California-San Jose-6331 San Ignacio Lease - Berg & Berg Developers and On Command Video
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STANDARD FORM LEASE
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PARTIES: This Lease, executed in duplicate at Cupertino, California on June __,
1996, by and between Berg & Berg Developers, a California General Partnership,
and On Command Video, a California Corporation, hereinafter called respectively
Lessor and Lessee, without regard to number or gender.
USE: Witnesseth: That Lessor hereby leases to Lessee, and Lessee hires from
Lessor, for the purpose of conducting therein office, research and development,
light manufacturing, and warehouse activities, and any other legal activity;
and for no other purpose without obtaining the prior written consent of Lessor.
PREMISES: The real property with appurtenances as shown on Exhibit A (the
"Premises") situated in the City of San Jose, County of Santa Clara, State of
California, and more particularly described as follows:
95,000 square feet of building (the "Building"), including all
improvements thereto, as shown on Exhibit A, including the right to
use up to 378 unreserved parking spaces and 36,000 square foot of
warehouse space to be constructed on the Premises as shown on Exhibit
A.3. The address for the Premises is 6331 San Ignacio, San Jose,
California. Lessee's pro-rata share of the Building is 100%.
TERM: The term shall be for eighty-four (84) months unless extended pursuant
to Section 35 of this Lease (the "Lease Term"), commencing on the 1st day of
September, 1996 (the "Commencement Date"), and ending on the 31st day of
August, 2003.
RENT: Base rent shall be payable in monthly installments as follows:
Base rent Estimated CAC* Total
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Months 1 through 12 $98,250 $16,471* $114,721
Monthly base rent to increase by 3% on the anniversary of the Commencement Date
each year during the Lease Term over the prior year's rent.
* CAC charges to be adjusted per Common Area Charges Section below.
COMMON AREA CHARGES: Lessee shall pay to Lessor, as additional Rent, an amount
equal to its pro rata share of the total common area charges of the Project and
one hundred percent (100%) of the total common area charges for the Building
(the common area charges for the Project and the common area charges for the
building collectively referred to herein as ("CAC")). Lessee shall pay to
Lessor as Rent, on or before the first day of each calendar month during the
Lease Term, subject to adjustment and reconciliation as provided hereinbelow,
the sum of Sixteen Thousand Five Hundred Dollars ($16,500), said sum
representing Lessee's estimated monthly payment of Lessee's percentage share of
CAC. It is understood and agreed that Lessee's obligation under this paragraph
shall be prorated to reflect the Commencement Date and the end of the Lease
Term. Upon execution of this Lease, Lessee shall deposit with Lessor the first
month's estimated CAC.
Lessee's estimated monthly payment of CAC payable by Lessee during the calendar
year in which the Lease commences is set forth above. At or prior to the
commencement of each succeeding calendar year term (or as soon as practical
thereafter), Lessor shall provide Lessee with Lessee's estimated monthly
payment for CAC which Lessee shall pay to Lessor as Rent. Within 120 days of
the end of the calendar year and the end of the Lease Term, Lessor shall
provide Lessee a statement of actual CAC incurred including capital reserves
for the preceding year or other applicable period in the case of a termination
year. If such statement shows that Lessee has paid less than its actual
percentage, then Lessee shall on demand pay to Lessor the amount of
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such deficiency. If such statement shows that Lessee has paid more than its
actual percentage, then Lessor shall, at its option, promptly refund such
excess to Lessee or credit the amount thereof to the Rent next becoming due
from Lessee. Lessor reserves the right to revise any estimate of CAC if the
actual or projected CAC show an increase or decrease in excess of 10% from an
earlier estimate for the same period. In such event, Lessor shall provide a
revised estimate to Lessee, together with an explanation of the reasons
therefor, and Lessee shall revise its monthly payments accordingly. Lessor's
and Lessee's obligation with respect to adjustments at the end of the Lease
Term or earlier expiration of this Lease shall survive the Lease Term or
earlier expiration.
As used in this Lease, CAC shall include but are not limited to, (i) items
specified as CAC items in Paragraphs 5(b), 6, 9, 16 and 31; (ii) utility costs
related to the common areas of the Project (the "Project" is shown on Exhibit
A.2) (iii) all costs and expenses including but not limited to supplies,
materials, equipment and tools used or required in connection with the
operation and maintenance of the Project; (iv) licenses, permits and inspection
fees; (v) all other costs incurred by Lessor in maintaining and operating the
Project; (vi) all reserves for capital replacements; and (vii) an amount equal
to two and one-half percent (2.5%) of the aggregate of all CAC, as
compensation for Lessor's accounting and processing services. Lessee shall
have the right to review the CAC applicable to this Lease annually.
SECURITY DEPOSIT: Lessee shall deposit with Lessor the sum of One Hundred
Fourteen Thousand Seven Hundred Twenty-One Dollars ($114,721) (the "Security
Deposit"). The Security Deposit shall be held by Lessor as security for the
faithful performance by Lessee of all of the terms, covenants, and conditions
of this Lease applicable to Lessee. If Lessee commits a default as provided
for herein, including but not limited to a default with respect to the
provisions contained herein relating to the condition of the Premises, Lessor
may (but shall not be required to) use, apply or retain all or any part of the
Security Deposit for the payment of any amount which Lessor may spend by reason
of default by Lessee. If any portion of the Security Deposit is so used or
applied, Lessee shall, within ten days after written demand therefor, deposit
cash with Lessor in an amount sufficient to restore the Security Deposit to its
original amount. Lessee's failure to do so shall be a default by Lessee. Any
attempt by Lessee to transfer or encumber its interest in the Security Deposit
shall be null and void. Upon execution of this Lease, Lessee shall deposit
with Lessor the Security Deposit. Notwithstanding the above, Lessor agrees to
waive the requirement for Lessee to make a security deposit provided Lessee's
shareholder's equity exceeds $25 million. If at any time during this Lease,
Lessee's shareholder's equity is less than $25 million, Lessee shall deposit
with Lessor the Security Deposit referenced above within ten days after the
issuance of Lessee's financial statements indicating the reduction in
shareholder's equity below $25 million. If Lessee fails to make the Security
Deposit as required, Lessee shall be deemed to be in default per Section 14.1
(a) of this Lease.
LATE CHARGES: Lessee hereby acknowledges that a late payment made by Lessee to
Lessor of Rent and other sums due hereunder will cause Lessor to incur costs
not contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited to, processing
and accounting charges, and late charges, which may be imposed on Lessor
according to the terms of any mortgage or trust deed covering the Premises.
Accordingly, if any installment of Rent or any other sum due from Lessee is not
received by Lessor or Lessor's designee within ten (10) days after such amount
is due, Lessee shall pay to Lessor a late charge equal to five (5%) percent of
such overdue amount. The parties hereby agree that such late charge represents
a fair and reasonable estimate of the costs Lessor will incur by reason of late
payments made by Lessee. Acceptance of such late charges by Lessor shall in no
event constitute a waiver of Lessee's default
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with respect to such overdue amount, nor shall it prevent Lessor from
exercising any of the other rights and remedies granted hereunder.
QUIET ENJOYMENT: Lessor covenants and agrees with Lessee that upon Lessee
paying Rent and performing its covenants and conditions under this Lease,
Lessee shall and may peaceably and quietly have, hold and enjoy the Premises
for the Lease Term, subject, however, to the rights reserved by Lessor
hereunder.
COMMENCEMENT DATE MEMORANDUM: When the actual Commencement Date is determined,
the parties shall execute a Commencement Date Memorandum setting forth the
Commencement Date, the expiration date of the Lease Term and the actual square
footage of the Warehouse and any required adjustments to base rent and CAC, but
failure to do so shall not affect the continuing validity and enforceability of
this Lease, which shall remain in full force and effect.
IT IS FURTHER MUTUALLY AGREED BETWEEN THE PARTIES AS FOLLOWS:
1. POSSESSION: Possession shall be deemed tendered and the Lease Term shall
commence upon the first to occur of the following (the "Commencement Date"):
(i) the Premises are Substantially Complete or (ii) Lessee occupies the
Premises and commences to conduct business operations or (iii) if Lessor is
prevented from or delayed in completing its work under Section 2 of this Lease
due to Lessee Delays, such work shall be deemed Substantially Complete as of
the date on which it would have been Substantially Complete had it not been for
such Lessee Delays. It is the intention of Lessee and Lessor that September 1,
1996 shall be the Commencement Date.
"Substantially Complete" shall mean that: (i) Lessor has tendered possession of
Premises to Lessee, (ii) Lessor has met all legal requirements for occupancy,
(iii) The Lessee Interior Improvements are materially complete per the approved
plans, exclusive of telephone or other communication systems, punchlist items
and there remains no incomplete or defective items of work which would
materially adversely affect Lessee's intended use of the Premises and (iv) said
interior of the building is in a "broom clean" condition.
2. LESSEE'S IMPROVEMENTS: The "Lessee Interior Improvements" shall be defined
as all items as shown on attached Exhibit B and shall be constructed by
independent contractors to be employed by and under the supervision of Lessor,
in accordance with complete plans and specifications prepared by Lessor for
submission to the City of San Jose ("Lessee Improvement Plans"), complete with
all mechanical and electrical design, approved by Lessee, and then to be
attached hereto as Exhibit B.1. Lessee and its designated representatives,
shall at all times during the construction of the Lessee Interior Improvements
have access to the Premises to monitor the progress of construction and
Lessor's compliance with its obligation hereunder; provided however, that such
access shall not unreasonably interfere with the activities of Lessor or its
contractors.
