1
EXHIBIT 10.10
SUBLEASE AGREEMENT
SUBLEASE dated as of the ______ day of April, 1998, between
Computervision Corporation, a Delaware corporation having an office at ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Sublessor"), and InterVU, Inc., a
Delaware corporation having an office located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ("Sublessee").
1. Demise and Term: Conditions of Sublease: Parking. Sublessor hereby
leases to Sublessee, and Sublessee hereby hires from Sublessor, that certain
real property, consisting of approximately 23,575 square feet of space, and
containing the entire second floor, in the premises located it ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, as more particularly described in Exhibit A
annexed hereto and made a part hereof (the "Subleased Premises"), together with
all appurtenances, rights, privileges and easements pertaining to the Subleased
Premises and any and all existing fixtures and improvements contained therein as
of the date of this Agreement. The Subleased Premises are a portion of the
premises leased to Sublessor under the Main Lease (as defined in Section 2,
herein) The term of this Sublease shall, commence on the later of (i) the day
which is thirty (30) days after the Agreed Approvals, as defined below, are
obtained, or (ii) May 1, 1998, (the "Commencement Date") and shall end on June
19, 2003. If, the Commencement Date is delayed for more than thirty (30) days
after May 1, 1998, due to: 1) Lessor's' failure to consent to this Lease
Agreement or 2) Sublessor's actions, Sublessee may, at its option, by notice in
writing to Sublessor, cancel this Sublease, in which event the parties shall be
discharged from all obligations hereunder, except that Sublessor shall refund
all prepaid Rent and the entire Security Deposit received by Sublessor. As part
of Lessor's consent to this Sublease, which Sublessor shall act diligently to
obtain from Lessor by written request made to Lessor no later than seven (7)
days after the mutual execution of this Agreement.
As used herein, "Agreed Approvals" shall mean the following: (a)
Sublessor has received the consent of Lessor (as defined in the Main Lease) for
this Sublease and (b) the consent of Lessor to building plans for any Sublessee
Improvements, including Sublessee's proposed signage. Sublessee shall submit to
Sublessor, no later than March 31, 1998, plans and specifications (the "Plans")
for Sublessee's proposed Improvements and signage as defined herein.
The Sublessor shall provide ninety-four (94) parking spaces for
Sublessee's use in the parking lot for the Complex. All parking shall be
provided at no cost to the Sublessee, during the Term. Such parking rights shall
include the non-exclusive use of visitor reserved parking for Sublessee's
visitors and shall be subject to the Lessor's "Parking Rules" in the Main Lease.
2. Subordinate to Main Lease; Quiet Enjoyment. This Sublease is subject
and subordinate to (a) the lease (the "Lease") dated August 29, 1996, between
Mission West Properties, as Lessor, and Computervision Corporation, as Lessee,
as amended by that certain Amendment to the standard office Lease Agreement (the
"First Amendment") dated December
2
23, 1996, (the Lease and First Amendment are together referred to herein as the
"Main Lease"), and (b) the matters to which the Main Lease is or shall be
subject and subordinate. A true and complete copy of the Main Lease is annexed
hereto as Exhibit B and made a part hereof. Sublessee's share of Operating
Expense Increase under Paragraph 4.2 of the Main Lease shall be 52.28%.
Subject to the matters set forth above, upon Sublessee's faithfully
performing the terms, conditions, and covenants hereof, Sublessee may quietly
and peacefully enjoy the Subleased Premised during the term hereof. Sublessor
hereby warrants that (i) the Main Lease attached hereto as Exhibit B is complete
and in full force and effect, and (except as set forth herein) has not been
amended or terminated, (ii) the current Lessor under the Main Lease is Mission
West Properties, whose address for notice is ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇, (iii) the Main Lease constitutes the entire agreement between Lessor
and Sublessor concerning the Premises, and Sublessor is not in default
thereunder, and (iv) the Subleased Premises have not been previously assigned or
subleased by Sublessor.
3. Incorporation by Reference.
A. The terms, covenants and conditions of the Main Lease are
incorporated herein by reference so that, and except to the extent that such
incorporated provisions are inapplicable to or modified by the provisions of
this Sublease, all of the terms, covenants and conditions of the Main Lease
which bind or inure to the benefit of the Lessor thereunder shall with respect
to the Subleased Premises hereunder, in respect of this Sublease, bind or inure
to the benefit of Sublessor, and all of the terms, covenants and conditions of
the Main Lease which bind or inure to the benefit of the Lessee thereunder, in
respect of this Sublease, bind or insure to the benefit of Sublessee, with the
same force and effect as if such incorporated terms, covenants and conditions
were completely set forth in this Sublease, and as if the words "Lessor" and
"Lessee" or words of similar import, wherever the same appear in the Main Lease,
were construed to mean, respectively, "Sublessor" and "Sublessee" in this
Sublease, and as if the words "premises" and "demised premises" or words of
similar import, wherever the same appear in the Main Lease, were construed to
mean "Subleased Premises" in this Sublease, and as if the word "lease" or words
of similar import, wherever the same appear in the Main Lease, were construed to
mean this "Sublease." Notwithstanding the foregoing, any time limits not
specifically set forth in this sublease, and contained in the Main Lease for the
giving of notices, making of demands or performing of any act, condition or
covenant on the part of the tenant thereunder, or for the exercise by the tenant
thereunder of any right or remedy, are changed for the purposes of incorporation
therein by reference by shortening the same in each instance by five (5) days,
so that in each instance Sublessee shall have five days less time to observe or
perform hereunder than Sublessor, has as the tenant under the Main Lease, but in
no event less than five (5) days. Sublessor shall promptly provide Sublessee
with a true copy of any notice or request sent by Sublessor to Lessor pertaining
to the Subleased Premises and Sublessor shall promptly notify Sublessee of any
event that comes to Sublessor's attention that may adversely affect or may
reasonably be anticipated to adversely
- 2 -
3
affect Sublessee's tenancy or rights under the Sublease or Sublessee's use and
occupancy of the Subleased Premises.
B. Notwithstanding any provision of the Main Lease, it is the
intention of the parties hereto that under no circumstances should Sublessee
have any right to renew or extend the term of this Sublease or to sublet any
portion of the Subleased Premises or to assign this Sublease by operation of law
or otherwise, except as set forth herein.
4. Performance by Sublessor: Signage Undertakings. Any obligation of
Sublessor which is contained in this Sublease by incorporating the provisions of
the Main Lease may be observed or performed by Sublessor using reasonable
efforts to cause the landlord under the Main Lease to observe and/or perform the
same, and Sublessor shall have a reasonable time to enforce its rights to cause
such observance or performance. In the event Lessor, after notice and efforts by
Sublessor hereunder, does not perform a material obligation and such failure of
Lessor hereunder has a material adverse effect on the use and enjoyment of the
Subleased Premises, Sublessor agrees at Sublessee's request, to commence legal
action (the "Lessor Litigation") against Lessor seeking to cause such
performance and obtain legal damages for Sublessee's benefit. If such failure
affects only the Subleased Premises, Sublessee agrees to pay all reasonable
costs and expenses associated with such legal action to Sublessor within ten
(10) days of receipt of an invoice therefor. Otherwise, Sublessor shall share
such costs and expenses in proportion to their proportionate square footage in
the building. Sublessor promises to pay and perform all of its obligations under
the Main Lease, and Sublessor shall not exercise any right that may reasonably
be anticipated to adversely affect Sublessee's tenancy or rights under this
Sublease without Sublessee's prior written consent, provided, however, that
Sublessor shall have no liability to Sublessee for the Lessor's failure to
perform any of Lessor's obligation, except that Sublessor shall be obligated to
use reasonable efforts, upon receipt of written request of Sublessee, to cause
the Lessor under the Main Lease to observe and/or perform its obligations under
the Main Lease and to commence and pursue the Lessor Litigation, as set forth
above. Sublessee shall not in any event have any rights in respect of the
Subleased Premises greater than Sublessor's rights under the Main Lease. Except
as specifically excluded herein, and subject to the terms of the Main Lease and
the rights of the Lessor thereunder, Sublessee shall benefit from all the rights
and privileges existing under the Main Lease in favor of "Lessee" to the extent
such rights and privileges are applicable to the Subleased Premises, and
Sublessor agrees to use its reasonable efforts to enforce such rights and
privileges for the benefit of Sublessee. Sublessor shall not be responsible for
any failure or interruption; for any reason whatsoever (other than solely by
reason of Sublessor's preference), of the services or facilities that are
appurtenant to, or supplied at or to, the Subleased Premises, including, without
limitation, electricity, heat, air conditioning, water, elevator service and
cleaning service, if any; and no failure to furnish, or interruption of, any
such services or facilities shall give rise to any (a) abatement or reduction of
Sublessee's obligations under this Sublease, (b) constructive eviction, whether
in whole or in part, or (c) liability on the part of Sublessor, unless such
failure or interruption is caused solely by Sublessor's negligence or a breach
or default by Sublessor under the Main Lease,
- 3 -
4
which adversely affects the Subleased Premises. Sublessor shall offer Sublessee
a right of first refusal on space adjacent to the Subleased Premises which
becomes available for sublease on the same terms as any offer made for such
space by a third party by giving Sublessee written notice thereof, and Sublessee
shall respond to such offer indicating its acceptance or rejection thereof
within ten (10) days of such written notification.
Sublessor represents that to its knowledge, without specific
investigation or inquiry, the heating, ventilating, and air-conditioning system
serving the Subleased Premises "HVAC System") is in good working order.
Sublessor agrees upon written notice from Sublessee to promptly bring to the
attention of the Lessor any defect, interruption in service, or other failure of
the HVAC System and to use diligent efforts to cause Lessor to honor its
obligations as to such HVAC System under the Main Lease.
Subject to the terms, conditions and consents of the Main Lease and
Lessor's expressed written consent, Sublessee, at Sublessee's sole cost, shall
have the right to install and maintain; one (1) eight foot (8') satellite dish
in a location which is deemed acceptable to the Lessor and all applicable
government agencies.
Sublessor agrees to use all diligent efforts to cause Lessor to provide
graphics and signage space for Sublessee, on both the first and second floor
lobbies, and on the "tombstone" sign in front of the building, subject to
Lessor's approval and existing building standards for such signage.
5. No Breach of Main Lease. Sublessee and Sublessor shall not do or
permit to be done any act or thing which will constitute a breach or violation
of any term, covenant or condition of the Main Lease by the Sublessor
thereunder, whether or not such act or thing is permitted under the provisions
of this Sublease. However, Sublessor and Sublessee shall have the right to cure
such violation within the applicable time period set forth in Paragraph 13.1 of
the Main Lease.
6. No Privity of Estate. Nothing contained in this Sublease shall be
construed to create privity of estate or of contract between Sublessee and the
Lessor under the Main Lease.
7 . Indemnity. Sublessee and Sublessor shall each indemnify and hold the
other party harmless from and against all claims, actions, losses, costs,
damages, expenses and liabilities, which the other may incur by reason of (a)
any accidents, damages or injuries to persons or property occurring in, on or
about the Subleased Premises due to the other party's operations, (b) any breach
or default hereunder or under the Main Lease by the indemnifying party or its
agents, employees, Directors, Officers or invitees, including any breach or
default of the Main Lease by the Sublessor prior to the date of this Sublease
Agreement, (c) any work done in or to the Subleased Premises by the indemnifying
party or its agents, employees, Directors, Officers or invitees, or (d) any act,
omission or negligence by the indemnifying party or its agents, employees,
Directors, Officers or invitees.
- 4 -
5
8. Releases. Sublessee hereby releases the Lessor under the Main Lease
or anyone claiming through or under the Lessor under the Main Lease by way of
subrogation or otherwise, to the extent that Sublessor released the Lessor under
the Main Lease and/or the landlord under the Main Lease was relieved of
liability or responsibility pursuant to the provisions of the Main Lease.
9. Rent.
Sublessee shall pay to Sublessor rent ("Fixed Rent") in the amounts
listed on Exhibit C attached hereto. However, Sublessee shall phase into the
Premises, effective May 1, 1998, on a stepped basis such that the Sublessee
shall only pay Fixed Rent for 15,000 rentable square feet during the first five
(5) months of the Term, and pay Fixed Rent for 20,000 rentable square feet
during months six (6) through eight (8) of the Sublease Term. Sublessee, shall
pay Rent for the entire Premises (23,575 rentable square feet) beginning on
January 1, 1999. Fixed Rent shall be paid monthly in advance on the first day of
each month during the term of this Sublease. Fixed Rent, Sublessee's share of
the Operating Expenses, as defined in Section 4.2 of the Main Lease, and all
other amounts ("Additional Charges") payable by Sublessee to Sublessor under the
provisions of this Sublease or the provisions of the Main Lease shall be paid
promptly when due, without notice or demand therefor (unless Sublessor receives
notice or demand therefor from the Lessor under the Main Lease), and without
deduction, abatement, counterclaim or setoff of any amount for any reason
whatsoever. Rent for any partial month of the Sublease Term shall be prorated in
the proportion that the number of days this Sublease is in effect during such
month bears to the actual number of days in such month. If, based upon Lessor's
statement of actual expenses or an audit performed pursuant to Paragraph 4.2(g)
of the Main Lease (which audit Sublessor agrees to have performed, at
Sublessee's expense, if requested by Sublessee in writing), Sublessee has
underpaid or overpaid the amount of Rent owing pursuant to the Master Lease (as
incorporated into this Sublease), Sublessee shall (as applicable) pay to
Sublessor the amount of such underpayment or, Sublessor shall pay to Sublessee
the amount of such overpayment. If Sublessor shall be responsible for any
Additional Charges due under the Main Lease which is not attributable to
Sublessee's use or occupancy of the Premises, no such Additional Charges shall
be payable by Sublessee, including, without limitation, Additional Charges
incurred as a result of Sublessor's failure to provide Lessor with timely
payment of Rent.
All Rent payments, Operating Expenses and Additional Charges shall be
made payable to Sublessor at the address set forth in Section 26 of this
Sublease Agreement, or at such place as may be designated by Sublessor.
Fixed Rent and Additional Charges shall be paid to Sublessor in lawful
money of the United States at the address of Sublessor set forth in Section 26
of this Agreement, or to such other person and/or at such other address as
Sublessor may from time to time designate by written notice to Sublessee. No
payment by Sublessee or receipt by Sublessor of any lesser amount than the
amount stipulated to be paid hereunder shall be deemed other than on account
- 5 -
6
of the earliest stipulated Fixed Rent or Additional Charges; nor shall any
endorsement or statement on any check or letter be deemed an accord and
satisfaction, and Sublessor may accept any check or payment without prejudice to
Sublessor's right to recover the balance due or to pursue any other remedy
available to Sublessor.
In the event that Sublessee chooses to arrange for a separately metered
electrical installation, Sublessee's electricity charges, shall be payable by
Sublessee to the utility provider. Any cost necessary for separate meter
installation shall be born by Sublessee. In the event that Sublessee chooses not
to obtain a separately metered electrical installation, Sublessee acknowledges
that in addition to Fixed Rent, Sublessee is responsible to pay its prorated
share of electricity changes, payable to Sublessor. The Fixed Rent shall begin
at $1.25 per rentable square foot, which shall be paid in equal monthly
installments, as set forth in Exhibit C to this Agreement and the Main Lease.
Said Fixed Rent shall increase by $.05 per square foot on each annual
anniversary of the Sublease Commencement Date. Sublessee shall pay its
proportionate share of the Operating Expenses associated with the Premises above
the 1998 base year. Sublessee's share of the Base Year Operating Expenses and
any Operating Expense increase shall be based on the building being ninety-five
percent (95%) occupied and one hundred percent (100%) assessed for real estate
taxes.
If Sublessee fails to pay any Fixed Rent or Additional Charges within
three (3) days of the date due, Sublessee shall pay a late fee of six percent
(6%) of the amount overdue, as provided in Section 13.4 of the Main Lease. Such
late fee shall be payable on the first day of the following month, and in
default of payment if any such late fee, Sublessor shall have (in addition to
all other rights and remedies) the same rights and remedies as Sublessor has for
the nonpayment of Fixed Rent. Nothing contained herein shall be deemed to extend
the date on which Fixed Rent Additional Charges are due.
10. Utilities and Other Charges.
A. At the present time Lessor supplies utilities to the Subleased
Premises. Sublessee shall be responsible for the prompt payment when due for
electricity and such other utility service required by Sublessee which are in
addition to utilities now serving the Subleased Premises and not separately
metered. Any utilities which may be shared between the Subleased Premises and
the remainder of the Main Premises shall be prorated based on square footage;
provided that Sublessee shall be responsible for the cost of after-hours HVAC
only to the extent such services are activated by Sublessee or its agents,
Directors, officers, employees or invitees.
B. Subject to the terms of this Agreement, other charges payable
by Sublessor under any provision of the Main Lease which is incorporated by
reference in this Sublease shall be paid pro-rata by Sublessee in accordance
with the provisions of the Main Lease.
