EXHIBIT 10.3
OFFICE LEASE
BETWEEN
PROSPECT FARMS,
a California limited partnership ("LESSOR")
AND
XXXXXX SOFTWARE INTERNATIONAL, INC.
a Delaware corporation ("LESSEE")
TABLE OF CONTENTS
Page
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1. Description of Demised Premises...................................... 1
2. Term of Lease........................................................ 1
3. Rent................................................................. 2
A. Base Monthly Rental.......................................... 2
B. Lessee's Share of Property Taxes............................. 3
C. Lessee's Share of Operating Expenses......................... 4
D. Late Charge.................................................. 5
E. Security Deposit............................................. 5
4. Use of Premises...................................................... 6
5. Alterations, Mechanics' Liens........................................ 6
6. Waste, Nuisance...................................................... 7
7. Compliance with Law.................................................. 7
8. Insurance Hazards.................................................... 7
9. Indemnification, Insurance........................................... 8
10. Signs................................................................ 9
11. Utilities............................................................ 9
12. Personal Property Taxes.............................................. 9
13. Work to be Performed by Lessor Prior to Commencement of Term......... 9
14. Restoration of the Premises.......................................... 10
15. Repairs and Maintenance by Lessor.................................... 10
16. Repairs and Maintenance by Lessee.................................... 10
17. Entry by Lessor...................................................... 10
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18. Estoppel Certificates................................................ 11
19. Removal of Trade Fixtures of Lessee at End of Term................... 11
20. Surrender of Lease................................................... 11
21. Holding Over......................................................... 11
22. Grace Period......................................................... 11
23. Remedies of Lessor Upon Default...................................... 12
24. Attorneys' Fees on Default........................................... 13
25. Insolvency........................................................... 14
26. Assignment or Subletting............................................. 14
27. Transfer by Lessor - Release From Liability.......................... 15
28. Damage to or Destruction of Premises................................. 16
29. Condemnation......................................................... 16
30. Subordination........................................................ 18
31. Effect of Exercise of or Failure to Exercise Privilege by a Party.... 19
32. Waiver............................................................... 19
33. Notices.............................................................. 19
34. Representations...................................................... 20
35. Captions............................................................. 20
36. Successors and Assigns............................................... 20
37. California Law....................................................... 20
38. Severability......................................................... 20
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39. Authority............................................................ 20
40. Tenant Improvement Work.............................................. 20
41. Right of First Negotiation........................................... 21
42. Quiet Enjoyment...................................................... 21
43. Common Areas......................................................... 21
44. Hazardous Materials.................................................. 21
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000 XXXXXXX XXXXXX
OFFICE LEASE
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THIS LEASE is executed in San Francisco, California, as of September
1, 1995, between PROSPECT FARMS, a California limited partnership ("Lessor") and
XXXXXX SOFTWARE INTERNATIONAL, Inc., a Delaware corporation ("Lessee").
IT IS AGREED between the parties hereto as follows:
1. Description of Demised Premises. Lessor hereby leases to Lessee, and
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Lessee hires from Lessor, under the terms and conditions hereinafter set forth,
the Second, Third and Fourth floors of the building located at 000 Xxxxxxx
Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx, consisting of approximately 24,975 rentable
square feet, and more particularly shown on Exhibit A, attached hereto ("demised
premises" or "premises"). Any square footage stated above is approximate only
and in the event the actual square footage shall be greater or less than the
amounts stated, no rental or other adjustments shall be made between the
parties.
2. Term of Lease. With regard to the premises leased on the Third
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and Fourth floor, the term of this lease shall commence upon the substantial
completion by Lessor of the tenant improvements it is constructing therein, as
described in paragraph 40 hereof. With regard to the premises leased on the
Second floor, the term of this lease shall commence on the later of (a) January
1, 1996 or (b) the substantial completion by Lessor of the tenant improvements
it is constructing therein; provided, however, in the event Lessee accepts
possession thereof prior thereto, the commencement date shall occur on the date
possession is accepted. Said lease shall terminate on the day before the 60th
month anniversary of the Second floor commencement date.
Lessee shall promptly respond to any Lessor request and/or requirement
consistent with paragraph 40 hereof so that the tenant improvements Lessor is
constructing may be constructed with a target date of November 6, 1995 for the
Fourth floor, December 1, 1995 for the Third floor, and January 1, 1996 for the
Second floor.
In the event the commencement date for the Third and Fourth floors has
not occurred on or before February 1, 1996, for reasons not attributable to
Lessee, or the commencement date for the Second floor has not occurred on or
before April 1, 1996, for reasons not attributable to Lessee, the date Lessee is
otherwise obligated to commence payment of base monthly rental shall be delayed
by one half of one day for each day that the term commencement date is delayed
beyond March 1, 1996 with respect to the Third and Fourth floors and April 1,
1996 with respect to the Second
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floor. In addition, in the event the commencement date for the Third and Fourth
floors has not occurred on or before June 1, 1996, for reasons not attributable
to Lessee, or the commencement date for the Second floor has not occurred on or
before August 1, 1996, for reasons not attributable to Lessee, Lessee may elect
to terminate this lease with respect to the portion of the premises for which
the term has not commenced and, in such event, Lessee shall be refunded any
payments made with respect thereto.
As used herein, "substantial completion" shall mean (i) Lessor has
substantially completed the tenant improvements in accordance with Paragraph 40
of this lease, (ii) Lessor has delivered legal possession of the premises to
Lessee, and (iii) Lessor has obtained all approvals and permits from the
appropriate governmental authorities required for the legal occupancy of the
premises.
So long as such access does not interfere with or delay Lessor's
construction of the tenant improvements it is obligated to construct hereunder,
Lessee shall have reasonable rights of access to the premises prior to the
commencement date for the purpose of installing its equipment, data,
telecommunications systems and trade fixtures. Such access shall be subject to
all the terms and conditions of this lease except for the obligation to pay
rent.
3. Rent.
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A. Base Monthly Rental. Throughout the term of the lease, Lessee
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agrees to pay to Lessor, without deduction or offset, at such place or places as
may be designated from time to time by Lessor, the following base monthly rental
for the premises:
Second Floor: $11,793.75 per month
Third Floor: $12,140.63 per month
Fourth Floor: $11,446.88 per month
Said base rental shall be payable in monthly installments, in advance on the
first day of each and every month. All base monthly rental and other payments
due hereunder shall be equitably prorated to reflect the actual commencement
date and termination date of the lease term.
Upon Lessee's execution of this lease, Lessee shall deliver to Lessor
the sum of $23,587.51 as advance payment of base monthly rental, to be applied
against the first month's rent due hereunder for the Third and Fourth floors.
Sixty (60) days after Lessee's execution of this lease, Lessee shall deliver to
Lessor the additional sum of $11,793.75, as advance payment of base monthly
rental, to be applied against the first month's rent due hereunder for the
Second floor.
