1
EXHIBIT 10.7
LEASE AGREEMENT
1. Parties. This Lease, is made by and between SBC&D Co., Inc., a
California corporation or nominee ('landlord"), and Arbor Software
Corporation, a California corporation ("Tenant:").
2. Premises. Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord, upon the terms and conditions hereinafter set forth,
those certain premises (the "Premises") Situated in the City of
Sunnyvale, County of Santa Xxxxx, State of California, shall be deemed
to be approximately ninety eight thousand eight hundred thirty six
(98,836) square feet of floor space in the building (the "Building"),
and the land as described on Exhibit "A" and known as 0000 Xxxxxxxxx
Xxxxxx. Landlord shall not be required to make any alterations,
additions or improvements to the Premises and the Premises shall be
leased to Tenant in an "As is" condition.
Tenant and its representatives, have, prior to executing this Lease,
made such inspections of the Premises and matters related thereto as
Tenant and its representatives desire, including, without limitation,
governmental laws and regulations to which the Premises is subject and
Tenant shall accept the Premises upon the basis of its review and
determination of the applicability and effect of such laws and
regulations. Tenant further acknowledges and agrees that, the Premises
is to be leased and delivered to and accepted by Tenant in an "As Is"
condition as of the Commencement Date with all faults and defects and
without any covenant (whether express, implied or otherwise) made by
Landlord to remedy any then existing fault or defect, whether known or
unknown, suspected or unsuspected subject to the condition set forth
in Paragraph 40 below. Tenant still further acknowledges that Tenant
has received, has reviewed and is knowledgeable of the disclosures and
information contained in the environmental assessments, investigations
and reports listed in Exhibit "B" attached hereto. Landlord makes no
representation or warranty as to the accuracy or completeness of the
disclosures or information contained in said engineering and
environmental assessments and reports. Landlord does not make any
representations or warranties of any kind whatsoever, either express
or implied, with respect to the Premises or any of such related
matters; in particular, but without limitation, Landlord makes no
representation or warranties with respect to the use, condition, size,
dimensions, boundaries, title, occupation, management or value of the
Premises or the building and improvements thereon, presence or absence
of hazardous materials in, on, under or about the Premises or
surrounding properties, compliance with applicable statutes, laws,
codes, ordinances, regulations or requirements relating to leasing,
zoning, subdivision, planning, building, fire, safety, health or
environmental matters, compliance with covenants, conditions and
restrictions (whether or not of record), other local, municipal,
regional, state or federal requirements, or other statutes, laws,
codes, ordinances, regulations or requirements (including, without
limitation, The Americans With Disabilities Act). Tenant acknowledges
that it Is entering into this Agreement on the basis of Tenant's own
investigation of the physical and environmental conditions of the
Premises. Tenant waives and releases its right to recover from
Landlord and its partners, employees and agents any and all damages,
losses, liabilities, costs or expenses whatsoever (including, without
limitation, reasonable attorneys' fees and costs), and claims
therefor, whether direct or indirect, known or unknown, foreseen or
unforeseen, which may arise on account of or in any way growing out of
or connected with the physical condition of the Premises or any
federal, state or local law, statute, ordinance or regulation
applicable thereto (including, without limitation, the Comprehensive
Environmental Response Compensation and Liability Act of 1980, as
amended, 42 U.S.C. Sections 9601 et seq. and The Resources
Conservation and Recovery Act of 1976,42 U.S.C. Sections 6901 et seq.
Tenant expressly waives the benefits of Section 1542 of the
1
2
California Civil Code, which provides as follows:
A general release does not extend to claims which the creditor
does not know or expect to exist in his favor at the time of
executing the release, which if known to him must have
materially affected the settlement with the debtor.
Tenant acknowledges that, notwithstanding any prior or contemporaneous
oral or written representations, statements, documents or
understandings, this Lease constitutes the entire understanding of the
parties with respect to the subject matter hereof and supersedes any
such prior or contemporaneous oral or written representations,
statements, documents or understandings.
As a material consideration for this Lease, Tenant agrees to make
certain improvements to the Premises. These improvements shall include
retrofit of the existing building exterior shell and interior
Improvements ("Tenant Improvements"). Tenant agrees that it will spend
a minimum of Three Million Dollars ($3,000,000.00) on these
improvements (Tenant Improvement Costs'). Landlord shall reimburse
Tenant a total of Seven Hundred Thousand Dollars ($700,000.00) of the
total Improvement dollars within twenty (20) days of completion to be
evidenced by a final building inspection and issuance of a Certificate
of Occupancy by the Building Department of the City of Sunnyvale.
Landlord shall remove all furniture, cubicles and office equipment
prior to commencement of demolition.
2.1 Reimbursement If No Lease Commencement. Inasmuch as Tenant
will he commencing Tenant Improvements before Commencement Date and
before Landlord has purchased the Premises, if Landlord is unable to
close escrow and take tide to the Premises, Landlord shall reimburse
Tenant for all of Tenant's expenses incurred regarding the Tenant
Improvements up to the maximum reimbursable amount of $200,000.00.
Tenant shall furnish to Landlord evidence of costs incurred with its
request for reimbursement.
3. Term. The term of this Lease ("Lease Term") shall be for six (6)
years, commencing on the earlier of (1) ninety (90) days from the date
Tenant procures a building permit from the City of Sunnyvale; (ii) the
date Tenant moves substantial furniture or, trade fixtures, or any
personnel into the Building; or (iii) December 15, 1996, (the
"Commencement Date") and ending six (6) years thereafter unless sooner
terminated or extended pursuant to any provision hereof.
Notwithstanding said scheduled Commencement Date, if for any reason
Landlord cannot deliver possession of the Premises to Tenant, Landlord
shall not be subject to any liability therefor, beyond that in
Paragraph 2.1 above.
3.1 Early Access. Tenant and/or its contractors are hereby
authorized to enter the Premises prior to the Commencement Date for
purposes of demolition and construction of Tenant Improvements, and
such early occupancy shall be upon all of the terms of this Lease
(including obligations regarding indemnity and insurance) except those
regarding the obligation to pay rent which shall commence on the
Commencement Date.
4. Rent.
2
3
A. Time of Payment. Tenant shall pay to Landlord as rent for the
Premises the sum specified in Paragraph 4.B below (the "Monthly
Installment") each month in advance on the first day of each
calendar month, without deduction or offset, prior notice or
demand, commencing on the Commencement Date and continuing
through the Lease Term, together with such additional rents as
are payable by Tenant to Landlord under the terms of this
Lease. The Monthly Installment for any period during the Lease
Term which period is less than one (1) full month shall be a
prorata portion of the Monthly Installment based upon a thirty
(30) day month.
B. Monthly Installment. The Monthly Installment of rent payable
each month during the Term shall be as follows:
Months 1-24 $ 84,011
Months 25-48 $ 93,894
Months 49-72 $103,778
C. Absolute Rent. It is the intention of Landlord and Tenant that
(i) the rent herein specified shall be absolute to Landlord in
each month during the Lease Term, without abatement,
deduction, offset, cost or expenses, and (ii) all costs,
expenses and obligations of every kind relating to the
Premises shall be paid by Tenant.
D. Late Charge. Tenant acknowledges that late payment by Tenant
to Landlord of rent and other sums due hereunder will cause
Landlord to incur costs not contemplated by this Lease, the
exact amount of which will be extremely difficult to
ascertain. Such costs include, but are not limited to,
processing and accounting charges, and late charges which may
be imposed on Landlord by the terms of any mortgage or deed of
trust covering the Premises. Accordingly, if any installment
of rent or any other sum due from Tenant shall not be received
by Landlord within ten (10) days after such amount shall be
due, Tenant shall pay to Landlord, as additional rent, a late
charge equal to six percent (6%) of such overdue amount. The
parties hereby agree that such late charge represents a fair
and reasonable estimate of the costs Landlord will incur by
reason of late payment by Tenant. Acceptance of such late
charge by Landlord shall in no event constitute a waiver of
Tenants default with respect to such overdue amount, nor
prevent Landlord from exercising any of its other rights and
remedies granted hereunder.
E. Additional Rent. All taxes, insurance premiums, late charges,
costs and expenses which Tenant is required to pay thereunder,
together with all interest and penalties that may accrue
thereon in the event of Tenant's failure to pay such amounts,
and all reasonable damages, costs and attorneys' fees and
expenses which Landlord may incur by reason of any default of
Tenant or failure on Tenant's part comply with the terms of
this Lease, shall be deemed to be additional rent ("Additional
Rent") and shall be paid in addition to the Monthly
Installment of rent, and, in the event of nonpayment of the
Monthly Installment of rent.
F. Place of Payment. Rent shall be payable in lawful money of the
United States of America to Landlord at 000 Xxxxxxxx Xxxxxx,
Xxxxxxxx XX, or to such other person (s) or at such other
place (s) as Landlord may designate in writing.
