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Exhibit 10.1
LEASE AGREEMENT
THIS LEASE AGREEMENT ("Lease"), dated as of April 10, 2000, is made by
and between KAISER ALUMINUM & CHEMICAL CORPORATION, through its agent, KAISER
CENTER, INC. ("Landlord") and VERSATA, INC., a Delaware corporation ("Tenant").
Landlord is the prime subtenant of the premises under a master lease (the
"Master Lease"), and this Lease constitutes a sublease of the premises by
Landlord to Tenant.
1. PREMISES
1.01 Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord, subject to the agreements, conditions and provisions set forth in this
Lease, space on floors twelve (12), thirteen (13), fourteen (14) and fifteen
(15) (the "Premises") in the tower located on the city block bounded by Webster,
20th, 21st and Harrison Streets in Oakland, California (the "Building"). The
Premises, as more particularly described in Exhibit A, consists of approximately
99,228 rentable square feet, calculated according to BOMA standards as set forth
in the Building Owners and Managers Association Standard Method for Measuring
Floor Area in Office Buildings (August 1990 edition).
1.02 Tenant shall have the right to use and enjoy, throughout the term
of this Lease, the elevator lobbies, corridors, sidewalks, elevators, stairways,
and other public areas of the Building (the "Common Areas"). The Common Areas
shall be subject to the exclusive control and management of Landlord. Landlord,
in its sole discretion, may from time to time alter, eliminate, relocate or
reserve for private use any of the Common Areas. In addition, Landlord may
temporarily close or restrict the use of any Common Areas for repairs or other
purposes. Changes in the Common Areas may be made by Landlord without liability
to Tenant and without affecting Tenant's obligations under this Lease so long as
Tenant's normal use of the Premises is not unreasonably impaired.
1.03 Master Lease. Landlord represents and warrants to Tenant that: (i)
to the Landlord's knowledge, the Master Lease is in full force and effect, (ii)
neither the Landlord, as tenant, or the landlord, as landlord, under the Master
Lease is in default thereunder, nor, to Landlord's knowledge, is there any
current set of circumstances which, with notice and the passage of time, would
be an event of default under the Master Lease, and (iii) this Lease does not
violate the terms of the Master Lease, nor is the consent of the landlord
thereunder necessary, or, if such consent is necessary, it has been obtained.
Landlord agrees that, during the Term of this Lease, Landlord shall: (a) only
terminate, assign, amend or modify the Master Lease in such a manner so as not
to materially and adversely affect Tenant's rights under this Lease (Landlord
and Tenant acknowledge that a reduction of the term of the Master Lease would
materially and adversely affect Tenant's rights under this Lease); and (b)
perform all of Landlord's obligations as tenant under the Master Lease.
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2. TERM AND POSSESSION
2.01 Term. The Premises are leased to Tenant for the term (the "Term")
commencing on the Commencement Date set forth as follows, through the Expiration
Date set forth in Section 2.02 below:
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Floor Commencement Date
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12 August 15, 2000
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13 January 1, 2001
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14 August 15, 2000
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15 August 15, 2000
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The Commencement Dates set forth above shall be postponed by the
exact number of days thereafter on which occurs any Landlord's Delays or Force
Majeure Event (as defined in the Work Letter attached as Exhibit B. The word
"Term" as used in this Lease shall include the Extended Term if Tenant exercises
its option to extend the Term in accordance with Section 2.04 below.
2.02 Expiration Date. The Term shall expire at 11:59 p.m. on August 31,
2008 (the "Expiration Date"), unless earlier terminated pursuant to the
provisions of this Lease. Notwithstanding the foregoing, in the event that
Landlord does not exercise its right to extend the term under the Master Lease,
the Expiration Date shall be when the Master Lease expires. Notwithstanding any
provision herein, Landlord has no obligation whatsoever to Tenant to exercise
any rights Landlord may have to extend the term of the Master Lease for any of
the period covered by the Term described herein.
2.03 Early Entry. Notwithstanding anything to the contrary in this
Lease, Tenant shall have the right to occupy the 14th Floor of the Premises upon
delivery of possession thereof until the Commencement Date upon all of the terms
and conditions of this Lease, except the obligation to pay Rent or utilities
during such time period.
2.04 Possession. Landlord shall deliver possession of the Premises in
accordance with the Work Letter attached hereto as Exhibit B. Notwithstanding
the foregoing, Tenant's rights to the 13th floor of the building shall be
subject to the existing tenant leases of space within such floor (the "Existing
Leases") shown on Schedule 1 attached hereto. Landlord represents and warrants
that the list of tenants, base rent, lease expiration date and presence or
absence of rights to extend the term shown on Schedule 1 are true, correct and
complete. Tenant may not occupy the space occupied by such tenants until their
vacation of such space, but agrees to pay Rent thereon as of the Commencement
Date for such Floor. Upon the Commencement Date, Landlord shall assign all of
the rents payable thereunder commencing January 1, 2001 under the Existing
Leases to Tenant, in a form of assignment and assumption acceptable to Landlord
and Tenant. Landlord shall continue to exercise its rights and fulfill the
obligations of the landlord
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under the Existing Leases during such time period, except that Landlord may not
extend the term, grant options or extend or reduce the rent due under the
Existing Leases without the prior written consent of Tenant. Further, (i)
Landlord shall cooperate with Tenant, at Tenant's sole expense, to relocate any
of the tenants under the Existing Leases off of the 13th floor prior to the
expiration of their lease, and (ii) if Landlord and Tenant agree to extend any
Existing Leases, to the extent requested by Tenant Landlord shall increase the
rent of such tenants of Existing Leases at the expiration of the terms of such
Existing Leases. Notwithstanding the foregoing, in the event the tenants on the
13th floor relocate within the Building, then Landlord shall pay that portion of
the relocation costs for such tenants in an amount not to exceed Twelve Dollars
($12.00) per square foot of the new premises (the "Relocation Cost"). Tenant
acknowledges that it shall be responsible for payment of any costs in excess of
the Relocation Cost for such tenants who relocate within the Building.
a. If Landlord is unable to deliver possession of all or a
portion of the Premises to Tenant by the date specified in Section 2.01, this
Lease shall not be void or voidable and the Expiration Date and Tenant's
obligations under this Lease, including the obligation to commence paying rent,
shall not be affected, nor shall Landlord be liable to Tenant for any loss or
damage attributable to any delay.
b. By taking possession of the Premises, Tenant acknowledges that
the Premises are in good and tenantable condition and repair and that Landlord
has substantially complied with all of its obligations to be performed prior to
commencement of the Term of this Lease, including Premises improvements
described in Exhibit B.
2.05 Option to Extend. On the condition that Landlord, at its sole and
absolute discretion, has elected to exercise its right to extend the term under
the Master Lease beyond the Expiration Date, Tenant shall have two (2) options
to extend the Term of this Lease for two (2) additional terms, hereinafter
referred to as the "Extended Term," as hereinafter provided. Tenant acknowledges
that Landlord has certain renewal/repurchase rights under the Master Lease. No
later than twelve (12) months prior to the expiration of the Master Lease,
Landlord shall inform Tenant if it intends to exercise such rights of
renewal/repurchase.
a. The initial Extended Term shall be for a five (5) year period
commencing on the day after the Expiration Date (the "Extended Term Commencement
Date"), and the second Extended Term shall be for a five (5) year period
commencing on the day after the initial Extended Term ends; provided, however,
that if the Master Lease terminates prior to the fifth or tenth anniversary of
the Extended Term Commencement Date, as applicable, then the Extended Term then
in effect shall terminate on the date the Master Lease terminates. Tenant shall
have no right to extend the Term beyond the first Extended Term if it is
terminated on the date the Master Lease terminates, and following exercise of
its second option to extend. Notwithstanding any provision herein, Landlord has
no obligation whatsoever to Tenant to exercise any rights Landlord may have to
extend the term of the Master Lease for any of the period covered by the Term
described herein.
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b. Each Extended Term shall be on all of the terms and conditions
of this Lease except that during such Extended Term, Base Rent shall be adjusted
pursuant to Section 3.02, the Base Year shall instead be the first year of the
relevant extension period, initial Base Rent shall be determined as hereinafter
provided, and Landlord shall have no responsibility for commissions and Tenant
Improvements, except that Landlord shall, at Landlord's sole expense, repaint
the interior walls of the Premises with one (1) coat of the paint color
currently thereon immediately upon the commencement of such extension period. To
exercise the option to extend the Term, Tenant shall give to Landlord written
notice of exercise of the option to extend (the "Extension Notice") no later
than nine (9) months prior to the expiration of the preceding term. However, in
no event shall Tenant give such notice to Landlord earlier than twelve (12)
months prior to the expiration of the Term. If Tenant is in default beyond any
applicable notice and cure period on the date of giving such Extension Notice,
such Extension Notice shall be void. In addition, if Tenant is in default beyond
any applicable notice and cure period on, or if this Lease has been otherwise
terminated prior to, the date that any of the Extended Term would otherwise
commence, this Lease shall expire at the end of the initial Term.
c. On the commencement of the Extended Term, the initial Base
Rent hereunder for the Extended Term shall be adjusted to the market rental
value of the Premises ("MRV") as follows: Four months prior to commencement of
the Extended Term, Landlord and Tenant shall meet to establish an agreed upon
MRV for the specified term. If agreement cannot be reached, then: (i) Landlord
and Tenant shall immediately appoint a mutually acceptable appraiser or broker
to establish the MRV within the next 30 days, in which case any associated costs
will be split equally between the parties; or (ii) Landlord and Tenant shall
each immediately select and pay the appraiser or broker of their choice to
establish a MRV within the next 30 days. If both appraisals are completed and
the two appraisers/brokers cannot agree on a reasonable average MRV, then they
shall immediately select a third mutually acceptable appraiser/broker to
establish a third MRV within the next 30 days. The average of the two appraisals
closest in value shall then become the new MRV. The costs of the third appraisal
will be split equally between the parties. In any event, the MRV for the
Extended Term shall be no less than the Base Rent payable for the month
immediately proceeding the commencement of the applicable Extended Term. Upon
determination of the MRV as provided above, such MRV shall be the initial Base
Rent for such Extended Term.
3. RENT
3.01 Base Rent. Effective as of the Commencement Date for each floor of
the Premises, Tenant shall pay to Landlord as Base Rent, without deduction,
set-off, prior notice or demand, Thirty-Nine Dollars ($39.00) per square foot of
the Premises per annum (the "Base Rent"), payable in twelve (12) equal
installments on the first day of each calendar month. One full month's Base Rent
shall be paid to Landlord upon Tenant's execution of this Lease, which amount
shall be credited against the first month's Base Rent due under this Lease. Base
Rent or any change in Base Rent shall be prorated based on a thirty day month.
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3.02 Base Rent Increases. Beginning on January 1, 2002 and on each
annual anniversary thereafter during the Term, the Base Rent shall be increased
by three and one-half percent (3.5%) per annum. The January 1, 2002 adjustment
shall include the adjustment for the period commencing on August 15, 2000 and
ending on December 31, 2001. The adjustment for that period shall be billed
within the first calendar quarter of 2002. Notwithstanding the foregoing, the
increased Base Rent amount for the 13th Floor shall first be payable by Tenant
on January 1, 2002. Each annual increase shall be calculated on the Base Rent of
the preceding year.
3.03 Additional Rent. All sums payable by Tenant under this Lease, other
than Base Rent pursuant to this Section 3 and the Stock Investment (as such term
is defined in Section 19), if any, shall be Additional Rent.
3.04 Rent. Base Rent and Additional Rent are collectively referred to in
this Lease as "Rent."
4. LETTERS OF CREDIT
4.01 As security for the performance by Tenant of its covenants and
obligations under this Lease, upon execution of this Lease, Tenant shall deliver
to Landlord an original, unconditional, irrevocable and self-renewing letter of
credit in the applicable amount designated in Section 4.02, naming Landlord as
beneficiary (the "First Letter of Credit"). Within three (3) months following
the execution of this Lease, the Tenant shall deliver to Landlord a second
original, unconditional irrevocable and self-renewing letter of credit in the
applicable amount designated in Section 4.02, naming Landlord as beneficiary
(the "Second Letter of Credit"). The First Letter of Credit and the Second
Letter of Credit shall be collectively referred to herein as the "Letter of
Credit." The Letter of Credit shall be substantially in the form of Exhibit C,
and shall be issued by a major commercial bank reasonably acceptable to
Landlord, with a service and claim point for the Letter of Credit in the San
Francisco Bay Area.
4.02 Amount. The amount of the First Letter of Credit shall be Four
Million Eight Hundred Eighty-Six Thousand Nine Hundred Seventy-Nine and 00/100
Dollars ($4,886,979.00) and the amount of the Second Letter of Credit shall be
Nine Hundred Sixty Seven Thousand Four Hundred Seventy Three Dollars
($967,473.00). The initial combined amount of the First Letter of Credit and
Second Letter of Credit equals of Five Million Eight Hundred Fifty Four Thousand
Four Hundred Fifty-Two and 00/100 Dollars ($5,854,452.00). If Tenant is not then
in default under this Lease beyond any applicable notice and cure period, then
upon each anniversary of the Commencement Date, the Letter of Credit shall be
reduced by the annual amortized amount of brokerage commissions and Tenant
Improvement Allowance assuming amortization on a straight line basis over the
Term, which amount the Landlord and Tenant acknowledge is approximately Two
Hundred Forty-Eight Thousand Seventy and 00/100 Dollars ($248,070.00) per annum
(the "Commissions/TI Reduction". At any time during the Term, provided Tenant is
not then in default under this Lease beyond any applicable notice and cure
period, if Tenant demonstrates to Landlord's reasonable satisfaction that its
ratio of current
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assets (as shown on audited financial statements certified by accountants
acceptable to Landlord in its reasonable discretion), to its total liability
hereunder, equals or exceeds 3:1, then the face amount of the Letter of Credit
may in addition be reduced by the equivalent of six (6) months of Base Rent,
which for the purposes of this Section 4.02 the parties agree is One Million
Nine Hundred Thirty Four Thousand Nine Hundred Forty Six Dollars ($1,934,946.00)
(the "Asset/Liability Reduction"). In addition, after the twenty fourth (24th)
month following the Commencement Date, provided the Tenant is not then in
default beyond any applicable notice and cure period, if Tenant demonstrates to
Landlord's reasonable satisfaction that its annual net profits for its prior
fiscal year (as shown on audited financial statements certified by accountants
acceptable to Landlord in its reasonable discretion) equal three (3) years of
Base Rent, which for the purposes of this Section 4.02 the parties agree is
Eleven Million Six Hundred Nine Thousand Six Hundred Seventy Six Dollars
($11,609,676.00), then the face amount of the Letter of Credit may in addition
be reduced by the equivalent of three (3) months of Base Rent, which for the
purposes of this Section 4.02 the parties agree is Nine Hundred Sixty Seven
Thousand Four Hundred Seventy Three Dollars ($967,473.00) (the "Profits/Base
Rent Reduction"). If the Term of this Lease is extended for any Extended Term,
then, provided that Tenant is not then in default under the terms of this Lease
beyond any applicable notice and cure period, the amount of the Letter of Credit
(or, at Tenant's election, cash security deposit) shall be negotiated by
Landlord and Tenant.
