California-Oakland-1111 Broadway Lease - Oakland City Center LLC and Ask Jeeves Inc.
1111 BROADWAY
OFFICE LEASE
OAKLAND CITY CENTER LLC,
a Delaware limited liability company,
Landlord
and
ASK JEEVES, INC.,
a Delaware corporation,
Tenant
DATED AS OF: February __, 2000
TABLE OF CONTENTS
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Paragraph Page
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<S> <C> <C>
1. Premises ......................................................................1
2. Certain Basic Lease Terms .....................................................1
3. Term; Delivery of Possession of Premises ......................................2
4. Condition of Premises .........................................................2
5. Monthly Rent ..................................................................5
6. Letter of Credit. .............................................................6
7. Additional Rent: Increases in Operating Expenses and Tax Expenses .............6
8. Use of Premises; Compliance with Law ..........................................9
9. Alterations and Restoration ..................................................10
10. Repair .......................................................................11
11. Abandonment ..................................................................11
12. Liens ........................................................................12
13. Assignment and Subletting ....................................................12
14. Indemnification of Landlord ..................................................15
15. Insurance ....................................................................15
16. Mutual Waiver of Subrogation Rights ..........................................16
17. Utilities ....................................................................16
18. Personal Property and Other Taxes ............................................18
19. Rules and Regulations ........................................................18
20. Surrender; Holding Over ......................................................18
21. Subordination and Attornment .................................................19
22. Financing Condition ..........................................................19
23. Entry by Landlord ............................................................19
24. Insolvency or Bankruptcy .....................................................20
25. Default and Remedies .........................................................20
26. Damage or Destruction ........................................................22
27. Eminent Domain ...............................................................23
28. Landlord's Liability; Sale of Building .......................................23
29. Estoppel Certificates ........................................................24
30. Right of Landlord to Perform .................................................24
31. Late Charge ..................................................................24
32. Attorneys' Fees; Waiver of Jury Trial ........................................25
33. Waiver .......................................................................25
34. Notices ......................................................................25
35. Notice of Surrender ..........................................................25
36. Defined Terms and Marginal Headings ..........................................25
37. Time and Applicable Law ......................................................26
38. Successors ...................................................................26
39. Entire Agreement; Modifications ..............................................26
40. Light and Air ................................................................26
41. Name of Building .............................................................26
42. Severability .................................................................26
43. Authority ....................................................................26
44. No Offer .....................................................................26
45. Real Estate Brokers ..........................................................26
46. Consents and Approvals .......................................................26
47. Reserved Rights ..............................................................27
48. Financial Statements .........................................................27
49. Signage; Directories .........................................................27
50. Nondisclosure of Lease Terms .................................................27
51. Hazardous Substance Disclosure ...............................................27
52. Parking ......................................................................28
53. Option to Renew ..............................................................28
54. Rights of First Offer on 19 th and 21 st Floors ..............................29
</TABLE>
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EXHIBITS:
A - Outline of Premises
B - Rules and Regulations
C - Form of Letter of Credit
D - Appraisal Procedure
E - Outline of First Offer Space A
F - Outline of First Offer Space B
<PAGE>
LEASE
THIS LEASE is made as of the ______ day of February, 2000, between
OAKLAND CITY CENTER LLC, a Delaware limited liability company ("Landlord"), and
ASK JEEVES, INC., a Delaware corporation ("Tenant").
1. PREMISES. Landlord hereby leases to Tenant, and Tenant hereby
leases from Landlord, on the terms and conditions set forth herein, the space
outlined on the attached Exhibit A (the "Premises"). The Premises consist of two
increments of space, which are labeled the "Initial Premises" and "Added
Premises", respectively, on such Exhibit A. The Premises are located on the
floor(s) specified in Paragraph 2 below of the building (the "Building") located
at 1111 Broadway, Oakland, California. The Building is a part of the office,
retail and service complex located in the area bounded by Broadway, Fourteenth,
Clay and Eleventh Streets, which complex, including its associated garages, the
parcel(s) of land on which the complex is located and the other improvements on
such land, is referred to herein as "City Center." The Building, the associated
garage, the parcel(s) of land (the "Land") on which the Building and garage are
located and the other improvements on the Land (including the walkways and
landscaping) are referred to herein as the "Real Property."
Tenant's lease of the Premises shall include the right to use, in
common with others and subject to the other provisions of this Lease, the public
lobbies, entrances, stairs, elevators and other public portions of the Building.
All of the windows and outside walls of the Premises and any space in the
Premises used for shafts, stacks, pipes, conduits, ducts, electrical equipment
or other utilities or Building facilities are reserved solely to Landlord and
Landlord shall have rights of access through the Premises for the purpose of
operating, maintaining and repairing the same.
2. CERTAIN BASIC LEASE TERMS. As used herein, the following terms
shall have the meaning specified below:
a. Floors on which the Premises are located: Initial Premises:
Twentieth (20th) floor. Added Premises: Eleventh (11 th )
and twelfth (12th) floors.
b. Lease term: Approximately six (6) years, commencing on the
date of Substantial Completion (as defined in Paragraph 4.c.
below) of the Tenant Improvements to be constructed in the
Initial Premises as provided in Paragraph 4 (the
"Commencement Date"), and ending on the last day of the
seventy-second (72nd) full calendar month after the
Commencement Date (the "Expiration Date"). Notwithstanding
the foregoing, however, the Lease term with respect to the
Added Premises shall commence on the date of Substantial
Completion of the Tenant Improvements to be constructed in
the Added Premises (the "Added Premises Commencement Date").
c. Monthly Rent for each respective portion of the Premises
shall be as follows:
i. Initial Premises: The respective sums set forth as
follows:
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Period Monthly Rent
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First and Second Lease Years $35,438.00
Third and Fourth Lease Years $37,770.00
Fifth and Sixth Lease Years $39,635.00
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ii. Added Premises: The respective sums set forth as
follows:
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Period Monthly Rent
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Commencing on the Added
Premises Commencement
Date through the end of the
Second Lease Year $131,282.00
Third and Fourth Lease Years $139,239.00
Fifth and Sixth Lease Years $147,195.00
</TABLE>
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For purposes of this Lease, the "First Lease Year"
shall be the period commencing on the Commencement Date and
ending on the last day of the twelfth (12th) full calendar
month thereafter. Each twelve (12) calendar month period
thereafter shall constitute a "Lease Year", except that the
Sixth Lease Year shall end on the Expiration Date.
d. Letter of Credit Amount: Three Million Two Hundred Thousand
Dollars ($3,200,000.00).
e. Tenant's Share: The respective percentages set forth below:
Initial Premises: 2.07% Added Premises: 8.90%.
f. Base Year: The calendar year 2000. Base Tax Year: The fiscal
tax year ending June 30, 2001.
g. Business of Tenant: Software engineering and internet
applications.
h. Real estate broker(s): Shorenstein Management, Inc. and
AEGIS.
3. TERM; DELIVERY OF POSSESSION OF PREMISES.
a. The term of this Lease shall commence on the Commencement
Date (as defined in Paragraph 2.b.), and, unless sooner terminated pursuant to
the terms hereof or at law, shall expire on the Expiration Date (defined in
Paragraph 2.b.). The Commencement Date, Added Premises Commencement Date and
Expiration Date shall be confirmed by the parties in writing following the
determination thereof.
b. The Initial Premises shall be delivered to Tenant upon
Substantial Completion (as that term is defined in Paragraph 4.c.) of the Tenant
Improvements (as that term is defined in Paragraph 4.a.) to be constructed in
such portion of the Premises by Landlord pursuant to Paragraph 4. If Substantial
Completion of the Tenant Improvements for the Initial Premises or the Added
Premises and delivery of possession of the Initial Premises or Added Premises is
delayed for any reason whatsoever, this Lease shall not be void or voidable, nor
shall any delay in delivery of possession of the Initial Premises or the Added
Premises to Tenant shall operate to extend the term of this Lease or amend
Tenant's obligations under this Lease; provided, however, that Landlord shall
use commercially reasonable and diligent efforts, including initiation of
appropriate unlawful detainer proceedings, subject to the requirements of
applicable law, to recover possession of the Premises from the existing
tenant(s) therein in the event any existing tenant of the Premises shall
wrongfully holdover therein beyond the expiration of its lease. In no event
shall Landlord be liable to Tenant for any delay in completion of the Tenant
Improvements caused or occasioned by strikes, lockout, labor disputes, shortages
of material or labor, fire or other casualty, acts of God or any other cause.
c. If, at Tenant's request, Landlord permits Tenant to take
occupancy of any portion of the Premises prior to Substantial Completion of the
Tenant Improvements for such portion of the Premises, then the Commencement Date
or Added Premises Commencement Date, as the case may be, shall be the date of
such early occupancy by Tenant; provided, however, that the Expiration Date
shall not be affected by such early occupancy.
4. CONDITION OF PREMISES.
a. GENERALLY. Landlord shall have no obligation to make or pay
for any improvements or renovations in or to the Premises, or otherwise prepare
the Premises for Tenant's occupancy, except as specifically provided in this
Paragraph 4.
b. PLANS; TENANT IMPROVEMENTS. On or before March 15, 2000,
Tenant shall furnish to Landlord for Landlord's review and approval detailed
layout plans and finish specifications (the "Space Plans") prepared by an
architect retained by Tenant and reasonably acceptable to Landlord ("Tenant's
Architect"), showing all of the improvements which Tenant desires to be
constructed in the Premises. The Space Plans shall show improvements which
conform to Landlord's base building system and comply with all applicable
building codes and other legal requirements. The Space Plans and improvements
shown thereon shall also comply with the "Tenant Construction Standards" and
"Conditions for Construction" applicable to the Building (collectively, the
"Building Construction Standards"), receipt of which is hereby acknowledged by
Tenant. Landlord shall respond to the Space Plans within ten (10) Business Days
(as defined in Paragraph 17.a. below) of its receipt thereof. Tenant shall
respond promptly to any written objections of Landlord to the Space Plans and
shall resubmit appropriately revised Space Plans prepared by Tenant's Architect
within five (5) Business Days. This procedure shall be followed until all
objections have been resolved and the Space Plans approved. The Space Plans, as
finally approved in writing by Landlord, shall be referred to herein as the
"Final Space Plans." On or before April 15, 2000, Tenant shall furnish to
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Landlord for Landlord's written approval working plans and specifications (the
"Working Drawings") prepared by Tenant's Architect for all of the improvements
which Tenant desires to be constructed in the Premises. The Working Drawings
shall show improvements that conform to the Final Space Plans (except to the
extent specifically noted therein or in accompanying specifications) and the
Building Construction Standards, shall separately note any proposed structural
work or extraordinary or supplemental electrical, plumbing or HVAC requirements,
and shall be in sufficient detail as to enable the general contractor for the
work to obtain all necessary governmental permits for construction of all of the
improvements and to secure complete bids from qualified contractors to perform
the work for all of the improvements to be constructed in the Premises. The
Working Drawings shall identify any "long-lead" materials then known by Tenant
or Tenant's Architect. Tenant shall respond promptly to any written objections
of Landlord to the Working Drawings and shall resubmit appropriately revised
Working Drawings prepared by Tenant's Architect within five (5) Business Days of
Tenant's receipt of Landlord's written objections, and such resubmitted plans
shall clearly indicate which portions of the plans are revised and which
portions of the plans remain unchanged from the previously submitted plans.
Landlord shall respond to resubmitted Working Drawings promptly. This procedure
shall be followed until all objections have been resolved and the Working
Drawings approved; provided however, that if Tenant has not submitted acceptable
Working Drawings to Landlord on or before May 1, 2000 (the "Final Plan Date"),
then each day beyond the Final Plan Date that Tenant has not submitted
acceptable Working Drawings to Landlord shall constitute a day of Tenant Delay
under Paragraph 4.d. below. The Working Drawings, as approved in writing by
Landlord, are hereinafter called the "Plans," and the work shown on the Plans is
hereinafter called the "Tenant Improvements."
Landlord and Tenant shall cooperate with each other to resolve any
space planning or other issues that are raised by applicable local, state or
federal building codes during the planning, permit or construction process.
Notwithstanding anything to the contrary contained herein, Landlord's approval
of any item reviewed by Landlord under this Paragraph 4 shall merely indicate
Landlord's consent to the proposed work shown thereon, and in no event shall
such consent by Landlord be deemed to constitute a representation by Landlord
that the work called for therein complies with applicable building codes or
other legal requirements nor shall such consent release Tenant from Tenant's
obligations to supply Space Plans, Working Drawings and Plans that do so conform
to applicable building codes and legal requirements.
c. CONSTRUCTION BY LANDLORD'S CONTRACTOR.
i. BUDGET. Landlord shall cause Landlord's Contractor to
solicit bids from not less than three (3) subcontractors for each major
trade working on the Tenant Improvements (including any appropriate
subcontractors recommended by Tenant). When Landlord's Contractor has
received responses to its bid request, Landlord's Contractor will analyze
the same and provide Tenant with a copy of Landlord's Contractor's bid
analysis, recommended winning bidders and estimated budget for the Tenant
Improvements, based upon the selected subcontractors' bids and including
Landlord's Contractor's fees (as described in Paragraph 4.e.i. below) and a
reasonable contingency. Tenant shall have three (3) Business Days after the
receipt of Landlord's Contractor's bid analysis to approve or reasonably
disapprove Landlord's Contractor's selection of subcontractors and
Landlord's Contractor's estimated budget. Further, if Tenant disapproves of
the estimated budget, then within three (3) Business Days of Tenant's
receipt thereof, Tenant shall so notify Landlord and the Plans shall
promptly be modified, at Tenant's cost, by Tenant's Architect, in order to
satisfactorily modify the scope of the work upon which the budget is based.
Any and all revisions to the Plans shall be subject to Landlord's approval.
Upon Tenant's disapproval of any subcontractor or the revision of the
Plans, Landlord shall cause Landlord's Contractor to promptly prepare and
submit to Tenant a revised estimated budget. Tenant shall respond to the
revised estimated budget in the manner described above. Any delay in
Substantial Completion (as defined in Paragraph 4.e.iii. below) of the
Tenant Improvements resulting from any revision to the Plans or the budget
shall constitute a Tenant Delay as defined in Paragraph 4.d. below; in the
event of any such Tenant Delay, Tenant's obligation to pay rent for the
Premises shall be accelerated as provided in Paragraph 5.a. below. If
Tenant fails to raise any objections to the analysis and/or budget within
the period(s) described above, Tenant shall be deemed to have approved
Landlord's Contractor's recommended bid acceptance and proposed budget.
ii. CHANGES. If Tenant desires any change in or to the Plans
("Changes"), then Tenant shall request that Tenant's Architect, at Tenant's
cost, prepare revised Working Drawings incorporating the Change. If
Landlord approves any proposed Change, then together with such approval, if
practicable, and if not practicable as soon thereafter as is practicable,
Landlord shall give Tenant Landlord's estimated increase or decrease in the
cost of the Tenant Improvements which would result from incorporating such
Change and Landlord's estimate of the delay, if any, in the commencement or
completion of the Tenant Improvements which would result from incorporating
such Change. If the Change increases the cost of the Tenant Improvements
and the funds from Landlord's Allowance (as defined in Paragraph 4.e.
below) are not sufficient to pay for the Change, then Tenant shall be
liable for the additional cost, which cost shall be payable, at Landlord's
option, during the course of construction. Landlord will use reasonable
care in preparing the estimates, but they shall be good faith estimates
only and will not limit Tenant's obligation to pay for the actual increase
in the cost of the Tenant Improvements or Tenant's responsibility for the
actual construction delay resulting from the Change. Within three (3)
Business Days after receipt of such cost and delay
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estimates, Tenant shall notify Landlord in writing whether Tenant approves
the Change. If Tenant fails to approve the Change within such three (3)
Business Day period, construction of the Tenant Improvements shall proceed
as provided in accordance with the Plans as they existed prior to the
requested Change. If, following Tenant's review of the estimated costs and
delays, Tenant desires Landlord to incorporate the Change into the Tenant
Improvements, then Tenant and Landlord shall execute a change order for
such Change on Landlord's standard form therefor, and the term "Plans"
shall thereafter be deemed to refer to the Working Drawings as so revised
and approved. The submission of the proposed estimated budget to Tenant and
Tenant's approval thereof shall not constitute a guarantee that the cost of
the Tenant Improvements shall not exceed the amount shown on the estimated
budget. Any delay in Substantial Completion (as defined below) of the
Tenant Improvements resulting from any revision to the Plans or the
proposed budget shall constitute a Tenant Delay, as defined in Paragraph
4.d. below.
iii. CONSTRUCTION; SUBSTANTIAL COMPLETION. Landlord shall cause a
contractor selected by Landlord ("Landlord's Contractor") to construct the
Tenant Improvements as shown on the Plans in compliance with this Paragraph
4. With regard to telephones and computer systems, Landlord shall provide
and cause to be installed only those wall terminal boxes and/or floor
monuments required for Tenant's telephone or computer systems as are shown
on the Plans. Landlord will provide ordinary power wiring to locations
shown on the Plans and shall provide and cause to be installed conduits as
required for Tenant's telephone and computer systems as shown on the Plans,
but shall in no event install, pull or hook up such wires, supply jacks or
plugs or provide wiring necessary for special conditioned power to the
Premises."Substantial Completion" of the Tenant Improvements for the
Initial Premises or Added Premises, as the case may be, shall be deemed to
have occurred when the Tenant Improvements for such portion of the Premises
have, in Landlord's reasonable judgment, been completed in accordance with
the Plans, subject only to correction or completion of "Punch List" items,
which items shall be limited to minor items of incomplete or defective work
or materials or mechanical maladjustments that are of such a nature that
they do not materially interfere with or impair Tenant's use of such
portion of the Premises for Tenant's business. The definition of
"Substantially Completed" shall also apply to the terms "Substantial
Completion" and "Substantially Complete."
d. TENANT DELAYS. Tenant shall be responsible for, and shall
pay to Landlord, any and all costs and expenses incurred by Landlord in
connection with any delay in the commencement or completion of any Tenant
Improvements and any increase in the cost of Tenant Improvements caused by (i)
Tenant's failure to submit or resubmit plans or construction documents by the
dates or within the time periods set forth in Paragraph 4.b. above or to have
approved Plans completed by the Final Plan Date (as extended by any delay by
Landlord in responding to plans within the periods set forth above), (ii) any
Changes requested by Tenant in the Tenant Improvements shown on the Plans
(including any cost or delay resulting from proposed Changes that are not
ultimately made) or Tenant's disapproval of any aspect of the Working Drawings
except to the extent that such aspect does not properly reflect the Final Space
Plans, (iii) any failure by Tenant to timely pay any amounts due from Tenant
hereunder, including any additional costs resulting from any Change (it being
acknowledged that if Tenant fails to make or otherwise delays making such
payments, Landlord may stop work on the Tenant Improvements and any delay from
such a work stoppage will be a Tenant Delay), (iv) the inclusion in the Tenant
Improvements of any so-called "long lead" materials (such as fabrics, panelings,
carpeting or other items that must be imported or are of unusual character or
limited availability), (v) any delay by Tenant in responding to inquiries
regarding the construction of the Tenant Improvements or in granting Tenant's
approval of materials or finishes for the Tenant Improvements, or (vi) any other
delay requested or caused by Tenant. Each of the foregoing is referred to herein
as a "Tenant Delay."
e. COST OF CONSTRUCTION OF TENANT IMPROVEMENTS. Landlord shall
contribute toward the cost of designing, constructing and installing the Tenant
Improvements, an amount not to exceed Two Hundred Seventy-Nine Thousand Seven
Hundred Seventy-Five Dollars ($279,775.00) with respect to the Initial Premises
and Two Hundred Thirty-Eight Thousand Six Hundred Ninety-Five Dollars
($238,695.00) with respect to the Added Premises (the sum of both such amounts
being referred to collectively as "Landlord's Allowance"). The following
provisions shall govern the payment of Landlord's Allowance:
i. EXCESS COST. Tenant shall pay for all costs of the
construction of the Tenant Improvements (including architectural costs and
Landlord's Contractor's charge) in excess of Landlord's Allowance (the
"Excess Cost"). If the cost of construction (including Landlord's
Contractor's fee, comprising Landlord's contractor's charge for overhead
and profit equal to fifteen percent (15%) of the first One Hundred Thousand
Dollars ($100,000.00) of construction costs, plus twelve percent (12%) of
such costs, if any, in excess of $100,000.00, plus Landlord's Contractor's
standard supervision fees) exceeds the funds available therefor from
Landlord's Allowance, then Tenant shall pay to Landlord, as work progresses
in course of construction installments and within fifteen (15) days of
written demand, the anticipated cost of the construction of the Tenant
Improvements that exceeds Landlord's Allowance.
