EXHIBIT 10.28
-------------
OFFICE LEASE
▇▇▇▇▇▇ CENTER
BRE/▇▇▇▇▇▇ LEASEHOLD LLC,
a Delaware limited liability company,
as Landlord,
and
SALON MEDIA GROUP, INC.,
a Delaware corporation,
as Tenant.
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE 1 PREMISES, BUILDING, PROJECT, AND COMMON AREAS.....................3
ARTICLE 2 LEASE TERM........................................................4
ARTICLE 3 BASE RENT.........................................................4
ARTICLE 4 ADDITIONAL RENT...................................................4
ARTICLE 5 USE OF PREMISES..................................................10
ARTICLE 6 SERVICES AND UTILITIES...........................................10
ARTICLE 7 REPAIRS..........................................................12
ARTICLE 8 ADDITIONS AND ALTERATIONS........................................12
ARTICLE 9 COVENANT AGAINST LIENS...........................................14
ARTICLE 10 INSURANCE........................................................14
ARTICLE 11 DAMAGE AND DESTRUCTION...........................................16
ARTICLE 12 NONWAIVER........................................................17
ARTICLE 13 CONDEMNATION.....................................................18
ARTICLE 14 ASSIGNMENT AND SUBLETTING........................................18
ARTICLE 15 SURRENDER OF PREMISES; OWNERSHIP AND REMOVAL OF
TRADE FIXTURES...................................................21
ARTICLE 16 HOLDING OVER.....................................................22
ARTICLE 17 ESTOPPEL CERTIFICATES............................................22
ARTICLE 18 SUBORDINATION....................................................22
ARTICLE 19 DEFAULTS; REMEDIES...............................................23
ARTICLE 20 COVENANT OF QUIET ENJOYMENT......................................25
ARTICLE 21 SECURITY DEPOSIT.................................................25
ARTICLE 22 SUBSTITUTION OF OTHER PREMISES...................................26
ARTICLE 23 SIGNS............................................................26
ARTICLE 24 COMPLIANCE WITH LAW..............................................26
ARTICLE 25 LATE CHARGES.....................................................27
ARTICLE 26 LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT.............27
ARTICLE 27 ENTRY BY LANDLORD................................................27
ARTICLE 28 TENANT PARKING...................................................28
ARTICLE 29 MISCELLANEOUS PROVISIONS.........................................29
EXHIBITS:
A OUTLINE OF PREMISES
B TENANT WORK LETTER
C FORM OF NOTICE OF LEASE
D RULES AND REGULATIONS
E FORM OF TENANT'S ESTOPPEL CERTIFICATE
(i)
INDEX
-----
Page(s)
-------
Additional Rent..............................................................5
Alterations.................................................................12
Apartment Portion............................................................3
Applicable Laws.............................................................26
Base Building...............................................................13
Base Rent....................................................................4
Base Year....................................................................5
Base Year Prop 13 Taxes......................................................8
Brokers.....................................................................32
Building.....................................................................3
Building Common Areas........................................................4
Building Hours..............................................................10
Common Areas.................................................................3
Control,....................................................................21
Coordinator.................................................................32
Cost Pools...................................................................8
Direct Expenses..............................................................5
Estimate.....................................................................9
Estimate Statement...........................................................9
Estimated Excess.............................................................9
Excess.......................................................................9
Expense Year.................................................................5
Force Majeure...............................................................30
Holidays....................................................................10
HVAC........................................................................10
Landlord.....................................................................1
Landlord Parties............................................................14
Landlord Repair Notice......................................................16
Lease........................................................................1
Lease Commencement Date......................................................4
Lease Expiration Date........................................................4
Lease Term...................................................................4
Lease Year...................................................................4
Lines.......................................................................33
Mail........................................................................31
Notices.....................................................................31
One ▇▇▇▇▇▇ Office Portion....................................................3
One ▇▇▇▇▇▇ Retail Portion....................................................3
On-site Parking Area.........................................................3
Operating Expenses...........................................................5
Original Improvements.......................................................15
Other Improvements..........................................................34
Postal Facility..............................................................3
Premises.....................................................................3
Project......................................................................3
Project Common Areas.........................................................3
Proposition 13...............................................................7
Reassessement................................................................8
Renovations.................................................................32
Rent.........................................................................5
Requesting Party............................................................22
Security Deposit............................................................25
Seismic Upgrades............................................................33
Statement....................................................................9
Subject Space...............................................................18
Summary......................................................................1
Tax Expenses.................................................................7
Tenant.......................................................................1
Tenant Personal Property....................................................22
(ii)
INDEX
-----
Page(s)
-------
Tenant Work Letter...........................................................3
Tenant's Share...............................................................8
TMP.........................................................................32
Transfer....................................................................20
Transfer Notice.............................................................18
Transfer Premium............................................................20
Transferee..................................................................18
Transfers...................................................................18
Two ▇▇▇▇▇▇ Office Portion....................................................3
(iii)
▇▇▇▇▇▇ CENTER
-------------
OFFICE LEASE
------------
This Office Lease (the "LEASE"), dated as of the date set forth in
Section 1 of the Summary of Basic Lease Information (the "SUMMARY"), below, is
made by and between BRE/▇▇▇▇▇▇ II LEASEHOLD L.L.C., a Delaware limited liability
company ("LANDLORD"), and SALON MEDIA GROUP, INC., a Delaware corporation
("TENANT").
SUMMARY OF BASIC LEASE INFORMATION
----------------------------------
TERMS OF LEASE DESCRIPTION
-------------- -----------
1. Date: January 13, 2005
2. Premises
(Article 1).
2.1 Building: One ▇▇▇▇▇▇ Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
2.2 Premises: Approximately 8,623 rentable square feet
of space located in Suite 203 on the
second (2nd) floor of the Building, as
further set forth in EXHIBIT A to the
Office Lease.
3. Lease Term
(Article 2).
3.1 Length of Term: Four (4) years.
3.2 Lease Commencement The earlier to occur of (i) the date
Date: upon which Tenant first commences to
conduct business in the Premises and
(ii) the date upon which the Premises
are Ready for Occupancy, which is
anticipated to be March 1, 2005.
3.3 Lease Expiration Date: The date immediately preceding the 4th
anniversary of the Lease Commencement
Date.
4. Base Rent (Article 3):
Annual
Monthly Rental Rate
Annual Installment per Rentable
Lease Year Base Rent of Base Rent Square Foot
---------- --------- ------------ -----------
1* $224,198.00 $18,683.17 $26.00
2 $232,821.00 $19,401.75 $27.00
3 $241,444.00 $20,120.33 $28.00
4 $250,067.00 $20,838.92 $29.00
* Pursuant to the terms of Article 3 of this Lease, Tenant's obligation to pay
Base Rent shall not commence until four (4) months following the Lease
Commencement Date.
5. Base Year
(Article 4): Calendar year 2005.
6. Tenant's Share
(Article 4): Approximately 3.05%.
7. Permitted Use General office use consistent with a
(Article 5): first-class office building.
8. Security Deposit
(Article 21): $98,805.21.
9. Address of Tenant Salon Media Group, Inc.
(Section 29.18): ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
(Prior to Lease Commencement Date)
and
One ▇▇▇▇▇▇ Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
(After Lease Commencement Date)
10. Address of Landlord Glenborough Realty Trust, Inc.
(Section 29.18): ▇▇▇▇▇▇ Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇, General Manager
with a copy to:
Glenborough Realty Trust, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Counsel
11. Broker(s) ▇▇▇▇▇▇▇▇ ▇▇▇▇ & Co., LLC
(Section 29.24): ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
and
Pacific Union Commercial Brokerage
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
2
ARTICLE 1
PREMISES, BUILDING, PROJECT, AND COMMON AREAS
1.1 PREMISES, BUILDING, PROJECT AND COMMON AREAS.
1.1.1 THE PREMISES. Landlord hereby leases to Tenant and Tenant hereby
leases from Landlord the premises set forth in Section 2.2 of the Summary (the
"PREMISES"). The outline of the Premises is set forth in EXHIBIT A attached
hereto and each floor or floors of the Premises has the number of rentable
square feet as set forth in Section 2.2 of the Summary. Landlord and Tenant
hereby stipulate and agree that the rentable area of the Premises is as set
forth in Section 2.2 of the Summary, and such square footage shall not be
subject to remeasurement or modification. The parties hereto agree that the
lease of the Premises is upon and subject to the terms, covenants and conditions
herein set forth, and Tenant covenants as a material part of the consideration
for this Lease to keep and perform each and all of such terms, covenants and
conditions by it to be kept and performed and that this Lease is made upon the
condition of such performance. The parties hereto hereby acknowledge that the
purpose of EXHIBIT A is to show the approximate location of the Premises in the
"Building," as that term is defined in Section 1.1.2, below, only, and such
Exhibit is not meant to constitute an agreement, representation or warranty as
to the construction of the Premises, the precise area thereof or the specific
location of the "Common Areas," as that term is defined in Section 1.1.3, below,
or the elements thereof or of the accessways to the Premises or the "Project,"
as that term is defined in Section 1.1.2, below. Except as specifically set
forth in this Lease and in the Tenant Work Letter attached hereto as EXHIBIT B
(the "TENANT WORK LETTER"), Landlord shall not be obligated to provide or pay
for any improvement work or services related to the improvement of the Premises.
Tenant also acknowledges that neither Landlord nor any agent of Landlord has
made any representation or warranty regarding the condition of the Premises, the
Building or the Project or with respect to the suitability of any of the
foregoing for the conduct of Tenant's business, except as specifically set forth
in this Lease and the Tenant Work Letter. The taking of possession of the
Premises by Tenant shall conclusively establish that the Premises and the
Building were at such time in good and sanitary order, condition and repair.
1.1.2 THE BUILDING AND THE PROJECT. The Premises are a part of the
building set forth in Section 2.1 of the Summary (the "BUILDING"), commonly
known as "ONE ▇▇▇▇▇▇ CENTER", which is comprised of retail stores located on the
first (1st) floor ("ONE ▇▇▇▇▇▇ RETAIL PORTION") and offices located on the
second (2nd) through fifth (5th) floors ("ONE ▇▇▇▇▇▇ OFFICE PORTION"). The
Building is part of an office project known as the "▇▇▇▇▇▇ CENTER", which also
includes another office building commonly known as "TWO ▇▇▇▇▇▇ CENTER", which is
the office building located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
consisting of (a) five (5) floors of office space for lease to general office
tenants (the "TWO ▇▇▇▇▇▇ OFFICE PORTION"), including all tenant improvements and
fixtures and other improvements and fixtures thereto, (b) retail establishments
on the first floor (the "TWO ▇▇▇▇▇▇ RETAIL PORTION"), (c) the United States
Postal Service Facility ("POSTAL FACILITY") located on the ground floor, and (d)
all portions of Two ▇▇▇▇▇▇ Center leased or designated for lease to tenants for
office use, parking, storage or support facilities. On top of Two ▇▇▇▇▇▇ Center,
but not part of Two ▇▇▇▇▇▇ Center for purposes of this Lease, are seventeen (17)
floors containing residential apartment units (the "APARTMENT PORTION"). The
term "PROJECT," as used in this Lease, shall mean (i) the Building and the
Common Areas, as that term is defined in Section 1.1.3, below, (ii) the land
upon which the Building and the Common Areas are located, (iii) the parking
structure beneath Two ▇▇▇▇▇▇ Center, which services both One ▇▇▇▇▇▇ Center and
Two ▇▇▇▇▇▇ Center ("ON-SITE PARKING AREA"), (iv) Two ▇▇▇▇▇▇ Center and the land
upon which Two ▇▇▇▇▇▇ Center is located, (v) the Apartment Portion, and (vi) at
Landlord's discretion, any additional real property, areas, land, buildings or
other improvements added thereto outside of the Project.
1.1.3 COMMON AREAS. Tenant shall have the non-exclusive right to use
in common with other tenants in the Project, and subject to the rules and
regulations referred to in Article 5 of this Lease, those portions of the
Project which are provided, from time to time, for use in common by Landlord,
Tenant and any other tenants of the Project (such areas, together with such
other portions of the Project designated by Landlord, in its discretion,
including certain areas designated for the exclusive use of certain tenants, or
to be shared by Landlord and certain tenants, are collectively referred to
herein as the "COMMON AREAS"). The Common Areas shall consist of the "Project
Common Areas" and the "Building Common Areas." The term "PROJECT COMMON AREAS,"
as used in this Lease, shall mean the portion of the Project designated as such
3
by Landlord. The term "BUILDING COMMON AREAS," as used in this Lease, shall mean
the portions of the Common Areas located within the Building designated as such
by Landlord. The manner in which the Common Areas are maintained and operated
shall be at the sole discretion of Landlord and the use thereof shall be subject
to such rules, regulations and restrictions as Landlord may make from time to
time. Landlord reserves the right to close temporarily, make alterations or
additions to, or change the location of elements of the Project and the Common
Areas; provided, however, that in connection therewith, Landlord shall use
commercially reasonable efforts to minimize interference with Tenant's use of,
and access to, the Premises.
ARTICLE 2
LEASE TERM
The terms and provisions of this Lease shall be effective as of the
date of this Lease. The term of this Lease (the "LEASE TERM") shall be as set
forth in Section 3.1 of the Summary, shall commence on the date set forth in
Section 3.2 of the Summary (the "LEASE COMMENCEMENT DATE"), and shall terminate
on the date set forth in Section 3.3 of the Summary (the "LEASE EXPIRATION
DATE") unless this Lease is sooner terminated as hereinafter provided. For
purposes of this Lease, the term "LEASE YEAR" shall mean each consecutive twelve
(12) month period during the Lease Term; provided, however, that the last Lease
Year shall end on the Lease Expiration Date. At any time during the Lease Term,
Landlord may deliver to Tenant a notice in the form as set forth in EXHIBIT C,
attached hereto, as a confirmation only of the information set forth therein,
which Tenant shall execute and return to Landlord within five (5) business days
of receipt thereof.
ARTICLE 3
BASE RENT
3.1 IN GENERAL. Subject to the terms of Section 3.2, below, throughout the
Lease Term, Tenant shall pay, without prior notice or demand, to Landlord or
Landlord's agent at the management office of the Project, or, at Landlord's
option, at such other place as Landlord may from time to time designate upon not
less than thirty (30) days prior written notice, by a check for currency which,
at the time of payment, is legal tender for private or public debts in the
United States of America, base rent ("BASE RENT") as set forth in Section 4 of
the Summary, payable in equal monthly installments as set forth in Section 4 of
the Summary in advance on or before the first day of each and every calendar
month during the Lease Term, without any setoff or deduction whatsoever. The
Base Rent for the first full month of the Lease Term shall be paid at the time
of Tenant's execution of this Lease. If any Rent payment date (including the
Lease Commencement Date) falls on a day of the month other than the first day of
such month or if any payment of Rent is for a period which is shorter than one
month, the Rent for any fractional month shall accrue on a daily basis for the
period from the date such payment is due to the end of such calendar month or to
the end of the Lease Term at a rate per day which is equal to 1/365 of the
applicable annual Rent. All other payments or adjustments required to be made
under the terms of this Lease that require proration on a time basis shall be
prorated on the same basis.
3.2 FREE RENT. Notwithstanding anything in Section 3.1, above, to the
contrary, provided that Tenant is not in default of this Lease, Tenant shall not
be obligated to pay the monthly Base Rent attributable to the Premises for each
of the first four (4) months of the initial Lease Term, commencing on the Lease
Commencement Date.
ARTICLE 4
ADDITIONAL RENT
4.1 GENERAL TERMS. In addition to paying the Base Rent specified in Article
3 of this Lease, Tenant shall pay, commencing after the expiration of the "Base
Year", "Tenant's Share" of the annual "Direct Expenses," as those terms are
defined in Sections 4.2.1, 4.2.6 and 4.2.2 of this Lease, respectively, which
are in excess of the amount of Direct Expenses applicable to the Base Year;
provided, however, that in no event shall any decrease in Direct Expenses for
any "Expense Year," as that term is defined in Section 4.2.3 below, below Direct
Expenses for the Base Year entitle Tenant to any decrease in Base Rent or any
credit against sums due under this Lease. Such payments by Tenant, together with
any and all other amounts payable by Tenant to
4
Landlord pursuant to the terms of this Lease, are hereinafter collectively
referred to as the "ADDITIONAL RENT", and the Base Rent and the Additional Rent
are herein collectively referred to as "RENT." All amounts due under this
Article 4 as Additional Rent shall be payable for the same periods and in the
same manner as the Base Rent. Without limitation on other obligations of Tenant
which survive the expiration of the Lease Term, the obligations of Tenant to pay
the Additional Rent provided for in this Article 4 shall survive the expiration
of the Lease Term.
4.2 DEFINITIONS OF KEY TERMS RELATING TO ADDITIONAL RENT. As used in this
Article 4, the following terms shall have the meanings hereinafter set forth:
4.2.1 "BASE YEAR" shall mean the period set forth in Section 5 of the
Summary.
4.2.2 "DIRECT EXPENSES" shall mean "Operating Expenses" and "Tax
Expenses."
4.2.3 "EXPENSE YEAR" shall mean each calendar year in which any
portion of the Lease Term falls, through and including the calendar year in
which the Lease Term expires, provided that Landlord, upon notice to Tenant, may
change the Expense Year from time to time to any other twelve (12) consecutive
month period, and, in the event of any such change, Tenant's Share of Direct
Expenses shall be equitably adjusted for any Expense Year involved in any such
change.
4.2.4 "OPERATING EXPENSES" shall mean all expenses, costs and amounts
of every kind and nature which Landlord pays or accrues during any Expense Year
because of or in connection with the ownership, management, maintenance,
security, repair, replacement, restoration or operation of the Project, or any
portion thereof. Without limiting the generality of the foregoing, Operating
Expenses shall specifically include any and all of the following: (i) the cost
of supplying all utilities, the cost of operating, repairing, maintaining, and
renovating the utility, telephone, mechanical, sanitary, storm drainage, and
elevator systems, the cost of maintenance and service contracts in connection
therewith, and the cost of compliance with any applicable governmental
ordinances or other requirements relating to the conservation of utilities; (ii)
the cost of licenses, certificates, permits and inspections and the cost of
contesting any governmental enactments which may affect Operating Expenses, to
the extent of the reasonably anticipated cost savings, and the costs incurred in
connection with a transportation system management program or similar program;
(iii) the cost of all insurance carried by Landlord in connection with the
Project; (iv) the cost of landscaping, relamping, and all supplies, tools,
equipment and materials used in the operation, repair and maintenance of the
Project, or any portion thereof; (v) costs incurred in connection with the
parking areas servicing the Building; (vi) fees and other costs, including
management fees, consulting fees, legal fees and accounting fees, of all
contractors and consultants in connection with the management, operation,
maintenance and repair of the Project; (vii) payments under any equipment rental
agreements and the fair rental value of any management office space; (viii)
wages, salaries and other compensation and benefits, including taxes levied
thereon, of all persons engaged in the operation, maintenance and security of
the Project; (ix) costs under any instrument pertaining to the sharing of costs
by the Project; (x) operation, repair, maintenance and replacement of all
systems and equipment and components thereof of the Building; (xi) the cost of
janitorial, alarm, security and other services, replacement of wall and floor
coverings, ceiling tiles and fixtures in common areas, maintenance and
replacement of curbs and walkways, exterior windows and walls, repair to roofs
and re-roofing, waterproofing and sealing of garage, foundation and basement
areas; (xii) amortization (including interest on the unamortized cost) of the
cost of acquiring or the rental expense of personal property used in the
maintenance, operation and repair of the Project, or any portion thereof; (xiii)
the cost of capital improvements or other costs incurred in connection with the
Project (A) which are intended to effect economies in the operation or
maintenance of the Project, or any portion thereof, (B) that are required to
comply with present or anticipated conservation programs, (C) which are
replacements or modifications of nonstructural items located in the Common Areas
required to keep the Common Areas in good order or condition, or (D) that are
required under any governmental law or regulation enacted after the Lease
Commencement Date; provided, however, that any capital expenditure shall be
amortized with interest over its useful life as Landlord shall reasonably
determine; (xiv) costs, fees, charges or assessments imposed by, or resulting
from any mandate imposed on Landlord by, any federal, state or local government
for fire and police protection, trash removal, community services, or other
services which do not constitute "Tax Expenses" as that term is defined in
Section 4.2.5, below; and (xv) payments under any easement, license, operating
agreement, declaration, restrictive covenant, or instrument pertaining to the
sharing of costs by
5
the Building. If Landlord is not furnishing any particular work or service (the
cost of which, if performed by Landlord, would be included in Operating
Expenses) to a tenant who has undertaken to perform such work or service in lieu
of the performance thereof by Landlord, Operating Expenses shall be deemed to be
increased by an amount equal to the additional Operating Expenses which would
reasonably have been incurred during such period by Landlord if it had at its
own expense furnished such work or service to such tenant. If the Project is not
at least ninety-five percent (95%) occupied during all or a portion of the Base
Year or any Expense Year, Landlord shall make an appropriate adjustment to the
components of Operating Expenses for such year to determine the amount of
Operating Expenses that would have been incurred had the Project been
ninety-five percent (95%) occupied; and the amount so determined shall be deemed
to have been the amount of Operating Expenses for such year. Operating Expenses
for the Base Year shall not include market-wide labor-rate increases due to
extraordinary circumstances, including, but not limited to, boycotts and
strikes, and utility rate increases due to extraordinary circumstances
including, but not limited to, conservation surcharges, boycotts, embargoes or
other shortages, or amortized costs relating to capital improvements. In no
event shall the components of Direct Expenses for any Expense Year related to
utilities, security or insurance costs be less than the components of Direct
Expenses related to utilities, security or insurance, costs, respectively, in
the Base Year. Operating Expenses shall not include any of the following.