G. Advance Payment. Concurrently with the execution of this Lease,
Tenant shall pay to
3
4
Landlord the sum of Eighty-Four Thousand and Eleven Dollars
($84,011) to be applied to the Monthly Installment of rent
first accruing under this Lease
5. Security Deposit. Tenant shall deposit the sum of eighty-four
Thousand Eleven Dollars ($84,011.00) (the "Security Deposit") upon
execution of this Lease, to secure the faithful performance by Tenant
of each term, covenant and condition of this Lease. If Tenant shall at
any time fail to make any payment or fail to keep or perform any term,
covenant or condition on its part to be made or performed or kept
under this Lease, Landlord may, but shall not be obligated to and
without waiving or releasing Tenant from any obligation under this
Lease, use, apply or retain the whole or any part of the Security
Deposit (A) to the extent of any sum due to Landlord; (B) to make any
required payment on Tenant's behalf or (C) to compensate Landlord for
any loss, damages, attorneys' fees or expense sustained by Landlord
due to Tenant's default. In such event, Tenant shall, within five (5)
days of written demand by Landlord, remit to Landlord sufficient funds
to restore the Security Deposit to its original sum. No interest shall
accrue on the Security Deposit. Landlord shall not be required to keep
the Security Deposit separate from its general funds. Should Tenant
comply with all the terms, covenants, and conditions of this Lease and
at the end of the term of this Lease leave the Premises in the
condition required by this Lease, then said Security Deposit, less any
sums owing to Landlord, shall be returned to Tenant within thirty (30)
days after the termination of this Lease and vacancy of the Premises
by Tenant. At any time the Monthly Installment is increased pursuant
to this Lease, the Security Deposit shall be increased by the same
amount.
6. Use of Premises. Tenant shall use the Premises only in conformance
with applicable governmental laws, regulations, rules and ordinances
for the purpose of general office and manufacturing, packaging and
storage of non hazardous material products or any other related
purpose and for no other purpose without the prior written consent of
Landlord. Tenant shall indemnify, protect, defend, and hold Landlord
harmless against any loss, expense, damage, attorneys' fees or
liability arising out of the failure of Tenant to comply with any
applicable law. Tenant shall not commit or suffer to be committed, any
waste upon the Premises, or any nuisance, or other acts or things
which may disturb the quiet enjoyment of any other tenant in the
buildings adjacent to the Premises, or allow any sale by auction upon
the Premises, or allow the Premises to be used for any unlawful
purpose, or place any loads upon the floor, walls or ceiling which
endanger the structure, or place any harmful liquids in the drainage
system of the Building. No waste materials or refuse shall be dumped
upon or permitted to remain upon any part of the Premises outside of
the Building proper, except in trash containers placed inside exterior
enclosures designated for that purpose by Landlord. No materials,
supplies, equipment, finished products or semi-finished products, raw
materials or articles of any nature shall be stored upon or permitted
to remain on any portion of the Premises outside of the Building
proper. Tenant shall strictly comply with the provisions of Paragraph
39 below.
7. Taxes and Assessments.
A. Tenant's property. Tenant shall pay before delinquency any and
all taxes and assessments, license fees and public charges
levied, assessed or imposed upon or against Tenant's fixtures,
equipment, furnishings, furniture appliances and personal
property installed or located on or within the Premises.
Tenant shall cause said fixtures, equipment, furnishings,
furniture appliances and personal property to be assessed and
billed separately from the real property of Landlord. If any
of Tenant's said personal property shall be assessed with
Landlord's real property, Tenant shall pay Landlord the
4
5
taxes attributable to Tenant within ten (10) days after
receipt of a written statement from Landlord setting forth the
taxes applicable to Tenant's property.
B. Property Taxes. Tenant shall pay, as additional rent, all
Property Taxes levied or assessed with respect to the land
comprising the Parcel and with respect to all buildings and
Improvements located on the Parcel which become due or accrue
during the term of this Lease. Tenant shall pay such Property
Taxes to Landlord within twenty (20) days after receipt of
billing. Provided that Landlord bills Tenant at least thirty
(30) days prior to the delinquency date of such Property
Taxes, Tenant shall pay such Property Taxes to Landlord at
least ten (10) days prior to the delinquency date, and if
Tenant fails to do so, Tenant shall reimburse Landlord, on
demand, for all interest, late fees and penalties that the
taxing authority charges Landlord. In the event Landlord's
mortgage requires an impound for Property Taxes, then on the
first day of each month during the Lease Term, Tenant shall
pay Landlord one twelfth (1/12) of its annual share of such
Property Taxes. Tenant's liability thereunder shall be
prorated to reflect the Commencement and termination dates of
this Lease
For the purpose of this Lease, "Property Taxes" means and
includes all taxes, assessments (including, but not limited
to, assessments for public improvements or benefits), taxes
based on vehicles, utilizing parking areas, taxes based or
measured by the rent paid, payable or received under this
Lease, taxes on the value, use, or occupancy of the Premises,
the Buildings and/or the Parcel, Environmental Surcharges, and
all other governmental impositions and charges of every kind
and nature whatsoever, whether or not customary or within the
contemplation of the parties hereto and regardless of whether
the same shall be extraordinary or ordinary, general or
special, unforeseen or foreseen, or similar or dissimilar to
any of the foregoing which, at any time during the Lease Term,
shall be applicable to the Premises, the Building and/or the
Parcel or assessed, levied or imposed upon the Premises, the
Building and/or the Parcel, or become due and payable and a
lien or charge upon the Premises, the Building and/or the
Parcel, or any part thereof, under or by virtue of any present
or future laws, statutes, ordinances, regulations or other
requirements of any governmental authority whatsoever. The
term "Environmental Surcharges" shall mean and include any and
all expenses, taxes, charges or penalties imposed by the
Federal Department of Energy, the Federal Environmental
protection Agency, the Federal Clean Air Act, or any
regulations promulgated thereunder or any other local, state
or federal governmental agency or entity now or hereafter
vested with the power to impose taxes, assessments, or other
types of surcharges as a means of controlling or abating
environmental pollution or the use of energy. The term
"Property Taxes" shall not include any federal, state or local
net income, estate, or inheritance tax imposed on Landlord.
C. Other Taxes: Tenant shall, as additional rent, pay or
reimburse Landlord for any tax based upon, allocable to, or measured
by the area of the Premises or the Buildings or the Parcel; or by the
rent paid, payable or received under this Lease; any tax upon or with
respect to the possession, leasing, operation, any tax upon or with
respect to the possession, leasing, operation, management,
maintenance, alteration, repair, use or occupancy of the Premises or
any portion thereof; any privilege tax, excise tax, business and
occupation tax, gross receipts tax, sales and/or use tax, water tax,
sewer tax, employee tax, occupational license tax imposed upon
Landlord or Tenant with respect to the Premises; any tax upon this
transaction or any document to which Tenant is a party creating or
transferring an interest or an estate in the Premises.
5
6
8. Insurance.
A. Indemnity. Tenant agrees to indemnify, protect and defend
Landlord against and hold Landlord harmless from any and all
claims, causes of action, judgments, obligations or
liabilities, and all reasonable expenses incurred in
investigating or resisting the same (including reasonable
attorneys' fees), on account to, or arising out to, the
operation, maintenance, use or occupancy of the Premises and
all areas appurtenant thereto. This Lease is made on the
express understanding that Landlord shall not be liable for,
or suffer loss by reason to, injury to person or property,
from whatever cause (except for active negligence or willful
misconduct of Landlord), which in any way may be connected
with the operation, use or occupancy of the Premises
specifically including, without limitation, any liability for
injury to the person or property of Tenant, its agents,
officers, employees, licensees and invitees.
B. Liability Insurance. Tenant shall, at Tenant's expense, obtain
and keep in force during the term of this Lease a policy of
comprehensive public liability insurance insuring Landlord and Tenant
against claims and liabilities arising out of the operation, use, or
occupancy of the Premises and all areas appurtenant thereto, including
parking areas. Such insurance shall be in an amount of not less than
Two Million Dollars ($2,000,000.00) for bodily injury or death as a
result of any one occurrence and Five Hundred Thousand Dollars
($500,000.00) for damage to property as a result of any one
occurrence. The insurance shall be with companies approved by
Landlord, which approval Landlord agrees not to withhold unreasonably.