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ii. CERTAIN COSTS. If Landlord reasonably determines that, upon
Substantial Completion of the Tenant Improvements for the Initial Premises
or Added Premises, as the case may be, Landlord's Contribution would not be
exhausted by construction of the Tenant Improvements for such portion of
the Premises, and the remaining balance of Landlord's Contribution will
exceed the amount needed to fully pay for all outstanding anticipated costs
relating to the Tenant Improvements for such portion of the Premises, then
Tenant may apply a portion of Landlord's Allowance, up to a maximum of
Twenty-two Thousand Three Hundred Eighty-two Dollars ($22,382.00) with
respect to the Initial Premises and Ninety-five Thousand Four Hundred
Seventy-eight Dollars ($95,478.00) with respect to the Added Premises,
toward the reasonable cost of design, space planning, architectural fees,
and construction drawings for the Tenant Improvements for such portion of
the Premises. In no event may any portions of Landlord's Allowance be
applied towards the costs of Tenant's trade fixtures, personal property,
equipment, cabling, furniture, signage, moving expenses, or rental
obligations.
f. EARLY ENTRY. Notwithstanding anything to the contrary in
this Lease, Tenant may, prior to the Substantial Completion of the Tenant
Improvements, enter the Premises for the purpose of installing telephones,
cabling, electronic communication or related equipment, and fixtures, provided
that Tenant shall be solely responsible for any of such equipment, fixtures, or
material and for any loss or damage thereto from any cause whatsoever, excluding
only the gross negligence or deliberate misconduct of Landlord or Landlord's
contractors. Such early access to the Premises and such installation shall be
permitted only to the extent that Landlord determines that such early access and
installation activities will not delay Landlord's Contractor's completion of the
construction of the Tenant Improvements. The provisions of the final grammatical
paragraph of Paragraph 8.a. below, the provisions of Paragraph 9.a. below, and
the provisions of Paragraphs 14 and 15 below shall apply in full during the
period of any such early entry, and Tenant shall (i) provide certificates of
insurance evidencing the existence and amounts of liability insurance carried by
Tenant and its agents and contractors, reasonably satisfactory to Landlord,
prior to such early entry, and (ii) comply with all applicable laws,
regulations, permits and other approvals applicable to such early entry work in
the Premises. Notwithstanding the foregoing, if such early access or
installation delays or interferes with Landlord's construction of the Tenant
Improvements, or increases the cost of the Tenant Improvements, the same shall
be a Tenant Delay.
5. MONTHLY RENT.
a. On or before the first day of each calendar month during the
term hereof, Tenant shall pay to Landlord, as monthly rent for the Premises, the
Monthly Rent specified in Paragraph 2 above. If the term of this Lease commences
on a day other than the first day of a calendar month, or terminates on a day
other than the last day of a calendar month, then the Monthly Rent payable for
such partial month shall be appropriately prorated on the basis of a thirty
(30)-day month. Monthly Rent and the Additional Rent specified in Paragraph 7
shall be paid by Tenant to Landlord, in advance, without deduction, offset,
prior notice or demand, in immediately available funds of lawful money of the
United States of America, or by good check as described below, at the office of
Shorenstein Company, L.P., at 555 California Street, 14th floor, San Francisco,
California 94104, or to such other person or at such other place as Landlord may
from time to time designate in writing. Payments made by check must be drawn
either on a California financial institution or on a financial institution that
is a member of the federal reserve system. Notwithstanding the foregoing, if the
Commencement Date for the Initial Premises, or the Added Premises Commencement
Date for the Added Premises, is delayed as a result of a Tenant Delay, then
Tenant's obligation to pay rent for such portion of the Premises shall be
accelerated by the number of days of such delay. Further, notwithstanding the
foregoing, Tenant shall pay to Landlord with Tenant's execution of this Lease,
an amount equal to one (1) month's Monthly Rent hereunder for the Premises,
which amount shall be applied to the Monthly Rent first due and payable
hereunder
b. All amounts payable by Tenant to Landlord under this Lease,
or otherwise payable in connection with Tenant's occupancy of the Premises, in
addition to the Monthly Rent hereunder and Additional Rent under Paragraph 7,
shall constitute rent owed by Tenant to Landlord hereunder.
c. Any rent not paid by Tenant to Landlord when due shall bear
interest from the date due to the date of payment by Tenant at an annual rate of
interest (the "Interest Rate") equal to the lesser of (i) the maximum annual
interest rate allowed by law on such due date for business loans (not primarily
for personal, family or household purposes) not exempt from the usury law, or
(ii) a rate equal to the sum of six (6) percentage points over the six-month
United States Treasury bill rate (the "Treasury Rate") in effect from time to
time during such delinquency (or if there is no such publicly announced rate,
the rate quoted by the San Francisco Main Office of Bank of America, NT&SA, or
any successor bank thereto, in pricing ninety (90)-day commercial loans to
substantial commercial borrowers). Failure by Tenant to pay rent when due,
including any interest accrued under this subparagraph, shall constitute an
Event of Default (as defined in Paragraph 25 below) giving rise to all the
remedies afforded Landlord under this Lease and at law for nonpayment of rent.
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d. No security or guaranty which may now or hereafter be
furnished to Landlord for the payment of rent due hereunder or for the
performance by Tenant of the other terms of this Lease shall in any way be a bar
or defense to any of Landlord's remedies under this Lease or at law.
6. LETTER OF CREDIT.
a. As security for the performance by Tenant of Tenant's
obligations hereunder, Tenant shall cause to be delivered to Landlord
concurrently with the execution of this Lease by Tenant, an original irrevocable
standby letter of credit (the "Letter of Credit") in the amount specified in
Paragraph 2.d. above, naming Landlord as beneficiary, which Landlord may draw
upon to cure any default under this Lease or to compensate Landlord for any
damage Landlord incurs as a result of Tenant's failure to perform any of its
obligations hereunder. Any such draw on the Letter of Credit shall not
constitute a waiver of any other rights of Landlord with respect to such default
or failure to perform. The Letter of Credit 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 in California ,
have an expiration date not earlier than the Expiration Date (or, in the
alternative, have a term of not less than one (1) year and be automatically
renewable for an additional one (1) year period unless notice of non-renewal is
given by the issuer to Landlord not later than sixty (60) days prior to the
expiration thereof). The letter of credit shall be in the form attached hereto
as Exhibit D, and shall otherwise be in form and content satisfactory to
Landlord. If the Letter of Credit has an expiration date earlier than the
Expiration Date, then throughout the term hereof (including any renewal or
extension of the term) Tenant shall provide evidence of renewal of the Letter of
Credit to Landlord at least sixty (60) days prior to the date the Letter of
Credit expires. If Landlord draws on the Letter of Credit pursuant to the terms
hereof, Tenant shall immediately replenish the Letter of Credit or provide
Landlord with an additional letter of credit conforming to the requirement of
this paragraph so that the amount available to Landlord from the Letter of
Credit(s) provided hereunder is the amount specified in Paragraph 2.d. above.
Tenant's failure to deliver any replacement, additional or extension of the
Letter of Credit, or evidence of renewal of the Letter of Credit, within the
time specified under this Lease shall entitle Landlord to draw upon the Letter
of Credit then in effect. If Landlord liquidates the Letter of Credit as
provided in the preceding sentence, Landlord shall hold the funds received from
the Letter of Credit as security for Tenant's performance under this Lease, and
Landlord shall not be required to segregate such security deposit from its other
funds and no interest shall accrue or be payable to Tenant with respect thereto.
No holder of a Superior Interest (as defined in Paragraph 21 below), nor any
purchaser at any judicial or private foreclosure sale of the Real Property or
any portion thereof, shall be responsible to Tenant for such security deposit
unless and only to the extent such holder or purchaser shall have actually
received the same. If Landlord transfers such security deposit to the grantee or
transferee of Landlord's interest in the Real Property, Landlord shall be
released from any further responsibility or liability for such security. If
Tenant is not in default at the expiration or termination of this Lease,
Landlord shall return to Tenant the Letter of Credit or the balance of the
security deposit 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 performed all of its covenants and obligations hereunder.
b. Notwithstanding the foregoing, however, on the first day of
the Second Lease Year and each subsequent Lease Year (each such date termed
herein a "Reduction Date"), so long as no Event of Default (as defined in
Paragraph 25.a. below) by Tenant under this Lease has occurred since the
previous Reduction Date (or, in the case of the first Reduction Date, since the
Commencement Date), the amount required under the Letter of Credit shall reduce
by Five Hundred Thirty-Three Thousand Three Hundred Thirty-Three Dollars
($533,333.00) on such Reduction Date, and if Tenant is entitled to such
reduction, Tenant may replace or amend the existing Letter of Credit to reflect
such reduced amount on or after the applicable Reduction Date.
7. ADDITIONAL RENT: INCREASES IN OPERATING EXPENSES AND TAX
EXPENSES.
a. Operating Expenses. Tenant shall pay to Landlord, at the
times hereinafter set forth, Tenant's Share, as specified in Paragraph 2.e.
above, of any increase in the Operating Expenses (as defined below) incurred by
Landlord in each calendar year subsequent to the Base Year specified in
Paragraph 2.f. above, over the Operating Expenses incurred by Landlord during
the Base Year. The amounts payable under this Paragraph 7.a. and Paragraph 7.b.
below are termed "Additional Rent" herein.
The term "Operating Expenses" shall mean the total costs and expenses
incurred by Landlord in connection with the management, operation, maintenance,
repair and ownership of the Real Property, including, without limitation, the
following costs: (1) salaries, wages, bonuses and other compensation (including
hospitalization, medical, surgical, retirement plan, pension plan, union dues,
life insurance, including group life insurance, welfare and other fringe
benefits, and vacation, holidays and other paid absence benefits) relating to
employees of Landlord or its agents engaged in the operation, repair, or
maintenance of the Real Property allocated in proportion to the percentage of
such person's working time actually spent working in connection with the Real
Property; (2) payroll, social security, workers' compensation, unemployment and
similar taxes with respect to such employees of Landlord or its agents, and the
cost of providing disability or other benefits imposed by law or otherwise, with
respect to such employees; (3) the cost of uniforms (including the cleaning,
replacement and pressing thereof) provided to
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such employees; (4) premiums and other charges incurred by Landlord with respect
to fire, other casualty, rent and liability insurance, any other insurance as is
deemed necessary or advisable in the reasonable judgment of Landlord, or any
insurance required by the holder of any Superior Interest (as defined in
Paragraph 21 below) (provided that, with respect to earthquake insurance which
Landlord does not carry during the Base Year but obtains subsequent to the Base
Year, the cost of such insurance shall not be included in Operating Expenses
unless such insurance is then required by the holder of any mortgage, deed of
trust or ground lease affecting the Real Property, or if in such year
reasonable, prudent owners of first-class office buildings in downtown Oakland
would generally carry such insurance), and, after the Base Year, costs of
repairing an insured casualty to the extent of the deductible amount under the
applicable insurance policy; (5) water charges and sewer rents or fees; (6)
license, permit and inspection fees; (7) sales, use and excise taxes on goods
and services purchased by Landlord in connection with the operation, maintenance
or repair of the Real Property and Building systems and equipment; (8)
telephone, telegraph, postage, stationery supplies and other expenses incurred
in connection with the operation, maintenance, or repair of the Real Property;
(9) management fees and expenses; (10) costs of repairs to and maintenance of
the Real Property, including building systems and appurtenances thereto and
normal repair and replacement of worn-out equipment, facilities and
installations, but excluding the replacement of major building systems (except
to the extent provided in (16) and (17) below); (11) fees and expenses for
janitorial, window cleaning, guard, extermination, water treatment, rubbish
removal, plumbing and other services and inspection or service contracts for
elevator, electrical, mechanical and other building equipment and systems or as
may otherwise be necessary or proper for the operation, repair or maintenance of
the Real Property; (12) costs of supplies, tools, materials, and equipment used
in connection with the operation, maintenance or repair of the Real Property;
(13) accounting, legal and other professional fees and expenses; (14) fees and
expenses for painting the exterior or the public or common areas of the Building
and the cost of maintaining the sidewalks, landscaping and other common areas of
the Real Property; (15) costs and expenses for electricity, chilled water, air
conditioning, water for heating, gas, fuel, steam, heat, lights, power and other
energy related utilities required in connection with the operation, maintenance
and repair of the Real Property; (16) the cost of any capital improvements made
by Landlord to the Real Property or capital assets acquired by Landlord after
the Base Year in order to comply with any local, state or federal law,
ordinance, rule, regulation, code or order of any governmental entity or
insurance requirement (collectively, "Legal Requirement") with which the Real
Property was not required to comply during the Base Year, or to comply with any
amendment or other change to the enactment or interpretation of any Legal
Requirement from its enactment or interpretation during the Base Year; (17) the
cost of any capital improvements made by Landlord to the Building or capital
assets acquired by Landlord after the Base Year for the protection of the health
and safety of the occupants of the Real Property or that are designed to reduce
other Operating Expenses; (18) the cost of furniture, draperies, carpeting,
landscaping and other customary and ordinary items of personal property
(excluding paintings, sculptures and other works of art) provided by Landlord
for use in common areas of the Building or in the Building office (to the extent
that such Building office is dedicated to the operation and management of the
Real Property); (19) any expenses and costs resulting from substitution of work,
labor, material or services in lieu of any of the above itemizations, or for any
additional work, labor, services or material resulting from compliance with any
Legal Requirement applicable to the Real Property or any parts thereof; (20)
Building office rent or rental value; and (21) the Real Property's allocable
share of expenses, in the nature of the other Operating Expenses described in
this Paragraph 7.a., which are incurred with respect to the common areas of City
Center (including without limitation pedestrian walkways, patios, landscaped
areas, sidewalks, service corridors, restrooms, stairways, escalators,
decorative walls, plaza, fountains, malls, throughways, loading areas and ramps
and parking areas), which allocation shall be determined by Landlord in its good
faith business judgment. If the Real Property becomes subject to any covenants,
conditions or restrictions, reciprocal easement agreement, common area
declaration or similar agreement, the foregoing common area expenses shall
include all fees, costs or other expenses allocated to the Real Property under
such agreement. With respect to the costs of items included in Operating
Expenses under (16) and (17), such costs shall be amortized over a reasonable
period, as determined by Landlord, together with interest on the unamortized
balance at a rate per annum equal to three (3) percentage points over the
Treasury Rate charged at the time such item is constructed or acquired, or at
such higher rate as may have been paid by Landlord on funds borrowed for the
purpose of constructing or acquiring such item, but in either case not more than
the maximum rate permitted by law at the time such item is constructed or
acquired.
Operating Expenses shall not include the following: (i) depreciation
on the Building or equipment or systems therein; (ii) debt service; (iii) rental
under any ground or underlying lease; (iv) interest (except as expressly
provided in this Paragraph 7.a.); (v) Tax Expenses (as defined in Paragraph 7.b.
below); (vi) attorneys' fees and expenses incurred in connection with lease
negotiations or lease disputes with former, current or prospective Building
tenants; (vii) the cost (including any amortization thereof) of any improvements
or alterations which would be properly classified as capital expenditures
according to generally accepted property management practices (except to the
extent expressly included in Operating Expenses pursuant to this Paragraph
7.a.); (viii) the cost of decorating, improving for tenant occupancy, painting
or redecorating portions of the Building to be demised to tenants; (ix)
executive salaries; (x) advertising; (xi) real estate broker's or other leasing
commissions; (xii) overhead and profit increments paid to subsidiaries or
affiliates of Landlord for management or other services on or to the Building or
for supplies or other materials to the extent that the cost of the services,
supplies or materials materially exceed the amounts normally payable for similar
goods and services under similar circumstances (taking into account the market
factors in effect on the date any relevant contracts were negotiated) in
comparable buildings in
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downtown Oakland and San Francisco; or (xiii) any expense for which Landlord is
actually directly reimbursed by a tenant or other party.
b. TAX EXPENSES. Tenant shall pay to Landlord as Additional
Rent under this Lease, at the times hereinafter set forth, Tenant's Share, as
specified in Paragraph 2.e. above, of any increase in Tax Expenses (as defined
below) incurred by Landlord in each calendar year, over Tax Expenses incurred by
Landlord during the Base Tax Year. Notwithstanding the foregoing, if any
reassessment, reduction or recalculation of any item included in Tax Expenses
during the term results in a reduction of Tax Expenses, then for purposes of
calculating Tenant's Share of increases in Tax Expenses from and after the
calendar year in which such adjustment occurs, Tax Expenses for the Base Tax
Year shall be adjusted to reflect such reduction.
The term "Tax Expenses" shall mean all taxes, assessments (whether
general or special), excises, transit charges, housing fund assessments or other
housing charges, improvement districts, levies or fees, ordinary or
extraordinary, unforeseen as well as foreseen, of any kind, which are assessed,
levied, charged, confirmed or imposed on the Real Property, on Landlord with
respect to the Real Property, on the act of entering into leases of space in the
Real Property, on the use or occupancy of the Real Property or any part thereof,
with respect to services or utilities consumed in the use, occupancy or
operation of the Real Property, on any improvements, fixtures and equipment and
other personal property of Landlord located in the Real Property and used in
connection with the operation of the Real Property, or on or measured by the
rent payable under this Lease or in connection with the business of renting
space in the Real Property, including, without limitation, any gross income tax
or excise tax levied with respect to the receipt of such rent, by the United
States of America, the State of California, the City of Oakland, the County of
Alameda, any political subdivision, public corporation, district or other
political or public entity or public authority, and shall also include any other
tax, fee or other excise, however described, which may be levied or assessed in
lieu of, as a substitute (in whole or in part) for, or as an addition to, any
other Tax Expense. Tax Expenses shall include reasonable attorneys' fees, costs
and disbursements incurred in connection with proceedings to contest, determine
or reduce Tax Expenses. If it shall not be lawful for Tenant to reimburse
Landlord for any increase in Tax Expenses as defined herein, the Monthly Rent
payable to Landlord prior to the imposition of such increases in Tax Expenses
shall be increased to net Landlord the same net Monthly Rent after imposition of
such increases in Tax Expenses as would have been received by Landlord prior to
the imposition of such increases in Tax Expenses.
Tax Expenses shall not include income, franchise, transfer,
inheritance or capital stock taxes, unless, due to a change in the method of
taxation, any of such taxes is levied or assessed against Landlord in lieu of,
as a substitute (in whole or in part) for, or as an addition to, any other
charge which would otherwise constitute a Tax Expense.
c. ADJUSTMENT FOR OCCUPANCY FACTOR. Notwithstanding any other
provision herein to the contrary, in the event the Building is not fully
occupied during any calendar year during the term, including the Base Year, an
adjustment shall be made by Landlord in computing Operating Expenses for such
year so that the Operating Expenses shall be computed for such year as though
the Building had been fully occupied during such year. In addition, if any
particular work or service includable in Operating Expenses is not furnished to
a tenant who has undertaken to perform such work or service itself, Operating
Expenses shall be deemed to be increased by an amount equal to the additional
Operating Expenses which would have been incurred if Landlord had furnished such
work or service to such tenant. The parties agree that statements in this Lease
to the effect that Landlord is to perform certain of its obligations hereunder
at its own or sole cost and expense shall not be interpreted as excluding any
cost from Operating Expenses or Tax Expenses if such cost is an Operating
Expense or Tax Expense pursuant to the terms of this Lease.
d. INTENTION REGARDING EXPENSE PASS-THROUGH. It is the
intention of Landlord and Tenant that the Monthly Rent paid to Landlord
throughout the term of this Lease shall be absolutely net of all increases,
respectively, in Tax Expenses and Operating Expenses over, respectively, Tax
Expenses for the Base Tax Year and Operating Expenses for the Base Year, and the
foregoing provisions of this Paragraph 7 are intended to so provide.
e. NOTICE AND PAYMENT. On or before the first day of each
calendar year during the term hereof, or as soon as practicable thereafter,
Landlord shall give to Tenant notice of Landlord's estimate of the Additional
Rent, if any, payable by Tenant pursuant to Paragraphs 7.a. and 7.b. for such
calendar year. On or before the first day of each month during each such
calendar year, Tenant shall pay to Landlord one-twelfth (1/12th) of the
estimated Additional Rent; provided, however, that if Landlord's notice is not
given prior to the first day of any calendar year Tenant shall continue to pay
Additional Rent on the basis of the prior year's estimate until the month after
Landlord's notice is given. If at any time it appears to Landlord that the
Additional Rent payable under Paragraphs 7.a. and/or 7.b. will vary from
Landlord's estimate by more than five percent (5%), Landlord may, by written
notice to Tenant, revise its estimate for such year, and subsequent payments by
Tenant for such year shall be based upon the revised estimate. On the first
monthly payment date after any new estimate is delivered to Tenant, Tenant shall
also pay any accrued cost increases, based on such new estimate.
