EXHIBIT 10.18
OFFICE BUILDING LEASE
1. PARTIES. This Lease, dated, for reference purposes only, JANUARY 6, 2000
is made by and between ▇▇▇▇▇▇▇ AND ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (herein called "lessor") and
BRIGHTWARE, INC., A DELAWARE CORPORATION (herein called "Lessee").
2. PREMISES. Lessor does hereby lease to Lessee and Lessee hereby leases from
Lessor that certain office building (herein called "Premises") indicated on
Exhibit "A" attached hereto and by reference made a part hereof, said Premises
being agreed, for the purpose of this Lease, to have an area of approximately
30,488 RENTABLE SQUARE FEET and being situated at that certain Building known as
1401 LOS GAMOS, SAN ▇▇▇▇▇▇. The entire building at 1401 Los Gamos shall be known
as THE PREMISES.
Said Lease is subject to the terms, covenants and conditions herein set
forth and the Lessee covenants as a material part of the consideration for this
Lease to keep and perform each and all of said terms, covenants and conditions
by it to be kept and performed and that this Lease is made upon the condition of
said performance.
3. TERM. The term of this Lease shall be for 120 months commencing on
SEPTEMBER 1, 2000 and ending AUGUST 31, 2010.
4. POSSESSION.
a. If the Lessor, for any reason whatsoever, cannot deliver possession
of the said Premises to the Lessee at the commencement of the term hereof, this
Lease shall not be void or voidable, nor shall Lessor be liable to Lessee for
any loss or damage resulting therefrom, and the expiration date of the above
term shall be correspondingly extended, but in that event, all rent shall be
abated during the period between the commencement of said term and the time when
Lessor delivers possession. Notwithstanding the above, in the event Lessor is
unable to deliver possession of the Premises within ninety (90) days from the
commencement date, Lessee shall be granted one (1) day of free rent for every
one day of delay in possession starting ninety (90) days from the commencement
date, to be granted at the beginning of the term. If Lessor is unable to deliver
possession of the premises within one hundred twenty (120) days from Lease
Commencement, Lessee may terminate this Lease by giving written notice to
Lessor.
b. In the event that Lessor shall permit Lessee to occupy the Premises
prior to the commencement date of the term, such occupancy shall be subject to
all the provisions of this Lease. Said early possession shall not advance the
termination date hereinabove provided.
5. HOLDING OVER. Any holding over after the expiration of the said term, with
or without the express consent of Lessor, shall be construed as a tenancy from
month to month, and shall be on the terms and conditions herein specified, so
far as applicable. Such holding over shall not constitute an extension of this
Lease. During such holding over, Lessee shall pay rent at 125% of the amount
which would apply had the term been extended pursuant to the terms hereunder,
and either party shall provide the other with written notice at least one month
in advance of the date of termination of such monthly tenancy of his intention
to terminate such tenancy.
6. RENT. Lessee agrees to pay to Lessor as rental, without prior notice or
demand, the sum of $70,122.40 in advance, on or before the first day of each and
every successive calendar month thereafter during the term hereof, except that
the first month's rent shall be paid upon the execution hereof. Rent for any
period during the term hereof which is for less than one (1) month shall be a
prorated portion of the monthly installment herein, based upon a thirty (30) day
month. Said rental shall be legal tender at the time of payment at the Office of
the Building, or to such other person or at such other place as Lessor may from
time to time designate in writing.
a. RENT ESCALATIONS
as follows:
Lease Year Rate Per R.S.F. Monthly Rent
---------- --------------- ------------
Year 1 $2.30 $70,122.40
Year 2 $2.37 $72,256.56
Year 3 $2.44 $74,390.72
Year 4 $2.51 $76,524.88
Year 5 $2.59 $78,963.92
Year 6 $2.67 $81,402.96
Year 7 $2.75 $83,842.00
Year 8 $2.83 $86,281.04
Year 9 $2.91 $88,720.08
Year 10 $3.00 $91,464.00
7. SECURITY DEPOSIT. Lessee has deposited with Lessor the sum of $140,244.00.
Said sum shall be held by Lessor as security for the faithful performance by
Lessee of all the terms, covenants, and conditions of this Lease to be kept and
performed by Lessee during the term hereof. If Lessee defaults with respect to
any provision of this Lease, including, but not limited to the payment of rent,
Lessor 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, or for the payment of any amount which Lessor may spend or become
obligated to spend by reason of Lessee" default, to compensate Lessor for any
other loss or damage which Lessor may suffer by reason of Lessee" default. If
any portion of said deposit is so used or applied, Lessee shall within five (5)
days after written demand therefor, deposit cash with Lessor in an amount
sufficient to restore the security deposit to its original amount and Lessee"
failure to do so shall be a material breach of this Lease. Lessor shall not be
required to keep this security deposit separate from its general funds, and
Lessee shall not be entitled to interest on such deposit. If Lessee shall fully
and faithfully perform every provision of this Lease to be performed by it, the
security deposit or any balance thereof shall be returned to Lessee (or, at
Lessee's initial public offering, Lessor will refund Seventy thousand One
Hundred Twenty-two and 00/100 dollars ($70,122.00), (one-half (1/2)( of the
security deposit).
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8. OPERATING EXPENSE ADJUSTMENTS. For the purpose of this Article, the
following terms are defined as follows:
Base Year: The calendar year 2001.
Comparison Year: Each calendar year of the term after the Base Year.
Direct Expenses: All direct costs of operation and maintenance, as determined
by standard accounting practices, and shall include the
following costs by way of illustration, but not be limited to:
real property taxes and assessments; insurance premiums;
janitorial services; labor; costs incurred in the management
of the Building, if any; air-conditioning and heating;
elevator maintenance; supplies; materials; equipment; and
tools; including maintenance, costs, and upkeep of all parking
and common areas. Notwithstanding the above, management fees
shall not exceed five percent (5%) of the gross rents.
("Direct Expenses" shall not include depreciation on the
Building of which the Premises are a part or equipment
therein, loan payments, executive salaries or real estate
brokers' commissions.)
If the Direct Expenses paid or incurred by the Lessor for the Comparison
Year on account of the operation or maintenance of the Building of which the
Premises are a part are in excess of the Direct Expenses paid or incurred for
the Base Year, then the Lessee shall pay (100%) of the increase. Lessor shall
endeavor to give to Lessee on or before the first day of March of each year
following the respective Comparison Year a statement of the increase in rent
payable by Lessee hereunder, but failure by Lessor to give such statement by
said date shall not constitute a waiver by Lessor of its rights to require an
increase in rent. Upon receipt of the statement of the first Comparison Year,
Lessee shall pay in full the total amount of increases due for the first
Comparison Year, and in addition for the then current year, the amount of any
such increase shall be used as an estimate for said current year and this amount
shall be divided into twelve (12) equal monthly installments and Lessee shall
pay to Lessor, concurrently with the regular monthly rent payment next due
following the receipt of such statement, an amount equal to one (1) monthly
installment multiplied by the number of months from January in the calendar year
in which said statement is submitted to the month of such payment, both months
inclusive. Subsequent installments shall be payable concurrently with the
regular monthly rent payments for the balance of that calendar year and shall
continue until the next Comparison Year's statement is rendered. If the next or
any succeeding Comparison Year results in a greater increase in Direct Expenses,
then upon receipt of a statement from Lessor, Lessee shall pay a lump sum equal
to such total increase in Direct Expenses over the Base Year, less the total of
the monthly installments to be paid for the next year, following said Comparison
Year, shall be adjusted to reflect such increase. If in any Comparison Year the
Lessee's share of Direct Expenses be less than the preceding year, then upon
receipt of Lessor's statement, any overpayment made by Lessee on the monthly
installment basis provided above shall be credited towards the next monthly rent
falling due and the estimated monthly installments of Direct Expenses to be paid
shall be adjusted to reflect such lower Direct Expenses for the most recent
Comparison Year.
