OFFICE LEASE
THIS OFFICE LEASE ("LEASE") is made between SPIEKER PROPERTIES,
L.P., a California limited partnership ("Landlord"), and INTRAWARE, INC., a
Delaware corporation ("Tenant"), as of November 16, 1999 (the "date of this
Lease").
BASIC LEASE INFORMATION
PROJECT: Watergate Tower III
BUILDING: 2000 Powell Street, Emeryville, California 94608
DESCRIPTION OF PREMISES: Suite 1555 (the Premises is as outlined in red or as
shown in cross-hatching on EXHIBIT B)
RENTABLE AREA OF PREMISES: Approximately Fifteen Thousand Eight Hundred
Twenty-Five (15,825) square feet
PERMITTED USE: General office and administrative use
SCHEDULED TERM COMMENCEMENT DATE: Earlier of commencement operations or
forty-five (45) days after delivery of Premises in condition required under
Section 2(b).
SCHEDULED INITIAL TERM: Thirty-six (36) and one-half (1/2) months
SCHEDULED EXPIRATION DATE: December 31, 2002
BASE RENT:
(a) Initial Annual Base Rent $418,608.00
(b) Initial Monthly Installment of Base Rent: $34,884.00
(c) Subject to increase or decrease, as applicable, pursuant to
Paragraph 3.1(b) as follows:
TERM COMMENCEMENT DATE THROUGH NOVEMBER 30, 1999: $17,442.00,
provided the Premises has been delivered November 16, 1999
DECEMBER 1, 1999 THROUGH DECEMBER 31, 2001: $34,884.00 per month
JANUARY 1, 2002 THROUGH DECEMBER 31, 2002: $50,640.00 per month
SECURITY DEPOSIT: One Hundred Fifty Thousand and No/100 Dollars ($150,000.00),
subject to Paragraph 22.C hereof.
BASE YEAR FOR OPERATING EXPENSES: Calendar Year 2000
TENANT'S PROPORTIONATE SHARE OF BUILDING: 4.3% OF PROJECT: N/A
PARKING DENSITY: Three (3) spaces per 1,000 usable square OCCUPANCY DENSITY: One (1) person per 125 rentable
feet of the Premises square feet of the Premises
TENANT'S NAICS CODE: 4899
TENANT CONTACT: Name: Mr. Don Freed, Chief Financial Officer
Telephone Number: (925) 253-4500
FAX: (925) 253-6590
SHORT FORM OFFICE BASE YEAR LEASE (CA)
ADDRESSES FOR NOTICES : To: Tenant To: Landlord
25 Orinda Way 2200 Powell Street, Suite 325
Orinda, Ca 94563 Emeryville, Ca 94608
Attn: Mr. Don Freed Attn: Project Director
Executive Vice President and FAX: (510) 594-5608
Chief Financial Officer
FAX: (925) 253-6590
With a copy to:
25 Orinda Way
Orinda, Ca 94563
Attn: John Moss
General Counsel
TENANT'S BILLING ADDRESS [IF DIFFERENT FROM NOTICE ADDRESS]:
-------------------
LANDLORD'S REMITTANCE ADDRESS: Spieker Properties, P.O. Box 45587, Department
11473, San Francisco, Ca 94145
GUARANTOR: NONE.
IN WITNESS WHEREOF, the parties hereto have executed this Lease,
consisting of the foregoing Basic Lease Information, the following Standard
Lease Provisions consisting of PARAGRAPHS 1 THROUGH 22 (the "STANDARD LEASE
PROVISIONS") and EXHIBITS A, B, C, D AND E, all of which are incorporated herein
by this reference (collectively, this "LEASE"). In the event of any conflict
between the provisions of the Basic Lease Information and the provisions of the
Standard Lease Provisions, the Standard Lease Provisions shall control.
"LANDLORD" "TENANT"
SPIEKER PROPERTIES, L.P., INTRAWARE, INC.
a California limited partnership, a Delaware corporation
By: Spieker Properties, Inc.,
a Maryland corporation, its general partner
By: By: /s/ Don Freed
------------------------------- -------------------------
John R. Winther Don Freed
Its: Its:
------------------------------ ------------------------
Senior Vice President Executive Vice President,
CFO
-2-
STANDARD LEASE PROVISIONS
1. PREMISES. Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord, subject to all of the terms and conditions set forth herein,
those certain premises (the "PREMISES") described in the Basic Lease
Information and as outlined in red or as shown in the cross-hatched markings
on the floor plan attached hereto as EXHIBIT B. The parties agree that for
all purposes hereunder the Premises shall be stipulated to contain the number
of square feet of rentable area described in the Basic Lease Information. The
Premises are located in that certain office building (the "BUILDING") whose
street address is as shown in the Basic Lease Information. The Building is
located on that certain land which is also improved with landscaping, parking
facilities and other improvements and appurtenances. Such land, together with
all such improvements and appurtenances and the Building, are all or part of
a project which may consist of more than one building and additional
facilities, as described in the Basic Lease Information (collectively
referred to herein as the "PROJECT"). However, Landlord reserves the right to
make such changes, additions and/or deletions to such land, the Building and
the Project and/or the common areas and parking or other facilities thereof
as it shall determine from time to time, provided that any such changes,
additions and/or deletions of the common areas shall not materially and
adversely interfere with Tenant's access to the Premises and the parking
areas of the Project.
2. TERM.
(a) Unless earlier terminated in accordance with the provisions
hereof, the term of this Lease (the "TERM") shall be as set forth in the Basic
Lease Information.
(b) The Term shall commence on the date that Landlord delivers the
Premises to Tenant (the "TERM COMMENCEMENT DATE"). If Landlord fails to deliver
possession of the Premises to Tenant on or before November 19, 1999, Tenant may
terminate this Lease by delivering written notice to Landlord which termination
shall be effective immediately upon Landlord's receipt thereof and Tenant shall
have no further obligations hereunder. Landlord hereby represents that by
delivering possession of the Premises to Tenant, any claims by any former tenant
of the Premises are null and void and Landlord has full legal capacity to
deliver possession of the Premises and a leasehold estate to Tenant in
accordance with the terms of this Lease. Notwithstanding the foregoing, in the
event that Landlord is delayed in delivering the Premises by reason of any act
or omission of Tenant, the Term Commencement Date shall be (unless Tenant takes
possession or commences use of the Premises prior thereto) the date the Premises
would have been delivered by Landlord had such Tenant caused delay(s) not
occurred. This Lease shall be a binding contractual obligation effective upon
execution hereof by Landlord and Tenant, notwithstanding the later commencement
of the Term. Tenant acknowledges that Tenant has inspected and accepts the
Premises "as-is" and in their present condition so long as free of debris,
except for tenant improvements (if any) to be constructed by Landlord in the
Premises pursuant to the Improvement Agreement attached hereto as EXHIBIT C (the
"IMPROVEMENT AGREEMENT"), if any; provided, however, that the foregoing sentence
shall not release Landlord from any of Landlord's compliance obligations with
respect to Regulations (as defined below) as expressly stated in this Lease.
Landlord and Tenant acknowledge and agree that all personal property, including,
but not limited to, the furniture that is in the Premises as of the date hereof
shall be delivered to Tenant at the time of delivery of the Premises and such
personal property shall be the sole property of Tenant.
(c) In the event the Term Commencement Date is delayed or
otherwise does not occur on the Scheduled Term Commencement Date specified in
the Basic Lease Information, this Lease shall not be void or voidable, the Term
shall not be extended, and Landlord shall not be liable to Tenant for any loss
or damage resulting therefrom (except as set forth in Section 22(d) below);
provided that Tenant shall not be liable for any Rent (defined below) for any
period prior to the Term Commencement Date. Landlord may deliver to Tenant
Landlord's standard form "START-UP LETTER" for Tenant's acknowledgment and
confirmation of the Term Commencement Date. Tenant shall execute and deliver
such Start-Up Letter to Landlord within five (5) days after receipt thereof, but
Tenant's failure or refusal to do so shall not negate Tenant's acceptance of the
Premises or affect determination of the Term Commencement Date.
(d) Landlord shall be responsible for complying with
Regulations (defined below), other than the ADA, pertaining to the common
areas of the Project prior to and except to the extent arising out of
Tenant's occupancy or use of the Premises or common areas or construction of
any Tenant Improvements or Alterations made by or on behalf of Tenant,
whether by Landlord or otherwise and whether performed before or after the
Term Commencement Date, or installation of any equipment, fixtures, furniture
or other personal property in or about the Premises; provided, however; that
Landlord may treat costs of such compliance as an Operating Expense. Tenant
shall have the sole responsibility for complying, at Tenant's cost, with any
and all provisions of the Americans with Disabilities Act of 1990, as it has
been and may later be amended ("ADA"), (i) with respect to the Premises; and
(ii) with respect to the common areas of the Project where in the case of
this clause (ii) such compliance has been brought about by: (A) any Tenant
Improvements or Alterations to the Premises or to the common areas made by or
on behalf of Tenant, whether by Landlord or otherwise, and performed after
the Term Commencement Date; (B) requirements of Tenant's employees, or any
changes to Tenant's use of the Premises; or (C) any architectural barriers
caused by Tenant's installation of any equipment, fixtures, furniture, or
other personal property in or about the Premises (items (i) and (ii)
collectively, "TENANT'S ADA RESPONSIBILITIES"). Notwithstanding the
foregoing, Tenant's ADA Responsibilities shall not include any compliance
items (each an "ADDITIONAL ADA COMPLIANCE ITEM") identified during an
inspection or other event made or occurring prior to, during or after
construction of, and solely in connection with, any Tenant Improvement or
Alterations to the Premises or common areas made by or on behalf of Tenant (a
"TENANT CAUSED INSPECTION") if such Additional ADA Compliance Item is: (i)
not a direct or indirect result or consequence of such Tenant Improvement or
Alterations to the Premises or common areas made by or on behalf of Tenant
except that such compliance item was discovered in the Premises, Building or
Project during a Tenant Caused Inspection, and (ii) unrelated in any manner,
either directly or indirectly, with the purpose for the Tenant Caused
Inspection; and (iii) is not otherwise part of Tenant's ADA Responsibilities
as defined above; provided however, that Landlord may allocate the cost of
performing such Additional ADA Compliance Item as an Operating Expense if
such allocation is consistent with the terms of this Lease. Tenant shall
indemnify, defend and hold Landlord, its agents and employees harmless from
and against any and all claims, damages, or liabilities (including, without
limitation, reasonable attorneys' fees and costs) arising directly or
indirectly from Tenant's failure to satisfy any of Tenant's ADA
Responsibilities. Landlord shall indemnify, defend and hold Tenant, its
agents and employees harmless from and against any and all claims, damages or
liabilities arising directly or indirectly from Landlord's failure to comply
with any obligations of a landlord under the ADA, other than such claims,
damages or liabilities arising from Tenant's failure to satisfy any of
Tenant's ADA Responsibilities; provided, however, that Landlord may treat
costs of ADA compliance with respect to the common areas of the Project to
the extent incurred after the Term Commencement Date as an Operating Expense.
Landlord represents that, as of the date of this Lease, to the best of
Landlord's actual knowledge, the Premises and the Building shall comply in
all material respects with Regulations (as defined below) and the ADA as the
Regulations (as defined below) and ADA, respectively, have, as of the date of
this Lease, been interpreted in Alameda County and pertain to the Premises
and the Building.
-1-
3. RENT AND OPERATING EXPENSES.
3.1 BASE RENT
(a) Subject to the provisions of Paragraph 2(b) and this Paragraph 3.1,
Tenant agrees to pay during the Term as Base Rent for the Premises the sums
specified in the Basic Lease Information (as increased from time to time as
provided in the Basic Lease Information or as may otherwise be provided in this
Lease) ("BASE RENT").
(b) Base Rent shall increase as set forth in the Basic Lease
Information or as may otherwise be provided in this Lease.
(c) Except as expressly provided to the contrary herein, Base
Rent shall be payable in equal consecutive monthly installments, in advance,
without deduction or offset, commencing on the Term Commencement Date and
continuing on the first day of each calendar month thereafter. However, the
first installment of Base Rent in the amount of $17,442 shall be payable by
Tenant simultaneously with the execution of this Lease by Landlord and
Tenant. If the Term Commencement Date is a day other than the Scheduled
Commencement Date, then Landlord shall credit Tenant's December Base Rent in
an amount equal to $1,162.80 per day for each day commencing on November 17,
1999 until the Term Commencement Date. Base Rent, all forms of additional
rent payable hereunder by Tenant and all other amounts, fees, payments or
charges payable hereunder by Tenant (collectively, "ADDITIONAL RENT") shall
(i) each constitute rent payable hereunder (and shall sometimes collectively
be referred to herein as "RENT"), (ii) be payable to Landlord in lawful money
of the United States when due without any prior demand therefor, except as
may be expressly provided to the contrary herein, and (iii) be payable to
Landlord at Landlord's Remittance Address set forth in the Basic Lease
Information or to such other person or to such other place as Landlord may
from time to time designate in writing to Tenant. Any Rent or other amounts
payable to Landlord by Tenant hereunder for any fractional month shall be
prorated based on a month of 30 days.
3.2 OPERATING EXPENSES.
(a) Subject to the provisions of this Lease, Tenant shall pay
to Landlord pursuant to this Paragraph 3.2 as Additional Rent an amount equal
to Tenant's Proportionate Share (defined below) of the excess, if any, of
Operating Expenses (defined below) allocable to each Expense Year (defined
below) over Operating Expenses allocable to the Base Year (the "BASE YEAR")
specified in the Basic Lease Information ("BASE YEAR OPERATING EXPENSES").
"TENANT'S PROPORTIONATE SHARE" is, subject to the provisions of this
Paragraph 3.2, the percentage number (representing the Premises' share of the
Building and the Project) set forth in the Basic Lease Information. An
"EXPENSE YEAR" is any calendar year after the Base Year any portion of which
falls within the Term.
(b) "OPERATING EXPENSES" means all costs, expenses and
obligations incurred or payable by Landlord because of or in connection with
the operation, ownership, repair, replacement, restoration, management or
maintenance of the Project during or allocable to the Base Year or an Expense
Year (as applicable) during the Term (other than costs, expenses or
obligations specifically attributable to Tenant or other tenants of the
Building or Project), all as determined substantially in accordance with
generally accepted accounting principles, as reasonably interpreted by
Landlord and consistently applied, including without limitation the following:
(i) All property taxes, assessments, charges or
impositions and other similar governmental ad valorem or other charges levied
on or attributable to the Project (including personal and real property
contained therein) or its ownership, operation or transfer, and all taxes,
charges, assessments or similar impositions imposed in lieu or substitution
(partially or totally) of the same (collectively, "TAXES"). "TAXES" shall
also include (A) all taxes, assessments, levies, charges or impositions on
any interest of Landlord in the Project, the Premises or in this Lease, or on
the occupancy or use of space in the Project or the Premises; or on the gross
or net rentals or income from the Project, including, without limitation, any
gross income tax, excise tax, sales tax or gross receipts tax levied by any
federal, state or local governmental entity with respect to the receipt of
Rent; or (B) any possessory taxes charged or levied in lieu of real estate
taxes; and
(ii) The cost of all utilities, supplies, equipment,
tools, materials, service contracts, janitorial services, waste and refuse
disposal, landscaping, and insurance (with the nature and extent of such
insurance to be carried by Landlord to be determined by Landlord in its sole
and absolute discretion, unless otherwise expressly provided herein);
insurance deductibles; compensation and benefits of all persons who perform
services connected with the operation, management, maintenance or repair of
the Project; personal property taxes on and maintenance and repair of
equipment and other personal property; costs and fees for administration and
management of the Project, whether by Landlord or by an independent
contractor, and other management office operational expenses (provided that
any such management fee shall not exceed five percent (5%)); rental expenses
for or a reasonable allowance for depreciation of, personal property used in
the operation, management, maintenance or repair of the Project, license,
permit and inspection fees; and all inspections, activities, alterations,
improvements or other matters required by any governmental or
quasi-governmental authority or by Regulations (defined below), for any
reason, including, without limitation, capital improvements, whether
capitalized or not; all capital additions, repairs, replacements and
improvements made to the Project or any portion thereof by Landlord (A) of a
personal property nature and related to the operation, repair, maintenance or
replacement of systems, facilities, equipment or components of (or which
service) the Project or portions thereof, (B) required or provided in
connection with any existing or future applicable municipal, state, federal
or other governmental statutes, rules, requirements, regulations, laws,
standards, orders or ordinances including, without limitation, zoning
ordinances and regulations, and covenants, easements and restrictions of
record (collectively, "REGULATIONS"), (C) which are designed to improve the
operating efficiency of the Project, or (D) determined by Landlord to be
required to keep pace or be consistent with safety or health advances or
improvements (with such capital costs to be amortized over such periods as
Landlord shall determine which shall be substantially in accordance with
generally accepted accounting principles); common area repair, resurfacing,
replacement, operation and maintenance; security systems or services, if any,
deemed appropriate by Landlord (but without obligation to provide the same);
and any other cost or expense incurred or payable by Landlord in connection
with the operation, ownership, repair, replacement, restoration, management
or maintenance of the Project. Repairs, replacements, and general maintenance
shall include the cost of any remediation of or repair due to the use of any
common Hazardous Materials, such as office and janitorial supplies and
materials used in connection with the systems and equipment which operate the
Building and the Project, with such Hazardous Materials used in customary
quantities in connection with the ownership, management, maintenance, repair,
preservation, replacement and operation of the Building or Project and its
supporting facilities and such additional facilities now and in subsequent
years as may be determined by Landlord to be necessary or desirable to the
Building and/or Project (as determined in a reasonable manner).