- 6 -
7
11. Security Deposit. The Sublessee shall pay to the Sublessor herewith
a security deposit, by check subject to collection, in the amount equal to
$29,468.75. The Sublessor may commingle such deposit with its other funds and
may apply such deposit upon default of the Sublessee hereunder. Provided the
Sublessee is not then in default hereunder, the Sublessor shall return the then
remaining portion of the security deposit to the Sublessee within thirty (30)
days after the expiration of this Sublease. In the event the Sublessor applies
such funds, the Sublessee shall pay to the Sublessor as additional rent within
ten (10) days after invoice therefor, the amount of the security deposit applied
by the Sublessor, such that the balance of the security deposit shall be
restored to its original amount.
12. Use. Sublessee shall use and occupy the Subleased Premises only for
the purposes that are expressly set forth in the Main Lease. Sublessee must
obtain the prior written consent of the Lessor and Sublessor for any change in
the Sublessee's use of the Subleased Premises. Sublessee shall comply with (a)
the Main Lease, (b) any certificate of occupancy relating to the Subleased
Premises, (c) all present and future laws, statutes, ordinances, orders, rules,
regulations and requirements of all Federal, state and municipal governments
asserting jurisdiction over the Subleased Premises and (d) all requirements
applicable to the Subleased Premises of the board of fire underwriters and/or
the fire insurance rating or similar organization performing the same or similar
functions, except as provided herein.
13. Condition of Subleased Premises. As further consideration for this
Sublease, Sublessor shall assign to Sublessee lien free rights to all existing
furniture, security systems, telephone systems and equipment, network cabling
and computer-room equipment and back-up power systems in the Subleased Premises,
at no cost to Sublessee.
Sublessor shall be responsible for patching any and all damaged walls,
including touching up paint, within the Subleased Premises. Notwithstanding
Sublessor's responsibility to paint and patch damaged walls within the Subleased
Premises, Sublessor shall have no obligation to furnish, render or supply any
work, labor, services fixtures, equipment, decorations or other items to make
the Subleased Premises ready or suitable for Sublessee's occupancy. In making
and executing this Sublease, Sublessee has relied solely on such investigations,
examinations and inspections as Sublessee has chosen to make or have made.
Sublessee acknowledges that Sublessor has approved Sublessee the opportunity for
full and complete investigations, examinations and inspections. Without limiting
the foregoing, Sublessee agrees to obtain approval of final plans for
construction from the Sublessor, which approval by Sublessor will not be
unreasonably withheld or delayed. All construction undertaken shall be subject
to the terms of, and in accordance with the provisions of, the Main Lease, as
well as of this Sublease.
Notwithstanding anything set forth in this Sublease, Sublessee accepts
the Subleased Premises in an "AS IS" condition as of the date of this Sublease.
In the event, that Sublessee intends to perform certain construction in the
Subleased Premises (the "Sublessee
- 7 -
8
Improvements"), Sublessee shall be responsible for any costs associated with
such construction of Sublessee Improvements.
14, Consents and Approvals. In any instance when Sublessor's consent or
approval is required under this Sublease, Sublessor's refusal to consent to or
approve any matter or thing shall be deemed reasonable if such consent or
approval has not been obtained from the Lessor under the Main Lease. If
Sublessee shall seek the approval or consent of Sublessor and Sublessor shall
fail or refuse to give such consent or approval, Sublessee shall not be entitled
to any damages for any withholding or delay of such approval or consent by
Sublessor, it being intended that Sublessee's sole remedy shall be an action for
an injunction or specific performance and that such remedy shall be available
only in those instances where Sublessor shall have expressly agreed in writing
not to withhold or delay its consent unreasonably.
15. Termination of Main Lease. If for a reason specified in the Main
Lease (including, without limitation, the exercise by Sublessor of its right to
terminate the Main Lease pursuant to any provision of the Main Lease), the term
of the Main Lease shall terminate prior to the expiration of this Sublease, this
Sublease shall thereupon be terminated and Sublessor shall not be liable to
Sublessee by reason thereof. Provided Sublessee is not then in default,
Sublessor shall refund to Sublessee any prepaid rent prorated to the date of
termination, and any security held by Sublessor due to Sublessee.
Notwithstanding the foregoing, Sublessor agrees not to voluntarily terminate the
Main Lease during the term of this Sublease. So long as Sublessee is not in
default under this Sublease beyond the applicable notice and cure period for
such default on the date of such damage or destruction, Sublessee shall have the
same rights of termination under this Sublease as Sublessor may have to
terminate the Main Lease upon an event of damage or destruction under the Main
Lease, and Sublessor shall not exercise any such rights of termination without
the prior written consent of Sublessee. If this Sublease is not terminated
following any damage or destruction as provided above, (i) Sublessor shall act
with reasonable diligence to enforce any obligation of Master Lessor to rebuild
the Premises in accordance with the master Lease, if such rebuilding is
authorized under the Main Lease, (ii) Sublessor shall make available to
Sublessee any insurance proceeds Sublessor receives as a result of such damage
or destruction which is directly applicable to the Subleased Premises, and (iii)
Sublessee shall be entitled to abatement of Rent under this Sublease to the
extent that Sublessor's Rent is abated under the Main Lease.
16. Assignment and Subletting. Sublessee shall not, by the sale of all
or substantially all of its assets, operation of law or otherwise, assign, sell,
mortgage, pledge or in any other manner transfer or encumber this Sublease or
any interest therein, or sublet the Subleased Premises or any part or parts
thereof, or grant any concession or license or otherwise permit occupancy of all
or any part of the Subleased Premises by any person, without the prior written
consent of Sublessor, which will not be unreasonably withheld or delayed.
Neither the consent of transfer, concession, license or use, nor any references
in this Sublease to assignees, sublessees, mortgagees, pledges, transferees,
concessionaires, licensees, or users, shall in any way be construed to relieve
Sublessee of the requirement of obtaining the
- 8 -
9
prior written consent of Sublessor to any further assignment, subletting or use
or to the making of any assignment, subletting, mortgage, pledge, transfer,
concession or license with respect to this Sublease or all or any part of the
Subleased Premises. If Sublessor consents to any assignment of this Sublease,
the assignee shall execute and deliver to Sublessor an agreement in form and
substance satisfactory to Sublessor whereby the assignee shall assume all of
Sublessee's obligations under this Sublease. Notwithstanding any assignment,
subletting or transfer, including, without limitation, any assignment,
subletting, transfer or use permitted or consented to by Sublessor, the original
Sublessee named herein and any other person who at any time was Sublessee and
any guarantor of Sublessee's obligations shall remain fully liable under this
Sublease. Any provision of this Sublease to the contrary notwithstanding,
Sublessor's consent shall not be required for an assignment of the Lease or a
sublease of the Subleased Premises (i) to any person (or entity) who (or which)
controls, is controlled by or is under common control with the original named
Sublessee, or (ii) to any corporation or other entity succeeding to
substantially all of the assets of the original named Sublessee as a result of a
consolidation or merger, or (iii) to a corporation or other entity to which all
or substantially all of the assets of the original named Sublessee have been
sold; provided that (a) the proposed assignee or sublessee shall assume in
writing the obligations of Sublessee under this Sublease, (b) Sublessor shall be
given prior written notice of such assignment and assumption and copies of all
documents required to substantiate compliance with this Section 16, (c) the net
worth of any assignee or sublessee to which the Sublease is assigned or the
Subleased Premises is sublet is substantially equal to or greater than the net
worth of Sublessee as of the date of this Sublease (provided, however, that this
provision (c) shall not apply to an assignment or sublease pursuant to
provisions (i) and (ii) of this Sentence, if the original named Sublessee will
continue in existence as an operating business after such assignment or
sublease), and (d) use of the Subleased Premises by the assignee or sublessee
shall not violate the Main Lease or this Sublease. For purposes of this Section
16, the term "control" means possession, directly or indirectly, of the power to
direct or cause the direction of the management, affairs and policies of
anyone, whether through the ownership of voting securities, by contract or
otherwise.
17. Alterations. Notwithstanding any provision of this Sublease or the
Main Lease to the contrary, Sublessee shall not make, cause, suffer or permit
the making of any alteration, change, replacement, installation or addition in
or to the Subleased Premises which affects any structural component or central
building systems or which is contrary to Section 7.3 of the Main Lease without
obtaining the prior written consent of Sublessor to which Sublessor shall be
reasonable in each instance.
18. Commission Fees. Sublessor shall pay a leasing commission to CB
Commercial and The ▇▇▇▇▇▇ ▇▇▇▇▇▇ Group, Inc., in connection with this Sublease.
Sublessee warrants and represents that it has dealt with no real estate broker
or person entitled to or claiming a fee in connection with this Sublease other
than CB Commercial and The ▇▇▇▇▇▇ ▇▇▇▇▇▇ Group, Inc. In the event any claim
shall be made against Sublessor or the Subleased Premises, predicated on a fee
or commission payable to any other party in connection with this sublease on
account of
- 9 -
10
such dealing by Sublessee with any other party, Sublessee agrees to defend the
same and indemnify Sublessor against such claim.
19. Surrender. Sublessee shall, on the expiration or earlier termination
of this Sublease, surrender the Subleased Premises to the Sublessor. Sublessee
agrees to repair any damage to the Subleased Premises caused by Sublessee during
the term of this Agreement, ordinary wear and tear and damage from the elements
excepted. Upon such expiration or earlier termination, all of the obligations of
the Sublease shall cease and be of no further force and effect.
20. No Waiver. Sublessor's receipt and acceptance of Fixed Rent or
Additional Charges, or Sublessor's acceptance of performance of any other
obligation by Sublessee, with knowledge of Sublessee's breach of any provision
of this Sublease, shall not be deemed a waiver of such breach. No waiver by
Sublessor of any term, covenant or condition of this Sublease shall be deemed to
have been made unless expressed in writing and signed by Sublessor.
21. Successors and Assigns. The provisions of this Sublease, except as
herein otherwise specifically provided, shall extend to, bind and inure to the
benefit of the parties hereto and their respective legal representatives, heirs,
successors and permitted assigns.
22. Liability of Sublessor. Sublessor's officers, directors and
shareholders, disclosed and undisclosed, shall have no personal liability under
this Sublease.
23. Interpretation. Irrespective of the place of execution or
performance, this Sublease shall be governed by and construed in accordance with
the laws of the State of California. The captions, headings and titles, if any,
in this Sublease are solely for convenience of reference and shall not affect
its interpretation. This Sublease shall be construed without regard to any
presumption or other rule requiring construction against the party causing this
Sublease to be drafted. Each covenant, agreement, obligation or other provision
of this Sublease binding upon Sublessee shall be deemed and construed as a
separate and independent covenant of Sublessee, not dependent on any other
provision of this Sublease unless otherwise expressly provided. All terms and
words used in this Sublease, regardless of the number or gender in which they
are used, shall be deemed to include any other number and any other gender as
the context may require. The word "person" as used in this Sublease shall mean a
natural person or persons, as partnership, a corporation or any other form of
business or legal association or entity.
24. Consent of Lessor Under Main Lease. This Sublease shall have no
effect until (i) the landlord under the Main Lease shall have given its written
consent hereto in accordance with the terms of the Main Lease. If the Lessor
under the Main Lease does not give its consent to this Sublease, (a) Sublessor
shall not be obligated to take any action to obtain such consent, (b) this
Sublease shall be deemed voidable by Sublessor or Sublessee and of no effect,
and (c) if Sublessee is then in possession of all or any part of the Subleased
Premises, Sublessee shall immediately quit and surrender to Sublessor the
Subleased Premises shall
- 10 -
11
remove all of its property and repair all damage caused by such removal and
restore the Subleased Premises to the condition in which it was prior to such
occupancy. Sublessor agrees to use its reasonable and diligent efforts to obtain
the consent of the Lessor to this sublease.
25. Memorandum of Agreement. Sublessee may file a Memorandum of Sublease
Agreement in the form attached hereto as Exhibit D in the county office where
the Property is located. Neither party may record this Agreement.
26. Notices. Unless otherwise provided herein, any notice of demand
required to be given herein shall be given by certified or registered mail,
return receipt requested or reliable overnight courier to the following
addresses of the Sublessor and Sublessee:
Sublessor: Computervision Corporation
c/o Parametric Technology Corporation
Attention: Director of Real Estate
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Sublessee:
After Commencement Date: Before Commencement Date:
------------------------ -------------------------
Attn: Chief Financial Officer Attn: Chief Financial Officer
InterVU, Inc. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (619) 350-1600
27. Authority. Each person executing this Sublease on behalf of a party
hereto represents and warrants that he or she is authorized and empowered to do
so and to thereby bind the party on whose behalf he or she is signing.
28. Attorneys' Fees. If there is any civil legal action or proceeding
between Sublessor and Sublessee to enforce or interpret any provision of this
Sublease or to protect or establish any right or remedy of either Sublessor or
Sublessee hereunder, the non-prevailing party to such action or proceeding will
pay to the prevailing party all costs and expenses, including reasonable
attorneys' fees incurred by such prevailing party in such action or proceeding
and in any appearance in connection therewith, and if the prevailing party
recovers a judgment, or obtains favorable declaratory relief, in any such
action, proceeding or appeal, such reasonable costs, expenses and attorney's
fees will be determined by the court handling the proceeding and will be
included in and as part of the judgment or declaration.
- 11 -
12
IN WITNESS WHEREOF, Sublessor and Sublessee have executed this Sublease
as of the day and year first above written.
WITNESS: COMPUTERVISION CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------- -----------------------------------------
Authorized Officer: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Print Name and
Title: Secretary
WITNESS: InterVU, Inc.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------- -----------------------------------------
Authorized Officer: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chief Executive Officer
- 12 -
13
EXHIBIT B
MAIN LEASE AND AMENDMENTS
[SEE EXHIBIT B-1 ATTACHED HERETO]
- 14 -
14
STANDARD OFFICE LEASE - GROSS
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
[LOGO]
1. Basic Lease Provisions ("Basic Lease Provisions")
1.1 Parties: This Lease, dated, for reference purposes only, August
29, 1996, is made by and between Mission West Properties, a California
corporation, (herein called "Lessor") and Computervision, a Delaware
corporation, doing business under the name of same, (herein called "Lessee").
1.2 Premises: Suite Number(s) 150 & 200 on the 1st & 2nd floors,
consisting of approximately 29,550 rentable feet, 26,267 useable feet, more or
less, as defined in paragraph 2 and as shown on Exhibit "A" hereto (the
"Premises").
1.3 Building: Commonly described as being located at ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, in the City of San Diego, County of ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, as more particularly described in Exhibit "A" hereto, and as defined
in paragraph 2.
1.4: Use: General office, Software Research and Development, subject
to paragraph 6.
1.5 Term: Seventy-eight (78) months commencing January 1, 1997
("Commencement Date") and ending June 30, 2003 See Paragraph 1.5 (continued) of
Addendum, as defined in paragraph 3.
1.6 Base Rent: $38,710.50 per month, payable on the first day of each
month, per paragraph 4.1.
1.7 Base Rent Increase: On See Paragraph 1.6 (continued) of Addendum
the monthly Base Rent payable under paragraph 1.6 above shall be adjusted as
provided in paragraph 4.3 below.
1.8 Rent Paid Upon Execution: $38,710.50 for the first month of
occupancy.
1.9 Security Deposit: $38,710.50.
1.10 Lessee's Share of Operating Expense Increase: 65.53% as defined
in paragraph 4.2. See Paragraph 1.10 (continued) of Addendum
2. Premises, Parking and Common Areas.
2.1 Premises: The Premises are a portion of a building, herein
sometimes referred to as the "Building" identified in paragraph 1.3 of the Basic
Lease Provisions. "Building" shall include adjacent parking structures used in
connection therewith. The Premises, the Building, the Common Areas, the land
upon which the same are located, along with all other buildings and improvements
thereon or thereunder, are herein collectively referred to as the "Office
Building Project". Lessor hereby leases to Lessee and Lessee leases from Lessor
for the term, at the rental, and upon all of the conditions set forth herein,
the real property referred to in the Basic Lease Provisions, paragraph 1.2, as
the "Premises," including rights to the Common Areas as hereinafter specified.
2.2 Vehicle Parking: So long as Lessee is not in default and subject
to the rules and regulations attached hereto, and as established by Lessor from
time to time, Lessee shall be entitled to rent and use 105 parking spaces in the
Office Building Project at the monthly rate applicable from time to time for
monthly parking as set by Lessor and/or it licensee.
2.2.1 If Lessee commits, permits or allows any of the prohibited
activities described in the Lease or the rules then in effect, then Lessor shall
have the right, without notice, in addition to such other rights and remedies
that it may have, to remove or tow away the vehicle involved and charge the cost
to Lessee, which cost shall be immediately payable upon demand by Lessor.
2.2.2 The monthly parking rate per parking space will be $0 per
month at the commencement of the term of this Lease, and is subject to change
upon five (5) days prior written notice to Lessee. Monthly parking fees shall be
payable one month in advance prior to the first day of each calendar month.
2.3 Common Areas - Definition. The term "Common Areas" is defined as all
areas and facilities outside the Premises and within the exterior boundary line
of the Office Building Project that are provided and designated by the Lessor
from time to time for the general non-exclusive use of Lessor, Lessee and of
other lessees of the Office Building Project and their respective employees,
suppliers, shippers, customers and invitees, including but not limited to common
entrances, lobbies, corridors, stairways and stairwells, public restrooms,
elevators, escalators, parking areas to the extent not otherwise prohibited by
this Lease, loading and unloading areas, trash areas, roadways, sidewalks,
walkways, parkways, ramps, driveways, landscaped areas and decorative walls.