Even though the term has expired and Lessee has vacated the Premises, when
the final determination is made of Lessee's share of Direct Expenses for the
year in which this Lease terminates, Lessee shall immediately pay any increase
due over the estimated expenses paid and conversely any overpayment made in the
event said expenses decrease shall be immediately rebated by Lessor to Lessee.
Notwithstanding anything contained in this Article, the rental payable by
Lessee shall in no event be less than the rent specified in Article 6
herinabove.
9. USE. Lessee 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 Lessor.
Lessee 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 upon the Building or any of its
contents, or cause cancellation of any insurance policy covering said Building
or any part thereof or any of its contents. Lessee shall not allow the Premises
to be used for any improper, immoral, unlawful or objectionable purpose, nor
shall Lessee cause, maintain or permit any nuisance in, on or about the
Premises. Lessee shall not commit or suffer to be committed any waste in or upon
the Premises.
10. COMPLIANCE WITH LAW. Lessee 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 rule or regulation now in force or which may
hereafter be enacted or promulgated. Lessee shall, at its sole cost and expense,
promptly comply with all laws, statutes, ordinances and governmental rules,
regulations or similar bodies 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 Lessee's improvements or acts. The
judgment of any court of competent jurisdiction or the admission of Lessee in
any action against Lessee in any action against Lessee, whether Lessor be a
party thereto or not, that Lessee has violated any law, statute, ordinance or
governmental rule, regulation or requirement, shall be conclusive of that fact
as between the Lessor and Lessee.
11. ALERATIONS AND ADDITIONS. Lessee shall not make or suffer to be made any
alterations, additions or improvements to or of the Premises or any part thereof
without the written consent of Lessor first had and obtained and any
alterations, additions or improvements to or if said Premises, including, but
not limited to, wall covering, paneling and built-in cabinet work, but expecting
movable furniture and trade fixtures, shall on the expiration of the term become
a part of the realty and belong to the Lessor and shall be surrendered with the
Premises. In the event Lessor consents to the making of any alterations,
additions or improvements to the Premises by Lessee, the same shall be made by
Lessee at Lessee's sole cost and expense; and any contractor or person selected
by Lessee to make the same must first be approved of in writing by the Lessor.
Upon the expiration or sooner termination of the term hereof, Lessee shall, upon
written demand by Lessor, given at least thirty (30) days prior to the end of
the term, at Lessee's sole cost and expense, forthwith and with all due
diligence remove any alterations, additions or improvements, and Lessee shall,
forthwith and with all due diligence at its sole cost and expense, repair any
damage to the Premises caused by such removal.
12. REPAIRS.
a. LESSEE OBLIGATIONS. By taking possession of the Premises, Lessee
shall be deemed to have accepted the Premises as being in good, sanitary order,
condition and repair. Lessee shall upon the expiration or sooner termination of
this Lease hereof surrender the Premises to the Lessor in good condition,
ordinary wear and tear and damage from causes beyond the reasonable control of
Lessee expected. Except as specifically provided in this Lease, Lessor 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 Lessor
has made no representations to Lessee respecting the condition of the Premises
or the Building except as specifically herein set forth.
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▇. ▇▇▇▇▇▇ OBLIGATIONS: Notwithstanding the provisions of Article 12.a.
hereinabove, Lessor shall repair and maintain the structural portions of the
Building, including the basic plumbing, air conditioning, heating, and
electrical systems, installed or furnished by Lessor, unless such maintenance
and repairs are caused in part or in whole by the act, neglect, fault or
omission of any duty by the Lessee, its agents, servants, employees or invitees,
in which case Lessee shall pay to Lessor the reasonable cost of such maintenance
and repairs. Lessor shall not be liable for any failure to make any such repairs
or to perform any maintenance unless such failure shall persist for an
unreasonable time after written notice of the need of such repairs or
maintenance is given to Lessor by Lessee. Except as provided in Article 23
hereof, there shall be no abatement of rent and no liability of Lessor by reason
of any injury to or interference with Lessee's business arising from the making
of any repairs, alterations or improvements in or to any portion of the Building
or the Premises or in or to fixtures, appurtenances and equipment therein.
Lessee waives the right to make repairs at Lessor's expense under any law,
statute or ordinance now or hereafter in effect. Notwithstanding the above, in
the event such maintenance and repairs are caused in part by the act, neglect,
fault or omissions of any duty by the Lessee, Lessee shall be responsible for
that portion attributed to Tenant's acts, neglect, fault or omissions as
reasonably determined by Lessor's licensed contractor.
13. LIENS. Lessee shall keep the Premises and the property in which the
Premises are situated free from any liens arising out of any work performed,
materials furnished or obligations incurred by Lessee. Lessor may require, at
Lessor's sole option, that Lessee shall provide to Lessor, at Lessee's sole cost
and expense, a lien and completion bond in an amount equal to one and one-half
(1 1/2) times any and all estimated cost of any improvements, additions, or
alterations in the Premises, to insure Lessor against any liability for
mechanics' and materialmen's liens and to insure completion of the work.
14. ASSIGNMENT AND SUBLETTING. Lessee shall not either voluntarily or by
operation of law assign, transfer, mortgage, pledge, hypothecate or encumber
this Lease or any interest therein, and shall not sublet the said Premises or
any part thereof, or any right or privilege appurtenant thereto, or suffer any
other person (the employees, agents, servants and invitees of Lessee excepted)
to occupy or use the said Premises, or any portion thereof, without the written
consent of Lessor first had and obtained, which consent shall not be
unreasonably withheld, and a consent to one assignment, subletting, occupation
or use by another person shall not be deemed to be a consent to any subsequent
assignment, subletting, occupation or use by another person. Any such assignment
or subletting without such consent shall be void, and shall, at the option of
the Lessor, constitute a default under this Lease.
15. HOLD HARMLESS. Lessee shall indemnify and hold harmless Lessor against and
from any and all claims arising from Lessee's use of Premises for the conduct of
its business or from any activity, work, or other thing done, permitted or
suffered by the Lessee in or about the Building, and shall further indemnify and
hold harmless Lessor against and from any and all claims arising from any breach
or default in the performance of any obligation on Lessee's part to be performed
under the terms of this Lease, or arising from any act or negligence of the
Lessee, or any officer, agent, employee, guest or invitee of Lessee, and from
all and against all cost, reasonable attorney's fees, expenses and liabilities
incurred in or about any such claim or any action or proceeding brought thereon,
and, in any case, should action or proceeding be brought against Lessor by
reason of any such claim, Lessee upon notice from Lessor shall defend the same
at Lessee's expense by counsel reasonably satisfactory to Lessor. Lessee as a
material part of the consideration to Lessor hereby assumes all risk of damage
to property or injury to persons, in, upon or about the Premises, from any cause
other than negligence by Lessor, Lessor's agents or employees, and Lessee hereby
waives all claims in respect thereof against Lessor.
Lessor or its agents shall not be liable for any damage to property
entrusted to employees of the Building, nor for loss or damage to any property
by theft or otherwise, nor for any injury to or damage to persons or property
resulting from fire, explosion, falling plaster, steam, gas, electricity, water
or rain which may leak from any part of the Building or from the pipes,
appliances or plumbing works therein or from the roof, street or subsurface or
from any other place resulting from dampness or any other cause whatsoever,
unless caused by or due to the negligence of Lessor, its agents, servants or
employees. Lessor or its agents shall not be liable for interference with the
light or other incorporeal hereditament, loss of business by Lessee. Lessee
shall give prompt notice to Lessor in case of fire or accidents in the Premises
or in the Building or of defects therein or in the fixtures or equipment.
16. SUBROGATION. As long as their respective insurers so permit, Lessor and
Lessee 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.