4.03 Term of Letter of Credit. Except as otherwise provided herein, the
Letter of Credit shall expire not earlier than the Expiration Date of the Lease
as may be extended pursuant to the Extended Term.
4.04 Landlord Draws. Landlord may draw on all or a portion of the Letter
of Credit to cure any default beyond any applicable notice and cure period under
this Lease or to compensate Landlord for any damage Landlord incurs as a result
of Tenant's failure to perform any of Tenant's obligations under this Lease. If
Landlord draws on the Letter of Credit, Landlord may hold the funds received
from the Letter of Credit as security for Tenant's performance under this Lease
(the "Security"), and Landlord shall not be required to segregate the Security
from its other funds and no interest shall accrue or be payable to Tenant with
respect to the Security. No holder of a Superior Interest, as defined in Section
17.02, nor any purchaser at any judicial or private foreclosure sale of the
Building or any portion thereof, shall be responsible to Tenant for the Security
unless and only to the extent such holder or purchaser shall have actually
received the Security. If Landlord transfers the Security to the grantee or
transferee of Landlord's interest in the Building or the underlying real
property, Landlord shall be released from any further responsibility or
liability for the Security. Any draw on the Letter of Credit by Landlord shall
not constitute a waiver of any other rights of Landlord with respect to a
default or failure to perform by Tenant.
4.05 Replenishment. If Landlord draws on the Letter of Credit, Tenant
shall replenish the Letter of Credit within ten (10) business days of demand
therefor, or provide Landlord with an additional letter of credit conforming to
the requirements of this Section 4 so that the total amount available to
Landlord under Tenant's letter(s) of credit is the amount specified in Section
4.02. Notwithstanding the foregoing, the total amount of such letter(s) of
credit shall reflect
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reductions thereto, if any, previously allowed as provided in Section 4.02
above. In the event Tenant fails to deliver any replacement, additional, or
extension of the Letter of Credit, or evidence of renewal of Letter of Credit,
within the time specified under this Lease, Tenant shall be in default hereunder
and Landlord shall be entitled to draw upon all or any portion of the Letter of
Credit then in effect.
4.06 Return. Within thirty (30) days of expiration or earlier
termination of this Lease, and provided that Tenant is not then in default
hereunder, Landlord shall return to Tenant the Letter of Credit and/or the
balance of the Security then held by Landlord, as applicable; provided, however,
that in no event shall any such return be construed as an admission by Landlord
that Tenant has complied with all of its covenants and obligations under this
Lease.
5. OPERATING EXPENSE ADJUSTMENT
5.01 "Base Year" shall mean the year January 1, 2000 through December
31, 2000. Beginning January 1, 2002 and continuing annually thereafter, in
addition to Base Rent, Tenant shall pay to Landlord, as Additional Rent,
Tenant's share of any increase in Operating Expense for the forthcoming calendar
year over Operating Expense for the Base Year. Additionally, on January 1, 2002,
Tenant shall pay to Landlord, as Additional Rent, Tenant's share of any increase
in Operating Expense over the Base Year for the period January 1, 2001 through
December 31, 2001. "Tenant's Share" shall mean the percentage that the total
rentable square footage in the Premises is of the total rentable square footage
in the Building, which percentage the parties agree equals thirteen and
52/100ths percent (13.52%). Tenant's Share shall be adjusted each time Tenant
leases any additional space in the Building, based on the new total rentable
square footage in the Premises to the total square footage in the Building. In
no event shall Rent be decreased below the Base Rent provided for in Section 3
of this Lease.
5.02 "Operating Expense" as used in this Lease shall mean the total of
all actual costs (but not specific costs which are separately billed to and paid
by specific tenants) of every kind and nature incurred in connection with the
ownership, management, operation, maintenance and repair of the Building and the
real property upon which the Building is located, including but not limited to
the following:
a. All real property taxes and assessments levied on or assessed
against the Property and the Building, including (i) all tax increases resulting
from any reassessment of the Property and the Building pursuant to Article XIII
A of the California Constitution on sale, construction or otherwise; (ii) all
taxes levied in whole or part in lieu of real property taxes; and (iii) all
other present or future taxes, charges, excises or fees with respect to the
Property and the Building including taxes on rent, on the making of a lease, on
the occupancy of a tenant, on environmental or energy taxes or charges, and
taxes for special uses or districts, and excluding only income taxes measured by
Landlord's net income from all sources.
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b. All premiums for insurance which Landlord deems necessary or
desirable, including, without limitation, fire and other casualty insurance,
public liability and property damage insurance, earthquake and business
interruption insurance.
c. All costs of services to the Premises, including without
limitation, the repair and maintenance of the structure, roof, elevators, air
conditioning equipment, plumbing equipment, other equipment and wall, floor and
window coverings; painting, janitorial service, garbage disposal, pest control
and cleaning costs; the cost of Building and other supplies, fuel, materials,
equipment and tools; water, gas, electric energy, steam and other utilities;
wages and other labor costs of personnel engaged in management, operation and
maintenance (including overtime, holiday and other premium pay, the cost of
Social Security, unemployment and other payroll taxes, workers' compensation
insurance and employee benefits, such as, but not limited to, vacation, pension,
group insurance and other fringe benefits), legal, accounting and other
administrative fees, service contracts, reasonable management fees, landscaping
services and supplies, and the fair market value of the property manager's
offices in the Building.
d. The amortization of the cost of the purchase and installation
by Landlord of capital investment items which Landlord deems necessary to (i)
achieve economies in the operation, maintenance and repair of the Building (to
the extent of the annual savings realized only), (ii) to comply with the
requirements of any governmental authority (including but not limited to any
statutes or ordinances) or with mandatory or voluntary controls or guidelines on
Landlord or the Building relating to the provision of any utilities or services
provided with respect to this Lease; or (iii) comply with any insurance
requirement. The cost shall be capitalized on the books of Landlord in
accordance with generally accepted accounting practices and amortized by
multiplying the actual cost, including financing costs, by the constant annual
percentage required to fully amortize the cost over the useful life of the
capital improvement, as determined by generally accepted accounting principles.
e. In no event shall Operating Expenses include any of the
following, and nothing contained herein shall be deemed to require Tenant to pay
any of the following: (i) brokerage commissions, advertising costs and other
related expenses incurred in connection with the leasing of the Building; (ii)
payments of principal or interest on any mortgage including ground lease
payments and points, commissions and legal fees associated with financing; (iii)
depreciation; (iv) costs (including permit, license and inspection fees)
incurred in renovating or otherwise improving, decorating, painting or altering
space leased to other tenants in the Building; (v) any cost or expense related
to the testing for, removal, transportation or storage of Hazardous Materials
from the Premises included as part of the original base building construction;
(vi) interest, penalties or other costs arising out of Landlord's failure to
make timely payments of its obligations; and (vii) property management fees of
any property management firm in excess of four percent (4%) of the gross
revenues of the Building.
5.03 Tenant's Share of the increase, if any, in estimated annual
Operating Expense over the Operating Expense for the Base Year shall be paid by
Tenant to Landlord, commencing on January 1, 2002, as Additional Rent in twelve
(12) equal monthly installments in advance on
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the first day of each calendar month without notice or demand. For each year
subsequent to the Base Year, Landlord shall provide Tenant with a written
estimate of the Operating Expense Landlord reasonably anticipates for the
following year. In addition, Landlord may adjust the estimate of Operating
Expense during the year if Landlord concludes that it underestimated actual or
overestimated Operating Expense. Tenant shall continue to pay one-twelfth (1/12)
of Landlord's last estimate of Tenant's Share of the increase, if any, in annual
Operating Expense on the first day of each calendar month until notified of a
new estimate.
5.04 Within a reasonable period after the end of each year, Landlord
shall give Tenant a statement, certified by Landlord's controller, showing
actual Operating Expense for such year, the actual increase, if any, of
Operating Expense for such year over the actual Operating Expense for the Base
Year, Tenant's Share of any such increase, and the total payments made by Tenant
on the basis of any previous estimate of Operating Expense. If Tenant's share of
the actual increase in Operating Expense exceeds the monthly installments paid
by Tenant during the year, Tenant shall pay the deficiency to Landlord within
thirty (30) days of delivery of such statement. If Tenant's monthly installments
exceed Tenant's Share of the actual increase in Operating Expense, Landlord
shall give Tenant a credit in the amount of the excess against the next
installments of rent due from Tenant or, in the case of a statement after
expiration of the Term, reimburse Tenant such excess amount within thirty (30)
days of the time such statement is delivered. Tenant's Share of the increase in
Operating Expense for the year in which this Lease commences and terminates
shall be prorated on the basis of a 365-day year. Expiration of the term of this
Lease shall not affect the obligations of Landlord or Tenant to adjust the
payment of Tenant's Share of increases in Operating Expense pursuant to this
Section 5.04.
5.05 Any dispute between the parties concerning the proper determination
of any increases in rent shall be referred to Landlord's certified public
accountants and the determination of any dispute by such firm shall be binding
and conclusive on the parties. Any charges made or expenses incurred by the
certified public accountants in connection with any such determination shall be
borne and paid for by Landlord if the amount set forth in Landlord's statement
is revised, downward by five percent (5%) or more, and by Tenant if it is less
than five percent (5%) downward.
6. LATE CHARGE
Tenant acknowledges that late payment of rent and other sums will cause
Landlord to incur costs not contemplated by this Lease, the exact amount of such
costs being extremely difficult and impractical to fix. These costs include,
without limitation, processing and accounting charges, and late charges that may
be imposed on Landlord by the terms of any encumbrance, and notes secured by any
encumbrance, covering the Premises. Therefore, if any installment of rent or
other amounts due from Tenant are not paid in full within five (5) days of the
due date, Tenant shall pay to Landlord as Additional Rent six percent (6%) of
the delinquent amount. The parties agree that acceptance of the late charge
shall not constitute a waiver of Tenant's default with respect to the overdue
amount, or prevent Landlord from exercising any of the rights and remedies
available to Landlord under this Lease or by law.
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7. USE
7.01 Tenant shall use and occupy the Premises only for the purpose of a
general business office and related client training sessions, and for no other
purpose.
7.02 Tenant shall not use or occupy the Premises, or permit the use or
occupancy of the Premises, in any manner or for any purpose (a) which would
violate any law, order or regulation of any governmental authority, (b) which
will in any way increase the existing rate or affect any fire or other insurance
upon the Building or any of its contents or cause a cancellation of any such
insurance policy, (c) which would violate any provision of this Lease or any
certificate of occupancy for the Premises or the Building, (d) which might
impair or interfere with any of the services and systems of the Building,
including without limitation, the heating, elevator, air-conditioning,
ventilation and mechanical systems and the janitorial, security and building
maintenance services, (e) which would overload the Premises, cause substantial
noise or vibration, or jeopardize the structural integrity of the Building, (f)
which would obstruct or interfere with the rights of other tenants or occupants
of the Building or injure or annoy other tenants or occupants, (g) which would
impair the appearance of the Building or be prejudicial to the business or
reputation of Landlord or the Building or confuse or mislead the public as to
the relationship between Landlord and Tenant.
7.03 Within thirty (30) days after receipt of demand by Landlord, Tenant
shall reimburse Landlord for additional premiums charged for any insurance
policy by reason of Tenant's failure to comply with the provisions of Section
7.02 and for any other costs incurred by Landlord in enforcing the provisions of
Section 7.02.
7.04 Tenant shall be bound by and comply with the Rules and Regulations
attached to this Lease as Exhibit D, and, after notice, by all reasonable
modifications and additions to the Rules and Regulations as from time to time
promulgated in writing by Landlord. Landlord shall have the right to modify the
Rules and Regulations in its sole discretion. Landlord shall not be responsible
to Tenant for violation of any Rules or Regulations by any other tenant or
occupant of the Building.
7.05 Tenant shall not maintain or display any sign, lettering, drapes,
shades, blinds or lights on the exterior or interior (including windows) of the
Premises unless approved by Landlord in writing. Notwithstanding the foregoing,
Landlord will provide Tenant with first (1st) and second (2nd) floor lobby
directory signage in its customary size and form. Tenant shall be permitted to
place a sign comprised of its corporate logo in the lobby of each full floor it
occupies (the "Interior Signs") and, subject to the existing rights of other
tenants (as identified below), Landlord grants Tenant an option, to be exercised
by Tenant no later than January 1, 2001 (or else such option shall thereafter be
null and void) to install one (1) illuminated exterior building sign at the
parapet level of the Building facing 21st Street similar in size to, but not
larger than, the existing "Kaiser" sign (the "Exterior Sign") (the Interior
Signs and the Exterior Sign are collectively referred to herein as the "Signs").
