1
Exhibit 10.13
OFFICE BUILDING LEASE
0000 XXXXXXXX BUILDING
This instrument is dated for reference purposes only July 15, 1999.
1.1 Address of Premises: 0000 Xxxxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000 (Article 3)
1.2 Parties and Notice Addresses:
(a) Landlord: 0000 XXXXXXXX
c/o Zimmerman Investments
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
(b) Tenant: CYBERGOLD, INC., A CALIFORNIA CORPORATION
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
with a copy to:
Xxxxxxx X. Xxxxxxx
Xxxxxxx & Xxxxx
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000 (Article 2)
1.3 Rentable Area of Premises: Approximately 14,247 square feet
(Article 3)
1.4 Term: (a) Commencement Date: July 15, 1999
(b) For a term of: Thirty-Six (36) months (Article 4)
(c) Option to Extend for Sixty (60) months (Article 36)
1.5 Base Rent: $25,644.60 per month. (Article 6)
1.6 Security Deposit: $20,000.00 (Article 7)
1.7 Proportionate Share: 4.86 Percent (Article 8)
1.8 Broker: California Commercial Investments / Xxx Xxxxxxx (Tenant's
Representative) (Article 31)
1.9 Contents of Lease: Pages 1 through 30
Articles 1 through 36
Exhibits: A -- Rules & Regulations
B -- Floor Plan/Construction Obligations
C -- Acknowledgment of Commencement
--------------
Please Initial
1
2
OFFICE BUILDING LEASE
0000 XXXXXXXX BUILDING
This instrument is dated for reference purposes only July 15, 1999.
1.1 Address of Premises: 0000 Xxxxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000 (Article 3)
1.2 Parties and Notice Addresses:
(a) Landlord: 0000 XXXXXXXX
c/o Zimmerman Investments
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
(b) Tenant: CYBERGOLD, INC., A CALIFORNIA CORPORATION
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
with a copy to:
Xxxxxxx X. Xxxxxxx
Xxxxxxx & Xxxxx
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000 (Article 2)
1.3 Rentable Area of Premises: Approximately 14,247 square feet
(Article 3)
1.4 Term: (a) Commencement Date: July 15, 1999
(b) For a term of: Thirty-Six (36) months (Article 4)
(c) Option to Extend for Sixty (60) months (Article 36)
1.5 Base Rent: $25,644.60 per month. (Article 6)
1.6 Security Deposit: $20,000.00 (Article 7)
1.7 Proportionate Share: 4.86 Percent (Article 8)
1.8 Broker: California Commercial Investments / Xxx Xxxxxxx (Tenant's
Representative) (Article 31)
1.9 Contents of Lease: Pages 1 through 30
Articles 1 through 36
Exhibits: A -- Rules & Regulations
B -- Floor Plan/Construction Obligations
C -- Acknowledgment of Commencement
--------------
Please Initial
1
3
2. PARTIES. This lease (the "Lease"), is made by and between the landlord
whose name and notice address is specified in Section 1.2(a) (the "Landlord")
and the tenant whose name and notice address is specified in Section 1.2(b)
(the "Tenant").
3. PREMISES. Landlord leases to Tenant and Tenant hires from Landlord that
certain office space (the "Premises") indicated on Exhibit "B", said Premises,
being agreed, for the purpose of this Lease, to contain approximately the
rentable area specified in Section 1.3 and being situated within the building
specified in Section 1.1 which together with all improvements thereon and
appurtenances thereto, and the interest of Landlord, if any, in adjacent public
streets, is hereinafter referred to as the "Building". Landlord reserves the
exclusive right to the use of the exterior walls and exterior portions of the
Premises, the area beneath said Premises, and the area above said Premises. The
use thereof together with the right to install, maintain, use, repair, and
replace pipes, ducts, conduits, wires, and structural elements leading through
the Premises serving other parts of the Building are hereby reserved unto
Landlord. Such reservation in no way affects maintenance obligations imposed
herein.
As used herein, the term "rentable area" shall mean the following: (i) On a
single tenancy floor the area measured to the inside finish of the Building
exterior glass (or walls in the case of windowless exterior walls) with no
deductions for columns and projections, excluding emergency stairs, elevator
shafts and flues, and their enclosing walls, but including restrooms, air
conditioning rooms, fan rooms, janitor closets, telephone and electrical and
other utility closets, together with any floor penetrations exclusively serving
the Premises; (ii) on a multiple tenancy floor, the area measured to the inside
finish of the Building exterior glass (or walls in the case of windowless
exterior walls), to the corridor side of public corridors and/or other
permanent partitions and to the center of partitions which separate the
adjoining areas with no deductions for columns and projections or any floor
penetrations exclusively serving the Premises, excluding emergency stairs,
elevator shafts and flues together with a pro-rata share of Common Facilities
situated on such floor. Common Facilities shall include common corridors,
restrooms, air conditioning rooms, fan rooms, janitor closets, telephone and
electrical and other utility closets and other areas which service exclusively
that floor; (iii) Rentable area of the Premises shall also include its
allocable share of Building public areas, such being the portion of the first
two floors of the Building which be design and configuration are intended for
use by all occupants of the Building.
4. TERM.
a. Commencement Date. Subject to Section 4.b. hereof, the term of this
Lease shall commence on the date specified in Section 1.4(a) hereof (the
"Commencement Date") and shall be for the term specified in Section 1.4(b)
hereof, plus any partial month at the commencement of the term.
b. Acknowledgement of Commencement. After delivery of the Premises to
Tenant, Tenant shall execute a written acknowledgement of the date of
commencement in the form attached hereto as Exhibit "C" and by this reference
it shall be incorporated herein. In the event that the date identified as "Term
Commencement Date" depicted on Exhibit "C" hereof is different than the date
stated in Section 1.4(a) hereof, the Commencement Date of the Lease shall be
modified to the date depicted on Exhibit "C".
--------------
Please Initial
2
4
5. POSSESSION.
a. If the Landlord, for any reason whatsoever, cannot deliver possession
of the Premises to the Tenant at the commencement of the term hereof, this
Lease shall not be void or voidable, nor shall Landlord be liable to Tenant for
any loss or damage resulting therefrom, but in that event all rent shall be
abated during the period between the commencement of said term and the time
when Landlord delivers possession. Notwithstanding the foregoing, in the event
that Landlord is unable to deliver possession of the Premises to Tenant by
August 1, 1999, and such delay in delivery is not caused by Tenant, then Tenant
may terminate this lease upon written notice to Landlord, provided that such
notice is delivered prior to the time that possession of the Premises is
delivered to Tenant.
b. In the event that Landlord shall permit Tenant to occupy the Premises
prior to the commencement date of the term, such occupancy shall be subject to
all the provisions of this Lease. Said early possession shall not advance the
termination date hereinabove provided.
c. Health Systems Design Space. The parties hereto acknowledge and agree
that a portion of the Premises will continue to be leased from Landlord by, and
occupied by, Health Systems Design Corp. ("HSD") until and including October
31, 1999. That portion is identified as "Parcel A" on Exhibit B attached
hereto. Tenant shall not be permitted to occupy Parcel A until it is vacated by
HSD. Notwithstanding the foregoing, Tenant shall be permitted to share with HSD
the occupancy and use of that portion of Parcel A that is identified on Exhibit
B as the "Computer Room," subject to all other terms and conditions of this
Lease, and subject to a separate agreement between Tenant and HSD as to
Tenant's and HSD's operations within the Computer Room. Until HSD vacates
Parcel A, Tenant shall provide selected HSD personnel with such access
(including keys and/or key cards) as is necessary for such HSD personnel to
utilize and occupy Parcel A. Landlord shall deliver possession of Parcel A to
Tenant on or before November 1, 1999.
d. Substituted Premises. Commencing on the Commencement Date, and
continuing until such time as HSD vacates Parcel A, Tenant shall be permitted
to temporarily occupy and use those certain premises on the Fifth Floor of the
Building that are identified on Exhibit B as "Parcel B." Tenant's temporary
occupancy of Parcel B shall be subject to all terms and conditions of this
Lease that pertain to the Premises. Tenant's occupancy of Parcel B shall
terminate, and Tenant shall vacate Parcel B, at such time that Landlord
delivers possession of Parcel A to Tenant.
6. RENT.
a. Tenant agrees to pay to Landlord as rent, without prior notice or
demand, for the Premises the amount specified in Section 1.5, adjusted, in
accordance with the terms of the following paragraph, on or before the first
day of the first full calendar month of the term hereof and a like sum on or
before the first day of each and every successive calendar month thereafter
during the term hereof, except that the first month's rent shall be paid upon
the execution hereof. Rent for any period during the term hereof which is for
less than one (1) month shall be a prorated portion of the monthly installment
herein, based upon a thirty (30) day month. Said rent shall be paid to
Landlord, without deduction, offset, counterclaim, or except as otherwise
expressly provided herein notice or demand, in lawful money of the United
States of America, at the Office of the Building, or to such other
--------------
Please Initial
3
5
person or at such other place as Landlord may from time to time designate in
writing.
b. Effective as of the first day of the thirteenth (13th) and
twenty-fifth (25th) full calendar month of the initial term of this Lease, and
effective as of the first day of the thirteenth (13th) full calendar month of
the Option Period and each twelve (12) months thereafter, the base monthly
rent, exclusive of Tenant's share of Direct Expenses set forth in Article 8,
shall be increased by Three Percent (3%).
7. SECURITY DEPOSIT. Tenant has deposited with Landlord the sum specified in
Section 1.6. Said sum shall be held by Landlord as security for the faithful
performance by Tenant of all the terms, covenants, and conditions of this Lease
to be kept and performed by Tenant during the term hereof. If Tenant fails to
observe or perform any provision of this Lease, including, but not limited to,
the provisions relating to the payment of rent, Landlord may (but shall not be
required to) use, apply or retain all or any part of this security deposit for
the payment of any rent or any other sum, or for the payment of any amount
which Landlord may spend or become obligated to spend, or to compensate
Landlord for any other loss or damage which Landlord may suffer by reason of
Tenant's failure to observe and perform its obligations under this Lease. If
any portion of said deposit is so used or applied, Tenant shall within five (5)
business days after written demand therefor, deposit cash with Landlord in an
amount sufficient to restore the security deposit separate from its general
funds, and Tenant shall not be entitled to interest on such deposit. If Tenant
shall fully and faithfully observe and perform every provision of this Lease to
be observed and performed by it, the security deposit or any balance thereof
shall be returned to Tenant (or, at Landlord's option, to the last assignee of
Tenant's interest hereunder) as follows: (a) if all or a portion of the deposit
is reasonably necessary to repair damages or to clean the Premises, within
thirty (30) days after the later of: (i) the date Landlord receives possession
of the Premises, or (ii) the date of expiration or earlier termination of this
Lease, or (b) if Landlord claims the deposit only for the purpose of remedying
Tenant's default in the payment of rent, within ten (10) business days after
the later of: (i) the date Landlord receives possession of the Premises, or
(ii) the date of expiration or earlier termination of this Lease. Landlord may
deduct from the security deposit any amount owing by Tenant with respect to
Tenant's share of Direct Expenses applicable to the last year of the Lease term
(with such share prorated in the event that the term shall end on other than
December 31). In the event of termination of Landlord's interest in this Lease,
Landlord shall transfer said deposit to Landlord's successor in interest and
thereby be relieved of any obligation to return security deposit to Tenant.
8. OPERATING EXPENSE ADJUSTMENTS. For the purposes of this Article, the
following terms are defined as follows:
Base Year: 1999.
Comparison Year: Each calendar year of the term and any extension or
holding over thereof after the Base Year.
