California-San Jose-2870 Zanker Road Lease - Metropolitan Life Insurance Co. and Business Objects Inc.
LINCOLN PARK
LEASE AGREEMENT
BASIC LEASE INFORMATION
LEASE DATE: January 18, 1996
LESSOR: METROPOLITAN LIFE INSURANCE COMPANY
LESSEE: BUSINESS OBJECTS, INC. a Delaware corporation
PREMISES: The Premises referred to in this Lease are located at
2870 Zanker Road, San Jose, California 95134
and consist of approximately 58,551 rentable square feet of
space. Lessee's Proportionate Share of Building: 100%
Lessee's Proportionate Share of Park: 19.02%
TERM: The term shall commence on: May 1, 1996
and shall expire on: April 30,2001
RENT: $87,826.50 per month payable on the first day of each month
until October 31, 1998 then to $90,754.05 per month payable on
the first day of each month until April 30, 2001.
USE: Lessee shall use the Premises solely for general office uses.
SECURITY
DEPOSIT: $90,754.05
PARKING: Lessee shall have use of two hundred thirty four (234)
undesignated parking stalls.
BROKER: CB Commercial and Colliers Parrish International, Inc.
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TABLE OF CONTENTS
PARAGRAPH DESCRIPTION PAGE NUMBER
1. PREMISES.................................... 3
2. ACCEPTANCE OF PREMISES...................... 3
3. COMMON AREAS................................ 3
4. POSSESSION.................................. 3
5. RENT........................................ 3
6. SECURITY DEPOSIT............................ 4
7. OPERATING EXPENSES.......................... 4
8. PERSONAL PROPERTY TAXES..................... 5
9. SERVICES AND UTILITIES...................... 5
10. USE......................................... 6
11. COMPLIANCE WITH THE LAW..................... 7
12. ALTERATIONS AND ADDITIONS................... 8
13. REPAIRS AND MAINTENANCE..................... 8
14. WASTES...................................... 8
15. LIENS....................................... 8
16. ASSIGNMENTS AND SUBLETTING.................. 9
17. INDEMNITY................................... 10
18. DAMAGE TO PREMISES OR BUILDING.............. 10
19. LIMITATION OF LIABILITY..................... 10
20. LESSEE'S INSURANCE.......................... 10
21. AD VALOREM TAXES............................ 11
22. WAIVER...................................... 11
23. ENTRY BY LESSOR............................. 11
24. CASUALTY DAMAGE............................. 12
25. CONDEMNATION................................ 13
26. LESSEE'S DEFAULT............................ 14
27. REMEDIES FOR LESSEE'S DEFAULT............... 14
28. SURRENDER OF PREMISES....................... 15
29. DEFAULT BY LESSOR........................... 16
30. PARKING..................................... 16
31. ESTOPPEL CERTIFICATE........................ 16
32. SALE OF PREMISES............................ 16
33. SUBORDINATION, ATTORNMENT................... 16
34. AUTHORITY OF PARTIES........................ 17
35. BROKERS..................................... 17
36. HOLDING OVER................................ 17
37. RULES AND REGULATIONS....................... 17
38. INTENTIONALLY DELETED....................... 18
39. OPTION TO EXTEND............................ 18
40. GENERAL PROVISIONS.......................... 19
41. NOTICES..................................... 21
LIST OF EXHIBITS
A. SITE PLAN AND EXISTING FLOOR PLAN
B. WORK LETTER AND CONSTRUCTION AGREEMENT (ALLOWANCE)
C. RENT SCHEDULE
D. SUMMARY OF COVENANTS, CONDITIONS AND RESTRICTIONS
E. RULES AND REGULATIONS
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LEASE AGREEMENT
This Lease is made and entered into as of the Lease Date defined on page 1.
The Basic Lease Information set forth on page 1 and this Lease are and shall be
construed as a single instrument.
1 . PREMISES: Lessor hereby leases to Lessee and Lessee hereby leases from
Lessor upon the terms and conditions contained herein the Premises in the
Building included in Lincoln Park, which are more particularly described in
Exhibit A attached hereto and made a part hereof (the "Premises") and the tenant
improvements (the "Tenant Improvements") thereon to be constructed in accordance
with Exhibit A attached hereto and made a part hereof. As hereinafter used in
this Lease, the term "Building" shall refer to the entire structure in which the
Premises are located, the term "Lot" shall refer to the Assessor's tax parcel on
which the Building is situated, and the term "Park" shall refer to the Lincoln
Park project as shown on Exhibit A.
2. ACCEPTANCE OF PREMISES: Lessee's taking possession of the Premises
shall constitute Lessee's acknowledgment that the Premises are in good condition
and that the Tenant Improvements are constructed in accordance with the criteria
set forth in Exhibit A.
3. COMMON AREAS: The term "Common Areas" shall refer to all areas and
facilities outside the Premises and within the Park that are provided and
designated by Lessor from time to time for the general nonexclusive use of
Lessor, Lessee, and of other lessees in the Park and their representative
employees, suppliers, shippers, customers, and invitees. Lessor hereby grants
to Lessee, during the term of this Lease, the nonexclusive right to use, in
common with others entitled to such use, the Common Areas as they exist from
time to time, subject to any rules, regulations, and restrictions, governing the
use of the Park. Under no circumstances shall the right granted herein to use
the Common Areas be deemed to include the right at any time to make alterations
in or additions to the Park and to the Common Areas.
4. POSSESSION:
a. Lessor shall deliver possession of the Premises to Lessee on the
later of the term commencement date as set forth in the Basic Lease Information
on page 1 (the "Commencement Date"), or the date when the Premises are
substantially complete. For purposes of the foregoing, the Premises shall be
deemed to be substantially complete on the earlier of (i) the issuance of a
certificate of occupancy by the City of San Jose, or (ii) when Lessee has direct
access to the Premises with building services ready to be furnished to the
Premises and all construction to be provided by Lessor, as set forth in Exhibit
A, has been completed, with the exception of "punchlist" or similar corrective
work. If the Premises are not substantially complete for any reason by the
Commencement Date, or if Lessor is unable to deliver possession because a
previous occupant is holding over, or for any other reason beyond the reasonable
control of Lessor, Lessor shall not be liable for any claims, damages, or
liabilities in connection therewith or by reason thereof. Provided that such
delay has not been caused by an act, failure to act, or any other omission of
Lessee, rent shall be abated during the period between the Commencement Date and
the time when Lessor delivers possession, and the term shall be extended by the
length of time between the Commencement Date and the date Lessor delivers
possession of the Premises, which date shall be confirmed in writing by Lessor
and Lessee. Notwithstanding the foregoing, if Lessee is to construct the Tenant
Improvements, the Lease shall commence and Lessor shall deliver possession of
the Premises on the Commencement Date, regardless of whether or not Lessee has
completed the Tenant Improvements.
b. In the event that Lessor permits Lessee to occupy the Premises
prior to the Commencement Date, such occupancy shall be subject to all the
provisions of this Lease.
5. RENT: Lessee agrees to pay to Lessor as rent for the Premises (the
"Rent"), without prior notice or demand, the amount of Rent set forth in the
Basic Lease Information on page 1 and as shown on the Rent Schedule attached
hereto as Exhibit C and made a pan hereof Rent shall be payable on or before the
first day of each month throughout the term of the Lease, except that the first
month's Rent shall be paid upon the execution of this Lease. Rent for any
period during the term hereof which is for less than one (1) month shall be a
prorated portion of the monthly installment based upon a thirty (30) day
month. Rent shall be paid in full without abatement, deduction, or offset.
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Lessee shall pay Rent to Lessor at 101 Lincoln Centre Drive, Foster City,
California 94404, or to such other person or at such other place as Lessor may
from time to time designate in writing. Rent as set forth on page 1 and on
Exhibit C includes Lessee's share of Operating Expenses as specified in
paragraph 7, taxes as specified in paragraph 8, and utilities referred to in
paragraph 9 below, and the term "Rent" whenever used herein refers to all of
these amounts.
The Rent has been established in contemplation that Lessee -will occupy the
Premises for the entire term. In the event of an assignment or sublease of the
Lease, Lessor and Lessee have agreed that Lessor shall have the rights provided
in paragraph 16 of this Lease and Lessee expressly acknowledges and agrees that
such agreement was a material inducement to Lessor in establishing the Rent and
that Lessor has relied on this agreement in executing this Lease.
6. SECURITY DEPOSIT: Upon execution of this Lease, Lessee shall deposit
with Lessor the sum shown in the Basic Lease Information on page 1 as security
for the full and faithful performance by Lessee of the provisions of this Lease
(the "Security Deposit"). If Lessee is in default, Lessor may use the Security
Deposit, or any portion of it, to cure the default or to compensate Lessor for
all damage which Lessor may suffer by reason of Lessee's default. Lessee shall
immediately on demand pay to Lessor a sum equal to the portion of the Security
Deposit expended or applied by Lessor as provided in this paragraph so as to
maintain the Security Deposit in the sum initially deposited with Lessor. At
the expiration or termination of this Lease, Lessor shall return the Security
Deposit to Lessee, less such amounts as are reasonably necessary to remedy
Lessee's defaults in payment of Rent, to repair damages to the Premises caused
by Lessee, or to clean the Premises upon such termination, as soon as
practicable thereafter. Lessor's obligations with respect to the Security
Deposit are those of a debtor and not a trustee. Lessor can maintain the
security deposit separate and apart from Lessor's general funds or can commingle
the Security Deposit with Lessor's general and other funds. Lessor shall not be
required to pay Lessee interest on the Security Deposit.
7. OPERATING EXPENSES: In addition to the Rent, Lessee shall pay
currently Lessee's proportionate share of all increases in the Operating
Expenses above the Base Amount. The Base Amount shall be determined by actual
Operating Expenses for the period from May 1, 1996 to April 30, 1997 per the
total square feet of the park. Lessee's Proportionate Share is that percentage
set forth in the Basic Lease Information on page I as Lessee's Proportionate
Share of the Park and/or Lessee's Proportionate Share of the Building and/or
Lessee's Proportional Share of the Lot. The term "Operating Expenses" means the
total amounts paid or payable by Lessor or others on behalf of Lessor in
connection with the ownership, maintenance, repair, and operation of the
Premises, the Building, and the Park, and includes, but is not limited to, the
amount paid for all hot and cold water; sewer service charges; the amount paid
for lighting; the amount paid for heating and air conditioning; the amount paid
for all labor and/or wages and other payments, including cost to Lessor of
workers' compensation and disability insurance, payroll taxes, welfare, and
fringe benefits made to janitors, employees, budding managers, contractors, and
subcontractors of the Lessor to the extent involved in the operation,
maintenance, repair, and restoration of the Building or the Park; the cost of
maintenance and repair of the roof, landscaping, sidewalks, driveways, parking
lots, fences and other exterior Common Areas; modifications to the Building
occasioned by any rules, regulations, or laws effective subsequent to the
Commencement Date; permits, licenses, and certificates necessary to operate and
manage the Building; managerial fees and managerial, administrative, and
telephone expenses related to the Building; the total charges of any independent
contractors employed in the care and operation, maintenance, leasing, cleaning,
repair, and restoration of the Building and the Park landscaping; the amount
paid for all supplies, tools, equipment, and necessities which are occasioned by
everyday wear and tear; the cost of window and exterior wall cleaning and
painting; the cost of accounting services necessary to compute the Rent and
charges payable by tenants; legal, inspection, and consulting services; the
amount paid for premiums for all insurance required from time to time by Lessor
or Lessor's mortgagees and real property taxes applicable to the Lot,
improvement, fixtures and equipment included within the Lot The term "Taxes"
includes any form of assessment, general, special, ordinary or extraordinary,
commercial rental tax, improvement bond or bonds, license fee, license tax,
rental tax, levy, penalty, or tax other than personal income tax, inheritance or
estate taxes imposed by any authority having the direct or indirect power of
tax, including any city, county, state, or federal government, or any school,
agricultural, lighting, drainage, or other improvement district thereof, as
against any legal or equitable interest of Lessor in the Premises or in the
real property of which the Premises are a part, as against Lessor's right to
Rent or
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other income therefrom, or as against Lessor's business of leasing the Premises
or the occupancy of Lessee, or any other tax, fee, or excise, however described,
including any value added tax, or any tax imposed in substitution, partially or
totally, for any of the foregoing or otherwise. Taxes shall also include
reasonable legal fees and costs incurred in connection with proceedings to
contest, determine, or reduce taxes.