Tenant acknowledges that its signage
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rights, as provided herein, may be subject to the rights, if any, held by the
following tenants: 1) Bank of America; 2) California Bank & Trust; and 3)
Computer Sciences Corporation (successor to TRW, Inc.). In consideration of such
option, Tenant shall pay Landlord the sum of Ten Thousand Dollars ($10,000.00)
upon execution of this Lease. Such consideration shall be reimbursed to Tenant
if the signage rights of Tenant hereunder are denied. Tenant shall maintain the
Signs in accordance with the building standards. Tenant shall pay all costs
associated with the installation, maintenance and removal of the Signs. Tenant
shall pay rent for the Exterior Sign at the rate of Ten Thousand Dollars
($10,000.00) per month, commencing on January 1, 2001 and ending on the
termination of this Lease. Tenant may install the Signs following the prior
written approval of Landlord (of the design, size and location of the Signs) and
any appropriate municipal agencies. Except as otherwise provided herein, Tenant
shall have exclusive signage rights on the upper parapet area only for the side
of the Building facing 21st Street. The Sign rights contained herein are granted
for the exclusive use of Tenant and any Affiliate thereof (as defined in Section
15.02 hereof) only, provided that the name of the tenant on such Signs remains
"Versata," and shall terminate upon the Expiration Date of the Lease.
Notwithstanding anything to the contrary contained herein, any change in the
name on the sign from "Versata" shall require the prior written consent of
Landlord, which consent shall not be unreasonably withheld, and in any event,
Landlord shall have the right to withhold its consent if any change of name on
the Signs would violate the existing rights of other tenants, or any local
ordinances. Upon termination of the Sign rights, Tenant at its sole expense
shall remove all Signs, and repair all damages to the Building resulting from
the installation, maintenance or removal of such Signs, including without
limitation any cleaning of all or a portion of the dolomite curtain wall upon
which the Exterior Sign is placed.
8. ALTERATIONS
8.01 Landlord shall have no responsibility for any loss or damage to any
fixtures, equipment or other property installed or left in the Premises from any
cause except as results from the intentional or grossly negligent acts of
Landlord. Tenant's entry prior to the commencement of the term shall be subject
to all of the applicable provisions of this Lease, except for the obligation to
pay Rent. Tenant shall furnish Landlord with copies of all certificates and
approvals relating to any installation work done by Tenant which may be issued
or required by any governmental authorities. Tenant shall diligently prosecute
such work to completion and with all due diligence shall open the Premises for
the conduct of its business.
8.02 Tenant shall not make or permit to be made any alterations,
additions or improvements to the Premises or any part of the Premises, or attach
any fixtures or equipment, without first obtaining Landlord's written consent,
which consent shall not be unreasonably withheld or delayed. Any alterations,
additions or improvements to the Premises consented to by Landlord shall be made
by a contractor approved by Landlord (which approval shall not be unreasonably
withheld or delayed) for Tenant's account, and Tenant shall reimburse Landlord,
as Additional Rent, for the cost, including a reasonable charge for Landlord's
overhead, for work done by Landlord, within ten (10) days after receipt of a
statement. All alterations, additions, fixtures and improvements, whether
temporary or permanent in character, made in or upon the
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Premises either by Tenant or Landlord, shall immediately become Landlord's
property (except that Tenant shall be entitled to all tax benefits accruing
therefrom) and, at the end of the Term of the Lease, shall remain on the
Premises without compensation to Tenant.
8.03 If Landlord so elects by notice in writing to Tenant at least
thirty (30) days prior to the expiration or earlier termination of this Lease,
then Tenant shall remove from the Premises all property changed or altered, and
all additions or improvements (except walls, doors, carpets and other tenant
improvements typically found in office space) resulting from Tenant's changes,
alterations, additions and improvements upon the Premises as Landlord shall
select. Tenant shall repair at Tenant's own cost and expense and to Landlord's
satisfaction all damage caused by any removal of property permitted or required
to be removed under this Section 8.03, and all such removals and repairs shall
be completed by the date of expiration or other termination of this Lease. If
Tenant shall fail to so remove such property or repair such damage, Landlord may
do so at Tenant's expense.
9. SERVICES
9.01 Landlord shall furnish to the Premises during the periods from 7:00
a.m. to 6:00 p.m., Monday through Friday, excluding holidays, and subject to
rules and regulations from time to time established by Landlord, heating,
air-conditioning and ventilation in amounts required, in Landlord's reasonable
judgment, for the use and occupancy of the Premises for normal business
purposes. Landlord shall provide the following services seven days a week on a
twenty-four (24) hour basis: (a) passenger elevator service, (b) electric
current in amounts required for normal lighting by standard overhead fluorescent
fixtures and for normal office machines, (c) water for lavatory and drinking
purposes, and (d) security for the Building; provided, however, that Landlord
shall not be liable for personal injuries or for losses due to theft or
burglary, or for damages done by unauthorized persons in or around the Building.
Landlord shall provide janitorial service on a five-day week basis, excluding
Saturdays, Sundays and holidays.
9.02 Landlord may impose a reasonable charge and establish reasonable
rules and regulations for the use of any additional or unusual janitorial
services required by Tenant. Landlord shall not be required to provide
janitorial services for portions of the Premises used for preparing or consuming
food or beverages, or for storage, or as a lavatory. Landlord shall provide, at
Landlord's sole expense, starters and ballasts and new initial lamps and bulbs;
however, Tenant shall reimburse Landlord for the cost and expense of maintaining
and replacing lamps, bulbs, starters and ballasts.
9.03 If Tenant desires any service at any time other than during the
hours set forth in Section 9.01 or in amounts exceeding the basic services
provided by Landlord, Tenant shall pay Landlord the cost of providing the
additional services (based on the actual cost thereof to Landlord, without
mark-up or profit), as Additional Rent. If in Landlord's sole discretion Tenant
utilizes excess electric current, Landlord shall have the right to install an
electric current meter in the Premises to meter the amount of electric current
consumed on the Premises. The cost of any such meter and separate conduit,
wiring or panel requirements and installation, maintenance and
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repair shall be paid for by Tenant and Tenant agrees to reimburse Landlord
promptly upon demand by Landlord for all excess electric current as shown by the
meter, at the rates charged for such services, plus any additional expense
incurred in keeping account of the electric current so consumed, as Additional
Rent. If the temperature otherwise maintained in any portion of the Premises by
the heating, air-conditioning or ventilation systems is affected as a result of
any lights, machines or equipment (including without limitation electronic data
processing machines) used by Tenant in the Premises, or an excess electrical
load in the Premises, or by alterations to the Premises made by Tenant or at
Tenant's request, Landlord shall have the right to install any machinery and
equipment that Landlord reasonably deems necessary to restore temperature
balance, including without limitation, modifications to the standard air
conditioning equipment. The cost of installation and any additional cost of
operations and maintenance incurred shall be paid by Tenant to Landlord within
ten (10) days after written demand by Landlord, as Additional Rent.
9.04 Landlord reserves the right, without notice to Tenant and without
giving rise to any claim of constructive eviction, to stop the heating,
elevator, lighting, ventilating, air-conditioning, power and water systems of
the Building or cleaning or other services, if any, and to interrupt the use of
any of the Building facilities, at such times as may be necessary and for as
long as may reasonably be required by reason of accidents, strikes, lock-outs or
other labor disputes, or the making of repairs, alterations or improvements or
inability to secure a proper supply of fuel, steam, water, electricity, labor or
supplies, or by reason of any cause beyond the control of Landlord; provided,
however, that if any interruption of utilities or services is discontinued for
more than ten (10) consecutive business days for reasons within Landlord's
control, and such discontinuance substantially affects Tenant's ability to use
any portion of the Premises, then Rent due hereunder shall be abated for the
portion(s) of the Premises affected until the utilities or services are
continued. If such services are rationed by governmental authority, public
utility or other entity, Landlord may apportion such services among the Tenants
of the Building in accordance with Landlord's best judgment without liability
and without affecting Tenant's obligations under this Lease.
10. REPAIRS AND MAINTENANCE
10.01 Landlord shall repair and maintain in good order and serviceable
condition the exterior and structural portions of the Premises, the common areas
of the Building and the basic electrical system, elevators, heating and
air-conditioning equipment and plumbing serving the Premises, provided that
Landlord shall have no obligation to (a) repair damage caused by the intentional
acts or negligence of Tenant, its employees, invitees, licensees, agents and
contractors, subject to the terms of Section 11.01 hereof; (b) repair, repaint
or redecorate the interior of the Premises; or (c) make repairs which are
required to be made by Tenant pursuant to the provisions of Section 10.02.
Except as expressly provided in this Section 10.01 and in Section 12, Landlord
shall have no responsibility, obligation or liability with respect to the
repair, restoration or maintenance of the Premises.
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10.02 Tenant shall, at its own cost and expense, repair and maintain
(except for maintenance provided by Landlord under Section 9 with respect to
janitorial service) in good order and condition the nonstructural interior
portions of the Premises, including interior doors, partitions, carpeting and
floor coverings. Subject to the terms of Section 11.01 hereof, regardless of any
other provisions of this Lease, Tenant shall, at its own cost and expense,
repair or restore any damage or destruction to any portion of the Premises or to
the Building caused by the intentional acts or negligence of Tenant, its
employees, invitees, licensees, agents and contractors, except to the extent
such damage or destruction is covered by fire and extended coverage insurance
obtained by Landlord as provided in Section 11.01 of this Lease.
10.03 In the case of emergencies (as reasonably determined by Landlord),
or if Tenant refuses or neglects to commence repairs which it is obligated to
make and complete with reasonable diligence, Landlord may make or cause repairs
to be made and shall not be responsible to Tenant for any loss or damage that
may accrue to its property or business by reason thereof. If Landlord makes such
repairs, and if the same are repairs required to be made by Tenant hereunder,
Tenant shall reimburse Landlord for the cost of such repairs, as Additional
Rent, within thirty (30) days after written demand by Landlord.
10.04 The provisions of this Section 10 are in lieu of any rights
otherwise accruing to Tenant by virtue of sections 1941 and 1942 of the Civil
Code of the State of California (or any successor provisions), and the
provisions of such sections are hereby waived by Tenant.
10.05 Tenant shall keep the Premises and the Building free from any
liens arising out of any work performed, materials furnished or obligations
incurred by Tenant. If a mechanic's lien or another lien is filed against the
Building, Tenant shall do all acts necessary to discharge the lien within thirty
(30) days of filing or, if Tenant desires to contest the lien, then Tenant shall
deposit with Landlord within thirty (30) days of filing such security as
Landlord, the landlord under the Master Lease, and their lenders may demand to
secure the payment of the lien claim. Landlord shall have the right to post and
keep posted on the Premises any notices that may be provided by law or which
Landlord may deem to be proper for the protection of Landlord, the Premises and
the Building from liens.
10.06 At least ten (10) days prior to delinquency, Tenant shall pay all
taxes levied or assessed upon tenant's equipment, furniture, fixtures and other
personal property located in or about the Premises. If the assessed value of
Landlord's property is increased by inclusion of a value placed upon Tenant's
equipment, furniture, fixtures or other personal property, Tenant shall pay to
Landlord, upon written demand, the taxes so levied against Landlord, or the
proportion of taxes resulting from the increase in assessment.
10.07 Landlord may enter the Premises at reasonable hours, upon prior
notice thereof at least twenty-four (24) hours in advance (except in case of
emergency or routine services), for any proper purpose including but not limited
to the following: (a) inspection purposes, (b) to exhibit the Premises to
prospective purchasers or lenders, or, during the last nine (9) months of the
Term of the Lease, or any other time that Landlord has exercised its recapture
rights, to
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prospective tenants, (c) to determine whether Tenant is complying with all its
obligations under this Lease, (d) to supply janitor service and any other
service to be provided by Landlord under this Lease, (e) to post notices of
non-responsibility, and (f) to make repairs required of Landlord under the terms
of this Lease or repairs to any adjoining space or utility services or to make
repairs, alterations or improvements to any other portion of the Building;
provided, however, that all repair work shall be done as promptly as reasonably
possible and so as to cause as little interference to Tenant as reasonably
possible. Tenant hereby waives any claim for damages for any injury or
inconvenience to or interference with Tenant's business, any loss of occupancy
or quiet enjoyment of the Premises or any other loss occasioned by any entry,
except to the extent caused by the gross negligence or willful misconduct of
Landlord.
11. INSURANCE
11.01 Landlord shall obtain and keep in force during the term or any
earlier occupancy by Tenant such fire and other insurance upon the Premises as
Landlord may in its discretion determine, and Tenant shall, at its sole expense,
obtain and keep in force during the term of this Lease the fire and extended
coverage insurance upon Tenant's fixtures, goods, wares and merchandise and
other personal property in and upon the Premises as Tenant may in its discretion
determine, provided, however, that Landlord hereby waives against Tenant and
Tenant hereby waives against Landlord any and all claims and demands, of any
nature, loss or injury to the Premises or to Tenant's fixtures, goods, wares and
merchandise and other personal property in and upon the Premises, as the case
may be, which shall be caused by or result from fire and other perils, events or
happenings which are covered by fire and extended coverage insurance.
11.02 During the term of this Lease or any earlier occupancy by Tenant,
Tenant shall procure and maintain in full force and effect bodily injury
liability insurance with limits of not less than TWO MILLION DOLLARS
($2,000,000.00) per occurrence, and insurance against damage to property with a
limit of not less than ONE MILLION DOLLARS ($1,000,000.00), insuring against any
and all liability of Tenant with respect to the Premises or arising out of the
maintenance, use or occupancy of the Premises. Tenant shall provide to Landlord,
prior to Tenant's occupancy of the Premises, and thirty (30) days prior to
expiration of any policy, certificates issued by Tenant's insurance carrier
evidencing the continued coverages herein required and naming Landlord and any
and all of its employees, agents, partners, directors, officers and assigns as
it may designate from time to time, as additional named insureds. The
certificate shall also provide that the policy or policies shall not be canceled
or modified without thirty (30) days' prior written notice to Landlord. The
policy or policies evidenced by such certificate shall be subject to Landlord's
approval as to form and substance.
11.03 Landlord shall not at any time or to any extent whatsoever be
liable, responsible or in any way accountable for any loss, injury, death or
damage to persons or property which at any time may be suffered or sustained by
Tenant or by any person who may at any time be using or occupying or visiting
the Premises or be in, on or about the Premises, caused by or resulting from or
arising out of, any act, omission or negligence of Tenant in the use of the
Premises, or from any failure of Tenant to keep the Premises in good order,
condition and repair, as provided
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in this Lease, and Tenant shall indemnify, defend, hold and save Landlord free
and harmless of, from and against any and all claims, liability, loss or damage
whatsoever on account of any such loss, injury, death or damage. Tenant hereby
waives all claims against Landlord and its employees, agents, partners,
directors, officers or assigns for damages to fixtures, furniture and equipment,
goods, wares and merchandise or any other property, in or about the Premises,
and for injuries to or death of any persons in or about the Premises, from any
cause except Landlord's gross negligence or intentional tortious acts.
