LEASE
BY AND BETWEEN
ROTUNDA PARTNERS II,
A CALIFORNIA LIMITED LIABILITY COMPANY
AS LANDLORD
AND
SCIENTIFIC LEARNING CORPORATION,
A DELAWARE CORPORATION
AS TENANT
MARCH 20, 2000
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇
TABLE OF CONTENTS
PAGE
ARTICLE 1 REFERENCE...................................................................................1
1.1 References......................................................................................1
ARTICLE 2 LEASED PREMISES, TERM AND POSSESSION........................................................4
2.1 Demise Of Leased Premises.......................................................................4
2.2 Parking; Right To Use Outside Areas.............................................................4
2.3 Commencement Date And Lease Term................................................................4
2.4 Delivery Of Possession..........................................................................4
2.5 Performance Of Improvements; Acceptance Of Possession...........................................5
2.6 Surrender Of Possession.........................................................................5
ARTICLE 3 RENT, LATE CHARGES AND SECURITY DEPOSITS....................................................5
3.1 Base Monthly Rent...............................................................................5
3.2 Additional Rent.................................................................................5
3.3 Adjustments.....................................................................................6
3.4 Late Charge, And Interest On Rent In Default....................................................7
3.5 Payment Of Rent.................................................................................7
3.6 Prepaid Rent....................................................................................7
3.7 Security Deposit................................................................................8
ARTICLE 4 USE OF LEASED PREMISES AND OUTSIDE AREA.....................................................8
4.1 Permitted Use...................................................................................8
4.2 General Limitations On Use......................................................................8
4.3 Trash Disposal..................................................................................9
4.4 Signs...........................................................................................9
4.5 Compliance With Laws............................................................................9
4.6 Compliance With Insurance Requirements..........................................................9
4.7 Landlord's Right To Enter.......................................................................9
4.8 Environmental Protection.......................................................................10
4.9 Reservations...................................................................................11
ARTICLE 5 REPAIRS, MAINTENANCE, SERVICES AND UTILITIES...............................................11
5.1 Repair And Maintenance.........................................................................11
(a) Tenant's Obligations..................................................................11
(b) Landlord's Obligation.................................................................11
i.
TABLE OF CONTENTS
(CONTINUED)
PAGE
5.2 Utilities......................................................................................11
5.3 Security.......................................................................................11
5.4 Utilities......................................................................................11
5.5 Energy And Resource Consumption................................................................11
5.6 Limitation Of Landlord's Liability.............................................................12
ARTICLE 6 ALTERATIONS AND IMPROVEMENTS...............................................................12
6.1 By Tenant......................................................................................12
6.2 Ownership Of Improvements......................................................................13
6.3 Alterations Required By Law....................................................................13
6.4 Liens..........................................................................................13
ARTICLE 7 ASSIGNMENT AND SUBLETTING BY TENANT........................................................13
7.1 By Tenant......................................................................................13
7.2 Merger, Reorganization, or Sale of Assets......................................................14
7.3 Landlord's Election............................................................................15
7.4 Assignment Consideration And Excess Rentals Defined............................................15
7.5 Payments.......................................................................................15
7.6 Effect Of Landlord's Consent...................................................................15
ARTICLE 8 LIMITATION ON LANDLORD'S LIABILITY AND INDEMNITY...........................................16
8.1 Limitation On Landlord's Liability And Release.................................................16
8.2 Tenant's Indemnification Of Landlord...........................................................16
ARTICLE 9 INSURANCE..................................................................................17
9.1 Tenant's Insurance.............................................................................17
9.2 Landlord's Insurance...........................................................................18
9.3 Mutual Waiver Of Subrogation...................................................................18
ARTICLE 10 DAMAGE TO LEASED PREMISES..................................................................18
10.1 Landlord's Duty To Restore.....................................................................18
10.2 Insurance Proceeds.............................................................................19
10.3 Landlord's Right To Terminate..................................................................19
10.4 Tenant's Right To Terminate....................................................................19
10.5 Tenant's Waiver................................................................................20
10.6 Abatement Of Rent..............................................................................20
ii.
TABLE OF CONTENTS
(CONTINUED)
PAGE
ARTICLE 11 CONDEMNATION...............................................................................20
11.1 Tenant's Right To Terminate....................................................................20
11.2 Landlord's Right To Terminate..................................................................20
11.3 Restoration....................................................................................20
11.4 Temporary Taking...............................................................................20
11.5 Division Of Condemnation Award.................................................................20
11.6 Abatement Of Rent..............................................................................21
11.7 Taking Defined.................................................................................21
ARTICLE 12 DEFAULT AND REMEDIES.......................................................................21
12.1 Events Of Tenant's Default.....................................................................21
12.2 Landlord's Remedies............................................................................22
12.3 Landlord's Default And Tenant's Remedies.......................................................23
12.4 Limitation Of Tenant's Recourse................................................................23
12.5 Tenant's Waiver................................................................................23
ARTICLE 13 GENERAL PROVISIONS.........................................................................23
13.1 Taxes On Tenant's Property.....................................................................23
13.2 Holding Over...................................................................................24
13.3 Subordination To Mortgages.....................................................................24
13.4 Tenant's Attornment Upon Foreclosure...........................................................25
13.5 Mortgagee Protection...........................................................................25
13.6 Estoppel Certificate...........................................................................25
13.7 Tenant's Financial Information.................................................................25
13.8 Transfer By Landlord...........................................................................25
13.9 Force Majeure..................................................................................25
13.10 Notices........................................................................................25
13.11 Attorneys' Fees................................................................................26
13.12 Definitions....................................................................................26
(a) Real Property Taxes...................................................................27
(b) Landlord's Insurance Costs............................................................27
(c) Property Maintenance Costs............................................................27
(d) Property Operating Expenses...........................................................28
iii.
TABLE OF CONTENTS
(CONTINUED)
PAGE
(e) Law...................................................................................28
(f) Lender................................................................................28
(g) Private Restrictions..................................................................28
(h) Rent..................................................................................28
13.13 General Waivers................................................................................28
13.14 Miscellaneous..................................................................................28
ARTICLE 14 CORPORATE AUTHORITY BROKERS AND ENTIRE AGREEMENT...........................................29
14.1 Corporate Authority............................................................................29
14.2 Brokerage Commissions..........................................................................29
14.3 Entire Agreement...............................................................................29
14.4 Landlord's Representations.....................................................................29
ARTICLE 15 OPTIONS TO EXTEND..........................................................................30
15.1 Options........................................................................................30
15.2 Fair Market Rent...............................................................................30
15.3 Determination..................................................................................30
15.4 Arbitration....................................................................................30
15.5 Improvement Allowance..........................................................................31
ARTICLE 16 EXPANSION..................................................................................31
16.1 Expansion Space................................................................................31
16.2 Option Consideration...........................................................................32
16.3 Base Monthly Rent for Expansion Space..........................................................32
16.4 Tenant Improvement Allowance for Expansion Space...............................................32
16.5 Corridor for Expansion Space...................................................................33
ARTICLE 17 RIGHT OF FIRST REFUSAL.....................................................................33
17.1 RIGHT OF FIRST REFUSAL.....................................................................33
Exhibit A SITE PLAN
Exhibit B WORK LETTER
Exhibit C COMMENCEMENT DATE CERTIFICATE
Exhibit D FORM OF ESTOPPEL CERTIFICATE
iv.
LEASE
THIS LEASE, dated March 20, 2000 for reference purposes only, is
made by and between ROTUNDA PARTNERS II, a California limited liability
company ("Landlord") and SCIENTIFIC LEARNING CORPORATION, a Delaware
corporation ("Tenant"), to be effective and binding upon the parties as of
the date the last of the designated signatories to this Lease shall have
executed this Lease (the "Effective Date of this Lease").
ARTICLE 1
REFERENCE
1.1 REFERENCES. All references in this Lease (subject to any further
clarifications contained in this Lease) to the following terms shall have the
following meaning or refer to the respective address, person, date, time
period, amount, percentage, calendar year or fiscal year as below set forth:
Tenant's Address for Notice: PRIOR TO THE COMMENCEMENT DATE:
Scientific Learning Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
AFTER THE COMMENCEMENT DATE:
At the Leased Premises.
Tenant's Representative: General Counsel
Landlord's Address for Notices: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to:
▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Landlord's Representative: ▇▇▇▇ ▇▇▇▇
Email address: ▇▇▇▇▇▇▇▇@▇▇▇.▇▇▇
Phone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
Intended Delivery Date: January 1, 2001
Intended Commencement Date: January 1, 2001
Lease Term: Eight (8) years
Lease Expiration Date: Eight (8) Years from the
Commencement Date, unless
earlier terminated in
accordance with the terms of
this Lease, or extended by
Tenant pursuant to Article 15.
1.
Options to Renew: Two (2) option(s) to renew, each
for a term of five (5) years at
95% of Fair Market Value.
Partial First Month's Prepaid Rent: $50,000, with credit given for
$25,000 paid to Landlord by
Tenant prior to execution of
this Lease (to be applied to the
first month in which Base
Monthly Rent is due)
Tenant's Security Deposit: $400,000, subject to reduction
in accordance with Sec. 3.7
Late Charge Amount: Three Percent (3%) of the
Delinquent Amount
Tenant's Required Liability
Coverage: $2,000,000 Combined Single Limit
Tenant's Broker: NONE
Landlord's Broker: NONE
Property: That certain real property
situated in the City of Oakland,
State of California, improved
with one building, which real
property is shown on the Site
Plan attached hereto as Exhibit
"A" and is commonly known as or
otherwise described as the
Rotunda Building.
Building: That certain building on the
Property in which the Leased
Premises are located commonly
known as ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇.,
▇▇▇▇▇▇▇, ▇▇ (the "Building"),
which Building is shown outlined
on Exhibit "A" hereto. The
Building contains 242,031 square
feet.
Outside Areas: The "Outside Areas" shall
mean all areas which are located
outside of and contiguous to the
Building, as shown the Site Plan
attached as Exhibit A, such as
pedestrian walkways, parking
areas, landscaped area, open
areas and enclosed trash
disposal areas.
Parking Area: The "Parking Area" shall mean
all areas marked as such on the
Site Plan attached as Exhibit A.
Plans: The "Plans" shall mean the
drawings prepared by
Architectural Dimensions
attached as Schedule 1 to the
Work Letter bearing the
following identifying
information: Job No. CC020,
Sheet X-6 dated March 13, 2000,
Sheet X-7 dated March 13, 2000,
Sheet X-8 dated March 13, 2000,
Sheet X-9 dated March 13, 2000,
and Sheet X-11 dated
March 16, 2000.
Leased Premises: The "Leased Premises" shall mean
all the interior space on the
fifth (5th) and sixth (6th)
floors and the seventh (7th)
floor penthouse of the Building,
to consist of approximately
69,483 rentable square feet and
shown on the Plans attached as
Schedule 1 to the Work Letter,
as it may be changed by the
addition of all or any portion
of the Expansion Space, together
with the exclusive right to use
the areas marked "roof" on
Sheets X-8 and X-11 of the
Plans.
2.
Original Build-out Space All the interior space on the
fifth (5th) and sixth (6th)
floors and the seventh (7th)
floor penthouse of the
Building, to consist of
approximately 69,483 rentable
square feet and shown on the
Plans attached as Schedule 1 to
the Work Letter.
Expansion Space The 12,947 rentable square
foot space delineated on Sheet
X-9 of the Plans as "Future
Tenant", as more fully described
in Article 16.
Tenant's Parking Spaces 100 Spaces
Tenant's Percentage Share: The term "Tenant's Percentage
Share" shall mean the percentage
obtained by dividing the
rentable square footage of the
Leased Premises at the time of
calculation by the rentable
square footage of the Building.
Such percentage is currently
estimated to be 34.06%. In the
event that the rentable square
footage of the Leased Premises
is changed, Tenant's Percentage
Share shall be recalculated to
equal the percentage described
in the first sentence of this
paragraph, so that the aggregate
Tenant's Expense Share of all
tenants of the Building shall
equal 100%.
Base Year: Calendar Year 2001
Base Monthly Rent: The term "Base Monthly Rent for
the Original Build-out Space"
shall mean the following:
PERIOD MONTHLY AMOUNT
------ --------------
Months 1-12 $2.33 per
rentable sq. ft.
Commencing with Month 13 of the
Lease Term and at the end of
each 12 month period thereafter
(until the Lease Expiration
Date), Base Monthly Rent for the
Original Build-out Space shall
be increased at a rate of 3% per
annum compounded annually.
The term "Base Monthly Rent for
the Designated Portion of the
Expansion Space" shall mean
$2.17 per rentable square foot,
subject to a 3% annual increase,
compounded annually as described
in Section 16.3.
The term "Base Monthly Rent"
shall be deemed to refer
collectively to the Base Monthly
Rent for the Original Build-out
Space and the Base Monthly Rent
for the Designated Portion of
the Expansion Space.
Permitted Use: General Office, research and
development, marketing, sales
and other related lawful uses.
Exhibits: The term "Exhibits" shall mean
the Exhibits of this Lease which
are described as follows:
Exhibit "A" - Site Plan showing
the Property, the Outside Areas,
the Parking Area and delineating
the Building in which the Leased
Premises are to be located.
3.
Exhibit "B" - Work Letter
Exhibit "C" - Commencement Date
Certificate
Exhibit "D" - Form of Tenant
Estoppel Certificate
ARTICLE 2
LEASED PREMISES, TERM AND POSSESSION
2.1 DEMISE OF LEASED PREMISES. Landlord hereby leases to Tenant and Tenant
hereby leases from Landlord, for the Lease Term and upon the terms and
subject to the conditions of this Lease, that certain interior space
described in Article 1 as the Leased Premises, reserving and excepting to
Landlord the right to sixty-five percent (65%) of all assignment
consideration and excess rentals as provided in Article 7 below. Tenant's
lease of the Leased Premises, together with the appurtenant right to use the
Outside Areas as described in Paragraph 2.2 below, shall be conditioned upon
and be subject to the continuing compliance by Tenant with (i) all the terms
and conditions of this Lease, and (ii) all Laws governing the use of the
Leased Premises and the Property.
2.2 PARKING; RIGHT TO USE OUTSIDE AREAS. As an appurtenant right to Tenant's
right to the use and occupancy of the Leased Premises, Tenant shall have the
right to use the Outside Areas in conjunction with its use of the Leased
Premises solely for the purposes for which they were designated and intended
and for no other purposes whatsoever. Tenant's right to so use the Outside
Areas shall be subject to the limitations on such use as set forth in Article
1 and shall terminate concurrently with any termination of this Lease. Tenant
shall have the nonexclusive right to use 100 parking spaces located in the
Parking Area, at the prevailing rate which is currently (and shall be for the
first twelve months of the term) not more than of $100 per month for each
space, payable concurrently with Base Monthly Rent to either the Landlord,
or, at Landlord's direction, to any entity operating the Parking Area.
Landlord hereby represents, and Tenant acknowledges, that as of the date of
this Lease, construction of the proposed parking garage at ▇▇▇▇ ▇▇▇▇▇▇ and
San Pablo in Oakland, on land owned and controlled by the City of Oakland,
has not begun but has been promised to Landlord by the City of Oakland.
During construction of said parking structure, Landlord shall provide Tenant
with access to no less than the number of parking spaces referred to in
Article 1, which parking spaces will be located no further than one and
one-half blocks from the Building. Landlord shall make all reasonable efforts
to accommodate all of Tenant's parking requests in lots as close to the
Building as possible, and may provide valet parking, at no cost to Tenant, if
sufficient spaces cannot be provided within one and one-half blocks of the
Building. Following completion of the parking structure, Landlord shall
provide no less than the number of parking spaces referred to in Article 1 to
Tenant within such structure.
2.3 COMMENCEMENT DATE AND LEASE TERM. Subject to Paragraph 2.4 below, the
term of this Lease shall begin, and the Commencement Date shall be deemed to
have occurred on the actual Delivery Date, as determined pursuant to Section
2.4 below. The term of this Lease shall in all events end on the Lease
Expiration Date (as set forth in Article 1) unless extended or sooner
terminated in accordance with the terms of this Lease. The Lease Term shall
be that period of time commencing on the Commencement Date and ending on the
Lease Expiration Date (the "Lease Term").
2.4 DELIVERY OF POSSESSION. Landlord shall deliver to Tenant possession of
the Leased Premises upon Substantial Completion of the Improvements as that
term is defined in the Work Letter (defined in Section 2.5) attached hereto
as Exhibit B. The date that the Leased Premises are so delivered to the
Tenant shall be deemed the "Delivery Date." If Landlord is unable to so
deliver possession of the Leased Premises to Tenant in the agreed condition
on or before the Intended Delivery Date, Landlord shall have until the date
that is sixty (60) days after the Intended Delivery Date (the "Delivery Grace
Period") to deliver the Leased Premises. Additionally, the Delivery Grace
Period above set forth shall be extended for such number of days as Landlord
may be delayed in delivering possession of the Leased Premises to Tenant by
reason of the action or inaction of Tenant. If Landlord is unable to deliver
possession of the Leased Premises in the agreed condition to Tenant within
the Delivery Grace Period (including any extension thereof by reason of the
actions or inaction of Tenant), then Tenant shall be entitled to elect either
to (i) receive a credit of two (2) days of free rent for each day that the
Leased Premises are not delivered to Tenant after expiration of the Delivery
Grace Period (including any extension thereof by reason of the actions or
inaction of Tenant), which free rent shall apply to the first months in which
Base Monthly Rent is due or (ii) terminate this Lease, and in the
4.
event of such termination Landlord shall not be liable in damages to Tenant
for any delay. If Tenant elects to receive the credit rather than electing to
terminate this lease, Tenant may not thereafter terminate this Lease based
upon this paragraph.
2.5 PERFORMANCE OF IMPROVEMENTS; ACCEPTANCE OF POSSESSION. Landlord shall,
pursuant to the Work Letter attached to as Exhibit B and made a part of this
Lease (the "Work Letter"), perform the work and make the installations in the
Leased Premises substantially as set forth in the Work Letter (such work and
installations hereinafter referred to as the "Improvements"). It is agreed
that by occupying the Leased Premises, Tenant shall be deemed to have
accepted same and to have acknowledged that the Leased Premises are in the
condition called for hereunder, subject to reasonable punchlist items (to be
identified by Tenant in a written notice to Landlord given within thirty (30)
days of such occupancy) and latent defects.
