Exhibit 10.5
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
LEASE
BASIC LEASE INFORMATION
Date: March 4, 1999
LANDLORD: ▇▇▇▇ ▇▇▇ ▇▇▇▇, LLC
Address: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
TENANT: College Edge/Snap Technologies, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
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PARAGRAPH 1 PREMISES
Rentable Area of Premises: Floor 2 consisting of
approximately 5,902 square feet
and Floor 3 consisting of
approximately 6,018 square feet
PARAGRAPH 2 TERM
Thirty-Six (36) months, with an option for an additional year,
subject to the terms of Section 2
Commencement Date: Substantial Completion of the
Tenant Improvements (estimated to
be May 1, 1999)
PARAGRAPH 3 BASE RENT: $29.50 per rentable square foot per year
(i.e., $29,303.33 per month)
PARAGRAPH 5 SECURITY DEPOSIT: $29,303.33
LETTER OF CREDIT: $150,000
PARAGRAPH 31 BROKER: Landlord: ▇▇▇▇▇ & ▇▇▇▇▇
Tenant: CAC Group
The foregoing Basic Lease Information is incorporated into and made a
part of this Lease. Each reference in this Lease to any of the Basic Lease
Information shall mean the respective information set forth above and shall
be construed to incorporate all of the terms provided under the particular
Lease paragraph pertaining to such information. In the event of a conflict
between any Basic Lease Information and the Lease, the Lease shall control.
LANDLORD: TENANT:
ICHI JUU ICHI, LLC SNAP TECHNOLOGIES, INC. a California
a California limited liability company corporation
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------- ---------------------------------
Its: President Its: EVP, COO
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
i
LEASE
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
ICHI JUU ICHI, LLC
-LANDLORD-
SNAP TECHNOLOGIES, INC.
-TENANT-
LEASE
THIS LEASE (the "Lease") is made and entered into as of the 4th day of
March 1999, by and between Ichi Juu Ichi, LLC, a California limited liability
company (the "Landlord"), and College Edge/Snap Technologies, Inc., a
California corporation (the "Tenant").
1. PREMISES
(a) Subject to and upon the terms, covenants and conditions
hereinafter set forth, Landlord leases to Tenant and Tenant rents from
Landlord those certain premises as set forth in the BASIC LEASE INFORMATION
attached hereto and as approximately shown on the plan attached hereto as
EXHIBIT A (the "Premises") in the building located at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (the "Building").
(b) Tenant shall accept the Premises in their "as-is" condition;
provided, however, Landlord, at its cost, shall complete the following work
("Tenant Improvements"):
(i) Any operable windows, the electrical systems and the
roof shall be in good working order and repair;
(ii) The Common Areas shall be improved with Building
standard finishes;
(iii) A second restroom shall be installed on the second floor
of the Building so there will be two (2) restrooms on the second floor;
(iv) The restroom on the third floor of the Building shall be
cleaned and painted;
(v) A space heater shall be installed on the second floor;
and
(vi) Perform the work outlined on EXHIBIT B attached hereto.
Upon substantial completion of the Tenant Improvements, Tenant shall execute
a written notice of its acceptance of Premises, which shall be conclusive
evidence that ▇▇▇▇▇▇ has accepted the Premises in good and satisfactory
condition as of the date of such notice and Landlord shall not be liable to
Tenant for any defects in the Tenant Improvements thereafter. Landlord
hereby discloses to Tenant that the western wall of the Building is shared
with the building immediately adjacent to the Building and such wall is an
unreinforced masonry wall. The City and County of San Francisco has
declared that such walls are unsafe; and, Tenant on behalf of itself and its
employees and invitees hereby accepts such risk.
2. TERM
(a) This Lease shall be for the term commencing on the Commencement
Date (as defined in the BASIC LEASE INFORMATION) (provided Tenant shall have
the right to move its furniture, fixtures and equipment into the Premises
five days prior to the Commencement Date) and expiring on the date that is
thirty-six (36) months following the Commencement Date, unless sooner
terminated as provided herein (the "Term"). If Landlord, for any reason
whatsoever, cannot deliver possession of the Premises to Tenant on the date
specified herein for the commencement of the Term, this Lease shall not be
void or voidable, nor shall Landlord be liable to Tenant for any loss or
damage resulting therefrom; provided, however, that Tenant may terminate this
lease in the event that Landlord cannot deliver the Premises by August 1,
1999 by providing Landlord written notice of its termination no later than
August 15, 1999. In that event, however, Tenant shall not be liable for any
Base Rental or Additional Charges (as hereinafter defined) until Landlord
delivers possession of the Premises to Tenant.
(b) Tenant and Landlord shall each have the right to change the
Expiration Date of the Lease from the end of the 36th month of the Term to be
the end of the 24th month of the Term upon not less than 120 days prior
written notice. In the event the Expiration Date is changed from the 36th
month to the 24th month, neither party shall be required to pay the other
party any termination fee or other payment of any type or nature.
(c) Subject to the rights of Landlord in Section 2(b), Landlord
hereby grants Tenant an option to extend the term of the Lease for one
additional period of one (1) year, at Tenant's election as specified below,
commencing immediately after the expiration of the Term, upon the same terms
and conditions contained herein, except that (i) the Base Annual Rent for the
Premises shall be equal to the fair market rent for the Premises determined in
the manner set forth below, (ii) Tenant shall accept the Premises in an "as
is" condition without any obligation of Landlord to repaint, remodel, repair,
improve or alter the Premises, and (iii) there shall be no further options to
extend the term of the Lease. ▇▇▇▇▇▇'s election to exercise the option
granted herein must be given to Landlord in writing no less than 120 days
prior to expiration of the Term. If Tenant properly exercises the option
granted herein, references in the
Lease to the term shall be deemed to mean the option term unless the context
clearly provides otherwise. Notwithstanding anything to the contrary
contained, herein, all option rights of Tenant pursuant to this Section shall
automatically terminate without notice and shall be of no further force and
effect, whether or not Tenant has timely exercised the option granted herein,
if (i) an Event of Default exists at the time of exercise of the option or at
the time of commencement of the option term, or (ii) Tenant has not
subsequently cured such Event of Default.
(d) If Tenant properly exercises its option to extend the term of
the Lease, the Base Annual Rent during the option term shall be determined in
the following manner. The Base Annual Rent shall be increased to an amount
equal to the fair market rent for the Premises as of the commencement of the
option term for a term equal to the option term, as such fair market rent is
specified by Landlord by notice to Tenant not less than thirty (30) days
prior to commencement of the option term, subject to Tenant's right of
arbitration as set forth below. If ▇▇▇▇▇▇ believes that the fair market rent
specified by Landlord exceeds the actual fair market rent for the Premises as
of commencement of the option term, then Tenant shall so notify Landlord
within ten (10) business days following receipt of Landlord's notice. If
Tenant fails to so notify Landlord within said ten (10) business days,
Landlord's determination of the fair market rent for the Premises shall be
final and binding upon the parties. If the parties are unable to agree upon
the fair market rent for the Premises within ten (10) days after Landlord's
receipt of notice of Tenant's objection, the amount of Base Annual Rent as of
commencement of the option term shall be determined as follows:
(i) Within 20 days after receipt of Landlord's notice
specifying fair market rent, Tenant, at its sole expense, shall obtain and
deliver in writing to Landlord a determination of the fair market rent for
the Premises for a term equal to the option term from a broker ("Tenant's
broker") licensed in the State of California and engaged in the office
brokerage business in San Francisco, California for at least the immediately
preceding five (5) years. If Landlord accepts such determination, the
Monthly Base Rent for the option term shall be increased to an amount equal
to of the amount determined by ▇▇▇▇▇▇'s broker. If Landlord fails to notify
Tenant within ten (10) business days of its rejection of such determination,
the Monthly Base Rent shall be increased to an amount equal to the amount
determined by ▇▇▇▇▇▇'s broker.
