EXHIBIT 10.32
OFFICE LEASE
BETWEEN
▇▇▇▇▇ STATION ASSOCIATES, LLC (LANDLORD)
AND
NORTHPOINT COMMUNICATIONS, INC. (TENANT)
EMERYSTATION PROJECT
Emeryville, California
OFFICE LEASE
ARTICLE ONE
BASIC LEASE PROVISIONS
1.01 BASIC LEASE PROVISIONS
In the event of any conflict between these Basic Lease Provisions and any Other
Lease provision, such other Lease provision shall control.
(1) BUILDING AND ADDRESS:
EmeryStation
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(2) LANDLORD AND ADDRESS:
▇▇▇▇▇ Station Associates, LLC
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Notices to Landlord shall be addressed:
▇▇▇▇▇ Station Associates, LLC
c/o Wareham Development Corporation
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(3) TENANT AND CURRENT ADDRESS:
(a) Name: NorthPoint Communications, Inc.
(b) State of incorporation: Delaware
Notices to Tenant shall be addressed:
NorthPoint Communications, Inc.
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Attn: ▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
NorthPoint Communications, Inc.
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Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
(4) DATE OF LEASE: as of June 5, 1999
(5) LEASE TERM: 86 months, subject to extension as described in the
Addendum hereto.
(6) PROJECTED COMMENCEMENT DATE: September 15, 1999
(7) PROJECTED EXPIRATION DATE: November 14, 2006.
(8) MONTHLY BASE RENT:
PERIOD FROM/TO MONTHLY MONTHLY RATE/SF
OF RENTABLE AREA
Months 1 to 2* 0
Months 3 to 30 $2.52
Months 31 to 60 $2.67
Months 61 to 86 $2.82
*Tenant shall not pay Monthly Base Rent during the first two months of the
Term but shall pay any and all other amounts otherwise payable by Tenant
by reason of its occupancy of the Premises in accordance with the terms
and conditions of this Lease.
The Monthly Base rent for the 3rd month of the Term shall be paid within
five (5) business days of execution of this Lease.
(9) RENTABLE AREA OF THE PREMISES: 72,500 square feet subject to
expansion in accordance with the terms hereof.
South Wing of the 4th Floor: 35,000 rentable square feet
Entire 5th Floor: 25,000 rentable square feet
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The stated rentable areas are approximate. They will be measured by
Landlord's Architect and verified by Tenant's architect according to
1996 BOMA standards.
(10) SECURITY DEPOSIT: $355,250.00 (to be restated to equal two month's
rent at the rate of $2.45 per rentable square foot per month once the
Premises are remeasured, as referenced above). Tenant shall have the
right to provide this Security deposit either in the form of cash or
irrevocable letter of credit, cashable on sight in California. Said
letter of credit shall be of a form and drawn on a financial
institution reasonably satisfactory to Landlord.
(11) SUITE NUMBERS OF PREMISES: 270, 400 and 500.
(12) OPERATING EXPENSES BASE YEAR FOR PREMISES: The first full twelve-
month period following Tenant's occupancy.
(13) TAXES BASE YEAR FOR PREMISES: The first full twelve-month period
following Tenant's occupancy.
(14) TENANT'S USE OF PREMISES: General office use with the following
permitted incidental uses to such primary use: storage, public
meeting rooms, meeting, training and conference facilities, kitchen,
telecommunication facilities and equipment, teleconferencing
facilities, data processing and computer facilities and computer
equipment rooms, work out room and showers, a 24 hour a day
operational network control center. Landlord represents and warrants
that Tenant may occupy the Premises for such uses and that such uses
are and will not be in violation of (a) any exclusives or other
agreements that Landlord has with other occupants, lenders,
governmental authorities, or any
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others, (b) any covenants, conditions, restrictions, easements,
mortgages, deeds of trust, leases, ground leases, and rights of way
affecting the Premises or (c) currently existing restrictions imposed
by any governmental body or authority.
(15) PARKING: Up to 63 unreserved parking spaces in garage (1 per 1000
usable square feet)
Up to 126 unreserved parking spaces on surface lots (2 per
1000 usable square feet)
(The total number of parking spaces shall not exceed 3
cars per 1,000 square feet of usable square feet, and
shall be recalculated as part of the Premises
measurement referred to above. Landlord will use
commercially reasonable efforts to increase Tenant's
overall parking ratio up to 3 cars per 1000 rentable
square feet of Premises area.)
PARKING RATES: Unreserved Garage Spaces: $55/month through the first
full twelve (12) months of Tenant's occupancy; Unreserved Surface Lot
Spaces: $35/month through the first full twelve (12) months of
tenant's occupancy.
There shall be an annual limit on increases of not more than 10% on
Tenant's parking rate increases after the first full twelve (12)
months of Tenant's occupancy. Subject to the foregoing, any year that
parking rates are increased less than the allowed amount, the amount
of unused allowable increase less can be used in any subsequent
years. For example, if parking rates are increased only 5% in the
third full lease year, Landlord may increase parking rates as much as
15% the next year.
(16) BROKERS:
Landlord's Broker: CB ▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc.
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Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Tenant's Broker: ▇▇▇▇▇ & ▇▇▇▇▇ Company
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Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
1.02 ENUMERATION OF EXHIBITS, RIDER(S) AND ADDENDUM
The Exhibits, Rider(s) and Addendum set forth below and attached to this Lease
are incorporated in this Lease by this reference:
EXHIBIT A Plan of Premises
EXHIBIT B Workletter Agreement
EXHIBIT C Rules and Regulations
RIDER 1 Commencement Date Agreement
ADDENDUM TO LEASE
1.03 DEFINITIONS
For purposes hereof, the following terms shall have the following meanings:
ADJUSTMENT YEAR: The applicable calendar year or any portion thereof after the
Operating Expenses Base Year and Taxes Base Year for which a Rent Adjustment
computation is being made.
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AFFILIATE: Any corporation or other business entity that is owned or controlled
by, owns or controls, or is under common ownership or control with Tenant, and
any corporation or other business entity into which, or with which, Tenant may
merge or consolidate.
BUILDING: The office building located at the address specified in Section
1.01(1). The Building also includes retail spaces.
COMMON AREAS: All areas of the Project made available by Landlord from time to
time for the general common use or benefit of the tenants of the Building, and
their employees and invitees, or the public, as such areas currently exist and
as they may be changed from time to time.
DECORATION: Tenant Alterations which do not require a building permit and which
do not involve any of the structural elements of the Building, or any of the
Building's systems, including its electrical, mechanical, plumbing, security,
heating, ventilating, air-conditioning, communication, and fire and life safety
systems.
DEFAULT RATE: Two (2) percentage points above the rate then most recently
announced by Bank of America N.T.&S.A. at its San Francisco main office as its
base lending reference rate, from time to time announced, but in no event higher
than the maximum rate permitted by Law.
ENVIRONMENTAL LAWS: All Laws governing the use, storage, disposal or generation
of any Hazardous Material, including, without limitation, the Comprehensive
Environmental Response Compensation and Liability Act of 1980, as amended, and
the Resource Conservation and Recovery Act of 1976, as amended.
EXPIRATION DATE: The date specified in Section 1.01(7) unless changed by
operation of Article Two.
EXPANSION OPTION: Shall have the meaning set forth in the Addendum.
EXTENSION OPTION: One five (5) year option to extend the Lease Term as more
fully defined in the Addendum hereto.
FORCE MAJEURE: Any accident, casualty, act of God, war or civil commotion,
strike or labor troubles, or any cause whatsoever beyond the reasonable control
of Landlord, including water shortages, energy shortages or governmental
preemption in connection with an act of God, a national emergency, or by reason
of Law, or by reason of the conditions of supply and demand which have been or
are affected by act of God, war or other emergency.
HAZARDOUS MATERIAL: Such substances, material and wastes which are or become
regulated under any Environmental Law; or which are classified as hazardous or
toxic under any Environmental Law; and explosives and firearms, radioactive
material, asbestos, polychlorinated biphenyls, and petroleum products.
LAND: The parcel(s) of real estate on which the Building and Project are
located.
LANDLORD DELAY: Any event or occurrence that delays the completion of the Tenant
Work which is caused by or is described as follows:
(i) changes, alterations or additions requested or made by Landlord in
the design or finish in any part of the Premises after approval of the plans and
specifications (as described in the Workletter);
(ii) Landlord's unreasonable delay in supplying information, approving
plans, specifications or estimates, giving authorizations or otherwise;
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(iii) failure to approve and pay for such Tenant Work as Landlord
undertakes to approve or to pay for pursuant to the Workletter, whether by
Allowance or otherwise;
(iv) the performance or completion by Landlord or any person engaged by
Landlord of any work in or about the Premises or the Building; or
(v) breach of any representation or warranty by Landlord hereunder, or
of any obligation of Landlord hereunder, or failure to perform or comply with
any obligation or condition binding upon Landlord pursuant to the Workletter,
including the failure to approve and pay for such Tenant Work or other items if
and to the extent the Workletter provides they are to be approved or paid by
Landlord.
LANDLORD INDEMNITEES: Collectively, Landlord, any Mortgagee or ground lessor of
the Property, the property manager and the leasing manager for the Property and
their respective partners, members, directors, officers, agents and employees.
LANDLORD WORK: The construction or installation of improvements to the Premises,
to be furnished by Landlord, specifically described in the Workletter or
exhibits attached hereto.
LAWS OR LAW: All laws, ordinances, rules, regulations, other requirements,
orders, rulings or decisions adopted or made by any governmental body, agency,
department or judicial authority having jurisdiction over the Property, the
Premises or Tenant's activities at the Premises and any covenants, conditions or
restrictions of record which affect the Property.
LEASE: This instrument and all exhibits and riders attached hereto, as may be
amended from time to time.
LEASE YEAR: The twelve month period beginning on the first day of the first
month following the Commencement Date (unless the Commencement Date is the first
day of a calendar month in which case beginning on the Commencement Date), and
each subsequent twelve month, or shorter, period until the Expiration Date.
MONTHLY BASE RENT: The monthly rent specified in Section 1.01(8).
MORTGAGEE: Any holder of a mortgage, deed of trust or other security instrument
encumbering the Property.
NATIONAL HOLIDAYS: New Year's Day, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day and any other holidays recognized by the
janitorial and other unions servicing the Building in accordance with their
contracts.
OPERATING EXPENSES: All costs, expenses and disbursements of every kind and
nature which Landlord shall pay in connection with the management, operation,
maintenance and repair of the office portion of the Building and Property
(except that, if Landlord elects to construct a freestanding parking garage on
one of the surface parking lots serving the Building, the operating expenses of
such garage will not be included in Operating Expenses). Operating Expenses
shall not include (i) costs of alterations of the premises of tenants of the
Project, (ii) costs of capital improvements to the Project (except for amortized
portion of capital improvements installed for the purpose of reducing Operating
Expenses or complying with applicable Laws enacted after the Commencement Date),
(iii) depreciation charges, (iv) interest and principal payments on loans
(except for loans for capital improvements which Landlord is allowed to include
in Operating Expenses as provided under item (ii) above), (v) ground rental
payments, (vi) real estate brokerage and leasing commissions, (vii) advertising
and marketing expenses, (viii) costs for which Landlord is entitled to be
reimbursed by insurance proceeds, by other tenants, or otherwise, (ix) expenses
incurred in negotiating leases of tenants in the Project or enforcing lease
obligations of tenants in the Project, (x) Landlord's or Landlord's property
manager's corporate general overhead or corporate general administrative
expenses,
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(xi) costs in connection with construction of the Project, including any latent
defects or correction of defects in design or construction, (xii) costs incurred
due to violation by Landlord or any tenant of the provisions of any lease,
(xiii) costs of compliance with, or correction of any violations of, any Laws in
effect as of the commencement of this Lease, (xiv) fines, costs, penalties or
interest resulting from the negligence or fault of Landlord or its agents,
employees or contractors, (xv) costs or expenses of any kind related to
Hazardous Materials, ad (xvi) expenses which under generally accepted accounting
principles would not be considered an appropriate maintenance or operating
expense. If any Operating Expense, though paid in one year, relates to more than
one calendar year, at the option of Landlord such expense may be proportionately
allocated among such related calendar years. Operating Expenses for the Building
that are not, in Landlord's reasonable discretion, allocable solely to either
the office or retail portion of the Building shall be equitable allocated by
Landlord between and charged to the office and retail portions of the Building.
OPERATING EXPENSES BASE YEAR: The period designated in Section 1.01(12).
PREMISES: The space located in the Building at the Suite Numbers listed in
Section 1.01(11) and depicted on Exhibit A attached hereto.
PROJECT or PROPERTY: The Project consists of the office building with retail
spaces located at the street address specified in Section 1.01(1) in Emeryville,
California, associated surface and garage parking as designated by Landlord from
time to time, landscaping and improvements, together with the Land, any
associated interests in real property, and the personal property, fixtures,
machinery, equipment, systems and apparatus located in or used in conjunction
with any of the foregoing. The Project may also be referred to as the Property.
REAL PROPERTY: The Property excluding any personal property.
RENT: Collectively, Monthly Base Rent, Rent Adjustments and Rent Adjustment
Deposits, and all other charges, payments, late fees or other amounts required
to be paid by Tenant under this Lease.
RENT ADJUSTMENT: Any amounts owed by Tenant for payment of Operating Expenses or
Taxes. The Rent Adjustments shall be determined and paid as provided in Article
Four.
RENT ADJUSTMENT DEPOSIT: An amount equal to Landlord's estimate of the Rent
Adjustment attributable to each month of the applicable Adjustment Year. On or
before the beginning of each Adjustment Year or with Landlord's Statement
(defined in Article Four), Landlord may estimate and notify Tenant in writing of
its estimate of the excess, if any, of Operating Expenses over those for the
Operating Expenses Base Year and of Taxes over those for the Taxes Base Year.
Prior to the first determination by Landlord of the amount of Operating Expenses
for the Operating Expenses Base Year and of Taxes for the Taxes Base Year,
Landlord may estimate such amounts in the foregoing calculation. The last
estimate by Landlord shall remain in effect as the applicable Rent Adjustment
Deposit unless and until Landlord notifies Tenant in writing of a change, which
notice may be given by Landlord from time to time during an Adjustment Year.
RENTABLE AREA OF THE PREMISES: The amount of square footage set forth in Section
1.01(9), subject to remeasurement within 15 days after Lease signing, as
described herein.
RENTABLE AREA OF THE OFFICE PORTION OF THE PROJECT: The amount of square footage
which represents the sum of the rentable area of all space intended for office
occupancy in the Project, as determined by Landlord from time to time; and
Landlord shall notify Tenant of any adjustments in such rentable area of the
Building and any corresponding change in Tenant's Share. Notwithstanding the
foregoing, without Tenant's prior written approval, which Tenant may withhold in
its reasonable discretion, Landlord shall make no adjustments (other than the
initial remeasurement of the space described in Section
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1.10(9) hereof) which shall increase Tenant's Rent or Tenant's Share of any
Expenses or Taxes or other charges or costs.
SECURITY DEPOSIT: The funds specified in Section 1.01(10), if any, deposited by
Tenant with Landlord as security for Tenant's performance of its obligations
under this Lease.
STANDARD OPERATING HOURS: Monday through Friday from 8:00 A.M. to 6:00 P.M. and
Saturdays from 9:00 A.M. to 1:00 P.M., excluding National Holidays.
SUBSTANTIALLY COMPLETE: The completion of the Landlord Work or Tenant Work, as
the case may be, except for minor insubstantial details of construction,
decoration or mechanical adjustments which remain to be done.
TAXES: All federal, state and local governmental taxes, assessments and charges
of every kind or nature, whether general, special, ordinary or extraordinary,
which Landlord shall pay or become obligated to pay because of or in connection
with the ownership, leasing, management, control or operation of the Property or
any of its components (including any personal property used in connection
therewith), which may also include any rental or similar taxes levied in lieu of
or in addition to general real and/or personal property taxes. For purposes
hereof, Taxes for any year shall be Taxes which are assessed for any period of
such year, whether or not such Taxes are billed and payable in a subsequent
calendar year. There shall be included in Taxes for any year the amount of all
reasonable fees, costs and expenses (including reasonable attorneys' fees) paid
by Landlord during such year in seeking or obtaining any refund or reduction of
Taxes. Taxes for any year shall be reduced by the net amount of any tax refund
received by Landlord attributable to such year. If a special assessment payable
in installments is levied against any part of the Property, Taxes for any year
shall include only the installment of such assessment and any interest paid
during such year. Taxes shall not include any federal or state inheritance,
general income, gift or estate taxes, except that if a change occurs in the
method of taxation resulting in whole or in part in the substitution of any such
taxes, or any other assessment, for any Taxes as above defined, such substituted
taxes or assessments shall be included in the Taxes.
TAXES BASE YEAR: The period designated in Section 1.01(13).
TENANT ADDITIONS: Collectively, Tenant Work and Tenant Alterations.
TENANT ALTERATIONS: Any alterations, improvements, additions, installations or
construction in or to the Premises or any Building systems serving the Premises
(excluding Landlord Work or Tenant Work); and any supplementary air-conditioning
systems installed by Landlord or by Tenant at Landlord's request pursuant to
Section 6.01(b).
TENANT INDEMNITEES: Collectively, Tenant, its directors, officers, shareholders,
members, partners, agents and employees.
TENANT WORK: All work installed or furnished to the Premises by Tenant pursuant
to the Workletter.
TENANT'S SHARE: The percentage that represents the ratio of the Rentable Area of
the Premises to the Rentable Area of the Office Portion of the Project, as
determined by Landlord from time to time. The initial Tenant's Share shall be
set forth upon measurement of the Premises pursuant to Section 1.01(9) hereof.
TERM: The term of this Lease commencing on the Commencement Date and expiring on
the Expiration Date.
TERMINATION DATE: The Expiration Date or such earlier date as this Lease
terminates or Tenant's right to possession of the Premises terminates.
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WORKLETTER: The Agreement regarding the manner of completion of Landlord Work
and Tenant Work set forth on Exhibit B attached hereto.
ARTICLE TWO
PREMISES, TERM, FAILURE TO GIVE POSSESSION, AND PARKING
2.01 LEASE OF PREMISES
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the
Premises for the Term and upon the terms, covenants and conditions provided in
this Lease. In the event Landlord delivers possession of the Premises prior to
the Commencement Date, Tenant shall be subject to all of the terms, covenants
and conditions of this Lease (except with respect to the payment of Rent) as of
the date of such possession.
2.02 TERM
(a) The Commencement Date shall be the earlier to occur of (i) the
Projected Commencement Date, or (ii) the date Tenant first occupies the Premises
for the conduct of business. Notwithstanding the foregoing, the Commencement
Date shall be extended on a day-for-day basis to the extent of any delay in the
Substantial Completion of the Tenant Work resulting from any Landlord Delay or
from Force Majeure (but Force Majeure shall not include delays in obtaining
permits).
(b) Within thirty (30) days following the occurrence of the Commencement
Date, Landlord and Tenant shall enter into an agreement (which is attached
hereto as Rider 1) confirming the Commencement and the Expiration Date.
2.03 FAILURE TO GIVE POSSESSION
If the Landlord shall be unable to give possession of the Premises on the
Projected Commencement Date because the Estimated Substantial Completion Date
has not occurred, then Landlord shall not be subject to any liability for the
failure to give possession on said date. Under such circumstances the rent
reserved and covenanted to be paid herein shall not commence until the Premises
are made available to Tenant by Landlord, and no such failure to give possession
on the Projected Commencement Date shall affect the validity of this Lease or
the obligations of the Tenant hereunder. The Lease shall be amended so that the
term shall be extended by the period of time possession is delayed.
Notwithstanding anything to the contrary set forth herein, in the event
possession of the Premises is not delivered to Tenant free of all occupants and
ready for the commencement of Tenant Work within sixty (60) days after the date
this Lease is executed, then Tenant shall have the right at its sole option, to
terminate this Lease by giving written notice thereof to Landlord, in which
event Landlord shall immediately return to Tenant any and all monies and other
deposits (including any letter of credit or other security) provided to Landlord
by Tenant.
2.04 CONDITION OF PREMISES
Tenant and Landlord shall use reasonable efforts to notify the other in writing
within sixty (60) days after the later of Substantial Completion of the Tenant
Improvement Work or when Tenant takes possession of the Premises of any defects
in the Premises claimed by Tenant or Landlord or in the materials or workmanship
furnished in completing the Landlord and/or Tenant Work. Landlord or Tenant, as
the case may be, shall proceed diligently to correct the defects stated in such
notice unless Landlord or Tenant, as the case may be, disputes the existence of
any such defects. In the event of any dispute as to the existence of any such
defects, either party may submit such dispute to binding arbitration in
accordance with the AAA Rules for Commercial Arbitration, provided that such
dispute shall be heard and decided by one arbitrator, not a panel of
arbitrators, for cost- and time-saving purposes. No agreement of Landlord to
alter, remodel, decorate, clean or improve the Premises or the Real Property and
no representation regarding the condition
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of the Premises or the Real Property has been made by or on behalf of Landlord
to Tenant, except as may be specifically stated in this Lease or in the
Workletter.
