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04/21/95
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1341 ORLEANS DRIVE LEASE AGREEMENT
by and between
CARIBBEAN GENEVA INVESTORS
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("LANDLORD")
and
MACROVISION CORPORATION
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("TENANT")
<PAGE>
TABLE OF CONTENTS
BASIC LEASE INFORMATION 1
LEASE AGREEMENT
PARAGRAPH DESCRIPTION PAGE
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1. OCCUPANCY AND USE 1
2. TERMS AND POSSESSION 1
3. RENT; RENT ADJUSTMENTS; ADDITIONAL CHARGES 2
4. RESTRICTIONS ON USE 5
5. COMPLIANCE WITH LAWS 5
6. ADDITIONAL ALTERATIONS 5
7. REPAIR AND MAINTENANCE 5
8. LIENS 6
9. ASSIGNMENT AND SUBLETTING 6
10. INSURANCE AND INDEMNIFICATION 7
11. WAIVER OF SUBROGATION 8
12. SERVICES AND UTILITIES 8
13. TENANT'S CERTIFICATES 9
14. HOLDING OVER 9
15. SUBORDINATION 9
16. RULES AND REGULATIONS 10
17. RE-ENTRY BY LANDLORD 10
18. INSOLVENCY OR BANKRUPTCY 10
19. DEFAULT 10
20. DAMAGE BY FIRE, ETC. 11
21. EMINENT DOMAIN 12
22. SALE BY LANDLORD 12
23. RIGHT OF LANDLORD TO PERFORM 12
24. SURRENDER OF PREMISES 12
25. WAIVER 13
26. NOTICES 13
27. TAXES PAYABLE BY TENANT 14
28. ABANDONMENT 14
(a)
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PARAGRAPH DESCRIPTION PAGE
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29. SUCCESSORS AND ASSIGNS 14
30. ATTORNEY'S FEES 14
31. LIGHT AND AIR 14
32. SECURITY DEPOSIT 14
33. CORPORATE AUTHORITY; FINANCIAL INFORMATION 14
34. PARKING 15
35. MISCELLANEOUS 15
36. TENANT'S REMEDIES 15
37. REAL ESTATE BROKERS 15
38. LEASE EFFECTIVE DATE 16
EXHIBIT "A" PREMISES
EXHIBIT "B" WORK LETTER
EXHIBIT "B-1" MINIMUM INFORMATION REQUIRED
EXHIBIT "C" RULES AND REGULATIONS
EXHIBIT "D" FORM OF TENANT ESTOPPEL CERTIFICATE
(b)
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<TABLE>
<CAPTION>
BASIC LEASE INFORMATION
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<S> <C>
LEASE DATE: APRIL 21, 1995
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LANDLORD: CARIBBEAN/GENEVA INVESTORS
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A CALIFORNIA PARTNERSHIP
MANAGING AGENT: THE MOZART DEVELOPMENT COMPANY
LANDLORD'S AND MANAGING AGENT'S ADDRESS:
C/O THE MOZART DEVELOPMENT COMPANY
1068 EAST MEADOW CIRCLE
PALO ALTO, CA 94303
TENANT: MACROVISION CORPORATION
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TENANT'S ADDRESS: FOR NOTICE & BILLING PRIOR TO COMMENCEMENT DATE
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1341 ORLEANS DRIVE 700 EL CAMINO REAL EAST, SUITE 200
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SUNNYVALE, CA 94089 MOUNTAIN VIEW, CA 94040
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BUILDING: 1341 ORLEANS DRIVE, SUNNYVALE
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PROJECT: 1327 & 1341 ORLEANS DRIVE, SUNNYVALE
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SUITE: ENTIRE BUILDING
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LAND: APPROXIMATELY 2.89 ACRES
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RENTABLE AREA OF THE PREMISES: 43,960 SQUARE FEET
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RENTABLE AREA OF THE BUILDING: 43,960 SQUARE FEET
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PARKING SPACES: APPROXIMATELY 158 SPACES
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TENANT'S USE OF THE PREMISES: ADMINISTRATION, SALES & MARKETING, RESEARCH & DEVELOPMENT,
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ELECTRONICS ASSEMBLY, TESTING AND RELATED SERVICE, DISTRIBUTION,
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WAREHOUSING AND OTHER RELATED LEGAL USES.
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LEASE TERM: SEVEN(7) YEARS, COMMENCING ON JULY 1, 1995 AND ENDING ON JUNE 30, 2002.
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TENANT ALLOWANCE: $175,840 ($4 PER SQUARE FOOT) - SEE EXHIBIT B FOR CLARIFICATION.
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TENANT'S PLAN DELIVERY DATE: MARCH 20, 1995
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RENT:
MONTHLY BASE RENT: $29,892.80 ($.68 PER SQUARE FOOT NNN)
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ANNUAL BASE RENT: $358,713.60
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BASE RENT ADJUSTMENT SEE PARAGRAPH 3(b) FOR CHANGES AT BEGINNING OF MONTHS 37 AND 73.
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TENANT'S SHARE OF EXPENSES AND TAXES ("ADDITIONAL CHARGES"): 100.00%
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SECURITY DEPOSIT: $29,892,80
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GUARANTOR OF LEASE: NA
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BROKER: COLLIERS PARRISH INTERNATIONAL INC.- JEFFRY NOCHIMSON/CYNTHIA ROTWEIN
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BROKER'S FEE OR COMMISSION, IF ANY, PAID BY: LANDLORD
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</TABLE>
The foregoing Basic Lease Information is hereby incorporated into and made a
part of this Lease. Each reference in this Lease to any of the Basic Lease
Information shall mean the respective information hereinabove set forth and
shall be construed to incorporate all of the terms provided under the
particular paragraph pertaining to such information. In the event of any
conflict between any Basic Lease Information and the Lease, the latter shall
control.
BASIC LEASE INFORMATION - Page i
<PAGE>
LANDLORD:
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CARIBBEAN/GENEVA INVESTORS
A CALIFORNIA PARTNERSHIP
BY: [ILLEGIBLE]
---------------------------------
ITS: [ILLEGIBLE]
---------------------------------
TENANT:
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MACROVISION CORPORATION
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A CALIFORNIA CORPORATION
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BY: /s/Robert J. Netter, Jr.
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ITS: VICE PRESIDENT OF FINANCE
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BASIC LEASE INFORMATION - Page ii
<PAGE>
LEASE AGREEMENT
THIS LEASE AGREEMENT is made and entered into this 21st day of April, 1995,
by and between CARIBBEAN/GENEVA INVESTORS, a California partnership, (herein
called, "Landlord"), and MACROVISION CORPORATION, a CALIFORNIA CORPORATION
(herein called "Tenant").
Upon and subject to the terms, convenants and conditions hereinafter set
forth, Landlord hereby leases to Tenant and Tenant hereby hires from Landlord
those premises (the "Premises") comprising the area substantially as outlined in
red on attached EXHIBIT "A", in the building (hereinafter referred to as the
"Building") specified in the Basic Lease Information attached hereto. The
Building, together with the associated land, park, etc., may be more broadly
referred to as "Project."
1. OCCUPANCY AND USE. Tenant shall use and occupy the Premises for
the purpose specified in the Basic Lease Information and for no other use or
purpose without the prior written consent of Landlord. Landlord shall have the
right to grant or withhold consent to a proposed change of use in its sole
discretion.
2. TERMS AND POSSESSION.
(a) The term of this Lease (the "Term") shall be for the period
specified in the Basic Lease Information (or until sooner terminated as herein
provided). If Landlord, for any reason whatsoever, cannot deliver possession of
the Premises to Tenant on the date specified in the Basic Lease Information for
the commencement of the Term, this Lease shall not be void or voidable, nor
shall Landlord be liable to Tenant for any loss or damage resulting therefrom.
In that event, however, Tenant shall not be liable for any Rent or Additional
Charges (as hereinafter defined) until Landlord delivers possession of the
Premises to Tenant. If Landlord tenders possession of the Premises to Tenant
prior to the commencement of the Term, then the Term and Tenant's obligations
hereunder shall commence on the date that it accepts such possession. If
substantial completion of the Premises is delayed beyond the scheduled
commencement of the Term for any reason other than a delay of Tenant or its
agents, representatives or contractors, the Term, scheduled commencement date
and scheduled expiration date shall be extended by the amount of such delay.
Notwithstanding the above, in the event that substantial completion is delayed
beyond June 30, 1995, then Tenant shall not be obligated to accept the Premises
(and have the Term commence) until August 1, 1995. In the event that the delay
in substantial completion beyond June 30, 1995 is related to the existing
tenant, Lockheed, holding over in the Premises after April 30, 1995 and Tenant
elects to accept the Premises prior to August 1, 1995, then Landlord shall
credit toward Tenant's rent an amount equal to one day's rent and holdover
penalties paid by Lockheed for the Premises during May of 1995 (estimated at
$1,482 per day) for each day during July of 1995 for which Tenant is paying rent
in both the Premises and its current premises at 700 El Camino Real East in
Mountain View. Notwithstanding the above, in the event that substantial
completion of the Premises has not occurred on or before September 30, 1995,
then Tenant shall have the right to terminate this lease by providing written
notice to Landlord of its decision to terminate the lease no later than October
15, 1995. The preceding three provisions shall be subject to Force Majeure
delays (as defined below) and Tenant delays, including, but not limited to,
changes in the plans for Tenant's improvements. Force Majeure Delays shall mean
and refer to a period of delay or delays encountered by Landlord because of:
fire, earthquake, flooding or other acts of God; acts of the public enemy, riot,
or insurrection; governmental regulations enacted after this Lease is executed
and beyond the control of Landlord; strikes or boycotts, shortages of unique
materials or any other industry or area-wide cause beyond the control of
Landlord. The dates upon which the Term shall commence and terminate pursuant to
this Paragraph 2(a) are herein called the "Commencement Date" and the
"Expiration Date," respectively.
(b) Completion of the improvements to the Premises shall be
governed by the terms and conditions of the separate work letter ("Work
Letter"), attached hereto as EXHIBIT "B".
(c) The Premises shall be deemed completed and possession
delivered when Landlord has substantially completed the work to be constructed
or installed by Landlord ("Landlord's Work") pursuant to the provisions of the
Work Letter subject only to the completion of items on Landlord's architect's
punch list (and exclusive of the installation of all telephone and other
communications facilities and equipment and other finish work or decorating work
to be performed by or for Tenant). Tenant shall accept the Premises upon notice
from Landlord that Landlord's Work has been so substantially completed (and
provided that Tenant has had a reasonable opportunity to verify the same) and
Tenant's obligation to pay rent hereunder shall commence on the earlier to
occur of: (i) the date on which Landlord's Work is substantially completed; or
(ii) the date on which Tenant takes possession of, or commences the operation
of its business in, any or all of the Premises. However, in no event shall
Tenant be required to accept the Premises prior to July 1, 1995. By occupying
the Premises, Tenant shall be deemed to have accepted the same as suitable for
the purpose herein intended and to have acknowledged that the same comply fully
with Landlord's obligations, notwithstanding that certain "punch list" type
items may not have been completed. However, acceptance of the space by, Tenant
shall not relieve Landlord of its obligation to complete outstanding punch-list
items which are Landlord's responsibility. Within five (5) days after written
request of Landlord, Tenant agrees to
Lease Agreement - Page 1
<PAGE>
give Landlord a letter confirming the Commencement Date and certifying that
Tenant has accepted delivery of the Premises (latent defects expected) and that
the condition of the Premises complies with Landlord's obligations hereunder, or
in the event the condition of the Premises does not comply, stating how it does
not comply. The Premises shall be substantially completed when (i) Tenant has
safe and direct access to the Premises from the sidewalk and parking area
adjacent to the Building, (ii) the work to be completed by Landlord, pursuant to
the Work Letter, is completed subject only to completion of items on Landlord's
Architect's punch list, which do not materially interfere with Tenant's use of
the Premises, and (iii) a Certificate of Occupancy or its equivalent has been
issued by the City or other applicable governmental agency for the Premises.