(ii) If Landlord does not accept such determination, within
15 days after receipt of the determination of ▇▇▇▇▇▇'s broker, Landlord shall
designate a broker ("Landlord's broker") licensed in the State of California
and engaged in the office brokerage business in San Francisco, California,
for at least the immediately preceding five (5) years. ▇▇▇▇▇▇▇▇'s broker and
▇▇▇▇▇▇'s broker shall name a third broker, similarly qualified, within five
(5) days after the appointment of ▇▇▇▇▇▇▇▇'s broker. Each of said three
brokers shall determine the fair market rent for the Premises as of the
commencement of the option term for a term equal to the option term of the
Lease within 15 days after the appointment of the third broker. The third
appraiser shall choose the appraisal of the Landlord's Broker or the
appraisal of the Tenant's Broker which ever is closer to its determination of
fair market rent. The Annual Base Rent payable by Tenant effective as of the
commencement of the option term shall be increased to an amount equal to the
average of said three determinations; provided, however, any such
determination that is ten percent greater or less than the three
determinations shall not be considered.
(iii) Landlord shall pay the costs and fees of Landlord's
broker in connection with any determination hereunder, and ▇▇▇▇▇▇ shall pay
the costs and fees of ▇▇▇▇▇▇'s broker in connection with such determination.
The costs and fees of any third broker shall be paid one-half by Landlord and
one-half by Tenant.
(e) If the amount of the fair market rent is not known as of the
commencement of the option term, then Tenant shall continue to pay the Base
Annual Rent in effect at the expiration of the initial term until the amount
of the fair market basic rent is determined. When such determination is
made, Tenant shall pay any deficiency to Landlord within five (5) business
days of demand. In no event shall the Base Annual Rent payable during the
option term be less than the sum of (i) the Base Annual Rent in effect
immediately prior to the expiration of the initial term, and (ii) the
Tenant's Share payable by Tenant on a per square foot basis during the last
year of the Term.
3. RENT
(a) Tenant shall pay to Landlord a total annual "Base Rental"
throughout the Term in equal monthly installments as set forth in the BASIC
LEASE INFORMATION attached hereto, due and payable upon the first day of each
and every month during the Term, without any further notice from or demand by
Landlord and without any offset or deduction whatsoever, except as set forth
herein, in lawful money of the United States of America, at the address set
forth in the BASIC LEASE INFORMATION attached hereto or elsewhere as
designated from time to time by ▇▇▇▇▇▇▇▇'s written notice to ▇▇▇▇▇▇. Tenant
shall also pay to Landlord all charges and other amounts whatsoever as
provided in this Lease ("Additional Charges"); and such Additional Charges
shall be payable to Landlord at the place where the Base Rental is payable
and Landlord shall have the same remedies for a default in the payment of
Additional Charges as for a
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default in the payment of Base Rental. If the Commencement Date should occur
on a day other than the first day of a calendar month, or the Expiration Date
should occur on a day other than the last day of a calendar month, then the
Base Rental and Additional Charges for such fractional month shall be
prorated on a daily basis.
(b) Tenant recognizes that late payment of any Base Rental or Additional
Charges will result in additional administrative expense to Landlord and will
impair Landlord's ability to meet its obligations with respect to the
Building and otherwise, the exact extent of which additional expense and
impairment will be extremely difficult or impractical to determine. Tenant
therefore agrees that if any Base Rental or Additional Charges remain unpaid
for a period of fifteen (15) days after the date the same is due, the amount
of such unpaid Base Rental or Additional Charges shall be increased by a late
charge to be paid to Landlord by Tenant in an amount equal to ten percent
(10%) of the amount of the past due Base Rental and/or Additional Charges.
The amount of the late charge to be paid to Landlord by Tenant on any
delinquent Base Rental and/or Additional Charges shall be reassessed and
added to Tenant's obligation for each successive monthly period accruing
after the date on which the late charge is initially imposed until such late
charge and all delinquent Base Rental and Additional Charges have been paid
in full by Tenant. Tenant agrees that such amount is a reasonable estimate of
the loss and expense to be suffered by Landlord as a result of any such late
payment by ▇▇▇▇▇▇. The provisions of this Paragraph 3(b) in no way relieve
Tenant of the obligation to pay Base Rental or Additional Charges on or
before the date on which they are due, nor do the terms of this Paragraph
3(b) in any way affect Landlord's remedies pursuant to Paragraph 18 in the
event any Base Rental or Additional Charges are unpaid after the date due.
4. ADDITIONAL CHARGES. For purposes of this Paragraph 4, the following
terms shall have the meanings hereinafter set forth:
(i) "Base Year" shall mean the calendar year 1999.
(ii) "Taxes" shall mean all impositions, taxes, assessments
(special or otherwise), and other governmental liens or charges of any kind
or nature whatsoever, ordinary and extraordinary, foreseen and unforeseen,
and any substitute therefor, including all taxes attributable in any manner
to the Premises, the land on which the Premises is located or the rents
(however the term may be defined) receivable therefrom or any charge or other
payment required to be paid to any governmental authority, whether or not any
of the foregoing shall be designated "real estate tax", "sales tax", "rental
tax", "excise tax", "business tax", or designated in any other manner (except
only those taxes of the following categories: any inheritance, estate
succession, transfer or gift taxes imposed upon Landlord or any income taxes
specifically payable by Landlord as a separate tax paying entity without
regard to Landlord's income source as arising from or out of the Premises
and/or the land on which it is located). Taxes shall also include reasonable
legal fees, costs, and disbursements incurred in connection with proceedings
to contest, determine, or reduce such Taxes.
(iii) "Operating Costs" shall mean all costs incurred by Landlord
in connection with owning, operating and maintaining the Building.
(iv) "Tenant's Share" shall mean 67%, unless Landlord leases the
basement for office space, in which event Tenant's Share shall be
proportionately reduced.
(a) Tenant shall pay to Landlord as Additional Charges, each month, an
amount equal to ▇▇▇▇▇▇'s Share of any increase in Taxes and Operating Costs
from the Base Year.
(b) In addition, Tenant shall pay to Landlord as Additional Charges,
upon written demand, such portion of all real estate Taxes which are
attributable to the value of the improvements installed in the Premises by
Tenant.
(c) Tenant shall pay prior to delinquency all taxes assessed against and
levied upon trade fixtures, furnishings, equipment and all other personal
property of Tenant contained in the Premises or elsewhere. When possible,
Tenant shall cause said trade fixtures, furnishings, equipment and all other
personal property to be assessed and billed separately from the real property
of Landlord. If any of ▇▇▇▇▇▇'s said personal property shall be assessed with
Landlord's real property, Tenant shall pay Landlord the taxes attributable to
Tenant within 10 days after receipt of a written statement setting forth the
taxes applicable to ▇▇▇▇▇▇'s property.
5. SECURITY DEPOSIT AND LETTER OF CREDIT
(a) Tenant concurrently with the execution of this Lease, has deposited
with Landlord the sum set forth in the BASIC LEASE INFORMATION attached
hereto, the receipt of which is hereby acknowledged by Landlord as security
for the faithful performance by Tenant of all terms, covenants and conditions
of this Lease. Tenant agrees that Landlord may apply the security deposit to
remedy any failure by Tenant to repair or maintain the Premises or to perform
any other terms, covenants and conditions contained
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herein or make any payment owing hereunder. If ▇▇▇▇▇▇ has kept and performed
all terms, covenants and conditions of this Lease during the Term, Landlord
will, within thirty (30) days after the expiration hereof, promptly return
the security deposit to Tenant or the last permitted assignee of ▇▇▇▇▇▇'s
interest hereunder. Should Landlord use any portion of the security deposit
to cure any default by Tenant hereunder, Tenant shall forthwith replenish the
security deposit to the original amount. Landlord shall not be required to
keep the security deposit separate from its general funds, and Tenant shall
not be entitled to interest on any such deposit. Upon the occurrence of any
Events of Default (as defined in Paragraph 18 of this Lease) the security
deposit shall become due and payable to Landlord to the extent required to
compensate Landlord for damages incurred, or to reimburse Landlord as
provided herein, in connection with any such Event of Default.
