EXHIBIT 10.12
LEASE AGREEMENT
PARTIES
This Lease (the "Lease"), made this Fourth day of May, 1998, between; 000 XXXXXX
XXXXXX, XXX, ("Xxxxxxxx"), and LOOKSMART, LTD. ("Tenant").
WITNESSETH:
1. PREMISES
Landlord hereby leases to Tenant and Tenant hereby hires from Landlord those
certain premises [hereinafter called "premises"] described on Exhibit A attached
hereto and by this reference made a part hereof, said premises being situated on
the three floors of that certain building [hereinafter called "building" or
"Building"] known as 000 Xxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx.
Said letting and hiring is upon and subject to the terms, covenants and
conditions herein set forth and Tenant covenants as a material part of the
consideration for this Lease to keep and perform each and all of said terms,
covenants and conditions by it to be kept and performed and that this Lease is
made upon the condition of such performance.
2. PURPOSE
The premises shall be used for general office purposes and for no other use or
purpose without the prior written consent of Landlord which shall not be
unreasonably withheld.
3. TERM
The term of this Lease shall be for five years, commencing on the 1st day of
June, 1998, or upon substantial completion of the Tenant's improvements on the
2nd and 3rd floors, and ending on the 31st day of May, 2003 [the "Lease Term"].
4. POSSESSION
If Landlord, for any reason whatsoever, cannot deliver possession of the said
premises to Tenant at the commencement of the Lease Term, this Lease shall not
be void or voidable, nor shall Landlord be liable to Tenant for any loss or
damage resulting therefrom, but in that event there shall be a proportionate
reduction of rent covering the period between the commencement of the said term
and the time when Landlord can deliver possession. If possession of the premises
is not delivered to Tenant within three months from the scheduled commencement
date, this Lease will terminate at Tenant's election. Should Landlord tender
possession of the premises to Tenant prior to the date specified for the
commencement of the term, and Tenant accepts such prior tender, such prior
occupancy shall be subject to all terms, covenants, and conditions of this
Lease, including the payment of rent. No delay in delivery of possession shall
operate to extend the term hereof. Within 10 days after written request from
Landlord, Tenant shall execute and return to Landlord an acknowledgment of the
commencement date of the term of this lease.
5. RENT
[a] On or before the first day of each calendar month during the term hereof
Tenant shall pay to Landlord, as minimum monthly rent for the premises, the sum
of $23,886.34. However, for two months from June 1, 1998, Tenant shall pay as a
minimum monthly rent for the premises, the sum of $16,694.34. The minimum
monthly rent for any partial month shall be prorated at the rate of 1/30 of the
minimum monthly rent per day.
Said rent shall be paid by Tenant to Landlord, in advance, without deduction or
offset, in lawful money of the United States of America at 00 Xxxxx Xxxx, Xxx
Xxxxxxxxx, Xxxxxxxxxx, or to such other person or at such other place as
Landlord may from time to time designate in writing.
[b] All charges and other amounts of any kind payable by Tenant to Landlord
pursuant to this Lease shall be deemed additional rent. Landlord shall have the
same remedies for default in the payment of additional rent as for default in
the payment of basic rent. Basic rent and additional rent are collectively
sometimes hereinafter referred to as rent.
[c] All rent payable by Tenant to Landlord hereunder, if not received by
Landlord when due, shall bear interest from the due date until paid at the
publicly announced prime rate or reference rate charged on such
due date by the San Francisco Main Office of Bank of America, N. T. & S. A. [or
any successor bank] for short term, unsecured loans to its most creditworthy
borrowers, plus four percent [4%] per annum, but in no event shall such interest
exceed the maximum rate permitted by law. Landlord's acceptance of any interest
payments shall not constitute a waiver of Tenant's default with respect to the
overdue amount or prevent Landlord from exercising any of the rights and
remedies available to Landlord under this Lease or by law.
6. RENTAL ADJUSTMENT
[a] The minimum rent described in Section 5 includes an amount equal to
Tenant's percentage share of [i] the real and personal property taxes (as
described in Section 6(b) hereof) for fiscal year 1998 and [ii] direct expenses
(as described in Section 6(c) hereof) for calendar year 1998. In addition to the
minimum monthly rent provided for in Paragraph 5 hereof, Tenant shall pay to
Landlord the sums set forth in the following subparagraphs. Tenant's percentage
share as set forth below has been calculated by dividing the number of square
feet of rentable area in the premises by the number of square feet of rentable
area in the building. In the event the rentable area of the building is changed,
the Tenant's percentage share shall be appropriately adjusted. Rentable area
shall be based upon the Building Owners and Managers Association International
[BOMAI] standard method of floor measurement for office buildings. Tenant hereby
approves and accepts Landlord's calculation of Tenant's current percentage share
as set forth below.
[B] TAX INCREASES AND ASSESSMENTS
Tenant shall pay to Landlord an amount equal to 100% of any increase in real
property taxes and assessments or other fees or charges of whatsoever kind or
character imposed by a governmental agency which may be levied on the land and
building of which the premises are a part and personal property taxes levied on
personal property of Landlord used in the operation of said land and building
above the amount of such taxes levied and assessed for the fiscal tax year
ending June 30, 1998, either by way of increase in the rate or in the assessed
valuation of said land and building or by imposition of any such charges by
ordinance or statute of any authority having jurisdiction. Real and personal
property taxes shall include, without limitation, taxes of every kind and nature
levied and assessed in lieu of or in substitution for existing or additional
real or personal property taxes on said land and building as well as any form of
assessment, license, fee, levy, penalty, or tax [other than inheritance or
estate taxes], imposed by any authority having the direct or indirect power to
tax, including any city, county, state, or federal government, or any school,
agricultural, lighting, drainage, or other improvement district, as against any
legal or equitable interest of Landlord in the premises or in the real property
of which the premises are a part, or as against Landlord's right to rent or
other income therefrom, or as against Landlord's business of leasing the
premises. In addition, Tenant shall pay one hundred per cent [100%] of any
increase in taxes or assessments of whatsoever kind and nature [including,
without limitation, all personal property taxes] caused by improvements or
installations made by Tenant to the premises at any time during the term hereof.
