EXHIBIT 10.5
LEASE COVERING PREMISES KNOWN AS
PARTIES
THIS LEASE is made this 19th day of December 1996, by and between State
Compensation Insurance Fund, a public enterprise fund, herein called "Landlord"
and DATASURF herein called "Tenant".
WITNESSETH: Landlord and Tenant mutually agree as follows:
PREMISES
1.
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord
that certain office space herein called "Premises" outlined in red on Exhibit
"A" attached hereto and made a part hereof, situated on the floor of that
certain building known as ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇. This Lease is
subject to the terms, covenants, and conditions herein set forth and Tenant
covenants as a material part of the consideration for this Lease to keep and
perform each and all of the terms, covenants, and conditions to be kept and
performed by it and that this Lease is made upon the conditions of faithful
performance.
TERM
The five (5) year term of the Lease shall commence on the 1st day of March
1997, and end on the 28th day of February 2002.
POSSESSION
3.a
If Landlord for any reason whatsoever cannot deliver possession of the
Premises to Tenant at the commencement of the term hereof, this Lease shall not
be void or voidable, nor shall Landlord be liable to Tenant for any loss or
damage resulting therefrom, but in that event, all rent shall be abated during
the period between the commencement of the term and the time when Landlord
delivers possession. Late possession shall not extend the termination date
herein provided. Said Space is described as approximately 6,424 useable square
feet and approximately 7,195 rentable square feet located on the second floor
and more particularly shown in EXHIBIT A attached hereto.
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3.b
In the event that Landlord shall permit Tenant to occupy the Premises prior
to the commencement date of the term, such occupancy shall be subject to all the
provisions of this Lease except the obligation to pay rent. Early possession
shall not advance the termination date herein provided.
MONTHLY BASIC RENT
4.a
Tenant agrees to pay to Landlord as Basic Rent, the sum of Ten Thousand
Nine Hundred Fifty and 79/100 Dollars ($10,950.79) per month in advance on the
first day of each month, beginning on the date the term commences and continuing
throughout the term. Monthly rent for the first month or any portion thereof
shall be paid on the day the term commences. Monthly rent for any partial month
shall be prorated at a rate of 1/30 of the monthly rent per day. In addition to
the monthly Basic Rent Tenant agrees to pay as additional rent the amount of any
adjustments and other charges required by this Lease. All rent shall be paid to
Landlord, without prior notice or demand, deduction or offset at ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ or to such other party or at such other place as
Landlord may from time to time designate in writing. Further, all charges to be
paid by Tenant hereunder, including, without limitation, payments for real
property taxes, operating expense adjustments, parking fees, insurance and
repairs, but excluding security deposit, shall be considered Additional Rent for
the purpose of this Lease, and the word "rent" in this Lease shall include such
additional rent unless the context specifically states or clearly implies that
only the monthly Basic Rent is referenced. (Note: See "Abated Rent" for 1,800
sq. ft. for six months, paragraph 35 in Addendum).
SEE ADDENDUM
4.b
Tenant waives the right to make payment of rent under protest unless
payment is made in full. Landlord has the right to cash any partial payment
check without surrendering the right to collect the balance due.
SECURITY DEPOSIT
5.
Tenant has deposited with Landlord the sum of Ten Thousand Nine Hundred
Fifty and 79/100 Dollars ($10,950.79). This sum shall be held by Landlord as
security for the faithful performance by Tenant of all the terms, covenants, and
conditions of this Lease to be kept and performed by Tenant during the term
hereof. If Tenant defaults with respect to any provision of this Lease,
including, but not limited to the provisions relating to the payment of rent,
Landlord may (but shall not be required to) use, apply, or retain all or any
part of this security deposit for the payment of any rent or any other sum in
default, and for the payment of any amount which Landlord may spend or become
obligated to spend by
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reason of Tenant's default, or to compensate Landlord for any other loss or
damage which Landlord may suffer by reason of Tenant's default. If any portion
of the deposit is so used or applied, Tenant shall within ten (10) days after
written demand therefor, deposit cash with Landlord in an amount sufficient to
restore the security deposit to its original amount and Tenant's failure to do
so shall be a material breach of this Lease. Landlord's obligations with
respects to the security deposit are those of a debtor and not a trustee.
Landlord may maintain the security deposit separate and apart from Landlord's
general funds or may commingle the security deposit with Landlord's general and
other funds. Landlord shall not be required to pay Tenant interest on the
security deposit. If Tenant shall fully and faithfully perform every provision
of the Lease to be performed by it, the security deposit or any balance thereof
shall be returned to Tenant (or, at Landlord's option, to the last assignee of
Tenant's interest hereunder) at the expiration of the Lease term. In the event
of termination of Landlord's interest in this Lease, Landlord shall transfer the
deposit to Landlord's successor in interest. (Note: See Item # 37.)
OPERATING EXPENSE ADJUSTMENTS
6.
Operating Expense Adjustments are made with respect to the "Base Year" and
each "Comparison Year," defined as follows:
Base Year: The calendar year, January 1 through December 31, 1997, in
which this Lease term commences.
Comparison Year: Each calendar year of the term of the Lease after the
Base Year.
For the purposes of this Article, Operating Expenses are defined as all
expenses, costs, and amounts of every kind and nature which Landlord shall pay
or incur because of or in connection with, the ownership, management, repair,
restoration, or operation of the Building and all Building systems. By way of
illustration, Operation Expenses include, but are not limited to, real property
taxes, excise taxes, gross receipts taxes, rent taxes, and all other taxes,
licenses, and any assessments levied, assessed, or charged against Landlord or
Tenant or both; Building management costs, Building personnel salaries, security
services, water and sewer charges, insurance premiums (including earthquake
insurance), utilities, janitorial services, landscape maintenance, operation and
maintenance of the mechanical, electrical, and elevator systems, upkeep of all
common areas, and other labor, materials, supplies, equipment and tools; and any
improvements required by governmental laws or regulations that were not
applicable to the Building at the time it was originally constructed, including
expenses relative to the implementation of any transportation management
program.
The following shall not constitute Operating Expenses for the purposes of this
Lease, and nothing contained herein shall be deemed to require Tenant to pay any
of the following: (1)
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legal fees, brokerage commissions, advertising costs and other related expenses
incurred in connection with the leasing of the Building: (ii) repairs,
alterations, additions, improvements or replacements made to rectify or correct
any defect in the design, materials or workmanship of the Building or Common
Areas or to comply with any requirements of any governmental authority in effect
as of the date of the Lease; (iii) damage and repairs attributable to
condemnation, fire or other casualty; (iv) damage and repairs covered under any
warranty or insurance policy carried by Landlord in connection with the Building
or Property; (v) damage and repairs necessitated by the negligence or willful
misconduct of Landlord or Landlord's employees, contractors or agents; (vi)
executive salaries of Landlord; (vii) salaries of service personnel to the
extent that such service personnel perform services not solely in connection
with the management, operation, repair or maintenance of the Building or Common
Areas; (viii) Landlord's general overhead expenses not related to the Building;
(ix) payments of principal or interest on any mortgage or other encumbrance
including ground lease payments and points, commissions and legal fees
associated with financing; (x) depreciation; (xi) legal fees, accountants' fees
and other expenses incurred in connection with disputes with Tenant or other
tenants or occupants of the Building or associated with the enforcement of any
leases or defense of Landlord's title to or interest in the Building or any part
thereof; (xii) costs renovating or otherwise improving, decorating, painting or
altering space for other tenants or other occupants or vacant space in the
Building except as deemed necessary in the common areas; (xiii) costs incurred
due to violation by Landlord or any other tenant in the Building of the terms
and conditions of any lease; (xiv) the cost of any service provided to Tenant or
other occupants of the Building for which Landlord is entitled to be reimbursed;
(xv) charitable or political contributions; (xvi) any cost or expense related to
the testing for, removal, transportation or storage of hazardous materials from
the Property, Building or Premises; (xvii) interest penalties or other costs
arising out of Landlord's failure to make timely payments of its obligations;
(xviii) costs incurred in parking and for which parking fees are charged during
the initial term; (xix) property management fees of any property management firm
in excess of three percent (3%) of the gross revenues of the Building; (xx)
costs incurred in advertising and promotional activities for the Building; and
(xxi) any other expense which under generally accepted accounting principles and
practice would not be considered a normal maintenance and operating expense.
