OFFICE LEASE
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
LANDLORD
NO. ▇ ▇▇▇▇▇ ▇▇▇▇▇▇, LLC
a California limited liability company
and
TENANT
CNET, Inc.,
a Delaware corporation
TABLE OF CONTENTS
ARTICLE 1 - PREMISES AND TENANT'S PROPERTY 1
1.1. The Premises 1
1.2. Rentable Area of the Premises 1
1.3. Tenant's Property 1
1.4. Improvements to the Premises 1
1.5. Parking 1
ARTICLE 2 - TERM 2
2.1. Term 2
2.2. Rent Commencement 2
2.3. Holding Over 3
2.4. Option to Extend the Term of the Lease 4
ARTICLE 3 - RENT 4
3.1. Minimum Rent 4
3.2. Interest and Late Charges 4
3.3. Manner of Payment 5
3.4. Definition of Rent 5
3.5. Reduction of Minimum Rent 5
3.6. Minimum Rent during the Option Term 5
3.7. Percentage Rent 8
ARTICLE 4 - REAL ESTATE TAXES AND OPERATING EXPENSES 9
4.1. Tenant Shall Pay Increases in Real Estate
Taxes and Operating Expenses 9
4.2. Definition of Real Estate Taxes 10
4.3. Definition of Operating Expenses 12
4.4. Tenant's Right to Audit 13
4.5. Tenant Shall Pay for Taxes Levied on
its Property 13
ARTICLE 5 - UTILITIES USED IN THE PREMISES 13
5.1. Tenant Shall Pay for all Utility Costs 13
5.2. No Liability for Interruption in Utilities 13
5.3. Intra-Building Network Cable 14
ARTICLE 6 - SECURITY DEPOSIT 14
6.1. Security Deposit 14
6.2. Terms of the Letter of Credit 14
6.3. Release/Reduction of the Letter of Credit 15
ARTICLE 7 - USE AND CONDITION OF THE PREMISES 15
7.1. Use of the Premises 15
7.2. Operation of Tenant's Business 16
7.3. Condition of the Premises 16
7.4. ▇▇▇▇▇▇▇▇'s Obligation upon Delivery of
the Premises 17
ARTICLE 8 - MAINTENANCE, REPAIRS, AND ALTERATIONS 17
8.1. Tenant's Obligations for Repairs
and Maintenance 17
8.2. Landlord's Obligations for Repairs
and Maintenance 18
8.3. ▇▇▇▇▇▇▇▇'s Right to Make Repairs on
Behalf of Tenant 18
8.4. Alterations and Additions 18
8.5. Tenant's Construction and Repair Work 19
8.6. Liens 20
8.7. Tenant's Obligation for Compliance
with Government Requirements 20
8.8. ▇▇▇▇▇▇▇▇'s Obligation for Compliance
with Government Requirements 21
ARTICLE 9 - LANDLORD'S RIGHT OF ENTRY 21
9.1. Right of Entry 21
9.2. Emergency Entrance into the Premises 21
9.3. Damages Suffered by ▇▇▇▇▇▇ and Abatement
of Rent as a Consequence of Landlord's Work 22
ARTICLE 10 - INSURANCE AND INDEMNIFICATION 22
10.1. Tenant's Insurance 22
10.2. Landlord's Insurance 23
10.3. Insurance Requirements 23
10.4. Waiver of Claims and Waiver of Subrogation 24
10.5. Certificate of Insurance and Policy
Endorsements and ▇▇▇▇▇▇'s Failure to
Provide Either 24
10.6. Indemnification 24
ARTICLE 11 - DAMAGE OR DESTRUCTION 25
11.1. ▇▇▇▇▇▇▇▇'s Notice to Tenant 25
11.2. Landlord's Obligation to Repair 25
11.3. Termination of the Lease after a Casualty Loss 25
11.4. Tenant's Right to Repair 26
11.5. ▇▇▇▇▇▇▇▇'s and ▇▇▇▇▇▇'s Respective
Responsibilities for Repair 26
11.6. Damage - End of Term 26
11.7. Tenant's Waiver of Statutory Rights 27
11.8. Abatement of Rent Due to a Casualty Loss 27
ARTICLE 12 - CONDEMNATION 27
12.1. Taking of the Premises 27
12.2. Compensation 27
12.3. Voluntary Sale 27
12.4. Waiver 27
ARTICLE 13 - ASSIGNMENT AND SUBLEASE 28
13.1. Prohibition Against Assignments or Subleases
without Landlord's Consent 28
13.2. Notice of the Proposed Assignment or Sublease 29
13.3. ▇▇▇▇▇▇▇▇'s Consent 29
13.4. Take-Back Space 30
13.5. Tenant Shall Remain Liable Under the Lease 30
13.6. Profits from an Assignment or a Sublease 30
13.7. Obligations of an Assignee or Sublessee 31
13.8. Payment of Landlord's Costs 31
13.9. No Reliance on Oral Statements 31
ARTICLE 14 - DEFAULT 31
14.1. Tenant's Default 31
14.2. Remedies 32
14.3. Waiver 32
14.4. Landlord's Default 33
ARTICLE 15 - HAZARDOUS MATERIALS 33
15.1. Compliance 33
15.2. Prohibited Acts and Damages Resulting
Therefrom 33
15.3. Definition of Hazardous Materials 34
15.4. Disclosure 34
ARTICLE 16 - GENERAL PROVISIONS 34
16.1. Mediation and Arbitration 34
16.2. Sale of Landlord's Interest 35
16.3. Estoppel Certificate 35
16.4. Financial Statement 36
16.5. Subordination and Attornment 36
16.6. Tenant Signage 36
16.7. Merger 37
16.8. Recording 37
16.9. Attorneys' Fees 37
16.10. Cumulative Remedies 37
16.11. Choice of Law 37
16.12. Successors and Assigns 37
16.13. Severability 37
16.14. Authority 37
16.15. Time of Essence 37
16.16. Captions 37
16.17. Force Majeure 38
16.18. Notices 38
16.19. Brokers 38
16.20. Joint and Several Liability 39
16.21. Quiet Possession 39
16.22. Prior Agreements and Amendments 39
EXHIBIT A - Legal Description of the Premises
EXHIBIT B - Floor Plans
EXHIBIT C - Work Letter
EXHIBIT D - Comparable Space Area
EXHIBIT E - Form of Subordination and Non-Disturbance Agreement
BASIC LEASE INFORMATION
Date of the Lease: September ___, 1997
SECTIONS
Landlord: No. ▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇, a
California limited liability company
3.3, 16.18
Landlord's Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-3298
Landlord's Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Landlord's Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
Contact for Landlord: ▇▇▇▇▇▇ ▇▇▇▇▇ & Associates,
Attn: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇
Tenant: CNET, Inc.,
a Delaware corporation
16.18
▇▇▇▇▇▇'s Address: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Tenant's Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Tenant's Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
Contact for Tenant: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
1.1 Premises: 100% of the building (including
exclusive use of the roof) commonly
known as ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇.
1.2 Rentable Area
of the Premises: Approximately 97,015 sq. ft.
1.5 Parking Spaces Up to 165 spaces, of which no more
than 50 spaces will be on a 24-hour basis
2.1 Term: 10 Years from the Rent
Commencement Date
2.2 Rent Commencement Date: The earlier of (i) June 1, 1998, or
(ii) the date of substantial completion of Tenant Improvements
to two floors of the Premises
Landlord's Initials Tenant's Initials
_______________ ______________
2.1 Scheduled Delivery Date of
Premises to Tenant January 15, 1998
2.5 Option to Extend the Term: Tenant shall have one
(1) option to extend the Term of the Lease for five
(5) years
Rent:
3.1 Minimum Rent (per month): Month 1: Free
Months 2 - 60: $208,582.25,
subject to Section 3.5
Months 61 - 120: $240,920.59,
subject to Section 3.5
3.1 Minimum Rent Payable
on Lease Execution: $208,582.25
3.6 Minimum Rent during
the Option Term: 95% of the Prevailing Market Rate
3.2 Late Charge 3% of the Rent or other amounts
paid after the due date.
4.1 Additional Lease Charges: Tenant shall pay 100% of the
Additional Lease Charges over the Base Year
4.1 Base Year for the Initial Term: The twelve (12) month period
commencing on the first day of the month in which the Rent
Commencement Date occurs
3.6, 4.1 Base Year for the Option Term: The twelve (12) month period
commencing on the first day of the month in which the Option
Term commences
5.1 Utilities: Tenant shall pay for all utilities used
in the Premises
6 Security Deposit: An irrevocable stand-by letter of
credit in the amount of $3,250,000.00, unless reduced in
accordance with Section 6.3(b)
Landlord's Initials Tenant's Initials
_______________ ______________
Operation of Tenant's Business:
7.1 Permitted Use of the Premises: General office and,
subject to the terms and conditions of Section 7.1,
the first floor of the Premises may be used for interactive
and/or multi- media purposes, and for retail purposes.
7.2 Weight Limitation: 75 lbs. per sq. ft.
10.1, 10.2 General Liability Insurance
(per occurrence): $5,000,000.00,
subject to Section 10.3(c)
16.1 Mediation and Arbitration Landlord and Tenant are bound
to the Mediation and
Arbitration provisions of the
Lease
16.19 Real Estate Brokers:
Landlord's Broker: Colliers Damner Pike
Two Embarcadero Center
San Francisco, California 94111
Tenant's Broker: ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ of
California, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Landlord's Initials Tenant's Initials
_______________ ______________
OFFICE LEASE
This Lease ("Lease") between NO. ▇ ▇▇▇▇▇ ▇▇▇▇▇▇, LLC, a California
limited liability company ("Landlord") and CNET, Inc., a Delaware corporation
("Tenant") is entered into on, and shall be effective as of, September ___,
1997.
ARTICLE 1 - PREMISES AND TENANT'S PROPERTY
1.1. The Premises.
Landlord leases to Tenant and Tenant leases from Landlord, subject
to the following terms and conditions, the Premises which represent the
entirety of the office building, including the roof, which is located
at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇ (the "Premises"). Tenant's right of occupancy of the
Premises shall include the exclusive right of signage on the
exterior of the Premises, subject to the terms and requirements of this
Lease. The legal description of the Premises is more particularly set
forth on Exhibit, A which is attached hereto and made a part hereof.
1.2. Rentable Area of the Premises.
The rentable area of the Premises shall be deemed to be
that area stated in the Basic Lease Information and as shown on Exhibit
B hereof. It is understood that the rentable area set forth in the
Basic Lease Information is approximate only. Tenant may at its
discretion measure the Premises to confirm the rentable area. However, after
the execution of this Lease, no Rent or other adjustment shall be made
between the parties in the event that the rentable area
of the Premises is subsequently determined to be greater or less than
the area set forth in the basic Lease Information.
1.3. Tenant's Property.
All furniture, furnishings, equipment, trade fixtures, and articles of
movable personal property in the Premises which belong to Tenant and
which can be removed without structural or other material damage to
the Premises (all of which are herein referred to as "Tenant's
Property") shall be the property of
Tenant. Upon the expiration or earlier termination of this Lease,
Tenant shall remove from the
Premises all of Tenant's Property except those items that the parties
shall agree are to remain and become the property of Landlord. Tenant
shall repair or pay the cost of repairing any damage to the Premises
resulting from the removal of Tenant's Property. Tenant's obligations
under this Section 1.3 shall survive the termination of this Lease.
1.4. Improvements to the Premises.
Concurrently with the execution of this Lease,
Landlord and Tenant are executing the Work Letter which is attached
hereto and marked Exhibit C, providing for Landlord's and Tenant's
responsibilities for improvements to the Premises.
1.5. Parking.
(a) Parking Availability and Cost. Commencing on January
2, 1998 or as soon thereafter as the existing tenant in the Premises
shall vacate its spaces in the Northpoint Apartment Garage ("Garage")
which is located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ and continuing
until the termination of this Lease, Tenant shall have the right to use
no fewer than the number of parking spaces set forth in the Basic Lease
Information (as reduced from time to time
as herein provided) for the parking of automobiles or motor bikes
("Tenant's Parking Spaces").
The owner of the Garage shall designate which parking spaces in the
Garage are available for Tenant's use. Unless Tenant and the owner of
the Garage otherwise agree in a separate agreement between themselves,
Tenant may use up to fifty (50) parking spaces on a 24-hour per
day, 7-day per week basis, but Tenant may only use the remainder of the
parking spaces during the hours of 7:30 AM to 5:30 PM, Monday through
Friday. Tenant shall pay the then current fair market rent for any
parking spaces which Tenant may use. As of April 1, 1997, the rent for
parking spaces in the Garage on a 24-hour basis was $135.00 per month,
and the rent for parking spaces during business hours, Monday through
Friday, was $105.00 per month.
(b) Parking Agreement. Tenant acknowledges that while
there is an easement allowing the occupant of the Premises to use up to
165 parking spaces in the Garage, Landlord neither owns nor manages the
Garage. In order to use Tenant's Parking Spaces, Tenant shall be
required to enter into a written agreement ("Parking Agreement") with
the owner of the Garage and to comply with the terms of that agreement.
Tenant further acknowledges that it has received the form of Parking
Agreement which is currently in use. Tenant shall designate the
number and type of Tenant's Parking Spaces that Tenant wishes to utilize
pursuant to the notice procedure in the Parking Agreement. During the
term of this Lease, Tenant may increase or decrease the number of
Tenant's Parking Spaces, up to the maximum number provided in the
Basic Lease Information, provided that Tenant gives the owner of the
Garage the written notice
required in the Parking Agreement.
ARTICLE 2 - TERM
2.1. Term.
(a) Initial Lease Term. Unless otherwise terminated in
accordance with the provisions hereof, this Lease shall be for the
period set forth in the Basic Lease Information as
the "Term." Subject to the provisions of subsections (c) and (d)
hereto, ▇▇▇▇▇▇'s occupancy of the Premises pursuant to the terms of this
Lease shall commence on the date that Landlord delivers the Premises to
Tenant upon not less than three (3) days' prior written notice to Tenant
(the "Commencement Date"). Landlord shall deliver the Premises to
Tenant free and clear of any rights of possession or occupancy of any
existing tenant thereof, and in broom clean condition (other than as to
floors previously identified by Tenant to be immediately demolished
for construction of Tenant Improvements). Tenant hereby acknowledges
that neither Landlord nor any representative of Landlord has represented
to Tenant that after the expiration of the Term of this Lease, Tenant
shall have any right to remain in the Premises or Landlord will be
willing to negotiate with Tenant for a new lease for the Premises.
(b) Tenant's Insurance Certificate. Tenant shall provide
Landlord with a certificate of insurance in accordance with the
provisions of Section 10.5 hereof prior to its occupancy or use of the
Premises and prior to the construction of any Tenant Improvements.
Tenant shall have no right of access to the Premises unless and until
this insurance certificate is delivered to Landlord.
(c) Delay in Delivery of Possession. If Landlord is
unable to deliver possession of the Premises to Tenant by the Scheduled
Date of Delivery specified in the Basic Lease Information (other than
due to an intentional refusal to deliver the space), Landlord shall
not be liable to Tenant for damages of any kind; provided, however, if
Landlord has not delivered the Premises to Tenant in the condition
required by this Lease by March 31, 1998, Tenant may terminate this
Lease. Subject to the foregoing, any delay in delivery shall not affect
Tenant's obligations hereunder; however, the date of June 1, 1998, as
one of the alternatives for the Rent Commencement Date, shall be
extended by one (1) day for each day that Landlord delays in
delivering possession of the Premises to Tenant beyond the Scheduled
Delivery Date.
(d) Delays which May Extend the Date of June 1, 1998. If
the construction
of the Tenant Improvements pursuant to Exhibit C hereof is delayed by
Landlord Delays or Force Majeure Delays (both of which terms are defined
in Exhibit C), Landlord shall not be liable to Tenant for damages of any
kind. Landlord Delays and Force Majeure Delays shall not affect
Tenant's obligations hereunder; however, in addition to subsection (c),
the date of June 1, 1998, as one of the alternatives for the Rent
Commencement Date, shall be extended by one (1) day for each day of
Landlord Delays or Force Majeure Delays, as determined pursuant to
Exhibit C.
2.2. Rent Commencement.
(a) Rent Commencement Date. Tenant's obligation to pay
Minimum Rent shall commence on the earlier of (i) June 1, 1998, or (ii)
the date of "substantial completion" of the Tenant Improvements
described in Exhibit C (the "Rent Commencement Date"), as such date
may be extended as provided in this Lease. For the purpose of sub-part
(ii) of the preceding sentence, the Tenant Improvements described in
Exhibit C hereof shall be deemed to be substantially complete at such
time as the Tenant Improvements for not less than two complete
floors of the Premises have been sufficiently completed to enable, and a
temporary certificate of occupancy has been issued permitting, occupancy
of such floors by Tenant for the use thereof for their intended purpose.
(b) Tenant's Occupancy of Improved Areas prior to the Rent
Commencement Date. If Tenant occupies a portion of the Premises in
which the Tenant Improvements have been substantially completed prior to
the Rent Commencement Date, Tenant until the Rent Commencement Date
shall pay Landlord Minimum Rent in proportion to such
occupancy and one hundred percent (100%) of all costs and expenses
incurred by Landlord as a result of such occupancy (which the parties
agree shall not include Real Estate Taxes). The proportionate amount of
Minimum Rent which Tenant shall owe pursuant to this subsection (b)
shall be calculated by multiplying the Minimum Rent by a fraction, the
numerator of which shall be the rentable area occupied by Tenant and the
denominator of which shall be the total rentable
area of the Premises.
(c) ▇▇▇▇▇▇'s Occupancy of Unimproved Areas prior to the
Rent Commencement Date. If Tenant occupies a portion of the Premises in
which the Tenant Improvements have not been commenced prior to the Rent
Commencement Date, Tenant shall not be required to pay Landlord Minimum
Rent as a consequence of such occupancy. However, Tenant shall pay
Landlord one hundred percent (100%) of all costs and expenses incurred
by Landlord as a result of such occupancy (which the parties agree shall
not include Real Estate
Taxes).
2.3. Holding Over.
(a) Holding Over with ▇▇▇▇▇▇▇▇'s Consent. If ▇▇▇▇▇▇, with
▇▇▇▇▇▇▇▇'s express written consent, retains possession of the Premises
after the expiration of the Term of this Lease, such possession shall be
deemed to be a month-to-month tenancy terminable upon thirty (30) days
written notice by either party. Landlord shall not be deemed to have
consented to ▇▇▇▇▇▇'s continued possession of the Premises by accepting
Rent or any other sum or by orally agreeing to Tenant's continued
possession. During any such month-to-month tenancy, Tenant shall pay
one hundred twenty-five percent (125%) of the Minimum Rent which was
payable by Tenant during the last month of the Term and all other
amounts which Tenant is required to pay under the Lease; provided,
however, that Landlord may change the amount of Rent due under
this Lease upon thirty (30) days written notice to Tenant. A month-to-
month tenancy shall be subject to all provisions of this Lease except
those pertaining to the Term.
(b) Holding Over without Landlord's Consent. If Tenant
retains possession of the Premises after the expiration of the Term of
this Lease without Landlord's written consent, Tenant shall pay to
Landlord one hundred twenty-five percent (125%) of the Minimum Rent
payable by ▇▇▇▇▇▇ immediately prior to the expiration of the Term as
well as the Additional Lease Charges described herein. Imposition or
collection of these sums, however, shall not be construed as granting
Tenant permission to remain in the Premises after the expiration of the
Term of the Lease.