The total amounts due hereunder shall be paid to Landlord on or before the date
full payment of such taxes or assessments or, if payable in installments, the
date payment of the first installment Of such taxes or assessments shall become
due. In the event said taxes or assessments are charged to or paid or payable by
Landlord, Tenant forthwith upon demand therefore, shall reimburse Landlord for
all amounts of such taxes or assessments chargeable against Tenant pursuant to
this subparagraph [b] and paid by Landlord.
[C] OPERATING EXPENSE INCREASES
Tenant shall pay to Landlord, at the times hereinafter set forth, an amount
equal to Tenant's 100% share of any increase in direct expenses paid or incurred
by Landlord on account of the operation or maintenance of the building above
such direct expenses paid or incurred by Landlord during the Base Year. "Base
Year" as used in this subparagraph [c] shall mean the calendar year 1998;
"Direct expenses" as used herein shall include all direct costs of operation and
maintenance as determined by standard accounting practices as set forth in the
Building Owners and Managers Association International [BOMAI] chart of accounts
from time to time [excluding, however, any and all taxes of the nature set forth
in subparagraph [b] above and shall include the following by way of illustration
but not limitation: the cost of contesting by appropriate proceeding the amount
or the validity of any of the aforementioned taxes or fees; water and sewer
charges; insurance premiums; license, permit and inspection fees; charges for
labor; supplies; materials, equipment and tools; management expenses and the
cost of capital improvements made by Landlord to the Building that are intended
to reduce other Operating Expenses or that are required under any governmental
law or regulation that is not applicable to the Building as of the date of this
Lease, such cost or allocable portion
Page 2
thereof to be amortized over such reasonable period as Landlord shall determine
together with interest on the unamortized balance at the rate that was paid by
Landlord on funds borrowed for the purpose of constructing or installing such
capital improvements, or, if landlord does not borrow such funds, would have
been paid had the Landlord borrowed funds for such purpose but in no event shall
such interest rate exceed the maximum rate permitted by law. "Direct expenses"
as used herein shall not include depreciation on the building, real estate
broker's commissions, tenant improvements, interest and capital items other than
those referred to above. In the event the Building is not fully occupied during
any Expense Year or in the event the entire Building is not provided with
Building standard services during any Expense Year, an adjustment shall be made
by Landlord in computing Operating Expenses for such Expense Year so that
Operating Expenses shall be computed as though 95% of the entire Building had
been occupied and 95% of the entire Building had been provided with Building
standard services during such year [or such Operating Expenses shall be computed
in accordance with actual occupancy or actual provision of Building standard
services if such respective amounts shall exceed 95%]; provided, however, that
in no event shall the aggregate amount of Operating Expenses collected by
Landlord from all Tenants in the Building exceed the actual Operating Expenses
for said year.
Statements of the amount of direct expenses for the preceding calendar year and
the amount of such increase payable by Tenant shall be determined or estimated
by Landlord and shall be given to Tenant on such date as Landlord shall from
time to time determine. All amounts payable by Tenant as shown on said statement
shall be paid by Tenant within the time required by said statement. If during
any such year Landlord shall revise its estimate of Tenant's share of said
expenses for said year, Landlord shall advise Tenant and commencing on the next
date payment of additional charges are due, Tenant shall pay all additional
charges based on such revised estimate for the portion of the year already
elapsed and shall commence paying the additional charges based on such revised
estimate for the remainder of such year.
7. UTILITIES AND JANITORIAL
Tenant shall pay all janitorial costs, gas, heat, refuse and electrical costs.
In addition, Tenant shall pay for all of its data and all of its telephone
utilities at the Premises. Tenant shall be responsible for and shall promptly
pay to either Landlord or the supplier thereof, as applicable, as the same
becomes due and payable, all bills, charges, fees, assessments, and extractions
for all electricity, gas, heat, refuse, janitorial, data, and telephone services
furnished or used by Tenant in, on or about the premises. If any of these
utilities or services are not separately charged or metered to the premises,
Tenant shall pay to Landlord within ten [10] days after written demand therefor,
Tenant's pro rata share of the total cost thereof as may be determined by
Landlord. Tenant shall if required install and maintain in good repair, separate
metering for any or all of these services. In no event shall Landlord be liable
for any interruption or failure of any of these services for any cause, whether
or not within Landlord's control or due to Landlord's act or neglect.
8. SECURITY
Simultaneously with the execution of this lease, Tenant shall deposit with
Landlord the sum of $71,659.01 ("Deposit"), of which sum $71,659.01 will be a
refundable cash security deposit held by the Landlord. This amount shall be held
by Landlord as security for the faithful performance by Tenant of all the terms,
covenants and conditions of this lease. Beginning on the second anniversary of
this Lease, the amount of the refundable cash security deposit shall be reduced
by 33.33% and reduced an additional 33.33% on the fourth anniversary. Provided
that at the end of the Lease Term Tenant shall have delivered up the Premises to
Landlord, broom clean, and in the same condition as at the commencement date,
reasonable wear excepted, said refundable security deposit held as security
shall be returned to Tenant. No interest shall be payable thereon and Landlord
shall not be required to keep said sum in a separate account. If Tenant fails to
pay any Rent or other charges due hereunder, or otherwise defaults with respect
to any provision of this Lease, Landlord may at its option apply or retain all
or any portion of the Deposit for the payment of any Rent or other charge in
default or the payment of any other sum to which Landlord may become obligated
by Tenant's default, or to compensate Landlord for any loss damage which
Landlord may suffer thereby. If Landlord so uses or applies all or any portion
of the Deposit, then within 10 days after demand therefor Tenant shall deposit
cash with Landlord in an amount sufficient to restore the Deposit to the full
amount thereof, and Tenant's failure to do so shall be a material breach of this
Lease. Landlord's application or retention of the Deposit shall not constitute a
waiver of Tenant's default to the extent that the deposit does not fully
compensate Landlord for all losses or damages incurred by Landlord in connection
with such default and shall not prejudice any other rights or remedies available
to Landlord under this Lease or by law.
