California-Mountain View-2440 El Camino Real Lease - Dialog Corp. and I-Storm Inc.
EL CAMINO LEASE
OVERVIEW OF MAJOR CONTRACT POINTS
PARTIES TO AGREEMENT
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Master lessor: Sobrato Development Companies #850
Sublessor: Dialog Corporation
Sublessee: I-Storm, Inc.
PARAGRAPH 1(c) -- CONFERENCE ROOM NOTICE
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Need to provide prior written notice requesting use of any of the conference
rooms. There are 7 conference rooms with size capacity of approximately: one
each of 30, 25, 10 plus four rooms of about 3 to 4 in size. Request should be
made of Tom Bodenlos, the facilities manager, who works for the management firm
of CB Richard Ellis and who offices on the first floor across from the guard
station. Suggest that Becky Schulz handle all requests. Tom can be reached at:
Tom Bodenloss
Telephone 650-254-8080
Fax 650-254-7070
E-mail Tom_Bodenlos@dialog.com
PARAGRAPH 2 -- TERM OF LEASE
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Commencement date March 23, 1999
Expiration date February 18, 2001
PARAGRAPH 3 -- RENT
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Basic rent: Starts April 1, 1999, payable in advance. Monthly
payment, $2.45 per rentable SF, $28,140.70 based on
11,486 SF.
Adjusts on March 23, 2000, one yr anniversary of
Commencement Date. Monthly payment, $2.55 per rentable
SF, $29,289.30 based on 11,486 SF.
Additional rent: Starts April 1, 1999, payable in advance. Will be
calculated by Dialog. FYI, amount was 61 cents per RSF in
1997; 66 cents in 1998 and may be as high as 89 cents in
1999. However, see cap below.
Cap: For period of April 1, 1999 thru January 31, 2000, if
additional rent calculation is greater than 70 cents per
RSF, I-Storm will receive credit against basic rent in
February 2000 and following months if needed.
For period of February 1, 2000 thru Expiration Date, if
additional rent calculation is greater than 74 cents per
RSF, I-Storm will receive refund on the Expiration Date.
Workstations: See workstation verbal agreement below; rent of $1,000
per month.
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PARAGRAPH 4 -- SECURITY DEPOSIT
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Security deposit of $28,140.70, which is equivalent to one month's basis rent,
was paid when lease was signed. Deposit to be returned within 30 days after
Sublessee vacates.
PARAGRAPH 5 -- IMPROVEMENTS
---------------------------
Dialog, Sublessor, is responsible for installing double door entry at their
cost. I-Storm is responsible for all other improvements, but will be provided a
tenant improvement allowance of $22,972.00 which is $2.00 per rentable SF. See
comments below in regard Exhibit D -- Work Letter.
PARAGRAPH 7 -- INCORPORATION OF MASTER LEASE
--------------------------------------------
For the most part, our sublease is subject to the master lease.
Points noteworthy of mention:
- ML paragraph #4: Sublessee's right to erect any satellite/microwave
transmission devices on the roof shall be subject to Sublessee's obtaining
the prior written consent of Sublessor (whose consent shall not be
unreasonably withheld or delayed) and of Master Lessor.
- ML paragraph 11A: We are responsible for repair and maintenance of the
interior of subleased Premises.
- ML paragraph 12C: We are responsible for maintaining $2.0 million of
general liability insurance and in naming the Master Lessor and Sublessor
as additional insureds on any and all insurance policies that are required
under the Master Lease.
EXHIBIT D -- WORK LETTER
------------------------
Paragraph 1(a). We are supposed to deliver space plans to Dialog. Suggest we
talk to Bodenlos immediately since our improvements are minimal and do not
include any hard walls, etc.
Paragraph 1(b). If we had hard wall improvements, we need to have permission of
Sublessor and Master Lessor. Would also need permits, licenses, etc.
Paragraph 1(e). For mechanical work, need to use Newcomb Mechanical; for
electric: Access Electric.
Paragraph 3. Indicates that the tenant improvement allowance may be applied to
"payments in respect of architectural and engineering fees, consultants, legal
fees, moving expenses, equipment or communication requirements and hard costs
of construction in connection with the Improvement Work. Improvement Work is
defined as the construction, furnishing and installation of Sublessee's Initial
Improvements which is defined as all improvements, equipment or fixtures that
are necessary for the Sublessee's use and occupancy of the Premises. Thus, it
appears that I-Storm has some latitude on what to include in such costs (e.g.
telephone work, repositioning of cubicals, possibly the set-up of our own
workstations, etc.) It would not include the cost to move from Cowper to El
Camino.
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WORKSTATION VERBAL AGREEMENT
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Per Bob Tomz telephone conversation with Victor Cohen (Dialog CFO), work
stations will be rented to I-Storm at rate of $1,000 per month for 30 stations
($900 if 20 stations). I-Storm would be responsible for relocating any
workstations from one area to another. Dialog would be responsible for taking
out any stations not wanted and for repairing those stations which were
canalbalized.
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[LOGO]
EXHIBIT A
LEASE BETWEEN
DIALOG INFORMATION SERVICES, INC., AND
SOBRATO DEVELOPMENT COMPANIES #850
Section Page #
------- ------
Parties 1
Definitions 1
Parcel Map 1
Land 1
Building 1
Common Area 1
Tenancy-In-Common Agreement 1
Premises 1
Premises 1
Use 1
Term and Rental 2
Rental Adjustment 2
Early Occupancy 2
Late Charges 2
Possession 3
Acceptance of Possession and Covenants to Surrender 3
Uses Prohibited 4
Alterations and Additions 4
Maintenance of Premises 4
Tenant's Obligations 4
Landlord's Obligations 5
Amortization of Certain Capital Replacements 5
Hazard Insurance 5
Tenant's Use 5
Landlord's Insurance 6
Tenant's Insurance 6
Waiver 6
Taxes 6
Utilities 7
Abandonment 7
Free From Liens 7
Compliance With Governmental Regulations 7
Toxic Waste and Environmental Damage 7
Tenant's Responsibility 7
Tenant's Indemnity Regarding Hazardous Materials 8
Actual Release by Tenant 8
Landlord's Indemnity Regarding Hazardous Materials 9
Environmental Monitoring 9
Indemnity 9
Advertisements and Signs 10
Attorney's Fees 10
Tenant's Default 10
Remedies 10
Right to Re-enter 11
Abandonment 11
No Termination 11
Surrender of Lease 11
This paragraph intentionally left blank 12
Landlord's Default 12
Notices 12
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Entry by Landlord 12
Destruction of Premises
Destruction by an Insured Casualty 12
Destruction by an Uninsured Casualty 13
Destruction during the Last Year of the Lease Term 13
Assignment or Sublease 13
Consent by Landlord 13
Assignment or Subletting Consideration 14
No Release 14
Effect of Default 14
Permitted Transfers 14
Condemnation 14
Effects of Conveyance 15
Subordination 15
Waiver 15
Holding Over 16
Successors and Assigns 16
Estoppel Certificates 16
Option to Extend the Lease Term 16
Grant and Exercise of Option 16
Determination of Fair Market Rental 17
Resolution of a Disagreement over the Fair Market Rental 17
Options 18
Quiet Enjoyment 18
Brokers 18
Landlord's Liability 18
Authority of Parties 18
Transportation Demand Management programs 18
Right Of First Offering To Purchase 18
Dispute Resolution 19
Miscellaneous Provisions 19
Rent 19
This paragraph intentionally left blank 19
Performance by Landlord 19
Interest 20
Rights and Remedies 20
Survival of Indemnities 20
Severability 20
Choice of Law 20
Time 20
Entire Agreement 20
Representations 20
Headings 20
Exhibits 20
Exhibit "A" - Parcel Map 21
Exhibit "B" - Tenancy In Common and Maintenance Agreement 22
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[GRAPHIC]
1. PARTIES: THIS LEASE, is entered into on this 10th day of MARCH, 1994,
between SOBRATO DEVELOPMENT COMPANIES #850, a California Limited Partnership,
whose address is 10600 North De Anza Boulevard, Suite 200, Cupertino, CA 95014
and DIALOG INFORMATION SERVICES, INC., a California Corporation, whose address
is 3460 Hillview Avenue, Palo Alto, CA 94304, hereinafter called respectively
Landlord and Tenant.
2. DEFINITIONS:
A. PARCEL MAP. The term "Parcel Map" shall mean that certain
subdivision map entitled "Tract No. 7813 - Skyview" which map was filed for
record in the Office of the Recorder of Santa Clara County, California on the
10th day of June, 1986, Book 561, pages 1,2,3, and 4. Page 2 of the Parcel Map
is attached hereto as Exhibit "A"
B. LAND. The term "Land" shall mean that certain real property more
particularly described as Lot 1 on the Parcel Map.
C. BUILDING. The term "Building" shall mean that seven (7) story
concrete and steel building situated on the Land containing 133,500 square feet
and all interior improvements existing therein.
D. COMMON AREA. The term "Common Area" shall mean (i) the site area
surrounding the Building on Lot 1 and (ii) that certain real property beneath
Lot 1 described as Lot 2 on the Parcel Map consisting of a three (3) level
underground garage shared by Landlord as the owner of Lot 1 and the owners of
lots 3 through 7 inclusive.
E. TENANCY-IN-COMMON AGREEMENT. The term "Tenancy-In Common Agreement"
shall mean that certain Tenancy-In-Common and Maintenance Agreement,
Declaration of Covenants, Conditions and Restrictions and Grant of Easements
recorded June 10, 1986 as amended September 8, 1986, attached hereto as Exhibit
"B".
F. PREMISES. The term "Premises" shall mean (i) the Land; (ii) the
Building; and (iii) all of Landlord's rights with respect to the Common Area as
more particularly described in the Tenancy-In-Common Agreement.
3. PREMISES: Landlord hereby leases the Premises to Tenant, and Tenant
hires the Premises from Landlord. Landlord also hereby assigns to Tenant
for the term of this Lease all of Landlord's rights in and to the Common
Area as the owner of Lot 1 under the Tenancy in Common Agreement. Tenant
shall perform the duties of Landlord as the Managing Owner under such
agreement until Lots 3 through 7 (the "Adjacent Properties") are developed
at which time Landlord shall resume the duties of the Managing Owner.
Notwithstanding the terms of the Tenancy in Common Agreement, Tenant
shall be responsible for 100% of the variable costs of maintaining the
garage (e.g. sweeping, security, etc.) until the Adjacent Properties are
developed and the garage is shared with the other lot owners. The fixed
costs associated with the garage (e.g. taxes and insurance) shall be
prorated pursuant to section 1.9 of the Tenancy in Common Agreement at all
times during the Lease Term.
Landlord reserves the right to make changes to the Common Area and
construct additional buildings on the Adjacent Properties provided such changes
to do materially affect Tenant's access to the Premises or reduce the parking
available to Tenant.
4. USE: Tenant shall use the Premises only for the following purposes
and
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shall not change the use of the Premises without the prior written consent of
Landlord: Office, research and development, marketing, customer training, data
center, light manufacturing, storage and other lawful office related uses.
Tenant shall have the right to erect satellite/microwave transmission devices
on the roof of the Building provided such devices are installed in compliance
with the provisions of paragraph 10 of the Lease. Landlord makes no
representation or warranty that any specific use of the Premises desired by
Tenant is permitted pursuant to any Laws.
5. TERM AND RENTAL: The term ("Lease Term") shall be for one hundred
twenty (120) months, commencing on the 23rd day of January, 1995 ("Commencement
Date"), and ending on the 22nd day of January, 2005, ("Expiration Date"). In
addition to all other sums payable by Tenant under this Lease, Tenant shall pay
as base monthly rent ("Base Monthly Rent") for the Premises, as increased
pursuant to paragraph 4(A) below, the sum of One Hundred Sixty Thousand Two
Hundred and No/100 Dollars ($160,200.00). Base Monthly Rent shall be due on or
before the first day of each calendar month during Lease Term. All sums payable
by Tenant under this Lease shall be paid in lawful money of the United States
of America, without offset or deduction, and shall be paid to Landlord at the
address specified in paragraph 1 of this Lease or at such place or places as
may be designated from time to time by Landlord. Base Monthly Rent for any
period less than a calendar month shall be a pro rata portion of the monthly
installment.
A. RENTAL ADJUSTMENT: Beginning thirty (30) months after the
Commencement Date, and every thirty (30) months thereafter, the then payable
Base Monthly Rent shall be subject to adjustment based on the increase, if any,
in the Consumer Price Index ("Adjustment Date"). The basis for computing the
adjustment shall be the U.S. Department of Labor, Bureau of Labor Statistic's
Consumer Price Index for All Urban Consumers, All Items, 1982-84=100, for the
San Francisco-Oakland-San Jose area ("Index"). The Index most recently
published preceding the commencement of the Lease (or previous Adjustment Date,
as applicable), shall be considered the "Base Index". If the Index most
recently published preceding the Adjustment Date ("Comparison Index") is
greater than the Base Index, the then payable Base Monthly Rent shall be
increased by multiplying the then payable Base Monthly Rent by a fraction, the
numerator of which is the Comparison Index and the denominator of which is the
Base Index. Notwithstanding any subsequent decrease in the Index, the increase
in the CPI for any calendar year shall never be less than three percent (3%)
per year nor more than six percent (6%) per year. On adjustment of the Base
Monthly Rent Landlord shall notify Tenant by letter stating the new Base
Monthly Rent. Landlord's calculation of the Base Monthly Rent escalation shall
be conclusive and binding unless Tenant objects to said calculation within a
thirty (30) day period following receipt of such determination from Landlord.
If the Index base year is changed so that it differs from 1982-84=100, the
Index shall be converted in accordance with the conversion factor published by
the United States Department of Labor, Bureau of Labor Statistics. If the Index
is discontinued or revised during the Lease Term, such other government index
or computation with which it is replaced shall be used in order to obtain
substantially the same result as would be obtained if the index had not been
discontinued or revised.
B. EARLY OCCUPANCY: Tenant shall be allowed to occupy the Premises prior
to Commencement Date from and after November 15, 1994, but not earlier that
November 15, 1994. In the event Tenant elects to occupy the Premises prior to
the Commencement Date ("Early Occupancy Period"), such occupancy shall be
subject to all the terms and conditions of the Lease, except that no monthly
rent, property taxes, property insurance or exterior maintenance shall be due or
payable by Tenant during the Early Occupancy Period. Tenant shall, however, be
responsible for the payment of any utilities, janitorial or security services
during the Early Occupancy Period unless Tenant is occupying the building
solely for the purposes of completing Alterations to the Building in which
event no utility payments shall be due during this period.
6. LATE CHARGES: Tenant hereby acknowledges that late payment by Tenant to
Landlord of Base Monthly Rent and other sums due hereunder will cause Landlord
to incur costs not contemplated by this Lease, the exact amount of which will
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be extremely difficult to ascertain. Such costs include, but are not limited
to, administrative, processing, accounting charges, and late charges, which may
be imposed on Landlord by the terms of any contract, revolving credit, mortgage
or trust deed covering the Premises. Accordingly, if any installment of Base
Monthly Rent or any other sum due from Tenant shall not be received by Landlord
or Landlord's designee when due, Tenant shall pay to Landlord a late charge
equal to five (5%) percent of such overdue amount which late charge shall be
due and payable on the same date that the overdue amount in question was due.
Landlord agrees to waive said late charge in the event all amounts set forth in
any notice served upon Tenant by Landlord to pay rent or quit in connection
with the overdue amount are paid in full by cashier's check within five (5)
days after Landlord's service upon Tenant of such notice to quit or pay rent.
The parties hereby agree that such late charge represents a fair and reasonable
estimate of the costs Landlord will incur by reason of late payment by Tenant.
Acceptance of such late charge by Landlord shall in no event constitute a
waiver of Tenant's default with respect to such overdue amount, nor prevent
Landlord from exercising any of the other rights and remedies granted
hereunder.
IT IS FURTHER MUTUALLY AGREED BETWEEN THE PARTIES AS FOLLOWS:
7. POSSESSION: If Landlord, for any reason whatsoever, cannot deliver
possession of the said Premises to Tenant by the Commencement Date, this Lease
shall not be void or voidable, and, except as provided in this paragraph 7,
Landlord shall not be liable to Tenant for any loss or damage resulting
therefrom. In such event the Commencement Date and Expiration Date of the Lease
and all other dates affected thereby shall be revised to conform to the date of
Landlord's delivery of possession. Notwithstanding the foregoing, (i) if
Landlord has not delivered possession of the Premises to Tenant within thirty
(30) days of the date Tenant requests possession, Tenant shall be entitled to
rental abatement hereunder of one (1) day's rent for each day for which
possession is not delivered; and (ii) if Landlord has not delivered possession
of the Premises to Tenant within ninety (90) days of the date Tenant requests
possession, Tenant, upon written notice to Landlord, shall be entitled to
terminate this Lease without further liability to Landlord. Pursuant to the
provisions of paragraph 5(B), in no event shall Tenant be entitled to request
possession earlier that November 15, 1994.
8. ACCEPTANCE OF POSSESSION AND COVENANTS TO SURRENDER: Prior to September
1, 1994, Tenant shall complete an inspection of the building mechanical and
operating systems by contractors selected by Landlord and Tenant. Landlord
shall, at Landlord's sole cost and expense, perform any repair work identified
in such inspection reports to ensure that the Premises are in good operating
condition and repair prior to the Commencement Date. At the conclusion of such
work, Tenant shall accept the Premises as being in good and sanitary order,
condition and repair and accepts the Premises and the other improvements in
their present condition. Tenant further agrees on Expiration Date, or on the
sooner termination of this Lease, to surrender the Premises to Landlord in good
condition and repair, reasonable wear and tear excepted. "Good condition"
shall mean that the interior walls, floors, suspended ceilings, and carpeting
within the Premises will be cleaned to the same condition as existed at the
commencement of the Lease, reasonable wear and tear excepted. "Reasonable wear
and tear" shall mean normal wear of the Premises expected over the duration of
the Lease Term on, including but not limited to, the carpeting, walls, ceiling
tiles, fixtures and operating systems and equipment. Tenant shall ascertain from
Landlord within thirty (30) days before the Expiration Date whether Landlord
desires to have the Premises or any part or parts thereof restored to their
condition as of the Commencement Date or to cause Tenant to surrender all
Alterations in place to Landlord. If Landlord shall so desire, then Tenant
shall remove such Alterations as Landlord may require and shall repair and
restore said Premises or such part or parts thereof before the Expiration Date
at Tenant's sole cost and expense. Tenant on or before the Expiration Date or
sooner termination of this Lease, shall remove all its personal property and
trade fixtures from the Premises, and all property and fixtures not so removed
shall be deemed to be abandoned by Tenant. If the Premises are not surrendered
at the Expiration Date or sooner termination of this Lease in the condition
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required by this paragraph, Tenant shall indemnify, defend, and hold harmless
Landlord against loss or liability resulting from delay by Tenant in so
surrendering the Premises including, without limitation, any claims made by any
succeeding tenant founded on such delay.
