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Exhibit 10.9
LEASE AGREEMENT
1. Parties. This Lease is made by and between DEVCON ASSOCIATES XVI, a
California general partnership ("Landlord"), and CKS GROUP, INC., a Delaware
corporation ("Tenant").
2. Demise of Premises. Landlord hereby leases to Tenant and Tenant
hereby leases from Landlord, upon the terms and conditions hereinafter set
forth, those certain premises (the "Premises") situated in the City of
Cupertino, County of Santa Xxxxx, State of California, described as follows:
approximately twenty-nine thousand seven hundred fifty-eight (29,758) square
feet of floor space as shown on the floor plan attached hereto as EXHIBIT "A"
and located in the building (the "Building") shown as Building A on the site
plan (the "Site Plan") attached hereto as EXHIBIT "B" and commonly known as
00000 Xxxxxxx Xxxxx. The Building is located on a larger parcel (the "Parcel")
containing another building (the "Other Building") as shown on the Site Plan.
The Building and the Other Building are hereinafter collectively referred to as
the Buildings. Except as provided in Xxxxxxxxx 00, Xxxxxxxx shall not be
required to make any alterations, additions or improvements to the Premises and
the Premises shall be leased to Tenant in an "as-is" condition.
3. Term. The term of this Lease ("Lease Term") shall be for five (5)
years, commencing on September 1, 1996 (the "Commencement Date") and ending on
August 31, 2001 unless sooner terminated pursuant to any provision hereof.
Notwithstanding said scheduled Commencement Date, if for any reason Landlord
cannot deliver possession of the Premises to Tenant on said date, Landlord shall
not be subject to any liability therefor, nor shall such failure affect the
validity of this Lease or the obligations of Tenant hereunder, but in such case
Tenant shall not be obligated to pay rent until possession of the Premises is
tendered to Tenant and the commencement and termination dates of this Lease
shall be revised to conform to the date of Landlord's delivery of possession.
Landlord shall permit Tenant to have access (including for construction) to the
Premises commencing August 1, 1996. Such early access shall be subject to all
the provisions of this Lease, excluding only the obligation to pay the Monthly
Installment of rent, Additional Rent and Common Area Charges.
4. Rent. Initial ______ ______
A. Time of Payment. Tenant shall pay to Landlord as rent for the
Premises the sum specified in Subparagraph 4.B below (the "Monthly Installment")
each month in advance on the first day of each calendar month, without deduction
or offset, prior notice or demand, commencing on the Commencement Date and
continuing through the term of this Lease, together with such additional rents
as are payable by Tenant to Landlord under the terms of this Lease. The Monthly
Installment for any period during the Lease Term which period is less than one
(1) full month shall be a pro rata portion of the Monthly Installment based upon
a thirty (30) day month.
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B. Monthly Installment. The Monthly Installment of rent payable each
month shall be the following respective amounts during the following time
periods:
TIME PERIOD AMOUNT
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Months 1 through 12 $44,637.00 per month
Months 13 through 48 $47,613.00 per month
Months 49 through 60 $50,589.00 per month
C. Late Charge. Tenant acknowledges that late payment by Tenant to
Landlord of rent and other sums due hereunder will cause Landlord to incur costs
not contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited to, processing
and accounting charges, and late charges which may be imposed on Landlord by the
terms of any mortgage or deed of trust covering the Premises. Accordingly, if
any installment of rent or any other sum due from Tenant shall not be received
by Landlord within five (5) days after such amount shall be due, Tenant shall
pay to Landlord, as additional rent, a late charge equal to four percent (4%) of
such overdue amount. The parties hereby agree that such late charge represents a
fair and reasonable estimate of the costs Landlord will incur by reason of late
payment by Tenant. Acceptance of such late charge by Landlord shall in no event
constitute a waiver of Tenant's default with respect to such overdue amount, nor
prevent Landlord from exercising any of its other rights and remedies granted
hereunder.
D. Additional Rent. All taxes, insurance premiums, Common Area
Charges, late charges, costs and expenses which Tenant is required to pay
hereunder, together with all interest and penalties that may accrue thereon in
the event of Tenant's failure to pay such amounts, and all reasonable damages,
costs, and attorneys' fees and expenses which Landlord may incur by reason of
any default of Tenant or failure on Tenant's part to comply with the terms of
this Lease, shall be deemed to be additional rent ("Additional Rent") and shall
be paid in addition to the Monthly Installment of rent, and, in the event of
nonpayment by Tenant, Landlord shall have all of the rights and remedies with
respect thereto as Landlord has for the nonpayment of the Monthly Installment of
rent.
E. Place of Payment. Rent shall be payable in lawful money of the
United States of America to Landlord at DEVCON ASSOCIATES XVI, c/o X. Xxxx
Properties, 0000 Xxx Xxxxxxx, #000, Xxx Xxxx, Xxxxxxxxxx 00000 or to such other
person (s) or at such other place (s) as Landlord may designate in writing.
F. Advance Payment. Concurrently with the execution of this Lease,
Tenant shall pay to Landlord the sum of Forty-Four Thousand Six Hundred
Thirty-Seven Dollars ($44,637.00) to be applied to the Monthly Installment of
rent first accruing under this Lease.
5. Security Deposit. Concurrently with the execution of this Lease,
Tenant shall deposit the sum of Fifty Thousand Five Hundred Eighty-Nine Dollars
($50,589.00) (the "Security Deposit") to
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secure the faithful performance by Tenant of each term, covenant and condition
of this Lease. If Tenant shall at any time fail to make any payment or fail to
keep or perform any term, covenant or condition on its part to be made or
performed or kept under this Lease, Landlord may, but shall not be obligated to
and without waiving or releasing Tenant from any obligation under this Lease,
use, apply or retain the whole or any part of the Security Deposit (A) to the
extent of any sum due to Landlord; (B) to make any required payment on Tenant's
behalf; or (C) to compensate Landlord for any loss, damages, attorneys' fees or
expense sustained by Landlord due to Tenant's default. In such event, Tenant
shall, within five (5) days of written demand by Landlord, remit to Landlord
sufficient funds to restore the Security Deposit to its original sum. No
interest shall accrue on the Security Deposit. Landlord shall not be required to
keep the Security Deposit separate from its general funds. Should Tenant comply
with all the terms, covenants, and conditions of this Lease and at the end of
the term of this Lease leave the Premises in the condition required by this
Lease, then said Security Deposit, less any sums owing to Landlord or which
Landlord is otherwise entitled to retain, shall be returned to Tenant within
thirty (30) days after the termination of this Lease and vacancy of the Premises
by Tenant.
6. Use of Premises. Tenant shall use the Premises only in conformance
with applicable governmental laws, regulations, rules and ordinances for
administrative, marketing, sales, demonstration, research and development and
other general office uses and for no other purpose. Tenant shall indemnify,
protect, defend, and hold Landlord harmless against any loss, expense, damage,
attorneys' fees or liability arising out of the failure of Tenant to comply with
any applicable law. Tenant shall not commit or suffer to be committed, any waste
upon the Premises, or any nuisance, or other acts or things which may disturb
the quiet enjoyment of any other tenant in the buildings adjacent to the
Premises, or allow any sale by auction upon the Premises, or allow the Premises
to be used for any unlawful purpose, or place any loads upon the floor, walls or
ceiling which endanger the structure, or place any harmful liquids in the
drainage system of the Building. No waste materials or refuse shall be dumped
upon or permitted to remain upon any part of the Premises outside of the
Building, except in trash containers placed by Tenant inside exterior enclosures
designated for that purpose by Landlord. No materials, supplies, equipment,
finished products or semifinished products, raw materials or articles of any
nature shall be stored upon or permitted to remain on any portion of the
Premises outside of the Building. Tenant shall strictly comply with the
provisions of Paragraph 39 below.
7. Taxes and Assessments.
A. Tenant's Property. Tenant shall pay before delinquency any and
all taxes and assessments, license fees and public charges levied, assessed or
imposed upon or against Tenant's mixtures, equipment, furnishings, furniture,
appliances and personal property installed or located on or within the Premises.
Tenant shall cause said fixtures, equipment, furnishings, furniture, appliances
and personal property to be assessed and billed separately from the real
property of Landlord. If any of Tenant's said personal property shall be
assessed with Landlord's real property, Tenant shall pay Landlord the taxes
attributable to Tenant within ten (10) days after receipt of a written statement
from Landlord setting forth the taxes applicable to Tenant's property.
B. Property Taxes. Tenant shall pay, as Additional Rent, Tenant's
Pro Rata Share (as defined below) of all Property Taxes levied or assessed with
respect to the land comprising the Parcel
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and with respect to all buildings and improvements located on the Parcel which
become due or accrue during the term of this Lease. Tenant shall pay such
Property Taxes to Landlord on or before the later of the following dates: (1) at
least ten (10) days prior to the delinquency date; or (2) twenty (20) days after
receipt of billing. If Tenant fails to do so, Tenant shall reimburse Landlord,
on demand, for all interest, late fees and penalties that the taxing authority
charges Landlord. In the event Landlord's mortgagee requires an impound for
Property Taxes, then on the first day of each month during the Lease Term,
Tenant shall pay Landlord one twelfth (1/12) of its annual share of such
Property Taxes. Tenant's liability hereunder shall be prorated to reflect the
Commencement and termination dates of this Lease.