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f. ANNUAL ACCOUNTING. Landlord shall maintain adequate books
and records of the Operating Expenses and Tax Expenses in accordance with
standard accounting principles. Within ninety (90) days after the close of each
calendar year subsequent to the Base Year, or as soon after such ninety (90) day
period as practicable, Landlord shall deliver to Tenant a statement of the
Additional Rent payable under Paragraphs 7.a. and 7.b. for such year. The
statement shall be based on the results of an audit of the operations of the
Building prepared for the applicable year by a nationally recognized certified
public accounting firm selected by Landlord. Upon Tenant's request, Landlord
shall promptly deliver to Tenant a copy of the auditor's statement on which
Landlord's annual statement is based and such other information regarding the
annual statement as may be reasonably required by Tenant to ascertain Landlord's
compliance with this Paragraph 7. Landlord's annual statement shall be final and
binding upon Landlord and Tenant unless either party, within thirty (30) days
after Tenant's receipt thereof, shall contest any item therein by giving written
notice to the other, specifying each item contested and the reason therefor.
Notwithstanding the foregoing, the Tax Expenses included in any such annual
statement may be modified by any subsequent adjustment or retroactive
application of Tax Expenses affecting the calculation of such Tax Expenses. If
the annual statement shows that Tenant's payments of Additional Rent for such
calendar year pursuant to Paragraph 7.e. above exceeded Tenant's obligations for
the calendar year, Landlord shall at its option either (1) credit the excess to
the next succeeding installments of estimated Additional Rent or (2) pay the
excess to Tenant within thirty (30) days after delivery of such statement. If
the annual statement shows that Tenant's payments of Additional Rent for such
calendar year pursuant to Paragraph 7.e. above were less than Tenant's
obligation for the calendar year, Tenant shall pay the deficiency to Landlord
within ten (10) days after delivery of such statement. Landlord and Tenant shall
endeavor in good faith to promptly resolve any dispute regarding the annual
statement. Tenant shall not withhold payment of any contested or disputed item.
Upon resolution of any such dispute, whether by agreement of the parties or by
judicial determination, Landlord shall promptly refund to Tenant any amount
determined to have been overpaid by Tenant, or Tenant shall promptly pay to
Landlord any deficiency that is determined to be owing. If, as a consequence of
Tenant's review of Landlord's backup information, as provided above, Tenant
determines that there has been in the relevant year an aggregate overstatement
of Operating Expenses of five percent (5%) or more, and Landlord's auditors
concur in such finding (or, in the absence of such concurrence, such
overstatement is confirmed judicially), then Landlord shall bear Tenant's
reasonable costs of such review.
g. PRORATION FOR PARTIAL LEASE YEAR. If this Lease commences on
a day other than the first day of a calendar year or terminates on a day other
than the last day of a calendar year, the Additional Rent payable by Tenant
pursuant to this Paragraph 7 applicable to such partial calendar year shall be
prorated on the basis that the number of days of such partial calendar year
bears to three hundred sixty-five (365).
8. USE OF PREMISES; COMPLIANCE WITH LAW.
a. USE OF PREMISES. The Premises shall be used solely for
general office purposes for the business of Tenant as described in Paragraph
2.g. above and for no other use or purpose.
Tenant shall not do or suffer or permit anything to be done in or
about the Premises or the Real Property, nor bring or keep anything therein,
which would in any way subject Landlord, Landlord's agents or the holder of any
Superior Interest (as defined in Paragraph 21) to any liability, increase the
premium rate of or affect any fire, casualty, liability, rent or other insurance
relating to the Real Property or any of the contents of the Building, or cause a
cancellation of, or give rise to any defense by the insurer to any claim under,
or conflict with, any policies for such insurance. If any act or omission of
Tenant results in any such increase in premium rates, Tenant shall pay to
Landlord upon demand the amount of such increase. Tenant shall not do or suffer
or permit anything to be done in or about the Premises or the Real Property
which will in any way obstruct or interfere with the rights of other tenants or
occupants of the Building or injure or annoy them, or use or suffer or permit
the Premises to be used for any immoral, unlawful or objectionable purpose, nor
shall Tenant cause, maintain, suffer or permit any nuisance in, on or about the
Premises or the Real Property. Without limiting the foregoing, no loudspeakers
or other similar device which can be heard outside the Premises shall, without
the prior written approval of Landlord, be used in or about the Premises.
Tenant shall not commit or suffer to be committed any waste in, to or
about the Premises. Tenant agrees not to employ any person, entity or contractor
for any work in the Premises (including moving Tenant's equipment and
furnishings in, out or around the Premises) whose presence may give rise to a
labor or other disturbance in the Building and, if necessary to prevent such a
disturbance in a particular situation, Landlord may require Tenant to employ
union labor for the work.
b. COMPLIANCE WITH LAW. Tenant shall not do or permit anything
to be done in or about the Premises which will in any way conflict with any
Legal Requirement (as defined in Paragraph 7.a.(16) above) now in force or which
may hereafter be enacted. Tenant, at its sole cost and expense, shall promptly
comply with all such present and future Legal Requirements relating to the
condition, use or occupancy of the Premises, and shall perform all work to the
Premises or other portions of the Real Property required to effect such
compliance (or, at Landlord's election, Landlord may perform such work at
Tenant's cost). Notwithstanding the foregoing, however, Tenant shall not be
required to perform any structural changes to the Premises or other portions of
the Real Property unless such changes are related to or affected or triggered by
(i) Tenant's Alterations (as defined in Paragraph 9 below), (ii) Tenant's
particular use of the
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Premises (as opposed to Tenant's use of the Premises for general office purposes
in a normal and customary manner), (iii) Tenant's particular employees or
employment practices, or (iv) the construction of initial improvements to the
Premises, if any. The judgment of any court of competent jurisdiction or the
admission of Tenant in an action against Tenant, whether or not Landlord is a
party thereto, that Tenant has violated any Legal Requirement shall be
conclusive of that fact as between Landlord and Tenant. Tenant shall immediately
furnish Landlord with any notices received from any insurance company or
governmental agency or inspection bureau regarding any unsafe or unlawful
conditions within the Premises or the violation of any Legal Requirement.
c. HAZARDOUS MATERIALS. Tenant shall not cause or permit the
storage, use, generation, release, handling or disposal (collectively,
"Handling") of any Hazardous Materials (as defined below), in, on, or about the
Premises or the Real Property by Tenant or any agents, employees, contractors,
licensees, subtenants, customers, guests or invitees of Tenant (collectively
with Tenant, "Tenant Parties"), except that Tenant shall be permitted to use
normal quantities of office supplies or products (such as copier fluids or
cleaning supplies) customarily used in the conduct of general business office
activities ("Common Office Chemicals"), provided that the Handling of such
Common Office Chemicals shall comply at all times with all Legal Requirements,
including Hazardous Materials Laws (as defined below). Notwithstanding anything
to the contrary contained herein, however, in no event shall Tenant permit any
usage of Common Office Chemicals in a manner that may cause the Premises or the
Real Property to be contaminated by any Hazardous Materials or in violation of
any Hazardous Materials Laws. Tenant shall immediately advise Landlord in
writing of (a) any and all enforcement, cleanup, remedial, removal, or other
governmental or regulatory actions instituted, completed, or threatened pursuant
to any Hazardous Materials Laws relating to any Hazardous Materials affecting
the Premises; and (b) all claims made or threatened by any third party against
Tenant, Landlord, the Premises or the Real Property relating to damage,
contribution, cost recovery, compensation, loss, or injury resulting from any
Hazardous Materials on or about the Premises. Without Landlord's prior written
consent, Tenant shall not take any remedial action or enter into any agreements
or settlements in response to the presence of any Hazardous Materials in, on, or
about the Premises. Tenant shall be solely responsible for and shall indemnify,
defend and hold Landlord and all other Indemnitees (as defined in Paragraph
14.b. below), harmless from and against all Claims (as defined in Paragraph
14.b. below), arising out of or in connection with, or otherwise relating to (i)
any Handling of Hazardous Materials by any Tenant Party or Tenant's breach of
its obligations hereunder, or (ii) any removal, cleanup, or restoration work and
materials necessary to return the Real Property or any other property of
whatever nature located on the Real Property to their condition existing prior
to the Handling of Hazardous Materials in, on or about the Premises. Tenant's
obligations under this paragraph shall survive the expiration or other
termination of this Lease. For purposes of this Lease, "Hazardous Materials"
means any explosive, radioactive materials, hazardous wastes, or hazardous
substances, including without limitation asbestos containing materials, PCB's,
CFC's, or substances defined as "hazardous substances" in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Section 9601- 9657; the Hazardous Materials Transportation Act of 1975,
49 U.S.C. Section 1801-1812; the Resource Conservation and Recovery Act of 1976,
42 U.S.C. Section 6901-6987; or any other Legal Requirement regulating, relating
to, or imposing liability or standards of conduct concerning any such materials
or substances now or at any time hereafter in effect (collectively, "Hazardous
Materials Laws").
d. APPLICABILITY OF PARAGRAPH. The provisions of this Paragraph
8 are for the benefit of Landlord, the holder of any Superior Interest (as
defined in Paragraph 21 below), and the other Indemnitees only and are not nor
shall they be construed to be for the benefit of any tenant or occupant of the
Building.
9. ALTERATIONS AND RESTORATION.
a. Tenant shall not make or permit to be made any alterations,
modifications, additions, decorations or improvements to the Premises, or any
other work whatsoever that would directly or indirectly involve the penetration
or removal (whether permanent or temporary) of, or require access through, in,
under, or above any floor, wall or ceiling, or surface or covering thereof in
the Premises (collectively, "Alterations"), except as expressly provided in this
Paragraph 9.
Tenant shall have the right, without Landlord's consent, to make
any Alteration to the Premises, provided that (a) the Alteration is decorative
in nature (such as paint, carpet or other wall or floor finishes, partitions
other such work), (b) Tenant provides Landlord with ten (10) days' advance
notice of the commencement of any such Alteration, (c) such Alteration does not
affect the Building's electrical, mechanical or HVAC systems or any part of the
Building other than the Premises, (d) the work will not decrease the value of
the Premises, does not require a building permit or other governmental permit,
uses only first-class materials and is performed in a workman-like manner and in
accordance with all applicable laws and regulations, and (e) the work does not
involve opening the ceiling of the Premises. At the time Tenant notifies
Landlord of any such work, Tenant shall give Landlord a copy of Tenant's plans
for the work, or, if the Alterations are of such a nature that formal plans will
not be prepared for the work, Tenant shall provide Landlord with a reasonably
specific description of the work. If Tenant desires any Alteration that is not
covered in the preceding two (2) sentences, Tenant must obtain Landlord's prior
written approval of such Alteration, which approval shall not be unreasonably
withheld or delayed.
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All Alterations shall be made at Tenant's sole cost and expense
(including the expense of complying with all present and future Legal
Requirements, including those regarding asbestos, if applicable, and any other
work required to be performed in other areas within or outside the Premises by
reason of the Alterations). Alterations shall be made, at Tenant's election, by
Landlord or by a contractor reasonably approved by Landlord. If Tenant hires
Landlord to perform the Alteration, Landlord's contractor shall be entitled to
receive a fee for such work of fifteen percent (15%) of the first $100,000 of
the construction costs of such work, and the fee for any construction costs over
such amount shall be as negotiated by Tenant and Landlord. If Landlord does not
perform the work pursuant to the above, Tenant shall pay Landlord on demand
prior to or during the course of such construction an amount (the "Alteration
Operations Fee") equal to five percent (5%) of the total cost of the Alteration
(and for purposes of calculating the Alteration Operations Fee, such cost shall
include architectural and engineering fees, but shall not include permit fees)
as compensation to Landlord for electrical energy consumed in connection with
the work, freight elevator operation, additional cleaning expenses, additional
security services, and for other miscellaneous costs incurred by Landlord as
result of the work.
All such work shall be performed diligently and in a first-class
workmanlike manner and in accordance with plans and specifications approved by
Landlord, and shall comply with all Legal Requirements and Landlord's
construction procedures and requirements for the Building (including Landlord's
requirements relating to insurance and contractor qualifications). In no event
shall Tenant employ any person, entity or contractor to perform work in the
Premises whose presence may give rise to a labor or other disturbance in the
Building. Default by Tenant in the payment of any sums agreed to be paid by
Tenant for or in connection with an Alteration (regardless of whether such
agreement is pursuant to this Paragraph 9 or separate instrument) shall entitle
Landlord to all the same remedies as for non-payment of rent hereunder. Any
Alterations, including, without limitation, moveable partitions that are affixed
to the Premises (but excluding moveable, free standing partitions) and all
carpeting, shall at once become part of the Building and the property of
Landlord. Tenant shall give Landlord not less than five (5) days prior written
notice of the date the construction of the Alteration is to commence. Landlord
may post and record an appropriate notice of nonresponsibility with respect to
any Alteration and Tenant shall maintain any such notices posted by Landlord in
or on the Premises.
b. At Landlord's sole election any or all Alterations made for
or by Tenant shall be removed by Tenant from the Premises at the expiration or
sooner termination of this Lease and the Premises shall be restored by Tenant to
their condition prior to the making of the Alterations, ordinary wear and tear
excepted. If Tenant desires permission to leave a specific Alteration in the
Premises at the expiration or earlier termination of the Lease, Tenant shall
request such permission from Landlord in writing at the time Tenant requests
approval for such Alteration and Landlord shall advise Tenant in writing at the
time of Landlord's approval of the subject Alteration whether Landlord will
require the removal of the Alteration at the expiration or earlier termination
of this Lease. The removal of the Alterations and the restoration of the
Premises shall be performed by a general contractor selected by Tenant and
approved by Landlord, and Tenant shall pay the general contractor's fees and
costs in connection with such work. Any separate work letter or other agreement
which is hereafter entered into between Landlord and Tenant pertaining to
Alterations shall be deemed to automatically incorporate the terms of this Lease
without the necessity for further reference thereto.
10. REPAIR. By taking possession of the Premises, Tenant agrees that
the Premises are in good condition and repair. Tenant, at Tenant's sole cost and
expense, shall keep the Premises and every part thereof (including the interior
walls and ceilings of the Premises, those portions of the Building systems
located within and exclusively serving the Premises, and improvements and
Alterations) in good condition and repair. Tenant waives all rights to make
repairs at the expense of Landlord as provided by any Legal Requirement now or
hereafter in effect. It is specifically understood and agreed that, except as
specifically set forth in this Lease, Landlord has no obligation and has made no
promises to alter, remodel, improve, repair, decorate or paint the Premises or
any part thereof, and that no representations respecting the condition of the
Premises or the Building have been made by Landlord to Tenant. Tenant hereby
waives the provisions of California Civil Code Sections 1932(1), 1941 and 1942
and of any similar Legal Requirement now or hereafter in effect.
11. ABANDONMENT. Tenant shall not abandon the Premises or any part
thereof at any time during the term hereof. Upon the expiration or earlier
termination of this Lease, or if Tenant abandons or surrenders all or any part
of the Premises or is dispossessed of the Premises by process of law, or
otherwise, any movable furniture, equipment, trade fixtures, or other personal
property belonging to Tenant and left on the Premises shall at the option of
Landlord be deemed to be abandoned and, whether or not the property is deemed
abandoned, Landlord shall have the right to remove such property from the
Premises and charge Tenant for the removal and any restoration of the Premises
as provided in Paragraph 9. Landlord may charge Tenant for the storage of
Tenant's property left on the Premises at such rates as Landlord may from time
to time reasonably determine, or, Landlord may, at its option, store Tenant's
property in a public warehouse at Tenant's expense. Notwithstanding the
foregoing, neither the provisions of this Paragraph 11 nor any other provision
of this Lease shall impose upon Landlord any obligation to care for or preserve
any of Tenant's property left upon the Premises, and Tenant hereby waives and
releases Landlord from any claim or liability
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in connection with the removal of such property from the Premises and the
storage thereof and specifically waives the provisions of California Civil Code
Section 1542 with respect to such release. Landlord's action or inaction with
regard to the provisions of this Paragraph 11 shall not be construed as a waiver
of Landlord's right to require Tenant to remove its property, restore any damage
to the Premises and the Building caused by such removal, and make any
restoration required pursuant to Paragraph 9 above. Tenant's mere vacating of
the Premises during the term hereof shall not constitute an Event of Default (as
defined in Paragraph 25.a.) so long as Tenant continues to pay Monthly Rent,
Additional Rent and all other sums due Landlord under this Lease, maintains the
insurance coverage required pursuant to Paragraph 15 of this Lease and otherwise
continues to perform its obligations under this Lease, and so long as Tenant
provides Landlord with written notice of an alternate address for notices to
Tenant under this Lease (other than the Premises) if such vacancy exceeds sixty
(60) consecutive days.
12. LIENS. Tenant shall not permit any mechanic's, materialman's or
other liens arising out of work performed at the Premises by or on behalf of
Tenant to be filed against the fee of the Real Property nor against Tenant's
interest in the Premises. Landlord shall have the right to post and keep posted
on the Premises any notices which it deems necessary for protection from such
liens. If any such liens are filed, Landlord may, upon twenty (20) days' written
notice to Tenant, without waiving its rights based on such breach by Tenant and
without releasing Tenant from any obligations hereunder, pay and satisfy the
same and in such event the sums so paid by Landlord shall be due and payable by
Tenant immediately without notice or demand, with interest from the date paid by
Landlord through the date Tenant pays Landlord, at the Interest Rate. Tenant
agrees to indemnify, defend and hold Landlord and the other Indemnitees (as
defined in Paragraph 14.b. below) harmless from and against any Claims (as
defined in Paragraph 14.b. below) for mechanics', materialmen's or other liens
in connection with any Alterations, repairs or any work performed, materials
furnished or obligations incurred by or for Tenant.
13. ASSIGNMENT AND SUBLETTING.
a. LANDLORD'S CONSENT. Landlord's and Tenant's agreement with
regard to Tenant's right to transfer all or part of its interest in the Premises
is as expressly set forth in this Paragraph 13. Tenant agrees that, except upon
Landlord's prior written consent, which consent shall not (subject to Landlord's
rights under Paragraph 13.d. below) be unreasonably withheld, neither this Lease
nor all or any part of the leasehold interest created hereby shall, directly or
indirectly, voluntarily or involuntarily, by operation of law or otherwise, be
assigned, mortgaged, pledged, encumbered or otherwise transferred by Tenant or
Tenant's legal representatives or successors in interest (collectively an
"assignment") and neither the Premises nor any part thereof shall be sublet or
be used or occupied for any purpose by anyone other than Tenant (collectively, a
"sublease"). Any assignment or subletting without Landlord's prior written
consent shall, at Landlord's option, be void and shall constitute an Event of
Default entitling Landlord to terminate this Lease and to exercise all other
remedies available to Landlord under this Lease and at law.
The parties hereto agree and acknowledge that, among other
circumstances for which Landlord may reasonably withhold its consent to an
assignment or sublease, it shall be reasonable for Landlord to withhold its
consent where: (i) the assignment or subletting would materially increase the
operating costs for the Building or the burden on the Building services, or
generate additional foot traffic, elevator usage or security concerns in the
Building, or create an increased probability of the comfort and/or safety of
Landlord and other tenants in the Building being compromised or reduced, (ii)
the space will be used for a school or training facility, an entertainment,
sports or recreation facility, retail sales to the public (unless Tenant's
permitted use is retail sales), a personnel or employment agency, an office or
facility of any governmental or quasi-governmental agency or authority, a place
of public assembly (including without limitation a meeting center, theater or
public forum), any use by or affiliation with a foreign government (including
without limitation an embassy or consulate or similar office), or a facility for
the provision of social, welfare or clinical health services or sleeping
accommodations (whether temporary, daytime or overnight); (iii) the proposed
assignee or subtenant is a prospective tenant of the Building (and Landlord is
in written correspondence to them regarding space available) or the proposed
assignee or subtenant is a current tenant of the Building; (iv) Landlord
disapproves of the proposed assignee or subtenant's reputation or
creditworthiness; (v) Landlord determines that the character of the business
that would be conducted by the proposed assignee or subtenant at the Premises,
or the manner of conducting such business, would be inconsistent with the
character of the Building as a first-class office building; (vi) the proposed
assignee or subtenant is an entity or related to an entity with whom Landlord or
any affiliate of Landlord has had adverse dealings relating to the use or
occupancy of space pursuant to a lease or a license, or the proposed assignee or
subtenant is an entity or related to an entity with whom Landlord or any
affiliate of Landlord has been engaged in litigation, or who has asserted a
legal claim against Landlord or any affiliate of Landlord, or against whom
Landlord or any affiliate of Landlord has asserted a legal claim;; (vii) the
assignment or subletting may conflict with any exclusive uses granted to other
tenants of the Real Property, or with the terms of any easement, covenant,
condition or restriction, or other agreement affecting the Real Property; (viii)
the assignment or subletting would involve a change in use from that expressly
permitted under this Lease; or (ix) Landlord determines that the proposed
assignee may be unable to perform all of Tenant's obligations under this Lease
or the proposed subtenant may be unable to perform all of its obligations under
the proposed sublease. Landlord's foregoing rights and options shall continue
throughout the entire term of this Lease.