Lessee acknowledges that Lessor shall have no obligation whatsoever to provide
guard service or other security measures for the benefit of the Premises or
Park. Should Lessor elect to provide security protection for the Park, the cost
of guards and other protection services shall be included within the definition
of Operating Expenses.
Operating expenses shall not, however, include interest on debt, capital
retirement of debt, depreciation, expenses properly chargeable to capital
account except for capital expenditures primarily designed to reduce operating
expenses or as required or reasonably requested by governmental authority (which
capital expenditures shall be amortized over such reasonable period not
exceeding five (5) years, as Lessor shall determine), and expenses directly
chargeable by the Lessor to any tenant or Lessor's initial construction cost of
the Project, real estate brokerage and leasing commissions, advertising and
marketing expenses and Lessor's or Lessor's property manager's corporate general
overhead or corporate general administrative expenses. The reference to
"Building" in this paragraph shall include all corridors, lobbies, sidewalks,
loading areas, and parking areas, if any, and driveways and other public areas
in or around the Building. Notwithstanding the provisions of this paragraph 7,
Lessee agrees that any cost or expense which arises from Lessee's particular use
or occupancy of the Building shall be paid in full by Lessee upon demand from
Lessor.
Failure of Lessee to pay any of the foregoing amounts and charges shall
constitute a default under the terms hereof in like manner as failure to pay
Rent when due.
Lessor may estimate such increases as of the beginning of each calendar year and
require Lessee to pay one-twelfth (1/12) of such estimated amount as Additional
Rent hereunder as of the first day of each month. Not later than March 31st of
the following calendar year or as soon thereafter as reasonably possible,
including the year following the year in which this Lease terminates, Lessor
shall endeavor to furnish Lessee with a true and correct accounting of actual
costs with respect to the items set forth above which accounting shall be
binding on Lessee, and within thirty (30) days of Lessor's delivery of such
accounting, Lessee shall pay to Lessor the amount of any underpayment.
Notwithstanding the foregoing, failure by Lessor to give such accounting by such
date shall not constitute a waiver by Lessor of its right to collect Lessee's
share of any underpayment. Lessor shall credit the amount of any overpayment of
Lessee toward the next estimated monthly installment(s) falling due, or where
the term of the Lease has expired, refund the amount of overpayment to Lessee.
Lessor may upon notice to Lessee change from a calendar year period for
estimating Operating Expenses to any other twelve (12) consecutive month period,
and in the event of any such change Lessee's proportionate share of Operating
Expenses shall be equitably adjusted.
Tenant shall have the right to audit the books and records of Landlord provided
that such audit shall be (i) conducted by a regional or national firm of
certified accountants; (ii) any such audit shall be conducted within six (6)
months following the delivery of Landlord's statement for a particular year and
(iii) any claim arising out of such Landlord's Statement or Tenant's audit shall
be asserted within one (1) year after the delivery of Landlord's Statement or
shall be waived.
The above provisions requiring Lessee to pay its proportionate share of
Operating Expenses are intended to pass to Lessee and to reimburse Lessor for
all increases in the costs of operating, repairing and managing the Building,
the Premises and the Park except as otherwise set forth herein.
8. PERSONAL PROPERTY TAXES: Lessee shall pay before delinquent all taxes
assessed against and upon equipment, furniture, fixtures, and other personal
property of Lessee.
9. SERVICES AND UTILITIES: Provided that Lessee is not in default
hereunder, Lessor agrees to furnish to the Premises during the hours set forth
in the Rules and Regulations (attached hereto as Exhibit E) on generally
recognized business days Monday through Friday, to be determined by Lessor at
its sole discretion, and subject to the rules and regulations of the Building of
which the Premises are a part, heat and air conditioning required in Lessor's
judgment for the comfortable use and occupation of the Premises, and
janitorial service. Lessor shall provide
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electricity for normal fighting and fractional office machines and water to the
Premises and shall also maintain and keep lighted the common stairs, common
entries, elevator service, and restroom facilities in the Building of which the
Premises are a part. Lessor shall not be liable for, and Lessee shall not be
entitled to, any reduction of rental by reason of Lessor's failure to furnish
any of the foregoing when such failure is caused by accident, breakage, repairs,
strikes, lockouts or -other labor disturbances or labor disputes of any
character, or by any other cause beyond the reasonable control of the Lessor.
Lessor shall not be liable under any circumstances for loss of or injury to
Premises, however occurring, through or in connection with or incidental to
failure to furnish any of the foregoing. Wherever heat generating machines or
equipment are used in the Premises which affect the temperature otherwise
maintained by the air conditioning system, Lessor reserves the right to install
supplementary air conditioning units in the premises and the cost thereof,
including the cost of installation, and the cost of operation and maintenance
thereof shall be paid by Lessee to Lessor upon demand by Lessor.
Lessee will not, without written consent of Lessor, use any apparatus or device
in the Premises, including, but without limitation thereto, electronic data
processing machines, punch card machines and machines using in excess of 120
volts, which will in any way increase the amount of electricity usually
furnished or supplied for the use of the Premises as general office space; and
will not connect with electric current except through existing electrical
outlets in the Premises, any apparatus or device, for the purpose of using
electric current. If Lessee shall require water or electric current in excess
of that usually furnished or supplied for the use of the Premises as general
office space, Lessee shall first procure the written consent of Lessor, which
Lessor may refuse, for the use thereof and Lessor may cause a water meter or
electrical current meter to be installed in the Premises, so as to measure the
amount of water and electric current consumed for any such use. The cost of any
such meters and the installation, maintenance and repair thereof shall be paid
for by the Lessee and Lessee agrees to pay to Lessor promptly and upon demand
therefor by Lessor for all such water and electric current consumed as shown by
said meters, at the rates charged for such services by local public utility
furnishing the same, plus any additional expense incurred in keeping account of
the water and electric current so consumed. If a separate meter is not
installed, such excess cost for such water and electric current will be
established by an estimate made by a utility company or electrical engineer.
10. USE: Lessee shall use the Premises solely for the uses set forth in
the Basic Lease Information on page I and shall not use the Premises for any
other purpose without obtaining the prior written consent of Lessor.
Lessee acknowledges that the Premises are subject to those certain
covenants, conditions, and restrictions recorded at Page 281, of Book F826, of
the Official Records of Santa Clara County, State of California, on January 2,
1981 (the CC&R's), a summary of which is attached hereto as Exhibit D (the
"Summary") and note a part hereof. A copy of the CC&R's are available at
Lessor's offices for review by Lessee during regular business hours. Lessee
further acknowledges that it has read the Summary and knows the contents thereof
Throughout the term of this Lease and any extensions thereof, Lessee shall
faithfully and timely perform and comply with the CC&R'S and any modification or
amendments thereof Lessee shall hold Lessor harmless and indemnify Lessor
against any loss, expense, damage, attorney's fees, and cost or liability
arising out of the failure of Lessee to so perform or comply with CC&R'S.
In no event will Lessee use, introduce to the Premises, generate,
manufacture, produce, store, release, discharge or dispose of, on, under or
about the Premises or transport to or from the Premises any Hazardous Material
(as defined below) or allow its employees, agents, contractors, invitees or any
other person or entity to do so.
Lessee Warrants that it shall not make any use of the Premises which may
cause contamination of the soil, the subsoil or ground water. Lessee shall not
do, bring, or keep anything in or about the Premises that will cause a
cancellation of any insurance covering the Premises. If the rate of any
insurance carried by Lessor is increased as a result of Lessee's use, Lessee
shall pay to Lessor within thirty (30) days before the date Lessor is obligated
to pay a premium on the insurance, or within ten (10) days after Lessor delivers
to Lessee a certified statement from Lessor's insurance carrier stating that the
rate increase was caused solely by an activity of Lessee on the Premises as
permitted in this
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Lease, whichever date is later, a sum equal to the difference between the
original premium and the increased premium.
Lessee shall keep and maintain the Premises in compliance with, and shall
not cause or permit the Premises to be in violation of any and all federal,
state or local laws, ordinances, rules or regulations pertaining to health,
industrial hygiene or the environmental condition on, under or about the
Premises.
Lessee shall give immediate written notice to Lessor of (i) any action,
preceding or inquiry by any governmental authority or any third party with
respect to the presence of any Hazardous Material on the Premises or the
migration thereof from or to other property or (ii) any spill, release or
discharge of Hazardous Materials that occurs with respect to the Premises or
Lessee's operations.
Lessee shall indemnify and hold harmless Lessor, its directors, officers,
employees, agents, successors and assigns (collectively "Lessor") from and
against any and all claims arising from (i) Lessee's use of the Premises for the
conduct of its business or from any activity, work or other things done or
suffered by the Lessee in or about the Buildings, (ii) breach or default in
performance of any obligation on Lessee's part to be performed under the terms
of this Lease; or (iii) any act or negligence of the Lessee, or any officer,
agent, employee, guest or invitee of Lessee. The indemnity should include all
costs, fines, penalties, judgments, losses, attorneys' fees, expenses and
liabilities incurred in or about any such claim or any action or proceeding
brought thereon including, without limitation, (a) all foreseeable consequential
damages including without limitation loss of rental income and diminution in
property value; and (b) the cost of any investigation, monitoring, removal,
restoration, abatement, repair, cleanup, detoxification or other ameliorative
work of any kind or nature required by any governmental agency having
jurisdiction thereof or Lessor. This indemnity shall survive the expiration or
termination of this Lease. In any action or proceeding brought against Lessor
by reason of any such claim, upon notice from Lessor if Lessor does not elect to
retain separate counsel, Lessee shall defend the same at Lessee's expense by
counsel reasonably satisfactory to Lessor.
The term "Hazardous Material" shall include without limitation:
a. Those substances included within the definitions of "hazardous
substances," "hazardous materials," "toxic substances," or "solid waste" in
CERCLA, RCRA, the Clean Water Act and the Hazardous Materials Transportation
Act, 49 U.S.C. Sections 18.1 et. seq. and in the regulations promulgated
pursuant to said laws;
b. Those substances defined as "hazardous wastes" or "hazardous
substances" in the California Health & Safety Code, or as "hazardous substances"
in Section 25316 of the California Health and Safety Code, or as carcinogens in
the Safety Drinking Water and Toxic Enforcement Act of 1986 and in the
regulations promulgated pursuant to said laws; and
c. Such other substances, materials and wastes which are or become
regulated under applicable local, state or federal law, or the United States
government, or which are classified as hazardous or toxic under federal, state,
or local laws or regulations.
11. COMPLIANCE WITH THE LAW: Lessee shall not use the Premises or permit
anything to be done in or about the Premises which will in any way conflict with
the law, statue, zoning restriction, ordinance or governmental law or rule,
regulation, or requirement of any duly constituted public authorities now in
force or which may hereafter be enacted or promulgated or subject Lessor to any
liability for injury to any person or property by reason of any business
operation being conducted in or about the Premises. Lessee shall not store any
hazardous materials on the Premises without the prior written approval of Lessor
and shall not cause any hazardous materials to be placed in the sewage or any
other drainage system in the Park. Lessee shall, at its sole cost and expense,
promptly comply with all laws, statutes, ordinances, and governmental rules,
regulations, or requirements of any board or fire insurance under-writers or
other similar bodies, now or hereafter constituted, relating to or affecting the
condition, use, or occupancy of the Premises, excluding structural changes not
related to or affected by Lessee's improvements or acts. The judgment of any
court of competent jurisdiction or the admission of Levee in any action
against Lessee, whether Lessor be a party thereto or not, that Lessee has
violated any law, statute, ordinance, or governmental rule, regulation, or
requirement, shall be conclusive of that fact as between Lessor and Lessee.
