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California-San Mateo-411 Borel Avenue Lease [Amendment No. 2] - 411 Borel LLC and Virage Inc.

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                            SECOND AMENDMENT TO LEASE

         THIS  SECOND  AMENDMENT  TO  LEASE  (this  "Amendment")  is dated as of
December 23, 2002 ("Effective  Date") and is made by and between 411 BOREL, LLC,
a Delaware limited liability company ("Landlord"),  and VIRAGE, INC., a Delaware
corporation ("Tenant"), with respect to the following facts and circumstances:


                                    RECITALS

         Landlord's  predecessor  in interest and Tenant  executed  that certain
Office  Lease,  dated  February  17,  2000,  as  amended by that  certain  First
Amendment to Office Lease, dated August 31, 2000 (collectively,  as amended, the
"Lease"),  for a portion of certain real  property  commonly  known as 411 Borel
Avenue, San Mateo, California,  as more particularly described in the Lease (the
"Premises").

         NOW  THEREFORE,  for good and valuable  consideration,  the receipt and
sufficiency  of which is  hereby  acknowledged,  Landlord  and  Tenant  agree as
follows:

1.  Definitions.  All  capitalized  terms used in this Amendment  shall have the
meanings ascribed in the Lease, unless otherwise defined in this Amendment.

2. Effective  Date. The effective date of this Amendment  shall be the Effective
Date set forth above.

3.  Tenant's  Payment.  As  consideration  for  Landlord's   execution  of  this
Amendment,  on January 2, 2003,  Tenant shall pay to Landlord cash in the amount
of One Million Two Hundred  Fifty  Thousand and No/100  Dollars  ($1,250,000.00)
("Tenant's Payment").

4.  Amendment of Letter of Credit.  Provided that: (a) Tenant is not in material
default   under  the  terms  of  the  Lease,   as  amended  by  this   Amendment
(collectively,  the "Amended Lease");  (b) Tenant has delivered Tenant's Payment
to Landlord in accordance with Section 3 above and (c) as of the end of business
on March 30, 2003,  Tenant has not filed (nor has any creditor of Tenant  (other
than  Landlord  or any  affiliate  of  Landlord)  filed on behalf  of  Tenant) a
petition  for  bankruptcy  under Title 11 of the United  States Code and has not
made an  assignment  for the benefit of  creditors,  then, on or after March 31,
2003,  Tenant  shall  have the right to amend the Letter of Credit to reduce the
stated amount to Seven Hundred Fifty Thousand and No/100  Dollars  ($750,000.00)
("Amended L/C").

                                      -9-
<PAGE>

5. Warrant. On or before the Effective Date, Tenant shall execute and deliver to
Landlord  a  warrant,  substantially  in the form  attached  hereto as Exhibit A
("Warrant"),  to purchase two hundred thousand  (200,000) shares of unregistered
securities  of Tenant at the market  price in effect as of the  Effective  Date,
exercisable  on or before the date which is  thirty-six  (36)  months  after the
Effective Date.

6.  Software.  At any time after the Effective  Date until the expiration of the
Amended  Lease,  upon  Landlord's  request,  Tenant  shall  provide to Landlord,
without cost to Landlord,  webcasting software or other software manufactured by
Tenant, instead of or in addition to webcasting software,  selected by Landlord,
in its sole and absolute discretion,  and licenses to use such software pursuant
to Tenant's standard shrinkwrap agreement (collectively,  "Software"), valued at
Two Hundred Thousand and No/100 Dollars  ($200,000.00)  ("Allowance"),  based on
the current Virage list selling price to  unaffiliated  third parties.  Landlord
may,  but shall not be required to,  apply a portion of such  Allowance  towards
ordering Tenant's commercially available services such as installation, training
and/or support  services (not to exceed one year) at Virage's list selling price
to unaffiliated  third parties or towards  ordering excess hardware if available
from Tenant, in place of Software.  All such Software,  services and/or hardware
ordered by Landlord and applied  towards such Allowance shall be documented in a
standard Virage quote form and signed by Landlord.

