================================================================================
EXHIBIT 10.28
OFFICE LEASE
Between
411 BOREL LLC
and
BLUE MARTINI SOFTWARE, INC.
================================================================================
TABLE OF CONTENTS
Page Paragraph
ALTERATIONS........................................... 6 13
ARBITRATION........................................... 14 30
ASSIGNMENT AND SUBLETTING............................. 7 20
ATTORNEY FEES......................................... 14 29
BUILDING PLANNING..................................... 6 14
COMPLIANCE WITH REGULATIONS........................... 6 17
CONDEMNATION.......................................... 12 24
DAMAGE TO THE PREMISES................................ 11 23
DEFAULT............................................... 13 28
DIRECT OPERATING EXPENSES............................. 8 21
ENTRY BY LANDLORD..................................... 5 10
ESTOPPEL CERTIFICATE.................................. 12 26
HAZARDOUS SUBSTANCES.................................. 14 33
HOLDING OVER.......................................... 12 27
IMPROVEMENT OF THE PREMISES........................... 3 4
INSURANCE............................................. 5 11
LETTER OF CREDIT...................................... 15 35
LIENS................................................. 6 16
NON-LIABILITY OF LANDLORD............................. 5 12
NOTICES............................................... 15 34
OPTION TO EXTEND...................................... 16 36
PARKING............................................... 3 6
PERSONAL PROPERTY TAXES............................... 7 18
REAL ESTATE TAXES AND ASSESSMENTS..................... 10 22
RENT.................................................. 1 2
REPAIRS AND MAINTENANCE BY TENANT..................... 3 7
REPAIRS BY LANDLORD................................... 5 9
RULES AND REGULATIONS................................. 7 19
SECURITY DEPOSIT...................................... 2 3
SIGNS/SIGNAGE......................................... 6 15
SUBORDINATION AND ATTORNMENT.......................... 12 25
SUCCESSORS AND ASSIGNS................................ 14 32
TERM.................................................. 1 1
USE OF THE PREMISES................................... 3 5
UTILITIES AND SERVICES................................ 4 8
WAIVER................................................ 14 31
OFFICE LEASE
THIS LEASE, executed this 5/th/ day of February, 2001, by and between 411 BOREL
LLC, (hereinafter referred to as "Landlord"), and BLUE MARTINI SOFTWARE, INC., a
---------------------------
Delaware Corporation, (hereinafter referred to as "Tenant");
---------------------
WITNESSETH
WHEREAS, Landlord is owner of a leasehold interest in that certain real property
on which an office building designated as Interland's Borel Place on the site
plan attached hereto as Exhibit A hereto (hereinafter referred to as the
---------
"Building") and certain appurtenant improvements (including, without limitation,
the parking area and landscaping) have been constructed, the address of which is
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ and County of ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇;
WHEREAS, all office space as shown on Exhibit A hereto shall be deemed to be the
---------
"Office Park"; and
WHEREAS, Landlord desires to lease to Tenant, and Tenant desires to lease from
Landlord, that portion of the SECOND (2ND) Floor of the Building delineated on
the floor plan attached as Exhibit B hereto (hereinafter referred to as the
---------
"Premises"), also known as Suite 205, consisting of approximately 7,953
--- -----
rentable square feet.
NOW, THEREAFTER, Landlord hereby leases the Premises to Tenant, and Tenant
hereby leases the Premises from Landlord, for the term, at the rent, and upon
and subject to the terms and conditions hereinafter set forth.
1. TERM. The term of this Lease shall be the period of approximately FOURTEEN
(14) months, commencing on the 1ST day of FEBRUARY, 2001, and ending on the
31ST day of MARCH of 2002, unless sooner terminated as hereinafter provided.
2. RENT.
(a) Tenant shall pay to Landlord, as rent for the Premises during the term
of this lease, the sums hereinafter set forth per month, payable in advance
on or before the first day of each month during the term hereof. Said rent
shall be subject to adjustment and shall be in addition to all other amounts
(including, without limitation, tax and cost increases) required to be paid
by Tenant pursuant to the provisions of this Lease. The rent will be paid
per the following schedule:
MONTH LEASE RATE/MONTH BASE RENT/MONTH
----- ---------------- ---------------
1-14 $7.25 psf, full service $ 57,659.25
-1-
(b) If the term of this Lease commences on a date other than the first day
of a calendar month, rent for the period from the date of commencement of
the term hereof through the last day of the calendar month in which such
term commences shall be prorated on the basis of a thirty-day month, and
rent for the first full and fractional month of fifteen days or less of the
term of this Lease shall be payable on the date Tenant submits signed Lease;
if the first month is fractional and is more than fifteen days, only the
prorated rent for this portion of the first month shall be payable on the
date Tenant submits signed Lease. In the event the term of this Lease ends
on a day other than the last day of the calendar month, rent for the period
from the first day of the last calendar month of such term to the end of
such term shall be prorated on the basis of a thirty-day month.
(c) The installments of rent specified herein shall be paid, without
deduction or offset, and without prior notice or demand, to Landlord at ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: Accounting
Department, or at such other address as Landlord may from time to time
specify by written notice to Tenant. All amounts of money payable by Tenant
to Landlord hereunder, if not paid when due, shall bear interest from the
due date until paid at the rate of ten percent (10%) per annum.
3. SECURITY DEPOSIT. Concurrently with the execution hereof, Tenant has paid
to Landlord the sum of
_____________________________________________________________ Dollars
($__________), (the "Security Deposit"), which sum shall be held by Landlord as
security for the performance by Tenant of the obligations to be performed by
Tenant hereunder. In the event Tenant fully performs all obligations to be
performed by Tenant hereunder, Landlord shall, upon expiration of the term of
this Lease or the earlier termination hereof pursuant to the provisions of
Paragraph 23 or Paragraph 24 hereof, remit to Tenant the amount of the Security
------------ ------------
Deposit. If, at any time during the term of this Lease, Tenant shall default in
the performances of any obligation to be performed by Tenant hereunder, Landlord
may, at its option, apply the Security Deposit or so much thereof as may be
necessary to compensate Landlord for any expense, loss or damage sustained by
Landlord as a result of said default. In the event of any such application by
Landlord, Tenant shall, upon written demand of Landlord, forthwith deposit with
Landlord a sufficient amount of cash to restore the Security Deposit to the
original amount thereof, and Tenant's failure to do so within ten (10) days
after receipt of such demand from Landlord shall carry with it the same
consequences as failure to pay any installment of rent due under this Lease. In
the event that this Lease should be terminated for any reason other than default
on the part of Landlord or damage or destruction to the demised Premises as
provided for in Paragraph 23 hereof, or a taking of the demised Premises for
------------
public use by right of eminent domain as provided for in Paragraph 24 hereof (in
------------
any of which events the Security Deposit, less any portion thereof which may
have been utilized by Landlord to cure any default or applied to any damages
suffered by Landlord as a result of Tenant's default, shall be refunded to
Tenant), Landlord shall have the right to retain the Security Deposit until the
expiration of the term of this Lease by lapse of time (whether or not this Lease
has been earlier terminated) so that the full damages of Landlord may be
ascertained. At the expiration of the term of this Lease by lapse of time,
provided Tenant has paid all of the rental herein called for and fully performed
all of the covenants and conditions on its part agreed to be performed, Landlord
shall return to Tenant the Security Deposit less any portion thereof which may
have been utilized by Landlord to cure any default or applied to any damages
suffered by Landlord. It is understood and agreed by Landlord and Tenant that
the provisions of this Paragraph 3 shall not operate as a limitation upon the
-----------
amount of damages to which Landlord may be entitled by virtue of any default
hereunder by Tenant.