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12. ALTERATIONS AND ADDITIONS: Lessee shall not make or suffer to be made
any alterations, additions, or improvements of over $7,000 per year to or of the
Premises, or any part thereof, without first obtaining the written consent of
Lessor. Any alterations, additions, or improvements to or of said Premises,
including, but limited to, wall covering, paneling, and built-in cabinet work,
but excepting movable furniture and trade fixtures, shall on the expiration of
the term become a part of the realty and belong to Lessor, and shall be
surrendered with the Premises. Before such consent will be given, Lessee shall
submit detailed specifications, floor plans and necessary permits (if
applicable) to Lessor for review. In no event shall any alterations or
improvements affect the structure of the Building or its facade. As a condition
to its consent, Lessor may request adequate assurance that all contractors who
will perform such work have in force workers' compensation, and such other
employee and public liability insurance as Lessor deems necessary to supplement
the insurance coverage provided for in paragraph 20 below, and where the
alterations, additions, or improvements are material, Lessor may require Lessee
or its contractors to post adequate completion and performance bonds. In the
event Lessor consents to the making of any alteration, additions, or
improvements to the Premises by Lessee, the same shall be made by Lessee at
Lessee's sole cost and expense, completed to the satisfaction of Lessor, and any
contractor or person selected by Lessee to make the same must first be approved
in writing by Lessor.
In the event Lessor is required to make modifications to the Building as
the result of any rules, regulations, or laws promulgated by any governmental
entity after the Commencement Date, such compliance by Lessor and the making of
such alterations shall in no event entitle Lessee to any damages, relieve Lessee
of its obligation to pay Rent, or be construed as a constructive eviction of
Lessee.
13. REPAIRS AND MAINTENANCE: By taking possession of the Premises, Lessee
shall be deemed to have accepted the Premises as being in good, sanitary order,
condition and repair. Except as set forth in the following subparagraphs,
Lessee shall, at Lessee's sole cost and expense, maintain the Premises in good,
clean and safe condition and repair. Except as provided in an addendum to this
Lease, if any, Lessor shall have no obligation whatsoever to alter, remodel,
improve, repair, decorate or paint the Premises and the parties hereto affirm
that Lessor has made no representation to Lessee respecting the condition of the
Premises or the Building except as specifically set forth herein. There shall
be no abatement of Rent and no liability of Lessor by reason of any injury to or
interference with Lessee's business arising from the making of any repair,
alteration or improvement to the Premises, the Building or the Park. Lessee
waives the provisions of SS 1941 and 1942 of the California Civil Code, and any
similar or successor law regarding Lessee's right to make repairs and deduct the
expenses of such repairs from the Rent due under this Lease.
Lessor shall be responsible for all structural repairs to the Building,
including the basic plumbing, air conditioning, heating and electrical systems
installed or furnished by Lessor and shall maintain the roof, sidewalls, and
foundations of the Building in good, clean and safe condition and repair, Lessor
shall also maintain all landscaping, driveways, parking lots, fences, signs,
sidewalks and other exterior Common Areas of the Park. Lessor shall not be
liable for any failure to make any such repairs or to perform any maintenance
unless such failure shall persist for an unreasonable time after written notice
of the need for such repairs or maintenance.
14. WASTES: Lessee shall not use the Premises in any manner that will
constitute waste, nuisance, or unreasonable annoyance to owners or occupants of
adjacent properties or to other tenants of the Building.
15. LIENS: Lessee shall keep the Premises and the property on which the
Premises are situated fee from any liens arising out of any work performed,
materials furnished, or obligations incurred by Lessee. Lessor may require, at
its sole option, that Lessee shall provide to Lessor, at Lessee's sole cost and
expense, labor and materials or a completion bond in any amount equal to one and
one-half (1 - 1/2) times any and all estimated cost of any improvements,
additions, or alterations to the Premises, to insure Lessor against any
liability for mechanic's and materialmen's liens and to insure completion of
work. Lessor may, at its election, and upon ten days notice to Lessee, remove
any hens, in which case Lessee shall pay to Lessor the cost of removing the
lien, including attorney's fees. Lessor shall have the right at all times to
post on the Premises any notices permitted or
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required by law for the protection of Lessor, the Premises, or the Building from
mechanic's and materialmen's liens.
16. ASSIGNMENTS AND SUBLETTING: Lessee shall not, either voluntarily or by
operation of law, assign, transfer, mortgage, pledge, hypothecate, or encumber
this Lease or any interest therein, nor sublet the Premises or any part thereof,
or any right or privilege appurtenant thereto, without the written consent of
the Lessor first had and obtained, which consent shall not be unreasonably
withheld. Any attempted assignment, transfer, mortgage, encumbrance, or
subletting without such consent shall be void and shall constitute a breach of
this Lease without the need for notice to Lessee. Lessee shall give Lessor at
least ninety (90) day's written notice of Lessee's desire to assign or sublet
all or some portion of the Premises and the date on which Lessee wishes to make
such assignment or sublease. The withholding of Lessor's consent to the
assignment or subletting will be deemed to have been reasonable where based
upon: (i) the inability of assignee or sublessee to fulfill the Lease terms;
(ii) the financial irresponsibility of assignee; (iii) the lack of suitability
of assignee's or sublessee's intended use of the Premises; or (iv) the intended
unlawful or undesirable use of the Premises by sublessee or assignee. If
Lessor's consent to the assignment or subletting cannot reasonably be withheld,
Lessor shall then have a period of thirty (30) days following receipt of such
notice within which to notify Lessee in writing that Lessor elects either (i) in
the case of an assignment or a sublease of the entire Premises to terminate this
Lease as of the date so specified by Lessee, in which event Lessee will be
relieved of all future obligations hereunder as to such portions of the
Premises, or (ii) to permit Lessee to make such assignment or sublease subject
to the following:
a. Any such assignment, sublease or the like must be pursuant to a
written agreement in a form acceptable to Lessor and must provide that such
assignee, sublessee, or other transferee agrees to be bound by all the terms and
conditions of this Lease. No sublease or assignment by Lessee shall relieve
Lessee of any liability hereunder. Any sublease must provide that Lessee
(Sublessor) has the right to reenter the Premises upon termination of such
sublease. No sublessee shall further assign or sublet all or any part of the
Premises without Lessor's prior written consent.
b. One-half (1/2) of any sums or other economic consideration received by
Lessee as a result of such subletting, other than the rental or other payments
received which are attributable to the amortization of the cost of nonbuilding
standard leasehold improvements to the sublet portion of the Premises at the
Cost of Lessee, whether denominated rentals under the sublease or otherwise,
which exceed in the aggregate the total sums which Lessee is obligated to pay
Lessor under this Lease (prorated to reflect obligations allocable to that
portion of the premises subject to such sublease), shall be payable to Lessor as
additional rental under this Lease without affecting or reducing any other
obligation of Lessee hereunder.
c. Lessee immediately and irrevocably assigns to Lessor, as security for
Lessee's obligations under this Lease, all Rent from any subletting of all or a
part of the Premises as permitted by this Lease, and Lessor, as assignee and
attorney-in-fact for Lessee, or a receiver for Lessee appointed on Lessor's
application, may collect such Rent and apply it toward Lessee's obligations
under this Lease, except that until the occurrence of an act of default by
Lessee, Lessee shall have the right to collect such Rent.
Any sale or transfer, including transfer by consolidation, merger, or
reorganization, of the majority of the voting stock of Lessee if Lessee is a
corporation, or any sale or other transfer of a majority of the partnership
interests in Lessee if Lessee is a partnership, shall be an assignment for
purposes of this paragraph 16.
Notwithstanding anything to the contrary contained in this paragraph 16,
Lessee may hay the right, without the prior written consent of Lessor and
without any right of recapture, to sublease the Premises, or to assign this
Lease to a parent, an affiliate or a purchaser of substantially all of Lessee's
assets located in the Premises; provided, in case of an assignment described
herein, the net worth of the assignee shall be equal to or greater than the net
worth of Lessee immediately before the assignment.
If Lessee shall assign this Lease as permitted herein, the Assignee shall
expressly assume all of the obligations of Lessee hereunder in a written
instrument satisfactory to Lessor and furnished to Lessor not later than fifteen
(I 5) days prior to the effective date of the assignment. If Lessee shall
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sublease the Premises as permitted herein, Lessee shall, at Lessor's option,
within fifteen (15) days following any request by Lessor, obtain and furnish to
Lessor the written agreement of such sublessee to the effect that the subLessee
will attorn to Lessor and will pay all subrent directly to Lessor .
17. INDEMNITY: Lessee shall indemnify and told Lessor harmless against and
from all claims arising from Lessee's use of the Premises for the conduct of
Lessee's business or from any activity, work, or other thing done, permitted or
suffered by Lessee in or about the Building, and shall further indemnify and
hold Lessor harmless against and from any and all claims directly arising from
any breach or default in the performance of any obligation on Lessee's part to
be performed under the terms of this Lease, or arising from any act or
negligence of the Lessee or any officer, agent, employee, guest, or invitee of
Lessee, and from all and against all costs, attorney's fee, expenses, and
liabilities incurred in or about any such claim or any action or proceeding
brought thereon and in any case, action, or proceeding brought against Lessor by
reason of any such claim. Lessee upon notice from Lessor shall defend the same
at Lessee's expense by counsel reasonably satisfactory to Lessor or Lessor may,
at its election, defend the same, in which case Lessee shall reimburse Lessor
for all costs incurred, including attorney's fees. Lessee as a material part of
the consideration to Lessor hereby assumes all risk or damage to property or
injury to persons in, upon or about the Premises, except that Lessee shall not
assume any risk for damage to Lessee resulting from the sole active negligence
of Lessor or its authorized representatives.
18. DAMAGE TO PREMISES OR BUILDING: All injury to the Premises or the
Building caused by moving the property of the Lessee or its employees, agents,
guests, or invitees into, in or out of the Building and all breakage done by
Lessee or the agents, servants, employees, and visitors of Lessee, as well as
any damage to the Premises or the Building due to the negligence of Lessee, or
its agents, servants, employees and visitors shall be repaired as determined by
the Lessor at the expense of the Lessee.
19. LIMITATION OF LIABILITY Lessor shall not be liable to Lessee for any
damage
to Lessee or Lessee's property, nor to any damage or injury to any person from
any cause except that Lessor shall be liable to Lessee for damage resulting from
the active negligence or willful misconduct of Lessor or its authorized
representatives. In no event will Lessor be liable for consequential damages.
20. LESSEE'S INSURANCE: Lessee shall, at all times during the term of this
Lease and at its sole cost and expense, maintain (a) Comprehensive General
Liability Insurance (including protective liability coverage on operations of
independent contractors engaged in construction and, also, blanket contractual
liability insurance) on an "occurrence" basis if available, otherwise on a
"claims made" basis, for the benefit of Lessee and Lessor as named insured
against claims for "personal injury" liability including without limitation
bodily injury, death, or property damage liability with a limit of not less than
Three Million Dollars ($3,000,000) in the event of "personal injury" to any
number of persons or of damages to property arising out of any one "occurrence";
such insurance may be furnished under a "primary" policy and an "umbrella"
policy, provided that it is primary insurance and not excess over or
contributory with any insurance in force for Lessor; and (b) insurance against
loss or damage by fire and such other risks and hazards as are insurable under
present and future standard forms of fire and extended coverage insurance
policies, to the personal property, furniture, furnishings, and fixtures
belonging to Lessor located in the Premises for not less than 100% of the actual
replacement value thereof Such insurance shall provide for a waiver of the
insurer's right of subrogation against Lessor.
All such insurance shall name Lessor as additional insured and shall be
effected under policies issued by insurers, shall be in forms and for amounts
approved by Lessor, and shall provide that Lessor shall receive thirty (30)
day's written notice from the insurer prior to cancellation or change of
coverage. Lessee shall deliver policies of such insurance or certificates
thereof to Lessor on or before the Commencement Date, and thereafter at least
thirty (30) days before the expiration dates of expiring policies; and
in the event Lessee shall fail to procure such insurance or to deliver such
policies or certificates, Lessor may, at its option, procure same for the
account of Lessee, and the cost thereof shall be paid to Lessor within ten (10)
days after the delivery to Lessee of bills therefor. Nothing contained in this
paragraph 20 shall in any way limit the extent of Lessee's liability under any
other provisions of this Lease.
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As long as their respective insurers so permit, Lessor and Lessee hereby
mutually waive their respective rights of recovery against each other from any
loss insured by fire, extended coverage, and other property insurance policies
existing for the benefit of the respective parties. Each party shall obtain any
special endorsements, if required by their insurer to evidence compliance with
the aforementioned waiver. Provided, however, if Lessor's insurer charges an
additional fee for such endorsement, said additional fee shall be paid by
Lessee.