2.4 Common Areas - Rules and Regulations. Lessee agrees to abide by and
conform to the rules and regulations attached hereto as Exhibit B with respect
to the Office Building Project and Common Areas, and to cause its employees,
suppliers, shippers, customers, and invitees to so abide and conform. Lessor or
such other person(s) as Lessor may appoint shall have the exclusive control and
management of the Common Areas and shall have the right, from time to time, to
modify, amend and enforce said rules and regulations. Lessor shall not be
responsible to Lessee for the non-compliance with said rules and regulations by
other lessees, their agents, employees and invitees of the Office Building
Project, See Paragraph 2.4 (continued) of Addendum
2.5 Common Areas - Changes. Lessor shall have the right, in Lessor's sole
discretion, from time to time:
(a) To make changes to the Building interior and exterior and Common
Areas, including, without limitation, changes in the location, size, shape,
number, and appearance thereof, including but not limited to the lobbies,
windows, stairways, air shafts, elevators, escalators, restrooms, driveways,
entrances, parking spaces, parking areas, loading and unloading areas, ingress,
egress, direction of traffic, decorative walls, landscaped areas and walkways;
provided, however, Lessor shall at all times provide the parking facilities
required by applicable law;
(b) To close temporarily any of the Common Areas for maintenance
purposes so long as reasonable access to the Premises remains available;
(c) To designate other land and improvements outside the boundaries
of the Office Building Project to be a part of the Common Areas, provided that
such other land and improvements have a reasonable and functional relationship
to the Office Building Project;
(d) To add additional buildings and improvements to the Common Areas;
(e) To use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Office Building Project, or any
portion thereof;
(f) To do and perform such other acts and make such other changes in,
to or with respect to the Common Areas and Office Building Project as Lessor
may, in the exercise of sound business judgement deem to be appropriate.
3. Term.
3.1 Term. The term and Commencement Date of this Lease shall be as
specified in paragraph 1.5 of the Basic Lease Provisions.
3.2 Delay in Possession. Notwithstanding said Commencement Date, if for
any reason Lessor cannot deliver possession of the Premises to Lessee on said
date and subject to paragraph 3.2.2, Lessor shall not be subject to any
liability therefor, nor shall such failure affect the validity of this Lease or
the obligations of Lessee hereunder or extend the term hereof; but, in such
case, Lessee shall not be obligated to pay rent or perform any other obligation
of Lessee under the terms of this Lease, except as may be otherwise provided in
this Lease, until possession of the Premises within sixty (60) days following
said Commencement Date, as the same may be extended under the terms of a Work
Letter executed by Lessor and Lessee, Lessee may, at Lessee's
15
option, by notice in writing to Lessor within ten (10) days thereafter, cancel
this Lease, in which event the parties shall be discharged from all obligations
hereunder; provided, however, that, as to Lessee's obligations, Lessee first
reimburses Lessor for all costs incurred for Non-Standard improvements and, as
to Lessor's obligations, Lessor shall return any money previously deposited by
Lessee (less any offsets due Lessor for Non-Standard improvement(s); and
provided further, that if such written notice by Lessee is not received by
Lessor within said ten (10) day period, Lessee's right to cancel this Lease
hereunder shall terminate and be of no further force or effect. Upon the mutual
execution of this lease Lessor shall submit to Lessee a tenant improvement
schedule identifying the estimated occupancy date of Lessee.
3.2.1 Possession Tendered--Defined. Possession of the Premises
shall be deemed tendered to Lessee ("Tender of Possession") when (1) the
improvements to be provided by Lessor under this Lease are substantially
completed, (2) the Building utilities are ready for use in the Premises, (3)
Lessee has reasonable access to the Premises, and (4) written notice is given to
Lessee of the occurrence of the matters described in (1), (2) and (3), above of
this paragraph 3.2.1.
3.2.2 Delays Caused by Lessee. There shall be no abatement of
rent, and the sixty (60) day period following the Commencement Date before which
Lessee's right to cancel this Lease accrues under paragraph 3.2, shall be deemed
extended to the extent of any delays caused by acts or omissions of Lessee,
Lessee's agents, employees and contractors.
3.3 Early Possession. If Lessee occupies the Premises prior to said
Commencement Date, such occupancy shall be subject to all provisions of this
Lease, such occupancy shall not change the termination date, and Lessee shall
pay rent for such occupancy.
3.4 Uncertain Commencement. In the event commencement of the Lease term
is defined as the completion of the improvements, Lessee and Lessor shall
execute an amendment to this Lease establishing the date of Tender of
Possession (as defined in paragraph 3.2.1) or the actual taking of possession
by Lessee, whichever first occurs, as the Commencement Date.
4. Rent
4.1 Base Rent. Subject to adjustment as hereinafter provided in paragraph
4.3, and except as may be otherwise expressly provided in this Lease, Lessee
shall pay to Lessor the Base Rent for the Premises set forth in paragraph 1.6
of the Basic Lease Provisions, without offset or deduction. Lessee shall pay
Lessor upon execution hereof the advance Base Rent described in paragraph 1.8
of the Basic Lease provisions. Rent for any period except the first month
during the term hereof which is for less than one month shall be prorated based
upon the actual number of days of the calendar month involved. Rent shall be
payable in lawful money of the United States to Lessor at the address stated
herein or to such other persons or at such other places as Lessor may
designate in writing.
4.2 Operating Expense Increase. Lessee shall pay to Lessor during the term
hereof, in addition to the Base Rent, Lessee's Share, as hereinafter defined, of
the amount by which all Operating Expenses, as hereinafter defined, for each
Comparison Year exceeds the amount of all Operating Expenses for the Base Year,
such excess being hereinafter referred to as the "Operating Expense Increase,"
in accordance with the following provisions:
(a) "Lessee's Share" is defined, for purposes of this Lease, as the
percentage set forth in paragraph 1.10 of the Basic Lease Provisions, which
percentage has been determined by dividing the approximate rentable square
footage of the Premises by the total approximate square footage of the rentable
space contained in the Office Building Project. It is understood and agreed
that the square footage fixtures set forth in the Basic Lease Provisions are
approximations which Lessor and Lessee agree are reasonable and shall not be
subject to revision except in connection with an actual change in the size of
the Premises or a change in the space available for lease in the Office
Building Project. See Paragraph 4.2(a) (continued) of Addendum
(b) "Base Year" is defined as the 1997 calendar year in which the
Lease term commences.
(c) "Comparison Year" is defined as each calendar year during the
term of this Lease subsequent to the Base Year; provided, however, Lessee shall
have no obligation to pay a share of the Operating Expense Increase applicable
to the first twelve (12) months of the Lease Term (other than such as are
mandated by a governmental authority, as to which government mandated expenses
Lessee shall pay Lessee's Share, notwithstanding they occur during the first
twelve (12) months). Lessee's share of the Operating Expense Increase for the
first and last Comparison Years of the Lease Term shall be prorated according to
that portion of such Comparison Year as to which Lessee is responsible for a
share of such increase.
(d) "Operating Expenses" is defined, for purposes of this Lease, to
include all costs, if any, incurred by Lessor in the exercise of its reasonable
discretion for:
(i) The operation, repair, maintenance, and replacement, in
neat, clean, safe, good order and condition, of the Office Building Project,
including but not limited to, the following:
(aa) The Common Areas, including their surfaces,
coverings, decorative items, carpets, drapes and window coverings, and including
parking areas, loading and unloading areas, trash areas, roadways, sidewalks,
walkways, stairways, parkways, driveways, landscaped areas, striping, bumpers,
irrigation systems, Common Area lighting facilities, building exteriors and
roofs, fences and gates;
(bb) All heating, air conditioning, plumbing, electrical
systems, life safety equipment, telecommunication and other equipment used in
common by, or for the benefit of, lessees or occupants of the Office Building
Project, including elevators and escalators, tenant directories, fire detection
systems including sprinkler system maintenance and repair.
(ii) Trash disposal, janitorial and security services;
(iii) Any other service to be provided by Lessor that is
elsewhere in this Lease stated to be an ""Operating Expense";
(iv) The cost of the premiums for the liability and property
and any other insurance policies to be maintained by Lessor under paragraph 8
hereof;
(v) The amount of the real property taxes to be paid by
Lessor under paragraph 10.1 hereof;
(vi) The cost of water, sewer, gas, electricity, and other
publicly mandated services to the Office Building Project;
(vii) Labor, salaries and applicable fringe benefits and costs,
materials, supplies and tools, used in maintaining and/or cleaning the Office
Building Project and accounting and a management fee attributable to the
operation of the Office Building Project;
(viii) Replacing and/or adding improvements mandated by any
governmental agency and any repairs or removals necessitated thereby amortized
over its useful life according to Federal Income tax regulations or guidelines
for depreciation thereof (including interest on the unamortized balance as is
then reasonable in the judgment of Lessor's accountants);
(ix) Replacements of equipment or improvements that have a
useful life for depreciation purposes according to Federal Income tax guidelines
of five (5) years or less, as amortized over such life. See Paragraph 4.2(d)(x)
of Addendum
(e) Operating Expenses shall not include the costs of replacements
of equipment or improvements that have a useful life for Federal Income Tax
purposes in excess of five (5) years unless it is of the type described in
paragraph 4.2(d)(viii), in which case their cost shall be included as above
provided.
(f) Operating Expenses shall not include any expenses paid by any
lessee directly to third parties, or as to which Lessor is otherwise reimbursed
by any third party, other tenant, or by insurance proceeds. See Paragraph
4.2(f)) (continued) of Addendum
(g) Lessee's Share of Operating Expense Increase shall be payable by
Lessee within ten (10) days after a reasonably detailed statement of actual
expenses is presented to Lessee by Lessor. At Lessor's option, however, an
amount may be estimated by Lessor from time to time in advance of Lessee's Share
of the Operating Expense Increase for any Comparison Year, and the same shall be
payable monthly or quarterly, as Lessor shall designate, during each Comparison
Year of the Lease term, on the same day as the Base Rent is due hereunder. In
the event that Lessee pays Lessor's estimate of Lessee's Share of Operating
Expense Increase as aforesaid, Lessor shall deliver to Lessee within sixty (60)
days after the expiration of each Comparison Year a reasonably detailed
statement showing Lessee's share of the actual Operating Expense increase
incurred during such year. If Lessee's payments under this paragraph 4.2(g)
during said Comparison Year exceed Lessee's Share as indicated on said
statement, Lessee shall be entitled to credit the amount of such overpayment
against Lessee's Share of Operating Expense Increase next falling due. If
Lessee's payments under this paragraph during said Comparison Year were less
than Lessee's Share as indicated on said statement, Lessee shall pay to Lessor
the amount of the deficiency within ten (10) days after delivery by Lessor to
Lessee of said statement. Lessor and Lessee shall forthwith adjust between them
by expense increases, notwithstanding that the Lease term may have been
terminated before the end of such Comparison Year. See Paragraph 4.2(y)
(continued) of Addendum
4.3 Rent increase.
4.3.1 At the times set forth in paragraph 1.7 of the Basic Lease
Provisions, the monthly Base Rent payable under paragraph 4.1 of this Lease
shall be adjusted by the increase, if any, in the Consumer Price Index of the
Bureau of Labor Statistics of the Department of Labor for All Urban Consumers,
(1982-84=100), "All Items," for Los Angeles-Anaheim-Riverside, herein referred
to as "C.P.I.," since the date of this Lease.
4.3.2 The monthly Base Rent payable pursuant to paragraph 4.3.1
shall be calculated as follows: the Base Rent payable for the first month of
the term of this Lease, as set forth in paragraph 4.1 of this Lease, shall be
multiplied by a fraction the numerator of which shall be the C.P.I. of the third
calendar month immediately preceding the month during which the adjustment is to
take effect, and denominator of which shall be the C.P.I. for the third calendar
month preceding the month in which the original Lease term commences. The sum so
calculated shall constitute the new monthly Base Rent hereunder, but, in no
event, shall such new monthly Base Rent be less than the Base Rent payable for
the month immediately preceding the date for the rent adjustment.
4.3.3 In the event the compilation and/or publication of the
C.P.I. shall be transferred to any other governmental department or bureau or
16
agency or shall be discontinued, then the index most nearly the same as the
C.P.I. shall be used to make such calculations. In the event that Lessor and
Lessee cannot agree on such alternative index, then the matter shall be
submitted for decision to the American Arbitration Association in the County in
which the Premises are located, in accordance with the then rules of said
association and the decision of the arbitrators shall be binding upon the
parties, notwithstanding one party failing to appear after due notice of the
proceeding. The cost of said Arbitrators shall be paid equally by Lessor and
Lessee.
4.3.4 Lessee shall continue to pay the rent at the rate previously in
effect until the increase, if any, is determined. Within five (5) days following
the date on which the increase is determined, Lessee shall make such payment to
Lessor as will bring the increased rental current, commencing with the effective
date of such increase through the date of any rental instalments then due.
Thereafter the rental shall be paid at the increased rate.
4.3.5 At such time as the amount of any change in rental required by this
Lease is known or determined, Lessor and Lessee shall execute an amendment to
this Lease setting forth such change.
5. Security Deposit. Lessee shall deposit with Lessor upon execution hereof
the security deposit set forth in paragraph 1.9 of the Basic Lease Provisions as
security for Lessee's faithful performance of Lessee's obligations hereunder. If
Lessee fails to pay rent or other charges due hereunder, or otherwise defaults
with respect to any provision of this Lease, Lessor may use, apply or retain all
or any portion of said deposit for the payment of any rent or other charge in
default for the payment of any other sum to which Lessor may become obligated by
reason of Lessee's default, or to compensate Lessor for any loss or damage which
Lessor may suffer thereby. If Lessor so uses or applies all or any portion of
said deposit, Lessee shall within ten (10) days after written demand therefor
deposit cash with Lessor in an amount sufficient to restore said deposit to the
full amount then required of Lessee. If the monthly Base Rent shall, from time
to time, increase during the term of this Lease, Lessee shall, at the time of
such increase, deposit with Lessor additional money as a security deposit so
that the total amount of the security deposit held by Lessor shall at all times
bear the same proportion to the then current Base Rent as the initial security
deposit bears to the initial Base Rent set forth in paragraph 1.G of the Basic
Lease Provisions. Lessor shall not be required to keep said security deposit
separate from its general accounts. If Lessee performs all of Lessee's
obligations hereunder, said deposit, or so much thereof as has not heretofore
been applied by Lessor, shall be returned, without payment of interest or other
increment for its use, to Lessee (or, at Lessor's option, to the last assignee,
if any, of Lessee's interest hereunder) at the expiration of the term hereof,
and after Lessee has vacated the Premises. No trust relationship is created
herein between Lessor and Lessee with respect to said Security Deposit.
6. Use.
6.1 Use. The Premises shall be used and occupied only for the purpose set
forth in paragraph 1.4 of the Basic Lease Provisions and for no other purpose.
See Paragraph 6.1 (continued) of Addendum
6.2 Compliance with Law.
(a) Lessor warrants to Lessee that the Premises, in the state existing
on the date that the Lease term commences, but without regard to alterations or
improvements made by Lessee or the use for which Lessee will occupy the
Premises, does not violate any covenants or restrictions of record, or any
applicable building code, regulation or ordinance in effect on such Lease term
Commencement Date. In the event it is determined that this warranty has been
violated, then it shall be the obligation of the Lessor, after written notice
from Lessee, to promptly, at Lessor's sole cost and expense, rectify any such
violation.
(b) Except as provided in paragraph 6.2(a) Lessee shall, at Lessee's
expense, promptly comply with all applicable statutes, ordinances, rules,
regulations, orders, covenants and restrictions of record, and requirements of
any fire insurance underwriters or rating bureaus, now in effect or which may
hereafter come into effect, whether or not they reflect a change in policy from
that now existing, during the term or any part of the term hereof, relating in
any manner to the Premises and the occupation and use by Lessee of the Premises.
Lessee shall conduct its business in a lawful manner and shall not use or permit
the use of the Premises or the Common Areas in any manner that will tend to
create waste or a nuisance or shall tend to disturb other occupants of the
Office Building Project. See Paragraph 6.2(b)(continued) of Addendum
6.3 Condition of Premises.
(a) Lessor shall deliver the Premises to Lessee in a clean condition
on the Lease Commencement Date (unless Lessee is already in possession) and
Lessor warrants to Lessee that the plumbing, lighting, air conditioning, and
heating system in the Premises shall be in good operating condition. In the
event that it is determined that this warranty has been violated, then it shall
be the obligation of Lessor, after receipt of written notice from Lessee setting
forth with specificity the nature of the violation, to promptly, at Lessor's
sole cost, rectify such violation.
(b) Except as otherwise provided in this Lease, Lessee hereby accepts
the Premises and the Office Building Project in their condition existing as of
the Lease Commencement Date or the date that Lessee takes possession of the
Premises, whichever is earlier, subject to all applicable zoning, municipal,
county and state laws, ordinances and regulations governing and regulating the
use of the Premises, and any easements, covenants or restrictions of record, and
accepts this Lease subject thereto and to all matters disclosed thereby and by
any exhibits attached hereto. Lessee acknowledges that it has satisfied itself
by its own independent investigation that the Premises are suitable for its
intended use, and that neither Lessor nor Lessor's agent or agents has made any
representation or warranty as to the present or future suitability of the
Premises, Common Areas, or Office Building Project for the conduct of Lessee's
business.