Direct Expenses: All costs of operation, ownership, repair, maintenance,
and replacement as determined by Landlord's standard accounting practices,
consistently applied generally among office tenants of the Building, including,
but not be limited to: real property taxes and
--------------
Please Initial
4
6
assessments; rent taxes and gross receipt taxes (whether assessed against the
Landlord or assessed against lessees and collected by the Landlord, or both);
depreciation on equipment, furnishings, fixtures and facilities serving the
Building; water and sewer charges; insurance premiums; utilities; costs of
maintaining, repairing, augmenting, replacing and re-routing telecommunications
cabling and ancillary equipment; janitorial services; security; labor; costs of
maintaining and repairing the exterior surfaces and roof of the Building; costs
incurred in the management of the Building; if any, air-conditioning and
heating; elevator and escalator maintenance and repair, and replacement of
components thereof in connection with such maintenance and repair; supplies;
materials; equipment; tools; and costs of maintenance, upkeep and repair of all
parking areas, storage areas and common areas (including but not limited to
lobbies, hallways, restrooms, sidewalks, landscaping and service areas).
Notwithstanding any other provision of this Article 8, Direct Expenses
shall not include:
(a) Depreciation, interest or amortization on mortgages or ground lease
payments.
(b) Real estate brokers' leasing commissions.
(c) Advertising and promotional expenses in connection with procuring
tenants.
(d) Initial leasehold improvements or alterations to tenant spaces.
(e) The cost of services directly to and provided for the sole benefit of
a specific tenant to the extent fully reimbursed to Landlord by such tenant.
(f) Costs of any items to the extent Landlord is reimbursed by insurance
proceeds. Insurance proceeds shall be excluded from Direct Expense in the year
in which they are received, except that any deductible amount under any
insurance policy shall be included within Direct Expenses.
(g) Legal and accounting expenses incurred in connection with procuring
tenants for the Building or enforcement of Building leases with a particular
tenant (in contrast to costs incurred for the benefit of the tenants in the
Building generally).
(h) Costs associated with the operating of the business of the legal
entity which constitutes Landlord as the same is separate and apart from the
cost and operation of the Building, including legal entity formation and
internal entity accounting and legal matters.
(i) Any late fees or penalties to the extent a sum of money is paid by
Landlord due to Landlord's negligence or willful misconduct (unless Landlord in
good faith disputes a charge and subsequently loses or settles that dispute).
(j) Any debt losses, rent losses, or reserves for bad debt.
(k) Costs arising from the removal of:
(1) Hazardous Materials (other than asbestos-containing materials),
as defined in Section 10.b., that was installed by Landlord, its agents, or
employees and that, at the time of installation, Landlord knew or should have
known was Hazardous Materials; or
(2) any Hazardous Materials (other than asbestos-containing
materials) in or about the Premises, Building, or Real Property (including
Hazardous Materials in the ground, water or soil) that was not placed in the
Premises, Building, or Real Property by Tenant.
--------------
Please Initial
5
7
(l) Costs associated with the testing for or analysis, handling, removal,
treatment, disposal, remediation, or replacement of asbestos or
asbestos-containing materials in or about the Premises, Building, or Real
Property that was not placed in or brought upon the Premises, Building or Real
Property by Tenant, to the extent that Tenant's proportionate share of such
costs when combined with items (m)(ii) and (iii) hereinbelow in a given
calendar year exceeds three percent (3%) of the rent payable by Tenant for such
year.
(m) Costs of structural or capital improvements unless made by the
Landlord to the Building (i) for the purpose of reducing Direct Expenses, (ii)
that are required by governmental law, ordinance, regulation or mandate, not
applicable to the Building at the time of the original construction, or (iii)
for Building security or tenant life safety; provided, however, that Tenant's
proportionate share of any costs that are passed through to Tenant per
subparts (ii) and (iii) above with respect to a given calendar year shall be
limited to three percent (3%) of the rent payable by Tenant for such year.
(n) All excess profits taxes, franchise taxes, gift taxes, capital stock
taxes, inheritance and succession taxes, estate taxes, federal and state income
taxes, and other taxes applied or measured by Landlord's general or net income
(as opposed to rents, receipts, or income attributable to operations at the
Building).
If the Direct Expenses paid or incurred by the Landlord for a Comparison
Year are in excess of the Direct Expenses paid or incurred for the Base Year,
then the Tenant shall pay the percentage specified in Section 1.7 of the
increase. This percentage is that portion of the total rentable area of the
Building occupied by the Tenant hereunder. Notwithstanding the foregoing,
Tenant's share of any increase in Direct Expenses during any one Comparison
Year shall not exceed Seven Percent (7%) of the rent payable by Tenant for such
year.
Starting on the first day of the first Comparison Year, Tenant shall pay
to Landlord as additional rent, monthly in advance on the first day of each
month one-twelfth (1/12th) of its share of annual Direct Expenses as estimated
by Landlord in advance, in good faith, provided, however, until such time as
Landlord provides an estimate, payments shall be made in amount of one-twelfth
of Tenant's prior year's share of Direct Expense, and further provided, if such
estimate when provided shows that in respect of elapsed months of Comparison
Year that Tenant has underpaid, Tenant shall pay Landlord the deficiency within
ten (10) business days following receipt of the estimate. Annually, as soon as
is reasonably possible after the expiration of each Comparison Year, Landlord
shall deliver to Tenant comparative statement setting forth (i) the Direct
Expenses paid or incurred for such Comparison Year, and (ii) Direct Expenses
paid or incurred for the Base Year. If the aggregate amount of payments made by
Tenant in any Comparison Year should be less than Tenant's share of Direct
Expenses for such year, then Tenant shall pay to Landlord as additional rent
within ten (10) days following receipt of comparison statement the amount of
such deficiency. If the aggregate amount payments made by Tenant in respect of
any Comparison Year of the term should be greater than the Tenant's share of
Direct Expenses for such year, then provided Tenant is not in default, the
amount of such excess will be applied by Landlord to the next succeeding
installments of Tenant's Direct Expenses payments due hereunder; and if there
is any such excess for the last year of the term, the amount thereof will be
------------------------
Please Initial
6
8
refunded by Landlord to Tenant within ten (10) business days, provided Tenant is
not in default under the terms of this Lease. However, at its option, Landlord
may xxxx annually, and in arrears in respect of Direct Expenses. Even though the
term has expired and Tenant has vacated the Premises, when the final
determination is made of Tenant's share of Direct Expenses for the year in which
this Lease terminates, Tenant shall immediately pay any amount due in respect of
Direct Expenses. Notwithstanding anything contained in this Article, the rent
payable by Tenant shall in no event be less than the rent specified in Article 6
hereinabove.
9. USE. Tenant shall use the Premises solely for executive, administrative and
marketing offices, for software design, development and engineering (excluding
manufacturing), and for the operation of Tenant's electronic commerce Internet
site (which shall not include a commercial Internet hardware "co-location"
business), and shall not use or suffer the Premises to be used for any other
purpose without Landlord's prior written consent, which consent shall not be
unreasonably withheld or delayed. Tenant shall not do or permit anything to be
done in or about the Premises nor bring or keep anything therein which will in
any way increase the existing rate of or affect any fire or other insurance upon
the Building or any of its contents, or cause cancellation of any insurance
policy covering said Building or any part thereof or any of its contents. Tenant
shall not do or permit anything to be done in or about the Premises which will
in any way obstruct or interfere with the rights of other lessees or occupants
of the Building or injure or annoy them or use or allow the Premises to be used
for any improper, immoral, unlawful or objectionable purpose, nor shall Tenant
cause, maintain or permit any nuisance in, on or about the Premises. Tenant
shall not commit of suffer to be committed any waste in or upon the Premises.
10. COMPLIANCE WITH LAW.
a. After the earlier to occur of (i) Tenant's possession of the
Premises, or (ii) the Commencement Date, Tenant shall, at its sole cost and
expense, comply with all legal and insurance requirements now in force, or which
may hereafter be in force, arising from Tenant's use, occupancy or alteration of
the Premises, and shall faithfully observe in the use of the Premises all legal
and insurance requirements now in force or which may hereafter be in force. The
judgment of any Court of competent jurisdiction, or the admission of Tenant in
any action or proceeding against Tenant, whether Landlord be a party thereto or
not, that Tenant has violated any such legal requirement pertaining to the
Premises, shall be conclusive of that fact as between Landlord and Tenant. The
term "legal requirements" includes all federal, state, county and municipal and
other governmental statutes, laws, rules, orders, permits, licenses,
regulations, ordinances, judgments, decrees, directions and injunctions
affecting the Premises or the Building or the use or occupancy thereof, whether
now or hereafter enacted or enforced ordinary or extraordinary, foreseen or
unforeseen. The term "insurance requirements" includes all requirements imposed
by the Insurance Services Office, underwriters, and the like precedent to
obtaining and maintaining the insurance specified in Section 17 at the lowest
rate applicable to office building use and occupancy. Any work which Tenant is
obligated to perform pursuant to this Article may, at Landlord's option, be
performed by Landlord for Tenant's account in accordance with the provisions of
Article 11 of this Lease.
------------------------
Please Initial
7
9
b. Hazardous Materials.
(i) For purposes hereof, "Hazardous Materials" shall mean any and
all flammable explosives, radioactive materials, hazardous waste, toxic
substances or related material, including but not limited to those materials
and substances defined as "hazardous substances", "hazardous materials",
"hazardous wastes" or "toxic substances" in the Environmental Laws. For
purposes hereof, "Environmental Laws" shall include the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C.
Section 9601 et seq.), the Hazardous Materials Transportation Act (39 U.S.C.
Section 1801 et seq.), the Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), the Federal
Clean Water Act (33 U.S.C. Section 1251 et seq.) and the Clean Air Act (42
U.S.C. Section 7401 et seq.), and any other federal, state or local laws,
ordinances, rules or regulations and amendments thereto and regulations
thereunder now in effect or hereinafter enacted that regulate or protect the
ambient air, atmospheric conditions, groundwater, aquifers, surface water,
drinking water supplies, land surface or subsurface strata or other
environmental conditions.
(ii) Tenant agrees that during the Term of this Lease Tenant shall
not be in violation of any federal, state or local law, ordinance or regulation
relating to industrial hygiene, soil, water, or environmental conditions on,
under or about the Premises or the Building including, but not limited to, the
Environmental Laws.
(iii) Tenant further agrees that during the Term of this Lease, there
shall be no use, presence, disposal, storage, generation, release, or
threatened release of Hazardous Materials on, from or under the Premises or the
Building.
(iv) Tenant shall, at its sole cost and expense, be responsible for
the removal and/or remediation (as set forth below) of all toxic or hazardous
materials brought upon, maintained or caused to be brought onto the Building or
the Premises by Tenant, its agents, licensees, employees, customers,
contractors or invitees. Remediation shall include both structural and
non-structural work and encompass inspection, monitoring, testing, contesting,
making safe, removing, and otherwise dealing with toxic or hazardous materials.
Further, in the event Tenant's generation, transportation, storage, release,
disposal or use of Hazardous Materials in, on, under or about the Premises or
the Building results in (a) contamination of the Premises, the Building, any
soil, subsoil, groundwater, surface water or ambient air, or (b) any loss,
injury, damage or contamination of the Premises, the Building or any other
property or injury or death to any persons, then Tenant agrees to respond in
accordance with the following. Tenant agrees (a) to notify Landlord immediately
of any claim of contamination, contamination, release, loss, injury, damage or
death or otherwise, (b) after consultation with and approval by Landlord (which
approval may be given or withheld in Landlord's sole and unfettered
discretion), Tenant shall, at its sole cost and expense, remove, clean up,
repair or revitalize, in full compliance with all Environmental Laws, any
contamination, loss, injury, damage or other problem, and (c) to indemnify,
defend and hold Landlord, its agents, servants and employees, harmless for,
from and against all claims, suits, actions, causes of action, costs,
professional fees, attorneys' fees, liabilities or obligations arising from or
connected with any such contamination or loss, injury or damage or
------------------------
Please Initial
8
10
otherwise. The provisions of this Section shall survive termination or
expiration of this Lease and shall continue thereafter.
c. Applicable Codes. Landlord and Tenant acknowledge that certain
governmental laws, ordinances, and regulations ("Governmental Codes") presently
in effect that would otherwise be applicable to the Building may not in fact
apply to the Building because they were not applicable at the time of its
original construction; however, to the extent that Governmental Codes are
currently applicable to the Building, Landlord represents, to the best of its
current actual knowledge, that the Premises are in compliance or that Landlord
is in the process of performing compliance work to meet applicable Governmental
Codes. Tenant shall not be required to perform any compliance work to meet
Governmental Codes generally applicable to the Building (and which are not
applicable by reason of Tenant's use, occupancy or alteration of the Premises)
that exist as of the Commencement Date.