If, during the term of the Lease, Landlord is required to alter, convert, or
replace the heating, ventilating and air conditioning system, or any part
thereof, serving the Premises in order to comply with any law, statute,
ordinance, or governmental rules, regulations, or requirements now in force or
which may hereafter be in force, including but not limited to those concerning
energy conservation, and indoor air quality, Tenant shall be responsible for
paying Tenant's pro-rata share of the costs of any such conversion or
replacement, which cost shall be amortized over the useful life of such
conversion or replacement, as determined by generally accepted accounting
principles. The costs of any such conversion
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or replacement shall include, but are not limited to, the purchase and
installation of new equipment and the alteration of existing equipment in the
Building to accommodate any new equipment.
Operating Expense Adjustments: Rent payable under this Lease for each
Comparison Year, (each calendar year after the Base Year) shall be adjusted as
herein provided for any increase or decrease in Operating Expenses paid or
incurred by Landlord. A statement shall be furnished to the Tenant on or about
the first day of April each year following each Comparison Year. Tenant shall
pay 6.6% of any excess of such expenses over the amount of Operating Expenses
paid or incurred by Landlord for the Base Year. This percentage of expenses is
the amount thereof prorated to Tenant in proportion to the area of the Building
leased to Tenant. Any increase for the first Comparison Year shall be paid to
Landlord by Tenant within twenty (20) days of being furnished with any such
statement for the first Comparison Year, as Additional Rent for said year.
Further, the amount of any such increase shall be used as an estimate for said
current year and for later calendar years for payment in twelve (12) equal
monthly installments, for each such year as Additional Rent, subject to increase
or decrease as disclosed by any subsequent annual statement. Provided, however,
that any increase for any Comparison Year so prorated to twelve months, shall
for the months January to March both inclusive, of any Comparison Year, adjusted
for any increase or decrease, be paid by Tenant to Landlord forthwith upon being
furnished with any such statement.
Landlord's failure to furnish an annual statement as provided for herein shall
not constitute a waiver by Landlord of its right to require an increase in rent.
If, in any Comparison Year of this Lease, Tenant's share of Operating Expenses
should be less than for the immediately preceding Comparison Year, as shown by
the annual statement, Tenant shall be credited with any overpayment of rent
resulting therefrom on the next monthly rent failing due and the estimated
monthly rent shall be adjusted to reflect the decrease, except at the end of the
Term, when any excess will be refunded to Tenant upon discovery thereof.
Even though the term has expired and Tenant has vacated the Premises, when the
final determination is made of Tenant's share of Operating Expenses for the year
in which this Lease terminates, Tenant shall immediately pay any increase due
over the estimated expenses paid and conversely any overpayment made in the
event expenses decrease shall be immediately rebated by Landlord to Tenant.
Notwithstanding anything contained in this Article, the rent payable by Tenant
shall in no event be less than the Basic Rent specified in Article 4a.
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USE
8.
Tenant shall use the Premises for general office purposes and shall not use
or permit the Premises to be used for any other purpose without the prior
written consent of Landlord, when consent shall not be unreasonably withheld or
delayed.
Tenant shall not do or permit anything to be done in or about the Premises
nor bring or keep anything therein which will in any way increase the existing
rate of or affect any fire or other insurance policy covering said Building or
any part thereof or any of its contents. Tenant shall not do or permit anything
to be done in or about the Premises which will in any way obstruct or interfere
with the rights of other tenants or occupants of the Building or injure or annoy
them or use or allow the Premises to be used for any improper, immoral, unlawful
or objectionable purpose nor shall Tenant cause, maintain or permit any nuisance
in, or about the Premises. Tenant shall not commit or suffer to be committed any
waste in or upon the Premises.
COMPLIANCE WITH LAW
9.
Tenant shall not use the Premises or permit anything to be done in or about
the Premises which will in any way conflict with any law, statute, ordinance, or
governmental rules or regulations now in force or which may hereafter be enacted
or promulgated. Tenant, at Tenant's sole cost and expense, shall promptly comply
with all laws, statutes,
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ordinances, rules, regulations, requirements, orders and directions of federal,
state, county, and municipal authorities, now in force or which may hereafter be
in force, which shall impose any duty upon Landlord or Tenant with respect to
the use, occupancy, or alteration of the Premises. The judgement of any court of
competent jurisdiction or the admission of Tenant whether Landlord be a party
thereto or not, that Tenant has violated any law, statute, ordinance,
governmental rule, regulation, or requirement, shall be conclusive of that fact
as between Landlord and Tenant.
Both Landlord and Tenant shall comply with all state and federal laws,
rules, regulations, or statuses requiring the submission, reporting, or filing
of information regarding the storage, use, or discharge of chemical or other
substances at the Premises or in the Building. Each shall provide to the other a
full copy any such report or filing within fifteen (15) days of submission.
Landlord shall provide Tenant with a copy of any such report or filing made by
any other Tenant in the Building within thirty (30) days of the date Landlord
files or receives a copy of any such submission.
ALTERATIONS AND ADDITIONS
10.
Tenant shall not make or suffer to be made any alterations, additions, or
improvements to or of the Premises or any part thereof without the prior written
consent of Landlord, which consent shall not be unreasonably withheld, and any
alterations, additions, or improvements to or of the Premises, including, but
not limited to, wall covering, paneling and built-in cabinet work, but excepting
movable furniture and trade fixtures, shall on the expiration of the term become
a part of the real property and belong to Landlord and shall be surrendered by
Tenant with the Premises. Notwithstanding the foregoing, Landlord's consent
shall not be necessary for any non-structural alterations to the Premises made
by Tenant which do not affect the Building systems and which cost less than Five
Thousand Dollars ($5,000) each, provided that such alterations are otherwise
made in accordance with the terms of this Lease and Tenant provides Landlord
with written notice thereof at least five (5) days in advance. In the event
Landlord consents to the making of any alterations, additions, or improvements
to the Premises by Tenant, the same shall be made by Tenant at Tenant's sole
cost or expense, and any contractor or person selected by Tenant to make the
same must first be approved in writing by the Landlord. Landlord's approval of
the plans, specifications, or working drawings for Tenant's alterations shall
create no responsibility or liability on the part of the Landlord for their
completeness, design sufficiency, or compliance with all laws, rules, and
regulations of governmental agencies or authorities. Upon the expiration of the
Lease or sooner termination thereof, Tenant shall, upon written demand by
Landlord, at Tenant's sole cost and expense, forthwith and with all due
diligence remove any alterations, additions or improvements made by Tenant,
designated by Landlord to be removed including, but not limited to, Tenant's
telephone and network cabling throughout the Premises from Tenant's telephone
closet, and any intra-Building wiring installed to exclusively serve all or a
portion of the Premises. Any person or contractor selected by Tenant to remove
alterations
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must first be approved in writing by Landlord. Tenant shall be solely liable for
any damage caused by the removal of any alterations and shall forthwith and with
all due diligence at its sole cost and expense, repair any damage to the
Premises caused by such removal.
If Tenant shall fail to remove such alterations at the expiration or earlier
termination of the Lease, Landlord may, at its option, remove any or all
alterations and Tenant shall pay to Landlord the reasonable cost of such removal
within ten (10) days of Tenant's receipt of an appropriate invoice with
supporting documentation.