2.6 SURRENDER OF POSSESSION. Immediately prior to the expiration or upon the
sooner termination of this Lease, Tenant shall remove all of Tenant's
equipment, trade fixtures, furniture, supplies, wall decorations and other
personal property from within the Leased Premises, the Building and the
Outside Areas, and shall vacate and surrender the Leased Premises to Landlord
in as good condition, broom clean, as existed at the Commencement Date,
damage by casualty or condemnation (which events shall be governed by
Articles 10 and 11) and reasonable wear and tear excepted. Except for such
reasonable wear and tear, Tenant shall (i) repair all damage to the Leased
Premises, the exterior of the Building and the Outside Areas caused by
Tenant's removal of Tenant's property, (ii) patch and refinish, to Landlord's
reasonable satisfaction, all penetrations made by Tenant or its employees to
the roof, floor, interior or exterior walls or ceiling of the Leased Premises
and the Building, whether such penetrations were made with Landlord's
approval or not, and (iii) repair all stained or damaged ceiling tiles, wall
coverings and floor coverings if damage was caused by Tenant. Additionally,
to the extent that Landlord shall have notified Tenant in writing at the time
the improvements were completed that it desired to have certain improvements
made by Tenant or at the request of Tenant removed at the expiration or
sooner termination of the Lease, Tenant shall, upon the expiration or sooner
termination of the Lease, remove any such improvements constructed or
installed by Landlord or Tenant and repair all damage caused by such removal;
provided however, Tenant shall not be required to remove the Improvements
installed pursuant to the Work Letter. If the Leased Premises are not
surrendered to Landlord in the condition required by this paragraph at the
expiration or sooner termination of this Lease, Landlord may, at Tenant's
expense, so remove Tenant's signs, property and/or improvements not so
removed and make such repairs and replacements not so made or hire, at
Tenant's expense, independent contractors to perform such work. Tenant shall
be liable to Landlord for all reasonable costs incurred by Landlord in
returning the Leased Premises to the required condition. Tenant shall pay to
Landlord the amount of all reasonable costs so incurred within ten (10) days
of Landlord's billing Tenant for same. Tenant shall indemnify Landlord
against loss or liability resulting from delay by Tenant in surrendering the
Leased Premises, including, without limitation, any claims made by any
succeeding Tenant or any losses to Landlord with respect to lost
opportunities to lease to succeeding tenants.
ARTICLE 3
RENT, LATE CHARGES AND SECURITY DEPOSITS
3.1 BASE MONTHLY RENT.
(a) Commencing on the Commencement Date (as determined pursuant to
Paragraph 2.3 above) and continuing throughout the Lease Term, Tenant shall
pay to Landlord, without prior demand therefor, in advance on the first day
of each calendar month, the amount set forth as "Base Monthly Rent" for the
Original Build-out Space in Article 1, subject to a possible credit in
accordance with Section 7(c) of the Work Letter.
3.2 ADDITIONAL RENT., in addition to the Base Monthly Rent for the Original
Build-out Space, Tenant shall pay to Landlord as additional rent (the
"Additional Rent") the following amounts:
(a) Provided that in no event shall Tenant be responsible for annual
increases in Property Operating Expenses in excess of $0.05 per rentable
square foot of the Leased Premises per month, commencing on January 1, 2002
and continuing thereafter throughout the Lease Term, Tenant's Percentage
Share of any increases in Property Operating Expenses (as defined in
Article 13) incurred by Landlord in excess of the Property Operating Expenses
5.
paid by Landlord in calendar year 2001 (the "Base Year"). Payment shall be
made by whichever of the following methods (or combination of methods) is
(are) from time to time designated by Landlord:
(i) Landlord may ▇▇▇▇ to Tenant, on a periodic basis not more
frequently than monthly, the amount of such expenses (or group of expenses) due
from Tenant, and Tenant shall pay to Landlord the amount due within thirty (30)
days after receipt of a written ▇▇▇▇ therefor from Landlord, and/or
(ii) Landlord may deliver to Tenant Landlord's reasonable
estimate of any given expense (such as Landlord's Insurance Costs or Real
Property Taxes), or group of expenses, which it anticipates will be paid or
incurred for the ensuing calendar or fiscal year, as Landlord may determine,
and Tenant shall pay to Landlord an amount equal to Tenant's Percentage Share
of the excess of such expenses over the amount of such expenses incurred in
the Base Year the estimated amount of such expenses for such year over the in
equal monthly installments during such year with the installments of Base
Monthly Rent.
(b) Landlord's share of the consideration received by Tenant upon
certain assignments and sublettings as required by Article 7.
(c) Any legal fees and costs that Tenant is obligated to pay or
reimburse to Landlord pursuant to Article 13; and
(d) Any amounts due Landlord from Tenant Lease concerning the Expansion
Space pursuant to the Article 16.
(e) Any other charges or reimbursements due Landlord from Tenant
pursuant to the terms of this Lease.
Tenant may cause an audit of Landlord's books and records to determine the
accuracy of Landlord's ▇▇▇▇▇▇▇▇ for Property Operating Expenses under this
Lease, provided Tenant commences such audit within sixty (60) days after
Tenant's receipt of the year-end statement described in Section 3.3 above
setting forth the annual reconciliation of the Property Operating Expenses or
any change in estimated monthly expenses under Section 3.2(a)(iii) above. If
such audit reveals that the Landlord overcharged Tenant for Property
Operating Expenses for any given year, then Landlord shall pay to Tenant the
excess. If such audit reveals a discrepancy of more than three (3%) percent
of the actual amount of any Property Operating Expenses charges, then
Landlord shall pay the cost of the audit.
3.3 ADJUSTMENTS.
(a) If Landlord shall have elected to ▇▇▇▇ Tenant for Tenant's
Percentage Share of increases in the Property Operating Expenses over the
Base Year (or any group of such expenses) on an estimated basis in accordance
with the provisions of Paragraph 3.2(a)(iii) above, Landlord shall furnish to
Tenant within three months following the end of the applicable calendar or
fiscal year, as the case may be, a statement setting forth (i) the amount of
such expenses paid or incurred during the just ended calendar or fiscal year,
as appropriate, and (ii) the amount that Tenant has paid to Landlord for
credit against such expenses for such period. If Tenant shall have paid more
than its obligation for such expenses for the stated period, Landlord shall,
at its election, either (i) credit the amount of such overpayment toward the
next ensuing payment or payments of Additional Rent that would otherwise be
due or (ii) refund in cash to Tenant the amount of such overpayment within
thirty (30) days after conclusion of the reconciliation. If such year-end
statement shall show that Tenant did not pay its obligation for such expenses
in full, then Tenant shall pay to Landlord the amount of such underpayment
within ten days from Landlord's billing of same to Tenant. The provisions of
this Paragraph shall survive the expiration or sooner termination of this
Lease.
(b) If the occupancy of the Building during any part of any
expense year (including the Base Year) is less than 95%, Landlord shall make
an appropriate adjustment of the variable components of Property Operating
Expenses for that expense year, as reasonably determined by Landlord using
sound accounting and management principles, to determine the amount of
Property Operating Expenses that would have been incurred had the Building
been 95% occupied. This amount shall be considered to have been the amount of
Property Operating Expenses for that expense year. For purposes of this
paragraph, "variable components" include only those component expenses that
are affected by variations in occupancy levels.
6.
(c) Base Year Property Operating Expenses shall be
adjusted as follows:
(i) If Landlord incurs expenses associated with or
relating to separate items, categories or subcategories of Property Operating
Expenses that were not part of Property Operating Expenses during the Base
Year or a part of Property Operating Expenses for only a portion of the Base
Year, Property Operating Expenses for the Base Year shall be considered to be
increased by the amounts that Landlord would have incurred during the Base
Year with respect to such expenses had these separate items, categories or
subcategories of Property Operating Expenses been included in the Property
Operating Expenses during the entire Base Year;
(ii) If any portion of the Building is covered by a
warranty at anytime during the Base Year, Property Operating Expenses for the
Base Year shall be considered to be increased by the amount that Landlord
would have incurred during the Base Year with respect to the items or matters
covered by the warranty had the warranty not been effective during the Base
Year; and
(iii) Any additional annual premium resulting from any
new forms of insurance, any increase in insurance limits or coverages, or any
decrease in deductibles in any year after the Base Year shall be considered
to be included in Property Operating Expenses for the Base Year.
3.4 LATE CHARGE, AND INTEREST ON RENT IN DEFAULT. Tenant acknowledges that
the late payment by Tenant of any monthly installment of Base Monthly Rent or
any Additional Rent will cause Landlord to incur certain costs and expenses
not contemplated under this Lease, the exact amounts of which are extremely
difficult or impractical to fix. Such costs and expenses will include without
limitation, administration and collection costs and processing and accounting
expenses. Therefor, if any installment of Base Monthly Rent is not received
by Landlord from Tenant when the same becomes due, Tenant shall immediately
pay to Landlord a late charge in an amount equal to the amount set forth in
Article 1 as the "Late Charge Amount," and if any Additional Rent is not
received by Landlord when the same becomes due, Tenant shall immediately pay
to Landlord a late charge in an amount equal to 3% of the Additional Rent not
so paid; provided, however, that once but only once in any twelve (12) month
period during the Lease Term, Tenant shall be entitled to written notice of
non-receipt of Base Monthly Rent or Additional Rent from Landlord, and Tenant
shall not be liable for any Late Charge Amount or other late charge hereunder
if such installment of Base Monthly Rent or Additional Rent is received by
Landlord within ten (10) days after Tenant's receipt of such notice from
Landlord. Landlord and Tenant agree that this late charge represents a
reasonable estimate of such costs and expenses and is fair compensation to
Landlord for the anticipated loss Landlord would suffer by reason of Tenant's
failure to make timely payment. In no event shall this provision for a late
charge be deemed to grant to Tenant a grace period or extension of time
within which to pay any rental installment or prevent Landlord from
exercising any right or remedy available to Landlord upon Tenant's failure to
pay each rental installment due under this Lease when due, including the
right to terminate this Lease. If any rent remains delinquent for a period in
excess of 10 calendar days after notice from Landlord, then, in addition to
such late charge, Tenant shall pay to Landlord interest on any rent that is
not so paid from said tenth day at the then maximum rate of interest not
prohibited or made usurious by Law until paid.
3.5 PAYMENT OF RENT. Except as specifically provided otherwise in this
Lease, all rent shall be paid in lawful money of the United States, without
any abatement, reduction or offset for any reason whatsoever, to Landlord at
such address as Landlord may designate from time to time. Tenant's obligation
to pay Base Monthly Rent and all Additional Rent shall be appropriately
prorated at the commencement and expiration of the Lease Term. The failure by
Tenant to pay any Additional Rent as required pursuant to this Lease when due
shall be treated the same as a failure by Tenant to pay Base Monthly Rent
when due, and Landlord shall have the same rights and remedies against Tenant
as Landlord would have had Tenant failed to pay the Base Monthly Rent when
due.
3.6 PREPAID RENT. Tenant shall, upon execution of this Lease, pay to
Landlord the amount set forth in Article 1 as "Partial First Month's Prepaid
Rent" as prepayment of rent for credit against the first payment of Base
Monthly Rent due hereunder. Tenant shall, within ten (10) days following
Tenant's approval of the final plans and specifications for the Improvements,
pay to Landlord the balance of the first month's rent for the Original
Build-out Space and the Expansion Space.
7.
3.7 SECURITY DEPOSIT.
(a) Within ten (10) days following Tenant's approval of the final plans
and specifications for the Improvements, Tenant shall deposit with Landlord the
amount set forth in Article 1 as the "Security Deposit" as security for the
performance by Tenant of the terms of this Lease to be performed by Tenant, and
not as prepayment of rent.
(b) Landlord may apply such portion or portions of the Security
Deposit as are reasonably necessary for the following purposes: (i) to remedy
any default by Tenant in the payment of Base Monthly Rent or Additional Rent
or a late charge or interest on defaulted rent, or any other monetary payment
obligation of Tenant under this Lease; (ii) to repair damage to the Leased
Premises, the Building or the Outside Areas caused or permitted to occur by
Tenant; (iii) to clean and restore and repair the Leased Premises, the
Building or the Outside Areas following their surrender to Landlord if not
surrendered in the condition required pursuant to the provisions of Article
2, and (iv) to remedy any other default of Tenant to the extent permitted by
Law including, without limitation, paying in full on Tenant's behalf any sums
claimed by materialmen or contractors of Tenant to be owing to them by Tenant
for work done or improvements made at Tenant's request to the Leased
Premises. In this regard, Tenant hereby waives any restriction on the uses to
which the Security Deposit may be applied as contained in Section 1950.7(c)
of the California Civil Code and/or any successor statute. In the event the
Security Deposit or any portion thereof is so used, Tenant shall pay to
Landlord, promptly upon demand, an amount in cash sufficient to restore the
Security Deposit to the full original sum or shall replenish the letter of
credit, if applicable. Landlord shall not be deemed a trustee of the Security
Deposit. Landlord may use the Security Deposit in Landlord's ordinary
business and shall not be required to segregate it from Landlord's general
accounts. Tenant shall not be entitled to any interest on any cash Security
Deposit held by Landlord. If Landlord transfers the Building or the Property
during the Lease Term, Landlord may pay the Security Deposit to any
subsequent owner in conformity with the provisions of Section 1950.7 of the
California Civil Code and/or any successor statute, in which event the
transferring landlord shall be released from all liability for the return of
the Security Deposit.
(c) Provided Tenant has not been in default beyond any applicable
notice and cure period, on the first day of the eighteenth calendar month of
the Lease Term, the amount of the Security Deposit shall be reduced to Three
Hundred Thousand Dollars ($300,000), and Landlord shall promptly return to
Tenant the sum of One Hundred Thousand Dollars ($100,000).
ARTICLE 4
USE OF LEASED PREMISES AND OUTSIDE AREA
4.1 PERMITTED USE. Tenant shall be entitled to use the Leased Premises
solely for the "Permitted Use" as set forth in Article 1 and for no other
purpose whatsoever. Tenant shall have the right to vacate the Leased Premises
at any time during the Term of this Lease, provided Tenant maintains the
Leased Premises in the same condition as if fully occupied and as otherwise
required by the terms of this Lease. Tenant shall have the right to use the
Outside Areas in conjunction with its Permitted Use of the Leased Premises
solely for the purposes for which they were designed and intended and for no
other purposes whatsoever.
4.2 GENERAL LIMITATIONS ON USE. Tenant shall not do or permit anything to be
done in or about the Leased Premises, the Building, the Outside Areas or the
Property which does or could (i) jeopardize the structural integrity of the
Building or (ii) cause damage to any part of the Leased Premises, the
Building, the Outside Areas or the Property. Tenant shall not operate any
equipment within the Leased Premises which does or could (i) injure, vibrate
or shake the Leased Premises or the Building, (ii) damage, overload or impair
the efficient operation of any electrical, plumbing, heating, ventilating or
air conditioning systems within or servicing the Leased Premises or the
Building, or (iii) damage or impair the efficient operation of the sprinkler
system (if any) within or servicing the Leased Premises or the Building.
Tenant shall not (i) install any equipment or antennas on or make any
penetrations of the exterior walls or roof of the Building or (ii) affix any
equipment or make any penetrations or cuts in the floors, ceiling or walls of
the Leased Premises, without Landlord's prior written consent, which consent
shall not be
8.
unreasonably withheld; provided, however, that it shall be reasonable for
Landlord to withhold its consent if Tenant's proposed installations or
penetrations impact the structural integrity of the Building. Tenant shall
not place any loads upon the floors, walls, ceiling or roof systems which
could endanger the structural integrity of the Building or damage its floors,
foundations or supporting structural components. Tenant shall not place any
explosive, flammable or harmful fluids or other waste materials in the
drainage systems of the Leased Premises, the Building, the Outside Areas or
the Property. Tenant shall not drain or discharge any fluids in the
landscaped areas or across the paved areas of the Property. Tenant shall not
use any of the Outside Areas for the storage of its materials, supplies,
inventory or equipment and all such materials, supplies, inventory or
equipment shall at all times be stored within the Leased Premises. Tenant
shall not commit nor permit to be committed any waste in or about the Leased
Premises, the Building, the Outside Areas or the Property.
4.3 TRASH DISPOSAL. Landlord shall provide trash bins or other adequate
garbage disposal facilities within the trash enclosure areas provided or
permitted by Landlord outside the Leased Premises sufficient for the interim
disposal of all of its trash, garbage and waste. All such trash, garbage and
waste temporarily stored in such areas shall be stored in such a manner so
that it is not visible from outside of such areas, and Landlord shall cause
such trash, garbage and waste to be regularly removed from the Property.
Tenant shall keep the Leased Premises in a clean, safe and neat condition and
keep the Outside Areas (except the trash enclosure areas) free and clear of
all of Tenant's trash, garbage, waste and/or boxes, pallets and containers
containing same at all times.
4.4 SIGNS. Other than business identification signs allowed pursuant to this
Section, Tenant shall not place or install on or within any portion of the
Leased Premises, the exterior of the Building, the Outside Areas or the
Property any sign, advertisement, banner, placard, or picture which is
visible from the exterior of the Leased Premises. Subject to Landlord's prior
written consent, which shall not be unreasonably withheld, and subject to
approval by the City of Oakland, the National Park Service and the California
State Historic Preservation Office, Tenant shall have the right to install an
illuminated business identification blade sign on the Building. Landlord
shall cooperate with Tenant's efforts to obtain approval from the City of
Oakland for an illuminated sign. Any such sign shall be installed at Tenant's
sole cost and expense and only in strict compliance with Landlord's approval
(which shall not be unreasonably withheld), and all Laws and all requirements
of the City of Oakland, using a person approved by Landlord to install same.
4.5 COMPLIANCE WITH LAWS. Tenant shall abide by and shall promptly observe
and comply with, at its sole cost and expense, all Laws respecting the use
and occupancy of the Leased Premises, the Building, the Outside Areas or the
Property including, without limitation, all Laws governing the use and/or
disposal of Hazardous Materials (except that Tenant shall not be responsible
for any Hazardous Materials at the Leased Premises, the Building, the Outside
Areas or the Property not introduced by Tenant, its agents, employees or
invitees), and shall defend with competent counsel, indemnify and hold
Landlord harmless from any claims, damages or liability resulting from
Tenant's failure to so abide, observe, or comply. Tenant's obligations
hereunder shall survive the expiration or sooner termination of this Lease.
4.6 COMPLIANCE WITH INSURANCE REQUIREMENTS. With respect to any insurance
policies required or permitted to be carried by Landlord in accordance with
the provision of this Lease, copies of which have been or will, upon Tenant's
written request therefor, be provided to Tenant, Tenant shall not conduct nor
permit any other person to conduct any activities nor keep, store or use (or
allow any other person to keep, store or use) any item or thing within the
Leased Premises, the Building, the Outside Areas or the Property which (i) is
prohibited under the terms of any such policies, (ii) could result in the
termination of the coverage afforded under any of such policies, (iii) could
give to the insurance carrier the right to cancel any of such policies, or
(iv) could cause an increase in the rates (over standard rates) charged for
the coverage afforded under any of such policies. Tenant shall comply with
all requirements of any insurance company, insurance underwriter, or Board of
Fire Underwriters which are necessary to maintain, at standard rates, the
insurance coverages carried by either Landlord or Tenant pursuant to this
Lease.