2.05 PARKING
During the Term, Tenant may use the number of garage and surface lots spaces
specified in Section 1.01(15) for parking at the prevailing rates being charged
from time to time by Landlord or its parking operator to other tenants for
similar parking rights without consideration of any discounts. Tenant may use
fewer than the number of garage and surface lot spaces specified in Section
1.01(15) during the first 12 months of the Term. Commencing on the 13th month of
the Term, in the event Tenant does not pay for any of the specified spaces
during any three month period, Landlord may, at its option, terminate Tenant's
right to use such parking spaces. The locations and type of parking within the
garage and surface lots shall be designated by Landlord or Landlord's parking
operator from time to time. Tenant acknowledges and agrees that the parking
spaces serving the Project may include tandem parking and a mixture of spaces
for compact vehicles as well as full-size passenger automobiles, and that Tenant
shall not use parking spaces for vehicles larger than the striped size of the
parking spaces. All vehicles utilizing Tenant's parking privileges shall
prominently display identification stickers or other markers, and/or have passes
or keycards for ingress and egress, as may be required and provided by Landlord
or its parking operator from time to time. Tenant shall comply with any and all
reasonable, non discriminatory parking rules and regulations from time to time
established by Landlord or Landlord's parking operator, including a requirement
that Tenant pay to Landlord or Landlord's parking operator a charge for loss and
replacement of passes, keycards, identification stickers or markers, and for any
and all loss or other damage caused by persons or vehicles related to use of
Tenant's parking privileges. Tenant shall not allow any vehicles using Tenant's
parking privileges to be parked, loaded or unloaded except in accordance with
this Section, including in the areas and in the manner designated by Landlord or
its parking operator for such activities. If any vehicle is using the parking or
loading areas contrary to any provision of this Section, Landlord or its parking
operator shall have the right, in addition to all other rights and remedies of
Landlord under this Lease, to remove or tow away the vehicle without prior
notice to Tenant, and the cost thereof shall be paid to Landlord within ten (10)
days after notice from Landlord to Tenant.
ARTICLE THREE
RENT
Tenant agrees to pay to Landlord at the first office specified in Section
1.01(2), or to such other persons, or at such other places designated by
Landlord, without any prior demand therefor in immediately available funds and
without any deduction or offset whatsoever, except as otherwise provided herein,
Rent, including Monthly Base Rent and Rent Adjustments in accordance with
Article Four, during the Term, except that the first installment of Monthly Base
rent due shall be paid by Tenant to landlord within five (5) business days of
execution of this Lease. Monthly Base Rent shall be paid monthly in advance on
the first day of each month of the Term. Monthly Base Rent shall be prorated for
partial months within the Term.
ARTICLE FOUR
RENT ADJUSTMENTS AND PAYMENTS
4.01 RENT ADJUSTMENTS
Commencing on the first day of the thirteenth month of the Lease Term, Tenant
shall pay to Landlord Rent Adjustments with respect to each Adjustment Year as
follows:
(i) The Rent Adjustment Deposit representing Tenant's Share of Operating
Expenses for the applicable Adjustment Year in excess of Operating Expenses for
the Operating Expenses Base Year, monthly during the Term with the payment of
Monthly Base Rent; and
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(ii) The Rent Adjustment Deposit representing Tenant's Share of Taxes for
the applicable Adjustment Year in excess of Taxes for the Taxes Base Year,
monthly during the Term with the payment of Monthly Base Rent; and
(iii) Any Rent Adjustments due in excess of the Rent Adjustment Deposits
in accordance with Section 4.02. Rent Adjustments due from Tenant to Landlord
for any Adjustment Year shall be Tenant's Share of Operating Expenses for such
year in excess of Operating Expenses for the Operating Expenses Base Year and
Tenant's Share of Taxes for such year in excess of Taxes for the Taxes Base
Year.
4.02 STATEMENT OF LANDLORD
As soon as feasible after the expiration of the Operating Expenses Base Year and
the Taxes Base Year, and each Adjustment Year thereafter, Landlord will furnish
Tenant a statement ("Landlord's Statement") showing the following with
reasonable breakdown and detail:
(i) Operating Expenses and Taxes for the Operating Expenses Base Year
and Taxes Base Year and thereafter for the last Adjustment Year;
(ii) The amount of Rent Adjustments due Landlord for the last Adjustment
Year, less credit for Rent Adjustment Deposits paid, if any; and
(iii) Any change in the Rent Adjustment Deposit due monthly in the current
Adjustment Year, including the amount or revised amount due for months preceding
any such change pursuant to Landlord's Statement.
Tenant shall pay to Landlord within thirty (30) days after receipt of such
statement any amounts for Rent Adjustments then due in accordance with
Landlord's Statement. Any amounts due from Landlord to Tenant pursuant to this
Section shall be credited to the Rent Adjustment Deposit next coming due, or
refunded to Tenant if the Term has already expired provided Tenant is not in
default hereunder. In the event that Landlord does not pay within the timeframes
established in this Lease, interest shall accrue at the Default Rate on any
amounts that Landlord is obligated to pay, credit or refund to Tenant by reason
of this Section 4.02 or any other provision of this Lease. Landlord will deliver
Landlord's Statement on or before April 1 of each applicable year. Landlord
shall have the right to adjust said Statement after submission to Tenant only
for cost items which it reasonably could not have known accurately at the time
of the Statement's original submission. Such a restatement shall not constitute
a waiver or release of Tenant's obligations to pay such amounts. The Rent
Adjustment Deposit shall be credited against Rent Adjustments due for the
applicable Adjustment Year. During the last complete calendar year or during any
partial calendar year in which the Lease terminates, Landlord may include in the
Rent Adjustment Deposit its estimate of Rent Adjustments which may not be
finally determined until after the termination of this Lease. Tenant's
obligation to pay Rent Adjustments survives the expiration or termination of the
Lease. Notwithstanding the foregoing, in no event shall the sum of Monthly Base
Rent and the Rent Adjustments be less than the Monthly Base Rent payable.
4.03 BOOKS AND RECORDS
Landlord shall maintain books and records showing Operating Expenses and Taxes
in accordance with generally accepted accounting principles, consistently
applied. The Tenant or its representative (which representative shall be a
certified public accountant licensed to do business in the state in which the
Property is located and whose primary business is certified public accounting)
shall have the right, for a period of sixty (60) days following the date upon
which Landlord's Statement is delivered to Tenant, to examine the Landlord's
books and records with respect to the items in the foregoing statement of
Operating Expenses and Taxes during normal business hours, upon written notice,
delivered at least three (3) business days in advance. If Tenant does not object
in writing to Landlord's Statement within thirty (30) days after
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the above-mentioned (60)-day review period, specifying the nature of the item in
dispute and the reasons therefor, then Landlord's Statement shall be considered
final and accepted by Tenant. Any amount due to the Landlord as shown on
Landlord's Statement, whether or not disputed by Tenant as provided herein,
shall be paid by Tenant when due as provided above. If Tenant has objected to
the validity of Landlord's Statement per the above, Landlord agrees, upon
Tenant's written request, to hold Tenant's payment in interest-bearing escrow
pending resolution of the dispute. If Landlord restates its Statement as
described in 4.02 above, Tenant shall have a like amount of time as outlined
above to review Landlord's books and records following the receipt of the
restatement.
4.04 PARTIAL OCCUPANCY
For purposes of determining Rent Adjustments, if the Building is not fully
occupied during all or a portion of any year during the Term (including the Base
Year), Landlord shall make appropriate adjustments to the Operating Expenses for
such year employing sound accounting and management principles consistently
applied, to determine the amount of Operating Expenses that would have been paid
or incurred by Landlord had the Building been fully occupied, and the amount so
determined shall be deemed to have been the amount of Operating Expenses for
such year. In the event that the Real Property is not fully assessed for all or
a portion of any year (including the Base Year) during the Term, then Taxes
shall be adjusted to an amount which would have been payable in such year if the
Real Property had been fully assessed. In the event any other tenant in the
Building provides itself with a service of a type which Landlord would supply
under the Lease without an additional or separate charge to Tenant, then
Operating Expenses shall be deemed to include the cost Landlord would have
incurred had Landlord provided such service to such other tenant.
4.05 TENANT OR LEASE SPECIFIC TAXES
In addition to Monthly Base Rent, Rent Adjustments, Rent Adjustment Deposits and
other charges to be paid by Tenant, Tenant shall pay to Landlord, upon demand,
any and all taxes payable by Landlord (other than federal or state inheritance,
general income, gift or estate taxes) whether or not now customary or within the
contemplation of the parties hereto: (a) upon, allocable to, or measured by the
Rent payable hereunder, including any gross receipts tax or excise tax levied by
any governmental or taxing body with respect to the receipt of such rent; or (b)
upon or with respect to the possession, leasing, operation, management,
maintenance, alteration, repair, use or occupancy by Tenant of the Premises or
any portion thereof; or (c) upon the measured value of Tenant's personal
property located in the Premises or in any storeroom or any other place in the
Premises or the Property, or the areas used in connection with the operation of
the Property, it being the intention of Landlord and Tenant that, to the extent
possible, such personal property taxes shall be billed to and paid directly by
Tenant; (d) resulting from Tenant Work or Tenant Alterations to the Premises,
whether title thereto is in Landlord or Tenant; or (e) upon this transaction.
Taxes paid by Tenant pursuant to this Section 4.05 shall not be included in any
computation of Taxes payable pursuant to Sections 4.01 and 4.02.
ARTICLE FIVE
SECURITY DEPOSIT
Tenant concurrently with the execution of this Lease shall pay to Landlord in
immediately available funds (or approved letter of credit, as described in
Section 1.01(10) hereof) the Security Deposit. The Security Deposit may be
applied by Landlord to cure, in whole or part, any default of Tenant under this
Lease, and upon notice by Landlord of such application, Tenant shall replenish
the Security Deposit in full by paying to Landlord within ten (10) days of
demand the amount so applied. Landlord's application of the Security Deposit
shall not constitute a waiver of Tenant's default to the extent that the
Security Deposit does not fully compensate Landlord for all losses, damages,
costs and expenses incurred by Landlord in connection with such default and
shall not prejudice any other rights or remedies available to Landlord under
this Lease or by Law. Landlord shall not pay any interest on the Security
Deposit. Landlord shall not be required to keep
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the Security Deposit separate from its general accounts. The Security Deposit
shall not be deemed an advance payment of Rent or a measure of damages for any
default by Tenant under this Lease, nor shall it be a bar or defense of any
action that Landlord may at any time commence against Tenant. In the absence of
evidence satisfactory to Landlord of an assignment of the right to receive the
Security Deposit or the remaining balance thereof, Landlord may return the
Security Deposit to the original Tenant, regardless of one or more assignments
of this Lease. Upon the transfer of Landlord's interest under this Lease,
Landlord's obligation to Tenant with respect to the Security Deposit shall
terminate upon transfer to the transferee of the Security Deposit, or any
balance thereof, provided that such transferee assumes for Tenant's benefit in
an agreement reasonably acceptable to Tenant, all of Landlord's obligations
under this Lease, including with regard to the Security Deposit. If Tenant shall
fully and faithfully comply with all the terms, provisions, covenants, and
conditions of this Lease, the Security Deposit, or any balance thereof, shall be
returned to Tenant within thirty (30) days after Landlord recovers possession of
the Premises or such longer time as may be permissible under Law.
ARTICLE SIX
SERVICES
6.01 LANDLORD'S GENERAL SERVICES
(a) Landlord shall furnish the following services:
(1) heat, ventilation and air-conditioning ("HVAC") in the Premises
during Standard Operating Hours as necessary for the comfortable occupancy of
the Premises under normal business office operations, subject to compliance with
all applicable mandatory regulations and Laws;
(2) tempered and cold water for use in lavatories in common with
other tenants from the regular supply of the Building;
(3) customary cleaning and janitorial services in the Premises five
(5) days per week, excluding National Holidays;
(4) washing of the outside windows in the Premises weather
permitting at reasonable intervals determined by Landlord; and
(5) automatic passenger and swing/freight elevator service in common
with other tenants of the Building. Freight elevator service will be subject to
reasonable scheduling by Landlord.
(b) If Tenant uses heat generating machines or equipment in the Premises
to an extent which adversely affects the temperature otherwise maintained by the
air-cooling system or whenever the occupancy or electrical load adversely
affects the temperature otherwise maintained by the air-cooling system, Landlord
reserves the right to install or to require Tenant to install supplementary air-
conditioning units in the Premises. Tenant shall bear all reasonable costs and
expenses related to the installation, maintenance and operation of such units.
6.02 ELECTRICAL SERVICES
(a) Landlord shall furnish to the Premises Tenant's pro-rata share of the
Building's available electric current (which, for purposes of this Lease shall
be deemed to be seven (7) ▇▇▇▇▇ per usable square foot of the Premises, on a
diversified usage basis) for general business office use, including normal
lighting, normal business office machines and customary janitorial service.
Notwithstanding any provision of the Lease to the contrary, without, in each
instance, the prior written approval of Landlord, in Landlord's prudent business
judgment, Tenant shall not make any alterations or additions to the electric
equipment or systems. Tenant's use of electric current shall at no time exceed
the capacity of the wiring, feeders and risers
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providing electric current to the Premises or the Building. The consent of
Landlord to the installation of electric equipment shall not relieve Tenant from
the obligation to limit usage of electricity to no more than such capacity.
(b) If and to the extent electric current is furnished to the Premises in
excess of the amount of electric current required to be provided by Landlord as
described in Section 6.02(a), Tenant shall pay Landlord upon notice from
Landlord the actual cost of such excess electric current, as additional Rent.
The cost of such excess use and all additional costs separately billed to Tenant
pursuant to this Section shall not be included as part of Operating Expenses. At
any time and from time to time, Landlord may in its sole discretion either (i)
install one or more meters to measure electric current furnished to the Premises
or (ii) reasonably estimate electric current furnished to the Premises. Upon
notice from Landlord, Tenant shall pay Landlord the actual cost of installing
and maintaining all such meters and of any electrical engineering or consulting
firm, if Landlord retains such firm to estimate the electric current furnished
to the Premises in lieu of installation of a meter. Tenant shall pay Landlord
for such excess electric current at the then current, actual rates charged to
Landlord for such electricity provided to the Property by the utility provider
chosen by Landlord plus any additional actual cost of Landlord in keeping
account of the electric current so consumed. Landlord's notice shall specify
whether such excess use shall be payable (i) in advance as reasonably estimated
by Landlord in monthly installments at the time prescribed for monthly
installments of Monthly Base Rent or (ii) within thirty (30) days after notice
from Landlord given from time to time of the amount due for prior excess use as
metered or reasonably estimated by Landlord.
(c) Landlord shall furnish to the Premises replacement lamps, bulbs,
ballasts and starters used in any normal Building lighting installed in the
Premises, except that if the replacement or repair of such items is a result of
negligence of Tenant, its employees, agents, servants, licensees, subtenants,
contractors or invitees, such cost shall be paid by Tenant within thirty (30)
days after notice from Landlord and shall not be included as part of Operating
Expenses.
6.03 ADDITIONAL AND AFTER-HOUR SERVICES
At Tenant's written request, Landlord shall furnish additional quantities of any
of the services or utilities specified in Section 6.01, if Landlord can
reasonably do so, on the terms set forth herein. For services or utilities
requested by Tenant and furnished by Landlord, Tenant shall pay to Landlord as a
charge therefor Landlord's then current, actual cost thereof from time to time
for such services and utilities. Without limiting the generality of the
foregoing, for HVAC service beyond Standard Operating Hours, Landlord's
prevailing rate as of the date of this Lease includes a one (1) hour minimum per
activation. If Tenant shall fail to make any such payment within thirty (30)
days Landlord may, upon notice to Tenant and in addition to Landlord's other
remedies under this Lease, discontinue any or all of such additional services.
6.04 TELEPHONE SERVICES
All telegraph, telephone, and communication connections which Tenant may desire
shall be subject to Landlord's prior written approval, in Landlord's reasonable
discretion, and the location of all wires and the work in connection therewith
shall be performed by contractors reasonably approved by Landlord and shall be
subject to the direction of Landlord, except that such approval is not required
as to Tenant's telephone equipment (including cabling) within the Premises and
from the Premises in a route designated by Landlord to any telephone cabinet or
panel provided (as existing or as installed as part of Landlord's Work, if any)
on Tenant's floor for Tenant's connection to the telephone cable serving the
Building so long as Tenant's equipment does not require connections different
than or additional to those to the telephone cabinet or panel provided. Tenant
shall be responsible for and shall pay all costs incurred in connection with the
installation of its telephone cables and communication wiring in the Premises,
including any hook-up, access and maintenance fees related to the installation
of such wires and cables in the Premises and the commencement of service
therein, and the maintenance thereafter of such wire and cables; and there shall
be included in Operating Expenses for the Building all installation, removal,
hook up or maintenance costs
13
incurred by Landlord in connection with telephone cables and communication
wiring serving the Building which are not allocable to any individual users of
such service but are allocable to the Building generally. If Tenant fails to
maintain all of its telephone cables and communication wiring in the Premises
and such failure affects or interferes with the operation or maintenance of any
other telephone cables or communication wiring serving the Building, Landlord or
any vendor hired by Landlord may enter into and upon the Premises forthwith and
perform such repairs, restorations or alterations as Landlord deems necessary in
order to eliminate any such interference (an Landlord may recover from Tenant
all of Landlord's costs in connection therewith). If required by Landlord, no
later than the Termination Date Tenant shall remove all telephone cables and
communication wiring installed by Tenant for and during Tenant's occupancy.
Tenant agrees that neither Landlord nor any of its agents or employees shall be
liable to Tenant, or any of Tenant's employees, agents, customers or invitees or
anyone claiming through, by or under Tenant, for any damages, injuries, losses,
expenses, claims or causes of action because of any interruption, diminution,
delay or discontinuance at any time for any reason in the furnishing of any
telephone or other communication service to the Premises and the Building except
to the extent caused by the grossly negligent acts of Landlord, its contractors,
agents or employees.
Landlord agrees to use reasonable efforts to utilize Tenant as a provider for
DSL internet services for any internet connections Landlord requires for its own
personal use in the Building. Such agreement shall be subject to Tenant's
ability to provide adequate services and to charge a market rate therefore.
6.05 DELAYS IN FURNISHING SERVICES
Except to the extent caused by the grossly negligent or intentional acts of
Landlord, its contractors, agents or employees, Tenant agrees that Landlord
shall not be in breach of this Lease nor be liable to Tenant for damages or
otherwise, for any failure to furnish, or a delay in furnishing, or a change in
the quantity or character of any service when such failure, delay or change is
occasioned, in whole or in part, by repairs, improvements or mechanical
breakdowns by the act or default of Tenant or other parties or by an event of
Force Majeure. No such failure, delay or change shall be deemed to be an
eviction or disturbance of Tenant's use and possession of the Premises, or
relieve Tenant from paying Rent or from performing any other obligations of
Tenant under this Lease, without any deduction or offset, except as specifically
specified in the next sentences. In the event of a disruption of any services
required to be provided to Tenant under this Lease, which disruption can
reasonably be shown to materially impair or interfere with Tenant carrying on
its business in any part of the Premises, Landlord shall provide a day-for-day
abatement of Rent in proportion to the portion of Tenant's Premises which is
reasonably unsuitable for conduct of Tenant's business as a direct result of
such disruption. Such abatement shall require Tenant to first give Landlord
written notice of the problem and demand to reasonably remedy same, and the
abatement shall commence only after three (3) business days after such Tenant
notice to Landlord and Landlord's failure to remedy within the three business
day period. Except to the extent caused by the gross negligence or intentional
acts of Landlord, its contractors, agents or employees, failure to any extent to
make available, or any slowdown, stoppage, or interruption of, the specified
utility services resulting from any cause, including changes in service provider
or Landlord's compliance with any mandatory governmental requirements now or
hereafter published or any requirements now r hereafter established by any
governmental agency, board, or bureau having jurisdiction over the operation of
the Property shall not render Landlord liable in any respect for damages to
either persons, property, or business, nor be construed as an eviction of Tenant
or work an abatement of Rent, nor relieve Tenant of Tenant's obligations for
fulfillment of any covenant or agreement hereof, and except as otherwise
provided herein. Should any equipment or machinery furnished by Landlord break
down or for any cause cease to function properly, Landlord shall use reasonable
diligence to repair same promptly.
6.06 CHOICE OF SERVICE PROVIDER
Tenant acknowledges that Landlord may, at Landlord's sole option, to the extent
permitted by applicable law, elect to change, from time to time, the company or
companies which provide services (including
14
electrical service, gas service, water, telephone and technical services) to the
Building, the Premises and/or its occupants. Notwithstanding anything to the
contrary set forth in this Lease, Tenant acknowledges that Landlord has not and
does not make any representations or warranties concerning the identity or
identifies of the company or companies which provide services to the Building
and the Premises or its occupants and Tenant acknowledges that the choice of
service providers and matters concerning the engagement and termination thereof
shall be solely that of Landlord. The foregoing provision is not intended to
modify, amend, change or otherwise derogate any provision of this Lease
concerning the nature or type of service to be provided or any specific
information concerning the amount thereof to be provided. Tenant agrees to
reasonably cooperate with Landlord and each of its service providers in
connection with any change in service or provider, provided that Landlord shall
effect any such change at no unreasonable cost or expense to Tenant.
6.07 SIGNAGE
Initial Building standard signage will be installed by Landlord in the directory
in the main lobby of the Building, in the listing of tenants in the elevator
lobby for the floor on which the Premises is located and at Tenant's main entry
door to the Premises at Tenant's sole cost and expense except to the extent that
funds are available out of any Landlord's Maximum Contribution, if any, provided
pursuant to the Workletter. In addition, Tenant will have the right, at its sole
cost and expense, to install non-exclusive signage on a common monument in the
main courtyard of the Building. Tenant must submit the design of the proposed
monument signage to Landlord's for its approval, which may be given or withheld
in the good faith exercise of Landlord's discretion. Any change in such initial
signage shall be only with Landlord's prior written consent, shall conform to
Building standard signage and shall be at Tenant's sole cost and expense.