(b) Concurrently with execution of this Lease by ▇▇▇▇▇▇, Tenant shall
deliver to Landlord as security for the faithful performance of all of its
obligations under this Lease an unconditional and irrevocable letter of
credit ("Letter of Credit") in the amount of $150,000 for the benefit of
Landlord and any successor in interest of Landlord, issued by a financial
institution acceptable to Landlord, and providing for partial drawings. All
costs incurred in obtaining the Letter of Credit shall be borne by ▇▇▇▇▇▇.
Landlord shall be entitled to draw upon the Letter of Credit if an Event of
Default shall occur under the Lease, to the extent of the default. Tenant
shall maintain the Letter of Credit in effect in accordance with the terms of
this paragraph until 60 days after the later of (i) the expiration of the
term of the Lease, or (ii) vacation of the Premises by ▇▇▇▇▇▇. If the stated
term of the Letter of Credit would expire prior to such time as Tenant is no
longer required to maintain the Letter of Credit in effect under the Lease,
prior to its stated expiration Tenant shall renew the Letter of Credit for a
period of time until Tenant is no longer required to maintain the Letter of
Credit or shall deliver to Landlord a new Letter of Credit in accordance with
the terms hereof. If ▇▇▇▇▇▇ fails either to give Landlord satisfactory
evidence confirming such renewal of the Letter of Credit or to deliver a new
Letter of Credit to Landlord at least 20 days prior to the stated expiration
of the Letter of Credit in effect, Landlord shall be entitled to draw down
the full amount of the Letter of Credit prior to the expiration thereof, and
the amount so drawn shall be treated in the manner described in below.
Any cash proceeds drawn under the Letter of Credit and not applied by
Landlord as provided in paragraph above plus such additional amount as shall
be necessary to restore the amount so held by Landlord to the amount of the
Letter of Credit shall be held by Landlord as security for the faithful
performance by Tenant of all of the provisions of the Lease to be performed
or observed by ▇▇▇▇▇▇ (the "deposit"). If Tenant fails to pay rent or other
charges due under the Lease, or otherwise defaults with respect to any
provision of the Lease, Landlord may at its sole option apply or retain all
or any portion of the Letter of Credit for the payment of any rent or other
charges in default or the payment of any other sum to which Landlord may
become entitled by ▇▇▇▇▇▇'s default, or to compensate Landlord for any loss
or damage which Landlord may suffer thereby. If Landlord so uses or applies
all or any portion of the deposit (including draws under the Letter of
Credit), then within thirty (30) days after demand therefor Tenant shall
deposit cash with Landlord in an amount sufficient to restore the amount
thereof, and ▇▇▇▇▇▇'s failure to do so shall be a material breach of the
Lease. Landlord's application or retention of the deposit shall not
constitute a waiver of Tenant's default to the extent that the deposit does
not fully compensate Landlord for all losses or damages incurred by Landlord
in connection with such default and shall not prejudice any other rights or
remedies available to Landlord under the Lease or by law. Landlord shall not
be required to keep the deposit separate from its general accounts. If Tenant
performs all of Tenant's obligations under the Lease, the deposit, or so much
thereof as has not theretofore been applied by Landlord, shall be returned,
without payment of interest or other increment for its use, to Tenant (or, at
Landlord's option, to the last assignee, if any, of Tenant's interest under
the Lease) within thirty (30) days after the later of (i) expiration of the
term of the Lease, or (ii) vacation of the Premises by Tenant. No trust
relationship is created herein between Landlord and Tenant with respect to
the deposit.
6. USE AND COMPLIANCE WITH LAWS
(a) Tenant shall use and occupy the Premises for general office and for
no other use or purpose.
(b) Tenant shall not use the Premises or permit anything to be done in
or about the Premises that will in any way conflict with any law, statute,
ordinance or governmental rule or regulation now in force or which may
hereafter be enacted or promulgated. Tenant shall not do or permit anything
to be done in or about the Premises or bring or keep anything therein which
will in any way increase the rate of any insurance upon the Building or any
of its contents above the rate as of the initial move-in date or cause a
cancellation of such insurance or otherwise affect such insurance in any
manner after the initial move-in date, and Tenant shall at its sole cost and
expense promptly comply with all laws, statutes, ordinances and governmental
rules, regulations or requirements now in force or which may hereafter be in
force and with the requirements of any board of fire underwriters or other
similar body now or hereafter constituted relating to or affecting the
condition, use or occupancy of the Premises, excluding structural changes not
related to or affected by alterations or improvements made by Tenant or
Tenant's use of the
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Premises. Tenant shall not have the right to use the freight elevator in the
Building except for the initial move in of its furniture, fixtures and
equipment.
7. HAZARDOUS SUBSTANCES
Tenant will not cause, suffer or permit any Hazardous Substance (as
hereinafter defined) to be brought, kept or stored within the Premises, and
Tenant will not engage in or permit any other person to engage in any
activity, operation or business upon the Premises that involves the
generation, manufacture, refining, transportation, treatment, storage,
handling or disposal of any Hazardous Substance that would or could result in
Tenant, Landlord, the Premises, or the Building to be subject to any law,
statute, ordinance, or regulation or rule of common law pertaining to health,
industrial hygiene, or the environment. Tenant shall be responsible for any
violation of this Article 7 by any subtenant or other occupant of the
Premises. The term "Hazardous Substance" shall include, without limitation
those substances, materials and wastes that are or become regulated under
applicable local, state or federal law, or the United States government, or
which are classified as hazardous or toxic under federal, state, or local
laws or regulations.
8. UTILITIES AND JANITORIAL
Tenant shall pay for all water, gas, heat, light, power, telephone and
other utilities and services supplied to the Premises, together with any
taxes thereon. If any such services are not separately metered to Tenant,
Tenant shall pay a reasonable proportion to be reasonably determined by
Landlord of all charges jointly metered with other premises. Tenant, at
Tenant's sole cost, shall be responsible for providing janitorial services to
the Premises.
9. ALTERATIONS
Tenant shall not make any alternations, additions or improvements
(collectively, "Alterations") in or to the Premises without the prior written
consent of Landlord, which shall not be unreasonably withheld, but may be
predicated upon but not limited to Tenant's use of contractors who are
acceptable to Landlord; and any Alterations, except for Tenant's movable
furniture and equipment, at Landlord's election, shall immediately become
Landlord's property and, at the end of the Term, shall remain on the Premises
without compensation to Tenant or, if Landlord shall elect, be removed by
Tenant prior to the expiration date of this Lease. All Alteration shall be
completed in compliance with all laws, codes, rules, and ordinances in effect
at the time of such Alterations. In the event the making of any Alterations
triggers any additional work to be performed to the Premises or the Building,
such additional work shall be performed at Tenant's sole cost and expense. In
the event Tenant fails to remove any Alterations required by Landlord to be
removed, Landlord may remove such Alterations and Tenant shall be obligated
to immediately reimburse Landlord for the cost therefor. In the event
Landlord consents to the making of any Alterations by ▇▇▇▇▇▇, the same shall
be made by Tenant, at Tenant's sole cost and expense, in accordance with
plans and specifications approved by Landlord, and any contractor or person
selected by Tenant to make the same must first be approved in writing by
Landlord or, at Landlord's option, the Alterations shall be made by Landlord
for Tenant's account and Tenant shall reimburse Landlord for the cost thereof
(including a reasonable charge for Landlord's overhead) within twenty (20)
days after receipt of a statement from Landlord therefor. Upon the expiration
or sooner termination of the Term, Tenant shall upon demand by Landlord and
at Tenant's sole cost and expense, promptly remove any Alterations made by or
for the account of Tenant that are designated by Landlord to be removed, and
Tenant shall at its sole cost and expense, promptly repair and restore the
Premises to its original condition.