As used in this Lease, the term "Tenant's Pro Rata Share" shall mean a
fraction, expressed as a percentage, the numerator of which is the number of
square feet of floor space contained in the Premises and the denominator of
which is the number of square feet of floor space contained in all of the
Buildings located on the Parcel. As of the Commencement Date, Tenant's Pro Rata
Share is fifty-six and seven-tenths percent (56.7%).
For the purpose of this Lease, "Property Taxes" means and includes all
taxes, assessments (including, but not limited to, assessments for public
improvements or benefits), taxes based on vehicles utilizing parking areas,
taxes based or measured by the rent paid, payable or received under this Lease,
taxes on the value, use, or occupancy of the Premises, the Buildings and/or the
Parcel, Environmental Surcharges, and all other governmental impositions and
charges of every kind and nature whatsoever, whether or not customary or within
the contemplation of the parties hereto and regardless of whether the same shall
be extraordinary or ordinary, general or special, unforeseen or foreseen, or
similar or dissimilar to any of the foregoing which, at any time during the
Lease Term, shall be applicable to the Premises, the Buildings and/or the Parcel
or assessed, levied or imposed upon the Premises, the Buildings and/or the
Parcel, or become due and payable and a lien or charge upon the Premises, the
Buildings and/or the Parcel, or any part thereof, under or by virtue of any
present or future laws, statutes, ordinances, regulations or other requirements
of any governmental authority whatsoever. The expenses, taxes, charges or
penalties imposed by the Federal Department of Energy, the Federal Environmental
Protection Agency, the Federal Clean Air Act, or any regulations promulgated
thereunder or any other local, state or federal governmental agency or entity
now or hereafter vested with the power to impose taxes, assessments, or other
types of surcharges as a means of controlling or abating environmental pollution
or the use of energy. The term "Property Taxes" shall not include any federal,
state or local net income, estate, or inheritance tax imposed on Landlord. The
term "Property Taxes" shall not include any increases in real property taxes
that result from a voluntary sale or other transfer of the Premises and/or
Parcel by Landlord; provided, however, "Property Taxes" shall include any
increases in real property taxes that result from a foreclosure sale, deed in
lieu of foreclosure or other involuntary transfer of ownership of the Premises
and/or the Parcel.
C. Other Taxes. Tenant shall, as Additional Rent, pay or reimburse
Landlord for any tax based upon, allocable to, or measured by the area of the
Premises or the Buildings or the Parcel; or by the rent paid, payable or
received under this Lease; any tax upon or with respect to the possession,
leasing, operation, management, maintenance, alteration, repair, use or
occupancy of the Premises or any portion thereof; any privilege tax, excise tax,
business and occupation tax, gross receipts tax, sales and/or use tax, water
tax, sewer tax, employee tax, occupational license tax imposed upon Landlord or
Tenant
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with respect to the Premises; any tax upon this transaction or any document to
which Tenant is a party creating or transferring an interest or an estate in the
Premises.
8. Insurance.
A. Indemnity. Tenant agrees to indemnify, protect and defend
Landlord against and hold Landlord harmless from any and all claims, causes of
action, judgments, obligations or liabilities, and all reasonable expenses
incurred in investigating or resisting the same (including reasonable attorneys'
fees), on account of, or arising out of, the use or occupancy of the Premises
and the Parcel and all areas appurtenant thereto by Tenant, its agents,
employees, contractors and invitees; provided, however, Tenant shall not be
obligated to indemnify, defend and hold harmless Landlord from claims, causes of
action, judgments, obligations and liabilities arising from (i) Landlord's gross
negligence or willful misconduct or (ii) any breach of Landlord's obligations
under this Lease. The Lease is made on the express understanding that Landlord
shall not be liable for, nor suffer loss by reason of, injury to person or
property, from whatever cause (except for the gross negligence or willful
misconduct of Landlord), which in any way may be connected with the operation,
use or occupancy of the Premises specifically including, without limitation, any
liability for injury to the person or property of Tenant, its agents, officers,
employees, licenses and invitees.
B. Liability Insurance. Tenant shall, at Tenant's expense,
obtain and keep in force during the term of this Lease a policy of comprehensive
public liability insurance insuring Landlord and Tenant against claims and
liabilities arising out of the operation, use, or occupancy of the Premises and
all areas appurtenant thereto, including parking areas. Such insurance shall be
in an amount of not less than Two Million Dollars ($2,000,000.00) for bodily
injury or death as a result of any one occurrence and Five Hundred Thousand
Dollars ($500,000.00) for damage to property as a result of any one occurrence.
The insurance shall be with companies approved by Landlord, which approval
Landlord agrees not to withhold unreasonably, Tenant shall deliver to Landlord,
prior to possession, and at least thirty (30) days prior to the expiration
thereof, a certificate of insurance evidencing the existence of the policy
required hereunder and such certificate shall certify that the policy (1) names
Landlord as an additional insured, (2) shall not be canceled or altered without
thirty 930) days prior written notice to Landlord, (3) insures performance of
the indemnity set forth in Subparagraph 8.A above, (4) the coverage is primary
and any coverage by Landlord is in excess thereto and (5) contains a
cross-liability endorsement. Landlord may maintain a policy or policies of
comprehensive general liability insurance insuring Landlord (and such others as
are designated by Landlord), against liability for personal injury, bodily
injury, death and damage to property occurring or resulting from time to time
determine are reasonably necessary for its protection. The cost of any such
liability insurance maintained by Landlord shall be a Common Area Charge and
Tenant shall pay, as Additional Rent, its share of such cost to Landlord as
provided in Paragraph 12 below.
C. Property Insurance. Landlord shall obtain and keep in force
during the term of this Lease a policy or policies of insurance covering loss or
damage to the Premises and the Buildings, in the amount of the full replacement
value thereof, providing protection against those perils included within the
classification of "all risk" insurance, plus a policy of rental income insurance
in the amount of one hundred percent (100%) of twelve (12) months rent
(including, without limitation, sums payable as
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Additional Rent), plus, at Landlord's option, flood insurance and earthquake
insurance, and any other coverages which may be required from time to time by
Landlord's mortgages. Tenant shall have no interest in nor any right to the
proceeds of any insurance procured by Landlord on the Premises. Tenant shall,
within twenty (20) days after receipt of billing, pay to Landlord, as Additional
Rent, Tenant's Pro Rata Share of such insurance procured and maintained by
Landlord. Tenant acknowledges that such insurance procured by Landlord may
contain a deductible which reduces Tenant's cost for such insurance and, in the
event of loss or damage, Tenant shall be required to pay to Landlord the amount
of such deductible.
D. Tenant's Insurance; Release of Landlord. Tenant
acknowledges that the insurance to be maintained by Landlord on the Premises
pursuant to Subparagraph 8.C above will not insure any of Tenant's property.
Accordingly, Tenant, at Tenant's own expense, shall maintain in full force and
effect on all of its fixtures, equipment, leasehold improvements and personal
property in the Premises, a policy of "All Risk" coverage insurance to the
extent of at least ninety percent (90%) of their insurable value.
E. Mutual Waiver of Subrogation. Tenant and Landlord hereby
mutually waive their respective rights for recovery against each other for any
loss of or damage to the property of either party, to the extent such loss or
damage is insured by any insurance policy required to be maintained by this
Lease or otherwise in force at the time of such loss or damage. Each party shall
obtain any special endorsements, if required by the insurer, whereby the insurer
waives its right of subrogation against the other party hereto. The provisions
of this Subparagraph E shall not apply in those instances in which waiver of
subrogation would cause either party' s insurance coverage to be voided or
otherwise made uncollectible.
9. Utilities. Tenant shall pay for all water, gas, light, heat,
power, electricity, telephone, trash pick-up, sewer charges, and all other
services supplied to or consumed on the Premises, and all taxes and surcharges
thereon. In addition, the cost of any utility services supplied to the Common
Area or not separately metered to the Premises shall be a Common Area Charge and
Tenant shall pay Tenant's Pro Rata Share of such costs to Landlord as provided
in Paragraph 12 below.
10. Repairs and Maintenance.
A. Landlord's Repairs. Subject to the provisions of Xxxxxxxxx
00, Xxxxxxxx shall keep and maintain the exterior roof, structural elements and
exterior walls of the Building in good order and repair. Landlord shall not,
however, be required to maintain, repair or replace the interior surface of
exterior walls, nor shall Landlord be required to maintain, repair or replace
windows, doors, skylights or plate glass. Landlord shall have no obligation to
make repairs under this Subparagraph 10.A until a reasonable time after receipt
of written notice from Tenant of the need for such repairs. Tenant shall
reimburse Landlord, as additional rent, within thirty (30) days after receipt of
billing, for the cost of such repairs and maintenance which are the obligation
of Landlord hereunder, provided however, that Tenant shall not be required to
reimburse Landlord for the cost of maintenance and repairs of the structural
elements of the Building unless such maintenance or repair is required because
of the negligence or willful misconduct of Tenant or its employees, agents, or
invitees. As used herein, the term "structural elements
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of the Building" shall mean and be limited to the foundation, footings, floor
slab (but not flooring), structural walls, and roof structure (but not roofing
or roof membrane).