9. USES PROHIBITED: Tenant shall not commit, or suffer to be committed,
any waste upon the said Premises, or any nuisance, or other act or thing which
may disturb the quiet enjoyment of any other tenant in or around the Premises
or allow any sale by auction upon the Premises, or allow the Premises to be
used for any unlawful or objectionable purpose, or place any loads upon the
floor, walls, or ceiling which endanger the structure, or use any machinery or
apparatus which will in any manner vibrate or shake the Premises, or place any
harmful liquids, waste materials, or hazardous materials in the drainage system
of, or upon or in the soils surrounding the Building. No materials, supplies,
equipment, finished products or semi-finished products, raw materials or
articles of any nature or any waste materials, refuse, scrap or debris shall be
stored upon or permitted to remain on any portion of the Premises outside of
the Building proper without Landlord's prior approval, which approval may be
withheld in its sole discretion.
10. ALTERATIONS AND ADDITIONS: Tenant intends to make certain alterations
and additions to the existing interior improvements prior to the Commencement
Date. Landlord agrees to pay Tenant on the Commencement Date the sum of Thirty
Thousand and No/100 Dollars ($30,000.00) towards Tenant's planning and design
fees related to this work.
Tenant shall be entitled without obtaining Landlord's consent after
initial occupancy, to make any alteration or addition to the Premises
("Alterations") which (i) does not affect the structure of the Building, (ii)
cost does not exceed $50,000 per alteration nor an aggregate of $100,000 in any
twelve (12) month period. All other Alterations shall require Landlord's
consent. Tenant shall, at its sole cost and expense, prepare and deliver to
Landlord the proposed architectural and structural plans for all such
Alterations. In the event the Alterations require Landlord's approval as
provided above, Landlord agrees to either (i) approve such Alterations or (ii)
or provide the basis for disapproval within fifteen (15) days of receipt of the
plans. Landlord agrees not to unreasonably withhold approval of any
Alterations. Landlord's failure to respond within such fifteen (15) day period
shall be deemed approval of the Alterations. At the time of consent, Landlord
agrees to advise Tenant whether Landlord will require remove of such
Alterations at the expiration of the Lease Term. In the event Landlord requires
removal, any salvage value of such Alterations shall belong to Tenant.
After having obtained Landlord's consent, Tenant agrees that it shall
not proceed to make such Alterations until (i) Tenant has obtained all required
governmental approvals and permits, and (ii) Tenant has provided Landlord
reasonable security, in form reasonably approved by Landlord, to protect
Landlord against mechanics' lien claims. Tenant further agrees to provide
Landlord (i) written notice of the anticipated start date and actual start date
of the work, and (ii) a complete set of as-built drawings. All Alterations
shall be constructed in compliance with applicable buildings codes and laws.
Any Alterations, except movable furniture and trade fixtures, shall become at
once a part of the realty and belong to Landlord. Alterations which are not to
be deemed as trade fixtures shall include heating, lighting, electrical
systems, air conditioning, partitioning, carpeting, or any other installation
which has become an integral part of the Premises. All Alterations shall be
maintained, replaced or repaired by Tenant at Tenant's sole cost and expense.
11. MAINTENANCE OF PREMISES:
A. TENANT'S OBLIGATIONS: Tenant shall, at its sole cost, keep and
maintain, repair and replace, said Premises and appurtenances and every part
hereof, including but not limited to, exterior walls, roof, glazing, sidewalks,
parking areas, elevator, plumbing, electrical and HVAC systems, and all the
Tenant Improvements in good and sanitary order, and repair. Tenant shall
provide Landlord with a copy of a
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service contract between Tenant and (i) a licensed air-conditioning and heating
contractor which contract shall provide for bi-monthly maintenance of all air
conditioning and heating equipment at the Premises; and (ii) a licensed
elevator maintenance contractor which contract shall provide for monthly
maintenance of all elevator related systems. Tenant shall pay the cost of all
air-conditioning heating, and elevator equipment repairs or replacements which
are either excluded from such service contract or any existing equipment
warranties. All wall surfaces and floor tile are to be maintained in an as good
a condition as when Tenant took possession free of holes, gouges, or
defacements.
Tenant shall also be responsible, at its sole cost and expense for the
preventive maintenance of the membrane of the roof, which responsibility shall
be deemed properly discharged if (i) Tenant contracts with a licensed roof
contractor who is reasonably satisfactory to both Tenant and Landlord, at
Tenant's sole cost, to inspect the roof membrane at least every six (6) months,
with the first inspection due the sixth (6th) month after the Commencement
Date, and (ii) Tenant performs, at Tenant's sole cost, all preventive
maintenance recommendations made by such contractor within a reasonable time
after such recommendations are made. Such preventive maintenance might include
acts such as clearing storm gutters and drains, removing debris from the roof
membrane, trimming trees overhanging the roof membrane, applying coating
materials to seal roof penetrations, repairing blisters, and other routine
measures. Tenant shall provide to Landlord a copy of such preventive
maintenance contract and paid invoices for the recommended work. Tenant agrees,
at its expense, to water, maintain and replace, when necessary, any shrubbery
and landscaping.
B. LANDLORD'S OBLIGATIONS: Landlord shall, at its sole cost and
expense, maintain in good condition, order, and repair, and replace as and when
necessary, the foundation, floor slabs, columns, exterior load bearing walls
and roof structure of the Building. Landlord shall also keep the Common Area
and any part thereof, in good and sanitary order, condition and repair. Tenant
shall reimburse Landlord for the amount payable by the owner of Lot 1 (as set
forth in the Tenancy-In-Common Agreement) for maintenance and repair of the
Common Area under the terms of the Tenancy-In-Common Agreement; provided,
however, that if Tenant is required to reimburse to Landlord in excess of Fifty
Thousand Dollars ($50,000) for any particular capital improvement or
replacement in the Common Area, then Tenant may pay its share of such costs
pursuant to the provisions of paragraph 11(C) below.
C. AMORTIZATION OF CERTAIN CAPITAL REPLACEMENTS: Notwithstanding the
foregoing, in the event a capital replacement is required during the Lease Term
of the equipment related to building systems or to the roof membrane and such
replacement costs in excess of (i) Fifty Thousand and No/100 Dollars
($50,000.00) per occurrence, or (ii) One Hundred Thousand and No/100 Dollars
($100,000.00) in the aggregate over any twelve (12) calendar month period,
Tenant shall be required to pay (x) the first Fifty Thousand and No/100 Dollars
($50,000.00) of the cost and (y) that portion of the cost equal to the product
of such remaining cost multiplied by a fraction, the numerator of which is the
number of years remaining in the Lease Term, the denominator of which is the
useful life (in years) of the replacement, which cost shall be amortized over
the remaining Lease Term with interest at eight percent (8%). Landlord shall
pay the balance of such cost.
12. HAZARD INSURANCE:
A. TENANT'S USE: Tenant shall not use, or permit said Premises, or
any part thereof, to be used, for any purpose other than that for which the
said Premises are hereby leased; and no use shall be made or permitted to be
made of the said Premises, nor acts done, which will cause an increase in
premiums or a cancellation of any insurance policy covering said Premises, or
any part thereof, nor shall Tenant sell or permit to be kept, used or sold, in
or about said Premises, any article which may be prohibited by the standard
form of fire insurance policies. Subject to the provisions of paragraph 17,
Tenant shall, at its sole cost and expense, comply with any and all
requirements, pertaining to said Premises, of any insurance organization or
company,
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necessary for the maintenance of reasonable fire and public liability
insurance, covering said Premises and appurtenances.
B. LANDLORD'S INSURANCE: Landlord agrees to purchase and keep in
force fire, extended coverage, owner's liability, and 12 month rental loss
insurance. The amount of the said insurance shall not exceed the replacement
cost of the Building (not including any Tenant Improvements or Alterations paid
for by Tenant) as determined by Landlord's insurance company's appraisers. The
Tenant agrees to pay to the Landlord as additional rent, on demand, the full
cost of said insurance as evidenced by insurance billings to the Landlord, and
in the event of damage covered by said insurance, the amount of any deductible
under such policy. Payment shall be due to Landlord within ten (10) days after
written invoice to Tenant. Landlord agrees to competitively bid such insurance
not less than once every two (2) years. It is understood and agreed that
Tenant's obligation under this paragraph will be prorated to reflect the
commencement and termination dates of this Lease. The parties reserve the right
to carry earthquake insurance in the future if such cost becomes reasonable as
determined by mutual agreement of Landlord and Tenant.
C. TENANT'S INSURANCE: Tenant, at its sole cost, agrees to insure its
personal property, Tenant Improvements paid for by Tenant, and Alterations for
their full replacement value (without depreciation) and to obtain worker's
compensation and public liability and property damage insurance for occurrences
within the Premises with combined limits for bodily injury and property damage
of not less than $1,000,000.00 per occurrence and a general aggregate limit of
not less than $5,000,000.00. Tenant shall name Landlord and Landlord's lender
as an additional insured, shall deliver a copy of the policies and renewal
certificates to Landlord. All such policies shall provide for thirty (30) days'
prior written notice to Landlord of any cancellation, termination, or reduction
in coverage. Notwithstanding the above, Landlord retains the right to have
Tenant provide other forms of insurance which may be reasonably required to
cover future risks.
D. WAIVER: Landlord and Tenant hereby waive any and all rights each
may have against the other on account of any loss or damage occasioned to the
Landlord or the Tenant as the case may be, or to the Premises or its contents,
and which may arise from any risk covered by their respective insurance
policies (or which would have been covered had such insurance policies been
maintained in accordance with this Lease), as set forth above. The parties
shall use their reasonable efforts to obtain from their respective insurance
companies a waiver of any right of subrogation which said insurance company may
have against the Landlord or the Tenant, as the case may be.
13. TAXES: Tenant shall be liable for, and shall pay prior to delinquency,
all taxes and assessments levied against personal property and trade or
business fixtures, and agrees to pay, as additional rental, all real estate
taxes and assessment installments (special or general) or other impositions or
charges which may be levied on the Premises, upon the occupancy of the Premises
and including any substitute or additional charges which may be imposed during,
or applicable to the Lease Term including real estate tax increases due to a
sale or other transfer of the Premises, as they appear on the City and County
tax bills during the Lease Term, and as they become due. It is understood and
agreed that Tenant's obligation under this paragraph will be prorated to
reflect the Commencement and Expiration Dates. If, at any time during the Lease
Term a tax, excise on rents, business license tax, or any other tax, however
described, is levied or assessed against Landlord, as a substitute or addition
in whole or in part for taxes assessed or imposed on land or Buildings, Tenant
shall pay and discharge his pro rata share of such tax or excise on rents or
other tax before it becomes delinquent, except that this provision is not
intended to cover net income taxes, inheritance, gift or estate tax imposed
upon the Landlord. In the event that a tax is placed, levied, or assessed
against Landlord and the taxing authority takes the position that the Tenant
cannot pay and discharge his pro rata share of such tax on behalf of the
Landlord, then at the sole election of the Landlord, the Landlord may increase
the rental charged hereunder by the exact amount of such tax and Tenant shall
pay such increase as additional rent hereunder. If by virtue of any application
or proceeding brought by
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or on behalf of Landlord, there results a reduction in the assessed value of
the Building during the Lease Term, Tenant agrees to reimburse Landlord
its out of pocket costs incurred by Landlord in connection with such
application or proceeding.
Notwithstanding the foregoing, if property taxes increase during the
Lease Term as a result of a reassessment due to a voluntary change of
ownership, Tenants shall be responsible for payment of the resulting property
tax increase as follows: during the first twelve month period following the
transfer, Tenant shall be responsible for payment of twenty five percent (25%)
of the tax increase; during the second twelve month period following the
transfer, Tenant shall be responsible for payment of fifty percent (50%) of the
tax increase, during third twelve month period following the transfer, Tenant
shall be responsible for payment of seventy five percent (75%) of the tax
increase, thereafter Tenant shall be responsible for payment of the entire tax
increase.
14. UTILITIES: Tenant shall pay directly to the providing utility all
water, gas, heat, light, power, telephone and other utilities supplied to the
Premises. Landlord shall not be liable for a loss of or injury to property,
however occurring, through or in connection with or incidental to furnishing or
failure to furnish any utilities to the Premises and Tenant shall not be
entitled to abatement or reduction of any portion of the Base Monthly Rent so
long as any failure to provide and furnish the utilities to the Premises
is due to a cause beyond the Landlord's reasonable control.
15. ABANDONMENT: Tenant shall not abandon the Premises at any time during
the Lease Term; and if Tenant shall abandon, surrender said Premises, or be
dispossessed by process of law, or otherwise, any personal property belonging
to Tenant and left on the Premises shall be deemed to be abandoned, at the
option of Landlord, except such property as may be mortgaged to Landlord.
Tenant shall have the right to vacate all of the Premises for up to thirty (30)
days in any given year without being in default under the Lease. Further Tenant
shall have the right to vacate any portion of the Building during the Lease
Term, regardless of duration, without being in default under the Lease, so long
as Tenant continues to occupy a portion of the Building and pays the rent and
fulfills its other obligations under the Lease.
16. FREE FROM LIENS: Tenant shall keep the Premises free from any liens
arising out of any work performed, materials furnished, or obligations incurred
by Tenant or claimed to have been performed for Tenant. In the event Tenant
fails to discharge any such lien within ten (10) days after receiving notice of
the filing, Landlord shall be entitled to discharge such lien at Tenant's
expense and all resulting costs incurred by Landlord, including attorney's fees
shall be due from Tenant as additional rent.
17. COMPLIANCE WITH GOVERNMENTAL REGULATIONS: Tenant shall, at its sole
cost and expense, comply with all of the requirements of all Municipal, State
and Federal authorities now in force, or which may hereafter be in force,
pertaining to the said Premises, and shall faithfully observe in the use of the
Premises all Municipal ordinances and State and Federal statutes now in force
or which may hereafter be in force. The judgment of any court of competent
jurisdiction, or the admission of Tenant in any action or proceeding against
Tenant, whether Landlord be a party thereto or not, that Tenant has violated
any such ordinance or statute in the use of the Premises, shall be conclusive
of that fact as between Landlord and Tenant. Notwithstanding the foregoing, if
any improvement to the Premises is required as a result of any future laws or
regulations affecting the Premises not related to Tenant's specific use of the
Premises, and provided further said improvement is not required because of
Alterations made by Tenant, the cost of such improvements shall be allocated
between Landlord and Tenant such that Tenant shall pay to Landlord upon
completion of such improvement, the portion of the cost thereof equal to the
remaining number of years in the lease term divided by the anticipated useful
life of such improvement.
18. TOXIC WASTE AND ENVIRONMENTAL DAMAGE:
A. TENANT'S RESPONSIBILITY: Without the prior written consent of
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Landlord, Tenant shall not bring, use, or permit upon the Premises, or
generate, create, release, emit, or dispose (nor permit any of the same) from
the Premises any chemicals, toxic or hazardous gaseous, liquid or solid
materials or waste, including without limitation, material or substance having
characteristics of ignitability, corrosivity, reactivity, or toxicity (other
than small quantities of toxic substances such as photocopy toner, photography
chemicals and the like typically used by office users) or substances or
materials which are listed on any of the Environmental Protection Agency's lists
of hazardous wastes or which are identified in Sections 66680 through 66685 of
Title 22 of the California Administrative Code as the same may be amended from
time to time ("Hazardous Materials"). In order to obtain consent, Tenant shall
deliver to Landlord its written proposal describing the toxic material to be
brought onto the Premises, measures to be taken for storage and disposal
thereof, safety measures to be employed to prevent pollution of the air, ground,
surface and ground water. Landlord's approval may be withheld in its reasonable
judgment. In the event Landlord consents to Tenant's use of Hazardous Materials
on the Premises, Tenant represents and warrants that Tenant will (i) adhere to
all reporting and inspection requirements imposed by Federal, State, County or
Municipal laws, ordinances or regulations and will provide Landlord a copy of
any such reports or agency inspections, (ii) obtain and provide Landlord copies
of all necessary permits required for the use and handling Hazardous
Materials on the Premises, (iii) enforce Hazardous Materials handling and
disposal practices consistent with industry standards, (iv) surrender the
Premises free from any Hazardous Materials arising from Tenant's bringing,
using, permitting, generating, emitting or disposing of Hazardous Materials, and
(v) properly close the facility with regard to Hazardous Materials including the
removal or decontamination of any process piping, mechanical ducting, storage
tanks, containers, or trenches which have come into contact with Hazardous
Materials and obtain a closure certificate from the local administering agency
prior to the Expiration Date.
B. TENANT'S INDEMNITY REGARDING HAZARDOUS MATERIALS: Tenant shall
comply, at its sole cost, with all laws pertaining to, and shall indemnify and
hold Landlord harmless from any claims, liabilities, costs or expenses incurred
or suffered by Landlord arising from such bringing, using, permitting,
generating, emitting or disposing of Hazardous Materials by Tenant. Tenant's
indemnification and hold harmless obligations include, without limitation, (i)
claims, liability, costs or expenses resulting from or based upon
administrative, judicial (civil or criminal) or other action, legal or
equitable, brought by any private or public person under common law or under
the Comprehensive Environmental Response, Compensation and Liability Act of
1980 ("CERCLA"), the Resource Conservation and Recovery Act of 1980 ("RCRA") or
any other Federal, State, County or Municipal law, ordinance or regulation,
(ii) claims, liabilities, costs or expenses pertaining to the identification,
monitoring, cleanup, containment, or removal of Hazardous Materials from soils,
riverbeds or aquifers including the provision of an alternative public drinking
water source, and (iii) all costs of defending such claims.