4.7 LANDLORD'S RIGHT TO ENTER. Landlord and its agents shall have the right
to enter the Leased Premises during normal business hours after giving Tenant
reasonable notice and subject to Tenant's reasonable security measures for
the purpose of (i) inspecting the same; (ii) showing the Leased Premises to
prospective purchasers, mortgagees or tenants; (iii) making necessary
alterations approved by Tenant, additions or repairs; (iv) posting notices,
and (v) performing any of Tenant's obligations when Tenant has failed to do
so beyond any applicable notice and cure
9.
period. Landlord shall have the right to enter the Leased Premises during
normal business hours and during all reasonable times, subject to Tenant's
reasonable security measures, for purposes of supplying any maintenance or
services agreed to be supplied by Landlord. Landlord shall have the right to
enter the Outside Areas during normal business hours for purposes of (i)
inspecting the exterior of the Building and the Outside Areas; (ii) posting
notices of nonresponsibility (and for such purposes Tenant shall provide
Landlord at least thirty days' prior written notice of any work to be
performed on the Leased Premises); and (iii) supplying any services to be
provided by Landlord. Any entry into the Leased Premises or the Outside Areas
obtained by Landlord in accordance with this paragraph shall not under any
circumstances be construed or deemed to be a forcible or unlawful entry into,
or a detainer of, the Leased Premises, or an eviction, actual or constructive
of Tenant from the Leased Premises or any portion thereof. In exercising its
rights under this Section, Landlord shall use commercially reasonable efforts
to minimize interference with Tenant's use of the Leased Premises and the
Outside Areas.
4.8 ENVIRONMENTAL PROTECTION. Tenant's obligations under this Section shall
survive the expiration or termination of this Lease.
(a) As used herein, the term "Hazardous Materials" shall mean any
toxic or hazardous substance, material or waste or any pollutant or
infectious or radioactive material, including but not limited to those
substances, materials or wastes regulated now or in the future under any of
the following statutes or regulations and any and all of those substances
included within the definitions of "hazardous substances," "hazardous
materials," "hazardous waste," "hazardous chemical substance or mixture,"
"imminently hazardous chemical substance or mixture," "toxic substances,"
"hazardous air pollutant," "toxic pollutant," or "solid waste" in the (a)
Comprehensive Environmental Response, Compensation and Liability Act of 1990
("CERCLA" or "Superfund"), as amended by the Superfund Amendments and
Reauthorization Act of 1986 ("▇▇▇▇"), 42 U.S.C. Section 9601 ET SEQ., (b)
Resource Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C. Section
6901 ET SEQ., (c) Federal Water Pollution Control Act ("FSPCA"), 33 U.S.C.
Section 1251 ET SEQ., (d) Clean Air Act ("CAA"), 42 U.S.C. Section 7401 ET
SEQ., (e) Toxic Substances Control Act ("TSCA"), 14 U.S.C. Section 2601 ET
SEQ., (f) Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, ET
SEQ., (g) ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇-▇▇▇▇▇▇ Hazardous Substance Account Act
("California Superfund"), Cal. Health & Safety Code Section 25300 ET SEQ.,
(h) California Hazardous Waste Control Act, Cal. Health & Safety code Section
25100 ET SEQ., (i) ▇▇▇▇▇▇-Cologne Water Quality Control Act ("▇▇▇▇▇▇-Cologne
Act"), Cal. Water Code Section 13000 ET SEQ., (j) Hazardous Waste Disposal
Land Use Law, Cal. Health & Safety codes Section 25220 ET SEQ., (k) Safe
Drinking Water and Toxic Enforcement Act of 1986 ("Proposition 65"), Cal.
Health & Safety code Section 25249.5 ET SEQ., (l) Hazardous Substances
Underground Storage Tank Law, Cal. Health & Safety code Section 25280 ET
SEQ., (m) Air Resources Law, Cal. Health & Safety Code Section 39000 ET SEQ.,
and (n) regulations promulgated pursuant to said laws or any replacement
thereof, or as similar terms are defined in the federal, state and local
laws, statutes, regulations, orders or rules. Hazardous Materials shall also
mean any and all other biohazardous wastes and substances, materials and
wastes which are, or in the future become, regulated under applicable Laws
for the protection of health or the environment, or which are classified as
hazardous or toxic substances, materials or wastes, pollutants or
contaminants, as defined, listed or regulated by any federal, state or local
law, regulation or order or by common law decision, including, without
limitation, (i) trichloroethylene, tetrachloroethylene, perchloroethylene and
other chlorinated solvents, (ii) any petroleum products or fractions thereof,
(iii) asbestos, (iv) polychlorinted biphenyls, (v) flammable explosives, (vi)
urea formaldehyde, (vii) radioactive materials and waste, and (viii)
materials and wastes that are harmful to or may threaten human health,
ecology or the environment.
(b) Notwithstanding anything to the contrary in this Lease, Tenant,
at its sole cost, shall comply with all Laws relating to the storage, use and
disposal of Hazardous Materials by Tenant, its subtenants, their respective
agents, employees, contractors or invitees (collectively, the "Tenant
Parties"). Tenant shall not store, use or dispose of any Hazardous Materials
except for diminimus amounts typically used in offices and/or those Hazardous
Materials listed in a Hazardous Materials management plan ("HMMP") which
Tenant shall deliver to Landlord upon execution of this Lease and update at
least annually with Landlord ("Permitted Materials") which may be used,
stored and disposed of provided (i) such Permitted Materials are used,
stored, transported, and disposed of in strict compliance with applicable
laws, (ii) such Permitted Materials shall be limited to the materials listed
on and may be used only in the quantities specified in the HMMP, and (iii)
Tenant shall provide Landlord with copies of all material safety data sheets
and other documentation required under applicable Laws in connection with
Tenant's use of Permitted Materials as and when such documentation is
provided to any regulatory authority having jurisdiction, in no event shall
Tenant cause or permit to be discharged into the plumbing or sewage system of
the Building or onto the land underlying or adjacent to the Building any
Hazardous Materials. Tenant shall be solely responsible for
10.
and shall defend, indemnify, and hold Landlord and its agents harmless from
and against all claims, costs and liabilities, including attorneys' fees and
costs, arising out of or in connection with Tenant's storage, use and/or
disposal of Hazardous Materials. If the presence of Hazardous Materials on
the Leased Premises caused or permitted by Tenant results in contamination or
deterioration of water or soil, then Tenant shall promptly take any and all
action necessary to clean up such contamination as required by Law, but the
foregoing shall in no event be deemed to constitute permission by Landlord to
allow the presence of such Hazardous Materials.
4.9 RESERVATIONS. Landlord reserves the right from time to time to grant,
without the consent or joinder of Tenant, such easements, rights of way and
dedications that Landlord deems necessary, and to cause the recordation of
parcel maps and covenants, conditions and restrictions, so long as such
easements, rights of way, dedications and covenants, conditions and
restrictions do not materially and adversely affect the use of the Leased
Premises by Tenant, materially and adversely affect Tenant's parking rights,
and do not prohibit any Permitted Use. Tenant agrees to execute any documents
reasonably request by Landlord to effectuate any such easement rights,
dedications, maps or covenants, conditions and restrictions.
ARTICLE 5
REPAIRS, MAINTENANCE, SERVICES AND UTILITIES
5.1 REPAIR AND MAINTENANCE. Except in the case of damage to or destruction of
the Leased Premises, the Building, the Outside Areas or the Property caused by
an act of God or other peril, in which case the provisions of Article 10 shall
control, the parties shall have the following obligations and responsibilities
with respect to the repair and maintenance of the Leased Premises, the Building,
the Outside Areas, and the Property.
(a) TENANT'S OBLIGATIONS. Tenant shall, at all times during the
Lease Term and at its sole cost and expense, continuously keep and maintain
the Leased Premises, excluding all Improvements, but including alterations,
fixtures and furnishings, in good order, condition and repair, subject to the
provisions of this Article 5 and Article 10. At Landlord's option, if Tenant
fails to repair and maintain within a reasonable time following Landlord's
notice to Tenant that such repair and maintenance is necessary, Landlord may
make such repair and maintenance. Within thirty (30) days of its receipt of
Landlord's invoice, Tenant shall pay to Landlord Landlord's out-of-pocket
costs incurred in connection with such repair and maintenance.
(b) LANDLORD'S OBLIGATION. Landlord shall at its sole cost and
expense, (i) regularly clean and at all times during the Lease Term, maintain
in good condition and repair all portions of the Property (including the
Leased Premises) except those required to be maintained by Tenant pursuant to
Section 5.1(a) above.
5.2 UTILITIES. Landlord shall provide at its sole cost and expense, adequate
gas, water and electricity to the Leased Premises, provided that if Tenant
requires HVAC after normal business hours (which shall be from 8:00 a.m. to
7:00 p.m., Monday through Friday, and from 9:00 a.m. to 1:00 p.m. on
Saturdays) Landlord may charge Tenant $40.00 for the first hour for each zone
for which after hours HVAC is requested, and $15.00 for each additional hour
for each zone. Tenant shall be responsible for arranging for telephone
service n Tenant's own name, at Tenant's sole cost and expense.
5.3 SECURITY. Landlord shall provide, at its sole cost and expense, a
security guard service, twenty four hours a day, seven days a week, to
provide security for the Leased Premises, the Building, the Outside Areas and
the Property. In addition, Landlord, at its sole cost and expense, shall
provide escort services from the Leased Premises to parking spaces provided
hereunder, if requested to do so by Tenant, but only on Monday through Friday
after 7:00 p.m.
5.4 UTILITIES. Landlord shall provide at its sole cost and expense, adequate
janitorial services to the Leased Premises, Monday through Friday, consistent
with customary and reasonable janitorial practices in class A office
buildings in the San Francisco Bay area.
5.5 ENERGY AND RESOURCE CONSUMPTION. Landlord may voluntarily cooperate in a
reasonable manner with the efforts of governmental agencies and/or utility
suppliers in reducing energy or other resource consumption within the
Property. Tenant shall not be entitled to terminate this Lease or to any
reduction in or abatement of rent by
11.
reason of such compliance or cooperation. Tenant agrees at all times to
cooperate fully with Landlord and to abide by all reasonable rules
established by Landlord (i) in order to maximize the efficient operation of
the electrical, heating, ventilating and air conditioning systems and all
other energy or other resource consumption systems with the Property and/or
(ii) in order to comply with the requirements and recommendations of utility
suppliers and governmental agencies regulating the consumption of energy
and/or other resources.
5.6 LIMITATION OF LANDLORD'S LIABILITY. Landlord shall not be liable to
Tenant for injury to Tenant, its employees, agents, invitees or contractors,
damage to Tenant's property or loss of Tenant's business or profits, nor
shall Tenant be entitled to terminate this Lease or to any reduction in or
abatement of rent by reason of (i) Landlord's failure to provide security
services or systems within the Property for the protection of the Leased
Premises, the Building or the Outside Areas, or the protection of Tenant's
property or Tenant's employees, invitees, agents or contractors, or (ii)
Landlord's failure to perform any maintenance or repairs to the Leased
Premises, the Building, the Outside Areas or the Property until Tenant shall
have first notified Landlord, in writing, of the need for such maintenance or
repairs, and then only after Landlord shall have had a reasonable period of
time following its receipt of such notice within which to perform such
maintenance or repairs (not to exceed thirty (30) days), or (iii) any
failure, interruption, rationing or other curtailment in the supply of water,
electric current, gas or other utility service to the Leased Premises, the
Building, the Outside Areas or the Property from whatever cause (other than
to the extent caused by Landlord's negligence or willful misconduct), or (iv)
the unauthorized intrusion or entry into the Leased Premises by third parties
(other than Landlord).
ARTICLE 6
ALTERATIONS AND IMPROVEMENTS
6.1 BY TENANT. This provision refers to alterations made to the Leased
Premises after Tenant's initial occupancy of the Leased Premises, and does
not pertain to the construction of the Improvements, which is governed by the
attached Work Letter. Tenant shall not make any alterations to or
modifications of the Leased Premises or construct any improvements within the
Leased Premises until Landlord shall have first approved, in writing, the
plans and specifications therefor, which approval shall not be unreasonably
withheld or delayed. Landlord's approval shall be deemed given if not denied
by Landlord in a written notice to Tenant delivered within fifteen (15) days
following receipt of Tenant's written request. Tenant's written request shall
also contain a request for Landlord to elect whether or not it will require
Tenant to remove the subject alterations, modifications or improvements at
the expiration or earlier termination of this Lease. If such additional
request is not included, Landlord may make such election at the expiration or
earlier termination of this Lease (and for purposes of Tenant's removal
obligations set forth in Section 2.6 above, Landlord shall be deemed to have
made the election at the time the alterations, modifications or improvements
were completed). All modifications, alterations or improvements, once
approved by Landlord, shall be made, constructed or installed by Tenant at
Tenant's expense (including all permit fees and governmental charges related
thereto), using a licensed contractor first approved by Landlord, in
substantial compliance with the Landlord-approved plans and specifications
therefor. All work undertaken by Tenant shall be done in accordance with all
Laws and in a good and workmanlike manner using new materials of good
quality. Tenant shall not commence the making of any such modifications or
alterations or the construction of any such improvements until (i) all
required governmental approvals and permits shall have been obtained, (ii)
all requirements regarding insurance imposed by this Lease have been
satisfied, (iii) Tenant shall have given Landlord at least fifteen (15) days
prior written notice of its intention to commence such work so that Landlord
may post and file notices of non-responsibility, and (iv) if requested by
Landlord, Tenant shall have obtained contingent liability and broad form
builder's risk insurance in an amount satisfactory to Landlord in its
reasonable discretion to cover any perils relating to the proposed work not
covered by insurance carried by Tenant pursuant to Article 9. In no event
shall Tenant make any modification, alterations or improvements whatsoever to
the Outside Areas or the exterior or structural components of the Building
including, without limitation, any cuts or penetrations in the floor, roof or
exterior walls of the Leased Premises (except to the extent Tenant has
obtained Landlord's approval pursuant to Section 4.2). As used in this
Article, the term "modifications, alterations and/or improvements" shall
include, without limitation, the installation of additional electrical
outlets, overhead lighting fixtures, drains, sinks, partitions, doorways, or
the like. Notwithstanding the foregoing, Tenant, without Landlord's prior
written consent, shall be permitted to make non-structural alterations to the
Building, provided that: (a) such alterations do not exceed $7,500
individually, (b) Tenant shall timely provide Landlord the notice required,
(c) Tenant shall notify Landlord in writing within thirty (30) days of
completion of the alteration and deliver to Landlord a set of the plans and
12.
specifications therefor, either "as built" or marked to show construction
changes made, and (d) Tenant shall, upon Landlord's request, remove the
alteration at the termination of the Lease and restore the Leased Premises to
their condition prior to such alteration.
6.2 OWNERSHIP OF IMPROVEMENTS. All modifications, alterations and
improvements made or added to the Leased Premises by Tenant (other than
Tenant's inventory, equipment, movable furniture, wall decorations and trade
fixtures) shall be deemed real property and a part of the Leased Premises,
but shall remain the property of Tenant during the Lease. Any such
modifications, alterations or improvements, once completed, shall not be
altered or removed from the Leased Premises during the Lease Term without
Landlord's written approval first obtained in accordance with the provisions
of Paragraph 6.1 above. At the expiration or sooner termination of this
Lease, all such modifications, alterations and improvements other than
Tenant's inventory, equipment, movable furniture, wall decorations and trade
fixtures, shall automatically become the property of Landlord and shall be
surrendered to Landlord as part of the Leased Premises as required pursuant
to Article 2, unless Landlord shall require Tenant to remove any of such
modifications, alterations or improvements in accordance with the provisions
of Article 2, in which case Tenant shall so remove same. Landlord shall have
no obligations to reimburse Tenant for all or any portion of the cost or
value of any such modifications, alterations or improvements so surrendered
to Landlord. All modifications, alterations or improvements which are
installed or constructed on or attached to the Leased Premises by Landlord
and/or at Landlord's expense shall be deemed real property and a part of the
Leased Premises and shall be property of Landlord. All lighting, plumbing,
electrical, heating, ventilating and air conditioning fixtures, partitioning,
window coverings, wall coverings and floor coverings installed by Tenant
shall be deemed improvements to the Leased Premises and not trade fixtures of
Tenant. Landlord shall have no lien or interest whatsoever in any of Tenant's
property or equipment located in the Leased Premises or elsewhere, and
Landlord waives any such liens and interests.
6.3 ALTERATIONS REQUIRED BY LAW. Tenant shall make all modifications,
alterations and improvements to the Leased Premises, at its sole cost, that
are required by any Law because of (i) Tenant's use or occupancy of the
Leased Premises, (ii) Tenant's application for any permit or governmental
approval, or (iii) Tenant's making of any modifications, alterations or
improvements to or within the Leased Premises. If Landlord shall, at any time
during the Lease Term, be required by any governmental authority to make any
modifications, alterations or improvements to the Building or the Property,
the cost incurred by Landlord in making such modifications, alterations or
improvements, including interest at a rate equal to the greater of (a) 12%,
or (b) the sum of that rate quoted by ▇▇▇▇▇ Fargo Bank, N.T. & S.A. from time
to time as its prime rate, plus two percent (2%) ("▇▇▇▇▇ Prime Plus Two")
(but in no event more than the maximum interest rate permitted by law), shall
be amortized by Landlord over the useful life of such modifications,
alterations or improvements, as determined in accordance with generally
accepted accounting principles, and the monthly amortized cost of such
modifications, alterations and improvements as so amortized shall be
considered a Property Maintenance Cost.
6.4 LIENS. Tenant shall keep the Property and every part thereof free from
any lien, and shall pay when due all bills arising out of any work performed,
materials furnished, or obligations incurred by Tenant, its agents, employees
or contractors relating to the Property. If any such claim of lien is
recorded against Tenant's interest in this Lease, the Property or any part
thereof, Tenant shall bond against, discharge or otherwise cause such lien to
be entirely released within ten days after the same has been recorded.
Tenant's failure to do so shall be conclusively deemed a material default
under the terms of this Lease.