21. AD VALOREM TAXES: Lessee shall pay, or cause to be paid, before
delinquency, any and all taxes levied or assessed and which become payable
during the term hereof upon all Lessee's leasehold improvements, equipment,
furniture, fixtures, and personal property located in the Premises, except that
which has been paid for by Lessor and is the standard of the Building. In the
event any or all of the Lessee's leasehold improvements, equipment, furniture,
fixtures, and personal property shall be assessed and taxed with the Building,
Lessee shall pay to Lessor its share of taxes within ten (10) days after
delivery to Lessee by Lessor of a statement in writing setting forth the amount
of such taxes applicable to Lessee's property.
22. WAIVER:
a. No delay or omission in the exercise of any right or remedy of
Lessor on any default by Lessee shall impair such a right or remedy or be
construed as a waiver.
b. The subsequent acceptance of Rent by Lessor after breach by
Lessee of any covenant or term of this Lease shall not be deemed a waiver of
such breach, other than a waiver of timely payment for the particular Rent
payment involved, and shall not prevent Lessor from maintaining an unlawful
detainer or other action based on such breach.
c. No act or conduct of Lessor, including without limitation the
acceptance of the keys to the Premises, shall constitute an acceptance of the
surrender of the Premises by Lessee before the expiration of the term. Only a
written notice from Lessor to Lessee shall constitute acceptance of the
surrender of the Premises and accomplish a termination of the Lease.
d. Lessor's consent to or approval of any act by Lessee requiring
Lessor's consent or approval shall not be deemed to waive or render unnecessary
Lessor's consent to or approval of any subsequent act by Lessee.
e. Any waiver by Lessor of any default must be in writing and shall
not be a waiver of any other default concerning the same or any other provision
of the Lease.
f. The review, approval, or inspection by Lessor of any item to be
reviewed, approved, or inspected by Lessor under the terms of this Lease shall
not constitute the assumption of any responsibility by Lessor for the accuracy
or sufficiency of any such item or the quality or suitability of such item for
its intended use.
23. ENTRY BY LESSOR: Lessor reserves and shall at any and all reasonable
times upon 24 hours notice have the right to enter the Premises, unless an
emergency, inspect the same, supply any service to be provided by Lessor to
Lessee hereunder, to submit the Premises to prospective purchasers or tenants,
to post notices of nonresponsibility, and to maintain and repair the Premises
and any portion of the Building that Lessor may deem necessary or desirable,
without abatement of rent, and may for that purpose erect scaffolding and other
necessary structures where reasonably required by the character of the work to
be performed, always providing that the entrance to the Premises shall not be
blocked thereby and further providing that the business of the Lessee shall not
be interfered with unreasonably. Lessee hereby waives any claim for damages or
for any injury or inconvenience to or interference with Lessee's business, any
loss of occupancy or quiet enjoyment of the Premises, and any other loss
occasioned thereby. For each of the aforesaid purposes, Lessor shall at all
times have and retain a key with which to unlock all of the doors in, upon and
about the Premises, excluding Lessee's vaults, safes and files, and Lessor
shall have the right to use any and all means which Lessor may deem proper to
open said doors in an emergency, in order to obtain entry to the Premises
without liability to Lessor. Any entry to the Premises obtained by Lessor by
any of said means or otherwise shall not under any circumstances be construed
or be deemed to be a forcible or unlawful entry into, or a detainer of the
Premises, or an eviction of Lessee from the Premises or any portion thereof
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24. CASUALTY DAMAGE: If the Premises or any part thereof shall be damaged
by fire or other casualty, Lessee shall give prompt written notice thereof to
Lessor. In case the Building shall be so damaged by fire or other casualty that
substantial alteration or reconstruction of the Building shall, in Lessor's sole
opinion, be required (whether or not the Premises shall have been damaged by
such fire or other casualty), or in the event any mortgagee under a mortgage or
deed of trust covering the Building should require that the insurance proceeds
payable as a result of said fire or other casualty be used to retire the
mortgage debt Lessor shall with reasonable promptness after the occurrence of
such damage, estimate the length of time that will be required to substantially
complete the repair and restoration and shall by notice advise Lessee of such
estimate ("Lessor's Notice"). If Lessor estimates that the amount of time
required to substantially complete such repair and restoration will exceed one
hundred eighty (180) days from the date such damage occurred, the Lessor, or
Lessee if all or a substantial portion of the Premises is rendered untenantable,
shall have the right to terminate this Lease as of the date of such damage upon
giving written notice to the other at any time within sixty (60) days after
delivery of Lessor's Notice, provided that if Lessor so chooses, Lessor's Notice
may also constitute such notice of termination.
Unless this Lease is terminated as provided in the preceding subparagraph,
Lessor shall proceed with reasonable promptness to repair and restore the
Premises to its condition as existed prior to such casualty, subject to
reasonable delays for insurance adjustments and Force Majeure delays, and also
subject to zoning laws and building codes then in effect. Lessor shall have no
liability to Lessee, and Lessee shall not be entitled to terminate this Lease if
such repairs and restoration are not in fact completed within the time period
estimated by Lessor so long as Lessor shall proceed with reasonable diligence to
complete such repairs and restoration.
Lessee acknowledges that Lessor shall be entitled to the full proceeds of
any insurance coverage, whether carried by Lessor or Lessee, for damages to the
Premises, except for those proceeds of Lessee's insurance of its own personal
property and equipment which would be removable by Lessee at the Termination
Date. All such insurance proceeds shall be payable to Lessor whether or not the
Premises are to be repaired and restored.
Notwithstanding anything to the contrary herein set forth: (i) Lessor shall
have no duty pursuant to this Section to repair or restore any portion of any
Tenant Improvements or to expend for any repair or restoration of the Premises
or Building amounts in excess of insurance proceeds paid to Lessor and available
for repair or restoration; and (ii) Lessee shall not have the right to terminate
this Lease pursuant to this Section if any damage or destruction was caused by
the act or neglect of Lessee, its agents, invitees or employees.
Any repairs or restoration of the Premises performed by Lessee shall be in
accordance with the provisions of Paragraph 12 hereof
If the Premises or the Building is damaged by a casualty but neither is
rendered substantially untenantable, then Lessee shall proceed to repair and
restore the Building or the Premises other than Tenant Additions, with
reasonable promptness, unless such damage is to the Premises and occurs during
the last six (6) months of the Term, in which event either Lessee or Lessor
shall have the right to terminate this Lease as of the date of such casualty by
giving written notice thereof to the other within twenty (20) days after the
date of such casualty.
Except for the negligence or willful act of Lessee or its agents,
employees, contractors or invitees, if all or any part of the Premises are
rendered untenantable by fire or other casualty and this Lease is not
terminated, Monthly Base Rent and Rent Adjustments shall abate for that part of
the Premises which is untenantable on a per diem basis from the date of the
casualty until Lessor has substantially completed the repair and restoration
work in the Premises which it is required to perform, provided, that as a result
of such casualty, Lessee does not occupy the portion of the Premises which is
untenantable during such period. Lessee hereby specifically waives any and all
rights it may have under any law, statute, ordinance or regulation to terminate
the Lease by reason of casualty or damage to the Premises or Building, and the
parties hereto specifically agree that the Lease shall not automatically
terminate by law upon destruction of the Premises.
Lessee shall not be entitled to any compensation or damages from Lessor for
loss of the use of the whole or any part of the Premises, the Building, Lessee's
personal property, or any
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inconvenience or annoyance occasioned by such damage, repair, reconstruction or
restoration. If fire or other casualty results from acts, omissions, or neglect
of Lessee or its agents, employees, invitees, or visitors, there shall be no
abatement of rent as otherwise provided herein.
Except as otherwise provided in this paragraph 24, Lessee hereby waives the
provisions of Sections 1932(2), 1933(4), 1941, and 1942 of the California Civil
Code.
25. CONDEMNATION:
a. If the whole, or in the sole opinion of Lessor substantially the
whole, of the Premises should be condemned, or if any mortgagee under any deed
of trust or mortgage covering the Building shall determine to apply condemnation
proceeds to retire mortgage debt, then Lessor shall have the right to terminate
this Lease as of the date when physical possession of the Building or the
Premises is taken by the condemning authority, If less than the whole, or in the
sole opinion of Lessor substantially the whole, of the Building or the Premises
is thus taken or sold, Lessor (whether or not the Premises are affected thereby)
may terminate this Lease by giving written notice thereof to Lessee within sixty
(60) days after the right of election accrues, in which event this Lease shall
terminate as of the date when physical possession of such portion of the
Building or Premises is taken by the condemning authority. If upon any such
condemnation of less than the whole or substantially the whole of the Building
or the Premises and this Lease shall not be thus terminated, the Rent payable
hereunder shall be diminished by an amount representing that part of the Rent as
shall properly be allocable to the portion of the Premises which was so
condemned, and Lessor shall, at Lessor's sole expense, restore and reconstruct
the Building and the Premises to substantially their former condition to the
extent that the same, in Lessor's judgement, may be feasible, but such work
shall not exceed the scope of the work done in originally constructing the
Building, nor shall Lessor in any event be required to spend for such work an
amount in excess of the amount received by Lessor as compensation awarded upon a
taking of any part or all of the Building or the Premises. Subject to the
rights of any mortgagee under a mortgage or deed or trust covering the Building,
Lessor shall be entitled to and shall receive the total amount of any award made
with respect to condemnation of the Premises or Building, regardless of whether
the award is based on a single award or a separate award as between the
respective parties, and to the extent that any such award or awards shall be
made to Lessee or to any person claiming through or under Lessee, Lessee hereby
irrevocably assigns to Lessor all of its rights, title and interest in and to
any such awards. No portion of any such awards shall be allocated to or paid to
Lessee for any so-called bonus or excess value of this Lease by reason of the
relationship between the rental payable under this Lease and what may at the
time be a fair market rental for the Premises, nor for Lessee's unamortized
costs of leasehold improvements. The foregoing notwithstanding, and if Lessee
be not in default for any reason, Lessor shall turn over to Lessee, promptly
after receipt thereof by Lessor, that portion of any such award received by
Lessor hereunder which is attributable to Lessee's fixtures and equipment which
are condemned as part of the property taken but which Lessee would otherwise be
entitled to remove, and the appraisal of the condemning authority with respect
to the amount of any such award allocable to such items shall be conclusive.
Lessee hereby specifically waives any and all rights it may have under any law,
statute, ordinance or regulation to terminate or petition to terminate this
Lease upon partial condemnation of the Premises or Building, and the parties
hereto specifically agree that this Lease shall not automatically terminate upon
condemnation.
b. Lessor may, without any obligation or liability to Lessee and
without affecting the validity and existence of this Lease other than as
hereafter expressly provided, agree to sell and/or convey to the condemnor,
without first requiring that any action or proceeding be instituted, or if such
action or proceeding shall have been instituted, without first requiring any
trial or hearing thereof (and Lessor is expressly empowered to stipulate to
judgment therein), the Premises or portion hereof, sought by the condemnor free
from this Lease and the fights of Lessee hereunder.
c. If all or any portion of the Premises is condemned or otherwise
taken for a limited period of time, this Lease shall remain in full force and
effect and Lessee shall continue to perform all terms and covenants of this
Lease provided, however, Rent shall abate during such limited period in
proportion to the portion of the Premises that is rendered unusable as a result
of such condemnation or other taking.
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d. The words "condemnation" or "condemned" as used herein shall mean
the taking for any public or quasi-public use under any governmental law,
ordinance, or regulation, or the exercise of, or the intent to exercise, the
power of eminent domain, expressed in writing, as well as the filing of any
action or proceeding for such purpose, by any person, entity, body, agency, or
authority having the right or power of eminent domain, and shall include a
voluntary sale by Lessor to any such person, entity, body agency, or authority,
either under threat of condemnation expressed in writing or while condemnation
proceedings are pending, and shall occur in point of time upon the actual
physical taking of possession pursuant to the exercise of said power of eminent
domain.
