California-Berkeley-2607 7th Street Lease - Eat/Work Development LP and Ask Jeeves Inc.
STANDARD COMMERCIAL OFFICE LEASE FOR EAT/WORK DEVELOPMENT
THIS COMMERCIAL OFFICE LEASE (the "Lease") is entered into as of May 15, 1998
by and between EAT/WORK DEVELOPMENT, LP, a California limited partnership
("Landlord") and ASK JEEVES, Inc., a California corporation ("Tenant").
1. BASIC LEASE TERMS. Landlord leases to Tenant, and Tenant rents and hires
from Landlord, the Premises described in Section 1.1 below, for the rents
hereinafter reserved, for the term stated in Section 1.4 below, and upon and
subject to the terms, conditions (including limitations, restrictions, and
reservations), and covenants hereinafter provided. Each party hereby
expressly covenants and agrees to observe and perform all of the conditions
and covenants herein contained on its part to be observed and performed. The
parties agree that the following table (the "Table") sets forth in summary
form the basic terms of this Lease, as all of such terms as defined below:
<TABLE>
<CAPTION>
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Period Suite # Square Footage Monthly Base Pro Rata Share Base Year
Rent (incl. CAM)
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<S> <C> <C> <C> <C> <C>
May 15, 1998 - B-E 1930 s.f. $2509.00 5.68% 1998
May 14, 2001
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</TABLE>
In the event of any conflict between the terms contained in the Table and the
terms contained in subsequent sections of the Lease, the terms of the Table
shall control, subject to any adjustments specifically provided for in any
other provisions of the Lease.
1.1 PREMISES. The Premises leased to Tenant (the "Premises") is that portion
of the first floor of the Building described in Section 1.2 below and
commonly known as Suite B-E, as shown on the floor plan annexed hereto as
EXHIBIT B. The Premises also include all fixtures and equipment which are
attached thereto, except items not deemed to be included therein and which
are removable by Tenant as provided in Section 18. Landlord and Tenant agree
that the square footage of the Premises, for all purposes under this Lease,
are as specified in the Table. Tenant acknowledges that it has had an
opportunity to verify the numbers stated in the Table relating to the
measurements of the Premises prior to the Commencement Date of this Lease.
1.2 BUILDING. The Premises are located in the building known by the street
address 2607 7th Street (the "Building") in the City of Berkeley, County of
Alameda, State of California. The Building is more particularly described and
depicted in EXHIBIT A which is attached hereto. Landlord and Tenant agree
that the square footage of the Building, for all purposes under this Lease,
is twelve thousand (12,000). Tenant acknowledges that it has had an
opportunity to verify the measurement of the Building prior to the
Commencement Date of this Lease.
1.3 DEVELOPMENT. The Building is located in and forms part of the real
property commonly known as the Eat/Work Development, with a street address of
918 Parker Street, Berkeley, California (the "Development"), which comprises
three different buildings and constitutes a single parcel on the assessment
role of the Alameda County Tax Assessor. For the purposes of this Lease, the
Development shall mean the Building and any common or public areas or
facilities, easements, corridors, lobbies, sidewalks, loading areas,
driveways, landscaped areas, skywalk, parking garages and lots, and any and
all other structures or facilities operated or maintained in connection with
or for the benefit of the Building, and all parcels or tracts of land on
which all or any portion of the Building or any of the other foregoing items
are located, and any fixtures, machinery, equipment, apparatus, Systems and
Equipment (as defined in Section 5.5 below), furniture, and other personal
property located thereon or therein and used in connection therewith, whether
title is held by Landlord or its affiliates. Landlord and Tenant agree that
the square footage of the Development, for all purposes under this Lease, is
thirty four thousand (34,000). Tenant acknowledges that it has had an
opportunity to verify the measurement of the Development prior to the
Commencement Date of this Lease.
1.4 TERM. The term (the "Term") for which the Premises are hereby leased
shall commence on the "Commencement Date," which shall be May 15, 1998, or,
if earlier, the day on which the Premises are ready for occupancy (as defined
in Section 5) and shall end on May 14, 2001 (the "Expiration Date") or any
earlier date upon which the Term may expire or be canceled or terminated
pursuant to any of the conditions or covenants of this Lease or pursuant to
law. Promptly following the Commencement Date the parties hereto shall, if
required by Landlord, enter into a supplementary agreement fixing the dates
of the Commencement Date and the Expiration Date in the form which is
attached hereto as EXHIBIT C and incorporated herein by reference.
1.5 TENANT PARKING. Tenant is entitled to two (2) unreserved parking spaces
in the parking lot of Eat/Work Development. If it is necessary at any time to
reserve parking spaces or hire a guard to monitor parking, Landlord may, at
its option, do so and pass both reasonable administrative and direct labor
expenses for the guard or monitor to tenant based on tenant's Pro Rata Share
as defined in Section 1.
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2. RENT. The "Rent" reserved under this Lease, for the Term thereof, shall
consist of the following:
a) "Base Rent" of two thousand five hundred nine dollars ($2,509.00)
per month, which shall be payable in advance on the first day of each and
every calendar month during the Term of this Lease, except that Tenant shall
pay the first month's Base Rent due under the Lease upon the execution and
delivery of this Lease by Tenant; and
b) "Additional Rent" consisting of any and all other sums of money as
shall become payable by Tenant to Landlord hereunder; and Landlord shall have
the same remedies for default in the payment of Additional Rent as for a
default in payment of Base Rent.
c) Notwithstanding anything to the contrary in this Lease, tenant's
obligation to pay Base Rent shall be abated for a period of three (3) months
after the Commencement Date; provided that Tenant shall be immediately
obligated to repay such rental abatement if Tenant defaults hereunder and
fails to cure within the time permitted, and Landlord may draw upon Tenant's
Security Deposit in order to recoup such abated Base Rent in such
circumstances.
2.1 BASE RENT ADJUSTMENT. On each anniversary of the Commencement Date the
monthly Base Rent shall increase by one hundred dollars ($100.00).
2.2 ADDITIONAL RENT. In addition to the Base Rent and all other payments due
under this Lease, Tenant shall pay to Landlord, in the manner set forth
herein, as Additional Rent, the following amounts (collectively the "Rental
Adjustment"):
a) INCREASED INSURANCE. Tenant agrees to pay its Pro Rata Share of
that portion of all Casualty Insurance under Section 2.3e incurred or paid by
Landlord in connection with the ownership and operation of the Building
("insurance") during each Adjustment Period which exceeds the amount of Base
Operating Insurance subject to proration under Section 2.3.2 below. In the
event that Landlord obtains additional coverages or increases the rate of
coverage as of the commencement date of this Lease, Landlord agrees to adjust
Base Year coverage as if such coverage had been included in the Base Year.
