California-Berkeley-918 Parker Street Lease - Eat/Work Development LP and The Roda Group Venture Development Co. LLC
STANDARD COMMERCIAL OFFICE LEASE FOR EAT/WORK DEVELOPMENT
THIS COMMERCIAL OFFICE LEASE (the "Lease") is entered into as of 8/14/98 by
and between EAT/WORK DEVELOPMENT, LP, a California limited partnership
("Landlord") and The Roda Group Venture Development Co., L.L.C., a Delaware
limited liability company ("Tenant").
1. BASIC LEASE TERMS. Landlord leases to Tenant, and Tenant rents and hires
from Landlord, the Premises described in Section 1.1 below, for the rents
hereinafter reserved, for the term stated in Section 1.4 below, and upon and
subject to the terms, conditions (including limitations, restrictions, and
reservations), and covenants hereinafter provided. Each party hereby
expressly covenants and agrees to observe and perform all of the conditions
and covenants herein contained on its part to be observed and performed. The
parties agree that the following table (the "Table") sets forth in summary
form the basic terms of this Lease, as all of such terms as defined below:
<TABLE>
<CAPTION>
Period Suite # Square Footage Monthly Base Pro Rata Share Base Year
Rent (incl. CAM)
<S> <C> <C> <C> <C> <C>
October 15, 1998- A-14 4800 sq. ft. $7920 14.12% 1998
October 14, 2001
</TABLE>
In the event of any conflict between the terms contained in the Table and the
terms contained in subsequent sections of the Lease, the terms of the Table
shall control, subject to any adjustments specifically provided for in any
other provisions of the Lease.
1.1 PREMISES. The Premises leased to Tenant (the "Premises") is that portion
of the Building described in Section 1.2 below and commonly known as Suites
A-14, as shown on the floor plan annexed hereto as EXHIBIT B. The Premises
also include all fixtures and equipment which are attached thereto, except
items not deemed to be included therein and which are removable by Tenant as
provided in Section 18. Landlord and Tenant agree that the square footage of
the Premises, for all purposes under this Lease, are as specified in the
Table. Tenant acknowledges that it has had an opportunity to verify the
numbers stated in the Table relating to the measurements of the Premises
prior to the Commencement Date of this Lease.
1.2 BUILDING. The Premises are located in the building known by the street
address 918 Parker Street (the "Building") in the City of Berkeley, County of
Alameda, State of California. The Building is more particularly described
and depicted in EXHIBIT A which is attached hereto. Landlord and Tenant
agree that the square footage of the Building, for all purposes under this
Lease, is twenty thousand seven hundred (20,700). Tenant acknowledges that
it has had an opportunity to verify the measurement of the Building prior to
the Commencement Date of this Lease.
1.3 DEVELOPMENT. The Building is located in and forms part of the real
property commonly known as the Eat/Work Development, with a street address of
918 Parker Street, Berkeley, California (the "Development"), which comprises
three different buildings and constitutes a single parcel on the assessment
roll of the Alameda County Tax Assessor. For the purposes of this Lease, the
Development shall mean the Building and any common or public areas or
facilities, easements, corridors, lobbies, sidewalks, loading areas,
driveways, landscaped areas, skywalk, parking garages and lots, and any and
all other structures or facilities operated or maintained in connection with
or for the benefit of the Building, and all parcels or tracts of land on
which all or any portion of the Building or any of the other foregoing items
are located, and any fixtures, machinery, equipment, apparatus, Systems and
Equipment (as defined in Section 5.5 below), furniture, and other personal
property located, thereon or therein and used in connection therewith, whether
title is held by Landlord or its affiliates. Landlord and Tenant agree that
the square footage of the Development, for all purposes under this Lease, is
thirty four thousand (34,000). Tenant acknowledges that it has had an
opportunity to verify the measurement of the Development prior to the
Commencement Date of this Lease.
1.4 TERM. The term (the "Term") for which the Premises are hereby leased
shall commence on the "Commencement Date," which shall be October 15, 1998
or, if earlier, the day on which the Premises are ready for occupancy (as
defined in Section 5) and shall end on October 14, 2001 (the "Expiration
Date") or any earlier date upon which the Term may expire or be canceled or
terminated pursuant to any of the conditions or covenants of this Lease or
pursuant to law. Promptly following the Commencement Date the parties hereto
shall, if required by Landlord, enter into a supplementary agreement fixing
the dates of the Commencement Date and the Expiration Date in the form which
is attached hereto as EXHIBIT C and incorporated herein by reference.
1.4.1 DELAY IN POSSESSION. If Landlord is unable to deliver possession of
the Premises to Tenant at the commencement hereof, Landlord shall not be
liable for any damage caused thereby, nor shall this Lease be void or
voidable, but Tenant shall not be liable for any rent until possession is
delivered with all Work having been substantially completed pursuant to
Section 5.2 and EXHIBIT D hereof. Tenant may at its option terminate this
Lease if possession of the Premises with all work substantially completed
pursuant to
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Section 5.2 and Exhibit D hereof, is not delivered within one hundred twenty
(120) days of the Commencement Date.
1.5 TENANT PARKING. Tenant is entitled to nine (9) unreserved parking spaces
in the parking lot of Eat/Work Development. If it is necessary at any time
to reserve parking spaces or hire a guard to monitor parking, Landlord may,
at its option, do so and pass both reasonable administrative and direct labor
expenses for the guard or monitor to Tenant based on Tenant's Pro Rata Share
as defined in Section 1.
2 RENT. The "Rent" reserved under this Lease, for the Term thereof, shall
consist of the following:
a) "Base Rent" of seven thousand nine hundred twenty dollars
($7,920.00) per month, which shall be payable in advance on the first day of
each and every calendar month during the Term of this Lease, except that
Tenant shall pay the first month's Base Rent due under the Lease upon the
execution and delivery of this Lease by Tenant; and
b) "Additional Rent" consisting of any and all other sums of money
as shall become payable by Tenant to Landlord hereunder; and Landlord shall
have the same remedies for default in the payment of Additional Rent as for a
default in payment of Base Rent.
2.1 BASE RENT ADJUSTMENT. On each anniversary of the Commencement Date the
monthly Base Rent shall increase by two hundred eighty dollars ($280.00).
2.2 ADDITIONAL RENT. In addition to the Base Rent and all other payments
due under this Lease and the Work Letter Agreement, Tenant shall pay to
Landlord, in the manner set forth herein, as Additional Rent, the following
amounts (collectively the "Rental Adjustment"):
a) INCREASED INSURANCE. Tenant agrees to pay its Pro Rata Share of
that portion of all Casualty Insurance under Section 2.3e incurred or paid by
Landlord in connection with the ownership and operation of the Building
("insurance") during each Adjustment Period which exceeds the amount of Base
Operating Insurance subject to proration under Section 2.3.2 below. In the
event that Landlord obtains additional coverages or increases the rate of
coverage as of the commencement date of this Lease, Landlord agrees to adjust
Base Year coverage as if such coverage had been included in the Base Year.
Notwithstanding anything to the contrary herein, Landlord agrees that
"Increased Insurance" shall not include any surcharge or unusual rate
increase attributable to any non-office Tenant in the Building.
b) INCREASED TAXES. An amount equal to Tenant's Pro Rata Share of
that portion of Real Estate Taxes paid by Landlord during each Adjustment
Period which exceeds the amount of Base Real Estate Taxes, subject to proration
under Section 2.3.2 below. Notwithstanding anything to the contrary herein,
Tenant's obligation to pay its Pro Rata Share of any increase in Real Estate
Taxes which is attributable to a transfer or change in the ownership of the
Building (the "Increase") shall be limited as follows: if the transfer or
change in ownership occurs during the first year after the Commencement Date,
Tenant shall have no obligation to pay any portion of the Increase; if the
transfer or change in ownership occurs during the second year after the
Commencement Date, Tenant shall pay twenty percent (20%) of the Increase; if
the transfer or change in ownership occurs during the third year after the
Commencement Date, Tenant shall pay forty percent (40%) of the Increase; if
the transfer or change in ownership occurs during the fourth year after the
Commencement Date, and assuming Tenant has exercised its Extension Option,
Tenant shall pay sixty percent (60%) of the Increase; if the transfer or
change in ownership occurs during the fifth year after the Commencement Date,
and assuming Tenant has exercised its Extension Option, Tenant shall pay
eighty percent (80%) of the Increase; and if the transfer or change in
ownership occurs during the sixth year after the Commencement Date, and
assuming Tenant has exercised its Extension Option, Tenant shall pay one
hundred percent (100%) of the Increase.
2.3 DEFINITIONS. For the purposes of this Lease, the following definitions
shall apply:
a) BASE INSURANCE. "Base Insurance" means the total of insurance
paid by Landlord during calendar year 1998 for the Development (the "Base
Insurance Year").
b) BASE REAL ESTATE TAXES. "Base Real Estate Taxes" means the
total of Real Estate Taxes paid by Landlord during tax year 1998-1999 for the
Development (the "Base Tax Year").
c) TENANT'S PRO RATA SHARE. "Tenant's Pro Rata Share" shall mean
the percentage labeled as such in the Table in Section 1, derived as follows:
Tenant's Pro Rata Share is calculated by dividing the agreed area of the
Premises (numerator) by the agreed area of the Development (denominator) and
expressing the resulting quotient as a percentage. Tenant's Pro Rata Share
shall be adjusted during the Term in proportion to any adjustment in the area
of the Premises or Development in accordance with the formula stated herein.
d) ADJUSTMENT PERIOD. "Adjustment Period" means each calendar year
of which any portion occurs during the Term, excluding the Base Year and
beginning with the first calendar year immediately following the Base Year.
e) INSURANCE. "Insurance" means premiums for any insurance
policies as determined by Landlord in accordance with the reasonable practice
of prudent landlords in the vicinity of the Development (including public
liability, property damage, earthquake if commercially reasonable, and fire
and extended
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coverage insurance for the full replacement cost of the Building as required
by Landlord or its lenders for the Building).
f) REAL ESTATE TAXES. "Real Estate Taxes" means any and all ad
valorem real property taxes and any form of assessment, levy, charge, fee,
tax, or other imposition imposed by any authority, including any city,
county, state, or federal governmental agency, or any school, library,
lighting, transportation, housing, drainage, or other improvement or special
assessment district thereof, whether or not now customary or in the
contemplation of the parties hereto, and whether or not general, special,
ordinary, or extraordinary, which Landlord shall pay during any Adjustment
Period because of or in connection with the ownership, leasing, or operation
of the Building.
