California-San Francisco-444 Market Street Sublease - Charles Schwab & Co. Inc. and Scient Corp.
444 MARKET STREET
SAN FRANCISCO, CALIFORNIA
SUB-SUB-SUB-SUBLEASE
BASIC LEASE INFORMATION
Date: October 7. 1998
Sub-sub-sub-sublessor: CHARLES SCHWAB & CO., INC. a
California Corporation
Sub-sub-sub-sublessee: SCIENT CORPORATION, a California
Corporation
Premises: Entire 29th floor, comprising approximately
18,058 rentable square feet
Paragraph 1(a): Commencement Date: October 1, 1998
Paragraph 1(a): Termination Date: April 30th, 2001
Paragraph 2(a): Base Rent: $650.088.00 per annum
Paragraph 2(b): Additional Rent: Any increases in Operating Expenses over
and the 1998 calendar year and in Taxes over
the 1997/98 fiscal year.
Paragraph 2(b): Percentage Share: 2.98%
Paragraph 17: Sub-sub-sub-sublessee's SCIENT CORPORATION
Address for notices: * 444 Market Street
San Francisco, CA 94105
Attn: William Kurtz *
Paragraph 17: Sub-sub-sub-sublesseor's CHARLES SCHWAB & CO., INC.
Address for notices: * 101 Montgomery Street
San Francisco, CA 94014
Attn: Senior Vice President Administrative
Services
Paragraph 23: Letter of Credit/Security $400,000.00
Deposit:
Paragraph 24: Brokers:
Sub-sub-sub-sublessor's Colliers International
Broker: Two Embarcadero Center, Suite 1000
San Francisco, CA 94111
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Attn: Mr. Steven Corbitt
Mr Clint Holland
Sub-sub-sub-sublessee's The CAC Group
Broker: 255 California Street
San Francisco, CA 94104
The following exhibits are attached to this Sub-sub-sub-sublease and by
this reference made a part hereof:
Exhibit A- Sub-sub-sublease
Exhibit B - Plan of Premises
*Address for notices prior to Commencement Date is:
SCIENT CORPORATION
720 California Street
6th Floor
San Francisco, CA 94109
Attn: William Kurtz
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THE PROVISIONS OF THE SUB-SUB-SUB-SUBLEASE identified above in the
margin are for the purpose of providing a convenient reference to the provisions
in the Sub-sub-sub-sublease where the particular Basic Lease Information
appears. The foregoing Basic Lease Information is hereby incorporated into and
made a part of the Sub-sub-sub-sublease. Each reference in the Sub-sub-sub-
sublease to any of the terms described above shall have the meaning, and
incorporate the information, hereinabove set forth. In the event of any conflict
between any Basic Lease Information and the Sub-sub-sub-sublease, the Sub-sub-
sub-sublease shall control.
SUB-SUB-SUB-SUBLESSOR: SUB-SUB-SUB-SUBLESSEE:
CHARLES SCHWAB & CO., INC., SCIENT CORPORATION,
a California Corporation a California corporation
By: _____________________________ By:____________________________
Name: ___________________________ Name:__________________________
Its: ____________________________ Its:___________________________
By: ___________________________
Name: _________________________
Its: __________________________
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SUB-SUB-SUB-SUBLEASE
--------------------
THIS SUB-SUB-SUB-SUBLEASE dated October 7, 1998 is entered into by and between
CHARLES SCHWAB & CO., INC. (hereinafter referred to as "Schwab"), and SCIENT
CORPORATION (hereinafter referred to as "Scient") with respect to certain
premises in the building located at 444 Market Street, San Francisco, California
(the "Building").
RECITALS:
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A. Schwab is the Sub-sub-sublessee under that certain Sub-sub-sublease
dated December 1, 1996 entered into by and between PACIFIC BELL NETWORK
INTEGRATION, a California Corporation (hereinafter referred to as "PBNI'),
successor in interest to PACIFIC BELL DEVELOPMENT COMPANY, as Sub-sub-sublessor
and Schwab as Sub-Sub-sublessee, (the "Sub-sub-sublease") a copy of which is
attached hereto as Exhibit A, with respect to the premises described therein
(the "Sub-sub-subleased Premises").
B. PACIFIC BELL DEVELOPMENT COMPANY is the Sub-sublessee under that
certain Sub-sublease (the "Sub-sublease") dated July 9, 1996, entered into by
and between TIG INSURANCE COMPANY, a California corporation, ("TIG") as Sub-
sublessor and PACIFIC BELL NETWORK INTEGRATION as Sub-sublessee, a copy of which
is attached as Exhibit A to the Sub-sub-sublease (Exhibit A hereto), with
respect to the premises described therein (the "Sub-subleased Premises").
C. TIG is the Sublessee under that certain Sublease dated October 7, 1987,
entered into by and between SHAKLEE CORPORATION, a Delaware corporation
("Shaklee"), as Sublessor, and TIG INSURANCE COMPANY, a California corporation,
as Sublessee, as amended by that certain Amendment No. 1 to Sublease dated April
7, 1994, that certain Second Amendment to Sublease dated April 30, 1996, and
that certain Third Amendment to Sublease dated July 3, 1996 (the "Sublease"), a
copy of which is attached to the Sub-sublease as Exhibit A thereto, except for
the Amendments, which are attached to the Sub-sub-sublease as Exhibit B with
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respect to the premises described therein (the "Subleased Premises").
D. Shaklee is the Lessee under that certain Amended and Restated Office
Lease (the "Master Lease") dated June 25, 1985, by and between 444 MLHIRP
Partnership, a New York general partnership, as Lessor, and Shaklee, as Lessee,
an edited copy of which is attached to the Sublease as Exhibit A thereto. Market
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Front Associates, L.P. ("Master Lessor") is the successor-in-interest to 444
MLHIRP Partnership.
E. Scient desires to sub-sub-sub-sublease from Schwab, and Schwab is
prepared to sub-sub-sub-sublease to Scient, the sub-sub-sub-subleased Premises
as cross-hatched on Exhibit B attached hereto and by this reference made a part
hereof (hereinafter referred to as the "Premises").
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AGREEMENT:
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NOW, THEREFORE, in consideration of the premises and the mutual promises
contained herein, Schwab hereby sub-sub-sub-subleases to Scient, and Scient
hereby hires from Schwab, the Premises for the term and subject to the terms,
covenants, and conditions hereinafter set forth, to each and all of which Schwab
and Scient hereby mutually agree.
1. Term; Delivery of Possession.
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(a) The term of this Sub-sub-sub-sublease shall commence as of the
last to occur of (i) Schwab's delivery of the Premises to Scient, broom clean,
vacant of Schwab's employees, and free of Schwab's personal property (other than
personal property which Scient has, in advance, in writing agreed to accept
pursuant to the provisions of Section 1.(d) below); (ii) Schwab and Scient have
mutually executed and delivered this Sub-sub-sub-sublease and that certain Sub-
sub-sub-sub-sublease of even date herewith, pursuant to which Scient shall sub-
sub-sub-sub-sublease the entire twenty-eighth (28th) floor of the Building from
Schwab (the "Concurrent Sub-sub-sub-sub-sublease') and (iii) this Sub-sub-sub-
sublease has been approved to the extent required, by PBNI, TIG, Shaklee and
Master Lessor and the Concurrent Sub-sub-sub-sub-sublease has been approved to
the extent required by PBNI, ADP (defined in the Concurrent Sub-sub-sub-sub-
sublease), TIG, Shaklee and Master Lessor, to the extent required under the
Concurrent Sub-sub-sub-sub-sublease (such date being referred to herein as the
"Commencement Date") (the estimated Commencement Date being set forth in the
Basic Lease Information) and unless sooner terminated as hereinafter provided,
shall end on the Termination Date specified in the Basic Lease Information. If
for any reason whatsoever the Commencement Date has not occurred as of the
estimated Commencement Date set forth in the Basic Lease Information, this Sub-
sub-sub-sublease shall not be void or voidable, nor shall Schwab be liable to
Scient for any loss or damage resulting therefrom. No delay in the Commencement
Date shall operate to extend the term hereof.
