California-San Jose-2890 Zanker Road Lease - Spieker Properties LP and Selectica Inc.
BASIC LEASE INFORMATION
OFFICE NET
LEASE DATE: December 8, 1997
TENANT: Selectica, Inc., a California corporation
TENANT'S NOTICE ADDRESS: 2890 Zanker Road, Suite 101
San Jose, CA 95134
TENANT'S BILLING ADDRESS: 2890 Zanker Road, Suite 101
San Jose, CA 95134
TENANT CONTACT: Raj Jarwa PHONE NUMBER: (408) 450-8930
LANDLORD: Spieker Properties, L.P., a California
limited partnership
LANDLORD'S NOTICE ADDRESS: 2860 Zanker Road, Suite 102
San Jose, CA 95134
LANDLORD'S REMITTANCE ADDRESS: Spieker Properties, L.P.
P.O. Box 45587
Dept. #11311
San Francisco, CA 94145-0587
Project Description: Central Park Plaza, San Jose, California
Building Description: 2890 Zanker Road, San Jose, California 95134
Premises: Approximately 9,359 rentable square feet at
2890 Zanker Road, Suite 101, San Jose,
California
Permitted Use: General office and administrative use
Occupancy Density: 37 people
Parking Density: 37 non-exclusive spaces
Parking and Parking Charge: Not applicable
Scheduled Term Commencement Date: February 1, 1998
Length of Term: Five (5) years
Rent:
Base Rent: $16,846.20 per month during the first year
of the lease term (subject to adjustment as
provided in Paragraph 39 hereof)
Estimated First Year
Operating Expenses: $5,147.45 per month is estimated through
December, 1998.
Security Deposit: $51,287.00 cash security deposit payable
upon execution of Lease. $100,000.00 in the
form of an irrevocable Letter of Credit in
accordance with the provisions of Paragraph
39.C.
Tenant's Proportionate Share:
Of Building: 21.2% (44,088 total building square footage).
Of Project: 3.08% (303,866 total project square footage).
The foregoing Basic Lease Information is incorporated into and made a part of
this Lease. Each reference in this Lease to any of the Basic Lease Information
shall mean the respective information above and shall be construed to
incorporate all of the terms provided under the particular Lease paragraph
pertaining to such information. In the event of any conflict between the Basic
Lease Information and the Lease, the latter shall control.
Office Net Lease - Version 10.1
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TABLE OF CONTENTS
PAGE
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Basic Lease Information............................................... 1
Table of Contents..................................................... 2
1. Premises.............................................................. 3
2. Possession and Lease Commencement..................................... 3
3. Term.................................................................. 3
4. Use................................................................... 3
5. Rules and Regulations................................................. 4
6. Rent.................................................................. 4
7. Operating Expenses.................................................... 4
8. Insurance and Indemnification......................................... 6
9. Waiver of Subrogation................................................. 7
10. Landlord's Repairs and Maintenance.................................... 7
11. Tenant's Repairs and Maintenance...................................... 7
12. Alterations........................................................... 7
13. Signs................................................................. 8
14. Inspection/Posting Notices............................................ 8
15. Services and Utilities................................................ 8
16. Subordination......................................................... 9
17. Financial Statements.................................................. 9
18. Estoppel Certificate.................................................. 9
19. Security Deposit...................................................... 9
20. Tenant's Remedies..................................................... 10
21. Assignment of Subletting.............................................. 10
22. Authority of Tenant................................................... 10
23. Condemnation.......................................................... 11
24. Casualty Damage....................................................... 11
25. Holding Over.......................................................... 12
26. Default............................................................... 12
27. Liens................................................................. 13
28. Substitution.......................................................... 13
29. Transfers by Landlord................................................. 13
30. Right of Landlord to Perform Tenant's Covenants....................... 13
31. Waiver................................................................ 14
32. Notices............................................................... 14
33. Attorney's Fees....................................................... 14
34. successors and Assigns................................................ 14
35. Force Majeure......................................................... 14
36. Surrender of Premises................................................. 14
37. Parking............................................................... 14
38. Miscellaneous......................................................... 14
39. Additional Provisions................................................. 16
Signature............................................................. 18
Exhibits:
Exhibit A.............................................Rules and Regulations
Exhibit B...................................Site Plan, Property Description
Exhibit C............................Tenant Improvements and Specifications
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LEASE
THIS LEASE is made as of the eighth day of December, 1997, by and between
Spieker Properties, L.P., a California limited partnership (hereinafter called
"Landlord"), and Selectica, Inc., a California corporation (hereinafter called
"Tenant").
1. PREMISES
Landlord leases to Tenant and Tenant leases from Landlord, upon the terms
and conditions hereinafter set forth, those premises (the "Premises") outlined
in red on Exhibit B and described in the Basic Lease Information. The Premises
shall be all or part of a building (the "Building") and of a project (the
"Project") which may consist of more than one building, as described in the
Basic Lease Information. The Building and Project are outlined in blue and green
respectively on Exhibit B. Landlord and Tenant acknowledge that physical
changes may occur from time to time in the Premises, Building or Project, and
that the number of buildings which constitute the Project may change from time
to time, which may result in an adjustment in Tenant's Proportionate Share, as
defined in the Basic Lease Information, as provided in Paragraph 7.A.
2. POSSESSION AND LEASE COMMENCEMENT
A. EXISTING IMPROVEMENTS. If this Lease pertains to Premises in which the
interior improvements have already been constructed ("Existing Improvements"),
the provisions of this Paragraph 2.A. shall apply and the term commencement date
("Term Commencement Date") shall be the earlier of the date on which: (1) Tenant
takes possession of some or all of the Premises; or (2) Landlord notifies Tenant
that Tenant may occupy the Premises. If for any reason Landlord cannot deliver
possession of the Premises to Tenant on the scheduled Term Commencement Date,
Landlord shall not be subject to any liability therefor, nor shall Landlord be
in default hereunder nor shall such failure affect the validity of this Lease,
and Tenant agrees to accept possession of the Premises at such time as Landlord
is able to deliver the same, which date shall then be deemed the Term
Commencement Date. Tenant shall not be liable for any Rent (defined below) for
any period prior to the Term Commencement Date. Tenant acknowledges that Tenant
has inspected and accepts the Premises in their present condition, "as is," and
as suitable for, the Permitted Use (as defined below), and for Tenant's intended
operations in the Premises. Tenant agrees that the Premises and other
improvements are in good and satisfactory condition as of when possession was
taken. Tenant further acknowledges that no representations as to the condition
or repair of the Premises nor promises to alter, remodel or improve the Premises
have been made by Landlord or any agents of Landlord unless such are expressly
set forth in the Lease. Upon Landlord's request, Tenant shall execute and return
to Landlord a "Start-Up Letter" in which Tenant shall agree, among other things,
to acceptance of the Premises and to the determination of the Term Commencement
Date, in accordance with the terms of this Lease, but Tenant's failure or
refusal to do so shall not negate Tenant's acceptance of the Premises or affect
determination of the Term Commencement Date.
B. CONSTRUCTION OF IMPROVEMENTS. If this Lease pertains to a Building to be
constructed or improvements to be constructed within a Building, the
provisions of this Paragraph 2.B. shall apply in lieu of the provisions of
Paragraph 2.A. above and the term commencement date ("Term Commencement Date")
shall be the earlier of the date on which: (1) Tenant takes possession of some
or all of the Premises; or (2) the improvements to be constructed or performed
in the Premises by Landlord (if any) shall have been substantially completed in
accordance with the plans and specifications, if any, described on Exhibit C
and Tenant's taking of possession of the Premises or any part thereof shall
constitute Tenant's confirmation of substantial completion for all purposes
hereof, whether or not substantial completion of the Building or Project shall
have occurred. If for any reason Landlord cannot deliver possession of the
Premises to Tenant on the scheduled Term Commencement Date, Landlord shall not
be subject to any liability therefor, nor shall Landlord be in default
hereunder nor shall such failure affect the validity of this Lease, and Tenant
agrees to accept possession of the Premises at such time as such improvements
have been substantially completed, which date shall then be deemed the Term
Commencement Date. Tenant shall not be liable for any Rent for any period prior
to the Term Commencement Date (but without affecting any obligations of Tenant
under any improvement agreement appended to this Lease). In the event of any
dispute as to substantial completion of work performed or required to be
performed by Landlord, the certificate of Landlord's architect or general
contractor shall be conclusive. Substantial completion shall have occurred
notwithstanding Tenant's submission of a punchlist to Landlord, which Tenant
shall submit, if at all, within three (3) business days after the Term
Commencement Date or otherwise in accordance with any improvement agreement
appended to this Lease. Upon Landlord's request, Tenant shall promptly execute
and return to Landlord a Start-Up Letter in which Tenant shall agree, among
other things, to acceptance of the Premises and to the determination of the
Term Commencement Date, in accordance with the terms of this Lease, but
Tenant's failure or refusal to do so shall not negate Tenant's acceptance of
the Premises or affect determination of the Term Commencement Date.
3. TERM
The term of this Lease (the "Term") shall commence on the Term
Commencement Date and continue in full force and effect for the number of
months specified as the Length of Term in the Basic Lease Information or until
this Lease is terminated as otherwise provided herein. If the Term Commencement
Date is a date other than the first day of the calendar month, the Term shall
be the number of months of the Length of Term in addition to the remainder of
the calendar month following the Term Commencement Date.
4. USE
A. GENERAL. Tenant shall use the Premises for the permitted use specified in
the Basic Lease Information ("Permitted Use") and for no other use or purpose.
Tenant shall control Tenant's employees, agents, customers, visitors, invitees,
licensees, contractors, engineers and subtenants (collectively, "Tenant's
Parties") in such a manner that Tenant and Tenant's Parties cumulatively do not
exceed the occupancy density (the "Occupancy Density") or the parking density
(the "Parking Density") specified in the Basic Lease Information at any time.
Tenant shall pay the Parking Charge specified in the Basic Lease Information as
Additional Rent (as hereinafter defined) hereunder. So long as Tenant is
occupying the Premises, Tenant and Tenant's Parties shall have the nonexclusive
right to use, in common with other parties occupying the Building or Project,
the parking areas, driveways and other common areas of the Building and Project,
subject to the terms of this Lease and such rules and regulations as Landlord
may from time to time prescribe. Landlord reserves the right to alter or modify
the common area from time to time, including the configuration thereof and the
amenities and facilities which Landlord may determine to provide from time to
time.
B. LIMITATIONS. Tenant shall not permit any odor, smoke, dust, gas,
substances, noise or vibrations to emanate from the Premises or from any
portion of the common areas as a result of Tenant's or any Tenant's Party's use
thereof, nor take any action which would constitute a nuisance or would
disturb, obstruct or endanger any other tenants or occupants of the Building or
Project or elsewhere, or interfere with their use of their respective premises
or common areas. Storage outside the Premises of materials, vehicles or any
other items is prohibited. Tenant shall not use or allow the Premises to be
used for any immoral, improper or unlawful purpose, nor shall Tenant cause or
maintain or permit any nuisance in, on or about the Premises. Tenant shall not
commit or suffer the commission of any waste in,
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on or about the Premises. Tenant shall not allow any sale by auction upon the
Premises, or place any leads upon the floors, walls or ceilings which could
endanger the structure, or place any harmful substances in the drainage system
of the Building or Project. No waste, materials or refuse shall be dumped upon
or permitted to remain outside the Premises. Landlord shall not be responsible
to Tenant for the non-compliance by any other tenant or occupant of the
Building or Project with any of the above-referenced rules or any other terms
or provisions of such tenant's or occupant's lease or other contract.
C. COMPLIANCE WITH REGULATIONS. By entering the Premises, Tenant accepts the
Premises in the condition existing as of the date of such entry. Tenant shall at
its sole cost and expense strictly comply with all existing or future applicable
municipal, State and federal and other governmental statutes, rules,
requirements, regulations, laws and ordinances, including zoning ordinances and
regulations, and covenants, ?? and restrictions of record governing and relating
to the use, occupancy or possession of the Premises, to Tenant's use of the
common areas, or to the use, storage, generation or disposal of Hazardous
Materials (hereinafter defined) (collectively "Regulations"). Tenant shall at
its sole and expense obtain any and all licenses or permits necessary for
Tenant's use of the Premises. Tenant shall at its sole cost and expense promptly
comply with the requirements of any board of fire underwriters or other similar
body now or hereafter constituted. Tenant shall not do or permit anything to be
done in, or, under or about the Project or bring or keep anything which will in
any way increase the rate of any insurance upon the Premises, Building or
Project or upon any contents herein or cause a cancellation of said insurance or
otherwise affect said insurance in any manner. Tenant shall indemnify, defend,
protect and hold Landlord harmless from and against any loss, cost, expense,
damage, attorneys' fees or liability arising out of the failure of Tenant to
comply with any Regulation. Tenant's obligations pursuant to the foregoing
indemnity shall survive the expiration or earlier termination of this Lease.
D. HAZARDOUS MATERIALS. As used in this Lease, "Hazardous Materials" shall
include, but not be limited to, hazardous, toxic and radioactive materials and
those substances defined as "hazardous substances," "hazardous materials,"
"hazardous waste," "toxic substances," or other similar designations to any
Registration. Tenant shall not cause, or allow any of Tenant's Parties to cause,
any Hazardous Materials to be handled, used, generated, moved, released or
disposed of in, on, under or about the Premises, the Building or the Project or
surrounding land or environment in violation of any Regulations. Tenant must
obtain Landlord's written consent prior to the introduction of any Hazardous
Materials on to the Project. Notwithstanding the foregoing, Tenant may handle,
store, use and dispose of products containing small quantities of Hazardous
Materials for "general office purposes" (such as toner for copiers) to the
extent customary and necessary for the Permitted Use of the Premises, provided
that Tenant shall always handle, store, use and dispose of any such Hazardous
Materials in a safe and lawful manner and never allow such Hazardous Materials
to contaminate the Premises, Building, or Project or surrounding land or
environment. Tenant shall immediately notify Landlord in writing of any
Hazardous Materials' contamination of any portion of the Project of which Tenant
becomes aware, whether or not caused by Tenant. Landlord shall have the right at
all reasonable times to inspect the Premises and to conduct tests and
investigations to determine whether Tenant is in compliance with the foregoing
provisions, the costs of all such inspections, tests and investigations to be
borne by Tenant. Tenant shall indemnify, defend (by counsel reasonably
acceptable to Landlord), protect and hold Landlord harmless from and against any
and all claims, liabilities, losses, costs, loss of rents, liens, damages,
injuries or expenses (including attorneys' and consultants' fees and court
costs), demands, causes of action, or judgments directly or indirectly arising
out of or related to the use, generation, storage, release, or disposal of
Hazardous Materials by Tenant or any of Tenant's Parties in, on, under and about
the Premises, the Building or the Project or surrounding land or environment,
which indemnity shall include, without limitation, damages for personal or
bodily injury, property damages, damage to the environment or natural resources
occurring on or off the Premises, loans attributable to discrimination in value
or adverse affects on marketability, the cost of any investigation, monitoring,
government oversight, repair, removal, remediation, restoration, abandonment and
disposal, and the preparation of any closure or other required plans, whether
such action is required or necessary prior to or following the expiration or
earlier termination of this Lease. Neither the consent by Landlord to the use,
generation, storage, release or disposal of Hazardous Materials nor the strict
compliance by Tenant with all laws pertaining to Hazardous Materials shall
excuse Tenant from Tenant's obligation of indemnification pursuant to this
Paragraph 4.D. Tenant's obligations pursuant to the foregoing indemnity shall
survive the expiration or earlier termination of this Lease.
