EXHIBIT 10.6
OFFER TO LEASE
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To: THE MANUFACTURERS LIFE INSURANCE COMPANY (U.S.A.)
1. The undersigned offeror, having inspected the premises or plans thereof
hereby offers to lease the premises as outlined in Schedules "A" and "B" and
under the terms and conditions as set forth in the Lease attached hereto and
forming a part hereof and initialed by the parties.
2. Cash/Cheque for $36,371 payable to you as a deposit to be held by The
Manufacturers Life Insurance Company (U.S.A.) pending completion or other
termination of this agreement, is attached hereto to apply as a deposit on Basic
Rent and security deposit which will be returned if this Offer is not accepted.
3. The Lease shall be drawn by you in accordance with the attached Lease and
shall be executed by both parties forthwith.
4. It is further understood that all representations made by The Manufacturers
Life Insurance Company (U.S.A.) or any of its representatives, are set out in
this agreement.
5. This Offer shall be irrevocable until May 30, 1997, after which time if not
accepted this Offer shall be null and void.
DATED this 26 day of May, 1997.
LIVEWORLD PRODUCTIONS, INC., A CALIFORNIA CORPORATION
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Offeror's Name
/s/ Signature Illegible President CEO
Signature Title
________________________________________________________
Signature Title
(Note: If a corporation, give title of signing officer and affix seal.)
The Manufacturers Life Insurance Company (U.S.A.) hereby accepts the above
Offer.
DATED this 30 day of May, 1997.
THE MANUFACTURERS LIFE INSURANCE COMPANY (U.S.A.)
Per: /s/ Signature Illegible
INDEX
PAGE
1. LEASED PREMISES 1
2. TERM
(a) Term 1
(b) Delay in Occupancy 1
(c) Overholding 2
3. RENT
(a) Basic Rent 2
(b) Additional Rent 2
(i) Taxes 2
(ii) Operating Costs 2
(c) Payment - Additional Rent 2
(d) Accrual of Rent 3
(e) Recovery of Rent 3
(f) Limitations 3
4. SECURITY DEPOSIT 3
5. GENERAL COVENANTS
(a) Landlord's Covenant 3
(b) Tenant's Covenant 3
6. USE AND OCCUPANCY
(a) Use 3
(b) Waste, Nuisance, etc 3
(c) Insurance Risks 4
(d) Compliance with Law 4
(e) Environmental Compliance 4
(f) Rules and Regulations 4
7. ASSIGNMENT AND SUB-LETTING
(a) No Assignment Without Consent 4
(b) Assignment or Sub-letting Procedures 4
(c) Assumption of Obligations 5
(d) Tenant's Continuing Obligations 5
8. REPAIR AND DAMAGE
(a) Landlord's Repairs to Building and Property 5
(b) Landlord's Repairs to the Leased Premises 5
(c) Tenant's Repairs 5
(d) Indemnification 5
(d) Damage and Destruction 6
9. INSURANCE AND LIABILITY
(a) Landlord's Insurance 6
(b) Tenant's Insurance 6
(c) Limitation of Landlord's Liability 7
(d) Indemnity of Landlord 7
(e) Definition of "Insured Damage" 8
10. EVENTS OF DEFAULT AND REMEDIES
(a) Events of Default and Remedies 8
(b) Payment of Rent, etc. on Termination 8
(i)
PAGE
ADDITIONAL PROVISIONS
11. Relocation of Leased Premises 9
12. Subordination and Attornment 10
13. Certificates 10
14. Inspection of and Access to the Leased Premises 10
15. Delay 10
16. Waiver 11
17. Sale, Demolition and Renovation 11
18. Public Taking 11
19. Registration of Lease 11
20. Lease Entire Agreement 12
21. Notices 12
22. Interpretation 12
23. Extent of Lease Obligations 12
24. Use and Occupancy Prior to Term 12
25. Schedules 12
DEFINITIONS OF PRINCIPAL TERMS PARAGRAPH PAGE
Additional Rent 3(b) 2
Additional Services 4(a) D-2
Basic Rent 3(a) 2
Building 1 1
Debts, Liabilities & Obligations 4 3
Fiscal Period 3(c) 2
Insured Damage 9(e) 8
Landlord 1,10
Landlord's Taxes 2(a) C-1
Leased Premises 1 1
Leasehold Improvements 1 F-1
Landlord's Work 5(b) F-2
Operating Costs 5 D-2
Property 1 1
Public Taking 18 11
Rent 3(d) 3
Taxes 2(b) C-1
Tenant 1
Tenant's Proportionate Share 2(d) C-2
Tenant's Proportionate Share 7 D-3
Tenant's Taxes 2(c) C-1
Term 2(a) 1
(ii)
THIS AGREEMENT made this 21st day of May 1997.
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BETWEEN:
THE MANUFACTURERS LIFE INSURANCE COMPANY (U.S.A.), a company domiciled
in the State of Michigan and having an office at 000 Xxxxx Xxxxxx
Xxxx, Xxxxxxx, Xxxxxxx X0X 0X0, and having a local office at 000 Xxxxx
Xxxxxxxx Xxxxxx, Xxxxx 0000 in the City of Los Angeles, California
(hereinafter called the "Landlord")
OF THE FIRST PART,
--- and ---
LIVEWORLD PRODUCTIONS, INC., A CALIFORNIA CORPORATION
having an office at 000 Xxxxxxx Xxxx Xxxxx, Xxxxx 000
in the City of Campbell, California
(hereinafter called the "Tenant")
OF THE SECOND PART,
In consideration of the rents, covenants and agreements hereinafter
contained, the Landlord and Tenant hereby agree as follows:
1. LEASED PREMISES
LEASED PREMISES The Landlord does demise and lease to the Tenant the premises
(the "Leased Premises") located in a building (the
"Building") having a municipal address of 000 Xxxxxxx Xxxx
Xxxxx in the City of Xxxxxxxx and known as
Xxxxx 000, Xxxxx 000, and Suite 350 (the Leased Premises, the
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Building, together with the lands described in Schedule "A"
attached hereto and present and future improvements,
additions and changes thereto being herein called the
"Property"), the Leased Premises consisting of approximately
ten thousand one hundred three square feet (10,103 rentable
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square feet) on the third (3rd) floor(s) as outlined in red
on the plan or plans marked Schedule(s) "B" attached hereto,
excluding the exterior surfaces of the exterior walls of the
Leased Premises.
2. TERM
TERM (a) TO HAVE AND TO HOLD the Leased Premises for and during
the term of five (5) years and zero (0) days/months (the
"Term") to be computed from the 1st day of January, 1998, and
to be fully complete and ended on the 31st day of December,
2002, unless otherwise terminated. See Schedule F, Paragraphs
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6, 7 and 8.
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DELAY IN OCCUPANCY (b) If the Leased Premises or any part thereof are not ready
for occupancy on the date of commencement of the Term, no
part of the "Rent" (as hereinafter defined) or only a
proportionate part thereof, in the event that the Tenant
shall occupy a part of the Leased Premises, shall be payable
for the period prior to the date when the entire Leased
Premises are ready for occupancy and the full Rent shall
accrue only after such last mentioned date. The Tenant agrees
to accept any such abatement of Rent in full settlement of
all claims which the Tenant might otherwise have by reason of
the Leased Premises not being ready for occupancy on the date
of commencement of the Term, provided that when the Landlord
has completed construction of such part of the Leased
Premises as it is obliged hereunder to construct, the Tenant
shall not be entitled to any abatement of Rent for any delay
in occupancy due to the Tenant's failure or delay to provide
plans or to complete any special installations or other work
required for its purposes or due to any other reason, nor
shall the Tenant be entitled to any abatement of Rent for any
delay in occupancy if the Landlord has been unable to
complete construction of the Leased Premises by reason of
such failure or delay by the Tenant. A certificate of the
Landlord as to the date the Leased Premises were ready for
occupancy and such construction as the Landlord is obliged to
complete is substantially completed, or as to the date upon
which the same would have been ready for occupancy and
completed respectively but for the failure or delay of the
Tenant, shall be conclusive and binding on the Tenant and
Rent in full shall accrue and become payable from the date
set out in the said certificate. Notwithstanding any
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delay in occupancy, the expiry date of this Lease shall remain
unchanged.
OVER-HOLDING (c) If at the expiration of the Term or sooner termination
hereof, the Tenant shall remain in possession without any
further written agreement or in circumstances where a tenancy
would thereby be created by implication of law or otherwise, a
tenancy from year to year shall not be created by implication
of law or otherwise, but the Tenant shall be deemed to be a
monthly tenant only, at one hundred fifty percent (150%) "Basic
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Rent" (as hereinafter defined) payable monthly in advance plus
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"Additional Rent" (as hereinafter defined) and otherwise upon
and subject to the same terms and conditions as herein
contained, excepting provisions for renewal (if any) and
leasehold improvement allowance (if any), contained herein, and
nothing, including the acceptance of any Rent by the Landlord,
for periods other than monthly periods, shall extend this Lease
to the contrary except an agreement in writing between the
Landlord and the Tenant and the Tenant hereby authorizes the
Landlord to apply any moneys received from the Tenant in
payment of such monthly Rent.
3. RENT
BASIC RENT (a) The Tenant shall without deduction or right of offset pay
to the Landlord yearly and every year during the Term as rental
(herein called "Basic Rent"), the sum of Two Hundred Four
Thousand Three Hundred Eighty Four and 00/100 Dollars
($204,384.00) of lawful money of the jurisdiction in which the
Leased Premises are located, in equal monthly installments of
Seventeen Thousand Thirty-Two and 00/100 Dollars ($17,032.00)
each in advance on the first day of each month during the Term,
the first payment to be made on the first day of January, 1998.
See Schedules X, X-1, K-2, K-3.
ADDITIONAL RENT (b) The Tenant shall, without deduction or right of offset pay
to the Landlord yearly and every year during the Term as
additional rental (herein called "Additional Rent")
(i) the amounts of any Taxes payable by the Tenant to the
Landlord pursuant to the provisions of Schedule "C"
attached hereto; and
(ii) the amounts required to be paid to the Landlord
pursuant to the provisions of Schedule "D" attached
hereto.
PAYMENT (c) Additional Rent shall be paid and adjusted with reference
ADDITIONAL RENT to a fiscal period of twelve (12) calendar months ("Fiscal
Period"), which shall be a calendar year unless the Landlord
shall from time to time have selected a Fiscal Period which is
not a calendar year by written notice to the Tenant.
The Landlord shall advise the Tenant in writing of its
estimate of the Additional Rent to be payable by the
Tenant during the Fiscal Period (or broken portion of the
Fiscal Period, as the case may be, if applicable at the
commencement or end of the Term or because of a change in
Fiscal Period) which commenced upon the commencement date
of the Term and for each succeeding Fiscal Period or
broken portion thereof which commences during the Term.
Such estimate shall in every case be a reasonable estimate
and, if requested by the Tenant, shall be accompanied by
reasonable particulars of the manner in which it was
calculated. The Additional Rent payable by the Tenant
shall be paid in equal monthly installments in advance at
the same time as payment of Basic Rent is due hereunder
based on the Landlord's estimate as aforesaid. From time
to time, the Landlord may re-estimate, on a reasonable
basis, the amount of Additional Rent for any Fiscal Period
or broken portion thereof, in which case the Landlord
shall advise the Tenant in writing of such re-estimate and
fix new equal monthly installments for the remaining
balance of such Fiscal Period or broken portion thereof.
After the end of each such Fiscal Period or broken portion
thereof the Landlord shall submit to the Tenant a
statement of the actual Additional Rent payable in respect
of such Fiscal Period or broken portion thereof and a
calculation of the amounts by which the Additional Rent
payable by the Tenant exceeds or is less than (as the case
may be) the aggregate installments paid by the Tenant on
account of Additional Rent for such Fiscal Period.
Within thirty (30) days after the submission of such
statement either the Tenant shall pay to the Landlord any
amount by which the amount found payable by the Tenant
with respect to such Fiscal Period or broken portion
thereof exceeds the aggregate of the monthly payments made
by it on account thereof during such Fiscal Period or
broken portion thereof, or the Landlord shall pay to the
Tenant any amount by which the amount found payable as
aforesaid is less than the aggregate of such monthly
payments.
ACCRUAL OF RENT (d) Basic Rent and Additional Rent (herein collectively called
"Rent") shall be considered as accruing from day to day,
and Rent for an irregular period of less than one year or
less than one calendar month shall be apportioned and
adjusted by the Landlord for the Fiscal Periods of the
Landlord in which the tenancy created hereby commences and
expires. Where the calculation of
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Additional Rent for a period cannot be made until after the
termination of this Lease, the obligation of the Tenant to pay
Additional Rent shall survive the termination hereof and
Additional Rent for such period shall be payable by the Tenant
upon demand by the Landlord. If the Term commences or expires
on any day other than the first or the last day of a month,
Rent for such fraction of a month shall be apportioned and
adjusted as aforesaid and paid by the Tenant on the
commencement date of the Term.
RECOVERY OF RENT (e) Rent and any other amounts required to be paid by the
Tenant to the Landlord under this Lease shall be deemed to be
and be treated as rent and payable and recoverable as rent,
and the Landlord shall have all rights against the Tenant for
default in any payment of rent and other amounts as in the
case of arrears in rent.
LIMITATIONS (f) The information set out in statements, documents or other
writings setting out the amount of Additional Rent submitted
to the Tenant under or pursuant to this Lease shall be binding
on the Tenant and deemed to be accepted by it and shall not be
subject to amendment for any reason unless the Tenant gives
written notice to the Landlord within sixty (60) days of the
Landlord's submission of such statement, document, or writing
identifying the statement, document, or writing and setting
out in reasonable detail the reason why such statement,
document or writing should not be binding on the Tenant.
4. SECURITY DEPOSIT
SECURITY DEPOSIT The Tenant shall pay to the Landlord on execution of this
Lease by the Tenant the sum of Nineteen Thousand Fifty-Two and
00/100 Dollars ($19,052.00) as a deposit to the Landlord to
stand as security for the payment by the Tenant of any and all
present and future debts and liabilities of the Tenant to the
Landlord and for the performance by the Tenant of all of its
obligations arising under or in connection with this Lease
(the "Debts, Liabilities and Obligations"). The Landlord shall
not be required to keep the deposit separate from its general
funds. In the event of the Landlord disposing of its interest
in this Lease, the Landlord shall credit the deposit to its
successor and thereupon shall have no liability to the Tenant
to repay the security deposit to the Tenant. Subject to the
foregoing and to the Tenant not being in default under this
Lease, the Landlord shall repay the security deposit to the
Tenant without interest at the end of the Term or sooner
termination of the Lease provided that all Debts, Liabilities
and Obligations of the Tenant to the Landlord are paid and
performed in full, failing which the Landlord may on notice to
the Tenant elect to retain the security deposit and to apply
it in reduction of the Debts, Liabilities and Obligations and
the Tenant shall remain fully liable to the Landlord for
payment and performance of the remaining Debts, Liabilities
and Obligations.
5. GENERAL COVENANTS
LANDLORD'S (a) The Landlord covenants with the Tenant:
CONVENANT
(i) for quiet enjoyment; and
(ii) to observe and perform all the covenants and
obligations of the Landlord herein.
