Virage Inc. Contracts
Sample Business Contracts
California-San Mateo-411 Borel Avenue Lease [Amendment No. 2] - 411 Borel LLC and Virage Inc.
Lease Forms
- Start a state-specific lease for the rental of commercial property. Specify the term and rent due, as well as whether the landlord or tenant is responsible for property taxes, insurance, and maintenance and repairs.
- When a tenant vacates commercial property before the lease term has expired, it may be able to rent the premises to a third party. The tenant would be the sublessor and the third party would be the sublessee. Besides preparing a sublease, both parties will want to review the provisions for assignment or subletting in the original lease agreement between the landlord and the sublessor.
- Tenants of residential property should prepare a sublease agreement if they are seeking to sublease a room or the entire apartment or house to a third party. All parties should review the original lease agreement to see if there are any restrictions on subletting or assigning the premises.
- Triple net leases are a type of commercial leases where the tenant has to pay for property taxes, insurance, utilities, and maintenance, in addition to the monthly rent.
- When renting an office space, tenants should understand the amount of the rent and duration of the lease. Other important terms include whether the space can be subleased, which parties are responsible for maintenance, and whether any furniture and furnishings will be provided.
SECOND AMENDMENT TO LEASE
THIS SECOND AMENDMENT TO LEASE (this "Amendment") is dated as of
December 23, 2002 ("Effective Date") and is made by and between 411 BOREL, LLC,
a Delaware limited liability company ("Landlord"), and VIRAGE, INC., a Delaware
corporation ("Tenant"), with respect to the following facts and circumstances:
RECITALS
Landlord's predecessor in interest and Tenant executed that certain
Office Lease, dated February 17, 2000, as amended by that certain First
Amendment to Office Lease, dated August 31, 2000 (collectively, as amended, the
"Lease"), for a portion of certain real property commonly known as 411 Borel
Avenue, San Mateo, California, as more particularly described in the Lease (the
"Premises").
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Landlord and Tenant agree as
follows:
1. Definitions. All capitalized terms used in this Amendment shall have the
meanings ascribed in the Lease, unless otherwise defined in this Amendment.
2. Effective Date. The effective date of this Amendment shall be the Effective
Date set forth above.
3. Tenant's Payment. As consideration for Landlord's execution of this
Amendment, on January 2, 2003, Tenant shall pay to Landlord cash in the amount
of One Million Two Hundred Fifty Thousand and No/100 Dollars ($1,250,000.00)
("Tenant's Payment").
4. Amendment of Letter of Credit. Provided that: (a) Tenant is not in material
default under the terms of the Lease, as amended by this Amendment
(collectively, the "Amended Lease"); (b) Tenant has delivered Tenant's Payment
to Landlord in accordance with Section 3 above and (c) as of the end of business
on March 30, 2003, Tenant has not filed (nor has any creditor of Tenant (other
than Landlord or any affiliate of Landlord) filed on behalf of Tenant) a
petition for bankruptcy under Title 11 of the United States Code and has not
made an assignment for the benefit of creditors, then, on or after March 31,
2003, Tenant shall have the right to amend the Letter of Credit to reduce the
stated amount to Seven Hundred Fifty Thousand and No/100 Dollars ($750,000.00)
("Amended L/C").
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5. Warrant. On or before the Effective Date, Tenant shall execute and deliver to
Landlord a warrant, substantially in the form attached hereto as Exhibit A
("Warrant"), to purchase two hundred thousand (200,000) shares of unregistered
securities of Tenant at the market price in effect as of the Effective Date,
exercisable on or before the date which is thirty-six (36) months after the
Effective Date.