(c) Damages Caused by Tenant's Holding Over. Tenant
acknowledges that if Tenant remains in possession of the Premises beyond
the Term of this Lease without the written consent of Landlord, Tenant
(i) may interfere with ▇▇▇▇▇▇▇▇'s attempts to lease the Premises to
another tenant, (ii) may prevent a subsequent tenant from occupying the
Premises, (iii) may provide a prospective tenant with the grounds for
declaring its lease for the Premises to be null and void, or (iv) may
subject Landlord to a lawsuit brought by a subsequent tenant who
could not occupy the Premises at the time specified with its lease with
the Landlord. As a result, if Tenant occupies the Premises beyond the
Term of this Lease without Landlord's written consent, Tenant shall
indemnify, defend, protect, and hold harmless Landlord from and against
any loss, cost, damage, or expense, including attorneys' fees and legal
costs, incurred by Landlord in connection with ▇▇▇▇▇▇'s failure to
vacate the Premises at the end of the Term. In addition, Tenant shall
pay Landlord any rent or other income which Landlord shall lose as a
result of ▇▇▇▇▇▇'s continued occupancy of the Premises beyond the end of
the Term.
2.4. Option to Extend the Term of the Lease.
Landlord hereby grants to Tenant an option to extend the Term (the
Option") with respect to all (but not less than all) of the Premises for one
(1) period of five (5) years (the "Option Term") on all of the terms and
conditions of this Lease. The Option Term shall commence immediately
following the expiration of the Initial Term (the "Option Term
Commencement Date") and shall expire on the day before the fifth annual
anniversary of the Option Term Commencement Date. Tenant shall exercise
the Option, if at all, by serving Landlord with a written notice of its
exercise of the Option not less than twelve (12) months nor more than
eighteen (18) months prior to the expiration of the Initial Term.
Tenant's notice of exercise of its Option hereunder shall be irrevocable
by ▇▇▇▇▇▇ except as provided to the contrary in Section 3.6(d));
provided, however, Tenant's notice of exercise shall not be effective if
at the time Tenant exercises the Option, Landlord has declared a default
under this Lease. In addition, if at any time after Tenant validly
exercises the Option and prior to the Option Term Commencement Date
Landlord declares a default because of Tenant's failure to pay Minimum
Rent or any Additional Lease Charges, Landlord shall have the right, in
addition to all of Landlord's other rights and remedies under this
Lease, to terminate the Option and to cancel nilaterally Tenant's
exercise of its Option to extend the Term. In that event, this Lease
shall expire at the conclusion of the initial Term, and Tenant shall
have no further rights under this Lease to extend the Initial Term.
ARTICLE 3 - RENT
3.1. Minimum Rent.
Tenant shall pay Landlord, as minimum rent for the Premises, the
amount specified in the Basic Lease Information ("Minimum Rent"). Except as
otherwise expressly provided in the Basic Lease Information,
Tenant shall pay Minimum Rent to Landlord in monthly installments, in
advance, on the first day of each month during the Term of this Lease.
Upon execution of this Lease, Tenant shall deliver to Landlord's
attorney a check in the amount stated in the Basic Lease Information as
Minimum Rent for the second full month of Rent after the Rent
Commencement Date. ▇▇▇▇▇▇▇▇'s attorney shall retain said check,
uncashed, until ▇▇▇▇▇▇▇▇ obtains the consent of Landlord's lender to
this Lease and delivers to Tenant the non-disturbance agreement to which
Section 16.5(b) refers. Upon the delivery of this non-disturbance
agreement, Landlord's attorney shall deliver Tenant's check to Landlord
which may then cash same. If Tenant's obligation to pay Minimum Rent
does not commence on the first day of a calendar month, the Minimum Rent
payable by Tenant for the first fractional month shall be prorated on a
thirty (30) day basis. In addition, Tenant shall pay Landlord the
consideration described in the Supplemental Agreement hereto.
3.2. Interest and Late Charges.
(a) Interest and Late Charges. If Tenant shall fail to
pay when due and payable any Rent or any other amount due under this
Lease, such unpaid amounts shall bear interest at the rate of ten
percent (10%) per annum ("Default Interest") from the date when that
amount is due and payable. Tenant acknowledges that the late payment of
Rent or any other amount due under this Lease will cause Landlord to
incur costs and expenses not contemplated under this Lease, including
but not limited to administrative and collection costs and processing
and accounting expenses, the exact amount of which is extremely
difficult to fix. Therefore, subject to subsection (b) hereof, if any
payment of Rent is not received by Landlord within ten (10) days from
the date when it is due or if any other amount due under this Lease is
not received by Landlord within thirty (30) days from the date when it
is due, Tenant shall pay Landlord a late charge equal to three percent
(3%) of such amount (the "Late Charge"). Landlord and ▇▇▇▇▇▇ agree that
this late charge represents a reasonable estimate of costs and expenses
that will be incurred by Landlord.
(b) Notice to Tenant. The first time in any twelve (12)
month period that Tenant shall fail to pay Rent or any other amount due
under this Lease within the time provided in subsection (a) hereof,
Landlord shall serve Tenant with a written notice of its default before
a Late Charge may be assessed against Tenant. In this instance, a Late
Charge shall only be imposed upon Tenant if ▇▇▇▇▇▇ does not pay Rent or
the amount due within ten (10) days after Landlord serves its written
notice of default on Tenant. Notwithstanding the foregoing, if Tenant
in any twelve (12) month period is late in the payment of Rent or any
other amount due under this Lease on more than three (3) occasions,
Tenant thereafter shall not be entitled to receive a written notice
pursuant to this subsection throughout the remainder of the term of the
Lease.
3.3. Manner of Payment.
Tenant shall pay Rent and any other amount due under this Lease to
Landlord at Landlord's address set forth in the Basic Lease Information
or at such other address as Landlord may hereafter specify in writing to
Tenant. Tenant shall pay all amounts due as Rent or any other amount
due under this Lease in lawful money of the United States, without prior
demand (except for that portion of the Rent or any other amounts due
under this Lease which are specifically identified in this Lease as
amounts payable after notice from Landlord), and without deduction or
offset.
3.4. Definition of Rent.
The term "Rent" when used herein shall refer to both Minimum Rent and
Additional Lease Charges.
3.5. Reduction of Minimum Rent.
At any time prior to the issuance of the Letter of
Credit, Tenant shall have the right to reduce the Minimum Rent set forth
in the Basic Lease Information in exchange for a reduction of the Tenant
Improvement Allowance specified in Exhibit C hereof. The amount of the
reduction of Minimum Rent shall be calculated as follows:
(i) the Tenant Improvement Reduction shall be calculated
by subtracting the actual amounts expended by Landlord pursuant to
Section 2 of Exhibit C from the Tenant Improvement Allowance of
$3,880,600.00 ("Tenant Improvement Reduction"),
(ii) the Tenant Improvement Reduction shall then be
multiplied by .012733 (which is the amount of the monthly payment
required to fully amortize $1.00 at an annual rate of 9% in 119 equal
monthly payments) in order to obtain the amount of the reduction of the
monthly Minimum Rent from the 2nd to the 120th month of the Lease
("Minimum Rent Reduction"), and
(iii) the Minimum Rent Reduction shall be subtracted from
the monthly Minimum Rent in order to obtain the revised monthly Minimum
Rent from the 2nd to the 120th month of the Lease.
For example, if the Tenant Improvement Reduction were $380,600.00, the
revised monthly Minimum Rent would be calculated as follows:
Tenant Improvement Allowance $3,880,600.00
Landlord's Actual Expenditures
on Tenant Improvements - 3,500,000.00
Tenant Improvement Reduction $ 380,600.00
Tenant Improvement Reduction $380,600.00
Multiplier x .012733
$ 4,846.18
Months 2 - 60 Months 61 - 120
Minimum Rent $208,582.25 $240,920.59
Minimum Rent Reduction - 4,846.18 - 4,846.18
Revised Minimum Rent $203,736.07 $236,074.41
3.6. Minimum Rent during the Option Term.
(a) Rent for the Option Term. The Lease for the Option
Term shall be upon the same terms and conditions as during the original
Term, except (i) the Base Year for calculating Additional Lease Charges
for the Option Term shall be the period specified in the Basic Lease
Information, and (ii) the Minimum Rent during the Option Term shall be
equal to ninety-five percent (95%) of the Prevailing Market Rate (as
that term is defined in subsection (c) hereof) for Comparable Space (as
that term is defined in subsection (b) hereof).
(b) Comparable Space. As used herein, the term Comparable
Space" shall mean leased general office space determined in accordance
with Section 3.6(f)(ii).
(c) Prevailing Market Rate. As used herein, the term
"Prevailing Market Rate" shall mean the amount of monthly minimum rent
determined from leases, excluding subleased space, of Comparable Space
(1) which have been executed within the period between six (6) months
and eighteen (18) months before the commencement of the Option Term or
(2) where the prevailing market rent in a lease of Comparable Space has
been determined within the period between six (6) months and eighteen
(18) months before the commencement of the Option Term in order to
determine option rent for such lease in connection with the exercise of
an option to extend the term of such lease. The determination of
Prevailing Market Rate shall take into account and adjust, when it is
appropriate to do so, for the following items of comparability:
(i) the effective rent which shall mean the aggregate of all of the
minimum rent paid by each tenant in Comparable Space over the term of
that lease and dividing that aggregate amount of minimum rent by the
number of months in the lease term for each lease of Comparable Space,
(ii) the location and size of the premises covered
by leases of Comparable Space,
(iii) the value (determined on the basis of dollars
per rentable square foot) of tenant improvements to the premises covered
by leases of Comparable Space, for which the landlord paid at the
commencement of the new term for which the effective rate has been
calculated, and
(iv) the duration of the term of leases of
Comparable Space.
(d) ▇▇▇▇▇▇▇▇'s Notice and ▇▇▇▇▇▇'s Response. No later
than ten (10) months prior to the commencement of the Option Term,
Landlord shall serve Tenant with a written notice setting forth
Landlord's determination of the Prevailing Market Rate for the Option
Term ("Landlord's Notice") and with a list of leases of Comparable Space
("Comparable Space List") upon which Landlord's Notice was based. The
Comparable Space List shall include at least the following information
for each lease: (i) the address of the leased space, (ii) the names of
the landlord and tenant, (iii) the rentable square footage, (iv) the
lease term, (v) the minimum monthly rent throughout the lease term, (vi)
any periods of free rent, and (vii) the value of tenant improvements for
which the landlord paid. Within twenty (20) days after service of
Landlord's Notice, Tenant shall serve Landlord with a written notice
("Tenant's Response") stating that Tenant either (1) elects to terminate
the exercise of its Option (in which event the Option shall lapse and
this Lease shall terminate on the expiration of the Initial Term), or
(2) disagrees with Landlord's determination of the Prevailing Market
Rate and elects to resolve the disagreement as provided in subsection
(f) hereof. If Tenant does not serve Landlord with ▇▇▇▇▇▇'s Response as
provided in the previous sentence, Landlord's determination of the
Prevailing Market Rate shall be binding upon Tenant.
(e) Informal Resolution. Landlord and Tenant shall use
their best efforts meet at least two (2) times within a twenty (20) day
period, at a mutually agreeable time and place, to attempt to resolve
their disagreement concerning the Prevailing Market Rate. This
consultation period (regardless of its actual length) shall be deemed to
have terminated when Landlord or Tenant shall serve the other with a
written notice stating that that party has decided to resolve the
dispute regarding Prevailing Market Rate pursuant to Section 3.6(f) of
the Lease ("Binding Resolution Notice").
(f) Binding Resolution of any Disagreement regarding Prevailing Market
Rate. Any disagreement regarding the Prevailing Market Rate shall be
resolved as follows:
(i) If Landlord and Tenant cannot agree on the
Prevailing Market Rate, Landlord and Tenant shall each select one real
estate broker ("Party Broker") to determine the Prevailing Market Rate.
Each Party Broker chosen by ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ shall serve his/her
written opinion determination of the Prevailing Market Rate (determined
in accordance with the terms of this Section 3.6) on both Landlord and
Tenant within thirty (30) days after the date when the Binding
resolution Notice was served on Landlord or Tenant.
(ii) In making their determination of the Prevailing Market Rate, the
Party Brokers shall first attempt to find leases of Comparable Space in
excess of 40,000 rentable square feet in the area in yellow on Exhibit D
(the "Preferred Area"). If the Party Brokers are able to find at least
five (5) leases of Comparable Space in excess of 40,000 rentable square
feet within the Preferred Area, the Prevailing Market Rate shall be
based solely on leases of Comparable Space within the Preferred Area.
If the Party Brokers are unable to find at least five (5) leases of
Comparable Space in excess of 40,000 rentable square feet in the
Preferred Area, leases of Comparable Space in excess of 20,000 rentable
square feet in the entire area on Exhibit D shall also be used to
determine the Prevailing Market Rate.
(iii) At least ten (10) days before the Party Brokers are required to
serve their written opinion of the Prevailing Market Rate on Landlord
and Tenant, each Party Broker shall serve the other, by personal
delivery or by facsimile transmission, with the Comparable Space List
which that Party Broker intends to use in reaching his/her opinion of
Prevailing Market Rent. If either Party ▇▇▇▇▇▇ fails to serve the other
with his/her Comparable Space List as required by this sub-part (iii),
the Neutral Broker shall only use leases on the Comparable Space List of
the Party Broker which did comply with this sub-part (iii) in reaching
his/her determination of Prevailing Market Rent.
(iv) If only one Party ▇▇▇▇▇▇ serves his/her written
determination of the Prevailing Market Rate on Landlord and Tenant
within the time period stated in sub-part (i) hereof, that opinion shall
be deemed to be the Prevailing Market Rate for the Option Term. If
both Party Brokers serve their respective determinations of Prevailing
Market Rate within the time period stated in sub-part (i) hereof and if
the two opinions of Prevailing Market Rate differ by five percent (5%)
or less of the higher of the two, the average of the two opinions shall
be the Prevailing Market Rate. If the two opinions differ by more than
five percent (5%) of the higher of the two, then the two Party Brokers
shall select a third real estate broker (the "Neutral Broker") to
determine the Prevailing Market Rate. If the Party Brokers are unable
to agree upon a Neutral Broker within twenty (20) days, either Landlord
or Tenant may request the American Arbitration Association to appoint
the Neutral Broker to determine the Prevailing Market Rate.
(v) After the selection of the Neutral Broker, each
Party Broker shall serve the Neutral Broker with (1) his/her written
determination of the Prevailing Market Rate for Comparable Space which
was served in accordance with sub-part (i) hereof and (2) if a Party
Broker has complied with sub-part (iii) hereof, his/her Comparable Space
List. Each party may also submit to the Neutral Broker, with a copy
simultaneously served on the other party, a written argument in support
of its determination of the Prevailing Market Rate. Neither Party
Broker may change the figure in its determination of the Prevailing
Market Rate after delivering its determination to the other pursuant to
sub-part (ii) hereof or change the leases on its Comparable Space List
after delivering same to the other Party Broker pursuant to sub-part
(iii) hereof. Subject to the limitation set forth in subsection (g)
hereof, the Neutral Broker, within thirty (30) days after his/her
selection, shall determine the Prevailing Market Rate by choosing one of
the determinations of the Prevailing Market Rate submitted by the Party
Brokers. If both Party Brokers served their Comparable Space List in
compliance with sub-part (iii) hereof, the Neutral Broker shall base
his/her decision upon the Comparable Space Lists submitted by both Party
Brokers and any research which the Neutral Broker chooses to do on
his/her own. If only one Party ▇▇▇▇▇▇ served his/her Comparable Space
List in compliance with sub-part (iii) hereof, the Neutral Broker shall
base his/her decision only upon the Comparable Space List submitted by
the Party Broker which complied with sub-part (iii) hereof.
(vi) All real estate brokers chosen to render an
opinion of the Prevailing Market Rate (including the Neutral Broker)
shall be real estate brokers licensed and in good standing with the
State of California with not less than ten (10) years' experience in
commercial property leasing in the downtown San Francisco area;
provided, however, the Neutral Broker (but not every broker in the firm
with which the Neutral Broker is employed or associated) shall be a
person who has not represented or acted in any capacity for either party
for a period of ten (10) years before the selection of that person as
the Neutral Broker. Each party shall pay the cost of the Party Broker
selected by such party and one-half of the cost of the Neutral Broker.
(vii) The provisions of subsection (f) hereof shall
be the sole procedure for the determination of Prevailing Market Rate for
the Option Term in the event of a disagreement between Landlord and
Tenant; and Section 16.1 shall be inapplicable thereto.
(g) Limitation on the Determination of Prevailing Market
Rate. Notwithstanding anything to the contrary set forth in this
Section 3.6, in no event shall the monthly Minimum Rent for the Option
Term be less than the Minimum Rent payable for the one month period
immediately preceding the commencement of the Option Term.
(h) Confirmation of the Determination of Prevailing Market
Rate. The determination of Prevailing Market Rate pursuant to the
procedure set forth in this Section 3.6 shall be final and binding on
the parties and may be confirmed by the Superior Court of the City
and County of San Francisco upon the filing of a petition therefor by
Landlord or Tenant. However, if the Neutral Broker does not determine
the Prevailing Market Rate by choosing one of the determinations of
Prevailing Market Rate submitted by the Party Brokers and, instead, uses
a different figure, the Neutral Broker shall be deemed to have exceeded
his/her powers; and the Neutral Broker's determination of Prevailing
Market Rate may be vacated pursuant to Section
1286.2(d) of the Code of Civil Procedure. Landlord and Tenant hereby
waive all of the provisions of Sections 1280 et seq. of the California
Code of Civil Procedure and the Commercial Arbitration Rules of the
American Arbitration Association which are contrary to any of the
provisions of this Section 3.6.
(i) Minimum Rent Payable if the Prevailing Market Rate Is
Not Determined prior to the Option Term. If for any reason there has
not been a determination of the Prevailing Market Rate by the
commencement of the Option Term, Tenant's Minimum Rent payment at the
commencement of the Option Term shall be an amount equal to the Minimum
Rent payable immediately preceding the commencement of the Option Term.
In such event, Tenant shall pay Landlord the difference, if any, between
the Prevailing Market Rate and the Minimum Rent which Tenant had paid
during the Option Term within ten (10) business days after the
Prevailing Market Rate is determined, together with interest thereon at
the rate of five percent (5%) per annum, computed from the beginning of
the Option Term until the date of payment. Notwithstanding any dispute
regarding the Prevailing Market Rate, Tenant shall pay all
applicable Additional Lease Charges with respect to the Premises, in the
manner and at the times provided in this Lease, effective upon the
commencement of the Option Term.
3.7. Percentage Rent.
(a) Percentage Rent. In addition to the Minimum Rent, if
Tenant's Permitted Non-Office use involves Tenant's Retail Use (which
term shall be defined hereafter) of the Premises, Tenant shall pay
Landlord an amount equal to five percent (5%) of Gross Sales from
Tenant's Retail Use in excess of the Breakpoint ("Percentage Rent").
(b) Tenant's Retail Use and Breakpoint. The term
"Tenant's Retail Use" shall mean any use of the Premises by Tenant in
the area allowed for Permitted Non-Office Use from which Tenant receives
income which would require Tenant to pay sales tax to the State of
California. The term "Breakpoint" shall mean that amount of Gross Sales
which when multiplied by the Percentage Rent will equal the Minimum Rent
in any calendar year for the portion of the Premises which Tenant uses
for a Permitted Non-Office Use (except that portion of the Premises to
which Section 7.1(v) refers).