TENANT'S (a) The Tenant covenants with the Landlord:
CONVENANT
(i) to pay Rent; and
(ii) to observe and perform all the covenants and
obligations of the Tenant herein.
6. USE AND OCCUPANCY
USE The Tenant covenants with the Landlord:
(a) not to use the Leased Premises for any purpose other than
an office for the conduct of the Tenant's business which is
general office use and activities compatible with other
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tenants within the Building.
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WASTE, NULSANCE, (b) not to commit, or permit, any waste, injury or damage to
ETC. the Property including the Leasehold Improvements and any
trade fixtures therein, any loading of the floors thereof in
excess of the maximum degree of loading as determined by the
Landlord acting reasonably, any nuisance therein or any use or
manner of use causing annoyance to other tenants and occupants
of the Property or to the Landlord;
INSURANCE RISKS (c) not to do, omit or permit to be done or omitted to be
done upon the Property anything which would cause to be
increased the Landlord's cost of insurance or the costs of
insurance of another tenant of the Property against perils as
to which the Landlord or such other tenant has insured or
which shall cause any policy of insurance on the Property to
be subject to cancellation;
COMPLIANCE WITH (d) to comply at its own expense with all governmental laws,
regulations and requirements
3
LAW pertaining to the occupation and use of the Leased
Premises, the condition of the Leasehold Improvements,
trade fixtures, furniture and equipment installed by or on
behalf of the Tenant therein and the making by the Tenant
of any repairs, changes or improvements therein; provided
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however, Landlord shall construct and pay for, as part of
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the Operating Costs, the improvements, repairs or changes
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in order to comply with any governmental laws, regulations
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or requirements of general applicability regarding the
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improvements in the Leased Premises unless such compliance
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is necessitated by reason of the particular nature of
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Tenant's use or occupancy of the Leased Premises (in which
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event. Tenant will pay these costs directly and not as part
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of the Operating Costs).
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ENVIRONMENTAL (e) (i) to conduct and maintain its business and
COMPLIANCE operations at the Leased Premises so as to comply in all
respects with common law and with all present and future
applicable federal, provincial state, local, municipal,
governmental or quasi-governmental laws, by-laws, rules,
regulations, licenses, orders, guidelines, directives,
permits, decisions or requirements concerning occupational
or public health and safety or the environment and any
order, injunction, judgment, declaration, notice or demand
issued thereunder, ("Environmental Laws").
(ii) not to permit or suffer any substance which is
hazardous or is prohibited, restricted, regulated or
controlled under any Environmental Law to be present at, on
or in the Leased Premises, unless it has received the prior
written consent of the Landlord which consent may be
arbitrarily withheld.
RULES AND (f) to observe and perform, and to cause its employees,
REGULATIONS invitees and others over whom the Tenant can reasonably be
expected to exercise control to observe and perform, the
Rules and Regulations contained in Schedule "E" hereto, and
such further and other reasonable rules and regulations and
amendments and additions therein as may hereafter be made
by the Landlord and notified in writing to the Tenant,
except that no change or addition may be made that is
inconsistent with this Lease unless as may be required by
governmental regulation or unless the Tenant consents
thereto. The imposition of such Rules and Regulations shall
not create or imply any obligation of the Landlord to
enforce them or create any liability of the Landlord for
their non-enforcement or otherwise.
7. ASSIGNMENT AND SUB-LETTING
NO ASSIGN-MENT AND (a) The Tenant covenants that it will not assign this
SUB-XXXXXXX Lease or sub-let the Leased Premises in whole or in part
without the prior written consent of the Landlord, which
consent the Landlord covenants not to withhold unreasonably
(i) as to any assignee or sub-lessee who is in a reasonably
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satisfactory financial condition in relation to the
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obligations and liabilities to be assumed under this Lease,
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agrees to use the Leased Premises for those purposes
permitted hereunder, and is otherwise reasonably
satisfactory to the Landlord, and (ii) as to any portion of
the Leased Premises which, in the Landlord's sole judgment,
is a proper and rational division of the Leased Premises,
subject to the Landlord's right of termination arising
under this paragraph. Without limitation, the Tenant shall
for the purpose of this paragraph be considered to assign
or sub-let in any case where it permits the Leased Premises
or any portion thereof to be, or the Leased Premises or any
portion thereof are, occupied by persons other than the
Tenant, its employees and others engaged in carrying on the
business of the Tenant, whether pursuant to assignment,
sub-letting, license or other right, or where any of the
foregoing occurs by operation of law. Notwithstanding
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anything to the contrary set forth in this Lease, Tenant
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may assign this Lease at any time or sublease all or any
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part of the Leased Premises, upon prior written notice to
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Landlord but without receipt of Landlord's consent, to any
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entity which acquires not less than fifty-one percent (51%)
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of Tenant's assets or stock, or is merged or consolidated
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with Tenant, or which controls, is controlled by or is
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under common control with, Tenant (collectively, an
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"Affiliate"), so long as (A) such transaction was not
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entered into as a subterfuge to avoid the obligations and
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restrictions of this Lease, (B) at least ten (10) days
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prior to the effective date of the transaction, Tenant
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notifies Landlord of such transaction and supplies Landlord
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with any documents or information reasonably requested by
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Landlord regarding such transaction or such Affiliate, (C)
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in the case of an assignment such Affiliate conclusively
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agrees, in writing delivered to Landlord prior to the
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effective date of the transaction, to assume all of
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Tenant's obligations under this Lease, and (D) the net
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worth of such Affiliate, as of the effective date of the
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assignment or sublease, is at least equal to the net worth
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of Tenant as of the date of this Lease. Any such assignment
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or subletting to an Affiliate pursuant to this Paragraph 7
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shall neither release nor relieve Tenant from any of
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Tenant's obligations under this Lease.
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ASSIGNMENT OR (b) The Tenant shall not assign this Lease or sub-let the
SUB-LETTING whole or any part of the Leased Premises unless:
PROCEDURES
(i) it shall have received or procured a bone fide
written offer to take an assignment or sublease which is
not inconsistent with the Lease, and the acceptance of
which would not breach any
4
provision of this Lease if this paragraph is complied with and
which the Tenant has determined to accept subject to this
paragraph being complied with, and
(ii) it shall have first requested and obtained the
consent in writing of the Landlord thereto.
Any request for consent shall be in writing and accompanied by
a copy of the offer certified by the Tenant to be true and
complete, and the Tenant shall furnish to the Landlord all
information available to the Tenant and requested by the
Landlord as to the responsibility, financial standing and
business of the proposed assignee or sub-tenant.
Notwithstanding the provisions of sub-paragraph (a), within ten
(10) days after the receipt by the Landlord of such request for
consent and of all information which the Landlord shall have
requested hereunder, the Landlord shall have the right upon
written notice of termination submitted to the Tenant, if the
request is to assign this Lease or sub-let the whole of the
Leased Premises, to cancel and terminate this Lease, or if the
request is to sub-let a part of the Leased Premises only, to
cancel and terminate this Lease with respect to such part, in
each case as of a termination date to be stipulated in the
notice of termination which shall be the proposed effective
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date or commencement date of the assignment or sublease. In
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such event the Tenant shall surrender the whole or part, as the
case may be, of the Leased Premises in accordance with such
notice of termination and Basic Rent and Additional Rent shall
be apportioned and paid to the date of surrender and, if a part
only of the Leased Premises is surrendered, Basic Rent and
Additional Rent shall after the date of surrender xxxxx
proportionately. If such consent shall be given the Tenant
shall assign or sub-let, as the case may be, only upon the
terms set out in the offer submitted to the Landlord as
aforesaid and not otherwise.
ASSUMPTION OF (c) No assignment or sub-letting of this Lease shall be
OBLIGATIONS effective unless THE ASSIGNEE OR SUB-LESSEE SHALL EXECUTE AN
ASSUMPTION AGREEMENT ON THE Landlord's form, assuming all the
obligations of the Tenant hereunder with respect to the terms
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of any such sublease or assignment, and shall pay to the
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Landlord its reasonable fee for processing the assignment or
sub-letting.
TENANT'S (d) The Tenant agrees that any consent to an assignment or
CONTINUING sub-letting of this Lease or Leased Premises, shall not thereby
OBLIGATIONS release the Tenant of its obligations hereunder.
8. REPAIR & DAMAGE
LANDLORD'S (a) The Landlord covenants with the Tenant to keep in a good
REPAIRS TO and reasonable state of repair and decoration:
BUILDING &
PROPERTY
(i) those portions of the Property consisting of the
entrance, lobbies, stairways, corridors, landscaped
areas, parking areas, and other facilities from time
to time provided for use in common by the Tenant and
other tenants of the Building or Property, and the
exterior portions (including foundations and roofs)
of all buildings and structures from time to time
forming part of the Property and affecting its
general appearance;
(ii) the Building (other than the Leased Premises and
premises of other tenants) including the systems for
interior climate control, the elevators and
escalators (if any), entrances, lobbies, stairways,
corridors and washrooms from time to time provided
for use in common by the Tenant and other tenants of
the Building or Property and the systems whether or
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not located within the Leased Premises provided for
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use in common by the Tenant and other tenants of the
Building or Property and the systems provided for
bringing utilities to the Leased Premises.
LANDLORD'S (b) The Landlord covenants with the Tenant to repair, maintain
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REPAIRS TO THE and replace, when necessary, so far as reasonably feasible,
LEASED PREMISES ---------------------------
and as expeditiously as reasonably feasible, defects in
standard demising walls or in structural elements, exterior
walls of the Building, suspended ceiling, electrical, non-
----
Leasehold Improvement plumbing and mechanical installations
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standard to the Building installed by the Landlord in the
Leased Premises (if and to the extent that such defects are
sufficient to impair the Tenant's use of the Leased Premises
while using them in a manner consistent with this Lease) and
"Insured Damage" (as herein defined). The Landlord shall in no
event be required to make repairs to Leasehold Improvements
made by the Tenant, or by the Landlord on behalf of the Tenant
or another tenant or to make repairs to wear and tear within
the Leased Premises.
TENANT'S REPAIRS (c) The Tenant covenants with the Landlord to repair,
maintain and keep at the Tenant's own cost, except insofar as
the obligation to repair rests upon the Landlord pursuant to
this paragraph, the Leased Premises, including Leasehold
Improvements in good and substantial repair, reasonable wear
and tear excepted, provided that this obligation shall not
extend to structural elements or to exterior glass or to
repairs which the Landlord would be required to make under this
paragraph but for the exclusion therefrom of defects not
sufficient to impair the Tenant's use of the Leased Premises
while using them in a manner consistent with this Lease. The
Landlord may enter the Leased Premises with reasonable notice
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(subject to Tenant's reasonable security precautions and right
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to
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5
accompany Landlord at all times) (except in the case of an
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emergency) and view the condition thereof and the Tenant
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covenants with the Landlord to repair, maintain and keep
the Leased Premises in good and substantial repair
according to notice in writing, reasonable wear and tear
excepted. If the Tenant shall fail to repair as aforesaid
after reasonable notice to do so, the Landlord may effect
the repairs and the Tenant shall pay the reasonable cost
thereof to the Landlord on demand. The Tenant covenants
with the Landlord that the Tenant will at the expiration
of the Term or sooner termination thereof peaceably
surrender the Leased Premises and appurtenances in good
and substantial repair and condition, reasonable wear and
tear excepted.
INDEMNIFICATION (d) If any part of the Property becomes out of repair,
damaged or destroyed through the negligence of, or misuse
by, the Tenant or its employees, agents, invitees or
others under its control, the Tenant shall pay the
Landlord on demand the expense of repairs or replacements,
including the Landlord's reasonable administration charge
thereof, necessitated by such negligence or misuse.
DAMAGE AND (e) It is agreed between the Landlord and the Tenant
DESTRUCTION that:
(i) In the event of damage to the Property or to
any part thereof, if the damage is such that
the Leased Premises or any substantial part
thereof is rendered not reasonably capable of
use and occupancy by the Tenant for the
purposes of its business for any period of time
in excess of ten (10) days, then
(1) unless the damage was caused by the fault
or negligence of the Tenant or its
employees, agents, invitees or others
under its control, from the date of
occurrence of the damage and until the
Leased Premises are again reasonably
capable for use and occupancy as
aforesaid, the Rent payable pursuant to
this Lease shall xxxxx from time to time
in proportion to the part or parts of the
Leased Premises not reasonably capable of
such use and occupancy, and
(2) unless this Lease is terminated as
hereinafter provided, the Landlord or the
Tenant as the case may be (according to
the nature of the damage and their
respective obligations to repair as
provided in sub-paragraphs (a), (b) and
(c) of this paragraph) shall repair such
damage with all reasonable diligence, but
to the extent that any part of the Leased
Premises is not reasonably capable of such
use and occupancy by reason of damage
which the Tenant is obligated to repair
hereunder, any abatement of Rent to which
the Tenant would otherwise be entitled
hereunder shall not extend later than the
time by which, in the reasonable opinion
of the Landlord, repairs by the Tenant
ought to have been completed with
reasonable diligence; and
(ii) if the Leased Premises are substantially
damaged or destroyed by any cause and if in the reasonable
opinion of the Landlord given in writing within thirty
(30) days of the occurrence the damage cannot reasonably
be repaired within one hundred and eighty (180) days after
the occurrence thereof, then the Lease shall terminate, in
which event neither the Landlord nor the Tenant shall be
bound to repair as provided in sub-paragraphs (a), (b) and
(c) of this paragraph, and the Tenant shall instead
deliver up possession of the Leased Premises to the
Landlord with reasonable expedition and Rent shall be
apportioned and paid to the date of the occurrence; and
(iii) if premises whether of the Tenant or other
tenants of the Property comprising in the aggregate half
or more of the total number of square feet or rentable
office area in the Property or half or more of the total
number of square feet of rentable office area in the
Building (as determined by the Landlord) or portions of
the Property which affect access or services essential
thereto, are substantially damaged or destroyed by any
cause and if in the reasonable opinion of the Landlord the
damage cannot reasonably be repaired within one hundred
and eighty (180) days after the occurrence thereof, then
the Landlord may, by written notice to the Tenant given
within thirty (30) days after the occurrence of such
damage or destruction, terminate this Lease, in which
event neither the Landlord nor the Tenant shall be bound
to repair as provided in sub-paragraphs (a) (b) and (c) of
this paragraph, and the Tenant shall instead deliver up
possession of the Leased Premises to the Landlord with
reasonable expedition but in any event within sixty (60)
days after delivery of such notice of termination, and
Rent shall be apportioned and paid to the date upon which
possession is so delivered up (but subject to any
abatement to which the Tenant may be entitled under
subparagraph (e)(i) of this paragraph).