REPAIRS
11.a
Tenant takes the Premises without any representations or warranties from
Landlord about its condition, either express or implied. By taking possession of
the Premises, Tenant shall be deemed to have accepted the Premises as being in
good, sanitary order, condition and repair. Tenant shall at Tenant's sole cost
and expense, keep the interior, non-structural portion of the Premises and every
part thereof in good condition and repair, damage thereto from causes beyond the
reasonable control of Tenant and ordinary wear and tear excepted. However, in no
event shall Tenant's obligation to repair under this subsection extend to (1)
damage caused by any defects in the design, construction or materials of the
Building, including the Premises and improvements installed therein by Landlord;
(ii) damage caused in whole or in part by the negligence or willful misconduct
of Landlord or Landlord's agents, employees, invitees or licensees; (iii)
repairs covered under Operating Expenses; (iv) reasonable wear and tear, (v)
conditions covered under any warranties of Landlord's contractors; or (vi)
damage by fire and other casualties, or acts of governmental authorities, or
acts of God and the elements. Tenant agrees, at Tenant's sole cost and expense,
to keep carpeting and drapery in good condition and repair and to replace
carpeting and drapery as wear and tear necessitates. Tenant shall upon the
expiration or early termination of this Lease surrender the Premises to Landlord
in good condition., ordinary wear and tear and damage from causes beyond the
reasonable control of Tenant excepted. Landlord shall have no obligation
whatsoever to alter, remodel, improve, repair, decorate, or paint the Premises
or any part thereof and the parties hereto affirm that Landlord has made no
representations to Tenant respecting the condition of the Premises or the
Building except as specifically set forth by addendum hereto, if any.
11.b
Notwithstanding the provisions of Article 11.a hereinabove, Landlord shall
repair and maintain the structural portions of the Building, including the basic
plumbing, air conditioning, heating, and electrical systems, installed or
furnished by Landlord. If maintenance and repairs are caused in part or in whole
by the act, neglect, fault, or omission of any duty by Tenant, its agents,
servants, employees or invitees, Tenant shall pay to Landlord the reasonable
cost of the maintenance or repairs. Landlord shall not be
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liable for any failure to make any repairs or to perform any maintenance unless
the failure persists for an unreasonable time after written notice of the need
for repairs or maintenance is given to Landlord by Tenant. Except as provided in
Article 21 hereof, there shall be no abatement of rent and no liability of
Landlord by reason of any injury to or interference with Tenant's business
arising from the making of any repairs, alterations or improvements in or to any
portion of the Building or the Premises or to fixtures, appurtenances and
equipment therein.
11.c
To the extent that Landlord, rather than a public utility, is the owner of
telecommunications risers and cabling contents, Landlord is responsible for the
repair of all basic intra-Building telephone and network cabling and riser
systems providing service to all tenants in the Building. Tenant, however, is
solely responsible for the repair of any intra-Building telephone and network
cabling installed to exclusively serve all or a portion of the Premises,
including all distribution throughout the Premises from Tenant's telephone
closet. Any person or contractor selected by Tenant to repair any intra-Building
telephone and network cabling must first be approved in writing by Landlord.
LIENS
12.
Tenant shall keep the Premises and the Building in which the Premises are
situated free from any liens arising out of any work performed, materials
furnished, or obligations incurred by Tenant. Landlord may require, at
Landlord's sole option, that Tenant shall provide to Landlord, at Tenant's sole
expense, a lien and completion bond in an amount equal to the amount of any and
all estimated costs of any improvements, additions or alterations in the
Premises to insure against any liability for mechanics' and materialmen's liens
and to insure completion of the work.
ASSIGNMENTS AND SUBLETTING
13.
Tenant shall not transfer, assign, mortgage, or hypothecate this Lease or
any right or interest hereunder, or sublet the Premises or any part thereof,
without the prior written consent of Landlord, which consent shall not be
unreasonably withheld or delayed. No assignment, subletting, or other transfer
in violation of the terms of this Article, whether voluntary or involuntary, by
operation of law, under legal process or proceedings, by receivership, in
bankruptcy, or otherwise, shall be valid or effective, should Landlord consent
to any subletting or assignment, such consent shall not constitute a waiver of
any of the restrictions of this Article and the same shall apply to each
successive assignment or subletting hereunder, if any. In no event shall
Landlord's consent to an assignment or subletting relieve Tenant of any of its
obligations hereunder without an express written release being given by
Landlord. If this Lease is assigned or if Premises or any portion
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thereof are sublet, Landlord may collect rent and all other charges due
hereunder directly from the Assignee or Subtenant, but such collection shall not
constitute a consent or a waiver of the necessity of consent to such assignment
or subletting, nor shall such collection constitute a recognition of such
Assignee or Subtenant as the Tenant hereunder or a release of Tenant from the
performance of all its obligations hereunder. Tenant agrees that it shall not be
unreasonable for Landlord to withhold its consent to a proposed assignment or
subletting if:
1. Landlord believes that the proposed Assignee or Subtenant is not as
financially responsible as Tenant on the date hereof;
2. Landlord believes that the proposed Assignee or Subtenant will not conduct
on the Premises a business of quality equal to that conducted by Tenant; or
3. Landlord believes that the business of the proposed Assignee or
Subtenant,conducted on the Premises will have an impact upon the common
facilities or will require services of the Landlord that are materially in
excess of the services provided to Tenant under this Lease. If Tenant shall
assign, sublease or otherwise transfer all or any portion of the Leased Premises
to a party other than Tenant Affiliate, Landlord and Tenant shall evenly divide
any rent or other consideration paid to Tenant in connection with such
assignment, sublease or other transfer which is in excess of the base rent due
under this Lease, after first deducting out for the Tenant's account the cost of
(1) broker's commissions paid by Tenant with regard to the transfer; (ii) legal
fees; (iii) the cost of improvements made to the Leased Premises by Tenant at
Tenant's expense as of the date of such transfer, or any tenant improvements
made by the Tenant at Tenant's expense for the purpose of transfer; (iv) the
unamortized portions of improvements made in the transferred area by Tenant for
Tenant's use during the original tenancy; (v) all rent paid by Tenant to
Landlord while the Leased Premises were vacant prior to such transfer; and (vi)
any other expenses incurred by Tenant in effectuating the transfer. The terms of
this section shall survive the expiration or earlier termination of the Lease.
4. Landlord believes that the proposed Assignee or Subtenant is Landlord's
business competitor, or would create a conflict of interest, or the
appearance of a conflict of interest.
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If Tenant is a corporation, an incorporated association, or a partnership,
the transfer assignment of hypothecation of any stock or interest is such
corporation, association or partnership in the aggregate in excess of twenty-
five percent (25%) shall be deemed an assignment within the meaning and
provisions of this Article, shareholder or member to his spouse, children, or
grandchildren, is included in the foregoing provisions.
If Landlord consents to an assignment or subletting by Tenant of all or
portion of Tenant's interest under this Lease, Tenant shall pay to Landlord a
transfer fee of $250.00; provided however, that such transfer fee shall be
payable upon Landlord's consent to a transfer or assignment of Tenant's interest
hereunder as security for a loan.