(c) Gross Sales. The term "Gross Sales" shall mean: the
actual sales prices or rentals of all goods, wares and merchandise sold,
leased, licensed or delivered and the actual charges for all services
performed by Tenant in, at, from, or arising out of the use of the
portion of the Premises devoted to Tenant's Retail Use, whether for
wholesale, retail, cash, credit, or trade-ins or otherwise. Gross Sales
shall include, without limitation, sales and services for which Tenant
is liable to the State of California for sales taxes and (i) where the
orders therefore originate in, at, from, or arising out of the use of
the Premises, whether delivery or performance is made from the Premises
or from some other place, (ii) made or performed by mail, telephone,
facsimile or computer-generated orders, and (iii) made or performed by
means of mechanical or other vending devices in the Premises. Any sums
which a customer deposits with and forfeits to Tenant shall be included
in Gross Sales. Each installment or credit sale shall be treated as a
sale for the full price in the month during which such sale is made,
regardless of whether or when Tenant receives payment therefor. No
franchise or capital stock tax and no income or similar tax based on
income or profits shall be deducted from Gross Sales.
(d) Exclusions for Gross Sales. Gross Sales shall not
include (i) any amounts collected and paid by Tenant for sales or excise
tax imposed by any duly constituted governmental authority, (ii) any
cash or credit refund made upon any sale in or from the Premises
where the merchandise sold is thereafter returned by the purchaser and
accepted by ▇▇▇▇▇▇, or (iii) sales to Tenant's employees.
(e) Gross Sales Reports and Payment of Percentage Rent.
Within twenty (20) days after the close of each calendar year, Tenant
will furnish Landlord with a written statement, certified as true and
accurate by Tenant, setting forth by calendar month the total amount of
the Gross Sales from the Premises during the preceding calendar year.
This statement shall be in the form and shall contain such information
and breakdown as Landlord may reasonably require. Concurrently with the
delivery of this written statement, Tenant shall pay Landlord the
amount, if any, by which Percentage Rent for that year exceeds the
Breakpoint.
(f) Books and Records. Tenant shall maintain in San
Francisco, in accordance with generally accepted accounting principles,
consistently applied, complete and accurate books of account and records
of all daily receipts from sales made or services provided in connection
with Tenant's Retail Use, whether for cash or on credit, showing
cumulative totals and all transactions. These books and records shall
include, but not be limited to, true copies of all sales and other
excise tax reports that Tenant may be required to furnish to any
governmental agency. These books and records shall be kept for a period
of at least three (3) years after the date of Tenant's annual statement
of Percentage Rent as described in subsection (e) hereof. The receipt
by Landlord of any statement of Gross Sales or Percentage Rent for any
period or the payment of any sum as Rent shall not bind Landlord as to
the correctness of that statement.
(g) Right to Audit. Landlord or Landlord's designee
shall have the right to examine, at any time during normal business hours,
all books and records of Tenant which pertain to Tenant's Retail Use of the
Premises. Once in each twelve (12) month period, Landlord shall be
entitled to conduct, or have a certified public accountant conduct, an
audit of the records of all business conducted in connection with
Tenant's Retail Use for the purpose of determining Gross Sales. This
audit shall be conducted during normal business hours at the Premises.
If it shall be determined as a result of such audit that there has been
a deficiency in the payment of Percentage Rent, such deficiency shall
become immediately due and payable with interest from the date when the
payment should have been made at the rate of ten percent (10%) per
annum.
ARTICLE 4 - REAL ESTATE TAXES AND OPERATING EXPENSES
4.1. Tenant Shall Pay Increases in Real Estate Taxes and
Operating Expenses.
(a) Increases in Additional Lease Charges. During the
period when Tenant occupies, or has the right to occupy, the Premises,
Tenant shall pay any increase, over the Base Year set forth in the Basic
Lease Information, in Real Estate Taxes (as hereafter defined) levied
or assessed against the Premises during the Base Year, and in Operating
Expenses (as hereafter by Landlord in the Base Year. The amount of any
increase in Real Estate Taxes and in Operating Expenses as hereinabove
provided shall together be defined herein as "Additional Lease Charges."
(b) Estimate of Increases in Additional Lease Charges.
Landlord may, at its option, estimate the Additional Lease Charges to be
paid by Tenant during the current Lease Year (as hereafter defined) by
delivering written notice to Tenant stating the amount Tenant is equired
to pay each month as the estimated increase in Additional Lease Charges.
Thereafter, Tenant shall pay, as additional Rent, the estimated increase
in Additional Lease Charges with its monthly payment of Minimum Rent.
(c) Reconciliation with the Actual Increases in Additional
Lease Charges. Within ninety (90) days following the end of each Lease
Year, commencing in the Lease Year after Tenant first pays estimated
Additional Lease Charges, Landlord shall deliver to Tenant a
reconciliation of Tenant's payments of Additional Lease Charges with the
actual increase in Real Estate Taxes and Operating Expenses over the
Base Year. If that reconciliation shows an amount owing by Tenant that
is less than the payments made by Tenant and if Tenant is not in default
under this Lease at the time such reconciliation is delivered, Landlord
shall credit any overpayment to the next payment(s) of Additional Lease
Charges. If this reconciliation shows that Tenant owes more than the
estimated payments made by Tenant, Tenant shall pay the deficiency to
Landlord within thirty (30) days after delivery of such statement of
reconciliation.
(d) Lease Year. The term "Lease Year" shall mean a twelve
(12) month period commencing on the annual anniversary of first day of
the month in which the Rent Commencement Date occurs.
(e) Survival of Obligations. The respective obligations
of Landlord and Tenant under this Section 4.1 shall survive the
expiration or earlier termination of this Lease.
4.2. Definition of Real Estate Taxes.
(a) Taxes and Assessments Included within the Definition
of Real Estate Taxes. The term "Real Estate Taxes" as used herein shall
include all real property taxes and assessments on the Premises, as well
as all personal property taxes levied on property used in operation of
the Premises whether or not now customary or within the contemplation of
the parties to this Lease. Real Estate Taxes shall include, but not be
limited to: (a) general and special assessments, license fees,
commercial rental tax levy, gross receipts tax (other than inheritance
or estate taxes), fees or assessments for transit, housing, police,
fire, or other governmental services imposed by any authority having the
direct or indirect power to tax against any legal or equitable interest
of Landlord in the Premises, against the Landlord's right to rent or
other income therefrom or against the Landlord's business of leasing the
Premises; (b) any tax, fee or charge with regard to the possession,
leasing, transfer of interest, operation, management, maintenance,
alteration, repair, use or occupancy by Tenant of the Premises; (c) any
tax imposed in substitution, partially or totally, for any tax
previously included within the definition of Real Estate Taxes herein;
or (d) any additional property tax or assessment, the nature of which
may not have been previously included within the definition of Real
Estate Taxes. The term "Real Estate Taxes" shall also include the cost
to Landlord of contesting the amount, validity or applicability of any
taxes or assessments mentioned in this Section 4.2 (except if such tax
is excluded under Section 4.2(c) below). If, as a result of contesting
any Real Estate Taxes or for any other reason, Landlord obtains a
reduction in Real Estate Taxes, Tenant shall be entitled to the same
reduction in the increase in Real Estate Taxes as Landlord receives.
(b) Assessments Paid in Installments. If any general or
special assessment which is payable in installments is levied and
assessed against the Premises, Tenant shall pay such assessments in
installments over the longest period permitted.
(c) Taxes and Assessments Excluded from the Definition of
Real Estate Taxes. The term "Real Estate Taxes" shall not include (i)
any tax which may be levied on or against the net income or profit of
Landlord, (ii) any inheritance, estate taxes, transfer taxes, franchise
taxes and capital stock taxes, (iii) any environmental assessments,
charges, or liens arising in connection with the remediation of
Hazardous Materials from the Premises, (iv)
reserves for the payment of future Real Estate Taxes. In addition, in
no event shall Real Estate
Taxes include any penalty or interest due to Landlord's late payment of
taxes.
(d) Limitation on Increases in Real Estate Taxes due to a
Change in Ownership. Despite any other provision of this Lease, if there
is a change in ownership of the Premises during the initial Term of this
Lease and, as a result, the Premises is reassessed for Real Estate Tax
purposes pursuant to Sections 60 et seq. of the California Revenue and Tax
Code ("Reassessment"), ▇▇▇▇▇▇'s obligation to pay increases in Real Estate
Taxes as a result of a Reassessment shall be limited as follows:
(i) Tenant shall never pay an increase in Real
Estate Taxes attributable to Reassessment(s) in any Lease Year which exceeds
Two Hundred Fifty Thousand Dollars ($250,000.00). For example, if the Real
Estate Taxes assessed in the Base Year were $65,000.00 and if there were a
transfer during the third Lease Year which caused a Reassessment and, solely
as a result of the Reassessment, if Real Estate Taxes beginning on the
first day of the fourth Lease Year increased by $250,000, the increases in
Real Estate Taxes which Tenant would pay as a result of this limitation
(before calculating the limitation in sub-part (ii) hereof) can be
illustrated as follows:
Real Estate
Real Estate Taxes Payable Real Estate RealEstate
Lease Taxes w/o by Tenant w/o Taxes due to Total Real Taxes Paid By
Year Reassessment Reassessment Reassessment Estate Taxes Tenant
1 $65,000.00 0 0 $ 65,000.00 0
2 $66,300.00 $ 1,300.00 0 $ 66,300.00 $ 1,300.00
3 $67,626.00 $ 2,626.00 0 $ 67,626.00 $ 2,626.00
4 $68,979.00 $ 3,979.00 $250,000.00 $318,979.00 $253,979.00
5 $70,358.00 $ 5,358.00 $255,000.00 $325,358.00 $255,358.00
6 $71,765.00 $ 6,765.00 $260,100.00 $331,865.00 $256,765.00
7 $73,201.00 $ 8,201.00 $265,302.00 $338,503.00 $258,201.00
8 $74,665.00 $ 9,665.00 $270,608.00 $345,273.00 $259,665.00
9 $76,158.00 $ 11,158.00 $276,020.00 $352,178.00 $261,158.00
10 $77,681.00 $12,681.00 $281,541.00 $359,222.00 $262,681.00
(ii) Tenant's obligation for increases in Real
Estate Taxes attributable to a Reassessment in each Lease Year shall be
determined by multiplying the amount which represents any increase in Real
Estate Taxes due to Reassessment(s) by the following percentages in the
following Lease Years:
Lease Year Percentage
1 0%
2 20%
3 30%
4 40%
5 50%
6 60%
7 70%
8 80%
9 90%
10 100%
This limitation, combined with the limitation in sub-part (i) can be
illustrated, by using the assumptions in the example in sub-part (i),
as follows:
Real Estate Real Estate
Taxes Payable Taxes due to Real Estate
Lease by Tenant w/o Reassessment Total Real Taxes Paid by
Year Reassessment Limited by % Estate Taxes Tenant
1 0 0 0 0
2 $ 1,300.00 0 $ 1,300.00 $ 1,300.00
3 $ 2,626.00 0 $ 2,626.00 $ 2,626.00
4 $ 3,979.00 $100,000.00 $ 103,979.00 $ 103,979.00
5 $ 5,358.00 $127,500.00 $ 132,858.00 $ 132,858.00
6 $ 6,765.00 $156,060.00 $ 162,825.00 $ 162,825.00
7 $ 8,201.00 $185,711.00 $ 193,912.00 $ 193,912.00
8 $ 9,665.00 $216,486.00 $ 226,151.00 $ 226,151.00
9 $ 11,158.00 $248,418.00 $ 259,576.00 $ 259,576.00
10 $ 12,681.00 $281,541.00 $ 294,222.00 $ 262,681.00
(iii) Tenant shall not pay any increase in Real
Estate Taxes due to Reassessment(s) which have occurred solely because of
a change in ownership interests within the limited liability company entity
which is Landlord or any transfer from Landlord to an entity
in which those (or any of their relatives) who currently hold more than
fifty (50%) of the ownership interests in Landlord own fifty percent (50%)
or more of an interest in the succeeding entity.
4.3. Definition of Operating Expenses.
(a) Definition of Operating Expenses. "Operating
Expenses" shall mean the total cost and expenses paid or incurred by Landlord
in connection with the management, operation, maintenance and repair of the
Premises, including, without limitation, (i) janitorial,
maintenance, and other service contracts; (ii) materials, supplies,
equipment, and tools; (iii) the cost of landscape maintenance and the
replacement of plants, trees, and vegetation; (iv) the cost
of maintenance, replacement, and repairs to the Premises; (v) license,
permit, and inspection fees; (vi) all inspections and testing of the Premises
(except voluntary Phase II environmental inspections which are unrelated to
Tenant's occupancy, Phase I environmental inspections which
may be required by Landlord's lender, or repointing of the bricks on the
exterior of the Premises); (vii) wages, salaries, employee benefits and
payroll costs of Landlord's employees in or serving the Premises (excluding
such costs of personnel above the rank of project manager);
(viii) the reasonable fees, charges and other costs, of independent
contractors engaged by Landlord to perform work that is otherwise an Operating
Expense; (ix) a management fee equal to four percent (4%) of the Minimum Rent
each Lease Year which shall be paid to Landlord for its services as a manager;
(x) the cost of capital improvements or replacements capitalized for
federal income tax purposes (amortized over the useful life of the
improvement, as determined for federal income tax purposes, together with
interest on the unamortized balance at the rate paid by Landlord on funds
borrowed for the purpose of constructing such capital improvements)
made to the Premises in response to Tenant's requests for additional
services or improvements (so long as Tenant shall have given its prior written
approval to such capital improvement, which approval shall not be unreasonably
withheld) or occasioned by newly enacted Government Requirements as set forth
in subsections (b) and (c) of Section 8.8, (xi) the cost of contesting the
validity or applicability of any Government Requirements described in
Section 8.7 or 8.8(b), and (xii) insurance premiums and the deductible
portion on any claim for all insurance obtained by Landlord for the Premises
pursuant to, and calculated in accordance with, Section 10.2.
(b) Exclusions from Operating Expenses. Notwithstanding
the foregoing, the term "Operating Expenses" shall not include (i) Real Estate
Taxes, (ii) depreciation on the Premises, (iii) capital improvements (except
as provided in clause (x) above), (iv) real estate brokers' commissions,
executive salaries (exclusive of fees paid for management activities), (v)
attorneys' fees and court costs (except as provided in clause (xiii)
above), (vi) voluntary exterior window replacements, (vii) principal and
interest payments on loans and ground lease payments
and other similar finance charges, (viii) repairs or other work
occasioned by the exercise of the power of eminent domain, (ix) costs
incurred due to Landlord's violation of the terms and conditions of this
Lease or of any law, statute, ordinance, (x) expenses for which Landlord is
fully compensated or reimbursed by insurance or by any other party, (xi)
cost of repairs or other work occasioned by a Casualty Loss (as that term
is defined in Section 11.1 hereof), (xii) Landlord's general overhead and/or
administrative expenses, (xiii) except as otherwise expressly
provided in this Lease, any cost or other expense incurred with respect
to the investigation, removal, remediation, containment, clean-up, or other
response associated with or pertaining to the actual or alleged presence of
Hazardous Materials at, on, beneath, or in the vicinity of the
Premises or to the actual or threatened release of Hazardous Materials
at, on, beneath, or in the vicinity of the Premises, (xiv) any costs paid to
any affiliate of Landlord which is in excess of the amount which would be
paid absent such relationship, and (xv) costs incurred in connection with
any financing or refinancing of the Premises by Landlord.
(c) Consultation regarding Operating Expenses. Each year
Landlord agrees to consult with ▇▇▇▇▇▇ regarding the Operating Expenses which
it anticipates incurring over the next twelve (12) months. Tenant may offer
any suggestions which it believes may improve services to the Premises or
reduce Operating Expenses; and Landlord shall give Tenant's suggestions due
consideration in planning for the Operating Expenses for the Premises.
(d) Change of a Policy or Procedure which Increases or
Decreases Operating Expenses. If Operating Expenses at any time increase or
decrease as a result of a change in a policy or procedure in the operation
of the Premises (e.g., the addition of earthquake insurance or
other insurance coverages if such insurance or coverages were not
included in Operating Expenses in the Base Year or any change in the
management fee) ["Expense Change"], the Operating Expenses for the Base Year
shall be adjusted for the twelve (12) month period in
which the Expense Change occurs (and for all subsequent years during
which that Expense Change remains in effect). The Operating Expenses for the
Base Year shall be increased or decreased, as appropriate, by the estimated
amount that (i) would have been included in the Operating Expenses for the
Base Year if the Expense Change had been in effect during the Base Year or
(ii) would not have been included in Operating Expenses for the Base Year if
the Expense Change were not in effect during the Base Year. The Operating
Expenses for the twelve (12) month period in which the Expense Change occurs,
and thereafter so long as it remains in effect, shall be based upon the
revised Operating Expenses for the Base Year.
(e) Limitation on Operating Expenses. For any twelve (12)
month period in which increases in Operating Expenses are determined, Landlord
shall not collect in excess of one hundred percent (100%) of the amount by
which all Operating Expenses in the Premises for that period exceed the
aggregate of all Operating Expenses for the Base Year. Landlord shall not
recover, through Operating Expenses, any item of cost more than once.
4.4. Tenant's Right to Audit.
Landlord shall keep in San Francisco complete and
detailed books and records of account relating to Operating Expenses and Real
Estate Taxes for a period of three (3) years after Landlord delivers to Tenant
its annual statement of reconciliation of Additional Lease Charges. During
that same period of three (3) years, Tenant shall have the right to inspect
the books and any other pertinent records of Landlord, on reasonable notice
and during normal business hours, for the purpose of verifying such statement.
Tenant may contest Landlord's computation of Additional Lease Charges for the
Premises, either in whole or in part, by giving Landlord written notice
stating its objections; provided that such notice is received by ▇▇▇▇▇▇▇▇,
not later than two (2) months after the expiration of the aforesaid
three (3) year period. If Landlord agrees, or it is determined through
arbitration pursuant to Section 16.1 hereof, that there has been an
over-charge of Additional Lease Charges to Tenant, Landlord
shall reimburse Tenant for such over-charges within ten (10) days of such
determination, but Tenant shall not have the right to terminate this Lease as
a consequence of such over-charges.
4.5. Tenant Shall Pay for Taxes Levied on its Property.
Tenant shall be liable for, and pay prior to delinquency, all taxes
levied against ▇▇▇▇▇▇'s Property. If any taxes on the above-described property
are levied against Landlord or Landlord's
property and if Landlord pays the same believing them to be due, or if the
assessed value of
Landlord's property is increased by the inclusion of the value placed on the
above-described property and if
Landlord pays the taxes based on such increased assessment believing same to be
due, Tenant shall pay Landlord the taxes so levied against Landlord or the
portion of such taxes resulting from the increase in the assessments due to the
above-described property.
ARTICLE 5 - UTILITIES USED IN THE PREMISES
5.1. Tenant Shall Pay for all Utility Costs.
Within ten (10) days after receiving a bill therefor from Landlord
or directly from the utility, Tenant shall directly pay to the appropriate
utilities for all Utility Costs, including taxes thereon, incurred in
connection with the Premises and/or
Tenant's occupancy thereof during the entire Term of this Lease. The term
"Utility Costs" shall mean the total cost for all water, heat,
air-conditioning, gas, electricity,
telephone/telecommunications, garbage, and other utilities provided to or for
the Premises (collectively "Utilities").