Notwithstanding anything to the contrary herein, Landlord agrees that
"Increased Insurance" shall not include any surcharge or unusual rate
increase attributable to any non-office Tenant in the Building.
b) INCREASED TAXES. An amount equal to Tenant's Pro Rata Share of
that portion of Real Estate Taxes paid by Landlord during each Adjustment
Period which exceeds the amount of Base Real Estate Taxes, subject to
proration under Section 2.3.2 below. Notwithstanding anything to the contrary
herein, Tenant's obligation to pay its Pro Rata Share of any increase in Real
Estate Taxes which is attributable to a transfer or change in the ownership
of the Building (the "Increase") shall be limited as follows: if the transfer
or change in ownership occurs during the first year after the Commencement
Date, Tenant shall have no obligation to pay any portion of the Increase; if
the transfer or change in ownership occurs during the second year after the
Commencement Date, Tenant shall pay twenty percent (20%) of the Increase; if
the transfer or change in ownership occurs during the third year after the
Commencement Date, Tenant shall pay forty percent (40%) of the Increase; if
the transfer or change in ownership occurs during the fourth year after the
Commencement Date, and assuming Tenant has exercised its Extension Option,
Tenant shall pay sixty percent (60%) of the Increase; if the transfer or
change in ownership occurs during the fifth year after the Commencement Date,
and assuming Tenant has exercised its Extension Option, Tenant shall pay
eighty percent (80%) of the Increase; and if the transfer or change in
ownership occurs during the sixth year after the Commencement Date, and
assuming Tenant has exercised its Extension Option, Tenant shall pay one
hundred percent (100%) of the Increase.
2.3 DEFINITIONS. For the purposes of this Lease, the following definitions
shall apply:
a) BASE INSURANCE. "Base Insurance" means the total of insurance paid
by Landlord during calendar year 1997 for the Development (the "Base Insurance
Year").
b) BASE REAL ESTATE TAXES. "Base Real Estate Taxes" means the total of
Real Estate Taxes paid by Landlord during tax year 1998-1999 for the
Development (the "Base Tax Year").
c) TENANT'S PRO RATA SHARE. "Tenant's Pro Rata Share" shall mean the
percentage labeled as such in the Table in Section 1, derived as follows:
Tenant's Pro Rata Share is calculated by dividing the agreed area of the
Premises (numerator) by the agreed area of the Development (denominator) and
expressing the resulting quotient as a percentage. Tenant's Pro Rata Share
shall be adjusted during the Term in proportion to any adjustment in the
area of the Premises or Development in accordance with the formula stated
herein.
d) ADJUSTMENT PERIOD. "Adjustment Period" means each calendar year of
which any portion occurs during the Term, excluding the Base Year and
beginning with the first calendar year immediately following the Base Year.
e) INSURANCE. "Insurance" means premiums for any insurance policies
as determined by Landlord in accordance with the reasonable practice of
prudent landlords in the vicinity of the Development (including public
liability, property damage, earthquake if commercially reasonable, and fire
and extended coverage insurance for the full replacement cost of the Building
as required by Landlord or its lenders for the Building).
f) REAL ESTATE TAXES. "Real Estate Taxes" means any and all ad
valorem real property taxes and any form of assessment, levy, charge, fee,
tax, or other imposition imposed by any authority.
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including any city, county, state, or federal governmental agency, or any
school, library, lighting, transportation, housing, drainage, or other
improvement or special assessment district thereof, whether or not now
customary or in the contemplation of the parties hereto, and whether or not
general, special, ordinary, or extraordinary, which Landlord shall pay during
any Adjustment Period because of or in connection with the ownership,
leasing, or operation of the Building.
2.3.1 RECONCILIATION. On or before the first day of April of each year
after the first Adjustment Period (or as soon thereafter as is practical),
Landlord shall deliver to Tenant a statement (the "Statement") setting forth
the Rental Adjustment for the preceding year. Tenant shall pay Landlord the
amount of any rental adjustment within ten (10) days of the receipt of the
Statement. The obligation of Tenant to make payments required under this
Section 2.3.1 shall survive the expiration or earlier termination of the Term
of this Lease.
2.3.2 PRORATION OF RENTAL ADJUSTMENT. If the Term does not commence on
January 1 or does not end on December 31, Tenant's obligations to pay
estimated and actual amounts towards increased Insurance and/or Real Estate
Taxes for such first or final calendar year shall be prorated to reflect the
portion of such year(s) included in the Term. Such proration shall be made by
multiplying the total estimated or actual (as the case may be) increased
insurance and/or Real Estate Taxes, (as the case may be) for such calendar
year(s), as well as the base insurance amount and/or Base Real Estate Taxes,
(as the case may be), by a fraction, the numerator of which shall be the
number of days of the Term during such calendar year, and the denominator of
which shall be three hundred sixty-five (365).
2.4 PAYMENT OF RENT. Tenant shall pay the Base Rent and Additional Rent
promptly when due, without demand therefor and without any abatement,
deduction, or setoff whatsoever, except as may be expressly provided in this
Lease. Tenant shall pay the Rent to Landlord, in lawful money of the United
States of America, at Landlord's office at the Building or at such other
place, or to such agent and at such place, as Landlord may designate by
notice to Tenant. If the Commencement Date occurs on a day other than the
first day of a calendar month, the Base Rent for such calendar month shall be
prorated, and the balance of the first month's Base Rent theretofore paid
shall be credited against the next monthly installment of Base Rent. The Base
Rent for the last month of the lease term shall also be prorated.
2.5 LATE CHARGES. Tenant acknowledges that the late payment of any monthly
Rent will cause Landlord to lose the use of that money and incur costs and
expenses not contemplated under this Lease, including administrative and
collection costs and processing and account expenses, the exact amount of
which it is difficult to ascertain. Therefore, if more than one such
installment within any 12-month period is not received by Landlord within
five (5) days from the date it is due, Tenant shall pay Landlord a late
charge equal to five percent (5%) of such installment. Landlord and Tenant
agree that this late charge represents a reasonable estimate of such costs
and expenses and is fair compensation to Landlord for the loss suffered from
such nonpayment by Tenant. In addition, any check returned by the bank for
any reason will be considered late and will be subject to all late charges
plus a Twenty Dollar ($20.00) fee. After two such occasions in any twelve
(12) month period, Landlord will have the right to require payment by a
cashier's check or money order. Acceptance of any late charge shall not
constitute a waiver of Tenant's default with respect to such nonpayment by
Tenant nor prevent Landlord from exercising any other rights or remedies
available to Landlord under this Lease or at law.
3 SECURITY DEPOSIT. Tenant shall deposit with Landlord the amount of two
thousand five hundred nine dollars ($2,509.00) (the "Security Deposit") upon
Tenant's execution and submission of this Lease to be held, applied and
disposed of pursuant to the provisions of Section 1950.7 of the California
Civil Code. The Security Deposit shall serve as security for the prompt,
full, and faithful performance by Tenant of the terms and provisions of this
Lease. Landlord shall not be required to keep the Security Deposit separate
from Landlord's general funds or pay interest on the Security Deposit.
3.1 APPLICATION OF DEPOSIT. In the event that Tenant is in Default
hereunder and fails to cure within any applicable time permitted under this
Lease, or in the event that Tenant owes any amounts to Landlord upon the
expiration of this Lease, Landlord may use or apply the whole or any part of
the Security Deposit for the payment of Tenant's obligations hereunder. The
use or application of the Security Deposit or any portion thereof shall not
prevent Landlord from exercising any other right or remedy provided hereunder
or under any Law and shall not be construed as liquidated damages.
3.2 RESTORATION OF FULL DEPOSIT. In the event the Security Deposit is
reduced by such use or application, Tenant shall deposit with Landlord,
within ten (10) days after written notice, an amount sufficient to restore
the full amount of the Security Deposit.