Landlord shall, at Tenant's cost, maintain and repair the heating,
ventilating and air conditioning ("HVAC") systems and equipment serving the
Premises. Tenant shall, within thirty (30) days after receipt of billing,
reimburse Landlord as Additional Rent for the cost of such HVAC maintenance and
repair, including, without limitation, the cost of a service contract with a
HVAC contractor for periodic inspections and servicing.
B. Tenant's Repairs. Except as expressly provided in
Subparagraph 10.A above, Tenant shall, at its sole cost, keep and maintain the
entire Premises and every part thereof, including without limitation, the
windows, window frames, plate glass, glazing, skylights, truck doors, doors and
all door hardware, the walls and partitions, and the electrical, plumbing,
lighting, systems and equipment in good order, condition and repair. The term
"repair" shall include replacements, restorations and/or renewals when necessary
as well as painting. Tenant's obligation shall extend to all alterations,
additions and improvements to the Premises, and all fixtures and appurtenances
therein and thereto.
Should Tenant fail to make repairs required of Tenant hereunder
forthwith upon five (5) days notice from Landlord or should Tenant fail
thereafter to diligently complete the repairs, Landlord, in addition to all
other remedies available hereunder or by law and without waiving any alternative
remedies, may make the same, and in that event, Tenant shall reimburse Landlord
as additional rent for the cost of such maintenance or repairs within five (5)
days of written demand by Landlord.
Landlord shall have no maintenance or repair obligations whatsoever
with respect to the Premises except as expressly provided in Subparagraph 10.A
and Paragraphs 11 and 16. Tenant hereby expressly waives the provisions of
Subsection 1 of Section 1932 and Sections 1941 and 1942 of the Civil Code of
California and all rights to make repairs at the expense of Landlord as provided
in Section 1942 of said Civil Code. Landlord shall not be liable for any damages
arising from any act or neglect of any other tenant, if any, of the Building or
the Parcel.
C. Amortization of Certain Items. Notwithstanding anything to
the contrary contained in Subparagraphs 10.A or 10.B above, if the HVAC
equipment or the roof requires replacement during the Lease Term (or any
extension thereof), Landlord shall make the replacement and the cost thereof
shall be amortized over a ten (10) year period, and Tenant shall pay to Landlord
as Additional Rent one-tenth (1/10th) of the cost of such replacement each year
during the remaining term of the Lease (including any extension term). Said
payment shall be made monthly along with the Monthly Installment of rent for
each remaining month during the Lease Term (including any extension term)
following such replacement.
11. Common Area. Subject to the terms and conditions of this Lease
and such rules and regulations as Landlord may from time to time prescribe,
Tenant and Tenant's employees, invitees and customers shall, in common with
other occupants of the Parcel, and their respective employees, invitees and
customers, and others entitled to the use thereof, have the non-exclusive right
to use the access roads, parking areas and facilities provided and designated by
Landlord for the general use and
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convenience of the occupants of the Parcel, which areas and facilities are
referred to herein as "Common Area." This right shall terminate upon the
termination of this Lease. Landlord reserves the right from time to time to make
changes in the shape, size, location, amount and extent of the Common Area.
Landlord further reserves the right to promulgate such reasonable rules and
regulations relating to the use of the Common Area, and any part or parts
thereof, as Landlord may deem appropriate for the best interest of the occupants
of the Parcel. The rules and regulations shall be binding upon Tenant upon
delivery of a copy of them to Tenant, and Tenant shall abide by them and
cooperate in their observance. Such rules and regulations may be amended by
Landlord from time to time, with or without advance notice, and all amendments
shall be effective upon delivery of a copy of them to Tenant. Tenant shall have
the non-exclusive use of no more than fifty-six percent (56%) of the parking
spaces in the Common Area as designated from time to time by Landlord. Tenant
shall not at any time park or permit the parking of Tenant's trucks or other
vehicles, or the trucks or other vehicles of others, adjacent to loading areas
so as to interfere in any way with the use of such areas, nor shall Tenant at
any time park or permit the parking of Tenant's vehicles or trucks, or the
vehicles or trucks of Tenant's suppliers or others, in any portion of the Common
Area not designated by Landlord for such use by Tenant. Tenant shall not abandon
any inoperative vehicles or equipment on any portion of the Common Area. Tenant
shall make no alterations, improvements or additions to the Common Area.
Landlord shall operate, manage, insure, maintain and repair the Common
Area in good order, condition and repair. The manner in which the Common Area
shall be maintained and the expenditures for such maintenance shall be at the
discretion of Landlord. The cost of such repair, maintenance, operation,
insurance and management, including without limitation, maintenance and repair
of landscaping, irrigation systems, paving, sidewalks, fences, and lighting,
shall be a Common Area Charge and Tenant shall pay to Landlord its share of such
costs as provided in Paragraph 12 below. If any landscaping in the Common Area
requires replacement during the Lease Term (including any extensions thereof),
Landlord shall make the replacement, the cost thereof shall be amortized over a
ten (10) year period, and one-tenth (1/10th) of the cost thereof shall be
included each year as a Common Area Charge.
12. Common Area Charges. Tenant shall pay to Landlord, as
additional rent, upon demand but not more often than once each calendar month,
an amount equal to Tenant's Pro Rata Share of the Common Area Charges as defined
in Subparagraph 8.B and Paragraphs 9, 11 and 13 of this Lease. Tenant
acknowledges and agrees that the Common Area Charges shall include a management
fee in such reasonable amount as is customarily charged by third party property
management companies managing properties in Santa Xxxxx County similar to the
Premises, Buildings, Common Area and Parcel.
13. Alterations. Tenant shall not make, or suffer to be made, any
alterations, improvements or additions in, on, about or to the Premises or any
part thereof, without the prior written consent of Landlord (which consent shall
not be unreasonably withheld) and without a valid building permit issued by the
appropriate governmental authority. As a condition to giving such consent,
Landlord may require that Tenant agree to remove any such alterations,
improvements or additions at the termination of this Lease, and to restore the
Premises to their prior condition. Unless Landlord requires that Tenant remove
any such alteration, improvement or addition, any alteration, addition or
improvement to the Premises, except movable furniture and trade fixtures not
affixed to the Premises, shall become the property of Landlord upon termination
of the Lease and shall remain upon and be surrendered with the Premises at
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the termination of this Lease. Without limiting the generality of the foregoing,
all heating, lighting, electrical (including all wiring, conduit, outlets,
drops, xxxx ducts, main and subpanels), air conditioning, partitioning, drapery,
and carpet installations made by Tenant regardless of how affixed to the
premises, together with all other additions, alterations and improvements that
have become an integral part of the Building, shall be and become the property
of the Landlord upon termination of the Lease, and shall not be deemed trade
fixtures, and shall remain upon and be surrendered with the Premises at the
termination of this Lease.
If, during the term hereof, any alteration, addition or change of any
sort to all or any portion of the Premises is required by law, regulation,
ordinance or order of any public agency, Tenant shall promptly make the same at
its sole cost and expense. If during the term hereof, any alteration, addition,
or change to the Common Area is required by law, regulation, ordinance or order
of any public agency, Landlord shall make the same and the cost of such
alteration, addition or change shall be a Common Area Charge and Tenant shall
pay Tenant's Pro Rata Share of said cost to Landlord as provided in Paragraph 12
above.
14. Acceptance of the Premises. By entry and taking possession of
the Premises pursuant to this Lease, Tenant accepts the Premises as being in
good and sanitary order, condition and repair and accepts the Premises in their
condition existing as of the date of such entry. Tenant acknowledges that
neither Landlord nor Landlord's agents has made any representation or warranty
as to the suitability of the Premises to the conduct of Tenant's business. Any
agreements, warranties or representations not expressly contained herein shall
in no way bind either Landlord or Tenant, and Landlord and Tenant expressly
waive all claims for damages by reason of any statement, representation,
warranty, promise or agreement, if any, not contained in this Lease. This Lease
constitutes the entire understanding between the parties hereto and no addition
to, or modification of, any term or provision of this Lease shall be effective
until set forth in a writing signed by both Landlord and Tenant.
15. Default.
A. Events of Default. A breach of this Lease shall exist if
any of the following events (hereinafter referred to as "Event of Default")
shall occur:
(1) Default in the payment when due of any installment of
rent or other payment required to be made by Tenant hereunder, where such
default shall not have been cured within three (3) days after written notice of
such default is given to Tenant;
(2) Tenant's failure to perform or comply with any
provision of Paragraph 39.