12. DAMAGE OR DESTRUCTION
12.01 The term "Casualty" as used herein shall mean and be limited to
(a) any fire, (b) any other occurrence or event covered by the usual form of
extended coverage endorsement on fire insurance policies, (c) any earthquake,
and (d) any other occurrence or event covered by insurance actually carried by
Landlord and in force at the time of the happening of any such occurrence or
event. If, during the term of this Lease the Building in which the Premises are
located or any portion of the Building shall be damaged or destroyed as a result
of any Casualty, then, anything contained in Section 10 to the contrary
notwithstanding, the following provisions shall apply and govern.
12.02 Except as provided to the contrary in Sections 12.03 and 12.04,
Landlord shall repair or restore the Building as soon as reasonably practicable.
Any damage to or destruction of the Building or the Premises and any delay in
effecting repairs or restoration shall not constitute an actual or constructive
eviction of Tenant and this Lease shall continue in full force and effect except
that to the extent the Premises are unusable by Tenant as a result of such
damage or destruction, Tenant shall be entitled to an appropriate abatement of
the Rent provided for in Section 3. Landlord's obligations hereunder shall be
subject to the rights of the holders of any deeds of trust, mortgages, ground or
prime leases or other encumbrances on the Building or the Property and shall be
limited to the amount of insurance proceeds received by Landlord.
12.03 If by reason of a Casualty (other than earthquake) there is damage
to or destruction of the Building and if the cost of restoring the Building as
estimated by Landlord, or the landlord under the Master Lease, would exceed
33-1/3% of the replacement cost of the Building or the proceeds recovered by
Landlord on account of such damage or destruction under any insurance policy
respecting the Building, then Landlord or the landlord under the Master Lease,
may elect not to restore the Building.
12.04 If by reason of earthquake there is damage to or destruction of
the Building and if the cost of restoring the same as estimated by Landlord, or
the landlord under the Master Lease, would exceed $1,000,000, then Landlord, or
the landlord under the Master Lease, may elect not to restore the Building.
12.05 If Landlord, or the landlord under the Master Lease, elects not to
restore the Building, Landlord shall notify Tenant of such election in writing,
which notice in the case of Landlord's election, shall in no event be given
later than 120 days after the date of the damage or
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destruction. If Landlord delivers notice within the time specified, Tenant
shall, to the extent that a portion of the Premises are unusable by reason of
damage or destruction, be entitled to an appropriate abatement of the Rent
provided for in Section 3 from the date of damage or destruction, and if fifty
percent (50%) or more of the Premises remain unusable by Tenant, and the time
necessary to repair the portion of the Premises damaged by casualty exceeds
three hundred sixty-five (365) days, Tenant may, by delivery of written notice
to Landlord at any time within thirty (30) days after receipt of Landlord's
notice, elect to terminate this Lease, and this Lease shall so terminate as of
thirty (30) days after the date Tenant's notice of such election is received by
Landlord.
12.06 In no event shall Landlord be required to restore or replace any
of the fixtures, furnishings, equipment or other personal property installed in
the Premises by Tenant or located in the Premises and Landlord's obligation
under this Section 12 with respect to the Premises is expressly limited to the
repair or restoration of the Premises to the general condition in which
possession thereof was made available to Tenant at the commencement of the term
of this Lease. Tenant shall cause to be performed at its own cost and expense
any other or further repairs or restorations which may be necessary to place the
Premises in substantially the same condition as they existed immediately prior
to such Casualty. Nothing contained in this Section 12 shall relieve Tenant of
liability to Landlord for any damage or destruction to the Premises of the
Building arising out of the intentional acts or negligence of Tenant, its
employees, agents, invitees, licensees and contractors.
13. EMINENT DOMAIN
13.01 If any part of the Premises shall be taken or condemned for a
public or quasi-public use or shall be sold by Landlord or the landlord under
the Master Lease to any entity having the right of eminent domain after notice
of intent to exercise such right has been given to Landlord by such entity, this
Lease shall immediately terminate as to the part so taken, condemned or sold. If
a part of the Premises remains which is susceptible of the reasonable conduct of
the business of Tenant, as determined by Landlord, this Lease shall remain in
full force and effect as to the portion of the Premises not so taken, condemned
or sold, as the case may be, but the rent payable under this Lease shall be
adjusted so that Tenant shall be required to pay for the remainder of the term
only the proportion of the rent as the area measured in square feet of the part
remaining after the taking or sale bears to the total area measured in square
feet of the Premises at the date of taking or sale; provided, however, that
Landlord shall have the option to terminate this Lease in its entirety as of the
date when title to the part so taken or sold vests in the condemner or purchaser
by giving Tenant notice in writing of Landlord's election to so terminate within
ten (10) days after the date of such taking or sale, as the case may be.
13.02 If the entire Premises, or such substantial part of the Premises
is taken, condemned or sold so that there does not remain a portion susceptible
of the reasonable conduct of Tenant's business, as determined by Landlord, this
Lease shall terminate as of the date of taking or sale.
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13.03 If a part or all of the Premises are taken, condemned or sold, all
compensation awarded upon such taking or condemnation or the payment made upon
any such sale (except any compensation specifically awarded for the taking of
any of Tenant's trade fixtures or personal property or both, or for Tenant's
relocation costs associated with such a taking or sale) shall go to Landlord and
Tenant shall have no claim thereto, and Tenant hereby irrevocably assigns and
transfers to Landlord any right to compensation or damages to which Tenant may
become entitled during the term of this Lease by reason of the permanent or
temporary condemnation or sale to the condemning authority of all, or a part of
the Premises.
14. DEFAULT
14.01 The word "default" as used in this Section 14 shall mean and
include any one or more of the following events or occurrences:
a. The failure by Tenant to perform or observe any of the
covenants and agreements of this Lease, including specifically, but without
limitation, Tenant's covenants for the payment of Rent.
b. The issuance of any execution or attachment against Tenant or
any of Tenant's property, whereby the Premises or any portion of the Premises
shall be taken or occupied, or attempted to be taken or occupied, by someone
other than Tenant (except the existing tenants of the 13th floor pursuant to the
Existing Leases).
c. The filing at any time after the date of execution of this
Lease and prior to the expiration or termination of this Lease, against Tenant
in any court pursuant to any statute, either of the United States or of any
state, of a petition in bankruptcy or insolvency or for reorganization or for
the appointment of a receiver or trustee of all or any portion of Tenant's
property, which petition is not dismissed or discharged within thirty (30) days
after filing.
d. The filing by Tenant of a petition in bankruptcy or insolvency
or for reorganization or for the appointment of a receiver or trustee, or the
making of an assignment for the benefit of creditors or entering into any
agreement for the relief of debtors.
e. Tenant's abandonment of the Premises or any substantial
portion thereof.
14.02 The word "abandonment" as used in this Section 14 shall mean and
include any one or more of the following events or occurrences:
a. The relinquishment by Tenant of its right to possession of the
Premises or any substantial portion thereof.
b. The cessation by Tenant of the conduct in the entire Premises,
or any substantial portion thereof, of the business to be carried on by Tenant
in the Premises for a
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period of more than sixty (60) consecutive business days without Tenant's
performing its maintenance and repair and security obligations pursuant to this
Lease.
c. The removal by Tenant of all or a substantial portion of its
personal property and trade fixtures from the Premises without replacing the
same, where the effect of such removal, in Landlord's reasonable judgment,
indicates that the Tenant intends to cease the conduct in the Premises of the
business to be carried on by Tenant in the Premises.
14.03 In the event of the occurrence of any one or more of the events of
default specified in Section 14.01 by Tenant or an abandonment of the Premises
or any substantial part of the Premises, Landlord may at its election treat such
default in the manner provided in Section 14.04 or, without notice to Tenant,
elect to allow this Lease to continue in full force and effect without
terminating Tenant's rights to possession of the Premises and to enforce all of
Landlord's rights and remedies under this Lease, including without limitation
the right to recover rent as it becomes due. Acts of maintenance, preservation
or efforts to lease the Premises or the appointment of a receiver upon
application of Landlord to protect Landlord's interest under the Lease shall not
constitute an election to terminate Tenant's right to possession.
14.04 In the event of the occurrence of any one or more of the events of
default by Tenant specified in Section 14.01, and except as provided in Section
14.05 below, Landlord may at any time thereafter, even if Landlord shall elect
to continue this Lease under Section 14.03 above, serve a three (3) day written
notice upon Tenant, with respect to defaults in the payment of rent or other
monetary charges, or a fifteen (15) day written notice with respect to any other
default, specifying the nature of such default. Upon the expiration of the three
(3) days or fifteen (15) days, as the case may be, if Tenant shall have failed
to remedy such default (provided that if such default is of a non-monetary
nature and cannot be cured within such fifteen (15) day period, Tenant shall not
be in default hereunder so long as Tenant has commenced such cure within said
fifteen (15) day period, is proceeding diligently to cure the same and completes
such cure within forty five (45) days), then Landlord may serve upon Tenant a
written three (3) day notice to vacate the Premises, and upon the expiration of
such three (3) days this Lease shall terminate and Tenant shall peaceably quit,
vacate and return the Premises to Landlord. Such notices shall be in lieu of,
and not in addition to, any notices required by law.
14.05 Notwithstanding any notice provisions or any other provisions of
this Section 14, this Lease, at the election of Landlord, shall terminate
immediately upon the occurrence of any event or events specified in Section
14.01(d).
14.06 Upon the termination of this Lease for default as provided under
Section 14.04 and 14.05, Landlord may, without notice to Tenant, re-enter the
Premises, either by force or otherwise and with process of law and without any
liability for damages therefor, and dispossess Tenant or the legal
representative of Tenant or other occupant of the Premises by summary
proceedings or otherwise, and remove and store, at Tenant's cost, their personal
property, trade fixtures and other effects, and hold the Premises as if this
Lease had not been made, but Tenant shall remain liable as hereinafter provided,
and Tenant waives any and all rights of redemption
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or re-entry or repossession or to restore the operation of this Lease. Upon the
termination of this Lease under Section 14.04 or 14.05, Tenant shall immediately
become liable to and shall pay to Landlord an amount equal to the combined total
of the following:
a. Any and all amounts due to Landlord by reason of the breach of
any of the terms, covenants or conditions of this Lease other than the payment
of rent; and
b. The unpaid rent earned to the date of termination of this
Lease, with interest thereon at fifteen percent (15%) per annum from the date
the same became due, or such lesser maximum rate allowed by law; and
c. The unpaid rent which would have been due between the date of
termination and the date of payment by Tenant of all sums due under this Section
14.06 or the date of an award of judgment, whichever occurs earlier, with
interest thereon at fifteen percent (15%) per annum from the date the same
became due or such lesser maximum rate allowed by law; and
d. The rent which would have been due between the date of payment
of all sums due under this Section 14.06 or the date of an award of judgment,
whichever occurs earlier, and the date upon which this Lease would have expired
in accordance with its terms, discounted at the discount rate of the Federal
Reserve Bank of San Francisco at the time of such payment of judgment award plus
one percent (1%) or at the lowest discount rate permitted under applicable law;
and
e. Any and all costs and expenses which Landlord may have
reasonably incurred as the result of Tenant's breach of this Lease, including
costs and expenses of attempting to relet or actually reletting the Premises or
any portion thereof including, without limitation, legal expenses, attorneys'
fees, real estate brokerage fees and the reasonable costs of alterations and
repairs to the Premises made in connection with the reletting of the Premises.
14.07 Upon termination of this Lease for default as provided under
Sections 14.04 and 14.05, Landlord shall immediately have the right to relet or
attempt to relet the Premises or any portion thereof for a term or terms which
may at Landlord's option be less than or exceed the period which would otherwise
have constituted the balance of the term of this Lease and may grant concessions
or free rent for a reasonable period or periods for the purpose of inducing such
reletting. If Landlord is successful in reletting the Premises or any portion of
the Premises prior to the payment by Tenant to Landlord of the amounts set forth
in Section 14.06 or prior to an award of judgment for such amounts, the amounts
owing under subsections (b), (c) and (d) of Section 14.06 shall be reduced by
the amount which the rental under the new lease reduces Landlord's rental loss
arising by virtue of the termination of this Lease.
14.08 Landlord shall not be deemed to be in default in the performance
of any obligation required to be performed by it hereunder unless and until it
has failed to perform such obligation within thirty (30) days after written
notice by Tenant to Landlord specifying wherein
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Landlord has failed to perform such obligation; provided, however, that if the
nature of Landlord's obligation is such that more than thirty (30) days are
required for its performance, then Landlord shall not be deemed to be in default
if it shall commence such performance within such thirty (30) day period and
thereafter shall prosecute the same to completion. All rights to cure provided
to Landlord under this Section shall also be accorded to any mortgagee under any
mortgage or deed of trust securing the Building. Tenant shall give prompt notice
to Landlord in case of fire or accidents in the Premises or in the Building or
of defects therein or in fixtures or equipment.
15. ASSIGNMENT AND SUBLETTING
15.01 Tenant shall not directly or indirectly, voluntarily or by
operation of law sell, assign, encumber, pledge or otherwise transfer or
hypothecate all or any part of the Premises or Tenant's leasehold estate
(collectively "Assignment"), or permit the Premises to be occupied by anyone
other than Tenant or sublet the Premises or any portion of the Premises
(collectively "Sublease") without Landlord's prior written consent (which
consent shall not be unreasonably be withheld, conditioned or delayed) in each
instance. The consent of Landlord shall be subject to the qualification and
limitation that the Assignment or Sublease be effectuated without any additional
cost to Landlord, and that any and all expenses that accrue as a result of the
permissible Assignment or Sublease, including but not limited to legal costs, be
borne jointly and severally by Tenant and the assignee or sublessee.