C. ACTUAL RELEASE BY TENANT: Tenant agrees to notify Landlord of any
lawsuits which relate to, or orders which relate to the remedying of, the
actual release of Hazardous Materials on or into the soils or groundwater at or
under the Premises. Tenant shall also provide to Landlord all notices required
by Section 25359.7(b) of the Health and Safety Code and all other notices
required by law to be given to Landlord in connection with Hazardous Materials.
Without limiting the foregoing, Tenant shall also deliver to Landlord, within
twenty (20) days after receipt thereof, any written notices from any
governmental agency alleging a material violation of, or material failure to
comply with, any federal, state or local laws, regulations, ordinances or
orders, the violation of which of failure to comply with, poses a foreseeable
and material risk of contamination of the groundwater or injury to humans
(other than injury solely to Tenant, its agents and employees within the
Improvements on the Property).
In the event of any release on or into the Premises or into the soil
or groundwater under the Premises of any Hazardous Materials used, treated,
stored or disposed of by Tenant, Tenant agrees to comply, at its sole cost and
expense, with all laws, regulations, ordinances and orders of any federal,
state or local agency relating to
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the monitoring or remediation of such Hazardous Materials. In the event of any
such release of Hazardous Materials, Tenant agrees to meet and confer with
Landlord and its Lender to attempt to eliminate and mitigate any financial
exposure to such Lender and resultant exposure to Landlord under California
Code of Civil Procedure section 736(b) as a result of such release and promptly
to take reasonable monitoring, cleanup and remedial steps given, inter alia,
the historical uses to which the Property has and continues to be used, the
risks to public health posed by the release, the then available technology and
the costs of remediation, cleanup and monitoring, consistent with acceptable
customary practices for the type and severity of such contamination and all
applicable laws. Nothing in the preceding sentence shall eliminate, modify or
reduce the obligation of Tenant under paragraph 20(B) of this Lease to
indemnify and hold Landlord harmless from any claims liabilities, costs or
expenses incurred or suffered by Landlord as provided in paragraph 20(B) of
this Lease. Tenant shall provide Landlord prompt written notice of Tenant's
monitoring, cleanup and remedial steps.
In the absence of an order of any federal, state or local governmental
or quasi-governmental agency relating to the cleanup, remediation or other
response action required by applicable law, any dispute arising between
Landlord and Tenant concerning Tenant's obligation to Landlord under this
Paragraph C concerning the Level, method, and manner of cleanup, remediation or
response action required in connection with such a release of Hazardous
Materials shall be resolved by mediation and/or arbitration pursuant to the
provisions of paragraph 44 of this Lease.
D. LANDLORDS INDEMNITY REGARDING HAZARDOUS MATERIALS: Landlord shall
indemnify and hold Tenant harmless from any claims, liabilities, costs or
expenses incurred or suffered by Tenant related to the removal,
investigation, monitoring or remediation of Hazardous Materials which are
present on the Premises as of the Commencement Date. Landlord's indemnification
and hold harmless obligations include, without limitation, (i) claims,
liability, costs or expenses resulting from or based upon administrative,
judicial (civil or criminal) or other action, legal or equitable, brought by
any private or public person under common law or under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), the
Resource Conservation and Recovery Act of 1980 ("RCRA") or any other Federal,
State, County or Municipal law, ordinance or regulation, (ii) claims,
liabilities, costs or expenses pertaining to the identification, monitoring,
cleanup, containment, or removal of Hazardous Materials from soils, riverbeds
or aquifers including the provision of an alternative public drinking water
source, and (iii) all costs of defending such claims. In no event shall
Landlord be liable for any consequential damages suffered or incurred by Tenant
as a result of any such contamination.
E. ENVIRONMENTAL MONITORING: Landlord and its agents shall have the
right, at Landlord's sole cost and expense, to inspect, investigate, sample
and/or monitor the Premises, including any air, soil, water, groundwater or
other sampling or any other testing, digging, drilling or analysis to determine
whether Tenant is complying with the terms of this paragraph 18. If Landlord
discovers that Tenant is not in compliance with the terms of this paragraph 18,
any such costs incurred by Landlord, including attorneys' and consultants' fees
shall be due and payable by Tenant to Landlord within five days following
Landlord's written demand therefore.
19. INDEMNITY: As a material part of the consideration to be rendered to
Landlord, Tenant hereby waives all claims against Landlord for damages to
goods, wares and merchandise, and all other personal property in, upon or about
said Premises and for injuries to persons in or about said Premises, from any
cause arising at any time to the fullest extent permitted by law, and Tenant
shall indemnify and hold Landlord exempt and harmless from any damage or injury
to any person, or to the goods, wares and merchandise and all other personal
property of any person, arising from the use of the Premises, Building, and/or
Project by Tenant, its employees, contractors, agents and invitees or from the
failure of Tenant to keep the Premises in good condition and repair, as herein
provided, except to the extent due to the active negligence or willful
misconduct of Landlord. Further, in the event Landlord is made party to any
litigation due to the acts or omission of Tenant, its employees, contractors,
agents and invitees,
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Tenant will indemnify and hold Landlord harmless from any such claim or
liability including Landlord's costs and expenses and reasonable attorney's
fees incurred in defending such claims.
20. ADVERTISEMENTS AND SIGNS: Tenant will not place or permit to be
placed, in, upon or about the said Premises any signs not approved by the city
or other governing authority. Any sign so placed on the Premises shall be
removed by Tenant, at its expense, prior to the Expiration Date or promptly
following the earlier termination of the lease and Tenant shall repair, at its
sole cost and expense, any damage or injury to the Premises caused thereby, and
if not so removed by Tenant then Landlord may have same so removed at Tenant's
expense.
21. ATTORNEY'S FEES: In case a suit or alternative form of dispute
resolution should be brought for the possession of the Premises, for the
recovery of any sum due hereunder, or because of the breach of any other
covenant herein, the losing party shall pay to the prevailing party a
reasonable attorney's fee as part of its costs which shall be deemed to have
accrued on the commencement of such action. In addition, the prevailing party
shall be entitled to recover all costs and expenses including reasonable
attorney's fees incurred by the prevailing party in enforcing any judgment or
award against the other party. The foregoing provision relating to
post-judgment costs is intended to be severable from all other provisions of
this Lease.
22. TENANT'S DEFAULT: The occurrence of any of the following shall
constitute a material default and breach of this Lease by Tenant: a) Any
failure by Tenant to pay any rent under this Lease ten (10) days following
Tenant's receipt of written notice from Landlord that such rent is due under
this Lease and has not been received; b) The abandonment of the Premises by
Tenant; c) A failure by Tenant to observe and perform any other provision of
this Lease to be observed or performed by Tenant, where such failure continues
for thirty (30) days after written notice thereof by Landlord to Tenant;
provided, however, that if the nature of such default is such that the same
cannot reasonably be cured within such thirty (30) day period Tenant shall not
be deemed to be in default if Tenant shall within such period commence such
cure and thereafter diligently prosecute the same to completion; d) The making
by Tenant of any general assignment for the benefit of creditors; the filing
by or against Tenant of a petition to have Tenant adjudged a bankrupt or of a
petition for reorganization or arrangement under any law relating to bankruptcy
(unless, in the case of a petition filed against Tenant, the same is dismissed
after the filing); the appointment of a trustee or receiver to take possession
of substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where possession is not restored to Tenant within
thirty (30) days; or the attachment, execution or other judicial seizure of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where such seizure is not discharged within thirty (30)
days. The notice requirements set forth herein are in lieu of and not in
addition to the notices required by California Code of Civil Procedure Section
1161. Any notice given by Landlord to Tenant pursuant to California Civil Code
1161 with respect to any failure by Tenant to pay rent under this Lease on or
before the date the rent is due shall provide Tenant with a period of no less
than ten (10) days to pay such rent or quit.
A. REMEDIES: In the event of any such default by Tenant, then in
addition to any other remedies available to Landlord at law or in equity,
Landlord shall have the immediate option to terminate this Lease and all rights
of Tenant hereunder by giving written notice of such intention to terminate. In
the event that Landlord shall elect to so terminate this Lease then Landlord
may recover from Tenant: a) the worth at the time of award of any unpaid rent
which had been earned at the time of such termination; plus b) the worth at the
time of award of the amount by which the unpaid rent which would have been
earned after termination until the time of award exceeds the amount of such
rental loss for the same period that Tenant proves could have been reasonably
avoided; plus c) the worth at the time of award of the amount by which the
unpaid rent for the balance of the Lease Term after the time of award exceeds
the amount of such rental loss that Tenant proves could be reasonably avoided;
plus d) any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant's
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failure to perform its obligations under this Lease or which in the ordinary
course of things would be likely to result therefrom, and e) at Landlord's
election, such other amounts in addition to or in lieu of the foregoing as may
be permitted from time to time by applicable California law. The term "rent", as
used herein, shall be deemed to be and to mean the minimum monthly installments
of Base Monthly Rent and all other sums required to be paid by Tenant pursuant
to the terms of this Lease, all other such sums being deemed to be additional
rent due hereunder. As used in (a) and (b) above, the "worth at the time of
award" is to be computed by allowing interest at the rate of the discount rate
of the Federal Reserve Bank of San Francisco plus five (5%) percent per annum.
As used in (c) above, the "worth at the time of award" is to 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 (1%) percent.
B. RIGHT TO RE-ENTER: In the event of any such default by Tenant,
Landlord shall also have the right, with or without terminating this Lease, to
re-enter the Premises and remove all persons and property from the Premises;
such property may be removed and stored in a public warehouse or elsewhere at
the cost of and for the account of Tenant and disposed of by Landlord in any
manner permitted by law.
C. ABANDONMENT: In the event of the abandonment of the Premises by
Tenant or in the event that Landlord shall elect to re-enter as provided in
paragraph 22(B) above or shall take possession of the Premises pursuant to legal
proceeding or pursuant to any notice provided by law, then if Landlord does not
elect to terminate this Lease as provided in paragraph 22(A) above, then the
provisions of California Civil Code Section 1951.4, (Landlord may continue the
lease in effect after Tenant's breach and abandonment and recover rent as it
becomes due, if Tenant has a right to sublet and assign, subject only to
reasonable limitations) as amended from time to time, shall apply and Landlord
may from time to time, without terminating this Lease, either recover all rental
as it becomes due or relet the Premises or any part thereof for such term or
terms and at such rental or rentals and upon such other terms and conditions as
Landlord in its sole discretion may deem advisable with the right to make
alterations and repairs to the Premises. In the event that Landlord shall elect
to so relet, then rentals received by Landlord from such reletting shall be
applied: first, to the payment of any indebtedness other than Base Monthly Rent
due hereunder from Tenant to Landlord; second, to the payment of any cost of
such reletting; third, to the payment of the cost of any alterations and repairs
to the Premises; fourth, to the payment of Base Monthly Rent due and unpaid
hereunder; and the residue, if any, shall be held by Landlord and applied in
payment of future Base Monthly Rent as the same may become due and payable
hereunder. Landlord shall have no obligation to relet the Premises following a
default if Landlord has other available space within the Building or Project.
Should that portion of such rentals received from such reletting during any
month, which is applied by the payment of rent hereunder, be less than the rent
payable during that month by Tenant hereunder, then Tenant shall pay such
deficiency to Landlord immediately upon demand therefor by Landlord. Such
deficiency shall be calculated and paid monthly. Tenant shall also pay to
Landlord, as soon as ascertained, any costs and expenses incurred by Landlord in
such reletting or in making such alterations and repairs not covered by the
rentals received from such reletting.
D. NO TERMINATION: No re-entry or taking possession of the Premises
by Landlord pursuant to 22(B) or 22(C) of this Article 22 shall be construed as
an election to terminate this Lease unless a written notice of such intention be
given to Tenant or unless the termination thereof be decreed by a court of
competent jurisdiction. Notwithstanding any reletting without termination by
Landlord because of any default by Tenant, Landlord may at any time after such
reletting elect to terminate this Lease for any such default.
23. SURRENDER OF LEASE: The voluntary or other surrender of this Lease
by Tenant, or a mutual cancellation thereof, shall not automatically effect a
merger of the Lease with Landlord's ownership of the Premises. Instead, at the
option of Landlord, Tenant's surrender may terminate all or any existing
sublease or subtenancies, or may operate as an assignment to Landlord of any or
all such subleases
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or subtenancies, thereby creating a direct Landlord-Tenant relationship between
Landlord and any subtenants.
24. THIS PARAGRAPH INTENTIONALLY LEFT BLANK:
25. LANDLORD'S DEFAULT: In the event of Landlord's failure to perform any
of its covenants or agreements under this Lease, Tenant shall give Landlord
written notice of such failure and shall give Landlord thirty (30) days or such
other reasonable opportunity to cure or to commence to cure such failure prior
to any claim for breach or for damages resulting from such failure. In addition,
upon any such failure by Landlord, Tenant shall give notice by registered or
certified mail to any person or entity with a security interest in the Premises
("Mortgagee") that has provided Tenant with notice of its interest in the
Premises, and shall provide such Mortgagee a reasonable opportunity to cure such
failure, including such time to obtain possession of the Premises by power of
sale or judicial foreclosure, if such should prove necessary to effectuate a
cure. In no event, however, shall the period of time for Mortgagee to obtain
possession exceed one hundred twenty (120) days. Tenant agrees that each of the
Mortgagees to whom this Lease has been assigned is an expressed third party
beneficiary hereof. Tenant shall not make any prepayment of rent more than one
(1) month in advance without the prior written consent of such Mortgagee. Tenant
waives any right under California Civil Code Section 1950.7 or any other present
or future law to the collection of any payment or deposit from such Mortgagee or
any purchaser at a foreclosure sale of such Mortgagee's interest unless such
Mortgagee or such purchaser shall have actually received and not refunded the
applicable payment or deposit.
26. NOTICES: All notices, demands, requests, or consents required to be
given under this Lease shall be sent in writing by U.S. certified mail, return
receipt requested, or by personal delivery addressed to the party to be notified
at the address for such party specified in paragraph 1 of this Lease, or to such
other place as the party to be notified may from time to time designate by at
least fifteen (15) days prior notice to the notifying party.
27. ENTRY BY LANDLORD: Tenant shall permit Landlord and his agents, upon
prior notice except in the case of emergency, to enter into and upon said
Premises at all reasonable times subject to any security regulations of Tenant
for the purpose of inspecting the same or for the purpose of maintaining the
Premises or for the purpose of making repairs, alterations or additions to any
other portion of said Premises or for the purpose of erecting additional
building(s) and improvements on the land where the Premises are situated, or on
adjacent land owned by Landlord, including the erection and maintenance of such
scaffolding, canopies, fences and props as may be required without any abatement
or reduction of rent or without any liability to Tenant for any loss of
occupation or quiet enjoyment of the Premises thereby occasioned. Tenant shall
permit Landlord and his agents, at any time within one hundred eighty (180) days
prior to the Expiration Date (or at any time during the Lease if Tenant is in
default hereunder), to place upon the Premises "For Lease" signs and exhibit
the Premises to real estate brokers and prospective tenants at reasonable hours.
28. DESTRUCTION OF PREMISES:
A. DESTRUCTION BY AN INSURED CASUALTY: In the event of a partial
destruction of the Premises by a casualty for which Landlord has received
insurance proceeds sufficient to repair the damage or destruction during the
Lease Term from any cause, Landlord shall forthwith repair the same to the
extent of such proceeds, provided such repairs can be made within one hundred
twenty (120) days from the date of receipt of all governmental approvals
necessary under the laws and regulations of State, Federal, County or Municipal
authorities (as reasonably determined by Landlord), and such partial destruction
shall in no way annul or void this Lease, except that Tenant shall be entitled
to a proportionate reduction of Base Monthly Rent and additional rent from the
date of destruction until completion of the repairs, such proportionate
reduction to be based upon the extent to which the making of such repairs shall
interfere with the business carried on by Tenant in the Premises, in the
reasonable
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judgment of Landlord. For purposes of this paragraph "partial destruction"
shall mean destruction of no greater than one-third (1/3) of the replacement
cost of the Premises, including the replacement cost of the Tenant Improvements
paid for by Landlord. In the event the Premises are more than partially
destroyed, or in the event the repairs cannot be made in one hundred twenty
(120) days or the Premises are only partially destroyed but Landlord does not
actually receive insurance proceeds sufficient to repair the damage, Landlord or
Tenant may elect to terminate this Lease within fifteen (15) days of
determination by Landlord of the foregoing. Landlord shall not be required to
restore Alterations or replace Tenant's fixtures or personal property. In
respect to any partial destruction which Landlord is obligated to repair or may
elect to repair under the terms of this paragraph, the provision of Section
1932, Subdivision 2, and of Section 1933, Subdivision 4, of the Civil Code of
the State of California and any other similarly enacted statute are waived by
Tenant and the provisions of this paragraph 28 shall govern in the case of such
destruction.
B. DESTRUCTION BY AN UNINSURED CASUALTY: In the event of a total or
partial destruction of the Premises by an uninsured casualty, the Lease shall
automatically terminate, unless (i) Landlord elects to rebuild, and (ii) the
damage can be repaired within one hundred twenty (120) days.
C. DESTRUCTION DURING THE LAST YEAR OF THE LEASE TERM: In the event
of an insured or uninsured casualty during the last year of the Lease Term which
would take more than sixty (60) days to repair, either Landlord or Tenant shall
have the right to terminate the Lease.