11. ALTERATIONS AND ADDITIONS. Tenant shall not make or suffer to be made any
alterations, additions or improvements (collectively "alterations") to or of the
Premises or any part thereof without the prior written consent of Landlord,
which consent shall not be unreasonably withheld or delayed. The matters to
which consent may be arbitrarily withheld include the case of alterations which
in Landlord's good faith judgment might (a) affect the Building's utility
systems (including sprinkler, electrical, mechanical, telecommunications and
plumbing), (b) increase Tenant's utility requirements, (c) cost more than
twenty-five thousand dollars ($25,000) in any twelve month period (d) affect
fire-retardant materials, or (e) result in legal requirements or insurance
requirements not applicable to the Building at the time of its original
construction mandating additional alterations to be accomplished in the Premises
and/or the Building (as would be the case, for example, when the alteration that
Tenant seeks to accomplish would result in a loss of so-called
"grandfathering"). If (x) Tenant performs any alterations, whether Landlord
consent be required therefor or not, and whether such consent be granted or not,
and/or (y) Landlord performs alterations at Tenant's request, and as a result of
such alterations legal requirements or insurance requirements not applicable to
the Building at the time of its original construction mandate additional
alterations (the "Additional Alterations") to be accomplished in the Premises
and/or the Building (as would be the case, for example, when the alteration
requested by or performed by Tenant result in a loss of so called
"grandfathering") then such Additional Alterations, whether ordinary or
extraordinary, foreseen or unforeseen, substantial or not substantial,
structural or not structural, shall be performed by Landlord at Tenant's sole
cost and expense. In the event Landlord consents to the making of alterations to
the telecommunications cabling and ancillary equipment between (a) the
demarcation point with Tenant's customer provided telecommunications equipment
and (b) the demarcation point with the applicable local telephone company, as
both demarcation points are defined from time to time by the California Public
Utilities Commission and by Landlord (said cabling and ancillary equipment
hereinafter referred to as the "Intrabuilding Network Cabling"), said
alterations shall be performed by Landlord or a contractor designated by Tenant
subject to Landlord's approval, or Landlord's contractor in the case that the
Intrabuilding Network Cabling is managed by such contractor, at Tenant's sole
cost and expense. In the event Landlord consents to the making of alterations
and/or as the case may be Additional
-------------------------
Please Initial
9
11
Alterations are required, the alterations and Additional Alterations shall be
performed by Landlord for Tenant's account pursuant to plans and specifications
previously approved by Landlord and Tenant, and Tenant shall pay as additional
rent Landlord's cost thereof (including a reasonable charge for Landlord's
overhead and profit) prior to commencement of work, provided, however, if cost
of work is underestimated, Tenant shall reimburse Landlord a balancing amount
within ten (10) days following billing. The charge to Tenant shall include plan
preparation and all other costs incurred by Landlord prepatory to performing
the work of alteration, and whether approved plans are achieved or not. Any
alterations to or of said Premises, including, but not limited to, wall
covering, paneling and built-in cabinet work, but excepting movable furniture
and trade fixtures, shall on the expiration of the term become a part of the
realty and belong to the Landlord and shall be surrendered with the Premises.
However, Tenant shall ascertain from Landlord at least thirty (30) days prior
to the expiration or sooner termination of the term hereof, whether Landlord
desires the Premises, or any part thereof, restored to its condition prior to
the making of alterations, and if Landlord shall so desire, then Landlord,
during the final thirty (30) days of the Lease term, or at Landlord option,
after expiration of Lease term may remove any alterations, additions or
improvements made by or on behalf of Tenant, designated by Landlord to be
removed, and restore the Premises or the designated portions thereof as the
case may be, to its original condition and Tenant shall reimburse Landlord for
all reasonable costs incurred within ten (10) business days following billing.
All damage caused by the removal of trade fixtures, signs and other personal
property that Tenant is permitted to remove under the terms of this Lease shall
be repaired by Landlord, and Tenant shall reimburse Landlord all costs incurred
within ten (10) business days following billing.
Notwithstanding the foregoing, Landlord's prior consent shall not be
required for routine telecommunications wiring that can be accommodated through
and does not overburden the existing raceway distribution system, that does not
displace, disrupt or interfere with any other tenant's wiring, and that is
performed wholly within the Premises.
12. REPAIRS.
a. Except as provided by Exhibit B to this Lease, Tenant shall accept
the Premises in "as is" condition as of the date of execution of this Lease.
Tenant agrees that the Premises in such condition are in good, sanitary order,
condition and repair. Tenant shall, at Tenant's sole cost and expense, keep the
Premises and every part thereof in good condition and repair, damage covered by
Landlord's fire and extended coverage policy and ordinary wear and tear
excepted, and upon the expiration or sooner termination of this Lease shall
surrender the Premises to the Landlord in good condition, damage covered by
Landlord's fire and extended coverage policy and ordinary wear and tear
excepted. Further, Tenant shall pay to Landlord the cost of repairing or
replacing any interior or exterior glass panels caused in part or in whole by
the act of Tenant, its agents, servants, employees or invitees. Except as
specifically provided in Exhibit B to this Lease, Landlord has no obligation
whatsoever to alter, remodel, improve, repair, decorate or paint the Premises or
any part thereof and the parties hereto affirm that Landlord has made no
representations to Tenant respecting the condition of the Premises or the
Building except as specifically herein set forth.
------------------------
Please Initial
10
12
b. Notwithstanding the provisions of Section 12.a. hereinabove, Landlord
shall repair and maintain the roof, foundation, structural portions of the
Building, the Intrabuilding Network Cabling furnished by Landlord, and the basic
plumbing, air conditioning, heating, elevators and electrical systems, installed
or furnished by Landlord for the Building, unless such maintenance and repairs
are caused in part or in whole by the act, neglect, fault or omission of any
duty by the Tenant, its agents, servants, employees or invitees, in which case
Tenant shall pay to Landlord the reasonable cost of such maintenance and
repairs. Tenant waives the right to make repairs at Landlord's expense under any
law, statute or ordinance now or hereafter in effect inclusive of Civil Code
Sections 1941 and 1942 with respect to Landlord's repair duties and Tenant's
right to repair. Notwithstanding anything in this Lease to the contrary,
Landlord shall not in any way be liable to Tenant for failure to maintain or
repair are herein specifically required of its unless Tenant has previously
notified Landlord (notice shall comply with requirements of Section 30(3) of
this Lease) of the need for such maintenance and repairs and Landlord has failed
to commence and complete such repairs within a reasonable period of time
following receipt of such notice, provided, however, any residual liability of
Landlord shall nonetheless be subject to the provisions of Article 16 of this
Lease.
13. LIENS. Tenant shall keep the Premises and the property in which the
Premises are situated free from any liens arising out of any work performed,
materials furnished or obligations incurred by Tenant.
14. ASSIGNMENT AND SUBLETTING. The terms "Transfer of the Premises" or
"Transfer" as used herein shall include any assignment of all or any part of
this Lease (including assignment by operation of law), subletting of all or any
part of the Premises or transfer of possession, or right of possession or
contingent right of possession of the Premises including without limitation,
concession, mortgage, hypothecation, agency, franchise, or management agreement,
or to suffer any other person (the agents and servants of Tenant excepted) to
occupy or use the Premises or any portion thereof. If Tenant is a corporation
which is not deemed a public corporation, or is an unincorporated association or
partnership, the transfer, assignment or hypothecation of any stock or interest
in such corporation, association or partnership in the aggregate in excess of
twenty percent (20%) shall be deemed a Transfer of the Premises. Tenant shall
not Transfer the Premises or any part thereof without the prior written consent
of Landlord, which consent shall not be unreasonably withheld, provided,
however, Landlord may arbitrarily withhold consent to a sublease of less than
the entire Premises. Any Transfer without such consent shall at the option of
the Landlord be void, and/or shall constitute a default under this Lease. In the
event of a Transfer, the following shall apply: on a monthly basis, any sums of
money, or other economic consideration received by Tenant from the transferee in
such month (whether or not for a period longer than one month), including higher
rent, bonuses, key money, or the like (after deducting reasonable costs of
leasing commissions and tenant improvements directly related to, and spent by
Tenant with respect to, the Transfer of the Premises) which exceed, in the
aggregate, the total sums which Tenant pays Landlord under this Lease in such
month, or the prorated portion thereof if the Premises transferred is less than
the entire Premises, shall be payable fifty percent (50%) to Landlord and fifty
percent (50%) to Tenant, and Landlord's share shall be paid with Tenant's
payment of monthly rent. Tenant shall reimburse Landlord
11
13
as additional rent for Landlord's reasonable costs and attorney's fees incurred
in conjunction with the processing and documentation of any proposed Transfer
of the Premises, whether or not consent is granted.
Upon receiving request from Tenant for consent to a proposed Transfer (the
"Request for Consent"), but excluding a request for a sublease of less than
thirty-five percent (35%) of the area of the Premises, Landlord may, at its
sole option, elect to terminate this Lease by giving written notice to Tenant
("Transfer Termination Notice") within thirty (30) days following receipt of
the Request for Consent in which event this Lease shall terminate as to all
obligations thereafter accruing on the date specified in Landlord's notice
which in no event shall be later than one hundred twenty (120) days thereafter
unless within ten (10) days after the effective date of the Transfer
Termination Notice, Tenant by written notice to Landlord withdraws the Request
for Consent. The purpose of this paragraph is (x) to permit Landlord, at its
option, to terminate this Lease and relieve Tenant of continuing liability in
event of a proposed Transfer (y) to allow Landlord to select who will be the
next occupant of the Premises, and (z) to allocate to Landlord the opportunity
to profit from appreciation of rental if there has been an increase of rental
value of Premises. The parties acknowledge that Tenant has received
consideration from Landlord for the right of Landlord specified in this Section
and the Tenant acknowledges and agrees that Landlord would not have entered
into the Lease absent this right agreed to by Tenant herein. Tenant agrees that
it has entered into the Lease for the purpose of using the Premises for its own
purposes, so that if it no longer needs them it is reasonable for the Landlord
at its option to either (a) act reasonably on conveyance thereof to another or
(b) terminate the Lease. Tenant further acknowledges that Landlord right of
termination as aforesaid is in lieu of a Landlord right to participate in
profit (if any) resultant from a Transfer and Tenant prefers the termination
right as it relieves Tenant of continuing lease liability. Tenant waives the
provisions of Civil Code Section 1995.310 with respect to remedies available to
Tenant should Landlord fail to consent to a Transfer of the Premises.