5. RULES AND REGULATIONS
Tenant shall faithfully observe and comply with the building rules and
regulations attached hereto as Exhibit A and any other rules and regulations and
any modifications or additions thereto which Landlord may from time to time
prescribe in writing for the purpose of maintaining the proper care,
cleanliness, safety, traffic flow and general order of the Premises or the
Building or Project. Tenant shall cause Tenant's Parties to comply with such
rules and regulations. Landlord shall not be responsible to Tenant for the
non-compliance by any other tenant or occupant of the Building or Project with
any of such rules and regulations, any other tenant's or occupant's lease or any
Regulations.
6. RENT
A. BASE RENT. Tenant shall pay to Landlord and Landlord shall receive, without
notice or demand throughout the Term, Base Rent as specified in the Basic Lease
Information, payable in monthly installments in advance on or before the first
day of each calendar month, in lawful money of the United States, without
deduction or offset whatsoever, at the Remittance Address specified in the Basic
Lease Information, or to such other place as Landlord may from time to time
designate in writing. Base Rent for the first full month of the Term shall be
paid by Tenant upon Tenant's execution of this Lease. If the obligation for
payment of Base Rent commences on a day other than the first day of a month,
then Base Rent shall be prorated and the prorated installment shall be paid on
the first day of the calendar month next succeeding the Term Commencement Date.
The Base Rent payable by Tenant hereunder is subject to adjustment as provided
elsewhere in this Lease, as applicable. As used herein, the term "Base Rent"
shall mean the Base Rent specified in the Basic Lease Information as it may be
so adjusted from time to time.
B. ADDITIONAL RENT. All monies other than Base Rent required to be paid by
Tenant hereunder, including, but not limited to, Tenant's Proportionate Share
of Operating Expenses, as specified in Paragraph 7 of this Lease, charges to be
paid by Tenant under Paragraph 15, the interest and late charge described in
Paragraphs 26.C and D., and any monies spent by Landlord pursuant to Paragraph
30, shall be considered additional rent ("Additional Rent") "Rent" shall mean
Base Rent and Additional Rent.
7. OPERATING EXPENSES
A. OPERATING EXPENSES. In addition to the Base Rent required to be paid
hereunder, Tenant shall pay as Additional Rent, Tenant's Proportionate Share, as
defined in the Basic Lease Information, of Operating Expenses (defined below) in
the manner set forth below. Tenant shall pay the applicable Tenant's
Proportionate Share of each such Operating Expenses. Landlord and Tenant
acknowledge that if the number of buildings which constitute the Project
increases or decreases, or if physical changes are made to the Premises,
Building or Project or the configuration of any thereof, Landlord may at its
discretion reasonably adjust Tenant's Proportionate Share of the Building or
Project to reflect the change. Landlord's determination of Tenant's
Proportionate Share of the Building and of the Project shall be conclusive so
long as it is reasonably and consistently applied. "Operating Expenses" shall
mean all expenses and costs of every kind and nature which Landlord shall pay or
become obligated to pay, because of or in connection with the ownership,
management, maintenance, repair, preservation, replacement and operation of the
Building or Project and its supporting facilities (as determined in a
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reasonable manner) other than those expenses and costs which are specifically
attributable to Tenant or which are expressly made the financial responsibility
of Landlord pursuant to this Lease. Operating Expenses shall include, but are
not limited to, the following:
(1) TAXES. All real property taxes and assessments, possessory interest
taxes, sales taxes, personal property taxes, business or license taxes or
fees, gross receipts taxes, service payments in lieu of such taxes or fees,
annual or periodic license or use fees, excises, transit charges, and
other impositions, general and special, ordinary and extraordinary,
unforeseen as well as foreseen, of any kind (including fees "in-lieu" of
any such tax or assessment) which are new or hereafter assessed, levied,
charged, confirmed, or imposed by any public authority upon the Building or
Project, its operations or the Rent (or any portion or component thereof),
or any tax, assessment or fee imposed in substitution, partially or
totally, of any of the above. Operating Expenses shall also include any
taxes, assessments, reassessments, or other fees or impositions with
respect to the development, leasing, management, maintenance, alteration,
repair, use or occupancy of the Premises, Building or Project or any
portion thereof, including, without limitation, by or for Tenant, and all
increases therein or reassessments thereof whether the increases or
reassessments result from increased rate and/or valuation (whether upon a
transfer of the Building or Project or any portion thereof or any interest
therein or for any other reason). If it shall not be lawful for Tenant to
reimburse Landlord for all or any part of such taxes, the monthly rental
payable to Landlord under this Lease shall be revised to net Landlord the
same net rental after imposition of any such taxes by Landlord as would
have been payable to Landlord prior to the payment of any such taxes.
(2) INSURANCE. All insurance premiums and costs, including, but not
limited to, any deductible amounts, premiums and other costs of insurance
incurred by Landlord, including for the insurance coverage set forth in
Paragraph 8.A. herein.
(3) COMMON AREA MAINTENANCE.
(a) Repairs, replacements, and general maintenance of and for the
Building and Project and public and common areas of the Building and
Project, including, but not limited to, the roof, windows, elevators,
restrooms, conference rooms, health club facilities, lobbies,
mezzanines, balconies, mechanical rooms, building exteriors, alarm
systems, pest extermination, handicapped areas, parking and service
areas, driveways, sidewalks, loading areas, fire sprinkler systems,
sanitary and storm sewer lines, utility services,
heating/ventilation/air conditioning systems, electrical, mechanical
or other systems, telephone equipment and wiring servicing, plumbing,
lighting, and any other items or areas which affect the operation or
appearance of the Building or Project, which determination shall be at
Landlord's discretion, except for: those items expressly made the
financial responsibility of Landlord pursuant to Paragraph 10 hereof;
those items to the extent paid for by the proceeds of insurance; and
those items attributable solely or jointly to specific tenants of the
Building or Project.
(b) Repairs, replacements, and general maintenance shall include the
cost of any capital improvements made to or capital assets acquired
for the Project or Building that in Landlord's discretion may reduce
any other Operating Expenses, including present or future repair work,
are reasonably necessary for the health and safety of the occupants of
the Building or Project, or are required under any Regulation, such
costs or allocable portions thereof to be amortized over such
reasonable period as Landlord shall determine, together with interest
on the unamortized balance at the publicly announced "prime rate"
charged by Wells Fargo Bank, N.A. (San Francisco) or its successor at
the time such improvements or capital assets are constructed or
acquired, plus two (2) percentage points, or in the absence of such
prime rate, then at the U.S. Treasury six-month market note (or bond,
if so designated) rate as published by any national financial
publication selected by Landlord, plus four (4) percentage points, but
in no event more than the maximum rate permitted by law.
(c) Payment under or for any easement, licence, permit, operating
agreement, declaration, restrictive covenant or instrument relating to
the Building or Project.
(d) All expenses related to services and costs of supplies and
equipment used in maintaining the Premises, Building and Project, the
equipment therein and the adjacent sidewalks, driveways, parking and
service areas, including, without limitation, expenses related to
service agreements regarding security, fire and other alarm systems,
janitorial services, window cleaning, elevator maintenance, Building
exterior maintenance, landscaping and expenses related to the
administration, management and operation of the Project, including
without limitation salaries, wages and benefits and management office
rent.
(e) The cost of supplying any services and utilities which benefit
all or a portion of the Premises, Building or Project, including
without limitation services and utilities provided pursuant to
Paragraph 15 hereof.
(f) A management and accounting cost recovery fee equal to five
percent (5%) of the sum of the Project's base rents and Operating
Expenses (other than such management and accounting fee).
If the rentable area of the Building and/or Project is not fully occupied
during any fiscal year of the Term as determined by Landlord, an adjustment may
be made in Landlord's discretion in computing the Operating Expenses for such
year so that Tenant pays an equitable portion of all variable items (e.g.,
utilities, janitorial services and other component expenses that are affected
by variations in occupancy levels) of Operating Expenses, as reasonably
determined by Landlord; provided, however, that in no event shall Landlord be
entitled to collect in excess of one hundred percent (100%) of the total
Operating Expenses from all of the tenants in the Building or Project, as the
case may be.
Operating Expenses shall not include specific costs incurred for the
account of, separately billed to and paid by specific tenants of the Building
or Project. Notwithstanding anything herein to the contrary, in any instance
wherein Landlord, in Landlord's sole discretion, deems Tenant to be responsible
for any amounts greater than Tenant's Proportionate Share, Landlord shall have
the right to allocate costs in any manner Landlord deems appropriate.
The above enumeration of services and facilities shall not be deemed to
impose an obligation on Landlord to make available or provide such services or
facilities except to the extent if any that Landlord has specifically agreed
elsewhere in this Lease to make the same available or provide the same. Without
limiting the generality of the foregoing, Tenant acknowledges and agrees that
it shall be responsible for providing adequate security for its use of the
Premises, the Building and the Project and that Landlord shall have no
obligation or liability with respect thereto, except to the extent if any that
Landlord has specifically agreed elsewhere in this Lease to provide the same.
B. PAYMENT OF ESTIMATED OPERATING EXPENSES. "Estimated Operating Expenses"
for any particular year shall mean Landlord's estimate of the Operating
Expenses for such fiscal year made with respect to such fiscal year as
hereinafter provided. Landlord shall have the right from time to time to revise
its fiscal year and interim accounting periods so long as the periods as so
revised are reconciled with prior periods in a reasonable manner. During the
last month of each fiscal year during the Term, or as soon thereafter as
practicable, Landlord shall give Tenant written notice of the Estimated
Operating Expenses for the ensuing fiscal year. Tenant shall pay Tenant's
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Proportionate Share of the Estimated Operating Expenses with installments of
Base Rent for the fiscal year to which the Estimated Operating expenses applies
in monthly installments on the first day of each calendar month during such
year, in advance. If at any time during the course of the fiscal year, Landlord
determines that Operating Expenses are projected to vary from the then
Estimated Operating Expenses by more than ten percent (10%), Landlord may, by
written notice to Tenant, revise the Estimated Operating Expenses for the
balance of such fiscal year, and Tenant's monthly installments for the
remainder of such year shall be adjusted so that by the end of such fiscal year
Tenant has paid to Landlord Tenant's Proportionate Share of the revised
Estimated Operating Expenses for such year.
C. COMPUTATION OF OPERATING EXPENSES ADJUSTMENT. "Operating Expense Adjustment"
shall mean the difference between Estimated Operating Expenses and actual
Operating Expenses for any fiscal year determined as hereinafter provided.
Within one hundred twenty (120) days after the end of each fiscal year, or as
soon thereafter as practicable, Landlord shall deliver to Tenant a statement of
actual Operating Expenses for the fiscal year just ended, accompanied by a
computation of Operating Expense Adjustment. If such statement shows that
Tenant's payment based upon Estimated Operating Expenses is less than Tenant's
Proportionate Share of Operating Expenses, then Tenant shall pay to Landlord the
difference within twenty (20) days after receipt of such statement. If such
statement shows that Tenant's payments of Estimated Operating Expenses exceed
Tenant's Proportionate Share of Operating expenses, then (provided that Tenant
is not in default under this Lease) Landlord shall pay to Tenant the difference
within twenty (20) days after delivery of such statement to Tenant. If this
Lease has been terminated or the Term hereof has expired prior to the date of
such statement, then the Operating Expense Adjustment shall be paid by the
appropriate party within twenty (20) days after the date of delivery of the
statement. Should this Lease commence or terminate at any time other than the
first day of the fiscal year, Tenant's Proportionate Share of the Operating
Expense Adjustment shall be prorated based on a month of 30 days and the number
of calendar months during such fiscal year that this Lease is in effect.
Notwithstanding anything to the contrary contained in Paragraph 7.A or 7.B,
Landlord's failure to provide any notices or statements within the time periods
specified in those paragraphs shall in no way excuse Tenant from its obligation
to pay Tenant's Proportionate Share of Operating Expenses.
D. NET LEASE. This shall be a triple net Lease and Base Rent shall be paid to
Landlord absolutely net of all costs and expenses, except as specifically
provided to the contrary in this Lease. The provisions for payment of Operating
Expenses and the Operating Expense Adjustment are intended to pass on to Tenant
and reimburse Landlord for all costs and expenses of the nature described in
Paragraph 7.A, incurred in connection with the ownership, management,
maintenance, repair, preservation, replacement and operation of the Building
and/or Project and such additional facilities now and in subsequent years as
may be determined by Landlord to be necessary to the Building and/or Project.
E. TENANT AUDIT. If Tenant shall dispute the amount set forth in any statement
provided by Landlord under Paragraph 7.B, or 7.C, above, Tenant shall have the
right, not later than twenty (20) days following receipt of such statement and
upon the condition that Tenant shall first deposit with Landlord the full
amount in dispute, to cause Landlord's books and records with respect to
Operating Expenses for such fiscal year to be audited by certified public
accountants selected by Tenant and subject to Landlord's reasonable right of
approval. The Operating Expense Adjustment shall be appropriately adjusted on
the basis of such audit. If such audit discloses a liability for a refund in
excess of ten percent (10%) of Tenant's Proportionate Share of the Operating
Expenses previously reported, the cost of such audit shall be borne by
Landlord; otherwise the cost of such audit shall be paid by Tenant. If Tenant
shall not request an audit in accordance with the provisions of this Paragraph
7.E. within twenty (20) days after receipt of Landlord's statement provided
pursuant to Paragraph 7.B. or 7.C., such statement shall be final and binding
for all purposes hereof.
8. INSURANCE AND INDEMNIFICATION
A. LANDLORD'S INSURANCE. All insurance maintained by Landlord shall be for the
sole benefit of Landlord and under Landlord's sole control.
(1) PROPERTY INSURANCE. Landlord agrees to maintain property insurance
insuring the Building against damage or destruction due to risk including
fire, vandalism, and malicious mischief in an amount not less than the
replacement cost thereof, in the form and with deductibles and endorsements
as selected by Landlord. At its election, Landlord may instead obtain "All
Risk" coverage, and may also obtain earthquake, pollution, and/or flood
insurance in amounts selected by Landlord.
(2) OPTIONAL INSURANCE. Landlord, at Landlord's option, may also carry
insurance against loss of rent, in an amount equal to the amount of Base
Rent and Additional Rent that Landlord could be required to abase to all
Building tenants in the event of condemnation or casualty damage for a
period of twelve (12) months. Landlord may also carry such other insurance
as Landlord may deem prudent or advisable, including, without limitation,
liability insurance in such amounts and on such terms as Landlord shall
determine. Landlord shall not be obligated to insure, and shall have no
responsibility whatsoever for any damage to, any furniture, machinery,
goods, inventory or supplies, or other personal property or fixtures which
Tenant may keep or maintain in the Premises, or any leasehold improvements,
additions or alterations within the Premises.
B. TENANT'S INSURANCE.
(1) PROPERTY INSURANCE. Tenant shall procure at Tenant's sole cost and
expense and keep in effect from the date of this Lease and at all times
until the end of the Term, insurance on all personal property and fixtures
of Tenant and all improvements, additions or alterations made by or for
Tenant to the Premises on an "All Risk" basis, insuring such property for
the full replacement value of such property.