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For purposes of this Paragraph 13, the following events shall be
deemed an assignment or sublease, as appropriate: (i) the issuance of equity
interests (whether stock, partnership interests or otherwise) in Tenant or any
subtenant or assignee, or any entity controlling any of them, to any person or
group of related persons, in a single transaction or a series of related or
unrelated transactions, such that, following such issuance, such person or group
shall have Control (as defined below) of Tenant or any subtenant or assignee;
(ii) a transfer of Control of Tenant or any subtenant or assignee, or any entity
controlling any of them, in a single transaction or a series of related or
unrelated transactions (including, without limitation, by consolidation, merger,
acquisition or reorganization), except that the transfer of outstanding capital
stock or other listed equity interests by persons or parties other than
"insiders" within the meaning of the Securities Exchange Act of 1934, as
amended, through the "over-the-counter" market or any recognized national or
international securities exchange, shall not be included in determining whether
Control has been transferred; (iii) a reduction of Tenant's assets to the point
that this Lease is substantially Tenant's only asset; (iv) a change or
conversion in the form of entity of Tenant, any subtenant or assignee, or any
entity controlling any of them, which has the effect of limiting the liability
of any of the partners, members or other owners of such entity; or (v) the
agreement by a third party to assume, take over, or reimburse Tenant for, any or
all of Tenant's obligations under this Lease, in order to induce Tenant to lease
space with such third party. "Control" shall mean direct or indirect ownership
of 50% or more of all of the voting stock of a corporation or 50% or more of the
legal or equitable interest in any other business entity, or the power to direct
the operations of any entity (by equity ownership, contract or otherwise).
If this Lease is assigned, whether or not in violation of the terms of
this Lease, Landlord may collect rent from the assignee. If the Premises or any
part thereof is sublet, Landlord may, upon an Event of Default by Tenant
hereunder, collect rent from the subtenant. In either event, Landlord may apply
the amount collected from the assignee or subtenant to Tenant's monetary
obligations hereunder.
The consent by Landlord to an assignment or subletting hereunder shall
not relieve Tenant or any assignee or subtenant from obtaining Landlord's
express prior written consent to any other or further assignment or subletting.
Neither an assignment or subletting nor the collection of rent by Landlord from
any person other than Tenant, nor the application of any such rent as provided
in this Paragraph 13.a. shall be deemed a waiver of any of the provisions of
this Paragraph 13.a. or release Tenant from its obligation to comply with the
provisions of this Lease and Tenant shall remain fully and primarily liable for
all of Tenant's obligations under this Lease. If Landlord approves of an
assignment or subletting hereunder and this Lease contains any renewal options,
expansion options, rights of first refusal, rights of first negotiation or any
other rights or options pertaining to additional space in the Building, such
rights and/or options shall not run to the subtenant or assignee, it being
agreed by the parties hereto that any such rights and options are personal to
the Tenant originally named herein and may not be transferred.
b. PROCESSING EXPENSES. Tenant shall pay to Landlord, as
Landlord's cost of processing each proposed assignment or subletting, an amount
equal to the sum of (i) Landlord's reasonable attorneys' and other professional
fees, plus (ii) the sum of $750.00 for the cost of Landlord's administrative,
accounting and clerical time (collectively, "Processing Costs"), and the amount
of all direct and indirect costs and expenses incurred by Landlord arising from
the assignee or sublessee taking occupancy of the subject space (including,
without limitation, costs of freight elevator operation for moving of
furnishings and trade fixtures, security service, janitorial and cleaning
service, and rubbish removal service). Notwithstanding anything to the contrary
herein, Landlord shall not be required to process any request for Landlord's
consent to an assignment or subletting until Tenant has paid to Landlord the
amount of Landlord's estimate of the Processing Costs and all other direct and
indirect costs and expenses of Landlord and its agents arising from the assignee
or subtenant taking occupancy.
c. CONSIDERATION TO LANDLORD. In the event of any assignment or
sublease, whether or not requiring Landlord's consent, Landlord shall be
entitled to receive, as additional rent hereunder, seventy-five percent (75%) of
any consideration (including, without limitation, payment for leasehold
improvements and any "Leasehold Profit" as defined below) paid by the assignee
or subtenant for the assignment or sublease and, in the case of a sublease,
seventy-five percent (75%) of the excess of the amount of rent paid for the
sublet space by the subtenant over the amount of Monthly Rent under Paragraph 5
above and Additional Rent under Paragraph 7 above attributable to the sublet
space for the corresponding month; except that Tenant may recapture, on an
amortized basis over the term of the sublease or assignment, any brokerage
commissions paid by Tenant in connection with the subletting or assignment (not
to exceed commissions typically paid in the market at the time of such
subletting or assignment), reasonable legal fees paid by Tenant in connection
with such assignment or subletting (not to exceed the lesser of (x) $2,500 or
(y) $0.35 per rentable square foot of the sublet or assigned space) and any
improvement allowance paid by Tenant to the subtenant or assignee (collectively
the "Assignment or Subletting Costs"), provided that, as a condition to Tenant
recapturing the Assignment or Subletting Costs, Tenant shall provide to
Landlord, within ninety (90) days of Landlord's execution of Landlord's consent
to the assignment or subletting, a detailed accounting of the Assignment or
Subletting Costs and supporting documents, such as receipts and construction
invoices. To effect the foregoing, Tenant shall deduct from the monthly amounts
received by Tenant from the subtenant or assignee as rent or consideration (i)
the Monthly Rent and Additional Rent payable by Tenant to Landlord for the
subject space and (ii) the incremental amount, on an amortized basis, of the
Assignment or Subletting Costs, and seventy-five percent (75%) of the then
remaining sum shall be paid promptly to
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Landlord. Upon Landlord's request, Tenant shall assign to Landlord all amounts
to be paid to Tenant by any such subtenant or assignee and that belong to
Landlord and shall direct such subtenant or assignee to pay the same directly to
Landlord. If there is more than one sublease under this Lease, the amounts (if
any) to be paid by Tenant to Landlord pursuant to the preceding sentence shall
be separately calculated for each sublease and amounts due Landlord with regard
to any one sublease may not be offset against rental and other consideration
pertaining to or due under any other sublease. "Leasehold Profit" shall be the
value allocated to the leasehold between the parties to the assignment or
sublease, but in no event less than the excess of the present value of the fair
market rent of the Premises for the remaining term of this Lease after such
assignment or sublease, over the present value of the Monthly Rent payable
hereunder for such remaining term, as reasonably determined by Landlord.
d. PROCEDURES. If Tenant desires to assign this Lease or any
interest therein or sublet all or part of the Premises, Tenant shall give
Landlord written notice thereof and the terms proposed (the "Sublease Notice"),
which Sublease Notice, in the case of a proposed sublease, shall designate the
space proposed to be sublet. Landlord shall have the prior right and option (to
be exercised by written notice to Tenant given within sixty (60) days after
receipt of Tenant's notice) (i) to sublet from Tenant any portion of the
Premises proposed by Tenant to be sublet, for the term for which such portion is
proposed to be sublet, but at the lesser of the proposed sublease rent or the
same rent (including Additional Rent as provided for in Paragraph 7 above) as
Tenant is required to pay to Landlord under this Lease for the same space,
computed on a pro rata square footage basis, and during the term of such
sublease Tenant shall be released of its obligations under this Lease with
regard to the subject space, (ii) to terminate this Lease as it pertains to the
portion of the Premises so proposed by Tenant to be sublet, or (iii) to approve
Tenant's proposal to sublet conditional upon Landlord's subsequent written
approval of the specific sublease obtained by Tenant and the specific subtenant
named therein. If Landlord exercises its option in (i) above, then Landlord may,
at Landlord's sole cost, construct improvements in the subject space and, so
long as the improvements are suitable for general office purposes, Landlord
shall have no obligation to restore the subject space to its original condition
following the termination of the sublease. If Landlord exercises its option
described in (iii) above, then Tenant shall have three (3) months thereafter to
submit to Landlord, for Landlord's written approval, Tenant's proposed sublease
agreement (in which the proposed subtenant shall be named, and which agreement
shall otherwise meet the requirements of Paragraph 13.e. below), together with a
current financial statement of such proposed subtenant and any other information
reasonably requested by Landlord. If Tenant fails to submit the specific
sublease and other required information within such time, or if the terms of the
specific sublease submitted by Tenant vary from the terms set forth in the
Sublease Notice approved by Landlord pursuant to (iii) above, then Tenant shall
be required to submit a new Sublease Notice for Landlord's evaluation pursuant
to the procedures set forth in this paragraph. If Landlord fails to exercise any
such option to sublet or to terminate, this shall not be construed as or
constitute a waiver of any of the provisions of Paragraphs 13.a., b., c. or d.
herein. If Landlord exercises any option to sublet or to terminate, any costs of
demising the portion of the Premises affected by such subleasing or termination
shall be borne by Tenant. In addition, Landlord shall have no liability for any
real estate brokerage commission(s) or with respect to any of the costs and
expenses that Tenant may have incurred in connection with its proposed
subletting, and Tenant agrees to indemnify, defend and hold Landlord and all
other Indemnitees harmless from and against any and all Claims (as defined in
Paragraph 14.b. below), including, without limitation, claims for commissions,
arising from such proposed subletting. Landlord's foregoing rights and options
shall continue throughout the entire term of this Lease. For purposes of this
Paragraph 13.d., a proposed assignment of this Lease in whole or in part shall
be deemed a proposed subletting of such space.
e. DOCUMENTATION. No permitted assignment or subletting by
Tenant shall be effective until there has been delivered to Landlord a fully
executed counterpart of the assignment or sublease which expressly provides that
(i) the assignee or subtenant may not further assign or sublet the assigned or
sublet space without Landlord's prior written consent (which, in the case of a
further assignment proposed by an assignee, shall not be unreasonably withheld,
subject to Landlord's rights under the provisions of this Paragraph 13), (ii)
the assignee or subtenant will comply with all of the provisions of this Lease,
and Landlord may enforce the Lease provisions directly against such assignee or
subtenant, (iii) in the case of an assignment, the assignee assumes all of
Tenant's obligations under this Lease arising on or after the date of the
assignment, and (iv) in the case of a sublease, the subtenant agrees to be and
remain jointly and severally liable with Tenant for the payment of rent
pertaining to the sublet space in the amount set forth in the sublease, and for
the performance of all of the terms and provisions of this Lease. In addition to
the foregoing, no sublease by Tenant shall be effective until there has been
delivered to Landlord a fully executed counterpart of Landlord's consent to
sublease form. The failure or refusal of a subtenant or assignee to execute any
such instrument shall not release or discharge the subtenant or assignee from
its liability as set forth above. Notwithstanding the foregoing, however, no
subtenant or assignee shall be permitted to occupy the Premises unless and until
such subtenant or assignee provides Landlord with certificates evidencing that
such subtenant or assignee is carrying all insurance coverage required of such
subtenant or assignee under this Lease.
f. NO MERGER. Without limiting any of the provisions of this
Paragraph 13, if Tenant has entered into any subleases of any portion of the
Premises, the voluntary or other surrender of this Lease by Tenant, or a mutual
cancellation by Landlord and Tenant, shall not work a merger, and shall, at the
option of Landlord, terminate all or any existing subleases or subtenancies or,
at the option of Landlord, operate as
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an assignment to Landlord of any or all such subleases or subtenancies. If
Landlord does elect that such surrender or cancellation operate as an assignment
of such subleases or subtenancies, Landlord shall in no way be liable for any
previous act or omission by Tenant under the subleases or for the return of any
deposit(s) under the subleases that have not been actually delivered to
Landlord, nor shall Landlord be bound by any sublease modification(s) executed
without Landlord's consent or for any advance rental payment by the subtenant in
excess of one month's rent.
g. AFFILIATES. Notwithstanding anything to the contrary in
Paragraphs 13.a. and 13.d., but subject to Paragraphs 13.e. and 13.f., Tenant
may assign this Lease or sublet the Premises or any portion thereof, without
Landlord's consent, to any partnership, corporation or other entity which
controls, is controlled by, or is under common control with Tenant or Tenant's
parent (control being defined for such purposes as ownership of at least 50% of
the equity interests in, or the power to direct the management of, the relevant
entity) or to any partnership, corporation or other entity resulting from a
merger or consolidation with Tenant or Tenant's parent, or to any person or
entity which acquires substantially all the assets of Tenant as a going concern
(collectively, an "Affiliate"), provided that (i) Landlord receives prior
written notice of an assignment or subletting, (ii) the Affiliate's net worth is
not less than Tenant's net worth as of the date of this Lease, (iii) the
Affiliate remains an Affiliate for the duration of the subletting or the balance
of the term in the event of an assignment, (iv) the Affiliate assumes (in the
event of an assignment) in writing all of Tenant's obligations under this Lease,
and (v) Landlord receives a fully executed copy of an assignment or sublease
agreement between Tenant and the Affiliate.
14. INDEMNIFICATION OF LANDLORD.
a. Landlord and the holders of any Superior Interests (as
defined in Paragraph 21 below) shall not be liable to Tenant and Tenant hereby
waives all claims against such parties for any loss, injury or other damage to
person or property in or about the Premises or the Real Property from any cause
whatsoever, including without limitation, water leakage of any character from
the roof, walls, basement, fire sprinklers, appliances, air conditioning,
plumbing or other portion of the Premises or the Real Property, or gas, fire,
explosion, falling plaster, steam, electricity, or any malfunction within the
Premises or the Real Property, or acts of other tenants of the Building;
provided, however, that the foregoing waiver shall be inapplicable to any loss,
injury or damage resulting directly from Landlord's gross negligence or willful
misconduct. Tenant acknowledges that from time to time throughout the term of
this Lease, construction work may be performed in and about the Building and the
Real Property by Landlord, contractors of Landlord, or other tenants or their
contractors, and that such construction work may result in noise and disruption
to Tenant's business. In addition to and without limiting the foregoing waiver
or any other provision of this Lease, Tenant agrees that Landlord shall not be
liable for, and Tenant expressly waives and releases Landlord and the other
Indemnitees (as defined in Paragraph 14.b. below) from any Claims (as defined in
Paragraph 14.b. below), including without limitation, any and all consequential
damages or interruption or loss of business, income or profits, or claims of
constructive eviction, arising or alleged to be arising as a result of any such
construction activity.
b. Tenant shall hold Landlord and the holders of any Superior
Interest, and the constituent shareholders, partners or other owners thereof,
and all of their agents, contractors, servants, officers, directors, employees
and licensees (collectively with Landlord, the "Indemnitees") harmless from and
indemnify the Indemnitees against any and all claims, liabilities, damages,
costs and expenses, including reasonable attorneys' fees and costs incurred in
defending against the same (collectively, "Claims"), to the extent arising from
(a) the acts or omissions of Tenant or any other Tenant Parties (as defined in
Paragraph 8.c. above) in, on or about the Real Property, or (b) any construction
or other work undertaken by or on behalf of Tenant in, on or about the Premises,
whether prior to or during the term of this Lease, or (c) any breach or Event of
Default under this Lease by Tenant, or (d) any accident, injury or damage,
howsoever and by whomsoever caused, to any person or property, occurring in, on
or about the Premises; except to the extent such Claims are caused directly by
the gross negligence or willful misconduct of Landlord or its authorized
representatives. In case any action or proceeding be brought against any of the
Indemnitees by reason of any such Claim, Tenant, upon notice from Landlord,
covenants to resist and defend at Tenant's sole expense such action or
proceeding by counsel reasonably satisfactory to Landlord. The provisions of
this Paragraph 14.b. shall survive the expiration or earlier termination of this
Lease with respect to any injury, illness, death or damage occurring prior to
such expiration or termination.
15. INSURANCE.
a. TENANT'S INSURANCE. Tenant shall, at Tenant's expense,
maintain during the term of this Lease (and, if Tenant occupies or conducts
activities in or about the Premises prior to or after the term hereof, then also
during such pre-term or post-term period): (i) commercial general liability
insurance including contractual liability coverage, with minimum coverages of
$1,000,000 per occurrence combined single limit for bodily injury and property
damage, $1,000,000 for products-completed operations coverage, $100,000 fire
legal liability, $1,000,000 for personal and advertising injury (which coverage
shall not be subject to the contractual liability exclusion), with a $2,000,000
general aggregate limit, for injuries to, or illness or death of, persons and
damage to property occurring in or about the Premises or otherwise resulting
from Tenant's operations in the Building, (ii) property insurance protecting
Tenant against loss or damage
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by fire and such other risks as are insurable under then-available standard
forms of "all risk" insurance policies (excluding earthquake and flood but
including water damage), covering Tenant's personal property and trade fixtures
in or about the Premises or the Real Property, and any improvements and/or
Alterations in the Premises, for the full replacement value thereof without
deduction for depreciation; (iii) workers' compensation insurance in statutory
limits; (iv) at least three months' coverage for loss of business income and
continuing expenses, providing protection against any peril included within the
classification "all risk," excluding earthquake and flood but including water
damage; and (v) if Tenant operates owned, leased or non-owned vehicles on the
Real Property, comprehensive automobile liability insurance with a minimum
coverage of $1,000,000 per occurrence, combined single limit. The above
described policies shall protect Tenant, as named insured, and Landlord and all
the other Indemnitees and any other parties designated by Landlord, as
additional insureds; shall insure Landlord's and such other parties' contingent
liability with regard to acts or omissions of Tenant; shall specifically include
all liability assumed by Tenant under this Lease (provided, however, that such
contractual liability coverage shall not limit or be deemed to satisfy Tenant's
indemnity obligations under this Lease); and, if subject to deductibles, shall
provide for deductible amounts not in excess of those approved in advance in
writing by Landlord in its sole discretion. Landlord reserves the right to
increase the foregoing amount of liability coverage from time to time as
Landlord determines is required to adequately protect Landlord and the other
parties designated by Landlord from the matters insured thereby (provided,
however, that Landlord makes no representation that the limits of liability
required hereunder from time to time shall be adequate to protect Tenant), and
to require that Tenant cause any of its contractors, vendors, movers or other
parties conducting activities in or about or occupying the Premises to obtain
and maintain insurance as determined by Landlord and as to which Landlord and
such other parties designated by Landlord shall be additional insureds.
b. POLICY FORM. Each insurance policy required pursuant to
Paragraph 15.a. above shall be issued by an insurance company licensed in the
State of California and with a general policyholders' rating of "A+" or better
and a financial size ranking of "Class VIII" or higher in the most recent
edition of Best's Insurance Guide. Each insurance policy, other than Tenant's
workers' compensation insurance, shall (i) provide that it may not be materially
changed, cancelled or allowed to lapse unless thirty (30) days' prior written
notice to Landlord and any other insureds designated by Landlord is first given,
(ii) provide that no act or omission of Tenant shall affect or limit the
obligations of the insurer with respect to any other insured, (iii) include all
waiver of subrogation rights endorsements necessary to effect the provisions of
Paragraph 16 below, and (iv) provide that the policy and the coverage provided
shall be primary, that Landlord, although an additional insured, shall
nevertheless be entitled to recovery under such policy for any damage to
Landlord or the other Indemnitees by reason of acts or omissions of Tenant, and
that any coverage carried by Landlord shall be noncontributory with respect to
policies carried by Tenant. Each such insurance policy or a certificate thereof
shall be delivered to Landlord by Tenant on or before the effective date of such
policy and thereafter Tenant shall deliver to Landlord renewal policies or
certificates at least thirty (30) days prior to the expiration dates of expiring
policies. If Tenant fails to procure such insurance or to deliver such policies
or certificates, Landlord may, at its option, procure the same for Tenant's
account, and the cost thereof shall be paid to Landlord by Tenant upon demand.
Landlord may at any time, and from time to time, inspect and/or copy any and all
insurance policies required by this Lease.
c. Nothing in this Paragraph 15 shall be construed as creating
or implying the existence of (i) any ownership by Tenant of any fixtures,
additions, Alterations, or improvements in or to the Premises or (ii) any right
on Tenant's part to make any addition, Alteration or improvement in or to the
Premises.
16. MUTUAL WAIVER OF SUBROGATION RIGHTS. Each party hereto hereby
releases the other respective party and, in the case of Tenant as the releasing
party, the other Indemnitees, and the respective partners, shareholders, agents,
employees, officers, directors and authorized representatives of such released
party, from any claims such releasing party may have for damage to the Building,
the Premises or any of such releasing party's fixtures, personal property,
improvements and alterations in or about the Premises, the Building or the Real
Property that is caused by or results from risks insured against under any fire
and extended coverage insurance policies actually carried by such releasing
party or deemed to be carried by such releasing party; provided, however, that
such waiver shall be limited to the extent of the net insurance proceeds payable
by the relevant insurance company with respect to such loss or damage (or in the
case of deemed coverage, the net proceeds that would have been payable). For
purposes of this Paragraph 16, Tenant shall be deemed to be carrying any of the
insurance policies required pursuant to Paragraph 15 but not actually carried by
Tenant, and Landlord shall be deemed to carry standard fire and extended
coverage policies on the Real Property. Each party hereto shall cause each such
fire and extended coverage insurance policy obtained by it to provide that the
insurance company waives all rights of recovery by way of subrogation against
the other respective party and the other released parties in connection with any
matter covered by such policy.