2.3.1 RECONCILIATION. On or before the first day of April of each year
after the first Adjustment Period (or as soon thereafter as is practical),
Landlord shall deliver to Tenant a statement (the "Statement") setting forth
the Rental Adjustment for the preceding year. Tenant shall pay Landlord the
amount of any rental adjustment within ten (10) days of the receipt of the
Statement. The obligation of Tenant to make payments required under this
Section 2.3.1 shall survive the expiration or earlier termination of the Term
of this Lease.
2.3.2 PRORATION OF RENTAL ADJUSTMENT. If the Term does not commence on
January 1 or does not end on December 31, Tenant's obligations to pay
estimated and actual amounts towards increased Insurance and/or Real Estate
Taxes for such first or final calendar year shall be prorated to reflect the
portion of such year(s) included in the Term. Such proration shall be made
by multiplying the total estimated or actual (as the case may be) increased
insurance and/or Real Estate Taxes, (as the case may be) for such calendar
year(s), as well as the base insurance amount and/or Base Real Estate Taxes,
(as the case may be), by a fraction, the numerator of which shall be the
number of days of the Term during such calendar year, and the denominator of
which shall be three hundred sixty-five (365).
2.4 PAYMENT OF RENT. Tenant shall pay the Base Rent and Additional Rent
promptly when due, without demand therefor and without any abatement,
deduction, or setoff whatsoever, except as may be expressly provided in this
Lease. Tenant shall pay the Rent to Landlord, in lawful money of the United
States of America, at Landlord's office at the Building or at such other
place, or to such agent and at such place, as Landlord may designate by
notice to Tenant. If the Commencement Date occurs on a day other than the
first day of a calendar month, the Base Rent for such calendar month shall be
prorated, and the balance of the first month's Base Rent theretofore paid
shall be credited against the next monthly installment of Base Rent. The
Base Rent for the last month of the lease term shall also be prorated.
2.5 LATE CHARGES. Tenant acknowledges that the late payment of any
monthly Rent will cause Landlord to lose the use of that money and incur costs
and expenses not contemplated under this Lease, including administrative and
collection costs and processing account expenses, the exact amount of which
it is difficult to ascertain. Therefore, if more than one such installment
within any 12-month period is not received by Landlord within five (5) days
from the date it is due, Tenant shall pay Landlord a late charge equal to
five percent (5%) of such installment. Landlord and Tenant agree that this
late charge represents a reasonable estimate of such costs and expenses and is
fair compensation to Landlord for the loss suffered from such nonpayment by
Tenant. In addition, any check returned by the bank for any reason will be
considered late and will be subject to all late charges plus a Twenty Dollar
($20.00) fee. After two such occasions in any twelve (12) month period,
Landlord will have the right to require payment by a cashier's check or money
order. Acceptance of any late charge shall not constitute a waiver of
Tenant's default with respect to such nonpayment by Tenant nor prevent
Landlord from exercising any other rights or remedies available to Landlord
under this Lease or at law.
3 SECURITY DEPOSIT. Tenant shall deposit with Landlord the amount of
fifteen thousand eight hundred forty dollars ($15,840.00)(the "Security
Deposit") upon Tenant's execution and submission of this Lease to be held,
applied and disposed of pursuant to the provisions of Section 1950.7 of the
California Civil Code. The Security Deposit shall serve as security for the
prompt, full, and faithful performance by Tenant of the terms and provisions
of this Lease. Landlord shall not be required to keep the Security Deposit
separate from Landlord's general funds or pay interest on the Security
Deposit. Notwithstanding the foregoing, Landlord shall return seven thousand
nine hundred twenty dollars ($7,920.00) to Tenant upon Tenant's payment of
second months Rent provided Tenant is not default of the Lease.
3.1 APPLICATION OF DEPOSIT. In the event that Tenant is in Default
hereunder and fails to cure within any applicable time permitted under this
Lease, or in the event that Tenant owes any amounts to Landlord upon the
expiration of this Lease, Landlord may use or apply the whole or any part of
the Security Deposit for the amount of Tenant's obligations hereunder. The
use or application of the Security Deposit or any portion thereof shall not
prevent Landlord from exercising any other right or remedy provided hereunder
or under any Law and shall not be construed as liquidated damages.
3.2 RESTORATION OF FULL DEPOSIT. In the event the Security Deposit is
reduced by such use or application, Tenant shall deposit with Landlord,
within ten (10) days after written notice, an amount sufficient to restore
the full amount of the Security Deposit.
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3.3 DISPOSITION OF SECURITY DEPOSIT. After the Expiration Date or any
earlier termination of the Lease, any remaining portion of the Security
Deposit shall be returned to Tenant in accordance with he provisions of
Section 1950.7 of the California Civil Code.
4 USE. The Premises are to be used for offices and related uses and
for no other purpose without prior written consent of Landlord.
4.1 PROHIBITED USES. Tenant shall not use any portion of the Premises
for purposes other than those specified herein, and no use shall be made or
permitted to be made upon the Premises, nor acts done, which will increase
the existing rate of insurance upon the property, or cause cancellation of
insurance polices covering said property. Tenant shall not conduct or permit
any sale by auction on the Premises. Tenant shall not use, release or store
or permit the usage, release, or storage of restricted materials or
substances by Department of Health Services, California Water Quality Control
Board, Environmental Protection Agency, or any other governmental agency or
entity, and Tenant shall comply with all environmental laws, regulations,
rules and requirements applicable to Tenant's activities in the Premises.
Tenant shall indemnify, defend and hold Landlord harmless from and against any
claims, judgments, demands, liabilities, costs and expenses (including
reasonable attorney's fees) arising from Tenant's breach of the above
covenants. Tenant shall not commit any waste upon the Premises or any
nuisance or act which may disturb the quiet enjoyment of any tenant in the
Building.
5 CONDITION OF PREMISES. Tenant shall accept the Premises (and the
Systems and Equipment serving the same) in an "as is" condition, except as
provided in paragraph 5.4, on the date the Term commences, and Landlord shall
have no obligation to improve, alter, remodel, or otherwise modify the
Premises prior to Tenant's occupancy, except as provided in the mutually
approved "Work Letter Agreement" attached hereto and made a part hereof as
EXHIBIT D.
5.1 LANDLORD'S PREPARATION. If the parties have entered into a separate
Work Letter Agreement concurrently with their execution of this Lease,
Landlord shall use reasonable diligence in completing and preparing the
Premises for Tenant's occupancy in the manner and subject to the terms,
conditions, and covenants set forth in the Work Letter Agreement. The
facilities, materials, furnishings and work to be furnished, installed, and
performed in the Premises by Landlord pursuant to the Work Letter Agreement
are referred to as the "Work." Such other installations, materials, and work
which may be undertaken by or for the account of Tenant to prepare, equip,
decorate, and furnish the Premises for Tenant's occupancy are referred to as
the "Tenant's Work."
5.1.1 POSSESSION DURING WORK. It is the intention of the parties that
Tenant shall be in possession and occupancy of the Premises during the period
that Landlord is performing work in the Development. Landlord shall have no
liability to Tenant nor shall Tenant's obligations under this Lease be
reduced or abated in any manner whatsoever by reason of any inconvenience,
annoyance, interruption, or injury to Tenant's business arising from
Landlord's performance of the improvements in the Development or making any
repairs or changes which Landlord is required or permitted by this Lease or
by any other tenant's lease or required by law to make in or to any portion
of the Building or the Development. Landlord shall nevertheless use
reasonable efforts to minimize any interference with Tenant's business in the
Premises.
5.2 READINESS FOR OCCUPANCY. The Premises shall be deemed ready for
occupancy on the earliest date on which all of the following conditions (the
"Occupancy Conditions") have first been met:
a) SUBSTANTIAL COMPLETION OF WORK. Substantially Completed shall
mean that the Premises and the Work and furnishings required to be installed
under Exhibit D hereof are sufficiently completed to allow Tenant to occupy
the Premises for their intended purposes, and it shall be so deemed
notwithstanding the fact that minor or insubstantial details of construction,
mechanical adjustment, or decoration (as further defined in Exhibit D) remain
to be performed, the noncompletion of which does not materially interfere
with Tenant's beneficial use of the Premises for their intended purposes;
b) ACCESS AND SERVICES. Reasonable means of access and facilities
necessary to Tenant's use and occupancy of the Premises, including corridors,
elevators, stairways, heating, ventilating, air-conditioning, sanitary,
water, and electrical facilities (but exclusive of parking facilities) have
been installed and are in reasonably good operating order and available to
Tenant; and
5.2.1 TENANT DELAYS. If the occurrence of any of the Occupancy Conditions
and Landlord's preparation of the Premises for occupancy shall be delayed
owing to either (a) any act, omission, or failure of Tenant or any of its
employees, agents, or contractors which shall continue after Landlord shall
have given Tenant reasonable notice that such act, omission, or failure would
result in delay, and such delay shall have been unavoidable by Landlord in
the exercise of reasonable diligence and prudence; or (b) the nature of any
items of additional work or change orders that Landlord undertakes to perform
for the account of Tenant (including any delays incurred by Landlord, after
making reasonable efforts, in procuring any materials, equipment, or fixtures
of a kind or nature not used by Landlord as part of its standard construction)
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(collectively "Tenant Delays"), then the Premises shall be deemed ready for
occupancy on the date when they would have been ready but for such Tenant
Delays.
5.3 EARLY ENTRY. During any period that Tenant shall be permitted to enter
the Premises prior to the Commencement Date other than to occupy the same
(e.g., to perform alterations or improvements), Tenant shall comply with
all terms and provisions of this Lease, except those provisions requiring the
payment of Rent. Landlord shall permit early entry, provided the Premises
are legally available and Landlord has completed any Work required under this
Lease.
5.4 NOTICE OF DEFECTS. It shall be conclusively presumed upon Tenant's
taking actual possession of the Premises that the same were in satisfactory
condition (except for latent defects) as of the date of such taking of
possession, unless within thirty (30) days after the Commencement Date Tenant
shall give Landlord notice in writing specifying the respects in which the
Premises were not in satisfactory condition. Landlord agrees to exercise for
Tenant's benefit all of the standard contractor remedies and warranties of at
least one year and any manufacturer's warranties for all new Work and as
further provided in Section 5.3 of the Work Letter Agreement.
5.5 SYSTEMS AND EQUIPMENT. As used in this Lease, "Systems and Equipment"
means collectively any existing duct work, intrabuilding network cables and
wires that transmit voice, data, and other telecommunications signals
("INC"), and other equipment, facilities, and systems designed to supply
water, heat, ventilation, air conditioning and humidity or any other services
or utilities, or comprising or serving as any component or portion of the
electrical, gas, steam, plumbing, sprinkler, communications, alarm, security,
or fire/life/safety systems or equipment, or any other mechanical,
electrical, electronic, computer, or other systems or equipment for the
Building. Nothing in this Lease shall be construed to impose upon the Tenant
a general obligation to maintain the Building Systems and Equipment, except
as specifically provided for in this Lease.