26. LESSEE'S DEFAULT: The occurrence of any one or more of the following
events shall constitute a default and breach of this Lease by Lessee:
a. The vacation or abandonment of the Premises by Lessee.
b. The failure by Lessee to make any payment of Rent or any other
payment required to be made by Lessee hereunder as and when due, where such
failure shall continue for a period of five (5) days after due date.
c. Lessee's failure to observe or perform any of the covenants,
conditions, or provisions of this Lease to be observed or performed by Lessee,
other than as described in subparagraph b. above, where such failure shall
continue for a period of ten (1O) days after written notice thereof by Lessor to
Lessee; provided, however, that if the nature of Lessee's default is such that
more than ten (1O) days are reasonably required for its cure, then Lessee shall
not be deemed to be in default if Lessee commences such a cure within said ten
(1O) day period and thereafter diligently prosecutes such cure to completion.
d. The making of Lessee of any general assignment or general
arrangement for the benefit of creditors, or the appointment of a trustee or
receiver to take possession of substantially all of Lessee's assets located at
the Premises or of Lessee's interest in this Lease, where possession is not
restored to Lessee within thirty (30) days, or the attachment, execution, or
other judicial seizure of substantially all of Lessee's assets located at the
Premises or of Lessee's interest in this Lease, where such seizure is not
discharged in thirty (30) days.
e. The filing of any voluntary petition in bankruptcy by Lessee, or
the filing of any involuntary petition by Lessee's creditors, which involuntary
petition remains undischarged for period of thirty (30) days. In the event
that under applicable law the trustee in bankruptcy or Lessee has the right to
affirm this Lease and perform the obligations of Lessee hereunder, such trustee
or Lessee shall, in such time period as may be permitted by the bankruptcy court
having jurisdiction, cure all defaults of Lessee hereunder outstanding as of the
date of the affirmance of this Lease, and provide to Lessor such adequate
assurances as may be necessary to ensure Lessor of the continued performance of
Lessee's obligation under this Lease.
27. REMEDIES FOR LESSEE'S DEFAULT: In the event of Lessee's default:
a. Lessor may terminate Lessee's right to possession of the Premises
by any
lawful means, in which case this Lease shall terminate and Lessee shall
immediately surrender possession of the Premises to Lessor. In such event,
Lessor shall be entitled to recover from Lessee:
(1) the worth at the time of the award of any unpaid rent which
had been earned at the time of such termination; plus
(2) the worth at the time of the award of the amount by which
the unpaid rent which would have been earned after termination until the time
of award exceeds the amount of such rental loss which Lessee proves could have
been reasonably avoided; plus
(3) the worth at the time of the award of the amount by which
the unpaid rent for the balance of the term after the time of award exceeds
the amount of such rental loss which Lessee proves could be reasonably
avoided; plus
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(4) any other amount necessary to compensate Lessor for all the
detriment proximately caused by Lessee's failure to perform its obligations
under this Lease or which in the ordinary course of things would be likely to
result therefrom (including, without limitation, the cost of recovering
possession of the Premises, expenses of reletting including necessary
renovation and alteration of the Premises, reasonable attorney's fees, and
real estate commissions actually paid and that portion of the leasing
commission paid by Lessor and applicable to the unexpired portion of this
Lease); plus
(5) such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time by applicable California law.
As used in subsections (1) and (2) above, the "worth at the time of award"
shall be computed by allowing interest at the greater of 1O percent (1O%) per
annum, or 5 percent (5%) per annum plus the rate as established by the Federal
Reserve Bank of San Francisco, on advances to member banks under 13 and 13a of
the Federal Reserve Act prevailing on the twenty-fifth (25th) day of the month
preceding the date of Lessee's default.
As used in subsection (3) above, the "worth at the time of award" shall be
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%).
In the event Lessee shall have abandoned the Premises, Lessor shall have
the option of taking possession of the Premises and recovering from Lessee the
amount specified in this subparagraph or proceeding under the provisions of
subparagraph b. below.
b. Lessor may continue this Lease in full force and effect, and the
Lease shall continued in effect, as long as Lessor does not terminate Lessee's
right to possession, and Lessor shall have the right to collect rent when due.
During the period Lessee is in default, Lessor can enter the Premises and relet
them, or any part of them, to third parties for Lessee's account. Lessee shall
be liable immediately to Lessor for all costs Lessor incurs in reletting the
Premises, including, without limitation, booker's commissions, expenses of
remodeling the premises required by the reletting, and like costs. Reletting
can be for a period shorter or longer than the remaining term of this Lease.
Lessee shall pay to Lessor the rent due under this Lease on the dates the rent
is due, less the rent Lessor receives from any reletting. No act by Lessor
allowed by this paragraph shall terminate this Lease unless Lessor notifies
Lessee that Lessor elects to terminate this Lease. After Lessee's default and
for as long as Lessor does not terminate Lessee's right to possession of the
Premises, if Lessee obtains Lessor's consent, Lessee shall have the right to
assign or sublet its interest in this Lease, but Lessee shall not be released
from liability. Lessor's consent to a proposed assignment or subletting shall
not be unreasonably withheld.
c. The foregoing remedies are not exclusive; they are cumulative in
addition to any remedies now or later allowed by law, to any equitable remedies
Lessor may have, and to any remedies Lessor may have under bankruptcy laws or
laws affecting coeditors' rights generally.
28. SURRENDER OF PREMISES: On expiration of this Lease or within five (5)
days after the earlier termination of the terms, Lessee shall surrender to
Lessor the Premises in good condition (except for ordinary wear and tear
occurring after the last necessary maintenance made by Lessee and destruction
to the Premises covered by paragraph 23). Lessee shall remove all its personal
property within the above-stated time. Lessee shall perform all restoration
made necessary by the removal of any alterations or Lessee's personal property
within the time periods stated in this paragraph
Lessor can elect to retain or dispose of in any manner any alterations or
any of Lessee's personal property that Lessee does not remove from the Premises
on expiration or termination of the term as allowed or required by this Lease by
giving at least ten (1O)days' notice to Lessee. Title to any such alterations
or any of Lessee's personal property that Lessor elects to retain or dispose of
on expiration of the ten (1O) day period shall vest in Lessor. Lessee waives
all claims against Lessor for any damage to Lessee resulting from Lessor's
retention or disposition of any such alterations or any of Lessee's personal
property. Lessee shall be liable to Lessor for Lessor's costs for storing,
removing, and disposing of any alterations or any of Lessee's personal property.
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If Lessee fails to surrender the Premises to Lessor on expiration or five
(5) days after terminate of the term as required by this paragraph, Lessee shall
hold Lessor harmless from all damages resulting from Lessee's failure to
surrender the Premises, including, without limitation, claims made by a
succeeding tenant resulting from Lessee's failure to surrender the Premises.
29 DEFAULT BY LESSOR:
a. Lessor 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 obligations within thirty (30) days after written notice
by Lessee to Lessor specifying wherein Lessor has failed to perform such
obligation, provided, however, that if the nature of Lessor's obligation is such
that more than thirty (30) days are required for its performance, then Lessor
shall not be deemed to be in default if it shall commence such performance
within such thirty (30) day period and thereafter diligently prosecute the same
to completion. In no event shall Lessor be liable to Lessee for loss of
profits, business interruption, or consequential damages if Lessor performs its
obligations within the time periods specified in this paragraph.
b. Lessee agrees to give any mortgage and/or trust deed holders, by
Registered Mail, a copy of any Notice Of Default served upon the Lessor,
provided that prior to such notice Lessee has been notified in writing (by way
of Notice Of Assignment Of Rents And Leases, or otherwise) of the address of
such mortgage and/or trust deed holder. Lessee further agrees that if Lessor
shall have failed to cure such default within the time provided for in this
Lease, then the mortgagees and/or trust deed holders shall have an additional
thirty (30) days within which to cure such default, or if such default cannot be
cured within that time, then such additional time as may be necessary to cure
such default (including, but not limited to, commencement of foreclosure
proceedings, if necessary to effect such cure), in which event this Lease shall
not be terminated while such remedies are being so diligently pursued.
30. PARKING: Lessee shall have the use of the undesignated parking spaces
set forth above in the Basic Lease Information on page 1. Lessor shall use all
reasonable efforts to insure that such space is available for Lessee's use, but
shall not be required to tow parked cars, provide sanctions against improper
parking, or otherwise take steps to free occupied parking spaces for Lessee's
use. Lessee shall not use any parking spaces for truck parking or loading
except for spaces specifically designated for such use by Lessor.
31. ESTOPPEL CERTIFICATE: Lessee shall at any time and from time to time
upon not less than three (3) day's prior written notice from Lessor execute,
acknowledge, and deliver to Lessor a statement in writing (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 modified is in
full force and effect) and the date to which the Rental and other charges are
paid in advance, if any; (b) certifying that the Premises have been accepted by
Lessee; (c) confirming the Commencement Date and the expiration date of the
Lease; and (d) acknowledging that there are not, to Lessee's knowledge, any
incurred defaults on the part of the Lessor hereunder, or specifying such
defaults, if any are claimed. Any such statement may be relied upon by a
prospective purchaser or encumbrancer of all or any portion of the real property
of which the premises are a part.
32. SALE OF THE PREMISES: In the event of any sale of the Building, Lessor
shall be and hereby is entirely freed and relieved of all liability under any
and all of its covenants and obligations contained in or derived from this Lease
and the purchaser, at such sale or any subsequent sale of the Premises shall be
deemed, without any further agreement between the parties or their successors in
interest or between the parties and any such purchaser, to have assumed and
agreed to carry out any and all of the covenants and obligations of Lessor under
this Lease.
16
<PAGE>
a. This Lease is and shall be subordinate to any encumbrance now of
record or recorded after the date of this Lease affecting the Building, other
improvements, and land of which the Premises are a part. Such subordination is
effective without any further act of Lessee. If any mortgagee, trustee, or
ground lessor shall elect to have this Lease and any options granted hereby
prior to the hen of its mortgage, deed of trust, or ground lease, and shall give
written notice thereof to Lessee, this Lease and such options shall be deemed
prior to such mortgage, deed of trust, or ground lease, whether this Lease or
such options are deeded prior or subsequent to the date of said mortgage, deed
of trust, or ground lease, or the date of recording thereof
b. In the event any proceedings are brought for foreclosure, or in
the event of a sale or exchange of the real property on which the Building is
located, or in the event of the exercise of the power of sale under any mortgage
or deed of trust made by Lessor covering the Premises, at Purchaser's election
Lessee shall attorn to the purchaser upon any such foreclosure or sales and
recognize such purchaser as the Lessor under this Lease.
c. Lessee agrees to execute any documents required to effectuate an
attornment or to make this Lease or any options granted herein prior to the lien
of any mortgage, deed of trust, or ground lease, as the case may be. If Lessee
fails to execute and deliver any such documents or instruments Lessee
irrevocably constitutes and appoints Lessor as Lessee's special attorney-in-fact
to execute and deliver any such documents or instruments.
34. AUTHORITY OF PARTIES:
a. Lessee's Authority: If Lessee is a corporation, each individual
executing this Lease on behalf of said corporation represents and warrants that
he is duly authorized to execute and deliver this Lease on behalf of said
corporation, in accordance with a duly adopted resolution of the board of
directors of said corporation or in accordance with the bylaws of said
corporation, and that this Lease is binding upon said corporation in accordance
with its terms. If Lessee is a partnership, each individual executing this
Lease on behalf of said partnership represents and warrants that he is duly
authorized to execute and deliver this Lease on behalf of said partnership under
the terms of the partnership agreement of said partnership.
b. Lessor's Authority: CB Commercial, as leasing agent for the
owner, represents and warrants that it is duly authorized to deliver this Lease
on behalf of said owner, and that this Lease is binding upon said owner in
accordance with its term.
35. BROKERS: Lessor and Lessee each warrants that it has had no dealings
with any real estate broker or agents in connection with the negotiation of this
Lease except for the broker or brokers listed in the Basic Lease Information on
page 1 of this Lease, and it knows of no other real estate broker or agent who
is entitled to a commission in connection with the Lease. Lessor agrees to pay
any commission to which the foregoing agents are entitled in connection with
this Lease. Lessee agrees to indemnify and defend Lessor and hold Lessor
harmless from any claims for brokerage commissions arising out of any discussion
allegedly had by Lessee with any broker.