7. Rent  Reduction.  Except as set forth in  Section  14 below,  and  subject to
reduction  if the  Premises are reduced  under  Section 8(a) below,  (a) for the
month of December, 2002, the minimum monthly rent payable under Section 2 of the
Lease ("Minimum Monthly Rent") shall be One Hundred Seven Thousand Seven Hundred
Ninety-five  and 25/100  Dollars  ($107,795.25);  (b) for the month of  January,
2003,  the Minimum  Monthly  Rent shall be Two  Hundred  Fifteen  Thousand  Five
Hundred Ninety and 50/100 Dollars ($215,590.50);  (c) for the month of February,
2003,  the Minimum  Monthly  Rent shall be Two  Hundred  Fifteen  Thousand  Five
Hundred  Ninety and 50/100  Dollars  ($215,590.50);  (d) for the month of March,
2003, the Minimum  Monthly Rent shall be One Hundred  Thirty-one  Thousand Seven
Hundred  Twenty-four and 75/100  ($131,724.75);  and (e) for the month of April,
2003, and continuing  thereafter,  the Minimum Monthly Rent shall be One Hundred
Seven Thousand Seven Hundred Ninety-five and 25/100 Dollars ($107,795.25) (i.e.,
$2.25 per rentable square foot of the Premises).  The foregoing  Minimum Monthly
Rent  reductions  shall not affect Tenant's  obligation to pay direct  operating
expenses and real estate taxes and assessments pursuant to Sections 21 and 22 of
the Amended Lease. Upon January 1, 2004, and continuing annually thereafter, the
Minimum  Monthly  Rent  shall  be  increased  to the  fair  market  rent for the
Premises,  as mutually agreed to by both Landlord and Tenant in good faith,  but
in no event shall the Minimum  Monthly Rent be less than Two and 25/100  Dollars
($2.25) per rentable square foot of the Premises, as the Premises may be reduced
pursuant to Section 8(a) below.  If Landlord  and Tenant  cannot agree upon fair
market  rent for the  Premises  as  provided  above,  fair  market rent shall be
decided by  arbitration  in accordance  with the provisions of Section 36 of the
Amended Lease.

                                      -10-
<PAGE>

         Landlord  agrees to apply One  Hundred  Seven  Thousand  Seven  Hundred
Ninety-five  and 25/100 Dollars  ($107,795.25)  of the Security  Deposit held by
Landlord pursuant to Section 3 of the Amended Lease against rent due in January,
2003, to apply One Hundred Seven Thousand Seven Hundred  Ninety-five  and 25/100
Dollars  ($107,795.25)  of the  Security  Deposit  against rent due in February,
2003, and to apply  Twenty-three  Thousand Nine Hundred  Twenty-nine  and 50/100
Dollars  ($23,929.50) of the Security  Deposit against rent due in March,  2003.
Thereafter, no security deposit shall be required.

8. Third Floor Premises.

         (a)      Third Party Lease. From and after the Effective Date, Landlord
                  and  Tenant  shall  use  best  efforts,  without  commercially
                  unreasonable  cost to either  party,  to market the portion of
                  the Premises on the Third Floor of the Building  ("Third Floor
                  Premises")  for  lease  to  third  parties,   upon  terms  and
                  conditions  reasonably  acceptable  to  Landlord  and  Tenant.
                  Landlord  shall engage  Landlord's  broker to market the Third
                  Floor  Premises  for  re-lease,  and, on the Third Party Lease
                  Date, as defined below,  Tenant shall pay Landlord's  broker's
                  excess bonus ("Excess Bonus"), in the amount of Two and No/100
                  Dollars  ($2.00) per square  foot of the Third Floor  Premises
                  leased to a new tenant,  directly to Landlord;  provided  that
                  such  Excess  Bonus is paid by  Landlord  to its broker and is
                  paid in  addition  to its  standard  broker  fees for  similar
                  properties.  Such Excess Bonus shall not exceed the  aggregate
                  amount of  Forty-seven  Thousand Seven Hundred Four and No/100
                  Dollars  ($47,704.00).  If Landlord  and a third party  tenant
                  reasonably  acceptable  to  Landlord  and Tenant  execute  and
                  deliver a new lease  ("Third Party Lease") for the Third Floor
                  Premises prior to the expiration of the Amended Lease, then on
                  the  commencement  date of the Third Party Lease ("Third Party
                  Lease Date"),  the Third Floor Premises shall be excluded from
                  the  Premises for all purposes  under the Amended  Lease,  the
                  Minimum  Monthly  Rent shall be  adjusted  on a pro rata basis
                  based on square footage to reflect such exclusion and Landlord
                  and Tenant  shall  execute  and  deliver an  amendment  to the
                  Amended Lease memorializing such exclusion and rent reduction.
                  If Landlord  does not execute a Third Party Lease  pursuant to
                  the terms of this  Amendment,  then Tenant shall remain liable
                  for all obligations under the Amended Lease, including without
                  limitation for the Third Floor Premises. The Third Party Lease
                  shall be on terms  and  conditions  substantially  similar  to
                  Landlord's  then-standard  terms and  conditions  for  similar
                  properties  and  Landlord  shall  not offer  concessions,  not
                  normally  offered to other  tenants,  in exchange  for a lower
                  rental  rate in the Third  Party  Lease.  Within ten (10) days
                  after  Landlord  gives  Tenant  written  notice that  Landlord
                  intends  to  enter  into a Third  Party  Lease,  Tenant  shall
                  deliver to Landlord a bill of sale  transferring  title to all
                  of the  then-remaining  furniture in the Third Floor  Premises
                  ("Third Floor Furniture") to Landlord,  without any additional
                  payment due from  Landlord,  and Tenant shall receive a credit
                  to the Rent  Differential,  as defined  below,  if any, as set
                  forth in Section 8(b) below.