The "Warehouse" shall be defined as the improvements shown on attached Exhibit
C and shall be constructed by independent contractors to be employed by and
under the supervision of Lessor, in accordance with complete plans and
specifications prepared by Lessor for submission to the City of San Jose
("Warehouse Plans"), complete with all mechanical and electrical design,
approved by Lessee, and then to be attached hereto as Exhibit C.1.
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Lessor shall be responsible for ensuring that the Lessee Interior Improvements
and Warehouse conform to the approved plans and all applicable statutes, rules,
regulations, ordinances, and San Jose Building Department interpretations
necessary for occupancy.
Lessor shall be responsible for and shall pay the cost of the Lessee Interior
Improvements up to the amount shown on Exhibit B of One Million Two Hundred
Thousand Dollars ($1,200,000) (the "TI Allowance"). In the event the cost of
the Lessee Interior Improvements is more than the TI Allowance, the monthly
base rent under the Lease shall be increased by $16.60 per month for every
$1,000 dollars the costs exceed the TI Allowance up to a maximum of $250,000.
Costs in excess of the TI Allowance and $250,000 overage, if any, will not be
incurred without advance approval of Lessee. Any approved cost over the TI
Allowance and $250,000 overage shall be paid for by Lessee in cash within
fifteen (15) days after Lessor has provided Lessee with evidence that the work
approved is complete. Lessor shall be entitled to a construction management
fee covering its overhead and profit on the TI Allowance and $250,000 overage
of six percent (6%). All costs for Lessee Interior Improvements shall be
documented and subject to verification by Lessee.
Lessor shall be responsible for and shall pay the cost of the Warehouse as a
turnkey project as defined on attached Exhibit C. In the event the scope of
the Warehouse improvements increases beyond that shown on Exhibit C, the
monthly base rent under the Lease shall be increased by $16.60 per month for
every $1,000 dollars of Warehouse improvements in addition to the turnkey
improvements described on Exhibit C, up to a maximum of One Hundred Fifty
Thousand Dollars ($150,000). Warehouse improvements in additon to the turnkey
improvements shown on Exhibit C with a cost exceeding the $150,000 overage, if
any, will not be incurred without advance approval of Lessee. Any approved
cost in addition to the turnkey Warehouse improvements described on Exhibit C
and the $150,000 overage shall be paid for by Lessee in cash within fifteen
(15) days after Lessor has provided Lessee with evidence that the work approved
is complete. Lessor shall be entitled to a construction management fee
covering its overhead and profit on the Warehouse improvements and the $150,000
overage of six percent (6%). All costs for the Warehouse improvements shall be
documented and subject to verification by Lessee.
Lessor shall use its best efforts to cause the Commencement Date of the initial
term to occur not later than September 1, 1996. If the Commencement Date has
not occurred by October 1, 1996, Lessee shall receive one day of base rent
abatement for each day after October 1, 1996 until the Commencement Date.
Lessor and Lessee agree that having a Commencement Date after October 1, 1996
will cause Lessee and Lessor to incur costs not contemplated by this Lease, the
exact amount of which will be extremely difficult to ascertain. Accordingly,
the parties hereby agree that Lessee's right to the abatement of base rent
specified herein represents a fair and reasonable settlement for both parties
and neither party shall have further liability to the other for any damages.
If the Commencement Date has not occurred by November 1, 1996, Lessee may at
its sole option, by written notice to Lessor, have the right to terminate this
Lease at any time after November 1, 1996 until the Commencement Date.
Notwithstanding anything to the contrary herein, all dates stated herein shall
be extended for the number of days Lessor is unable to Substantially Complete
the Premises as a result of delays (i) due to governmental actions (other than
governmental action of refusing to approve work which fails to comply with the
law or the building permit) which occurs after receipt of normal building
permits, (ii) due to acts of God, (iii) due to circumstances beyond Lessor's
control, (iv) after thirty (30) days that the City of San Jose requires to
issue a building permit after plan submittal by Lessor, and (v) due to Lessee
Delays. "Lessee Delays" means a delay in Substantial Completion resulting from
(a) Lessee's failure to meet Lessee's deadlines for approval as shown on
Exhibit E, (b) delays due to change orders, (c) delays due to Lessee's failure
to meet the deadlines for approving any plans or change orders, and (d) delays
because of the inability to obtain any product, materials, design, color,
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fitting, or finish pursuant to this Section 2. Lessee shall have a minimum of
3 business days to approve or disapprove any preliminary plans or change orders
and a minimum of 10 business days to approve or disapprove any final plans. If
Lessee does not disapprove any plans or change orders within the time period
set forth herein in writing, Lessor may proceed on the basis that the plans or
change orders are approved by Lessee. If plans or change orders are
disapproved, Lessee shall state the reason for disapproval and Lessor and
Lessee shall act in good faith to resolve any issues. Lessor shall charge
Lessee $250 per change order after the fifth (5th) change order for processing.
2.1 ACCEPTANCE OF PREMISES AND COVENANTS TO SURRENDER: Lessor represents that
the Premises shall be in good order and repair, and shall comply with all
requirements for occupancy as of the Commencement Date. Lessee agrees on the
last day of the Lease Term, or on the sooner termination of this Lease, to
surrender the Premises to Lessor in Good Condition and Repair. Good Condition
and Repair ("Good Condition and Repair") shall not mean original condition, but
shall mean that the Premises are in a commercially acceptable condition
suitable for occupancy by a reasonable lessee. The interior walls of all
office and warehouse areas, the floors of all office and warehouse areas, all
suspended ceilings and any carpeting are to be cleaned and in Good Condition
and Repair. Lessee also agrees to surrender unto Lessor all alterations,
additions, and improvements which may have been made in, to, or on the Premises
by Lessee, except that Lessee shall ascertain from Lessor, within (30) days
before the end of the Lease Term or earlier termination of this Lease, whether
Lessor desires to have the Premises or any part or parts thereof restored to
their condition as of the Commencement Date of this Lease; if Lessor shall so
desire, then Lessee shall restore said Premises or such part or parts thereof
before the end of the Lease Term or earlier termination of this Lease at
Lessee's sole cost and expense. Lessee, on or before the end of the Lease Term
or sooner termination of this Lease, shall remove all its personal property and
trade fixtures from the Premises, and all such property not so removed shall be
deemed to be abandoned by Lessee. Lessee shall reimburse Lessor for all
disposition costs incurred by Lessor relative to Lessee's abandoned property.
If the Premises are not surrendered at the end of the Lease Term or earlier
termination of this Lease, Lessee shall indemnify Lessor against loss or
liability resulting from any delay caused by Lessee in surrendering the
Premises including, without limitation, any claims made by any succeeding
Lessee founded on such delay.
3. USES PROHIBITED: Lessee shall not commit, or suffer to be committed, any
waste upon the Premises, or any nuisance, or other act or thing which may
disturb the quiet enjoyment of any other tenant in or around the buildings in
which the subject Premises are located or allow any sale by auction upon the
Premises, or allow the Premises to be used for any improper, immoral, unlawful
or objectionable purpose, or place any loads upon the floor, walls, or ceiling
which may endanger the structure, or use any machinery or apparatus which will
in any manner vibrate or shake the Premises or the building of which it is a
part, or place any harmful liquids in the drainage system of the building. No
waste materials or refuse shall be dumped upon or permitted to remain upon any
part of the Premises outside of the building proper. No materials, supplies,
equipment, finished products or semi-finished products, raw materials or
articles of any nature shall be stored upon or permitted to remain on any
portion of the Premises outside of the building structure, unless approved by
the local, state federal or other applicable governing authority. Lessor
consents to Lessee's use of materials which are incidental to the normal,
day-to-day operations of any office user, such as copier fluids, cleaning
materials, etc., but this does not relieve Lessee of any of its obligations not
to contaminate the Premises or related real property or violated any Hazardous
Materials Laws.
4. ALTERATIONS AND ADDITIONS: Lessee shall not make, or suffer to be made, any
alteration or addition to said Premises, or any part thereof, without the
express, advance written consent of Lessor. Any addition or alteration to said
Premises, except movable furniture and trade fixtures, shall become at once a
part of the realty and belong to Lessor at the end of the Lease
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Term or earlier termination of this Lease. Alterations and additions which are
not deemed as trade fixtures shall include HVAC systems, lighting systems,
electrical systems, partitioning, carpeting, or any other installation which
has become an integral part of the Premises. Lessee agrees that it will not
proceed to make such alterations or additions until all required government
permits have been obtained and after having obtained consent from Lessor to do
so, until five (5) days from the receipt of such consent, so that Lessor may
post appropriate notices to avoid any liability to contractors or material
suppliers for payment for Lessee's improvements. Lessee shall at all times
permit such notices to be posted and to remain posted until the completion of
work. At the end of the Lease Term or earlier termination of this Lease,
Lessee shall remove and shall be required to remove its special tenant
improvements and all related equipment installed by Lessee at or during the
Lease Term and Lessee shall return the Premises to the condition that existed
before the installation of the special tenant improvements. Notwithstanding
the above, Lessor agrees to allow any reasonable alterations and improvements
and will use its best efforts to notify Lessee at the time of approval if such
improvements or alterations are to be removed at the end of the Lease Term or
earlier termination of this Lease.