6 ASSIGNMENT AND SUBLETTING. Tenant agrees that it shall not assign,
sublet, mortgage, hypothecate, or encumber this Lease, nor permit or allow
the Premises or any part thereof to be used or occupied by others, without
the prior written consent of Landlord in each instance which shall not
unreasonably be withheld or delayed. The actions described in the foregoing
sentence are referred to collectively herein as "Transfers." If the Premises
or any part thereof be sublet or occupied by anybody other than Tenant,
Landlord may, after default by Tenant, collect rent from the subtenant or
occupant and apply the net amount collected to the Rent herein reserved; but
no Transfer, occupancy, or collection shall be deemed a waiver of the
provisions hereof, the acceptance of the subtenant or occupant as tenant, or
a release of Tenant from the further performance hereunder by Tenant. The
consent by Landlord to a Transfer shall not relieve Tenant from obtaining the
Landlord's express written consent to any further Transfer. In no event
shall any permitted sublessee assign or encumber its sublease or further
sublet all or any portion of its sublet space, or otherwise suffer or permit
the sublet space or any part thereof to be used or occupied by others,
without Landlord's prior written consent in each instance which shall not be
unreasonably withheld or delayed. Notwithstanding anything to the contrary
herein, Tenant shall have a one-time right to assign the entire Premises to a
company in which Tenant is a significant (i.e. more than 20%) shareholder
without Landlord's prior consent, provided that (a) Tenant agrees that such
assignment will not void the personal guarantee which is attached to this
Lease as EXHIBIT E and (b) Tenant shall provide to Landlord concurrently with
such assignment reasonably satisfactory evidence of (i) Tenant's majority
ownership of assignee and (ii) a financial strength on the part of such
assignee which is at least equal to that of Tenant as of the Commencement
Date of this Lease.
7 COMPLIANCE WITH LAWS. Tenant shall use the Premises in compliance with
all applicable federal, state, county, and local governmental and municipal
laws, statutes, ordinances, rules, regulations, codes, decrees, orders, and
other such requirements, and decisions by courts in cases where such
decisions are considered binding precedents in the State of California (the
"State"), and decisions of federal courts applying the laws of the State
(collectively "Laws"). Tenant shall, at its sole cost and expense, promptly
comply with each and all of such Laws, and also with the requirements of any
board of fire underwriters or other similar body now or hereafter constituted
to deal with the condition, use, or occupancy of the Premises, except in the
case of required compliance (including, without limitation, structural
changes) not triggered by Tenant's change in use of the Premises of Tenant's
alterations, additions, or improvements therein. Tenant shall comply with
all applicable Laws regarding the physical condition of the Premises, but
only to the extent that the applicable Laws pertain to the particular manner
in which Tenant uses the Premises or the particular use to which Tenant puts
the Premises, if different from that permitted under Section 4 of this Lease.
7.1 CODE COSTS. Notwithstanding anything to the contrary in this Section 7,
if the requirement of any public authority obligates either Landlord or
Tenant to expend money in order to bring the Premises and/or any area of the
Building into compliance with Laws as a result of Tenant's particular use or
alteration of the Premises; Tenant's change in the use of the Premises; the
manner of conduct of Tenant's business or operation of its installations,
equipment, or other property therein; any cause or condition created by or at
the instance of Tenant, other than by Landlord's performance of any work for
or on behalf of Tenant; or breach of any of Tenant's obligations hereunder,
then Tenant shall bear all costs ("Code Costs") of bringing
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the Premises and/or Building into compliance with Laws, whether such Code
Costs are related to structural or nonstructural elements of the Premises or
Building.
8 HAZARDOUS MATERIALS. Tenant shall not cause or permit to occur (i) any
violation of applicable Laws now or hereafter enacted or issued, related to
environmental conditions on, under, or about the Premises arising from
Tenant's leasehold interest in or use or occupancy of the Premises including,
soil and groundwater conditions and (ii) the use, generation, release,
manufacture, refining, production, processing, storage, or disposal of any
Hazardous Materials on, under, or about the Premises or the Building or the
transportation to or from the Premises or the Building of any Hazardous
Materials, except de minimis amounts of Hazardous Materials that are commonly
used in office products or are present in ordinary cleaning supplies. All
such office products and cleaning supplies will be used and stored in a
manner that complies with all Laws. Tenant shall at its own expense make all
submissions to, provide all information required by, and comply with all
requirements of all governmental authorities under Laws relating to Hazardous
Materials. Should any governmental entity having jurisdiction over the
Premises demand that a remediation plan be prepared or that remediation be
undertaken because of any deposit, spill, discharge, or other release of
Hazardous Materials that occurs during the Term of this Lease at or from the
Premises which arises at any time from Tenant's use or occupancy of the
Premises or from acts or omissions of Tenant, its agents, employees,
representatives, or invitees, then Tenant shall, at its own expense, prepare
and submit the required plans. Tenant shall indemnify, defend, protect, and
hold Landlord, its partners, officers, directors, beneficiaries,
shareholders, agents, employees, and lenders harmless from all fines, suits,
procedures, claims, liabilities, and actions of every kind, and all costs
associated therewith (including investigation costs and attorneys' and
consultants' fees) arising out of or in any way connected with any deposit,
spill, discharge, or other release of Hazardous Materials that occurs during
the Term of this Lease, at or from the Premises which arises at any time from
Tenant's use or occupancy of the Premises or from Tenant's failure to provide
all information, make all submissions, and take all steps requires by any
governmental authorities having jurisdiction over the Premises. Tenant's
obligations and the indemnity hereunder shall survive the expiration or
earlier termination of this Lease. The term Hazardous Materials as used
herein shall include any chemical, substance, or material which has been or
is hereafter determined by any federal, state, or local governmental agency
to be capable of posing a risk of injury to health or safety including
petroleum, asbestos, polychlorinated biphenyls, radioactive materials, and
radon gas.
9 MAINTENANCE, REPAIRS, ALTERATIONS. Subject to Tenant's rights under
Section 5.4 above and Section 5.3 of the Work Letter Agreement, after
completion of Landlord's Work, pursuant to Section 5 Tenant shall, at his own
expense and at all times, maintain the Premises in good and safe condition,
including plate glass and any existing or future intrabuilding alarm,
computer, or network cables and wires that transmit voice, data, and other
telecommunications signals ("INC"), and any other existing or future exposed
equipment or system comprising or supplying water, gas, electricity, HVAC,
communications, alarms, fire/safety, sprinkler, plumbing or appliances for
the Premises and shall surrender the same at termination hereof in as good
condition as received, normal wear and tear excepted. Tenant shall be
responsible for all repairs for such exposed equipment or systems required,
excepting the roof, skylights, exterior walls, and structural foundations,
which shall be maintained by Landlord. Notwithstanding Tenant's foregoing
maintenance and repair responsibility, Tenant shall not be responsible to
replace any systems or equipment where such replacement would be deemed a
capital replacement as opposed to a repair under generally-accepted
accounting principles, unless such replacement has been caused solely by
Tenant's negligence, wilfull misconduct, or failure to maintain as required
hereunder. Landlord shall maintain in good condition the common areas of the
property, such as sidewalks, driveways, lawns, and shrubbery. No improvement
or alteration of the Premises shall be made without the prior written consent
of the Landlord, which shall not be unreasonably withheld or delayed. Prior
to the commencement of any substantial repair (except in an emergency
provided that Tenant shall notify Landlord as soon as reasonably possible),
improvement, or alteration, Tenant shall give Landlord at least five (5)
days' written notice in order that Landlord may post appropriate notices of
nonresponsibility to avoid any liability for liens for any such work of
improvement on the Premises.
10 ENTRY AND INSPECTION. Tenant shall permit Landlord or Landlord's agents
to enter upon the Premises at reasonable times and upon reasonable notice for
the purpose of inspecting the same, will permit Landlord at any time within
one hundred twenty (120) days prior to the expiration of this Lease to place
upon the Premises any usual and reasonable "To Lease" or "Available" signs,
and will permit persons desiring to lease the same to inspect the Premises
thereafter.
11 INDEMNIFICATION OF LANDLORD. Tenant agrees to assume the defense of and
indemnify and save harmless Landlord from all claims, liability, loss,
damage, injury, including physical injury of Tenant's employees directly or
indirectly arising from the performance of this Lease, from tenant's
occupation or use of the Premises, or arising out of the failure of Tenant to
provide a "safe place to work" and from any and all claims, liability, loss,
damage, injury, including physical injury or death and liability therefor
caused or incurred, including injury or death of Tenant's business invitees
and social guests, resulting directly or indirectly from Tenant's occupancy
of the Leased Premises covered by this Lease. Tenant's duties to defend,
indemnify and save harmless shall apply to liability incurred or claimed as a
result of negligence or willful misconduct, regardless of responsibility for
such negligence or willful misconduct except to the extent Landlord, its
employees or agents were substantially negligent in the matters complained of.
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12 LANDLORD'S INSURANCE. Landlord shall, as part of Insurance expenses,
maintain "all risk" property damage insurance containing an agreed amount
endorsement covering not less than one hundred percent (100%) of the full
insurable replacement cost valuation of the Building and the tenant
improvements, betterments, and the alterations thereto; and Landlord's
personal property, business papers, furniture, fixtures, and equipment
(collectively "Landlord's Property"), exclusive of the costs of excavation,
foundations, footings, and risks required to be covered by Tenant's
insurance, and subject to commercially reasonable deductibles. Landlord shall
also, as part of insurance expenses, obtain and keep in full force the
following policies of insurance: commercial general liability insurance;
workers' compensation insurance, if required by applicable Law; and such
other insurance as Landlord deems appropriate or as may be required by any
Holder or ground lessor. Landlord's insurance shall be issued by insurance
companies authorized to do business in the State of California with a
financial rating of at least B+ for any property insurance and at least B+
for any liability insurance, as rated in the most recent edition of Best's
Insurance Reports;
13 TENANT'S INSURANCE. Tenant shall obtain and maintain in effect at all
times during Tenant's possession of the Premises the following insurance
coverages and policies:
(a) LIABILITY INSURANCE. Tenant shall maintain a policy of commercial
general liability insurance, which shall include coverages for (i) bodily
injury; (ii) property damage; and (iii) personal property. The minimum limits
of liability shall be a combined single limit with respect to each occurrence
of not less than One Million Dollars ($1,000,000) and an aggregate limit of
not less than Two Million Dollars ($2,000,000). The policy shall contain a
cross-liability endorsement and a severability of interest clause.