3.3 DISPOSITION OF SECURITY DEPOSIT. After the Expiration Date or any
earlier termination of the Lease, any remaining portion of the Security
Deposit shall be returned to Tenant in accordance with the provisions of
Section 1950.7 of the California Civil Code.
4. USE. The Premises are to be for software development and related uses
and for no other purpose without prior written consent of Landlord.
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4.1 PROHIBITED USES. Tenant shall not use any portion of the Premises for
purposes other than those specified hereinabove, and no use shall be made or
permitted to be made upon the Premises, nor acts done, which will increase
the existing rate of insurance upon the property, or cause cancellation of
insurance policies covering said property. Tenant shall not conduct or permit
any sale by auction on the Premises. Tenant shall not use, release or store
or permit the usage, release, or storage of restricted materials or
substances by Department of Health Services, California Water Quality Control
Board, Environmental Protection Agency, or any other governmental agency or
entity, and Tenant shall comply with all environmental laws, regulations,
rules and requirements applicable to Tenant's activities in the Premises.
Tenant shall indemnify, defend and hold Landlord harmless from and against
any claims, judgments, demands, liabilities, costs and expenses (including
reasonable attorney's fees) arising from Tenant's breach of the above
covenants. Tenant shall not commit any waste upon the Premises or any
nuisance or act which may disturb the quiet enjoyment of any tenant in the
Building.
5 CONDITION OF PREMISES. Tenant shall accept the Premises (and the Systems
and Equipment serving the same) in an "as is" condition, except as provided
in paragraph 5.1, on the date the Term commences, and Landlord shall have no
obligation to improve, alter, remodel, or otherwise modify the Premises
prior to Tenant's occupancy.
5.1 NOTICE OF DEFECTS. It shall be conclusively presumed upon Tenant's
taking actual possession of the Premises that the same were in satisfactory
condition (except for latent defects) as of the date of such taking of
possession, unless within thirty (30) days after the Commencement Date Tenant
shall give Landlord notice in writing specifying the respects in which the
Premises were not in satisfactory condition. Landlord agrees to exercise for
Tenant's benefit all of the standard contractor remedies and warranties of at
least one year and any manufacturers warranties for all new Work and as
further provided in Section 5.3 of the Work Letter Agreement.
5.2 SYSTEMS AND EQUIPMENT. As used in this Lease, "Systems and Equipment"
means collectively any existing duct work, intrabuilding network cables and
wires that transmit voice, data, and other telecommunications signals
("INC"), and other equipment, facilities, and systems designed to supply
water, heat, ventilation, air conditioning and humidity or any other services
or utilities, or comprising or serving as any component or portion of the
electrical, gas, steam, plumbing, sprinkler, communications, alarm, security,
or fire/life/safety systems or equipment, or any other mechanical,
electrical, electronic, computer, or other systems or equipment for the
Building. Nothing in this Lease shall be construed to impose upon the Tenant
a general obligation to maintain the Building Systems and Equipment, except
as specifically provided for in this Lease.
6 ASSIGNMENT AND SUBLETTING. Tenant agrees that it shall not assign,
sublet, mortgage, hypothecate, or encumber this Lease, nor permit or allow
the Premises or any part thereof to be used or occupied by others, without
the prior written consent of Landlord in each instance which shall not
unreasonably be withheld or delayed. The actions described in the foregoing
sentence are referred to collectively herein as "Transfers." If the Premises
or any part thereof be sublet or occupied by anybody other than Tenant,
Landlord may, after default by Tenant, collect rent from the subtenant or
occupant and apply the net amount collected to the Rent herein reserved; but
no Transfer, occupancy, or collection shall be deemed a waiver of the
provisions hereof, the acceptance of the subtenant or occupant as tenant, or a
release of Tenant from the further performance hereunder by Tenant. The
consent by Landlord to a Transfer shall not relieve Tenant from obtaining the
Landlord's express written consent to any further Transfer. In no event shall
any permitted sublessee assign or encumber its sublease or further sublet all
or any portion of its sublet space, or otherwise suffer or permit the sublet
space or any part thereof to be used or occupied by others, without
Landlord's prior written consent in each instance which shall not be
unreasonably withheld or delayed. Notwithstanding anything to the contrary
herein, Tenant shall have a one-time right to assign the entire Premises to a
company in which Tenant is a majority shareholder or to the Roda Group
Development Company, LLC, a Delaware limited liability company, without
Landlord's prior consent, provided that (a) Tenant shall obtain in favor of
Landlord a new guarantee from the guarantor of the personal guarantee which
is attached to this Lease as EXHIBIT E, if such guarantee has not already
terminated as defined in Paragraph 11 of EXHIBIT E and (b) Tenant shall
provide to Landlord concurrently with such assignment reasonably satisfactory
evidence of (i) Tenant's majority ownership of assignee and (ii) a financial
strength on the part of such assignee which is at least equal to that of
Tenant.
7 COMPLIANCE WITH LAWS. Tenant shall use the Premises in compliance with
all applicable federal, state, county, and local governmental and municipal
laws, statutes, ordinances, rules, regulations, codes, decrees, orders, and
other such requirements, and decisions by courts in cases where such
decisions are considered binding precedents in the State of California (the
"State"), and decisions of federal courts applying the laws of the State
(collectively "Laws"). Tenant shall, at its sole cost and expense, promptly
comply with each and all of such Laws, and also with the requirements of any
board of fire underwriters or other similar body now or hereafter constituted
to deal with the condition, use, or occupancy of the Premises, except in the
case of required compliance (including, without limitation structural
changes) not triggered by Tenant's change in use of the Premises or Tenant's
alterations, additions, or improvements
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therein. Tenant shall comply with all applicable Laws regarding the physical
condition of the Premises, but only to the extent that the applicable Laws
pertain to the particular manner in which Tenant uses the Premises or the
particular use to which Tenant puts the Premises, if different from that
permitted under Section 4 of this Lease.
7.1 CODE COSTS. Notwithstanding anything to the contrary in this Section
7, if the requirement of any public authority obligates either Landlord or
Tenant to expend money in order to bring the Premises and/or any area of the
Building into compliance with Laws as a result of Tenant's particular use or
alteration of the Premises; Tenant's change in the use of the Premises; the
manner of conduct of Tenant's business or operation of its installations,
equipment, or other property therein; any cause or condition created by or at
the instance of Tenant, other than by Landlord's performance of any work for
or on behalf of Tenant; or breach of any of Tenant's obligations hereunder,
then Tenant shall bear all costs ("Code Costs") of bringing the Premises and/or
Building into compliance with Laws, whether such Code Costs are related to
structural or nonstructural elements of the Premises or Building.