10. REPAIR
(a) Tenant shall take good care of the Premises and, at Tenant's cost
and expense, shall make all repairs and replacements as and when Landlord
deems necessary to preserve the Premises in good working order and condition
normal wear and tear excepting, except that Tenant shall not be required to
make any such structural repairs or structural replacements unless
necessitated or occasioned by the acts, omissions or negligence of Tenant, or
any of its employees, contractors, agents or invitees, or by the manner of
Tenant's use or occupancy of the Premises (but then only to the extent not
covered by Landlord's insurance). Landlord shall not be liable for and there
shall be no abatement of Base Rental or Additional Charges with respect to
any injury to or interference with ▇▇▇▇▇▇'s business arising from any
repairs, maintenance, alteration or improvement in or to any portion of the
Building, including the Premises, or in or to the fixtures, appurtenances and
equipment therein. Tenant hereby waives and releases its right to make
repairs at Landlord's expense under Sections 1941 and 1942 of the California
Civil Code or under any similar law, statute or ordinance now or hereafter in
effect. In addition, Tenant hereby waives and releases its right to terminate
this Lease under Section 1932(1) of the California Civil Code or under any
similar law, statute or ordinance now or hereafter in effect.
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(b) All repairs and replacements made by or on behalf of Tenant or any
person claiming through or under Tenant shall be made and performed (i) at
Tenant's sole cost and expense and at such time and in such manner as
Landlord may reasonably designate, (ii) by contractors or mechanics
reasonably approved by Landlord, (iii) so that same shall be at least equal
in quality, value, and utility to the original work or installation in all
material respects, (iv) in accordance with the rules and regulations for the
Building reasonably adopted by Landlord from time to time, and (v) in
accordance with all applicable laws and regulations of governmental
authorities having jurisdiction over the Premises.
11. LIENS
Tenant shall keep the Premises free from any liens arising out of any
work performed, material furnished or obligations incurred by Tenant. In the
event that Tenant shall not, within ten (10) days following the imposition of
any such lien, cause the same 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 such lien. All such sums paid by ▇▇▇▇▇▇▇▇ and all
expenses reasonably incurred by it in connection therewith shall be
considered Additional Charges and shall be payable to it by Tenant on demand
with interest at the maximum rate permitted by law. 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, the Premises and the Building from mechanics' and
materialmen's liens, and Tenant shall give to landlord at least five (5)
business days' prior notice of commencement of any construction in the
Premises.
12. ASSIGNMENT AND SUBLETTING
(a) Tenant shall not directly or indirectly, voluntarily or by
operation of law, sell, assign, encumber, pledge or otherwise transfer or
hypothecate all or any part of the Premises or Tenant's leasehold estate
hereunder (collectively, "Assignment"), or permit the Premises to be occupied
by anyone other than Tenant or sublet the Premises or any portion thereof
(collectively, "Sublease") without Landlord's prior written consent in each
instance, which consent may not be unreasonably withheld by Landlord;
provided, however, that no such consent shall be required in connection with
any merger, consolidation, any sale of all or substantially all of Tenant's
assets or any other transaction in which more than fifty percent (50%) of
Tenant's power is transferred.
(b) Without limiting the other instances in which it may be reasonable
for Landlord to withhold its consent to an Assignment or Sublease, Landlord
and Tenant acknowledge that it shall be reasonable for Landlord to withhold
its consent in the following instances:
(i) if at the time consent is requested or at any time prior to
the granting of consent, Tenant is in default under this Lease;
(ii) if the proposed assignee or sublessee is a governmental
agency;
(iii) if, in Landlord's good faith judgment, the use of the
Premises by the proposed assignee or sublessee would not be compatible to the
types of use by other tenants in the Building, would entail any alterations
which would lessen the value of the leasehold improvements in the Premises,
would result in more than a reasonable number of occupants per floor, would
require increased services by Landlord or would conflict with any so-called
"exclusive" or percentage lease then in favor of another tenant of the
Building;
(iv) if, in ▇▇▇▇▇▇▇▇'s reasonable judgment, the financial
strength of the proposed assignee or sublessee does not meet the credit
standards applied by Landlord for other tenants under leases with comparable
terms;
(v) if the Sublease would result in the division of the
Premises into three or more units; or
(vi) if the proposed assignee or sublessee is an existing
tenant of the Building or Landlord is currently marketing space in the
Building to such proposed assignee or sublessee.
(c) If Tenant desires at any time to enter into an Assignment or
Sublease, it shall first give written notice ("Tenant's Notice") to Landlord
of its desire to do so, which notice shall contain (i) the name of the
proposed assignee or subtenant, (ii) the terms and provisions of the proposed
Assignment or Sublease, and (iii) such financial information as Landlord may
reasonably request concerning the proposed assignee or subtenant.
(d) If Landlord consents to an Assignment or a Sublease within a
fifteen (15) day period from receipt of Tenant's Notice, Tenant may
thereafter, within ninety (90) days after ▇▇▇▇▇▇▇▇'s consent,
6
but not later than the expiration date of said ninety (90) days, enter into
such Assignment or Sublease, upon the terms and conditions set forth in the
notice furnished by Tenant to Landlord pursuant to Paragraph 12(c).
(e) In the case of an assignment, one hundred percent (100%) of any
sums or other economic consideration received by Tenant as a result of such
Assignment shall be paid to Landlord. In the case of a Sublease, fifty
percent (50%) of any sums or economic consideration received by Tenant as a
result of such Sublease shall be paid to Landlord after first deducting the
rental due hereunder, prorated to reflect only rental allocable to the sublet
portion of the Premises.
(f) No consent by Landlord to any Assignment or Sublease by Tenant
shall relieve Tenant of any obligation to be performed by Tenant under this
Lease, whether arising before or after the Assignment or Sublease. The
consent by Landlord to any Assignment or Sublease shall not relieve Tenant
from the obligation to obtain Landlord's express written consent to any other
Assignment or Sublease. Any Assignment or Sublease that is not in compliance
with this Paragraph 12 shall be void and, at the option of Landlord, shall
constitute a material default by Tenant under this Lease. The acceptance of
Base Rental or Additional Charges by Landlord from a proposed assignee or
sublessee shall not constitute the consent to such Assignment or Sublease by
Landlord.
(g) Each assignee of this Lease shall assume all obligations of
Tenant under this Lease and shall be and remain liable jointly and severally
with Tenant for the payment of Base Rental and Additional Charges, and for
the performance of all the terms, covenants and conditions herein contained
on Tenant's part to be performed. No Assignment shall be binding on Landlord
unless the assignee or Tenant shall deliver to Landlord a counterpart of the
Assignment and an instrument in recordable form that contains a covenant of
assumption by the assignee satisfactory in substance and form to Landlord,
but the failure or refusal of the assignee to execute such instrument of
assumption shall not release or discharge the assignee from its liability as
set forth above.
13. INSURANCE AND INDEMNIFICATION
(a) Except as resulting from ▇▇▇▇▇▇▇▇'s gross negligence, willful
misconduct or breach of this Lease, ▇▇▇▇▇▇ agrees to defend, protect and
indemnify Landlord against and save Landlord harmless from any and all loss,
cost, liability, damage and expense, including without limitation, penalties,
fines and reasonable counsel fees and disbursements, incurred in connection
with or arising from any cause whatsoever in, on or about the Premises,
including without limiting the generality of the foregoing: (i) any default
by Tenant in the observance or performance of any of the terms, covenants or
conditions of this Lease on Tenant's part to be observed or performed; or
(ii) the use or occupancy or manner of use or occupancy of the Premises by
Tenant or any person or entity claiming through or under Tenant, or (iii) the
condition of the Premises or any occurrence or happening on the Premises from
any cause whatsoever, or (iv) any acts, omissions or negligence of Tenant or
any person or entity claiming through or under Tenant, or of the contractors,
agents, servants, employees, visitors or licensees of Tenant or any such
person or entity, in, on or about the Premises or the Building, either prior
to the commencement of, during, or after the expiration of the Term,
including without limitation any acts, omissions or negligence in making or
performing any Alterations. In the event any action or proceeding is brought
against Landlord for any claim against which ▇▇▇▇▇▇ is obligated to indemnify
Landlord hereunder, Tenant upon notice from Landlord shall defend such action
or proceeding at Tenant's sole expense by counsel reasonably acceptable to
▇▇▇▇▇▇ and Landlord. The provisions of this Paragraph 13 shall survive the
expiration or termination of this Lease with respect to any claims or
liability occurring prior to such expiration or termination.