(a) costs incurred to comply with laws relating to the removal of
hazardous material (as defined under applicable law as of the date hereof) which
was in existence in the Building or on the Project prior to the Lease
Commencement Date; and costs incurred to remove, remedy, contain, or treat
hazardous material, which hazardous material is brought into the Building or
onto the Project after the date hereof by Landlord or any other tenant of the
Project and at such time is a hazardous material (as defined under then existing
applicable law);
(b) Interest, principal, points and fees on debts or amortization on
any mortgage or mortgages or any other debt instrument encumbering the Project
or any portion thereof;
(c) all items and services for which Tenant or any other tenant in the
Project reimburses Landlord or which Landlord provides selectively to one or
more tenants (other than Tenant) without reimbursement;
(d) costs for which the Landlord is reimbursed by any tenant or
occupant of the Project or by insurance by its carrier or any tenant's carrier
or by anyone else, and electric power costs for which any tenant directly
contracts with the local public service company;
(e) except as otherwise specifically provided in this Section 4.2.4,
costs incurred by Landlord in the repairs, capital additions, alterations or
replacements made or incurred to rectify or correct defects in design, materials
or workmanship in connection with any portion of the Building;
(f) costs of capital repairs and alterations, capital improvements and
equipment except as set forth in items (xii) and (xiii), above;
(g) except for a Project management fee, overhead and profit increment
paid to the Landlord or to subsidiaries or affiliates of the Landlord for
services in the Project to the extent the same exceeds the costs of such
services rendered by qualified, first-class unaffiliated third parties on a
competitive basis;
(h) costs (including permit, license and inspection costs) incurred in
renovating or otherwise improving, decorating or redecorating rentable space for
other tenants or vacant rentable space;
(i) costs of leasing commissions, attorneys' fees and other costs and
expenses incurred in connection with negotiations or disputes with present or
prospective tenants or other occupants of the Building;
(j) costs associated with the operation of the business of the
partnership or entity which constitutes the Landlord, as the same are
distinguished from the costs of operation of the Project (which shall
specifically include, but not be limited to, accounting costs
associated
6
with the operation of the Project). Costs associated with the operation of the
business of the partnership or entity which constitutes the Landlord include,
without limitation, costs of partnership accounting and legal matters, costs of
defending any lawsuits with any mortgagee (except as the actions of the Tenant
may be in issue), costs of selling, syndicating, financing, mortgaging or
hypothecating any of the Landlord's interest in the Project, and costs incurred
in connection with any disputes between Landlord and its employees, between
Landlord and Project management, or between Landlord and other tenants or
occupants (including, without limitation, lease disputes, lease enforcement
actions and evictions); or
(k) the wages and benefits of any employee who does not devote
substantially all of his or her employed time to the Project unless such wages
and benefits are prorated to reflect time spent on operating and managing the
Project vis-a-vis time spent on matters unrelated to operating and managing the
Project; provided, that in no event shall Operating Expenses for purposes of
this Lease include wages and/or benefits attributable to personnel above the
level of Project manager;
4.2.5 TAXES.
4.2.5.1 "TAX EXPENSES" shall mean all federal, state, county, or
local governmental or municipal taxes, fees, charges or other impositions of
every kind and nature, whether general, special, ordinary or extraordinary,
(including, without limitation, real estate taxes, general and special
assessments, transit taxes, leasehold taxes or taxes based upon the receipt of
rent, including gross receipts or sales taxes applicable to the receipt of rent,
unless required to be paid by Tenant, personal property taxes imposed upon the
fixtures, machinery, equipment, apparatus, systems and equipment, appurtenances,
furniture and other personal property used in connection with the Project, or
any portion thereof), which shall be paid or accrued during any Expense Year
(without regard to any different fiscal year used by such governmental or
municipal authority) because of or in connection with the ownership, leasing and
operation of the Project, or any portion thereof.
4.2.5.2 Tax Expenses shall include, without limitation: (i) Any
tax on the rent, right to rent or other income from the Project, or any portion
thereof, or as against the business of leasing the Project, or any portion
thereof; (ii) Any assessment, tax, fee, levy or charge in addition to, or in
substitution, partially or totally, of any assessment, tax, fee, levy or charge
previously included within the definition of real property tax, it being
acknowledged by Tenant and Landlord that Proposition 13 was adopted by the
voters of the State of California in the June 1978 election ("PROPOSITION 13")
and that assessments, taxes, fees, levies and charges may be imposed by
governmental agencies for such services as fire protection, street, sidewalk and
road maintenance, refuse removal and for other governmental services formerly
provided without charge to property owners or occupants, and, in further
recognition of the decrease in the level and quality of governmental services
and amenities as a result of Proposition 13, Tax Expenses shall also include any
governmental or private assessments or the Project's contribution towards a
governmental or private cost-sharing agreement for the purpose of augmenting or
improving the quality of services and amenities normally provided by
governmental agencies; (iii) Any assessment, tax, fee, levy, or charge allocable
to or measured by the area of the Premises or the Rent payable hereunder,
including, without limitation, any business or gross income tax or excise tax
with respect to the receipt of such rent, or upon or with respect to the
possession, leasing, operating, management, maintenance, alteration, repair, use
or occupancy by Tenant of the Premises, or any portion thereof; and (iv) Any
assessment, tax, fee, levy or charge, upon this transaction or any document to
which Tenant is a party, creating or transferring an interest or an estate in
the Premises.
4.2.5.3 Any costs and expenses (including, without limitation,
reasonable attorneys' fees) incurred in attempting to protest, reduce or
minimize Tax Expenses, to the extent of the reasonably anticipated cost savings,
shall be included in Tax Expenses in the Expense Year such expenses are paid. If
Tax Expenses for any period during the Lease Term or any extension thereof are
increased after payment thereof for any reason, including, without limitation,
error or reassessment by applicable governmental or municipal authorities,
Tenant shall pay Landlord upon demand Tenant's Share of any such increased Tax
Expenses included by Landlord as Building Tax Expenses pursuant to the terms of
this Lease. Notwithstanding anything to the contrary contained in this Section
4.2.5 (except as set forth in Section 4.2.5.1, above), there shall be excluded
from Tax Expenses (i) all excess profits taxes, franchise taxes, gift taxes,
capital stock taxes, inheritance and succession taxes, estate taxes, federal and
state
7
income taxes, and other taxes to the extent applicable to Landlord's general or
net income (as opposed to rents, receipts or income attributable to operations
at the Project), (ii) any items included as Operating Expenses, (iii) any
interest or penalties incurred as a result of Landlord's failure to pay Tax
Expenses when due; and (iv) any items paid by Tenant under Section 4.5 of this
Lease.
4.2.5.4 Notwithstanding anything to the contrary set forth in
this Lease, the amount of Tax Expenses for the Base Year and any Expense Year
shall be calculated without taking into account any decreases in real estate
taxes obtained in connection with Proposition 8, and, therefore, the Tax
Expenses in the Base Year and/or an Expense Year may be greater than those
actually incurred by Landlord, but shall, nonetheless, be the Tax Expenses due
under this Lease; provided that (i) any costs and expenses incurred by Landlord
in securing any Proposition 8 reduction shall not be deducted from Tax Expenses
nor included in Direct Expenses for purposes of this Lease, and (ii) tax refunds
under Proposition 8 shall not be deducted from Tax Expenses nor refunded to
Tenant, but rather shall be the sole property of Landlord. Landlord and Tenant
acknowledge that the preceding sentence is not intended to in any way affect (A)
the inclusion in Tax Expenses of the statutory two percent (2.0%) annual
increase in Tax Expenses (as such statutory increase may be modified by
subsequent legislation), or (B) the inclusion or exclusion of Tax Expenses
pursuant to the terms of Proposition 13. Notwithstanding the foregoing, upon a
reassessment of the Building and/or Project pursuant to the terms of Proposition
13 (a "REASSESSEMENT") occurring after the Base Year which results in a decrease
in Tax Expenses, the component of Tax Expenses for the Base Year which is
attributable to the assessed value of the Building and/or Project under
Proposition 13 prior to the Reassessment (without taking into account any
Proposition 8 reductions) (the "BASE YEAR PROP 13 TAXES") shall be reduced, if
at all, for the purposes of comparison to all subsequent Expense Years
(commencing with the Expense Year in which the Reassessment takes place) to an
amount equal to the real estate taxes based upon such Reassessment, and if
thereafter, in connection with a subsequent Reassessment, the assessed value of
the Building and/or Project under Proposition 13 shall increase, the current
Base Year Prop 13 Taxes shall be increased for purposes of comparison to all
subsequent Expense Years (commencing with the Expense Year in which the
Reassessment takes place) to an amount equal to the lesser of the original Base
Year Prop 13 Taxes and an amount equal to the real estate taxes based upon such
Reassessment.
4.2.6 "Tenant's Share" shall mean the percentage set forth in Section
6 of the Summary, and is based on the ratio of the square footage of the
Premises to the total square footage of the One ▇▇▇▇▇▇ Office Portion.
4.3 ALLOCATION OF DIRECT EXPENSES.
4.3.1 The parties acknowledge that the Building is a part of a
multi-building project and that the costs and expenses incurred in connection
with the Project (i.e. the Direct Expenses) are an aggregate of the Building and
the other buildings in the Project. In accordance with the terms of this Section
4.3, Landlord shall allocate the operating and tax costs for the Project among
the "Cost Pools," as that term is defined below. The "COST POOLS" shall be: (i)
the Apartment Portion, (ii) the Two ▇▇▇▇▇▇ Office Portion, (iii) the Two ▇▇▇▇▇▇
Retail Portion (iv) the One ▇▇▇▇▇▇ Office Portion, (v) the One ▇▇▇▇▇▇ Retail
Portion, and (vi) the On-site Parking Area. To the extent operating or tax costs
are directly and solely attributable to a specific Cost Pool, such operating or
tax costs will be charged directly to such Cost Pool based upon an equitable
comparison of relative square footage or as otherwise determined by Landlord, in
Landlord's sole discretion. To the extent operating or tax costs are
attributable and allocable to two or more Cost Pools, such Operating Expense
will be prorated on an equitable basis amongst such Cost Pools, and therefore,
only operating or tax costs attributable to the One ▇▇▇▇▇▇ Office Portion shall
be part of Operating Expenses or Tax Expenses. To the extent operating or tax
costs are common to all Cost Pools, such Operating Expense will be allocated
among the Cost Pools in accordance with the following percentages: (a) Apartment
Portion - 26.492%, (b) Two ▇▇▇▇▇▇ Office Portion - 28.176%, (c) Two ▇▇▇▇▇▇
Retail Portion - 3.520%, (d) One ▇▇▇▇▇▇ Office Portion - 30.412%, (e) One ▇▇▇▇▇▇
Retail Portion - 8.899%, and (f) On-site Parking Area - 2.501%.
4.4 CALCULATION AND PAYMENT OF ADDITIONAL RENT. If for any Expense Year
ending or commencing within the Lease Term, Tenant's Share of Direct Expenses
for such Expense Year exceeds Tenant's Share of Direct Expenses applicable to
the Base Year, then Tenant shall
8
pay to Landlord, in the manner set forth in Section 4.4.1, below, and as
Additional Rent, an amount equal to the excess (the "EXCESS").
4.4.1 STATEMENT OF ACTUAL DIRECT EXPENSES AND PAYMENT BY TENANT.
Landlord shall give to Tenant following the end of each Expense Year, a
statement (the "STATEMENT") which shall state the Direct Expenses incurred or
accrued for such preceding Expense Year, and which shall indicate the amount of
the Excess. Upon receipt of the Statement for each Expense Year commencing or
ending during the Lease Term, if an Excess is present, Tenant shall pay, with
its next installment of Base Rent due, the full amount of the Excess for such
Expense Year, less the amounts, if any, paid during such Expense Year as
"Estimated Excess," as that term is defined in Section 4.4.2, below. The failure
of Landlord to timely furnish the Statement for any Expense Year shall not
prejudice Landlord or Tenant from enforcing its rights under this Article 4.
Even though the Lease Term has expired and Tenant has vacated the Premises, when
the final determination is made of Tenant's Share of Direct Expenses for the
Expense Year in which this Lease terminates, if an Excess if present, Tenant
shall immediately pay to Landlord such amount. The provisions of this Section
4.4.1 shall survive the expiration or earlier termination of the Lease Term.
4.4.2 STATEMENT OF ESTIMATED DIRECT EXPENSES. In addition, Landlord
shall give Tenant a yearly expense estimate statement (the "ESTIMATE STATEMENT")
which shall set forth Landlord's reasonable estimate (the "ESTIMATE") of what
the total amount of Direct Expenses for the then-current Expense Year shall be
and the estimated excess (the "ESTIMATED EXCESS") as calculated by comparing the
Direct Expenses for such Expense Year, which shall be based upon the Estimate,
to the amount of Direct Expenses for the Base Year. The failure of Landlord to
timely furnish the Estimate Statement for any Expense Year shall not preclude
Landlord from enforcing its rights to collect any Estimated Excess under this
Article 4, nor shall Landlord be prohibited from revising any Estimate Statement
or Estimated Excess theretofore delivered to the extent necessary. Thereafter,
Tenant shall pay, with its next installment of Base Rent due, a fraction of the
Estimated Excess for the then-current Expense Year (reduced by any amounts paid
pursuant to the next to last sentence of this Section 4.4.2). Such fraction
shall have as its numerator the number of months which have elapsed in such
current Expense Year, including the month of such payment, and twelve (12) as
its denominator. Until a new Estimate Statement is furnished (which Landlord
shall have the right to deliver to Tenant at any time), Tenant shall pay
monthly, with the monthly Base Rent installments, an amount equal to one-twelfth
(1/12) of the total Estimated Excess set forth in the previous Estimate
Statement delivered by Landlord to Tenant.
4.5 TAXES AND OTHER CHARGES FOR WHICH TENANT IS DIRECTLY RESPONSIBLE.
4.5.1 Tenant shall be liable for and shall pay ten (10) days before
delinquency, taxes levied against Tenant's equipment, furniture, fixtures and
any other personal property located in or about the Premises. If any such taxes
on Tenant's equipment, furniture, fixtures and any other personal property are
levied against Landlord or Landlord's property or if the assessed value of
Landlord's property is increased by the inclusion therein of a value placed upon
such equipment, furniture, fixtures or any other personal property and if
Landlord pays the taxes based upon such increased assessment, which Landlord
shall have the right to do regardless of the validity thereof but only under
proper protest if requested by Tenant, Tenant shall upon demand repay to
Landlord the taxes so levied against Landlord or the proportion of such taxes
resulting from such increase in the assessment, as the case may be.
4.5.2 If the tenant improvements in the Premises, whether installed
and/or paid for by Landlord or Tenant and whether or not affixed to the real
property so as to become a part thereof, are assessed for real property tax
purposes at a valuation higher than the valuation at which tenant improvements
conforming to Landlord's "building standard" in other space in the Building are
assessed, then the Tax Expenses levied against Landlord or the property by
reason of such excess assessed valuation shall be deemed to be taxes levied
against personal property of Tenant and shall be governed by the provisions of
Section 4.5.1, above.
4.5.3 Notwithstanding any contrary provision herein, Tenant shall pay
prior to delinquency any (i) rent tax or sales tax, gross receipts tax, service
tax, transfer tax or value added tax, or any other applicable tax on the rent or
services herein or otherwise respecting this Lease, (ii) taxes assessed upon or
with respect to the possession, leasing, operation, management, maintenance,
alteration, repair, use or occupancy by Tenant of the Premises or any portion of
the
9
Project, including the Project parking facility; or (iii) taxes assessed upon
this transaction or any document to which Tenant is a party creating or
transferring an interest or an estate in the Premises.
ARTICLE 5
USE OF PREMISES
5.1 PERMITTED USE. Tenant shall use the Premises solely for the Permitted
Use set forth in Section 7 of the Summary and Tenant shall not use or permit the
Premises or the Project to be used for any other purpose or purposes whatsoever
without the prior written consent of Landlord, which may be withheld in
Landlord's sole discretion.
5.2 PROHIBITED USES. The uses prohibited under this Lease shall include,
without limitation, use of the Premises or a portion thereof for (i) offices of
any agency or bureau of the United States or any state or political subdivision
thereof; (ii) offices or agencies of any foreign governmental or political
subdivision thereof; (iii) offices of any health care professionals or service
organization; (iv) schools or other training facilities which are not ancillary
to corporate, executive or professional office use; (v) retail or restaurant
uses; or (vi) radio and/or television stations. Tenant shall not allow occupancy
density of use of the Premises which is greater than one person for each 150
square feet of the Premises. Tenant further covenants and agrees that Tenant
shall not use, or suffer or permit any person or persons to use, the Premises or
any part thereof for any use or purpose contrary to the provisions of the Rules
and Regulations set forth in EXHIBIT D, attached hereto, or in violation of the
laws of the United States of America, the State of California, or the
ordinances, regulations or requirements of the local municipal or county
governing body or other lawful authorities having jurisdiction over the Project)
including, without limitation, any such laws, ordinances, regulations or
requirements relating to hazardous materials or substances, as those terms are
defined by applicable laws now or hereafter in effect. Tenant shall not do or
permit anything to be done in or about the Premises which will in any way damage
the reputation of the Project or obstruct or interfere with the rights of other
tenants or occupants of the Building, or injure or annoy them or use or allow
the Premises to be used for any improper, unlawful or objectionable purpose, nor
shall Tenant cause, maintain or permit any nuisance in, on or about the
Premises. Tenant shall comply with all recorded covenants, conditions, and
restrictions now or hereafter affecting the Project.
ARTICLE 6
SERVICES AND UTILITIES
6.1 STANDARD TENANT SERVICES. Landlord shall provide the following
services on all days (unless otherwise stated below) during the Lease Term.
6.1.1 Subject to limitations imposed by all governmental rules,
regulations and guidelines applicable thereto, Landlord shall provide heating
and air conditioning ("HVAC") when necessary for normal office use in the
Premises from 8:00 A.M. to 6:00 P.M. Monday through Friday (collectively, the
"BUILDING HOURS"), except for the date of observation of New Year's Day,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day and,
at Landlord's discretion, other locally or nationally recognized holidays
(collectively, the "HOLIDAYS").
6.1.2 Landlord shall provide adequate electrical wiring and facilities
for connection to Building standard ceiling mounted lighting fixtures and
incidental use equipment, provided that Tenant's consumption of electricity does
not exceed 1 kilowatt/hour per usable square foot of the Premises per month,
which electrical usage shall be subject to applicable laws and regulations,
including Title 24. Tenant will design Tenant's electrical system serving any
equipment producing nonlinear electrical loads to accommodate such nonlinear
electrical loads, including, but not limited to, oversizing neutral conductors,
derating transformers and/or providing power-line filters. Engineering plans
shall include a calculation of Tenant's fully connected electrical design load
with and without demand factors and shall indicate the number of ▇▇▇▇▇ of
unmetered and submetered loads. Tenant shall bear the cost of replacement of
lamps, starters and ballasts for non-Building standard lighting fixtures within
the Premises.
10
6.1.3 Landlord shall provide city water from the regular Building
outlets for drinking, lavatory and toilet purposes in the Building Common Areas.
6.1.4 Landlord shall provide janitorial services to the Premises,
except the date of observation of the Holidays, in and about the Premises and
window washing services in a manner consistent with other comparable buildings
in the vicinity of the Building.
6.1.5 Landlord shall provide nonexclusive, non-attended automatic
passenger elevator service during the Building Hours, shall have one elevator
available at all other times.
6.1.6 Landlord shall provide nonexclusive freight elevator service
subject to scheduling by Landlord.
6.1.7 Landlord shall provide city water from the regular Building
outlets for drinking, lavatory and toilet purposes in the Premises.