17. LIABILITY INSURANCE. Lessee shall, at Lessee's expense, obtain and keep in
force during the term of this Lease a policy of Combined Single Limit Bodily
Injury and Property Damage Insurance insuring Lessor and Lessee against any
liability arising out of the ownership, use, occupancy or maintenance of the
Premises and all areas appurtenant thereto. Such insurance shall be in an amount
not less than $1,000,000 per occurrence. The limit of said insurance shall not,
however, limit the liability of the Lessee hereunder. Lessee may carry said
insurance under a blanket policy, providing, however, said insurance by Lessee
shall have a Lessor's protective liability endorsement attached thereto. If
Lessee shall fail to procure and maintain said insurance, Lessor may but shall
not be required to, procure and maintain same, but at the expense of Lessee.
Insurance required hereunder, shall be in companies rated A+9 or better in
"Best's Insurance Guide".
18. EVIDENCE OF INSURANCE. Lessee shall deliver to Lessor prior to occupancy
of the Premises copies of policies of liability insurance required herein or
certificates evidencing the existence and amounts of such insurance with loss
payable clauses satisfactory to Lessor. No policy shall be cancelable or subject
to reduction of coverage except after ten (10) days' prior written notice to
Lessor.
19. SERVICES AND UTILITIES. Provided that Lessee is not in default hereunder,
Lessor agrees to furnish five (5) days per week of Janitorial Service to the
Premises. Lessor shall also maintain and keep lighted the common stairs, common
entries and toilet rooms in the Building of which the Premises are a part.
Lessor shall not be liable for, and Lessee shall not be entitled to, any
reduction of rental by reason of Lessor's failure to furnish any of the
foregoing when such failure is caused by accident, breakage, repairs, strikes,
lockouts or other labor disturbances or labor disputes of any character, or by
any other cause, similar or dissimilar, beyond the reasonable control of Lessor.
Except where caused by negligence of Lessor, Lessor shall not be liable under
any circumstances for a loss of or injury to property, however, occurring,
through or in connection with or incidental to failure to furnish any of the
foregoing. Whenever heat generating machines or equipment are used in the
Premises which affect the temperature otherwise maintained by the air
conditioning system, after written notice to Lessee, Lessor reserves the right
to install supplementary air conditioning units in the Premises and the
reasonable cost thereof, including the reasonable cost of installation, and the
reasonable cost of operation and maintenance thereof shall be paid by Lessee to
Lessor upon demand by Lessor.
LESSEE SHALL BE RESPONSIBLE TO PAY FOR ALL UTILITIES PROVIDED TO THE
PREMISES INCLUDING ELECTRICITY, GAS, WATER, AND SEWER CHARGES.
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20. PROPERTY TAXES. Lessee shall pay, or cause to be paid, before delinquency,
any and all taxes levied or assessed and which become payable during the term
hereof upon all Lessee's leasehold improvements, equipment, furniture, fixtures
and personal property located in the Premises; except that which has been paid
for by Lessor, and is the standard of the Building. In the event any or all of
the Lessee's leasehold improvements except for Lessee's initial improvements,
equipment, furniture, fixtures and personal property shall be assessed and taxed
with the Building, Lessee shall pay to Lessor its share of such taxes within ten
(10) days after delivery to Lessee by Lessor of a statement in writing setting
forth the amount of such taxes applicable to Lessee's property.
21. RULES AND REGULATIONS. Lessee shall faithfully observe and comply with the
rules and regulations that Lessor shall from time to time promulgate. Lessor
reserves the right from time to time to make all reasonable modifications to
said rules. The additions and modifications to those rules shall be binding upon
Lessee upon delivery of a copy of them to Lessee.
22. ENTRY BY LESSOR. Lessor or it's authorized agents reserves and shall at
any and all times have the right to enter the Premises, inspect the same, supply
janitorial service and any other service to be provided by Lessor to Lessee
hereunder, to submit said Premises to inspection by prospective purchasers or,
in the case of prospective Lessees, only during the last nine (9) months of the
lease, 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 Lessor 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 to the Premises shall not be blocked thereby, and
further providing that the business of the Lessee shall not be interfered with
unreasonably. Lessee hereby waives any claim for damages or for any injury or
inconvenience to or interference with Lessee's business, any loss of occupancy
or quiet enjoyment of the Premises, and any other loss occasioned thereby. For
each of the aforesaid purposes, Lessor and/or its authorized agents shall at all
times have and retain a key with which to unlock all of the doors in, upon and
about the Premises, excluding Lessee's vaults, safes and files, and Lessor
and/or its authorized agents shall have the right to use any and all means which
Lessor may deem proper to open said doors in any emergency, in order to obtain
entry to the Premises without liability to Lessee except for any failure to
exercise due care for Lessee's property. Any entry to the Premises obtained by
Lessor and/or its authorized agents by any of said means, or otherwise, shall
not under any circumstances be construed or deemed to be a forcible entry into,
or a detainer of, the Premises, or an eviction of Lessee from the Premises or
any portion thereof. Notwithstanding the above, Lessor shall notify Lessee
twenty-four (24) hours prior to any entry of the Premises by Lessor, excepting
in cases of emergency.
23. RECONSTRUCTION. In the event the Premises or the Building of which the
Premises are a part are damaged by fire or other perils covered by extended
coverage insurance, Lessor agrees to forthwith repair the same; and this Lease
shall remain in full force and effect, except that Lessee shall be entitled to a
proportionate reduction of the rent while such repairs are being made, such
proportionate reduction to be based upon the extent to which the making of such
repairs shall materially interfere with the business carried on by the Lessee in
the Premises. If the damage is due to the intentional misconduct of Lessee or
its employees, there shall be no abatement of rent. Notwithstanding anything to
the contrary above, in the event Landlord is unable to collect under its "Loss
of Rent" insurance provision, there shall be no abatement of Lessee's rent.
In the event the Premises or the Building of which the Premises are a part
are damaged as a result of any cause other than the perils covered by fire and
extended coverage insurance, then Lessor shall forthwith repair the same,
provided the extent of the destruction be less than ten (10%) percent of the
then full replacement cost of the Premises or the Building of which the Premises
are a part. In the event the destruction of the Premises or the Building is to
an extent greater than ten (10%) percent of the full replacement cost, then
Lessor shall have the option; (1) to repair or restore such damage, this Lease
continuing in full force and effect, but the rent to be proportionately reduced
as hereinabove in this Article provided; or (2) give notice to Lessee at any
time within sixty (60) days after such damage terminating this Lease as of the
date specified in such notice, which date shall be no less than thirty (30) and
no more than sixty (60) days after the giving of such notice. In the event of
giving such notice, this Lease shall expire and all interest of the Lessee in
the Premises shall terminate on the date so specified in such notice and the
Rent, reduced by a proportionate amount, based upon the extent, if any, to which
such damage materially interfered with the business carried on by the Lessee in
the Premises, shall be paid up to the time of such termination.
Notwithstanding anything to the contrary contained in this Article, Lessor
shall not have any obligation whatsoever to repair, reconstruct or restore the
Premises when the damage resulting from any casualty covered under this Article
occurs during the last twelve (12) months of the term of this Lease or any
extension thereof.
Lessor shall not be required to repair any injury or damage by fire or
other cause, or to make any repairs or replacements of any panels, decoration,
office fixtures, railings, floor covering, partitions, or any other property
installed in the Premises by Lessee.
The Lessee shall not be entitled to any compensation or damages from
Lessor for loss of the use of the whole or any part of the premises. Lessee's
personal property or any inconvenience or annoyance occasioned by such damage,
repair, reconstruction or restoration.
Notwithstanding the above, in the event of damage to the Premises or the
Building, which cannot be repaired within three hundred sixty-five (365) days
from the date of such damage, Lessee may terminate this Lease with thirty (30)
days written notice.