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B. Lessee's Share of Property Taxes. Lessee shall pay to Lessor, as
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additional rent, 50% of any increase over the real property taxes levied for the
1995-1996 tax year against the real property and improvements of which the
premises are a part, (Assessor's Block #174, Lot #4) which payment, if any,
shall be pro-rated on a monthly basis for any partial lease year following the
1995-1996 tax year. Payment of additional rental under this paragraph shall be
made in two equal installments, on the first day of November and the first day
of March of each year following the 1995-1996 tax year.
In addition thereto, if during the term of this lease an assessment,
whether general or special, is levied against the aforesaid real property and
improvements of which the premises are a part, then Lessee shall pay as
additional rental, a proportionate share of any increase over the assessments
levied against the aforesaid real property and improvements in the 1995-1996 tax
year. The proportionate share of such assessment payable by Lessee (whether
Lessor elects to make payment in annual installments or in a lump sum) shall be
50% ("Lessee's share" or "its share"). Lessee shall pay one-twelfth (1/12) of
its share of such assessment on the first day of each and every month of the
term of this lease, commencing with the month in which the first installment of
such assessment is due and payable (or would have become due and payable if
Lessor elected to pay such assessment in a lump sum).
The parties recognize that during the term of this lease or any
extension thereof the present real property tax may be wholly or partly replaced
or supplemented by another form of tax. In such event, Lessee shall further pay
its share (of any increase over the real property taxes levied for the 1995-1996
tax year) of any such tax, levy or assessment (other than federal, state or city
and county net income taxes or estate, gift or other similar taxes) which, now
or in the future and whether or not now customary or within the contemplation of
the parties hereto, may be charged to Lessor and is: (i) levied upon, allocable
to, or measured by the rental payable hereunder; (ii) levied upon or with
respect to the possession, leasing, operation, management or occupancy by Lessee
of the premises or any portion thereof; or (iii) levied upon or measured by the
value of Lessee's personal property or leasehold improvements.
Notwithstanding the foregoing, Lessee shall not be required to pay any
portion of any tax or assessment expense (i) in excess of the amount which would
be payable if such tax or assessment expense were paid in installments over the
longest possible term; (ii) imposed on land and improvements other than on or
related to the assessor's parcel described above; (iii) attributable to
inheritance transfer, franchise or state taxes; (iv) occasioned by or relating
to a voluntary or involuntary change of ownership or other conveyance of the
premises or (v) attributable to
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improvements or alterations by Lessor or other tenants in the building that are
not usable by or beneficial to Lessee; it being understood and agreed, however,
that Lessee shall pay for any tax or assessment expense solely attributable to
improvements or alterations made to the demised premises.
C. Lessee's Share of Operating Expenses. During the entire term
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hereof, Lessee shall pay to Lessor, as additional rent, 60% of any increase in
the cost of operating and maintaining the building of which the premises are a
part over the costs incurred for the calendar year 1996; including the following
costs by way of illustration: water and sewer charges, insurance premiums,
utilities (other than individually metered utilities), janitorial services,
labor, air conditioning and heating maintenance, supplies, materials, equipment,
tools, maintenance costs and upkeep of common areas. Payment of the additional
rental under this paragraph shall be made in monthly installments on the same
day that base monthly rental is due hereunder, based upon Lessor's reasonable
estimate of Lessee's share of any increase in such operating expenses over the
costs incurred for the calendar year 1996. Lessor shall deliver to Lessee,
within 120 days after the expiration of each calendar year, a detailed statement
showing the actual operating expenses incurred during the preceding calendar
year. If Lessee's payments during such preceding calendar year exceed Lessee's
share as indicated on such statement, Lessor shall refund the amount of such
overage within thirty (30) days after Lessor's delivery of the statement to
Lessee. If Lessee's payments during such preceding calendar year were less than
Lessee's share as indicated on such statement, Lessee shall pay to Lessor the
amount of the deficiency within thirty (30) days after Lessor's delivery of the
statement to Lessee. Within thirty (30) days after receipt by Lessee of Lessor's
statement of operating expenses, Lessee shall have the right to inspect the
books of Lessor for the purpose of verifying the information contained in the
statement. Operating expenses shall be adjusted to reflect a 95% occupancy of
the building of which the premises are a part during any periods in which the
building is not at least 95% occupied.
Notwithstanding anything in this lease to the contrary, in no event
shall any portion of the following be included as operating expenses: property
taxes, costs of tenant improvements, real estate brokers commissions, costs
occasioned by fire or other casualty, or by the exercise of the power of eminent
domain, costs which could properly be capitalized under generally accepted
accounting principles to the extent that Lessee's share of the total cost of
such capital item exceeds the annual amortized cost of the item based on its
useful life determined in accordance with generally accepted accounting
principles, costs for which Lessor has a right of reimbursement from others,
costs which Lessee pays directly to a third person, costs incurred in connection
with negotiations or disputes with other occupants of the building, interest
charges and fees incurred on debt payments on mortgages, rent under ground
leases, costs occasioned by the act, omission or violation of law by Lessor, any
other occupant of the building, or their respective agents, employees or
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contractors, costs to correct any construction defect in the premises or the
building, costs for insurance in excess of Lessor's current coverage unless such
costs are required by law, necessitated by reason of increased replacement
costs, or necessitated solely because of Lessee's particular use of the
premises, increases in insurance costs caused by the activities of other
occupants of the building, insurance deductible and/or co-insurance payments,
costs arising from the violation by Lessor or any occupant of the building
(other than Lessee) of the terms and conditions of any lease or other agreement,
depreciation, amortization or other expense reserves, costs incurred in
connection with presence of any hazardous materials (except to the extent the
cost is caused by the release or emission or the hazardous materials in question
by Lessee in violation of law), any fee, profit or compensation retained by
Lessor or its affiliates for the management of the building in excess of the
management currently charged by Lessor or otherwise usual and customary.
D. Late Charge. In the event base monthly rent is not paid within
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five (5) days of the applicable due date, and other sums due hereunder are not
paid within the time period specified hereunder or five (5) days after the date
Lessee receives an invoice therefor, whichever date occurs later, Lessee shall
pay to Lessor a late fee equal to 5% of the amount due. In addition, Lessee
shall pay interest on any such amounts, with interest accruing from the date due
to the date paid, at 10% per annum.
E. Security Deposit. Lessee shall pay to Lessor upon the execution of
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this lease as security for the faithful performance by Lessee of all of the
terms and conditions of this lease to be kept and performed by Lessee during the
term hereof a sum equal to two months Base Monthly Rental. Said sum shall be
held by Lessor and is herein called the "security deposit". Unless specifically
required by law, such security deposit shall not be considered to be held in
trust and Lessor shall not be required to segregate the security deposit or to
pay interest or any other return on the security deposit Lessor shall have the
fight {but no obligation so to do) at any time or times to apply the security
deposit, or any portion thereof, to any rent, additional rent, or other
obligation of Lessee hereunder. If Lessor elects to make such application,
Lessor shall notify Lessee in writing of the nature and amount thereof and
Lessee shall thereupon be obligated to deposit with Lessor an amount sufficient
to return the security deposit to an amount equal to the full amount specified
in the first sentence of this paragraph. If Lessee fails to do so within five
(5) days after Lessor has given such notice, Lessor at its option may resort to
any or all remedies available to it for nonpayment of rent. Following the
termination of the term of this lease, or, if Lessee has held over beyond such
termination, following the end of any period Lessee has so held over, provided
Lessee has vacated the premises, Lessor shall return said security deposit to
Lessee, after deducting any amounts therefrom necessary to cure any defaults by
Lessee; provided, however, any such return shall not be construed as an
admission by Lessor that Lessee has performed all of its obligations hereunder.