Tenant shall cooperate fully with Landlord at all times and abide by all
regulations and requirements that Landlord may reasonably prescribe for the
proper functioning and protection of the HVAC, electrical, mechanical and
plumbing systems.
6.2 OVERSTANDARD TENANT USE. Tenant shall not, without Landlord's prior
written consent, use heat-generating machines, machines other than normal
fractional horsepower office machines, or equipment or lighting other than
Building standard lights in the Premises, which may affect the temperature
otherwise maintained by the air conditioning system or increase the water
normally furnished for the Premises by Landlord pursuant to the terms of Section
6.1 of this Lease. If such consent is given, Landlord shall have the right to
install supplementary air conditioning units or other facilities in the
Premises, including supplementary or additional metering devices, and the cost
thereof, including the cost of installation, operation and maintenance,
increased wear and tear on existing equipment and other similar charges, shall
be paid by Tenant to Landlord upon billing by Landlord. If Tenant uses water,
electricity, heat or air conditioning in excess of that supplied by Landlord
pursuant to Section 6.1 of this Lease, Tenant shall pay to Landlord, upon
billing, the cost of such excess consumption, the cost of the installation,
operation, and maintenance of equipment which is installed in order to supply
such excess consumption, and the cost of the increased wear and tear on existing
equipment caused by such excess consumption; and Landlord may install devices to
separately meter any increased use and in such event Tenant shall pay the
increased cost directly to Landlord, on demand, at the rates charged by the
public utility company furnishing the same, including the cost of such
additional metering devices. Tenant's use of electricity shall never exceed the
capacity of the feeders to the Project or the risers or wiring installation. If
Tenant desires to use heat, ventilation or air conditioning during hours other
than those for which Landlord is obligated to supply such utilities pursuant to
the terms of Section 6.1 of this Lease, Tenant shall give Landlord such prior
notice, if any, as Landlord shall from time to time establish as appropriate, to
the extent such additional utilities can be made available, and Landlord shall
supply such utilities to Tenant at such hourly cost to Tenant (which shall be
treated as Additional Rent and which may include an administrative fee) as
Landlord shall from time to time establish.
6.3 INTERRUPTION OF USE. Tenant agrees that Landlord shall not be liable
for damages, by abatement of Rent or otherwise, for failure to furnish or delay
in furnishing any service (including telephone and telecommunication services),
or for any diminution in the quality or quantity thereof, when such failure or
delay or diminution is occasioned, in whole or in part, by compliance with
applicable governmental ordinances or other requirements relating to
conservation of utilities, breakage, repairs, replacements, or improvements, by
any strike, lockout or other labor trouble, by inability to secure electricity,
gas, water, or other fuel at the Building or Project after reasonable effort to
do so, by any riot or other dangerous condition, emergency, accident or casualty
whatsoever, by act or default of Tenant or other parties, or by any other cause;
and such failures or delays or diminution shall never be deemed to constitute an
eviction or disturbance of Tenant's use and possession of the Premises or
relieve Tenant from paying Rent or performing any of its obligations under this
Lease. Furthermore, Landlord shall not be liable under any circumstances for a
loss of, or injury to, property or for injury to, or interference with, Tenant's
business, including, without limitation, loss of profits, however occurring,
through or in connection with or incidental to a failure to furnish any of the
services or utilities as set forth in this Article 6. Landlord may comply with
voluntary controls or guidelines promulgated by any governmental entity relating
to the use or conservation of energy, water, gas,
11
light or electricity or the reduction of automobile or other emissions without
creating any liability of Landlord to Tenant under this Lease, provided that the
Premises are not thereby rendered untenantable.
6.4 ADDITIONAL SERVICES. Landlord shall also have the exclusive right, but
not the obligation, to provide any additional services which may be required by
Tenant, including, without limitation, locksmithing, non-standard lamp
replacement, additional janitorial service, and additional repairs and
maintenance, provided that Tenant shall pay to Landlord upon billing, the sum of
all costs to Landlord of such additional services, plus an administration fee.
Charges for any service for which Tenant is required to pay from time to time
hereunder, shall be deemed Additional Rent hereunder and shall be billed on a
monthly basis.
ARTICLE 7
REPAIRS
Tenant shall, at Tenant's own expense, pursuant to the terms of this Lease,
including without limitation Article 8 hereof, keep the Premises, including all
improvements, fixtures and furnishings therein, in good order, repair and
condition at all times during the Lease Term. In addition, Tenant shall, at
Tenant's own expense, but under the supervision and subject to the prior
approval of Landlord, and within any reasonable period of time specified by
Landlord, pursuant to the terms of this Lease, including without limitation
Article 8 hereof, promptly and adequately repair all damage to the Premises and
replace or repair all damaged, broken, or worn fixtures and appurtenances,
except for damage caused by ordinary wear and tear or beyond the reasonable
control of Tenant; provided however, that, at Landlord's option, or if Tenant
fails to make such repairs, Landlord may, but need not, make such repairs and
replacements, and Tenant shall pay Landlord the cost thereof, including a
percentage of the cost thereof (to be uniformly established for the Building
and/or the Project) sufficient to reimburse Landlord for all overhead, general
conditions, fees and other costs or expenses arising from Landlord's involvement
with such repairs and replacements forthwith upon being billed for same.
Notwithstanding the foregoing, Landlord shall be responsible for maintenance,
repairs and replacements to the exterior walls, foundation and roof of the
Building, the structural portions of the floors of the Building, and the base
building systems and equipment of the Building. Landlord may, but shall not be
required to, enter the Premises at all reasonable times, upon reasonable prior
written notice, except in the event of an emergency, in which case no notice
shall be required, to make such repairs, alterations, improvements or additions
to the Premises or to the Project or to any equipment located in the Project as
Landlord shall desire or deem necessary or as Landlord may be required to do by
governmental or quasi-governmental authority or court order or decree. Tenant
hereby waives any and all rights under and benefits of subsection 1 of Section
1932 and Sections 1941 and 1942 of the California Civil Code or under any
similar law, statute, or ordinance now or hereafter in effect.
ARTICLE 8
ADDITIONS AND ALTERATIONS
8.1 LANDLORD'S CONSENT TO ALTERATIONS. Tenant may not make any
improvements, alterations, additions or changes to the Premises or any
mechanical, plumbing or HVAC facilities or systems pertaining to the Premises
(collectively, the "ALTERATIONS") without first procuring the prior written
consent of Landlord to such Alterations, which consent shall be requested by
Tenant not less than thirty (30) days prior to the commencement thereof, and
which consent shall not be unreasonably withheld by Landlord, provided it shall
be deemed reasonable for Landlord to withhold its consent to any Alteration
which adversely affects the structural portions or the systems or equipment of
the Building or, to the extent the subject Alteration is visible from the
exterior of the Premises or Building is, based upon Landlord's reasonable
determination, inconsistent with a first class office building project. The
construction of the initial improvements to the Premises shall be governed by
the terms of the Tenant Work Letter and not the terms of this Article 8.
8.2 MANNER OF CONSTRUCTION. Landlord may impose, as a condition of its
consent to any and all Alterations or repairs of the Premises or about the
Premises, such reasonable requirements as Landlord in its sole discretion may
deem desirable, including, but not limited to, the requirement that Tenant
utilize for such purposes only contractors, subcontractors, materials,
12
mechanics and materialmen selected by Tenant from a list provided and approved
by Landlord, the requirement that upon Landlord's request, Tenant shall, at
Tenant's expense, remove such Alterations upon the expiration or any early
termination of the Lease Term. If such Alterations will involve the use of or
disturb hazardous materials or substances existing in the Premises, Tenant shall
comply with Landlord's rules and regulations concerning such hazardous materials
or substances. Tenant shall construct such Alterations and perform such repairs
in a good and workmanlike manner, in conformance with any and all applicable
federal, state, county or municipal laws, rules and regulations and pursuant to
a valid building permit, issued by the City of San Francisco, all in conformance
with Landlord's reasonable construction rules and regulations. In the event
Tenant performs any Alterations in the Premises which also require or give rise
to governmentally required changes to the "Base Building," as that term is
defined below, then Landlord shall, at Tenant's expense, make such required
changes to the applicable portion of the Base Building. The "BASE BUILDING"
shall include the structural portions of the Building, and the public restrooms
and the systems and equipment located in the internal core of the Building on
the floor or floors on which the Premises are located. In performing the work of
any such Alterations, Tenant shall have the work performed in such manner so as
not to obstruct access to the Project or any portion thereof, by any other
tenant of the Project, and so as not to obstruct the business of Landlord or
other tenants in the Project. Tenant shall not use (and upon notice from
Landlord shall cease using) contractors, services, workmen, labor, materials or
equipment that, in Landlord's reasonable judgment, would disturb labor harmony
with the workforce or trades engaged in performing other work, labor or services
in or about the Building or the Common Areas. In addition to Tenant's
obligations under Article 9 of this Lease, upon completion of any Alterations,
Tenant agrees to cause a Notice of Completion to be recorded in the office of
the Recorder of the County of San Francisco in accordance with Section 3093 of
the Civil Code of the State of California or any successor statute, and Tenant
shall deliver to the Project management office a reproducible copy of the "as
built" drawings of the Alterations as well as all permits, approvals and other
documents issued by any governmental agency in connection with the Alterations.
8.3 PAYMENT FOR IMPROVEMENTS. If payment is made directly to contractors,
Tenant shall comply with Landlord's requirements for final lien releases and
waivers in connection with Tenant's payment for work to contractors. If Tenant
orders any work directly from Landlord, Tenant shall pay to Landlord a
percentage of the cost of such work sufficient to compensate Landlord for all
overhead, general conditions, fees and other costs and expenses arising from
Landlord's involvement with such work. If Tenant does not order any work
directly from Landlord, Tenant shall reimburse Landlord for Landlord's
reasonable, actual, out-of-pocket costs and expenses actually incurred in
connection with Landlord's review of such work.
8.4 CONSTRUCTION INSURANCE. In addition to the requirements of Article 10
of this Lease, in the event that Tenant makes any Alterations, prior to the
commencement of such Alterations, Tenant shall provide Landlord with evidence
that Tenant carries "Builder's All Risk" insurance in an amount approved by
Landlord covering the construction of such Alterations, and such other insurance
as Landlord may reasonably require, it being understood and agreed that all of
such Alterations shall be insured by Tenant pursuant to Article 10 of this Lease
immediately upon completion thereof. In addition, Landlord may, in its
discretion, require Tenant to obtain a lien and completion bond or some
alternate form of security satisfactory to Landlord in an amount sufficient to
ensure the lien-free completion of such Alterations and naming Landlord as a
co-obligee.
8.5 LANDLORD'S PROPERTY. All Alterations, improvements, fixtures and/or
appurtenances which may be installed or placed in or about the Premises, from
time to time, shall be at the sole cost of Tenant and shall be and become the
property of Landlord upon the expiration or earlier termination of this Lease,
except that Tenant may remove any Alterations, improvements and/or fixtures
which Tenant can substantiate to Landlord have not been paid for with any Tenant
improvement allowance funds provided to Tenant by Landlord, provided Tenant
repairs any damage to the Premises and Building caused by such removal and
returns the affected portion of the Premises to the condition which existed as
of the Lease Commencement Date, reasonable wear and tear excluded. Furthermore,
Landlord may, by written notice to Tenant prior to the end of the Lease Term, or
given following any earlier termination of this Lease, require Tenant, at
Tenant's expense, to remove any Alterations or improvements in the Premises, and
to repair any damage to the Premises and Building caused by such removal and
returns the affected portion of the Premises to the condition which existed as
of the Lease Commencement Date, reasonable wear and tear excluded. If Tenant
fails to complete such
13
removal and/or to repair any damage caused by the removal of any Alterations or
improvements in the Premises, and return the affected portion of the Premises to
the condition which existed as of the Lease Commencement Date, reasonable wear
and tear excluded, Landlord may do so and may charge the cost thereof to Tenant.
Tenant hereby protects, defends, indemnifies and holds Landlord harmless from
any liability, cost, obligation, expense or claim of lien in any manner relating
to the installation, placement, removal or financing of any such Alterations,
improvements and/or fixtures in, on or about the Premises, which obligations of
Tenant shall survive the expiration or earlier termination of this Lease.
ARTICLE 9
COVENANT AGAINST LIENS
Tenant shall keep the Project and Premises free from any liens or
encumbrances arising out of the work performed, materials furnished or
obligations incurred by or on behalf of Tenant, and shall protect, defend,
indemnify and hold Landlord harmless from and against any claims, liabilities,
judgments or costs (including, without limitation, reasonable attorneys' fees
and costs) arising out of same or in connection therewith. Tenant shall give
Landlord notice at least twenty (20) days prior to the commencement of any such
work on the Premises (or such additional time as may be necessary under
applicable laws) to afford Landlord the opportunity of posting and recording
appropriate notices of non-responsibility. Tenant shall remove any such lien or
encumbrance by bond or otherwise within five (5) days after notice by Landlord,
and if Tenant shall fail to do so, Landlord may pay the amount necessary to
remove such lien or encumbrance, without being responsible for investigating the
validity thereof. The amount so paid shall be deemed Additional Rent under this
Lease payable upon demand, without limitation as to other remedies available to
Landlord under this Lease. Nothing contained in this Lease shall authorize
Tenant to do any act which shall subject Landlord's title to the Building or
Premises to any liens or encumbrances whether claimed by operation of law or
express or implied contract. Any claim to a lien or encumbrance upon the
Building or Premises arising in connection with any such work or respecting the
Premises not performed by or at the request of Landlord shall be null and void,
or at Landlord's option shall attach only against Tenant's interest in the
Premises and shall in all respects be subordinate to Landlord's title to the
Project, Building and Premises.
ARTICLE 10
INSURANCE
10.1 INDEMNIFICATION AND WAIVER. Except as otherwise expressly provided
herein, Tenant hereby assumes all risk of damage to property or injury to
persons in, upon or about the Premises from any cause whatsoever and agrees that
Landlord, its partners, subpartners and their respective officers, agents,
servants, employees, and independent contractors (collectively, "LANDLORD
PARTIES") shall not be liable for, and are hereby released from any
responsibility for, any damage either to person or property or resulting from
the loss of use thereof, which damage is sustained by Tenant or by other persons
claiming through Tenant. Tenant shall indemnify, defend, protect, and hold
harmless the Landlord Parties from any and all loss, cost, damage, expense and
liability (including without limitation court costs and reasonable attorneys'
fees) incurred in connection with or arising from any cause in, on or about the
Premises, any acts, omissions or negligence of Tenant or of any person claiming
by, through or under Tenant, or of the contractors, agents, servants, employees,
invitees, guests or licensees of Tenant or any such person, in, on or about the
Project or any breach of the terms of this Lease, either prior to, during, or
after the expiration of the Lease Term, provided that the terms of the foregoing
indemnity shall not apply to the negligence, willful misconduct or breach of
this Lease by Landlord. Should Landlord be named as a defendant in any suit
brought against Tenant in connection with or arising out of Tenant's occupancy
of the Premises, Tenant shall pay to Landlord its costs and expenses incurred in
such suit, including without limitation, its actual professional fees such as
appraisers', accountants' and attorneys' fees. Further, Tenant's agreement to
indemnify Landlord pursuant to this Section 10.1 is not intended and shall not
relieve any insurance carrier of its obligations under policies required to be
carried by Tenant pursuant to the provisions of this Lease, to the extent such
policies cover the matters subject to Tenant's indemnification obligations; nor
shall they supersede any inconsistent agreement of the parties set forth in any
other provision of this Lease. The provisions of this Section 10.1 shall survive
the expiration or sooner termination of this Lease with respect to any claims or
liability arising in connection with any event occurring prior to such
expiration or termination.
14
10.2 TENANT'S COMPLIANCE WITH LANDLORD'S FIRE AND CASUALTY INSURANCE.
Tenant shall, at Tenant's expense, comply with all insurance company
requirements pertaining to the use of the Premises. If Tenant's conduct or use
of the Premises causes any increase in the premium for such insurance policies
then Tenant shall reimburse Landlord for any such increase. Tenant, at Tenant's
expense, shall comply with all rules, orders, regulations or requirements of the
American Insurance Association (formerly the National Board of Fire
Underwriters) and with any similar body.
10.3 TENANT'S INSURANCE. Tenant shall maintain the following coverages in
the following amounts.
10.3.1 Commercial General Liability Insurance covering the insured
against claims of bodily injury, personal injury and property damage (including
loss of use thereof) arising out of Tenant's operations, and contractual
liabilities (covering the performance by Tenant of its indemnity agreements)
including a Broad Form endorsement covering the insuring provisions of this
Lease and the performance by Tenant of the indemnity agreements set forth in
Section 10.1 of this Lease, for limits of liability not less than:
Bodily Injury and $2,000,000 each occurrence
Property Damage Liability $3,000,000 annual aggregate
Personal Injury Liability $2,000,000 each occurrence
$3,000,000 annual aggregate
0% Insured's participation
10.3.2 Physical Damage Insurance covering (i) all office furniture,
business and trade fixtures, office equipment, free-standing cabinet work,
movable partitions, merchandise and all other items of Tenant's property on the
Premises installed by, for, or at the expense of Tenant, (ii) the "Tenant
Improvements," as that term is defined in Section 2.1 of the Tenant Work Letter,
and any other improvements which exist in the Premises as of the Lease
Commencement Date (excluding the Base Building) (the "ORIGINAL IMPROVEMENTS"),
and (iii) all other improvements, alterations and additions to the Premises.
Such insurance shall be written on an "all risks" of physical loss or damage
basis, for the full replacement cost value (subject to reasonable deductible
amounts) new without deduction for depreciation of the covered items and in
amounts that meet any co-insurance clauses of the policies of insurance and
shall include coverage for damage or other loss caused by fire or other peril
including, but not limited to, vandalism and malicious mischief, theft, water
damage of any type, including sprinkler leakage, bursting or stoppage of pipes,
and explosion, and providing business interruption coverage for a period of one
year.
10.3.3 Worker's Compensation and Employer's Liability or other similar
insurance pursuant to all applicable state and local statutes and regulations.
10.3.4 Business Interruption Insurance in the amount necessary to
insure payment of Tenant's obligations to pay Rent hereunder for a period of not
less than twelve (12) months.
10.4 FORM OF POLICIES. The minimum limits of policies of insurance required
of Tenant under this Lease shall in no event limit the liability of Tenant under
this Lease. Such insurance shall (i) name Landlord, and any other party the
Landlord so specifies, as an additional insured, including Landlord's managing
agent, if any; (ii) specifically cover the liability assumed by Tenant under
this Lease, including, but not limited to, Tenant's obligations under Section
10.1 of this Lease; (iii) be issued by an insurance company having a rating of
not less than A-X in Best's Insurance Guide or which is otherwise acceptable to
Landlord and licensed to do business in the State of California; (iv) be primary
insurance as to all claims thereunder and provide that any insurance carried by
Landlord is excess and is non-contributing with any insurance requirement of
Tenant; (v) be in form and content reasonably acceptable to Landlord; and (vi)
provide that said insurance shall not be canceled or coverage changed unless
thirty (30) days' prior written notice shall have been given to Landlord and any
mortgagee of Landlord. Tenant shall deliver said policy or policies or
certificates (including endorsements) thereof to Landlord on or before the Lease
Commencement Date and at least thirty (30) days before the expiration dates
thereof. In the event Tenant shall fail to procure such insurance, or to deliver
such policies or certificate, Landlord may, at its option, procure such policies
for the account of Tenant, and
15
the cost thereof shall be paid to Landlord within five (5) days after delivery
to Tenant of bills therefor.
10.5 SUBROGATION. Landlord and Tenant intend that their respective property
loss risks shall be borne by reasonable insurance carriers to the extent above
provided, and Landlord and Tenant hereby agree to look solely to, and seek
recovery only from, their respective insurance carriers in the event of a
property loss to the extent that such coverage is agreed to be provided
hereunder. The parties each hereby waive all rights and claims against each
other for such losses, and waive all rights of subrogation of their respective
insurers, provided such waiver of subrogation shall not affect the right of the
insured to recover thereunder. The parties agree that their respective insurance
policies are now, or shall be, endorsed such that the waiver of subrogation
shall not affect the right of the insured to recover thereunder, so long as no
material additional premium is charged therefor.
10.6 ADDITIONAL INSURANCE OBLIGATIONS. Tenant shall carry and maintain
during the entire Lease Term, as the same may be extended, at Tenant's sole cost
and expense, increased amounts of the insurance required to be carried by Tenant
pursuant to this Article 10 and such other reasonable types of insurance
coverage and in such reasonable amounts covering the Premises and Tenant's
operations therein, as may be reasonably requested by Landlord, but in no event
in excess of the amounts and types of insurance then being required by landlords
of buildings comparable to and in the vicinity of the Building.