Page 3
No security or guaranty which may now or hereafter be furnished Landlord for the
payment of the rent herein reserved or for performance by Tenant of the other
covenants or conditions of this Lease shall in any way be a bar or defense to
any action in unlawful detainer, or for the recovery of the premises, or to any
action which Landlord may at any time commence for a breach of any of the
covenants or conditions of this Lease.
9. USES PROHIBITED
Tenant shall not do or permit anything to be done in or about the premises nor
bring or keep anything therein which will in any way increase the rate of or
affect any fire or other insurance upon the building or any of its contents or
cause a cancellation of any insurance policy covering said building or contents.
Tenant shall not do or permit anything to be done in or about the premises which
will in any way obstruct or interfere with the rights of other tenants or
occupants of the building or injure or annoy them, or use or allow the premises
to be used for any residential, immoral, unlawful or objectionable purpose, nor
shall Tenant cause, maintain or permit any nuisance in, on or about the
premises. No cooking devices or other odor causing devices, loudspeakers or
other similar device, system or apparatus which can be heard or experienced
outside the premises shall, without the prior written approval of Landlord, be
used in or at the premises. Tenant shall not commit or suffer to be committed
any waste in or upon the premises.
10. COMPLIANCE WITH LAW
Tenant shall not use or permit anything to be done in or about the premises
which will in any way conflict with any law, statute, ordinance or governmental
rule, regulation or requirement now in force or which may hereafter be enacted
or promulgated. Tenant, at its sole cost and expense, shall promptly comply with
all laws, statutes, ordinances and governmental rules, regulations or
requirements now in force or which may hereafter be in force and with the
requirements of any board of fire underwriters or other similar body now or
hereafter constituted relating to or affecting the condition, use of occupancy
of the premises, excluding structural changes not related to or affected by
Tenant's improvements or acts. The judgment of any court of competent
jurisdiction or the admission of Tenant in an action against Tenant, whether
Landlord be a party thereto or not, that Tenant has violated any law, statute,
ordinance or governmental rule, regulation or requirement shall be conclusive of
that fact as between Landlord and Tenant. Further, Tenant shall it all times and
in all respects comply with all federal, state and local laws, ordinances and
regulations ["Hazardous Material Laws"] relating to hygiene, environmental
protection, or the presence, use generation, storage, transportation or disposal
of any toxic or hazardous substances, as the same may be amended from time to
time, including without limitation, obtaining any required permits or licenses,
and Tenant shall handle, treat, manage and dispose of any and all toxic or
hazardous substances in strict conformity with all manufacturers' instructions
and prudent business practices.
11. ALTERATIONS
Tenant shall not make or suffer to be made any alterations, additions or
improvements to or of the Premises or any part thereof without the written
consent of Landlord first had and obtained. Any alterations, additions, or
improvements to or of said premises, including without limitation any
partitions, immovable or otherwise, and all carpeting, shall at once become a
part of the realty and belong to Landlord. Movable furniture, equipment and
trade fixtures shall remain the property of Tenant. If Landlord consents to the
making of any alterations, additions or improvements to the premises by Tenant,
the same shall be made by Tenant at Tenant's sole cost and expense and any
contractor or person selected by Tenant to make the same must first be approved
of in writing by Landlord. Upon the expiration or sooner termination of the term
Tenant, upon demand by Landlord, at Tenant's sole cost and expense, forthwith
and with all due diligence shall remove any alterations, additions or
improvements made by Tenant designated by Landlord to be removed, and Tenant,
forthwith and with all due diligence, at its sole cost and expense, shall repair
any damage to the premises caused by such removal. Tenant's obligation to remove
any alterations, additions, improvements, fixtures and/or personal property and
to repair any damage from such removal shall survive the termination of this
Lease. Prior to or while approving any alterations, Landlord shall notify Tenant
in writing whether such alterations will have to be removed at the termination
of this Lease.
Construction of the alterations, additions, or improvements shall be completed
in accordance with drawings and specifications approved in advance in writing by
Landlord, shall be carried out in a good and workmanlike manner, and shall
comply with all applicable requirements of governmental authorities and such
additional conditions as Landlord may reasonably impose.
12. REPAIR
Page 4
By entry hereunder upon the commencement of the term hereof, Tenant accepts the
---
premises as being in good, sanitary order, condition and repair subject to the
"Punch List" items. Tenant, at Tenant's sole cost and expense, shall keep the
premises and every part thereof in good condition and repair, damage thereto by
fire, earthquake, act of God or the elements not caused by Tenant's negligent or
willful act excepted, Tenant hereby waiving all rights to make repairs at the
expense of the Landlord as provided by law, statute or ordinance now or
hereafter in effect. Upon the expiration or sooner termination of the term
hereof, Tenant shall surrender the premises to Landlord in the same condition as
when received, ordinary wear and tear and damage by fire, earthquake, act of God
or the elements excepted, unless caused by Tenant's negligent or willful act. It
is specifically understood and agreed that Landlord has no obligation and has
made no promises to alter, remodel, improve, repair, decorate or paint the
premises or any part thereof and that no representations respecting the
condition of the premises or the building have been made by Landlord to Tenant
except as specifically set forth in Exhibit A attached hereto. There shall be no
abatement of Rent and no liability to Landlord by reason of any injury or to
interference with Tenant's business arising from the making of any repairs or
performance of any maintenance obligations by the Landlord.
13. ABANDONMENT
Tenant shall not vacate or abandon the premises at any time during the term
hereof, and if Tenant shall abandon, vacate or surrender the premises or be
dispossessed by process of law, or otherwise, any personal property belonging to
Tenant and left on the premises shall be deemed to be abandoned, at the option
of Landlord.