17. UTILITIES.
a. BASIC SERVICES. Landlord shall furnish the following
utilities and services ("Basic Services") for the Premises: (i) during the hours
of 7 A.M. to 7 P.M. ("Business Hours") Monday through Friday (except public
holidays) ("Business Days"), electricity for Building standard lighting and
power
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suitable for the use of the Premises for ordinary general office purposes, (ii)
during Business Hours on Business Days, heat and air conditioning required in
Landlord's judgment for the comfortable use and occupancy of the Premises for
ordinary general office purposes, (iii) unheated water for the restroom(s) and
drinking fountain(s) in the public areas serving the Premises, (iv) elevator
service to the floor(s) of the Premises by nonattended automatic elevators for
general office pedestrian usage, and (v) on Business Days, janitorial services
limited to emptying and removal of general office refuse, light vacuuming as
needed and window washing as determined by Landlord. Notwithstanding the
foregoing, however, Tenant may use water, heat, air conditioning, electric
current, elevator and janitorial service in excess of that provided in Basic
Services ("Excess Services," which shall include without limitation any power
usage other than through existing standard 110-volt AC outlets; electricity
and/or water consumed by Tenant in connection with any dedicated or supplemental
heating, ventilating and/or air conditioning, computer power, telecommunications
and/or other special units or systems of Tenant; chilled, heated or condenser
water; or water used for any purpose other than ordinary drinking and lavatory
purposes), provided that the Excess Services desired by Tenant are reasonably
available to Landlord and to the Premises (it being understood that in no event
shall Landlord be obligated to make available to the Premises more than the pro
rata share of the capacity of any Excess Service available to the Building or
the applicable floor of the Building, as the case may be), and provided further
that Tenant complies with the procedures established by Landlord from time to
time for requesting and paying for such Excess Services and with all other
provisions of this Paragraph 17. Landlord reserves the right to install in the
Premises or the Real Property electric current and/or water meters (including,
without limitation, any additional wiring, conduit or panel required therefor)
to measure the electric current or water consumed by Tenant or to cause the
usage to be measured by other reasonable methods (e.g. by temporary "check"
meters or by survey). Notwithstanding the above, (subject to any temporary
shutdown for repairs, for security purposes, for compliance with any legal
restrictions, or due to strikes, lockouts, labor disputes, fire or other
casualty, acts of God, or other causes beyond the reasonable control of
Landlord) Tenant shall have access to the Premises 24 hours a day, each day of
the Lease term.
b. PAYMENT FOR UTILITIES AND SERVICES. The cost of Basic
Services shall be included in Operating Expenses. In addition, Tenant shall pay
to Landlord upon demand (i) the cost, at Landlord's prevailing rate, of any
Excess Services used by Tenant, (ii) the cost of installing, operating,
maintaining or repairing any meter or other device used to measure Tenant's
consumption of utilities, (iii) the cost of installing, operating, maintaining
or repairing any Temperature Balance Equipment (as defined in Paragraph 17.c.
below) for the Premises and/or any equipment required in connection with any
Excess Services requested by Tenant, and (iv) any cost otherwise incurred by
Landlord in keeping account of or determining any Excess Services used by
Tenant. Landlord's failure to bill Tenant for any of the foregoing shall not
waive Landlord's right to bill Tenant for the same at a later time.
c. TEMPERATURE BALANCE. If the temperature otherwise maintained
in any portion of the Premises by the heating, air conditioning or ventilation
system is affected as a result of (i) the type or quantity of any lights,
machines or equipment (including without limitation typical office equipment)
used by Tenant in the Premises, (ii) the occupancy of such portion of the
Premises by more than one person per two hundred (200) square feet of rentable
area therein, (iii) an electrical load for lighting or power in excess of the
limits specified in Paragraph 17.d. below, or (iv) any rearrangement of
partitioning or other improvements, then at Tenant's sole cost, Landlord may
install any equipment, or modify any existing equipment (including the standard
air conditioning equipment) Landlord deems necessary to restore the temperature
balance (such new equipment or modifications to existing equipment termed herein
"Temperature Balance Equipment"). Tenant agrees to keep closed, when necessary,
draperies which, because of the sun's position, must be closed to provide for
the efficient operation of the air conditioning system, and Tenant agrees to
cooperate with Landlord and to abide by the regulations and requirements which
Landlord may prescribe for the proper functioning and protection of the heating,
ventilating and air conditioning system. Landlord makes no representation to
Tenant regarding the adequacy or fitness of the heating, air conditioning or
ventilation equipment in the Building to maintain temperatures that may be
required for, or because of, any computer or communications rooms, machine
rooms, conference rooms or other areas of high concentration of personnel or
electrical usage, or any other uses other than or in excess of the fractional
horsepower normally required for office equipment, and Landlord shall have no
liability for loss or damage suffered by Tenant or others in connection
therewith.
d. UTILITY CONNECTIONS. Tenant shall not connect or use any
apparatus or device in the Premises (i) using current in excess of 110 volts, or
(ii) which would cause Tenant's electrical demand load to exceed 1.0 watts per
rentable square foot for overhead lighting or 2.0 watts per rentable square foot
for convenience outlets, or (iii) which would exceed the capacity of the
existing panel or transformer serving the Premises. Tenant shall not connect
with electric current (except through existing outlets in the Premises or such
additional outlets as may be installed in the Premises as part of initial
improvements or Alterations approved by Landlord), or water pipes, any apparatus
or device for the purpose of using electrical current or water.
Landlord will not permit additional coring of the floor of the
Premises in order to install new electric outlets in the Premises unless
Landlord is satisfied, on the basis of such information to be supplied by Tenant
at Tenant's expense, that coring of the floor in order to install such
additional outlets will not weaken the structure of the floor.
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e. INTERRUPTION OF SERVICES. Landlord's obligation to provide
utilities and services for the Premises are subject to the Rules and Regulations
of the Building, applicable Legal Requirements (including the rules or actions
of the public utility company furnishing the utility or service), and shutdowns
for maintenance and repairs, for security purposes, or due to strikes, lockouts,
labor disputes, fire or other casualty, acts of God, or other causes beyond the
control of Landlord. In the event of an interruption in, or failure or inability
to provide any service or utility for the Premises for any reason, such
interruption, failure or inability shall not constitute an eviction of Tenant,
constructive or otherwise, or impose upon Landlord any liability whatsoever,
including, but not limited to, liability for consequential damages or loss of
business by Tenant. Tenant hereby waives the provisions of California Civil Code
Section 1932(1) or any other applicable existing or future Legal Requirement
permitting the termination of this Lease due to such interruption, failure or
inability. Notwithstanding the foregoing, if any interruption in, or failure or
inability to provide any of the services or utilities described in Paragraph
17.a. is within Landlord's reasonable control and continues for fifteen (15) or
more consecutive days, and such interruption materially impairs Tenant's use of
the Premises for Tenant's business purposes as a result thereof, then Tenant
shall be entitled to an abatement of Monthly Rent under Paragraph 5 hereof and
Additional Rent under Paragraph 7 hereof, which abatement shall be based on the
extent of the impairment of Tenant's use the Premises.
f. GOVERNMENTAL CONTROLS. In the event any governmental
authority having jurisdiction over the Real Property or the Building promulgates
or revises any Legal Requirement or building, fire or other code or imposes
mandatory or voluntary controls or guidelines on Landlord or the Real Property
or the Building relating to the use or conservation of energy or utilities or
the reduction of automobile or other emissions (collectively "Controls") or in
the event Landlord is required or elects to make alterations to the Real
Property or the Building in order to comply with such mandatory or voluntary
Controls, Landlord may, in its sole discretion, comply with such Controls or
make such alterations to the Real Property or the Building related thereto. Such
compliance and the making of such alterations shall not constitute an eviction
of Tenant, constructive or otherwise, or impose upon Landlord any liability
whatsoever, including, but not limited to, liability for consequential damages
or loss of business by Tenant.
18. PERSONAL PROPERTY AND OTHER TAXES. Tenant shall pay, at least ten
(10) days before delinquency, any and all taxes, fees, charges or other
governmental impositions levied or assessed against Landlord or Tenant (a) upon
Tenant's equipment, furniture, fixtures, improvements and other personal
property (including carpeting installed by Tenant) located in the Premises, (b)
by virtue of any Alterations made by Tenant to the Premises, and (c) upon this
transaction or any document to which Tenant is a party creating or transferring
an interest or an estate in the Premises. If any such fee, charge or other
governmental imposition is paid by Landlord, Tenant shall reimburse Landlord for
Landlord's payment upon demand.
19. RULES AND REGULATIONS. Tenant shall comply with the rules and
regulations set forth on Exhibit B attached hereto, as such rules and
regulations may be modified or amended by Landlord from time to time (the
"Rules and Regulations"). Landlord shall not be responsible to Tenant for the
nonperformance or noncompliance by any other tenant or occupant of the
Building of or with any of the Rules and Regulations. In the event of any
conflict between the Rules and Regulations and the express provisions of this
Lease, the provisions of this Lease shall control.
20. SURRENDER; HOLDING OVER.
a. SURRENDER. Upon the expiration or other termination of this
Lease, Tenant shall surrender the Premises to Landlord vacant and broom-clean,
with all improvements and Alterations (except as provided below) in their
original condition, except for reasonable wear and tear, damage from casualty or
condemnation and any changes resulting from approved Alterations; provided,
however, that prior to the expiration or termination of this Lease Tenant shall
remove from the Premises any Alterations that Tenant is required by Landlord to
remove under the provisions of this Lease, and all of Tenant's personal property
and trade fixtures. If such removal is not completed at the expiration or other
termination of this Lease, Landlord may remove the same at Tenant's expense. Any
damage to the Premises or the Building caused by such removal shall be repaired
promptly by Tenant (including the patching or repairing of ceilings and walls)
or, if Tenant fails to do so, Landlord may do so at Tenant's expense. The
removal of Alterations from the Premises shall be governed by Paragraph 9 above.
Tenant's obligations under this paragraph shall survive the expiration or other
termination of this Lease. Upon expiration or termination of this Lease or of
Tenant's possession, Tenant shall surrender all keys to the Premises or any
other part of the Building and shall make known to Landlord the combination of
locks on all safes, cabinets and vaults that may be located in the Premises.
b. HOLDING OVER. If Tenant remains in possession of the
Premises after the expiration or earlier termination of this Lease with the
express written consent of Landlord, Tenant's occupancy shall be a
month-to-month tenancy at a rent agreed upon by Landlord and Tenant, but in no
event less than the greater of (i) one hundred fifty percent (150%) of the
Monthly Rent and Additional Rent payable under this Lease during the last full
month prior to the date of the expiration of this Lease or (ii) the then fair
market rental (as reasonably determined by Landlord) for the Premises. Except as
provided in the preceding sentence, the month-to-month tenancy shall be on the
terms and conditions of this Lease, except that any
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renewal options, expansion options, rights of first refusal, rights of first
negotiation or any other rights or options pertaining to additional space in the
Building contained in this Lease shall be deemed to have terminated and shall be
inapplicable thereto. Landlord's acceptance of rent after such holding over with
Landlord's written consent shall not result in any other tenancy or in a renewal
of the original term of this Lease. If Tenant remains in possession of the
Premises after the expiration or earlier termination of this Lease without
Landlord's consent, Tenant's continued possession shall be on the basis of a
tenancy at sufferance and Tenant shall pay as Monthly Rent during the holdover
period an amount equal to the greater of (i) one hundred fifty percent (150%) of
the fair market rental (as reasonably determined by Landlord) for the Premises
or (ii) two hundred percent (200%) of the Monthly Rent and Additional Rent
payable under this Lease for the last full month prior to the date of such
expiration or termination.
c. INDEMNIFICATION. Tenant shall indemnify, defend and hold
Landlord harmless from and against all Claims incurred by or asserted against
Landlord and arising directly or indirectly from Tenant's failure to timely
surrender the Premises, including but not limited to (i) any rent payable by or
any loss, cost, or damages, including lost profits, claimed by any prospective
tenant of the Premises or any portion thereof, and (ii) Landlord's damages as a
result of such prospective tenant rescinding or refusing to enter into the
prospective lease of the Premises or any portion thereof by reason of such
failure to timely surrender the Premises.
21. SUBORDINATION AND ATTORNMENT.
a. This Lease is expressly made subject and subordinate to any
mortgage, deed of trust, ground lease, underlying lease or like encumbrance
affecting any part of the Real Property or any interest of Landlord therein
which is now existing or hereafter executed or recorded, any present or future
modification, amendment or supplement to any of the foregoing, and to any
advances made thereunder (any of the foregoing being a "Superior Interest")
without the necessity of any further documentation evidencing such
subordination. Notwithstanding the foregoing, Tenant shall, within ten (10) days
after Landlord's request, execute and deliver to Landlord a document evidencing
the subordination of this Lease to a particular Superior Interest. Tenant hereby
irrevocably appoints Landlord as Tenant's attorney-in-fact to execute and
deliver any such instrument in the name of Tenant if Tenant fails to do so
within such time. If the interest of Landlord in the Real Property or the
Building is transferred to any person ("Purchaser") pursuant to or in lieu of
proceedings for enforcement of any Superior Interest, Tenant shall immediately
and automatically attorn to the Purchaser, and this Lease shall continue in full
force and effect as a direct lease between the Purchaser and Tenant on the terms
and conditions set forth herein.
b. At Tenant's request, Landlord will request that the holder
of the current Superior Interest execute a written "non-disturbance agreement"
on Tenant's behalf providing that, if Tenant is not in default under this Lease
beyond any applicable grace period, that such party will recognize this Lease
and Tenant's rights hereunder and will not disturb Tenant's possession
hereunder, and if this Lease is by operation of law terminated in a foreclosure,
that a new lease will be entered into on the same terms as this Lease for the
remaining term hereof. The failure of such holder of a Superior Interest to
execute and deliver such a non-disturbance agreement upon Landlord's request
shall not constitute a default hereunder by Landlord, it being understood that
Landlord's sole obligation is to request in good faith the execution and
delivery of such agreement. Further, if in order to obtain such non-disturbance
agreement, Landlord is required to expend any sum, Landlord shall so notify
Tenant and Tenant may elect to pay such sum. In no event shall Landlord be
required to expend any sums in connection therewith.
22. FINANCING CONDITION. If any lender or ground lessor that intends
to acquire an interest in, or holds a mortgage, ground lease or deed of trust
encumbering any portion of the Real Property should require either the execution
by Tenant of an agreement requiring Tenant to send such lender written notice of
any default by Landlord under this Lease, giving such lender the right to cure
such default within any period afforded to Landlord to cure the same and
preventing Tenant from terminating this Lease unless such default remains
uncured after such period, then Tenant agrees that it shall, within ten (10)
days after Landlord's request, execute and deliver such agreement. Tenant
acknowledges and agrees that its failure to timely execute any such agreement or
modification required by such lender or ground lessor may cause Landlord serious
financial damage by causing the failure of a financing transaction and giving
Landlord all of its rights and remedies under Paragraph 25 below, including its
right to damages caused by the loss of such financing , but only to the extent
any such loss is attributable solely or primarily to Tenant's failure to execute
any such agreement.
23. ENTRY BY LANDLORD. Landlord may, at any and all reasonable times,
and upon reasonable advance notice (provided that no advance notice need be
given if an emergency necessitates an immediate entry or prior to entry to
provide routine janitorial services), enter the Premises to (a) inspect the same
and to determine whether Tenant is in compliance with its obligations hereunder,
(b) supply janitorial and any other service Landlord is required to provide
hereunder, (c) show the Premises to prospective lenders, purchasers or tenants,
(d) post notices of nonresponsibility, and (e) alter, improve or repair the
Premises or any other portion of the Real Property. In connection with any such
alteration, improvement or repair, Landlord may erect in the Premises or
elsewhere in the Real Property scaffolding and other structures reasonably
required for the work to be performed. In no event shall such entry or work
entitle Tenant to an
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abatement of rent, constitute an eviction of Tenant, constructive or otherwise,
or impose upon Landlord any liability whatsoever, including but not limited to
liability for consequential damages or loss of business or profits by Tenant;
provided, however, that Landlord shall use good faith efforts to cause all such
work to be done in such a manner as to cause as little interference to Tenant as
reasonably possible without incurring additional expense. Landlord shall at all
times retain a key with which to unlock all of the doors in the Premises, except
Tenant's vaults and safes. If an emergency necessitates immediate access to the
Premises, Landlord may use whatever force is necessary to enter the Premises and
any such entry to the Premises shall not constitute a forcible or unlawful entry
into the Premises, a detainer of the Premises, or an eviction of Tenant from the
Premises, or any portion thereof.
24. INSOLVENCY OR BANKRUPTCY. The occurrence of any of the following
shall constitute an Event of Default under Paragraph 25 below:
1. Tenant ceases doing business as a going concern, makes an
assignment for the benefit of creditors, is adjudicated an insolvent, files a
petition (or files an answer admitting the material allegations of such
petition) seeking for Tenant any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar arrangement under any state or
federal bankruptcy or other law, or Tenant consents to or acquiesces in the
appointment, pursuant to any state or federal bankruptcy or other law, of a
trustee, receiver or liquidator for the Premises, for Tenant or for all or any
substantial part of Tenant's assets; or
2. Tenant fails within sixty (60) days after the commencement
of any proceedings against Tenant seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
state or federal bankruptcy or other Legal Requirement, to have such proceedings
dismissed, or Tenant fails, within sixty (60) days after an appointment pursuant
to any state or federal bankruptcy or other Legal Requirement without Tenant's
consent or acquiescence, of any trustee, receiver or liquidator for the
Premises, for Tenant or for all or any substantial part of Tenant's assets, to
have such appointment vacated; or
3. Tenant is unable, or admits in writing its inability, to pay
its debts as they mature; or
4. Tenant gives notice to any governmental body of its
insolvency or pending insolvency, or of its suspension or pending suspension of
operations. In no event shall this Lease be assigned or assignable by reason of
any voluntary or involuntary bankruptcy, insolvency or reorganization
proceedings, nor shall any rights or privileges hereunder be an asset of Tenant,
the trustee, debtor-in-possession, or the debtor's estate in any bankruptcy,
insolvency or reorganization proceedings.
25. DEFAULT AND REMEDIES.
a. EVENTS OF DEFAULT. The occurrence of any of the following
shall constitute an "Event of Default" by Tenant:
1. Tenant fails to pay when due Monthly Rent, Additional
Rent or any other rent due hereunder (provided that the first two (2)
occurrences of such a delinquency in any twenty-four (24)-month period that ends
on the date of such occurrence shall be an Event of Default only if Tenant fails
to cure such delinquency within five (5) days of written notice from Landlord
thereof); or
2. Tenant abandons the Premises or vacates the Premises
for more than sixty (60) consecutive days without providing Landlord with
written notice of an alternate address for notices to Tenant under this Lease
(other than the Premises); or
3. Tenant fails to deliver any estoppel certificate
pursuant to Paragraph 29 below, subordination agreement pursuant to Paragraph 21
above, or document required pursuant to Paragraph 22 above, within the
applicable period set forth therein; or
4. Tenant violates the bankruptcy and insolvency
provisions of Paragraph 24 above; or
5. Tenant makes or has made or furnishes or has furnished
any material warranty, representation or statement to Landlord in connection
with this Lease, or any other agreement made by Tenant for the benefit of
Landlord, which is or was false or misleading in any material respect when made
or furnished; or
6. Tenant assigns this Lease or subleases any portion of
the Premises in violation of Paragraph 13 above; or
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7. Tenant fails to comply with any other provision of this
Lease in the manner and within the time required, or, with respect to matters
which do not pose a health, safety or security risk and do not annoy other
tenants, Tenant fails to comply within thirty (30) calendar days after written
notice of such failure (or if the noncompliance can be cured but cannot by its
nature be cured within the 30-day period, if Tenant fails to commence to cure
such noncompliance within the 30-day period and thereafter diligently prosecute
such cure to completion).
b. REMEDIES. Upon the occurrence of an Event of Default
Landlord shall have the following remedies, which shall not be exclusive but
shall be cumulative and shall be in addition to any other remedies now or
hereafter allowed by law:
1. Landlord may terminate Tenant's right to possession of
the Premises at any time by written notice to Tenant. Tenant expressly
acknowledges that in the absence of such written notice from Landlord, no other
act of Landlord, including, but not limited to, its re-entry into the Premises,
its efforts to relet the Premises, its reletting of the Premises for Tenant's
account, its storage of Tenant's personal property and trade fixtures, its
acceptance of keys to the Premises from Tenant, its appointment of a receiver,
or its exercise of any other rights and remedies under this Paragraph 25 or
otherwise at law, shall constitute an acceptance of Tenant's surrender of the
Premises or constitute a termination of this Lease or of Tenant's right to
possession of the Premises.