5. MAINTENANCE OF PREMISES:
(a) Lessee shall at its sole cost and expense keep and maintain the
interior of the Premises, including, but not limited to, all lighting
systems, temperature control systems and plumbing systems, in Good
Condition and Repair, including any required replacements. Lessee shall
maintain all wall surfaces and floor coverings in Good Condition and
Repair, free of holes, gouges, or defacements.
(b) Lessor shall keep and maintain in Good Condition and Repair including
replacements, at Lessee's expense, based on a pro-rata share of cost based
on square footage or costs directly related to Lessee's use of the Premises
the following, which shall be included in the monthly CAC:
1. The exterior of the building, any appurtenances and every part
thereof, including but not limited to, glazing, sidewalks, parking
areas, electrical systems, HVAC systems, roof membrane, and painting
of exterior walls.
2. The HVAC by a service contract with a licensed air conditioning and
heating contractor which contract shall provide for a minimum of
quarterly maintenance of all air conditioning and heating equipment at
the Premises including HVAC repairs or replacements which are either
excluded from such service contract or any existing equipment
warranties.
3. The landscaping by a landscape contractor to water, maintain, trim
and replace, when necessary, any shrubbery and landscaping at the
Premises.
4. The roof membrane by a service contract with a licensed reputable
roofing contractor which contract shall provide for a minimum of
semi-annual maintenance, cleaning of storm gutters, drains, removing
of debris and trimming overhanging trees, repair of the roof and
application of a finish coat every five years at the Premises.
5. Extermination services.
6. Fire monitoring services.
(c) Lessee hereby waives any and all rights to make repairs at the expense
of Lessor as provided in Section 1942 of the Civil Code of the State of
California, and all rights provided for by Section 1941 of said Civil Code.
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(d) Lessor shall be responsible for the repair of any structural defects in
the Premises including the roof structure (not membrane), exterior walls
and foundation during the Lease Term.
6. HAZARD INSURANCE: Lessee shall not use, or permit said Premises, or any part
thereof, to be used, for any purpose other than that for which said Premises
are hereby leased; and no use shall be made or permitted to be made of the
Premises, nor acts done, which may cause a cancellation of any insurance policy
covering said building, or any part thereof, nor shall Lessee sell or permit to
be kept, used or sold, in or about said Premises, any article which may be
prohibited by a standard form fire insurance policy. Lessee shall, at its sole
cost and expense, comply with any and all requirements, pertaining to said
Premises, of any insurance organization or company, necessary for the
maintenance of reasonable fire and general liability insurance, covering said
building and appurtenances. Lessor agrees to purchase and keep in force fire
and extended coverage insurance covering loss or damage to the Premises in
amounts not to exceed the full replacement cost of said Premises as determined
by Lessor, with proceeds payable to Lessor. Lessee acknowledges that the
insurance referenced above does not include coverage for Lessee's personal
property. In the event of a loss per the insurance provisions of this
paragraph, Lessee shall be responsible for deductibles up to a maximum of
$5,000 per occurrence. Lessee agrees to pay to the Lessor as additional Rent,
on demand, the full cost of said insurance as evidenced by insurance billings
to the Lessor which shall be included in Lessee's monthly CAC.. If said
insurance billings cover the Premises, and Lessee does not occupy the entire
Premises, the insurance premiums and deductibles shall be allocated to the
portion of the Premises occupied by Lessee on a pro-rata square footage or
other equitable basis, as determined by Lessor. It is understood and agreed
that Lessee's obligation under this paragraph will be prorated to reflect the
Commencement Date and the end of the Lease Term.
Lessor and Lessee hereby waive any rights each may have against the other
related to any loss or damage caused to Lessor or Lessee as the case may be, or
to the Premises or its contents, and which may arise from any risk generally
covered by fire and extended coverage insurance. The parties shall provide
that their respective insurance policies insuring the property or the personal
property include a waiver of any right of subrogation which said insurance
company may have against Lessor or Lessee, as the case may be. Lessor shall
maintain in full force and effect, a policy of rental loss insurance, in an
amount equal to the amount of Rent payable by Lessee commencing on the date of
loss during the next ensuing one (1) year, as reasonably determined by Lessor
with proceeds payable to Lessor ("Loss of Rents Insurance"). Lessee shall
reimburse Lessor for the full cost of said rental loss insurance coverage.
7. ABANDONMENT: Lessee shall not vacate or abandon the Premises at any time
during the Lease Term; and if Lessee shall abandon, vacate or surrender said
Premises, or be dispossessed by process of law, or otherwise, any personal
property belonging to Lessee and left on the Premises shall be deemed to be
abandoned, at the option of Lessor. Notwithstanding the above, the Premises
shall not be considered vacated or abandoned if Lessee maintains the Premises
in Good Condition and Repair, provides security and is not in default.
8. FREE FROM LIENS: Lessee shall keep the subject Premises and the property in
which the subject Premises are situated, free from any and all liens including
but not limited to liens arising out of any work performed, materials
furnished, or obligations incurred by Lessee. However, the Lessor shall allow
Lessee to contest a lien claim, so long as the claim is discharged prior to any
foreclosure proceeding being initiated against the property and provided Lessee
provides Lessor a bond if the lien exceeds $5,000.
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9. COMPLIANCE WITH GOVERNMENTAL REGULATIONS: Lessee shall, at its sole cost and
expense, comply with all of the requirements of all local, municipal, state and
federal authorities now in force, or which may hereafter be in force,
pertaining to Lessee's use and occupancy of the said Premises, and shall
faithfully observe in the use of the Premises all local and municipal
ordinances and state and federal statutes now in force or which may hereafter
be in force. Except as stated above, Lessee shall not be required to pay for
the construction of any single improvement required under this paragraph in
excess of Twenty-Five Thousand Dollars ($25,000), unless such improvement is
required to comply with Lessee's particular use of the Premises or as a result
of Lessee requested permits or changes made by Lessee. If such improvement is
not required due to Lessee's particular use of the Premises or as a result of
Lessee requested permits or changes made by Lessee and such improvement cost
exceeds Twenty-Five Thousand Dollars ($25,000), such improvement cost shall be
amortized over the estimated useful life of the improvement, not to exceed 10
years at Wells Fargo prime rate plus one percent (1%). Lessee shall pay to
Lessor the amortized costs of such improvement on a monthly basis over the
remaining lease term and any extensions thereof, which shall be included in
Lessee's monthly CAC.
10. LESSEE'S INSURANCE: Lessee, as a material part of the consideration to be
rendered to Lessor, hereby waives all claims against Lessor and Lessor's Agents
for damages to goods, wares and merchandise, and all other personal property
in, upon or about said Premises, and for injuries to persons in, upon or about
said Premises, from any cause arising at any time, and Lessee will hold Lessor
and Lessor's Agents 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 or occupancy of the Premises by Lessee, or
from the failure of Lessee to keep the Premises in good condition and repair,
as herein provided. Lessee shall secure and keep in force a standard policy of
commercial general liability insurance and property damage policy covering the
Premises, including parking areas, insuring the Lessee. A certificate of said
policy naming Lessor as an additional insured shall be delivered to Lessor and
will have a combined single limit for both bodily injury, death and property
damage in an amount not less than five million dollars ($5,000,000.00). The
limits of said insurance shall not, however, limit the liability of Lessee
hereunder. Lessee shall obtain a written obligation on the part of the insurer
to notify Lessor 30 days in advance in writing before any cancellation thereof.
Lessee shall obtain, at Lessee's sole cost and expense, a policy of fire and
extended coverage insurance including coverage for direct physical loss special
form, and a sprinkler leakage endorsement insuring the personal property of
Lessee. The proceeds from any personal property damage policy shall be payable
to Lessee. Lessee shall, at its sole cost and expense, comply with all of the
insurance requirements of all local, municipal, state and federal authorities
now in force, or which may hereafter be in force, pertaining to Lessee's use
and occupancy of the said Premises.
11. ADVERTISEMENTS AND SIGNS: Lessee shall not place or permit to be placed,
in, upon or about the Premises any unusual or extraordinary signs, or any signs
not approved by the city, local, state, federal or other applicable governing
authority. Lessee shall not place, or permit to be placed upon the Premises,
any signs, advertisements or notices without the written consent of the Lessor,
and such consent shall not be unreasonably withheld. A sign so placed on the
Premises shall be so placed upon the understanding and agreement that Lessee
will remove same at the end of the Lease Term or earlier termination of this
Lease and repair any damage or injury to the Premises caused thereby, and if
not so removed by Lessee, then Lessor may have the same removed at Lessee's
expense.
12. UTILITIES: Lessee shall pay for all water, gas, heat, light, power,
telephone and other utilities supplied to the Premises. Any charges for sewer
usage or related fees shall be the obligation of Lessee and paid for by Lessee.
If any such services are not separately metered to Lessee, Lessee shall pay a
reasonable proportion of all charges which are jointly metered, the
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determination to be made by Lessor acting reasonably and on any equitable
basis. Lessor shall not be liable to Lessee for any disruption in any of the
utility services to the Premises.
13. ATTORNEY'S FEES: In case suit should be brought for the possession of the
Premises, for the recovery of any sum due hereunder, or because of the breach
of any other covenant herein, the losing party shall pay to the prevailing
party reasonable attorney's fee which shall be deemed to have accrued on the
commencement of such action and shall be enforceable whether or not such action
is prosecuted to judgment.
