EXHIBIT 10.50
MARINA BAY BUSINESS PARK
OFFICE LEASE
By and Between
MARINA WESTSHORE PARTNERS, LLC
a California limited liability company
and
QRS CORPORATION
a Delaware corporation
Dated as of May 15, 1998
TABLE OF CONTENTS
PAGE
Section 1. DEFINITIONS..................................................... 1
1.1 Buildings....................................................... 1
1.2 Common Area..................................................... 1
1.3 Environmental Law............................................... 1
1.4 Expiration Date................................................. 1
1.5 Hazardous Material.............................................. 1
1.6 Interest Rate................................................... 2
1.7 Lease Year...................................................... 2
1.8 Operating Expenses.............................................. 2
1.9 Permitted Use................................................... 3
1.10 Premises........................................................ 3
1.11 Property........................................................ 3
1.12 Real Property Taxes............................................. 3
1.13 Rentable Area................................................... 4
1.14 Tenant Improvements............................................. 4
1.15 Tenant's Share.................................................. 4
1.16 Term............................................................ 4
Section 2. LEASE OF PREMISES............................................... 4
2.1 Premises........................................................ 4
2.2 Landlord's Reserved Rights...................................... 4
2.3 No Representations or Warrants.................................. 4
Section 3. TERM............................................................ 5
3.1 Initial Term.................................................... 5
Section 4. RENT: ADDITIONAL CHARGES........................................ 5
4.1 Fixed Monthly Rent and Additional Charges....................... 5
4.2 Net Lease....................................................... 5
Section 5. PAYMENT OF OPERATING EXPENSES................................... 5
5.1 Payment By Tenant............................................... 5
5.2 Manner of Payment............................................... 5
5.3 Adjustments to Operating Expenses............................... 6
5.4 Tenant's Inspection and Audit Rights............................ 6
Section 6. TAXES PAYABLE BY TENANT......................................... 6
Section 7. CONDITION AND OPERATION OF THE BUILDING......................... 7
7.1 As Is........................................................... 7
7.2 Security........................................................ 7
Section 8. USE AND COMPLIANCE WITH LAWS.................................... 7
8.1 Use of Premises................................................. 7
8.2 No Nuisance..................................................... 7
8.3 Compliance with Laws and Insurance Requirement.................. 7
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TABLE OF CONTENTS
(Continued)
PAGE
8.4 Hazardous Materials............................................. 7
(a) Prohibition on Use of Hazardous Materials................... 7
(b) Permitted Hazardous Materials............................... 8
(c) Compliance with Environmental Laws.......................... 8
(d) Routine Monitoring.......................................... 8
(e) Notice to Landlord.......................................... 9
(f) Landlord's Right to Participate............................ 9
(g) Tenant's Indemnity.......................................... 9
(h) Remedial Work............................................... 10
Section 9. ALTERATIONS, TENANT'S PROPERTY, TENANTS WORK AND LIENS.......... 10
9.1 Alterations by Tenant........................................... 10
9.2 Title to Alterations............................................ 10
9.3 Liens........................................................... 10
Section 10. REPAIRS AND MAINTENANCE......................................... 11
10.1 Landlord's Obligations.......................................... 11
10.2 Tenant's Obligations............................................ 11
Section 11. UTILITIES....................................................... 11
11.1 Utilities....................................................... 11
11.2 Interruption.................................................... 11
Section 12. DAMAGE OR DESTRUCTION............................................ 12
12.1 Loss Covered by Insurance....................................... 12
(a) Repairs Which Can Be Completed Within Four (4) Months....... 12
(b) Repairs Which Cannot Be Completed Within Four (4) Months.... 12
12.2 Loss Not Covered by Insurance................................... 13
12.3 Destruction During Final Year................................... 13
12.4 Destruction of Tenant's Personal Property, Tenant Improvements
or Property of Tenant's Employees............................... 13
Section 15. INSURANCE AND INDEMNITY......................................... 13
13.1 Insurance on Tenant's Property.................................. 13
13.2 Tenant's Liability Insurance.................................... 14
13.3 Fire and Extended Coverage Insurance............................ 14
13.4 Waiver of Subrogation........................................... 14
13.5 Tenant's Indemnity.............................................. 14
13.6 Landlord's Indemnity............................................ 15
Section 14. EMINENT DOMAIN.................................................. 15
14.1 Effect of Taking................................................ 15
14.2 Award........................................................... 15
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TABLE OF CONTENTS
(Continued)
PAGE
14.3 Abatement of Rent............................................... 15
Section 15. SUBLEASE AND ASSIGNMENT......................................... 16
15.1 Consent Required................................................ 16
15.2 Notice.......................................................... 16
15.3 Conditions of Approval.......................................... 16
15.4 Cost of Processing Requests..................................... 16
15.5 Scope of Assignment............................................. 16
15.6 Assumption of Obligations....................................... 17
15.7 Excess Rent; Recapture Rights................................... 17
Section 16. DEFAULT REMEDIES................................................ 17
16.1 Events of Default............................................... 17
(a) Vacation or Abandonment..................................... 17
(b) Nonpayment of Money......................................... 17
(c) Other Obligations........................................... 18
(d) Insolvency.................................................. 18
16.2 Notice to Tenant................................................ 18
(a) Nonpayment of Money......................................... 18
(b) Other Obligations........................................... 18
16.3 Remedy Upon Occurrence of Uncured Event of Default............... 18
16.4 Damages Upon Termination........................................ 19
16.5 Computation of Rent and Other Amounts for Purposes
of Default...................................................... 19
16.6 Landlord's Right to Perform on Tenant's Breach.................. 19
16.7 Landlord's Defaults............................................. 20
(a) Notice and Cures; Landlord's Liability...................... 20
(b) Recovery Against Landlord................................... 20
16.8 Waiver; Remedies Cumulative..................................... 20
Section 17. SUBORDINATION, ATTORNMENT AND ESTOPPELS......................... 21
17.1 Subordination................................................... 21
17.2 Attornment by Tenant; Non Disturbance........................... 21
17.3 Certificates.................................................... 21
Section 18. FEES AND EXPENSES; PAYMENT...................................... 22
18.1 Interest On Past Due Obligations................................ 22
18.2 Late Charges.................................................... 22
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TABLE OF CONTENTS
(Continued)
PAGE
Section 19. ACCESS TO PREMISES.............................................. 22
19.1 Landlord Access................................................. 22
19.2 NTI Access...................................................... 22
Section 20. NOTICES......................................................... 23
Section 21. RULES AND REGULATIONS........................................... 23
Section 22. SECURITY DEPOSIT................................................ 24
Section 23. SURRENDER OF PREMISES ON TERMINATION............................ 24
Section 24. MISCELLANEOUS................................................... 24
24.1 Successors and Assigns.......................................... 24
24.2 Construction.................................................... 25
24.3 Integration..................................................... 25
24.4 Light, Air, View, Signs, Etc.................................... 25
24.5 Holding Over.................................................... 25
24.6 Counterparts.................................................... 26
24.7 Broker's Commissions............................................ 26
24.8 Landlord's Consents............................................. 26
24.9 Amendments...................................................... 26
24.10 Confidentiality................................................. 26
24.11 Attorneys' Fees................................................. 26
24.12 No Discrimination............................................... 27
Section 25. PARKING AND SIGNAGE............................................. 27
25.1 Parking......................................................... 27
25.2 Signage......................................................... 27
Section 26. EXPANSION OPTION................................................ 27
Section 27. OPTION TO EXTEND................................................ 28
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BASIC LEASE INFORMATION
MARINA BAY BUSINESS PARK
OFFICE LEASE
Lease Date: Dated as of May 15, 1998
Landlord: Marina Westshore Partners, LLC, a
California limited liability company
Address of Landlord: c/o Penterra Company
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tenant: QRS Corporation, a Delaware corporation
Address of Tenant: (prior to QRS Corporation
Commencement Date; thereafter ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
at the Premises: ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Premises: Portion of Building C of Marina Bay Business
Park Phase I, Richmond, California, more
specifically set forth on the floor plan
attached as EXHIBIT A.
Rentable Area of the
Premises: 5,588 Square Feet
Term: The period from the Commencement Date to the
Expiration Date.
Commencement Date: May 15, 1998.
Expiration Date: December 31, 2000.
Tenant's Share: 4.34%
Fixed Rent (Monthly): PERIOD OF TERM AMOUNT
-------------- ------------
Commencement Date through $8,550.00/mo.
Expiration Date
Option to Extend: One (1) five (5) year option, more
specifically set forth in Section 27 of this
Lease.
Security Deposit: $8,550.00
Brokers: N/A
Exhibits: Exhibit A Floor Plan
Exhibit B Legal Description
Exhibit C Work Letter
NOTE: This Basic Lease Information is provided solely as a convenience to
summarize certain Lease provisions and is not intended as a complete summary
of all material terms and conditions of the Lease. In the event of any
inconsistency between any information shown on this Basic Lease Information
and the provisions of the Lease, the provisions of the Lease govern.
MARINA BAY BUSINESS PARK OFFICE LEASE
This Lease is made and entered in to as of the date specified in the
Basic Lease Information, by and between MARINA WESTSHORE PARTNERS, LLC, a
California limited liability company ("LANDLORD"), and the Tenant identified
in the Basic Lease Information.
IN CONSIDERATION OF THE MUTUAL COVENANTS AND AGREEMENTS CONTAINED IN
THIS LEASE, THE PARTIES AGREE AS FOLLOWS:
SECTION 1. DEFINITIONS
Certain terms used in this Lease and the Exhibits attached to this Lease
shall have the meaning set forth below for each such term. Certain other
terms shall have the meaning set forth elsewhere in this Lease and the
Exhibits attached to this Lease.
1.1 BUILDINGS. The three (3) office buildings and related improvements
located on the real property described in EXHIBIT B attached to this Lease.
Any enlargements to the Buildings or additional improvements on the real
property described in EXHIBIT B attached to this Lease shall be included in
the definition of Buildings for purposes of this Lease.
1.2 COMMON AREA. All of the Property, excluding the Buildings.
1.3 ENVIRONMENTAL LAW. Any federal, state or local law, ordinance or
regulation or policy applicable to the Premises during the Term, relating to
the environment, health and safety, any Hazardous Materials (including,
without limitation, the use, handling, transportation, production, disposal,
discharge or storage thereof) or to Tenant's use of the Premises, or to
industrial hygiene or the environmental conditions on, under or about the
Property, including, without limitation, soil, groundwater and indoor and
ambient air conditions.
1.4 EXPIRATION DATE. The Lease shall expire on December 31, 2000
("Expiration Date"). The Expiration Date is subject to extension pursuant to
the provisions of Section 27 of this Lease.
1.5 HAZARDOUS MATERIAL. Any hazardous or toxic substance, material or
waste the storage, use, or disposition of which is or becomes regulated by
any local governmental authority with jurisdiction, the State of California
or the United States Government during the Term. The term "Hazardous
Material" includes, without limitation, any material or substance which is
(i) defined during the Term as hazardous or extremely hazardous pursuant to
Article 11 of Title 22 of the California Administrative Code, Division 4,
Chapter 20, (ii) defined as a "hazardous waste" pursuant to Section 1004 of
the Federal Resource Conservation and Recovery Act, 42 U.S.C. 6901 ET SEQ.
(42 U.S.C. 6903), (iii) defined as a "hazardous substance" pursuant to
Section 101 of the Comprehensive Environmental Response, Compensation and
Liability Act
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42 U.S.C. 9601 ET SEQ. (42 U.S.C. 9601) or (iv) is listed or defined as a
"hazardous waste", "hazardous substance", or other similar designation by any
regulatory scheme of the State of California or the U.S. Government that is
similar to the foregoing.
1.6 INTEREST RATE. The per annum rate equal to the lesser of (i) the
reference rate, or succeeding similar index, of Bank of America, N.T. & S.A.
in effect from time to time plus two percent (2%), or (ii) the maximum rate
allowed by applicable usury law.