Any time in which Tenant personally occupies the entirety of the Building's 5th
floor, it shall have the right to install signage in the 5th floor elevator
lobby, subject to Landlord's reasonable approval of the design thereof. At any
time that Tenant personally occupies over 50% of the rentable square footage of
the Building, Tenant shall also have the right to install non-exclusive signage
on the west exterior face of the Building. The size, specific location and
design of such signage shall be subject to Landlord's reasonable approval.
Notwithstanding the forgoing, if at any time during Ask Jeeves' lease term Ask
Jeeves forfeits its right to exterior signage pursuant to its lease, Tenant
shall be given the same rights for exterior signage that Ask Jeeves has been
given as of the date of this Lease.
ARTICLE SEVEN
POSSESSION, USE AND CONDITION OF PREMISES
7.01 POSSESSION AND USE OF PREMISES
(a) Tenant shall be entitled to possession of the Premises upon execution
of this Lease. Tenant acknowledges that Landlord may be completing final
punchlist and clean-up work on the Premises during the month of June, 1999, but
if such work materially impedes Tenant from reasonable conduct of its Tenant
Improvement Work, the period of such delay shall constitute a Landlord Delay.
Tenant shall occupy and use the Premises only for the uses specified in Section
1.01(14) to conduct Tenant's business. Tenant shall not occupy or use the
Premises (or permit the use or occupancy of the Premises) for any purpose or in
any manner which: (1) is unlawful or in violation of any Law or Environmental
Law; (2) may be dangerous to persons or property or which may increase the cost
of, or invalidate, any policy of insurance carried on the Building or covering
its operations; (3) is contrary to or prohibited by the terms and conditions of
this Lease or the rules of the Building set forth in Article Eighteen; or (4)
would tend to create or continue a nuisance.
(b) Tenant shall comply with all Environmental Laws pertaining to Tenant's
occupancy and use of the Premises and concerning the proper storage, handling
and disposal of any Hazardous Material introduced to the Premises, the Building
or the Property by Tenant or its employees, servants, agents, contractors,
customers or invitees. Landlord shall comply with all Environmental Laws
applicable to the
15
Property other than those to be complied with by Tenant pursuant to the
preceding sentence. Tenant shall not generate, store, handle or dispose of any
Hazardous Material in, on, or about the Property without the prior written
consent of Landlord, which may be withheld in Landlord's sole discretion, except
that such consent shall not be required to the extent of Hazardous Material
contained in office products for use in general business offices in quantities
for ordinary day-to-day use or Hazardous Materials necessary for the operation
and maintenance of the generator provided such use does not give rise to an
unreasonable risk of release of Hazardous Material. In the event that Tenant is
notified of any investigation or violation of any Environmental Law arising from
Tenant's activities at the Premises, Tenant shall immediately deliver to
Landlord a copy of such notice. In such event or in the event Landlord
reasonably believes that a violation of Environmental Law for which Tenant is
responsible exists, Landlord may conduct such tests and studies relating to
compliance by Tenant with Environmental Laws or the alleged presence of
Hazardous Materials upon the Premises as Landlord deems reasonably necessary,
all of which shall be completed at Tenant's expense. Landlord's inspection and
testing rights are for Landlord's own protection only, and Landlord has not, and
shall not be deemed to have assumed any responsibility to Tenant or any other
party for compliance with Environmental Laws, as a result of the exercise, or
non-exercise of such rights. Tenant hereby indemnifies, and agrees to defend,
protect and hold harmless, the Landlord Indemnitees from any and all loss,
claim, demand, action, expense, liability and cost (including attorneys' fees
and expenses) arising out of or in any way related to the presence of any
Hazardous Material introduced to the Premises during the Lease Term by Tenant,
its agents, contractors or employees. If any Hazardous material is released,
discharged, or disposed of on or about the Property and such release, discharge
or disposal is not caused by Tenant or other occupants of the Premises, or their
employees, servants, agents contractors, customers or invitees, such release,
discharge or disposal shall be deemed casualty damage under Article Fourteen to
the extent the Premises are affected thereby; in such case, Landlord and Tenant
shall have the obligations and rights respecting such casualty damage provided
under such Article. In case of any action or proceeding brought against the
Landlord Indemnitees by reason of any such claim, upon notice from Landlord,
Tenant covenants to defend such action or proceeding by counsel chosen by
Landlord, in Landlord's reasonable discretion.
Landlord represents and warrants to Tenant that there are no Hazardous
Materials in, on, under, about, or migrating from or to the Premises, Building
or the Property that would unreasonably impair, restrict or prevent Tenant's use
and quiet enjoyment of the Premises, Building or Project, and that neither the
Property nor the Landlord nor, to the best knowledge of the Landlord, any of
Landlord's tenants are in violation of or subject to any existing, pending, or
threatened investigation by any governmental authority under any applicable
Environmental Law or under any other Law pertaining to air or water quality, the
handling, transportation, storage, treatment, usage, presence, disposal or
release of Hazardous Materials, air emissions, other environmental matters, or
any zoning or other land use matters. If any Hazardous Material is present in
the Premises, the Building or the Project for any reason other than the acts of
Tenant and Tenant's agents, employees and contractors, then Landlord shall
indemnify, defend, protect and hold the Tenant Indemnitees harmless from any and
all claims, judgments, damages, penalties, fines, costs, liabilities or losses
arise at any time, including after the expiration of the lease term, in
connection with or arising out of the presence of such Hazardous Material. This
indemnification of Tenant Indemnitees by Landlord includes, without limitation,
costs incurred in connection with any investigation of site conditions or any
clean-up, remedial, removal or restoration work required by any federal, state
or local governmental agency or political subdivision because of Hazardous
Material present in the Premises, the Building or the Project. Without limiting
the foregoing, if for any reason other than the acts of Tenant and Tenant's
agents, employees and contractors, Hazardous Material is present in the
Premises, the Building or the Project and such violates applicable laws,
Landlord shall promptly take all actions at its sole expense as are necessary to
remove or remediate such Hazardous Material to comply with all applicable laws
and restore the Premises, Building and Project to the condition existing prior
to the removal of any such Hazardous Material; provided that with respect to the
Premises Tenant's approval of such actions shall first be obtained, which
approval shall not be unreasonably withheld
16
(c) Landlord and Tenant acknowledge that the Americans With Disabilities
Act of 1990 (42 U.S.C. Section 12101 et seq.) and regulations and guidelines
promulgated thereunder, as all of the same may be amended and supplemented from
time to time (collectively referred to herein as the "ADA") establish
requirements for business operations, accessibility and barrier removal, and
that such requirements may or may not apply to the Premises, the Building and
the Project depending on, among other things: (1) whether Tenant's business is
deemed a "public accommodation" or "commercial facility", (2) whether such
requirements are "readily achievable", and (3) whether a given alteration
affects a "primary function area" or triggers "path of travel" requirements. The
parties hereby agree that: (a) Landlord shall be responsible for ADA Title III
compliance in the Common Areas, except as provided below, (b) Tenant shall be
responsible for ADA Title III compliance in the Premises, including any
leasehold improvements or other work to be performed in the Premises under or in
connection with this Lease, to the extent required solely due to Tenant's
particular use of the Premises, if any, for other than general office purposes,
and (c) Landlord may perform, or require that Tenant perform, and Tenant shall
be responsible for the cost of, ADA Title III "path of travel" requirements
triggered by Tenant Alterations in the Premises (but not any compliance
triggered by the initial improvements constructed in accordance with the Work
Letter). Landlord represents and warrants to Tenant that as of the date hereof
and as of the Commencement Date the Project does and shall comply with all Laws,
including, without limitation, the ADA.
7.02 LANDLORD ACCESS TO PREMISES; APPROVALS
(a) Tenant shall permit Landlord to erect, use and maintain pipes, ducts,
wiring and conduits in and through the Premises, so long as Tenant's use, layout
or design of the Premises is not materially affected or altered. Landlord or
Landlord's agents shall have the right to enter upon the Premises in the event
of an emergency, or to inspect the Premises, to perform janitorial and other
services, to conduct safety and other testing in the Premises and to make such
repairs, alterations, improvements or additions to the Premises or the Building
or other parts of the Property as Landlord may deem necessary or desirable
(including all alterations, improvements and additions in connection with a
change in service provider or providers). Janitorial and cleaning services shall
be performed after normal business hours. Any entry or work by Landlord may be
during normal business hours and Landlord may use reasonable efforts to ensure
that any entry or work shall not materially interfere with Tenant's occupancy of
the Premises.
(b) If Tenant shall not be personally present to permit an entry into the
Premises when for any reason an entry therein shall be necessary or permissible,
Landlord (or Landlord's agents), after attempting to notify Tenant (unless
Landlord believes an emergency situation exists), may enter the Premises without
rendering Landlord or its agents liable therefor, and without relieving Tenant
of any obligations under this Lease.
(c) Landlord may enter the Premises for the purpose of conducting such
reasonable inspections, tests and studies as Landlord may deem desirable or
necessary to confirm Tenant's compliance with all Laws and Environmental Laws or
for other purposes necessary in Landlord's reasonable judgment to ensure the
sound condition of the Property and the systems serving the Property. Landlord's
rights under this Section 7.02(c) are for Landlord's own protection only, and
Landlord has not, and shall not be deemed to have assumed, any responsibility to
Tenant or any other party as a result of the exercise or non-exercise of such
rights, for compliance with Laws or Environmental Laws or for the accuracy or
sufficiency of any item or the quality or suitability of any item for its
intended use.
(d) Landlord may do any of the foregoing, or undertake any of the
inspection or work described in the preceding paragraphs without such action
constituting an actual or constructive eviction of Tenant, in whole or in part,
or giving rise to an abatement of Rent by reason of loss or interruption of
business of the Tenant, or otherwise. Notwithstanding anything to the contrary
in this Lease, no changes, revisions, additions to, subtractions from,
rearrangements of, alterations, modifications, or supplements of or to,
walkways, driveways, parking areas, common areas, vertical or horizontal
transportation systems or rentable floor area may be made if they would (a)
materially change the size or location of the Premises, (b)
17
adversely affect access to the Premises, or (c) materially reduce the ratio of
parking spaces to usable square feet below the ratio specified in Section
1.01(15). In addition, notwithstanding anything to the contrary herein, in the
event that Landlord needs to enter the Premises for the purposes of repairing
any item that Landlord is obligated or entitled to repair or for any other
purpose, then Landlord is required to provide Tenant with reasonable advance
notice (except in the case of an emergency in which event only oral notice shall
be required) of Landlord's intention to enter the Premises for the purpose of
performing such repairs. In performing any such repairs, Landlord shall use
reasonable efforts to minimize interference with Tenant's business and to
exercise such rights during non-business hours.
(e) The review, approval or consent of Landlord with respect to any item
required or permitted under this Lease is for Landlord's own protection only,
and Landlord has not, and shall not be deemed to have assumed, any
responsibility to Tenant or any other party, as a result of the exercise or non-
exercise of such rights, for compliance with Laws or Environmental Laws or for
the accuracy or sufficiency of any item or the quality or suitability of any
item for its intended Use.
(f) Landlord acknowledges that Tenant will have one or more secure rooms
in which no janitorial service will be provided by Landlord and which will only
be accessible by Landlord in emergency situations or with specific advance
approval by Tenant, which approval shall not be reasonably withheld or delayed.
(g) Landlord agrees to make reasonable efforts to give advance notice of
the timing of fire drills and to reasonably attempt to coordinate the timing of
fire drills with Tenant at mutually convenient times.
(h) Landlord will make reasonable efforts to provide advance notice (at
least one full business day) to Tenant when it requires non-emergency access to
the Premises.
7.03 QUIET ENJOYMENT
Landlord covenants, in lieu of any implied covenant of quiet possession or quiet
enjoyment, that so long as Tenant is in compliance with the covenants and
conditions set forth in this Lease, Tenant shall have the right to quiet
enjoyment of the Premises without hindrance or interference from Landlord or
those claiming through Landlord, and subject to the covenants and conditions set
forth in the Lease.
ARTICLE EIGHT
MAINTENANCE
8.01 LANDLORD'S MAINTENANCE
Subject to the provisions of Articles Four and Fourteen, Landlord shall maintain
and make necessary repairs to the foundations, roofs, exterior walls, and the
structural elements of the Building, the electrical, plumbing, heating,
ventilating, air-conditioning, mechanical, communication, Security and the fire
and life safety systems of the Building and those corridors, washrooms and
lobbies which are Common Areas of the Building, except that: (a) Landlord shall
not be responsible for the maintenance or repair of any floor or wall coverings
in the Premises, and (b) the cost of performing any of said maintenance or
repairs whether to the Premises or to the Building caused by the gross
negligence of Tenant, its employees, agents, servants, licensees, subtenants,
contractors or invitees, shall be paid by Tenant, subject to the waivers set
forth in Section 16.04.
8.02 TENANT'S MAINTENANCE
Subject to the provisions of Article Fourteen, and provided that Tenant shall
not be responsible for the cost of performing any maintenance or repairs,
whether to the Premises or to the Building, caused by the gross negligence of
Landlord, its employees, agents, servants, licensees, subtenants, contractors or
invitees (all of
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which shall be at Landlord's sole cost), Tenant, at its expense, shall keep and
maintain the interior, non-structural portions of the Premises and all Tenant
Additions in good order, condition and repair subject to ordinary wear and tear,
damage due to casualty and condemnation. Tenant shall not permit waste and shall
promptly and adequately repair all damages to the Premises and replace or repair
all damaged or broken glass in the interior of the Premises, fixtures or
appurtenances. Any repairs or maintenance shall be completed with materials of
good quality. Any such repairs or maintenance shall be performed only by
contractors or mechanics approved by Landlord, which approval shall not be
unreasonably withheld, and whose work will not cause or threaten to cause
disharmony or interference with Landlord or other tenants in the Building and
their respective agents and contractors performing work in or about the
Building. If Tenant fails to perform any of its obligations set forth in this
Section 8.02, Landlord may, in its sole discretion following such notice and
cure period as specified in Section 11.01(ii), (except without notice in the
case of emergencies), perform the same, and Tenant shall pay to Landlord any
reasonable and actual costs or expenses incurred by Landlord within thirty (30)
days of demand.
ARTICLE NINE
ALTERATIONS AND IMPROVEMENTS
9.01 TENANT ALTERATIONS
(a) Except for completion of Tenant Work undertaken by Tenant pursuant to
the Workletter, the following provisions shall apply to the completion of any
Tenant Alterations:
(1) Tenant shall not, except as provided herein, without the prior
written consent of Landlord, which consent shall not be reasonably withheld,
make or cause to be made any Tenant Alterations in or to the Premises or any
Property systems serving the Premises. Prior to making any Tenant Alterations,
Tenant shall give Landlord ten (10) days prior written notice (or such earlier
notice as would be necessary pursuant to applicable Law) to permit Landlord
sufficient time to post appropriate notices of non-responsibility. Subject to
all other requirements of this Article Nine, Tenant may undertake Decoration
work without Landlord's prior written consent. Tenant shall furnish Landlord
with the names and addresses of all contractors and subcontractors. All Tenant
Alterations shall be completed only by contractors or mechanics approved by
Landlord, which approval shall not be unreasonably withheld, provided, however,
that Landlord may, in its sole discretion, specify the engineers and contractors
to perform all work relating to the Building's systems (including the
mechanical, heating, plumbing, security, ventilating, air-conditioning,
electrical, communication and the fire and life safety systems in the Building).
The contractors, mechanics and engineers who may be used are further limited to
those whose work will not cause or threaten to cause disharmony or interference
with Landlord or other tenants in the Building and their respective agents and
contractors performing work in or about the Building. Landlord may further
condition its consent upon Tenant furnishing to Landlord and Landlord approving
prior to the commencement of any work or delivery of materials to the Premises
related to the Tenant Alterations such of the following as specified by
Landlord: architectural plans and specifications for work requiring a building
permit, opinions from Landlord's engineers stating that the Tenant Alterations
will not adversely affect the Building's systems, necessary permits and
licenses, certificates of insurance and such other documents in such form as may
be reasonably requested by Landlord. Landlord may, in the exercise of reasonable
judgment, request that Tenant provide Landlord with appropriate evidence of
Tenant's ability to complete and pay for the completion of the Tenant
Alterations such as a performance bond or letter of credit. Upon completion of
the Tenant Alterations, Tenant shall deliver to Landlord an as-built mylar and
digitized (if available) set of plans and specifications for the Tenant
Alterations. Notwithstanding the foregoing, Tenant shall have the right, without
advance approval by Landlord, to make Alterations that cost less than $100,000
so long as such Alterations in no way involve the Building's structural,
mechanical, electrical or HVAC systems nor the existing layout of hard walls nor
require a permit within the Premises. Any such Alterations will require notice
to Landlord and shall be conducted pursuant to prudent construction practices,
and the Rules and Regulations established in this Lease.
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(2) Tenant shall pay the cost of all Tenant Alterations and the cost
of decorating the Premises and any work to the Property occasioned thereby. Upon
Landlord's request following completion of Tenant Alterations, Tenant shall
furnish Landlord with contractors' affidavits and full and final waivers of lien
and receipted bills covering all labor and materials expended and used in
connection therewith and such other documentation reasonably requested by
Landlord or Mortgagee.
(3) Tenant agrees to complete all Tenant Alterations (i) in
accordance with all Laws, Environmental Laws, all requirements of applicable
insurance companies and in accordance with Landlord's standard construction
rules and regulations, and (ii) in a good and workmanlike manner with the use of
good grades of materials. Tenant shall notify Landlord immediately if Tenant
receives any notice of violation of any Law in connection with completion of any
Tenant Alterations and shall immediately take such steps as are necessary to
remedy such violation. In no event shall such supervision or right to supervise
by Landlord nor shall any approvals given by Landlord under this Lease
constitute any warranty by Landlord to Tenant of the adequacy of the design,
workmanship or quality of such work or materials for Tenant's intended use or of
compliance with the requirements of Section 9.01(a)(3)(i) and (ii) above or
impose any liability upon Landlord in connection with the performance of such
work.
(b) All Tenant Alterations or Additions, whether installed by Landlord or
Tenant, shall without compensation or credit to Tenant, become part of the
Premises and the property of Landlord upon expiration of this Lease, and shall
remain in the Premises, unless pursuant to Article Twelve, Tenant may remove
them or is required to remove them at Landlord's request. At the time of
Landlord's approval of any Tenant Additions, Landlord agrees to specify which if
any components of the Alterations or Additions it will require Tenant to remove
upon the expiry of the Lease as described in Section 12.01 hereof and if
Landlord does not so specify, Tenant shall not be required to remove such
Alterations or Additions.
9.02 LIENS
Tenant shall not permit any lien or claim for lien of any mechanic, laborer or
supplier or any other lien to be filed against the Building, the Land, the
Premises, or any other part of the Property arising out of work performed, or
alleged to have been performed by, or at the direction of, or on behalf of
Tenant. If any such lien or claim for lien is filed, Tenant shall within ten
(10) days of receiving notice of such lien or claim (a) have such lien or claim
for lien released of record or (b) deliver to Landlord a bond in form, content,
amount, and issued by surety, reasonably satisfactory to Landlord, bonding
and/or removing from record title such lien or claim for lien and the
foreclosure or attempted foreclosure thereof. If Tenant fails to take any of the
above actions, Landlord, in addition to its rights and remedies under Article
Eleven, without investigating the validity of such lien or claim for lien, may
pay or discharge the same and Tenant shall, as payment of additional Rent
hereunder, reimburse Landlord upon demand for the amount so paid by Landlord,
including Landlord's expenses and attorneys' fees.
ARTICLE TEN
ASSIGNMENT AND SUBLETTING
10.01 ASSIGNMENT AND SUBLETTING
(a) Without the prior written consent of Landlord, which consent shall not
be unreasonably withheld nor delayed, Tenant may not sublease, assign, mortgage,
pledge, hypothecate or otherwise transfer or permit the transfer of this Lease
or the encumbering of Tenant's interest therein in whole or in part, by
operation of Law or otherwise or permit the use or occupancy of the Premises, or
any part thereof, by anyone other than Tenant, provided, however, if Landlord
chooses not to recapture the space proposed to be subleased or assigned as
provided in Section 10.02, Landlord shall not unreasonably withhold its consent
to a subletting or assignment under this Section 10.01. Tenant agrees that the
provisions governing sublease and assignment set forth in this Article Ten shall
be deemed to be reasonable. If Tenant desires to enter into any sublease of the
Premises or assignment of this Lease, Tenant shall deliver written notice
thereof to
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Landlord ("Tenant's Notice"), together with the identity of the proposed
subtenant or assignee and the proposed principal terms thereof and, upon
Landlord's request, financial and other information sufficient for Landlord to
make an informed judgment with respect to such proposed subtenant or assignee at
least thirty (30) days prior to the commencement date of the term of the
proposed sublease or assignment. If Tenant proposes to sublease less than all of
the Rentable Area of the Premises, the space proposed to be sublet and the space
retained by Tenant must each be a marketable unit as reasonably determined by
Landlord and otherwise in compliance with all Laws. Landlord shall notify Tenant
in writing of its approval or disapproval of the proposed sublease or assignment
or its decision to exercise its rights under Section 10.02 within fifteen (15)
days after receipt of Tenant's Notice (and all required information.