14.1 DEFAULT: The occurrence of any of the following shall constitute a default
and breach of this Lease by Lessee: a) Any failure by Lessee to pay Rent or to
make any other payment required to be made by Lessee hereunder when due if not
cured within ten (10) days after written notice thereof by Lessor to Lessee; b)
The abandonment or vacation of the Premises by Lessee except as provided in
Section 7; c) A failure by Lessee to observe and perform any other provision of
this Lease to be observed or performed by Lessee, where such failure continues
for thirty days after written notice thereof by Lessor to Lessee; provided,
however, that if the nature of such default is such that the same cannot be
reasonably cured within such thirty (30) day period, Lessee shall not be deemed
to be in default if Lessee shall, within such period, commence such cure and
thereafter diligently prosecute the same to completion; d) The making by Lessee
of any general assignment for the benefit of creditors; the filing by or
against Lessee of a petition to have Lessee adjudged a bankrupt or of a
petition for reorganization or arrangement under any law relating to
bankruptcy; e) the appointment of a trustee or receiver to take possession of
substantially all of Lessee's assets or Lessee's interest in this Lease, or the
attachment, execution or other judicial seizure of substantially all of
Lessee's assets located at the Premises or of Lessee's interest in this Lease.
14.2 SURRENDER OF LEASE: In the event of any such default by Lessee, then in
addition to any other remedies available to Lessor at law or in equity, Lessor
shall have the immediate option to terminate this Lease before the end of the
Lease Term and all rights of Lessee hereunder, by giving written notice of such
intention to terminate. In the event that Lessor terminates this Lease due to
a default of Lessee, then Lessor may recover from Lessee: 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 unpaid Rent which would
have been earned after termination until the time of award exceeding the amount
of such rental loss that the Lessee 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 the Lessee proves could have been reasonably avoided;
plus d) any other amount necessary to compensate Lessor for all the detriment
proximately caused by Lessee's failure to perform his obligations under this
Lease or which in the ordinary course of things would be likely to result
therefrom; and e) at Lessor'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. As used in (a) and (b) above, the "worth at the time of award"
is computed by allowing interest at the rate of Wells Fargo's prime rate plus
two percent (2%) per annum. As used in (c) above, the "worth at the time of
award" is computed by discounting such amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of award plus one percent
(1%).
14.3 RIGHT OF ENTRY AND REMOVAL: In the event of any such default by Lessee,
Lessor 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 Lessee.
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14.4 ABANDONMENT: In the event of the vacation or abandonment, except as
provided in Section 7, of the Premises by Lessee or in the event that Lessor
shall elect to re-enter as provided in paragraph 14.3 above or shall take
possession of the Premises pursuant to legal proceeding or pursuant to any
notice provided by law, and Lessor does not elect to terminate this Lease as
provided in paragraph 14.2 above, then Lessor may from time to time, without
terminating this Lease, either recover all Rent as it becomes due or relet the
Premises or any part thereof for such term or terms and at such rental rates
and upon such other terms and conditions as Lessor, in its sole discretion, may
deem advisable with the right to make alterations and repairs to the Premises.
In the event that Lessor elects to relet the Premises, then Rent received by
Lessor from such reletting shall be applied; first, to the payment of any
indebtedness other than Rent due hereunder from Lessee to Lessor; second, to
the payment of any cost of such reletting; third, to the payment of the cost of
any alterations and repairs to the Premises; fourth, to the payment of Rent due
and unpaid hereunder; and the residue, if any, shall be held by Lessor and
applied to the payment of future Rent as the same may become due and payable
hereunder. Should that portion of such Rent received from such reletting
during any month, which is applied by the payment of Rent hereunder according
to the application procedure outlined above, be less than the Rent payable
during that month by Lessee hereunder, then Lessee shall pay such deficiency to
Lessor immediately upon demand therefor by Lessor. Such deficiency shall be
calculated and paid monthly. Lessee shall also pay to Lessor, as soon as
ascertained, any costs and expenses incurred by Lessor in such reletting or in
making such alterations and repairs not covered by the rentals received from
such reletting.
14.5 NO IMPLIED TERMINATION: No re-entry or taking possession of the Premises
by Lessor pursuant to 14.3 or 14.4 of this Article 14 shall be construed as an
election to terminate this Lease unless a written notice of such intention is
given to Lessee or unless the termination thereof is decreed by a court of
competent jurisdiction. Notwithstanding any reletting without termination by
Lessor because of any default by Lessee, Lessor may at any time after such
reletting elect to terminate this Lease for any such default.
15. SURRENDER OF LEASE: The voluntary or other surrender of this Lease by
Lessee, or a mutual cancellation thereof, shall not work a merger, and shall,
at the option of Lessor, terminate all or any existing subleases or sub
tenancies, or may, at the option of Lessor, operate as an assignment to him of
any or all such subleases or sub tenancies.
16. TAXES: Lessee shall pay and discharge punctually and when the same shall
become due and payable without penalty, all real estate taxes, personal
property taxes, taxes based on vehicles utilizing parking areas in the
Premises, taxes computed or based on rental income (other than federal, state
and municipal net income taxes), environmental surcharges, privilege taxes,
excise taxes, business and occupation taxes, school fees or surcharges, gross
receipts taxes, sales and/or use taxes, employee taxes, occupational license
taxes, water and sewer taxes, assessments (including, but not limited to,
assessments for public improvements or benefit), assessments for local
improvement and maintenance districts, and all other governmental impositions
and charges of every kind and nature whatsoever, regardless of whether now
customary or within the contemplation of the parties hereto and regardless of
whether resulting from increased rate and/or valuation, or whether
extraordinary or ordinary, general or special, unforeseen or foreseen, or
similar or dissimilar to any of the foregoing (all of the foregoing being
hereinafter collectively called "Tax" or "Taxes") which, at any time during the
Lease Term, shall be applicable or against the Premises, or shall become due
and payable and a lien or charge upon the Premises under or by virtue of any
present or future laws, statutes, ordinances, regulations, or other
requirements of any governmental authority whatsoever. The term "Environmental
Surcharge" shall include any and all expenses, taxes, charges or penalties
imposed by the Federal Department of Energy, Federal Environmental Protection
Agency, the Federal Clean Air Act, or any regulations promulgated thereunder,
or
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any other local, state or federal governmental agency or entity now or
hereafter vested with the power to impose taxes, assessments or other types of
surcharges as a means of controlling or abating environmental pollution or the
use of energy in regard to the use, operation or occupancy of the Premises.
The term "Tax" shall include, without limitation, all taxes, assessments,
levies, fees, impositions or charges levied, imposed, assessed, measured, or
based in any manner whatsoever (i) in whole or in part on the Rent payable by
Lessee under this Lease, (ii) upon or with respect to the use, possession,
occupancy, leasing, operation or management of the Premises, (iii) upon this
transaction or any document to which Lessee is a party creating or transferring
an interest or an estate in the Premises, (iv) upon Lessee's business
operations conducted at the Premises, (v) upon, measured by or reasonably
attributable to the cost or value of Lessee's equipment, furniture, fixtures
and other personal property located on the Premises or the cost or value of any
leasehold improvements made in or to the Premises by or for Lessee, regardless
of whether title to such improvements shall be in Lessor or Lessee, or (vi) in
lieu of or equivalent to any Tax set forth in this Section 16. In the event
any such Taxes are payable by Lessor and it shall not be lawful for Lessee to
reimburse Lessor for such Taxes, then the Rent payable thereunder shall be
increased to net Lessor the same net rent after imposition of any such Tax upon
Lessor as would have been payable to Lessor prior to the imposition of any such
Tax. It is the intention of the parties that Lessor shall be free from all
such Taxes and all other governmental impositions and charges of every kind
and nature whatsoever. However, nothing contained in this Section 16 shall
require Lessee to pay any Federal or State income, franchise, estate,
inheritance, succession, transfer or excess profits tax imposed upon Lessor.
If any general or special assessment is levied and assessed against the
Premises, Lessor agrees to use its best reasonable efforts to cause the
assessment to become a lien on the Premises securing repayment of a bond sold
to finance the improvements to which the assessment relates which is payable in
installments of principal and interest over the maximum term allowed by law.
It is understood and agreed that Lessee's obligation under this paragraph will
be prorated to reflect the Commencement Date and the end of the Lease Term. It
is further understood that if Taxes cover the Premises and Lessee does not
occupy the entire Premises, the Taxes will be allocated to the portion of the
Premises occupied by Lessee based on a pro-rata square footage or other
equitable basis. Taxes billed by Lessor to Lessee shall be included in the
monthly CAC.