(c) Variable items of Operating Expenses (e.g., expenses that
are affected by variations in occupancy levels) for the Base Year and each
Expense Year during which actual occupancy of the Project is less than
ninety-five percent (95%) of the rentable area of the Project shall be
-2-
appropriately adjusted, in accordance with sound accounting principles, to
reflect ninety-five percent (95%) occupancy of the existing rentable area of
the Project during such period.
(d) Prior to or shortly following the commencement of (and from
time to time during) each Expense Year of the Term following the Term
Commencement Date, Landlord shall provide to Tenant a good faith written
estimate of Tenant's Proportionate Share of the projected excess, if any, of
the Operating Expenses for the Project for such year over the Base Year
Operating Expenses. Commencing with the first day of the calendar month
following the month in which such estimate was delivered to Tenant, Tenant
shall pay such estimated amount (less amounts, if any, previously paid toward
such excess for such year) to Landlord in equal monthly installments over the
remainder of such calendar year, in advance on the first day of each month
during such year (or remaining months, if less than all of the year remains).
Subject to the provisions of this Lease, Landlord shall endeavor to furnish
to Tenant within a one hundred twenty (120) days after the end of each
Expense Year, a statement (a "RECONCILIATION STATEMENT") indicating in
reasonable detail the excess, if any, of Operating Expenses allocable to such
Expense Year over Base Year Operating Expenses and the parties shall, within
thirty (30) days thereafter, make any payment or allowance necessary to
adjust Tenant's estimated payments to Tenant's actual share of such excess as
indicated by such annual Reconciliation Statement.
(e) Tenant shall pay ten (10) days before delinquency all taxes
and assessments levied against any personal property or trade fixtures of
Tenant in or about the Premises. If any such taxes or assessments are levied
against Landlord or Landlord's property or if the assessed value of the
Project is increased by the inclusion therein of a value placed upon such
personal property or trade fixtures, Tenant shall, within thirty (30) days of
demand, reimburse Landlord for the taxes and assessments so levied against
Landlord, or any such taxes, levies and assessments resulting from such
increase in assessed value.
(f) Any delay or failure of Landlord in (i) delivering any
estimate or statement described in this Paragraph 3.2, or (ii) computing or
billing Tenant's Proportionate Share of excess Operating Expenses shall not
(A) constitute a waiver of its right to subsequently deliver such estimate or
statement or require any increase in Rent contemplated by this Paragraph 3.2,
or (B) in any way waive or impair the continuing obligations of Tenant under
this Paragraph 3.2. Provided that Tenant is not then in default under this
Lease beyond any applicable notice and cure period, subject to compliance
with Landlord's standard procedures for the same, Tenant shall have the
right, upon the condition that Tenant shall first pay to Landlord the amount
in dispute, to have independent certified public accountants of national
standing (who are not compensated on a contingency basis) of Tenant's
selection (and subject to Landlord's reasonable approval) review Landlord's
Operating Expense books and records relating to the Expense Year subject to a
particular Reconciliation Statement during the ninety (90) day period
following delivery to Tenant of the Reconciliation Statement for such Expense
Year. If such review discloses a liability for a refund in excess of six
percent (6%) of Tenant's Proportionate Share of Operating Expenses previously
reported, the cost of such review shall be borne by Landlord; otherwise such
cost shall be borne by Tenant. Tenant waives the right to dispute or contest,
and shall have no right to dispute or contest, any matter relating to the
calculation of Operating Expenses or other forms of Rent under this Paragraph
3.2 with respect to each Expense Year for which a Reconciliation Statement is
given to Tenant if no claim or dispute with respect thereto is asserted by
Tenant in writing to Landlord within ninety (90) days of delivery to Tenant
of the original or most recent Reconciliation Statement with respect thereto.
In addition, notwithstanding anything in the definition of Operating Expenses
in this Lease to the contrary, Operating Expenses shall not include the
following:
(i) Any ground lease rental;
(ii) Costs of capital improvements, replacements or equipment and
any depreciation or amortization expenses thereon, except to
the extent included in Operating Expenses allowed in Paragraph
3.2(b)(ii) above;
(iii) Rentals for items (except when needed in connection with
normal repairs and maintenance of permanent systems) which if
purchased, rather than rented, would constitute a capital
improvement which is specifically excluded in clause (ii)
above (excluding, however, equipment not affixed to the
Building or Project which is used in providing janitorial or
similar services);
(iv) Costs incurred by Landlord for the repair of damage to the
Building or Project, to the extent that Landlord is reimbursed
by insurance proceeds, or repairs or replacements covered by
warranties and for which Landlord has been reimbursed, or
repairs or replacements due to the gross negligence or willful
misconduct of Landlord or Landlord's agents or employees;
(v) Costs, including permit, license and inspection costs,
incurred with respect to the installation of tenant or other
occupant improvements made for tenants or other occupants in
the Building or the Project or incurred in renovating or
otherwise improving, decorating, painting or redecorating
vacant space for or the premises of other tenants or other
occupants of the Building;
(vi) Marketing costs, including leasing commissions, attorneys'
fees in connection with the negotiation and preparation or
enforcement of letters, deal memos, letters of intent, leases,
subleases and/or assignments, space planning costs, and other
costs and expenses incurred in connection with lease, sublease
and/or assignment negotiations and transactions with present
or prospective tenants or other occupants of the Building or
the Project;
(vii) Costs incurred by Landlord due to the violation by Landlord of
the terms and conditions of any lease of space in the Building
or the Project;
(viii) Interest, principal, points and fees on debt or amortization
payments on any mortgage or deed of trust or any other debt
instrument encumbering the Building or Project or the land on
which the Building or Project is situated;
(ix) Except for making repairs or keeping permanent systems in
operation while repairs are being made, rentals and other
related expenses incurred in leasing air conditioning systems,
elevators or other equipment ordinarily considered to be of a
capital nature, except equipment not affixed to the Building
or Project which is used in providing janitorial or similar
services;
(x) Advertising and promotional expenditures;
(xi) Costs incurred in connection with upgrading the Building or
Project to comply with disability, life, fire and safety codes
in effect prior to the issuance of the temporary certificate
of occupancy for the Building;
(xii) Interest, fines or penalties incurred as a result of
Landlord's failure to make payments when due unless such
failure is commercially reasonable under the circumstances;
-3-
(xiii) Costs arising from Landlord's charitable or political
contributions;
(xiv) Costs for acquisition of sculpture, paintings or other objects
of art in common areas;
(xv) The depreciation of the Building and other real property
structures in the Project;
(xvi) Landlord's general corporate overhead and general
administrative expenses not related to the operation of the
Building or the Project;
(xvii) Any bad debt loss, rent loss or reserves for bad debts or rent
loss, or reserves for equipment or capital replacement;
(xviii) Except as expressly provided herein, the cost incurred to
treat, survey, clean, contain, abate, remove or otherwise
remedy Hazardous Materials in, on or about the Building or
Project due to another tenant's default under its lease or due
to an act of Landlord or Landlord's agents, employees or
invitees;
(xix) Legal expenses for disputes with tenants and legal auditing
and consulting fees not incurred in the ordinary operation of
the Project; and
(xx) Operating Expenses shall not include franchise, estate,
succession, inheritance and gift taxes and federal and state
income taxes measured by Landlord's general or net income (as
opposed to rents, receipts or income attributable to the
Project).
4. DELINQUENT PAYMENT; HANDLING CHARGES. In the event Tenant is more
than four (4) days late in paying any amount of Rent or any other payment due
under this Lease, Tenant shall pay Landlord, within ten (10) days of
Landlord's written demand therefor, a late charge equal to five percent (5%)
of the delinquent amount, or $150.00, whichever amount is greater; provided,
however, that during the initial Term hereof, Landlord shall waive such late
fee one (1) time during any twelve (12) month period provided. In addition,
any amount due from Tenant to Landlord hereunder which is not paid within ten
(10) days of the date due shall bear interest at an annual rate (the "DEFAULT
RATE") equal to twelve percent (12%).
5. SECURITY DEPOSIT. Upon delivery of Premises in accordance with
ss.2(b), Tenant shall pay to Landlord the amount of Security Deposit (the
"SECURITY DEPOSIT") specified in the Basic Lease Information, if any, which
shall be held by Landlord to secure Tenant's performance of its obligations
under this Lease. The Security Deposit is not an advance payment of Rent or a
measure or limit of Landlord's damages upon a default by Tenant or an Event
of Default (defined below). If Tenant defaults beyond any applicable cure
period with respect to any provision of this Lease, Landlord may, but shall
not be required to, use, apply or retain all or any part of the Security
Deposit (a) for the payment of any Rent or any other sum in default, (b) for
the payment of any other amount which Landlord may spend or become obligated
to spend by reason of such default by Tenant, and (c) to compensate Landlord
for any other loss or damage which Landlord may suffer by reason of such
Event of Default by Tenant. If any portion of the Security Deposit is so used
or applied, Tenant shall, within ten (10) days after demand therefor by
Landlord, deposit with Landlord cash in an amount sufficient to restore the
Security Deposit to the amount required to be maintained by Tenant hereunder.
Within sixty (60) days following expiration or the sooner termination of this
Lease, provided that Tenant has performed all of its obligations hereunder,
Landlord shall return to Tenant the remaining portion of the Security
Deposit. The Security Deposit may be commingled by Landlord with Landlord's
other funds, and no interest shall be paid thereon. If Landlord transfers its
interest in the Premises, then Landlord shall assign the Security Deposit to
the transferee and thereafter Landlord shall have no further liability or
obligation for the return of the Security Deposit. Tenant hereby waives the
provisions of Section 1950.7 of the California Civil Code, and all other
provisions of any Regulations, now or hereinafter in force, which restricts
the amount or types of claim that a landlord may make upon a security deposit
or imposes upon a landlord (or its successors) any obligation with respect to
the handling or return of security deposits.
6. LANDLORD'S OBLIGATIONS.
6.1 SERVICES. Subject to the provisions of this Lease, Landlord
shall furnish to Tenant during the Term (a) city or utility company water at
those points of supply provided for general use of the tenants of the
Building; (b) subject to mandatory and voluntary Regulations, heating and air
conditioning during ordinary business hours (which hours are as of the date
of this Lease 8:00 a.m. through 6:00 p.m.) of generally recognized business
days designated by Landlord (which in any event shall not include Saturdays,
Sundays or legal holidays) ("BUSINESS HOURS) for the Building at such
temperatures and in such amounts as Landlord reasonably determines is
appropriate for normal comfort for normal office use in the Premises; (c)
janitorial services to the Premises on weekdays, other than on legal
holidays, for Building-standard installations; (d) nonexclusive passenger
elevator service at all times (except in the event of an emergency or, during
after hours maintenance or repair activities); and (e) adequate electrical
current during such Business Hours for equipment that does not require more
than 110 volts and whose electrical energy consumption does not exceed normal
office usage in a premises of the size of the Premises, as determined by
Landlord. If Tenant desires any of the services specified in this Paragraph
6.1 at any time other than during Business Hours, then subject to such
nondiscriminatory conditions and standards as Landlord shall apply to the
same, upon the request of Tenant, such services shall be supplied to Tenant
in accordance with Landlord's customary procedures for the Building,
including such advance request deadlines as Landlord shall require from time
to time, and Tenant shall pay to Landlord Landlord's then customary charge
for such services within thirty (30) days after Landlord has delivered to
Tenant an invoice therefor. Landlord reserves the right to change the
supplier or provider of any such service from time to time. Tenant shall not
have the right to obtain any such service for the Premises directly from a
supplier or provider of such service except as provided in Paragraph 6.4
below.
6.2 EXCESS UTILITY USE. Landlord shall not be required to pay
for or furnish electrical current for (but shall prepare the Premises to
receive electrical current from a utility provider) , and Tenant shall not
install or use, without Landlord's prior written consent, any equipment (a)
that requires more than 110 volts, (b) whose operation is in excess of, or
inconsistent with, the capacity of the Building (or existing feeders and
risers to, or wiring in, the Premises) or (c) whose electrical energy
consumption exceeds normal office usage of up to three (3) watts of connected
load per usable square foot ("STANDARD USAGE"). Subject to the provisions of
this Paragraph 6.2, if Tenant's consumption of electricity exceeds the
electricity to be provided by Landlord above or Standard Usage (which shall
be determined by separate metering to be installed at Tenant's expense or by
such other method as Landlord shall reasonably select), Tenant shall pay to
Landlord Landlord's then customary charge for such excess consumption within
ten (10) days after Landlord has delivered to Tenant an invoice therefor.
6.3 RESTORATION OF SERVICES. Following receipt of Tenant's
request to do so, Landlord shall use good faith efforts to restore any
service specifically to be provided under Paragraph 6.1 that becomes
unavailable and which is in Landlord's reasonable control to restore;
provided, however, that in no case shall the unavailability of such services
or any other service (or any diminution in the quality or quantity thereof)
or any interference in Tenant's business operations within the Premises
render Landlord liable to Tenant or any person using or occupying the
Premises under
-4-
or through Tenant (including, without limitation, any contractor, employee,
agent, invitee or visitor of Tenant) (each, a "TENANT PARTY") for any damages
of any nature whatsoever caused thereby (except to the extent caused solely
by Landlord's gross negligence or willful misconduct), constitute a
constructive eviction of Tenant, constitute a breach of any implied warranty
by Landlord, or entitle Tenant to any abatement of Tenant's rental
obligations hereunder.
6.4 TELECOMMUNICATIONS SERVICES. Tenant may contract separately
with providers of telecommunications or cellular products, systems or
services for the Premises. Even though such products, systems or services may
be installed or provided by such providers in the Building, in consideration
for Landlord's permitting such providers to provide such services to Tenant,
Tenant agrees that Landlord and the Landlord Indemnitees (defined below)
shall in no event be liable to Tenant or any Tenant Party for (i) any damages
of any nature whatsoever arising out of or relating to the products, systems
or services provided by such providers (or any failure, interruption, defect
in or loss of the same) or any acts or omissions of such providers in
connection with the same, except to the extent that such products, systems or
services are in Landlord's actual control and the failure thereof is due
solely to Landlord's gross negligence or willful misconduct, or (ii) any
interference in Tenant's business caused thereby. Tenant waives and releases
all rights and remedies against Landlord and the Landlord Indemnitees that
are inconsistent with the foregoing.
7. IMPROVEMENTS, ALTERATIONS, REPAIRS AND MAINTENANCE.
7.1 IMPROVEMENTS; ALTERATIONS. Any alterations, additions,
deletions, modifications or utility installations in, of or to the
improvements contained within the Premises (collectively, "ALTERATIONS")
shall be installed at Tenant's expense and only in accordance with detailed
plans and specifications, construction methods, and all appropriate permits
and licenses, all of which have been previously submitted to and approved in
writing by Landlord, and by a professionally qualified and licensed
contractor and subcontractors approved by Landlord. Alterations shall not
include the Tenant Improvements described in Exhibit C attached hereto and
Tenant shall not be required to remove such initial Tenant Improvements at
the expiration or earlier termination of this Lease. No Alterations in or to
the Premises may be made without (a) Landlord's prior written consent and (b)
compliance with such nondiscriminatory requirements and construction
regulations concerning such Alterations as Landlord may impose from time to
time. Landlord will not be deemed to unreasonably withhold its consent to any
Alteration that violates Regulations, may affect or be incompatible with the
Building's structure or its HVAC, plumbing, telecommunications, elevator,
life-safety, electrical, mechanical or other basic systems, or the appearance
of the interior common areas or exterior of the Project, or which may
interfere with the use or occupancy of any other portion of the Project.
Landlord shall respond to Tenant's written request for consent described in
this Paragraph 7.1 within five (5) business days after Landlord's receipt
thereof. In the event Landlord fails to so respond to Tenant within such five
(5) business day time period, Landlord shall not be in default hereof nor
shall Tenant be deemed to have received consent to the requested Alterations,
but Tenant may provide a second written request to Landlord. Landlord shall
respond to Tenant's second written request for consent described in this
Paragraph 7.1 within five (5) business days after Landlord's receipt thereof.
In the event Landlord fails to so respond to Tenant's second written request,
Landlord shall be deemed to have rejected Tenant's request to make
Alterations; provided, however, that if the total cost of any proposed
Alterations by Tenant during the previous six (6) month period is less than
Fifty Thousand Dollars ($50,000.00), Landlord shall be deemed to have
consented to Tenant's second request to make such Alterations.