14. LIENS
Tenant shall keep the premises and the building and the land upon which the
building is situated free from any liens arising out of any work performed,
materials furnished or obligations incurred by Tenant. Tenant shall in the event
of the filing of any such lien, post any bond required to release the premises
therefrom. Should Tenant fail to remove any such lien within five [5] business
days after notice to do so from Landlord, Landlord may, in addition to any other
remedies, record a bond pursuant to California Civil Code Section 3143 and all
amounts incurred by Landlord in so doing shall become immediately due and
payable by Tenant to Landlord as additional rent. Landlord shall have the right
to post and keep posted on the Premises any notices that may be provided by law
or which Landlord may deem to be proper for the protection of Landlord, the
Premises and the building from such liens.
15. ASSIGNMENT AND SUBLETTING
[a] Tenant shall not mortgage, pledge, hypothecate or encumber this Lease or
any interest therein. Tenant shall not assign this Lease or sublet or suffer any
other person [the agents and employees of Tenant excepted] to occupy or use the
premises, or any part thereof, or sublet any right or privilege appurtenant
thereto without the prior written consent of Landlord first had and obtained,
which consent may not be unreasonably withheld. Landlord's consent to one
assignment, subleasing or occupancy shall not be deemed to be a consent to any
subsequent assignment, subleasing or occupancy
[b] Provided further and notwithstanding anything herein before set forth: In
the event that at any time or from time to time during the term of this Lease,
Tenant desires to sublet all or any part of the Premises, Tenant shall notify
the Landlord in writing [the "Sublet Notice"] of the terms of the proposed
subletting, and the area so proposed to be sublet and shall give Landlord the
right to sublet from Tenant such space [the "Sublet Space"] on the same terms as
those contained in the Sublet Notice. Such option shall be exercisable by
Landlord in writing for a period of 15 days after receipt of the Sublet Notice.
--
If Landlord fails to exercise its option and Tenant desires to complete the
proposed sublease, Tenant shall deliver an executed copy of such sublease to
Landlord in order to obtain its consent as required in paragraph 15[a] above. If
Landlord consents to a sublease, then such sublease shall be subject to and made
upon the following terms:
[i] any such sublease shall be subject to the terms of this Lease and the
term thereof may not extend beyond the expiration of the term of this
Lease;
[ii] no subtenant shall have a right to further sublease its premises without
the prior written consent of the Landlord.
[iii] If Landlord fails to exercise such option, and Tenant fails to consummate
a sublease with a third party within 60 days after the expiration of
Landlord's option period on the same terms and conditions
Page 5
contained in the Sublet Notice, Tenant shall be required to deliver a new
Sublet Notice to Landlord and comply with the terms and conditions set
forth above before any further subletting shall be permitted.
[iv] Any additional rent over the rent specified in this Agreement received
from the Sublet space will be split 50%/50% between the Landlord and
Tenant after deduction of reasonable sublease expenses including real
estate leasing fees, Tenant improvements, rent abatement (if any on the
rent due to the Tenant from the subleasee to induce the subleasee to
Sublease the space) and legal expenses.
[c] Regardless of Landlord's consent, no subletting nor assignment shall
release Tenant of Tenant's obligation or alter the primary liability of Tenant
to pay rent and perform other obligations of Tenant under this lease.
[d] In no event shall Tenant assign this Lease or sublet the premises or any
portion thereof to any then, existing or prospective tenant of said building.
[e] Tenant shall pay Landlord's reasonable costs incurred in connection with
Tenant's request to assign this lease or sublet the premises, regardless whether
or not the Landlord consents to the proposed transfer.
[f] If Tenant is a corporation or a partnership, the transfer [as a
consequence of a single transaction or any number of separate transactions] of
fifty percent [50%] or more of the beneficial ownership interest of the voting
stock of Tenant issued and outstanding as of the date hereof or of the
partnership interests in Tenant, is the case may be, shall constitute an
assignment hereunder for which such consent is required. Further, any assignment
of this Lease or sublet of the Premises or any portion thereof to any
corporation which controls, is controlled by or is under common control with
Tenant, or to any corporation resulting from merger or consolidation with
Tenant, or to any person or entity which acquires all the assets as a going
concern of the business of Tenant that is being conducted on the Premises,
without the written consent of the Landlord shall be void, and, at the option of
Landlord, shall terminate this Lease. Such transfer shall not be subject to
Landlord's option under Section 15(b).
16. INDEMNIFICATION OF LANDLORD
Tenant agrees to indemnify and defend Landlord against and save Landlord
harmless from and against any and all loss, cost, liability, damage and expense,
including without limitation penalties, fines and reasonable attorneys fees and
costs, incurred in connection with or arising from any case whatsoever in, on or
about the Premises, including without limiting the generality of the foregoing:
[1] any breach by Tenant of the terms, covenants or conditions of this Lease or
provisions of this Lease, or [2] the use of occupancy or manner of the use or
occupancy of the Premises by Tenant or any other person or entity claiming
through or under Tenant including without limitation, the presence, use,
generation, storage, transportation or disposal of any toxic or hazardous
substances, or [3] the condition of the Premises or any occurrence or happening
on the Premises from any cause whatsoever, or [4] any acts, emissions or
negligence of Tenant or of Tenant's agents, contractors, employees, subtenants,
licensees, invitees or visitors or any such person or entity, in, on or about
the Premises or the Building, either prior to the commencement of, during, or
after the expiration of the term, including without limitation any acts,
emissions or negligence in the making or performing of any alterations. Tenant
further agrees to indemnify, defend and save harmless Landlord, Landlord's
agents and the lessors under, any ground or underlying leases, from and against
any and all loss, cost, liability, damage and expense, incurred in connection
with or arising from any claims by any persons by reason of injury to persons or
damage to property occasioned by any use, occupancy condition, occurrence,
happening, act, emission or negligence referred to in the preceding sentence. In
the event any action or proceeding is brought against Landlord for any claim
against which Tenant is obligated to indemnify Landlord hereunder, Tenant upon
notice from Landlord shall defend such action or proceeding at Tenant's sole
expense by counsel approved by Landlord, which approval shall not be
unreasonably withheld. The provisions of this Section 15 shall survive the
expiration or earlier termination of this lease.