Subject to any limitations or restrictions imposed by any deeds of trust or
mortgages now or hereafter covering or affecting the Premises, Lessee shall
have the right to contest or review the amount or validity of any Tax by
appropriate legal proceedings but which is not to be deemed or construed in any
way as relieving, modifying or extending Lessee's covenant to pay such Tax at
the time and in the manner as provided in this Section 16. However, as a
condition of Lessee's right to contest, if such contested Tax is not paid
before such contest and if the legal proceedings shall not operate to prevent
or stay the collection of the Tax so contested, Lessee shall, before
instituting any such proceeding, protect the Premises and the interest of
Lessor and of the beneficiary of a deed of trust or the mortgagee of a mortgage
affecting the Premises against any lien upon the Premises by a surety bond,
issued by an insurance company acceptable to Lessor and in an amount equal to
one and one-half (1 1/2) times the amount contested or, at Lessor's option, the
amount of the contested Tax and the interest and penalties in connection
therewith. Any contest as to the validity or amount of any Tax, whether before
or after payment, shall be made by Lessee in Lessee's own name, or if required
by law, in the name of Lessor or both Lessor and Lessee. Lessee shall defend,
indemnify and hold harmless Lessor from and against any and all costs or
expenses, including attorneys' fees, in connection with any such proceedings
brought by Lessee, whether in its own name or not. Lessee shall be entitled to
retain any refund of any such contested Tax and penalties or interest thereon
which have been paid by Lessee. Nothing contained herein shall be construed as
affecting or limiting Lessor's right to contest any Tax at Lessor's expense.
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17. NOTICES: Unless otherwise provided for in this Lease, any and all written
notices or other communication (the "Communication") to be given in connection
with this Lease shall be given in writing and shall be given by personal
delivery, facsimile transmission or by mailing by registered or certified mail
with postage thereon or recognized overnight courier, fully prepaid, in a
sealed envelope addressed to the intended recipient as follows:
(a) to the Lessor at: 10050 Bandley Drive
Cupertino, California 95014
Attention: Carl E. Berg
Fax No: (408) 725-1626
(b) to the Lessee at: 6331 San Ignacio
San Jose, California
Attention: Ron Lessack
Fax No:
or such other addresses, facsimile number or individual as may be designated by
a Communication given by a party to the other parties as aforesaid. Any
Communication given by personal delivery shall be conclusively deemed to have
been given and received on a date it is so delivered at such address provided
that such date is a business day, otherwise on the first business day following
its receipt, and if given by registered or certified mail, on the day on which
delivery is made or refused or if given by recognized overnight courier, on the
first business day following deposit with such overnight courier and if given
by facsimile transmission, on the day on which it was transmitted provided such
day is a business day, failing which, on the next business day thereafter.
18. ENTRY BY LESSOR: Lessee shall permit Lessor and its agents to enter into
and upon said Premises at all reasonable times using the minimum amount of
interference and inconvenience to Lessee and Lessee's business, subject to any
security regulations of Lessee, for the purpose of inspecting the same or for
the purpose of maintaining the building in which said Premises are situated, or
for the purpose of making repairs, alterations or additions to any other
portion of said building, including the erection and maintenance of such
scaffolding, canopies, fences and props as may be required, without any rebate
of Rent and without any liability to Lessee for any loss of occupation or quiet
enjoyment of the Premises; and shall permit Lessor and his agents, at any time
within ninety (90) days prior to the end of the Lease Term, to place upon said
Premises any usual or ordinary "For Sale" or "For Lease" signs and exhibit the
Premises to prospective tenants at reasonable hours.
19. DESTRUCTION OF PREMISES: In the event of a partial destruction of the said
Premises during the Lease Term from any cause which is covered by Lessor's
property insurance, Lessor shall forthwith repair the same, provided such
repairs can be made within ninety (90) days under the laws and regulations of
State, Federal, County, or Municipal authorities, but such partial destruction
shall in no way annul or void this Lease, except that Lessee shall be entitled
to a proportionate reduction of Rent while such repairs are being made to the
extent of payments received by Lessor under its Loss of Rents Insurance
coverage. With respect to any partial destruction which Lessor is obligated to
repair or may elect to repair under the terms of this paragraph, the provision
of Section 1932, Subdivision 2, and of Section 1933, Subdivision 4, of the
Civil Code of the State of California are waived by Lessee. In the event that
the building in which the subject Premises may be situated is destroyed to an
extent greater than thirty-three and one-third (33 1/3%) of the replacement
cost thereof, Lessor may, at its sole option, elect
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to terminate this Lease, whether the subject Premises is insured or not. A
total destruction of the building in which the subject Premises are situated
shall terminate this Lease. Notwithstanding the above, Lessor is only
obligated to repair or rebuild to the extent of available insurance proceeds
including any deductible amount. Should Lessor determine that insufficient or
no insurance proceeds are available for repair or reconstruction of Premises,
Lessor, at its sole option, may terminate the Lease. Lessee shall have the
option of continuing this Lease by agreeing to pay all repair costs to the
subject Premises.
20. ASSIGNMENT AND SUBLETTING: Lessee shall not assign this Lease, or any
interest therein, and shall not sublet the said Premises or any part thereof,
or any right or privilege appurtenant thereto, or cause any other person or
entity (a bona fide subsidiary or affiliate of Lessee excepted) to occupy or
use the Premises, or any portion thereof, without the advance written consent
of Lessor. Any such assignment or subletting without such consent shall be
void, and shall, at the option of the Lessor, terminate this Lease. This Lease
shall not, or shall any interest therein, be assignable, as to the interest of
Lessee, by operation of law, without the written consent of Lessor.
Notwithstanding Lessor's obligation to provide reasonable approval, Lessor
reserves the right to withhold its consent for any proposed sublessee or
assignee of Lessee if the proposed sublessee or assignee is a user or generator
of Hazardous Materials. Notwithstanding the foregoing, Lessee may assign this
Lease to a successor in interest, whether by merger or acquisition, provided
there is no substantial reduction in the net worth of the resulting entity and
the resulting entity is not a user or generator of Hazardous Materials.
Whether or not Lessor's consent to a sublease or assignment is required, in the
event of any sublease or assignment, Lessee shall be and shall remain primarily
liable for the performance of all conditions, covenants, and obligations of
Lessee hereunder and, in the event of a default by an assignee or sublessee,
Lessor may proceed directly against the original Lessee hereunder and/or any
other predecessor of such assignee or sublessee without the necessity of
exhausting remedies against said assignee or sublessee.
21. CONDEMNATION: If any part of the Premises shall be taken for any public or
quasi-public use, under any statute or by right of eminent domain or private
purchase in lieu thereof, and a part thereof remains which is susceptible of
occupation hereunder, this Lease shall as to the part so taken, terminate as of
the date title vests in the condemnor or purchaser, and the Rent payable
hereunder shall be adjusted so that the Lessee shall be required to pay for the
remainder of the Lease Term only that portion of Rent as the value of the part
remaining. The rental adjustment resulting will be computed at the same Rental
rate for the remaining part not taken; however, Lessor shall have the option to
terminate this Lease as of the date when title to the part so taken vests in
the condemnor or purchaser. If all of the Premises, or such part thereof be
taken so that there does not remain a portion susceptible for occupation
hereunder, this Lease shall thereupon terminate. If a part or all of the
Premises be taken, all compensation awarded upon such taking shall be payable
to the Lessor. Lessee may file a separate claim and be entitled to any award
granted to Lessee.
22. EFFECTS OF CONVEYANCE: The term "Lessor" as used in this Lease, means only
the owner for the time being of the land and building constituting the
Premises, so that, in the event of any sale of said land or building, or in the
event of a Lease of said building, Lessor shall be and hereby is entirely freed
and relieved of all covenants and obligations of Lessor hereunder, and it shall
be deemed and construed, without further agreement between the parties and the
purchaser of any such sale, or the Lessor of the building, that the purchaser
or lessor of the building has assumed and agreed to carry out any and all
covenants and obligations of the Lessor hereunder. If any security is given by
Lessee to secure the faithful performance of all or any of the covenants of
this Lease on the part of Lessee, Lessor may transfer and deliver the security,
as such, to the purchaser at any such sale of the building, and thereupon the
Lessor shall be discharged from any further liability.
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23. SUBORDINATION: This Lease, in the event Lessor notifies Lessee in writing,
shall be subordinate to any ground lease, deed of trust, or other hypothecation
for security now or hereafter placed upon the real property at 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. Lessee
agrees to promptly execute any documents which may be required to effectuate
such subordination. Notwithstanding such subordination, if Lessee is not in
default and so long as Lessee shall pay the Rent and observe and perform all of
the provisions and covenants required under this Lease, Lessee's right to quiet
possession of the Premises shall not be disturbed or effected by any
subordination.
24. WAIVER: The waiver by Lessor of any breach of any term, covenant or
condition, herein contained shall not be construed to be a waiver of such term,
covenant or condition or any subsequent breach of the same or any other term,
covenant or condition therein contained. The subsequent acceptance of Rent
hereunder by Lessor shall not be deemed to be a waiver of Lessee's breach of
any term, covenant, or condition of the Lease.
25. HOLDING OVER: Any holding over after the end of the Lease Term requires
Lessor's written approval prior to the end of the Lease Term, which,
notwithstanding any other provisions of this Lease, Lessor may withhold and
shall be construed to be a tenancy at sufferance from month to month. Lessee
shall pay to Lessor monthly base rent equal to one and one-half (1.5) times the
monthly base rent installment due in the last month of the Lease Term and all
other additional rent and all other terms and conditions of the Lease shall
apply, so far as applicable. Holding over by Lessee without written approval
of Lessor shall subject Lessee to the liabilities and obligations provided for
in this Lease and by law, including, but not limited to those in Section 2.1 of
this Lease. Lessee shall indemnify and hold Lessor harmless against any loss
or liability resulting from any delay caused by Lessee in surrendering the
Premises, including without limitation, any claims made or penalties incurred
by any succeeding lessee or by Lessor. No holding over shall be deemed or
construed to exercise any option to extend or renew this Lease in lieu of full
and timely exercise of any such option as required hereunder.