(2) LIABILITY INSURANCE. Tenant shall procure at Tenant's sole cost and
expense and keep in effect from the date of this Lease and at all times
until the end of the Term Commercial General Liability insurance covering
bodily injury and property damage liability occurring in or about the
Premises or arising out of the use and occupancy of the Premises and the
Project, and any part of either, and any areas adjacent thereto, and the
business operated by Tenant or by any other occupant of the Premises. Such
insurance shall include Broad Form Contractual Liability insurance coverage
insuring all of Tenant's indemnity obligations under this Lease. Such
coverage shall have a minimum combined single limit of liability of at least
Two Million Dollars ($2,000,000.00), and a minimum general aggregate limit
of Three Million Dollars ($3,000,000.00), with an "Additional Insured -
Managers or Lessors of Premises Endorsement." All such policies shall be
written to apply to all bodily injury, property damage or loss, personal
injury and other covered loss, however occasioned, occurring during the
policy term, shall be endorsed to add Landlord and any party holding an
interest to which this Lease may be subordinated as an additional insured,
and shall provide that such coverage shall be "primary" and non-contributing
with any insurance maintained by Landlord, which shall be excess insurance
only. Such coverage shall also contain endorsements; (i) deleting any
employee exclusion on personal injury coverage; (ii) including employees as
additional insureds: and (iii) providing for coverage of employer's
automobile non-ownership liability. All such insurance shall provide for the
severability of interests of insureds; and shall be written on an
"occurrence" basis, which shall afford coverage for all claims based on
acts, omissions, injury ad damage, which occurred or arose (or the onset of
which occurred or arose) in whole or in part during the policy period.
(3) WORKERS' COMPENSATION AND EMPLOYERS' LIABILITY INSURANCE. Tenant shall
carry Workers' Compensation Insurance as required by any Regulation,
throughout the Term at Tenant's sole cost and expense. Tenant shall also
carry
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Employers' Liability insurance in amounts not less than One Million
Dollars ($1,000,000) each accident for bodily injury by accident; One
Million Dollars ($1,000,000) policy limit for bodily injury by disease;
and One Million Dollars ($1,000,000) each employee for bodily injury by
disease, throughout the Term at Tenant's sole cost and expense.
(4) GENERAL INSURANCE REQUIREMENTS. All coverages described in this
Paragraph 8.B. shall be endorsed to (i) provide Landlord with thirty (30)
days' notice of cancellation or change in terms; and (ii) waive all
rights of subrogation by the insurance carrier against Landlord. If at
any time during the Term the amount or coverage of insurance which Tenant
is required to carry under this Paragraph 8.B. is, in Landlord's
reasonable judgment, materially less than the amount or type of insurance
coverage typically carried by owners or tenants of properties located in
the general area in which the Premises are located which are similar to
and operated for similar purposes as the Premises or if Tenant's use of
the Premises should change with or without Landlord's consent, Landlord
shall have the right to require Tenant to increase the amount or change
the types of insurance coverage required under this Paragraph 8.B. All
insurance policies required to be carried under this Lease shall be
written by companies rated A VIII or better in "Best's Insurance Guide"
and authorized to do business in the State of California. In any event
deductible amounts shall not exceed Five Thousand Dollars ($5,000).
Tenant shall deliver to Landlord on or before the Term Commencement Date,
and thereafter at least thirty (30) days before the expiration dates of
the expired policies, certified copies of Tenant's insurance policies, or
a certificate evidencing the same issued by the insurer thereunder; and,
if Tenant shall fail to procure such insurance, or to deliver such
policies or certificates, Landlord may, at Landlord's option and in
addition to Landlord's other remedies in the event of a default by Tenant
hereunder, procure the same for the account of Tenant, and the cost
thereof shall be paid to Landlord as Additional Rent.
C. INDEMNIFICATION. Tenant shall indemnify, defend by counsel reasonably
acceptable to Landlord, protect and hold Landlord harmless from and against any
and all claims, liabilities, losses, costs, loss of rents, liens, damages,
injuries or expenses, including reasonable attorneys' and consultants' fees and
court costs, demands, causes of action, or judgments, directly or indirectly
arising out of or related to: (1) claims of injury to or death of persons or
damage to property occurring or resulting directly or indirectly from the use
or occupancy of the Premises by Tenant or Tenant's Parties, or from activities
or failures to act of Tenant or Tenant's Parties; (2) claims arising from work
or labor performed, or for materials or supplies furnished to or at the request
or for the account of Tenant in connection with performance of any work done
for the account of Tenant within the Premises or Project; (3) claims arising
from any breach or default on the part of Tenant in the performance of any
covenant contained in this Lease; and (4) claims arising from the negligence
or intentional acts or omissions of Tenant or Tenant's Parties. The foregoing
indemnity by Tenant shall not be applicable to claims to the extent arising
from the gross negligence or willful misconduct of Landlord. The provisions of
this Paragraph shall survive the expiration or earlier termination of this
Lease.
9. WAIVER OF SUBROGATION
To the extent permitted by law and without affecting the coverage
provided by insurance to be maintained hereunder or any other rights or
remedies, Landlord and Tenant each waive any right to recover against the other
for: (a) damages for injury to or death of persons; (b) damages to property,
including personal property; (c) damages to the Premises or any part thereof;
and (d) claims arising by reasons of the foregoing due to hazards covered by
insurance maintained or required to be maintained pursuant to this Lease to the
extent of proceeds recovered therefrom, or proceeds which would have been
recoverable therefrom in the case of the failure of any party to maintain any
insurance coverage required to be maintained by such party pursuant to this
Lease. This provision is intended to waive fully, any rights and/or claims
arising by reason of the foregoing, but only to the extent that any of the
foregoing damages and/or claims referred to above are covered, and only to the
extent of such coverage, by insurance actually carried or required to be
maintained pursuant to this Lease by either Landlord or Tenant. This provision
is also intended to waive fully, and for the benefit of each party, any rights
and/or claims which might give rise to a right of subrogation on any insurance
carrier. Subject to all qualifications of this Paragraph 9, Landlord waives its
rights as specified in this Paragraph 9 with respect to any subtenant that it
has approved pursuant to Paragraph 21 but only in exchange for the written
waiver of such rights to be given by such subtenant to Landlord upon such
subtenant taking possession of the Premises or a portion thereof. Each party
shall cause each insurance policy obtained by it to provide that the insurance
company waives all right of recovery by way of subrogation against either party
in connection with any damage covered by any policy.
10. LANDLORD'S REPAIRS AND MAINTENANCE
Landlord shall at Landlord's expense maintain in good repair, reasonable
wear and tear excepted, the structural soundness of the roof, foundations, and
exterior walls of the Building. The term "exterior walls" as used herein shall
not include windows, glass or plate glass, doors, special store fronts or office
entries. Any damage clause by or repairs necessitated by any negligence or act
of Tenant or Tenant's Parties may be repaired by Landlord at Landlord's option
and Tenant's expense. Tenant shall immediately given Landlord written notice of
any defect or need of repairs in such components of the Building for which
Landlord is responsible, after which Landlord shall have reasonable opportunity
and the right to enter the Premises at all reasonable times to repair same.
Landlord's liability with respect to any defects, repairs or maintenance for
which Landlord is responsible under any of the provisions of this Lease shall be
limited to the cost of such repairs or maintenance, and there shall be no
abatement of rent and no liability of Landlord by reason of any injury to or
interference with Tenant's business arising from the making of repairs,
alterations or improvements in or to any portion of the Premises, the Building
or the Project or to fixtures, appurtenances or equipment in the Building,
except as provided in Paragraph 24. By taking possession of the Premises, Tenant
accepts them "as is," as being in good order, condition and repair and the
condition in which Landlord is obligated to deliver them and suitable for the
Permitted Use and Tenant's intended operations in the Premises, whether or not
any notice of acceptance is given.
11. TENANT'S REPAIRS AND MAINTENANCE
Tenant shall at all times during the Term at Tenant's expense maintain
all parts of the Premises and such portions of the Building as are within the
exclusive control of Tenant in a first-class, good, clean and secure condition
and promptly make all necessary repairs and replacements, as determined by
Landlord, with materials and workmanship of the same character, kind and quality
as the original. Notwithstanding anything to the contrary contained herein,
Tenant shall, at its expense, promptly repair any damage to the Premises or the
Building or Project resulting from or caused by any negligence or act of Tenant
or Tenant's Parties.
12. ALTERATIONS
A. Tenant shall not make, or allow to be made, any alterations, physical
additions, improvements or partitions, including without limitation the
attachment of any fixtures or equipment, in, about or to the Premises
("ALTERATIONS") without obtaining the prior written consent of Landlord, which
consent shall not be unreasonably withheld with respect to proposed Alterations
which: (a) comply with all applicable Regulations; (b) are, in Landlord's
opinion, comparable with the Building or the Project and its mechanical,
plumbing, electrical, heating/ventilation/air conditioning systems; and (c)
will not interfere with the use and occupancy of any other portion of the
Building or Project by any other tenant or it invitees. Specifically, but
without limiting the generality of the foregoing, Landlord shall have the right
of written consent for all plans and specifications for the proposed
Alterations, construction means and methods, all appropriate permits and
licenses, any contractor or subcontractor to be employed on the work of
Alterations, and the time for performance of such work, and may impose rules
and regulations for contractors and subcontractors performing such work. Tenant
shall also supply to
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Landlord any documents and information reasonably requested by Landlord in
connection with Landlord's consideration of a request for approval hereunder.
Tenant shall cause all Alterations to be accomplished in a first-class, good and
workmanlike manner, and to comply with all applicable Regulations and Paragraph
27 hereof. Tenant shall at Tenant's sole expense, perform any additional work
required under applicable Regulations due to the Alternations hereunder. No
review or consent by Landlord of or to any proposed Alteration or additional
work shall constitute a waiver of Tenant's obligations under this Paragraph 12,
nor constitute any warranty or representation that the same complies with all
applicable Regulations, for which Tenant shall at all times be solely
responsible. Tenant shall reimburse Landlord for all costs which Landlord may
incur in connection with granting approval to Tenant for any such Alterations,
including any costs or expenses which Landlord may incur in electing to have
outside architects and engineers review said plans and specifications, and shall
pay Landlord an administration fee of fifteen percent (15%) of the cost of the
Alterations. All such Alterations shall remain the property of Tenant until the
expiration or earlier termination of this Lease, at which time they shall be and
become the property of Landlord; provided, however, that Landlord may, at
Landlord's option, require that Tenant, at Tenant's expense, remove any or all
Alterations made by Tenant and restore the Premises by the expiration or earlier
termination of this Lease, to their condition existing prior to the
construction of any such Alterations. All such removals and restoration shall
be accomplished in a first-class and good and workmanlike manner so as not to
cause any damage to the Premises or Project whatsoever. If Tenant fails to
remove such Alterations or Tenant's trade fixtures or furniture or other
personal property, Landlord may keep and use them or remove any of them and
cause them to be stored or sold in accordance with applicable law, at Tenant's
sole expense. In addition to and wholly apart from Tenant's obligation to pay
Tenant's Proportionate Share of Operating Expenses, Tenant shall be responsible
for and shall pay prior to delinquency any taxes or governmental service fees,
possessory interest taxes, fees or charges in lieu of any such taxes, capital
levies, or other charges imposed upon, levied with respect to or assessed
against its fixtures or personal property, on the value of Alterations within
the Premises, and on Tenant's interest pursuant to this Lease, or any increase
in any of the foregoing based on such Alterations. To the extent that any such
taxes are not separately assessed or billed to Tenant, Tenant shall pay the
amount thereof as invoiced to Tenant by Landlord.
B. In compliance with Paragraph 27 hereof, at least ten (10) business days
before beginning construction of any Alteration, Tenant shall give Landlord
written notice of the expected commencement date of that construction to permit
Landlord to post and record a notice of non-responsibility. Upon substantial
completion of construction, if the law so provides, Tenant shall cause a timely
notice of completion to be recorded in the office of the recorder of the county
in which the Building is located.
13. SIGNS
Tenant shall not place, install, affix, paint or maintain any signs,
notices, graphics or banners whatsoever or any window decor which is visible in
or from public view or corridors, the common areas or the exterior of the
Premises or the Building, in or on any exterior window or window fronting upon
any common areas or service area without Landlord's prior written approval
which Landlord shall have the right to withhold in its absolute and sole
discretion; provided that Tenant's name shall be included in any
Building-standard door and directory signage, if any, in accordance with
Landlord's Building signage program, including without limitation, payment by
Tenant of any fee charged by Landlord for maintaining such signage, which fee
shall constitute Additional Rent hereunder. Any installation of signs, notices,
graphics or banners on or about the Premises or Project approved by Landlord
shall be subject to any Regulations and to any other requirements imposed by
Landlord. Tenant shall remove all such signs or graphics by the expiration or
any earlier termination of this Lease. Such installations and removals shall be
made in such manner as to avoid injury to or defacement of the Premises,
Building or Project and any other improvements contained therein, and Tenant
shall repair any injury or defacement including without limitation
discoloration caused by such installation or removal.
14. INSPECTION/POSTING NOTICES
After reasonable notice, except in emergencies where no such notice shall
be required, Landlord and Landlord's agent and representatives, shall have the
right to enter the Premises to inspect the same, to clean, to perform such work
as may be permitted or required hereunder, to make repairs or alterations to
the Premises, Building or Project or to other tenant spaces therein, to deal
with emergencies, to post such notices as may be permitted or required by law
to prevent the perfection of liens against Landlord's interest in the Project
or to exhibit the Premises to prospective tenants, purchasers, encumbrancers or
to others, or for any other purpose as Landlord may deem necessary or
desirable; provided, however, that Landlord shall use reasonable efforts not to
unreasonably interfere with Tenant's business operations. Tenant shall not be
entitled to any abatements of Rent by reason of the exercise of any such right
of entry. At any time within six (6) months prior to the expiration of the Term
or following any earlier termination of this Lease or agreement to terminate
this Lease, Landlord shall have the right to erect on the Premises, Building
and/or Project a suitable sign indicating that the Premises are available for
lease.
15. SERVICES AND UTILITIES
A. Provided Tenant shall not be in default hereunder, and subject to the
provisions elsewhere herein contained and to the rules and regulations of the
Building, Landlord shall furnish to the Premises during ordinary business hours
of generally recognized business days, to be determined by Landlord (but
exclusive, in any event, of Saturdays, Sundays and legal holidays), water for
lavatory and drinking purposes and electricity, heat and air conditioning as
specified in the Basic Lease Information (as applicable) or as usually
furnished or supplied for use of the Premises for reasonable and normal office
use as of the date Tenant takes possession of the Premises as determined by
Landlord (but not including above-standard or continuous cooling for excessive
heat-generating machines, excess lighting or equipment), janitorial services
during the times and in the manner that such services are, in Landlord's
judgment, customarily furnished in comparable office buildings in the immediate
market area, and elevator service, which shall mean service either by
nonattended automatic elevators or elevators with attendants, or both, at the
option of Landlord. Tenant acknowledges that Tenant has inspected and accepts
the water, electricity, heat and air conditioning and other utilities and
services being supplied or furnished to the Premises as of the date Tenant
takes possession of the Premises, as being sufficient for use of the Premises
for reasonable and normal office use in their present condition, "as is," and
suitable for the Permitted Use, and for Tenant's intended operations in the
Premises. Landlord shall have no obligation to provide additional or
after-hours electricity, heating or air conditioning, but if Landlord elects to
provide such services at Tenant's request, Tenant shall pay to Landlord a
reasonable charge for such services as determined by Landlord. Tenant agrees to
keep and cause to be kept closed all window covering when necessary because of
the sun's position, and Tenant also agrees at all times to cooperate fully with
Landlord and to abide by all of the regulations and requirements which Landlord
may prescribe for the proper functioning and protection of electrical, heating,
ventilating and air conditioning systems. Wherever heat-generating machines,
excess lighting or equipment are used in the Premises which affect the
temperature otherwise maintained by the air conditioning system, Landlord
reserves the right to install supplementary air conditioning units in the
Premises and the cost thereof, including the cost of installation and the cost
of operation and maintenance thereof, shall be paid by Tenant to Landlord upon
demand by Landlord.