(b) The Premises shall be delivered broom-clean and free of all
personal property; however, the Premises are otherwise leased by Schwab to
Scient without any representation or warranty, express or implied, of any kind
by Schwab, the Brokers named herein, or any of Schwab's other employees or
agents (including without limitation any warranty of habitability or fitness for
a particular use), in their "as-is, where-is" condition.
(c) Scient hereby acknowledges that it has had a full and fair
opportunity to review and inspect the condition of the Building and the Premises
and will not hold any of the above parties responsible therefor.
(d) Any personal property or cabling remaining in the Premises on the
Commencement Date shall be deemed abandoned by Schwab and may be demolished,
removed and/or reused by Scient without any liability to Schwab. Scient accepts
responsibility for and shall remove all existing cabling from the Premises upon
the expiration or earlier termination of this Sub-sub-sub-sublease or earlier,
if required by Master Lessor.
2. Rental.
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(a) Base Rent. From and after the Commencement Date, Scient shall pay
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to Schwab throughout the term of this Sub-sub-sub-sublease as rental for the
Premises the amount per annum specified in the Basic Lease Information as the
Base Rent, payable monthly in advance in 12 equal
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installments. The first month's rent shall be payable on execution of this Sub-
sub-sub-sublease by Scient and thereafter, the rental shall be payable on or
before the fast day of each and every successive calendar month of the term of
this Sub-sub-sub-sublease.
(b) Additional Rent. Scient shall pay Schwab in equal monthly
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installments as Additional Rent Scient's percentage share, as specified in the
Basic Lease Information, of the amount by which Operating Expenses for such year
exceed Operating Expenses for the 1998 calendar year, as "Operating Expenses"
are defined in paragraph 5.1 of the Master Lease (incorporated by reference in
paragraph 4 of this Sub-sub-sub-sublease); and Scient shall pay Schwab in equal
monthly installments as Additional Rent Scient's percentage share of the mount
by which Taxes for such year exceed Taxes for the 1997/98 fiscal year (the "Tax
Base Year"), as "Taxes" are defined in paragraph 5.1 of the Master Lease
(incorporated by reference in paragraph 4 of this Sub-sub-sub-sublease). Scient
shall pay monthly one-twelfth (1/12th) of the Additional Rent to be paid for
such year hereunder, based on the Master Lessor's estimate of Operating Expenses
and Taxes; and after the end of a calendar year, in the case of Operating
Expenses, or a fiscal year, in the case of Taxes, promptly after receipt by
Scient of a statement of actual Operating Expenses or Taxes, Scient shall pay
any additional amount owing on account of Operating Expenses or Taxes, or Schwab
shall refund any amount owed to Scient on account of Operating Expenses or
Taxes, as the case may be, in accordance with the terms of the Master Lease.
Scient acknowledges that TIG may not receive from Shaklee, and hence PBNI may
not receive from TIG, and hence Schwab may not receive from PBNI, and hence
Scient may not receive from Schwab, notice of the estimated increase in
Additional Rent for any calendar year until some months after the fast of such
calendar year, and Scient agrees that, upon receipt of such notice from Schwab,
Scient shall pay Schwab in a lump sum all payments designated in such notice as
payments owing for estimated increases in Additional Rent not previously paid
and attributable to the period prior to the date of payment, such lump sum
payment being payable with the monthly installment of Base Rent that is next
due. Schwab agrees to forward to Scient a copy of any such notice applicable to
the term of this Sub-sub-sub-sublease or the base year that Schwab receives
within ten (10) business days; provided, however, that failure to do so shall
not be a default on the part of Schwab. Schwab and Scient acknowledge that
Scient's percentage share has been determined by dividing the net rentable area
of the Premises, as specified in the Basic Lease Information, by 605,459 square
feet, which is the net rentable area of the Building. Scient shall also pay
Schwab, as Additional Rent, (i) for any special services Schwab, PBNI, TIG,
Shaklee or Master Lessor may agree to provide in connection with this Sub-sub-
sub-sublease and (ii) those amounts and charges set forth in paragraphs 7 and 7A
below.
(c) Notwithstanding the definition of Taxes in paragraph 5.1 of the
Master Lease, for purposes of this Sub-sub-sub-sublease, the amount of Taxes
during the Tax Base Year shall be deemed to be the amount of Taxes incurred
during the Tax Base Year, reduced by any reduction obtained under California
Revenue and Taxation Code, Section 51 ("Proposition 8"), attributable to the
value of the real property on which the Building is located, the Building, the
parking facilities located on the real property on which the Building is
located, and all tenant improvements. If, in any comparison year subsequent to
the Tax Base Year (the "Adjustment Year"), the amount of Taxes decreases as a
result of a Proposition 8 reduction, then for purposes of that Adjustment Year
and all subsequent comparison years, the Taxes for the Tax Base Year shall be
deemed to be decreased by an amount equal to the decrease in Taxes in the
Adjustment Year. Conversely, if the Taxes thereafter are increased during any
comparison year subsequent to the Adjustment Year (the "Readjustment Year"), as
a result of the failure to obtain a Proposition 8 reduction that is at least as
large as the Proposition 8 reduction obtained during the Adjustment Year, then
for purposes of the Readjustment Year and all subsequent comparison years, the
Taxes for the Tax Base Year shall be increased by an amount equal to the
increase in Taxes during such Readjustment Year that resulted from the failure
to obtain a Proposition 8 reduction at least as large as the
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Proposition 8 reduction obtained during the Adjustment Year. Schwab and Scient
acknowledge that this Paragraph 2(c) is not intended in any way to affect (i)
the statutory two percent (2 %) annual increase in Taxes (as such statutory
increase may be modified by subsequent legislation), or (ii) the inclusion or
exclusion of Taxes pursuant to the terms of Article XIII A of the California
Constitution, commonly referred to as Proposition 13.
(d) Notwithstanding anything elsewhere in this Sub-sub-sub-sublease to
the contrary, Scient shall not be required to pay any increased Taxes to the
extent that such increase has resulted from a "change in ownership" of the
Building, as defined in Division i, Chapter 2 of the California Revenue &
Taxation Code, or "new construction", as defined in Division 1, Chapter 3 of the
California Revenue & Taxation Code.
(e) In the event the Commencement Date is a day other than the first
day of a calendar month or the term of this Sub-sub-sub-sublease ends on a day
other than the last day of a calendar month, then the monthly rental for the
first and last fractional months of the term hereof shall be appropriately
prorated.
(f) Rental shall be paid to Schwab, without deduction or offset, in
lawful money of the United States of America at Schwab's address for notices
hereunder or to such other person or at such other place as Schwab may from time
to time designate in writing. All mounts of money payable by Scient to Schwab
hereunder, if not paid when due and after 5 days' written notice from Schwab,
shall bear interest from 5 days after such notice is given until paid at the
rate of 10% per annum or, if a higher rate is legally permissible, at the
highest rate legally permitted.
3. Use. The Premises shall be used for general office purposes and no
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other purpose. Scient shall not do or permit to be done in or about the
Premises, nor bring or keep or permit to be brought or kept therein, anything
that is prohibited by paragraph 7 of the Master Lease.