*See Paragraph 35, Letter of Credit
-2-
4. IMPROVEMENT OF THE PREMISES. As promptly as practicable after the date of
execution of this Lease, Landlord shall undertake to prepare the Premises for
occupancy by Tenant in accordance with the provisions of the Work Letter and/or
Space Plan executed between Landlord and Tenant concurrently herewith. If the
improvements and alterations specified in said Work Letter and/or Space Plan are
not substantially completed prior to the commencement date of the terms of this
Lease set forth in Paragraph 1 hereof, and the failure or inability of Landlord
-----------
to complete the Premises was caused otherwise than by reason of delays
occasioned by Tenant, this Lease shall remain in full force and effect, however,
the term of this Lease and the obligation of Tenant to pay the installments of
rent specified in Paragraph 2 hereof, and all other charges in the nature of
-----------
additional rent, shall not commence until said improvements and alterations are
substantially completed and the Premises suitable for occupancy by Tenant and
the term of the Lease shall run for the full period of _________ (___) years;
and in no event whatsoever shall Landlord be liable for any damages caused by
any delay in completion for whatever reason nor shall this Lease be void or
voidable except, in case of Tenant's delay, at Landlord's election. If Tenant
makes any selections that vary from the building standards or require
improvements in excess of the standard allowances, and if the cost of such
different or additional materials of Tenant's selection exceeds Landlord's cost
of building standard work, Tenant shall pay to Landlord, as hereafter provided,
the difference between the cost of such different and/or additional materials
and the cost established by Landlord for standard building allowances. No
changes shall be made in any building standard work materials until Landlord has
submitted an estimate to Tenant in writing of the increased cost thereof, and
Landlord and Tenant have agreed in writing on the increased cost of such
different new materials and installation in excess of the cost of building
standard work. All amounts payable by Tenant to Landlord pursuant to this
Paragraph 4 shall be paid by Tenant to Landlord within thirty (30) days after
-----------
the rendering of bills therefore by Landlord or its contractor to Tenant, it
being understood that such bills may be rendered during the progress of the
performance of the work and/or the furnishing and installation of the materials
to which such bills relate. All improvements shall be surrendered by Tenant to
Landlord at the end of the initial or other expiration of the term of the Lease.
No credit shall be granted for the omission of materials where no replacement in
kind is made.
Landlord will shampoo carpets, otherwise the Premises is being Leased in an "as
is" basis.
5. USE OF THE PREMISES. Tenant shall use the Premises for software research
and development, sales, general office and administration, and for no other use
or purpose without the prior written consent of Landlord. No use shall be made
of the Premises which will increase the existing rate of insurance on the
Building or cause the cancellation of any insurance policy covering the
Building. Tenant shall not commit or suffer to be committed any waste upon the
Premises or any public or private nuisance or any other act or thing which may
disturb the quiet enjoyment of any other tenant in the Building, and shall not
use the Premises for any purpose or use that is in violation of any of the laws,
ordinances, regulations or rules of any public authority.
Tenant's personnel occupancy of the Premises shall be limited to 43 people.
Personnel occupancy beyond 43 people is subject to Landlord's prior approval,
and such approval shall not be unreasonably withheld subject to Tenant's
agreement to pay for reasonable building operating costs associated with
personnel loading in excess of 43 people.
6. PARKING. In accordance with the City of San Mateo Code, Landlord will
provide Tenant with a maximum of (27) non-exclusive parking spaces, as shown on
the site plan attached as Exhibit A hereto, during normal business hours.
---------
Landlord has no actual knowledge, without independent investigation or inquiry,
of any laws, statutes, ordinances, regulations or rules of any Governmental
agency that requires or may require in the future a fee be charged for parking
by Tenant or other tenants of the building. Should, however, there be any such
charges required in the future by any Governmental agency, these charges will be
shared by the Tenant and all other tenants of the building in proportion to the
space of the building occupied by each. Tenant and its employees shall comply
with all reasonable rules and regulations promulgated from time to time by
Landlord relating to the use of the parking area.
7. REPAIRS AND MAINTENANCE BY TENANT - NO OBLIGATION OF LANDLORD. Tenant agrees
at its expense to maintain the Premises in good condition and repair throughout
the term of this Lease, reasonable wear and tear excepted, and except for
matters which are the responsibility of Landlord hereunder, and damage by fire
or other casualty.
Landlord has no obligation and has made no promise to alter, remodel, improve,
repair, decorate or paint the Premises or any part thereof, except as specified
in Paragraph 4 above; no representations respecting the condition of the
-----------
Premises or the Building have been made by Landlord to Tenant, except as
specifically herein set forth.
-3-
8. UTILITIES AND SERVICES. Provided Tenant is not in default under any
provision of this Lease, Landlord shall furnish to the Premises, between the
hours of 8:00 a.m. and 6:00 p.m. on Monday through Friday of each calendar week
during the term of this Lease, legal holidays excepted, the following services
and utilities:
(a) Heat and air conditioning for the Premises;
(b) 110 volt/60 cycle electric current in the amounts sufficient for
lighting the Premises and powering customary business machines used thereon.
In the event Tenant utilizes the services and utilities described in
Paragraph (8)(a)& (b) at times and for purposes other than designated above,
---------------- ---
then Tenant shall pay the cost of said services and utilities.
(c) Janitorial and maintenance service, including sweeping, washing or
vacuuming of floors and floor coverings, window cleaning and replacement of
light bulbs and fluorescent tubes in all light fixtures installed in the
Premises by Landlord. Generally, janitorial services are provided during
hours other than 8:00 a.m. to 6:00 p.m. Monday through Friday.
Landlord shall also maintain the common entrances/exits, stairways and lavatory
facilities in the Building, and the parking area adjacent to the Building and
the access ways thereto, in a clean and orderly condition. Landlord shall not
be liable, however, for either the failure, or delay, to furnish any of the
services or utilities specified in this Paragraph 8, or the curtailment of such
-----------
services or utilities, where such failure or curtailment is caused by conditions
beyond the reasonable control of Landlord or by accidents, strikes, repairs, or
improvements to Premises, or the Building, nor shall any such failure
constitute a constructive eviction of Tenant, entitle Tenant to the abatement of
rent, relieve Tenant from observing and performing any of the provisions of this
Lease, or any other claims against Landlord.
Whenever heat generating equipment or lighting other than building standard
lights are used in the Premises by Tenant which affect the temperature otherwise
maintained by the air conditioning system, Landlord shall have the right, after
notice to Tenant, to install supplementary air conditioning facilities in the
Premises or otherwise modify the ventilating and air conditioning system serving
the Premises, and the cost of such facilities and modifications shall be borne
by Tenant. Tenant shall pay concurrently with the rent the cost of providing
all cooling energy to the Premises in excess of that furnished for normal office
use or during hours requested by Tenant when air conditioning is not otherwise
to be furnished by Landlord. If Tenant requires power in excess of that
provided for normal office use in the Building or if Tenant installs equipment
requiring power in excess of that provided for normal desk-top office equipment
or normal copying equipment, Tenant shall pay for the cost of such excess power,
together with the cost of installing any additional risers or other facilities
that may be necessary to furnish such excess power to the Premises. Nothing
contained in the prior sentence shall limit the obligation of Tenant to pay for
power and other utilities under normal use as set forth in Paragraph 21(b)
---------------
below, as opposed to power and other utilities of Tenant's particular use of the
Premises. Failure to make timely payment shall carry the same consequences as
the failure to make timely payment of rent.