9. INSURANCE AND LIABILITY
LANDLORD'S INSURANCE (a) The Landlord shall take out and keep in force during
the Term insurance with respect to the Property except for
the "Leasehold Improvements" (as hereinafter defined) in
the Leased Premises. The insurance to be maintained by the
Landlord shall be in respect of perils and to amounts and
on terms and conditions which from time to time are
insurable at a reasonable premium and which are
6
normally insured by reasonable prudent owners of properties
similar to the Property, all as from time to time determined at
reasonable intervals by insurance advisors selected by the
Landlord, and whose opinion shall be conclusive. Unless and until
the insurance advisors shall state that any such perils are not
customarily insured against by owners of properties similar to
the Property, the perils to be insured against by the Landlord
shall include, without limitation, public liability, boilers and
machinery, fire and extended perils and may include at the option
of the Landlord losses suffered by the Landlord in its capacity
as Landlord through business interruption. Notwithstanding
---------------
anything to the contrary set forth this Lease, and without
----------------------------------------------------------
affecting any other rights or remedies of the parties hereto
------------------------------------------------------------
(except as expressly provided herein). Landlord and Tenant each
---------------------------------------------------------------
hereby release and relieve the other, and waive their entire
------------------------------------------------------------
right to recover damages against the other, for loss of or damage
-----------------------------------------------------------------
to their respective property arising out of or incident to the
--------------------------------------------------------------
perils required to be insured against under this Paragraph 9 and
----------------------------------------------------------------
/ or in this Lease. The effect of such releases and waivers is
--------------------------------------------------------------
not limited by the amount of insurance carried or required, or by
-----------------------------------------------------------------
any deductible applicable hereto. Landlord and Tenant hereby
------------------------------------------------------------
agree to have their respective insurance carriers waive any right
-----------------------------------------------------------------
to subrogation that such carriers may have against either
---------------------------------------------------------
Landlord or Tenant, as the case may be, so long as any insurance
----------------------------------------------------------------
is not invalidated thereby.
--------------------------
TENANT'S (b) The Tenant shall take out and keep in force during the Term:
INSURANCE
(i) comprehensive general public liability insurance all
on an occurrence basis with respect to the business
carried on in or from the Leased Premises and the
Tenant's use and occupancy of the Leased Premises and
of any other part of the Property, with coverage not
---
less than Two Million Dollars ($2,000,000) for any one
------------------------------------------------------
occurrence or claim, and which insurance shall include
-------------------
the Landlord as a named additionally insured and shall
protect the Landlord in respect of claims by the
Tenant as if the Landlord were separately insured;
(ii) insurance in respect of fire and such other perils as
are from time to time in the usual extended coverage
endorsement covering the Leasehold Improvements, trade
fixtures, and the furniture and equipment in the
Leased Premises for not less than 80% of the full
replacement cost thereof, and which insurance covering
--------
the Leasehold Improvements only, shall include the
-------------------------------
Landlord as named additionally insured as the
Landlord's interest may appear; and
(iii) insurance against such other perils and in such
amounts as the Landlord may from time to time
reasonably require upon not less than ninety (90)
days' written notice, such requirement to be made on
the basis that the required insurance is customary at
the time for prudent tenants of properties similar to
the Property (excluding any requirement that Tenant
--------------------------------------
obtain earthquake and / or flood endorsement or
-----------------------------------------------
insurance).
----------
All insurance required to be maintained by the Tenant shall be on
terms and with insurers reasonably satisfactory to the Landlord.
----------
Each policy shall contain a waiver by the insurer of any rights
of subrogation or indemnity or any other claim over to which the
insurer might otherwise be entitled against the Landlord or the
agents or employees of the Landlord, and shall also contain an
undertaking by the insurer that no material change adverse to the
Landlord or the Tenant will be made, and the policy will not
lapse or be canceled, except after not less than thirty (30)
days' written notice to the Landlord of the intended change,
lapse or cancellation. The Tenant shall furnish to the Landlord,
if and whenever requested by it, certificates or other evidences
acceptable to the Landlord as to the insurance from time to time
effected by the Tenant and its renewal or continuation in force,
together with evidence as to the method of determination of full
replacement cost of the Tenant's Leasehold Improvements, trade
fixtures, furniture and equipment, and if the Landlord reasonably
concludes that the full replacement cost has been underestimated,
the Tenant shall forthwith arrange for any consequent increase in
coverage required under sub-paragraph (b). If the Tenant shall
fail to take out, renew and keep in force such insurance, or if
the evidences submitted to the Landlord are unacceptable to the
Landlord (or no such evidences are submitted within a reasonable
period after request therefor by the Landlord), then the Landlord
may give to the Tenant written notice requiring compliance with
this sub-paragraph and specifying the respects in which the
Tenant is not then in compliance with this sub-paragraph. If the
Tenant does not within forty-eight (48) hours provide appropriate
evidence of compliance with this sub-paragraph, the Landlord may
(but shall not be obligated to) obtain some or all of the
additional coverage or other insurance which the Tenant shall
have failed to obtain, without prejudice to any other rights of
the Landlord under this Lease or otherwise, and the Tenant shall
pay all premiums and other reasonable expenses incurred by the
Landlord to the Landlord on demand.
7
LIMITATION OF (c) The Tenant agrees that the Landlord shall not be
LANDLORD'S LIABILITY liable for any bodily injury or death of, or loss or
damage to any property belonging to, the Tenant or its
employees, invitees or licensees or any other person
in, on or about the Property unless resulting from the
willful misconduct or negligence of the Landlord or its
own employees or agents. In no event shall the Landlord
-------------------
be liable for any damage which is caused by steam,
water, rain or snow or other thing which may leak into,
issue or flow from any part of the Property or from the
pipes or plumbing works, including the sprinkler system
(if any) therein or from any other place or for any
damage caused by or attributable to the condition or
arrangement of any electric or other wiring or of
sprinkler heads (if any) or for any damage caused by
anything done or omitted by any other tenant except to
---------
the extent caused by the negligence or willful
----------------------------------------------
misconduct of Landlord or its employees or agents.
-------------------------------------------------
INDEMNITY OF LANDLORD (d) Except with respect to claims or liabilities in
respect of any damage which is Insured Damage to
the extent of the cost of repairing such Insured
Damage, or claims arising from the negligence or
----------------------------------------
willful misconduct of Landlord or its employees or
--------------------------------------------------
agents, the Tenant agrees to indemnify, defend
------ ------
(with counsel reasonably acceptable to Landlord)
-----------------------------------------------
and save harmless the Landlord and the Project in
------------------
respect of:
----------
(i) all claims for bodily injury or death,
property damage or other loss or damage
arising from the conduct of any work or any
act or omission of the Tenant or any
assignee, sub-tenant, agent, employee,
contractor, invitee or licensee of the
Tenant, and in respect of all costs,
expenses and liabilities incurred by the
Landlord in connection with or arising out
of all such claims, including the expenses
of any action or proceeding pertaining
thereto (including, without limitation,
------------------------------
reasonable lawyers' fees and costs, and
---------------------------------------
court costs); and
-----------------
(ii) any loss, cost, (including, without
limitation, reasonable lawyers' fees and
---------- ---
costs, and court costs), expense or damage
----------------------
suffered by the Landlord arising from any
breach by the Tenant of any of its
covenants and obligations under this Lease.
DEFINITION OF (e) For purposes of this Lease, "Insured Damage" means
"INSURED DAMAGE" that part of any damage occurring to the Property of
which the entire cost of repair (or the entire cost of
repair other than deductible amount properly
collectable by the Landlord as part of the Additional
Rent) is actually recovered by the Landlord under a
policy or policies of insurance from time to time
effected by the Landlord pursuant to sub-paragraph (a)
Where an applicable policy of insurance contains an
exclusion for damages recoverable from a third party,
claims as to which the exclusion applies shall be
considered to constitute Insured Damage only if the
Landlord successfully recovers from the third party.
10. EVENTS OF DEFAULT AND REMEDIES
EVENTS OF DEFAULT (a) In the event of the happening of any one of the
AND REMEDIES following events:
(i) the Tenant shall have failed to pay an
installment of Basic Rent or of Additional
Rent or any other amount payable hereunder
when due, and such failure shall be
continuing for a period of more than ten
(10) days after the date that Tenant shall
-----------------
have received notice that such installment
-------------------------
or amount was due;
(ii) there shall be a default of or with any
condition, covenant, agreement or other
obligation on the part of the Tenant to be
kept, observed or performed hereunder
(other than a condition, covenant,
agreement or other obligation to pay Basic
Rent, Additional Rent or any other amount
of money) and such default shall be
continuing for a period of more than
fifteen (15) days after written notice by
------------
the Landlord to the Tenant specifying the
default and requiring that it discontinue
-----------
or such longer time as may reasonably be
----------------------------------------
required to cure the default so long as
---------------------------------------
Tenant commences to cure such failure
-------------------------------------
within such fifteen (15) day period and
---------------------------------------
Tenant uses Tenant's best efforts to
------------------------------------
diligently prosecute such cure to
---------------------------------
completion;
----------
(iii) if any policy of insurance upon the
Property or any part thereof from time to
time effected by the Landlord shall be
canceled or about to be canceled by the
insurer by reason of the use or occupation
of the Leased Premises by the Tenant or any
assignee, sub-tenant or licensee of the
Tenant or anyone permitted by the Tenant to
be upon the Leased Premises and the Tenant
after receipt of notice in writing from the
Landlord shall have failed to take such
immediate steps in respect of such use or
occupation as shall enable the Landlord to
reinstate or avoid cancellation (as the
case may be) of such policy of insurance,
(iv) the Leased Premises shall, without the
prior written consent of the Landlord, be
used by any other persons than the Tenant
or its permitted assigns or sub-tenants or
for any
8
purpose other than that for which they were leased or
occupied or by any persons whose occupancy is
prohibited by this Lease,
(v) the Leased Premises shall be abandoned, or remain
unoccupied without the prior written consent of the
Landlord for fifteen (15) consecutive days or more
while capable of being occupied, and Tenant has not
------------------
paid rent.
---------
(vi) the balance of the Term of this Lease or any of the
goods and chattels of the Tenant located in the
Leased Premises, shall at any time be seized in
execution or attachment, or
(vii) the Tenant shall make any assignment for the benefit
of creditors or become bankrupt or insolvent or take
the benefit of any statute for bankrupt or insolvent
debtors or, if a corporation, shall take any steps or
suffer any order to be made for its winding-up or
other termination of its corporate existence; or a
trustee, receiver or receiver-manager or agent or
other like person shall be appointed of any of the
assets of the Tenant,
the Landlord shall have the following rights and remedies all of
which are cumulative and not alternative and not to the exclusion
of any other or additional rights and remedies in law or equity
available to the Landlord by statute or otherwise:
(A) to remedy or attempt to remedy any default of the
Tenant, and in so doing to make any payments due or
alleged to be due by the Tenant to third parties and
to enter upon the Leased Premises to do any work or
other things therein, and in such event all
reasonable expenses of the Landlord in remedying or
attempting to remedy such default shall be payable by
the Tenant to the Landlord on demand;
(B) with respect to unpaid overdue Rent, to the payment
by the Tenant of the Rent and of interest (which said
interest shall be deemed included herein in the term
"Rent") thereon at a rate equal to the lesser of
three percent (3%) above the prime commercial loan
rate charged to borrowers having the highest credit
rating from time to time by the Landlord's principal
bank from the date upon which the same was due until
actual payment thereof and the maximum amount allowed
under the laws of the jurisdiction in which the
Building is located;
(C) to terminate this Lease forthwith. In the event that
Landlord shall elect to so terminate this Lease, then
Landlord may recover from Tenant:
(i) the worth at the time of award of any unpaid
rent which had been earned at the time of such
termination; plus
(ii) the worth at the time of award of the amount by
which the unpaid rent which would have been
earned after termination until the time of
award exceeds the amount of such rental loss
that Tenant proves could have been reasonably
avoided; plus
(iii) 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 award exceeds the amount
of such rental loss that Tenant proves could be
reasonably avoided; plus
(iv) any other amount necessary to compensate
Landlord for all the detriment approximately
caused by Tenant's failure to perform the
Tenant obligations under this Lease or which in
the ordinary course of things would be likely
to result therefrom. As used in sub-paragraphs
10(C)(i) and (ii) above, the "worth at the time
of award" is computed by allowing interest at
the maximum rate permitted by law per annum. As
used in sub-paragraph 10(C)(iii) above, the
"worth at the time of award" is computed by
discounting such amount at the discount rate of
the Federal Reserve Bank of San Francisco at
the time of award plus one percent (1%).
(D) if Landlord terminates this Lease. to enter the
---------------------------------
Leased Premises to take possession of any
furniture or other property thereon and upon
giving ten (10) days' written notice to the
Tenant to store the same at the expense and
risk of the Tenant or to sell or otherwise
dispose of the same at public or private sale
without further notice and to apply the
proceeds thereof upon account of the Rent due
and to become due under this Lease and the
Tenant shall be liable to the Landlord for the
deficiency if any.
9
(E) to maintain Tenant's rights to possession and
continue said Lease in full force and effect,
whether or not Tenant shall have abandoned
the Leased Premises. In such event, Landlord
shall be entitled to enforce all of its
rights and remedies under this Lease,
including the right to recover Rent as it
becomes due under the terms of the Lease.
(b) The Tenant shall pay to the Landlord on demand all
reasonable costs and expenses, including reasonable
lawyers' fees and costs incurred by the Landlord in
enforcing any of the obligations of the Tenant under
this Lease.
ADDITIONAL PROVISIONS
RELOCATION OF LEASED PREMISES
SUBORDINATION 12. This Lease and all rights of the Tenant hereunder are
AND ALLOTMENT subject and subordinate to all underlying leases and
charges, or mortgages now or hereafter existing (including
charges, and mortgages by way of debenture, note, bond,
deeds of trust and mortgage and all instruments supplemental
thereto) which may now or hereafter affect the Property or
any part thereof and to all renewals, modifications,
consolidations, replacements and extensions thereof provided
the lessor, chargee, mortgagee or trustee agrees in writing
----------
to accept this Lease if not in default; and in recognition
of the foregoing the Tenant agrees that it will, whenever
requested, attorn to such lessor, chargee, mortgagee as a
tenant upon all the terms of this Lease. The Tenant agrees
to execute promptly whenever requested by the Landlord or by
the holder of any such lease, charge, or mortgage an
instrument of subordination or attornment in a commercially
reasonable form, as the case may be, as may be required of
it.
CERTIFICATES 13. The Tenant agrees that it shall promptly whenever
requested by the Landlord from time to time execute and
deliver to the Landlord, and if required by the Landlord, to
any lessor, chargee, or mortgagee (including any trustee) or
other person designated by the Landlord, an acknowledgment
in writing as to the then status of this Lease, including as
to whether it is in full force and effect, is modified or
unmodified, confirming the Basic Rent and Additional Rent
payable hereunder and the State of the accounts between
Landlord and the Tenant, the existence or non-existence of
defaults, and any other matters pertaining to this Lease as
to which the Landlord shall request an acknowledgment.
INSPECTION OF AND 14. The Landlord shall be permitted at any time and from
ACCESS TO THE time to time, upon reasonable notice and subject to Tenant's
----------------------------------------------
reasonable security LEASED PREMISES precautions and right to
------------------------------------------------------------
accompany Landlord at all times (except in the event of an
----------------------------------------------------------
emergency), to enter and to have its authorized agents,
---------
employees and contractors enter the Leased Premises for the
purposes of inspection, window cleaning, maintenance,
providing janitor service, making repairs, alterations or
improvements to the Leased Premises or the Property, or to
have access to utilities and services (including all ducts
and access panels (if any), which the Tenant agrees not to
obstruct) and the Tenant shall provide free and unhampered
access for the purpose, and shall not be entitled to
compensation for any inconvenience, nuisance or
10
discomfort caused thereby. The Landlord and its authorized agents
and employees shall be permitted entry to the Leased Premises for
the purpose of exhibiting them to prospective tenants. The
Landlord in exercising its rights under this paragraph shall do
so to the extent reasonably necessary so as to minimize
interference with the Tenant's use and enjoyment of the Leased
Premises provided that in an emergency the Landlord or persons
authorized by it may enter the Leased Premises without regard to
minimizing interference.