Landlord shall use its best efforts to advise Tenant of the anticipated date of
completion at least fifteen (15) days prior to such date, but the failure to
give such notice shall not constitute a default hereunder by Landlord.
Notwithstanding the above, at no cost to Tenant, in the event that substantial
completion of the Premises occurs prior to June 26, 1996, Landlord shall provide
Tenant with access to the space one (1) week prior to the commencement date to
install partition systems, install phone and data cabling and otherwise set up
the office. However, as much as is possible, Tenant's cabling contractors will
work with Landlord's contractor to install cabling prior to this period if
requested by Landlord.
(d) Tenant shall, no later than thirty (30) days after the date of
issuance by the appropriate governmental agency of a Certificate of Occupancy or
its equivalent concerning the Improvements, go into actual physical occupancy of
the Premises and open the Premises for business in accordance with the uses
specified in Paragraph 4 below. Time is of essence. In the event Tenant fails to
perform its obligations pursuant to this Section 2(d), Tenant shall indemnify
and hold Landlord harmless from any loss or liability arising from Tenant's
failure to occupy the Premises and open the Premises for business.
3. RENT; RENT ADJUSTMENTS; ADDITIONAL CHARGES FOR EXPENSES AND TAXES.
(a) MONTHLY BASE RENT. Tenant shall pay to Landlord
throughout the Term the annual rental specified in the Basic Lease
Information ("Rent"), which sum shall be payable by Tenant in equal monthly
installments on or before the first day of each month, in advance, with the
first month's rent due upon execution of this Lease Agreement, in lawful
money of the United States, without any prior demand therefor and without
deduction or offset whatsoever, to Landlord or its managing agent at the
address specified in the Basic Lease Information or to such other firm or to
such other place as Landlord or its Managing Agent may from time to time
designate in writing. Tenant shall pay to Landlord all charges and other
amounts whatsoever as provided in this Lease ("Additional Charges") at the
place where the Rent is payable and Landlord shall have the same remedies for
a default in the payment of Additional Charges as for a default in the
payment of Rent. If the Commencement Date should occur on a day other than
the first day of a calendar month, or the Expiration Date should occur on a
day other than first day of a calendar month, or the Expiration Date should
occur on a day other than the last day of a calendar month, then the Rent and
Additional Charges for such fractional month shall be prorated on a daily
basis.
(b) ADJUSTMENTS IN RENT. The monthly base rent under Paragraph
3(a) shall be adjusted at the beginning of months 37 and 73 of the Term reflect
any increase in the cost of living. The amount of such increase in the monthly
base rent, if any, shall be determined by multiplying $29,892.80 by a fraction,
the denominator of which shall be the most recent Consumer Price Index (as
hereinafter defined) figure published prior to the Commencement Date, and the
numerator of which shall be the most recent Consumer Price Index figure
published prior to the date of such adjustment; provided, however, in no event
shall the increase in Rent over the Rent in place immediately before the
increase be less than ten percent (10%) nor greater than fifteen percent (15%).
As used herein, the term "Consumer Price Index" shall mean the United States
Department of Labor, Bureau of Labor Statistics, Consumer Price Index, All
Urban Consumers, All Items, San Francisco-Oakland, California (1982-84 equals
100). If, during the Term, the aforesaid Index is no longer published,
Landlord shall, for the purposes of computation of any adjustments in Rent,
substitute such other Index as is then generally recognized as most
comparable to the aforementioned Index and accepted for similar
determinations. Should Landlord lack sufficient data to make the
determination specified in this Paragraph 3(b) on the date of any such
adjustment, Tenant shall continue to pay the monthly Rent payable immediately
prior to such adjustment date. As soon as Landlord obtains the necessary
data, it shall determine the Rent payable from and after such adjustment date
and notify Tenant of the adjustment in writing. If the monthly Rent for the
period following such adjustment date exceeds the amount previously paid by
Tenant for such period, Tenant shall forthwith pay the difference to Landlord.
(c) ADDITIONAL CHARGES FOR EXPENSES AND TAXES.
(1) For purposes of this Paragraph 3(c), the following terms shall
have the meanings hereinafter set forth:
(A) "Tax Year" shall mean each twelve (12) consecutive
month period commencing January 1st of the calendar year during which the
Commencement Date of this Lease occurs, provided that Landlord, upon notice
to Tenant, may change the Tax Year from time to time to any other twelve
(12) consecutive month period and, in the event of any such change,
Tenant's Share of
Lease Agreement - Page 2
<PAGE>
Real Estate Taxes (as hereinafter defined) shall be equitably adjusted for
the Tax Years involved in any such change.
(B) "Tenant's Share" shall mean the percentage figure so
specified in the Basic Lease Information.
(C) "Real Estate Taxes" shall mean all taxes, assessments
and charges levied upon or with respect to the Project or any personal
property of Landlord used in the operation of thereof, or Landlord's
interest in the Project or such personal property. Real Estate Taxes shall
include, without limitation, all general real property taxes and general
and special assessments, charges, fees or assessments for transit, housing,
police, fire or other governmental services or purported benefits to the
Building, service payments in lieu of taxes, and any tax, fee or excise on
the act of entering into this Lease, or any other lease of space in the
Building, or on the use or occupancy of the Building or any part thereof,
or on the rent payable under any lease or in connection with the business
of renting space in the Building, that are now or hereafter levied or
assessed against Landlord by the United States of America, the State
of California, or any political subdivision, public corporation, district
or any other political or public entity, and shall also include any other
tax, fee or other excise, however described, that may be levied or assessed
as a substitute for, or as an addition to, in whole or in part, any other
Real Estate Taxes, whether or not now customary or in the contemplation
of the parties on the date of this Lease. Real Estate Taxes shall not
include franchise, transfer, inheritance or capital stock taxes or
income taxes measured by the net income of Landlord from all sources
unless, due to a change in the method of taxation, any of such taxes is
levied or assessed against Landlord as a substitute for, or as an
addition to, in whole or in part, any other tax that would otherwise
constitute a Real Estate Tax. Real Estate Taxes shall also include
reasonable legal fees, costs and disbursements incurred in connection
with proceedings to contest, determine or reduce Real Estate Taxes (such
proceedings to be those from which a reasonable person would anticipate
that savings would actually result and with which Tenant reasonably
agrees). Notwithstanding anything to the contrary set forth above,
Tenant shall not be responsible for increases in Real Estate Taxes which
are related to an increase in the assessed value of the property in
excess of the "Agreed Upon Assessed Value." The Agreed Upon Assessed
Value shall be $4,567,000 for the period from July 1, 1994 through June 30,
1995, and shall increase at a rate of five percent (5%) during each
succeeding twelve (12) month period.
(D) "Expenses" shall mean the total direct costs
and reasonable expenses paid or incurred by Landlord in connection with
the management, operation, maintenance and repair of the Building,
including, without limitation (i) the cost of air conditioning,
electricity, steam, heating, mechanical, ventilating, elevator systems
and all other utilities and the cost of supplies and equipment and
maintenance and service contracts in connection therewith; (ii) the cost
of repairs and general maintenance and cleaning; (iii) the cost of fire,
extended coverage, boiler, sprinkler, public liability, property damage,
rent, earthquake (if available at commercially reasonable rates) and
other insurance; (iv) fees, charges and other costs, including
management fees, consulting fees, legal fees (which are allowed
elsewhere in the Lease) and accounting fees, of all independent
contractors engaged by Landlord directly related to the operation of the
Building or reasonably charged by Landlord if Landlord performs
management services in connection with the Building; (v) the cost of any
membership fees, expenses or charges imposed by any owner's or tenant's
association created to manage and/or maintain the common areas or public
areas of the Project in which the Building is located and the Building's
Share of all costs of such common or public area management and
maintenance; (vi) the cost of any capital improvements made to the
Building after completion of its construction as a labor saving device or
to effect other economies in the operation or maintenance of the Building
(from which a reasonable person would anticipate that savings would
actually result and with which Tenant agrees), or that are made to the
Building after the date of this Lease and are required under any
governmental law or regulation that was not applicable to the Building
at the time that permits for the construction thereof of Tenant's
improvements were obtained, such cost to be amortized over such
reasonable period as defined under generally accepted accounting
principles ("GAAP"), together with interest on the unamortized balance at
the rate of ten percent (10%) per annum or such higher rate as may have
been paid by Landlord on funds borrowed for the purpose of constructing
such capital improvements; and (viii) any other reasonable expenses of
any other kind whatsoever reasonably incurred in managing, operating,
maintaining and repairing the Building.
Notwithstanding anything to the contrary herein contained, Expenses
shall not include (aa) the initial construction cost of the Project or
real property on which the Building is located; (bb) the cost of
providing tenant improvements to Tenant or any other tenant; (cc) debt
service (including, but without limitation, interest, principal and any
impound payments) required to be made on any mortgage or deed of trust
recorded with respect to the Building and/or the real property on which
the Building is located other than debt service and financing charges
imposed pursuant to Paragraph 3(c)(1)(D)(vi) above; (dd) the cost of
special services, goods or materials provided to any tenant, (ff) the
portion of a management fee paid to Landlord or affiliate in excess of
two percent (2%) of Rent and Additional Charges; costs to maintain the
Building's foundations, exterior walls, and structural roof. In no event
shall Landlord be entitled to collect in excess of one hundred percent
Lease Agreement - Page 3
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(100%) of the total Expenses from all of the tenants in the Building
including Tenant. All costs and expenses shall be determined in
accordance with generally accepted accounting principles which shall be
consistently applied (with accruals appropriate to Landlord's business).
Expenses shall not include specific costs incurred for the account of,
separately billed to and paid by specific tenants.
(E) "Expense Year" shall mean each twelve (12) consecutive
month period commencing January 1 of the calendar year during which the
Commencement Date of the Lease occurs, provided that Landlord, upon
notice to Tenant, may change the Expense Year from time to time to any
other twelve (12) consecutive month period, and, in the event of any
such change, Tenant's Share of Expenses shall be equitably adjusted for
the Expense Years involved in any such change.
(2) Tenant shall pay to Landlord as Additional Charges one-twelfth
(1/12th) of Tenant's Share of Real Estate Taxes for each Tax Year on or
before the first day of each month during such Tax Year, in advance, in an
amount reasonably estimated by Landlord and billed by Landlord to Tenant, and
Landlord shall have the right initially to determine monthly estimates and to
revise such estimates from time to time. With reasonable promptness after
Landlord has received the tax bills for any Tax Year, Landlord shall furnish
Tenant with a statement (herein called "Landlord's Tax Statement") setting
forth the amount of Real Estate Taxes for such Tax Year, and Tenant's Share
thereof. If the actual Real Estate Taxes for such Tax Year exceed the
estimated Real Estate Taxes paid by Tenant for such Tax Year, Tenant shall
pay to Landlord the difference between the amount paid by Tenant and the
actual Real Estate Taxes within fifteen (15) days after the receipt of
Landlord's Tax Statement, and if the total amount paid by Tenant for any such
Tax Year shall exceed the actual Real Estate Taxes for such Tax Year, such
excess shall be credited against the next installment of Real Estate Taxes
due from Tenant to Landlord hereunder.