Landlord may impose a reasonable charge for any utilities and services,
including, without limitation, air conditioning, electricity, and water,
provided by Landlord by reason of: (i) any use of the Premises at any time other
than the hours set forth above; (ii) any use beyond what Landlord agrees herein
to furnish; (iii) special electrical, cooling and ventilating needs created by
Tenant's telephone equipment, computers, electronic data processing equipment
and other similar equipment or uses; or (iv) additional electrical consumption
resulting from the use by Tenant of high voltage desk or floor lamps. Landlord,
at its option, may require installation of metering devices, at Tenant's
expense, for the purpose of metering Tenant's utility consumption.
-4-
9. REPAIRS BY LANDLORD. Except as otherwise provided in Paragraph 23 hereof,
------------
Landlord agrees at its expense to maintain in good condition and repair
throughout the term of this Lease the roof, exterior walls and common areas of
the Building (including the parking lot and landscaping), and to repair or
replace all or any part of the plumbing, gas lines, electric wiring, and heating
and ventilating ducts located in the Building when such repair or replacement is
necessitated otherwise than through the fault of Tenant. Landlord shall not be
responsible for damage to, or destruction of, property located on the Premises
by reason of defects in those portions of the Premises which Landlord is
obligated to maintain or replace.
10. ENTRY BY LANDLORD. Tenant agrees to permit Landlord to enter the Premises
at reasonable times (except in case of emergency) for the purpose of inspecting
the same, showing the Premises to prospective purchasers, mortgagees, or
tenants, making any necessary repairs or additions to the Premises, the Premises
of another tenant or to the Building and performing any work therein that may be
necessary to comply with any laws, ordinances, rules, regulations or
requirements of any public authority or of the Board of Fire Underwriters or any
similar body, or that Landlord may deem necessary to prevent waste or
deterioration in connection with the Premises, including without limitation any
repairs or other work which Tenant is obligated to make or perform under the
terms of this Lease and which Tenant has failed or neglected to make or perform
after receipt of written demand by Landlord that the same be made or performed.
In the event Landlord performs any work which Tenant is obligated to perform
under the terms of this Lease, Tenant shall pay to Landlord, within five (5)
business days from the date of receipt by Tenant of a statement therefor, the
cost incurred by Landlord in performing the same. Nothing herein shall imply
any duty on the part of Landlord to do any such work which, under any provision
of this Lease, Tenant may be required to perform and the performance thereof by
Landlord shall not constitute a waiver of any default by Tenant in failing to
perform the same. Landlord may, during the progress of any work in the
Premises, keep and store upon the Premises all necessary materials, tools, and
equipment. Landlord shall not in any event be liable for inconvenience,
annoyance, disturbance, loss of business or other damage to Tenant by reason of
making repairs or the performance of any work in the Premises, or on account of
bringing materials, supplies and equipment to or through the Premises during the
course thereof, and the obligation of Tenant under this Lease shall not thereby
be affected in any manner whatsoever.
11. INSURANCE. At all times during the term of this Lease, Tenant shall
maintain in force, at its sole cost and expense, public liability insurance with
coverage in the amount of Two Million Dollars ($2,000,000) for property damage,
Two Million Dollars ($2,000,000) for bodily injury to or death of any one
person, and Two Million Dollars ($2,000,000) for bodily injury or death as a
result of any single accident or occurrence, occurring on or about the Premises.
Such policy or policies of insurance shall be with insurers and in such form as
Landlord may reasonably approve and each such policy shall name Landlord as an
additional insured, thereunder. Each such policy shall contain a waiver by the
insurer thereunder of its right of subrogation against Landlord, and shall
provide that it may not be cancelled or the limits of coverage materially
changed, without at least ten (10) days prior written notice to Landlord.
Tenant shall promptly deliver a copy of each such policy or certificates of
insurance manifesting the required coverage to Landlord.
12. NON-LIABILITY OF LANDLORD. Tenant shall defend, indemnify, hold and save
Landlord free and harmless from any and all liability or damage of every kind or
character caused to property or to persons in or about the Premises for any
reason whatsoever except for liability or damage caused by negligence of
Landlord or Landlord's authorized agents or contractors, or liability for a
breach of this Lease by Landlord. Landlord shall not be liable for any damage,
loss or injury to the property of Tenant, or any other person, suffered on, in
or about the Premises by reason of the condition of the Premises, by reason of
fire, earthquake, action of the elements, or any other casualty, or by reason of
the act of Tenant, its agents or employees, or third persons.
-5-
13. ALTERATIONS. Tenant shall not make or permit to be made any alterations,
changes or additions in or to the Premises without the prior written consent of
Landlord, which shall not be unreasonably withheld, conditioned or delayed. Any
such approved changes or additions shall be done either by or under the
direction of Landlord at the cost of Tenant, shall become immediately the
property of Landlord, and shall remain upon and be surrendered with the Premises
upon expiration or earlier termination of the term of this Lease. Any movable
furniture remaining on the Premises at the end of the term hereof shall be
removed by Tenant or if not so removed shall, at the option of Landlord, become
the property of Landlord.
14. BUILDING PLANNING. In the event Landlord requires the Premises for use in
conjunction with another suite or for other reasons connected with the building
planning program, Landlord, upon notifying Tenant in writing, shall have the
right to move Tenant to space in the Building of which the Premises form a part,
at Landlord's sole cost and expense, and the terms and conditions of the
original lease shall remain in full force and effect, save and excepting that
the Premises shall be in a new location with equal or greater square footage and
similar office configuration. However, if the new space does not meet with
Tenant's approval, Tenant shall have the right to cancel said Lease upon giving
Landlord ninety (90) days written notice within ten (10) days of receipt of
Landlord's notification.
15. SIGNS/SIGNAGE Tenant shall not place or affix any sign in, on or about the
Premises or the Building which is visible from the exterior of the Premises,
without the prior written consent of Landlord. Building standard signage (suite
door, floor lobby and main building directory) will be provided by Landlord.
16. LIENS. Tenant shall keep the Premises and the Building free from any and
all liens and claims arising out of any work performed, materials furnished or
obligations incurred by Tenant, and shall indemnify, defend and hold Landlord
harmless from and against any liens and encumbrances arising out of any work
performed or materials furnished by or at the request of Tenant. In the event
that Tenant shall not, within twenty (20) days following the imposition of any
such lien, cause such lien to be released of record by payment or posting of a
proper bond, Landlord shall have, in addition to all other remedies provided
herein and by law, the right, but not the obligation, to cause the same to be
released by such means as it shall deem proper, including payment of the claim
giving rise to the lien. All such sums paid by Landlord and all expenses
incurred by Landlord in connection therewith, including, without limitation,
attorney's fees and court costs, shall be payable by Tenant to Landlord on
demand with interest at the rate of ten percent (10%) per annum from the date of
payment by Landlord. Landlord shall have the right at all times to post and
keep posted on the Premises any notices permitted or required by law, or which
Landlord shall deem proper, for the protection of Landlord and the Premises, and
any other party having an interest therein, from mechanics' and materialmen's
liens, and Tenant shall give to Landlord at least ten (10) business days prior
written notice of the expected date of commencement of any work relating to
additions or alterations of the Premises to the extent same may be approved by
Landlord in accordance with Paragraph 13 above.
------------
17. COMPLIANCE WITH REGULATIONS. At all times during the term of this Lease,
Tenant shall comply with and conform to all laws, ordinances, regulations,
requirements and orders of all municipal and governmental bodies which relate in
any manner to the use or occupancy of the Premises. The judgment of any court
of competent jurisdiction or the admission by Tenant in any action or proceeding
against Tenant, whether Landlord be a party thereto or not, that Tenant has
violated any such law, ordinance, requirement or order in the use of the
Premises, shall be conclusive of that fact as between Landlord and Tenant.
-6-
Anything to the contrary contained in this Lease notwithstanding, Tenant's
obligation to comply with and confirm to all laws, ordinances, regulations,
requirements and orders of all municipal and governmental bodies shall not
include any remediation of preexisting non-compliance or work to be performed
outside of the premises.