DELAY 15. Except as herein otherwise expressly provided, if and
whenever and to the extent that either the Landlord or the Tenant
shall be prevented, delayed or restricted in the fulfillment of
any obligation hereunder in respect of the supply or provision of
any service or utility, the making of any repair, the doing of
any work or any other thing (other than the payment of moneys
required to be paid by the Tenant to the Landlord hereunder) by
reason of:
(a) strikes or work stoppages;
(b) being unable to obtain any material, service, utility
or labor required to fulfill such obligation;
(c) any statute, law or regulation of, or inability to
obtain any permission from any government authority
having lawful jurisdiction preventing, delaying or
restricting such fulfillment;
-or-
(d) other unavoidable occurrence,
the time for fulfillment of such obligation shall be extended
during the period in which such circumstance operates to prevent,
delay or restrict the fulfillment thereof, and the other party to
this Lease shall not be entitled to compensation for any
inconvenience, nuisance or discomfort thereby occasioned;
provided that nevertheless the Landlord will use commercially
------------
reasonable efforts to maintain services essential to the use
----------
and enjoyment of the Leased Premises and provided further that if
the Landlord shall be prevented, delayed or restricted in the
fulfillment of any such obligation hereunder by reason of any of
the circumstances set out in sub-paragraph (c) of this paragraph
15 and to fulfill such obligation could not, in the reasonable
opinion of the Landlord, be completed without substantial
additions to or renovations of the Property, the Landlord may on
sixty (60) days' written notice to the Tenant terminate this
Lease.
WAIVER 16. If either the Landlord or the Tenant shall overlook, excuse,
condone or suffer any default, breach, non-observance, improper
compliance or non-compliance by the other of any obligation
hereunder, this shall not operate as a waiver of such obligation
in respect of any continuing or subsequent default, breach, or
non-observance, and no such waiver shall be implied but shall
only be effective if expressed in writing.
SALE, 17. (a) The term "Landlord" as used in this Lease, means
DEMOLITION only the owner for the time being of the Property, so that in
AND the event of any sale or sales or transfer or transfers of the
RENOVATION Property, or the making of any lease or leases thereof, or the
sale or sales or the transfer or transfers or the assignment or
assignments of any such lease or leases, previous landlords shall
be and hereby are relieved of all covenants and obligations of
Landlord hereunder. It shall be deemed and construed without
further agreement between the parties, or their successors in
interest, or between the parties and the transferee or acquiror,
at any such sale, transfer or assignment, or lessee on the making
of any such lease, that the transferee, acquiror or lessee has
assumed and agreed to carry out any and all of the covenants and
obligations of Landlord hereunder to Landlord's exoneration, and
Tenant shall thereafter be bound to and shall attorn to such
transferee, acquiror or lessee, as the case may be, as Landlord
under this Lease;
PUBLIC TAKING 18. The Landlord and Tenant shall cooperate, each with the
other, in respect of any Public Taking of the Leased Premises or
any part thereof so that the Tenant may receive the maximum award
to which it is entitled in law for relocation costs,trade
-----
fixtures, and business interruption and so that the Landlord may
--------
receive the maximum award for all other compensation arising from
or relating to such Public Taking (including all compensation for
the value of the Tenant's leasehold interest subject to the
Public Taking) which shall be the property of the Landlord, and
the Tenant's rights to such compensation are hereby assigned to
the Landlord. If the whole or any part of the Leased Premises is
Publicly Taken, as between the parties hereto, their respective
rights and obligations
11
under this Lease shall continue until the day on which the Public
Taking authority takes possession thereof. If the whole or any
part of the Leased Premises is Publicly Taken, the Landlord shall
have the option, to be exercised by written notice to the Tenant,
to terminate this Lease and such termination shall be effective
on the day the Public Taking authority takes possession of the
whole or the portion of the Property Publicly Taken. Rent and all
other payments shall be adjusted as of the date of such
termination and the Tenant shall, on the date of such Public
Taking, vacate the Leased Premises and surrender the same to the
Landlord, with the Landlord having the right to reenter and re-
possess the Leased Premises discharged of this Lease and to
remove all persons therefrom. In this paragraph, the words
"Public Taking" shall include expropriation and condemnation and
shall include a sale by the Landlord to an authority with powers
of expropriation, condemnation or taking, in lieu of or under
threat of expropriation or taking and "Publicly Taken" shall have
a corresponding meaning.
REGISTRATION 19. The Tenant agrees with the Landlord not to register
OF LEASE this Lease in any recording office and not to register notice of
this Lease in any form without the prior written consent of the
Landlord. If such consent is provided such notice of Lease or
caveat shall be in such form as the Landlord shall have approved
and upon payment of the Landlord's reasonable fee for same and
all applicable transfer or recording taxes or charges. The Tenant
shall remove and discharge at Tenant's expense registration of
such a notice or caveat at the expiry or earlier termination of
the Term, and in the event of Tenant's failure to so remove or
discharge such notice or caveat after ten (10) days' written
notice by Landlord to Tenant, the Landlord may in the name and on
behalf of the Tenant execute a discharge of such a notice or
caveat in order to remove and discharge such notice of caveat and
for the purpose thereof the Tenant hereby irrevocably constitutes
and appoints any officer of the Landlord the true and lawful
attorney of the Tenant.
LEASE ENTIRE 20. The parties acknowledges that there are no
AGREEMENT covenants, representations, warranties, agreements or conditions
express or implied, collateral or otherwise forming part of or in
any way affecting or relating to this Lease save as expressly set
out in this Lease and Schedules attached hereto and that this
Lease and such Schedules constitute the entire agreement between
the Landlord and the Tenant and may not be modified except as
herein explicitly provided or except by agreement in writing
executed by the Landlord and the Tenant.
NOTICES 21. Any notice, advice, document or writing required or
contemplated by any provision hereof shall be given in writing
and if to the Landlord, either delivered personally to an officer
of the Landlord or mailed by prepaid mail addressed to the
Landlord at the said local office address of the Landlord shown
above, and if to the Tenant, either delivered personally to the
Tenant (or to an officer of the Tenant, if a corporation) or
mailed by prepaid mail addressed to the Tenant at the Leased
Premises, or if an address of the Tenant is shown in the
description of the Tenant above, to such address. Every such
notice, advice, document or writing shall be deemed to have been
given when delivered personally, or if mailed as aforesaid, upon
the fifth day after being mailed. The Landlord may from time to
time by notice in writing to the Tenant designate another address
as the address to which notices are to be mailed to it, or
specify with greater particularity the address and persons to
which such notices are to be mailed and may require that copies
of notices be sent to an agent designated by it. The Tenant may,
if an address of the Tenant is shown in the description of the
Tenant above, from time to time by notice in writing to the
Landlord, designate another address as the address to which
notices are to be mailed to it, or specify with greater
particularity the address to which such notices are to be mailed.
INTERPRETATION 22. In this Agreement "herein", "hereof", "hereby",
"hereunder", "hereto", "hereinafter" and similar expressions
refer to this Lease and not to any particular paragraph, clause
or other portion thereof, unless there is something in the
subject matter or context inconsistent therewith; and the parties
agree that all of the provisions of this Lease are to be
construed as covenants and agreements as though words importing
such covenants and agreements were used in each separate
paragraph hereof, and that should any provision or provisions of
this Lease be illegal or not enforceable it or they shall be
considered separate and severable from the Lease and its
remaining provisions shall remain in force and be binding upon
the parties hereto as though the said provision or provisions had
never been included, and further that the captions appearing for
the provisions of this Lease have been inserted as a matter of
convenience and for reference only and in no way define, limit or
enlarge the scope or meaning of this Lease or of any provisions
hereof.
12
EXTENT OF 23. This Agreement and everything herein contained shall
LEASE endure to the benefit of and be binding upon the
OBLIGATIONS respective heirs, executors, administrators, successors, assigns
and other legal representatives, as the case may be, of each and
every of the parties hereto, subject to the granting of consent
by the Landlord to any assignment or sublease, and every
reference herein to any party hereto shall include the heirs,
executors, administrators, successors, assigns and other legal
representatives of such party, and where there is more than one
tenant or there is a male or female party the provisions hereof
shall be read with all grammatical changes thereby rendered
necessary and all covenants shall be deemed joint and several.
USE AND 24. If the Tenant shall for any reason use or occupy the Leased
OCCUPANCY Premises in any way prior to the commencement of the Term but
PRIOR ---
TO TERM with there being an existing lease between the Landlord and
----
Tenant, and with the Landlord's and Tenant's mutual consent in
------------------------------
writing, then during such prior use or occupancy the Tenant shall
-------
be a Tenant of the Landlord and shall be subject to the same
covenants and agreements in this Lease mutatis mutandis provided,
--------
however, that if Tenant occupies only a portion of the Leased
-------------------------------------------------------------
Premises, prior to the Commencement Date, then Tenant will only
---------------------------------------------------------------
be obligated to pay a prorata portion of Rent to Landlord until
----------------------------------------------------------------
the Commencement Date occurs (based, in part, upon the following
-----------------------------------------------------------------
monthly Basic Rent: US$3,167.00 per month for Suite 300,
--------------------------------------------------------
US$2,300.00 per month for Suite 304; and US$11,565.00 per month
---------------------------------------------------------------
for Suite 350.
-------------
SCHEDULES 25. The provisions of the following schedules attached hereto
shall form part of this lease as if the same were embodied
herein:
Schedule "A" - Legal Description of Property
Schedule "B" - Outline of Leased Premises
Schedule "B-1" - Outline of Temporary Space (Suite 108)
Schedule "B-2" - Outline of Temporary Space (Suite 304)
Schedule "C" - Taxes Payable by Landlord and Tenant
Schedule "D" - Services and Costs
Schedule "E" - Rules and Regulations
Schedule "F" - Leasehold Improvements
Schedule "G" - N/A
Schedule "H" - Option to Renew
Schedule "I" - N/A
Schedule "J" - N/A
Schedule "K" - Increase in Basic Rental
Schedule "K-1" - Increase in Basic Rental
Schedule "K-2" - Increase in Basic Rental
Schedule "K-3" - Increase in Basic Rental
Schedule "N-1" - Temporary Space Lease (Suite 108)
Schedule "N-2" - Temporary Space Lease (Suite 304)
Schedule "O" - First Right to Lease
IN WITNESS WHEREOF the parties hereto have executed this
Agreement.
Landlord:
THE MANUFACTURERS LIFE INSURANCE
COMPANY (U.S.A.), a Michigan
Corporation
Checked
/s/ Signature Illegible By Signature: /s/ Signature Illegible
Verified Witness as to signing by Title:
Landlord
Tenant:
LIVEWORLD PRODUCTIONS, INC.,
a California Corporation
/s/ Xxxxx Xxxxxxxx
/s/ Signature Illegible By Signature Xxxxx Xxxxxxxx
Witness as to signing by Tenant Title: Chief Executive Officer
13
Schedule "A"
Legal Description - 000 Xxxxxxx Xxxx Xxxxx
All that certain real property situate in the City of Xxxxxxxx, County of Santa
Xxxxx, State of California, described as follows:
PARCEL ONE:
-----------
ALL OF LOTS 9 and 10, as shown upon that certain Map entitled, "Subdivision of
Campbell Tract, at Campbell Station", which Map was filed for record in the
office of the Recorder of the County of Santa Xxxxx, State of California, on
January 3, 1888 in Book "C" of Maps, at page 49, and more particularly described
as follows:
BEGINNING at an iron pipe set on the Easterly line of Central Avenue, at the
common corner for Lots 8 and 9, as said Lots and Avenue are shown upon that
certain Map entitled, "Subdivision of Campbell Tract at Campbell Station", which
Map was filed for record in the office of the Recorder of the County of Santa
Xxxxx, State of California, on January 3, 1888 in Book "C" of Maps, at page 49,
and running thence along the dividing line between said Lots 8 and 9, East
127.40 feet to an iron pipe; and running thence North 58 40' West, 149.95 feet
to an iron pipe set on the Easterly line of Central Avenue and running thence
along the Easterly line of Central Avenue, South 0 28' East 78 feet to the place
of beginning.
ALSO EXCEPTING THEREFROM, that portion thereof, as conveyed to the City of
Xxxxxxxx, by deed recorded August 8, 1977 in Book D055 Page 534 of Official
Records, more particularly described as follows:
BEGINNING at an angle point in the centerline of Central Avenue, said angle
point being 432.70 fee southerly from the centerline of Campbell Avenue;
THENCE, along the centerline of Central Avenue N 0 04' 39" W 89.83 feet;
THENCE, S74 05' 25" E 26.01 feet to the intersection with the westerly line of
that certain parcel of land conveyed to Xxxxxxx Xxxxxx and Xxxxxxxx Xxxx Xxxxxx,
his wife, as joint tenants, by that Certain Deed filed for record in Book 8392
of Official Records Page 526 in the Office of the County Recorder in the County
of Santa Xxxxx, State of California, said point of intersection being the TRUE
POINT OF BEGINNING.
THENCE, S 74 05' 25" E 44.74 feet to the point of tangency with a curve concave
to the north having a radius of 325.00 feet;
THENCE, easterly along said curve through a central angle of 16 37' 35" a
distance of 94.31 feet to its intersection with the southeasterly line of said
Xxxxxx parcel of land;
THENCE, along said southeasterly line and its northeasterly prolongation N 31"
51' 44" E 73.53 feet to its intersection with a non-tangent curve concave to the
northwest having a radius of 266 feet;
THENCE, westerly along said curve through a central angle of 0 11' 08" 28.72
feet;
THENCE, along the extension of the radial line of said center 3 05' 30" E 9.00
feet;
THENCE, westerly along a curve concave to the north having a radius of 275 feet
through a central angle of 19 00' 05" a distance of 92.00 feet;
THENCE, along said line N 74 05' 25" W a distance of 43.99 feet to its point of
tangency with a curve concave to the northeast having a radius of 20 feet, and
also being tangent to the westerly line of said Xxxxxx parcel;
THENCE, westerly and northerly along said curve through a central angle of 74
00' 46" a distance of 25.84 feet to its point of tangency with said westerly
line of the Xxxxxx parcel;
THENCE, along said westerly line S 0 04' 39" E 67.09 feet to the TRUE POINT OF
BEGINNING.