(b) Tenant shall procure at its cost and expense and keep in effect
during the Term comprehensive general liability insurance including
contractual liability with a minimum combined single limit of liability of
Two Million Dollars ($2,000,000.00). Such insurance shall name Landlord the
current property manager of the Building as additional insured, shall
specifically include the liability assumed hereunder by ▇▇▇▇▇▇ (provided that
the amount of such insurance shall not be construed to limit the liability of
Tenant hereunder), and shall provide that it is primary insurance, and not
excess over or contributory with any other valid, existing and applicable
insurance in force for or on behalf of Landlord, and shall provide that
Landlord shall receive thirty (30) days' written notice from the insurer
prior to any cancellation or change of coverage. Tenant shall deliver
policies of such insurance or certificates thereof to Landlord on or before
the Commencement Date, and thereafter at least thirty (30) days before the
expiration dates of expiring policies; and, in the event Tenant shall fail to
procure such insurance, or to deliver such policies or certificates, Landlord
may, at its option, procure the same for the account of Tenant, and the cost
thereof shall be paid to Landlord as Additional Charges within five (5) days
after delivery to Tenant of bills thereafter. Tenant's compliance with the
provisions of this Paragraph 13(b) shall in no way limit Tenant's liability
under any of the other provisions of this Paragraph 13.
7
(c) Landlord shall procure and keep in effect during the Term
casualty insurance insuring the Building, excluding any improvements or
Alterations made by Tenant, and Tenant shall pay Tenant's Share of the annual
cost within thirty days after receipt of an invoice from Landlord.
14. WAIVER OF SUBROGATION
Landlord and Tenant shall each obtain from their respective insurers
under all policies of fire, theft, public liability, workers' compensation
and other insurance maintained by either of them at any time during the Term
insuring or covering the Building or any portion thereof or operations
therin, a waiver of all rights of subrogation which the insurer of one party
might otherwise have against the other party, and Landlord and Tenant shall
each indemnify the other against any loss or expense, including reasonable
attorneys' fees, resulting from the failure to obtain such waiver.
15. DAMAGE AND DESTRUCTION
If the Premises or the Building are damaged by fire or other casualty,
Landlord shall forthwith repair the same, provided that such repairs can be
made within ninety (90) days after the date of such damage under the laws and
regulations of the federal, state and local governmental authorities having
jurisdiction thereof. In such event, this Lease shall remain in full force
and effect except that Tenant shall be entitled to a proportionate reduction
of Base Rental based upon the extent to which such damage and the making of
such repairs by Landlord shall interfere with the business carried on by
Tenant in the Premises. Within twenty (20) days after the date of such
damage, Landlord shall notify Tenant whether or not such repairs can be made
within ninety (90) days after the date of such damage. If such repairs cannot
be made within ninety (90) days from the date of such damage, Landlord shall
have the option within thirty (30) days after the date of such damage either
to: (a) notify Tenant of Landlord's intention to repair such damage and
diligently prosecute such repairs, in which event this Lease shall continue
in full force and effect and the Base Rental shall be reduced as provided
herein; or (b) notify Tenant of Landlord's election to terminate this Lease
as of a date specified in such notice, which date shall be not less than
thirty (30) nor more than sixty (60) days after notice is given. In case of
termination, the Base Rental shall be reduced by a proportionate amount based
upon the extent to which such damage interfered with the business carried on
by Tenant in the Premises, and Tenant shall pay such reduced Base Rental up
to the date of termination. The repairs to be made hereunder by Landlord
shall not include, and Landlord shall not be required to repair, any damage
to the property of Tenant. Tenant hereby waives the provisions of Section
0932, subdivision 2, and Section 1933, subdivision 4, of the Civil Code of
California.
16. EMINENT DOMAIN
If any part of the Premises shall be taken or appropriated under the
power of eminent domain such that any part of the Premises is rendered
unsuitable for its intended use, either party shall have the right to
terminate this Lease at its option. In such event, Landlord shall receive
(and Tenant shall assign to Landlord upon demand from Landlord) any income,
rent, award or any interest therein which may be paid in connection with the
exercise of such power of eminent domain provided, however, that Tenant may
receive the portion of the sum paid by virtue of such proceedings to Tenant
in its own right for relocation expenses and damage to Tenant's personal
property. If a part of the Premises shall be so taken or appropriated and
such taking or appropriation does not render the balances of the Premises
unsuitable for its intended use or neither party hereto elects to terminate
this Lease, and if the Premises have been damaged as a consequence of such
partial taking or appropriation, Landlord shall restore the Premises
continuing under this Lease at Landlord's cost and expense. Thereafter, the
Base Rental to be paid under this Lease for the remainder of the term shall
be proportionately reduced, such reduction to be based upon the extent to
which the partial taking or appropriation shall interfere with the business
carried on by Tenant in the Premises. Notwithstanding anything to the
contrary contained in this Paragraph 16, in the case of any temporary taking
of any part of the Premises during the Term for not more than sixty (60)
days, this Lease shall be and remain unaffected by such temporary taking and
Tenant shall continue to pay in full the Base Rental payable hereunder, and
Tenant shall be entitled to receive that portion of any award which
represents compensation for the use of or occupancy of the Premises during
the Term, and Landlord shall be entitled to receive that portion of any award
which represents the cost of restoration of the Premises and the use and
occupancy of the Premises after the end of the Term.
17. RIGHT OF ENTRY
Landlord, or any of its agents, shall have the right to enter the
Premises during all reasonable hours to examine the same or to make such
repairs, additions or alterations as may be deemed necessary for the safety,
comfort, or preservation thereof, or of the Building, or to exhibit the
Premises at any time within one hundred eight (180) days before the
expiration of this Lease.
8
18. EVENTS OF DEFAULT AND REMEDIES
(a) The occurrence of any one or more of the following events
("Event of Default") shall constitute a breach of this Lease by Tenant:
(i) Tenant fails to pay any Base Rental under this Lease
as and when such rent becomes due and payable and such failure continues for
more than ten (10) days after Landlord gives written notice thereof to
Tenant; provided, however, that after the third such failure in a calendar
year, only the passage of time, but no further notice, shall be required to
establish an Event of Default in the same calendar year; or
(ii) Tenant fails to pay any Additional Charges or other
amount of money or charge payable by Tenant hereunder as and when such
Additional Charges or amount or charge becomes due and payable and such
failure continues for more than ten (10) days after ▇▇▇▇▇▇▇▇ gives written
notice thereof to Tenant; provided, however, that after the third such
failure in a calendar year, only the passage of time, but no further notice,
shall be required to establish an Event of Default in the same calendar year;
or
(iii) Tenant fails to perform or breaches any other
agreement or covenant of this Lease to be performed or observed by ▇▇▇▇▇▇ as
and when performance or observance is due and such failure or breach
continues for more than ten (10) days after Landlord gives written notice
thereof to Tenant; provided, however, that if, by the nature of such
agreement or covenant, such failure or breach cannot reasonably be cured
within such period of ten (10) days, an Event of Default shall not exist as
long as Tenant commences with due diligence and dispatch the curing of such
failure or breach within such period of ten (10) days and, having so
commenced, thereafter prosecutes with diligence and dispatch and completes
the curing of such failure or breach; or
(iv) Tenant (A) files, or consents by answer or otherwise
to the filing against it of, a petition for relief or reorganization or
arrangement or any other petition in bankruptcy or for liquidation or to take
advantage of any bankruptcy, insolvency or other debtors' relief law of any
jurisdiction, (B) makes an assignment for the benefit of its creditors, (C)
consents to the appointment of a custodian, receiver, trustee or other
officer with similar powers of Tenant or of any substantial part of Tenant's
property, or (D) takes action for the purpose of any of the foregoing; or
(v) Without consent by ▇▇▇▇▇▇, a court or government
authority enters an order, and such order is not vacated within thirty (30)
days, (A) appointing a custodian, receiver, trustee or other officer with
similar powers with respect to Tenant or with respect to any substantial part
of Tenant's property, or (B) constituting an order for relief or approving a
petition for relief or reorganization or arrangement or any other petition in
bankruptcy or for liquidation or to take advantage of any bankruptcy,
insolvency or other debtors' relief law of any jurisdiction, or (C) ordering
the dissolution, winding-up or liquidation of Tenant; or
(vi) This Lease or any estate of Tenant hereunder is
levied upon under any attachment or execution and such attachment or
execution is not vacated within thirty (30) days; or
(vii) Tenant intentionally abandons the Premises.