B. Tenant shall not without written consent of Landlord use any apparatus,
equipment or device in the Premises, including without limitation, computers,
electronic data processing machines, copying machines, and other machines,
using excess lighting or using electric current, water, or any other resource
in excess of or which will in any way increase the amount of electricity,
water, or any other resource being furnished or supplied for the use of the
Premises, in each case as of the date Tenant takes possession of the Premises
as determined by Landlord, or which will require additions or alterations to or
interfere with the Building power distribution systems; nor connect with
electric current, except through existing electrical outlets in the Premises or
water pipes, any apparatus, equipment or device for the
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purpose of using electrical current, water, or any other resources. If Tenant
shall require water or electric current or any other resource in excess of that
being furnished or supplied for the use of the Premises as of the date Tenant
taken possession of the Premises as determined by Landlord, Tenant shall first
procure the written consent of Landlord which Landlord may refuse, to the use
thereof, and Landlord may cause a special meter to be installed in the Premises
so as to measure the amount of water, electric current or other resource
converted any such other use. Tenant shall pay directly to Landlord as an
addition to and separate from payment of Operating Expenses the cost of all such
additional resources, energy, utility service and meters (and of installation,
maintenance and repair thereof and of any additional circuits or other equipment
necessary to furnish such additional resources, energy, utility or service).
Landlord may add to the separate or metered charge a recovery of additional
expense incurred in keeping account of the excess water, electric current or
other resource so consumed. Landlord shall not be liable for any damages
directly or indirectly resulting from nor shall the Rent or any monies owed
Landlord under this Lease herein reserved be abated by reason of: (a) the
installation, use or interruption of use of any equipment used in connection
with the furnishing of any such utilities or services, or any change in the
character or means of supplying or providing any such utilities or services or
any supplier thereof; (b) the failure to furnish or delay in furnishing any such
utilities or services when such failure or delay is caused by acts of God or the
elements, labor disturbances of any character, or any other accidents or other
conditions beyond the reasonable control of Landlord because of any interruption
of service due to Tenant's use of water, electric current or other resource in
excess of that being supplied or furnished for the use of the Premises as of the
date Tenant takes possession of the Premises; (c) the inadequacy, limitation,
curtailment, rationing or restriction on use of water, electricity, gas or any
other form of energy or any other service or utility whatsoever serving the
Premises or Project, whether the Regulation or otherwise; or (d) the partial or
total unavailability of any such utilities or services to the Premises or the
Building, whether by Regulation or otherwise; nor shall any such occurrence
constitute an actual or constructive eviction of Tenant. Landlord shall further
have no obligation to protect or preserve any apparatus, equipment or device
installed by Tenant on the Premises, including without limitation by providing
additional or after-hours heating or air conditioning. Landlord shall be
entitled to cooperate voluntarily and in a reasonable manner with the efforts of
national, state or local governmental agencies or utility suppliers in reducing
energy or other resource consumption. The obligation to make services available
hereunder shall be subject to the limitations of any such voluntary, reasonable
program. In addition, Landlord reserves the right to change the supplier or
provider of any such utility or service from time to time. Tenant shall have no
right to contract with or otherwise any electrical or other such services for or
with respect to the Premises or Tenant's operations therein from any supplier or
provider of any such service. Tenant shall cooperate with Landlord and any
supplier or provider of such services designated by Landlord from time to time
to facilitate the delivery of such services to Tenant at the Premises and to
the Building and Project, including without limitation allowing Landlord and
Landlord's suppliers or providers, and their respective agents and contractors,
reasonable access to the Premises for the purpose of installing, maintaining,
repairing, replacing or upgrading such service or any equipment or machinery
associated therewith.
C. Tenant shall pay, upon demand, for all utilities furnished to the Premises,
or if not separately billed to or metered to Tenant, Tenant's Proportionate
Share of all charges jointly serving the Project in accordance with Paragraph 7.
All sums payable under this Paragraph 15 shall constitute Additional Rent
hereunder.
16. SUBORDINATION
Without the necessity of any additional document being executed by Tenant
for the purpose of effecting a subordination, the Lease shall be and is hereby
declared to be subject and subordinate at all times to: (a) all ground leases or
underlying leases which may now exist or hereafter be executed affecting the
Premises and/or the land upon which the Premises and Project are situated, or
both; and (b) any mortgage or deed of trust which may now exist or be placed
upon the Building, the Project and/or the land upon which the Premises or the
Project are situated, or said ground leases or underlying leases, or Landlord's
interest or estate in any of said items which is specified as security.
Notwithstanding the foregoing, Landlord shall have the right to subordinate or
cause to be subordinated any such ground leases or underlying leases or any such
liens to this Lease. If any ground lease or underlying lease terminates for any
reason or any mortgage or deed of trust is foreclosed or a conveyance in lieu of
foreclosure is made for any reason, Tenant shall, notwithstanding any
subordination, attorn to and become the Tenant of the successor in interest to
Landlord provided that Tenant shall not be disturbed in its possession under
this Lease by such successor in interest so long as Tenant is not in default
under this Lease. Within ten (10) days after request by Landlord, Tenant shall
execute and deliver any additional documents evidencing Tenant's attornment or
the subordination of this Lease with respect to any such ground leases or
underlying leases or any such mortgage or deed of trust, in the form requested
by Landlord or by any ground landlord, mortgagee, or beneficiary under a deed of
trust, subject to such nondisturbance requirement. If requested in writing by
Tenant, Landlord shall use commercially reasonable efforts to obtain a
subordination, nondisturbance and attornment agreement for the benefit of Tenant
reflecting the foregoing from any ground landlord, mortgagee or beneficiary, at
Tenant's expense, subject to such other terms and conditions as the ground
landlord, mortgagee or beneficiary may require.
17. FINANCIAL STATEMENTS
At the request of Landlord from time to time, Tenant shall provide to
Landlord Tenant's and any guarantor's current financial statements or other
information discussing financial worth of Tenant and any guarantor, which
Landlord shall use solely for purposes of this Lease and in connection with the
ownership, management, financing and disposition of the Project.
18. ESTOPPEL CERTIFICATE
Tenant agrees from time to time, within ten (10) days after request of
Landlord, to deliver to Landlord, or Landlord's designee, an estoppel
certificate stating that this Lease is in full force and effect, that this Lease
has not been modified (or stating all modifications, written or oral, to this
Lease), the date to which Rent has been paid, the unexpired portion of this
Lease, that there are no current defaults by Landlord or Tenant under this Lease
(or specifying any such defaults); that the leasehold estate granted by this
Lease is the sole interest of Tenant in the Premises and/or the land at which
the Premises are situated, and such other matters pertaining to this Lease as
may be reasonably requested by Landlord. Failure by Tenant to execute and
deliver such certificate shall constitute an acceptance of the Premises and
acknowledgment by Tenant that the statements included are true and correct
without exception. Tenant agrees that if Tenant fails to execute and deliver
such certificate within such ten (10) day period, Landlord may execute and
deliver such certificate on Tenant's behalf and that such certificate shall be
binding on Tenant. Landlord and Tenant intend that any statement delivered
pursuant to this Paragraph may be relied upon any mortgagee, beneficiary,
purchaser or prospective purchaser of the Project or any interest therein. The
parties agree that Tenant's obligation to furnish such estoppel certificates in
a timely fashion is a material inducement for Landlord's execution of the Lease,
and shall be an event of default if Tenant fails to fully comply or makes any
material misstatement in any such certificate.
19. SECURITY DEPOSIT
Tenant agrees to deposit with Landlord upon execution of this Lease, a
security deposit as stated in the Basic Lease Information (the "Security
Deposit"), which sum shall be held and owned by Landlord, without obligation to
pay interest, as security for the performance of Tenant's covenants and
obligations under this Lease. The Security Deposit is not an advance rental
deposit or a measure of damages incurred by Landlord in case of Tenant's
default. Upon the occurrence of any event of default by Tenant, Landlord may
from time to time, without prejudice to any other remedy provided herein or by
law, use such fund as a credit to the extent necessary to credit against any
arrears of Rent or other payments due to Landlord hereunder, and any other
damage, injury, expenses or liability caused by such event of default, and
Tenant shall pay to Landlord, on demand, the amount so applied in order to
restore the Security Deposit to its original amount. Although the Security
Deposit shall be deemed the property of Landlord, any remaining balance of such
deposit shall be returned by
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Landlord to Tenant at such time after termination of this Lease that all of
Tenant's obligations under this Lease have been fulfilled. Landlord may use and
commingle the Security Deposit with other funds of Landlord.
20. TENANT'S REMEDIES
The obligations and liability of Landlord to Tenant for any default by
Landlord under the terms of this Lease are not personal obligations of Landlord
or of the individual or other partners of Landlord or its or their partners,
directors, officers, or shareholders, and Tenant agrees to look solely to
Landlord's interest in the Project for the recovery of any amount from Landlord,
and shall not look to other assets of Landlord nor seek recourse against the
assets of the individual or other partners of Landlord or its or their partners,
directors, officers or shareholders. Any lien obtained to enforce any such
judgment and any levy of execution thereon shall be subject and subordinate to
any lien, mortgage or deed of trust on the Project. Under no circumstances shall
Tenant have the right to offset against or recoup Rent or other payments due and
to become due to Landlord hereunder except as expressly provided in Paragraph
23.8 below, which Rent and other payments shall be absolutely due and payable
hereunder in accordance with the terms hereof.
21. ASSIGNMENT AND SUBLETTING
A. (1) GENERAL. This Lease has been negotiated to be and is granted as an
accommodation to Tenant. Accordingly, this Lease is personal to Tenant,
and Tenant's rights granted hereunder do not include the right to assign
this Lease or sublease the Premises, or to receive any excess, either in
installments or lump sum, over the Rent which is expressly reserved by
Landlord as hereinafter provided, except as other wise expressly
hereinafter provided. Tenant shall not assign or pledge this Lease or
sublet the Premises or any part thereof, whether voluntarily or by
operation of law, or permit the use or occupancy of the Premises or any
part thereof by anyone other than Tenant, or suffer or permit any such
assignment, pledge, subletting or occupancy, without Landlord's prior
written consent except as provided herein. If Tenant desires to assign
this Lease or sublet any or all of the Premises, Tenant shall give
Landlord written notice (the "Transfer Notes") at least sixty (60) days
prior to the anticipated effective date of the proposed assignment or
sublease, which shall contain all of the information reasonably requested
by Landlord to address Landlord's decision criteria specified
hereinafter. Landlord shall then have a period of thirty (30) days
following receipt of the Transfer Notice to notify Tenant in writing that
Landlord elects either: (1) to terminate this Lease as to the space
so affected as of the date so requested by Tenant; or (2) to consent to
the proposed assignment or sublease, subject, however, to Landlord's
prior written consent of the proposed assignee or subtenant and of any
related documents or agreements associated with the assignment or
sublease. If Landlord should fail to notify Tenant in writing of such
election within said period, Landlord shall be deemed to have waived
option (1) above, but written consent by Landlord of the proposed
assignee or subtenant shall be required. If Landlord does not exercise
option (1) above, Landlord's consent to a proposed assignment or sublet
shall not be unreasonably withheld.
(2) CONDITIONS OF LANDLORD'S CONSENT. Without limiting the other
instances in which it may be reasonable for Landlord to withhold
Landlord's consent to an assignment or subletting, Landlord and Tenant
acknowledge that it shall be responsible for Landlord to withhold
Landlord's consent in the following instances: the use of the Premises by
such proposed assignee or subtenant would not be a Permitted Use or would
violate any exclusivity arrangement which Landlord has with any other
tenant or occupant or would increase the Occupancy Density or Parking
Density of the Building or Project; the proposed assignee or subtenant is
not of sound financial condition as determined by Landlord in Landlord's
sole discretion; the proposed assignee or subtenant is a governmental
agency, the proposed assignee or subtenant does not have a good reputation
as a tenant of property, the proposed assignee or subtenant is a person
with whom Landlord is negotiating to lease space in the Project or is a
present tenant of the Project; the assignment or subletting would entail
any Alterations which would lessen the value of the leasehold improvements
in the Premises, or Tenant is in default of any obligation of Tenant under
this Lease, or Tenant has defaulted under this Lease on three (3) or more
occasions during any twelve (12) months preceding the date that Tenant
shall request consent. Failure by Landlord to consent to a proposed
assignee or subtenant shall not cause a termination of this Lease. Upon a
termination under Paragraph 21.A.(1), Landlord may lease the Premises to
any party, including parties with whom Tenant has negotiated an assignment
or sublease, without incurring any liability to Tenant. At the option of
Landlord, a surrender and termination of this lease shall operate as an
assignment to Landlord of some or all subleases or subtenancies. Landlord
shall exercise this option by giving notice of that assignment to such
subtenants on or before the effective date of the surrender and
termination.
B. BONUS RENT. Any Rent or other consideration realized by Tenant under any
such sublease or assignment in excess of the Rent payable hereunder, after
amortization of a reasonable brokerage commission incurred by Tenant, shall be
divided and paid, ten percent (10%) to Tenant, ninety percent (90%) to Landlord.
In any subletting or assignment undertaken by Tenant, Tenant shall diligently
seek to obtain the maximum rental amount available in the marketplace for
comparable space available for primary leasing.
C. CORPORATION. If Tenant is a corporation, a transfer of corporate shares
by sale, assignment, bequest, inheritance, operation of law or other disposition
(including such a transfer to or by a receiver or trustee in federal or state
bankruptcy, insolvency or other proceedings) resulting in a change in the
present control of such corporation or any of its parent corporations by the
person or persons owning a majority of said corporate shares, shall constitute
an assignment for purposes of this Lease.
D. UNINCORPORATED ENTITY. If Tenant is a partnership, joint venture,
unincorporated limited liability company or other unincorporated business form,
a transfer of the interest of persons, firms or entities responsible for
managerial control of Tenant by sale, assignment, bequest, inheritance,
operation of law or other disposition, so as to result in a change in the
present control of said entity and/or a change in the identity of the persons
responsible for the general credit obligations of said entity shall constitute
an assignment for all purposes of this Lease.
E. LIABILITY. No assignment or subletting by Tenant, permitted or otherwise,
shall relieve Tenant of any obligation under this Lease or alter the primary
liability of the Tenant named herein for the payment of Tent or for the
performance of any other obligations to be performed by Tenant, including
obligations contained in Paragraph 25 with respect to any assignee or
subtenant. Landlord may collect rent or other amounts or any portion thereof
from any assignee, subtenant, or other occupant of the Premises, permitted or
otherwise, and apply the net rent collected to the Rent payable hereunder, but
no such collection shall be deemed to be a waiver of this Paragraph 21, or the
acceptance of the assignee, subtenant or occupant as tenant, or a release of
Tenant from the further performance by Tenant of the obligations of Tenant
under this Lease. Any assignment or subletting which conflicts with the
provisions hereof shall be void.
22. AUTHORITY
Landlord represents and warrants that is has full right and authority to
enter into this Lease and to perform all of Landlord's obligations hereunder
and that all persons signing this Lease on its behalf are authorized to do.
Tenant and the person or persons, if any, to preform all of Tenant's
obligations hereunder, and that all persons signing this Lease on its behalf
are authorized to do so.
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23. CONDEMNATION
A. CONDEMNATION RESULTING IN TERMINATION. If the whole or any substantial part
of the Project of which the Premises are a part should be taken or condemned for
any public use under governmental law, ordinance or regulation, or by right of
eminent domain, or by private purchase in lieu thereof, and the taking would
prevent or materially interfere with the Permitted Use of the Premises, this
Lease shall terminate and the Rent shall be abated during the unexpired portion
of this Lease, effective when the physical taking of said Premises shall have
occurred.