ARTICLE 7
ASSIGNMENT AND SUBLETTING BY TENANT
7.1 BY TENANT. Except in connection with a Permitted Transfer, Tenant shall
not sublet the Leased Premises or any portion thereof or assign its interest
in this Lease, whether voluntarily or by operation of Law, without Landlord's
prior written consent which shall not be unreasonably withheld. Any attempted
subletting or assignment without Landlord's prior written consent (except a
Permitted Transfer), at Landlord's election, shall constitute a default by
Tenant under the terms of this Lease. The acceptance of rent by Landlord from
any person or entity other than Tenant, or the acceptance of rent by Landlord
from Tenant with knowledge of a violation of the provisions of this
paragraph, shall not be deemed to be a waiver by Landlord of any provision of
this Article or this Lease or to be a consent to any subletting by Tenant or
any assignment of Tenant's interest in this Lease. Without limiting the
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circumstances in which it may be reasonable for Landlord to withhold its
consent to an assignment or subletting, Landlord and Tenant acknowledge that
it shall be reasonable for Landlord to withhold its consent in the following
instances:
(a) the proposed assignee or sublessee is a governmental agency;
(b) the use of the Leased Premises by the proposed assignee or
sublessee would involve occupancy by other than a Permitted Use as set forth
in Article 1, would entail any alterations which would lessen the value of
the leasehold improvements in the Leased Premises, or would require increased
services by Landlord;
(c) the financial worth of the proposed assignee does not meet the
credit standards applied by Landlord at the time of the proposed assignment;
(d) the proposed assignee or sublessee in the ten years prior to the
assignment or sublease has filed for bankruptcy protection, has been the
subject of an involuntary bankruptcy, or has been adjudged insolvent;
(e) Landlord has experienced a previous default by or is in
litigation with the proposed assignee or sublessee;
(f) the use of the Leased Premises by the proposed assignee or
sublessee will violate any applicable law, ordinance or regulation;
(g) the proposed assignment or sublease fails to include all of the
terms and provisions required to be included therein pursuant to this
Article 7;
(h) in the case of a subletting of less than the entire Leased
Premises, if the subletting would result in the division of any floor of the
Building into more than two subleased parcels or would require improvements
to be made outside of the Leased Premises;
(i) the proposed transferee is an existing tenant in the Building
and the Landlord at that time has comparable available space for lease in the
Building.
7.2 MERGER, REORGANIZATION, OR SALE OF ASSETS. Each of the following shall
be deemed a voluntary assignment of Tenant's interest in this Lease: (a)
dissolution, merger, consolidation or other reorganization of Tenant; or (b)
at any time that the capital stock of Tenant is not publicly traded on a
recognized exchange, the sale or transfer in one or more transactions to one
or more related parties of a controlling percentage of the capital stock of
Tenant; or (c) or the sale or transfer of all or substantially all of the
assets of Tenant. The phrase "controlling percentage" means the ownership of
and the right to vote stock possessing more than fifty percent of the total
combined voting power of all classes of Tenant's capital stock issued,
outstanding and entitled to vote for the election of directors. If Tenant is
a partnership, a withdrawal or change, voluntary, involuntary or by operation
of Law, of any general partner, or the dissolution of the partnership, shall
be deemed a voluntary assignment of Tenant's interest in this Lease.
Notwithstanding the foregoing, Tenant (or any Permitted Transferee, as
defined herein) may, without Landlord's prior written consent and without
being subject to any of the provisions of this Article 7, including without
limitation, Landlord's right to recapture any portion of the Leased Premises,
sublet the Leased Premises or assign this Lease to (individually, a
"Permitted Transferee," collectively, "Permitted Transferees"): (i) a
subsidiary, affiliate, parent, division, entity or joint venture controlling,
controlled by or under common control with Tenant; or (ii) a successor
corporation related to Tenant by merger, consolidation, nonbankruptcy
reorganization, or government action; or (iii) a purchaser of all or
substantially all of the assets of Tenant; provided that either (1) Tenant
shall remain primarily liable under the Lease (except in the event it is not
the surviving entity in the merger) or (2) that any Permitted Transferee
under (i), (ii) or (iii) above has a net worth equal to or greater than
Tenant's and does not have any contingent or off-balance sheet liabilities
that make it less credit worthy than Tenant as of the date of this Lease. In
the event any proposed assignee or subtenant under (i), (ii) or (iii) above
has a net worth less than Tenant or has contingent or off-balance sheet
liabilities that make it less credit worthy than Tenant, Landlord's consent
(pursuant to Section 7.1 above) shall be required and all of the terms and
conditions of this Article 7 shall apply, except that Landlord shall not be
entitled to terminate this Lease pursuant to Section 7.3, and Landlord shall
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not be entitled to any assignment consideration or excess rentals pursuant to
Section 7.5 of this Lease. If any proposed assignee or subtenant under (i),
(ii) or (iii) above does not qualify as a Permitted Transferee because it has
a net worth which is less than Tenant or has contingent or off-balance sheet
liabilities that make it less creditworthy than Tenant, then in the event
Landlord nevertheless consents (pursuant to the provisions of Section 7.1
above) to such proposed assignee or subtenant, such proposed assignee or
subtenant shall constitute a Permitted Transferee under this Lease.
7.3 LANDLORD'S ELECTION. If Tenant shall desire to assign its interest under
the Lease or to sublet all or any portion of the Leased Premises, except in
connection with a Permitted Transfer Tenant must first notify Landlord, in
writing, of its intent to so assign or sublet, at least twenty (20) days in
advance of the date it intends to so assign its interest in this Lease or
sublet the Leased Premises but not sooner than one hundred eighty days in
advance of such date, specifying in detail the terms of such proposed
assignment or subletting, including the name of the proposed assignee or
sublessee, the property assignee's or sublessee's intended use of the Leased
Premises, current financial statements (including a balance sheet, income
statement and statement of cash flow, all prepared in accordance with
generally accepted accounting principles) of such proposed assignee or
sublessee, the form of documents to be used in effectuating such assignment
or subletting and such other information as Landlord may reasonably request.
Landlord shall have a period of twenty (20) days following receipt of such
notice and the required information within which to do one of the following:
(i) consent to such requested assignment or subletting subject to Tenant's
compliance with the conditions set forth in Paragraph 7.4 below, or (ii)
refuse to so consent to such requested assignment or subletting, provided
that such consent shall not be unreasonably refused, or (iii) in the case of
an assignment of this Lease or sublet of any part of the Leased Premises for
the remainder of the term, terminate this Lease. During such ten (10) day
period, Tenant covenants and agrees to supply to Landlord, upon request, all
necessary or relevant information which Landlord may reasonably request
respecting such proposed assignment or subletting and/or the proposed
assignee or sublessee. Notwithstanding the foregoing, if Landlord elects to
terminate the Lease as provided herein, Landlord shall notify Tenant thereof
during such ten (10) day period and Tenant shall either (i) accept Landlord's
termination or (ii) rescind its request for consent to the assignment or
subletting, in which case the Lease shall continue in full force and effect
between Tenant and Landlord.
7.4 ASSIGNMENT CONSIDERATION AND EXCESS RENTALS DEFINED. For purposes of
this Article, including any amendment to this Article by way of addendum or
other writing, the term "assignment consideration" shall mean all
consideration to be paid by the assignee to Tenant or to any other party on
Tenant's behalf or for Tenant's benefit as consideration for such assignment,
after deduction for reasonable leasing commissions and reasonable legal fees
incurred by Tenant in connection with such assignment and, the cost of tenant
improvements made by Tenant at Tenant's sole cost and expense to prepare the
Leased Premises for the assignee, but without deduction for any other costs
or expenses. The term "excess rentals" shall mean all consideration to be
paid by the sublessee to Tenant or to any other party on Tenant's behalf or
for Tenant's benefit for the sublease of the Leased Premises in excess of the
rent due to Landlord under the terms of this Lease for the same period, after
deduction for reasonable leasing commissions and reasonable legal fees
incurred by Tenant in connection with such sublease and the cost of tenant
improvements made by Tenant at Tenant's sole cost and expense to prepare the
Leased Premises for the subtenant, but without deduction for any other costs
or expenses. Tenant agrees that sixty-five percent (65%) of any assignment
consideration and/or excess rentals arising from any assignment or subletting
by Tenant which is to be paid to Landlord pursuant to this Article now is and
shall then be the property of Landlord and not the property of Tenant.
7.5 PAYMENTS. All payments required by this Article to be made to Landlord
shall be made in cash in full as and when they become due. At the time
Tenant, Tenant's assignee or sublessee makes each such payment to Landlord,
Tenant or Tenant's assignee or sublessee, as the case may be, shall deliver
to Landlord an itemized statement in reasonable detail showing the method by
which the amount due Landlord was calculated and certified by the party
making such payment as true and correct.
7.6 EFFECT OF LANDLORD'S CONSENT. No subletting or assignment, even with the
consent of Landlord, shall relieve Tenant of its personal and primary
obligation to pay rent and to perform all of the other obligations to be
performed by Tenant hereunder. Consent by Landlord to one or more assignments
of Tenant's interest in this Lease or to one or more sublettings of the
Leased Premises shall not be deemed to be a consent to any subsequent
assignment or subletting.
15.
ARTICLE 8
LIMITATION ON LANDLORD'S LIABILITY AND INDEMNITY
8.1 LIMITATION ON LANDLORD'S LIABILITY AND RELEASE. Landlord shall not be
liable to Tenant for, and Tenant hereby releases Landlord and its partners,
principals, members, officers, agents, employees, lenders, attorneys, and
consultants from, any and all liability, whether in contract, tort or on any
other basis, for any injury to or any damage sustained by Tenant, Tenant's
agents, employees, contractors or invitees, any damage to Tenant's property,
or any loss to Tenant's business, loss of Tenant's profits or other financial
loss of Tenant resulting from or attributable to the condition of, the
management of, the repair or maintenance of, the protection of, the supply of
services or utilities to, the damage in or destruction of the Leased
Premises, the Building, the Property or the Outside Areas, including without
limitation (i) the failure, interruption, rationing or other curtailment or
cessation in the supply of electricity, water, gas or other utility service
to the Property, the Building or the Leased Premises; (ii) the vandalism or
forcible entry into the Building or the Leased Premises; (iii) the
penetration of water into or onto any portion of the Leased Premises; (iv)
the failure to provide security and/or adequate lighting in or about the
Property, the Building or the Leased Premises, (v) the existence of any
design or construction defects within the Property, the Building or the
Leased Premises; (vi) the failure of any mechanical systems to function
properly (such as the HVAC systems); (vii) the blockage of access to any
portion of the Property, the Building or the Leased Premises, except that
Tenant does not so release Landlord from such liability to the extent such
damage was proximately caused by Landlord's negligence, willful misconduct,
or Landlord's failure to perform an obligation expressly undertaken pursuant
to this Lease after a reasonable period of time (not to exceed 15 days) shall
have lapsed following receipt of written notice from Tenant to so perform
such obligation. In this regard, Tenant acknowledges that it is fully
apprised of the provisions of Law relating to releases, and particularly to
those provisions contained in Section 1542 of the California Civil Code which
reads as follows:
"A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at the
time of executing the release, which if known by him must have
materially affected his settlement with the debtor."
Notwithstanding such statutory provision, and for the purpose of implementing
a full and complete release and discharge, Tenant hereby (i) waives the
benefit of such statutory provision and (ii) acknowledges that, subject to
the exceptions specifically set forth herein, the release and discharge set
forth in this paragraph is a full and complete settlement and release and
discharge of all claims and is intended to include in its effect, without
limitation, all claims which Tenant, as of the date hereof, does not know of
or suspect to exist in its favor.
8.2 TENANT'S INDEMNIFICATION OF LANDLORD. Tenant shall defend with competent
counsel satisfactory to Landlord any claims made or legal actions filed or
threatened against Landlord with respect to the violation of any Law, or the
death, bodily injury, personal injury, property damage, or interference with
contractual or property rights suffered by any third party, occurring within
the Leased Premises or resulting from Tenant's use or occupancy of the Leased
Premises, the Building or the Outside Areas, or resulting from Tenant's
activities in or about the Leased Premises, the Building, the Outside Areas
or the Property, and Tenant shall indemnify and hold Landlord, Landlord's
partners, principals, members, employees, agents and contractors harmless
from any loss liability, penalties, or expense whatsoever (including any loss
attributable to vacant space which otherwise would have been leased, but for
such activities) resulting therefrom, except to the extent proximately caused
by the negligence or willful misconduct of Landlord or Landlord's failure to
perform an obligation expressly undertaken pursuant to this Lease after a
reasonable period of time not to exceed 15 days shall have lapsed following
receipt of written notice from Tenant to so perform such obligation. This
indemnity agreement shall survive the expiration or sooner termination of
this Lease. The parties acknowledge that this paragraph has been the subject
of negotiation.
16.
ARTICLE 9
INSURANCE
9.1 TENANT'S INSURANCE. Tenant shall maintain insurance complying with all
of the following:
(a) Tenant shall procure, pay for and keep in full force and effect,
at all times during the Lease Term, the following:
(i) Comprehensive general liability insurance insuring
Tenant against liability for personal injury, bodily injury, death and damage
to property occurring within the Leased Premises, or resulting from Tenant's
use or occupancy of the Leased Premises, the Building, the Outside Areas or
the Property, or resulting from Tenant's activities in or about the Leased
Premises or the Property, with coverage in an amount equal to Tenant's
Required Liability Coverage (as set forth in Article 1), which insurance
shall contain a "broad form liability" endorsement insuring Tenant's
performance of Tenant's obligations to indemnify Landlord as contained in
this Lease.
(ii) Fire and property damage insurance in so-called
"fire and extended coverage" form insuring Tenant against loss from physical
damage to Tenant's personal property, inventory, trade fixtures and equipment
within the Leased Premises with coverage for the full actual replacement cost
thereof;
(iii) Plate glass insurance, at actual replacement cost;
(iv) Pressure vessel insurance, if applicable;
(v) Workers' compensation insurance and any other
employee benefit insurance sufficient to comply with all laws; and
(vi) With respect to making of alterations or the
construction of improvements or the like undertaken by Tenant, contingent
liability and builder's risk insurance, in an amount and with coverage
reasonably satisfactory to Landlord.
(b) Each policy of liability insurance required to be carried by
Tenant pursuant to this paragraph or actually carried by Tenant with respect
to the Leased Premises or the Property: (i) shall, except with respect to
insurance required by subparagraph (a)(vi) above, name Landlord, and such
others as are designated by Landlord, as additional insureds; (ii) shall be
primary insurance providing that the insurer shall be liable for the full
amount of the loss, up to and including the total amount of liability set
forth in the declaration of coverage, without the right of contribution from
or prior payment by any other insurance coverage of Landlord; (iii) shall be
in a form satisfactory to Landlord; (iv) shall be carried with companies
reasonably acceptable to Landlord with Best's ratings of at least A and XI;
(v) shall provide that such policy shall not be subject to cancellation,
lapse or change except after at least thirty days prior written notice to
Landlord, and (vi) shall contain a so-called "severability" or "cross
liability" endorsement. Each policy of property insurance maintained by
Tenant with respect to the Leased Premises or the Property or any property
therein (i) shall provide that such policy shall not be subject to
cancellation, lapse or change except after at least thirty days prior written
notice to Landlord and (ii) shall contain a waiver and/or a permission to
waive by the insurer of any right of subrogation against Landlord, its
partners, principals, members, officers, employees, agents and contractors,
which might arise by reason of any payment under such policy or by reason of
any act or omission of Landlord, its partners, principals, members, officers,
employees, agents and contractors.
(c) Prior to the time Tenant or any of its contractors enters the
Leased Premises, Tenant shall deliver to Landlord, with respect to each
policy of insurance required to be carried by Tenant pursuant to this
Article, a copy of such policy (appropriately authenticated by the insurer as
having been issued, premium paid) or a certificate of the insurer certifying
in form satisfactory to Landlord that a policy has been issued, premium paid,
providing the coverage required by this Paragraph and containing the
provisions specified herein. With respect to each renewal or replacement of
any such insurance, the requirements of this Paragraph must be complied with
not less than thirty
17.
days prior to the expiration or cancellation of the policies being renewed or
replaced. Landlord may, at any time and from time to time, inspect and/or
copy any and all insurance policies required to be carried by Tenant pursuant
to this Article. If Landlord's Lender, insurance broker, advisor or counsel
reasonably determines at any time that the amount of coverage set forth in
Paragraph 9.1(a) for any policy of insurance Tenant is required to carry
pursuant to this Article is not adequate, then Tenant shall increase the
amount of coverage for such insurance to such greater amount as Landlord's
Lender, insurance broker, advisor or counsel reasonably deems adequate.
9.2 LANDLORD'S INSURANCE. With respect to insurance maintained by Landlord:
(a) Landlord shall maintain, as the minimum coverage required of it
by this Lease, fire and property damage insurance in so-called "fire and
extended coverage" form insuring Landlord (and such others as Landlord may
designate) against loss from physical damage to the Building with coverage of
not less than one hundred percent (100%) of the full actual replacement cost
thereof and against loss of rents for a period of not less than six months.
Such fire and property damage insurance, at Landlord's election but without
any requirements on Landlord's behalf to do so, (i) may be written in
so-called "all risk" form, excluding only those perils commonly excluded from
such coverage by Landlord's then property damage insurer; (ii) may provide
coverage for physical damage to the improvements so insured for up to the
entire full actual replacement cost thereof; (iii) may be endorsed to cover
loss or damage caused by any additional perils against which Landlord may
elect to insure, including earthquake and/or flood; and/or (iv) may provide
coverage for loss of rents for a period of up to twelve months. Landlord
shall not be required to cause such insurance to cover any of Tenant's
personal property, inventory, and trade fixtures, or any modifications,
alterations or improvements made or constructed by Tenant to or within the
Leased Premises. Landlord shall use commercially reasonable efforts to obtain
such insurance at competitive rates.
(b) Landlord shall maintain comprehensive general liability
insurance insuring Landlord (and such others as are designated by Landlord)
against liability for personal injury, bodily injury, death, and damage to
property occurring in, on or about, or resulting from the use or occupancy of
the Property, or any portion thereof, with combined single limit coverage of
at least Three Million Dollars ($3,000,000). Landlord may carry such greater
coverage as Landlord or Landlord's Lender, insurance broker, advisor or
counsel may from time to time determine is reasonably necessary for the
adequate protection of Landlord and the Property.
(c) Landlord may maintain any other insurance which in the opinion
of its insurance broker, advisor or legal counsel is prudent in carry under
the given circumstances, provided such insurance is commonly carried by
owners of property similarly situated and operating under similar
circumstances.
9.3 MUTUAL WAIVER OF SUBROGATION. Landlord hereby releases Tenant, and
Tenant hereby releases Landlord and its respective partners, principals,
members, officers, agents, employees and servants, from any and all liability
for loss, damage or injury to the property of the other in or about the
Leased Premises or the Property which is caused by or results from a peril or
event or happening which is covered by insurance actually carried and in
force at the time of the loss by the party sustaining such loss; PROVIDED,
HOWEVER, that such waiver shall be effective only to the extent permitted by
the insurance covering such loss and to the extent such insurance is not
prejudiced thereby.