4. Other Sub-sub-sub-sublease Terms.
---------------------------------
(a) The following terms and provisions of the Master Lease are hereby
incorporated in this Sub-sub-sub-sublease by this reference: paragraphs 2 (but
not ~e third and fourth sentences thereof), 5.1(a), 5.1(b) (first paragraph,
only), 5.3, 5.4, 5.5, 5.7, 6, 7 (other than the first sentence), 8(a)-(f)
(except that paragraph 8(e) is modified pursuant to that certain letter
agreement dated September 23, 1987, between Master Lessor and Shaklee ("Letter
Agreement") attached to the Sub-sub-sublease as Exhibit D, and Scient hereby
understands and accepts that Master Lessor, pursuant to TIG's original HVAC
design, will maintain indoor conditions with respect to the Premises no higher
than 75 degrees Fahrenheit dry bulb during the cooling season) and (h)-(j) (but
not the last sentence of 8(h) or the portion of 8(i) deleted from Exhibit A to
the Sublease), 10, 11 (but not 11.1 or the sentences stricken on Exhibit A to
the Sublease), 12, 15, 17 (but not the last sentence thereof), 18, 19, 20, 21,
22, 23, 24, 25, 27, 30.2(2), 30.2(4) (but not the second paragraph thereof), 33,
36, 37, 39, 40, 43, 44, 45, 50 (as to Exhibits C-H thereto, only). The Sublease
(except Paragraphs 5,11 and 13 and Exhibit C thereto), including paragraphs 1
and 2 of the Second Amendment to Sublease, but excluding all of Amendment No. 1
to Sublease, is incorporated except as may be inconsistent with this Sub-sub-
sub-sublease. The Sub-sublease (including Exhibit C, that certain Letter
Agreement attached thereto) is incorporated except as may be inconsistent with
this Sub-sub-sub-sublease. The Sub-sub-sublease is incorporated except as may be
inconsistent with this Sub-sub-sub-sublease. Except as is specified in this Sub-
sub-sub-sublease, this subletting is upon and subject to all of the terms of the
Master Lease, the Sublease, the Sub-sublease and the Sub-sub-sublease so
incorporated in this Sub-sub-sub-sublease. Such incorporated terms shall
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constitute the terms of this Sub-sub-sub-sublease as between Schwab and Scient
as "Landlord" and "Tenant," respectively, except that paragraph 5.1 of the
Master Lease shall be incorporated reading "Landlord" to refer to the Master
Lessor insofar as the calculation of Operating Expenses and Taxes is concerned,
and paragraphs 2, 18, and 26 of the Master Lease shall be incorporated reading
"Landlord" to refer to Shaklee, Master Lessor, TIG, PBNI and Schwab. Scient
shall perform and observe for the benefit of Shaklee, Master Lessor, TIG, PBNI
and Schwab each and all of the conditions, covenants, and obligations to be
performed by Shaklee as Tenant under the Master Lease, by TIG under the
Sublease, by PBNI under the Sub-sublease and by Schwab under the Sub-sub-
sublease, to the extent said conditions, covenants, and obligations are
incorporated in this Sub-sub-sub-sublease and are applicable to the Premises.
Master Lessor, Shaklee, TIG, and PBNI shall have the same fights and privileges
under this Sub-sub-sub-sublease that they have under the Master Lease, Sublease,
Sub-sublease and the Sub-sub-sublease, to the extent such rights and privileges
are incorporated in this Sub-sub-sub-sublease and are applicable to the
Premises, and shall have the fight, but not the obligation, to enforce such
conditions, covenants, and obligations directly against Scient. Scient and
Schwab covenant not to take any action or do or perform any act or fail to
perform any act on the Premises that would result in the failure or breach of
any of the terms, conditions, covenants, agreements, provisions or obligations
of Shaklee under the Master Lease, of TIG under the Sublease, of PBNI under the
Sub-sublease, or of Schwab under the Sub- sub-sublease. Notwithstanding the
incorporation herein of the foregoing provisions of the Master Lease, Scient
acknowledges that Schwab shall have no responsibility or obligation with respect
to (i) furnishing any services under paragraph 8 of the Master Lease, including,
but not limited to, utilities, or (ii) making any alterations, repairs, or
replacements under paragraphs 11, 12, or 15 of the Master Lease, and the sole
responsibility of Schwab thereunder shall be as described in paragraph 28(g)
below, to use reasonable efforts, without out-of-pocket cost to Schwab, to cause
Master Lessor, Shaklee, TIG or PBNI to furnish such services or make such
alterations, repairs, or replacements as are required under the Master Lease,
Sublease, Sub-sublease or Sub-sub-sublease. Any notices given to Master Lessor
in connection with paragraphs 8, 11, 12, or 15 of the Master Lease, or any other
provisions of this Sub-sub-sub-sublease, shall also simultaneously be given to
Schwab, PBNI, TIG and Shaklee, whether or not Schwab, PBNI, TIG or Shaklee has
any responsibility to take action in response to such notices. Scient shall
indemnify and save Schwab, PBNI, TIG and Shaklee harmless against any loss,
damage, or injury that Schwab, PBNI, TIG or Shaklee may suffer or incur under
the Master Lease, Sublease, Sub-sublease or Sub-sub-sublease as the result of
any breach by Scient of its obligations under this Sub-sub-sub-sublease.
(b) Schwab and Scient acknowledge that certain of the provisions of
the Master Lease enumerated above that are not incorporated in this Sub-sub-sub-
sublease have been deleted from the copy of the Master Lease attached to the
Sublease as Exhibit A, in order to protect the confidential aspects of the
contractual relationship between Shaklee and Master Lessor, and subject to all
of the terms and conditions stated therein. Schwab hereby represents and
warrants that, to the knowledge of Schwab, the provisions so deleted are not
inconsistent with the incorporated terms of the Master Lease and shall not
affect Scient's rights and obligations under this Sub-sub-sub-sublease. Except
for such deletions and the portions of Exhibit A to the Sublease that have been
stricken as described in subparagraph (a), above, Schwab represents and warrants
that, to Schwab's knowledge, Exhibit A to the Sublease is a true and correct
copy of the Master Lease. Scient agrees not to disclose the contents of the
Master Lease or any portion thereof to any third parties, other than its counsel
and the persons listed as brokers in the Basic Lease Information, without the
prior written consent of Schwab, PBNI, TIG and Shaklee.
(c) Any default by Scient under the terms of this Sub-sub-sub-sublease
shall also constitute a default by Scient under the terms of the Concurrent Sub-
sub-sub-sub-sublease and vice-versa and shall entitle Schwab to exercise its
remedies under either or both of the Sub-sub-sub-sublease or the Concurrent Sub-
sub-sub-sub-sublease.
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5. [INTENTIONALLY OMITTED]
6. Alterations. Scient shall not make any alterations, additions, or
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improvements to the Premises, or attach any fixtures or equipment thereto,
without the prior written consent of Schwab, PBNI, Master Lessor, Shaklee, and
TIG. Scient shall not make any alterations, additions, or improvements to the
Premises, or attach any fixtures or equipment thereto that would violate any
provisions of the Master Lease, Sublease, Sub-sublease or Sub-sub-sublease. Any
such alterations, additions or improvements, or fixtures or equipment, shall be
subject to, without limitation, Paragraph 2 of the Second Amendment to the
Sublease. Schwab acknowledges that Scient intends to construct certain
improvements within the Premises Scient Improvements") following the
Commencement Date and will not unreasonably withhold its consent to construct
the Scient Improvements.
7. Excess Electrical Usage. Scient agrees to pay Schwab, in lieu of
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any payment to Schwab, PBNI, TIG, Shaklee or the Master Lessor of any direct
charges for electrical usage in excess of the electrical usage included within
the definition of "Operating Expenses" under the Master Lease ("Excess
Electrical Usage"), a fiat fee of $135.00 per month, regardless of the amount,
if any, of Scient's actual Excess Electrical Usage, and without any adjustment.