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Notwithstanding the foregoing, but provided Lessee has paid its rent
and other sums due under this lease in a prompt and timely manner and further
provided Lessee is not otherwise in default under the terms and conditions of
this lease, Lessor shall refund to Lessee one-half of the security deposit at
the end of the thirtieth month after the Second floor commencement date.
4. Use of Premises. The demised premises are leased to Lessee for the
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following purpose or purposes:
General office purposes, including, without limitation, development,
sales, management, administration, and other legal related uses.
Lessee shall not use, or permit said premises or any part thereof, to
be used for any purpose or purposes other than the purpose or purposes for which
the said premises are hereby leased.
5. Alterations, Mechanics' Liens. Lessee shall not make any alterations
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to the demised premises, or any part thereof (excepting normal office
decorations and the installation or removal of Lessee's trade fixtures,
furniture, equipment and other personal property), without the written consent
of Lessor first being had and obtained. In addition, in no event shall Lessee
make any alterations to the demised premises, or any part thereof, which
alterations would necessitate expenditures or work by Lessor, or which would
require Lessor to bring the demised premises or other portions of the building
in which the demised premises are located into compliance with any governmental
codes, laws, rules, regulations or ordinances.
Any additions to, or alterations of, the demised premises, except
furniture, trade fixtures, equipment and other personal property, shall become
at once a part of the realty and belong to Lessor. Lessee shall keep the demised
premises and the property in which the demised premises are situated free from
any liens arising out of any work performed, material furnished, or obligations
incurred by Lessee. Lessee agrees that if it shall make any alterations or
additions to the demised premises, it will not take such action until five (5)
days after the giving of Lessor notice and/or after receipt by it of the written
consent of Lessor, if required by this paragraph, in order that Lessor may post
appropriate notices to avoid any possible liability with respect to mechanics'
liens or other such claims. Lessee shall at all times permit such notices to be
posted and to remain posted until the completion and acceptance of such work.
Lessee's trade fixture, furniture, equipment and other personal
property installed in the premises ("Lessee's property") shall at all times be
and remain Lessee's property. Except for items which cannot be removed without
structural injury to the
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premises, at any time Lessee may remove Lessee's property from the premises,
provided that Lessee repairs all damage caused by such removal. Lessor shall
have no lien or other interest whatsoever in any item of Lessee's property.
Upon request, Lessor shall advise Lessee in writing whether it
reserves the right to require Lessee to remove any alterations from the premises
upon the termination of this lease.
Subject to Lessor's review and approval of all plans therefor, Lessor
hereby consents to the installation by Lessee of its network and communications
cabling and its security system.
6. Waste, Nuisance. Lessee shall not commit any waste upon the demised
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premises, or any nuisance (public or private) or other act or thing of any kind
whatsoever, which may disturb the quiet enjoyment or cause unreasonable
annoyance of any other tenant in the building in which the demised premises may
be located.
7. Compliance with Law. Except as otherwise set forth in Paragraph 40
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hereof with respect to the initial buildout of the premises, Lessee shall, at
its sole cost and expense, comply with all requirements of all municipal, state,
and federal authorities now in force, or which may hereafter be in force,
pertaining to the demised premises, and/or to Lessee's use or alteration
thereof. Lessee shall additionally be responsible for complying with such rules,
regulations, and requirements affecting areas outside of the demised premises to
the extent such compliance is caused by or results from Lessee's particular use
or alteration of its premises. However, notwithstanding the foregoing, Lessee
shall not be required to construct or to pay the cost of complying with any
covenants, conditions, restrictions and encumbrances ("CC&R's), any underwriter
or insurance organization requirements, or any laws requiring construction of
improvements in the premises which are properly capitalized under generally
accepted accounting principles, unless such compliance is necessitated solely
because of Lessee's particular use of or alteration to the premises.
8. Insurance Hazards. Lessee shall promptly reimburse Lessor for any
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increase in the existing rate of insurance upon the building in which the
demised premises may be located by reason of Lessee's particular use of the
premises. Lessee shall not sell, or permit to be kept, used, or sold, in or
about the premises, any article which may be prohibited by Lessor's fire
insurance policies. Lessee shall, at Lessee's sole cost and expense, comply with
any and all requirements, pertaining to the demised premises, of any insurance
organization or company, and necessary for the maintenance of fire and public
liability insurance, covering said building and appurtenances.
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9. Indemnification, Insurance.
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A. Lessee hereby waives any and all claims against Lessor for damages
by reason of any personal injury or property damage to any person or persons
whomsoever (including Lessee, Lessee's agents and servants, employees, or third
persons) in or about the demised premises, the buildings of which the demised
premises are a part, and the sidewalks and other areas appurtenant thereto.
Lessee further expressly agrees to indemnify, defend and hold Lessor harmless
from and against any claims, demands, obligations, liabilities, causes of
action, expenses (including attorneys' fees) occasioned by or connected, in any
way whatsoever, with the condition, use or misuse of the demised premises, the
building of which the demised premises are a part and the areas appurtenant
thereto, which is occasioned by any negligent or intentional act or omission of
Lessee and Lessee's agents, servants, employees, and invitees.
B. Lessee further agrees, at Lessee's sole cost and expense,
forthwith upon the execution hereof to procure and keep in effect during the
entire term hereof a policy or policies of commercial general liability
insurance, insuring Lessee from legal liability for personal injury, death or
damage to person or damage to property, however arising, with a combined single
limit of not less than Two Million Dollars ($2,000,000.00) as to any one
occurrence, which policy or policies shall include Lessor as an additional
insured. Lessee further shall require the company issuing such policy to notify
Lessor in writing prior to any cancellation thereof. In the event Lessee fails
to keep such insurance in full force and effect, Lessor may pay the necessary
premiums therefor and the repayment thereof shall be deemed to be a part of the
rental due hereunder payable as such on the next date upon which rental becomes
due. The procuring of insurance within the minimum limits herein set forth shall
not be deemed satisfaction of Lessee's obligations under Paragraph 9(A) hereof
and the indemnities therein contained shall extend to the full amount of any
claim or liability to which the indemnity relates.
C. As long as both of their respective insurers so permit, Lessor and
Lessee hereby mutually waive their respective rights of recovery against each
other for any damages and losses insured by fire, extended coverage and other
property insurance policies existing for the benefit of the respective parties.