(3) Tenant's failure to perform any other term, covenant or
condition contained in this Lease where such failure shall have continued for
twenty (20) days after written notice of such failure is given to Tenant;
(4) Tenant's vacating for more than sixty (60) days or
abandonment of the Premises;
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(5) Tenant's assignment of its assets for the benefit of its
creditors;
(6) The sequestration of, attachment of, or execution on, any
substantial part of the property of Tenant or on any property essential to the
conduct of Tenant's business, shall have occurred and Tenant shall have failed
to obtain a return or release of such property within thirty (30) days
thereafter, or prior to sale pursuant to such sequestration, attachment or levy,
whichever is earlier;
(7) Tenant or any guarantor of Tenant's obligations hereunder
shall commence any case, proceeding or other action seeking reorganization,
arrangement, adjustment, liquidation, dissolution or composition of it or its
debts under any law relating to bankruptcy, insolvency, reorganization or relief
of debtors, or seek appointment of a receiver, trustee, custodian, or other
similar official for it or for all or any substantial part of its property;
(8) Tenant or any such guarantor shall take any corporate
action to authorize any of the actions set forth in Clause 7 above; or
(9) Any case, proceeding or other action against Tenant or any
guarantor of Tenant's obligations hereunder shall be commenced seeking to have
an order for relief entered against it as debtor, or seeking reorganization,
arrangement, adjustment, liquidation, dissolution or composition of it or its
debts under any law relating to bankruptcy, insolvency, reorganization or relief
of debtors, or seeking appointment of a receiver, trustee, custodian or other
similar official for it or for all or any substantial part of its property, and
such case, proceeding or other action (i) results in the entry of an order for
relief against which is not fully stayed within seven (7) business days after
the entry thereof or (ii) remains undismissed for a period of forty-five (45)
days.
(10) An Event of Default by Tenant shall occur under that
certain lease between Landlord and Tenant covering the Other Building on the
Parcel commonly known as 10441-10443 Xxxxxxx Drive.
B. Remedies. Upon any event of Default, Landlord shall have the
following remedies, in addition to all other rights and remedies provided by
law, to which Landlord may resort cumulatively, or in the alternative:
(1) Recovery of Rent. Landlord shall be entitled to keep this
Lease in full force and effect (whether or not Tenant shall have abandoned the
Premises) and to enforce all of its rights and remedies under this Lease,
including the right to recover rent and other sums as they become due, plus
interest at the Permitted Rate (as defined in Paragraph 33 below) from the due
date of each installment of rent or other sum until paid.
(2) Termination. Landlord may terminate this Lease by giving
Tenant written notice of termination. On the giving of the notice all of
Tenant's rights in the Premises and the Building and Parcel shall terminate.
Upon the giving of the notice of termination, Tenant shall surrender and vacate
the Premises in the condition required by Paragraph 34, and Landlord may
re-enter and take possession of the Premises and all the remaining improvements
or property and eject Tenant or any of
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Tenant's subtenants, assignees or other person or persons claiming any right
under or through Tenant or eject some and not others or eject none. This Lease
may also be terminated by a judgment specifically providing for termination. Any
termination under this paragraph shall not release Tenant from the payment of
any sum then due Landlord or from any claim for damages or rent previously
accrued or then accruing against Tenant. In no event shall any one or more of
the following actions by Landlord constitute a termination of this Lease:
(a) maintenance and preservation of the Premises;
(b) efforts to relet the Premises;
(c) appointment of a receiver in order to protect Landlord's
interest hereunder;
(d) consent to any subletting of the Premises or assignment of
this Lease by Tenant, whether pursuant to provisions hereof concerning
subletting and assignment or otherwise; or
(e) any other action by Landlord or Landlord's agents intended
to mitigate the adverse effects from any breach of this Lease by Tenant.
(3) Damages. In the event this Lease is terminated pursuant to
Subparagraph 15.B.2 above, or otherwise, Landlord shall be entitled to damages
in the following sums:
(a) the worth at the time of award of the unpaid rent which
has been earned at the time of termination; plus
(b) the worth at the time of award of the amount by which the
unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; plus
(c) the worth at the time of award of the amount by which the
unpaid rent for the balance of the term after the time of award exceeds the
amount of such rental loss that Tenant proves could be reasonably avoided; and
(d) any other amount necessary to compensate Landlord for all
detriment proximately caused by Tenant's failure to perform Tenant's obligations
under this Lease, or which in the ordinary course of things would be likely to
result therefrom including, without limitation, the following: (i) expenses for
cleaning, repairing or restoring the Premises; (ii) expenses for altering,
remodeling or otherwise improving the Premises for the purpose of reletting,
including installation of leasehold improvements (whether such installation be
funded by a reduction of rent, direct payment or allowance to the succeeding
lessee, or otherwise); (iii) real estate broker's fees, advertising costs and
other expenses of reletting the Premises; (iv) costs of carrying the Premises
such as taxes and insurance premiums thereon, utilities and security
precautions; (v) expenses in retaking possession of the Premises;
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(vi) attorneys' fees and court costs; and (vii) any unamortized real estate
brokerage commission paid in connection with this Lease.
(e) The "worth at the time of award" of the amounts
referred to in Subparagraphs (a) and (b) of this Paragraph 15.B(3) is computed
by allowing interest at the Permitted Rate. The "worth at the time of award" of
the amounts referred to in Subparagraph (c) of this Paragraph 15.B(3) is
computed by discounting such amount at the discount rate of the Federal Reserve
Board of San Francisco at the time of award plus one percent (1%). The term
"rent" as used in this Paragraph 15 shall include all sums required to be paid
by Tenant to Landlord pursuant to the terms of this Lease.
16. Destruction. In the event the Premises are destroyed in whole
or in part from any cause Landlord may, at its option:
(a) Rebuild or restore the Premises to their condition prior
to the damage or destruction; or
(b) Terminate this Lease.
Notwithstanding the foregoing, Landlord may not elect to terminate this
Lease if the Premises are only partially destroyed to an extent not more than
seventy percent (70%) of their replacement cost, (ii) the damage is totally
covered by insurance (or Tenant agrees to pay and does in fact pay any uninsured
costs), and (iii) the repairs can be made within one hundred twenty (120) days
after the date of the destruction.
If Landlord does not give Tenant notice in writing within thirty (30)
days from the destruction of the Premises of its election to either rebuild and
restore them, or to terminate this Lease, Landlord shall be deemed to have
elected to rebuild or restore them, in which Landlord agrees, at its expense,
promptly to rebuild or restore the Premises to their condition prior to the
damage or destruction. If Landlord does not complete the rebuilding or
restoration within one hundred eighty (180) days following the date of
destruction (such period of time to be extended for delays caused by the fault
or neglect of weather, inability to obtain materials, supplies or fuels, acts or
contractors or subcontractors, or delay of the contractors or subcontractors due
to such causes or other contingencies beyond the control of Landlord), then
Tenant shall have the right to terminate this Lease by giving fifteen (15) days
prior written notice to Landlord. Landlord's obligation to rebuild or restore
shall not include restoration of Tenant's trade fixtures, equipment,
merchandise, or any improvements, alterations made by Tenant to the Premises.
In the event of any damage or destruction to or of the Premises which
materially interferes with Tenant's use of the Premises for more than ninety
(90) days (unless such damage or destruction is caused by the negligence or
willful misconduct of Tenant, its agents, employees or invitees), Tenant shall
have the right to terminate this Lease by giving fifteen (15) days prior written
notice to Landlord.
Any policy or policies of fire, extended coverage or similar casualty
insurance, which either party obtains in connection with the Premises shall
include a clause or endorsement denying the insurer any
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rights of subrogation against the other party to the extent permitted by such
policy and to the extent rights have been waived by the insured prior to the
occurrence of injury or loss. Landlord and Tenant hereby waive any rights of
recovery against the other for injury or loss due to hazards covered by
insurance.
Unless this Lease is terminated pursuant to the foregoing provisions,
this Lease shall remain in full force and effect; provided, however, that during
any period of repairs or restoration, rent and all other amounts to be paid by
Tenant on account of the Premises and this Lease shall be abated in proportion
to the area of the Premises rendered not reasonably suitable for the conduct of
Tenant's business thereon. Tenant hereby expressly waives the provisions of
Section 1932, Subdivision 2 and Section 1933, Subdivision 4 of the California
Civil Code.
17. Condemnation.
A. Definition of Terms. For the purposes of this Lease, the
term (1) "Taking" means a taking of the Premises or damage to the Premises
related to the exercise of the power of eminent domain and includes a voluntary
conveyance, in lieu of court proceedings, to any agency, authority, public
utility, person or corporate entity empowered to condemn property; (2) "Total
Taking" means the taking of the entire Premises or so much of the Premises as to
prevent or substantially impair the use thereof by Tenant for the uses herein
specified; provided, however, in no event shall a Taking of less than ten
percent (10%) of the Premises be deemed a Total Taking; (3) "Partial Taking"
means the taking of only a portion of the Premises which does not constitute a
Total Taking; (4) "Date of Taking" means the date upon which the title to the
Premises, or a portion thereof, passes to and vests in the condemnor or the
effective date of any order for possession if issued prior to the date title
vests in the condemnor; and (5) "Award" means the amount of any award made,
consideration paid, or damages ordered as a result of a Taking.
B. Rights. The parties agree that in the event of a Taking all
rights between them or in and to an Award shall be as set forth herein and
Tenant shall have no right to any Award except as set forth herein.