If Landlord consents to a Transfer, the following conditions shall apply:
(a) No Transfer shall relieve Tenant of its primary obligation to pay the rent
and to perform all other obligations to be performed by Tenant hereunder. The
acceptance of rent by Landlord from any person shall not be deemed to be a
waiver by Landlord of any provision of this Lease or to be a consent to any
Transfer of the Premises. A consent to one Transfer of the Premises shall not
be deemed to be a consent to any subsequent Transfer of the Premises. If Tenant
defaults in the performance of any of the terms hereof, Landlord may proceed
directly against the transferor (or if there be more than one Transfer of the
Premises each transferor) without necessity of exhausting remedies against
Tenant. Landlord may consent to subsequent Transfers of this Lease or
amendments or modifications to this Lease with transferees, without notifying
transferor (or if there be more than one Transfer of the Premises each
transferor) and without obtaining its or their consent thereto and such action
shall not relieve any transferor of liability under this Lease as amended. (b)
If the Landlord consents to a sublease, such sublease shall not extend beyond
the expiration of the term of this Lease. (c) No Transfer shall be valid and no
transferee shall take possession of the Premises or any part thereof unless,
within ten (10) days after the execution thereof, Tenant shall deliver to
Landlord a duly executed duplicate original
12
14
of the Transfer instrument satisfactory to Landlord which provides that (i) the
transferee assumes Tenant's obligations for the payment of rent and for the
full and faithful observation and performance of the covenants, terms and
conditions contained herein, (ii) if a sublease, such transferee will, at
Landlord's election, attorn directly to Landlord in the event Tenant's Lease is
terminated for any reason on the terms set forth in the instrument of transfer
(limited in all events to the terms of this Lease).
Notwithstanding the foregoing provisions of this Article 14, Tenant may
assign the Premises, or any portion thereof, without Landlord's consent, to any
corporation which controls, is controlled by or is under common control with
Tenant, or to any corporation resulting from the merger or consolidation with
Tenant, or to any person or entity which acquires all the stock or assets of
Tenant as a going concern of the business that is being conducted consistent
with the use provisions of Section 9 above, provided that such action shall not
release any transferor of liability under this Lease, and said assignee assumes
in writing, in full, the obligations of Tenant under this Lease (hereafter each
a "Permitted Transfer".) Said written assumption of obligations shall be
delivered to Landlord within five (5) business days of any assignment occurring
under this paragraph. In addition, any sale or transfer of the capital stock of
Tenant shall be deemed a Permitted Transfer, and shall not affect this Lease,
if (1) such sale or transfer occurs in connection with any bona fide financing
or capitalization for the benefit of Tenant as a going concern of the business
that is being conducted on the Premises, or (2) Tenant becomes a publicly
traded corporation, or (3) such sale or transfer is made to any publicly traded
corporation as a going concern of the business that is being conducted on the
Premises.
15. HOLD HARMLESS. Articles 15 and 16 are written and agreed to in respect of
the intent of the parties to assign the risk of loss whether resulting from
negligence of the parties (whether active or passive) or otherwise, to the
party who may cover the risk of such loss with insurance. Landlord shall not be
liable for, and Tenant shall indemnify, defend and hold Landlord harmless from,
any claim, demand, liability, judgment, award, fine, mechanics lien, or other
lien, loss, damage, expense, charge, or cost of any kind or character
(including reasonable attorney's fees, costs of suit, investigation costs, and
discovery costs, including costs of appeal) arising directly or indirectly from
(a) any labor dispute involving Tenant or its contractors and agents or (b)
the construction, repair, alteration, improvement, use, occupancy, or enjoyment
of the Premises or any other portion of the Building by Tenant, Tenant's
assignees, and/or subtenants and their respective contractors, agents,
licensees, or invitees (including alterations approved of by Landlord), or (c)
any breach in the performance of any obligation on Tenant's part to be
performed under this Lease or (d) loss or impairment of services (including
telephone services) which the Intrabuilding Network Cabling (as defined in
Section 11 above) are intended to provide to the Premises or (e) injuries to
and/or death of persons and damages to property occurring on or about the
Premises (hereinafter collectively "Claims") including without limitation Claims
caused by the negligence (whether active or passive) of Landlord or that of its
officers, directors, employees, partners and agents, provided, however, Tenant
shall have no obligation to indemnify or defend and indemnify Landlord from
Claims caused by the indemnitee's gross negligence, deliberate misconduct or
criminal act. In the event any action, suit or proceeding is brought against
Landlord by reason of
13
15
any such occurrence, Tenant, upon Landlord's request will at Tenant's expense
resist and defend such action, suit or proceeding, or cause the same to be
resisted by counsel reasonably acceptable to Landlord.
Tenant releases Landlord, Landlord's authorized representatives and
Landlord's insurance designee, if any, from any claims for damage to any person
or to the Premises and the building and other improvements in which the
Premises are located, and to the fixtures, Tenant's personal property, and
improvements and alterations of Tenant, in or on the Premises and the building
and other improvements in which the Premises are located, including loss of
income, business or rents, that are caused by or result from loss or impairment
of services (including telephone services) which the Intrabuilding Network
Cabling (as defined in Section 11 above) is intended to provide, including that
no such loss or impairment shall give rise to a Tenant claim for constructive
eviction or rental abatement. The change at any time of the character of
Intrabuilding Network Cabling service shall in no wise make Landlord liable or
responsible to Tenant, for any loss, damages or expenses which Tenant may
sustain.
Wherever in Articles 15 and 16 the term Landlord is used and Landlord is
to receive the benefit of a provision contained, such term shall refer not only
to Landlord but also to its officers, directors, employees, partners and
agents, and if written notice be given to Tenant thereof others in interest,
such as without limitation any ground lessor, lender, or property manager
(including any employees thereof).
Notwithstanding the foregoing, Tenant shall not be required to hold
Landlord harmless from, or indemnify Landlord against, claims that are asserted
by employees of Health Systems Design Corp. ("HSD"), or by HSD, arising out of
HSD's use and occupancy of Parcel A as defined in Section 5.c. hereof, except
to the extent that such claims arise from the gross negligence or willful
misconduct of Tenant.
16. SUBROGATION. As long as their respective insurers so permit, Landlord and
Tenant hereby mutually waive their respective rights of recovery against each
other for any loss insured by fire, extended coverage, business interruption
and other property insurance policies existing for the benefit of the
respective parties. Each party shall obtain any special endorsements, if
required by their insurer to evidence compliance with the aforementioned waiver.
17. TENANT INSURANCE. Tenant shall, at Tenant's expense, obtain and keep in
force starting on the date it initially takes occupancy of the Premises and
continuing throughout the term of this Lease a policy of: (a) combined single
limit, bodily injury and property damage liability insurance insuring Landlord
and Tenant against any liability arising out of the ownership, use, occupancy
or maintenance of the Premises and all areas appurtenant thereto, the limits of
which shall not be less than one million dollars ($1,000,000) per occurrence,
(b) all risk property insurance including without limitation fire, theft,
sprinkler damage and malicious mischief covering all of Tenant's property from
time to time on or about the Premises in amount of not less than ninety (90%)
of its replacement cost with a deductible not in excess of $500.00, and (c)
business interruption insurance covering all loss and damage which Tenant may
suffer by reason of (i) the use of the Premises being lost or impaired by
reason of a fire, casualty or any of the other perils insurable under a policy
of all risk property insurance affecting the Premises or other portion of the
Building, or (ii) loss or impairment of
14
16
services (including telephone services) which the Intrabuilding Network Cabling
(as defined in Section 11 above) is intended to provide. The limit of said
liability insurance shall not limit the liability of the Tenant hereunder. Each
liability policy shall contain cross liability endorsements and shall insure
performance by the Tenant of the indemnity provisions of this Lease. Tenant may
carry any of said insurance under a blanket policy, providing Landlord's rights
hereunder are not diminished. If Tenant shall fail to procure and maintain any
of said insurance, Landlord may, but shall not be required to, procure and
maintain same, but at the expense of Tenant. All insurance required hereunder,
shall be in companies rated A/VIII or better in "Best's Insurance Guide". Tenant
shall deliver to Landlord prior to occupancy of the Premises copies of policies
of all insurance required herein or certificates evidencing the existence and
amounts of such insurance with loss payable clauses satisfactory to Landlord.
All policies shall provide that Landlord be notified in writing by the insurer
at least twenty (20) days prior to any cancellation or expiration of such
policy, or in the amounts of insurance carried.
18. SERVICES AND UTILITIES. Provided that Tenant is not in default hereunder
beyond any applicable cure period, Landlord agrees to furnish to the Premises
during the hours of 6:00 a.m. to 6:00 p.m. Monday through Friday (excluding
holidays) and 8:30 a.m. to 2:30 p.m. Saturday ("Building Hours"), and subject
to the rules and regulations of the Building of which the Premises are a part,
electricity for normal lighting, personal computers, printers, fax machines and
copy machines typically used in a professional office of the same size as the
Premises, and fractional horsepower office machines, heat and air conditioning
required in Landlord's good faith judgment for the comfortable use and
occupation of the Premises, and janitorial service. Janitorial service shall be
provided to the Premises five (5) days per week, excluding holidays, and
excluding those portions of the Premises as to which access is prevented by
Tenant (e.g., Tenant's vaults or the special security areas designated by
Tenant (such vault and security areas to be approved by Landlord so as to not
interfere with Landlord's access to the Building structure or utility systems))
During the term of this Lease, Landlord shall maintain the quality of said
janitorial service that is in effect as of the Commencement Date. Landlord shall
also maintain and keep lighted the common stairs, common entries and toilet
rooms in the Building of which the Premises are a part. Landlord shall not be
in default hereunder, or be liable for any damages directly or indirectly
resulting from, and Tenant shall not be entitled to, any reduction of rent by
reason of Landlord's failure to furnish any of the foregoing when such failure
is caused by accident, breakage, repairs, strikes, lockouts or other labor
disturbances or labor disputes of any character, or by any other cause, similar
or dissimilar, beyond the reasonable control of Landlord. Landlord shall not be
liable under any circumstances for a loss of or injury to property or
consequential damages, however occurring, through or in connection with or
incidental to failure to furnish any of the foregoing. Wherever heat generating
machines or equipment are used in the Premises which affect the temperature, or
if Premises alterations (whether consented to or performed by Landlord or not)
adversely affect Premises heating or cooling, Landlord reserves the right to
install supplementary climate control equipment and/or rebalance and the cost
thereof, including operation and maintenance shall be paid by Tenant to
Landlord upon demand by Landlord.
15
17
Tenant shall, at its sole cost and expense, provide, install (subject to the
provisions of Article 11), operate, maintain and repair Movin-Cool (or
equivalent) air conditioning units to the computer room. Tenant shall pay
Landlord, as additional monthly rent, Landlord's cost of all electric current
consumed for such use. Provided Tenant is not in default hereunder, if Tenant
shall require heating or air conditioning within the Premises during any times
other than Building Hours or days, Tenant shall notify Landlord in advance (no
later than 24 business hours prior) of its request for overtime heating or air
conditioning, and Tenant shall pay Landlord upon demand the amount of fifteen
dollars ($15.00) per hour (or Landlord's actual cost, whichever is less) for
fans only, and seventy-five dollars ($75.00) per hour (or Landlord's actual
cost, whichever is less) for heating or air conditioning within the Premises.
Tenant will not, without written consent of Landlord, use any apparatus or
device in the Premises, including, but without limitation thereto, electronic
data processing machines, punch card machines, and machines using in excess of
120 volts, which will in any way increase the amount of electricity usually
furnished or supplied for the use of the Premises as general office space; nor
connect with any electric current except through existing electrical outlets in
the Premises, any apparatus or device, for the purpose of using electric
current. If Tenant shall require water or electric current in excess of that
usually furnished or supplied for the use of the Premises as general office
space, Tenant shall first procure the written consent of Landlord, which shall
not be unreasonably withheld or delayed, to the use thereof, and Landlord may
cause a water meter or electrical current meter to be installed in the
Premises, so as to measure the amount of water and electric current consumed
for any such use, or may establish usage calculations by means of a consultant
selected by Landlord. The cost of any such consultants, or of any such meters
and of installation, maintenance and repair thereof, and the cost to provide
and install additional electrical equipment and/or to modify the existing
electrical system shall be at Tenant's sole cost and expense; and Tenant agrees
to pay to Landlord promptly upon demand therefor by Landlord for all such water
and electric current consumed as shown by said meters and/or consultants, at
the rates charged for such services by the local public utility furnishing the
same, plus any additional expense incurred in keeping account of the water and
electric current so consumed. Tenant shall have access to one or more of the
existing 208-volt receptacles located within the Premises for Tenant's
uninterrupted power supply as may be required for Tenant's use, subject to
Tenant's payment to Landlord, as additional monthly rent, for all electric
current consumed from said receptacles in excess of that usually consumed by
120-volt general office machines.