(3) Tenant shall pay to Landlord as Additional Charges one-twelfth
(1/12th) of Tenant's Share of the Expenses for each Expense Year on or before
the first day of each month of such Expense Year, in advance, in an amount
reasonably estimated by Landlord and billed by Landlord to Tenant, and
Landlord shall have the right initially to determine monthly estimates and to
revise such estimates from time to time. With reasonable promptness after the
expiration of each Expense Year, Landlord shall furnish Tenant with a
statement (herein called "Landlord's Expense Statement"), setting forth in
reasonable detail the Expenses for such Expense Year and Tenant's Share
thereof. If the actual Expenses for such Expense Year exceed the estimated
Expenses paid by Tenant for such Expense Year, Tenant shall pay to Landlord
the difference between the amount paid by Tenant and the actual Expenses
within fifteen (15) days after the receipt of Landlord's Expense Statement,
and if the total amount paid by Tenant for any such Expense Year shall exceed
the actual Expenses for such Expense Year, such excess shall be credited
against the next installment of the estimated Expenses due from Tenant to
Landlord hereunder returned to Tenant within thirty (30) days, unless Tenant
is delinquent on its rent.
(4) To the extent any item of Real Estate Taxes or Expenses is
payable by Landlord in advance of the period to which it is applicable (e.g.
insurance), Landlord may (i) include Tenant's share of such items in
Landlord's estimate for periods prior to the date such item is payable by
Landlord and (ii) to the extent Landlord has not collected the full amount of
such item prior to the date such item is payable by Landlord, Landlord may
include Tenant's Share of the balance of such full amount in a revised
monthly estimate for additional charges. If the Commencement Date or
Expiration Date shall occur on a date other than the first day of a Tax Year
and/or Expense Year, Tenant's share of Real Estate Taxes and Expenses, for
the Tax Year and/or Expense Year in which the Commencement Date occurs shall
be prorated.
(5) Within ninety (90) days after receipt of any Expense Statement
or Tax Statement from Landlord, Tenant shall have the right to examine
Landlord's books and records relating to such Expense Statements and Tax
Statements, or cause an independent audit thereof to be conducted by an
accounting firm to be selected by Tenant and subject to the reasonable
approval of Landlord.
(d) LATE CHARGES. Tenant recognizes that late payment of any Rent or
Additional Charges will result in administrative expenses to Landlord, the
extent of which additional expense is extremely difficult and economically
impractical to ascertain. Tenant therefore agrees that if any Rent or
Additional Charges remain unpaid ten (10) days after the amount is due and
written notice has been given, the amount of such unpaid Rent or Additional
Charges shall be increased by a late charge to be paid to Landlord by Tenant
in an amount equal to four percent (4%) of the amount of the delinquent Rent
or Additional Charges. After the initial late charge is imposed for Rent,
Additional Charges and other outstanding amounts for any specific month, late
charges on the Rent, Additional Charges and other outstanding amounts for
that specific month shall accrue interest during future months at an
annualized rate of Prime rate (as set by the Bank of America) plus five
percent (5%) until paid to Landlord. Tenant agrees that such amount is a
reasonable estimate of the loss and expense to be suffered by Landlord as a
result of such late payment by Tenant and may be charged by Landlord to
defray such loss and expense. The provisions of this Paragraph 3(d) in no way
relieve Tenant of the obligation to pay Rent or Additional Charges on or
before the date on which they
Lease Agreement - Page 4
<PAGE>
are due, nor do the terms of this Paragraph 3(d) in any way affect Landlord's
remedies pursuant to Paragraph 19 in the event any Rent or Additional Charges
are unpaid after the date due.
4. RESTRICTIONS ON USE. Tenant shall not do or permit anything to be
done in or about the Premises which will obstruct or interfere with the
rights of other tenants or occupants of the Building or the Project or injure
or annoy them, nor use or allow the Premises to be used for any improper,
immoral, unlawful or objectionable purpose, nor shall Tenant cause or
maintain or permit any nuisance in, on or about the Premises. Tenant shall
not commit or suffer the commission of any waste in, on or about the Premises.
5. COMPLIANCE WITH LAWS. Tenant shall not use the Premises or permit
anything to be done in or about the Premises which will in any way conflict
with any law, statute, ordinance or governmental rule or regulation,
including all Environmental Laws as hereinafter defined in Paragraph 42,
relating to the use of the Premises now in force or which may hereafter be
enacted or promulgated. Tenant shall not do or permit anything to be done in
or about the Premises or bring or keep anything therein which will in any way
increase the rate of any insurance upon the Project (unless Tenant agrees to
pay for such increases) or any of its contents or cause a cancellation of
such insurance or otherwise affect such insurance in any manner, and Tenant
shall at its sole cost and expense promptly comply with all laws, statutes,
ordinances and governmental rules, regulations or requirements now in force
or which may hereafter be in force including, without limitation, all
Environmental Laws and with the requirements of any board of fire
underwriters or other similar body now or hereafter constituted relating to
or affecting the condition, use or occupancy of the Premises, excluding
structural changes not related to or affected by Tenant's unique use of the
Premises or alterations or improvements made by or for Tenant or Tenant's
acts. The judgment of any court of competent jurisdiction or the admission of
Tenant in an action against Tenant, whether Landlord be a party thereto or not,
that Tenant has so violated any such law, statute, ordinance, rule,
regulation or requirement, shall be conclusive of such violation as between
Landlord and Tenant.
6. ADDITIONAL ALTERATIONS. After completion of the improvements
described in or contemplated by the Work Letter, Tenant shall not make or
suffer to be made any additional alterations, additions or improvements
("Alterations") in, on or to the Premises or any part thereof without the
prior written consent of Landlord (excepting painting, carpeting,
wallcovering, light fixtures, electrical outlets, other communications ports
and computer wiring, cabinets and bookshelves, and warehouse racks which are
consistent with improvements and finishes previously approved by Landlord);
and any Alterations in, on or to the Premises, except for Tenant's movable
furniture and equipment (including equipment such as shelving, antennas,
satellite dishes or other similar equipment typically bolted down for safety
purposes), shall immediately become Landlord's property and, at the end of
the Term, shall remain on the Premises without compensation to Tenant.
Landlord shall not unreasonably withhold its consent to Alterations that (i)
do not affect the structure of the Building or its electrical, plumbing,
HVAC, security or other systems, (ii) are not visible from the exterior of
the Premises, and (iii) are consistent with Tenant's permitted use hereunder.
In the event Landlord consents to the making of any Alterations by Tenant,
the same shall be made by Tenant, at Tenant's sole cost and expense, in
accordance with plans and specifications reasonably approved by Landlord, and
any contractor or person selected by Tenant to make the same must first be
reasonably approved in writing by Landlord or, at Landlord's option, the
Alterations shall be made by Landlord for Tenant's account and Tenant shall
reimburse Landlord for the competitively bid cost thereof (including a
reasonable charge for Landlord's overhead) within twenty (20) days after
receipt of a statement from Landlord therefor. Upon the expiration or sooner
termination of the Term, Tenant shall upon demand by Landlord, at Tenant's
sole cost and expense, forthwith and with all due diligence remove any
Alterations made by or for the account of Tenant, designated by Landlord to
be removed (provided, however, that upon the written request of Tenant prior
to installation of such Alterations, Landlord shall advise Tenant at that
time whether or not such Alterations must be removed upon the expiration or
sooner termination of this Lease), and Tenant shall forthwith and with all
due diligence, at its sole cost and expense, repair and restore the Premises
to its original condition, subject to normal wear and tear and the rights and
obligations of Tenant concerning casualty damage pursuant to Paragraph 20.
7. REPAIR AND MAINTENANCE.
(a) Landlord shall be responsible for the following repair and
maintenance obligations: (i) maintenance and repair of the exterior, roof and
structural portions of the Building, (ii) repairs and maintenance of the
Building systems for electrical, mechanical, HVAC or plumbing and all
controls appurtenant thereto, and (iii) parking areas, courtyards, sidewalks,
entry ways, lawns, landscaping and other similar facilities of the Project.
In the event that Tenant desires to directly manage the maintenance of the
mechanical and HVAC systems or the plumbing and all controls appurtenant
thereto, then Landlord agrees to not unreasonably withhold its approval so
long as Tenant adequately maintains such equipment, as
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reasonably determined by Landlord. Tenant shall have the authority to
communicate directly with Landlord's roof maintenance company. In emergency
situations, Tenant shall have the authority to contact directly any venders
approved by Landlord and order repairs. In the event that Landlord fails to
pursue its duties as noted above within thirty (30) days of written request
from Tenant, excepting structural changes, then Tenant shall have the right
to contact any venders approved by Landlord and directly contract for said
repairs and maintenance provided that Tenant agrees to pay for the cost of
said repairs and maintenance.
(b) Tenant shall maintain and repair the interior portion of the
Premises and any additional tenant improvements, alterations or additions
installed by or on behalf of Tenant within the Premises, however, excluding
any portions thereof which are structural in nature or which are a part of
the electrical, mechanical, HVAC or plumbing systems of the Premises. Tenant
shall be responsible for the expense of installation, operation, and
maintenance of its telephone and other communications cabling from the point
of entry into the Building to the Premises and throughout the Premises;
though Landlord shall have the right to perform such work on behalf of Tenant
in Building Common Areas. Tenant hereby waives and releases its right to make
repairs at Landlord's expense under Sections 1941 and 1942 of the California
Civil Code or under any similar law, statute or ordinance now or hereafter in
effect. In addition, Tenant hereby waives and releases its right to terminate
this Lease under Section 1932(1) of the California Civil Code or under any
similar law, statute or ordinance now or hereafter in effect. If Tenant fails
after ten (10) days' written notice by Landlord to proceed with due diligence
to make repairs required to be made by Tenant, the same may be made by
Landlord at the expense of Tenant and the expenses thereof incurred by
Landlord shall be reimbursed immediately as Additional Rent within thirty
(30) days after submission of a bill or statement therefor.
(c) The purpose of Section 7(a) and 7(b) is to define the
obligations of Landlord and Tenant to perform various repair and maintenance
functions; the allocation of the costs therefore are covered under this
Section 7(c) and Section 3. Tenant shall bear the full cost of repairs or
maintenance interior or exterior, excluding structural changes, to preserve
the Premises and the Building in good working order and condition, arising
out of (i) the performance or existence of any alteration or modification to
the Premises made by Tenant; (ii) the installation, use or operation of
Tenant's property or fixtures; (iii) the moving of Tenant's property or
fixtures in or out of the Building or in and about the Premises; or (iv) the
acts, omissions or negligence of Tenant or any person claiming or acting
through or under Tenant, or any of its servants, employees, contractors,
agents, visitors, or licensees, or the use or occupancy or manner of use or
occupancy of the Premises by Tenant or any such person.
(d) Except as provided in Paragraph 20, there shall be no abatement
of Rent with respect to, and except for Landlord's gross negligence or
willful misconduct, Landlord shall not be liable for any injury to or
interference with Tenant's business arising from, any repairs, maintenance,
alteration or improvement in or to any portion of the Building, including the
Premises, or in or to the fixtures, appurtenances and equipment therein.
8. LIENS. Tenant shall keep the Premises free from any liens arising out
of any work performed, material furnished or obligations incurred by Tenant.
In the event that Tenant shall not, within ten (10) days following the
imposition of any such lien, cause the same to be released of record by
payment or posting of a proper bond, Landlord shall have, in addition to all
other remedies provided herein and by law, the right, but not the obligation,
to cause the same to be released by such means as it shall deem proper,
including payment of the claim giving rise to such lien. All such sums paid
by Landlord and all expenses incurred by it in connection therewith shall be
considered Additional Charges and shall be payable to it by Tenant on demand
with interest at the maximum rate permitted by law. Landlord shall have the
right at all times to post and keep posted on the Premises any notices
permitted or required by law, or which Landlord shall deem proper, for the
protection of Landlord, the Premises, the Building and any other party
having an interest therein, from mechanics' and materialsmen's liens, and
Tenant shall give notice to Landlord at least five (5) business days' prior
notice of commencement of any construction on the Premises.