29. ASSIGNMENT OR SUBLEASE:
A. CONSENT BY LANDLORD: In the event Tenant desires to assign this
Lease or any interest therein including, without limitation, a pledge, mortgage
or other hypothecation, or sublet the Premises or any part thereof, Tenant
shall deliver to Landlord executed counterparts of any such agreement and of all
ancillary agreements with the proposed assignee or subtenant, financial
statements, and any additional information as reasonably required by Landlord to
determine whether it will consent to the proposed assignment or sublease. The
notice shall give the name and current address of the proposed
assignee/subtenant, proposed use of the Premises, rental rate and current
financial statement; and upon request to Tenant, Landlord shall be given
additional information as reasonably required by Landlord to determine whether
it will consent to the proposed assignment or sublease. Landlord shall then have
a period of fifteen (15) days following receipt of the foregoing agreement,
statements and additional information within which to notify Tenant in writing
that Landlord elects (i) to permit Tenant to assign or sublet such space to the
named assignee/subtenant on the terms and conditions set forth in the notice, or
(ii) to refuse consent. If Landlord should fail to notify Tenant in writing of
such election within said fifteen (15) day period, Landlord shall be deemed to
have elected option (i) above. Landlord's consent (which must be in writing and
in a form reasonably satisfactory to Landlord) to the proposed assignment or
sublease shall not be unreasonably withheld, provided and upon condition that:
(i) The proposed assignee or subtenant is engaged in a business that is limited
to the use expressly permitted under this Lease; (ii) The proposed assignee or
subtenant is a company with sufficient financial worth and management ability to
undertake the financial obligation of this Lease, and Landlord has been
furnished with reasonable proof thereof; (iii) The proposed assignment or
sublease shall be in form reasonably satisfactory to Landlord; (iv) Tenant shall
reimburse Landlord on demand for any costs that may be incurred by Landlord in
connection with said assignment or sublease, including the costs of making
investigations as to the acceptability of the proposed assignee or subtenant and
legal costs incurred in connection with the granting of any requested consent up
to a maximum amount of $5,000; and (v) Tenant shall not have advertised or
publicized in any way the availability of the Premises without prior notice to
Landlord. In the event all or any one of the foregoing conditions are not
satisfied, Landlord may, in its sole discretion, withhold its consent to the
proposed assignment or sublease.
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B. ASSIGNMENT OR SUBLETTING CONSIDERATION: Any rent or other
economic consideration received by Tenant under any such sublease and assignment
in excess of the rent payable hereunder, after the net unamortized cost of the
Tenant Improvements for which Tenant has itself paid, and reasonable subletting
and assignment costs including lease commissions, shall be divided and paid
fifty percent (50%) to Landlord and fifty percent (50%) to Tenant. Tenant's
obligation to pay over Landlord's portion of the consideration shall constitute
an obligation for additional rent hereunder. The above provisions relating to
Landlord's right to terminate the Lease and relating to the allocation of bonus
rent are independently negotiated terms of the Lease, constitute a material
inducement for the Landlord to enter into the Lease, and are agreed as between
the parties to be commercially reasonable. No assignment or subletting by Tenant
shall relieve Tenant of any obligation under this Lease. Any assignment or
subletting which conflicts with the provisions hereof shall be void.
C. NO RELEASE: Any assignment or sublease shall be made only if and
shall not be effective until the assignee or subtenant shall execute,
acknowledge and deliver to Landlord an agreement, in form and substance
satisfactory to Landlord, whereby the assignee or subtenant shall assume all of
the obligations of this Lease on the part of Tenant to be performed or observed
and shall be subject to all of the covenants, agreements, terms, provisions and
conditions contained in this Lease. Notwithstanding any such sublease or
assignment and the acceptance of rent by Landlord from any subtenant or
assignee, Tenant and any guarantor shall and will remain fully liable for the
payment of the rent and additional rent due, and to become due hereunder, for
the performance of all of the covenants, agreements, terms, provisions and
conditions contained in this Lease on the part of Tenant to be performed and for
all acts and omissions of any licensee, subtenant, assignee or any other person
claiming under or through any subtenant or assignee that shall be in violation
of any of the terms and conditions of this Lease, and any such violation shall
be deemed to be a violation by Tenant. Tenant shall further indemnify, defend
and hold Landlord harmless from and against any and all losses, liabilities,
damages, costs and expenses (including reasonable attorney fees) resulting from
any claims that may be made against Landlord by the proposed assignee or
subtenant or by any real estate brokers or other persons claiming a commission
or similar compensation in connection with the proposed assignment or sublease.
D. EFFECT OF DEFAULT: In the event of Tenant's default, Tenant
hereby assigns all rents due from any assignment or subletting to Landlord as
security for performance of its obligations under this Lease and Landlord may
collect such rents as Tenant's Attorney-in-Fact, except that Tenant may collect
such rents unless a default occurs as described in paragraph 22 and 24 above.
The termination of this Lease due to Tenant's default shall not automatically
terminate any assignment or sublease then in existence; at the election of
Landlord, such assignment or sublease shall survive the termination of this
Lease and, upon such election, the assignee or subtenant shall attorn to
Landlord and Landlord shall undertake the obligations of the Tenant under the
sublease or assignment; provided the Landlord shall not be liable for prepaid
rent, security deposits or other defaults of the Tenant to the subtenant or
assignee, or any acts or omissions of Tenant, its agents, employees, contractors
or invitees.
E. PERMITTED TRANSFERS: Tenant may, without Landlord's prior written
consent, sublet the Premises or assign the Lease to: (i) a subsidiary,
affiliate, division or corporation controlled or under common control with
Tenant; (ii) a successor corporation related to Tenant by merger, consolidation,
non-bankruptcy reorganization, or government action; or (iii) a purchaser of
substantially all of Tenant's assets, provided, however, that the subtenant or
assignee has a net worth not less than the net worth of Tenant as of the date of
such transfer. For the purpose of this Lease, sale of Tenant's capital stock
through any public exchange shall not be deemed an assignment, subletting, or
any other transfer of the Lease or the Premises.
30. CONDEMNATION: If any part of the Premises shall be taken for any
public or quasi-public use, under any statute or by right of eminent domain or
private purchase in lieu thereof, and only a part thereof remains which is
susceptible of
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occupation hereunder, this Lease shall as to the part so taken, terminate as of
the day before title shall vest in the condemnor or purchaser ("Vesting Date"),
and the Base Monthly Rent payable hereunder shall be adjusted so that the Tenant
shall be required to pay for the remainder of the Lease Term only such portion
of such Base Monthly Rent as the value of the part remaining after such taking
bears to the value of the entire Premises prior to such taking. If all of the
Premises, or such part thereof be taken so that there does not remain a portion
susceptible for occupation hereunder, this Lease shall thereupon terminate on
the Vesting Date. If a part or all of the Premises be taken, all compensation
awarded upon such taking shall go to the Landlord and the Tenant shall have no
claim thereto but Landlord shall cooperate with Tenant, without cost to
Landlord, to recover compensation for damage to or taking of any Alterations or
for Tenant's moving costs. Tenant hereby waives the provisions of California
Code of Civil Procedures Section 1265.130 and any other similarly enacted statue
are waived by Tenant and the provisions of this paragraph 30 shall govern in the
case of such destruction.
31. EFFECTS OF CONVEYANCE: The term "Landlord" as used in this Lease,
means only the owner for the time being of the Premises so that, in the event
of any sale or other conveyance of the Premises, or in the event of a master
lease of the Premises, the Landlord shall be and hereby is entirely freed and
relieved of all covenants and obligations of the "Landlord" hereunder arising
from and after the conveyance, and it shall be deemed and construed, without
further agreement between the parties and the purchaser at any such sale, or the
master tenant of the Premises, that the purchaser or master tenant of the
Premises has assumed and agreed to carry out any and all covenants and
obligations of the Landlord hereunder. Such transferor shall transfer and
deliver Tenant's security deposit to the purchaser at any such sale or the
master tenant of the Premises, and thereupon the such transferor shall be
discharged from any further liability in reference thereto.
32. SUBORDINATION: In the event Landlord notifies Tenant in writing,
this Lease shall be subordinate to any ground Lease, deed of trust, or other
hypothecation for security now or hereafter placed upon the real property of
which the Premises are a part and to any and all advances made on the security
thereof and to renewals, modifications, replacements and extensions thereof
provided that Tenant receives from the lender or other lien holder requesting
such subordination an agreement in writing providing that if the lien holder
acquires title to the real property on which the Premises are located, such
party shall not terminate this Lease so long as Tenant is not in default
hereunder, and such party shall recognize all of the rights of Tenant under this
Lease. Tenant agrees to promptly execute and deliver any documents which may be
required to effectuate such subordination. At the request of any lender, Tenant
agrees to execute and deliver any reasonable modifications of this Lease which
do not materially adversely affect Tenant's rights hereunder.
Landlord shall attempt to deliver to Tenant a non-disturbance
agreement from the existing lender on the Building in a form reasonably
acceptable to the parties within sixty (60) days from the date of execution of
this Lease. In the event Landlord is unable to deliver the non-disturbance,
Tenant shall have the right to terminate the Lease by providing Landlord
written notice of such election within five (5) days following the expiration of
such sixty (60) day period.
33. WAIVER: The waiver by Landlord of any breach of any term, covenant or
condition, herein contained shall not be deemed to be a waiver of such term,
covenant or condition or any subsequent breach of the same or any other term,
covenant or condition herein contained. The subsequent acceptance of rent
hereunder by Landlord shall not be deemed to be a waiver of any preceding breach
by Tenant of any term, covenant or condition of this Lease, other than the
failure of Tenant to pay the particular rental so accepted, regardless of
Landlord's knowledge of such preceding breach at the time of acceptance of such
rent. No payment by Tenant or receipt by Landlord of a lesser amount than any
installment of rent due shall be deemed to be other than payment on account of
the amount due. No delay or omission in the exercise of any right or remedy by
Landlord shall impair such right or remedy or be construed as a
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waiver thereof by Landlord. No act or conduct of Landlord, including, without
limitation, the acceptance of keys to the Premises, shall constitute acceptance
of the surrender of the Premises by Tenant before the Expiration Date (only
written notice from Landlord to Tenant of acceptance shall constitute such
acceptance of surrender of the Premises). Landlord's consent to or approval of
any act by Tenant which require Landlord's consent or approvals shall not be
deemed to waive or render unnecessary Landlord's consent to or approval of any
subsequent act by Tenant.
34. HOLDING OVER: Any holding over after the termination or Expiration
Date, shall be construed to be a tenancy from month to month, terminable on
thirty (30) days written notice from either party, and Tenant shall pay Base
Monthly Rent to Landlord at a rate equal to one hundred fifty percent (150%) of
the Base Monthly Rent due in the month preceding the termination or Expiration
Date plus all other amounts payable by Tenant under this Lease. Any holding over
shall otherwise be on the terms and conditions herein specified, except those
provisions relating to the Lease Term and any options to extend or renew, which
provisions shall be of no further force and effect following the expiration of
the applicable exercise period. Tenant shall indemnify, defend, and hold
Landlord harmless from all loss or liability (including, without limitation, any
loss or liability resulted from any claim against Landlord made by any
succeeding tenant) founded on or resulting from Tenant's failure to timely
surrender the Premises to Landlord and losses to Landlord due to lost
opportunities to lease the Premises to succeeding tenants.
35. SUCCESSORS AND ASSIGNS: The covenants and conditions herein contained
shall, subject to the provisions of paragraph 29, apply to and bind the heirs,
successors, executors, administrators and assigns of all the parties hereto; and
all of the parties hereto shall be jointly and severally liable hereunder.
36. ESTOPPEL CERTIFICATES: Either party shall at any time during the Lease
Term, within ten (10) days following written notice from the other party, be
obligated to execute and deliver a statement in writing certifying (i) that this
Lease is unmodified and in full force and effect (or, if modified, stating the
nature of such modification); (ii) the date to which the rent and other charges
are paid in advance, if any; (iii) acknowledging that there are not, to their
knowledge, any uncured defaults hereunder or specifying such defaults if they
are claimed; and (iv) such other information as either party may reasonably
request. Any such statement may be conclusively relied upon by any prospective
purchaser or encumbrancer of the Premises. Tenant also agrees to provide the
most current three (3) years of audited financial statements within five (5)
days of a request by Landlord for Landlord's use in financing the Premises with
commercial lenders.
37. OPTION TO EXTEND THE LEASE TERM:
A. GRANT AND EXERCISE OF OPTION: Landlord hereby grants to Tenant,
upon and subject to the terms and conditions set forth in this paragraph, two
(2) options (the "Options") to extend the Lease Term for an additional term (the
"Option Term"), each Option Term shall be for a period of sixty (60) months.
Each such Option shall be exercised, if at all, by written notice to Landlord no
earlier than the date that is thirty (36) months prior to the Expiration Date
but no later than the date that is thirty (30) months prior to the Expiration
Date. If Tenant exercises the Option, each of the terms, covenants and
conditions of this Lease except this paragraph shall apply during the Option
Term as though the expiration date of the Option Term was the date originally
set forth herein as the Expiration Date, provided that the Base Monthly Rent to
be paid by Tenant during the Option Term shall be the greater of (i) the Base
Monthly Rent applicable to the period immediately prior to the commencement of
the Option Term, or (ii) ninety five percent (95%) of the Fair Market Rental, as
hereinafter defined, for the Premises for the Option Term. Anything contained
herein to the contrary notwithstanding, if Tenant is in monetary or material
non-monetary default under any of the terms, covenants or conditions of this
Lease (after expiration of the applicable cure period) either at the time Tenant
exercises the Option or at any time thereafter prior to the commencement date of
the Option Term, Landlord shall have, in addition to
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all of Landlord's other rights and remedies provided in this Lease, the right to
terminate the Option upon notice to Tenant, in which event the expiration date
of this Lease shall be and remain the Expiration Date. As used herein, the term
"Fair Market Rental" for the Premises shall mean the rental and all other
monetary payments including any escalations and adjustments thereto (including
without limitation Consumer Price Indexing) then being obtained for new leases
of space comparable in age and quality to the Premises in the locality of the
Building that Landlord could obtain during the Option Term from a third party
desiring to lease the Premises for the Option Term based upon the current use
and other potential uses of the Premises. The appraisers shall be instructed
that the foregoing five percent (5%) discount off the Fair Market Rental is
intended to reduce comparable rents which include (i) brokerage commissions,
(ii) tenant improvement allowances, and (iii) vacancy costs, to account for the
fact that Landlord will not suffer such costs in the event Tenant exercises its
Option. The appraisers shall also be instructed to first attempt to utilize
comparables based on multistory buildings, and if no such comparables are
available, to then utilize low-rise steel frame buildings in the Palo Alto,
Menlo Park and Mountain View marketplace.
B. DETERMINATION OF FAIR MARKET RENTAL: If Tenant exercises the
Option, Landlord shall send to Tenant a notice setting forth the Fair Market
Rental for the Premises for the Option Term, on or before the date that is
twelve (12) months prior to the Expiration Date. If Tenant disputes Landlord's
determination of the Fair Market Rental for the Option Term, Tenant shall,
within thirty (30) days after the date of Landlord's notice setting forth the
Fair Market Rental for the Option Term, send to Landlord a notice stating that
Tenant either (i) elects to terminate its exercise of the Option, in which event
the Option shall lapse and this Lease shall terminate on the Expiration Date, or
(ii) disagrees with Landlord's determination of Fair Market Rental for the
Option Term and elects to resolve the disagreement as provided in paragraph
37(C) below. If Tenant does not send to Landlord a notice as provided in the
previous sentence, Landlord's determination of the Fair Market Rental shall be
the basis for determining the Base Monthly Rent to be paid by Tenant hereunder
during the Option Term. If Tenant elects to resolve the disagreement as provided
in paragraph 37(C) below and such procedures shall not have been concluded prior
to the commencement date of the Option Term, Tenant shall pay as Base Monthly
Rent to Landlord the Fair Market Rental as determined by Landlord in the manner
provided above. If the amount of Fair Market Rental as finally determined
pursuant to paragraph 37(C) below is greater than Landlord's determination,
Tenant shall pay to Landlord the difference between the amount paid by Tenant
and the Fair Market Rental as so determined in paragraph 37(C) below within
thirty (30) days after the determination. If the Fair Market Rental as finally
determined in paragraph 37(C) below is less than Landlord's determination, the
difference between the amount paid by Tenant and the Fair Market Rental as so
determined in paragraph 37(C) below shall be credited against the next
installments of rent due from Tenant to Landlord hereunder.
C. RESOLUTION OF A DISAGREEMENT OVER THE FAIR MARKET RENTAL: Any
disagreement regarding the Fair Market Rental shall be resolved as follows:
1. Within thirty (30) days after Tenant's response to
Landlord's notice to Tenant of the Fair Market Rental, Landlord and Tenant shall
meet no less than two (2) times, at a mutually agreeable time and place, to
attempt to resolve any such disagreement.
2. If within the thirty (30) day period referred to in (i)
above, Landlord and Tenant can not reach agreement as to the Fair Market Rental,
they shall each select one appraiser to determine the Fair Market Rental. Each
such appraiser shall arrive at a determination of the Fair Market Rental and
submit their conclusions to Landlord and Tenant within thirty (30) days after
the expiration of the thirty (30) day consultation period described in (i)
above.
3. If only one appraisal is submitted within the requisite time
period, it shall be deemed to be the Fair Market Rental. If both appraisals are
submitted within such time period, and if the two appraisals so submitted differ
by less than ten percent
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(10%) of the higher of the two, the average of the two shall be the Fair Market
Rental. If the two appraisals differ by more than ten percent (10%) of the
higher of the two, then the two appraisers shall immediately select a third
appraiser who shall within thirty (30) days after his or her selection make a
determination of the Fair Market Rental and submit such determination to
Landlord and Tenant. This third appraisal will then be averaged with the closer
of the two previous appraisals and the result shall be the Fair Market Rental.
4. All appraisers specified pursuant to this paragraph shall be
members of the American Institute of Real Estate Appraisers with not less than
ten (10) years experience appraising office and industrial properties in the
Santa Clara Valley. Each party shall pay the cost of the appraiser selected by
such party and one-half of the cost of the third appraiser.
38. OPTIONS: All Options provided Tenant in this Lease are personal and
granted to original Tenant and any permitted transferee pursuant to paragraph
29(E) of the Lease and are not exercisable by any other third party should
Tenant assign or sublet all or a portion of its rights under this Lease, unless
Landlord consents to permit exercise of any option by any assignee or subtenant,
in Landlord's sole discretion. In the event that Tenant hereunder has any
multiple options to extend this Lease, a later option to extend the Lease cannot
be exercised unless the prior option has been so exercised.
39. QUIET ENJOYMENT: Upon Tenant's faithful and timely performance of all
the terms and covenants of the Lease and except as otherwise provided in this
Lease, Tenant shall quietly have and hold the Premises for the Lease Term and
any extensions thereof.