36. HOLDING OVER: Notwithstanding anything in California Civil Code SS
1945 to the contrary, upon termination of the Lease or expiration of the term
hereof, if Lessee retains possession of the Premises without Lessor's written
consent first had and obtained, then Lessee's possession shall be deemed a
tenancy at sufferance, and Lessor may bring an action for possession or detainer
at any time thereafter. In addition, Lessee shall be liable for the value of
its use and occupation of the Premises prorated at 150% of the Rent which is due
on the last month of the term, and Lessor's acceptance of payment of the same
shall not constitute a renewal of the Lease, shall not be deemed to waive
Lessor's right of reentry, and shall not create a month-to-month or any other
periodic tenancy.
37. RULES AND REGULATIONS: Lessee shall faithfully observe and comply with
the reasonable rules and regulations that Lessor shall from time to time
promulgate. Lessor reserves the right from time to time to make all reasonable
modifications to said rules. The additions and
17
<PAGE>
modifications to those rules shall be binding upon Lessee upon delivery of a
copy of them to Lessee. (A copy of the present rules and regulations is attached
hereto as Exhibit E.) Lessor shall not be responsible to Lessee for the
nonperformance of any said rules by any other tenants or occupants.
38. Intentionally deleted.
39. OPTION TO EXTEND: Landlord hereby grants Tenant one (1) option to
----------------
extend the initial term of the Lease (the "Initial Term"), for an additional
period of five (5) years (the "Option Term"), as to all (but not part) of the
Premises as such may then exist, upon and subject to the terms and conditions
set forth in this Section 39 (the "Option To Extend").
The Option Term shall commence immediately after the expiration of the
Initial Term. Tenant's hiring of the Premises during the Option Term shall be
upon and subject to the same terms and conditions contained in the Lease except
that (a) the Base Annual Rent shall be equal to the "Option Term Base Rent",
defined and determined in the manner set forth below, (b) Tenant shall accept
the Premises, Building and Park in an "As Is" condition without any obligation
-----
of Landlord to repaint, remodel, improve or alter the Premises, Building or
Park or to provide Tenant any allowance for any of the foregoing and (c) there
shall be no further option or right to extend the Term of the Lease. If Tenant
timely and properly exercises an Option To Extend, references in the Lease to
the Term shall be deemed to mean the applicable Option Term unless the context
clearly requires otherwise.
Tenant's election to exercise the Option To Extend must be given to
Landlord in writing no later than ninety (90) days prior to the expiration of
the Initial Term.
Notwithstanding anything to the contrary contained herein, all rights of
Tenant pursuant to the Option To Extend shall automatically terminate without
notice and shall be of no further force and effect, whether or not Tenant has
timely exercised the option granted herein, if (a) at the time of exercise of
the Option To Extend or at the time of commencement of the Option Term, there
exists a default, or any act or omission on the part of Tenant which, with the
passage of time or the giving of notice, or both, would constitute a default, or
(b) Landlord has given Tenant three (3) or more notices of the existence of a
default, during the Initial Term, whether or not such default is subsequently
cured, or (c) a late charge has become payable three (3) or more times during
any calendar year, or (d) Tenant does not occupy all of the Premises at the time
of exercise of an Option To Extend or at the time of commencement of the Option
Term. In the event Tenant terminated for any of the reasons set forth in this
paragraph, Tenant shall reimburse Landlord for all cost and expense Landlord
incurs in connection with Tenant's exercise of the Option To Extend, including,
without limitation, with respect to any brokerage commissions.
The Option Term Rent for the Premises for the Option Term shall mean the
greater of (a) Base Annual Rent equal to One Million Eighty Nine Thousand Forty
Eight Dollars and Eighty Six Cents ($1,089,048.86) (the Preceding Base Rent");
or (b) the "Market Rent", which as used herein shall mean the amount of Base
Annual Rent that Landlord could obtain from a third party desiring to lease the
Premises under a lease containing terms and conditions substantially identical
to those of this Lease, including without limitation additional rent payable by
Tenant with respect to Building Costs, Park Costs, Taxes and Additional Taxes
pursuant to Section 7, 8 and 9 of the Lease, for the applicable Option Term
under market leasing conditions then existing, and taking into account the
following: the length of term; the size, location, configuration and floor
levels of the Premises; the type and quality of improvements in or amenities
available to the Premises, Building and Park; age and location of the Building
and Park; services to be provided by Landlord or by Tenant; the rent, all other
monetary payments and escalations then obtainable for new leases of space
comparable to the Premises in the locality of the Park; and other factors that
would be relevant to a prospective lease by a third party of the Premises for
the relevant Option Term in determining what such party would be willing to pay
therefor; but in each instance disregarding "Tenant Concessions", if any, then
being offered to prospective new tenants of comparable space in the Park and in
the locality of the Park. For purposes of the preceding sentence, the term
"Tenant Concessions" shall include, without limitation, so-called free rent,
tenant improvement allowances, moving allowances and lease takeovers. The
determination of Market Base Rent based upon the foregoing criteria, shall be
made by Landlord, in Landlord's sole discretion.
18
<PAGE>
Within thirty (30) days after Tenant's exercise of the applicable Option To
Extend, Landlord shall notify Tenant of Landlord's determination of the Option
Term Base Rent for the Premises. If Landlord's determination of Option Term
Base Rent is greater than the Preceding Base Rent for the applicable Option
Term, and if Tenant, in Tenant's sole discretion, disagrees with the amount of
Option Term Base Rent determined by Landlord, Tenant may elect to revoke and
rescind the exercise of the Option To Extend by giving written notice thereof to
Landlord within ten (10) days after notice of Landlord's determination of Option
Term Base Rent.
The Option To Extend is personal to Business Objects, Inc. , a Delaware
corporation and shall not be transferrable or assignable, by operation of law or
otherwise, either in connection with an assignment of the Lease, or a sublease
of all or part of the Premises, or otherwise. Any purported assignment of the
Option To Extend shall be void and a material breach of this Lease, and shall
constitute a default under this Lease.
40. GENERAL PROVISIONS:
a. Plats and Rider: Clauses, plats and riders, if any, signed by the
Lessor and Lessee and endorsed on or affixed to this Lease are a part hereof.
b. Joint Obligation: If there be more than one Lessee, the
obligations hereunder imposed upon Lessee shall be joint and several.
c. Marginal Headings: The marginal headings and titles to the
paragraphs of this Lease are not a part of this Lease and shall have no effect
upon the construction or interpretation of any part hereof.
d. Time: Time is of the essence in this Lease and with respect to
each and all of its provisions in which performance is a factor.
e. Recordation: Lessee shall not record this Lease or a short form
memorandum hereof without the prior written consent of Lessor.
f. Quiet Possession: Upon Lessee paying the rent reserved hereunder,
and observing and performing all of the covenants, conditions, and provisions on
Lessee's part to be observed and performed hereunder, Lessee shall have quiet
possession of the Premises for the entire term hereof, subject to all of the
provisions of this Lease.
g. Prior Agreements: This Lease contains all of the agreements of
the parties hereto wit respect to any matter covered or mentioned in this Lease,
an no prior agreements or understanding pertaining to any such matters shall be
effective for any purpose. No provision of this Lease may be amended or added
to except by an agreement in writing signed by the parties hereto or their
respective successors in interest. This Lease shall not be effective or binding
on any party until fully executed by both parties hereto.
h. Inability to Perform: This Lease and the obligations of Lessee
hereunder shall not be affected or impaired because the Lessor is unable to
fulfill any of its obligations or furnish services and utilities hereunder or is
delayed in doing so, if such inability or delay is caused by reason of acts of
God, strikes, lockouts, labor troubles, inability to procure materials,
governmental laws or regulations, governmental request for the general public
welfare, or other causes beyond the reasonable control of Lessor.
Notwithstanding the foregoing, if, as a result of any such
inability on the part of Lessor not caused by any act or omission of Lessor or
action or failure to act by Lessee, possession of the Premises by Lessee is
delayed, or Lessee's quiet enjoyment of the Premises is substantially
impaired, for a consecutive period of not less than one hundred and twenty
(120) days, Lessee may terminate this Lease by written notice to Lessor.
i. Jury Trial: The parties hereto shall, and they hereby do, waive
trial by jury in any action, proceeding, or counterclaim brought by either of
the parties hereto against the other on any matters whatsoever arising out of or
in any way connected with this Lease, the relationship of
19
<PAGE>
Lessor and Lessee, Lessee's use or occupancy of the Premises and/or any claim of
injury or damage. In the event Lessor commences any proceedings for nonpayment
of rent, Lessee will not interpose any counterclaim of whatever nature or
description in any such proceedings. This shall not, however, be construed as a
waiver of the Lessee's right to assert such claims in any separate action or
actions brought by the Lessee.
j. Lessor's Personal Liability: The liability of Management (which,
for purposes of this Lease, shall include the owner of the Building if other
than Lessor) to Lessee for any default by Lessor under the terms of this Lease
shall be limited to the interest of Lessor and its present or future partners in
the Building, and Lessee agrees to look solely to Lessor's or Lessor's present
or future partners' interest in the Building for the recovery of any judgment
from Management, it being intended that Management shall not be personally
liable for any judgment or deficiency.
k. Separability: Any provisions of this Lease which shall prove to
be invalid, void, and illegal shall in no way affect, impair, or invalidate any
other provisions hereof, and such other provisions shall remain in full force
and effect, unless Lessor in its sole discretion determines that the invalid or
illegal provision affects a material benefit or obligation hereunder.
1. Choice Of Law: This Lease shall be governed by the laws of the
State in which the Premises are located.
m. Signs: Lessee shall not place any sign upon the Premises without
Lessor's prior written consent.
n. Late Rent Payment: Rent is due on or before the 1st day of each
month of the term. If rent is not received by the fifth (5th) of the month, rent
is then delinquent and subject to late penalties.
o. Late Charges: Lessee acknowledges that late payment by Lessee to
Lessor of Rent will cause Lessor to incur costs not contemplated by this Lease,
the exact amount of such costs being extremely difficult and impracticable to
fix. Such costs include, without limitation, processing charges, accounting
charges, and late charges that may be imposed on Lessor by the terms of any
encumbrance and note secured by any encumbrance covering the Premises.
Therefore, if any installment of Rent or other sums due from Lessee is not
received by Lessor on the date same are due, Lessee shall pay to Lessor upon
receipt of written notice an additional sum equal to ten percent (10%) of such
overdue amount as a late charge. The parties agree that this late charge
represents a fair and reasonable estimate of the administrative and other costs
that Lessor will incur by reason of late payment by Lessee. Acceptance of any
late charge shall not constitute a waiver of Lessee's default with respect to
the overdue Lessor from exercising any of the other rights and remedies
available to Lessor.
Initials: LESSOR (Unreadable) LESSEE: DMC
p. Interest: Notwithstanding any other provisions of this Lease,
including paragraph 40n., any installment of Rent of other amounts due under
this Lease not paid to Lessor when due shall bear interest from the date due or
from the date of expenditure by Lessor for the account of Lessee, until the same
have been fully paid, at a rate per annum which is the lesser of the prime rate
of Bank of America or the highest rate allowed by law. The payment of such
interest shall not constitute a waiver of any default by Lessee hereunder.
q. Attorneys Fees: In the event any legal action is brought to
enforce or interpret the provisions of this Lease, the prevailing party therein
shall be entitled to recover all costs and expenses including reasonable
attorneys' fees.
r. Modifications: This Lease contains the entire agreement between
the parties relating to the rights herein granted and the obligations herein
assumed. Any oral representations or modifications concerning this Lease shall
be of no force or effect, excepting a subsequent modification in writing signed
by the party to be charged.
20
<PAGE>
s. Execution: Submission of this instrument for examination or
signature by Lessee does not constitute a reservation of or an option for lease,
and it is not effective as a lease or otherwise until execution and delivery by
both Lessor and Lessee.
t. Addenda: To the extent the provisions of any addendum hereto are
inconsistent with the provisions hereto, the provisions of the addendum shall
control.
41. NOTICES: All notices and demands required to be sent to the Lessor or
Lessee under the terms of this Lease shall be personally delivered or sent by
certified or registered mail to the addresses indicated above, or to such other
addresses as the parties may from time to time designate by notice. Notices
shall be considered given when served or two (2) days after deposit in the U.S.
mails.