ARTICLE 11
DAMAGE AND DESTRUCTION
11.1 REPAIR OF DAMAGE TO PREMISES BY LANDLORD. Tenant shall promptly notify
Landlord of any damage to the Premises resulting from fire or any other
casualty. If the Premises or any Common Areas serving or providing access to the
Premises shall be damaged by fire or other casualty, Landlord shall promptly and
diligently, subject to reasonable delays for insurance adjustment or other
matters beyond Landlord's reasonable control, and subject to all other terms of
this Article 11, restore the Base Building and such Common Areas. Such
restoration shall be to substantially the same condition of the Base Building
and the Common Areas prior to the casualty, except for modifications required by
zoning and building codes and other laws or by the holder of a mortgage on the
Building or Project or any other modifications to the Common Areas deemed
desirable by Landlord, provided that access to the Premises and any common
restrooms serving the Premises shall not be materially impaired. Upon the
occurrence of any damage to the Premises, upon notice (the "LANDLORD REPAIR
NOTICE") to Tenant from Landlord, Tenant shall assign to Landlord (or to any
party designated by Landlord) all insurance proceeds payable to Tenant under
Tenant's insurance required under Section 10.3 of this Lease, and Landlord shall
repair any injury or damage to the Tenant Improvements and the Original
Improvements installed in the Premises and shall return such Tenant Improvements
and Original Improvements to their original condition; provided that if the cost
of such repair by Landlord exceeds the amount of insurance proceeds received by
Landlord from Tenant's insurance carrier, as assigned by Tenant, the cost of
such repairs shall be paid by Tenant to Landlord prior to Landlord's
commencement of repair of the damage, or as soon as such additional costs are
known. In the event that Landlord does not deliver the Landlord Repair Notice
within sixty (60) days following the date the casualty becomes known to
Landlord, Tenant shall, at its sole cost and expense, repair any injury or
damage to the Tenant Improvements and the Original Improvements installed in the
Premises and shall return such Tenant Improvements and Original Improvements to
their original condition. Whether or not Landlord delivers a Landlord Repair
Notice, prior to the commencement of construction, Tenant shall submit to
Landlord, for Landlord's review and approval, all plans, specifications and
working drawings relating thereto, and Landlord shall select the contractors to
perform such improvement work. Landlord shall not be liable for any
inconvenience or annoyance to Tenant or its visitors, or injury to Tenant's
business resulting in any way from such damage or the repair thereof; provided
however, that if such fire or other casualty shall have damaged the Premises or
Common Areas necessary to Tenant's occupancy, Landlord shall allow Tenant a
proportionate abatement of Rent during the time and to the extent the Premises
are unfit for occupancy for the purposes permitted under this Lease, and not
occupied by Tenant as a result thereof; provided, further, however, that if the
damage or destruction is due to the negligence or wilful misconduct of Tenant or
any of its agents, employees, contractors, invitees or guests, Tenant shall be
responsible for any reasonable, applicable insurance deductible (which shall be
payable to
16
Landlord upon demand) and there shall be no rent abatement. In the event that
Landlord shall not deliver the Landlord Repair Notice, Tenant's right to rent
abatement pursuant to the preceding sentence shall terminate as of the date
which is reasonably determined by Landlord to be the date Tenant should have
completed repairs to the Premises assuming Tenant used reasonable due diligence
in connection therewith.
11.2 LANDLORD'S OPTION TO REPAIR. Notwithstanding the terms of Section 11.1
of this Lease, Landlord may elect not to rebuild and/or restore the Premises,
Building and/or Project, and instead terminate this Lease, by notifying Tenant
in writing of such termination within sixty (60) days after the date of damage,
such notice to include a termination date giving Tenant sixty (60) days to
vacate the Premises, but Landlord may so elect only if the Building or Project
shall be damaged by fire or other casualty or cause, whether or not the Premises
are affected, and one or more of the following conditions is present: (i) in
Landlord's reasonable judgment, repairs cannot reasonably be completed within
ninety (90) days after the date of discovery of the damage (when such repairs
are made without the payment of overtime or other premiums); (ii) the holder of
any mortgage on the Building or Project or ground lessor with respect to the
Building or Project shall require that the insurance proceeds or any portion
thereof be used to retire the mortgage debt, or shall terminate the ground
lease, as the case may be; (iii) the damage is not fully covered by Landlord's
insurance policies; or (iv) Landlord decides to rebuild the Building or Common
Areas so that they will be substantially different structurally or
architecturally; (v) the damage occurs during the last twelve (12) months of the
Lease Term; or (vi) any owner of any other portion of the Project, other than
Landlord, does not intend to repair the damage to such portion of the Project.
If Landlord does not elect to terminate this Lease pursuant to Landlord's
termination right as provided above, and if the repairs cannot, in the
reasonable opinion of Landlord, be completed within one hundred eighty (180)
days after being commenced, Tenant may elect, no earlier than sixty (60) days
after the date of the damage and not later than ninety (90) days after the date
of such damage, to terminate this Lease by written notice to Landlord effective
as of the date specified in the notice, which date shall not be less than thirty
(30) days nor more than sixty (60) days after the date such notice is given by
Tenant.
11.3 WAIVER OF STATUTORY PROVISIONS. The provisions of this Lease,
including this Article 11, constitute an express agreement between Landlord and
Tenant with respect to any and all damage to, or destruction of, all or any part
of the Premises, the Building or the Project, and any statute or regulation of
the State of California, including, without limitation, Sections 1932(2) and
1933(4) of the California Civil Code, with respect to any rights or obligations
concerning damage or destruction in the absence of an express agreement between
the parties, and any other statute or regulation, now or hereafter in effect,
shall have no application to this Lease or any damage or destruction to all or
any part of the Premises, the Building or the Project.
ARTICLE 12
NONWAIVER
No provision of this Lease shall be deemed waived by either party hereto
unless expressly waived in a writing signed thereby. The waiver by either party
hereto of any breach of any term, covenant or condition herein contained shall
not be deemed to be a waiver of any subsequent breach of same or any other term,
covenant or condition herein contained. The subsequent acceptance of Rent
hereunder by Landlord shall not be deemed to be a waiver of any preceding breach
by Tenant of any term, covenant or condition of this Lease, other than the
failure of Tenant to pay the particular Rent so accepted, regardless of
Landlord's knowledge of such preceding breach at the time of acceptance of such
Rent. No acceptance of a lesser amount than the Rent herein stipulated shall be
deemed a waiver of Landlord's right to receive the full amount due, nor shall
any endorsement or statement on any check or payment or any letter accompanying
such check or payment be deemed an accord and satisfaction, and Landlord may
accept such check or payment without prejudice to Landlord's right to recover
the full amount due. Except to the extent otherwise agreed to by the parties in
writing, no receipt of monies by Landlord from Tenant after the termination of
this Lease shall in any way alter the length of the Lease Term or of Tenant's
right of possession hereunder, or after the giving of any notice shall
reinstate, continue or extend the Lease Term or affect any notice given Tenant
prior to the receipt of such monies, it being agreed that after the service of
notice or the commencement of a suit, or after final judgment for possession of
the Premises, Landlord may receive and collect any Rent due, and the payment of
said Rent shall not waive or affect said notice, suit or judgment.
17
ARTICLE 13
CONDEMNATION
If the whole or more than twenty-five percent (25%) of the Premises,
Building or Project shall be taken by power of eminent domain or condemned by
any competent authority for any public or quasi-public use or purpose, or if any
adjacent property or street shall be so taken or condemned, or reconfigured or
vacated by such authority in such manner as to require the use, reconstruction
or remodeling of any part of the Premises, Building or Project, or if Landlord
shall grant a deed or other instrument in lieu of such taking by eminent domain
or condemnation, Landlord shall have the option to terminate this Lease
effective as of the date possession is required to be surrendered to the
authority. If more than twenty-five percent (25%) of the rentable square feet of
the Premises is taken, or if access to the Premises is substantially impaired,
in each case for a period in excess of one hundred twenty (120) days, Tenant
shall have the option to terminate this Lease effective as of the date
possession is required to be surrendered to the authority. Tenant shall not
because of such taking assert any claim against Landlord or the authority for
any compensation because of such taking and Landlord shall be entitled to the
entire award or payment in connection therewith, except that Tenant shall have
the right to file any separate claim available to Tenant for any taking of
Tenant's personal property and fixtures belonging to Tenant and removable by
Tenant upon expiration of the Lease Term pursuant to the terms of this Lease,
and for moving expenses, so long as such claims do not diminish the award
available to Landlord, its ground lessor with respect to the Building or Project
or its mortgagee, and such claim is payable separately to Tenant. All Rent shall
be apportioned as of the date of such termination. If any part of the Premises
shall be taken, and this Lease shall not be so terminated, the Rent shall be
proportionately abated. Tenant hereby waives any and all rights it might
otherwise have pursuant to Section 1265.130 of The California Code of Civil
Procedure. Notwithstanding anything to the contrary contained in this Article
13, in the event of a temporary taking of all or any portion of the Premises for
a period of one hundred and twenty (120) days or less, then this Lease shall not
terminate but the Base Rent and the Additional Rent shall be abated for the
period of such taking in proportion to the ratio that the amount of rentable
square feet of the Premises taken bears to the total rentable square feet of the
Premises. Landlord shall be entitled to receive the entire award made in
connection with any such temporary taking.
ARTICLE 14
ASSIGNMENT AND SUBLETTING
14.1 TRANSFERS. Except as provided in Section 14.8 of this Lease, Tenant
shall not, without the prior written consent of Landlord, assign, mortgage,
pledge, hypothecate, encumber, or permit any lien to attach to, or otherwise
transfer, this Lease or any interest hereunder, permit any assignment, or other
transfer of this Lease or any interest hereunder by operation of law, sublet the
Premises or any part thereof, or enter into any license or concession agreements
or otherwise permit the occupancy or use of the Premises or any part thereof by
any persons other than Tenant and its employees and contractors (all of the
foregoing are hereinafter sometimes referred to collectively as "TRANSFERS" and
any person to whom any Transfer is made or sought to be made is hereinafter
sometimes referred to as a "TRANSFEREE"). If Tenant desires Landlord's consent
to any Transfer, Tenant shall notify Landlord in writing, which notice (the
"TRANSFER NOTICE") shall include (i) the proposed effective date of the
Transfer, which shall not be less than thirty (30) days nor more than one
hundred eighty (180) days after the date of delivery of the Transfer Notice,
(ii) a description of the portion of the Premises to be transferred (the
"SUBJECT SPACE"), (iii) all of the terms of the proposed Transfer and the
consideration therefor, including calculation of the "Transfer Premium", as that
term is defined in Section 14.3 below, in connection with such Transfer, the
name and address of the proposed Transferee, and a copy of all existing executed
and/or proposed documentation pertaining to the proposed Transfer, including all
existing operative documents to be executed to evidence such Transfer or the
agreements incidental or related to such Transfer, (iv) current financial
statements of the proposed Transferee certified by an officer, partner or owner
thereof, business credit and personal references and history of the proposed
Transferee and any other information reasonably required by Landlord which will
enable Landlord to determine the financial responsibility, character, and
reputation of the proposed Transferee, nature of such Transferee's business and
proposed use of the Subject Space, (v) any proposed sublease document, if
applicable, which sublease document shall contain language stating that in the
event Landlord and Tenant
18
terminate this Lease for any reason or for no reason, such subtenant
acknowledges and agrees that the sublease shall automatically terminate and be
of no further force or effect, and (vi) an executed estoppel certificate from
Tenant in the form attached hereto as Exhibit E. Any Transfer made without
Landlord's prior written consent shall, at Landlord's option, be null, void and
of no effect, and shall, at Landlord's option, constitute a default by Tenant
under this Lease. Whether or not Landlord consents to any proposed Transfer,
Tenant shall pay Landlord's review and processing fees, as well as any
reasonable professional fees (including, without limitation, attorneys',
accountants', architects', engineers' and consultants' fees) incurred by
Landlord, within thirty (30) days after written request by Landlord, in an
amount not to exceed One Thousand Five Hundred and No/100 Dollars ($1,500.00)
for a transfer in the ordinary course of business.
14.2 LANDLORD'S CONSENT. Landlord shall not unreasonably withhold,
condition or delay its consent to any proposed Transfer of the Subject Space to
the Transferee on the terms specified in the Transfer Notice. Without limitation
as to other reasonable grounds for withholding consent, the parties hereby agree
that it shall be reasonable under this Lease and under any applicable law for
Landlord to withhold consent to any proposed Transfer where one or more of the
following apply:
14.2.1 The Transferee is of a character or reputation or engaged in a
business which is not consistent with the quality of the Building or the
Project; 14.2.2 The Transferee intends to use the Subject Space for purposes
which are not permitted under this Lease;
14.2.3 The Transferee is either a governmental agency or
instrumentality thereof;
14.2.4 The financial strength of the Transferee is not greater than or
equal to the financial strength of Tenant as of the execution and delivery of
this Lease;
14.2.5 The proposed Transfer would cause a violation of another lease
for space in the Project, or would give an occupant of the Project a right to
cancel its lease;
14.2.6 Either the proposed Transferee, or any person or entity which
directly or indirectly, controls, is controlled by, or is under common control
with, the proposed Transferee, (i) occupies space in the Project at the time of
the request for consent, or (ii) is negotiating or has negotiated with Landlord
to lease space in the Project; provided that Landlord has sufficient space
available to reasonably meet the needs of such proposed Transferee.
If Landlord consents to any Transfer pursuant to the terms of this Section
14.2 (and does not exercise any recapture rights Landlord may have under Section
14.4 of this Lease), Tenant may within six (6) months after Landlord's consent,
but not later than the expiration of said six-month period, enter into such
Transfer of the Premises or portion thereof, upon substantially the same terms
and conditions as are set forth in the Transfer Notice furnished by Tenant to
Landlord pursuant to Section 14.1 of this Lease, provided that if there are any
changes in the terms and conditions from those specified in the Transfer Notice
(i) such that Landlord would initially have been entitled to refuse its consent
to such Transfer under this Section 14.2, or (ii) which would cause the proposed
Transfer to be materially more favorable to the Transferee than the terms set
forth in Tenant's original Transfer Notice, Tenant shall again submit the
Transfer to Landlord for its approval and other action under this Article 14
(including Landlord's right of recapture, if any, under Section 14.4 of this
Lease). Notwithstanding Landlord's consent to any sublease pursuant to this
Article 14, in the event Landlord and Tenant elect to terminate this Lease for
any reason or for no reason, any such sublease shall automatically terminate and
be of no further force or effect. Notwithstanding anything to the contrary in
this Lease, if Tenant or any proposed Transferee claims that Landlord has
unreasonably withheld or delayed its consent under Section 14.2 or otherwise has
breached or acted unreasonably under this Article 14, their sole remedies shall
be a declaratory judgment and an injunction for the relief sought without any
monetary damages, and Tenant hereby waives all other remedies, including,
without limitation, any right at law or equity to terminate this Lease, on its
own behalf and, to the extent permitted under all applicable laws, on behalf of
the proposed Transferee. Tenant shall indemnify, defend and hold harmless
Landlord from any and all liability, losses, claims, damages, costs, expenses,
causes of action and proceedings involving any third party or parties (including
without limitation Tenant's proposed subtenant or assignee) who claim they were
damaged by Landlord's wrongful withholding or conditioning of Landlord's
consent.
19
14.3 TRANSFER PREMIUM. If Landlord consents to a Transfer, as a condition
thereto which the parties hereby agree is reasonable, Tenant shall pay to
Landlord fifty percent (50%) of any "Transfer Premium," as that term is defined
in this Section 14.3, received by Tenant from such Transferee, after deducting
the reasonable expenses incurred by Tenant for (i) any changes, alterations and
improvements to the Premises in connection with the Transfer, (ii) any
commercially reasonable brokerage commissions in connection with the Transfer,
(iii) reasonable legal fees in connection with the Transfer, and (iv) reasonable
out-of-pocket costs of advertising the Subject Space related to the Transfer.
"TRANSFER PREMIUM" shall mean all rent, additional rent or other consideration
payable by such Transferee in connection with the Transfer in excess of the Rent
and Additional Rent payable by Tenant under this Lease during the term of the
Transfer on a per rentable square foot basis if less than all of the Premises is
transferred. "Transfer Premium" shall also include, but not be limited to, key
money, bonus money or other cash consideration paid by Transferee to Tenant in
connection with such Transfer, and any payment in excess of fair market value
for services rendered by Tenant to Transferee or for assets, fixtures,
inventory, equipment, or furniture transferred by Tenant to Transferee in
connection with such Transfer.
14.4 LANDLORD'S OPTION AS TO SUBJECT SPACE. Notwithstanding anything to the
contrary contained in this Article 14, with respect to (i) a proposed assignment
or (ii) a proposed sublease of not less than fifty percent (50%) of the
Premises, Landlord shall have the option, by giving written notice to Tenant
within thirty (30) days after receipt of any Transfer Notice, to recapture the
Subject Space. Such recapture notice shall cancel and terminate this Lease with
respect to the Subject Space as of the date stated in the Transfer Notice as the
effective date of the proposed Transfer (or at Landlord's option, shall cause
the Transfer to be made to Landlord or its agent, in which case the parties
shall execute the Transfer documentation promptly thereafter). In the event of a
recapture by Landlord, if this Lease shall be canceled with respect to less than
the entire Premises, the Rent reserved herein shall be prorated on the basis of
the number of rentable square feet retained by Tenant in proportion to the
number of rentable square feet contained in the Premises, and this Lease as so
amended shall continue thereafter in full force and effect, and upon request of
either party, the parties shall execute written confirmation of the same. If
Landlord declines, or fails to elect in a timely manner to recapture the Subject
Space under this Section 14.4, then, provided Landlord has consented to the
proposed Transfer, Tenant shall be entitled to proceed to transfer the Subject
Space to the proposed Transferee, subject to provisions of this Article 14.
14.5 EFFECT OF TRANSFER. If Landlord consents to a Transfer, (i) the terms
and conditions of this Lease shall in no way be deemed to have been waived or
modified, (ii) such consent shall not be deemed consent to any further Transfer
by either Tenant or a Transferee, (iii) Tenant shall deliver to Landlord,
promptly after execution, an original executed copy of all documentation
pertaining to the Transfer in form reasonably acceptable to Landlord, (iv)
Tenant shall furnish upon Landlord's request a complete statement, certified by
an independent certified public accountant, or Tenant's chief financial officer,
setting forth in detail the computation of any Transfer Premium Tenant has
derived and shall derive from such Transfer, and (v) no Transfer relating to
this Lease or agreement entered into with respect thereto, whether with or
without Landlord's consent, shall relieve Tenant or any guarantor of the Lease
from any liability under this Lease, including, without limitation, in
connection with the Subject Space. Landlord or its authorized representatives
shall have the right at all reasonable times upon the delivery of prior notice
to Tenant, to audit the books, records and papers of Tenant relating to any
Transfer, and shall have the right to make copies thereof. If the Transfer
Premium respecting any Transfer shall be found understated, Tenant shall, within
thirty (30) days after demand, pay the deficiency, and if understated by more
than two percent (2%), Tenant shall pay Landlord's costs of such audit.
14.6 ADDITIONAL TRANSFERS. For purposes of this Lease, the term "TRANSFER"
shall also include (i) if Tenant is a partnership, the withdrawal or change,
voluntary, involuntary or by operation of law, of twenty-five percent (25%) or
more of the partners, or transfer of twenty-five percent (25%) or more of
partnership interests, within a twelve (12)-month period, or the dissolution of
the partnership without immediate reconstitution thereof, and (ii) if Tenant is
a closely held corporation (I.E., whose stock is not publicly held and not
traded through an exchange or over the counter), (A) the dissolution, merger,
consolidation or other reorganization of Tenant or (B) the sale or other
transfer of an aggregate of fifty percent (50%) or more of the voting shares of
Tenant (other than to immediate family members by reason of gift or death),
within a twelve (12)-month period, or (C) the sale, mortgage, hypothecation or
pledge of an
20
aggregate of fifty percent (50%) or more of the value of the unencumbered assets
of Tenant within a twelve (12)-month period.