Notwithstanding the foregoing, Tenant shall have the right, without consent
of, but upon at least ten (10) business days' prior written notice to
Landlord to make non-structural, cosmetic Alterations within the interior of
the Premises (and which are not visible from the outside of the Premises),
which do not impair the value of the Building, and which cost, in the
aggregate, less than Fifteen Thousand Dollars ($15,000.00) in any twelve (12)
month period during the Term of this Lease, provided that such Alterations
shall nevertheless be subject to all of the remaining requirements of this
Paragraph 7 and payment of the administration fee referred to in this
Paragraph 7, other than the requirement of Landlord's prior consent. In
addition all Alterations shall be performed by duly licensed contractors or
subcontractors reasonably acceptable to Landlord, proof of insurance shall be
submitted to Landlord as required under this Lease, and Landlord reserves the
right to impose reasonable rules and regulations for contractors and
subcontractors. Tenant shall, if requested by Landlord, promptly furnish
Landlord with complete as-built plans and specifications for any Alterations
performed by Tenant to the Premises, at Tenant's sole cost and expense. All
Alterations made in or upon the Premises shall, (i) at Landlord's option,
either be removed by Tenant prior to the end of the Term (and Tenant shall
restore the portion of the Premises affected to its condition existing
immediately prior to such Alteration), or shall remain on the Premises at the
end of the Term, (ii) be constructed, maintained, insured and used by Tenant,
at its risk and expense, in a first-class, good and workmanlike manner, and
in accordance with all Regulations, and (iii) shall be subject to payment of
Landlord's standard alterations supervision fee which standard fee shall not
exceed ten percent (10%) of the cost of the Alterations. If any Alteration
made or initiated by Tenant or the removal thereof shall cause, trigger or
result in any portion of the Project outside of the Premises, any portion of
the Building's shell and core improvements (including restrooms, if any)
within the Premises, or any Building system inside or outside of the Premises
being required by any governmental authority to be altered, improved or
removed, or may otherwise potentially affect such portions of the Project or
any other tenants of the Project, Landlord shall have the option (but not the
obligation) of performing the same at Tenant's expense, in which case Tenant
shall pay to Landlord (within ten (10) days of Landlord's written demand) in
advance Landlord's reasonable estimate of the cost of such work, and any
actual costs of such work in excess of Landlord's estimate, plus an
administrative charge of ten percent (10%) thereof. At least ten (10) days
before beginning construction of any Alteration, Tenant shall give Landlord
written notice of the expected commencement date of that construction to
permit Landlord to post and record a notice of non-responsibility. Upon
substantial completion of construction, if the law so provides, Tenant shall
cause a timely notice of completion to be recorded in the office of the
recorder of the county in which the Building is located. Notwithstanding
anything to the contrary contained in this Paragraph 7.1, at the time
Landlord gives its consent for any Alterations after the initial Tenant
Improvements, Tenant shall also be notified whether or not Landlord will
require that such Alterations be removed upon the expiration or earlier
termination of this Lease. If Landlord fails to so notify Tenant within five
(5) business days after Landlord's receipt of Tenant's written request for
consent, it shall be assumed that Landlord will not require their removal.
7.2 REPAIRS AND MAINTENANCE. Tenant shall maintain at all times
during the Term the Premises and all portions and components of the
improvements and systems contained therein in a first-class, good, clean,
safe, and operable condition, and shall not permit or allow to remain any
waste or damage to any portion of the Premises. Tenant shall repair or
replace, as needed, subject to Landlord's direction and supervision, any
damage to the Building or the Project caused by Tenant or any Tenant Party.
If any such damage occurs outside of the Premises or relates to any Building
system and is caused by Tenant or any Tenant Party, or if Tenant fails to
perform Tenant's obligations under this Paragraph 7.2 or under any other
paragraph of this Lease within ten (10) days' after written notice from
Landlord (except in the case of an emergency, in which case no notice shall
be required), then Landlord may elect to perform such obligations and repair
such damage itself at Tenant's expense. The cost of all repair or replacement
work performed by Landlord under this Paragraph 7.2, plus an administrative
charge of ten percent (10%) of such cost, shall be paid by Tenant to Landlord
within thirty (30) days of receipt of Landlord's invoice therefor as
Additional Rent. Tenant hereby waives all common law and statutory rights or
provisions inconsistent herewith, whether now or hereinafter in effect
(including, without limitation, Sections 1941, 1941.1, and 1941.2 of the
California Civil Code, as amended from time to time). Landlord shall use
reasonable efforts to maintain the common areas of the Project at all times
during the Term with the cost thereof constituting an Operating Expense under
Paragraph 3.2. Landlord shall maintain in good repair, reasonable wear and
tear excepted, the structural soundness of the roof, foundations, and
exterior walls of the Building. The term "exterior walls" as used herein
shall not include windows, glass or plate glass, doors, special store fronts
or office entries; provided, however that Tenant shall in no event be liable
-5-
for damage to exterior walls to the extent caused by structural defects of
the Building. Any damage caused by or repairs necessitated by any negligence
or act of Tenant or Tenant's Parties may be repaired by Landlord at
Landlord's option and Tenant's expense. Tenant shall immediately give
Landlord written notice of any defect or need of repairs in such components
of the Building for which Landlord is responsible, after which Landlord shall
have a reasonable opportunity and the right to enter the Premises at all
reasonable times to repair same. Tenant's failure to provide such notice
shall not release Landlord from its repair and maintenance obligations
described in this Paragraph 7.2, provided, however, that Landlord's shall not
be deemed to have breached its obligations under this Paragraph 7.2 to
perform such repair and maintenance obligations unless and until Landlord
receives notice of any such defect or need of repairs and subsequently fails
to perform in accordance with the terms of this Paragraph 7.2. Landlord's
liability with respect to any defects, repairs, or maintenance for which
Landlord is responsible under any of the provisions of this Lease shall be
limited to the cost of such repairs or maintenance, and there shall be no
abatement of rent and no liability of Landlord by reason of any injury to or
interference with Tenant's business arising from the making of repairs,
alterations or improvements in or to any portion of the Premises, the
Building or the Project or to fixtures, appurtenances or equipment in the
Building. By taking possession of the Premises, Tenant accepts them "as is,"
as being in good order, condition and repair and the condition in which
Landlord is obligated to deliver them and suitable for the Permitted Use and
Tenant's intended operations in the Premises, whether or not any notice of
acceptance is given.
7.3 MECHANIC'S LIENS. Tenant shall not cause, suffer or permit
any mechanic's or materialman's lien, claim, or stop notice to be filed or
asserted against the Premises, the Building or any funds of Landlord for any
work performed, materials furnished, or obligation incurred by or at the
request of Tenant or any Tenant Party. If any such lien, claim or notice is
filed or asserted, then Tenant shall, within ten (10) days after Landlord has
delivered notice of the same to Tenant, either (a) pay and satisfy in full
the amount of (and eliminate of record) the lien, claim or notice or (b)
diligently contest the same and deliver to Landlord a bond or other security
therefor in substance and amount (and issued by an issuer) satisfactory to
Landlord.
8. USE. Tenant shall occupy and use the Premises only for general
office use or uses incidental thereto, all of which shall be consistent with
the standards of a first class office project (the "PERMITTED USE") and shall
comply, at Tenant's expense, with all Regulations relating to the use,
condition, alteration, improvement, access to, and occupancy of the Premises,
including without limitation, Regulations relating to Hazardous Materials
(defined below). Should any Regulation now or hereafter be imposed on Tenant
or Landlord by any governmental body relating to the use or occupancy of the
Premises or the Project common areas by Tenant or any Tenant Party or
concerning occupational, health or safety standards for employers, employees,
or tenants, then Tenant agrees, at its sole cost and expense, to comply
promptly with such Regulations if such Regulations relate to anything within
the Premises or if compliance with such Regulations is within the control of
Tenant and applies to an area outside of the Premises. Tenant shall conduct
its business and shall use reasonable efforts to cause each Tenant Party to
act in such a manner as to (a) not release or permit the release of any
Hazardous Material in, under, on or about the Project in violation of any
Regulations, (b) use or store any Hazardous Materials (other than incidental
amounts of cleaning and office supplies) in or about the Premises or (c) not
create or permit any nuisance or unreasonable interference with or
disturbance of other tenants of the Project or Landlord in its management of
the Project or (d) not create any occupancy density in the Premises or
parking density with respect to Tenant and any Tenant Party at the Project
greater than those specified in the Basic Lease Information. "HAZARDOUS
MATERIAL" means any hazardous, explosive, radioactive or toxic substance,
material or waste which is or becomes regulated by any local, state or
federal governmental authority or agency, including, without limitation, any
material or substance which is (i) defined or listed as a "hazardous waste,"
"extremely hazardous waste," "restricted hazardous waste," "hazardous
substance," "hazardous material," "pollutant" or "contaminant" under any
Regulation, (ii) a flammable explosive, (iii) a radioactive material, (iv) a
polychlorinated biphenyl, (v) asbestos or asbestos containing material, or
(vi) a carcinogen.
9. ASSIGNMENT AND SUBLETTING.
9.1 TRANSFERS; CONSENT. Subject to Paragraph 9.3 below, Tenant
shall not, without the prior written consent of Landlord, (a) assign,
transfer, mortgage, hypothecate, or encumber this Lease or any estate or
interest herein, whether directly, indirectly or by operation of law, (b)
permit any other entity to become a Tenant hereunder by merger,
consolidation, or other reorganization, (c) if Tenant is a corporation,
partnership, limited liability company, limited liability partnership, trust,
association or other business entity (other than a corporation whose stock is
publicly traded), permit, directly or indirectly, the transfer of any
ownership interest in Tenant so as to result in (i) a change in the current
control of Tenant, (ii) a transfer of twenty-five percent (25%) or more in
the aggregate in any twelve (12) month period in the beneficial ownership of
such entity or (iii) a transfer of all or substantially all of the assets of
Tenant, (d) sublet any portion of the Premises, or (e) grant any license,
concession, or other right of occupancy of or with respect to any portion of
the Premises, or (f) permit the use of the Premises by any party other than
Tenant or a Tenant Party (each of the events listed in this Paragraph 9.1
being referred to herein as a "TRANSFER"). If Tenant requests Landlord's
consent to any Transfer, then at least ten (10) business days prior to the
effective date of the proposed Transfer, Tenant shall provide Landlord with a
written description of all terms and conditions of the proposed Transfer and
all consideration therefor (including a calculation of the Transfer Profits
described below), copies of the proposed documentation, and the following
information relating to the proposed transferee: name and address;
information reasonably satisfactory to Landlord concerning the proposed
transferee's business and business history; its proposed use of the Premises;
banking, financial, and other credit information; and general references
sufficient to enable Landlord to determine the proposed transferee's
creditworthiness and character. Landlord shall not unreasonably withhold its
consent to any assignment or subletting of the Premises, provided that the
parties agree that it shall be reasonable for Landlord to withhold any such
consent if, without limitation, Landlord determines in good faith that (A)
the proposed transferee is not of a reasonable financial standing or is not
creditworthy, (B) the proposed transferee is a governmental agency, (C) the
proposed assignee or subtenant is a person with whom Landlord is negotiating,
or has negotiated during the prior ninety (90) days, to lease space in the
Project or the proposed assignee or subtenant is a present tenant of the
Project and with whom Landlord is negotiating, or has negotiated during the
prior one hundred eighty (180) days and Landlord has space available or will
have space available in the Building or Project which space satisfies the
material requirements of such present tenant with respect to its needs for
additional space, including the approximate square footage, the approximately
timing of the leasehold estate and the nature of the existing improvements or
the ability to construct such improvements for the proposed transferee, or
any affiliate thereof, is then an occupant in the Project or has engaged in
discussions with Landlord concerning a lease of direct space in the Project,
(D) the proposed Transfer would result in a breach of any obligation of
Landlord or permit any other tenant in the Project to terminate or modify its
lease, (E) there is then in effect an uncured Event of Default, (F) the
Transfer would increase the occupancy density or parking density of the
Project or any portion thereof, (G) the Transfer would result in an
undesirable tenant mix for the Project, as determined in good faith by
Landlord, (H) the proposed transferee does not enjoy a good reputation, as a
business or as a tenant; or (I) any guarantor of the Lease does not consent
to such Transfer in a form satisfactory to Landlord. Any Transfer made
without Landlord's consent shall be void and, at Landlord's election, shall
constitute an Event of Default by Tenant. Tenant shall also, within ten (10)
days of written demand therefor, pay to Landlord $500 as a review fee for
each Transfer request, and reimburse Landlord for its reasonable attorneys'
fees (which reasonable attorneys' fees shall not exceed $1,500.00 for each
Transfer request) and all other costs incurred in connection with considering
any request for consent to a proposed Transfer. If Landlord consents to a
proposed Transfer, then the proposed transferee shall deliver to Landlord
Landlord's standard form transfer consent and agreement whereby the proposed
transferee expressly assumes the Tenant's obligations hereunder. Landlord's
consent to a Transfer shall not release Tenant from its obligations under
this Lease (or any guarantor of this Lease
-6-
of its obligations with respect thereto), but rather Tenant and its
transferee shall be jointly and severally liable for all obligations under
this Lease allocable to the space subject to such Transfer. Landlord's
consent to any Transfer shall not waive Landlord's rights as to any
subsequent Transfers. In the event of any claim by Tenant that Landlord has
breached its obligations under this Paragraph 9.1, Tenant's remedies shall be
limited to recovery of its out-of-pocket damages and injunctive relief.
Notwithstanding anything to the contrary in this Lease, the transfer of
outstanding capital stock or other listed equity interests, or the purchase
of outstanding capital stock or other listed equity interests, or the
purchase of equity interests issued in an initial public offering of stock,
by persons or parties other than "insiders" within the meaning of the
Securities Exchange Act of 1934, as amended, through the "over-the-counter"
market or any recognized national or international securities exchange shall
not be included in determining whether control has been transferred.
9.2 CANCELLATION AND RECAPTURE. Notwithstanding Paragraph 9.1,
Landlord may (but shall not be obligated to), within ten (10) business days
after submission of Tenant's written request for Landlord's consent to an
assignment or subletting, cancel this Lease as to the portion of the Premises
proposed to be sublet or subject to an assignment of this Lease ("TRANSFER
SPACE") as of the date such proposed Transfer is proposed to be effective
and, thereafter, Landlord may lease such portion of the Premises to the
prospective transferee (or to any other person or entity or not at all)
without liability to Tenant. If Landlord shall not cancel this Lease within
such ten (10) business day period and notwithstanding any Landlord consent to
the proposed Transfer, Tenant shall pay to Landlord, immediately upon receipt
thereof, the entire excess ("TRANSFER PROFITS") of all compensation and other
consideration paid to or for the benefit of Tenant (or any affiliate thereof)
for the Transfer in excess of Base Rent and Additional Rent payable by Tenant
hereunder (with respect to the Transfer Space) during the remainder of the
Term (after straight-line amortization of any reasonable brokerage
commissions and tenant improvement costs paid by Tenant in connection with
the Transfer over the term of the Transfer). In any assignment or subletting
undertaken by Tenant, Tenant shall diligently seek to obtain the maximum
rental amount available in the marketplace for comparable space available for
primary leasing.
9.3 PERMITTED TRANSFEREES. An "Affiliate" means any entity that
(i) controls, is controlled by, or is under common control with Tenant, (ii)
results from the transfer of all or substantially all of Tenant's assets or
stock, or (iii) results from the merger or consolidation of Tenant with
another entity. Notwithstanding anything to the contrary contained in this
Lease, Landlord's consent is not required for and Landlord's recapture rights
shall not apply to any assignment of this Lease or sublease of all or a
portion of the Premises to an Affiliate so long as the following conditions
are met: (a) at least ten (10) business days before any such assignment or
sublease, Landlord receives written notice of such assignment or sublease (as
well as any documents or information reasonably requested by Landlord
regarding the proposed intended transfer and the transferee); (b) Tenant is
not then in default beyond any applicable cure period under this Lease; (c)
if the transfer is an assignment or any other transfer to an Affiliate other
than a sublease, the intended assignee assumes in writing all of Tenant's
obligations under this Lease relating to the Premises in form satisfactory to
Landlord or, if the transfer is a sublease, the intended sublessee accepts
the sublease in form satisfactory to Landlord; (d) the intended transferee
has a tangible net worth, as evidenced by financial statements delivered to
Landlord and certified by an independent certified public accountant in
accordance with generally accepted accounting principles that are
consistently applied, at least equal to Tenant as reflected in the most
recent 10Q SEC filing prior to the date of this Lease; (e) the Premises shall
continue to be operated solely for the use specified in the Basic Lease
Information; and (f) Tenant shall pay to Landlord Landlord's standard fee for
approving assignments and subleases which amount shall not exceed One
Thousand Five Hundred Dollars ($1,500.00) and all actual, out-of-pocket costs
reasonably incurred by Landlord, or any reasonable costs incurred by any
mortgagee or ground lessor for such assignment or subletting, including,
without limitation, reasonable attorneys' fees. No transfer to an Affiliate
in accordance with this subparagraph shall relieve Tenant named herein of any
obligation under this Lease or alter the primary liability of Tenant named
herein for the payment of Rent or for the performance of any other obligation
to be performed by Tenant, including the obligations contained in Paragraph
25 with respect to any Affiliate.
10. INSURANCE, WAIVERS, SUBROGATION AND INDEMNITY.
10.1 INSURANCE. Tenant shall maintain throughout the Term each
of the insurance policies described on EXHIBIT D attached hereto and shall
otherwise comply with the obligations and requirements provided on EXHIBIT D.