7. Maintenance, Repairs, Alterations and Common Area Services.
7.1 Lessor's Obligations. Lessor shall keep the Office Building Project,
including the Premises, interior and exterior walls, roof, and common areas, and
the equipment whether used exclusively for the Premises or in common with other
premises, in good condition and repair; provided, however, Lessor shall not be
obligated to paint, repair or replace wall coverings, or to repair or replace
any improvements that are not ordinarily a part of the Building or are above
then Building standards. Except as provided in paragraph 9.5, there shall be no
abatement of rent or liability of Lessee on account of any injury or
interference with Lessee's business with respect to any improvements,
alterations or repairs made by Lessor to the Office Building Project or any part
thereof. Lessee expressly waives the benefits of any statute now or hereafter in
effect which would otherwise afford Lessee the right to make repairs at Lessor's
expense or to terminate this Lease because of Lessor's failure to keep the
Premises in good order, condition and repair. See Paragraph 7.1 (continued) of
Addendum
7.2 Lessee's Obligations.
(a) Notwithstanding Lessor's obligation to keep the Premises in good
condition and repair, Lessee shall be responsible for payment of the cost
thereof to Lessor as additional rent for that portion of the cost of any
maintenance and repair of the Premises, or any equipment (wherever located) that
serves only Lessee or the Premises, to the extent such cost is attributable to
causes beyond normal wear and tear. Lessee shall be responsible for the cost of
painting, repairing or replacing wall coverings, and to repair or replace any
Premises improvements that are ordinarily a part of the Building or that are
above then Building standards. Lessor may, at its option, upon reasonable
notice, elect to have Lessee perform any particular such maintenance or repairs
the cost of which is otherwise Lessee's responsibility hereunder.
(b) On the last day of the term hereof, or on any sooner termination,
Lessee shall surrender the Premises to Lessor in the same condition as received
on the commencement date of the lease, ordinary wear and tear excepted, clean
and free of debris. Any damage or deterioration of the Premises shall not be
deemed ordinary wear and tear if the same could have been prevented by good
maintenance practices by Lessee. Lessee shall repair any damage to the Premises
occasioned by the installation or removal of Lessee's trade fixtures,
alterations, furnishings and equipment. Except as otherwise stated in this
Lease, Lessee shall leave the air lines, power panels, electrical distribution
systems, lighting fixtures, air conditioning, window coverings, wall coverings,
carpets, wall panelling, ceilings and plumbing on the Premises and in good
operating condition. See Paragraph 7.2(c) of Addendum
7.3 Alterations and Additions.
(a) Lease shall not, without Lessor's prior written consent which shall not
be unreasonably withheld, delayed, or conditioned make any alterations,
improvements, additions, Utility Installations or repairs in, on or about the
Premises, or the Office Building Project. As used in this paragraph 7.3 the term
"Utility Installation" shall mean carpeting, window and wall coverings, power
panels, electrical distribution systems, lighting fixtures, air conditioning,
plumbing, and telephone and telecommunication wiring and equipment. At the
expiration of the term, Lessor may require the removal of any or all of said
alterations, improvements, additions or Utility Installations, and the
restoration of the Premises and the Office Building Project to their prior
condition, at Lessee's expense. Should Lessee permit Lessee to make its own
alterations, improvements, additions or Utility Installations, Lessee shall use
only such contractor as has been expressly approved by Lessor, and Lessor may
require Lessee to provide Lessor, at Lessee's sole cost and expense, a lien and
completion bond in an amount equal to one and one-half times the estimated cost
of such improvements, to insure Lessor against any liability for mechanic's and
materialmen's liens and to insure completion of the work. Should Lessee make any
alterations, improvements, additions or Utility Installations without the prior
approval of Lessor, or use a contractor not expressly approved by Lessor, Lessor
may, at any time during the term of this Lease, require that Lessee remove any
part or all of the same.
(b) Any alterations, improvements, additions or Utility Installations in
or about the Premises or the Office Building Project that Lessee shall desire
to make shall be presented to Lessor in written form, with proposed detailed
plans. If Lessor shall give its consent to Lessee's making such alteration,
improvement, addition or Utility Installation, the consent shall be deemed
conditioned upon Lessee acquiring a permit to do so from the conditions of said
permit in a prompt and expeditious manner.
(c) Lessee shall pay, when due, all claims for labor or materials
furnished or alleged to have been furnished to or for Lessee at or for use in
the Premises, which claims are or may be secured by any mechanic's or
materialmen's lien against the Premises, the Building or the Office Building
Project, or any interest therein.
(d) Lessee shall give Lessor not less than ten (10) days' notice to the
commencement of any work in the Premises by Lessee, and Lessor shall have the
right to post notices of non-responsibility in or on the Premises or the
Building as provided by law. If Lessee shall, in good faith, contest the
validity of any such lien, claim or demand, then Lessee shall, at its sole
expense defend itself and Lessor against the same and shall pay and satisfy
17
any such adverse judgment that may be rendered thereon before the enforcement
thereof against the Lessor or the Premises, the Building or the Office Building
Project, upon the condition that if Lessor shall require, Lessee shall furnish
to Lessor a surety bond satisfactory to Lessor in an amount equal to such
contested lien claim or demand indemnifying Lessor against liability for the
same and holding the Premises, the Building, and the Office Building Project
free from the effect of such lien or claim. In addition, Lessor may require
Lessee to pay Lessor's reasonable attorneys' fees and costs in participating in
such action if Lessor shall decide it is to Lessor's best interest so to do.
(e) All alterations, improvements, additions and Utility
Installations (whether or not such Utility Installations constitute trade
fixtures of Lessee), which may be made to the Premises by Lessee, including but
not limited to, floor coverings, panelings, doors, drapes, built-ins, moldings,
sound attenuation, and lighting and telephone or communication systems, conduit,
wiring and outlets, shall be made and done in a good and workmanlike manner and
of good and sufficient quality and materials and shall be the property of Lessor
and remain upon and be surrendered with the Premises at the expiration of the
Lease term, unless Lessor requires their removal pursuant to paragraph 7.3(a).
Provided Lessee is not in default, notwithstanding the provisions of this
paragraph 7.3(a), Lessee's personal property and equipment, other than that
which is affixed to the Premises so that it cannot be removed without material
damage to the Premises or the Building, and other than Utility Installations,
shall remain the property of Lessee and may be removed by Lessee subject to the
provisions of paragraph 7.2
(f) Lessee shall provide Lessor with as-built plans and
specifications for any alterations, improvements, additions or Utility
Installations.
7.4 Utility Additions. Lessor reserves the right to install new or
additional utility facilities throughout the Office Building Project for the
benefit of Lessor or Lessee, or any other lessee of the Office Building
Project, including, but not by way of limitation, such utilities as a plumbing,
electrical systems, communication systems, and fire protection and detection
systems, so long as such installations do not unreasonably interfere with
Lessee's use of the Premises.
8. Insurance; Indemnity.
8.1(a) Liability Insurance -- Lessee. Lessee shall, at Lessee's expense
obtain and keep in force during the term of this Lease a policy of Comprehensive
General Liability Insurance utilizing an Insurance Services Office standard form
with Broad Form General Liability Endorsement (GL0404), or equivalent, in an
amount of not less than $1,000,000 per occurrence of bodily injury and property
damage combined or in a greater amount as reasonably determined by Lessor and
shall insure Lessee with Lessor as an additional insured against liability
arising out of the use, occupancy or maintenance of the Premises. Compliance
with the above requirement shall not, however, limit the liability of Lessee
hereunder. See Addendum for Paragraph 8.1(b).
8.2 Liability Insurance -- Lessor. Lessor shall obtain and keep in force
during the term of this Lease a policy of Combined Single Limit Bodily Injury
and Broad Form Property Damage Insurance, plus coverage against such other
risks Lessor deems advisable from time to time, insuring Lessor, but not
Lessee, against liability arising out of the ownership, use, occupancy or
maintenance of the Office Building Project in an amount not less than
$5,000,000.00 per occurrence.
8.3 Property Insurance -- Lessee. Lessee shall, at Lessee's expense,
obtain and keep in force during the term of this Lease for the benefit of
Lessee, replacement cost fire and extended coverage insurance, with vandalism
and malicious mischief, sprinkler leakage and earthquake sprinkler leakage
endorsements, in an amount sufficient to cover not less than 100% of the full
replacement cost, as the same may exist from time to time, of all of Lessee's
personal property, fixtures, equipment and tenant improvements.
8.4 Property Insurance -- Lessor. Lessor shall obtain and keep in force
during the term of this Lease, a policy or policies of insurance covering loss
or damage to the Office Building Project Improvements, but not Lessee's
personal property, fixtures, equipment or tenant improvements in the amount of
the full replacement cost thereof, as the same may exist from time to time,
utilizing Insurance Services Office standard form or equivalent, providing
protection against all perils including within the classification of fire,
extended coverage, vandalism, malicious mischief, plate glass, and such other
perils as Lessor deems advisable or may be required by a lender having a lien
on the Office Building Project. In addition, Lessor shall obtain and keep in
force, during the term of this Lease, a policy of rental value insurance
covering a period of one year, with loss payable to Lessor which insurance
shall also cover all Operating Expenses for said period. Lessee will not be
named in any such policies carried by Lessor and shall have no right to any
proceeds therefrom. The policies required by these paragraphs 8.2 and 8.4 shall
contain such deductibles as Lessor or the aforesaid lender may determine. In
the event that the Premises shall suffer an insured loss as defined in
paragraph 9.1(l) hereof, the deductible amounts under the applicable insurance
policies shall be deemed an Operating Expense. Lessee shall not do or permit to
be done anything which shall invalidate the insurance policies carried by
Lessor. Lessee shall pay the entirety of any increase in the property insurance
premium for the Office Building Project over what it was immediately prior to
the commencement of the term of this Lease if the increase is specified by
Lessor's insurance carrier as being caused by the nature of Lessee's occupancy
or any act or omission of Lessee.
8.5 Insurance Policies. Lessee shall deliver to Lessor copies of liability
insurance policies required under paragraph 8.1 or certificates evidencing the
existence and amounts of such insurance within seven (7) days after the
Commencement Date of this Lease. No such policy shall be cancellable or subject
to reduction of coverage or other modification except after thirty (30) days
prior written notice to Lessor. Lessee shall, at least thirty (30) days prior to
the expiration of such policies, furnish Lessor with renewals thereof.
8.6 Waiver of Subrogation. Lessee and Lessor each hereby release and
relieve the other, and waive their entire right of recovery against the other,
for direct or consequential loss or damage arising out of or incident to the
perils covered by property insurance carried by such party, whether due to
the negligence of Lessor or Lessee or their agents, employees, contractors
and/or invitees. If necessary all property insurance policies required under
this Lease shall be endorsed to so provide.
8.7 Indemnity. Unless such damage or injury was caused by the gross
negligence or willful misconduct of Lessor, Lessee shall indemnify and hold
harmless Lessor and its agents, Lessor's master or ground lessor, partners and
lenders, from and against any and all claims for damage to the person or
property of anyone or any entity arising from Lessee's use of the Office
Building Project, or from the conduct of Lessee's business or from any activity,
work or things done, permitted or suffered by Lessee in or about the Premises or
elsewhere and shall further indemnify and hold harmless Lessor from and against
any and all claims, costs and expenses arising from any breach or default in the
performance of any obligation on Lessee's part to be performed under the terms
of this Lease, or arising from any act or omission of Lessee, or any of Lessee's
agents, contractors, employees, or invitees, and from and against all costs,
attorney's fees, expenses and liabilities incurred by Lessor as the result of
any such use, conduct, activity, work, things done, permitted or suffered,
breach, default or negligence, and in dealing reasonably therewith, including
but not limited to the defense or pursuit of any claim or any action or
proceeding involved therein; and in case any action or proceeding be brought
against Lessor by reason of any such matter, Lessee upon notice from Lessor
shall defend the same at Lessee's expense by counsel reasonably satisfactory to
Lessor and Lessor shall reasonably cooperate with Lessee in such defense. Lessor
need not have first paid any such claim in order to be so indemnified. Lessee,
as a material part of the consideration to Lessor, hereby assumes all risk of
damage to property of Lessee or injury to persons, in, upon or about the Office
Building Project arising from any cause and Lessee hereby waives all claims in
respect thereof against Lessor. See Paragraph 8.7 (continued) of Addendum.
8.8 Exemption of Lessor from Liability. Unless such damage or injury was
caused by gross negligence or misconduct of Lessor, Lessee hereby agrees that
Lessor shall not be liable for injury to Lessee's business or any loss of income
therefrom or for loss of or damage to the goods, wares, merchandise or other
property of Lessee, Lessee's employees, invitees, customers, or any other person
in or about the Premises or the Office Building Project, nor shall Lessor be
liable for injury to the person of Lessee, Lessee's employees, agents or
contractors, whether such damage or injury is caused by or results from theft,
fire, steam, electricity, gas, water or rain, or from the breakage, leakage,
obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing,
air conditioning or lighting fixtures, or from any other cause, whether said
damage or injury results from conditions arising upon the Premises or upon other
portions of the Office Building Project, or from other sources or places, or
from new construction or the repair, alteration or improvement of any part of
the Office Building Project, or of the equipment, fixtures or appurtenances
applicable thereto, and regardless of whether the cause of such damage or injury
or the means of repairing the same is inaccessible, Lessor shall not be liable
for any damages arising from any act or neglect of any other lessee, occupant or
user of the Office Building Project nor from the failure of Lessor to enforce
the provisions of any other lease of any other lessee of the Office Building
Project, or the Rules and Regulations of the Office Building Project. See
Paragraph 8.8 (continued) of Addendum.
8.9 No Representation of Adequate Coverage. Lessor makes no
representation that the limits or forms of coverage of insurance specified in
this paragraph 8 are adequate to cover Lessee's property or obligations under
this Lease.
9. Damage or Destruction.
9.1 Definitions.
(a) "Premises Damage" shall mean if the Premises are damaged or
destroyed to any extent.
(b) "Premises Building Partial Damage" shall mean if the Building of
which the Premises are a part is damaged or destroyed to the extent that the
cost to repair is less than fifty percent (50%) of the then Replacement Cost of
the building.
(c) "Premises Building Total Destruction" shall mean if the Building
of which the Premises are a part is damaged or destroyed to the extent that the
cost to repair is fifty percent (50%) or more of the then Replacement Cost of
the Building.
(d) "Office Building Project Buildings" shall mean all of the
buildings on the Office Building Project site.
(e) "Office Building Project Buildings Total Destruction" shall mean
if the Office Building Project Buildings are damaged or destroyed to the extent
that the cost of repair is fifty percent (50%) or more of the then Replacement
Cost of the Office Building Project Buildings.
(f) "Insured Loss" shall mean damage or destruction which was caused
by an event required to be covered by the insurance described in paragraph 8.
The fact that an Insured Loss has a deductible amount shall not make the loss
an uninsured loss.
(g) "Replacement Cost" shall mean the amount of money necessary to
be spent in order to repair or rebuild the damaged area to the condition that
existed immediately prior to the damage occurring, excluding all improvements
made by lessees, other than those installed by Lessor at Lessee's expense.
18
9.2 Premises Damage; Premises Building Partial Damage.
(a) Insured Loss: Subject to the provisions of paragraphs 9.4 and 9.5,
if at any time during the term of this Lease there is damage which is an
Insured Loss and which falls into the classification of Premises Damage and
Premises Building Partial Damage, then Lessor shall, as soon as reasonably
possible and to the extent the required materials and labor are readily
available through usual commercial channels, at Lessor's expense, repair such
damage (but not Lessee's fixtures, equipment or tenant improvements originally
paid for by Lessee) to its condition existing at the time of the damage, and
this Lease shall continue in full force and effect.
(b) Uninsured Loss: Subject to the provisions of paragraphs 9.4 and
9.5, if at any time during the term of this Lease there is damage which is not
an Insured Loss and which falls within the classification of Premises Damage or
Premises Building Partial Damage, unless caused by a negligent or willful act
of Lessee (in which event Lessee shall make the repairs at Lessee's expense),
which damage prevents Lessee from making any substantial use of the Premises,
Lessor may at Lessor's option either (i) repair such damage as soon as
reasonably possible at Lessor's expense, in which event this Lease shall
continue in full force and effect, or (ii) give written notice to Lessee within
thirty (30) days after the date of the occurrence of such damage of Lessor's
intention to cancel and terminate this Lease as of the date of the occurrence
of such damage, in which event this Lease shall terminate as of the date of the
occurrence of such damage.
9.3 Premises Building Total Destruction; Office Building Project Total
Destruction. Subject to the provisions of paragraphs 9.4 and 9.5, if at any
time during the term of this Lease there is damage, whether or not it is an
Insured Loss, which falls into the classification of either (i) Premises
Building Total Destruction, or (ii) Office Building Project Total Destruction,
then Lessor may at Lessor's option either (i) repair such damage or destruction
as soon as reasonably possible at Lessor's expense (to the extent the required
materials are readily available through usual commercial channels) to its
condition existing at the time of the damage, but not Lessee's fixtures,
equipment or tenant improvements, and this Lease shall continue in full force
and effect, or (ii) give written notice to Lessee within thirty (30) days after
the date of occurrence of such damage of Lessor's intention to cancel and
terminate this Lease, in which case this Lease shall terminate as of the date
of the occurrence of such damage.