14.7 OCCURRENCE OF DEFAULT. Any Transfer hereunder shall be subordinate and
subject to the provisions of this Lease, and if this Lease shall be terminated
during the term of any Transfer, Landlord shall have the right to: (i) treat
such Transfer as cancelled and repossess the Subject Space by any lawful means,
or (ii) require that such Transferee attorn to and recognize Landlord as its
landlord under any such Transfer. If Tenant shall be in default under this
Lease, Landlord is hereby irrevocably authorized, as Tenant's agent and
attorney-in-fact, to direct any Transferee to make all payments under or in
connection with the Transfer directly to Landlord (which Landlord shall apply
towards Tenant's obligations under this Lease) until such default is cured. Such
Transferee shall rely on any representation by Landlord that Tenant is in
default hereunder, without any need for confirmation thereof by Tenant. Upon any
assignment, the assignee shall assume in writing all obligations and covenants
of Tenant thereafter to be performed or observed under this Lease. No collection
or acceptance of rent by Landlord from any Transferee shall be deemed a waiver
of any provision of this Article 14 or the approval of any Transferee or a
release of Tenant from any obligation under this Lease, whether theretofore or
thereafter accruing. In no event shall Landlord's enforcement of any provision
of this Lease against any Transferee be deemed a waiver of Landlord's right to
enforce any term of this Lease against Tenant or any other person. If Tenant's
obligations hereunder have been guaranteed, Landlord's consent to any Transfer
shall not be effective unless the guarantor also consents to such Transfer.
14.8 NON-TRANSFERS. Notwithstanding anything to the contrary contained in
this Article 14, an assignment or subletting of all or a portion of the Premises
to an affiliate of Tenant (an entity which is controlled by, controls, or is
under common control with, Tenant) shall not be deemed a Transfer under this
Article 14, provided that Tenant notifies Landlord of any such assignment or
sublease and promptly supplies Landlord with any documents or information
reasonably requested by Landlord regarding such assignment or sublease or such
affiliate, and further provided that such assignment or sublease is not a
subterfuge by Tenant to avoid its obligations under this Lease. "CONTROL," as
used in this Section 14.8, shall mean the ownership, directly or indirectly, of
at least fifty-one percent (51%) of the voting securities of, or possession of
the right to vote, in the ordinary direction of its affairs, of at least
fifty-one percent (51%) of the voting interest in, any person or entity. No
assignment or sublease made by Tenant pursuant to the terms of this Section 14.8
shall be deemed to be a release of Tenant from the performance of Tenant's
obligations under this Lease.
ARTICLE 15
SURRENDER OF PREMISES; OWNERSHIP AND
REMOVAL OF TRADE FIXTURES
15.1 SURRENDER OF PREMISES. No act or thing done by Landlord or any agent
or employee of Landlord during the Lease Term shall be deemed to constitute an
acceptance by Landlord of a surrender of the Premises unless such intent is
specifically acknowledged in writing by Landlord. The delivery of keys to the
Premises to Landlord or any agent or employee of Landlord shall not constitute a
surrender of the Premises or effect a termination of this Lease, whether or not
the keys are thereafter retained by Landlord, and notwithstanding such delivery
Tenant shall be entitled to the return of such keys at any reasonable time upon
request until this Lease shall have been properly terminated. The voluntary or
other surrender of this Lease by Tenant, whether accepted by Landlord or not, or
a mutual termination hereof, shall not work a merger, and at the option of
Landlord shall operate as an assignment to Landlord of all subleases or
subtenancies affecting the Premises or terminate any or all such sublessees or
subtenancies.
15.2 REMOVAL OF TENANT PROPERTY BY TENANT. Upon the expiration of the Lease
Term, or upon any earlier termination of this Lease, Tenant shall, subject to
the provisions of this Article 15, quit and surrender possession of the Premises
to Landlord in substantially the same order and condition as when Tenant took
possession and as thereafter improved by Landlord and/or Tenant, reasonable wear
and tear, damage by casualty and repairs which are specifically made the
responsibility of Landlord hereunder excepted. Upon such expiration or
termination, Tenant shall, without expense to Landlord, remove or cause to be
removed from the Premises all debris and rubbish, and such items of furniture,
equipment, business and trade fixtures, free-standing cabinet work, movable
partitions and other articles of personal property owned by
21
Tenant or installed or placed by Tenant at its expense in the Premises (the
"TENANT PERSONAL PROPERTY"), and such similar articles of any other persons
claiming under Tenant, as Landlord may, in its sole discretion, require to be
removed, and Tenant shall repair at its own expense all damage to the Premises
and Building resulting from such removal. Landlord shall have the right, at
Tenant's sole cost and expense, to dispose of any Tenant Personal Property
remaining in the Premises after Tenant's vacation of the same in any manner
Landlord sees fit.
ARTICLE 16
HOLDING OVER
If Tenant holds over after the expiration of the Lease Term or earlier
termination thereof, with or without the express or implied consent of Landlord,
such tenancy shall be from month-to-month only, and shall not constitute a
renewal hereof or an extension for any further term, and in such case Rent shall
be payable at a monthly rate equal to the product of (i) the Rent applicable
during the last rental period of the Lease Term under this Lease, and (ii) a
percentage equal to the sum of (A) 150% and (B) the percentage by which Rent was
increased at the time of the last increase of Rent during the Lease Term. Such
month-to-month tenancy shall be subject to every other applicable term, covenant
and agreement contained herein. Nothing contained in this Article 16 shall be
construed as consent by Landlord to any holding over by Tenant, and Landlord
expressly reserves the right to require Tenant to surrender possession of the
Premises to Landlord as provided in this Lease upon the expiration or other
termination of this Lease. The provisions of this Article 16 shall not be deemed
to limit or constitute a waiver of any other rights or remedies of Landlord
provided herein or at law. If Tenant fails to surrender the Premises upon the
termination or expiration of this Lease, in addition to any other liabilities to
Landlord accruing therefrom, Tenant shall protect, defend, indemnify and hold
Landlord harmless from all loss, costs (including reasonable attorneys' fees)
and liability resulting from such failure, including, without limiting the
generality of the foregoing, any claims made by any succeeding tenant founded
upon such failure to surrender and any lost profits to Landlord resulting
therefrom.
ARTICLE 17
ESTOPPEL CERTIFICATES
Within ten (10) business days following a request in writing by Landlord or
Tenant, Tenant or Landlord, as the case may be, shall execute, acknowledge and
deliver to the requesting party (the "REQUESTING PARTY") an estoppel
certificate, which shall be substantially in the form of EXHIBIT E, attached
hereto (or such other form as may reasonably be required by any prospective
mortgagee or purchaser of the Project, or any portion thereof), indicating
therein any exceptions thereto that may exist at that time, and shall also
contain any other information reasonably requested by the Requesting Party or
Landlord's mortgagee or prospective mortgagee. Any such certificate may be
relied upon by any prospective mortgagee or purchaser of all or any portion of
the Project and/or by any Transferee of Tenant, as the case may be. Appropriate
modification shall be made to EXHIBIT E when Tenant is the Requesting Party. At
any time during the Lease Term, Landlord may require Tenant to provide Landlord
with a current financial statement and financial statements of the two (2) years
prior to the current financial statement year. Such statements shall be prepared
in accordance with generally accepted accounting principles and, if such is the
normal practice of Tenant, shall be audited by an independent certified public
accountant. Failure of Tenant to timely execute, acknowledge and deliver such
estoppel certificate or other instruments shall constitute an acceptance of the
Premises and an acknowledgment by Tenant that statements included in the
estoppel certificate are true and correct, without exception.
ARTICLE 18
SUBORDINATION
This Lease shall be subject and subordinate to all present and future
ground or underlying leases of the Building or Project and to the lien of any
mortgage, trust deed or other encumbrances now or hereafter in force against the
Building or Project or any part thereof, if any, and to all renewals,
extensions, modifications, consolidations and replacements thereof, and to all
advances made or hereafter to be made upon the security of such mortgages or
trust deeds,
22
unless the holders of such mortgages, trust deeds or other encumbrances, or the
lessors under such ground lease or underlying leases, require in writing that
this Lease be superior thereto. Tenant covenants and agrees in the event any
proceedings are brought for the foreclosure of any such mortgage or deed in lieu
thereof (or if any ground lease is terminated), to attorn, without any
deductions or set-offs whatsoever, to the lienholder or purchaser or any
successors thereto upon any such foreclosure sale or deed in lieu thereof (or to
the ground lessor), if so requested to do so by such purchaser or lienholder or
ground lessor, and to recognize such purchaser or lienholder or ground lessor as
the lessor under this Lease, provided such lienholder or purchaser or ground
lessor shall agree to accept this Lease and not disturb Tenant's occupancy, so
long as Tenant timely pays the rent and observes and performs the terms,
covenants and conditions of this Lease to be observed and performed by Tenant.
Landlord's interest herein may be assigned as security at any time to any
lienholder. Tenant shall, within ten (10) days of request by Landlord, execute
such further instruments or assurances as Landlord may reasonably deem necessary
to evidence or confirm the subordination or superiority of this Lease to any
such mortgages, trust deeds, ground leases or underlying leases. Tenant waives
the provisions of any current or future statute, rule or law which may give or
purport to give Tenant any right or election to terminate or otherwise adversely
affect this Lease and the obligations of the Tenant hereunder in the event of
any foreclosure proceeding or sale. Tenant shall, within ten (10) days of
request by Landlord from time to time, (i) execute a Nondisturbance and
Attornment Agreement in the form reasonably approved by Landlord's mortgagee in
favor of any mortgagee of the Building or Project, and (ii) execute any other
form of nondisturbance and attornment agreement (or subordination,
nondisturbance and attornment agreement, or subordination of the applicable
mortgagee's lien) reasonably required by any mortgagee of the Building or
Project which provides comparable nondisturbance protection to Tenant in the
event of a foreclosure.
ARTICLE 19
DEFAULTS; REMEDIES
19.1 EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute a default of this Lease by Tenant:
19.1.1 Any failure by Tenant to pay any Rent or any other charge
required to be paid under this Lease, or any part thereof, when due unless such
failure is cured within five (5) business days after receipt of written notice
that said amount was not paid when due; or
19.1.2 Except where a specific time period is otherwise set forth for
Tenant's performance in this Lease, in which event the failure to perform by
Tenant within such time period shall be a default by Tenant under this Section
19.1.2, any failure by Tenant to observe or perform any other provision,
covenant or condition of this Lease to be observed or performed by Tenant where
such failure continues for thirty (30) days after written notice thereof from
Landlord to Tenant; provided that if the nature of such default is such that the
same cannot reasonably be cured within a thirty (30) day period, Tenant shall
not be deemed to be in default if it diligently commences such cure within such
period and thereafter diligently proceeds to rectify and cure such default, but
in no event exceeding a period of time in excess of ninety (90) days after
written notice thereof from Landlord to Tenant; or
19.1.3 To the extent permitted by law, a general assignment by Tenant
or any guarantor of the Lease for the benefit of creditors, or the taking of any
corporate action in furtherance of bankruptcy or dissolution whether or not
there exists any proceeding under an insolvency or bankruptcy law, or the filing
by or against Tenant or any guarantor of any proceeding under an insolvency or
bankruptcy law, unless in the case of a proceeding filed against Tenant or any
guarantor the same is dismissed within sixty (60) days, or the appointment of a
trustee or receiver to take possession of all or substantially all of the assets
of Tenant or any guarantor, unless possession is restored to Tenant or such
guarantor within thirty (30) days, or any execution or other judicially
authorized seizure of all or substantially all of Tenant's assets located upon
the Premises or of Tenant's interest in this Lease, unless such seizure is
discharged within thirty (30) days; or
19.1.4 Abandonment or vacation of all or a substantial portion of the
Premises by Tenant for a period of not less than thirty (30) days; or
23
19.1.5 The failure by Tenant to observe or perform according to the
provisions of Articles 5, 14, 17 or 18 of this Lease where such failure
continues for more than two (2) business days after notice from Landlord.
The notice periods provided herein are in lieu of, and not in addition to,
any notice periods provided by law.
19.2 REMEDIES UPON DEFAULT. Upon the occurrence of any event of default by
Tenant, Landlord shall have, in addition to any other remedies available to
Landlord at law or in equity (all of which remedies shall be distinct, separate
and cumulative), the option to pursue any one or more of the following remedies,
each and all of which shall be cumulative and nonexclusive, without any notice
or demand whatsoever.
19.2.1 Terminate this Lease, in which event Tenant shall immediately
surrender the Premises to Landlord, and if Tenant fails to do so, Landlord may,
without prejudice to any other remedy which it may have for possession or
arrearages in rent, enter upon and take possession of the Premises and expel or
remove Tenant and any other person who may be occupying the Premises or any part
thereof, without being liable for prosecution or any claim or damages therefor;
and Landlord may recover from Tenant the following:
(i) The worth at the time of award of any unpaid rent which has been
earned at the time of such termination; plus
(ii) The worth at the time of award of the amount by which the unpaid
rent which would have been earned after termination until the time of award
exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; plus
(iii) The worth at the time of award of the amount by which the unpaid
rent for the balance of the Lease Term after the time of award exceeds the
amount of such rental loss that Tenant proves could have been reasonably
avoided; plus
(iv) Any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform its obligations
under this Lease or which in the ordinary course of things would be likely to
result therefrom, specifically including but not limited to, brokerage
commissions and reasonable advertising expenses incurred, reasonable expenses of
remodeling the Premises or any portion thereof for a new tenant, whether for the
same or a different use, and any special concessions made to obtain a new
tenant; and
(v) At Landlord's election, such other amounts in addition to or in
lieu of the foregoing as may be permitted from time to time by applicable law.
The term "rent" as used in this Section 19.2 shall be deemed to be and to mean
all sums of every nature required to be paid by Tenant pursuant to the terms of
this Lease, whether to Landlord or to others. As used in Paragraphs 19.2.1(i)
and (ii), above, the "worth at the time of award" shall be computed by allowing
interest at the rate set forth in Article 25 of this Lease, but in no case
greater than the maximum amount of such interest permitted by law. As used in
Paragraph 19.2.1(iii) above, the "worth at the time of award" shall be computed
by discounting such amount at the discount rate of the Federal Reserve Bank of
San Francisco at the time of award plus one percent (1%).
19.2.2 Landlord shall have the remedy described in California Civil
Code Section 1951.4 (lessor may continue lease in effect after lessee's breach
and abandonment and recover rent as it becomes due, if lessee has the right to
sublet or assign, subject only to reasonable limitations). Accordingly, if
Landlord does not elect to terminate this Lease on account of any default by
Tenant, Landlord may, from time to time, without terminating this Lease, enforce
all of its rights and remedies under this Lease, including the right to recover
all rent as it becomes due.
19.2.3 Landlord shall at all times have the rights and remedies (which
shall be cumulative with each other and cumulative and in addition to those
rights and remedies available under Sections 19.2.1 and 19.2.2, above, or any
law or other provision of this Lease), without prior demand or notice except as
required by applicable law, to seek any declaratory, injunctive or other
equitable relief, and specifically enforce this Lease, or restrain or enjoin a
violation or breach of any provision hereof.
24
19.3 SUBLEASES OF TENANT. Whether or not Landlord elects to terminate this
Lease on account of any default by Tenant, as set forth in this Article 19,
Landlord shall have the right to terminate any and all subleases, licenses,
concessions or other consensual arrangements for possession entered into by
Tenant and affecting the Premises within ten (10) days of notice from Landlord,
or may, in Landlord's sole discretion, succeed to Tenant's interest in such
subleases, licenses, concessions or arrangements. In the event of Landlord's
election to succeed to Tenant's interest in any such subleases, licenses,
concessions or arrangements, Tenant shall, as of the date of notice by Landlord
of such election, have no further right to or interest in the rent or other
consideration receivable thereunder.
19.4 FORM OF PAYMENT AFTER DEFAULT. Following the third (3rd) occurrence of
an event of default by Tenant, Landlord shall have the right to require that any
or all subsequent amounts paid by Tenant to Landlord hereunder, whether to cure
the default in question or otherwise, be paid in the form of money order,
cashier's or certified check drawn on an institution acceptable to Landlord, or
by other reasonable means approved by Landlord, notwithstanding any prior
practice of accepting payments in any different form.
19.5 EFFORTS TO RELET. No re-entry or repossession, repairs, maintenance,
changes, alterations and additions, reletting, appointment of a receiver to
protect Landlord's interests hereunder, or any other action or omission by
Landlord shall be construed as an election by Landlord to terminate this Lease
or Tenant's right to possession, or to accept a surrender of the Premises, nor
shall same operate to release Tenant in whole or in part from any of Tenant's
obligations hereunder, unless express written notice of such intention is sent
by Landlord to Tenant. Tenant hereby irrevocably waives any right otherwise
available under any law to redeem or reinstate this Lease.
ARTICLE 20
COVENANT OF QUIET ENJOYMENT
Landlord covenants that Tenant, on paying the Rent, charges for services
and other payments herein reserved and on keeping, observing and performing all
the other terms, covenants, conditions, provisions and agreements herein
contained on the part of Tenant to be kept, observed and performed, shall,
during the Lease Term, peaceably and quietly have, hold and enjoy the Premises
subject to the terms, covenants, conditions, provisions and agreements hereof
without interference by any persons lawfully claiming by or through Landlord.
The foregoing covenant is in lieu of any other covenant express or implied.
ARTICLE 21
SECURITY DEPOSIT
Concurrent with Tenant's execution of this Lease, Tenant shall deposit with
Landlord a security deposit (the "SECURITY DEPOSIT") in the amount set forth in
Section 8 of the Summary, as security for the faithful performance by Tenant of
all of its obligations under this Lease. If Tenant defaults with respect to any
provisions of this Lease, beyond any applicable notice and cure period provided
in this Lease, including, but not limited to, the provisions relating to the
payment of Rent, the removal of property and the repair of resultant damage,
Landlord may, without notice to Tenant, but shall not be required to apply all
or any part of the Security Deposit for the payment of any Rent or any other sum
in default and Tenant shall, within ten (10) business days following written
demand therefor, restore the Security Deposit to its original amount. Provided
that Tenant is not then in default under this Lease, beyond any applicable
notice and cure period provided in this Lease, the amount of the Security
Deposit shall, on the first day of the each of second (2nd), third (3rd) and
fourth (4th) Lease Years, be reduced by an amount equal to $19,761.04.
Throughout the remainder of the Lease Term, the amount of the Security Deposit
shall remain at no less than $39,522.09. Any unapplied portion of the Security
Deposit shall be returned to Tenant, or, at Landlord's option, to the last
assignee of Tenant's interest hereunder, within sixty (60) days following the
expiration of the Lease Term. Tenant shall not be entitled to any interest on
the Security Deposit. Tenant hereby waives the provisions of Section 1950.7 of
the California Civil Code, or any successor statute.
25
ARTICLE 22
SUBSTITUTION OF OTHER PREMISES
At any time following the expiration of the first (1st) Lease Year,
Landlord shall have the right to move Tenant to other space in the Project
comparable to the Premises, located on either the second (2nd) or third (3rd)
floors of the Building, and all terms hereof shall apply to the new space with
equal force. In such event, Landlord shall give Tenant not less than sixty (60)
days prior written notice, shall provide Tenant, at Landlord's sole cost and
expense, with tenant improvements at least equal in quality to those in the
Premises and shall move Tenant's effects to the new space at Landlord's sole
cost and expense at such time and in such manner as to inconvenience Tenant as
little as reasonably practicable (i.e. over a weekend). If Tenant is already in
occupancy of the Premises, then Landlord shall also reimburse Tenant for
Tenant's reasonable moving and telephone relocation expenses and for reasonable
quantities of new stationery upon submission to Landlord of receipts for such
expenditures incurred by Tenant. In no event shall the substituted Premises
contain less square footage than 8,623 rentable square feet, and in no event
shall the Base Rent payable by Tenant increase as a result of any relocation of
the Premises by Landlord in accordance with the terms of this Article 22.
Simultaneously with such relocation of the Premises, the parties shall
immediately execute an amendment to this Lease stating the relocation of the
Premises.
ARTICLE 23
SIGNS
23.1 FULL FLOORS. Subject to Landlord's prior written approval, in its sole
discretion, and provided all signs are in keeping with the quality, design and
style of the Building and Project, Tenant, if the Premises comprise an entire
floor of the Building, at its sole cost and expense, may install identification
signage anywhere in the Premises including in the elevator lobby of the
Premises, provided that such signs must not be visible from the exterior of the
Building.
23.2 MULTI-TENANT FLOORS. If other tenants occupy space on the floor on
which the Premises is located, Tenant's identifying signage shall be provided by
Landlord, at Tenant's cost, and such signage shall be comparable to that used by
Landlord for other similar floors in the Building and shall comply with
Landlord's Building standard signage program.
23.3 PROHIBITED SIGNAGE AND OTHER ITEMS. Any signs, notices, logos,
pictures, names or advertisements which are installed and that have not been
separately approved by Landlord may be removed upon not less than three (3) days
prior written notice by Landlord at the sole expense of Tenant. Tenant may not
install any signs on the exterior or roof of the Project or the Common Areas.