18. PERSONAL PROPERTY TAXES. Tenant agrees to pay, before delinquency, any and
all taxes levied or assessed against the equipment, furniture, trade fixtures
and other personal property of Tenant located on or about the Premises at any
time during the term of this Lease.
19. RULES AND REGULATIONS. At all times during the term of this Lease, Tenant
shall comply with the rules and regulations for the Building which are attached
as Exhibit C and incorporated herein by reference. Tenant agrees that Landlord
---------
shall have the right to reasonably amend said rules and regulations and to
promulgate reasonable new rules and regulations applicable to all tenants in the
Building which relate to their use and occupancy thereof. Landlord shall not be
responsible to Tenant for the nonperformance by any other tenant or occupant of
any of said rules and regulations.
20. ASSIGNMENT AND SUBLETTING, Tenant for itself, its successors and assigns,
expressly covenants that it shall not by operation of law or otherwise assign,
sublet, hypothecate, encumber or mortgage this Lease, or any part thereof, or
permit the Premises to be used by others without the prior written consent of
Landlord in each instance which shall not be unreasonably withheld. Any attempt
by Tenant to assign, sublet, encumber or mortgage this Lease shall be null and
void. The consent by Landlord to any assignment, mortgage, hypothecation,
encumbrance, subletting or use of the Premises by others, shall not constitute
a waiver of Landlord's right to withhold its consent to any other or further
assignment, subletting, mortgage, encumbrance or use of the Premises by others.
Without the prior written consent of Landlord, this Lease and the interest
therein of any assignee of Tenant herein, shall not pass by operation of law or
otherwise, and shall not be subject to garnishment or sale under execution in
any suit or proceeding which may be brought against or by Tenant or any assignee
of Tenant. The absolute and unconditional prohibitions contained in this
Paragraph 20 and Tenant's agreement thereto are material inducements to Landlord
to enter into this Lease with Tenant and any breach thereof shall constitute a
material default hereunder permitting Landlord to exercise all remedies provided
for herein or by law or in equity on a default of Tenant. If Tenant requests
Landlord's consent to an assignment of this Lease or subletting of all or any
part of the Premises, Tenant shall submit to Landlord: (1) the name of the
proposed assignee or subtenant; (2) the terms of the proposed assignment or
subletting together with a conformed or photostatic copy of the proposed
assignment or sublease; (3) the nature of business of the proposed assignee or
subtenant's business and its proposed use of the Premises; (4) such information
as to its financial responsibility and general reputation as Landlord may
reasonably require; and (5) a summary of plans and specifications for revising
the floor layout of the Premises. Tenant will reimburse Landlord for any
reasonable legal fees or for any other expenses incurred as a consequence of
each assignment and subletting.
Upon the receipt of such information from Tenant, Landlord shall have the
option, to be exercised in writing within thirty (30) days after such receipt,
to cancel and terminate this Lease if the request is to assign this Lease or to
sublet all of the Premises or, if the request is to sublet a portion of the
Premises only, to cancel and terminate this Lease with respect to such portion,
in each case as of the date set forth in Landlord's notice of exercise of such
option.
If Landlord shall cancel this Lease, Tenant shall surrender possession of the
Premises, or the portion of the Premises which is the subject of the request, as
the case may be, on the date set forth in such notice. If this Lease shall be
canceled as to a portion of the Premises only, the Monthly Base Rent and all
additional rent payable by Tenant hereunder shall be abated proportionately
according to the ratio that the number of square feet in the portion of space
surrendered (as computed by Landlord) bears to the rentable area of the
Premises.
-7-
If Landlord shall fail to exercise its option to cancel and terminate this Lease
with respect to all or part of the Premises as above provided, Landlord shall
not thereby be deemed to have consented to the proposed assignment or
subletting.
If Landlord shall consent to a sublease or an assignment pursuant to the request
from Tenant, Tenant shall cause to be executed by its assignee or subtenant an
agreement to perform faithfully and to assume and be bound by all of the terms,
covenants, conditions, provisions and agreements of this Lease for the period
covered by the assignment or sublease and to the extent of the space sublet or
assigned. An executed counterpart of each sublease or assignment and assumption
of performance by the sublessee or assignee, in form and substance approved by
Landlord, shall be delivered to Landlord within five (5) days prior to the
commencement of occupancy set forth no such assignment or sublease; shall be
binding on Landlord until Landlord has received such counterpart as required
herein.
If Landlord shall give its consent to any assignment of this Lease or to any
sublease, Tenant shall in consideration therefore pay to Landlord as additional
rent fifty percent (50%) of the following amounts with reasonable deductions for
brokerage fees and legal costs only for expenses incurred by Tenant in
connection with such assignment or subletting;
(i) In the case of a sublease, any rents, additional charge or other
consideration payable under the sublease to Tenant by the subtenant
which is in excess of the Monthly Base Rent and all additional rent
accruing during the term of the sublease in respect of the subleased
space (at the rate per square foot payable by Tenant hereunder)
pursuant to the terms hereof (including, but not limited to, sums paid
for the sale or rental of Tenant's fixtures, leasehold improvements,
equipment, furniture, furnishings or other personal property, less the
then net unamortized or undepreciated cost thereof determined on the
basis of Tenant's federal income tax returns); and
(ii) In the case of an assignment, an amount equal to all sums and other
considerations paid to Tenant by the assignee for or by reason of such
assignment (including, but not limited to, sums paid for the sale of
Tenant's fixtures, leasehold improvements, equipment, furniture,
furnishings or other personal property less the then net unamortized
or undepreciated cost thereof determined on the basis of Tenant's
federal income tax returns).
The sums payable as set forth above shall be paid to Landlord as additional rent
as and when paid by the assignee or subtenant to Tenant.
In no event shall any assignment or subletting to which Landlord may consent,
release or relieve Tenant from its obligations to fully observe or perform all
of the terms, covenants and conditions of this Lease on its part to be observed
or performed.
Notwithstanding anything to the contrary contained in this Lease, Tenant may
assign this Lease, or any portion thereof, without Landlord's consent, to any
entity which controls, is controlled by, or is under common control with Tenant;
to any entity which results from a merger of, reorganization of, or
consolidation with Tenant; to any entity engaged in a joint venture with Tenant;
or to any entity which acquires substantially all of the stock or assets of
Tenant, as a going concern, with respect to the business that is being conducted
in the Premises (hereinafter each a "Permitted Transfer").
21. DIRECT OPERATING EXPENSES. In addition to the rent specified in Paragraph 2
-----------
hereof, Tenant and Landlord agree that an annual adjustment in the rent shall be
made as hereinafter provided:
(a) Landlord and Tenant covenant and agree that the rent provided for
herein is subject to annual review and adjustment in order that the
Tenant shall pay for its individual share of any increase of the
Direct Operating Expenses (as hereinafter defined) of the Office Park.
-8-
Such review and adjustment shall be made as of the first day of the first
full calendar month of each Lease Year (as hereinafter defined) during the
term of this Lease. For the purpose of this Lease, the term "Lease Year"
shall mean each consecutive twelve (12) calendar month period during the
term of this Lease commencing on the first day of the first full calendar
month during or after the calendar month Tenant commences to pay rent
pursuant to Paragraph 2 above. The Base Year with which all future year
-----------
comparisons shall be made is N/A Any future year increase over the Base
----
Year shall be paid on a prorata basis by Tenant, in the following manner:
Prior to the commencement of the second and each subsequent Lease Year (or
as soon thereafter as is reasonably practicable), Landlord shall estimate
the Direct Operating Expenses for the Office Park for such Lease Year. In
the event that for any Lease Year, Landlord's estimated Direct Operating
Expenses for the Office Park shall exceed the Direct Operating Expenses for
the Base Year, Tenant shall pay monthly as additional rent, concurrently
with Tenant's monthly rental payment during said Lease Year, an amount equal
to one-twelfth (1/12) of such excess, divided by the amount of square feet
contained in the Office Park, times the amount of square footage in the
demised Premises. For the purposes of this Paragraph 21, the amount of
------------
square footage in the demised Premises shall be deemed to be
N/A (N/A) useable square feet, and the
---------------------------------------- ----
amount of square footage in the Office Park shall be deemed to be One
Hundred Twenty Six Thousand (126,000) square feet.
