it has the right to terminate this Lease as
provided herein and it elects to so terminate.
B. RIGHT TO TERMINATE. Landlord shall have the right to terminate
this Lease in the event any of the following events occur:
(i) insurance proceeds from the insurance Landlord is required
to carry pursuant to PARAGRAPH 21.C, or that Landlord actually carries, are
not available to pay one hundred percent (100%) of the cost of such repair,
excluding any applicable deductibles, for which Tenant shall be responsible;
provided, however, that if Tenant pays to Landlord, in immediately available
funds, within thirty (30) days after such casualty, any shortfall in such
insurance proceeds, as reasonably determined by Landlord, then Landlord shall
have no right to terminate the Lease pursuant to this item (i); provided
further,
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that if insurance proceeds are not available to pay one hundred percent
(100%) of the cost of such repair due solely to the fact that Landlord has
failed to carry the insurance described in PARAGRAPH 21.C, then Landlord
shall not have the right to terminate this Lease pursuant to this PARAGRAPH
23.B(i). Notwithstanding anything to the contrary set forth above, if (a) all
or any part of the Premises or the Building is damaged or destroyed by a
casualty event that is covered by the insurance Landlord is required to carry
pursuant to PARAGRAPH 21.C, or that Landlord actually carries, (b) proceeds
from such insurance are not available to pay one hundred percent (100%) of
the cost of such repair, excluding any applicable deductibles, (c) Landlord
terminates the Lease pursuant to its rights under this PARAGRAPH 23.B(i), (d)
Landlord eventually receives proceeds from such insurance due to such
casualty event, and (e) a subsequent tenant of the Premises that occupies the
Premises prior to the tenth (10th) anniversary of the Commencement Date
elects to utilize the Tenant Improvements, then Landlord shall pay to Tenant
an amount equal to the present value of the lesser of (x) the cost savings
enjoyed by Landlord during the originally-scheduled ten (10) year term of
this Lease due to the use of the Tenant Improvement by such subsequent tenant
(with the amount of such savings to be reasonably determined by Landlord),
and (y) the unamortized Tenant Improvement Costs (as defined in EXHIBIT B)
for the initial Tenant Improvements, as of the date such subsequent tenant
opens for business in the Premises, with the Tenant Improvement Costs being
amortized on a straight-line basis over a period of ten (10) years,
commencing on the Commencement Date, and ending as of the date that is the
mid-way point between the date this Lease is terminated and the date on which
such subsequent tenant opens for business in the Premises;
(ii) either the Premises or the Building cannot, with
reasonable diligence, be fully repaired by Landlord within three hundred
sixty (360) days after the date of the damage or destruction; or
(iii) either the Premises or the Building cannot be safely
repaired because of the presence of hazardous factors, including, but not
limited to, earthquake faults, radiation, Hazardous Materials and other
similar dangers.
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If Landlord elects to terminate this Lease, Landlord may give Tenant
written notice of its election to terminate within thirty (30) days after
such damage or destruction, and this Lease shall terminate fifteen (15) days
after the date Tenant receives such notice and both Landlord and Tenant shall
be released of all further liability under this Lease (except to the extent
any provision of this Lease expressly survives termination). If Landlord
elects not to terminate the Lease, subject to Tenant's termination right set
forth below, Landlord shall promptly commence the process of obtaining
necessary permits and approvals and repair of the Premises or Building as
soon as practicable, and this Lease will continue in full force and affect.
All insurance proceeds from insurance under PARAGRAPH 21, excluding proceeds
for Tenant's Personal Property, shall be disbursed and paid to Landlord.
Tenant shall be required to pay to Landlord an amount equal to that portion
of any deductibles payable in connection with any insured casualties that is
allocable to the Premises, unless the casualty was caused by the sole
negligence or willful misconduct of Landlord.
Tenant shall have the right to terminate this Lease if the Premises
cannot, with reasonable diligence, be fully repaired within two hundred
seventy (270) days from the date of damage or destruction. The determination
of the estimated repair periods in this PARAGRAPH 23 shall be made by an
independent, licensed contractor or engineer within thirty (30) days after
such damage or destruction. Landlord shall deliver written notice of the
repair period to Tenant after such determination has been made and Tenant
shall exercise its right to terminate this Lease, if at all, within ten (10)
days of receipt of such notice from Landlord. Upon such termination both
Landlord and Tenant shall be released of all further liability under this
Lease (except to the extent any provision of this Lease expressly survives
termination).
C. LIMITED OBLIGATION TO REPAIR. Landlord's obligation, should it
elect or be obligated to repair or rebuild, shall be limited to the basic
portion of the Building in which the Premises are situated and the Tenant
Improvements, and shall not include any Alterations made by Tenant.
D. ABATEMENT OF RENT. Rent shall be temporarily
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abated proportionately, during any period when, by reason of such damage or
destruction, Tenant's use of the Premises is impaired. Such abatement of
Rent shall be proportional to the extent of such impairment (with the extent
of such impairment to be reasonably determined by Landlord), and shall
commence upon such damage or destruction and end upon substantial completion
by Landlord of the repair or reconstruction which Landlord is obligated or
undertakes to perform. Tenant shall not be entitled to any compensation or
damages from Landlord for loss of the use of the Premises, damage to Tenant's
Personal Property or any inconvenience occasioned by such damage, repair or
restoration. Tenant hereby waives the provisions of Section 1932, Subdivision
2, and Section 1933, Subdivision 4, of the California Civil Code, and the
provisions of any similar law hereinafter enacted.
E. DAMAGE NEAR END OF TERM. Anything herein to the contrary
notwithstanding, if the Premises is destroyed or materially damaged during
the last twelve (12) months of the Term (unless Tenant has properly exercised
the Option to Extend), then either Landlord or Tenant may, at its option,
cancel and terminate this Lease as of the date of the occurrence of such
damage, by delivery of written notice to the other party and, in such event,
upon such termination both Landlord and Tenant shall be released of all
further liability under this Lease (except to the extent any provision of
this Lease expressly survives termination). If neither Landlord nor Tenant
elects to terminate this Lease, the repair of such damage shall be governed
by PARAGRAPHS 23.A and 23.B.
24. CONDEMNATION.
If title to all of the Premises is taken for any public or
quasi-public use under any statute or by right of eminent domain, or so much
thereof is so taken so that reconstruction of the Premises will not, in
Landlord's sole discretion, result in the Premises being reasonably suitable
for Tenant's continued occupancy for the uses and purposes permitted by this
Lease, this Lease shall terminate as of the date that possession of the
Premises or part thereof is taken, and upon such termination both Landlord
and Tenant shall be released of all further liability under this Lease
(except to the extent any provision of this Lease expressly survives
termination). A sale by Landlord to any
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authority having the power of eminent domain, either under threat of
condemnation or while condemnation proceedings are pending, shall be deemed a
taking under the power of eminent domain for all purposes of this PARAGRAPH
24.
If any part of the Premises is taken and the remaining part is
reasonably suitable for Tenant's continued occupancy for the purposes and
uses permitted by this Lease, this Lease shall, as to the part so taken,
terminate as of the date that possession of such part of the Premises is
taken, and upon such termination both Landlord and Tenant shall be released
of all further liability under this Lease with respect to that portion of the
Premises that is taken (except to the extent any provision of this Lease
expressly survives termination). The Rent and other sums payable hereunder
shall be reduced in the same proportion that Tenant's use and occupancy of
the Premises is reduced. If any portion of the Common Area is taken,
Tenant's Rent shall be reduced only if such taking materially interferes with
Tenant's use of the Common Area and then only to the extent that the fair
market rental value of the Premises is diminished by such partial taking. If
the parties disagree as to the amount of Rent reduction, the matter shall be
resolved by arbitration and such arbitration shall comply with and be
governed by the California Arbitration Act, Sections 1280 through 1294.2 of
the California Code of Civil Procedure. Each party hereby waives the
provisions of Section 1265.130 of the California Code of Civil Procedure
allowing either party to petition the Superior Court to terminate this Lease
in the event of a partial taking of the Premises.
All compensation or damages awarded or paid for any taking hereunder
shall belong to and be the property of Landlord, whether such compensation or
damages are awarded or paid as compensation for diminution in value of the
leasehold, the fee or otherwise, except that Tenant shall be entitled to any
award allowed to Tenant for the taking of Tenant's Personal Property, for the
interruption of Tenant's business, for its moving costs, or for the loss of
its good will, and for that portion of the unamortized cost of any tenant
improvements to the Premises paid for by Tenant, including but not limited to
the initial Tenant Improvements, that is allocable to the remainder of the
Term as of the date of such taking. Except for the foregoing allocation, no
award for any partial or entire taking of the Premises shall
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be apportioned between Landlord and Tenant, and Tenant assigns to Landlord
its interest in the balance of any award which may be made for the taking or
condemnation of the Premises, together with any and all rights of Tenant
arising in or to the same or any part thereof.