Page 2 (307 Orchard City Drive)
ALSO EXCEPTING THEREFROM, that portion thereof, as conveyed to the City of
Xxxxxxxx by deed recorded February 1, 1979 in Book E 264, page 104 of Official
Records, more particularly described as follows:
BEGINNING, at an angle point in the center line of Central Avenue, said angle
point being 432.70 feet southerly from the center line of Campbell Avenue;
thence along the centerline of Central Avenue North 00 04' 39" West, 89.83 feet;
thence South 74 05' 25" East, 26.01 feet to the intersection with the westerly
line of that certain parcel of land conveyed to Xxxxxxx Xxxxxx and Xxxxxxxx Xxxx
Xxxxxx, his wife, as Joint Tenants, by that certain deed filed for record in
Book 8302 of Official Records, page 526 in the Office of the County Recorder in
the County of Santa Xxxxx, State of California, thence North 00 04' 39" West
along said westerly line 67.09 feet to the TRUE POINT OF BEGINNING; thence
continuing also said westerly line North 00 04' 39" WEst, 71.00 feet, thence
North 89 55' 21" East, 12.00 feet; thence South 57 34' 39" East, 46.00 feet;
thence South 32 25' 21" West, 15.00 feet, to a tangent curve concave to the
Northeast having a radius of 7.00 feet; thence along said tangent curve concave
to the Northeast, 6.28 feet, through a central angle of 90; thence South 57 34'
39" East, 7.00 feet; thence South 32 25' 21" West, 53 feet more or less to the
northerly right-of-way line described in Book of Official Plan Lines, page 68,
filed in the Office of the Recorder of the County of Santa Xxxxx, State of
California, on March 29, 1972; thence northwesterly along said right-of-way line
to the Point of Beginning.
PARCEL TWO:
-----------
ALL OF LOT 11 as shown upon that certain Map entitled, "Subdivision of Campbell
Tract, at Campbell Station", which Map was filed for record in the Office of the
Recorder of the County of Santa Xxxxx, State of California, on January 3, 1888
in Book "C" of Maps, at page 49.
PARCEL THREE:
-------------
PORTION OF LOT 14, as shown upon that certain Map entitled, "Subdivision of
Campbell Tract, at Campbell Station", which Map was filed for record in the
office of the Recorder of the County of Santa Xxxxx, State of California, on
January 3, 1888 in Book "C" of Maps, at page 49, and more particularly described
as follows:
BEGINNING at the Southwest corner of said Lot 14 and running thence North 127
feet to the line of Xxxxxx' Land; thence at right angles East to the Westerly
line of the Right of Way of the Southern Pacific Company Railroad; thence
Southwesterly along said line of the Southern Pacific Company Railroad, to the
place of beginning.
PARCEL FOUR:
------------
PORTIONS OF LOTS 9 and 10, as shown upon that certain Map entitled, "Subdivision
of Campbell Tract, at Campbell Station", which Map was filed for record in the
office of the Recorder of the County of Santa Xxxxx, State of California, on
January 3, 1888 in Book "C" of Maps, at Page 49, more particularly described as
follows:
That portion of Lots 9 and 10 lying between the Southwesterly line of Parcel 1
as described in the deed executed by XXXXXXXX XXXX XXXXXX, as surviving Joint
Tenant to THE FACTORY, LTD., a limited partnership, recorded December 5, 1977 in
Book D 319, Page 517 of Official Records and the Northerly line of Orchard City
Drive as established by Deed executed by XXXXXXXX XXXX XXXXXX, a widow to CITY
OF XXXXXXXX, recorded August 8, 1977 in Book D 055, Page 534 of Official
Records.
ALSO EXCEPTING THEREFROM, that portion thereof, as conveyed to the City of
Xxxxxxxx by Deed recorded February 1, 1979 in Book E 264, Page 104 of Official
Records, more particularly described as follows:
Page 3 (307 Orchard City Drive)
BEGINNING at an angle point in the center line of Central Avenue, said angle
point being 432.70 feet Southerly from the centerline of Campbell Avenue; thence
along the centerline of Central Avenue North 00 04' 39" WEst, 89.83 feet; thence
South 74 05' 25" East, 26.01 feet to the intersection with the westerly line of
that certain parcel of land conveyed to Xxxxxxx Xxxxxx and Xxxxxxxx Xxxx Xxxxxx,
his wife, as Joint Tenants by that certain Deed filed for record in Book 8302 of
Official Records, Page 526 in the office of the County Recorder in the County of
Santa Xxxxx, State of California; thence North 00 04 39" West along said
Westerly line, 67.09 feet to the TRUE POINT OF BEGINNING; thence continuing
along said Westerly line North 00 04' 39" WEst, 71.00 feet; thence North 89 55'
21" East, 12.00 feet' thence South 57 34' 39" East, 48.00 feet' thence South 32
25' 21" WEst, 15.00 feet, to a tangent curve concave to the Northeast having a
radius of 7.00 feet; thence along said tangent curve concave to the Northeast,
6.28 feet, through a central angle of 90 ; thence South 57 34' 39" East, 7.00
feet; thence South 32 25' 25" WEst, 53.00 feet; more or less to the Northerly
right-of-way line described in Book 7 of Official Plan Lines, Page 68, filed in
the office of the Recorder of the County of Santa Xxxxx, State of California, on
March 29, 1972; thence Northwesterly along said right-of-way line to the point
of beginning.
[CHART OMITTED]
SCHEDULE "B-1
(Plan of Leased Premises outlined in red)
[CHART OMITTED]
SCHEDULE "B-2"
OUTLINE OF TEMPORARY SPACE - (SUITE 304)
----------------------------------------
[CHART OMITTED]
Page B-2
SCHEDULE "C"
TAXES PAYABLE BY LANDLORD AND TENANT
TENANT'S TAXES 1. (a) The Tenant covenants to pay all Tenant's Taxes, as
and when the same become due and payable. Where any
Tenant's Taxes are payable by the Landlord to the
relevant taxing authorities, the Tenant covenants to
pay the amount thereof to the Landlord.
(b) The Tenant covenants to pay the Landlord the Tenant's
Proportionate Share of the excess of the amount of
the Landlord's Taxes in each Fiscal Period over the
Landlord's Taxes in the "Base Year" (as hereinafter
defined).
(c) The Tenant covenants to pay to the Landlord the
Tenant's Proportionate Share of the costs and
expenses (including legal and other professional fees
and interest and penalties on deferred payments)
incurred in good faith by the Landlord in contesting,
resisting or appealing any of the Taxes.
LANDLORD'S TAXES (d) The Landlord covenants to pay all Landlord's Taxes
subject to the payments on account of Landlord's
Taxes required to be made by the Tenant elsewhere in
this Lease. The Landlord may appeal any official
assessment or the amount of any Taxes or other taxes
based on such assessment and relating to the
Property. In connection with any such appeal, the
Landlord may defer payment of any Taxes or other
taxes, as the case may be, payable by it to the
extent permitted by law, and the Tenant shall co-
operate with the Landlord and provide the Landlord
with all relevant information reasonably required by
the Landlord in connection with any such appeal.
SEPARATE ALLOCATION (e) In the event that the Landlord is unable to obtain
from the taxing authorities any separate allocation
of Landlord's Taxes, Tenant's Taxes or assessment as
required by the Landlord to make calculations of
Additional Rent under this Lease, such allocation
shall be made by the Landlord acting reasonably and
shall be conclusive.
INFORMATION (f) Whenever requested by the Landlord, the Tenant shall
deliver to it receipts for payment of all the
Tenant's Taxes and furnish such other information in
connection therewith as the Landlord may reasonably
require.
TAX ADJUSTMENT (g) If the Building has not been taxed as a completed and
fully occupied building for any Fiscal Period, the
Landlord's Taxes will be determined by the Landlord
as if the Building had been taxed as a completed and
fully occupied building for any such Fiscal Period.
DEFINITION 2. In this lease:
(a) "Landlord's Taxes" shall mean the aggregate of all
Taxes attributable to the Property, the Rent or the
Landlord in respect thereof and including, without
limitation, any amounts imposed, assessed, levied or
charged in substitution for or in lieu of any such
Taxes, but excluding such taxes as capital gains
taxes, corporate income, profit or excess profit
taxes to the extent such taxes are not levied in lieu
of any of the foregoing against the Property or the
Landlord in respect thereof;
(b) "Taxes" shall mean all taxes, rates, duties, levies,
fees, charges, local improvement rates, capital
taxes, rental taxes and assessments whatsoever
including fees, rents, and levies for air rights and
encroachments on or over municipal property imposed,
assessed, levied or charged by any school, municipal,
regional, state, provincial, federal, parliamentary
or other body, corporation, authority, agency or
commission provided that any such local improvements
rates, assessed and paid prior to or in the Base Year
shall
be excluded from the Base Year and any year
during the Term and provided further that Taxes shall
not include any special utility, levies, fees or
charges imposed, assessed, levied or charged which
are directly associated with initial construction of
the Property.
(c) "Tenant's Taxes" shall mean the aggregate of:
(i) all Taxes (whether imposed upon the Landlord or
the Tenant) attributable to the personal
property, trade fixtures, business, income,
occupancy or sales of the Tenant or any other
occupant of the Leased Premises, and to any
Leasehold Improvements or fixtures installed by
or on behalf of the Tenant within the Leased
Premises, and to the use by the Tenant of any
of the Property; and
(ii) the amount by which Taxes (whether imposed upon
the Landlord or the Tenant) are increased above
the Taxes which would have otherwise been
payable as a
C-1
SCHEDULE "C"
TAXES PAYABLE BY LANDLORD AND TENANT
result of the Leased Premises or the Tenant or any
other occupant of the Leased Premises being taxed
or assessed in support of separate schools; and
(d) "Tenant's Proportionate Share" shall mean eighteen
point eighty-five percent (18.85%) subject to
adjustment as determined solely by the Landlord and
notified to the Tenant in writing for physical
increases or decreases in the total rentable area of
the Property provided that total rentable area of the
Property and the rentable area of the Leased Premises
shall exclude areas designated (whether or not rented)
for parking and for storage.
(e) "Base Year" as used in this Schedule shall mean
calendar year 1998.
C-2
SCHEDULE "D"
SERVICES AND COSTS
1. The Landlord covenants with the Tenant:
Interior Climate Control (a) To maintain in the Leased Premises conditions
of reasonable temperature and comfort in
accordance with good standards applicable to
normal occupancy of premises for office
purposes subject to governmental regulations
during hours to be determined by the Landlord
(but to be at least the hours from 8:00 a.m.
to 6:00 p.m. from Monday to Friday, and 9:00
a.m. to 1:00 p.m. on Saturdays, inclusive
(excluding holidays, and Sundays), such
conditions to be maintained by means of a
system for heating and cooling, filtering and
circulating air; the Landlord shall have no
responsibility for any inadequacy of
performance of the said system if the
occupancy of the Leased Premises or the
electrical power or other energy consumed on
the Leased Premises for all purposes exceeds
reasonable amounts as determined by the
Landlord or the Tenant installs partitions or
other installations in locations which
interfere with the proper operation of the
system of interior climate control or if the
window covering on exterior windows is not
kept fully closed. The Landlord covenants
with the Tenant to furnish HVAC to the Leased
Premises for normal office use during the
hours set forth above, and during such other
hours that the Tenant elects, at the Tenant's
sole cost and expense, subject to applicable
governmental regulations:
Janitor Service (b) To provide five (5) days per week janitor and
cleaning services to the Leased Premises and
to common areas of the Building consisting of
reasonable services in accordance with the
standards of similar office buildings;
Elevators, Lobbies, etc. (c) To keep available the following facilities
for use by the Tenant and its employees and
invitees in common with other persons
entitled thereto:
(i) passenger and freight elevator service
to each floor upon which the Leased
Premises are located provided such
service is installed in the Building
and provided that the Landlord may
prescribe the hours during which and
the procedures under which freight
elevator service shall be available and
may limit the number of elevators
providing service outside normal
business hours;
(ii) common entrances, lobbies, stairways
and corridors giving access to the
Building and the Leased Premises,
including such other areas from time to
time which may be provided by the
Landlord for common use and enjoyment
within the Property;
(iii) the washrooms as the Landlord may
assign from time to time which are
standard to the Building, provided that
the Landlord and the Tenant acknowledge
that where an entire floor is leased to
the Tenant or some other tenant the
Tenant or such other tenant, as the
case may be, may exclude others from
the washrooms thereon.
Electricity 2. (a) The Landlord covenants with the Tenant to
furnish electricity to the Leased Premises
(except all or any portion of the Leased
Premises which has a separate meter or
meters) for normal office use for lighting
and for office equipment capable of operating
from the circuits available to the Leased
Premises and standard to the Building, and
during such other hours that the Tenant
elects, at the Tenant's sole cost and
expense, subject to applicable governmental
regulations:
(b) The amount of electricity consumed on the
Leased Premises in excess of electricity
required by the Tenant for normal office use
shall be as determined by the Landlord acting
reasonably or by a metering device installed
by the Tenant at the Tenant's expense. The
Tenant shall pay the Landlord for any such
excess electricity on demand.
(c) In calculating electricity costs for any
Fiscal Period, if less than one hundred
percent (100%) of Building is occupied by
tenants, then the amount of such electricity
costs shall be deemed for the purposes of
this Schedule to be increased to an amount
equal to the like electricity costs which
normally would be expected by the Landlord to
have been incurred had such occupancy been
one hundred percent (100%) during such entire
period.
D-1
SCHEDULE "D"
SERVICES AND COSTS
3. The Landlord shall maintain and keep in repair the
facilities required for the provision of the interior
climate control, elevator (if installed in the Building),
and other services referred to in sub-paragraph (a) and
(c) of paragraph 1 and sub-paragraph (a) of paragraph 2
of this Schedule in accordance with the standards of
office buildings similar to the Building but reserves the
right to stop the use of any of these facilities and the
supply of the corresponding services when necessary by
reason of accident or breakdown or during the making of
repairs, alterations or improvements, in the reasonable
judgment of the Landlord necessary or desirable to be
made, until the repairs, alterations or improvements
shall have been completed to the satisfaction of the
Landlord.
Additional Services 4. (a) The Landlord may (but shall not be obliged)
on request of the Tenant supply services or
materials to the Leased Premises and the
Property which are not provided for under
this Lease and which are used by the Tenant
(the "Additional Services") including,
without limitation,
(i) replacement of nonbuilding standard
tubes and ballasts;
(ii) carpet shampooing;
(iii) drapery cleaning;
(iv) locksmithing;
(v) removal of bulk garbage;
(vi) picture hanging; and
(vii) special security arrangement.
(b) When Additional Services are supplied or
furnished by the Landlord, accounts therefor shall
be rendered by the Landlord and shall be payable by
the Tenant to the Landlord on demand. In the event
the Landlord shall elect not to supply or furnish
Additional Services, only persons with prior
written approval by the Landlord (which approval
shall not be unreasonably withheld) shall be
permitted by the Landlord or the Tenant to supply
or furnish Additional Services to the Tenant and
the supplying and furnishing shall be subject to
the reasonable rules fixed by the Landlord with
which the Tenant undertakes to cause compliance and
to comply.
OPERATING 5. (a) The Tenant covenants to pay to the Landlord
CHARGES PAYABLE the Tenant's Proportionate Share of the excess of the
amount of the Operating Costs in each Fiscal Period over
the Operating Costs in the "Base Year" (as hereinafter
defined).