6. Software. At any time after the Effective Date until the expiration of the
Amended Lease, upon Landlord's request, Tenant shall provide to Landlord,
without cost to Landlord, webcasting software or other software manufactured by
Tenant, instead of or in addition to webcasting software, selected by Landlord,
in its sole and absolute discretion, and licenses to use such software pursuant
to Tenant's standard shrinkwrap agreement (collectively, "Software"), valued at
Two Hundred Thousand and No/100 Dollars ($200,000.00) ("Allowance"), based on
the current Virage list selling price to unaffiliated third parties. Landlord
may, but shall not be required to, apply a portion of such Allowance towards
ordering Tenant's commercially available services such as installation, training
and/or support services (not to exceed one year) at Virage's list selling price
to unaffiliated third parties or towards ordering excess hardware if available
from Tenant, in place of Software. All such Software, services and/or hardware
ordered by Landlord and applied towards such Allowance shall be documented in a
standard Virage quote form and signed by Landlord.
7. Rent Reduction. Except as set forth in Section 14 below, and subject to
reduction if the Premises are reduced under Section 8(a) below, (a) for the
month of December, 2002, the minimum monthly rent payable under Section 2 of the
Lease ("Minimum Monthly Rent") shall be One Hundred Seven Thousand Seven Hundred
Ninety-five and 25/100 Dollars ($107,795.25); (b) for the month of January,
2003, the Minimum Monthly Rent shall be Two Hundred Fifteen Thousand Five
Hundred Ninety and 50/100 Dollars ($215,590.50); (c) for the month of February,
2003, the Minimum Monthly Rent shall be Two Hundred Fifteen Thousand Five
Hundred Ninety and 50/100 Dollars ($215,590.50); (d) for the month of March,
2003, the Minimum Monthly Rent shall be One Hundred Thirty-one Thousand Seven
Hundred Twenty-four and 75/100 ($131,724.75); and (e) for the month of April,
2003, and continuing thereafter, the Minimum Monthly Rent shall be One Hundred
Seven Thousand Seven Hundred Ninety-five and 25/100 Dollars ($107,795.25) (i.e.,
$2.25 per rentable square foot of the Premises). The foregoing Minimum Monthly
Rent reductions shall not affect Tenant's obligation to pay direct operating
expenses and real estate taxes and assessments pursuant to Sections 21 and 22 of
the Amended Lease. Upon January 1, 2004, and continuing annually thereafter, the
Minimum Monthly Rent shall be increased to the fair market rent for the
Premises, as mutually agreed to by both Landlord and Tenant in good faith, but
in no event shall the Minimum Monthly Rent be less than Two and 25/100 Dollars
($2.25) per rentable square foot of the Premises, as the Premises may be reduced
pursuant to Section 8(a) below. If Landlord and Tenant cannot agree upon fair
market rent for the Premises as provided above, fair market rent shall be
decided by arbitration in accordance with the provisions of Section 36 of the
Amended Lease.
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Landlord agrees to apply One Hundred Seven Thousand Seven Hundred
Ninety-five and 25/100 Dollars ($107,795.25) of the Security Deposit held by
Landlord pursuant to Section 3 of the Amended Lease against rent due in January,
2003, to apply One Hundred Seven Thousand Seven Hundred Ninety-five and 25/100
Dollars ($107,795.25) of the Security Deposit against rent due in February,
2003, and to apply Twenty-three Thousand Nine Hundred Twenty-nine and 50/100
Dollars ($23,929.50) of the Security Deposit against rent due in March, 2003.
Thereafter, no security deposit shall be required.
8. Third Floor Premises.
(a) Third Party Lease. From and after the Effective Date, Landlord
and Tenant shall use best efforts, without commercially
unreasonable cost to either party, to market the portion of
the Premises on the Third Floor of the Building ("Third Floor
Premises") for lease to third parties, upon terms and
conditions reasonably acceptable to Landlord and Tenant.