8 HAZARDOUS MATERIALS. Tenant shall not cause or permit to occur (i)
any violation of applicable Laws now or hereafter enacted or issued, related
to environmental conditions on, under, or about the Premises arising from
Tenant's leasehold interest in or use or occupancy of the Premises including,
soil and groundwater conditions and (ii) the use, generation, release,
manufacture, refining, production, processing, storage, or disposal of any
Hazardous Materials on, under, or about the Premises or the Building or the
transportation to or from the Premises or the Building of any Hazardous
Materials, except de minimis amounts of Hazardous Materials that are commonly
used in office products or are present in ordinary cleaning supplies. All
such office products and cleaning supplies will be used and stored in a
manner that complies with all Laws. Tenant shall at its own expense make all
submissions to, provide all information required by, and comply with all
requirements of all governmental authorities under Laws relating to Hazardous
Materials. Should any governmental entity having jurisdiction over the
Premises demand that a remediation plan be prepared or that remediation be
undertaken because of any deposit, spill, discharge, or other release of
Hazardous Materials that occurs during the Term of this Lease at or from the
Premises which arises at any time from Tenant's use or occupancy of the
Premises or from acts or omissions of Tenant, its agents, employees,
representatives, or invitees, then Tenant shall, at its own expense, prepare
and submit the required plans. Tenant shall indemnify, defend, protect, and
hold Landlord, its partners, officers, directors, beneficiaries,
shareholders, agents, employees, and lenders harmless from all fines, suits,
procedures, claims, liabilities, and actions of every kind, and all costs
associated therewith (including investigation costs and attorneys' and
consultants' fees) arising out of or in any way connected with any deposit,
spill, discharge, or other release of Hazardous Materials that occurs during
the Term of this Lease, at or from the Premises which arises at any time from
Tenants's use or occupancy of the Premises or from Tenant's failure to
provide all information, make all submissions, and take all steps requires by
any governmental authorities having jurisdiction over the Premises. Tenant's
obligations and the indemnity hereunder shall survive the expiration or
earlier termination of this Lease. The term Hazardous Materials as used
herein shall include any chemical, substance, or material which has been or
is hereafter determined by any federal, state, or local governmental agency
to be capable of posing a risk of injury to health or safety including
petroleum, asbestos, polychlorinated biphenyls, radioactive materials, and
radon gas.
9 MAINTENANCE, REPAIRS, ALTERATIONS. Subject to Tenant's rights under
Section 5.4 above and Section 5.3 of the Work Letter Agreement, after
completion of Landlord's Work, pursuant to Section 5 Tenant shall, at his own
expense and at all times, maintain the Premises in good and safe condition,
including plate glass and any existing or future intrabuilding alarm,
computer, or network cables and wires that transmit voice, data, and other
telecommunications signals ("INC"), and any other existing or future exposed
equipment or system comprising or supplying water, gas, electricity, HVAC,
communications, alarms, fire/safety, sprinkler, plumbing or appliances for
the Premises and shall surrender the same at termination hereof in as good
condition as received, normal wear and tear excepted. Tenant shall be
responsible for all repairs for such exposed equipment or systems required,
excepting the roof, skylights, exterior walls, and structural foundations,
which shall be maintained by Landlord. Notwithstanding Tenant's foregoing
maintenance and repair responsibility, Tenant shall not be responsible to
replace any systems or equipment where such replacement would be deemed a
capital replacement as opposed to a repair under generally-accepted
accounting principles, unless such replacement has been caused solely by
Tenant's negligence, wilfull misconduct, or failure to maintain as required
hereunder. Landlord shall maintain in good condition the common areas of the
property, such as sidewalks, driveways, lawns, and shrubbery. No improvement
or alteration of the Premises shall be made without the prior written consent
of the Landlord, which shall not be unreasonably withheld or delayed. Prior
to the commencement of any substantial repair (except in an emergency
provided that Tenant shall notify Landlord as soon as reasonably possible),
improvement, or alteration, Tenant shall give Landlord at least five (5)
days' written notice in order that Landlord may post appropriate notices of
nonresponsibility to avoid any liability for liens for any such work of
improvement on the Premises.
10. ENTRY AND INSPECTION. Tenant shall permit Landlord or Landlord's
agents to enter upon the Premises at reasonable times and upon reasonable
notice for the purpose of inspecting the same, will permit Landlord at any
time within one hundred twenty (120) days prior to the expiration of this
Lease to place
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upon the Premises any usual and reasonable "To Lease" or "Available" signs,
and will permit persons desiring to lease the same to inspect the Premises
thereafter.
11 INDEMNIFICATION OF LANDLORD. Tenant agrees to assume the defense of
and indemnify and save harmless Landlord from all claims, liability, loss,
damage, injury, including physical injury of Tenant's employees directly or
indirectly arising from the performance of this Lease, from tenant's
occupation or use of the Premises, or arising out of the failure of Tenant to
provide a "safe place to work" and from any and all claims, liability, loss,
damage, injury, including physical injury or death and liability therefor
caused or incurred, including injury or death of Tenant's business invitees
and social guests, resulting directly or indirectly from Tenant's occupancy
of the Leased Premises covered by this Lease. Tenant's duties to defend,
indemnify and save harmless shall apply to liability incurred or claimed as a
result of negligence or willful misconduct, regardless of responsibility for
such negligence or willful misconduct unless Landlord, its employees or
agents were solely negligent in the matters complained of.
12 LANDLORD'S INSURANCE. Landlord shall, as part of Insurance expenses,
maintain "all risk" property damage insurance containing an agreed amount
endorsement covering not less than one hundred percent (100%) of the full
insurable replacement cost valuation of the Building and the tenant
improvements, betterments, and the alterations thereto; and Landlord's
personal property, business papers, furniture, fixtures, and equipment
(collectively "Landlord's Property"), exclusive of the costs of excavation,
foundations, footings, and risks required to be covered by Tenant's
insurance, and subject to commercially reasonable deductibles. Landlord shall
also, as part of insurance expenses, obtain and keep in full force the
following policies of insurance: commercial general liability insurance;
workers' compensation insurance, if required by applicable Law; and such
other insurance as Landlord deems appropriate or as may be required by any
Holder or ground lessor. Landlord's insurance shall be issued by insurance
companies authorized to do business in the State of California with a
financial rating of at least B+ for any property insurance and at least B+
for any liability insurance, as rated in the most recent edition of Best's
Insurance Reports;
13 TENANT'S INSURANCE. Tenant shall obtain and maintain in effect at all
times during Tenant's possession of the Premises the following insurance
coverages and policies:
(a) LIABILITY INSURANCE. Tenant shall maintain a policy of
commercial general liability insurance, which shall include coverages for (i)
bodily injury; (ii) property damage; and (iii) personal property. The minimum
limits of liability shall be a combined single limit with respect to each
occurrence of not less than One Million Dollars ($1,000,000) and an aggregate
limit of not less than Two Million Dollars ($2,000,000). The policy shall
contain a cross-liability endorsement and a severability of interest clause.
(b) TENANT'S BUSINESS PERSONAL PROPERTY INSURANCE. Tenant shall
maintain on all of its business personal property, including valuable
business papers and accounts receivable; operating supplies; inventory; and
furniture, fixtures, and equipment (whether owned, leased, or rented)
(collectively "Business Personal Property") and "all risk" property damage
insurance policy including coverages for sprinkler leakage and containing an
agreed amount endorsement (or, if applicable, a business owner's policy with
a no-coinsurance provision) in an amount not less than one hundred percent
(100%) of the full replacement cost valuation of such Business Personal
Property, if available. The proceeds from any such policy shall be used by
Tenant for the replacement of such Business Personal property.
(c) BUSINESS INTERRUPTION/EXTRA EXPENSE INSURANCE. Tenant shall
maintain business interruption or (if applicable) contingent business
interruption and extra expense insurance in such amounts as will adequately
reimburse Landlord for any item or expense enumerated in this agreement. If
Tenant's business interruption or (if applicable) contingent business
interruption and extra expense insurance proceeds are insufficient to cover
all of Tenant's obligations, Landlord shall be paid before any other creditor.