9. ASSIGNMENT AND SUBLETTING.
(a) Tenant shall not directly or indirectly, voluntarily or by
operation of law, sell, assign, encumber, pledge or otherwise transfer or
hypothecate all or any part of the Premises or Tenant's leasehold estate
hereunder (collectively, "Assignment"), or permit the Premises to be occupied
by anyone other than the Tenant or sublet the Premises (collectively,
"Sublease") or any portion thereof without Landlord's prior written consent
in each instance, which consent shall not be unreasonably withheld by
Landlord. Without otherwise limiting the criteria upon which Landlord may
withhold its consent to any proposed Sublease or Assignment, if Landlord
withholds its consent where either (i) the proposed Subleasee's or Assignee's
net
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worth (according to generally accepted accounting principles) is less than
the net worth of Tenant at the time this Lease is executed, or (ii) the
proposed Sublessee's or Assignee's use of the Premises is not in compliance
with the allowed Tenant's Use of the Premises as described in the Basic Lease
Information, such withholding of consent shall be presumptively reasonable.
If Landlord consents to the Sublease or Assignment, Tenant may thereafter
enter into a valid Sublease or Assignment upon the terms and condition set
forth in this Section 9.
(b) If Tenant desires at any time to enter into an Assignment of
this Lease or a Sublease of the Premises or any portion thereof, it shall
first give written notice to Landlord of its desire to do so, which notice
shall contain (i) the name of the proposed assignee, subtenant or occupant;
(ii) the name of the proposed assignee's, subtenant, or occupant's business
to be carried on in the Premises; (iii) the terms and provisions of the
proposed Assignment or Sublease; and (iv) such financial information as
Landlord may request concerning the proposed assignee, subtenant or occupant.
(c) At any time within fifteen (15) days after Landlord's receipt
of the notice specified in Paragraph 9(b), Landlord shall by written notice
to Tenant elect to (i) sublease itself the portion of the Premises specified
in Tenant's notice of intended Sublease; (ii) take an Assignment of Tenant's
leasehold estate specified in Tenant's notice hereunder; (iii) terminate this
Lease as to the portion (including all) of the Premises that is specified in
Tenant's notice of intended Assignment, with a proportionate abatement in
Rent and Additional Charges; (iv) consent to the Sublease or Assignment; or
(v) disapprove the Sublease or Assignment. In the event Landlord elects to
Sublease or take an Assignment from Tenant as described in clauses (i) and
(ii) above, the rent payable by Landlord shall be the lower of that set forth
in Tenant's notice or the Rent payable by Tenant under this Lease at the time
of the Assignment of Sublease (or a proportionate amount thereof representing
the portion of the Premises subject to the Assignment or Sublease if less
than the entire Premises is subject to the Assignment or Sublease). In the
event Landlord elects any of the options set forth in clauses (i), (ii), or
(iii) above, with respect to a portion of the Premises, Tenant shall at all
times provide reasonable and appropriate access to such portion of the
Premises and use of any common facilities, and Landlord shall have the right
to use such portion of the Premises for any legal purpose in its sole
discretion and the right to further assign or sublease the portion of the
Premises subject to Landlord's election without the consent of Tenant. If
Landlord consents to the Sublease or Assignment within said fifteen (15) day
period, Tenant may thereafter within thirty (30) days after Landlord's
consent, but not later than the expiration of said thirty (30) days, enter
into such Assignment or Sublease of the Premises or portion thereof, upon the
terms and conditions set forth in the notice furnished by Tenant to Landlord
pursuant to Paragraph 9(b). Failure by Landlord to either consent or refuse
such consent to a proposed assignment, encumbrance or sublease within the
fifteen (15) day time period specified above shall be deemed to be Landlord's
consent thereto.
(d) No consent by Landlord to any Assignment or Sublease by Tenant
shall relieve Tenant of any obligation to be performed by Tenant under this
Lease, whether arising before or after the Assignment or Sublease. The
consent by Landlord to any Assignment or Sublease shall not relieve Tenant
from the obligation to obtain Landlord's express written consent to any other
Assignment or Sublease. Any Assignment or Sublease that is not in compliance
with this Paragraph 9 shall be void and, at the option of Landlord, shall
constitute a material default by Tenant under this Lease. The acceptance of
Rent or Additional Charges by Landlord from a proposed assignee or sublessee
shall not constitute the consent to such Assignment or Sublease by Landlord.
(e) The following shall be deemed a voluntary assignment of
Tenant's interest in this Lease: (i) any dissolution, merger, consolidation,
or other reorganization of Tenant; and (ii) if the capital stock of Tenant is
not publicly traded, the sale or transfer to one person or entity stock
possessing more than fifty percent (50%) of the total combined voting power
of all classes of Tenant's capital stock issued, outstanding and entitled to
vote for the election of directors. Notwithstanding anything to the contrary
contained in this paragraph 9, Tenant may enter into any of the following
transfers (a "Permitted Transfer") without Landlord's prior written consent:
(1) Tenant may assign its interest in the Lease to a
corporation which results from a merger, consolidation or other
reorganization, so long as the surviving corporation has a net worth
immediately following such transaction that is equal to or greater than the
net worth of Tenant immediately prior to such transaction; and
(2) Tenant may assign this Lease to a corporation which
purchases or otherwise acquires all or substantially all of the assets of
Tenant, so long as such acquiring corporation has a net worth immediately
following such transaction that is equal to or greater than the net worth of
Tenant immediately prior to such transaction.
(f) Each assignee, sublessee or other transferee, other than
Landlord, shall assume, as provided in this Paragraph 9(f), all obligations
of Tenant under this Lease and shall be and remain liable jointly and
severally with Tenant for the payment of Rent and Additional Charges, and for
the performance of all the terms, covenants, conditions and agreements herein
contained on Tenant's part to be performed for
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the Term; provided, however, that the assignee, sublessee, mortgagee, pledgee
or other transferee shall be liable to Landlord for rent only in the amount
set forth in the Assignment or Sublease. No Assignment shall be binding on
Landlord unless the assignee or Tenant shall deliver to Landlord a
counterpart of the Assignment and an instrument in recordable form that
contains a covenant of assumption by the assignee satisfactory in substance
and form to Landlord, consistent with the requirements of this Paragraph
9(f), but the failure or refusal of the assignee to execute such instrument
of assumption shall not release or discharge the assignee from its liability
as set forth above.
(g) Landlord will approve within ten (10) days of receipt of
written notice the assignment of Tenant's interest in the lease or sublease
of the Premises by Tenant to an affiliate provided that (i) the affiliate
delivers to the Landlord concurrent with such assignment a written notice of
the assignment and an assumption agreement whereby the affiliate assumes to
perform, observe and abide by the terms, conditions, obligations, and
provisions of this lease, and (ii) the entity remains an affiliate. No
subletting or assignment by Tenant made pursuant to this Section shall
relieve Tenant of Tenant's obligations under this Lease. As used herein, the
term "affiliate" shall mean and collectively refer to a corporation or other
entity in which Tenant, (the "parent") owns directly or indirectly at least a
51 percent ownership interest.
10. INSURANCE AND INDEMNIFICATIONS.
(a) Landlord shall indemnify and hold Tenant harmless from and
against any and all claims or liability for any injury or damage to any
person or property (but excluding any consequential damages or loss of
business) occurring in, on, or about the Building to the extent such injury or
damage is caused by the negligence or willful misconduct of Landlord, its
agents, servants, or employees ("Landlord Parties").
(b) Landlord shall not be liable to Tenant, and Tenant hereby
waives all claims against Landlord Parties for any injury or damage to any
person or property in or about the Premises by or from any cause whatsoever
(other than the negligence or willful misconduct of Landlord Parties,
including Landlord's negligence or willful misconduct as related to
construction or property management), and without limiting the generality of
the foregoing, whether caused by water leakage of any character from the
roof, walls, basement, or other portion of the Premises or the Building, or
caused by gas, fire, oil, electricity, or any cause whatsoever, in, on, or
about the Premises, the Building or any part thereof (other than that caused
by the negligence or willful misconduct of Landlord parties). Tenant
acknowledges that any casualty insurance carried by Landlord will not cover
loss of income to Tenant or damage to the alterations in the Premises
installed by Tenant or Tenant's personal property located within the
Premises. Tenant shall be required to maintain the insurance described in
subparagraph (d) below during the Term.
(c) Tenant shall indemnify and hold Landlord harmless from and
defend Landlord against any and all claims or liability for any injury or
damage to any person or property whatsoever: (i) occurring in, on, or about
the Premises; or (ii) occurring in, on, or about any other portion of the
Project when such injury or damage shall be caused in whole or in part by the
negligence or willful misconduct by Tenant, its agents, servants, employees,
or invitees ("Tenant Parties"), except to the extent caused by negligence or
willful misconduct of Landlord Parties. Tenant further agrees to indemnify
and hold Landlord harmless from, and defend Landlord against, any and all
claims, losses, or liabilities (including damage to Landlord's property)
arising from (x) any breach of this Lease by Tenant and/or (y) the conduct of
any work or business of Tenant Parties in or about the Project, including,
but not limited to any release, discharge, storage or use of any hazardous
substance, hazardous waste, toxic substance, oil, explosives, asbestos, or
similar material.
(d) Tenant shall procure at its cost and expense and keep in effect
during the Term the following insurance: (i) commercial general liability
insurance including contractual liability with a minimum combined single
limit of liability of Two Million Dollars ($2,000,000). Such insurance shall
name Landlord as an additional insured, shall specifically include the
liability assumed hereunder by Tenant, and shall provide that it is primary
insurance, and not excess over or contributory with any other valid, existing
and applicable insurance in force for or on behalf of Landlord, and shall
provide that Landlord shall receive thirty (30) days' written notice from the
insurer prior to any cancellation or change of coverage; (ii) "all risk"
property insurance (including without limitation, boiler and machinery (if
applicable); sprinkler damage, vandalism and malicious mischief) on all
leasehold improvements installed in the Premises by Tenant at its expense (if
any), and on all Tenant's personal property. Such insurance shall be an
amount equal to full replacement cost of the aggregate of the foregoing and
shall provide coverage comparable to the coverage in the standard ISO All
Risk form, when such form is supplemented with the coverages required above;
(iii) worker's compensation insurance; and (iv) such other insurance as may
be required by the law. Tenant shall deliver policies of such insurance or
certificates thereof to Landlord on or before the Commencement Date, and
thereafter at least thirty (30) days before the expiration dates of expiring
policies; and, in the event Tenant shall fail to procure such insurance, or
to deliver such policies or certificates, Landlord may, at its option,
procure same for the account of Tenant, and the cost thereof shall be paid to
Landlord as Additional Charges within five (5) days after delivery to Tenant
of bills therefor.
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(e) The provisions of this paragraph 10 shall survive the
expiration or termination of this Lease with respect to any claims or
liability occurring prior to such expiration or termination.
11. WAIVER OF SUBROGATION. Landlord and Tenant ("Claiming Party") each
waive (i) their right against the other party ("Other Party") and any party
who would have a claim against the Other Party, and (ii) any subrogation
right of their insurance company, to recover for any damages in respect of
injury to persons or property, or for loss of rents or business interruption,
to the extent of receipt by the Claiming Party of proceeds of insurance in
respect of such damages. Landlord and Tenant shall each obtain from their
respective insurers under all policies of fire, theft, and other property
insurance maintained by either of them at any time during the Term insuring
or covering the Building or any portion thereof of its contents therein, a
waiver of all rights of subrogation which the insurer of one party might
otherwise, if at all, have against the other party, and Landlord and Tenant
shall each indemnify the other against any loss or expense, including
reasonable attorney's fees, resulting from the failure to obtain such waiver.
12. SERVICES AND UTILITIES.
(a) Landlord shall provide the maintenance and repairs described in
paragraph 7(a), except for damage occasioned by the act of Tenant, which
damage shall be repaired by Landlord at Tenant's expense.