Upon such termination in writing of Tenant's right to possession of
the Premises, this Lease shall terminate and Landlord shall be entitled to
recover damages from Tenant as provided in California Civil Code Section 1951.2
or any other applicable existing or future Legal Requirement providing for
recovery of damages for such breach, including but not limited to the following:
(i) The reasonable cost of recovering the Premises;
plus
(ii) The reasonable cost of removing Tenant's
Alterations, trade fixtures and improvements; plus
(iii) All unpaid rent due or earned hereunder prior to
the date of termination, less the proceeds of any reletting or any rental
received from subtenants prior to the date of termination applied as provided in
Paragraph 25.b.2. below, together with interest at the Interest Rate, on such
sums from the date such rent is due and payable until the date of the award of
damages; plus
(iv) The amount by which the rent which would be
payable by Tenant hereunder, including Additional Rent under Paragraph 7 above,
as reasonably estimated by Landlord, from the date of termination until the date
of the award of damages, exceeds the amount of such rental loss as Tenant proves
could have been reasonably avoided, together with interest at the Interest Rate
on such sums from the date such rent is due and payable until the date of the
award of damages; plus
(v) The amount by which the rent which would be
payable by Tenant hereunder, including Additional Rent under Paragraph 7 above,
as reasonably estimated by Landlord, for the remainder of the then term, after
the date of the award of damages exceeds the amount such rental loss as Tenant
proves could have been reasonably avoided, discounted at the discount rate
published by the Federal Reserve Bank of San Francisco for member banks at the
time of the award plus one percent (1%); plus
(vi) Such other amounts in addition to or in lieu of
the foregoing as may be permitted from time to time by applicable law, including
without limitation any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform its obligations
under this Lease or which in the ordinary course of things would be likely to
result therefrom.
2. Landlord has the remedy described in California Civil
Code Section 1951.4 (a landlord may continue the lease in effect after the
tenant's breach and abandonment and recover rent as it becomes due, if the
tenant has the right to sublet and assign subject only to reasonable
limitations), and may continue this Lease in full force and effect and may
enforce all of its rights and remedies under this Lease, including, but not
limited to, the right to recover rent as it becomes due. After the occurrence of
an Event of Default, Landlord may enter the Premises without terminating this
Lease and sublet all or any part of the Premises for Tenant's account to any
person, for such term (which may be a period beyond the remaining term of this
Lease), at such rents and on such other terms and conditions as Landlord deems
advisable. In the event of any such subletting, rents received by Landlord from
such subletting shall be applied (i) first, to the payment of the costs of
maintaining, preserving, altering and preparing the Premises for subletting, the
other costs of subletting, including but not limited to brokers' commissions,
attorneys' fees and expenses of removal of Tenant's personal property, trade
fixtures and Alterations; (ii) second, to the payment of rent then due and
payable hereunder; (iii) third, to the payment of future rent as the same may
become due and payable hereunder; (iv) fourth, the balance, if any, shall be
paid to Tenant upon (but not before) expiration of the term of this Lease. If
the rents received by Landlord from such subletting, after application as
provided above, are insufficient in any month to pay the rent due and payable
hereunder for such month, Tenant shall pay such deficiency to Landlord monthly
upon demand. Notwithstanding any such
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subletting for Tenant's account without termination, Landlord may at any time
thereafter, by written notice to Tenant, elect to terminate this Lease by virtue
of a previous Event of Default.
During the continuance of an Event of Default, for so long as Landlord
does not terminate Tenant's right to possession of the Premises and subject to
Paragraph 13, entitled Assignment and Subletting, and the options granted to
Landlord thereunder, Landlord shall not unreasonably withhold its consent to an
assignment or sublease of Tenant's interest in the Premises or in this Lease.
3. During the continuance of an Event of Default and after
lawfully obtaining possession of the Premises, Landlord may enter the Premises
without terminating this Lease and remove all Tenant's personal property,
Alterations and trade fixtures from the Premises and store them at Tenant's risk
and expense, in compliance with all applicable laws. If Landlord removes such
property from the Premises and stores it at Tenant's risk and expense, and if
Tenant fails to pay the cost of such removal and storage after written demand
therefor and/or to pay any rent then due, then after the property has been
stored for a period of thirty (30) days or more Landlord may sell such property
at public or private sale, in the manner and at such times and places as
Landlord deems commercially reasonable following reasonable notice to Tenant of
the time and place of such sale. The proceeds of any such sale shall be applied
first to the payment of the expenses for removal and storage of the property,
the preparation for and the conducting of such sale, and for attorneys' fees and
other legal expenses incurred by Landlord in connection therewith, and the
balance shall be applied as provided in Paragraph 25.b.2. above.
Provided the same is done in compliance with all applicable laws,
Tenant hereby waives all claims for damages that may be caused by Landlord's
reentering and taking possession of the Premises or removing and storing
Tenant's personal property pursuant to this Paragraph 25, and Tenant shall
indemnify, defend and hold Landlord harmless from and against any and all Claims
resulting from any such act. No reentry by Landlord shall constitute or be
construed as a forcible entry by Landlord.
4. Landlord may require Tenant to remove any and all
Alterations from the Premises or, if Tenant fails to do so within ten (10) days
after Landlord's request, Landlord may do so at Tenant's expense.
5. Landlord may cure the Event of Default at Tenant's
expense, it being understood that such performance shall not waive or cure the
subject Event of Default. If Landlord pays any sum or incurs any expense in
curing the Event of Default, Tenant shall reimburse Landlord upon demand for the
amount of such payment or expense with interest at the Interest Rate from the
date the sum is paid or the expense is incurred until Landlord is reimbursed by
Tenant. Any amount due Landlord under this subsection shall constitute
additional rent hereunder.
c. WAIVER OF REDEMPTION. Tenant hereby waives, for itself and
all persons claiming by and under Tenant, all rights and privileges which it
might have under any present or future Legal Requirement to redeem the Premises
or to continue this Lease after being dispossessed or ejected from the Premises.
26. DAMAGE OR DESTRUCTION. If all or a part of the Real Property is
damaged by fire or other casualty, and the damage can, in Landlord's reasonable
opinion, be repaired within one hundred twenty (120) days of the damage, then
this Lease shall remain in full force and effect. If the repairs cannot, in
Landlord's opinion, be made within the one hundred twenty (120)-day period,
Landlord at its option exercised by written notice to Tenant within the one
hundred twenty (120)-day period, may terminate this Lease as of the date
specified by Landlord in the notice, which date shall be not less than thirty
(30) days nor more than sixty (60) days after the date such notice is given, and
this Lease shall terminate on the date specified in the notice. If Landlord does
not give notice terminating this Lease, and, if the damage is to the Premises or
access to or use and occupancy of the Premises is materially impaired as a
result of the damage, Landlord shall repair the damage.
If all or a part of the Premises are damaged by fire or other
casualty, or if the Building is so damaged that access to or use and occupancy
of the Premises is materially impaired, Landlord shall promptly give Tenant
notice of Landlord's reasonable estimate of the time required to make such
repairs (the "Damage Estimate"). If the Damage Estimate is more than one hundred
eighty (180) days, and Landlord does not give notice terminating this Lease (as
provided above), then Tenant may give notice to Landlord, within thirty (30)
calendar days after Tenant receives the Damage Estimate, terminating this Lease
as of the date of such fire or casualty.
Notwithstanding anything to the contrary contained in this Paragraph
26, if the initial Damage Estimate is more than ninety (90) days, and the date
on which Landlord reasonably anticipates the repairs of such damage will be
completed is during the last twelve (12) months of the Lease term, Landlord and
Tenant shall each have the option to terminate this Lease as of the date of such
damage by giving written notice to the other, in the case of Landlord together
with the Damage Estimate, or, in the case of Tenant, within thirty (30) days of
Tenant's receipt of the Damage Estimate.
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Notwithstanding anything to the contrary in this Paragraph 26, if
damage which would otherwise lead to a right to terminate this Lease results
from the willful misconduct of Landlord or Tenant, the party from whose
misconduct such damage results shall have no right to terminate this Lease.
If the fire or other casualty damages the Premises or the common areas
of the Real Property necessary for Tenant's use and occupancy of the Premises,
Tenant ceases to use any portion of the Premises as a result of such damage, and
the damage does not result from the negligence or willful misconduct of Tenant
or any other Tenant Parties, then during the period the Premises or portion
thereof are rendered unusable by such damage and repair, Tenant's Monthly Rent
and Additional Rent under Paragraphs 5 and 7 above shall be proportionately
reduced based upon the extent to which the damage and repair prevents Tenant
from conducting, and Tenant does not conduct, its business at the Premises.
Landlord shall not be obligated to repair or replace any of Tenant's movable
furniture, equipment, trade fixtures, and other personal property, nor any
Alterations installed in the Premises by Tenant, and no damage to any of the
foregoing shall entitle Tenant to any abatement, and Tenant shall, at Tenant's
sole cost and expense, repair and replace such items. All such repair and
replacement of Alterations shall be constructed in accordance with Paragraph 9
above regarding Alterations.
A total destruction of the Building shall automatically terminate this
Lease. In no event shall Tenant be entitled to any compensation or damages from
Landlord for loss of use of the whole or any part of the Premises or for any
inconvenience occasioned by any such destruction, rebuilding or restoration of
the Premises, the Building or access thereto, except for the rent abatement
expressly provided above. Tenant hereby waives California Civil Code Sections
1932(2) and 1933(4), providing for termination of hiring upon destruction of the
thing hired and Sections 1941 and 1942, providing for repairs to and of
premises.
27. EMINENT DOMAIN.
a. If all or any part of the Premises are taken by any public
or quasi-public authority under the power of eminent domain, or any agreement in
lieu thereof (a "taking"), this Lease shall terminate as to the portion of the
Premises taken effective as of the date of taking. If only a portion of the
Premises is taken, Landlord or Tenant may terminate this Lease as to the
remainder of the Premises upon written notice to the other party within ninety
(90) days after the taking; provided, however, that Tenant's right to terminate
this Lease is conditioned upon the remaining portion of the Premises being of
such size or configuration that such remaining portion of the Premises is
unusable or uneconomical for Tenant's business. Landlord shall be entitled to
all compensation, damages, income, rent awards and interest thereon whatsoever
which may be paid or made in connection with any taking and Tenant shall have no
claim against Landlord or any governmental authority for the value of any
unexpired term of this Lease or of any of the improvements or Alterations in the
Premises; provided, however, that the foregoing shall not prohibit Tenant from
prosecuting a separate claim against the taking authority for an amount
separately designated for Tenant's relocation expenses or the interruption of or
damage to Tenant's business or as compensation for Tenant's personal property,
trade fixtures, Alterations or other improvements paid for by Tenant so long as
any award to Tenant will not reduce the award to Landlord.
In the event of a partial taking of the Premises which does not result
in a termination of this Lease, the Monthly Rent and Additional Rent under
Paragraphs 5 and 7 hereunder shall be equitably reduced. If all or any part of
the Real Property other than the Premises is taken, Landlord may terminate this
Lease upon written notice to Tenant given within ninety (90) days after the date
of taking; provided, however, that Landlord shall not terminate this Lease as a
result of such taking, unless it also exercises any comparable rights to
terminate the leases of all tenants in the Building that are similarly affected
by the taking (as determined by Landlord in its reasonable judgment).
b. Notwithstanding the foregoing, if all or any portion of the
Premises is taken for a period of time ending prior to the end of the term of
this Lease, this Lease shall remain in full force and effect and Tenant shall
continue to pay all rent and to perform all of its obligations under this Lease;
provided, however, that Tenant shall be entitled to all compensation, damages,
income, rent awards and interest thereon that is paid or made in connection with
such temporary taking of the Premises (or portion thereof), except that any such
compensation in excess of the rent or other amounts payable to Landlord
hereunder shall be promptly paid over to Landlord as received. Landlord and
Tenant each hereby waive the provisions of California Code of Civil Procedure
Section 1265.130 and any other applicable existing or future Legal Requirement
providing for, or allowing either party to petition the courts of the state in
which the Real Property is located for, a termination of this Lease upon a
partial taking of the Premises and/or the Building.
28. LANDLORD'S LIABILITY; SALE OF BUILDING. The term "Landlord," as
used in this Lease, shall mean only the owner or owners of the Real Property at
the time in question. Notwithstanding any other provision of this Lease, the
liability of Landlord for its obligations under this Lease is limited solely to
Landlord's interest in the Real Property as the same may from time to time be
encumbered, and no personal liability shall at any time be asserted or
enforceable against any other assets of Landlord or against the constituent
shareholders, partners or other owners of Landlord, or the directors, officers,
employees and agents of Landlord or such constituent shareholder, partner or
other owner, on account of any of Landlord's
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obligations or actions under this Lease. In addition, in the event of any
conveyance of title to the Real Property, then the grantor or transferor shall
be relieved of all liability with respect to Landlord's obligations to be
performed under this Lease after the date of such conveyance (other than
Landlord's obligation to return the security deposit, to the extent that the
grantor or transferor fails to transfer such security deposit to the grantee or
transferee). In no event shall Landlord be deemed to be in default under this
Lease unless Landlord fails to perform its obligations under this Lease, Tenant
delivers to Landlord written notice specifying the nature of Landlord's alleged
default, and Landlord fails to cure such default within thirty (30) days
following receipt of such notice (or, if the default cannot reasonably be cured
within such period, to commence action within such thirty (30)-day period and
proceed diligently thereafter to cure such default). Upon any conveyance of
title to the Real Property, the grantee or transferee shall be deemed to have
assumed Landlord's obligations to be performed under this Lease from and after
the date of such conveyance, subject to the limitations on liability set forth
above in this Paragraph 28. If Tenant provides Landlord with any security for
Tenant's performance of its obligations hereunder, and Landlord transfers such
security to the grantee or transferee of Landlord's interest in the Real
Property, Landlord shall be released from any further responsibility or
liability for such security. Notwithstanding any other provision of this Lease,
but not in limitation of the provisions of Paragraph 14.a. above, Landlord shall
not be liable for any consequential damages or interruption or loss of business,
income or profits, or claims of constructive eviction, nor shall Landlord be
liable for loss of or damage to artwork, currency, jewelry, bullion, unique or
valuable documents, securities or other valuables, or for other property not in
the nature of ordinary fixtures, furnishings and equipment used in general
administrative and executive office activities and functions. Wherever in this
Lease Tenant (a) releases Landlord from any claim or liability, (b) waives or
limits any right of Tenant to assert any claim against Landlord or to seek
recourse against any property of Landlord or (c) agrees to indemnify Landlord
against any matters, the relevant release, waiver, limitation or indemnity shall
run in favor of and apply to Landlord, the constituent shareholders, partners or
other owners of Landlord, and the directors, officers, employees and agents of
Landlord and each such constituent shareholder, partner or other owner.
29. ESTOPPEL CERTIFICATES. At any time and from time to time, upon
not less than ten (10) days' prior notice from Landlord, Tenant shall execute,
acknowledge and deliver to Landlord a statement certifying the commencement date
of this Lease, stating that this Lease is unmodified and in full force and
effect (or if there have been modifications, that this Lease is in full force
and effect as modified and the date and nature of each such modification), that
Landlord is not in default under this Lease (or, if Landlord is in default,
specifying the nature of such default), that Tenant is not in default under this
Lease (or if Tenant is in default, specifying the nature of such default), the
current amounts of and the dates to which the Monthly Rent and Additional Rent
has been paid, and setting forth such other matters as may be reasonably
requested by Landlord. Any such statement may be conclusively relied upon by a
prospective purchaser of the Real Property or by a lender obtaining a lien on
the Real Property as security. If Tenant fails to deliver such statement within
the time required hereunder, such failure 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) to the best of Tenant's knowledge, there are no
uncured defaults in Landlord's performance of its obligations hereunder, (iii)
not more than one month's installment of Monthly Rent has been paid in advance,
and (iv) any other statements of fact included by Landlord in such statement are
correct. Tenant acknowledges and agrees that if Tenant fails to execute any such
certificate within the period described above, and thereafter Tenant does not
deliver such executed document within ten (10) days of written notice from
Landlord of such failure, such failure may cause Landlord serious financial
damage by causing the failure of a sale or financing transaction and giving
Landlord all of its rights and remedies under Paragraph 25 above, including its
right to damages caused by the loss of such sale or financing , but only to the
extent any such loss is attributable solely or primarily to Tenant's failure to
deliver any such certificate.
30. RIGHT OF LANDLORD TO PERFORM. If Tenant fails to make any payment
required hereunder (other than Monthly Rent and Additional Rent) or fails to
perform any other of its obligations hereunder, Landlord may, but shall not be
obliged to, and without waiving any default of Tenant or releasing Tenant from
any obligations to Landlord hereunder, make any such payment or perform any
other such obligation on Tenant's behalf. All sums so paid by Landlord and all
necessary incidental costs in connection with the performance by Landlord of an
obligation of Tenant (together with interest thereon from the date of such
payment by Landlord until paid at the Interest Rate) shall be payable by Tenant
to Landlord upon demand, and Tenant's failure to make such payment upon demand
shall entitle Landlord to the same rights and remedies provided Landlord in the
event of non-payment of rent.
31. LATE CHARGE. Tenant acknowledges that late payment of any
installment of Monthly Rent or Additional Rent or any other amount required
under this Lease will cause Landlord to incur costs not contemplated by this
Lease and that the exact amount of such costs would be extremely difficult and
impracticable to fix. Such costs include, without limitation, processing and
accounting charges, late charges that may be imposed on Landlord by the terms of
any encumbrance or note secured by the Real Property and the loss of the use of
the delinquent funds. Therefore, if any installment of Monthly Rent or
Additional Rent or any other amount due from Tenant is not received when due,
Tenant shall pay to Landlord on demand, on account of the delinquent payment, an
additional sum equal to the greater of (i) five percent (5%) of the overdue
amount, or (ii) $100.00, which additional sum represents a fair and reasonable
estimate of the costs that Landlord will incur by reason of late payment by
Tenant (provided that such charge shall be imposed
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with respect to the first occurrence of such a delinquency in any twelve
(12)-month period only if Tenant fails to cure such delinquency within five (5)
days of written notice from Landlord thereof). Acceptance of any late charge
shall not constitute a waiver of Tenant's default with respect to the overdue
amount, nor prevent Landlord from exercising its right to collect interest as
provided above, rent, or any other damages, or from exercising any of the other
rights and remedies available to Landlord.
32. ATTORNEYS' FEES; WAIVER OF JURY TRIAL. In the event of any action
or proceeding between Landlord and Tenant (including an action or proceeding
between Landlord and the trustee or debtor in possession while Tenant is a
debtor in a proceeding under any bankruptcy law) to enforce any provision of
this Lease, the losing party shall pay to the prevailing party all costs and
expenses, including, without limitation, reasonable attorneys' fees and
expenses, incurred in such action and in any appeal in connection therewith by
such prevailing party. The "prevailing party" will be determined by the court
before whom the action was brought based upon an assessment of which party's
major arguments or positions taken in the suit or proceeding could fairly be
said to have prevailed over the other party's major arguments or positions on
major disputed issues in the court's decision. Notwithstanding the foregoing,
however, Landlord shall be deemed the prevailing party in any unlawful detainer
or other action or proceeding instituted by Landlord based upon any default or
alleged default of Tenant hereunder if (i) judgment is entered in favor of
Landlord, or (ii) prior to trial or judgment Tenant pays all or any portion of
the rent claimed by Landlord, vacates the Premises, or otherwise cures the
default claimed by Landlord.
If Landlord becomes involved in any litigation or dispute, threatened
or actual, by or against anyone not a party to this Lease, but arising by reason
of or related to any act or omission of Tenant or any Tenant Party, Tenant
agrees to pay Landlord's reasonable attorneys' fees and other costs incurred in
connection with the litigation or dispute, regardless of whether a lawsuit is
actually filed.
IF ANY ACTION OR PROCEEDING BETWEEN LANDLORD AND TENANT TO ENFORCE THE
PROVISIONS OF THIS LEASE (INCLUDING AN ACTION OR PROCEEDING BETWEEN LANDLORD AND
THE TRUSTEE OR DEBTOR IN POSSESSION WHILE TENANT IS A DEBTOR IN A PROCEEDING
UNDER ANY BANKRUPTCY LAW) PROCEEDS TO TRIAL, LANDLORD AND TENANT HEREBY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY IN SUCH TRIAL. Landlord and Tenant agree that
this paragraph constitutes a written consent to waiver of trial by jury within
the meaning of California Code of Civil Procedure Section 631(a)(2), and Tenant
does hereby authorize and empower Landlord to file this paragraph and/or this
Lease, as required, with the clerk or judge of any court of competent
jurisdiction as a written consent to waiver of jury trial.