Without limiting the generality of the foregoing, such fiat fee shall not be
adjusted to reflect any changes in utility rates or the actual amount of Excess
Electrical Usage in the Premises.
7A. Other Charge. Notwithstanding anything in this Sub-sub-sub-
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sublease to the contrary, Scient shall pay Schwab for those charges incurred
during the term of this Sub-sub-sub-sublease pursuant to paragraphs 2.d(1), (2)
and 5 of that certain Agreement Regarding Improvements dated as of February ___,
1997 between Master Lessor, Shaklee and Schwab. Scient acknowledges receipt of a
copy of said agreement.
8. Fitness Center and Cafeteria. Scient acknowledges that Schwab is
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not entitled to any memberships in the fitness center located on the third floor
of the Building (the "Fitness Center"). Scient acknowledges that Shaklee has
reserved the fight to close or otherwise limit access to the Fitness Center or
the cafeteria located on the second floor of the Building (the "Cafeteria"), or
to transfer ownership or operation of either facility, at any time and in its
sole discretion. In the event the Cafeteria or Fitness Center should close or be
made unavailable, or in the event of a transfer of ownership or operation of
either facility, all Scient's fights, if any, to use of such facility shall
terminate.
9. Signage. Schwab agrees to use reasonable efforts to obtain the
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necessary approvals for Scient to place identification signs in the Building.
Placement of such signs shall in any event be limited to the elevator lobbies of
the floor occupied by Scient and the directory located in the ground floor lobby
of the Building.
10. Parking. Scient acknowledges that Schwab makes no representations
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regarding the availability of parking stalls in the Building garage for use by
Scient. Notwithstanding the foregoing, Schwab agrees that it will make available
to Scient its fights, if any, to parking stalls in the Building and will make
reasonable efforts without out-of-pocket costs to Schwab to assist Scient in
obtaining additional stalls up to a total of seven (7) stalls. Scient shall pay
for any parking stalls it obtains at the then-prevailing market rate for parking
in the Building garage and such use shall be subject to the prevailing terms and
conditions imposed by garage management. Scient shall pay Master Lessor, Shaklee
or garage management (as appropriate) directly for such parking, if any, monthly
upon invoicing.
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11. [INTENTIONALLY OMITTED]
12. Waiver and Indemnification.
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(a) Neither Shaklee, Master Lessor, TIG, PBNI nor Schwab shall be
liable or responsible in any way for, and Scient hereby waives all claims
against Shaklee, Master Lessor, TIG, PBNI and Schwab with respect to or arising
out of, any death or injury of any nature whatsoever that may be suffered or
sustained by Scient or any employee, licensee, invitee, guest, agent, or
customer of Scient or any other person, from any causes whatsoever, or any loss
or damage or injury to any property outside or within the Premises belonging to
Scient or its employees, agents, customers, licensees, invitees, guests, or any
other person, except, as to Schwab, to the extent such injury or damage is
caused by the negligence or willful act or omission of Schwab or its employees,
agents, customers, licensees, invitees, or guests; and except, as to PBNI, to
the extent such injury or damage is caused by the negligence or willful act or
omission of PBNI or its employees, agents, customers, licensees, invitees, or
guests; and except, as to TIG, to the extent such injury or damage is caused by
the negligence or willful act or omission of TIG or its employees, agents,
customers, licensees, invitees, or guests; and except, as to Shaklee, to the
extent such injury or damage is caused by the negligence or willful act or
omission of Shaklee or its employees, agents, customers, licensees, invitees, or
guests; and except, as to Master Lessor, to the extent such injury or damage is
caused by the negligence or willful act or omission of Master Lessor or its
employees, agents, customers, licensees, invitees, or guests.
(b) Scient shall hold Shaklee, Master Lessor, TIG, PBNI and Schwab
harmless from and defend and indemnify Shaklee, Master Lessor, TIG, .PBNI and
Schwab against any and all losses, damages, claims, or liability for any damage
to any property or injury, illness, or death of any person (i) occurring in or
on the Premises, or any part thereof, arising at any time and from any cause
whatsoever except, as to Schwab, to the extent caused by the negligence or
willful act or omission of Schwab or its employees or agents; except, as to
PBNI, to the extent caused by the negligence or willful act or omission of PBNI
or its employees or agents; except, as to TIG, to the extent caused by the
negligence or willful act or omission of TIG or its employees or agents; except,
as to Shaklee, to the extent caused by the negligence or willful act or omission
of Shaklee or its employees or agents; and except, as to Master Lessor, to the
extent caused by the negligence or willful act or omission of Master Lessor or
its employees or agents; and (ii) occurring in, on, or about any part of the
Building other than the Premises, when such damage, injury, illness, or death
shall be caused in whole or in part by the negligence or willful act or omission
of Scient or its employees, agents, customers, licensees, invitees, or guests.
(c) The provisions of this paragraph 12: (i) are subject and
subordinate to the provisions of paragraph 14 below; and (ii) shall survive the
termination of this Sub-sub-sub-sublease with respect to any damage, injury,
illness, or death occurring prior to such termination.
13. Insurance.
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(a) Scient shall, at its sole cost and expense, obtain and keep in
force during the term of this Sub-sub-sub-sublease fire and extended coverage
insurance on all improvements, fixtures, furnishings, and equipment in and upon
the Premises in an amount not less than one hundred percent (100%) of the full
replacement cost (without deduction for depreciation) thereof. All amounts that
shall be received under the insurance specified in this paragraph shall first be
applied to the payment of the cost of repair or replacement of any fixtures,
furnishings, equipment, and improvements that are damaged or destroyed, or, if
this Sub-sub-sub-sublease terminates prior to such repair or replacement being
made,
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paid over to Schwab, to the extent that the improvements or fixtures damaged or
destroyed would have become Schwab's property pursuant to paragraph 25 hereof,
provided, however, that Scient shall be entitled to that portion of said
insurance proceeds equal to the unamortized value of said improvements and
fixtures.
(b) Scient shall, at its sole cost and expense, obtain and keep in
force during the term of this Sub-sub-sub-sublease commercial general liability
insurance with limits of not less than Five Million Dollars ($5,000,000) per
occurrence for injury to or illness or death of persons occurring in, upon, or
about the Premises (or the premises subleased by Scient from Schwab under the
Concurrent Sub-sub-sub-sub-sublease) or the Building or damage to property
occurring in, upon, or about the Premises or the Building. All such insurance
shall insure the performance by Scient of the indemnity agreement as to
liability for injury to or illness or death of persons and damage to property
set forth in paragraph 12 hereof.
(c) All insurance required under this paragraph and all renewals
thereof shall be issued by an insurance company licensed to do business in
California and maintaining no less than an A-31I Best's rating and approved by
Master Lessor, Shaklee, TIG, PBNI and Schwab, which approvals shall not be
withheld unreasonably if the insurance and company meet all requirements of the
Sub-sub-sub-sublease, Sub-sub-sublease, Sub-sublease, Sublease and Master Lease.
Each policy shall expressly provide that the insurer shall give not less than 45
days' prior written notice to Master Lessor, Shaklee, TIG, PBNI and Schwab prior
to cancelling or altering the policy in a way that would affect the coverage,
limits or substantive coverage terms affecting the Premises (an "Alteration").