(b) With respect to Landlord's consent to an assignment or sublease,
Landlord may take into consideration any factors that Landlord reasonably may
deem relevant, and the reasons for which Landlord's denial shall be deemed to be
reasonable shall include, without limitation, the following:
(i) the business reputation or creditworthiness of any proposed
subtenant or assignee is not acceptable to Landlord; or
(ii) in Landlord's reasonable judgment the proposed assignee or
sublessee would diminish the value or reputation of the Building or Landlord,
provided that assignees or subtenants of comparable reputation to tenants then
leasing space in the Project shall be deemed acceptable; or
(iii) any proposed assignee's or sublessee's use of the Premises
would violate Section 7.01 of the Lease or would violate the provisions of any
other leases of tenants in the Project; or
(iv) the proposed sublessee or assignee is a bona fide prospective
tenant of Landlord in the Project as demonstrated by a written proposal dated
within ninety (90) days prior to the date of Tenant's request; or
(v) the proposed sublessee or assignee would materially increase
the estimated pedestrian and vehicular traffic to and from the Premises and the
Building.
(c) Any sublease or assignment shall be expressly subject to the terms and
conditions of this Lease. Any subtenant or assignee shall execute such documents
as Landlord may reasonably require to evidence such subtenant or assignee's
assumption of the obligations and liabilities of Tenant under this Lease. Tenant
shall deliver to Landlord a copy of all agreements executed by Tenant and the
proposed subtenant and assignee with respect to the Premises. Landlord's
approval of a sublease, assignment, hypothecation, transfer or third party use
or occupancy shall not constitute a waiver of Tenant's obligation to obtain
Landlord's consent to further assignments or subleases, hypothecations,
transfers or third party use or occupancy.
(d) Notwithstanding the foregoing, and expressly subject to the provisions
of Section 10.04 with respect to the continuing liability of Tenant under this
Lease following an assignment or sublease, Tenant may sublet or assign this
Lease to an Affiliate without obtaining the prior written consent of Landlord
provided that in the event of an assignment of this Lease to an Affiliate, such
affiliate expressly assumes the obligations of Tenant under this Lease.
10.02 RECAPTURE
If Tenant proposes to sublease a portion of the Premises for all of the
remaining Term other than to an Affiliate, Landlord shall have the option to
exclude from the Premises covered by this Lease ("recapture") the space proposed
to be sublet effective as of the proposed commencement date of such sublease. If
Tenant proposes to assign this Lease other than to an Affiliate, Landlord shall
have the option to recapture the Premises effective as of the proposed
commencement date of the assignment. If Landlord elects to
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recapture, Tenant shall surrender possession of the space proposed to be
subleased or subject to the assignment to Landlord on the effective date of
recapture of such space from the Premises, such date being the Termination Date
for such space. Effective as of the date of recapture of any portion of the
Premises pursuant to this section, the Monthly Base Rent, Rentable Area of the
Premises and Tenant's Share shall be adjusted accordingly.
10.03 EXCESS RENT
Tenant shall pay Landlord on the first day of each month during the term of the
sublease or assignment, fifty percent (50%) of the amount by which the sum of
all rent and other consideration (direct or indirect) due from the subtenant or
assignee for such month exceeds: (i) that portion of the Monthly Base Rent and
Rent Adjustments due under this Lease for said month which is allocable to the
space sublet or assigned; and (ii) the following costs and expenses for the
subletting or assignment of such space: (1) brokerage commissions and attorneys'
fees and expenses, (2) the actual costs paid in making any improvements or
substitutions in the Premises required by any sublease or assignment; and (3)
"free rent" periods, costs of any inducements or concessions given to subtenant
or assignee, moving costs, and other amounts in respect of such subtenant's or
assignee's other leases or occupancy arrangements. All such costs and expenses
shall be amortized over the term of the sublease or assignment pursuant to sound
accounting principles.
10.04 TENANT LIABILITY
In the event of any sublease or assignment, whether or not with Landlord's
consent, Tenant shall not be released or discharged from any liability, whether
past, present or future, under this Lease, including any liability arising from
the exercise of any renewal or expansion option, to the extent such exercise is
expressly permitted by Landlord. Tenant's liability shall remain primary, and in
the event of default by any subtenant, assignee or successor of Tenant in
performance or observance of any of the covenants or conditions of this Lease,
Landlord may proceed directly against Tenant without the necessity of exhausting
remedies against said subtenant, assignee or successor. If Landlord grants
consent to such sublease or assignment, Tenant shall pay all reasonable
attorneys' fees and expenses (not to exceed $1,000 in any instance) incurred by
Landlord with respect to such assignment or sublease. In addition, if Tenant has
any options to extend the term of this Lease or to add other space to the
Premises, such options shall not be available to any subtenant or assignee
(other than an Affiliate), directly or indirectly without Landlord's express
written consent, which may be withheld in Landlord's sole discretion.
10.05 ASSUMPTION AND ATTORNMENT
If Tenant shall assign this Lease as permitted herein, the assignee shall
expressly assume all of the obligations of Tenant hereunder in a written
instrument reasonably satisfactory to Landlord and furnished to Landlord. If
Tenant shall sublease the Premises as permitted herein, Tenant shall, at
Landlord's option, within fifteen (15) days following any request by Landlord,
obtain and furnish to Landlord the written agreement of such subtenant to the
effect that the subtenant will upon default by Tenant and if so requested by
Landlord, attorn to Landlord.
ARTICLE ELEVEN
DEFAULT AND REMEDIES
11.01 EVENTS OF DEFAULT
The occurrence or existence of any one or more of the following shall constitute
a "Default" by Tenant under this Lease:
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(i) Tenant fails to pay any installment or other payment of Rent
including Rent Adjustment Deposits or Rent Adjustments when due and fails to
cure such failure within five (5) business days after written notice of such
failure from Landlord;
(ii) Tenant fails to observe or perform any of the other covenants,
conditions or provisions of this Lease or the Workletter and fails to cure such
default within thirty (30) days after written notice thereof to Tenant, provided
that if the default reasonably requires more than thirty (30) days to cure,
Tenant shall not be in default if it commences such cure within such thirty (30)
day period and thereafter diligently proceeds to complete the cure;
(iii) the interest of Tenant in this Lease is levied upon under execution
or other legal process, and such levy is not discharged within ninety (90) days
thereafter;
(iv) a petition is filed by or against Tenant to declare Tenant bankrupt
or seeking a plan of reorganization or arrangement under any Chapter of the
Bankruptcy Act, or any amendment, replacement or substitution therefor, or to
delay payment of, reduce or modify Tenant's debts, which in the case of an
involuntary action is not discharged within ninety (90) days;
(v) any assignment of Tenant's property is made for the benefit of
creditors and such assignment is not discharged within ninety (90) days;
(vi) a receiver is appointed for Tenant or Tenant's property, which
appointment is not discharged within ninety (90) days; or
(vii) upon the dissolution of Tenant.
11.02 LANDLORD'S REMEDIES
(a) A Default shall constitute a breach of the Lease for which Landlord
shall have the rights and remedies set forth in this Section 11.02 and all other
rights and remedies set forth in this Lease or now or hereafter allowed by Law,
whether legal or equitable, and all rights and remedies of Landlord shall be
cumulative and none shall exclude any other right or remedy.
(b) With respect to a Default, at any time Landlord may terminate Tenant's
right to possession by written notice to Tenant stating such election. Any
written notice required pursuant to Section 11.01 shall constitute notice of
unlawful detainer pursuant to California Code of Civil Procedure Section 1161
if, at Landlord's sole discretion, it states Landlord's election that Tenant's
right to possession is terminated after expiration of any period required by Law
or any longer period required by Section 11.01. Upon the expiration of the
period stated in Landlord's written notice of termination (and unless such
notice provides an option to cure within such period and Tenant cures the
Default within such period), Tenant's right to possession shall terminate and
this Lease shall terminate, and Tenant shall remain liable as hereinafter
provided. Upon such termination in writing of Tenant's right to possession,
Landlord shall have the right, subject to applicable Law, to re-enter the
Premises and dispossess Tenant and the legal representatives of Tenant and all
other occupants of the Premises by unlawful detainer or other summary
proceedings, or otherwise as permitted by Law, regain possession of the Premises
and remove their property (including their trade fixtures, personal property and
those Tenant Additions which Tenant is required or permitted to remove under
Article Twelve), but Landlord shall not be obligated to effect such removal, and
such property may, at Landlord's option, be stored elsewhere, sold or otherwise
dealt with as permitted by Law, at the risk of, expense of and for the account
of Tenant, and the proceeds of any sale shall be applied pursuant to Law.
Landlord shall in no event be responsible for the value, preservation or
safekeeping of any such property. Tenant hereby waives all claims for damages
that may be caused by Landlord's removing or storing Tenant's personal property
pursuant to this Section or Section 12.01, and Tenant hereby indemnifies, and
agrees to defend, protect and hold harmless, the Indemnitees from any and all
loss, claims,
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demands, actions, expenses, liability and cost (including attorneys' fees and
expenses) arising out of or in any way related to such removal or storage. Upon
such written termination of Tenant's right to possession and this Lease,
Landlord shall have the right to recover damages for Tenant's Default as
provided herein or by Law, including the following damages provided by
California Civil Code Section 1951.2:
(1) the worth at the time of award of the unpaid Rent which had been
earned at the time of termination;
(2) the worth at the time of award of the amount by which the unpaid
Rent which would have been earned after termination until the time of award
exceeds the amount of such Rent loss that Tenant proves could reasonably have
been avoided;
(3) the worth at the time of award of the amount by which the unpaid
Rent for the balance of the term of this Lease after the time of award exceeds
the amount of such Rent loss that Tenant proves could be reasonably avoided; and
(4) any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform its obligations
under this Lease or which in the ordinary course of things would be likely to
result therefrom, including, without limitation, Landlord's unamortized costs of
tenant improvements, leasing commissions and legal fees incurred in connection
with entering into this Lease. The word "rent" as used in this Section 11.02
shall have the same meaning as the defined term Rent in this Lease. The "worth
at the time of award" of the amount referred to in clauses (1) and (2) above is
computed by allowing interest at the Default Rate. The worth at the time of
award of the amount referred to in clause (3) above is 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 purpose of determining unpaid
Rent under clause (3) above, the monthly Rent reserved in this Lease shall be
deemed to be the sum of the Monthly Base Rent, monthly storage space rent, if
any, and the amounts last payable by Tenant as Rent Adjustments for the calendar
year in which Landlord terminated this Lease as provided hereinabove.
(c) Even if Tenant is in Default and/or has abandoned the Premises, this
Lease shall continue in effect for so long as Landlord does not terminate
Tenant's right to possession by written notice as provided in Section 11.02(b)
above, and Landlord may enforce all its rights and remedies under this Lease,
including the right to recover Rent as it becomes due under this Lease. In such
event, Landlord shall have all of the rights and remedies of a landlord under
California Civil Code Section 1951.4 (lessor may continue Lease in effect after
Tenant's Default and abandonment and recover Rent as it becomes due, if Tenant
has the right to sublet or assign, subject only to reasonable limitations), or
any successor statute. During such time as Tenant is in Default, if Landlord has
not terminated this Lease by written notice and if Tenant requests Landlord's
consent to an assignment of this Lease or a sublease of the Premises, subject to
Landlord's option to recapture pursuant to Section 10.02, Landlord shall not
unreasonably withhold its consent to such assignment or sublease. Tenant
acknowledges and agrees that the provisions of Article Ten shall be deemed to
constitute reasonable limitations of Tenant's right to assign or sublet. Tenant
acknowledges and agrees that in the absence of written notice pursuant to
Section 11.02(b) above terminating Tenant's right to possession, no other act of
Landlord shall constitute a termination of Tenant's right to possession or an
acceptance of Tenant's surrender of the Premises, including acts of maintenance
or preservation or efforts to relet the Premises or the appointment of a
receiver upon initiative of Landlord to protect Landlord's interest under this
Lease or the withholding of consent to a subletting or assignment, or
terminating a subletting or assignment, if in accordance with other provisions
of this Lease.
(d) The voluntary or other surrender or termination of this Lease, or a
mutual termination or cancellation thereof, shall not work a merger and shall
terminate all or any existing assignments, Subleases, sub tenancies or
occupancies permitted by Tenant, except if and as otherwise specified in writing
by Landlord.
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(e) No delay or omission in the exercise of any right or remedy of
Landlord upon any default by Tenant, and no exercise by Landlord of its rights
pursuant to Section 25.15 to perform any duty which Tenant fails timely to
perform, shall impair any right or remedy or be construed as a waiver. No
provision of this Lease shall be deemed waived by Landlord unless such waiver is
in writing signed by Landlord. The waiver by Landlord of any breach of any
provision of this Lease shall not be deemed a waiver of any subsequent breach of
the same or any other provision of this Lease.
11.03 ATTORNEY'S FEES
In the event any party brings any suit or other proceeding with respect to the
subject matter or enforcement of this Lease, the prevailing party (as determined
by the court, agency or other authority before which such suit or proceeding is
commenced) shall, in addition to such other relief as may be awarded, be
entitled to recover attorneys' fees, expenses and costs of investigation as
actually incurred, including court costs, expert witness fees, costs and
expenses of investigation, and all attorneys' fees, costs and expenses in any
such suit or proceeding (including in any action or participation in or in
connection with any case or proceeding under the Bankruptcy ▇▇▇▇, ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ Code Sections 101 et seq., or any successor statutes, in establishing or
enforcing the right to indemnification, in appellate proceedings, or in
connection with the enforcement or collection of any judgment obtained in any
such suit or proceeding).
11.04 BANKRUPTCY
The following provisions shall apply in the event of the bankruptcy or
insolvency of Tenant:
(a) In connection with any proceeding under Chapter 7 of the Bankruptcy
Code where the trustee of Tenant elects to assume this Lease for the purposes of
assigning it, such election or assignment, may only be made upon compliance with
the provisions of (b) and (c) below, which conditions Landlord and Tenant
acknowledge to be commercially reasonable. In the event the trustee elects to
reject this Lease then Landlord shall immediately be entitled to possession of
the Premises without further obligation to Tenant or the trustee.
(b) Any election to assume this Lease under Chapter 11 or 13 of the
Bankruptcy Code by Tenant as debtor-in-possession or by Tenant's trustee (the
"Electing Party") must provide for:
The Electing Party to cure or provide to Landlord adequate assurance that
it will cure all monetary defaults under this Lease within fifteen (15) days
from the date of assumption and it will cure all nonmonetary defaults under this
Lease within thirty (30) days from the date of assumption. Landlord and Tenant
acknowledge such condition to be commercially reasonable.
(c) If the Electing Party has assumed this Lease or elects to assign
Tenant's interest under this Lease to any other person, such interest may be
assigned only if the intended assignee has provided adequate assurance of future
performance (as herein defined), of all of the obligations imposed on Tenant
under this Lease.
For the purposes hereof, "adequate assurance of future performance" means
that Landlord has ascertained that each of the following conditions has been
satisfied:
(i) The assignee has submitted a current financial statement,
certified by its chief financial officer, which shows a net worth and working
capital in amounts sufficient to assure the future performance by the assignee
of Tenant's obligations under this Lease; and
(ii) Landlord has obtained consents or waivers from any third
parties that may be required under a lease, mortgage, financing arrangement, or
other agreement by which Landlord is bound, to enable Landlord to permit such
assignment.
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(d) Landlord's acceptance of rent or any other payment from any trustee,
receiver, assignee, person, or other entity will not be deemed to have waived,
or waive, the requirement of Landlord's consent, Landlord's right to terminate
this Lease for any transfer of Tenant's interest under this Lease without such
consent, or Landlord's claim for any amount of Rent due from Tenant.
11.05 LANDLORD'S DEFAULT
Landlord shall be in default hereunder in the event Landlord has not begun and
pursued with reasonable diligence the cure of any failure of Landlord to meet
its obligations hereunder within thirty (30) days after the receipt by Landlord
of written notice from Tenant of the alleged failure to perform. In the event of
an emergency Tenant may immediately perform work that is Landlord's
responsibility, and notify the Landlord promptly after the work has been
undertaken, however Tenant shall not be able to seek reimbursement from Landlord
therefor except as specified in the next sentence. If Landlord fails to perform
(or commence to perform in those instances where compliance requires more time)
any of its obligations under this Lease and that failure continues for a period
of more than 30 days (or in the case of emergencies, one (1) business day) after
receipt of written notice from Tenant specifying that failure or in the event of
an emergency requiring immediate attention, Tenant may incur any reasonable
expense necessary to perform the obligation of Landlord specified in such notice
and may ▇▇▇▇ Landlord therefore (but not offset against Rent or other amounts
due to Landlord).
ARTICLE TWELVE
SURRENDER OF PREMISES
12.01 IN GENERAL
Upon the Termination Date, Tenant shall surrender and vacate the Premises
immediately and deliver possession thereof to Landlord in a clean, good
condition, ordinary wear and tear, and damage caused by Landlord, casualty,
condemnation and latent defects excepted. Tenant shall deliver to Landlord all
keys to the Premises. Tenant shall remove from the Premises all movable personal
property of Tenant and Tenant's trade fixtures, including, subject to Section
6.04, cabling for any of the foregoing. Tenant shall be entitled to remove such
Tenant Additions, which at the time of their installation Landlord and Tenant
agreed may be removed by Tenant. Tenant shall also remove such other Tenant
Additions as required by Landlord, including any Tenant Additions containing
Hazardous Materials. Landlord agrees to notify Tenant within fifteen (15) days
of receipt of complete Construction Drawings for Tenant's initial Tenant
Improvement Work (as defined in the Workletter) what if any portion of that
Tenant Improvement Work Landlord will require Tenant to remove upon termination
of the Lease. Landlord agrees not to require Tenant to remove any Additions that
it did not specifically specify for removal at the time of its approval of such
Additions, as described in Section 9.01 hereof. Tenant immediately shall repair
all damage resulting from removal of any of Tenant's property, furnishings or
Tenant Additions. In the event possession of the Premises is not delivered to
Landlord when required hereunder, or if Tenant shall fail to remove those items
to the extent Tenant is required to as described above, Landlord may (but shall
not be obligated to), at Tenant's expense, remove any of such property and
store, sell or otherwise deal with such property as provided in Section
11.02(b), including the waiver and indemnity obligations provided in that
Section.
12.02 LANDLORD'S RIGHTS
All property which may be removed from the Premises by Landlord following
termination of this Lease and abandonment by Tenant shall be conclusively
presumed to have been abandoned by Tenant and Landlord may deal with such
property as provided in Section 11.02(b), including the waiver and indemnity
obligations provided in that Section.
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ARTICLE THIRTEEN
HOLDING OVER
In the event that Tenant holds over in possession of the Premises after the
Termination Date, Tenant shall pay Landlord 150% of the monthly Rent payable for
the month immediately preceding the holding over (including increases for Rent
Adjustments which Landlord may reasonably estimate. Tenant shall also pay all
damages sustained by Landlord by reason of such retention of possession. The
provisions of this Article shall not constitute a waiver by Landlord of any re-
entry rights of Landlord and Tenant's continued occupancy of the Premises shall
be as a tenancy in sufferance.
ARTICLE FOURTEEN
DAMAGE BY FIRE OR OTHER CASUALTY
14.01 SUBSTANTIAL UNTENANTABILITY
(a) If any fire or other casualty (whether insured or uninsured) renders
all or a substantial portion of the Premises or the Building untenantable,
Landlord shall, with reasonable promptness after the occurrence of such damage
but in no event later than 60 days following such fire or other casualty,
estimate the length of time that will be required to substantially complete the
repair and restoration and shall by notice advise Tenant of such estimate
("Landlord's Notice"). If Landlord estimates that the amount of time required to
substantially complete such repair and restoration will exceed one hundred
eighty (180) days from the date such damage occurred, then Landlord, or Tenant
if all or a substantial portion of the Premises is rendered untenantable or if
Tenant's access is materially impaired, or if Tenant's parking rights are
materially reduced, shall have the right to terminate this Lease as of the date
of such damage upon giving written notice to the other at any time within twenty
(20) days after delivery of Landlord's Notice, provided that if Landlord so
chooses, Landlord's Notice may also constitute such notice of termination.
(b) Unless this Lease is terminated as provided in the preceding
subparagraph, Landlord shall proceed with reasonable promptness to repair and
restore the Building's Common Areas and Premises to its condition as existed
prior to such casualty, subject to reasonable delays for insurance adjustments
and Force Majeure delays, and also subject to zoning Laws and building codes
then in effect. Landlord shall proceed with reasonable diligence to complete
such repairs and restoration; provided that, in any event, if Landlord fails to
complete such repair and restoration within two hundred seventy (270) days after
such damage occurred, then Tenant may terminate this Lease by giving Landlord
written notice thereof.
(c) Tenant acknowledges that Landlord shall be entitled to the full
proceeds of any insurance coverage, whether carried by Landlord or Tenant, for
damages to the Premises, except for those proceeds of Tenant's insurance of its
own personal property and equipment which would be removable by Tenant at the
Termination Date. All such insurance proceeds shall be payable to Landlord
whether or not the Premises are to be repaired and restored, provided, however,
if this Lease is not terminated and the parties proceed to repair and restore
Tenant Additions at Tenant's cost, to the extent Landlord received proceeds of
Tenant's insurance covering Tenant Additions, such proceeds shall be applied to
reimburse Tenant for its cost of repairing and restoring Tenant Additions.
(d) Notwithstanding anything to the contrary herein set forth, Landlord
shall have no duty pursuant to this Section to repair or restore any portion of
any Tenant Additions or to expend for any repair or restoration of the Premises
or Building amounts in excess of insurance proceeds paid to Landlord and made
available for repair or restoration. Whether or not the Lease is terminated
pursuant to this Article Fourteen, in no event shall Tenant be entitled to any
compensation or damages for loss of the use of the whole or any part of the
Premises or for any inconvenience or annoyance occasioned by any such damage,
destruction, rebuilding or restoration of the Premises or the Building or access
thereto, except to the extent caused by the gross negligence of Landlord, its
contractors, agents or employees.