1.7 LEASE YEAR. A period of twelve (12) consecutive calendar months
during the Term, commencing with the Commencement Date if the Commencement
Date is the first day of a calendar month, or commencing with the first day
of the month following the Commencement Date if the Commencement Date is not
the first day of a calendar month. The first Lease Year shall include the
period between the Commencement Date and the first day of the month following
the Commencement Date if the Commencement Date is not the first day of a
calendar month. The last Lease Year shall consist of the period between the
date on which the Term expires or terminates and the day after the last day
of the preceding Lease Year.
1.8 OPERATING EXPENSES. All expenses and costs of every kind and nature
actually incurred and paid by Landlord in, or properly allocable to, a
calendar year, in connection with the ownership, management, operation,
maintenance, repair and preservation of the Property. Specifically, but
without limiting the generality of the foregoing, Operating Expenses shall
include the following: (a) wages, salaries, payroll burdens and all related
expenses and benefits of all on-site and off-site employees to the extent
attributable to the operation, repair and maintenance of the Property; (b)
all supplies, materials, tools and rental equipment to the extent used in
connection with the ownership, operation, management, repair and maintenance
of the Property; (c) property management fees and other costs of property
management, maintenance and other services for the Property and the equipment
therein which management fees shall not exceed four percent (4%) of gross
rental revenues from the Property; (d) reasonable legal and accounting costs
for the Property; provided, however, that legal expenses shall not include
the cost of negotiating leases, termination of leases, extension of leases,
legal costs incurred in proceedings against any specific tenant or in
connection with any breach by Landlord of this Lease or refinancing of the
Property; (e) premiums and all additional costs for all insurance carried
with respect to the Property (whether or not such insurance is required to
be carried pursuant to the terms of this Lease, but limited to the type and
amount of insurance customarily carried by owners of property comparable to
the Property); (f) costs of all repairs, service, service contracts and
general maintenance of the Property; (g) all maintenance and operating costs
for the Common Area and the cost of performing Landlord's maintenance and
repair obligations as provided in Section 10; (h) all Real Property Taxes;
(i) subject to the exclusion of capital items set forth below, all costs and
expenses levied, incurred or required to be paid either directly or
indirectly, in order to comply with laws, statutes, ordinances, rules and
regulations or the requirements of governmental or public authorities with
respect to the Property, or the operation of the Buildings, or any portion
thereof such as parking facilities, sources of air pollution, traffic, storm
water run-off or other adverse environmental effects, and transit taxes,
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assessments or fees; and (j) amortization of capital improvements made to the
Property by Landlord which result in a net annual reduction to the operating
costs of the Property, with amortization over such period as Landlord shall
reasonably determine to be the projected useful life of such capital
improvement, together with interest thereon at the rate paid by Landlord on
funds borrowed for the purpose of making such capital improvements, or at the
Interest Rate if Landlord does not borrow funds for such purpose. Operating
Expenses shall exclude the following: (1) any depreciation of the Buildings or
other improvements on the Property or of the equipment used in connection
therewith; (2) any expense for which Landlord is reimbursed pursuant to any
insurance policy, warranty or other means of recovery from third parties; (3)
any costs (including permit, license and inspection fees) of improving space
for any other tenant of the Buildings; (4) any real estate brokerage
commissions or finders fees, advertising and promotional expenditures; (5)
any capital improvements except those described in clause (k) above; (6) any
rental under any ground or underlying lease; (7) any financing costs,
including principal and interest payments; (8) any penalties, fines, interest
or other charges attributable to the late payment of any Real Property Taxes
or other Operating Expenses; (9) Landlord's general overhead and
administrative expenses; (10) any expenses or costs incurred by Landlord as a
result of special services, privileges or amenities provided to tenants on an
individual basis rather than generally to all tenants; and (11) any expenses
or costs incurred by Landlord with respect to facilities for the benefit of
tenants of the Buildings other than Tenant. In calculating Operating
Expenses, (i) the total Operating Expenses charged to the tenants of the
Buildings shall in no event be greater than actual total Operating Expenses
for the Property; (ii) no item of Operating Expenses shall be included more
than once; (iii) Landlord shall comply with generally accepted accounting
principles, consistently applied.
1.9 PERMITTED USE. General office purposes and research and development.
Tenant shall not use any portion of the Premises for any use that is
currently categorized as a biolevel-3 or higher use, unless such use is
permitted by the City of Richmond and all other governmental authorities with
jurisdiction over the Property. Landlord shall cooperate with Tenant in
obtaining any permits, licenses or other governmental approvals required or
necessary for Tenant's business at the Premises.
1.10 PREMISES. The portion of Property described in the Basic Lease
Information and designated on EXHIBIT A, together with the appurtenant right
to use the Common Area in common with the Yacht Club and other tenants of the
Property, subject to the Rules and Regulations.
1.11 PROPERTY. The Buildings and that certain real property located in
the City of Richmond, County of Contra Costa, State of California, more
particularly described in EXHIBIT B hereto.
1.12 REAL PROPERTY TAXES. "Real Property Taxes" includes: (i) all real
estate taxes and assessments, and all other taxes relating to, or levied,
assessed or imposed on, the Property, or any portion thereof, or interest
therein; and (ii) all other taxes, assessments, charges, levies, fees, or
penalties of any kind and nature imposed, levied, assessed, charged,
conformed or collected by any governmental authority or other entity either
directly or indirectly (A) for public
3
improvements, user, maintenance or development fees, transit, housing,
police, fire, open space, streets, sidewalks, utilities, job training or
other governmental services or benefits, and (B) upon or with respect to the
development, possession, leasing, operation, management, maintenance,
alteration, repair, use or occupancy of, or business operations in, the
Property. All special or one-time assessments shall be amortized over the
longest period allowed by the applicable taxing authority. Real Property
Taxes shall exclude: (1) taxes or assessments against the personal property
of Tenant or any other tenant of the Buildings; and (2) income, franchise,
estate or gift taxes of Landlord.
1.13 RENTABLE AREA. The number of square feet in the Buildings, or
portions of the Buildings, calculated by Landlord, measured from the outside
walls of the Buildings, calculated in accordance with the most recent
American National Standard published by the Building Owners and Managers
Association International. The Rentable Area of the Premises is set forth on
the Basic Lease Information, shall be binding on Landlord and Tenant, and
shall be adjusted if Landlord materially adjusts the size of the Buildings,
calculated in accordance with the most recent American National Standard
published by the Building Owners and Managers Association International.
1.14 TENANT IMPROVEMENTS. The improvements to the Premises that may be
constructed by Tenant during the Term of this Lease as to the unfinished
portions of the Premises, including new restroom facilities, HVAC systems,
drop ceilings and floor coverings pursuant to EXHIBIT C hereto.
1.15 TENANT'S SHARE. The percentage share described in the Basic Lease
Information, which is equal to the Rentable Area of the Premises divided by
the Rentable Area of the Buildings (128,160).
1.16 TERM. The period from the Commencement Date to the Expiration Date.
SECTION 2. LEASE OF PREMISES
2.1 PREMISES. Landlord leases to Tenant and Tenant leases from Landlord
the Premises, subject to and upon all the terms, covenants and conditions
contained in this Lease.
2.2 LANDLORD'S RESERVED RIGHTS. Landlord reserves the right, without
unreasonable interference with Tenant's use and without diminution of
Tenant's usable space or other rights hereunder, including but not limited to
the right of access to alter or relocate any Building and any Common Area
facility or any other common facility, and to make changes or alterations
therein or enlargements thereof.
2.3 NO REPRESENTATIONS OR WARRANTIES. Neither Landlord nor Landlord's
agent have made any representations or warranties with respect to the
Premises, the Property or this Lease except as expressly set forth in this
Lease, and no rights, casements or licenses are or shall be acquired by
Tenant by implication or otherwise unless expressly set forth in this Lease.
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SECTION 3. TERM
3.1 INITIAL TERM. This Lease shall be effective as of the date hereof.
The Term shall commence on the Commencement Date set forth in the Basic Lease
information and shall expire on the Expiration Date unless the Term is
earlier terminated as provided in this Lease or extended as provided in this
Lease. Notwithstanding the foregoing, if Landlord, for any reason, cannot
deliver vacant possession of the Premises to Tenant as of the Commencement
Date, the Commencement Date and Expiration Date shall be revised to conform
to the date of Landlord's actual delivery of possession of the Premises. In
such event, Landlord and Tenant shall execute a letter confirming the
Commencement Date and Expiration Date of this Lease.
SECTION 4. RENT: ADDITIONAL CHARGES
4.1 FIXED MONTHLY RENT AND ADDITIONAL CHARGES. Commencing on the
Commencement Date, Tenant shall pay to Landlord Fixed Rent in the amounts and
during the periods described in the Basic Lease Information. Fixed Rent
shall be payable by Tenant in consecutive monthly installments on or before
the first day of each month, in advance. If the Commencement Date occurs on a
day other than the first day of a calendar month, or if the Expiration Date
occurs on a day other than the last day of a calendar month, then the Fixed
Rent for such fractional month shall be prorated upon a daily basis based
upon a thirty (30) day calendar month. Tenant shall also pay to Landlord all
Additional Charges required under this Lease ("ADDITIONAL CHARGES"),
including without limitation all amounts due pursuant to the provisions of
Section 5 and Section 6. Except as otherwise provided in this Lease, all
payments of Fixed Rent and Additional Charges ("RENT") shall be made without
prior demand or notice and without offset, deduction or counterclaim, in
lawful money of the United States of America. Such payments shall be made at
Landlord's Address.
4.2 NET LEASE. Except as otherwise provided herein, this shall be a
triple net lease and Rent shall be paid to Landlord absolutely net of all
costs and expenses incurred by Landlord in the ownership, maintenance,
management, repair, preservation and operation of the Property.
SECTION 5. PAYMENT OF OPERATING EXPENSES
5.1 PAYMENT BY TENANT. Tenant shall pay to Landlord Tenant's Share of
the Operating Expenses for each calendar year. The monthly estimated Tenant's
Share of Operating Expenses is $1,173.48.
5.2 MANNER OF PAYMENT. On or before the Commencement Date, with respect
to estimated Operating Expenses payable during the first calendar year of the
Term, and December 31 of each calendar year during the Term, or as soon
thereafter as practicable, Landlord shall furnish to Tenant a statement
setting forth the estimated Operating Expenses for the subsequent calendar
year. On the Commencement Date, and on the first day of each calendar month
during each ensuing calendar year, Tenant shall pay in advance to Landlord
Tenant's Share of one-twelfth (1/12th) of the most recent estimated Operating
Expenses; provided,
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however, that if such notice is not given in December, Tenant shall continue
to pay to Landlord Tenant's Share of one-twelfth (1/12th) of the Estimated
Operating Expenses of the previous calendar year until the month after such
statement is given. Within one hundred twenty (120) days after the end of
each calendar year during the Term or as soon thereafter as practicable,
Landlord shall furnish to Tenant a statement of the actual Operating Expenses
for such calendar year. If Tenant's Share of the estimated Operating Expenses
paid by Tenant during such calendar year is (x) less than Tenant's Share of
the actual Operating Expenses for such period as shown on Landlord's
statement, then Tenant shall pay the difference to Landlord within 30 days
after the date of Landlord's statement, or (y) more than Tenant's Share of
the actual Operating Expenses for such period, then Tenant shall be allowed a
credit on future payments of Estimated Operating Expenses for the amount of
such excess, or, if the statement is given by Landlord with respect to the
calendar year in which the term expires, Landlord shall pay such excess to
Tenant together with such statement.
5.3 ADJUSTMENTS TO OPERATING EXPENSES. If at any time, but no more than
once each calendar year, it appears to Landlord that the actual Operating
Expenses for any calendar year during the Term will exceed the estimated
Operating Expenses set forth in Landlord's statement to Tenant by more than
five percent (5%), then Landlord shall have the right by notice to Tenant to
revise the estimated Operating Expenses for such year and subsequent payments
thereof shall, commencing with the first month after which Tenant receives
such notice, be increased based upon such revised statement.