Such insurance will be carried with the same insurer that issues the
insurance for Tenant's Business Personal Property pursuant to Section 13(b).
(d) WORKER'S COMPENSATION INSURANCE. Tenant shall maintain worker's
compensation insurance as required by the State of California.
(e) TENANT'S LIABILITY LIMITATION. Except with respect to any
intentional tort, under no circumstance shall Tenant ever be liable for
consequential damages, including damages for lost profits or business
interruption.
13.1 TENANT'S INSURANCE CRITERIA. All insurance required to be maintained
by Tenant under this Lease shall conform to the following criteria:
(a) Tenant's insurance shall be issued by insurance companies
authorized to do business in the State of California with a financial rating
of at least B+ for any property insurance and at least B+ for any liability
insurance, as rated in the most recent edition of Best's Insurance Reports;
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(b) Tenant's insurance shall be issued as primary and
noncontributory;
(c) Tenant's liability and property insurance policies shall name
Landlord as the additional named insured and Landlord, Landlord's agents, and
any ground lessors and Holders (as such terms are defined in Section 27)
whose names shall have been furnished to Tenant as additional named insureds;
(d) Tenant's insurance shall contain an endorsement requiring at
least thirty (30) days written notice from the insurance company to each
insured and additional insured before cancellation or any material change in
the coverage, scope, or amount of any policy; and
(e) with respect to damage to or loss of Tenant's Business Personal
Property, a waiver of subrogation must be obtained, as required under Section
14 below.
13.2 BLANKET COVERAGE. All of the insurance requirements set forth herein
on the part of Tenant to be observed shall be deemed satisfied if the
Premises are covered by a blanket insurance policy complying with the limits,
requirements, and criteria contained in this Article insuring all or most of
Tenant's facilities in California.
13.3 EVIDENCE OF COVERAGE. A duplicate original policy or a certificate of
insurance shall be deposited with Landlord at the commencement of the Term
or, if earlier, upon Tenant's taking possession of the Premises; and on
renewal of the policy a certificate of insurance listing the insurance
coverages required hereunder and naming the appropriate additional insureds
shall be deposited with Landlord not less than seven (7) days before
expiration of the policy.
14 WAIVER OF SUBROGATION. To the maximum extent permitted by insurance
policies which Landlord and Tenant are required to maintain under Sections 12
and 13 above, Tenant and Landlord, for the benefit of each other, waive any
and all rights of subrogation which might otherwise exist. Landlord and
Tenant intend that their respective property loss risks shall be borne by
responsible insurance carriers to the extent above provided, and Landlord and
Tenant hereby agree to look solely to, and seek recovery only from, their
respective insurance carriers in the event of a property loss to the extent
that such coverage is agreed to be provided hereunder. The parties each
hereby waive all rights and claims against each other for such losses and
waive all rights of subrogation of their respective insurers, provided such
waiver of subrogation shall not affect the right of the insured to recover
thereunder. The parties agree that their respective insurance policies are
now, or shall be, endorsed such that said waiver of subrogation shall not
affect the right of the insured to recover thereunder, so long as no material
additional premium is charged therefor.
15 UTILITIES. Tenant shall be responsible for the payment directly to
their suppliers of the charges for all utilities (except water, which shall
be supplied by Landlord as part of Operating Expenses), including, gas,
electricity, heat, and other services delivered to or consumed in the
Premises. If any such services are not separately metered to Tenant, Tenant
shall pay to Landlord pursuant to Section 2.2 a reasonable proportion, as
determined by Landlord, of all charges jointly metered with other premises.
15.1 INTERRUPTION OF SERVICES. Landlord does not warrant that any services
or utilities provided hereunder for Tenant's use in the Premises will be free
from shortages, failures, variations, or interruptions caused by repairs,
maintenance, replacements, improvements, alterations, changes of service,
strikes, lockouts, labor controversies, accidents, inability to obtain
services, fuel, steam, water or supplies, governmental requirements or
requests, or other causes beyond Landlord's reasonable control, including
interference with light or other incorporated hereditaments and any
interruption in services or any failure to provide services to Landlord by a
designated utility company at the demarcation point at which Landlord accepts
responsibility for such service or at any point prior thereto, which
interference impedes Landlord in furnishing plumbing, HVAC, electrical,
sanitary, life safety, elevator, telecommunications, or other Building
services, utilities, or the Systems and Equipment. None of the same shall be
deemed an eviction or disturbance of Tenant's use and possession of the
Premises or any part thereof, shall render Landlord liable to Tenant for
abatement of Rent, or shall relieve Tenant from performance of Tenant's
obligations under this Lease. Landlord in no event shall be liable for
damages by reason of loss of profits, business interruption, or other
compensatory or consequential damages.
16 SIGNS. Landlord reserves the exclusive right to the roof, side and
rear walls of the Premises. Tenant shall not construct any projecting sign or
awning without the prior written consent of Landlord, which shall not be
unreasonably withheld or delayed.
17 CONDEMNATION. If any part of the Premises shall be taken or condemned
for public use, and a part thereof remains which is susceptible of occupation
hereunder, this Lease shall, as to the part taken, terminate as of the date
the condemnor acquires possession, and thereafter Tenant shall be required to
pay such proportion of the rent for the remaining term as remaining square
footage of the Premises bears to the total original square footage of the
Premises at the date of condemnation; provided, however, that Landlord at its
option may terminate this Lease as of the date the condemnor acquires
possession. In the event that the demised Premises are condemned in whole, or
that a portion is condemned of such size that the remainder is not suitable
for Tenant's beneficial enjoyment of the Premises for their intended
purposes, this
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Lease shall terminate upon the date upon which the condemner acquires
possession. All sums which may be payable on account of any condemnation shall
belong to the Landlord, and Tenant shall not be entitled to any part thereof;
provided however, that Tenant shall be entitled to retain any amount awarded to
him for his trade fixtures or moving expenses.
18 SURRENDER AND RESTORATION. At or before the Expiration Date or the
date of any earlier termination of this Lease, or as promptly as practicable
using Tenant's best efforts after such an earlier termination date, Tenant, at
its expense, shall do all of the following:
(a) surrender possession of the Premises in the condition required
under Section 9, ordinary wear and tear excepted;
(b) surrender all keys, any key cards, and any parking stickers or
cards to Landlord and give Landlord in writing the combinations of any locks
or vaults then remaining in the Premises;
(c) remove from the Premises all of Tenant's Property, except such
items thereof as Tenant shall have expressly agreed in writing with Landlord
were to remain and to become the property of Landlord; and
(d) fully repair any damage to the Premises or the Property resulting
from such removal.
Tenant's obligations herein shall survive the termination of the Lease. All
improvements and other items in or upon the Premises (except Tenant's
Property), whether installed by Tenant or Landlord, shall be Landlord's
property and shall remain upon the Premises, all without compensation,
allowance, or credit to Tenant; provided, however, that if prior to such
termination Landlord so directs by notice, Tenant shall promptly remove such
of the Improvements in the Premises as are designated in such notice and
shall restore the Premises to their condition prior to the installation of
such Improvements. Notwithstanding the foregoing, Landlord shall not require
removal of customary office improvements installed pursuant to the Work Letter
Agreement, if any (except as expressly provided to the contrary therein), or
installed by Tenant with Landlord's written approval (except as expressly
required by Landlord in connection with granting such approval).