Each party shall obtain any special endorsements, if required by its insurer, to
evidence compliance with the aforementioned waiver.
X. Xxxxxx shall maintain throughout the term of this lease a standard
form policy of "all risk, extended coverage" casualty insurance of the type and
in an amount equal to the type currently carried on the building.
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10. Signs. Lessee shall have the right to place and maintain neat and
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appropriate signs of the name of Lessee's business at the entrance of the
demised premises, provided Lessor consents in writing to the shape, size, color
and location thereof. Lessor agrees to act reasonably in giving consent to the
maintenance of a sign, appropriate to and identifying Lessee's business, and to
permit Lessee to replace said sign from time to time. Lessee, upon request of
Lessor, shall immediately remove any sign or decoration which Lessee has placed
or permitted to be placed upon the exterior of the premises or upon the windows
facing any street upon which the premises abut without the consent of Lessor and
which, in the opinion of Lessor, is inappropriate or objectionable and, if
Lessee fails so to do, Lessor, in addition to any rights it may have hereunder,
may enter upon the premises and remove such sign without liability whatsoever.
Lessor expressly reserves the exclusive right to the use of the exterior side
walls, rear walls, and roof of the demised premises and Lessee shall not be
permitted to place any sign or advertisement thereon or any other matter or
property without the written consent of Lessor.
11. Utilities. Throughout the lease term, Lessor shall provide light,
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power and water to the demised premises to the extent that Lessee's demand
therefor is not in excess of normal usage for general office space. Lessor shall
also provide standard building janitorial service (including normal trash
removal) to the premises five days a week (through Able Building Maintenance Co.
or another reputable janitorial company), excluding normal holidays, and
heating, air conditioning and ventilating service to the premises Monday through
Friday, excluding customary holidays, during the hours of 7:00 a.m. to 7:00 p.m.
In addition, Lessor shall provide Lessee with access to the premises twenty-four
hours a day, seven days a week. Lessee shall reimburse Lessor for the increased
costs of such utilities and services pursuant to paragraph 3.C. hereof. After-
hours HVAC and other utilities shall be supplied at Lessee's request, at
Lessor's actual cost thereof, as established and adjusted by Lessor from time to
time.
12. Personal Property Taxes. All property taxes assessed by any
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governmental body upon the property of Lessee including equipment, fixtures and
leasehold improvements made by Lessee, shall be paid by Lessee, and, should
those taxes be applied in any manner do the real property taxes, Lessee, upon
demand, will pay those property taxes to Lessor who in turn will pay them to the
proper tax collector.
13. Work to be Performed by Lessor Prior to Commencement of Term. Except
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for constructing the tenant improvements described in Paragraph 40 of this
lease, Lessor shall not be required to perform any work upon the demised
premises of any type or nature prior to the commencement of the term.
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14. Restoration of the Premises. Lessee agrees that prior to the
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expiration of the lease term, or upon the earlier termination of the lease, or
upon Lessee's abandonment of the leased premises, whichever occurs first, Lessee
will leave the premises in their condition as of the date possession thereof was
originally delivered to Lessee, reasonable wear and tear excepted, and if Lessee
made any alterations or improvements to the premises, with or without Lessor's
consent as required by the terms of this lease, Lessee will in all cases restore
the premises to their original condition as of the inception of the lease term
unless the Lessor has expressly agreed, in writing, that a particular alteration
or improvement need not be removed.
15. Repairs and Maintenance by Lessor. Lessor shall at Lessor's sole cost
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and expense, subject to reimbursement pursuant to paragraph 3.C. of this lease,
maintain in good condition and repair the roof, sidewalls, foundation, window
frames and windows, the common areas used by Lessee and other tenants of the
building containing the demised premises, the building elevator, the HVAC system
serving the demised premises, and all plumbing and electrical facilities
provided by Lessor, unless any damage thereto is caused by the negligence or
intentional misconduct of Lessee, its agents, employees or invitees.
16. Repairs and Maintenance by Lessee. Except as set forth in Paragraph
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15, or as otherwise provided by Lessor in connection with its operation of the
building of which the premises are a part, Lessee shall, at Lessee's cost, keep
and maintain the demised premises and appurtenances and every part thereof, in
good and sanitary order, condition and repair. Lessee further agrees that
Sections 1940-1942 of the Civil Code of the State of California do not apply to
this leasehold.
17. Entry by Lessor. Lessee shall permit Lessor and its agents to enter
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into and upon said premises at all reasonable times for the purpose of
inspecting the same or for the purpose of maintaining the building in which the
demised premises are situated, or for the purpose of making repairs,
alterations, or additions to any other portion of said building, including the
erection and maintenance of such scaffolding, canopies, fences, and props as may
be required, or for the purpose of posting notices of nonliability for
alterations, additions or repairs all without any liability to Lessee for any
loss of occupation or quiet enjoyment of the premises thereby occasioned.
Notwithstanding the foregoing, except in the case of emergency, Lessor and its
agents shall provide Lessee with twenty-four hours notice prior to entry of the
premises. Any such entry by Lessor and its agents shall comply with all
reasonable security measures of Lessee and shall not impair Lessee's operations
more than reasonably necessary.
18. Estoppel Certificates. Lessee shall at any time and from time to
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time, within 10 business days from receipt of Lessor's written request, execute,
acknowledge, and deliver to Lessor a statement in writing certifying that this
lease is unmodified and in full force and effect (or if there has been any
modification thereof that the
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same is in full force and effect as modified and stating the modification or
modifications) and that there are no defaults existing (or if there is any
claimed default stating the nature and extent thereof) and stating the dates to
which the rent and other charges have been paid in advance. It is expressly
understood and agreed that any such statement delivered pursuant to this section
may be relied upon by any prospective purchaser of the estate of Lessor, or any
lender or prospective assignee of any lender on the security of the demised
premises or the property of which it is a part or any part thereof, and any
third person. The provisions of this Paragraph 18 shall be reciprocal and,
within ten business days after request by Lessee, Lessor shall execute a similar
estoppel certificate in favor of Lessee.
19. Removal of Trade Fixtures of Lessee at End of Term. Lessee may remove
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all trade fixtures and equipment installed on the demised premises by Lessee at
the expiration of the term of this lease, provided that they may be removed
without damage to the demised premises.
20. Surrender of Lease. The voluntary or other surrender of this lease by
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Lessee, accepted by Lessor, or the mutual cancellation hereof, shall not work a
merger and shall, at the option of Lessor, terminate all or any existing
subleases or subtenancies or operate as an assignment to Lessor of all or any of
such subleases or subtenancies.
21. Holding Over. Any holding over after the expiration of the term
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hereof with the consent of the Lessor shall be construed to be a tenancy from
month to month at a rental equal to 150% of one-twelfth (1/12) of the last total
annual rental in force and effect.