5.4 TENANT'S INSPECTION AND AUDIT RIGHTS. Tenant or Tenant's authorized
agent or representative, including a certified public accountant retained by
Tenant, shall have the right to inspect the books and records of Landlord
relating to Operating Expenses after giving reasonable prior written notice to
Landlord and during the business hours of Landlord at Landlord's office at
Marina Bay or at such other location in Richmond, California as Landlord may
designate, for the purpose of verifying Landlord's statement of Operating
Expenses. If Tenant has an audit performed of such books and records by a
certified public accountant and such audit reveals an overstatement of
Operating Expenses by Landlord of more than five percent (5%), then Landlord
shall, within thirty (30) days after receipt of such audit, reimburse to
Tenant any excess Operating Expenses previously paid to Landlord by Tenant
and Landlord shall reimburse Tenant for the cost of such audit.
SECTION 6. TAXES PAYABLE BY TENANT
In addition to payment of Fixed Rent and Operating Expenses, Tenant shall
pay prior to delinquency, any and all taxes, assessments, license fees,
levies, businesses taxes, impositions, transit development fees, assessments
or charges for housing funds, service payments, in lieu taxes or fees, and
any other governmental fees, excises or charges of any kind or character,
general and special, ordinary and extraordinary, whether or not customary or
now within the contemplation of the parties hereto, levied against, upon,
measured by or attributable to Tenant's use of the Premises, excluding Real
Estate Taxes and taxes based upon Landlord's taxable income.
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SECTION 7. CONDITION AND OPERATION OF THE BUILDING
7.1 AS IS. Except as specifically provided for herein, Landlord
represents and warrants, to its knowledge, that the Buildings and the
Property are in compliance with all material requirements of all municipal,
county, state and federal governmental authorities in effect as of the date
of this Lease and that the Building systems supplying utilities and services
to the Premises are in good working order and condition as of the
Commencement Date. Except as so provided, no representation or warranty is
made or shall be deemed made by Landlord concerning the nature, quality or
suitability for Tenant's business of the Buildings or the Premises, and
Tenant shall have no rights against Landlord by reason of such matters except
as otherwise expressly set forth in this Lease.
7.2 SECURITY. Tenant shall be solely responsible for security in the
Premises. Landlord shall have no obligations regarding the security of the
Premises or the Property.
SECTION 8. USE AND COMPLIANCE WITH LAWS
8.1 USE OF PREMISES. Tenant shall use and occupy the Premises during the
Term solely for the Permitted Use.
8.2 NO NUISANCE. Tenant shall not suffer, permit or commit any waste,
nor allow, suffer or permit any odors, vapors, steam, water, vibrations,
noises or undesirable effects to emanate from the Premises or from any
apparatus, equipment or installation in the Premises or outside the Premises
which would violate any applicable governmental law, order, rule, ordinance
or regulation. Tenant shall not allow, suffer or permit the Premises or any
use thereof to constitute a nuisance or interfere with the safety, comfort
or enjoyment of the Property by Landlord or any other occupants of the
Buildings.
8.3 COMPLIANCE WITH LAWS AND INSURANCE REQUIREMENTS. Tenant, at Tenant's
sole cost and expense, shall comply during the Term with all applicable laws,
orders, rules, ordinances and regulations of federal, state, county and
municipal authorities. Tenant shall not do anything, or permit anything to be
done, in or about the Premises that shall (a) invalidate or be in conflict
with the provisions of any fire, public liability or other insurance policies
covering the Buildings or any property located therein, or (b) subject
Landlord to any liability or responsibility for injury to any person or
property by reason of any business operation or other practice being
conducted in the Premises. Notwithstanding the foregoing, unless arising as
a result of its specific use of the Premises, Tenant need not perform any
structural or other major renovations, improvements or additions to the
Premises as part of such compliance.
8.4 HAZARDOUS MATERIALS. Landlord and Tenant agree as follows with
respect to the existence or use of Hazardous Materials on the Premises.
(a) PROHIBITION ON USE OF HAZARDOUS MATERIALS. Subject to the provisions
of Section 8.4(b) of this Lease, Tenant shall not use, generate, manufacture,
produce, store, release,
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discharge, or dispose of, on, under or about the Premises or any part of the
Property or transport to or from the Premises or any part of the Property any
Hazardous Material or allow its employees, agents, contractors, licensees,
invitees or subtenants (collectively, "TENANT'S AGENTS") to do so.
(b) PERMITTED HAZARDOUS MATERIALS. Notwithstanding any other provision
of this Lease, Tenant shall be permitted to use, generate, manufacture,
produce and store in, and transport to and from the Premises Hazardous
Materials so long as: (a) each of the Hazardous Materials is used, generated,
manufactured, produced or stored in, or transported to and from, the Premises
only to the extent necessary for Tenant's operation of its business at the
Premises, and (b) the conditions set forth in this Section 8.4 are complied
with.
(c) COMPLIANCE WITH ENVIRONMENTAL LAWS. Tenant shall comply with and
shall cause Tenant's Agents to comply with, and shall keep and maintain the
Premises and cause Tenant's Agents to keep and maintain the Premises in
compliance with, all Environmental Laws. Tenant shall, at its own expense
prior to Tenant's use and occupancy, procure, maintain in effect and comply
with all conditions of any and all permits, licenses and other governmental
and regulatory approvals required for Tenant's use of the Premises. Tenant
shall cause any and all Hazardous Materials removed from the Premises to be
removed and transported solely by duly licensed handlers to duly licensed
facilities for final disposal of such materials and wastes or as may otherwise
be permitted under applicable Environmental Laws. Only materials that, under
all applicable governmental laws, orders, rules, ordinances and regulations,
may be disposed of into the drains are permitted to be put into the drains at
the Premises. Tenant shall make available to Landlord for inspection and
copying upon reasonable advance notice and during the business hours of
Tenant each and all of the following to the extent the same are required by
applicable law to be maintained on-site at the Premises: (a) a copy of each
hazardous material management plan or similar document required by any
federal, state or local governmental or regulatory authority to be submitted
by Tenant; (b) copies of all permits, licenses and other governmental and
regulatory approvals with respect to the use of Hazardous Materials; (c)
copies of hazardous waste manifests reflecting the legal and proper disposal
of all Hazardous Materials removed from the Premises; and (d) copies of all
reports, studies and written results of tests or inspections concerning the
Premises or any part of the Property with respect to Hazardous Materials
(collectively "DOCUMENTS").
(d) ROUTINE MONITORING. Upon commencing any activity involving Hazardous
Materials on the Premises, and continuing thereafter throughout the Term,
Tenant shall initiate and maintain any reporting and/or monitoring system
required under all applicable Environmental Laws to ensure the routine
monitoring of the levels of Hazardous Materials which may be present on,
under or about the Premises or any part of the Property resulting from
Tenant's activities. At Landlord's written request, Tenant shall provide
Landlord copies of such reports, if any, as are provided by Tenant to any
governmental agency.
(1) LANDLORD'S RIGHT TO INSTALL TESTING ▇▇▇▇▇. Provided it does not
unreasonably interfere with Tenant's business operations on the Premises,
Landlord may
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install permanent or other testing ▇▇▇▇▇ or devices at or about the Premises
or any part of the Property, and may cause the ground water to be tested
to detect the presence of Hazardous Materials at least once every twelve
(12) months during the term of the Lease by use of such ▇▇▇▇▇ or devices
as are then customarily used for such purposes. The costs of any such
tests shall be borne solely by the Tenant if, following the initiation of
such testing, the presence of Hazardous Materials in violation of
Environmental Laws or this Lease is detected to the extent Tenant or
Tenant's Agents are responsible therefor. Tenant's obligations under this
Section 8.4(d)(1) shall survive for a period of one year after the
expiration or earlier termination of this Lease.
(2) LANDLORD'S RIGHT TO INSPECT. Provided it does not unreasonably
interfere with Tenant's business operations on the Premises, Landlord,
Lender and their representatives shall have the right, at any time, but
not more often than once every six months, upon at least three (3)
business days' prior notice (except in an emergency) to enter the
Premises during Tenant's business hours to: (i) conduct any testing,
monitoring and analysis for Hazardous Materials; (ii) review any
Documents, materials, inventory, or notices to or from governmental or
regulatory authorities relating to Tenant's use of Hazardous Materials
at the Premises; and (iii) review all storage, use, transportation and
disposal facilities and procedures required to be maintained by
applicable law for the storage, use, transportation and disposal of
Hazardous Materials.
(c) NOTICE TO LANDLORD. Tenant shall give written notice to Landlord
promptly after Tenant receives notice of any of the following: (i) any
proceeding or inquiry by, notice from, or order of any governmental
authority (including, without limitation, the California State Department
of Health Services) with respect to the presence of any Hazardous
Material on, under or about the Premises or any part of the Property or
the migration thereof from or to other property; and (ii) all claims made
or threatened by any third party against Tenant, the Premises or any part
of the Property relating to any loss or injury resulting from any
Hazardous Materials. Tenant shall give written notice to Landlord
promptly after Tenant becomes aware of any spill, release, discharge or
nonroutine disposal of Hazardous Materials of a reportable quantity with
respect to the Premises or operations at the Premises by Tenant or
Tenant's Agents. Tenant shall also promptly provide copies to Landlord of
all reports pertaining to the use, generation, manufacture, release,
discharge or disposal of Hazardous Materials on the Premises that tenant
provides to any governmental body or agency.
(f) LANDLORD'S RIGHT TO PARTICIPATE. If Landlord is joined in any legal
proceeding or action affecting the Premises or any part of the Property
initiated in connection with any Environmental Law, and if such
proceeding or action is brought in connection with a Release (as defined
in Section 8.4(g) below) or Hazardous Materials by Tenant or Tenant's
Agents, Tenant shall defend Landlord, or at Tenant's option pay
Landlord's reasonable attorneys fees in connection therewith.
(g) TENANT'S INDEMNITY. Tenant shall protect, defend, indemnify and hold
harmless Landlord, its directors, officers, partners, employees, agents,
successors and assigns from and
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against any and all claims, fines, judgements, penalties, losses,
damages, costs, expenses or liability (including reasonable attorneys'
fees and costs) to the extent directly arising out of or attributable to
the use, generation, manufacture, production, storage, release,
threatened release, discharge or disposal of any Hazardous Material on,
under or about the Premises or any part of the Property by Tenant or
Tenant's Agents or the transportation of any Hazardous Material to or
from the Premises (collectively, a "RELEASE") by Tenant or Tenant's
Agents including, without limitation: the costs of any investigation,
monitoring, removal, restoration, abatement, repair, cleanup,
detoxification or other ameliorative work of any kind or nature
(collectively "REMEDIAL WORK") and the preparation and implementation of
any closure, remedial or other required plans, as required by
Environmental Laws. For purposes of this Section 8.4(g), any acts or
omissions of Tenant or Tenant's Agents (whether or not they are
negligent, intentional, willful or unlawful) shall be strictly
attributable to Tenant. Tenant's obligations under this Section 8.4(g)
shall survive for a period of one year after the expiration or earlier
termination of this Lease.
(h) REMEDIAL WORK. Upon any spill or release of a reportable quantity of
Hazardous Material by Tenant or Tenant's Agents, Tenant shall, subject to
Section 8.4(f) of this Lease, promptly notify Landlord of the spill or
release of Hazardous Material and shall, at its sole expense, commence to
perform and thereafter diligently prosecute to completion such Remedial
Work as required under Environmental Laws.
SECTION 9. ALTERATIONS, TENANT'S PROPERTY, TENANT'S WORK AND LIENS
9.1 ALTERATIONS BY TENANT. Tenant shall not make or allow to be be made any
structural alterations, additions or improvements in or to the Premises
whatsoever (collectively, "ALTERATIONS") without first (i) providing Landlord
with copies of the plans and specifications for the Alterations, and (ii)
obtaining Landlord's prior written consent, which consent shall not be
unreasonably withheld. All Alterations undertaken by Tenant shall be done in
accordance with the provisions of EXHIBIT C to this Lease.
9.2 TITLE TO ALTERATIONS. Tenant's Improvements and any other Alterations,
paid for by Tenant shall be Tenant's property during the Term. Except as
expressly set forth below, upon expiration of the Term or termination of this
Lease, all Alterations shall become the Property of Landlord and shall be
surrendered to Landlord, in the condition required by this Lease.