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(e) Any repair or restoration of the Premises performed by Tenant shall be
in accordance with the provisions of Article Nine hereof.
14.02 INSUBSTANTIAL UNTENANTABILITY
If the Premises or the Building is damaged by a casualty but neither is rendered
substantially untenantable and Landlord estimates that the time to substantially
complete the repair or restoration will not exceed one hundred eighty (180) days
from the date such damage occurred, then Landlord shall proceed to repair and
restore the Building or the Premises other than Tenant Additions, with
reasonable promptness, unless such damage is to the Premises and occurs during
the last twelve (12) months of the Term, in which event either Tenant or
Landlord shall have the right to terminate this Lease as of the date of such
casualty by giving written notice thereof to the other within twenty (20) days
after the date of such casualty. Tenant can eliminate the aforementioned right
by Landlord to terminate in the last twelve (12) months of the Term if it
officially extends the Term of the Lease as provided herein and legally
documents the Term extension as required. Notwithstanding the aforesaid,
Landlord's obligation to repair shall be limited in accordance with the
provisions of Section 14.01 above.
14.03 RENT ABATEMENT
If all or any part of the Premises are rendered untenantable by fire or other
casualty and this Lease is not terminated, Monthly Base Rent and Rent
Adjustments shall ▇▇▇▇▇ for that part of the Premises which is untenantable on a
per diem basis from the date of the casualty until Landlord has Substantially
Completed the repair and restoration work in the Premises which it is required
to perform, provided, that as a result of such casualty, Tenant does not occupy
the portion of the Premises which is untenantable during such period.
14.04 WAIVER OF STATUTORY REMEDIES
The provisions of this Lease, including this Article Fourteen, constitute an
express agreement between Landlord and Tenant with respect to any and all damage
to, or destruction of, the Premises or the Property or any part of either, and
any Law, including Sections 1932(2), 1933(4), 1941 and 1942 of the California
Civil Code, with respect to any rights or obligations concerning damage or
destruction shall have no application to this Lease or to any damage to or
destruction of all or any part of the Premises or the Property or any part of
either, and are hereby waived.
ARTICLE FIFTEEN
EMINENT DOMAIN
15.01 TAKING OF WHOLE OR SUBSTANTIAL PART
In the event the whole or any substantial part of the Building or of the
Premises is taken or condemned by any competent authority for any public use or
purpose (including a deed given in lieu of condemnation) and the Premises is
thereby rendered untenantable, this Lease shall terminate as of the date title
vests in such authority, and Monthly Base Rent and Rent Adjustments shall be
apportioned as of the Termination Date. Notwithstanding anything to the contrary
herein set forth, in the event the taking is temporary (for less than six (6)
months), Landlord may elect either (i) to terminate this Lease or (ii) permit
Tenant to receive the entire award attributable to the Premises in which case
Tenant's Rent shall continue unabated, or (iii) ▇▇▇▇▇ Tenant's Rent during such
temporary taking, in which case Landlord is entitled to receive the entirety of
any award attributable to the Premises. If the taking is longer than six (6)
months, either Landlord or Tenant shall have the right to terminate this Lease.
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15.02 TAKING OF PART
In the event a material part of the Building Common Areas or the Premises or any
facility materially necessary to Tenant's access, or a material part of Tenant's
parking is taken or condemned by any competent authority (or a deed is delivered
in lieu of condemnation) and such taken parking is not replaced by Landlord, and
this Lease is not terminated, the Lease shall be amended to reduce or increase,
as the case may be, the Monthly Base Rent and Tenant's Proportionate Share to
reflect the Rentable Area of the Premises or Building, as the case may be,
remaining after any such taking or condemnation. Landlord shall make necessary
repairs and restorations to the Premises (exclusive of Tenant Additions) and to
the Building to the extent necessary to constitute the portion of the Building
not so taken or condemned as a complete, tenantable, architectural and
economically efficient unit. During the period Landlord is performing such
repairs, improvements and alterations, all rent and charges will ▇▇▇▇▇ in direct
proportion to Tenant's inability to reasonably conduct business in the Premises.
15.03 COMPENSATION
Landlord shall be entitled to receive the entire award (or sale proceeds) from
any such taking, condemnation or sale without any payment to Tenant, and Tenant
hereby assigns to Landlord Tenant's interest, if any, in such award; provided,
however, Tenant shall have the right separately to pursue against the condemning
authority a separate award in respect of the loss, if any, to Tenant Additions
paid for by tenant without any credit or allowance from Landlord so long as
there is no diminution of landlord's award as a result.
ARTICLE SIXTEEN
INSURANCE
16.01 TENANT'S INSURANCE
Tenant, at Tenant's expense, agrees to maintain in force, with a company or
companies acceptable to Landlord, during the Term: (a) Commercial General
Liability Insurance on a primary basis and without any right of contribution
from any insurance carried by Landlord covering the Premises on an occurrence
basis against all claims for personal injury, bodily injury, death and property
damage, including contractual liability covering the indemnification provisions
in this Lease, and such insurance shall be for such limits that are reasonably
required by Landlord from time to time but not less than a combined single limit
of Three Million and No/100 Dollars ($3,000,000.00); (b) Workers' Compensation
and Employers' Liability Insurance to the extent required by and in accordance
with the Laws of the State of California; (c) "All Risks" property insurance in
an amount adequate to cover the full replacement cost of all Tenant Additions,
equipment, installations, fixtures and contents of the Premises in the event of
loss; and (d) in the event a motor vehicle is to be used by Tenant in connection
with its business operation from the Premises, Comprehensive Automobile
Liability Insurance coverage with limits of not less than One Million and No/100
Dollars ($1,000,000.00) combined single limit coverage against bodily injury
liability and property damage liability arising out of the use by or on behalf
of Tenant, its agents and employees in connection with this Lease, of any owned,
non-owned or hired motor vehicles.
16.02 FORM OF POLICIES
Each policy referred to in 16.01 shall satisfy the following requirements. Each
policy shall (i) name Landlord and the Indemnitees as additional insureds
(except Workers' Compensation and Employers' Liability Insurance), (ii) be
issued by one or more responsible insurance companies licensed to do business in
the State of California reasonably satisfactory to Landlord, (iii) where
applicable, provide for deductible amounts satisfactory to Landlord and not
permit co-insurance, (iv) shall provide that such insurance may not be canceled
or amended without thirty (30) days' prior written notice to the Landlord, and
(v) each policy of "All-Risks" property insurance shall provide that the policy
shall not be invalidated should the insured waive in writing prior to a loss,
any or all rights of recovery against any other party for losses
29
covered by such policies. Tenant shall deliver to Landlord, certificates of
insurance and at Landlord's request, copies of all policies and renewals thereof
to be maintained by Tenant hereunder, not less than ten (10) days prior to the
Commencement Date and not less than ten (10) days prior to the expiration date
of each policy.
16.03 LANDLORD'S INSURANCE
Landlord agrees to purchase and keep in full force and effect during the Term
hereof, including any extensions or renewals thereof, insurance under policies
issued by insurers of recognized responsibility, qualified to do business in the
State of California on the Building in amounts not less than the greater of
eighty (80%) percent of the then full replacement cost (without depreciation) of
the Building (above foundations and excluding Tenant Additions) or an amount
sufficient to prevent Landlord from becoming a co-insurer under the terms of the
applicable policies, against fire and such other risks as may be included in
standard forms of all risk coverage insurance reasonably available from time to
time. Landlord agrees to maintain in force during the Term, Commercial General
Liability Insurance covering the Building on an occurrence basis against all
claims for personal injury, bodily injury, death, and property damage. Such
insurance shall be for a combined single limit of not less than Three Million
and No/100 Dollars ($3,000,000.00). Neither Landlord's obligation to carry such
insurance nor the carrying of such insurance shall be deemed to be an indemnity
by Landlord with respect to any claim, liability, loss, cost or expense due, in
whole or in part, to Tenant's negligent acts or omissions or willful misconduct.
Without obligation to do so, Landlord may, in its sole discretion from time to
time, carry insurance in amounts greater and/or for coverage additional to the
coverage and amounts set forth above.
16.04 WAIVER OF SUBROGATION
(a) Landlord agrees that, if obtainable at no, or minimal, additional
cost, and so long as the same is permitted under the laws of the State of
California, it will include in its "All Risks" policies appropriate clauses
pursuant to which the insurance companies (i) waive all right of subrogation
against Tenant with respect to losses payable under such policies and/or (ii)
agree that such policies shall not be invalidated should the insured waive in
writing prior to a loss any or all right of recovery against any party for
losses covered by such policies.
(b) Tenant agrees to include, if obtainable at no, or minimal, additional
cost, and so long as the same is permitted under the laws of the State of
California, in its "All Risks" insurance policy or policies on Tenant Additions,
whether or not removable, and on Tenant's furniture, furnishings, fixtures and
other property removable by Tenant under the provisions of this Lease
appropriate clauses pursuant to which the insurance company or companies (i)
waive the right of subrogation against Landlord and/or any tenant of space in
the Building with respect to losses payable under such policy or policies and/or
(ii) agree that such policy or policies shall not be invalidated should the
insured waive in writing prior to a loss any or all right of recovery against
any party for losses covered by such policy or policies. If Tenant is unable to
obtain in such policy or policies either of the clauses described in the
preceding sentence, Tenant shall, if legally possible and without necessitating
a change in insurance carriers, have Landlord named in such policy or policies
as an additional insured. If Landlord shall be named as an additional insured in
accordance with the foregoing, Landlord agrees to endorse promptly to the order
of Tenant, without recourse, any check, draft, or order for the payment of money
representing the proceeds of any such policy or representing any other payment
growing out of or connected with said policies, and Landlord does hereby
irrevocably waive any and all rights in and to such proceeds and payments.
(c) Provided that Landlord's right of full recovery under its policy or
policies aforesaid is not adversely affected or prejudiced thereby, Landlord
hereby waives any and all right of recovery which it might otherwise have
against Tenant, its servants, agents and employees, for loss or damage occurring
to the Real Property and the fixtures, appurtenances and equipment therein, to
the extent the same is covered by Landlord's insurance, notwithstanding that
such loss or damage may result from the negligence or fault
30
of Tenant, its servants, agents or employees. Provided that Tenant's right of
full recovery under its aforesaid policy or policies is not adversely affected
or prejudiced thereby, Tenant hereby waives any and all right of recovery which
it might otherwise have against Landlord, its servants, and employees and
against every other tenant of the Real Property who shall have executed a
similar waiver as set forth in this Section 16.04 (c) for loss or damage to
Tenant Additions, whether or not removable, and to Tenant's furniture,
furnishings, fixtures and other property removable by Tenant under the
provisions hereof to the extent the same is coverable by Tenant's insurance
required under this Lease, notwithstanding that such loss or damage may result
from the negligence or fault of Landlord, its servants, agents or employees, or
such other tenant and the servants, agents or employees thereof.
(d) Landlord and Tenant hereby agree to advise the other promptly if the
clauses to be included in their respective insurance policies pursuant to
subparagraphs (a) and (b) above cannot be obtained on the terms hereinbefore
provided and thereafter to furnish the other with a certificate of insurance or
copy of such policies showing the naming of the other as an additional insured,
as aforesaid. Landlord and Tenant hereby also agree to notify the other promptly
of any cancellation or change of the terms of any such policy that would affect
such clauses or naming. All such policies which name both Landlord and Tenant as
additional insureds shall, to the extent obtainable, contain agreements by the
insurers to the effect that no act or omission of any additional insured will
invalidate the policy as to the other additional insureds.
16.05 NOTICE OF CASUALTY
Tenant shall give Landlord notice in case of a fire or accident in the Premises
promptly after Tenant is aware of such event.
ARTICLE SEVENTEEN
WAIVER OF CLAIMS AND INDEMNITY
17.01 WAIVER OF CLAIMS
To the extent permitted by Law, Tenant releases the Indemnitees from, and waives
all claims for, damage to the person or property sustained by Tenant or any
occupant of the Premises or the property resulting directly or indirectly from
any existing or future condition, defect, matter or thing in and about the
Premises or the Property or any part of either or any equipment or appurtenance
therein, or resulting from any accident in or about the Premises or the
property, or resulting directly or indirectly from any act or neglect of any
tenant or occupant of the Property except to the extent caused by the gross
negligence or willful and wrongful act of any of the Indemnitees or a breach of
any material provision of this Lease by Landlord. To the extent permitted by
Law, except as otherwise provided in this Lease, Tenant hereby waives any
consequential damages, compensation or claims for inconvenience or loss of
business, rents or profits as a result of such injury or damage, except to the
extent caused by the intentional, gross negligence or willful and wrongful act
of any of the Indemnitees. If any such damage, whether to the Premises or the
Property or any part of either, or whether to Landlord or to other tenants in
the Property, results from any breach by Tenant of an obligation hereunder which
is not cured within the notice and cure periods provided in this Lease, Tenant
shall be liable therefor and Landlord may, at Landlord's option, repair such
damage and Tenant shall, upon demand by Landlord, as payment of additional Rent
hereunder, reimburse landlord within thirty (30) days of demand for the total
cost of such repairs, in excess of amounts, if any, paid to Landlord under
insurance covering such damages. Tenant shall not be liable for any such damage
to the extent Landlord or a tenant has recovered part or the full amount of such
damage from proceeds of insurance policies and/or the insurance company has
waived its right of subrogation against Tenant.
17.02 INDEMNITY
Tenant agrees to indemnify, defend, protect and hold Landlord harmless from and
against any and all injury, loss, damage, liability, costs or expenses
(including, without limitation, attorneys fees, reasonable
31
investigative and discovery costs), of whatever nature, to any person or
property caused or claimed to be caused by or resulting from any negligent act
or omission of Tenant or its agents, employees or contractors, or any breach of
any representation or warranty made by Tenant hereunder. Landlord agrees to
indemnify, defend, protect and hold Tenant harmless from and against any and all
injury, loss, damage, liability, costs or expenses (including, without
limitation, attorneys fees, reasonable investigation and discovery costs), of
whatever nature, to any person or property caused or claimed to be caused by or
resulting from any negligent act or omission of Landlord or its agents,
employees or contractors, or any breach of any representation or warranty made
by Landlord hereunder. With regard to property damage, the provisions of this
Article are subject and subordinate to the provisions of Section 16.04.
ARTICLE EIGHTEEN
RULES AND REGULATIONS
18.01 RULES
Tenant agrees for itself and for its subtenants, employees, agents, and invitees
to comply with the rules and regulations listed on Exhibit C attached hereto and
with all reasonable, non-discriminatory modifications and additions thereto
which Landlord may make from time to time.
18.02 ENFORCEMENT
Nothing in this Lease shall be construed to impose upon the Landlord any duty or
obligation to enforce the rules and regulations as set forth on Exhibit C or as
hereafter adopted, or the terms, covenants or conditions of any other lease as
against any other tenant, and the Landlord shall not be liable to the Tenant for
violation of the same by any other tenant, its servants, employees, agents,
visitors or licensees. Landlord shall use reasonable efforts to enforce the
rules and regulations of the Project in a uniform and non-discriminatory manner.
ARTICLE NINETEEN
LANDLORD'S RESERVED RIGHTS
Landlord shall have the following rights exercisable without notice to Tenant
and without liability to Tenant for damage or injury to persons, property or
business and without being deemed an eviction or disturbance of Tenant's use or
possession of the Premises or giving rise to any claim for offset or abatement
of Rent: (1) to change the Building's name or street address upon thirty (30)
days' prior written notice to Tenant; (2) to install, affix and maintain all
signs on the exterior and/or interior of the Building; (3) to designate and/or
approve prior to installation, all types of signs, window shades, blinds,
drapes, awnings or other similar items, and all internal lighting that may be
visible from the exterior of the Premises; (4) upon reasonable notice to Tenant,
to display the Premises to prospective purchasers and lenders at reasonable
hours at any time during the Term and to prospective tenants at reasonable hours
during the last twelve (12) months of the Term; (5) to grant to any party the
exclusive right to conduct any business or render any service in or to the
Building, provided such exclusive right shall not operate to prohibit Tenant
from using the Premises for the purpose permitted hereunder; (6) subject to
Section 7.02, to change the arrangement and/or location of entrances or
passageways, doors and doorways, corridors, elevators, stairs, washrooms or
public portions of the Building, and to close entrances, doors, corridors,
elevators or other facilities, provided that such action shall not materially
and adversely interfere with Tenant's access to the Premises or the Building;
(7) to have access for Landlord and other tenants of the Building to any mail
chutes and boxes located in or on the Premises as required by any applicable
rules of the United States Post Office; and (8) to close the Building after
Standard Operating Hours, except that Tenant and its employees and invitees
shall be entitled to admission at all times, under such regulations as Landlord
prescribes for security purposes.
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ARTICLE TWENTY
ESTOPPEL CERTIFICATE
20.01 IN GENERAL
Within fifteen (15) days after request therefor by Landlord, Mortgagee or any
prospective mortgagee or owner, Tenant agrees as directed in such request to
execute an Estoppel Certificate in recordable form, binding upon Tenant,
certifying (i) that this Lease is unmodified and in full force and effect (or if
there have been modifications, a description of such modifications and that this
Lease as modified is in full force and effect); (ii) the dates to which Rent has
been paid; (iii) that Tenant is in the possession of the Premises if that is the
case; (iv) that Landlord is not in default under this Lease, or, if Tenant
believes Landlord is in default, the nature thereof in detail; (v) that Tenant
has no offsets or defenses to the performance of its obligations under this
Lease (or if Tenant believes there are any offsets or defenses, a full and
complete explanation thereof); (vi) if such is the case, that the Premises have
been completed in accordance with the terms and provisions hereof or the
Workletter, that Tenant has accepted the Premises and the condition thereof and
of all improvements thereto and has no claims against Landlord or any other
party with respect thereto; (vii) that Tenant will give to the Mortgagee copies
of all notices of default required to be given by Tenant to Landlord; and (viii)
to any other information reasonably requested.
ARTICLE TWENTY-ONE
OMITTED
ARTICLE TWENTY-TWO
REAL ESTATE BROKERS
Tenant represents that, except for the broker(s) listed in Section 1.01(16),
Tenant has not dealt with any real estate broker, sales person, or finder in
connection with this Lease, and no such person initiated or participated in the
negotiation of this Lease, or showed the Premises to Tenant. Tenant hereby
agrees to indemnify, protect, defend and hold Landlord and the Indemnitees,
harmless from and against any and all liabilities and claims for commissions and
fees arising out of a breach of the foregoing representation. Landlord agrees to
pay any commission to which Landlord's Broker listed in Section 1.01(16) is
entitled in connection with this Lease pursuant to Landlord's written agreement
with such broker. Landlord and Tenant agree that any commission payable to
Tenant's Broker shall be paid by Landlord pursuant to a separate agreement
between Landlord and Tenant's Broker.
ARTICLE TWENTY-THREE
MORTGAGEE PROTECTION
23.01 SUBORDINATION, NONDISTURBANCE AND ATTORNMENT
Subject to the provisions hereof, this Lease is and shall be expressly subject
and subordinate at all times to (i)any ground or underlying lease of the Real
Property, now or hereafter existing, and all amendments, extensions, renewals
and modifications to any such lease, and (ii) the lien of any mortgage or trust
deed now or hereafter encumbering fee title to the Real Property and/or the
leasehold estate under any such lease, and all amendments, extensions, renewals,
replacements and modifications of such mortgage or trust deed and/or the
obligation secured thereby, unless such ground lease or ground lessor, or
mortgage, trust deed or Mortgagee, expressly provides or elects that the Lease
shall be superior to such lease or mortgage or trust deed. If any such mortgage
or trust deed is foreclosed (including any sale of the Real Property pursuant to
a power of sale), or if any such lease is terminated, upon request of the
Mortgagee or ground lessor, as the case may be, Tenant shall attorn to the
purchaser at the foreclosure sale or to the ground lessor under such lease, as
the case may be, provided, however, that such purchaser or ground lessor shall
not be subject to any offset, defense, or damages arising out of a default of
any obligations of any preceding Landlord This subordination shall be self-
operative and no further certificate or instrument of subordination
33
need be required by any such Mortgagee or ground lessor. Tenant shall execute
promptly any reasonable certificate or instrument that Landlord, Mortgagee or
ground lessor may request provided that, notwithstanding anything to the
contrary herein, Tenant's agreement to subordinate its interest hereunder to any
current or future mortgagee or lessor shall be subject to Tenant's receipt of a
commercially reasonable nondisturbance agreement executed and acknowledged by
such mortgagee or lessor in form reasonably acceptable to Tenant providing that
so long as an Event of Default has not occurred with respect to Tenant, such
Mortgagee or ground lessor shall rant Tenant nondisturbance and recognize
Tenant's rights under this Lease. Landlord agrees to obtain such a
nondisturbance agreement from the existing Mortgagee within thirty (30) days of
the execution of this Lease by both parties.
23.02 MORTGAGEE PROTECTION
Tenant agrees to give any Mortgagee or ground lessor, by registered or certified
mail, a copy of any notice of default served upon the Landlord by Tenant,
provided that prior to such notice Tenant has received notice of the address of
such Mortgagee or ground lessor and Landlord's express written instruction to
serve a copy of such notice upon such lessor or Mortgagee. Such lessor or
Mortgagee shall have the right within the time period(s) afforded Landlord
hereunder and commencing with their receipt of Tenant's written notice, to cure
any such default(s) of Landlord.