Any signs, window coverings, or blinds (even if the same are located behind the
Landlord-approved window coverings for the Building), or other items visible
from the exterior of the Premises or Building, shall be subject to the prior
approval of Landlord, in its sole discretion.
ARTICLE 24
COMPLIANCE WITH LAW
Tenant shall not do anything or suffer anything to be done in or about the
Premises or the Project which will in any way conflict with any law, statute,
ordinance or other governmental rule, regulation or requirement now in force or
which may hereafter be enacted or promulgated (collectively, "APPLICABLE LAWS").
At its sole cost and expense, Tenant shall promptly comply with all such
Applicable Laws which relate to (i) Tenant's use of the Premises, (ii) any
Alterations made by Tenant to the Premises, and any Tenant Improvements in the
Premises, or (iii) the Base Building and Common Areas, but as to the Base
Building and Common Areas, only to the extent such obligations are triggered by
Alterations made by Tenant to the Premises, or the tenant improvements, or use
of the Premises for non-general office use. Should any standard or regulation
now or hereafter be imposed on Landlord or Tenant by a state, federal or local
governmental body charged with the establishment, regulation and enforcement of
occupational, health or safety standards for employers, employees, landlords or
tenants, then Tenant agrees, at its sole cost and expense, to comply promptly
with such standards or regulations. Tenant shall
26
be responsible, at its sole cost and expense, to make all alterations to the
Premises as are required to comply with the governmental rules, regulations,
requirements or standards described in this Article 24. The judgment of any
court of competent jurisdiction or the admission of Tenant in any judicial
action, regardless of whether Landlord is a party thereto, that Tenant has
violated any of said governmental measures, shall be conclusive of that fact as
between Landlord and Tenant. Landlord shall comply with all Applicable Laws
relating to the Base Building and Common Areas, provided that compliance with
such Applicable Laws is not the responsibility of Tenant under this Lease, and
provided further that Landlord's failure to comply therewith would prohibit
Tenant from obtaining or maintaining a certificate of occupancy for the
Premises, or would unreasonably and materially affect Tenant's use of the
Premises for the purposes permitted under the terms of this Lease or the safety
of Tenant's employees or create a significant health hazard for Tenant's
employees. Landlord shall be permitted to include in Operating Expenses any
costs or expenses incurred by Landlord under this Article 24 to the extent
consistent with the terms of Section 4.2.4 above.
ARTICLE 25
LATE CHARGES
If any installment of Rent or any other sum due from Tenant shall not be
received by Landlord or Landlord's designee within five (5) business days after
said amount is due, then Tenant shall pay to Landlord a late charge equal to ten
percent (10%) of the overdue amount plus any attorneys' fees incurred by
Landlord by reason of Tenant's failure to pay Rent and/or other charges when due
hereunder. The late charge shall be deemed Additional Rent and the right to
require it shall be in addition to all of Landlord's other rights and remedies
hereunder or at law and shall not be construed as liquidated damages or as
limiting Landlord's remedies in any manner. In addition to the late charge
described above, any Rent or other amounts owing hereunder which are not paid
within ten (10) business days after the date they are due shall bear interest
from the date when due until paid at a rate per annum equal to the highest rate
permitted by applicable law.
ARTICLE 26
LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT
26.1 LANDLORD'S CURE. All covenants and agreements to be kept or performed
by Tenant under this Lease shall be performed by Tenant at Tenant's sole cost
and expense and without any reduction of Rent, except to the extent, if any,
otherwise expressly provided herein. If Tenant shall fail to perform any
obligation under this Lease, and such failure shall continue in excess of the
time allowed under Section 19.1.2, above, unless a specific time period is
otherwise stated in this Lease, Landlord may, but shall not be obligated to,
make any such payment or perform any such act on Tenant's part without waiving
its rights based upon any default of Tenant and without releasing Tenant from
any obligations hereunder.
26.2 TENANT'S REIMBURSEMENT. Except as may be specifically provided to the
contrary in this Lease, Tenant shall pay to Landlord, upon delivery by Landlord
to Tenant of statements therefor: (i) sums equal to expenditures reasonably made
and obligations incurred by Landlord in connection with the remedying by
Landlord of Tenant's defaults pursuant to the provisions of Section 26.1; (ii)
sums equal to all losses, costs, liabilities, damages and expenses referred to
in Article 10 of this Lease; and (iii) sums equal to all expenditures made and
obligations incurred by Landlord in collecting or attempting to collect the Rent
or in enforcing or attempting to enforce any rights of Landlord under this Lease
or pursuant to law, including, without limitation, all legal fees and other
amounts so expended. Tenant's obligations under this Section 26.2 shall survive
the expiration or sooner termination of the Lease Term.
ARTICLE 27
ENTRY BY LANDLORD
Landlord reserves the right at all reasonable times and upon reasonable
notice to Tenant (except in the case of an emergency) to enter the Premises to
(i) inspect them; (ii) show the Premises to prospective purchasers, mortgagees
or tenants, or to current or prospective mortgagees, ground or underlying
lessors or insurers; (iii) post notices of nonresponsibility; or
27
(iv) alter, improve or repair the Premises, the premises of other tenants in the
Building, or the Building, or for structural alterations, repairs, additions, or
improvements to the Building or the Building's systems and equipment.
Notwithstanding anything to the contrary contained in this Article 27, Landlord
may enter the Premises at any time to (A) perform services required of Landlord,
including janitorial service; (B) take possession due to any breach of this
Lease, beyond any applicable notice and cure period provided in this Lease, in
the manner provided herein; and (C) perform any covenants of Tenant which Tenant
fails to perform beyond any applicable notice and cure period provided in this
Lease. Landlord may make any such entries without the abatement of Rent and may
take such reasonable steps as required to accomplish the stated purposes. Tenant
hereby waives any claims for damages or for any injuries or inconvenience to or
interference with Tenant's business, lost profits, any loss of occupancy or
quiet enjoyment of the Premises, and any other loss occasioned thereby. For each
of the above purposes, Landlord shall at all times have a key with which to
unlock all the doors in the Premises, excluding Tenant's vaults, safes and
special security areas designated in advance by Tenant. In an emergency,
Landlord shall have the right to use any means that Landlord may deem proper to
open the doors in and to the Premises. Any entry into the Premises by Landlord
in the manner hereinbefore described shall not be deemed to be a forcible or
unlawful entry into, or a detainer of, the Premises, or an actual or
constructive eviction of Tenant from any portion of the Premises. No provision
of this Lease shall be construed as obligating Landlord to perform any repairs,
alterations or decorations except as otherwise expressly agreed to be performed
by Landlord herein.
ARTICLE 28
TENANT PARKING
Tenant shall have the right to rent from Landlord, commencing at any time
on or after the Lease Commencement Date, up to two (2) unreserved parking passes
and up to one (1) reserved parking pass in the Project parking facility, on a
monthly basis throughout the Lease Term. Tenant may change the number of
unreserved and reserved parking passes rented by Tenant upon at least thirty
(30) days prior written notice to Landlord, provided that (i) in no event shall
Tenant be entitled to rent more than two (2) unreserved parking passes or more
than one (1) reserved parking pass, and (ii) if at any time during the Lease
Term Tenant elects to discontinue its lease of one or more of the parking passes
to which Tenant then rents pursuant to this Article 28, then Tenant shall
thereafter only have the right to rent such released parking passes as available
(as determined by Landlord). Tenant shall pay to Landlord for such automobile
parking passes on a monthly basis the prevailing rate charged from time to time
at the location of such parking passes. In addition, Tenant shall be responsible
for the full amount of any taxes imposed by any governmental authority in
connection with the renting of such parking passes by Tenant or the use of the
parking facility by Tenant. Tenant's continued right to use the parking passes
is conditioned upon Tenant abiding by all rules and regulations which are
prescribed from time to time for the orderly operation and use of the parking
facility where the parking passes are located, including any sticker or other
identification system established by Landlord, Tenant's cooperation in seeing
that Tenant's employees and visitors also comply with such rules and regulations
and Tenant not being in default under this Lease beyond any applicable notice
and cure period provided in this Lease. Landlord specifically reserves the right
to change the location, size, configuration, design, layout and all other
aspects of the Project parking facility at any time and Tenant acknowledges and
agrees that Landlord may, without incurring any liability to Tenant and without
any abatement of Rent under this Lease, from time to time, close-off or restrict
access to the Project parking facility for purposes of permitting or
facilitating any such construction, alteration or improvements. Landlord may
delegate its responsibilities hereunder to a parking operator in which case such
parking operator shall have all the rights of control attributed hereby to the
Landlord. The parking passes rented by Tenant pursuant to this Article 28 are
provided to Tenant solely for use by Tenant's own personnel and such passes may
not be transferred, assigned, subleased or otherwise alienated by Tenant without
Landlord's prior approval. Tenant may validate visitor parking by such method or
methods as the Landlord may establish, at the validation rate from time to time
generally applicable to visitor parking.
28
ARTICLE 29
MISCELLANEOUS PROVISIONS
29.1 TERMS; CAPTIONS. The words "Landlord" and "Tenant" as used herein
shall include the plural as well as the singular. The necessary grammatical
changes required to make the provisions hereof apply either to corporations or
partnerships or individuals, men or women, as the case may require, shall in all
cases be assumed as though in each case fully expressed. The captions of
Articles and Sections are for convenience only and shall not be deemed to limit,
construe, affect or alter the meaning of such Articles and Sections.
29.2 BINDING EFFECT. Subject to all other provisions of this Lease, each of
the covenants, conditions and provisions of this Lease shall extend to and
shall, as the case may require, bind or inure to the benefit not only of
Landlord and of Tenant, but also of their respective heirs, personal
representatives, successors or assigns, provided this clause shall not permit
any assignment by Tenant contrary to the provisions of Article 14 of this Lease.
29.3 NO AIR RIGHTS. No rights to any view or to light or air over any
property, whether belonging to Landlord or any other person, are granted to
Tenant by this Lease. If at any time any windows of the Premises are temporarily
darkened or the light or view therefrom is obstructed by reason of any repairs,
improvements, maintenance or cleaning in or about the Project, the same shall be
without liability to Landlord and without any reduction or diminution of
Tenant's obligations under this Lease.
29.4 MODIFICATION OF LEASE. Should any current or prospective mortgagee or
ground lessor for the Building or Project require a modification of this Lease,
which modification will not cause an increased cost or expense to Tenant or in
any other way materially and adversely change the rights and obligations of
Tenant hereunder, then and in such event, Tenant agrees that this Lease may be
so modified and agrees to execute whatever documents are reasonably required
therefor and to deliver the same to Landlord within ten (10) days following a
request therefor. At the request of Landlord or any mortgagee or ground lessor,
Tenant agrees to execute a short form of Lease and deliver the same to Landlord
within ten (10) days following the request therefor.
29.5 TRANSFER OF LANDLORD'S INTEREST. Tenant acknowledges that Landlord has
the right to transfer all or any portion of its interest in the Project or
Building and in this Lease, and Tenant agrees that in the event of any such
transfer, Landlord shall automatically be released from all liability under this
Lease and Tenant agrees to look solely to such transferee for the performance of
Landlord's obligations hereunder after the date of transfer and such transferee
shall be deemed to have fully assumed and be liable for all obligations of this
Lease to be performed by Landlord, including the return of any Security Deposit,
and Tenant shall attorn to such transferee. Tenant further acknowledges that
Landlord may assign its interest in this Lease to a mortgage lender as
additional security and agrees that such an assignment shall not release
Landlord from its obligations hereunder and that Tenant shall continue to look
to Landlord for the performance of its obligations hereunder.
29.6 PROHIBITION AGAINST RECORDING. Except as provided in Section 29.4 of
this Lease, neither this Lease, nor any memorandum, affidavit or other writing
with respect thereto, shall be recorded by Tenant or by anyone acting through,
under or on behalf of Tenant.
29.7 LANDLORD'S TITLE. Landlord's title is and always shall be paramount to
the title of Tenant. Nothing herein contained shall empower Tenant to do any act
which can, shall or may encumber the title of Landlord.
29.8 RELATIONSHIP OF PARTIES. Nothing contained in this Lease shall be
deemed or construed by the parties hereto or by any third party to create the
relationship of principal and agent, partnership, joint venturer or any
association between Landlord and Tenant.
29.9 APPLICATION OF PAYMENTS. Landlord shall have the right to apply
payments received from Tenant pursuant to this Lease, regardless of Tenant's
designation of such payments, to satisfy any obligations of Tenant hereunder, in
such order and amounts as Landlord, in its sole discretion, may elect.
29
29.10 TIME OF ESSENCE. Time is of the essence with respect to the
performance of every provision of this Lease in which time of performance is a
factor.
29.11 PARTIAL INVALIDITY. If any term, provision or condition contained in
this Lease shall, to any extent, be invalid or unenforceable, the remainder of
this Lease, or the application of such term, provision or condition to persons
or circumstances other than those with respect to which it is invalid or
unenforceable, shall not be affected thereby, and each and every other term,
provision and condition of this Lease shall be valid and enforceable to the
fullest extent possible permitted by law.
29.12 NO WARRANTY. In executing and delivering this Lease, Tenant has not
relied on any representations, including, but not limited to, any representation
as to the amount of any item comprising Additional Rent or the amount of the
Additional Rent in the aggregate or that Landlord is furnishing the same
services to other tenants, at all, on the same level or on the same basis, or
any warranty or any statement of Landlord which is not set forth herein or in
one or more of the exhibits attached hereto.
29.13 LANDLORD EXCULPATION. The liability of Landlord or the Landlord
Parties to Tenant for any default by Landlord under this Lease or arising in
connection herewith or with Landlord's operation, management, leasing, repair,
renovation, alteration or any other matter relating to the Project or the
Premises shall be limited solely and exclusively to an amount which is equal to
the interest of Landlord in the Building. Neither Landlord, nor any of the
Landlord Parties shall have any personal liability therefor, and Tenant hereby
expressly waives and releases such personal liability on behalf of itself and
all persons claiming by, through or under Tenant. The limitations of liability
contained in this Section 29.13 shall inure to the benefit of Landlord's and the
Landlord Parties' present and future partners, beneficiaries, officers,
directors, trustees, shareholders, agents and employees, and their respective
partners, heirs, successors and assigns. Under no circumstances shall any
present or future partner of Landlord (if Landlord is a partnership), or trustee
or beneficiary (if Landlord or any partner of Landlord is a trust), have any
liability for the performance of Landlord's obligations under this Lease.
Notwithstanding any contrary provision herein, neither Landlord nor the Landlord
Parties shall be liable under any circumstances for injury or damage to, or
interference with, Tenant's business, including but not limited to, loss of
profits, loss of rents or other revenues, loss of business opportunity, loss of
goodwill or loss of use, in each case, however occurring.
29.14 ENTIRE AGREEMENT. It is understood and acknowledged that there are no
oral agreements between the parties hereto affecting this Lease and this Lease
constitutes the parties' entire agreement with respect to the leasing of the
Premises and supersedes and cancels any and all previous negotiations,
arrangements, brochures, agreements and understandings, if any, between the
parties hereto or displayed by Landlord to Tenant with respect to the subject
matter thereof, and none thereof shall be used to interpret or construe this
Lease. None of the terms, covenants, conditions or provisions of this Lease can
be modified, deleted or added to except in writing signed by the parties hereto.
29.15 RIGHT TO LEASE. Landlord reserves the absolute right to effect such
other tenancies in the Project as Landlord in the exercise of its sole business
judgment shall determine to best promote the interests of the Building or
Project. Tenant does not rely on the fact, nor does Landlord represent, that any
specific tenant or type or number of tenants shall, during the Lease Term,
occupy any space in the Building or Project.
29.16 FORCE MAJEURE. Any prevention, delay or stoppage due to strikes,
lockouts, labor disputes, acts of God, inability to obtain services, labor, or
materials or reasonable substitutes therefor, governmental actions, civil
commotions, fire or other casualty, and other causes beyond the reasonable
control of the party obligated to perform, except with respect to the
obligations imposed with regard to Rent and other charges to be paid by Tenant
pursuant to this Lease and except as to Tenant's obligations under Articles 5
and 24 of this Lease (collectively, a "FORCE MAJEURE"), notwithstanding anything
to the contrary contained in this Lease, shall excuse the performance of such
party for a period equal to any such prevention, delay or stoppage and,
therefore, if this Lease specifies a time period for performance of an
obligation of either party, that time period shall be extended by the period of
any delay in such party's performance caused by a Force Majeure.
30
29.17 WAIVER OF REDEMPTION BY TENANT. Tenant hereby waives, for Tenant and
for all those claiming under Tenant, any and all rights now or hereafter
existing to redeem by order or judgment of any court or by any legal process or
writ, Tenant's right of occupancy of the Premises after any termination of this
Lease.
29.18 NOTICES. All notices, demands, statements, designations, approvals or
other communications (collectively, "NOTICES") given or required to be given by
either party to the other hereunder or by law shall be in writing, shall be (A)
sent by United States certified or registered mail, postage prepaid, return
receipt requested ("MAIL"), (B) transmitted by telecopy, if such telecopy is
promptly followed by a Notice sent by Mail, (C) delivered by a nationally
recognized overnight courier, or (D) delivered personally. Any Notice shall be
sent, transmitted, or delivered, as the case may be, to Tenant or Landlord at
the appropriate address set forth in Section 9 or 10 of the Summary, as
appropriate, or to such other place as either party may from time to time
designate in a Notice to the other. Any Notice will be deemed given (i) the date
received if sent by Mail, (ii) the date the telecopy is transmitted, (iii) the
date the overnight courier delivery is made, or (iv) the date personal delivery
is made or attempted to be made. If Tenant is notified of the identity and
address of Landlord's mortgagee or ground or underlying lessor, Tenant shall
give to such mortgagee or ground or underlying lessor written notice of any
default by Landlord under the terms of this Lease by registered or certified
mail, and such mortgagee or ground or underlying lessor shall be given a
reasonable opportunity to cure such default prior to Tenant's exercising any
remedy available to Tenant.
29.19 JOINT AND SEVERAL. If there is more than one Tenant, the obligations
imposed upon Tenant under this Lease shall be joint and several.
29.20 AUTHORITY. If Tenant is a corporation, trust or partnership, each
individual executing this Lease on behalf of Tenant hereby represents and
warrants that Tenant is a duly formed and existing entity qualified to do
business in California and that Tenant has full right and authority to execute
and deliver this Lease and that each person signing on behalf of Tenant is
authorized to do so.
29.21 ATTORNEYS' FEES. In the event that either Landlord or Tenant should
bring suit for the possession of the Premises, for the recovery of any sum due
under this Lease, or because of the breach of any provision of this Lease or for
any other relief against the other, then all costs and expenses, including
reasonable attorneys' fees, incurred by the prevailing party therein shall be
paid by the other party, which obligation on the part of the other party shall
be deemed to have accrued on the date of the commencement of such action and
shall be enforceable whether or not the action is prosecuted to judgment.
29.22 GOVERNING LAW; WAIVER OF TRIAL BY JURY. This Lease shall be construed
and enforced in accordance with the laws of the State of California. IN ANY
ACTION OR PROCEEDING ARISING HEREFROM, LANDLORD AND TENANT HEREBY CONSENT TO (I)
THE JURISDICTION OF ANY COMPETENT COURT WITHIN THE CITY OF SAN FRANCISCO, STATE
OF CALIFORNIA, (II) SERVICE OF PROCESS BY ANY MEANS AUTHORIZED BY CALIFORNIA
LAW, AND (III) IN THE INTEREST OF SAVING TIME AND EXPENSE, TRIAL WITHOUT A JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES
HERETO AGAINST THE OTHER OR THEIR SUCCESSORS IN RESPECT OF ANY MATTER ARISING
OUT OF OR IN CONNECTION WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND
TENANT, TENANT'S USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM FOR INJURY
OR DAMAGE, OR ANY EMERGENCY OR STATUTORY REMEDY. IN THE EVENT LANDLORD COMMENCES
ANY SUMMARY PROCEEDINGS OR ACTION FOR NONPAYMENT OF BASE RENT OR ADDITIONAL
RENT, TENANT SHALL NOT INTERPOSE ANY COUNTERCLAIM OF ANY NATURE OR DESCRIPTION
(UNLESS SUCH COUNTERCLAIM SHALL BE MANDATORY) IN ANY SUCH PROCEEDING OR ACTION,
BUT SHALL BE RELEGATED TO AN INDEPENDENT ACTION AT LAW.
29.23 SUBMISSION OF LEASE. Submission of this instrument for examination or
signature by Tenant does not constitute a reservation of, option for or option
to lease, and it is not effective as a lease or otherwise until execution and
delivery by both Landlord and Tenant.