(b) Subject to the provisions elsewhere herein contained and to the
rules and regulations of the Building, Tenant shall be responsible for
arranging for, and direct payment of the cost of, garbage pickup, janitorial,
water, electricity, gas, telephone and any and all other utilities and
services; and, Landlord shall cooperate with Tenant's efforts to arrange such
services. Tenant agrees at all times to cooperate fully with Landlord and to
abide by all the reasonable regulations and requirements which Landlord may
prescribe for the proper functioning and protection of the heating,
ventilating and air conditioning system.
(c) Tenant will not without the written consent of Landlord, which
consent shall not be unreasonably withheld or delayed, use any apparatus or
device in the Premises which, when used, puts an excessive load on the
Building or its structure or systems.
(d) Landlord shall not be in default hereunder or be liable for any
damages directly or indirectly resulting from, nor shall the rental herein
reserved be abated by reason of (i) the installation, use or interruption of
use of any equipment in connection with the foregoing utilities and services;
(ii) failure to furnish or delay in furnishing any services to be provided by
Landlord when such failure or delay is caused by Acts of God or the elements,
labor disturbances of any character, any other accidents or other conditions
beyond the reasonable control of Landlord, or by the making of repairs or
improvements to the Premises or to the Building; or (iii) the limitation,
curtailment, rationing or restriction on use of water or electricity, gas or
any other form of energy or any other service or utility whatsoever serving
the Premises or the Building. Furthermore, Landlord shall be entitled to
cooperate voluntarily in a reasonable manner with the efforts of national,
state or local governmental agencies or utilities suppliers in reducing
energy or other resources consumption.
13. TENANTS CERTIFICATES. Tenant, at any time and from time to time,
within ten (10) days from receipt of written notice from Landlord, will
execute, acknowledge and deliver to Landlord and, at Landlord's request, to
any prospective tenant, purchaser, ground or underlying lessor or mortgagee
of any part of the Building or the land upon which the Building is located or
any other party acquiring an interest in Landlord, a certificate of Tenant in
the form attached as EXHIBIT "D" and also containing any other information
that may reasonably be required by any of such persons. It is intended that
any such certificate of Tenant delivered pursuant to this Paragraph 13 may be
relied upon by Landlord and any prospective tenant, purchaser, ground or
underlying lessor or mortgage of any part of the Building or the land upon
which the Building is located, or such other party.
14. HOLDING OVER. Any holding over after the expiration of the Term with
the consent of Landlord shall be construed to be a tenancy from month to
month at one hundred twenty-five percent (125%) of the Rent herein specified
unless Landlord shall specify a different rent in its sole discretion,
together with an amount estimated by Landlord for the monthly Rent and
Additional Charges payable under this Lease, and shall otherwise be on the
terms and conditions herein specified so far as applicable. Any holding over
without Landlord's consent shall constitute a default by Tenant and entitle
Landlord to re-enter the Premises as provided in Paragraph 19.
15. SUBORDINATION. Without the necessity of any additional document
being executed by Tenant for the purpose of effecting a subordination, this
Lease shall be subject and subordinate at all times to: (i) all ground leases
or underlying leases which may now exist or hereafter be executed affecting
the Building or the land upon which the Building is situated or both; and
(ii) the lien of any mortgage or deed of trust which may now exist or
hereafter be executed in any amount for which the Building, land, ground
leases or underlying leases, or Landlord's interest or estate in any of said
items, is specified as security. Notwithstanding the foregoing, Landlord
shall have the right to subordinate or cause to be subordinated any such
ground leases or underlying leases or any such liens to this Lease. In the
event that any ground lease or underlying lease terminates for any reason or
any mortgage or deed of trust is foreclosed or a conveyance in lieu of
foreclosure is made for any reason, Tenant shall, notwithstanding any
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subordination, attorn to and become the Tenant of the successor in interest
to Landlord at the option of such successor in interest, and Tenant shall be
entitled to continue in possession of the Premises on the terms and
conditions of this Lease if and for so long as Tenant fully performs all of
its obligations hereunder. Tenant covenants and agrees to execute and deliver
upon demand by Landlord and in the form requested by Landlord, any additional
documents evidencing the priority or subordination of this Lease with respect
to any such ground leases or underlying leases or the lien of any such
mortgage or deed of trust so long as Tenant is provided with a reasonable
non-disturbance provision. Tenant hereby irrevocably appoints Landlord as
attorney-in-fact of Tenant to execute, deliver and record any such documents
in the name of and on behalf of Tenant if Tenant has not executed the same
within twenty (20) days after Landlord's written request.
16. RULES AND REGULATIONS. Tenant shall faithfully observe and comply
with the rules and regulations attached to this Lease as EXHIBIT "C" and all
reasonable modifications thereof and additions thereto from time to time put
into effect by Landlord. Landlord shall not be responsible for the
nonperformance by any other Tenant or occupant of the Building or the Project
of any said rules and regulations. In the event of an express and direct
conflict between the terms, covenants, agreements and conditions of this
Lease and those set forth in the rules and regulations, as modified and
amended from time to time by Landlord, this Lease shall control.
17. RE-ENTRY BY LANDLORD. Except in the case of emergency and upon
reasonable advance notice to Tenant, Landlord reserves and shall at all times
have the right to re-enter the Premises to inspect the same, to supply
janitor service and any other service to be provided by Landlord to Tenant
hereunder, to show the Premises to prospective purchasers, mortgagees or
tenants, to post notices of nonresponsibility or as otherwise required or
allowed by this Lease or by law, and to alter, improve or repair the Premises
and any portion of the Building and may for that purpose erect, use, and
maintain scaffolding, pipes, conduits, and other necessary structures in and
through the Premises where reasonably required by the character of the work
to be performed. Landlord shall not be liable in any manner for any
inconvenience, disturbance, loss of business, nuisance or other damage
arising from Landlord's entry and reasonable acts pursuant to this Paragraph
and Tenant shall not be entitled to an abatement or reduction of rent or
Additional Charges if Landlord exercises any rights reserved in this
paragraph. Tenant hereby waives any claim for damages 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
thereby, except for Landlord's gross negligence or willful misconduct. For
each of the aforesaid purposes, Landlord shall at all times have and retain a
key with which to un-lock all of the doors, in upon and about the Premises,
excluding Tenant's vaults and safes, or special security areas (designated in
advance), and Landlord shall have the right to use any and all means which
Landlord may deem necessary or proper to open said doors in an emergency, in
order to obtain entry to any portion of the Premises, and any entry to the
Premises, or portion thereof obtained by Landlord by any of said means, or
otherwise, shall not under any emergency circumstances be construed or deemed
to be a forcible or unlawful entry into, or a detainer of, the Premises, or
an eviction, actual or constructive, of Tenant from the Premises or any
portions thereof.
18. INSOLVENCY OR BANKRUPTCY. The appointment of a receiver to take
possession of all or substantially all of the assets of Tenant, or an
assignment of Tenant for the benefit of creditors, or any action taken or
suffered by Tenant under any insolvency, bankruptcy, reorganization or other
debtor relief proceedings, whether now existing or hereafter amended or
enacted, shall at Landlord's option constitute a breach of this Lease by
Tenant. Upon the happening of any such event or at any time thereafter, this
Lease shall terminate five (5) days after written notice of termination from
Landlord to Tenant. In no event shall this Lease be assigned or assignable
by operation of law or by voluntary or involuntary bankruptcy proceedings or
otherwise and in no event shall this Lease or any rights or privileges
hereunder be an asset of Tenant under any bankruptcy, insolvency,
reorganization or other debtor relief proceedings.
19. DEFAULT. The failure to perform or honor any covenant, condition
or representation made under this Lease shall constitute a default hereunder
by Tenant upon expiration of the appropriate grace period hereinafter
provided. Tenant shall have a period of three (3) business days from the date
of written notice from Landlord within which to cure any default in the
payment of Rent or Additional Charges. Tenant shall have a period of thirty
(30) days from the date of written notice from Landlord within which to cure
any other default under this Lease; provided, however, that with respect to
any default other than the payment of Rent or Additional Charges that cannot
reasonably be cured within thirty (30) days, the default shall not be deemed
to be uncured if Tenant commences to cure within thirty (30) days from
Landlord's notice and continues to prosecute diligently the curing thereof.
Upon an uncured default of this Lease by Tenant, Landlord shall have the
following rights and remedies in addition to any other rights or remedies
available to Landlord at law or in equity:
(a) The rights and remedies provided by California Civil Code, Section
1951.2, including but not limited to, recovery of the worth at the time of
award of the amount by which the unpaid Rent and Additional Charges for the
balance of the Term after the time of award exceeds the amount of rental loss
for the same period that the Tenant proves could be reasonably avoided, as
computed pursuant to subsection (b) of said Section 1951.2;
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(b) The rights and remedies provided by California Civil Code, Section
1951.4, that allows Landlord to continue this Lease in effect and to enforce
all of its rights and remedies under this Lease, including the right to
recover Rent and Additional Charges as they become due, for so long as
Landlord does not terminate Tenant's right to possession; provided, however,
if Landlord elects to exercise its remedies described in this Paragraph 19(b)
and Landlord does not terminate this Lease, and if Tenant requests Landlord's
consent to an assignment of this Lease or a sublease of the Premises at such
time as Tenant is in default, Landlord shall not unreasonably withhold its
consent to such assignment or sublease. Acts of maintenance or preservation,
efforts to relet the Premises or the appointment of a receiver upon
Landlord's initiative to protect its interest under this Lease shall not
constitute a termination of Tenant's rights to possession;
(c) The right to terminate this Lease by giving notice to Tenant in
accordance with applicable law;
(d) The right and power, as attorney-in-fact for Tenant, to enter
the Premises and remove therefrom all persons and property and, to store such
property in a public warehouse or elsewhere at the cost of and for the
account of Tenant, and to sell such property and apply such proceeds
therefrom pursuant to applicable California law. Landlord, as
attorney-in-fact for Tenant, may from time to time sublet the Premises or any
part thereof for such term or terms (which may extend beyond the Term) and at
such rent and such other terms as Landlord in its sole discretion may deem
advisable, with the right to make alterations and repairs to the Premises.
Upon each such subletting, (i) Tenant shall be immediately liable to pay to
Landlord, in addition to indebtedness other than Rent and Additional Charges
due hereunder, the cost of such subletting and such reasonable alterations
and repairs incurred by Landlord and the amount, if any, by which the Rent
and Additional Charges due hereunder for the period of such subletting (to
the extent such period does not exceed the Term) exceeds the amount to be
paid as Rent and Additional Charges for the Premises for such period; or (ii) at
the option of Landlord, rents received from such subletting shall be applied
first, to payment of any indebtedness other than Rent and Additional Charges
due hereunder from Tenant to Landlord, second, to the payment of any costs of
such subletting and of such alterations and repairs, third, to payment of
Rent and Additional Charges due, and unpaid hereunder; and the residue, if
any, shall be held by Landlord and applied in payment of future Rent and
Additional Charges as the same becomes due hereunder. If Tenant has been
credited with any rentals to be received by such subletting under option (i) and
such rentals shall not be promptly paid to Landlord by the subtenant(s),
or if such rentals received from such subletting under option (ii) during any
month be less than that to be paid during that month by Tenant hereunder,
Tenant shall pay any such deficiency to Landlord. Such deficiency shall be
calculated and paid monthly. For all purposes set forth in this paragraph
(d), Landlord is hereby irrevocably appointed attorney-in-fact for Tenant,
with power of substitution. The taking possession of the Premises by
Landlord, as attorney-in-fact for Tenant, shall not be construed as an
election on its part to terminate this Lease unless a written notice of such
intention be given to Tenant. Notwithstanding any such subletting without
termination, Landlord may at any time thereafter elect to terminate this
Lease for such previous breach; and,
(e) The right to have receiver appointed for Tenant, upon
application by Landlord, to take possession of the Premises and to apply any
rental collected from the Premises and to exercise all other rights and
remedies granted to Landlord as attorney-in-fact for Tenant pursuant to
subparagraph (d) above.