(b) If an Event of Default occurs, Landlord shall have the right
at any time to give a written termination notice to Tenant and, on the date
specified in such notice, Tenant's right to possession shall terminate and
this Lease shall terminate. Upon such termination, Landlord shall have the
right to recover from Tenant:
(i) The worth at the time of award of all unpaid rent
which had been earned at the time of termination;
(ii) The worth at the time of award of the amount by
which all 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 all unpaid rent for the balance of the term of this Lease after the
time of award exceeds the amount of such rental loss that Tenant proves could
be reasonably avoided; and
(iv) All other amounts necessary to compensate Landlord for
all the detriment proximately caused by ▇▇▇▇▇▇'s failure to perform all of
Tenant's obligations under this Lease or which in the ordinary course of
things would be likely to result therefrom. The "worth at the time of award"
of the amounts referred to in clauses (i) and (ii) above shall be computed by
allowing interest at the maximum annual interest rate allowed by law for
business loans (not primarily for personal, family or household purposes) not
exempt from the usury law at the time of termination or, if there is no such
maximum
9
annual interest rate, at the rate of eighteen percent (18%) per annum. The
"worth at the time of award" of the amount referred to in clause (iii) above
shall be computed by discounting such amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of award plus one percent (1%).
For the purpose of determining unpaid rent under clauses (i), (ii) and (iii)
above, the rent reserved in this Lease shall be deemed to be the total rent
payable by Tenant under Paragraphs 3 and 4 hereof.
(c) Notwithstanding the occurrence of an Event of Default,
pursuant to California Civil Code Section 1954.1, or any successor statute
thereof, this Lease shall continue in effect for so long as Landlord does not
terminate Tenant's right to possession, and Landlord shall have the right to
enforce all its rights and remedies under this Lease, including the right to
recover all rent as it becomes due under this Lease. Acts of maintenance or
preservation or efforts to relet the Premises or the appointment of a
receiver upon initiative of Landlord to protect ▇▇▇▇▇▇▇▇'s interest under
this Lease shall not constitute a termination of Tenant's right to possession
unless written notice of termination is given by Landlord to Tenant.
(d) The remedies provided for in this Lease are in addition to all
other remedies available to Landlord at law or in equity by statute or
otherwise.
(e) All agreements and covenants to be performed or observed by
Tenant under this Lease shall be at Tenant's sole cost and expense and
without any abatement of Base Rental and Additional Charges. If Tenant fails
to pay any sum of money to be paid by Tenant or to perform any other act to
be performed by Tenant under this Lease, Landlord shall have the right, but
shall not be obligated, and without waiving or releasing Tenant from any
obligations of Tenant, to make any such payment or to perform any such other
act on behalf of Tenant in accordance with this Lease. All sums so paid by
▇▇▇▇▇▇▇▇ and all necessary incidental costs shall be deemed Additional Charges
hereunder and shall be payable by Tenant to Landlord on demand, together with
interest on all such sums from the date of expenditure by Landlord to the
date of repayment by ▇▇▇▇▇▇ at the maximum annual interest rate allowed by law
for business loans (not primarily for personal, family or household purposes)
not exempt from the usury law at the date of expenditure or, if there is no
such maximum annual interest rate, at the rate of eighteen percent (18%) per
annum. Landlord shall have, in addition to all other rights and remedies of
Landlord, the same rights and remedies in the event of the nonpayment of such
sums plus interest by ▇▇▇▇▇▇ as in the case of default by Tenant in the
payment of Base Rental.
(f) If Tenant abandons or surrenders the Premises, or is
dispossessed by process of law or otherwise, any movable furniture,
equipment, trade fixtures or personal property belonging to Tenant and left
in the Premises shall be deemed to be abandoned, at the option of Landlord,
and Landlord shall have the right to sell or otherwise dispose of such
personal property in any commercially reasonable manner.
19. RIGHT OF LANDLORD TO PERFORM
All covenants and agreements to be performed by Tenant under any of
the terms of this Lease shall be performed by Tenant at Tenant's sole cost
and expense and without any abatement of Base Rental or Additional Charges.
If Tenant shall fail to pay any sum of money, other than Base Rental or
Additional Charges, required to be paid by it hereunder or shall fail to
perform any other act on its part to be performed hereunder, and such failure
shall continue for ten (10) days after notice thereof by Landlord, Landlord
may, but shall not be obligated to do so, and without waiving or releasing
Tenant from any obligations of Tenant, make any such payment or perform any
such act on Tenant's part to be made or performed as provided in this Lease.
All sums so paid by ▇▇▇▇▇▇▇▇ and all necessary incidental costs together with
interest thereon at the maximum rate permitted by law, from the date of such
payment by Landlord shall be payable as Additional Charges to Landlord on
demand.
20. NOTICES
Any notices under this Lease shall be effective only if given in
writing, sent by certified mail or delivered personally, (a) to Tenant (i) at
the address designated for such notices in the BASIC LEASE INFORMATION
attached hereto, if sent prior to Tenant's taking possession of the Premises,
or (ii) at the Premises if sent subsequent to Tenant's taking possession of
the Premises, or (iii) at any place where Tenant may be found if sent
subsequent to Tenant's vacating, deserting, abandoning or surrendering the
Premises, and (b) to Landlord at the address set forth in the BASIC LEASE
INFORMATION, or (c) to such other address as either Landlord or Tenant may
designate as its new address for such purpose by notice given to the other in
accordance with the provisions of this Paragraph 20. Any notice shall be
deemed to have been given two (2) days after the date when it shall have been
mailed or upon the date personal delivery is made. If ▇▇▇▇▇▇ is notified of
the identity and address of any mortgagee, Tenant shall give to such
mortgagee notice of any default by Landlord under the terms of this Lease in
writing sent by certified mail, and such mortgagee shall be given a
reasonable opportunity to cure such default prior to ▇▇▇▇▇▇'s exercising any
remedy available to it.
10
21. QUIET ENJOYMENT
Upon the payment by Tenant of all Base Rental and Additional Charges due
hereunder, and upon performance by Tenant of all of the terms, covenants and
conditions on Tenant's part to be observed and performed, Tenant shall have
the right to peaceably and quietly hold and enjoy the Premises for the Term
hereby demised, subject to all of the terms, covenants and conditions of this
Lease.
22. SUBORDINATION AND ATTORNMENT
(a) This Lease shall be subject and subordinate at all times to the
lien of all mortgages and deeds of trust securing any amount or amounts
whatsoever which may now exist or hereafter be placed on or against the
Building or on or against Landlord's interest or estate therein, all without
the necessity of having further instruments executed by Tenant to effect
such subordination. Notwithstanding the foregoing, in the event of a
foreclosure of any such mortgage or deed of trust or of any other action or
proceeding for the enforcement thereof, or of any sale thereunder, this Lease
shall not be terminated or extinguished, nor shall the rights and possession
of Tenant hereunder be disturbed, if no Event of Default then exists under
this Lease, and Tenant shall attorn to the person or entity that acquires
▇▇▇▇▇▇▇▇'s interest hereunder through any such mortgage or deed of trust.
▇▇▇▇▇▇ agrees to execute, acknowledge and deliver upon demand such further
instruments evidencing such subordination of this Lease to the lien of all
such mortgages and deeds of trust as may reasonably be required by Landlord.
(b) 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 subtenancies or operate
as an assignment to Landlord of any or all such subleases or subtenancies.
(c) If the original Landlord hereunder, or any successor owner of the
Building, sells or conveys the Building, all liabilities and obligations on
the part of the original Landlord, or such successor owner, under this Lease
accruing after such sale or conveyance shall terminate and the original
Landlord, or such successor owner, shall automatically be released therefrom,
and thereupon all such liabilities and obligations shall be binding upon the
new owner. ▇▇▇▇▇▇ agrees to attorn to such new owner.