Tenant shall deliver to Landlord, prior to possession, and at least
thirty (30) days prior to the expiration thereof, a certificate of
insurance evidencing the existence of the policy required hereunder
and such certificate shall certify that the policy (1) names Landlord
as an additional insured, (2) shall not be canceled or altered without
thirty (30) days prior written notice to Landlord, (3) insures
performance of the indemnity set forth in Paragraph 8.A above, (4) the
coverage is primary and any coverage by Landlord is in excess thereto
and (5) contains a cross-liability endorsement. Landlord may maintain
a policy or policies of comprehensive general liability insurance
insuring Landlord (and such others as are designated by Landlord),
against liability for personal injury, bodily injury, death and damage
to property occurring or resulting from an occurrence in, on or about
the Premises or the Common Area, with such limits of coverage as
Landlord may from time to time determine are reasonably necessary for
its protection. The cost of any such liability insurance maintained by
Landlord shall be a Common Area Charge and Tenant shall pay, as
additional rent, its share of such cost to Landlord as provided in
Paragraph 12 below
C. Property Insurance. Landlord shall obtain and keep in force during the
term of this Lease a policy or policies of insurance covering loss or
damage to the Premises and the Building, in the amount of the full
replacement value thereof, providing protection against those perils
included within the classification of "all risk" insurance, plus a
policy of rental income insurance in the amount of one hundred percent
(100%) of twelve (12) months rent (including, without limitation, sums
payable as Additional Rent), plus, at Landlord's option, flood
insurance and earthquake insurance, and any other coverage which may
be required from time to time by Landlord's mortgagee. Tenant shall
have no interest in nor any right to the proceeds of any insurance
procured by Landlord on the Premises. Tenant shall, within twenty (20)
days after receipt of billing, pay to Landlord as additional rent, the
full cost of such insurance procured and maintained by Landlord.
Tenant acknowledges that such insurance procured by Landlord shall
contain a deductible which reduces Tenant's cost for such insurance
and, in the event of loss or damage, Tenant shall be required to pay
to Landlord the amount of such deductible. Notwithstanding the above,
Tenant shall only be responsible for the payment of Earthquake
6
7
Insurance if it is reasonable or if Landlord's lender requires it.
D. Tenant's Option to Maintain Property Insurance. Tenant shall
have the right to obtain and keep in force all of the
insurance described in Subparagraph 8.C above in lieu of
Landlord obtaining such insurance. If Tenant desires to
exercise such right to obtain such insurance, Tenant may do so
only on the renewal date of Landlord's then current insurance
policy and Tenant must exercise such right by giving Landlord
written notice of Tenant's election to obtain such insurance
not later than thirty (30) days prior to the renewal date of
Landlord's then current insurance policy. If Tenant so elects
to obtain the insurance described in Subparagraph 8.C above,
such insurance shall be provided by companies approved by
Landlord which approval shall not be unreasonably withheld.
Tenant shall deliver to Landlord, at least fifteen (15) days
prior to the expiration of Landlord's then current insurance
policy or Tenant's then current insurance policy, as the case
may be, a duplicate original of or a certificate evidencing
the policy required hereunder. Such policy and/or certificate
shall certify that the policy: (i) names Landlord and
Landlord's Lender as additional insureds; (ii) shall not be
canceled or altered without thirty (30) days prior written
notice to Landlord and to Landlord's Lender; (iii) is primary
and any coverage by Landlord is in excess thereto; and (iv)
contains a standard lender's loss payable endorsement in favor
of Landlord's Lender. If any such policy obtained by Tenant
contains a deductible, Tenant shall be responsible for the
amount of such deductible, or a portion thereof, as specified
in Subparagraph 8.C above. Any deductible must be approved by
Landlord and Landlord's Lender, which approval shall not be
unreasonably withheld. If Tenant makes the election to
maintain all of the insurance described in Subparagraph 8.C
above, Landlord shall be relived of its obligation to obtain
and maintain such insurance.
E Tenant's Insurance: Release of Landlord. Tenant acknowledges
that the insurance to be maintained by Landlord on the
Premises pursuant to Subparagraph C above will not insure any
of Tenants property. Accordingly, Tenant, at Tenant's own
expense, shall maintain in full force and effect on all of its
fixtures, equipment, leasehold improvements and personal
property in the Premises, a policy of "All Risk' coverage
insurance to the extent of at least ninety percent (90%) of
their insurable value. Tenant hereby releases Landlord, and
its partners, officers, agents employees and servants from any
and all claims, demands, losses, expenses or injuries to the
Premises or to the furnishings, fixtures, equipment, inventory
or other personal property of Tenant in, about, or upon the
Premises, which are caused by perils, events or happenings
where the same are covered by the insurance required by this
Lease or which are the subject of insurance carried by Tenant
and in force at the time of such loss.
9. Utilities. Tenant shall' pay for all water, gas, light, heat, power,
electricity, telephone, trash pickup, sewer charges and all other
services supplied to or consumed on the Premises, and all taxes and
surcharges thereon.
10. Repairs and Maintenance.
A. Tenant's Repairs. Tenant shall, during the term of
this Lease, at Tenant's sole cost and expense, keep
and maintain in good order, condition and repair the
entire Premises and every part thereof structural and
non-structural, including, without limitation, the
roof including structural roof), roofing, roof
membrane
7
8
and roof screens, gutters and down spouts,
foundation, footings, floor slab, floor coverings,
windows, window frames, plate glass, glazing,
skylights, truck doors, doors and all door hardware,
walls (exterior and interior, structural and
non-structural), partitions, sidewalks, landscaping,
irrigation systems, parking areas, driveways, paving,
fences, signs and all other areas or facilities
located outside the Building and all plumbing,
electrical, lighting, , heating, air conditioning and
ventilation facilities, equipment and Systems within
the Premises The term "repair" shall include
replacements, restorations and/or renewals when
necessary, as well as painting. Tenant's obligation
shall extend to all alterations, additions and
improvements to the Premises, and all fixtures and
appurtenances therein and thereto. Tenant shall, at
all times during the Lease Term, have in effect a
service contract for the maintenance of the heating,
ventilating and air conditioning ("HVAC") equipment
with an HVAC repair maintenance contractor approved
by Landlord which provides for periodic inspection
and servicing at least once every ninety (90) days
during the Lease Term and shall provide Landlord with
a copy of such contract. Tenant shall indemnify and
save Landlord harmless against and from all costs,
expenses liabilities, losses, injuries, damages,
suits, fines, penalties, claims and demands,
including attorneys' fees, resulting from Tenant's
failure to comply with the foregoing; and Tenant
hereby expressly releases and discharges Landlord of
and from any liability therefor.
B. No Landlord Obligations. Landlord shall have no
maintenance or repair obligations whatsoever with
respect to the Premises Tenant hereby waives the
provision of any law now or hereafter in effect
requiring that Landlord make repairs, and further
waives the provisions of any Law now or hereafter in
effect allowing Tenant to make repairs at the expense
of Landlord or to terminate this Lease because of
Landlord's failure to keep the Premises in good
order, condition and repair. Tenant specifically
waives the provisions of Subsection (1) of Section
1932 and Sections 1941 and 1942 of the Civil Code of
California Landlord shall not he liable for damage to
the goods, wares, merchandise or other property of
Tenant, Tenant's employees, invitees, customers, or
any other person in or about the Premises, whether
such damage or injury is caused by or results from
fire, steam, electricity, gas, water or rain, or from
the breakage, leakage, obstruction or other defects
of pipes, fire sprinklers, wires, appliances,
plumbing, air conditioning or lighting fixtures, or
from any other cause, whether the said damage or
injury results from conditions arising upon the
Premises or upon other portions of the building of
which the Premises are a part, or from other sources
or places and regardless of whether the cause of such
damage or injury or the means of repairing the same
is inaccessible to Tenant. Notwithstanding
Landlord's negligence or breach of this Lease,
Landlord shall, under no circumstances, be liable for
injury to Tenant's business or for any loss of income
or profit therefrom or for any consequential damages
whatsoever.
C. Tenant's Failure. Should Tenant fail to make the
repairs and maintenance required of Tenant hereunder
within ten (10) days after notice from Landlord, in
addition to all its other rights and remedies
hereunder or by law and without waiving any
alternative remedies, Landlord may make the same, and
in that event, Tenant shall reimburse Landlord as
Additional Rent for the cost of such maintenance or
repairs within five (5) days of written demand by
Landlord.
8
9
11. Alterations. Except for non-structural alterations costing
less than Twenty-Five Thousand Dollars ($25,000.00), Tenant
shall not make, or suffer to be made, any alterations,
improvements or additions in, on, about or to the Premises or
any part thereof, without the prior written consent of
Landlord. Any alterations, improvements, or additions shall be
made by licensed contractors holding valid building permits
issued by the appropriate governmental authority. Copies of
all plans and permits for any alterations, improvements or
additions shall be delivered to Landlord prior to the
commencement of work. As a condition to giving such consent,
Landlord may request that Tenant agree to remove any such
alterations, improvements or additions at the termination of
this Lease, and to restore the Premises to their prior
condition. Unless Landlord requires that Tenant remove any
such alterations, improvement or addition, any alteration,
addition or improvement to the Premises, except movable
furniture and trade fixtures not affixed to the Premises,
shall become the property of Landlord upon termination of the
Lease and shall remain upon and be surrendered with the
Premises at the termination of this Lease. Without limiting
the generality of the foregoing, all heating, lighting,
electrical (including all wiring, conduit, outlets, drops,
xxxx ducts, main and subpanels), air conditioning,
partitioning, window coverings, and carpet installations made
by Tenant regardless of how affixed to the Premises, together
with all other additions, alterations and improvements that
have become an integral part of the Building, shall be and
become the property of the Landlord upon termination of the
Lease, and shall not be deemed trade fixtures, and shall
remain upon and be surrendered with the Premises at the
termination of this Lease.