19. PROPERTY TAXES. Tenant shall pay, or cause to be paid, before delinquency,
any and all taxes levied or assessed and which become payable during the term
hereof upon all Tenant's leasehold improvements, equipment, furniture, fixtures
and personal property located in the Premises; except that which has been paid
for by Landlord, and is the standard of the Building. In the event any or all of
the Tenant's leasehold improvements, equipment, furniture, fixtures and personal
property shall be assessed and taxed with the Building, Tenant shall pay to
Landlord its share of such taxes within ten (10) days after delivery to Tenant
by Landlord of a statement in writing setting forth the amount of such taxes
applicable to Tenant's property.
16
18
20. RULES AND REGULATIONS. Tenant shall faithfully observe and comply with
the rules and regulations (including modifications thereof) that Landlord shall
from time to time promulgate generally as to all tenants of the Building.
Additions and modifications to rules shall be binding upon Tenant upon delivery
of a copy of them to Tenant. Landlord shall not be responsible to Tenant for
the nonperformance of any said rules by any other tenant or occupants. In the
event of a conflict between the terms of this Lease and the rules and
regulations, the terms of this Lease shall prevail.
21. HOLDING OVER. If Tenant remains in possession of the Premises or any part
thereof after the expiration or earlier termination of the term hereof, with
the express written consent of Landlord (which may be arbitrarily withheld) as
evidenced by acceptance of rent, such occupancy shall be a tenancy from month
to month at a rent in the amount of one hundred twenty-five percent (125%) of
the last monthly rent (inclusive of Direct Expenses), plus all other charges
payable hereunder, and upon all the terms hereof applicable to a month to month
tenancy.
22. ENTRY OF LANDLORD.
a. Entry. Without abatement of rent Landlord reserves and shall at
any and all times have the right (a) to enter the Premises, inspect the same,
supply janitorial services and any other service to be provided by Landlord to
Tenant hereunder, to submit said Premises to prospective purchasers or lessees,
to post notices of non-responsibility, and to improve, maintain and repair the
Premises (inclusive of any work mandated by the government) and (b) alter
(including reconfiguration of common area), improve and repair (inclusive of
any work mandated by the government) any portion of the Building that Landlord
may deem necessary or desirable, and may for that purpose erect scaffolding and
other necessary structures where reasonably required by the character of the
work to be performed, provided that Landlord shall endeavor not to unreasonably
interfere with the business of the Tenant. Tenant hereby waives any claim for
damages or for any injury or inconvenience to or interference with Tenant's
business, any loss of occupancy or quiet enjoyment of the Premises, and any
other loss occasioned. For each of the aforesaid purposes, Landlord shall at
all times have and retain a key with which to unlock all of the doors in, upon
and about the Premises, excluding Tenant's vaults, safes and files, and
Landlord shall have the right to use any and all means which Landlord may deem
proper to open said doors in an emergency, in order to obtain entry to the
Premises without liability to Tenant except for any failure to exercise due
care for Tenant's property. Any entry by Landlord for the purposes set forth in
this Article by any of said means, or otherwise shall not under any
circumstances be construed or deemed to be a forcible or unlawful entry into,
or a detainer of, the Premises, or an eviction of Tenant from the Premises or
any portion thereof. Except as provided in Article 23 hereof, there shall be no
abatement of rent and no liability of Landlord by reason of any injury to or
interference with Tenant's business arising from the making of any repairs,
alterations or improvements in or to any portion of the Building or the
Premises or in or to fixtures, appurtenances and equipment therein.
b. Restrictions on Entry. To the extent reasonably practicable,
Landlord shall exercise its rights under this Article 22 at such times and in
such a manner as to minimize the impact on Tenant's business in and occupancy
of the Premises. Except in an emergency, or where directed by governmental
authority, or when accompanied by an authorized representative of Tenant,
17
19
Landlord shall not enter Tenant's vaults or the special security areas
designated by Tenant (such vault and security areas to be approved by Landlord
so as to not interfere with Landlord's access to the Building structure or
utility systems).
c. Method of Entry. For entry as permitted by this Article 22,
Landlord shall at all times have a key or, if applicable, a card key with which
to unlock all the doors in the Premises, excluding Tenant's vaults, safes, and
special security areas designated by Tenant (such vault and security ares to be
approved by Landlord so as to not interfere with Landlord's access to the
Building structure or utility systems). In an emergency situation, or where
directed by governmental authority, Landlord shall have the right to use any
means that Landlord considers proper to open the doors in and to the Premises.
Any such entry into the Premises shall not be considered a forcible or unlawful
entry into, or a detainer of, the Premises or an actual or constructive
eviction of Tenant from any portion of the Premises.
d. Emergency Entry. Notwithstanding any other provision of this
Article 22, Landlord and Landlord's agents may enter the Premises without any
advance notice when necessary to address emergency situations, or where
directed by governmental authority. For purposes of this Article, an emergency
situation is one that Landlord reasonably believes poses a threat of imminent
bodily harm, property damage, property loss, or disruption or loss of
electrical or telecommunications services. If Landlord makes an emergency or
government-directed entry onto the Premises when no authorized representative
of Tenant is present, Landlord shall provide telephone notice (unless prohibited
by governmental mandate or restriction) to Tenant as soon as reasonably
possible within four (4) hours after entry (provided telephone service has not
been impaired) after that entry and shall take reasonable steps to secure the
Premises until a representative of Tenant arrives at the Premises.
e. Janitorial Entry. Landlord shall provide Tenant from time to time
of janitorial personnel who are authorized to perform janitorial work within
the Premises. Tenant shall provide a card key for each such authorized
janitorial worker, which cards shall be used to access those areas of the
Premises that are to be cleaned.
23. RECONSTRUCTION. In the event the Premises or the portion of the Building
necessary for Tenant's occupancy are damaged by fire or other perils, provided
that insurance proceeds sufficient to pay the cost of restoration of damage
will be available, Landlord agrees to forthwith repair the same subject to the
provisions of this Article hereinafter set forth; and this Lease shall remain in
full force and effect, except that Tenant shall be entitled to a proportionate
reduction of the rent while such repairs are being made, such proportionate
reduction to be based upon that fraction, numerator of which is the area of
Premises damaged and the denominator of which is the size of the Premises,
provided however, if the damage is due to the fault or neglect of Tenant or its
employees, reduction of rent shall be limited to the amount of any lost rents
insurance applicable to the Premises and collected by Landlord.
If the Premises are not restored within one hundred twenty (120) days
after the date of casualty, Tenant shall have the right, upon written notice to
Landlord, to immediately terminate this Lease, provided that such notice
18
20
is delivered to Landlord prior to the date upon which restoration of the
Premises is completed.
If, in Landlord's good faith opinion, (a) such repairs cannot be made
within ninety (90) days or (b) insurance proceeds sufficient to pay for such
work are not reasonably available, Landlord may elect, upon notice to Tenant
within sixty (60) days after the date of such fire or other casualty, to repair
or restore such damage, in which event this Lease shall continue in full force
and effect, but the rent shall be partially abated as hereinafter in this
Section provided. If Landlord does not so elect to make such repairs, this
Lease shall terminate as of the date of such fire or other casualty. Tenant
waives California Civil Code Sections 1932(2) and 1933(4) providing for
termination of hiring upon destruction of the thing hired. In the event the
Premises or the Building is destroyed to the extent of not less than ten
percent (10%) of replacement cost thereof, Landlord may elect to terminate the
Lease, whether the Premises be injured or not. Notwithstanding anything to the
contrary contained in this Article, Landlord shall not have any obligation
whatsoever to repair, reconstruct or restore the Premises when the damage
resulting from any casualty covered under this Article occurs during the last
twelve (12) months of the term of this Lease or any extension thereof. Landlord
shall not be required to repair any injury or damage by fire or other cause, or
to make any repairs or replacements of any panels, decoration, office fixtures,
railings, floor covering, partitions, or any other property installed in the
Premises by Tenant. Tenant shall not be entitled to any compensation or damages
from Landlord for loss of the use of the whole or any part of the Premises,
Tenant's personal property or any inconvenience or annoyance occasioned by such
damage, repair, reconstruction or restoration.
24. DEFAULT.
a. Tenant Default. As used in this Lease, the term "rent" means all
sums required to be paid by Tenant to Landlord under the terms of this Lease,
whether denominated as rent or not. The occurrence of any one or more of the
following events shall constitute a default and breach of this Lease by Tenant.
(i) The vacating or abandonment of the Premises by Tenant.
(ii) The failure by Tenant to make any payment of rent or any other
payment required to be made by Tenant hereunder within five (5) business days
of when due.
(iii) The failure by Tenant to observe or perform any of the
covenants, conditions or provisions of this Lease to be observed or performed
by the Tenant, other than described in Article 24.a.(ii) above, where such
failure shall continue for a period of thirty (30) days after written notice
thereof by Landlord to Tenant; provided, however, that if the nature of
Tenant's default is such that more than thirty (30) days are reasonably
required for its cure, then Tenant shall not be deemed to be in default if
Tenant commences such cure within said thirty (30) day period and thereafter
diligently prosecutes such cure to completion.
(iv) The making by Tenant of any general assignment or general
arrangement for the benefit of creditors; or the filing by or against Tenant of
a petition to have Tenant adjudged a bankrupt, or a petition or reorganization
or arrangement under any law relating to bankruptcy (unless, in the case of a
petition filed against Tenant, the same is dismissed within sixty (60) days);
or the appointment of a trustee or a receiver to take
19
21
possession of substantially all of Tenant's assets located at the Premises or
of Tenant's interest in this Lease, where possession is not restored to Tenant
within thirty (30) days; or the attachment, execution or other judicial seizure
of substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where such seizure is not discharged in thirty (30)
days.
(v) The default by Tenant, (or if Tenant be more than one, any
party named as Tenant) or by any person or entity which, directly or
indirectly, controls, is controlled by, or is under common control with Tenant
(or if Tenant be more than one, any thereof) under any other lease (including
any lease which has terminated or is to terminate in connection with Tenant's
occupancy of the Premises) with Landlord, or with any person or entity which is
affiliated with Landlord or which, directly or indirectly, controls, is
controlled by or is under common control with Landlord, or which is managed by
the managing agent utilized by Landlord for the Building.
b. Landlord Default. Landlord's failure to perform any of its
obligations under this Lease shall constitute a default by Landlord under the
Lease if the failure continues for thirty (30) days after written notice of the
failure from Tenant to Landlord. Notwithstanding the foregoing, if the required
performance cannot reasonably be completed within thirty (30) days Landlord's
failure to perform shall not constitute a default under the Lease if Landlord
undertakes to cure the failure within thirty (30) days and diligently and
continuously attempts to complete this cure as soon as reasonably possible.
c. Rent Abatement. If it is commercially unreasonable for Tenant to
use, and Tenant does not use, all or part of the Premises (the "Affected Area")
as a result of an Abatement Event, as defined in subsection 24d, then effective
as of the date upon which Tenant delivers to Landlord a notice notifying
Landlord of the Abatement Event and of Tenant's having ceased using the
Affected Area (the "Abatement Event Notice"), the Rent payable under this Lease
shall be abated or reduced on a daily basis for such time that Tenant, because
of such Abatement Event, continues to be prevented from using, and does not
use, the Affected Area, in the proportion that the Rentable Area of the
Affected Area bears to the total Rentable Area of the Premises, except as
otherwise provided in subsection 24d. Such abatement or reduction shall cease
as of the day after the date upon which the Abatement Event is cured.
d. Abatement Event. An "Abatement Event" is:
(i) Landlord's performance of or failure to perform any repair,
maintenance, or alteration that renders all or a portion of the Premises
untenantable, except where such repair, maintenance or alteration arises from
(A) the restoration of the Premises or Building as provided in Section 23, or
(B) Tenant's negligence or intentional tort;
(ii) Any failure of or interruption in utilities or services
required, pursuant to section 18 above, to be supplied by Landlord to the
Premises; except if such failure is caused by (A) Tenant's use of the utilities
in excess of that permitted under this Lease, or (B) Tenant's negligence or
intentional tort;
(iii) Any failure of Landlord to provide Tenant with access to the
Premises; except where such failure arises out of (A) an event of Tenant's
default specified in Section 24 of the Lease, (B) Tenant's negligence or
intentional tort; or
20
22
(iv) Tenant is prohibited from occupying the Premises or Building by
governmental mandate for health and/or safety reasons not arising from Tenant's
negligence or intentional tort.