40. BROKERS: Tenant represents it has not utilized or contacted a real
estate broker or finder with respect to this Lease other than CB Commercial and
Tenant agrees to indemnify and hold Landlord harmless against any claim, cost,
liability or cause of action asserted by any other broker or finder claiming
through Tenant. Landlord agrees to pay the commission to CB Commercial as
provided in a separate agreement between CB Commercial and Landlord.
41. LANDLORD'S LIABILITY: If Tenant should recover a money judgment
against Landlord arising in connection with this Lease, the judgment shall be
satisfied only out of Landlord's interest in the Premises including the
improvements and real property and neither Landlord or any of its partners,
officers, directors, agents, trustees, shareholders or employees shall be liable
personally for any deficiency. And furthermore, Tenant expressly waives any and
all rights to proceed against the individual partners or the officers, directors
or shareholders of any corporate partner, except to the extent of their interest
in said limited partnership.
42. AUTHORITY OF PARTIES: If Landlord or Tenant is a corporation, each
individual executing this Lease on behalf of said corporation represents and
warrants that he is duly authorized to execute and deliver this Lease on behalf
of said corporation, in accordance with a duly adopted resolution of the Board
of Directors of said corporation or in accordance with the by-laws of said
corporation, and that this Lease is binding upon said corporation in accordance
with its terms.
43. TRANSPORTATION DEMAND MANAGEMENT PROGRAMS: Should a government agency
or municipality require Landlord to institute TDM (Transportation Demand
Management) facilities and/or program, Landlord and Tenant hereby agree that the
cost of TDM imposed capital costs required on the Premises, including but not
limited to employee showers, lockers, cafeteria, or lunchroom facilities, shall
be shall be amortized pursuant to paragraph 17 and any ongoing operational
costs or expenses associated with a TDM program, such as an on-site TDM
coordinator, which are required for the Premises shall be paid for by Tenant.
44. RIGHT OF FIRST OFFERING TO PURCHASE: Landlord hereby grants
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Tenant a right of first offering to purchase the Premises. Prior to Landlord
offering to sell the Premises to a third party (other than the third parties
with existing rights), Landlord shall give Tenant written notice of such desire
and the terms and other information under which Landlord intends to sell the
Premises. Provided at the time of exercise, Tenant (i) is not in default and
(ii) fully occupies the Premises, Tenant shall have the option, which must be
exercised, if at all, by written notice to Landlord within ten (10) days after
Tenant's receipt of Landlord's notice, to purchase the Premises at the sales
price and terms of sale specified in the notice. In the event Tenant timely
exercises such option to purchase the Premises, Landlord shall sell the Premises
to Tenant, and Tenant shall purchase the Premises from Landlord in accordance
with the price and terms specified in Landlord's notice. Landlord and Tenant
shall, in good faith, attempt to reach agreement on the terms of a mutually
acceptable purchase agreement consistent with the terms set forth in Landlord's
notice within thirty (30) days of Landlord's notice. In the event (i) Landlord
and Tenant are unable to reach agreement on a mutually acceptable purchase
agreement within such thirty (30) day period or (ii) Tenant fails to exercise
Tenant's option within said ten (10) day period, Landlord shall have one hundred
eighty (180) days thereafter to sell the Building at no less than ninety percent
(90%) of the sales price and upon the same or substantially the same other terms
of sale as specified in the notice to Tenant. In the event Landlord fails to
sell the Premises within said one hundred eighty (180) day period or in the
event Landlord proposes to sell the Premises at less than ninety percent (90%)
of the sales price or on other material terms which are more favorable to the
prospective tenant than that proposed to Tenant, Landlord shall be required to
resubmit such offer to Tenant in accordance with this Right of First Offering.
This Right of First Offering shall automatically terminate, (i) upon
the expiration or sooner termination of the Lease, or (ii) in the event of a
foreclosure or other involuntary transfer of Landlord's interest in the
Premises. Notwithstanding the forgoing, this Right of First Offering shall not
apply to transfers of all or a portion of the Premises to (i) John A. Sobrato
and/or John M. Sobrato (individually and collectively "Sobrato"), and (ii) any
immediate family member of Sobrato, and (iii) any trust established, in whole or
in art, for the benefit of Sobrato and/or any immediate family member of
Sobrato, (iv) any partnership in which Sobrato or any immediate family member,
either directly or indirectly (e.g., through a partnership or corporate entity
or a trust) retains a general partner interest, and/or (v) any corporation under
the control, either directly or indirectly, by Sobrato or any immediate family
member of Sobrato.
45. DISPUTE RESOLUTION: Except for the failure by Tenant to timely pay the
Base Monthly Rent, any controversy, dispute, or claim of whatever nature arising
out of, in connection with, or in relation to the interpretation, performance or
breach of this agreement, including any claim based on contract, tort, or
statute, shall be resolved at the request of any party to this agreement through
a two-step dispute resolution process administered by JAMS or another judicial
and mediation service mutually acceptable to the parties involving first
mediation, followed, if necessary, by final and binding arbitration administered
by and in accordance with the then existing rules and practice of the judicial
and mediation service selected, and judgment upon any award rendered by the
arbitrator(s) may be entered by any State or Federal Court having jurisdiction
thereof.
46. MISCELLANEOUS PROVISIONS:
A. RENT: All monetary sums due from Tenant to Landlord under this
Lease, including, without limitation those referred to as "additional rent",
shall be deemed to be rent.
B. THIS PARAGRAPH INTENTIONALLY LEFT BLANK:
C. PERFORMANCE BY LANDLORD: If Tenant fails to perform any obligation
required under this Lease or by law or governmental regulation, Landlord in its
sole discretion may without notice and without releasing Tenant from its
obligations hereunder or waiving any rights or remedies, perform such
obligation, in which event
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Tenant shall pay Landlord as additional rent all sums paid by Landlord in
connection with such substitute performance including interest as provided in
paragraph 44(D) below within ten (10) days following Landlord's written notice
for such payment.
D. INTEREST: All rent due hereunder, if not paid when due, shall
bear interest at the maximum rate permitted under California law accruing from
the date due until the date paid to Landlord.
E. RIGHTS AND REMEDIES: All rights and remedies hereunder are
cumulative and not alternative to the extent permitted by law and are in
addition to all other rights and remedies in law and in equity.
F. SURVIVAL OF INDEMNITIES: All indemnification, defense, and hold
harmless obligations of Landlord and Tenant under this Lease shall survive the
expiration or sooner termination of the Lease.
G. SEVERABILITY: If any term or provision of this Lease is held
unenforceable or invalid by a court of competent jurisdiction, the remainder of
the Lease shall not be invalidated thereby but shall be enforceable in
accordance with its terms, omitting the invalid or unenforceable term.
H. CHOICE OF LAW: This Lease shall be governed by and construed in
accordance with California law. Venue shall be Santa Clara County.
I. TIME: Time is of the essence hereunder.
J. ENTIRE AGREEMENT: This instrument contains all of the agreements
and conditions made between the parties hereto and may not be modified orally or
in any other manner other than by an agreement in writing signed by all of the
parties hereto or their respective successors in interest.
K. REPRESENTATIONS: Tenant acknowledges that neither Landlord nor
any of its employees or agents have made any agreements, representations,
warranties or promises with respect to the demised Premises or with respect to
present or future rents, expenses, operations, tenancies or any other matter.
Except as herein expressly set forth herein, Tenant relied on no statement of
Landlord or its "employees or its agents" for that purpose.
L. HEADINGS: The headings or titles to the paragraphs of this Lease
are not a part of this Lease and shall have no effect upon the construction or
interpretation of any part thereof.
M. EXHIBITS: All exhibits referred to are attached to this Lease and
incorporated by reference.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease on the day and
year first above written.
LANDLORD: SOBRATO DEVELOPMENT TENANT: DIALOG INFORMATION
COMPANIES SERVICES, INC.
a California Limited Partnership a California Corporation
By: /s/ [SIG] By: /S/ [SIG]
------------------------------ ------------------------------
Its: Trustee of the General Partner Its: President
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Exhibit "A" -- Parcel Map
[MAP]
<PAGE> 27
Exhibit " -- Tenancy in Common & Maintenance Agmt
TICOR TITLE]
Order No. TS-
When Recorded Return To: FILED FOR RECORD
AT REQUEST OF
John Paul Hanna, Esq. /s/ SOBRATO DEV
525 University Avenue, Suite 705 JUN 10 3 20 PM '86
Palo Alto, CA 94301 OFFICIAL RECORDS
SANTA CLARA COUNTY
LAURIE KANE
TENANCY IN COMMON AND MAINTENANCE AGREEMENT,
DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS,
AND GRANT OF EASEMENTS
THIS AGREEMENT, DECLARATION AND GRANT, made on the date hereinafter set
forth, by SKYVIEW 2400-EL CAMINO REAL, a California limited partnership
("Skyview"), and SOBRATO DEVELOPMENT COMPANY 850, a California limited
partnership ("Sobrato"), is made with reference to the following facts:
A. Skyview owns property located in the City of Mountain View ("City")
County of Santa Clara, consisting of Lots 3-I, 3-IIA, 3-IIB, 3-IIC, 4A, 4B, 5,
6A, 6B and 7 described on that subdivision map entitled "Tract No. 7813"
("Map"), which map was filed for record in the Office of the Recorder of Santa
Clara County, California, on the 10th day June, 1986, Book 561 of Maps, pages
1, 2, 3 & 4 (the "Skyview Property").
B. Sobrato owns Lot 1 described on the Map (the "Sobrato Property").
C. Sobrato and Skyview each own an undivided one-half (1/2) interest
in Lot 2 described on the Map. Lot 2 consists of a three (3) level underground
garage ("garage" or "garage property").
D. The parties intend to: (1) share use of the garage; (2) provide for
management of the garage; (3) impose upon their respective properties mutually
beneficial protective covenants, conditions and restrictions; and (4) grant
certain reciprocal easements over portions of their respective properties.
NOW, THEREFORE, Skyview and Sobrato hereby declare that all of the
property described above shall be held, sold, leased, mortgaged, encumbered,
rented, used, occupied, improved and conveyed subject to the following
declarations, limitations, easements, restrictions, covenants, conditions, which
are imposed as equitable servitudes pursuant to a general plan for the
development of the property for the purpose of enhancing and protecting the
value and desireability of the property and every part thereof, and which shall
run with the real property and be binding on Sobrato and Skyview and their
successors and assigns, and on all parties having or acquiring any right, title
or interest in or to the described property or any part thereof, their heirs,
successors and assigns, and shall inure to the benefit of each owner thereof.
-1-
[LAW OFFICES OF JOHN PAUL HANNA LETTERHEAD]
<PAGE> 28
ARTICLE I
GARAGE
1.1 Construction: Sobrato shall construct the garage, at its expense,
pursuant to plans and specifications approved by Sobrato and Skyview and by the
City. Sobrato shall pay all bills incurred in the construction of the garage so
that title to Lot 2 shall be delivered to Sobrato and Skyview free from any
lien claims or encumbrances, together with a fully paid for CLTA title
insurance policy insuring fee title in the owners, free from liens and
encumbrances. Sobrato shall warrant the garage against material defects in
design and construction for a period of one (1) year from the date that notice
of completion is filed and title is transferred in undivided interests to
Sobrato and Skyview, whichever occurs later.
1.2 Management: Sobrato (the "managing owner") shall manage the garage,
and may hire a professional management company (the "manager") for this purpose
under a contract entered into after competitive bidding based on bids from two
(2) or more responsible bidders. The term of the contract shall not exceed one
(1) year. The managing owner may delegate any of its duties hereunder to the
manager. Sobrato shall serve as managing owner so long as the parties agree,
and when the owners no longer agree that Sobrato shall be the managing owner,
other arrangements satisfactory to Sobrato and Skyview shall be made.
1.3 Maintenance: The managing owner shall be responsible for
maintenance of the garage, with the actual maintenance to be performed by the
manager described in section 1.2.
1.4 Insurance: The managing owner shall obtain the following insurance
on the garage and the appurtenances thereto:
A. Casualty: So-called "fire and extended coverage, all risk"
insurance, with earthquake and flood endorsements, if reasonably available,
insuring the garage against loss for the full replacement value cost thereof,
containing a deductible not exceeding five percent (5%) of the replacement
value of the garage;
B. Liability: Comprehensive general liability insurance insuring the
owners of the garage and their tenants against liability for personal injury,
bodily injury, death, and damage to property occurring or resulting fom an
occurrence in, on, or about the garage and its appurtenances, with combined
single limit coverage of Ten Million Dollars ($10,000,000); and
C. Workers' Compensation: Workers' compensation insurance as
required by statute.
1.5 Contracts: The managing owner may enter into contracts
including, without
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limitation, contracts for management, maintenance and security of the garage.
1.6 Destruction and Rebuilding: If the garage improvements are
substantially damaged (more than fifty percent (50%) destroyed) or destroyed by
fire, earthquake or other catastrophe, the owners shall decide within a maximum
of three (3) months after the catastrophe whether to rebuild. If either owner
decides not to continue operations and desires not to rebuild the garage, and
the other owner desires or is required by the terms of any lease or mortgage
affecting the garage to rebuild the garage and to continue operations, the
owner deciding not to rebuild and continue operations shall remove all rubble
from its property and leave its lot landscaped according to a standard
comparable to the standard existing in the project just prior to the
catastrophe, and the owner electing to rebuild and continue operations shall be
entitled to receive all of the proceeds from the insurance policy covering the
garage and to use that proceeds to reconstruct the garage or such portion
thereof as is necessary to permit that owner to continue operations. Damage
resulting in less than fifty percent (50%) destruction shall be repaired in all
cases.
1.7 Condemnation: If in the event of the taking of all or any portion of
the garage, the proceeds of condemnation shall be distributed equally to the
owners subject to the rights of their mortgagees, if any.
1.8 Security: The managing owner shall acquire and install the
surveillance equipment (television cameras) for maintenance of security in the
garage and the cost thereof shall be included in operating costs to be shared
as provided in section 1.9. Skyview and Sobrato shall each, at their own
expense, construct one (1) monitoring station for their respective use. The
stations shall be linked together for purposes of communication. Each party
shall provide its own monitoring and security guards, if desired, at its own
expense. No owner of the garage nor any of their agents, employees or tenants
shall be liable to any other owner or its agents, employees or tenants for
failing to provide security for the garage.
1.9 Cost Sharing: Except as provided in section 1.8, all costs of
operation, maintenance, management, taxes, and insurance premiums relating to
the garage ("garage expenses") shall be borne by the fee title owner(s) of Lot 2
in proportion to their interest in Lot 2. The managing owner, in its reasonable
discretion, shall determine and cause to be collected from said owners of Lot 2,
reasonable reserves for capital improvements and extraordinary garage expenses.
The managing owner also shall prepare and deliver to the owners of Lot 2, not
less than forty-five (45) nor more than sixty (60) days before the beginning of
the calendar year a report consisting of: (1) estimated annual revenue and
garage expenses for the ensuing calendar year; (b) the
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amount of the total cash reserves currently available; (c) the actual garage
expenses for the preceding calendar year; (d) the total garage assessment paid
by each owner during the preceding calendar year; and (e) the amount of
estimated monthly assessments to be paid by each owner during the ensuing
calendar year. If the report indicates that the actual garage expenses, plus
reserves, for any particular calendar year were not equal to the garage
assessments payable for such year by the owners of Lot 2 the difference shall
be paid by or to the managing owner within ten (10) days of the managing
owner's report, to the end that the managing owner shall receive from each
owner of Lot 2 each year that owner's proportionate share of actual garage
expenses, plus reserves. The managing owner shall make available for inspection
by any owner of Lot 2, or its representative, at the property during normal
business hours, the books, records, and invoices supporting the garage
assessments and payments demanded for garage assessments. If any such
inspection should disclose a discrepancy of five percent (5%) or more, the
managing owner shall pay all cost of the inspection.
1.10 Towing of Automobiles: Certain parking spaces in the garage are
reserved for exclusive use of certain persons. The managing owner or the
manager are authorized to have any automobiles which are illegally or
improperly parked anywhere in the project towed at the expense of the owner of
said vehicle. The managing owner may hire any towing company to tow such cars.
1.11 Income from Parking Fees: All income from fees charged to the
public for use of the garage shall be used for current expenses of maintenance,
operation, and insurance, and any surplus shall be deposited to a reserve
account for capital improvements and emergencies.
1.12 Capital Costs: In the event any extraordinary expenses or
expenditures for capital improvements are required, and the proceeds of current
operations and reserves are insufficient for such purpose, the managing owner
may require capital contributions to be made by the owners of Lot 2 in the same
ratio as provided for cost sharing in section 1.9.
1.13 Managing Owner: The managing owner shall not be personally liable
for ordinary mistakes in judgment or for any conduct in his capacity as
managing owner except for active negligence or willful misconduct in managing
the operation and maintenance of the garage, or in selecting and supervising a
manager for the garage.
1.14 Payment of Costs: On the first day of each calendar month the
owners of Lot 2 shall pay their respective shares of the monthly garage
expenses upon receipt of the monthly assessment from the manager. Any
assessment not paid within fifteen (15) days after the due date (as specified
in the assessment) shall be delinquent, shall bear
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interest at the rate of twelve percent (12%) per annum from the due date until
paid, and shall incur a late payment penalty in the amount of ten percent (10%)
of the assessment. The owners of Lot 2 agree that a lien with a private power of
sale for a delinquent assessment, including interest, penalty and attorney's
fees, is hereby granted against the interest of said delinquent owner in Lot 2,
and that the lien may be enforced by sale of the delinquent owner's interest in
Lot 2 by the managing owner pursuant to the provisions of Section 2924-2924h of
the California Civil Code applicable to the exercise of powers of sale in
mortgages and deeds of trust, or in any other manner permitted by law.
1.15 Waiver of Partition: Each party forever waives the right to bring any
partition action to divide lot 2 under Title 10.5 of Part II of the California
Code of Civil Procedure, or any successor partition statutes thereto.
ARTICLE II
EASEMENTS
2.1 Easements for Ingress and Egress: Skyview hereby grants to Sobrato for
the benefit of the Sobrato Property as the dominant tenement easements for
ingress and egress over Lot 3-I as the servient tenement and Sobrato hereby
grants to Skyview for the benefit of the Skyview Property as the dominant
tenement easements for ingress and egress over Lot 1 as the servient tenement.
Said easements are for pedestrian traffic only over the walkways and other
access routes located on the open space areas of said lots (those areas not
occupied by buildings).