9.4 Damage Near End of Term.
(a) Subject to paragraph 9.4(b), if at any time during the last twelve
(12) months of the term of this Lease there is substantial damage to the
Premises, either Lessor or Lessee may cancel and terminate this Lease as of the
date of occurrence of such damage by giving written notice to the other party
of its election to do so within 30 days after the date of occurrence of such
damage. See Paragraph 9.4(a)(continued) of Addendum.
(b) Notwithstanding paragraph 9.4(a), in the event that Lessee has an
option to extend or renew this Lease, and the time within which said options
may be exercised has not yet expired, Lessee shall exercise such option, if it
is to be exercised at all, no later than twenty (20) days after the occurrence
of an Insured Loss falling within the classification of Premises Damage during
the last twelve (12) months of the term of this Lease. If Lessee duly exercises
such option during said twenty (20) day period, Lessor shall, at Lessor's
expense, repair such damage, but not Lessee's fixtures, equipment or tenant
improvements, as soon as reasonably possible and this Lease shall continue in
full force and effect. If Lessee fails to exercise such option during said
twenty (20) day period, then Lessor may at Lessor's option terminate and cancel
this Lease as of the expiration of said twenty (20) day period by giving
written notice to Lessee of Lessor's election to do so within ten (10) days
after the expiration of said twenty (20) day period, notwithstanding any term
or provision in the grant of option to the contrary.
9.5 Abatement of Rent; Lessee's Remedies.
(a) In the event Lessor repairs or restores the Building or Premises
pursuant to the provisions of this paragraph 9, and any part of the Premises
are not usable (including loss of use due to loss of access or essential
services), the rent payable hereunder (including Lessee's Share of Operating
Expense increase) for the period during which such damage, repair or
restoration continues shall be abated, provided (1) the damage was not the
result of the negligence of Lessee, and (2) such abatement shall only be to the
extent the operation and profitability of Lessee's business as operated from
the Premises is adversely affected. Except for said abatement of rent, if any,
Lessee shall have no claim against Lessor for any damage suffered by reason of
any such damage, destruction, repair or restoration.
(b) If Lessor shall be obligated to repair or restore the Premises or
the Building under the provisions of this Paragraph 9 and shall not commence
such repair or restoration within ninety (90) days after such occurrence, or if
Lessor shall not complete the restoration and repair within six (6) months
after such occurrence, Lessee may at Lessee's option cancel and terminate this
Lease by giving Lessor written notice of Lessee's election to do so at any time
prior to the commencement or completion, respectively, of such repair or
restoration. In such event this Lease shall terminate as of the date of such
notice.
(c) Lessee agrees to cooperate with Lessor in connection with any such
restoration and repair, including but not limited to the approval and/or
execution of plans and specifications required.
9.6 Termination -- Advance Payments. Upon termination of this Lease pursuant
to this paragraph 9, an equitable adjustment shall be made concerning advance
rent and any advance payments made by Lessee to Lessor. Lessor shall, in
addition, return to Lessee so much of Lessee's security deposit as has not
theretofore been applied by Lessor.
9.7 Waiver. Lessor and Lessee waive the provisions of any statute which
relate to termination of leases when leased property is destroyed and agree
that such event shall be governed by the terms of this Lease.
10. Real Property Taxes.
10.1 Payment of Taxes. Lessor shall pay the real property tax, as defined in
paragraph 10.3, applicable to the Office Building Party subject to
reimbursement by Lessee of Lessee's Share of such taxes in accordance with the
provisions of paragraph 4.2, except as otherwise provided in paragraph 10.2.
10.2 Additional Improvements. Lessee shall not be responsible for paying any
increase in real property tax specified in the tax assessor's records and work
sheets being caused by additional improvements placed upon the Office Building
Project by other lessees or by Lessor for the exclusive enjoyment of any
leases. Lessee shall, however, pay to Lessor at the time that Operating
Expenses are payable under paragraph 4.2(c) the entirety of any increase in
real property tax if assessed solely by reason of additional improvements
placed upon the Premises by Lessee or at Lessee's request.
10.3 Definition of "Real Property Tax." As used herein, the term "real
property tax" shall include any form of real estate tax or assessment, general,
special, ordinary or extraordinary, and any license fee, commercial rental tax,
improvement bond or bonds, levy or tax (other than inheritance, personal income
or estate taxes) imposed on the Office Building Project or any portion thereof
by any authority having the direct or indirect power to tax, including any
city, county, state or federal government, or any school, agricultural,
sanitary, fire, street, drainage or other improvement district thereof, as
against any legal or equitable interest of Lessor in the Office Building
Project or in any portion thereof, as against Lessor's right to rent or other
income therefrom, and as against Lessor's business of leasing the Office
Building Project. The term "real property tax" shall also include any tax, fee,
levy, assessment or charge (i) in substitution of, partially or totally, any
tax, fee, levy, assessment or charge hereinabove included within the definition
of "real property tax," or (ii) the nature of which was hereinbefore included
within the definition of "real property tax," or (iii) which is imposed for a
service or right not charged prior to June 1, 1978, or, if previously charged,
has been increased since June 1, 1978, or (iv) which is imposed as a result of
change in ownership, as defined by applicable local statutes for property tax
purposes, of the Office Building Project or which is added to a tax or charge
hereinbefore included within the definition of real property tax by reason of
such change of ownership, or (v) which is imposed by reason of this
transaction, and modifications or changes hereto, or any transfers hereof.
10.4 Joint Assessment. If the Improvements or property, the taxes for which
are to be paid separately by Lessee under paragraph 10.2 or 10.5 are not
separately assessed, Lessee's portion of that tax shall be equitably determined
by Lessor from the respective valuations assigned in the assessor's work sheets
or such other information (which may include the cost of construction) as may
be reasonably available. Lessor's reasonable determination thereof, in good
faith, shall be conclusive.
10.5 Personal Property Taxes.
(a) Lessee shall pay prior to delinquency all taxes assessed against
and levied upon trade fixtures, furnishings, equipment and all other personal
property of Lessee contained in the Premises or elsewhere.
(b) If any of Lessee's said personal property shall be assessed with
Lessor's real property, Lessee shall pay to Lessor the taxes attributable to
Lessee within ten (10) days after receipt of a written statement setting forth
the taxes applicable to Lessee's property.
11. Utilities.
11.1 Services Provided by Lessor. Lessor shall provide heating,
ventilation, air conditioning, and janitorial service as reasonably required,
reasonable amounts of electricity for normal lighting and office machines,
water for reasonable and normal drinking and lavatory use, and replacement
light bulbs and/or fluorescent tubes and ballasts for standard overhead
fixtures. See Paragraph 11.1 (continued) of Addendum.
11.2 Services Exclusive to Lessee. Lessee shall pay for all water,
gas, heat, light, power, telephone and other utilities and services specially
or exclusively supplied and/or metered exclusively to the Premises or to
Lessee, together with any taxes thereon. If any services are not separately
metered to the Premises, Lessee shall pay at Lessor's option, either Lessee's
Share or a reasonable proportion to be determined by Lessor of all charges
jointly metered with other promises in the Building, or the Office Building
Project.
11.3 Hours of Service. Sold services and utilities shall be provided
during generally accepted business days and hours or such other days or hours
as may hereafter be set forth. Utilities and services required at other time
shall be subject to advance request and reimbursed by Lessee to Lessor of the
cost thereof. See Addendum for Paragraph 11.3 continued.
19
11.4 Excess Usage by Lessee. Lessee shall not make connection to the
utilities except by or through existing outlets and shall not install or use
machinery or equipment in or about the Premises that uses excess water,
lighting or power, or suffer or permit any act that causes extra burden upon
the utilities or services, including but not limited to security services, over
standard office usage office usage for the Office Building Project. Lessor
shall require Lessee to reimburse Lessor for any excess expenses or costs that
may arise out of a breach of this subparagraph by Lessee. Lessor may, in its
solo discretion, install at Lessee's expense supplemental equipment and/or
separate metering applicable to Lessee's excess usage or loading. See Paragraph
11.4 (continued) of Addendum
11.5 Interruptions. There shall be no abatement of rent and Lessor shall
not be liable in any respect whatsoever for the inadequacy, stoppage,
interruption or discontinuance of any utility or service due to riot, strike,
labor dispute, breakdown, accident, repair or other cause beyond Lessor's
reasonable control or in cooperation with governmental request or directions.
12.1 Assignment and Subletting.
12.1 Lessor's Consent Required. Lessee shall not voluntarily or by
operation of law assign, transfer, mortgage, sublet, or otherwise transfer or
encumber all or any part of Lessee's interest in the Lease or in the Premises,
without Lessor's prior written consent, which Lessor shall not unreasonably
withhold. Lessor shall respond to Lessee's request for consent hereunder in a
timely manner and any attempted assignment, transfer, mortgage, encumbrance or
subletting without such consent shall be void, and shall constitute a material
default and breach of this Lease without the need for notice to Lessee under
paragraph 13.1. "Transfer" within the meaning of this paragraph 12 shall
include the transfer or transfers aggregating: (a) if Lessee is a corporation,
more than a block of twenty-five percent (25%) of the outstanding voting stock
of such corporation, or (b) if Lessee is a partnership, more than twenty-five
percent (25%) of the profit and loss participation in such partnership.
12.2 Lessee Affiliate. Notwithstanding the provisions of paragraph 12.1
hereof, Lessee may assign or sublet the Premises, or any portion thereof,
without Lessor's consent, to any corporation which controls, is controlled by
or is under common control with Lessee, or to any corporation resulting from
the merger or consolidation with Lessee, or to any person or entity which
acquires all the assets of Lessee as a going concern of the business that is
being conducted on the Premises, all of which are referred to as "Lessee
Affiliate"; provided that before such assignment shall be effective, (a) said
assignee shall assume, in full, the obligations of Lessee under this Lease and
(b) Lessor shall be given written notice of such assignment and assumption. Any
such assignment shall not, in any way, affect or limit the liability of Lessee
under the terms of this Lease even if after such assignment or subletting the
terms of this Lease are materially changed or altered without the consent of
Lessee, the consent of whom shall not be necessary.
12.3 Terms and Conditions Applicable to Assignment and Subletting.
(a) Regardless of Lessor's consent, no assignment or subletting shall
release Lessee of Lessee's obligations hereunder or alter the primary liability
of Lessee to pay the rent and other sums due Lessor hereunder including
Lessee's Share of Operating Expense Increase, and to perform all other
obligations to be performed by Lessee hereunder.
(b) Lessor may accept rent from any person other than Lessee pending
approval or disapproved of such assignment.
(c) Neither a delay in the approval or disapproval of such assignment
or subletting, nor the acceptance of rent, shall constitute a waiver or
estoppel of Lessor's right to exercise its remedies for the breach of any of
the terms or conditions of this paragraph 12 or this Lease.
(d) If Lessee's obligations under this Lease have been guaranteed by
third parties, then an assignment or sublease, and Lessor's consent thereto,
shall not be effective unless said guarantors give their written consent to
such sublease and the terms thereof.
(e) The consent by Lessor to any assignment or subletting shall not
constitute to any subsequent assignment or subletting by Lessee or to any
subsequent or successive assignment or subletting by the sublessee. However,
Lessor may consent to subsequent sublettings and assignments of the sublease or
any amendments or modifications thereto without notifying Lessee or anyone else
liable on the Lease or sublease and without obtaining their consent and such
action shall not relieve such persons from liability under this Lease or said
sublease; however, such persons shall not be responsible to the extent any such
amendment or modification enlarges or increases the obligations of the Lessee
or sublessee under this Lease or such sublease.
(f) In the event of any default under this Lease, Lessor may proceed
directly against Lessee, any guarantors or any one else responsible for the
performance of this Lease, including the sublessee, without first exhausting
Lessor's remedies against any other person or entity responsible therefor to
Lessor, or any security held by Lessor or Lessee.
(g) Lessor's written consent to any assignment or subletting of the
Premises by Lessee shall not constitute an acknowledgement that no default then
exists under this Lease of the obligations to be performed by Lessee nor shall
such consent be deemed a waiver of any then existing default, except as may be
otherwise stated by Lessor at the time.
(h) The discovery of the fact that any financial statement relied
upon by Lessor in giving its consent to an assignment or subletting was
materially false shall, at Lessor's election, render Lessor's said consent null
and void.
12.4 Additional Terms and Conditions Applicable to Subletting. Regardless
of Lessor's consent, the following terms and conditions shall apply to any
subletting by Lessee of all or any part of the Premises and shall be deemed
included in all subleases under this Lease whether or not expressly
incorporated therein:
(a) Lessee hereby assigns and transfers to Lessor all of Lessee's
interest in all rentals and income arising from any sublease heretofore or
hereafter made by Lessee, and Lessor may collect such rent and income and apply
same toward Lessee's obligations under this Lease; provided, however, that
subject to 12.4(f) until a default shall occur in the performance of Lessee's
obligations under this lease, Lessee may receive, collect and enjoy the rents
accruing under such sublease. Lessor shall not, by reason of this or any other
assignment of such sublease to Lessor nor by reason of the collection of the
rents from a sublessee, be deemed liable to the sublessee for any failure of
Lessee to perform and comply with any of Lessee's obligations to such sublessee
under such sublease. Lessee hereby irrevocably authorizes and directs any such
sublessee, upon receipt of a written notice from Lessor stating that a default
exists in the performance of Lessee's obligations under this Lease, to pay to
Lessor the rents due and to become due under the sublease. Lessee agrees that
such sublessee shall have the right to rely upon any such statement and request
from Lessor, and that such sublessee shall pay such rents to Lessor without any
obligation or right to inquire as to whether such default exists and
notwithstanding any notice from or claim from Lessee to the contrary. Lessee
shall have no right or claim against said sublessee or Lessor for any such
rents so paid by said sublessee to Lessor.
(b) No sublease entered into by Lessee shall be effective unless and
until it has been approved in writing by Lessor. In entering into any sublease,
Lessee shall use only such form of sublessee as is satisfactory to Lessor, and
once approved by Lessor, such sublease shall not be changed or modified without
Lessor's prior written consent. Any sublease shall, by reason of entering into
a sublease under this Lease, be deemed, for the benefit of Lessor, to have
assumed and agreed to conform and comply with each and every obligation therein
to be performed by Lessee other than such obligations as are contrary to or
inconsistent with provisions contained in a sublease to which Lessor has
expressly consented in writing.
(c) In the event Lessee shall default in the performance of its
obligations under this Lease, Lessor at its option and without any obligation
to do so, may require any sublessee to attorn to Lessor, in which event Lessor
shall undertake the obligations of Lessee under such sublease from the time of
the exercise of said option to the termination of such sublease; provided,
however, Lessor shall not be liable for any prepaid rents or security deposit
paid by such sublessee to Lessee or for any other prior defaults of Lessee
under such sublease.
(d) No sublessee shall further assign or sublet all or any part of
the Premises without Lessor's prior written consent.
(e) With respect to any subletting to which Lessor has consented,
Lessor agrees to deliver a copy of any notice of default by Lessee to the
sublessee. Such sublessee shall have the right to cure a default of Lessee
within three the (3) days after service of said notice of default upon such
sublessee, and the sublessee shall have a right of reimbursement and offset from
and against Lessee for any such defaults cured by the sublessee. See Addendum
for Paragraph 12.4(f).
12.5 Lessor's Expenses. In the event Lessee shall assign or sublet the
Premises or request the consent of Lessor to any assignment or subletting or if
Lessee shall request the consent of Lessor for any act Lessee proposes to do
then Lessee shall pay Lessor's reasonable costs and expenses incurred in
connection therewith, including attorneys', architects', engineers' or other
consultants' fees.
12.6 Conditions to Consent. Lessor reserves the right to condition any
approval to assign or sublet upon Lessor's determination that (a) the proposed
assignee or sublessee shall conduct a business on the Premises of a quality
substantially equal to that of Lessee and consistent with the general character
of the other occupants of the Office Building Project and not in violation of
any exclusives or rights then held by other tenants, and (b) the proposed
assignee or sublessee be at least as financially responsible as Lessee was
expected to be at the time of the execution of this Lease or of such assignment
or subletting, whichever is greater. See Addendum for Paragraph 12.7.
13.1 Default. The occurrence of any one or more of the following events
shall constitute a material default of this Lease by Lessee:
(a) The vacation or abandonment of the Premises by Lessee. Vacation of
the Premises shall include the failure to occupy the Premises for a continuous
period of sixty (60) days or more, whether or not the rent is paid.
(b) The breach by Lessee of any of the covenants, conditions or
provisions of paragraphs 7.3(a), (b) or (d) (alterations), 12.1 (assignment or
subletting), 13.1(a) (vacation or abandonment), 13.1(e) (insolvency), 13.1(f)
(false statement), 16(a) (estoppel certificate), 30(b) (subordination), 33
(auctions), or 41.1 (easements), all of which are hereby deemed to be material,
non-curable defaults without the necessity of any notice by Lessor to Lessee
thereof.