Scient shall give Master Lessor, Shaklee, TIG, PBNI and Schwab 45 days' prior
written notice of any cancellation or Alteration. All insurance under this
paragraph shall name Master Lessor, Shaklee, TIG, PBNI and Schwab as additional
insureds, shall be primary and noncontributing with any insurance that may be
carried by Master Lessor, Shaklee, TIG, PBNI or Schwab, and shall expressly
provide that Master Lessor, Shaklee, TIG, PBNI and Schwab shall be named as
additional insureds by endorsement to the policy or policies, and, as such,
shall be entitled to recover under the policy for any loss, injury, or damage to
Master Lessor, Shaklee, TIG, PBNI, Schwab or the employees or contractors of any
of them arising out of this Sub-sub-sub-sublease. Upon the Commencement Date and
upon annual renewal of the policy or policies throughout the term of this Sub-
sub-sub-sublease, each such policy or a duplicate or certificate of insurance,
and endorsement to the policy or policies, evidencing such coverage shall be
delivered to Master Lessor, Shaklee, TIG, PBNI, and Schwab for retention by each
of them. In the event that Scient shall fail to insure or shall fail to furnish
to Master Lessor, Shaklee, TIG, PBNI and Schwab any such policy, duplicate
policy, or certificate and endorsement to the policy or policies as herein
required, Master Lessor, Shaklee, TIG, PBNI or Schwab may from time to time
effect such insurance for the benefit of Scient, Master Lessor, Shaklee, TIG,
PBNI, Schwab or any or all of them for a period not exceeding one year, and any
premium paid by Master Lessor, Shaklee, TIG, PBNI or Schwab shall be recoverable
from Scient as additional rent on demand.
14. Waiver of Subrogation. Schwab hereby waives all claims against Scient
---------------------
for loss or damage to the extent that such loss or damage is insured against
under any insurance policy insuring Schwab, or would have been insured against
under any insurance policy required to be maintained by Schwab under the Sub-
sub-sublease had such policy been obtained, except to the extent that such
waiver would impair coverage under any such insurance policy, and except that
Schwab does not waive any claims it may have with respect to any deductible
amount under any such policy. Scient waives all claims against Shaklee, Master
Lessor, TIG, PBNI and Schwab for loss or damage to the extent such loss or
damage is insured against under any insurance policy insuring Scient, or would
have been insured against under any insurance policy required to be maintained
by Scient under this Sub-sub-sub-sublease had such
11
<PAGE>
policy been obtained, or would have been insured against but for any deductible
amount under any such policy, except to the extent that such waiver would impair
coverage under any such insurance policy, and except that Scient does not waive
any claims against Schwab it may have with respect to any deductible amount
under any such policy. Schwab and Scient shall each, prior to or immediately
after the execution of this Sub-sub-sub-sublease, use best efforts to obtain
from each insurer under all insurance policies now or hereafter existing during
the term of this Sub-sub-sub-sublease and purchased by either of them insuring
or covering any portion of the Building or the Premises, the contents thereof,
or any operations therein, a waiver of all fights of subrogation that the
insurer might otherwise, if at all, have against the other party to this Sub-
sub-sub-sublease.
15. Assignment and Subletting.
--------------------------
(a) Except as set forth in this paragraph, Scient shall not: (i)
assign, encumber, or otherwise transfer this Sub-sub-sub-sublease, the term or
estate hereby granted, or any interest hereunder; (ii) permit the Premises or
any part thereof to be used by anyone other than Scient (whether as licensee,
permittee, or otherwise); or (iii) sublet or offer or advertise for subletting
the Premises or any part thereof. Any attempted assignment, encumbrance,
transfer, or sublease not done in accordance with the provisions of this
paragraph shall be voidable and, at Schwab's election, shall constitute a
default hereunder.
(b) If at any time during the term hereof Scient desires to sublet
all or any part of the Premises, then Scient shall submit to Schwab, PBNI, TIG
and Shaklee, in writing, a notice of intent to assign or sublease, setting
forth: (i) the proposed effective date of the assignment or sublease; (ii) the
name of the proposed subtenant or assignee (collectively hereinafter,
"subtenant/assignee"); and (iii) the nature of the proposed subtenant/assignee's
business to be carried on in the Premises. Such notice shall be accompanied by
(x) such reasonable financial information as Schwab, PBNI, TIG or Shaklee may
request concerning the proposed subtenant/assignee, including recent financial
statements and bank references; and (y) a conformed or photostatic copy of the
proposed sublease or assignment agreement (or, if not yet available, a
description of the contemplated form of agreement).
(c) In the event that Scient complies with the provisions of
subparagraph (b), Schwab's consent to a proposed sublease or assignment, subject
to approval by PBNI, TIG and Shaklee, shall not be unreasonably withheld. Schwab
shall respond to Scient's notice to sublet within eighteen (18) business days of
receipt by Schwab of all information required herein concerning the proposed
subtenant or assignee. Scient shall promptly reimburse Schwab for Schwab's,
PBNI's, TIG's and Shaklee's reasonable out-of-pocket costs actually incurred in
reviewing the proposed sublease or assignment, including reasonable attorneys'
fees following the demand therefor accompanied by reasonable backup
documentation. In determining whether to grant or withhold such consent, Schwab,
PBNI, TIG and Shaklee may consider any reasonable factor. Without limiting what
may be construed as a reasonable factor, it is hereby agreed that any one of the
following factors will be reasonable grounds for disapproval of a proposed
assignment or sublease:
(i) The proposed subtenant/assignee does not, in the
reasonable judgment of Schwab, PBNI, TIG or Shaklee, have sufficient
financial worth in view of the responsibility involved;
(ii) The proposed subtenant/assignee does not, in the
reasonable judgment of Schwab, PBNI, TIG or Shaklee, have a good reputation
as a tenant of property;
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<PAGE>
(iii) Schwab, PBNI, TIG or Shaklee has received from any prior
"" lessor of the proposed subtenant/assignee a significant negative report
concerning such prior lessor's experience with the proposed
subtenant/assignee as a tenant;
(iv) Schwab, PBNI, TIG or Shaklee has been involved in a
previous landlord/tenant dispute with the proposed subtenant/assignee;
(v) The proposed subtenant/assignee is not, in the reasonable
judgment of Schwab, PBNI, TIG or Shaklee, of the type, character, and
quality consistent with the high quality and prestigious image of the
Building;
(vi) In the reasonable judgment of Schwab, PBNI, TIG or
Shaklee, the proposed assignment or sublease would violate paragraph 7 or
16 of the Master Lease;
(vii) The use of the Premises by the proposed subtenant/assignee
would violate some applicable law, ordinance, or regulation;
(viii) The proposed assignment or sublease would create a
vacancy elsewhere in the Building;
(ix) The proposed subtenant/assignee is a person with whom
Schwab, PBNI, TIG or Shaklee is negotiating to lease space in the Building
comparable in both length of term and net rentable square footage to the
space Scient is seeking to assign or sublet;
(x) The proposed subtenant/assignee is in the business of
manufacturing or in the general business of selling nutritional
supplements, household or personal care products, gourmet foods, or
flowers, or deals in any other product lines that Shaklee manufactures or
sells, or plans to manufacture or sell as of the date of the proposed
sublease or assignment, or is in the business of marketing any such
merchandise through direct sale or direct mail, at the time of the proposed
assignment or sublease;
(xi) In the case of a proposed sublease, the proposed sublease
would cause there to be more than one subtenant of the Subleased Premises,
the Sub-subleased Premises the Sub-sub-subleased Premises, or the Premises;
(xii) The proposed assignment or sublease fails to include all
of the terms and provisions required to be included therein pursuant to
this paragraph 15;
(xiii) Scient is in default of any of its obligations under this
Sub-sub-sub-sublease, or has defaulted under this Sub-sub-sub-sublease on
three or more occasions during the twelve months preceding the date Scient
requests Schwab's consent to the proposed assignment or sublease; or
(xiv) Shaklee, TIG or PBNI shall not consent to the proposed
assignment or sublease.