18.1 TENANT'S FAILURE TO REMOVE OR RESTORE. If Tenant shall fail to perform
any repairs or restoration or fail to remove any items from the Premises as
required under this Section 18, Landlord may do so, and Tenant shall pay
Landlord the cost thereof upon demand. All property removed from the Premises
by Landlord pursuant to any provisions of this Lease or any Law may be
handled or stored by Landlord at Tenant's expense, and Landlord shall in no
event be responsible for the value, preservation, or safekeeping thereof. All
property not removed from the Premises or retaken from storage by Tenant
within thirty (30) days after expiration or earlier termination of this Lease
or Tenant's right to possession shall at Landlord's option be conclusively
deemed to have been conveyed by Tenant to Landlord as if by bill of sale
without payment by Landlord. Unless prohibited by applicable Laws, Landlord
shall have a lien against such property for the costs incurred in removing
and storing the same.
19 DESTRUCTION OF PREMISES. Landlord and Tenant agree that their
respective rights and obligations in the event of any damage or destruction
of the Premises or Building shall be governed exclusively by this Lease.
Tenant, as a material inducement to Landlord entering into this Lease,
irrevocably waives and releases Tenant's rights under California Civil Code
Sections 1932(2), 1933(4), and 1942, as the same may be modified or replaced
hereafter. No damages, compensation, or claim shall be payable by Landlord for
any inconvenience, interruption, or cessation of Tenant's business or any
annoyance arising from any damage to or destruction of all or any portion of
the Premises or Building.
19.1 PARTIAL DESTRUCTION OF PREMISES. In the event of a partial
destruction of the Premises during the term hereof from any cause, Landlord
shall forthwith repair the same at Landlord's expense, provided that such
repairs can be made within sixty (60) days under existing Laws; but such
partial destruction shall not terminate this Lease, except that Tenant shall
be entitled to a proportionate reduction of Rent while such repairs are being
made, based upon the extent to which the making of such repairs shall
interfere with Tenant's beneficial enjoyment of the Premises for their
intended purposes. If such repairs cannot be made within sixty (60) days,
Landlord, at his option may make the same within a reasonable time, this
Lease continuing in effect with the rent proportionately abated as aforesaid;
and in the event that Landlord shall not elect to make such repairs which
cannot be made within sixty (60) days, this Lease may be terminated by either
party upon written notice, effective as of the date of such notice.
Notwithstanding the foregoing, if all repairs cannot be completed or are not
actually completed within one hundred eighty (180) days of the date of damage
Tenant may terminate this Lease at its option.
19.2 DESTRUCTION OF BUILDING. In the event that the Building is destroyed
to an extent of not less than one-third of the replacement costs thereof,
either party may elect to terminate this Lease, whether the Premises be
injured or not. A total destruction of the Building shall terminate this
Lease.
19.3 DISPUTES. In the event of any dispute between Landlord and Tenant with
respect to the provisions hereof, the matter shall be settled by arbitration
in accordance with the provisions of Section 26 below.
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20 TENANT'S DEFAULT. The occurrence of any one or more of the following
events shall constitute a material breach and default ("Event of Default") of
this Lease by Tenant:
(a) Tenant's failure to pay any Rent or any other charges required to
be paid by Tenant under this Lease, where such failure continues for five (5)
days after written notice from Landlord that such payment is due and payable
provided, however, that such written notice will no longer be required if
Landlord has issued two or more during any 12-month period;
(b) Tenant's failure promptly and fully to perform any other covenant,
condition, or agreement contained in this Lease, where such failure continues
for thirty (30) days after written notice thereof from Landlord to Tenant;
(c) Tenant's failure to comply with the Rules, unless such failure is
cured within five (5) days after notice; provided, that if the nature of
Tenant's failure is such that more than five (5) days are reasonably required
in order to cure, Tenant shall not be in Default if Tenant commences to cure
within such period and thereafter diligently and continuously prosecutes such
cure to completion;
(d) Tenant's abandonment or vacation of the Premises;
(e) any material misrepresentation or omission herein or in any
financial statements or other materials provided by Tenant or any Guarantor
in connection with negotiating or entering this Lease or in connection with
any Transfer under Section 6;
(f) cancellation of any guaranty of this Lease by any Guarantor;
(g) failure by Tenant to cure within any applicable times permitted
thereunder any default under any other lease for space in any other building
owned or managed by Landlord or its affiliates now or hereafter entered by
Tenant; and any Default hereunder not cured within the times permitted for
cure herein shall, at Landlord's election, constitute a default under any
other such lease or leases;
(h) The levy of a writ of attachment or execution on this Lease or on
any of Tenant's property;
(i) Tenant's or any Guarantor's general assignment for the benefit of
creditors or arrangement, composition, extension, or adjustment with its
creditors; or
(j) In any proceeding or action in which Tenant is a party, the
appointment of a trustee, receiver, agent, or custodian to take charge of the
Premises or Tenant's Property for the purpose of enforcing a lien against the
Premises or Tenant's Property.
The parties expressly agree that any notice which Landlord may give to Tenant
that an Event of Default has occurred under this Section 20 shall satisfy the
requirements of Section 1161 of the California Code of Civil Procedure, and
it shall not be necessary to give another notice to Tenant under Section
1161.
20.1 LANDLORD'S REMEDIES. Upon the occurrence of an Event of Default
hereunder, Landlord shall have the right, in addition to any other rights or
remedies Landlord may have, at Landlord's option, without further notice or
demand of any kind, to elect to do one of the following alternatives:
(i) Terminate this Lease and Tenant's right to possession of the Premises,
re-enter the Premises, and take possession thereof; and Tenant shall have no
further claim to the Premises or under this Lease; or
(ii) Continue this Lease in effect and collect any unpaid Rent or other
charges which have theretofore accrued or which thereafter become due and
payable. It is intended hereunder that Landlord have the remedy described in
California Civil Code Section 1951.4, which provides that a landlord may
continue a lease in effect after a tenant's breach and abandonment and
recover rent as it becomes due, if tenant has the right to sublease or
assign, subject only to reasonable limitations.
In the event of any re-entry or retaking of possession by Landlord, Landlord
shall have the right, but not the obligation, to remove all or any part of
Tenant's Property from the Premises and to place such property in storage at
a public warehouse at the expense and risk of Tenant.
20.2 NO WAIVER OF DEFAULT. The waiver by Landlord of any Event of Default
or of any other breach of any term, covenant, or condition of this Lease
shall not be deemed a waiver of such term, covenant, or condition or of any
subsequent breach of the same or any other term, covenant, or condition.
Acceptance of Rent by Landlord subsequent to any Event of Default or breach
hereof shall not be deemed a waiver of any preceding Event of Default or
breach other than the failure to pay the particular Rent so accepted,
regardless of Landlord's knowledge of any breach at the time of such
acceptance of Rent. Neither Landlord nor Tenant shall be deemed to have
waived any term, covenant, or condition of this Lease, unless the waiving
party gives the other party written notice of such waiver. Neither Landlord
nor Tenant should rely upon the other party's failure or delay in enforcing
any right or remedy hereunder.
20.3 LANDLORD'S RIGHT TO CURE. If Tenant defaults in the performance of
any of its obligations under this Lease, Landlord may (but shall not be
obligated to), without waiving such default, perform the same for the account
and at the expense of Tenant. Tenant shall pay Landlord all costs of such
performance promptly upon receipt of a bill therefor.