IN WITNESS WHEREOF, this Lease Agreement is executed on the date and year
first above written.
LESSOR:
METROPOLITAN LIFE INSURANCE COMPANY
a New York corporation
By: /s/ Dated: 3/4/96
Its: Assistant Vice President
LESSEE:
BUSINESS OBJECTS. INC.
a Delaware corporation
By: /s/ Dennis McCann Dated: 2/29/96
Dennis McCann
Its: President
21
<PAGE>
To the Lease Agreement Dated January 18, 1996 By and Between METROPOLITAN LIFE
INSURANCE COMPANY, as Lessor and BUSINESS, OBJECTS, INC, as Lessee
EXHIBIT A
Page 1 of 2
SITE PLAN
[IMAGE NOT SHOWN]
<PAGE>
To the Lease Agreement Dated January 18, 1996 By and Between METROPOLITAN LIFE
INSURANCE COMPANY, as Lessor and BUSINESS OBJECTS, INC., as Lessee
EXHIBIT A
Page 2 of 2
EXISTING FLOOR PLAN
2870 ZANKER ROAD
[IMAGE NOT SHOWN]
<PAGE>
To the Lease Agreement Dated January 18, 1996 By and Between METROPOLITAN LIFE
INSURANCE COMPANY, as Lessor and BUSINESS OBJECTS, INC., as Lessee
EXHIBIT B
PAGE 1 OF 5
WORK LETTER AND CONSTRUCTION AGREEMENT
(ALLOWANCE)
This agreement (the "Work Letter" supplements the Lease dated January 18,
1996 executed concurrently herewith by METROPOLITAN LIFE INSURANCE COMPANY, a
New York corporation, as Landlord, and BUSINESS OBJECTS, INC., a Delaware
corporation, as Tenant (the "Lease").
1. Design Matters.
--------------
1.1. Landlord, through its architects and/or space planners ("Landlord's
Architect"), shall prepare the Design Documents (defined below) and the
Construction Drawings (defined below), as they may be modified as provided
herein, in accordance with the design specified by Tenant and reasonably
approved by Landlord.
1.2. Tenant shall be responsible for the suitability for the Tenant's needs
and business of the design and function of all Tenant Improvements (defined
below). Tenant, at its own expense, shall devote such time and provide such
instructions as may be necessary to enable Landlord to complete the matters
described below and to obtain:
(a) By March 15, 1996, Tenant's written approval of the Design
Documents approved in writing by Tenant;
(b) By March 15, 1996, Tenant's written approval of a nonbinding
preliminary estimate ("Landlord's Preliminary Estimate") provided by Landlord of
the cost of the Tenant Improvements shown on the Construction Drawings; and
(c) By March 15, 1996, Tenant's written approval of the Construction
Drawings approved in writing by Tenant.
1.3. Certain Definitions. The following definitions shall apply for
-------------------
purposes of this Work Letter:
(a) "Design Documents" shall mean layout plans and specifications for
the real property improvements to be constructed by Landlord in the Premises
which are the final product of the preliminary space planning and which
include, among other things, the location of all partitions, doors, HVAC
(heating, ventilating and air conditioning systems) distribution, ceiling
systems, light fixtures, plumbing installations, electrical installations and
outlets, telephone outlets and other installations required by Tenant, as well
as wall finished and floor coverings, in sufficient detail for Landlord to
commence preparation of the Construction Drawings (defined below);
(b) "Construction Drawings" shall mean the final architectural and
engineering plans and specifications for the real property improvements to be
constructed by Landlord in the Premises in sufficient detail to be submitted for
governmental approvals and building permits and to serve as the detailed
construction drawings and specifications for the contractor, and shall include
among other things, the location of all partitions, doors, HVAC (heating,
ventilating and
<PAGE>
To the Lease Agreement Dated January 18, 1996 By and Between METROPOLITAN LIFE
INSURANCE COMPANY, as Lessor and BUSYNESS OBJECTS, INC., as Lessee
EXHIBIT B
PAGE 2 OF 5
WORK LETTER AND CONSTRUCTION AGREEMENT
(ALLOWANCE)
air conditioning systems) distribution, ceiling systems, light fixtures,
plumbing installations, electrical installations and outlets, telephone outlets
and other installations required by Tenant, as well as wall finishes and floor
coverings; and
(c) All real property improvements, to be constructed by Landlord as
shown on the Construction Drawings, as they may be modified as provided herein,
shall be defined as "Tenant Improvements", and the construction and installation
of such Tenant Improvements is sometimes referred to herein or in the Lease as
"Landlord's Work".
2. Construction; Landlord's Contribution; Tenant Improvement Costs.
---------------------------------------------------------------
2.1. Construction; Landlord's Contribution. Landlord shall complete the
-------------------------------------
construction of the Tenant Improvements in a good and workmanlike manner, up to
a maximum cost to Landlord as follows:
(a) of Two Hundred Sixty Eight Thousand Forty Dollars and No Cents
($268,040.00) ("Landlord's Maximum Contribution").
2.2. Tenant Improvement Costs. The cost of the Tenant Improvements
("Tenant
------------------------
Improvement Costs") to be paid by Landlord from, but not in excess of,
Landlord's Maximum
Contribution shall include:
(a) The costs of Landlord's Architect and any other consultants
retained by Landlord in connection with the preparation of Design
Documents and Construction Drawings and engineering costs
associated with completion of the State of California energy
utilization calculations under Title 24 legislation;
(b) All costs of obtaining from the City of San Jose and any other
governmental authority building and occupancy permit, if any;
(c) All costs of interior design and finish schedule plans and
specifications including as-built drawings;
(d) All direct and indirect costs of procuring, installing and
constructing the Tenant Improvements, including, without
limitation: (i) the construction fee for overhead and profit and
the cost of all on-site supervisory and administrative staff,
office, equipment and temporary services rendered or provided by
Landlord's contractor in connection with construction of the
Tenant Improvements and (ii) the cost of any services or
utilities made available by Landlord and a construction
supervision fee payable to Landlord; and
(e) All fees payable to Landlord's architectural and engineering firm
it if is required by Tenant to redesign any portion of the Tenant
Improvements following Tenant's approval of the Construction
Drawings.
<PAGE>
To the Lease Agreement Dated January 18, 1996 By and Between METROPOLITAN LIFE
INSURANCE COMPANY, as Lessor and BUSINESS OBJECTS, INC., as Lessee
EXHIBIT B
PAGE 3 OF 5
WORK LETTER AND CONSTRUCTION AGREEMENT
(ALLOWANCE)
In no event shall the Tenant Improvement Costs include (i) any costs of
procuring or installing in the Premises any trade fixtures, equipment,
furniture, furnishings, telephone equipment or other personal property
("Personal Property") to be used in the Premises by Tenant, and the cost of such
Personal Property shall be paid by Tenant, or (ii) any costs or expenses of any
consultants retained by Tenant with respect to design, procurement, installation
or construction of improvements or installations, whether real or personal
property, for the Premises.
2.3. Limitations of Landlord's Obligations. Upon Substantial Completion of
-------------------------------------
the Tenant Improvements, Landlord shall have no further obligation to
construct improvements or construct modifications to or changes in the Tenant
Improvements or, except as provided in Section 2 of the Lease, to complete or
repair the Tenant Improvements. If Landlord's Maximum Contribution exceeds
Tenant Improvement Costs, then Landlord shall retain such excess and shall
have no obligation or liability to Tenant with respect to such excess.
3. Costs of Tenant Improvements in Excess of Landlord's Maximum
------------------------------------------------------------
Contribution. As soon as reasonably available after completion of the
------------
Construction Drawings, Landlord shall notify Tenant in writing of the cost of
the Tenant Improvements in excess of the Landlord's Maximum Contribution (such
notification shall be referred to as "Landlord's Cost Statement"). Within five
(5) days after receipt of Landlord's Cost Statement, Tenant shall, in writing,
give Landlord authorization to complete the Tenant Improvements in accordance
with the Construction Drawings, and to the extent that there remain any costs
of the Tenant Improvements in excess of the costs that Tenant requests be paid
out of Landlord's Maximum Contribution, Tenant shall accompany said
authorization with a good check made payable to the order of Landlord in the
amount of the excess cost authorized by Tenant of the Tenant Improvements over
Landlord's Maximum Contribution. In such authorization, Tenant may, pursuant
to Section 4, request a Change Order (defined below) to the approved
Construction Drawings to reduce or delete all or part of such excess costs,
but any delay in completion of the Premises resulting from such request for a
Change Order or from the changes so made or necessitated shall be chargeable
as Tenant Delay as provided in Section 5. If such written authorization and
check (if applicable) are not received by Landlord, Landlord shall not be
obligated to commence work on the Premises and any resulting delay in the
completion of the Premises shall be chargeable against Tenant as Tenant Delay
as provided in Section 5 of this Work Letter.
4. Changes. If Tenant shall request any chance, addition or alteration
-------
in the approved Construction Drawings, Landlord shall promptly give Tenant a
written estimate of (a) the cost of engineering and design services and the
construction contractor services to prepare a change order (the "Change
Order") in accordance with such request, (b) the cost of work to be performed
pursuant to such Change Order, and (c) the time delay expected because of such
requested Change Order. Within three (3) business days following Tenant's
receipt of the foregoing written estimate, Tenant shall notify Landlord in
writing whether it approves such written estimate. If Tenant approves such
written estimate and if such cost is in excess of Landlord's Maximum
Contribution, Tenant upon receipt of Landlord's Statement, shall accompany
such approval with a good check made payable to the order of Landlord in the
amount of the estimated cost of preparing the Change Order and performing the
work thereto, and the foregoing shall constitute Landlord's authorization to
proceed. If such written authorization, and check if required, are not
received by Landlord within such three (3) business day period, Landlord shall
not be obligated
<PAGE>
To the Lease Agreement Dated January 18, 1996 By and Between METROPOLITAN LIFE
INSURANCE COMPANY, as Lessor and BUSINESS OBJECTS, INC., as Lessee
EXHIBIT B
PAGE 4 OF 5
WORK LETTER AND CONSTRUCTION AGREEMENT
(ALLOWANCE)
to prepare the Change Order or perform any work in connection therewith. Upon
completion of the work of the Change Order and submission of the final cost
thereof by Landlord to Tenant, Tenant shall promptly pay to Landlord any such
additional amounts in excess of Landlord's Maximum Contribution.
5. Tenant Delay. If the completion of the Tenant Improvements in the
------------
Premises is delayed (i) at the request of Tenant, (ii) by Tenant's failure to
timely comply with the provisions of this Work Letter, (iii) by Tenant's
failure to timely approve, pursuant to Section 1.2, Construction Drawings
which are consistent with the Design Documents or by Tenant's request for
change, addition or alteration in the Construction Drawings which is not
consistent with the Design Documents, (iv) by all changes or alterations in
the work ordered by Tenant or by extra work ordered by Tenant, or (v) because
Tenant chooses to have additional work performed by Landlord, then Tenant
shall be responsible for all costs and any expenses occasioned by such delay
including, without limitation, any costs and expenses attributable to
increases in labor or materials; and each such event shall be a "Tenant Delay"
and as provided in Section 2 of the Lease, for purposes of establishing the
commencement of Tenant's obligations under the Lease which have not commenced
prior to Substantial Completion, including, without limitation, the
commencement of Tenant's obligation to pay Rent, the date on which such
obligations commence shall be advanced one day for each day of Tenant Delay.
6. Entry By Tenant. Tenant may, with Landlord's written consent, enter
---------------
the Premises prior to the Commencement Date solely for the purpose of
installing Tenant's Personal Property as long as such entry will not interfere
with the orderly construction and completion of the Premises. Tenant shall
notify Landlord of its desired time(s) of entry and shall submit for
Landlord's approval the scope of the work to be performed and the name(s) of
the contractor(s) who will perform such work. Tenant hereby indemnities and
agrees to protect, defend and hold Landlord, any mortgagee, ground lessor or
beneficiary of a mortgage, ground lease or deed of trust related to the
Premises, the Building or the Project harmless from and against any and all
suits, claims, actions, losses, costs or expenses (including claims for
worker's compensation) of any nature whatsoever, together with reasonable
attorneys' fees for counsel of Landlord's choice, arising out of or in
connection with the installation of Tenant's Personal Property (including but
not limited to claims for breach of warranty, personal injury or property
damage). Landlord shall have the right, in Landlord's sole and exclusive
discretion, to settle, compromise, or otherwise dispose of any and all suits,
claims, and actions related to the installation of Tenant's Personal Property
or equipment, to the extent such claims are made against Landlord. Any defense
made by Tenant under this Section 6 shall be made only with counsel (i)
previously approved in writing by Landlord, and (ii) willing to cooperate with
counsel of Landlord's choice in connection with such defense. The obligations
of Tenant under this Section 6 of this Work Letter shall survive the
expiration or earlier termination of the Lease and the performance of
Landlord's Work and the installation of Tenant's Personal Property under this
Work Letter.