15.02 Upon notice to Landlord, Tenant may assign this Lease or sublet
any portion of the Premises without Landlord's consent to any of the following,
provided that such notice includes evidence demonstrating, to Landlord's
reasonable satisfaction, that such entity has a net worth equal to or greater
than the lesser of the net worth of Tenant as of the date of this Lease or as of
the date immediately prior to such transfer: (i) any corporation which controls,
is controlled by or under common control with Tenant; (ii) any corporation
resulting from the merger or consolidation of Tenant; (iii) any person or entity
which acquires all of the assets of Tenant as a going concern of the business
that is being conducted on the Premises (collectively, an "Affiliate"), provided
that: (a) such assignee assumes in full the obligations of Tenant under the
Lease, and (b) if the net worth of the new entity is less than the net worth of
Tenant as of the date of this Lease, and the Letter of Credit has been reduced
pursuant to the terms of Section 4.02 above, Tenant shall increase the amount of
the Letter of Credit so that the total amount of such Letter of Credit shall be
equal to the total of the next twelve (12) months Rent thereafter due hereunder
and the remaining amount of brokerage commissions and Tenant Improvement
Allowances that have not been previously deducted from face amount of the Letter
of Credit. Such increased Letter of Credit shall be subject to the
Commissions/TI Reduction, the Asset/Liability Reduction, and the Profits/Base
Rent Reduction on the terms provided in Section 4.02.
15.03 If Tenant desires at any time to enter into an Assignment of this
Lease or a Sublease of the Premises, Tenant shall first give written notice to
Landlord of its desire to do so. The notice shall contain (a) the name of the
proposed assignee, subtenant or occupant, (b) the
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nature of the proposed assignee's, subtenant's or occupant's business to be
carried on in the Premises, (c) the terms and provisions of the proposed
Assignment or Sublease, including the space affected and the date Tenant intends
to assign or sublet the space, and a copy of the proposed documentation, and (d)
any financial, operations or other information Landlord may reasonably request
concerning the proposed assignee, subtenant or occupant.
15.04 Landlord shall then have a fifteen (15) business day period
following receipt of the notice within which to elect to (i) terminate the Lease
as to the space Tenant proposed to assign or sublet on the date specified in the
notice (except that Landlord shall have no such recapture right with respect to
sublettings, for a period of two (2) years or less, of up to one half of either
the entire 12th floor, or the entire 14th floor or the entire 15th floor, or
sublettings of all or any portion of the 13th floor, provided that if Tenant
sublets one half or more of the 13th floor, Tenant shall no longer have the
right as provided in this Section 15.04 to sublet up to one half of each of the
other floors of the Premises without Landlord's recapture rights), in which
event Tenant will be relieved of all further obligations under this Lease, or
(ii) to permit Tenant to assign or sublease the space on the terms stated in its
written notice, subject, however, to prior written approval of the proposed
tenant by Landlord, or (iii) disapprove the Sublease or Assignment. If Landlord
fails to notify Tenant in writing within the fifteen (15) business day period,
Landlord shall be deemed to have waived the option to terminate this Lease, but
written approval of the proposed tenant by Landlord shall be required. Landlord
shall be entitled to condition consent in any reasonable manner not inconsistent
with this Lease. Failure by Landlord to approve a proposed tenant shall not
cause a termination of this Lease.
15.05 Except as otherwise provided herein, all rents or other
considerations realized by Tenant under any Assignment or Sublease, in excess of
the rent and other sums payable by Tenant under this Lease, shall be divided and
paid 50% to Landlord and 50% to Tenant, after Tenant has recovered from such
excess rent the cost, if due and payable, of brokerage fees incurred by Tenant
in connection with the Assignment or Sublease and the cost amortized over the
Assignment or Sublease term of any specific improvements made by Tenant to
accommodate the proposed tenant. Notwithstanding the foregoing, the Tenant may
retain any net profit realized under any short-term Sublease which covers not
more than one half of the 12th floor, one half of the 14th floor or one half of
the 15th floor of the Premises, or all or any portion of the 13th floor of the
Premises provided that if Tenant sublets one half or more of the 13th floor,
Tenant shall no longer have the right as provided in this Section 15.05 to
sublet up to one half of each of the other floors of the Premises without
Landlord's rights to excess rent as provided in this Section 15.05. The phrase
"short-term Sublease" for the purposes of the previous sentence shall be defined
as a Sublease with a term of two (2) years or less.
15.06 No consent by Landlord to any Assignment or Sublease by Tenant
shall relieve Tenant of any obligation to be performed by Tenant under this
Lease. The consent by Landlord to any Assignment or Sublease shall not relieve
Tenant from the obligation to obtain Landlord's express written consent to any
other Assignment or Sublease. Any Assignment or Sublease which is not in
compliance with this Section 15 shall be void and, at the option of Landlord,
shall constitute a default by Tenant under this Lease. The acceptance of rent by
Landlord from a
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proposed assignee or sublessee shall not constitute consent to such Assignment
or Sublease by Landlord.
15.07 Except for transfers permitted pursuant to Section 15.02 of this
Lease, any sale or other transfer, including by consolidation, merger or
reorganization, of a majority of the voting stock of Tenant, if Tenant is a
corporation, or any sale or other transfer of a majority of the partnership
interests in Tenant, if Tenant is a partnership, shall be an Assignment for
purposes of this Section 15.
15.08 Tenant hereby irrevocably assigns to Landlord, as security for
Tenant's obligations under this Lease, all rent from any subletting of all or
part of the Premises as permitted by this Lease, and Landlord, as assignee and
as attorney in fact for Tenant, may collect such rent, and apply it toward
Tenant's obligations under this Lease; except that, until the occurrence of an
act of default by Tenant, Tenant shall have the right to collect the rent.
16. SURRENDER OF PREMISES
Upon any re-entry by Landlord, either upon the expiration or other
termination of the term of this Lease or otherwise, Tenant shall quit and
surrender to Landlord the Premises in good order and condition, reasonable use
and wear thereof and damage by Casualty, as defined in Section 11, act of God or
the elements excepted, and repairs for which Landlord is responsible under this
Lease excepted, and Tenant shall remove all of its personal property, trade
fixtures and improvements (to the extent required under Section 8). Tenant's
obligations to observe or perform this covenant, and any other obligations of
Tenant under this Lease which by reasonable implication are intended to survive,
shall survive the expiration or other termination of the term of this Lease.
17. TRANSFERS BY LANDLORD
17.01 Landlord shall have the right to transfer and assign, in whole or
in part, all of its rights and obligations under this Lease and in the Building.
If Landlord's transferee assumes Landlord's obligations under this Lease, all
covenants of Landlord contained in this Lease shall be binding upon Landlord
only with respect to breaches occurring during its ownership of Landlord's
interest under this Lease.
17.02 Tenant agrees that this Lease is and shall be subject and
subordinate to all ground leases, mortgages, deeds of trust, or any other
encumbrances now placed or which may be placed in the future upon the Building
or real property on which the Building is located (the "Superior Interests"),
and Tenant further agrees that within ten (10) days after being requested in
writing to do so by Landlord, or the lessors under any said ground lease, Tenant
will execute, sign, acknowledge and deliver any documents required to effectuate
such subordination and attornment. Should Tenant fail to execute, acknowledge
and deliver such instruments within ten (10) days after such written request,
Tenant hereby appoints Landlord and the lessors under any ground lease, and each
of their successors and assigns, as Tenant's attorney in fact irrevocably to
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execute, acknowledge and deliver any such instrument or instruments for and on
behalf of Tenant.
17.03 In addition to and not in derogation of the subordination set
forth above, in the event of the termination of any ground lease or in the event
of the institution of any foreclosure proceedings, Tenant agrees, upon request
of the ground lessor, the mortgagee, the trustee or any purchaser at foreclosure
sale, as the case may be, (1) to attorn and pay rent and to execute and deliver
any instruments necessary or appropriate to evidence or effectuate such
attornment or (2) to execute a new lease with such ground lessor, mortgagee,
trustee or purchaser as Landlord for the remainder of the term upon the same
terms and conditions as set forth herein. In the event the mortgagee, trustee or
ground lessor shall elect to have this Lease prior to the lien of its mortgage,
deed of trust or ground lease, and shall give written notice thereof to Tenant,
this Lease shall be deemed prior to such mortgage, deed of trust or ground
lease.
17.04 Tenant agrees that no entry under any such mortgage, deed of trust
or sale for the purpose of foreclosing the same shall be regarded as an eviction
of the Tenant, constructive or otherwise, or give the Tenant any right to
terminate this Lease, whether it attorns or becomes tenant of the ground lessor,
mortgagee, trustee or purchaser or not. Nothing contained in the foregoing or in
any such documents evidencing Tenant's right to continue in possession as tenant
shall, however, affect the prior rights of the holder of any mortgage or deed of
trust with respect to the proceeds of any award in condemnation or of any fire
or casualty insurance policies affecting the Building, or impose upon any such
holder any liability (i) for the erection or completion of the Building, or (ii)
in the event of damage or destruction to the Building or to the Premises by fire
or other casualty, for any repairs, replacements, rebuilding or restoration, or
(iii) for any default by Landlord under this Lease occurring prior to any date
upon which such holder shall become Tenant's Landlord, or (iv) for any credits,
offsets or claims against the rent under this Lease as a result of any acts or
omissions of Landlord committed or omitted prior to such date.
18. TENANT IMPROVEMENTS
18.01 Tenant Improvements. Before the Commencement Date, Landlord shall
use its best efforts to construct the Premises and perform the work and make the
installations in the Premises, substantially in accordance with complete working
drawing and the plans and specifications provided by Tenant's architect and
Tenant's engineers and approved by Landlord ("Approved Plans") and with those
provisions of the attached Exhibit B that describe construction, at least two
(2) copies of which shall have been initialed as of the date of this Lease by
the duly authorized representatives of Landlord and Tenant. Said work and the
resulting installations are referred to in this Lease as the "Tenant
Improvements" and Exhibit B is referred to herein as the "Work Letter."
18.02 Tenant Improvement Allowance. Landlord shall provide to Tenant a
tenant improvement allowance of Twelve Dollars ($12.00) per rentable square foot
of the Premises, towards the actual costs incurred by Tenant (including
demolition costs and Landlord's oversight
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fees described in Section 18.04 below) for the Tenant Improvements on the terms
and conditions provided for in the Work Letter. Notwithstanding the foregoing,
Tenant, upon its election, may apply the applicable Tenant Improvement Allowance
allotted for the 13th floor on that particular floor or any other floor
comprising the Premises, provided Tenant shall deliver written notice of such
election to Landlord prior to the date on which the construction of such tenant
improvement commences. The allowance provided by Landlord under this Section
18.02(a) comprise the "Tenant Improvement Allowance." The Tenant Improvement
Allowance may be applied to the costs of outside consultants, including
architects, engaged by Tenant to analyze its space needs and to assist in the
design, preparation of space plans and construction documents, Tenant's move and
the costs of obtaining permits or other necessary approvals. If the costs for
Tenant Improvements exceed the Tenant Improvement Allowance, Tenant shall pay
all excess costs. Notwithstanding anything to the contrary herein, Landlord
shall have no obligation to fund the Tenant Improvement Allowance unless and
until Tenant has delivered to Landlord the Letter of Credit required herein.
18.03 Landlord Improvements. Landlord shall, at Landlord's sole expense
(i) make restrooms on Floors 12, 13, 14, and 15 of the Premises compliant , in
its reasonable discretion, with the Americans with Disabilities Act (ADA); (ii)
remove any asbestos within the Premises; (iii) replace all 1' x 4' fluorescent
light lenses within the Premises with building standard parabolic lenses used in
the Building, (iv) replace any non-electronic ballasts with electronic ballasts
throughout the Premises, and (v) install sprinkler loops (but not sprinkler
distribution systems), if not previously installed and required by any
governmental agency with applicable jurisdiction, for each of the floors of the
Premises. Landlord shall have no obligation to commence such work until Tenant
has delivered to Landlord the Letter of Credit required herein.
18.04 Landlord Services. Landlord will provide management oversight
services for the Tenant Improvements, up to a maximum of eighty (80) hours. Any
management oversight time in excess of eighty (80) hours will be deducted from
the Tenant Improvement Allowance at the rate of Seventy Five Dollars ($75.00)
per hour. In addition, space planning and architectural services provided by
Landlord or its contractors shall be deducted from the Tenant Improvement
Allowance.
19. STOCK INVESTMENT
19.01 Tenant may elect to buy down or reduce the Base Rent by an amount
up to $0.25 per square foot of the Premises (which amount shall be increased by
3.5% following each anniversary of the Commencement Date) by granting Landlord
secondary stock offering rights in Tenant, on terms mutually agreed to in
writing by Landlord and Tenant (the "Stock Investment"). The parties acknowledge
that the terms and form of agreement with respect to the Stock Investment must
be approved by the Boards of Directors of each party.
20. RIGHT OF FIRST OFFER
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20.01 Right of First Offer. Throughout the Term of this Lease, Tenant
shall have a right of first offer to lease any adjacent space in the mid-rise
elevator bank of the Building on floors eleven (11), sixteen (16), seventeen
(17) and eighteen (18) as it becomes available (the "Expansion Space"), subject
to those rights held by other tenants or subtenants of the Building as of the
date of this Lease and identified on Schedule 2 attached hereto, on the terms
hereinafter provided.
20.02 Terms of Right of First Offer. Upon Landlord's determination that
the Expansion Space is available to lease, prior to offering such Expansion
Space for lease (except as may otherwise be required pursuant to rights held by
other tenants or subtenants of the Building as of the date of this Lease and
identified on Schedule 2 attached hereto), Landlord shall deliver written notice
to Tenant, setting forth the specifications of the Expansion Space. Tenant shall
then have a period of ten (10) business days from receipt of such written notice
to exercise its rights to such Expansion Space upon the terms of this Section
20. If Tenant shall fail to exercise such option within such ten (10) day time
period, then, subject to Section 20.03 below, Landlord shall be free to lease
the Expansion Space in question to other third party tenants. The rent for the
Expansion Space contained in such offer shall be at the then current prevailing
market rates for similar size class A space in the downtown Oakland area,
provided, however, in no event shall rent be less than the Rent payable under
this Lease, the Base Year shall be the first year of the term for such Expansion
Space and the term for such Expansion Space shall be coterminous with the Term
of this Lease, including Extension Periods, for up to two (2) additional floors.