ARTICLE TWENTY-FOUR
NOTICES
(a) All notices, demands or requests provided for or permitted to be given
pursuant to this Lease must be in writing and shall be personally delivered,
sent by Federal Express or other reputable overnight courier service, or mailed
by first class, registered or certified United States mail, return receipt
requested, postage prepaid.
(b) All notices, demands or requests to be sent pursuant to this Lease
shall be deemed to have been properly given or served by delivering or sending
the same in accordance with this Section, addressed to the parties hereto at
their respective addresses listed in Sections 1.01(2) and (3).
(c) Notices, demands or requests sent by mail or overnight courier service
as described above shall be effective upon deposit in the mail or with such
courier service. However, the time period in which a response to any such
notice, demand or request must be given shall commence to run from (i) in the
case of delivery by mail, the date of receipt on the return receipt of the
notice, demand or request by the addressee thereof, or (ii) in the case of
delivery by Federal Express or other overnight courier service, the date of
acceptance of delivery by an employee, officer, director or partner of Landlord
or Tenant. Rejection or other refusal to accept or the inability to deliver
because of changed address of which no notice was given, as indicated by advice
from Federal Express or other overnight courier service or by mail return
receipt, shall be deemed to be receipt of notice, demand or request sent.
Notices may also be served by personal service upon any officer, director or
partner of Landlord or Tenant, and shall be effective upon such service.
(d) By giving to the other party at least thirty (30) days written notice
thereof, either party shall have the right from time to time during the term of
this Lease to change their respective addresses for notices, statements, demands
and requests, provided such new address shall be within the United States of
America.
ARTICLE TWENTY-FIVE
MISCELLANEOUS
34
25.01 LATE CHARGES
(a) All payments required hereunder (other than the Monthly Base Rent,
Rent Adjustments, and Rent Adjustment Deposits, which shall be due as
hereinbefore provided) to Landlord shall be paid within ten (10) days after
Landlord's demand therefor. All such amounts (including Monthly Base Rent, Rent
Adjustments, and Rent Adjustment Deposits) not paid when due shall bear interest
from the date due until the date paid at the Default Rate in effect on the date
such payment was due.
(b) In the event Tenant is more than ten (10) days late in paying any
installment of Rent due under this Lease at least three times in any 12-month
period, Tenant shall pay Landlord a late charge equal to five percent (5%) of
the third and any subsequent delinquent installment(s) of Rent. The parties
agree that (i) such delinquency will cause Landlord to incur costs and expenses
not contemplated herein, the exact amount of which will be difficult to
calculate, including the cost and expense that will be incurred by Landlord in
processing each delinquent payment of rent by Tenant, (b) the amount of such
late charge represents a reasonable estimate of such costs and expenses and that
such late charge shall be paid to Landlord for each delinquent payment in
addition to all Rent otherwise due hereunder. The parties further agree that the
payment of late charges and the payment of interest provided for in subparagraph
(a) above are distinct and separate from one another in that the payment of
interest is to compensate Landlord for its inability to use the money improperly
withheld by Tenant, while the payment of late charges is to compensate Landlord
for its additional administrative expenses in handling and processing delinquent
payments.
(c) Payment of interest at the Default Rate and/or of late charges shall
not excuse or cure any default by Tenant or Landlord under this Lease, nor shall
the foregoing provisions of this Article or any such payments prevent either
party from exercising any right or remedy available upon any such failure to pay
Rent or other sums when due, including the right to terminate this Lease.
25.02 NO JURY TRIAL; VENUE; JURISDICTION
Each party hereto (which includes any assignee, successor, heir or personal
representative of a party) shall not seek a jury trial, hereby waives trial by
jury, and hereby further waives any objection to venue in the County in which
the Project is located, and agrees and consents to personal jurisdiction of the
courts of the State of California, in any action or proceeding or counterclaim
brought by any party hereto against the other on any matter whatsoever arising
out of or in any way connected with this Lease, the relationship of Landlord and
Tenant, Tenant's use or occupancy of the Premises, or any claim of injury or
damage, or the enforcement of any remedy under any statute, emergency or
otherwise, whether any of the foregoing is based on this Lease or on tort law.
No party will seek to consolidate any such action in which a jury has been
waived with any other action in which a jury trial cannot or has not been
waived. It is the intention of the parties that these provisions shall be
subject to no exceptions. By execution of this Lease the parties agree that this
provision may be filed by any party hereto with the clerk or judge before whom
any action is instituted, which filing shall constitute the written consent to a
waiver of jury trial pursuant to and in accordance with Section 631 of the
California Code of Civil Procedure. No party has in any way agreed with or
represented to any other party that the provisions of this Section will not be
fully enforced in all instances. The provisions of this Section shall survive
the expiration or earlier termination of this Lease.
25.03 NONDISCRIMINATION
The parties agree for themselves and their heirs, executors, administrators,
successors and assigns and all persons claiming under or through them, and this
Lease is made and accepted upon and subject to the following conditions: that
there shall be no discrimination against or segregation of any person or group
of persons on account of race, color, creed, religion, sex, marital status,
national origin or ancestry (whether in the leasing, subleasing, transferring,
use, occupancy, tenure or enjoyment of the Premises or otherwise) nor
35
shall either party or any person claiming under or through either party
establish or permit any such practice or practices of discrimination or
segregation with reference to the use or occupancy of the Premises.
25.04 OPTION
This Lease shall not become effective as a lease or otherwise until executed and
delivered by both Landlord and Tenant. The submission of the Lease to Tenant
does not constitute a reservation of or option for the Premises.
25.05 TENANT AUTHORITY
Each party represents and warrants to the other that it has full authority and
power to enter into and perform its obligations under this Lease, that the
person executing this Lease is fully empowered to do so, and that no consent or
authorization is necessary from any third party. Each party may request that the
other provide evidence of such authority.
25.06 ENTIRE AGREEMENT
This Lease, the Exhibits attached hereto and the Workletter contain the entire
agreement between Landlord and Tenant concerning the Premises and there are no
other agreements, either oral or written, and no other representations or
statements, either oral or written, on which Tenant has relied. This Lease shall
not be modified except by a writing executed by Landlord and Tenant.
25.07 MODIFICATION OF LEASE FOR BENEFIT OF MORTGAGEE [intentionally deleted]
25.08 EXCULPATION
Tenant agrees, on its behalf and on behalf of its successors and assigns, that
any liability or obligation under this Lease shall only be enforced against
Landlord's equity interest in the Property and in no event against any other
assets of the Landlord, or Landlord's officers or directors or partners, and
that any liability of Landlord with respect to this Lease shall be so limited
and Tenant shall not be entitled to any judgment in excess of such amount.
25.09 ACCORD AND SATISFACTION
No payment by Tenant or receipt by Landlord of a lesser amount than any
installment or payment of Rent due shall be deemed to be other than on account
of the amount due, and no endorsement or statement on any check or any letter
accompanying any check or payment of Rent shall be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord's right to recover the balance of such installment or payment of Rent
or pursue any other remedies available to Landlord. No receipt of money by
Landlord from Tenant after the termination of this Lease or Tenant's right of
possession of the Premises shall reinstate, continue or extend the Term. Receipt
or acceptance of payment from anyone other than Tenant, including an assignee of
Tenant, is not a waiver of any breach of Article Ten, and Landlord may accept
such payment on account of the amount due without prejudice to Landlord's right
to pursue any remedies available to Landlord.
25.10 LANDLORD'S OBLIGATIONS ON SALE OF BUILDING
In the event of any sale or other transfer of the Building, Landlord shall be
entirely freed and relieved of all agreements and obligations of Landlord
hereunder accruing or to be performed after the date of such sale or transfer
(provided that such transferee shall assume all of Landlord's obligations
hereunder by written agreement for Tenant's benefit and in a commercially-
reasonable form), and any remaining liability of
36
Landlord with respect to this Lease shall be limited to the dollar amount
specified in Section 25.08 and Tenant shall not be entitled to any judgment in
excess of such amount.
25.11 BINDING EFFECT
Subject to the provisions of Article Ten, this Lease shall be binding upon and
inure to the benefit of Landlord and Tenant and their respective heirs, legal
representatives, successors and permitted assigns.
25.12 CAPTIONS
The Article and Section captions in this Lease are inserted only as a matter of
convenience and in no way define, limit, construe, or describe the scope or
intent of such Articles and Sections.
25.13 TIME; APPLICABLE LAW; CONSTRUCTION
Time is of the essence of this Lease and each and all of its provisions. This
Lease shall be construed in accordance with the Laws of the State of California.
If more than one person signs this Lease as Tenant, the obligations hereunder
imposed shall be joint and several. If any term, covenant or condition of this
Lease or the application thereof to any person or circumstance shall, to any
extent, be invalid or unenforceable, the remainder of this Lease, or the
application of such term, covenant or condition to persons or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby and each item, covenant or condition of this Lease shall be
valid and be enforced to the fullest extent permitted by Law. Wherever the term
"including" or "includes" is used in this Lease, it shall have the same meaning
as if followed by the phrase "but not limited to". The language in all parts of
this Lease shall be construed according to its normal and usual meaning and not
strictly for or against either Landlord or Tenant.
25.14 ABANDONMENT [intentionally deleted]
25.15 LANDLORD'S RIGHT TO PERFORM TENANT'S DUTIES
If Tenant fails timely to perform any of its duties under this Lease or the
Workletter, and such failure continues following notice and the applicable cure
period specified in Section 11.01(ii), Landlord shall have the right (but not
the obligation), to perform such duty on behalf and at the expense of Tenant and
all reasonable and actual sums expended by Landlord in performing such duty
shall be deemed to be additional Rent under this Lease and shall be due and
payable upon demand by Landlord.
25.16 SECURITY
Landlord shall provide Tenant with a description of the security system which is
currently in place and Landlord shall contract for an independent security
company to provide security guard patrol during normal business hours and
evening hours during which Tenant is open for business. However, in no event
shall Landlord be responsible for the quality of any such patrol or system which
may be provided hereunder or for damage or injury to Tenant, its employees,
invitees or others due to the failure, action or inaction of such patrol or
system.
25.17 NO LIGHT, AIR OR VIEW EASEMENTS
Any diminution or shutting off of light, air or view by any structure which may
be erected on lands of or adjacent to the Project shall in no way affect this
Lease or impose any liability on Landlord.
37
25.18 RECORDATION
Neither this Lease, nor any notice nor memorandum regarding the terms hereof,
shall be recorded by Tenant. Any such unauthorized recording shall be a Default
for which there shall be no cure or grace period. Each party agrees to execute
and acknowledge, at the request of either party, a memorandum of this Lease, in
recordable form, and in a form reasonably acceptable to Tenant, to include,
without limitation, recitation of Tenant's extension and expansion options
hereunder.
25.19 SURVIVAL
The waivers of the right of jury trial, the other waivers of claims or rights,
the releases and the obligations of the parties under this Lease to indemnify,
protect, defend and hold each other harmless shall survive the expiration or
termination of this Lease, and so shall all other obligations or agreements
which by their terms survive expiration or termination of the Lease.
25.20 RIDERS
All Riders attached hereto and executed both by Landlord and Tenant shall be
deemed to be a part hereof and hereby incorporated herein.
IN WITNESS WHEREOF, this Lease has been executed as of the date set forth in
Section 1.01(4) hereof.
TENANT: LANDLORD:
NORTHPOINT COMMUNICATIONS, INC., ▇▇▇▇▇ STATION ASSOCIATES, LLC,
a DELAWARE corporation a California limited liability company
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------- -------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Managing Member
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------
Its: Vice President Finance & Planning
---------------------------------
38
EXHIBIT B
WORKLETTER AGREEMENT
This Workletter Agreement ("Workletter") is attached to and a part of a
certain Office Lease dated as of , 199 executed concurrently herewith
------ ----
by ▇▇▇▇▇ Station Associates, LLC, a California limited liability company, as
Landlord, and NorthPoint Communications, Inc, a Delaware corporation, as Tenant,
for the Premises as described therein (the "Lease").
1. Defined Terms. Capitalized terms used in this Workletter shall have the
-------------
same meanings set forth in the Lease except as otherwise specified herein and
except for terms capitalized in the ordinary course of punctuation. For purposes
of this Workletter the following capitalized terms have the following meanings:
1.1. "Design Documents" means the layout plans and specifications for
the real property improvements to be constructed by Tenant in the Premises which
are the final product of the preliminary space planning and which include, among
other things, all partitions, doors, HVAC (heating, ventilating and air
conditioning systems) distribution, ceiling systems, light fixtures, plumbing
installations, electrical installations and outlets, telephone installations and
outlets, any other installations required by Tenant, fire and life-safety
systems, wall finishes and floor coverings, whether to be newly installed or
requiring changes from the as-is condition of the Premises as of the date of
execution of the Lease, all in sufficient detail for Landlord's review;
1.2 "Construction Drawings" means the final architectural plans and
specifications, and engineering plans and specifications, for the real property
improvements to be constructed by Tenant in the Premises in sufficient detail to
be submitted for governmental approvals and building permits and to serve as the
detailed construction drawings and specifications for the contractor, and shall
include, among other things, all partitions, doors, HVAC (heating, ventilating
and air conditioning systems) distribution, ceiling systems, light fixtures,
plumbing installations, electrical installations and outlets, telephone
installations and outlets, any other installations required by Tenant, fire and
life-safety systems, wall finishes and floor coverings, whether to be newly
installed or requiring changes from the as-is condition of the Premises as of
the date of execution of the Lease;
1.3 "Tenant Improvements" means all real property improvements to be
constructed by Tenant as shown on the Construction Drawings, as they may be
modified as provided herein;
1.4 "Tenant Improvement Allowance" means an amount not in excess of
the product of thirty-five ($35.00) dollars multiplied by the total rentable
square footage of the Premises, as described in the Lease, to be paid by
Landlord on account of all construction costs, space planning and design fees,
architecture and engineering fees, permit fees and construction management fees
incurred by Tenant in designing and constructing the Tenant Improvements.
1.5 "Landlord Work" means the construction and installation of any
work that Landlord has agreed to perform prior to the delivery of the Premises
to Tenant for construction of the Tenant Improvements. The Landlord Work, if
any, is set forth on Schedule 1 that is attached to this Workletter.
2. Development of Plans
--------------------
2.1 Approval of Architect and Contractor. Tenant's architect,
------------------------------------
contractor, major suppliers and major subcontractors shall each be subject to
the reasonable approval of Landlord. Landlord may request information about
these entities, including financial information and a summary of
representative projects. If Landlord does not approve the architect, contractor,
any major subcontractor or major supplier, the parties shall negotiate in good
faith to select another architect, contractor, subcontractor or materials
supplier mutually acceptable to the parties. Landlord shall be entitled to
withhold its approval of any entity or person, who, in Landlord's reasonable
determination, is financially or otherwise professionally unqualified to design
or construct the Tenant Improvements. Notwithstanding the foregoing, Landlord's
approval of any architect, contractor, subcontractor or materials supplier shall
not constitute Landlord's representation or warranty that any such architect,
contractor, subcontractor or supplier is in fact qualified to perform the Tenant
Improvements.
2.2 Design Documents. Prior to Tenant's commencement of the
----------------
construction of the Tenant Improvements, Tenant shall prepare the Design
Documents and deliver them to Landlord. Within five (5) business days following
delivery of the Design Documents, Landlord shall approve the Design Documents or
deliver to Tenant written notice of their disapproval which shall specify the
changes that must be made to the Design Documents as a condition of Landlord's
approval. Within five (5) business days following receipt of Landlord's notice
of disapproval, Tenant shall deliver a revised set of Design Documents to
Landlord which shall incorporate the changes specified in Landlord's notice of
disapproval. Landlord's failure to specify any such changes during that five (5)
business day period shall be conclusively deemed Landlord's approval of the
Design Documents. Notwithstanding the foregoing, Landlord agrees that it Shall
not disapprove any portion of the Design Documents or any change thereto
required by any applicable governmental agency or which is consistent in all
material respects with the description of the Premises set forth in the space
plan attached to the Lease.
2.3 Construction Drawings. As soon as the Design Documents are
---------------------
approved by Landlord, Tenant shall prepare the Construction Drawings that are
consistent with and logical evolutions of the Design Documents and the Schedule
of Values. The Construction Drawings and Schedule of Values shall be delivered
to Landlord for approval. If Landlord does not approve the Construction Drawings
and/or the Schedule of Values, Landlord shall deliver to Tenant, as soon as
reasonably possible but within three (3) business days following receipt
thereof, written notice of such disapproval. The notice shall specify the
changes that must be made to the Construction Drawings and/or the Schedule of
Values as a condition for obtaining Landlord's approval. Within three (3)
business days following receipt of Landlord's notice of disapproval, Tenant
shall deliver a revised set of Construction Drawings and/or Schedule of Values
to Landlord, which incorporate the changes specified in Landlord's notice of
disapproval. Landlord's failure to specify any such changes during its three (3)
business day review period shall be conclusively deemed Landlord's approval of
the Construction Drawings. Notwithstanding the foregoing, Landlord agrees that
it shall not disapprove any portion of the Construction Drawings or any change
thereto required by any applicable governmental agency; or which is consistent
in all material respects with the description of the Premises set forth in the
Design Documents previously approved by Landlord. Landlord and Tenant shall each
sign a copy of the approved Construction Drawings and Schedule of Values.
2.4 Landlord's Approval. If the Construction Drawings conform to the
-------------------
Design Documents and this Workletter, Landlord's approval shall not be
unreasonably withheld. If the Construction Drawings show work requiring a
modification or change to the shell of the Building, Landlord shall not be
deemed unreasonable if Landlord disapproves such Construction Drawings or if
Landlord conditions its consent to such Construction Drawings upon Tenant's
paying to Landlord, prior to the commencement of construction, the full cost of
modifying or changing the shell of the Building. In any event, any disapproval
of any work or plans by Landlord shall be accompanied by a written statement of
the proposed item, the reason(s) for disapproval, and the specific changes
required to make the item acceptable. Landlord may, at Landlord's option, have
the Design Documents or the Construction Drawings reviewed by Landlord's
architect, engineer and/or construction manager; provided, however, that any
such review shall be performed within the time periods set forth above for
Landlord's review of the Design Documents and the Construction Drawings. In no
event shall the approval by Landlord (or Landlord's architect, engineer or
construction manager) of the Design Documents or the Construction Drawings
constitute a representation or warranty by Landlord (or Landlord's architect,
engineer or construction manager) of: (i) their accuracy, sufficiency or
completeness for their intended purpose; (ii) the absence of
design defects or construction flaws; or (iii) their compliance with applicable
laws. Tenant agrees that Landlord (and Landlord's architect, engineer and
construction manager) shall incur no liability by reason of its approval or
disapproval of any item.
2.5 Compliance with Laws. Tenant covenants, agrees, represents and
--------------------
warrants that the Design Documents and Construction Drawings (i) shall be in a
form satisfactory for filing with appropriate governmental authorities and (ii)
shall conform to all applicable codes, rules, regulations and ordinances of all
governing authorities, including all building codes and the ADA.
2.6 Charges. No material changes shall be made to the Design
-------
Documents or the Construction Drawings without the prior written consent of
Landlord and Tenant. All change orders requested by Tenant shall be made in
writing and shall specify any added or reduced cost resulting therefrom. Any
change proposed by Tenant shall be approved or disapproved by Landlord (and
Landlord's approval shall not been unreasonably withheld or conditioned) within
three (3) business days following Landlord's receipt of detailed information
pertaining to the proposed change. Landlord's failure to disapprove any proposed
change within three (3) business days shall be deemed Landlord's approval
thereof.
3. Construction of Tenant Improvements
-----------------------------------
3.1 Permits and Approvals. Tenant shall submit the Construction
---------------------
Drawings to all appropriate governmental agencies for approval and shall not
commence construction or installation of the Tenant Improvements unless and
until Tenant has obtained all necessary permits and approvals and has delivered
copies of these documents to Landlord.
3.2 Commencement and Completion of Construction. Following Tenant's
-------------------------------------------
satisfaction of all of the requirements of Section 2 above and this Section 3,
Tenant shall commence construction and installation of the Tenant Improvements
in accordance with the Construction Drawings and shall pursue the same
diligently to completion. Tenant covenants to give Landlord at least ten (10)
days' prior written notice of its commencement of construction or delivery of
materials to the Premises to enable Landlord to post a notice of
nonresponsibility respecting the Tenant Improvements.
3.3 Building Systems. Except as permitted by the approved Design
----------------
Documents or Construction Drawings, in no event shall Tenant interfere with the
provision of heating, plumbing, electrical or mechanical system services to the
Building, make any structural changes to the Building, make any changes to the
heating, plumbing, electrical or mechanical systems of the Building, or make any
changes to the Premises which would weaken or impair the structural integrity of
the Building, alter the aesthetic appearance of the Building exterior, or which,
would affect any warranties applicable to the Building or any improvements
constructed or installed by Landlord therein, without Landlord's prior written
consent, which consent may be withheld in Landlord's sole discretion. If Tenant
performs work that pertains to the structure of the building or the building's
systems, Landlord may require Tenant to engage Landlord's structural engineer to
design, supervise and monitor any construction work affecting either the
Building systems or the structure of the Building.
3.4 Inspections. Landlord and its officers, agents or employees shall
-----------
have the right at all reasonable times to enter upon the Premises and inspect
the Tenant Improvements and to determine that the same are in conformity with
the Construction Drawings and all of the requirements of this Workletter. Tenant
acknowledges, however, that Landlord is under no obligation to supervise,
inspect or inform Tenant of the progress of construction and Tenant agrees that
it shall not rely upon Landlord to perform any of these activities. Neither the
inspection rights granted to Landlord in this Workletter, nor the making of such
inspections by Landlord, shall operate as a waiver of any rights of Landlord to
require that the construction and installation of the Tenant Improvements
conform with this Workletter, the Construction Drawings and all requirements of
applicable law.