5.2. No Liability for Interruption in Utilities.
Landlord shall not be liable in damages or otherwise, and Tenant
shall not be entitled to a reduction in Rent or to terminate this Lease,
as a consequence of any failure or interruption of any utility or service
provided to the Premises, unless caused by the gross negligence or willful
misconduct of Landlord.
5.3. Intra-Building Network Cable.
Tenant shall be solely responsible, and Landlord shall not
be responsible, for providing any telephone equipment, including wiring, within
the Premises or for providing telephone service or connections from the utility
to the Premises.
ARTICLE 6 - SECURITY DEPOSIT
6.1. Security Deposit.
(a) Letter of Credit or Proceeds from the Letter of Credit
as a Security Deposit. On the later of January 2, 1998 or five (5) days prior
to the commencement of construction of the Tenant Improvements in the Premises
pursuant to
Exhibit C hereof, Tenant at its sole cost and expense shall deliver to Landlord
an irrevocable
stand-by letter of credit in the amount set forth in the Basic Lease
Information and on the terms
described in Section 6.2 ("Letter of Credit"). The Letter of Credit and any
amount of the Letter of Credit that is drawn on by Landlord but not applied
by Landlord to a default of Tenant shall be
held by Landlord as security for Tenant's faithful performance of its
obligations under this
Lease. If the security deposit is in the form of cash because Landlord has
drawn on the Letter
of Credit, the security deposit may be commingled with funds of Landlord,
and Landlord shall
have no obligation or liability for payment of interest on the security
deposit.
(b) Use of the Security Deposit. If Tenant fails to pay
any amount when due and payable hereunder or fails to perform any of the terms
hereof and
Landlord declares a default under this Lease as a result thereof, Landlord
may apply and use all or
any portion of the security deposit for Rent, for payment of any amount for
which Landlord has
become obligated as a result of Tenant's default, or for any loss, expense,
or damage sustained by
Landlord as a result of Tenant's default.
(c) Restoration of the Security Deposit. If Landlord uses
any of the security deposit, Tenant shall, within ten (10) days after written
demand
therefor, restore the security deposit, either in the form of cash or the
issuance of a new irrevocable
stand-by letter of credit on the terms set forth in Section 6.2, to the full
amount required by the
Lease. Tenant's failure to do so shall constitute a default hereunder;
and Landlord shall have the
same remedies set forth in Article 14 for a default in the payment of Rent.
6.2. Terms of the Letter of Credit. The irrevocable stand-by Letter
of Credit which Tenant shall deliver to Landlord as its security deposit:
(a) shall be in compliance with the terms of this Article
6 and otherwise shall be in a form reasonably satisfactory to Landlord,
(b) shall be issued by a mutually agreeable financial
institution ("Bank"),
(c) shall name Landlord as beneficiary,
(d) shall be for a term of no less than one (1) year and
shall provide that it is automatically renewable unless the issuer serves
Landlord with a written
notice of non-renewal ("Notice of Non-Renewal") at least thirty (30) days
before the then
applicable expiration date of the Letter of Credit,
(e) shall provide that in the event that Landlord
transfers ownership of the Premises to another person/entity, Landlord, subject
to compliance with
the requirements of the Bank for the transfer of the Letter of Credit, may
transfer the Letter
of Credit to the new owner upon ▇▇▇▇▇▇▇▇'s presentation to the issuer of a
written notice of
transfer together with the original Letter of Credit and that in such event the
issuer shall
reissue the Letter of Credit in the name of the transferee stated in the
notice of transfer, and
(f) shall provide that Landlord may draw upon the Letter
of Credit by presenting the following to the issuer: (i) a sight draft in an
amount which does not exceed the amount of the Letter of Credit executed by
the person executing the
"Certificate" as described in sub-part (ii) hereof, and (ii) a certificate
(the "Certificate")
executed under penalty of perjury under the laws of the State of California,
stating that the person
executing the Certificate is the duly appointed representative of Landlord
and further stating (1) that
the Account Party is in default under the Lease, following written notice and
the passage of any
applicable cure period, and that the amount of the sight draft presented
concurrently with the
Certificate is due, owing, and unpaid under the Lease, or (2) that the "Notice
of Non-Renewal" has
been given and that the Account Party has not provided Landlord with a
satisfactory substitute
letter of credit.
6.3. Release/Reduction of the Letter of Credit.
(a) Release of the Letter of Credit. So long as Tenant
has never been in material default under this Lease beyond any applicable cure
periods, the Letter of Credit shall be released by Landlord on the later of (i)
January 1, 2000 or (ii) the
date when ▇▇▇▇▇▇ has established, to Landlord's reasonable satisfaction, that
it has achieved
either of the following financial goals:
(i) after-tax net income (as reported on its Form
10-Q filings) in excess of $0 for eight (8) consecutive quarters prior to the
date of the
release of the Letter of Credit, or
(ii) after-tax net income, excluding the after-tax
effect of extraordinary items (as reported on its Form 10-K filings) exceeded
One
Million Dollars ($1,000,000.00) for each of the two (2) consecutive fiscal
years ending
prior to the date of the release of the Letter of Credit.
(b) Reduction of the Letter of Credit. At any time prior
to the Commencement Date, Tenant shall have the right to reduce the Letter of
Credit in exchange for a reduction of the Tenant Improvement Allowance
specified in Exhibit C
hereof. The amount of the reduction of the Letter of Credit shall be equal to
two-thirds
(2/3rds) of the amount by which the Tenant Improvement Allowance is reduced.
For example, if the Tenant
Improvement Allowance were reduced by Nine Hundred Thousand Dollars
($900,000.00),
the Letter of Credit would be reduced by Six Hundred Thousand Dollars
($600,000.00).
ARTICLE 7 - USE AND CONDITION OF THE PREMISES
7.1. Use of the Premises.
Tenant shall only use or permit the Premises to be used for those
purposes explicitly
set forth in the Basic Lease Information, and no use of the Premises for any
other purpose or
in any manner in violation of the terms of this Lease shall be permitted. In
addition,
any interactive or multi-media use or any retail use (collectively "Permitted
Non-Office Uses") of the
Premises shall also be limited by all of the following restrictions:
(i) all Permitted Non-Office Uses shall be limited to the
first floor of the Premises;
(ii) Tenant at its sole cost and expense shall be
responsible for obtaining any and all governmental permits and all required
approvals necessary for
all Permitted Non-Office Uses (the availability of which is not warranted by
Landlord);
(iii) except as provided in sub-part (v) hereof, only the
named Tenant under this Lease shall be entitled to use the Premises for
Permitted Non-Office Uses;
(iv) except as provided in sub-parts (v) and (vi) hereof,
no Permitted Non-Office Use shall involve any retail use or the sale of any
products of CNET, Inc.;
(v) Tenant may sublease no more than 2,000 rentable square
feet of the first floor of the Premises to one or two sublessees for the use of
the area
as a juice bar, coffee shop, pastry shop, or the sale of gourmet sandwiches,
so long as Tenant
obtains Landlord's prior written consent to the particular use (in addition to
obtaining
Landlord's consent pursuant to Sections 8.4 and 13.1), which consent shall not
be unreasonably withheld; and
(vi) if CNET, Inc. engages in any activity on the first
floor of the Premises within the definition of Tenant's Retail Use, the total
square footage
which shall be devoted to such use shall not exceed two hundred and fifty (250)
square feet.
7.2. Operation of Tenant's Business.
(a) Limitations on Use of the Premises. Tenant shall not
exceed the floor weight limitations of the Premises as set forth in the Basic
Lease Information without Landlord's prior written consent. Tenant
acknowledges that the limitations stated
in the Basic Lease Information are for the protection of Tenant's employees as
well as the
Premises, and serious harm may occur to Tenant's employees and damage may
occur to the
Premises if Tenant fails to adhere to the limitations in the Basic Lease
Information.
(b) Capacity of Building Systems. Tenant acknowledges
that the heating, air conditioning and ventilating ("HVAC") system of the
Premises is designed to operate efficiently assuming an electrical load less
than 3.5 ▇▇▇▇▇ per square foot of rentable area of the Premises and that,
subject to the foregoing limitation, the Premises has a total connected
electric power capability (at the main transformer serving the Premises) of 10
▇▇▇▇▇ per rentable square foot. Tenant shall not connect or use any
electrical equipment that exceeds the capacity of the HVAC system of the
Premises without first providing Landlord with plans and specifications
(either under Article 8 hereof or pursuant to Exhibit C in connection with
the construction of the Tenant Improvements) evidencing, to the reasonable
satisfaction of Landlord, the installation and operation of supplemental HVAC
facilities that will provide cooling to efficiently operate any equipment
with an aggregate electrical load in excess of the design capacity of the
existing HVAC system in the Premises. In no event shall Tenant connect or use
any equipment in the Premises that shall exceed the total electrical load
capacity of the Premises.
(c) No Unlawful or Injurious Use of the Premises. Tenant
shall not use nor permit the Premises to be used in any manner which may
result in waste or the creation of a nuisance. Tenant shall not use or
permit the use of the Premises for any purpose or in any manner which may
constitute a violation of the laws, ordinances, regulations or requirements
of any governmental entity having authority over the Premises or any recorded
covenants, conditions, or restrictions.
(d) Effect of Tenant's Use of the Premises on Landlord's
Insurance. Tenant shall not use or permit the Premises to be used in any
manner which will increase the existing rate of insurance upon the Premises
or cause the cancellation of any insurance policy covering the Premises or
any part thereof. Tenant shall not sell, or permit to be kept, used or sold,
in or about the Premises, any article which shall now or hereafter be
prohibited by Landlord's fire insurance policy. Tenant shall comply with any
and all rules, orders, regulations, or requirements of the Pacific Fire
Rating Bureau or any other organization performing a similar function of
which it has prior written notice. If Tenant breaches any of the provisions
of this subsection and fails to cure such breach within fifteen (15) days
after written notice thereof and, as a consequence, there is an increase in
Landlord's fire insurance premiums, Tenant shall pay the entire cost of any
additional premiums changed.
7.3. Condition of the Premises.
Tenant hereby acknowledges that ▇▇▇▇▇▇ has had a reasonable
opportunity to inspect the Premises. Except for those improvements to the
Premises which Landlord in this Lease has expressly agreed to make and except
as otherwise provided in Section 7.4, Tenant hereby accepts the Premises "as
is" on the date Tenant takes possession hereunder subject to all laws,
ordinances, and regulations applicable to the Premises and their use and any
restrictions of record. Tenant acknowledges that, except as otherwise
provided in Section 7.4, Tenant shall be solely responsible for its
investigation into the condition of the Premises and whether or not the
Premises is in compliance with any applicable building codes and shall not be
entitled to rely upon the representations, if any, of any person concerning
the condition of the Premises or its compliance with codes. Tenant shall
promptly comply with all laws, ordinances, and regulations applicable to the
Premises or their use during the Term of this Lease or any extensions
thereof. However, Tenant shall not be responsible for any capital or
structural improvements to the Premises required by any governmental entity,
except as provided in Section 8.7 hereof.
7.4. ▇▇▇▇▇▇▇▇'s Obligation upon Delivery of the Premises.
(a) Compliance with Building Codes and the Structural
System of the Premises. Landlord hereby warrants to Tenant (i) that the
Premises existing as of the Commencement Date shall be in compliance with all
applicable building codes applicable to the Premises in its "as-is" condition
as of the Commencement Date and (ii) that the structural elements of the
Premises (including the roof, the roof membrane and other structural
elements) existing as of the Commencement Date shall be in good condition and
repair and in compliance with all applicable building regulations, laws,
statutes, ordinances, codes, and covenants and restrictions of record
applicable to the Premises in its "as-is" condition as of the Commencement
Date. If Tenant does not give Landlord written notice of non-compliance with
this warranty within the earlier of (1) ten (10) business days after the
discovery of the breach of this warranty or (2) one-hundred eighty (180) days
after the Rent Commencement Date, this warranty shall expire and thereafter
shall be of no further force or effect.
(b) Building Systems. Landlord warrants that as of the
Commencement Date the electrical, plumbing, lighting and mechanical systems of
the Premises in their "as-is" condition as of the Commencement Date shall be
in working order. If Tenant does not give Landlord written notice of
non-compliance with this warranty within five (5) days after the Commencement
Date, this warranty shall expire and thereafter shall be of no further force
or effect.
(c) Tenant's Remedies. If the Premises do not comply with
any of the warranties set forth in this Section 7.4 as of the Commencement
Date, Landlord, after receipt of written notice from Tenant setting forth
with specificity the nature and extent of such non-compliance and after
confirming the accuracy of Tenant's notice, shall promptly rectify the same
at Landlord's sole cost and expense (which shall not be charged to Tenant).
Such repair and correction shall be Tenant's sole and exclusive remedy against
Landlord for breach of these warranties. Notwithstanding the foregoing,
Landlord shall not be required to remedy any portion of the Premises that
does not comply with the above-stated warranty to the extent that Tenant
intends to alter or remove that portion of the Premises during the
construction of its Tenant Improvements pursuant to Exhibit C.
ARTICLE 8 - MAINTENANCE, REPAIRS, AND ALTERATIONS
8.1. Tenant's Obligations for Repairs and Maintenance.
(a) Repairs and Maintenance. At all times during its
occupancy of the Premises, Tenant shall repair and maintain in good condition,
at its sole cost and expense, Tenant's Property, any portion of the Premises
which have been damaged as a consequence of any act or omission of Tenant or
any employee or independent contractor of Tenant, and all telecommunications
equipment installed in the Premises by or for the benefit of Tenant. All
repairs to the Premises made by Tenant shall be at least equal in quality,
value, and utility to the improvements to the Premises before repairs were
required.
(b) Return of the Premises. Upon the expiration or
earlier termination of this Lease, Tenant shall return the Premises to
Landlord clean and otherwise in the same condition as existed on the Rent
Commencement Date, except for (i) normal wear and tear, (ii) the Tenant
Improvements (other than Tenant's cabling system) constructed in accordance
with Exhibit C hereto, and (iii) Alterations which Landlord does not require
Tenant to remove pursuant to Section 8.4(c) [which Tenant shall not be
required to remove]. Any damage to the Premises, including any structural
damage, resulting from ▇▇▇▇▇▇'s use or from the removal of Tenant's Property
shall be repaired by Tenant.
(c) Roof/Exterior/Structural System of the Premises.
Notwithstanding any other provision of this Lease, in the event that Tenant
shall construct a deck on the roof of the Premises, install any equipment on
the roof of the Premises, install any Exterior Tenant Signage (as that term
shall be defined hereafter) on any portion of the Premises, or modify any of
the structural members of the Premises in any manner, Tenant shall thereafter
be solely responsible for the maintenance and repair of the roof and
structural system of the Premises to the extent the roof or structural system
was directly or indirectly affected by such additions or modifications.
8.2. Landlord's Obligations for Repairs and Maintenance.
(a) Repairs and Maintenance. Except for Tenant's
obligations for repair and maintenance set forth in Section 8.1, Landlord
shall repair and maintain in good condition the Premises including the
foundation, roof and exterior walls and all mechanical, electrical, and
plumbing systems (but not the telecommunications systems). However, unless
Landlord has itself determined that repairs are required, ▇▇▇▇▇▇▇▇'s
obligation to make repairs shall not arise until receipt of written notice
from Tenant describing the repairs that are required. After receipt of this
notice, Landlord shall have a reasonable period of time to commence and
complete such repairs as are required.
(b) Waiver. Tenant hereby waives all rights to make
repairs at the expense of Landlord or in lieu of such repairs to vacate the
Premises as provided by California Civil Code Sections 1941 and 1942 or any
other law or ordinance now or hereafter in effect.
8.3. ▇▇▇▇▇▇▇▇'s Right to Make Repairs on Behalf of Tenant. If
▇▇▇▇▇▇ refuses or neglects to make repairs to the Premises which ▇▇▇▇▇▇ is
required to make, in a manner reasonably satisfactory to Landlord, Landlord
shall have the right upon giving Tenant ten (10) days prior written notice
to enter the Premises and make the repairs which were ▇▇▇▇▇▇'s
responsibility hereunder. In such event, within ten (10) days after
receiving an invoice therefor, Tenant shall pay all costs and expenses
incurred by Landlord with interest thereon.
8.4. Alterations and Additions. Except as provided in subsection (d)
hereof, Tenant shall not make any additions, alterations, repairs, or
improvements to the Premises, including the addition of a deck to the roof
of the Premises (collectively "Alterations"), without the prior written
consent of Landlord, which shall not be unreasonably withheld.
(Notwithstanding anything in the foregoing to the contrary, the Tenant
Improvements constructed by Tenant in accordance with Exhibit C shall not be
deemed Alterations for purposes of this Section 8.4; provided, however, the
terms of Section 8.4(e) shall apply to any such improvements constructed by
Tenant whether or not the same are installed as part of the Tenant
Improvements.) Regardless of subsection (d) hereof, all Alterations shall
be subject to the following terms and conditions:
(a) Documentation of Alterations to be Performed. Except
in case of an
emergency requiring immediate repairs, ▇▇▇▇▇▇ shall deliver to Landlord
the documents
described in Section 8.5(a) at least thirty (30) days before the date
when ▇▇▇▇▇▇ commences work
on Alterations of the Premises.
(b) Requirement of Payment and Performance Bonds.
Landlord may
require, at Landlord's sole option, that Tenant obtain payment and
performance bonds, naming
Landlord as obligee, in an amount equal to the total estimated cost of
the Alterations if (i) Tenant
is then in default under this Lease, (ii) Tenant has failed to make any
Rent payment when due
more than twice during the preceding twelve (12) months, or (iii)
Government Requirements (as
hereinafter defined) impose an obligation to make alterations,
improvements, or repairs to the
Premises, as a result of the Alterations proposed by Tenant in an amount
in excess of One
Hundred Thousand Dollars ($100,000.00).
(c) Title to and Removal of Alterations. All Alterations
shall become the
property of Landlord upon installation and, unless Landlord otherwise
directs, shall be
surrendered with the Premises when Tenant vacates the Premises. Upon
the expiration or earlier
termination of this Lease, Landlord shall have the right to require
Tenant, at Tenant's cost, to
remove any Alterations (i) which Tenant installed without Landlord's
consent either in breach of
this Lease or pursuant to subsection (d) hereof, (ii) which were made in
accordance with
subsection (e) hereof, or (iii) which Landlord informed Tenant should be
removed when
Landlord granted its consent to the Alterations. Notwithstanding the
foregoing, Tenant shall
have no obligation to remove any structural Alterations required to be
installed or constructed by
Tenant pursuant to Section 8.7. If Tenant is required to remove
Alterations, Tenant shall restore
the Premises to its condition on the Commencement Date of this Lease,
except as modified by
Alterations which Landlord has approved and not informed Tenant should
be removed at the
expiration of the Lease.
(d) Alterations which Do Not Require Landlord's Consent.
Tenant shall
have the right to perform Alterations to the Premises without Landlord's
consent so long as (i)
the aggregate cost of the Alterations in any twelve (12) month period is
less than Fifty Thousand
Dollars ($50,000.00) and (ii) the Alterations are non-structural, are
not made to the roof or the
exterior of the Premises, and do not affect any of the Utilities serving
the Premises.