24. DEFAULT. The occurrence of any one or more of the following events shall
constitute a default and breach of this Lease by Lessee.
a. The vacating or abandonment of the Premises by Lessee.
b. The failure by Lessee to make any payment of rent or any other
payment required to be made by Lessee hereunder, as and when due, where such
failure shall continue for a period of three (3) days after written notice
thereof by Lessor to Lessee.
c. The failure by Lessee to observe or perform any of the covenants,
conditions or provisions of this Lease to be observed or performed by the
Lessee, other than described in Article 24.b. above, where such failure shall
continue for a period of thirty (30) days after written notice thereof by Lessor
to Lessee; provided, however, that if the nature of Lessee's default is such
that more than thirty (30) days are reasonably required for its cure, then
Lessee shall not be deemed to be in default if Lessee commences such cure within
said thirty (30) day period and thereafter diligently prosecutes such cure to
completion.
d. The making by Lessee of any general assignment or general
arrangement for the benefit of creditors; or the filing by or against Lessee of
a petition to have Lessee adjudged as bankrupt, or a petition or reorganization
or arrangement under any law relating to bankruptcy (unless, in the case of a
petition filed against Lessee, the same is dismissed within sixty (60) days; or
the appointment of a trustee or a receiver to take possession of substantially
all of Lessee's assets located at the Premises or of Lessee's interest in this
Lease, where possession is not restored to Lessee within thirty (30) days; or
the attachment, execution or other judicial seizure of substantially all of
Lessee's assets located at the Premises or of Lessee's interests in this Lease,
where such seizure is not discharged in thirty (30) days.
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25. REMEDIES IN DEFAULT. In the event of any such material default or breach
by Lessee, Lessor may at any time thereafter, with or without notice or demand
and without limiting Lessor in the exercise of a right or remedy which Lessor
may have by reason of such default or breach:
a. Terminate Lessee's right to possession of the Premises by any lawful
means, in which case this Lease shall terminate and Lessee shall immediately
surrender possession of the premises to Lessor. In such event Lessor shall be
entitled to recover from Lessee all damages incurred by necessary renovation and
alteration of the Premises, reasonable attorney's fees, any real estate
commission actually paid; the worth at the time of award by the court having
jurisdiction thereof of the amount by which the unpaid rent for the balance of
the term after the time of such award exceeds the amount of such rental loss for
the same period that Lessee proves could be reasonably avoided; that portion of
the leasing commission paid by Lessor and applicable to the unexpired term of
this Lease. Unpaid installments of rent or other sums shall bear interest from
the date due at the rate of ten (10%) percent per annum. In the event Lessee
shall have abandoned the Premises, Lessor shall have the option of (a) taking
possession of the Premises and recovering from Lessee the amount specified in
this paragraph, or (b) proceeding under the provisions of the following Article
25.b.
b. Maintain Lessee's right to possession, in which case this Lease
shall continue in effect whether or not Lessee shall have abandoned the
Premises. In such event Lessor shall be entitled to enforce all of Lessor's
right and remedies under this Lease, including the right to recover the rent as
it becomes due hereunder, subject, however, to Lessor's obligation at law to
mitigate damages.
c. Pursue any other remedy now or hereafter available to Lessor under
the laws or judicial decision of the State in which the Premises are located.
26. EMINENT DOMAIN. If more than twenty-five (25%) percent 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 Lessor 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 Lessee
shall have no claim against Lessor for the value of any unexpired term of this
Lease. However, Lessee shall have the right to separately pursue a claim against
such public or quasi-public entity for its costs of relocation and personal
property. If either less than or more than twenty-five (25%) percent 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, Lessor shall
have the right at its option to terminate this Lease and shall be entitled to
the entire award as above provided.
27. OFFSET STATEMENT. Lessee shall at any time and from time to time upon not
less than ten (10) days prior written notice from Lessor execute, acknowledge
and deliver to Lessor a statement in writing, (a) certifying that this Lease is
unmodified and in full force and effect (or, if modified, stating the nature of
such modification and certifying that this Lease as so modified, is in full
force and effect), and the date to which the rental and other charges are paid
in advance, if any, and (b) acknowledge that there are not, to Lessee's
knowledge, any incurred defaults on the part of the Lessor hereunder, or
specifying such defaults if any are claimed. Any such statement may be relied
upon by any prospective purchaser or encumbrance of all or any portion of the
real property of which the Premises are a part.
28. PARKING. Lessee shall have the exclusive right to use the parking
facilities of the Building at no additional cost during the term of this Lease
or any extension thereto.
29. AUTHORITY OF PARTIES.
a. Corporate Authority. If Lessee is a corporation, each individual
executing this Lease on behalf of said corporation represents and warrants that
he is duly authorized to execute and deliver this Lease on behalf of said
corporation, in accordance with a duly adopted resolution of the board of
directors of said corporation or in accordance with the by-laws of said
corporation, and that this Lease is binding upon said corporation in accordance
with its terms. Lessee shall deliver to Lessor a Corporate Resolution with a
Corporate Seal authorizing this Lease by January 27, 2000.
30. GENERAL PROVISIONS.
a. Plats and Riders. Clauses, plats and riders, if any, signed by the
Lessor and the Lessee and endorsed on or affixed to this Lease are a part
hereof.
b. Waiver. The waiver by Lessor 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
Lessor shall not be deemed to be a waiver of any preceding breach by Lessee of
any term, covenant or condition of this Lease, other than the failure of the
Lessee to pay the particular rental so accepted, regardless of Lessor's
knowledge of such preceding breach at the time of the acceptance of such rent.
c. Notices. All notices and demands, which may or are to be required or
permitted to be given by either party to the other hereunder, shall be in
writing. All notices and demands by the Lessor to the Lessee shall be sent by
United States Mail, postage prepaid, addressed to the lessee at the Premises, or
to such other places as Lessee may from time to time designate in a notice to
the Lessor. All notices and demands by the Lessee to the lessor shall be sent by
United States Mail, postage prepaid, addressed to the Lessor at the Office of
the Building, or to such other person or place as the Lessor may from time to
time designate in a notice to the Lessee.
d. Joint Obligation. If there be more than one Lessee the obligations
hereunder imposed upon Lessees shall be joint and several.
e. Marginal Headings. The marginal headings and Article 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 hereof.
f. Time. Time is of the essence of this Lease and each and all of its
provisions in which performance is a factor.
g. 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 assigns of the parties hereto.
h. Recordation. Neither Lessor nor Lessee shall record this Lease or a
short form memorandum hereof without the prior written consent of the other
party.
i. Quiet Possession. Upon lessee paying the rent reserved hereunder and
observing and performing all of the covenants, conditions and provisions on
Lessee's part to be observed and performed hereunder, Lessee shall have quiet
possession of the Premises for the entire term hereof, subject to all the
provisions of this Lease.
Page 5 of 8
j. Late Charges. Lessee hereby acknowledges that late payment by Lessee
to Lessor or rent or other sums due hereunder will cause Lessor to incur costs
not contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited to, processing
and accounting charges, and late charges, which may be imposed upon Lessor by
terms of any mortgage or trust deed covering the Premises. Accordingly, if any
installment of rent or a sum due from Lessee shall not be received by Lessor or
Lessor's designee within ten (10) days after said amount is due, then Lessee
shall pay to Lessor a late charge equal to ten (10%) percent of such overdue
amount. The parties hereby agree that such late charges represent a fair and
reasonable estimate of the cost that Lessor will incur by reason of the late
payment by Lessee. Acceptance of such late charges by the Lessor shall in no
event constitute a waiver of Lessee's default with respect to such overdue
amount, nor prevent Lessor from exercising any of the other rights and remedies
granted hereunder.
k. Guaranty. As material condition of this Lease and for valuable
consideration, Lessee's performance of the conditions embodied in this Lease is
hereby guaranteed by the undersigned.
l. 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 fully executed by both parties hereto.
m. Inability to Perform. This Leas and the obligations of the Lessee
hereunder shall not be affected or impaired because the Lessor is unable to
fulfill any of its obligations hereunder or is delayed in doing so, if such
inability or delay is caused by reason or strike, labor troubles, acts of God,
or any other cause beyond the reasonable control of the Lessor.
n. Attorneys' Fees. In the event of any action or proceeding brought by
either party against the other under this Lease the prevailing party shall be
entitled to recover all costs and expenses including the fees or its attorneys
in such action or proceeding in such amount as the court may adjudge reasonable
as attorneys' fees.
o. Sale of Premises by Lessor. In the event of any sale of the
Building, Lessor shall be and is hereby entirely freed and relieved of all
liability under any and all of its covenants and obligations contained in or
derived from this Lease arising out of any act, occurrence or omission occurring
after the consummation of such sale; and the purchaser, at such sale or any
subsequent sale of the Premises shall be deemed, without any further agreement
between the parties or their successors in interest or between the parties and
any such purchaser to have assumed and agreed to carry out any and all of the
covenants and obligations of the Lessor under this lease.
p. Subordination, Attornment. Upon request of the Lessor, Lessee will
in writing subordinate its rights hereunder to the lien of any first mortgage,
or first deed of trust to any bank, insurance company or other lending
institution, now or hereafter in force against the land and Building of which
the Premises are a part, and upon any buildings hereafter placed upon the land
of which the Premises are a part, and to all advances made or hereafter to be
made upon the security thereof.