3.5 Walk-Through of Tenant Improvements. Within two (2) business days
-----------------------------------
following the completion of the Tenant Improvements, Tenant shall notify
Landlord and shall provide Landlord an opportunity to inspect the Tenant
Improvements. Within three (3) business days following Tenant's notice, Landlord
(or its representative) shall (accompanied by Tenant or its representative)
walk-through and inspect Tenant's work on the Tenant Improvements and shall
either approve Tenant's work or advise Tenant in writing of any defects or
uncompleted items that do not substantially conform to the Construction
Drawings. Tenant shall promptly repair such defects or uncompleted items to
Landlord's reasonable satisfaction. Landlord's approval of the Tenant
Improvements, or Landlord's failure to advise Tenant of any defects or
uncompleted items in the Tenant Improvements, shall not relieve Tenant of
responsibility for constructing and installing the Tenant Improvements in
accordance with the Construction Drawings, this Workletter and all applicable
laws.
3.6 Final Documents. Following completion of the Tenant Improvements,
---------------
Tenant shall (a) obtain and deliver to Landlord a copy of the Final Certificate
of Occupancy for the Tenant Improvements from the governmental agency or
agencies having jurisdiction thereof; (b) promptly cause a notice of completion
to be validly recorded for the Tenant Improvements; (c) furnish Landlord with
unconditional waivers of lien in statutory form from all parties performing
labor and/or supplying equipment and/or materials in connection with the Tenant
Improvements, including Tenant's architect(s); (d) deliver to Landlord a
certificate of Tenant's architect(s) certifying completion of the Tenant
Improvements in substantial accordance with the Construction Drawings; (e)
deliver to Landlord a full set of reproducible as-built drawings (signed and
dated by the contractor and each responsible subcontractor) for the Tenant
Improvements; and (f) Tenant shall deliver to Landlord copies of all written
construction and equipment warranties and manuals received by Tenant related to
the Tenant Improvements.
4. Payment of Costs of Tenant Improvements
---------------------------------------
4.1 Tenant's Cost. Any cost incurred in the design or construction of
-------------
the Tenant Improvements in excess of the Tenant Improvement Allowance shall be
borne by Tenant in accordance with the terms and conditions set forth below. The
costs of the Tenant Improvements shall include the following items:
(a) The costs of the architect, contractor, suppliers and
subcontractors and any other consultants retained by Tenant in connection with
the preparation of Design Documents and Constructions Drawings, including,
engineering costs associated with completion of the State of California energy
utilization calculations under Title 24 legislation;
(b) All costs of obtaining from the City of Emeryville and any other
governmental authority, approvals, building permits and occupancy permits, if
any;
(c) All costs of interior design and finish schedule plans and
specifications including as-built drawings;
(d) All costs of procuring, installing and constructing the Tenant
Improvements; and
(e) All costs of designing, procuring, constructing and installing
Tenant Improvements in compliance with all applicable laws, including with all
building codes and the ADA.
In no event shall the Tenant Improvement Allowance be used to pay any costs of
procuring or installing in the Premises any trade fixtures, equipment,
furniture, furnishings, telephone equipment, cabling for any of the foregoing,
or other personal property to be used in the Premises by Tenant, which cost
shall be paid by Tenant.
4.2 Procedure for Disbursement of the Tenant Improvement Allowance.
--------------------------------------------------------------
On or before the twenty-fifth (25th) day of each calendar month during the
construction of the Tenant Improvements, but in no event more frequently than
once every thirty (30) days, Tenant shall deliver to Landlord such invoices
marked paid and Landlord shall pay within thirty (30) days after receipt of such
invoice each amount invoiced by Tenant's architect or Tenant's contractor.
Following substantial completion of the Tenant Improvements and prior to
Landlord's final disbursement of the Tenant Improvement Allowance, Tenant shall
have submitted to Landlord a cost breakdown of Tenant's final and total
construction costs incurred in connection with the Tenant Improvements, together
with receipted invoices showing evidence of full payment therefor; and (b) the
Lease shall be in full force and effect and there shall exist no event of
default under the Lease or this Workletter.
5. Rent Commencement Date. Until the date specified in the Lease as
----------------------
the Rent Commencement Date, the entry by Tenant to perform Tenant Improvements
shall be without payment of Base Monthly Rent or Rent Adjustments, but, from and
after the Delivery Date, such entry and all acts in connection with it are
subject to and governed by all other provisions of the Lease, including without
limitation, Tenant's indemnification and insurance obligations.
As provided in the Lease, the Rent Commencement Date shall be delayed on a
day-for-day basis by each day of delay attributable to Landlord Delay or Force
Majeure. The term "Landlord Delay" as used in this Agreement shall include any
delay in construction of the Tenant Improvements because of any act or omission
by Landlord, its agents, employees, contractors or other representatives,
including any: (1) delay attributable to changes in or additions to the approved
Design Documents or to the approved Construction Drawings requested by Landlord;
(2) delay attributable to the postponement of the design, permitting or
construction of the Tenant Improvements at the request of Landlord; (3) delay by
Landlord in the submission of information (including any plans or drawings) or
the giving of authorizations or approvals within the time limits set forth in
this Agreement; (4) delay attributable to the failure of Landlord to pay, when
due, any amounts required to be paid by Landlord pursuant to this Agreement; (5)
delay attributable to the acts or failures to act, whether willful, negligent or
otherwise, of Landlord, its agents or contractors, where such acts or failures
to act delay the Substantial Completion of the Landlord's Work or the Tenant
Improvements beyond the Projected Commencement Date; (6) unreasonable delay
caused by the failure of the Building to comply with all Laws; or (7) delay
caused by Landlord's failure to allow Tenant uninterrupted access to the
Building to commence and thereafter perform construction of the Tenant
Improvements.
6. General Requirements for Construction
-------------------------------------
6.1 Tenant's Obligation to Construct. Tenant shall construct and
--------------------------------
install the Tenant Improvements in a good and workmanlike manner in accordance
with the Construction Drawings, this Workletter and all applicable laws. Tenant
shall be solely responsible for the payment of all cost and expenses related to
the construction and installation of the Tenant Improvements, subject to
reimbursement by Landlord as provided for in this Workletter.
6.2 Tenant's Access to the Premises. Tenant shall coordinate with the
-------------------------------
Building's project manager for access to the Premises and the scheduling of
construction work. Tenant shall exercise due diligence and best efforts to
ensure that Tenant's construction and installation of the Tenant Improvements
does not unreasonably interfere with the use and enjoyment of other tenants of
the Building or the Project or with the contractors and subcontractors of
Landlord or other tenants that are working in the Building or the Project.
Landlord shall use commercially reasonable efforts to accommodate Tenant's
scheduling of deliveries and construction activities.
6.3 Coordination of Construction Activities. If any shutdown of
---------------------------------------
plumbing, electrical or air conditioning equipment of the Building becomes
necessary during the course of construction of the Tenant Improvements, Tenant
shall notify Landlord and Landlord and Tenant shall agree upon when, and upon
what conditions, such shutdown may be made in order to cause the least
disruption to other tenants in
the Building. Any damage to the Building or the Project caused by Tenant or its
contractor or subcontractors in connection with the construction of the Tenant
Improvements shall be immediately repaired at Tenant's sole cost and expense.
6.4 Protection against Lien Claims. Tenant agrees to fully pay and
------------------------------
discharge all claims for labor done and materials and services furnished in
connection with the construction of the Tenant improvements, to diligently file
or procure the filing of a valid notice of completion within ten (10) days
following completion of construction of the Tenant Improvements, to diligently
file or procure the filing of a notice of cessation upon any cessation of labor
on the Tenant Improvements for a continuous period of thirty (30) days or more,
and to take all reasonable steps to forestall the assertion of claims of lien
against the Premises, the Building or the Project. Upon the request of Landlord,
Tenant shall provide Landlord with satisfactory evidence of the release or
removal (including removal by appropriate surety bond) of all liens recorded
against the Premises, the Project, or any portion thereof, and all stop notices
received by Tenant.
7. Insurance
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7.1 Tenant's Required Insurance Coverage. At least five (5) days
------------------------------------
prior to the date Tenant commences construction of the Tenant Improvements,
Tenant shall submit to Landlord evidence of (i) the insurance coverage required
under Article 16 of the Lease; and (ii) broad form "Builder's Risk" property
damage insurance with limits of not less than one hundred percent (100%) of the
estimated value of the Tenant Improvements. All such policies shall provide that
thirty (30) days' written notice must be given to Landlord prior to termination
or cancellation. The insurance policies shall name Landlord and Landlord's
property manager as additional insureds and shall provide that Landlord,
although an additional insured, may recover for any loss suffered by Landlord or
Landlord's agents by reason of the negligence of Tenant or Tenant's contractors,
subcontractors and/or employees.
7.2 Other Insurance Coverage. At least five (5) business days prior
------------------------
to the date Tenant commences construction of the Tenant Improvements, Tenant
shall deliver to Landlord certificates of insurance from the carrier(s)
providing insurance to Tenant's evidencing the following types of coverage in
such amounts as are reasonably determined by Landlord to be commercially
reasonable for the construction of the Tenant Improvements: (i) commercial
general liability insurance; (ii) workers' compensation insurance; and (iii)
umbrella liability insurance. The insurance specified in (I) and (iii) above
shall name Landlord and Landlord's property manager as additional insureds, and
all such policies shall provide that thirty (30) days' written notice must be
given to Landlord prior to termination or cancellation.
7.3 Waivers of Claims against Landlord. Tenant waives, and Tenant
----------------------------------
shall use reasonable efforts to cause each of its contractors, suppliers and
subcontractors to waive, all rights to recover against Landlord and its agents,
contractors and employees for any loss or damage arising from a cause covered by
insurance required to be carried by Tenant hereunder and shall use reasonable
efforts to cause each respective insurer to waive all rights of subrogation
against Landlord and its agents, contractors and employees in connection
therewith to the same extent.
8. Default and Remedies
--------------------
8.1 Defaults. Each of the following events shall constitute an event
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of default ("Default") under this Workletter:
(a) Failure by Tenant to commence and/or complete construction and
installation of the Tenant Improvements in accordance with the terms and
conditions set forth in this Workletter or the failure by Tenant to comply with
any of the covenants, provisions or conditions of this Workletter which failure
is not corrected by Tenant within thirty (30) days after notice from Landlord
(or if the failure is such that it cannot reasonably be corrected within said
thirty (30) day period, the correction of such failure is not initiated by
Tenant within said thirty (30) day period and thereafter prosecuted diligently
to completion);
(b) Material deviations in construction from the Construction
Drawings without the approval of Landlord, the appearance of defective
workmanship or materials in the construction of the Tenant Improvements which
are not corrected by Tenant within thirty (30) days after notice from Landlord
(or if the defect is such that it cannot reasonably be corrected within said
thirty (30) day period, the correction of such defect is not initiated by Tenant
within said thirty (30) day period and thereafter prosecuted diligently to
completion); and
(c) The Default by Tenant of any material provision of the Lease,
which remains uncured following written notice and the cure period(s) specified
in the Lease, as provided in Article 11.
8.2 Remedies. In the event of a Default by Tenant under this
--------
Workletter, Landlord shall thereafter have no further obligation to disburse any
portion of the Tenant Improvement Allowance unless and until such Default is
cured. Any such Default shall be a default under the Lease and shall entitle
Landlord to exercise all remedies set forth in the Lease.
9. Force and Effect. The terms and conditions of this Workletter
----------------
supplement the Lease and shall be construed to be a part of the Lease and are
incorporated in the Lease. Without limiting the generality of the foregoing, any
default by any party hereunder shall have the same force and effect as a default
under the Lease. Should any inconsistency arise between this Workletter and the
Lease as to the specific matters that are the subject of this Workletter, the
terms and conditions of this Workletter shall control.
10. Miscellaneous. Except as otherwise specifically provided in this
-------------
Agreement, Landlord shall not receive any fee or charge for supervision, profit,
overhead, administration or general conditions in connection with the design or
construction of the Tenant Improvements. Neither Tenant nor its contractors
shall be charged for reasonable use of the parking areas or for the use of
electricity, water, HVAC, building standard security, elevators and/or hoists
during the construction of the Tenant Improvements, provided that Landlord shall
not be required to provide HVAC during the construction of the Tenant
Improvements and Tenant's contractors shall be responsible for protecting and
cleaning the elevators they use.
IN WITNESS WHEREOF, the parties hereto have executed this Workletter as of
the date first set forth in the Lease.
TENANT: LANDLORD:
Northpoint Communications, Inc., ▇▇▇▇▇ STATION ASSOCIATES, LLC,
a Delaware corporation a California limited liability company
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------- -------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Managing Member
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------
Its: Vice President Finance & Planning
---------------------------------
By:
----------------------------------
Print Name:
--------------------------
Its:
---------------------------------
SCHEDULE 1
LANDLORD'S WORK
ARCHITECTURAL
-------------
* Common Areas will be completed by Landlord. These include exterior courtyard
landscaping, the main lobby, Wintergarden and aerobics room at the ground level.
* Bathrooms will be completed on all floors (one in each wing on the big floors
and one central bathroom on the ▇▇▇ ▇▇▇▇▇). ▇▇▇▇▇ fountains are adjacent to each
bathroom.
* Common elevator lobbies will be completed on multi-tenant floors (e.g. 2nd and
4th floors); the elevator lobby on the 5th floor will be private to Tenant and
can be designed by them. All elevator cabs are by Landlord.
* Terraces are finished by Landlord. The base building includes access doors to
the terraces in certain locations; additional doors can be added by Tenant.
Ramps to these doors inside the Premises (where required by code) shall be part
of Tenant work.
* Landlord encloses the exterior (i.e. with brick panels and glass windows,
which are operable on the north and east sides). Interior framing/sheet rocking
and insulation of the perimeter wall and columns of the Premises plus window
miniblinds shall be part of Tenant Work. Landlord has agreed to allow Tenant to
install miniblinds in the building-standard color/material WITHOUT the
perforations.
ELECTRICAL/TELEPHONE/SECURITY
-----------------------------
* Main electrical service enters the building at the main electrical room at
grade on the southwest corner. From there, bus ducts supply individual
electrical rooms in each wing (plus the central electrical room on the ▇▇▇
▇▇▇▇▇). The electrical room on the 4th floor south and on the 5th floor will not
be shared with tenants other than Tenant.
* The Building's main telecom room is at grade immediately north of the east
lobby. It connects via two 4" conduits to the Pacbell vault out in Peladeau
street. Landlord has installed conduit from the main telecom room up to the
central telephone room on each floor.
* Landlord's security system secures the project perimeter plus all primary
access points and the wing elevators. Security from the suite door(s) and inside
the Premises is Tenant's responsibility.
PLUMBING
--------
* Main domestic water and waste risers serve each floor and can be connected to
for Tenant kitchenettes, etc.
* A live fire sprinkler system is provided in a base building configuration.
HVAC
----
* A central chiller and cooling tower are provided by Landlord, as is the boiler
system for heat. Three individual fan rooms supply three separate, fully-
installed HVAC supply loops per large floor; the 5th floor has a single supply
loop. Distribution off the loops is Tenant's TI responsibility.
* Condenser water stubs exist at each floor. Landlord can supply affordable
condenser water to Tenant for certain above-standard HVAC needs.
EXHIBIT C
RULES AND REGULATIONS
1. No sidewalks, entrance, passages, courts, elevators, vestibules, stairways,
corridors or halls shall be obstructed or encumbered by Tenant or used for any
purpose other than ingress and egress to and from the Premises and if the
Premises are situated on the ground floor of the Project, Tenant shall further,
at Tenant's own expense, keep the sidewalks and curb directly in front of the
Premises clean and free from rubbish.
2. No awning or other projection shall be attached to the outside walls or
windows of the Project without the prior written consent of Landlord. No
curtains, blinds, shades, drapes or screens shall be attached to or hung in, or
used in connection with any window or door of the Premises, without the prior
written consent of Landlord. Such awnings, projections, curtains, blinds,
shades, drapes, screens and other fixtures must be of a quality, type, design,
color, material and general appearance approved by Landlord, and shall be
attached in the manner approved by Landlord. All lighting fixtures hung in
offices or spaces along the perimeter of the Premises must be of a quality,
type, design, bulb color, size and general appearance approved by Landlord.
3. No sign, advertisement, notice, lettering, decoration or other thing shall
be exhibited, inscribed, painted or affixed by Tenant on any part of the outside
or inside of the Premises or of the Project, without the prior written consent
of Landlord. In the event of the violation of the foregoing by Tenant, Landlord
may remove same without any liability, and may charge the expense incurred by
such removal to Tenant.
4. The sashes, sash doors, skylights, windows and doors that reflect or admit
light or air into the halls, passageways or other public places in the Project
shall not be covered or obstructed by Tenant, nor shall any bottles, parcels or
other articles be placed on the window ▇▇▇▇▇ or in the public portions of the
Project.
5. No showcases or other articles shall be put in front of or affixed to any
part of the exterior of the Project, nor placed in public portions thereof
without the prior written consent of Landlord.
6. The water and wash closets and other plumbing fixtures shall not be used for
any purposes other than those for which they were constructed, and no sweepings,
rubbish, rags or other substances shall be thrown therein. All damages resulting
from any misuse of the fixtures shall be borne by Tenant to the extent that
Tenant or Tenant's agents, servants, employees, contractors, visitors or
licensees shall have caused the same.
7. Tenant shall not ▇▇▇▇, paint, drill into or in any way deface any part of
the Premises or the Project. No boring, cutting or stringing of wires shall be
permitted, except with the prior written consent of Landlord, and as Landlord
may direct.
8. No animal or bird of any kind shall be brought into or kept in or about the
Premises or the Project, except seeing-eye dogs or other seeing-eye animals,
including seeing-eye mammals and seeing-eye geese. Tenant shall be allowed to
have fish in aquariums so long as such aquariums are sufficiently earthquake-
secure and do not overload the structural capacity of the Building floor.
9. Intentionally omitted.
10. Tenant shall not make, or permit to be made, any unseemly or disturbing
noises or disturb or interfere with occupants of the Project, or neighboring
buildings or premises, or those having business with them. Tenant shall not
throw anything out of the doors, windows or skylights or down the passageways.
11. Neither Tenant nor any of Tenant's agents, servants, employees,
contractors, visitors or licensees shall at any time bring or keep upon the
Premises any flammable, combustible or explosive fluid, chemical or substance.
UPS batteries, when installed and maintained in safe and code-compliant manner,
are allowed.
12. Without Landlord's reasonable approval, which will not be withheld nor
delayed, no additional locks, bolts or mail slots of any kind shall be placed
upon any of the doors or windows by Tenant, nor shall any change be made in
existing locks or the mechanism thereof. Tenant must, upon the termination of
the tenancy, restore to Landlord all keys of stores, offices and toilet rooms,
either furnished to, or otherwise procured by Tenant, and in the event of the
loss of any keys so furnished, Tenant shall pay to Landlord the cost thereof.
13. All removals, or the carrying in or out of any safes, freight, furniture,
construction material, bulky matter or heavy equipment of any description must
take place during the hours which Landlord or its agent may determine from time
to time. Landlord reserves the right to prescribe the weight and position of all
safes, which must be placed upon two-inch thick plank strips to distribute the
weight. The moving of safes, freight, furniture, fixtures, bulky matter or heavy
equipment of any kind must be made upon previous notice to the Building Manager
and in a manner and at times prescribed by him, and the persons employed by
Tenant for such work are subject to Landlord's prior approval. Landlord reserves
the right to inspect all safes, freight or other bulky articles to be brought
into the Project and to exclude from the Project all safes, freight or other
bulky articles which violate any of these Rules and Regulations or the Lease of
which these Rules and Regulations are a part.
14. Tenant shall not purchase spring water, towels, janitorial or maintenance
or other like service from any company or persons not approved by Landlord.
Landlord shall approve a sufficient number of sources of such services to
provide Tenant with a reasonable selection, but only in such instances and to
such extent as Landlord in its judgment shall consider consistent with security
and proper operation of the Project.
15. Landlord shall have the right to prohibit any advertising or business
conducted by Tenant referring to the Project which, in Landlord's opinion, tends
to impair the reputation of the Project or its desirability as a first class
building for offices and/or commercial services and upon notice from Landlord,
Tenant shall refrain from or discontinue such advertising.
16. Landlord reserves the right to exclude from the Project between the hours
of 6:00 p.m. and 8:00 a.m. Monday through Friday, after 1:00 p.m. on Saturdays
and at all hours Sundays and legal holidays, all persons who do not present a
pass to the Project issued by Landlord. Landlord may furnish passes to Tenant so
that Tenant may validate and issue same. Tenant shall safeguard said passes and
shall be responsible for all acts of persons in or about the Project who possess
a pass issued to Tenant.
17. Tenant's contractors shall, while in the Premises or elsewhere in the
Project, be subject to and under the control and direction of the Building
Manager (but not as agent or servant of said Building Manager or of Landlord).
18. If the Premises is or becomes infested with vermin as a result of the use
or any misuse or neglect of the Premises by Tenant, its agents, servants,
employees, contractors, visitors or licensees, Tenant shall forthwith at
Tenant's expense cause the same to be exterminated from time to time to the
satisfaction of Landlord and shall employ such licensed exterminators as shall
be approved in writing in advance by Landlord.