(b) In this Lease "Operating Costs" shall mean
all costs reasonably incurred or which will
be incurred by the Landlord in the
maintenance, operation, administration and
management of the Property including without
limitation:
(i) cost of heating, ventilating and air-
conditioning;
(ii) cost of water and sewer charges;
(iii) cost of insurance carried by the
Landlord pursuant to paragraph 9(a) of
this Lease and cost of any deductible
amount paid by the Landlord in
connection with each claim made by the
Landlord under such insurance;
(iv) costs of building office expenses,
including telephone, rent, stationery
and supplies directly related to the
Property:
(v) cost of fuel;
(vi) costs of all elevator and escalator
(if installed in the Building)
maintenance and operation;
(vii) costs of operating staff, management
staff and other administrative
personnel, including salaries, wages,
and fringe benefits, along with a
reasonable management fee, directly
related to the Property:
(viii) cost of providing security;
(ix) cost of providing janitorial services,
window cleaning, garbage and snow
removal and pest control;
(x) cost of supplies and materials;
(xi) reasonable cost of decoration of
common areas;
(xii) cost of landscaping;
(xiii) cost of maintenance and operation of
the parking area;
(xiv) cost of consulting, and professional
fees including expenses;
(xv) cost of replacements, additions and
modifications unless otherwise
included under paragraph 6, and cost
of repair.
(xvi) The Tenant covenants to pay to the
Landlord the Tenant's Proportionate
Share of the costs in respect of each
Major Expenditure (as hereinafter
defined) as amortized over the period
of the Landlord's reasonable estimate
of the economic
D-2
SCHEDULE "D"
SERVICES AND COSTS
life of the Major Expenditure, but not
to exceed fifteen (15) years, using
equal monthly installments of
principal and interest at ten percent
(10%) per annum compounded semi-
annually. For the purposes hereof,
"Major Expenditure" shall mean any
expenditure incurred after the
Commencement Date of the Lease for
replacement of machinery, equipment,
building elements, systems or
facilities forming a part of or used
in connection with the Property or for
modifications, upgrades or additions
to the Property or facilities used in
connection therewith, provided that,
in each case, such expenditure is more
than ten percent (10%) of the total
Operating Costs of the immediately
preceding Fiscal Period.
(c) In this Lease there shall be excluded
from Operating Costs the following:
(i) interest on debt and capital
retirement of debt;
(ii) such of the Operating Costs as are
recovered from insurance proceeds; and
(iii) costs as determined by the Landlord of
acquiring tenants for the Property;
(iv) insurance "deductible" amounts in the
event of an earthquake; provided
however, that Landlord may include
within Operating Costs that portion of
any such deductible amount which
equals the amortization thereof
allocable to the balance of the Term
as of the date of the casualty,
assuming that such deductible amount
were amortized over the useful life of
the damaged improvement(s) in question
as determined by the depreciation
recovery period for the improvement in
question pursuant to the Internal
Revenue Code; and
(v) costs for a Major Expenditure, except
as otherwise provided in 5(b)(xvi).
6. In calculating Operating Costs for any Fiscal
Period including the Base Year, if less than one hundred
percent (100%) of Building is occupied by tenants, than
the amount of such Operating Costs shall be deemed for
the purposes of this Schedule to be increased to an
amount equal to the like Operating Costs which normally
would be expected by the Landlord to have been incurred
had such occupancy been one hundred percent (100%) during
such entire period.
7. In this Lease
(i) "Tenant's Proportionate Share" shall mean
eighteen point eighty-five percent (18.85%)
subject to adjustment as determined solely by
the Landlord and notified to the Tenant in
writing for physical increases or decreases
in the total rentable area of the Property
provided that total rentable area of the
Property and the rentable area of the Leased
Premises shall exclude areas designated
(whether or not rented) for parking and for
storage.
(ii) "Base Year" shall mean calendar year 1998.
D-3
SCHEDULE "E"
RULES AND REGULATIONS
1. The sidewalks, entry passages, elevators (if installed in the Building) and
common stairways shall not be obstructed by the Tenant or used for any other
purpose than for ingress and egress to and from the Leased Premises. The Tenant
will not place or allow to be placed in the Building corridors or public
stairways any waste paper, dust, garbage, refuse or anything whatever.
2. The washroom plumbing fixtures and other water apparatus shall not be used
for any purpose other than those for which they were constructed, and no
sweepings, rubbish, rags, ashes or other substances shall be thrown therein. The
expense of any damage resulting by misuse by the Tenant shall be borne by the
Tenant.
3. The Tenant shall permit window cleaners to clean the windows of the Leased
Premises during normal business hours.
4. No birds or animals shall be kept in or about the Property nor shall the
Tenant operate or permit to be operated any musical or sound-producing
instruments or device or make or permit any improper noise inside or outside the
Leased Premises which may be heard outside such Leased Premises.
5. No one shall use the Leased Premises for residential purposes, or for the
storage of personal effects or articles other than those required for business
purposes.
6. All persons entering and leaving the Building at any time other than during
normal business hours shall register in the books which may be kept by the
Landlord at or near the night entrance and the Landlord will have the right to
prevent any person from entering or leaving the Building or the Property unless
provided with a key to the premises to which such person seeks entrance and a
pass in a form to be approved by the Landlord. Any persons found in the Building
at such times without such keys and passes will be subject to the surveillance
of the employees and agents of the Landlord.
7. No dangerous or explosive materials shall be kept or permitted to be kept
in the Leased Premises.
8. The Tenant shall not permit any cooking, except for the use of a microwave
oven or microwave ovens by Tenant's employees or personnel, in the Leased
Premises. The Tenant shall not install or permit the installation or use of any
more than two (2) machines dispensing goods for sale in the Leased Premises
without the prior written approval of the Landlord and subject to governmental
compliance and all other terms of this Lease. Only persons authorized by the
Landlord shall be permitted to deliver or to use the elevators (if installed in
the Building) for the purpose of delivering food or beverages to the Leased
Premises.
9. The Tenant shall not bring in or take out, position, construct, install or
move any safe, business machine or other heavy office equipment without first
obtaining the prior written consent of the Landlord. In giving such consent, the
Landlord shall have the right in its sole discretion, to prescribe the weight
permitted and the position thereof, and the use and design of planks, skids or
platforms to distribute the weight thereof. All damage done to the Building by
moving or using any such heavy equipment or other office equipment or furniture
shall be repaired at the expense of the Tenant. The moving of all heavy
equipment or other office equipment or furniture shall occur only at times
consented to by the Landlord and the persons employed to move the same in and
out of the Building must be acceptable to the Landlord. Safes and other heavy
office equipment will be moved through the halls and corridors only upon steel
bearing plates. No freight or bulky matter of any description will be received
into the Building or carried in the elevators (if installed in the Building)
except during hours approved by the Landlord.
10. The Tenant shall give the Landlord prompt notice of any accident to or any
defect in the plumbing, heating, air-conditioning, ventilating, mechanical or
electrical apparatus or any other part of the Building.
11. The parking of automobiles shall be subject to reasonable regulations of the
Landlord and any future reasonable parking charges imposed by any governmental
or quasi-governmental authority during the Term. The Landlord shall not be
responsible for damage to or theft of any car, its accessories or contents
whether the same be the result of negligence or otherwise.
12. The Tenant shall not xxxx, drill into or in any way deface the walls,
ceilings, partitions, floors or other parts of the Leased Premises and the
Building.
X- 0
SCHEDULE "E"
RULES AND REGULATIONS
13. Except with the prior written consent of the Landlord, no tenant shall use
or engage any person or persons other than the janitor or janitorial contractor
of the Landlord for the purpose of any cleaning of the Leased Premises.
14. If the Tenant desires any electrical or communications wiring, the Landlord
reserves the right to direct qualified persons as to where and how the wires are
to be introduced, and without such directions no borings or cutting for wires
shall take place. No other wires or pipes of any kind shall be introduced
without the prior written consent of the Landlord.
15. The Tenant shall not place or cause to be placed any additional locks upon
any doors of the Leased Premises without the approval of the Landlord and
subject to any conditions imposed by the Landlord. Additional keys may be
obtained from the Landlord at the cost of the Tenant.
16. The Tenant shall be entitled to have its name shown upon the directory
board of the Building and at one of the entrance doors to the Leased Premises
all at the Tenant's expense, but the Landlord shall in its sole discretion
design the style of such identification and allocate the space on the directory
board for the Tenant.
17. The Tenant shall keep the sun drapes (if any) in a closed position at all
reasonable times. The Tenant shall not interfere with or obstruct any perimeter
heating, air-conditioning or ventilating units.
18. The Tenant shall not conduct, and shall not permit any, canvassing in the
Building.
19. The Tenant shall take care of the rugs and drapes (if any) in the Leased
Premises and shall arrange for the carrying-out of regular spot cleaning and
shampooing of carpets and dry cleaning of drapes in a manner acceptable to the
Landlord.
20. The Tenant shall permit the periodic closing of lanes, driveways and
passages for the purpose of preserving the Landlord's rights over such lanes,
driveways and passages.
21. The Tenant shall not place or permit to be placed any sign, advertisement,
notice or other display on any part of the exterior of the Leased Premises or
elsewhere if such sign, advertisement, notice or other display is visible from
outside the Leased Premises without the prior written consent of the Landlord
which may be arbitrarily withheld. The Tenant, upon request of the Landlord,
shall immediately remove any sign, advertisement, notice or other display which
the Tenant has placed or permitted to be placed which, in the opinion of the
Landlord, is objectionable, and if the Tenant shall fail to do so, the Landlord
may remove the same at the expense of the Tenant. Notwithstanding anything to
the contrary above. Tenant may, at Tenant's sole cost and expense, using a
contractor or contractors reasonably approved by Landlord, install, maintain and
remove upon the expiration or sooner termination of the Term, one exterior sign
on the existing monument sign; provided, however, Tenant shall use building
standard materials and design which must be submitted to Landlord in writing and
receive Landlord's written approval, which approval shall not be unreasonably
withheld.
22. The Landlord shall have the right to make such other and further reasonable
rules and regulations and to alter the same as in its judgment may from time to
time be needful for the safety, care, cleanliness and appearance of the Leased
Premises and the Building and for the preservation of good order therein, and
the same shall be kept and observed by the tenants, their employees and
servants. The Landlord also has the right to suspend or cancel any or all of
these rules and regulations herein set out.
E-2
SCHEDULE "F"
LEASEHOLD IMPROVEMENTS
Definition of 1. For purposes of this Lease, the term "Leasehold
Leasehold Improvements" includes, without limitation, all
Improvements fixtures, improvements, installations, alterations and
additions from time to time made, erected or installed by
or on behalf of the Tenant, or any previous occupant of
the Leased Premises, in the Leased Premises and by or on
behalf of other tenants in other premises in the Building
(including the Landlord if an occupant of the Building),
including all partitions, doors and hardware however
affixed, and whether or not movable, all mechanical,
electrical and utility installations and all carpeting
and drapes with the exception only of furniture, trade
fixtures, and equipment not of the nature of fixtures.
Installation of 2. The Landlord shall include in the Leased Premises
Improvements the "Landlord's Work" (as hereinafter defined). The
and Fixtures Tenant shall not make, erect, install or alter any
Leasehold Improvements in the Leased Premises without
having requested and obtained the Landlord's prior
written approval. The Landlord's approval shall not, if
given, under any circumstances be construed as a consent
to the Landlord having its estate charged with the cost
of work. The Landlord shall not unreasonably withhold its
approval to any such request, but failure to comply with
the Landlord's reasonable requirements from time to time
for the Building shall be considered sufficient reason
for refusal. In making, erecting, installing or altering
any leasehold Improvements the Tenant shall not, without
the prior written approval of the Landlord, alter or
interfere with any installations which have been made by
the Landlord or others and in no event shall alter or
interfere with window coverings (if any) or other light
control devices (if any) installed in the Building. The
Tenant's request for any approval hereunder shall be in
writing and accompanied by an adequate description of the
contemplated work and, where appropriate, working
drawings and specifications thereof. If the Tenant
requires from the Landlord drawings or specifications of
the Building in connection with permanent Leasehold
Improvements, the Tenant shall pay the cost thereof to
the Landlord on demand. Any reasonable costs and expenses
incurred by the Landlord in connection with the Tenant's
Leasehold Improvements shall be paid by the Tenant to the
Landlord on demand. All work to be performed in the
Leased Premises shall be performed by competent
contractors and sub-contractors of whom the Landlord
shall have approved in writing prior to commencement of
any work, such approval not to be unreasonably withheld
(except that the Landlord may require that the Landlord's
contractors and sub-contractors be engaged for any
mechanical or electrical work) All such work including
the delivery, storage and removal of materials shall be
subject to the reasonable supervision of the Landlord,
shall be performed in accordance with any reasonable
conditions or regulations imposed by the Landlord
including, without limitation, payment on demand of a
reasonable fee of the Landlord for such supervision,
which shall not exceed 3% of the actual construction
cost, and shall be completed in good and workmanlike
manner in accordance with the description of the work
approved by the Landlord and in accordance with all laws,
regulations and by-laws of all regulatory authorities.
Copies of required building permits or authorizations
shall be obtained by the Tenant at its expense and copies
thereof shall be provided to the Landlord. No locks shall
be installed on the entrance doors or in any doors in the
Leased Premises that are not keyed to the Building master
key system.
Liens and 3. In connection with the making, erection,
Encumbrances on installations or alteration or leasehold Improvements and
Improvements and all other work or installations made by or for the
Fixtures Tenant in the Leased Premises the Tenant shall comply
with all the provisions of the mechanics' lien and other
similar statutes from time to time applicable thereto
(including any proviso requiring or enabling the
retention by way of holdback of portions of any sums
payable) and, except as to any such holdback, shall
promptly pay all accounts relating thereto. The Tenant
will not create any mortgage, conditional sale agreement
or other encumbrance in respect of its Leasehold
Improvements nor shall the Tenant take any action as a
consequence of which any such mortgage, conditional sale
agreement or other encumbrance would attach to the
Property or any part thereof. If and whenever any
mechanics' or other lien for work, labor, services or
materials supplied to or for the Tenant or for the cost
of which the Tenant may be in any way liable or claims
therefor shall arise or be filed or any such mortgage,
conditional sale agreement or other encumbrance shall
attach, the Tenant shall within twenty (20) days after
submission by the Landlord of notice thereof procure the
discharge thereof, including any certificate of action
registered in respect of any lien, by payment or giving
security or in such other manner as may be required or
permitted by law, and failing which the Landlord may
avail itself of any of its remedies hereunder for default
of the Tenant and may make any payments or take any steps
or proceedings required to procure the discharge of any
such liens or encumbrances, and shall be entitled to be
repaid by the Tenant on demand for any such payments and
to be paid on demand by the Tenant for all costs and
expenses in connection with steps or proceedings taken by
the Landlord and the Landlord's right to reimbursement
and to payment shall not be affected or impaired if the
Tenant
F-1
SCHEDULE "F"
LEASEHOLD IMPROVEMENTS
shall then or subsequently establish or claim that any
lien or encumbrances so discharged was without merit or
excessive or subject to any abatement, set-off or
defense. The Tenant agrees to indemnify the Landlord from
all claims, costs and expenses (including reasonable
attorneys' fees and costs, and court costs) which may be
incurred by the Landlord in any proceedings brought by
any person against the Landlord alone or with another or
others for or in respect of work, labor, services or
materials supplied to or for the Tenant.