In the event any proceedings are brought for foreclosure, or in the
event of the exercise of power of sale under any mortgage or deed of trust made
by the Lessor covering the Premises, the lessee shall attorn to the purchaser
upon any such foreclosure or sale and recognize such purchaser as the Lessor
under this Lease.
q. Name. Lessee shall not use the name of the Building or of the
development in which the Building is situated for any purpose other than as an
address of the business to be conducted by the Lessee in the Premises.
r. Separability. Any provision of this Lease which shall prove to be
invalid, void or illegal shall in no way effect, impair or invalidate any other
provision hereof and such other provision shall remain in full force and effect.
s. 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.
t. Choice of Law. This Lease shall be governed by the laws of the State
of California.
u. Signs and Auctions. Lessee shall not place any sign upon the
Premises or Building or conduct any auction thereon without Lessor's prior
written consent.
31. BROKERS. Lessee warrants that it has had no dealings with any real estate
broker or agents in connection with the negotiation of this Lease excepting only
ORION PARTNERS LTD. AND ▇▇▇▇▇▇▇▇ INVESTMENTS and it knows of no other real
estate broker or agents in connection with this Lease.
32. OPTION TO EXTEND.
a. General. Lessee has two (2) options to extend the term on all the
provisions contained in this lease, except for rent, for a FIVE (5)-year period
each (the "Extended Term") following expiration of the initial term by giving
notice of exercise of the option ("Option Notice") to Lessor at least nine
months and not earlier than twelve (12) months before the expiration of the
initial or the first Extended Term; provided that, if Lessee is in default as of
the date of giving the option notice, the option notice shall be ineffective, or
if Lessee is in default as of the date the extended term is to commence, the
extended term shall not commence and this lease shall expire at the end of the
initial term.
b. Rent. The rent for the extended terms shall be the fair market
rental value of the Premises as of the date of commencement of the extended
term, which fair market rental value shall in no event be less than the rent in
effect during the last year of the previous term and shall be determined in
accordance with paragraph c, below.
c. Determination of Fair Market Rent.
i. The parties shall endeavor by good faith negotiations to agree
upon the fair market rental within thirty (30) days after Landlord's receipt of
the Option Notice.
ii. In the event the Lessor or Lessee cannot agree on the rent
within thirty (30) days after Landlord's receipt of the Option Notice, then
within 15 days thereafter each party, at its own cost and by giving notice to
the other party, shall appoint a real estate broker within at least five (5)
years' full time commercial leasing experience in the Marin County Area, to
appraise and determine the fair market rental value of the Premises ("fair
market rent"). If, in the time provided, only one party shall notice appointment
of a broker, the single broker appointed shall determine the fair market rent.
If two brokers are appointed by the parties, the two brokers shall
independently, and without consultation between them, prepare an appraisal of
the fair market rent within 15 days. Each broker shall seal its respective
appraisal after completion. After both appraisals are completed, the resulting
estimates of the fair market rent shall be opened and compared. If the value of
the appraisals differ by no more than ten (10%) of the value of the higher
appraisal, then the fair market rent shall be the average of the two appraisals.
Page 6 of 8
iii. If the values of the appraisals differ by more than ten
percent (10%) of the value of the higher appraisal, the two brokers shall
designate a third broker meeting the qualifications set forth in subparagraph
32.3.ii, above. If the two brokers have not agreed on a third broker after ten
(10) days, either Lessor or Tenant, by giving ten (10) days' notice to the other
party, may apply to the then Presiding Judge of the Superior Court for the
country in which the building is located for the selection of a third broker who
meets the qualifications set forth in subparagraph 32.c.ii (ii) above. The third
broker, however selected, shall be a person who has not previously acted in any
capacity for either party. The third broker shall make an appraisal of the fair
market rent within ten (10) days after selection and without consultation with
the first two brokers. If, however, the low appraisal and/or the high appraisal
are/is more than 15% lower and/or higher than the middle appraisal, the low
appraisal and/or the high appraisal shall be disregarded. If one appraisal is
disregarded, the remaining two appraisals shall be added together and their
total divided by two, and the resulting quotient shall be the fair market rent.
If both the low appraisal and the high appraisal are disregarded as provided in
this subparagraph, the middle appraisal shall be the fair market rent.
▇. ▇▇▇▇▇. If the determination of the rent is delayed beyond the
commencement of the extended term, Lessee shall pay rent based on the average of
the appraisals received under subparagraphs c (i) and (ii), above, as of the
extended term commencement until the first day of the month following the
determination of the rent. On the first day of the month following the
determination of the rent, there shall be an adjustment made to the rent payment
then due for the difference between the amount of rent Lessee has paid to Lessor
since the extended term commencement and the amount that Lessee would have paid
if the rent as adjusted pursuant to this subparagraph had been in effect as of
the extended term commencement.
e. Costs. Each party shall pay the fees and expenses of their own
broker, and 50% of the fees and expenses of the third broker.
f. Criteria. The brokers shall determine the fair market rent using the
"market comparison approach" with the relevant market being that for first class
office space in the immediate area where the Building is located. The brokers
shall use their best efforts to fairly and reasonably appraise and determine the
fair market rental value of the Premises in accordance with the terms of the
lease, and shall not act as advocates for either Lessor Tenant.
g. No Further Extension. Lessee shall have no further option to extend
the term of this Lease.
Signed on JANUARY 18, 2000
-------------------------
at SAN RAFAEL, CALIF.
--------------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Its: LESSOR
-----------------------------------
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
Its: LESSOR
-----------------------------------
[LESSOR]
Signed on 1/25/00
at [ILLEGIBLE], CALIF.
--------------------------------
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Its: CEO
-----------------------------------
By:
-----------------------------------
Its:
-----------------------------------
[LESSEE]
Page 7 of 8
RULES AND REGULATIONS
1. No sign, placard, picture, advertisement, name or notice shall be
inscribed, displayed or printed or affixed on or to any part of the outside or
inside of the Building without the written consent of Lessor first had and
obtained and Lessor shall have the right to remove any such sign, placard,
picture, advertisement, name or notice without notice to and at the expense of
Lessee.
All approved signs or lettering on doors shall be printed, painted,
affixed or inscribed at the expense of Lessee by a person approved of by Lessor.
Lessee shall not place anything or allow anything to be placed near the
glass of any window, door, partition or wall which may appear unsightly from
outside the Premises; provided, however, that Lessor may furnish and install a
Building standard window covering at all exterior windows. Lessee shall not
without prior written consent of Lessor cause or otherwise sunscreen any window.
2. The sidewalks, halls, passages, exits, entrances, elevators and stairways
shall not be obstructed by any of the Lessees or used by them for any purpose
other than for ingress and egress from their respective Premises.
3. Lessee shall not alter any lock or install any new or additional locks or
any bolts on any doors or windows of the Premises.