25. ASSIGNMENT AND SUBLETTING.
A. LANDLORD'S CONSENT. Subject to the provisions of PARAGRAPH
25.G below, Tenant shall not enter into a Sublet without Landlord's prior
written consent, which consent shall not be unreasonably withheld. Any
attempted or purported Sublet without Landlord's prior written consent shall
be void and confer no rights upon any third person and, at Landlord's
election, shall terminate this Lease. Each Subtenant shall agree in writing,
for the benefit of Landlord, to assume, to be bound by, and to perform the
terms, conditions and covenants of this Lease to be performed by Tenant, as
such terms, conditions and covenants apply to the Sublet premises.
Notwithstanding anything contained herein, Tenant shall not be released from
liability for the performance of each term, condition and covenant of this
Lease by reason of Landlord's consent to a Sublet unless Landlord
specifically grants such release in writing.
B. TENANT'S NOTICE. If Tenant desires at any time to Sublet all
or any portion of the Premises, Tenant shall first notify Landlord in writing
of its desire to do so.
C. INFORMATION TO BE FURNISHED. If Tenant desires at any time to
Sublet all or any portion of the Premises, then Tenant shall submit in
writing to Landlord: (i) the name of the proposed Subtenant; (ii) the nature
of the proposed Subtenant's business to be carried on in the Premises; (iii)
the terms and provisions of the proposed Sublet and a copy of the proposed
form of Sublet agreement containing a description of the subject premises;
and (iv) such financial information, including financial statements, as
Landlord may reasonably request concerning the proposed Subtenant.
D. LANDLORD'S ALTERNATIVES. At any time within ten (10) days
after Landlord's receipt of the information specified in PARAGRAPH 25.C.,
Landlord may, by written notice to Tenant,
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elect: (i) to consent to the Sublet by Tenant; or (ii) to refuse its consent
to the Sublet. If Landlord consents to the Sublet, Tenant may thereafter
enter into a valid Sublet of the Premises or applicable portion thereof, upon
the terms and conditions and with the proposed Subtenant set forth in the
information furnished by Tenant to Landlord, subject, however, at Landlord's
election, to the condition that fifty percent (50%) of any excess of the
Subrent (the "Excess Subrent") over the Rent required to be paid by Tenant
under this Lease (or, if only a portion of the Premises is Sublet, the pro
rata share of the Rent attributable to the portion of the Premises being
Sublet) less (v) reasonable attorneys' fees, (w) leasing commissions (which
shall not include the cost of any trade fixtures, equipment or personal
property), (x) that portion of the unamortized Tenant Improvement Costs (as
defined in EXHIBIT B) for the initial Tenant Improvements allocable to the
portion of the Premises being Sublet (for the purposes of this clause (x),
the Tenant Improvement Costs shall be amortized over a period of ten (10)
years, at a per annum interest rate equal to the reference rate, or
succeeding similar index, announced from time to time by the Bank of
America's main San Francisco office, plus one percent (1%),(y) the cost of
any tenant improvements (other than the initial Tenant Improvements) paid for
by Tenant and installed in the portion of the Premises being Sublet for the
specific purpose of carrying out such Sublet, and (z) other reasonable
subletting costs paid by Tenant on the Sublet, shall be paid to Landlord.
E. PRORATION. If a portion of the Premises is Sublet, the pro
rata share of the Rent attributable to such partial area of the Premises
shall be determined by Landlord by dividing the Rent payable by Tenant
hereunder by the total square footage of the Premises and multiplying the
resulting quotient (the per square foot rent) by the number of square feet of
the Premises which are Sublet.
F. PARAMETERS OF LANDLORD'S CONSENT. Except as otherwise provided
herein, Landlord shall have the right to base its consent to any Sublet
hereunder upon such factors and considerations as Landlord reasonably deems
relevant or material to the proposed Sublet and the best interests of the
Project's operations. Without limiting the generality of the foregoing,
Tenant acknowledges that it shall be reasonable for Landlord to
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withhold its consent to any Sublet hereunder if Tenant has not demonstrated
that: (i) the proposed Subtenant is financially responsible, with sufficient
net worth and net current assets, properly and successfully to operate its
business in the Premises and meet the financial and other obligations of this
Lease; (ii) the proposed Subtenant possesses sound and good business
judgment, reputation and experience, and proven management skills in the
operation of a business or businesses substantially similar to the uses
permitted in the Premises under PARAGRAPH 11.A; and (iii) the use of the
Premises proposed by such Subtenant conforms to the permitted uses specified
under PARAGRAPH 11.A, and involves either no Hazardous Use or only such
Hazardous Use as shall be acceptable to Landlord in its sole discretion.
G. PERMITTED TRANSFERS. Notwithstanding the provisions of
PARAGRAPH 25.A above, Tenant shall have the right to enter into a Sublet, and
Landlord shall not withhold its consent thereto (provided that all of the
conditions set forth in clauses (A), (B) and (C) below shall be met), if such
Sublet is one of the following "Permitted Transfers": (i) a Sublet to the
surviving entity of a merger or consolidation involving the corporate entity
constituting the Tenant under this Lease; or (ii) a Sublet to any subsidiary
or Affiliate of the Tenant originally named in this Lease. However, the
foregoing Permitted Transfers shall be exempt from the requirement of
Landlord's consent only if all of the following conditions shall be met: (A)
there shall be no change in the use or operation of the Premises; (B) Tenant
shall have provided to Landlord all information to allow Landlord to
determine, and Landlord shall have determined, that the proposed transfer is
a Permitted Transfer which is exempt from the requirement of Landlord's
consent; and (C) as of the effective date of such Sublet, the proposed
Subtenant has a net worth and net current assets equal to or greater than
those of the original Tenant under this Lease as of the date of this Lease.
No Sublet of the type described in this PARAGRAPH 25.G, nor any other
transfer of all or any portion of Tenant's interest in the Lease or the
Premises, shall release Tenant of its obligations under this Lease. In
addition, any sale or transfer of the capital stock of Tenant shall be deemed
a Permitted Transfer if (1) such sale or transfer occurs in connection with
any bona fide financing or capitalization for the benefit of
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Tenant, or (2) Tenant becomes a publicly traded corporation, or (3) such sale
or transfer is made to any publicly traded corporation.
In addition, Tenant shall have the right to sublease to one or more
subtenants not more than Twenty Thousand (20,000) square feet of the Premises
in the aggregate without Landlord's consent (but with notice to Landlord),
provided (w) there shall be no change in the use or operation of the
Premises, (x) Tenant is not in default of its obligations hereunder, which
default is continuing after notice and the expiration of any applicable grace
period, at the time of entering into any such sublease, (y) Tenant is in
possession of the remainder of the Premises and remains primarily liable for
its obligations hereunder, and (z) no such sublease shall have a term that
expires beyond the thirty-sixth (36th) month following the Commencement Date.
Landlord acknowledges that the foregoing right is a material inducement for
Tenant to enter into this Lease. Tenant acknowledges that this grammatical
paragraph shall not apply to any assignment or attempted assignment of all or
any portion of its interest in this Lease, nor to any sublease of all or any
portion of the Premises by Tenant for a term that expires beyond the
thirty-sixth (36th) month following the Commencement Date. The rights
described in this grammatical paragraph are personal to the Tenant originally
named in this Lease, and shall not be exercised by any assignee or successor
of such Tenant.
26. DEFAULT.
A. TENANT'S DEFAULT. A default under this Lease by Tenant shall
exist if any of the following occurs:
(i) If Tenant fails to pay, within five (5) days after written
notice from Landlord, any Rent or any other sum required to be paid hereunder
when due, including, without limitation, any Tenant Improvement costs payable
by Tenant under EXHIBIT B; or
(ii) If Tenant fails to perform any term, covenant or
condition of this Lease except those requiring the payment of money, and
Tenant fails to cure such breach within thirty (30) days after written notice
from Landlord where such
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breach could reasonably be cured within such 30-day period; provided,
however, that where such failure could not reasonably be cured within the
30-day period, that Tenant shall not be in default if it commences such
performance within the 30-day period and diligently thereafter prosecutes the
same to completion; or
(iii) If Tenant assigns its assets for the benefit of its
creditors; or
(iv) If the sequestration or attachment of or execution on any
material part of Tenant's Personal Property essential to the conduct of
Tenant's business occurs, and Tenant fails to obtain a return or release of
such Tenant's Personal Property within thirty (30) days thereafter, or prior
to sale pursuant to such sequestration, attachment or levy, whichever is
earlier; or
(v) If Tenant abandons the Premises; or
(vi) If a court makes or enters any decree or order other than
under the bankruptcy laws of the United States adjudging Tenant to be
insolvent; or approving as properly filed a petition seeking reorganization
of Tenant; or directing the winding up or liquidation of Tenant and such
decree or order shall have continued for a period of sixty (60) days.