Landlord shall engage Landlord's broker to market the Third
Floor Premises for re-lease, and, on the Third Party Lease
Date, as defined below, Tenant shall pay Landlord's broker's
excess bonus ("Excess Bonus"), in the amount of Two and No/100
Dollars ($2.00) per square foot of the Third Floor Premises
leased to a new tenant, directly to Landlord; provided that
such Excess Bonus is paid by Landlord to its broker and is
paid in addition to its standard broker fees for similar
properties. Such Excess Bonus shall not exceed the aggregate
amount of Forty-seven Thousand Seven Hundred Four and No/100
Dollars ($47,704.00). If Landlord and a third party tenant
reasonably acceptable to Landlord and Tenant execute and
deliver a new lease ("Third Party Lease") for the Third Floor
Premises prior to the expiration of the Amended Lease, then on
the commencement date of the Third Party Lease ("Third Party
Lease Date"), the Third Floor Premises shall be excluded from
the Premises for all purposes under the Amended Lease, the
Minimum Monthly Rent shall be adjusted on a pro rata basis
based on square footage to reflect such exclusion and Landlord
and Tenant shall execute and deliver an amendment to the
Amended Lease memorializing such exclusion and rent reduction.
If Landlord does not execute a Third Party Lease pursuant to
the terms of this Amendment, then Tenant shall remain liable
for all obligations under the Amended Lease, including without
limitation for the Third Floor Premises. The Third Party Lease
shall be on terms and conditions substantially similar to
Landlord's then-standard terms and conditions for similar
properties and Landlord shall not offer concessions, not
normally offered to other tenants, in exchange for a lower
rental rate in the Third Party Lease. Within ten (10) days
after Landlord gives Tenant written notice that Landlord
intends to enter into a Third Party Lease, Tenant shall
deliver to Landlord a bill of sale transferring title to all
of the then-remaining furniture in the Third Floor Premises
("Third Floor Furniture") to Landlord, without any additional
payment due from Landlord, and Tenant shall receive a credit
to the Rent Differential, as defined below, if any, as set
forth in Section 8(b) below.
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(b) Rent Differential. Commencing upon the Third Party Lease Date
and ending upon the expiration of the term of the Amended
Lease, Tenant shall pay to Landlord a Rent Differential, as
defined below, monthly with Tenant's Minimum Monthly Rent
payment, as reduced pursuant to Section 8(a) above. The "Rent
Differential" shall be an amount equal to the Minimum Monthly
Rent payable under Section 7 above with respect to the Third
Floor Premises minus the minimum monthly rent paid by the
tenant under the Third Party Lease ("Rent Differential"). In
no event will Landlord be obligated to pay to Tenant any
amount of negative Rent Differential, nor shall any negative
amount carry over into a subsequent month. A Third Floor
Furniture Amount (as defined below) shall credited against the
Rent Differential as it accrues until the Third Floor
Furniture Amount is reduced to zero (0). For the purposes of
this paragraph, the "Third Floor Furniture Amount" shall be
the value of the Third Floor Furniture, as reasonably agreed
upon by Landlord and Tenant on or before the Third Party Lease
Date. Notwithstanding the foregoing, Tenant's obligation to
pay the Rent Differential shall terminate upon the date which
is twenty-four (24) months after the Effective Date if Tenant
is not Profitable, as defined below, for at least two (2) of
the four (4) fiscal quarters immediately preceding the date
which is twenty-four (24) months after the Effective Date.
Additionally, even if Tenant does not satisfy the criteria in
the immediately preceding sentence, if the expiration date of
the Third Party Lease occurs within the last twelve (12)
months of the term of the Amended Lease, then Tenant's
obligation to pay the Rent Differential shall terminate upon
the expiration of the earlier to expire of the Third Party
Lease or the Amended Lease, excluding any extension pursuant
to Section 13 of this Amendment.
(c) For the purposes of this Amendment, "Profitable" shall mean
showing a positive balance for "Net Cash (from/used in)
Operating Activities," for any quarter as reflected in
Tenant's Consolidated Statement of Cash Flows on Tenant's 10K,
except that there shall be excluded from the determination of
"Net Cash (from/used in) Operating Activities" the amount of
any "cash" bonus compensation in excess of the average of the
"cash" bonus compensation paid to executives in the same
quarter in the previous two (2) years ("Excess Bonus
Compensation"). Tenant shall notify Landlord in writing of the
amount of any such Excess Bonus Compensation upon Tenant's
filing of any 10K.