4. The toilet rooms, urinals, wash bowls and other apparatus shall not be
used for any purpose other than that for which they were constructed and no
foreign substance of any kind whatsoever shall be thrown therein and the expense
of any breakage, stoppage, or damage resulting from the violation of this rule
shall be borne by the Lessee who, or whose employees or invitees shall have
caused it.
5. Lessee shall not overload the floor of the Premises or in any way deface
the Premises or any part thereof.
6. Lessor shall have the right to prescribe the weight, size and position of
all safes and other heavy equipment brought into the Building and also the times
and manner of moving the same in and out of the Building. Safes or other heavy
objects shall, if considered necessary by Lessor, stand on supports of such
thickness as is necessary to properly distribute the weight. lessor will not be
responsible for loss of or damage to any such safe or property from any cause
and all damage done to the Building by moving or maintaining any such safe or
other property shall be repaired at the expense of the Lessee.
7. Lessee shall not use, keep or permit to be used or kept any foul or
noxious gas or substance in the Premises, or permit or suffer the Premises to be
occupied or used in a manner offensive or objectionable to the Lessor or other
occupants of the Building by reason of noise, odors, electromagnetic radiation,
and/or vibrations, or interfere in any way with other Lessees or those having
business therein, nor shall any animals, excepting registered service animals,
or birds be brought in or kept in or about the Premises or the Building.
8. No cooking appliances shall be used or permitted by any Lessee on the
Premises, excepting only coffee makers and microwave ovens, nor shall the
Premises be used for the storage of merchandise, for washing clothes, for
lodging, or for any improper, objectionable or immoral purpose.
9. Lessee shall not use or keep in the Premises of the Building any kerosene,
gasoline, or inflammable or combustible fluid or material, or use any method of
heating or air conditioning other than that supplied by Lessor.
10. Lessor will direct electricians as to where and how telephone and
telegraph wires are to be introduced. No boring or cutting for wires will be
allowed without the consent of the Lessor. The location of telephones, call
boxes and other office equipment affixed to the premises shall be subject to the
approval of Lessor.
11. The Lessor shall in no case be liable for damages for any error with
regard to the admission to or exclusion from the Building of any person. In case
of invasion, mob, riot, public excitement, or other commotion, the Lessor
reserves the right to prevent access to the Building during the continuance of
the same by closing of the doors or otherwise, for the safety of the Lessees and
protection of property in the Building and the Building.
12. Lessor reserves the right to exclude or expel from the Building any person
who, in the judgment of Lessor, is intoxicated or under the influence of liquor
or drugs, or who shall in any manner do any act in violation of any of the rules
and regulations of the Building.
13. No vending machine or machines of any description shall be installed,
maintained or operated upon the Premises other than for the use by Lessee's
employees, without the written consent of the Lessor.
14. Lessor shall have the right, exercisable without notice and without
liability to Lessee, to change the name and street address of the Building of
which the Premises are a part.
15. All entrance doors in the Premises shall be left locked when the Premises
are not in use, and all doors opening to public corridors shall be kept closed
except for normal ingress and egress from the Premises.
Page 8 of 8
ADDENDUM 1
To Lease by and Between ▇▇▇▇▇▇▇ ▇. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ("LESSOR")
and Brightware, Inc. ("LESSEE")
for ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
1. SIGNAGE. Lessee shall be allowed top of building illuminated exterior
signage facing Interstate 101, at no additional rent, subject to all
required governmental approvals. Cost of exterior signage shall be at
Lessee's sole expense.
2. RENTAL CONCESSION. The first (1st) month of the Lease Term shall be
rent-free excepting utilities which shall be paid by the Lessee.
3. TENANT IMPROVEMENTS. Lessor will provide a Tenant Improvement allowance of
$6.00 per square foot ($182,928). At Lessor's Option Landlord will provide
an additional improvement allowance not to exceed $9.00 per square foot.
The Tenant Improvement allowance ("Additional Improvements") shall not
include any costs of procuring or installing in the Premises any trade
fixtures, equipment, furniture, furnishings, telephone equipment, wiring
or cabling or other personal property to be used in the Premises by
Lessee. Lessor shall provide fifty percent (50%) of the allowance upon 50%
completion of the work and fifty percent (50%) upon completion of the work
in accordance with the approved plan, and all required governmental
approvals including certificate of occupancy and monthly, amortized at ten
percent (10%) over the term of the initial lease (ten years). All
improvements to be completed by Lessee with Lessor's prior approval of
plans and contractor. See Construction Rules, Exhibit A attached.
Lessee shall provide a letter of credit in the amount of the additional
improvements, which shall decline annually by one-tenth of the amount per
year.
4. WARRANT. A warrant will be granted to ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ for
22,000 shares of common stock of Brightware, Inc., at $1.75 per share. The
Warrants shall be exercised for a period of two (2) years from the date of
the fully executed Lease for the Premises.
5. BUILDING HOURS/ACCESS. Lessee shall have access and use of the Premises
twenty-four (24) hours per day, three hundred sixty-five (365) days per
year.
6. SATELLITE DISH. Lessee shall have the right at Lessee's cost to install a
satellite dish on the roof, at no additional rent, in a location mutually
acceptable to both Lessee and Lessor. Installation shall be in a
professional manner. Lessee shall obtain any governmental approvals
required for the installation of such dish. Lessee shall pay for any
repairs required from installation or removal of the satellite dish.
7. NON-DISTURBANCE. Lessor shall provide a non-disturbance agreement for
Lessee's lease hold interest in the property in a form acceptable to
Lessor's lender. Lessee shall pay for any reasonable costs associated with
Lessor providing the non-disturbance agreement.
LESSOR: ▇▇▇▇▇▇▇ ▇. AND ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Date: 1/18/2000
------------------------------- -------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Date: 1/27/2000
------------------------------- -------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
LESSEE: BRIGHTWARE INC., A DELAWARE CORPORATION
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Date: 1/25/00
------------------------------- -------------
By:
Its:CEO
Date:
------------------------------- -------------
By:
Its:
EXHIBIT A
Construction Rules
These Construction Rules are attached and made a part of that certain 1401
Los Gamos Lease dated January 6, 2000 by and between ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
as ("Lessor") and BRIGHTWARE, INC. as ("Lessee").
1. WORK. Under the Lease, Lessee has agreed to accept the Premises "AS IS",
without any obligation for the performance of-improvements or other work
by Lessor and Lessee desires to perform certain improvements within the
Premises ("Lessee's Work"). All of Lessee's Work shall be in accordance
with the provisions of these Construction Rules, and to the extent not
expressly inconsistent herewith, in accordance with the provisions of the'
Lease. Lessee shall also comply and shall cause its contractors to comply
with the Building's construction rules and. regulations attached hereto.
2. COST OF LESSEE'S WORK. Except as provided in the Lease, Lessee shall pay
all costs associated with Lessee's Work, including without limitation, all
permits, inspection fees, fees of space planners, architects, engineers,
and contractors, fees for utility connections, the cost of all labor and
materials, bonds, insurance, and any structural or mechanical work,
additional HVAC equipment or relocation of any existing sprinkler heads,
either within or outside the Premises required as a result of the layout
design, or construction of Lessee's Work.
3. IMPROVEMENT ALLOWANCE. The Lessee Improvement Allowance of $182,928.00
($6.00 per square foot) and additional improvements of up to $274,392.00
($9.00 per square foot) shall be funded by Lessor in two installments. The
first installment may be requested after Lessee! s Work is at least 50%
completed and Lessee may request up to 50% of the Lessee Improvement
Allowance, and/or Additional Improvement allowance at such time. The
Second installment of the Lessee Improvement Allowance, and/or Additional
Improvement allowance shall be funded after Lessee's Work has been
completed in accordance with the "Final Plans" approved by Lessor in
writing in accordance with the provisions hereof, and Lessee has submitted
all invoices, lien waivers, affidavits Of payments, and such other
evidence as Lessor may reasonably require to evidence that the cost of
Lessee's Work has been paid for and that no mechanic's, materialmen's or
other such liens have been or may be filed against the Property or the
Premises arising out of the design or performance of Lessee's Work. Lessor
agrees- to disburse each installment of the Lessee Improvement Allowance,
and/or Additional Improvement allowance due to Lessee hereunder within
thirty (30) days following the date all required backup material has be
submitted as referenced herein.