If, during the Lease Term hereof, any alteration, addition or
change of any sort to all or any portion of the Premises is
required by law, regulation, ordinance or order of any public
agency, due to Tenant's use, occupancy, or alterations, Tenant
shall promptly make the same at its sole cost and expense.
12. Acceptance of the Premises. By entry and taking possession of
the Premises pursuant to this Lease, Tenant accepts the
Premises in their condition existing as of the date of such
entry. Tenant acknowledges that neither the Landlord nor
Landlord's agents has made any representation or warranty as
to the suitability of the Premises to the conduct of Tenant's
business. Any agreements, warranties or representations not
expressly contained herein shall in no way bind either
Landlord or Tenant, and Landlord and Tenant expressly waive
all claims for damages by reason of any statement,
representation, warranty, promise or agreement, if any, not
contained in this Lease. This Lease constitutes the entire
understanding between the parties hereto and no addition to,
or modification of, any term or provision of this Lease shall
be effective until set forth in a writing signed by both
Landlord and Tenant.
13. Default.
A. Events of Default. A breach of this Lease shall exist
if any of the following events (hereinafter referred
to as "Event of Default) shall occur:
1. Default in the payment when due of any
Monthly Installment or other payment required
to be made by Tenant hereunder, where such
default shall not have been cured within five
(5) days after written notice of such default
is given to Tenant;
2. Tenant's failure to perform any other term,
covenant or condition contained in this Lease
where such failure shall have continued for
thirty (30) days after written notice of such
failure is given to Tenant; provided that
Tenant shall not
9
10
be deemed to be in default if such default is
incapable of cure within said period and
Tenant has commenced to complete the cure of
such default within said thirty (30) day
period and is proceeding diligently;
3. Tenant's vacating or abandonment of the
Premises without the payment of rent;
4. Tenant's assignment of its assets for the
benefit of its creditors:
5. The sequestration of, attachment of or
execution on, any substantial part of the
property of Tenant or on any property
essential to the conduct of Tenant's business
shall have occurred and Tenant shall have
failed to obtain a return or release of such
property within thirty (30) days thereafter,
or prior to sale pursuant to such
sequestration, attachment or levy, whichever
is earlier;
6 Tenant or any guarantor of Tenant's
obligations hereunder shall commence any
case, proceeding or other action seeking
reorganization, arrangement, adjustment,
liquidation, dissolution or composition of it
or its debts under any law relating to
bankruptcy, insolvency, reorganization or
relief of debtors, or seek appointment of a
receiver, trustee, custodian, or other
similar official for it or for all or any
substantial part of its property and such
proceeding is not terminated within sixty
(60) days;
7. Tenant or any such guarantor shall take any
corporate action to authorize any of the
actions set forth in Clause 6 above; or
8. Any case, proceeding or other action against
Tenant or any guarantor of Tenant's
obligations hereunder shall be commenced
seeking to have an order for relief entered
against it as debtor, or seeking
reorganization, arrangement, adjustment,
liquidation, dissolution or composition of it
or its debts under any law relating to
bankruptcy, insolvency, reorganization or
relief of debtors, or seeking appointment of
a receiver, trustee, custodian or other
similar official for it or for all or any
substantial part of its property, and such
case, proceeding or other action (i) results
in the entry of an order for relief against
it which is not fully stayed within seven (7)
business days after the entry thereof or (ii)
remains undismissed for a period of sixty
(60) days.
B. Remedies. Upon any Event of Default, Landlord shall
have the following remedies, in addition to all other
rights and remedies provided by law, to which
Landlord may resort cumulatively, or in the
alternative:
1. Recovery of Rent. Landlord shall be entitled
to keep this Lease in full force and effect
(whether or not Tenant shall have abandoned
the Premises) and to enforce all of its
rights and remedies under this Lease,
including the right to recover rent and other
sums as they become due, plus interest at the
Permitted Rate (as defined in Paragraph 31
below) from the due date of each installment
of rent or other sum until paid.
2. Termination. Landlord may terminate this
Lease by giving Tenant written notice of
termination. On the giving of the notice all
of Tenant's rights in the Premises and the
Building and Parcel shall terminate. Upon the
giving of the notice of
10
11
termination, Tenant shall surrender and
vacate the Premises in the condition required
by Paragraph 32, and Landlord may re-enter
and take possession of the Premises and all
the remaining improvements or property and
eject Tenant or any of Tenant's subtenants,
assignees or other person or persons claiming
any right under or through Tenant or eject
some and not others or eject none. This Lease
may also be terminated by a judgment
specifically providing for termination. Any
termination under this paragraph shall not
release Tenant from the payment of any sum
then due Landlord or from any claim for
damages or rent previously accrued or then
accruing against Tenant. In no event shall
any one or more of the following actions by
Landlord constitute a termination of this
Lease:
a. maintenance and preservation of the
Premises;
b efforts to relet the Premises;
c appointment of a receiver in order
to protect Landlord's interest
hereunder;
d consent to any subletting of the
Premises or assignment of this Lease
by Tenant, whether pursuant to
provisions hereof concerning
subletting and assignment or
otherwise; or
e. any other action by Landlord or
Landlord's agents intended to
mitigate the adverse effects from
any breach of this Lease by Tenant.
3. Damages. In the event this Lease is
terminated pursuant to Subparagraph 13.B.2
above, or otherwise, Landlord shall be
entitled to damages in the following sums:
a. the worth at the time of award of the unpaid
rent which has been earned at the time of
termination; plus
b. the worth at the time of award of the amount
by which the unpaid rent which would have
been earned after termination until the time
of award exceeds the amount of such rental
loss that Tenant proves could have been
reasonably avoided; plus
c. the worth at the time of award of the amount
by which the unpaid rent for the balance of
the term after the time of award exceeds the
amount of such rental loss that Tenant proves
could be reasonably avoided; and
d. any other amount necessary to compensate
Landlord for all detriment proximately caused
by Tenant's failure to perform Tenant's
obligations under this Lease, or which in the
ordinary course of things would be likely to
result therefrom including, without
limitation, the following: (i) expenses for
cleaning, repairing or restoring the
Premises; (ii) expenses for altering,
remodeling or otherwise improving the
Premises for the purpose of reletting,
including installation of leasehold
improvements (whether such installation be
funded by a
11
12
reduction of rent, direct payment or
allowance to the succeeding lessee, or
otherwise); (iii) real estate broker's fees,
advertising costs and other expenses of
reletting the Premises; (iv) costs of
carrying the Premises such as taxes and
insurance premiums thereon, utilities and
security precautions; (v) expenses in retaking
possession of the Premises; and (vi)
attorneys' fees and court costs.;
e. The "worth at the time of award" of the
amounts referred to in Subparagraphs (a) and
(b) of this paragraph, is computed by allowing
interest at the Permitted Rate. The worth at
the time of award" of the amounts referred to
in Subparagraph (c) of this Paragraph is
computed by discounting such amount at the
discount rate of the Federal Reserve Board of
San Francisco at the time of award plus one
percent (1%). The term "rent" as used in this
Paragraph shall include all sums required to
be paid by Tenant to Landlord pursuant to the
terms of this Lease.
14. Destruction. In the event that any portion of the Premises are
destroyed or damaged by an uninsured peril, Landlord or Tenant
may, upon written notice to the other, given within thirty
(30) days after the occurrence of such damage or destruction,
elect to terminate this Lease; provided, however, that either
party may, within thirty (30) days after receipt of such
notice, elect to make any required repairs and/or restoration
at such party's sole cost and expenses, in which event this
Lease shall remain in full force and effect, and the party
having made such election to restore or repair shall
thereafter diligently proceed with such repairs and/or
restoration.
In the event the Premises are damaged or destroyed from any
insured peril to the extent of ninety percent (90%) or more of
the then replacement cost of the Premises, Landlord may, upon
written notice to Tenant, given within thirty (30) days after
the occurrence of such damage or destruction, elect to
terminate this Lease. If Landlord does not give such notice in
writing within such period, Landlord shall be deemed to have
elected to rebuild or restore the Premises, in which event
Landlord shall, at its expense promptly rebuild or restore the
Premises to their condition prior to the damage or destruction
and Tenant shall pay to Landlord upon commencement of
reconstruction the amount of any deductible from the insurance
policy.
In the event the Premises are damaged or destroyed from any
insured peril to the extent of less than ninety percent (90%)
of the then replacement cost of the Premises, Landlord shall,
at Landlord's expense, promptly rebuild or restore the
Premises to their condition prior to the damage or destruction
and Tenant shall pay to Landlord upon commencement of
reconstruction the amount of any deductible from the insurance
policy.