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(d) Tenant's Second Payment. As further consideration for
Landlord's execution of this Amendment, upon the first (1st)
business day of Tenant's fiscal quarter immediately following
the Third Party Lease Date, Tenant shall pay to Landlord cash
in the amount of Seven Hundred Fifty Thousand and No/100
Dollars ($750,000.00) (minus, only if Tenant was not
Profitable for the two (2) fiscal quarters immediately
preceding the Third Party Lease Date, an amount equal to the
sum of the Minimum Monthly Rent payments paid by Tenant under
the Amended Lease with respect to the Third Floor Premises
after the date which is twelve (12) months after the Effective
Date) ("Tenant's Second Payment"). Provided that: (a) Tenant
is not in material default under the terms of the Amended
Lease and (b) as of the end of business on the date which is
the earlier of ninety (90) days after Tenant's Second Payment
or two (2) business days prior to the last day of the same
fiscal quarter in which Tenant's Second Payment is made,
Tenant has not filed (nor has any creditor of Tenant filed on
behalf of Tenant) a petition for bankruptcy under Title 11 of
the United States Code and has not made an assignment for the
benefit of creditors, Landlord shall release the Amended L/C
to Tenant upon the earlier of ninety (90) days after Tenant's
Second Payment or two (2) business days prior to the last day
of the same fiscal quarter in which Tenant's Second Payment is
made. If Tenant has paid Tenant's Payment in accordance with
Section 3 above and otherwise has satisfied all of the
conditions set forth in the immediately preceding sentence,
but has not amended the Letter of Credit, then upon the
earlier of ninety (90) days after Tenant's Second Payment or
two (2) business days prior to the last day of the same fiscal
quarter in which Tenant's Second payment is made, Landlord
shall release the Letter of Credit to Tenant.
9. Unamortized Commissions and Tenant Improvements. Within twenty (20) days
after the Third Party Lease Date and provided that Landlord delivers an invoice
to Tenant for the due amount within ten (10) days after the Third Party Lease
Date, Tenant shall pay to Landlord an amount equal to any unamortized tenant
improvements and brokers' commissions, finders' fees or other similar costs
incurred by Landlord with respect to the original lease of the Third Floor
Premises to Tenant, with interest at the per annum rate of eight percent (8%)
("Amortization Payment"), which Amortization Payment shall not exceed in the
aggregate Six Thousand and No/100 Dollars ($6,000.00) multiplied by the number
of months from the Third Party Lease Date until the expiration date of the
Amended Lease, excluding any extension period pursuant to Section 13 hereof.
10. Tenant Improvements. Tenant hereby releases Landlord from a portion, in the
amount of Forty-five Thousand Five Hundred and No/100 Dollars ($45,500.00), of
its obligation to pay to Tenant the remaining tenant improvement allowance still
due from Landlord under Section 4 of the Amended Lease.
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11. Acquisition of Tenant. If Tenant merges with, sells all or substantially all
of its assets to, or is acquired by (collectively, an "Acquisition") a third
party that is not a Related Corporation, as defined in Section 20 of the Amended
Lease ("Buyer"), Tenant may assign and such Buyer may assume Tenant's
obligations under the Amended Lease in accordance with the provisions of Section
20 of the Amended Lease. Buyer may terminate the Amended Lease within ninety
(90) days after an Acquisition, upon Landlord's receipt of written notice from
such Buyer that such Buyer wishes to so terminate the Amended Lease and
Landlord's receipt of an amount equal to sixty-seven percent (67%) of the
Termination Amount, as defined herein. The "Termination Amount" shall be the
total Minimum Monthly Rent payable under the Amended Lease from the termination
date until the expiration date of the Amended Lease.