To the extent that the cost of such coverage is commercially reasonable and
provided further that Landlord shall not have instituted a self-insurance
program, Landlord shall carry Commercial General Liability insurance covering
bodily injury and property damage liability occurring in or about the
Building and Project. In the event that Landlord elects to institute a
self-insurance program during the Term of this Lease or any extension
thereof, Landlord shall comply in all material respects with the
self-insurance standards imposed by the appropriate insurance industry
governing entities.
10.2 WAIVER OF SUBROGATION. Landlord and Tenant each waives any
claim, loss or cost it might have against the other for any injury to or
death of any person or persons, or damage to or theft, destruction, loss, or
loss of use of any property (a "LOSS"), to the extent the same is insured
against (or is required to be insured against under the terms hereof) under
any "all risk" property damage insurance policy covering the Building, the
Premises, Landlord's or Tenant's fixtures, personal property, leasehold
improvements, or business, regardless of whether the negligence of the other
party caused such Loss.
10.3 INDEMNITY. Subject to Paragraph 10.2, Tenant shall
indemnify, defend and hold Landlord, Spieker Properties, Inc., and each of
their respective directors, shareholders, partners, lenders, members,
managers, contractors, affiliates and employees (collectively, "LANDLORD
INDEMNITEES") from and against all claims, demands, proceedings, losses,
obligations, liabilities, causes of action, suits, judgments, damages,
penalties, costs and expenses (including, without limitation, reasonable
attorneys' fees and court costs) arising from or asserted in connection with
the use or occupancy of the Premises by Tenant or any Tenant Party,
including, without limitation, by reason of any release of any Hazardous
Materials by Tenant or any Tenant Party in, under, on, or about the Project,
or any negligence or misconduct of Tenant or of any Tenant Party in or about
the Premises, or Tenant's breach of any of its covenants under this Lease,
except in each case to the extent arising from the gross negligence or
willful misconduct of Landlord or any Landlord Indemnitee. Except to the
extent expressly provided in this Lease, Tenant hereby waives all claims
against and releases Landlord and each Landlord Indemnitee for any injury to
or death of persons, damage to property or business loss in any manner
related to (i) Tenant's use and occupancy of the Premises, (ii) acts of God,
(iii) acts of third parties, or (iv) any matter outside of the reasonable
control of Landlord. This Paragraph 10.3 shall survive termination or
expiration of this Lease. Landlord shall indemnify, defend by counsel
reasonably acceptable to Tenant, protect and hold Tenant harmless from and
against any and all claims, liabilities, losses, costs, damages, injuries or
expenses, including reasonable attorneys' and consultants' fees and court
costs, demands, causes of action, or judgments arising out of or relating to
the gross negligence or willful misconduct of Landlord or Landlord's agents,
employees or invitees. Notwithstanding the foregoing or anything to the
contrary contained in this Lease, Landlord shall in no event be liable to
Tenant and Tenant hereby waives all claims against Landlord for any injury or
damage to any person or property in or about the Premises, Building or
Project, including without limitation the common areas, whether caused by
theft, fire, rain or water leakage of any character from the roof, walls,
plumbing, sprinklers, pipes, basement or any other portion of the Premises,
Building or Project, or caused by gas, fire, oil or electricity in, on or
about the Premises, Building or Project, or from any other systems except in
each case to the extent caused by the gross negligence or willful misconduct
of Landlord, or by acts of God (including without limitation flood or
earthquake), acts of a
-7-
public enemy, riot, strike, insurrection, war, court order, requisition or
order of governmental body or authority or from any other cause whatsoever,
or for any damage or inconvenience which may arise through repair, subject to
and except as expressly otherwise provided in Paragraph 7.2 of this Lease. In
addition, Landlord shall in no event be liable for (i) injury to Tenant's
business or any loss of income or profit therefrom or from consequential
damages, or (ii) sums up to the amount of insurance proceeds received by
Tenant. The foregoing indemnity by Landlord shall not be applicable to claims
to the extent arising from the negligence or willful misconduct of Tenant or
Tenant's Parties. The foregoing indemnity by Landlord shall survive the
expiration or earlier termination of this Lease.
11. SUBORDINATION; ATTORNMENT.
11.1 SUBORDINATION. Subject to the terms of this Paragraph 11.1,
this Lease is subject and subordinate to all present and future ground or
master leases of the Project and to the lien of all mortgages or deeds of
trust (collectively, "SECURITY INSTRUMENTS") now or hereafter encumbering the
Project, if any, and to all renewals, extensions, modifications,
consolidations and replacements thereof, and to all advances made or
hereafter to be made upon the security of any such Security Instruments,
unless the holders of any such mortgages or deeds of trust, or the lessors
under such ground or master leases (such holders and lessors are sometimes
collectively referred to herein as "HOLDERS") require in writing that this
Lease be superior thereto. Notwithstanding any provision of this Paragraph 11
to the contrary, any Holder of any Security Instrument may at any time
subordinate the lien of its Security Instrument to this Lease without
obtaining Tenant's consent by giving Tenant written notice of such
subordination, in which event this Lease shall be deemed to be senior to the
Security Instrument in question. Tenant shall, within fifteen (15) days of
request to do so by Landlord, execute, acknowledge and deliver to Landlord
such further instruments or assurances as Landlord may deem necessary or
appropriate to evidence or confirm the subordination or superiority of this
Lease to any such Security Instrument; provided, however, that in the event
this Lease or the leasehold estate created hereunder is subject to the prior
rights of any mortgagee or ground lessor, then Landlord shall secure from
such mortgagee or ground lessor an agreement in writing whereby Tenant, so
long as Tenant is not in default hereunder, may remain in possession of the
Premises pursuant to the terms hereof and without any diminution of Tenant's
rights should Landlord become in default with respect to such mortgage or
ground lease or should the Premises become the subject of any action to
foreclose any mortgage or to dispossess Landlord. Such agreement would
provide, among other things, that the new owner following any foreclosure,
sale or conveyance shall not be (i) liable for any act or omission of any
prior landlord or with respect to events occurring prior to acquisition of
ownership; (ii) subject to any offsets or defenses which Tenant might have
against any prior landlord; (iii) bound by prepayment of more than one (1)
month's Rent; or (iv) liable to Tenant for any security deposit not actually
received by such new owner. Each ground landlord, mortgagee, or beneficiary
under a deed of trust shall be an express third party beneficiary of the
provisions of this Paragraph 11.1 and any other provisions of this Lease that
are for the benefit of such party. Tenant hereby irrevocably authorizes
Landlord to execute and deliver in the name of Tenant any such instrument or
instruments if Tenant fails to do so within said fifteen (15) day period.
11.2 ATTORNMENT. Subject to a purchaser's agreement in writing
to be bound by the terms of this Lease, Tenant covenants and agrees that in
the event that any proceedings are brought for the foreclosure of any
mortgage or deed of trust, or if any ground or master lease is terminated, it
shall attorn, without any deductions or set-offs whatsoever, to the purchaser
upon any such foreclosure sale, or to the lessor of such ground or master
lease, as the case may be, if so requested to do so by such purchaser or
lessor, and to recognize such purchaser or lessor as "Landlord" under this
Lease. If requested, Tenant shall enter into a new lease with that successor
on the same terms and conditions as are contained in this Lease (for the
unexpired portion of the Term then remaining).
12. RULES AND REGULATIONS. Tenant shall comply, and shall use reasonable
efforts to cause each Tenant Party to comply, with the Rules and Regulations
of the Building which are attached hereto as EXHIBIT A, and all such
nondiscriminatory modifications, additions, deletions and amendments thereto
as Landlord shall adopt in good faith from time to time. In the event that a
conflict exists between the terms of the Rules and Regulations of the
Building and this Lease, the terms of this Lease shall govern the
relationship of the parties hereto.
13. CONDEMNATION. If the entire Project or Premises are taken by right
of eminent domain or conveyed by Landlord in lieu thereof (a "TAKING"), this
Lease shall terminate as of the date of the Taking. If any part of the
Project becomes subject to a Taking and such Taking will prevent Tenant from
conducting its business in the Premises in a manner reasonably comparable to
that conducted immediately before such Taking for a period of more than one
hundred eighty (180) days, then Tenant may terminate this Lease as of the
date of such Taking by giving written notice to Landlord within thirty (30)
days after the Taking, and all Rent paid or payable hereunder shall be
apportioned between Landlord and Tenant as of the date of such Taking. If any
material portion, but less than all, of the Project, Building or the Premises
becomes subject to a Taking, or if Landlord is required to pay any of the
proceeds received for a Taking to any Holder of any Security Instrument, then
Landlord may terminate this Lease by delivering written notice thereof to
Tenant within thirty (30) days after such Taking, and all Rent paid or
payable hereunder shall be apportioned between Landlord and Tenant as of the
date of such Taking. If this Lease is not so terminated, then Base Rent
thereafter payable hereunder shall be abated for the duration of the Taking
in proportion to that portion of the Premises rendered untenantable by such
Taking. If any Taking occurs, then Landlord shall receive the entire award or
other compensation for the land on which the Project is situated, the
Project, and other improvements taken, and Tenant may separately pursue a
claim (to the extent it will not reduce Landlord's award) against the
condemnor for the value of Tenant's personal property which Tenant is
entitled to remove under this Lease, moving and relocation costs and the
costs of tenant improvements paid for entirely by Tenant. Landlord and Tenant
agree that the provisions of this Paragraph 13 and the remaining provisions
of this Lease shall exclusively govern the rights and obligations of the
parties with respect to any Taking of any portion of the Premises, the
Building, the Project or the land on which the Building is located, and
Landlord and Tenant hereby waive and release each and all of their respective
common law and statutory rights inconsistent herewith, whether now or
hereinafter in effect (including, without limitation, Section 1265.130 of the
California Code of Civil Procedure, as amended from time to time).
14. FIRE OR OTHER CASUALTY.
14.1 REPAIR ESTIMATE; RIGHT TO TERMINATE. If all or any portion
of the Premises, the Building or the Project is damaged by fire or other
casualty (a "CASUALTY"), Landlord shall, within ninety (90) days after
Landlord's discovery of such damage, deliver to Tenant its good faith
estimate (the "DAMAGE NOTICE") of the time period following such notice
needed to repair the damage caused by such Casualty. Landlord may elect to
terminate this Lease in any case where (a) any portion of the Premises or any
material portion of the Project are damaged and (b) either (i) Landlord
estimates in good faith that the repair and restoration of such damage under
Paragraph 14.2 ("RESTORATION") cannot reasonably be completed (without the
payment of overtime) within two hundred (200) days of Landlord's actual
discovery of such damage, (ii) the Holder of any Security Instrument requires
the application of any insurance proceeds with respect to such Casualty to be
applied to the outstanding balance of the obligation secured by such Security
Instrument, (iii) the cost of such Restoration is not fully covered by
insurance proceeds available to Landlord and/or payments received by Landlord
from tenants, or (iv) Tenant shall be entitled to an abatement of rent under
this Paragraph 14 for any period of time in excess of thirty-three percent
(33%) of the remainder of the Term. Such right of termination shall be
exercisable by Landlord by delivery of written notice to Tenant at any time
following the Casualty until forty-five (45) days following the later of (A)
delivery of the Damage Notice or (B) Landlord's discovery or
-8-
determination of any of the events described in clauses (i) through (iv) of
the preceding sentence, and shall be effective upon delivery of such notice
of termination (or if Tenant has not vacated the Premises, upon the
expiration of thirty (30) days thereafter).
14.2 REPAIR OBLIGATION; ABATEMENT OF RENT. Subject to the
provisions of Paragraph 14.1, Landlord shall, within a reasonable time after
the discovery by Landlord of any damage resulting from a Casualty, begin to
repair the damage to the Building and the Premises resulting from such
Casualty and shall proceed with reasonable diligence to restore the Building
and Premises to substantially the same condition as existed immediately
before such Casualty, except for modifications required by Regulations, and
modifications to the Building or the Project reasonably deemed desirable by
Landlord; provided, however, that Landlord shall not be required as part of
the Restoration to repair or replace any of the Alterations, furniture,
equipment, fixtures, and other improvements which may have been placed by, or
at the request of, Tenant or other occupants in the Building or the Premises.
Landlord shall have no liability for any inconvenience or annoyance to Tenant
or injury to Tenant's business as a result of any Casualty, regardless of the
cause therefor. Base Rent, and Additional Rent payable under Paragraph 3.2,
shall abate if and to the extent a Casualty damages the Premises or common
areas in the Project required and essential for access thereto and as a
result thereof all or a material portion of the Premises are rendered unfit
for occupancy, and are not occupied by Tenant, for the period of time
commencing on the date Tenant vacates the portion of the Premises affected on
account thereof and continuing until the date the Restoration to be performed
by Landlord with respect to the Premises (and/or required common areas) is
substantially complete, as determined by Landlord's architect. Landlord and
Tenant agree that the provisions of this Paragraph 14 and the remaining
provisions of this Lease shall exclusively govern the rights and obligations
of the parties with respect to any and all damage to, or destruction of, all
or any portion of the Premises or the Project by Casualty, and Landlord and
Tenant hereby waive and release each and all of their respective common law
and statutory rights inconsistent herewith, whether now or hereinafter in
effect (including, without limitation, Sections 1932(2) and 1933(4) of the
California Civil Code, as amended from time to time).
15. PARKING. Tenant shall have the right to the nonexclusive use of such
portion of the parking facilities of the Project as are designated by
Landlord from time to time for such purpose for the parking of passenger-size
motor vehicles used by Tenant and Tenant Parties only and are not
transferable without Landlord's approval. The use of such parking facilities
shall be subject to the parking rules and regulations attached hereto as
EXHIBIT E, as such rules and regulations may be modified by Landlord from
time to time, for the use of such facilities. In the event Tenant assigns
this Lease or sublets all or a portion of the Premises in accordance with the
terms of this Lease, Tenant shall be entitled to transfer its rights to
parking described in this Paragraph 15 to such assignee or subtenant.
16. EVENTS OF DEFAULT. Each of the following occurrences shall be an
"EVENT OF DEFAULT" and shall constitute a material default and breach of this
Lease by Tenant: (a) any failure by Tenant to pay any installment of Base
Rent, Additional Rent or to make any other payment required to be made by
Tenant hereunder when due; (b) the abandonment or vacation of the Premises by
Tenant, provided, however, that unless Tenant is using the Premises for a
retail use, abandonment or vacation of the Premises shall not be an Event of
Default so long as no other Event of Default has occurred hereunder and
provided Tenant has given Landlord five (5) days' prior written notice of its
intent to vacate the Premises; (c) any failure by Tenant to execute and
deliver any estoppel certificate or other document or instrument described in
Paragraphs 10 (insurance), 11 (subordination) or 21.2 (estoppel certificates)
requested by Landlord, where such failure continues for five (5) days after
delivery of written notice of such failure by Landlord to Tenant; (d) any
failure by Tenant to fully perform any other obligation of Tenant under this
Lease, where such failure continues for thirty (30) days (except where a
shorter period of time is specified in this Lease, in which case such shorter
time period shall apply) after delivery of written notice of such failure by
Landlord to Tenant; provided that if such failure is not capable of being
completed within such thirty (30) day period through no fault of Tenant, such
failure shall not constitute an event of default hereunder so long as Tenant
undertakes to cure the failure within such thirty (30) day period and
thereafter diligently attempts to complete the cure as soon as reasonably
possible, but the total aggregate cure period shall not exceed forty five
(45) days; (e) the voluntary or involuntary filing of a petition by or
against Tenant or any general partner of Tenant (i) in any bankruptcy or
other insolvency proceeding, (ii) seeking any relief under any state or
federal debtor relief law, (iii) for the appointment of a liquidator or
receiver for all or substantially all of Tenant's property or for Tenant's
interest in this Lease, or (iv) for the reorganization or modification of
Tenant's capital structure (provided, however, that if such a petition is
filed against Tenant, then such filing shall not be an Event of Default
unless Tenant fails to have the proceedings initiated by such petition
dismissed within sixty (60) days after the filing thereof); (f) the default
of any guarantor of Tenant's obligations hereunder under any guaranty of this
Lease, the attempted repudiation or revocation of any such guaranty, or the
participation by any such guarantor in any other event described in this
Paragraph 16 (as if this Paragraph 16 referred to such guarantor in place of
Tenant); or (g) any other event, act or omission which any other provision of
this Lease identifies as an Event of Default. Any notice of any failure of
Tenant required under this Paragraph 16 shall be in lieu of, and not in
addition to, any notice required under Section 1161 et seq. of the California
Code of Civil Procedure.
17. REMEDIES. Upon the occurrence of any Event of Default by Tenant,
Landlord shall have, in addition to any other remedies available to Landlord
at law or in equity (all of which remedies shall be distinct, separate, and
cumulative), the option to pursue any one (1) or more of the following
remedies, each and all of which shall be cumulative and nonexclusive, without
any notice or demand whatsoever:
(a) Terminate this Lease, and Landlord may recover from Tenant
the following: (i) the worth at the time of any unpaid rent which has been
earned at the time of such termination; plus (ii) the worth at the time of
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 (iii) the
worth at the time of award of the amount by which the unpaid rent for the
balance of the term after the time of award exceeds the amount of such rental
loss that Tenant proves could have been reasonably avoided; plus (iv) any
other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant's failure to perform its obligations under this
Lease or which in the ordinary course of things would be likely to result
therefrom (specifically including, without limitation, brokerage commissions
and advertising expenses incurred, expenses of remodeling the Premises or any
portion thereof for a new tenant, whether for the same or a different use,
and any special concessions made to obtain a new tenant); and (v) at
Landlord's election, such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time by applicable law. The term
"RENT" as used in this Paragraph 17(a) shall be deemed to be and to mean all
sums of every nature required to be paid by Tenant pursuant to the terms of
this Lease, whether to Landlord or to others. As used in Paragraphs 17(a)(i)
and (ii), above, the "WORTH AT THE TIME OF AWARD" shall be computed by
allowing interest at the Default Rate, but in no case greater than the
maximum amount of such interest permitted by law. As used in Paragraph
17(a)(iii) above, the "WORTH AT THE TIME OF AWARD" shall be computed by
discounting such amount at the discount rate of the Federal Reserve Bank of
San Francisco at the time of award plus one percent (1%).