                                      -11-
<PAGE>

         (b)      Rent Differential.  Commencing upon the Third Party Lease Date
                  and  ending  upon the  expiration  of the term of the  Amended
                  Lease,  Tenant shall pay to Landlord a Rent  Differential,  as
                  defined  below,  monthly with  Tenant's  Minimum  Monthly Rent
                  payment,  as reduced pursuant to Section 8(a) above. The "Rent
                  Differential"  shall be an amount equal to the Minimum Monthly
                  Rent payable  under  Section 7 above with respect to the Third
                  Floor  Premises  minus the  minimum  monthly  rent paid by the
                  tenant under the Third Party Lease ("Rent  Differential").  In
                  no event  will  Landlord  be  obligated  to pay to Tenant  any
                  amount of negative Rent  Differential,  nor shall any negative
                  amount  carry  over into a  subsequent  month.  A Third  Floor
                  Furniture Amount (as defined below) shall credited against the
                  Rent   Differential  as  it  accrues  until  the  Third  Floor
                  Furniture  Amount is reduced to zero (0).  For the purposes of
                  this paragraph,  the "Third Floor  Furniture  Amount" shall be
                  the value of the Third Floor Furniture,  as reasonably  agreed
                  upon by Landlord and Tenant on or before the Third Party Lease
                  Date.  Notwithstanding  the foregoing,  Tenant's obligation to
                  pay the Rent Differential  shall terminate upon the date which
                  is twenty-four  (24) months after the Effective Date if Tenant
                  is not Profitable,  as defined below,  for at least two (2) of
                  the four (4) fiscal  quarters  immediately  preceding the date
                  which is  twenty-four  (24) months after the  Effective  Date.
                  Additionally,  even if Tenant does not satisfy the criteria in
                  the immediately  preceding sentence, if the expiration date of
                  the Third  Party  Lease  occurs  within the last  twelve  (12)
                  months  of  the  term  of the  Amended  Lease,  then  Tenant's
                  obligation to pay the Rent  Differential  shall terminate upon
                  the  expiration  of the  earlier to expire of the Third  Party
                  Lease or the Amended Lease,  excluding any extension  pursuant
                  to Section 13 of this Amendment.

         (c)      For the purposes of this  Amendment,  "Profitable"  shall mean
                  showing  a  positive  balance  for "Net  Cash  (from/used  in)
                  Operating   Activities,"  for  any  quarter  as  reflected  in
                  Tenant's Consolidated Statement of Cash Flows on Tenant's 10K,
                  except that there shall be excluded from the  determination of
                  "Net Cash  (from/used in) Operating  Activities" the amount of
                  any "cash" bonus  compensation in excess of the average of the
                  "cash"  bonus  compensation  paid to  executives  in the  same
                  quarter  in  the  previous  two  (2)  years   ("Excess   Bonus
                  Compensation"). Tenant shall notify Landlord in writing of the
                  amount of any such Excess  Bonus  Compensation  upon  Tenant's
                  filing of any 10K.