20.4 DAMAGES. Should Landlord elect to terminate this Lease under the
provisions of Section 20.1(i) above, Landlord may recover as damages from
Tenant the following:
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(a) PAST RENT: The worth at the time of the award of any unpaid Rent
which had been earned at the time of termination; plus
(b) RENT PRIOR TO AWARD: The worth at the time of the award of the
amount by which the unpaid Rent which would have been earned after
termination until the time of award exceeds the amount of such rental loss
that Tenant proves could have been reasonably avoided; plus
(c) RENT AFTER AWARD: The worth at the time of the award of the
amount by which the unpaid Rent for the balance of the Term after the time of
award exceeds the amount of the rental loss that Tenant proves could have
been reasonably avoided; plus
(d) SUBSTANTIALLY CAUSED DAMAGES: Any other amount necessary to
compensate Landlord for all detriment proximately caused by Tenant's failure
to perform its obligations under this Lease, including, but not limited to,
any costs or expenses (including attorneys' fees), incurred by Landlord in
(i) retaking possession of the Premises; (ii) maintaining the Premises after
Tenant's default; (iii) preparing the Premises for reletting to a new tenant,
including any repairs or alterations; and (iv) reletting the Premises,
including brokers' commissions.
"The worth at the time of the award" as used in subsections (a) and (b) above
is to be computed by allowing interest at the rate of ten percent (10%) per
annum. "The worth at the time of the award" as used in subsection (c) above
is to be computed by discounting the amount at the discount rate of the
Federal Reserve Bank situated nearest to the Premises at the time of the
award plus one percent (1%).
21 RULES. Tenant agrees that it will abide by, keep and observe all
reasonable rules and regulations which Landlord may make from time to time
for the management, safety, care, and cleanliness of the Building and
grounds, the parking of vehicles and the preservation of good order herein as
well as for the convenience of other occupants and tenants of the Building.
The violations of any such rules and regulations shall be deemed a material
breach of this Lease by Tenant.
22 NOTICES. Any notice required or permitted under this Lease shall be
in writing and shall be delivered in at least one of the following ways:
personally or by private hand-delivery messenger service; by depositing the
same in the United States mail, postage prepaid, registered or certified,
return receipt requested; or by depositing such notice, postage prepaid, with
Federal Express, DHL, UPS, or another nationally-recognized private overnight
delivery service. Each such notice shall be addressed to the intended
recipient at such party's address set forth as follows, or at such other
address as such party has theretofore specified by written notice delivered
in accordance with this Section 22:
if to Landlord:
Attn: Michael Goldin
720 Channing Way
Berkeley, CA 94710
if to Tenant:
Ask Jeeves, Inc.
2607 7th Street
Berkeley, CA 94710
Attn: President
---------
Every notice given to a party shall state the section of the Lease pursuant
to which the notice is given and the period of time within which the
recipient of the notice must respond.
23 HOLDING OVER. Any holding over after the expiration of this Lease,
with the consent of Landlord, shall be construed as a month-to-month tenancy
at a base monthly rental of one hundred and fifty percent (150%) of the
monthly rental which was in effect under the Lease on the Expiration Date,
and otherwise in accordance with the terms hereof, as applicable, except that
Tenant shall have no extension or renewal option.
24 OPTION TO RENEW. Tenant is hereby granted one (1) option to extend
(the "Extension Option") the Term of the Lease for a period of three (3)
Lease Years (the "Extension Period"). The Extension Period term shall begin
the first day following the Expiration Date and shall take effect on the same
terms and conditions in effect under the Lease immediately prior to the first
Extension Period, except that monthly Base Rent shall be two thousand eight
hundred nine dollars ($2,809.00).
24.1 EXERCISE OF OPTION. The Extension Option may be exercised only by
giving Landlord written notice of Tenant's irrevocable election to exercise
no earlier than ten (10) months and no later than six (6) months prior to the
commencement of the Extension Period.
24.2 FAILURE TO EXERCISE. If Tenant shall fail validly and timely to
exercise the option herein granted, said option shall terminate and shall be
null and void and of no further force and effect.
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24.3 DEFAULT. Tenant's exercise of the Option shall, at Landlord's
election, be null and void if an Event of Default exists on the date of
Tenant's notice of exercise and such Default is not cured within the
applicable cure period, or at any time thereafter and prior to commencement
of the relevant Extension Period and such Default is not cured within the
applicable cure period. Tenant's exercise of the Extension Option shall not
operate to cure a xxx Default by Tenant nor to extinguish or impair any
rights or remedies of Landlord arising by virtue of such Default. If the
Lease or Tenant's right to possession of the Premises shall terminate before
Tenant shall have exercised the Extension Option, then immediately upon such
termination the Extension Option shall simultaneously terminate and become
null and void.
24.4 TIME. Time is of the essence of the Extension Options granted
hereunder.
25 ESTOPPEL CERTIFICATE. Tenant shall at any time upon not less than ten
(10) days' prior written notice from Landlord execute, acknowledge, and
deliver to Landlord a statement in writing certifying (a) that this Lease is
unmodified and in full force and effect (or, if modified, stating the nature
of such modification and certifying that this Lease, as so modified, is in
full force and effect), the amount of any security deposit, and the date to
which the rent and other charges are paid in advance, if any; and (b)
acknowledging that there are not, to Tenant's knowledge, any uncured defaults
on the part of Landlord hereunder, or specifying such defaults if any are
claimed. Any such statement may be conclusively relied upon by any
prospective purchaser or encumbrancer to the Premises. At Landlord's option,
Tenant's failure to deliver such statement within such time shall be a
material breach of this Lease or shall be conclusive upon Tenant that (i)
this Lease is in full force and effect, without modification except as may be
represented by Landlord, (ii) there are no uncured defaults in Landlord's
performance, and (iii) not more than one month's rent has been paid in
advance or such failure may be considered by Landlord as a default by Tenant
under this Lease. If Landlord desires to finance, refinance, or sell the
Premises, or any part thereof, Tenant hereby agrees to deliver to any lender
or purchaser designated by Landlord summary financial statements of Tenant as
may be reasonably required by such lender or purchaser. All such financial
statements shall be received by Landlord and such lender or purchaser in
confidence and shall be used only for the purposes herein set forth.
25.1 SUBORDINATION, NON-DISTURBANCE, AND ATTORNMENT. With respect to
Security Devices entered into by Landlord after execution of this Lease,
Tenant's subordination of this Lease shall be subject to receiving assurance
(a "non-disturbance agreement") from the Lender that Tenant's possession and
this Lease, including any options to extend the term hereof, will not be
disturbed so long as Tenant is not in Breach hereof and attorns to the record
owner of the Premises. Landlord agrees to use reasonable commercial efforts
to obtain from the current lender on the Building a nondisturbance agreement
for Tenant within a reasonable period before or after the Commencement Date.
26 ARBITRATION. In the event of any dispute between Landlord and Tenant
arising under this Lease that is not resolved by the parties within ten (10)
days after the date either party gives notice to the other of its desire to
arbitrate the dispute (the "Outside Agreement Date"), the dispute shall be
settled by binding arbitration as provided in this Section 26; provided,
however, that nothing in this Section 26 shall limit Landlord's right to
bring an unlawful detainer action against Tenant if appropriate. All
arbitration proceedings shall be conducted at Berkeley, California. Judgment
upon the arbitration award may be entered in any court having jurisdiction.