C. Total Taking. In the event of a Total Taking during the
term hereof (1) the rights of Tenant under the Lease and the leasehold estate of
Tenant in and to the Premises shall cease and terminate as of the Date of
Taking; (2) Landlord shall refund to Tenant any prepaid rent; (3) Tenant shall
pay Landlord any rent or charges due Landlord under the Lease, each prorated as
of the Date of Taking; (4) Tenant shall receive from Landlord those portions of
the Award attributable to trade fixtures of Tenant and for moving expenses of
Tenant; and (5) the remainder of the Award shall be paid to and be the property
of Landlord.
D. Partial Taking. In the event of a Partial Taking during the
term hereof (1) the rights of Tenant under the Lease and the leasehold estate of
Tenant in and to the portion of the Premises taken shall cease and terminate as
of the Date of Taking; (2) from and after the Date of Taking the Monthly
Installment of rent shall be an amount equal to the product obtained by
multiplying the Monthly Installment of rent immediately prior to the Taking by a
fraction, the numerator of which is the number
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of square feet contained in the Premises after the Taking and the denominator of
which is the number of square feet contained in the Premises prior to the
Taking; (3) Tenant shall receive from the Award the portions of the Award
attributable to trade fixtures of Tenant; and (4) the remainder of the Award
shall be paid to and be the property of Landlord.
18. Mechanics' Lien. Tenant shall (A) pay for all labor and services
performed for, materials used by or furnished to, Tenant or any contractor
employed by Tenant with respect to the Premises; (B) indemnify, defend, protect
and hold Landlord and the Premises harmless and free from any liens, claims,
liabilities, demands, encumbrances, or judgments created or suffered by reason
of any labor or services performed for, materials used by or furnished to,
Tenant or any contractor employed by Tenant with respect to the Premises; (C)
give notice to Landlord in writing five (5) days prior to employing any laborer
or contractor to perform services related to, or receiving materials for use
upon the Premises; and (D) permit Landlord to post a notice of nonresponsibility
in accordance with the statutory requirements of California Civil Code Section
3094 or any amendment thereof. In the event Tenant is required to post an
improvement bond with a public agency in connection with the above, Tenant
agrees to include Landlord as an additional obligee.
19. Inspection of the Premises. Tenant shall permit Landlord and its
agents to enter the Premises at any reasonable time for the purpose of
inspecting the same, performing Landlord's maintenance and repair
responsibilities, posting a notice of non-responsibility for alterations,
additions or repairs and at any time within ninety (90) days prior to expiration
of this Lease, to place upon the Premises, ordinary "For Lease" or "For Sale"
signs.
20. Compliance with Laws. Tenant shall, at its own cost, comply with
all of the requirements of all municipal, county, state and federal authorities
now in force, or which may hereafter be in force, pertaining to the use and
occupancy of the Premises, and shall faithfully observe all municipal, county,
state and federal law, statutes or ordinances now in force or which may
hereafter be in force. The judgment of any court of competent jurisdiction or
the admission of Tenant in any action or proceeding against Tenant, whether
Landlord be a party thereto or not, that Tenant has violated any such ordinance
or statute in the use and occupancy of the Premises shall be conclusive of the
fact that such violation by Tenant has occurred.
21. Subordination. The following provisions shall govern the
relationship of this Lease to any underlying lease, mortgage or deed of trust
which now or hereafter affects the Premises, the Building and/or the Parcel, or
Landlord's interest or estate therein (the "Project") and any renewal,
modification, consolidation, replacement, or extension thereof (a "Security
Instrument").
A. Priority. This Lease is subject and subordinate to all
Security Instruments existing as of the Commencement Date. However, if any
Lender so requires, this Lease shall become prior and superior to any such
Security Instrument.
B. Subsequent Security Instruments. At Landlord's election,
this Lease shall become subject and subordinate to any Security Instrument
created after the Commencement Date. Notwithstanding such subordination,
Tenant's right to quiet possession of the Premises shall not be
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disturbed so long as Tenant is not in default and performs all of its
obligations under this Lease, unless this Lease is otherwise terminated pursuant
to its terms.
C. Documents. Tenant shall execute any document or instrument
required by Landlord or any Lender to make this Lease either prior or
subordinate to a Security Instrument, which may include such other matters as
the Lender customarily requires in connection with such agreements, including
provisions that the Lender not be liable for (1) the return of the Security
Deposit unless the Lender receives it from Landlord, and (2) any defaults on the
part of Landlord occurring prior to the time that the Lender takes possession of
the Project in connection with the enforcement of its Security Instrument.
Tenant's failure to execute any such document or instrument within ten (10) days
after written demand therefor shall constitute a default by Tenant or, at
Landlord' s option, Landlord may execute such documents on behalf of Tenant as
Tenant's attorney-in-fact. Tenant does hereby make, constitute and irrevocably
appoint Landlord as Tenant's attorney-in-fact to execute such documents in
accordance with this Paragraph.
D. Tenant's Attornment. Tenant shall attorn (1) to any
purchaser of the Premises at any foreclosure sale or private sale conducted
pursuant to any Security Instrument encumbering the Project; (2) to any grantee
or transferee designated in any deed given in lieu of foreclosure; or (3) to the
lessor under any underlying ground lease should such ground lease be terminated.
E. Lender. The term "Lender" shall mean (1) any beneficiary,
mortgagee, secured party, or other holder of any deed of trust, mortgage, or
other written security device or agreement affecting the Project; and (2) any
lessor under any underlying lease under which Landlord holds its interest in the
Project.
22. Holding Over. This Lease shall terminate without further
notice at the expiration of the Lease Term. Any holding over by Tenant after
expiration shall not constitute a renewal or extension or give Tenant any rights
in or to the Premises except as expressly provided in this lease. Any holding
over after the expiration with the consent of Landlord shall be construed to be
a tenancy from month to month, at one hundred fifty percent (150%) of the
monthly rent for the last month of the Lease Term, and shall otherwise be on the
terms and conditions herein specified insofar as applicable.
23. Notices. Any notice required or desired to be given under this
Lease shall be in writing with copies directed as indicated below and shall be
personally served or given by mail. Any notice given by mail shall be deemed to
have been given when forty-eight (48) hours have elapsed from the time such
notice was deposited in the United States mails, certified and postage prepaid,
addressed to the party to be served with a copy as indicated herein at the last
address given by that party to the other party under the provisions of this
Paragraph 23. At the date of execution of this Lease, the address of Landlord
is:
DEVCON ASSOCIATES XVI
c/o X. Xxxx Properties
0000 Xxx Xxxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
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and the address of Tenant is:
CKS GROUP, INC., Attn: COO
00000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
24. Attorneys' Fees. In the event either party shall bring any
action or legal proceeding for damages for any alleged breach of any provision
of this Lease, to recover rent or possession of the Premises, to terminate this
Lease, or to enforce, protect or establish any term or covenant of this Lease or
right or remedy of either party, the prevailing party shall be entitled to
recover as a part of such action or proceeding, reasonable attorneys' fees and
court costs, including attorneys' fees and costs for appeal, as may be fixed by
the court or jury. The term "prevailing party" shall mean the party who received
substantially the relief requested, whether by settlement, dismissal, summary
judgment, judgment, or otherwise.
25. Nonassignment.
A. Landlord's Consent Required. Tenant's interest in this
Lease is not assignable, by operation of law or otherwise, nor shall Tenant have
the right to sublet the Premises, transfer any interest of Tenant therein or
permit any use of the Premises by another party, without the prior written
consent of Landlord to such assignment, subletting, transfer or use, which
consent Landlord agrees not to withhold unreasonably subject to the provisions
of Subparagraph 25.B below. A consent to one assignment, subletting, occupancy
or use by another party shall not be deemed to be a consent to any subsequent
assignment, subletting, occupancy or use by another party. Any assignment or
subletting without such consent shall be void and shall, at the option of
Landlord, terminate this Lease.
Landlord's waiver or consent to any assignment or subletting hereunder
shall not relieve Tenant from any obligation under this Lease unless the consent
shall so provide.
B. Transferee Information Required. If Tenant desires to
assign its interest in this Lease or sublet the Premises, or transfer any
interest of Tenant therein, or permit the use of the Premises by another party
(hereinafter collectively referred to as a "Transfer"), Tenant shall give
Landlord at least thirty (30) days prior written notice of the proposed Transfer
and of the terms of such proposed Transfer, including, but not limited to, the
name and legal composition of the proposed transferee, a financial statement of
the proposed transferee, the nature of the proposed transferee's business to be
carried on in the Premises, the payment to be made or other consideration to be
given to Tenant on account of the Transfer, and such other pertinent information
as may be requested by Landlord, all in sufficient detail to enable Landlord to
evaluate the proposed Transfer and the prospective transferee. It is the intent
of the parties hereto that this Lease shall confer upon Tenant only the right to
use and occupy the Premises, and to exercise such other rights as are conferred
upon Tenant by this Lease. The parties agree that this Lease is not intended to
have a bonus value nor to serve as a vehicle whereby Tenant may profit by a
future Transfer of this Lease or the right to use or occupy the Premises as a
result of any favorable terms contained herein, or future changes in the market
for leased space. It is the intent of the parties that any such bonus value that
may attach to this Lease shall be and remain the exclusive property of Landlord.