9.3 LIENS. Tenant shall keep the Premises and the Property free from any
liens arising out of any (i) work performed by or for Tenant or any person
claiming through or under Tenant or material furnished to or for the Premises
before or during the Term by or for Tenant or any person claiming through or
under Tenant, and (ii) obligations incurred by or for Tenant or any
person claiming through or under Tenant before or during the Term. Landlord
shall have the right at all times to post and keep posted on the Premises
any notices permitted or required by law with respect to any mechanics',
materialmen's and other liens. In addition to all other requirements
contained in this Lease, Tenant shall give to Landlord at least ten (10)
business days prior notice of commencement of any construction on the
Premises.
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SECTION 10. REPAIRS AND MAINTENANCE
10.1 LANDLORD'S OBLIGATIONS. As a part of the consideration for the leasing
of the Premises, and subject to the obligations of Tenant set forth in this
Lease, Landlord shall maintain, in good condition, the following: (i) the
Common Area, (ii) the foundations, (iii) exterior walls, (iv) the structural
portions of the roof of the Buildings, (v) all window frames, (vi) all
gutters and down spouts on the Building, and (vii) structural elements of the
Buildings. Landlord shall have no obligation to commence any repairs or
replacements hereunder until the expiration of fifteen (15) days following
written notice from Tenant to Landlord of the need therefor. Notwithstanding
the foregoing, in the event of any emergency, Landlord shall in good faith and
with diligence to cause necessary repairs to be made as soon as possible.
Except as set forth in Section 16.7 hereof, Tenant waives any right now or
hereafter granted by law to make any repairs under this Section 10.1 upon
Landlord's failure to do so hereunder. Except as set forth in Section 16.7
hereof, Landlord shall not be liable for and, except as provided in Section
12, there shall be no abatement of Rent with respect to any injury or to
interference with Tenant's business arising from any repairs, maintenance,
alteration or improvement in or to any portion of the Buildings, including
the Premises, or in or to the fixtures, appurtenances and equipment therein.
Except as otherwise expressly provided herein, Tenant hereby waives and
releases its rights under Sections 1941, 1941.1, 1942 and 1942.5 of the
California Civil Code or under any similar law now or hereinafter in effect.
10.2 TENANT'S OBLIGATIONS. Tenant shall be solely responsible for all
janitorial services for the Premises and may select persons to perform such
services in its reasonable discretion. Tenant at its sole expenses shall
clean, keep, and maintain in good order, condition, and repair and replace
when necessary the Premises and every part thereof (but excluding only the
items which Landlord is obligated to maintain, repair or replace under
Section 10.1).
SECTION 11. UTILITIES
11.1 UTILITIES. Landlord shall provide water, sewer, gas and electrical
connections to the Premises and separate metering facilities therefor. Tenant
shall promptly pay as the same becomes due, all charges for water, gas,
electricity, telephone, sewer service, waste pickup and any other utilities,
materials or services furnished directly to or used by Tenant on or about the
Premises during the Lease Term.
11.2 INTERRUPTION. If Tenant is unable to conduct its ordinary business
activities in the Premises because of any failure or interruption of any
utility to the Premises for a period in excess of thirty (30) consecutive
days (except if due to the negligence or willful misconduct of Tenant's Agents
or if due to Tenant's failure to make repairs to the Premises as required
hereunder), unless Landlord is exercising commercially reasonable efforts to
restore the utility, Tenant shall have the right to terminate this Lease,
without any liability to Landlord, upon five (5) days' prior written notice.
Nothwithstanding the foregoing, in the event such failure or interruption is
caused by damage or destruction covered by Section 12 hereof, the provisions
of Section 12 shall apply in lieu of the foregoing. Except as set forth in
this Section or in Section 12
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hereof, failure by Landlord to furnish any service herein specified or any
cessation thereof due to accident, making of repairs, alterations or
improvements, weather, unusual difficulty or ability to obtain services or
supplies from sources usually used for the Property, labor difficulties or
other causes beyond Landlord's reasonable control shall not render Landlord
liable in any respect for damages of any kind, nor be construed as an
eviction of Tenant nor work an abatement of Rent.
SECTION 12. DAMAGE OR DESTRUCTION
12.1 LOSS COVERED BY INSURANCE. If, at any time prior to the expiration
or termination of this Lease, the Premises or the Building in which the
Premises are located is wholly or partially damaged or destroyed by a
casualty, which loss to Landlord is (except for any applicable deductible)
fully covered by insurance maintained by Landlord or for Landlord's benefit
(or required to be maintained by Landlord pursuant to Section 13), which
casualty renders the Premises totally or partially inaccessible or unusable
by Tenant in the ordinary conduct of Tenant's business, then;
(a) REPAIRS WHICH CAN BE COMPLETED WITHIN FOUR (4) MONTHS. Within twenty
(20) days of notice to Landlord of such damage or destruction, Landlord shall
provide Tenant with notice of its determination of whether the damage or
destruction can be repaired within four (4) months of such damage or
destruction without the payment of overtime or other premiums. If all repairs
to such Premises or Building can, in Landlord's reasonable judgment, be
completed within four (4) months following the date of such damage or
destruction without the payment of overtime or other premiums, Landlord
shall, at Landlord's expense, repair the same and this Lease shall remain in
full force and effect and a proportionate reduction of the Rent shall be
allowed Tenant for such portion of the Premises as shall be rendered
inaccessible or unusable to Tenant, and which is not used by Tenant, during
the period of time that such portion is unusable or inaccessible and not used
by Tenant.
(b) REPAIRS WHICH CANNOT BE COMPLETED WITHIN FOUR (4) MONTHS. If all
such repairs to the Building and Premises cannot, in Landlord's reasonable
judgment, be completed within four (4) months following the date of notice
to Landlord of such damage or destruction without the payment of overtime or
other premiums, Landlord shall notify Tenant of such determination and either
Landlord or Tenant may, at its option, upon written notice to the other party
given within thirty (30) days after the occurrence of such damage or
destruction, elect to terminate this Lease as of the date of the occurrence
of such damage or destruction. In the event that neither Landlord nor Tenant
elects to terminate this Lease in accordance with the foregoing provisions,
then Landlord shall, at Landlord's expense, repair such damage or
destruction, and in such event, this Lease shall continue in full force and
effect but the Rent shall be proportionately reduced as hereinabove provided
in Section 12.1 (a); provided, however, that if any such repair is not
commenced by Landlord within thirty (30) days after the occurrence of such
damage or destruction or is not substantially completed by Landlord within
eight (8) months after the occurrence of such damage or destruction, then in
either such event Tenant may, at its option, upon written notice to Landlord,
elect to terminate this Lease as of the date of the occurrence of such damage
or destruction.
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12.2 LOSS NOT COVERED BY INSURANCE. If, at any time prior to the
expiration or termination of this Lease, the Premises or the Building in
which the Premises are located is totally or partially damaged or destroyed
from a casualty, which loss to Landlord is not fully covered (except for any
deductible) by insurance maintained by Landlord or for Landlord's benefit (or
required to be maintained by Landlord pursuant to Section 13), Landlord may,
at its option, upon written notice to Tenant within thirty (30) days after
notice to Landlord of the occurrence of such damage or destruction, elect to
restore or repair such damage or destruction, or Landlord may elect to
terminate this Lease so long as Landlord terminates every other lease in the
Building which was affected by the casualty. Notwithstanding the foregoing,
Landlord may not elect to terminate this Lease if (i) the uninsured portion
of the damage is less than ten percent (10%) of the replacement cost of the
Building and/or (ii) Landlord does not elect to terminate the leases of all
other tenants in the Building who are similarly affected by such damage
and/or destruction. If Landlord elects to repair or restore such damage or
destruction, this Lease shall continue in full force and effect but the Rent
shall be proportionately reduced as provided in Section 12.1(a). If Landlord
does not elect by notice to Tenant to repair such damage the Lease shall
terminate. Notwithstanding the foregoing, if all repairs to the Premises or
the Building cannot, in Landlord's reasonable judgment, be completed within
four (4) months following the date of such damage or destruction without the
payment of overtime or other expenses, then either Landlord or Tenant may at
its option, upon written notice to the other party given within thirty (30)
days after the occurrence of such damage or destruction, elect to terminate
this Lease as of the date of the occurrence of such damage or destruction.
12.3 DESTRUCTION DURING FINAL YEAR. Notwithstanding anything to the
contrary contained in Sections 12.1 and 12.2 hereof, if the Premises or the
Building in which the Premises are located is wholly or partially damaged or
destroyed within the final twelve (12) months of the Term of this Lease, or,
if the Option to Extend pursuant to Section 27 hereof has been exercised,
during the last year of any Extended Term, so that Tenant shall be prevented
from using the Premises for sixty (60) consecutive days due to such damage or
destruction, then either Landlord or Tenant may, at its option, by notice to
the other party within thirty (30) days after the occurrence of such damage
or destruction, elect to terminate this Lease.
12.4 DESTRUCTION OF TENANT'S PERSONAL PROPERTY, TENANT IMPROVEMENTS OR
PROPERTY OF TENANT'S EMPLOYEES. In the event of any damage to or destruction
of the Premises or the Building, under no circumstances shall Landlord be
required to repair any injury, or damage to, or make any repairs to or
replacements of Tenant's Improvements. Landlord shall have no responsibility
for any contents placed or kept in or on the Premises or the Building by
Tenant or Tenant's agents or employees.
SECTION 13. INSURANCE AND INDEMNITY
13.1 INSURANCE ON TENANT'S PROPERTY. Tenant shall during the Term
provide insurance coverage against loss or damage by fire and such other
risks as are from time to time included in a standard of special extended
coverage endorsement insuring Tenant's merchandise, trade fixtures,
furnishings, equipment and all other items of personal property of Tenant.
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13.2 TENANT'S LIABILITY INSURANCE. Tenant shall procure at its sole cost
and expense and keep in effect from the date of this Lease and at all times
during the Term either comprehensive general liability insurance or
commercial general liability insurance applying to the use or occupancy of
the Premises, and contractual liability insurance applying to Tenant's
indemnity obligations under this Lease with respect to bodily injury,
property damage, or other loss covered by Tenant's liability insurance. Such
coverage shall be written by insurance companies reasonably acceptable to
Landlord and its Lender and shall have a minimum combined single limit of
liability of at least two million dollars ($2,000,000.00). All such policies
shall be written to apply to all bodily injury, property damage or other
covered loss occurring during the policy term, shall be endorsed to add
Landlord as an additional named insured, to provide that such coverage shall
be primary and that any insurance maintained by Landlord shall be excess
insurance only. All such insurance shall provide for severability of
interests; shall provide that an act or omission of one of the named insureds
shall not reduce or avoid coverage to the other named insureds; and shall
afford coverage for all claims based on acts, omissions, injury and damage,
which claims occurred or arose (or the onset of which occurred or arose) in
whole or in part during the policy period.
13.3 FIRE AND EXTENDED COVERAGE INSURANCE. Landlord shall maintain
insurance on the Buildings and the Premises against damage by fire and those
perils now specified in the most current standard extended coverage
endorsement in an amount equal to the full insurable cost of the Buildings
and the Premises, excluding any of Tenant's Improvements and Alterations, as
reasonably determined by Landlord, exclusive of excavations and foundations
and subject to such "deductibles" as Landlord may reasonably determine. In
addition, Landlord shall maintain loss of rent insurance and a policy of
commercial general liability and property damage insurance. All insurance
proceeds payable under Landlord's insurance carried hereunder shall by
payable solely to Landlord.
13.4 WAIVER OF SUBROGATION. To the extent permitted by law and without
affecting the coverage provided by insurance required to be maintained
hereunder, Landlord and Tenant each waive any right to recover against the
other on account of any and all claims Landlord or Tenant may have against
the other with respect to any risk insured against by insurance actually
carried, or required to be carried hereunder. Each casualty insurance policy
carried by Landlord or Tenant hereunder, or which either may obtain with
respect to the Premises or the Property independent of obligations hereunder,
shall provide that the insurer waives all rights of recovery by way of
subrogation against Landlord or Tenant in connection with all matters
included within the scope of the waiver of recovery contained in this Section
13.4.