(b) "Direct Operating Expenses" as used herein shall include all costs of
administration, operation and maintenance of the Office Park and the real
property on which said Office Park is situated, together with the
landscaping and parking areas for the Office Park as determined in
accordance with generally accepted accounting practices consistently
applied, including, without limitation, the following:
Property and public liability insurance premiums; the cost of labor,
materials and services for the operation and maintenance of the Office Park,
including, without limitation, water and sewer use charges, garbage and
waste disposal, license, permit and inspection fees (except for any new
construction or alterations attributable to a specific Tenant or Office Park
expansion), heat, light, power and other utilities under normal use, air
conditioning and ventilation, elevator service, plumbing service, janitorial
and cleaning service, costs of maintenance contracts, watchmen, guards and
personnel to the extent engaged in administration, operation and maintenance
of the Office Park and its surrounding real property, together with payroll
taxes and employee benefits applicable thereto; supplies, materials,
salaries of foremen and supervisory employees whose duties directly concern
the management and operation of the Office Park; the cost of maintaining and
repairing the roadways, sidewalks, curbs, gutters and parking surfaces
located upon the real property on which the Office Park is situated; and in
providing cleaning and gardening services to said real property; the cost of
repairs and general maintenance, exclusive of expenses such as the
alteration of Premises for the accommodation of a specific tenant or
tenants, and exclusive also of expenditures made for capital investments or
improvements, except that in the event Landlord eliminates or reduces Direct
Operating Expenses as a result of a capital investment of labor-saving
devices, then the cost of the capital investment or labor-saving devices
will be amortized over a period of time to be determined by Landlord, but in
such a manner so as not to exceed the cost that would otherwise have been
billed to Tenant prior to the installation of such equipment or labor-saving
devices.
(c) As soon as reasonably practicable after the first day of the first full
calendar month of each Lease Year during the term hereunder, Landlord shall
prepare and deliver to Tenant a statement of the actual Office Park Direct
Operating Expenses incurred during the Lease Year. The statement shall
further compare the Direct Operating Expenses to those of the Base Year, and
shall indicate Tenant's prorata share of the excess, if any.
If such statement shows an amount that is more than the previously estimated
share of Tenant of Direct Operating Expenses for the Office Park for said
Lease Year, Tenant shall pay the deficiency to Landlord within thirty (30)
days after delivery of the statement. Failure to make timely payment shall
carry the same consequences as the failure to make timely payment of rent.
-9-
If such statement shows that Tenant has overpaid Tenant's share of Direct
Operating Expenses, then the difference shall be satisfied by a deduction
from Tenant's next monthly rental payment(s) or, if at the end of the Lease,
with a cash payment from Landlord to Tenant.
During a period of thirty (30) days after receipt of such statement, Tenant
shall have the right to inspect the books and any other pertinent records of
Landlord, during normal business hours, for the purpose of verifying such
statement. Tenant may contest the Landlord's computation of the amount of
increase or decrease, either in whole or in part, by paying any undisputed
portion when giving Landlord written notice stating its objections and
provided that such notice is received by Landlord not later than five (5)
days after the expiration of said thirty (30) day period.
(d) If for any reason, other than the default of Tenant, this Lease shall
terminate on a day other than the last day of the Lease Year, the amount of
adjustment, if any, in rent payable by Tenant applicable to the Lease Year
in which such termination shall occur, shall be prorated on the basis which
the number of days from the commencement of such Lease Year to and including
such termination date bears to Three Hundred Sixty Five (365).
22. REAL ESTATE TAXES AND ASSESSMENTS. In addition to the rent specified in
Paragraph 2 hereof, Tenant and Landlord agree that an annual adjustment in the
-----------
rent shall be made as hereinafter provided:
(a) Landlord and Tenant covenant and agree that the rent provided for
herein is subject to annual review and adjustment in order that Tenant shall
pay for his individual share of any increase in the amount of real estate
taxes and assessments levied or assessed against the Office Park or the
income derived from the Office Park, exclusive of Federal and State Income
Taxes. "Office Park" as used in this Lease shall include the real property
on which the Building is situated, together with all of the real property
described in Exhibit A hereto.
---------
Such review and adjustment shall be made as of the first full calendar month
of each Lease Year during the term of this Lease. The Base Year with which
all future year comparisons shall be made is N/A.
---
Any future year increase over the Base Year shall be paid on a prorata basis
by Tenant, in the following manner:
Prior to the commencement of the second and each subsequent Lease Year (or
as soon thereafter as is reasonably practicable), Landlord shall estimate
the amount of taxes and assessments for the Office Park for such Lease Year.
In the event that for any Lease Year Landlord's estimate for the amount of
taxes and assessments for the Office Park shall exceed the taxes and
assessments for the Base Year, Tenant shall pay monthly as additional rent,
concurrently with Tenant's monthly rental payment during said Lease Year, an
amount equal to one-twelfth (1/12) of the excess, divided by the amount of
square feet contained in the Office Park, times the amount of square footage
in the demised Premises. For the purposes of this Paragraph 22, the amount
------------
of square footage in the demised Premises shall be deemed to be
N/A (N/A) useable square feet, and the
------------------------------------- -----
amount of square footage in the Office Park shall be deemed to be One
Hundred Twenty Six Thousand (126,000) square feet.
(b) As soon as reasonably practicable after the first day of the first full
calendar month of each Lease Year during the term hereunder, Landlord shall
prepare and deliver to Tenant a statement of the actual taxes and
assessments levied or assessed during said Lease Year. The statement shall
further compare the actual taxes and assessments to those of the Base Year
and shall indicate Tenant's prorata share of the excess, if any.
-10-
If such statement shows an amount that is more than the previously estimated
share of Tenant taxes and assessments for the Office Park for said Lease
Year, Tenant shall pay the deficiency to Landlord within thirty (30) days
after delivery of the statement. Failure to make timely payment shall carry
the same consequences as the failure to make payment of rent.
If such statement shows that Tenant has overpaid Tenant's share of taxes and
assessments, then the difference shall be satisfied by a deduction from
Tenant's next monthly rental payment(s) or, if at the end of the Lease, with
a cash payment to the Tenant from Landlord.
During a period of thirty (30) days after receipt of such statement, Tenant
shall have the right to inspect the books and any other pertinent records of
Landlord, during normal business hours, for the purpose of verifying such
statement. Tenant may contest the Landlord's computation of the amount of
increase or decrease, either in whole or in part, by paying any undisputed
portion when giving Landlord written notice stating its objections and
provided that such notice is received by Landlord not later than five (5)
business days after the expiration of said thirty (30) day period.
(c) If for any reason, other than the default of Tenant, this Lease shall
terminate on a day other than the last day of the Lease Year, the amount of
adjustment, if any, in rent payable by Tenant applicable to the Lease Year
in which such termination shall occur, shall be prorated on the basis which
the number of days from the commencement of such Lease Year to and including
such termination date bears to three hundred and sixty-five (365).