19. The requirements of Tenant will be attended to only upon application at the
Office of the Project. Project personnel shall not perform any work or do
anything outside of their regular duties unless under special instructions from
the office of the Landlord.
20. Canvassing, soliciting and peddling in the Project are prohibited and
Tenant shall cooperate to prevent the same.
21. No water cooler, air conditioning unit or system or other apparatus shall
be installed or used by Tenant without the written consent of Landlord, not to
be unreasonably withheld. Small, portable air conditioning units are allowed for
temporary needs.
22. There shall not be used in any premises, or in the public halls, plaza
areas, lobbies, or elsewhere in the Project, either by Tenant or by jobbers or
others, in the delivery or receipt of merchandise, any hand trucks or dollies,
except those equipped with rubber tires and sideguards.
23. Tenant, Tenant's agents, servants, employees, contractors, licensees, or
visitors shall not park any vehicles in any driveways, service entrances, or
areas posted "No Parking" and shall comply with any other parking restrictions
imposed by Landlord from time to time.
24. Tenant shall install and maintain, at Tenant's sole cost and expense, an
adequate visibly marked (at all times properly operational) fire extinguisher
next to any duplicating or photocopying machine or similar heat producing
equipment, which may or may not contain combustible material, in the Premises.
25. Intentionally omitted.
26. Tenant shall not use the name of the Project for any purpose other than as
the address of the business to be conducted by Tenant in the Premises, nor shall
Tenant use any picture of the Project in its advertising, stationery or in any
other manner without the prior written permission of Landlord. Landlord
expressly reserves the right at any time to change said name without in any
manner being liable to Tenant therefor.
27. Tenant shall not prepare any food nor do any cooking, operate or conduct
any restaurant, luncheonette or cafeteria for third parties not associated with
its business. No odors of cooking or other processes may emanate from the
Premises.
28. The Premises shall not be used as an employment agency, a public
stenographer or typist, a labor union office, a physician's or dentist's office,
a dance or music studio, a school, a beauty salon, or ▇▇▇▇▇▇ shop, the business
of photographic, multilith or multigraph reproductions or offset printing (not
precluding using any part of the Premises for photographic, multilith or
multigraph reproductions solely in connection with Tenant's own business and/or
activities), a restaurant or bar, an establishment for the sale of
confectionery, soda, beverages, sandwiches, ice cream or baked goods, an
establishment for preparing, dispensing or consumption of food or beverages of
any kind in any manner whatsoever, or news or cigar stand, or a radio,
television or recording studio, theatre or exhibition-hall, or manufacturing, or
the storage or sale of merchandise, goods, services or property of any kind at
wholesale, retail or auction, or for lodging, sleeping or for any immoral
purposes.
29. Business machines and mechanical equipment shall be placed and maintained
by Tenant at Tenant's expense in settings sufficient in Landlord's judgment to
absorb and prevent vibration, noise and annoyance. Tenant shall not install any
machine or equipment which causes noise, heat, cold or vibration to be
transmitted to the structure of the building in which the Premises are located
without Landlord's prior written consent, which consent may be conditioned on
such terms as Landlord may require. Tenant shall not place a load upon any floor
of the Premises exceeding the floor load per square foot that such floor was
designed to carry and which is allowed by Law.
30. Tenant shall not bring any Hazardous Materials onto the Premises except for
those that are in general commercial use and are incidental to Tenant's business
office operations and only in quantities suitable for immediate use.
31. Tenant shall not store any vehicle within the parking area. Tenant's
parking rights are limited to the use of parking spaces for short-term parking,
of up to twenty-four (24) hours, of vehicles utilized in the
normal and regular daily travel to and from the Project. Tenants who wish to
park a vehicle for longer than a 24-hour period shall notify the Building
Manager for the Project and consent to such long-term parking may be granted for
periods up to two (2) weeks. Any motor vehicles parked without the prior written
consent of the Building Manager for the Project for longer than a 24-hour period
shall be deemed stored in violation of this rule and regulation and shall be
towed away and stored at the owner's expense or disposed of as provided by Law.
32. Smoking is prohibited in the Premises, the Building and all enclosed Common
Areas of the Project, including all lobbies, all hallways, all elevators and all
lavatories.
RIDER 1
COMMENCEMENT DATE AGREEMENT
, a ("Landlord"), and
------------------------- -------------------------
, a ("Tenant"), have entered,
------------------------- -------------------------
into a certain Office Lease dated as of , 199 (the "Lease").
-- ------
WHEREAS, Landlord and Tenant wish to confirm and memorialize the Commencement
Date and Expiration Date of the Lease as provided for in Section 2.02(b) of the
Lease;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein and in the Lease, Landlord and Tenant agree as follows:
1. Unless otherwise defined herein, all capitalized terms shall have the
same meaning ascribed to them in the Lease.
2. The Commencement Date (as defined in the Lease) is .
------------------
3. The Expiration Date (as defined in the Lease) of the Lease is .
-------
4. Tenant hereby confirms the following:
(a) That it has accepted possession of the premises pursuant to the
terms of the Lease;
(b) That the Landlord Work is Substantially Complete; and
(c) That the Lease is in full force and effect.
5. Except as expressly modified hereby, all terms and provisions of the
Lease are hereby ratified and confirmed and shall remain in full force and
effect and binding on the parties hereto.
6. The Lease and this Commencement Date Agreement contain all of the
terms, covenants, conditions and agreements between the Landlord and the Tenant
relating to the subject matter herein. No prior other agreements or
understandings pertaining to such matters are valid or of any force and effect.
TENANT: LANDLORD:
------------------------------------- --------------------------------------
a a
----------------------------------- ------------------------------------
By: By:
---------------------------------- ----------------------------------
Print Name: Print Name:
-------------------------- --------------------------
Its: Its:
--------------------------------- ---------------------------------
ADDENDUM TO OFFICE LEASE
This Addendum to Office Lease is attached to and forms a part of that
certain Office Lease by and between ▇▇▇▇▇ Station Associates, LLC ("Landlord")
and NorthPoint Communications Inc. ("Tenant") for premises located in the
building located at ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇. Words and terms that
are defined in the Lease shall have the same meaning in this Addendum as the
meaning provided in the Lease. In the event of any inconsistency between the
terms of this Addendum and the Lease, the terms of this Addendum shall control.
1. Expansion Option
----------------
(a) Subject to the expansion rights of Ask Jeeves, Inc., Tenant may
lease additional space on the fourth floor of the Project ("4th Floor Expansion
Option Space") under the following terms and conditions. Landlord shall provide
Tenant with notice if Ask Jeeves, Inc. does not exercise its expansion option(s)
("Expansion Notice"). Tenant shall have a period of fifteen (15) days after
receipt of the Expansion Notice to notify Landlord of its election to lease the
4th Floor Expansion Option Space ("Expansion Option")
(b) If Tenant properly exercises its Expansion Option:
1. Landlord shall deliver for lease to Tenant the 4th Floor
Expansion Space for a term commencing on the date of Substantial Completion of
the space if the tenant improvements are constructed by Landlord and 90 days
after delivery of the space to Tenant if the tenant improvements are constructed
by Tenant and expiring on the Expiration Date of this Lease.
2. The Base Monthly Rent for the 4th Floor Expansion Space shall
be determined in accordance with the schedule of Base Monthly Rent set forth in
the Basic Lease Information. The Base Year for the 4th Floor Expansion Space
shall be the year such space is incorporated into the Premises.
3. Landlord will provide an allowance of $35.00 per rentable
square foot and, the tenant improvements will be constructed in such expansion
space in accordance with the construction procedures established by and the
terms and conditions of the Work Letter.
(c) Landlord shall prepare an amendment to this Lease to reflect
changes in the Premises, Monthly Base Rent, Tenant's Share, the number of
parking spaces allocated to Tenant, the Security Deposit and other appropriate
terms. A copy of the amendment shall be sent to Tenant within a reasonable time
after exercise of the Expansion Option and shall be executed by Tenant and
returned to Landlord for its execution. Upon delivery to Tenant of the 4th Floor
Expansion Option Space, it shall be considered Premises, subject to all terms
and conditions of this Lease.
(d) This Expansion Option is personal to Tenant and may not be
transferred or assigned in connection with an assignment or sublease of the
Premises except to an Affiliate of Tenant. Further, Tenant may not exercise this
Expansion Option if it enters into subleases for more than 10,000 square feet of
Rentable Area of the Premises to entities other than an Affiliate.
(e) Notwithstanding anything to the contrary contained, herein, the
Expansion Option shall terminate at Landlord's option and upon notice to Tenant,
and shall be of no further force and effect, whether or not Tenant has timely
exercised such option if a material, monetary Default exists at the time of
exercise of the Expansion Option or at the time of its commencement, provided
that Landlord previously has given Tenant notice and an opportunity to cure such
Default as required by the Lease.
2. Option to Extend.
-----------------
(a) Landlord hereby grants Tenant an option to extend the term of the
Lease for one additional period of five (5) years, commencing immediately after
the expiration of the initial term, upon the same material terms and conditions
contained herein, except that (i) the Monthly Base Rent for the Premises shall
be equal to ninety-five percent (95%) of the fair market rent for the Premises
determined in the manner set forth in subparagraph (b) below, (ii) Tenant shall
accept the Premises in an "as is" condition without any obligation of Landlord
to repaint, remodel, repair, improve or alter the Premises, except to the extent
that the determination of fair market rent includes improvements and/or an
improvement allowance (iii) the Base Years for Taxes and Expenses shall be the
calendar year in which the renewal term commences, and (iv) there shall be no
further options to extend the term of the Lease. The determination of "fair
market rent" shall take into account and reflect any then market tenant
improvements, improvement allowances and moving allowances, rent abatement and
other concessions and inducements then being offered for comparable space in
comparable buildings in the market area of the Premises. For example, if the
then fair market rent includes a $10 per rentable square foot improvement
allowance and three months of free rent, then, at Landlord's option, Tenant
shall either receive these actual inducements, or have their value factored into
Tenant's base rent for the renewal term, so that if Landlord chooses the latter
option Tenant's base rental would be reduced by the value of these inducements.
Tenant's election to exercise the option granted herein must be given to
Landlord in writing no less than 270 days prior to expiration of the initial
term. If Tenant properly exercises the option granted herein, references in the
Lease to the term shall be deemed to mean the option term unless the context
clearly provides otherwise. Notwithstanding anything to the contrary contained
herein, this extension option shall be conditioned upon Tenant not being in
material, monetary Default under the Lease at the time Tenant gives Landlord its
notice of exercise, provided that Landlord must have previously provided Tenant
written notice and an opportunity to cure any such Default as required by the
Lease.
(b) If Tenant properly exercises its option to extend the term of the
Lease, the Monthly Base Rent during the option term shall be determined in the
following manner. The Monthly Base Rent shall be adjusted to an amount equal to
ninety-five percent (95%) of the fair market rent for the Premises as of the
commencement of the option term for a term equal to the option term, as
specified by Landlord by notice to Tenant not less than two hundred forty (240)
days prior to commencement of the option term, subject to Tenant's right of
arbitration as set forth below. If Tenant believes that the fair market rent
specified by Landlord exceeds the actual fair market rent for the Premises as of
commencement of the option term, then Tenant shall so notify Landlord within
thirty (30) days following receipt of Landlord's notice. If Tenant fails to so
notify Landlord within said thirty (30) days, Landlord's determination of the
fair market rent for the Premises shall be final and binding upon the parties.
For a period of ten (10) business days after the date Tenant provides Landlord
its notification of objection to such fair market rent, the parties shall
negotiate in good faith and endeavor to agree upon the fair market rent, and in
any event at the end of such ten business day period (the "Agreement Date"),
Tenant shall (x) accept Landlord's determination, or (y) give Landlord notice
that Tenant elects to proceed to arbitration. If the parties agree on the fair
market rent on or before the Agreement Date, they shall promptly execute an
amendment to this Lease setting forth such agreed upon rental terms. If
arbitration is elected, the parties shall complete the arbitration process as
follows:
(1) Within twenty (20) business days after the Agreement Date,
if the parties have not otherwise agreed upon the fair market rent, Tenant, at
its sole expense, shall obtain and deliver in writing to Landlord a
determination of the fair market rent for the Premises for a term equal to the
option term from a broker ("Tenant's broker") licensed in the State of
California and engaged in the office brokerage business in the area of Oakland,
Emeryville and Berkeley, California, for at least the immediately preceding five
(5) years. If Landlord accepts such determination, the Monthly Base Rent for the
option term shall be adjusted to an amount equal to the amount determined by
Tenant's broker.
(2) If Landlord does not accept such determination, within 15
days after receipt of the determination of Tenant's broker, Landlord shall
designate a broker ("Landlord's broker") licensed in
the State of California and engaged in the office brokerage business in the area
of Oakland, Emeryville and Berkeley, California, for at least the immediately
preceding five (5) years. Landlord's broker and Tenant's broker shall name a
third broker, similarly qualified, within five (5) days after the appointment of
Landlord's broker. Each of said three brokers shall determine the fair market
rent for the Premises as of the commencement of the option term for a term equal
to the option term of the Lease within 15 days after the appointment of the
third broker. If the difference between the determination of Landlord's broker
and Tenant's broker is ten percent (10%) or less of the higher determination,
then the average between the two determinations shall be the fair market rent.
If said difference is greater than ten percent (10%), then the two brokers shall
within twenty (20) days of the date that the later submittal is submitted to the
parties designate a third broker who shall also be licensed in the State of
California and engaged in the office brokerage business in the area of Oakland,
Emeryville and Berkeley, California, for at least the immediately preceding five
(5) years .The sole responsibility of the third broker will be to determine
which of the determinations made by the first two brokers is most accurate. The
third broker shall have no right to propose a middle ground or any modification
of either of the determinations made by the first two brokers. The third
broker's choice shall be submitted to the parties within thirty (30) days after
his or her selection. Such determination shall bind both of the parties and
shall establish the fair market rent.
(3) Landlord shall pay the costs and fees of Landlord's broker
in connection with any determination hereunder, and Tenant shall pay the costs
and fees of Tenant's broker in connection with such determination. The costs and
fees of any third broker shall be paid one-half by Landlord and one half by
Tenant.
(c) If the amount of the fair market rent is not known as of the
commencement of the option term, then Tenant shall continue to pay the Monthly
Base Rent in effect at the expiration of the initial term until the amount of
the fair market basic rent is determined. When such determination is made,
Tenant shall pay any deficiency to Landlord, and Landlord shall refund to
Tenant, or allow as a credit against ensuing Rent payments, any overpayment,
upon demand.
3. Right of First Offer.
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(a) Tenant shall have the right of first offer (the "Right of First
Offer") to lease Available Premises (as hereinafter defined in Paragraph 2 (b))
which becomes available in the Building, subject, however to the rights of other
tenants which are in existence as of the Date of Lease.
(b) Available Premises shall mean space in the Building which is or
becomes available to lease. Space shall not be deemed to be Available Premises
if there is a lease, lease option or any right or option of extension, renewal,
expansion, or if an existing tenant renews or extends its term pursuant to the
terms of an extension right.
(c) Before offering the Available Space to anyone else, Landlord
shall give Tenant written notice of any Available Space (the "Available Space
Notice"). After receipt of the Available Space Notice, Landlord and Tenant shall
negotiate, in good faith, for a period of thirty (30) days to try to reach
agreement upon the terms and conditions upon which Tenant will lease the
Available Space. The parties acknowledge that the term and rent for the
Available Space may not be the same as the Term and Monthly Base Rent of the
Premises. If Landlord and Tenant reach an agreement for leasing the Additional
Space, Landlord shall prepare an amendment to this Lease to reflect changes in
the Premises, Monthly Base Rent, Tenant's Share, the number of parking spaces
allocated to Tenant, the Security Deposit and other appropriate terms. A copy of
the amendment shall be sent to Tenant with in a reasonable time after exercise
and executed by Tenant and returned to Landlord for its execution. Upon delivery
to Tenant of the Available Space, it shall be considered Premises, subject to
all terms and conditions of this Lease.
(d) If, after such period of good faith negotiations, Landlord and
Tenant are unable to reach an agreement for the lease of the Available Space,
Tenant's rights with respect to the space covered by the Available Space Notice
shall be null and void and Landlord shall be free to enter into negotiations
with
other prospective tenants and enter into a lease for such space upon such terms
and conditions it may choose.
(e) This Right of First Offer is personal to Tenant and may not be
transferred or assigned in connection with an assignment or sublease of the
Premises except to an Affiliate of Tenant. Further, Tenant may not exercise the
Right of First Offer if it enters into subleases for more than 10,000 square
feet of Rentable Area of the Premises to entities other than an Affiliate.
(f) Notwithstanding anything to the contrary contained herein, the
Right of First Offer shall terminate at Landlord's option and upon notice to
Tenant, and shall be of no further force and effect, whether or not Tenant has
timely exercised such right, if a material, monetary Default exists at the time
of exercise of the Right of First Offer or at the time of the commencement of
the term for the first offer space, provided that Landlord previously has given
Tenant notice and an opportunity to cure such Default as required by the Lease.
4. Right of First Offer to Lease Phase 2 Site of ▇▇▇▇▇ Station.
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(a) Tenant shall have the right of first offer (the "Phase 2 Right of
First Offer") to lease the building which is projected to be developed on the
Phase 2 site which is adjacent to the Project (the "Phase 2 Building").
(b) Tenant acknowledges, understands and agrees that (i) Landlord may,
for any reason, elect not to construct the Phase 2 Building and that Landlord
has not made any representations or warranties regarding either the certainty of
such construction, the timing of such construction or the availability of
proceeds to construct such building and (ii) the decision to construct the Phase
2 Building may require the consent of the Boards of Directors of the members of
Landlord and such consent may or may not be forthcoming.
(c) Landlord shall provide Tenant written notice of its decision to
commence construction of the Phase 2 Building and the date of commencement of
such construction (the "Phase 2 Notice"). Tenant shall have a period equal to
the later of 120 days after the date of commencement of construction or April 1,
2000 in which to notify Landlord of its election to lease the Phase 2 Building
on the following terms and conditions:
(i) Term-10 years.
(ii) Tenant Improvement Allowance-$40.00 per usable square foot
(iii) Shell Condition-Substantially similar to the shell
condition of the Building
(iv) Rent-12% return-on-costs (including land costs, hard
costs, soft costs and financing costs of the land and improvements ) but not
more than $2.50 per square feet of Rentable Area per annum. The rent shall be
increased 3% per annum on the anniversary date of each year of the Term.
(v) Net lease-The lease for the Phase 2 Building shall be a
net lease and Tenant shall pay its proportionate share of all Operating Expenses
and Taxes from and after the commencement date of the lease.
(vi) Additional terms and conditions-Within 30 days after
Tenant exercises its Phase 2 Right of First Offer, Landlord and Tenant shall
enter into a lease utilizing the form of this Lease, modified as appropriate to
reflect the particulars of the Phase 2 Building terms and conditions.
(vii) Tenant shall have the rights for exterior building signage
so long as it personally occupies no less than 50% of the Phase 2 building.
Such signage shall be subject to landlord's reasonable approval regarding size,
exact location and design.
(d) Notwithstanding anything herein contained to the contrary, at the
time Tenant exercises the Phase 2 Right of First Offer, the creditworthiness of
Tenant must be reasonably commensurate with the creditworthiness of a tenant who
would be financially qualified to enter into this type of lease for this amount
and type of space in other Class A buildings in Emeryville, California.
(e) This Phase 2 Right of First Offer is personal to Tenant and may
not be transferred or assigned in connection with an assignment or sublease of
the Premises except to an Affiliate of Tenant. Further, Tenant may not exercise
the Right of First Offer if it enters into subleases for more than 10,000 square
feet of Rentable Area of the Premises to entities other than an Affiliate.
Landlord shall have the right at any time to assign its rights and obligations
herein regarding Phase 2 to an affiliate or to a third party so long as such
assignee assumes all obligations to Tenant relating thereto.
(f) Notwithstanding anything to the contrary contained, herein, the
Phase 2 Right of First Offer shall terminate at Landlord's option and upon
notice to Tenant, and shall be of no further force and effect, whether or not
Tenant has timely exercised such right, if a material, monetary Default exists
at the time of exercise of the Phase 2 Right of First Offer or at the time of
the commencement of the term for the first offer space, provided that Landlord
previously has given Tenant notice and an opportunity to cure such Default as
required by the Lease.
5. Public Transportation. Landlord agrees to have the ▇▇▇▇▇-Go-Round
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connection to BART extended to 10:30 PM weeknights or, alternatively, to engage
a private van company to provide such service.
6. Emergency Generator. Tenant shall have the right, at its sole cost and
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expense, to access the Building's emergency generator for emergency
communications and data equipment power. The right to access the emergency
generator shall be subject to Tenant's compliance with such reasonable terms and
conditions as Landlord may establish from time to time.
7. Roof Access/Satellite Dishes. Tenant shall have the non-exclusive right
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to install and maintain no more than two (2) small dishes (i.e. less than 18"
diameter) and no more than two (2) large dishes (i.e. no more than 60" in
diameter) on the roof for its own business use. Such rights shall require Tenant
to: (I) keep the roof area in a warrantable and working condition, (ii) to
adequately screen the dishes from view in an acceptably aesthetic manner, (iii)
not adversely impact the operations of the Building nor of other tenants, (iv)
not adversely impact the health of Building occupants, (v) comply with all
relevant laws, codes, etc., and (vi) remove the dishes and restore the roof to
its original condition, reasonable wear and tear and damage not caused by Tenant
excepted, at the end of the Lease Term.