13.5 TENANT'S INDEMNITY. To the fullest extent permitted by law, Tenant
shall indemnify Landlord, and its officers, directors, partners, employees,
servants, and agents, and all mortgagees or beneficiaries of Landlord's
interest in all or any portion of the Property, (collectively, "RELATED
ENTITIES") against and save Landlord and its Related Entities harmless from
and defend Landlord and Related Entities through attorneys reasonably
satisfactory to Landlord from and against any and all claims, loss, cost
liability, damage and expense including,
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without limitation, penalties, fines and reasonable attorneys' fees
(collectively, "CLAIMS"), incurred in connection with or arising in whole or
in part from the activities of Tenant or Tenant's Related Entities, or any
negligence or willful misconduct by Tenant or Tenant's Related Entities,
excluding any Claims to the extent arising out of: (i) the negligence or
willful misconduct of Landlord or Landlord's Related Entities, or (ii)
Landlord's breach of this Lease.
13.6 LANDLORD'S INDEMNITY. To the fullest extent permitted by law,
Landlord shall indemnify Tenant and its officers, directors, shareholders,
partners, employees, servants and agents (collectively "RELATED ENTITIES")
against and save Tenant and its Related Entities harmless from and defend
Tenant and its Related Entities through attorneys reasonably satisfactory to
Tenant from and against any and all Claims incurred in connection with or
arising in whole or in part from the activities of Landlord or Landlord's
Related Entities or any negligence or willful misconduct of Landlord or
Landlord's Related Entities, excluding any Claims to the extent arising out
of: (i) the negligence or willful misconduct of Tenant or Tenant's Related
Entities, or (ii) Tenant's breach of this Lease.
Section 14. EMINENT DOMAIN
14.1 EFFECT OF TAKING. If all of the premises is condemned or taken in
any manner before or during the Term for public or quasi-public use, or any
transfer of the Premises is made in avoidance of an exercise of the power of
eminent domain (each of which acts shall be referred to as a "TAKING"), this
Lease shall automatically terminate as of the date of the vesting of title as
a result of such taking. If a part of the Premises is so taken, this Lease
shall automatically terminate as to the portion of the Premises so taken as
of the date of the vesting of title as a result of such taking. If such
portion of the Property is taken as to render the Property incapable of
economically feasible operation or to require a substantial alteration or
reconstruction of the remaining portions thereof, this Lease may be
terminated by Landlord, as of the date of the vesting of title as a result of
such taking, by written notice to Tenant within sixty (60) days following
notice to Landlord of the date of which said vesting will occur. If such
portion of the Premises is taken as, in the reasonable opinion of Tenant, to
materially impair the ability of Tenant to use and conduct its business from
the Premises, this Lease may be terminated by Tenant as of the date of the
vesting of title as a result of such taking, by written notice to Landlord
within sixty (60) days following notice to Tenant of the date of which said
vesting will occur.
14.2 AWARD. Landlord shall be entitled to the entire award for any
taking; provided, however, that Landlord shall have no interest in any award
made to Tenant for its leasehold interest, relocation expenses, the taking of
personal property and fixtures belonging to Tenant or the interruption of or
damage to Tenant's business, or attributable to improvements of the Premises
actually paid by Tenant.
14.3 ABATEMENT OF RENT. In the event of a partial or temporary taking
that does not result in a termination of this Lease as to the entire
Premises, the Rent shall ▇▇▇▇▇ in proportion to the portion of the Premises
taken or rendered untenable by such taking. Tenant hereby waives
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and releases its rights under Section 1265.130 of the California Code of
Civil Procedure or any similar statute now or hereafter in effect.
Section 15. SUBLEASE AND ASSIGNMENT
15.1 CONSENT REQUIRED. Subject to Section 15.5 hereof, Tenant shall not
sell, assign, encumber, pledge or otherwise transfer or hypothecate all or
any part of the Premises or Tenant's leasehold estate hereunder (each such
act is referred to herein as an "ASSIGNMENT"), or sublet the Premises or any
portion thereof or permit the Premises to be occupied by anyone other than
Tenant (each such act is referred to herein as a "SUBLEASE") without
Landlord's prior written consent in each instance, which consent shall not be
unreasonably withheld.
15.2 NOTICE. Tenant shall have no right to enter into an Assignment or a
Sublease unless Tenant shall have first requested in writing Landlord's
consent to such Assignment or Sublease. Any request by Tenant for Landlord's
consent to a specific Assignment or Sublease shall include (a) the name of
the proposed assignee, subtenant or occupant, (b) the nature of the proposed
assignee's, subtenant's or occupant's business to be carried on in the
Premises, (c) a copy of the proposed Assignment or Sublease, and (d) such
financial information as Landlord may reasonably request concerning the
proposed assignee, subtenant or occupant or its business.
15.3 CONDITIONS OF APPROVAL. Without limiting the circumstances under
which it may be reasonable for Landlord to withhold its consent to an
Assignment or Sublease, it is expressly agreed that it shall be reasonable
for Landlord to withhold its consent if Landlord reasonably determines that
(i) the character or value of the Buildings are likely to be adversely
affected during the Term as a result of such Assignment or Sublease, or (ii)
the financial condition of the proposed new tenant or subtenant at the time
of the proposed Assignment or Sublease is, in the reasonable opinion of
Landlord, insufficient to meet the obligations of Tenant being assigned to
such new tenant or subtenant.
15.4 COST OR PROCESSING REQUEST. Tenant shall reimburse Landlord for
Landlord's reasonable attorney's fees for the review and documentation of any
proposed Assignment or Sublease within thirty (30) days after Landlord gives
notice to Tenant of the amount thereof, together with reasonable documentation
supporting such fees.
15.5 SCOPE of ASSIGNMENT. Any sale or other transfer of a majority of
(i) the partnership interests in Tenant or any beneficial interest therein,
if Tenant is a partnership, or (ii) the capital stock in Tenant or any
beneficial interest therein, if Tenant is a corporation, shall be an
Assignment for purposes of this Lease. The sale or other transfer of more
than fifty percent (50%), by value, of the assets of Tenant used in
conducting its business in the Premises shall also constitute an Assignment
for purposes of this Lease. Notwithstanding anything to the contrary
contained in this Section 15, Tenant may assign or sublet the Premises, or
any portion thereof, without Landlord's consent, to any entity which controls,
is controlled by or is under common control with Tenant, or to any entity
resulting from the merger or consolidation with Tenant, or to any entity
which acquires all or substantially all the assets of Tenant as a going
concern of the
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business that is being conducted on the Premises, and any such Assignment
shall not be subject to the provisions of Section 15.7 below.
15.6 ASSUMPTION OF OBLIGATIONS. Each assignee, subtenant or other
transferee of all or a portion of Tenant's interest hereunder, other than
Landlord, shall assume, as provided in this Section 15.6, all obligations of
Tenant under this Lease and shall be and remain liable jointly and severally
with Tenant for the payment of Rent, and for the performance of all the
terms, covenants, conditions and agreements herein contained on Tenant's part
to be performed during the Term; provided, however, that a sublessee shall
be liable to Landlord for Rent only in the amount set forth in the Sublease.
15.7 EXCESS RENT; RECAPTURE RIGHTS. Landlord's right to the portion of
excess rent specified in this Section 15.7 is expressly reserved from the
grant of Tenant's leasehold estate. Landlord shall have such right to such
portion of the excess rent in the event of any Assignment or Sublease by any
succeeding subtenant or assignee, regardless of whether (i) the instrument
effecting any such Assignment or Sublease provides such right to Landlord, or
(ii) Landlord has approved such an instrument which fails to provide such
right to Landlord. If Landlord consents to any Assignment or Sublease, then
Tenant shall pay to Landlord within five (5) business days after Tenant's
receipt thereof, 50% of any and all consideration, as calculated pursuant to
the following sentence, received by Tenant on account of such transaction,
howsoever the same may be denominated, and in the case of Subleases, to the
extent that such consideration exceeds the pro rata portion of the Fixed Rent
and other charges payable by Tenant hereunder attributable to the sublet
portion of the Premises, based on the net Rentable Area of the Premises and
the net Rentable Area of the Premises sublet. In calculating the
consideration subject to the preceding sentence, the following items shall be
deducted therefrom: (a) the reasonable costs paid by Tenant for additional
improvements installed in the portion of the Premises subject to such
assignment or sublease by Tenant for the specific subtenant or assignee in
question, amortized over the term of such assignment or sublease with interest
thereon at the rate paid by Tenant on funds borrowed for the purpose of
making such improvements or at the Interest Rate if Tenant does not borrow
funds for such purpose and (b) reasonable leasing commissions paid by Tenant
in connection with such assignment or subletting.
Section 16. DEFAULT: REMEDIES
16.1 EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an "EVENT OF DEFAULT" by Tenant;
(a) VACATION OR ABANDONMENT. Abandonment of the Premises for a
continuous period in excess of ninety (90) days.
(b) NONPAYMENT OF MONEY. Failure to pay Rent or any other sum due and
payable by Tenant under this Lease.
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(c) OTHER OBLIGATIONS. Failure to perform any term, obligation,
condition, agreement or covenant under this Lease, other than nonpayment of
money;
(d) INSOLVENCY. The admission by Tenant in writing of its inability to
pay its debts as they become due; the filing by Tenant of a petition seeking
any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any present or future statute, law or
regulation, the filing by Tenant of an answer admitting or failing timely to
contest a material allegation of a petition filed against Tenant in any such
proceedings or, if within thirty (30) days after the commencement of any
proceeding against Tenant seeking any such relief, such proceeding shall not
have been dismissed; the appointment of a receiver or trustee to take
possession of all or substantially all of the assets of Tenant unless such
appointment is vacated or annulled within sixty (60) days; a general
assignment by Tenant for the benefit of creditors; any action or proceeding
commenced by Tenant under any insolvency or bankruptcy act, or under any
other statute or regulation having as its purpose the protection of
creditors, or any such action commenced against Tenant and not discharged
within thirty (30) days after the date of commencement, or the attachment,
execution or other judicial seizure of all or substantially all of Tenant's
assets or the Premises, if such attachment or other seizure remains
undismissed or undischarged for a period of ten (10) days after the levy
thereof.
16.2 NOTICE TO TENANT. Upon the occurrence of any Event of Default,
Landlord shall give Tenant written notice thereof, specifying the Event of
Default and the provisions of this Lease breached by Tenant and Tenant shall
have the right to cure such Event of Default within the time periods,if any,
hereinafter specified.
(a) NONPAYMENT OF MONEY. For failure to pay Rent or any other sum,
within ten (10) days after Landlord's notice.
(b) OTHER OBLIGATIONS. For failure to perform any term, obligation,
condition, agreement or covenant under this Lease, other than nonpayment of
monies, thirty (30) days after Landlord's notice. Notwithstanding the
foregoing, if such failure cannot reasonably be cured within such 30-day
period, Tenant shall continue to have the right to cure and shall not be in
default under this Lease if Tenant commences within such 30-day period such
cure and thereafter diligently prosecutes the same to completion. No notice
of cure period shall be required or applicable hereunder for any Event of
Default specified in Section 16.1(d) except as expressly set forth in Section
16.1(d) of this Lease.