(c) The failure by Lessee to make any payment of rent or any other
payment required to be made by Lessee hereunder, as and when due, where such
failure shall continue for a period of three (3) days after written notice
thereof from Lessor to Lessee. In the event that Lessor serves Lessee with a
Notice to Pay Rent or Quit pursuant to applicable Unlawful Detainer statutes
such Notice to Pay Rent or Quit shall also constitute the notice required by
this subparagraph.
20
(d) The failure by Lessee to observe or perform any of the covenants,
conditions, or provisions of this Lease to be observed or performed by Lessee
other than those referenced in subparagraphs (b) and (c), above, where such
failure shall continue for a period of thirty (30) days after written notice
thereof from Lessor to Lessee; provided, however, that if the nature of Lessee's
noncompliance is such that more than thirty (30) days are reasonably required
for its cure, than Lessee shall not be deemed to be in default if Lessee
commenced such cure within said thirty (30) day period and thereunder diligently
pursues such cure to completion. To the extent permitted by law, such thirty
(30) day notice shall constitute the sole and exclusive notice required to be
given to Lessee under applicable Unlawful Detainer statutes.
(e)(i) The making by Lessee of any general arrangement or general
assignment for the benefit of creditors; (ii) Lessee becoming a "debtor" as
defined in 11 U.S.C. Section 101 or any successor statute thereto (unless, in
the case of a petition filed against Lessee, the same is dismissed within sixty
(60) days; (iii) the appointment of a trustee or receiver to take possession of
substantially all of Lessee's assets located at the Premises or of Lessee's
interest in this Lease, where possession is not restored to Lessee within thirty
(30) days; or (iv) the attachment, execution or other judicial seizure of
substantially all of Lessee's assets located at the Premises or of Lessee's
interest in this Lease, where such seizure is not discharged within thirty (30)
days. In the event that any provision of this paragraph 13.1(e) is contrary to
any applicable law, such provision shall be of no force or effect.
(f) The discovery by Lessor that any financial statement given to Lessor
by Lessee, or its successor in interest or by any guarantor or Lessee's
obligation hereunder, was materially false.
13.2 Remedies. In the event of any material default or breach of this Lease by
Lessee, Lessor may at any time thereafter, with or without notice or demand and
without limiting Lessor in the exercise of any right or remedy which Lessor may
have by reason of such default;
(a) Terminate Lessee's right to possession of the Premises by any lawful
means, in which case this Lease and the term hereof shall terminate and Lessee
shall immediately surrender possession of the Premises to Lessor. In such event
Lessor shall be entitled to recover from Lessee all damages incurred by Lessor
by reason of the Lessee's default including, but not limited to, the cost of
recovering possession of the Premises; expenses of reletting, including
necessary renovation and alteration of the Premises, reasonable attorneys'
fees, and any real estate commission actually paid; the worth at the time of
award by the court having jurisdiction thereof of the amount by which the
unpaid rent for the balance of the term after the time of such award exceeds
the amount of such rental loss for the same period that Lessee proves could be
reasonably avoided; that portion of the leasing commission paid by Lessor
pursuant to paragraph 15 applicable to the unexpired term of this Lease.
(b) Maintain Lessee's right to possession in which case this Lease shall
continue in effect whether or not Lessee shall have vacated or abandoned the
Premises. In such event Lessor shall be entitled to enforce all of Lessor's
rights and remedies under this Lease, including the right to recover the rent
as it becomes due hereunder.
(c) Pursue any other remedy now or hereafter available to Lessor under the
laws or judicial decisions of the state wherein the Premises are located.
Unpaid installments of rent and other unpaid monetary obligations of Lessee
under the terms of this Lease shall bear interest from the date due at the
maximum rate then allowable by law.
13.3 Default by Lessor. Lessor shall not be in default unless Lessor fails to
perform obligations required of Lessor within a reasonable time, but in no event
later than thirty (30) days after written notice by Lessee to Lessor and to the
holder of any first mortgage or deed of trust covering the Premises whose name
and address shall have theretofore been furnished to Lessee in writing,
specifying wherein Lessor has failed to perform such obligation; provided,
however, that if the nature of Lessor's obligation is such that more than thirty
(30) days are required for performance then Lessor shall not be in default if
Lessor commences performance within such 30-day period and thereafter diligently
pursues the same to completion.
13.4 Late Charges. Lessee hereby acknowledges that late payment by Lessee to
Lessor of Base Rent, Lessee's Share of Operating Expense increase or other sums
due hereunder will cause Lessor to incur costs not contemplated by this Lease,
the exact amount of which will be extremely difficult to ascertain. Such costs
include, but are not limited to, processing and accounting charges, and late
charges which may be imposed on Lessor by the terms of any mortgage or trust
deed covering the Office Building Project. Accordingly, if any installment of
Base Rent, Operating Expenses Increase, or any other sum due from Lessee shall
not be received by Lessor or Lessor's designee within ten (10) days after such
amount shall be due, then, without any requirement for notice to Lessee, Lessee
shall pay to Lessor a late charge equal to 6% of such overdue amount. The
parties hereby agree that such late charge represents a fair and reasonable
estimate of the costs Lessor will incur by reason of late payment by Lessee.
Acceptance of such late charge by Lessor shall in no event constitute a waiver
of Lessee's default with respect to such overdue amount, nor prevent Lessor from
exercising any of the other rights and remedies granted hereunder.
14. Condemnation. If the Premises or any portion or the Office Building Project
are taken under the power of eminent domain, or sold under the threat of the
exercise of said power (all of which are herein called "condemnation"), this
Lease shall terminate as to the part so taken as of the date the condemning
authority takes title or possession, whichever first occurs; provided that if
so much of the Premises or the Office Building Project are taken by such
condemnation as would substantially and adversely affect the operating and
profitability of Lessee's business conducted from the Premises, Lessee shall
have the option, to be exercised only in writing within thirty (30) days after
Lessor shall have given Lessee written notice of such taking (or in the absence
of such notice, within thirty (30) days after the condemning authority shall
have taken possession), to terminate this Lease as of the date the condemning
authority takes such possession. If Lessee does not terminate this Lease in
accordance with the foregoing, this Lease shall remain in full force and effect
as to the portion of the Premises remaining, except that the rent and Lessee's
Share of Operating Expenses Increase shall be reduced in the proportion that the
floor area of the Premises taken bears to the total floor area of the Premises.
Common Areas taken shall be excluded from the Common Areas usable by Lessee and
no reduction of rent shall occur with respect thereto or by reason thereof.
Lessor shall have the option in its sole discretion to terminate this Lease as
of the taking of possession by the condemning authority, by giving written
notice to Lessee of such election within thirty (30) days after receipt of
notice of a taking by condemnation of any part of the Premises or the Office
Building Project. Any award for the taking of all or any part of the Premises or
the Office Building Project under the power of eminent domain or any payment
under threat of the exercise of such power shall be the property of Lessor,
whether such award shall be made as compensation for diminution in value of the
leasehold or for the taking of the fee, or as severance damages; provided,
however, that Lessee shall be entitled to any separate award for loss of or
damage to Lessee's trade fixtures, removable personal property and unamortized
tenant improvements that have been paid for by Lessee. For that purpose the cost
of such improvements shall be amortized over the original term of this Lease
excluding any options. In the event that this Lease is not terminated by reason
of such condemnation, Lessor shall to the extent of severance damages received
by Lessor in connection with such condemnation, repair any damage to the
Premises caused by such condemnation except to the extent that Lessee has been
reimbursed therefor by the condemning authority. Lessee shall pay any amount in
excess of such severance damages required to complete such repair.
15. Broker's Fee.
(a) The brokers involved in this transaction are Colliers ▇▇▇▇▇ ▇▇▇▇▇ as
"listing broker" and CB Commercial Real Estate as "cooperating broker,"
licensed real estate broker(s). A "cooperating broker" is defined as any broker
other than the listing broker entitled to a share of any commission arising
under this Lease. Upon execution of this Lease by both parties, Lessor shall
pay to said brokers jointly, or in such separate shares as they may mutually
designate in writing, a fee as set forth in a separate agreement between Lessor
and said broker(s), or in the event there is no separate agreement between
Lessor and said broker(s), the sum of $__________________________, for
brokerage services rendered by said broker(s) to Lessor in this transaction.
(d) Lessee and Lessor each represent and warrant to the other that neither
has had any dealings with any person, firm, broker or finder (other than the
person(s), if any, whose names are set forth in paragraph 15(a), above) in
connection with the negotiation of this Lease and/or the consummation of the
transaction contemplated hereby, and no other broker or other person, firm or
entity is entitled to any commission or finder's fee in connection with said
transaction and Lessee and Lessor do each hereby indemnify and hold the other
harmless from and against any costs, expenses, attorney's fees or liability for
compensation or charges which may be claimed by any such unnamed broker, finder
or other similar party by reason of any dealings or actions of the indemnifying
party.
16. Estoppel Certificate.
(a) Each party (as "responding party") shall at any time upon not less than
ten (10) days' prior written notice from the other party ("requesting party")
execute, acknowledge and deliver to the requesting party a statement in writing
(i) certifying that this Lease is unmodified and in full force and effect (or,
if modified, stating the nature of such modification and certifying this Lease,
as so modified, is in full force effect) and the date
21
to which the rent and other charges are paid in advance, if any, and (ii)
acknowledging that there are not, to the responding party's knowledge, any
uncured defaults on the part of the requesting party, or specifying such
defaults if any are claimed. Any such statement may be conclusively relied upon
by any prospective purchaser or encumbrancer of the Office Building Project or
of the business of Lessee.
(b) At the requesting party's option, the failure to deliver such
statement within such time shall be a material default of this Lease by the
party who is to respond, without any further notice to such party, or it shall
be conclusive upon such party that (i) this Lease is in full force and effect,
without modification except as may be represented by the requesting party, (ii)
there are no uncured defaults in the requesting party's performance, and (iii)
if Lessor is the requesting party, not more than one month's rent has been paid
in advance.
(c) If Lessor desires to finance, refinance, or sell the Office Building
Project, or any part thereof, Lessee hereby agrees to deliver to any lender or
purchaser designated by Lessor such financial statements of Lessee as may be
reasonably required by such lender or purchaser. Such statements shall include
the past three (3) years' financial statements of Lessee. All such financial
statements shall be received by Lessor and such lender or purchaser in
confidence and shall be used only for the purposes herein set forth.
17. LESSOR'S LIABILITY. The term "Lessor" as used herein shall mean only the
owner or owners, at the time in question, of the fee title or a lessee's
interest in a ground lease of the Office Building Project, and except as
expressly provided in paragraph 15, in the event of any transfer of such title
or interest, Lessor herein named (and in case of any subsequent transfers then
the grantor) shall be relieved from and after the date of such transfer of all
liability as respects Lessor's obligations thereafter to be performed, provided
that any funds in the hands of Lessor or the then grantor at the time of such
transfer in which Lessee has an interest, shall be delivered to the grantee.
The obligations contained in this Lease to be performed by Lessor shall, subject
as aforesaid, be binding on Lessor's successors and assigns, only during their
respective periods of ownership.
18. SEVERABILITY. The invalidity of any provision of this Lease as determined
by a court of competent jurisdiction shall in no way affect the validity of any
other provision hereof.
19. INTEREST ON PAST-DUE OBLIGATIONS. Except as expressly herein provided, any
amount due to lessor not paid when due shall bear interest at the maximum rate
then allowable by law or judgments from the date due. Payment of such interest
shall not excuse or cure any default by Lessee under this Lease; provided,
however, that interest shall not be payable on late charges incurred by Lessee
nor on any amounts upon which late charges are paid by Lessee.
20. TIME OF ESSENCE. Time is of the essence with respect to the obligations to
be performed under this Lease.
21. ADDITIONAL RENT. All monetary obligations of Lessee to Lessor under the
terms of this Lease, including but not limited to Lessee's Share of Operating
Expense increase and any other expenses payable by Lessor hereunder shall be
deemed to be rent.
22. INCORPORATION OF PRIOR AGREEMENTS; AMENDMENTS. This Lease contains all
agreements of the parties with respect to any matter mentioned herein. No prior
or contemporaneous agreement or understanding pertaining to any such matter
shall be effective. This Lease may be modified in writing only, signed by the
parties in interest at the time of the modification. Except as otherwise stated
in this Lease, Lessee hereby acknowledges that neither the real estate broker
listed in paragraph 15 hereof nor any cooperating broker on this transaction
nor the Lessor or any employee or agents of any of said persons has made
any oral or written warranties or representations to Lessee relative to the
condition or use by Lessee of the Premises or the Office Building Project and
Lessee acknowledges that Lessee assumes all responsibility regarding the
Occupational Safety Health Act, the legal use and adaptability of the Premises
and the compliance thereof with all applicable laws and regulations in effect
during the term of this Lease.
23. NOTICES. Any notice required or permitted to be given hereunder shall be
in writing and may be given by personal delivery or by certified or registered
mail, and shall be deemed sufficiently given if delivered or addressed to
Lessee or to Lessor at the address noted below or adjacent to the signature of
the respective parties, as the case may be. Mailed notices shall be deemed
given upon actual receipt at the address required, or forty-eight hours
following deposit in the mail, postage prepaid, whichever first occurs. Either
party may by notice to the other specify a different address for notice
purposes except that upon Lessee's taking possession of the Premises, the
Premises shall constitute Lessee's address for notice purposes. A copy of all
notices required or permitted to be given to Lessor hereunder shall be
concurrently transmitted to such party or parties at such addresses as Lessor
may from time to time hereafter designate by notice to Lessee. See Paragraph 23
(continued) of Addendum.
24. WAIVERS. No waiver by Lessor of any provision hereof shall be deemed a
waiver of any other provision hereof or of any subsequent breach by Lessee of
the same or any other provision. Lessor's consent to, or approval of, any act
shall not be deemed to render unnecessary the obtaining of Lessor's consent to
or approval of any subsequent act by Lessee. The acceptance of rent hereunder
by Lessor shall not be a waiver of any preceding breach by Lessee of any
provision hereof, other than the failure of Lessee to pay the particular rent
so accepted, regardless of Lessor's knowledge of such preceding breach at the
time of acceptance of such rent.
25. RECORDING. Either Lessor or Lessee shall, upon request of the other,
execute, acknowledge and deliver to the other a "short form" memorandum of this
Lease for recording purposes. See Addendum for Paragraph 25 (continued).
26. HOLDING OVER. If Lessee, with Lessor's consent, remains in possession of
the Premises or any part thereof after the expiration of the term hereof, such
occupancy shall be a tenancy from month to month upon all the provisions of
this Lease pertaining to the obligations of Lessee, except that the rent
payable shall be one hundred fifty percent (150%) of the rent payable
immediately preceding the termination date of this Lease, and all Options, if
any, granted under the terms of this Lease shall be deemed terminated and be
of no further effect during said month to month tenancy.
27. CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies
at law or in equity.
28. COVENANTS AND CONDITIONS. Each provision of this Lease performable by
Lessee shall be deemed both a covenant and a condition.
29. BINDING EFFECT; CHOICE OF LAW. Subject to any provisions hereof
restricting assignment of subletting by Lessee and subject to the provisions of
paragraph 17, this Lease shall bind the parties, their personal
representatives, successors and assigns. This Lease shall be governed by the
laws of the State where the Office Building Project is located and any
litigation concerning this Lease between the parties hereto shall be initiated
in the county in which the Office Building Project is located.
30. SUBORDINATION.
(a) This Lease, and any Option or right of first refusal granted hereby,
at Lessor's option, shall be subordinate to any ground lease, mortgage, deed
of trust, or any other hypothecation or security now or hereafter placed upon
the Office Building Project and to any and all advances made on the security
thereof and to all renewals, modifications, consolidations, replacements and
extensions thereof. Notwithstanding such subordination, Lessee's right to quiet
possession of the Premises shall not be disturbed if Lessee is not in default
and so long as Lessee shall pay the rent and observe and perform all of the
provisions of this Lease, unless this Lease is otherwise terminated pursuant to
its terms. If any mortgagee, trustee or ground lessor shall elect to have this
Lease and any Options granted hereby prior to the lien of its mortgage, deed of
trust or ground lease, and shall give written notice thereof to Lessee, this
Lease and such Options shall be deemed prior to such mortgage, deed of trust or
ground lease, whether this Lease or such Options are dated prior or subsequent
to the date of said mortgage, deed of trust or ground lease or the date of
recording thereof. See Paragraph 30(a) (continued) of Addendum.
(b) Lessee agrees to execute any documents required to effectuate an
attornment, a subordination, or to make this Lease or any Option granted herein
prior to the lien of any mortgage, deed of trust or ground lease, as the case
may be, Lessee's failure to execute such documents within ten (10) days after
written demand shall constitute a material default by Lessee hereunder without
further notice to Lessee or, at Lessor's option, Lessor shall execute such
documents on behalf of Lessee as Lessee's attorney-in-fact. Lessee does hereby
make, constitute and irrevocably appoint Lessor as Lessee's attorney-in-fact
and in Lessee's name, place and stead, to execute such documents in accordance
with this paragraph 30(b).
31. ATTORNEYS' FEES.
31.1 If either party named herein brings an action to enforce the terms
hereof or declare rights hereunder, the prevailing party in any such action,
trial or appeal thereon, shall be entitled to his reasonable attorneys' fees to
be paid by the losing party as fixed by the court in the same or a separate
suit, and whether or not such action is pursued to decision or judgment.