ARTICLE 10
DAMAGE TO LEASED PREMISES
10.1 LANDLORD'S DUTY TO RESTORE. If the Leased Premises, the Building or the
Outside Area are damaged by any peril after the Effective Date of this Lease,
Landlord shall restore the same, as and when required by this paragraph,
unless this Lease is terminated by Landlord pursuant to Paragraph 10.3 or by
Tenant pursuant to Paragraph 10.4. If this Lease is not so terminated, then
upon the issuance of all necessary governmental permits, Landlord shall
commence and diligently prosecute to completion the restoration of the Leased
Premises, the Building or the Outside Area, as the case may be, to the extent
then allowed by law, to substantially the same condition in which it existed
as of the Commencement Date. Landlord's obligation to restore shall be
limited to the improvements constructed by Landlord. Landlord shall have no
obligation to restore any alterations made by Tenant to the Leased Premises
or any of Tenant's personal property, inventory or trade fixtures. Upon
completion of the restoration by
18.
Landlord, Tenant shall forthwith replace or fully repair all of Tenant's
personal property, inventory, trade fixtures to like or similar conditions as
existed at the time immediately prior to such damage or destruction.
10.2 INSURANCE PROCEEDS. All insurance proceeds available from the fire and
property damage insurance carried by Landlord shall be paid to and become the
property of Landlord. If this Lease is terminated pursuant to either
Paragraph 10.3 or 10.4, all insurance proceeds available from insurance
carried by Tenant which cover loss of property that is Landlord's property or
would become Landlord's property on termination of this Lease shall be paid
to and become the property of Landlord, and the remainder of such proceeds
shall be paid to and become the property of Tenant. If this Lease is not
terminated pursuant to either Paragraph 10.3 or 10.4, all insurance proceeds
available from insurance carried by Tenant which cover loss to property that
is Landlord's property shall be paid to and become the property of Landlord,
and all proceeds available from such insurance which cover loss to property
which would only become the property of Landlord upon the termination of this
Lease shall be paid to and remain the property of Tenant. The determination
of Landlord's property and Tenant's property shall be made pursuant to
Paragraph 6.2.
10.3 LANDLORD'S RIGHT TO TERMINATE. Landlord shall have the option to
terminate this Lease in the event any of the following occurs, which option
may be exercised only by delivery to Tenant of a written notice of election
to terminate within thirty days after the date of such damage or destruction:
(a) The Building is damaged by any peril covered by valid and
collectible insurance actually carried by Landlord and in force at the time
of such damage or destruction or by any peril which would have been covered
by the insurance Landlord is required to maintain pursuant to Section 9.2 (an
"Insured Peril") to such an extent that the estimated cost to restore the
Building exceeds the lesser of (i) the insurance proceeds available from
insurance actually carried by Landlord (or which Landlord was required to
carry pursuant to Section 9.2(a) hereof) plus the amount of any deductible
(up to a maximum amount of five percent (5%) of the replacement cost of the
Building), plus any amount that the Tenant agrees in writing to contribute
towards restoration, or (ii) fifty percent of the then actual replacement
cost of the Building;
(b) The Building is damaged by an uninsured peril, which peril
Landlord was not required to insure against pursuant to the provisions of
Article 9 of this Lease, provided, however, that, subject to the requirements
of the holder of any deed of trust encumbering the Property, Landlord shall
not have the right to terminate this Lease if Tenant notifies Landlord,
within thirty (30) days after Tenant receives Landlord's written notice of
termination pursuant to this Section 10.3, that Tenant will pay for the cost
of restoration of the Leased Premises, in excess of any insurance proceeds to
be received by Landlord.
(c) The Building is damaged by any peril and, because of the laws
then in force, the Building (i) cannot be restored at reasonable cost or (ii)
if restored, cannot be used for the same use being made thereof before such
damage.
10.4 TENANT'S RIGHT TO TERMINATE. If the Leased Premises, the Building or
the Outside Area are damaged by any peril and Landlord does not elect to
terminate this Lease or is not entitled to terminate this Lease pursuant to
this Article, then as soon as reasonably practicable, Landlord shall furnish
Tenant with the written opinion of Landlord's architect or construction
consultant as to when the restoration work required of Landlord may be
complete. Tenant shall have the option to terminate this Lease in the event
any of the following occurs, which option may be exercised only by delivery
to Landlord of a written notice of election to terminate within thirty (30)
days after Tenant receives from Landlord the estimate of the time needed to
complete such restoration:
(a) If the time estimated to substantially complete the restoration
exceeds nine (9) months from and after the date the architect's or construction
consultant's written opinion is delivered; or
(b) If the damage occurred within twelve months of the last day of the
then current Lease Term, unless at the time of damage or destruction, Tenant has
an option to extend, in which case this Lease shall not terminate if Tenant
elects to exercise its option to extend.
19.
10.5 TENANT'S WAIVER. Landlord and Tenant agree that the provisions of
Paragraph 10.4 above, captioned "Tenant's Right To Terminate", are intended
to supersede and replace the provisions contained in California Civil Code,
Section 1932, Subdivision 2, and California Civil Code, Section 1934, and
accordingly, Tenant hereby waives the provisions of such Civil Code Sections
and the provisions of any successor Civil Code Sections or similar laws
hereinafter enacted.
10.6 ABATEMENT OF RENT. In the event of damage to the Leased Premises which
does not result in the termination of this Lease, the Base Monthly Rent (and
any Additional Rent) shall be temporarily abated during the period of
restoration in proportion in the degree to which Tenant's use of the Leased
Premises is impaired by such damage.
ARTICLE 11
CONDEMNATION
11.1 TENANT'S RIGHT TO TERMINATE. Except as otherwise provided in Paragraph
11.4 below regarding temporary takings, Tenant shall have the option to
terminate this Lease if, as a result of any taking, (i) all of the Leased
Premises is taken, or (ii) twenty-five percent (25%) or more of the Leased
Premises is taken and the part of the Leased Premises that remains cannot,
within a reasonable period of time, be made reasonably suitable for the
continued operation of Tenant's business, or (iii) or a portion of the
Outside Area is taken such that the parking available to Tenant is reduced by
more than thirty-five percent (35%), and the Landlord does not, within a
reasonable period of time, provide alternative parking arrangements within a
reasonable walking distance of the Leased Premises. Tenant must exercise such
option within a reasonable period of time, to be effective on the later to
occur of (i) the date that possession of that portion of the Leased Premises
that is condemned is taken by the condemnor or (ii) the date Tenant vacated
the Leased Premises.
11.2 LANDLORD'S RIGHT TO TERMINATE. Except as otherwise provided in
Paragraph 11.4 below regarding temporary takings, Landlord shall have the
option to terminate this Lease if, as a result of any taking, (i) all of the
Leased Premises is taken, (ii) twenty-five percent (25%) or more of the
Leased Premises is taken and the part of the Leased Premises that remains
cannot, within a reasonable period of time, be made reasonably suitable for
the continued operation of Tenant's business, or (iii) because of the laws
then in force, the Leased Premises may not be used for the same use being
made before such taking, whether or not restored as required by Paragraph
11.3 below. Any such option to terminate by Landlord must be exercised within
a reasonable period of time, to be effective as of the date possession is
taken by the condemnor.
11.3 RESTORATION. If any part of the Leased Premises or the Building is
taken and this Lease is not terminated, then Landlord shall, to the extent
not prohibited by laws then in force, repair any damage occasioned thereby to
the remainder thereof to a condition reasonably suitable for Tenant's
continued operations and otherwise, to the extent practicable, in the manner
and to the extent provided in Paragraph 10.1.
11.4 TEMPORARY TAKING. If a portion of the Leased Premises is temporarily
taken for a period of one year or less and such period does not extend beyond
the Lease Expiration Date, this Lease shall remain in effect. If any portion
of the Leased Premises is temporarily taken for a period which exceeds one
year or which extends beyond the Lease Expiration Date, then the rights of
Landlord and Tenant shall be determined in accordance with Paragraphs 11.1
and 11.2 above.
11.5 DIVISION OF CONDEMNATION AWARD. Any award made for any taking of the
Property, the Building, or the Leased Premises, or any portion thereof, shall
belong to and be paid to Landlord, and Tenant hereby assigns to Landlord all
of its right, title and interest in any such award; PROVIDED, HOWEVER, that
Tenant shall be entitled to receive any portion of the award that is made
specifically (i) for the taking of personal property, inventory or trade
fixtures belonging to Tenant, (ii) for the interruption of Tenant's business
or its moving costs, or (iii) for the value of any leasehold improvements
installed and paid for by Tenant. The rights of Landlord and Tenant regarding
any condemnation shall be determined as provided in this Article, and each
party hereby waives the provisions of Section 1265.130 of the California Code
of Civil Procedure, and the provisions of any similar law hereinafter
enacted, allowing either party to petition the Superior Court of Alameda
County to terminate this Lease and/or otherwise allocate condemnation awards
between Landlord and Tenant in the event of a taking of the Leased Premises.
20.
11.6 ABATEMENT OF RENT. In the event of a taking of the Leased Premises which
does not result in a termination of this Lease (other than a temporary taking),
then, as of the date possession is taken by the condemning authority, the Base
Monthly Rent shall be reduced in the same proportion that the area of that part
of the Leased Premises so taken (less any addition to the area of the Leased
Premises by reason of any reconstruction) bears to the area of the Leased
Premises immediately prior to such taking.
11.7 TAKING DEFINED. The term "taking" or "taken" as used in this Article 11
shall mean any transfer or conveyance of all or any portion of the Property
to a public or quasi-public agency or other entity having the power of
eminent domain pursuant to or as a result of the exercise of such power by
such an agency, including any inverse condemnation and/or any sale or
transfer by Landlord of all or any portion of the Property to such an agency
under threat of condemnation or the exercise of such power.
ARTICLE 12
DEFAULT AND REMEDIES
12.1 EVENTS OF TENANT'S DEFAULT. Tenant shall be in default of its
obligations under this Lease if any of the following events occur:
(a) Tenant shall have failed to pay Base Monthly Rent or any
Additional Rent within three (3) days after notice from Landlord that such
rent is past due PROVIDED, HOWEVER, that such notice shall be concurrent
with, and not in addition to, any notice required by applicable Laws; or
(b) Tenant shall have done or permitted to be done any act, use or
thing in its use, occupancy or possession of the Leased Premises or the
Building or the Outside Areas which is prohibited by the terms of this Lease
or Tenant shall have failed to perform any term, covenant or condition of
this Lease (except those requiring the payment of Base Monthly Rent or
Additional Rent, which failures shall be governed by subparagraph (a) above)
within thirty (30) days after written notice from Landlord to Tenant
specifying the nature of such failure and requesting Tenant to perform same
or within such longer period as is reasonably required in the event such
default is curable but not within such thirty (30) day period, PROVIDED such
cure is promptly commenced within such thirty (30) day period and is
thereafter diligently prosecuted to completion; or
(c) Tenant shall have sublet the Leased Premises or assigned or
encumbered its interest in this Lease in violation of the provisions
contained in Article 7, whether voluntarily or by operation of law; or
(d) Tenant shall have abandoned the Leased Premises; or
(e) Tenant or any Guarantor of this Lease shall have permitted or
suffered the sequestration or attachment of, or execution on, or the
appointment of a custodian or receiver with respect to, all or any
substantial part of the property or assets of Tenant (or such Guarantor) or
any property or asset essential to the conduct of Tenant's (or such
Guarantor's) business, and Tenant (or such Guarantor) shall have failed to
obtain a return or release of the same within thirty days thereafter, or
prior to sale pursuant to such sequestration, attachment or levy, whichever
is earlier; or
(f) Tenant or any Guarantor of this Lease shall have made a general
assignment of all or a substantial part of its assets for the benefit of its
creditors; or
(g) Tenant or any Guarantor of this Lease shall have allowed (or
sought) to have entered against it a decree or order which: (i) grants or
constitutes an order for relief, appointment of a trustee, or condemnation or
a reorganization plan under the bankruptcy laws of the United States; (ii)
approves as properly filed a petition seeking liquidation or reorganization
under said bankruptcy laws or any other debtor's relief law or similar
statute of the United States or any state thereof; or (iii) otherwise directs
the winding up or liquidation of Tenant; provided, however, if any decree or
order was entered without Tenant's consent or over Tenant's objection,
Landlord may not terminate this Lease pursuant to this Subparagraph if such
decree or order is rescinded or reversed within thirty days after its
original entry; or
21.
(h) Tenant or any Guarantor of this Lease shall have availed itself of
the protection of any debtor's relief law, moratorium law or other similar law
which does not require the prior entry of a decree or order.
12.2 LANDLORD'S REMEDIES. In the event of any default by Tenant, and without
limiting Landlord's right to indemnification as provided in Article 8.2,
Landlord shall have the following remedies, in addition to all other rights
and remedies provided by law or otherwise provided in this Lease, to which
Landlord may resort cumulatively, or in the alternative:
(a) Landlord may, at Landlord's election, keep this Lease in effect
and enforce, by an action at law or in equity, all of its rights and remedies
under this Lease including, without limitation, (i) the right to recover the
rent and other sums as they become due by appropriate legal action, (ii) the
right to make payments required by Tenant, or perform Tenant's obligations
and be reimbursed by Tenant for the cost thereof with interest at the then
maximum rate of interest not prohibited by law from the date the sum is paid
by Landlord until Landlord is reimbursed by Tenant, and (iii) the remedies of
injunctive relief and specific performance to prevent Tenant from violating
the terms of this Lease and/or to compel Tenant to perform its obligations
under this Lease, as the case may be.
(b) Landlord may, at Landlord's election, terminate this Lease by
giving Tenant written notice of termination, in which event this Lease shall
terminate on the date set forth for termination in such notice, in which
event Tenant shall immediately surrender the Leased Premises to Landlord, and
if Tenant fails to do so, Landlord may, without prejudice to any other remedy
which it may have for possession or arrearages in rent, enter upon and take
possession of the Leased Premises and expel or remove Tenant and any other
person who may be occupying the Leased Premises or any part thereof, without
being liable for prosecution or any claim or damages therefor. Any
termination under this subparagraph shall not relieve Tenant from its
obligation to pay to Landlord all Base Monthly Rent and Additional Rent then
or thereafter due, or any other sums due or thereafter accruing to Landlord,
or from any claim against Tenant for damages previously accrued or then or
thereafter accruing. In no event shall any one or more of the following
actions by Landlord, in the absence of a written election by Landlord to
terminate this Lease, constitute a termination of this Lease:
(i) Appointment of a receiver or keeper in order to
protect Landlord's interest hereunder;
(ii) Consent to any subletting of the Leased Premises
or assignment of this Lease by Tenant, whether pursuant to the provisions
hereof or otherwise; or
(iii) Any action taken by Landlord or its partners,
principals, members, officers, agents, employees, or servants, which is
intended to mitigate the adverse effects of any breach of this Lease by
Tenant, including, without limitation, any action taken to maintain and
preserve the Leased Premises on any action taken to relet the Leased Premises
or any portion thereof for the account at Tenant and in the name of Tenant.
(c) In the event Tenant breaches this Lease and abandons the Leased
Premises, Landlord may terminate this Lease, but this Lease shall not
terminate unless Landlord gives Tenant written notice of termination. If
Landlord does not terminate this Lease by giving written notice of
termination, Landlord may enforce all its rights and remedies under this
Lease, including the right and remedies provided by California Civil Code
Section 1951.4 ("Landlord may continue lease in effect after lessee's breach
and abandonment and recover rent as it becomes due, if lessee has right to
sublet or assign, subject only to reasonable limitations"), as in effect on
the Effective Date of this Lease.
(d) In the event Landlord terminates this Lease, Landlord shall be
entitled, at Landlord's election, to the rights and remedies provided in
California Civil Code Section 1951.2, as in effect on the Effective Date of
this Lease. For purposes of computing damages pursuant to Section 1951.2, an
interest rate equal to the maximum rate of interest then not prohibited by
law shall be used where permitted. Such damages shall include, without
limitation:
(i) The worth at the time of the award of the unpaid
rent which had been earned at the time of termination;
22.
(ii) The worth at the time of award of the amount by
which the unpaid rent for the balance of the term after the time of award
exceeds the amount of such rental loss that Tenant proves could be reasonably
avoided, computed by discounting such amount at the discount rate of the
Federal Reserve Bank of San Francisco, at the time of award plus one percent;
and
(iii) Any other amount necessary to compensate Landlord
for all detriment proximately caused by Tenant's failure to perform Tenant's
obligations under this Lease, or which in the ordinary course of things would
be likely to result therefrom, including without limitation, the following:
(i) expenses for cleaning, repairing or restoring the Leased Premises,
(ii) expenses for altering, remodeling or otherwise improving the Leased
Premises for the purpose of reletting, including removal of existing
leasehold improvements and/or installation of additional leasehold
improvements (regardless of how the same is funded, including reduction of
rent, a direct payment or allowance to a new tenant, or otherwise),
(iii) broker's fees allocable to the remainder of the term of this Lease,
advertising costs and other expenses of reletting the Leased Premises;
(iv) costs of carrying and maintaining the Leased Premises, such as taxes,
insurance premiums, utility charges and security precautions, (v) expenses
incurred in removing, disposing of and/or storing any of Tenant's personal
property, inventory or trade fixtures remaining therein; (vi) reasonable
attorney's fees, expert witness fees, court costs and other reasonable
expenses incurred by Landlord (but not limited to taxable costs) in retaking
possession of the Leased Premises, establishing damages hereunder, and
releasing the Leased Premises; and (vii) any other expenses, costs or damages
otherwise incurred or suffered as a result of Tenant's default.
(e) In the event any rent check is returned for insufficient finds, by written
notice to Tenant, Landlord may require the Tenant to pay its rent thereafter by
wire transfer or cashiers check.
12.3 LANDLORD'S DEFAULT AND TENANT'S REMEDIES. In the event Landlord fails
to perform its obligations under this Lease, Landlord shall nevertheless not
be in default under the terms of this Lease until such time as Tenant shall
have first given Landlord written notice specifying the nature of such
failure to perform its obligations, and then only after Landlord shall have
had thirty (30) days following its receipt of such notice within which to
perform such obligations; PROVIDED THAT, if longer than thirty (30) days is
reasonably required in order to perform such obligations, Landlord shall have
such longer period. In the event of Landlord's default as above set forth,
then, and only then, Tenant may then proceed in equity or at law to compel
Landlord to perform its obligations and/or to recover damages proximately
caused by such failure to perform (except as and to the extent Tenant has
waived its right to damages as provided in this Lease).