Landlord shall have a period of thirty (30) days from the date of written
notice from Tenant within which to cure any default under this Lease;
provided, however, that with respect to any default that cannot reasonably be
cured within thirty (30) days, the default shall not be deemed to be uncured
if Landlord commences to cure within thirty (30) days from Tenant's notice
and continues to prosecute diligently the curing thereof. Tenant agrees to
give any Mortgagee and/or Trust Deed Holders ("Mortgagee"), 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 Leases, or otherwise) of the address of such
Mortgagee. Tenant further agrees that if Landlord shall have failed to cure
such default within the time provided for in this Lease, then the Mortgagee
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 to cure such default shall be granted if within such
thirty (30) days Mortgagee 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 the Lease shall not be terminated while such remedies are
being diligently pursued.
20. DAMAGE BY FIRE, ETC. If the Premises or the Building are damaged
by fire or other casualty, Landlord shall forthwith repair the same, provided
that such repairs can be made within one hundred eighty (180) days after the
date of such damage under the laws and regulations of the federal, state and
local governmental authorities having jurisdiction thereof. In such event,
this Lease shall remain in full force and effect except that Tenant shall be
entitled to a proportionate reduction of Rent and Additional Charges while
such repairs to be made hereunder by Landlord are being made. Such reduction
of rent, if any, shall be based upon the proportion that the area of the
Premises rendered untenantable by such damage bears to the total area of the
Premises. Within twenty (20) days after the date of such damage, Landlord
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shall notify Tenant whether or not such repairs can be made within one
hundred eighty (180) days after the date of such damage and Landlord's
determination thereof shall be binding on Tenant. If such repairs cannot be
made within one hundred eighty (180) days from the date of such damage,
Landlord shall have the option within thirty (30) days after the date of such
damage either to: (i) notify Tenant of Landlord's intention to repair such
damage and diligently prosecute such repairs, in which event this Lease shall
continue in full force and effect and the Rent and Additional Charges shall
be reduced as provided herein; or (ii) notify Tenant of Landlord's election
to terminate this Lease as of a date specified in such notice, which date
shall not be less than thirty (30) days nor more that sixty (60)days after
notice is given. In the event that such notice to terminate is given by
Landlord, this Lease shall terminate on the date specified in such notice. If
Landlord cannot make such repairs within one hundred eighty (180) days, then
Tenant shall have the right to terminate the lease by providing written notice
to Landlord of such termination within the later of thirty (30) days following
Tenant's receipt of Landlord's notice of the time to repair or five (5) days
after Landlord's notice of its intent to repair, or not to repair, the
Premises. Such notice of intent to repair may be conditional upon Tenant's
agreement not to terminate the lease. In case of termination by either event,
the Rent and Additional Charges shall be reduced by a proportionate amount
based upon the extent to which such damage interfered with the business
carried on by Tenant in the Premises, and Tenant shall pay such reduced Rent
and Additional Charges up to the date of termination. Landlord agrees to
refund to Tenant any Rent and Additional Charges previously paid for any
period of time subsequent to such date of termination. The repairs to be made
hereunder by Landlord shall not include, and Landlord shall not be
required to repair, any damage by fire or other cause to the property of
Tenant or any repairs or replacements of any paneling, decorations, railings,
floor coverings or any alterations, additions, fixtures or improvements
installed on the Premises by or at the expense of Tenant. Tenant hereby
waives the provisions of Section 1932.2, and Section 1933.4, of the Civil
Code of California. Notwithstanding anything contained herein to the
contrary, if a Major Casualty occurs with respect to any portion of the
Building, and the net insurance proceeds obtained as a result of such casualty
are ninety percent (90%) or a lesser percentage of the cost of restoration,
rebuilding or replacement, then Landlord shall not be obligated to undertake
such restoration, rebuilding or replacement unless Landlord elects to do so
in writing. For the purpose of this Lease, a "Major Casualty" shall mean a
casualty that renders unusable twenty percent (20%) or more of the Net
Rentable Area of the Building or which materially adversely affects the use
of such Building.
21. EMINENT DOMAIN. If any part over 15% of the Premises shall be
taken or appropriated under the power of eminent domain or conveyed in lieu
thereof, either party shall have the right to terminate this Lease at its
option. If any part of the Building shall be taken or appropriated under
power of eminent domain or conveyed in lieu thereof, Landlord may terminate
this Lease at its option. In either of such events, Landlord shall receive
(and Tenant shall assign to Landlord upon demand from Landlord) any income,
rent, award or any interest therein which may be paid in connection with the
exercise of such power of eminent domain, and Tenant shall have no claim
against Landlord for any part of sum paid by virtue of such proceedings,
whether or not attributable to the value of the unexpired term of this Lease,
except that Tenant shall be entitled to petition the condemning authority for
the following: (i) the unamortized cost of any tenant improvements paid for
by Tenant (and not reimbursed by Landlord); (ii) the value of Tenant's trade
fixtures; and, (iii) Tenant's relocation costs. If a part of the Premises
shall be so taken or appropriated or conveyed and neither party hereto shall
elect to terminate this Lease and the Premises have been damaged as a
consequence of such partial taking or appropriation or conveyance, Landlord
shall restore the Premises continuing under this Lease at Landlord's cost and
expense; provided, however, that Landlord shall not be required to repair or
restore any injury or damage to the property of Tenant or to make any repairs
or restoration of any Alterations installed on the Premises by or at the
expense of Tenant. Thereafter, the Rent and Additional Charges to be paid
under this Lease for the remainder of the Term shall be proportionately
reduced, such that thereafter the amounts to be paid by Tenant shall be in
the ratio that they are of the portion of the Premises not so taken bears to
the total area of the Premises prior to such taking. Notwithstanding anything
to the contrary contained in this Paragraph 21, if the temporary use or
occupancy of any part of the Premises shall be taken or appropriated under
power of eminent domain during the Term, this Lease shall be and remain
unaffected by such taking or appropriation and Tenant shall continue to pay
in full all Rent and Additional Charges payable hereunder by Tenant during
the term; in the event of any such temporary appropriation or taking. Tenant
shall be entitled to receive that portion of any award which represents
compensation for the use of or occupancy of the Premises during the Term, and
Landlord shall be entitled to receive that portion of any award which
represents the cost of restoration of the Premises and the use and occupancy
of the Premises after the end of the Term.
22. SALE BY LANDLORD. In the event of a sale or conveyance by
Landlord of the Building, any such sale or conveyance shall operate to
release Landlord from any future liability upon any of the covenants or
conditions, express or implied, herein contained in favor of Tenant, and in
such event Tenant agrees to look solely to the successor in interest of
Landlord in and to this Lease. This Lease shall not be affected by any such
sale, and Tenant agrees to attorn to the purchaser or assignee.
Lease Agreement - Page 12
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23. RIGHT OF LANDLORD TO PERFORM. All covenants and agreements to be
performed by Tenant under any of the terms of this Lease shall be performed
by Tenant at Tenant's sole cost and expense and without any abatement of rent
or additional charges. If Tenant shall fail to pay any sum of money, other
than rent or additional charges, 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 continue for thirty (30) days after notice thereof by Landlord,
Landlord may, but shall not be obligated so to do, and without waiving or
releasing Tenant from any obligations of Tenant, make any such payment or
perform any such act on Tenant's part to be made or performed as provided in
this Lease. All sums so paid by Landlord and all necessary incidental costs
together with interest thereon at the maximum rate permitted by law, from the
date of such payment by Landlord shall be payable as additional charges to
Landlord on demand.
24. SURRENDER OF PREMISES.
(a) At the end of the Term or any renewal thereof or other sooner
termination of this Lease, Tenant will peaceably deliver to Landlord
possession of the Premises, together with all improvements or additions upon
or belonging to the same, by whomsoever made, in the same condition as
received, or first installed, subject to normal wear and tear and the rights
and obligation of Tenant concerning casualty damage pursuant to Paragraph
20, damage by fire, earthquake, Act of God, or the elements alone excepted.
Tenant may, upon the termination of this Lease, remove all movable furniture
and equipment belonging to Tenant, at Tenant's sole cost, title to which
shall be in Tenant until such termination, provided that Tenant repairs any
damage caused by such removal. Property not so removed shall be deemed
abandoned by Tenant, and title to the same shall thereupon pass to Landlord.
Upon request by Landlord, and unless otherwise agreed to in writing by
Landlord, Tenant shall remove, at Tenant's sole cost, any or all Alterations
to the Premises installed by or at the expense of Tenant and all movable
furniture and equipment belonging to Tenant which may be left by Tenant and
repair any damage resulting from such removal.
(b) The voluntary or other surrender of this Lease by Tenant, or a
mutual cancellation thereof, shall not work 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 it of any or
all such subleases or subtenancies.
25. WAIVER. If either Landlord or Tenant waives the performance of any
term, covenant or condition contained in this Lease, such waiver shall not be
deemed to be a waiver of any subsequent breach of the same or any other term,
covenant or condition contained herein. Furthermore, the acceptance of Rent
or Additional Charges by Landlord shall not constitute a waiver of any
preceding breach by Tenant of any term, covenant or condition of this Lease,
regardless of Landlord's knowledge of such preceding breach at the time
Landlord accepted such Rent or Additional Charges. Failure by Landlord to
enforce any of the terms, covenants or conditions of this Lease for any
length of time shall not be deemed to waive or to decrease the right of
Landlord to insist thereafter upon strict performance by Tenant. Waiver by
Landlord or any term, covenant or condition contained in this Lease may only
be made by a written document signed by Landlord.
26. NOTICES. Except as otherwise expressly provided in this Lease, any
bills, statements, notices, demands, requests or other communications given or
required to be given under this Lease shall be effective only if rendered or
given in writing, sent by registered or certified mail or delivered
personally, (i) to Tenant (A) at Tenant's address set forth in the Basic
Lease Information, if sent prior to Tenant's taking possession of the
Premises, or (B) at the Premises if sent subsequent to Tenant's taking
possession of the Premises, or (C) at any place where Tenant may be found if
sent subsequent to Tenant's vacating, deserting, abandoning or surrendering
the Premises; or (ii) to Landlord at Landlord's address set forth in the
Basic Lease Information; or (iii) to such other address as either Landlord or
Tenant may designate as its new address for such purpose by notice given to
the other in accordance with the provisions of this Paragraph 27. Any such
bill, statement, notice, demand, request or other communication shall be
deemed to have been rendered or given two (2) days after the date when it
shall have been mailed as provided in this Paragraph 27 if sent by registered
or certified mail, or upon the date personal delivery is made. If Tenant is
notified of the identity and address of Landlord's mortgagee or ground or
underlying lessor, Tenant shall give to such mortgagee or ground or
underlying lessor notice of any default by Landlord under the terms of this
Lease in writing sent by registered or certified mail, and such mortgagee or
ground or underlying lessor shall be given a reasonable opportunity to cure
such default prior to Tenant exercising any remedy available to it.
27. TAXES PAYABLE BY TENANT.
At lease ten (10) days prior to delinquency Tenant shall pay all taxes
levied or assessed upon Tenant's equipment, furniture, fixtures and other
personal property located in or about the Premises. If the assessed value of
Landlord's property is increased by the inclusion therein of a value placed
upon Tenant's equipment, furniture, fixtures or other personal property,
Tenant shall pay to Landlord, upon written demand, the taxes so levied
against Landlord, or the proportion thereof resulting from said increase in
assessment.
28. ABANDONMENT. Tenant shall not abandon the Premises at any time
during the Term, and if Tenant shall abandon or surrender the Premises or be
dispossessed by process of law, or otherwise, any personal property belonging
to Tenant and left on the Premises shall, at the option of
Lease Agreement - Page 13
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Landlord, be deemed to be abandoned and title thereto shall thereupon pass to
Landlord, except such property as may be mortgaged to Landlord.