(e) Termination. If it is commercially unreasonable for Tenant to use,
and Tenant does not use, the Premises, as a result of an Abatement Event, for
one hundred twenty (120) days after Landlord's receipt of an Abatement Event
Notice, Tenant may terminate this Lease, by giving written notice (the
"Termination Notice") to Landlord (such notice to be delivered prior to the
earlier of: (i) the date upon which the Abatement Event is cured, or (ii) the
date upon which Tenant re-occupies the Affected Area). In the event that Tenant
chooses to so terminate, it may at its option, which option shall be specified
in the Termination Notice, terminate as to either one of the following:
(i) The Affected Area, in which event the Rent payable by Tenant
shall be adjusted accordingly and the parties shall amend this Lease to reflect
the adjusted Base Rent; the adjusted Tenant's Proportionate Share; and the
adjusted Rentable Area of; or
(ii) The entire Premises.
The Termination Notice shall specify a date upon which the termination of
the Lease, as to the Affected Area or the entire Premises, shall be effective,
which date shall be not later than sixty (60) days after the date upon which
the Termination Notice is received by Landlord.
f. Conflicts. Subsections 24a-f shall control over any contrary
provision of this Lease, except Sections 15 ("Hold Harmless"), 23
("Reconstruction"), 30(14) ("Limitation Upon Landlord") and 30(21) ("Mortgagee
Protection").
25. REMEDIES IN DEFAULT. In the event of Tenant default, Landlord may at any
time thereafter, with or without notice or demand and without limiting Landlord
in the exercise of a right or remedy which Landlord may have by reason of such
default:
a. Terminate Tenant's right to possession of the Premises by any lawful
means, in which case this Lease shall terminate and Tenant shall immediately
surrender possession of the Premises to Landlord. In such event, Landlord shall
be entitled to recover from Tenant (a) the worth at the time of the award of
the unpaid rent which had been earned at the time of such termination; (b) the
worth at the time of award of amount by which the unpaid rent which would have
been earned after termination until the time of award exceeds the amount of
such rent loss that Tenant proves could have been reasonably avoided; (c) the
worth at the time of award of the amount by which the unpaid rent for the
balance of the term of this Lease after the time of award exceeds the amount of
such rent loss that Tenant proves could be reasonably avoided; and (d) any
other amount necessary to compensate Landlord for all the detriment proximately
caused by Tenant's failure to perform its obligations under this Lease or which
in the ordinary course of things would be likely to result therefrom. The
"worth at the time of award" of the amounts referred to in clauses (a) and (b)
above is computed by allowing interest at the rate of ten percent (10%) per
annum, or, if a higher rate is legally permissible, at the highest rate legally
permitted. The "worth at the time of award" of the amount referred to in clause
(c) above 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%). Damages recoverable by Landlord shall include, but not limited to,
expenses of
21
23
reletting, including necessary renovation and alteration of the Premises, any
real estate commission actually paid, and that portion of the leasing
commission paid by Landlord and applicable to the unexpired term of this Lease.
b. Maintain Tenant's right to possession, in which case this Lease shall
continue in effect whether or not Tenant shall have abandoned the Premises. In
such event Landlord shall be entitled to enforce all of Landlord's rights and
remedies under this Lease, including the right to recover the rent as it
becomes due hereunder. Acts of maintenance or preservation or efforts to relet
the Premises or the appointment of a receiver upon initiative of Landlord to
protect Landlord's interest under this Lease shall not constitute a termination
of Tenant's right to possession.
c. Pursue any other remedy now or hereafter available to Landlord under
the laws or judicial decisions of the State in which the Premises are located.
d. Tenant waives any right of redemption or reinstatement of Lease under
any present or future case law or statutory provision (including Code of Civil
Procedures Sections 473 and 1179, and Civil Code Section 3275) in the event
Tenant is dispossessed from the Premises for any reason. This waiver applies to
future statutes enacted in addition or in substitution to this statute
specified herein.
e. If the Tenant shall fail to pay any sum of money, required to be paid
by it hereunder or shall fail to perform any other act on its part to be
performed hereunder and such failure shall have become an event of default as
provided herein, the Landlord may, but shall not be obligated to do so, and
without waiving or releasing the Tenant from any such obligation, make such
payment or perform any such other act on the Tenant's part to be made or
performed as provided herein. All sums so paid by the Landlord and all
necessary incidental costs shall be deemed additional rent hereunder and shall
be payable to the Landlord immediately.
f. Notwithstanding anything to the contrary in this Section 25, in the
event that Tenant is in default and the Premises are vacated or abandoned by
Tenant, Landlord shall act commercially reasonably with respect to efforts to
re-lease the Premises.
26. EMINENT DOMAIN. If more than twenty-five (25%) percent of the Premises
shall be taken or appropriated by any public or quasi-public authority under
the power of eminent domain, either party hereto shall have the right, at its
option, to terminate this Lease, and Landlord shall be entitled to any and all
income, rent, award, or any interest therein whatsoever which may be paid or
made in connection with such public or quasi-public use or purpose, and Tenant
shall have no claim for the value of any unexpired term of this Lease. If
either less than or more than twenty-five (25%) percent of the Premises is
taken, and neither party elects to terminate as herein provided, the rent
thereafter to be paid shall be equitably reduced. If any part of the Building
other than the Premises may be so taken or appropriated, Landlord shall have
the right at its option to terminate this Lease and shall be entitled to the
entire award as above provided. Tenant waives the provisions of Code of Civil
Procedure Section 1265.130, allowing either party to petition the Superior
Court to terminate this Lease in the event of a partial taking of the Premises
by condemnation.
--------------
Please Initial
22
24
27. OFFSET STATEMENT AND FINANCE. Tenant shall at any time and from time to
time within ten (10) days following notice from Landlord execute, acknowledge,
and deliver to Landlord a certificate certifying that (a) this Lease is
unmodified and in full force and effect (or, if modified, stating the nature of
such modification and certifying that this Lease as so modified is in full
force and effect), (b) the date to which the rent and other sums payable
hereunder have been paid, (c) that there are no uncured defaults on the part of
the Landlord hereunder, or specifying such defaults if any are claimed, and (d)
such other matters as may be reasonably requested by Landlord. Any such
statement may be relied upon by any prospective purchaser or encumbrancer of
all or any portion of the Building. If Landlord desires to finance or refinance
the Premises or the Building, or any part thereof, Tenant shall deliver to any
lender designated by Landlord such financial statements of Tenant as may be
reasonably required by such lender.
28. PARKING. Tenant is authorized in common with others authorized by Landlord
to use the parking facilities of the Building, if any, subject to the monthly
parking rates, rules and regulations, and any other charges of Landlord, or any
operator for such parking facilities which may be established or altered by
Landlord or the operator at any time or from time to time during the term
hereof.
29. AUTHORITY OF PARTIES. The individual(s) executing this Lease on behalf of
Tenant warrant that each has been duly authorized to execute and deliver this
Lease on behalf of and by Tenant and that by delivery hereof each warrants that
execution by no other signatory is necessary to bind Tenant and that each will
indemnify and defend Landlord from any claim to the contrary, or loss suffered
by reason thereof.
30. GENERAL PROVISIONS.
(1) Plats and Riders. Clauses, plats and riders, if any, signed by the
Landlord and the Tenant and endorsed on or affixed to this Lease are a part
hereof.
(2) Waiver. The waiver by Landlord of any term, covenant or condition
herein contained shall not be deemed to be a waiver of such term, covenant or
condition on any subsequent breach of the same or any other term, covenant or
condition herein contained. The subsequent acceptance of rent hereunder by
Landlord shall not be deemed to be a waiver of any preceding breach by Tenant
of any term, covenant or condition of this Lease, other than the failure of the
Tenant to pay the particular rent so accepted, regardless of Landlord's
knowledge of such preceding breach at the time of the acceptance of such rent.
(3) Notices. All notices and demands, requests, consents, approvals,
authorizations, offers, appointments or designations under this Lease by either
party to the other (collectively "notices") shall be given in writing, (1)
personally to an officer or director of such party, (2) by depositing same in
the United States mail, postage prepaid, certified mail, return receipt
requested or (3) by reputable air courier service which provides written
evidence of delivery, directed to the addresses for the parties as specified
herein, or at such other place as either party may from time to time designate
in a notice to the other party. Notices shall be deemed effective (a) upon
receipt if personally delivered; (b) seventy-two (72) hours after properly
deposited in the United States mail if sent by certified mail; and (c)
twenty-four (24) hours after delivery to a courier service if
--------------
Please Initial
23
25
the notice is by air courier service. Initial notices addresses are as
specified in Section 1.2.
(4) Joint Obligation. If there be more than one Tenant the obligations
hereunder imposed upon Tenants shall be joint and several.
(5) Marginal Headings. The marginal headings and Article titles to the
Articles of this Lease are not a part of this Lease and shall have no effect
upon the construction or interpretation of any part hereof.
(6) Time. Time is of the essence of this Lease.
(7) Successors and Assigns. The covenants and conditions herein
contained, subject to the provisions as to assignment, apply to and bind the
heirs, successors, executors, administrators and assigns of the parties hereto.
(8) Recordation. Tenant shall not record this Lease.
(9) Quiet Possession. Upon Tenant paying the rent reserved hereunder and
observing and performing all of the covenants, conditions and provisions on
Tenant's part to be observed and performed hereunder, Tenant shall have quiet
possession of the Premises for the entire term hereof, subject to (a) all the
provisions of this Lease, and (b) the effect of any covenants, conditions,
restrictions, easements, mortgages, deeds of trust, under leases, ground
leases, and any other matters or documents of record or of which Tenant has
knowledge.
(10) Late Charges. Tenant hereby acknowledges that late payment by Tenant
to Landlord of rent or other sums due hereunder will cause Landlord to incur
costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges, and late charges which may be imposed upon
Landlord by terms of any mortgage or trust deed covering the Premises.
Accordingly, if any installment of rent or of a sum due from Tenant shall not
be received by Landlord or Landlord's designee within ten (10) days after such
amount is due, then Tenant shall pay to Landlord a late charge equal to five
percent (5%) of such overdue amount. The parties hereby agree that such late
charges represent a fair and reasonable estimate of the cost that Landlord will
incur by reason of the late payment by Tenant.
(11) Prior Arrangements. This Lease contains all of the agreements of the
parties hereto with respect to any matters covered or mentioned in this Lease,
and no prior agreements or understandings pertaining to any such matters shall
be effective for any purpose. Landlord has made no representations inclusive of
those concerning (a) the condition of the Premises or the Building or (b) their
compliance with governmental requirements except, if at all as stated in this
Lease. No provision of this Lease may be amended or added to except by an
agreement in writing signed by the parties hereto or their respective
successors in interest. This Lease shall not be effective or binding on any
party until fully executed by both parties hereto.
(12) Inability to Perform. Except as provided in Article 5 above, this
Lease and the obligations of the Tenant hereunder shall not be affected or
impaired because the Landlord is unable to fulfill any of its obligations
hereunder or is delayed in doing so, if such inability or delay is caused by
reason of strike, labor troubles, acts of God, work required by the government,
insurers and/or lenders, or any other cause beyond the reasonable control of
the Landlord.
