California-Sunnyvale-460 Oakmead Parkway Lease - California First Ltd. and Electronic Publishing Resources Inc.
CALIFORNIA FIRST, LTD.
AND
ELECTRONIC PUBLISHING RESOURCES, INC.
LEASE
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SUMMARY OF LEASE
CALIFORNIA FIRST, LTD.
1. DATE OF LEASE:
2. LANDLORD: California First, Ltd.
3945 Freedom Circle, Suite 640
Santa Clara, California 95054
3. TENANT: Electronic Publishing Resources,
Inc.
4. PREMISES: 460 Oakmead Parkway
Sunnyvale, California
5. SQUARE FEET: 9,159 square feet
6. PERMITTED USE: General office use and research and
development uses
7. TERM: Three years
(a) SCHEDULED COMMENCEMENT DATE: May 13, 1994
(b) SCHEDULED EXPIRATION DATE: May 12, 1997
8. RENT:
(a) BASIC RENT: $ 6,640.28 per month
(b) ADJUSTMENTS TO BASIC RENT: None
(c) TENANT'S ESTIMATED SHARE OF $ 1,108.24 per month
COMMON AREA CHARGES:
9. SECURITY DEPOSIT: $ 6,640.28
10. PARKING SPACES PROVIDED: Thirty-six (36)
11. OTHER IMPORTANT PROVISIONS: Option to Extend Term
Right to First Refusal on
Expansion Space
First Right to Lease RFR Space
Option to Terminate
Reduced Rent
THIS SUMMARY OF LEASE IS INTENDED TO SUMMARIZE CERTAIN OR PROVISIONS IN THE
ATTACHED LEASE, IN THE EVENT OF ANY CONFLICT OR INCONSISTENCY BETWEEN THE
PROVISIONS OF THIS SUMMARY AND THE LEASE, THE PROVISIONS OF THE LEASE SHALL
GOVERN.
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TABLE OF CONTENTS
ITEM PAGE
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1. USE
2. TERM
3. POSSESSION
4. MONTHLY RENT
5. ADJUSTMENT OF BASIC RENT
6. RESTRICTION ON USE
7. COMPLIANCE WITH LAWS
8. ALTERATIONS
9. REPAIR AND MAINTENANCE
10. LIENS
11. INSURANCE
12. UTILITIES AND SERVICE
13. TAXES AND OTHER CHARGES
14. ENTRY BY LANDLORD
15. COMMON AREA; PARKING
16. COMMON AREA CHARGES
17. DAMAGE BY FIRE; CASUALTY
18. INDEMNIFICATION
19. ASSIGNMENT AND SUBLETTING
20. DEFAULT
21. LANDLORD'S RIGHT TO CURE TENANT'S DEFAULT
22. EMINENT DOMAIN
23. NOTICE AND COVENANT TO SURRENDER
24. TENANT'S QUITCLAIM
25. HOLDING OVER
26. SUBORDINATION
27. CERTIFICATE OF ESTOPPEL
28. SALE BY LANDLORD
29. ATTORNMENT TO LENDER OR THIRD PARTY
30. DEFAULT BY LANDLORD
31. CONSTRUCTION CHANGES
32. MEASUREMENT OF PREMISES
33. ATTORNEY FEES
34. SURRENDER
35. WAIVER
36. EASEMENTS; AIRSPACE RIGHTS
37. RULES AND REGULATIONS
38. NOTICES
39. NAME
40. GOVERNING LAW; SEVERABILITY
41. DEFINITIONS
42. TIME
43. INTEREST ON PAST DUE OBLIGATIONS; LATE CHARGE
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44. ENTIRE AGREEMENT
45. CORPORATE AUTHORITY
46. RECORDING
47. REAL ESTATE BROKERS
48. EXHIBITS AND ATTACHMENTS
49. ENVIRONMENTAL MATTERS
50. SIGNAGE
51. SUBMISSION OF LEASE
52. TENANT IMPROVEMENTS
53. ADDITIONAL RENT
54. LANDLORD'S OPTION TO RELOCATE PREMISES
55. OPTION TO EXTEND TERM
56. RIGHT OF FIRST REFUSAL ON EXPANSION SPACE
57. FIRST RIGHT TO LEASE RFR SPACE
58. OPTION TO TERMINATE
59. REDUCED RENT
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LEASE
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THIS LEASE is made this 28th day of April, 1994, by and between CALIFORNIA
FIRST, LTD., a Florida limited partnership ("Landlord"), and ELECTRONIC
PUBLISHING RESOURCES, INC., a Delaware corporation ("Tenant").
W I T N E S S E T H :
Landlord leases to Tenant and Tenant leases from Landlord those certain
premises outlined in red on Exhibit A (the "Premises") commonly known as 460
Oakmead Parkway, Sunnyvale, California, which Landlord and Tenant hereby agree
consists of approximately nine thousand one hundred fifty-nine (9,159) square
feet in California First, Ltd. (the "Project"). As used herein the term Project
shall mean and include all of the land described in Exhibit B and all the
buildings, improvements, fixtures and equipment now or hereafter situated on
said land.
Tenant covenants, as a material part of the consideration of this lease, to
perform and observe each and all of the terms, covenants and conditions set
forth below, and this lease is made upon the condition of such performance and
observance.
1. USE
Subject to the restrictions contained in paragraph 6 hereof, Tenant
shall use the Premises for general office use and shall not use or permit the
Premises to be used for any other purpose.
2. TERM
(a) The term shall be for three (3) years (unless sooner terminated
as hereinafter provided) and, subject to paragraphs 2(b) and 3, shall commence
on May 13, 1994 and end on May 12, 1997.
(b) Possession of the Premises shall not be deemed tendered and the
term shall not commence until the first to occur of the following (on or after
May 13, 1994):
(1) One day after a final building permit acknowledging
completion and permitting occupancy is granted by the proper governmental
agency;
(2) Upon the occupancy of the Premises by any of Tenant's
operating personnel; or
(3) Upon substantial completion of all work to be done by
Landlord pursuant to Exhibit C to this lease, exclusive of telephones or other
communication systems and punchlist items, or, if Landlord is prevented from or
delayed in completing its work under
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Exhibit C to this lease due to the acts or omissions of Tenant, then upon the
date by which such work would have been substantially completed but for such
acts or omissions by Tenant.
3. POSSESSION
(a) If Landlord for any reason cannot deliver possession of the
Premises to Tenant by the date of commencement set forth in paragraph 2(a), this
lease shall not be void or voidable, Landlord shall not be liable to Tenant for
any loss or damage on account thereof and, unless Landlord's failure to deliver
possession of the Premises to Tenant by the scheduled commencement date set
forth in paragraph 2(a) is caused by Tenant caused delays as defined in Exhibit
C to this lease, Tenant shall not be liable for rent until the commencement of
the term is determined in accordance with paragraph 2(b). If the term commences
on a date other than the date specified in paragraph 2(a) above, then the
parties shall immediately execute an amendment to this lease stating the actual
date of commencement and the revised expiration date. The expiration date of the
term shall be extended by the same number of days that Tenant's possession of
the Premises was delayed from that set forth in paragraph 2(a).
Notwithstanding the above, if Landlord is unable to deliver possession
of the Premises by June 15, 1994 (plus the number of days of delay caused by
Tenant or by strikes or other causes beyond Landlord's reasonable control), then
Tenant may, at its option (exercisable only within ten (10) days following such
date) and as its sole remedy terminate this lease; provided, however, if Tenant
fails to timely exercise such right within such ten (10) days period, Tenant's
right to terminate shall lapse. If Tenant elects to terminate this lease as
provided in this paragraph, all amounts deposited with Landlord by Tenant shall
be returned to Tenant and Landlord shall not be liable to Tenant for any loss,
damage or expense resulting from Landlord's failure to deliver possession.
(b) Tenant's inability or failure to take possession of the Premises
when delivery is tendered by Landlord (with the improvements to be done pursuant
to Exhibit C to this lease substantially completed) shall not delay the
commencement of the term of this lease or Tenant's obligation to pay rent.
Tenant acknowledges that Landlord shall incur significant expenses upon the
execution of this lease, even if Tenant never takes possession of the Premises,
including without limitation brokerage commissions and fees, legal and other
professional fees, the costs of space planning and the costs of construction of
improvements in the Premises. Tenant acknowledges that all of said expenses
shall be included in measuring Landlord's damages should Tenant breach the terms
of this lease.
4. MONTHLY RENT
(a) Basic Rent. Tenant shall pay to Landlord as basic rent for the
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Premises, in advance and subject to adjustment as provided in paragraph 5, the
sum of Six Thousand Six Hundred Forty and 28/100 Dollars ($6,640.28) on or
before the first day of the first full calendar month of the term and on or
before the first day of each and every successive calendar month. Basic rent
for any partial month shall be payable in advance and shall be prorated at the
rate of 1/30th of the monthly basic rent per day.
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(b) Common Area Charges. In addition to the above basic rent and as
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additional rent, Tenant shall pay to Landlord, subject to adjustments and
reconciliation as provided in paragraph 16 of this lease, the sum of One
Thousand One Hundred Eight and 24/100 Dollars ($1,108.24) on or before the first
day of the first full calendar month of the term and on the first day of each
and every successive calendar month, said sum representing Tenant's estimated
payment of its percentage share of common area charges as provided for in
paragraph 16 of this lease. Payment of common area charges for any partial
month shall be payable in advance and shall be prorated at the rate of 1/30th of
the monthly payment of common area charges per day.
(c) Manner and Place of Payment. All payments of basic rent and
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common area charges shall be paid to Landlord, without deduction or offset, in
lawful money of the United States of America, at the office of Landlord at 3945
Freedom Circle, Suite 640, Santa Clara, California 95054, or to such other
person or place as Landlord may from time to time designate in writing.
(d) Third Month's Rent. Concurrently with Tenant's execution of this
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lease, Tenant shall deposit with Landlord the sum of Seven Thousand Seven
Hundred Forty-Eight and 52/100 Dollars ($7,748.52) to be applied against the
basic rent and common area charges for the third lease month of the term.
(e) Security Deposit. Concurrently with Tenant's execution of this
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lease, Tenant shall deposit with Landlord the sum of Six Thousand Six Hundred
Forty and 28/100 Dollars ($6,640.28), which sum shall be held by Landlord as a
security deposit for the faithful performance by Tenant of all of the terms,
covenants and conditions of this lease to be kept and performed by Tenant. If
Tenant defaults with respect to any provision of this lease, including but not
limited to, the provisions relating to the payment of basic rent and common area
charges, Landlord may (but shall not be required to) use, apply, or retain all
or any part of this security deposit for the payment of any amount which
Landlord may spend by reason of Tenant's default or to compensate Landlord for
any other loss or damage which Landlord may suffer by reason of default. If any
portion of said deposit is so used, Tenant shall, within ten (10) days after
written demand therefor, deposit cash with Landlord in the amount sufficient to
restore the security deposit to its original amount; Tenant's failure to do so
shall be a material breach of this lease. Landlord shall not be required to keep
this security deposit separate from its general funds and Tenant shall not be
entitled to interest on such deposit. If Tenant is not in default at the
expiration or termination of this lease, the security deposit or any balance
thereof shall be returned to Tenant within thirty (30) days after Tenant has
vacated the Premises. In the event of transfer of Landlord's interest in this
lease, Landlord shall transfer said deposit to Landlord's successor in interest,
and Tenant agrees that Landlord shall thereupon be released from liability for
the return of such deposit or any accounting therefor.
5. ADJUSTMENT OF BASIC RENT
Except as set forth in paragraph 59 below, there shall be no
adjustments to basic rent during the initial term of this lease.
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6. RESTRICTION ON USE
Tenant shall not do or permit to be done in or about the Premises or
the Project, nor bring or keep or permit to be brought or kept in or about the
Premises or Project, anything which is prohibited by or will in any way increase
the existing rate of, or otherwise affect, fire or any other insurance covering
the Project or any part thereof, or any of its contents, or will cause a
cancellation of any insurance covering the Project or any part thereof, or any
of its contents. Tenant shall not do or permit to be done anything in or about
the Premises or the Project which will constitute waste or which will in any way
obstruct or unreasonably interfere with the rights of other tenants or occupants
of the Project or injure or unreasonably annoy them, or use or allow the
Premises to be used for any unlawful purpose, nor shall Tenant cause, maintain
or permit any nuisance in or about the Premises or the Project. No loudspeaker
or other device, system or apparatus which can be heard outside the Premises
shall be used in or at the Premises without the prior written consent of
Landlord. Tenant shall not use the Premises in any manner that will cause or
emit any objectionable odor, noise or light into the adjoining premises or
Common Area. Tenant shall not do anything on the Premises that will cause
damage to the Project and Tenant shall not overload the floor capacity of the
Premises or the Project. No machinery, apparatus or other appliance shall be
used or operated in or on the Premises that will in any manner injure, vibrate
or shake the Premises. Landlord shall be the sole judge, of whether such odor,
noise, light or vibration is such as to violate the provisions of this
paragraph. No waste materials or refuse shall be dumped upon or permitted to
remain upon any part of the Premises or the Project except in trash containers
placed inside exterior enclosures designated for that purpose by Landlord, or
where otherwise designated by Landlord; and no toxic or hazardous materials
shall be disposed of through the plumbing or sewage system. No materials,
supplies, equipment, finished products or semi-finished products, raw materials
or articles of any nature shall be stored or permitted to remain outside of the
building proper. No retail sales shall be made on the Premises. Tenant shall
comply with any covenant, condition or restriction ("C.C. & R.s") affecting the
Premises.