22. Grace Period.
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A. No default or breach shall exist on the part of Lessor of any of
the covenants and conditions governing it unless and until Lessee shall serve
upon Lessor a written notice specifying with particularity wherein said default
or breach is alleged to exist and the failure on the part of Lessor to perform
or observe said covenant or condition, as the case may be, within thirty (30)
days after the giving of such notice as provided herein.
B. If Lessor shall be delayed or prevented from the performance of
any act required by this lease by reason of acts of God, strikes, lockouts,
labor troubles, inability to procure materials, restrictive governmental laws,
or regulations or other cause, without fault and beyond the reasonable control
of Lessor (financial inability excepted), performance of such act shall be
excused for the period of the delay;, and the period for the performance of any
such act shall be extended for a period equivalent to the period of such delay.
-11-
C. Notwithstanding anything to the contrary in this lease, if the
premises should become untenantable as a consequence of cessation of utilities
or other services required to be provided to the premises by Lessor,
interference with access to the premises, or legal restrictions, and in any of
the foregoing cases the untenantability persists for more than thirty (30)
consecutive calendar days, Lessee shall thereafter be entitled to an equitable
abatement of rent to the extent of the interference with Lessee's use of the
premises occasioned thereby. If the interference renders the premises
untenantable for more than 120 consecutive calendar days, Lessee shall have the
right to terminate this lease.
23. Remedies of Lessor Upon Default.
--------------------------------
A. Except as otherwise provided in paragraph 23.E, if Lessee breaches
the lease before the end of the term or if its right to possession is terminated
by Lessor because of a breach of the lease, the lease terminates. Upon such
termination Lessor may recover from Lessee:
(1) The worth at the time of award of the unpaid rent which had
been earned at the time of termination;
(2) 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 Lessee proves could have been
reasonably avoided;
(3) 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 as Lessee proves could be reasonably avoided;
(4) Any other amount necessary to compensate Lessor for all the
detriment proximately caused by Lessee's failure to perform its obligations
under the lease or which in the ordinary course of things would be likely to
result therefrom.
B. The "worth at the time of award" of the amount referred to in
paragraphs (1) and (2) of subdivision A is computed by allowing interest at the
maximum interest rate allowed by law. The worth at the time of award of the
amount referred to in paragraph (3) of subdivision A is computed by discounting
that amount at the discount rate of the Federal Reserve Bank of San Francisco at
the time of award plus one percent (1%).
-12-
C. Efforts by Lessor to mitigate the damages caused by the Lessee's
breach of the lease do not waive Lessor's right to recover damages under this
section.
D. Nothing in this section affects the right of Lessor to
indemnification for liability arising prior to the termination of the lease for
personal injuries or property damage where the lease provides for such
indemnification.
E. If Lessee has breached this lease the lease continues in effect
for so long as the Lessor does not terminate Lessee's right to possession, and
Lessor may enforce all its rights and remedies under the lease, including the
right to recover the rent as it becomes due under the lease. The following do
not constitute a termination of Lessee's right to possession:
(1) Acts of maintenance or preservation or efforts to relet the
property.
(2) The appointment of a receiver upon initiative of Lessor to
protect Lessor's interest under the lease.
F. If Lessee shall be in default in the performance of any covenant
on its part to be performed under this lease, then, after notice and without
waiving or releasing Lessee from the performance thereof, Lessor may, but shall
not be obligated to, perform any such covenant and, in exercising any such
right, pay necessary and incidental costs and expenses in connection therewith.
All sums so paid by Lessor, together with interest thereon at the maximum rate
of interest permitted by law, shall be deemed additional rent and shall be
payable to Lessor on the next rent paying day.
G. Notwithstanding anything to the contrary in this lease, Lessee
shall not be deemed to have breached this lease or be in default hereunder, and
Lessor shall not be entitled to cure any breach by Lessee under this lease, on
account of (i) Lessee's failure to pay any sum due to Lessor under this lease,
unless Lessee's failure to pay continues for five (5) days after delivery of
written notice of delinquency; or (ii) Lessee's failure to perform any other
covenant of this lease (other than a covenant to pay money to Lessor) unless
Lessee's failure to perform such covenant continues for thirty (30) days after
Lessee's receipt of written notice, or such longer time as may reasonably be
required to cure the default.
24. Attorneys' Fees on Default. In the event of the bringing of any
---------------------------
action by either party hereto as against the other hereon or hereunder, or by
reason of the breach of any covenant or condition on the part of the other
party, or arising out of this lease, then and in that event the party in whose
favor final judgment shall be entered shall be entitled to have and recover of
and from the other reasonable attorneys' fees to be fixed by the court wherein
such judgment is entered.
-13-
25. Insolvency.
-----------
A. The appointment of a receiver to take possession of all or
substantially all of the assets of Lessee, or
B. A general assignment by Lessee for the benefit of creditors, or
C. Any action taken or suffered by Lessee under any insolvency or
bankruptcy act, shall constitute a breach of this lease by Lessee and a default
hereunder.
Notwithstanding the foregoing, Lessee shall not be deemed to have
breached this lease or be in default hereunder solely as a consequence of the
filing of an involuntary bankruptcy petition, the appointment of a receiver, the
attachment of any interest in this lease or of Lessee's other assets or the
exercise by any third party of any other remedy with respect to Lessee, Lessee's
interest in this lease or Lessee's other assets, unless the petition, receiver,
attachment or other remedy is not discharged within sixty (60) days after the
filing or commencement thereof.
26. Assignment or Subletting. Lessee shall not assign this lease or any
-------------------------
interest herein and shall not sublet the premises or any part thereof or any
right or privilege appurtenant thereto or permit any other person (the agents
and servants of Lessee excepted) to occupy or use the premises or any portion
thereof without the written consent of Lessor first being had and obtained,
which consent shall not be unreasonably withheld if the proposed assignee or
subtenant meets Lessor's financial requirements, is of good business reputation,
would be compatible with the other tenants of the building and meets such other
reasonable requirements as may be established by Lessor. A consent to one
assignment, subletting, or occupation and use by another person shall not be
deemed to be a consent to any other or further assignment, subletting, or
occupation nor a waiver of the provisions of this paragraph, except as to the
specific instance covered thereby. Any such assignment, subletting or occupation
without consent shall be void and shall at the option of Lessor terminate this
lease. This lease and any interest in it shall not be assignable as to the
interest of Lessee by operation of law without the written consent of Lessor.
In the case of an individual Lessee, the subsequent incorporation of
Lessee's business and transfer of rights hereunder to a corporation shall
constitute a prohibited assignment within the meaning of this paragraph.
-14-
In the event Lessor shall consent to any assignment or subletting,
Lessee shall in all events remain fully liable on this lease and shall not be
released from performing any of the terms, covenants, and conditions of this
lease.