23. TENANT'S CERTIFICATES
From time to time upon not less than ten (10) days' prior written notice
from Landlord, Tenant will execute and deliver to Landlord a certificate of
Tenant stating: (a) that Tenant has accepted the Premises (or, if Tenant has
not done so, that Tenant has not accepted the Premises and specifying the
reasons therefor), (b) the Commencement and Expiration Dates of this Lease,
(c) that this Lease is unmodified and in full force and effect (or, that
there have been modifications), (d) whether or not there are then existing any
defenses against the enforcement of any of the obligations of Tenant under
this Lease (and, if so specifying same), (e) whether or not there are then
existing any defaults by Landlord in the performance of its obligations under
this Lease (and, if so, specifying same), (f) the dates, if any, to which the
Base Rental and Additional Charges under this Lease have been paid, and (g)
any other information that may reasonably be required by Landlord. It is
intended that any such certificate of Tenant delivered pursuant to this
Paragraph 23 may be relied upon by Landlord and any prospective purchaser or
mortgagee of the Building or any portion thereof. Tenant's failure to execute
and deliver such certificate to Landlord within ten (10) days of Landlord's
written notice shall constitute a certification by Tenant (i) that Tenant has
accepted the Premises, (ii) that there are no existing defenses against the
enforcement of the obligations of Tenant under the Lease, and (iii) that
there are no existing defaults by Landlord in the performance of its
obligations under the Lease. In addition, ▇▇▇▇▇▇'s failure to execute and
deliver such certificate to Landlord within ten (10) days of Landlord's
written notice shall constitute a certification by Tenant that the information
required in (b), (c), (f) and (g) of this Paragraph 23 to be included in the
certificate of Tenant is as indicated by Landlord in writing to any
prospective purchaser or mortgagee of any part of the Building or the land
upon which the Building is located, if such a writing is provided by Landlord
as a result of ▇▇▇▇▇▇'s failure to timely provide a tenant's certificate
pursuant to this Paragraph 23.
24. SUCCESSORS AND ASSIGNS
Subject to the provisions of Paragraph 12, the terms, covenants and
conditions contained in this Lease shall be binding upon and inure to the
benefit of the parties hereto and their respective legal and personal
representatives, successors and assigns.
25. ATTORNEYS' FEES
If either party defaults in the performance of any of the terms,
covenants and conditions of this Lease and by reason thereof the other party
employs the services of an attorney to enforce performance of the covenants,
or to perform any service based upon defaults, then in any of said events the
prevailing
11
party shall be entitled to reasonable attorneys' fees and expenses and costs
incurred by the prevailing party pertaining thereto (including costs and fees
relating to any appeal) and in enforcement of any remedy.
26. WAIVER
If either Landlord or Tenant waives the performance of any term,
covenant or condition contained in this Lease, such waiver shall not be
deemed to be a waiver of any subsequent breach of the same or any other term,
covenant or condition contained herein. Furthermore, the acceptance of Base
Rental or Additional Charges by Landlord shall not constitute a waiver of any
preceding breach by Tenant of any term, covenant or condition of this Lease,
regardless of Landlord's knowledge of such preceding breach at the time
Landlord accepted such Base Rental or Additional Charges. Failure by Landlord
to enforce any of the terms, covenants or conditions of this Lease for any
length of time shall not be deemed to waive or to decrease the right of
Landlord to insist thereafter upon strict performance by ▇▇▇▇▇▇. Waiver by
Landlord of any term, covenant or condition contained in this Lease may only
be made by a written document signed by Landlord.
27. SURRENDER OF PREMISES
At the end of the Term or sooner termination of this Lease, Tenant will
peaceably deliver to Landlord possession of the Premises, together with all
improvements or additions upon or belonging to same, by whomsoever made, in
the same condition as received or first installed, damage by fire,
earthquake, Act of God, or the elements alone excepted. Upon the termination
of this Lease, Tenant shall repair any damage caused by such removal.
Property not so removed shall be deemed abandoned by Tenant, and title to the
same shall thereupon pass to Landlord.
28. HOLDING OVER
Any holding over after the expiration of the Term with the consent of
Landlord shall be construed to be a tenancy from month to month at a monthly
Base Rental equal to one hundred fifty percent (150%) of the Base Rental for
last month of the Term of this Lease, and shall otherwise be on the terms and
conditions herein specified specified so far as applicable. Any holding over
without ▇▇▇▇▇▇▇▇'s consent shall constitute an Event of Default and entitle
Landlord to recover possession of the Premises in accordance with applicable
law.
29. LIMITATION OF LIABILITY
▇▇▇▇▇▇ agrees to look only to the equity of Landlord in the Premises and
not to Landlord personally with respect to any obligations or payments due or
which may become due from Landlord hereunder, and no other property or assets
of Landlord or any partner, joint venturer, officer, director, shareholder,
agent, or employee of Landlord, disclosed or undisclosed, shall be subject to
levy, execution or other enforcement procedure for the satisfaction of
▇▇▇▇▇▇'s claims under or with respect to this Lease, and no partner, officer,
director, agent or employee of Landlord shall be personally liable in any
manner or to any extent under or in connection with this Lease. If at any
time the holder of ▇▇▇▇▇▇▇▇'s interest hereunder is a partnership or joint
venture, a deficit in the capital account of any partner or joint venturer
shall not be considered an asset of such partnership or joint venture.
30. SIGNS
Landlord, at Landlord's sole cost and expense, shall install building
standard signage in the directory in the lobby of the Building. Tenant,
shall have a non-exclusive right to install, at Tenant's sole cost and
expense, a sign on the facade of the Building. The size, color, style,
materials, location and manner of installation of the sign shall be subject
to the prior written approval of Landlord which shall not be unreasonably
withheld. The exterior sign shall comply with all regulations of the City and
County of San Francisco and Tenant shall provide Landlord with confirmation
of such compliance. Tenant shall maintain the sign at its sole cost and
expense and upon the Expiration Date or the sooner termination of this Lease
shall remove the sign and restore the facade to the condition it was in prior
to its installation. The provisions governing alterations shall apply to the
installation, maintenance and removal of the exterior sign.
31. BROKERAGE
Tenant represents and warrants that it has dealt with no broker, agent
or other person in connection with this transaction and that no broker, agent
or other person brought about this transaction, other than the broker set
forth in the BASIC LEASE INFORMATION attached hereto and ▇▇▇▇▇▇ agrees to
indemnify and hold Landlord harmless from and against any claims by any other
broker, agent or other person claiming a commission or other form of
compensation by virtue of having dealt with Tenant with
12
regard to this leasing transaction. The provisions of this paragraph shall
survive the expiration or termination of this Lease.
32. INVALIDITY OF PROVISION
If any term, provision, covenant or condition of this Lease or the
application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Lease or the application of
such term, provision, covenant or condition to persons or circumstances other
than those as to which it is held invalid or unenforceable shall not be
affected thereby and each term, provision, covenant or condition of this
Lease shall be valid and be enforceable to the fullest extent permitted by
law. This Lease shall be construed in accordance with the laws of the State
of California.
33. TIME OF ESSENCE
It is understood and agreed between the parties that time is of the
essence of all the terms, provisions, covenants and conditions of this Lease.
34. ENTIRE AGREEMENT
This Lease contains the entire agreement between the parties hereto and
all previous negotiations leading thereto, and it may be modified only by an
agreement in writing signed by Landlord and ▇▇▇▇▇▇. No surrender of the
Premises shall be valid unless accepted by Landlord in writing. ▇▇▇▇▇▇
acknowledges and agrees that ▇▇▇▇▇▇ has not relied upon any statement,
representation, prior written or prior or contemporaneous oral promises,
agreements or warranties except such as are expressed herein.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
date first above written.