(d) The instrument by which assignment .or subletting is accomplished
shall (i) expressly provide that the subtenant/assignee shall perform and
observe all the agreements, covenants, and conditions to be performed and
observed by Scient under this Sub-sub-sub-sublease (except as to rent and
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<PAGE>
term or as otherwise agreed to by Schwab); (ii) be expressly subject and
subordinate to each and every provision of this Sub-sub-sub-sublease; (iii) have
a term that expires on or before the expiration of the term of this Sub-sub-sub-
sublease; (iv) provide that if Shaklee, Master Lessor, TIG, PBNI or Schwab
succeeds to Scient's position as landlord vis-a-vis the subtenant/assignee,
neither Shaklee, Master Lessor, TIG, PBNI nor Schwab shall be liable to such
subtenant/assignee for advance rental payments, rental deposits, or other
payments that have not actually been delivered to Shaklee, TIG, PBNI or Schwab
by Scient; and (v) provide that Scient or the subtenant/assignee shall reimburse
Schwab for any additional costs or expenses incurred by Schwab for repairs or
maintenance or otherwise as a result of the change in occupancy.
(e) No assignment or sublease shall be valid, and no
subtenant/assignee shall take possession of the Premises or any part thereof,
until an executed counterpart of the assignment or sublease has been delivered
to Schwab, PBNI, TIG and Shaklee.
(f) Notwithstanding Schwab's consent, no subletting or assignment
shall release or otherwise alter Scient's obligations to pay the rent and to
perform all other obligations to be performed by Scient hereunder. The
acceptance of rent by Schwab from any other person shall not be deemed to be a
waiver by Schwab of any provision hereof. Consent to one assignment or
subletting shall not be deemed consent to any subsequent assignment or
subletting. If any assignee of Scient or any successor of Scient defaults in the
performance of any of the terms hereof, Schwab may proceed directly against
Scient without the necessity of exhausting remedies against such assignee or
successor.
(g) In the event that Schwab assigns, transfers, or conveys its
interest in the Sub-sub-sublease, and provided that the instrument of
assignment, transfer, or conveyance shall expressly require the assignee or
transferee to assume all such liabilities and obligations, all liabilities and
obligations on the part of Schwab under this Sub-sub-sub-sublease shall
terminate. Scient agrees to attorn to such assignee or transferee.
16. Holdover. If Scient remains in possession of the Premises after
---------
expiration, but not earlier termination, of this Sub-sub-sub-sublease, all of
the terms, covenants, and agreements hereof shall continue to bind Scient to the
extent applicable, except that, if Scient remains in possession without Schwab's
written consent, then: (a) the monthly rent shall be two (2) times the monthly
rent payable for the last month of the Sub-sub-sub-sublease term, prorated on a
daily basis for each day Scient remains in possession, and (b) Scient shall
indemnify Schwab against any and all claims, losses, and liabilities for
damages, consequential or otherwise, resulting from Scient's failure to
surrender possession, including without limitation any claims by PBNI, TIG,
Shaklee, Master Lessor or any succeeding sublessee.
17. Notices. All notices and demands that may or are required to be given
--------
by either party to the other hereunder shall be in writing and shall be deemed
to have been fully given when delivered by reputable overnight courier, or when
deposited in the United States mail, certified or registered, postage prepaid,
and addressed as follows: to Scient at the address specified in the Basic Lease
Information, or to such other place as Scient may from time to time designate in
a notice to Schwab; to Schwab at the address specified in the Basic Lease
Information, or to such other place as Schwab may from time to time designate in
a notice to Scient; or, in the case of Scient, delivered to Scient at the
Premises. Scient acknowledges that it may receive notices at the Premises from
PBNI, TIG, Shaklee, or Master Lessor. Scient hereby appoints as its agent to
receive the service of all dispossessory or distraint proceedings and notices
thereunder the person in charge or occupying the Premises at the time, and, if
no person shall be in charge of or occupying the same, then such service may be
made by attaching the same on the main entrance of the Premises.
14
<PAGE>
18. Subordinate to Master Lease, Sublease, Sub-sublease and Sub-sub-
----------------------------------------------------------------
sublease.
---------
(a) This Sub-sub-sub-sublease is and shall be at all times subject
and subordinate to all of the terms and conditions of, and all fights of Master
Lessor under, the Master Lease. Without limiting the generality of the
foregoing, any termination of the Master Lease prior to the end of the term of
this Sub-sub-sub-sublease shall terminate this Sub-sub-sub-sublease.
(b) This Sub-sub-sub-sublease is and shall be at all times subject
and subordinate to all of the terms and conditions of, and all fights of Shaklee
under, the Sublease. Without limiting the generality of the foregoing, any
termination of the Sublease prior to the end of the term of this Sub-sub-
sublease shall terminate this Sub-sub-sub-sublease.
(c) This Sub-sub-sub-sublease is and shall be at all times subject
and subordinate to all of the terms and conditions of, and all fights of TIG
under, the Sub-sublease. Without limiting the generality of the foregoing, any
termination of the Sub-sublease prior to the end of the term of this Sub-sub-
sub-sublease shall terminate this Sub-sub-sub-sublease.
(d) This Sub-sub-sub-sublease is and shall be at all times subject
and subordinate to all of the terms and conditions of, and all fights of PBNI
under, the Sub-sub-sublease. Without limiting the generality of the foregoing,
any termination of the Sub-sub-sublease prior to the end of the term of this
Sub-sub-sub-sublease shall terminate this Sub-sub-sub-sublease. Schwab covenants
to do all acts reasonably necessary and perform all obligations required to be
performed by it under the Sub-sub-sublease, Sub-sublease, Sublease and the
Master Lease (insofar as incorporated into the Sub-sub-sub-sublease), except
insofar as such acts or obligations are required to be performed by Scient
hereunder; and Schwab covenants not to cancel or terminate, or suffer, consent
or agree to the cancellation or termination of, the Sublease, Sub-sublease, Sub-
sub-sublease during the term of this Sub-sub-sub-sublease, so long as Scient is
not in default of this Sub-sub-sub-sublease beyond any applicable cure period.
(e) If PBNI, TIG, Shaklee or Master Lessor succeeds to Schwab's
position as landlord vis-a-vis Scient, neither PBNI, TIG, Shaklee nor Master
Lessor shall be liable to Scient for advance rental payments, rental deposits,
or other payments that have not actually been delivered to PBNI, TIG, Shaklee or
Master Lessor.
(f) If Schwab receives any notice or demand from Master Lessor under
the Master Lease, from Shaklee under the Sublease, from TIG under the Sub-
sublease, from PBNI under the Sub-sub-sublease with respect to the Premises,
Schwab shall, pursuant to Paragraph 22, deliver a tree and correct copy of same
to Scient.
19. No Privity. Nothing contained in this Sub-sub-sub-sublease shall be
-----------
construed to create privity of estate or of contract between Scient and Master
Lessor, Shaklee, TIG, or PBNI. Schwab and Scient each agrees not to do or permit
to be done any act or thing that will constitute a breach or violation of any of
the terms, covenants, conditions, or provisions of the Master Lease, Sublease,
Sub-sublease or Sub-sub-sublease.
20. No Representations. In making and executing this Sub-sub-sub-sublease,
-------------------
Scient has not relied upon or been induced by any statements or representations
of any persons, including, without limitation, Schwab, the Brokers named herein,
and Schwab's other employees and agents (other than those representations, if
any, set forth expressly in this Sub-sub-sub-sublease) with respect to the
physical
15
<PAGE>
condition of the Building or the Premises or with respect to any other matter
affecting the Premises or this transaction that might be pertinent in
considering the leasing of the Premises or the execution of this Sub- sub-sub-
sublease, including, without limitation, the following: (i) the legality of the
present or any possible future use of the Building or Premises under federal,
state or local law; (ii) the physical condition of the Building and/or Premises,
including but not limited to soil condition and the structural integrity of the
Building and/or Premises; (iii) the accuracy or completeness of square footage
figures, and of the texts of agreements affecting the Building and/or Premises;
or (iv) the possibility that leases, options or other documents or agreements
exist that affect or encumber the Building and/or Premises and which have not
been provided or disclosed by the Master Lessor, Shaklee, TIG, PBNI, or, with
respect to the Brokers named herein and Schwab's other agents, contractors,
employees, officers and directors, by Schwab. Scient has, on the contrary,
relied solely on such representations, if any, as are expressly made herein and
on such investigations, examinations, and inspections as Scient has chosen to
make or have made. Scient acknowledges that Schwab has afforded Scient the
opportunity for full and complete investigations, examinations, and inspections.