(b) TENANT'S BUSINESS PERSONAL PROPERTY INSURANCE. Tenant shall maintain
on all of its business personal property, including valuable business papers
and accounts receivable; operating supplies; inventory; and furniture,
fixtures, and equipment (whether owned, leased, or rented) (collectively
"Business Personal Property") an "all risk" property damage insurance policy
including coverages for sprinkler leakage and containing an agreed amount
endorsement (or, if applicable, a business owner's policy with a no-
coinsurance provision) in an amount not less than one hundred percent (100%)
of the full replacement cost valuation of such Business Personal Property, if
available. The proceeds from any such policy shall be used by Tenant for the
replacement of such Business Personal property.
(c) BUSINESS INTERRUPTION/EXTRA EXPENSE INSURANCE. Tenant shall maintain
business interruption or (if applicable) contingent business interruption and
extra expense insurance in such amounts as will adequately reimburse Landlord
for any item or expense enumerated in this agreement. If Tenant's business
interruption or (if applicable) contingent business interruption and extra
expense insurance proceeds are insufficient to cover all of Tenant's
obligations, Landlord shall be paid before any other creditor. Such insurance
will be carried with the same insurer that issues the insurance for Tenant's
Business Personal Property pursuant to Section 13(b).
(d) WORKER'S COMPENSATION INSURANCE. Tenant shall maintain worker's
compensation insurance as required by the State of California.
(e) TENANT'S LIABILITY LIMITATION. Except with respect to any intentional
tort, under no circumstance shall Tenant ever be liable for consequential
damages, including damages for lost profits or business interruption.
13.1 TENANT'S INSURANCE CRITERIA. All insurance required to be maintained by
Tenant under this Lease shall conform to the following criteria:
(a) Tenant's insurance shall be issued by insurance companies authorized
to do business in the State of California with a financial rating of at least
B+ for any property insurance and at least B+ for any liability insurance, as
rated in the most recent edition of Best's Insurance Reports;
(b) Tenant's insurance shall be issued as primary and noncontributory;
(c) Tenant's liability and property insurance policies shall name
Landlord as the additional named insured and Landlord, Landlord's agents, and
any ground lessors and Holders (as such terms are defined in Section 27)
whose names shall have been furnished to Tenant as additional named insureds;
(d) Tenant's insurance shall contain an endorsement requiring at least
thirty (30) days written notice from the insurance company to each insured
and additional insured before cancellation or any material change in the
coverage, scope, or amount of any policy; and
(e) with respect to damage to or loss of Tenant's Business Personal
Property, a waiver of subrogation must be obtained, as required under Section
14 below.
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13.2 BLANKET COVERAGE. All of the insurance requirements set forth herein
on the part of Tenant to be observed shall be deemed satisfied if the
Premises are covered by a blanket insurance policy complying with the limits,
requirements, and criteria contained in this Article insuring all or most of
Tenant's facilities in California.
13.3 EVIDENCE OF COVERAGE. A duplicate original policy or a certificate of
insurance shall be deposited with Landlord at the commencement of the Term
or, if earlier, upon Tenant's taking possession of the Premises; and on
renewal of the policy a certificate of insurance listing the insurance
coverages required hereunder and naming the appropriate additional insureds
shall be deposited with Landlord not less than seven (7) days before
expiration of the policy.
14 WAIVER OF SUBROGATION. To the maximum extent permitted by insurance
policies which Landlord and Tenant are required to maintain under Sections 12
and 13 above, Tenant and Landlord, for the benefit of each other, waive any
and all rights of subrogation which might otherwise exist. Landlord and
Tenant intend that their respective property loss risks shall be borne by
responsible insurance carriers to the extent above provided, and Landlord and
Tenant hereby agree to look solely to, and seek recovery only from, their
respective insurance carriers in the event of a property loss to the extent
that such coverage is agreed to be provided hereunder. The parties each
hereby waive all rights and claims against each other for such losses and
waive all rights of subrogation of their respective insurers, provided such
waiver of subrogation shall not affect the right of the insured to recover
thereunder. The parties agree that their respective insurance policies are now,
or shall be, endorsed such that said waiver of subrogation shall not affect
the right of the insured to recover thereunder, so long as no material
additional premium is charged therefor.
15 UTILITIES. Tenant shall be responsible for the payment directly to their
suppliers of the charges for all utilities (except water, which shall be
supplied by Landlord as part of Operating Expenses), including, gas,
electricity, heat, and other services delivered to or consumed in the
Premises. If any such services are not separately metered to Tenant, Tenant
shall pay to Landlord pursuant to Section 2.2 a reasonable proportion, as
determined by Landlord, of all charges jointly metered with other premises.
15.1 INTERRUPTION OF SERVICES. Landlord does not warrant that any services or
utilities provided hereunder for Tenant's use in the Premises will be free
from shortages, failures, variations, or interruptions caused by repairs,
maintenance, replacements, improvements, alterations, changes of service,
strikes, lockouts, labor controversies, accidents, inability to obtain
services, fuel, steam, water or supplies, governmental requirements or
requests, or other causes beyond Landlord's reasonable control, including
interference with light or other incorporeal hereditaments and any
interruption in services or any failure to provide services to Landlord by a
designated utility company at the demarcation point at which Landlord
accepts responsibility for such service or at any point prior thereto, which
interference impedes Landlord in furnishing plumbing, HVAC, electrical,
sanitary, life safety, elevator, telecommunications, or other Building
services, utilities, or the Systems and Equipment. None of the same shall be
deemed an eviction or disturbance of Tenant's use and possession of the
Premises or any part thereof, shall render Landlord liable to Tenant for
abatement of Rent, or shall relieve Tenant from performance of Tenant's
obligations under this Lease. Landlord in no event shall be liable for damages
by reason of loss of profits, business interruption, or other compensatory or
consequential damages.
16 SIGNS. Landlord reserves the exclusive right to the roof, side and rear
walls of the Premises. Tenant shall not construct any projecting sign or
awning without the prior written consent of Landlord, which shall not be
unreasonably withheld or delayed.
17 CONDEMNATION. If any part of the Premises shall be taken or condemned
for public use, and a part thereof remains which is susceptible of occupation
hereunder, this Lease shall, as to the part taken, terminate as of the date
the condemnor acquires possession, and thereafter Tenant shall be required to
pay such proportion of the rent for the remaining term as remaining square
footage of the Premises bears to the total original square footage of the
Premises at the date of condemnation; provided, however, that Landlord at its
option may terminate this Lease as of the date the condemnor acquires
possession. In the event that the demised Premises are condemned in whole, or
that a portion is condemned of such size that the remainder is not suitable
for Tenant's beneficial enjoyment of the Premises for their intended
purposes, this Lease shall terminate upon the date upon which the condemnor
acquires possession. All sums which may be payable on account of any
condemnation shall belong to the Landlord, and Tenant shall not be entitled
to any part thereof; provided however, that Tenant shall be entitled to
retain any amount awarded to him for his trade fixtures, moving expenses,
loss of goodwill or increased market value of rent, provided that such award
does not reduce the amount of Landlord's claim and award.
18 SURRENDER AND RESTORATION. At or before the Expiration Date or the date
of any earlier termination of this Lease, or as promptly as practicable using
Tenant's best efforts after such an earlier termination date, Tenant, at its
expense, shall do all of the following:
(a) surrender possession of the Premises in the condition required under
Section 9, ordinary wear and tear excepted;
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(b) surrender all keys, any key cards, and any parking stickers or
cards to Landlord and give Landlord in writing the combinations of any locks
or vaults then remaining in the Premises;
(c) remove from the Premises all of Tenant's Property, except such
items thereof as Tenant shall have expressly agreed in writing with Landlord
were to remain and to become the property of Landlord; and
(d) fully repair any damage to the Premises or the Property resulting
from such removal.
Tenant's obligations herein shall survive the termination of the Lease. All
improvements and other items in or upon the Premises (except Tenant's
Property), whether installed by Tenant or Landlord, shall be Landlord's
property and shall remain upon the Premises, all without compensation,
allowance, or credit to Tenant; provided, however, that if prior to such
termination Landlord so directs by notice, Tenant shall promptly remove such
of the Improvements in the Premises as are designated in such notice and
shall restore the Premises to their condition prior to the installation of
such Improvements. Notwithstanding the foregoing, Landlord shall not require
removal of customary office improvements installed pursuant to the Work
Letter Agreement, if any (except as expressly provided to the contrary
therein), or installed by Tenant with Landlord's written approval (except as
expressly required by Landlord in connection with granting such approval).
18.1 TENANT'S FAILURE TO REMOVE OR RESTORE. If Tenant shall fail to perform
any repairs or restoration or fail to remove any items from the Premises as
required under this Section 18, Landlord may do so, and Tenant shall pay
Landlord the cost thereof upon demand. All property removed from the Premises
by Landlord pursuant to any provisions of this Lease or any Law may be
handled or stored by Landlord at Tenant's expense, and Landlord shall in no
event be responsible for the value, preservation, or safekeeping thereof. All
property not removed from the Premises or retaken from storage by Tenant
within thirty (30) days after expiration or earlier termination of this Lease
or Tenant's right to possession shall at Landlord's option by conclusively
deemed to have been conveyed by Tenant to Landlord as if by bill of sale
without payment by Landlord. Unless prohibited by applicable Laws, Landlord
shall have a lien against such property for the costs incurred in removing and
storing the same.
19 DESTRUCTION OF PREMISES. Landlord and Tenant agree that their respective
rights and obligations in the event of any damage or destruction of the
Premises or Building shall be governed exclusively by this Lease. Tenant, as
a material inducement to Landlord entering into this Lease, irrevocably
waives and releases Tenant's rights under California Civil Code Sections
1932(2), 1933(4), and 1942, as the same may be modified or replaced
hereafter. No damages, compensation, or claim shall be payable by Landlord for
any inconvenience, interruption, or cessation of Tenant's business or any
annoyance arising from any damage to or destruction of all or any portion of
the Premises or Building.
19.1 PARTIAL DESTRUCTION OF PREMISES. In the event of a partial destruction
of the Premises during the term hereof from any cause, Landlord shall
forthwith repair the same at Landlord's expense, provided that such repairs
can be made within sixty (60) days under existing Laws; but such partial
destruction shall not terminate this Lease, except that Tenant shall be
entitled to a proportionate reduction of Rent while such repairs are being
made, based upon the extent to which the making of such repairs shall
interfere with Tenant's beneficial enjoyment of the Premises for their
intended purposes. If such repairs cannot be made within sixty (60) days,
Landlord, at his option may make the same within a reasonable time, this
Lease continuing in effect with the rent proportionately abated as aforesaid;
and in the event that Landlord shall not elect to make such repairs which
cannot be made within sixty (60) days, this Lease may be terminated by either
party upon written notice, effective as of the date of such notice.