If Tenant elects to exercise its rights to lease the Expansion Space, Landlord
shall deliver to Tenant a lease amendment incorporating the terms of such
tenancy, executed by Landlord. Within ten (10) days thereafter, Tenant shall
accept such offer.
20.03 Survival of Expansion Option. Notwithstanding anything herein to
the contrary, so long as Tenant is not then in default hereunder, in no event
shall Tenant's failure to exercise Tenant's rights to any Expansion Space
hereunder terminate: (i) Tenant's right to any other Expansion Space which might
become available during the Term of the Lease, (ii) Tenant's right to the
Expansion Space specified in Landlord's previous notice should it become
available for lease again during the Term of this Lease, or (iii) Tenant's right
to the Expansion Space specified in Landlord's previous notice should it not be
leased within one hundred eighty (180) days after the date Tenant failed to
exercise its options hereunder.
21. GENERAL PROVISIONS
21.01 Binding Effect. This Lease and the covenants and conditions herein
contained shall be binding upon and shall inure to the benefit of and shall
apply to the successors and assigns of Landlord and to the permitted successors
and assigns of Tenant.
21.02 Notices. All notices, demands, or other writings to be given,
made, or sent hereunder, or which may be so given or made or sent by any party
to the other, shall be deemed to have been fully given, made, or sent when made
in writing and deposited in the United States Mail, postage prepaid, and
addressed to the respective parties as specified below. The address to
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which any notice, demand or other writing may be given, made or sent to any
party may be changed upon written notice given by such party reasonably in
advance as above provided.
To Landlord: with a copy to:
Kaiser Center, Inc. Kaiser Aluminum & Chemical Corporation
300 Lakeside Drive, Suite 130 General Counsel
Oakland, California 94612 5847 San Felipe, Suite 2600
Houston, Texas 77057
To Tenant:
Prior to the Commencement Date:
Versata, Inc.
2101 Webster Street, Suite 800
Oakland, California 94612
Attention: Chief Financial Officer
Attention: Mr. Cliff Rogers, Senior
Facilities Manager
After the Commencement Date:
The Premises
with a copy to:
Brobeck, Phleger & Harrison LLP
One Market
Spear Street Tower
San Francisco, California 94105
Attention: Douglas G. Van Gessel
21.03 The waiver by Landlord or Tenant of any breach of any term,
covenant or condition herein contained shall not be deemed to be a waiver of
such term, covenant or condition or any subsequent breach of the same or any
other term, covenant or condition herein contained. The subsequent acceptance of
rent hereunder by Landlord shall not be deemed to be a waiver of any preceding
breach by Tenant of any term, covenant or condition of this Lease, other than
the failure of Tenant to pay the particular rent so accepted, regardless of
Landlord's knowledge of such preceding breach at the time of acceptance of such
rent.
21.04 Time. Time is hereby expressly declared to be of the essence of
each and every covenant, term, condition and provision of this Lease which
relates to a date or period of time, except delivery of the Premises.
21.05 Remedies. The remedies in this Lease given to Landlord shall be
cumulative and are given without impairing any other rights or remedies given
Landlord by any statute or law
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now existing or hereinafter enacted. The exercise of any one remedy by Landlord
shall not exclude the exercise of any other remedy.
21.06 Interpretation. The language in all parts of this Lease shall in
all respects be construed as a whole according to its fair meaning, and not
strictly for or against Landlord or Tenant. The section headings in this Lease
are for convenience only and are not to be construed as a part of this Lease or
in any way limiting or amplifying the provisions of this Lease.
21.07 Severability. If any term or provision of this Lease or the
application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Lease, or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each
term and provision of this Lease shall be valid and be enforced to the fullest
extent permitted by law.
21.08 Holdover. If, with the express or implied consent of Landlord,
Tenant holds possession of the Premises after the expiration of the term of this
Lease, then such possession by Tenant shall be construed as a tenancy from month
to month, upon the terms herein specified but at a monthly rental equivalent to
one hundred sixty percent (160%) of the Base Rent payable by Tenant at the
expiration of the term of this Lease, payable in advance on or before the first
day of each month. Any such tenancy from month to month shall continue until
terminated by the Landlord or Tenant by the giving of at least thirty (30) days'
prior written notice of such termination to the other party. Tenant shall be
liable for all damages, consequential as well as direct, caused by such holding
over.
21.09 Master Landlord Consent. If this Lease has a term (including any
optional renewal periods) of five (5) years or more and an annual base rent
equal to or in excess of TWENTY-FIVE THOUSAND DOLLARS ($25,000), this Lease may
not be amended, modified or terminated (except in accordance with its terms)
without the prior written consent of the landlord under the Master Lease
referred to on page 1 of this Lease and the Mortgage Lender (as defined in such
Master Lease), and any such attempted amendment, modification or termination
(except in accordance with its terms) without such consent shall be null and
void, nor shall Tenant prepay or Landlord accept the payment of rent for more
than sixty (60) days in advance of its due date.
21.10 Attorneys' Fees. In any action or proceeding which Landlord or
Tenant brings to enforce its respective rights hereunder or to enforce any
judgment granted in connection therewith, the unsuccessful party shall pay all
costs incurred by the prevailing party (whether or not the action or proceeding
is pursued to judgment), including reasonable attorneys' fees.
21.11 Waivers. The parties hereto shall and they hereby do waive trial
by jury in any action, proceeding or counterclaim brought by either of the
parties hereto against the other on any matters whatsoever arising out of or in
any way connected with this Lease, the relationship of Landlord and Tenant,
Tenant's use or occupancy of the Premises and any claim of injury or damage, or
both. In the event Landlord commences any proceedings for nonpayment of rent,
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Tenant will not interpose any counterclaim of whatever nature or description in
any such proceedings. This shall not, however, be construed as a waiver of the
Tenant's right to assert such claims in any separate action or actions brought
by the Tenant.
21.12 Landlord Management. The liability of Management (which, for the
purposes of this Lease, shall include Landlord and the owner of the Building if
other than Landlord) to Tenant for any default by Landlord under the terms of
this Lease shall be limited to the interest of Management and its present or
future partners in the Building and Tenant agrees to look solely to Management
or Management's present or future partners' interest in the Building, for the
recovery of any judgment from Management, it being intended that Management
shall not be personally liable for any judgment or deficiency.
21.13 Integration. This Lease contains all the terms, covenants,
conditions and agreements between Landlord and Tenant relating in any manner to
the rental, use and occupancy of the Premises. No prior or other agreement or
understanding pertaining to the same shall be valid or of any force and effect;
and the terms, covenants and conditions of this Lease cannot be altered,
changed, modified or added to, except in writing signed by Landlord and Tenant.
No representation, inducements, understanding or anything of any nature
whatsoever, made, stated or represented by Landlord or anyone acting for on
Landlord's behalf, either orally or in writing, have induced Tenant to enter
this Lease, and Tenant acknowledges, represents and warrants that Tenant has
entered into this Lease under and by virtue of Tenant's own independent
investigation.
21.14 Parking. During the Term, Tenant shall have the right to enter
into month-to-month parking space contracts with Landlord for up to one Hundred
(100) parking spaces in the Building garage ("Base Parking Spaces"), on a
reserved or unreserved basis, at Landlord's applicable monthly parking rates in
effect from time to time. Fifty (50) additional parking spaces ("Additional
Parking Spaces"), if available, shall be made available to Tenant to contract
for at applicable monthly parking rates in effect from time to time on the
following terms. If Tenant fails to contract for any of the Additional Parking
Spaces, or has contracted for but not used any of the Additional Parking Spaces
for two (2) consecutive months, then Landlord may notify Tenant thereof after
January 1, 2002. In the event that within the next thirty (30) days Tenant fails
to use or contract for such Additional Parking Spaces, then Tenant's rights to
contract for or use such Additional Parking Spaces shall terminate. Tenant may
thereafter elect to terminate the Additional Parking Spaces by providing written
notice to Landlord, at least thirty (30) days prior to the date of such
termination, which termination date must occur upon a month end. Tenant shall
have the right to utilize the parking spaces contracted for hereunder upon terms
and conditions as favorable as terms and conditions from time to time enjoyed by
the general public. To the extent Tenant contracts for such spaces, Tenant shall
be billed monthly, in advance, for parking at the monthly rates in effect from
time to time for the Base Parking Spaces and Additional Parking Spaces, as
applicable, and such amounts shall constitute Additional Rent under this Lease.
Notwithstanding anything herein to the contrary, the option to lease parking
spaces herein granted to Tenant may be terminated by Landlord with respect to
any or all of the parking spaces upon the material failure of Tenant or any
person to whom Tenant
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has assigned any of the parking spaces to comply with any reasonable rule or
regulation for the operation of the parking facilities or upon the material
failure of Tenant or any person to whom Tenant has assigned any parking space to
perform the obligations under any applicable parking agreement. Tenant shall
designate from time to time as requested by Landlord the names of persons to
whom Tenant has assigned the parking spaces. If any person to whom Tenant has
assigned a parking space violates any reasonable rule for the operation of the
parking facilities, Landlord may bar such person from future use of the parking
facilities after reasonable notice.
21.15 Estoppel Certificate. This Lease shall at the option of Landlord
be subject to and subordinate to the lien of any and all mortgages or deeds of
trust now or that may at any time hereafter be placed on the Building, the land
on which it is located, or the leasehold estate therein, and to any agreements
at anytime modifying or supplementing such mortgages or deeds of trust. Within
ten (10) business days following any written request which Landlord may make
from time to time, Tenant shall execute and deliver to Landlord a certificate
substantially in the form attached hereto as Exhibit E and made a part hereof,
indicating thereon any exceptions thereto which may exist at that time. Failure
by Tenant to execute and deliver such certificate shall constitute an acceptance
of the Premises and acknowledgment by Tenant that the statements included in
Exhibit E are true and correct without exception. Landlord and Tenant intend
that any statement delivered pursuant to this paragraph may be relied upon by
any mortgagee, beneficiary, purchaser or prospective purchaser of the Building
or any interest therein. Landlord shall have the right to substitute for the
attached Exhibit E a certificate in form required by Landlord's mortgagee or
provider of financing or purchaser. Landlord may charge Tenant the amount of One
Hundred Dollars ($100.00) per day for each day that Tenant fails to provide such
certificate after the ten (10) day period described herein. Alternatively,
Landlord may by written notice to Tenant after the expiration of such ten (10)
day period, declare Tenant in default of this Lease.
21.16 Commissions.
a. Commission Payment. Upon execution of this Lease, Landlord
shall pay AEGIS Realty Partners (Broker #2) a commission pursuant to a separate
agreement between such parties, and the parties are informed that Broker #2
shall thereupon pay C.B. Richard Ellis, Inc. (Broker #1) a commission equal to
$4.00 per square foot. Landlord and Tenant acknowledge that C.B. Richard Ellis,
Inc. (Broker #1) is the exclusive real estate broker for Tenant and that AEGIS
Realty Partners (Broker #2) is the exclusive real estate broker for Landlord.
(Broker #1 and Broker #2 are collectively referred to herein "Broker"). Landlord
and Tenant agree that all commissions due to Broker in connection with this
Lease shall be paid pursuant to separate agreements.
b. Warranties. Landlord hereby represents and warrants to Tenant
and Tenant hereby represents and warrants to Landlord that no real estate broker
or finder other than Broker #1, in the case of Tenant, and Broker #2, in the
case of Landlord, has been engaged in connection with the transaction
contemplated by this Agreement and that no real estate broker's commissions or
finder's fees except the commissions referenced in the section above are payable
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in connection herewith. Landlord and Tenant agree that the foregoing warranties
shall inure to the benefit of the successors and assigns of Landlord and Tenant.
Landlord and Tenant further agree to give testimony in accordance with these
warranties in case any action or proceeding shall be instituted by any purported
broker or finder, licensed or otherwise, in connection with this transaction.
c. Indemnifications. Any party breaching the foregoing warranties
agrees to indemnify and hold the other parties harmless from any claim, suit,
damage, cause of action, cost or expense, including attorneys' fees, incurred as
a result thereof.
NOW THEREFORE, the parties have executed this Lease as of the day and
year first above written.
LANDLORD:
KAISER ALUMINUM & CHEMICAL CORPORATION
By KAISER CENTER, INC., Its Agent
--------------------------------------
By: Robert B. Burke
Its: Vice President
TENANT:
VERSATA, INC.
--------------------------------------
By: Kevin B. Ferrell
Its: Chief Financial Officer
ATTACHMENTS:
Exhibit A - Description of Premises
Exhibit B - Work Letter
Exhibit C - Letter of Credit
Exhibit D - Rules and Regulations
Exhibit E - Tenant Estoppel Certificate
EXHIBIT A
DESCRIPTION OF PREMISES
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EXHIBIT B
WORK LETTER
This Agreement ("Work Letter") is entered into as of April 10, 2000.
This is the Work Letter referenced in Section 2 of the lease between KAISER
CENTER, INC., as agent for KAISER ALUMINUM & CHEMICAL CORPORATION ("Landlord")
and VERSATA INC. ("Tenant") dated as of April 10, 2000 (the "Lease").
1. Tenant's Work. Tenant desires to make certain tenant improvements to
the Premises, referred to herein as "Tenant's Work."
2. Plan Preparation, Review and Approval. Plans for any proposed
improvements to the Premises shall be submitted, reviewed and approved by
Landlord, whose consent shall not be unreasonably withheld or delayed. After the
final plans are approved by Landlord, any further changes or change orders
during construction ("Minor Changes") shall be submitted by Tenant to Landlord
for review with appropriate plans to describe the nature of the change. Landlord
will review any Minor Changes and provide Tenant with any requested changes
within five (5) days after receipt by Landlord. The final plans, together with
any Minor Changes that have been approved by Landlord, are referred to herein as
the "Approved Plans."