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Accordingly, in the event Tenant seeks to Transfer its interest in this Lease or
the Premises, Landlord shall have the following options, which may be exercised
at its sole choice without limiting Landlord in the exercise of any other right
or remedy which Landlord may have by reason of such proposed Transfer:
(1) Landlord may elect to terminate this Lease effective as of
the proposed effective date of the proposed Transfer and release Tenant from any
further liability hereunder accruing after such termination date by giving
Tenant written notice of such termination within twenty (20) days after receipt
by Landlord of Tenant's notice of intent to transfer as provided above. If
Landlord elects to terminate the Lease, Tenant shall have the right to rescind
the proposed transfer and keep the Lease in full force and effect by giving
Landlord written notice of such rescission within ten (10) days after receipt of
Landlord's election to terminate. If Landlord makes such election to terminate
this Lease and Tenant does not rescind the proposed transfer in accordance with
the foregoing, Tenant shall surrender the Premises, in accordance with Paragraph
34, on or before the effective termination date; or
(2) Landlord may consent to the proposed Transfer on the
condition that Tenant agrees to pay to Landlord, as additional rent, fifty
percent (50%) of any and all rents or other consideration (including key money)
received by Tenant from the transferee by reason of such Transfer in excess of
the rent payable by Tenant to Landlord under this Lease (less any brokerage
commissions or advertising expenses incurred by Tenant in connection with the
Transfer). Tenant expressly agrees that the foregoing is a reasonable condition
for obtaining Landlord's consent to any Transfer; or
(3) Landlord may reasonably withhold its consent to the
proposed Transfer.
26. Successors. The covenants and agreements contained in this Lease
shall be binding on the parties hereto and on their respective heirs, successors
and assigns (to the extent the Lease is assignable).
27. Mortgagee Protection. In the event of any default on the part of
Landlord, Tenant will give notice by registered or certified mail to any
beneficiary of a deed of trust or mortgagee of a mortgage encumbering the
Premises, whose address shall have been furnished to Tenant, and shall offer
such beneficiary or mortgagee a reasonable opportunity to cure the default,
including time to obtain possession of the Premises by power of sale or judicial
foreclosure, if such should prove necessary to effect a cure.
28. Landlord Loan or Sale. Tenant agrees within ten (10) days following
request by Landlord to (A) execute and deliver to Landlord any documents,
including estoppel certificates presented to Tenant by Landlord, (1) certifying
that this Lease is unmodified and in full force and effect and the date to which
the rent and other charges are paid in advance, if any, and (2) acknowledging
that there are not, to Tenant's knowledge, any uncured defaults on the part of
Landlord hereunder, and (3) evidencing, the status of the Lease as may be
required either by a lender making a loan to Landlord to be secured by a deed of
trust or mortgage covering the Premises or a purchaser of the Premises from
Landlord and (B) to deliver to Landlord the financial statement of Tenant
certified by the chief financial officer of Tenant, including a balance sheet
and profit and loss statement, for the last completed fiscal year all prepared
in accordance with generally accepted accounting principles consistently
applied. Tenant's failure to deliver an estoppel certificate promptly following
such request shall be an Event of Default under this Lease.
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29. Surrender of Lease Not Merger. The voluntary or other
surrender of this Lease by Tenant, or a mutual cancellation thereof, shall not
work a merger and shall, at the option of Landlord, terminate all or any
existing subleases or subtenants, or operate as an assignment to Landlord of any
or all such subleases or subtenants.
30. Waiver. The waiver by Landlord or Tenant of any breach of any
term, covenant or condition herein contained shall not be deemed to be a waiver
of such term, covenant or condition or any subsequent breach of the same or any
other term, covenant or condition herein contained.
31. General.
A. Captions. The captions and paragraph headings used in this
Lease are for the purposes of convenience only. They shall not be construed to
limit or extend the meaning of any part of this Lease, or be used to interpret
specific sections. The word(s) enclosed in quotation marks shall be construed as
defined terms for purposes of this Lease. As used in this Lease, the masculine,
feminine and neuter and the singular or plural number shall each be deemed to
include the other whenever the context so requires.
B. Definition of Landlord. The term LANDLORD as used in this
Lease, so far as the covenants or obligations on the part of Landlord are
concerned, shall be limited to mean and include only the owner at the time in
question of the fee title of the Premises, and in the event of any transfer or
transfers of the title of such fee, the Landlord herein named (and in case of
any subsequent transfers or conveyances, the then grantor) shall after the date
of such transfer or conveyance be automatically freed and relieved of all
liability with respect to performance of any covenants or obligations on the
part of Landlord contained in this Lease, thereafter to be performed; provided
that any funds in the hands of Landlord or the then grantor at the time of such
transfer, in which Tenant has an interest, shall be turned over to the grantee.
It is intended that the covenants and obligations contained in this Lease on the
part of Landlord shall, subject as aforesaid, be binding upon each Landlord, its
heirs, personal representatives, successors and assigns only during its
respective period of ownership.
C. Time of Essence. Time is of the essence for the performance
of each term, covenant and condition of this Lease.
D. Severability. In case any one or more of the provisions
contained herein, except for the payment of rent, shall for any reason be held
to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Lease, but this Lease shall be construed as if such invalid, illegal or
unenforceable provision had not been contained herein. This Lease shall be
construed and enforced in accordance with the laws of the State of California.
E. Joint and Several Liability. If Tenant is more than one
person or entity, each such person or entity shall be jointly and severally
liable for the obligations of Tenant hereunder.
F. Law. The term "law" or "laws" shall mean any judicial
decision, statute, constitution, ordinance, resolution, regulation, rule,
administrative order, or other requirement of any
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government agency or authority having jurisdiction over the parties to this
Lease or the Premises or both, in effect at the Commencement Date of this Lease
or any time during the Lease Term, including, without limitation, any
regulation, order, or policy of any quasi-official entity or body (e.g., board
of fire examiners, public utility or special district).
G. WAIVER OF JURY TRIAL
LANDLORD AND TENANT HEREBY WAIVE THEIR RESPECTIVE RIGHT TO
TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM, COUNTERCLAIM OR
CROSS-COMPLAINT IN ANY ACTION, PROCEEDING AND/OR HEARING
BROUGHT BY EITHER LANDLORD AGAINST TENANT OR TENANT AGAINST
LANDLORD ON ANY MATTER WHATSOEVER ARISING OUT OF, OR IN ANY
WAY CONNECTED WITH, THIS LEASE, THE RELATIONSHIP OF LANDLORD
AND TENANT, TENANT'S USE OR OCCUPANCY OF THE PREMISES, OR ANY
CLAIM OF INJURY OR DAMAGE, OR THE ENFORCEMENT OF ANY REMEDY
UNDER ANY LAW, STATUTE, OR REGULATION, EMERGENCY OR OTHERWISE,
NOW OR HEREAFTER IN EFFECT.
INITIALS: (Landlord)
(Tenant)
32. Sign. Tenant shall be permitted to use the existing sign
placard for the Premises at Tenant's sole cost and expense. Tenant shall not
place or permit to be placed any other sign or decoration on the Parcel or the
exterior of the Building without the prior written consent of Landlord. Tenant,
upon written notice by Landlord, shall immediately remove any sign or decoration
that Tenant has placed or permitted to be placed on the Parcel or the exterior
of the Building without the prior written consent of Landlord, and if Tenant
fails to so remove such sign or decoration within five (5) days after Landlord's
written notice, Landlord may enter upon the Premises and remove said sign or
decoration and Tenant agrees to pay Landlord, as additional rent upon demand,
the cost of such removal. At the termination of this Lease, Tenant shall remove
any sign which it has placed on the Parcel or Building and shall repair any
damage caused by the installation or removal of such sign.
33. Interest on Past Due Obligations. Any Monthly Installment of
rent or any other sum due from Tenant under this Lease which is received by
Landlord after the date the same is due shall bear interest from said due date
until paid, at an annual rate equal to the greater of (the "Permitted Rate"):
(1) ten percent (10%); or (2) five percent (5%) plus the rate established by the
Federal Reserve Bank of San Francisco, as of the twenty-fifth (25th) day of the
month immediately preceding the due date, on advances to member banks under
Sections 13 and 13(a) of the Federal Reserve Act, as now in effect or hereafter
from time to time amended. Payment of such interest shall not excuse or cure any
default by Tenant. In addition, Tenant shall pay all costs and attorneys' fees
incurred by Landlord in collection of such amounts.
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34. Surrender of the Premises. On the last day of the Term hereof, or
on the sooner termination of this Lease, Tenant shall surrender the Premises to
Landlord in their condition existing as of the Commencement Date of this Lease,
ordinary wear and tear excepted, with all originally painted interior walls
washed, and other interior walls cleaned, and repaired or replaced, all carpets
shampooed and cleaned, the air conditioning and heating equipment serviced and
repaired by a reputable and licensed service firm, all floors cleaned and waxed,
all to the reasonable satisfaction of Landlord. Tenant shall remove all of
Tenant's personal property and trade fixtures from the Premises, and all
property not so removed shall be deemed abandoned by Tenant. Tenant, at its sole
cost, shall repair any damage to the Premises caused by the removal of Tenant's
personal property, machinery and equipment, which repair shall include, without
limitation, the patching and filling of holes and repair of structural damage.