(13) Attorney's Fees. In the event of any action or proceeding brought by
either party against the other under this Lease, the prevailing party
--------------
Please Initial
24
26
shall be entitled to have and recover reasonable attorney's fees, costs of
suit, investigation costs and discovery costs, including costs of appeal.
(14) Limitation Upon Landlord. If during the term of this Lease, Landlord
shall sell or assign its interest in the Building, or the Premises, then from
and after the effective date of sale, Landlord shall be released and discharged
from any and all obligations and responsibilities under this Lease. If Landlord
is in default of this Lease, and as a consequence Tenant recovers a money
judgement against Landlord, the judgement shall be satisfied only out of the
proceeds of sale received on execution of the judgement and levy against the
right, title and interest of the Landlord in the Building, and out of the rent
or other income from such real property receivable from the Landlord or out of
the consideration received by Landlord from the sale or other disposition of
all or any part of Landlord's right, title and interest in the Building.
Neither the Landlord nor any of the partners comprising the partnership
designated as Landlord (if Landlord is a partnership) or any of the co-tenants
(if Landlord be a tenancy in common) or the officers or directors thereof (if
Landlord be a corporation) shall be personally liable for any deficiency.
(15) Subordination, Attornment. This Lease, at Landlord's option, shall be
subordinate to any mortgage, deed of trust, ground lease or any other
hypothecation for security now or hereafter placed upon the Building, and to
all advances made on the security therefor and to all renewals, modifications,
consolidations, replacements and extensions thereof. However, if any mortgagee,
trustee or ground lessor shall elect to have this Lease prior to the lien of
its mortgage, deed of trust, or ground lease, and shall give written notice
thereof to Tenant, this Lease shall be deemed prior to such mortgage, deed of
trust or ground lease, whether this Lease is dated prior or subsequent to the
date of said mortgage, deed of trust or ground lease or the date of recording
thereof. Tenant agrees to execute any documents required to effectuate such
subordination or to make this Lease prior to the lien of any mortgage, deed of
trust or ground lease, as the case may be. The provisions of this Article to
the contrary notwithstanding, and so long as Tenant is not in default
hereunder, this Lease shall remain in full force and effect for the full term
hereof. Tenant shall attorn to any purchaser at any judicial foreclosure sale,
or non-judicial trustee's sale, or to any grantee or transferee designated in
any Deed given in lieu of foreclosure upon request of such purchaser or
transferee.
(16) Name. Tenant shall not use the name of the Building or of the
development in which the Building is situated for any purpose other than as an
address of the business to be conducted by the Tenant in the Premises.
(17) Severability. Any provision of this Lease which shall prove to be
invalid, void or illegal shall in no way affect, impair or invalidate any other
provision hereof and such other provision shall remain in full force and effect.
(18) Cumulative Remedies. The various rights, options, election powers,
and remedies of Landlord contained in this Lease shall be construed as
cumulative and no one of them exclusive of any others or of any legal or other
remedy which Landlord might otherwise have in the event of breach of default,
and the exercise of one right or remedy by Landlord shall not in any way impair
its right to any other right or remedy.
(19) Choice of Law. This Lease shall be governed by the laws of the State
in which the Premises are located.
--------------
Please Initial
25
27
(20) Signs and Auctions. Tenant shall not place or suffer to be placed or
maintained on the Premises or the Building any interior or exterior sign,
advertisement, decoration, marquee or window covering or awning that is visible
from the exterior of the Premises without the prior written consent of Landlord
which Landlord reserves the right to withhold in its sole judgment. Use of
Premises for auctions is prohibited.
(21) Mortgagee Protection. Tenant agrees to give any Mortgagee(s) and/or
Trust Deed Holders, by Registered Mail, a copy of any Notice of Default served
upon the Landlord, provided that prior to such notice Tenant has been notified,
in writing (by way of Notice of Assignment of Rents and Lease, or otherwise),
of the address of such Mortgagees and/or Trust Deed Holders. Tenant further
agrees that if Landlord shall have failed to cure such default within the time
provided for in this Lease, then the Mortgagees and/or Trust Deed Holders shall
have an additional thirty (30) days within which to cure such default or if
such default cannot be cured within that time, then such additional time as may
be necessary if within such thirty (30) days, and Mortgagee and/or Trust Deed
Holder has commenced and is diligently pursuing the remedies necessary to cure
such default (including but not limited to commencement of foreclosure
proceedings, if necessary to effect such cure), in which event this Lease shall
not be terminated while such remedies are being so diligently pursued. The
voluntary or other surrender of this Lease by Tenant, or a mutual cancellation
thereof, shall not work as a merger, and shall, at the option of Landlord,
terminate all or any existing subleases or subtenancies, or may, at the option
of Landlord, operate as an assignment to Landlord of any or all such subleases
or subtenancies.
(22) Accord and Satisfaction. No payment by Tenant or receipt by Landlord
of a lesser amount of rent than due, shall be deemed to be other than on
account of the earliest due rent, nor shall any endorsement or statement on any
check or any letter accompanying any such check or payment be deemed an accord
and satisfaction, and Landlord may accept such check or payment without
prejudice to Landlord's right to recover the balance of such rent or payment or
pursue any other remedy.
(23) Interest. In the event any rent is not paid promptly when due, such
rent shall bear interest at the rate of ten percent (10%) per annum.
(24) Lease to be Signed. The preparation and submission of a draft or
execution copies of this Lease by either party to the other shall not
constitute an offer nor shall either party be bound to any of the terms of this
Lease or the entirety of the Lease itself until both parties have fully
executed a final document and an original signature document has been received
by both parties. Until such time as described in the previous sentence, either
party is free to terminate any agreements (whether in writing or oral) with no
obligation to the other.
(25) Survival. All Tenant obligations (including without limitation
liability to (a) indemnify and defend Landlord in respect of events occurring
during the Lease term, (b) make payments to Landlord in respect of accrued
charges (including those which have not yet been billed) and (c) to make
repairs (inclusive of those relating to return of Premises to Landlord) which
are accrued at the expiration or earlier termination of this Lease shall
survive the expiration or earlier termination of this Lease, provided however,
following return of Premises to Landlord, Landlord may perform
--------------
Please Initial
26
28
accrued but undischarged Tenant obligations and Tenant will reimburse Landlord
for all costs in good faith incurred.
31. BROKERS. Tenant warrants that it has had no dealing with any real estate
broker or agent in connection with the negotiation of this Lease excepting only
the broker named in Section 1.8, and it knows of no other real estate broker or
agent who is entitled to a commission in connection with this Lease. In the
event any claim is made for brokerage commissions, finder's fees or similar
compensation by any person or entity other than the broker named in Section 1.8
as the result of acts or action of Tenant, Tenant hereby agrees to, and shall
indemnify and hold Landlord harmless for, from and against all such claims,
including costs, expenses and attorneys fees incurred by Lessor in connection
with any such claim.
32. INTENTIONALLY OMITTED.
33. EARLY TERMINATION. Tenant shall have the one-time right to terminate this
Lease effective at any time between the end of the sixteenth (16th) and the end
of the twenty-fourth (24th) full calendar months after the Commencement Date of
this Lease (the "Early Termination Date") subject to all of the following
conditions:
a. Tenant shall not have been habitually in default, and shall not have
defaulted with respect to any material term or condition of the Lease, and such
default is beyond the expiration of any applicable cure period as of the date
Tenant exercises said option;
b. Tenant shall notify Landlord in writing no less than ninety (90) days
prior to the Early Termination Date ("Termination Notice");
c. As of the Early Termination Date, this Lease shall terminate as to
all obligations accruing thereafter; and
d. In the event Tenant does not exercise said right to terminate in the
specific manner set forth in this Section 33, then this Lease shall not
terminate, and all of Tenant's rights under this Section 33 shall expire and be
null and void.
34. RIGHT OF FIRST REFUSAL. In the event that Landlord receives an acceptable
bona fide offer from a third party (a "Third Party Offer") to lease space on
the thirteenth (13th) or fourteenth (14th) floors of the Building (such space
as to which an offer shall have been received being referred to herein as the
"Expansion Space"), then Landlord shall notify Tenant in writing (the
"Expansion Notice") of the terms of the proposed offer to lease and shall give
Tenant the right to lease the Expansion Space on the same terms contained in
the proposal. Such right must be exercised by Tenant in writing within five (5)
business days following receipt by Tenant of the Expansion Notice, provided
that:
a. If Tenant shall have been in habitual default or shall have defaulted
with respect to any material term or condition of the Lease, and such default
is beyond the expiration of any applicable cure period as of the date Tenant
exercises said option, then this paragraph shall be void and of no further
force and effect, and,
b. The right granted herein is personal to the original Tenant executing
this Lease, or to the recipient of a Permitted Transfer, and notwithstanding
anything to the contrary in the Lease, the rights contained in this paragraph
are not assignable or transferable by such original Tenant, and,
c. Landlord grants the rights contained in this paragraph in
consideration of Tenant's strict compliance with the provisions hereof,
27
29
including without limitation, the manner of timing and exercise of such right,
and,
d. Tenant shall execute a lease amendment which depicts the same terms
contained in the Expansion Notice not later than five (5) business days
following its receipt thereof, and,
e. In the event Tenant does not exercise its right of first refusal or
execute a lease amendment within the time period provided hereinabove, then all
of Tenant's rights pursuant to this paragraph with respect to the particular
Expansion Space shall lapse and forever terminate.
35. OPTION TO EXPAND. Tenant shall have the option to lease the following
parcels within the Building, upon the same terms and conditions, including
rental rate, that apply to the Premises: (a) Suite 1426 on the 14th Floor,
consisting of approximately 6,595 square feet, and/or Suite 1410 on the 14th
Floor, consisting of approximately 3,463 square feet, or (b) such parcel of
space on the 13th Floor as shall be mutually approved by Landlord and Tenant,
or (c) all rentable space on the 13th Floor, consisting of approximately 14,247
square feet (the "Option Space(s)"). Such space as to which Tenant exercises
such option shall be referred to herein as the "Option Space." Such right must
be exercised by Tenant in a writing delivered to Landlord (the "Option
Notice"), and shall be subject to all of the following conditions:
a. The Option Notice must be delivered to Landlord prior to the
earlier of: (i) the ninetieth (90th) day after the Commencement Date, or (ii)
the date upon which Landlord receives a Third Party Offer (as defined in
Section 34 above) as to any of the Expansion Space(s), and,
b. The effective date for the lease of the Option Space(s) shall be
the earlier to occur of: (i) November 1, 1999, or (ii) the date upon which
Tenant accepts possession of the Option Space(s), and,
c. If Tenant shall have defaulted with respect to any of the terms and
conditions of the Lease, and such default is beyond the expiration of any
applicable cure period as of the date Tenant exercises said option, then this
paragraph shall be void and of no further force and effect, and,
d. The right granted herein is personal to the original Tenant
executing this Lease, and notwithstanding anything to the contrary in the
Lease, the rights contained in this paragraph are not assignable or
transferable by such original Tenant, and,
e. Landlord grants the rights contained in this paragraph in
consideration of Tenant's strict compliance with the provisions hereof,
including without limitation, the manner of timing and exercise of such right,
and,
f. Tenant shall execute a lease amendment which adds the Option
Space(s) to the Premises not later than five (5) business days following its
receipt thereof, and,
g. In the event Tenant does not deliver an Option Notice within the
time period set forth in Section 35.a. above, or does not execute a lease
amendment within the time period provided in Section 35.f. above, then all of
Tenant's rights pursuant to this paragraph shall lapse and forever terminate.
36. OPTION TO EXTEND TERM.
a. Option. Tenant shall have the right to extend the initial term
hereof for One (1) additional consecutive period of Sixty (60) months ("Option
Period"), commencing immediately upon the expiration of the initial term
hereof, upon the same terms and conditions as are stated in this Lease
28
30
except for base rent. Following the exercise of the option with respect to the
Option Period, Tenant shall have no further right to extend the term. Tenant's
exercise of said option shall be subject to all of the following conditions:
(i) Tenant shall exercise said option by written notification to
Landlord no later than Six (6) months prior to the expiration of the initial
term.