7. COMPLIANCE WITH LAWS
Tenant shall, in connection with its use and occupation of the
Premises, at its sole cost and expense, promptly observe and comply with (i) all
laws, statutes, ordinances and governmental rules, regulations and requirements
of federal, state, county, municipal and other governmental authorities, now or
hereafter in effect, which shall impose any duty upon Landlord or Tenant with
respect to the use, occupancy or alteration to the Premises, (ii) with the
requirements of any board of fire underwriters or other similar body now or
hereafter constituted and (iii) with any direction or occupancy certificate
issued pursuant to law by any public authority; provided, however, that no such
failure shall be deemed a breach of these provisions if Tenant, immediately upon
notification, commences to remedy or rectify said failure. The judgment of any
court of competent jurisdiction or the admission of Tenant in any action against
Tenant (whether or not Landlord is a party thereto) that Tenant has violated any
such law, statute, ordinance or governmental rule, regulation, requirement,
direction or provision, shall be conclusive of that fact as between Landlord and
Tenant. This lease shall remain in full force and effect notwithstanding any
loss of use or other effect on Tenant's enjoyment of the Premises by reason of
any governmental laws, statutes, ordinances, rules, regulations and requirements
now or hereafter in effect.
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8. ALTERATIONS
Tenant shall not make or suffer to be made any alteration, addition or
improvement to or of the Premises or any part thereof (collectively referred to
herein as alterations") without (i) the prior written consent of Landlord, which
shall not be unreasonably withheld, (ii) a valid building permit issued by the
appropriate governmental authority and (iii) otherwise complying with all
applicable laws, regulations and requirements of governmental agencies having
jurisdiction and with the rules, regulations and requirements of any board of
fire underwriters or similar body; provided, however, that alterations costing
Five Thousand Dollars ($5,000) or less per lease year in the aggregate shall not
require Landlord's prior consent, provided that such alterations comply with the
terms of items (ii) and (iii) above, and Tenant informs Landlord prior to
commencement of the alterations of (a) the nature of the alterations, (b) the
cost thereof, and (c) the contractor performing the work. Landlord's consent to
any requested alteration shall not create on the part of Landlord or cause
Landlord to incur any responsibility or liability for such alteration's
compliance with all laws, rules and regulations of federal, state, county,
municipal and other governmental authorities. Any alteration made by Tenant
(excluding moveable furniture and trade fixtures not attached to the Premises)
shall at once become a part of the Premises and belong to Landlord. Without
limiting the foregoing, all heating, lighting, electrical (including all wiring,
conduit, outlets, drops, buss ducts, main and subpanels), air conditioning,
partitioning, drapery and carpet installations made by Tenant, regardless of how
attached to the Premises, together with all other alterations that have become
an integral part of the Project in which the Premises are a part, shall be and
become part of the Premises and belong to Landlord upon installation and shall
not be deemed trade fixtures, and shall remain upon and be surrendered with the
Premises at the termination of the lease.
Any alteration made by Tenant shall be made by Tenant at its sole
risk, cost and expense and only after Landlord's written approval of any
contractor or person selected by Tenant for that purpose, and the same shall be
made at such time and in such manner as Landlord may from time to time
designate. Upon Tenant's prior written request, at the time Landlord consents
to such alterations, Landlord shall inform Tenant as to whether Tenant will be
required to remove such alterations at the termination of this lease. Tenant
shall, if required by Landlord, secure at Tenant's cost a completion and lien
indemnity bond for such work. Upon the expiration or sooner termination of the
term, Landlord may, at its sole option, require Tenant, at Tenant's sole cost
and expense, to promptly remove any such alteration made by Tenant and
designated by Landlord to be removed, repair any damage to the Premises caused
by such removal and restore the Premises to its condition existing prior to such
alteration. Any moveable furniture and equipment or trade fixtures remaining on
the Premises at the expiration or other termination of the term shall become the
property of the Landlord unless promptly removed by Tenant.
If during the term any alteration, addition or change of the Premises
is required by law, regulation, ordinance or order of any public authority,
Tenant, at its sole cost and expense, shall promptly make the same. If during
the term any alterations, additions or changes to the Common Area or to the
Project in which the Premises is located is required by law, regulation,
ordinance or order of any public or quasi-public authority, and it is
impractical in Landlord's judgment for the affected tenants to individually make
such alterations, additions or changes, Landlord shall make such alterations,
additions or changes and the cost thereof shall be a
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common area charge and Tenant shall pay its percentage share of such cost to
Landlord as provided in paragraph 16.
9. REPAIR AND MAINTENANCE
By entry hereunder, Tenant accepts the Premises as being in good and
sanitary order, condition and repair (excepting only the roof which Landlord
covenants to replace with a new roof as set forth on Exhibit C hereto and
"punchlist items"). Landlord represents that as of the commencement date, the
heating, ventilating and air conditioning system, plumbing and electrical
systems shall be in good working order and repair and Landlord hereby warrants
that the same will remain in good working order and repair for a period of one
hundred twenty (120) days following commencement of the term of this lease.
Except as expressly provided below, Tenant shall at its sole cost keep and
maintain the entire Premises and every part thereof including, without
limitation, the windows, window frames, plate glass, glazing, elevators within
the Premises, truck doors, doors and all door hardware, the interior walls and
partitions, lighting and the electrical, mechanical, and plumbing systems.
Tenant shall also repair and maintain the heating and air conditioning systems
(unless Landlord has elected to keep and maintain the heating and air
conditioning systems as provided below) which shall include, without limitation,
a periodic maintenance agreement with a reputable and licensed heating and air
conditioning service company. If Tenants use of the heating and air
conditioning systems is limited to normal business hours (8:00 a.m. to 6:00
p.m.), such agreement shall provide for service at least as often as every 60
days; if Tenant's use of the heating or air conditioning systems extends beyond
such normal business hours this service shall be as often as may be reasonably
required by Landlord and in any event such service shall meet all warranty
enforcement requirements of such equipment and comply with all manufacturer
recommended maintenance, provided Landlord has furnished Tenant with such
requirements and recommendations. Tenant shall notify Landlord of excess use of
the HVAC systems beyond normal business hours that might require extra service.
Landlord may elect, at its option, to keep and maintain the heating and air
conditioning systems of the Premises and in such event, Tenant shall pay to
Landlord upon demand the full cost of such maintenance.
Subject to the provisions of paragraph 17, Landlord shall keep and
maintain the roof, structural elements, and exterior walls of the buildings
constituting the Project and Common Area in good order and repair. Tenant
waives all rights under and benefits of California Civil Code Sections 1932(1),
1941, and 1942 and under any similar law, statute or ordinance now or hereafter
in effect. The cost of the repairs and maintenance which are the obligation of
Landlord hereunder, including without limitation, maintenance contracts and
supplies, materials, equipment and tools used in such repairs and maintenance
shall be a common area charge and Tenant shall pay its percentage share of such
costs to Landlord as provided in paragraph 16; provided, however, that if any
repairs or maintenance is required because of an act or omission of Tenant, or
its agents, employees or invitees, Tenant shall pay to Landlord upon demand the
full cost of such repairs or maintenance.
Notwithstanding the above, Tenant shall not be responsible for (i) any
maintenance or repair costs associated with the roof for a period of one (1)
year after completion of the roof work required by paragraph 8 of Exhibit C, or
(ii) any maintenance or repair costs
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associated with any structural elements (excluding the roof) or exterior walls
of the buildings constituting the Project.
10. LIENS
Tenant shall keep the Premises and the Project free from any liens
arising out of any work performed, materials furnished or obligations incurred
by Tenant, its agents, employees or contractors. Upon Tenant's receipt of a
preliminary twenty (20) day notice filed by a claimant pursuant to California
Civil Code Section 3097, Tenant shall immediately provide Landlord with a copy
of such notice. Should Tenant have notice of any lien recorded against the
Project, Tenant shall give immediate notice of such lien to Landlord. In the
event that Tenant shall not, within ten (10) days following the imposition of
such lien, cause the same to be released of record, Landlord shall have, in
addition to all other remedies provided herein and by law, the right, but no
obligation, to cause the same to be released by such means as it shall deem
proper, including payment of the claim giving rise to such lien. All sums paid
by Landlord for such purpose, and all expenses (including attorneys' fees)
incurred by it in connection therewith, shall be payable to Landlord by Tenant
on demand with interest at the rate of twelve percent (12%) per annum or the
maximum rate permitted by law, whichever is less. Landlord shall have the right
at all times to post and keep posted on the Premises any notices permitted or
required by law, or which Landlord shall deem proper for the protection of
Landlord, the Premises and the Project and any other party having an interest
therein, from mechanics' and materialmen's liens and like liens. Tenant shall
give Landlord at least fifteen (15) days prior notice of the date of
commencement of any construction on the Premises in order to permit the posting
of such notices. In the event Tenant is required to post an improvement bond
with a public agency in connection with any work performed by Tenant on or to
the Premises, Tenant shall include Landlord as an additional obligee.
11. INSURANCE
Tenant, at its sole cost and expense, shall keep in force during the
term (i) commercial general liability and property damage insurance with a
combined single limit of at least $2,000,000 per occurrence insuring against
personal or bodily injury to or death of persons occurring in, on or about the
Premises or Project and any and all liability of the insureds with respect to
the Premises or arising out of Tenant's maintenance, use or occupancy of the
Premises and all areas appurtenant thereto, (ii) direct physical loss-special
insurance covering the leasehold improvements in the Premises and all of
Tenant's equipment, trade fixtures, appliances, furniture, furnishings, and
personal property from time to time located in, on or about the Premises, with
coverage in the amount of the full replacement cost thereof, and (iii) Worker's
Compensation Insurance as required by law, together with employer's liability
coverage with a limit of not less than $1,000,000 for bodily injury for each
accident and for bodily injury by disease for each employee. Tenant's
commercial general liability and property damage insurance and Tenant's Workers
Compensation Insurance shall be endorsed to provide that said insurance shall
not be cancelled or reduced except upon at least thirty (30) days prior written
notice to Landlord. Further, Tenant's commercial general liability and property
damage insurance shall be primary and shall be endorsed to provide that Landlord
and McCandless Management Corporation, and their respective partners, officers,
directors and employees and such other persons or entities as directed from time
to time by Landlord shall be named as
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additional insureds for all liability using ISO Bureau Form CG20111185 (or a
successor form) or such other endorsement form reasonably acceptable to
Landlord; shall contain a severability of interest clause and a cross-liability
endorsement; shall be endorsed to provide that the limits and aggregates apply
per location using ISO Bureau Form CG25041185 (or a successor form) or such
other endorsement form reasonably acceptable to Landlord; and shall be issued by
an insurance company admitted to transact business in the State of California
and rated A+VIII or better in Best's Insurance Reports (or successor report).
The deductibles for all insurance required to be maintained by Tenant hereunder
shall be satisfactory to Landlord. The commercial general liability insurance
carried by Tenant shall specifically insure the performance by Tenant of the
indemnification provisions set forth in paragraph 18 of this lease provided,
however, nothing contained in this paragraph 11 shall be construed to limit the
liability of Tenant under the indemnification provisions set forth in said
paragraph 18. If Landlord or any of the additional insureds named on any of
Tenant's insurance, have other insurance which is applicable to the covered loss
on a contributing, excess or contingent basis, the amount of the Tenant's
insurance company's liability under the policy of insurance maintained by Tenant
shall not be reduced by the existence of such other insurance. Any insurance
carried by Landlord or any of the additional insureds named on Tenant's
insurance policies shall be excess and non-contributing with the insurance so
provided by Tenant.
Tenant shall, prior to the commencement of the term and at least
thirty (30) days prior to any renewal date of any insurance policy required to
be maintained by Tenant pursuant to this paragraph, provide Landlord with a
completed Certificate of Insurance, using a form acceptable in Landlord's
reasonable judgement, attaching thereto copies of all endorsements required to
be provided by Tenant under this lease. Tenant agrees to increase the coverage
or otherwise comply with changes in connection with said commercial general
liability, property damage, direct physical loss and Worker's Compensation
Insurance as Landlord's lender may from time to time reasonably require.
Landlord shall obtain and keep in force a policy or policies of
insurance covering loss or damage to the Premises and Project, in the amount of
the full replacement value thereof, providing protection against those perils
included within the classification of "all risk" insurance, with increased cost
of reconstruction and contingent liability (including demolition), plus a policy
of rental income insurance in the amount of one hundred percent (100%) of twelve
(12) months' rent (including sums paid as additional rent) and such other
insurance as Landlord or Landlord's lender may from time to time require.
Landlord may, but shall not be obligated to unless required by law, obtain flood
and/or earthquake insurance. Landlord shall have no liability to Tenant if
Landlord elects not to obtain flood and/or earthquake insurance unless such
insurance is required by law. The cost of all such insurance purchased by
Landlord, plus any charges for deferred payment of premiums and the amount of
any deductible incurred upon any covered loss within the Project, shall be
common area charges and Tenant shall pay to Landlord its percentage share of
such costs as provided in paragraph 16. If the cost of insurance is increased
due to Tenant's use of the Premises, then Tenant shall pay to Landlord upon
demand the full cost of such increase.
Landlord and Tenant hereby mutually waive any and all rights of
recovery against one another for real or personal property loss or damage
occurring to the Premises or the Project, or any part thereof, or to any
personal property therein, from perils insured against under fire and
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extended insurance and any other property insurance policies existing for the
benefit of the respective parties so long as such insurance permits waiver of
liability and contains a waiver of subrogation without additional premiums.
If Tenant does not take out and maintain insurance as required
pursuant to this paragraph 11, Landlord may, but shall not be obligated to,
after ten (10) days written notice to Tenant, or in the event that such
insurance has lapsed, expired or been cancelled, take out the necessary
insurance and pay the premium therefor, and Tenant shall repay to Landlord
promptly on demand, as additional rent, the amount so paid. In addition,
Landlord may recover from Tenant and Tenant agrees to pay, as additional rent,
any and all reasonable expenses (including attorney fees) and damages which
Landlord may sustain by reason of the failure of Tenant to obtain and maintain
such insurance, it being expressly declared that the expenses and damages of
Landlord shall not be limited to the amount of the premiums thereon.