Notwithstanding the foregoing, if all repairs cannot be completed or are not
actually completed within one hundred eighty (180) days of the date of damage
Tenant may terminate this Lease at its option upon written notice to Landlord.
19.2 DESTRUCTION OF BUILDING. In the event that the Building is destroyed to
an extent of not less than one-third of the replacement costs thereof, either
party may elect to terminate this Lease, whether the Premises be injured or
not. A total destruction of the Building shall terminate this Lease.
19.3 DISPUTES. In the event of any dispute between Landlord and Tenant with
respect to the provisions hereof, the matter shall be settled by arbitration
in accordance with the provisions of Section 26 below.
20 TENANT'S DEFAULT. The occurrence of any one or more of the following
events shall constitute a material breach and default ("Event of Default") of
this Lease by Tenant:
(a) Tenant's failure to pay any Rent or any other charges required to
be paid by Tenant under this Lease, where such failure continues for ten (10)
days after written notice from Landlord that such payment is due and payable
provided, however, that such written notice will no longer be required if
Landlord has issued two or more during any 12-month period;
(b) Tenant's failure promptly and fully to perform any other covenant,
condition, or agreement contained in this Lease, where such failure continues
for thirty (30) days after written notice thereof from Landlord to Tenant;
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(c) Tenant's failure to comply with the Rules, unless such failure is
cured within five (5) days after notice; provided, that if the nature of
Tenant's failure is such that more than five (5) days are reasonably required
in order to cure, Tenant shall not be in Default if Tenant commences to cure
within such period and thereafter diligently and continuously prosecutes such
cure to completion;
(d) Tenant's abandonment or vacation of the Premises;
(e) any material misrepresentation or omission herein or in any
financial statements or other materials provided by Tenant or any Guarantor
in connection with negotiating or entering this Lease or in connection with
any Transfer under Section 6;
(f) cancellation of any guaranty of this Lease by any Guarantor;
(g) failure by Tenant to cure within any applicable times permitted
thereunder any default under any other lease for space in any other building
owned or managed by Landlord or its affiliates now or hereafter entered by
Tenant; and any Default hereunder not cured within the times permitted for
cure herein shall, at Landlord's election, constitute a default under any
other such lease or leases;
(h) The levy of a writ of attachment or execution on this Lease or on
any of Tenant's property;
(i) Tenant's or any Guarantor's general assignment for the benefit of
creditors or arrangement, composition, extension, or adjustment with its
creditors; or
(j) In any proceeding or action in which Tenant is a party, the
appointment of a trustee, receiver, agent, or custodian to take charge of the
Premises or Tenant's Property for the purpose of enforcing a lien against the
Premises or Tenant's Property.
The parties expressly agree that any notice which Landlord may give to Tenant
that an Event of Default has occurred under this Section 20 shall satisfy the
requirements of Section 1161 of the California Code of Civil Procedure, and
it shall not be necessary to give another notice to Tenant under Section 1161.
20.1 LANDLORD'S REMEDIES. Upon the occurrence of an Event of Default
hereunder, Landlord shall have the right, in addition to any other rights or
remedies Landlord may have, at Landlord's option, without further notice or
demand of any kind, to elect to do one of the following alternatives:
(i) Terminate this Lease and Tenant's right to possession of the Premises,
re-enter the Premises, and take possession thereof; and Tenant shall have no
further claim to the Premises or under this Lease; or
(ii) Continue this Lease in effect and collect any unpaid Rent or other
charges which have theretofore accrued or which thereafter become due and
payable. It is intended hereunder that Landlord have the remedy described in
California Civil Code Section 1951.4, which provides that a landlord may
continue a lease in effect after a tenant's breach and abandonment and
recover rent as it becomes due, if tenant has the right to sublease or
assign, subject only to reasonable limitations.
In the event of any re-entry or retaking of possession by Landlord, Landlord
shall have the right, but not the obligation, to remove all or any part of
Tenant's Property from the Premises and to place such property in storage at
a public warehouse at the expense and risk of Tenant. In addition, upon an
event of default, Tenant, or Tenant's Guarantors shall immediately pay to
Landlord the unamortized portion of the Supplementary Allowance as specified
in Section 2b of Exhibit D.
20.2 NO WAIVER OF DEFAULT. The waiver by Landlord of any Event of Default or
of any other breach of any term, covenant, or condition of this Lease shall
not be deemed a waiver of such term, covenant, or condition or of any
subsequent breach of the same or any other term, covenant, or condition.
Acceptance of Rent by Landlord subsequent to any Event of Default or breach
hereof shall not be deemed a waiver of any preceding Event of Default or
breach other than the failure to pay the particular Rent so accepted,
regardless of Landlord's knowledge of any breach at the time of such
acceptance of Rent. Neither Landlord nor Tenant shall be deemed to have
waived any term, covenant, or condition of this Lease, unless the waiving
party gives the other party written notice of such waiver. Neither Landlord
nor Tenant should rely upon the other party's failure or delay in enforcing
any right or remedy hereunder.
20.3 LANDLORD'S RIGHT TO CURE. If Tenant defaults in the performance of any
of its obligations under this Lease, Landlord may (but shall not be obligated
to), without waiving such default, perform the same for the account and at
the expense of Tenant. Tenant shall pay Landlord all costs of such
performance promptly upon receipt of a bill therefor.
20.4 DAMAGES. Should Landlord elect to terminate this Lease under the
provisions of Section 20.1(i) above, Landlord may recover as damages from
Tenant the following:
(a) PAST RENT: The worth at the time of the award of any unpaid Rent
which had been earned at the time of termination; plus
(b) RENT PRIOR TO AWARD: The worth at the time of the award of the
amount by which the unpaid Rent which would have been earned after
termination until the time of award exceeds the amount of such rental loss
that Tenant proves could have been reasonably avoided; plus
(c) RENT AFTER AWARD: The worth at the time of the award of the amount
by which the unpaid Rent for the balance of the term after the time of award
exceeds the amount of the rental loss that Tenant proves could have been
reasonably avoided; plus
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(d) SUBSTANTIALLY CAUSED DAMAGES: Any other amount necessary to
compensate Landlord for all detriment proximately caused by Tenant's failure
to perform its obligations under this Lease, including, but not limited to,
any costs or expenses (including attorneys' fees), incurred by Landlord in
(i) retaking possession of the Premises; (ii) maintaining the Premises after
Tenant's default; (iii) preparing the Premises for reletting to a new tenant,
including any repairs or alterations; and (iv) reletting the Premises,
including broker's commissions.
"The worth at the time of the award" as used in subsections (a) and (b) above
is to be computed by allowing interest at the rate of ten percent (10%) per
annum. "The worth at the time of the award" as used in subsection (c) above
is to be computed by discounting the amount at the discount rate of the
Federal Reserve Bank situated nearest to the Premises at the time of the
award plus one percent (1%).
21 RULES. Tenant agrees that it will abide by, keep and observe all
reasonable rules and regulations which Landlord may make from time to time
for the management, safety, care, and cleanliness of the Building and
grounds, the parking of vehicles and the preservation of good order herein as
well as for the convenience of other occupants and tenants of the Building.
The violations of any such rules and regulations shall be deemed a material
breach of this Lease by Tenant.
22 NOTICES. Any notice required or permitted under this Lease shall be in
writing and shall be delivered in at least one of the following ways:
personally or by private hand-delivery messenger service; by depositing the
same in the United States mail, postage prepaid, registered or certified,
return receipt requested; or by depositing such notice, postage prepaid, with
Federal Express, DHL, UPS, or another nationally-recognized private
overnight delivery service. Each such notice shall be addressed to the
intended recipient at such party's address set forth as follows, or at such
other address as such party has theretofore specified by written notice
delivered in accordance with this Section 22:
if to Landlord:
Attn: Michael Goldin
2332 5th Street
Berkeley, CA 94710
if to Tenant:
The Roda Group Venture
Development Company
918 Parker Street
Berkeley, CA 94710
Attn: Daniel H. Miller
Every notice given to a party shall state the section of the Lease pursuant
to which the notice is given and the period of time within which the
recipient of the notice must respond.
23 HOLDING OVER. Any holding over after the expiration of this Lease, with
the consent of Landlord, shall be construed as a month-to-month tenancy at a
base monthly rental of one hundred and fifty percent (150%) of the monthly
rental which was in effect under the Lease on the Expiration Date, and
otherwise in accordance with the terms hereof, as applicable, except that
Tenant shall have no extension or renewal option.
24 OPTION TO RENEW. Tenant is hereby granted one (1) option to extend (the
"Extension Option") the Term of the Lease for a period of three (3) Lease
Years (the "Extension Period"). The Extension Period term shall begin the
first day following the Expiration date and shall take effect on the same
terms and conditions in effect under the Lease immediately prior to the first
Extension Period, except that monthly Base Rent shall be eight thousand eight
hundred twenty dollars ($8,820.00) plus any Additional Rent as specified in
Section 2 herein and PARA. 2b of Exhibit D. Should Tenant elect not to
renew this Lease, then Landlord shall exercise reasonable good-faith efforts
to secure another tenant for the Leased Premises who shall agree to leave
intact all, or as much as possible, of the Work specified in Exhibit D of the
Work Letter Agreement. Tenant shall pay back to Landlord the unamortized
amount of the Supplementary Allowance as follows:
1) If the new Tenant assumes Premises as is, and the new Rent is higher
than that of The Roda Group, then Landlord shall pay to The Roda Group on a
monthly basis 20% of the difference between The Roda Group lease and new
lease for the period of the three year extension term.
2) If the new Tenant assumes Premises as is, and the new Rent is less
than that of The Roda Group, The Roda Group shall pay to Landlord the
difference between The Roda Group Lease and that of new Tenant on a monthly
basis for the period of the three year extension term.
3) If New Tenant Lease requires complete removal of The Roda Group's
Work as specified in Exhibit D of the Work Letter Agreement, Tenant shall pay
to Landlord on a monthly basis a sum equal to eighteen dollars and fifty
three cents ($18.53) per one thousand dollars ($1000) of the Supplementary
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Allowance which Tenant has elected to draw pursuant to the terms of the Work
Letter Agreement for the period of the three year Extension term.
4) If new Tenant requires that some of The Roda Group's Work, as
specified in Exhibit D of the Work Letter Agreement, be removed, then
Landlord will determine at its reasonable discretion, that amount of the
remaining unamortized portion of the Supplementary Allowance which will be
due. Landlord will notify Tenant of this amount and such amount will become
due within thirty days of written notice.