Provided further and not withstanding anything to the contrary contained herein:
1 In the event that Tenant seeks to assign or sublet all or a portion of the
Premises (a "Transfer"), Landlord shall have the right to terminate this Lease
or, in the case of a sublease of less than all of the Premises, terminate this
lease as to that part of the Premises proposed to be so sublet so that Landlord
is thereafter free to lease the Premises (or, in the case of a partial sublease,
the portion proposed to be so sublet) to whomever it pleases on whatever terms
are acceptable to Landlord. In the event Landlord elects to so terminate this
Lease, then, if Landlord elects simply to terminate this Lease (or, in the case
of a partial sublease, terminate this Lease as to the portion to be so sublet),
the lease shall so terminate in its entirety (or as to the space to be so
sublet), upon the date the Transfer was to become effective. Upon such
termination, Tenant shall be released from any further obligation under this
Lease if it is terminated in its entirety, or shall be released from any further
obligation under the Lease with respect to the space proposed to be sublet in
the case of a proposed partial sublease. In the case of a partial termination of
the Lease, the base rent and Tenant's pro rata share shall be reduced to an
amount which bears the same relationship to the original amount thereof as the
area of that part of the Premises which remains subject to the Lease bears to
the original area of the Premises. Landlord and Tenant shall execute a
cancellation and release with respect to the Lease to affect such termination.
2. If Landlord indicates the intent to exercise this option, Tenant has the
right to withdraw its request for assigning or subletting a portion of the
Lease.
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3. if Landlord exercises its option, Landlord may subsequently lease the
premises to Tenant's proposed transferee or to any other party.
4. If Landlord fails to exercise such option, and Tenant fails to complete
negotiations for valid and bona fide assignment to or sublease with a third
party within sixty (60) days after receipt of the Transfer Notice by
Landlord in accordance with the terms of the Transfer Notice, Tenant shall
again comply with all of the conditions of this Article as if the notice
and option hereinabove referred to had not been given or received. In the
event Landlord does not exercise its option and Tenant completes
negotiations for an assignment or sublease with a third party within the
sixty (60) day period, Tenant shall deliver an executed copy of such
assignment or sublease to Landlord to obtain its consent as required
herein. If Landlord consents to a sublease or assignment (hereinafter
"Transfer"), then such Transfer shall be subject to and made upon the
following terms:
a. Any such Transfer shall be subject to the terms of this Lease and the
term thereof may not extend beyond the expiration of the term of this
Lease.
b. The use to be made of the transferred space shall be a legal use and
in keeping with the character of the Building.
C. Such Transfer shall not violate any negative covenant as to use
contained in any deed affecting the Building.
d. No transferee shall have the right to further transfer.
INDEMNIFICATION OF LANDLORD
14. Landlord shall not be liable to Tenant and Tenant
hereby waives all claims against Landlord for any injury or damage to any person
or property in or about the Premises by or from any cause whatsoever other than
the negligence or willful misconduct of Landlord or Landlord's agents, employees
or contractors, and without limiting the generality of the foregoing whether
caused by water leakage of any character from the roof, walls, basement or other
portion of the Premises or the Building, or caused by gas, fire, oil,
electricity or any cause whatsoever in, on, or about the Premises or the
Building.
Tenant shall indemnify Landlord and hold Landlord harmless from and defend
Landlord against any and all claims or liability for any injury or damage to any
person or property whatsoever: (1) occurring in or about the premises or any
part thereof, and (2) occurring in or about any facilities (including, without
prejudice to the generality of the term "facilities", elevators, stairways,
parking areas, passageways or hallways) the use of which Tenant may have in
common with other tenants of the Building to the extent such
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injury or damage shall be caused by the act, neglect, fault of, or omission of
any duty with respect to the same, by Tenant, its agents, servants, employees or
invitees.
SUBROGATION
15.
Landlord and Tenant hereby mutually waive their respective rights of
recovery against each other for any loss insured by fire, extended
coverage, and other property insurance policies existing for the benefit of
the respective parties. Each party shall obtain any special endorsements,
if required by their insurer, to evidence compliance with the
aforementioned waiver.
LIABILITY INSURANCE
16.
Tenant agrees to provide and pay for public liability insurance written by
a responsible insurance company, in which the limits of liability coverage shall
be not less than $1,000,000 personal injury and property damage. The amount of
insurance coverage shall not, however, limit the liability of Tenant hereunder.
Said policy shall also provide that the same may not be canceled without fifteen
(15) days prior written notice to Landlord. Landlord shall be furnished a copy
of the policy or suitable certificate evidencing insurance coverage prior to
occupancy of the Premises and a certificate evidencing renewal of said policy
upon the scheduled termination date.
SERVICES AND UTILITIES
17.
Provided that Tenant is not in default hereunder, Landlord agrees to
furnish to the Premises during 6:30am to 5:30pm on weekdays, nationally
recognized holidays excluded, and subject to the rules and regulations of the
Building of which the Premises are a part, electricity for normal lighting and
fractional horsepower office machines, heat and air conditioning required in
Landlord's reasonable judgment for the comfortable use and occupation of the
Premises, and janitorial services. Janitorial services shall not include
cleaning of carpets and drapes other than vacuuming. Landlord shall also
maintain and keep lighted the common stairs, common entries and toilet rooms in
the Building of which Premises are a part. Landlord agrees to provide Tenant
with reasonable use of the intra-Building telephone and network cabling.
Landlord shall meet any need Tenant may have for extraordinary
telecommunications services, provided that Tenant shall pay as Additional Rent,
the actual charges for such use, including the cost of installing any necessary
additional riser capacity as reasonably determined by Landlord.
Tenant will not, without written consent of Landlord, use any apparatus or
device in the Premises, including, but not limited to electronic data processing
machines and machines using in excess of 120 volts which will in any way
increase the amount of
13
electricity usually furnished or supplied for the use of the Premises as general
office space; nor connect with electric current, except through existing
electrical outlets in the Premises, any apparatus or device for the purpose of
using electric current. If Tenant shall require water or electric current in
excess of that usually furnished or supplied for the use of the Premises as
general office space, Tenant shall first procure the written consent of
Landlord, which Landlord may refuse. Landlord may cause a water meter or
electrical current meter to be installed in the Premises to measure the amount
of water and electrical current consumed for any such use. The cost of
installation, maintenance, and repair of such meters shall be paid for by
Tenant, and Tenant agrees to pay to Landlord promptly upon demand for all such
water and electric current consumed as shown by said meters at the rates charged
for such services by the local utility furnishing the same. If a separate meter
is not installed, the excess cost for such water and electric current will be
established by an estimate made by the utility company or an electrical
engineer, at Landlord's discretion. Wherever heat generating machines or
equipment are used in the Premises which affect the temperature otherwise
maintained by the air conditioning system, Landlord reserves the right to
install supplementary air conditioning units in the Premises and the cost
thereof, including the cost of installation and the cost of operation and
maintenance thereof, shall be paid by Tenant to Landlord upon demand by
Landlord.
Except as may be provided elsewhere in this Lease, Landlord shall not be
liable for any loss or damage to Tenant, and Tenant shall not be entitled to any
abatement or reduction of rent as a result of Landlord's failure to provide
access, utilities or services that Landlord is required to provide hereunder,
when such failure is beyond Landlord's reasonable control including, without
limitation, accident, breakage, repairs, shortage of materials or supplies,
strike, lockout, boycott, labor dispute, fire, earthquake, acts of God, rioting,
insurrection, war, government action, or acts of the public enemy.
PROPERTY TAXES
18.
Tenant agrees to pay, before delinquency, any and all taxes levied or
assessed and which become payable during the term hereof upon Tenant's
equipment, furniture, fixtures, leasehold improvements and other personal
property located in the Premises.
RULES AND REGULATIONS
19.
Tenant agrees to observe and comply with the Rules and Regulations attached
to this Lease and all reasonable modifications of and additions thereto from
time to time put into effect by Landlord provided that the terms thereof do not
contradict or contravene the terms of the Lease. Landlord shall not be
responsible to Tenant for the nonperformance by any other Tenant or occupant of
the Building of these Rules and Regulations.
14
ENTRY BY LANDLORD
20.