16.3 REMEDY UPON OCCURRENCE OF UNCURED EVENT OF DEFAULT. On the
occurrence of an uncured Event of Default, Landlord shall have the right
either (i) to terminate this Lease, and at any time thereafter recover
possession of the Premises, or any part thereof, and expel and remove
therefrom Tenant and any other person occupying the same, by any lawful
means, and again repossess and enjoy the Premises without prejudice to any of
the remedies that Landlord may have under this Lease, or at law or equity by
reason of the Event of Default or of such termination, or (ii) to continue
this Lease in effect for so long as Landlord does not so terminate Tenant's
right to possession, and enforce all Landlord's rights and remedies under
this Lease,
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including the right to (A) recover Fixed Rent and Additional Charges as they
become due, or (B) relet the Premises at such rental and upon such terms and
conditions as Landlord, in its reasonable discretion, may deem advisable. Acts
of maintenance, preservation or efforts to lease the Premises, the
appointment of a receiver upon application of Landlord to protect Landlord's
interest under this Lease, or re-entry or taking of possession of the
Premises by Landlord hereunder, shall not constitute an election to terminate
Tenant's right to possession unless specific written notice of such
termination is given to Tenant hereunder. Notwithstanding any relating
without termination, Landlord may at any time thereafter elect to terminate
this Lease pursuant to this Section 16.3. Provided Tenant cooperates with
Landlord, Landlord agrees to make reasonable efforts to mitigate its damages
arising from an uncured Event of Default by Tenant.
16.4 DAMAGES UPON TERMINATION. If Landlord terminates this Lease
pursuant to Section 16.3, Landlord may exercise all rights and remedies
available to a landlord at law or in equity, including, without limitation,
the right to recover from Tenant: (i) the worth at the time of award of the
unpaid Rent and other amounts payable by Tenant hereunder which had been
earned at the time of termination; (ii) the worth at the time of award of the
amount by which the unpaid Rent and such other amounts which would have been
earned after termination until the time of the award exceeds the amount of
loss of Rent and such other amounts that the Tenant proves could have been
reasonably avoided; (iii) the worth at the time of award of the amount by
which the unpaid Rent and such other amounts for the balance of the term
after the time of the award exceeds the amount of loss of Rent and such other
amounts that the Tenant proves could be reasonably avoided; and (iv) any
other amount necessary to compensate Landlord for all the direct costs
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. The "worth at the time of award" of the amounts referred to in
clauses (i) and (ii) shall be computed with Interest. The "worth at the time
of award" of the amount referred to in clause (iii) shall be computed by
discounting such amount at the discount rate of the Federal Reserve Bank of
San Francisco, California, plus one percent (1%). As used herein "time of
award" shall mean either the date upon which Tenant pays to Landlord the
amount recoverable by Landlord as hereinabove set forth, or the date of entry
of any determination, order or judgment, of any court or other legally
constituted body determining the amount recoverable, whichever first occurs.
16.5 COMPUTATION OF RENT AND OTHER AMOUNTS FOR PURPOSES OF DEFAULT. For
purposes of Section 10.4, unpaid Rent and other amounts which would have
accrued and become payable under this Lease shall consist of the sum of:
(i) the total Fixed Rent for the balance of the Term, plus (ii) a computation
of Tenant's Share of the Operating Expenses for the balance of the Term.
16.6 LANDLORD'S RIGHT TO PERFORM ON TENANT'S BREACH. In addition to any
other right or remedy of Landlord hereunder, upon the occurrence of an
uncured Event of Default and without waiving or releasing Tenant from any
obligation of Tenant hereunder, Landlord may (but shall not be required) to
cure such uncured Event of Default for the account of Tenant.
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Landlord shall not be responsible or liable to Tenant for any loss or damage
that may be caused to Tenant's stock or business by reason of effecting cure
hereunder, unless caused by the gross negligence or willful misconduct of
Landlord or Landlord's Agents. All sums paid by Landlord and all costs and
expenses incurred by Landlord in connection with such cure (including
attorneys' fees), together with interest thereon at the Interest Rate from
the respective dates of Landlord's payment of each item of cost or expenses,
shall be payable by the Tenant on demand.
16.7 LANDLORD'S DEFAULTS.
(a) NOTICE AND CURES; LANDLORD'S LIABILITY. If Landlord fails to perform
any of its obligations under this Lease, then Tenant shall give Landlord
written notice thereof, specifying with particularity the breach claimed by
Tenant. Except for Landlord's failure to make repairs required under Section
10.1, Landlord shall have the right to cure such breach during the 30-day
period following receipt of Tenant's notice hereunder, unless such breach
cannot reasonably be cured within such 30-day period, in which event Landlord
shall not be in default under this Lease if Landlord commences within such
30-day period such cure and thereafter diligently prosecutes the same to
completion. Notwithstanding the foregoing, if such breach causes immediate
damage to Tenant's personal property or the ordinary conduct of Tenant's
business, such as roof leaks, Landlord shall use commercially reasonable
efforts to cure such breach as soon as possible. In addition, in the event
Landlord fails to cure such breach within the time period set forth herein,
Tenant shall have the right, but not the obligation, to cure such breach and
the reasonable costs and expenses incurred by Tenant in connection with such
cure, together with interest thereon at the Interest Rate from the respective
date(s) of Tenant's payment of each item of cost or expense, shall be payable
by Landlord upon demand. If the Premises, or any portion thereof, are at any
time subject to any mortgage or a deed of trust, and either Landlord or the
mortgagee or beneficiary has notified Tenant of the existence of such
mortgage or deed of trust, Tenant shall serve on the mortgagee or beneficiary
thereunder concurrent copies of any notice of default served on Landlord
hereunder at the last address for such mortgagee or beneficiary of which
Tenant has received notice from Landlord.
(b) RECOVERY AGAINST LANDLORD. Tenant shall look solely to Landlord's
interest in the Property for the recovery of any judgment against Landlord.
Landlord, or if Landlord is a partnership, its partners whether general or
limited, or if Landlord is a corporation, its directors, officers and
shareholders, shall not be personally liable for any such judgment.
16.8 WAIVER; REMEDIES CUMULATIVE. Failure of Landlord or Tenant to
declare an Event of Default immediately upon the occurrence thereof, or delay
in taking any action in connection therewith, shall not waive such Event of
Default, but Landlord or Tenant shall have the right to declare any such
Event of Default at any time thereafter. No waiver by Landlord or Tenant of
an Event of Default, or any agreement, term, covenant or condition
contained in this Lease, shall be effective or binding on the other party
unless made in writing and no such waiver shall be implied from any omission
by Landlord or Tenant to take action with respect to such Event of Default or
other such manner.
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SECTION 17. SUBORDINATION, ATTORNMENT AND ESTOPPELS
17.1 SUBORDINATION. Without the necessity of any additional document
being executed by Tenant for the purpose of effecting a subordination, this
Lease, and all of Tenant's rights under this Lease, shall be subject and
subordinate at all times to the lien of any mortgage or deed of trust or
other security instrument (and any advances or interest thereunder) that may
now exist or hereafter be executed in any amount for which the Property or
any portion thereof, is specified as security, and all modifications,
renewals, supplements, consolidations and replacements thereof, provided that
the rights of Tenant herein are not disturbed so long as Tenant is not in
default. If any such mortgagee or beneficiary so elects in writing, then this
Lease shall be superior to the lien of the mortgage or deed of trust held by
such mortgagee or beneficiary, whether this Lease is dated or recorded before
or after such mortgage or trust deed. Tenant shall promptly execute and
deliver, upon demand by Landlord and in substantially the form reasonably
requested by Landlord, any additional documents evidencing the priority or
subordination of this Lease, provided such documents contain the
nondisturbance agreement described in Section 17.2 hereof.
17.2 ATTORNMENT BY TENANT: NON DISTURBANCE. Upon enforcement of any
rights or remedies under any mortgage or deed of trust to which this Lease is
subordinated (including, without limitation, proceedings for judicial or
power of sale foreclosure, or deed in lieu of foreclosure delivered by
Landlord to the mortgagee or beneficiary thereunder), Tenant shall attorn to
the purchaser or transferee under such right or remedy and recognize such
purchaser or transferee as Landlord under this Lease. If Tenant attorns
hereunder, then, so long as there is no uncured Event of Default, Tenant
shall not be disturbed in its possession of the Premises. Tenant shall
execute and deliver any reasonable document or instrument required by such
purchaser or transferee confirming the attornment hereunder.
17.3 CERTIFICATES. Tenant, at any time during the Term and from time to
time, shall execute, acknowledge and deliver to Landlord, addressed (at
Landlord's request) to any prospective purchaser or mortgagee of any part of
the Property a certificate stating: (a) that Tenant has accepted the Premises
(or, if Tenant has not done so, that Tenant has not accepted the Premises and
specifying the reasons therefor), (b) the Commencement Date and Expiration
Date of this Lease, (c) that this Lease is unmodified and in full force and
effect (or, if there have been modifications, that this Lease is in full
force and effect as modified and stating the modifications), (d) whether or
not Tenant is aware of any then existing defenses against the enforcement of
any of the obligations of Tenant under this Lease (and, if so, specifying
same), (e) whether or not Tenant is aware of any then existing defaults by
Landlord in the performance of its obligations under this Lease (or acts or
omissions which would constitute defaults if uncured after notice), and, if
so, specifying same, (f) the dates, if any, to which the Rent and Additional
Charges and other amounts under this Lease have been paid, (g) Tenant's use
of and knowledge with respect to Hazardous Materials under, over and upon the
Premises, and (h) any other information and statements that may reasonably be
required by Landlord. In addition, Landlord, at any time during the Term and
from time to time upon reasonable request by Tenant,
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shall execute, acknowledge and deliver to Tenant, addressed to Tenant, a
certificate containing, if true, the matters described in the foregoing items
(b), (c), (f), and any other information and statements that may reasonably
be required by Tenant. It is intended that any such certificate of Tenant may
be relied upon by any prospective purchaser or mortgagee of all or any part
of the Property.
SECTION 18. FEES AND EXPENSES; PAYMENT
18.1 INTEREST ON PAST DUE OBLIGATIONS. Unless otherwise specifically
provided herein, any amount due from Tenant to Landlord under this Lease
(including, without limitation, any payment of Rent) which is not paid within
ten (10) after written notice to Tenant (except no notice need be given for
failure to make any payment of Fixed Rent) shall bear interest from the due
date until paid at the Interest Rate. The payment of such interest shall not
alone excuse or cure any default under this Lease.
18.2 LATE CHARGES. Tenant acknowledges that late payment by Tenant to
Landlord of Rent will cause Landlord to incur costs not contemplated by this
Lease, the exact amount of such costs being extremely difficult and
impracticable to fix. Such costs include, without limitation, processing and
accounting charges, and late charges that may be imposed on Landlord by the
terms of any encumbrance and note secured by any encumbrance covering the
Premises. Therefore, in addition to the provisions of Section 18.1, if any
installment of Rent due from Tenant is not received within ten (10) days
after written notice to Tenant (except no notice need be given for failure to
make any payment of Fixed Rent) by Landlord, Tenant shall pay to Landlord an
additional sum of five percent (5%) of the overdue Rent as a late charge. The
parties agree that this late charge represents a fair and reasonable estimate
of the costs that Landlord will incur by reason of late payment by Tenant.
SECTION 19. ACCESS TO PREMISES
19.1 LANDLORD ACCESS. Landlord reserves for itself and its agents,
employees and independent contractors the right to enter the Premises at all
reasonable times and upon reasonable notice (i) to inspect the Premises,
(ii) to supply any service to be provided by Landlord to Tenant hereunder,
(iii) to show the Premises to prospective purchasers, mortgagees or tenants,
(iv) to post notices of non-responsibility, (v) to determine whether Tenant is
complying with its obligations under this Lease, (vi) to alter, improve or
repair the Premises or any other portion of the Buildings and (vii) for any
other lawful purpose not inconsistent with Tenant's rights hereunder. Any
entry by Landlord or Landlord's Agents pursuant to this section shall, except
in the case of any emergency, be upon forty-eight (48) hours' advance notice
to Tenant. Landlord shall comply with Tenant's security, safety and other
procedures applicable to the Premises and shall not unreasonably interfere
with Tenant's use of the Premises or the conduct of Tenant's business therein
while in the Premises. Provided Landlord complies with the requirements of
this section, Tenant hereby waives any claim for damages for any injury or
inconvenience to or interference with Tenant's business, any loss of
occupancy or quiet enjoyment of the Premises, any right to abatement of Rent,
or any other loss occasioned by
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Landlord's exercise of any of its rights under this Section 19, unless caused
by the negligence or willful misconduct of Landlord or its agents, employees
or contractors. Landlord shall have the right to use any and all means that
Landlord may reasonably deem necessary or proper in order to obtain entry to
any portion of the Premises in an emergency.