31
29.24 BROKERS. Landlord and Tenant hereby warrant to each other that they
have had no dealings with any real estate broker or agent in connection with the
negotiation of this Lease, excepting only the real estate brokers or agents
specified in Section 11 of the Summary (the "BROKERS"), and that they know of no
other real estate broker or agent who is entitled to a commission in connection
with this Lease. Landlord shall be responsible for the payment of any commission
owing to the Broker pursuant to the terms of a separate written agreement with
Broker. Each party agrees to indemnify and defend the other party against and
hold the other party harmless from any and all claims, demands, losses,
liabilities, lawsuits, judgments, costs and expenses (including without
limitation reasonable attorneys' fees) with respect to any leasing commission or
equivalent compensation alleged to be owing on account of any dealings with any
real estate broker or agent, other than the Brokers, occurring by, through, or
under the indemnifying party.
29.25 INDEPENDENT COVENANTS. This Lease shall be construed as though the
covenants herein between Landlord and Tenant are independent and not dependent
and Tenant hereby expressly waives the benefit of any statute to the contrary
and agrees that if Landlord fails to perform its obligations set forth herein,
Tenant shall not be entitled to make any repairs or perform any acts hereunder
at Landlord's expense or to any setoff of the Rent or other amounts owing
hereunder against Landlord.
29.26 PROJECT OR BUILDING NAME AND SIGNAGE. Landlord shall have the right
at any time to change the name of the Project or Building and to install, affix
and maintain any and all signs on the exterior and on the interior of the
Project or Building as Landlord may, in Landlord's sole discretion, desire.
Tenant shall not use the name of the Project or Building or use pictures or
illustrations of the Project or Building in advertising or other publicity or
for any purpose other than as the address of the business to be conducted by
Tenant in the Premises, without the prior written consent of Landlord.
29.27 COUNTERPARTS. This Lease may be executed in counterparts with the
same effect as if both parties hereto had executed the same document. Both
counterparts shall be construed together and shall constitute a single lease.
29.28 CONFIDENTIALITY. Tenant acknowledges that the content of this Lease
and any related documents are confidential information. Tenant shall keep such
confidential information strictly confidential and shall not disclose such
confidential information to any person or entity other than Tenant's financial,
legal, and space planning consultants, or as otherwise required by law.
29.29 TRANSPORTATION MANAGEMENT. Landlord shall have the right to enter
into an agreement with the Department of City Planning to implement a
Transportation Management Program ("TMP") for tenants and their employees, and
to participate in a program designed to coordinate commute alternatives,
marketing, and brokerage for greater downtown employees. During the term of any
such TMP, Landlord agrees to provide transportation brokerage and commute
assistance services to Tenant, and to assist Tenant in meeting the
transportation needs of its employees. In the event Landlord implements a TMP,
Tenant agrees to cooperate with and assist Landlord's TMP Coordinator
("COORDINATOR"), through designation of a responsible employee, to distribute to
Tenant's employees written materials encouraging the use of public transit and
ridesharing, and to distribute and return to the Coordinator transportation
survey questionnaire forms.
29.30 BUILDING RENOVATIONS.
29.30.1 GENERAL. It is specifically understood and agreed that
Landlord has made no representation or warranty to Tenant and has no obligation
and has made no promises to alter, remodel, improve, renovate, repair or
decorate the Premises, Building, or any part thereof and that no representations
respecting the condition of the Project, Premises or the Building, or the areas
in the vicinity of the Project have been made by Landlord to Tenant except as
specifically set forth herein or in the Tenant Work Letter. However, Tenant
hereby acknowledges that Landlord is currently renovating or may during the
Lease Term renovate, improve, alter, or modify (collectively, the "RENOVATIONS")
the Project and/or the Building including without limitation the parking
structure, common areas, systems and equipment, roof, and structural portions of
the same, which Renovations may include, without limitation, (i) installing
sprinklers in the Building common areas and tenant spaces, (ii) modifying the
common areas and tenant
32
spaces to comply with applicable laws and regulations, including regulations
relating to the physically disabled, seismic conditions, and building safety and
security, (iii) installing new floor covering, lighting, and wall coverings in
the Building common areas, and (iv) creating additional parking areas or
occupied space within the Project, and (v) adding additional floors to the
Building and completing related structural changes to the Building in connection
with such additional floors, and in connection with any Renovations, Landlord
may, among other things, erect scaffolding or other necessary structures in the
Building, limit or eliminate access to portions of the Project, including
portions of the common areas, or perform work in the Building which work may
create noise, dust or leave debris in the Building. Similarly, other properties
in the vicinity of the Project may undergo substantial construction or
renovation during the Lease Term (the "Area Renovations"), which may cause
substantial disturbance to traffic and parking, and may cause dust, noise and
vibrations which may affect the Project. Tenant hereby agrees that such
Renovations or Area Renovations and Landlord's actions in connection with such
Renovations or Area Renovations shall in no way constitute a constructive
eviction of Tenant nor entitle Tenant to any abatement of Rent. Landlord shall
have no responsibility or for any reason be liable to Tenant for any direct or
indirect injury to or interference with Tenant's business arising from the
Renovations or Area Renovations, nor shall Tenant be entitled to any
compensation or damages from Landlord for loss of the use of the whole or any
part of the Premises or of Tenant's personal property or improvements resulting
from the Renovations or Area Renovations or Landlord's actions in connection
with such Renovations or Area Renovations, or for any inconvenience or annoyance
occasioned by such Renovations or Area Renovations or Landlord's actions. In
connection with any Renovations performed by Landlord, Landlord shall use
commercially reasonable efforts to minimize interference with Tenant's use of,
and access to, the Premises.
29.30.2 SEISMIC UPGRADES. Tenant hereby acknowledges that Landlord
shall have the right to enter the Premises to renovate the Building and/or the
Premises for voluntary seismic upgrades, the scope and extent of which shall be
determined by Landlord, in Landlord's sole discretion (the "Seismic Upgrades").
Tenant hereby acknowledges and agrees that such Seismic Upgrades and Landlord's
actions in connection with such Seismic Upgrades shall in no way constitute a
constructive eviction of Tenant, and that a portion of the usable square footage
of the Premises may be permanently taken by Landlord relating to such Seismic
Upgrades. Landlord shall not be liable for any inconvenience or annoyance to
Tenant or Tenant's visitors, or for any direct or indirect injury to or
interference with Tenant's business arising from the Seismic Upgrades, provided,
however, Landlord shall allow Tenant a proportionate abatement of Rent to the
extent Landlord is reimbursed from the proceeds of rental interruption insurance
purchased by Landlord as part of Operating Expenses, during the time and to the
extent the Premises are unfit for occupancy for the purposes permitted under
this Lease, and are not occupied by Tenant as a result thereof. Except as
specifically set forth herein, Tenant shall not be entitled to any compensation
or damages from Landlord for loss of the use of the whole or any part of the
Premises or of Tenant's personal property or improvements resulting from the
Seismic Upgrades or Landlord's actions in connection with such Seismic Upgrades,
or for any inconvenience or annoyance occasioned by such Seismic Upgrades or
Landlord's actions.
29.31 NO VIOLATION. Tenant hereby warrants and represents that neither
its execution of nor performance under this Lease shall cause Tenant to be in
violation of any agreement, instrument, contract, law, rule or regulation by
which Tenant is bound, and Tenant shall protect, defend, indemnify and hold
Landlord harmless against any claims, demands, losses, damages, liabilities,
costs and expenses, including, without limitation, reasonable attorneys' fees
and costs, arising from Tenant's breach of this warranty and representation.
29.32 COMMUNICATIONS AND COMPUTER LINES. Tenant may install, maintain,
replace, remove or use any communications or computer wires and cables
(collectively, the "LINES") at the Project in or serving the Premises, provided
that (i) Tenant shall obtain Landlord's prior written consent, which consent
shall not be unreasonably withheld, conditioned or delayed, use an experienced
and qualified contractor reasonably approved in writing by Landlord, and comply
with all of the other provisions of Articles 7 and 8 of this Lease, (ii) an
acceptable number of spare Lines and space for additional Lines shall be
maintained for existing and future occupants of the Project, as determined in
Landlord's reasonable opinion, (iii) the Lines therefor (including riser cables)
shall be appropriately insulated to prevent excessive electromagnetic fields or
radiation, and shall be surrounded by a protective conduit reasonably acceptable
to Landlord, (iv) any new or existing Lines servicing the Premises shall comply
with all applicable governmental laws and regulations, (v) as a condition to
permitting the installation of new Lines,
33
Landlord may require that Tenant remove existing Lines located in or serving the
Premises and repair any damage in connection with such removal, and (vi) Tenant
shall pay all costs in connection therewith. Landlord reserves the right to
require that Tenant remove any Lines located in or serving the Premises which
are installed in violation of these provisions, or which are at any time in
violation of any laws or represent a dangerous or potentially dangerous
condition. Landlord makes no representation or assurances with regard to the
suitability, available or capacity of the Building's telephone and communication
distribution network or risers within or service to the Building for Tenant's
communication needs.
29.33 DEVELOPMENT OF THE PROJECT.
29.33.1 SUBDIVISION. Landlord reserves the right to further subdivide
all or a portion of the Project. Tenant agrees to execute and deliver, within
fifteen (15) days following written request by Landlord and in the form
requested by Landlord, any additional documents needed to conform this Lease to
the circumstances resulting from such subdivision; provided that same shall not
limit or modify Tenant's rights or obligations under this Lease.
29.33.2 THE OTHER IMPROVEMENTS. If portions of the Project or property
adjacent to the Project (collectively, the "OTHER IMPROVEMENTS") are owned by an
entity other than Landlord, Landlord, at its option, may enter into an agreement
with the owner or owners of any or all of the Other Improvements to provide (i)
for reciprocal rights of access and/or use of the Project and the Other
Improvements, (ii) for the common management, operation, maintenance,
improvement and/or repair of all or any portion of the Project and the Other
Improvements, (iii) for the allocation of a portion of the Direct Expenses to
the Other Improvements and the operating expenses and taxes for the Other
Improvements to the Project, and (iv) for the use or improvement of the Other
Improvements and/or the Project in connection with the improvement,
construction, and/or excavation of the Other Improvements and/or the Project.
Nothing contained herein shall be deemed or construed to limit or otherwise
affect Landlord's right to convey all or any portion of the Project or any other
of Landlord's rights described in this Lease.
29.33.3 CONSTRUCTION OF PROJECT AND OTHER IMPROVEMENTS. Tenant
acknowledges that portions of the Project and/or the Other Improvements may be
under construction following Tenant's occupancy of the Premises, and that such
construction may result in levels of noise, dust, obstruction of access, etc.
which are in excess of that present in a fully constructed project. Tenant
hereby waives any and all rent offsets or claims of constructive eviction which
may arise in connection with such construction.
IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be
executed the day and date first above written.
"LANDLORD":
BRE/▇▇▇▇▇▇ II LEASEHOLD L.L.C.,
a Delaware limited liability company
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Its: Vice President
-------------------------------
"TENANT":
SALON MEDIA GROUP, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------
Its: President
-------------------------------
By:
--------------------------------
Its:
-------------------------------
34
EXHIBIT A
▇▇▇▇▇▇ CENTER
OUTLINE OF PREMISES
[FLOORPLAN OF ▇▇▇▇▇▇ I, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇]
EXHIBIT A
1
EXHIBIT B
▇▇▇▇▇▇ CENTER
TENANT WORK LETTER
This Tenant Work Letter shall set forth the terms and conditions relating
to the construction of the Premises. This Tenant Work Letter is essentially
organized chronologically and addresses the issues of the construction of the
Premises, in sequence, as such issues will arise during the actual construction
of the Premises. All references in this Tenant Work Letter to Articles or
Sections of "this Lease" shall mean the relevant portions of Articles 1 through
29 of the Office Lease to which this Tenant Work Letter is attached as Exhibit
B, and all references in this Tenant Work Letter to Sections of "this Tenant
Work Letter" shall mean the relevant portions of Sections 1 through 5 of this
Tenant Work Letter.
SECTION 1
LANDLORD'S INITIAL CONSTRUCTION IN THE PREMISES
Landlord has constructed, at its sole cost and expense, the base, shell,
and core (i) of the Premises and (ii) of the floor of the Building on which the
Premises is located (collectively, the "Base, Shell, and Core"). The Base, Shell
and Core shall consist of those portions of the Premises which were in existence
prior to the construction of the tenant improvements in the Premises for the
prior tenant of the Premises.
SECTION 2
TENANT IMPROVEMENTS
2.1 Tenant Improvement Allowance. Tenant shall be entitled to a one-time
tenant improvement allowance (the "Tenant Improvement Allowance") in the amount
of $7.50 per rentable square foot of the Premises for the costs relating to the
initial design and construction of Tenant's improvements which are permanently
affixed to the Premises (the "Tenant Improvements"). In no event shall Landlord
be obligated to make disbursements pursuant to this Tenant Work Letter in a
total amount which exceeds the Tenant Improvement Allowance. All Tenant
Improvements for which the Tenant Improvement Allowance has been made available
shall be deemed Landlord's property following the expiration or earlier
termination of this Lease.
2.2 Disbursement of the Tenant Improvement Allowance. Except as otherwise
set forth in this Tenant Work Letter, the Tenant Improvement Allowance shall be
disbursed by Landlord (each of which disbursements shall be made pursuant to
Landlord's disbursement process) for costs related to the construction of the
Tenant Improvements and for the following items and costs (collectively, the
"Tenant Improvement Allowance Items"): (i) payment of the fees of the
"Architect" and the "Engineers," as those terms are defined in Section 3.1 of
this Tenant Work Letter, and payment of the fees incurred by, and the cost of
documents and materials supplied by, Landlord and Landlord's consultants in
connection with the preparation and review of the "Construction Drawings," as
that term is defined in Section 3.1 of this Tenant Work Letter; (ii) the cost of
any changes in the Base, Shell and Core when such changes are required by the
Construction Drawings; (iii) the cost of any changes to the Construction
Drawings or Tenant Improvements required by all applicable building codes (the
"Code"); (iv) telephone, electrical, television and data cabling; and (v) the
"Landlord Supervision Fee", as that term is defined in Section 4.3.2 of this
Tenant Work Letter.
2.3 Standard Tenant Improvement Package. Landlord has established
specifications (the "Specifications") for the Building standard components to be
used in the construction of the Tenant Improvements in the Premises
(collectively, the "Standard Improvement Package"), which Specifications shall
be supplied to Tenant by Landlord. The quality of Tenant Improvements shall be
equal to or of greater quality than the quality of the Specifications, provided
that Landlord may, at Landlord's option, require the Tenant Improvements to
comply with certain Specifications. Landlord may make changes to the
Specifications for the Standard Improvement Package from time to time.
EXHIBIT B
1
SECTION 3
CONSTRUCTION DRAWINGS
3.1 Selection of Architect/Construction Drawings. Tenant shall retain the
architect/space planner designated by Landlord (the "Architect") to prepare the
"Construction Drawings," as that term is defined in this Section 3.1. Tenant
shall retain the engineering consultants designated by Landlord (the
"Engineers") to prepare all plans and engineering working drawings relating to
the structural, mechanical, electrical, plumbing, HVAC, lifesafety, and
sprinkler work of the Tenant Improvements. The plans and drawings to be prepared
by Architect and the Engineers hereunder shall be known collectively as the
"Construction Drawings." All Construction Drawings shall comply with the drawing
format and specifications as determined by Landlord, and shall be subject to
Landlord's approval. Architect shall verify, in the field, the dimensions and
conditions as shown on the relevant portions of the base Building plans.
Landlord's review of the Construction Drawings as set forth in this Section 3,
shall be for its sole purpose and shall not imply Landlord's review of the same,
or obligate Landlord to review the same, for quality, design, Code compliance or
other like matters. Accordingly, notwithstanding that any Construction Drawings
are reviewed by Landlord or its space planner, architect, engineers and
consultants, and notwithstanding any advice or assistance which may be rendered
to Tenant by Landlord or Landlord's space planner, architect, engineers, and
consultants, Landlord shall have no liability whatsoever in connection therewith
and shall not be responsible for any omissions or errors contained in the
Construction Drawings, and Tenant's waiver and indemnity set forth in this Lease
shall specifically apply to the Construction Drawings.
3.2 Final Space Plan. On or before the date set forth in Schedule 1,
attached hereto, Tenant and the Architect shall prepare the final space plan for
Tenant Improvements in the Premises (collectively, the "Final Space Plan"),
which Final Space Plan shall include a layout and designation of all offices,
rooms and other partitioning, their intended use, and equipment to be contained
therein, and shall deliver the Final Space Plan to Landlord for Landlord's
approval.
3.3 Final Working Drawings. On or before the date set forth in Schedule 1,
Tenant, the Architect and the Engineers shall complete the architectural and
engineering drawings for the Premises, and the final architectural working
drawings in a form which is complete to allow subcontractors to bid on the work
and to obtain all applicable permits (collectively, the "Final Working
Drawings") and shall submit the same to Landlord for Landlord's approval.
3.4 Permits. The Final Working Drawings shall be approved by Landlord (the
"Approved Working Drawings") prior to the commencement of the construction of
the Tenant Improvements. Tenant shall have the Approved Working Drawings
submitted to the appropriate municipal authorities for all applicable building
permits necessary to allow "Contractor," as that term is defined in Section 4.1,
below, to commence and fully complete the construction of the Tenant
Improvements (the "Permits"), and, in connection therewith, Tenant shall
coordinate with Landlord in order to allow Landlord, at its option, to take part
in all phases of the permitting process and shall supply Landlord, as soon as
possible, with all plan check numbers and dates of submittal and obtain the
Permits on or before the date set forth in Schedule 1. Notwithstanding anything
to the contrary set forth in this Section 3.4, Tenant hereby agrees that neither
Landlord nor Landlord's consultants shall be responsible for obtaining any
building permit or certificate of occupancy for the Premises and that the
obtaining of the same shall be Tenant's responsibility; provided however that
Landlord shall, in any event, cooperate with Tenant in executing permit
applications and performing other ministerial acts reasonably necessary to
enable Tenant to obtain any such permit or certificate of occupancy. No changes,
modifications or alterations in the Approved Working Drawings may be made
without the prior written consent of Landlord, which consent shall not be
unreasonably withheld, conditioned or delayed.
3.5 Time Deadlines. Tenant shall use its best, good faith, efforts and all
due diligence to cooperate with the Architect, the Engineers, and Landlord to
complete all phases of the Construction Drawings and the permitting process and
to receive the permits, and with Contractor for approval of the "Cost Proposal,"
as that term is defined in Section 4.2 of this Tenant Work Letter, as soon as
possible after the execution of the Lease, and, in that regard, shall meet with
Landlord on a scheduled basis to be determined by Landlord, to discuss Tenant's
progress in connection with the same. The applicable dates for approval of
items, plans and drawings as described in this Section 3, Section 4, below, and
in this Tenant Work Letter are set
EXHIBIT B
2
forth and further elaborated upon in Schedule 1 (the "Time Deadlines"), attached
hereto. Tenant agrees to comply with the Time Deadlines; provided that the
parties may elect to revise the Time Deadlines following the execution of this
Lease to the extent necessary; provided further that no such revision shall be
effective unless both parties agree to such revision, in the exercise of their
respective sole and absolute discretion.
SECTION 4
CONSTRUCTION OF THE TENANT IMPROVEMENTS
4.1 Contractor. A contractor designated by Landlord, and subject to
Tenant's reasonable approval ("Contractor") shall construct the Tenant
Improvements.
4.2 Cost Proposal. After the Approved Working Drawings are signed by
Landlord and Tenant, Landlord shall provide Tenant with a cost proposal in
accordance with the Approved Working Drawings, which cost proposal shall
include, as nearly as possible, the cost of all Tenant Improvement Allowance
Items to be incurred by Tenant in connection with the design and construction of
the Tenant Improvements (the "Cost Proposal"). Tenant shall approve (or make
reasonable changes thereto, as applicable) and deliver the Cost Proposal to
Landlord within five (5) business days of the receipt of the same, and upon
receipt of the same by Landlord, Landlord shall be released by Tenant to
purchase the items set forth in the Cost Proposal and to commence the
construction relating to such items. The date by which Tenant must approve and
deliver the Cost Proposal to Landlord shall be known hereafter as the "Cost
Proposal Delivery Date".
4.3 Construction of Tenant Improvements by Contractor under the Supervision
of Landlord.
4.3.1 Over-Allowance Amount. On the Cost Proposal Delivery Date,
Tenant shall deliver to Landlord cash in an amount (the "Over-Allowance Amount")
equal to the difference between (i) the amount of the Cost Proposal and (ii) the
amount of the Tenant Improvement Allowance. The Over-Allowance Amount shall be
disbursed by Landlord prior to the disbursement of any then remaining portion of
the Tenant Improvement Allowance, and such disbursement shall be pursuant to the
same procedure as the Tenant Improvement Allowance. In the event that, after the
Cost Proposal Delivery Date, any revisions, changes, or substitutions shall be
made to the Construction Drawings or the Tenant Improvements, any additional
costs which arise in connection with such revisions, changes or substitutions or
any other additional costs shall be paid by Tenant to Landlord immediately upon
Landlord's request as an addition to the Over-Allowance Amount.