2.2 Garage Parking and Use: The owners of Lot 2, their occupants, tenants
and invitees shall have rights of ingress and egress to and from and parking
within the garage (except in spaces reserved for the exclusive use of the owners
and occupants as provided in section 2.3), and to the extent required for
vehicular access to the garage, easements for ingress and egress over that
portion of Lots 1 and 3-I within paved driveways and garage entrances and exits.
2.3 Exclusive Use of Parking Spaces: Certain parking spaces in the garage
are reserved for the exclusive use of certain persons as provided in Exhibit "A"
attached hereto and incorporated by reference herein. In the event that any
owner of Lot 2 fails to pay its share of monthly garage expenses
("delinquency"), and should the delinquency continue for one hundred twenty
(120) days, all of the rights of said owner of Lot 2 and its successor, members,
tenants, and all other persons claiming rights in Lot 2 through said owner shall
be suspended and the manager shall be authorized to prevent access to the garage
and to the reserved spaces by all such parties. In the event that the owner of a
condominium, who belongs to a condominium association which is an owner of Lot
2,
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fails to pay any amounts payable to the association in connection with the use
of the garage for a period of ten (10) days after the due date of such payment,
that association may immediately file a lien against the condominium interest of
the delinquent condominium owner pursuant to covenants, conditions and
restrictions encumbering the condominium, and may notify the manager of the
garage to suspend the parking privileges of the delinquent condominium owner.
Once parking privileges are suspended with respect to a person, the manager of
the garage may blockade the space assigned to such person to prevent its being
used until the delinquency is cured.
2.4 Drainage: Reciprocal drainage and sewer facility easements are granted
over Lots 1, 2 and 3-I as a benefit and burden on each of these lots for the
flow of surface water, and for installation, inspection, maintenance, repair,
replacement, and removal of storm sewer and sanitary sewer facilities. Said
easements are limited to the open space areas of said lots which are not
occupied by buildings.
2.5 Utilities: Reciprocal utility easements are granted over Lots 1, 2 and
3-I as a benefit and burden on each of these lots for installation, inspection,
maintenance, repair, replacement and removal of water, electric, gas, telephone,
television and other utility facilities. Said reciprocal easements are limited
to the open space areas of said lots which are not occupied by buildings.
2.6 Encroachment Easements: Reciprocal encroachment easements are granted
over Lots 1, 2 and 3-I as a benefit and burden on each of these lots for
purposes of accommodating any encroachment of foundations, and overhangs of
exterior walls, windows, and roofs which are built in accordance with the
original design, plans and specifications of the parties, or due to minor
engineering errors, minor errors in original construction, settlement or
shifting of the buildings, or similar clauses. There shall be valid easement for
the maintenance of said encroachments as long as they shall exist and the rights
and obligations of owner shall not be altered in any way by said encroachment,
settling or shifting. In the event a structure is partially or totally
destroyed, and then repaired or rebuilt, the owners of each adjoining lot agree
that minor encroachments over adjoining lots shall be permitted and there shall
be valid easements for the maintenance of said encroachments so long as they
shall exist.
2.8 View Easement: A view easement is granted over Lot 1 as the servient
tenement in favor of Lots 3-I, 3-IIA, 3-IIB, 3-IIC, 4A, 4B, 5, 6A, 6B and 7 as
the dominant tenements for preservation of the view over Lot 1 that will exist
upon completion of the proposed seven (7) story office building upon Lot 1 in
accordance with the final plans approved by the City. The purpose of this view
easement is to prohibit
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additional construction on Lot 1 which would increase the height or mass of the
seven (7) story office building or which would take place within the open space
area of Lot 1.
2.9 Structural Repair Easements: Reciprocal structural repair easements are
granted over Lots 1, 2, 3-I, 3-IIA, 3-IIB, 3-IIC, 4A, 4B, 5, 6A, 6B and 7 as a
benefit and burden on each of these lots for allowing such access over any
adjoining lot subject to this easement as may be reasonably necessary in order
to make any structural repairs to an improvement on a lot, provided that the
owner making such improvements or repairs to its lot shall fully reimburse the
owner of the adjoining lot for any damages thereto (including business
interruption or injuries to persons) resulting from the exercise of the easement
rights described herein.
2.10 Easements to Accompany Conveyance of Lot: The easements described in
this Article II are permanent and appurtenant to the respective dominant
tenements, and shall automatically accompany the conveyance of any lot, even
though the description in the instrument of conveyance may refer only to the fee
title to the lot.
ARTICLE III
USE RESTRICTIONS
3.1 Nuisances: No noxious, illegal, or seriously offensive activities shall
be carried on upon any lot, or in any part of the property, nor shall anything
be done thereon which may be or may violate any law, rule or regulation of any
applicable governmental entity or any private covenant, condition, or
restriction affecting the garage become a nuisance to or which may in any way
interfere with the quiet enjoyment of each of the owners of his respective lot.
3.2 Landscaping: Lots 1 and 3-I shall be landscaped in accordance with
plans and specifications submitted to and approved by the City. Landscaping
shall be installed within ninety (90) days of completion of buildings. After
installation, landscaping shall be maintained in a sightly and well-kept
condition by the owner, lessee, licensee or other occupant of the lot or its
agent, at its expense. All landscaped areas shall be irrigated with a system
designed for automatic operation.
3.3 Ground Maintenance:
A. Grass, hedges, shrubs, vines and mass planting of any type on each
lot shall be kept trimmed and shall at regular intervals be mowed, trimmed and
cut so as to maintain the same in a neat and attractive manner. Trees, shrubs,
vines and plants which die shall be promptly removed and replaced with living
plants of like kind and quality.
B. No weeds, vegetation, rubbish, debris, garbage, objects, waste
materials, or materials of any kind whatsoever shall be placed or permitted to
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accumulate upon any portion of a lot, which would render it unsanitary,
unsightly, offensive, or detrimental to any property in the vicinity thereof or
to the occupants of any such property in such vicinity.
C. No building material of any kind or character shall be placed or
stored upon any lot so as to be open to view by the public or neighbors, unless
such material will be used and is used within three (3) months for the
construction of buildings or structures upon the lot upon which the material is
stored.
3.4 Exterior Light Fixtures: No exterior lighting fixture shall be
installed on any lot without adequate and proper shielding of the source of the
light. No exterior lighting fixtures shall be installed that may become a
nuisance to adjacent lots subject to his Declaration. Office lighting on Lot 1
shall be kept at a minimum during periods when the offices are not occupied to
minimize glare affecting the residential areas of the property.
3.5 Excavations: No excavation for stone, gravel, sand, dirt or earth shall
be made on any portion of a lot, except for the construction of buildings,
walls, fences, foundations, structures, landscaping, swimming pools and other
improvements, plans and specifications for which excavations have been approved
by the City; provided, however, that the owners reserve the right to excavate,
fill and grade on any lot or on any portion thereof, or to do such other work of
improvement thereon as may be necessary to the construction and completion of
public improvements.
3.6 Clothes Lines: No exterior clothes lines shall be erected or maintained
and there shall be no outside laundering or drying of clothes. No draping of
towels, carpets, or laundry over railings shall be allowed.
3.7 Balcony Storage: No storage on balconies shall be permitted. No balcony
shall be enclosed.
3.8 Pets: No pets shall be allowed in Lot 1. No pets shall be allowed in
Lot 3-I unless on a leash.
ARTICLE IV
GENERAL
4.1 Enforcement: Any owner shall have the right to enforce, by any
proceeding at law or in equity, all restrictions, conditions, covenants,
reservations, liens, and charges now or hereafter imposed by the provisions of
this Declaration, and in such action shall be entitled to recover reasonable
attorneys' fees as are ordered by Court. Failure by any owner to enforce any
covenant or restriction herein contained shall in no event be deemed a waiver of
the right to do so thereafter. Any owner alleged to be in
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default of any provision hereof shall be given ten (10) days to cure any alleged
default before legal or disciplinary action may be taken. The owner(s) of both
properties and their tenants shall have the right to enforce or require
enforcement of this Agreement. This Agreement shall be binding upon and
enforceable against owners and all tenants of the owner(s).
4.2 Records: The managing owner shall keep accurate and complete books,
ledgers and records regarding the management and maintenance of the garage,
which shall be open to inspection at all times by all owners on reasonable
notice. The managing owner shall render accountings as often as requested by the
other owner(s) and shall provide a complete annual accounting and report no
later than sixty (60) days after the close of the calendar year.
4.3 Taxes: The managing owner shall pay the property taxes promptly prior
to delinquency of installments.
4.4 Term: The covenants and restrictions of this Declaration shall run with
and bind the Sobrato, Skyview and garage properties, and shall inure to the
benefit of and shall be enforceable by the owner of any such property subject to
this Declaration, its respective legal representatives, heirs, successors and
assigns, for a term of fifty (50) years from the date this Declaration is
recorded, after which time they shall be automatically extended for successive
periods of ten (10) years, unless an instrument in writing, signed by all of the
then owners of the lots, has been recorded within the year preceding the
beginning of each successive period of ten (10) years, agreeing to change said
covenants and restrictions in whole or in part, or to terminate the same.
4.5 Notices: Any notice permitted or required by this Declaration may be
delivered either personally or by mail. If delivery is by mail, it shall be
deemed to have been delivered seventy-two (72) hours after a copy of the same
has been deposited in the United States mail, first class or registered, postage
prepaid, addressed to the person to be notified at the current address given by
such person to the managing owner. Copies of any notices delivered hereunder
regarding any alleged default or other matters specifically requested shall be
given to any requesting lender that holds a first deed of trust against any lot
on the Map at the address that the lender has provided the managing owner.
4.6 Invalidity of Any Provision: Should any provision or portion hereof be
declared invalid or in conflict with any law of the jurisdiction where this
project is situated, the validity of all other provisions and portions hereof
shall remain unaffected and in full force and effect.
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4.7 Successors In Interest: This Declaration and the covenants,
conditions, easements and agreements contained herein shall be binding upon and
inure to the benefit of the parties and their permitted assigns and permitted
successors in interest, including one or more owners' associations which any of
the owners may create and to which any of the owners may assign all or a portion
of their rights and obligations hereunder. In the event that Skyview assigns it
rights and obligations to one or more owners' associations or owners, said
associations and/or owners shall designate a single representative who shall
exercise the rights of the owner of a one-half (1/2) undivided interest in Lot 2
on behalf of the individuals and associations who collectively own the one-half
(1/2) interest initially owned by Skyview. The rights and duties hereunder are
appurtenant to the respective properties and any transfer of a fee interest in
the property encumbered by this Agreement (other than a lease or a transfer for
security purposes only) transfers the rights and duties. From and after the date
of such transfer, the transferor shall have no further rights or duties
hereunder provided that the transferor shall remain liable for any breach of its
duties hereunder that occurred before the transfer.
4.8 Reciprocal Indemnity Provisions: Sobrato and Skyview each agree on
behalf of themselves and their respective agents, tenants, employees,
successors, and assigns, to forever release each other and their respective
agents, tenants, employees, successors, and assigns from all damages, claims,
causes of action, costs, liabilities, attorneys' fees, and expenses which are to
be covered by the insurance to be carried under this agreement or which are
actually compensated by insurance. Each party shall cause any insurance policy
carried by it to contain a valid waiver by the insurer of its right of
subrogation against all other parties thereto and said party's agents, tenants,
employees, successors, and assigns. Except as expressly set forth to the
contrary herein, Sobrato and Skyview each agree to hold the other party and its
agents, employees and contractors harmless from claims for injury and/or damage
arising out of their active negligence or wilfull misconduct.
4.9 Amendments: This Declaration may be amended by unanimous vote of the
owners of the property subject hereto. The owners agree to approve and adopt all
amendments reasonably required by the City of Mountain View and the Department
of Real Estate of the State of California. The provisions of section 2.3
pertaining to the exclusive use of certain parking spaces for certain persons
(as provided in Exhibit "A" attached hereto and incorporated by reference
herein) shall not be amended or revoked without the express written consent of
the City of Mountain View. Any amendment must
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be recorded in the Recorder's Office of the County of Santa Clara. No amendment
shall adversely affect the rights of the holder of any mortgage of record prior
to the recordation of such amendment.
4.10 Cooperation: Each party agrees to cooperate in making any revisions
to this Agreement that may be requested by any lender that holds or will hold a
first deed of trust on any lot shown on the Map, provided such revisions do not
materially affect any rights or duties hereunder.
SKYVIEW 2400-EL CAMINO REAL SOBRATO DEVELOPMENT COMPANY 850
A California Limited Partnership A California Limited Partnership
By: /s/ WALTER J. HARRINGTON By: /s/ JOHN MICHAEL SOBRATO
----------------------------- -----------------------------------
Walter J. Harrington John Michael Sobrato, A General
Partner
By: /s/ ROBERT GRANUM II
-----------------------------------
Robert Granum II, A General Partner
By: /s/ JOHN A. SOBRATO
-----------------------------------
John A. Sobrato as Trustee for the
John A. Sobrato and Susan A.
Sobrato 1979 Revocable Trust, A
General Partner
DATED: June 9, 1986
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[SEAL] MARY K. FRENCH
STATE OF CALIFORNIA ) NOTARY PUBLIC-CALIFORNIA
) ss. SANTA CLARA COUNTY
COUNTY OF Santa Clara ) My Comm. Expires July 31, 1988
On June 9, l986, before me, the undersigned, a Notary Public in and for
said State, personally appeared Walter J. Harrington, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person that
executed this instrument, on behalf of the partnership, and acknowledged to me
that the partnership executed it.
IN WITNESS WHEREOF I have hereunto set my hand and affixed my official
seal in the County of Santa Clara the day and year in this certificate first
above written.
/s/ MARY K. FRENCH
---------------------------------------------
Notary Public, State of California
[SEAL] MARY K. FRENCH
STATE OF CALIFORNIA ) NOTARY PUBLIC-CALIFORNIA
) ss. SANTA CLARA COUNTY
COUNTY OF Santa Clara ) My Comm. Expires July 31, 1988
On June 9, 1986, before me, the undersigned, a Notary Public in and for
said State, personally appeared John Michael Sobrato, personally known to me
(or proved to me on the basis of satisfactory evidence) to be the person that
executed this instrument, on behalf of the partnership, and acknowledged to me
that the partnership executed it.
IN WITNESS WHEREOF I have hereunto set my hand and affixed my official
seal in the County of Santa Clara the day and year in this certificate first
above written.
/s/ MARY K. FRENCH
---------------------------------------------
Notary Public, State of California
[SEAL] MARY K. FRENCH
STATE OF CALIFORNIA ) NOTARY PUBLIC-CALIFORNIA
) ss. SANTA CLARA, COUNTY
COUNTY OF Santa Clara ) My Comm. Expires July 31, 1988
On June 9, 1986, before me, the undersigned, a Notary Public in and for
said State, personally appeared Robert Granum II, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person that
executed this instrument, on behalf of the partnership, and acknowledged to me
that the partnership executed it.
IN WITNESS WHEREOF I have hereunto set my hand and affixed my official
seal in the County of Santa Clara the day and year in this certificate first
above written.
/s/ MARY K. FRENCH
---------------------------------------------
Notary Public, State of California
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<PAGE> 39
STATE OF CALIFORNIA )
) ss.
COUNTY OF Santa Clara )
On June 9, 1986, before me, the undersigned, a Notary Public in and for
said State, personally appeared John A. Sobrato, Trustee, personally known to me
(or proved to me on the basis of satisfactory evidence) to be the person that
executed this instrument, on behalf of the partnership, and acknowledged to me
that the partnership executed it.
IN WITNESS WHEREOF I have hereunto set my hand and affixed my official seal
in the County of Santa Clara the day and year in this certificate first above
written.
/s/ MARY K. FRENCH
---------------------------------------------
Notary Public, State of California
[SEAL] MARY K. FRENCH
NOTARY PUBLIC-CALIFORNIA
SANTA CLARA COUNTY
My Comm. Expires July 31, 1988
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TENANCY IN COMMON AND MAINTENANCE AGREEMENT,
DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS,
AND GRANT OF EASEMENTS
EXHIBIT "A"
Parking
Two hundred sixty-six (266) parking spaces in the garage (Lot 2) are reserved
for the exclusive use of the owners and occupants of Lots 4A, 5, 6A, and 7. The
blocks of spaces identified in the three (3) pages attached hereto as Exhibit
"A-1" are as follows:
No. of
Lot No. Parking Spaces Level
------- -------------- -----
4A 96 B & C
5 37 A
6A 96 B & C
7 37 A
Declarant and the owners of Lots 4A, 5, 6A, and 7 hereby specifically reserve
the right at any time in the future to make specific assignments of parking
spaces within the block of spaces hereby assigned to a particular lot to the
condominium owners within each lot in accordance with a condominium declaration
and condominium plan to be filed of record.
Sixty (60) spaces located in the garage (Lot 2) are reserved for the exclusive
use of the owner(s), visitors and occupants of Lot 1 all of the time (24 hours
per day). The block of sixty (60) spaces are identified on Exhibit "A-2"
attached hereto.
An additional four hundred (400) parking spaces within the garage, which spaces
are are identified on the three (3) pages attached hereto as Exhibit "A-3"
attached hereto, may be used by the owners, visitors and occupants of Lots
3-IIA, 3-IIB and 3-IIC, 4A, 5, 6A, and 7, between the hours of 6:00 P.M. and
7:30 A.M. on business days, and at any time on weekends and holidays, which use
will be shared with the owner/occupants of Lot 1 during the same time. Said four
hundred (400) spaces are exclusively reserved for the use of the owner(s),
visitors and occupant(s) of Lot 1 between 7:30 A.M. and 6:00 P.M. on business
days. Prohibition of resident parking in these spaces during such hours is to be
strictly enforced if parking congestion occurs on surrounding streets or
properties which results from this project, as determined by the City of
Mountain View.
The four hundred sixty (460) total spaces provided for the use of Lot 1 owners,
visitors and occupants as provided above, are to be available at no charge (in
addition to rental and fees paid under the applicable lease or leases) to the
occupants of the office building on Lot 1.