(e) Telecommunications Equipment. At any time during the
term of the
Lease, Tenant shall have the right to place upon the roof of the
Premises one or more so-called
"satellite dishes" or other similar device (or to replace any such
existing device), such as antenna,
for the purpose of receiving and sending radio, television, computer,
telephone, or other
communication signals. Any such installation shall be in accordance
with all applicable
provisions of Sections 8.4 and 8.5 of the Lease. Tenant shall be
responsible for any damage to
the Premises, including but not limited to repairs to the roof of the
Premises, caused by the
installation, removal, operation, or maintenance of any such device.
Tenant shall be solely
responsible for obtaining any government approvals which may be required
in connection with
the installation of any equipment or structures on the roof. Landlord,
by virtue of this subsection
(e), shall not be deemed to have represented to Tenant that any
governmental authorities will
approve the installation of any equipment or the erection of any
structure on the roof of the
Premises.
8.5. Tenant's Construction and Repair Work.
(a) Information to be Provided to Landlord. Tenant shall
provide Landlord
with the following: (i) a written description of the work to be
performed and reasonably detailed
plans and specifications for the proposed Alterations, which are
reasonably satisfactory to
Landlord, prepared at Tenant's sole expense by a licensed architect,
(ii) the name and address of
the contractor who will be performing the Alterations to the Premises,
and (iii) a written
statement jointly signed by an architect, licensed to practice in the
State of California, and by
Tenant which describes the Alterations, if any, that Government
Requirements will require be
performed as a result of ▇▇▇▇▇▇'s proposed Alterations.
(b) Prosecution of the Work. Tenant shall perform all
Alterations in the
Premises with contractors who are duly licensed in the State of
California and who are approved
in advance by Landlord. Tenant shall cause its contractors to perform
their work in a good and
workmanlike manner and shall further cause them to diligently prosecute
all work to completion.
(c) Contractor's Insurance. Before performing any
construction or repair
work in the Premises, Tenant shall obtain an insurance certificate and a
policy endorsement,
naming Landlord and its agents, employees, and any ground lessors and
mortgagees whose
names shall have been furnished to Tenant as additional insureds, from
the general contractor or,
if there is no general contractor, from each specialty contractor whom
it employs to perform such
work. Each insurance certificate and policy endorsement shall (i) list
all of the named insureds
under the policy, (ii) be issued by an insurer admitted to transact
insurance in the State of
California with a financial rating of at least an A:VII as rated in the
most recent edition of Best's
Insurance Reports, (iii) provide at a minimum that the contractor has in
full force and effect a
Commercial General Liability policy in amounts not less than
$2,000,000.00 per occurrence for
personal injury, bodily injury and property damage with coverage for
premises and operations
liability, contractual liability, completed operations coverage,
products liability, and broad form
property damage liability, (iv) contain an endorsement requiring at
least thirty (30) days written
notice from the insurance company to all of the named additional
insureds before any
cancellation or material change in coverage, scope, or amount of the
insurance policy, and (v)
either contain an endorsement (1) which states that no additional
insured will be excluded from
coverage in the event that the additional insured is alleged or found to
be negligent in connection
with any claim made under the policy or otherwise or (2) in the form of
ISO Form # CG 20 10 10
93 (or any amendments to this form which are substantially similar and
do not result in a
reduction of coverage for the additional insureds). If Tenant causes
any work to be performed in
the Premises without first obtaining such an insurance certificate and
policy endorsement, Tenant
shall indemnify, defend, protect, and hold harmless Landlord from and
against any loss, cost,
claim, or damage for which Landlord would have been covered by such
insurance policy.
(d) Work Shall Conform to Applicable Laws and Regulations.
Any
construction or repair work performed by Tenant shall be in accordance
with all applicable
government laws, ordinances, codes, and regulations, including but not
limited to all applicable
building codes, the Americans with Disabilities Act, and Title 24 of the
California Code of
Regulations. If any governmental agency or body requires work to be
performed to the Premises
as a result of work performed by Tenant or of Tenant's use of the
Premises, Tenant shall be solely
responsible for performing such work. Tenant shall also be solely
responsible for obtaining all
required government permits for any work performed by ▇▇▇▇▇▇.
(e) Tenant's Responsibility for Costs. Tenant shall pay
all costs and
expenses associated with any Alterations, including any out-of-pocket
costs and expenses
reasonably incurred by Landlord in reviewing the proposed Alterations or
inspecting or testing
the work performed in the Premises.
8.6. Liens.
(a) Notice to Landlord. At least ten (10) days before the
commencement of
any work for which a claim of lien may be recorded, Tenant shall give
Landlord written notice of
its intention to commence work to enable Landlord to post notices of
non-responsibility or any
other notices which Landlord deems necessary for the proper protection
of ▇▇▇▇▇▇▇▇'s interest in
the Premises. Landlord shall have the right to enter the Premises and
post such notices at any
reasonable time.
(b) Removal of Liens. Tenant shall keep the Premises free
from any liens
arising out of any work performed by ▇▇▇▇▇▇. If, within thirty (30)
days after the recordation of a
mechanic's lien, ▇▇▇▇▇▇ fails to obtain a release of the lien or fails
to post a mechanic's lien
release bond in the required amount, Landlord shall have the right, but
not the obligation, to
cause same to be released by any means including the payment of the
claim giving rise to the
lien. Tenant shall pay to Landlord all costs and expenses incurred by
Landlord (including
attorney's fees) in releasing the lien within ten (10) days after
▇▇▇▇▇▇▇▇'s demand therefor.
8.7. Tenant's Obligation for Compliance with Government
Requirements.
(a) Tenant's Obligation. Except for the obligations of
Landlord, as provided
in Sections 7.4 and 8.8 and Landlord's obligations under Exhibit C,
Tenant, at Tenant's sole cost
and expense, shall comply with all Government Requirements (as hereafter
defined). It is the
intent of the parties that the foregoing covenant shall impose upon
Tenant, and shall relieve
Landlord from, the obligation to make all Alterations to the Premises
compelled by Government
Requirements that are (i) non-structural in nature, whether or not of a
substantial and/or
permanent nature, (ii) structural or non-structural Alterations as a
consequence of Tenant's use of
the Premises described in Section 8.1(c), and (iii) structural or non-
structural Alterations which
are required as a result of (1) Tenant's particular use of the Premises
(for other than general
office use), including but not limited to all Permitted Non-Office Uses,
(2) any Alterations to the
Premises made by Tenant, or (3) Tenant's breach of any provision of this
Lease. The phrase
"non-structural" when used in Article 8 shall mean all such work within
the four walls of the
Premises, to the doors, door frames, and entrances to the Premises, that
do not require
replacement, alteration or improvement to any of the structural elements
of the Premises
(including the roof or roof membrane). It is further the intent of the
parties that the allocation of
responsibility for compliance with Government Requirements as set forth
in this Article 8 shall
be binding upon the parties regardless of whether or not this Lease be
deemed to be a "net" lease.
(b) Definition of Government Requirements. The term
"Government
Requirements" as used in this Lease shall mean all laws, orders, codes,
regulations, and
requirements of federal, state, county and municipal authorities which
are now or at any time
hereafter may be in effect relating to the condition, use, or occupancy
of the Premises (whether or
not any condition or occupancy is related to Tenant's particular use of
the Premises), including
but not limited to all applicable building codes, the Americans with
Disabilities Act, and Title 24
of the California Code of Regulations (collectively "Government
Requirements"). By way of
example and not limitation, these improvements, alterations, and repairs
shall include those
imposed by handicapped accessibility, fire, and life-safety
requirements.
8.8 Landlord's Obligation for Compliance with Government
Requirements.
(a) Landlord's Obligation. Except as provided to the contrary in
Sections
8.1(c) and 8.7 of this Lease, Landlord, at Landlord's sole cost and
expense, shall be solely
responsible for complying with any Government Requirements relating to
the structural portions
of the Premises (including the floor slab and the structural columns),
the roof, the exterior walls,
and the foundation. ▇▇▇▇▇▇▇▇'s obligation hereunder shall include
compliance with Government
Requirements as a result of a condition existing in the Premises as of
the Commencement Date
which is not in compliance with Government Requirements as of that date.
(b) Landlord's Obligations for Newly Enacted Government Requirements.
If newly enacted Government Requirements which were not applicable to
the Premises as of the
date of this Lease require capital improvements which are not the
obligation of Tenant under
Section 8.7, Landlord shall make such Alterations to the Premises and
the cost thereof following
completion of the work (other than any cost required to correct defects
in construction or
conditions not in conformance with code requirements existing as of the
date of this Lease) shall
be included in Operating Expenses as set forth in subsection (c) hereof.
(c) Cost Allocation. Landlord shall amortize the cost of the capital
improvements made pursuant to subsection (b) hereof on a straight line
basis over the useful life
(as reasonably determined by Landlord) of such capital improvements.
The term "useful life"
shall mean (i) except as provided in sub-part (ii) hereof, the period of
time defined in accordance
with generally accepted accounting principles or (ii) in the case of
capital improvements which
would otherwise have a useful life beyond the remaining term of this
Lease but which Landlord
reasonably anticipates would not be utilized by another tenant after the
expiration of the term of
this Lease, the remaining term of the Lease after the construction of
the capital improvements.
Tenant's obligation to pay its share of such capital improvements shall
be limited to the portion
of the cost thereof that is to be amortized as hereinabove provided
during the period of the
remainder of the Term of this Lease.
ARTICLE 9 - LANDLORD'S RIGHT OF ENTRY tc "ARTICLE 9 - LANDLORD'S
RIGHT OF ENTRY"
9.1. Right of Entry.
Landlord (and any
designated agent, representative, employee, or contractor) shall have
the right to enter the
Premises at all reasonable times (which, as a general matter, shall mean
normal business hours)
and, except in cases of emergency, after giving Tenant not less than
twenty-four (24) hours'
verbal notice, to make repairs required of Landlord hereunder, to
inspect the Premises, to supply
any service to be provided by Landlord hereunder, to show the Premises
to prospective
purchasers, mortgagees or, during the last year of the Term of this
Lease, tenants, and to post
notices of non-responsibility. Except in the case of an emergency,
Landlord employees
(including, without limitation, Landlord's agents and contractors) who
enter the Premises shall
be prepared to provide proper identification and shall enter only in the
presence of and
accompanied by a representative of Tenant; and any entry shall be
limited to work areas in which
non-sensitive and non-proprietary work is on-going. Landlord may for
that purpose erect and use
structures in and through the Premises where reasonably required by the
character of the work to
be performed, provided that when work is performed during Business
Hours, the work shall be
performed in a manner that minimizes interference with ▇▇▇▇▇▇'s
business. Landlord may also
place "For Lease" signs on the outside of the Premises during the last
three (3) months of this
Lease.
9.2. Emergency Entrance into the Premises.
Landlord shall have the right to use any and
all means that Landlord
may deem necessary or proper to open the doors of the Premise or
otherwise obtain entry to any
portion of the Premises during an emergency, Landlord shall give Tenant
immediate verbal
notice of any such entry and the need therefor. Any emergency entry to
the Premises shall not
under any circumstances be deemed to be a forcible or unlawful entry
into, or a detainer of, the
Premises or an eviction, actual or constructive, of Tenant from the
Premises.
9.3. Damages Suffered by ▇▇▇▇▇▇ and Abatement of Rent as a
Consequence of
Landlord's Work.
(a) Landlord's Responsibility for Damages. Except as
otherwise provided
in Section 10.3, Landlord shall be liable to Tenant for any personal
injury or damage to ▇▇▇▇▇▇'s
Property caused by ▇▇▇▇▇▇▇▇'s negligence or willful misconduct when
making repairs or
performing maintenance.
(b) Abatement of Minimum Rent. During the period when
▇▇▇▇▇▇▇▇ is
performing work in the Premises, Tenant shall be entitled to an
abatement of Minimum Rent if
Landlord's work substantially interferes with ▇▇▇▇▇▇'s business in the
Premises. ▇▇▇▇▇▇'s
Minimum Rent shall be abated for the period and in proportion to
▇▇▇▇▇▇▇▇'s interference with
▇▇▇▇▇▇'s business.
(c) Waiver. Landlord shall not be liable, and Tenant
hereby waives any
claim against Landlord, for lost profits, for loss of occupancy or quiet
enjoyment of the Premises,
for constructive eviction, and for any other loss occasioned by Landlord
in connection with its
work in the Premises.
ARTICLE 10 - INSURANCE AND INDEMNIFICATION tc "ARTICLE 10 -
INSURANCE AND INDEMNIFICATION"
10.1. Tenant's Insurance.
Tenant shall
carry and keep in force during the Term and any extension thereof and at
all times while in
occupancy of the Premises the following types of insurance:
(a) General Liability. Commercial General Liability
Insurance policy
(including Personal Injury Liability and Medical Payments coverage),
which shall include broad
form contractual liability, with a total limit which is not less than
the amount per occurrence
specified in the Basic Lease Information [except as same may be adjusted
in accordance with
Section 10.3(c)], bodily injury and property damage combined, insuring
against any and all
liability for libel, slander, false arrest, wrongful eviction, personal
injury, property damage and
for injuries to or death of persons occurring in, on, or about the
Premises or arising out of the
maintenance, use, or occupancy of the Premises and all areas adjacent
thereto. All liability
insurance shall specifically insure the performance by Tenant of its
indemnity obligations under
Section 10.6. The policy shall contain a severability of interest
clause. Such insurance shall
name Landlord, its agents, employees, and any ground lessors and
mortgagees whose names shall
have been furnished to Tenant as additional insureds. Unless Landlord
shall have given its prior
written consent, the foregoing liability and property damage policy
shall cover all insured claims
which arose during the term of the policy, regardless of when Landlord
or Tenant is first notified
of that claim.
(b) Worker's Compensation and Employers' Liability.
Worker's
Compensation and Employers' Liability insurance covering Tenant's
employees for California
Worker's Compensation benefits, including employers' liability with
limits for each accident as
required by law.
(c) Tenant's Property. Fire and perils covered under a
Standard Special
Causes of Loss Coverage Form (with no exclusions pertaining to sewer or
drain back-ups,
continuous seepage, or any limitation of loss caused by water without
prior wind damage to the
Premises), sprinkler leakage and plate glass damage covering, in a form
reasonably satisfactory
to Landlord, Tenant's Property, and all furniture, fittings,
installations, partitions and trade
fixtures for one hundred percent (100%) of the full replacement cost
thereof (regardless of
Tenant's use value in such property) as shall from time to time be
determined by the Tenant.
Provided this Lease is not terminated as of a result of the casualty
triggering the loss, the
proceeds from such insurance shall be used exclusively to replace
Tenant's Property in the
Premises.
(d) Business Interruption. Business interruption and
extra expense
insurance in such amounts as will reimburse Tenant for direct or
indirect loss of earnings and
costs incurred attributable to the perils commonly covered by the
Standard Special Causes of
Loss Coverage Form described above. Business interruption insurance
shall be issued by the
same insurer which issues, and shall include the same grounds for
coverage as, the Standard
Special Causes of Loss Form described herein.
10.2. Landlord's Insurance.
(a) Landlord's Insurance Policies. Landlord shall obtain
(i) replacement
coverage property insurance for the Premises, leasehold improvements and
betterments to the
Premises, and Alterations for one hundred percent of the full
replacement cost thereof, with an
agreed value endorsement at a value reasonably acceptable to Tenant, and
(ii) liability insurance
insuring Landlord, its agents, contractors and employees in connection
with the Premises with a
total limit which is not less than the amount per occurrence specified
in the Basic Lease
Information (except as same may be adjusted in accordance with Section
10.3(c)). All liability
insurance shall specifically insure the performance by Landlord of its
obligations under this
Lease as a covered contract. Landlord's insurance may include, but not
limited to insurance and
endorsements covering any and all casualty risks, earthquake, flood,
malicious mischief, Rent
loss, vandalism, sprinkler damage, public liability, civil disorder,
hazardous materials, plate
glass, sign, worker's compensation, and such other forms of insurance
and endorsements thereon
as Landlord may, from time to time, require in connection with the
Premises. Tenant shall be
named as an additional loss payee on Landlord's replacement coverage
insurance policy.
(b) Blanket Insurance Policy. Landlord may carry any
insurance described
in this Section 10.2 as part of a blanket policy. In such case, a
proportionate share of the cost of
such insurance, reflecting exposure to loss, shall be allocated to the
Premises and shall be
included in Operating Expenses.
10.3. Insurance Requirements.
(a) Requirements of all Insurance. All insurance which
Landlord or Tenant
are required to maintain under the terms of this Lease shall:
(i) be issued by insurance companies
approved to transact insurance business in the State of California with a
financial rating of at least an A:VI as rated in the most recent edition of
Best's Insurance Reports; and
(ii) contain an endorsement requiring at
least thirty (30) days written notice from the insurance company to
Landlord, Tenant, and any ground lessors and mortgagees
whose names shall have been furnished to Tenant before any cancellation
or material change in
coverage, scope, or amount of the insurance policy.
(b) Requirements of Tenant's Liability Insurance. All
liability insurance
which Tenant is required to maintain under the terms of this Lease
shall:
(i) be written as primary policies, not
contributing with and not in
excess of coverage which Landlord or any Indemnitee may carry;
(ii) contain an endorsement listing the
names of all Indemnitees as additional insureds;
(iii) contain an endorsement which states
that no Indemnitee will be excluded from coverage in the event that the
Indemnitee is alleged or found to be negligent in connection with any claim
made under the policy or otherwise; and
(iv) not include a cross liability
exclusion.
(c) Adjustments to Tenant's Liability Insurance Coverage.
At the
commencement of the Option Period (if Tenant exercises its option
pursuant to Section 2.5) the
amount of liability insurance carried by Landlord and Tenant, as set
forth in the Basic Lease
Information, may be reviewed by ▇▇▇▇▇▇▇▇'s insurance advisor; and if in
his judgment, the
amount of such insurance should be increased, Landlord or Tenant, as the
case may be, shall
immediately increase the amount of its liability insurance in accordance
with the determination
of Landlord's insurance advisor and shall thereafter maintain such
coverage.
10.4. Waiver of Claims and Waiver of Subrogation.
(a) Waiver of Claims. To the extent that each party has
a right to receive or
has received insurance proceeds therefor, Landlord and Tenant each
hereby waive any claim or
right of recovery against the other party for any loss or damage to
their respective property or any
loss to their respective businesses or incomes, any loss or damage to
the contents of the Premises,
or any operation in the Premises, or the restoration of the Premises,
whether or not such loss or
damage is caused by the fault or negligence of the other party.
(b) Waiver of Subrogation. Landlord and Tenant shall use
their best efforts,
respectively, to cause each insurance policy obtained by either of them
to provide that the
insurance company waives all right of recovery by way of subrogation
against Landlord and
Tenant in connection with any damage or loss covered by such policy;
provided, however, that
the waiver of subrogation in Landlord's liability insurance policy shall
be dependent upon
Tenant's liability insurer providing the insurance coverage to the
Indemnitees required by this
Lease. If an insurance policy cannot be obtained with a waiver of
subrogation or is obtainable
only by the payment of an additional premium, the party attempting to
obtain the insurance shall
notify the other party of this fact in writing within ten (10) days
after being so notified by the
insurance company. Thereafter, the other party shall have a period of
fifteen (15) days after
receipt of this notice (i) to find an insurance company which is
admitted to transact insurance
business in the State of California and is willing to issue an insurance
policy with a waiver of
subrogation at no additional cost or (ii) to pay the additional premium
demanded by the insurance
company for the waiver of subrogation. If an insurance policy cannot be
obtained with a waiver
of subrogation or if the party for whose benefit a waiver of subrogation
was to be obtained fails
to pay the additional premium charged for the waiver of subrogation
within the aforesaid ten (10)
day period, the other party shall be relieved from its obligation to
obtain a waiver of subrogation
with respect to that policy of insurance.