12. UTILITIES AND SERVICE
Tenant shall pay for all water, gas, light, heat, power, electricity,
telephone, trash pickup, sewer charges and all other services supplied to or
consumed on the Premises. In the event that any service is not separately
metered or billed to the Premises, the cost of such utility service or other
service shall be a common area charge and Tenant shall pay its percentage share
of such cost to Landlord as provided in paragraph 16. In addition, the cost of
all utilities and services furnished by Landlord to the Common Area shall be a
common area charge and Tenant shall pay its percentage share of such cost to
Landlord as provided in paragraph 16.
If Tenant's use of any such utility or service is materially in excess
of the average furnished to the other tenants of the Project, and such utility
or service is not separately metered, then Tenant shall pay to Landlord upon
demand, as additional rent, the full cost of such excess use, or Landlord may
cause such utility or service to be separately metered, in which case Tenant
shall pay the full cost of such utility or service and reimburse Landlord upon
demand for the cost of installing the separate meter.
Landlord shall not be liable for, and Tenant shall not be entitled to
any abatement or reduction of rent by reason of, the failure of any person or
entity to furnish any of the foregoing services when such failure is caused by
accident, breakage, repairs, strikes, lockouts or other labor disturbances or
labor disputes of any character, governmental moratoriums, regulations or other
governmental actions, or by any other cause, similar or dissimilar, beyond the
reasonable control of Landlord. In addition, Tenant shall not be relieved from
the performance of any covenant or agreement in this lease because of any such
failure, and no eviction of Tenant shall result from such failure.
13. TAXES AND OTHER CHARGES
All real estate taxes and assessments and other taxes, fees and
charges of every kind or nature, foreseen or unforeseen, which are levied,
assessed or imposed upon Landlord and/or against the Premises, building, Common
Area or Project, or any part thereof by any federal, state, county, regional,
municipal or other governmental or quasi-public authority, together with any
increases therein for any reason, shall be a common area charge and Tenant
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shall pay its percentage share of such costs to Landlord as provided in
paragraph 16. By way of illustration and not limitation, "other taxes, fees and
charges" as used herein include any and all taxes payable by Landlord (other
than state and federal personal or corporate income taxes measured by the net
income of Landlord from all sources, and premium taxes), whether or not now
customary or within the contemplation of the parties hereto, (i) upon, allocable
to, or measured by the rent payable hereunder, including, without limitation,
any gross income or excise tax levied by the local, state or federal government
with respect to the receipt of such rent, (ii) upon or with respect to the
possession, leasing, operation, management, maintenance, alteration, repair, use
or occupancy by Tenant of the Premises or any part thereof, (iii) upon or
measured by the value of Tenant's personal property or leasehold improvements
located in the Premises, (iv) upon this transaction or any document to which
Tenant is a party creating or transferring an interest or estate in the
Premises, (v) upon or with respect to vehicles, parking or the number of persons
employed in or about the Project, and (vi) any tax, license, franchise fee or
other imposition upon Landlord which is otherwise measured by or based in whole
or in part upon the Project or any portion thereof. If Landlord contests any
such tax, fee or charge, the cost and expense incurred by Landlord thereby
(including, but not limited to, costs of attorneys and experts) shall also be
common area charges and Tenant shall pay its percentage share of such costs to
Landlord as provided in paragraph 16. In the event the Premises and any
improvements installed therein by Tenant or Landlord are valued by the assessor
disproportionately higher than those of other tenants in the building or Project
or in the event alterations or improvements are made to the Premises, Tenant's
percentage share of such taxes, assessments, fees and/or charges shall be
readjusted upward accordingly and Tenant agrees to pay such readjusted share.
Such determination shall be made by Landlord from the respective valuations
assigned in the assessor's work sheet or such other information as may be
reasonably available and Landlord's determination thereof shall be conclusive.
Tenant agrees to pay, before delinquency, any and all taxes levied or
assessed during the term hereof upon Tenant's equipment, furniture, fixtures and
other personal property located in the Premises, including carpeting and other
property installed by Tenant notwithstanding that such carpeting or other
property has become a part of the Premises. If any of Tenant's personal
property shall be assessed with the Project, Tenant shall pay to Landlord, as
additional rent, the amount attributable to Tenant's personal property within
ten (10) days after receipt of a written statement from Landlord setting forth
the amount of such taxes, assessments and public charges attributable to
Tenant's personal property.
14. ENTRY BY LANDLORD
Landlord reserves, and shall at all reasonable times have, the right
to enter the Premises (i) to inspect the Premises, (ii) to supply services to be
provided by Landlord hereunder, (iii) to show the Premises to prospective
purchasers, lenders or tenants and to put 'for sale' or 'for lease' signs
thereon, (iv) to post notices required or allowed by this lease or by law, (v)
to alter, improve or repair the Premises and any portion of the Project, and
(vi) to erect scaffolding and other necessary structures in or through the
Premises or the Project where reasonably required by the character of the work
to be performed. Absent Landlord's gross negligence or willful misconduct,
Landlord shall not be liable in any manner for any inconvenience, disturbance,
loss of business, nuisance or other damage arising from Landlord's entry and
acts pursuant to this paragraph and Tenant shall not be entitled to an abatement
or
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reduction of rent if Landlord exercises any rights reserved in this paragraph.
For each of the foregoing purposes, Landlord shall at all times have and retain
a key with which to unlock all of the doors in, on and about the Premises
(excluding Tenant's vaults, safes and similar areas designated in writing by
Tenant in advance), and Landlord shall have the right to use any and all means
which Landlord may deem proper to open said doors in an emergency in order to
obtain entry to the Premises. Any entry by Landlord to the Premises pursuant to
this paragraph shall not under any circumstances be construed or deemed to be a
forcible or unlawful entry into or a detainer of the Premises or an eviction,
actual or constructive, of Tenant from the Premises or any portion thereof.
Notwithstanding the foregoing, and except in the case of emergency
(such as fire or other similarly dangerous condition), Landlord shall give
Tenant at least twenty-four (24) hours prior notice of its intent to enter the
Premises, and such entry shall be subject to the reasonable security
requirements of Tenant (including that, Landlord must at all times be
accompanied by a Designated Representative (hereafter defined) of Tenant and, if
reasonably possible, during business hours. A Designated Representative shall
be a person on a list provided by Tenant to Landlord, and signed by the CEO of
Tenant. Said list shall be delivered to Landlord by the date Tenant takes
possession of the premises. This list may be modified from time to time in
writing by the CEO of the Tenant and such list shall provide no fewer than three
(3) names of Designated Representatives.
15. COMMON AREA; PARKING
Subject to the terms and conditions of this lease and such rules and
regulations as Landlord may from time to time prescribe, Tenant and Tenant's
employees and invitees shall, in common with other occupants of the Project, and
their respective employees and invitees and others entitled to the use thereof,
have the nonexclusive right to use the access roads, parking areas and
facilities within the Project provided and designated by Landlord for the
general use and convenience of the occupants of the Project which areas and
facilities shall include, but not be limited to, sidewalks, parking, refuse,
landscape and plaza areas, roofs and building exteriors, which areas and
facilities are referred to herein as "Common Area". This right shall terminate
upon the termination of this lease.
Landlord reserves the right from time to time to make changes in the
shape, size, location, amount and extent of the Common Area. Landlord shall
also have the right at any time to change the name, number or designation by
which the Project is commonly known. Landlord further reserves the right to
promulgate such rules and regulations relating to the use of the Common Area,
and any part thereof, as Landlord may deem appropriate for the best interests of
the occupants of the Project. The rules and regulations shall be binding upon
Tenant upon delivery of a copy of them to Tenant and Tenant shall abide by them
and cooperate in their observance. Such rules and regulations may be amended by
Landlord from time to time, with or without advance notice.
Tenant shall have the nonexclusive use of thirty-six (36) parking
spaces in the Common Area as designated from time to time by Landlord, six (6)
of which shall be labeled "Visitor," in a location mutually acceptable to both
Landlord and Tenant. Landlord reserves the right at its sole option to assign
and label parking spaces, but it is specifically agreed that
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Landlord is not responsible for policing any such parking spaces. Tenant shall
not at any time park or permit the parking of Tenant's trucks or other vehicles,
or the trucks or other vehicles of others, adjacent to loading areas so as to
interfere in any way with the use of such areas; nor shall Tenant at any time
park or permit the parking of Tenant's vehicles or trucks, or the vehicles or
trucks of Tenant's suppliers or others, in any portion of the Common Area not
designated by Landlord for such use by Tenant. Tenant shall not park or permit
any inoperative vehicle or equipment to be parked on any portion of the Common
Area.
Landlord shall operate, manage and maintain the Common Area. The
manner in which the Common Area shall be operated, managed and maintained and
the expenditures for such operation, management and maintenance shall be at the
sole discretion of Landlord. The cost of such maintenance, operation and
management of the Common Area, including but not limited to landscaping, repair
of paving, parking lots and sidewalks, security and exterminator services and
salaries and employee benefits (including union benefits) of on-site and
accounting personnel engaged in such maintenance and operations management,
shall be a common area charge and Tenant shall pay to Landlord its percentage
share of such costs as provided in paragraph 16.
16. COMMON AREA CHARGES
Tenant shall pay to Landlord, as additional rent, an amount equal to
31.19% of the total common area charges as defined below. Tenant's percentage
share of common area charges shall be paid as follows:
Tenant's estimated monthly payment of common area charges payable by
Tenant during the calendar year in which the term commences is set forth in
paragraph 4(b) of this lease. Prior to the commencement of each succeeding
calendar year of the term (or as soon as practicable thereafter), Landlord shall
deliver to Tenant a written estimate of Tenant's monthly payment of common area
charges. Tenant shall pay, as additional rent, on the first day of each month
during the term in accordance with paragraph 4(b) of the lease, its monthly
share of common area charges as estimated by Landlord. Within one hundred
twenty (120) days of the end of each calendar year and of the termination of
this lease (or as soon as practicable thereafter), Landlord shall deliver to
Tenant a statement of actual common area charges incurred for the preceding
year. If such statement shows that Tenant has paid less than its actual
percentage then Tenant shall on demand pay to Landlord the amount of such
deficiency. If Tenant fails to pay such deficiency due within ten (10) days
after demand, Tenant shall pay an additional five percent (5%) of the amount due
as a penalty. If such statement shows that Tenant has paid more than its actual
percentage share then Landlord shall, at its option, promptly refund such excess
to Tenant or credit the amount thereof to the rent next becoming due from
Tenant. Landlord reserves the right to revise any estimate of common area
charges if actual or projected common area charges show an increase or decrease
in excess of 10% from any earlier estimate for the same period. In such event,
Landlord shall deliver the revised estimate to Tenant, together with an
explanation of the reasons therefor, and Tenant shall revise its payments
accordingly. Landlord's and Tenant's obligation with respect to adjustments at
the end of the term or earlier expiration of this lease shall survive such
termination or expiration.
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As used in this lease, "common area charges" shall include, but not be
limited to, (i) all items identified in paragraphs 8, 9, 11, 12, 13 and 15 as
being common area charges; (ii) amortization of such capital improvements having
a useful life greater than one year as Landlord may have installed for the
purpose of reducing operating costs and/or except as set forth herein, to comply
with all laws, rules and regulations of federal, state, county, municipal and
other governmental authorities now or hereinafter in effect (Tenant's share of
any such capital improvement shall equal Tenant's proportionate share of the
fraction of the cost of such capital improvement equal to the remaining term of
the lease over the useful life of such capital improvement); (iii) salaries and
employee benefits (including union benefits) of personnel engaged in the
operation and maintenance of the Project (or the building in which the Premises
are located) and payroll taxes applicable thereto; (iv) supplies, materials,
equipment and tools used or required in connection with the operation and
maintenance of the Project; (v) licenses, permits and inspection fees; (vi) a
reasonable reserve for repairs and replacement of equipment used in the
maintenance and operation of the Project; (vii) all other operating costs
incurred by Landlord in maintaining and operating the Project; and (viii) an
amount equal to five percent (5%) of the actual expenditures for the aggregate
of all other common area charges as compensation for Landlord's accounting and
processing services (so long as the salaries of the persons performing such
services are not included as a specific common area charge).
Notwithstanding the above, Tenant's proportionate share of common area
charges shall not exceed the following:
1994 $ .059 per square foot per month
1995 $ .061 per square foot per month
1996 $ .063 per square foot per month
1997 $ .066 per square foot per month
Tenant's proportionate share of real estate taxes shall not exceed the
following:
1994 $ .062 per square foot per month
1995 $ .063 per square foot per month
1996 $ .065 per square foot per month
1997 $ .066 per square foot per month
17. DAMAGE BY FIRE; CASUALTY
In the event the Premises are damaged by any casualty which is covered
under an insurance policy required to be maintained by Landlord pursuant to
paragraph 11, Landlord shall be entitled to the use of all insurance proceeds
and shall repair such damage as soon as reasonably possible and this lease shall
continue in full force and effect.
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In the event the Premises are damaged by any casualty not covered
under an insurance policy required to be maintained pursuant to paragraph 11,
Landlord may, at Landlord's option, either (i) repair such damage, at Landlord's
expense, as soon as reasonably possible, in which event this lease shall
continue in full force and effect, or (ii) give written notice to Tenant within
thirty (30) days after the date of the occurrence of such damages of Landlord's
intention to cancel and terminate this lease as of the date of the occurrence of
the damages; provided, however, that if such damage is caused by an act or
omission of Tenant or its agent, servants or employees, then Tenant shall repair
such damage promptly at its sole cost and expense. In the event Landlord elects
to terminate this lease pursuant hereto, Tenant shall have the right within ten
(10) days after receipt of the required notice to notify Landlord in writing of
Tenant's intention to repair such damage at Tenant's expense, without
reimbursement from Landlord, in which event this lease shall continue in full
force and effect and Tenant shall proceed to make such repairs as soon as
reasonably possible. If Tenant does not give such notice within the ten (10)
day period, this lease shall be cancelled and terminated as of the date of the
occurrence of such damage. Under no circumstances shall Landlord be required to
repair any injury or damage to (by fire or other cause), or to make any
restoration or replacement of, any of Tenant's personal property, trade fixtures
or property leased from third parties, whether or not the same is attached to
the Premises.