All of the parking spaces located within Lot 3-I are reserved for use by owners
and occupants of Lots 3-I, 3-IIA, 3-IIB and 3-IIC and 4A, 5, 6A and 7, and shall
be under the control of Skyview until conveyance of Lot 3-I to the owners of
Lots 4A, 5, 6A, and 7, or the condominium association at which time control
shall be assumed by the condominium association(s) created to manage Lots 4A, 5,
6A, and 7.
<PAGE> 41
[GRAPHIC]
SHARED 144 SPACES - PURPLE LEVEL C - EXHIBIT A-3
<PAGE> 42
[GRAPHIC]
SHARED 167 SPACES - PURPLE LEVEL B - EXHIBIT A-3
<PAGE> 43
[GRAPHIC]
SHARED 89 SPACES - PURPLE LEVEL A - EXHIBIT A-3
<PAGE> 44
[GRAPHIC]
ASK ONLY 60 SPACES - GREEN LEVEL A - EXHIBIT A-2
<PAGE> 45
[GRAPHIC]
SKYVIEW 96 SPACES - RED LEVEL C - EXHIBIT A-1
<PAGE> 46
[GRAPHIC]
SKYVIEW 96 SPACES - RED LEVEL B - EXHIBIT A-1
<PAGE> 47
[GRAPHIC]
SKYVIEW 74 SPACES - RED LEVEL A - EXHIBIT A-1
<PAGE> 48
SUBLEASE
THIS SUBLEASE ("Sublease"), dated as of March __, 1999, for reference
purposes only, is entered into by and between THE DIALOG CORPORATION, a Delaware
corporation, formerly Dialog Information Services, Inc., a California
corporation ("Sublessor"), and I-STORM, INC., a Nevada corporation
("Sublessee").
RECITALS
A. Sublessor leased certain premises ("Premises") including a
building containing approximately one hundred thirty three thousand, five
hundred (133,500) square feet (the "Building") located at the address commonly
known as 2440 El Camino Real, Mountain View, California, pursuant to a certain
Lease between Sublessor, as Tenant, and Sobrato Development Companies #850, a
California limited partnership (hereinafter "Master Lessor"), as Landlord,
dated March 10, 1994 (as may be amended or otherwise modified from time to
time, the "Master Lease"), a copy of which Master Lease is attached hereto as
EXHIBIT A. Capitalized terms herein not otherwise defined herein shall have the
same meanings as provided in the Master Lease.
B. Sublessor desires to sublease to Sublessee, and Sublessee
desires to sublease from Sublessor, a portion of the Premises upon the terms
and conditions provided for herein.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein, Sublessor and Sublessee covenant and agree as follows:
AGREEMENT
1. SUBLEASED PREMISES.
(a) Subject to the terms and conditions set forth herein,
Sublessor hereby subleases to Sublessee, and Sublessee hereby subleases from
Sublessor, approximately eleven thousand four hundred eighty-six (11,486)
rentable square feet. Such square footage includes space located on the fifth
floor of the Building (the "Subleased Premises"), as well as the nonexclusive
right to use, in common with Sublessor and other tenants of the building, the
Common Use Areas (as defined below). The Subleased Premises are more
particularly described in EXHIBIT B attached hereto.
(b) Sublessee and Sublessor hereby agree that the calculation
of the rentable square footage of the Subleased Premises includes an equitable
apportionment made by Sublessor based upon Sublessee's Pro-Rata Share (as
hereinafter defined), attributable to Sublessor's right to non-exclusive usage
of the Common Use Areas. "Common Use Areas" shall mean those areas located on
the first and fifth floors of the Building and designated as such on EXHIBIT C,
which Common Use Areas consist of a lobby area, cafeteria, locker rooms, rest
rooms and conference rooms. Sublessor and Sublessee hereby agree that
Sublessor's determination of the rentable square footage of the Subleased
Premises, as set forth herein, shall be conclusive for the purpose of this
Sublease.
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(c) Sublessee shall provide Sublessor with reasonable prior
written notice requesting use of any of the conference rooms comprising the
Common Use Areas. Sublessor and Sublessor shall work in good faith to establish
a schedule of use of such conference rooms mutually acceptable to all parties
possessing the right to non-exclusive use of such conference rooms.
2. TERM.
(a) The term of this Sublease (the "Term") shall commence on
March 23, 1999 (the "Commencement Date").
(b) Notwithstanding said Commencement Date, if for any
reason Sublessor cannot deliver possession of the Subleased Premises to
Sublessee in the condition required under this Sublease on or before said date,
Sublessor shall not be subject to any liability therefor, nor shall such failure
affect the validity of this Sublease or the obligations of Sublessee hereunder
or extend the term hereof; but in such case Sublessee shall not be obligated to
pay Rent (as hereinafter defined) or otherwise be liable to Sublessor until the
sixteenth (16th) day following the date that possession of the Subleased
Premises is tendered to Sublessee; provided, however that if Sublessee fails to
inform Sublessor on or before the date which is seven (7) business days prior to
the Commencement Date of the number of Sublessor's workstations which Sublessee
would like to retain in the Subleased Premises pursuant to a separate agreement
with Sublessor, and as a result of such failure, Sublessor is unable to deliver
possession of the Subleased Premises to Sublessee in the condition required
under this Sublease on or before the Commencement Date, then all of Sublessee's
obligations under this Sublease shall commence on the Commencement Date, except
for the payment of Rent, which obligation shall commence on April 1, 1999.
(c) The Term of this Sublease shall end on February 18, 2001
(the "Expiration Date"), unless earlier terminated in accordance with the terms
of this Sublease.
3. RENT.
(a) Throughout the Term of this Sublease, Sublessee shall pay
monthly rent ("Rent") to Sublessor, which Rent is comprised of Basic Rent (as
hereinafter defined) and Additional Rent (as hereinafter defined), in the
following amounts:
(i) Commencing on April 1, 1999, Sublessee shall pay
Sublessor an initial monthly basic rent ("Basic Rent") for the Subleased
Premises in the amount of Two and 45/100 Dollars ($2.45) per rentable square
foot. On the first anniversary of the Commencement Date and continuing for the
remainder of the Term, the monthly Basic Rent shall increase to the amount of
Two and 55/100 Dollars ($2.55) per rentable square foot.
(ii) In addition to Basic Rent, commencing upon April
1, 1999, Sublessee shall pay to Sublessor as additional rent ("Additional Rent")
Sublessee's pro rata share ("Sublessee's Pro-Rata Share") of expenses incurred
by Sublessor with respect to operating expenses for the Premises (including,
without limitation, costs incurred for utilities, building security and
janitorial services), common area maintenance costs, taxes and assessments,
costs of insurance procured by Master Lessor or Sublessor pursuant to Paragraph
12 of the Master Lease,
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and any and all additional expenses payable by Sublessor to Master Lessor
pursuant to the Master Lease (collectively, "Operating Expenses"). Sublessor and
Sublessee hereby agree that Sublessee's Pro-Rata Share shall be the quotient
derived by dividing the number of rentable square feet of the Subleased Premises
by 133,500. To the extent that Sublessor notifies Sublessee that any items
constituting Additional Rent are due and payable under the Master Lease on a
monthly basis, such Additional Rent shall be paid by Sublessee to Sublessor as
and when Basic Rent is paid. To the extent that such items constituting
Additional Rent are billed from time to time to Sublessor by Master Lessor, such
Additional Rent shall be paid by Sublessee to Sublessor within fourteen (14)
days after Sublessee's receipt from Sublessor of an invoice therefor, and
Sublessor shall thereupon promptly remit such Additional Rent to Master Lessor.
Sublessor hereby represents that the common area of the Building has been
maintained according to reasonable commercial real estate business practices
prior to the Commencement Date. Sublessee shall bear no responsibility for
payment of Additional Rent for common area maintenance costs relating to
maintenance required during, but deferred beyond, the period prior to the
Commencement Date or resulting from lack of reasonable maintenance prior to the
Commencement Date.
(b) Rent shall be payable to Sublessor in lawful money of
the United States, in advance, without prior notice, abatement, demand, or
offset, on or before the first day of each calendar month during the term
hereof. If any rental period does not constitute a full calendar month, then
Rent for that month shall be prorated on a daily basis based upon the calendar
month. All Rent shall be paid to Sublessor at the address specified for notice
to Sublessor in SECTION 20, below, or at such other place as Sublessor may
designate by notice to Sublessee. Notwithstanding the foregoing requirement for
payment of Rent on or before the first day of each calendar month, Sublessor
agrees to waive the late charges fee as defined in Section 6 of the Master Lease
in the event that all amounts due and payable are received from Sublessee by
Sublessor within five (5) days after the first day of each calendar month.
(c) In the event of any damage, casualty, or condemnation
affecting the Subleased Premises, Rent payable by Sublessee shall be abated
hereunder, but only to the extent that rent under the Master Lease is abated,
and Sublessee waives any right to terminate this Sublease in connection with
such damage, casualty, or condemnation except to the extent the Master Lease is
also terminated as to the Subleased Premises or any portion thereof.
(d) Notwithstanding any of the foregoing, Sublessor and
Sublessee agree that, on or before February 1, 2000, Sublessor shall determine
the aggregate Operating Expenses actually paid by Sublessee to Sublessor for the
period from April 1, 1999 to January 31, 2000. In the event that the aggregate
Operating Expenses paid by Sublessee to Sublessor over such time period exceeds
the product of (i) the monthly amount of Eight Thousand Forty and 20/100 Dollars
($8,040.20) (seventy cents per rentable square foot multiplied by 11,486
rentable square feet) and (ii) the number of months in the period, then
Sublessor shall notify Sublessee in writing that such excess will be used to
reduce Sublessee's Basic Rent payments commencing with the month of February of
2000 and until such excess is exhausted. In addition, as of the Expiration Date,
Sublessor shall determine the aggregate Operating Expenses actually paid by
Sublessee to Sublessor for the period from February 1, 2000 through the
Expiration Date. In the event that the aggregate Operating Expenses paid by
Sublessee to Sublessor over such time period exceeds the product of(a) the
monthly amount of Eight Thousand Four Hundred Ninety-Nine and 64/100
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Dollars ($8,499.64) (seventy-four cents per rentable square foot multiplied by
11,486 rentable square feet) and (b) the number of full months and prorations
for partial months in the period, then Sublessor shall reimburse Sublessee for
such excess on the Expiration Date. Further, if the Expiration Date occurs prior
to February 18, 2001, the periods noted above will be adjusted as appropriate.
4. SECURITY DEPOSIT
(a) Upon its execution of this Sublease, Sublessee shall
deposit with Sublessor, and shall maintain with Sublessor throughout the Term of
this Sublease, the sum of Twenty-Eight Thousand One Hundred and Forty and 70/100
Dollars ($28,140.70) as security for Sublessee's faithful performance of
Sublessee's obligations hereunder. Sublessor shall not be required to keep said
deposit separate from its general accounts, and no trust relationship is created
herein between Sublessor and Sublessee with respect to said security deposit.
(b) If Sublessee fails to pay rent or other charges due
hereunder, or otherwise defaults with respect to any provision of this Sublease,
Sublessor may use, apply, or retain all or any portion of said deposit for the
payment of any rent or other charge in default or for the payment of any sum to
which Sublessor may become obligated by reason of Sublessee's default, or to
compensate Sublessor for any loss or damage which Sublessor may suffer thereby.
If Sublessor so uses or applies all or any portion of said deposit, Sublessee
shall within ten (10) days after written demand therefor deposit cash with
Sublessor in an amount sufficient to restore said deposit to the full amount
hereinabove stated and Sublessee's failure to do so shall be a material breach
of this Sublease.
(c) If Sublessee performs all of Sublessee's obligations
hereunder, said security deposit, or so much thereof as has not theretofore been
applied by Sublessor, shall be returned, without payment of interest or other
increment for its use to Sublessee (or, at Sublessor's option, to the last
permitted assignee, if any, of Sublessee's interest hereunder) at the expiration
of the term hereof and within thirty (30) days after Sublessee has vacated the
Subleased Premises.
5. IMPROVEMENTS/CONDITION OF SUBLEASED PREMISES.
(a) Sublessor shall deliver the Subleased Premises to
Sublessee in its "as-is" condition, provided, that (i) as of the Commencement
Date, the roof and the building systems servicing the Subleased Premises
(including HVAC, mechanical and plumbing) shall be in good working order and
repair, (ii) Sublessor, at its expense, shall install a double-door entry to the
Subleased Premises, (iii) Sublessor, at its expense, shall repair any damage to
the floor of the Subleased Premises caused by the installation or removal of
Sublessor's workstations that currently reside thereon and (iv) the Subleased
Premises shall be free of dirt and debris and in "broom clean" condition. Except
as set forth in the immediately preceding sentence, Sublessor shall have no
obligation to make any alterations or improvements to the Subleased Premises.
(b) Sublessee has used due diligence in inspecting the
Subleased Premises and, subject to subparagraph (a) above, agrees to accept the
Subleased Premises in "as-is" condition and with all faults as of the date of
Sublessee's execution of this Sublease, without any
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representation or warranty of any kind or nature whatsoever, or any obligation
on the part of Sublessor to modify, improve or otherwise prepare the Subleased
Premises for Sublessee's occupancy.
(c) Sublessee shall be permitted, at its sole cost, subject
to its receipt of the Sublessee Improvement Allowance in accordance with the
terms of EXHIBIT D, to cause Sublessee's Initial Improvements (as defined in
EXHIBIT D) to be constructed in the Subleased Premises, provided that Sublessee
shall obtain the prior written consent of Sublessor to the same and shall comply
with both this Sublease (including, without limitation, EXHIBIT D hereto) and
the Master Lease with regard to such improvements, including, without
limitation, (i) obtaining the consent of Master Lessor with regard thereto, and
(ii) either removing or surrendering Sublessee's Initial Improvements with the
Subleased Premises at the expiration of this Sublease, as the case may be, in
strict accordance with Master Lessor's direction. In connection with Sublessee's
construction of Sublessee's Initial Improvements, Sublessor shall provide to
Sublessee the Sublessee Improvement Allowance in accordance with the terms of
EXHIBIT D.
6. MASTER LEASE.
(a) This Sublease shall be subject and subordinate to all of
the terms and provisions of the Master Lease, and Master Lessor shall have all
rights in respect of the Master Lease and the Subleased Premises as set forth
therein. Except for payments of rent required under the Master Lease (which
payments shall be made by Sublessor), and, except as otherwise provided herein,
Sublessee hereby assumes and agrees to perform for Sublessor's benefit, during
the term of this Sublease, all of Sublessor's obligations under the Master Lease
insofar as they relate to the Subleased Premises (hereinafter the "Assumed
Obligations"), which accrue during the term of this Sublease.
(b) Sublessee shall fully perform all of the Assumed
Obligations and shall indemnify, defend, protect, and hold harmless Sublessor
and Master Lessor from any and all liability, damages, liabilities, claims
proceedings, actions, demands and costs (including reasonable attorneys' fees)
resulting, directly or indirectly, from Sublessee's failure to perform the
Assumed Obligations.
7. INCORPORATION OF MASTER LEASE.
(a) Except as otherwise provided in this Sublease, all of the
terms and provisions of the Master Lease are incorporated into and made a part
of this Sublease, and the rights and obligations of the parties under the Master
Lease are hereby imposed upon the parties hereto with respect to the Subleased
Premises, the Sublessor being substituted for the "Landlord" in the Master
Lease, the Sublessee being substituted for the "Tenant" in the Master Lease, the
Subleased Premises being substituted for "Premises" in the Master Lease, and
"Sublease" being substituted for "Lease" in the Master Lease.
(b) Wherever there are time limits contained in the Master
Lease (i) calling or allowing for the service of notice by the "Tenant"
thereunder, (ii) pertaining to events of default by the "Tenant" thereunder, or
(iii) within which the "Tenant" thereunder must perform any act or observe any
term, covenant or condition thereunder, the same shall be deemed amended for
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the purposes of this Sublease to provide for time limits of two (2) days less
than those provided for in the Master Lease.
(c) Notwithstanding the foregoing, the following paragraphs
of the Master Lease are not incorporated herein: Paragraph 1, the first three
sentences of Paragraph 3, Paragraph 5, Paragraph 7, the first through third
sentences of Paragraph 8, the first two sentences of Paragraph 10, the first two
sentences of Paragraph 11(b), the final sentence of Paragraph 11(c), Paragraph
14, Paragraphs 26, 29E and 31, the second full paragraph of Paragraph 32 and
Paragraphs 37, 38, 40 and 44.
(d) For the purposes of incorporating the terms and
provisions of the Master Lease into this Sublease, the following changes to the
Master Lease terms shall apply to this Sublease (references are to Paragraphs of
the Master Lease):
PARAGRAPH COMMENTS/AMENDMENTS
3 Sublessee shall be responsible for payment of
Sublessee's Pro-Rata Share of fixed and variable costs
associated with the garage.
4 Notwithstanding anything to the contrary in Paragraph 4,
Sublessee shall not be permitted to use the Subleased
Premises for light manufacturing purposes. In addition,
Sublessee's right to erect any satellite/microwave
transmission devices on the roof of the Building
pursuant to Paragraph 4 shall be subject to Sublessee's
obtaining the prior written consent of Sublessor
(whose consent shall not be unreasonably withheld or
delayed) and of Master Lessor.
11.A. Notwithstanding anything to the contrary in Paragraph
11.A., Sublessee shall be obligated, at its sole cost,
to keep and maintain, repair and replace the interior of
the Subleased Premises in the condition required
thereunder. Sublessor shall keep and maintain, repair
and replace the exterior of the Subleased Premises and
the common areas of the Building as required under the
Master Lease and shall maintain the service contracts
required under Paragraph 11.A., and Sublessor shall
charge Sublessee's Pro-Rata Share of all such costs to
Sublessee as Additional Rent.
12.C. The first sentence of Paragraph 12.C shall be amended to
replace the $5,000,000 general aggregate limit for
Sublessee's insurance coverage with a $2,000,000 general
aggregate limit. In addition, Sublessee shall name the
Master Lessor and Sublessor as additional insureds on any
and all insurance policies that are required under the
Master Lease.
(e) Notwithstanding the foregoing, Sublessee hereby agrees
to waive, release, indemnify, defend and hold Master Lessor and Sublessor
harmless to the same extent as Sublessor waives, releases, indemnifies and holds
Master Lessor harmless pursuant to the Master Lease.
6.