7. Defined Terms. Capitalized terms used in this Work Letter and not
-------------
otherwise defined, other than the terms capitalized in the ordinary course of
punctuation, shall, unless otherwise specified herein, have the same meanings
and definitions set forth in the Lease.
<PAGE>
To the Lease Agreement Dated January 18, 1996 By and Between METROPOLITAN LIFE
INSURANCE COMPANY, as Lessor and BUSINESS OBJECTS, INC., as Lessee
EXHIBIT B
PAGE 5 OF 5
WORK LETTER AND CONSTRUCTION AGREEMENT
(ALLOWANCE)
8. Force and Effect. The terms and conditions of this Work Letter
----------------
supplement the Lease and shall be construed to be a part of the Lease and
shall be deemed incorporated in the Lease by this reference. Should any
inconsistency arise between this Work Letter and the Lease as to the specific
matters which are the subject of this Work Letter, the terms and conditions of
this Work Letter shall control.
IN WITNESS WHEREOF, the parties hereto have executed this Work Letter as of
the date first set forth in the Lease.
TENANT: LANDLORD:
------- ---------
BUSINESS OBJECTS, INC. METROPOLITAN LIFE INSURANCE COMPANY,
A Delaware corporation a New York corporation
By: /s/ Dennis McCann By: /s/
Dennis McCAnn
Print Name Print Name
Its: President Its: Assistant Vice President
By:
Print Name
Its:
<PAGE>
To the Lease Agreement Dated January 18, 1996 By and Between METROPOLITAN LIFE
INSURANCE COMPANY, as Lessor and BUSINESS OBJECTS, INC., as Lessee
EXHIBIT C
PAGE 1 OF 1
RENT
Lessee hereby agrees to pay rent on the first day of each month as set forth
herein below:
Monthly Rent Period
------------ ------
May 1, 1996 to and
including October 31, 1998 $ 87,826.50
November 1, 1998 to and $ 90,754.05
including April 30, 2001
<PAGE>
To the Lease Agreement Dated January 18, 1996 By and Between METROPOLITAN LIFE
INSURANCE COMPANY, as Lessor and BUSINESS OBJECTS, INC., as Lessee
EXHIBIT D
PAGE 1 OF 3
SUMMARY OF COVENANTS, CONDITIONS AND RESTRICTIONS
This summarizes those restrictions affecting Lessees of Lincoln Park pursuant to
the documents entitled Declaration of Covenants, Conditions, and Restrictions of
Montague Park, Recorded December 23, 1980, and Declaration of Covenants,
Conditions, and Restrictions of Montague Park including First Landscape Criteria
and First Sign Criteria, recorded January 2, 1981 (hereafter the "Restriction").
The Restrictions are as follows:
1. Should Lessee desire to (a) construct or erect structures or other
improvements on the lot, (b) modify or alter the exterior surface of the then-
existing structures, or (c) otherwise make changes of any type whatsoever to any
landscaping or paved area on the lot, Lessee must obtain, through coordination
with Lessor, prior to written approval for the Approving Agent, as defined in
paragraph 1.5 of The Restrictions.
2. No parking permitted within a frontage set back area adjacent to any street
unless such parking is screened from view from the street by a screen wall,
shrubbery, or berms at least forty-two (42) inches high.
3. All free-standing or roof-mounted electrical, mechanical, processing, air-
conditioning, or any other equipment or devices must be screened from view in
such a manner that these devices are not visible from adjacent property.
4. The following are the only uses permitted in the Park:
a. Manufacture (including storage of raw materials and finished products
therefrom) of the following:
(1) Pharmaceutical and cosmetic products;
(2) Optical, electronic, timing and measuring instruments for use in research,
development, business, and professional facilities; and
(3) Industrial, communication, transportation, and utility equipment;
b. Wholesaling, warehousing, and distribution establishments and public
utility facilities (excluding storing and warehousing of acids, chemicals,
cement, plaster, petroleum products, or explosive materials);
c. Research, experimental, and engineering laboratories;
d. Catalog sales and mail order establishments;
e. Establishments for the repair, cleaning, and servicing of commercial or
industrial equipment or products;
f Construction firms but only such construction firms whose activities are
carried on entirely within and enclosed building and have no construction yard
on said lot;
g. So long as there is an Approving Agent, any commercial use not specifically
prohibited which is first approved in writing by the Approving Agent;
h. So long as there is an Approving Agent, any industrial, manufacturing use
not specifically prohibited which is first approved in writing by the Approving
Agent.
<PAGE>
To the Lease Agreement Dated January 18, 1996 By and Between METROPOLITAN LIFE
INSURANCE COMPANY, as Lessor and BUSINESS OBJECTS, INC, as Lessee
EXHIBIT D
PAGE 2 OF 3
SUMMARY OF COVENANTS, CONDITIONS AND RESTRICTIONS
i. If there is no Approving Agent, any industrial, manufacturing or commercial
use permitted by the then-existing zoning or other applicable land-use
regulations as promulgated by requisite governmental authorities, except those
uses specifically prohibited.
5. All permitted uses shall be performed or carried out entirely within a
building that is so designed and constructed. All permitted uses which cannot
be carried on within a building may be permitted upon obtaining prior approval
from Approving Agent through coordination with Lessor.
6. The following operations and uses shall not be permitted on any property
subject to the Restrictions:
a. Residential of any type;
b. Trailer courts, mobile home parks, recreation vehicle camp grounds;
C. Junk yards for recycling facilities;
d. Drilling for and/or the removal of oil, gas, or other hydrocarbon
substances (except that this provision shall not be deemed to prohibit the entry
of the property below a depth of five hundred (500) feet for such a purpose);
e. Commercial excavation except in the course of approved construction;
f. Distillation of bones;
g. Dumping, disposal, incineration, or reduction of garbage, sewage, offal,
dead animals, or refuse;
h. Fat rendering;
i. Stockyard or slaughter of animals;
j. Cemeteries;
k. Refining of petroleum or of its products;
1. Smelting of iron, tin, zinc, or other ores;
m. Jail or honor farms;
o. Truck or bus terminals;
P. Petroleum storage yards;
q. Auto wrecking, auto repair or auto parking establishments.
7. No use is permitted which emits dust, sweepings, fumes, radiation, or other
harmful matter into the atmosphere or any body of water which may have adverse
effects. No use permitted which produces intense glare or heat, creates sound
pressure level in violation of any regulation of any public body having
jurisdiction, or creates a perceptible ground vibration.
<PAGE>
To the Lease Agreement Dated January 18, 1996 By and Between METROPOLITAN LIFE
INSURANCE COMPANY, as Lessor and BUSINESS OBJECTS, INC., as Lessee
EXHIBIT D
PAGE 3 OF 3
SUMMARY OF COVENANTS, CONDITIONS AND RESTRICTIONS
8. No sign may be installed or replaced upon any lot(s) in the Park unless the
sign plan is approved in coordination with the Lessor by the Approving Agent.
The only signs permitted are those signs identifying the business name,
business, and products of the person or firm occupying the lot(s) and those
offering lots for sale or lease and, if desired, the logo of the entity
occupying said lot(s). Any sign so permitted must be located in the forty (40)
foot frontage setback area and be less than six (6) feet in height. Only one
sign is permitted in each frontage setback area abutting a public street. All
portions of any permitted sign must be stationary and non-illuminating.
9. Any landscaping affecting any property located in the Park must first be
approved, in coordination with the Lessor, by the Approving Agent in writing.
10. Materials, supplies, or equipment, including, but not limited to, company-
owned or operated trucks or motor vehicles, are not permitted to be stored in
any area on a lot except inside a closed building or behind a visual barrier
screening such areas from neighboring properties or streets. All outdoor refuse
collection areas must be visually screened. No storage areas or refuse
collection areas are permitted to be maintained between a street and the front
of the structure nearest such street.
11. No excavation shall be made on, and no sand, gravel, soil, or other
material shall be removed from any lot, except in connection with construction
of structures which are approved in conjunction with Lessor by Approving Agent.
<PAGE>
To the Lease Agreement Dated January 18, 1996 By and Between METROPOLITAN LIFE
INSURANCE COMPANY, as Lessor and BUSINESS OBJECTS, INC., as Lessee
EXHIBIT E
PAGE 1 OF 2
RULES AND REGULATIONS
1. No advertisement, picture of sign of any sort shall be displayed on or
outside the Premises without the prior written consent of the Lessor. Lessor
shall have the right to remove any such unapproved item without notice and at
Lessee's expense.
2. Except in the normal conduct of its business, Lessee shall not regularly
park motor vehicles in designated parking areas after the conclusion of normal
daily business activity.
3. Lessee shall not use any method of heating or air conditioning other than
that supplied by Lessor without the consent of Lessor.
4. All window coverings installed by Lessee and visible from the outside of
the building require the prior written approval of the Lessor.
5. Lessee shall not use, keep or permit to be used or kept any foul or
obnoxious gas or substance or any inflammable or combustible materials on or
around the Premises.
6. With respect to any locks for which Lessor has not been given a key, Lessee
shall provide Lessor a list of individuals who possess such keys and their
telephone numbers.
7. Lessee agrees not to make any duplicate keys without the prior consent of
Lessor.
8. Lessee shall park motor vehicles in those general parking areas as
designated by Lessor except for loading and unloading. During those periods of
loading and unloading, Lessee shall not unreasonably interfere with traffic flow
within the Project and loading and unloading areas of other Lessees.
9. Lessee shall not disturb, solicit or canvas any occupant of the Building or
Project and shall cooperate to prevent same.
10. No person shall go on the roof without Lessor's permission.
11. Business machines and mechanical equipment belonging to the Lessee which
cause noise or vibration that may be transmitted to the structure of the
Building, to such a degree as to be objectionable to Lessor or other Lessees,
shall be placed and maintained by Lessee, at Lessee's expense, on vibration
eliminators or other devices sufficient to eliminate noise vibration.
12. All goods, including material used to store goods, delivered to the
Premises of the Lessee shall be immediately moved into the Premises and shall
not be left in parking or receiving areas overnight.
13. Tractor trailers which must be unhooked or parked with dolly wheels beyond
the concrete loading areas must use steel plates or wood blocks under the dolly
wheels to prevent damage to the asphalt paving surfaces. No parking or storing
of such trailers will be permitted in the auto parking areas of the Project or
on streets adjacent thereto.
14. Forklifts which operate on asphalt paving areas shall not have solid rubber
tires and shall only use tires that do not damage the asphalt.
15. Lessee shall not store or permit the storage or placement of goods or
merchandise in or around the common areas surrounding the Premises. No displays
or sales of merchandise shall be allowed in the parking lots or other common
areas.
<PAGE>
To the Lease Agreement Dated January 18, 1996 By and Between METROPOLITAN LIFE
INSURANCE COMPANY, as Lessor and BUSINESS OBJECTS, INC, as Lessee
EXHIBIT E
PAGE 2 OF 2
RULES AND REGULATIONS
16. Operating Hours for the Building in which the Premises are located shall be
from 7 a.m. to 6 p.m. on generally recognized business days.
17. Tenants are required to use chair pads under all desk chairs in carpeted
areas.
18. Smoking is prohibited in all enclosed Common Areas of the building,
including, but not limited to, the main lobbies, hallways, stairwells,
elevators, elevator lobbies, locker/shower rooms, restrooms, and conference
room. The foregoing shall not be deemed to prohibit smoking within demised
Premises. When smoking outside the building, ash receptacles must be used by
the smoker. Smokers must not leave any smoking material or debris in the area
where they have been smoking.