10.5. Certificate of Insurance and Policy Endorsements and
▇▇▇▇▇▇'s Failure to Provide Either.
Tenant shall provide Landlord with Policy
Endorsements and Certificate(s) of Insurance evidencing that each of the
policies and the
specified provisions required by Sections 10.1, 10.3, and 10.4(b) are in
full force and effect. If
Tenant intends to fulfill its obligation to obtain insurance in
accordance with the foregoing
sections through a blanket policy which covers Tenant in the Premises as
well as in other
business locations, Tenant shall fulfill its obligation hereunder by
providing Landlord with a
copy of the endorsement to the blanket policy. If Tenant fails to
provide the aforesaid Policy
Endorsements and Certificate(s) of Insurance prior to the date when
▇▇▇▇▇▇ takes possession of
the Premises and thereafter before the expiration or cancellation of
these insurance policies,
Landlord shall have the right, but not the obligation, to procure such
insurance in the amounts
and according to the terms stated in Sections 10.1, 10.3 and 10.4(b).
All costs and expenses
incurred by Landlord in obtaining such insurance shall be paid by Tenant
within three (3) days
after receiving a bill therefor from Landlord.
10.6. Indemnification.
(a) Tenant's Indemnity Obligation. Tenant shall
indemnify, protect, defend,
and hold harmless Landlord (and its partners, agents, and employees) and
any ground lessors
and/or mortgagees whose names shall have been furnished to Tenant
("Indemnitees") against and
from any and all claims, losses, costs, damage, injury, death, and
expenses including, without
limitation, penalties, fines and reasonable attorneys' fees (including
the fees of independent
counsel) ("Indemnified Claims") arising from (i) any failure by Tenant
to observe or perform any
of the provisions of this Lease, (ii) the use or occupancy of the
Premises by Tenant or any person
claiming through or under Tenant, (iii) the condition of the Premises so
long as same is within
Tenant's supervision and control, or (iv) any acts, omissions or
negligence of Tenant or any
person claiming through or under Tenant or of the contractors, agents,
servants, employees or
licensees of Tenant in, on, or about the Premises. However, ▇▇▇▇▇▇'s
indemnity obligation shall
not include Indemnified Claims arising from the gross negligence or
willful misconduct of
Landlord, its agents, contractors or employees. If any action or
proceeding is brought against
Landlord by reason of any of the foregoing matters, Tenant shall upon
notice defend the same at
Tenant's expense by counsel reasonably satisfactory to Landlord, and
Landlord shall cooperate
with Tenant in such defense. Landlord shall not be required to have
first paid any claim in order
to be defended or indemnified. Tenant shall not be required to
indemnify Landlord for losses to
the extent, if any, that Landlord has received insurance proceeds
therefor or Landlord's insurer
has made payments on behalf of Landlord.
(b) Survival of Obligation. Landlord and ▇▇▇▇▇▇'s
obligations under this
Section 10.6 shall survive termination of the Lease.
ARTICLE 11 - DAMAGE OR DESTRUCTION tc "ARTICLE 11 - DAMAGE OR
DESTRUCTION"
11.1. ▇▇▇▇▇▇▇▇'s Notice to Tenant.
If the Premises are damaged by fire, earthquake, act of
God, the elements, or other
casualty ("Casualty Loss") and as a consequence thereof Tenant vacates
at least 1/3 of the
Premises within thirty (30) days after the Casualty Loss, Landlord shall
send a written notice to
Tenant stating whether it is reasonable to anticipate that the Casualty
Loss can be repaired within
two hundred and seventy (270) days after the Casualty Loss. If the
Premises are damaged by a
Casualty Loss and Tenant does not vacate at least 1/3 of the Premises
within thirty (30) days after
the Casualty Loss, Landlord shall send a written notice to Tenant
stating whether it is reasonable
to anticipate that the Casualty Loss can be repaired within two hundred
and seventy (270) days
after repairs are commenced. Both of these notices shall be referred to
herein as "Landlord's
Casualty Notice." In addition, within ten (10) days after receipt by
Landlord of written notice
from ▇▇▇▇▇▇▇▇'s insurer stating whether the Casualty Loss is a covered
loss under the policy and
of a written estimate from a licensed architect, engineer, or contractor
estimating the cost of
repairs for the Casualty Loss, Landlord shall provide a written notice
to Tenant ("Insured/Self-
Insured Notice"), stating (i) whether the Casualty Loss is an Insured
Loss (as hereafter defined)
or (ii) whether the Casualty Loss is a Self-Insured Loss (as hereafter
defined).
11.2. Landlord's Obligation to Repair.
(a) Insured Loss. If the Casualty Loss, not including
Tenant's Property, is
fully covered by Landlord's insurance, without regard to any deductible
under Landlord's
insurance policy, ("Insured Loss") and it is reasonable to anticipate
that the Casualty Loss can be
repaired within the time period stated in Landlord's Casualty Notice,
Landlord shall promptly
repair the Casualty Loss. While the repairs are being made, this Lease
(subject to Section 11.8
hereof) shall remain in full force and effect.
(b) Self-Insured Loss. If the Casualty Loss is not an
Insured Loss, so long as
(i) the cost to repair the damage to the Premises, not including
Tenant's Property, caused by a
Casualty Loss is less than an amount equal to ten percent (10%) of the
lesser of (1) the full
replacement cost of the improvements on the Premises, determined as of
the date of the Casualty
Loss, or (2) the fair market value of the Premises, determined as of the
date of the Casualty Loss,
(ii) it is reasonable to anticipate that the Casualty Loss can be
repaired within the time period
stated in Landlord's Casualty Notice, and (iii) the Casualty Loss was
not caused, directly or
indirectly, by any act or omission of Tenant or any of its employees,
agents, contractors, clients,
or invitees, Landlord shall promptly repair the Casualty Loss ("Self-
Insured Loss"). While the
repairs are being made, this Lease (subject to Section 11.8 hereof)
shall remain in full force and
effect.
11.3. Termination of the Lease after a Casualty Loss.
(a) Mutual Right to Terminate the Lease. If the Casualty
Loss cannot be
repaired within the time period stated in Landlord's Casualty Notice,
Landlord or Tenant,
respectively, shall have the right, within thirty (30) days after
delivery of Landlord's Casualty
Notice, to give notice to the other terminating this Lease as of a date
specified therein, which date
shall not be less than thirty (30) nor more than sixty (60) days after
the date of the notice.
(b) Tenant's Right to Terminate the Lease. If Landlord
does not provide
Tenant with Landlord's Casualty Notice within sixty (60) days after the
date of the Casualty
Loss, Tenant shall thereafter have the right, which may be exercised at
any time before Tenant
receives Landlord's Casualty Notice, to give notice to Landlord
terminating this Lease as of a
date specified therein, which date shall not be less than thirty (30)
nor more than sixty (60) days
after the date of the notice from Tenant.
(c) ▇▇▇▇▇▇▇▇'s Rights if a Casualty Loss Is Not an Insured
Loss. Except as
otherwise provided in subsections (a) and (b) hereof, if the Premises is
damaged by a Casualty
Loss which is not an Insured Loss or a Self-Insured Loss, Landlord shall
have the right (i) to
commence reconstruction of the Premises and prosecute the same
diligently to completion, in
which event this Lease shall continue in full force and effect or (ii)
to terminate this Lease.
Landlord shall notify Tenant of its election in writing within thirty
(30) days after the delivery of
the Insured/Self-Insured Notice. If ▇▇▇▇▇▇▇▇ decides to terminate this
Lease, the termination
shall be effective immediately upon delivery of Landlord's notice to
Tenant of its election.
(d) Tenant's Obligation for Rent. If either party
terminates this Lease
pursuant to Sections 11.3 or 11.6, this Lease and all interest of Tenant
in the Premises shall
terminate on the date specified in the notice of termination. Subject
to Section 11.8 hereof,
Tenant shall pay the Rent and any other amounts due under this Lease
until the later of (i) the
date specified in the notice of termination or (ii) the date when Tenant
vacates the Premises.
Landlord shall refund to Tenant any Rent previously paid for any period
after the date when
Tenant vacates the Premises. If neither Landlord nor Tenant deliver to
the other a notice
terminating this Lease within the time specified in this Section,
Landlord shall repair the
Casualty Loss to the Premises with all reasonable diligence; and subject
to the provisions of
Section 11.8 hereof, this Lease shall remain in full force and effect.
11.4. Tenant's Right to Repair.
Notwithstanding Section 11.3(c), if Landlord elects to terminate this
Lease rather than restore the
Premises, Tenant shall have the right to pay for the restoration of the
Premises at Tenant's sole
expense by (i) serving written notice of this election upon Landlord
within ten (10) days after
receipt of Landlord's Casualty Notice terminating this Lease pursuant to
Section 11.3(c) and (ii)
providing Landlord with proof (which is reasonably satisfactory to
Landlord) of its ability to pay
for the restoration. If Tenant so elects, this Lease shall remain in
full force and effect; and
Landlord at Tenant's expense shall commence reconstruction and repair of
the Premises within
sixty (60) days after the date of Tenant's notice.
11.5. ▇▇▇▇▇▇▇▇'s and ▇▇▇▇▇▇'s Respective Responsibilities for
Repair.
(a) Responsibilities for Repair. If Landlord elects or is
required to repair the
Premises under this Article 11, Landlord shall repair at its cost any
damage to the Premises
except Tenant's Property, and Tenant shall repair and/or replace
Tenant's Property.
(b) Tenant's Right to Obtain Insurance Proceeds. Landlord
shall make
available to Tenant for repairs to Tenant's Property that portion of the
proceeds, if any, of the
insurance carried by Landlord which Landlord's insurance carrier
determines to be attributable to
the Casualty Loss to Tenant's Property (which determination shall be
binding upon Landlord and
Tenant), subject to the following conditions: (i) that Tenant shall not
then be in default under
this Lease, (ii) that Landlord shall first be given satisfactory proof
that such work has been or will
be fully performed by ▇▇▇▇▇▇, and (iii) that in the event Tenant shall
fail to commence the work
to be performed by Tenant and carry it to completion with due diligence,
Landlord shall have the
right, but not the obligation, to perform the work on behalf of Tenant
and any amount expended
by Landlord in doing so shall be repayable by Tenant to Landlord within
ten (10) days after the
receipt by Tenant of a bill setting forth the amount thereof.
11.6. Damage - End of Term.
(a) Mutual Right to Terminate at the End of the Term.
Notwithstanding
anything to the contrary in Section 11.3 hereof, if the Premises are
destroyed or damaged (in an
amount in excess of two (2) months of Minimum Rent) during the last
eighteen (18) months of
the Term (whether or not the Casualty Loss is an Insured Loss or a Self-
Insured Loss), Landlord
or Tenant may elect to terminate this Lease, with no liability to either
party, by serving written
notice of such election to terminate ("Early Termination Notice") on the
other party within thirty
(30) days after the date when the destruction or damage occurred.
(b) Tenant's Exercise of its Option to Extend the Term.
If a Casualty Loss
should occur during the last eighteen (18) months of the initial Term of
the Lease in an amount
which would justify the termination of this Lease pursuant to subsection
(a) hereof and if
Tenant's option to extend the Term pursuant to Section 2.4 has not
expired, Tenant shall have the
right to void Landlord's Early Termination Notice pursuant to subsection
(a) hereof by serving
Landlord, within ten (10) days after ▇▇▇▇▇▇'s receipt of the Early
Termination Notice, with a
written exercise of its option to extend the Term pursuant to Section
2.4.
11.7. Tenant's Waiver of Statutory Rights.
Tenant waives any statutory rights of termination, including but not
limited to those under Sections 1932(2), 1933(4) and 1942 of the
California Civil Code, which may arise by reason of the partial or total
destruction of the Premises.
11.8. Abatement of Rent Due to a Casualty Loss.
In the event of a Casualty Loss,
Tenant shall be entitled to
an abatement of Rent to the extent that the Casualty Loss materially
interferes with ▇▇▇▇▇▇'s
business in the Premises. If Rent is abated, it shall be abated based
in proportion to (i) the
rentable area of the Premises which cannot be occupied by Tenant for the
operation of its
business either because of damage to the Premises caused by the Casualty
Loss or repairs which
are undertaken to repair the damage caused by the Casualty Loss and (ii)
the total rentable area of
the Premises. Except for the abatement of Rent, if any, Tenant shall
have no claim against
Landlord for any damage suffered by reason of any Casualty Loss.
ARTICLE 12 - CONDEMNATION tc "ARTICLE 12 - CONDEMNATION"
12.1. Taking of the Premises.
(a) Tenant's Right to Terminate the Lease. If more than
ten percent (10%)
of the Premises is taken under the power of eminent domain, Tenant shall
have the right to
terminate this Lease as of the date when Tenant is required to vacate
the Premises, by serving
written notice of such election within thirty (30) days after receipt by
Tenant of written notice
from Landlord that the Premises have been so taken. Landlord shall
promptly notify Tenant in
writing of any taking pursuant to an eminent domain action or deed in
lieu thereof. If this Lease
is so terminated, each party shall thereafter be released from any
further liability hereunder after
Tenant vacates the Premises, except for those provisions which this
Lease states are to survive
the termination of this Lease.
(b) Effect if the Lease Is Not Terminated. If Tenant does
not terminates this
Lease within the time specified herein, Tenant shall remain in that
portion of the Premises which
was not taken; and, in that event, Landlord, at its cost and expense,
shall restore the remaining
portion of the Premises as soon as possible and, to the extent
economically reasonable, construct
tenant improvements of like quality and character as those that existed
prior to such taking.
Thereafter, the Rent shall be equitably reduced, taking into account the
relative value of the
portion of the Premises taken as compared to the portion remaining; and
this Lease shall
terminate as to the part taken as of the date when the condemning
authority takes title or
possession, whichever occurs first.
12.2. Compensation.
In the event of any taking (regardless of whether it results in
termination of this Lease), Landlord shall be entitled to the entire award
or compensation in such proceeding; provided, however, Tenant shall have the
right to apply for compensation or damages for Tenant's Property and ▇▇▇▇▇▇'s
trade fixtures affected thereby, moving expenses, and losses sustained by
Tenant arising from its business, but not for any value attributed to the
Premises.
12.3. Voluntary Sale.
For purposes of this Article 12, a voluntary sale or conveyance in
lieu of condemnation, under threat of condemnation, shall be deemed a taking
under the power of eminent domain.
12.4. Waiver.
Tenant hereby waives any statutory
rights of termination which Tenant may have by reason of any partial
taking of the Premises
under the power of eminent domain.
ARTICLE 13 - ASSIGNMENT AND SUBLEASE
13.1. Prohibition Against Assignments or Subleases without
Landlord's Consent.
(a) Landlord's Consent Required. Except as set forth in
subsection (b) hereof,
without Landlord's prior written consent in each instance, Tenant shall
not directly or indirectly,
voluntarily or by operation of law, (i) (1) sell, assign, encumber,
pledge or otherwise transfer or
hypothecate, any of its interest in or rights with respect to the
Premises or Tenant's leasehold
estate hereunder, (2) sell or transfer more than forty percent (40%) of
its outstanding shares if
Tenant is a corporation, (3) add, delete, or transfer more than forty
percent (40%) of its
partnership interests or any general partnership interest if Tenant is a
partnership, or (4) add,
delete, or transfer more than forty percent (40%) of its membership
interests or the interests of
any manager/member if Tenant is a limited liability company
(collectively "Assignment"), or (ii)
permit all or any portion of the Premises to be occupied by anyone other
than Tenant, sublet all
or any portion of the Premises, or transfer a portion of its interest in
or rights with respect to
▇▇▇▇▇▇'s leasehold estate hereunder (collectively "Sublease").
(b) Permitted Transfers. Notwithstanding subsection (a)
hereof, if Tenant is
a corporation whose stock is traded on any commonly recognized national
or regional stock
exchange or if Tenant is a corporation, a limited partnership, or a
limited liability company with a
net worth at the time of Assignment in excess of Ten Million Dollars
($10,000,000.00),
(i) the sale and transfer of the stock or other
ownership interests in
Tenant in transactions effected on a nationally recognized public stock
exchange and (whether or
not a change in control results) the transfer of stock pursuant to
tender offers to shareholders,
whether or not solicited, shall not be deemed an Assignment under
Section 13.1(a);
(ii) Tenant shall have the right, without the prior
consent of
Landlord, to assign this Lease in connection with a merger,
consolidation, or sale of substantially
all of its assets so long as the successor is also a corporation whose
stock is traded on any
commonly recognized national or regional stock exchange ("Qualified
Successor"); and
(iii) Tenant shall have the right, without the prior
consent of
Landlord, to assign this Lease or to Sublease all or any portion of the
Premises to (1) any parent
or subsidiary of Tenant or of such parent or (2) provided Sublease(s) of
space either do not
exceed an aggregate of 15,000 rentable square feet of the Premises or do
not equal or exceed one
full floor in the Premises, any joint venture or alliance partner with,
or consultant to, Tenant
(whether or not affiliated with Tenant) during the course of any
collaboration or contract with
such party (individually and collectively, a "Permitted Transferee").
However, even if ▇▇▇▇▇▇▇▇'s consent is not required hereunder, ▇▇▇▇▇▇
and any assignee or
sublessee of Tenant, as applicable, must still comply with Sections
13.2, 13.5, and 13.7.
(c) An Assignment or Sublease without Landlord's Consent.
Any
Assignment or Sublease that fails to comply with Section 13.1(a) or (b)
shall be void and, at the
option of Landlord, shall constitute a non-curable default by Tenant
under this Lease. The
acceptance of Rent or any other amounts by Landlord from a proposed
assignee or subtenant
when ▇▇▇▇▇▇ has breached this Section 13.1 shall not be deemed to be a
waiver of Landlord's
right to declare Tenant in default and shall not constitute a consent to
an Assignment or Sublease
by Landlord.
(d) Liens on Tenant's Property. Tenant shall have the
right to hypothecate
Tenant's Property without ▇▇▇▇▇▇▇▇'s prior written consent. Landlord
shall execute and deliver
customary lien waivers in a form reasonably acceptable to Tenant's
equipment lender.
(e) Limitation on Use in the Event of an
Assignment/Sublease. If there is an
Assignment of this Lease or if there is a Sublease of any portion of the
first floor of the Premises,
the assignee or sublessee shall not have the right to use the Premises
for any Permitted Non-
Office use, with the sole exception of the use described in Section
7.1(v).
13.2. Notice of the Proposed Assignment or Sublease.
If Tenant desires at any time to enter into an
Assignment of this Lease or a Sublease of all or any portion of the
Premises, Tenant shall first give notice to Landlord of its desire to do so,
which notice ("Tenant's Notice") shall contain (i) the name and address of
the proposed assignee or sublessee and whether the proposed assignee or
sublessee is a Qualified Successor or a Permitted Transferee, (ii) the nature
of the proposed assignee's or sublessee's business to be carried on in the
Premises, (iii) the general terms and provisions of the proposed Assignment
or Sublease, (iv) a current financial statement of the proposed assignee or
sublessee, (v) when ▇▇▇▇▇▇▇▇'s consent is required for an Assignment or
Sublease, such other financial and business information as Landlord may
reasonably request concerning the proposed assignee or sublessee, and (vi)
when the Assignment or Sublease is to a Qualified Successor or to a
Permitted Transferee, such other information as Landlord may reasonably
request to confirm that the entity in question is a Qualified Successor or a
Permitted Transferee. If Landlord requests further information pursuant to
sub- parts (v) or (vi) hereof, Landlord shall make its request upon Tenant
within five (5) business days after receipt of Tenant's Notice. Tenant
shall deliver Tenant's Notice to Landlord, together with all of the
documents which Landlord has requested pursuant to sub-parts (v) or (vi)
hereof, at least thirty (30) days prior to the effective date of the
Assignment or Sublease.