12. Confidentiality. Tenant and Landlord shall use their best efforts to keep
all information related to or connected with this Amendment confidential and
will not disclose any such information to any person or entity without obtaining
the prior written consent of the other party, except that each party shall have
the right to disclose: (i) to attorneys, consultants, accountants, lenders and
other professionals required to perform its obligations or exercise its rights
under the Amended Lease; (ii) in filings, regulatory documents, financial
conference calls and press releases for purposes of complying with securities
regulations, listing requirements, the Sarbanes-Oxley Act and other government
rules, and as otherwise reasonably recommended by outside counsel to minimize
risk of litigation and Securities Exchange Commission investigation; and (iii)
if required by applicable law or court order.
13. Option to Extend.
(a) The first full paragraph of Section 36 of the Lease (Option to
Renew) (but not Subsections 36A and B) is hereby deleted in
its entirety.
(b) If Tenant is Profitable during at least two (2) of the four
(4) fiscal quarters immediately preceding the expiration of
the Amended Lease term or there has been a Infusion Event, as
defined below, then Landlord shall have the option ("Option")
to extend the term of the Amended Lease for one (1) additional
term of five (5) years, subject to all terms, conditions and
covenants contained in the Amended Lease, except that Base
Rent for the renewal term shall be based on fair market value
for comparable office buildings in the San Mateo office market
as determined in accordance with Section 36 of the Amended
Lease; provided, however, that the immediately preceding
sentence shall not apply if there has been an Acquisition of
Tenant by any Buyer or if Landlord cannot provide premises
large enough to accommodate Tenant's needs within a five (5)
mile radius of the Building, in which case the Option shall
not be exercisable. If Landlord desires to exercise the
Option, then Landlord shall give Tenant written notice of
Landlord's intention to so extend the term at least one
hundred eighty (180) days prior to the expiration of the
Amended Lease. For the purposes of this Section 13, an
"Infusion Event" shall mean Tenant has received cumulative
written and non-refundable commitments for or payments of cash
for equity at any time after the Effective Date in excess of
Seven Million Five Hundred Thousand and No/100 Dollars
($7,500,000.00).
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14. Effect of Bankruptcy. If, within ninety (90) days after the Effective Date,
Tenant files (or any creditor of Tenant (other than Landlord or any affiliate of
Landlord) files on behalf of Tenant) a petition for bankruptcy under Title 11 of
the United States Code or Tenant makes an assignment for the benefit of
creditors, and Landlord is unable to obtain or keep the full benefit of Tenant's
Payment or Tenant's Second Payment made or required to be made under Sections 3
or 8(e) hereof, for any reason (including without limitation an avoidance action
brought by Tenant, an affiliated party of Tenant, or any of their respective
creditors (other than Landlord or any affiliate of Landlord)), then the first
paragraph of Section 7 of this Amendment shall be null and void and Tenant shall
be liable for the full Minimum Monthly Rent payable under Section 2 of the Lease
without reference to the first paragraph of Section 7 of this Amendment
commencing upon the date of such filing or assignment and Landlord's full claim
under the Amended Lease (except for Section 7 of this Amendment) or under
applicable law against all parties will be reinstated and immediately
enforceable against all parties liable therefor.
15. Due Authority. Each individual executing this Amendment on behalf of
Landlord and Tenant represents and warrants to Tenant or Landlord, respectively,
that he or she is duly authorized to execute and deliver this Amendment on
behalf of Landlord or Tenant, respectively, and that this Amendment is binding
upon Landlord or Tenant, respectively, in accordance with its terms.
16. Waiver. Tenant hereby waivers, to the fullest extent allowed by law, any and
all rights Tenant may have under California Civil Code section 1950.7.
17. Time of the Essence. Time is of the essence with respect to each and every
term and condition of this Amendment.
18. Ratification. Except as specifically amended hereby, the provisions of the
Lease shall remain unmodified, of full force and effect and binding upon the
parties in accordance with their terms.
[Signatures begin on next page.]
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IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as
of the day and date first above written.
LANDLORD TENANT
411 BOREL, LLC, VIRAGE, INC.,
a Delaware limited liability company a Delaware corporation
By: /s/ Donald E. Christy By: /s/ Frank Pao
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Name: Donald E. Christy Name: Frank Pao
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Title: Senior Vice President Title: Vice President, Business Affairs
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