31.2 The attorneys' fee award shall not be computed in accordance with any
court fee schedule, but shall be such as to fully reimburse all attorneys' fees
reasonably incurred in good faith.
31.3 Lessor shall be entitled to reasonable attorneys' fees and all other
costs and expenses incurred in the preparation and service of notice of default
and consultations in connection therewith, whether or not a legal transaction is
subsequently commenced in connection with such default.
32. LESSOR'S ACCESS.
32.1 Lessor and Lessor's agents shall have the right to enter the Premises
at reasonable times for the purpose of inspecting the same, performing any
services required of Lessor, showing the same to prospective purchasers,
lenders, or lessees, taking such safety measures, erecting such scaffolding or
other necessary structures, making such alterations, repairs, improvements or
additions to the Premises or to the Office Building Project as Lessor may
reasonably deem necessary or desirable and the erecting, using and maintaining
of utilities, services, pipes and conduits through the Premises and/or other
premises as long as there is no material adverse effect to Lessee's use of the
Premises. Lessor may at any time place on or about the Premises or the Building
any ordinary "For Sale" signs and Lessor may at any time during the last 120
days of the term hereof place on or about the Premises any ordinary, "For
Lease" signs.
32.2 All activities of Lessor pursuant to this paragraph shall be without
abatement of rent, nor shall Lessor have any liability to Lessee for the same.
22
32.3 Lessor shall have the right to retain keys to the Premises and to
unlock all doors in or upon the Premises other than to files, vaults and safes,
and in the case of emergency to enter the Premises by any reasonably
appropriate means, and any such entry shall not be deemed a forceable or
unlawful entry or detainer of the Premises or an eviction. Lessee waives any
charges for damages or injuries or interference with Lessee's property or
business in connection therewith.
33. Auctions. Lessee shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises or the Common Areas
without first having obtained Lessor's prior written consent. Notwithstanding
anything to the contrary in this Lease, Lessor shall not be obligated to
exercise any standard or reasonableness in determining whether to grant such
consent. The holding of any auction on the Premises or Common Areas in
violation of this paragraph shall constitute a material default of this Lease.
34. Signs. Lessee shall not place any sign upon the Promises or the Office
Building Project without Lessor's prior written consent. Under no circumstances
shall Lessee place a sign on any roof of the Office Building Project. See
Paragraph 34 (continued) of Addendum.
35. Merger. The voluntary or other surrender of this Lease by Lessee, or a
mutual cancellation thereof, or a termination by Lessor, shall not work a
merger, and shall, at the option of Lessor, terminate all or any existing
subtenancies or may, at the option of Lessor, operate as an assignment to
Lessor of any or all of such subtenancies.
36. Consents. Except for paragraphs 33 (auctions) and 34 (signs) hereof,
wherever in this Lease the consent of one party is required to an act of the
other party such consent shall not be unreasonably withheld or delayed.
37. Guarantor. In the event that there is a guarantor of this Lease, said
guarantor shall have the same obligations as Lessee under this Lease.
38. Quiet Possession. Upon Lessee paying the rent for the Premises and
observing and performing all of the covenants, conditions and provisions on
Lessee's part to be observed and performed hereunder, Lessee shall have quiet
possession of the Premises for the entire term hereof subject to all of the
provisions of this Lease. The individuals executing this Lease on behalf of
Lessor represent and warrant to Lessee that they are fully authorized and
legally capable of executing this Lease on behalf of Lessor and that such
execution is binding upon all parties holding an ownership interest in the
Office Building Project.
39. Options.
39.1 Definition. As used in this paragraph the word "Option" has the
following meaning: (1) the right or option to extend the term of this Lease or
to renew this Lease or to extend or renew any lease that Lessee has on other
property of Lessor; (2) the option of right of first refusal to lease the
Premises or the right of first offer to lease the Premises or the right of first
refusal to lease other space within the Office Building Project or other
property of Lessor or the right of first offer to lease other space within the
Office Building Project or other property of Lessor; (3) the right or option to
purchase the Premises or the Office Building Project, or the right of first
refusal to purchase the Premises or the Office Building Project or the right of
first offer to purchase other property of Lessor or the right of first offer to
purchase other property of Lessor.
39.2 Options Personal. Each Option granted to Lessee in this Lease is
personal to the original Lessee and may be exercised only by the original Lessee
while occupying the Premises who does so without the intent of thereafter
assigning this Lease or subletting the Premises or any portion thereof, and may
not be exercised or be assigned, voluntarily or involuntarily, by or to any
person or entity other than Lessee; provided, however, that an Option may be
exercised by or assigned to any Lessee Affiliate as defined in paragraph 12.2 of
this Lease. The Options, if any, herein granted to Lessee are not assignable
separate and apart from this Lease, nor may any Option be separated from this
Lease in any manner, either by reservation or otherwise.
39.3 Multiple Options. In the event that Lessee has any multiple options
to extend or renew this Lease a later option cannot be exercised unless the
prior option to extend or renew this Lease has been so exercised.
39.4 Effect of Default on Options.
(a) Lessee shall have no right to exercise an Option, notwithstanding
any provision in the grant of Option to the contrary, (i) during the time
commencing from the date Lessor gives to Lessee a notice of default pursuant to
paragraph 13.1(c) or 13.1(d) and continuing until the noncompliance alleged in
said notice of default is cured, or (ii) during the period of time commencing
on the day after a monetary obligation to Lessor is due from Lessee and unpaid
(without any necessity for notice thereof to Lessee) and continuing until the
obligation is paid, or (iii) in the event that Lessor has given to Lessee three
or more notices of default under paragraph 13.1(c), or paragraph 13.1(d),
whether or not the defaults are cured, during the 12 month period of time
immediately prior to the time that Lessee attempts to exercise the subject
Option, (iv) if Lessee has committed any non-curable breach, including without
limitation those described in paragraph 13.1(b), or is otherwise in default of
any of the terms, covenants or conditions of this Lease.
(b) The period of time within which an Option may be exercised shall
not be extended or enlarged by reason of Lessee's inability to exercise an
Option because of the provisions of paragraph 39.4(a).
(c) All rights of Lessee under the provisions of an Option shall
terminate and be of no further force or effect, notwithstanding Lessee's due
and timely exercise of the Option. If, after such exercise and during the term
of this Lease, (i) Lessee fails to pay to Lessor a monetary obligation of
Lessee for a period of thirty (30) days after such obligation becomes due
(without any necessity of Lessor to give notice thereof to Lessee), or (ii)
Lessee fails to commence to cure a default specified in paragraph 13.1(d)
within thirty (30) days after the date that Lessor gives notice to Lessee of
such default and/or Lessee fails thereafter to diligently prosecute said cure
to completion, or (iii) Lessor gives to Lessee three or more notices of default
under paragraph 13.1(c), or paragraph 13.1(d), whether or not the defaults are
cured, or (iv) if Lessee has committed any non-curable breach, including
without limitation those described in paragraph 13.1(b), or is otherwise in
default of any of the terms, covenants and conditions of this Lease.
40. Security Measures -- Lessor's Reservations.
40.1 Lessee hereby acknowledges that Lessor shall have no obligation
whatsoever to provide guard service or other security measures for the benefit
of the Premises or the Office Building Project. Lessee assumes all
responsibility for the protection of Lessee, its agents, and invitees, and the
property of Lessee and of Lessee's agents and invitees from acts of third
parties. Nothing herein contained shall prevent Lessor, at Lessor's sole
option, from providing security protection for the Office Building Project or
any part thereof, in which event the cost thereof shall be included within the
definition of Operating Expenses, as set forth in paragraph 4.2(b) See
Paragraph 40.1 (continued) of Addendum
40.2 Lessor shall have the following rights:
(a) To change the name, address or title of the Office Building
Project or building in which the Premises are located upon not less than 90
days prior written notice;
(b) To, at Lessee's expense, provide and install Building standard
graphics on the door of the Premises and such portions of the Common Areas as
Lessor shall reasonably deem appropriate;
(c) To permit any lessee the exclusive right to conduct any business
as long as such exclusive does not conflict with any rights expressly given
herein;
(d) To place such signs, notices or displays as Lessor reasonably
deems necessary or advisable upon the roof, exterior of the buildings or the
Office Building Project or on pole signs in the Common Areas;
40.3 Lessee shall not:
(a) Use a representation (photographic or otherwise) of the Building
or the Office Building Project or their name(s) in connection with Lessee's
business;
(b) Suffer or permit anyone, except in emergency, to go upon the roof
of the Building;
41. Easements.
41.1 Lessor reserves to itself the right, from time to time, to grant such
easements, rights and dedications that Lessor deems necessary or desirable, and
to cause the recordation of Parcel Maps and restrictions, so long as such
easements, rights, dedications, Maps and restrictions do not unreasonably
interfere with the use of the Premises by Lessee. Lessee shall sign any of the
aforementioned documents upon request of Lessor and failure to do so shall
constitute a material default of this Lease without the need for further notice
to Lessee.
41.2 The obstruction of Lessee's view, air, or light by any structure
erected in the vicinity of the Building, whether by Lessor or third parties,
shall in no way affect this Lease or impose any liability upon Lessor.
42. Performance Under Protest. If at any time a dispute shall arise as to any
amount or sum of money to be paid by one party to the other under the
provisions hereof, the party against whom the obligation to pay the money is
asserted shall have the right to make payment "under protest" and such payment
shall not be regarded as a voluntary payment, and there shall survive the right
on the part of said party to institute suit for recovery of such sum. If it
shall be adjudged that there was no legal obligation on the part of said party
to pay such sum or any part thereof, said party shall be entitled to recover
such sum or so much thereof as it was not legally required to pay under the
provisions of this Lease.
23
43. Authority. If Lessee is a corporation, trust, or general or limited
partnership, Lessee, and each individual executing this Lease on behalf of such
entity represent and warrant that such individual is duly authorized to execute
and deliver this Lease on behalf of said entity. If Lessee is a corporation,
trust or partnership, Lessee shall, within thirty (30) days after execution of
this Lease, deliver to Lessor evidence of such authority satisfactory to Lessor.
44. Conflict. Any conflict between the printed provisions, Exhibits or Addenda
of this Lease and the typewritten or handwritten provisions, if any, shall be
controlled by the typewritten or handwritten provisions.
45. No Offer. Preparation of this Lease by Lessor or Lessor's agent and
submission of same to the Lessee shall not be deemed an offer to Lessee to
lease. This Lease shall become binding upon Lessor and Lessee only when fully
executed by both parties.
46. Lender Modification. Lessee agrees to make such reasonable modifications
to this Lease as may be reasonably required by an institutional lender in
connection with the obtaining of normal financing or refinancing of the Office
Building Project.
47. Multiple Parties. If more than one person or entity is named as either
Lessor or Lessee herein, except as otherwise provided herein, the obligations
of the Lessor or Lessee herein shall be the joint and several responsibility of
all persons or entities named herein as such Lessor or Lessee, respectively.
4.9 Attachments. Attached hereto are the following documents which constitute
a part of this Lease: Addendum containing the following paragraphs:
1.5 (continued). 52.
1.6 (continued). 53.
1.10 (continued). 54.
2.4 (continued). Rider No. 1
4.2(a) (continued). and Exhibits "A" through "E"
4.2(d)(x).
4.2(f) (continued).
4.2(g) (continued).
6.1 (continued).
6.2(b) (continued).
7.1 (continued).
7.2(c).
8.1(b).
8.7 (continued).
8.8 (continued).
9.4(a) (continued).
11.1 (continued).
11.3 (continued).
11.4 (continued).
12.4(f).
12.7
23 (continued).
25 (continued).
30(a) (continued).
34 (continued).
40.1 (continued).
50.
51.
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN AND BY EXECUTION OF THIS LEASE, SHOW THEIR INFORMED
AND VOLUNTARY CONSENT THERETO, THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS
LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND
EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.
IF THIS LEASE HAS BEEN FILED IN IT HAS BEEN PREPARED FOR SUBMISSION TO YOUR
ATTORNEY FOR HIS APPROVAL. NO REPRESENTATION OR RECOMMENDATION IS MADE BY
THE AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION OR BY THE REAL ESTATE
BROKER OR ITS AGENTS OR EMPLOYEES AS TO THE LEGAL SUFFICIENCY, LEGAL
EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION RELATING
THERETO; THE PARTIES SHALL RELY SOLELY UPON THE ADVICE OF THEIR OWN LEGAL
COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE.
Mission West Properties, Computervision, a Delaware corporation
a California corporation
COMPUTERVISION CORPORATION
--------------------------------------- --------------------------------------------
By /s/ ▇▇▇▇▇ ▇▇▇▇▇ By /s/ ▇▇▇▇▇▇▇ ▇. FIOKA JR.
------------------------------------- -----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. Fioka Jr.
Its Vice President Its Vice President, General Counsel
---------------------------------- -------------------------------------
By
------------------------------------- By -----------------------------------------
Its Its
---------------------------------- ----------------------------------------
Executed at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Executed at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ --------------------------------
---------------------------
on 10/14/96 on 10 October 1996
------------------------------------- ------------------------------------------
24
ADDENDUM TO STANDARD OFFICE LEASE - GROSS
1.5(continued): Definition of Commencement Date. The Commencement Date
of this Lease as defined in Paragraph 1.5 of the Lease is January 1, 1997. In
the event the tenant improvements are not completed by January 1, 1997, the
Commencement Date is defined as the earlier of the dates (i) Lessee initially
occupies the Premises, or (ii) the general contractor supervising the tenant
improvements receives a final approval from the building inspector that the
tenant improvements for the Premises are complete.
1.6(continued). The monthly Base Rent for the seventy-eight (78) month
term of the Lease will be as follows:
Months 1-12 $1.31 per rentable square foot
Months 13-24 $1.36 per rentable square foot
Months 25-36 $1.41 per rentable square foot
Months 37-48 $1.47 per rentable square foot
Months 49-60 $1.52 per rentable square foot
Months 61-72 $1.58 per rentable square foot
Months 73-78 $1.64 per rentable square foot
Lessee shall be responsible for its use of electricity to the Premises.
1.10(continued). Lessee's proportionate share of the Office Building
operating expense increase as defined in paragraph 1.10 (65.53%) is derived from
dividing the rentable square footage of the Premises (29,550) by the total
rentable square footage of the Office Building (45,097).
2.4(continued). In the event Lessor desires to modify or change the
decor of the Common Areas such changes shall be consistent with the current
environment and image of the Common Areas and the Office Building. Lessor shall
use its best efforts not to interfere with Lessee's use or right to the quiet
enjoyment of the Premises during any modifications or changes in the Common
Areas.
4.2(a)(continued). Lessee's share of the Base Year Operating Expenses
and any Operating Expense Increase shall be based on a building being
ninety-five percent (95%) occupied and fully assessed for real estate taxes.
4.2(d)(x). The costs of any capital improvements made to the Office
Building or the parking facilities appurtenant to the Office Building which are
incurred by Lessor to reduce the Operating Expenses of the Office Building. In
no event shall Lessee's proportionate share of the costs of the capital
improvements to be paid by Lessee under this article exceed the proportionate
share of the reduction in the Operating Expenses that resulted from the capital
improvements.
4.2(f)(continued): Exclusions from Operating Costs. The following
additional items shall be excluded from the Operating Expenses;
(i) the initial cost of any construction of the Office Building Project
or any part thereof;
(ii) salary, fringe benefits and payroll taxes for off-site, executive
or managerial personnel;
(iii) broker fees and commissions for the sale or leasing of space in
the Office Building Project;
(iv) the cost of performing additions, alterations, improvements or
individual services for other tenants or vacant space;
(v) any payments required in connection with any debt or ground lease
encumbering the Office Building Project;
Page 1 of 6
25
(vi) no contingency, reserve or sinking funds that are not used for the
future maintenance of the Common Areas of the Office Building Project;
(vii) costs and provisions against other tenants in the Office Building
Project;
(viii) expenses resulting form a violation by Lessor of the terms of any
lease of space in the Office Building Project or of any ground lease or mortgage
to which this Lease is subordinate;
(ix) the repair of any part of the Common Area that was inadequately
designed or defectively constructed, and;
(x) all costs associated with the removal and cleanup of hazardous
wastes and toxic substances.
The amount of any charges for any services provided by affiliates, related or
designated parties of Lessor which are included in the Operating Expenses shall
be reasonable, customary and competitive with charges for similar services of
independent contractors in the area where the Office Building Project is
located.
4.2(g)(continued). Lessee shall have the right to audit Lessor's books
with respect to Operating Expenses and shall recover audit expenses in the event
Lessor shall have overcharged by an amount exceeding five percent (5%) of the
total amount of Lessee's share of the Operating Expenses for the Operating
Expense year that is being audited.
6.1(continued). Lessor shall not lease to a governmental agency that
would require above normal public access use of the Office Building. However,
Lessor shall retain its right to lease to a governmental agency that uses the
Office Building for non-public access use such as administrative offices.
6.2(b)(continued). Lessee's obligation to comply with all applicable
statutes, ordinances, rules, regulations, orders, covenants and restrictions of
record should not require Lessee to make any structural improvements to the
Office Building or Common Areas.
7.1(continued). In the event Lessor does not make repairs as provided in
this lease within a reasonable time, Lessee shall not lose the benefit of any
statute now or hereafter in effect which would allow Lessee to make the repairs
at Lessor's expense.