(b) Landlord shall have the remedy described in California
Civil Code Section 1951.4 (lessor may continue lease in effect after lessee's
breach and abandonment and recover rent as it becomes due, if lessee has the
right to sublet or assign, subject only to reasonable limitations).
Accordingly, if Landlord does not elect to terminate this Lease on account of
any Event of Default by Tenant, Landlord may, from time to time, without
terminating this Lease, enforce all of its rights and remedies under this
Lease, including the right to recover all Rent as it becomes due.
-9-
(c) Landlord shall at all times have the rights and remedies
(which shall be cumulative with each other and cumulative and in addition to
those rights and remedies available under Paragraphs 17(a) and 17(b) above,
or any law or other provision of this Lease), without prior demand or notice
except as required by applicable law, to seek any declaratory, injunctive, or
other equitable relief, and specifically enforce this Lease, or restrain or
enjoin a violation or breach of any provision hereof.
(d) Following the occurrence of three instances of payment of
Rent more than ten (10) days late in any twelve (12) month period, the late
charge set forth in Paragraph 4 shall apply from the date payment was due and
Landlord may, without prejudice to any other rights or remedies available to
it, upon written notice to Tenant, require that all remaining monthly
installments of Rent payable under this Lease shall be payable by cashier's
check or electronic funds transfer three (3) months in advance, and may
require that Tenant increase the Security Deposit to an amount equal to three
times the current month's Rent at the time of the most recent default. In
addition, (i) upon the occurrence of an Event of Default by Tenant, if the
Premises or any portion thereof are sublet, Landlord may, at its option and
in addition and without prejudice to any other remedies herein provided or
provided by law, collect directly from the sublessee(s) all rentals becoming
due to the Tenant and apply such rentals against other sums due hereunder to
Landlord; (ii) without prejudice to any other right or remedy of Landlord, if
Tenant shall be in default under this Lease, Landlord may cure the same at
the expense of Tenant (A) immediately and without notice in the case (1) of
emergency, (2) where such default unreasonably interferes with any other
tenant in the Building, or (3) where such default will result in the
violation of any Regulation or the cancellation of any insurance policy
maintained by Landlord, and (B) in any other case if such default continues
for ten (10) days following the receipt by Tenant of notice of such default
from Landlord (or such longer cure period that is expressly provided in this
Lease) and all costs incurred by Landlord in curing such default(s),
including, without limitation, attorneys' fees, shall be reimbursable by
Tenant as Rent hereunder upon demand, together with interest thereon, from
the date such costs were incurred by Landlord, at the Default Rate; and (iii)
Tenant hereby waives for Tenant and for all those claiming under Tenant all
rights now and hereafter existing to redeem by order or judgment of any court
or by any legal process or writ, Tenant's right of occupancy of the Premises
after any termination of this Lease.
18. SURRENDER OF PREMISES.
(i) No act by Landlord shall be deemed an acceptance of a surrender of the
Premises, and no agreement to accept a surrender of the Premises shall
be valid unless it is in writing and signed by Landlord. At the
expiration or earlier termination of this Lease, Tenant shall deliver
to Landlord all keys (including any electronic access devices and the
like) to the Premises, and, subject to Paragraphs 18(ii) and 7.1,
Tenant shall deliver to Landlord the Premises in the same condition as
existed on the date Tenant originally took possession thereof, ordinary
wear and tear excepted, provided that ordinary wear and tear shall not
include repair and clean up items. By way of example, but without
limitation, repair and clean up items shall include cleaning of all
interior walls, carpets and floors, replacement of damaged or missing
ceiling or floor tiles, window coverings or cover plates, removal of
any Tenant-introduced markings, and repair of all holes and gaps and
repainting required thereby, as well as the removal requirements below.
In addition, prior to the expiration of the Term or any sooner
termination thereof, (a) Tenant shall remove such Alterations as
Landlord shall request and shall restore the portion of the Premises
affected by such Alterations and such removal to its condition existing
immediately prior to the making of such Alterations, (b) Tenant shall
remove from the Premises all unattached trade fixtures, furniture,
equipment and personal property located in the Premises, including,
without limitation, phone equipment, wiring, cabling and all garbage,
waste and debris, and (c) Tenant shall repair all damage to the
Premises or the Project caused by any such removal including, without
limitation, full restoration of all holes and gaps resulting from any
such removal and repainting required thereby. All personal property and
fixtures of Tenant not so removed shall, to the extent permitted under
applicable Regulations, be deemed to have been abandoned by Tenant and
may be appropriated, sold, stored, destroyed, or otherwise disposed of
by Landlord without notice to Tenant and without any obligation to
account for such items. Notwithstanding anything to contrary in this
Lease, if Landlord delivers the Premises to Tenant with wiring and
cabling existing therein, Tenant shall not be required to remove the
wiring and cabling installed in the Premises by Tenant at the
expiration or earlier termination of this Lease.
(ii) Landlord hereby authorizes Tenant to remove existing improvements from
the Premises to allow Tenant to construct the Premises in accordance
with the Space Plan attached to Exhibit C and subject to the terms and
conditions of Exhibit C. In the event that this Lease terminates on or
before the end of the initial Term hereof, Tenant shall pay to Landlord
on or before the expiration date or earlier termination of this Lease
an amount equal to Twenty Thousand and No/100 Dollars ($20,000.00) (the
"DEMISING WALL COST") to offset a portion of the cost of such demising
walls. In the event Tenant exercises its option to renew the Term of
this Lease as provided in Paragraph 22.A, or otherwise extends the Term
beyond the initial thirty-six (36) month Term, Tenant shall not be
required to deliver the Demising Wall Cost to Landlord. Tenant shall
not be required to pay the Demising Wall Cost if this Lease terminates
prior to the end of the initial Term hereof only if such termination
affects the entire Premises and is due solely to a casualty event or a
total taking of the Premises (each as provided in Paragraph 14 hereof)
or a material default by Landlord of this Lease, and the foregoing
results in the termination of this Lease.
19. HOLDING OVER. If Tenant holds over after the expiration or earlier
termination of the Term hereof, with or without the express or implied
consent of Landlord, Tenant shall become and be only a tenant at sufferance
at a daily rent equal to one-thirtieth of the greater of (a) the then
prevailing monthly fair market rental rate as determined by Landlord in its
sole and absolute discretion, or (b) one hundred fifty percent (150%) of the
monthly installment of Base Rent (and estimated Additional Rent payable under
Paragraph 3.2) payable by Tenant immediately prior to such expiration or
termination which rate shall be applicable during the first two (2) months of
Tenant's holding over and two hundred percent (200%) of the monthly
installment of Base Rent (and estimated Additional Rent payable under
Paragraph 3.2) payable by Tenant immediately prior to such expiration or
termination which rate shall be applicable thereafter, and otherwise upon the
terms, covenants and conditions herein specified, so far as applicable, as
reasonably determined by Landlord. Neither any provision hereof nor any
acceptance by Landlord of any Rent after any such expiration or earlier
termination (including, without limitation, through any "lockbox") shall be
deemed a consent to any holdover hereunder or result in a renewal of this
Lease or an extension of the Term, or any waiver of any of Landlord's rights
or remedies with respect to such holdover. Notwithstanding any provision to
the contrary contained herein, (i) Landlord expressly reserves the right to
require Tenant to surrender possession of the Premises upon the expiration of
the Term or upon the earlier termination hereof or at any time during any
holdover, and the right to assert any remedy at law or in equity to evict
Tenant and collect damages in connection with any such holdover, and (ii)
Tenant shall indemnify, defend and hold Landlord harmless from and against
any and all claims, demands, actions, proceedings, losses, damages,
liabilities, obligations, penalties, costs and expenses, including, without
limitation, all lost profits and other consequential damages, attorneys'
fees, consultants' fees and court costs incurred or suffered by or asserted
against Landlord by reason of Tenant's failure to surrender the Premises on
the expiration or earlier termination of this Lease in accordance with the
provisions of this Lease.
20. SUBSTITUTION SPACE. Intentionally Omitted.
-10-
21. MISCELLANEOUS.
21.1 LANDLORD TRANSFERS AND LIABILITY. Landlord may, without
restriction, sell, assign or transfer in any manner all or any portion of the
Project, any interest therein or any of Landlord's rights under this Lease. If
Landlord assigns its rights under this Lease, then Landlord shall automatically
be released from any further obligations hereunder, provided that the assignee
thereof assumes in writing all of Landlord's obligations hereunder. The
liability of Landlord to Tenant for any default by Landlord under the terms of
this Lease or with respect to any obligation or liability related to the
Premises or the Project shall be recoverable only from the interest of Landlord
in the Project, and neither Landlord nor any affiliate thereof shall have any
personal liability with respect thereto and in no case shall Landlord be liable
to Tenant for any lost profits, damage to business, or any form of special,
indirect or consequential damage on account of any breach of this Lease.
21.2 ESTOPPEL CERTIFICATES; FINANCIAL STATEMENTS. At any time and
from time to time during the Term, Tenant shall, without charge, execute,
acknowledge and deliver to Landlord within ten (10) business days after
Landlord's request therefor, an estoppel certificate in recordable form
containing such factual certifications and other provisions as are found in the
estoppel certificate forms reasonably requested by institutional lenders and
purchasers. Tenant agrees in any case that (a) the foregoing certificate may be
relied on by anyone holding or proposing to acquire any interest in the Project
from or through Landlord or by any mortgagee or lessor or prospective mortgagee
or lessor of the Project or of any interest therein and (b) the form of estoppel
certificate shall be in the form of, at Landlord's election, the standard form
of such present or prospective lender, lessor or purchaser (or any form
substantially similar thereto), or any other form that Landlord shall reasonably
select. At the request of Landlord from time to time, Tenant shall provide to
Landlord within ten (10) days of Landlord's request therefor Tenant's and any
guarantor's current financial statements.
21.3 NOTICES. Notices, requests, consents or other communications
desired or required to be given by or on behalf of Landlord or Tenant under this
Lease shall be effective only if given in writing and sent by (a) registered or
certified United States mail, postage prepaid, (b) nationally recognized express
mail courier that provides written evidence of delivery, fees prepaid, or (c)
facsimile and United States mail, postage prepaid, and addressed as set forth in
the Basic Lease Information, or at such other address in the State of California
as may be specified from time to time, in writing, or, if to Tenant, at the
Premises. Any such notice, request, consent, or other communication shall only
be deemed given (i) if sent by registered or certified United States mail, on
the day it is officially delivered to or refused by the intended recipient, (ii)
if sent by nationally recognized express mail courier, on the date it is
officially recorded by such courier, (iii) if delivered by facsimile, on the
date the sender obtains written telephonic confirmation that the electronic
transmission was received, or (iv) if delivered personally, upon delivery or, if
refused by the intended recipient, upon attempted delivery.
21.4 PAYMENT BY TENANT; NON-WAIVER. Landlord's acceptance of Rent
(including, without limitation, through any "lockbox") following an Event of
Default shall not waive Landlord's rights regarding such Event of Default. No
waiver by Landlord of any violation or breach of any of the terms contained
herein shall waive Landlord's rights regarding any future violation of such
terms. Landlord's acceptance of any partial payment of Rent shall not waive
Landlord's rights with regard to the remaining portion of the Rent that is due,
regardless of any endorsement or other statement on any instrument delivered in
payment of Rent or any writing delivered in connection therewith; accordingly,
Landlord's acceptance of a partial payment of Rent shall not constitute an
accord and satisfaction of the full amount of the Rent that is due.
21.5 CERTAIN RIGHTS RESERVED BY LANDLORD. Landlord hereby reserves
and shall have the following rights with respect to the Premises and the
Project: (a) to decorate and to make inspections, repairs, alterations,
additions, changes, or improvements, whether structural or otherwise, in and
about the Project, the Building, the Premises or any part thereof; upon
reasonable prior notice except in the case of an emergency when no notice shall
be required, to enter upon the Premises and, during the continuance of any such
work, to temporarily close doors, entryways, public space, and corridors in the
Project or the Building; to interrupt or suspend temporarily Building services
and facilities; to change the name of the Building or the Project; and to change
the arrangement and location of entrances or passageways, doors, and doorways,
corridors, elevators, stairs, restrooms, common areas, or other public parts of
the Building or the Project; (b) to take such measures as Landlord deems
advisable in good faith for the security of the Building and its occupants; to
temporarily deny access to the Building to any person; and to close the Building
after ordinary business hours and on Sundays and Holidays, subject, however, to
Tenant's right to enter when the Building is closed after ordinary business
hours under such rules and regulations as Landlord may reasonably prescribe from
time to time during the Term; and (c) upon reasonable prior notice except in the
case of an emergency when no notice shall be required, to enter the Premises at
reasonable hours (or at any time in an emergency) to perform repairs, to take
any action authorized hereunder, or to show the Premises to prospective
purchasers or lenders, or, during the last six (6) months of the Term,
prospective tenants; provided that in any such instances, Landlord shall make
commercially reasonable efforts to avoid any material and adverse interference
with Tenant's Permitted Use of the Premises.
21.6 MISCELLANEOUS. If any clause or provision of this Lease is
illegal, invalid, or unenforceable under present or future laws, then the
remainder of this Lease shall not be affected thereby. This Lease may not be
amended except by instrument in writing signed by Landlord and Tenant. No
provision of this Lease shall be deemed to have been waived by Landlord unless
such waiver is in writing signed by Landlord. The terms and conditions contained
in this Lease shall inure to the benefit of and be binding upon the parties
hereto, and upon their respective successors in interest and legal
representatives, except as otherwise herein expressly provided. This Lease
constitutes the entire agreement between Landlord and Tenant regarding the
subject matter hereof and supersedes all oral statements and prior writings
relating thereto, including, but not limited to, any Lease for the Premises
signed by Tenant and/or Landlord prior to the date hereof. Tenant and the person
or persons signing on behalf of Tenant represent and warrant that Tenant has
full right and authority to enter into this Lease, and that all persons signing
this Lease on its behalf are authorized to do so. If Tenant is comprised of more
than one party, each such party shall be jointly and severally liable for
Tenant's obligations under this Lease. All exhibits and attachments attached
hereto are incorporated herein by this reference. This Lease shall be governed
by and construed in accordance with the laws of the State of California. In any
action which Landlord or Tenant brings to enforce its respective rights
hereunder, the unsuccessful party shall pay all costs incurred by the prevailing
party, including without limitation, reasonable attorneys' fees and court costs.
Tenant shall not record this Lease or any memorandum hereof. TO THE MAXIMUM
EXTENT PERMITTED BY LAW, LANDLORD AND TENANT EACH WAIVE RIGHT TO TRIAL BY JURY
IN ANY LITIGATION ARISING OUT OF OR WITH RESPECT TO THIS LEASE. Submission of
this Lease to Tenant does not constitute an option or offer to lease and this
Lease is not effective otherwise until execution and delivery by both Landlord
and Tenant. This Lease may be executed in any number of counterparts, each of
which shall be deemed an original. Time is of the essence as to the performance
of each covenant hereunder in which time of performance is a factor.
22. ADDENDA/ADDITIONAL PROVISIONS.
A. OPTION TO RENEW. Tenant shall, provided this Lease is in full force and
effect and Tenant is not in default beyond any applicable cure period under any
of the terms and conditions of this Lease on the date Tenant exercises its
option to renew and upon commencement of the renewal term (provided that
Landlord may, in its sole discretion, waive each of the preceding conditions),
have one (1) option to renew this Lease for a term of
-11-
one (1) year, for the Premises in "as is" condition and on the same terms and
conditions set forth in this Lease, except as modified by the terms,
covenants and conditions set forth below:
(1) If Tenant elects to exercise such option, then Tenant shall
provide Landlord with written notice no later than 5:00 p.m.
(Pacific Standard Time) on the date which is 180 days prior to
the expiration of the Term of this Lease. If Tenant fails to
provide such notice, Tenant shall have no further or
additional right to extend or renew the Term of this Lease.
(2) The Base Rent in effect at the expiration of the then current
term of this Lease shall be increased to Fifty-two Thousand
Two Hundred Twenty-two and 50/100 Dollars ($52,222.50) per
month. All other terms and conditions of this Lease shall
remain in full force and effect and shall apply to the renewal
term except that Tenant shall have no additional option to
renew unless otherwise mutually agreed in writing by each of
Landlord and Tenant.