B. REMEDIES. Upon a default, Landlord shall have the following
remedies, in addition to all other rights and remedies provided by law or
otherwise provided in this Lease, to which Landlord may resort cumulatively
or in the alternative:
(i) Landlord may continue this Lease in full force and effect,
and this Lease shall continue in full force and effect as long as Landlord
does not terminate this Lease, and Landlord shall have the right to collect
Rent when due. Without limiting the foregoing, Landlord has the remedy set
forth in Section 1951.4 of the California Civil Code.
(ii) Landlord may terminate Tenant's right to possession of
the Premises at any time by giving written notice to that effect, and relet
the Premises or any part thereof. Tenant shall be liable immediately to
Landlord for all costs
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Landlord incurs in reletting the Premises or any part thereof, including,
without limitation, broker's commissions, expenses of cleaning and
redecorating the Premises required by the reletting and like costs.
Reletting may be for a period shorter or longer than the remaining Term of
this Lease. No act by Landlord other than giving written notice of
termination to Tenant shall terminate this Lease. Neither acts of
maintenance, nor efforts to relet the Premises, nor the appointment of a
receiver on Landlord's initiative to protect Landlord's interest under this
Lease shall not constitute a termination of Tenant's right to possession. On
termination, Landlord has the right to remove all Tenant's Personal Property
and store the same at Tenant's sole cost and expense and to recover from
Tenant as damages:
(a) The worth at the time of award of the unpaid Rent and
other sums due and payable which had been earned at the time of termination;
plus
(b) The worth at the time of award of the amount by which
the unpaid Rent and other sums due and payable which would have been payable
after termination until the time of award exceeds the amount of such Rent
loss that Tenant proves could have been reasonably avoided; plus
(c) The worth at the time of award of the amount by which
the unpaid rent and other sums due and payable for the balance of the Term
after the time of award exceeds the amount of such Rent 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 Tenant's
obligations under this Lease, or which, in the ordinary course of things,
would be likely to result therefrom, including, without limitation, any costs
or expenses incurred by Landlord: (i) in retaking possession of the Premises;
(ii) in maintaining, repairing, preserving, restoring, replacing, cleaning,
altering or rehabilitating the Premises or any portion thereof, including
such acts for reletting to a new tenant or tenants; (iii) for leasing
commissions; or (iv) for any other costs necessary or appropriate to relet
the Premises; plus
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(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 the laws of the State of California.
The "worth at the time of award" of the amounts referred to in
PARAGRAPHS 26.B.(ii)(a) and 26.B.(ii)(b) is computed by allowing interest at
the Interest Rate on the unpaid rent and other sums due and payable from the
termination date through the date of award. The "worth at the time of award"
of the amount referred to in PARAGRAPH 26.B.(ii)(c) 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 percent (1%). Tenant waives
redemption or relief from forfeiture under California Code of Civil Procedure
Sections 1174 and 1179, or under any other present or future law, in the
event Tenant is evicted or Landlord takes possession of the Premises by
reason of any default of Tenant hereunder.
(iii) Landlord may, with or without terminating this Lease,
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. No reentry or taking possession of
the Premises by Landlord pursuant to this PARAGRAPH 26.B.(iii) shall be
construed as an election to terminate this Lease unless a written notice of
such intention is given to Tenant.
C. LANDLORD'S DEFAULT. Landlord shall not be deemed to be in
default in the performance of any obligation required to be performed by it
hereunder unless and until it has failed to perform such obligation within
thirty (30) days after receipt of written notice by Tenant to Landlord
specifying the nature of such default; provided, however, that if the nature
of Landlord's obligation is such that more than thirty (30) days are required
for its performance, then Landlord shall not be deemed to be in default if it
shall commence such performance within such 30-day period and thereafter
diligently prosecute the same to completion.
27. SUBORDINATION.
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A. SUBORDINATION. This Lease is or may become subject and
subordinate to underlying leases, mortgages, deeds of trust, easements, and
CC&Rs (collectively, "ENCUMBRANCES") which may now or hereafter affect the
Premises, and to all renewals, amendments, modifications, consolidations,
replacements and extensions thereof; provided, however, if the holder or
holders of any such Encumbrance (collectively, "HOLDER") shall require that
this Lease be prior and superior thereto, within fifteen (15) days of written
request of Landlord to Tenant, Tenant shall execute, have acknowledged and
deliver any and all documents or instruments, in the form presented to
Tenant, which Landlord or Holder deems reasonably necessary or desirable for
such purposes. Subject to PARAGRAPH 27.C below, Landlord shall have the
right to cause this Lease to be and become and remain subject and subordinate
to any and all Encumbrances which are now or may hereafter be executed
covering the Premises or any renewals, modifications, consolidations,
replacements or extensions thereof, for the full amount of all advances made
or to be made thereunder and without regard to the time or character of such
advances, together with interest thereon and subject to all the terms and
provisions thereof; provided only, that in the event of termination of any
such lease or upon the foreclosure of any such mortgage or deed of trust, so
long as Tenant is not in default, Holder agrees to recognize Tenant's rights
under this Lease as long as Tenant shall pay the Rent and observe and perform
all the provisions of this Lease to be observed and performed by Tenant.
Within fifteen (15) days after Landlord's written request, Tenant shall
execute any and all documents reasonably required by Landlord or the Holder
to make this Lease subordinate to any lien of the Encumbrance (including,
without limitation, subordination to all CC&Rs), including without limitation
a Subordination, Non-Disturbance and Attornment Agreement in the form
attached hereto as EXHIBIT F ("SNDA"). Subject to PARAGRAPH 27.C below, if
Tenant fails to do so, such failure shall constitute a default under this
Lease, and it shall be deemed that this Lease is subordinated to such
Encumbrance.
B. ATTORNMENT. Notwithstanding anything to the contrary set forth
in this PARAGRAPH 27, Tenant hereby attorns and agrees to attorn to any
entity purchasing or otherwise acquiring the Premises at any sale or other
proceeding or pursuant to the exercise of any other rights, powers or
remedies
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under such Encumbrance.
C. NON-DISTURBANCE. Notwithstanding anything to the contrary in
this Lease, if an Encumbrance, other than any CC&R's, is created after the
execution of this Lease, as a condition to the subordination of this Lease
thereto under PARAGRAPH 27.A above, Landlord shall obtain from the Holder of
such Encumbrance, other than CC&R's, a SNDA in a commercially reasonable form
or in a form reasonably acceptable to Tenant. Without in any way limiting
the type or form of SNDA that may be required by such Holder, Tenant hereby
agrees that a SNDA in the form attached to this Lease as EXHIBIT F shall be
reasonable. Only upon Landlord's delivery of a SNDA in the form of EXHIBIT F
or in a commercially reasonable form or in a form reasonably acceptable to
Tenant, shall this Lease be automatically subject and subordinate to such
Encumbrance, other than CC&R's. Within fifteen (15) business days after full
execution of this Lease, Landlord shall use reasonable efforts to provide
Tenant with a SNDA in the form attached to this Lease as EXHIBIT F from each
Holder of any Encumbrance in effect as of the date of this Lease, together
with a side letter from Comerica Bank-California ("COMERICA SIDE LETTER")
confirming that the existence of the "automatic subordination" language
contained in PARAGRAPH 27.A above shall not (without the occurrence of some
other act or event that constitutes a default by Tenant under the Lease or
the SNDA with Comerica Bank-California) constitute a default by Tenant under
this Lease or the SNDA by and among Comerica Bank-California, Landlord and
Tenant, nor shall such language or any subordination of Tenant's leasehold
interest in accordance therewith invalidate or affect the nondisturbance
obligation of Comerica Bank-California as set forth in the SNDA by and among
Comerica Bank-California, Landlord and Tenant. If Landlord fails to deliver
the required SNDA(s) and Comerica Side Letter within the 15-day period, then,
as Tenant's sole and exclusive remedy, Tenant shall have the right to
terminate this Lease by giving Landlord a written notice of termination
within five (5) business days after expiration of such 15-day period, upon
which Landlord shall promptly return to Tenant any Rent paid in advance and
the Security Deposit. If Tenant does not exercise such termination right
within such 5-business day period, then Tenant shall have no further right to
terminate this Lease pursuant to this PARAGRAPH 27.C and Tenant shall have no
other rights or remedies
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with respect to Landlord's failure to deliver such SNDA(s) and/or Comerica
Side Letter.
28. NOTICES.
Any notice or demand required or desired to be given under this
Lease shall be in writing and shall be personally served or in lieu of
personal service may be given by certified mail, facsimile, or overnight
courier service. All notices or demands under this Lease shall be deemed
given, received, made or communicated on the date personal delivery is
effected; or, if sent by certified mail, on the delivery date or attempted
delivery date shown on the return receipt; or, if sent by facsimile, on the
date sent by the sender; or, if sent by overnight courier service, on the
delivery date or attempted delivery date shown on such service's records. At
the date of execution of this Lease, the addresses of Landlord and Tenant are
as set forth in PARAGRAPH 1. After the Commencement Date, the address of
Tenant shall be the address of the Premises. Either party may change its
address by giving notice of same in accordance with this PARAGRAPH 28.