B. CONDEMNATION NOT RESULTING IN TERMINATION. If a portion of the Project of
which the Premises are a part should be taken or condemned for any public use
under governmental law, ordinance or regulation, or by right of eminent domain,
or by private purchase in lieu thereof, and the taking prevents or materially
interferes with the Permitted Use of the Premises, and this Lease is not
terminated as provided in Paragraph 23.A, above, the Rent payable hereunder
during the unexpired portion of the Lease shall be reduced, beginning on the
date when the physical taking shall have occurred, to such amount as may be fair
and reasonable under all of the circumstances, but only after giving Landlord
credit for all sums received or to be received by Tenant by the condemning
authority.
C. AWARD. Landlord shall be entitled to any and all payment, income, rent,
award or any interest therein whatsoever which may be paid or made in connection
with such taking or conveyance and Tenant shall have no claim against Landlord
or otherwise for the value of any unexpired portion of this Lease.
Notwithstanding the foregoing, any compensation specifically and separately
awarded Tenant for Tenant's personal property and moving costs, shall be and
remain the property of Tenant.
D. WAIVER OF CCP SECTION 1265.130. Each party waives the provisions of
California Civil Code Procedure Section 1265.130 allowing either party to
petition the superior court to terminate this Lease as a result of a partial
taking.
24. CASUALTY DAMAGE
A. GENERAL. If the Premises or Building should be damaged or destroyed by
fire, tornado, or other casualty (collectively, "Casualty"), Tenant shall give
immediate written notice thereof to Landlord. Within thirty (30) days after
Landlord's receipt of such notice, Landlord shall notify Tenant whether in
Landlord's estimation material restoration of the Premises can reasonably be
made either: (1) within ninety (90) days; (2) in more than ninety (90) days but
within one hundred eighty (180) days; or (3) in more than one hundred eighty
(180) days, in each case from the date of such notice and receipt of required
permits for such restoration. Landlord's determination shall be binding on
Tenant.
B. WITHIN 90 DAYS. If the Premises or Building should be damaged by Casualty
to such extent that material restoration can in Landlord's estimation be
reasonably completed within ninety (90) days after the date of such damage and
receipt of required permits for such restoration, this Lease shall not
terminate. Provided that insurance proceeds are received by Landlord to fully
repair the damage, Landlord shall proceed to rebuild and repair the Premises in
the manner determined by Landlord, except that Landlord shall not be required to
rebuild, repair or replace any part of the Alterations which may have been
placed on or about the Premises by Tenant. If the Premises are untenantable in
whole or in part following such damage, the Rent payable hereunder during the
period in which they are untenantable shall be abated proportionately, but only
to the extent of rental abatement insurance proceeds received by Landlord during
the time and to the extent the Premises are unfit for occupancy.
C. GREATER THAN 90 DAYS. If the Premises or Building should be damaged by
Casualty to such extent that rebuilding or repairs can in Landlord's estimation
be reasonably completed in more than ninety (90) days but within one hundred
eighty (180) days after the date of such damage and receipt of required permits
for such rebuilding or repair, then Landlord shall have the option of either:
(1) terminating of this Lease effective upon the date of the occurrence of such
damage, in which event the Rent shall be abated during the unexpired portion of
this Lease; or (2) electing to rebuild or repair the Premises in the manner
determined by Landlord. Notwithstanding the above, Landlord shall not be
required to rebuild, repair or replace any part of any Alterations which may
have been placed on or about the Premises by Tenant. If the Premises are
untenantable in whole or in part following such damage, the Rent payable
hereunder during the period in which they are untenantable shall be abated
proportionately, but only to the extent of rental abatement insurance proceeds
received by Landlord during the time and to the extent the Premises are unfit
for occupancy. If Landlord should fail to complete such repairs and rebuilding
within one hundred eighty (180) days after the date upon which Landlord is
notified by Tenant of such damage and receipt of required permits, such period
of time to be extended for delays caused by the fault or neglect of Tenant or
otherwise by Tenant or because of acts of God, acts of public agencies, labor
disputes, strikes, fires, freight embargoes, rainy or stormy weather, inability
to obtain materials, supplies or fuels, or delays of the contractors or
subcontractors or any other causes or contingencies beyond the reasonable
control of Landlord, Tenant may at Tenant's option within ten (10) days after
the expiration of such one hundred eighty (180) day period (as such may be
extended), terminate this Lease by delivering written notice of termination to
Landlord as Tenant's exclusive remedy, whereupon this Lease shall terminate
thirty (30) days after Landlord's receipt of such termination notice.
D. GREATER THAN 180 DAYS. If the Premises or Building should be so damaged by
Casualty that rebuilding or repairs cannot in Landlord's estimation be completed
one hundred eighty (180) days after such damage and receipt of required permits
for such rebuilding or repair, this Lease shall terminate and the Rent shall be
abated during the unexpired portion of this Lease, effective upon the date of
the occurrences of such damage.
E. TENANT'S FAULT. Notwithstanding anything herein to the contrary, if the
Premises or any other portion of the Building are damaged by Casualty resulting
from the fault, negligence, or breach of this Lease by Tenant or any of Tenant's
Parties, Base Rent and Additional Rent shall not be diminished during the repair
of such damage and Tenant shall be liable to Landlord for the cost and expense
of the repair and restoration of the Building caused thereby to the extent such
cost and expense is not covered by insurance proceeds.
F. INSURANCE PROCEEDS. Notwithstanding anything herein to the contrary, if the
Premises or Building are damaged or destroyed and are not fully covered by the
insurance proceeds received by Landlord or if the holder of any indebtedness
secured by a mortgage or deed of trust covering the Premises requires that the
insurance proceeds be applied to such indebtedness, then in either case Landlord
shall have the right to terminate this Lease by delivering written notice of
termination to Tenant within thirty (30) days after the date of notice to
Landlord that said damage or destruction is not fully covered by insurance or
such requirement is made by any such holder, as the case may be, whereupon this
Lease shall terminate.
G. WAIVER. This Paragraph 24 shall be Tenant's sole and exclusive remedy in
the event of damage or destruction to the Premises or the Building. As a
material inducement to Landlord entering into this Lease, Tenant hereby waives
any rights it may have under Sections 1932, 1933(4), 1941 or 1942 of the Civil
Code of California with respect to any destruction of the Premises, Landlord's
obligation for tenantability of the Premises and Tenant's right to make repairs
and deduct the expenses of such repairs, or under any similar law, statute or
ordinance now or hereafter in effect.
H. TENANT'S PERSONAL PROPERTY. In the event of any damage or destruction of
the Premises or the Building, under no circumstances shall Landlord be required
to repair any injury or damage to, or make any repairs to or replacements of,
Tenant's personal property.
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25. HOLDING OVER
Unless Landlord expressly consents in writing to Tenant's holding over,
Tenant shall be unlawfully and illegally in possession of the Premises, whether
or not Landlord accepts any rent from Tenant or any other person while Tenant
remains in possession of the Premises without Landlord's written consent. If
Tenant shall retain possession of the Premises or any portion thereof without
Landlord's consent following the expiration of this Lease or sooner termination
for any reason, then Tenant shall pay to Landlord for each day of such
retention triple the amount of daily rental as of the last month prior to the
date of expiration or earlier termination. Tenant shall also indemnify, defend,
protect and hold Landlord harmless from any loss, liability or cost, including
consequential and incidental damages and reasonable attorneys' fees, incurred
by Landlord resulting from delay by Tenant in surrendering the Premises,
including, without limitation, any claims made by the succeeding tenant founded
on such delay. Acceptance of Rent by Landlord following expiration or earlier
termination of this Lease, or following demand by Landlord for possession of
the Premises, shall not constitute a renewal of this Lease, and nothing
contained in this Paragraph 25 shall waive Landlord's right of reentry or any
other right. Additionally, if upon expiration or earlier termination of this
Lease, or following demand by Landlord for possession of the Premises, Tenant
has not fulfilled its obligation with respect to repairs and cleanup of the
Premises or any other Tenant obligations as set forth in this Lease, then
Landlord shall have the right to perform any such obligations as it deems
necessary at Tenant's sole cost and expense, and any time required by Landlord
to complete such obligations shall be considered a period of holding over and
the terms of this Paragraph 25 shall apply. The provisions of this Paragraph 25
shall survive any expiration or earlier termination of this Lease.
26. DEFAULT
A. EVENTS OF DEFAULT. The occurrence of any of the following shall constitute
an event of default on the part of Tenant:
(1) ABANDONMENT. Abandonment or vacation of the Premises for a continuous
period in excess of five (5) days. Tenant waives any right to notice
Tenant may have under Section 1951.3 of the Civil Code of the State of
California, the terms of this Paragraph 26.A. being deemed such notice to
Tenant as required by said Section 1951.3.
(2) NONPAYMENT OF RENT. Failure to pay any installment of Rent or any
other due and payable hereunder upon the date when said payment is due, as
to which time is of the essence.
(3) OTHER OBLIGATIONS. Failure to perform any obligation, agreement or
covenant under this Lease other than those matters specified in
subparagraphs (1) and (2) of this Paragraph 26.A., such failure continuing
for fifteen (15) days after written notice of such failure, as to which
time is of the essence.
(4) GENERAL ASSIGNMENT. A general assignment by Tenant for the benefit of
creditors.
(5) BANKRUPTCY. The filing of any voluntary petition in bankruptcy by
Tenant, or the filing of an involuntary petition by Tenant's creditors,
which involuntary petition remains undischarged for a period of thirty
(30) days. If under applicable law, the trustee in bankruptcy or Tenant
has the right to affirm this Lease and continue to perform the obligations
of Tenant hereunder, such trustee or Tenant shall, in such time period as
may be permitted by the bankruptcy court having jurisdiction, cure all
defaults of Tenant hereunder outstanding as of the date of the affirmance
of this Lease and provide to Landlord such adequate assurances as may be
necessary to ensure Landlord of the continued performance of Tenant's
obligations under this Lease.
(6) RECEIVERSHIP. The employment of a receiver to take possession of
substantially all of Tenant's assets or Tenant's leasehold of the
Premises, if such appointment remains undismissed or undischarged for a
period of fifteen (15) days after the order therefor.
(7) ATTACHMENT. The attachment, execution or other judicial seizure of
all or substantially all of Tenant's assets or Tenant's leasehold of the
Premises, if such attachment or other seizure remains undismissed or
undischarged for a period of fifteen (15) days after the levy thereof.
B. REMEDIES UPON DEFAULT.
(1) TERMINATION. In the event of the occurrence of any event of default,
Landlord shall have the right to give a written termination notice to
Tenant, and on the date specified in such notice, Tenant's right to
possession shall [???], and this Lease shall terminate unless on or
before such date all Rent in arrears and all costs and expenses incurred
by or on behalf of Landlord hereunder shall have been paid by Tenant and
all other events of default of this Lease by Tenant at the time existing
shall have been fully remedied to the satisfaction of Landlord. At any
time after such termination, Landlord may recover possession of the
Premises or any part thereof and expel and remove therefrom Tenant and any
other person occupying the same, including any subtenant or subtenants
notwithstanding Landlord's consent to any sublease, by any lawful means,
and again repossess and enjoy the Premises without prejudice to any of the
remedies that Landlord may have under this Lease, or at law or equity by
any reason of Tenant's default or of such termination. Landlord hereby
reserves the right, but shall not have the obligation, to recognize the
continued possession of any subtenant. Landlord hereby reserves the
right, but shall not have the obligation, to recognize the continued
possession of any subtenant. The delivery or surrender to Landlord by or
on behalf of Tenant of keys, entry codes, or other means to bypass
security at the Premises shall not terminate this Lease.
(2) CONTINUATION AFTER DEFAULT. Even though an event of default may have
occurred, this Lease shall continue in effect for so long as Landlord does
not terminate Tenant's right to possession under Paragraph 26.B.(1)
hereof, and Landlord may enforce all of Landlord's rights and remedies
under this Lease and at law or in equity, including without limitation,
the right to recover Rent as it becomes due, and Landlord, without
terminating this Lease, may exercise all of the rights and remedies of a
Landlord under Section 1951.4 of the Civil Code of the State of California
or any successor code section. Acts of maintenance, preservation or
efforts to lease the Premises or the appointment of a receiver under
application of Landlord to protect Landlord's interest under this Lease or
other entry by Landlord under the Premises shall not constitute an
election to terminate Tenant's right to possession.
(3) INCREASED SECURITY DEPOSIT. If Tenant is in default under Paragraph
26.A.(2) hereof and such default remains uncured for ten (10) days after
such occurrence or such default occurs more than three times in any twelve
(12) month period, Landlord may require that Tenant increase the Security
Deposit to the amount of three times the current month's Rent at the time
of the most recent default.
C. DAMAGES AFTER DEFAULT. Should Landlord terminate this Lease pursuant to the
provisions of Paragraph 26.B.(1) hereof, Landlord shall have the rights and
remedies of a Landlord provided by Section 1951.2 of the Civil Code of the State
of California, or any successor code sections. Upon such termination, in
addition to any other rights and remedies to which Landlord may be entitled
under applicable law or at equity, Landlord shall be entitled to recover from
Tenant: (1) the worth at the time of award of the unpaid Rent and other amounts
which had been earned at the time of termination, (2) the worth at the time of
award of the amounts by which the unpaid Rent that would have been earned after
the date of termination until the time of award exceeds the amount of such Rent
loss that Tenant
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proves could have been reasonably avoided; (3) the worth at the time of award
of the amount by which the unpaid Rent for the balance of the Term after the
time of the award exceeds the amount of such Rent loss that the Tenant proves
be reasonably avoided; and (4) any other amount and court costs necessary to
compensate Landlord for all detriment proximately caused by Tenant's failure to
perform Tenant's obligations under this Lease or which, in the ordinary course
of things, would be likely to result therefrom. The "worth at the time of award"
as used in (1) and (2) above shall be computed at the lesser of the "prime
rate," as announced from time to time by Wells Fargo Bank, N.A. (San Francisco)
or its successor, plus five (5) percentage points, or the maximum interest rate
allowed by law ("APPLICABLE INTEREST RATE"). The "worth at the time of award"
as used in (3) above shall be computed by discounting such amount at the Federal
Discount Rate of the Federal Reserve Bank of San Francisco at the time of the
award plus one percent (1%). If this Lease provides for any periods during the
Term during which Tenant is not required to pay Base Rent or if Tenant
otherwise receives a Rent concession, then upon the occurrence of an event of
default, Tenant shall owe to Landlord the full amount of such Base Rent or value
of such Rent concession, plus interest at the Applicable Interest Rate,
calculated from the date that such Base Rent or Rent concession would have been
payable.
D. LATE CHARGE. In addition to its other remedies, Landlord shall have the
right without notice or demand to add to the amount of any payment required to
be made by Tenant hereunder, and which is not paid and received by Landlord on
or before the first day of each calendar month, an amount equal to ten percent
(10%) of the delinquency for each month or portion thereof that the delinquency
remains outstanding to compensate Landlord for the loss of the use of the amount
not paid and the administrative costs caused by the delinquency, the parties
agreeing that Landlord's damage by virtue of such delinquencies would be
extremely difficult and impracticable to compute and the amount stated herein
represents a reasonable estimate thereof. Any waiver by Landlord of any late
charges or failure to claim the same shall not constitute a waiver of other late
charges or any other remedies available to Landlord.
E. INTEREST. Interest shall accrue on all sums not paid when due hereunder at
eighteen percent (18%) per annum from the due date until paid.
F. REMEDIES CUMULATIVE. All rights, privileges and elections or remedies of
the parties are cumulative and not alternative, to the extent permitted by law
and except as otherwise provided herein.