If the Premises are totally destroyed during the term from any cause
(including any destruction required by any authorized public authority), whether
or not covered by the insurance required under paragraph 11, this lease shall
automatically terminate as of the date of such destruction, unless the parties
agree otherwise.
If the Premises are partially or totally destroyed or damaged and
Landlord or Tenant repair them pursuant to this lease, the rent payable
hereunder for the period during which such damage and repair continues shall be
abated only in proportion to the square footage of the Premises rendered
untenantable to Tenant by such damage or destruction. Tenant shall have no
claim against Landlord for any damage, loss or expense suffered by reason of any
such damage, destruction, repair or restoration. The parties waive the
provisions of California Civil Code sections 1932(2) and 1933(4) (which
provisions permit the termination of a lease upon destruction of the leased
premises), and hereby agree that the provisions of this paragraph 17 shall
govern in the event of such destruction.
18. INDEMNIFICATION
Landlord shall not be liable to Tenant and Tenant hereby waives all
claims against Landlord for any injury to or death of any person or damage to or
destruction of property in or about the Premises or the Project by or from any
cause whatsoever except the failure of Landlord to perform its obligations under
this lease where such failure has persisted for an unreasonable period of time
after notice of such failure and except Landlord's gross negligence or willful
misconduct. Without limiting the foregoing, Landlord shall not be liable to
Tenant for any injury to or death of any person or damages to or destruction of
property by reason of, or arising from, any latent defect in the Premises or
Project or the act or negligence of any other tenant of the Project. Tenant
shall immediately notify Landlord of any defect in the Premises or Project.
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Except as to injury to persons or damage to property the principal
cause of which is the failure by Landlord to observe any of the terms and
conditions of this lease or Landlord's gross negligence or willful misconduct,
Tenant shall hold Landlord harmless from and defend Landlord against any claim,
liability, loss, damage or reasonable expense (including attorney fees) arising
out of any injury to or death of any person or damage to or destruction of
property occurring in, on or about the Premises from any cause whatsoever or on
account of the use, condition, occupational safety or occupancy of the Premises.
Tenant shall further hold Landlord harmless from and defend Landlord against any
claim, liability, loss, damage or expense (including attorney fees) arising (i)
from Tenant's use of the Premises or from the conduct of its business or from
any activity or work done, permitted or suffered by Tenant or its agents or
employees in or about the Premises or Project, (ii) out of the failure of Tenant
to observe or comply with Tenant's obligation to observe and comply with laws or
other requirements as set forth in paragraph 7, (iii) by reason of Tenant's use,
handling, storage, or disposal of toxic or hazardous materials or waste, (iv) by
reason of any labor or service performed for, or materials used by or furnished
to, Tenant or any contractor engaged by Tenant with respect to the Premises, or
(v) from any other act, neglect, fault or omission of Tenant or its agents or
employees.
The provisions of this paragraph 18 shall survive the expiration or
earlier termination of this lease.
19. ASSIGNMENT AND SUBLETTING
Tenant shall not voluntarily assign, encumber or otherwise transfer
its interest in this lease or in the Premises, or sublease all or any part of
the Premises, or allow any other person or entity to occupy or use all or any
part of the Premises, without first obtaining Landlord's written consent, which
shall not be unreasonably withheld, and otherwise complying with the
requirements of this paragraph 19. Any assignment, encumbrance or sublease
without Landlord's consent, shall constitute a default.
If Tenant desires to sublet or assign all or any portion of the
Premises, Tenant shall give Landlord written notice thereof, specifying the
projected commencement date of the proposed sublet or assignment (which date
shall be not less than fifteen (15) days or more than one hundred twenty (120)
days after the date of Landlord's receipt of such notice), the portions of the
Premises proposed to be sublet or assigned, the terms and conditions of the
proposed assignment or sublease (including the rent to be paid by the proposed
assignee or subtenant) and the name, address and telephone number of the
proposed assignee or subtenant. Tenant shall further provide Landlord with such
other information concerning the proposed assignee or subtenant as requested by
Landlord.
If Landlord consents in writing to the proposed assignment or sublet,
Tenant shall be free to assign or sublet all or a portion of the Premises
subject to the following conditions: (i) any sublease shall be on the same terms
set forth in the notice given to Landlord; (ii) no sublease shall be valid and
no subtenant shall take possession of the sublet premises until an executed
counterpart of such sublease has been delivered to Landlord; (iii) no subtenant
shall have a further right to sublet; (iv) fifty percent (50%) of any sums or
other economic consideration received by Tenant as a result of such assignment
or sublet (except rental or other
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payments received which are attributable to the amortization over the term of
this lease of the cost of leasehold improvements constructed for such assignees
or subtenant), whether denominated rentals or otherwise, less brokerage fees,
which exceed, in the aggregate, the total sums which Tenant is obligated to pay
Landlord under this lease (prorated to reflect obligations allocable to that
portion of the Premises subject to such sublease), shall be payable to Landlord
as additional rent under this lease without affecting or reducing any other
obligation of Tenant hereunder; (v) no sublet or assignment shall release Tenant
of Tenant's obligation or alter the primary liability of Tenant to pay the rent
and to perform all other obligations to be performed by Tenant hereunder; and
(vi) any assignee or subtenant must expressly agree to assume and perform all of
the covenants and conditions of Tenant under this lease. Tenant shall pay to
Landlord promptly upon demand as additional rent, Landlord's actual attorneys'
fees and other reasonable costs incurred for reviewing, processing or
documenting any requested assignment or sublease, whether or not Landlord's
consent is granted. Tenant shall not be entitled to assign this lease or
sublease all or any part of the Premises (and any attempt to do so shall be
voidable by Landlord) during any period in which Tenant is in default under this
lease.
If Tenant is a partnership, a withdrawal or change, voluntary or
involuntary or by operation of law, of any general partner or the dissolution of
the partnership shall be deemed an assignment of this lease subject to all the
conditions of this paragraph 19. If Tenant is a corporation any dissolution,
merger, consolidation or other reorganization of Tenant or the sale or other
transfer of a controlling percentage of the capital stock of Tenant or the sale
of more than fifty percent (50%) of the value of Tenant's assets shall be an
assignment of this lease subject to all the conditions of this paragraph 19.
The term "controlling percentage" means the ownership of, and the right to vote,
stock possessing more than 50% of the total combined voting power of all classes
of Tenant's capital stock issued, outstanding and entitled to vote. This
paragraph shall not apply if Tenant is a corporation the stock of which is
traded through an exchange.
The acceptance of rent by Landlord from any other person shall not be
deemed to be a waiver by Landlord of any provision hereof. Consent to one
assignment or sublet shall not be deemed consent to any subsequent assignment or
sublet. In the event of default by any assignee of Tenant or any successor of
Tenant in the performance of any of the terms hereof, Landlord may proceed
directly against Tenant without the necessity of exhausting remedies against
such assignee or successor. Landlord may consent to subsequent assignments or
sublets of this lease or amendments or modifications to this lease with
assignees of Tenant, with notice to Tenant, or any successor of Tenant, and
obtaining Tenant's consent thereto and such action shall not relieve Tenant of
liability under this lease.
No interest of Tenant in this lease shall be assignable by operation
of law (including, without limitation, the transfer of this lease by testacy or
intestacy). Each of the following acts shall be considered an involuntary
assignment: (i) if Tenant is or becomes bankrupt or insolvent, makes an
assignment for the benefit of creditors or institutes a proceeding under the
Bankruptcy Act in which Tenant is the bankrupt; or, if Tenant is a partnership
or consists of more than one person or entity, if any partner of the partnership
or other person or entity is or becomes bankrupt or insolvent, or makes an
assignment for the benefit of creditors; (ii) if a writ of attachment or
execution is levied on this lease; or (iii) if, in any proceeding or action to
which Tenant is a party, a receiver is appointed with authority to take
possession of the
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Premises. An involuntary assignment shall constitute a default by Tenant and
Landlord shall have the right to elect to terminate this lease, in which case
this lease shall not be treated as an asset of Tenant.
Tenant immediately and irrevocably assigns to Landlord, as security
for Tenant's obligations under this lease, all rent from any subletting of all
or a part of the Premises as permitted by this lease, and Landlord, as assignee
and as attorney-in-fact for Tenant, or a receiver of Tenant appointed on
Landlord's application, may collect such rent and apply it toward Tenant's
obligations under this lease; except that, until the occurrence of an act or
default by Tenant, Tenant shall have the right to collect such rent, subject to
promptly forwarding to Landlord any portion thereof to which Landlord is
entitled pursuant to this paragraph 19.
Notwithstanding the above requirement that Tenant obtain the consent
of Landlord prior to any assignment or sublet, Tenant may, without obtaining the
prior consent of Landlord, assign or sublease the whole or any part of the
Premises, or sell or transfer a controlling percentage of the capital stock of
Tenant or sell more than fifty percent (50%) of the value of Tenant's assets, to
any corporation or other entity which is wholly owned by Tenant or of which
Tenant is a wholly owned subsidiary, or which is wholly-owned by either of the
foregoing, provided that (i) Tenant shall give written notice thereof to
Landlord in the manner required for other assignments or subleases by this
paragraph 19; (ii) Tenant shall continue to be fully obligated under this lease;
(iii) any such assignee or sublessee shall expressly assume and agree to perform
all the terms and conditions of this lease to be performed by Tenant; and (iv)
any such assignment or sublet shall be subject to all other terms and conditions
of this paragraph 19 pertaining to assignments and/or sublets (excepting only
the requirement concerning prior written consent of Landlord).
20. DEFAULT
The occurrence of any of the following shall constitute a default by
Tenant: (i) failure of Tenant to pay any rent or other sum payable hereunder
within five (5) days of when due (provided, however, once per lease year, Tenant
shall be entitled to written notice from Landlord of Tenant's failure to make
the foregoing payments and Tenant shall not be in default until five (5) days
after the date that Landlord gives Tenant such notice); (ii) abandonment of the
Premises (Tenant's failure to occupy and conduct business in the Premises for
fourteen (14) consecutive days shall be deemed an abandonment) and Tenant has
defaulted under (i) above; or (iii) failure of Tenant to perform any other term,
covenant or condition of this lease if the failure to perform is not cured
within thirty (30) days after notice thereof has been given to Tenant (provided
that if such default cannot reasonably be cured within thirty (30) days, Tenant
shall not be in default if Tenant commences to cure such failure to perform
within the thirty (30) day period and diligently and in good faith continues to
cure the failure to perform). Notwithstanding the above, prior to Landlord
instituting an unlawful detainer action, Landlord shall give Tenant the
requisite three days' notice, in writing, as required by California Code of
Civil Procedures Section 1161. The notice referred to in clause (iii) above
shall specify the failure to perform and the applicable lease provision and
shall demand that Tenant perform the provisions of this lease within the
applicable period of time. No notice shall be deemed a forfeiture or
termination of this lease unless Landlord so elects in the notice. No notice
shall be required in the event of abandonment or vacation of the Premises.
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In addition to the above, the occurrence of any of the following
events shall also constitute a default by Tenant: (i) Tenant fails generally to
pay its debts as they become due or admits in writing its inability to pay its
debts, or makes a general assignment for the benefit of creditors (for purposes
of determining whether Tenant is not paying its debts as they become due, a debt
shall be deemed overdue upon the earliest to occur of the following: ninety (90)
days from the date a statement therefor has been rendered; the date on which any
action or proceeding therefor is commenced; or the date on which a formal notice
of default or demand has been sent); (ii) Tenant fails to furnish to Landlord a
schedule of Tenant's aged accounts payable within thirty (30) days after
Landlord's written request; (iii) any financial statements given to Landlord by
Tenant, any assignee of Tenant, subtenant of Tenant, any guarantor of Tenant, or
successor in interest of Tenant (including, without limitation, any schedule of
Tenant's aged accounts payable) are materially false; or (iv) any financial
statement or other financial information furnished by Tenant pursuant to the
provisions of this lease or at the request of Landlord evidences that either
Tenant's net worth or its net assets are at least twenty-five percent (25%) less
than the net worth or net assets shown in either the immediately prior financial
statement or the financial statement of Tenant furnished at the time of
execution of this lease, and Tenant fails to furnish promptly to Landlord, after
notice from Landlord to Tenant, an additional security deposit in cash
equivalent to the aggregate of the basic rent and common area charges (without
regard to any rent abatement) payable hereunder for the twelve (12) full
calendar months immediately preceding such notice. At any time during the term
of this lease, but no more than once per calendar year, Landlord, at Landlord's
option, shall have the right to receive from Tenant, upon Landlord's request, a
current annual balance sheet for Landlord's review. If the balance sheet shows
a negative net worth, Landlord may terminate this lease by giving Tenant sixty
(60) days prior written notice.
In the event of a default by Tenant, then Landlord, in addition to any
other rights and remedies of Landlord at law or in equity, shall have the right
either to terminate Tenant's right to possession of the Premises (and thereby
terminate this lease) or, from time to time and without termination of this
lease, to relet the Premises or any part thereof for the account and in the name
of Tenant for such term and on such terms and conditions as Landlord in its sole
discretion may deem advisable, with the right to make alterations and repairs to
the Premises.