5) In addition to the foregoing provisions, during any period between
the expiration of the initial Term and the commencement date for payment of
rent under any new lease which Landlord is able to obtain for the Premises,
Tenant shall pay to Landlord on a monthly basis a sum equal to eighteen
dollars and fifty three cents ($18.53) per one thousand dollars ($1000) of the
Supplementary Allowance which Tenant has elected to draw pursuant to the
terms of the Work Letter Agreement until one of the above conditions has been
met. This provision will survive the Termination of this Lease.
24.1 EXERCISE OF OPTION. The Extension Option may be exercised only by
giving Landlord written notice of Tenant's irrevocable election to exercise
no earlier than ten (10) months and no later than six (6) months prior to the
commencement of the Extension Period. Tenant agrees to give Landlord notice
within such period of its exercise of the Extension Option or of its decline
to exercise the Extension Option. If Tenant fails to give the notice
required hereunder within the time specified, Tenant shall be deemed
conclusively to have exercised the Extension Option automatically for the
Extension Period as provided herein.
24.2 DEFAULT. Tenant's exercise of the Option shall, at Landlord's election,
be null and void if an Event of Default exists on the date of Tenant's
notice of exercise and such Default is not cured within the applicable cure
period, or at any time thereafter and prior to commencement of the relevant
Extension Period and such Default is not cured within the applicable cure
period. Tenant's exercise of the Extension Option shall not operate to cure
any Default by Tenant nor to extinguish or impair any rights or remedies of
Landlord arising by virtue of such Default. If the Lease or Tenant's right
to possession of the Premises shall terminate before Tenant shall have
exercised the Extension Option, then immediately upon such termination the
Extension Option shall simultaneously terminate and become null and void.
24.3 TIME. Time is of the essence of the Extension Options granted hereunder.
25 ESTOPPEL CERTIFICATE. Tenant shall at any time upon not less than ten
(10) days' prior written notice from Landlord execute, acknowledge, and
deliver to Landlord a statement in writing certifying (a) that this Lease is
unmodified and in full force and effect (or, if modified, stating the nature
of such modification and certifying that this Lease, as so modified, is in
full force and effect), the amount of any security deposit, and the date to
which the rent and other charges are paid in advance, if any; and (b)
acknowledging that there are not, to Tenant's knowledge, any uncured defaults
on the part of Landlord hereunder, or specifying such defaults if any are
claimed. Any such statement may be conclusively relied upon by any
prospective purchaser or encumbrancer to the Premises. At Landlord's option,
Tenant's failure to deliver such statement within such time shall be
a material breach of this Lease or shall be conclusive upon Tenant that (i)
this Lease is in full force and effect, without modification except as may be
represented by Landlord, (ii) there are no uncured defaults in Landlord's
performance, and (iii) not more than one month's rent has been paid in
advance or such failure may be considered by Landlord as a default by Tenant
under this Lease. If Landlord desires to finance, refinance, or sell the
Premises, or any part thereof, Tenant hereby agrees to deliver to any lender
or purchaser designated by Landlord summary financial statements of Tenant as
may be reasonably required by such lender or purchaser. All such financial
statements shall be received by Landlord and such lender or purchaser in
confidence and shall be used only for the purposes herein set forth.
25.1 SUBORDINATION, NON-DISTURBANCE, AND ATTORNMENT. With respect to
Security Devices entered into by Landlord after execution of this Lease,
Tenant's subordination of this Lease shall be subject to receiving assurance
(a "non-disturbance agreement") from the Lender, which is otherwise
reasonably acceptable to Tenant, that Tenant's possession and this Lease,
including any options to extend the term hereof, will not be disturbed so
long as Tenant is not in Breach hereof and attorns to the record owner of the
Premises. Landlord agrees to use reasonable commercial efforts to obtain
from the current lender on the Building a nondisturbance agreement for Tenant
within a reasonable period before or after the Commencement Date.
26. ARBITRATION. In the event of any dispute between Landlord and Tenant
arising under this Lease that is not resolved by the parties within ten (10)
days after the date either party gives notice to the other of its desire to
arbitrate the dispute (the "Outside Agreement Date"), the dispute shall be
settled by binding arbitration as provided in this Section 26; provided,
however, that nothing in this Section 26 shall limit Landlord's right to
bring an unlawful detainer action against Tenant if appropriate. All
arbitration proceedings shall be conducted at Berkeley, California. Judgment
upon the arbitration award may be entered in any court having jurisdiction.
The arbitrators shall have no power to change the Lease provisions. Both
parties shall continue performing their Lease obligations pending the award
in the arbitration proceeding. The arbitrators shall award the prevailing
party reasonable expenses and costs, including reasonable attorney's fees
pursuant
12
<PAGE>
to Section 26.2 below, plus interest on the amount due at ten percent (10%)
per annum or the maximum then allowed by Law, whichever is less.
26.1 PROCEDURE. Not later than fifteen (15) days following the Outside
Agreement Date, the party demanding arbitration shall submit the matter to
arbitration under the current rules of the American Arbitration Association
including their rules relating to discovery, but subject to any definitions
or sections of the Lease which may be applicable to the dispute under
submission, and shall request a list of potential arbitrators from whom an
arbitrator shall be selected in accordance with the rules of the American
Arbitration Association.
26.2 PAYMENT. The losing party shall pay to the prevailing party the amount
of the final arbitration award. If payment is not made within ten (10)
business days after the date the arbitration award is no longer appealable,
then in addition to any remedies under the law, if Landlord is the prevailing
party, it shall have the same remedies for failure to pay the arbitration
award as it has for Tenant's failure to pay Rent; and if Tenant is the
prevailing party, it may deduct any remaining award from its monthly payment
of Rent or other charges.
27 SUBORDINATION. Tenant agrees that this Lease shall be automatically
subordinate to any mortgage or trust deeds that are now or may hereafter be
placed upon said Premises. Notwithstanding the foregoing, Tenant agrees that
any mortgagee of the Building, the holder of any note, or beneficiary of any
deed of trust (collectively "Holders") encumbering the Building shall have
the right upon written notice to Tenant to subordinate the lien of any such
note or deed of trust to this Lease.
28 LANDLORD'S LIABILITY. The liability of Landlord to Tenant for any default
by Landlord under this Lease or arising in connection herewith or with
Landlord's operation, management, leasing, repair, renovation, alteration, or
any other matter relating to the Building or the Premises shall be limited to
Landlord's insurance in a minimum amount of three million dollars ($3,000,000)
combined plus the interest of Landlord in the Development (and the rental
proceeds thereof) except with respect to any intentional tort. Under no
circumstances shall Landlord ever be liable for consequential or punitive
damages, including damages for lost profits or for business interruption.
Tenant agrees to look solely to Landlord's interest in the Development (and
the rental proceeds thereof) for the recovery of any judgment against
Landlord, and Landlord shall not be personally liable for any such judgment
or deficiency after execution thereon. The limitations of liability contained
in this Section 28 shall apply equally and inure to the benefit of Landlord's
present and future partners, beneficiaries, officers, directors, trustees,
shareholders, agents, and employees, and their respective partners, heirs,
successors, and assigns. Under no circumstances shall any present or future
general or limited partner of Landlord (if Landlord is a partnership), or
trustee or beneficiary (if Landlord or any partner of Landlord is a trust)
have any liability for the performance of Landlord's obligations under this
Lease.
28.1 LIABILITY UPON TRANSFER. The term Landlord as used herein shall mean only
the owner or owners, at the time in question, of the fee title of leased
Premises and in the event of any transfer of such title or interest, Landlord
herein named shall be relieved from and after the date of such transfer of
all liability as respects Landlord's obligations thereafter to be performed,
provided that any funds in the hands of Landlord at the time of such
transfer, in which Tenant has an interest, shall be delivered to the grantee.
The obligations contained in this Lease to be performed by Landlord shall,
subject as aforesaid, be binding on Landlord's successors and assigns, only
during their respective periods of ownership.
29 FIRST SOURCE AGREEMENT. (For five or more employees) Tenant represents
that it has fewer than five (5) employees as of the Commencement Date of the
Lease and as such is not subject to the requirement to enter into a First
Source Agreement with the City of Berkeley.
30 MISCELLANEOUS. The following provisions shall apply generally to terms,
provisions, and covenants of this Lease:
30.1 NO OFFER. The submission of this document for examination and
negotiation does not constitute an offer to lease, or a reservation of, or
option for, the Premises. This document becomes effective and binding only
upon execution and delivery hereof by Tenant and by Landlord. No act or
omission of any employee or agent of Landlord or of Landlord's broker shall
alter, change, or modify any of the provisions hereof.
30.2 NO PARTNERSHIP. It is expressly understood that Landlord does not, in any
way or for any purpose, become a partner of Tenant in the conduct of its
business, or otherwise, or joint adventurer or a member of a joint enterprise
with Tenant, and that the provisions of this Lease relating to the percentage
rental payable hereunder, if any, are included solely for the purpose of
providing a method whereby the rental is to be measured and ascertained.
30.3 HEIRS, ASSIGNS, SUCCESSORS. This Lease is binding upon and inures to the
benefit of the heirs, assigns and successors in interest to the parties.
13
<PAGE>
30.4 TIME. Time is of the essence of this Lease.
30.5 WAIVER. No failure of Landlord or Tenant to enforce any term hereof
shall be deemed to be a waiver.
30.6 ATTORNEY'S FEES. In case arbitration or suit should be brought for
recovery of the Premises, or for any sum due hereunder, or for any breach
hereunder by either Tenant or Landlord, or because of any act or omission
which may arise out of the possession of the Premises, by either party, the
prevailing party shall be entitled to all costs incurred in litigation,
arbitration, or otherwise in connection with such action, including a
reasonable attorneys' fee.
31 ENTIRE AGREEMENT. This Lease, together with its exhibits, contains all
the agreements of the parties hereto and supersedes any previous
negotiations. There have been no representations made by the Landlord or
Tenant or understandings made between the parties other than those set forth
in this Lease and its exhibits. This Lease may not be modified except by a
written instrument duly executed by the parties hereto.
IN WITNESS WHEREOF Landlord and Tenant have executed this Lease as of
the date first-above written.