27. LIENS
Tenant shall at all times keep the Premises and the Project free from
liens arising out of or related to work or services performed, materials or
supplies furnished or obligations incurred by or on behalf of Tenant or in
connection with work made, suffered or done by or on behalf of Tenant in or on
the Premises or Project. If Tenant shall not, within ten (10) days following
the imposition of any such lien, cause the same to be released of record by
payment or posting of a proper bond, Landlord shall have, in addition to all
other remedies provided herein and by law, the right, but not the obligation,
to cause the same to be released by such means as Landlord shall deem proper,
including payment of the claim giving rise to such lien. All sums paid by
Landlord on behalf of Tenant and all expenses incurred by Landlord in
connection therefor shall be payable to Landlord by Tenant on demand with
interest at the Applicable Interest Rate. Landlord shall have the right at all
times to post and keep posted on the Premises any notices permitted or required
by law, or which Landlord shall deem proper, for the protection of Landlord, the
Premises, the Project and any other party having an interest therein, from
mechanics' and materialmen's liens, and Tenant shall give Landlord not less
than ten (10) business days prior written notice of the commencement of any
work in the Premises or Project which could lawfully give rise to a claim for
mechanics' or materialmen's liens to permit Landlord to post and record a
timely notice of non-responsibility, as Landlord may elect to proceed or as the
law may from time to time provide, for which purpose, if Landlord shall so
determine, Landlord may enter the Premises. Tenant shall not remove any such
notice posted by Landlord without Landlord's consent, and in any event not
before completion of the work which could lawfully give rise to a claim for
mechanics' or materialmen's liens.
28. SUBSTITUTION
A. At any time after the execution of this Lease, Landlord may substitute for
the Premises other premises in the Project or owned by Landlord in the vicinity
of the Project (the "NEW PREMISES") upon not less than sixty (60) days prior
written notice, in which event the New Premises shall be deemed to be the
Premises for all purposes hereunder and this Lease shall be deemed modified
accordingly to reflect the new location and shall remain in full force and
effect as so modified, provided that:
(1) The New Premises shall be similar in area and in function for
Tenant's purposes; and
(2) If Tenant is occupying the Premises at the time of such substitution,
Landlord shall pay the expense of physically moving tenant, Tenant's
property and equipment to the New Premises and shall, at Landlord's sole
cost, improve the New Premises with improvements substantially similar to
those the Landlord has committed to provide or has provided in the
Premises.
29. TRANSFERS BY LANDLORD
In the event of a sale or conveyance by Landlord of the Building or a
foreclosure by any creditor of Landlord, the same shall operate to release
Landlord from any liability upon any of the covenants or conditions, express or
implied, herein contained in favor of Tenant, to the extent required to be
performed after the passing of title to Landlord's successor-in-interest. In
such event, Tenant agrees to look solely to the responsibility of the
successor-in-interest of Landlord under this Lease with respect to the
performance of the covenants and duties of "Landlord" to be performed after the
passing of title to Landlord's successor-in-interest. This Lease shall not be
affected by any such sale and Tenant agrees to attorn to the purchaser or
assignee. Landlord's successor(s)-in-interest shall not have liability to
Tenant with respect to the failure to perform any of the obligations of
"Landlord," to the extent required to be performed prior to the date such
successor(s)-in-interest became the owner of the Building.
30. RIGHT OF LANDLORD TO PERFORM TENANT'S COVENANTS
All covenants and agreements to be performed by Tenant under any of the
terms of this Lease shall be performed by Tenant at Tenant's sole cost and
expense and without any abatement of Rent. If Tenant shall fail to pay any sum
of money, other than Base Rent, required to be paid by Tenant hereunder or
shall fail to perform any other act on Tenant's part to be performed hereunder,
including Tenant's obligations under Paragraph 11 hereof, and such failure shall
continue for fifteen (15) days after notice thereof by Landlord, in addition to
the other rights and remedies of Landlord, Landlord may make any such payment
and perform any such act on Tenant's part. In the case of an emergency, no
prior notification by Landlord shall be required. Landlord may take such
actions without any obligation and without releasing Tenant from any of
Tenant's obligations. All sums so paid by Landlord and all incidental costs
incurred by Landlord and interest thereon at the Applicable Interest Rate, from
the date of payment by Landlord, shall be paid to Landlord on demand as
Additional Rent.
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31. WAIVER
If either Landlord or Tenant waives the performance of any term, covenant
or condition contained in this Lease, such waiver shall not be deemed to be a
waiver of any subsequent breach of the same or any other term, covenant or
condition contained herein, or constitute a course of dealing contrary to the
expressed terms of this Lease. The acceptance of Rent by Landlord shall not
constitute a waiver of any preceding breach by Tenant of any term, covenant or
condition of this Lease, regardless of Landlord's knowledge of such preceding
breach at the time Landlord accepted such Rent. Failure by Landlord to enforce
any of the terms, covenants or condition of this Lease for any length of time
shall not be deemed to waive or decrease the rights of Landlord to insist
thereafter upon strict performance by Tenant. Waiver by Landlord of any term,
covenant or condition contained in this Lease may only be made by a written
document signed by Landlord, based upon full knowledge of the circumstances.
32. NOTICES
Each provision of this Lease or of any applicable governmental laws,
ordinances, regulations and other requirements with reference to sending,
mailing, or delivery of any notice or the making of any payment by Landlord or
Tenant to the other shall be deemed to be complied with when and if the
following steps are taken:
A. RENT. All Rent and other payments required to be made by Tenant to
Landlord hereunder shall be payable to Landlord at Landlord's Remittance
Address set forth in the Basic Lease information, or at such other address
as Landlord may specify from time to time by written notice delivered in
accordance herewith. Tenant's obligation to pay Rent and any other amounts to
Landlord under the terms of this Lease shall not be deemed satisfied until such
Rent and other amounts have been actually received by Landlord.
B. OTHER. All notices, demands, consents and approvals which may or are
required to be given by either party to the other hereunder shall be in writing
and either personally delivered, sent by commercial overnight courier, or
mailed, certified or registered, postage prepaid, and addressed to the party to
be notified at the Notice Address for such party as specified in the Basic
Lease information or to such other place as the party to be notified may from
time to time designate by at least fifteen (15) days notice to the notifying
party. Notices shall be deemed served upon receipt or refusal to accept
delivery. Tenant appoints as its agent to receive the service of all default
notices and notice of commencement of unlawful detainer proceedings the person
in charge of or apparently in charge of occupying the Premises at the time,
and, if there is not such person, then such service may be made by attaching
the name on the main entrance of the Premises.
C. REQUIRED NOTICES. Tenant shall immediately notify Landlord in writing of
any notice of violation or a potential or alleged violation of any Regulation
that relates to the Premises or the Project, or of any inquiry, investigation,
enforcement or other action that is instituted or threatened by any
governmental or regulatory agency against Tenant or any other occupant of the
Premises, or any claim that is instituted or threatened by any third party that
relates to the Premises or the Project.
33. ATTORNEYS' FEES
If Landlord places the enforcement of this Lease, or any part thereof, or
the collection of any Rent due, or to become due hereunder, or recovery of
possession of the Premises in the hands of an attorney, Tenant shall pay to
Landlord, upon demand, Landlord's reasonable attorneys' fees and court costs,
whether incurred without trial, at trial, appeal or review. In any action which
Landlord or Landlord brings to enforce its respective rights hereunder, the
unsuccessful party shall pay all costs incurred by the prevailing party
including reasonable attorneys' fees, to be fixed by the court, and said costs
and attorneys' fees shall be a part of the judgment in said action.
34. SUCCESSORS AND ASSIGNS
This Lease shall be binding upon and inure to the benefit of Landlord, its
successors and assigns, and shall be binding upon and insure to the benefit of
Tenant, its successors, and to the extent assignment is approved by Landlord as
provided hereunder, Tenant's assigns.
35. FORCE MAJEURE
If performance by a party of any portion of this Lease is made impossible
by any prevention, delay, or stoppage caused by strikes, lockouts, labor
disputes, acts of God, inability to obtain services, labor, or materials or
reasonable substitutions for those items, government actions, civil commotions,
fire or other casualty, or other causes beyond the reasonable control of the
party obligated to perform, performance by that party for a period equal to the
period of that prevention, delay, or stoppage is excused. Tenant's obligation to
pay Rent, however, is not excused by this Paragraph 35.
36. SURRENDER OF PREMISES
Tenant shall, upon expiration or sooner termination of this Lease,
surrender the Premises to Landlord in the same condition as existed on the date
Tenant originally took possession thereof, including, but not limited to, all
interior walls cleaned, all interior painted surfaces repainted in the original
color, all holes in walls repaired, all carpets shampooed and cleaned, and all
floors cleaned, waxed, and free of any Tenant-introduced marking or painting,
all to the reasonable satisfaction of Landlord. Tenant shall remove all of its
debris from the Project. At or before the time of surrender, Tenant shall comply
with the terms of Paragraph 12.A. hereof with respect to Alterations to the
Premises and all other matters addressed in such Paragraph. If the Premises are
not so surrendered at the expiration or sooner termination of this Lease, the
provisions of Paragraph 25 hereof shall apply. All keys to the Premises or any
part thereof shall be surrendered to Landlord upon expiration or sooner
termination of the Term. Tenant shall give written notice to Landlord at least
thirty (30) days prior to vacating the Premises and shall meet with Landlord for
a joint inspection of the Premises at the time of vacating. In the event of
Tenant's failure to give such notice or participate in such joint inspection,
Landlord's inspection at or after Tenant's vacating the Premises shall
conclusively be deemed correct for purposes of determining Tenant's
responsibility for repairs and restoration. Any delay caused by Tenant's failure
to carry out its obligations under this Paragraph 36 beyond the term hereof,
shall constitute unlawful and illegal possession of Premises under Paragraph 25
hereof.
37. PARKING
So long as Tenant is occupying the Premises, Tenant and Tenant's Parties
shall have the right to use up the number of parking spaces specified in the
Basic Lease information on an unreserved, nonexclusive basis, for
passenger-size automobiles, in the parking areas in the Project designated from
time to time by Landlord for use in common by tenants of the Building.
Tenant may request additional parking spaces from time to time and if
Landlord in its sole discretion agrees to make such additional spaces available
for use by Tenant, such spaces shall be provided on a month-to-month unreserved
and nonexclusive basis (unless otherwise agreed in writing by Landlord), and
subject to such parking charges as Landlord shall determine, and shall
otherwise be subject to such terms and conditions as Landlord may require.
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Tenant shall at all times comply and shall cause all Tenant's Parties and
visitors to comply with all Regulations and any rules and regulations
established from time to time by Landlord relating to parking at the Project,
including any keycard, sticker or other identification or entrance system, and
hours of operation, as applicable.
Landlord shall have no liability for any damage to property or other items
located in the parking areas of the Project, nor for any personal injuries or
death arising out of the use of parking areas in the Project by Tenant or any
Tenant's Parties. Without limiting the foregoing, if Landlord arranges for the
parking areas to be operated by an independent contractor not affiliated with
Landlord, Tenant acknowledges the Landlord shall have no liability for claims
arising through acts or omissions of such independent contractor. In all events,
Tenant agrees to look first to its insurance carrier and to require that
Tenant's Parties look first to their respective insurance carriers for payment
of any losses sustained in connection with any use of the parking areas.
Landlord reserves the right to assign specific spaces, and to reserve
spaces for visitors, small cars, disabled persons or for other tenants or
guests, and Tenant shall not park and shall not allow Tenant's Parties to park
in any such assigned or reserved spaces. Tenant may validate visitor parking by
such method as Landlord may approve, at the validation rate from time to time
generally applicable to visitor parking. Landlord also reserves the right to
alter, modify, relocate or close all or any portion of the parking areas in
order to make repairs or perform maintenance service, or to restripe or renovate
the parking areas, or if required by casualty, condemnation, act of God,
Regulations or for any other reason deemed reasonable by Landlord.
Tenant shall pay to Landlord (or Landlord's parking contractor, if so
directed in writing by Landlord), as Additional Rent hereunder, the monthly
charges established from time to time by Landlord for parking in such parking
areas (which shall initially be the charge specified in the Basic Lease
Information, as applicable). Such parking charges shall be payable in advance
with Tenant's payment of Basic Rent. No deductions from the monthly parking
charge shall be made for days on which the Tenant does not use any of the
parking spaces entitled to be used by Tenant.
38. MISCELLANEOUS
A. GENERAL. The term "Tenant" or any pronoun used in place thereof shall
indicate and include the masculine or feminine, the singular or plural number,
individuals, firms or corporations, and their respective successors, executors,
administrators and permitted assigns, according to the context hereof.
B. TIME. Time is of the essence regarding this Lease and all of its
provisions.
C. CHOICE OF LAW. This Lease shall in all respects be governed by the laws of
the State of California.
D. ENTIRE AGREEMENT. This Lease, together with its Exhibits, addenda and
attachments and the Basic Lease Information, contains all the agreements of the
parties hereto and supersedes any previous negotiations. There have been no
representations made by the Landlord or understandings made between the parties
other than those set forth in this Lease and its Exhibits, addenda and
attachments and the Basic Lease Information.
E. MODIFICATION. This Lease may not be modified except by a written instrument
signed by the parties hereto. Tenant accepts the area of the Premises as
specified in the Basic Lease Information as the approximate area of the Premises
for all purposes under this Lease, and acknowledges and agrees that no other
definition of the area (rentable, usable or otherwise) of the Premises shall
apply. Tenant shall in no event be entitled to a recalculation of the square
footage of the Premises, rentable, usable or otherwise, and no recalculation, if
made, irrespective of its purpose, shall reduce Tenant's obligations under this
Lease in any manner, including without limitation the amount of Base Rent
payable by Tenant or Tenant's Proportionate Share of the Building and of the
Project.
F. SEVERABILITY. If, for any reason whatsoever, any of the provisions hereof
shall be unenforceable or ineffective, all of the other provisions shall be and
remain in full force and effect.
G. RECORDATION. Tenant shall not record this Lease or a short form memorandum
hereof.
H. EXAMINATION OF LEASE. Submission of this Lease to Tenant does not
constitute an option or offer to lease and this Lease is not effective otherwise
until execution and delivery by both Landlord and Tenant.
I. ACCORD AND SATISFACTION. No payment by Tenant of a lesser amount than the
total Rent due nor any endorsement on any check or letter accompanying any check
or payment of Rent shall be deemed an accord and satisfaction of full payment of
Rent, and Landlord may accept such payment without prejudice to Landlord's right
to recover the balance of such Rent or to pursue other remedies. All offers by
or on behalf of Tenant of accord and satisfaction are hereby rejected in
advance.
J. EASEMENTS. Landlord may grant easements on the Project and dedicate for
public use portions of the Project without Tenant's consent; provided that no
such grant or dedication shall materially interfere with Tenant's Permitted Use
of the Premises. Upon Landlord's request, Tenant shall execute, acknowledge and
deliver to Landlord documents, instruments, maps and plots necessary to
effectuate Tenant's covenants hereunder.
K. DRAFTING AND DETERMINATION PRESUMPTION. The parties acknowledge that this
Lease has been agreed to by both the parties, that both Landlord and Tenant have
consulted with attorneys with respect to the terms of this Lease and that no
presumption shall be created against Landlord because Landlord drafted this
Lease. Except as otherwise specifically set forth in this Lease, with respect to
any consent, determination or estimation of Landlord required or allowed in this
Lease or requested of Landlord, Landlord's consent, determination or estimation
shall be given or made solely by Landlord in Landlord's good faith opinion,
whether or not objectively reasonable. If Landlord fails to respond to any
requests for its consent within the time period, if any, specified in this
Lease, Landlord shall be deemed to have disapproved such request.