Should Landlord elect to keep this lease in full force and effect,
Landlord shall have the right to enforce all of Landlord's rights and remedies
under this lease, including but not limited to the right to recover and to relet
the Premises and such other rights and remedies as Landlord may have under
California Civil Code Section 1951.4 (or successor Code section) or any other
California statute. If Landlord relets the Premises, then Tenant shall pay to
Landlord, as soon as ascertained, the costs and expenses incurred by Landlord in
such reletting and in making alterations and repairs. Rentals received by
Landlord from such reletting shall be applied (i) to the payment of any
indebtedness due hereunder, other than basic rent and common area charges, from
Tenant to Landlord; (ii) to the payment of the cost of any repairs necessary to
return the Premises to good condition normal wear and tear excepted, including
the cost of alterations and the cost of storing any of Tenant's property left on
the Premises at the time of reletting; and (iii) to the payment of basic rent or
common area charges due and unpaid hereunder. The residue, if any, shall be
held by Landlord and applied in payment of future rent or damages in the event
of termination as the same may become due and payable hereunder and the balance,
if any at the end of the term of this lease, shall be paid to Tenant. Should
the basic
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rent and common area charges received from time to time from such reletting
during any month be less than that agreed to be paid during that month by Tenant
hereunder, Tenant shall pay such deficiency to Landlord. Such deficiency shall
be calculated and paid monthly. No such reletting of the Premises by Landlord
shall be construed as an election on its part to terminate this lease unless a
notice of such intention is given to Tenant or unless the termination hereof is
decreed by a court of competent jurisdiction. Notwithstanding any such reletting
without termination, Landlord may at any time thereafter elect to terminate this
lease for such previous breach, provided it has not been cured.
Should Landlord at any time terminate this lease for any breach, in
addition to any other remedy it may have, it shall have the immediate right of
entry and may remove all persons and property from the Premises and shall have
all the rights and remedies of a landlord provided by California Civil Code
Section 1951.2 or any successor code section. Upon such termination, in
addition to all its other rights and remedies, Landlord shall be entitled to
recover from Tenant all damages it may incur by reason of such breach, including
the cost of recovering the Premises and including (i) the worth at the time of
award of the unpaid rent which had been earned at the time of termination; (ii)
the worth at the time of award of the amount by which the unpaid rent which
would have been earned after termination until the time of award exceeds the
amount of such rental loss that Tenant proves could have been reasonably
avoided; (iii) the worth at the time of 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 that Tenant proves could be reasonably avoided; and
(iv) any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant's failure to perform its obligations under this
lease or which in the ordinary course of events would be likely to result
therefrom. The "worth at the time of award" of the amounts referred to in (i)
and (ii) above is computed by allowing interest at the rate of twelve percent
(12%) per annum. The "worth at the time of award" of the amount referred to in
(iii) above 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%). Tenant waives the provisions of Section 1179 of the California Code of
Civil Procedure (which Section allows Tenant to petition of court of competent
jurisdiction for relief against forfeiture of this lease). Property removed
from the Premises may be stored in a public or private warehouse or elsewhere at
the sole cost and expense of Tenant. In the event that Tenant shall not
immediately pay the cost of storage of such property after the same has been
stored for a period of thirty (30) days or more, Landlord may sell any or all
thereof at a public or private sale in such manner and at such times and places
that Landlord, in its sole discretion, may deem proper, after notice to Tenant.
21. LANDLORD'S RIGHT TO CURE TENANT'S DEFAULT
Landlord, at any time after Tenant commits a default, may, but shall
not be obligated to, cure the default at Tenant's cost. If Landlord at any
time, by reason of Tenant's default, pays any sum or does any act that requires
the payment of any sum, the sum paid by Landlord shall be due immediately from
Tenant to Landlord and shall bear interest at the rate of twelve percent (12%)
per annum or the maximum rate permitted by law, whichever is less, from the date
the sum is paid by Landlord until Landlord is reimbursed by Tenant. Amounts due
Landlord hereunder shall be additional rent.
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22. EMINENT DOMAIN
If all or any part of the Premises shall be taken by any public or
quasi-public authority under the power of eminent domain or conveyance in lieu
thereof, this lease shall terminate as to any portion of the Premises so taken
or conveyed, and any portion rendered untenantable as a result of such taking or
conveyance on the date when title vests in the condemnor, and Landlord shall be
entitled to any and all payments, income, rent, award or any interest therein
whatsoever which may be paid or made in connection with such taking or
conveyance. Tenant shall have no claim against Landlord or otherwise for the
value of any unexpired term of this lease. Notwithstanding the foregoing,
Tenant shall be entitled to any compensation for depreciation to and cost of
removal of Tenant's compensation for its relocation expenses necessitated by
such taking, but in each case only to the extent the condemning authority makes
a separate award therefor or specifically identifies a portion of the award as
being therefor. Each party waives the provisions of Section 1265.130 of the
California Code of Civil Procedure (which section allows either party to
petition the Superior Court to terminate this lease in the event of a partial
taking of the Premises).
If any action or proceeding is commenced for such taking of the
Premises or any portion thereof or of any other space in the Project, or if
Landlord is advised in writing by any entity or body having the right or power
of condemnation of its intention to condemn the Premises or any portion thereof
or of any other space in the Project, and Landlord shall decide to discontinue
the use and operation of the Project or decide to demolish, alter or rebuild the
Project, then Landlord shall have the right to terminate this lease by giving
Tenant written notice thereof within sixty (60) days of the earlier of the date
of Landlord's receipt of such notice of intention to condemn or the commencement
of said action or proceeding. Such termination shall be effective as of the
last day of the calendar month next following the month in which such notice is
given or the date on which title shall vest in the condemnor, whichever occurs
first.
In the event of a partial taking, or conveyance in lieu thereof, of
the Premises and fifty percent (50%) or more of the number of square feet in the
Premises are taken, or rendered untenantable, then Tenant may terminate this
lease. Any election by Tenant to so terminate shall be by written notice given
to Landlord within sixty (60) days from the date of such taking or conveyance
and shall be effective on the last day of the calendar month next following the
month in which such notice is given or the date on which title shall vest in the
condemnor, whichever occurs first.
If a portion of the Premises is taken by power of eminent domain or
conveyance in lieu thereof and neither Landlord nor Tenant terminates this lease
as provided above, then this lease shall continue in full force and effect as to
the part of the Premises not so taken or conveyed and all payments of rent shall
be apportioned as of the date of such taking or conveyance so that thereafter
the amounts to be paid by Tenant shall be in the ratio that the area of the
portion of the Premises not so taken bears to the total area of the Premises
prior to such taking.
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23. NOTICE AND COVENANT TO SURRENDER
On the last day of the term or on the effective date of any earlier
termination, Tenant shall surrender to Landlord the Premises in its condition
existing as of the commencement of the term and, except as otherwise provided by
Landlord pursuant to the terms of paragraph 8 of this lease, all of the
improvements and alterations made to the Premises in their condition existing as
of the date of completion of construction and/or installation (normal wear and
tear excepted). On or prior to the last day of the term or the effective date
of any earlier termination, Tenant shall remove all of Tenant's personal
property and trade fixtures, together with improvements or alterations that
Tenant is obligated to remove pursuant to the provisions of paragraph 8 of this
lease, from the Premises, and all such property not removed shall be deemed
abandoned. In addition, on or prior to the expiration or earlier termination of
this lease, Tenant shall remove, at Tenant's sole cost and expense, all
telephone, other communication, computer and any other cabling and wiring of any
sort installed in the space above the suspended ceiling of Premises or anywhere
else in the Premises and shall promptly repair any damage to the suspended
ceiling, lights, light fixtures, walls and any other part of the Premises
resulting from such removal.
If the Premises are not surrendered as required in this paragraph,
Tenant shall indemnify Landlord against all loss, liability and reasonable
expense (including but not limited to, attorney fees) resulting from the failure
by Tenant in so surrendering the Premises, including, without limitation, any
claims made by any succeeding tenants. It is agreed between Landlord and Tenant
that the provisions of this paragraph shall survive termination of this lease.
24. TENANT'S QUITCLAIM
At the expiration or earlier termination of this lease, Tenant shall
execute, acknowledge and deliver to Landlord, within ten (10) days after written
demand from Landlord to Tenant, any quitclaim deed or other document required to
remove the cloud or encumbrance created by this lease from the real property of
which the Premises are a part. This obligation shall survive said expiration or
termination.
25. HOLDING OVER
Any holding over after the expiration or termination of this lease
with the written consent of Landlord shall be construed to be a tenancy from
month to month at the monthly rent in effect on the date of such expiration or
termination. All provisions of this lease, except those pertaining to the term
and any option to extend, shall apply to the month to month tenancy. The
provisions of this paragraph are in addition to, and do not affect, Landlord's
right of reentry or other rights hereunder or provided by law.
If Tenant shall retain possession of the Premises or any part thereof
without Landlord's consent following the expiration or sooner termination of
this lease for any reason, then Tenant shall pay to Landlord for each day of
such retention one hundred fifty percent (150%) of the amount of the daily
rental in effect during the last month prior to the date of such expiration or
termination. Tenant shall also indemnify and hold Landlord harmless from any
loss, liability and reasonable expense (including, but not limited to, attorneys
fees) resulting from
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delay by Tenant in surrendering the Premises, including without limitation any
claims made by any succeeding tenant founded on such delay. Acceptance of rent
by Landlord following expiration or termination shall not constitute a renewal
of this lease, and nothing contained in this paragraph shall waive Landlord's
right of re-entry or any other right. Tenant shall be only a Tenant at
sufferance, whether or not Landlord accepts any rent from Tenant, while Tenant
is holding over without Landlord's written consent.
26. SUBORDINATION
In the event Landlord's title or leasehold interest is now or
hereafter encumbered in order to secure a loan to Landlord, Tenant shall, at the
request of Landlord or the lender, execute in writing an agreement subordinating
its rights under this lease to the lien of such encumbrance, or, if so
requested, agreeing that the lien of lender's encumbrance shall be or remain
subject and subordinate to the rights of Tenant under this lease.
Notwithstanding any such subordination, Tenant's possession under this lease
shall not be disturbed if Tenant is not in default and so long as Tenant shall
pay all amounts due hereunder and otherwise observe and perform all provisions
of this lease. In addition, if in connection with any such loan the lender
shall request reasonable modifications of this lease as a condition to such
financing, Tenant will not unreasonably withhold, delay or defer its consent
thereof, provided that such modifications do not increase the obligations of
Tenant hereunder or materially adversely affect the leasehold interest hereby
created or Tenant's rights hereunder.
27. CERTIFICATE OF ESTOPPEL
Each party shall, within five (5) calendar days after request
therefor, execute and deliver to the other party, in recordable form, a
certificate stating that the lease is unmodified and in full force and effect,
or in full force and effect as modified and stating the modifications. The
certificate shall also state the amount of the monthly rent, the date to which
monthly rent has been paid in advance, the amount of the security deposit and/or
prepaid monthly rent, and shall include such other items as Landlord or
Landlord's lender or Tenant or Tenant's lender, as the case may be, may
reasonably request. Failure to deliver such certificate within such time shall
constitute a conclusive acknowledgment by the party failing to deliver the
certificate that the lease is in full force and effect and has not been modified
except as may be represented by the party requesting the certificate. Any such
certificate requested by Landlord may be conclusively relied upon by any
prospective purchaser or encumbrancer of the Premises or Project. Further,
within five (5) calendar days following written request made by Landlord in
connection with any request by any lender, prospective lender or prospective
purchaser or encumbrancer of the Premises or the Project, Tenant shall furnish
to Landlord current financial statements of Tenant provided that such statements
are and will be held by such parties as strictly confidential and shall not be
disclosed to any other third party.
28. SALE BY LANDLORD
In the event the original Landlord hereunder, or any successor owner
of the Project or Premises, shall sell or convey the Project or Premises, all
liabilities and obligations on the part of the original Landlord, or such
successor owner, under this lease accruing thereafter shall terminate, and
thereupon all such liabilities and obligations shall be binding upon the new
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owner. Tenant agrees to attorn to such new owner and to look solely to such new
owner for performance of any and all such liabilities and obligations.
29. ATTORNMENT TO LENDER OR THIRD PARTY
In the event the interest of Landlord in the land and buildings in
which the Premises are located (whether such interest of Landlord is a fee title
interest or a leasehold interest) is encumbered by deed of trust, and such
interest is acquired by a lender or any other third party through judicial
foreclosure or by exercise of a power of sale at private trustee's foreclosure
sale, Tenant hereby agrees to release Landlord of any obligation arising on or
after any such foreclosure sale and to attorn to the purchaser at any such
foreclosure sale and to recognize such purchaser as the Landlord under this
lease.
30. DEFAULT BY LANDLORD
Landlord shall not be in default unless Landlord fails to perform
obligations required of Landlord within a reasonable time, but in no event
earlier than thirty (30) days after written notice by Tenant to Landlord
specifying wherein Landlord has failed to perform such obligations; provided,
however, that if the nature of Landlord's obligations is such that more than
thirty (30) days are required for performance, then Landlord shall not be in
default if Landlord commences performance within such thirty (30) day period and
thereafter diligently prosecutes the same to completion.
If Landlord is in default of this lease, Tenant's sole remedy shall be
to institute suit against Landlord in a court of competent jurisdiction, and
Tenant shall have no right to offset any sums expended by Tenant as a result of
Landlord's default against future rent and other sums due and payable pursuant
to this lease. If Landlord is in default of this lease, and as a consequence
Tenant recovers a money judgment against Landlord, the judgment shall be
satisfied only out of the proceeds of sale received on execution of the judgment
and levy against the right, title and interest of Landlord in the Project of
which the Premises are a part, and out of rent or other income from such real
property receivable by Landlord or out of the consideration received by Landlord
from the sale or other disposition of all or any part of Landlord's right, title
and interest in the Project of which the Premises are a part. Neither Landlord
nor any of the partners comprising the partnership designated as Landlord shall
be personally liable for any deficiency.
31. CONSTRUCTION CHANGES
It is understood that the description of the Premises and the location
of ductwork, plumbing and other facilities therein are subject to such changes
as Landlord or Landlord's architect determines to be desirable in the course of
construction of the Premises and/or the improvements constructed or being
constructed therein, and no such changes or any changes in plans for any other
portions of the Project, shall affect this lease or entitle Tenant to any
reduction of rent hereunder or result in any liability of Landlord to Tenant,
provided that such change shall not materially reduce the square footage of the
Premises or the suitability of the Premises for Tenant's use.