26. SUCCESSORS AND ASSIGNS: The covenants and conditions herein contained
shall, subject to the provisions as to assignment, apply to and bind the heirs,
successors, executors, administrators and assigns of all of the parties hereto;
and all of the parties hereto shall be jointly and severally liable hereunder.
27. ESTOPPEL CERTIFICATES: Lessee shall at any time during the Lease Term, upon
not less than ten (10) days prior written notice from Lessor, execute and
deliver to Lessor a statement in writing certifying that, this Lease is
unmodified and in full force and effect (or, if modified, stating the nature of
such modification) and the dates to which the Rent and other charges have been
paid in advance, if any, and acknowledging that there are not, to Lessee's
knowledge, any uncured defaults on the part of Lessor hereunder or specifying
such defaults if they are claimed. Any such statement may be conclusively
relied upon by any prospective purchaser or encumbrancer of the Premises.
Lessee's failure to deliver such a statement within such time shall be
conclusive upon the Lessee that (a) this Lease is in full force and effect,
without modification except as may be represented by Lessor; (b) there are no
uncured defaults in Lessor's performance.
28. TIME: Time is of the essence of the Lease.
29. CAPTIONS: The headings on 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. This instrument contains all of the
agreements and conditions made
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between the parties hereto and may not be modified orally or in any other
manner than by an agreement in writing signed by all of the parties hereto or
their respective successors in interest.
30. PARTY NAMES: Landlord and Tenant may be used in various places in this
Lease as a substitute for Lessor and Lessee respectively.
31. EARTHQUAKE INSURANCE: As a condition of Lessor agreeing to waive the
requirement for earthquake insurance, Lessee agrees that it will pay, as
additional Rent, which shall be included in the monthly CAC, an amount not to
exceed fifty thousand dollars ($50,000) per year for earthquake insurance if
Lessor desires to obtain some form of earthquake insurance in the future, if
and when available, on terms acceptable to Lessor.
32. HABITUAL DEFAULT: Notwithstanding anything to the contrary contained in
Section 14 herein, Lessor and Lessee agree that if Lessee shall have defaulted
in the payment of Rent for three or more times during any twelve month period
during the Lease Term, then such conduct shall, at the option of the Lessor,
represent a separate event of default which cannot be cured by Lessee. Lessee
acknowledges that the purpose of this provision is to prevent repetitive
defaults by the Lessee under the Lease, which constitute a hardship to the
Lessor and deprive the Lessor of the timely performance by the Lessee
hereunder.
33. HAZARDOUS MATERIALS
33.1 DEFINITIONS: As used in this Lease, the following terms shall have the
following meaning:
a. The term "Hazardous Materials" shall mean (i) polychlorinated
biphenyls; (ii) radioactive materials and (iii) any chemical, material
or substance now or hereafter defined as or included in the
definitions of "hazardous substance" "hazardous water", "hazardous
material", "extremely hazardous waste", "restricted hazardous waste"
under Section 25115, 25117 or 15122.7, or listed pursuant to Section
25140 of the California Health and Safety Code, Division 20, Chapter
6.5 (Hazardous Waste Control Law), (ii) defined as "hazardous
substance" under Section 25316 of the California Health and Safety
Code, Division 20, Chapter 6.8 (Carpenter-Presley-Tanner Hazardous
Substances Account Act), (iii) defined as "hazardous material",
"hazardous substance", or "hazardous waste" under Section 25501 of the
California Health and Safety Code, Division 20, Chapter 6.95
(Hazardous Materials Release, Response, Plans and Inventory), (iv)
defined as a "hazardous substance" under Section 25181 of the
California Health and Safety Code, Division 20l, Chapter 6.7
(Underground Storage of Hazardous Substances), (v) petroleum, (vi)
asbestos, (vii) listed under Article 9 or defined as "hazardous" or
"extremely hazardous" pursuant to Article II of Title 22 of the
California Administrative Code, Division 4, Chapter 20, (viii) defined
as "hazardous substance" pursuant to Section 311 of the Federal Water
Pollution Control Act, 33 U.S.C. 1251 et seq. or listed pursuant to
Section 1004 of the Federal Water Pollution Control Act (33 U.S.C.
1317), (ix) defined as a "hazardous waste", pursuant to Section 1004
of the Federal Resource Conservation and Recovery Act, 42 U.S.C. 6901
et seq., (x) defined as "hazardous substance" pursuant to Section 101
of the Comprehensive Environmental Responsibility Compensations, and
Liability Act, 42 U.S.C. 9601 et seq., or (xi) regulated under the
Toxic Substances Control Act, 156 U.S.C. 2601 et seq.
b. The term "Hazardous Materials Laws" shall mean any local, state and
federal laws, rules, regulations, or ordinances relating to the use,
generation, transportation, analysis, manufacture, installation,
release, discharge, storage or disposal of Hazardous Material.
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c. The term "Lessor's Agents" shall mean Lessor's agents,
representatives, employees, contractors, subcontractors, directors,
officers and partners.
d. The term "Lessee's Agents" shall mean Lessee's agents,
representatives, employees, contractors, subcontractors, directors,
officers, partners, invitees or any other person in or about the
Premises.
33.2 LESSEE'S RIGHT TO INVESTIGATE: Lessee shall be entitled to cause such
inspection, soils and ground water tests, and other evaluations to be made of
the Premises as Lessee deems necessary regarding (i) the presence and use of
Hazardous Materials in or about the Premises, and (ii) the potential for
exposure to Lessee's employees and other persons to any Hazardous Materials
used and stored by previous occupants in or about the Premises. Lessee shall
provide Lessor with copies of all inspections, tests and evaluations. Lessee
shall indemnify, defend and hold Lessor harmless from any cost, claim or
expense arising from such entry by Lessee or from the performance of any such
investigation by such Lessee.
33.3 LESSOR'S REPRESENTATIONS: Lessor hereby represents and warrants to the
best of Lessor's knowledge that the Premises are, as of the date of this Lease,
in compliance with all Hazardous Material Laws.
33.4 LESSEE'S OBLIGATION TO INDEMNIFY: Lessee, at its sole cost and expense,
shall indemnify, defend, protect and hold Lessor and Lessor's Agents harmless
from and against any and all cost or expenses, including those described under
subparagraphs i, ii and iii herein below set forth, arising from or caused in
whole or in part, directly or indirectly by:
a. Lessee's or Lessee's Agents' use, analysis, storage,
transportation, disposal, release, threatened release, discharge or
generation of Hazardous Material to, in, on, under, about or from the
Premises; or
b. Lessee's or Lessee's Agents failure to comply with Hazardous
Material laws; or
c. Any release of Hazardous Material to, in, on, under, about, from or
onto the Premises caused by Lessee or Lessee's Agents or occurring
during the Lease Term, except ground water contamination from other
parcels where the source is from off the Premises not arising from or
caused by Lessee or Lessee's Agents.
The cost and expenses indemnified against include, but are not limited to the
following:
i. Any and all claims, actions, suits, proceedings, losses, damages,
liabilities, deficiencies, forfeitures, penalties, fines, punitive
damages, cost or expenses;
ii. Any claim, action, suit or proceeding for personal injury
(including sickness, disease, or death), tangible or intangible
property damage, compensation for lost wages, business income, profits
or other economic loss, damage to the natural resources of the
environment, nuisance, pollution, contamination, leaks, spills,
release or other adverse effects on the environment;
iii. The cost of any repair, clean-up, treatment or detoxification of
the Premises necessary to bring the Premises into compliance with all
Hazardous Material Laws, including the preparation and implementation
of any closure, disposal, remedial action, or other actions with
regard to the Premises, and expenses (including, without limitation,
reasonable attorney's fees and consultants fees, investigation and
laboratory fees, court cost and litigation expenses).
33.5 LESSEE'S OBLIGATION TO REMEDIATE CONTAMINATION: Lessee shall, at its sole
cost and expense, promptly take any and all action necessary to remediate
contamination of the Premises by Hazardous Materials during the Lease Term
arising or caused by Lessee or Lessee's Agents.
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33.6 OBLIGATION TO NOTIFY: Lessor and Lessee shall each give written notice to
the other as soon as reasonably practical of (i) any communication received
from any governmental authority concerning Hazardous Material which related to
the Premises and (ii) any contamination of the Premises by Hazardous Materials
which constitutes a violation of any Hazardous Material Laws.
33.7 SURVIVAL: The obligations of Lessee under this Section 33 shall survive
the Lease Term or earlier termination of this Lease.
33.8 CERTIFICATION AND CLOSURE: On or before the end of the Lease Term or
earlier termination of this Lease, Lessee shall deliver to Lessor a
certification executed by Lessee stating that, to the best of Lessee's
knowledge, there exists no violation of Hazardous Material Laws resulting from
Lessee's obligation in Paragraph 33. If pursuant to local ordinance, state or
federal law, Lessee is required, at the expiration of the Lease Term, to submit
a closure plan for the Premises to a local, state or federal agency, then
Lessee shall furnish to Lessor a copy of such plan.
33.9 PRIOR HAZARDOUS MATERIALS: Lessee shall have no obligation to clean up or
to hold Lessor harmless with respect to, any Hazardous Material or wastes
discovered on the Premises which were not introduced into, in, on, about, from
or under the Premises during the Lease Term or ground water contamination from
other parcels where the source is from off the Premises not arising from or
caused by Lessee or Lessee's Agents.