33. WAIVER. No provisions of this Lease shall be deemed waived by
Landlord unless such waiver is in a writing signed by Landlord. The waiver by
Landlord of any breach of any provision of this Lease shall not be deemed a
waiver of any subsequent breach of the same or any other provision of this
Lease. No delay or omission in the exercise of any right or remedy of Landlord
upon any default by Tenant shall impair such right or remedy or be construed as
a waiver. Landlord's acceptance of any payments of rent due under this Lease
shall not be deemed a waiver of any default by Tenant under this Lease
(including Tenant's recurrent failure to timely pay rent) other than Tenant's
nonpayment of the accepted sums, and no endorsement or statement on any check or
accompanying any check or payment shall be deemed an accord and satisfaction.
Landlord's consent to or approval of any act by Tenant requiring Landlord's
consent or approval shall not be deemed to waive or render unnecessary
Landlord's consent to or approval of any subsequent act by Tenant.
34. NOTICES. All notices and demands which may or are required to be
given by either party to the other hereunder shall be in writing. All notices
and demands by Landlord to Tenant shall be delivered personally or sent by
United States mail, postage prepaid, or by any reputable overnight or same-day
courier, addressed to Tenant at the Premises, or to such other place as Tenant
may from time to time designate by notice to Landlord hereunder. All notices and
demands by Tenant to Landlord shall be sent by United States mail, postage
prepaid, or by any reputable overnight or same-day courier, addressed to
Landlord in care of Shorenstein Company, L.P., 555 California Street, 49th
floor, San Francisco, California 94104, or to such other place as Landlord may
from time to time designate by notice to Tenant hereunder. Notices delivered
personally or sent same-day courier will be effective immediately upon delivery
to the addressee at the designated address; notices sent by overnight courier
will be effective one (1) Business Day after acceptance by the service for
delivery; notices sent by mail will be effective two (2) Business Days after
mailing. In the event Tenant requests multiple notices hereunder, Tenant will be
bound by such notice from the earlier of the effective times of the multiple
notices.
35. NOTICE OF SURRENDER. At least ninety (90) days before the last
day of the term hereof, Tenant shall give to Landlord a written notice of
intention to surrender the Premises on that date, but neither this paragraph nor
any failure by Landlord to protest the lack of such notice by Tenant shall be
construed as an extension of the term or as a consent by Landlord to any holding
over by Tenant.
36. DEFINED TERMS AND MARGINAL HEADINGS. When required by the
context of this Lease, the singular includes the plural. If more than one person
or entity signs this Lease as Tenant, the obligations hereunder imposed upon
Tenant shall be joint and several, and the act of, written notice to or from,
refund
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to, or signature of, any Tenant signatory to this Lease (including without
limitation modifications of this Lease made by fewer than all such Tenant
signatories) shall bind every other Tenant signatory as though every other
Tenant signatory had so acted, or received or given the written notice or
refund, or signed. The headings and titles to the paragraphs of this Lease are
for convenience only and are not to be used to interpret or construe this Lease.
Wherever the term "including" or "includes" is used in this Lease it shall be
construed as if followed by the phrase "without limitation." The language in all
parts of this Lease shall in all cases be construed as a whole and in accordance
with its fair meaning and not construed for or against any party simply because
one party was the drafter thereof.
37. TIME AND APPLICABLE LAW. Time is of the essence of this Lease and
of each and all of its provisions, except as to the conditions relating to the
delivery of possession of the Premises to Tenant. This Lease shall be governed
by and construed in accordance with the laws of the State of California, and the
venue of any action or proceeding under this Lease shall be the City and County
of San Francisco, California.
38. SUCCESSORS. Subject to the provisions of Paragraphs 13 and 28
above, the covenants and conditions hereof shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, personal
representatives, successors, executors, administrators and assigns.
39. ENTIRE AGREEMENT; Modifications. This Lease (including any
exhibit, rider or attachment hereto) constitutes the entire agreement between
Landlord and Tenant with respect to Tenant's lease of the Premises. No provision
of this Lease may be amended or otherwise modified except by an agreement in
writing signed by the parties hereto. Neither Landlord nor Landlord's agents
have made any representations or warranties with respect to the Premises, the
Building, the Real Property or this Lease except as expressly set forth herein,
including without limitation any representations or warranties as to the
suitability or fitness of the Premises for the conduct of Tenant's business or
for any other purpose, nor has Landlord or its agents agreed to undertake any
alterations or construct any improvements to the Premises except those, if any,
expressly provided in this Lease, and no rights, easements or licenses shall be
acquired by Tenant by implication or otherwise unless expressly set forth
herein. Neither this Lease nor any memorandum hereof shall be recorded by
Tenant.
40. LIGHT AND AIR. Tenant agrees that no diminution of light, air or
view by any structure which may hereafter be erected (whether or not by
Landlord) shall entitle Tenant to any reduction of rent hereunder, result in any
liability of Landlord to Tenant, or in any other way affect this Lease.
41. NAME OF BUILDING. Tenant shall not use the name of the Building
for any purpose other than as the address of the business conducted by Tenant in
the Premises without the written consent of Landlord. Landlord reserves the
right to change the name of the Building at any time in its sole discretion by
written notice to Tenant and Landlord shall not be liable to Tenant for any
loss, cost or expense on account of any such change of name.
42. SEVERABILITY. If any provision of this Lease or the application
thereof to any person or circumstance shall be invalid or unenforceable to any
extent, the remainder of this Lease and the application of such provisions to
other persons or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by law.
43. AUTHORITY. If Tenant is a corporation, partnership, trust,
association or other entity, Tenant and each person executing this Lease on
behalf of Tenant, hereby covenants and warrants that (a) Tenant is duly
incorporated or otherwise established or formed and validly existing under the
laws of its state of incorporation, establishment or formation, (b) Tenant has
and is duly qualified to do business in the state in which the Real Property is
located, (c) Tenant has full corporate, partnership, trust, association or other
appropriate power and authority to enter into this Lease and to perform all
Tenant's obligations hereunder, and (d) each person (and all of the persons if
more than one signs) signing this Lease on behalf of Tenant is duly and validly
authorized to do so.
44. NO OFFER. Submission of this instrument for examination and
signature by Tenant does not constitute an offer to lease or a reservation of or
option for lease, and is not effective as a lease or otherwise until execution
and delivery by both Landlord and Tenant.
45. REAL ESTATE BROKERS. Landlord and Tenant each represents and
warrants to the other that such party has negotiated this Lease directly with
the Real Estate Brokers identified in Paragraph 2 and has not authorized or
employed, or acted by implication to authorize or to employ, any other real
estate broker or salesman to act for such party in connection with this Lease.
Each party shall hold the other harmless from and indemnify and defend the other
against any and all claims by any real estate broker or salesman other than the
Real Estate Brokers identified in Paragraph 2 for a commission, finder's fee or
other compensation as a result of the inaccuracy of such party's representation
above.
46. CONSENTS AND APPROVALS. Wherever the consent, approval, judgment
or determination of Landlord is required or permitted under this Lease, Landlord
may exercise its sole discretion in granting
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or withholding such consent or approval or in making such judgment or
determination without reference to any extrinsic standard of reasonableness,
unless the provision providing for such consent, approval, judgment or
determination specifies that Landlord's consent or approval is not to be
unreasonably withheld, or that the standard for such consent, approval, judgment
or determination is to be reasonable, or otherwise specifies the standards under
which Landlord may withhold its consent. Whenever Tenant requests Landlord to
take any action or give any consent or approval, Tenant shall reimburse Landlord
for all of Landlord's costs incurred in reviewing the proposed action or consent
(whether or not Landlord consents to any such proposed action), including
without limitation reasonable attorneys' or consultants' fees and expenses,
within ten (10) days after Landlord's delivery to Tenant of a statement of such
costs. If it is determined that Landlord failed to give its consent or approval
where it was required to do so under this Lease, Tenant's sole remedy will be an
order of specific performance or mandatory injunction of the Landlord's
agreement to give its consent or approval. The review and/or approval by
Landlord of any item shall not impose upon Landlord any liability for accuracy
or sufficiency of any such item or the quality or suitability of such item for
its intended use. Any such review or approval is for the sole purpose of
protecting Landlord's interest in the Real Property, and neither Tenant nor any
Tenant Party nor any person or entity claiming by, through or under Tenant, nor
any other third party shall have any rights hereunder by virtue of such review
and/or approval by Landlord.
47. RESERVED RIGHTS. Landlord retains and shall have the rights set
forth below, exercisable without notice and without liability to Tenant for
damage or injury to property, person or business and without effecting an
eviction, constructive or actual, or disturbance of Tenant's use or possession
of the Premises or giving rise to any claim for rent abatement:
(a) To grant to anyone the exclusive right to conduct any business or
render any service in or to the Building and its tenants, provided
that such exclusive right shall not operate to require Tenant to use
or patronize such business or service or to exclude Tenant from its
use of the Premises expressly permitted herein.
(b) To perform, or cause or permit to be performed, at any time and from
time to time, including during Business Hours, construction in the
common areas and facilities or other leased areas in the Real
Property.
(c) To reduce, increase, enclose or otherwise change at any time and from
time to time the size, number, location, lay-out and nature of the
common areas and facilities and other tenancies and premises in the
Real Property and to create additional rentable areas through use or
enclosure of common areas; provided that such changes shall not
obstruct Tenant's access to the Premises.
48. FINANCIAL STATEMENTS. Upon submission of this Lease to Landlord
and at any time thereafter within thirty (30) days after Landlord's request
therefor, Tenant shall furnish to Landlord copies of true and accurate financial
statements reflecting Tenant's then current financial situation (including
without limitation balance sheets, statements of profit and loss, and changes in
financial condition), Tenant's most recent audited or certified annual financial
statements, and Tenant's federal income tax returns pertaining to Tenant's
business, and in addition shall cause to be furnished to Landlord similar
financial statements and tax returns for any guarantor(s) of this Lease. Tenant
agrees to deliver to any lender, prospective lender, purchaser or prospective
purchaser designated by Landlord such financial statements of Tenant as may be
reasonably requested by such lender or purchaser.
49. SIGNAGE; DIRECTORIES. Landlord shall provide, at Landlord's
expense, a Building-standard plaque identifying Tenant's business at the
entrance to Tenant's Premises on each floor. For any floor on which Tenant
occupies all the rentable space, if Tenant desires to have the sign at the entry
to the Premises be other than Building standard, Tenant may, at Tenant's
expense, install a sign identifying Tenant's business at the entrance to the
Premises on such floor, provided that the design, size, color and location of
the signs shall be subject to Landlord's prior reasonable approval. Tenant shall
be entitled, at no cost to Tenant, to have the name of Tenant's company listed
on the Building directory situated in the lobby of the Building. If, after
Tenant's name is initially listed on the directories, Tenant requests a change
in Tenant's name as printed thereon, Tenant shall reimburse Landlord for
Landlord's cost of reprinting Tenant's name for the directories.
50. NONDISCLOSURE OF LEASE TERMS. Tenant agrees that the terms of
this Lease are confidential and constitute proprietary information of Landlord,
and that disclosure of the terms hereof could adversely affect the ability of
Landlord to negotiate with other tenants. Tenant hereby agrees that Tenant and
its partners, officers, directors, employees, agents, real estate brokers and
sales persons and attorneys shall not disclose the terms of this Lease to any
other person without Landlord's prior written consent, except to any accountants
of Tenant in connection with the preparation of Tenant's financial statements or
tax returns, to an assignee of this Lease or sublessee of the Premises, or to an
entity or person to whom disclosure is required by applicable law or in
connection with any action brought to enforce this Lease.
51. HAZARDOUS SUBSTANCE DISCLOSURE. California law requires
landlords to disclose to tenants the existence of certain hazardous
substances. Accordingly, the existence of gasoline and other automotive
fluids, maintenance fluids, copying fluids and other office supplies and
equipment, certain construction and
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finish materials, tobacco smoke, cosmetics and other personal items, and
asbestos-containing materials ("ACM") must be disclosed. Gasoline and other
automotive fluids are found in the garage area of the Building. Cleaning,
lubricating and hydraulic fluids used in the operation and maintenance of the
Building are found in the utility areas of the Building not generally accessible
to Building occupants or the public. Many Building occupants use copy machines
and printers with associated fluids and toners, and pens, markers, inks, and
office equipment that may contain hazardous substances. Certain adhesives,
paints and other construction materials and finishes used in portions of the
Building may contain hazardous substances. Although smoking is prohibited in the
public areas of the Building, these areas may, from time to time, be exposed to
tobacco smoke. Building occupants and other persons entering the Building from
time-to-time may use or carry prescription and non-prescription drugs, perfumes,
cosmetics and other toiletries, and foods and beverages, some of which may
contain hazardous substances.
52. PARKING.
a. Commencing upon the Commencement Date, Landlord shall
provide Tenant, on an unassigned, non-exclusive and unlabelled basis, thirty
(30) parking spaces in the garage of the Building (the "Building Spaces") and
Tenant shall pay Landlord or the operator of the garage, as directed by
Landlord, for such parking at the rate or charge in effect from time to time for
parking in the garage.
In addition, commencing on the Commencement Date, Landlord shall make
available to Tenant's employees, on a month-to month basis, thirty (30)
additional parking spaces, on an unassigned, non-exclusive and unlabelled basis,
in the parking facility currently known as the City Center Garage, located at
525 14th Street, Oakland (the "City Center Garage Spaces"), and Tenant's
employees shall pay Landlord or the operator of the subject garage, as directed
by Landlord, for such parking at the rate or charge in effect from time to time
for parking in the garage. Landlord or Tenant may terminate Tenant's right to
all or any portion of such month-to-month parking spaces by giving thirty (30)
days' notice of such termination to the other.
Tenant acknowledges that the monthly and hourly rates or charges in
effect may vary from time to time based on, among other things, the time of day,
type of parking (e.g., valet, self-park, or tandem) and general rate increases.
b. Tenant shall provide Landlord with advance written notice of
the names of each individual to whom Tenant from time to time distributes
Tenant's parking rights hereunder, and shall cause each such individual to
execute Landlord's standard waiver form for garage users. If the parking charge
with respect to any space is not paid when due, and such failure continues for
ten (10) days after written notice to Tenant of such failure, then in addition
to any other remedies afforded Landlord under this Lease by reason of nonpayment
of rent, Landlord may terminate Tenant's rights under this Paragraph 52 with
respect to such space. Further, if at any time Tenant releases to Landlord any
parking space provided for in this Paragraph 52, then Tenant's right under this
Paragraph 52 to use such released parking space shall automatically terminate.
c. The parking spaces to be made available to Tenant hereunder
may contain a reasonable mix of spaces for compact cars. Landlord shall take
reasonable actions to ensure the availability of the parking spaces leased by
Tenant, but Landlord does not guarantee the availability of those spaces at all
times against the actions of other tenants of the Building and users of the
parking facility. Without limiting the foregoing, in no event shall this Lease
be void or voidable, nor shall Landlord be liable to Tenant for any loss or
damage, nor shall there be any abatement of rent hereunder (other than the
parking charge paid hereunder for any parking space no longer made available),
by reason of any reduction in Tenant's parking rights hereunder by reason of
strikes, lock-outs, labor disputes, shortages of material or labor, fire, flood
or other casualty, acts of God or any other cause beyond the control of
Landlord. Access to the parking spaces to be made available to Tenant shall, at
Landlord's option, be by card, pass, bumper sticker, decal or other appropriate
identification issued by Landlord, and Tenant's right to use the parking
facility is conditioned on Tenant's abiding by and shall otherwise be subject to
such rules and regulations as may be promulgated by Landlord from time to time
for the parking facility.
d. The parking rights set forth in this Paragraph 52 are
non-transferrable, are personal to the Tenant originally named herein, and shall
not inure to the benefit of any successor, assignee or subtenant of Tenant. In
the event of any assignment or sublease of parking space rights which is
approved by Landlord (provided, however, that such approval may be granted or
withheld by Landlord in its sole and absolute discretion), Landlord shall be
entitled to receive one hundred percent (100%) of any profit received by Tenant
in connection with such assignment or sublease.
53. OPTION TO RENEW.
a. OPTION TO RENEW. Provided that Tenant has not theretofore
exercised its termination option under Paragraph 56 below, Tenant shall have the
option to renew this Lease for one (1) additional term of five (5) years,
commencing upon the expiration of the initial term of the Lease. The renewal
option must be exercised, if at all, by written notice given by Tenant to
Landlord not later than twelve (12) months
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prior to expiration of the initial term of this Lease. Notwithstanding the
foregoing, at Landlord's election this renewal option shall be null and void and
Tenant shall have no right to renew this Lease if (i) as of the date immediately
preceding the commencement of the renewal period Tenant is not in occupancy of
at least seventy percent (70%) of the entire Premises then demised hereunder or
Tenant does not intend to continue to occupy the Premises (but intends to assign
this Lease or sublet the space in whole or in part), or (ii) on the date Tenant
exercises the option or on the date immediately preceding the commencement date
of the renewal period Tenant is in default of any of its material obligations
under this Lease beyond any applicable cure period.
b. TERMS AND CONDITIONS. If Tenant exercises the renewal
option, then during the renewal period all of the terms and conditions set forth
in this Lease as applicable to the Premises during the initial term shall apply
during the renewal term, except that (i) Tenant shall have no further right to
renew this Lease, (ii) Tenant shall take the Premises in their then "as-is"
state and condition, and (iii) the Monthly Rent payable by Tenant for the
Premises shall be the then-fair market rent for the Premises based upon the
terms of this Lease, as renewed. Fair market rent shall include the periodic
rental increases, if any, that would be included for space leased for the period
the space will be covered by the Lease. For purposes of this Paragraph 53, the
term "fair market rent" shall mean the rental rate for comparable space under
primary lease (and not sublease) to new tenants, taking into consideration the
unique quality and prestige of the Building and such amenities as existing
improvements, view, floor on which the Premises are situated and the like,
situated in first-class, reputable, established high-rise office buildings in
comparable locations in City Center, in comparable physical and economic
condition, taking into consideration the then-prevailing ordinary rental market
practices with respect to tenant concessions (if any) (e.g. not offering
extraordinary rental, promotional deals and other concessions to tenants which
deviate from what is the then-prevailing ordinary practice in an effort to
alleviate cash flow problems, difficulties in meeting loan obligations or other
financial distress, or in response to a greater than average vacancy rate). The
fair market rent shall be mutually agreed upon by Landlord and Tenant in writing
within the thirty (30) calendar day period commencing six (6) months prior to
commencement of the renewal period. If Landlord and Tenant are unable to agree
upon the fair market monthly rent within such thirty (30)-day period, then the
fair market rent shall be established by appraisal in accordance with the
procedures set forth in Exhibit D attached hereto.
c. MINIMUM RENTAL. Notwithstanding anything in the foregoing or
EXHIBIT D attached hereto to the contrary, in no event shall the Monthly Rent
during the renewal period be less than the aggregate of the amounts of Monthly
Rent and Additional Rent payable by Tenant (for all of the Premises leased
hereunder) under Paragraphs 2.c., 5 and 7 hereof for the calendar month
immediately preceding the commencement of the renewal period.
54. RIGHTS OF FIRST OFFER ON 19 TH AND 21 ST FLOORS.
a. FIRST OFFER SPACES; FIRST OFFER RIGHT; AVAILABLE SPACE.
Tenant shall have a one-time right of first offer to lease (i) the increment of
space located on the nineteenth (19th) floor of the Building and outlined on
EXHIBIT E attached hereto and labeled "First Offer Space A", and/or (ii) the
increment of space located on the twenty-first (21 st ) floor of the Building
and outlined on EXHIBIT F attached hereto and labeled "First Offer Space B."
First Offer Space A and First Offer Space B are sometimes referred to herein
collectively as the "First Offer Spaces" and individually as a "First Offer
Space". Tenant's one-time right of first offer with respect to either First
Offer Space shall arise on the first occasion, if any, that such First Offer
Space becomes "available for lease" during the period commencing on the date
hereof and ending on the last day of the Third Lease Year, subject to the
provisions of this Paragraph 54. First Offer Space shall not be deemed
"available for lease" if the tenant under an expiring lease of such space
desires to renew or extend its lease or if any tenant of the Building exercises
an option or right of first offer to lease such First Offer Space, which option
or right of first offer was granted prior to the date of this Lease. Upon the
applicable First Offer Space becoming available for lease, Landlord shall notify
Tenant in writing of such availability prior to marketing such First Offer Space
to other existing or prospective tenants, which notice shall mention the actual
or estimated availability date of such First Offer Space. For a period of five
(5) Business Days after receipt of such notice, Tenant shall have a one-time
right to elect to lease the First Offer Space that was the subject of such
notice. If Tenant does not elect to lease such First Offer Space within such
period, Landlord shall have the right to lease such First Offer Space to any
third party for a term and on such other conditions as Landlord may determine in
Landlord's sole discretion and all rights of Tenant under this Paragraph 54
shall thereafter cease with respect to such First Offer Space.
b. TERMS AND CONDITIONS. Upon Tenant's election to lease
such First Offer Space, Landlord and Tenant shall promptly enter into an
amendment of this Lease, adding such First Offer Space to the Premises on all
the terms and conditions set forth in this Lease as to the Premises originally
demised under this Lease, except that (i) the term of the lease to Tenant of
such First Offer Space shall commence upon the date on which the First Offer
Space is delivered to Tenant and shall continue coextensively with the remaining
term hereof and any extension thereof, (ii) the Monthly Rent payable by Tenant
under Paragraph 5 of this Lease for the First Offer Space shall be the Fair
Market Rent for such space, as provided for below, (iii) Tenant's Share payable
under Paragraph 7 hereof with respect to the First Offer Space shall be
determined by dividing the rentable square footage of the First Offer Space by
the rentable square footage
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of the Building, and (iv) Tenant shall take the First Offer Space in its then
"as-is" condition, broom-clean and cleared of all personal property.