29. ATTORNEYS' FEES.
If either party brings any action or legal proceeding for damages
for an alleged breach of any provision of this Lease, to recover Rent, or
other sums due, to terminate the tenancy of the Premises or to enforce,
protect or establish any term, condition or covenant of this Lease or right
of either party, the prevailing party shall be entitled to recover as a part
of such action or proceedings, or in a separate action brought for that
purpose, reasonable attorneys' fees and costs, including without limitation
any and all costs and expenses arising from (i) collection efforts, (ii) any
appellate proceedings, and (iii) any bankruptcy, insolvency or arbitration
proceedings.
30. ESTOPPEL CERTIFICATES.
A. TENANT ESTOPPEL. Tenant shall within fifteen (15) days
following written request by Landlord:
(i) Execute and deliver to Landlord any documents,
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including estoppel certificates, in the form prepared by Landlord (a)
certifying that this Lease is unmodified and in full force and effect or, if
modified, stating the nature of such modification and certifying that this
Lease, as so modified, is in full force and effect and the date to which the
Rent and other charges are paid in advance, if any, and (b) acknowledging
that there are not, to Tenant's knowledge, any uncured defaults on the part
of Landlord, or, if there are uncured defaults on the part of the Landlord,
stating the nature of such uncured defaults, (c) evidencing the status of the
Lease as may be required either by a lender making a loan to Landlord to be
secured by deed of trust or mortgage covering the Premises or a purchaser of
the Premises from Landlord, and (d) such other matters as may be reasonably
requested by Landlord. Tenant's failure to deliver an estoppel certificate
within fifteen (15) days after delivery of Landlord's written request
therefor shall be conclusive upon Tenant (a) that this Lease is in full force
and effect, without modification except as may be represented by Landlord,
(b) that there are now no uncured defaults in Landlord's performance, and (c)
that no Rent has been paid in advance. If Tenant fails to so deliver a
requested estoppel certificate within the prescribed time it shall be
conclusively presumed that this Lease is unmodified and in full force and
effect except as represented by Landlord.
(ii) Deliver to Landlord the current financial statements of
Tenant, and financial statements of the two (2) years prior to the current
financial statements year, with an opinion of a certified public accountant,
including a balance sheet and profit and loss statement for the most recent
prior year, all prepared in accordance with generally accepted accounting
principles consistently applied.
B. LANDLORD ESTOPPEL. Landlord shall, within fifteen (15) days
following written request by Tenant, execute and deliver to Tenant an
estoppel certificate, in the form prepared by Tenant,(a) certifying that this
Lease is unmodified and in full force and effect or, if modified, stating the
nature of such modification and certifying that this Lease, as so modified,
is in full force and effect and the date to which the Rent and other charges
are paid in advance, if any, and (b) acknowledging that there are not, to
Landlord's knowledge, any uncured defaults on the part
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of Tenant, or, if there are uncured defaults on the part of the Tenant,
stating the nature of such uncured defaults, and (c) such other matters as
may be reasonably requested by Tenant. Landlord's failure to deliver an
estoppel certificate within fifteen (15) days after delivery of Tenant's
written request therefor shall be conclusive upon Landlord (a) that this
Lease is in full force and effect, without modification except as may be
represented by Tenant,(b) that there are now no uncured defaults in Tenant's
performance, and (c) that no Rent has been paid in advance. If Landlord
fails to so deliver a requested estoppel certificate within the prescribed
time it shall be conclusively presumed that this Lease is unmodified and in
full force and effect except as represented by Tenant.
31. TRANSFER OF THE PREMISES BY LANDLORD.
In the event of any conveyance of the Premises and assignment by
Landlord of this Lease, Landlord shall be and is hereby entirely released
from all liability under any and all of its covenants and obligations
contained in or derived from this Lease occurring after the date of such
conveyance and assignment, and Tenant agrees to attorn to such transferee
provided such transferee assumes Landlord's obligations under this Lease.
32. LANDLORD'S RIGHT TO PERFORM TENANT'S COVENANTS.
If Tenant shall at any time fail to make any payment or perform any
other act on its part to be made or performed under this Lease, and such
failure shall continue after the expiration of any applicable grace or cure
periods provided in this Lease, Landlord may, but shall not be obligated to
(and without waiving or releasing Tenant from any obligation of Tenant under
this Lease), make such payment or perform such other act to the extent
Landlord may deem desirable, and in connection therewith, pay expenses and
employ counsel. All sums so paid by Landlord and all penalties, interest,
expenses and costs in connection therewith shall be due and payable by Tenant
on the next day after any such payment by Landlord, together with interest
thereon at the Interest Rate from such date to the date of payment by Tenant
to Landlord, plus collection costs and attorneys' fees. Landlord shall have
the same rights and remedies for the nonpayment thereof as in the case of
default in the payment of Rent.
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33. TENANT'S REMEDY.
Landlord shall never be personally liable under this Lease, and
Tenant shall look solely to the net cash flow received by Landlord from its
ownership of the Building, for recovery of any damages for breach of this
Lease by Landlord or on any judgment in connection therewith. None of the
persons or entities comprising or representing Landlord (whether partners,
shareholders, officers, directors, trustees, employees, beneficiaries, agents
or otherwise) shall ever be personally liable under this Lease or for any
such damages or judgment, and Tenant shall have no right to effect any levy
of execution against any assets of such persons or entities on account of any
such liability or judgment. Any lien obtained by Tenant to enforce any such
judgment, and any levy of execution thereon, shall be subject and subordinate
to all Encumbrances as specified in PARAGRAPH 27 above.
34. MORTGAGEE PROTECTION.
If Landlord defaults under this Lease, Tenant shall give written
notice of such default to any beneficiary of a deed of trust or mortgagee of
a mortgage covering the Premises, and offer such beneficiary or mortgagee a
reasonable opportunity to cure the default, including time to obtain
possession of the Premises by power of sale or a judicial foreclosure, if
such should prove necessary to effect a cure.
35. BROKERS.
Landlord and Tenant acknowledge and agree that they have utilized
the services of real estate brokers (with Cornish and Carey Commercial
representing Tenant, and BT Commercial representing Landlord) with respect to
the transactions between Landlord and Tenant that are represented by this
Lease. Tenant warrants and represents that it has had no dealings with any
other real estate broker or agent in connection with the negotiation of this
Lease, and that it knows of no other real estate broker or agent who is or
might be entitled to a commission in connection with this Lease.
36. ACCEPTANCE.
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This Lease shall only become effective and binding upon full
execution hereof by Landlord and delivery of a signed copy to Tenant. This
Lease shall not be recorded. Upon execution of this Lease, the parties shall
execute and acknowledge a Memorandum of Lease in the form attached hereto as
EXHIBIT G, which may be recorded by either Landlord or Tenant at such party's
sole expense. Upon the expiration or earlier termination of this Lease,
Tenant shall upon Landlord's request execute and acknowledge any and all
documents that in Landlord's discretion may be required in order to terminate
the Memorandum of Lease or otherwise remove the lien of the Memorandum of
Lease from the Building.
37. PARKING.
Tenant shall have the non-exclusive right, in common with any other
tenants or occupants of the Project, to use up to 3.33 unassigned parking
spaces per each one thousand (1,000) square feet of Rentable Area in the
Premises, upon terms and conditions, as may from time to time be reasonably
established by Landlord. Should parking charges or surcharges of any kind be
imposed on the parking facilities by a governmental agency, Tenant shall
reimburse Landlord for such charges and/or surcharges or, if possible, shall
pay such charges and/or surcharges directly to the governmental agency and,
in such event, Tenant shall provide Landlord with proof that such charges
and/or surcharges have been paid by Tenant.
38. GENERAL.
A. CAPTIONS. The captions and headings used in this Lease are for
the purpose of convenience only and shall not be construed to limit or extend
the meaning of any part of this Lease.
B. EXECUTED COPY. Any fully executed copy of this Lease shall be
deemed an original for all purposes.
C. TIME. Time is of the essence for the performance of each term,
condition and covenant of this Lease.
D. SEPARABILITY. If one or more of the provisions
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contained herein, except for the payment of Rent, is for any reason held
invalid, illegal or unenforceable in any respect, such invalidity,
illegality, or unenforceability shall not affect any other provision of this
Lease, but this Lease shall be construed as if such invalid, illegal or
unenforceable provision had not been contained herein.
E. CHOICE OF LAW. This Lease shall be construed and enforced in
accordance with the laws of the State of California. The language in all
parts of this Lease shall in all cases be construed as a whole according to
its fair meaning and not strictly for or against either Landlord or Tenant.
F. GENDER; SINGULAR, PLURAL. When the context of this Lease
requires, the neuter gender includes the masculine, the feminine, a
partnership or corporation or joint venture, and the singular includes the
plural.