Landlord: EAT/WORK DEVELOPMENT, LP, a California limited partnership
By: /s/ Michael Goldin
----------------------------------------
Michael Goldin, General Partner
Tenant: THE RODA GROUP VENTURE DEVELOPMENT COMPANY
L.L.C., a Delaware limited liability company
By: /s/ Daniel Miller
----------------------------------------
Daniel Miller
Its: Managing Director
---------------------------------------
14
<PAGE>
EXHIBIT A
BUILDING
[BLUEPRINT]
Eat/Work
Development
918 PARKER ST
<PAGE>
EXHIBIT B
[BLUEPRINT]
Eat/Work
Development
918 PARKER ST
BUILDING A
<PAGE>
EXHIBIT C
This Commencement Date agreement is attached to that certain lease dated 8/14/98
between Eat/Work Development, LP, a California limited partnership and The
Roda Group Venture Development Company, L.L.C., a Delaware limited liability
company ("Tenant") for the Premises as described in the Lease. Landlord and
Tenant agree that the Commencement Date pursuant to Section 1.4 of the Lease
shall be 10/15/98 for all purposes thereunder.
Landlord: EAT/WORK DEVELOPMENT, LP, a California limited partnership
By: /s/ Michael Goldin
----------------------------------------
Michael Goldin, General Partner
Tenant: THE RODA GROUP VENTURE DEVELOPMENT COMPANY
L.L.C., a Delaware limited liability company
By: /s/ Daniel Miller
----------------------------------------
Daniel Miller
Its: Managing Director
---------------------------------------
<PAGE>
EXHIBIT D - WORK LETTER AGREEMENT
THIS WORK LETTER AGREEMENT (the "Agreement") is made as of 8/14,
between EAT/WORK DEVELOPMENT, LP, a California limited partnership
("Landlord") and The Roda Group Venture Development Co., L.L.C., a Delaware
limited liability company ("Tenant").
Reference is made to the lease dated as of 8/14 between Landlord and
Tenant (the "Lease") for premises known as Suite A-14, (the "Premises"),
located in the building (the "Building") known as 918 Parker Street, Berkeley,
California.
1. BASIC TERMS.
A. Date to Complete Planning: July 23, 1998.
B. Date to substantially complete work: Commencement Date under the
Lease.
C. Work as shown in Plans attached hereto as SCHEDULE 1 which will
be attached hereto and incorporated herein and initialled by the parties when
the plans are completed pursuant to Section 2A below:
(a) Demising walls as shown in Plans. These walls to be
standard steel stud frame with sound batte and 5/8" sheet rock. Walls to be
spray finished and painted white. Molding and trim to be painted wood.
(b) Standard office lighting.
(c) Pre-wired for burglar alarm.
(d) Network cabling as shown on SCHEDULE 1
(e) Workstations and cubicles as shown on SCHEDULE 1
(f) air conditioning
C. NUMBER OF WORKING DRAWING REVISIONS (including revisions prior
hereto) at Landlord's Cost: ONE (1) Landlord's contribution hereunder to the
cost of the revisions to the Plans shall be chargeable to the Improvement
Allowance specified below.
2. BASIC AGREEMENT.
A. COMPLETION OF PLANS. On or before the "Date To Complete Planning"
described above, Tenant shall: (a) provide Landlord with all information
concerning Tenant's requirements in order for Landlord to prepare the Plans;
and (b) arrange for Landlord to prepare the Plans, and obtain Landlord's
written approval thereof. However, Tenant shall not be responsible for delays
caused by Landlord. Tenant recognizes and agrees that preparation of the
Plans and completion of the Work involves a coordination of activities in
accordance with a critical path analysis which is attached hereto as Schedule
2. In recognition of this critical path, Tenant agrees that it will give its
approval (or approval conditioned upon specified changes) to the Plans and any
phases of the Work as reasonably requested by Landlord within three (3)
business days after Landlord's request for such approval in each such
instance. Tenant's failure to give its approval (or approval conditioned upon
specified changes) to the Plans and any phases of the Work within such period
shall be deemed an approval of the Plans or phase of the Work for which
Landlord sought such approval. In no event shall the Commencement Date under
the Lease or Tenant's obligation to pay the Rent specified thereunder be
delayed or abated because of Tenant's failure timely to give its approval (or
approval conditioned upon specified changes) to the Plans and any phases of
the Work within the time specified in this paragraph.
B. COST OF THE PLANS. Landlord shall bear the cost of the Plans up
to an aggregate amount of 10% of the cost of the Work (including revisions,
any engineering reports, or other studies or tests in connection therewith) up
to the amounts specified above. Tenant shall bear any costs of the Plans over
such amounts. Landlord's contribution hereunder to the cost of the Plans
shall be chargeable to the Improvement Allowance specified below.
C. COMPLETION OF WORK. On or before the Commencement Date under the
Lease, Landlord shall substantially complete the Work shown on the final
approved Plans. However, Landlord shall not be responsible for delays caused
by Tenant or Tenant's contractor's, agents, or employees.
D. COST OF THE WORK. Landlord agrees to provide to Tenant an
improvement allowance to be applied to the cost of the Work in the amount of
One Hundred Thirty Thousand Dollars ($130,000) (the "Improvement Allowance").
In addition, Landlord agrees to make available to defray the cost of the Work
for Tenant a supplementary improvement allowance in an amount to be
designated by Tenant in a written notice to be delivered to Landlord within
ten (10) days after Landlord's final approval of the Plans, up to a maximum
of Ninety Thousand Dollars ($90,000), subject to the bank availability (the
"Supplementary Allowance"). Landlord shall bear the cost of the Work
(including the cost of building permits and sales tax) as shown on the final
approved Plans, up to the aggregate amount of the Improvement Allowance and
that portion of the Supplementary Allowance utilized by Tenant, as provided
above; and Tenant shall bear any costs incurred in connection with any work
it may desire in addition to that shown on the final approved Plans, as well
as any costs incurred in connection with (a) concealed conditions encountered
on the job site, (b) new legal requirements which become effective following
preparation of the estimate; or (c) strikes, acts
<PAGE>
of God, shortages of materials, or other causes beyond Landlord's reasonable
control, as well as any portion of the cost of the Work which exceeds the
aggregate sum of the Improvement Allowance and the amount of Supplementary
Improvement Allowance designated by Tenant as provided above. Tenant agrees
that the Rent for the initial Term of the Lease shall be increased by
eighteen Dollars and Fifty Three Cents ($18.53) per month for each increment
of One Thousand Dollars ($1,000) or part thereof that Tenant elects to draw
of the available Supplementary Improvement Allowance as provided herein,
which increases assumes (x) that Tenant will exercise its Extension Option
under the Lease, (y) an amortization period of six (6) years, and (z) an
interest rate of 10% per annum. Tenant agrees promptly to execute and deliver
to Landlord an amendment to the Lease to reflect the increase in the Rent
thereunder with results from the utilization of the Supplementary Improvement
Allowance described herein as soon as the amount of such increase is
liquidated and as soon as such amendment is presented to Tenant for
execution. The increase shall be deemed an item of Additional Rent under
Section 2.2 of the Lease. An estimate of the cost for the Work is attached as
SCHEDULE 2.
3. CHANGES AFTER PLANS ARE APPROVED. If Tenant shall desire any changes,
alterations, or additions to the final Plans after they have been approved by
Landlord, Tenant shall submit a detailed written request or revised Plans
(the "Change Order") to the Landlord for approval. If reasonable and
practicable and generally consistent with the Plans theretofore approved,
Landlord shall not unreasonably withhold approval; but all costs in connection
therewith shall be paid for by Tenant as a Tenant's Cost under Paragraph 4.
4. TENANT'S COST; ESTIMATES (IF APPLICABLE). Any amounts that Tenant is
required to pay under this Agreement shall be referred to as "Tenant's Cost"
herein. Tenant's cost shall be deemed "additional Rent" under the Lease.
Landlord may at any time reasonably estimate Tenant's Cost in advance, in
which case, after mutual written agreement to proceed, Tenant shall deposit
such estimated amount with Landlord within 10 days after requested by
Landlord. If such estimated amount exceeds the actual amount of Tenant's
Cost, Tenant shall receive a refund of the difference; and if the actual
amount shall exceed the estimated amount, Tenant shall pay the difference to
Landlord within ten (10) days after requested by Landlord. Any cost estimates
based on a Space Plan or so-called "pricing plan" will be preliminary in
nature and may not be relied on by Tenant. However, Landlord agrees that any
written estimate of Tenant's Cost based on the approved Working Drawings will
not be exceeded by more than twenty percent (20%), except to the extent that:
(a) Tenant thereafter makes changes in the Working Drawings or the Work, (b)
overtime labor is required in order to substantially complete the Work by the
Work Completion Date, (c) concealed conditions are encountered on the job
site, (d) new legal requirements become effective following preparation of
the estimate, or (e) there are strikes, acts of God, shortages of materials,
or other causes beyond Landlord's reasonable control.
5. SUBSTANTIAL COMPLETION. The term substantial completion and its various
inflections as used herein shall mean that Landlord has caused all of the
Work to be completed substantially, except for so-called "punchlist items";
e.g., minor details of construction or decoration or mechanical adjustments
which do not substantially interfere with Tenant's occupancy or beneficial
enjoyment of the Premises for their intended purposes or Tenant's ability to
complete any improvements to the Premises to be made by Tenant. If there is
any dispute as to whether Landlord has substantially completed the Work, the
good faith decision of Landlord's Space Planner shall be final and binding on
the parties.
5.1 NOTICE OF SUBSTANTIAL COMPLETION. If Landlord notifies Tenant in
writing that the Work is substantially completed, and Tenant fails to object
thereto in writing within seven (7) days thereafter specifying in reasonable
detail the items of work needed to be performed in order to achieve
substantial completion, Tenant shall be deemed conclusively to have agreed
that the Work is substantially completed, for purposes of commencing the
Commencement Date and Rent under the Lease.
5.2 FINAL COMPLETION. Substantial completion shall not prejudice Tenant's
rights to require full completion of any remaining items of Work. However, if
Landlord notifies Tenant in writing that the Work is fully completed, and
Tenant fails to object thereto in writing fifteen (15) days thereafter
specifying reasonable detail the items of work needed to be completed and the
nature of work needed to complete said items, Tenant shall be deemed
conclusively to have accepted the Work as fully completed (or such portions
thereof as to which Tenant has not so objected).
5.3 LATENT AND PATENT DEFECTS. Landlord shall repair patent defects in the
Premises (except for defects in Tenant Improvements which are allocated to
Tenant under this Lease), provided Landlord is notified of the same within
three (3) months following the Commencement Date of the Term. Landlord shall
also repair latent defects in the Premises (except for defects in Tenant
Improvements which are allocated to Tenant under this Lease), provided
Landlord is notified of the same within twelve (12) months following the Term
Commencement Date. If such maintenance and repair is required because of the
negligence or willful misconduct of Tenant, Tenant shall reimburse Landlord
the cost of such maintenance and repair, except to the extent that Landlord
is entitled to reimbursement from insurance purchased by Landlord as part of
Operating Expenses.