13.3. Landlord's Consent.
(a) Landlord's Options after Receipt of Tenant's Notice.
If Landlord's
consent is required to an Assignment or Sublease, at any time within
fifteen (15) business days
after Landlord's receipt of Tenant's Notice (including but not limited
to all of the documents
which Landlord may request pursuant to sub-part (v) of Section 13.2),
Landlord may by written
notice to Tenant elect to (i) sublease the portion of the Premises
specified in Tenant's Notice
(except as otherwise provided in subsection (b) of Section 13.4) or, if
▇▇▇▇▇▇'s Notice proposes
an Assignment, take an assignment of the Lease on the terms set forth in
Tenant's Notice (except
as otherwise provided in Section 13.4), (ii) consent to the Sublease or
Assignment, or (iii)
disapprove the Sublease or Assignment; provided, however, Landlord shall
not unreasonably
withhold its consent to the Assignment or Sublease. Landlord's failure
to elect any of the
alternatives provided in this Section 13.3(a) within the period of
fifteen (15) business days
hereinabove provided shall be deemed consent to the proposed Assignment
or Sublease, subject
to Section 13.3(e) below.
(b) Some of the Criteria for Landlord's Consent. By way
of example, the
parties hereby agree that it shall be reasonable for Landlord to
withhold its consent to a proposed
Sublease or Assignment based on any of the following factors, provided
that this list shall not be
exclusive:
(i) the use of the Premises by the proposed
assignee or sublessee
will not comply with the use of the Premises as described in the Basic
Lease Information;
(ii) the present financial condition of the
proposed assignee or
sublessee is insufficient, in Landlord's reasonable judgment, to meet
▇▇▇▇▇▇▇▇'s credit standards;
(iii) the proposed assignee's or sublessee's
anticipated use of the
Premises involves the generation, storage, use, treatment, or disposal
of any Hazardous
Materials; or
(iv) the proposed use of the first floor of
the Premises would include any retail activity.
(c) Time Limit on an Assignment or Sublease. If Landlord
consents in
writing to the Sublease or Assignment, Tenant may within, but not later
than, one hundred and
twenty (120) days after ▇▇▇▇▇▇▇▇'s consent, enter into an Assignment or
Sublease upon the terms
and conditions set forth in Tenant's Notice.
(d) Landlord's Consent to each Assignment or Sublease Is
Required. The
consent by Landlord to any Assignment or Sublease shall not relieve
Tenant or the assignee or
sublessee from the obligation to obtain Landlord's express written
consent to any other
Assignment or Sublease.
(e) Delivery of Transfer Document. Prior to the date when
any sublessee or
assignee occupies any portion of the Premises, Tenant shall deliver to
Landlord the fully
executed Sublease or Assignment, as appropriate. Landlord shall have
five (5) business days
after receipt of the fully executed Sublease or Assignment within which
to confirm whether or
not the fully executed Sublease or Assignment is consistent with the
terms of the Sublease or
Assignment in Tenant's Notice. If the Sublease or Assignment is
consistent with Tenant's
Notice, Landlord shall be deemed (if Landlord's consent was required) to
have consented to the
Sublease or Assignment. If the Sublease or Assignment shall differ in
any material respect from
the contents of Tenant's Notice, Landlord shall have the same rights of
approval of the Sublease
or Assignment that Landlord had concerning Tenant's Notice. Until
Landlord shall have
confirmed that the fully executed Sublease or Assignment is consistent
with Tenant's Notice, the
assignee's or sublessee's occupancy of the Premises, if such occupancy
has commenced, shall be
on a month-to-month basis.
13.4. Take-Back Space.
(a) Landlord's Rights Concerning Take-Back Space. If
Landlord elects to
Sublease or take an Assignment from Tenant as described in Section
13.3(a)(i), (i) Landlord shall
have the right to use the portion of the Premises covered by Tenant's
Notice ("Take-Back Space")
for the use permitted under this Lease (provided that Landlord shall not
be permitted to lease the
Take-Back Space to any competitor of Tenant), (ii) the rent payable by
Landlord to Tenant shall
be the lesser of that set forth in Tenant's Notice or the Minimum Rent,
calculated on a per
rentable square foot basis for the Take-Back Space, payable by Tenant
under this Lease at the
time of the Sublease or Assignment, (iii) Landlord may make such
Alterations to the Take-Back
Space as it shall elect, (iv) Landlord shall have the right to further
sublease or assign the Take-
Back Space to any party, without the consent of Tenant, (v) the amount
payable by Tenant for
increases in Additional Lease Charges as set forth in Article 4 shall be
reduced to reflect the
proportion of the building in which the Premises are located that the
Premises shall thereafter
occupy in comparison to the Take-Back Space, and (vi) Landlord shall pay
the entire cost
incurred in physically separating the Take-Back Space (if less than the
entire Premises) from the
balance of the Premises and in complying with any applicable Government
Requirements
relating to such separation.
(b) Limitation on Landlord's Right to Obtain Take-Back
Space. Landlord
shall not have the right to elect to Sublease the portion of the
Premises set forth in Tenant's
Notice, so long as the space which Tenant proposes to Sublease in
Tenant's Notice, when
combined with all other space in the Premises which ▇▇▇▇▇▇ has
previously subleased does not
exceed 33,000 rentable square feet of the Premises or does not equal or
exceed one (1) full floor
of the Premises.
13.5. Tenant Shall Remain Liable Under the Lease. tc "13.5.
Tenant Shall Remain Liable Under the Lease" \l 2 No Assignment
or Sublease, other
than an assignment to Landlord pursuant to Section 13.4, shall relieve
Tenant of any obligation to
be performed by Tenant under this Lease, whether arising before or after
the Assignment or
Sublease. In the event of an Assignment, Tenant shall not be relieved
from its liability under the
Lease, regardless of whether Landlord and the assignee subsequently
agree to amend or modify
any of the terms of the Lease; provided, however, if the Lease is
amended or modified, Tenant
shall not be responsible or liable to the extent Tenant's obligations
under this Lease are increased
from that in effect prior to such amendment or modification.
Notwithstanding the foregoing,
Tenant shall be relieved from any and all liability in connection with
that portion of the Premises
so long as it is Take-Back Space.
13.6. Profits from an Assignment or a Sublease.
(a) Profits from an Assignment or a Sublease. Except as
otherwise provided
in the next sentence, in the event of an Assignment or a Sublease by
Tenant, Landlord and
Tenant shall equally share all of the Profits. If there is an
Assignment to a Qualified Successor or
a Sublease to a Permitted Transferee(s) for space which does not exceed
that specified in Section
13.1(b)(iii)(2), Landlord shall not share in any Profits. The term
"Profits" shall mean all amounts
received by Tenant upon the execution of the Assignment or Sublease and
each month thereafter
as a consequence of the Assignment or Sublease, less (i) in the case of
a Sublease, the Minimum
Rent paid by Tenant to Landlord, prorated over the portion of the
Premises occupied by the
sublessee, (ii) the unamortized value (which shall be calculated on a
straight-line basis over the
remaining Term of the Lease without regard to option periods, if any) of
all tenant improvements
which ▇▇▇▇▇▇ paid for to that portion of the Premises occupied by the
assignee or sublessee, (iii)
real estate brokerage commissions and marketing expenses paid by Tenant
in connection with the
Assignment or Sublease, and (iv) the cost paid by Tenant for labor,
materials, and equipment
used in the construction of new improvements to the Premises for the
benefit of the assignee or
sublessee.
(b) Tenant's Payments for Tenant Improvements. In order
to calculate
Profits, Tenant shall deliver to Landlord within forty-five (45) days
after the completion of any
tenant improvements to the Premises (i) copies of all invoices for
labor, materials, and equipment
used in the construction of the tenant improvements (which invoices must
show that the work
was performed at the Premises) and (ii) copies of all checks which
Tenant used to pay for the
tenant improvements. Only documentation provided to Landlord within the
time and in the form
described in this subsection (b) shall be used to calculate the cost of
tenant improvements in
accordance with subsection (a) of this Section 13.6.
13.7. Obligations of an Assignee or Sublessee.
Each assignee or sublessee shall assume all obligations of
Tenant under this Lease and, other than an assignment or sublease to
Landlord pursuant to Section 13.4, shall be and remain liable jointly and
severally with Tenant for the payment of Rent
and for the performance of all the provisions of this Lease; provided,
however, that the assignee
or sublessee shall be liable to Landlord for Rent only in the amount set
forth in the Assignment
or Sublease. No assignment shall be binding on Landlord unless the
Assignment agreement shall
be satisfactory in substance and form to Landlord and shall be executed
by Landlord.
13.8. Payment of Landlord's Costs.
In the event that ▇▇▇▇▇▇▇▇'s approval is required in
connection with a proposed
Assignment or a Sublease, Tenant shall pay Landlord's reasonable
attorneys' and consultants' fees
and costs incurred in connection therewith.
13.9. No Reliance on Oral Statements.
▇▇▇▇▇▇ acknowledges and agrees to inform any proposed
assignee or
sublessee that neither ▇▇▇▇▇▇ nor any proposed assignee or sublessee
shall be entitled to rely
upon any oral statement or representation from any person concerning
whether or not Landlord
will consent to the proposed Assignment or Sublease. ▇▇▇▇▇▇ and any
proposed assignee or
sublessee may only reply upon a statement in writing signed by ▇▇▇▇▇▇▇▇.
ARTICLE 14 - DEFAULT tc "ARTICLE 14 - DEFAULT"
14.1. Tenant's Default.
The occurrence of any one or more of the following events shall constitute a
default and breach of this Lease by
Tenant:
(a) abandoning the Premises for more than two (2) days;
(b) the failure to pay any installment of Minimum Rent or
Additional
Lease Charges when due and payable under the Lease and within three (3)
days after receiving a
written notice from Landlord or its representatives stating or
estimating the amounts due;
(c) permitting ▇▇▇▇▇▇'s interest in the Premises or any of
Tenant's Property
to be placed in the hands of a receiver for a period in excess of thirty
(30) days, making an
assignment for the benefit of creditors, instituting voluntary
proceedings under any bankruptcy
act, failing to have dismissed within thirty (30) days any involuntary
proceeding filed against
Tenant under any bankruptcy act, or failing to have dismissed within
thirty (30) days any
proceedings seeking to execute or levy against or attach Tenant's
interest in the Premises or any
of Tenant's Property;
(d) any breach of Sections 13.1, and 16.3; or
(e) failing to promptly and fully perform any covenant,
condition or
agreement contained in this Lease (other than breaches of the provisions
set forth in subsections
(a) through (d) of this Section) if this failure continues for twenty
(20) days after written notice
thereof from Landlord to Tenant; provided, however, if ▇▇▇▇▇▇'s default
cannot reasonably be
cured within twenty (20) days, Tenant shall not be in default hereunder
if Tenant commences to
cure its default within twenty (20) days and diligently prosecutes such
cure to completion.
14.2. Remedies.
(a) Landlord's Remedies. In the event of ▇▇▇▇▇▇'s default
hereunder, in
addition to any other rights or remedies which Landlord may have,
Landlord shall have the right,
at Landlord's option, to do any of the following:
(i) obtain the rights and remedies provided by
California Civil
Code Section 1951.2, including, but not limited to, the right to
terminate Tenant's right to
possession of the Premises and to recover 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 rental
loss for the same period that the Tenant proves could be reasonably
avoided, as computed
pursuant to subsection (b) of Section 1951.2 of the Civil Code;
(ii) obtain the rights and remedies described in
California Civil
Code Section 1951.4 (Landlord may continue the Lease in effect after
▇▇▇▇▇▇'s breach and
abandonment and recover Rent as it becomes due, if ▇▇▇▇▇▇ has the right
to sublet or assign,
subject only to reasonable limitations);
(iii) obtain from Tenant, as damages, all of the
costs and expenses, including unamortized construction costs, architect and
engineering
fees, incurred by Landlord
(a) in constructing the Tenant Improvements in connection with this
Lease or (b) in making
repairs or constructing any new improvements to the Premises for the
benefit of any replacement
tenant to whom Landlord may lease the Premises after Tenant's default.
(Notwithstanding the
foregoing, if at the time of trial in any action brought by Landlord
against Tenant to obtain such
damages, Landlord has leased the Premises to another tenant, the
aforesaid damages shall be
reduced to the extent that the improvements constructed by Landlord are
used by a subsequent
tenant.);
(iv) obtain from Tenant, as damages, any real
estate brokerage fees and costs incurred by Landlord in leasing the Premises
to a replacement tenant after Tenant's default; and/or
(v) obtain full Rent from Tenant for that
period(s), if any, during which this Lease permitted Tenant to occupy the
Premises without the payment of full Rent.
(b) No Termination of this Lease. Acts of maintenance and
preservation,
efforts to sublease the Premises or the appointment of a receiver to
protect ▇▇▇▇▇▇▇▇'s interest
under this Lease shall not be deemed to be a termination of this Lease
or of Tenant's obligation
to pay Rent thereafter accruing, unless Landlord notifies Tenant in
writing of Landlord's election
to terminate this Lease.
(c) Worth at the Time of Award. For purposes of Section
1951.2(a)(1) and
(2) of the California Civil Code, "worth at the time of award" shall be
computed by allowing
interest at the rate of ten percent (10%) per annum. The worth at the
time of award for purposes
of Section 1951.2(a)(3) of the Civil Code 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%). For the purposes of Section 1951 of the Civil Code, "rent" shall
be calculated for each
month by adding (i) the monthly Minimum Rent, plus (ii) one twelfth
(1/12th) of the increases in
Additional Lease Charges payable by Tenant hereunder during the twelve
(12) consecutive
month period prior to the month in which ▇▇▇▇▇▇'s default occurred.
14.3. Waiver.
The waiver by Landlord of the breach
of any term, covenant, or condition of this Lease shall not be deemed a
waiver of any subsequent
breach of the same or any other term, covenant, or condition.
▇▇▇▇▇▇▇▇'s acceptance of Rent or
any other amounts subsequent to any breach hereof shall not be deemed a
waiver of any
preceding breach other than the failure to pay the particular amounts
accepted, regardless of
Landlord's knowledge of any breach at the time it accepts that amount.
Landlord shall not be
deemed to have waived any term, covenant, or condition unless Landlord
gives Tenant written
notice of such waiver.
14.4. Landlord's Default.
(a) Landlord's Opportunity to Cure any Default. If
Landlord fails to
perform any covenant, condition or agreement contained in the Lease
within thirty (30) days after
receipt of written notice from Tenant specifying such default or if
(when a default cannot
reasonably be cured within thirty (30) days) Landlord fails to commence
to cure the default
within thirty (30) days, Landlord shall be liable to Tenant for any
damages sustained by Tenant as
a result of Landlord's breach. Tenant shall not have the right to
terminate this Lease or to
withhold, reduce, or offset any amount against Rent except as otherwise
specifically provided
herein.
(b) ▇▇▇▇▇▇'s Right to Cure Landlord Defaults. In the event
Landlord fails to
cure said default within thirty (30) days after receipt of said written
notice, or if having
commenced said cure it does not diligently pursue it to completion,
Tenant may elect to cure said
breach at Tenant's expense, so long as Tenant only uses contractors from
a list of approved
contractors which Landlord shall provide to Tenant from time to time.
Within ten (10) days after
it has completed its cure, Tenant shall deliver to Landlord such
documentation of the costs
incurred by Tenant in curing said default as Landlord may reasonably
request. Tenant shall have
the right to offset from Rent the amount which ▇▇▇▇▇▇ is able to
establish, to Landlord's
reasonable satisfaction, that it incurred to cure said default pursuant
to the provisions of this
Section 14.4. Notwithstanding the foregoing, in the event of a Casualty
Loss, the provisions of
Article 11, rather than this Section 14.4, shall govern.
(c) Limitation of Liability. If ▇▇▇▇▇▇ obtains a money
judgment against
Landlord resulting from any default or other claim arising under this
Lease, this judgment shall
only be satisfied from the Property and the rents, issues, profits, and
other income received
therefrom, and no other real, personal or mixed property of Landlord (or
of any persons, or
entities which comprise Landlord) shall be subject to levy to satisfy
any such judgment.
ARTICLE 15 - HAZARDOUS MATERIALS
15.1. Compliance.
(a) Landlord's Compliance. Landlord hereby represents
that, to the best of
Landlord's knowledge, as of the date of the execution of this Lease, the
Premises comply with all
applicable laws, rules, orders, ordinances, directions, regulations and
requirements of federal,
state, county and municipal authorities pertaining to air and water
quality, Hazardous Materials,
waste disposal, air emissions and other environmental matters
("Hazardous Materials Laws")
with respect to the Premises. Landlord shall be solely liable for
violations of any Hazardous
Materials Laws regarding the Premises (i) attributable to Hazardous
Materials used in the course
of the original construction of the Premises or any refurbishing thereof
prior to the date of this
Lease, (ii) as a result of Hazardous Materials in the soil or
groundwater on or before the date of
this Lease, or (iii) as a result of Landlord's use of Hazardous
Materials in violation of applicable
law.
(b) Tenant's Compliance. Tenant shall comply with all
Hazardous
Materials Laws with respect to the Premises at all times when Tenant is
in possession of the
Premises.
15.2. Prohibited Acts and Damages Resulting Therefrom. tc "15.2.
Prohibited Acts and Damages Resulting Therefrom" \l 2
(a) Hazardous Materials Prohibited. Tenant shall not
cause or permit any
Hazardous Materials to be brought upon, kept, or used in or about the
Premises without the prior
written consent of the Landlord, which shall not be unreasonably
withheld as long as Tenant
demonstrates to Landlord's reasonable satisfaction that such Hazardous
Materials are necessary
to Tenant's business and will be used, kept, and stored in a manner that
complies with all laws
regulating any Hazardous Materials.
(b) Tenant's Obligations in the event of a Breach. If
Tenant breaches its
obligations stated herein or if the Premises are contaminated by
Hazardous Materials as a
consequence of Tenant's acts or omissions, Tenant shall be in default
under this Lease. In
addition to all other sums Tenant is required to pay as a consequence of
its default, Tenant shall
pay the diminution in value of the Premises, damages for the loss of or
restrictions on rentable or
usable space or any amenity of the Premises, damages arising from any
adverse impact on
marketing of space in the Premises, costs incurred in connection with
any investigation of site
conditions or any cleanup, remedial, removal or restoration work
required by any federal, state or
local governmental agency or political subdivision as a consequence of
its default hereunder.
Without limiting the foregoing, if the presence of any Hazardous
Materials on the Premises
caused or permitted by Tenant results in contamination, Tenant shall
promptly take all actions as
are necessary to return the Premises to the condition existing prior to
the introduction of
Hazardous Materials. Tenant shall obtain Landlord's written approval of
its remediation efforts
before beginning remediation of the Premises. The foregoing obligation
shall survive the
expiration or earlier termination of this lease.