12.4 LIMITATION OF TENANT'S RECOURSE. If Landlord is a corporation, trust,
partnership, joint venture, limited liability company, unincorporated
association, or other form of business entity, Tenant agrees that (i) the
obligations of Landlord under this Lease shall not constitute personal
obligations of the officers, directors, trustees, partners, joint venturers,
members, owners, stockholders, or other principals of such business entity,
and (ii) Tenant shall have recourse only to the property of such corporation,
trust, partnership, joint venture, limited liability company, unincorporated
association, or other form of business entity for the satisfaction of such
obligations and not against the assets of such officers, directors, trustees,
partners, joint venturers, members, owners, stockholders or principals.
12.5 TENANT'S WAIVER. Landlord and Tenant agree that the provisions of
Paragraph 12.3 above are intended to supersede and replace the provisions of
California Civil Code Sections 1932(1), 1941 and 1942, and accordingly,
Tenant hereby waives the provisions of California Civil Code Sections
1932(1), 1941 and 1942 and/or any similar or successor law regarding Tenant's
right to terminate this Lease or to make repairs and deduct the expenses of
such repairs from the rent due under this Lease.
ARTICLE 13
GENERAL PROVISIONS
13.1 TAXES ON TENANT'S PROPERTY. Tenant shall pay before delinquency any and
all taxes, assessments, license fees, use fees, permit fees and public
charges of whatever nature or description levied, assessed or imposed against
Tenant or Landlord by a governmental agency arising out of, caused by reason
of or based upon Tenant's estate in this Lease, Tenant's ownership of
property, improvements made by Tenant to the Leased Premises or the Outside
Areas, improvements made by Landlord for Tenant's use within the Leased
Premises or the Outside Areas, Tenant's
24.
use (or estimated use) of public facilities or services or Tenant's
consumption (or estimated consumption) of public utilities, energy, water or
other resources (collectively, "Tenant's Interest"). Upon demand by Landlord,
Tenant shall furnish Landlord with satisfactory evidence of these payments.
If any such taxes, assessments, fees or public charges are levied against
Landlord, Landlord's property, the Building or the Property, or if the
assessed value of the Building or the Property is increased by the inclusion
therein of a value placed upon Tenant's Interest, regardless of the validity
thereof, Landlord shall have the right to require Tenant to pay such taxes,
and if not paid and satisfactory evidence of payment delivered to Landlord at
least ten days prior to delinquency, then Landlord shall have the right to
pay such taxes on Tenant's behalf and to invoice Tenant for the same. Tenant
shall, within the earlier to occur of (a) thirty (30) days of the date it
receives an invoice from Landlord setting forth the amount of such taxes,
assessments, fees, or public charge so levied, or (b) the due date of such
invoice, pay to Landlord, as Additional Rent, the amount set forth in such
invoice. Failure by Tenant to pay the amount so invoiced within such time
period shall be conclusively deemed a default by Tenant under this Lease.
Tenant shall have the right to bring suit in any court of competent
jurisdiction to recover from the taxing authority the amount of any such
taxes, assessments, fees or public charges so paid.
13.2 HOLDING OVER. This Lease shall terminate without further notice on the
Lease Expiration Date (as set forth in Article 1). Any holding over by Tenant
after expiration of the Lease Term shall neither constitute a renewal nor
extension of this Lease nor give Tenant any rights in or to the Leased
Premises except as expressly provided in this Paragraph. Any such holding
over to which Landlord has consented shall be construed to be a tenancy from
month to month, on the same terms and conditions herein specified insofar as
applicable, except that the Base Monthly Rent shall be increased to an amount
equal to one hundred fifty percent (150%) of the Base Monthly Rent payable
during the last full month immediately preceding such holding over. Tenant
acknowledges that if Tenant holds over without Landlord's consent, such
holding over may compromise or otherwise affect Landlord's ability to enter
into new leases with prospective tenants regarding the Leased Premises.
Therefore, if Tenant fails to surrender the Leased Premises upon the
expiration or termination of this Lease, in addition to any other liabilities
to Landlord accruing therefrom, Tenant shall protect, defend, indemnify and
hold Landlord harmless from and against all claims resulting from such
failure, including, without limiting the foregoing, any claims made by any
succeeding tenant founded upon such failure to surrender, and any losses
suffered by Landlord, including lost profits, resulting from such failure to
surrender.
13.3 SUBORDINATION TO MORTGAGES. This Lease is subject to and subordinate to
all ground leases, mortgages and deeds of trust which affect the Building or
the Property and which are of public record as of the Effective Date of this
Lease, and to all renewals, modifications, consolidations, replacements and
extensions thereof. Landlord covenants to use its best efforts to obtain
non-disturbance agreements from all holders of ground leases, mortgages and
deeds of trust in effect as of the date of this Lease, in form reasonably
satisfactory to Tenant, within sixty (60) days of the date of this Lease. If
Landlord shall fail to obtain such non-disturbance agreements within such
sixty (60) day period, Tenant shall have thirty (30) days within which to
terminate this Lease by written notice to Landlord. Notwithstanding the
foregoing, if the lessor under any such ground lease or any lender holding
any such mortgage or deed of trust shall advise Landlord that it desires or
requires this Lease to be made prior and superior thereto, then, upon written
request of Landlord to Tenant, Tenant shall promptly execute, acknowledge and
deliver any and all customary or reasonable documents or instruments which
Landlord and such lessor or lender deems necessary or desirable to make this
Lease prior thereto. Tenant hereby consents to Landlord's ground leasing the
land underlying the Building or the Property and/or encumbering the Building
or the Property as security for future loans on such terms as Landlord shall
desire, all of which future ground leases, mortgages or deeds of trust shall
be subject to and subordinate to this Lease. However, if any lessor under any
such future ground lease or any lender holding such future mortgage or deed
of trust shall desire or require that this Lease be made subject to and
subordinate to such future ground lease, mortgage or deed of trust, then
Tenant agrees, within ten (10) days after Landlord's written request
therefor, to execute, acknowledge and deliver to Landlord any and all
documents or instruments reasonably requested by Landlord or by such lessor
or lender as may be necessary or proper to assure the subordination of this
Lease to such future ground lease, mortgage or deed of trust, but only if
such lessor or lender agrees to recognize Tenant's rights under this Lease
and agrees not to disturb Tenant's quiet possession of the Leased Premises so
long as Tenant is not in default under this Lease. If Landlord assigns the
Lease as security for a loan, Tenant agrees to execute such documents as are
reasonably requested by the lender and to provide reasonable provisions in
the Lease protecting such lender's security interest which are customarily
required by institutional lenders making loans secured by a deed of trust
provided that such documents do not materially increase Tenant's obligations
or diminish its rights or remedies under this Lease.
24.
13.4 TENANT'S ATTORNMENT UPON FORECLOSURE. Tenant shall, upon request,
attorn (i) to any purchaser of the Building or the Property at any
foreclosure sale or private sale conducted pursuant to any security
instruments encumbering the Building or the Property, (ii) to any grantee or
transferee designated in any deed given in lieu of foreclosure of any
security interest encumbering the Building or the Property, or (iii) to the
lessor under an underlying ground lease of the land underlying the Building
or the Property, should such ground lease be terminated; provided that such
purchaser, grantee or lessor recognizes Tenant's rights under this Lease.
13.5 MORTGAGEE PROTECTION. In the event of any default on the part of
Landlord, Tenant will give notice by registered mail to any Lender or lessor
under any underlying ground lease who shall have requested, in writing, to
Tenant that it be provided with such notice, and Tenant shall offer such
Lender or lessor a reasonable opportunity to cure the default, including time
to obtain possession of the Leased Premises by power of sale or judicial
foreclosure or other appropriate legal proceedings if reasonably necessary to
effect a cure.
13.6 ESTOPPEL CERTIFICATE. Each party (the "Responding Party"), within five
business days following any request by the other party (the "Requesting
Party"), will execute and deliver to the Requesting Party an estoppel
certificate substantially in form attached as Exhibit B, (i) certifying that
this Lease is unmodified and in full force and effect, or, if modified,
stating the nature of such modification and certifying that this Lease, as so
modified, is in full force and effect, (ii) stating the date to which the
rent and other charges are paid in advance, if any, (iii) acknowledging that
there are not, to the Responding Party's knowledge, any uncured defaults on
the part of the Requesting Party hereunder, or specifying such defaults if
any are claimed, and (iv) certifying such other information about this Lease
as may be reasonably requested by the Requesting Party, its Lender or
prospective lenders, investors or purchasers. Landlord and Tenant intend that
any statement delivered pursuant to this paragraph may be relied upon by any
Lender or purchaser.
13.7 TENANT'S FINANCIAL INFORMATION. Tenant shall, within ten business days
after Landlord's request therefor, deliver to Landlord a copy of Tenant's
(and any guarantor's) current publicly available financial statements and any
such other publicly available information reasonably requested by Landlord
regarding Tenant's financial condition. Landlord shall be entitled to
disclose such financial statements or other information to its Lender, to any
present or prospective principal of or investor in Landlord, or to any
prospective Lender or purchaser of the Building, the Property, or any portion
thereof or interest therein. Any such information which is marked
"confidential" or "company secrets" (or is otherwise similarly marked by
Tenant) shall be confidential and shall not be disclosed by Landlord to any
third party except as specifically provided in this paragraph and then only
if the person to whom disclosure is made first agrees to be bound by the
requirements of this Section 13.7, unless the same becomes a part of the
public domain without the fault of Landlord.
13.8 TRANSFER BY LANDLORD. Landlord and its successors in interest shall
have the right to transfer their interest in the Building, the Property, or
any portion thereof at any time and to any person or entity. In the event of
any such transfer, the Landlord originally named herein (and in the case of
any subsequent transfer, the transferor), from the date of such transfer, (i)
shall be automatically relieved, without any further act by any person or
entity, of all liability for the performance of the obligations of the
Landlord hereunder which may accrue after the date of such transfer so long
as the Security Deposit (or the remaining amount of such Security Deposit
after deductions made in accordance with Section 3.7 of this Lease) is
transferred to the transferee (or returned to the Tenant) and the transferee
has agreed to assume and perform all such obligations which may accrue after
the date of such transfer and (ii) shall be relieved of all liability for the
performance of the obligations of the Landlord hereunder which have accrued
before the date of transfer if its transferee agrees to assume and perform
all such prior obligations of the Landlord hereunder. Tenant shall attorn to
any such transferee. After the date of any such transfer, the term "Landlord"
as used herein shall mean the transferee of such interest in the Building or
the Property.
13.9 FORCE MAJEURE. Subject to express provisions to the contrary set forth
in this Lease, the obligations of each of the parties under this Lease (other
than the obligations to pay money) shall be temporarily excused if such party
is prevented or delayed in performing such obligations by reason of any
strikes, lockouts or labor disputes; government restrictions, regulations,
controls, action or inaction; civil commotion; or extraordinary weather, fire
or other acts of God.
13.10 NOTICES. Any notice required or permitted to be given under this Lease
shall be in writing and (i) personally delivered, (ii) sent by United States
mail, registered or certified mail, postage prepaid, return receipt
25.
requested, (iii) sent by Federal Express or similar nationally recognized
overnight courier service, or (iv) transmitted by facsimile with a hard copy
sent within one (1) business day by any of the foregoing means, and in all
cases addressed as follows, and such notice shall be deemed to have been
given upon the date of actual receipt or delivery (or refusal to accept
delivery) at the address specified below (or such other addresses as may be
specified by notice in the foregoing manner) as indicated on the return
receipt or air ▇▇▇▇:
IF TO LANDLORD: Rotunda Partners II
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇
WITH A COPY TO: ▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & Bonzell, LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
IF TO TENANT: PRIOR TO COMMENCEMENT DATE:
--------------------------
Scientific Learning Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ , ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
AFTER THE COMMENCEMENT DATE:
---------------------------
At the Leased Premises.
Attention: General Counsel
with a copy to: ▇▇▇▇▇▇ Godward LLP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇
Any notice given in accordance with the foregoing shall be deemed received
upon actual receipt or refusal to accept delivery.
13.11 ATTORNEYS' FEES. In the event any party shall bring any action,
arbitration proceeding or legal proceeding alleging a breach of any provision
of this Lease, to recover rent, to terminate this Lease, or to enforce,
protect, determine or establish any term or covenant of this Lease or rights
or duties hereunder of either party, the prevailing party shall be entitled
to recover from the non-prevailing party as a part of such action or
proceeding, or in a separate action for that purpose brought within one year
from the determination of such proceeding, reasonable attorneys' fees, expert
witness fees, court costs and other reasonable expenses incurred by the
prevailing party.
13.12 DEFINITIONS. Any term that is given a special meaning by any provision
in this Lease shall, unless otherwise specifically stated, have such meaning
wherever used in this Lease or in any Addenda or amendment hereto. In
addition to the terms defined in Article 1, the following terms shall have
the following meanings:
26.
(a) REAL PROPERTY TAXES. The term "Real Property Tax" or "Real
Property Taxes" shall each mean (i) all taxes, assessments, levies and other
charges of any kind or nature whatsoever, general and special, foreseen and
unforeseen (including all instruments of principal and interest required to
pay any general or special assessments for public improvements and any
increases resulting from reassessments caused by any change in ownership or
new construction), now or hereafter imposed by any governmental or
quasi-governmental authority or special district having the direct or
indirect power to tax or levy assessments, which are levied or assessed for
whatever reason against the Property or any portion thereof, or Landlord's
interest herein, or the fixtures, equipment and other property of Landlord
that is an integral part of the Property and located thereon, or Landlord's
business of owning, leasing or managing the Property or the gross receipts,
income or rentals from the Property, (ii) all charges, levies or fees imposed
by any governmental authority against Landlord by reason of or based upon the
use of or number of parking spaces within the Property. If, at any time
during the Lease Term, the taxation or assessment of the Property prevailing
as of the Effective Date of this Lease shall be altered so that in lieu of or
in addition to any the Real Property Tax described above there shall be
levied, awarded or imposed (whether by reason of a change in the method of
taxation or assessment, creation of a new tax or charge, or any other cause)
an alternate, substitute, or additional use or charge (i) on the value, size,
use or occupancy of the Property or Landlord's interest therein or (ii) on or
measured by the gross receipts, income or rentals from the Property, or on
Landlord's business of owning, leasing or managing the Property or (iii)
computed in any manner with respect to the operation of the Property, then
any such tax or charge, however designated, shall be included within the
meaning of the terms "Real Property Tax" or "Real Property Taxes" for
purposes of this Lease. If any Real Property Tax is partly based upon
property or rents unrelated to the Property, then only that part of such Real
Property Tax that is fairly allocable to the Property shall be included
within the meaning of the terms "Real Property Tax" or "Real Property Taxes."
Notwithstanding the foregoing, the terms "Real Property Tax" or "Real
Property Taxes" shall not include estate, inheritance, transfer, gift or
franchise taxes of Landlord or the federal or state income tax imposed on
Landlord's income from all sources.
(b) LANDLORD'S INSURANCE COSTS. The term "Landlord's Insurance
Costs" shall mean the costs to Landlord to carry and maintain the policies of
fire and property damage insurance for the Property and general liability and
any other insurance required or permitted to be carried by Landlord pursuant
to Article 9, together with any deductible amounts paid by Landlord upon the
occurrence of any insured casualty or loss. Any deductible amount in excess
of ten (10%) of the total casualty shall be amortized over the useful life of
the repair or replacement required to restore the Property after such
casualty, and the amortized portion shall be included on a monthly basis in
Landlord's Insurance Costs. Notwithstanding the foregoing, Landlord's
Insurance Costs shall not include the cost of any course of construction
insurance carried by Landlord for the construction of the Improvements.
Notwithstanding the foregoing, if Tenant terminates this Lease pursuant to
Section 10.4 hereof, Tenant shall not be required to pay for any insurance
deductibles as part of Landlord's Insurance Costs or otherwise.
(c) PROPERTY MAINTENANCE COSTS. The term "Property Maintenance
Costs" shall mean all costs and expenses (except Landlord's Insurance Costs
and Real Property Taxes) paid or incurred by Landlord in protecting,
operating, maintaining, repairing and preserving the Property and all parts
thereof, including without limitation, (i) market rate professional
management fees of no more than five percent (5%) of Base Monthly Rent,
(ii) the amortizing portion of any costs incurred by Landlord in the making
of any modifications, alterations or improvements required by any
governmental authority as set forth in Article 6, which are so amortized
during the Lease Term, (iii) any and all on-going operation or maintenance
costs imposed on the Property by or through any development agreement, use
permit, site development agreement, traffic mitigation plan, entitlement, or
Private Restrictions (including but not limited to shuttle and emergency
transportation), (iv) such other costs as may be paid or incurred with
respect to operating, maintaining, and preserving the Property, repairing and
resurfacing paved areas, and repairing and replacing, when necessary,
electrical, plumbing, heating, ventilating and air conditioning systems
serving the Building, provided that the cost of any capital improvement shall
be amortized over the useful life of such improvement and the amortizing
portion of the cost shall be included in Property Maintenance Costs, and
(v) an expense reserve in the amount of $300,000 in the Base Year, subject to
a three percent (3%) annual increase for subsequent years. If any costs and
expenses are partly based upon property or rents unrelated to the Property,
then only that part of such Property Maintenance Costs that is fairly
allocable to the Property shall be included within the meaning of the terms
"Property Maintenance Costs." Notwithstanding the foregoing provisions of
this Section 13.12(c), the following are specifically excluded from the
definition of Property Maintenance Costs and Tenant shall have no obligation
to pay directly or reimburse Landlord for all or any portion of the following
except to the extent any of the foregoing are caused by the actions or
inaction of Tenant, or result from the failure of Tenant to comply with the
terms of the Lease: (a) costs of development or construction on the Property
(other than
27.
on-going operation or maintenance costs as set forth in (iii) above); (b) the
costs to repair or replace the structural portions of the Building or other
buildings on the Property, including, without limitation, the foundation,
footings, roof structure, roof screens, roof screen penetrations, and load
bearing and exterior walls of the Building or any other building located on
the Property; (c) depreciation, or amortization; (d) interest, charges and
fees incurred on debt, payments on mortgages and rent under ground leases;
(e) costs and expenses for which Tenant reimburses Landlord directly or which
Tenant pays directly to a third person or costs for which Landlord has a
right of reimbursement from others; (f) costs occasioned by the active
negligence or willful misconduct of Landlord or any other occupant of the
Property or violations of Law by Landlord or any other occupant of the
Property, (g) or costs to correct any construction defect in the Leased
Premises, the Building or the Property; or (h) capital costs incurred to
bring the Building or the Property into compliance with the Use Permit, any
CC&R's, underwriter's requirements, or Laws applicable to the Leased
Premises, the Building or the Property at the time the building permit for
the Improvements (as defined in the Work Letter) is issued.
(d) PROPERTY OPERATING EXPENSES. The term "Property Operating
Expenses" shall mean and include all Real Property Taxes, plus all Landlord's
Insurance Costs, plus all Property Maintenance Costs.