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32. MEASUREMENT OF PREMISES
Tenant understands and agrees that any reference to square footage of
the Premises is approximate only and includes all interior partitions and
columns, one-half of exterior walls, and one-half of the partitions separating
the Premises from the rest of the Project, Tenant's proportionate share of the
Common Area and, if applicable, covered areas immediately outside the entry
doors or loading docks. Tenant waives any claim against Landlord regarding the
accuracy of any such measurement and agrees that there shall not be any
adjustment in basic rent or common area charges or other amounts payable
hereunder by reason of inaccuracies in such measurement.
33. ATTORNEY FEES
If either party commences an action against the other party arising
out of or in connection with this lease, the prevailing party shall be entitled
to have and recover from the losing party all expenses of litigation, including,
without limitation, travel expenses, attorney fees, expert witness fees, trial
and appellate court costs, and deposition and transcript expenses. If either
party becomes a party to any litigation concerning this lease, or concerning the
Premises or the Project, by reason of any act or omission of the other party or
its authorized representatives, the party that causes the other party to become
involved in the litigation shall be liable to the other party for all expenses
of litigation, including, without limitation, travel expenses, attorney fees,
expert witness fees, trial and appellate court costs, and deposition and
transcript expenses.
34. SURRENDER
The voluntary or other surrender of this lease or the Premises by
Tenant, or a mutual cancellation of this lease, shall not work a merger, and at
the option of Landlord shall either terminate all or any existing subleases or
subtenancies or operate as an assignment to Landlord of all or any such
subleases or subtenancies.
35. WAIVER
No delay or omission in the exercise of any right or remedy of
Landlord on any default by Tenant shall impair such right or remedy or be
construed as a waiver. The receipt and acceptance by Landlord of delinquent
rent or other payments shall not constitute a waiver of any other default and
acceptance of partial payments shall not be construed as a waiver of the balance
of such payment due. No act or conduct of Landlord, including, without
limitation, the acceptance of keys to the Premises, shall constitute an
acceptance of the surrender of the Premises by Tenant before the expiration of
the term. Only a written notice from Landlord to Tenant shall constitute
acceptance of the surrender of the Premises and accomplish a termination of this
lease. Landlord's consent to or approval of any act by Tenant requiring
Landlord's consent or approval shall not be deemed to waive or render
unnecessary Landlord's consent to or approval of any subsequent act by Tenant.
Any waiver by Landlord 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 this
lease.
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36. EASEMENTS; AIRSPACE RIGHTS
Landlord reserves the right to alter the boundaries of the Project and
grant easements and dedicate for public use portions of the Project without
Tenant's consent, provided that no such grant or dedication shall interfere with
Tenant's use of the Premises or otherwise cause Tenant to incur cost or expense.
From time to time, and upon Landlord's demand, Tenant shall execute, acknowledge
and deliver to Landlord, in accordance with Landlord's instructions, any and all
documents, instruments, maps or plats necessary to effectuate Tenant's covenants
hereunder.
This lease confers no rights either with regard to the subsurface of
or airspace above the land on which the Project is located or with regard to
airspace above the building of which the Premises are a part. Tenant agrees
that no diminution or shutting off of light or view by a structure which is or
may be erected (whether or not by Landlord) on property adjacent to the building
of which the Premises are a part or to property adjacent thereto, shall in any
way affect this lease, or entitle Tenant to any reduction of rent, or result in
any liability of Landlord to Tenant.
37. RULES AND REGULATIONS
Landlord shall have the right from time to time to promulgate rules
and regulations for the safety, care and cleanliness of the Premises, the
Project and the Common Area, or for the preservation of good order. On delivery
of a copy of such rules and regulations to Tenant, Tenant shall comply with the
rules and regulations, and a violation of any of them shall constitute a default
by Tenant under this lease. If there is a conflict between the rules and
regulations and any of the provisions of this lease, the provisions of this
lease shall prevail. Such rules and regulations may be amended by Landlord from
time to time with or without advance notice.
38. NOTICES
All notices, demands, requests, consents and other communications
which may be given or are required to be given by either party to the other
shall be in writing and shall be sufficiently made and delivered if personally
served or if sent by United States first class mail, postage prepaid. Prior to
the commencement date, all such communications from Landlord to Tenant shall be
served or addressed to Tenant at 10690 Castine Avenue, Cupertino, California
95014; on or after the commencement date all such communications from Landlord
to Tenant shall be addressed to Tenant at the Premises. All such communications
by Tenant to Landlord shall be sent to Landlord at its offices at 3945 Freedom
Circle, Suite 640, Santa Clara, California 95054. Either party may change its
address by notifying the other of such change. Each such communication shall be
deemed received on the date of the personal service or mailing thereof in the
manner herein provided, as the case may be.
39. NAME
Tenant shall not use the name of the Project for any purpose, other
than as the address of the business conducted by Tenant in the Premises, without
the prior written consent of Landlord.
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40. GOVERNING LAW; SEVERABILITY
This lease shall in all respects be governed by and construed in
accordance with the laws of the State of California. If any provision of this
lease shall be held or rendered invalid, unenforceable or ineffective for any
reason whatsoever, all other provisions hereof shall be and remain in full force
and effect.
41. DEFINITIONS
As used in this lease, the following words and phrases shall have the
following meanings:
Authorized representative: any officer, agent, employee or
-------------------------
independent contractor retained or employed by either party, acting within
authority given him by that party.
Encumbrance: any deed of trust, mortgage or other written security
-----------
device or agreement affecting the Premises or the Project that constitutes
security for the payment of a debt or performance of an obligation, and the note
or obligation secured by such deed of trust, mortgage or other written security
device or agreement.
Lease month: the period of time determined by reference to the day of
-----------
the month in which the term commences and continuing to one day short of the
same numbered day in the next succeeding month; e.g., the tenth day Of one month
to and including the ninth day in the next succeeding month.
Lender: the beneficiary, mortgagee or other holder of an encumbrance,
------
as defined above.
Lien: a charge imposed on the Premises by someone other than Landlord,
----
by which the Premises are made security for the performance of an act. Most of
the liens referred to in this lease are mechanic's liens.
Maintenance: repairs, replacement, repainting and cleaning.
-----------
Monthly Rent: the sum of the monthly payments of basic rent and
------------
common area charges.
Person: one or more human beings, or legal entities or other
------
artificial persons, including, without limitation, partnerships, corporations,
trusts, estates, associations and any combination of human being and legal
entities.
Provision: any term, agreement, covenant, condition, clause,
---------
qualification, restriction, reservation or other stipulation in the lease that
defines or otherwise controls, establishes or limits the performance required or
permitted by either party.
Rent: basic rent, common area charges, additional rent, and all other
----
amounts payable by Tenant to Landlord required by this lease or arising by
subsequent actions of the parties made pursuant to this lease.
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Words used in any gender include other genders. If there be more than
one Tenant, the obligations of Tenant hereunder are joint and several. All
provisions whether covenants or conditions, on the part of Tenant shall be
deemed to be both covenants and conditions. The paragraph headings are for
convenience of reference only and shall have no effect upon the construction or
interpretation of any provision hereof.
42. TIME
Time is of the essence of this lease and of each and all of its
provisions.
43. INTEREST ON PAST DUE OBLIGATIONS; LATE CHARGE
Any amount due from Tenant to Landlord hereunder which is not paid
within five (5) days of when due shall bear interest at the rate of ten percent
(10%) per annum from when due until paid, unless otherwise specifically provided
herein, but the payment of such interest shall not excuse or cure any default by
Tenant under this lease. In addition, Tenant acknowledges that late payment by
Tenant to Landlord of basic rent or common area charges or of any other amount
due Landlord from Tenant, will cause Landlord to incur costs not contemplated by
this lease, the exact amount of such costs being extremely difficult and
impractical to fix. Such costs include, without limitation, processing and
accounting charges, and late charges that may be imposed on Landlord, e.g., by
the terms of any encumbrance and note secured by any encumbrance covering the
Premises. Therefore, if any such payment due from Tenant is not received by
Landlord within five (5) days of when due, Tenant shall pay to Landlord an
additional sum of five percent (5%) of the overdue payment as a late charge.
The parties agree that this late charge represents a fair and reasonable
estimate of the costs that Landlord will incur by reason of late payment by
Tenant. Acceptance of any late charge shall not constitute a waiver of Tenant's
default with respect to the overdue amount, nor prevent Landlord from exercising
any of the other rights and remedies available to Landlord. No notice to Tenant
of failure to pay shall be required prior to the imposition of such interest
and/or late charge, and any notice period provided for in paragraph 20 shall not
affect the imposition of such interest and/or late charge. Any interest and
late charge imposed pursuant to this paragraph shall be and constitute
additional rent payable by Tenant to Landlord.
44. ENTIRE AGREEMENT
This lease, including any exhibits and attachments, constitutes the
entire agreement between Landlord and Tenant relative to the Premises and this
lease and the exhibits and attachments may be altered, amended or revoked only
by an instrument in writing signed by both Landlord and Tenant. Landlord and
Tenant agree hereby that all prior or contemporaneous oral agreements between
and among themselves or their agents or representatives relative to the leasing
of the Premises are merged in or revoked by this lease.
45. CORPORATE AUTHORITY
If Tenant is a corporation, each individual executing this lease on
behalf of the corporation represents and warrants that he is duly authorized to
execute and deliver this lease on behalf of the corporation in accordance with a
duly adopted resolution of the Board of Directors of said corporation and that
this lease is binding upon said corporation in accordance with its
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terms. If Tenant is a corporation, Tenant shall deliver to Landlord, within ten
(10) days of the execution of this lease, a copy of the resolution of the Board
of Directors of Tenant authorizing the execution of this lease and naming the
officers that are authorized to execute this lease on behalf of Tenant, which
copy shall be certified by Tenant's president or secretary as correct and in
full force and effect.
46. RECORDING
Neither Landlord nor Tenant shall record this lease or a short form
memorandum hereof without the consent of the other.
47. REAL ESTATE BROKERS
Each party represents and warrants to the other party that it has not
had dealings in any manner with any real estate broker, finder or other person
with respect to the Premises and the negotiation and execution of this lease
except Wayne Mascia Associates. Except as to commissions and fees to be paid as
provided in this paragraph, each party shall indemnify and hold harmless the
other party from all damage, loss, liability and expense (including attorneys'
fees and related costs) arising out of or resulting from any claims for
commissions or fees that may or have been asserted against the other party by
any broker, finder or other person with whom Tenant or Landlord has or
purportedly has dealt with in connection with the Premises and the negotiation
and execution of this lease. To the extent agreed to between Landlord and Wayne
Mascia Associates, Landlord shall pay all broker leasing commissions to Wayne
Mascia Associates incurred in connection with the Premises and the negotiation
and execution of this lease; Landlord and Tenant agree that Landlord shall not
be obligated to pay any broker leasing commissions, consulting fees, finder fees
or any other fees or commissions arising out of or relating to any extended term
of this lease or to any expansion or relocation of the Premises at any time.
48. EXHIBITS AND ATTACHMENTS
All exhibits and attachments to this lease are a part hereof
49. ENVIRONMENTAL MATTERS
A. Tenant's Covenants Regarding Hazardous Materials.
------------------------------------------------
(1) Hazardous Materials Handling. Tenant, its agents, invitees,
----------------------------
employees, contractors, sublessees, assigns and/or successors shall not use,
store, dispose, release or otherwise cause to be present or permit the use,
storage, disposal, release or presence of Hazardous Materials (as defined below)
on or about the Premises or Project. As used herein "Hazardous Materials" shall
mean any petroleum or petroleum byproducts, flammable explosives, asbestos, urea
formaldehyde, radioactive materials or waste and any "hazardous substance",
"hazardous waste", "hazardous materials", "toxic substance" or "toxic waste" as
those terms are defined under the provisions of the California Health and Safety
Code and/or the provisions of the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. Section 9601 et seq.), as amended by
the Superfund Amendments and Reauthorization Act of 1986 (42 U.S.C. Section 9601
et seq.), or any other hazardous or toxic
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substance, material or waste which is or becomes regulated by any local
governmental authority, the State of California or any agency thereof, or the
United States Government or any agency thereof.
(2) Notices. Tenant shall immediately notify Landlord in
-------
writing of: (i) any enforcement, cleanup, removal or other governmental or
regulatory action instituted, completed or threatened pursuant to any law,
regulation or ordinance relating to the industrial hygiene, environmental
protection or the use, analysis, generation, manufacture, storage, presence,
disposal or transportation of any Hazardous Materials (collectively "Hazardous
Materials Laws"); (ii) any claim made or threatened by any person against
Tenant, the Premises, Project or buildings within the Project relating to
damage, contribution, cost recovery, compensation, loss or injury resulting from
or claimed to result from any Hazardous Materials; and (iii) any reports made to
any environmental agency arising out of or in connection with any Hazardous
Materials in, on or removed from the Premises, Project or buildings within the
Project, including any complaints, notices, warnings, reports or asserted
violations in connection therewith. Tenant shall also supply to Landlord as
promptly as possible, and in any event within five (5) business days after
Tenant first receives or sends the same, with copies of all claims, reports,
complaints, notices, warnings or asserted violations relating in any way to the
Premises, Project or buildings within the Project or Tenant's use thereof.
Tenant shall promptly deliver to Landlord copies of hazardous waste manifests
reflecting the legal and proper disposal of all Hazardous Materials removed from
the Premises.