B. ROOF RIGHTS.
1. During the Term, Tenant shall have the nonexclusive right to install on
the roof of the Building one (1) satellite dish(s) which is no more
than twenty-four (24) inches in diameter and does exceed two hundred
(200) pounds installed, which shall be enclosed by a screen and the
nonexclusive right to run connecting lines or cables thereto from the
Premises (such satellite dish/antennae and such connecting lines and
related equipment herein referred to collectively as the "Equipment").
Tenant shall not penetrate the roof in connection with any installation
or reinstallation of the Equipment without Landlord's prior written
consent, which may be withheld in Landlord's sole discretion. The plans
and specifications for all the Equipment shall be delivered by Tenant
to Landlord for Landlord's review and approval. Such plans and
specifications, including, without limitation, the location of the
Equipment, shall be approved by Landlord in writing prior to any
installation. In no event shall the Equipment or any portion thereof be
visible from street level. Prior to the commencement of any
installation or other work performed on or about the Building, Landlord
shall approve all contractors and subcontractors which shall perform
such work. Tenant shall be responsible for any damage to the roof,
conduit systems or other portions of the Building or Building systems
as a result of Tenant's installation, maintenance and/or removal of the
Equipment.
2. During the initial Term of this Lease, Tenant shall not be required to
pay to Landlord rent for the use of the roof and roof space to
accommodate Tenant's Equipment. In the event that Tenant extends the
Term of this Lease, Tenant may be required, at Landlord's election, to
pay rent for the use of the roof and roof space to accommodate Tenant's
Equipment, which amount shall not exceed Three Hundred Dollars
($300.00) per month and shall be due and payable on the first day of
each month with each installment of Base Rent.
3. Tenant, at Tenant's sole cost and expense, shall comply with all
Regulations regarding the installation, construction, operation,
maintenance and removal of the Equipment and shall be solely
responsible for obtaining and maintaining in force all permits,
licenses and approvals necessary for such operations.
4. Tenant shall be responsible for and promptly shall pay all taxes,
assessments, charges, fees and other governmental impositions levied or
assessed on the Equipment or based on the operation thereof.
5. Landlord may require Tenant, upon thirty (30) days prior notice and at
Landlord's sole cost and expense, to relocate the Equipment during the
Term to a location approved by Tenant, which approval shall not be
unreasonably withheld, conditioned or delayed. Tenant shall not change
the location of, or alter or install additional Equipment or paint any
of the other Equipment without Landlord's prior written consent.
6. Operation of the Equipment shall not interfere in any manner with
equipment systems or utility systems of other tenants of the Project,
including without limitation, telephones, dictation equipment,
lighting, heat and air conditioning, computers, electrical systems and
elevators. If operation of the Equipment causes such interference, as
determined by Landlord in Landlord's reasonable discretion, Tenant
immediately shall suspend operation of the Equipment until Tenant
eliminates such interference.
7. Tenant shall maintain the Equipment in good condition and repair, at
Tenant's sole cost and expense. Landlord may from time to time require
that Tenant repaint the satellite dishes at Tenant's expense to keep
the same in an attractive condition. In the event that Tenant fails to
repair and maintain the Equipment in accordance with this Lease,
Landlord may, but shall not be obligated to, make any such repairs or
perform any maintenance to the Equipment and Tenant shall reimburse
Landlord upon demand for all costs and expenses incurred by Landlord in
connection therewith, plus a reasonable administrative fee.
8. Tenant may access the roof for repair and maintenance of the Equipment,
only during normal business hours, on not less than 24 hours prior
written notice to Landlord. Tenant shall designate in writing to
Landlord all persons whom Tenant authorizes to have access to the roof
for such purposes. Upon such designation and prior identification to
Landlords' building security personnel, such authorized persons shall
be granted access to the roof by Landlord's building engineer. Tenant
shall be responsible for all costs and expenses incurred by Landlord in
connection with Tenant's access to the roof pursuant to this Paragraph.
Landlord or Landlord's agent may accompany Tenant during such access.
9. Tenant shall indemnify, defend, protect and hold harmless Landlord from
and against any and all claims related to the Equipment or operation of
the same as if the Equipment were located wholly within the Premises.
Tenant shall provide evidence satisfactory to Landlord that Tenant's
property and liability insurance policies required under this Lease
include coverage for the Equipment and any claim, loss, damage, or
liability relating to the Equipment.
10. Landlord shall have no responsibility or liability whatsoever relating
to (i) maintenance or repair of the Equipment, (ii) damage to the
Equipment; (iii) damage to persons or property relating to the
Equipment or the operation thereof; or (iv) interference with use of
the Equipment arising out of utility interruption or any other cause,
except for injury to persons or damage to property caused solely by the
active negligence or intentional misconduct of Landlord, its agents or
any other parties related to Landlord. In no event shall Landlord be
responsible for consequential damages. Upon installation of the
Equipment, Tenant shall accept the area where the Equipment is located
in its "as is" condition. Tenant acknowledges that the roof location of
the Equipment is suitable for Tenant's needs, and acknowledges that
Landlord shall have no obligation whatsoever to improve, maintain or
repair the area in which the Equipment will be installed.
11. Tenant shall use the Equipment solely for Tenant's operations
associated with the Permitted Use and within Tenant's Premises and
shall not use or allow use of the Equipment, for consideration or
otherwise, for the benefit of other tenants in the Building or any
other person or entity.
Tenant shall, at Tenant's sole cost and expense, remove such portions of the
Equipment as Landlord may designate upon the expiration or earlier termination
of this Lease, and restore the affected areas to their condition prior to
installation of the Equipment. If Tenant fails to so remove the Equipment,
Landlord reserves the right to do so, and the expense of the same shall be
immediately due and payable from Tenant to Landlord as additional rent, together
with interest and late charges as provided in this Lease, plus a reasonable
administrative fee.
-12-
C. LETTER OF CREDIT.
1. DELIVERY OF LETTER OF CREDIT. Tenant may replace the Security Deposit
delivered to Landlord pursuant to the terms of this Lease, with and
cause to be in effect during the Term, an unconditional, irrevocable
letter of credit ("LOC") in the amount specified for the Security
Deposit in the Basic Lease Information, as it may be increased as
provided in this Lease (the "LOC AMOUNT") which LOC shall renew
automatically from year to year. The LOC shall be in a form reasonably
acceptable to Landlord and shall be issued by an LOC bank selected by
Tenant and acceptable to Landlord. An LOC bank is a bank that accepts
deposits, maintains accounts, has a local office that will negotiate a
letter of credit, and the deposits of which are insured by the Federal
Deposit Insurance Corporation. Tenant shall pay all expenses, points,
or fees incurred by Tenant in obtaining the LOC. The LOC shall not be
mortgaged, assigned or encumbered in any manner whatsoever by Tenant
without the prior written consent of Landlord. Tenant acknowledges that
Landlord has the right to transfer or mortgage its interest in the
Project, the Building and in this Lease and Tenant agrees that in the
event of any such transfer or mortgage, Landlord shall transfer or
assign the LOC and/or the LOC Security Deposit (as defined below) to
the transferee or mortgagee, and in the event of such transfer, Tenant
shall look solely to such transferee or mortgagee for the return of the
LOC and/or the LOC Security Deposit.
2. REPLACEMENT OF LETTER OF CREDIT. Tenant may, from time to time, replace
any existing LOC with a new LOC if the new LOC (a) becomes effective
prior to the expiration of the LOC that it replaces; (b) is in the
required LOC amount; (c) is issued by an LOC bank acceptable to
Landlord; and (d) otherwise complies with the requirements of this
Paragraph 22C.
3. LANDLORD'S RIGHT TO DRAW ON LETTER OF CREDIT. Landlord shall hold the
LOC as security for the performance of Tenant's obligations under this
Lease. If, after notice and failure to cure within any applicable
period provided in this Lease, Tenant defaults on any provision of this
Lease, Landlord may, without prejudice to any other remedy it has, draw
on that portion of the LOC necessary to (a) pay Rent or other sum in
default; (b) pay or reimburse Landlord for any amount that Landlord may
spend or become obligated to spend in exercising Landlord's rights
under Paragraph 7.2 (Repairs and Maintenance); and/or (c) compensate
Landlord for any expense, loss, or damage that Landlord may suffer
because of Tenant's default. If Tenant fails to renew or replace the
LOC at least five (5) business days before its expiration, Landlord
may, without prejudice to any other remedy it has, draw on the entire
amount of the LOC and hold and/or disburse pursuant to the terms of
this Lease.
4. LOC SECURITY DEPOSIT. Any amount of the LOC that is drawn on by
Landlord but not applied by Landlord in accordance with the terms of
this Lease shall be held by Landlord as a security deposit (the "LOC
SECURITY DEPOSIT") in accordance with Paragraph 5 of this Lease.
5. RESTORATION OF LETTER OF CREDIT AND LOC SECURITY DEPOSIT. If Landlord
draws on any portion of the LOC and/or applies all or any portion of
such draw, Tenant shall, within five (5) business days after written
demand by Landlord, either (a) deposit cash with Landlord in an amount
that, when added to the amount remaining under the LOC and the amount
of any LOC Security Deposit, shall equal the LOC Amount then required
under this Paragraph 22C; or (b) reinstate the LOC to the full LOC
Amount.
D. REIMBURSEMENT FEE. The parties acknowledge and agree that Tenant is
relying on Landlord's representation that as of the date hereof, the
lease with the current tenant, Age Wave Communications Corp. ("Age
Wage"), has been rejected by the Bankruptcy Court (subject only to the
payment as directed by the Bankruptcy Court pursuant to the ruling of
the Bankruptcy Court on November 15, 1999) and/or terminated in
accordance with the terms required by the Bankruptcy Court, if any. In
addition, Landlord represents that upon such payment as directed by the
Bankruptcy Court, Landlord has full legal capacity to deliver
possession of the Premises free of any claims by Age Wave, its estate
or any third party. Based on this representation, Tenant hereby agrees
that it shall pay to Landlord simultaneously with the execution of this
Lease, the sum of $523,712.58 (the "Reimbursement Fee") via wire
transfer or immediately available funds; provided that, if the Premises
shall not be delivered to Tenant within three (3) business days hereof
pursuant to the terms and conditions contained herein, Landlord shall
return the Reimbursement Fee to Tenant, this Lease shall terminate, and
neither party shall have any further obligations hereunder and provided
further that in the event Tenant cannot retain possession of the
Premises as a result of any act or claim by any third party, Landlord
shall pay to Tenant the Reimbursement Fee together with all actual
costs incurred by Tenant in connection with preparing the Premises for
occupancy.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-13-
EXHIBIT A
RULES AND REGULATIONS
1. Driveways, sidewalks, halls, passages, exits, entrances, elevators,
escalators and stairways shall not be obstructed by tenants or used by
tenants for any purpose other than for ingress to and egress from their
respective premises. The driveways, sidewalks, halls, passages, exits,
entrances, elevators and stairways are not for the use of the general
public and Landlord shall in all cases retain the right to control and
prevent access thereto by all persons whose presence, in the judgment
of Landlord, shall be prejudicial to the safety, character, reputation
and interests of the Building, the Project and its tenants, provided
that nothing herein contained shall be construed to prevent such access
to persons with whom any tenant normally deals in the ordinary course
of such tenant's business unless such persons are engaged in illegal
activities. No tenant, and no employees or invitees of any tenant,
shall go upon the roof of any Building, except as authorized by
Landlord. No tenant, and no employees or invitees of any tenant shall
move any common area furniture without Landlord's consent.
2. No sign, placard, banner, picture, name, advertisement or notice,
visible from the exterior of the Premises or the Building or the common
areas of the Building shall be inscribed, painted, affixed, installed
or otherwise displayed by Tenant either on its Premises or any part of
the Building or Project without the prior written consent of Landlord
in Landlord's sole and absolute discretion. Landlord shall have the
right to remove any such sign, placard, banner, picture, name,
advertisement, or notice without notice to and at the expense of
Tenant, which were installed or displayed in violation of this rule. If
Landlord shall have given such consent to Tenant at any time, whether
before or after the execution of Tenant's Lease, such consent shall in
no way operate as a waiver or release of any of the provisions hereof
or of the Lease, and shall be deemed to relate only to the particular
sign, placard, banner, picture, name, advertisement or notice so
consented to by Landlord and shall not be construed as dispensing with
the necessity of obtaining the specific written consent of Landlord
with respect to any other such sign, placard, banner, picture, name,
advertisement or notice.
All approved signs or lettering on doors and walls shall be printed,
painted, affixed or inscribed at the expense of Tenant by a person or
vendor approved by Landlord and shall be removed by Tenant at the time
of vacancy.
3. The directory of the Building or Project will be provided exclusively
for the display of the name and location of tenants only and Landlord
reserves the right to charge for the use thereof and to exclude any
other names therefrom.
4. No curtains, draperies, blinds, shutters, shades, screens or other
coverings, awnings, hangings or decorations shall be attached to, hung
or placed in, or used in connection with, any window or door on the
Premises without the prior written consent of Landlord. In any event
with the prior written consent of Landlord, all such items shall be
installed inboard of Landlord's standard window covering and shall in
no way be visible from the exterior of the Building. All electrical
ceiling fixtures hung in offices or spaces along the perimeter of the
Building must be fluorescent or of a quality, type, design, and bulb
color approved by Landlord. No articles shall be placed or kept on the
window sills so as to be visible from the exterior of the Building. No
articles shall be placed against glass partitions or doors which
Landlord considers unsightly from outside Tenant's Premises.
5. Landlord reserves the right to exclude from the Building and the
Project, between the hours of 6 p.m. and 8 a.m. and at all hours on
Saturdays, Sundays and legal holidays, all persons who are not tenants
or their accompanied guests in the Building. Each tenant shall be
responsible for all persons for whom it allows to enter the Building or
the Project and shall be liable to Landlord for all acts of such
persons.
Landlord and its agents shall not be liable for damages for any error
concerning the admission to, or exclusion from, the Building or the
Project of any person.
During the continuance of any invasion, mob, riot, public excitement or
other circumstance rendering such action advisable in Landlord's
opinion, Landlord reserves the right (but shall not be obligated) to
prevent access to the Building and the Project during the continuance
of that event by any means it considers appropriate for the safety of
tenants and protection of the Building, property in the Building and
the Project.
6. All cleaning and janitorial services for the Building and the Premises
shall be provided exclusively through Landlord. Except with the written
consent of Landlord, no person or persons other than those approved by
Landlord shall be permitted to enter the Building for the purpose of
cleaning the same. Tenant shall not cause any unnecessary labor by
reason of Tenant's carelessness or indifference in the preservation of
good order and cleanliness of its Premises. Landlord shall in no way be
responsible to Tenant for any loss of property on the Premises, however
occurring, or for any damage done to Tenant's property by the janitor
or any other employee or any other person.
7. Tenant shall see that all doors of its Premises are closed and securely
locked and must observe strict care and caution that all water faucets
or water apparatus, coffee pots or other heat-generating devices are
entirely shut off before Tenant or its employees leave the Premises,
and that all utilities shall likewise be carefully shut off, so as to
prevent waste or damage. Tenant shall be responsible for any damage or
injuries sustained by other tenants or occupants of the Building or
Project or by Landlord for noncompliance with this rule. On
multiple-tenancy floors, all tenants shall keep the door or doors to
the Building corridors closed at all times except for ingress and
egress.
8. Tenant shall not use any method of heating or air-conditioning other
than that supplied by Landlord. As more specifically provided in
Tenant's lease of the Premises, Tenant shall not waste electricity,
water or air-conditioning and agrees to cooperate fully with Landlord
to assure the most effective operation of the Building's heating and
air-conditioning, and shall refrain from attempting to adjust any
controls other than room thermostats installed for Tenant's use.
9. Landlord will furnish Tenant free of charge with two keys to each door
in the Premises. Landlord may make a reasonable charge for any
additional keys, and Tenant shall not make or have made additional
keys. Tenant shall not alter any lock or access device or install a new
or additional lock or access device or bolt on any door of its
Premises, without the prior written consent of Landlord. If Landlord
shall give its consent, Tenant shall in each case furnish Landlord with
a key for any such lock. Tenant, upon the termination of its tenancy,
shall deliver to Landlord the keys for all doors which have been
furnished to Tenant, and in the event of loss of any keys so furnished,
shall pay Landlord therefor.
10. The restrooms, toilets, urinals, wash bowls and other apparatus shall
not be used for any purpose other than that for which they were
constructed and no foreign substance of any kind whatsoever shall be
thrown into them. The expense of any breakage, stoppage, or damage
resulting from violation of this rule shall be borne by the tenant who,
or whose employees or invitees, shall have caused the breakage,
stoppage, or damage.
11. Tenant shall not use or keep in or on the Premises, the Building or the
Project any kerosene, gasoline, or inflammable or combustible fluid or
material.
12. Tenant shall not use, keep or permit to be used or kept in its Premises
any foul or noxious gas or substance. Tenant shall not allow the
Premises to be occupied or used in a manner offensive or objectionable
to Landlord or other occupants of the Building by reason of noise,
odors and/or vibrations or interfere in any way with other tenants or
those having business therein, nor shall any animals or birds be
brought or kept in or about the Premises, the
Building, or the Project.
13. No cooking shall be done or permitted by any tenant on the Premises,
except that use by the tenant of Underwriters' Laboratory (UL) approved
equipment, refrigerators and microwave ovens may be used in the
Premises for the preparation of coffee, tea, hot chocolate and similar
beverages, storing and heating food for tenants and their employees
shall be permitted. All uses must be in accordance with all applicable
federal, state and city laws, codes, ordinances, rules and regulations
and the Lease.