G. BINDING EFFECT. The covenants and agreement contained in this
Lease shall be binding on the parties hereto and on their respective
successors and assigns to the extent this Lease is assignable.
H. WAIVER. The waiver by Landlord of any breach of any term,
condition or covenant, of this Lease shall not be deemed to be a waiver of
such provision or any subsequent breach of the same or any other term,
condition or covenant of this Lease. The subsequent acceptance of Rent
hereunder by Landlord shall not be deemed to be a waiver of any preceding
breach at the time of acceptance of such payment. No covenant, term or
condition of this Lease shall be deemed to have been waived by Landlord
unless such waiver is in writing and signed by Landlord. The waiver by
Tenant of any breach of any term, condition or covenant, of this Lease shall
not be deemed to be a waiver of such provision or any subsequent breach of
the same or any other term, condition or covenant of this Lease. No
covenant, term or condition of this Lease shall be deemed to have been waived
by Tenant unless such waiver is in writing and signed by Tenant.
I. ENTIRE AGREEMENT. This Lease is the entire agreement between
the parties, and there are no agreements or representations between the
parties except as expressed herein.
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Except as otherwise provided herein, no subsequent change or addition to this
Lease shall be binding unless in writing and signed by the parties hereto.
J. AUTHORITY. If Tenant is a corporation or a partnership, each
individual executing this Lease on behalf of said corporation or partnership,
as the case may be, represents and warrants that he is duly authorized to
execute and deliver this Lease on behalf of said entity in accordance with
its corporate bylaws, statement of partnership or certificate of limited
partnership, as the case may be, and that this Lease is binding upon said
entity in accordance with its terms. Landlord, at its option, may require a
copy of such written authorization to enter into this Lease.
K. EXHIBITS. All exhibits, amendments, riders and addenda
attached hereto are hereby incorporated herein and made a part hereof.
L. LEASE SUMMARY. The Lease Summary attached to this Lease is
intended to provide general information only. In the event of any
inconsistency between the Lease Summary and the specific provisions of this
Lease, the specific provisions of this Lease shall prevail.
39. EQUIPMENT LEASING/LANDLORD'S LIEN.
Notwithstanding anything herein to the contrary, Landlord waives any
and all rights, title and interest Landlord now has, or hereafter may have,
whether statutory or otherwise, to Tenant's inventory, equipment,
furnishings, trade fixtures, books and records, and personal property paid
for by Tenant located at the Premises (singly and/or collectively, the
"COLLATERAL"). Landlord acknowledges that Landlord has no lien, right, claim,
interest or title in or to the Collateral. Landlord further agrees that
Tenant shall have the right, at its discretion, to mortgage, pledge,
hypothecate or grant a security interest in the Collateral as security for
its obligations under any equipment lease or other financing arrangement
related to the conduct of Tenant's business at the Premises. Landlord
further agrees to execute and deliver within three (3) business days any UCC
filing statement or other documentation required to be
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executed by Landlord in connection with any such lease or financing
arrangement, including but not limited to a Landlord's Waiver and Consent
form.
40. RIGHT OF EARLY ENTRY.
Tenant shall have the right to enter the Premises prior to the
commencement of the Term to take reasonable preparatory measures for its
occupancy of the Premises including, without limitation, the installation of
its trade fixtures, furnishings, and telephone, telecommunications and
computer equipment, so long as Tenant does not materially interfere with the
construction of the Improvements by Landlord and Landlord's contractor. Such
entry shall be subject to all of the terms and conditions of this Lease,
except that Tenant shall not be required to pay any Rent on account thereof.
Tenant shall indemnify, defend, protect, and hold harmless Landlord from and
against any and all losses, costs, damages, liability, claims and expenses
arising from any such entry onto the Premises by Tenant.
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THIS LEASE is effective as of the date the last signatory necessary to
execute the Lease shall have executed this Lease.
TENANT:
Dated: 2/5/97 BROADVISION, INC.,
---------------------- a Delaware corporation
By: /s/ illegible
----------------------------
Its: CEO
----------------------------
By:
----------------------------
Its:
----------------------------
LANDLORD:
Dated: 2/5/97 MARTIN/CAMPUS ASSOCIATES, L.P.,
-------------------- a Delaware limited partnership
By: Martin/Redwood Associates,
L.P., a California limited
partnership, its General
Partner
By: The Martin Group of
Companies, Inc., a
California corporation,
its General Partner
By: /s/ illegible
---------------------
Its: President
---------------------
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EXHIBIT A
PREMISES
[Floorplan]
<PAGE>
EXHIBIT B
WORK LETTER AGREEMENT
THIS WORK LETTER ("Agreement") is made and entered into by and
between Landlord and Tenant as of the date of the Lease. This Agreement
shall be deemed a part of the Lease to which it is attached. Capitalized
terms which are used herein and defined in the Lease shall have the meanings
given in the Lease.
1. GENERAL.
1.1. CAPITAL IMPROVEMENTS. Prior to the Commencement Date, at
Landlord's sole cost and expense, Landlord shall do the following
(collectively, the "CAPITAL IMPROVEMENTS"):
- Remove all existing interior improvements in the Premises
including all existing restrooms (excluding the main fire
sprinkler line).
- Provide new HVAC equipment with sufficient capacity and
performance to meet the needs of office users typical of
the mid-Peninsula office market (not more than one (1)
ton HVAC per 375 square feet of space). As part of the
Capital Improvements, the supply and return ducting shall
be run from the HVAC equipment into the Premises. All
other ducting, distribution, and controls shall be part
of Tenant Improvements. HVAC units will be placed on a
concrete pad located on the ground on the exterior of the
Building. The concrete pad and HVAC equipment will be
screened. Tenant's HVAC equipment will be dedicated to
Tenant's sole use. Air handler units will be located
within the Tenant's space, above the restroom core (if at
all possible).
- Provide 2,000 amp. 480 volt electrical service to the
Building, with capacity to provide power to the main HVAC
equipment plus a total of seven (7) watts per square foot
for lighting and power. The 2,000 amp. service will be
divided pro rata between the tenants in the Building on
the basis
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of the square footage that each tenant
occupies. Each tenant in the Building will be separately
metered for electricity. The Capital Improvements will
include a transformer to be located on a screened pad on
the exterior of the Building with PG&E pull section into
the main electrical room located in the southwest corner
of the Building. The electrical room will contain a house
panel with controls for exterior shell lighting. All
conduit, wiring devices, and controls downstream of the
main panel shall be part of the Tenant Improvements.
Electrical conduit and wiring to the main HVAC equipment
will be a Capital Improvement.
- All conduit for the distribution of electrical power and
telephone service to the unoccupied space in the Building
will be installed as part of Capital Improvements prior
to completion of the Tenant Improvements.
- Remove the existing roof and replace it with a 3-ply
built-up roof with a mineral-surfaced cap sheet. Install
four (4) domed plastic skylights (4 feet x 8 feet each)
at locations to be mutually agreed upon by Tenant and
Landlord. Additional skylights can be added to the roof
as a Tenant Improvement Cost, including any additional
structural alterations.
- Add window and door openings to the exterior of Tenant's
space as follows:
Broadway elevation - a total of eight (8) openings
Douglas elevation - a total of five (5) openings Bay Road
elevation - a total of eight (8) openings
Subject to structural engineering considerations,
additional openings to the Building shell can be added as
a Tenant Improvement.
- Perform any exterior ADA and exterior code-related work
required by the City of Redwood City in
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connection with the initial construction of the Premises,
including seismic upgrade to the Building shell to
substantially meet the current UBC standard with
California Amendments.
- Remove all interior and exterior hazardous materials
including asbestos and any hazardous wastes.
- Resurface, re-stripe, and landscape the Parking Area
adjacent to the Building, and install new lighting at
such Parking Area, all in compliance with Title 24 of the
California Building Code and ADA.
- Provide two (2) 4-inch conduits to a telephone closet in
the Building, at the end of the Building closest to the
point of origin.
- Install a full height, 2 hour rated demising wall in the
location depicted on EXHIBIT A to the Lease. In
addition, a second 2 hour rated full height wall, to be
located within Tenant's space and as also depicted on
EXHIBIT A to the Lease, will be constructed as part of
the Capital Improvements. Any openings in this second
wall must meet a 2 hour rating and will be constructed as
a Tenant Improvement Cost.
- Tenant will be permitted to install a back-up electrical
generator on the exterior of the Building as a Tenant
Improvement. Any cost to expand and screen an equipment
pad will also be a Tenant Improvement Cost.