Landlord reserves and shall at any and all times have the right, upon
written notice to Tenant at least twenty four (24) hours in advance (except in
case of emergencies or routine janitorial services), to enter the Premises,
inspect the same, supply janitorial service and any other service to be provided
by Landlord to Tenant hereunder, to submit said Premises to prospective
purchasers or tenants, to post notices of non-responsibility, and to alter,
improve or repair the Premises and any portion of the Building of which the
Premises are a part that landlord may deem necessary or desirable, without
abatement of rent, and may for that purpose erect scaffolding and other
necessary structures where reasonably required by the character of the work to
be performed, always providing that the entrance of the Premises shall not be
blocked thereby and further providing that the business of the Tenant shall not
be interfered with unreasonably. Tenant hereby waives any claim for damages or
for any injury or inconvenience to or interference with Tenant's business, any
loss of occupancy or quiet enjoyment of the Premises, and any other loss
occasioned thereby, unless caused by the negligence or willful misconduct of
Landlord or Landlord's agents, employees or contractors. For each of the
aforesaid purposes, Landlord shall at all times have and retain a key with which
to unlock all of the doors in, upon and about the Premises, excluding Tenant's
vaults, safes and files, and Landlord shall have the right to use any and all
means which Landlord may deem proper to open said doors in an emergency in order
to obtain entry to the Premises without liability to Tenant except for any
failure to exercise due care for Tenant's property. Any entry to the Premises
obtained by Landlord by any of said means, or otherwise, shall not under any
circumstances be construed or deemed to be a forceable or unlawful entry into,
or a detainer of, the Premises or an eviction of Tenant from the Premises or any
portion thereof.
DAMAGE BY FIRE, ETC.
21.
In the event the Premises or the Building of which the Premises are a part
is damaged by fire or other casualty, Landlord shall forthwith repair the same
provided such repairs can be made within one hundred eighty (180) days, under
the laws and regulations of the state, federal, county and municipal authorities
and this Lease shall remain in full force and effect except that Tenant shall be
entitled to a proportionate abatement in rent while such repairs are being made,
such reduction to be based pro rata to the extent to which the making of such
repairs shall interfere with the use and occupancy of Tenant in the Premises. If
the damage is due to the fault or neglect of Tenant or its employees, there
shall be no abatement of rent. If such repairs cannot be made within one hundred
eighty (180) days, Landlord shall have the option either (1) to repair or
restore such damage, this lease continuing in full force and effect with rent to
be proportionately abated as provided in this Article, or (2) give notice to
Tenant at any time within thirty (30) days after such damage terminating this
Lease as of the date specified in the notice, which date shall be not fewer than
thirty (30) nor more than sixty (60) days after giving such notice. In the event
of the giving of such notice this Lease shall expire and all interest of the
Tenant in
15
the Premises shall terminate on the date specified in the notice and the rent,
reduced by any proportionate reduction based upon the extent, if any, to which
said damage interfered with the use and occupancy of Tenant, shall be paid to
the date of termination, Landlord agreeing to refund to the Tenant any rent paid
in advance for any period of time subsequent to such date. Landlord shall not be
required to repair any injury or damage by fire or other cause, or to make any
repairs or replacements of any panelings, decorations, partitions, railings,
ceilings, floor coverings, office textures or any other property installed in
the Premises by Tenant.
If the Building is damaged or destroyed to the extent that the Building
cannot with reasonable diligence be fully repaired or restored by Landlord
within one hundred eighty (180) days after the date of the damage or
destruction, Tenant may terminate this lease immediately upon notice thereof to
Landlord and the obligation of Tenant, if any, to pay Rent to Landlord shall
terminate as of the date of such notice. If this lease is not terminated despite
damage or destruction to the Building, and Landlord fails to proceed with
reasonable diligence to rebuild, or if the building is not rebuilt within one
hundred eighty (180) days of the event causing the damage or destruction, Tenant
may, at its option, terminate this Lease upon notice to Landlord. If the
Building is damaged or destroyed during the last twelve (12) months of the term
of the Lease, and the Building cannot be fully repaired or restored by landlord
within sixty (60) days after the date of damage or destruction, either Landlord
or Tenant may terminate this lease upon notice to the other.
Tenant shall not be entitled to any compensation or damages from landlord
from loss of the use of the whole or any part of the Premises, Tenant's personal
property, or any inconvenience or annoyance occasioned by such damage, repair,
reconstruction, or restoration.
INVOLUNTARY ASSIGNMENT
22.
No interest of Tenant in this Lease shall be assignable by operation of
law (including, without limitation, the transfer of this Lease by testacy or
intestacy). Each of the following acts shall be considered an involuntary
assignment:
1. If Tenant is or becomes bankrupt or insolvent, makes an assignment for
the benefit of creditors, or institutes a proceeding under the Bankruptcy
Act in which Tenant is the bankrupt; or, if Tenant is a partnership or
consists of more than one person or entity, if any partner of the
partnership or other person or entity is or becomes bankrupt or insolvent,
or makes an assignment for the benefit of creditors;
16
2. If a writ of attachment or execution is levied on this Lease;
3. If, in any proceeding or action to which Tenant is a party, a receiver
is appointed with authority to take possession of the Premises.
An involuntary assignment shall constitute a default by Tenant and Landlord
shall have the right to elect to terminate this Lease, in which case this Lease
shall not be treated as an asset of Tenant.
TENANT'S DEFAULT
23.
The occurrence of any of the following shall constitute a default by
Tenant:
1. Failure to pay rent when due, if the failure continues for three (3)
business days after written notice has been given to Tenant.
2. Abandonment and vacation of the Premises (failure to occupy and
operate the Premises for fifteen (15) consecutive days shall be deemed an
abandonment and vacation).
3. Failure to perform any other provision of this Lease if the failure to
perform is not cured within thirty (30) days after notice has been given to
Tenant. If the default cannot reasonably be cured within thirty (30) days,
Tenant shall not be in default of this Lease if Tenant commences to cure
the default within the thirty- day period and diligently and in good faith
continues to cure the default.
Notices given under this Article shall specify the alleged default and the
applicable Lease provisions, and shall demand that Tenant perform the provisions
of this Lease or pay the rent that is in arrears, as the case may be, within the
applicable period of time, or quit the Premises. No such notice shall be deemed
a forfeiture or a termination of this Lease unless Landlord so elects in the
notice.
REMEDIES IN DEFAULT
24.
Landlord shall have the following remedies if Tenant commits a default.
These remedies are not exclusive; they are cumulative and are in addition to any
remedies now or later allowed by law.
1. Landlord may continue this Lease in full force and effect, and the
Lease will continue in effect as long as landlord does not terminate
Tenant's right to possession, and Landlord shall have the right to collect
rent when due. During the period Tenant is in default, Landlord may enter
the Premises and relet them, or any part of them, to third parties for
Tenant's account. Tenant shall be liable
17
immediately to Landlord for all costs Landlord incurs in reletting the
Premises, including, without limitation, brokers' commissions, expenses of
remodeling the Premises required by the reletting, and like costs.
Reletting may be for a period shorter or longer than the remaining term of
this Lease. Tenant shall pay to Landlord the rent due under this Lease on
the dates the rent is due, less the rent Landlord receives from any
reletting. No act by Landlord allowed by this Article shall terminate this
Lease unless Landlord notifies Tenant that Landlord elects to terminate
this Lease. After Tenant's default and for as long as Landlord does not
terminate Tenant's right to possession of the Premises, if Tenant obtains
Landlord's consent, Tenant shall have the right to assign or sublet its
interest in this Lease, subject to the provisions of Article 13 of this
Lease, but Tenant shall not be released from liability. Landlord's consent
to a proposed assignment or subletting shall not be unreasonably withheld.