(ii) The option granted in this Section is personal to the original
Tenant executing this Lease document, and notwithstanding anything to the
contrary contained in the Lease, the rights contained herein are not assignable
or transferable by such original named Tenant, except that such rights shall be
deemed transferred to the beneficiary of a "Permitted Transfer" as defined in
Section 14 above.
(iii) Landlord grants the rights contained in this Section to
Tenant in consideration of Tenant's strict compliance with the provisions
hereof, including manner of exercise of option.
(iv) If Tenant shall have defaulted with respect to any of the
terms and conditions of the Lease, and such default is beyond the expiration of
any applicable cure period as of the date Tenant exercises said option, then
this Section shall be void and of no further force and effect.
(v) Time is of the essence regarding the timeliness of exercise of
the option set forth in this Section, so that if the option is not exercised
within the time period specified in subpart (a)(i) of this Section it shall
lapse and be null and void.
(b) Base Monthly Rent Applicable at Beginning of Option Period.
Effective as of the first day of the Option Period, the base monthly rent,
exclusive of Tenant's share of Direct Expenses set forth in Article 8, shall be
increased to the greater of the following:
(i) One Hundred Three Percent (103%) of the monthly rent in effect
at the end of the initial term of this Lease, or
(ii) The square footage of the Premises multiplied by the average
per-square-foot monthly rental rate contained in all new leases that shall have
been executed with respect to comparable space within the Building within the
ninety (90) days immediately preceding the commencement of the Option Period
(or within the one hundred twenty (120) days immediately preceding the
commencement of the Option Period if no such leases have been executed within
the ninety (90) days immediately preceding the commencement of the Option
Period); or if no such leases have been executed, the then rental rate being
quoted by Landlord for comparable space in the Building. For purposes of this
Section 36.b.(ii), "comparable space" shall refer to premises that are on the
seven (7) uppermost floors of the Building, and that also have tenant
improvements, and durations of lease terms, comparable to those in the Premises.
29
31
(c) Option Period Tenant Improvements. If, at the time that Tenant
notifies Landlord of its intent to exercise said option to extend the term,
Tenant also requests that Landlord perform tenant improvements within the
Premises, Landlord and Tenant shall negotiate in good faith regarding the scope
of work and the costs thereof to be paid by Tenant, pursuant to plans and
specifications approved by Landlord and Tenant.
IN WITNESS WHEREOF, the parties have executed this instrument as of the date
first stated above.
LANDLORD: TENANT:
0000 XXXXXXXX CYBERGOLD, INC., a California corporation
By: /s/ XXXXX XXXXXXXXX By: /s/ A. XXXXXXXXX XXXXXXXXX
-------------------------- -------------------------------------
Xxxxx Xxxxxxxxx
Print Name: A. Xxxxxxxxx Xxxxxxxxx
-----------------------------
Title: CEO
----------------------------------
By: /s/ XXXXX XXXXXX
-------------------------------------
Print Name: Xxxxx Xxxxxx
-----------------------------
Title: COO
----------------------------------
30
32
EXHIBIT A
RULES AND REGULATIONS
0000 XXXXXXXX BUILDING
1. No sign, placard, picture, advertisement, name or notice shall be
inscribed, displayed or printed or affixed on or to any part of the outside
or inside of the Building without the written consent of Landlord first had
and obtained and Landlord shall have the right to remove any such sign,
placard, picture, advertisement, name or notice without notice to and at
the expense of Tenant.
All approved signs or lettering on doors shall be printed, painted, affixed
or inscribed at the expense of Tenant by a person approved of by Landlord.
Tenant shall not place anything or allow anything to be placed near the
glass of any window, door, partition or wall which may appear unsightly
from outside the Premises; provided, however, that Landlord may furnish and
install a Building standard window covering at all exterior windows. Tenant
shall not without prior written consent of Landlord cause or otherwise
sunscreen any windows.
2. The sidewalks, halls, passages, exits, entrances, elevators and stairways
shall not be obstructed by any of the tenants or used by them for any
purpose other than for ingress and egress from their respective Premises.
3. Tenant shall not alter any lock or install any new or additional locks or
any bolts on any doors or windows of the Premises.
4. The toilet rooms, urinals, wash bowls and other apparatus shall not be used
for any purpose other than that for which they were constructed and no
foreign substance of any kind whatsoever shall be thrown therein and the
expense of any breakage, stoppage or damage resulting from the violation of
this rule shall be borne by the Tenant who, or whose employees or invitees
shall have caused it.
5. Tenant shall not overload the floor of the Premises or in any way deface
the Premises or any part thereof.
6. No furniture, freight or equipment of any kind shall be brought into the
Building without the prior notice to Landlord and all such moving of the
same into or out of the Building shall be done at such time and in such
manner as Landlord shall designate. Landlord shall have the right to
prescribe the weight, size and position of all safes and other heavy
equipment brought into the Building and also the times and manner of moving
the same in and out of the Building. Safes and other heavy objects shall,
if considered necessary by Landlord, stand on supports of such thickness as
is necessary to property distribute the weight. Landlord will not be
responsible for loss of or damage to any such safe or property from any
cause and all damage done to the Building by moving
--------------
Please Initial
1
33
or maintaining any such safe or other property shall be repaired at the
expense of Tenant.
7. Tenant shall not use, keep or permit to be used or kept any foul or
noxious gas or substance in the Premises, or permit or suffer the Premises
to be occupied or used in a manner offensive or objectionable to the
Landlord or other occupants of the Building by reason of noise, odors
and/or vibrations, or interfere in any way with other tenants or those
having business therein, nor shall any animals or birds be brought in or
kept in or about the Premises or the Building.
8. No cooking shall be done or permitted by any Tenant on the Premises, nor
shall the Premises be used for the storage of merchandise, for washing
clothes, for lodging, or for any improper, objectionable or immoral
purposes. Notwithstanding the foregoing, Tenant shall be permitted the use
of two (2) portable microwave ovens for the use of its employees.
9. Tenant shall not use or keep in the Premises or the Building any kerosene,
gasoline or inflammable or combustible fluid or material, or use any
method of heating other than that supplied by Landlord.
10. Landlord will direct electricians as to where and how telephone and
telegraph wires are to be introduced and connected to Landlord's cabling
and ancillary equipment. No boring or cutting for wires will be allowed
without the consent of the Landlord. The location of telephones, call
boxes and other office equipment affixed to the Premises shall be subject
to the approval of Landlord. The introduction of Intrabuilding Network
Cabling for Tenant's telecommunications service shall be performed by
Landlord, or Landlord's designated contractor, at Tenant's sole cost and
expense.
11. On Sundays and legal holidays, and on other days between 6:00 PM and 7:30
AM the following day, access to the Building or to the halls, corridors,
elevators or stairways in the Building, or to the Premises may be refused
unless the person seeking access is known to the person or employee of the
Building in charge and has a pass or is properly identified. The Landlord
shall in no case be liable for damages for any error with regard to the
admission to or exclusion from the Building of any person. In case of
invasion, mob, riot, public excitement, or other commotion, the Landlord
reserves the right to prevent access to the Building during the
continuance of the same by closing of the doors or otherwise, for the
safety of the tenants and protection of property in the Building and the
Building.
12. Landlord reserves the right to exclude or expel from the Building any
person who, in the judgment of Landlord, is intoxicated or under the
influence of liquor or drugs, or who shall in any manner do any act in
violation of any of the rules and regulations of the Building.
13. No coin-operated vending machines, or machines inconsistent with the
permitted use of the Premises, shall be installed, maintained or operated
upon the Premises without the written consent of the Landlord.
--------------
Please Initial
2
34
14. Landlord shall have the right, exercisable without notice and without
liability to Tenant, to change the name and street address of the Building
of which the Premises are a part.
15. Tenant shall not disturb, solicit, or canvass any occupant of the Building
and shall cooperate to prevent same.
16. Without the written consent of Landlord, Tenant shall not use the name of
the Building in connection with or in promoting or advertising the
business of Tenant except as Tenant's address.
17. Landlord shall have the right to control and operate the public portions
of the Building, and the public facilities, and heating, as well as
facilities furnished for the common use of the tenants, in such manner as
it deems best for the benefit of the tenants generally.
18. All entrance doors in the Premises shall be left locked when the Premises
are not in use, and all doors opening to public corridors shall be kept
closed except for normal ingress and egress from the Premises.
19. Tenant agrees to place a plastic protective-type mat under all rolling
chairs in Tenants Premises. Said mats shall be paid for by Tenant and
placed under chairs immediately upon occupancy.
20. No bicycles shall be permitted in the lobby, elevators, stairways,
hallways or any other part of the Building, except in designated areas in
the parking garage.
3
35
EXHIBIT B
CYBERGODL, INC.
0000 XXXXXXXX
XXXXX 0000
Construction obligations to be performed by Landlord:
1. Touch up paint;
2. Repair broken ceiling tiles;
3. Shampoo carpet;
4. Stretch carpet as needed.
[CYBERGOLD MAP]
EXHIBIT B - PAGE 1 OF 2
36
EXHIBIT B
CYBERGOLD, INC.
0000 XXXXXXXX
XXXXX 000
Construction obligations to be performed by Landlord:
1. Touch up paint;
2. Repair ceiling tiles where needed;
3. Shampoo carpet.
[CYBERGOLD, INC. MAP]
EXHIBIT B - PAGE 2 OF 2
37
EXHIBIT C
ACKNOWLEDGMENT OF COMMENCEMENT
1.1 (a) Landlord: 0000 XXXXXXXX
(b) Tenant CYBERGOLD, INC., A CALIFORNIA CORPORATION
1.2 Location of Premises: 0000 Xxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
1.3 Date of Acceptance:_______________________________________________________
1.4 Term Commencement Date:___________________________________________________
1.5 Rent Commencement Date:___________________________________________________
The above terms are incorporated into this Acknowledgment of Commencement
as indicated above and referenced herein.
This Acknowledgment of Commencement is made with reference to that certain
lease agreement (the "Lease") between the party designated in Section 1.1(a) as
Landlord ("Landlord") and the party designated in Section 1.1(b) hereof as
Tenant ("Tenant") dated as of July 15, 1999, regarding the certain premises
generally located as set forth in Section 1.2 hereof all as is more
particularly set forth in the Lease (the "Premises"). Tenant certifies to
Landlord and the holders of any indebtedness secured by the Building the
following:
2.1 Tenant accepted possession of the Premises on the date set forth in
Section 1.3 and acknowledges that the Premises are as represented by Landlord
and in good and sanitary order, condition and repair; and that the
improvements, if any, required to be constructed for Tenant by Landlord under
the Lease have been constructed and are satisfactorily completed in all
respects.
2.2 That all conditions of the Lease to be performed by Landlord as a
prerequisite to its full effectiveness, except punchlist items per Exhibit B to
the Lease, have been satisfied and that Landlord has fulfilled all its duties
of an inducement nature.
2.3 That the Commencement Date of the term is as set forth in Section 1.4
hereof.
2.4 That the Lease is in full force and effect and the same represents the
entire agreement between Landlord and Tenant concerning the Premises.
2.5 That there are no existing defenses or offsets which Tenant has against the
enforcement of the Lease by Landlord and no offsets or credits against rental.
2.6 That the minimum rental obligation of said Lease shall be presently in
effect and that all rentals, charges and other obligations on the part of
1
38
Tenant under the Lease commenced to accrue on the date specified in Section 1.5.
2.7 That the undersigned Tenant has not made any prior assignment,
hypothecation, or pledge of said Lease or the rents thereunder.
LESSEE: CYBERGOLD, INC., a California corporation
By:
-----------------------------------------
Print Name:
-----------------------------------------
Title:
-----------------------------------------
2