L. EXHIBITS. The Basic Lease Information, and the Exhibits, addenda and
attachments attached hereto are hereby incorporated herein by this reference and
made a part of this Lease as though fully set forth herein.
M. NO LIGHT, AIR OR VIEW EASEMENT. Any diminution or shutting off of light,
air or view by any structure which may be erected on lands adjacent to or in the
vicinity of the Building shall in no way affect this Lease or impose any
liability on Landlord.
N. NO THIRD PARTY BENEFIT. This Lease is a contract between Landlord and
Tenant and nothing herein is intended to create any third party benefit.
Q. QUIET ENJOYMENT. Upon payment by Tenant of the Rent, and upon the
observance and performance of all of the other covenants, terms and conditions
on Tenant's part to be observed and performed, Tenant shall peaceably and
quietly hold and enjoy the Premises for the term hereby described without
hindrance or interruption by Landlord or any other person or persons lawfully or
equitably
Version 10.1 15
<PAGE> 16
claiming by, through or under Landlord, subject, nevertheless, to all of the
other terms and conditions of this Lease. Landlord shall not be liable for any
hindrance, interruption, interference or disturbance by other tenants or third
persons, nor shall Tenant be released from any obligations under this Lease
because of such hindrance, interruption, interference or disturbance.
P. COUNTERPARTS. This Lease may be executed in any number of counterparts,
each of which shall be deemed an original.
Q. MULTIPLE PARTIES. If more than one person or entity is named herein as
Tenant, such multiple parties shall have joint and several responsibility to
comply with the terms of this Lease.
R. PRORATIONS. Any Rent or other amounts payable to Landlord by Tenant
hereunder for any fractional month shall be prorated based on a month of 30
days. As used herein, the term "fiscal year" shall mean the calendar year or
such other fiscal year as Landlord may deem appropriate.
39. ADDITIONAL PROVISIONS
A. RENT, RENT FOR THE PREMISES.
YEAR 1: $16,846.70 per month, plus operating expenses per paragraph 7.B. of
this Lease Agreement. Operating expenses through December, 1998 are
estimated to be $5,147,45 per month. Direct operating expenses are
estimated one year in advance and collected on a monthly basis. Any
adjustments necessary (up or down) will be made at the end of the
operating year.
YEAR 2: $17,688.51 per month, plus operating expenses per Paragraph 7.B. of
this Lease Agreement.
YEAR 3: $18,530.82 per month, plus operating expenses per Paragraph 7.B. of
this Lease Agreement.
YEAR 4: $19,466.72 per month, plus operating expenses per Paragraph 7.B. of
this Lease Agreement.
YEAR 5: $20,496.21 per month, plus operating expenses per Paragraph 7.B. of
this Lease Agreement.
B. EARLY OCCUPANCY. Upon full execution of this Lease Agreement, Tenant
shall commit to occupy the Premises on January 14, 1998 or upon substantial
completion of Tenant Improvements, whichever occurs first, with all terms and
conditions of this Lease in full force and effect, including the payment of
rent and operating expenses, which shall be prorated from the date of occupancy.
C. LETTER OF CREDIT. Tenant shall pay to Landlord Tenant's security deposit
for the faithful performance of all terms, covenants and conditions of this
Lease. The amount of security deposit required is specified on the Basic Lease
Information sheet of the Lease and this Paragraph 39.C.
Tenant shall provide Landlord with an irrevocable standby letter of credit from
Silicon Valley Bank each in the amount of One Hundred Thousand and no/100ths
U.S. Dollars ($100,000.00). Tenant shall deliver to Landlord the first one-year
letter of credit upon execution of Lease. Said letter of credit shall be
renewed annually for five (5) consecutive years to expire on January 31, 2003.
The term "security deposit" as used herein shall mean, as applicable, such
letter of credit or cash deposit.
Tenant agrees that Landlord may, without waiving any of Landlord's other rights
and remedies under this Lease upon the occurrence of any of the events of
default described in this Lease (and following the expiration or any applicable
notice and cure periods), apply or draw down the security in whole or in part
to remedy any failure to pay any amounts owing to Landlord herein, to repair or
maintain the premises or to perform any other terms, covenants or conditions
contained herein. Additionally, in the event that Tenant fails to replace any
letter of credit delivered pursuant to this Addendum at least sixty (60) days
prior to the expiration of such letter of credit with a new letter of credit
acceptable to Landlord, Landlord shall have the right to draw down the letter
of credit in whole or in part, in which event all amounts so drawn, to the
extent not applied to cure an event of default as provided in the Lease, shall
be held by Landlord as if Tenant had deposited a cash security deposit.
Without limiting the generality of the foregoing, in the event that this Lease
is terminated and such termination does not coincide with the expiration of a
Basic Operating Cost fiscal year, as applicable, Landlord may retain the
security deposit for a reasonable period of time after the expiration of the
Basic Operating Cost fiscal year, in order to allow Landlord the opportunity to
determine the actual amount of Tenant's Proportionate Share of actual Basic
Operating Cost and to deduct any amount due from Tenant relating thereon as
applicable. Should Landlord use or draw down any portion of the security
deposit to cure any default by Tenant herein. Tenant shall forthwith replenish
the security deposit to the original amounts. Landlord shall not be required to
keep any security deposit in the form of cash separate from its general funds
and Tenant shall not be entitled to interest on any such cash deposit.
Landlord agrees to deduct the amount of the letter of credit to zero on
February 1, 1999, provided the following conditions are met for the reduction:
- Tenant is not or has not been in default of any of the terms and
conditions of this Lease.
- Landlord is provided with a copy of Tenant's financial statement showing
that Tenant's business is profitable.
Should the preceding conditions not be met, the letter of credit shall be
renewed in the amount of One Hundred Thousand and no/100ths U.S. Dollars
($100,000.00) for one (1) year on such anniversary of the Lease Commencement
date and shall not be reduced until the conditions hereunder have been met
completely.
All other terms and conditions of the Lease Agreement shall remain in full
force and effect.
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IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
day and the year first above written.
LANDLORD
Spieker Properties, L.P.
a California limited partnership
By: Spieker Properties, Inc.,
a Maryland corporation,
its general partner
By: ____________________________________
Its: _______________________________
Date: ______________________________________
TENANT:
Selectica, Inc.
a California corporation
By: ________________________________________
Its: ___________________________________
Date: ______________________________________
<PAGE> 18
EXHIBIT A
RULES AND REGULATIONS
1. Sidewalks, halls, passages, exits, entrances, elevators, escalators and
stairways shall not be obstructed by tenants or used by tenants for any
purpose other than for ingress to and egress from their respective premises.
The halls, passages, exists, entrances, elevators and stairways are not for
the use of the general public and Landlord shall in all cases retain the
right to control and prevent access thereto by all persons whose presence,
in the judgment of Landlord, shall be prejudicial to the safety, character,
reputation and interests of the Building, the Project and its tenants,
provided that nothing herein contained shall be construed to prevent such
access to persons with whom any tenant normally deals in the ordinary course
of such tenant's business unless such persons are engaged in illegal
activities. No tenant and no employees or invitees of any tenant, shall go
upon the roof of any Building, except as authorized by Landlord. No tenant,
and no employees or invitees of any tenant shall move any common area
furniture without Landlord's consent.
2. No sign, placard, banner, picture, name, advertisement or notice, visible
from the exterior of the Premises or the Building or the common areas of the
Building shall be inscribed, painted, affixed, installed or otherwise
displayed by Tenant either on its Premises or any part of the Building or
Project without the prior written consent of Landlord in Landlord's sole and
absolute discretion. Landlord shall have the right to remove any such sign,
placard, banner, picture, name, advertisement, or notice without notice to
and at the expense of the Tenant, which were installed or displayed in
violation of this rule. If Landlord shall have given such consent to Tenant
at anytime, whether before or after the execution of Tenant's Lease, such
consent shall in no way operate as a waiver or release of any of the
provisions hereof or of the Lease, and shall be deemed to relate only to the
particular sign, placard, banner, picture, name, advertisement or notice so
consented to by Landlord and shall not be construed as dispensing with the
necessity of obtaining the specific written consent of Landlord with respect
to any other such sign, placard, banner, picture, name, advertisement or
notice.
All approved signs or lettering on doors and walls shall be printed,
painted, affixed or inscribed at the expense of Tenant by a person or vendor
approved by Landlord and shall be removed by Tenant at the time of vacancy
at Tenant's expense.
3. The directory of the Building will be provided exclusively for the display
of the name and location of tenants only and Landlord reserves the right to
charge for the use thereof and to exclusive any other names therefrom.
4. No curtains, draperies, blinds, shutters, shades, screens or other
coverings, awnings, hangings or decorations shall be attached to, hung or
placed in, or used in connection with, any window or door on the Premises
without the prior written consent of Landlord. In any event with the prior
written consent of Landlord, all such items shall be installed inboard of
Landlord's standard window covering and shall in no way be visible from the
exterior of the Building. All electrical ceiling fixtures hung in offices or
spaces along the perimeter of the Building must be fluorescent or of a
quality, type, design, and bulb color approved by Landlord. No articles
shall be placed or kept on the window sills so as to be visible from the
exterior of the Building. No articles shall be placed against glass
partitions or doors which Landlord considers unsightly from outside Tenant's
Premises.
5. Landlord reserves the right to exclude from the Building and the Project,
between the hours of 6 p.m. and 8 a.m. and as all hours on Saturdays,
Sundays and legal holidays, all persons who are not tenants or their
accompanied guests in the Building. Each tenant shall be responsible for all
persons for whom it allows to enter the Building or the Project and shall be
liable to Landlord for all acts of such persons.
Landlord and its agents shall not be liable for damages for any error
concerning the admission to, or exclusion from, the Building or the Project
of any person.
During the continuance of any invasion, mob, riot, public excitement or
other circumstance rendering such action advisable in Landlord's opinion,
Landlord reserves the right (but shall not be obligated) to prevent access
to the Building and the Project during the continuance of the event by any
means it considers appropriate for the safety of tenants and protection of
the Building, property in the Building and the Project.
6. All cleaning and janitorial services for the Building and the Premises shall
be provided exclusively through Landlord. Except with the written consent of
Landlord, no person or persons other than those approved by Landlord shall
be permitted to enter the Building for the purpose of cleaning the same.
Tenant shall not cause any unnecessary labor by reason of Tenant's [???] or
indifference in the preservation of good order and cleanliness of its
Premises. Landlord shall in no way be responsible to Tenant for any loss of
property on the Premises, however occurring, or for any damage done to
Tenant's property by the janitor or any other employee or any other person.
7. Tenant shall see that all doors of its Premises are closed and securely
locked and must observe strict care and caution that all water faucets or
water apparatus, coffee pots or other heat-generating devices are entirely
shut off before Tenant or its employees leave the Premises, and that all
utilities shall likewise be carefully shut off, so as to prevent waste or
damage. Tenant shall be responsible for any damage or injuries sustained by
other tenants or occupants of the Building or Project or by Landlord for
noncompliance with this rule. On multiple-tenancy floors, all tenants shall
keep the door or doors to the Building corridors closed at all times except
for ingress and egress.
8. Tenant shall not use any method of heating or air-conditioning other than
that supplied by Landlord. As more specifically provided in the Tenant's
lease of the Premises, Tenant shall not waste electricity, water or
air-conditioning and agrees to cooperate fully with Landlord to assure the
most effective operation of the Building's heating and air-conditioning, and
shall refrain from attempting to adjust any controls other than room
thermostats installed for Tenant's use.
9. Landlord will furnish Tenant free of charge with two keys to each door in
the Premises. Landlord may make a reasonable charge for any additional keys,
and Tenant shall not make or have made additional keys. Tenant shall not
alter any lock or access device or install a new or additional lock or
access device or bolt on any door of its Premises, without the prior written
consent of Landlord. If Landlord shall give its consent, Tenant shall in
each case furnish Landlord with a key for any such lock. Tenant, upon the
termination of its tenancy, shall deliver to Landlord the keys for all doors
which have been furnished to Tenant, and in the event of loss of any keys so
furnished, shall pay Landlord therefor.
Exhibit A - Page 1
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10. The restrooms, toilets, urinals, wash bowls and other apparatus shall not
be used for any purpose other than that for which they were constructed and
no foreign substance of any kind whatsoever shall be thrown into them. The
expense of any breakage, stoppage, or damage resulting from violation of
this rule shall be borne by the tenant who, or whom employees or invitees,
shall have cause the breakage, stoppage, or damage.
11. Tenant shall not use or keep in or on the Premises, the Building or the
Project any kerosene, gasoline, or inflammable or combustible fluid or
material.
12. Tenant shall not use, keep or permit to be used or kept in its Premises
any foul or noxious gas or substance. Tenant shall not allow the Premises
to be occupied or used in a manner offensive or objectionable to Landlord
or other occupants of the Building by reason of noise, odors and/or
vibrations or interfere in any way with other tenants or those having
business therein, nor shall any animals or birds be brought or kept in or
about the Premises, the Building, or the Project.
13. No cooking shall be done or permitted by any tenant on the Premises, except
that use by the tenant of Underwriters' Laboratory (UL) approved equipment,
refrigerators and microwave ovens may be used in the Premises for the
preparation of coffee, tea, hot chocolate and similar beverages, storing
and heating food for tenants and their employees shall be permitted. All
uses must be in accordance with all applicable federal, state and city
laws, codes, ordinances, rules and regulations and the Lease.
14. Except with the prior written consent of Landlord, Tenant shall not sell,
or permit the sale, at retail, of newspapers, magazines, periodicals,
theater tickets or any other goods or merchandise in or on the Premises,
nor shall Tenant carry on, or permit or allow any employee or other person
to carry on, the business of stenography, typewriting or any similar
business in or from the Premises for the service or accommodation of
occupants of any other portion of the Building, nor shall the Premises be
used for the storage of merchandise or for manufacturing of any kind, on
the business of a public barber shop, beauty parlor, nor shall the Premises
be used for any illegal, improper, immoral or objectionable purpose, or any
business or activity other than that specifically provided for in such
Tenant's Lease. Tenant shall not accept hairstyling, barbering, shoeshine,
mail, massage or similar services in the Premises or common areas except as
authorized by Landlord.
15. If Tenant requires telegraphic, telephonic, telecommunications, data
processing, burglar alarm or similar services, it shall first obtain, and
comply with, Landlord's instructions in their installed location.
16. Landlord will direct electricians as to where and how telephone, telegraph
and electrical wires are to be introduced or installed. No boring or
cutting for wires will be allowed without the prior consent of Landlord.
The location of burglar alarms, telephones, call boxes and other office
equipment affixed to the Premises shall be subject to the written approval
of Landlord.
17. Tenant shall not install any radio or television antennas, satellite dish,
loudspeaker or any other device on the exterior walls or the roof of the
Building, without Landlord's consent. Tenants shall not interfere with
radio or television broadcasting or reception from or in the Building, the
Project or elsewhere.
18. Tenant shall not mark, or drive nails, screws or drill into the
partitions, woodwork or drywall or in any way deface the Premises or any
part thereof without Landlord's consent. Tenant may install nails and
screws in areas of the Premises that have been identified for those
purposes to Landlord by Tenant at the time those walls or partitions were
installed in the Premises. Tenant shall not lay linoleum, tile, carpet or
any other floor covering so that the same shall be affixed to the floor of
its Premises in any manner except as approved in writing by Landlord. The
expense of repairing any damage resulting from a violation of this rule or
the removal of any floor covering shall be borne by the tenant by whom, or
by whose contractors, employees or invitees, the damage shall have been
caused.