2. Landlord may terminate Tenant's right to possession of the Premises at
any time. No act by Landlord other than giving notice to Tenant shall
terminate this Lease. Acts of maintenance, efforts to relet the Premises,
or the appointment of a receiver on Landlord's initiative to protect
Landlord's interest under this Lease shall not constitute a termination of
Tenant's right to possession. On termination, Landlord has the right to
recover from Tenant:
a. The worth, at the time of the award issued by a court of law or equity
(hereinafter "award"), of the unpaid rent that had been earned at the
time of termination of this Lease;
b. The worth, at the time of the award, of the amount by which the unpaid
rent that would have been earned after the date of termination of this
Lease until the time of award exceeds the amount of the loss of rent
that Tenant proves could have been reasonably avoided;
c. The worth, at the time of the award, of the amount by which the unpaid
rent for the balance of the term after the time of award exceeds the
amount of the loss of rent that Tenant proves could have been
reasonably avoided; and
d. Any other amount, and court costs, necessary to compensate Landlord
for all detriment proximately caused by Tenant's default.
"The worth, at the time of the award," as used in subdivisions (a) and (b)
of this Article, is to be computed by allowing interest at the maximum rate an
individual is permitted by law to charge. "The worth, at the time of the award,"
as referred to in subdivision (c) of this Article, is to be computed by
discounting the amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of the award, plus 1%
18
3. If Tenant is in default of this Lease, Landlord shall have the right
to have a receiver appointed to collect rent and conduct Tenant's business.
Neither the filing of a petition for the appointment of a receiver nor the
appointment itself shall constitute an election by Landlord to terminate
this Lease.
4. Landlord, at any time after Tenant commits a default, may cure the
default at Tenant's cost. If Landlord at any time, by reason of Tenant's
default, pays any sum or does any act that requires the payment of any sum,
the sum paid by Landlord shall be due immediately from Tenant to Landlord
at the time the sum is paid, and if paid at a later date shall bear
interest at the maximum rate an individual is permitted by law to charge
from the date the sum is paid by Landlord until Landlord is reimbursed by
Tenant. The sum, together with interest on it, shall be Additional Rent.
EMINENT DOMAIN
25.
If more than twenty-five percent (25% ) of the Premises shall be taken or
appropriated by any public or quasi-public authority under the power of eminent
domain, either party hereto shall have the right, at its option, to terminate
this Lease, and Landlord shall be entitled to any and all income, rent, award,
or any interest therein whatsoever which may be paid or made in connection with
such public or quasi-public use or purpose, and Tenant shall have no claim
against Landlord for the value of any unexpired term of this Lease. If either
less than or more than twenty-five percent (25%) of the Premises is taken, and
neither party elects to terminate as herein provided, the rental thereafter to
be paid shall be equitably reduced. If any part of the Building other than the
Premises may be so taken or appropriated, Landlord shall have the right at its
option to terminate this Lease and shall be entitled to the entire award as
above provided.
PARKING
26.
Throughout the term hereof, Tenant shall have the right to the use of
twenty five (25) parking stalls on a non-exclusive basis for parking on such
terms and conditions as may be established and modified in writing by Landlord,
provided that the terms thereof do not contradict or contravene the terms of
this Lease. Use of parking stalls is limited to passenger cars and vans.
Landlord retains the right to impose parking fees and to change the rates from
time to time as it so determines with the exception that during the initial term
there shall be no parking fees. Tenant shall not use any loading area without
the prior written consent of Landlord.
19
SURRENDER OF PREMISES
28.
On expiration of the term, Tenant shall surrender to Landlord the Premises
and all Tenant improvements and alterations in good condition, except for
alterations that Tenant has a right to remove or obligated to remove under the
provisions of this Lease, reasonable wear and tear and events outside the
reasonable control of Tenant. Tenant shall remove all of its personal property
within the above stated time. Tenant shall perform all restoration made
necessary by the removal of any alterations or Tenant's personal property within
the time period stated in this Article.
Landlord may elect to retain or dispose of in any manner any alterations or
Tenant's personal property that Tenant does not remove from the Premises on
expiration or termination of the term as allowed or required by this Lease by
giving at least ten days' notice to Tenant. Title to any such alterations or
Tenant's personal property that the Landlord elects to retain or dispose of on
expiration of the ten day period shall vest in Landlord. Tenant waives all
claims against Landlord for any damage to Tenant resulting from Landlord's
retention or disposition of any such alterations or Tenant's personal property.
Tenant shall be liable to Landlord for Landlord's costs for storing, removing,
and disposing of any alterations or Tenant's personal property.
If Tenant fails to surrender the Premises to Landlord on expiration of the
term as required by this Article, Tenant shall hold Landlord harmless for
damages resulting from Tenant's failure to surrender the Premises, including,
without limitation, claims made by a succeeding tenant resulting from Tenant's
failure to surrender the Premises.
HOLDING OVER
29.
If Tenant, with Landlord's consent, remains in possession of the Premises
after expiration or termination of the term, or after the date in any notice
given by Landlord to Tenant terminating this Lease, such possession by Tenant
shall be deemed to be a month-to-month tenancy terminable on thirty (30) days'
notice given at any time by either party. During any such month-to-month
tenancy, Tenant shall pay 125% of the rent required by Articles 4 and 7 of this
Lease on or before the first day of each month. All provisions of this Lease
except those pertaining to the term of the Lease shall apply to the month-
to-month tenancy.
LATE PAYMENTS & INTEREST
30.
Tenant hereby acknowledges that late payment by Tenant to Landlord of any
sums due hereunder will cause Landlord to incur costs not contemplated by this
Lease, the exact amount of which is extremely difficult to ascertain. Such costs
include, but are not limited
20
to, processing and accounting charges. Accordingly, any payment of any sum to be
paid by Tenant not paid by its due date shall be subject to a late charge equal
to five percent (5%) of such payment. Landlord and Tenant agree that this late
charge represents a reasonable estimate of such costs and expenses and is fair
compensation to Landlord for its loss suffered by such late payment by Tenant.
Any sum to be paid by Tenant pursuant to this Lease not paid when due shall
bear interest from and after the due date until paid at a rate equal to the
lesser of (a) the greater of the Prime Rate then charged by ▇▇▇▇▇ Fargo Bank
plus two percent (2%) or (b) the maximum rate permitted by law.
ARBITRATION
31.
With the exception of any unlawful detainer action, any dispute concerning
interpretation of the Lease or its enforceability, any dispute concerning
default by either party, and any dispute that may require imposition of an
injunction or other court order to enforce an award, any controversy or claim
arising out of or relating to this Lease, or the breach thereof, shall be
settled by arbitration in accordance with the Rules of the American Arbitration
Association, and judgment upon the award rendered by the Arbitrator(s) may be
entered in any court having jurisdiction thereof. All arbitration hearings shall
be conducted in California.
REAL ESTATE BROKER
32.
Landlord and Tenant each warrants and represents for the benefit of the
other that it has had no dealings with any real estate broker or agent in
connection with the negotiation of this Lease other than Cornish & ▇▇▇▇▇
("Broker"), and that it knows of no real estate brokers or agents other than
Brokers who are or might be entitled to a real estate brokerage commission or
finder's fee in connection with this Lease. Each party shall indemnify and hold
harmless the other from and against any and all liabilities or expenses arising
out of claims made by any broker or individual other than Brokers for
commissions or fees resulting from the actions of the indemnifying party in
connection with this Lease. Landlord shall pay any commission due to broker with
respect to this Lease in accordance with the separate listing agreement between
CB Commercial and Landlord. Real Estate Fees shall be split 50/50 between
Landlord Broker (CB Commercial) and Tenant Broker (Cornish & ▇▇▇▇▇) in
accordance with listing agreement an d shall indemnify and hold Tenant harmless
from and against any and all liabilities or expenses arising out of claims made
by Brokers for commissions or fees resulting from this Lease.
21
GENERAL PROVISIONS
33.
(I) PLATS AND RIDERS. Clauses, plats and riders, if any, signed by the
Landlord and the Tenant and endorsed on or affixed to this Lease are a part
thereof.