In the event that, pursuant to the foregoing provisions,
Landlord is to rebuild or restore the Premises, Landlord
shall, within thirty (30) days after the occurrence of such
damage or destruction, provide Tenant with written notice of
the time required for such repair or restoration. If such
period is longer than one hundred eighty (180) days from the
issuance of a building permit, Tenant may, within thirty (30)
days after receipt of Landlord's notice, elect to terminate
the Lease by giving written notice to Landlord of such
election, whereupon the Lease shall immediately terminate. The
period of time for Landlord to complete the repair or
restoration shall be extended for delays caused by the fault
or neglect of Tenant or because of acts of God, acts of
publication, labor disputes, strikes, fires, freight
embargoes, rainy or stormy weather, inability to obtain
materials, supplies or fuels, acts of contractors or
subcontractors, or delay of contractors or subcontractors due
to such causes, or other contingencies beyond the
12
13
control of Landlord. Landlord's obligation to repair or
restore the Premises shall not include restoration of Tenant's
trade fixtures, equipment, merchandise, or any improvements,
alterations or additions made by Tenant to the Premises.
Unless this Lease is terminated pursuant to the foregoing
provisions, this Lease shall remain in full force and effect;
provided, however, that during any period of repairs or
restoration, rent and all other amounts to be paid by Tenant
on account of the Premises and this Lease shall be abated in
proportion to the area of the Premises rendered not reasonably
suitable for the conduct of Tenant's business thereon. Tenant
hereby expressly waives the provisions of Section 1932,
Subdivision 2 and Section 1933, Subdivision 4 of the
California Civil Code.
15. Condemnation.
A. Definition of Terms. For the purposes of this Lease,
the term (1) "Taking" means a taking of the Premises
or damage to the Premises related to the exercise of
the power of eminent domain and includes a voluntary
conveyance, in lieu of court proceedings, to any
agency, authority, public utility, person or
corporate entity empowered to condemn property; (2)
"Total Taking" means the taking of the entire
Premises or so much of the Premises as to prevent or
substantially impair the use thereof by Tenant for
the uses herein specified; provided, however, in no
event shall a Taking of less than ten percent (10%)
of the Premises be deemed a Total Taking; (3)
"Partial Taking" means the taking of only a portion
of the Premises which does not constitute a Total
Taking; (4) "Date of Taking" means the date upon
which the title to the Premises, or a portion
thereby, passes to and vests in the condemnor or the
effective date of any order for possession if issued
prior to the date title vests in the condemnor; and
(5) "Award" means the amount of any award made,
consideration paid, or damages ordered as a remit of
a Taking.
B. Rights. The parties agree that in the event of a
Taking all rights between them or in and to an Award
shall be as set forth herein and Tenant shall have no
right to any Award except as set forth herein.
C. Total Taking. In the event of a Total Taking during
the term hereof (1) the rights of Tenant under the
Lease and the leasehold estate of Tenant in and to
the Premises shall cease and terminate as of the Date
of Taking; (2) Landlord shall refund to Tenant any
prepaid rent; (3) Tenant shall pay Landlord any rent
or charges due Landlord under the Lease, each
prorated as of the Date of Taking; (4) Tenant shall
receive from Landlord those portions of the Award
attributable to trade fixtures of Tenant and for
moving expenses of Tenant; and(S) the remainder of
the Award shall be paid to and be the property of
Landlord.
D. Partial Taking. In the event of a Partial Taking
during the term hereof (1) the rights of Tenant under
the Lease and leasehold estate of Tenant in and to
the portion of the Premises taken shall cease and
terminate as of the Date of Taking; (2) from and
after the Date of Taking the Monthly installment of
rent shall be an amount equal to the product obtained
by multiplying the Monthly Installment of rent
immediately prior to the Taking by a fraction, the
numerator of which is the number of square feet
contained in the Premises after the Taking and the
denominator of which is the number of square feet
contained in the Premises prior to the Taking; (3)
Tenant shall receive from the Award the portions of
the Award attributable to trade fixtures of Tenant;
and (4) the remainder of the Award shall be paid to
and be the property of Landlord.
13
14
16. Mechanics' Lien. Tenant shall (A) pay for all labor and
services performed for, materials used by or furnished to,
Tenant or any contractor employed by Tenant with respect to
the Premises; (B) indemnify, defend, protect and hold Landlord
and the Premises harmless and free from any liens, claims,
liabilities, demands, encumbrances, or judgments created or
suffered by reason of any labor or services performed for,
materials used by or furnished to, Tenant or any contractor
employed by Tenant with respect to the Premises; (C) give
notice to Landlord in writing five (5) days prior to employing
any laborer or contractor to perform services related to, or
receiving materials for use upon the Premises; and ([)) permit
Landlord to post a notice of no responsibility in accordance
with the statutory requirements of California Civil Code
Section 3094 or any amendment thereof. In the event Tenant is
required to post an improvement bond with a public agency in
connection with the above, Tenant agrees to include Landlord
as an additional obligee.
17. Inspection of the Premises. Tenant shall permit Landlord and
its agents to enter the Premises upon written notice thereof
at least twenty-four (24) hours in advance (except in case of
emergency) at any reasonable time for the purpose of
inspecting the same, posting a notice of non-responsibility
for alterations, additions or repairs; and at any time within
one hundred eighty (180) days prior to expiration of this
Lease, to place upon the Premises, ordinary "For Lease" or
"For Sale" signs.
18. Compliance with Laws. Tenant shall, at its own cost, comply
with all of the requirements of all municipal, county, state
and federal authorities now in force, or which may hereafter
be in force, pertaining to Tenant's use and occupancy of the
Premises, and shall faithfully observe all municipal, county,
state and federal law, statutes or ordinances now in force or
which may hereafter be in force. The judgment of any court of
competent jurisdiction or the admission of Tenant in any
action or proceeding against Tenant, whether Landlord be a
party thereto or not, that Tenant has violated any such
ordinance or statute in the use and occupancy of the Premises
shall be conclusive of the fact that such violation by Tenant
has occurred.
19. Subordination. The following provisions shall govern the
relationship of this Lease to any, underlying lease, mortgage
or deed of trust which now or hereafter affects the Premises,
the Building and/or the Parcel, or Landlord's interest or
estate therein (the "Project") and any renewal, modification,
consolidation, replacement, or extension thereof (a "Security
instrument").
A. Priority. This Lease is subject and subordinate to
Security Instruments existing as of the Commencement
Date. However, if any Lender so requires, this Lease
shall become prior and superior to any such Security
instrument.
B. Subsequent Security Instruments. At Landlord's
election, this Lease shall become subject and
subordinate to any Security Instrument created after
the Commencement Date. Notwithstanding such
subordination, Tenant's right to quiet possession of
the Premises shall not be disturbed so long as Tenant
is not in default and performs all of its obligations
under this Lease, unless this Lease is otherwise
terminated pursuant to its terms.
C. Documents. Tenant shall execute any document or
instrument reasonably required by Landlord or any
Lender to make this Lease either prior or subordinate
to a Security Instrument, which may include such
other matters as the Lender customarily requires in
connection with such agreements, including provisions
that the Lender not be liable for
14
15
(1) the return of the Security Deposit unless the
Lender receives it from Landlord, and (2) any
defaults on the part of Landlord occurring prior to
the time that the Lender takes possession of the
Project in connection with the enforcement of its
Security Instrument. Tenant's failure to execute any
such document or instrument within ten (10) days
after written demand therefor shall constitute a
default by Tenant or, at Landlord's option, Landlord
may execute such documents on behalf of Tenant as
Tenant's attorney-in-fact. Tenant does hereby make,
constitute and irrevocably appoint Landlord as
Tenant's attorney-in-fact to execute such documents
in accordance with this Paragraph.
D. Tenant's Attornment. Tenant shall attorn (1) to any
purchaser of the Premises at any foreclosure sale or
private sale conducted pursuant to any Security
Instrument encumbering the Project; (2) to grantee or
transferee designated in any deed given in lieu of
foreclosure; or (3) to the lessor under any
underlying ground lease should such ground lease be
terminated.
E. Lender. The term "Lender" shall mean (1) any
beneficiary, mortgagee, secured party, or other
holder of any deed of trust, mortgage, or other
written security device or agreement affecting the
Project; and (2) any lessor under any underlying
lease under which Landlord holds its interest in the
Project.
20. Holding Over. This Lease shall terminate without further
notice at the expiration of the Lease Term. Any holding over
by Tenant after expiration shall not constitute a renewal or
extension or give Tenant any rights in or to the Premises
except as expressly provided in this Lease. Any holding over
after the expiration with the consent of Landlord shall be
construed to be a tenancy from month to month, at one hundred
fifty percent (150%) of the monthly rent for the last month of
the Lease Term, and shall otherwise be on the terms and
conditions herein specified insofar as applicable.
21. Notices. Any notice required or desired to be given under this
Lease shall be in writing with copies directed as indicated
below and shall be personally served or given by mail. Any
notice given by mail shall be deemed to have been given when
forty eight (48) hours have elapsed from the time such notice
was deposited in the United States mails, certified and postage
prepaid, addressed to the party to be served with a copy as
indicated herein at the last address given by that party to the
other party under the provisions of this Paragraph. At this
date of execution of this Lease, the address of Landlord is:
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
and the address of Tenant is:
0000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
After the Commencement Date, the address of Tenant will be at
the Premises.