19. No furniture, freight, equipment, materials, supplies, packages,
merchandise or other property will be received in the Building or carried
up or down the elevators except between such hours and in such elevators
as shall be designated by Landlord.
Tenant shall not place a load upon any floor of its Premises which
exceeds the load per square foot which such floor was designed to carry or
which is allowed by law. Landlord shall have the right to prescribe the
weight, size and position of all safes, furniture or other heavy equipment
brought into the building. Safes or other heavy objects shall, if
considered necessary by Landlord, stand on wood strips of such thickness as
determined by Landlord to be necessary to properly distribute the weight
thereof. Landlord will not be responsible for loss of or damage to any
such safe, equipment or property from any cause, and all damage done to
the Building by moving or maintaining any such safe, equipment or other
property shall be repaired at the expense of Tenant.
Business machines and mechanical equipment belonging to Tenant which cause
noise or vibration that may be transmitted to the structure of the
Building or to any space thereto to such a degree as to be objectionable
to Landlord or to any tenants in the Building shall be placed and
maintained by Tenant, at Tenant's expense, on vibration eliminators or
other devices sufficient to eliminate noise or vibration. The persons
employed to move such equipment in or out of the Building must be
acceptable to Landlord.
20. Tenant shall not install, maintain or operate upon its Premises any
vending machine without the written consent of Landlord.
21. There shall not be used in any space, or in the public areas of the Project
either by Tenant or others, any hand trucks except those equipped with
rubber tires and side guards or such other material handling equipment as
Landlord may approve. Tenants using had trucks shall be required to use the
freight elevator, or such elevator as Landlord shall designate. No other
vehicles of any kind shall be brought by Tenant into or kept in or about
its Premises.
22. Each tenant shall store all its trash and garbage within the interior of
the Premises. Tenant shall not place in the trash boxes or receptacles any
personal trash or any material that may not or cannot be disposed of in
the ordinary and customary manner of removing and disposing of trash and
garbage in the city, without violation of any law or ordinance governing
such disposal. All trash, garbage and refuse disposal shall be made only
through entry-ways and elevators provided for such purposes and at such
times as Landlord shall designate. If the Building has implemented a
building-wide recycling program for tenants, Tenant shall use good faith
efforts to participate in said program.
23. Canvassing, soliciting, distribution of handbills or any other written
material and peddling in the Building and the Project are prohibited and
each tenant shall cooperate to prevent the same. No tenant shall make
room-to-room solicitation of business from other tenants in the Building or
the Project, without the written consent of Landlord.
Exhibit A - Page 2
<PAGE> 20
24. Landlord shall have the right, exercisable without notice and without
liability to any tenant, to change the name and address of the Building
and the Project.
25. Landlord reserves the right to exclude or expel from the Project any
person who, in Landlord's judgment, is under the influence of alcohol or
drugs or who commits any act in violation of any of these Rules and
Regulations.
26. Without the prior written consent of Landlord, Tenant shall not use the
name of the Building or the Project or any photograph or other likeness of
the Building or the Project in connection with, or in promoting or
advertising, Tenant's business except the Tenant may include the
Building's or Project's name in Tenant's address.
27. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental
agency.
28. Tenant assumes any and all responsibility for protecting its Premises from
theft, robbery and pilferage, which includes keeping doors locked and
other means of entry to the Premises closed.
29. The requirements of Tenant will be attended to only upon appropriate
application at the office of the Building by an authorized individual.
Employees of Landlord shall not perform any work or do anything outside
of their regular duties unless under special instructions from Landlord,
and no employees of Landlord will admit any person (tenant or otherwise)
to any office without specific instructions from Landlord.
30. Landlord reserves the right to designate the use of the parking spaces on
the Project. Tenant or Tenant's guests shall park between designated
parking lines only, and shall not occupy two parking spaces with one car.
Parking spaces shall be for passenger vehicles only; no buses, trucks,
trailers, recreational vehicles or other types of vehicles may be parked
in the parking area (except that trucks may be loaded and unloaded in
designated loading areas). Vehicles in violation of the above shall be
subject to tow-away, at vehicle owner's expense. Vehicles parked on the
Project overnight without prior written consent of the Landlord shall be
deemed abandoned and shall be subject to tow-away at vehicle owner's
expense. No tenant of the Building shall park in visitor or reserved
parking areas. Any tenant found parking in such designated visitor or
reserved parking areas shall be subject to tow-away at vehicles owner's
expense. The parking areas shall not be used to provide car wash, oil
changes, detailing, automotive repair or other services unless otherwise
approved or furnished by Landlord.
31. No smoking of any kind shall be permitted anywhere within the Building,
including, without limitation, the Premises and those areas immediately
adjacent to the entrances and exits to the Building, or any other area as
Landlord elects. Smoking in the Project is only permitted in smoking
areas identified by Landlord, which may relocated from time to time.
32. If the Building furnishes common area conference rooms for tenant usage,
Landlord shall have the right to control each tenant's usage of the
conference rooms, including limiting tenant usage so that the rooms are
equally available to all tenants in the Building. Any common area
amenities or facilities shall be provided from time to time at Landlord's
discretion.
33. Tenant shall not swap or exchange building keys or cardkeys with other
employees or tenants in the Building or Project.
34. Tenant shall be responsible for the observance of all of the foregoing
Rules and Regulations by Tenant's employees, agents, clients, customers,
invitees and guests.
35. These Rules and Regulations are in addition to, and shall not be
construed to in any way modify, alter or amend, in whole or in part, the
terms, covenants, agreements and conditions of any lease of any premises
in the Project.
36. Landlord may waive any one or more of these Rules and Regulations for the
benefit of any particular tenant or tenants, but no such waiver by
Landlord shall be construed as a waiver of such Rules and Regulations in
favor of any other tenant or tenants, nor prevent Landlord from
thereafter enforcing any such Rules and Regulations against any or all
tenants of the Building.
37. Landlord reserves the right to make such other and reasonable rules and
regulations as in its judgment may from time to time be needed for safety
and security, for care and cleanliness of the Building and the Project
and for the preservation of good order therein. Tenant agrees to abide by
all such Rules and Regulations herein stated and any additional rules and
regulations which are adopted.
Exhibit A - Page 3
<PAGE> 21
EXHIBIT B
PROPERTY DESCRIPTION
All that certain real property situated in the city of
San Jose, County of Santa Clara State of California,
described as follows:
Assessor's Parcel Numbers 097-14-058, 097-14-059, 097-14-062,
097-14-063, 097-14-064, and 097-14-065.
<PAGE> 22
EXHIBIT B-1
SITE PLAN
Suite 101, 2890 Zanker Road, San Jose, California outline of premises.
[FLOOR PLAN]
2880 ZANKER ROAD
FIRST FLOOR
<PAGE> 23
EXHIBIT C
OFFICE LEASE IMPROVEMENT AGREEMENT
This Office Lease Improvement Agreement ("IMPROVEMENT AGREEMENT") sets
forth the terms and conditions relating to construction of the initial tenant
improvements described in the Plans to be prepared and approved as provided
below (the "TENANT IMPROVEMENTS") in the Premises. Capitalized terms used but
not otherwise defined herein shall have the meanings set forth in the Lease
(the "LEASE") to which this Improvement Agreement is attached and forms a part.
1. BASE BUILDING WORK. The "Base Building Work" described on Schedule 1 to
this Exhibit C, if any, has been or will be performed by Landlord at Landlord's
sole cost and expense.
2. PLANS AND SPECIFICATIONS.
2.1. Landlord shall retain the services of the space planner/architect
designated by Landlord (the "SPACE PLANNER") to prepare a detailed space plan
(the "SPACE PLAN") mutually satisfactory to Landlord and Tenant for the
construction of the Tenant Improvements in the Premises. Tenant shall approve
or disapprove the Space Plan and any proposed revisions thereon in writing
within three (3) business days after receipt thereof, which approval shall not
be unreasonably withheld.
2.2. Based on the approved Space Plan, Landlord shall cause the Space
Planner to prepare detailed plans, specifications and working drawings for the
construction of the Tenant Improvements (the "PLANS"). Landlord and Tenant
shall diligently pursue the preparation of the Plans. Tenant shall approve or
disapprove the Plans and any proposed revisions thereto, including the
estimated cost of the Tenant Improvements, in writing within three (3) business
days after receipt thereof. If Tenant fails to approve or disapprove the Space
Plan or Plans or any revisions thereto within the time limits specified herein,
Tenant shall be deemed to have approved the same. Landlord and Tenant shall use
diligent efforts to cause the final Plans and the cost estimate to be prepared
and approved no later than thirty (30) days after the execution of the Lease.
2.3. Notwithstanding Landlord's preparation, review and approval of the
Space Plan and the Plans and any revisions thereto, Landlord shall have no
responsibility or liability whatsoever for any errors or omissions contained in
the Space Plan or Plans, or to verify dimensions or conditions, or for the
quality, design or compliance with applicable Regulations of any improvements
described therein or constructed in accordance therewith. Landlord hereby
assigns to Tenant all warranties and guaranties by the Space Planner or the
contractor who constructs the Tenant Improvements relating to the Tenant
Improvements, and Tenant hereby waives all claims against Landlord relating to,
or arising out of the design or construction of, the Tenant Improvements.
3. SPECIFICATIONS FOR STANDARD TENANT IMPROVEMENTS.
3.1. Specifications and quantities of standard building components which
will comprise and be used in the construction of the Tenant Improvements
("STANDARDS") are set forth in Schedule 2 to this Exhibit C. As ?? herein,
"STANDARDS" or "BUILDING STANDARDS" shall mean the standards for a particular
item selected from time to time by Landlord for the Building, including those
set forth on Schedule 2 of this Exhibit C, or such other standards of equal or
better quality as may be mutually agreed between Landlord and Tenant in writing.
3.2. No deviations from the Standard are permitted.
4. TENANT IMPROVEMENT COST.
4.1. The cost of the Tenant Improvements shall be paid for by Tenant,
including, without limitation, the cost of Standards; space plans and studies;
architectural and engineering fees; permits, approvals and other governmental
fees; labor, material, equipment and supplies; construction fees and other
amounts payable to contractors or subcontractors; taxes; off-site
improvements; remediation and preparation of the Premises for construction of
the Tenant Improvements; taxes; filing and recording fees; premiums for
insurance and bonds; attorneys' fees; financing costs; and all other costs
expanded or to be expanded in the construction of the Tenant Improvements,
including those costs incurred for construction of elements of the Tenant
Improvements in the Premises, which construction was performed by Landlord
prior to the execution of the Lease or for materials comprising the Tenant
Improvements which were purchased by Landlord prior to the execution of the
Lease; and an administration fee of fifteen percent (15%) of the total cost of
the Tenant Improvements.
4.2. Provided Tenant is not in default under the Lease, including this
Improvement Agreement, Landlord shall constitute a one-time tenant improvement
allowance not to exceed [?] 50 per foot) ("TENANT IMPROVEMENT ALLOWANCE") to be
credited by Landlord toward the cost of the initial Tenant Improvements. If the
cost of the Tenant Improvements exceeds the Tenant Improvement Allowance,
Tenant shall pay Landlord such excess cost within three (3) business days after
Landlord's notice to Tenant of such excess cost. No credit shall be given to
Tenant if the cost of the Tenant Improvements is less than the Tenant
Improvement Allowance.
4.3. If the cost of the Tenant Improvements increases after the Tenant's
approval of the Plan due to the requirements of any governmental agency or
applicable Regulation or any other reason, Tenant shall pay Landlord the amount
of such increase within three (3) business days after notice from Landlord of
such increase.
4.4. If Tenant requests any change(s) in the Plans after approval of the
estimate of the cost of the Tenant Improvements and any such requested changes
are approved by Landlord in writing in Landlord's sole discretion, Landlord
shall advise Tenant promptly of any cost increases and/or delays such approved
change(s) will cause in the construction of the Tenant Improvements.
Tenant shall approve or disapprove any or all such change(s) within three (3)
business days after notice from Landlord of such cost increases and/or delays.
To the extent Tenant disapproves any such cost increase and/or delay
attributable thereto, Landlord shall have the right, in its sole discretion, to
disapprove Tenant's request for any changes to the approved Plans. If the cost
of the Tenant Improvements increases due to any changes in the Plan(s)
requested by Tenant, Tenant shall pay Landlord the amount of such increase
within three (3) business days after notice from Landlord of such increase and
Tenant's approval thereof in accordance with this Paragraph 4.4.
5. CONSTRUCTION OF TENANT IMPROVEMENTS.
5.1. Upon Tenant's approval of the Plans including the estimate of the
cost of the Tenant Improvements and Landlord's receipts of payment of any such
estimated cost exceeding the amount of the Tenant Improvement Allowance,
Landlord shall cause its contractor to proceed to secure a building permit and
commence construction of the Tenant Improvements provided that Tenant shall
cooperate with Landlord in executing permit applications and performing other
actions reasonably necessary to enable Landlord to obtain any required permits
or certificates of occupancy; and provided further that the Building has in
Landlord's discretion reached the stage of construction where it is appropriate
to commence construction of the Tenant Improvements in the Premises.
C-1
<PAGE> 24
SCHEDULE 1
TO EXHIBIT C
BASE BUILDING WORK
NONE
C-3
<PAGE> 25
SCHEDULE 2
TO EXHIBIT C
BUILDING STANDARDS
The following constitutes the Building Standard tenant improvements
("Standards") in the quantities specified:
PARTITIONS: Building Standard Interior:
3 5/8" 25 gauge studs 24" on center with 5/8" gypsum
wallboard both sides to under side of ceiling grid. Smooth
finish ready for paint.
Building Standard Demising:
3 5/8" 25 gauge studs 24" on center with 5/8" gypsum
wallboard both sides to slab above or roof structure above.
R-11 heat insulation within partition cavity.
Building Standard Corridor:
3 5/8" 25 gauge studs 24" on center with 5/8" gypsum
wallboard both sides to slab above or roof structure above.
Partitions to form one (1) hour envelope.
CEILINGS: Building Standard Tenant Ceiling:
2" X 2" white, square grid system
Armstrong 770 2" X 2" tile.
DOORS, FRAMES &
HARDWARE: Building Standard Interior Doors:
Full height 3090 Rustic quartered oak
Hardware - Schlage S-10 "Bright Chrome" locksets and Hager
"Bright Chrome" hinges.
Building Standard Corridor Doors:
Full height 3090 White oak clear coated.
Hardware - Schlage L 9050 "Bright Chrome" locksets.
ELECTRICAL: Building Standard 2' X 4' Light Fixture: Lithonin 2 tube
fluorescent with acrylic prismatic lens.
Building Standard 120V Duplex Wall Outlet: Duplex
receptacle with ivory cover-plate mounted 16" to center line
above finished floor.
Building Standard Telephone Wall Outlet: Plaster ring with
pull wire (no conduit) mounted 16" to center line finished
floor with ivory cover-plate.
Switches - ivory handle and cover-plate mounted 48" above
finished floor.
HVAC: Building Standard Thermostats: Robert Shaw mounted 48" to
center line. Thermostatically controlled comfort zone to
range from 68 degrees to 72 degrees.
SPRINKLERS: Semi-recessed, chrome heads and white escutcheon-plated to
center line of tile.
FINISHES: Building Standard Carpet: Designweave, Sabre Classic,
38 ounce over pad.
Building Standard Base: Rubber base by Burke, 4" flat type,
color black.
Building Standard Vinyl Composition Tile: Armstrong Standard
Excelon.
Building Standard Paint: Two (2) coats flat latex paint by
Sinclair, color Snowdrift.
Building Standard Window Covering: All exterior glass,
mini-blinds by Levelor, color bronze interior. No option.
C-4