Except for its obligation to perform the Capital Improvements and the Tenant
Improvements as set forth in this Lease and the Work Letter, Landlord shall
have no obligation whatsoever to do any work or perform any improvements
whatsoever to any portion of the Premises or the Building; provided, however,
that the Tenant Improvements shall be performed at the sole cost and expense
of Tenant. Landlord shall cause Contractor (as defined below) to perform all
initial leasehold improvements, in accordance with
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the approved Final Plans and as otherwise may be required to comply with
applicable law (collectively, the "TENANT IMPROVEMENTS"). The parties
acknowledge and agree that the Capital Improvements and the Tenant
Improvements constitute all of the work required to enable Tenant to occupy,
and operate its business in, the Premises. If Landlord materially alters the
current landscape, parking and lighting plans for the Project before the
Commencement Date, then Landlord shall consult with Tenant regarding such
modification, but Tenant shall have no approval rights regarding such
modification. Landlord shall (i) cause, through Contractor, the Capital
Improvements to be performed in a good and workmanlike manner using new
materials and in accordance with all applicable legal requirements, and (ii)
use its best efforts to cause, through Contractor, the Improvements to be
performed in accordance with the schedule attached hereto as Exhibit B-2 (the
"Schedule"); provided, however, that Landlord's obligation to use reasonable
efforts to cause the Tenant Improvements to be performed in accordance with
the Schedule shall be subject to and dependent upon Tenant's compliance with
the Schedule and the terms of this Agreement; and provided further, that if
Landlord or Contractor is delayed in the performance of the Improvements
because of acts of any other party, actions of the elements, acts of nature,
war, riot, strikes, lockouts, labor disputes, inability to procure or general
shortage of labor or materials in the normal channels of trade, or delay in
governmental action or inaction where action is required, then the period for
Landlord's performance of the Improvements shall be extended for a period
equivalent to the period of such delay. Landlord, at its sole cost, shall
obtain all permits, licenses and authorizations required in connection with
the Capital Improvements.
1.2. TENANT IMPROVEMENT COSTS. The cost of performing the Tenant
Improvements, including without limitation the costs described in PARAGRAPH 6
below (collectively, the "TENANT IMPROVEMENT COSTS") shall be paid by Tenant
in the manner set forth in PARAGRAPH 5 below.
2. APPROVAL OF PLANS FOR TENANT IMPROVEMENTS.
2.1. ARCHITECT. Tenant has selected Design Mark ("ARCHITECT") for
the design and preparation of plans for the Tenant Improvements. Tenant
shall retain Architect's
4
<PAGE>
administrative services throughout the performance of the Tenant Improvements.
2.2. SUBMITTAL OF PLANS.
2.2.1. PRELIMINARY PLANS. Tenant shall cause Architect to
prepare preliminary plans (the "PRELIMINARY PLANS") for the Tenant
Improvements to be performed at the Premises. Tenant shall cause Architect
to deliver the Preliminary Plans to Landlord on or before February 28, 1997.
Within five (5) days after Landlord's receipt of the Preliminary Plans,
Landlord shall either approve or disapprove the Preliminary Plans, which
approval shall not be unreasonably withheld. Failure of Landlord to approve
or disapprove the Preliminary Plans within such five-day period shall be
deemed to constitute Landlord's approval of the Preliminary Plans. If
Landlord disapproves the Preliminary Plans, then Landlord shall state in
reasonable detail the changes which Landlord requires to be made thereto.
Tenant shall submit to Landlord revised Preliminary Plans within five (5)
days after Tenant's receipt of Landlord's disapproval notice. Following
Landlord's receipt of the revised Preliminary Plans from Tenant, Landlord
shall have the right to review and approve the revised Preliminary Plans
pursuant to this PARAGRAPH 2.2.1. Landlord shall give Tenant written notice
of its approval or disapproval of the revised Preliminary Plans within five
(5) days after the date of Landlord's receipt thereof. Failure of Landlord
to approve or disapprove the Preliminary Plans within such five-day period
shall be deemed to constitute Landlord's approval of the revised Preliminary
Plans. If Landlord disapproves the revised Preliminary Plans, then Landlord
and Tenant shall continue to follow the procedures set forth in this
PARAGRAPH 2.2.1 until Landlord and Tenant approve the Preliminary Plans in
accordance with this PARAGRAPH 2.2.1.
2.2.2. PRELIMINARY BUDGET. Landlord intends to retain Devcon
Construction ("CONTRACTOR") as the general contractor for the construction of
the Tenant Improvements. No later than March 7, 1997, Contractor shall
prepare a preliminary budget for the Tenant Improvements based upon the
approved Preliminary Plans, which Contractor shall submit to Tenant for its
review and approval. On or before March 21, 1997, Tenant and Landlord shall
review and approve the Preliminary Plans and the preliminary budget.
5
<PAGE>
2.2.3. FINAL PLANS. No later than March 24, 1997, Tenant shall
cause Architect to commence preparing complete plans, specifications and working
drawings which incorporate and are consistent with the approved Preliminary
Plans and preliminary budget, and which show in detail the intended design,
construction and finishing of all portions of the Tenant Improvements described
in the Preliminary Plans (collectively, the "FINAL PLANS"). Tenant shall cause
Architect to deliver the Final Plans to Landlord, for Landlord's review and
approval, no later than April 21, 1997. Within five (5) days after Landlord's
receipt of the Final Plans, Landlord shall either approve or disapprove the
Final Plans, which approval shall not be unreasonably withheld. Landlord's
failure to approve or disapprove the Final Plans within such five-day period
shall be deemed to constitute Landlord's approval of the Final Plans. If
Landlord disapproves the Final Plans, then Landlord shall state in reasonable
detail the changes which Landlord requires to be made thereto. Tenant shall
submit to Landlord revised Final Plans within five (5) days after Tenant's
receipt of Landlord's disapproval notice. Following Landlord's receipt of the
revised Final Plans from Tenant, Landlord shall have the right to review and
approve the revised Final Plans pursuant to this PARAGRAPH 2.2.3. Landlord
shall give Tenant written notice of its approval or disapproval of the revised
Final Plans within five (5) days after the date of Landlord's receipt thereof.
Landlord's failure to approve or disapprove the Final Plans within such five-day
period shall be deemed to constitute Landlord's approval of the revised Final
Plans. If Landlord disapproves the revised Final Plans, then Landlord and
Tenant shall continue to follow the procedures set forth in this PARAGRAPH 2.2.3
until Landlord and Tenant reasonably approve such Final Plans in accordance with
this PARAGRAPH 2.2.3.
3. CONSTRUCTION BUDGET. Upon approval by Landlord and Tenant of the
Final Plans, Landlord shall instruct Contractor to obtain competitive bids for
the Tenant Improvements from at least three (3) qualified subcontractors for
each of the major subtrades (excluding the mechanical, electrical and fire
sprinkler trades, which shall be on a design/build basis, unless Landlord elects
to competitively bid these trades) and to submit the same to Tenant for its
review and approval. Upon selection of the subcontractors and approval of the
bids, Contractor shall
6
<PAGE>
prepare a cost estimate for the Tenant Improvements described in such Final
Plans, based upon the bids submitted by the subcontractors selected. No
later than May 2, 1997, Contractor shall submit such cost estimate to Tenant
for its review and approval. Tenant may approve or reject such cost estimate
in its reasonable sole discretion. If Tenant rejects such cost estimate,
Tenant shall resolicit bids based on such Final Plans, in accordance with the
procedures specified above. Following any resolicitation of bids by Tenant
pursuant to this PARAGRAPH 3, Tenant shall again follow the procedures set
forth in this PARAGRAPH 3 with respect to the submission and reasonable
approval of the cost estimate from Contractor.
4. LANDLORD TO CONSTRUCT. Landlord shall cause Contractor to construct
the Tenant Improvements in a good and workmanlike manner, in accordance with
the approved Final Plans and in compliance with all applicable laws.
Architect shall be responsible for obtaining all necessary building permits
and approvals and other authorizations from governmental agencies required in
connection with the Tenant Improvements. The cost of all such permits and
approvals, including inspection and other building fees required to obtain
the permits for the Tenant Improvements, shall be included as part of the
Tenant Improvement Costs. Tenant shall have the benefit of any warranties
provided by Contractor, the subcontractors and suppliers in connection with
the Tenant Improvements.
5. PAYMENT FOR TENANT IMPROVEMENTS. The Tenant Improvement Costs shall
be paid solely by Tenant as follows:
5.1. SET-ASIDE FUNDS. Within five (5) days after Tenant has
approved the cost estimate for the Tenant Improvements pursuant to PARAGRAPH
3 above, Tenant shall deposit into a separate account with any financial
institution designated by Landlord, subject to restrictions in favor of such
financial institution, an amount (the "SET-ASIDE FUNDS") equal to the Tenant
Improvement Costs, based on the assumption that the Tenant Improvement Costs
shall equal such cost estimate. Landlord shall instruct such financial
institution to hold the Set-Aside Funds in a separate interest-bearing
account with interest to accrue for Tenant's account, and shall utilize the
Set-Aside Funds to pay for the Tenant Improvement Costs in the manner set
forth in this PARAGRAPH 5.