The Fair Market Rent for the First Offer Space shall be mutually
agreed upon by Landlord and Tenant in writing within the thirty (30)-day period
commencing with Landlord's notice to Tenant stating the commencement date for
the First Offer Space, but no sooner than six (6) months prior to the date the
First Offer Space is to be added to this Lease. If Landlord and Tenant are
unable to agree upon the Fair Market Rent within such thirty (30)-day period,
then the Fair Market Rent shall be established by appraisal in accordance with
the procedures set forth in EXHIBIT D. Notwithstanding anything in the foregoing
or EXHIBIT D to the contrary, in no event shall the Monthly Rent for any First
Offer Space be less than the amount produced by multiplying the rentable square
footage of the First Offer Space by the aggregate of the monthly rental rate per
rentable square foot payable by Tenant for all Premises then leased under this
Lease under Paragraphs 2, 5 and 7 above for the month immediately preceding the
date the First Offer Space is added to this Lease.
If Tenant shall exercise the right of first offer granted herein,
Landlord does not guarantee that the First Offer Space will be available on the
stated availability date for the lease thereof, if the then existing occupants
of the First Offer Space shall hold-over, or for any other reason beyond
Landlord's reasonable control. In such event, rent with respect to the First
Offer Space shall be abated until Landlord legally delivers the same to Tenant,
as Tenant's sole recourse.
c. LIMITATION ON TENANT'S RIGHT OF FIRST OFFER. Notwithstanding the
foregoing, if (i) on the date of exercise of the right of first offer, or the
date immediately preceding the date the Lease term for the applicable First
Offer Space is to commence, Tenant is in default under this Lease beyond any
applicable cure period, or (ii) on the date immediately preceding the date the
Lease term for such First Offer Space is to commence Tenant named herein (A) is
not in occupancy of at least seventy percent (70%) of the entire Premises then
leased under this Lease and delivered to Tenant, or (B) does not intend to
occupy at least seventy percent (70%) of the entire Premises then leased under
this Lease, together with the entire First Offer Space, then Tenant shall have
no right to lease such First Offer Space and the exercise of the right of first
offer shall be null and void.
THIS LEASE IS EXECUTED by Landlord and Tenant as of the date set forth
at the top of page 1 hereof.
OAKLAND CITY CENTER LLC, ASK JEEVES, INC.,
a Delaware limited liability company a Delaware corporation
By: Shorenstein Realty Investors Three, L.P.,
a California limited partnership,
Member
By: SRI Equity Associates, L.P.,
a California limited partnership,
General Partner
By: Shorenstein Company, L.P.,
a California limited partnership,
General Partner
By: Shorenstein Management, Inc.,
a California corporation,
General Partner
By: /s/ DOUGLAS W. SHORENSTEIN By: /s/ M. BRUCE NAKAO
-------------------------- ------------------------
Douglas W. Shorenstein Name: M. BRUCE NAKAO
President ------------------------
Title: CHIEF FINANCIAL OFFICER
------------------------
Landlord Tenant
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EXHIBIT B
RULES AND REGULATIONS
1111 BROADWAY
1. No sign, placard, picture, advertisement, name or notice shall be
inscribed, displayed or printed or affixed on or to any part of the outside or
inside of the Building or any part of the Premises visible from the exterior of
the Premises without the prior written consent of Landlord, which consent may be
withheld in Landlord's sole discretion. Landlord shall have the right to remove,
at Tenant's expense and without notice to Tenant, any such sign, placard,
picture, advertisement, name or notice that has not been approved by Landlord.
All approved signs or lettering on doors and walls shall be printed,
painted, affixed or inscribed at the expense of Tenant by a person approved of
by Landlord.
If Landlord notifies Tenant in writing that Landlord objects to any
curtains, blinds, shades or screens attached to or hung in or used in connection
with any window or door of the Premises, such use of such curtains, blinds,
shades or screens shall be removed immediately by Tenant. No awning shall be
permitted on any part of the Premises.
2. No ice, drinking water, towel, barbering or bootblacking, shoeshining
or repair services, or other similar services shall be provided to the Premises,
except from persons authorized by Landlord and at the hours and under
regulations fixed by Landlord.
3. The bulletin board or directory of the Building will be provided
exclusively for the display of the name and location of tenants only and
Landlord reserves the right to exclude any other names therefrom.
4. The sidewalks, halls, passages, exits, entrances, elevators and
stairways shall not be obstructed by any of the Tenant Parties or used by Tenant
for any purpose other than for ingress to and egress from its Premises. The
halls, passages, exits, entrances, elevators, stairways, balconies and roof are
not for the use of the general public and Landlord shall in all cases retain the
right to control and prevent access thereto by all persons whose presence in the
judgment of Landlord shall be prejudicial to the safety, character, reputation
and interests of the Building and its tenants. No tenant and no employees or
invitees of any tenant shall go upon the roof of the Building.
5. Tenant shall not alter any lock or install any new or additional locks
or any bolts on any interior or exterior door of the Premises without the prior
written consent of Landlord.
6. The toilet rooms, toilets, urinals, wash bowls and other apparatus
shall not be used for any purpose other than that for which they were
constructed and no foreign substance of any kind whatsoever shall be thrown
therein and the expense of any breakage, stoppage or damage resulting from the
violation of this rule shall be borne by the tenant who, or whose employees or
invitees, shall have caused it.
7. Tenant shall not overload the floor of the Premises or mark, drive
nails, screw or drill into the partitions, woodwork or plaster or in any way
deface the Premises or any part thereof.
8. No furniture, freight or equipment of any kind shall be brought into
the Building without the consent of Landlord and all moving of the same into or
out of the Building shall be done at such time and in such manner as Landlord
shall designate. Landlord shall have the right to prescribe the weight, size and
position of all safes and other heavy equipment brought into the Building and
also the times and manner of moving the same in and out of the Building. Safes
or other heavy objects shall, if considered necessary by Landlord, stand on a
platform of such thickness as is necessary to properly distribute the weight.
Landlord will not be responsible for loss of or damage to any such safe or
property from any cause, and all damage done to the Building by moving or
maintaining any such safe or other property shall be repaired at the expense of
Tenant. The elevator designated for freight by Landlord shall be available for
use by all tenants in the Building during the hours and pursuant to such
procedures as Landlord may determine from time to time. The persons employed to
move Tenant's equipment, material, furniture or other property in or out of the
Building must be acceptable to Landlord. The moving company must be a locally
recognized professional mover, whose primary business is the performing of
relocation services, and must be bonded and fully insured. In no event shall
Tenant employ any person or company whose presence may give rise to a labor or
other disturbance in the Project. A certificate or other verification of such
insurance must be received and approved by Landlord prior to the start of any
moving operations. Insurance must be sufficient in Landlord's sole opinion, to
cover all personal liability, theft or damage to the Project, including, but not
limited to, floor coverings, doors, walls, elevators, stairs, foliage and
landscaping. Special care must be taken to prevent damage to foliage and
landscaping during adverse weather. All moving operations shall be conducted at
such times and in such a manner as Landlord shall direct, and all moving shall
take place during non-business hours unless Landlord agrees in writing
otherwise.
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9. Tenant shall not employ any person or persons other than the janitor
of Landlord for the purpose of cleaning the Premises, unless otherwise agreed to
by Landlord. Except with the written consent of Landlord, no person or persons
other than those approved by Landlord shall be permitted to enter the Building
for the purpose of cleaning the Building or the Premises. Tenant shall not cause
any unnecessary labor by reason of Tenant's carelessness or indifference in the
preservation of good order and cleanliness.
10. Tenant shall not use, keep or permit to be used or kept any foul or
noxious gas or substance in the Premises, or permit or suffer the Premises to be
occupied or used in a manner offensive or objectionable to Landlord or other
occupants of the Building by reason of noise, odors and/or vibrations, or
interfere in any way with other tenants or those having business therein, nor
shall any animals or birds be brought in or kept in or about the Premises or the
Building. In no event shall Tenant keep, use, or permit to be used in the
Premises or the Building any guns, firearm, explosive devices or ammunition.
11. Except as permitted under Paragraph 23 below, no cooking shall be done
or permitted by Tenant in the Premises, nor shall the Premises be used for the
storage of merchandise, for washing clothes, for lodging, or for any improper,
objectionable or immoral purposes.
12. Tenant shall not use or keep in the Premises or the Building any
kerosene, gasoline, or inflammable or combustible fluid or material, or use any
method of heating or air conditioning other than that supplied by Landlord.
13. Landlord will direct electricians as to where and how telephone and
telegraph wires are to be introduced into the Premises and the Building. No
boring or cutting for wires will be allowed without the prior consent of
Landlord. The location of telephones, call boxes and other office equipment
affixed to the Premises shall be subject to the prior approval of Landlord.
14. Upon the expiration or earlier termination of the Lease, Tenant shall
deliver to Landlord the keys of offices, rooms and toilet rooms which have been
furnished by Landlord to Tenant and any copies of such keys which Tenant has
made. In the event Tenant has lost any keys furnished by Landlord, Tenant shall
pay Landlord for such keys.
15. Tenant shall not lay linoleum, tile, carpet or other similar floor
covering so that the same shall be affixed to the floor of the Premises, except
to the extent and in the manner approved in advance by Landlord. The expense of
repairing any damage resulting from a violation of this rule or removal of any
floor covering shall be borne by the tenant by whom, or by whose contractors,
employees or invitees, the damage shall have been caused.
16. No furniture, packages, supplies, equipment or merchandise will be
received in the Building or carried up or down in the elevators, except between
such hours and in such elevators as shall be designated by Landlord, which
elevator usage shall be subject to the Building's customary charge therefor as
established from time to time by Landlord.
17. On Saturdays, Sundays and legal holidays, and on other days between
the hours of 6:00 P.M. and 8:00 A.M., access to the Building, or to the halls,
corridors, elevators or stairways in the Building, or to the Premises may be
refused unless the person seeking access is known to the person or employee of
the Building in charge and has a pass or is properly identified. Landlord shall
in no case be liable for damages for any error with regard to the admission to
or exclusion from the Building of any person. In case of invasion, mob, riot,
public excitement, or other commotion, Landlord reserves the right to prevent
access to the Building during the continuance of the same by closing the doors
or otherwise, for the safety of the tenants and protection of property in the
Building.
18. Tenant shall be responsible for insuring that the doors of the
Premises are closed and securely locked before leaving the Building and must
observe strict care and caution that all water faucets or water apparatus are
entirely shut off before Tenant or Tenant's employees leave the Building, and
that all electricity, gas or air shall likewise be carefully shut off, so as to
prevent waste or damage, and for any default or carelessness Tenant shall make
good all injuries sustained by other tenants or occupants of the Building or
Landlord. Landlord shall not be responsible to Tenant for loss of property on
the Premises, however occurring, or for any damage to the property of Tenant
caused by the employees or independent contractors of Landlord or by any other
person.
19. Landlord reserves the right to exclude or expel from the Building any
person who, in the judgment of Landlord, is intoxicated or under the influence
of liquor or drugs, or who shall in any manner do any act in violation of any of
the rules and regulations of the Building.
20. The requirements of any tenant will be attended to only upon
application at the office of the Building. Employees of Landlord shall not
perform any work or do anything outside of their regular duties unless under
special instructions from Landlord, and no employee will admit any person
(tenant or otherwise) to any office without specific instructions from Landlord.
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21. No vending machine or machines of any description shall be installed,
maintained or operated upon the Premises without the prior written consent of
Landlord.
22. Subject to Tenant's right of access to the Premises in accordance with
Building security procedures, Landlord reserves the right to close and keep
locked all entrance and exit doors of the Building on Saturdays, Sundays and
legal holidays and on other days between the hours of 6:00 P.M. and 8:00 A.M.,
and during such further hours as Landlord may deem advisable for the adequate
protection of the Building and the property of its tenants.
23. Tenant may maintain and use microwave ovens, toaster ovens and
equipment for brewing coffee, tea, hot chocolate and similar beverages; provided
that Tenant shall (i) prevent the emission of any food or cooking odor from
leaving the Premises, (ii) be solely responsible for cleaning the areas where
such equipment is located and removing food-related waste from the Premises and
the Building, or shall pay Landlord's standard rate for such service as an
addition to cleaning services ordinarily provided, (iii) maintain and use such
areas solely for Tenant's employees and business invitees, not as public
facilities, and (iv) keep the Premises free of vermin and other pest infestation
and shall exterminate, as needed, in a manner and through contractors reasonably
approved by Landlord, preventing any emission of odors, due to extermination,
from leaving the Premises. Notwithstanding clause (ii) above, Landlord shall,
without special charge, empty and remove the contents of one (1) 15-gallon (or
smaller) waste container from the food preparation area so long as such
container is fully lined with, and the contents can be removed in, a waterproof
plastic liner or bag, supplied by Tenant, which will prevent any leakage of food
related waste or odors; provided, however, that if at any time Landlord must pay
a premium or special charge to Landlord's cleaning or scavenger contractors for
the handling of food-related or so-called "wet" refuse, Landlord's obligation to
provide such removal, without special charge, shall cease.
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EXHIBIT C
FORM OF LETTER OF CREDIT
[Date]
OAKLAND CITY CENTER LLC ["LANDLORD"]
c/o SHORENSTEIN COMPANY, L.P.
555 California Street, 49th Floor
San Francisco, CA 94104
Attn: Legal Department
IRREVOCABLE STANDBY LETTER OF CREDIT NO. __________
We hereby establish our Irrevocable Letter of Credit in your favor available by
your drafts drawn on [BANK], at sight, for any sum or sum(s) not exceeding
___________________ Dollars ($___________), for account of [TENANT] at [TENANT'S
ADDRESS]. Draft(s) must be accompanied by supporting documents as described
below:
A written statement to [BANK] stating that "The principal amount [or the
portion requested] of this Letter of Credit is due and payable in
accordance with the provisions of that certain [TITLE OF DOCUMENT] dated
______________________, between [LANDLORD] and [TENANT]."
The written statement shall be accompanied by this Letter of Credit for
surrender; provided, however, that if less than the balance of the Letter of
Credit is drawn, this Letter of Credit need not be surrendered and shall
continue in full force and effect with respect to the unused balance of this
Letter of Credit unless and until we issue to you a replacement Letter of Credit
for such unused balance, the terms of which replacement Letter of Credit shall
be identical to those set forth in this Letter of Credit. We are not required to
inquire as to the accuracy of the matters recited in the written statement or as
to the authority of the person signing the written statement and may take the
act of signing as conclusive evidence of such accuracy and his or her authority
to do so. The obligation of [BANK] under this Letter of Credit is the individual
obligation of [BANK], and is in no way contingent upon reimbursement with
respect thereto. Each draft must bear upon its face the clause "Drawn under
Letter of Credit No. _____________, dated _____________, of [BANK]."
This Letter of Credit shall be automatically extended for an additional period
of one year from the present or each future expiration date unless we have
notified you in writing delivered via U.S. registered mail, not less than sixty
(60) days before such expiration date, that we elect not to renew this Letter of
Credit. Upon your receipt of such notification, you may draw your sight draft on
us prior to the then applicable expiration date for the unused balance of the
Letter of Credit, which shall be accompanied by your signed written statement
that you received notification of our election not to extend. Except so far as
otherwise expressly stated herein, this Letter of Credit is subject to the
"Uniform Customs and Practices for Documentary Credits (1993 Revision),
International Chamber of Commerce - Publication No. 500." If this Letter of
Credit expires during an interruption of business as described in article 17 of
Publication 500, we hereby specifically agree to effect payment if this Letter
of Credit is drawn against within 30 days after the resumption of business.
We hereby agree with you that drafts drawn under and in compliance with the
terms of this Letter of Credit will be duly honored if presented to the
above-mentioned drawee at our offices at [ADDRESS IN SAN FRANCISCO BAY AREA] on
or before ___________ PM [__________] Time, or such later expiration date to
which this Letter of Credit is extended pursuant to the terms hereof.
If at any time Beneficiary or its authorized transferee is not in possession of
the original of this letter of credit (together with all amendments, if any)
because such original has been delivered to us as required hereunder for a draw
thereon or transfer thereof, our obligations as set forth in this letter of
credit shall continue in full force and effect as if Beneficiary or such
authorized transferee still held such original, and any previous delivery to us,
without return by us, of such original shall be deemed to have satisfied any
requirement that such original be delivered to us for a subsequent draw
hereunder or transfer hereof.
This Letter of Credit may be, without charge and without recourse, assigned to,
and shall inure to the benefit of, any successor in interest to [LANDLORD] under
the [TITLE OF DOCUMENT]. Transfer charges, if any, are for the account of the
applicant.
Sincerely,
[BANK]
<PAGE>
EXHIBIT D
APPRAISAL PROCEDURE
Within fifteen (15) days after the expiration of the thirty (30)-day
period set forth in Paragraph 53 of the Lease for the mutual agreement of
Landlord and Tenant as to the fair market monthly rental, each party hereto, at
its cost, shall engage a real estate appraiser to act on its behalf in
determining the fair market monthly rental. The appraisers each shall have at
least ten (10) years' experience with leases in first-class high-rise office
buildings in downtown Oakland and shall submit to Landlord and Tenant in advance
for Landlord's and Tenant's reasonable approval the appraisal methods to be
used. If a party does not appoint an appraiser within such fifteen (15)-day
period but an appraiser is appointed by the other respective party, the single
appraiser appointed shall be the sole appraiser and shall set the fair market
monthly rental. If the two appraisers are appointed by the parties as stated in
this paragraph, such appraisers shall meet promptly and attempt to set the fair
market monthly rental. If such appraisers are unable to agree within thirty (30)
days after appointment of the second appraiser, the appraisers shall elect a
third appraiser meeting the qualifications stated in this paragraph within ten
(10) days after the last date the two appraisers are given to set the fair
market monthly rental. Each of the parties hereto shall bear one-half (1/2) the
cost of appointing the third appraiser and of the third appraiser's fee. The
third appraiser shall be a person who has not previously acted in any capacity
for either party.
The third appraiser shall conduct his own investigation of the fair
market monthly rent, and shall be instructed not to advise either party of his
determination of the fair market monthly rent except as follows: When the third
appraiser has made his determination, he shall so advise Landlord and Tenant and
shall establish a date, at least five (5) days after the giving of notice by the
third appraiser to Landlord and Tenant, on which he shall disclose his
determination of the fair market monthly rent. Such meeting shall take place in
the third appraiser's office unless otherwise agreed by the parties. After
having initialed a paper on which his determination of fair market monthly rent
is set forth, the third appraiser shall place his determination of the fair
market monthly rent in a sealed envelope. Landlord's appraiser and Tenant's
appraiser shall each set forth their determination of fair market monthly rent
on a paper, initial the same and place them in sealed envelopes. Each of the
three envelopes shall be marked with the name of the party whose determination
is inside the envelope.
In the presence of the third appraiser, the determination of the fair
market monthly rent by Landlord's appraiser and Tenant's appraiser shall be
opened and examined. If the higher of the two determinations is 105% or less of
the amount set forth in the lower determination, the average of the two
determinations shall be the fair market monthly rent, the envelope containing
the determination of the fair market monthly rent by the third appraiser shall
be destroyed and the third appraiser shall be instructed not to disclose his
determination. If either party's envelope is blank, or does not set forth a
determination of fair market monthly rent, the determination of the other party
shall prevail and be treated as the fair market monthly rent. If the higher of
the two determinations is more than 105% of the amount of the lower
determination, the envelope containing the third appraiser's determination shall
be opened. If the value determined by the third appraiser is the average of the
values proposed by Landlord's appraiser and Tenant's appraiser, the third
appraiser's determination of fair market monthly rent shall be the fair market
monthly rent. If such is not the case, fair market monthly rent shall be the
rent proposed by either Landlord's appraiser or Tenant's appraiser which is
closest to the determination of fair market monthly rent by the third appraiser.