22. Attorneys' Fees. In the event either party shall bring any
action or legal proceeding for damages for any alleged breach
of any provision of this Lease, to recover rent or possession
of the Premises, to terminate this Lease, or to enforce,
protect or establish any term or covenant of this Lease or
right or remedy of either party, the prevailing party shall be
entitled to recover as a part
15
16
of such action or proceeding, reasonable attorneys' fees and
court costs, including attorneys' fees and costs for appeal,
as may be fixed by the court or jury. The term "prevailing
party" shall mean the party who received substantially the
relief requested, whether by settlement, dismissal, summary
judgment, judgment, or otherwise.
23. Nonassignment.
A. Landlord's Consent Required. Except for "Permitted
Transfers" as defined below, Tenant's interest in this Lease
is not assignable, by operation of law or otherwise, nor shall
Tenant have the right to sublet the Premises, transfer any
interest of Tenant therein or permit any use of the Premises
by another party, without the prior written consent of
Landlord to such assignment, subletting, transfer or use,
which consent Landlord agrees not to withhold unreasonably
subject to the provisions of Subparagraph B below. A consent
to one assignment, subletting, occupancy or use by another
party shall not be deemed to be a consent to any subsequent
assignment, subletting, occupancy or use by another party. Any
assignment or subletting without such consent shall be void
and shall, at the option of Landlord, terminate this Lease.
Landlord's waiver or consent to any assignment or subletting
hereunder shall not relieve Tenant from any obligation under
this Lease unless the consent shall so provide.
A Permitted Transfer is any merger, consolidation,
reorganization or acquistion, so long as the surviving entity
tenant's net worth is equal to or greater than Tenant's at the
time of the merger, consolidation, reorganization or
acquistion.
B. Transferee Information Required. If Tenant desires to assign
its interest in this Lease or sublet the Premises, or transfer
any interest of Tenant therein, or permit the use of the
Premises by another party hereinafter collectively referred to
as a "Transfer"), Tenant shall give Landlord at least ten (10)
days prior written notice of the proposed Transfer and of the
terms of such proposed Transfer, including, but not limited
to, the name and legal composition of the proposed transferee,
a financial statement of the proposed transferee, the nature
of the proposed transferee's business to be carried on in the
Premises, the payment to be made or other consideration to be
given to Tenant on account of the Transfer, and such other
pertinent information as may be requested by Landlord, all in
sufficient detail to enable Landlord to evaluate the proposed
Transfer and the prospective transferee. It is the intent of
the parties hereto that this Lease shall confer upon Tenant
only the right to use and occupy the Premises, and to exercise
such other rights as are conferred upon Tenant by this Lease.
The parties agree that this Lease is not intended to have a
bonus value nor to serve as a vehicle whereby Tenant may
profit by a future Transfer of this Lease or the right to use
or occupy the Premises as a result of any favorable terms
contained herein, or future changes in the market for leased
space. It is the intent of the parties that any such bonus
value that may attach to this Lease shall be and remain the
exclusive property of Landlord, to the extent as set forth in
Paragraph 23.B(2) below. Accordingly, in the event Tenant
seeks to Transfer its interest in this Lease or the Premises,
Landlord shall have the following options, which may be
exercised at its sole choice without limiting Landlord in the
exercise of any other right or remedy which Landlord may have
by reason of such proposed Transfer:
(1) Should Tenant assign or sublease all of the Premises
during the Option Term, as defined in Paragraph 38
below, Landlord may elect to terminate this Lease
effective as of the proposed effective date of the
proposed Transfer and release Tenant from any further
16
17
liability hereunder accruing after such termination
date by giving Tenant written notice of such
termination within twenty (20) days after receipt by
Landlord of Tenant's notice of intent to transfer as
provided above. If Landlord makes such election to
terminate this Lease, Tenant shall surrender the
Premises, in accordance with Paragraph 34, on or
before the effective termination date; or
(2) Landlord may consent to the proposed Transfer
on the condition that Tenant agrees to pay to
Landlord, as additional rent, seventy-five
percent (75%) of any and all rents or other
consideration for the Premises (including key
money) received by Tenant from the transferee
by reason of such Transfer in excess of the
rent payable by Tenant to Landlord under this
Lease "Transfer Rent" (less any reasonable
and documented brokerage commissions or
advertising expenses incurred by Tenant in
connection with the Transfer and, during the
initial six (6) year lease Term only, less
an amount to cover Tenant's Tenant
Improvement Costs set forth in Paragraph 2
above, and which shall be calculated as
follows:. Seven Hundred Thousand Dollars
($700,000.00) shall be deducted from the
total cost of the Tenant Improvements,
including soft costs, and the remainder shall
be divided by 98,836 (square feet). The
resulting quotient shall be divided by
seventy-two (72) (months). The end result of
this calculation is the amount per square
foot to be deducted from the Transfer Rent
from the effective date of a Transfer through
the last month of said initial Lease Term.
Upon completion of the Tenant Improvements,
this Lease shall be amended to establish the
exact amount which may be deducted) Tenant
expressly agrees that the foregoing is a
reasonable condition for obtaining Landlord's
consent to any Transfer; or
(3) Landlord may reasonably withhold its consent
to the proposed Transfer.
24. Successors The covenants and agreements contained in this
Lease shall be binding on the parties here to and on their
respective heirs, successors and assigns (to the extent the
Lease is assignable).
25. Mortgagee Protection. In the event of any default on the part
of Landlord, Tenant will give notice by registered or
certified mail to any beneficiary of a deed of trust or
mortgagee of a mortgage encumbering the Premises, whose
address shall have been furnished to Tenant, and shall offer
such beneficiary or mortgagee a reasonable opportunity to cure
the default, including time to obtain possession of the
Premises by power of sale or judicial foreclosure, if such
should prove necessary to effect a cure.
26. Landlord Loan or Sale. Tenant agrees promptly following
request by Landlord to (A) execute and deliver to Landlord any
documents, including estoppel certificates presented to Tenant
by Landlord, (i) certifying that this Lease is unmodified and
in full force and effect and the date to which the rent and
other charges are paid in advance, if any, and (ii)
acknowledging that there are not, to Tenant's knowledge, any
uncured defaults on the part of Landlord hereunder, and (iii)
evidencing the status of the Lease as may be required either
by a lender making a loan to Landlord to be secured by a deed
of trust or mortgage covering the Premises or a purchaser of
the Premises from Landlord and (B) to deliver to Landlord the
financial statement of Tenant with an opinion of a certified
public accountant, including a balance sheet and profit and
loss statement, for the last completed fiscal year all
prepared in accordance with generally accepted accounting
principles consistently applied. If Tenant fails to deliver an
estoppel certificate within five (5) business days following
such request from Landlord, Tenant shall be deemed to have
appointed
17
18
Landlord as Tenant's attorney-in-fact, in Tenant's name, place
and stead, to execute such estoppel certificate.
At the time of executing this Lease, it is understood that
Landlord is finalizing a loan secured by the Premises and upon
the request of lender, Tenant agrees to execute a Tenant
Estoppel and Subordination, Attournment and Non-Disturbance
Agreement in the forms as attached hereto as Exhibit "C" and
made a part hereof
27. Surrender of Lease Not Merger. The voluntary or other
surrender of this Lease by Tenant, or a mutual cancellation
thereof, shall not work a merger and shall' at the option of
Landlord, terminate all or any existing subleases or
subtenants, or operate as an assignment to Landlord of any or
all such subleases or subtenants.
28. Waiver. The waiver by Landlord or Tenant of any breach of any
term' covenant or condition herein contained shall not be
deemed to be a waiver of any preceding or succeeding breach of
the same or any other covenant or condition herein contained.
29. General.
A. Captions. The captions and paragraph headings used in
this Lease are for the purposes of convenience only.
They shall not be construed to limit or extend the
meaning of any part of this Lease, or be used to
interpret specific sections. The word (s) enclosed
in quotation marks shall be construed as defined
terms for purposes of the Lease. As used in this
Lease, the masculine, feminine and neuter and the
singular or plural number shall each be deemed to
include the other whenever the context so requires.
B. Definition of Landlord. The term "Landlord" as used
in this Lease, so far as the covenants or obligations
on the part of Landlord are concerned, shall be
limited to mean and include only the owner at the
time in question of the fee title of the Premises,
and in the event of any transfer or transfers of the
title of such fee, the Landlord herein named (and in
case of any subsequent transfers or conveyances, the
then grantor) shall after the date of such transfer
or conveyance be automatically freed and relieved of
all liability with respect to performance. of any
covenants or obligations on the part of Landlord
contained in this Lease, thereafter to be performed;
provided that any fluids in the hands of Landlord or
the then grantor at the time of such transfer, in
which Tenant has an interest, shall be turned over to
the grantee. It is intended that the covenants and
obligations contained in this Lease on the part of
Landlord shall, subject as aforesaid, be binding
upon each Landlord, its heirs, personal
representatives, successors and assigns only during
its respective period of ownership.