21. Schwab's Approval. Whenever Scient shall request Schwab's consent or
-------------------
approval, such consent or approval shall not be unreasonably withheld, provided
that Schwab's refusal to consent to or approve any matter, whenever Schwab's
consent or approval is required or requested under this Sub-sub-sub-sublease,
shall be deemed reasonable, if, among other things, Schwab has used its best
efforts to obtain such consent or approval but PBNI, TIG, Shaklee or Master
Lessor has refused to give such consent or approval. Nothing in this Sub-sub-
sub-sublease shall diminish or in any way affect Master Lessor's fight to
approve or consent under the Master Lease, Shaklee's fight to approve or consent
under the Sublease, or TIG's fight to approve or consent under the Sub-sublease,
or PBNI's fight to approve or consent under the Sub-sub-sublease nor imply a
constraint of reasonableness with respect to the exercise of such fights.
22. Time Limits. Schwab shall, no later than 5 business days after receipt
-------------
thereof, give to Scient a copy of each notice and demand received from Master
Lessor, Shaklee, TIG or PBNI concerning the Premises, Sub-sub-sub-sublease, Sub-
sub-sublease, Sub-sublease, Sublease or Master Lease.
23. Letter of Credit.
-----------------
(a) During the entire term of this Sub-sub-sub-sublease, Scient shall
have obtained letter(s) of credit from a financial institution satisfactory to
Schwab naming Schwab as beneficiary to secure Scient's obligations hereunder, at
the times, in the mounts and for the purposes set forth below or in paragraph 23
of the Concurrent Sub-sub-sub-sub-sublease. Each letter of credit shall be for a
term of not less than one year and irrevocable during that period. Each letter
of credit shall provide that it will be honored upon a signed statement by
Schwab that Schwab is entitled to draw upon the letter of credit under this Sub-
sub-sub-sublease and shall require no signature or statement from any party
other than Schwab. No notice to Scient shall be required to enable Schwab to
draw upon the letter of credit. Each letter of credit shall also provide that
following the honor of any drafts in an amount less than the aggregate amount of
a letter of credit, the financial institution shall return the original letter
of credit to Schwab and Schwab's fights as to the remaining amount of the letter
of credit will not be extinguished. If the financial institution from which
Scient has obtained a letter of credit shall admit in writing its inability to
pay its debts generally as they become due, file a petition in bankruptcy or a
petition to take advantage of any insolvency act, make an assignment for the
benefit of its creditors, consent to the appointment of a receiver of itself or
of the whole or any substantial part of its property, or file a petition or
answer seeking reorganization or arrangement under the Federal Bankruptcy Code
or any other applicable law or statute of the United States of America or any
state thereof, then Scient shall obtain a replacement letter of credit
16
<PAGE>
within ten (10) days of such act from another financial institution satisfactory
to Schwab.
(b) Times for Obtaining Letter of Credit. A letter of credit in the
-------------------------------------
amount of $400,000 shall be obtained and delivered to Schwab at least five (5)
business days prior occupancy by Scient. It shall cover the twelve (12) month
period beginning on the Commencement Date. If Scient does not commit any breach
or default hereunder or under the Concurrent Sub-sub-sub-sub-sublease during the
first year of the term of this Sub-sub-sub-sublease and the Concurrent Sub-sub-
sub-sub-sublease, the letter(s) of credit which shall cover subsequent years of
the term of this Sub-sub-sub-sublease shall be in the amount of $300,000 for
each year and be obtained and delivered to Schwab prior to September 15 each
year of the term of this Sub-sub-sub-sublease; each letter of credit shall cover
the one (1) year period beginning on the anniversary of the Commencement Date
immediately following thereafter.
(c) If Scient fails to pay rent or other charges when due under this
Sub-sub-sub-sublease, or fails to perform any of its other obligations
hereunder, Schwab may, but shall not be required to, draw upon the letter of
credit for the payment of any rent or other amount then due hereunder and
unpaid, for the payment of any other sum for which Schwab may become obligated
by reason of Scient's default or breach, or for any loss or damage sustained by
Schwab as a result of Scient's default or breach. If Schwab so draws on any
portion of the letter of credit, Scient shall, within ten (10) days after
written demand by Schwab, restore the letter of credit to the full amount
required, and Scient's failure to do so shall constitute a default under this
Sublease.
(d) In the event Scient fails to obtain satisfactory letter(s) of
credit as required under this paragraph 23 when due, Schwab shall have the fight
to draw the full amount of the then existing letters of credit; provided,
however, that in the event of a draw pursuant to this paragraph 23(d), Schwab
shall hold the amounts drawn as a security deposit (the "Security Deposit'). If
Scient fails to pay rent or other charges when due under this Sub-sub-sub-
sublease, or fails to perform any of its other obligations hereunder, Schwab
may, but shall not be required to, use or apply all or any portion of the
Security Deposit for the payment of any rent or other amount then due hereunder
and unpaid, for the payment of any other sum for which Schwab may become
obligated by reason of Scient's default or breach, or for any loss or damage
sustained by Schwab as a result of Scient's default or breach. If Schwab so uses
any portion of the Security Deposit, Scient shall, within ten (10) days after
written demand by Schwab, restore the Security Deposit to the full amount
originally deposited, and Scient's failure to do so shall constitute a default
under this Sublease. Schwab shall not be required to keep the Security Deposit
separate from its general accounts, and shall have no obligation or liability
for payment of interest on the Security Deposit. In the event Schwab assigns its
interest in this Sublease, Schwab shall deliver to its assignee so much of the
Security Deposit as is then held by Schwab. Within thirty (30) days after the
Termination Date, and provided Scient is not then in default of any of its
obligations hereunder, the Security Deposit, or so much thereof as had not t.
heretofore been applied by Schwab, shall be returned to Scient or to the last
assignee, if any, of Scient's interest hereunder. Scient hereby waives the
provisions of Section 1950.7 of the California Civil Code, and all other
provisions of law, now or hereafter in force, which provide that Schwab may
claim from a security deposit only those sums reasonably necessary to remedy
defaults in the payment of rent, to repair damage caused by Scient or to clean
the Premises, it being agreed that Schwab may, in addition, claim those sums
reasonably necessary to compensate Schwab for any other loss or damage,
foreseeable or unforeseeable, caused by the act or omission of Scient or any
employee, agent, customer, licensee, invitee or guest of Scient.
24. Broker. Each party hereto warrants and represents to the other that it
-------
dealt with no leasing agent or broker in connection with this Sub-sub-sub-
sublease other than the person or persons identified as Brokers in the Basic
Lease Information, and that no conversations or prior negotiations were
17
<PAGE>
had by the warranting and representing party with any agent or broker other than
the Brokers concerning the Premises that could give rise to liability for
payment of a commission in connection with this Sub-sub- sub-sublease. Schwab
shall compensate Colliers International pursuant to separate agreement, and
Colliers International will compensate The CAC Group, pursuant to separate
agreement.