7.2(c). Lessee shall remove any and all improvements made by Lessee
after the Commencement Date of this Lease if requested by Lessor in writing
ninety (90) days prior to the termination date of this Lease.
8.1(b). Increases in Insurance. Not more frequently than each three
years, if, in the opinion of Lessor's lender or of an insurance broker retained
by Lessor, the amount of public liability insurance coverage at that time is not
adequate, Lessee shall increase the insurance coverage as required by either
Lessor's lender or Lessor's insurance broker within ten (10) days after receipt
of Lessor's written. request that Lessee do so.
8.7(continued). Unless such damage or injury was caused by the gross
negligence or willful misconduct of Lessee, Lessor shall indemnify and hold
harmless Lessee from and against any and all claims for damage to the person or
property of anyone or any entity arising from any activity, work or things done,
permitted or suffered by Lessor in or about the Office Building Project, or
elsewhere and shall further indemnify and hold harmless Lessee from and against
any and all claims, costs and expenses arising from any act or omission of
Lessor, or any of Lessor's agents, contractors, employees, or invitees, and from
and against all costs, attorney's fees, expenses and liabilities incurred by
Lessee as the result of any such use, conduct, activity, work, things done,
permitted or suffered, breach, default or negligence, and in dealing reasonably
therewith, including but not limited to the defense or pursuit of any claim or
any action or proceeding involved therein; and in case any action or proceeding
be brought against Lessee by reason of any such matter, Lessor upon such notice
from Lessee shall defend the same at Lessor's expense by counsel reasonably
satisfactory to Lessee and Lessee shall reasonably cooperate with Lessor in such
defense.
Page 2 of 6
26
Lessee need not have first paid any such claim in order to be so indemnified.
Lessor, as a material part of the consideration to Lessee, hereby assumes all
risk of damage to property of Lessor or injury to persons, in, upon or about the
Office Building Project arising from any cause and Lessor hereby waives all
claims in respect thereof against Lessee.
8.8(continued). Unless such damage or injury was caused by the gross
negligence or willful misconduct of Lessee, Lessor hereby agrees that Lessee
shall not be liable for loss or damage to the goods, wares, merchandise or other
property of Lessor, Lessor's employees, invitees, customers, or any other person
in or about the Office Building Project, nor shall Lessee be liable for injury
to the person of Lessor, Lessor's employees agents or contractors, whether such
damage or injury is caused by or results from theft, fire, steam, electricity,
gas, water, or rain, or from the breakage, leakage, obstruction or other defects
of pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting
fixtures, or from any other cause, whether said damage or injury results from
conditions arising upon the Premises or upon other portions of the Office
Building Project, or of the equipment, fixtures or appurtenances applicable
thereto, and damage arising from any act or neglect of any other lessee,
occupant, or user of the Office Building Project.
9.4.(a)(continued). Lessor's election to terminate this lease as
provided in this paragraph shall Occur if Lessor terminates the leases of the
other tenants in the Office Building which are adjacent to Lessee's Premises.
11.1(continued). Lessor's utility charges for heating, ventilation, and
air conditioning shall not exceed the charge which Lessee would pay if the
Lessee were to purchase such utility charges directly from the applicable
public utility company servicing the Office Building.
11.3(continued). In the event Lessee activates a heating, ventilating
and air conditioning heat pump in the Premises after normal business hours as
such hours are reasonably established by Lessor (presently 7:00 a.m. to 7:00
p.m. Monday through Friday except holidays and 7:00 a.m. to 12:00 noon
Saturdays), an amount equal to $12.00 per hour per heat pump activated shall be
charged. The hourly charge may be reasonably increased by Lessor from time to
time to reflect its costs, but in no case may the charge be increased more
frequently than once a year.
11.4(continued). Any additional power required by Lessee in excess of
the standard office power usage shall be mutually agreed to by Lessor and
Lessee. Any and all costs associated with adding power to the building or
Lessee's Premises, as required by Lessee, shall be at the sole cost and expense
of Lessee.
12.4(f). With respect to any sublease entered into by Lessee with
Lessor's consent as herein provided, if the rent paid by the subtenant to Lessee
for each square foot leased by such subtenant exceeds the rent being paid by
Lessee to Lessor for each such square foot, then Lessor shall be entitled to 75%
of such excess rent net of any normal costs to sublease the Premises (i.e., the
amount of which the rent under such sublease exceeds the rent under this Lease
for each square foot leased by such subtenant); and Lessee shall pay Lessor's
said percentage share of such excess with respect to rent payable under the
sublease to Lessor within ten (10) days after receipt by Lessee of the same.
12.7. During the Term, Lessee shall not enter into any proposed contract
for the assignment or transfer of any interest herein or for the subletting of
the Premises or any part thereof unless it first delivers to Lessor a written
offer of assignment or transfer or of subletting (as the case may be) at the
same price and upon the same terms as are contained in said proposed contract.
If Lessor delivers to Lessee written unequivocal acceptance of said offer within
ten (10) days after delivery thereof to Lessor, Lessee and Lessor shall
consummate the proposed transaction at the price and upon the terms set forth in
said offer. If Lessor fails to deliver to Lessee such writing within ten (10)
days after delivery to Lessor of the aforesaid offer, Lessee may then enter into
and consummate said proposed contract at the price and upon the terms' contained
therein, subject, however, to Lessee's obligation to obtain the prior written
consent thereto of Lessor pursuant to this paragraph.
Page 3 of 6
27
23(continued). All notices shall be sent to:
Computervision Corporation
Attention Corporate Real Estate
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇-▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
25(continued). Upon expiration or earlier termination of this Lease,
Lessee, without necessity of any demand, shall execute and deliver to Lessor, a
quitclaim deed in recordable form and acceptable to Lessor, declaring that its
purpose is to extinguish all right, title and interest of Lessee under this
Lease.
30.(a)(continued). Lessor covenants and represents that it has good and
marketable title to the Premises, free and clear of all ground leases, liens and
mortgages or deeds of trust affecting Lessee's possession of the Premises,
Lessee's use of the Premises, or the rights granted to Lessee hereunder, except
a mortgage/deed of trust dated the 13th day of August, 1990 and amended the 27th
day of September, 1993, and further amended the 13th day of September 1995, from
Landlord, as mortgagor, and Union Bank, as mortgagee/beneficiary of deed of
trust.
34.(continued). Lessor and Lessee shall mutually agree upon monument
signage which shall be subject to all City of San Diego signage guidelines. The
cost of all signage shall be at the sole cost and expense of Lessee.
40.1(continued). The Office Building Project has a twenty-four (24)
hour, seven (7) day per week, card key access system to tile front lobby doors
of the building.
50. Lessee agrees to abide by and to conform to the rules, regulations,
and restrictions as outlined in Exhibit "C" of this Lease.
51. Nondisturbance Clause. If the holder of any mortgage, indenture,
deed of trust or other similar instrument succeeds to Lessor's interest in the
Premises, Lessee will pay to it all rents subsequently payable under this Lease.
Lessee will, upon request of first mortgagee, automatically become the tenant
of, and attorn to, the first mortgagee, without change in this Lease. Within
twenty (20) days of receipt of notice from first mortgagee, Lessee will execute,
acknowledge and deliver documents confirming the attornment. The document of
attornment will also provide that the successor will not disturb Lessee in its
use of the Premises in accordance with this Lease.
52. Lessor shall agree to a tenant improvement allowance for building
standard tenant improvements based upon a mutually agreeable building floor
plan. Lessor shall provide to Lessee, Lessor's written acceptance of Lessee's
tenant improvement floor plan prior to the commencement of the construction of
the tenant improvements. The tenant improvement allowance shall consist of the
Lessor contributing up to $22.00 per useable square foot (17,689 usf) on the
shell space and up to $10.00 per useable square foot (8,587 usf) on the
currently improved space. Any and all costs and fees related to architectural
drawings and City of San Diego Permits shall be included in the tenant
improvement allowance. Building standard improvements specifically exclude
systems furniture, phones, data communication lines, trunk lines, or fixtures
which are related to Lessee's business. In the event Lessee desires Lessor to
install building standard tenant improvements in excess of $22.00 per useable
square foot on the shell space or $10.00 per useable square foot on the
currently improved space, Lessee shall pay to Lessor, prior to commencement of
construction of the tenant improvements fifty percent (50%) of any and all costs
in excess of the tenant improvement allowance. Lessee shall pay the remaining
fifty percent (50%) upon the commencement date of this lease.
Any and all change orders shall be approved by Lessor and Lessee. The cost of
any changes orders requested by Lessee that shall increase the cost of the
tenant improvements shall be paid for by Lessee; fifty percent (50%) upon the
execution of the change order by Lessee, and the remaining fifty percent (50%)
upon the commencement date of the Lease.
Page 4 of 6
28
53. Hazardous Materials and Air Pollution Control. Upon execution of
this Lease, Lessee shall complete and submit to Lessor a County of San Diego
Hazardous Materials Questionnaire and a San Diego Air Pollution Control District
Air Pollution Control Questionnaire in the forms attached hereto as Exhibits D
and E. Lessee shall be responsible for all costs incurred, and any delay in
occupancy which may occur as a result of processing the applications or of
complying with the requirements relating to these questionnaires which arise as
a result of Lessee's actual or intended use of the Premises. Lessor shall
reasonably cooperate with Lessee to avoid or minimize such costs or delay in
occupancy, provided such cooperation can be given without Lessor incurring any
cost or obligation. If required by the County of San Diego, Lessee shall keep
the two Questionnaires updated and current at all times during the term of this
Lease.
54. Hazardous Materials. Lessee shall be entitled to use and store
everyday business products which may somehow qualify as hazardous substances,
subject to Lessee's obligation to comply with any and all laws regarding their
use. Lessee hereby makes the following covenants regarding hazardous materials:
(a) Lessee shall at all times and in all respects comply with all
federal, state and local laws, ordinances and regulations, including, but not
limited to, the Federal Water Pollution Control Act (33 U.S.C. Section 1251, et
seq.), Resource Conservation & Recovery Act (42 U.S.C. Section 6901, et seq.),
Safe Drinking Water Act (42 ▇.▇.▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, et seq.), Toxic Substance
Control Act 15 U.S.C. Section 2601, et seq.), the Clean Air Act (42 U.S.C.
Section 7401 et seq.), Comprehensive Environmental Response of Compensation and
Liability Act (42 U.S.C. Section 9601, et seq.), California Health & Safety Code
(Section 25100, et seq.; Section 39000, et seq.), California Safe Drinking Water
& Toxic Enforcement Act of 1986 (California Health & Safety Code Section
25249.5, et seq.), California Water Code (Section 13000, et seq.), and other
comparable state laws ("Hazardous Materials Laws"), relating to industrial
hygiene, environmental protection or the use, analysis, generation, manufacture,
storage, disposal or transportation of any oil, flammable explosives, asbestos,
urea formaldehyde, radioactive materials or waste, or other hazardous, toxic,
contaminated or polluting materials, substances or wastes, including, without
limitation, any "hazardous substances," "hazardous wastes," "hazardous
materials" or "toxic substances" under any such laws, ordinances or regulations
(collectively, "Hazardous Materials")
(b) Lessee shall, at its own expense, procure, maintain in effect
and comply with all conditions of any and all permits, licenses, and other
governmental and regulatory approvals required for Lessee's use of the Premises,
including, without limitation, discharge of (appropriately treated) materials or
wastes into or through any sanitary sewer serving the Premises. Except as
discharged into the sanitary sewer in strict accordance and conformity with all
applicable Hazardous Materials Laws, Lessee shall cause any and all Hazardous
Materials removed from the Premises to be removed and transported solely by duly
licensed haulers to duly licensed facilities for final disposal of such material
and wastes. Lessee shall in all respects handle, treat, deal with and manage any
and all Hazardous Materials in, on, under or about the Premises in total
conformity with all applicable Hazardous Material Laws and prudent industry
practices regarding management of such Hazardous Materials. Upon expiration or
earlier termination of the lease term, Lessee shall cause all Hazardous
Materials to be removed from the Premises and transported for use, storage or
disposal in accordance with and compliance with all applicable Hazardous
Materials Laws. Lessee shall not take any remedial action in response to the
presence of any Hazardous Materials in or about the Premises or any building,
nor enter into any settlement agreement, consent decree or other compromise in
respect to any claims relating to any Hazardous Materials in any way connected
with the Premises or any building, without first notifying Lessor of Lessee's
intention to do so and affording Lessor ample opportunity to appear, intervene
or otherwise appropriately assert and protect Lessor's interest with respect
thereto.
(c) Lessee still immediately notify Lessor in writing of: (i) any
enforcement, cleanup, removal or other governmental or regulatory action
instituted, completed or threatened pursuant to any Hazardous Material Laws;
(ii) any claim made or threatened by any person against Lessee, the Premises or
any building related to damage, contribution, cost, recovery, compensation, loss
or injury resulting from or claimed to result from any Hazardous Materials, and
(iii) any reports made to any environmental agency arising out of or in
connection with any Hazardous Materials in or removed from the
Page 5 of 6
29
Premises or any building, including any complaints, notices, warnings or
asserted violations in connection therewith. Lessee shall also supply to Lessor
as promptly as possible, and in any event within (5) business days after Lessee
first receives or sends the same with copies of all claims, reports, complaints,
notices, warnings or asserted violations, relating in any way to the Premises,
any building or Lessee's use thereof. Lessee shall promptly deliver to Lessor
copies of hazardous waste manifests reflecting the legal and proper disposal of
all Hazardous Materials removed from the Premises.
(d) Lessor represents and warrants that to the best of Lessor's
knowledge there are currently no environmental conditions on, in or affecting
the Property and/or the Building which violate any federal, state, or local law.
Lessor represents and warrants that it shall hold harmless and indemnify and
defend Lessee, except due to Lessee's own act, fault, or negligence, from all
liabilities, damages, claims or costs of any kind or nature (including
reasonable attorney's fees) resulting or arising from the presence of suspected
hazardous or toxic wastes, substances or emissions in the Building and/or on the
Property.
Page 6 of 6
30
RIDER NO. 1
Option to Extend the Lease.
1. Extension. Subject to Paragraph 39 of the Lease Agreement, Lessee at
Lessee's option may extend the term of this lease for one (1) additional five
(5) year term(s). The rent for the extension term shall be at the then fair
market rent.
2. Calculation of Fair Market Rent. The "fair market rent of the
Premises" shall mean the average rent being paid by tenants for space of a
quality similar to that of the Premises and other comparable buildings in the
area at the time the renewal term commences as determined by mutual agreement of
Lessor and Lessee. If Lessor and Lessee are unable to agree on the fair market
rent, the fair market rent of the Premises shall be determined by an appraiser
("the Appraiser") selected as provided in this paragraph. The Appraiser must be
a member of the American Institute of Real Estate Appraisers (MAI). The
Appraiser will be selected as follows: Lessor and Lessee will, within 15 days
following Lessee's exercise of its option of renewal, each select an MAI
appraiser and notify the other party in writing of its selection; and such two
MAI appraisers will within 30 days following their selection by the parties,
jointly select a third MAI appraiser as the Appraiser who will be instructed by
Lessor and Lessee to determine in writing, within 30 days, the fair market rent
of the Premises. Once the Appraiser has determined the fair market rent of the
Premises, such determination will be binding upon Lessor and Lessee.
3. Appraiser Fees. Each party will pay the fees of the MAI appraiser
which it has selected; the fees of the Appraiser will be borne equally by the
parties.
4. Notice Provision. Lessee shall give written notice of its exercise of
its option of renewal no later than six (6) months prior to the expiration of
the initial term of this Lease. In the event Lessee does not exercise its option
to extend the lease, and does not notify Lessor per the terms of this provision,
then Lessee's option to extend this lease shall expire.
This Lease Rider is attached to and forms a part of that Office Lease, dated
August 29, 1996, by and between Mission West Properties, a California
corporation ("Lessor") Computervision, a Delaware corporation ("Lessee"). To the
extent that the provisions of this Lease Rider are in conflict with the terms
and provisions of this Lease, the terms and provisions of this Lease Rider shall
govern and prevail.
31
EXHIBIT C
SCHEDULE OF RENT PAYMENTS
Anything set forth in Section 9 of the Sublease Agreement to the contrary
notwithstanding, commencing on the Commencement Date, Sublessee shall make
monthly rental payments to Sublessor in accordance with the following schedule:
Period Rent/SF Square Feet # Months Monthly Fixed Rent Total Fixed Rent
------ ------- ----------- -------- ------------------ ----------------
5/98-9/98 $1.25 15,000 5 $18,750.00 $ 93,750.00
10/98-12/98 $1.25 20,000 3 $25,000.00 $ 75,000.00
1/99-4/99 $1.25 23,575 4 $29,468.75 $117,875.00
5/99-4/00 $1.30 23,575 12 $30,647.50 $367,770.00
5/00-4/01 $1.35 23,575 12 $31,826.25 $381,915.00
5/01-4/02 $1.40 23,575 12 $33,005.00 $396,060.00
5/02-4/03 $1.45 23,575 12 $34,183.75 $410,205.00
5/03-6/19/2003 $1.50 23,575 1.66 $35,362.50 $ 58,701.75
-----------
TOTALS $1,901,276.75