Notwithstanding anything to the contrary contained herein, Tenant shall not
be allowed to vacate the Premises is such would result in a termination of
Landlord's insurance. Upon receiving Tenants request for such, Landlord shall
request that its insurer notify Tenant whether vacating the Premises will
result in a cancellation of the Building's insurance for the current policy
year.
29. SUCCESSORS AND ASSIGNS. Subject to the provisions of Paragraph 9,
the terms, covenants and conditions contained herein shall be binding upon
and insure to the benefit of the parties hereto and their respective legal
and personal representatives, successors and assigns.
30. ATTORNEY'S FEES. If Tenant or Landlord brings any action for any
relief against the other, declaratory or otherwise, arising out of this
Lease, including any suit by Landlord for the recovery of Rent or Additional
Charges or possession of the Premises, the losing party shall pay to the
prevailing party a reasonable sum for attorney's fees, which shall be deemed
to have accrued on the commencement of such action and shall be paid whether
or not the action is prosecuted to judgment.
31. LIGHT AND AIR. Tenant covenants and agrees that no diminution of
light, air or view by any structure which may hereafter be erected (whether
or not by Landlord) shall entitle Tenant to any reduction of rent under this
Lease, result in any liability of Landlord to Tenant, or in any other way
affect this Lease or Tenant's obligations hereunder.
32. SECURITY DEPOSIT. Concurrently with Tenant's execution of this
Lease, Tenant shall deposit with Landlord the sum specified in the Basic
Lease Information, which sum shall be held by Landlord as a security deposit
for the faithful performance by Tenant of all the terms, covenants and
conditions of this Lease to be kept and performed by Tenant. Tenant agrees
that Landlord may apply the security deposit to remedy any failure by Tenant
to repair or maintain the Premises or to perform any other terms, covenants
and conditions contained herein. If Tenant is in compliance with all terms,
covenants and conditions of this lease at the expiration of the Term,
Landlord will, within thirty (30) days after the termination hereof, promptly
return the security deposit to Tenant or the last permitted assignee of
Tenant's interest hereunder at the expiration of the Term. Should Landlord
use any portion of the security deposit to cure any default by Tenant
hereunder, Tenant shall within ten (10) days replenish the security deposit
to the original amount; Tenant's failure to do so shall be a material breach
of this Lease. Landlord shall not be required to keep the security deposit
separate from its general funds, and Tenant shall not be entitled to interest
on any such deposit. Upon the occurrence of any events of default described
in Paragraph 19 of this Lease the security deposit may be applied by Landlord
to the extent required to compensate Landlord for damages incurred, or to
reimburse Landlord as provided herein, in connection with any such event of
default.
33. CORPORATE AUTHORITY: FINANCIAL INFORMATION. If Tenant signs as a
corporation each of the persons executing this Lease on behalf of Tenant does
hereby covenant and warrant that Tenant is a duly authorized and existing
corporation, that Tenant has and is qualified to do business in California,
that the corporation has full right and authority to enter into this Lease,
and that each and both of the persons signing on behalf of the corporation
were authorized to do so. Upon Landlord's request, Tenant shall provide
Landlord with evidence reasonably satisfactory to Landlord confirming the
foregoing covenants and warranties. Tenant hereby further covenants and
warrants to Landlord that all financial information and other descriptive
information regarding Tenant's business, which has been or shall be furnished
to Landlord, is and shall be accurate and complete.
34. PARKING. Tenant shall have the right to use the number of the
Building's parking spaces as noted in the Basic Lease Information. These
spaces shall be used in common with other tenants or occupants of the
Building, if any, subject to the rules and regulations of Landlord for such
parking facilities which may be established or altered by Landlord at any
time or from time to time during the term.
35. MISCELLANEOUS.
(a) The term "Premises" wherever it appears herein includes and
shall be deemed or taken to include (except where such meaning would be
clearly repugnant to the context) the office space demised and improvements
now or at any time hereafter comprising or built in the space hereby demised.
The paragraph headings herein are for convenience of reference and shall in
no way define, increase, limit or describe the scope or intent of any
provision of this Lease. The term "Landlord" shall include Landlord and its
successors and assigns. In any case where this Lease is signed by more than
one person, the obligations hereunder shall be joint and several. The term
"Tenant" or any pronoun used in place thereof shall indicate and include the
masculine or feminine, the singular or plural number, individuals, firms or
corporations, and their and each of their respective successors, executors,
administrators, and permitted assigns, according to the context hereof.
(b) Time is of the essence of this Lease and all of its provisions.
This Lease shall in all respects be governed by he laws of the State of
California. This Lease, together with its exhibits, contains all the
agreements to the parties hereto and supersedes and previous negotiations.
There have been no representations made by the Landlord or understandings
made between the parties other than those set forth
Lease Agreement - Page 14
<PAGE>
in this Lease and its exhibits. This Lease may not be modified except by a
written instrument by the parties hereto.
(c) If for any reason whatsoever any of the provisions hereof shall be
unenforceable or ineffective, all of the other provisions shall be and remain
in full force and effect.
(d) Upon Tenant paying the Rent and Additional Charges and performing
all of the Tenant's obligations under this Lease, Tenant may peacefully and
quietly enjoy the Premises during the Term as against all persons or entities
lawfully claiming by or through Landlord; subject, however, to the provisions
of this Lease.
36. TENANT'S REMEDIES. Tenant shall look solely to Landlord's interest
in the Building for the recovery of any judgment from Landlord. Landlord, or
if Landlord is a partnership, its partners whether general or limited, or if
Landlord is a corporation, its directors, officers or shareholders, shall
never be personally liable for any such judgment. Any lien obtained to
enforce any such judgment and any levy of execution thereon shall be subject
and subordinate to any lien, mortgage or deed of trust.
37. REAL ESTATE BROKERS. Each party represents that it has not had
dealings with any real estate broker, finder or other person with respect to
this Lease in any manner, except for any broker named in the Basic Lease
Information, whose fees or commission, if earned, shall be paid as provided
in the Basic Lease Information. Each party shall hold harmless the other
party from all damages resulting from any claims that may be asserted against
the other party by any other broker, finder or other person with whom the
other party has or purportedly has dealt.
38. LEASE EFFECTIVE DATE. Submission of this instrument for examination
or signature by Tenant does not constitute a reservation of or option for
lease, and it is not effective as a lease or otherwise until execution and
delivery by both Landlord and Tenant.
39. SIGNAGE. Tenant shall be allowed to place a company sign(s) in a
manner similar to current tenants (Formtek and Lockheed). Any sign must
conform to all applicable codes, ordinances, and C,C&R's and be approved by
Landlord (size, color, placement, style, etc.) prior to installation.
40. OPTION TO RENEW. Upon the condition that Tenant is not then in
default under the Lease beyond any applicable grace period, Tenant shall have
two (2) options to renew the Lease for a period of five (5) years each
("Extension Terms"). The exercise of said options shall require not less than
twelve (12) months prior written notice from Tenant to Landlord prior to the
expiration of the term preceding said Extension Term. In such written notice,
Tenant must unconditionally elect to extend the Term. The Monthly Base Rent
for the Extension Term shall be the greater of (i) the Fair Market Rental
Value or (ii) the rental rate in effect during the last month of the Term
immediately preceding the Extension Term. The Fair Market Rental Value shall
be determined as noted below:
41. FAIR MARKET RENTAL VALUE. For the purposes of the Lease, the term
"Fair Market Rental Value" shall mean the annual amount per rentable square
foot that Landlord has accepted in current transactions between
non-affiliated parties from new, non-expansion, non-renewal and non-equity
tenants of comparable credit-worthiness, for comparable space, for a
comparable use for a comparable period of time ("Comparable Transactions") in
the Building, of if there are not a sufficient number of Comparable
Transactions in the Building, what a comparable landlord of a comparable
building in the vicinity of the Building in Moffett Park area of Sunnyvale
would accept in Comparable Transactions. In any determination of Comparable
Transactions appropriate consideration shall be given to the annual rental
rates per rentable square foot, the standard of measurement by which the
rentable square footage is measured, the ratio of rentable square footage to
useable square footage, the type of escalation clause, the efficiency of the
space (i.e. whether increases in additional rent are determined on a net or
gross basis, and if gross, whether such increases are determined according to
a base year or base dollar expense stop), the extent of Tenant's liability
under the Lease, abatement provisions reflecting free rent, length of the
lease term, size and location of the premises being leased, level and
suitability of tenant improvements (and reflecting the restoration allowance
provided for in Paragraph 5), extent of service provided, and other generally
applicable conditions of tenancy for such Comparable Transactions. The intent
is that Tenant will pay the same rent that would otherwise be paid in
Comparable Transactions.
Landlord shall provide written notice of Tenant of Landlord's opinion of Fair
Market Rental Value within thirty (30) days after Tenant provides the notice
to Landlord exercising Tenant's option rights which require a calculation of
the Fair Market Rental Value; provided, however, Landlord shall not be
obligated to provide such notice more than twelve (12) months before the date
when the Fair Market Rental Value is to become effective. Tenant shall have
fifteen (15) days ("Tenant's Review Period") after receipt of Landlord's
notice of the new rental within which to accept such rental. In the event
Tenant fails to accept in writing such rental proposed by Landlord then such
proposal shall be deemed rejected, and Landlord and Tenant shall attempt to
agree upon such Fair Market Rental Value, using their best good faith
efforts. If Landlord and Tenant fail to reach agreement within fifteen (15)
days following Tenant's Review Period ("Outside Agreement Date"), then each
party shall place in a separate sealed envelope their final proposal as to
Fair Market Rental Value and such determination shall be submitted to
arbitration in accordance with subsections (a) through (e) below.
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In the event that Landlord fails to timely generate the initial written
notice of Landlord's opinion of the Fair Market Rental Value which triggers
the negotiation period of this Paragraph, then Tenant may commence such
negotiations by providing the initial notice, in which event Landlord shall
have fifteen (15) days ("Landlord's Review Period") after receipt of Tenant's
notice of the new rental within which to accept such rental. In the event
Landlord fails to accept in writing such rental proposed by Tenant, then such
proposal shall be deemed rejected, and Landlord and Tenant shall attempt in
good faith to agree upon such Fair Market Rental Value, using their best good
faith efforts. If Landlord and Tenant fail to reach agreement within fifteen
(15) days following Landlord's Review Period (which shall be, in such event,
the "Outside Agreement Date" in lieu of the above definition of such date),
then each party shall place in a separate sealed envelope their final
proposal as to Fair Market Rental Value and such determination shall be
submitted to arbitration in accordance with subsections (a) through (e) below.
(a) Landlord and Tenant shall meet with each other within five (5)
business days of the Outside Agreement Date and exchange the sealed envelopes
and then open such envelopes in each other's presence. If Landlord and Tenant
do not mutually agree upon the Fair Market Rental Value within one (1)
business day of the exchange and opening of envelopes, then, within ten (10)
business days of the exchange and opening of the envelopes Landlord and
Tenant shall agree upon and jointly appoint a single arbitrator who shall by
profession be a real estate lawyer or broker who shall have been active over
the five (5) year period ending on the date of such appointment in the
leasing of commercial office properties in the vicinity of the Building.
Neither Landlord nor Tenant shall consult with such broker or lawyer as to
his or her opinion as to Fair Market Rental Value prior to the appointment.
The determination of the arbitrator shall be limited solely to the issue of
whether Landlord's or Tenant's submitted Fair Market Rental Value for the
Leased Premises is the closest to the actual Fair Market Value for the Leased
Premises as determined by the arbitrator, taking into account the
requirements of this Paragraph. Such arbitrator may hold such hearings and
require such briefs as the arbitrator, in his or her sole discretion, determines
is necessary. In addition, Landlord or Tenant may submit to the arbitrator
with a copy to the other party within five (5) business days after the
appointment of the arbitrator any market data and additional information that
such party deems relevant to the determination of Fair Market Rental Value
("FMRV Data") and the other party may submit a reply in writing within five
(5) business days after receipt of such FMRV Data.