B. Indemnification of Landlord. Tenant shall indemnify, defend (by
---------------------------
counsel acceptable to Landlord), protect, and hold Landlord, and each of
Landlord's partners, employees, agents, attorneys, successors and assigns, free
and harmless from and against any and all claims, liabilities, penalties,
forfeitures, losses or expenses (including attorneys' fees) for death of or
injury to any person or damage to any property whatsoever (including water
tables and atmosphere), arising from or caused in whole or in part, directly or
indirectly, by (i) the presence in, on, under or about the Premises, Project or
buildings within the Project or discharge in or from the Premises, Project or
buildings within the Project of any Hazardous Materials or Tenant's use,
analysis, storage, transportation, disposal, release, threatened release,
discharge or generation of Hazardous Materials to, in, on, under, about or from
the Premises, Project or buildings within the Project, or (ii) Tenant's failure
to comply with any Hazardous Materials Laws whether knowingly, unknowingly,
intentionally or unintentionally. Tenant's obligations hereunder shall include,
without limitation, and whether foreseeable or unforeseeable, all costs of any
required or necessary repair, cleanup or detoxification or decontamination of
the Premises, Project or buildings within the Project, and the preparation and
implementation of any closure remedial action or other required plans in
connection therewith. In addition, Tenant shall reimburse Landlord for (i)
losses in or reductions to rental income resulting from Tenant's use, storage or
disposal of Hazardous Materials, (ii) all costs of refitting or other
alterations to the Premises, Project or buildings within the Project required as
a result of Tenant's use, storage, or disposal of Hazardous Materials including,
without limitation, alterations required to accommodate an alternate use of the
Premises, Project or buildings within the Project, and (iii) any diminution in
the fair market value of the Premises, Project or buildings within the Project
caused by Tenant's use, storage, or disposal of Hazardous Materials. For
purposes of this paragraph 49, any acts or omissions of Tenant, or by employees,
agents, assignees, contractors or
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subcontractors of Tenant or others acting for or on behalf of Tenant (whether or
not they are negligent, intentional, willful or unlawful) shall be strictly
attributable to Tenant.
C. Survival. The provisions of this paragraph 49 shall survive the
--------
expiration or earlier termination of the term of this lease.
50. SIGNAGE
Tenant shall not, without obtaining the prior written consent of
Landlord, install or attach any sign or advertising material on any part of the
outside of the Premises, or on any part of the inside of the Premises which is
visible from the outside of the Premises, or in the halls, lobbies, windows or
elevators of the building in which the Premises are located or on or about any
other portion of the Common Area or Project. If Landlord consents to the
installation of any sign or other advertising material, the location, size,
design, color and other physical aspects thereof shall be subject to Landlord's
prior written approval and shall be in accordance with any sign program
applicable to the Project. Subject to the terms of this paragraph 50, Tenant
shall be permitted to use the existing monument sign base for Tenant's signage.
In addition to any other requirements of this paragraph 50, the installation of
any sign or other advertising material by or for Tenant must comply with all
applicable laws, statutes, requirements, rules, ordinances and any C.C. & R.'s
or other similar requirements. With respect to any permitted sign installed by
or for Tenant, Tenant shall maintain such sign or other advertising material in
good condition and repair and shall remove such sign or other advertising
material on the expiration or earlier termination of the term of this lease.
The cost of any permitted sign or advertising material and all costs associated
with the installation, maintenance and removal thereof shall be paid for solely
by Tenant. If Tenant fails to properly maintain or remove any permitted sign or
other advertising material, Landlord may do so at Tenant's expense. Any cost
incurred by Landlord in connection with such maintenance or removal shall be
deemed additional rent and shall be paid by Tenant to Landlord within ten (10)
days following notice from Landlord. Landlord may remove any unpermitted sign
or advertising material without notice to Tenant and the cost of such removal
shall be additional rent and shall be paid by Tenant within ten (10) days
following notice from Landlord. Landlord shall not be liable to Tenant for any
damage, loss or expense resulting from Landlord's removal of any sign or
advertising material in accordance with this paragraph 50. The provisions of
this paragraph 50 shall survive the expiration or earlier termination of this
lease.
51. SUBMISSION OF LEASE
The submission of this lease to Tenant for examination or signature by
Tenant is not an offer to lease the Premises to Tenant, nor an agreement by
Landlord to reserve the Premises for Tenant. Landlord will not be bound to
Tenant until this lease has been duly executed and delivered by both Landlord
and Tenant.
52. TENANT IMPROVEMENTS
Improvements to the Premises shall be constructed and installed in
accordance with the plans and specifications, and other terms and conditions,
set forth in Exhibit C to this lease, the contents of which is incorporated
herein and made a part hereof by this reference. The
30
<PAGE>
improvements shall be constructed and installed at the expense of Landlord
and/or Tenant as set forth in Exhibit C to this lease and in each case shall be
performed in a diligent and workmanlike manner.
53. ADDITIONAL RENT
All costs, charges, fees, penalties, interest and any other payments
(including Tenant's reimbursement to Landlord of costs incurred by Landlord)
which Tenant is required to make to Landlord pursuant to the terms and
conditions of this lease and any amendments to this lease shall be and
constitute additional rent payable by Tenant to Landlord when due as specified
in this lease and any amendments to this lease.
54. LANDLORD'S OPTION TO RELOCATE PREMISES
[INTENTIONALLY OMITTED.]
55. OPTION TO EXTEND TERM
Landlord grants to Tenant the option to extend the term for one period
of two (2) years (the "Extended Term") following the expiration of the initial
term set forth in paragraph 2 ("Initial Term") under all the provisions of this
lease except for the amount of the basic rent. The basic rent for the Extended
Term shall be adjusted to ninety-five percent (95%) of the then market rate (as
defined in paragraph (c) below); provided that in no event shall the basic rent
for the Extended Term be less than the basic rent in effect at the expiration of
the Initial Term. This option is further subject to the following terms and
conditions:
(a) Tenant must deliver its irrevocable written notice of Tenant's
exercise of this option to Landlord not less than six (6) lease months, nor more
than twelve (12) lease months, prior to the expiration of the Initial Term. Time
is of the essence with respect to the time period during which Tenant must
deliver to Landlord its written notice of exercise and, therefore, if Tenant
fails to give Landlord its irrevocable written notice of its exercise of this
option within the time period provided above then this option shall expire and
be of no further force or effect.
(b) The parties shall have thirty (30) days from the date Landlord
received Tenant's notice of exercise in which to agree on the amount
constituting the market rate. If Landlord and Tenant agree on the amount of the
market rate, they shall immediately execute an amendment to this lease setting
forth the expiration date of the Extended Term and the amount of the basic rent
to be paid by Tenant during the Extended Term. If Landlord and Tenant are unable
to agree on the amount of the market rate within such time period, then, at the
request of either party, the market rate shall be determined in the following
manner: (i) within thirty (30) days of the request of either party, Landlord and
Tenant shall each select a licensed real estate broker with not less than five
(5) years experience in the business of commercial leasing of property of the
same type and use and in the same geographic area, as the Premises; (ii) within
fifteen (15) days of their appointment, such two real estate brokers shall
select a third broker who is similarly qualified; (iii) within thirty (30) days
from the appointment of the third broker, the three brokers so selected shall,
acting as a board of arbitrators, then determine the amount of the market rate,
basing their determination on standard procedures and tests normally employed in
31
<PAGE>
determining market rates and applying the factors included within the definition
of market rate set forth in subparagraph (c) below. The decision of the
majority of said brokers shall be final and binding upon the parties hereto. If
a majority of the brokers are unable to agree on the market rate within the
stipulated period of time, the three opinions of the market rate shall be added
together and their total divided by three; the resulting quotient shall be the
market rate. If, however, the low opinion and/or the high opinion are/is more
than 15% lower and/or higher than the middle opinion, the low opinion and/or the
high opinion, as the case may be, shall be disregarded. If only one opinion is
disregarded, the remaining two opinions shall be added together and their total
divided by two and the resulting quotient shall be the market rate. If both the
low opinion and the high opinion are disregarded as stated in this paragraph,
the middle opinion shall be the market rate. If a party does not appoint a
qualified broker within the required time period, the broker appointed by the
other party shall be the sole broker and shall determine the market rate. If
the two brokers appointed by the parties are unable to agree on the third
broker, either of the parties to the lease, by giving ten (10) days' notice to
the other party, can apply to the then president of the county real estate board
of the county in which the Premises are located, or to the presiding judge of
the superior court of that county, for the selection of a third broker who meets
the qualifications stated in this paragraph. Each party shall pay the expenses
and charges of the broker appointed by it and the parties shall pay the expenses
and charges of the third broker in equal shares. When the market rate has been
so determined, Landlord and Tenant shall immediately execute an amendment to
this lease stating the basic rent for the Extended Term.
(c) As used herein, the "market rate" shall be the monthly rent
(triple net) then obtained for two (2) year fixed rate leases of comparable
terms for premises in the Project and in buildings and/or projects within the
same geographical area of similar types and identity, quality and location as
the Project.
(d) Common area charges shall continue to be determined and payable
as provided in paragraph 16 of this lease.
(e) Tenant shall not assign or otherwise transfer this option or any
interest therein and any attempt to do so shall render this option null and
void. Tenant shall have no right to extend the term beyond the Extended Term.
If Tenant is in default under this lease at the date of delivery of Tenant's
notice of exercise to Landlord, then such notice shall be of no effect and this
lease shall expire at the end of the Initial Term; if Tenant is in default under
this lease on the last day of the Initial Term, then Landlord may in its sole
discretion elect to have Tenant's exercise of this option be of no effect, in
which case this lease shall expire at the end of the Initial Term.
56. RIGHT OF FIRST REFUSAL ON EXPANSION SPACE
Landlord hereby grants to Tenant a right of first refusal on that
certain space located at 462 Oakmead Parkway, Sunnyvale, California consisting
of approximately six thousand two hundred fifty (6,250) square feet, as outlined
in blue on Exhibit D (the "Expansion Space"), subject to the following terms and
conditions:
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<PAGE>
(a) This first right of refusal shall only be effective during the
Initial Term of this lease to Tenant. Upon Landlord's receipt of any lease
proposal/offer to lease the Expansion Space from any third party ("Third Party
Offer") which is acceptable to Landlord, Landlord, prior to entering into a
lease with such third party, shall provide Tenant with written notice
("Landlord's Notice") of the terms and conditions of the Third Party Offer (the
"Offer").
(b) Tenant shall have five (5) business days from receipt of
Landlord's Notice to deliver to Landlord its written unconditional and
irrevocable acceptance of the Offer. If Tenant accepts the Offer, an amendment
to this lease or a new lease covering the Expansion Space and incorporating said
terms and conditions shall promptly be executed. If a new lease is executed with
Tenant covering the Expansion Space such new lease shall provide that any
default under this lease will also constitute a default under such new lease and
Tenant agrees that any default by it under such new lease will also constitute a
default under this lease. In the event Tenant rejects the Offer, or does not
answer within the specified time, or fails for any reason (unless such failure
is due to the fault or delay of Landlord) to execute such amendment or new lease
within thirty (30) days of Tenant's acceptance of the Offer, Landlord shall
thereafter be released from any further obligation with respect to the Offer and
be free to negotiate with said third party making the Third Party Offer and to
lease to such third party (without further obligation to Tenant) the Expansion
Space or any portion thereof upon any terms and conditions substantially similar
to those contained in the Offer.
(c) This first right to lease shall be subordinate to any existing
rights of refusal, rights of expansion, options to extend or renew, and other
rights contained in leases (or amendments to leases) executed prior to the date
of this lease. In addition, this first right to lease shall not apply and Tenant
shall have no rights hereunder in the event any tenant (or its successors or
assigns) that now or hereafter occupies all or any portion of the Expansion
Space desires to extend, renew or otherwise modify its lease or desires to
expand its premises to include any portion of the Expansion Space, and Landlord
shall be free to extend, renew or modify such lease or amend such lease to add
any portion of the Expansion Space without notice to Tenant.
(d) This first right to lease shall be void and of no force and
effect and shall confer no rights on Tenant during any period in which Tenant is
in default under this lease.
(e) Notwithstanding anything in this paragraph to the contrary,
Tenant's exercise of this first right to lease shall be subject to Landlord's
review and approval of Tenant's financial condition (including, without
limitation, Tenant's net worth, current ratio and working capital reserves) at
the time Tenant exercises this first right to lease and notwithstanding Tenant's
rights hereunder Landlord shall have no obligation to lease the Expansion Space
to Tenant unless Tenant's financial condition at the time of acceptance of the
Offer is equal to or better than as shown on the financial statements dated
December 31, 1993, previously provided to Landlord by Tenant. Landlord agrees
that all information regarding Tenant's financial condition, provided pursuant
to this paragraph 56(e) and paragraph 57(e), shall be held by Landlord as
strictly confidential, and shall not be disclosed by Landlord to any third party
for any purpose whatsoever.
(f) All rights granted to Tenant pursuant to this paragraph are
personal to Tenant and may not be transferred or assigned. If Landlord transfers
its ownership interest in the
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<PAGE>
Premises or Project, this first right to lease shall be binding on the
transferee of Landlord's interest.
57. FIRST RIGHT TO LEASE RFR SPACE
Landlord hereby grants to Tenant the first right to lease that certain
space located at 464 Oakmead Parkway, Sunnyvale, California consisting of
approximately thirteen thousand nine hundred fifty-nine (13,959) square feet, as
outlined in blue on Exhibit E (the "RFR Space"), subject to the following terms
and conditions:
(a) This first right to lease shall only be effective during the
Initial Term of this lease to Tenant. Upon notice from Landlord that the RFR
Space will be available for lease within six '(6) months from the date of such
notice, Landlord shall notify Tenant in writing of such availability and such
notice shall set forth the terms and conditions, including, but not limited to,
basic rent, under which Landlord will lease the RFR Space to Tenant ("Offer").
(b) Tenant shall have five (5) business days from receipt of the
notice to deliver to Landlord its written unconditional and irrevocable
acceptance of the Offer. If Tenant accepts the Offer, an amendment to this lease
or a new lease covering the RFR Space and incorporating said terms and
conditions shall promptly be executed. If a new lease is executed with Tenant
covering the RFR Space such new lease shall provide that any default under this
lease will also constitute a default under such new lease and Tenant agrees that
any default by it under such new lease will also constitute a default under this
lease. In the event Tenant rejects the Offer, or does not answer within the
specified time, or fails for any reason (unless such failure is due to the fault
or delay of Landlord) to execute such amendment or new lease within thirty (30)
days of Tenant's acceptance of the Offer, Landlord shall thereafter be released
from any further obligation with respect to the Offer and be free to negotiate
with any number of third parties and to lease (without further obligation to
Tenant) the RFR Space or any portion thereof upon any terms and conditions.