7
<PAGE>
5.2. PAYMENT. As and when any Tenant Improvement Costs become due
and payable, and so long as Landlord has delivered to Tenant copies of
unconditional lien releases from Contractor and the major subcontractors
covering the work for which such Tenant Improvement Costs are payable,
Landlord shall request such financial institution to utilize the remaining
Set-Aside Funds to pay such amounts; provided, however, that if at any time
there are insufficient Set-Aside Funds to pay any amount of the Tenant
Improvement Costs, Tenant shall pay any and all such Tenant Improvement Costs
to Landlord within ten (10) days after the date of Tenant's receipt of
Landlord's written request therefor; and provided further, that Landlord
shall use reasonable efforts to provide for commercially reasonable holdbacks
with respect to the payment of the Tenant Improvement Costs. Any failure by
Tenant to pay any Tenant Improvement Costs as and when required under this
Agreement shall constitute a default by Tenant under the Lease.
5.3. PENALTIES. To the extent that any contractor or subcontractor
working on the Tenant Improvements imposes upon Landlord any penalty or late
charge due to Tenant's failure to pay to Landlord any amount due under this
PARAGRAPH 5.3 as and when such amount is due, Tenant shall be solely
responsible for paying such penalty or late charge.
6. TENANT IMPROVEMENT COSTS. The Tenant Improvement Costs shall
include all reasonable costs incurred in connection with the Tenant
Improvements (but not the Capital Improvements), as determined by Landlord in
its reasonable discretion, including the following:
(a) All costs of space plans and other architectural and
engineering plans and specifications for the Tenant Improvements, including
engineering costs associated with completion of the State of California
energy utilization calculations under Title 24 legislation required in
connection with the Tenant Improvements;
(b) All costs of obtaining building permits and other necessary
authorizations from the City of Redwood City;
(c) All costs of interior design and finish schedule
8
<PAGE>
plans and specifications, including as-built drawings by Architect;
(d) All direct and indirect costs of procuring, constructing and
installing the Tenant Improvements in the Premises, including, but not
limited to, the construction fee payable to the Contractor for overhead and
profit, and the cost of all on-site supervisory and administrative staff,
office, equipment and temporary services rendered by Contractor in connection
with construction of the Tenant Improvements;
(e) All fees payable to Architect and Landlord's engineering firm
if they are required by Tenant to redesign any portion of the Tenant
Improvements following Tenant's approval of the Final Plans;
(f) Sewer connection fees (if any);
(g) All direct and indirect construction costs associated with
complying with Title 24 legislation and ADA compliance for all interior
improvements (including the reconstruction of all restrooms); and
(H) A construction management fee payable to Landlord equal to (i)
three percent (3%) of all Tenant Improvement Costs up to an amount (the
"Breakpoint Amount") equal to Thirty Dollars ($30.00) multiplied by the total
number of square feet of Rentable Area contained in the Premises, plus (ii)
one and one-half percent (11/2%) of all Tenant Improvement Costs in excess of
the Breakpoint Amount.
7. CHANGE REQUESTS. No revisions to the approved Final Plans shall be
made by either Landlord or Tenant unless approved in writing by both parties.
Landlord agrees to make all changes (i) required by any public agency to
conform with governmental regulations, or (ii) requested in writing by Tenant
and approved in writing by Landlord, which approval shall not be unreasonably
withheld. Any costs related to such changes shall be added to the Tenant
Improvement Costs and shall be paid for in accordance with PARAGRAPH 5. The
billing for such additional costs shall be accompanied by evidence of the
amounts billed as is customarily used in the business. Costs related to
changes shall include, without limitation, any architectural, structural
engineering, or
9
<PAGE>
design fees, and the Contractor's price for effecting the change. Any change
order which may extend the date of substantial completion of the Tenant
Improvements may be disapproved by Landlord unless Tenant agrees that for all
purposes under this Lease, the Tenant Improvements shall be deemed to have
been substantially completed on that date on which such Tenant Improvements
would have been substantially completed without giving effect to the change
order in question.
LANDLORD: TENANT:
MARTIN/CAMPUS ASSOCIATES, L.P., BROADVISION, INC.,
a Delaware limited partnership a Delaware corporation
By: Martin/Redwood Associates, By: /s/ illegible
L.P., a California limited ---------------------------
partnership, its General Its: CEO
Partner --------------------------
By:
By: The Martin Group of --------------------------
Companies, Inc., a Its:
California corporation, --------------------------
its General Partner
By: /s/ illegible
--------------------------
Its: President
-------------------------
10
<PAGE>
EXHIBIT B-2
[LOGO]
BROADVISION
PROPOSED SCHEDULE FOR TENANT IMPROVEMENTS
31-JAN-97
14-FEB-97 Present preliminary plan to BroadVision
21-FEB-97 Incorporate BroadVision review comments and refine preliminary
plan
28-FEB-97 Martin Group and BroadVision review of Preliminary Plan;
preliminary review with RWC
07-MAR-97 DevCon to present preliminary construction budget
14-MAR-97 Complete modifications to Preliminary Plan in response to
construction budget and RWC
19-MAR-97 DevCon to present adjusted construction budget
21-MAR-97 Martin Group and BroadVision review and approval of Preliminary
Plan and construction budget
24-MAR-97 DesignMark to commence with construction documents
21-APR-97 DesignMark to complete construction documents and submit to RWC
for permit
02-MAY-97 DevCon to present final construction pricing
09-MAY-97 BroadVision and DesignMark review and approval of final
construction pricing
23-MAY-97 DesignMark to secure building permit from RWC
(Design/Build contractors are responsible for their own permits)
26-MAY-97 DevCon to commence with construction
01-AUG-97 DevCon to complete construction
08-AUG-97 BroadVision and DesignMark review construction and prepare
Punch List, begin furniture installation
31-AUG-97 DevCon to complete Punch List, complete furniture installation
01-SEP-97 BroadVision move in
[LETTERHEAD]
<PAGE>
EXHIBIT C
SITE PLAN FOR PROJECT
<PAGE>
EXHIBIT D
COMMENCEMENT DATE MEMORANDUM
LANDLORD: Martin/Campus Associates, L.P.
TENANT:
------------------------------
LEASE DATE:
------------------------------
PREMISES:
--------------------------------------------------------------
Pursuant to PARAGRAPH 4.A. of the above referenced Lease, the
<PAGE>
commencement date is hereby established as _________________ for
_______________________________, Redwood City, CA 94063. The Commencement
Date as defined in PARAGRAPH 4.A shall be __________________.
TENANT:
Dated BROADVISION, INC.,
-------------------- a Delaware corporation
By:
--------------------------------------
Its:
--------------------------------------
By:
--------------------------------------
Its:
--------------------------------------
LANDLORD:
Dated MARTIN/CAMPUS ASSOCIATES, L.P.,
----------------- a Delaware limited partnership
By: Martin/Redwood Associates,
L.P., a California limited
partnership, its General
Partner
By: The Martin Group of
Companies, Inc., a
California corporation,
its General Partner
By:
------------------------------
Its:
------------------------------
2
<PAGE>
EXHIBIT E
---
[LETTERHEAD]
August 6, 1996
SMS No. 41-0691(gal)
Lou Gilmore
Ampex Systems Corporation
401 Broadway, M.S. I-40
Redwood City, CA 94063-3199
Subject: Soil Excavation, Inactive waste oil, open-grate, and
closed-grate sumps, Building 2, Ampex Corp. Campus, 401 Broadway,
Redwood City, California. No Further Action
Dear Mr. Gilmore:
Regional Board staff have reviewed Geomatrix Consultants, Inc. (Geomatrix)
letter report of 24 July 1996, submitted on behalf of Ampex Corporation
(Ampex) and presents the analytical data collected during removal of the
inactive waste oil and closed-grate sumps (sumps) and surrounding affected
soil at Building 2 on the Ampex campus in Redwood City. Based upon the
results presented in the letter report of 24 July 1996, Geomatrix recommends
that no further action be required of Ampex for the closure of the sumps.
Based upon the analytical results of sidewall and bottom soil samples from
the excavation at the sumps, remaining soils contain less than 1mg/kg total
VOC's and low concentrations of TPHd. The concentrations of contaminants in
soil meet or exceed Board cleanup criteria. Furthermore, grab groundwater
results indicate that groundwater in the vicinity of the sumps has not been
affected by the sumps. Based upon Board staff's site inspections during
excavation, review of the case file and the resulting analytical data from
the excavation, we concur with Geomatrix that no further action be required
by Ampex for closure of the sumps.
This letter shall also serve as the remedial action completion certificate
for the former open-grate sump (also located at Building 2), which Board
staff observed to be filled with concrete as authorized by Regional Board
letter dated November 29, 1995. In that letter Board staff approved the
recommendation by Geomatrix to abandon the sump in place and fill it with
concrete.