17. INSURANCE
Tenant agrees to keep in force during file term hereof, at Tenant's expense,
public liability and property damage insurance with combined single limits in
the amount of not less than $2,000,000.00. Said policy shall name Landlord as an
additional insured, and shall insure Landlord's contingent liability as respects
acts, or omissions of Tenant, shall be issued by an insurance company licensed
to do business in the state where the premises are located; and shall provide
that said insurance shall not be canceled or amended unless thirty [30] days
prior written notice to Landlord is first given. Said policy or a certificate
thereof
Page 6
shall be delivered to Landlord by Tenant prior to the commencement of the term
and each renewal of such insurance. Tenant hereby waives all rights of
subrogation against Landlord to which any insurance carrier may at any time
become entitled under any policy of insurance carried by Tenant.
18. UTILITIES
Landlord shall furnish to the premises, during reasonable hours of generally
recognized business days, to be determined by Landlord, and subject to the rules
and regulations of the building, water and electricity suitable for the use of
the premises for general office purposes and heat required in Landlord's
judgement for the comfortable use and occupation of the premises for such
purposes, janitorial service, and elevator service. Landlord shall not be liable
for, and Tenant shall not be entitled to any abatement or reduction of rent by
reason of Landlord's failure to furnish any of the foregoing when such failure
or delay is caused by accident, breakage, repairs, strikes, lockouts or other
labor disturbances or labor disputes of any character, or is caused directly or
indirectly by the limitation, curtailment, rationing or restrictions on use of
water, electricity, gas or any other form of energy serving the premises or the
building, or by any other cause, similar or dissimilar, beyond the reasonable
control of Landlord. Landlord shall not be liable under any circumstances for
loss of business or injury to property, however occurring, through or in
connection with or incidental to failure to furnish any of the foregoing. Tenant
shall pay and provide for all services and utilities not furnished by Landlord.
Tenant will not, without the written consent of Landlord, use any apparatus or
device in the premises which will in any way increase the amount of electricity,
cooling capacity or water usually furnished or supplied for use of the premises
for general office purposes or connect with electric current, except through
existing electrical outlets in the premises, or water pipes, any apparatus or
device for the purpose of using electric current or water. If Tenant shall
require water or electric current in excess of that customarily furnished or
supplied to other tenants of the building for use of their premises for general
office purposes, Tenant shall first procure the consent of Landlord, which
Landlord may refuse, to the use thereof and Landlord may cause an electric
current or water meter to be installed in the premises so as to measure the
amount of excess electric current or water consumed by Tenant. The cost of any
such meter and of the installation, maintenance and repair thereof shall be paid
by Tenant and Tenant agrees to pay to Landlord promptly upon demand therefor the
cost of all such excess water and electric current consumed, as shown by said
meters, at the rates charged for such services by the local public utility
furnishing the same, plus any additional expense incurred in keeping account of
the excess electric current or water so consumed.
19. PERSONAL PROPERTY AND OTHER TAXES
Tenant shall pay, before delinquency, any and all taxes levied or assessed and
which become payable during the term hereof upon Tenant's equipment, furniture,
fixtures and other personal property located in the premises, including
carpeting installed by Tenant even though said carpeting has become a part of
the leased premises; and any and all taxes or increases therein levied or
assessed on Landlord or Tenant by virtue of alterations, additions or
improvements to the premises made by Tenant or Landlord at Tenant's request. In
the event said taxes are charged to or paid or payable by Landlord, Tenant,
forthwith upon demand therefore, shall reimburse Landlord for all of such taxes
paid by Landlord.
20. RULES AND REGULATIONS
Tenant shall faithfully observe and comply with the rules and regulations
printed on or annexed to this Lease and all modifications of and additions
thereto applicable to all tenants of the building from time to time Put into
effect by Landlord of which Tenant shall have notice. Landlord shall not be
responsible to Tenant for the nonperformance by any other tenant or occupant of
the building of any of said rules and regulations.
21. HOLDING OVER
If Tenant holds possession of the premises after the term of this lease, Tenant
shall, [at option of Landlord to be exercised by Landlord's giving written
notice to Tenant and not otherwise] become a Tenant from month to month upon the
terms and conditions herein specified, so far as applicable, at the lower of
$50,000 or 150% of the base rent for the first three months after Lease Term and
after a further three months after the Lease Term, this shall increase to 200%
of the base rental payable in advance, in lawful money, and shall continue to be
such Tenant until thirty [30] days after Tenant shall have given to Landlord or
Landlord shall have given to Tenant a written notice of intent to terminate such
monthly tenancy. Unless Landlord shall exercise the option hereby given him,
Tenant shall be a Tenant at sufferance only, whether or not Landlord shall
accept any rent from Tenant while Tenant is so holding over
Page 7
22. SUBORDINATION
This Lease shall be subject and subordinate it all times to all ground or
underlying leases which may now exist or hereafter be executed affecting the
building and/or the land upon which the building is situated and to the lien of
any mortgages or deeds of trust in any amount or amounts whatsoever now or
hereafter placed on or against said building and/or land or on or against the
Landlord's interest or estate therein or on or against any ground or underlying
lease without the necessity of having further instruments on the part of Tenant
to effectuate such subordination. Notwithstanding the foregoing, Tenant
covenants and agrees to execute and deliver, upon demand, such further
instruments evidencing such subordination of this Lease to such ground or
underlying leases and to the lien of any such mortgages or deeds of trust as may
be required by Landlord. Tenant hereby irrevocably appoints Landlord the
attorney in fact of Tenant to execute and deliver any such instrument or
instruments for or in the name of Tenant. In the event of termination of any
ground or underlying lease, or in the event of foreclosure or exercise of any
power of sale under any mortgage or deed of trust superior to this Lease or to
which this Lease is subject or subordinate, upon Tenant's attornment to the
Lessor under such ground or underlying lease or to the purchaser at any
foreclosure sale or site pursuant to the exercise of any power of sale under any
mortgage or deed of trust, this Lease shall not terminate, and Tenant shall
automatically be and become the Tenant of said Lessor under such ground or
underlying lease or to said purchasers whichever shall make demand therefore.