Removal of All Leasehold Improvements in or upon the Leased Premises
Improvements and shall immediately upon their placement be and become the
Fixtures Landlord's property without compensation therefor to the
Tenant. Except to the extent otherwise expressly agreed
by the Landlord in writing, no Leasehold Improvements,
furniture or equipment shall be removed by the Tenant
from the Leased Premises either during or at the
expiration or sooner termination of the Term except that:
(a) the Tenant shall, prior to the end of the Term,
remove such of the Leasehold Improvements and trade
fixtures in the Leased Premises as the Landlord
shall require to be removed; and
(b) the Tenant may, at the times appointed by the
Landlord and subject to availability of elevators
(if installed in the Building), remove its
furniture and equipment at the end of the Term, and
also during the Term in the usual and normal course
of its business.
The Tenant shall, in the case of every removal, make good
at the expense of the Tenant any damage caused to the
Property by the installation and removal. In the event of
the non-removal by the end of the Term, or sooner
termination of this Lease, of such trade fixtures or
Leasehold Improvements required by the Landlord of the
Tenant to be removed, the Landlord shall have the option,
in addition to its other remedies under this Lease to
declare to the Tenant that such trade fixtures are the
property of the Landlord and the Landlord upon such a
declaration may dispose of such trade fixtures and retain
any proceeds of disposition as security for the Debts,
Liabilities and Obligations and the Tenant shall be
liable to the Landlord for any expenses incurred by the
Landlord.
5. For the purpose of this Lease,
(a) the term "Tenant's Work" shall mean all work
required to be done to complete the Leased
Premises for occupancy by the Tenant,
excluding the "Landlord's Work" (as
hereinafter defined).
(b) the term "Landlord's Work" shall mean:
1. Repaint Leased Premises using building
standard materials (color to be selected by
Tenant).
2. Recarpet Leased Premises using building
standard materials (color to be selected by
Tenant).
3. Landlord shall deliver the Leased
Premises to Tenant broom-clean, in good
condition and repair.
6. Notwithstanding anything to the contrary set forth
in Paragraph 2, or elsewhere, in this Lease, the
Commencement Date of the Term or the "Commencement
of the Term" shall be defined as, and shall be
conclusively deemed to occur on, the date Landlord
substantially completes the Landlord's Work in the
Leased Premises, which shall occur on the date
Landlord has completed Landlord's Work specified in
this Schedule F Paragraph 5(b) and Landlord tenders
exclusive possession of the Leased Premises to
Tenant, excluding any minor items (e.g. "punch-
list" type items) which can be completed by
Landlord with only minor interference to the
conduct of Tenant's business in the Leased
Premises, and any changes requested by Tenant,
delays caused by Tenant, or events of force
majeure. Once the Commencement Date is determined,
Landlord and Tenant agree to confirm such date in
writing, and Tenant's failure to confirm the
Commencement Date, within fifteen (15) days after
Landlord's written request therefore, shall be
conclusively deemed to be Tenant's approval of the
Commencement Date set by Landlord.
7. If the Commencement Date has not occurred for any
reason whatsoever (except to the extent resulting
from delays caused by Tenant or Tenant's agents,
employees or anyone operating under the control of
or for the benefit of Tenant, or any event of force
majeure) on or before April 1, 1998, Tenant may
terminate this Lease by written notice to Landlord,
whereupon (subject to the terms of this Lease) any
monies previously paid by Tenant to Landlord shall
be reimbursed to Tenant.
F-2
SCHEDULE "F"
LEASEHOLD IMPROVEMENTS
8. Notwithstanding anything to the contrary set forth
in this Lease, and if the Commencement Date has not
occurred for any reason whatsoever on or before
July 1, 1998, then either Landlord or Tenant, or
both, may elect to terminate this Lease upon
written notice to the other party hereto, whereupon
(subject to the terms of this Lease) this Lease
shall immediately terminate and any monies
previously paid by Tenant to Landlord shall be
reimbursed to Tenant.
F-3
SCHEDULE "H"
OPTION TO RENEW
(a) The Landlord covenants with the Tenant that if the Tenant is not then
--------
currently in default of this Lease (beyond the expiration of the applicable cure
--------------------------------------------------------------------------------
period, if any), the Landlord will, at the expiration of the then expiring Term
--------------
on written notice by the Tenant to the Landlord given by the Tenant not more
than two hundred seventy (270) days prior to the expiration of the then expiring
Term and received by the Landlord not less than one hundred eighty (180) days
prior to the expiration of the then expiring Term, grant to the Tenant a five
(5) year renewal of this Lease of the Leased Premises (the "Renewal Term") on
-------
the same terms and conditions as in this Lease then, at the commencement of the
----------
Renewal Term, save and except the right of further renewal, Landlord's Work (if
any), Basic Rent, tenant improvement allowance (if any) and Basic Rent Free
Period (if any).
(b) The Basic Rent for the Renewal Term shall be determined by negotiations
between the parties hereto, and it is agreed that during such negotiations in
respect of Basic Rent, they will be guided by fair market rental levels for
similar premises in similar buildings in the downtown area of Campbell,
California, prevailing at the beginning of the Renewal Term but in no event
-----------
shall the Basic Rent per annum be lower than the Basic Rent per annum for the
last year of the Term just ending. If the parties hereto are unable to agree in
writing as to the Basic Rent for the Renewal Term prior to one hundred eighty
(180) days before the expiry of this Lease, this Lease shall end on the expiry
of the Term and this Option to Renew and any subsequent options to renew shall
automatically terminate and be null and void.
---------------------------
(c) The Tenant agrees to execute the Landlord's standard lease amendment
agreement then, at the commencement of the Renewal Term, being used by the
Landlord for the Building to give effect to this Option to Renew if exercised by
the Tenant. The Tenant shall execute such agreement prior to the commencement
date of the Renewal Term.
(d) Notwithstanding the above, if the Tenant does not exercise the Option to
Renew in accordance with Schedule "H", then this Option to Renew shall
-----
automatically terminate and be null and void.
------------------------------
H-1
SCHEDULE "K"
INCREASE IN BASIC RENTAL
Commencing on the 1st day of January, 1999 and continuing until the 31st day of
December, 1999, the Basic Rent shall be increased to Two Hundred Ten Thousand
Four Hundred Forty-Four and 00/100 Dollars ($210,444.00) per annum of lawful
money of the jurisdiction in which the Leased Premises are located payable in
equal monthly installments of Seventeen Thousand Five Hundred Thirty-Seven and
00/100 Dollars ($17,537.00) each in advance on the first day of each month
during the Term, the first payment to be made on the 1st day of January, 1999.
K
SCHEDULE "K-1"
INCREASE IN BASIC RENTAL
Commencing on the 1st day of January, 2000 and continuing until the 31st day of
December, 2000, the Basic Rent shall be increased to Two Hundred Sixteen
Thousand Five Hundred Four and 00/100 Dollars ($216,504.00) per annum of lawful
money of the jurisdiction in which the Leased Premises are located payable in
equal monthly installments of Eighteen Thousand Forty-Two and 00/100 Dollars
($18,042.00) each in advance on the first day of each month during the Term, the
first payment to be made on the 1st day of January, 2000.
K-1
SCHEDULE "K-2"
INCREASE IN BASIC RENTAL
Commencing on the 1st day of January, 2001 and continuing until the 31st day of
December, 2001, the Basic Rent shall be increased to Two Hundred Twenty-Two
Thousand Five Hundred Sixty-Four and 00/100 Dollars ($222,564.00) per annum of
lawful money of the jurisdiction in which the Leased Premises are located
payable in equal monthly installments of Eighteen Thousand Five Hundred Forty-
Seven and 00/100 Dollars ($18,547.00) each in advance on the first day of each
month during the Term, the first payment to be made on the 1st day of January,
2001.
K-2
SCHEDULE "K-3"
INCREASE IN BASIC RENTAL
Commencing on the 1st day of January, 2002 and continuing until the 31st day of
December, 2002, the Basic Rent shall be increased to Two Hundred Twenty-Eight
Thousand Six Hundred Twenty-Four and 00/100 Dollars ($228,624.00) per annum of
lawful money of the jurisdiction in which the Leased Premises are located
payable in equal monthly installments of Nineteen Thousand Fifty-Two and 00/100
Dollars ($19,052.00) each in advance on the first day of each month during the
Term, the first payment to be made on the 1st day of January, 2002.
K-3
SCHEDULE "N-1"
TEMPORARY SPACE LEASE - (SUITE 108)
-----------------------------------
Notwithstanding anything to the contrary set forth in Paragraph 1, or
elsewhere, in this Lease, Landlord and Tenant hereby acknowledge and agree that
prior to the "Commencement Date" of the Term (which the parties hereto estimate
to be January 1, 1998, as set forth in Paragraph 2(a) of this Lease), Landlord
shall lease to Tenant, and Tenant shall lease from Landlord, that certain space
commonly known as Suite 108 in the Building located at 000 Xxxxxxx Xxxx Xxxxx,
Xxxxxxxx, Xxxxxxxxxx (the "Suite 108 Temporary Space"), which consists of
approximately one thousand six hundred forty-seven (1,647) rentable square feet.
The Suite 108 Temporary Space is more particularly shown on Schedule "B-1"
-------------
attached to this Lease and incorporated herein by this reference. Tenant's lease
of the Suite 108 Temporary Space shall be subject to all of the terms,
conditions and limitations set forth in this Lease regarding the Leased
Premises, except as follows:
(a) The term for Tenant's occupancy of the Suite 108 Temporary Space
shall be the period commencing on June 1, 1997 (the "Suite 108 Commencement
Date"), and continuing for a period of twelve (12) months thereafter (the "Suite
108 Term"); provided, however, the Suite 108 Term shall automatically expire,
without the need for any further written notice between the parties hereto, upon
the earlier to occur of the following: (i) the Commencement Date under this
Lease, (ii) Landlord's delivery to Tenant of exclusive possession of Suite 350
of the Leased Premises, in accordance with the terms of this Lease, prior to the
Commencement Date, or (iii) any termination or expiration of this Lease in
accordance with either Paragraph 7 or 8 in Schedule "F" attached to this Lease
-----------
and incorporated herein by this reference. Consequently, and except as otherwise
provided herein, all obligations of Tenant contained in this Lease with respect
to the Leased Premises (including, without limitation, Tenant's obligation to
pay Rent (as set forth in Paragraph (b) below), and Tenant's Indemnification,
repair and insurance obligations) shall commence and be applicable with respect
to the Suite 108 Temporary Space as of the Suite 108 Commencement Date and
continuing throughout the Suite 108 Term.
(b) Tenant shall, without deduction or right of offset, pay to
Landlord during the Suite 108 Term as rental (herein called the "Suite 108 Basic
Rent"), the amount of Thirty-Three Thousand Six Hundred Dollars (US$33,600.00)
in lawful money of the United States of America, in equal monthly installments
of Two Thousand Eight Hundred Dollars (US$2,800.00), each in advance, on the
first day of each month during the Suite 108 Term, with the first payment to be
made on the Suite 108 Commencement Date. Notwithstanding anything to the
contrary set forth in Paragraph (a) above, Landlord hereby agrees to xxxxx
Tenant's obligation to pay to Landlord the Additional Rent for the Suite 108
Temporary Space during the Suite 108 Term. The abatement of Additional Rent set
forth in this Paragraph (b) shall not be construed as to relieve Tenant of any
of Tenant's other obligations under this Lease. In the event of any default by
Tenant under this Lease and/or with regard to the Suite 108 Temporary Space, as
set forth in Paragraph 10 of this Lease, then as part of the recovery permitted
to Landlord, Landlord shall be entitled to recover all of the Additional Rent
which was abated hereunder (i.e., such Additional Rent shall not be deemed to
---
have been abated, but shall become immediately due and payable as unpaid
Additional Rent earned at the time of Tenant's default).
(c) As of the Suite 108 Commencement Date, Landlord shall deliver the
Suite 108 Temporary Space to Tenant broom-clean, in good condition and repair.
Except as otherwise provided herein, Tenant hereby accepts the Suite 108
Temporary Space in its current "AS-IS/WHERE-IS" condition "WITH ALL FAULTS", and
Landlord shall not be required to construct, nor contribute any monies toward,
any improvements, modifications or alterations in the Suite 108 Temporary Space.
Tenant further acknowledges that neither Landlord nor any agent of Landlord has
made any representation or warranty with respect to the Suite 108 Temporary
Space or its suitability for the conduct of Tenant's business therein. The
taking of possession of the Suite 108 Temporary Space by Tenant shall
conclusively establish that the Suite 108 Temporary Space was in satisfactory
condition to Tenant.
(d) Tenant shall not be required to pay or deposit any additional
security with respect to the Suite 108 Temporary Space. Tenant hereby agrees,
however, that the "Security Deposit" deposited by Tenant for the Leased Premises
pursuant to Paragraph 4 of this Lease may be held, used and applied by Landlord
as security for the performance by Tenant of Tenant's obligations regarding the
Suite 108 Temporary Space. If any portion of the Security Deposit is used or
applied by Landlord with respect to the Suite 108 Temporary Space, Tenant shall
restore the Security Deposit to its original amount pursuant to Paragraph 4 of
this Lease.
SCHEDULE "N-2"
TEMPORARY SPACE LEASE - (SUITE 304)
-----------------------------------
Notwithstanding anything to the contrary set forth in Paragraph 1, or
elsewhere, in this Lease, Landlord and Tenant hereby acknowledge and agree that
prior to the "Commencement Date" of the Term (which the parties hereto estimate
to be January 1, 1998, as set forth in Paragraph 2(a) of this Lease), Landlord
shall lease to Tenant, and Tenant shall lease from Landlord, that certain space
commonly known as Suite 304 In the Building located at 000 Xxxxxxx Xxxx Xxxxx,
Xxxxxxxx, Xxxxxxxxxx (the "Suite 304 Temporary Space"), which consists of
approximately one thousand four hundred thirty-seven (1,437) rentable square
feet. The Suite 304 Temporary Space is more particularly shown or Schedule "B-2"
-------------
attached to this Lease and incorporated herein by this reference. Tenant's lease
of the Suite 304 Temporary Space shall be subject to all of the terms,
conditions and limitations set forth in this Lease regarding the Leased
Premises, except as follows:
(a) The term for Tenant's occupancy of the Suite 304 Temporary Space
shall be the period commencing on June 1, 1997 (the "Suite 304 Commencement
Date"), and continuing for a period of twelve (12) months thereafter (the "Suite
304 Term"); provided, however, the Suite 304 Term shall automatically expire,
without the need for any further written notice between the parties hereto, upon
the earlier to occur of the following: (i) the Commencement Date under this
Lease, or (ii) any termination or expiration of this Lease in accordance with
either Paragraph 7 or 8 in Schedule "F" attached to this Lease and incorporated
-----------
herein by this reference. Consequently, and except as otherwise provided herein,
all obligations of Tenant contained in this Lease with respect to the Leased
Premises (including, without limitation, Tenant's obligation to pay Rent (as set
forth in Paragraph (b) below), and Tenant's indemnification, repair and
insurance obligations) shall commence and be applicable with respect to the
Suite 304 Temporary Space as of the Suite 304 Commencement Date and continuing
throughout the Suite 304 Term.