Based upon the available information, including the current land use, and
with the provision that the information provided to this agency was accurate
and representative of site conditions, no further action related to the
open-grate, inactive waste oil, and closed-grate sumps is required. If a
change in land use is proposed, the owner must promptly notify this agency.
If you have any questions or comments please contact George Lincoln at
(510) 286-3815.
Sincerely,
Loretta K. Barnamian
Executive Officer
/s/ Stephen I. Morse
Stephen I. Morse, Chief
Toxics Cleanup Division
cc: Michele Shoemaker - San Mateo County Department of Health Services
Elizabeth Wells - Geomatrix Consultants
<PAGE>
EXHIBIT F
---
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
COMERICA BANK-CALIFORNIA
333 W. Santa Clara Street, 2nd Floor
San Jose, CA 95113
Attn:
-------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE AGREEMENT
NOTICE: THIS SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE AGREEMENT RESULTS
IN YOUR LEASEHOLD INTEREST BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE
LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT.
THIS SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE AGREEMENT
("Agreement"), dated as of _____________, 19__, between COMERICA
BANK-CALIFORNIA, a California Banking Corporation ("Beneficiary"),
____________________________ ("Owner") and ______________________________
("Tenant"), is as follows:
Owner and Tenant have entered into that certain Lease dated
____________, 19__, together with any amendments, modifications, renewals or
extensions thereof ("Lease") pursuant to which Owner leased to Tenant and
Tenant leased from Owner the premises more particularly described in the
Lease ("Premises") and located on the real property described in Exhibit "A"
attached hereto (the "Secured Property"). Owner [has obtained][may obtain]
financing for the Secured Property and [has executed][may execute] a
promissory note in the [approximate] principal amount of __________________
Dollars ($___________) ("Note") in favor of Beneficiary, payment of which is
secured by a [Construction] Deed of Trust, Security Agreement and Assignment
of Real Property Leases encumbering the Secured Property.
In order [to induce Beneficiary to make the above-described loan to Owner
and] to establish certain safeguards and priorities with respect to their
respective rights in connection with the Premises, Beneficiary has requested
that Owner obtain certain warranties and agreements from Tenant as
hereinafter set forth. In consideration of the mutual benefits accruing to
the parties hereto, the receipt of which is hereby acknowledged, the parties
agree as follows:
1. SUBORDINATION. The Lease is and at all times shall continue to be
subject and subordinate to the Note and the lien of the Deed of Trust and to
all advances made or to be made thereunder, and to any renewals, extensions,
modifications or replacements thereof, unless Beneficiary has filed a notice
subordinating the lien of its Deed of Trust to the Lease. Beneficiary
specifically reserves the right to file such a notice at its sole election.
Tenant shall not subordinate the Lease to any lien, claim, mortgage, deed of
trust, or other encumbrance of any kind, except as provided in this
paragraph, and any such other subordination shall be deemed a default under
the Lease and this Agreement. Tenant agrees to execute and deliver to
Beneficiary or to any party to whom Tenant hereby agrees to attorn, in form
and substance satisfactory to such party, such other instrument as either
shall request in order to effectuate the provisions of this Agreement.
2. LIMITATION ON LIABILITY. Nothing herein contained shall impose
any obligation upon Beneficiary to perform any of the obligations of Owner
under the Lease unless and until Beneficiary shall become an owner or
mortgagee in possession of the Premises, and Beneficiary shall have no
personal liability to Tenant beyond Beneficiary's interest in the Secured
Property.
-1-
<PAGE>
3. ATTORNMENT. In the event of a foreclosure or other acquisition of
the Premises, the Lease shall be recognized as a direct lease from the
Beneficiary, the purchaser at the foreclosure sale or any such subsequent
owner (collectively referred to as "Purchaser"), except Purchaser shall not
be (i) liable for any previous act or omission of Owner under the Lease; (ii)
subject to any offset which shall theretofore have accrued to Tenant against
Owner; (iii) subject to any obligation with respect to any security deposit
under the Lease unless such security has been physically delivered to
Purchaser; or (iv) bound by any previous modification or prepayment of rents
or other sums due under the Lease greater than one month unless such
modification or prepayment shall have been expressly approved in writing by
Purchaser, which approval shall not be unreasonably withheld.
If Beneficiary elects to accept from Owner a deed in lieu of
foreclosure, Tenant's right to receive or set off any moneys or obligations
owed or to be performed by the then Owner shall not be enforceable thereafter
against Beneficiary.
4. NON-DISTURBANCE. So long as no default exists, nor any event has
continued to exist for such period of time (after notice, if any, required by
the Lease) as would entitle Owner under the Lease to terminate the Lease or
would cause, without any further action of Owner, the termination of the
Lease or would entitle Owner to dispossess Tenant thereunder, the Lease shall
not be terminated nor shall Tenant's use, possession, or enjoyment of the
Premises be interfered with, nor shall the leasehold estate granted by the
Lease be affected in any foreclosure, or in any action or proceeding
instituted under or in connection with the Deed of Trust.
5. PAYMENT OF RENT ON DEFAULT. Tenant acknowledges and agrees that the
Lease has been assigned to Beneficiary by Owner as security for its
obligations under, and secured by, the Note and Deed of Trust. Tenant agrees
that, upon receipt of notice from Beneficiary that a default exists under the
Note or Deed of Trust, or any instrument or document collateral thereto,
Tenant shall make all rental and other payments required pursuant to the
Lease, as directed by written instruction from Beneficiary. Tenant may make
payments to Beneficiary directly in the event of such a default, for which
written notice has been delivered to Tenant, and thereby be properly credited
with an offset and credit for such payments as against the rental payments
then due under the Lease.
Owner acknowledges and agrees that Beneficiary shall be entitled to
collect and receive rents pursuant to the Lease as provided herein and Tenant
is authorized and hereby directed to make all such payments of rent to
Beneficiary upon receipt of the notice of default provided that Tenant shall
be under no duty or obligation to make further inquiry. Tenant shall continue
to make all such payments of rent to Beneficiary unless and until Tenant is
otherwise authorized and directed in writing by Beneficiary.
6. FURTHER DOCUMENTS. Tenant shall execute and deliver to Beneficiary
or to any party to whom Tenant hereby agrees to attorn, in form and substance
satisfactory to such party, such other instruments as either shall request in
order to effectuate the provisions of this Agreement.
7. SUBORDINATION. Tenant declares, agrees and acknowledges that it
intentionally and unconditionally subordinates the Lease and its leasehold
interest in favor of the lien or charge upon the Secured Property of the Deed
of Trust in favor of Beneficiary.
8. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon the parties hereto, their successors and assigns, and
the holder from time to time of the Note.
9. ATTORNEYS' FEES. If any legal action, arbitration or other
proceeding is commenced to enforce any provision of this Agreement, the
prevailing party shall be entitled to an award of its actual expenses,
including without limitation, expert witness fees, actual attorneys' fees and
disbursements.
10. NOTICES. All notices to Beneficiary shall be by certified mail to
the address given at the top of page one of this Agreement. All notices to
Tenant shall be by certified mail to the Premises.
-2-
<PAGE>
11. MISCELLANEOUS. This Agreement may not be modified other than by an
agreement in writing, signed by the parties hereto or by their respective in
interest. Except as herein modified all of the terms and provisions of the
Lease shall remain in full force and effect. In the event of a conflict
between the Lease and this Agreement, the terms and provisions of this
Agreement shall control. Nothing in this Agreement shall in any way impair or
affect the lien created by the Deed of Trust or the other lien rights of
Beneficiary.
12. COUNTERPART. This Agreement may be executed in counterparts which
together shall constitute but one and the same original.
BENEFICIARY:
COMERICA BANK-CALIFORNIA,
a California Banking Corporation
By:_________________________________
Its:_________________________________
OWNER:
By:_________________________________
Its:_________________________________
By:_________________________________
Its:_________________________________
TENANT:
By:_________________________________
Its:_________________________________
By:_________________________________
Its:_________________________________
<PAGE>
STATE OF CALIFORNIA )
COUNTY OF ) ss.
------------------------- )
On , 19 , before me, the undersigned, a Notary
Public in and for said State, personally appeared ,
personally known to me (or proved to me on the basis of satisfacory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
----------------------------------
NOTARY PUBLIC
STATE OF CALIFORNIA )
COUNTY OF ) ss.
------------------------- )
On , 19 , before me, the undersigned, a Notary
Public in and for said State, personally appeared ,
personally known to me (or proved to me on the basis of satisfacory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
----------------------------------
NOTARY PUBLIC
STATE OF CALIFORNIA )
COUNTY OF ) ss.
------------------------- )
On , 19 , before me, the undersigned, a Notary
Public in and for said State, personally appeared ,
personally known to me (or proved to me on the basis of satisfacory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
----------------------------------
NOTARY PUBLIC
-4-
<PAGE>
EXHIBIT A
DESCRIPTION OF SECURED PROPERTY
[To Be Attached]
[Xerox of a Check]