15.3. Definition of Hazardous Materials.
The term "Hazardous Materials" shall mean
any hazardous or toxic
substance, material, or waste, including, but not limited to, those
substances, materials and
wastes listed in the United States Department of Transportation
Hazardous Materials Table (49
CFR 172.101) or by the Environmental Protection Agency as hazardous
substances (40 CFR
302) and amendments thereto, or such substances, materials and wastes
that are or become
regulated under any applicable federal, state or local law or
regulation.
15.4. Disclosure.
On the Commencement Date and on January 1 of each year thereafter,
Tenant shall disclose in writing to Landlord the names and amounts of all
Hazardous Materials which were stored, used or disposed of on the Premises
or which Tenant intends to store, use or dispose of on the Premises.
ARTICLE 16 - GENERAL PROVISIONS
16.1. Mediation and Arbitration.
(a) Mediation. LANDLORD AND TENANT HAVE AGREED TO HAVE
ANY DISPUTE BETWEEN THEM, WHERE THE AMOUNT IN DISPUTE IS LESS THAN
$100,000, ARISING OUT OF TENANT'S OCCUPANCY OF THE PREMISES OR
CONCERNING THIS LEASE -- OTHER THAN AN UNLAWFUL DETAINER ACTION OR
A CLAIM FOR CONSTRUCTIVE EVICTION -- DECIDED BY THIRD PARTY MEDIATION
BEFORE, AND AS A CONDITION PRECEDENT TO, THE INITIATION OF ANY
ADJUDICATIVE ACTION OR PROCEEDING, INCLUDING ARBITRATION. IN THE
EVENT THAT THE PARTIES HERETO DO NOT RESOLVE ANY DISPUTE AFTER ONE
DAY OF MEDIATION, THE DISPUTE SHALL BE DECIDED BY ARBITRATION
PURSUANT TO SECTION 16.1(d) HEREOF. IT IS FURTHER AGREED THAT BY
SIGNING IN THE SPACE BELOW, THE PARTIES HERETO HAVE AGREED TO GIVE UP
THEIR RIGHT TO HAVE THE DISPUTES SUBJECT TO THIS SECTION LITIGATED IN A
COURT AS WELL AS EACH PARTY'S RIGHTS TO DISCOVERY AND APPEAL EXCEPT
TO THE EXTENT THAT SUCH RIGHTS ARE SPECIFICALLY ENUMERATED IN THIS
SECTION 16.1. IF EITHER PARTY REFUSES TO MEDIATE OR ARBITRATE THE
DISPUTES SUBJECT TO THIS SECTION, THE OTHER PARTY MAY COMPEL THE
MEDIATION OR ARBITRATION OF THAT DISPUTE UNDER THE AUTHORITY OF THE
CALIFORNIA CODE OF CIVIL PROCEDURE. IT IS UNDERSTOOD THAT THIS
AGREEMENT TO MEDIATE AND ARBITRATE DISPUTES IS VOLUNTARY AND THAT
IT IS ONLY BINDING UPON THOSE PARTIES WHOSE SIGNATURES APPEAR BELOW.
(b) Commencement of Mediation. The mediation shall
commence when
one party to a dispute (the "Offering Party") makes a written offer of
compromise ("Offer") to the
other party(s). If the Offer is not accepted by the other party(s) (the
"Refusing Party") within five
(5) days after receipt of the Offer by the Refusing Party, any party may
refer the dispute to
mediation before any mutually agreeable organization regularly offering
services as a mediator.
If the parties are unable to agree upon a mediator within five (5) days
after the Offer is received
by the Refusing Party, the dispute shall be mediated by the Judicial
Arbitration & Mediation
Service, 2 Embarcadero Center, San Francisco, California ("JAMS"). The
parties shall have
three (3) business days after the matter is submitted to mediation to
agree upon the mediator from
the available panel. If the parties are unable to agree within that
three (3) day period, any party
may request that mediation organization appoint the mediator. The
mediator chosen by the
parties or appointed by JAMS shall be an attorney at law licensed to
practice in the State of
California with at least two (2) years experience as a mediator and at
least ten (10) years
experience in the practice of real estate law.
(c) Costs of Mediation and Arbitration. Each party shall
advance in equal
shares the fees charged by the mediator and the costs of the mediation
until it is determined
whether the dispute is resolved without further proceedings. If the
mediation succeeds in
resolving the dispute, each party to the mediation will equally share
the fees of the mediator and
the costs of the mediation, and each shall bear its own attorneys' fees
and costs in connection
with the mediation. On the other hand, if the mediation does not
resolve the dispute, the
prevailing party at the arbitration or in any subsequent court
proceeding for the purposes of
applying Section 16.8 shall be (i) the Offering Party if the Refusing
Party(s) does not obtain a
more favorable judgment or award than was set forth in the Offer or (ii)
the Refusing Party(s) if
the Refusing Party(s) does obtain a more favorable judgment or award
than was set forth in the
Offer.
(d) Arbitration. After the parties have complied with
subsection (b) of this
Section 16.1, any claim, controversy or dispute between or among the
parties to this mediation
and arbitration agreement shall be submitted to arbitration.
(e) Arbitration Procedures. Any matter subject to
arbitration shall be
submitted to JAMS or, if JAMS no longer exists, to any similar
organization mutually acceptable
to the parties. The arbitration shall be conducted pursuant to the
procedures set forth in Sections
1280 et seq. of the California Code of Civil Procedure. The arbitration
shall be decided by one
neutral arbitrator. The arbitrator shall follow the provisions of
Sections 1282.2(a)(2) and
1283.05 of the California Code of Civil Procedure, shall set a date for
an arbitration hearing no
longer than one (1) month after the selection of the arbitrator, and
shall make an award no later
than five (5) days after the conclusion of the arbitration hearing. Any
of the time deadlines set
forth in this Lease or in Sections 1280 et seq. of the Code of Civil
Procedure or set by the
arbitrator may be changed or modified at any time by the written
stipulation of all of the parties
to the arbitration. The decision of the arbitrator shall be final and
binding upon the parties; and
any court of competent jurisdiction may thereafter enter judgment in
accordance with the
arbitrator's decision.
(f) Selection of the Arbitrator. The parties shall have
three (3) business
days after the matter is submitted to arbitration to agree upon the
neutral arbitrator from the
available panel. If the parties are unable to agree within that three
(3) day period, any party may
request the appropriate official at JAMS to appoint the arbitrator from
its panel and that
appointment shall be binding upon the parties to the arbitration. The
arbitrator chosen by the
parties or appointed by JAMS shall be a retired Federal District Court,
California Superior Court,
or federal or state appellate court judge with at least ten (10) years
experience on the bench.
16.2. Sale of Landlord's Interest.
In the event of any sale or transfer of the Premises or the Property and
assignment of this Lease
by Landlord, Landlord shall be relieved of any and all liability and
obligations contained in or
derived from this Lease or relating to the Premises occurring after the
consummation of such sale
or transfer. If any security deposit or prepaid rent has been paid by
Tenant, Landlord shall
transfer the security deposit or prepaid rent to Landlord's successor
and upon such transfer,
Landlord shall be relieved of any and all further liability with respect
thereto.
16.3. Estoppel Certificate.
Each party
("Certifying Party") shall, at any time and from time to time, but not
more frequently than twice
in any twelve (12) month period, upon not less than ten (10) business
days' prior notice by the
other party ("Requesting Party") execute, acknowledge and deliver to the
Requesting Party a
statement in writing, certifying (a) that this Lease is unmodified and
in full force and effect (or, if
modified, stating the modifications); (b) the amount of monthly Minimum
Rent and the increases
in Additional Lease Charges payable monthly by Tenant and the date to
which these components
of Rent have been paid in advance; (c) the amount of any security
deposited with Landlord; (d)
the Commencement Date and the last date of the Term and the number and
duration of option
periods, if any; (e) whether or not there are then existing any defenses
against the enforcement of
any of the obligations of Tenant under this Lease (and, if so,
specifying same); (f) whether or not
Landlord is in default hereunder (and, if so, specifying same); and (g)
such other matters as may
be reasonably requested by the Requesting Party. Any prospective
purchaser, ground lessor,
lender, or other interested party shall be entitled to rely on the truth
of all of the matters contained
in such statement; however, the Certifying Party may provide in any such
certificate that it shall
have no liability for any misstatement contained therein. Failure to
comply with this Section
shall be a material breach of this Lease by the Certifying Party and in
addition to all of the other
rights and remedies hereunder, the Requesting Party shall have the right
to collect from the
Certifying Party all damages caused by the loss of a loan, sale, or
other transaction which may
result from said party's failure to comply with this Section 16.3.
16.4. Financial Statement.
Upon Landlord's written request, Tenant shall deliver to Landlord
within ten (10) days its most recent publicly available financial statement
certified by Tenant to be accurate. ▇▇▇▇▇▇▇▇ agrees that such information,
if requested by ▇▇▇▇▇▇, shall be held in confidence and disclosed only for
purposes related to the sale, exchange, ground leasing, or financing of the
Property.
16.5. Subordination and Attornment.
(a) Subordination/Non-Disturbance Agreement. Upon
▇▇▇▇▇▇▇▇'s written
request, ▇▇▇▇▇▇ shall execute a subordination and non-disturbance
agreement which is
substantially in the form of Exhibit E hereto ("Subordination/Non-
Disturbance Agreement"),
wherein Tenant shall subordinate its rights to the lien of any future
mortgage, future deed of trust,
or the interest of any future lease in which Landlord is tenant and to
all advances made or
hereafter to be made upon the security therefor. In the event of any
foreclosure sale, transfer in
lieu of foreclosure, or termination of a lease in which Landlord is
tenant, Tenant shall attorn to
the purchaser, transferee or lessor of Landlord, at their option, and
recognize such party as
landlord under this Lease. Within ten (10) days after ▇▇▇▇▇▇▇▇'s
request therefor, ▇▇▇▇▇▇ shall
execute and deliver to Landlord the Subordination/Non-Disturbance
Agreement to effectuate the
purposes of this Section 16.5. Tenant acknowledges that if ▇▇▇▇▇▇ does
not promptly comply
with this Section 16.5, Tenant may cause Landlord to lose a potential
loan or ground lease or to
suffer the imposition of penalties or an increased rate of interest in
connection with such future
loan.
(b) Non-Disturbance Agreement from the Existing Lender.
Landlord agrees
to use all reasonable efforts (without the requirement to expend out-of-
pocket funds, other than
reasonable fees of Landlord's and Landlord's mortgagee's legal counsel)
to obtain with
reasonable promptness from the existing lender on the Premises a non-
disturbance agreement
which is reasonably satisfactory to Tenant.
16.6. Tenant Signage.
Subject to the terms and conditions of this Section 16.6,
Tenant shall have the
exclusive right of tenant identification ("External Tenant Signage") on
the exterior of the
Premises (including the roof). Tenant's right of External Tenant
Signage shall be subject to the
following conditions:
(i) The color, materials, lighting and other
design features shall be developed by ▇▇▇▇▇▇ and its architect and approved
by landlord and ▇▇▇▇▇▇. Landlord shall have the right to withhold its
consent to the External Tenant Signage in Landlord's sole discretion.
However, if Landlord does not consent to the External Tenant Signage,
Landlord shall state, in writing and in reasonable detail, the basis for its
disapproval and propose changes to the External Tenant Signage that would be
acceptable to Landlord. Tenant shall be solely responsible for any
Alterations required as a result of the Exterior Signage and shall be solely
responsible for compliance with all local, state and federal laws (including
obtaining any and all permits) associated with the Exterior Tenant Signage.
(ii) The right to External Signage granted
hereunder is personal to the named Tenant under this Lease and any Qualified
Successor. Such right shall be revoked and shall become null and void,
without any abatement of or reduction in rent to Tenant, for any period in
which the named Tenant under this Lease and/or any Qualified Successor does
not occupy at least fifty percent of the rentable area of the Premises.
(iii) Tenant, at its sole cost and expense, shall
repair and maintain
the External Tenant Signage and any portion of the Premises to which the
External Tenant
Signage is attached. Tenant shall promptly repair any vandalism,
breakage, or damage to the
External Tenant Signage.
(iv) The cost of design, fabrication and
installation of the External Tenant Signage shall be chargeable against the
Allowance under the work Letter attached as Exhibit C, and shall otherwise
be at the sole cost and expense of Tenant.
16.7. Merger.
The voluntary or
other surrender of
this Lease by Tenant or termination hereof shall not cause a merger but
shall, at Landlord's
option, terminate any existing subtenancies or operate as an assignment
to Landlord of any
subtenancies.
16.8. Recording.
This Lease
shall not be
recorded by either Landlord or Tenant; provided, however, upon obtaining
the prior written
consent of the other party, either party may record a memorandum of this
Lease.
16.9. Attorneys' Fees.
In the event there is a
mediation, arbitration, lawsuit, action, or proceeding between or among
Landlord and Tenant
(except for a dispute regarding Prevailing Market Rate which is resolved
pursuant to the
provisions of Section 3.6 without the necessity of litigation) which
arises from or concerns this
Lease or the Premises, whether that mediation, arbitration, lawsuit,
action, or proceeding
involves causes of action in contract or in tort, at law or in equity,
the prevailing party shall be
entitled to recover all costs and expenses, including its attorneys'
fees, in such lawsuit, action or
proceeding. Subject to the requirements of Section 16.1(c) [for those
actions which are subject
to the mediation and arbitration process], the prevailing party shall be
determined by the court or
an arbitrator based upon an assessment of which party's major arguments
made or positions taken
in the proceeding could fairly be said to have prevailed over the other
party's major arguments or
positions.
16.10. Cumulative Remedies.
No remedy or election exercised hereunder shall be deemed exclusive
but shall be cumulative with all other remedies at law or in equity.
16.11. Choice of Law.
This Lease shall be
governed by and construed in accordance with the laws of the State of
California.
16.12. Successors and Assigns.
Subject to the provisions regarding assignment contained herein, this
Lease shall bind and inure to the benefit of the heirs, personal
representatives, successors and assigns of the parties hereto.
16.13. Severability.
A final determination by a court
of competent jurisdiction that any provision of this Lease is invalid,
void, or unenforceable shall
not affect the validity of any other provision of this Lease, and all
other provisions and this Lease
shall remain in full force and effect.
16.14. Authority.
Each individual executing this
Lease on behalf of Landlord or Tenant, as the case may be, hereby
warrants and represents that
he/she is duly authorized to execute and deliver this Lease on behalf of
said party and that this
Lease is binding on the party on behalf of which the individual executed
this Lease.
16.15. Time of Essence.
Time is of the essence in the performance of each and every term,
covenant and condition of this Lease.
16.16. Captions.
The article, section, and subsection
captions contained herein are for reference purposes only and are not a
part of this Lease.
16.17. Force Majeure.
Except for the payment
of Rent (which shall not be excused unless specifically permitted
hereunder), strikes, labor
disputes, an inability to obtain labor, materials, equipment or
reasonable substitutes therefor, acts
of God, governmental restrictions or regulations, judicial orders,
government action, civil
commotion, Casualty Loss, or other causes beyond the reasonable control
of the party obligated
to perform hereunder shall excuse performance by such party for a period
equal to the time
during which that party was prevented, delayed, or stopped from its
obligations hereunder.
16.18. Notices.
(a) Service of Notices. All bills, statements, notices,
demands, requests or
other communications given or required to be given under this Lease
shall only be effective if in
writing and (i) sent by express, registered or certified mail, (ii) sent
by private carrier, i.e.,
Federal Express, (iii) sent by facsimile transmission, or (iv) delivered
personally:
(1) to Tenant (A) at Tenant's address or facsimile
number, set forth
in the Basic Lease Information, (B) at Tenant's address or facsimile in
the Premises, if sent
subsequent to ▇▇▇▇▇▇'s taking possession of the Premises, or (C) at any
place where ▇▇▇▇▇▇ may
be found or at the Premises if sent subsequent to Tenant's vacating,
deserting, abandoning, or
surrendering the Premises;
(2) to Landlord at ▇▇▇▇▇▇▇▇'s address or facsimile
number set forth
in the Basic Lease Information; or
(3) to such other address or facsimile number as
either Landlord or
Tenant may designate as its new address or facsimile number by written
notice given to the other
in accordance with the provisions of this Section 16.18.
Any bill, statement, notice, demand, request or other communication
shall be deemed to have
been given two (2) days after the date when it shall have been mailed as
provided in this Section
16.18 if sent by registered or certified mail, upon the date of delivery
to the above-referenced
address if personally delivered or sent by express mail or by private
carrier, or upon the date of
receipt if sent by facsimile transmission.
(b) Compliance with Statutory Requirements.
Notwithstanding the
foregoing, to the extent that a three or thirty day notice to Tenant
complies with the requirements
of the California Civil Code or Code of Civil Procedure, service of such
notice shall be deemed
to comply with the requirements of this Lease.
16.19. Brokers.
(a) Tenant's Broker. Tenant warrants that it has had no
dealings with any
real estate broker or agent in connection with the negotiation of this
Lease other than the
broker(s) designated in the Basic Lease Information, and ▇▇▇▇▇▇ knows of
no other real estate
broker or agent who is entitled to a commission in connection with this
Lease.
(b) Representation by Brokers. Tenant acknowledges that
the real estate
broker designated in the Basic Lease Information as Landlord's broker
only represented Landlord
and did not represent Tenant in connection with the leasing of the
Premises and the negotiation
and drafting of this Lease. If a broker is identified in the Basic
Lease Information as the Tenant's
broker, that is the only person who represented Tenant in connection
with the Premises and this
Lease.
(c) Commission. Landlord shall pay the commission due in
connection with
the Lease pursuant to the terms of the separate agreement between
Landlord and ▇▇▇▇▇▇▇▇'s
Broker. Landlord and ▇▇▇▇▇▇ shall each indemnify, defend and hold the
other harmless from and
against any and all claims and damages and for any and all costs and
expenses (including
reasonable attorneys' fees and costs) resulting from claims that may be
asserted against the other
party by any broker, agent or finder not disclosed herein.
16.20. Joint and Several Liability.
If there is more than one person or entity identified as Tenant in
this Lease, each person or entity shall be jointly and severally liable for
all of Tenant's obligations under this Lease.
16.21. Quiet Possession.
Upon ▇▇▇▇▇▇'s paying rent, additional rent and other sums provided
hereunder and observing and performing all of the covenants, conditions and
provisions on Tenant's part to be observed and performed hereunder, Tenant
shall have quiet possession of the Premises for the entire term hereof,
subject to all of the provisions of this Lease.
16.22. Prior Agreements and Amendments.
This Lease represents the entire agreement between
the parties pertaining to
the Premises and this Lease and supersedes all previous negotiations,
representations, agreements
and communications between the parties whether written or oral,
including but not limited to any
letters of intent executed by the parties to this Lease or their real
estate brokers. ▇▇▇▇▇▇
acknowledges that in executing this Lease Tenant has not relied on any
verbal or written
understanding, promise, or representation which does not appear on this
document. This Lease
shall only be amended or modified by a written instrument executed by
both Landlord and
▇▇▇▇▇▇.
LANDLORD TENANT
NO. ▇ ▇▇▇▇▇ ▇▇▇▇▇▇, LLC, CNET, Inc.
a California limited liability company a Delaware corporation
_____________________________ _________________________
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
its Managing Member Vice-President, Finance
and Administration
Dated: September 24, 1997 Dated: September 24, 1997