(b) Tenant shall, without deduction or right of offset, pay to
Landlord during the Suite 304 Term as rental (herein called the "Suite 304 Basic
Rent"), the amount of Twenty-Seven Thousand Six Hundred Dollars (US $27,600.00)
in lawful money of the United States of America, in equal monthly installments
of Two Thousand Three Hundred Dollars (US $2,300.00), each in advance, on the
first day of each month during the Suite 304 Term, with the first payment to be
made on the Suite 304 Commencement Date. Notwithstanding anything to the
contrary set forth in Paragraph (a) above, Landlord hereby agrees to xxxxx
Tenant's obligation to pay to Landlord the Additional Rent for the Suite 304
Temporary Space during the Suite 304 Term. The abatement of Additional Rent set
forth in this Paragraph (b) shall not be construed as to relieve Tenant of any
of Tenant's other obligations under this Lease. In the event of any default by
Tenant under this Lease and/or with regard to the Suite 304 Temporary Space, as
set forth in Paragraph 10 of this Lease, then as part of the recovery permitted
to Landlord, Landlord shall be entitled to recover all of the Additional Rent
which was abated hereunder i.e., such Additional Rent shall not be deemed to
----
have been abated, but shall become immediately due and payable as unpaid
Additional Rent earned at the time of Tenant's default).
(c) As of the Suite 304 Commencement Date, Landlord shall deliver the
Suite 304 Temporary Space to Tenant broom-clean, in good condition and repair.
Except as otherwise provided herein, Tenant hereby accepts the Suite 304
Temporary Space in its current "AS-IS/WHERE-IS" condition "WITH ALL FAULTS", and
Landlord shall not be required to construct, nor contribute any monies toward,
any improvements, modifications or alterations in the Suite 304 Temporary Space.
Tenant further acknowledges that neither Landlord nor any agent of Landlord has
made any representation or warranty with respect to the Suite 304 Temporary
Space or its suitability for the conduct of Tenant's business therein. The
taking of possession of the Suite 304 Temporary Space by Tenant shall
conclusively establish that the Suite 304 Temporary Space was in satisfactory
condition to Tenant.
(d) Tenant shall not be required to pay or deposit any additional
security with respect to the Suite 304 Temporary Space. Tenant hereby agrees,
however, that the "Security Deposit" deposited by Tenant for the Leased Premises
pursuant to Paragraph 4 of this Lease may be held, used and applied by Landlord
as security for the performance by Tenant of Tenant's obligations regarding the
Suite 304 Temporary Space. If any portion of the Security Deposit is used or
applied by Landlord with respect to the Suite 304 Temporary Space, Tenant shall
restore the Security Deposit to its original amount pursuant to Paragraph 4 of
this Lease.
SCHEDULE "O"
RIGHT OF FIRST OFFER
(a) First Offer Right. Tenant shall have the right of first offer during the
-----------------
initial Term of this Lease to lease the remainder of the third floor of the
------------------
Building other than the Leased Premises (the "First Offer Space") pursuant to
the following terms of this Schedule "O".
(b) Procedure for Offer. Landlord agrees that during the initial Term of this
-------------------
Lease, Landlord shall deliver written notice to Tenant (the "First Offer
Notice") prior to the first time Landlord intends to submit to a third party a
bonafide proposal to lease any portion of the First Offer Space to such third
party. The First Offer Notice shall describe the space so offered to Tenant
(including, without, limitation, Landlord's determination of the rentable square
footage thereof), and shall set forth the economic terms upon which Landlord is
willing to lease such space to Tenant, including without limitation (i) the
anticipated date on which the First Offer Space will be available for lease by
Tenant and the commencement date therefore, (ii) the Basic Rent for such First
Offer Space, and (iii) the term of the lease for such space, which shall be
conterminous with the Term for the remainder of the Leased Premises, unless
Landlord elects otherwise in the First Offer Notice (collectively, the "Economic
Terms").
(c) Procedure for Acceptance. On or before the date which is five (5) days
------------------------
after Tenant's receipt of the First Offer Notice (the "Election Date"), Tenant
shall deliver written notice to Landlord ("Tenant's Election Notice") pursuant
to which Tenant shall elect either to (i) lease the entire First Offer Space
described in the First Offer Notice upon the Economic Terms set forth in the
--------------
First Offer Notice and the same non-Economic Terms as set forth in this Lease;
(ii) refuse to lease such First Offer Space identified in the First Offer
Notice, specifying that such refusal is not based upon the Economic Terms set
forth by Landlord in the First Offer Notice, but upon Tenant's lack of need of
such First Offer Space in which event Landlord my lease such First Offer Space
to any person or entity on any terms Landlord desires and Tenant's right of
first offer with respect to the First Offer Space specified in Landlord's First
Offer Notice shall thereupon terminate and be of no further force or effect; or
(iii) refuse to lease the First Offer Space, specifying that such refusal is
based upon the Economic Terms set forth in the First Offer Notice, in which
event Tenant shall also specify in Tenant's Election Notice revised terms upon
-----
which Tenant shall be willing to lease such First Offer Space from Landlord;
provided, however, Tenant may not revise the lease term for such First Offer
Space specified by Landlord in the First Offer Notice. If Tenant does not so
respond in writing to Landlord's First Offer Notice by the Election Date, Tenant
shall be deemed to have elected the option described in clause (ii) above. If
Tenant timely delivers to Landlord Tenants' Election Notice pursuant to clause
(iii) above, Landlord may elect either to: (A) lease such First Offer Space to
Tenant upon the revised terms specified by Tenant in Tenant's Election Notice,
-----
and the same non-Economic Terms as set forth in this Lease; or (B) lease the
First Offer Space to any person or entity within six (6) months after the
Election Date upon any terms Landlord desires; provided, however, if the
Economic Terms of Landlord's proposed lease to said third party are more
favorable than those terms proposed by Tenant in Tenant's Election Notice,
--------------
before entering into such third party lease, Landlord shall notify Tenant of
such more favorable Economic Terms and Tenant shall have the right to lease the
First Offer Space upon such more favorable Economic Terms by delivering written
notice thereof to Landlord within two (2) days after Tenant's receipt of
Landlord's notice. If Tenant does not elect to lease such space from Landlord
within said two (2) day period, Tenant shall be deemed to have elected the
option described in clause (ii) above. If Tenant timely delivers to Landlord
Tenant's Election Notice pursuant to clause (iii) above, and Landlord elects to
proceed to lease the First Offer space to a third party pursuant to clause (B),
but fails to execute a lease with such third party tenant for any portion of the
First Offer Space within six (6) months after the Election Date, then within
thirty (30) days after the expiration of such six (6) month period, Landlord
shall deliver to Tenant a new First Offer Notice setting forth the Economic
---------
Terms upon which Landlord would be willing to lease the First Offer Space to
Tenant, and the foregoing procedures of the Schedule "O" shall again apply. If
Tenant leases any First Offer Space pursuant to this Schedule "O", Landlord and
Tenant shall promptly execute an amendment to this Lease covering the First
Offer Space and the lease terms thereof. Notwithstanding anything to the
contrary contained herein, Tenant must elect to exercise its rights of first
offer, if at all, with respect to all of the space offered by Landlord to Tenant
at any particular time, and Tenant may not elect to lease only a portion
thereof.
(d) Construction in First Offer Space. If Tenant leases the First Offer Space
---------------------------------
pursuant to the terms of this Schedule "O", Tenant shall take the First Offer
Space in its "AS-IS/WHERE-IS" condition "WITH ALL FAULTS" and without any
-------- ---------------
obligation on Landlord's part to contribute any tenant improvement allowance or
construct any tenant improvements therefor, unless otherwise specified in
Landlord's First Offer Notice.
(e) Suspension of Right of First Offer. At Landlord's option, Tenant shall not
----------------------------------
have the right to lease the First Offer Space as provided in this Schedule "O"
so long as Tenant, as of the date of the attempted exercise of any first offer
right by Tenant or as of the date of delivery of such First Offer Space to
Tenant, is in default under this Lease (beyond the expiration of the applicable
---------------------------------------
cure period, if any).
-------------------
(f) First Offer Right Personal to Tenant. Tenant's right of first offer set
------------------------------------
forth in this Schedule "O" is personal to, and shall only be exercised by, the
originally named Tenant under this Lease (and may not be exercised by any
assignee, subtenant or other transferee of Tenant's interest in this Lease or
the Leased Premises, but may be exercised by an Affiliate), and shall only be
------------------------------------
available if Tenant' is in actual possession and physical occupancy of the
entire Leased Premises.
SECOND AMENDMENT TO LEASE AGREEMENT
THIS AMENDMENT TO LEASE AGREEMENT made the 5th day of August, 1998.
BETWEEN:
THE MANUFACTURERS LIFE INSURANCE COMPANY (U.S.A.)
(hereinafter called "Landlord")
OF THE FIRST PART,
--- and ---
LIVEWORLD PRODUCTIONS, INC., A CALIFORNIA CORPORATION
(hereinafter called the "Tenant")
OF THE SECOND PART,
WHEREAS by a Lease Agreement made the 21st day of May 1997 and amended by that
Amendment to Lease Agreement dated the 8th day of May 1998 (collectively the
"Lease"), the Landlord leased to the Tenant the following premises:
Property: 000 Xxxxxxx Xxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx
00000 (Water Tower II)
Leased Premises: Xxxxxx 000, 000, 000, 000 xxx 000
Xxxx: five (5) year,
Basic Rent: $204,384.00 per annum
Tenant's Proportionate Share: eighteenth decimal eighty-five (18.85%)
AND WHEREAS THE Landlord and the Tenant have agreed to amend the Lease;
NOW WITNESSETH that in consideration of the rents, covenants and agreements
contained in the Lease, and in consideration of the covenants and agreements
hereinafter contained, and the sum of ONE DOLLAR ($1.00) now paid by each of the
parties to the other (the receipt and sufficiency of which is hereby
acknowledged), the Landlord and Tenant hereby agree to amend the Lease as
follows:
1) (i) Clause 1 of the Lease shall be amended by the addition of the
following:
"As of the 16th day of September 1998 (the "Effective Date") the
Leased Premises shall be deemed to consist of THIRTEEN THOUSAND NINE
HUNDRED TWENTY-TWO (13,922) rentable square feet and shall be known as
Suites 300, 302, 304, 350, 310 and 312."
(ii) Clause 3 Paragraph 3(a) of the Lease shall be amended by the
addition of the following:
"Commencing on the 16th day of September 1998 and continuing until the
31st day of December 1999, the Basic Rent shall be the sum of THREE
HUNDRED TEN THOUSAND FIVE HUNDRED AND 00/100 ($310,500.00) per annum
of lawful money of the jurisdiction in which the Leased Premises are
located, payable in equal month instalments. The monthly instalments
shall be TWENTY-FIVE THOUSAND EIGHT HUNDRED SEVENTY-FIVE AND 00/100
DOLLARS ($25,875.00) each in advance on the first day of each month
during the Term. The first amended payment to be made on the 16th day
of September 1998."
(iii) Schedule "K" of the Lease shall be amended by the addition of
the following:
"Commencing on the 1st day of January 2000 and continuing until the
31st day of December 2000, the Basic Rent shall be the sum of THREE
HUNDRED EIGHTEEN THOUSAND EIGHT HUNDRED SIXTY-FOUR AND 00/100 DOLLARS
($318,864.00) of lawful money of the jurisdiction in which the Leased
Premises are located, payable in equal month instalments. The monthly
instalments shall be TWENTY-SIX THOUSAND FIVE HUNDRED SEVENTY-TWO AND
00/100 DOLLARS ($26,572.00) each in advance on the first day of each
month during the Term. The first amended payment to be made on the 1st
day of January 2000."
(iv) Schedule "K-1" of the Lease shall be amended by the addition of
the following:
"As of the Effective Date Commencing on the 1st day of January 2001
and continuing until the 31st day of December 2001, the Basic Rent
shall be the sum of THREE HUNDRED TWENTY-SEVEN THOUSAND TWO HUNDRED
SIXTEEN AND 00/100 DOLLARS ($327,216.00) of lawful money of the
jurisdiction in which the Leased Premises are located, payable in
equal month instalments. The monthly instalments shall be TWENTY-SEVEN
THOUSAND TWO HUNDRED SIXTY-EIGHT AND 00/100 DOLLARS ($27,268.00) each
in advance on the first day of each month during the Term. The first
amended payment to be made on the 1st day of January 2001."
1
(v) Schedule "K-2" of the Lease shall be amended by the addition
of the following:
"As of the Effective Date Commencing on the 1st day of January 2002
and continuing until the 31st day of December 2002, the Basic Rent
shall be the sum of THREE HUNDRED THIRTY-FIVE THOUSAND FIVE HUNDRED
FIFTY-SIX AND 00/100 DOLLARS ($335,556.00) of lawful money of the
jurisdiction in which the Leased Premises are located, payable in
equal month instalments. The monthly instalments shall be TWENTY-SEVEN
THOUSAND NINE HUNDRED SIXTY-THREE AND 00/100 DOLLARS ($27,963.00) each
in advance on the first day of each month during the Term. The first
amended payment to be made on the 1st day of January 2002."
(vi) Schedule "K-3" shall no longer be in effect.
(vii) Clause 4 of the Lease shall be amended by the addition of the
following:
"The Tenant shall pay to the Landlord on execution of this Amendment
to Lease Agreement by the Tenant the sum of THREE THOUSAND ONE HUNDRED
TWENTY-SIX AND 00/100 DOLLARS ($3,126.00) as an additional deposit to
the Landlord upon the terms and conditions as hereinbefore provided."
(viii) Schedule C Clause 2 Paragraph 2 (d) and Schedule D Clause 7
shall be amended by the addition of the following:
"As of the Effective Date Tenant's Proportionate Share shall be
twenty-five decimal ninety-five percent (25.95%)."
(ix) Schedule F Clause 5 Paragraph 5(b) shall be amended by the
addition of the following:
"As of the Effective Date Landlord's Work shall include:
(a) Repaint Suites 302 using building standard materials (color to
match Suite 350).
(b) Recarpet Suites 310 and 312 using building standard materials
(color to match Suite 350).
2) As of the Effective Date, Schedule B1 - Outline of Additional Leased
Premises, attached hereto, shall form part of the Lease as if the same were
embodied therein.
3) The Landlord and the Tenant hereby confirm each to the other the
several covenants and agreements in the Lease as amended by this Amendment to
Lease Agreement.
4) This Amendment to Lease Agreement and everything herein contained
shall enure to the benefit of and be binding upon the respective heirs,
executors, administrators, successors, assigns and other legal representatives,
as the case may be, of each of the parties hereto, and every reference herein to
any party hereto shall include the heirs, executors, administrators, successors,
assigns and other legal representatives of such party, and where there is more
than one tenant or there is a male or female party, the provisions hereof shall
be read with all grammatical changes thereby rendered necessary and all
covenants shall be deemed joint and several.
IN WITNESS HEREOF the parties hereto have executed this Amendment to Lease
Agreement. I/We have authority to bind the corporation.
LANDLORD:
THE MANUFACTURERS LIFE INSURANCE
COMPANY
(U.S.A.)
/s/ Signature Illegible by Signature: /s/ Signature Illegible
Witness as to Name:
Signing by Landlord Title:
TENANT:
LIVEWORLD PRODUCTIONS, INC,
A CALIFORNIA CORPORATION
/s/ Signature Illegible by Signature: /s/ Signature Illegible
Witness as to Name:
Signing by Tenant Title:
2