C. Time of Essence. Time is of the essence for the
performance of each term, covenant and condition of
this Lease.
D. Serverability. In case any one or more of the
provisions contained herein, except for the payment
of rent, shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not
affect any other provision of this Lease, but this
Lease shall be construed as if such invalid, illegal
or unenforceable provision had not been contained
herein. This Lease shall be construed and enforced in
accordance with the laws of the State of California.
18
19
E Joint and Several Liability. If Tenant is more than
one person or entity, each such person or entity
shall be jointly and severally liable for the
obligations of Tenant hereunder.
F. Law. The term "law" shall mean any judicial decision,
statute, constitution, ordinance, resolution,
regulation, rule, administrative order, or other
requirement of any government agency or authority
having jurisdiction over the parties to this Lease or
the Premises or both, in effect at the Commencement
Date of this Lease or any time during the Lease Term,
including, without limitation, any regulation, order,
or policy of any quasi-official entity or body (e.g.,
board of fire examiners, public utility or special
district).
30. Sign. Tenant shall not place or permit to be placed any sign
or decoration on the land or the exterior of the Building
without the prior written consent of Landlord, which consent
shall not be unreasonably withheld, provided such sign or
decoration has been approved by the appropriate agency of the
City of Sunnyvale. Tenant, upon written notice by Landlord,
shall immediately remove any sign or decoration that Tenant
has placed or permitted to be placed on the land or the
exterior of the Building without such prior written consent of
Landlord, and if Tenant fails to so remove such sign or
decoration within five (5) days after Landlord's written
notice, Landlord may enter upon the Premises and remove said
sign or decoration and Tenant agrees to pay Landlord, as
additional rent upon demand, the cost of such removal. At the
termination of this Lease, Tenant shall remove any sign which
it has placed on the Parcel or Building and shall repair any
damage caused by the installation or removal of such sign.
31. Interest on Past Due Obligations. Any Monthly Installment of
rent or any other sum due from Tenant under this Lease (except
for any late charge) which is received by Landlord after the
date the same is due shall bear interest from said due date
until paid, at an annual rate equal to the prime rate then
being charged by Bank of America, N.T.S.A., plus one percent
(1%). Payment of such interest shall not excuse or cure any
default by Tenant. In addition, Tenant shall pay all costs and
attorneys' fees incurred by Landlord in collection of such
amounts.
32. Surrender of the Premises. On the last day of the term hereof,
or on the sooner termination of this Lease, Tenant shall
surrender the Premises to Landlord in their condition existing
as of the Commencement Date of this Lease, subject to Paragraph
11 above, ordinary wear and tear excepted, with all originally
painted interior walls washed, and other interior walls
cleaned, and repaired or replaced, all carpets shampooed and
cleaned, the air conditioning and heating equipment serviced
and repaired by a reputable and licensed service firm, all
floors cleaned and waxed, all to the reasonable satisfaction of
Landlord. Tenant shall remove all of Tenant's personal property
and trade fixtures from the Premises, and all property not so
removed shall be deemed abandoned by Tenant. Tenant, at its
sole cost shall repair any damage to the Premises caused by the
removal of Tenant's personal property, machinery and equipment,
which repair shall include, without limitation, the patching
and filling of holes and repair of structural damage.
Notwithstanding the above, Tenant shall not be obligated to
replace the Building roof upon surrender of the Premises,
provided Tenant has maintained the roof pursuant to Paragraph
10.A above, and the roof is watertight upon said surrender. If
the Premises are not so surrendered at the termination of this
Lease, and Landlord has given Tenant thirty (30) days' written
notice that it is in negotiations or has negotiated a lease
with a third party, Tenant shall indemnify, defend, protect and
hold Landlord harmless from and against loss or liability
resulting from delay by Tenant in so surrendering the Premises
including without limitation, any claims made by any succeeding
tenant or losses to Landlord due to lost opportunities to lease
to succeeding tenants. No third party shall be a beneficiary
with respect to the obligations of Tenant under the preceding
sentence.
19
20
33. Authority. The undersigned parties hereby warrant that they
have proper authority and are empowered to execute this Lease
on behalf of Landlord and Tenant, respectively.
34. Public Record. This Lease is made subject to all matters of
public record affecting title to the property of which the
Premises are a part Tenant shall abide by and comply with all
such matters of public record now or hereafter affecting the
Premises and any amendment thereof
35. Brokers. Tenant represents and warrants to Landlord that it
has not dealt with any broker respecting this transaction
other than Cornish & Xxxxx Oncor International and Park Place
and hereby agrees to indemnify and hold Landlord harmless from
and against any brokerage commission or fee, obligation, claim
or damage (including attorneys' fees) paid or incurred
respecting any broker claiming through Tenant or with
which/whom Tenant has dealt. Landlord's exclusive broker for
this transaction is Colliers Xxxxxxx International, Inc. The
broker commission to be paid by Landlord shall be paid
one-fourth (1/4th) to Cornish & Xxxxx Oncor International,
one-forth (1/4th) to Park Place, and one-half (1/2) to
Colliers Xxxxxxx International, Inc. per separate agreement.
36. Limitation on Landlord's Liability Tenant, for itself and its
successors and assigns (to the extent this Lease is
assignable), hereby agrees that in the event of any actual, or
alleged, breach or default by Landlord under this Lease that:
A. Tenant's sole and exclusive remedy against Landlord
shall be as against Landlord's interest in the
Building;
B. No partner or officer of any partner of Landlord
shall be sued or named as a party in a suit or action
(except as may be necessary to secure jurisdiction of
the partnership);
C. No service of process shall be made against any
partner of Landlord (except as may be necessary to
secure jurisdiction of the partnership);
D. No partner of Landlord shall be required to answer or
otherwise plead to any service of process;
E. No judgment will be taken against any partner of
Landlord beyond its interest in the Premises;
F. Any judgment taken against any partner of Landlord,
except as to its interest in the Premises, may be
vacated and set aside at any time nunc pro tunc;
G. No writ of execution will ever be levied against the
assets of any partner of Landlord beyond its interest
in the Premises;
H. The covenants and agreements of Tenant set forth in
this Section 36 shall be enforceable by Landlord and
any partner of Landlord.
37. Hazardous Material.
A. Definitions. As used herein, the term "Hazardous
Material" shall mean any substance or material which
has been determined by any state, federal or local
government authority
20
21
to be capable of posing a risk of injury to health,
safety or property including all of those materials
and substances designated as hazardous or toxic by
the Environmental Protection Agency, the California
Water Quality Control Board, the Department of Labor,
the California Department of Industrial Relations,
the Department of Transportation, the Department of
Agriculture, the Consumer Product Safety Commission,
the Department of Health and Human Services, the Food
and Drug Agency or any other governmental agency now
or hereafter authorized to regulate materials and
substances in the environment. Without limiting the
generality of the foregoing, the term "Hazardous
Material" shall include all of those materials and
substances defined as ."Toxic Materials" in Sections.
66680 through 66685 of Title 22 of the California
Code of regulations, Division 4, Chapter 30, as the
same shall be amended from time to time.
B. Use Restriction. Subject to the terms and conditions
set forth herein, Landlord acknowledges that so long
as Tenant is under this Lease, Tenant shall be
permitted to use and store in the Premises those
materials described in Paragraph G below, in the
quantities set forth in said Paragraph. Except as
specifically allowed in this Lease, Tenant shall not
cause or permit and Hazardous Material to be used,
stored, generated, discharged, transported to or
from, or disposed of in or about the Premises, or any
other land or improvements in the vicinity of the
Premises. The appearance of any Hazardous Material
that is not permitted by this Lease in or about the
Premises shall be deemed an Event of Default under
Paragraph 13 above. Without limiting the generality
of the foregoing, Tenant, at its sole cost' shall
comply with all laws relating to the storage, use,
generation, transport, discharge and disposal of
Hazardous Materials. If the presence of Hazardous
Materials on the Premises caused or permitted by
Tenant results in contamination of the Premises or
any soil, air, ground or surface waters under,
through, over, on, in or about the Premises, Tenant,
at its expense, shall promptly take all actions
necessary to return the Premises and/or the
surrounding real and personal property to the
condition existing prior to the appearance of such
Hazardous Material.
Tenant shall defend, protect, hold harmless and
indemnify Landlord and its Agents and Lenders with
respect to all actions, claims, losses (including,
diminution in value of the Premises), fines,
penalties, fees, (including, but not limited to,
reasonable attorneys' and consultants' fees and
costs) costs, damages, liabilities, remediation
costs, investigation costs, response costs and other
expenses arising out of, resulting from, or caused by
any Hazardous Material used, generated discharged,
transported to or from, stored, or disposed of by
Tenant or its Agents in, on, under, over, through or
about the Premises and/or the surrounding real
property. Tenant shall not suffer any lien to be
recorded against the Premises as a consequence for
the disposal of any Hazardous Material on the
Premises by Tenant or its Agents, including any so
called state, federal or local "super fund" lien
related to the "clean up" of any Hazardous Material
in, over, on, under through, or about the Premises.