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8. SUBLESSOR'S OBLIGATIONS.
(a) Except as expressly otherwise provided herein, Sublessor
shall have no obligation to Sublessee with respect to the Subleased Premises or
the performance by Master Lessor of any obligations of Master Lessor under the
Master Lease. Sublessee understands and recognizes that certain services are
required to be performed by Master Lessor under the Master Lease. Sublessee
shall not seek nor require Sublessor to perform any of such services, nor shall
Sublessee make any claim upon Sublessor for any damages which may arise by
reason of any breach or negligence, whether by omission or commission, by Master
Lessor or its agents in the performance (or nonperformance) of such services.
Notwithstanding the incorporation hereunder of certain provisions of the Master
Lease, including, without limitation, Paragraphs 11, 12(B) and 28, Sublessor
does not assume the obligations of Master Lessor under the Master Lease, but
agrees that, if and to the extent that the Master Lease requires Master Lessor
to provide utilities, insurance, maintenance, repairs, rebuilding, upgrading or
any other services in connection with the operation of the Subleased Premises,
Sublessee may notify Sublessor of any failure of Master Lessor to provide such
services and Sublessor shall thereafter use commercially reasonable efforts to
enforce Sublessor's rights under the Master Lease for the benefit of Sublessee,
provided that Sublessor shall not be required to incur any material costs or
expenses in connection therewith. Sublessee hereby expressly waives all rights
to make repairs at the expense of Sublessor or Master Lessor as provided by
statute or otherwise.
9. CONSENT OF MASTER LESSOR. If Sublessee desires to take any
action which requires the consent of Master Lessor pursuant to the terms of the
Master Lease, including, without limitation, the making of alterations or the
possession of hazardous materials, then, notwithstanding anything to the
contrary herein, (a) Sublessor, independently, shall have the same rights of
approval or disapproval as Master Lessor has under the Master Lease, and (b)
Sublessee shall not take any such action until it obtains the consent of both
Sublessor and Master Lessor, and (c) Sublessee shall request that Sublessor
obtain Master Lessor's consent on Sublessee's behalf, unless Sublessor and
Master Lessor agree that Sublessee may contact Master Lessor directly with
respect to the specific action for which Master Lessor's consent is required.
Any consent required of Sublessor conclusively shall be deemed reasonably
withheld, if consent also is required of the Master Lessor, and Master Lessor
withholds Master Lessor's consent.
10. INDEMNITY. Sublessee shall indemnify, defend, protect, and hold
Sublessor and Master Lessor harmless from and against all actions, claims,
demands, costs, liabilities, losses, reasonable attorneys' fees, damages,
penalties, and expenses (collectively "Claims") which may be brought or made
against Sublessor or Master Lessor or which Sublessor or Master Lessor may pay
or incur to the extent caused by (i) a breach of this Sublease or the Master
Lease by Sublessee, (ii) any violation of law by Sublessee or its employees,
agents, contractors or invitees (collectively, "Agents") relating to the use or
occupancy of the Subleased Premises or the Premises, (iii) any act or omission
by Sublessee or its Agents resulting in contamination of any part or all of the
Subleased Premises or the Premises by any hazardous materials or substances, or
(iv) the negligence or willful misconduct of Sublessee or its Agents.
11. ASSIGNMENT AND SUBLETTING. Sublessee shall have the right to
assign this Sublease or sublet all or a portion of the Subleased Premises with
the prior written consent of both Sublessor (whose approval shall not be
unreasonably withheld or delayed) and Master
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Lessor, in accordance with the terms of the Master Lease and this Sublease.
Notwithstanding any of the foregoing, in the event that Sublessee wishes to
assign this Sublease or sub-sublease any portion of the Subleased Premises,
Sublessee shall provide Sublessor with written notice of Sublessee's desire to
assign this Sublease or sub-sublease such portion of the Subleased Premises
prior to engaging in any efforts to market the same. Following Sublessor's
receipt of such notice, Sublessor shall have ten (10) days in which it may elect
to terminate this Sublease with respect to the space described in Sublessee's
notice (in the case of termination as to a portion of the Subleased Premises,
Sublessee's obligations under the Sublease as to the balance of the Subleased
Premises remaining shall be proportionately reduced). In the event that
Sublessor fails to timely exercise such right of recapture, Sublessee shall have
the right to market the Sublease for assignment or such portion of the Subleased
Premises for sub-sublease. Following Sublessor's receipt of all agreements,
statements and additional required information in connection with any proposed
assignment or sub-sublease, Sublessor shall have a period of ten (10) business
days within which to notify Sublessee in writing that the Sublessor elects (i)
to permit Sublessee to assign/sublet such space to the named assignee/subtenant
on the terms and conditions set forth in the notice or (ii) to refuse consent.
Sublessor agrees that Sublessor's consent with respect thereto shall not be
unreasonably withheld, conditioned or delayed, provided that Sublessor's consent
shall conclusively be deemed reasonably withheld, if consent also is required of
Master Lessor, and Master Lessor withholds such consent.
12. EARLY TERMINATION. Upon any termination of the Master Lease,
this Sublease shall also terminate, and, upon such termination, Sublessor shall
return to Sublessee any amounts of the security deposit which have not otherwise
been applied and any amounts prepaid by Sublessee to Sublessor which have not
been credited towards the payment of rent or other expenses. To the extent the
Master Lease grants Sublessor any discretionary rights to terminate the Master
Lease, whether due to casualty, cancellation, or otherwise, Sublessor shall be
entitled to exercise or not exercise such right in its sole discretion.
13. SURRENDER OF SUBLEASED PREMISES. Upon the expiration or earlier
termination of this Sublease, Sublessee shall surrender the Subleased Premises
in the condition required for surrender under the Master Lease.
14. SIGNAGE. Sublessee shall not place or permit to be placed, in,
upon, or about the Building any signs or advertisements not approved by
Sublessor in its sole discretion. Sublessor agrees to provide, at its sole cost,
signage for Sublessee in the main lobby area on the ground floor and outside
Sublessee's main entryway to the Subleased Premises on the fifth floor of the
Building.
15. PARKING. Sublessee shall be entitled to the non exclusive and
unassigned use of 3.2 parking spaces per 1,000 rentable square feet of leased
space. Sublessee shall not be charged for the use of such parking spaces
throughout the Term.
16. UTILITIES. Sublessor shall provide heating and air conditioning
to the Subleased Premises during the following standard building hours of
operation: 6:00 a.m. to 6:00 p.m., Monday through Friday; 7:00 a.m. to 3:00
p.m., Saturday and Sunday. In addition, Sublessor shall provide, upon prior
notice from Sublessee within the time periods set forth in the immediately
following sentence, heating and air conditioning during hours outside of
standard
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building hours ("Excess Services"), and Sublessee shall pay to Sublessor as
Additional Rent the costs actually incurred by Sublessor in providing such
Excess Services. Sublessee shall provide prior notice to Sublessor of any
requirements for Excess Services (a) no later than 2 p.m. on any weekday for
Excess Services required to be provided during such weekday after 6 p.m. and
(b) no later than 2 p.m. on any Friday for Excess Services required to be
provided at any time during the immediately ensuing weekend. The cost of all
utilities serving the Subleased Premises shall be passed through to Sublessee
as Additional Rent, to the extent any such utility is not being directly
provided to Sublessee by the utility company. Sublessor reserves the right to
cause to be installed meters to separately monitor the utility usage of
individual tenants. If Sublessor has meters so installed, then the cost passed
through to tenants shall not be a pro-rata allocation, but shall be based upon
actual consumption. Sublessor shall not be liable for a loss of or injury to
property, however occurring, through or in connection with or incidental to
furnishing or failure to furnish any utilities to the Subleased Premises, and
Sublessee shall not be entitled to abatement or reduction of any portion of
Rent as a result thereof.
17. NO THIRD PARTY RIGHTS. The benefit of the provisions of this
Sublease is expressly limited to Sublessor and Sublessee. Under no
circumstances will any third party be construed to have any rights as a third
party beneficiary with respect to any of said provisions; provided, however,
that Master Lessor shall be entitled to the benefit of Sublessee's (a)
assumption of Sublessor's obligations, as "Tenant" under the Master Lease,
pursuant to SECTION 6 above, and (b) indemnities set forth in this Sublease.
18. CONFLICTS. In the event of any conflict between the
incorporated provisions of the Master Lease and the Sublease, the provisions of
this Sublease shall govern and control.
19. BROKERAGE. Each party warrants and represents to the other that
such party has not retained the services of any real estate broker, finder or
any other person whose services would form the basis for any claim for any
commission or fee in connection with this Sublease or the transactions
contemplated hereby, except for the following parties: Sublessor represents
that it has retained CB Richard Ellis ("CB"), and Sublessee represents that it
has retained Allhouse Deaton ("Allhouse"). Sublessor shall pay directly to CB
its fees due on account hereof, in accordance with its listing agreement.
Allhouse shall look solely to CB for payment of its commission or fee in
connection with this Sublease. Each party agrees to save, defend, indemnify and
hold the other party free and harmless from any breach of its warranty and
representation as set forth in this paragraph, including the other party's
reasonable attorneys' fees.
9.
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20. NOTICES.
(a) Notices and other communications hereunder shall be in
writing and shall be given or made by personal delivery, certified mail or
reputable overnight courier addressed to the parties at their respective
addresses set forth below, or at any other address which either party may
hereafter designate for such purpose by a written notice; it being expressly
understood that as of the Commencement Date, all notices shall be sent to the
following addresses:
TO SUBLESSOR AT: The Dialog Corporation
2440 West El Camino Real
Mountain View, CA 94040-1400
Attn: Denise Bryant, Esq.
WITH COPY TO: Cooley Godward LLP
1 Maritime Plaza
San Francisco, CA 94111
Attn: Felice Liang
TO SUBLESSEE AT: (prior to the Commencement Date)
I-Storm, Inc.
480 Cowper Street
Palo Alto, CA 94301
Attn: President
(on and after the Commencement Date)
At the Subleased Premises
Notices shall be deemed received on the date of actual delivery (or refusal to
accept delivery) as indicated on the return receipt or airbill.
21. COUNTERPARTS. This Sublease may be executed in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
all of which together shall constitute one and the same instrument.
22. EXHIBITS. All exhibits referred to in this Sublease are
attached hereto and incorporated herein by reference.
23. MASTER LESSOR CONSENT. This Sublease is subject to the consent
of the Master Lessor, pursuant to Paragraph 29 of the Master Lease.
24. MEDIATION/BINDING ARBITRATION. If a disagreement arises
regarding this Sublease or in the event that any claim is made related to
performance by Sublessor or Sublessee under this Sublease, the parties hereto
agree to participate in and submit this matter to nonbinding mediation as a
condition to initiating any action. If the matter is not resolved by such
process, any controversy or claim arising out of or relating to the Sublease
shall be resolved by binding arbitration in accordance with the rules set forth
in California Code of Civil Procedure Sections 1280, et seq. If arbitration is
required, the parties shall be limited to one deposition by
10.
<PAGE> 58
each side. No other depositions, nor any other form of discovery, shall be
conducted by either side. The purpose of this provision is to limit the costs
of arbitration for both sides. If arbitration is required, it shall be final
and binding and it is understood that there shall be no jury and Sublessor and
Sublessee, by accepting this mediation/binding arbitration provision, expressly
waive any and all rights to a jury.
IN WITNESS WHEREOF, the parties have executed this Sublease as of the
date first written above.
THE DIALOG CORPORATION, I-STORM, INC.,
a Delaware corporation, a Nevada corporation.
formerly Dialog Information Services, Inc.
By: By: /s/ ROBERT L. TOMZ
---------------------------------- ----------------------------------
Robert L. Tomz
Its: Its: VP & CFO
--------------------------------- ---------------------------------
By: By:
---------------------------------- ----------------------------------
Its: Its:
--------------------------------- ---------------------------------
11.
<PAGE> 59
EXHIBIT A
MASTER LEASE
A-1.
<PAGE> 60
EXHIBIT B
SUBLEASED PREMISES
B-1.
<PAGE> 61
[DIAGRAM]
[ ]Fifth Floor Sublease Premises
[ ]Common Use Area (Floor)
Fifth Floor
--------------------------------------------------------------------------------
2440 El Camino, Mountain View EXHIBIT B
<PAGE> 62
[DIAGRAM]
[ ]Common Use Area (Floor)
[ ]Common Use Area (Building)
[ ]Common Use Area (Conference Facilities)
Ground Floor
--------------------------------------------------------------------------------
2440 El Camino, Mountain View EXHIBIT C
<PAGE> 63
EXHIBIT C
COMMON USE AREAS
C-1.
<PAGE> 64
EXHIBIT D
WORK LETTER
1. SUBLESSEE'S INITIAL IMPROVEMENTS. Sublessee shall construct, furnish or
install within the Subleased Premises, at its sole cost and expense, in
compliance with its obligations under the Master Lease and the Sublease, all
improvements, equipment or fixtures that are necessary for Sublessee's use and
occupancy of the Premises (the "Sublessee's Initial Improvements"). The
construction, furnishing and installation of Sublessee's Initial Improvements,
is referred to herein as the "Improvement Work". The Improvement Work shall be
performed in accordance with the following provisions:
a. Sublessee will be responsible for delivery to Sublessor of the
final space plans, the basic engineering information and the final working
drawings and specifications with respect to the Improvement Work (collectively,
"Sublessee's Final Plans") by April 1, 1999. Sublessee shall cause all
Sublessee's Final Plans to be prepared by licensed architects, and where
appropriate, licensed mechanical, electrical and structural engineers.
b. Sublessee's Final Plans shall be subject to Sublessor's
approval, which approval shall not be unreasonably withheld. If Sublessor
disapproves Sublessee's Final Plans, or any portion thereof, Sublessor shall
promptly notify Sublessee thereof and of the revisions that Sublessor
reasonably requires in order to obtain Sublessor's approval. As promptly as
reasonably possible thereafter, but in no event later than seven (7) days after
Sublessor's notice, Sublessee shall submit to Sublessor plans and
specifications incorporating the revisions required by Sublessor. Said
revisions shall be subject to Sublessor's approval, which shall not be
unreasonably withheld. This procedure shall be repeated until Sublessee's
Final Plans are finally approved by Sublessor and written approval has been
received by Sublessee. The final plans and specifications approved by
Sublessor, shall be referred to as the "Approved Plans".
c. Sublessee shall diligently obtain all building and other
permits, licenses and other approvals (collectively, "Permits") necessary to
construct the Improvement Work in compliance with all applicable laws, rules,
codes, standards and regulations (collectively, "Applicable Laws") prior to the
commencement of such work. Sublessee's Initial Improvements shall be diligently
constructed in compliance with the Approved Plans, with all of the terms and
conditions of the Master Lease and Sublease and with all Applicable Laws.
d. Prior to commencing construction, Sublessee shall deliver to
Sublessor evidence of insurance as called for hereinbelow and executed copies
of the applicable Permits for such work.
e. After final approval of the Approved Plans by Master Lessor
and Sublessor, Sublessee shall proceed promptly to commence performance of the
Improvement Work. Sublessee's contractors and subcontractors shall be
acceptable to and approved in writing by Sublessor, which approval shall not be
unreasonably withheld or delayed, except that Sublessee hereby agrees to use
Newcomb Mechanical and Access Electric for its HVAC and electrical contractors,
respectively.
D-l.
<PAGE> 65
f. Sublessee shall hire its own general contractor ("Contractor")
to complete Sublessee's Initial Improvements, which Contractor shall provide
labor and materials bond(s) reasonably satisfactory to Sublessor and carry
insurance coverage in an amount and form and issued by a carrier reasonably
satisfactory to Sublessor, endorsed to show Sublessor as an additional insured.
Sublessee shall furnish to Sublessor a copy of the executed contract between
Sublessee and Contractor covering all of Sublessee's obligations under this
EXHIBIT D.
g. Sublessor shall have the right to post in a conspicuous
location on Sublessee's Premises, as well as record with the county recorder, a
Notice of Nonresponsibility.
h. Sublessee shall, upon completion of its work, submit to
Sublessor two (2) complete sets of plans (one (1) reproducible) and
specifications covering all of the Improvement Work, including architectural,
electrical, and plumbing, as built.
2. EVIDENCE OF COMPLETION OF IMPROVEMENT WORK. Upon the completion of the
Improvement Work, Sublessee shall:
a. Submit to Sublessor a detailed breakdown of Sublessee's final
and total construction costs, together with receipted evidence showing payment
thereof, satisfactory to Sublessor.
b. Submit to Sublessor certifications from Contractor and
Sublessee's architect that the Improvement Work has been substantially
completed in accordance with the Approved Plans.
c. Submit to Sublessor copies of final lien releases from all
contractors and subcontractors furnishing labor or services.
d. Submit to Sublessor all evidence reasonably available from
governmental authorities showing compliance with any and all other laws, orders
and regulations of any and all governmental authorities having jurisdiction
over the Subleased Premises, including, without limitation, authorization for
physical occupancy of the Subleased Premises.
d. Submit to Sublessor the as-built plans and specifications
referred to above.
3. SUBLESSEE IMPROVEMENT ALLOWANCE. Subject to Sublessee's satisfaction of
the requirements of this PARAGRAPH 3, Sublessor shall provide Sublessee with a
cash tenant improvement allowance (the "Sublessee Improvement Allowance") in
an amount of up to Two Dollars ($2.00) per rentable square foot for the
Subleased Premises, which may be applied to payments in respect of
architectural and engineering fees, consultants, legal fees, moving expenses,
equipment or communication requirements and hard costs of construction in
connection with the Improvement Work.
a. Sublessor shall make payment to Sublessee of an amount up to
the amount of the Sublessee Improvement Allowance due Sublessee, provided that,
(i) no default exists under the Sublease, (ii) no lien has been filed with
respect to the Improvement Work that has not been
D-2
<PAGE> 66
released, (iii) Sublessee is in compliance with all Permits, (iv) all insurance
required hereunder, under the Master Lease and under the Sublease, is in full
force and effect and (v) Sublessee has submitted to Sublessor all items
required pursuant to PARAGRAPH 2 above.
b. Sublessor shall not be obligated to make payments in excess of
the Sublessee Improvement Allowance. Sublessee shall bear and pay any and all
costs of the Improvement Work in excess of the Sublessee Improvement Allowance.
D-3