34. BROKERS: Lessor and Lessee represent that they have not utilized or
contacted a real estate broker or finder with respect to this Lease and Lessee
agrees to indemnify and hold Lessor harmless against any claim, cost, liability
or cause of action asserted by any broker or finder claiming through Lessee
Lessor represents and warrants that it has not utilized or contacted a real
estate broker or finder with respect to this Lease and Lessor agrees to
indemnify and hold Lessee harmless against any claim, cost, liability or cause
of action asserted by any broker or finder claiming through Lessor.
35. OPTION TO EXTEND
A. Option: Lessor hereby grants to Lessee two (2) options to extend the Lease
Term, with each extended term to be for a period of five (5) years, on the
following terms and conditions, which shall apply separately to each option to
extend:
(i) Lessee shall give Lessor written notice of its exercise of one of
its options to extend no earlier than twenty-four (24) calendar
months, nor later than six (6) calendar months before the Lease Term
would end but for said exercise. Time is of the essence.
(ii) Lessee may not extend the Lease Term pursuant to any option
granted by this section 35 if Lessee is in default as of the date of
the exercise of one of its options. If Lessee has committed a default
by Lessee as defined in Section 14 or 32 that has not been cured or
waived by Lessor in writing by the date that any extended term is to
commence, then Lessor may elect not to allow the Lease Term to be
extended, notwithstanding any notice given by Lessee of an exercise of
this option to extend.
(iii) Lessee must exercise each option consecutively, and if it fails
to exercise any one option, it waives the right to exercise the
subsequent option and the Lease Term shall not be extended further.
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<PAGE> 18
(iv) All terms and conditions of this Lease shall apply during each
extended term, except that the base rent and rental increases for each
extended term shall be determined as provided in Section 35 (B) below
(v) Once Lessee delivers a notice of exercise of one of its options to
extend the Lease Term, Lessee may not withdraw such exercise and
subject to the provisions of this Section 35, such notice shall
operate to extend the Lease Term. Upon any extension of the Lease
Term pursuant to this Section 35, the term "Lease Term" as used in
this Lease shall thereafter include the then extended term.
(vi) The option rights of On Command Video granted under this Section
35 are granted for On Command Video's personal benefit and may not be
assigned or transferred by On Command Video or exercised if On Command
Video is not occupying the Premises at the time of exercise.
B. Extended Term Rent - Option Period: The monthly Rent for the Premises during
the extended term shall equal ninety-five percent (95%) of the fair market
monthly Rent for the Premises as of the commencement date of the extended term,
but in no case, less than the Rent during the last month of the prior Lease
term. Promptly upon Lessee's exercise of the option to extend, Lessee and
Lessor shall meet and attempt to agree on the fair market monthly Rent for the
Premises as of the commencement date of the extended term. In the event the
parties fail to agree upon the amount of the monthly Rent for the extended term
prior to commencement thereof, the monthly Rent for the extended term shall be
determined by appraisal in the manner hereafter set forth; provided, however,
that in no event shall the monthly Rent for the extended term be less than in
the immediate preceding period. Annual base rent increases during the extended
term shall be three percent (3%) per year. In the event it becomes necessary
under this paragraph to determine the fair market monthly Rent of the Premises
by appraisal, Lessor and Lessee each shall appoint a real estate appraiser who
shall be a member of the American Institute of Real Estate Appraiser ("AIREA")
and such appraisers shall each determine the fair market monthly Rent for the
Premises taking into account the value of the Premises and the amenities
provided by the outside areas, the common areas, and the Building, and
prevailing comparable Rentals in the area. Such appraisers shall, within
twenty (20) business days after their appointment, complete their appraisals
and submit their appraisal reports to Lessor and Lessee. If the fair market
monthly Rent of the Premises established in the two (2) appraisals varies by
five percent (5%) or less of the higher Rent, the average of the two shall be
controlling. If said fair market monthly Rent varies by more than five percent
(5%) of the higher Rental, said appraisers, within ten (10) days after
submission of the last appraisal, shall appoint a third appraiser who shall be
a member of the AIREA and who shall also be experienced in the appraisal of
Rent values and adjustment practices for commercial properties in the vicinity
of the Premises. Such third appraiser shall, within twenty (20) business days
after his appointment, determine by appraisal the fair market monthly Rent of
the Premises taking into account the same factors referred to above, and submit
his appraisal report to Lessor and Lessee. The fair market monthly Rent
determined by the third appraiser for the Premises shall be controlling, unless
it is less than that set forth in the lower appraisal previously obtained, in
which case the value set forth in said lower appraisal shall be controlling, or
unless it is greater than that set forth in the higher appraisal previously
obtained in which case the Rent set for in said higher appraisal shall be
controlling. If either Lessor or Lessee fails to appoint an appraiser, or if
an appraiser appointed by either of them fails, after his appointment to submit
his appraisal within the required period in accordance with the foregoing, the
appraisal submitted by the appraiser properly appointed and timely submitting
his appraisal shall be controlling. If the two appraisers appointed by Lessor
and Lessee are unable to agree upon a third appraiser within the required
period in accordance with the foregoing, application shall be made within
twenty (20) days thereafter by either Lessor
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or Lessee to AIREA, which shall appoint a member of said institute willing to
serve as appraiser. The cost of all appraisals under this subparagraph shall
be borne equally be Lessor and Lessee.
36. APPROVALS: Whenever in this Lease the Lessor's or Lessee's consent is
required, such consent shall not be unreasonably or arbitrarily withheld or
delayed. In the event that the Lessor or Lessee does not respond to a request
for any consents which may be required of it in this Lease within ten business
days of the request of such consent in writing by the Lessee or Lessor, such
consent shall be deemed to have been given by the Lessor or Lessee.
37. AUTHORITY: Each party executing this Lease represents and warrants that he
or she is duly authorized to execute and deliver the Lease. If executed on
behalf of a corporation, that the Lease is executed in accordance with the
by-laws of said corporation (or a partnership that the Lease is executed in
accordance with the partnership agreement of such partnership), that no other
party's approval or consent to such execution and delivery is required, and
that the Lease is binding upon said individual, corporation (or partnership) as
the case may be in accordance with its terms.
38. INDEMNIFICATION OF LESSOR: Except to the extent caused by the sole
negligence or willful misconduct of Lessor or Lessor's Agents, Lessee shall
defend, indemnify and hold Lessor harmless from and against any and all
obligations, losses, costs, expenses, claims, demands, attorney's fees,
investigation costs or liabilities on account of, or arising out of the use,
condition or occupancy of the Premises or any act or omission to act of Lessee
or Lessee's Agents or any occurrence in, upon, about or at the Premises,
including, without limitation, any of the foregoing provisions arising out of
the use, generation, manufacture, installation, release, discharge, storage, or
disposal of Hazardous Materials by Lessee or Lessee's Agents. It is understood
that Lessee is and shall be in control and possession of the Premises and that
Lessor shall in no event be responsible or liable for any injury or damage or
injury to any person whatsoever, happening on, in, about, or in connection with
the Premises, or for any injury or damage to the Premises or any part thereof.
This Lease is entered into on the express condition that Lessor shall not be
liable for, or suffer loss by reason of injury to person or property, from
whatever cause, which in any way may be connected with the use, condition or
occupancy of the Premises or personal property located herein. The provisions
of this Lease permitting Lessor to enter and inspect the Premises are for the
purpose of enabling Lessor to become informed as to whether Lessee is complying
with the terms of this Lease and Lessor shall be under no duty to enter,
inspect or to perform any of Lessee's covenants set forth in this Lease.
Lessee shall further indemnify, defend and hold harmless Lessor from and
against any and all claims arising from any breach or default in the
performance of any obligation to Lessee's part to be performed under the terms
of this Lease. The provisions of Section 38 shall survive the Lease Term or
earlier termination of this Lease with respect to any damage, injury or death
occurring during the Lease Term.
39. LESSOR'S LIABILITY: If Lessee should recover a money judgment against
Lessor arising in connection with this Lease, the judgment shall be satisfied
only out of the Lessor's interest in the Premises and neither Lessor or any of
its partners shall be liable personally for any deficiency.
40. CANCELLATION OF EXISTING LEASE: By lease dated September 15, 1993 (the
"Existing Lease"), Lessee leased from Lessor approximately 64,500 square feet
of space at 3301 Olcott, Santa Clara, CA. Effective on the Commencement Date
of this Lease, the Existing Lease term will be terminated early subject to all
the terms and conditions of the Existing Lease, except the obligation to pay
base rent. The cancellation of the Existing Lease shall not in any way release
Lessee from its obligations under the Existing Lease, including but not limited
to those covered under Sections 2 and 33.
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41. MISCELLANEOUS PROVISIONS: All rights and remedies hereunder are cumulative
and not alternative to the extent permitted by law and are in addition to all
other rights or remedies in law and in equity.
42. CHOICE OF LAW: This lease shall be construed and enforced in accordance
with the substantive laws of the State of California. The language of all
parts of this lease shall in all cases be construed as a whole according to its
fair meaning and not strictly for or against either Lessor or Lessee.
43. ENTIRE AGREEMENT: This Lease is the entire agreement between the parties,
and there are no agreements or representations between the parties except as
expressed herein. Except as otherwise provided for herein, no subsequent
change or addition to this Lease shall be binding unless in writing and signed
by the parties hereto.