In the event Lessee shall assign this lease or any interest herein or
sublease any portion of the premises, then, on a monthly basis, 50% any sums of
money, or other economic consideration received by Lessee from the transferee,
including higher rent, bonuses, key money or the like, which exceed, in the
aggregate, the total sums which Lessee pays Lessor under this lease with respect
to the premises so subleased or assigned (after deducting from such
consideration received by Lessee the reasonable costs to Lessee to effectuate
the assignment or sublease, including without limitation, reasonable attorneys'
fees, brokerage or leasing commissions, and remodelling costs) shall be payable
to Lessor as additional rental under this lease without affecting or reducing
any other obligation of Lessee hereunder. The agreement to pay such sums is the
result of negotiations between the parties hereto in which the parties agree
that the delivery of said sums to Lessor and has been bargained for by Lessee in
consideration of the other economic benefits provided by Lessor to Lessee under
this lease.
Lessee agrees to reimburse Lessor for all reasonable expenses,
including reasonable attorneys' fees, incurred by Lessor in connection with any
requested assignment.
Notwithstanding the foregoing, Lessor agrees to give its consent to
any sublease or assignment of this lease to (i) a subsidiary, affiliate,
division or corporation controlling, controlled by or under common control with
Lessee, (ii) a successor corporation related to Lessee by merger, consolidation,
non-bankruptcy reorganization or government action, (iii) a purchaser of
substantially all of Lessee's assets located on the premises, or (iv) Invision
Company, provided, however, that in all events Lessee shall remain liable
hereunder and any such assignee and/or sublessee shall agree in writing to be
jointly and severally liable with Lessee with respect to Lessee's obligations
hereunder. For purposes of this lease, a sale of Lessee's capital stock shall
not be deemed an assignment, subletting or other transfer of this lease or the
premises requiring Lessor's consent.
27. Transfer by Lessor - Release From Liability. In the event Lessor
-------------------------------------------
sells or transfers the demised premises or any part thereof and as a part of
that transaction assigns its interest as Lessor in and to this lease, then, from
and after the effective date of that sale, assignment, or transfer, but provided
the purchaser or transferee assumes in writing the Lessor's obligations under
this lease, the Lessor shall have no further liability under this lease to the
Lessee except as to matters of liability which shall have accrued and are
unsatisfied as of that date, it being intended that the covenants and
obligations contained in this lease on the part of Lessor shall be
-15-
binding upon Lessor and its successors and assigns only during and in respect of
their own periods of ownership of the fee.
28. Damage to or Destruction of Premises. In the event of a partial
------------------------------------
destruction of the premises from any cause covered by Lessor's standard fire and
extended coverage insurance, Lessor shall forthwith repair the premises provided
the cost of repair does not exceed said insurance proceeds and such repairs can
be made within sixty (60) days under the laws and regulations of state, county
and/or municipal authorities, but such partial destruction shall in no way annul
or void this lease, except that Lessee shall be entitled to a proportionate
reduction of base monthly rental and additional rental while such repairs are
being made; such proportionate reduction to be based upon the extent to which
the making of such repairs interferes with the business carried on by the Lessee
in said premises. If such partial destruction was caused by any risk not covered
by Lessor's insurance or if the cost of repair exceeds the insurance proceeds
payable, or if such repairs cannot be made within sixty (60) days, Lessor may,
at its option, make such repairs, the rent shall be abated as provided above,
and the lease shall remain in full force and effect. If the Lessor does not
elect to make repairs which it is not obligated to make, this lease may be
terminated by Lessor or Lessee. In the event the building in which the demised
premises are situated is destroyed to the extent of not less than fifty percent
(50%) of the replacement cost thereof, Lessor may elect to terminate this lease,
whether the demised premises are injured or not and without liability to the
Lessee. A total destruction of the building in which the said premises may be
situated, shall terminate this lease. The provisions of subdivision 2 of Section
1932 of the California Civil Code, and of Subdivision 4 of Section 1933 of that
Code, shall not apply to this lease, and Lessee waives the benefits of such
provisions.
Notwithstanding anything to the contrary in this lease, Lessee shall
have the option to terminate this lease in the event either of the following
occurs: (i) the premises cannot be or are not in fact fully repaired by Lessor
within nine (9) months after the date of any damage or destruction not caused by
the negligence or intentional misconduct of Lessee, Lessee's agents, employees
or invitees or (ii) if the premises are damaged by any peril within twelve (12)
months of the last day of the lease term and cannot or are not in fact
substantially restored within six (6) months after the date of such damage,
provided such damage was not caused by the negligence or intentional misconduct
of Lessee, Lessee's agents, employees or invitees.
29. Condemnation.
-------------
A. Throughout the lease, the word "condemn" is synonymous with the
phrase "right of eminent domain", i.e., the fight of people or government to
take property for government or public use and shall include the intention to
condemn
-16-
expressed in writing as well as the filing of any action or proceedings for
condemnation.
B. In the event any action or proceeding is commenced for the
condemnation of the demised premises or any part thereof, or of the property of
which the demised premises are a part, or if Lessor is advised in writing by any
agency or entity or body having the right or power of condemnation of its
intention to condemn, then and in any of said events, Lessor may:
(1) Without any obligation or liability to Lessee, and without
affecting the validity and existence of this lease other than as hereinafter
provided, agree to sell and/or convey to the condemnor without first requiring
that any action or proceeding be instituted or, if such action or proceeding has
been instituted, without requiring any trial or hearing thereof, and Lessor is
expressly empowered to stipulate to judgment therein any part or portion of the
demised premises sought by the condemnor free from this lease and the rights of
Lessee hereunder.
(2) Terminate this lease and all rights of Lessee hereunder as to
the portion of the premises condemned; effective as of the date that title to
such portion of the premises vests in the governmental agency initiating the
condemnation action.
(3) Continue this lease in full force and effect, provided that
such condemnation does not result in a taking of the demised premises. In the
event this lease is continued in full force and effect and by reason of the
condemnation a modification or alteration of the building of which the demised
premises is a part must be undertaken and such modification or alteration
interferes with Lessee's use of the premises, then Lessee shall be entitled to a
reasonable abatement of base monthly rental and additional rental during the
period of such modification or alteration in proportion to the extent such work
shall interfere with the use of the premises by Lessee.
C. In the event a portion of the demised premises is condemned and
taken and such condemnation and taking materially affects Lessee's use of the
premises, Lessee shall have the option either of terminating its obligations
under this lease or continuing the lease in full force and effect with respect
to such portion of the premises as is not taken. In the latter event, the base
monthly rental and additional rental for the remainder of the term shall be
reduced to the extent such condemnation interferes with Lessee's use of the
premises.
D. If as a result of any such condemnation proceedings a leasehold
interest or a right of possession only is so condemned or taken under the power
of eminent domain and is for a period of time less than the remaining term of
the lease,
-17-
this lease shall continue in full force and effect and the award shall be
payable to Lessor. In such event, the base monthly rental and additional rental
shall xxxxx in proportion to the extent such condemnation interferes with
Lessee's use of the premises. In addition, Lessee shall have the option to
terminate this lease in the event such taking is scheduled to continue or
continues for more than 120 consecutive calendar days.