(b) The arbitrator shall, within thirty (30) days of his or her
appointment, reach a decision as to whether the parties shall use Landlord's
or Tenant's submitted Fair Market Rental Value, and shall notify Landlord and
Tenant of such determination.
(c) The decision of the arbitrator shall be binding upon Landlord and
Tenant.
(d) If Landlord and Tenant fail to agree upon and appoint an arbitrator,
then the appointment of the arbitrator shall be made by the Presiding Judge
of the Santa Clara Superior Court, or, if he or she refuses to act, by any
state or federal judge in whose court venue would be proper to adjudicate a
dispute over this Lease.
(e) Landlord and Tenant shall each pay any and all costs incurred by
either Landlord or Tenant, respectively, in connection with this arbitration;
provided, however, that the cost of the arbitrator shall be paid by Landlord
and Tenant equally.
From and after the commencement of the Extension Term, all of the other
terms, covenants and conditions of the Lease shall also apply; provided,
however, that (i) Rent shall be revised as herein provided; and (ii) Tenant
shall have no further rights to extend the Term.
42. HAZARDOUS SUBSTANCE LIABILITY: Landlord has delivered to Tenant the
following reports which were prepared by Harding Lawson Associates concerning
the Building and the adjacent properties: (i) Report - Phase I Environmental
Site Assessment Amendment for 1327 Orleans Drive, Sunnyvale, California,
dated March 16, 1995, (ii) Phase I Environmental Site Assessment for 1327
Orleans Drive, Sunnyvale, California, dated December 16, 1994, and (iii)
Report - Phase I Preliminary Hazardous Materials, Site Assessment for Orleans
Drive and Crossman Avenue Properties, Sunnyvale, California, dated May 7,
1990. The Landlord represents and warrants that to its actual knowledge,
except as set forth in the reports noted in the preceding sentence, the
Premises and Project are presently free of underground storage tanks and
Hazardous Substances, the presence of which would require remediation under
any applicable Environmental Laws (as hereinafter defined). Landlord's actual
knowledge is limited to the knowledge as included in the reports listed
above, without any duty of inquiry or investigation. Except as set forth in
this Paragraph 42, Landlord has made absolutely no representations or
warranties to Tenant regarding Hazardous Substances. Landlord represents that
it has received no written notice of any violation or claimed violation with
respect to the presence of toxic or Hazardous Substances on, in or under the
Project or of any pending or contemplated investigation or other action
relating thereto.
(a) DEFINITIONS.
DEFINITION OF HAZARDOUS SUBSTANCES. For the purpose of this Lease,
"Hazardous Substances" shall be defined, collectively, as oil, flammable
explosives, asbestos, radioactive materials, hazardous wastes, toxic or
contaminated substances or similar materials, including, without limitations,
any substances which are "hazardous substances," "hazardous wastes,"
"hazardous materials" or "toxic substances" or words of similar import under
applicable Environmental Laws.
Lease Agreement - Page 16
<PAGE>
DEFINITION OF ENVIRONMENTAL LAWS. For purposes of this Lease,
"Environmental Laws" shall be defined as any and all present and future
federal, state or local statutes, laws, regulations, rules, ordinances, codes,
licenses, permits, orders, approvals, plans, consent decrees, authorizations,
injunctions, duties under the common law, and similar items, of all
governmental agencies, departments, commissions, boards, bureaus or
instrumentalities of governing jurisdictions relating to protection of human
health and safety (including health and safety in the workplace) and the
indoor or outdoor environment, including without limitation, all requirements
relating to emissions, discharges or Releases (as defined under the
Environmental Laws) or threatened Releases of Hazardous Substances into the
environment, including without limitation, ambient air, surface water,
groundwater, or land or otherwise relating to Hazardous Substance activities,
or the clean-up or other remediation thereof.
(b) TENANT INDEMNITY. Tenant hereby releases Landlord from any liability
for, waives all claims against Landlord and hereby agrees to indemnify,
defend and hold harmless Landlord, its employees, partners, agents, lenders,
subsidiaries and affiliate organizations, and the respective directors,
officers, agents, attorneys and employees of each of the foregoing, against
any and all claims, suits, loss, costs (including costs of investigation,
clean up, monitoring, restoration and reasonable attorney fees), damage or
liability, whether foreseeable or unforeseeable, by reason of property damage
(including diminution in the value of the property of Landlord), personal
injury or death directly arising from or related to Hazardous Substances
released, manufactured, discharged, disposed, used or stored on, in, or under
the Property or Premises during the initial Term and any extensions of this
Lease, regardless of who caused the same, except for Hazardous Substance (i)
(A) originating on property which is not leased, owned or otherwise used or
controlled by Tenant and (B) which migrates through the air, groundwater or
otherwise to the Premises, or (ii) which was present on the Premises prior to
Tenant's first occupancy of the Premises and was not caused by Tenant, its
employees, contractors, invitees, guests, sublessees, agents, assignees,
licensees or servants. The provisions of this Tenant Indemnity regarding
Hazardous Substances shall survive the termination of the Lease. In the event
that Tenant is required to undertake remediation of Hazardous Substances in,
on or under the Premises or Property, then Landlord shall have the right to
reasonably approve of any and all contractors hired by Tenant to perform such
remedial work. All such remedial work shall be performed in compliance with
all applicable laws, ordinances and regulations and to the reasonable
satisfaction of Landlord. Appearance of a Hazardous Substance in, on or under
the Premise or Property as a result of Tenant's or its employees,
contractors, guests, invitees, sublessees, agents, assignees, licenses or
servants acts or omissions shall not be deemed an occurrence of damage or
destruction subject to the terms of the Lease.
(c) LANDLORD INDEMNITY. Landlord hereby releases Tenant from any
liability for, waives all claims against Tenant and hereby agrees to
indemnify, defend and hold harmless Tenant, its officers, employees, and
agents to the extent of Landlord's interest in the Project, against any and
all actions by any governmental agency for clean up of Hazardous Substances
on or under the Premises or Property, including costs of legal proceedings,
investigation, clean up, monitoring, and restoration associated therewith,
including reasonable attorney fees, if, and to the extent, the Hazardous
Substances occur on the Property or Premises under the following
circumstances: (i) the contamination of the Premises or Property was caused
by the migration of Hazardous Substances from any off-site property during
the Term of this Lease and in violation of any Environmental Laws; provided,
however, that this subparagraph (i) and subparagraph (ii) below shall not
apply to require any lender acquiring the Landlord's interest in the Premises
or Property through foreclosure or deed in lieu of foreclosure to indemnify,
defend or hold harmless Tenant, its officers, employees, and agents (but such
a lender would continue to release Tenant from any liability for and would
waive all such claims relating to this subparagraph (i) against Tenant);
(ii) Hazardous Substances were released or disposed of on, in, or under the
Premises or Property prior to Tenant's first occupancy unless caused by
Tenant, its employees, contractors, guests, invitees, sublessees, agents,
assignees, licensees or servants, or; (iii) the contamination of the Premises
or Property was caused by the release, disposal, use or storage of Hazardous
Substances in, on or about the Premises by Landlord, its employees,
contractors, invitees, guests, agents, licensees or servants. The provisions
of this Landlord Indemnity regarding Hazardous Substances shall survive the
termination of the Lease.
(d) OBLIGATION TO INFORM. If either party shall receive written notice
or other written communication concerning any actual, alleged, suspected, or
threatened violation of contamination or site response in connection with the
Premises, Building and/or Project or past or present activities of any person
thereon, including, without limitation, notice or other written communication
concerning any actual or threatened investigation, inquiry, lawsuit, claim,
citation, directive, summons, proceeding, complaint, notice, order, writ or
injunction, relating to the same, then such party shall deliver to the other
party, as soon as reasonably possible, but in any event within ten days of
the receipt of such written notice, copies of any documents evidencing the
same.
(e) Tenant shall not use, without Landlord's reasonable approval, any
Hazardous Substances within the Building, except for very immaterial amounts
of Hazardous Substances incidental to its office use, including, but not
limited to, copier toner, cleaning fluids, and ink. To the extent that Tenant
uses Hazardous Substances incidental to its office use, it shall comply with
any Environmental Laws.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of
the date first above written.
LANDLORD
Lease Agreement - Page 17
<PAGE>
CARIBBEAN/GENEVA INVESTORS
a California partnership
By: [ILLEGIBLE]
-----------------------------------
Its:[ILLEGIBLE]
-----------------------------------
TENANT
MACROVISION CORPORATION
a California corporation
By: /s/ Robert J. Netter, Jr.
-----------------------------------
Its: Vice President of Finance/CFO
-----------------------------------
Lease Agreement - Page 18
<PAGE>
EXHIBIT "A"
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[MAP]
<PAGE>
EXHIBIT "B"
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WORK LETTER
1. Landlord shall furnish and install the Base Building provided for in
Paragraph 2 at Landlord's expense and, at Tenant's expense, the additional
work to complete the Premises ("Tenant Improvements") normally performed by
the construction trades, required by the plans and specifications approved by
Landlord and Tenant pursuant to this Work Letter. The quantities, character
and manner of installation of all of the foregoing work shall be subject to
the limitations imposed by any applicable regulations, laws, ordinance, codes
and rules.
2. The Landlord shall present, and the tenant shall accept, the Building
on an "as-is" basis except with regard to Landlord's obligations concerning
code related upgrades, as described in Paragraph 10 hereof, and as otherwise
provided in the Lease.
3. Tenant shall provide Landlord's architect and engineers with
sufficient instructions (see Exhibit B-1) to enable Landlord's architect and
engineers to prepare complete plans and specifications for the Tenant
Improvements. The cost of space planning and preparing the working drawings
for Tenant Improvements or any change to the original instruction and/or plans
and specifications shall be paid by Tenant.
4. Subject to the terms of Paragraph 10 hereof, Tenant shall bear the
cost of Tenant Improvements. Any modifications requested by Tenant to Base
building work shall be at Tenant's expense.
5. Landlord and Tenant shall diligently pursue the preparation of all
plans and specifications for Tenant Improvements. All such plans and
specifications shall be performed by Landlord's architect and be subject to
approval by Landlord.
6. When the plans and specifications are complete and approved by
Landlord and Tenant, which shall be accomplished on or before Tenant's Plan
Delivery Date, as specified on the Basic Lease Information, Landlord shall
obtain a cost estimate for Tenant Improvements from Landlord's contractor, the
costs and quality of which are within industry standards. If the cost
estimate exceeds any allowance given by Landlord to Tenant for Tenant
Improvements and Tenant is obligated to pay for such excess costs, the cost
estimate shall be submitted to Tenant. Tenant shall approve or disapprove
such estimate within three (3) business days. Failure to approve within such
period shall constitute approval. If disapproved, Tenant shall provide new
sufficient instruction within such three (3) business days for the revision of
plans and cost estimates for approval by Tenant. Failure to provide such
instruction within such period shall entitle Landlord to terminate this
Lease. Tenant shall be obligated to approve the cost estimate if the cost is
within any allowance provide by Landlord or any greater budget approved by
Tenant. If the cost estimate is in excess of the allowance or such greater
budget, Tenant shall provide new sufficient instruction which will reduce the
cost estimate for Tenant Improvements to a level acceptable to Tenant and
within any allowance provided by Landlord within ten (10) days after receipt
of the cost estimate (or one revision thereof, if Tenant requests a change in
plans and specifications to reduce costs).
7. After receipt and approval of Tenant's plans, specifications and cost
estimate, Landlord shall administer the construction of Tenant Improvements
in accordance with the plans and specifications; provided, however, that
Landlord shall not be required to install any Tenant Improvements which do
not conform to the plans and specifications for the Building, or do not
conform t