25. Surrender of Premises. Except for those trade fixtures of Scient of
-----------------------
which Scient notifies Master Lessor, Shaklee, TIG, PBNI and Schwab in writing
within 6 months of their installation, all alterations, additions, and
improvements by Scient to the Premises (the "Tenant Improvements") shall
immediately become Schwab's property and, at the end of the term hereof, shall
remain on the Premises without compensation to Scient. So long as the Tenant
Improvements in the Premises at the end of the term are of the same general
character, quantity, and configuration as Schwab's Initial Tenant Improvements
under the Sub-sub-sublease, except for normal wear and tear, Scient shall have
no obligation to make any changes in the then existing Tenant Improvements;
otherwise, at Schwab's request, Scient shall take such action at Scient's
expense as shall be necessary to restore the Tenant Improvements to their
condition as initially constructed or installed under the Sub-sub-sublease,
except for normal wear and tear. Notwithstanding the foregoing, nothing in this
paragraph shall be construed to waive the requirements of paragraph 6 hereof or
of paragraph 2 of the Second Amendment to Sublease.
26. PBNI's, TIG's and Shaklee's Approval. This Sub-sub-sub-sublease shall
--------------------------------------
be of no force or effect until fully executed by Scient and Schwab and approved
by PBNI, TIG and Shaklee.
27. Hazardous Materials. Schwab covenants that, within five (5) days after
---------------------
execution of this Sub-sub-sub-sublease by Schwab and Scient, it will provide
Scient with copies of all seismic reports or notices, asbestos reports or
notices, and any correspondence, reports or notices regarding Hazardous
Materials (as defined below) with respect to the Building or the Premises that
Schwab has in its possession in the Building, and that Schwab will continue to
provide such correspondence, reports and notices to Scient throughout the term
hereof if any are received by Schwab. Scient shall have no obligation or
liability to Schwab with respect to any substances or materials regulated under
any statute, law or ordinance relating to hazardous or toxic materials or the
environment ("Hazardous Materials") found on, in or under the Building or
Premises or released therefrom, except for those brought into the Premises or
the Building by Scient or its agents, employees, contractors or invitees; and
Schwab shall indemnify, defend, protect and hold harmless Scient from any and
all loss, costs, damage, expense and liability (including, without limitation,
reasonable attorneys' fees) incurred by Scient in connection with or arising
from such Hazardous Materials not brought into the Premises or the Building by
Scient or its agents, employees, contractors or invitees. Scient shall
indemnify, defend, protect and hold harmless Schwab from any and all loss,
costs, damage, expense and liability (including, without limitation, reasonable
attorneys' fees) incurred by Schwab in connection with or arising from the
introduction by Scient, or its agents, employees, contractors or invitees, of
Hazardous Materials in, on or about the Premises, the Building or the real
property on which the Building is located.
28. Miscellaneous.
--------------
(a) The paragraph titles in this Sub-sub-sub-sublease are used for
convenience in finding the subject matter. Such titles are not to be taken as
part of this instrument or to be used in determining the intent of the parties
or otherwise in interpreting this instrument.
(b) This Sub-sub-sub-sublease shall apply to and bind the respective
heirs, distributees, executors, administrators, successors, and assigns of the
parties hereto. This subparagraph shall not be construed, however, as a consent
to any assignment or subletting by Scient.
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<PAGE>
29. Exhibits The following exhibits are attached to this Sub-sub-sub-
--------
sublease and by this ,.
reference made a part hereof:
Exhibit A - Sub-sub-sublease
Exhibit B - Plan of Premises
IN WITNESS WHEREOF, the parties have executed this Sub-sub-sub-sublease as of
the day and year first hereinabove set forth.
SCHWAB: SCIENT:
CHARLES SCHWAB & CO., INC., SCIENT CORPORATION,
a California corporation a California Corporation
By: /s/ Parkash P. Ahuja By: /s/ William H. Kurtz
---------------------------- ----------------------------
Name: Parkash P. Ahuja Name: William H. Kurtz
---------------------------- ----------------------------
Its: Senior Vice President Its: CFO
----------------------------- ----------------------------
Date: 10-8-98 Date: October 8, 1998
---------------------------- ----------------------------
By:
------------------------------
Name:
----------------------------
Its:
-----------------------------
Date:
----------------------------
20
<PAGE>
APPROVAL- 29th Floor
By executing this Approval, Shaklee hereby consents to the making of
the attached Sub-sub-sub-sublease by and between Schwab and Scient, on, and only
on, the terms set forth herein, without releasing TIG from any obligations of
the sublessee under the Sublease, without releasing PBNI from any obligations of
the sub-sublessee under the Sub-sublease, without releasing Schwab from any
obligations of the sub-sub-sublessee under the Sub-sub-sublease and without
waiving any restriction on further assignment of the Sublease, the Sub-sublease
or the Sub-sub-sublease. This Consent shall not constitute consent to any other
or further sub-sublease, modify in any way the terms of the Sublease, or create
any privity of estate or contract between the undersigned and any other person
or entity.
SHAKLEE:
SHAKLEE CORPORATION,
a Delaware corporation
By: /s/ Kay Childs
----------------------------------
Name: Kay Childs
--------------------------------
Its: Vice President, Human Resources
---------------------------------
Date: September 29, 1998
--------------------------------
<PAGE>
APPROVAL
By executing this Approval, TIG hereby consents to the making of
the attached Sub-sub-sub-sublease by and between Schwab and Scient, on the terms
set forth herein, without releasing PBNI from any obligations of the sub-
sublessee under the Sub-sublease, and without releasing Schwab from any
obligations of the sub-sub-sublessee under the Sub-sub-sublease and without
waiving any restriction on further assignment of the Sub-sublease or Sub-sub-
sublease. There are no alterations which TIG has required be removed at Sub-
sublease termination pursuant to paragraph 2 of the Second Amendment to Sublease
except: Those improvements which TIG is required to remove by Shaklee.
--------------------------------------------------------------
TIG:
TIG INSURANCE COMPANY
a California Corporation
By: ______________________
Name: Lon P. McClimon
----------------------
Its: Senior Vice President
-----------------------
Date: 9-24-98
----------------------
By: ______________________
Name: Thomas J. Miller
----------------------
Its: Vice President
-----------------------
Date: 9-24-98
----------------------
21
<PAGE>
CONSENT TO SUB-SUB-SUB-SUBLEASE
-------------------------------
The undersigned, as sub-sub-sublessor under that certain Sub-sub-
sublease dated December 1, 1996 between Pacific Bell Network
Integration, a California corporation ("PBNI") and Charles Schwab &
Co., Inc. ("Schwab") as amended and modified to date (as amended,
the "Sub-sub-sublease") for the Premises known as the 29~' Floor, at
444 Market Street, San Francisco, California 94105 as further
defined in the Sub-sub-sublease ("Premises"), hereby consents to the
attached Sub-Sub-Sub-Sublease between Schwab and Scient Corporation,
a Delaware corporation; provided, however, that (i) PBNI shall not
be bound by any of the terms of the Sub-Sub-Sub-Sublease, (ii) the
Sub-Sub-Sub-Sublease is subject and subordinate to the Master
Lease(as defined therein) and all subleases thereof, (iii) the Sub-
Sub-Sub-Sublease shall not constitute a release of Schwab from any
liability under the Master Lease or any subleases thereof, and (iv)
neither the Sub-Sub-Sub-Sublease nor this Consent shall be construed
as a waiver of any of PBNI's fights under the Sub-sub-sublease,
including the fight to consent to any future proposed transfers, nor
shall it relieve Schwab or anyone claiming under or through Schwab
of the obligation to obtain PBNI's consent to any future assignments
and subleases as may be required under the terms of the Sub-sub-
sublease.
PBNI:
PACIFIC BELL NETWORK INTEGRATION,
a California corporation
By: /s/ [signature illegible]
--------------------------
Its: Director-PTSS CRE
--------------------------
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