23. ENTRY BY LANDLORD AND FINANCIAL INSPECTION
Landlord reserves and shall at any reasonable time, have the right to enter the
premises to inspect the same, to supply janitor service and any other service to
be provided by Landlord to Tenant hereunder, to submit the premises to
prospective purchasers or tenants, to post notices of nonresponsibility, and to
alter, improve or repair the premises and any portion of the building without
abatement of rent and may for that purpose erect scaffolding and other necessary
structures where reasonably required by the character of the work to be
performed, always providing the entrance to the premises shall not be blocked
thereby and further providing that the business of Tenant shall not be
interfered with unreasonably. Tenant hereby waives any claim for damages for any
injury or inconvenience to or interference with Tenant's business, any loss of
occupancy of quiet enjoyment of the premises, and other loss occasioned by such
entry. For each of the aforesaid purposes, Landlord shall at all times have and
retain a key with which to unlock all of the doors, in, upon and about the
premises excluding Tenant's vaults and safes, and Landlord shall have the right
to use any and all means which Landlord may deem proper to open said doors in an
emergency in order to obtain entry to the premises, and any entry to the
premises obtained by Landlord by any of said means, or otherwise, shall not
hinder any circumstances be construed or deemed to be a forcible or unlawful
entry into or a detainer of the premises or an eviction of Tenant from the
premises or any portion thereof.
Upon prior notice to Tenant, Landlord shall be permitted to review the financial
statements (Income Statement, FAS 95 Cash Flow Statement and Balance Sheet) of
Tenant prepared in accordance with General Accepted Accounting Practices
("GAAP"), at the offices of Tenant. Such review will be permitted at least once
every three months.
24. INSOLVENCY OR BANKRUPTCY
Either [a] the appointment of a receiver to take possession of all or
substantially all of the assets of Tenant, [b] an assignment by Tenant for the
benefit of creditors, or [c] any action taken or suffered by Tenant under any
insolvency, bankruptcy or reorganization act shall constitute a breach of this
Lease by Tenant. Upon the happening of any such event this Lease shall terminate
five [5] days after written notice of termination from Landlord to Tenant. In no
event shall this Lease be assigned or assignable by reason of any voluntary or
involuntary bankruptcy proceedings nor shall any rights or privileges hereunder
be an asset of Tenant in any bankruptcy, insolvency or reorganization
proceedings.
25. DEFAULT
In the event of any breach or default of Lease by Tenant, then Landlord, besides
any other rights and remedies of Landlord at law or equity, shall have the right
either to terminate Tenant's right to possession of the premises and thereby
terminate this Lease or to have this Lease continue in full force and effect
with Tenant at all times having the right to possession of the premises. Such
property so removed may be stored in a public warehouse or elsewhere at the cost
and for the account of Tenant. Upon such termination Landlord, in addition to
any other rights and remedies [including rights and remedies under subparagraphs
[1], [2], and [4] of subdivision [a] of Section 1951.2 of the California Civil
Code of any amendment thereto], shall be entitled to recover from Tenant the
worth at the time of the award of the amount by which
Page 8
the unpaid rent for the balance of the term after the time of award exceeds the
amount of such rental loss that the Tenant proves could be reasonably avoided.
The worth at the time of award of the amount referred to in subparagraphs [1]
and [2] of subdivision [a] of Section 1951.2 of the California Civil Code shall
be computed by allowing interest at the maximum rate allowed by law. The worth
at the time of the award of the amount referred to in subparagraph [3] of
subdivision [a] of Section 1951.2 of the California Civil Code shall be computed
by discounting such amount at the discount rate of the Federal Reserve Bank of
San Francisco at the time of the award plus 10%.
Any proof by Tenant of the amount of rental loss that could be reasonably
avoided shall be made in the following manner: Landlord and Tenant shall each
select a licensed real estate broker in the business of renting property of the
same type and use as the premises and in the same geographic vicinity and such
two real estate brokers shall select a third licensed real estate broker and the
three licensed real estate brokers so selected shall determine the amount of
rental loss that could be reasonably avoided for the balance of the term of this
Lease after the time of award. The decision of the majority of said licensed
real estate brokers shall be final and binding upon the parties hereto.
Should Landlord, following any breach or default of this Lease by Tenant, elect
to keep this Lease in full force and effect, with Tenant retaining the right to
possession of the premises [notwithstanding the fact the Tenant may have
abandoned the leased premises], then Landlord, besides the rights and remedies
specified in Section 1951.4 of the California Civil Code "[lessor may continue
lease in effect after lessee's breach and abandonment and recover rent as it
becomes due, if lessee has right to sublet or assign, subject only to reasonable
limitations]" and all other rights and remedies Landlord may have at law or
equity, shall have the right to enforce all of Landlord's rights and remedies
under this Lease. Notwithstanding any such election to have this Lease remain in
full force and effect, Landlord may at any time thereafter elect to terminate
Tenant's right to possession of said premises and thereby terminate this Lease
for any previous breach or default which remains uncured, or for any subsequent
breach or default.
26. DESTRUCTION OR DAMAGE
[a] In the event the premises or a portion of the Building is damaged by fire
or other insured casualty, Landlord shall diligently repair the same to the
extent possible with the insurance proceeds received by Landlord, subject to the
provisions of this section hereinafter set forth, if such repairs can in
Landlord's opinion be made within 90 days after issuance of a building permit
therefor under the laws and regulations of federal, state and local governmental
authorities having jurisdiction thereof. In such event this Lease shall remain
in full force and effect except that if such damage is not the result of the
negligence or willful misconduct of Tenant or Tenant's agents, contractors,
employees, subtenants, licensees, invitees or visitors, all abatement of basic
rent shall be allowed Tenant for such part of the Premises as shall be rendered
unusable by Tenant in the conduct of its business during the time such part is
so unusable. Notwithstanding the foregoing, if such damage shall occur during
the final year of the term of this Lease, Landlord shall not be obligated to
repair such damage, but may instead elect to terminate this Lease upon written
notice given to Tenant within 30 days after the date of such fire or other
casualty, in which event this Lease shall terminate as of the termination date
specified in Landlord's notice.