E. All compensation and damages awarded for the taking of the demised
premises or the common facilities, or any portion or portions thereof, shall,
except as otherwise herein provided, belong to and be the sole property of
Lessor, and Lessee shall not have any claim or be entitled to any award for
diminution in value of its leasehold hereunder or for the value of any unexpired
term of this lease, provided, however, that Lessee shall be entitled to any
award that may be made for the taking of or injury to, or on account of any cost
or loss Lessee may sustain in the removal of, Lessee's merchandise, fixtures,
equipment, and furnishings and for the value of any condemned improvements
Lessee has the right to remove from the premises together with the unamortized
value, allocable to the remainder of the lease term, of any improvements
installed at Lessee's expense which are not removable, and Lessee's moving
costs.
F. If this lease is terminated, as a whole or in part, pursuant to
any of the provisions of this paragraph, all rentals and other charges payable
by Lessee to Lessor hereunder and attributable to the demised premises taken
shall be paid up to the date upon which actual physical possession is taken by
the condemnor, and the parties shall thereupon be released from all further
liability in relation thereto.
30. Subordination. This lease and the leasehold estate created hereby are
--------------
and shall be, at the option and upon written declaration of Lessor, subject,
subordinate, and inferior to the lien and estate of any liens and encumbrances,
renewals, extensions or replacements thereof now or hereafter imposed by Lessor
upon the demised premises or any part thereof, or upon the building of which the
demised premises are a part. Lessor expressly reserves the right, at Lessor's
option and declaration, to place liens and encumbrances on and against the
demised premises or any part thereof and/or the building of which the demised
premises are a part that are superior in lien and effect to this lease and the
estate created hereby. Lessee shall, forthwith upon the written request of
Lessor so to do, execute and deliver to such person or institution as Lessor may
direct, an agreement of subordination of whatsoever covenants or conditions as
are designated by Lessor or by any title company issuing any policy of title
insurance insuring the lien, estate, and effect of said lien or encumbrance.
Lessee agrees to attorn to any successor owner of the leased premises.
-18-
Notwithstanding the foregoing, prior to the lease commencement date,
Lessor shall obtain from any lenders or ground lessors of the building a
written agreement in form reasonably satisfactory to Lessee providing for
recognition of Lessee's interest under this lease in the event of a foreclosure
of the lender's security interest or termination of the ground lease. Further,
as a condition to the subordination of Lessee's leasehold interest to a ground
lease or instrument of security, Lessor shall obtain from any such ground
lessor's or lenders, a written recognition agreement in form reasonably
satisfactory to Lessee providing that Lessee's rights of occupancy shall not be
disturbed in the event of a termination of the ground lease or a foreclosure of
the loan, and that in the event of such termination or foreclosure, Lessee shall
receive all of the services provided for under this lease.
31. Effect of Exercise of or Failure to Exercise Privilege by a Party.
------------------------------------------------------------------
Neither the exercise nor failure to exercise any right, option, or privilege
hereunder by a party shall exclude the party from exercising any and all other
rights, privileges and options hereunder, nor shall it relieve the other party
from any obligation to perform each and every covenant and condition on the
other party's part to be performed hereunder, or from damages or other remedy
for failure to perform or meet the obligations of this lease.
32. Waiver. The waiver by a party of any breach of any term, covenant or
-------
condition herein contained shall not be deemed to be a waiver of that term,
covenant, or condition or any subsequent breach of it or any other term,
covenant, or condition herein contained. The subsequent acceptance of rent
hereunder by Lessor shall not be deemed to be a waiver of any preceding breach
by Lessee of any term, covenant or condition of this lease, other than failure
of Lessee to pay the particular rental so accepted, regardless of Lessor's
knowledge of that preceding breach at the time of the acceptance of that rent.
33. Notices. All notices to be given to Lessee may be given in writing
--------
personally or by depositing the notices in the United States mail, postage paid,
and addressed:
if to Lessee: at the leased premises
or at such other location as Lessee may from time to time designate in writing;
if to Lessor: 000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
or at such other place or places as Lessor may from time to time designate in
writing. All notices shall be deemed given when personally delivered or three
business days after the date when postmarked.
-19-
34. Representations. This lease represents the entire agreement of the
----------------
parties with respect to the parties' rights and duties under this lease. Lessee
acknowledges that, except as specifically set forth herein, neither Lessor nor
any agent, servant or representative of Lessor, or any person purporting to act
on Lessor's behalf, has made any representation, warranty, or statement with
respect to the condition of the premises, the zoning applicable thereto, the
cost of any tenant improvements to be made by Lessee, or any other matter
relating to this lease agreement. With respect to such matters, Lessee is
relying upon Lessee's own independent investigation and sources of information.
35. Captions. The titles or headings to the paragraphs of this lease are
---------
descriptive only, are not a part of this lease, and shall have no effect on the
construction or interpretation hereof.
36. Successors and Assigns. The covenants and conditions herein contained
-----------------------
shall, subject to the provisions as to assignment, apply to and bind the heirs,
successors, executors, administrators, and assigns of all the parties hereto.
37. California Law. This lease shall be construed and interpreted in
---------------
accordance with the laws of the State of California.
38. Severability. The unenforceability, invalidity, or illegality of any
-------------
of the provisions of this lease shall not render the other provisions
unenforceable, invalid, or illegal.
39. Authority. The individuals executing this lease on behalf of Lessor
----------
and Lessee warrant and represent that they are authorized to enter into this
lease on behalf of the entity they represent and that when executed, this lease
will be valid and enforceable against such entity in accordance with all of the
terms and conditions contained herein.
40. Tenant Improvement Work. In connection with preparing of the premises
------------------------
for Lessee's occupancy, Lessor shall construct improvements as set forth in
Exhibit B, attached hereto. Lessor shall select the contractor to perform such
work and Lessor shall provide a tenant improvement allowance of up to $291,375
for the combined Third and Fourth floors and $145,687.50 for the Second floor,
to be used in connection with said improvements. Except as otherwise
specifically set forth in Exhibit B, any additional costs incurred in preparing
the premises for Lessee's occupancy shall be at Lessee's sole cost and expense
and any such sum payable by Lessee shall be delivered to Lessor prior to the
commencement of any construction work.
-20-
41. Right of First Negotiation. Subject to the existing rights of other
---------------------------
tenants in the building as set forth in Exhibit C, attached hereto, and provided
Lessee is not then in default under the terms of the lease and this lease is in
full force and effect, Lessee shall have a right of first negotiation to lease
other non-ground floor portions of the building that become available for lease
during the term hereof, on the terms and conditions hereinafter set forth:
At any time such additional premises become available for lease,
Lessor shall notify Lessee of the rental rate and other terms and conditions
Lessor has established for such additional premises. Upon receiving such notice,
Lessee shall have fifteen (15) days in which to negotiate with Lessor for the
lease thereof, on such terms and conditions as are mutually acceptable to both
Lessor and Lessee. In the event a written agreement pertaining thereto is not
entered into within said fifteen (15) day period, Lessor thereafter shall have
the right to lease such additional premises to a third party on substantially
the same terms stated in Lessor's notice. If Lessor does not lease such
additional premises within ninety (90) days after the expiration of said fifteen
(15) day period, any further transactions shall be deemed a new determination by
Lessor to lease such additional premises and the provisions of this paragraph
shall again be applicable.