                                      -12-
<PAGE>

         (d)      Tenant's  Second  Payment.   As  further   consideration   for
                  Landlord's  execution of this Amendment,  upon the first (1st)
                  business day of Tenant's fiscal quarter immediately  following
                  the Third Party Lease Date,  Tenant shall pay to Landlord cash
                  in the  amount of Seven  Hundred  Fifty  Thousand  and  No/100
                  Dollars   ($750,000.00)   (minus,   only  if  Tenant  was  not
                  Profitable  for  the  two  (2)  fiscal  quarters   immediately
                  preceding  the Third Party Lease Date,  an amount equal to the
                  sum of the Minimum  Monthly Rent payments paid by Tenant under
                  the Amended  Lease with  respect to the Third  Floor  Premises
                  after the date which is twelve (12) months after the Effective
                  Date) ("Tenant's Second  Payment").  Provided that: (a) Tenant
                  is not in  material  default  under the  terms of the  Amended
                  Lease and (b) as of the end of  business  on the date which is
                  the earlier of ninety (90) days after Tenant's  Second Payment
                  or two (2)  business  days  prior  to the last day of the same
                  fiscal  quarter  in which  Tenant's  Second  Payment  is made,
                  Tenant has not filed (nor has any  creditor of Tenant filed on
                  behalf of Tenant) a petition for bankruptcy  under Title 11 of
                  the United States Code and has not made an assignment  for the
                  benefit of creditors,  Landlord  shall release the Amended L/C
                  to Tenant upon the earlier of ninety (90) days after  Tenant's
                  Second  Payment or two (2) business days prior to the last day
                  of the same fiscal quarter in which Tenant's Second Payment is
                  made. If Tenant has paid Tenant's  Payment in accordance  with
                  Section  3  above  and  otherwise  has  satisfied  all  of the
                  conditions set forth in the  immediately  preceding  sentence,
                  but has not  amended  the  Letter  of  Credit,  then  upon the
                  earlier of ninety (90) days after  Tenant's  Second Payment or
                  two (2) business days prior to the last day of the same fiscal
                  quarter in which  Tenant's  Second  payment is made,  Landlord
                  shall release the Letter of Credit to Tenant.

9.  Unamortized  Commissions  and Tenant  Improvements.  Within twenty (20) days
after the Third Party Lease Date and provided that Landlord  delivers an invoice
to Tenant for the due amount  within ten (10) days after the Third  Party  Lease
Date,  Tenant  shall pay to Landlord an amount equal to any  unamortized  tenant
improvements  and brokers'  commissions,  finders'  fees or other  similar costs
incurred  by  Landlord  with  respect to the  original  lease of the Third Floor
Premises to Tenant,  with  interest at the per annum rate of eight  percent (8%)
("Amortization  Payment"),  which  Amortization  Payment shall not exceed in the
aggregate Six Thousand and No/100 Dollars  ($6,000.00)  multiplied by the number
of months  from the Third  Party  Lease  Date until the  expiration  date of the
Amended Lease, excluding any extension period pursuant to Section 13 hereof.

10. Tenant Improvements.  Tenant hereby releases Landlord from a portion, in the
amount of Forty-five Thousand Five Hundred and No/100 Dollars  ($45,500.00),  of
its obligation to pay to Tenant the remaining tenant improvement allowance still
due from Landlord under Section 4 of the Amended Lease.

                                      -13-
<PAGE>

11. Acquisition of Tenant. If Tenant merges with, sells all or substantially all
of its assets to, or is acquired by  (collectively,  an  "Acquisition")  a third
party that is not a Related Corporation, as defined in Section 20 of the Amended
Lease  ("Buyer"),   Tenant  may  assign  and  such  Buyer  may  assume  Tenant's
obligations under the Amended Lease in accordance with the provisions of Section
20 of the Amended  Lease.  Buyer may  terminate  the Amended Lease within ninety
(90) days after an Acquisition,  upon Landlord's  receipt of written notice from
such  Buyer  that  such  Buyer  wishes to so  terminate  the  Amended  Lease and
Landlord's  receipt  of an  amount  equal to  sixty-seven  percent  (67%) of the
Termination  Amount,  as defined herein.  The "Termination  Amount" shall be the
total Minimum  Monthly Rent payable under the Amended Lease from the termination
date until the expiration date of the Amended Lease.

12.  Confidentiality.  Tenant and Landlord  shall use their best efforts to keep
all  information  related to or connected with this Amendment  confidential  and
will not disclose any such information to any person or entity without obtaining
the prior written consent of the other party,  except that each party shall have
the right to disclose: (i) to attorneys,  consultants,  accountants, lenders and
other  professionals  required to perform its obligations or exercise its rights
under the  Amended  Lease;  (ii) in  filings,  regulatory  documents,  financial
conference  calls and press releases for purposes of complying  with  securities
regulations,  listing requirements,  the Sarbanes-Oxley Act and other government
rules,  and as otherwise  reasonably  recommended by outside counsel to minimize
risk of litigation and Securities Exchange Commission  investigation;  and (iii)
if required by applicable law or court order.