(II) WAIVER. The waiver by Landlord of any term, covenant, or condition
herein contained shall not be deemed to be a waiver of such term, covenant, or
condition on any subsequent breach of the same or any other term, covenant, or
condition herein contained. The subsequent acceptance of rent hereunder by
Landlord shall not be deemed to be a waiver by Landlord of any preceding breach
by Tenant of any term, covenant and condition of this Lease, other than the
failure of the Tenant to pay the particular rent so accepted, regardless of
Landlord's knowledge of such preceding breach at the time of the acceptance of
such rent.
(III) NOTICES. All Notices herein provided to be given, or which may be
given, by either party to the other, shall be deemed to have been fully given
when made in writing and deposited in the United States mail, certified and
postage prepaid; and addressed as follows: To the Tenant at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇ _, ▇▇▇ ▇▇▇▇, ▇▇. and to the Landlord, Attention: Real Property Management,
at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Nothing herein contained
shall preclude the giving of any such written notice by personal service. The
address to which notices shall be mailed as aforesaid to either party may be
changed by written notice given by such party to the other, as herein provided.
(IV) MARGINAL HEADINGS. The marginal headings and titles to the Articles
of this Lease are not a part of this Lease and shall have no effect upon the
construction or interpretation of any part thereof.
(V) TIME. Time is of the essence of this Lease and each and all of its
provisions in which performance is a factor.
(VI) SUCCESSORS AND ASSIGNS. The covenants and conditions herein
contained subject to the provisions as to assignment, apply to and bind the
heirs, successors, executors, administrators, and assignees of the parties
hereto.
(VII) RECORDATION. Tenant shall not record this Lease or a short form
memorandum hereof without the prior written consent of the Landlord.
(ViII) QUIET POSSESSION. Upon Tenant paying the rent reserved hereunder
and observing and performing all of the covenants, conditions, and provisions on
Tenant's part to be observed and performed hereunder, Tenant shall have quiet
possession of the Premises for the entire term hereof, subject to all the
provisions of this Lease.
22
(IX) PRIOR AGREEMENTS. This Lease contains all of the agreements of the
parties hereto with respect to any matter covered or mentioned in this Lease and
no prior agreements or understanding pertaining to any such matters shall be
effective for any purpose. No provision of this Lease may be amended or added to
except by an agreement in writing signed by the parties hereto or their
respective successors in interest. This Lease shall not be effective or binding
on any party until executed by both parties hereto.
(X) INABILITY TO PERFORM. This Lease and the obligations of Tenant
hereunder shall not be affected or impaired because Landlord is unable to
fulfill any of its obligations hereunder or is delayed in doing so, if such
inability or delay is caused by reason of strike, labor trouble, acts of God, or
any other cause beyond the reasonable control of the Landlord.
(XI) SUBORDINATION. This Lease is and shall be prior to any encumbrance
now of record and any encumbrance recorded after the date of this Lease
affecting the Building, other improvements, and land of which the Premises are a
part.
If, however, a lender requires that this Lease be subordinate to any such
encumbrance, this Lease shall be subordinate to that encumbrance, if Landlord
first obtains from the lender a written agreement that provides substantially
the following:
As long as Tenant performs its obligations under this Lease, no foreclosure
of, deed given in lieu of, foreclosure of, or sale under the encumbrance, and no
steps or procedures taken under the encumbrance, shall affect Tenant's rights
under this Lease.
The provisions in Article 25 of this Lease concerning the disposition of
any condemnation award, shall prevail over any conflicting provisions in the
encumbrance.
Tenant shall attorn to any purchaser at any foreclosure sale, or to any
grantee or transferee designated in any deed given in lieu of foreclosure.
Tenant shall execute the written agreement and any other documents required by
the lender to accomplish the purposes of this Article.
(XII) ESTOPPEL CERTIFICATE.
(a) Tenant shall at any time upon not fewer than fifteen (15) days prior
written notice from Landlord execute, acknowledge, and deliver to
Landlord a statement in writing (i) certifying that this Lease is
unmodified and in full force and effect (or, if modified, stating the
nature of such modification and certifying that his Lease as so
modified, is in full force and effect) and the date to which the rent
and other charges are paid in advance, if any, and (ii) acknowledging
that there are not, to Tenant's knowledge, any uncured
23
defaults on the part of Landlord hereunder, or specifying such
defaults if any are claimed. Any such statement may be conclusively
relied upon by any prospective purchaser or encumbrancer of the
Premises.
(b) Tenant's failure to deliver such statement within such time shall
be conclusive upon Tenant (i) that this Lease is in full force and
effect, without modification except as may be represented by
Landlord, (ii) that there are no uncured defaults in Landlord's
performance, and (iii) that not more than one month's rent has been
paid in advance.
(c) If Landlord desires to finance or refinance the Premises, or any
part thereof, Tenant hereby agrees to deliver to any lender
designated by Landlord such financial statement of Tenant as may be
reasonably required by such lender. All such financial statements
shall be received by Landlord in confidence and shall be used only
for the purposes herein set forth.
(XIII) SALE BY LANDLORD. In the event of a sale or conveyance by Landlord
of the Building containing the Premises, the same shall operate to release
Landlord from any future liability upon any of the covenants or conditions,
express or implied, herein contained in favor of Tenant and in such event Tenant
agrees to look solely to the responsibility of the successor in interest of
Landlord in and to this Lease. This Lease shall not be affected by any such
sale, and Tenant agrees to attorn to the purchaser or assignee.
(XIV) NAME. Tenant shall not use the name of the Building for any purpose
other than as an address of the business to be conducted by the Tenant in the
Premises without prior written consent of Landlord. Tenant also shall not use
the name State Compensation Insurance Fund for any purpose without prior written
consent of Landlord.
(XV) SEVERABILITY. Any provision of this Lease which shall prove to be
invalid, void, or illegal shall in no way affect, impair or invalidate any other
provisions hereof and such other provisions shall remain in full force and
effect.
(XVI) CUMULATIVE REMEDIES. No remedy or election hereunder shall be
deemed exclusive but shall wherever possible, be cumulative with all other
remedies at law or in equity.
(XVII) CHOICE OF LAW. This Lease shall be governed by the laws of the
State of California.
(XVIII) DELIVERY. Delivery of this Lease to Tenant does not constitute an
offer to lease or reservation of right in Tenant's favor and-this Lease shall
not be binding upon Landlord unless and until such time as Landlord shall have
the Lease signed and delivered to Tenant.
24
ADDENDUM
BASIC MONTHLY RENT
4a.
Month Sq. Ft. X (Rate/Sq. Ft./Month/F.S.) Monthly Rent
01 -06 5,395 sq. ft. $1.522 /Sq. Ft./Mo./Full Service $ 8,211.19
07-12 7,195 sq. ft. $1.522 /Sq. Ft./Mo./Full Service $10,950.79
13-24 7,195 sq. ft $1.584 /Sq. Ft./Mo./Full Service $11,396.88
25-36 7,195 sq. ft $1.644 /Sq. Ft./Mo./Full Service $11,828.58
37-48 7,195 sq. ft $1.709 /Sq. Ft./Mo./Full Service $12,296.26
49-60 7,195 sq. ft $1.777 /Sq. Ft./Mo./Full Service $12,785.52
ABATED RENT
35.
There is a space of 1,800 Sq. Ft. that is not needed by tenant at initial
occupancy. Provided Tenant is not in default beyond any applicable cure period,
Landlord agrees to ▇▇▇▇▇ rent on the subject 1,800 Sq. Ft. for a period of six
months (1,800 X $1.522 - $2,739.60 X 6 months - $16,437.60 in total rent
abatement). Said abatement shall be on a monthly basis. Tenant shall receive the
abatement by reducing the monthly contract rent of $10,950.79 by $2,739.60
resulting in monthly payments of $8,211.19 for the first six months.