14. Except with the prior written consent of Landlord, Tenant shall not
sell, or permit the sale, at retail, of newspapers, magazines,
periodicals, theater tickets or any other goods or merchandise in or on
the Premises, nor shall Tenant carry on, or permit or allow any
employee or other person to carry on, the business of stenography,
typewriting or any similar business in or from the Premises for the
service or accommodation of occupants of any other portion of the
Building, nor shall the Premises be used for the storage of merchandise
or for manufacturing of any kind, or the business of a public barber
shop, beauty parlor, nor shall the Premises be used for any illegal,
improper, immoral or objectionable purpose, or any business or activity
other than that specifically provided for in such Tenant's Lease.
Tenant shall not accept hairstyling, barbering, shoeshine, nail,
massage or similar services in the Premises or common areas except as
authorized by Landlord.
15. If Tenant requires telegraphic, telephonic, telecommunications, data
processing, burglar alarm or similar services, it shall first obtain,
and comply with, Landlord's instructions in their installation. The
cost of purchasing, installation and maintenance of such services shall
be borne solely by Tenant.
16. Landlord will direct electricians as to where and how telephone,
telegraph and electrical wires are to be introduced or installed. No
boring or cutting for wires will be allowed without the prior written
consent of Landlord. The location of burglar alarms, telephones, call
boxes and other office equipment affixed to the Premises shall be
subject to the prior written approval of Landlord.
17. Tenant shall not install any radio or television antenna, satellite
dish, loudspeaker or any other device on the exterior walls or the roof
of the Building, without Landlord's consent. Tenant shall not interfere
with radio or television broadcasting or reception from or in the
Building, the Project or elsewhere.
18. Tenant shall not mark, or drive nails, screws or drill into the
partitions, woodwork or drywall or in any way deface the Premises or
any part thereof without Landlord's consent. Tenant may install nails
and screws in areas of the Premises that have been identified for those
purposes to Landlord by Tenant at the time those walls or partitions
were installed in the Premises. Tenant shall not lay linoleum, tile,
carpet or any other floor covering so that the same shall be affixed to
the floor of its Premises in any manner except as approved in writing
by Landlord. The expense of repairing any damage resulting from a
violation of this rule or the removal of any floor covering shall be
borne by the tenant by whom, or by whose contractors, employees or
invitees, the damage shall have been caused.
19. No furniture, freight, equipment, materials, supplies, packages,
merchandise or other property will be received in the Building or
carried up or down the elevators except between such hours and in such
elevators as shall be designated by Landlord.
Tenant shall not place a load upon any floor of its Premises which
exceeds the load per square foot which such floor was designed to carry
or which is allowed by law. Landlord shall have the right to prescribe
the weight, size and position of all safes, furniture or other heavy
equipment brought into the Building. Safes or other heavy objects
shall, if considered necessary by Landlord, stand on wood strips of
such thickness as determined by Landlord to be necessary to properly
distribute the weight thereof. Landlord will not be responsible for
loss of or damage to any such safe, equipment or property from any
cause, and all damage done to the Building by moving or maintaining any
such safe, equipment or other property shall be repaired at the expense
of Tenant.
Business machines and mechanical equipment belonging to Tenant which
cause noise or vibration that may be transmitted to the structure of
the Building or to any space therein to such a degree as to be
objectionable to Landlord or to any tenants in the Building shall be
placed and maintained by Tenant, at Tenant's expense, on vibration
eliminators or other devices sufficient to eliminate noise or
vibration. The persons employed to move such equipment in or out of the
Building must be acceptable to Landlord.
20. Tenant shall not install, maintain or operate upon its Premises any
vending machine without the written consent of Landlord.
21. There shall not be used in any space, or in the public areas of the
Project either by Tenant or others, any hand trucks except those
equipped with rubber tires and side guards or such other material
handling equipment as Landlord may approve. Tenants using hand trucks
shall be required to use the freight elevator, or such elevator as
Landlord shall designate. No other vehicles of any kind shall be
brought by Tenant into or kept in or about its Premises.
22. Each tenant shall store all its trash and garbage within the interior
of the Premises. Tenant shall not place in the trash boxes or
receptacles any personal trash or any material that may not or cannot
be disposed of in the ordinary and customary manner of removing and
disposing of trash and garbage in the city, without violation of any
law or ordinance governing such disposal. All trash, garbage and refuse
disposal shall be made only through entry-ways and elevators provided
for such purposes and at such times as Landlord shall designate. If the
Building has implemented a building-wide recycling program for tenants,
Tenant shall use good faith efforts to participate in said program.
23. Canvassing, soliciting, distribution of handbills or any other written
material and peddling in the Building and the Project are prohibited
and each tenant shall cooperate to prevent the same. No tenant shall
make room-to-room solicitation of business from other tenants in the
Building or the Project, without the written consent of Landlord.
24. Landlord shall have the right, exercisable without notice and without
liability to any tenant, to change the name and address of the Building
and the Project.
25. Landlord reserves the right to exclude or expel from the Project any
person who, in Landlord's judgment, is under the influence of alcohol
or drugs or who commits any act in violation of any of these Rules and
Regulations.
26. Without the prior written consent of Landlord, Tenant shall not use the
name of the Building or the Project or any photograph or other likeness
of the Building or the Project in connection with, or in promoting or
advertising, Tenant's business except that Tenant may include the
Building's or Project's name in Tenant's address.
27. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental
agency.
28. Tenant assumes any and all responsibility for protecting its Premises
from theft, robbery and pilferage, which includes keeping doors locked
and other means of entry to the Premises closed.
29. The requirements of Tenant will be attended to only upon appropriate
application at the office of the Building by an authorized individual.
Employees of Landlord shall not perform any work or do anything outside
of their regular duties unless under special instructions from
Landlord, and no employees of Landlord will admit any person (tenant or
otherwise) to any office without specific instructions from Landlord.
30. Landlord reserves the right to designate the use of the parking spaces
on the Project. Tenant or Tenant's guests shall park between designated
parking lines only, and shall not occupy two parking spaces with one
car. Parking spaces shall be for passenger vehicles only; no boats,
trucks, trailers, recreational vehicles or other types of vehicles may
be parked in the parking areas (except that trucks may be loaded and
unloaded in designated loading areas). Vehicles in violation of the
above shall be subject to tow-away, at vehicle owner's expense.
Vehicles parked on the Project overnight without prior written consent
of the Landlord shall be deemed abandoned and shall be subject to
tow-away at vehicle owner's expense. No tenant of the Building shall
park in visitor or reserved parking areas. Any tenant found parking in
such designated visitor or reserved parking areas or unauthorized areas
shall be subject to tow-away at vehicle owner's expense. The parking
areas shall not be used to provide car wash, oil changes, detailing,
automotive repair or other services unless otherwise approved or
furnished by Landlord. Tenant will from time to time, upon the request
of Landlord, supply Landlord with a list of license plate numbers of
vehicles owned or operated by its employees or agents.
31. No smoking of any kind shall be permitted anywhere within the Building,
including, without limitation, the Premises and those areas immediately
adjacent to the entrances and exits to the Building, or any other area
as Landlord elects. Smoking in the Project is only permitted in smoking
areas identified by Landlord, which may be relocated from time to time.
32. If the Building furnishes common area conferences rooms for tenant
usage, Landlord shall have the right to control each tenant's usage of
the conference rooms, including limiting tenant usage so that the rooms
are equally available to all tenants in the Building. Any common area
amenities or facilities shall be provided from time to time at
Landlord's discretion.
33. Tenant shall not swap or exchange building keys or cardkeys with other
employees or tenants in the Building or the Project.
34. Tenant shall be responsible for the observance of all of the foregoing
Rules and Regulations by Tenant's employees, agents, clients,
customers, invitees and guests.
35. These Rules and Regulations are in addition to, and shall not be
construed to in any way modify, alter or amend, in whole or in part,
the terms, covenants, agreements and conditions of any lease of any
premises in the Project.
36. Landlord may waive any one or more of these Rules and Regulations for
the benefit of any particular tenant or tenants, but no such waiver by
Landlord shall be construed as a waiver of such Rules and Regulations
in favor of any other tenant or tenants, nor prevent Landlord from
thereafter enforcing any such Rules and Regulations against any or all
tenants of the Building.
37. Landlord reserves the right to make such other and reasonable rules and
regulations as in its judgment may from time to time be needed for
safety and security, for care and cleanliness of the Building and the
Project and for the preservation of good order therein. Tenant agrees
to abide by all such Rules and Regulations herein stated and any
additional rules and regulations which are adopted.
EXHIBIT B
FLOOR PLAN
[GRAPHIC]
EXHIBIT C
IMPROVEMENT AGREEMENT
This Lease Improvement Agreement ("IMPROVEMENT AGREEMENT")
sets forth the terms and conditions relating to construction of the initial
tenant improvements described in the Plans to be prepared and approved as
provided below (the "TENANT IMPROVEMENTS") in the Premises. Capitalized terms
used but not otherwise defined herein shall have the meanings set forth in the
Lease (the "LEASE") to which this Improvement Agreement is attached and forms a
part.
1. BASE BUILDING WORK. The "Base Building Work" described on SCHEDULE 1 to
this EXHIBIT C, IF ANY, has been or will be performed by Landlord at
Landlord's sole cost and expense.
2. PLANS AND SPECIFICATIONS.
2.1 Tenant has retained the services of Interform/Hansen
& Associates (the "SPACE PLANNER") to prepare the detailed space plan
(the "SPACE PLAN") attached hereto as Schedule 3 for the construction
of the Tenant Improvements in the Premises. Tenant shall submit any
proposed revisions to the Space Plan to Landlord for Landlord's
approval. The Space Plan as attached hereto is hereby approved by
Landlord and Tenant.
2.2 Based on the approved Space Plan, Tenant shall cause
the Space Planner to prepare detailed plans, specifications and working
drawings mutually satisfactory to Landlord and Tenant for the
construction of the Tenant Improvements (the "PLANS"). Landlord and
Tenant shall diligently pursue the preparation of the Plans. Tenant
shall submit the Plans and any proposed revisions thereto, including
the estimated cost of the Tenant Improvements. All necessary revisions
to the Space Plan and the Plans shall be made within two (2) business
days after Landlord's response thereto. This procedure shall be
repeated until Landlord ultimately approves the Space Plan and Plans.
2.3 Tenant shall be responsible for ensuring that the
Plans are compatible with the design, construction and equipment of the
Building, comply with applicable Regulations and the Standards (defined
below), and contain all such information as may be required to show
locations, types and requirements for all heat loads, people loads,
floor loads, power and plumbing, regular and special HVAC needs,
telephone communications, telephone and electrical outlets, lighting,
light fixtures and related power, and electrical and telephone
switches, B.T.U. calculations, electrical requirements and special
receptacle requirements. The Plans shall also include mechanical and
electrical drawings mutually satisfactory to Landlord and Tenant which
shall be prepared by an architect mutually acceptable to each of
Landlord and Tenant. Notwithstanding Landlord's preparation, review and
approval of the Space Plan and the Plans and any revisions thereto,
Landlord shall have no responsibility or liability whatsoever for any
errors or omissions contained in the Space Plan or Plans or any
revisions thereto, or to verify dimensions or conditions, or for the
quality, design or compliance with applicable Regulations of any
improvements described therein or constructed in accordance therewith.
Tenant hereby waives all claims against Landlord relating to, or
arising out of the design or construction of, the Tenant Improvements.
2.4 Landlord may approve or disapprove the Plans or any
proposed revision thereto or to the Space Plan submitted to Landlord in
Landlord's sole discretion. Landlord shall not be deemed to have
approved the Space Plan, the Plans, or any proposed revisions thereto,
unless approved by Landlord in writing. Landlord shall approve or
disapprove any Space Plan, Plans or proposed revisions thereto
submitted to Landlord for Landlord's approval within three (3) business
days after Landlord's receipt thereof. If Landlord has not approved in
writing the Plans or proposed revisions thereto or to the Space Plan
submitted to Landlord within three (3) business days after Landlord's
receipt thereof, Landlord shall be deemed to have approved the same.
3. SPECIFICATIONS FOR STANDARD TENANT IMPROVEMENTS.
3.1 Specifications and quantities of standard building
components which will comprise and be used in the construction of the
Tenant Improvements ("STANDARDS") are set forth in SCHEDULE 2 to this
EXHIBIT C. As used herein, "STANDARDS" or "BUILDING STANDARDS" shall
mean the standards for a particular item selected from time to time by
Landlord for the Building, including those set forth on SCHEDULE 2 of
this EXHIBIT C, or such other standards of equal or better quality as
may be mutually agreed between Landlord and Tenant in writing.
3.2 No deviations from the Standards are permitted
without Landlord's prior written approval.
4. TENANT IMPROVEMENT COST.
4.1 The cost of the Tenant Improvements shall be paid
for by Tenant, including, without limitation, the cost of:
Standards; space plans and studies; architectural and engineering
fees; permits, approvals and other governmental fees; labor,
material, equipment and supplies; construction fees and other
amounts payable to contractors or subcontractors; taxes; off-site
improvements; remediation and preparation of the Premises for
construction of the Tenant Improvements; taxes; filing and recording
fees; premiums for insurance and bonds; attorneys' fees; financing
costs; and all other costs expended or to be expended in the
construction of the Tenant Improvements.
4.2 INTENTIONALLY OMITTED.
4.3 INTENTIONALLY OMITTED.
4.4 INTENTIONALLY OMITTED.
4.5 INTENTIONALLY OMITTED.
5. CONSTRUCTION OF TENANT IMPROVEMENTS.
5.1 Within ten (10) days after Tenant's and Landlord's
approval of the Plans, Tenant shall cause the contractor to proceed
to secure a building permit and commence construction of the Tenant
Improvements provided that the Building has in Landlord's discretion
reached the stage of construction where it is appropriate to
commence construction of the Tenant Improvements in the Premises.
5.2 Tenant shall be responsible for obtaining all
governmental approvals to the full extent necessary for the
construction and installation of the Tenant Improvements and for
Tenant's occupancy of the Premises, in compliance with all
applicable Regulations. Tenant shall employ Wilcox & Co. as the
contractor or such other contractor or contractors as shall be
approved by Landlord in writing to construct the Tenant Improvements
in conformance with the approved Space Plan and Plans. The
construction contracts between Tenant and the
approved contractor shall be subject to Landlord's prior reasonable
approval and shall provide for progress payments made directly to
the contractor. The contractor(s) shall be duly licensed and
Landlord's approval of the contractor(s) shall be conditioned, among
other things, upon the contractor's reputation for quality of work,
timeliness of performance, integrity and Landlord's prior experience
with such contractor.
5.3 Landlord shall not be liable for any direct or
indirect damages suffered by Tenant as a result of delays in
construction beyond Landlord's reasonable control, including, but
not limited to, delays due to strikes or unavailability of materials
or labor, or delays caused by Tenant (including delays by the Space
Planner, the contractor or anyone else performing services on behalf
of Landlord or Tenant).
5.4 All work to be performed on the Premises by Tenant
or Tenant's contractor or agents shall be subject to the following
conditions:
(a) Such work shall proceed upon Landlord's
written approval of Tenant's contractor, and public liability and
property damage insurance carried by Tenant's contractor, and shall
further be subject to the provisions of Paragraphs 7.1 and 7.3 of
the Lease.
(b) All work shall be done in conformity with
a valid building permit when required, a copy of which shall be
furnished to Landlord before such work is commenced, and in any
case, all such work shall be performed in a good and workmanlike and
first-class manner, and in accordance with all applicable
Regulations and the requirements and standards of any insurance
underwriting board, inspection bureau or insurance carrier insuring
the Premises pursuant to the Lease. Notwithstanding any failure by
Landlord to object to any such work, Landlord shall have no
responsibility for Tenant's failure to comply with all applicable
Regulations. Tenant shall be responsible for ensuring that
construction and installation of the Tenant Improvements will not
affect the structural integrity of the Building.
(c) Tenant shall use its best efforts to
immediately resolve any union activities, including picketing and
labor stoppages, that occur in connection with Tenant's construction
of the Tenant Improvements or other construction by or on behalf of
Tenant of the Premises, Building or Project. Any delay in
construction of the Tenant Improvements due to such union activities
shall not be considered a force majeure event hereunder with respect
to Tenant's performance of its obligations.
(d) Landlord or Landlord's agents shall have
the right to inspect the construction of the Tenant Improvements by
Tenant during the progress thereof. If Landlord shall give notice of
faulty construction or any other deviation from the approved Space
Plan or Plans, Tenant shall cause its contractor to make corrections
promptly. However, neither the privilege herein granted to Landlord
to make such inspections, nor the making of such inspections by
Landlord, shall operate as a waiver of any right of Landlord to
require good and workmanlike construction and improvements erected
in accordance with the approved Space Plan or Plans.
(e) Tenant shall cause its contractor to
complete the Tenant Improvements as soon as reasonably possible but
in any event on or before the Scheduled Term Commencement Date.