23. DAMAGE TO THE PREMISES.
(a) In the event any portion of the Premises is damaged by fire,
earthquake, action of the elements or any other casualty, and such damage
can be repaired and the Premises restored to their former condition within
ninety (90) days from the date of such damage, then, unless otherwise
provided in Paragraph 23(b) hereof, Landlord shall, at its expense proceed
---------------
immediately to make such repairs, provided that any mortgagee or lender of
Landlord shall have made available to Landlord for such repairs any and all
insurance proceeds otherwise payable to Landlord. If such insurance
proceeds are not made available to Landlord, Landlord shall have the option
either (i) to pay any shortfall from his own funds and complete such repairs
as aforesaid, or (ii) terminate this Lease. However, Landlord's obligation
to repair shall be limited to those items that Landlord was obliged to build
at its own expense. Notwithstanding the foregoing, in the event that there
are insufficient insurance proceeds to cover the cost of repairs, Tenant may
avoid a termination of this Lease by depositing sufficient funds to cover
any shortfall in an escrow account with a depository mutually satisfactory
to Landlord and Tenant, such funds to be held and disbursed by such
depository pursuant to written escrow instructions executed by both Landlord
and Tenant. Such partial destruction shall not serve to terminate this
Lease, but Tenant shall be entitled to a proportionate abatement of the
installments of rent and all other charges in the nature of additional rent
payable during the period commencing on the date of such partial destruction
and ending upon completion of all such repairs, which abatement shall be
based upon the portion of the Premises rendered unsuitable for use by Tenant
during such period.
(b) In the event (i) any portion of the Premises is damaged by fire,
earthquake, action of the elements or any other casualty, and such damage
cannot be repaired and the Premises restored to their former condition
within ninety (90) days from the date of such damage, or (ii) the Building
is damaged by any such casualty and the cost of repairing such damage will
exceed thirty percent (30%) of the replacement cost (exclusive of
foundations) of the Building, Landlord may, at its option, elect to
terminate this Lease as of the date of the occurrence of such damage. In
the event Landlord fails to exercise said option to terminate by written
notice to Tenant within thirty (30) days from the date of occurrence of such
damage, Landlord shall promptly undertake to restore the Premises and the
Building to their former condition. Tenant shall be entitled to a
proportionate abatement of the installments of rent and all charges in the
nature of additional rent payable during the period commencing on the date
of such damage and ending upon completion of all such
-11-
repairs, which abatement shall be based upon the portion of the Premises
rendered unsuitable for use by Tenant during such period.
(c) Notwithstanding the provisions of Subparagraph (a) of this Paragraph
---------
23, in the event any portion of the Premises is damaged by fire, earthquake,
--
action of the elements or any other casualty, and such damage cannot be
repaired and the Premises restored to their former condition within one
hundred eighty (180) days from the date of such damage, this Lease shall
terminate as of the date of occurrence of such damage.
24. CONDEMNATION. In the event all or a substantial portion of the Premises
shall be taken or condemned under power of eminent domain, or by purchase in
lieu thereof, this Lease shall terminate as of the date possession of that
portion of the Premises so taken, condemned or purchased is surrendered to the
condemning or purchasing authority or body. All compensation awarded or paid
upon such condemnation or purchase shall belong to and be the sole property of
Landlord; provided, however, that any portion of the compensation awarded or
paid for or on account of any loss of business by Tenant or for damage to, or
the cost of removal or relocation of, the furniture, trade fixtures and
equipment of Tenant, shall be paid to and retained by Tenant.
25. SUBORDINATION AND ATTORNMENT. Tenant agrees that it shall, promptly upon
the request of Landlord at any time or times during the term of this Lease,
execute and deliver such documents and other instruments as Landlord may
reasonably require to cause this Lease to be and become subject and subordinate
to any mortgage or deed of trust, and any renewal, extension, replacement or
modification thereof, covering the real property on which the Building is
located, provided that such mortgage or deed of trust shall contain provisions
to the effect that so long as Tenant shall not be in default in the performance
of any obligations to be performed by Tenant hereunder, the mortgagee, trustee
or beneficiary, as the case may be, shall not terminate this Lease or the
interest of Tenant in the Premises through foreclosure of such mortgage or deed
of trust, and shall not disturb the possession and use of the Premises by
Tenant. Tenant agrees that in the event of the enforcement, by judicial
foreclosure, exercise of the power of sale, or otherwise, of any mortgage or
deed of trust covering the real property on which the Building is located by the
mortgagee, trustee or beneficiary thereunder or thereof, as the case may be,
Tenant shall automatically become the lessee of any successor in interest in
title to said real property as a result of such enforcement, without change in
the terms of this Lease. Tenant further agrees that upon request of any such
successor in interest, Tenant will execute and deliver to such successor in
interest an instrument or instruments confirming such attornment.
26. ESTOPPEL CERTIFICATE. Tenant agrees that it shall, from time to time at the
request of Landlord, and within ten (10) days after such request, execute,
acknowledge and deliver to Landlord a statement in writing certifying, if such
be the case, that this Lease is unmodified and in full force and effect or, if
this Lease has been modified, that it is in full force and effect as so
modified, the date of commencement of the term of this Lease, the due date of
the last installment of rent paid by Tenant to Landlord, and such other
information as Landlord may reasonably request. Tenant understands that any
such statement may be delivered by the Landlord to, and relied upon by,
prospective purchasers of the Building and by existing or prospective mortgagees
or beneficiaries under mortgages or deeds of trust covering the Building in
which the Premises are located.
27. HOLDING OVER. If Tenant remains in possession of all or any part of the
Premises after the expiration of the term hereof, with or without the express
consent of Landlord, such tenancy shall be from month-to-month only, and not a
renewal hereof or an extension for any further term, and in such case, rent and
other monetary sums due hereunder shall be payable at a rate equal to one
hundred fifty percent (150%) of the rent in effect just prior to such holdover
thereafter, for the first thirty (30) days and the greater of two hundred
percent (200%) of the rent in effect just prior to holdover thereafter or one
hundred fifty percent (150%) of Fair Market Rate as determined reasonably by
Landlord at its sole discretion, and if such holding over is without the express
consent of Landlord, Tenant shall be liable to Landlord for all reasonable costs
and damages caused to Landlord by such holding over. Such month-to-month
tenancy shall be subject to every other term, covenant and agreement contained
herein. In the event Landlord fails to deliver the Premises on the Commencement
Date because the previous occupant of the Premises is holding over, or for any
other cause beyond Landlord's control, Landlord shall not be
-12-
liable to Tenant for any damages as a result of Landlord's delay in delivering
the Premises, nor shall any delay affect the validity of this Lease, and the
Commencement Date of this Lease shall be postponed until the Premises can be
delivered by Landlord. Notwithstanding the foregoing, if Landlord fails to
deliver the Premises within one hundred twenty (120) days after the Commencement
Date, this Lease shall be voidable without further obligation or liability of
either party, at the option of Tenant, upon written notice to Landlord within
five (5) days after the expiration of said one hundred twenty (120) day period.
In the event of any postponement of the Commencement Date as provided in this
Paragraph 27, the Lease Term shall remain the same, but the Expiration Date
shall be extended for the same number of days the Commencement date was
postponed.