(c) This second right to lease shall be subordinate to any existing
rights of refusal, rights of expansion, options to extend or renew, and other
rights contained in leases (or amendments to leases) executed prior to the date
of this lease. In addition, this second right to lease shall not apply and
Tenant shall have no rights hereunder in the event any tenant (or its successors
or assigns) that now or hereafter occupies all or any portion of the RFR Space
desires to extend, renew or otherwise modify its lease or desires to expand its
premises to include any portion of the RFR Space, and Landlord shall be free to
extend, renew or modify such lease or amend such lease to add any portion of the
RFR Space without notice to Tenant.
(d) This second right to lease shall be void and of no force and
effect and shall confer no rights on Tenant during any period in which Tenant is
in default under this lease.
(e) Notwithstanding anything in this paragraph to the contrary,
Tenant's exercise of this second right to lease shall be subject to Landlord's
review and approval of Tenant's financial condition (including, without
limitation, Tenant's net worth, current ratio and working capital reserves) at
the time Tenant exercises this second right to lease and notwithstanding
Tenant's rights hereunder Landlord shall have no obligation to lease the RFR
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Space to Tenant unless Tenant's financial condition at the time of acceptance of
the Offer is equal to or better than as shown on the financial statements dated
December 31, 1993, previously provided to Landlord by Tenant.
(f) All rights granted to Tenant pursuant to this paragraph are
personal to Tenant and may not be transferred or assigned. If Landlord transfers
its ownership interest in the Premises or Project, this second right to lease
shall be binding on the transferee of Landlord's interest.
58. OPTION TO TERMINATE
Tenant shall have the option to cancel and terminate this lease
effective on the last day of the twenty-fourth (24th) lease month of the initial
three (3) year lease term ("Termination Date") subject to the following terms
and conditions:
(a) Tenant must give Landlord its irrevocable written notice of
Tenant's election to terminate no later than by the last day of the twenty-first
(21st) lease month of the initial three (3) year lease term;
(b) Concurrently with delivery of Tenant's notice of election to
terminate, Tenant shall pay to Landlord, the sum of Eleven Thousand Four Hundred
Twenty-One and 00/100 Dollars ($11,421.00).
(c) If Tenant fails to strictly comply with the terms of paragraph
58(a) and (b) above, this option to terminate shall automatically expire and be
of no further force or effect.
59. REDUCED RENT
As consideration for Tenant's performance of all obligations to be
performed by Tenant under this lease and notwithstanding the provisions of
paragraph 4(a) of this lease, Landlord hereby conditionally excuses Tenant from
the payment of basic rent for the first two (2) lease months of the term of this
lease; provided, however, Tenant does not commit a default hereunder at any time
during the term of this lease, which default continues beyond the expiration of
any applicable cure period. Should Tenant at any time during the term be in
default hereunder beyond the expiration of any applicable cure periods, then the
total sum of such basic rent so conditionally excused shall become immediately
due and payable by Tenant to Landlord. If at the expiration of the term of this
lease Tenant has not committed a default hereunder, which has continued beyond
the expiration of any applicable cure periods, Landlord shall waive any payment
of basic rent so conditionally excused. Landlord and Tenant agree that no
portion of the basic rent paid by Tenant during the portion of the term of this
lease occurring after the expiration of any period during which such rent was
abated shall be allocated, for income tax purposes, by Landlord or Tenant to
such rent abatement period, nor is such rent intended by the parties to be
allocable, for income tax purposes, to any abatement period.
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<PAGE>
IN WITNESS WHEREOF, Landlord and Tenant have executed and delivered this
lease on the date first above written.
Landlord: Tenant:
-------- ------
CALIFORNIA FIRST, LTD., ELECTRONICS PUBLISHING
a Florida limited partnership RESOURCES, INC.,
a Delaware corporation
By: McCandless Partnership, a By:___________________________________
California general partnership, (Signature)
a General Partner
___________________________________
(Printed Name)
By: _______________________________
Birk S. McCandless, as ___________________________________
Trustee under the Birk S. (Title)
McCandless and Mary McCandless
Inter Vivos Trust Agreement ___________________________________
dated February 17, 1982, a (Date)
General Partner
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<PAGE>
EXHIBIT A
Exhibit A is a map of the property located at 460 Oakmead Parkway, Sunnyvale,
California, which graphically depicts the floorplan of the Registrant's leased
space. The floorplan consists of sixty two rooms. Fourteen of the rooms are
labeled as follows: "Open Office," "Stor.," "Lunch Room," "Comp. Room," "File
Room," "Stor," "Phone Room," "Storage," "Conference Room," "Conference Room,"
"Copy Room," "Conference Room," "Lobby" and "Lunch Room."
<PAGE>
EXHIBIT B
Exhibit B is an architectural blueprint for 460-464 Oakmead Parkway, Sunnyvale,
California. The blueprint describes the dimensions of the building and the
outdoor parking areas.
<PAGE>
WORK LETTER AGREEMENT
EXISTING SPACE - TURNKEY
CONSTRUCTION EXHIBIT C
--------------------------------------------------------------------------------
THIS WORK LETTER AGREEMENT (hereinafter "Exhibit C") is attached to
and forms a part of that certain lease ("Lease") by and between CALIFORNIA
FIRST, LTD., a Florida limited partnership ("Landlord"), and ELECTRONIC
PUBLISHING RESOURCES, INC., a Delaware corporation ("Tenant"), pursuant to which
Landlord leases to Tenant those certain premises located at 460 Oakmead Parkway,
Sunnyvale, California and consisting of approximately nine thousand one hundred
fifty-nine (9,159) square feet ("Premises"). All capitalized terms used herein
shall have the meaning ascribed to them in the Lease unless otherwise defined
below. The Premises shall be improved in accordance with the following:
1. Existing Improvements:
---------------------
Tenant accepts the Premises in their existing condition and the
improvements constructed therewith, and Tenant hereby approves the same as
installed, subject only to such changes as may subsequently be agreed upon by
Landlord and Tenant. Such improvements are hereafter called "Existing
Improvements".
2. Tenant Improvements:
-------------------
As used herein, "Tenant Improvements" shall include those items and
specifications shown on the Final Construction Drawings prepared in accordance
with paragraph 3 below, including those specifications (as appropriate) set
forth and described in Exhibit C-1, attached hereto, exclusive of Existing
Improvements. Landlord shall construct Tenant Improvements in accordance with
the Final Construction Drawings, Exhibit C-1 and the provisions of this Exhibit
C. Unless otherwise specifically agreed to by Landlord in writing, the
installation, wiring, maintenance and removal of furniture partition systems,
telephone and other communication systems, data cabling, alarm and/or security
systems and any other systems not specifically set forth on the Final
Construction Drawings, and all cost and expense associated therewith, shall be
the sole responsibility of Tenant, and Tenant shall be entitled to enter the
Premises prior to the commencement of the lease term only for the purpose of
installing said systems; provided that Tenant cooperates with and coordinates
its work with Landlord's General Contractor and Tenant's work shall not
interfere with construction of the Tenant Improvements by Landlord's General
Contractor. In connection with the construction and installation of the Tenant
Improvements, Landlord or Landlord's general contractor shall have no obligation
to move any of Tenant's property located in or about the Premises including, but
not limited to, furniture, inventory and trade fixtures, at the time of such
construction and installation. If at the time of construction and installation
of the Tenant Improvements Tenant has property located in or about the Premises
that inhibits or prevents in any way the construction and installation of the
Tenant Improvements, Tenant shall immediately, upon receipt of notification
therefore from Landlord or Landlord's general contractor, at Tenant's sole cost
and expense, move such property to another location within the Premises or, upon
receipt of Landlord's prior approval, to another location within the Project
designated by Landlord in Landlord's sole discretion;
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Tenant's failure to immediately move such property upon receipt of notification
therefore from Landlord or Landlord's general contractor shall be deemed a
Tenant caused delay subject to the provisions of paragraph 6 of this Exhibit C.
If at the time of construction and installation of the Tenant Improvements
Tenant has property located in or about the Premises, Landlord and Landlord's
general contractor shall incur no liability to Tenant or any other party in the
event such property is damaged, destroyed or stolen during the construction and
installation of the Tenant Improvements.
3. Tenant Improvement Design Schedule:
----------------------------------
The plans and specifications for the Tenant Improvements and any other
improvements shall be completed in accordance with the following:
(a) Tenant shall approve preliminary floor plan layouts ("Preliminary
Floor Plans") prepared by Landlord by Completed. The Preliminary Floor Plans
shall show all walls, doors, and other Tenant Improvements as desired by Tenant
in sufficient detail for Landlord's architect to prepare architectural
construction drawings and related documents "Architectural Construction
Documents").
(b) Between Completed and Completed, Landlord's architect and
Tenant's representative shall meet as needed to review and complete the final
details related to the Preliminary Floor Plans, so that on Completed, 1994 the
Architectural Construction Documents are subject only to minor changes.
(c) No later than Completed, Tenant shall have made the decisions
required and supplied to Landlord the information necessary for Landlord's
architect to complete the Architectural Construction Documents in enough detail
for Landlord's general contractor to bid the work, select subcontractors and to
proceed toward the design of electrical, mechanical and any other requirements
not included on the Architectural Construction Documents. Upon Landlord's
general contractor's selection of subcontractors, Landlord's general contractor
and subcontractors shall prepare design specifications outlining in reasonable
detail electrical, mechanical and any other requirements not included on the
Architectural Construction Documents ("Electrical and Mechanical Drawings").
(d) Upon completion of the Architectural Construction Documents,
Tenant shall approve the same subject to changes, deletions or additions as
provided in paragraphs 4 and 5 of this Exhibit C.
(e) Upon completion of the Electrical and Mechanical Drawings,
Landlord or Landlord's general contractor shall submit the Architectural
Construction Documents and Electrical and Mechanical Drawings (collectively the
"City Ready Plans") to the City to obtain a building permit.
(f) Tenant shall have decided upon color and material specifications
by April 7, 1994.
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<PAGE>
(g) As used herein, "Final Construction Drawings" shall include the
City Ready Plans, as approved by the City, and any subsequent additions,
deletions or changes to the Tenant Improvements permitted or required pursuant
to paragraphs 4 and 5 of this Exhibit C.
4. Changes by Tenant:
-----------------
Tenant may request changes, deletions or additions to the Tenant
Improvements; provided, however, that the effectiveness of any such requested
change, deletion or addition shall be subject to written approval by an
authorized representative of Landlord and to obtaining any required governmental
permits or other approvals. If any such change, deletion or addition increases
the cost of construction and installation of the Tenant Improvements, Tenant
shall immediately pay to Landlord the full amount of such increase in the cost
of construction and installation of the Tenant Improvements. In no event shall
work on any change, deletion or addition requested pursuant to this paragraph 4
commence prior to (i) Landlord and Tenant approving, in writing, such change,
deletion or addition, and (ii) Landlord's receipt from Tenant of payment of the
full amount of the increase in the cost of construction and installation of the
Tenant Improvements.
5. Changes by Authority:
--------------------
Landlord agrees that if any change, deletion or addition to any of the
improvements proposed to be constructed or installed is required by any
governmental authority in connection with obtaining any governmental permit or
approval, or otherwise, then such change, deletion or addition shall promptly be
made at Landlord's expense.
6. Delays Caused by Tenant:
-----------------------
If the commencement of the term is delayed due in any respect to
Tenant's failure to meet the schedule set forth in paragraph 3 above, or due to
construction delays related to any changes required by Tenant, or due to any
other failures by Tenant to perform its obligations under this Exhibit C or
otherwise under the Lease, then any such delays shall be deemed Tenant caused
delays for purposes of determining the commencement date of the Lease pursuant
to paragraph 2(b) of the Lease.
7. Punch List:
----------
Within ten (10) business days after commencement of the term, Tenant
shall deliver to Landlord a list of items ("Punch List") that Tenant believes
Landlord should complete or correct in order for the Premises to be acceptable.
Landlord shall commence to complete or correct the items as soon as possible,
except those items that Landlord reasonably contends are not justified. If
Tenant does not deliver the Punch List to Landlord within the ten (10) day
period, Tenant shall be deemed to have accepted the Premises and approved the
construction. Nothing in this paragraph 7 shall delay the commencement of the
term or Tenant's obligation to pay rent or to make other payments due Landlord
under the Lease.
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8. Landlord's Responsibility:
-------------------------
Landlord, at Landlord's sole cost and expense, shall, prior to
September 30, 1994, install a new roof on the building in which the Premises is
located and strip, repair and seal the parking lot. Landlord hereby warrants
that the new roof on the building in which the Premises are located shall be
free from defects for a period of twelve (12) months following completion
thereof. Landlord, at Landlord's cost, shall be responsible for any required
code upgrades (including seismic reinforcements) to the Premises which are
required to be made by governmental authority, and all alterations required
pursuant to the Americans With Disabilities Act or CFR Title 24, which are not
caused by or the result of Tenant's specific use or alteration of the Premises.
9. Attachments:
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All references in the Lease to Exhibit C shall be deemed to also
include Exhibits C-1 and C-________.
4
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EXHIBIT D
Exhibit D is a graphical depiction of the space located at 462 Oakmead Parkway,
Sunnyvale, California consisting of approximately six thousand two hundred and
fifty square feet. The depiction consists of three connected areas, labeled
"#460," "#462" and "#464." The area labeled "#462" is captioned "Expansion
Space."
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EXHIBIT E
Exhibit E is a graphical depiction of the space located at 464 Oakmead Parkway,
Sunnyvale, California consisting of approximately thirteen thousand nine hundred
fifty-nine square feet. The depiction consists of three areas labeled "#460,"
"#462," and "#464." The area labeled "#464" is captioned "RFR SPACE."