[b] If such repairs cannot in Landlord's opinion be made within 90 days after
issuance of a building permit therefor or if such damage is uninsured, Landlord
may elect upon notice to Tenant given 60 days after the date of such fire or
other casualty to [i] repair or restore such damage, in which event this Lease
shall continue in full force and effect, but basic rent shall be partially
abated as hereinabove in this section provided or [ii] terminate this Lease in
which event this Lease shall terminate as of the termination date specified in
Landlord's notice.
[c] A total destruction of the Building automatically shall terminate this
lease. Landlord and Tenant acknowledge that this Lease constitutes the entire
agreement of the parties regarding events of damage or destruction, and Tenant
waives the provisions of California Civil Code Sections 1932[2] and 1933[4] and
any similar statute now or hereafter in force.
[d] If the Premises are to be repaired under this section, Landlord shall
repair at its cost any injury or damage to the Building itself and the initial
improvements made by Landlord pursuant to Exhibit A. Tenant shall pay the cost
of repairing or replacing all other improvements in the Premises and Tenant's
trade fixtures, furnishings, equipment and other personal property.
27. EMINENT DOMAIN
Page 9
If all or any part of the premises shall be taken or appropriated by any public
or quasi-public authority under the power of eminent domain, and such taking
will substantially impair Tenant's use of the premises for more than 90 days,
either party hereto shall have the right, at its option, to terminate this
Lease. If all or any part of the building of which the premises are a part shall
be taken or appropriated by any public or quasi-public authority under any power
of eminent domain, Landlord may terminate this Lease. In either of such events,
Landlord shall be entitled to and Tenant upon demand of Landlord shall assign to
Landlord any rights of Tenant to any and all income, rent, award, or any
interest herein whatsoever which may be paid or made in connection with such
public or quasi-public use or purpose, and Tenant shall have no claim against
Landlord or the condemnor for the value of any unexpired term of this Lease. If
a part of the premises shall be so taken or appropriated and neither party
hereto shall elect to terminate this Lease, the rent thereafter to be paid shall
be equitably reduced.
28. PLATS AND RIDERS
Clauses, plats and riders, if any, signed by Landlord and Tenant and endorsed on
or affixed to this Lease are a part hereof, and in the event of variation or
discrepancy the duplicate original hereof, including such clauses, plats and
riders, if any, held by Landlord shall control.
29. SALE BY LANDLORD
In the event the original Landlord hereunder, or any successor owner of the
building, shall sell or convey the Building, all liabilities and obligations on
the part of the original Landlord, or such successor owner, under this Lease,
accruing thereafter shall terminate, and thereupon all such liabilities and
obligations shall be binding upon the new owner. Tenant agrees to attorn to such
new owner. If any security be given by Tenant to secure the faithful performance
of all or any of the covenants of this Lease on the part of Tenant, Landlord may
transfer and/or deliver the security, to the successor in interest of Landlord,
and thereupon Landlord shall be discharged from any further liability in
reference thereto. Except as set forth in this paragraph 28, this Lease shall
not be affected by any such sale or conveyance.
30. ESTOPPEL CERTIFICATES
At any time and from time to time, upon not more than ten [10] days prior
request by Landlord, Tenant shall execute, acknowledge and deliver to Landlord a
statement certifying the date of commencement of this Lease, stating that this
Lease is unmodified and in full force and effect [or if there have been
modifications, that this Lease is in full force and effect as modified and the
date and nature of such modifications] and the dates to which the rent has been
paid, and setting forth such other matters as may reasonably be requested by
Landlord. Landlord and Tenant intend that any such statement delivered pursuant
to this paragraph may be relied upon by any mortgagee or the beneficiary of any
Deed of Trust or by any purchaser or prospective purchaser of the building.
Tenant hereby irrevocably appoints Landlord as its agent and attorney-in-fact to
execute, acknowledge and deliver any such certificate in the name of and on
behalf of Tenant, in the event that Tenant fails to so execute, acknowledge and
deliver any such certificate within 10 days after receipt thereof.
31. RIGHT OF LANDLORD TO PERFORM
All covenants and agreements to be kept or performed by Tenant under any of the
terms of this Lease shall be performed by Tenant at Tenant's sole cost and
expense and without any abatement of rent. If Tenant shall fail to pay any sum
of money, other than rent, required to be paid by it hereunder or shall fail to
perform any other act on its part to be performed hereunder, and such failure
shall continue for ten [10] days after notice thereof by Landlord, Landlord may,
but shall not be obligated to, and without waiving any default of Tenant or
releasing Tenant from any obligations of Tenant hereunder, make any such payment
or perform any such other act on Tenant's part to be made or performed as in
this Lease provided. All sums so paid by the Landlord and all necessary
incidental costs, together with interest thereon in the rate of ten percent
[10%] per annum from the date of such payment by the Landlord, shall be paid to
Landlord forthwith on demand, and Landlord shall have [in addition to any other
right or remedy of Landlord] the same rights and remedies in the event of
nonpayment thereof by Tenant as in the case of default by Tenant in payment of
rent.
32. ATTORNEY FEES
If as a result of any breach or default on the part of Tenant under this Lease,
Landlord uses the services of any attorney in order to secure compliance with
this Lease, Tenant shall reimburse Landlord upon demand as additional rent for
any and all attorneys' fees and expenses incurred by Landlord, whether or not
formal legal proceedings are instituted. Should either party bring action
against the other party, by reason of or
Page 10
alleging the failure of the other party to comply with any or all of its
obligations hereunder, whether for declaratory or other relief, then the party
which prevails in such action shall be entitled to its reasonable attorneys'
fees and expenses related to such action, in addition to all other recovery or
relief. A party shall be deemed to have prevailed in any such action [without
limiting the generality of the foregoing] if such action is dismissed upon the
payment by the other party of the sums allegedly due or the performance of
obligations allegedly not complied with, or if such party obtains substantially
the relief sought by it in the action, irrespective of whether such action is
prosecuted to judgment. In addition, if either party to this Lease becomes a
party to or is involved in any way in any action concerning this Lease or the
Premises by reason in whole or in part of any act, neglect, fault or emission of
any duty by the other party, its employees or contractors, the party subjected
to said involvement shall be entitled to reimbursement for any and all
reasonable attorneys' fees and costs.