LANDLORD: TENANT:
ICHI JUU ICHI, LLC SNAP TECHNOLOGIES, INC. a California
a California limited liability company corporation
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------- ---------------------------------
Its: President Its: EVP, COO
---------------------------------- --------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
EXHIBIT A
[INTENTIONALLY DELETED]
[LETTERHEAD]
EXHIBIT B
February 23, 1999
▇▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
RE: PROPOSED COLLEGEEDGE IMPROVEMENTS (▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇)
Dear ▇▇▇▇:
As per our conversation, the following tenant improvements will be required
by CollegeEdge (the "Tenant") for the 2nd and 3rd floors of ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ (the "Property"). I spoke with ▇▇▇▇▇ ▇▇▇▇▇ of Hooks
Design & Architecture regarding the measurements for the proposed conference
rooms and offices per our requirements. The following should accurately
reflect the Tenant's proposed TIs for the purpose of a cost estimate by your
contractor.
1. SECOND FLOOR
In the locations shown on the attached a. One (1) Conference
Room--(12 Ft. x 20 Ft.) Finished to Building Standards
In the locations shown on the attached b. Two (2) Offices--(10 Ft.
x 12 Ft.) Finished to Building Standards
c. Industrial Grade Carpeting.
d. Fluorescence Lighting.
2. THIRD FLOOR
In the locations shown on the attached a. One (1) Conference
Room--(14 Ft. x 24 Ft.) Finished to Building Standards
In the locations shown on the attached b. Two (2) Offices--(10 Ft.
x 12 Ft.) Finished to Building Standards
c. Industrial Grade Carpeting.
Please submit the above tenant improvement requirements to your contractor
for cost estimate at your earliest convenience. I look forward to your prompt
response in this matter.
3. All bathrooms shall have privacy dividers
4. Repair damaged or missing fiberglass insulation in ceiling of third
floor
Sincerely,
THE CAC GROUP
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
cc: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Exhibit B
[3rd Floor Plan]
Exhibit B
[2nd Floor Plan]
FIRST AMENDMENT TO LEASE
THIS FIRST AMENDMENT TO LEASE ("First Amendment") is entered into as of
May 27, 1999, by and between ▇▇▇▇ ▇▇▇ ▇▇▇▇, LLC ("Landlord") and Snap
Technologies, Inc. ("Tenant") with reference to the following facts:
▇. ▇▇▇▇▇▇▇▇ to that certain Lease (the "Lease") dated March 4, 1999,
Landlord leased to Tenant 11,920 rentable square feet of space (the
"Premises") on the second and third floor of the building located at ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (the "Building").
B. Landlord and Tenant desire to (i) expand the Premises to include
approximately 6,000 additional rentable square feet of space located on the
ground floor of the Building ("Ground Floor Premises") and approximately
4,000 rentable square feet of space located on the lower level of the
Building ("Basement Premises") (collectively, the Ground Floor Premises and
the Basement Premises shall be referred to as the "Expansion Premises") (the
Expansion Premises are more particularly shown on the floor plan attached
hereto as EXHIBIT A), and (ii) extend the term of the Lease so the term for
the Premises together with the Expansion Premises expires as of June 14, 2002
("New Expiration Date").
NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Landlord and Tenant hereby agree as follows (capitalized terms
used herein but not herein defined shall have the meaning ascribed to them in
the Lease):
1. TERM. The term of the Lease is hereby extended until the New
Expiration Date.
2. EXPANSION OF PREMISES. Commencing upon June 15, 1999 (the "Expansion
Commencement Date"), the Premises shall be expanded to include the Expansion
Premises. From and after the Expansion Commencement Date, all references in the
Lease to the "Premises" shall be deemed to refer to the Expansion Premises,
unless the context clearly requires otherwise.
3. MEASUREMENT OF EXPANSION PREMISES. Promptly following execution of
the First Amendment, the parties hereby agree to measure the Expansion Premises
in accordance with the American National standard method of measuring floor
area in office buildings of the Building Owners and Managers Association
(ANSI Z65.1-1996). In the event the Expansion Premises are larger or smaller
than specified herein, the parties shall enter into an agreement acknowledging
the actual square footage of the Expansion Premises.
4. BASE RENT. From and after the Expansion Commencement Date, Tenant
shall pay as Base Rent for the Expansion Premises the following:
Ground Floor Premises: $29.50 per rentable square foot per year
(i.e., $14,750.00 per month)
Basement Premises: $27.50 per rentable square foot per year
(i.e., $9,166.67 per month)
5. TENANT'S SHARE. From and after the Expansion Commencement Date,
▇▇▇▇▇▇'s Share with respect to the Premises shall be 100%.
6. IMPROVEMENT OF EXPANSION PREMISES. Prior to the Expansion
Commencement Date, Landlord will perform the work outlined on EXHIBIT B
attached hereto.
7. YARD PREMISES. Commencing upon June 15, 1999, Tenant shall lease
the rear yard area of the Building ("Yard Premises"), as shown on the floor
plans attached as EXHIBIT A. Tenant shall pay rent in the amount of $750.00
per month for the Yard Premises through the New Expiration Date, upon all the
same terms and conditions of the Lease. Landlord shall provide a chain link
fence enclosing such yard area, basic landscaping and a 100 square foot wood
deck. Tenant shall provide, at its cost, all other amenities, subject to the
prior approval of Landlord.
8. SECURITY DEPOSIT. Concurrently with the execution of this Lease by
▇▇▇▇▇▇, Tenant shall increase the amount of the letter of credit currently
held by Landlord to a total amount of $250,000, which shall be held pursuant
to the terms of Section 5(b) of the Lease.
9. FINANCIAL STATEMENTS. Within ten (10) days after written request
therefor, Tenant shall deliver to Landlord a copy of the financial statements
(including at least a year end balance sheet and a statement of profit and
loss, tax returns, history of company, corporate officers, capital backers,
and any other financial commitment to lease) of Tenant for each of the three
most recently completed years, prepared in accordance with generally accepted
accounting principles (and, if such is Tenant's normal practice, audited by
an independent certified public accountant), all then available subsequent
interim statements, and such other financial information as may reasonably be
requested by Landlord or required by any mortgagee of Landlord.
10. BROKERAGE. Tenant represents and warrants that it has dealt with no
broker, agent or other person in connection with this transaction and that no
broker, agent or other person brought about this transaction, and ▇▇▇▇▇▇
agrees to indemnify and hold Landlord harmless from and against any claims by
any other broker, agent or other person claiming a commission or other form
of compensation by virtue of having dealt with Tenant with regard to this
leasing transaction. The provisions of this paragraph shall survive the
expiration or termination of this Lease.
11. STATUS OF LEASE. Except as amended by this First Amendment, the
Lease is unchanged and, as amended by this First Amendment, the Lease remains
in full force and effect.
IN WITNESS WHEREOF, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ have executed this First
Amendment as of the date first set forth above.
TENANT: LANDLORD:
SNAP TECHNOLOGIES, INC. ICHI JUU ICHI, LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
-------------------------------- --------------------------------
Its: EVP/COO Its: President
------------------------------- -------------------------------
EXHIBIT B
Ground Floor front lobby at passenger elevator:
New painted wood door with glass front door to replace existing door.
Linoleum flooring to be agreed with ▇▇▇▇▇▇.
Installation of lights on order for lobby and stairwell.
Ground Floor base building and Tenant Improvements:
Space in its as is painted and sandblasting condition.
Lights, plugs and wiring similar to second and third floor. Tenant to
provide a layout of requirements within 5 days of mutual execution of
▇▇▇▇▇. If requirements are in excess of the 2nd and 3rd floor, Tenant
to be notified of addition charges to Tenant if necessary.
Heaters to be provided for the basement and first floor.
Carpet of Tenant's choice to be provided similar to second and third
floor.
Conference rooms similar to 2nd floor.
A toilet stall will be removed and a shower installed to the ground
floor bathroom so each ground floor bathroom has a shower.
The roll up door will remain as is with Landlord sealing to eliminate dust.
All cost required changing in the roll up door to windows or an entry
including architecture, permits, sidewalk repair if necessary for entry,
would be shared by Landlord and Tenant.
Signage - Tenant shall have exterior signage, at Tenant cost, subject to City
and County of S.F. ordinances and Landlord approval, not unreasonably
withheld.