19.2 NTI ACCESS. Tenant acknowledges that the Fire Department for the
City of Richmond may require an emergency access exit through the hallways of
the Premises for the benefit of Neurobiological Technologies, Inc. (""NTI''),
the tenant occupying space adjacent to Tenant, and agrees to cooperate with
the Fire Department and NTI to provide such emergency access exit through the
hallways of the Premises in the event such emergency access is required.
Tenant agrees to cooperate with NTI in order to develop safety and security
procedures and systems for emergency access through the doors separating the
Premises and the premises occupied by NTI.
SECTION 20. NOTICES
Except as otherwise expressly provided in this Lease, any bills,
statements, notices, demands, requests or other communications given or
required to be given under this Lease shall be effective only if rendered or
given in writing, and either sent by overnight delivery service or registered
or certified mail, return receipt requested, addressed (a) to Tenant (i) at
the Premises, or (ii) at Tenant's last known address or at any place where
Landlord believes that Tenant or any agent or employee of Tenant may be
found, if sent subsequent to Tenant's vacating, deserting, abandoning or
surrendering the Premises, (b) to Landlord at Landlord's Address, or (c) to
either Landlord or Tenant at such other address as either Landlord or Tenant
may designate as its new address for such purpose by notice given to the
other in accordance with the provisions of this Section 20. Any such ▇▇▇▇,
statement, notice, demand, request or other communications shall be deemed to
have been rendered or given (i) on the date it is officially recorded as
delivered to the intended recipient by return receipt or equivalent, and, in
the absence of such record of delivery, the effective date shall be presumed
to have been the third (3rd) business day after the date when it shall have
been deposited in the mail as provided in this Section 20 if sent by
registered or certified mail. If Tenant is notified of the identity and
address of any mortgagee of Landlord, Tenant shall give to such mortgagee by
registered or certified mail written notice of any default by Landlord or
failure by Landlord to perform any of its obligations hereunder.
SECTION 21. RULES AND REGULATIONS
Tenant shall faithfully observe and comply with the rules and
regulations for the Buildings, a copy of which has been provided to Tenant,
and all reasonable modifications thereof and additions thereto which are
applicable to multiple tenants and which do not adversely affect Tenant in a
material way from time to time put into effect by Landlord. Landlord shall
have the right to promulgate different rules and regulations applicable to
different portions of the Buildings, but Landlord shall not have the right to
promulgate different rules and regulations applicable only to Tenant. If
there is any conflict between the terms of the rules and regulations and any
provision of this Lease, the terms of this Lease shall govern. Landlord shall
not be responsible
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for the nonperformance by any other tenant or occupant of the Buildings of
any of such rules and regulations. Landlord's consent where required under
the rules and regulations shall not be unreasonably withheld, conditioned or
delayed.
SECTION 22. SECURITY DEPOSIT
Tenant agrees to deposit with Landlord the Security Deposit, if any, set
forth in the Basic Lease Information upon execution of this Lease, as
security for Tenant's faithful performance of its obligations under this
Lease. Landlord and Tenant agree that the Security Deposit may be commingled
with other funds of Landlord. If Tenant fails to pay any Rent or other
amount when due and payable under this Lease, or fails to perform any of the
terms hereof, Landlord may appropriate and apply or use all or any portion of
the Security Deposit for Rent payments or any other amount then due and
unpaid, for payment of any amount for which Landlord has become obligated as
a result of Tenant's default or breach, and Landlord may so apply or use this
deposit without prejudice to any other remedy Landlord may have by reason of
Tenant's default or breach. If Landlord so uses any of the Security Deposit,
Tenant shall, within ten (10) days after written demand therefor, restore the
Security Deposit to the full amount originally deposited; Tenant failure to
do so shall constitute an act of default hereunder. If Tenant performs all
of tenant's obligations hereunder, the Security Deposit, or so much thereof
as has not theretofore been applied by Landlord, shall be returned to Tenant
(or to the last permitted assignee, if any, of Tenant's interest hereunder)
within fifteen (15) days after the end of the Lease. If Landlord sells its
interest in the Premises, Landlord shall deliver this deposit to the
purchaser of Landlord's interest and thereupon be relieved of any further
liability or obligation with respect to the Security Deposit.
SECTION 23. SURRENDER OF PREMISES ON TERMINATION
On the Expiration Date or earlier termination of the Term, Tenant shall
quit and surrender the Premises to the Landlord, broom clean, in good order,
condition and repair as required by Section 10.1, ordinary wear and tear,
fire and other casualties, acts of God or other causes beyond the control of
the Tenant excepted, and Tenant shall comply with the provisions of Section
9.2 of this Lease. Unless Landlord expressly agrees in writing to the
contrary, Tenant shall remove all machinery, equipment, trade fixtures and
materials that Tenant has placed on the Premises and Tenant shall repair any
and all damage to the Premises caused by Tenant's removal of such equipment,
machinery, trade fixtures and materials.
SECTION 24. MISCELLANEOUS
24.1 SUCCESSORS AND ASSIGNS. Subject to the provisions of Section 15
regarding assignment and subleasing by Tenant, the terms, covenants and
conditions contained in this Lease shall bind and inure to the benefit of
Landlord and Tenant and, except as otherwise provided herein, their
respective personal representatives and successors and assigns; provided,
however, that upon the sale, assignment or transfer by Landlord (or by any
subsequent landlord)
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of its interest in the Buildings or the property as owner or lessee,
including any transfer upon or in lieu of foreclosure or by operation of law,
Landlord (or subsequent landlord) shall be relieved from all subsequent
obligations or liabilities under this Lease. Provided that Landlord delivers
the Security Deposit, if any, to its successor, Landlord shall have no
further liability to Tenant with respect thereto.
24.2 CONSTRUCTION. This Lease shall be governed by and construed in
accordance with the laws of the State of California. Any actions or
proceedings brought under this Lease, or with respect to any matter arising
under or out of this Lease, shall be brought and tried only in courts located
in the County of Contra Costa, California (excepting appeal courts).
24.3 INTEGRATION. The terms of this Lease are intended by the parties
as a final expression in their agreement with respect to such terms as are
included in this Lease, and may not be contradicted by evidence of any prior
or contemporaneous agreement, arrangement, understanding or negotiation
(whether oral or written). The parties further intend that this Lease
constitute the complete and exclusive statement of its terms, and no
extrinsic evidence whatsoever may be introduced in any judicial proceeding
involving this Lease. The language in all parts of this Lease shall in all
cases be construed as a whole and in accordance with its fair meaning and not
restricted for or against any party.
24.4 LIGHT, AIR, VIEW, SIGNS, ETC. Tenant covenants and agrees that no
diminution of light, air or view, or any impairment of the visibility of the
Premises from inside or outside the Buildings, by any structure or other
object that may be hereafter erected (whether or not by Landlord) shall
entitle Tenant to any reduction of Rent under this Lease, constitute an
actual or constructive eviction of Tenant, result in any liability of
Landlord to Tenant, or in any other way affect this Lease or Tenant's
obligations hereunder. Landlord shall have the exclusive right to use all
exterior walls, roofs and other portions of the Buildings for signs, notices
and other reasonable promotional purposes. Tenant shall not place or allow
to be placed in, on or about the Buildings any sign or other notice
indicating Tenant's desire to assign this Lease or sublet the Premises.
24.5 HOLDING OVER. If Tenant remains in possession of the Premises
after the expiration of the Term with the express written consent of Landlord
and without executing a new lease, then such holding over shall be deemed a
tenancy from month-to-month, subject to all conditions, provisions and
obligations of this Lease. No holding over by Tenant after the Term shall
operate to extend the Term. In the event of any unauthorized holding over,
Landlord and Tenant agree that Landlord's damages, including any claims for
damages by any other tenant to whom Landlord may have leased all or any part
of Premises, would be difficult to establish. Landlord and Tenant desire to
liquidate the damages payable to Landlord in the event Tenant holds over
after the term without Landlord's consent and therefore agree upon damages
payable by Tenant to Landlord in a daily amount of the monthly Fixed Rent in
effect immediately prior to holding over, which daily amount shall increase
by five percent (5%) per day but in no event more than 100%, such that for
example, on the tenth day, the increase for
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such day would be 50%. Landlord and Tenant agree that the above described
formula to establish damages is fair and reasonable.
24.6 COUNTERPARTS. This Lease may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
24.7 BROKER'S COMMISSION. Landlord shall pay all brokers commissions
payable to the Brokers listed in the Basic Lease Information in connection
with this transaction. Tenant represents and warrants that other than such
Brokers, Tenant has not entered into any agreement or incurred or created any
obligation which might require Landlord to pay any broker's commission,
finder's fee or other commission or fee relating to the leasing of the
Premises, unless disclosed to and accepted by Landlord in writing before the
date hereof, and Tenant shall defend, indemnify and hold harmless Landlord
from and against any claims for any such commissions or fees by anyone
claiming by or though Tenant.
24.8 LANDLORD'S CONSENTS. Unless otherwise expressly provided in this
Lease, all consents and approvals to be given by Landlord may be withheld for
any reason or no reason, at Landlord's sole discretion, and any such action
shall not be deemed inconsistent with any covenant of good faith and fair
dealing otherwise implied by law to be a part of this Lease. Landlord's
failure to respond to a request for consent or approval from tenant with
thirty (30) days (or such other period as may be provided in this Lease)
shall be deemed to constitute the granting of such consent or approval.
24.9 AMENDMENTS. No amendments or modifications of this lease or any
agreements in connection therewith shall be valid unless in writing duly
executed by both Landlord and Tenant.
24.10 CONFIDENTIALITY. Landlord shall keep and maintain as confidential
and shall not disclose to third parties all information, documents and other
data supplied by Tenant to Landlord pursuant to or in connection with this
Lease that Tenant identifies as confidential at the time Tenant provides such
information to Landlord; provided, however, that Landlord may disclose such
information, documents and other data to its counsel and consultants who
agree to keep it confidential and to the extent required by applicable
governmental laws, orders, rules, ordinances and regulations.
24.11 ATTORNEYS' FEES. If either party becomes a party to any
litigation concerning this Lease, the Premises, or the Property by reason of
any act or omission of its authorized representative, the party that causes
the other party to become involved in the litigation shall be liable to the
party involved for reasonable attorneys' fees and court costs incurred by it
in the litigation. If either party commences an action against the other
party arising out of or in connection with this Lease, or institutes any
proceeding in a bankruptcy or similar court which has jurisdiction over the
other party or any or all of its property or assets, the prevailing party
shall be entitled to have and
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recover from the losing party reasonable attorneys' fees and court costs.
"PREVAILING PARTY" within the meaning of this Section 24.11 shall include a
party who dismisses an action for recovery hereunder in exchange for payment
of the sums allegedly due, performance of covenants allegedly breached or
consideration substantially equal to the relief sought in the action.
24.12 NO DISCRIMINATION. There shall be no discrimination against or
segregation of any person or group of persons, on account of race, color,
creed, religion, sex, marital status, national origin, or ancestry, in the
leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of
the Premises, nor shall Tenant or any person claiming under or through
Tenant, establish or permit any such practice of discrimination or
segregation with reference to the selection, location, number, use, or
occupancy, of tenants, lessees, sublessees, subtenants, or vends in the
Premises affecting the Premises. Landlord shall deliver to Tenant a copy of
(a) any Covenants, Conditions and Restrictions affecting the Premises; and
(b) any rules and regulations governing Tenant's use of the Premises. Tenant
hereby acknowledges receipt of the aforementioned documents.
SECTION 25. PARKING AND SIGNAGE
25.1 PARKING. During the Term, Tenant shall have the non-exclusive right
to three (3) parking spaces per 1,000 square feet of the Rentable Area in the
Premises (18 spaces). The parking spaces shall be in the areas designated by
Landlord from time to time for non-exclusive Tenant parking. Tenant shall
abide by any and all reasonable parking regulations and rules applicable to
multiple tenants established from time to time by Landlord.