(e) LAW. The term "Law" shall mean any judicial decisions and any
statute, constitution, ordinance, resolution, regulation, rule,
administrative order, or other requirements of any municipal, county, state,
federal, or other governmental agency or authority having jurisdiction over
the parties to this Lease, the Leased Premises, the Building or the Property,
or any of them, in effect either at the Effective Date of this Lease or at
any time during the Lease Term, including, without limitation, any
regulation, order, or policy of any quasi-official entity or body (e.g. a
board of fire examiners or a public utility or special district).
(f) LENDER. The term "Lender" shall mean the holder of any
promissory note or other evidence of indebtedness secured by the Property or
any portion thereof.
(g) PRIVATE RESTRICTIONS. The term "Private Restrictions" shall mean
(as they may exist from time to time) any and all covenants, conditions and
restrictions, private agreements, easements, and any other recorded documents
or instruments affecting the use of the Property, the Building, the Leased
Premises, or the Outside Areas.
(h) RENT. The term "Rent" shall mean collectively Base Monthly Rent
for the Original Build-out Space and any Designated Portion of the Expansion
Space once becomes due, and all Additional Rent.
13.13 GENERAL WAIVERS. One party's consent to or approval of any act by the
other party requiring the first party's consent or approval shall not be
deemed to waive or render unnecessary the first party's consent to or
approval of any subsequent similar act by the other party. No waiver of any
provision hereof, or any waiver of any breach of any provision hereof, shall
be effective unless in writing and signed by the waiving party. The receipt
by Landlord of any rent or payment with or without knowledge of the breach of
any other provision hereof shall not be deemed a waiver of any such breach.
No waiver of any provision of this Lease shall be deemed a continuing waiver
unless such waiver specifically states so in writing and is signed by both
Landlord and Tenant. No delay or omission in the exercise of any right or
remedy accruing to either party upon any breach by the other party under this
Lease shall impair such right or remedy or be construed as a waiver of any
such breach theretofore or thereafter occurring. The waiver by either party
of any breach of any provision of this Lease shall not be deemed to be a
waiver of any subsequent breach of the same or any other provisions herein
contained.
13.14 MISCELLANEOUS. Should any provisions of this Lease prove to be invalid
or illegal, such invalidity or illegality shall in no way affect, impair or
invalidate any other provisions hereof, and such remaining provisions shall
remain in full force and effect. Time is of the essence with respect to the
performance of every provision of this Lease in which time of performance is
a factor. Any copy of this Lease which is executed by the parties shall be
deemed an original for all purposes. This Lease shall, subject to the
provisions regarding assignment, apply to and bind the respective heirs,
successors, executors, administrators and assigns of Landlord and Tenant. The
term "party" shall mean Landlord or Tenant as the context implies. If Tenant
consists of more than one person or entity, then all members of Tenant shall
be jointly and severally liable hereunder. This Lease shall be construed and
enforced in accordance with the Laws of the State in which the Leased
Premises are located. The captions in this Lease are for convenience only and
shall not be construed in the construction or interpretation of any provision
hereof. When the context of this Lease requires, the neuter gender includes
the masculine, the feminine, a
28.
partnership, corporation, limited liability company, joint venture, or other
form of business entity, and the singular includes the plural. The terms
"must," "shall," "will," and "agree" are mandatory. The term "may" is
permissive. When a party is required to do something by this Lease, it shall
do so at its sole cost and expense without right of reimbursement from the
other party unless specific provision is made therefor. Where Landlord's
consent is required hereunder, the consent of any Lender is also required.
Landlord and Tenant shall both be deemed to have drafted this Lease, and the
rule of construction that a document is to be construed against the drafting
party shall not be employed in the construction or interpretation of this
Lease. Where Tenant is obligated not to perform any act or is not permitted
to perform any act, Tenant is also obligated to restrain any others
reasonably within its control, including agents, invitees, contractors,
subcontractors and employees, from performing such act. Landlord shall not
become or be deemed a partner or a joint venturer with Tenant by reason of
any of the provisions of this Lease.
ARTICLE 14
CORPORATE AUTHORITY
BROKERS AND ENTIRE AGREEMENT
14.1 CORPORATE AUTHORITY. Each individual executing this Lease on behalf of
either party represents and warrants that such party is validly formed and
duly authorized and existing, that it is qualified to do business in the
State in which the Leased Premises are located, that it has the full right
and legal authority to enter into this Lease, and that he or she is duly
authorized to execute and deliver this Lease on its behalf in accordance with
its terms.
14.2 BROKERAGE COMMISSIONS. Each party represents, warrants and agrees that
it has not had any dealings with any real estate broker(s), leasing agent(s),
finder(s) or salesmen, other than the Brokers (as named in Article 1) with
respect to the lease by it of the Leased Premises pursuant to this Lease,
agrees to indemnify, defend with competent counsel, and hold the other party
harmless from any liability for the payment of any real estate brokerage
commissions, leasing commissions or finder's fees claimed by any other real
estate broker(s), leasing agent(s), finder(s), or salesmen to be earned or
due and payable by reason of its agreement or promise (implied or otherwise)
to pay such a commission or finder's fee by reason of this Lease. Landlord
shall pay the commission due to Brokers pursuant to a separate agreement
between Brokers and Landlord
14.3 ENTIRE AGREEMENT. This Lease and the Exhibits (as described in Article
1), which Exhibits are by this reference incorporated herein, constitute the
entire agreement between the parties, and there are no other agreements,
understandings or representations between the parties relating to the lease
by Landlord of the Leased Premises to Tenant, except as expressed herein. No
subsequent changes, modifications or additions to this Lease shall be binding
upon the parties unless in writing and signed by both Landlord and Tenant.
14.4 LANDLORD'S REPRESENTATIONS. Tenant acknowledges that neither Landlord
nor any of its agents made any representations or warranties respecting the
Property, the Building or the Leased Premises, upon which Tenant relied in
entering into the Lease, which are not expressly set forth in this Lease.
Tenant further acknowledges that neither Landlord nor any of its agents made
any representations as to (i) whether the Leased Premises may be used for
Tenant's intended use under existing Law, or (ii) the suitability of the
Leased Premises for the conduct of Tenant's business and that Tenant relies
solely upon its own investigations with respect to such matters. Tenant
expressly waives any and all claims for damage by reason of any statement,
representation, warranty, promise or other agreement of Landlord or
Landlord's agent(s), if any, not contained in this Lease or in any Exhibit
attached hereto.
29.
ARTICLE 15
OPTIONS TO EXTEND
15.1 OPTIONS. So long as Scientific Learning Corporation (or a Permitted
Transferee) is entitled to occupy the Leased Premises, and subject to the
condition set forth in clause (b) below, Tenant shall have two options to
extend the term of this Lease with respect to the entirety of the Leased
Premises, the first for a period of five (5) years from the expiration of the
last year of the Lease Term (the "First Extension Period"), and the second
(the "Second Extension Period") for a period of five (5) years from the
expiration of the First Extension Period, subject to the following conditions:
(a) Each option to extend shall be exercised, if at all, by written
notice of exercise given to Landlord by Tenant not more than eighteen (18)
months nor less than six (6) months prior to the expiration of the last year
of the Lease Term or the expiration of the First Extension Period, as
applicable;
(b) Anything herein to the contrary notwithstanding, if Tenant is in
default under any of the material terms, covenants or conditions of this
Lease beyond any applicable notice and cure period, either at the time Tenant
exercises either extension option or on the commencement date of the First
Extension Period or the Second Extension Period, as applicable, Landlord
shall have, in addition to all of Landlord's other rights and remedies
provided in this Lease, the right to terminate such option(s) to extend upon
written notice to Tenant.
15.2 FAIR MARKET RENT. In the event the applicable option is exercised in a
timely fashion, the Lease shall be extended for the term of the applicable
extension period upon all of the terms and conditions of this Lease, provided
that the Base Monthly Rent for each extension period shall be 95% of the "Fair
Markett Rent" for the Leased Premises, determined as set forth below.
15.3 DETERMINATION. Within 30 days after receipt of Tenant's notice of
exercise, Landlord shall notify Tenant in writing of Landlord's estimate of
the Base Monthly Rent for the first year of the applicable extension period.
For purposes hereof, "Fair Market Rent" shall mean the rent a willing tenant
would be willing to pay for similar space in similar buildings in similar
locations upon substantially the terms set forth in this Lease. Within 30
days after receipt of such notice from Landlord, Tenant shall have the right
either to (i) accept Landlord's estimate of Fair Market Rent or (ii) elect to
arbitrate Landlord's estimate of Fair Market Rent, such arbitration to be
conducted pursuant to the provisions hereof. Failure on the part of Tenant to
give written notice of its election to require arbitration of Fair Market
Rent within such 30-day period shall constitute acceptance of the Fair Market
Rent for the applicable extension period as calculated by Landlord. If Tenant
elects arbitration, the arbitration shall be concluded within 90 days after
the date of Tenant's election, subject to extension for an additional 30-day
period if a third arbitrator is required and does not act in a timely manner.
To the extent that arbitration has not been completed prior to the expiration
of any preceding period for which Base Monthly Rent has been determined,
Tenant shall pay Base Monthly Rent at the rate calculated by Landlord, with
the potential for an adjustment to be made once Fair Market Rent is
ultimately determined by arbitration.
15.4 ARBITRATION. In the event of arbitration, the judgment or the award
rendered in any such arbitration may be entered in any court having
jurisdiction and shall be final and binding between the parties. The
arbitration shall be conducted and determined in the City of Oakland in
accordance with the then prevailing rules of the American Arbitration
Association or its successor for arbitration of commercial disputes except to
the extent that the procedures mandated by such rules shall be modified as
follows:
(a) Tenant shall make demand for arbitration in writing within 30 days
after service of Landlord's determination of Fair Market Rent given under
Paragraph 15.3 above, specifying therein the name and address of the person to
act as the arbitrator on its behalf. The arbitrator shall be qualified as a real
estate appraiser familiar with the Fair Market Rent of similar office space in
the San Francisco/Oakland area who would qualify as an expert witness over
objection to give opinion testimony addressed to the issue in a court of
competent jurisdiction. Failure on the part of Tenant to make a proper demand in
a timely manner for such arbitration shall constitute a waiver of the right
thereto. Within 15 days after the service of the demand for arbitration,
Landlord shall give notice to Tenant, specifying the name and address of the
person designated by Landlord to act as arbitrator on its behalf who
30.
shall be similarly qualified. If Landlord fails to notify Tenant of the
appointment of its arbitrator, within or by the time above specified, then
the arbitrator appointed by Tenant shall be the arbitrator to determine the
issue.
(b) In the event that two arbitrators are chosen pursuant to
Paragraph 15.4(a) above, the arbitrators so chosen shall, within 15 days
after the second arbitrator is appointed determine the Fair Market Rent. If
the two arbitrators shall be unable to agree upon a determination of Fair
Market Rent within such 15-day period, they, themselves, shall appoint a
third arbitrator, who shall be a competent and impartial person with
qualifications similar to those required of the first two arbitrators
pursuant to Paragraph 15.4(a). In the event they are unable to agree upon
such appointment within seven days after expiration of such 15-day period,
the third arbitrator shall be selected by the parties themselves, if they can
agree thereon, within a further period of 15 days. If the parties do not so
agree, then either party, on behalf of both, may request appointment of such
a qualified person by the then Presiding Judge of the Superior Court of the
County of Alameda. The three arbitrators shall decide the dispute if it has
not previously been resolved by following the procedure set forth below.
(c) Where an issue cannot be resolved by agreement between the two
arbitrators selected by Landlord and Tenant or settlement between the parties
during the course of arbitration, the issue shall be resolved by the three
arbitrators within 15 days of the appointment of the third arbitrator in
accordance with the following procedure. The arbitrator selected by each of
the parties shall state in writing his determination of the Fair Market Rent
supported by the reasons therefor with counterpart copies to each party. The
arbitrators shall arrange for a simultaneous exchange of such proposed
resolutions. The role of the third arbitrator shall be to select which of the
two proposed resolutions most closely approximates his determination of Fair
Market Rent. The third arbitrator shall have no right to propose a middle
ground or any modification of either of the two proposed resolutions. The
resolution he chooses as most closely approximating his determination shall
constitute the decision of the arbitrators and be final and binding upon the
parties.
(d) In the event of a failure, refusal or inability of any
arbitrator to act, his successor shall be appointed by him, but in the case
of the third arbitrator, his successor shall be appointed in the same manner
as provided for appointment of the third arbitrator. The arbitrators shall
decide the issue within 15 days after the appointment of the third
arbitrator. Any decision in which the arbitrator appointed by Landlord and
the arbitrator appointed by Tenant concur shall be binding and conclusive
upon the parties. Each party shall pay the fee and expenses of its respective
arbitrator and both shall share the fee and expenses of the third arbitrator,
if any, and the attorneys' fees and expenses of counsel for the respective
parties and of witnesses shall be paid by the respective party engaging such
counsel or calling such witnesses.
(e) The arbitrators shall have the right to consult experts and
competent authorities to obtain factual information or evidence pertaining to
a determination of Fair Market Rent. The arbitrators shall render their
decision and award in writing with counterpart copies to each party. The
arbitrators shall have no power to modify the provisions of this Lease.
15.5 IMPROVEMENT ALLOWANCE. Upon the commencement of any Extension Period,
Landlord shall pay to Tenant an amount up to $10.00 per rentable square feet,
which Tenant shall use pay or offset the costs to repaint and re-carpet the
Leased Premises, which shall otherwise be undertaken at Tenant's cost and
expense.
ARTICLE 16
EXPANSION
16.1 EXPANSION SPACE. So long as Scientific Learning Corporation (or a
Permitted Transferee) is entitled to occupy the Leased Premises as of its
exercise of the option granted herein, and subject to the conditions set
forth below, Tenant shall have an ongoing option to lease from Landlord (the
"Expansion Option"), all or portions of the 12,947 rentable square foot
delineated on Sheet X-9 of the Plans as "Future Tenant" (the "Expansion
Space"), which shall, subject to compliance with all Laws, be built by
Landlord to the same or substantially similar quality as the Improvements as
required by the Work Letter, based on the specifications for the Improvements:
(a) The Expansion Option may be exercised, if at all, by one or a
series of written notices of exercise given to Landlord by Tenant at any time
prior to the expiration of the fifth year of the Term;
31.
(b) Notwithstanding anything to the contrary contained herein, if
Tenant is in default under any of the material terms, covenants or conditions
of this Lease beyond any applicable notice and cure period at the time Tenant
exercises the Expansion Option, Landlord shall have, in addition to all of
Landlord's other rights and remedies provided in this Lease, the right to
terminate such Expansion Option upon notice to Tenant.
16.2 OPTION CONSIDERATION. Commencing on the Commencement Date, as
consideration for Landlord's agreement to build out the Expansion Space in
conformance with the requirements of the final plans and specifications for
the Improvements in accordance with the Work Letter, Tenant shall pay to
Landlord the following amounts, concurrently with the payment of each monthly
installment of Base Monthly Rent for the Original Build-out Space:
During the first year of the Term: $.25 per month per rentable square
foot in the Expansion Space not yet
included in the Leased Premises
During the second year of the Term: $.35 per month per rentable square
foot in the Expansion Space not yet
included in the Leased Premises
During the third year of the Term: $.50 per month per rentable square
foot in the Expansion Space not yet
included in the Leased Premises
During the forth year of the Term: $.70 per month per rentable square
foot in the Expansion Space not yet
included in the Leased Premises
During the fifth year of the Term: $1.00 per month per rentable square
foot in the Expansion Space not yet
included in the Leased Premises
During the sixth year of the Term: $1.30 per month per rentable square
foot in the Expansion Space not yet
included in the Leased Premises
During the seventh year of the Term: $1.60 per month per rentable square
foot in the Expansion Space not yet
included in the Leased Premises
During the eighth year of the Term: $1.90 per month per rentable square
foot in the Expansion Space not yet
included in the Leased Premises
16.3 BASE MONTHLY RENT FOR EXPANSION SPACE. Following each exercise of
Tenant's option to expand, and effective upon completion of Improvements by
Landlord of substantially similar quality and expense to the initial
Improvements, the portion of the Expansion Space designated in Tenant's
notice of exercise (which portion shall not be smaller than 2500 rentable
square feet and shall be referred to herein as the "Designated Portion(s) of
the Expansion Space) shall be deemed added to the Leased Premises. The Base
Monthly Rent for the Designated Portion(s) of the Expansion Space shall be
Two and 17/100 Dollars ($2.17) per rentable square foot per month, subject to
a three percent (3%) increase on each anniversary of the Commencement Date
compounded annually.
16.4 TENANT IMPROVEMENT ALLOWANCE FOR EXPANSION SPACE. Upon each exercise of
Tenant's right to lease any portion of the Expansion Space, Landlord shall
provide a tenant improvement allowance in the following amounts, and shall
construct tenant improvements in the Designated Portion of the Expansion
Space in accordance with the terms and conditions set forth in the Work
Letter. The Improvement Allowance shall be provided in the following amounts:
Substantial Completion within
18 months of Commencement Date: $42/rsf of the Designated Portion
of the Expansion Space
32.
Substantial Completion within $35/rsf of the Designated Portion
18+ months - 30 months: of the Expansion Space
Substantial Completion within $28/rsf of the Designated Portion
30+ months - 42 months: of the Expansion Space
Substantial Completion within $21/rsf of the Designated Portion
42+ months - 54 months: of the Expansion Space
Substantial Completion within $14/rsf of the Designated Portion
54+ months - 68 months: of the Expansion
Space
16.5 CORRIDOR FOR EXPANSION SPACE. If at any time Tenant elects to expand
into the Expansion Space, Tenant agrees that the remaining portion of the
Expansion Space (if any), after Tenant has identified the Designated
Expansion Space, will contain the double-door entry nearest the passenger
elevators.
ARTICLE 17
RIGHT OF FIRST REFUSAL
17.1 RIGHT OF FIRST REFUSAL. So long as Scientific Learning Corporation (or
a Permitted Transferee) is entitled to occupy the Leased Premises as of its
exercise of the right of first refusal granted herein, and provided that
Tenant has elected to exercise its option to lease the Expansion Space,
Tenant shall have an ongoing right of first refusal to lease any available
space in the Building, other than retail space and other than space which is
encumbered by extension option rights in favor of the first tenants to occupy
the remainder of the Building, other than the Leased Premises (the "Remaining
Space") following completion of the Landlord's build-out of the Remaining
Space ("Available Space"). Promptly following Landlord's receipt of an offer
from a third party to lease any Available Space, Landlord shall deliver a
copy of such offer to Tenant. Following Tenant's receipt of such notice,
Tenant shall have five (5) business days within which to notify Landlord in
writing that it elects to lease the Available Space on the terms set forth in
such offer. In the event Tenant shall have failed to notify Landlord within
such period of its election to lease the Available Space, Tenant shall be
deemed to have elected not to lease such Available Space, and Landlord shall
be entitled to lease the space upon the same terms set forth in such offer to
any third party.