(f) Tenant's construction of the Tenant
Improvements shall comply with the following: (i) the Tenant
Improvements shall be constructed in strict accordance with the
approved Space Plan or Plans; (ii) Tenant's and its contractor shall
submit schedules of all work relating to the Tenant Improvements to
Landlord for Landlord's approval within two (2) business days
following the selection of the contractor and the approval of the
Plans. Landlord shall within three (3) business days after receipt
thereof inform Tenant of any changes which are necessary and
Tenant's contractor shall adhere to such corrected schedule; and
(iii) Tenant shall abide by all rules made by Landlord with respect
to the use of freight, loading dock, and service elevators, storage
of materials, coordination of work with the contractors of other
tenants, and any other matter in connection with this Improvement
Agreement, including, without limitation, the construction of the
Tenant Improvements.
(g) Tenant or Tenant's contractor or agents
shall arrange for necessary utility, hoisting and elevator service
with Landlord's contractor and shall pay such reasonable charges for
such services as may be charged by Tenant's contractor. Landlord
shall not impose a charge upon Tenant for any such elevator service.
(h) Tenant's entry to the Premises for any
purpose, including, without limitation, inspection or performance of
Tenant construction by Tenant's agents, prior to the date Tenant's
obligation to pay rent commences shall be subject to all the terms
and conditions of the Lease except the payment of Rent. Tenant's
entry shall mean entry by Tenant, its officers, contractors,
licensees, agents, servants, employees, guests, invitees, or
visitors.
(i) Tenant shall promptly reimburse Landlord
upon demand for any reasonable expense actually incurred by the
Landlord by reason of faulty work done by Tenant or its contractors
or by reason of any delays caused by such work, or by reason of
inadequate clean-up.
(j) Tenant hereby indemnifies and holds
Landlord harmless with respect to any and all costs, losses,
damages, injuries and liabilities relating in any way to any act or
omission of Tenant or Tenant's contractor or agents, or anyone
directly or indirectly employed by any of them, in connection with
the Tenant Improvements and any breach of Tenant's obligations under
this Improvement Agreement, or in connection with Tenant's
non-payment of any amount arising out of the Tenant Improvements.
Such indemnity by Tenant, as set forth above, shall also apply with
respect to any and all costs, losses, damages, injuries, and
liabilities related in any way to Landlord's performance or any
ministerial acts reasonably necessary (i) to permit Tenant to
complete the Tenant Improvements, and (ii) to enable Tenant to
obtain any building permit or certificate of occupancy for the
Premises.
(k) Tenant's contractor and the
subcontractors utilized by Tenant's contractor shall guarantee to
Tenant and for the benefit of Landlord that the portion of the
Tenant Improvements for which it is responsible shall be free from
any defects in workmanship and materials for a period of not less
than one (1) year from the date of completion thereof. Each of
Tenant's contractor and the subcontractors utilized by Tenant's
contractor shall be responsible for the replacement or repair,
without additional charge, of all work done or furnished in
accordance with its contract that shall become defective within one
(1) year after the later to occur of (i) completion of the work
performed by such contractor of subcontractors and (ii) the Term
Commencement Date. The correction of such work shall include,
without additional charge, all additional expenses and damages
incurred in connection with such removal or replacement of all or
any part of the Tenant Improvements, and/or the Building and/or
common areas that may be damaged or disturbed thereby. All such
warranties or guarantees as to materials or workmanship of or with
respect to the Tenant Improvements shall be contained in the
construction contract or subcontract and shall be written such that
such guarantees or warranties shall inure to the benefit of both
Landlord and Tenant, as their respective interests may appear, and
can be directly enforced by either. Tenant covenants to give to
Landlord any assignment or other assurances which may be necessary
to effect such rights of direct enforcement.
(l) Commencing upon the execution of the Lease, Tenant shall hold
weekly meetings at a reasonable time with the Space Planner and the
contractor regarding the progress of the preparation of the Plans
and the construction of the Tenant Improvements, which meetings
shall be held at a location designated by Tenant, and Landlord
and/or its agents shall receive prior notice of, and shall have the
right to attend, all such meetings, and upon Landlord's request,
certain of Tenant's contractors shall attend such meetings. One such
meeting each month shall include the review of contractor's current
request for payment.
6. INSURANCE REQUIREMENTS.
6.1 All of Tenant's contractors shall carry worker's compensation
insurance covering all of their respective employees, and shall also
carry public liability insurance, including property damage, all
with limits, in form and with companies as are required to be
carried by Tenant as set forth in Exhibit D to the Lease.
6.2 Tenant shall carry "Builder's All Risk" insurance in an amount
approved by Landlord covering the construction of the Tenant
Improvements, and such other insurance as Landlord may require, it
being understood and agreed that the Tenant Improvements shall be
insured by Tenant pursuant to Exhibit D to the Lease immediately
upon completion thereof. Such insurance shall be in amounts and
shall include such extended coverage endorsements as may be
reasonably required by Landlord including, but not limited to, the
requirement that all of Tenant's contractors shall carry excess
liability and Products and Completed Operation coverage insurance,
each in amounts not less than $500,000 per incident, $1,000,000 in
aggregate, and in form and with companies as are required to be
carried by Tenant as set forth in Exhibit D to the Lease.
6.3 Certificates for all insurance carried pursuant to this
Improvement Agreement must comply with the requirements of Exhibit D
to the Lease and shall be delivered to Landlord before the
commencement of construction of the Tenant Improvements and before
the contractor's equipment is moved onto the site. In the event the
Tenant Improvements are damaged by any cause during the course of
the construction thereof, Tenant shall immediately repair the same
at Tenant's sole cost and expense. Tenant's contractors shall
maintain all of the foregoing insurance coverage in force until the
Tenant Improvements are fully completed and accepted by Landlord,
except for any Product and Completed Operation Coverage insurance
required by Landlord, which is to be maintained for ten (10) years
following completion of the work and acceptance by Landlord and
Tenant. All policies carried under this Paragraph 6 shall insure
Landlord and Tenant, as their interests may appear, as well as the
contractors. All insurance maintained by Tenant's contractors shall
preclude subrogation claims by the insurer against anyone insured
thereunder. Such insurance shall provide that it is primary
insurance as respects the owner and that any other insurance
maintained by owner is excess and noncontributing with the insurance
required hereunder. Landlord may, in its discretion, require Tenant
to obtain a lien and completion bond or some alternate form of
security satisfactory to Landlord in an amount sufficient to ensure
the lien-free completion of the Tenant Improvements and naming
Landlord as a co-obligee.
7. COMPLETION AND RENTAL COMMENCEMENT DATE.
7.1 Tenant's obligation to pay Rent under the Lease shall commence
on the Scheduled Term Commencement Date and the Scheduled Term
Commencement Date shall be the Term Commencement Date
notwithstanding anything to the contrary contained in Paragraph 3 of
the Lease. However, Landlord Delays (as defined below) shall extend
the Term Commencement Date, but only in the event that substantial
completion of the Tenant Improvements is delayed despite Tenant's
reasonable efforts to adapt and compensate for such delays. In
addition, no Landlord Delays shall be deemed to have occurred unless
Tenant has provided notice, in compliance with the Lease, to
Landlord specifying that a delay shall be deemed to have occurred
because of actions, inactions or circumstances specified in the
notice in reasonable detail. If such actions, inactions or
circumstances are not cured by Landlord within one (1) business day
after receipt of such notice ("COUNT DATE"), and if such actions,
inaction or circumstances otherwise qualify as a Landlord Delay,
then a Landlord Delay shall be deemed to have occurred commencing as
of the Count Date. The Term Commencement Date shall be extended by
one day for each day from the Count Date that a Landlord Delay has
occurred, as calculated as provided above. The term "Landlord
Delays," as such term may be used in this Improvement Agreement,
shall mean any delays in the completion of the Tenant Improvements
which are due to any act or omission of Landlord, its agents or
contractors. Landlord Delays shall include, but shall not be limited
to: (i) delays in the giving of authorizations or approvals by
Landlord, (ii) delays due to the acts or failures to act, of
Landlord, its agents or contractors, where such acts or failures to
act delay the completion of the Tenant Improvements, provided that
Tenant acts in a commercially reasonable manner to mitigate any such
delay, (iii) delays due to the interference of Landlord, its agents
or contractors with the completion of the Tenant Improvements or the
failure or refusal of any party to permit Tenant, its agents and
contractors, access to and use of the Building or any Building
facilities or services, including elevators and loading docks, which
access and use are necessary to complete the Tenant Improvements,
and (iv) delays due to Landlord's failure to allow Tenant sufficient
access to the Building and/or the Premises during Tenant's move into
the Premises.
7.2 Within ten (10) days after completion of construction of the
Tenant Improvements, Tenant shall cause a Notice of Completion to be
recorded in the office of the Recorder of the county in which the
Building is located in accordance with Section 3093 of the Civil
Code of the State of California or any successor statute, and shall
furnish a copy thereof to Landlord upon such recordation. If Tenant
fails to do so, Landlord may execute and file the same on behalf of
Tenant as Tenant's agent for such purpose, at Tenant's sole cost and
expense. At the conclusion of construction, (i) Tenant shall cause
the Space Planner and the contractor (i) to update the approved
working drawings as necessary to reflect all changes made to the
approved working drawings during the course of construction, (ii) to
certify to the best of their knowledge that the "record-set" of
as-built drawings are true and correct, which certification shall
survive the expiration or termination of the Lease, and (c) to
deliver to Landlord two (2) sets of copies of such record set of
drawings within ninety (90) days following issuance of a certificate
of occupancy for the Premises, and (iii) Tenant shall deliver to
Landlord a copy of all warranties, guarantees, and operating manuals
and information relating to the improvements, equipment, and systems
in the Premises.
7.3 A default under this Improvement Agreement shall constitute a
default under the Lease, and the parties shall be entitled to all
rights and remedies under the Lease in the event of a default
hereunder by the other party (notwithstanding that the Term thereof
has not commenced).
7.4 Without limiting the "as-is" provisions of the Lease, except
for the Tenant Improvements, if any, to be constructed by Landlord
pursuant to this Improvement Agreement, Tenant accepts the Premises in
its "as-is" condition and acknowledges that it has had an opportunity
to inspect the Premises prior to signing the Lease.
SCHEDULE 1
TO EXHIBIT C
BASE BUILDING WORK
NONE
SCHEDULE 2
TO EXHIBIT C
BUILDING STANDARDS
Building Standard tenant improvements ("STANDARDS") shall be in accordance with
premises/space recently constructed in the Building for other tenants occupying
space similar to Tenant.
SCHEDULE 3
TO EXHIBIT C
SPACE PLAN
The following constitutes the Space Plan:
[spaceplan]
SCHEDULE 3
TO EXHIBIT C
SPACE PLAN
The following constitutes the Dendition Plan:
[spaceplan]
EXHIBIT D
TENANT'S INSURANCE
Tenant shall, at Tenant's sole cost and expense, procure and keep in effect
from the date of this Lease and at all times until the end of the Term, the
following insurance coverage:
1. PROPERTY INSURANCE. Insurance on all personal property and fixtures of
Tenant and all improvements made by or for Tenant to the Premises on an
"All Risk" or "Special Form" basis, for the full replacement value of
such property.
2. LIABILITY INSURANCE. Commercial General Liability insurance written on
an ISO CG 00 01 10 93 or equivalent form, on an occurrence basis, with
a per occurrence limit of at least $2,000,000, and a minimum general
aggregate limit of at least $3,000,000, covering bodily injury and
property damage liability occurring in or about the Premises or arising
out of the use and occupancy of the Premises or the Project by Tenant
or any Tenant Party. Such insurance shall include contractual liability
coverage insuring Tenant's indemnity obligations under this Lease, and
shall be endorsed to name Landlord, any Holder of a Security Instrument
and any other party specified by Landlord as an additional insured with
regard to liability arising out of the ownership, maintenance or use of
the Premises.
3. WORKER'S COMPENSATION AND EMPLOYER'S LIABILITY INSURANCE. (a) Worker's
Compensation Insurance as required by any Regulation, and (b)
Employer's Liability Insurance in amounts not less than $1,000,000 each
accident for bodily injury by accident and for bodily injury by
disease, and for each employee for bodily injury by disease.
4. COMMERCIAL AUTO LIABILITY INSURANCE. Commercial auto liability
insurance with a combined limit of not less than One Million Dollars
($1,000,000) for bodily injury and property damage for each accident.
Such insurance shall cover liability relating to any auto (including
owned, hired and non-owned autos).
5. ALTERATIONS REQUIREMENTS. In the event Tenant shall desire to perform
any Alterations, Tenant shall deliver to Landlord, prior to commencing
such Alterations (i) evidence satisfactory to Landlord that Tenant
carries "Builder's Risk" insurance covering construction of such
Alterations in an amount and form approved by Landlord, (ii) such other
insurance as Landlord shall nondiscriminatorily require, and (iii) a
lien and completion bond or other security in form and amount
satisfactory to Landlord.
6. GENERAL INSURANCE REQUIREMENTS. All coverages described in this
EXHIBIT D shall be endorsed to (i) provide Landlord with thirty (30)
days' notice of cancellation or change in terms; (ii) waive all
rights of subrogation by the insurance carrier against Landlord; and
(iii) be primary and non-contributing with Landlord's insurance. If
at any time during the Term the amount or coverage of insurance which
Tenant is required to carry under this EXHIBIT D is, in Landlord's
reasonable judgment, materially less than the amount or type of
insurance coverage typically carried by owners or tenants of
properties located in the general area in which the Premises are
located which are similar to and operated for similar purposes as the
Premises or if Tenant's use of the Premises should change with or
without Landlord's consent, Landlord shall have the right to require
Tenant to increase the amount or change the types of insurance
coverage required under this EXHIBIT D. All insurance policies
required to be carried by Tenant under this Lease shall be written by
companies rated AVII or better in "Best's Insurance Guide" and
authorized to do business in the State of California. Deductible
amounts under all insurance policies required to be carried by Tenant
under this Lease shall not exceed $10,000 per occurrence. Tenant
shall deliver to Landlord on or before the Term Commencement Date,
and thereafter at least thirty (30) days before the expiration dates
of the expired policies, certified copies of Tenant's insurance
policies, or a certificate evidencing the same issued by the insurer
thereunder, and, if Tenant shall fail to procure such insurance, or
to deliver such policies or certificates, Landlord may, at Landlord's
option and in addition to Landlord's other remedies in the event of a
default by Tenant under the Lease, procure the same for the account
of Tenant, and the cost thereof (with interest thereon at the Default
Rate) shall be paid to Landlord as Additional Rent.
EXHIBIT E
PARKING RULES
1. Cars must be parked entirely within painted stall lines.
2. All directional signs and arrows must be observed.
3. All posted speed limits for the parking areas shall be observed. If no
speed limit is posted for an area, the speed limit shall be five (5)
miles per hour.
4. Parking is prohibited:
(a) in areas not striped for parking;
(b) in aisles;
(c) where "no parking" signs are posted;
(d) on ramps;
(e) in cross hatched areas; and
(f) in such other areas as may be designated by Landlord.
5. Handicap and visitor stalls shall be used only by handicapped persons
or visitors, as applicable.
6. Parking stickers or any other device or form of identification supplied
by Landlord from time to time (if any) shall remain the property of
Landlord. Such parking identification device must be displayed as
requested and may not be mutilated in any manner. The serial number of
the parking identification device may not be obliterated. Devices are
not transferable and any device may not be obliterated. Devices are not
transferable and any device in possession of any unauthorized holder
will be void. There will be a replacement charge payable by the parker
and such parker's appropriate tenant equal to the amount posted from
time to time by Landlord for loss of any magnetic parking card or any
parking sticker.
7. Every parker is required to park and lock his or her own car. All
responsibility for damage to cars or persons is assumed by the parker.
8. Loss or theft of parking identification devices must be reported to
Landlord, and a report of such loss or theft must be filed by the
parker at that time. Any parking identification devices reported lost
or stolen found on any unauthorized car will be confiscated and the
illegal holder will be subject to prosecution. Lost or stolen devices
found by the parker must be reported to Landlord immediately to avoid
confusion.
9. Parking spaces are for the express purpose of parking one automobile
per space. Washing, waxing, cleaning, or servicing of any vehicle by
the parker and/or such person's agents is prohibited. The parking areas
shall not be used for overnight or other storage for vehicles of any
type.
10. Landlord reserves the right to refuse the issuance of parking
identification or access devices to any tenant and/or such tenant's
employees, agents, visitors or representatives who willfully refuse to
comply with the Parking Rules and/or all applicable governmental
ordinances, laws, or agreements.
11. Tenant shall acquaint its employees, agents, visitors or
representatives with the Parking Rules, as they may be in effect from
time to time.
12. Any monthly rental for parking shall be paid one month in advance prior
to the first day of such month. Failure to do so will automatically
cancel parking privileges, and a charge of the prevailing daily rate
will be due. No deductions or allowances from the monthly rental for
parking will be made for days a parker does not use the parking
facilities.
13. Each parker shall pay a reasonable deposit for any parking card issued
to such a person. Such deposit shall be paid at the time the parking
card is issued and shall be forfeited if the parking card is lost. Such
deposit shall be returned without interest, at the time such person
ceases to utilize the parking facilities, upon surrender of the parking
card. A reasonable replacement charge shall be paid to replace a lost
card and an amount in excess of the initial deposit may be charged as
the replacement fee.