13. Option to Extend.

         (a)      The first full paragraph of Section 36 of the Lease (Option to
                  Renew) (but not  Subsections  36A and B) is hereby  deleted in
                  its entirety.

         (b)      If  Tenant is  Profitable  during at least two (2) of the four
                  (4) fiscal  quarters  immediately  preceding the expiration of
                  the Amended Lease term or there has been a Infusion  Event, as
                  defined below,  then Landlord shall have the option ("Option")
                  to extend the term of the Amended Lease for one (1) additional
                  term of five (5) years,  subject to all terms,  conditions and
                  covenants  contained  in the Amended  Lease,  except that Base
                  Rent for the renewal  term shall be based on fair market value
                  for comparable office buildings in the San Mateo office market
                  as  determined  in  accordance  with Section 36 of the Amended
                  Lease;  provided,  however,  that  the  immediately  preceding
                  sentence  shall not apply if there has been an  Acquisition of
                  Tenant by any Buyer or if  Landlord  cannot  provide  premises
                  large enough to  accommodate  Tenant's needs within a five (5)
                  mile radius of the  Building,  in which case the Option  shall
                  not be  exercisable.  If  Landlord  desires  to  exercise  the
                  Option,  then  Landlord  shall give Tenant  written  notice of
                  Landlord's  intention  to so  extend  the  term at  least  one
                  hundred  eighty  (180)  days  prior to the  expiration  of the
                  Amended  Lease.  For the  purposes  of  this  Section  13,  an
                  "Infusion  Event"  shall mean Tenant has  received  cumulative
                  written and non-refundable commitments for or payments of cash
                  for equity at any time after the  Effective  Date in excess of
                  Seven  Million  Five  Hundred   Thousand  and  No/100  Dollars
                  ($7,500,000.00).

                                      -14-
<PAGE>

14. Effect of Bankruptcy.  If, within ninety (90) days after the Effective Date,
Tenant files (or any creditor of Tenant (other than Landlord or any affiliate of
Landlord) files on behalf of Tenant) a petition for bankruptcy under Title 11 of
the  United  States  Code or  Tenant  makes an  assignment  for the  benefit  of
creditors, and Landlord is unable to obtain or keep the full benefit of Tenant's
Payment or Tenant's  Second Payment made or required to be made under Sections 3
or 8(e) hereof, for any reason (including without limitation an avoidance action
brought by Tenant,  an affiliated  party of Tenant,  or any of their  respective
creditors  (other than Landlord or any affiliate of  Landlord)),  then the first
paragraph of Section 7 of this Amendment shall be null and void and Tenant shall
be liable for the full Minimum Monthly Rent payable under Section 2 of the Lease
without  reference  to the  first  paragraph  of  Section  7 of  this  Amendment
commencing  upon the date of such filing or assignment and Landlord's full claim
under the  Amended  Lease  (except  for  Section 7 of this  Amendment)  or under
applicable  law  against  all  parties  will  be  reinstated   and   immediately
enforceable against all parties liable therefor.

15.  Due  Authority.  Each  individual  executing  this  Amendment  on behalf of
Landlord and Tenant represents and warrants to Tenant or Landlord, respectively,
that he or she is duly  authorized  to execute and  deliver  this  Amendment  on
behalf of Landlord or Tenant,  respectively,  and that this Amendment is binding
upon Landlord or Tenant, respectively, in accordance with its terms.

16. Waiver. Tenant hereby waivers, to the fullest extent allowed by law, any and
all rights Tenant may have under California Civil Code section 1950.7.

17. Time of the  Essence.  Time is of the essence with respect to each and every
term and condition of this Amendment.

18.  Ratification.  Except as specifically amended hereby, the provisions of the
Lease shall  remain  unmodified,  of full force and effect and binding  upon the
parties in accordance with their terms.

                        [Signatures begin on next page.]

                                      -15-
<PAGE>

         IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as
of the day and date first above written.


LANDLORD                               TENANT

411 BOREL, LLC,                        VIRAGE, INC.,
a Delaware limited liability company   a Delaware corporation

By:      /s/ Donald E. Christy         By:      /s/ Frank Pao
         -----------------------                --------------------------------
Name:    Donald E. Christy             Name:    Frank Pao
         -----------------------                --------------------------------
Title:   Senior Vice President         Title:   Vice President, Business Affairs
         -----------------------                --------------------------------

                                      -16-