C. Compliance. Tenant shall immediately notify Landlord
of any inquiry, test, investigation, enforcement
proceeding by or against Tenant or the Premises
concerning any Hazardous Material. Any remediation
plan prepared by or on behalf of Tenant must be
submitted to landlord prior to conducting any work
pursuant to such plan and prior to submittal to any
applicable government authority and shall be subject
to Landlord's consent. Tenant acknowledges that
Landlord, as the owner of the Property, at its
election, shall have the sole right to negotiate, at
Tenant's expense, to negotiate, defend, approve and
appeal any action taken or order issued with
21
22
regard to any Hazardous Material(s) by any applicable
governmental authority. Landlord shall have the right
to appoint a consultant, at Tenant's expense, to
conduct an investigation to determine whether
Hazardous Material(s) are being used, generated,
discharged, transported to or from, stored or
disposed of in, on, over, through, or about the
Premises, in an appropriate and lawful manner.
Tenant, at its expense, shall comply with all
recommendations of the consultant. Such
investigation, negotiation, defense or appeal shall be
performed at the sole expense of Landlord, unless
such investigation shows that the contamination of
the Premises has been caused directly by Tenant or
Tenant's agent, employees or invitees
D. Assignment and Subletting. It shall not be
unreasonable for Landlord to withhold its consent to
any proposed assignment or subletting if the proposed
assignee's or subtenant's anticipated use of the
Premises involves the storage, generation, discharge,
transport, use or disposal of any Hazardous Material.
E. Surrender. Upon the expiration or earlier termination
of the Lease, Tenant, at its sole cost, shall remove
all hazardous Materials from the Premises and the
surrounding real and personal property caused by
Tenant, its agents, employees, or invitees. If
Tenant fails to so surrender the Premises, Tenant
shall indemnify, protect, defend and hold Landlord
harmless from and against all damages resulting from
Tenant's failure to surrender the Premises as
required by this Paragraph, including, without
limitation, any actions, claims, losses, liabilities,
fees (including, but not limited to, reasonable
attorneys' fees and consultants' fees and costs),
fines, costs, penalties, or damages in connection
with the condition of the Premises including, without
limitation, damages occasioned by the inability to
relet the Premises or a reduction in the fair market
and/or rental value of the Premises by reason of the
existence of any Hazardous Materials in, on, over,
under, through or around the Premises.
F. Holding Over. If any action of any kind is required
to be taken by any governmental authority to clean
up, remove, remediate or monitor Hazardous Material
(the presence of which is the result of the acts or
omissions of Tenant or its Agents) and such action is
not completed prior to the expiration or earlier
termination of the Lease, Tenant shall be deemed to
have impermissibly held over until such time as such
required action is completed, and Landlord shall be
entitled to all damages directly or indirectly
incurred in connection with such holding over,
including without limitation, damages occasioned by
the inability to relet the Premises or a reduction of
the fair market and/or rental value of the Premises.
G. Materials. Landlord has provided to Tenant prior to
the date of this Lease copies of all reports in
Landlord's possession concerning the environmental
condition of the Center and the soil and groundwater
in on, and about the Premises, which reports are
described in Exhibit "B" attached hereto and are
herinafter collectively referred to as the "Project
Environmental Reports". Tenant may use and store in
Premises the following:
Write "none" if applicable: "none"
------------------
Materials: Quantity:
__________________ ________________________
__________________ ________________________
22
23
H. Provisions Survive Termination. The provisions of
this Paragraph 39 shall survive the expiration or
termination of this Lease.
I. The provisions of this Paragraph 37 are intended to
govern the rights and liabilities of the Landlord and
Tenant hereunder respecting Hazardous Materials to
the exclusion of any other provisions in this Lease
that might otherwise be deemed applicable. The
provisions of this Paragraph 37 shall be controlling
with respect to any provisions in this Lease that are
inconsistent with this Paragaph 37.
38. Option to Extend. Provided that Tenant is not in
default under this Lease at the time of exercise of this
option or at the time of termination of the then existing term
of this Lease, as the case may be, Tenant shall have one (1)
option to extend the term of this Lease for a period of four
(4) years (the "Option Term"). Said option shall be exercised
only by written notice delivered to Landlord not later than
six (6) months prior to the expiration date of the then
existing term of this Lease. In all respects, the terms,
covenants and conditions of this Lease shall remain unchanged
during the Option Term, except that the Monthly Installment of
rent payable during the Option Term shall be as follows:
Months 1-24 $113,662.00
Months 25-48 $123,545.00
There shall be no further options at the expiration of the
above four (4) year Option Term.
39. Early Termination. Tenant shall have the right to terminate
this Lease at the end of the fifth (5th) year of the Lease
Term by doing all of the following on or before the end of the
fifty-fourth (54th) month of the Lease Term:
(a) Giving Landlord written notice of Tenant's
election to terminate this Lease on the last
day of the fifth (5th) year of the Lease Term
(the "Early Termination Date"); and
(b) Paying to Landlord, as a lease termination
payment, a sum equal to the total Monthly
Installments of rent and Additional Rent that
would have been payable under the Lease
during the first six (6) months of the sixth
(6th) year of the Lease Term had the Lease
not been terminated.
If Tenant so elects to terminate the Lease, Tenant shall pay
all Monthly Installments of rent and Additional Rent accruing
under the Lease through the Early Termination Date and shall
surrender the Premises to Landlord on the Early Termination
Date.
40. Condition Precedent. Tenant understands Landlord is under
contract to purchase the Premises, but does not currently own
the Premises. Accordingly, this Lease and the obligations of
Landlord and Tenant hereunder are conditioned upon Landlord
acquiring fee title to the Premises.
Furthermore, Tenant shall have until 3:00 p.m., August 2,
1996, to do a structural inspection of the Premises and any
reasonable testing to determine the structural integrity and
latent defects, if any, of the Premises and if Tenant
discovers defects that will cost more than One Hundred
Thousand and No/100ths Dollars ($100,000.00) to correct,
Tenant may cancel this Lease
23
24
anytime before 3:00 p.m., August 2, 1996, by giving Landlord
written notice of such cancellation, unless Landlord elects to
correct the defects at its expense.
IN WITNESS WHEREOF, the parties have executed this Agreement on the dates set
forth below.
TENANT: LANDLORD:
SBC&D CO., INC. ARBOR SOFTWARE CORPORATION,
A CALIFORNIA CORPORATION
By: /s/ By: /S/ XXXXXXX XXXXXX
DATED: 7/14/96 DATED: 7/16/96
24
25
EXHIBIT "A"
LEGAL DESCRIPTION
All that certain property situate in the City of Sunnyvale, County of Santa
Xxxxx State of California described as follows:
Parcel 8, as shown on that Parcel Map filed for record in the office of the
Recorder of the County of Santa Xxxxx, State of California on July 18, 1978, in
Book 423 of Maps, page(s) 13.
ARB No: 1104-23.02.03
25
26
EXHIBIT "B"
PROJECT ENVIRONMENTAL REPORTS
1. PHASE I Environmental Site Assessment and Limited Asbestos Survey
dated October 1993, performed by Fugro-XxXxxxxxxx (West), Inc.
2. Letter dated June 26, 1996, regarding Phase I Environmental Site
Assessment, performed by E2C, Inc.
3. Phase I Environmental Site Assessment dated July 2, 1996, by E2C, Inc.
26
27
FIRST AMENDMENT
This First Amendment to Lease ("First Amendment") is made by and between ARBOR
SOFTWARE CORPORATION, a California Corporation ("Tenant"), and SBC&D CO., INC.,
a California corporation or nominee ("Landlord"), as of the date set forth
below with reference to the following facts:
A. By Lease Agreement dated July 16, 1996 (the "Lease"), Landlord has
leased to Tenant certain property commonly known as 0000 Xxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxx.
B. Landlord and Tenant desire to amend the Lease to acknowledge their
mutual understanding as provided below.
NOW THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, Landlord and Tenant hereby agree as follows:
I. The correct name of Tenant is Arbor Software Corporation, a Delaware
Corporation.
2. SBC&D CO., Inc. has assigned its interest in the Lease to TD Drive
Associates, a California general partnership.
MI other terms and conditions of the Lease shall remain the same and in full
force and effect.
AS entered into this 25th day of October 1996.
LANDLORD: TENANT:
SBC&D CO., INC., ARBOR SOFTWARE CORPORATION,
a California Corporation or nominee a Delaware Coroporation
By: /s/ By: /s/ Xxxxxxx Xxxxxx
Title: RVP Title: Chief Financial Officer
---
Dated 10/25/96 Dated: 10/24/96
--------
TD DRIVE ASSOCIATES,
a California general partnership
BY: Xxxxx Xxxxxx
Title: General Partner
Dated: 10/15/96
27