3. Construction of Tenant's Work. Tenant will diligently construct and
install the Tenant's Work in a good and proper manner, free from defects in
design, materials, and workmanship, and in strict compliance with the Approved
Plans. No material deviations from or material changes to the Approved Plans
will be made except with the written consent of Landlord. All electrical and
mechanical work shall be performed by Red Top Electric and Linford Services. All
contractor(s) employed by Tenant and any subcontractors shall be duly licensed
in California and shall be subject to Landlord's prior written approval.
4. Close-Out Documentation. Upon the completion of Tenant's Work, Tenant
shall furnish to Landlord the following documentation ("Close-Out
Documentation"): (1) complete as-built drawings of Tenant's Work from all
trades, in the form of one set of reproducible drawings, one set of prints, and
an electronic version on floppy discs in AutoCAD R13 format; (2) air balancing
reports on the HVAC system; (3) copies of all permits issued in connection with
Tenant's Work and copies of all finalized permit inspection cards; (4) copies of
any required certificate of occupancy from the City of Oakland for the Building
Premises; (5) an Unconditional Waiver And Release Upon Final Payment in
accordance with California Civil Code Section 3262, executed by each and every
contractor, subcontractor and materialman concerned with Tenant's Work,
including but not limited to each entity or person who has served a Preliminary
20-day Notice in connection with Tenant's Work; (6) releases for any and all
mechanics' liens filed by contractors, subcontractors and materialmen concerned
with Tenant's Work; (7) appropriate documentation of the actual amounts paid or
incurred by Tenant for the completion of Tenant's Work for which Tenant is
seeking reimbursement from Landlord,
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including invoices submitted by the contractors performing Tenant's Work; and
(8) such other customary project close-out documentation as Landlord may
reasonably require.
5. Tenant Improvement Allowance. The Tenant Improvement Allowance will
be provided and may be applied in accordance with Section 18 of the Lease during
the course of construction of the tenant improvements, provided that Tenant
complies with the payment procedures of Section 6 below. Other than as
specifically provided in the Lease, no disbursements from the Tenant Improvement
Allowance will be made to reimburse Tenant for anything other than the actual
cost to Tenant of work performed by a licensed contractor, licensed
subcontractor, or third party supplier of equipment or materials, furnishing
work, equipment or materials for fixed improvements to the Premises. Because
Tenant is not a licensed contractor and Tenant is required to employ only
licensed contractors for the performance of Tenant's Work, no disbursements from
the Tenant Improvement Allowance will be made on account of work by Tenant's own
employees (other than as specifically provided in Section 18.2 of the Lease),
nor for Tenant's administrative costs, supervision costs, overhead or markup.
6. Payment Procedures. Except as otherwise provided herein, the Tenant
Improvement Allowance will be paid directly by Landlord to Tenant (less a 10%
retention fee as provided below) within seven (7) days after Landlord's receipt
of (1) an Unconditional Waiver and Release Upon Final Payment in accordance with
California Civil Code Section 3262, executed by each and every contractor,
subcontractor and materialman, including but not limited to each entity or
person who has served a Preliminary 20-day Notice in connection with Tenant's
Work, and (2) releases for any and all mechanic's liens filed in connection with
Tenant's Work. Landlord shall withhold 10% of each payment request (the
aggregate amount of such retention fees shall be defined herein as the "Final
Retention Payment") submitted by Tenant in connection with the Tenant's Work
until all Close-Out Documentation is received pursuant to Section 4 of this Work
Letter. Following Landlord's receipt of all Close-Out Documentation, Landlord
shall deliver a check to Tenant equal to the amount of the Final Retention
Payment. To the extent the total cost of Tenant's Work exceeds the Tenant
Improvement Allowance, Tenant shall be responsible for all costs over and above
the Tenant Improvement Allowance needed to complete Tenant's Work in full
compliance with the Approved Plans, this Work Letter, and the conditions of all
permits, licenses, and approvals applicable to Tenant's Work. Notwithstanding
anything to the contrary herein, if Landlord shall act as agent for Tenant in
preparing the Tenant's Work, Landlord shall pay the Tenant Improvement Allowance
to the applicable contractor in draw requests, subject to the need for the
documentation described above. Once that Tenant Improvement Allowance has been
paid in its entirety, Tenant shall pay the remaining cost of the Tenant's Work
to such contractor.
7. Indemnification for Tenant's Work. In addition to any indemnities
provided for in the Lease, Tenant shall indemnify, defend and hold harmless
Landlord, its officers, agents, employees, contractors, invitees, and licensees
from and against any and all claims, actions, damages, liabilities and expenses
(including reasonable attorneys' fees) ("Claims") arising out of or in
connection with the construction of Tenant's Work. This indemnity includes, but
is not
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<PAGE> 34
limited to, Claims arising out of or in connection with the construction of
Tenant's Work based on personal injuries, property damage or the failure of
Tenant or any of its agents, contractors or subcontractors to pay for
construction work. This indemnity shall apply according to its terms to Claims
whether caused in whole or in part by the negligence of Landlord, its officers,
agents, contractors, invitees and employees, but shall not apply to the extent
such Claims result from the gross negligence or willful misconduct of Landlord,
its officers, agents, contractors, invitees and employees.
8. Contractors' Insurance. Tenant will furnish Landlord with
certificates evidencing (a) Worker's Compensation, (b) public liability and
property damage insurance in the amount of Five Million Dollars ($5,000,000), in
forms and with companies reasonably satisfactory to Landlord, for all
contractors employed by Tenant for Tenant's Work.
9. Agency and Contractual Privity. Tenant is not authorized to act as
the agent of Landlord for any purpose, and Tenant hereby covenants that Tenant
will not represent itself or hold itself out to any third party as the agent of
Landlord with respect to the construction of improvements at the Building
Premises or otherwise. Tenant shall notify all contractors employed for Tenant's
Work that such contractors are employed by Tenant alone and are not employed by
or in contract with Landlord, and shall require such contractors to provide the
same notice to all subcontractors, materialmen and employees acting under them.
10. Notice of Nonresponsibility. Tenant will provide Landlord with at
least five (5) days' prior written notice of the date Tenant will commence any
Tenant's Work, for the purpose of allowing Landlord to post at the Building
Premises and to record at the county recorder's office a notice of
nonresponsibility for mechanics' liens in accordance with California Civil Code
`3094 and `3129.
11. Safety and Clean-Up. At all times during the performance of Tenant's
Work, Tenant shall maintain the area in and about the Building and the Premises
in a clean, safe and orderly condition. Tenant shall comply fully with all laws,
orders, citations, rules, regulations, standards and statutes affecting or
relating to occupational health and safety, the handling and storage of
hazardous materials, accident prevention, safety equipment and practices
including but not limited to any safety rules and regulations of Landlord that
are generally applicable to the Building. Tenant shall conduct inspections to
determine that safe working conditions and equipment exist and accepts sole
responsibility for providing a safe place to work for its contractors,
subcontractors and employees during the performance of Tenant's Work. Upon
completion of Tenant's Work, Tenant shall remove from the work site all
hazardous materials, temporary structures, debris and waste incident to Tenant's
Work.
12. Compliance with Laws. Tenant's Work shall be designed and
constructed in full compliance with all local, state and federal laws, rules,
codes, ordinances and regulations. Tenant shall obtain all necessary permits and
licenses for Tenant's Work, and shall pay all manufacturers' taxes, sales taxes,
use taxes and processing taxes which arise from Tenant's Work. Tenant's Work
shall include the design and construction of modifications to the Building
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<PAGE> 35
outside the Premises necessary for applicable code compliance, to the extent
required by governmental agencies as a condition of any permits or governmental
approvals for Tenant's Work within the Premises.
13. Risk of Loss. All work, materials, installations, and decorations of
any nature brought on or installed in the Premises as part of Tenant's Work will
be at Tenant's risk of loss. Neither Landlord nor any party acting on Landlord's
behalf will be responsible for any damage, loss or destruction to same except to
the extent such loss is due to Landlord's gross negligence or willful
misconduct.
14. Contractor Rules. All contractors and subcontractors performing
Tenant's Work shall comply with the Kaiser Center Contractor Rules presently in
effect for the Building, together with any reasonable future amendments thereto
that are enforced by Landlord in a nondiscriminatory manner for all tenant
construction work. A copy of the Kaiser Center Contractor Rules presently in
effect is attached to this Work Letter.
15. Post-Acceptance Correction. Within thirty (30) days after Tenant
takes possession of the Premises, Tenant may notify Landlord in writing of
details of construction and other adjustments and items of the type commonly
found on an architect's punch list, necessary to complete the Tenant
Improvements in accordance with the final Approved Plans, excluding those which
should reasonably have been detectable by visual inspection prior to deliver of
the Premises ("Post-Acceptance Correction Items"). Landlord shall diligently
pursue correction of all Post Acceptance Correction Items as soon as reasonably
practicable after Landlord receives Tenant's notice thereof. Following
Landlord's cure of the Post-Acceptance Correction Items, Tenant shall execute
and deliver a Certificate of Final Completion. Nothing in this Section 15 shall
be construed to constitute a Force Majeure Event or Landlord Delay or shall in
any way affect the Commencement Date in the Lease.
16. Force Majeure Event. If Landlord is rendered unable, financial
inability excepted, wholly or in part, by a "Force Majeure Event," as defined
below, to deliver possession of the Premises by the date contemplated in the
Lease, upon giving timely notice and reasonably full particulars to Tenant such
obligations shall be suspended during the continuance of the Force Majeure
Event. The term "Force Majeure Event" shall include, without limitation, acts of
God and the public enemy, insurrections, the elements, epidemics, fire,
accidents, breakdowns, riots, strikes, differences with workmen, Year 2000
issues, and any other industrial, civil or public disturbance, inability to
obtain materials, supplies, energy, permits or labor, any act or omission by
parties not controlled by Landlord after exercising due diligence, and any
restrictions or restraints imposed by laws, orders, rules, regulations or acts
of any government or governmental body or authority, civil or military.
17. Landlord's Delay. Except as expressly provided herein, the term
"Landlord's Delay" means any failure by Landlord to deliver possession of the
Premises by the required date other than due to (i) Tenant's Delay, or (ii) a
Force Majeure Event, or any combination of (i) and (ii) above.
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18. Tenant's Delay. Except as expressly provided herein, the term
"Tenant's Delay" means any failure by Tenant to take possession of the Premises
by the required date other than due to (i) Landlord's Delay, or (ii) a Force
Majeure Event, or any combination of (i) and (ii) above.
19. Landlord as Tenant's Agent. At Tenant's option, Tenant may elect to
appoint Landlord as Tenant's agent to enter into agreements with contractors
necessary to perform and complete Tenant's Work (the "Contractor Agreements").
The parties acknowledge this is an accommodation by Landlord to facilitate
construction and completion of Tenant's Work. Tenant acknowledges and agrees
that if Landlord acts as Tenant's agent, Tenant shall be solely responsible for
all obligations of Tenant and Landlord under the Contractor Agreements, and
Landlord shall have no liability under the Contractor Agreements. Each
Contractor Agreement shall expressly provide that Landlord is acting only as
agent of Tenant and that the contractor agrees not to assert Claims against
Landlord. The indemnity provisions of Section 7 of this Work Letter expressly
apply to all Claims in connection with the Contractor Agreements, and Tenant
acknowledges and agrees that nothing herein shall reduce or eliminate Tenant's
obligations under the Lease and this Work Letter.
IN WITNESS WHEREOF, the parties have executed this Work Letter as of the
date first above written.
LANDLORD: TENANT:
Kaiser Aluminum & Chemical Corporation VERSATA, INC.
By: Kaiser Center, Inc., Its Agent
------------------------------------ ----------------------------------
By: Robert B. Burke By: Kevin B. Ferrell
Its: Vice President Its: Chief Financial Officer
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EXHIBIT C
LETTER OF CREDIT
[Bank's letterhead]
Date: _____________________
Beneficiary: Kaiser Center, Inc., As agent for
Kaiser Aluminum & Chemical Corporation
300 Lakeside Drive, Suite 130
Oakland, California 94612
Applicant: [Insert Tenant's info]
Amount: ____________________ Dollars in United States currency ($_______ USD)
Expiration: ______________________, 20__
To Beneficiary:
We hereby establish in your favor our irrevocable standby letter of
credit number ______, partial and multiple draws on which are permitted upon
presentation of the following at the office of the undersigned:
(1) original of this letter of credit;
(2) your drafts at sight drawn on ________________ [bank]; and
(3) your signed certification that Tenant is in default under
that certain lease agreement dated ______________ for space at 300 Lakeside
Drive, Oakland, California, and/or that you have received written notice that
this Letter of Credit will not be renewed and Tenant has failed to deliver a
replacement letter of credit.
This Letter of Credit shall expire on _______________, but such
expiration date shall be automatically extended without amendment for a period
of one (1) year and on each successive expiration date, unless, at least sixty
(60) days before any expiration date, we notify you by registered mail or
overnight courier service at the above address (or such other address as may be
designated by you), that this Letter of Credit will not be extended beyond the
expiration date of the Lease.
We hereby agree with you that the draft(s) drawn under and in compliance
with the terms of this Letter of Credit will be duly honored upon presentation.
This Letter of Credit is subject to the Uniform Customs and Practice for
Documentary Credits (1993 revision), International Chamber of Commerce
Publication No. 500 (UCP 500), is otherwise governed by the law of the State of
California.
-------------------------------- --------------------------------
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Authorized Signature Authorized Signature
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EXHIBIT D
RULES AND REGULATIONS OF THE KAISER BUILDING
Tenants, their agents, employees or patrons, shall not loiter in or in
any way obstruct the driveways, sidewalks, entrances, lobbies, corridors,
stairways, escalators and elevators of Kaiser Center, and shall use the same
only as a means of passage to and from their respective leased premises.
Tenants, their agents, employees or patrons, shall not make or permit
any improper noises or improper or noxious odors in the Kaiser Building, or
interfere in any way with other Tenants or those having business with such other
Tenants.
Tenants, their agents, employees or patrons, shall not use any part of
the Kaiser Building for lodging or sleeping purposes, and cooking and eating of
meals is prohibited except in those parts of the Kaiser Building specifically
designated by Lessor for those functions.