TENANT IMPROVEMENTS
36.
The Landlord's standard improvement package includes $25.00 per useable sq.
ft. (Approximately $160,600.00). The current tenant improvement cost is
estimated at $174,968.20, see ATTACHED COST BREAKDOWN. This equates to an
additional $2.24 per useable foot (approximately $14,368) for specialized over-
standard improvements. Landlord agrees to absorb 50% ($7,184) of the over-
standard tenant improvements. The remainder ($7,184) of over-standard
improvements shall be reimbursed to Landlord on a repayment schedule over five
(5) year amortization at 8% per annum. The amortization adds approximately
$0.022 per rentable sq. ft. per month to the base rate of $1.50 and is reflected
in item 4a of this addendum.
See mutually agreed upon space plans marked as "Exhibit B".
(Note: The over-standard improvements are based upon the best available cost
estimates at the time of this lease drafting and may be subject to change in
accordance with amortization formula).
ADDITIONAL SECURITY/GUARANTEE
37.
Based on the extent of Tenant Improvements, Landlord and Tenant agree that
one of the
25
following forms of added security/collateral shall be provided; at final
execution, Tenant shall provide at Tenant's sole election:
(1) three months security deposit (equal to $32,852.37) or
(2) personal lease guarantee by an entity that has a net worth in excess of
$750,000.00 or
(3) DATASURF reaches a net worth of a minimum of $1.5 million and provides
written documentation subject to confirmation by landlord.
In the event DATASURF chooses item (1) or (2) as their collateral, it is hereby
understood and agreed that, provided Tenant is not in default during the first
18 months, Landlord shall deem this to be a sufficient indication of financial
stability and at that time shall implement one of the following adjustments, as
applicable:
In item (1), reduce the security deposit to one month
Or
(2), release the guarantor from further liability.
Further if at any time during the lease term Tenant achieves a net worth in
excess of $1.5 million and shows written documentation, subject to confirmation
by landlord, this shall trigger the release of collateral as stated above.
IN WITNESS WHEREOF, the parties have executed this Lease on the date first
written above.
LANDLORD/STATE COMPENSATION INSURANCE FUND
------------------------
By /s/ ▇. ▇▇▇▇▇▇
------------------------
▇. ▇▇▇▇▇▇
------------------------
VICE PRESIDENT
------------------------
TENANT/DATASURF
DATASURF, INC.
------------------------
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
________________________
President and CEO
------------------------
26
ADDENDUM II TO THAT CERTAIN OFFICE BUILDING LEASE DATED DECEMBER 19,1996, FOR
THE PROPERTY AT ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, BY AND BETWEEN
STATE COMPENSATION INSURANCE FUND, AS LANDLORD, AND DATA SURF (A.K.A. TOP TIER
SOFTWARE, INC.), AS TENANT.
RECITALS
Tenant has requested and Landlord has agreed to lease to Tenant an additional
7,016 rentable square feet (the "Expansion Premises") over and above the amount
of (the "Original Premises") 7,195 square feet leased by Landlord to Tenant in
the above-referenced Lease and its Addendum I. Said additional space shall be
leased to Tenant on all the same terms and conditions as contained in the Lease
except that Landlord and Tenant hereby agree to the following modifications to
the Articles as referenced below by name and number which correspond to the same
Articles of the Lease. Landlord agrees to paint and install carpet in the
Expansion Premises.
PARTIES (PG.1): Data Surf has changed its corporate identity to Top Tier Inc., a
--------------
Delaware Corporation.
ARTICLE 1. PREMISES: The "Original Premises" (currently 7,195 rentable sq. ft.
-------------------
on the second floor) shall be increased by 7,016 rentable square feet (the
"Expansion Premises") for a new total of 14,211 rentable square feet.
ARTICLE 2: Terms of this Amendment shall be effective August 1, 1998 and shall
---------
end on July 31, 2003. (Note: This term extends the original lease term by 17
months from February 28, 2002 to July 31, 200-' ).)
ARTICLE 3A. MONTHLY BASIC RENT: On August 1, 1998, Tenant agrees to pay Landlord
------------------------------
as Basic Rent the sum of Twenty-Five Thousand One Hundred Forty Eight and
24/100ths dollars ($25,148.24) per month in advance on the first day of each
month. (See Exhibit BI Rental Schedule. Attached hereto and made a part hereof
for total rental calculations including the original rental.)
ARTICLE 5. ADDITIONAL SECURITY DEPOSIT: Upon execution hereof, Tenant shall
--------------------------------------
deposit with Landlord the additional sum of Thirteen Thousand Seven Hundred
Fifty One and 36/100ths dollars ($13,751.36).
ARTICLE 6. OPERATING EXPENSE: Based on the combined total square footage as a
----------------------------
percentage of the overall rentable footage in the building. Tenant shall pay
Twelve and 30/100 percent (12.3 %) of any excess of the defined Operating
Expenses over the amount of Operating Expenses paid or incurred by Landlord for
the Base Year.
ARTICLE 7. RENTAL ADJUSTMENTS: See attached Exhibit B I - Rental Schedule.
-----------------------------
Except as amended herein, all other terms and conditions of the Lease shall
remain in full force and effect.
Execution this , ▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇ Compensation Insurance Fund
/s/ ▇▇▇ True
_________________________
▇▇▇ True
Real Property Manager
TENANT
Top Tier Software
/s/: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------
Attachment - Exhibit B I Rental Schedule
Cont: Article 7
Rental Schedule
Original Premises
(2/nd/ Floor)
------------------------------------------------------------------------------
Date SF/MO/FS Monthly Rent
------------------------------------------------------------------------------
8/1/98 - 7/31/99 7,195SF@$1.584 SF/MO/FS $11,396.88
------------------------------------------------------------------------------
8/1/99 - 7/31/00 7,195SF@$1.644 SF/MO/FS $11,828.58
------------------------------------------------------------------------------
8/1/00 - 7/31/01 7,195SF@$1.709 SF/MO/FS $12,296.26
------------------------------------------------------------------------------
8/1/01 - 7/31/02 7,195SF@$1.777 SF/MO/FS $12,785.52
------------------------------------------------------------------------------
8/1/02 - 7/31/03 7,195SF@$1.83 SF/MO/FS $13,166.85
------------------------------------------------------------------------------
Expansion Premises
(1/st/ Floor)
------------------------------------------------------------------------------
Date SF/MO/FS Monthly Rent
------------------------------------------------------------------------------
8/1/98 - 7/31/99 7,016SF@$1.96 SF/MO/FS $13,751.36
------------------------------------------------------------------------------
8/1/99 - 7/31/00 7,016SF@$2.02 SF/MO/FS $14,172.32
------------------------------------------------------------------------------
8/1/00 - 7/31/01 7,016SF@$2.08 SF/MO/FS $14,593.28
------------------------------------------------------------------------------
8/1/01 - 7/31/02 7,016SF@$2.14 SF/MO/FS $15,014.24
------------------------------------------------------------------------------
8/1/02 - 7/31/03 7,016SF@$2.21 SF/MO/FS $15,505.36
------------------------------------------------------------------------------
Combined
------------------------------------------------------------------------------
Date Blended -- SF/MO/FS Monthly Rent
------------------------------------------------------------------------------
8/1/98 - 7/31/99 $1.77 $25,148.24
------------------------------------------------------------------------------
8/1/99 - 7/31/00 $1.83 $26,000.90
------------------------------------------------------------------------------
8/1/00 - 7/31/01 $1.89 $26,889.54
------------------------------------------------------------------------------
8/1/01 - 7/31/02 $1.96 $27,799.76
------------------------------------------------------------------------------
8/1/02 - 7/31/03 $2.02 $28,672.21
------------------------------------------------------------------------------
EXHIBIT B1