25.2 SIGNAGE. Tenant shall not affix, paint, erect or inscribe any sign,
projection, awning, or advertisement of any kind to any part of the Premises,
Building or Property, including, without limitation, the inside or outside of
windows or doors, without the written consent of Landlord which shall not be
unreasonably withheld, conditioned or delayed so long as such signage is
consistent with signage generally approved by Landlord for the Property.
SECTION 26. EXPANSION OPTION
26.1 OPTION. Provided this Lease is in full force and effect and Tenant
is not in default hereunder, Tenant shall have the option ("Expansion
Option") from the date of this Lease until May 31, 2000 to lease all and not
part of the adjacent space in the Building currently occupied by NTI,
consisting of approximately 6,912 square feet of space (the "Expansion
Space"), upon Tenant's receipt of written notice from Landlord ("Expansion
Space Notice") stating that the Expansion Space has become available for
lease by Tenant. If Tenant fails to exercise the Expansion Option within
thirty (30) days following Tenant's receipt of the Expansion Space Notice,
the Extension Option shall lapse and be of no further force and effect. NTI's
current lease with Landlord expires on April 30, 1999 with an option by NTI
to extend its lease with Landlord for an additional year. Accordingly, Tenant
acknowledges that the Expansion Space may never become available. TENANT
HEREBY FURTHER ACKNOWLEDGES AND AGREES THAT BY EXERCISING ITS EXPANSION
OPTION HEREUNDER, TENANT SHALL BE DEEMED TO HAVE EXERCISED ITS OPTION TO EXTEND
27
THIS LEASE PURSUANT TO SECTION 27 BELOW FOR AN ADDITIONAL FIVE (5) YEAR TERM
COMMENCING UPON THE EXPIRATION OF THE INITIAL TERM OF THIS LEASE.
26.2 EXPANSION SPACE COMMENCEMENT DATE. The "Expansion Space
Commencement Date" shall occur on the earlier of (i) the date Tenant enters
into occupancy of all or any portion of the Expansion Space for the purpose
of conducting Tenant's business thereon or (ii) the date which shall occur
sixty (60) days after Landlord delivers vacant possession of the Expansion
Space to Tenant. Notwithstanding anything contained herein to the contrary,
(i) Landlord shall not be obligated to lease and deliver the Expansion Space
to Tenant if at the time of Landlord's Expansion Space Notice or if, at or
prior to delivery of the Expansion Space, an Event of Default shall have
occurred and be continuing hereunder and (ii) in the event Landlord shall not
deliver possession of all or any portion of the Expansion Space to Tenant on
or before the Expansion Space Commencement Date for any reason other that the
willful default of Landlord. Landlord shall not be deemed in default of or
otherwise liable to Tenant for any claims, damages or liabilities in
connection therewith and the Term of this Lease with respect to the Expansion
Space shall commence on the date Landlord delivers possession of the
Expansion Space to Tenant; provided however that if the Expansion Space to
Tenant; provided however that if the Expansion Space is not available by
reason of the holding over or the retention of possession by any tenants or
occupants thereof, Landlord shall promptly and diligently take all steps
which are commercially reasonable to obtain possession thereof.
26.3 EXPANSION SPACE TERMS. In the event Tenant exercises its Expansion
Option as provided herein, from and after the Expansion Space Commencement
Date, The Premises shall thereafter include the Expansion Space and this
Lease shall continue on the same terms and conditions except that (i) the
fixed Monthly Rent shall be an amount equal to $19,125,000 and (ii) Tenant's
Share of Operating Expenses and Real Estate Taxes shall increase to 9.75% to
reflect the inclusion of the Expansion Space in the Premises. The Expansion
Space shall be delivered in its "AS IS" condition and Landlord shall have no
obligation to perform any work or alternations in order to prepare the
Expansion Space for Tenant's initial occupancy.
SECTION 27. OPTION TO EXTEND
Provided this Lease is in full force and effect and Tenant is not in
default hereunder, Tenant shall have the right to extend the Term of this
Lease for one (1) five (5) year term ("Extended Term") upon prior written
notice to Landlord given not later than six (6) months prior to the
expiration of the initial Term ("Extension Notice") unless previously
exercised by Tenant under Section 26 of this Lease. It is understood and
agreed that Tenant's submittal of Tenant's Extension Notice shall bind Tenant to
a five (5) year extension of this Lease. The Extended Term shall be on the same
terms and conditions as provided in this Lease, except that (i) Tenant shall
occupy the Premises in its then "AS IS" condition and (ii) if Tenant has not
exercised its Expansion Option in Section 26 above, the Fixed Monthly Rent
for the extended Term shall be as follows:
YEAR FIXED MONTHLY RENT
---- ------------------
January 1, 2001 - $8,807.00
December 31, 2001
January 1, 2002 - $9,071.00
December 31, 2002
January 1, 2003 - $9,343.00
December 31, 2003
January 1, 2004 - $9,623.00
December 31, 2004
January 1, 2005 - $9,912.00
December 31, 2005
In the event Tenant has exercised its Expansion Option in Section 26
above, the Fixed Monthly Rent shall be as follows:
YEAR FIXED MONTHLY RENT
---- ------------------
January 1, 2001 - $19,699.00
December 31, 2001
January 1, 2002 - $20,290.00
December 31, 2002
January 1, 2003 - $20,898.00
December 31, 2003
January 1, 2004 - $21,525.00
December 31, 2004
January 1, 2005 - $22,171.00
December 31, 2005
IN WITNESS WHEREOF, Landlord and Tenant have each caused their duly
authorized representatives to execute this lease on their respective behalf
as of the day and year first above written.
LANDLORD:
MARINA WESTSHORE PARTNERS, LLC,
a California limited liability company
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇
-------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇, Its Manager
TENANT:
QRS CORPORATION,
a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇'▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇'▇▇▇▇▇▇
Title: Chief Operating Officer
EXHIBIT A
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FLOOR PLAN
EXHIBIT B
---------
LEGAL DESCRIPTION
EXHIBIT B
---------
ORDER NO. 19003
The land referred to in this report is situated in the state of California,
County of CONTRA COSTA, and is described as follows:
CITY OF RICHMOND
PARCELS A AND C OF SUBDIVISION N.S. 758-89, FILED OCTOBER 3, 1989, IN BOOK
142 OF PARCEL MAPS, PAGES 36 & 37, CONTRA COSTA COUNTY RECORDS.
EXCEPTING THEREFROM:
EXCEPTING FROM A PORTION OF THE ABOVE DESCRIBED PARCEL:
ALL OIL, GAS AND OTHER HYDROCARBON AND MINERAL SUBSTANCES LYING NOT LESS THAN
500 FEET BELOW THE SURFACE OF SAID LAND, PROVIDED THAT GRANTOR, ITS
SUCCESSORS AND ASSIGNS SHALL NOT HAVE THE RIGHT TO GO UPON THE SURFACE OF
SAID LAND FOR THE PURPOSE OF EXTRACTING SAID OIL, GAS OR OTHER HYDROCARBON
AND MINERAL SUBSTANCES, NOR FOR ANY PURPOSE IN CONNECTION THEREWITH, BUT
SHALL HAVE THE RIGHT TO EXTRACT AND REMOVE SAID OIL, GAS AND OTHER
HYDROCARBON AND MINERAL SUBSTANCE BY MEANS OF SLANT DRILLED ▇▇▇▇▇ OR SIMILAR
METHODS LOCATED ON ADJACENT OR NEARBY LAND OR BY OTHER MEANS WHICH SHALL NOT
REQUIRE ENTRY UPON THE SURFACE OF SAID LAND, AS RESERVED IN THE DEEDS FROM
SANTA FE LAND IMPROVEMENT COMPANY, RECORDED SEPTEMBER 16, 1977, IN BOOK 3506,
PAGES 381 AND 415, OFFICIAL RECORDS.
ALSO EXCEPTING FROM A PORTION OF THE ABOVE DESCRIBED PARCEL:
ALL OIL, GAS, MINERALS AND GEOTHERMAL ENERGY EXISTING 500 FEET BELOW THE
SURFACE OF THE LANDS CONVEYED BY THIS DEED TO THE RICHMOND REDEVELOPMENT
AGENCY, HOWEVER, THIS RESERVATION OF RIGHTS TO SAID OIL, GAS, MINERAL AND
GEOTHERMAL ENERGY SHALL NOT INCLUDE ANY RIGHTS TO UTILIZE THE SURFACE OF THE
LANDS CONVEYED HEREIN FOR ACCESS: THE RESERVED RIGHT TO EXPLOIT SAID OIL,
GAS, MINERAL AND GEOTHERMAL ENERGY IS LIMITED TO SLANT DRILLING OR SIMILAR
METHODS FROM ADJACENT OR NEARBY PROPERTIES WITH SAID DRILLING TO BE AT LEAST
200 FEET BELOW THE SURFACE OF SAID CONVEYED LANDS, AND IN ANY EVENT SUCH
SLANT DRILLING SHALL BE DONE IN A MANNER AND AT SUCH DEPTH AS TO NOT ENDANGER
THE SAFETY OF ANY IMPROVEMENTS ERECTED HEREAFTER UPON THE LANDS CONVEYED
HEREIN, AS EXCEPTED IN THE DEED FROM THE REGENTS OF THE UNIVERSITY OF
CALIFORNIA, A PUBLIC CALIFORNIA CORPORATION, RECORDED MARCH 29, 1979, IN BOOK
9283, OR, PAGE 983.
ASSESSOR'S PARCEL NO. ▇▇▇-▇▇▇-▇▇▇
EXHIBIT C
---------
WORK LETTER
The Work Letter is incorporated into and made a part of that certain
Marina Bay Business Park Office Lease between Marina Westshore Partners, LLC
and QRS Corporation. All initial-capitalized terms used in this Work Letter
and not otherwise defined herein shall have the meanings ascribed to them
elsewhere in the Lease.
ARTICLE 1
GENERAL PROVISIONS
------------------
1.1 TENANT IMPROVEMENTS. Tenant shall plan, design and construct
certain office improvements (the "Tenant Improvements") in accordance with
the provisions of this Work Letter and all other applicable terms and
conditions of the Lease.
1.2 TENANT'S WORK. The planning, design and construction of the Tenant
Improvements are referred to collectively as "Tenant's Work."
1.3 COSTS OF THE WORK. For purposes of this Work Letter, "Costs of the
Work" shall mean and include all: (a) architect's, engineer's and consultants'
fees and costs; (b) deposits, fees and costs for building and other permits,
licenses and approvals; (c) tests and inspections; (d) security; (e) insurance
and bond premiums; (f) utilities; (g) all amounts payable to any contractors,
subcontractors, suppliers and vendors; and (h) all other charges, fees,
expenses and other costs incurred or arising in connection with any
particular work.
1.4 CONSTRUCTION STANDARDS. The Tenant Improvements shall be
constructed by Tenant in a good and workmanlike manner, free from material
defects in workmanship and materials and in accordance with Section 9 of this
Lease and all applicable laws.
ARTICLE 2
IMPROVEMENT PLANS
-----------------
21. PLANS FOR TENANT IMPROVEMENTS. Tenant agrees at Tenant's sole cost and
expense, to perform the Tenant's Work in accordance with drawings,
specifications and other plans necessary for the development, approval and
construction of the Tenant Improvements (collectively, the "Plans")
reasonably approved by Landlord, Landlord shall have the right to reasonably
approve the general contractor for Tenant's Work. Tenant shall submit the
Plans for Tenant's Work to Landlord and shall reimburse Landlord for all
reasonable costs which Landlord may incur in connection with the granting
approval of Tenant's Work. Landlord shall, within thirty (30) days of receipt
of the Plans, approve or disapprove the Plans. In the event of disapproval,
Landlord shall state its reasons for disapproval and the parties thereafter
shall work together in good faith to reach prompt agreement upon
modifications to the Plans. Tenant shall file a notice of completion after
completion of Tenant's Work and provide Landlord with a copy thereof.
2.2 EFFECT OF LANDLORD'S ACCEPTANCE. Tenant acknowledges that
Landlord's review of the Plans are not being undertaken solely for Landlord's
benefit, and Landlord shall not be