THE PARTIES AGREE THAT THE PROVISIONS OF THIS WORK LETTER AGREEMENT
ARE HEREBY INCORPORATED BY THIS REFERENCE INTO THE LEASE FULLY AS THOUGH SET
FORTH THEREIN. In the event of any express inconsistencies between the Lease
and this Work Letter Agreement, the latter shall govern and control. Any
<PAGE>
default by a party hereunder shall constitute a default by that party under
the Lease, and said party shall be subject to the remedies and other
provisions applicable thereto under the Lease.
IN WITNESS WHEREOF Landlord and Tenant have executed this Agreement
as of the date first-above written.
Landlord: EAT/WORK DEVELOPMENT, LP, a California limited partnership
By: /s/ Michael Goldin
------------------------------
Michael Goldin, General Partner
Tenant: THE RODA GROUP VENTURE DEVELOPMENT COMPANY
L.L.C., a Delaware limited liability company
By: /s/ Daniel Miller
---------------------------
Daniel Miller
Its: Managing Director
---------------------------
<PAGE>
SCHEDULE 1
(which will be attached hereto and incorporated herein and initialled by
the parties when the plans are completed pursuant to Section 2A above)
<PAGE>
Schedule 1
AUGUST
1988
[CALENDAR]
7 Drawings to City Project to bid (Expedited Permit)
21 City response
25 City resubmittal review
31 Construction Begins
<PAGE>
Schedule 2
SEPTEMBER
1988
[CALENDAR]
1 City resubmittal review (Day 8)
8 Pull Permit
<PAGE>
[EXHIBIT E]
E A T / W O R K D E V E L O P M E N T
LEASE GUARANTY
THIS GUARANTY ("Guaranty") is executed and delivered as of 8/14, 1988, by
DANIEL MILLER, an individual, and ROGER STRAUCH, an individual (jointly and
severally "Guarantor") for the benefit of EAT/WORK DEVELOPMENT, a California
limited partnership ("Landlord"), with reference to the following facts:
RECITALS
A. Landlord and The Roda Group Venture Development Co., L.L.C., a
Delaware limited liability company ("Tenant") are parties to that certain
Commercial Office lease (the "Lease") dated as of 8/14, 1998, for
approximately 4800 rentable square feet (the "Premises") in the building
commonly known as the Eat/Work Development, located at 918 Parker Street,
Suite A-14, Berkeley, California (the "Property").
B. As a condition to executing the Lease, Landlord has required that
Guarantor execute and deliver this Guaranty.
AGREEMENT
1 GUARANTEE OF LEASE. In order to induce Landlord to execute the foregoing
Lease, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned parties
(collectively, jointly, and severally referred to as the "undersigned") do
hereby absolutely and unconditionally (subject to the limitations provided
herein), jointly and severally, guarantee to Landlord, its successors, and
assigns, the full performance and observance of all the covenants,
conditions, and agreements provided to be performed and observed by Tenant in
the Lease, including the prompt payment of the Rent and all other amounts
provided in the Lease to be paid by Tenant, and all obligations of Tenant
under any parking agreement, storage agreement, work agreement, or other
agreement between the parties now or hereafter entered into in connection
with said Lease or the Premises or Property thereunder; provided, however,
that Guarantor's exposure and liability hereunder shall be limited to a
maximum of ONE HUNDRED FORTY THOUSAND DOLLARS ($140,000).
2 WAIVER OF NOTICES. The undersigned hereby waives acceptance and notice of
acceptance of this Guaranty and notice of non-payment, non-performance, or
non-observance, and all other notices and all proof or demands.
3 WAIVER OF SURETYSHIP DEFENSES. The undersigned expressly agrees that its
obligations hereunder shall in no way be terminated, affected, or impaired by
reason of the granting by Landlord of any indulgences to Tenant or by reason
of the assertion against Tenant of any of the rights or remedies reserved to
Landlord pursuant to the provisions of said Lease or by the relief of the
Tenant from any of the Tenant's obligations under said Lease by operation of
law or otherwise, including the rejection of the Lease in a bankruptcy
proceeding, the undersigned hereby waiving all suretyship defenses.
4 MODIFICATION OF LEASE. The undersigned covenants and agrees that this
Guaranty shall remain and continue in full force and effect as to any
renewal, modification, or extension of the Lease made by the original Tenant,
whether or not the undersigned shall have received any notice of or consented
to such renewal, modification, or extension, except as provided in PARA 7.
5 JOINT AND SEVERAL LIABILITY. The undersigned agree that their liability
hereunder as to each shall be primary and that in any right of action which
shall accrue to the Landlord under the Lease the Landlord may, at its option,
proceed against the
EAT/WORK DEVELOPMENT CONTINUING GUARANTY
PAGE E-1 OF 3
<PAGE>
undersigned and the Tenant, jointly or severally, and may proceed against the
undersigned without having commenced any action against or having obtained
any judgement against the Tenant. Landlord may proceed against any one or
more Guarantors without proceeding against the others and may release any
Guarantor(s) or any security deposit, security interest, or letter of credit
without releasing the other Guarantors.
6 WAIVER OF STRICT PERFORMANCE. It is agreed that the failure of the
Landlord to insist in any one or more instances upon strict performance or
observance of any of the terms, provisions, or covenants of the Lease or this
Guaranty or to exercise any right therein or herein contained shall not be
construed or deemed to be a waiver or relinquishment for the future of such
term, provision, covenant, or right, but the same shall continue and remain in
full force and effect. Receipt by the Landlord of rent or other payments with
knowledge of the breach of any provision of the Lease shall not be deemed a
waiver of such breach or of this Guaranty.
7 TRANSFER OF LEASE. No assignment or other transfer of the Lease or any
interest therein shall operate to extinguish or diminish the liability of the
undersigned hereunder, except as set forth in PARA 4 above. The parties
expressly intend that this Guaranty shall apply to any transfer permitted
under the Lease without Landlord's prior written consent equally as to the
Lease. Notwithstanding the foregoing, this Guaranty shall not apply to any
renewal, modification, or extension of the Lease made by any party other than
the original Tenant, except only for the exercise of the option set forth in
Lease. Section 24 of the Lease and except to the extent that Landlord cannot
charge a new tenant rent sufficient to cover the cost of Tenant Improvements
requested by and provided to Tenant, then Guarantor agrees to continue to
guaranty that portion of the Rent attributable to such non-covered Tenant
Improvements.
8 APPLICATION OF LAWS. If the laws applied by the jurisdiction in which this
Guaranty is sought to be enforced require that the undersigned have any
rights not set forth herein, in order for this Guaranty to be valid or
enforceable, then such rights shall be deemed a part hereof, but only to the
extent necessary to make this Guaranty valid and enforceable.
9 ATTORNEYS' FEES. If either Landlord or Guarantor obtains a judgement
against the other party by reason of a breach of this Guaranty, the losing
party shall pay all reasonable attorneys' fees and costs incurred in any
collection or attempted collection of the obligations hereby guaranteed or in
enforcing this Guaranty.
10 SUCCESSORS AND ASSIGNS. This Guaranty shall be binding upon and inure to
the benefit of the parties and their respective heirs, administrators,
executors, successors, and assigns.
11 TERMINATION. If at any time Tenant can show that it has maintained a Net
Worth in excess of $300,000 for a period of at least three (3) months, then
this Guaranty shall no longer cover the Base Rent ($1.65/square foot/month)
portion of the Lease. If at any time Tenant can show that it has maintained a
Net Worth in excess of $600,000 for a period of at least three (3) months,
then this Guaranty shall terminate and Guarantor shall no longer be liable
for any obligation of the Lease. For the purposes of this section, Net Worth
shall mean Tenant's assets minus Tenant's liabilities with assets counted as
follows:
< -- ACCOUNTS RECEIVABLE: 80% OF BOOK VALUE
< -- FIXED ASSETS: 50% OF BOOK VALUE
< -- PREPAID AND DEFERRED CHARGES: 0% OF BOOK VALUE
< -- OTHER ASSETS: 0% OF BOOK VALUE
< -- INTANGIBLE ASSETS: 0% OF BOOK VALUE
< -- WORK IN PROGREES OR EQUIVALENT: 0% OF BOOK VALUE
< -- CASH AND OTHER LIQUID ASSETS: 100%
To implement the partial or full termination set forth in this section,
Guarantor or tenant shall provide Landlord with a signed statement from a
certified public
EAT/WORK DEVELOPMENT CONTINUING GUARANTY
PAGE E-2 OF 3
<PAGE>
accountant setting forth the Net Worth of Tenant. Landlord shall then have 30
days to contest such statement and shall have the right, through a certified
public accountant of Landlord's choosing, to examine the books of Tenant. Any
dispute under this section shall be finally settled by arbitration as set
forth in the Section 26 of the Lease.
11.1 REINSTATEMENT OF LEASE GUARANTY OBLIGATION. Notwithstanding anything
to the contrary in this Guaranty, Guarantor agrees that if the original
Tenant (I.E., The Roda Group, L.L.C.) shall dissolve, wind down, disband, or
cease to function as the legal person or entity which existed on the date of
the lease or of any such assignment, as the case may be, Guarantor's
obligations hereunder shall be reinstated in full, regardless of whether,
how, in what circumstances, or for what reason Landlord may theretofore have
agreed to suspend, waive, or terminate this Guaranty or discrete obligations
hereunder. Notwithstanding the foregoing, this Reinstatement of Lease
Guaranty Obligation shall not apply if the Lease has been duly assigned to
an assignee as provided in Section 6 of the Lease and who meets the
Termination criteria as set forth in this PARA 11.
12 MARITAL STATUS. Each of the undersigned has caused his spouse to join in
this Guaranty by signing below; and if no such spouse has signed, the
undersigned hereby represents and warrants that he is unmarried.
IN WITNESS WHEREOF, this Guaranty is executed this 14th day of August,
1998, at Berkeley,
GUARANTOR: DANIEL MILLER, an individual
/s/ Daniel Miller
--------------------------------------------
SPOUSE: --------------------------------------------
--------------------------------------------
[SPOUSE'S NAME TYPED OR PRINTED]
GUARANTOR: ROGER STRAUCH, an individual
/s/ Roger Strauch
--------------------------------------------
SPOUSE: /s/ Julie A. Kuehanyan
--------------------------------------------
--------------------------------------------
[SPOUSE'S NAME TYPED OR PRINTED]
EAT/WORK DEVELOPMENT CONTINUING GUARANTY
PAGE E-3 OF 3