4. CHANGE ORDERS. No changes, modifications, alterations, or additions to the
approved Space Plan or Lessee's Working Drawings may be made without the
prior written consent of the Lessor after written r request therefor by
Lessee, which consent shall not be unreasonably withheld or delayed. In
the event that the Premises are not constructed substantially in
accordance with the Final Plans, then Lessee must promptly perform the
work necessary for the Premises to reasonably comply in all respects with
the Final Plans; in such case, the Rent shall nevertheless accrue and be
payable as otherwise provided in the Lease. In no event may Lessee occupy
any portion of the Premises unless all necessary governmental approvals
have been obtained such that the Premises may be used and occupied for
business purposes.
Page 1 of 3
5. COMPLIANCE. Lessee's Work shall comply in all respects with the following:
(a) the Bu . Code of the City of San ▇▇▇▇▇▇, State and County laws, codes,
ordinances, and regulations, as each may apply according to the! rulings
of the controlling public official, agent or other such person, (b)
applicable standards of the National Board of Fire Underwriters and
National Electrical Code, and (c) building material manufacturer's
specifications.
6. GUARANTEES. Each contractor, subcontractor and supplier participating in
Lessee's Work shall guarantee that the portion thereof for which he is
responsible shall. be free from any defects in Lessee's Workmanship and
materials for a period of not less than one (1) year from the date of
completion thereof. Every such contractor, subcontractor, and supplier
shall be responsible for the replacement or repair, without additional
charge, of all Lessee's Work done or furnished in accordance with its
contract which shall become defective within one (1) year after completion
thereof' The correction of such Lessee's Work shall include, without
additional charge, all additional expenses and damages in connection with
such removal or replacement of all or any part of Lessee's Work, and/or
the Property and/or common areas, or Lessee's Work which may be damaged or
disturbed thereby. All such warranties or guarantees shall inure to the
benefit of both Lessor and Lessee, as their respective interest may
appear, and can be directly enforced by either. Lessee covenants to give
Lessor any assignment or other assurances necessary to effect such right
of direct enforcement. Copies of all contracts and subcontracts shall be
furnished to Lessor promptly after the same are entered.
7. PERFORMANCE.
a. Lessee's Work shall be performed in a thoroughly safe, first-class
and workmanlike manner in conformity with the Final Plans, and shall
be in good and usable condition at the date of completion.
b. Lessee shall be required to obtain and pay for all necessary permits
and/or fees with respect to Lessee's Work, and the same shall be
shown to Lessor prior to commencement of Lessee's Work, if
requested.
▇. ▇▇▇▇▇▇'▇ acceptance of Lessee's Work as being complete in accordance
with the Final Plans shall be subject to Lessor's inspection and
written approval, with such approval not unreasonably withheld or
delayed.
d. Lessee shall, at its cost mid expense, obtain any governmentally
required certificate of occupancy.
e. Copies of "as built" drawings shall be provided to Lessor no later
than thirty (30) days after completion of Lessee's Work.
f Lessor's approvals of Lessee's plans and specifications, and
Lessor's recommendations or approvals concerning contractors,
subcontractors,. space. planners, engineers, or architects, shall
not be deemed a warranty as to the quality or adequacy of Lessee's
Work, or the design thereof, or its compliance with Laws, codes and
other legal requirements.
▇. ▇▇▇▇▇▇ shall not be responsible for any disturbance or deficiency
created in the air conditioning or other mechanical, electrical or
structural facilities within the Property or Premises as a result of
Lessee's Work. If such disturbances or deficiencies result from
Lessee's Work, Lessee shall correct the same and restore the
services to Lessor's reasonable satisfaction within a reasonable
time.
Page 2 of 3
8. REPAIR OF DAMAGE; INDEMNITY. Lessee shall be responsible to repair and
restore at its sole cost and expense, any damage to any portions of the
Building or the Property arising out of the conduct of Lessee's Work,
including, without limitation, any damage caused by Lessee's agents,
employees or contractors. Lessee shall indemnify and hold harmless Lessor
(and Lessor's principals, partners, agents, trustees, beneficiaries,
officers, employees and affiliates) from and against any claims, demands,
losses, damages, injuries, liabilities, expenses, judgements, liens,
encumbrances, orders, and awards, together with attorney's fees and
litigation expenses arising out of or in connection with Lessee's Work, or
Lessee's failure to comply with the provisions hereof, or any failure by
Lessee's contractors, subcontractors or their employees to comply with the
provisions hereof, except to the extent caused by Lessor, Lessor's agents
or employees intentional or negligent acts.
LESSOR: ▇▇▇▇▇▇▇ ▇. AND ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Date: 1/28/2000
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Date: 1/27/2000
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
LESSEE: BRIGHTWARE INC., A DELAWARE CORPORATION
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Date: 1/25/00
------------------------------------ ---------------------
By:
Its: CEO
Date:
-------------------------------------------- ----------------------
By:
Its:
Page 3 of 3
ARBITRATION ADDENDUM
To Agreement dated JANUARY 6, 2000, between ▇▇▇▇▇▇▇ ▇. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
("LESSOR") and BRIGHTWARE, INC. ("LESSEE") concerning property commonly known as
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
This Addendum supersedes any provisions regarding arbitration contained in the
above reference Agreement.
ARBITATION OF DISPUTES. Any dispute or claim in law or equity arising out of
this contract will be decided by neutral binding arbitration in accordance with
the California Arbitration Act, (C.C.P. ss. 1280 et seq.), and not by court
action except as provided by California law for judicial review of arbitration
proceedings. Judgment upon the award rendered by the arbitrator may be entered
in any court having jurisdiction. The parties will have the right to discovery
in accordance with Code of Civil Procedures ss. 1283.05.
The parties agree that the following procedure will govern the making of the
award by the arbitrator:
(a) A Tentative Award will be made by the arbitrator within 30 days
following submission of the matter to the arbitrator.
(b) The Tentative Award will explain the factual and legal basis for the
arbitrators decision as to each of the principal controverted
issues. (c) The Tentative Award will be in writing unless the
parties agree otherwise; provided, however, that if the hearing is
concluded within one (1) day, the Tentative Award may be made orally
at the hearing in the presence of the parties.
(d) Within ten (10) days after the Tentative Award has been served or
announced, any party may serve objections to the Tentative Award.
Upon objections being timely served, the arbitrator may call for
additional evidence, oral or written argument, or both. If no
objections are filed, the Tentative Award will become final without
further action by the parties or arbitrator.
(e) Within thirty (30) days after the filing of objections, the
arbitrator will either make the Tentative Award final or modify or
correct the Tentative Award, which will then become final as
modified or corrected.
The provisions of C.C.P. ss. 128.5 authorizing the imposition of sanctions
as a result of bad faith or tactics will apply to the arbitration proceedings. A
prevailing p arty will also be entitled to an action for malicious prosecution
if the elements of such cause of action are met.
The following matters are excluded from arbitration: (a) a judicial or
non-judicial foreclosure or other action or proceeding to enforce a deed of
trust, mortgage, or real property sales contract as defined in Civil Code ss.
2985; (b) an unlawful detainer action; (c) the filing or enforcement of a
mechanic's lien; (d) any matter which is within the jurisdiction of a probate
court, or small claims court; or (e) an action for bodily injury or wrongful
death, or for latent or patent defects to which Code of Civil Procedure ss.
337.1 or ss. 337.16 applies. The filing of a judicial action to enable the
recording of a notice of pending action, for order of attachment, receivership,
injunction, or other provisional remedies, will not constitute a waiver of the
right to arbitrage under this provision.