IN WITNESS WHEREOF, Lessor and Lessee have executed these presents, the day and
year first above written.
LESSOR LESSEE
BERG & BERG DEVELOPERS ON COMMAND VIDEO
By: CARL E. BERG By: ROBERT SNYDER
---------------------------------- --------------------------------
signature of authorized signature of authorized
representative representative
Carl E. Berg Robert Snyder
-------------------------------------- ------------------------------------
printed name printed name
G.P. President
-------------------------------------- ------------------------------------
title title
24 June 1996 20 June 1996
-------------------------------------- ------------------------------------
date date
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DESCRIPTION TO COME
EXHIBIT A
<PAGE> 22
----------------------------------------------------------------------------------------------------------------
FOR INTERNAL USE ONLY EXHIBIT B
----------------------------------------------------------------------------------------------------------------
Tenant: On Command Video
----------------------------------------------------------------------------------------------------------------
Tenant Improvement Budget Square Feet - 95,000
----------------------------------------------------------------------------------------------------------------
Unit Estimated
----------------------------------------------------------------------------------------------------------------
Item Description Units Type Cost Amount
----------------------------------------------------------------------------------------------------------------
AIA Berg staff 1 lump sum 5000.00 5,000
----------------------------------------------------------------------------------------------------------------
HVAC Engineering 1 lump sum 10000.00 10,000
----------------------------------------------------------------------------------------------------------------
Electrical Engineering 1 lump sum 15000.00 15,000
----------------------------------------------------------------------------------------------------------------
Structural Engineering 1 lump sum 5000.00 5,000
----------------------------------------------------------------------------------------------------------------
Sprinkler Engineering 1 lump sum 2000.00 2,000
----------------------------------------------------------------------------------------------------------------
Interior Design Berg staff 1 lump sum 3000.00 3,000
----------------------------------------------------------------------------------------------------------------
General Conditions 1 lump sum 10000.00 10,000
----------------------------------------------------------------------------------------------------------------
Construction Utilities 1 lump sum 8000.00 8,000
----------------------------------------------------------------------------------------------------------------
Clean Up 1 lump sum 15000.00 15,000
----------------------------------------------------------------------------------------------------------------
Supervision 1 lump sum 30000.00 30,000
----------------------------------------------------------------------------------------------------------------
Final Janitorial 0.00 By Tenant
----------------------------------------------------------------------------------------------------------------
Reproduction 1 lump sum 2000.00 2,000
----------------------------------------------------------------------------------------------------------------
Demolition 1 lump sum 65000.00 65,000
----------------------------------------------------------------------------------------------------------------
Construction Security 1 lump sum 5000.00 5,000
----------------------------------------------------------------------------------------------------------------
Plan Check & Permits 1 lump sum 10000.00 10,000
----------------------------------------------------------------------------------------------------------------
Interior Plan Check Fee 1 lump sum 5000.00 5,000
----------------------------------------------------------------------------------------------------------------
Interior Building Permit 1 lump sum 5000.00 5,000
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Plumbing 2 Ms and 2 Ws at lobby 1 lump sum 22500.00 22,500
----------------------------------------------------------------------------------------------------------------
Plumbing Remodel 1 lump sum 5000.00 5,000
----------------------------------------------------------------------------------------------------------------
Coffee Bars 2 each 5000.00 10,000
----------------------------------------------------------------------------------------------------------------
Toilet Parts/Access./Mirrors 3 each 4000.00 12,000
----------------------------------------------------------------------------------------------------------------
Showers 2 each 10000.00 20,000
----------------------------------------------------------------------------------------------------------------
Lockers 1 lump sum 3250.00 3,250
----------------------------------------------------------------------------------------------------------------
Ceramic Tile (4' Wainscoat) Shower & new RR 1 lump sum 15000.00 15,000
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Electrical Redistribute existing 1 Allowance 145000.00 145,000
----------------------------------------------------------------------------------------------------------------
T-Bar Lighting T-8 lamps, elect. ballasts 1 lump sum 130000.00 130,000
----------------------------------------------------------------------------------------------------------------
Temporary Power, Cords & Boxes 1 lump sum 3000.00 3,000
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
HVAC Remodel existing 1 Allowance 45000.00 45,000
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Sound insulation 1 lump sum 3000.00 3,000
----------------------------------------------------------------------------------------------------------------
Millwork 1 lump sum 18000.00 18,000
----------------------------------------------------------------------------------------------------------------
Roof insulation 1 lump sum 5000.00 5,000
----------------------------------------------------------------------------------------------------------------
Doors, Frames & Hardware Use Existing 80 each 250.00 20,000
----------------------------------------------------------------------------------------------------------------
Drywall & Metal Framing 1200 ln.ft. 25.00 30,000
----------------------------------------------------------------------------------------------------------------
Dividing Wall 265 ln.ft. 32.00 8,480
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Lobby & Conference Upgrades Miscellaneous upgrades 1 lump sum 10000.00 10,000
----------------------------------------------------------------------------------------------------------------
Glass Walls in Sheetrock 3' x 8' steel frames and wire glass 10 each 850.00 8,500
----------------------------------------------------------------------------------------------------------------
Glass, Glazing & Mirrors Glass wall office 1 Allowance 18000.00 18,000
----------------------------------------------------------------------------------------------------------------
Acoustical Ceiling Remodel 95000 sq.ft. 0.70 66,500
----------------------------------------------------------------------------------------------------------------
Carpeting & Flooring 45000 sq.ft. 2.20 99,000
----------------------------------------------------------------------------------------------------------------
VCT 50000 lump sum 1.35 67,500
----------------------------------------------------------------------------------------------------------------
Painting/Wall Coverings 1 lump sum 26000.00 26,000
----------------------------------------------------------------------------------------------------------------
Patio & Fence 1 lump sum 24000.00 24,000
----------------------------------------------------------------------------------------------------------------
Parking Lot 1 lump sum 2000.00 2,000
----------------------------------------------------------------------------------------------------------------
Fire Protection Remodel 1 lump sum 20000.00 20,000
----------------------------------------------------------------------------------------------------------------
Central Fire Monitor 1 lump sum 2000.00 2,000
----------------------------------------------------------------------------------------------------------------
1
<PAGE> 23
FOR INTERNAL USE ONLY EXHIBIT B
------------------------------------------------------------------------------
Tenant: On Command Video
------------------------------------------------------------------------------
Tenant Improvement Budget Square Feet 95,000
------------------------------------------------------------------------------
Unit Estimated
Item Description Units Type Cost Amount
------------------------------------------------------------------------------
Fire Extinguishers 1 lump sum 3,000.00 3,000
------------------------------------------------------------------------------
Smoke Detection--Lobby 1 lump sum 5,000.00 5,000
------------------------------------------------------------------------------
Dock Levelers 2 each 3,700.00 7,400
------------------------------------------------------------------------------
Projection Screens 2 each 500.00 1,000
------------------------------------------------------------------------------
Miscellaneous Other 1 lump sum 25,000.00 71,670
------------------------------------------------------------------------------
SUBTOTAL 1,121,800
------------------------------------------------------------------------------
Management Fee @ 6% 67,000
------------------------------------------------------------------------------
Construction Interest
& Points @ 1% 11,200
------------------------------------------------------------------------------
SUBTOTAL 78,200
------------------------------------------------------------------------------
TOTAL 1,200,000
-------------------------------------------------------------------------------
COSTS PER ITEM MAY VARY, BUT BASED ON OUR UNDERSTANDING OF YOUR REQUIREMENTS, WE
ESTIMATE THAT WE CAN ACCOMPLISH ALL ITEMS ON THIS SCHEDULE FOR THE QUOTED RENT.
------------------------------------------------------------------------------
THE FOLLOWING ARE NOT INCLUDED IN OUR COST ESTIMATE: TELEPHONE, DATA, SECURITY,
OPEN OFFICE MOVABLE PARTITIONS, AND SPECIAL ON COMMAND REQUIREMENTS.
------------------------------------------------------------------------------
PARKING FOR THE WAREHOUSE SHALL INCLUDE 45 UNRESERVED PARKING SPACES.
------------------------------------------------------------------------------
THE ABOVE COSTS ARE TO REMODEL THE 95,000 SQ. FT., THE COST OF THE WAREHOUSE IS
INCLUDED IN OUR TURNKEY PROPOSAL. OUR RENT INCLUDES THE 95,000 SQ. FT. REMODEL
AND THE WAREHOUSE COMPLETE.
------------------------------------------------------------------------------
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Exhibit C
Lessor shall construct an approximate 36,000 sq.ft. warehouse between
6321 and 6331 San Ignacio as a turnkey project which shall conform in
general to the following:
24 feet clear height
3 docks
Distributed dump HVAC
Insulation to meet Title 24
Sealed concrete floor
Warehouse lighting
Overhead sprinklers (no rack sprinklers included)
3 Dock levelors
20 Convenience electrical outlets
2 Private offices
Restroom: 1 men's and 1 women's
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Exhibit E
Lessee Approval Deadlines
Lease signed 06/21/96
Approval of preliminary floor plan, single line 06/21/96
Final selection of all material and interior finishes for
construction such as carpet, ceramic tile, paint and any
other lessee selected materials & finishes 07/21/96
The Commencement Date shall be extended one day for each day Lessee does not
meet each deadline set forth on this Exhibit E.
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EXHIBIT A-3
DESCRIPTION TO COME