If the Premises are not so surrendered at the termination of this Lease, Tenant
shall indemnify, defend, protect and hold Landlord harmless from and against
loss or liability resulting from delay by Tenant in so surrendering the Premises
including without limitation, any claims made by any succeeding tenant or losses
to Landlord due to lost opportunities to lease to succeeding tenants.
35. Authority. The undersigned parties hereby warrant that they have
proper authority and are empowered to execute this Lease on behalf of Landlord
and Tenant, respectively.
36. C.C.&R.'s. This Lease is made subject to all matters of public
record affecting title to the property of which the Premises are a part. Tenant
shall abide by and comply with all private conditions, covenants and
restrictions of public record now or hereafter affecting the Premises and any
amendment thereof.
37. Brokers. Landlord shall pay any brokerage commissions due to Xxxxxx
Xxxx as a result of this transaction in accordance with the separate agreement
between Landlord and Xxxxxx Hawk. Tenant represents and warrants to Landlord
that it has not dealt with any broker respecting this transaction other than
Xxxxxx Xxxx and Xxxxxxx & Xxxxx Commercial and hereby agrees to indemnify and
hold Landlord harmless from and against any brokerage commission or fee,
obligation, claim or damage (including attorneys' fees) paid or incurred
respecting any broker (excluding Xxxxxx Hawk) claiming through Tenant or with
which/whom Tenant has dealt.
38. Limitation on Landlord's Liability. Tenant, for itself and its
successors and assigns (to the extent this Lease is assignable), hereby agrees
that in the event of any actual, or alleged, breach or default by Landlord under
this Lease that:
A. Tenant's sole and exclusive remedy against Landlord shall
be as against Landlord's interest in the Building;
B. No partner of Landlord shall be sued or named in a party in
a suit or action (except as may be necessary to secure jurisdiction of the
partnership);
C. No service of process shall be made against any partner of
Landlord (except as may be necessary to secure jurisdiction of the partnership);
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D. No partner of Landlord shall be required to answer or
otherwise plead to any service of process;
E. No judgment will be taken against any partner of Landlord;
F. Any judgment taken against any partner of Landlord may be
vacated and set aside at any time nunc pro tunc;
G. No writ of execution will ever be levied against the assets
of any partner of Landlord;
H. The covenants and agreements of Tenant set forth in this
Paragraph 38 shall be enforceable by Landlord and any partner of Landlord.
39. Hazardous Material.
A. Definitions. As used herein, the term "Hazardous Material"
shall mean any substance (a) the presence of which requires investigation or
remediation under any federal, state or local statute, regulation, ordinance,
order, action, policy or common law; (b) which is or becomes defined as a
"hazardous waste," "hazardous substance," pollutant or contaminant under any
federal, state or local statute, regulation, rule or ordinance or amendments
thereto including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. Section 9601 et seq.) and/or the
Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.) ; (c)
which is toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic, or otherwise hazardous and is or becomes regulated by
any governmental authority, agency, department, commission, board, agency or
instrumentality of the United States, the State of California or any political
subdivision thereof; (d) the presence of which on the Premises and/or the Parcel
causes or threatens to cause a nuisance upon the Premises and/or the Parcel or
to adjacent properties or poses or threatens to pose a hazard to the health or
safety of persons on or about the Premises and/or the Parcel; (e) the presence
of which on adjacent properties could constitute a tresspass; (f) without
limitation which contains gasoline, diesel fuel or other petroleum hydrocarbons;
(g) without limitation which contains polychlorinated biphenyls (PCBs), asbestos
or urea formaldehyde foam insulation; or (h) without limitation radon gas.
B. Use Restriction. Subject to the terms and conditions set
forth herein, Tenant shall be permitted to use and store in the Premises those
materials described in Subparagraph 39.G below, in the quantities set forth in
said Subparagraph. Except as specifically allowed in this Lease, Tenant shall
not cause or permit any Hazardous Material to be used, stored, generated,
discharged, transported to or from, or disposed of in or about the Premises, or
any other land or improvements in the vicinity of the Premises. The appearance
of any Hazardous Material that is not permitted by this Lease in or about the
Premises shall be deemed an Event of Default under Paragraph 15 above. Without
limiting the generality of the foregoing, Tenant, at its sole cost, shall comply
with all laws relating to the storage, use, generation, transport, discharge and
disposal of Hazardous Materials. If the presence of Hazardous Materials on the
Premises caused or permitted by Tenant results in contamination of the Premises
or any soil, air, ground or surface waters under, through, over, on, in or about
the Premises, Tenant, at its
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expense, shall promptly take all actions necessary to return the Premises and/or
the surrounding real and personal property to the condition existing prior to
the appearance of such Hazardous Material.
Tenant shall defend, protect, hold harmless and indemnify Landlord and
its agents and employees with respect to all actions, claims, losses, fines,
penalties, fees, costs, damages and liabilities (including but not limited to
attorneys, and consultants' fees) arising out of or in connection with any
Hazardous Material used, generated, discharged, transported to or from, stored,
or disposed of in, on, under, over, through or about the premises and/or the
surrounding real and personal property by Tenant or its agents, employees,
contractors or invitees. Tenant shall not suffer any lien to be recorded against
the Premises as a consequence of a Hazardous Material, including any so called
state, federal or local "super fund" lien related to the "clean up" of a
Hazardous Material in, over, on, under, through, or about the Premises.
C. Compliance. Tenant shall immediately notify Landlord of any
inquiry, test, investigation, enforcement proceeding by or against Tenant or the
Premises concerning a Hazardous Material. Tenant acknowledges that Landlord, as
the owner of the Property, at its election, shall have the sole right, at
Tenant's expense, to negotiate, defend, approve and appeal any action taken or
order issued with regard to any Hazardous Material(s) by any applicable
governmental authority. Landlord shall have the right to appoint a consultant,
at Tenant's expense, to conduct an investigation to determine whether Hazardous
Materials are being used, generated, discharged, transported to or from, stored
or disposed of in, on, over, through, or about the Premises, in an appropriate
and lawful manner. Tenant, at its expense, shall comply with all recommendations
of the consultant.
D. Assignment and Subletting. It shall not be unreasonable for
Landlord to withhold its consent to any proposed assignment or subletting if (1)
the proposed assignee's or subtenant's anticipated use of the Premises involves
the storage, generation, discharge, transport, use or disposal of any Hazardous
Material; (2) if the proposed assignee or subtenant has been required by any
prior landlord, lender or governmental authority to "clean up" or remediate any
Hazardous Material; (3) if the proposed assignee or subtenant is subject to
investigation or enforcement order or proceeding by any governmental authority
in connection with the use, generation, discharge, transport, disposal or
storage of any Hazardous Material.
E. Surrender. Upon the expiration or earlier termination of
the Lease, Tenant, at its sole cost, shall remove all Hazardous Materials from
the Premises and the Parcel which were introduced to the Premises and/or Parcel
by Tenant or its agents, employees, contractors or invitees. If any Hazardous
Materials were introduced to the Premises and/or Parcel by Tenant or its agents,
employees, contractors or invitees, then Tenant shall provide a certificate to
Landlord from a registered soils engineer certifying that there is no
contamination of soil or ground or surface waters in, under, on, through, over
or about the Premises and that there is no other contamination of Hazardous
Materials in the Premises. If Tenant fails to so surrender the Premises, Tenant
shall indemnify, protect, defend and hold Landlord harmless from and against all
damages resulting from Tenant's failure to surrender the Premises as required by
this Paragraph 39, including, without limitation, any actions, claims, losses,
liabilities, fees (including but not limited to attorneys' and consultants',
fees), fines, costs, penalties, or damages in connection with the condition of
the Premises including, without limitation, damages occasioned by the
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inability to relet the Premises or a reduction in the fair market and/or rental
value of the Premises by reason of the existence of any Hazardous Materials in,
on, over, under, through or around the Premises.
F. Holding Over. If any action of any kind is required or
requested to be taken by any governmental authority to clean-up, remove,
remediate or monitor Hazardous Materials from the Premises and such action is
not completed prior to the expiration or earlier termination of the Lease,
Tenant shall be deemed to have impermissibly held over until such time as such
required action is completed, and Landlord shall be entitled to all damages
directly or indirectly incurred in connection with such holding over, including
without limitation, damages occasioned by the inability to re-let the Premises
or a reduction of the fair market and/or rental value of the Premises.
G. Materials. Limited quantities of office supplies and
janitorial products commonly used in an office.
H. Provision Survive Termination. The provisions of this
Paragraph 39 shall survive the expiration or termination of this Lease.
I. Controlling Provisions. The provisions of this Paragraph 39
are intended to govern the rights and liabilities of the Landlord and Tenant
hereunder respecting Hazardous Materials to the exclusion of any other
provisions in this Lease that might otherwise be deemed applicable. The
provisions of this Paragraph 39 shall be controlling with respect to any
provisions in this Lease that are inconsistent with this Paragraph 39.