28. DEFAULT. In the event that:
(a) Tenant shall default in the payment of rent or any other amounts
required hereby to be paid by Tenant to Landlord hereunder, when the same
shall become due, and such default shall continue for a period of ten (10)
consecutive days; or
(b) Tenant shall abandon or vacate the Premises for a period of thirty (30)
consecutive days; or
(c) Tenant shall default in the performance of any obligation required to
be performed by Tenant under this Lease (other than abandonment or the
payment of rent or any other amounts required hereby to be paid by Tenant
hereunder) and shall fail, for a period of twenty (20) days after written
notice from Landlord specifying such default, to cure said default (unless
such default cannot be cured within twenty (20) days, in which case Tenant
shall commence to cure said default within said twenty (20) days and shall
cure the same with all reasonable dispatch); or
(d) Tenant shall be adjudicated bankrupt, or a petition by or against
Tenant for reorganization or adjustment of its obligations under the
Bankruptcy Act or any other existing or future insolvency or bankruptcy
statute shall be approved, or Tenant shall make a general assignment of its
property for the benefit of creditors, or a receiver or trustee shall be
appointed to take control of the business or assets of Tenant;
then and in each such case Landlord may, at its option, terminate this Lease, or
without terminating this Lease re-enter the Premises and for the account of
Tenant relet the same or any portion or portions thereof for all or any part of
the unexpired term of this Lease upon such terms and conditions as Landlord may
elect. In the event of any such termination of this Lease by Landlord, Landlord
shall be entitled to recover from Tenant (i) the worth at the time of award of
the unpaid rent which had been earned at the time of termination; (ii) 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; (iii) 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 (iv) 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.
Efforts by Landlord to mitigate the damages caused by Tenant's breach of this
Lease shall not constitute a waiver by Landlord of its right to recover damages
hereunder. In the event of such reletting without terminating this Lease,
Landlord shall be entitled to recover from Tenant monthly the difference between
the monthly installments of rent and such other amounts as may be payable by
Tenant to Landlord pursuant to the provisions hereof over the total monthly
rental received by Landlord upon such reletting, after first deducting therefrom
all expenses reasonably incurred by Landlord in such reletting and in repairing,
renovating, remodeling and altering the Premises for the purpose of such
reletting. Landlord shall not be deemed to have elected to terminate this Lease
or the liability of Tenant to pay rent thereafter to accrue or its liability for
damages under any of the provisions hereof by any such re-entry or by any action
in unlawful detainer or otherwise to obtain possession of the Premises, unless
Landlord shall have notified Tenant in writing that it has so elected to
terminate this Lease. For purposes of this
-13-
Paragraph 28, the following shall not constitute termination of Tenant's right
------------
to possession: (A) acts of maintenance or preservation or efforts to relet the
Premises; or (B) the appointment of a receiver upon initiative of Landlord to
protect the Landlord's interest under this Lease. Nothing herein contained
shall be construed as obligating Landlord to relet the whole or any part of the
Premises. In the event of any entry or taking possession of the Premises,
Landlord shall have the right, but not the obligation, to remove therefrom all
or any part of the personal property located therein and may place the same in
storage at a public warehouse selected by Landlord at the expense and risk of
the owner or owners thereof. The remedies provided Landlord hereunder shall be
cumulative and shall be in addition and supplemental to all other rights or
remedies which Landlord may lawfully pursue in the event of any breach or
threatened breach by Tenant of any of the provisions of this Lease.
29. ATTORNEYS FEES. In the event any action or proceeding is instituted at any
time by either party hereto against the other for the purpose of determining or
enforcing the rights of either party, the party prevailing in such action shall
be entitled to recover from the other party all costs reasonably incurred by the
prevailing party in connection with such action or proceeding, including the
reasonable fees of its attorneys as determined by the court.
30. ARBITRATION. At the option of Landlord, any controversy or dispute arising
under the terms or provisions of this Lease shall be determined by arbitration.
Such arbitration shall be conducted pursuant to the provisions of the laws of
the State of California then in force applicable to such proceedings and, to the
extent not inconsistent therewith, the rules of the American Arbitration
Association.
31. WAIVER. No waiver of any default of Tenant hereunder shall be implied from
any omission by Landlord to take any action on account of such default, and no
express waiver shall affect any default other than the default specified in the
express waiver. Any waiver of any covenant, term or condition of this Lease by
Landlord shall not be construed as a waiver of any subsequent breach by Tenant
of the same covenant, term or condition. The consent or approval by Landlord to
any act by Tenant requiring the consent or approval of Landlord shall not be
deemed to waive or render unnecessary the consent or approval of Landlord to any
subsequent similar acts of Tenant. The acceptance of rent hereunder by Landlord
shall not be a waiver of any preceding breach by Tenant of any provision hereof,
other than the failure of Tenant to pay the particular rent so accepted,
regardless of Landlord's knowledge of such preceding breach at the time of
acceptance of such rent.
32. SUCCESSORS AND ASSIGNS. Subject to the provisions of Paragraph 20
------------
hereof, this Lease and all of the provisions hereof shall bind and inure to the
benefit of the successors and assigns of each of Landlord and Tenant.
33. HAZARDOUS SUBSTANCES.
(a) The term "Hazardous Substances", as used in this Lease shall include,
without limitation, flammables, explosives, radioactive materials, asbestos,
polychlorinated biphenyls (PCBs), chemicals known to cause cancer or
reproductive toxicity, pollutants, contaminants, hazardous wastes, toxic
substances or related materials, petroleum and petroleum products, and
substances declared to be hazardous or toxic under any law or regulation now
or hereafter enacted or promulgated by any governmental authority.
(b) Tenant shall not cause or permit to occur any violation of any
federal, state or local law, ordinance, or regulation now or hereafter
enacted, related to environmental conditions on, under, or about the
Premises, arising from Tenant's use or occupancy of the Premises, included,
but not limited to, soil and ground water conditions.
(c) Tenant shall not cause or permit to occur the use, generation, release,
manufacture, refining, production, processing, storage, or disposal of any
Hazardous Substance on, under, or about the Premises, or the transportation
to or from the Premises of any Hazardous Substance. The foregoing
notwithstanding, Tenant may handle, store, use or dispose of products
containing small quantities of Hazardous Substances which products are of a
type customarily found in offices and houses (such as aerosol cans
containing insecticides, toner for copiers, paints, paint remover, and the
like) on the Premises provided that Tenant shall handle, store, use
-14-
and dispose of any such Hazardous Substances in a safe and lawful manner
and shall not allow such Hazardous Substances to contaminate the Premises,
the Building, the Office Park or the environment.
(d) Tenant shall indemnify, defend, and hold Landlord harmless from all
fines, suits, procedures, claims, and actions of every kind, and all costs
associated herewith (including attorneys' and consultants' fees) arising
out of or in any way connected with any deposit, spill, discharge, or other
release of Hazardous Substances that occurs during the term of this Lease,
at or from the Premises, or which arises at any time from Tenant's use or
occupancy of the Premises, from Tenant's failure to provide all
information, make all submissions, and take all steps required by all
Authorities under the Laws and all other environmental laws.
(e) Tenant's obligations and liabilities under this Paragraph 33 shall
survive the expiration of this Lease.
34. NOTICES. Any notice or other written instrument relating to this Lease may
be delivered personally to the party to whom such notice is addressed (delivery
to the president, a vice president, or the secretary of such party to constitute
personal delivery to such party), or may be mailed by registered or certified
mail to such party at the following address or at such other address as such
party from time to time may designate by written notice:
TO LANDLORD:
▇▇▇ ▇▇▇▇▇▇
---------------------------
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
---------------------------
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------
TO TENANT:
BLUE MARTINI SOFTWARE
---------------------------
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
---------------------------
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------
Any notice or other written instrument mailed as above provided shall be
effective at the expiration of seventy-two (72) hours after deposit of the same,
postage prepaid, in the United States mail at any place within the State of
California.