33. SURRENDER OF PREMISES
The voluntary or other surrender of this Lease by Tenant or mutual cancellation
thereof shall not work a merger and, at the option of Landlord, shall terminate
all or any existing subleases or subtenancies, or at the option of Landlord, may
operate is iii assignment to Landlord of any or all such subleases or
subtenancies.
34. WAIVER
The waiver by Landlord or Tenant of performance of any term, covenant or
condition herein contained shall not be deemed to be a waiver of such term,
covenant or condition or any subsequent breach of the same or any other term,
covenant or condition herein contained. The subsequent acceptance of rent
hereunder by Landlord shall not be deemed to be a waiver of any preceding breach
by Tenant of any term, covenant or condition of this Lease, other than the
failure of Tenant to pay the particular rent so accepted, regardless of
Landlord's knowledge of such preceding breach at the time of acceptance of such
rent.
35. NOTICES
All notices and demands which may or are required to be given by either party to
the other hereunder shall be in writing. All notices and demands by Landlord to
Tenant shall be delivered personally or sent by United States certified or
registered mail, postage prepaid, addressed to Tenant at the premises, or to
such other place as Tenant may from time to time by like notice designate. All
notices and demands by Tenant to Landlord shall be sent by United States
certified or registered mail, postage prepaid, addressed to Landlord at 00 Xxxxx
Xxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 or to such other place as Landlord may
from time to time by like notice designate.
36. NOTICE OF SURRENDER
At least ninety [90] days before the last day of the term hereof, Tenant shall
give to Landlord a written notice of intention to surrender the premises on that
date, but nothing contained herein or any failure to give such notice shall be
construed as an extension of the term hereof or as consent of Landlord to any
holding over by Tenant,
37. BROKERS
Tenant represents that it has not incurred any obligation to any broker in
connection with this lease, other than Landlord's broker Xxxxxxx Xxxxxxxx
Limited and Tenant's broker HC&M Commercial Properties, Inc. and Tenant shall
hold Landlord harmless from and against any and all liability, loss, damage,
expense, claim, action, suit or obligation arising out of or relating to a
breach by tenant of this representation.
38. DEFINED TERMS AND MARGINAL HEADINGS
The words "Landlord" and "Tenant", as used herein shall include plural as well
as the singular words used in masculine gender include the feminine and neuter.
If there be more than one Tenant, the obligations hereunder imposed upon Tenant
shall be joint and several. The marginal headings and titles to the paragraphs
of the Lease are not a part of this Lease and shall have no effect upon the
construction or interpretation of any part hereof.
39. TIME AND APPLICABLE LAW
Time is of the essence of this Lease and each and all of its provisions. This
Lease shall in all respects be governed by the laws of the state in which the
premises are located.
40. SUCCESSORS
Page 11
Subject to the provisions of Paragraph 15 hereof, the covenants and conditions
herein contained successors shall be binding upon and inure to the benefits of
the heirs, successors, executors, administrators and assigns of the parties
hereto.
41. ENTIRE AGREEMENT
This Lease constitutes the entire agreement between Landlord and Tenant and no
promises or representations, express or implied, either written or oral, not
herein set forth shall be binding upon or inure to the benefit of Landlord or
Tenant. This Lease shall not be modified by any oral agreement, either express
or implied, and all modifications hereof shall be in writing and signed by both
Landlord and Xxxxxx,
00. NO DISCRIMINATION
Tenant agrees for Tenant and Tenant's heirs, executors, administrators,
successors and assigns and all persons claiming under or through Tenant, and
this Lease is made and accepted upon the following conditions; that there shall
be no discrimination against or segregation of any person or group of persons on
account of race, color, creed, sex, religion, martial status, ancestry or
national origin [whether in the use, occupancy, subleasing, transferring, tenure
or enjoyment of the Premises or otherwise] nor shall Tenant or any person
claiming through or under Tenant establish or permit any such practice or
practices of discrimination or segregation with reference to or arising out of
the use or occupancy of the Premises by Tenant or any person claiming through or
under Tenant.
43. ADDITIONAL PROVISIONS
The exhibits and addenda listed below are incorporated by reference in this
lease.
IN WITNESS WHEREOF Landlord and Tenant have executed this
Lease the day and year first above written.
By /s/ Xxxx Xxxxxx /s/ Xxxxxx Xxxxxxx
___________________________ _______________________________
___________________________ _______________________________
___________________________ _______________________________
Landlord Tenant
Date May 4, 1998 Date May 4, 1998
___________________________ _______________________________
Page 12
SECURITY AGREEMENT IN ANTICIPATION OF SIGNING LEASE FOR 000 XXXXXX XXXXXX
LookSmart, Ltd. and 000 Xxxxxx Xxxxxx, LLC ("LLC") intend to enter into a lease
for 000 Xxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 substantially similar to
the attached draft lease provided by LLC to LookSmart, Ltd. on April 29, 1998
("Lease Agreement").
As consideration for agreeing not to lease 000 Xxxxxx Xxxxxx to another party
prior to May 6, 1998, LookSmart, Ltd. agrees to provide LLC the three month
deposit of $71,659.01 specified in the Lease Agreement. This deposit will be
held by Xxxxx Xxxxxxx until the later of the Lease Agreement is signed, or May
6, 1998. If LookSmart, Ltd. has not signed the Lease Agreement by May 6, 1998,
then LookSmart, Ltd. agrees to give LLC as consideration for agreeing not to
sign a lease with another party during this period, $23,886.34 for the time
period from today to May 6, 1998.
/s/ Xxxx Xxxxxx /s/ Xxxxxx Xxxxxxx
Xxxx Xxxxxx Xxxxxx Xxxxxxx
487 Xxxxxx Street, LLC LookSmart, Ltd.
Dated: 4/30/98 Dated: 4/30/98
Attachment