If Tenant plans to have a gathering in the premises such as an open
house, holiday celebration, etc., Tenant must notify Kaiser Center, Inc. leasing
office at least one week prior to the event in order to confirm that such usage
is in conformance with its lease and to make proper arrangements for security,
heat and air-conditioning, parking and janitorial services. If alcoholic
beverages are to be served during the gathering, the caterer must have a proper
permit to dispense such beverages and Tenant's insurance must adequately cover
such event. If dignitaries or political figures are invited, tenant must notify
Kaiser Center, Inc.'s leasing/security office accordingly.
No trade, occupation, game or business shall be conducted in the Kaiser
Building which shall be unlawful or of a so-called "get-rich-quick" character,
nor shall the leased premises be used for gambling of any nature or for any
immoral purpose whatsoever.
Tenants, their agents and employees, shall not throw substances of any
kind out of the doors or down the passages of the Kaiser Building, or bring into
the Kaiser Building or keep therein any animal or animals, except guide dogs.
Automobiles, trucks, motorcycles, scooters, bicycles, or other vehicles
may be brought into the Kaiser Center Garage and Parking Lots only in those
areas specifically designated for the driving and parking of such vehicles,
where the operators thereof shall comply with all traffic regulations in effect.
Windows, glass doors and store fronts shall not be covered or
obstructed. Curtains and drapes, other than those provided by Lessor, may be
used only upon specific approval of Lessor.
No sign, advertisement, or notice shall be inscribed, painted or fixed
on to any part of the outside or inside of any portions of the Kaiser Building,
except as is permitted by the Lease,
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unless it be of such color, size and style and in such place upon or within the
premises, as may be designated by Lessor in writing.
Toilets, urinals, lavatories and sinks shall not be used for any
purposes other than those for which they were constructed, and no rubbish,
newspapers or other substances of any kind shall be thrown into them. Waste and
excessive or unusual use of water shall not be allowed.
Tenants shall not in any way deface floors, ceilings, partitions, walls
or other surfaces, except they may drive nails, screw or drill into, glue or
otherwise adhere to any surface for the purpose of affixing articles of
decoration and/or equipment customarily used in business offices within a
first-class building.
Under the carpeting of each floor there are two metal pans which are
about six inches wide and four inches deep and run the length of the building.
One of these contains electrical wiring and is not to be disturbed by the Tenant
without the consent and under the direction of Lessor. The other is to
accommodate telephone and other communication equipment which is to be provided
and maintained by the Tenant at its expense. To gain access to this pan it is
necessary to lift the carpeting and remove the pan lid. Lessor will provide this
service to Tenant for a fee. In any event, it is the Tenant's responsibility to
guard these pans when they are open and prevent injury or damage to persons or
property and Lessor is to be held harmless by Tenant from any costs or liability
resulting from the opening of these pans.
The number, size, type and capacity of pieces of electrical equipment
and lighting of any kind used by the Tenants are subject to approval by Lessor.
Tenants receiving electrical power without additional charge as part of the
Lease may be charged separately for power used by pieces of office and other
electrical equipment, if warranted in the reasonable opinion of Lessor.
All freight shall be moved into, within and out of the Kaiser Building
according to such regulations as Lessor may reasonably prescribe. Lessor shall
not be responsible for loss or damage to any such freight from any cause or
causes whatsoever.
Lessor shall prescribe the times and methods of moving any item of
Tenant's property in or out of the Kaiser Building. Lessor shall not be
responsible for any loss or damage to any such property from any cause
whatsoever, except Lessor's sole gross negligence or Lessor's intentional
tortuous acts, and all damage done to the Kaiser Building by moving or
maintaining any Tenant's property shall be repaired to Lessor's full
satisfaction at the sole expense of Tenant.
Lessor may, at its sole discretion, limit the weight or size, or may
prescribe the location of safes, file cabinets, machinery and other property
brought into the Kaiser Building.
Tenants shall not place any additional lock or locks on any door,
hatchway or other opening unless written consent of Lessor shall have first been
obtained. Initial keys shall be furnished by Lessor for the entrance to the
suite and two (2) keys for each private office within
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the suite. Additional keys will be at the expense of Tenant. All keys shall be
surrendered to Lessor upon expiration or other termination of this lease.
At the end of each wing are located emergency exits. Fire codes require
that these remain closed at all times excepting when they are used for ingress
or egress. However, the stairways may be used for access to adjacent floors by
multi-floor tenants as long as Tenant holds Lessor free from any liability from
using these stairways.
Tenants shall not employ any person or persons other than those provided
or approved in advance by Lessor for the purpose of cleaning the premises
without the consent of Lessor. Lessor shall be in nowise liable or responsible
to any Tenant for any loss of property located in or upon the leased premises,
however occurring, except as a result of Lessor's sole negligence or intentional
tortuous acts.
Tenants shall not employ any person or persons other than those provided
or approved in advance by Lessor for the purpose of maintaining, repairing,
revising, modifying or constructing within the leased premises without the
consent of Lessor.
Requirements of tenants will be attended to only upon application to
Lessor's designated representatives. Lessor's employees shall not perform any
work or do anything outside of their regular duties unless under special
instructions from said representatives.
Towels, laundry, florist service, bottled water and similar service
shall be furnished to Tenants only by such persons as may be satisfactory to
Lessor.
Lessor shall have sole control of directories in the lobbies and other
common areas of the Kaiser Building, and only such names as have been approved
by Lessor will be placed thereon. Initial signage will be provided by Lessor at
no cost to Tenant. Any additional names added or removed from existing
directories will be at the expense of Tenant. Tenant shall request any
addition/deletion of names in writing.
At any time while the Kaiser Building is under security control, any
person entering or leaving will be required to display a pass, sign a building
register or otherwise satisfy the security watchman on duty as to his business
therein. Anyone not satisfying the watchman as to his right to enter the Kaiser
Building may be excluded by him.
Lessor shall require written authorization from a Tenant before
permitting anyone to remove Tenant's office equipment or other personal property
from the Kaiser Building.
I. Lessor reserves the right, but shall not be held obligated, to
exclude or reject from the building any or all solicitors, canvassers or
peddlers, and also any other class of persons and individuals who conduct
themselves in such a manner as, in the opinion of Lessor, to be any annoyance to
any of the Tenants of the Kaiser Building or to interfere with Lessor's
operation thereof or to be otherwise undesirable.
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II. Lessor may waive any one or more of these Rules and Regulations for
the benefit of any particular Tenant or Tenants of the Kaiser Building, but no
such waiver by Lessor shall be construed as a waiver of such Rules and
Regulations in favor of any other Tenant or Tenants, nor prevent Lessor from
thereafter enforcing any such Rules and Regulations against any or all of the
Tenants of the Kaiser Building.
III. Lessor reserves the right to make such other and further Rules and
Regulations as in its judgement may from time to time be necessary for the
safety and cleanliness of, and for the preservation of good order in the Kaiser
Building.
IV. These Rules and Regulations are in addition to, and shall not be
construed to in any way modify, alter or amend, in whole or in part, the terms,
conditions and covenants of the Lease.
V. Tenant, its employees or patrons will obey any and all ordinances
passed by the City of Oakland relating to smoking.
VI. Tenant has been informed that the interior blinds on the building
window walls are an integral part of the building heating, ventilation and air
conditioning system. If Tenant fails to close the blinds, Lessor cannot
guarantee the comfort level of the Premises.
Any food operators or restaurants shall retain approved contractors to
perform maintenance of grease traps, including installation of pump stations for
chemical treatment; maintenance of all drain lines to ensure free flowing
operations; and maintenance of all hoods and kitchen exhaust systems as required
by applicable codes and regulations.
Any food operators or restaurants shall engage Lessor's designated pest
control company on an appropriate schedule to maintain the premises free from
pests and vermin.
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EXHIBIT E
TENANT ESTOPPEL CERTIFICATE
[Date]
_____________________________
_____________________________
_____________________________
_____________________________
Re: ____________________________
Ladies and Gentlemen:
The undersigned, as Tenant under that certain lease (the "Lease") dated
as of ___________ 20__, made with _________________ as Landlord (the
"Landlord"), does hereby certify:
That the copy of the Lease attached hereto as Exhibit A is a true and
complete copy of the Lease, and there are no amendments, modifications or
extensions of or to the Lease and the Lease is now in full force and effect.
That its premises at the above location leased pursuant to the Lease
have been completed in accordance with the terms of the Lease, that it has
accepted possession of said premises, and that it now occupies the same.
That it began paying rent on ______, 2000, and that, save only as may be
required by the terms of the Lease, no rental has been paid in advance, nor has
the undersigned deposited any sums with the Landlord as security, except for the
letter of credit described therein.
That, to Tenant's knowledge, there exist no defenses or offsets to
enforcement of the Lease by the Landlord and, so far as is known to the
undersigned, the Landlord is not, as of the date hereof, in default in the
performance of the Lease, nor, to Tenant's knowledge, has the Landlord committed
any breach thereof, nor has any event occurred which, with the passage of time
or the giving of notice, or both, would constitute a default or breach by the
Landlord.
The undersigned acknowledges that you are relying on the above
representation of the undersigned in advancing funds to fund a mortgage loan
covering the building in which the leased premises are located or in purchasing
the building in which the leased premises are located and does hereby warrant
and affirm to and for your benefit, and that of your successors and assigns,
that each of the foregoing representations is true, correct and complete as of
the date hereof.
[TENANT]
-----------------------------
By:
Its:
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FIRST AMENDMENT TO LEASE AGREEMENT
BETWEEN KAISER ALUMINUM & CHEMICAL
CORPORATION AND VERSATA, INC.
This First Amendment to Lease Agreement (the "First Amendment") dated
and effective as of July ___, 2000 is an amendment to that certain Lease
Agreement (the "Lease") by and between Kaiser Aluminum & Chemical Corporation,
through its agent, KAISER CENTER, INC., a Delaware corporation ("Landlord"), and
VERSATA, INC., a Delaware corporation ("Tenant"), dated April 10, 2000,
governing the lease of office space in the tower located on the city block
bounded by Webster, 20th, 21st, and Harrison Streets in Oakland, California,
(the "Premises").
For good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree as follows:
1. General
a. All terms used in this Amendment shall have the meanings
ascribed to them in the Lease unless otherwise indicated herein.
b. The Lease shall be in full force and effect except as
specifically provided herein.
2. Amendments
The area comprising the Premises, as described in the second
sentence of Section 1.01, is hereby reduced from 99,228 rentable square
feet to 97,882 rentable square feet.
a. Exhibit A, as referenced in the Lease, is hereby replaced by
the revised Exhibit A attached hereto.
a. Section 4.02 is hereby deleted in its entirety and replaced as
follows:
4.02 Amount. The amount of the First Letter of Credit shall be
Four Million Eight Hundred Twenty Thousand Six Hundred Sixty Six and---50/100
Dollars ($4,820,688.50) and the amount of the Second Letter of Credit shall be
Nine Hundred Fifty Four Thousand Three Hundred Forty Nine-50/100 Dollars
($954,349.50). The initial combined amount of the First Letter of Credit and
Second Letter of Credit equals of Five Million Seven Hundred Seventy Five
Thousand Thirty Eight and 00/100 Dollars ($5,775,038.00). If Tenant is not then
in default under this Lease beyond any applicable notice and cure period, then
upon each anniversary of the Commencement Date, the Letter of Credit shall be
reduced by the annual amortized amount of brokerage commissions and Tenant
Improvement Allowance assuming amortization on a straight line basis over the
Term, which amount the Landlord and Tenant acknowledge is approximately Two
Hundred Forty Four Thousand Seven Hundred Five and---00/100 Dollars
($244,705.00) per annum (the Commissions/TI Reduction"). At any time during the
Term, provided Tenant is not then in default under this Lease beyond any
applicable notice and cure
<PAGE> 45
2
period, if Tenant demonstrates to Landlord's reasonable satisfaction that its
ratio of current assets (as shown on audited financial statements certified by
accountants acceptable to Landlord in its reasonable discretion), to its total
liability hereunder, equals or exceeds 3:1, then the face amount of the Letter
of Credit may in addition be reduced by the equivalent of six (6) months of Base
Rent, which for the purposes of this Section 4.02 the parties agree is One
Million Nine Hundred Eight Thousand Six Hundred Ninety Nine Dollars
($1,908,699.00) (the "Asset/Liability Reduction"). In addition, after the twenty
fourth (24th) month following the Commencement Date, provided the Tenant is not
then in default beyond any applicable notice and cure period, if Tenant
demonstrates to Landlord's reasonable satisfaction that its annual net profits
for its prior fiscal year (as shown on audited financial statements certified by
accountants acceptable to Landlord in its reasonable discretion) equal three (3)
years of Base Rent, which for the purposes of this Section 4.02 the parties
agree is Eleven Million Four Hundred Fifty Two Thousand One Hundred Ninety Four
Dollars ($11,452,194.00), then the face amount of the Letter of Credit may in
addition be reduced by the equivalent of three (3) months of Base Rent, which
for the purposes of this Section 4.02 the parties agree is Nine Hundred Fifty
Four Thousand Three Hundred Forty Nine-50/100 Dollars ($954,349.50) (the
"Profits/Base Rent Reduction"). If the Term of this Lease is extended for any
Extended Term, then, provided that Tenant is not then in default under the terms
of this Lease beyond any applicable notice and cure period, the amount of the
Letter of Credit (or, at Tenant's election, cash security deposit) shall be
negotiated by Landlord and Tenant.
a. The third sentence in Section 5.01 of the Lease is hereby
deleted in its entirety and replaced as follows:
"Tenant's Share" shall mean the percentage that the total
rentable square footage in the Premises is of the total rentable square
footage in the Building, which percentage the parties agree equals
thirteen and three hundred thirty five one thousandths percent
(13.335%).
All other provisions of the Lease not specifically amended by the terms
of this First Amendment remain unchanged and in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on
the day and year first written above.
<PAGE> 46
3
LANDLORD: TENANT:
KAISER ALUMINUM & VERSATA, INC.
CHEMICAL CORPORATION
By KAISER CENTER, INC., Its Agent
--------------------------------------- --------------------------------
By: Kevin B. Ferrell
By: Robert B. Burke Its: Chief Financial Officer
Its: Vice President