35. LETTER OF CREDIT. Letter of Credit. In lieu of a cash deposit, Tenant
----------------
may deliver the Security Deposit to Landlord in the form of a clean,
irrevocable, non-documentary and unconditional letter of credit (the "Letter of
---------
Credit") issued by and drawable upon any commercial bank, trust company,
------
national banking association or savings and loan association with offices for
banking purposes in the State of California (the "Issuing Bank"), which has
------------
outstanding unsecured, uninsured and unguaranteed indebtedness, or shall have
issued a letter of credit or other credit facility that constitutes the primary
security for any outstanding indebtedness (which is otherwise uninsured and
unguaranteed), that is then rated, without regard to qualification of such
rating by symbols such as "+" or "-" or numerical notation, "Aa" or better by
▇▇▇▇▇'▇ Investors Service and "AA" or better by Standard & Poor's Rating
Service, and has combined capital, surplus and undivided profits of not less
than $ 500,000,000. Such Letter of Credit shall (a) name Landlord as
beneficiary, (b) be in the amount of $345,000.00 for the entire term of this
Lease, (c) have a term of not less than one year, (d) permit multiple drawings,
(e) be fully transferable by Landlord without the payment of any fees or charges
by Landlord, and (f) otherwise be in form and content satisfactory to Landlord.
If upon any transfer of the Letter of Credit, any fees or charges shall be so
imposed, then such fees or charges shall be payable solely by Tenant and the
Letter of Credit shall so specify. The Letter of Credit shall provide that it
shall be deemed automatically renewed, without amendment, for consecutive
periods of one year each thereafter during the Term unless the Issuing Bank
sends a notice (the "Non-Renewal Notice") to Landlord by certified mail, return
------------------
receipt requested, not less than 45
-15-
days next preceding the then expiration date of the Letter of Credit stating
that the Issuing Bank has elected not to renew the Letter of Credit. Landlord
shall have the right, upon receipt of the Non-Renewal Notice, to draw the full
amount of the Letter of Credit, by sight draft on the Issuing Bank, and shall
thereafter hold or apply the cash proceeds of the Letter of Credit pursuant to
the terms of this Article. The issuing Bank shall agree with all drawers,
endorsers and bona fide holders that drafts drawn under and in compliance with
the terms of the Letter of Credit will be duly honored upon presentation to the
Issuing Bank at an office location in San Francisco, California. The Letter of
Credit shall be subject in all respects to the Uniform Customs and Practice for
Documentary Credits (1993 revision), International Chamber of Commerce
Publication No. 500.
36. OPTION TO EXTEND. Provided Tenant is not then in default, Tenant shall
have a one-time option to extend the Term of this Office Lease for a period of
time equal to three (3) months (the "Extension Option"), subject to pre-existing
rights of other Tenants. Tenant may exercise its Extension Option by providing
Landlord with written notice of such exercise no later than September 30, 2001.
If Tenant so exercises such Extension Option, then the Term of this Office Lease
shall be extended for three (3) months (to June 30, 2002), subject to all of the
terms and conditions hereof. The Base Rent will remain at $7.25 per rentable
square foot per month for the Extension Option.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease on the date
first above written.
LANDLORD:
________________________________
411BOREL LLC
TENANT:
________________________________
By:_____________________________
Its:____________________________
EXHIBITS
EXHIBIT "A" - Site Plan
EXHIBIT "B" - Floor Plan
EXHIBIT "C" - Rules and Regulations
-16-
RULES AND REGULATIONS
1. Tenant movements into and out of the building, wherein the extent of the
move exceeds a small amount of hand carried goods, shall be coordinated in
advance with Landlord and shall be conducted generally during the periods
7:00pm and 7:00am, Monday through Friday, and Saturday through Sunday (all
day). Landlord will provide Tenant specific written guidelines for moves
upon being informed by Tenant of desired movement dates. In no event will
Landlord be responsible for any loss or damage to such freight, furniture
and fixtures or personal property from any cause.
2. The sidewalks, entrances, lobby, elevators, stairways, and public corridors
shall be used only as a means of ingress and egress and shall remain
unobstructed at all times. The entrance and exit doors of all suites are to
be kept closed at all times except as required for orderly passage to and
from a suite. Loitering in any part of the Building or obstruction of any
means of ingress or egress shall not be permitted. Doors and windows shall
not be covered or obstructed. Overnight parking, including legal holidays
and weekends, shall not be permitted without prior written consent of the
Landlord.
3. Plumbing fixtures shall not be used for any purposes other than those for
which they were constructed and no rubbish, newspapers, trash or other
substances of any kind shall be deposited therein. The use of electrical
current shall not exceed safety standards established in the applicable
building code. Walls, floors and ceilings shall not be defaced in any way
and no tenant shall be permitted to ▇▇▇▇, nail, screw or drill into paint or
in any way mar any building surface, except that pictures, certificates,
licenses and similar items normally used in Tenant's business may be
carefully attached to the walls by Tenant in a manner to be prescribed by
Landlord. Upon removal of such items by Tenant, any damage to the walls or
other surfaces shall be repaired by Tenant.
4. No awning, shade, sign, advertisement or notice shall be inscribed, painted
or affixed on or to any part of the outside or inside of the Building. All
tenant identification on public corridor doors or walls will be installed by
Landlord for Tenant. No lettering or signs other than the name of the
Tenant will be permitted on public corridor doors or walls with the size and
type of the letters to be prescribed by Landlord. The bulletin board or
directory of the Building will be provided exclusively for the display of
the name and location of tenants thereof, and Landlord reserves the right to
exclude all other names therefrom. Landlord reserves the right to
reasonably approve all listing requests.
5. The weight, size, position and installation of all safes and other unusually
heavy objects used or placed in the Building shall be prescribed by
Landlord. All mechanical equipment and office machines which are placed in
the Building shall be installed in sittings which, in the reasonable
judgment of the Landlord, shall be sufficient to prevent noise, vibration
and annoyance. The repair of any damage done to the Building or property
therein by installing or removing or maintaining such safes or other
unusually heavy objects shall be paid for by Tenant.
6. The storage of goods, wares or merchandise on the premises will not be
permitted except in areas specifically designated by Landlord for storage.
No sale or auction, public or private, will be permitted on the premises.
7. All keys to the premises and the Building shall be obtained from Landlord
and all keys shall be returned to Landlord upon the termination of this
Lease. Tenant shall not change the locks or install other locks on the
doors.
EXHIBIT C
PAGE 1
8. Tenant or any employee or invitee of Tenant using the premises after regular
business hours or on non-business days shall lock any entrance doors to the
Building used by him immediately after entering of leaving the Building.
Tenant, its employees and invitees and other persons entering or leaving the
Building when it is so locked, may be required to sign the Building register
when so doing, and any security personnel of Landlord may refuse to admit
Tenant or any of Tenant's employees, invitees or any other person to the
Building while it is so locked, without a pass previously arranged or other
satisfactory identification showing such person's right to access to the
Building. At such time, Landlord assumes no responsibility whatsoever in
connection therewith and shall not be liable for any damage resulting from
any error in regard to any such pass or identification or from the admission
of any unauthorized person to the Building.
9. Tenant shall not permit any cooking to take place in the premises, nor shall
Tenant install therein any vending machines without Landlord's written
consent, however, Tenant may prepare coffee and similar beverages by using a
microwave.
10. Landlord reserves the right at any time to change or rescind any one or more
of these Rules or Regulations or to make such other and further reasonable
rules and regulations as in Landlord's judgment may from time to time be
necessary for the management, safety, care and cleanliness of the Building,
for the preservation of good order therein, and for the convenience of other
occupants and tenants therein. Landlord shall not be responsible to Tenant
or to any other person for the nonobservance or violation of the Rules or
Regulations by any other tenant or other person.
11. Except for animals aiding a disabled person, Tenant agrees not to keep or
permit to be kept on said premises or in said Office Park, any pet,
including but not limited to dogs, cats, birds, rodents or reptiles of any
nature without the express written consent of Landlord.
12. In accordance with City Ordinance # 1993-03, smoking is not permitted in the
building.
EXHIBIT C
PAGE 2