40. Option to Extend.
A. Provided that Tenant is not in default under this Lease at
the time of exercise of the hereinafter described options or at the time of
termination of the then existing term of this Lease, as the case may be, Tenant
shall have two successive options to extend the term of this Lease, each for a
period of five (5) years (the "First Option Term" and the "Second Option Term",
respectively). Each of said options shall be exercised only by written notice
delivered to Landlord not later than one hundred eighty (180) days prior to the
expiration date of the then existing term of this Lease. In all respects, the
terms, covenants and conditions of this Lease shall remain unchanged during each
Option Term, except that the monthly Installment of rent payable during each
Option Term shall be adjusted in accordance with Subparagraph (b) below, and
except that there shall be no further option to extend the term of this Lease at
the end of the Second Option Term. The Option for the Second Option Term shall
not be exercisable unless the Option for the First Option Term is exercised. The
option to extend hereby granted is personal to the original Tenant under this
Lease and is granted so that such original Tenant can occupy the Premises for
its own use during the Option Term. Accordingly, if the original Tenant under
this Lease assigns this Lease or sublets more than twenty-five percent (25%) of
the Premises, the option hereby granted shall automatically terminate without
notice.
B. The Monthly Installment of rent payable during the First
Option Term shall be ninety-seven and a half percent (97.5%) of the Fair Market
Rental for the Premises as of the first day of the First Option Term for a five
(5) year lease term. The Monthly Installment of rent payable during the
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Second Option Term shall be ninety-seven and a half percent (97.5%) of the Fair
Market Rental for the Premises as of the first day of the Second Option Term for
a five (5) year lease term.
Promptly following exercise of the first and second options to extend,
the parties shall meet and endeavor to agree upon the Fair Market Rental of the
Premises as of the first day of the Option Term in question. In determining the
Fair Market Rental for the Premises, the Premises shall be compared only to
buildings of a similar quality and size with open office improvements and with
similar amenities in the Cupertino area and all legal uses of the Premises shall
be considered. If within fifteen (15) days after exercise of the first or second
options, the parties cannot agree upon the Fair Market Rental for the Premises
as of the first day of the Option Term in question, the parties shall submit the
matter to binding appraisal in accordance with the following procedure: Within
thirty (30) days after the exercise of the option, the parties shall either (A)
jointly appoint an appraiser for this purpose or (B) failing this joint action,
separately designate a disinterested appraiser. No person shall be appointed or
designated an appraiser unless he or she has at least five (5) years experience
in appraising major commercial property in Santa Xxxxx County and is a member of
a recognized society of real estate appraisers. If, within thirty (30) days
after the appointment, the two appraisers reach agreement on the Fair Market
Rental for the Premises as of the first day of the Option Term in question, that
value shall be binding and conclusive upon the parties. If the two appraisers
thus appointed cannot reach agreement on the question presented within thirty
(30) days after their appointment, then the appraisers thus appointed shall
appoint a third disinterested appraiser having like qualifications. If within
thirty (30) days after the appointment of the third appraiser, a majority of the
appraisers agree on the Fair Market Rental of the Premises as of the first day
of the Option Term in question, that value shall be binding and conclusive upon
the parties. If within thirty (30) days after the appointment of the third
appraiser, a majority of the appraisers cannot reach agreement on the question
presented, then the three appraisers shall each submit their independent
appraisal to the parties, and the appraisal farthest from the median of the
three appraisals shall be disregarded and the mean average of the remaining two
appraisals shall be deemed to be to the Fair Market Rental of the Premises as of
the first day of the Option Term in question and shall be binding and conclusive
upon the parties. Each party shall pay the fees and expenses of the appraiser
appointed by it and shall share equally the fees and expenses of the third
appraiser. If the two appraisers appointed by the parties cannot agree on the
appointment of the third appraiser, they or either of them shall give notice of
such failure to agree to the parties and if the parties fail to agree upon the
selection of such third appraiser within ten (10) days after the appraisers
appointed by the parties give such notice, then either of the parties, upon
notice to the other party may request such appointment by the American
Arbitration Association, or on its failure, refusal or inability to act, may
apply for such appointment to the presiding judge of the Superior Court of Santa
Xxxxx County, California.
41. Initial Alterations.
A. Except as provided in Paragraph 42 below, Landlord shall
not be required to make any alterations, additions or improvements to the
Premises and the Premises shall be leased to Tenant in an "as-is" condition.
B. Tenant, at its expense, shall construct, furnish or install
all improvements, alterations, additions, equipment or fixtures within the
Premises that are necessary for Tenant's occupancy
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and use of the Premises (hereinafter referred to as "Tenant's Work"). Tenant
shall not commence any of Tenant's Work until Tenant has submitted to Landlord,
and Landlord has approved, plans and specifications for Tenant's Work. All of
Tenant's Work shall be performed by Tenant in conformity with the plans and
specifications submitted to and approved by Landlord. Tenant shall, at its sole
cost, obtain all required building permits and other governmental approvals
necessary to commence Tenant's Work. Tenant's work shall be subject to the
provisions of Paragraph 13 above. However, if the Tenant's Work consists only of
a generic office R&D build-out and Landlord approves the plans and
specifications for same, then, notwithstanding the provisions of Paragraph 13,
Tenant shall not be required to return the Premises to their existing condition
prior to Tenant's Work at the expiration or termination of the Lease Term.
C. If Tenant is not in default under this Lease and the Lease
is in full force and effect, then Landlord, at Tenant's request, shall reimburse
Tenant up to the sum of Eighty-Nine Thousand Two Hundred Seventy Dollars
($89,270.00) ("Landlord's Allowance") for the cost of Tenant's Work, in
accordance with the following procedures:
(i) Prior to commencing Tenant's Work, Tenant shall
submit to Landlord a copy of Tenant's contract with Tenant's general contractor
showing the total cost of Tenant's Work.
(ii) During the course of construction of Tenant's Work,
Landlord shall disburse to Tenant on account of Landlord's Allowance a fraction
of each progress payment due to Landlord's general contractor, which fraction
shall have as its numerator Sixty-Nine Thousand Two Hundred Seventy Dollars
($69,270.00) and shall have as its denominator the total cost of construction of
Tenant's Work as shown in the contract previously submitted to Landlord;
provided, however, that Landlord shall not be required to disburse to Tenant
more than Sixty-Nine Thousand Two Hundred Seventy Dollars ($69,270.00) until all
of the conditions set forth in Clause (iii) below have been satisfied. Tenant
shall pay the balance of each progress payment due to Tenant's general
contractor.
(iii) When Tenant's Work has been completed and Tenant is
open for business, then Landlord shall reimburse Tenant up to the sum of
Landlord's Allowance less amounts previously disbursed by Landlord pursuant to
Clause (ii) above for the costs of Tenant's Work provided that Tenant shall
furnish to Landlord the following:
(a) A statement from Tenant's architect certifying
that Tenant's Work has been completed in compliance with the plans and
specifications approved by Landlord and in compliance with all applicable
governmental laws, codes, regulations and ordinances;
(b) An itemized statement of such costs, certified as
correct by Tenant;
(c) Copies of paid invoices evidencing that all work
for which reimbursement is requested has been paid for in full by Tenant;
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(d) Unconditional mechanic's lien releases from Tenant's
general contractors, suppliers, materialmen and all subcontractors who have done
work or supplied materials to the Premises; and
(e) An estoppel certificate executed by Tenant as described in
Paragraph 28 of the Lease.
D. All cost of Tenant's Work in excess of Landlord's Allowance
shall be paid solely by Tenant.
42. Landlord's Warranties. Landlord makes the following warranties
to Tenant:
A. The Premises shall comply with the provisions of the
Americans With Disabilities Act (ADA) in effect on the date this Lease is
executed.
B. The HVAC/mechanical equipment shall be in good working
order on the Commencement Date of the Lease.
C. The roof membrane shall be "water tight" as of the
Commencement Date of the Lease, to be verified at the first rainy season.
43. Condition Precedent. This Lease and the obligations of Landlord
and Tenant hereunder are expressly conditioned upon the satisfaction of the
following condition precedent to the effectiveness of this Lease:
(a) This Lease shall have been approved by Landlord's first
mortgage lender, the Prudential Insurance Company of America.
If the foregoing condition precedent is not satisfied on or before July
1, 1996, then this Lease shall automatically terminate without liability of
either party to the other.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
dates set forth below.
TENANT:
CKS GROUP, INC.,
a Delaware corporation
Dated: By: /s/XXXXXXX X. XXXX
--------------- ----------------------------------------
Name: Xxxxxxx X. Xxxx
-------------------------------------
Title: EVP, CFO and Secretary
-------------------------------------
LANDLORD:
DEVCON ASSOCIATES XVI,
a California general partnership
Dated: By:
--------------- ----------------------------------------
Name:
-------------------------------------
Title: General Partner
-------------------------------------
Dated: By:
--------------- ----------------------------------------
Name:
-------------------------------------
Title: General Partner
-------------------------------------
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