The arbitrators shall have no power to change the Lease provisons. Both
parties shall continue performing their Lease obligations pending the award
in the arbitration proceeding. The arbitrators shall award the prevailing
party reasonable expenses and costs, including reasonable attorneys' fees
pursuant to Section 26.2 below, plus interest on the amount due at ten
percent (10%) per annum or the maximum then allowed by Law, whichever is less.
26.1 PROCEDURE. Not later than fifteen (15) days following the Outside
Agreement Date, the party demanding arbitration shall submit the matter to
arbitration under the current rules of the American Arbitration Association
including their rules relating to discovery, but subject to any definitions
or sections of the Lease which may be applicable to the dispute under
submission, and shall request a list of potential arbitrators from whom an
arbitrator shall be selected in accordance with the rules of the American
Arbitration Association.
26.2 PAYMENT. The losing party shall pay to the prevailing party the
amount of the final arbitration award. If payment is not made within ten
(10) business days after the date the arbitration award is no longer
appealable, then in addition to any remedies under the law, if Landlord is
the prevailing party, it shall have the same remedies for failure to pay the
arbitration award as it has for Tenant's failure to pay Rent; and if Tenant
is the prevailing party, it may deduct any remaining award from its monthly
payment of Rent or other charges.
27 SUBORDINATION. Tenant agrees that this Lease shall be automatically
subordinate to any mortgage or trust deeds that are now or may hereafter be
placed upon said Premises. Notwithstanding the foregoing, Tenant agrees that
any mortgagee of the Building, the holder of any note, or beneficiary of any
deed of trust (collectively "Holders") encumbering the Building shall have
the right upon written notice to Tenant to subordinate the lien of any such
note or deed of trust to this Lease.
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28 LANDLORD'S LIABILITY. The liability of Landlord to Tenant for any
default by Landlord under this Lease or arising in connection herewith or
with Landlord's operation, management, leasing, repair, renovation,
alteration, or any other matter relating to the Building or the Premises
shall be limited to Landlord's insurance in a minimum amount of three million
dollars ($3,000,000) combined plus the interest of Landlord in the
Development (and the rental proceeds thereof) except with respect to any
intentional tort. Under no circumstances shall Landlord ever be liable for
consequential or punitive damages, including damages for lost profits or for
business interruption. Tenant agrees to look solely to Landlord's interest
in the Development (and the rental proceeds thereof) for the recovery of any
judgment against Landlord, and Landlord shall not be personally liable for
any such judgment or deficiency after execution thereon. The limitations of
liability contained in this Section 28 shall apply equally and inure to the
benefit of Landlord's present and future partners, beneficiaries, officers,
directors, trustees, shareholders, agents, and employees, and their
respective partners, heirs, successors, and assigns. Under no circumstances
shall any present or future general or limited partner of Landlord (if
Landlord is a partnership), or trustee or beneficiary (if Landlord or any
partner of Landlord is a trust) have any liability for the performance of
Landlord's obligations under this Lease.
28.1 LIABILITY UPON TRANSFER. The term Landlord as used herein shall mean
only the owner or owners, at the time in question, of the fee title of leased
Premises and in the event of any transfer of such title or interest, Landlord
herein named shall be relieved from and after the date of such transfer of
all liability as respects Landlord's obligations thereafter to be performed,
provided that any funds in the hands of Landlord at the time of such
transfer, in which Tenant has an interest, shall be delivered to the grantee.
The obligations contained in this Lease to be performed by Landlord shall,
subject as aforesaid, be binding on Landlord's successors and assigns, only
during their respective periods of ownership.
29 FIRST SOURCE AGREEMENT. (For five or more employees) Tenant
represents that it has fewer than five (5) employees as of the Commencement
Date of the Lease and as such is not subject to the requirement to enter into
a First Source Agreement with the City of Berkeley.
30 MISCELLANEOUS. The following provisions shall apply generally to
terms, provisions, and covenants of this Lease:
30.1 NO OFFER. The submission of this document for examination and
negotiation does not constitute an offer to lease, or a reservation of, or
option for, the Premises. This document becomes effective and binding only
upon execution and delivery hereof by Tenant and by Landlord. No act or
omission of any employee or agent of Landlord or of Landlord's broker shall
alter, change, or modify any of the provisions hereof.
30.2 NO PARTNERSHIP. It is expressly understood that Landlord does not, in
any way or for any purpose, become a partner of Tenant in the conduct of its
business, or otherwise, or joint adventurer or a member of a joint enterprise
with Tenant, and that the provisions of this Lease relating to the percentage
rental payable hereunder, if any, are included solely for the purpose of
providing a method whereby the rental is to be measured and ascertained.
30.3 HEIRS, ASSIGNS, SUCCESSORS. This Lease is binding upon and inures to
the benefit of the heirs, assigns and successors in interest to the parties.
30.4 TIME. Time is of the essence of this Lease.
30.5 WAIVER. No failure of Landlord or Tenant to enforce any term hereof
shall be deemed to be a waiver.
30.6 ATTORNEY'S FEES. In case arbitration or suit should be brought for
recovery of the Premises, or for any sum due hereunder, or for any breach
hereunder by either Tenant or Landlord, or because of any act or omission
which may arise out of the possession of the Premises, by either party, the
prevailing party shall be entitled to all costs incurred in litigation,
arbitration, or otherwise in connection with such action, including a
reasonable attorneys' fee.
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31 ENTIRE AGREEMENT. This Lease, together with its exhibits, contains
all the agreements of the parties hereto and supersedes any previous
negotiations. There have been no representations made by the Landlord or
Tenant or understandings made between the parties other than those set forth
in this Lease and its exhibits. This Lease may not be modified except by a
written instrument duly executed by the parties hereto.
IN WITNESS WHEREOF Landlord and Tenant have executed this Lease as of
the date first-above written.
Landlord: EAT/WORK DEVELOPMENT, LP, a California limited partnership
By: /s/ Michael Goldin
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Michael Goldin, General Partner
Tenant: ASK JEEVES, INC., a California corporation
By: /s/ Dan Miller
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Dan Miller
Its: President
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EXHIBIT A
BUILDING
[BLUEPRINT] [GRAPHIC]
Eat/Work
Development
918 PARKER ST
BUILDING B
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EXHIBIT B
[BLUEPRINT] [GRAPHIC]
Eat/Work
Development
918 PARKER ST
BUILDING B
UNIT DIAGRAM
N.T.S.
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EXHIBIT C
This Commencement Date agreement is attached to that certain lease dated May
15, 1998 between Eat/Work Development, LP, a California limited partnership
and ASK JEEVES, Inc., a California corporation ("Tenant") for the Premises as
described in the Lease. Landlord and Tenant agree that the Commencement Date
pursuant to Section 1.4 of the Lease shall be 5/15/98 for all purposes
thereunder.
Landlord: EAT/WORK DEVELOPMENT, LP, a California limited partnership
By: /s/ Michael Goldin
----------------------------------------
Michael Goldin, General Partner
Tenant: ASK JEEVES, INC., a California corporation
By: /s/ Dan Miller
----------------------------------------
Dan Miller
Its: President
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