4.3.2 Landlord's Retention of Contractor. Landlord shall independently
retain Contractor, on behalf of Tenant, to construct the Tenant Improvements in
accordance with the Approved Working Drawings and the Cost Proposal and Landlord
shall supervise the construction by Contractor, and Tenant shall pay a
construction supervision and management fee (the "Landlord Supervision Fee") to
Landlord in an amount equal to the product of (i) three percent (3%) and (ii) an
amount equal to the Over-Allowance Amount (as such Over-Allowance Amount may
increase pursuant to the terms of this Tenant Work Letter), if any.
4.3.3. Contractor's Warranties and Guaranties. Landlord hereby assigns
to Tenant all warranties and guaranties by Contractor relating to the Tenant
Improvements, and Tenant hereby waives all claims against Landlord relating to,
or arising out of the construction of, the Tenant Improvements.
4.3.4 Tenant's Covenants. Tenant hereby indemnifies Landlord for any
loss, claims, damages or delays arising from the actions of Architect on the
Premises or in the Building. Within ten (10) days after completion of
construction of the Tenant Improvements, Tenant shall cause Contractor and
Architect to cause a Notice of Completion to be recorded in the office of the
County Recorder of the county in which the Building is located in accordance
with Section 3093 of the Civil Code of the State of California or any successor
statute and furnish a copy thereof to Landlord upon recordation, failing which,
Landlord may itself execute and file the same on behalf of Tenant as Tenant's
agent for such purpose. In addition, immediately after the substantial
completion of the Premises, Tenant shall have prepared and
EXHIBIT B
3
delivered to the Building a copy of the "as built" plans and specifications
(including all working drawings) for the Tenant Improvements.
SECTION 5
MISCELLANEOUS
5.1 Tenant's Entry Into the Premises Prior to Substantial Completion.
Provided that Tenant and its agents do not interfere with Contractor's work in
the Building and the Premises, Contractor shall allow Tenant access to the
Premises not less than two (2) weeks prior to the substantial completion of the
Premises for the purpose of Tenant installing overstandard equipment or fixtures
(including Tenant's furniture, data and telephone equipment) in the Premises.
Prior to Tenant's entry into the Premises as permitted by the terms of this
Section 5.1, Tenant shall submit a schedule to Landlord and Contractor, for
their approval, which schedule shall detail the timing and purpose of Tenant's
entry. Tenant shall hold Landlord harmless from and indemnify, protect and
defend Landlord against any loss or damage to the Building or Premises and
against injury to any persons caused by Tenant's actions pursuant to this
Section 5.1.
5.2 Freight Elevators. Landlord shall, consistent with its obligations to
other tenants of the Building, make the freight elevator reasonably available to
Tenant in connection with initial decorating, furnishing and moving into the
Premises.
5.3 Tenant's Representative. Tenant has designated ▇▇▇▇▇▇ ▇▇▇▇▇ as its sole
representative with respect to the matters set forth in this Tenant Work Letter,
who, until further notice to Landlord, shall have full authority and
responsibility to act on behalf of the Tenant as required in this Tenant Work
Letter.
5.4 Landlord's Representative. Landlord has designated General Manager as
its sole representative with respect to the matters set forth in this Tenant
Work Letter, who, until further notice to Tenant, shall have full authority and
responsibility to act on behalf of the Landlord as required in this Tenant Work
Letter.
5.5 Tenant's Agents. All subcontractors, laborers, materialmen, and
suppliers retained directly by Tenant shall all be union labor in compliance
with the then existing master labor agreements; provided that Tenant's movers
may be non-union.
5.6 Time of the Essence in This Tenant Work Letter. Unless otherwise
indicated, all references herein to a "number of days" shall mean and refer to
calendar days. In all instances where Tenant is required to approve or deliver
an item, if no written notice of approval is given or the item is not delivered
within the stated time period, at Landlord's sole option, at the end of such
period the item shall automatically be deemed approved or delivered by Tenant
and the next succeeding time period shall commence.
5.7 Tenant's Lease Default. Notwithstanding any provision to the contrary
contained in this Lease, if an event of default as described in the Lease,
beyond any applicable notice and cure period provided in this Lease or a default
by Tenant under this Tenant Work Letter, has occurred at any time on or before
the substantial completion of the Premises, then (i) in addition to all other
rights and remedies granted to Landlord pursuant to the Lease, Landlord shall
have the right to withhold payment of all or any portion of the Tenant
Improvement Allowance and/or Landlord may cause Contractor to cease the
construction of the Premises, and (ii) all other obligations of Landlord under
the terms of this Tenant Work Letter shall be forgiven until such time as such
default is cured pursuant to the terms of the Lease.
EXHIBIT B
4
SCHEDULE 1 TO EXHIBIT B
TIME DEADLINES
Dates Actions to be Performed
----- -----------------------
A. January 14, 2005 Final Space Plan to be completed by
Tenant and delivered to Landlord.
B. January 28, 2005 Tenant to deliver Final Working Drawings
to Landlord.
C. February 18, 2005 Tenant or Tenant's agents to deliver
Permits to Contractor.
D. Five (5) business days after Tenant to approve Cost Proposal and
the receipt of the Cost deliver Cost Proposal to Landlord.
Proposal by Tenant
SCHEDULE 1 TO
EXHIBIT B
1
EXHIBIT C
▇▇▇▇▇▇ CENTER
NOTICE OF LEASE TERM DATES
To: _______________________
_______________________
_______________________
_______________________
Re: Office Lease dated ____________, 20__ between
____________________, a _____________________ ("Landlord"),
and _______________________, a _______________________
("Tenant") concerning Suite ______ on floor(s) __________ of
the office building located at ____________________________,
San Francisco, California.
Gentlemen:
In accordance with the Office Lease (the "Lease"), we wish to advise you
and/or confirm as follows:
1. The Lease Term shall commence on or has commenced on ______________ for
a term of __________________ ending on __________________.
2. Rent commenced to accrue on __________________, in the amount of
________________.
3. If the Lease Commencement Date is other than the first day of the month,
the first billing will contain a pro rata adjustment. Each billing thereafter,
with the exception of the final billing, shall be for the full amount of the
monthly installment as provided for in the Lease.
4. Your rent checks should be made payable to __________________ at
___________________.
5. The exact number of rentable/usable square feet within the Premises is
____________ square feet.
6. Tenant's Share as adjusted based upon the exact number of usable square
feet within the Premises is ________%.
This Commencement Letter shall be deemed accepted by Tenant if not executed
and returned to Landlord by Tenant within thirty (30) days following the date
that Landlord delivers this Commencement Letter to Tenant for execution.
"Landlord":
_____________________________________,
a ___________________________________
By: _________________________________
Its: ________________________________
EXHIBIT C
1
Agreed to and Accepted
as of ____________, 20___.
"Tenant":
_________________________
a _______________________
By: _____________________
Its: __________________
EXHIBIT C
2
EXHIBIT D
RINCON CENTER
RULES AND REGULATIONS
Tenant shall faithfully observe and comply with the following Rules and
Regulations. Landlord shall not be responsible to Tenant for the nonperformance
of any of said Rules and Regulations by or otherwise with respect to the acts or
omissions of any other tenants or occupants of the Project. In the event of any
conflict between the Rules and Regulations and the other provisions of this
Lease, the latter shall control.
1. Tenant shall not alter any lock or install any new or additional locks
or bolts on any doors or windows of the Premises without obtaining Landlord's
prior written consent. Tenant shall bear the cost of any lock changes or repairs
required by Tenant. Two keys will be furnished by Landlord for the Premises, and
any additional keys required by Tenant must be obtained from Landlord at a
reasonable cost to be established by Landlord. Upon the termination of this
Lease, Tenant shall 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 keys so furnished, Tenant shall pay to Landlord the cost of
replacing same or of changing the lock or locks opened by such lost key if
Landlord shall deem it necessary to make such changes.
2. Landlord reserves the right to close and keep locked all entrance and
exit doors of the Building during such hours as are customary for comparable
buildings in the vicinity of the Building. Tenant, its employees and agents must
be sure that the doors to the Building are securely closed and locked when
leaving the Premises if it is after the normal hours of business for the
Building. Any tenant, its employees, agents or any other persons entering or
leaving the Building at any time when it is so locked, or any time when it is
considered to be after normal business hours for the Building, may be required
to sign the Building register. Access to the Building may be refused unless the
person seeking access has proper identification or has a previously arranged
pass for access to the Building. Landlord will furnish passes to persons for
whom Tenant requests same in writing. Tenant shall be responsible for all
persons for whom Tenant requests passes and shall be liable to Landlord for all
acts of such persons. The Landlord and his agents shall in no case be liable for
damages for any error with regard to the admission to or exclusion from the
Building of any person. In case of invasion, mob, riot, public excitement, or
other commotion, Landlord reserves the right to prevent access to the Building
or the Project during the continuance thereof by any means it deems appropriate
for the safety and protection of life and property.
3. No furniture, freight or equipment of any kind shall be brought into or
removed from the Building without prior notice to Landlord. All moving activity
into or out of the Building shall be scheduled with Landlord and done only at
such time and in such manner as Landlord designates. Landlord shall have the
right to prescribe the weight, size and position of all safes and other heavy
property brought into the Building and also the times and manner of moving the
same in and out of the Building. Safes and other heavy objects shall, if
considered necessary by Landlord, stand on supports of such thickness as is
necessary to properly distribute the weight. Landlord will not be responsible
for loss of or damage to any such safe or property in any case. Any damage to
any part of the Building, its contents, occupants or visitors by moving or
maintaining any such safe or other property shall be the sole responsibility and
expense of Tenant.
4. No sign, advertisement, notice or handbill shall be exhibited,
distributed, painted or affixed by Tenant on any part of the Premises or the
Building without the prior written consent of the Landlord. Tenant shall not
disturb, solicit, peddle, or canvass any occupant of the Project and shall
cooperate with Landlord and its agents of Landlord to prevent same.
5. The toilet rooms, urinals, wash bowls and other apparatus shall not be
used for any purpose other than that for which they were constructed, and no
foreign substance of any kind whatsoever shall be thrown therein. The expense of
any breakage, stoppage or damage resulting from the violation of this rule shall
be borne by the tenant who, or whose servants, employees, agents, visitors or
licensees shall have caused same.
EXHIBIT D
1
6. Tenant shall not overload the floor of the Premises, nor ▇▇▇▇, drive
nails or screws, or drill into the partitions, woodwork or drywall or in any way
deface the Premises or any part thereof without Landlord's prior written
consent. Tenant shall not purchase spring water, ice, towel, linen, maintenance
or other like services from any person or persons not approved by Landlord.
7. Except for vending machines intended for the sole use of Tenant's
employees and invitees, no vending machine or machines other than fractional
horsepower office machines shall be installed, maintained or operated upon the
Premises without the written consent of Landlord.
8. Tenant shall not use or keep in or on the Premises, the Building, or the
Project any kerosene, gasoline, explosive material, corrosive material, material
capable of emitting toxic fumes, or other inflammable or combustible fluid
chemical, substitute or material. Tenant shall provide material safety data
sheets for any Hazardous Material used or kept on the Premises.
9. Tenant shall not use, keep or permit to be used or kept, any foul or
noxious gas or substance in or on the Premises, or permit or allow the Premises
to be occupied or used in a manner offensive or objectionable to Landlord or
other occupants of the Project by reason of noise, odors, or vibrations, or
interfere with other tenants or those having business therein, whether by the
use of any musical instrument, radio, phonograph, or in any other way. Tenant
shall not throw anything out of doors, windows or skylights or down passageways.
10. Tenant shall not bring into or keep within the Project, the Building or
the Premises any animals, birds, aquariums, or, except in areas designated by
Landlord, bicycles or other vehicles.
11. No cooking shall be done or permitted on the Premises, nor shall the
Premises be used for the storage of merchandise, for lodging or for any
improper, objectionable or immoral purposes. Notwithstanding the foregoing,
Underwriters' laboratory-approved equipment and microwave ovens may be used in
the Premises for heating food and brewing coffee, tea, hot chocolate and similar
beverages for employees and visitors, provided that such use is in accordance
with all applicable federal, state, county and city laws, codes, ordinances,
rules and regulations.
12. The Premises shall not be used for manufacturing or for the storage of
merchandise except as such storage may be incidental to the use of the Premises
provided for in the Summary. Tenant shall not occupy or permit any portion of
the Premises to be occupied as an office for a messenger-type operation or
dispatch office, public stenographer or typist, or for the manufacture or sale
of liquor, narcotics, or tobacco in any form, or as a medical office, or as a
▇▇▇▇▇▇ or manicure shop, or as an employment bureau without the express prior
written consent of Landlord. Tenant shall not engage or pay any employees on the
Premises except those actually working for such tenant on the Premises nor
advertise for laborers giving an address at the Premises.
13. Landlord reserves the right to exclude or expel from the Project any
person who, in the judgment of Landlord, is intoxicated or under the influence
of liquor or drugs, or who shall in any manner do any act in violation of any of
these Rules and Regulations.
14. Tenant, its employees and agents shall not loiter in or on the
entrances, corridors, sidewalks, lobbies, courts, halls, stairways, elevators,
vestibules or any Common Areas for the purpose of smoking tobacco products or
for any other purpose, nor in any way obstruct such areas, and shall use them
only as a means of ingress and egress for the Premises.
15. Tenant shall not waste electricity, water or air conditioning and
agrees to cooperate fully with Landlord to ensure the most effective operation
of the Building's heating and air conditioning system, and shall refrain from
attempting to adjust any controls. Tenant shall participate in recycling
programs undertaken by Landlord
16. Tenant shall store all its trash and garbage within the interior of the
Premises. No material shall be placed in the trash boxes or receptacles if such
material is of such nature that it may not be disposed of in the ordinary and
customary manner of removing and disposing of trash and garbage in San
Francisco, California without violation of any law or ordinance governing such
disposal. All trash, garbage and refuse disposal shall be made only through
entry-ways and
EXHIBIT D
2
elevators provided for such purposes at such times as Landlord shall designate.
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 Premises 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.
17. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.
18. No awnings or other projection shall be attached to the outside walls
of the Building without the prior written consent of Landlord, and no curtains,
blinds, shades or screens shall be attached to or hung in, or used in connection
with, any window or door of the Premises other than Landlord standard drapes.
All electrical ceiling fixtures hung in the Premises or spaces along the
perimeter of the Building must be fluorescent and/or of a quality, type, design
and a warm white bulb color approved in advance in writing by Landlord. Neither
the interior nor exterior of any windows shall be coated or otherwise
sunscreened without the prior written consent of Landlord. Tenant shall be
responsible for any damage to the window film on the exterior windows of the
Premises and shall promptly repair any such damage at Tenant's sole cost and
expense. Tenant shall keep its window coverings closed during any period of the
day when the sun is shining directly on the windows of the Premises. Prior to
leaving the Premises for the day, Tenant shall draw or lower window coverings
and extinguish all lights. Tenant shall abide by Landlord's regulations
concerning the opening and closing of window coverings which are attached to the
windows in the Premises, if any, which have a view of any interior portion of
the Building or Building Common Areas.
19. Tenant hereby acknowledges that Landlord shall have no obligation to
provide guard service or other security measures for the benefit of the
Premises, the Building or the Project. Tenant hereby assumes all responsibility
for the protection of Tenant and its agents, employees, contractors, invitees
and guests, and the property thereof, from acts of third parties, including
keeping doors locked and other means of entry to the Premises closed, whether or
not Landlord, at its option, elects to provide security protection for the
Project or any portion thereof. Tenant further assumes the risk that any safety
and security devices, services and programs which Landlord elects, in its sole
discretion, to provide may not be effective, or may malfunction or be
circumvented by an unauthorized third party, and Tenant shall, in addition to
its other insurance obligations under this Lease, obtain its own insurance
coverage to the extent Tenant desires protection against losses related to such
occurrences. Tenant shall cooperate in any reasonable safety or security program
developed by Landlord or required by law.
20. No auction, liquidation, fire sale, going-out-of-business or bankruptcy
sale shall be conducted in the Premises without the prior written consent of
Landlord.
21. No tenant shall use or permit the use of any portion of the Premises
for living quarters, sleeping apartments or lodging rooms.
Landlord reserves the right at any time to change or rescind any one or
more of these Rules and Regulations, or to make such other and further
reasonable Rules and Regulations as in Landlord's judgment may from time to time
be necessary for the management, safety, care and cleanliness of the Premises,
Building, the Common Areas and the Project, and for the preservation of good
order therein, as well as for the convenience of other occupants and tenants
therein. Landlord may waive any one or more of these Rules and Regulations for
the benefit of any particular tenants, but no such waiver by Landlord shall be
construed as a waiver of such Rules and Regulations in favor of any other
tenant, nor prevent Landlord from thereafter enforcing any such Rules or
Regulations against any or all tenants of the Project. Tenant shall be deemed to
have read these Rules and Regulations and to have agreed to abide by them as a
condition of its occupancy of the Premises.
EXHIBIT D
3
EXHIBIT E
▇▇▇▇▇▇ CENTER
FORM OF TENANT'S ESTOPPEL CERTIFICATE
The undersigned as Tenant under that certain Office Lease (the "Lease")
made and entered into as of ___________, 20__ by and between _______________ as
Landlord, and the undersigned as Tenant, for Premises on the ______________
floor(s) of the office building located at ______________, San Francisco,
California ____________, certifies as follows:
1. Attached hereto as Exhibit A is a true and correct copy of the Lease and
all amendments and modifications thereto. The documents contained in Exhibit A
represent the entire agreement between the parties as to the Premises and the
project of which the Premises are a part.
2. The undersigned currently occupies the Premises described in the Lease,
the Lease Term commenced on __________, and the Lease Term expires on
___________, and the undersigned has no option to terminate or cancel the Lease
or to purchase all or any part of the Premises, the Building and/or the Project.
3. Base Rent became payable on ____________.
4. The Lease is in full force and effect and has not been modified,
supplemented or amended in any way except as provided in Exhibit A.
5. Tenant has not transferred, assigned, or sublet any portion of the
Premises nor entered into any license or concession agreements with respect
thereto except as follows:
6. Tenant shall not modify the documents contained in Exhibit A without the
prior written consent of Landlord's mortgagee.
7. All monthly installments of Base Rent, all Additional Rent and all
monthly installments of estimated Additional Rent have been paid when due
through ___________. The current monthly installment of Base Rent is
$_____________________.
8. All conditions of the Lease to be performed by Landlord necessary to the
enforceability of the Lease have been satisfied and Landlord is not in default
thereunder. In addition, the undersigned has not delivered any notice to
Landlord regarding a default by Landlord thereunder.
9. No rental has been paid more than thirty (30) days in advance and no
security has been deposited with Landlord except as provided in the Lease.
10. As of the date hereof, there are no existing defenses or offsets, to
the undersigned's knowledge, claims or any basis for a claim, that the
undersigned has against Landlord.
11. If Tenant is a corporation or partnership, each individual executing
this Estoppel Certificate on behalf of Tenant hereby represents and warrants
that Tenant is a duly formed and existing entity qualified to do business in
California and that Tenant has full right and authority to execute and deliver
this Estoppel Certificate and that each person signing on behalf of Tenant is
authorized to do so.
12. There are no actions pending against the undersigned or any guarantor
of the Lease under the bankruptcy or similar laws of the United States or any
state.
EXHIBIT E
1
13. Other than in compliance with all applicable laws and incidental to the
ordinary course of the use of the Premises, the undersigned has not used or
stored any hazardous substances in the Premises.
14. To the undersigned's knowledge, all tenant improvement work to be
performed by Landlord under the Lease has been completed in accordance with the
Lease and has been accepted by the undersigned and all reimbursements and
allowances due to the undersigned under the Lease in connection with any tenant
improvement work have been paid in full.
The undersigned acknowledges that this Estoppel Certificate may be
delivered to Landlord or to a prospective mortgagee or prospective purchaser,
and acknowledges that said prospective mortgagee or prospective purchaser will
be relying upon the statements contained herein in making the loan or acquiring
the property of which the Premises are a part and that receipt by it of this
certificate is a condition of making such loan or acquiring such property.
Executed at ______________ on the ____ day of ___________, 20__.
"Tenant":
_____________________________,
a ___________________________
By: _________________________
Its: ______________________
By: _________________________
Its: ______________________
EXHIBIT E
2