NOTICE: BY SIGNING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE
ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION
DECIDED BY NEUTRAL ARBITRATION AS PROVICED BY CALIFORNIA LAW AND YOU ARE GIVING
UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN COURT OR JURY
TRIAL. BY SIGNING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO
DISCOVERY OR JURY TRIAL. BY SIGNING IN THE SPACE BELOW YOU ARE GIVING UP YOUR
JUDICIAL RIGHTS TO DISCOVERY OR APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY
INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION. IF YOU REFUSE TO SUBMIT TO
ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE
UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO
THIS ARBITRATION PROVISION IS VOLUNTARY.
WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES
ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION
TO NEUTRAL ARBITRATION.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Date: 1/18/2000
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Date: 1/25/2000
--------------------------------- ----------------
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Date: 1/27/2000
--------------------------------- ----------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Caution: The copyright laws of the United States forbid the unauthorized
reproduction of this form by any means including scanning or computerized
formats.
[ORION LOGO]
DISCLOSURE ADDENDUM FOR PROPOSALS To LEASE
AND LEASE AGREEMENTS
PREMISES: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
AGENCY: The following real estate brokers and brokerage relationships exist in
this transaction and are consented to by the parties:
ORION PARTNERS LTD. (check the box that applies) [X] represents the
Lessor exclusively; [ ]represents the Lessee exclusively; [ ]represents
both Lessor and Lessee in the capacity of a dual agent.
▇▇▇▇▇▇▇ INVESTMENTS (check the box that applies)[ ]represents the Lessor
exclusively; [ ]represents the Lessee exclusively.
THE AMERICANS WITH DISABILITIES ACT: Lessors and Lessee of real property may be
subject to the requirements of the Americans with Disabilities Act ("ADA").
Among other things, this act is intended to make many business establishments
equally accessible to persons with a variety of disabilities. Under US Law,
remodeling and other modifications to real property may be required. State and
local laws may also mandate changes. Orion Partners Ltd., ▇▇▇▇▇▇▇▇ Investments
and its agents are not qualified to advise you as to what, if any, changes may
be required to the Premises or building, mow or in the future, and the costs
associated therewith. Lessors and Lessees should consult legal counsel and
design professionals of their choice for information regarding these matters.
Lessee is responsible for conducting its own independent investigation of these
issues.
HAZARDOUS MATERIALS. Various materials utilized in the construction of
improvements to property may contain materials that have been or may in the
future be determined to be toxic, hazardous, or undesirable. These materials may
need to be specially handled or removed from the property. For example, some
electrical transformers and other electrical components can contain PCBS.
Asbestos has been used in a wide variety of building components such as
fireproofing, air duct insulation, acoustical tiles, spray-on acoustical
materials, linoleum, floor tiles, and plaster. Due to current or prior uses, the
property or improvements may contain materials such as metals, minerals,
chemicals, hydrocarbons, biological or radioactive materials, and other
substances which are considered, or in the future may be determined to be, toxic
wastes, hazardous materials, or undesirable substances. Such substances may be
in aboveground and below-ground containers on the property or may be present on
or in soils, water, building components, or other portions of the property in
areas that may not be accessible or noticeable.
Current and future federal, state, and local laws and regulations may require
the clean-up of such toxic, hazardous, or undesirable: materials at the expense
of those persons who in the post, present, or future have had any interest in
property including, but not limited to, current past and future owners and users
of the property. The parties are advised to consult with independent legal
counsel of their choice to determine the potential liability with respect to
toxic, hazardous, or undesirable materials. The parties should also consult with
such legal counsel to determine what provisions regarding toxic, hazardous, or
undesirable materials they may wish to include in purchase and sale agreements,
leases, options, and other legal documentation related to transactions they
contemplate entering into with respect to the property.
The real estate salespersons and brokers in this transaction have no expertise
with respect to toxic wastes, hazardous materials, or undesirable substances.
Proper inspections of the property by qualified experts are an absolute
necessity to determine whether or not there are any current or potential toxic
wastes, hazardous materials, or undesirable substances in or on the property.
The real estate salespersons and brokers in this transaction have not made, nor
will make, any representations, either expressed or implied, regarding the
existence or nonexistence of toxic wastes, hazardous materials, or undesirable
substances in or on the property. Problems involving toxic wastes, hazardous
materials, or undesirable substances can be extremely costly to correct. It is
the responsibility of the parties to retain qualified experts to deal with the
detection and correction of such matters.
The parties are directed to seek further information concerning any and all
future correctional measures, if any, from appropriate governmental agencies.
Disclosure Addendum
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
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Page 2 of 2
To the best of Lessor's knowledge, Lessor has attached to this Disclosure copies
of all existing surveys and reports known to Lessor regarding asbestos and other
hazardous materials including underground tanks and undesirable substances
related to the property. Lessors are required under California Health and Safety
Code Section 25915 et seq. To disclose reports and surveys regarding asbestos to
certain persons, including their employees, contractors, co-owners, purchasers
and tenants. Lessees have similar disclosure obligations. Lessors and Lessees
have additional hazardous materials disclosure responsibilities to each other
under California Health and Safety Code Section 25359.7 and other California
laws. Consult your attorney regarding this matter.
FLOOD DISCLOSURE. If the premises is located in a Federally Designated Flood
Zone the real and personal property of Lessee situated on or in the Premises is
not protected by the hazard insurance policy for the property carried by Lessor.
Lessee is responsible for investigating the Flood Zone status of the Premises
and obtaining insurance to cover, Lessee's property if it so desires
ZONING/USE . Prior to executing a lease, Lessee is responsible for determining
that the zoning applicable to the property and Premises allows Lessee to use the
property for its intended use of business, and that all building codes, parking
requirements, and other governmental requirements, improvements required, and
permits necessary have been met or are available to Lessee. Orion Partners Ltd.,
and ▇▇▇▇▇▇▇▇ Investments have made no representations, except in writing, if
any, concerning die zoning and allowable use of the Premises and any
requirements that may be imposed upon Lessee by any governmental agency. If
Lessee's use of the Premises requires a Use Permit or other permits from a
governmental authority it could take. several months to obtain same, and Lessee
may still be responsible for the payment of rent and other charges whether or
not such permits are ultimately obtained.
MEASUREMENT OF THE PREMISES. Determination of the square footage or size of the
Premises is not an exact science. Lessors and Lessees and their respective
representatives may use different standards and conventions in measuring the
Premises. Lessee is responsible for measuring the Premises and satisfying itself
prior to execution of the lease that the size of the premises is acceptable to
Lessee for the amount of rent it has bargained for. Orion Partners Ltd. and
▇▇▇▇▇▇▇▇ Investments do not guarantee the measurements or size represented in
its advertising brochures, drawings or marketing flyers.
UTILITIES. Prior to execution of a lease, Lessee should satisfy itself that the
Premises contains the necessary utility services and capacities necessary for
Lessee to operate its business at the Premises.
▇▇▇▇▇▇▇-▇▇▇▇▇▇ SPECIAL EARTHQUAKE FAULT ZONING ACT The property and Premises
described above (check which box applies) [ ] is; [ ] is not; [ ] may or may not
be situated in an Earthquake Fault Zone as designated under the ▇▇▇▇▇▇▇-▇▇▇▇▇▇
Earthquake Fault Zoning Act, Sections 2621-2630 inclusive, of the California
Public Resources Code; and, as such the construction of development on the
property of any structure for human occupancy may. be subject to the findings of
a geologic report prepared by a geologist registered with the State of
California, unless such report. is waived by the city or county under the terms
of that Act. No representations on this subject are made by ▇▇▇▇▇▇▇▇
Investments, or Orion Partners Ltd. or its agents or employees and the Lessee is
advised to make its own inquiry into this situation prior to entering into a
lease agreement.
The undersigned acknowledge that they have read and understand this disclosure
and have received a copy.
LESSOR LESSEE
▇▇▇▇▇▇▇ ▇. AND ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ BRIGHTWARE, INC.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------- --------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By:
Its: CEO
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------- --------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By:
Its:
Date: 1/27/2000 Date:
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