42. Quiet Enjoyment. Notwithstanding anything to the contrary in this
---------------
lease, so long as Lessee is not in default under this lease, Lessee shall
lawfully and quietly hold, occupy and enjoy the premises during the lease term
without hinderance or interference from Lessor or any person or persons claiming
by, through or under Lessor.
43. Common Areas. Subject to such rules and regulations as may be
-------------
established by Lessor, Lessee shall have the right, throughout the lease term,
to use all areas and facilities outside the premises and within the boundaries
of the building which are set aside by Lessor for the general non-exclusive use
of Lessor, Lessee and other tenants of the building, including without
limitation, lobbies, stairwells, elevators, restrooms, loading areas, trash
areas, sidewalks and walkways.
44. Hazardous Materials. Lessor shall be responsible for any legally
--------------------
required removal or remediation of hazardous materials from the premises or
the building of which the premises are a part, unless such removal or
remediation is of hazardous materials brought on to the premises or released by
Lessee, Lessee's agents, officers, employees or customers. Furthermore, Lessor
shall indemnify, defend, protect and hold Lessee, its agents, officers,
directors and shareholders, harmless from and against all demands for the
removal of hazardous materials which Lessor is required to remove pursuant to
the proceeding sentence. This paragraph 44 constitutes the entire agreement of
Lessor and Lessee regarding hazardous materials. As used in this lease,
"hazardous materials" shall mean any material which is now or hereafter
regulated by
-21-
any governmental authority, posing a hazard to the environment or human health,
and which is legally required to be removed or remediated.
IN WITNESS WHEREOF, the parties have executed this lease on the day and
year first above written.
LESSOR
------
PROSPECT FARMS, a California limited
partnership
By: /s/ Xxxxx Xxxx
------------------------------------
Xxxxx Xxxx, General Partner
LESSEE
------
XXXXXX SOFTWARE INTERNATIONAL, INC.,
a Delaware Corporation
By: /s/ ^^^
------------------------------------
, President
By: /s/ ^^^
------------------------------------
, Secretary
-22-
EXHIBIT A
FLOOR PLAN - 2ND FLOOR P23
FLOOR PLAN - 3RD FLOOR P24
FLOOR PLAN - 4TH FLOOR P25
EXHIBIT B
---------
WORK LETTER
1. Lessor shall construct the tenant improvements (the "Improvements") in
accordance with the preliminary plans ("Preliminary Plans") attached hereto as
Schedule 1 and in accordance with the terms of this work letter.
----------
2. Lessor shall cause to prepared, as quickly as possible, final plans,
specifications and working drawings for the Improvements ("Final Plans"), as
well as an estimate of the total cost for the Improvements ("Cost Estimate"),
all of which conform to or represent logical evolutions of or developments from
the Preliminary Plans. The Final Plans and Cost Estimate shall be delivered to
Lessee immediately upon completion. Within five business days after receipt
thereof, Lessee shall either approve the Final Plans and Cost Estimate or
deliver to Lessor specific written changes thereto that are necessary, in
Lessee's opinion, to conform such plans to the Preliminary Plans or to reduce
costs. If Lessee desires changes, Lessor shall not unreasonably withhold its
approval of such changes and the parties shall confer and negotiate in good
faith to reach agreement on modifications to the Final Plans, and the Cost
Estimate as a consequence of such changes. As soon as approved by Lessor and
Lessee, Lessor shall submit the Final Plans to all appropriate governmental
agencies and thereafter Lessor shall use its best efforts to obtain the required
governmental approvals as soon as practicable.
3. After the Final Plans have been approved by Lessor and Lessee as
provided above, neither party shall have the right to require extra work or
change orders with respect to the construction of the Improvements without the
prior written consent of the other, which consent shall not be unreasonably
withheld or delayed. All change orders shall specify any change in the Cost
Estimate as a consequence of the change order.
4. Lessor shall cause three general contractors to bid for the
construction of the Improvements. If Lessee so desires, Lessee may also select a
general contractor, reasonably acceptable to Lessor, to bid the work. Said bid
obtained from the contractor selected by Lessee shall be obtained in a prompt
and timely manner and so as not to delay the construction of the Improvements.
All bids will be opened together, with Lessor selecting the general contractor
to construct the Improvements (the "General Contractor"). The General Contractor
is the contractor only of Lessor and Lessee shall have no liability to the
General Contractor on the construction contract.
-26-
5. Lessor shall thereafter cause the Contractor to commence construction
of the Improvements and shall diligently prosecute such construction to
completion. The Improvements shall be constructed by Lessor in accordance with
all rules, regulations, codes, ordinances, statutes, and laws of any
governmental or quasi-governmental authority and in accordance with the Final
Plans as mended.
6. When the improvements are complete, Lessor shall deliver possession of
the premises to Lessee.
7. The following items shall be provided at Lessor's sole cost and expense
and the Tenant Improvement Allowance shall not be used therefore:
a. Costs incurred to remove hazardous materials from the premises or
surrounding areas;
b. Costs incurred in making areas outside of the premises comply with
The Americans With Disabilities Act; and
c. Interest and other costs of financing construction.
d. Costs to bring the premises into compliance with any CC&R's and/or
underwriters' requirements.
e. The following code related construction costs.
(i) Elevator lobbies: smoke control doors/mechanism and smoke
detectors.
(ii) Corridor: existing corridors shall be upgraded to one hour
rating; fire caulking required around penetrations (may mean fire/smoke
dampers).
(iii) Doors: twenty minute doors in corridor. New lever handles
on all existing doors.
(iv) Ceiling: existing acoustical tile may have to be seismically
braced.
(v) Lighting: double switching installed in perimeter offices
per Title 24.
(vi) Stair Rails: New guard rail and hand rail to meet ADA and
code requirements.
-27-
8. In the event the cost of the Improvements exceeds the Tenant
Improvement Allowance described in Paragraph 40 of the lease, then Lessor, at
Lessee's request, shall increase the Allowance by the amount of such excess, but
in no event shall the Allowance be increased by more than 10% of the original
Allowance. In such event, the increased amount of up to 10% shall be treated as
a loan from Lessor to Lessee, fully amortized, with interest at 10% per annum,
through level monthly payments over the entire lease term and with such payments
commencing on the applicable commencement date for the floor for which the
excess Improvement Allowance has been allocated.
9. Lessee shall have the right to use a portion of the allowance for the
Second floor for the Improvements on the Third and Fourth floors, or use a
portion of the allowance for the Third and Fourth floors for the Improvements on
the Second floor.
-28-
EXHIBIT C
---------
1. Russian Hill Recording has a right to extend its Lease to approximately
January 1, 2009.
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