33.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as
of the respective dates below set forth with the intent to be legally bound
thereby as of the Effective Date of this Lease first above set forth.
LANDLORD:
ROTUNDA PARTNERS II, a LLC in California
-------------------------
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇, Managing Member
-------------------------------------
Dated: 3/20/00 By:
------------------- --------------------------------
By:
--------------------------------
--------------------------------
TENANT:
SCIENTIFIC LEARNING CORPORATION, a Delaware
corporation
Dated: By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------ ----------------------------------------------
Title: CEO
-------------------------------------------
Dated: 3/20/00 By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------ ----------------------------------------------
Title: COO
-------------------------------------------
34.
EXHIBIT "A"
(GRAPHIC)
Rotunda Building
and
Planned Parking Garage
Site Plan
(To be PROVIDED BY LANDLORD and attached)
EXHIBIT B
WORK LETTER
THIS WORK LETTER, dated concurrently with the Lease to which this
Work Letter is attached as Exhibit B, is entered into by and between ROTUNDA
PARTNERS II, a California limited liability company ("Landlord"), and
SCIENTIFIC LEARNING CORPORATION, a Delaware corporation ("Tenant"). On or
about the date hereof, Landlord and Tenant entered into that certain Lease
(the "Lease") for certain premises (the "Leased Premises") located at ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇. This Work Letter sets forth the
agreement of Landlord and Tenant with respect to the improvements to be
constructed in the Leased Premises, including the Original Build-out Space
and the Expansion Space. All defined terms used herein shall have the meaning
set forth in the Lease, unless otherwise defined in this Work Letter.
1. CONSTRUCTION OF IMPROVEMENTS IN ORIGINAL BUILD-OUT SPACE. Landlord shall
retain ▇▇▇▇▇▇ Special Projects Limited, or other contractor selected by
Tenant and approved by Landlord (which approval shall not be unreasonably
withheld or delayed) ("Landlord's Contractor") to furnish and install within
the Original Build-out Space, certain items of general construction (the
"Improvements") as described by: (i) the plans prepared by Architectural
Dimensions, Inc. (the "Landlord's Architect") dated March 13, 2000 and
attached and incorporated herein as Schedule 1 to the Work Letter, and
approved by Hooks Design and Architecture, ("Tenant's Architect"); (ii) the
seven page untitled outline of Tenant's requirements for its build-out dated
"March 15, 2000 Revised", attached and incorporated herein as Schedule 2 to
the Work Letter; and (iii) ▇▇▇▇▇▇ Special Projects L.P.'s revised preliminary
budget estimate dated March 2, 2000, attached and incorporated herein as
Schedule 3 to the Work Letter. Landlord shall cause the Improvements to be
completed by December 31, 2000. . The Landlord's Architect and Tenant's
Architect are collectively referred to as "Architects".
2. CONSTRUCTION OF IMPROVEMENTS IN EXPANSION SPACE. Following each exercise
of Tenant's expansion option pursuant to Article 16 of the Lease, Landlord
shall furnish and install within the Designated Portion of the Expansion
Space, certain items of general construction, substantially similar to the
Improvements, to be described by plans and specifications to be prepared by
an architect selected by Tenant and approved by Landlord (the "Expansion
Space Improvements"), subject to the tenant improvement allowance provisions
of Section 16.4.
3. DEFINITION OF "TIS". The Improvements and the Expansion Space
Improvements are collectively referred to herein as the "TIs". The
quantities, character and manner of installation of all of the TIs shall be
subject to the limitations imposed by any applicable governmental regulations
relating to conservation of energy and by applicable building codes and
regulations. In addition, except as expressly provided by Schedule 2 to this
Work Letter, Tenant agrees that the TIs shall not require Landlord to perform
work which would require changes to structural components of the Building or
the exterior design of the Building.
4. COMPLETION DATE OF IMPROVEMENTS. Landlord hereby agrees to construct the
Base Building Improvements in the Original Build-out Space and in the
Expansion Space in accordance with the Base Building Plans in good and
workmanlike manner and in compliance with all applicable laws and
regulations, at Landlord's sole cost and expense except as expressly set
forth in this Work Letter, and to complete the Improvements by December 31,
2000.
5. PREPARATION AND APPROVAL OF SPACE PLAN. The plan for the Original
Build-out Space dated March 13, 2000 and attached as Schedule 1 to this Work
Letter, (the "Space Plan") has been approved by Landlord and Tenant. Upon
each exercise of Tenant's option to lease all or any portion of the Expansion
Space, the parties will follow a procedure similar to that which they
followed in developing the Space Plan to develop space plans for any
Designated Portion of the Expansion Space.
6. APPROVAL OF WORKING DRAWINGS.
(a) Landlord's Architect shall prepare complete and coordinated
architectural plans and specifications required for the construction of the
tImprovements in conformance with Schedules 1, 2 and 3 attached to this Work
Letter (the "Working Drawings"), and to prepare drawings and specifications for
Changes (as defined below), if any, requested or required pursuant to Paragraph
8 below.
1.
(b) Landlord's Architect shall submit the completed and
coordinated Working Drawings to Tenant and Tenant's Architect for approval.
Tenant and Tenant's Architect will provide written approval or disapproval of
the Working Drawings within five (5) business days after such submission. If
Tenant or Tenant's Architect disapproves any part of the submission, the
disapproval shall include written instructions adequate for the Landlord's
Architect to revise the Working Drawings. Such revisions shall be subject to
Landlord's approval, which shall not be unreasonably withheld. Landlord's
failure to respond to request for approval within five business days
following delivery shall be deemed approval.
(c) If Tenant or Tenant's Architect fails to approve the
Working Drawings within the applicable periods set forth in subparagraph 5(b)
above, then (A) Landlord shall not be obligated to commence construction of
the Improvements, (B) Tenant shall be responsible for any resulting delay,
and the cost of such delay, in Landlord's completion of the Improvements and
delivery of the Leased Premises, and (C) any such delay shall be deemed a
Tenant Delay (as defined below).
(d) Upon each exercise of Tenant's option to lease all or any
portion of the Expansion Space, the parties will follow a similar procedure
to obtain approval of the working drawings for the Designated Portion of the
Expansion Space.
7. COST OF TIs.
(a) Unless specified otherwise herein, Landlord shall bear and
pay the entire cost of the Improvements. Notwithstanding the foregoing,
Tenant shall pay any fee incurred by Tenant to Tenant's Architect.
(b) Upon each exercise of Tenant's option to lease all or any
portion of the Expansion Space, the Landlord will provide a tenant
improvement allowance as set forth in Section 16.4 of the Lease, and Tenant
shall pay the balance of the cost of the Expansion Space Improvements .
(c) In the event that the actual cost of the Improvements upon
Substantial Completion is less than $3,264,179.20, Tenant shall be entitled
to receive a credit against the Base Monthly Rent for the Original Build-out
Space in amount equal to the difference between $3,264,179.20 and the actual
cost of the Improvements.
8. CHANGES.
(a) Any request by Tenant for a change in the TIs after
approval of the Working Drawings (a "Change") shall be accompanied by all
information necessary to clearly identify and explain the proposed Change. As
soon as practicable after receipt of such an Estimate Request form, Landlord
shall notify Tenant of the estimated cost of such Change as well as the
estimated increase in construction time caused by the Change, if any. Tenant
shall approve in writing such estimates within four (4) business days after
receipt of Landlord's notice. Upon receipt of such written request, Landlord
shall be authorized to cause the Contractor to proceed with the
implementation of the requested Change.
(b) The increased cost and time of all Changes, including the
cost of architectural and engineering services required to revise the Working
Drawings to reflect such Changes, the Contractor's overhead and fee shall be
treated as costs of the TIs, and shall be as determined by Landlord upon
completion of the TIs. If Changes result in an increase in the total cost of
the Improvements upon completion over the amount bid by the Contractor based
on the approved Working Drawings, Tenant shall reimburse Landlord for such
increased cost, subject only to Landlord's furnishing to Tenant appropriate
back-up information from the Contractor concerning the increased costs and
increased construction time satisfactory to Tenant and Tenant's Architect.
9. TENANT'S WORK. Landlord and Tenant acknowledge and agree that certain
work required for Tenant's occupancy of the Leased Premises, including but
not limited to the procurement and installation of furniture, fixtures,
equipment, artwork and interior signage are beyond the scope of the TIs and
shall be performed by Tenant, Tenant's contractors approved by Landlord
(which approval shall not be unreasonably withheld or delayed) or Landlord's
contractors at Tenant's sole cost and expense. All such work ("Tenant's
Work") shall be subject to Landlord's prior written approval not to be
unreasonably withheld or delayed. Tenant shall adopt a construction
2.
schedule for Tenant's Work in conformance with the Contractor's schedule, and
shall perform Tenant's Work in such a way as not to hinder or delay the
operations of Landlord or the Contractor in the Building. Any costs incurred
by Landlord as a result of any interference with Landlord's operations by
Tenant or its contractors shall be promptly paid by Tenant to Landlord upon
demand. Landlord shall make all reasonable efforts to notify Tenant of any
such interference of which Landlord has actual knowledge, but failure to
provide such notice shall in no way limit Landlord's right to demand payment
for such costs. Tenant's Work shall comply with all of the following
requirements:
(a) Tenant's Work shall not proceed until Landlord has approved
in writing complete and detailed plans and specifications for Tenant's Work.
(b) Tenant's Work shall be performed in conformity with a valid
permit when required, a copy of which shall be furnished to Landlord before
such work is commenced. In any event, all Tenant's Work shall comply with all
applicable laws, codes and ordinances of any governmental entity having
jurisdiction over the Building. Landlord shall have no responsibility for
Tenant's failure to comply with such applicable laws. Any and all delay in
obtaining a certificate of occupancy due to Tenant's vendors is the
responsibility of Tenant and shall be a Tenant Delay.
(c) In connection with Tenant's Work, Tenant shall arrange for
any necessary hoisting or elevator service with Landlord.
(d) Tenant shall promptly pay Landlord upon demand for any
extra expense incurred by Landlord by reason of faulty work done by Tenant or
by reason of damage to existing work caused by Tenant or its contractors.
10. COMPLETION; TENANT DELAY.
(a) As used herein, the term "Substantial Completion" of the
TIs shall be deemed to mean the date when all of the following shall have
occurred: (i) Landlord shall have delivered to Tenant a certificate of
occupancy issued by the City of Oakland for the relevant portion of the
Leased Premises, or Tenant may legally occupy the Leased Premises for the
operation of its business without violating any law or regulation or voiding
or adversely affecting its insurance coverage, whether pursuant to a
temporary certificate of occupancy or otherwise; and (ii) Tenant's Architect
shall have certified to Tenant that Landlord's Contractor has substantially
completed construction of all TIs substantially in accordance with the
Working Drawings, subject only to the completion of reasonable punch list
items which do not impair Tenant's ability to use the Leased Premises for the
conduct of its business. Without limiting the generality of the foregoing,
"Substantial Completion" of the TIs shall not be deemed to have been achieved
unless and until (i) the building systems, including roof, plumbing, HVAC,
sprinkler, electrical (including panels and outlets), doors (both personnel
and shipping), lighting, ceiling tiles, and window coverings are in good
working order, (ii) the interior and exterior of the Building are in
compliance with all applicable Laws, (iii) all debris and clutter has been
removed from the relevant portion of Leased Premises and final cleanup
completed, (iv) exterior windows are washed inside and out, and (v) Outside
Areas are in good condition and free of debris, clutter and all construction
equipment. After substantial completion of the Improvements in the Original
Build-out Space and delivery thereof to Tenant, Landlord and Tenant shall
execute a Commencement Date Certificate in the form attached as Exhibit "C"
to the Lease.
(b) If Landlord shall be delayed in substantially completing the
TIs as a result of:
(i) Tenant's failure to approve the Working Drawings,
within the applicable time periods specified above unless such delay was
caused by the action or inaction of Landlord, its agents, Architect,
employees or contractors; or
(ii) Any changes in the scope of the TIs from that set
forth in the Space Plans, or any Changes to the Working Drawings requested by
Tenant after approval thereof ; or
(iii) Any interruption or interference in Landlord's
construction of the TIs caused by Tenant, its contractors or its vendors; or
3.
(iv) Any other act, neglect, failure or omission of
Tenant, its agents, employees or contractors unless such delay was caused by
the action or inaction of Landlord, its agents, Architect employees or
contractors (items (i) through (v) above being collectively referred to as
"Tenant Delays");
then the date upon which the payment of applicable rental under the Lease,
shall commence shall be advanced by the cumulative duration of such Tenant
Delays.
11. CONSTRUCTION WARRANTY. Landlord shall construct or cause the TIs to be
constructed substantially in accordance with this Work Letter and the Working
Drawings, all Laws and Private Restrictions, and in a good and workmanlike
manner, and all materials and equipment furnished will substantially conform
to said plans and shall be new and otherwise of good quality. Landlord's
Contractor and subcontractors shall be responsible for the correction of
defects in design, workmanship, materials and equipment supplied, and the
cost of correction shall not be charged against the Tenant or be a Property
Maintenance or Operating Expense.
12. OWNERSHIP OF IMPROVEMENTS. All of the TIs which are constructed shall
remain the property of Landlord during the Term and shall not be removed or
altered by Tenant, except to the extent permitted by the Lease.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Work Letter
as of the respective dates set forth below.
LANDLORD:
ROTUNDA PARTNERS II, a California LLC
----------------------------
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇, Managing Member
---------------------------------------
Dated: 3/20/00 By:
--------------- ----------------------------------
By:
----------------------------------
TENANT:
SCIENTIFIC LEARNING CORPORATION, a Delaware
corporation
Dated: By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------- -----------------------------------------------
Title: CEO
--------------------------------------------
Dated: 3/20/00 By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------- -----------------------------------------------
Title: COO
--------------------------------------------
4.
[ATTACH SCHEDULES 1, 2 AND 3]
1.
EXHIBIT C
COMMENCEMENT DATE CERTIFICATE
This Commencement Date Certificate is entered into by Landlord and Tenant
pursuant to the Work Letter attached as Exhibit B to the Lease.
1. (a) Landlord: _____________________________________________
(b) Tenant: _____________________________________________
(c) Lease: Lease dated _______________ between Landlord
and Tenant.
(d) Leased Premises: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
2. CONFIRMATION OF COMMENCEMENT.
Landlord and Tenant confirm that the Commencement Date is ____________
and the Expiration Date is ______________ and that Article 1 of the Lease is
amended accordingly.
Landlord and Tenant have executed this Commencement Date Certificate as
of the dates set forth below.
LANDLORD:
ROTUNDA PARTNERS II
By:
---------------------------------
Dated: By:
------------------ --------------------------------
TENANT:
SCIENTIFIC LEARNING CORPORATION, a Delaware
corporation
Dated: By:
------------------ -----------------------------------------
Title:
--------------------------------------
Dated: By:
------------------ -----------------------------------------
Title:
--------------------------------------
1.
EXHIBIT D
FORM OF ESTOPPEL CERTIFICATE
__________________, 19____
__________________________
__________________________
__________________________
__________________________
Re ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
Ladies and Gentlemen:
Reference is made to that certain Lease, dated as of _______________, between
_______________, a _______________ ("Landlord"), and the _______________
("Tenant") (herein referred to as the "Lease"). A copy of the Lease [and all
amendment thereto] is[are] attached hereto as EXHIBIT A. At the request of
_______________ in connection with [ State reasons for request for estoppel
certificate ], the undersigned hereby certifies to _______________ and to
[ State names of other parties requiring certification ] and each of your
respective successors and assigns as follows:
1. The undersigned is the [tenant/landlord] under the Lease.
2. The Lease is in full force and effect and has not been amended,
modified, supplemented or superseded except as indicated in Exhibit A.
3. There is no defense, offset, claim or counterclaim by or in favor of
the undersigned against [Tenant/Landlord] under the Lease or against the
obligations of the undersigned under the Lease. The undersigned has no renewal,
extension or expansion option, no right of first offer or right of first refusal
and no other similar right to renew or extend the term of the Lease or expand
the property demised thereunder except as may be expressly set forth in the
Lease.
4. The undersigned is not aware of any default now existing of the
undersigned or of [Landlord/Tenant] under the Lease, nor of any event which with
notice or the passage of time or both would constitute a default of the
undersigned or of [Landlord/Tenant] under the Lease except
____________________________________________.
5. The undersigned has not received notice of a prior transfer,
assignment, hypothecation or pledge by [Landlord/Tenant] of any of
[Landlord's/Tenant's] interest in the Lease.
6. The monthly rent due under the Lease is $____________ and has been
paid through __________________, and all additional rent due and payable under
the Lease has been paid through _________________.
7. The term of the Lease commenced on __________________, and expires
on ___________________, unless sooner terminated pursuant to the provisions of
the Lease. Landlord has performed all work required by the Lease for the
Tenant's initial occupancy of the demised property.
8. Tenant has deposited the sum of $____________ with Landlord as
security for the performance of its obligations as tenant under the Lease, and
no portion of such deposit has been applied by Landlord to any obligation under
the Lease.
9. Except as set forth in the Lease, there is no free rent period
pending, nor is Tenant entitled to any Landlord's contribution.
1.
The above certifications are made to [Landlord/__________] and Lender knowing
that [Landlord/__________] and Lender will rely thereon in accepting an
assignment of the Lease.
Very truly yours,
__________________________, a ____________
By:_______________________________________
Name:_____________________________________
Title:____________________________________
2.
An extra section break has been inserted above this paragraph. Do not delete
this section break if you plan to add text after the Table of
Contents/Authorities. Deleting this break will cause Table of
Contents/Authorities headers and footers to appear on any pages following the
Table of Contents/Authorities.
1.
SCHEDULE 2 TO WORK LETTER
SCIENTIFIC LEARNING CORPORATION
THE ROTUNDA
OAKLAND, CA
MARCH 15, 2000 REVISED
FOLLOWING IS AN OUTLINE OF THE TENANT'S REQUIREMENTS FOR THEIR BUILDOUT AT
THE ROTUNDA. THESE NOTES SHOULD BE CONSIDERED IN CONJUNCTION WITH THE SPACE
PLAN PREPARED BY ARCHITECTURAL DIMENSIONS (DRAWINGS ATTACHED TO THE LEASE)
BASED ON THE REVIEWS HELD ON 3/9/00 AND 3/13/00. SLC UNDERSTANDS THAT THE
PLAN WILL BE REVIEWED WITH SLC AND POSSIBLY REVISED AGAIN PRIOR TO THE START
OF CONSTRUCTION DOCUMENTS BY ARCHITECTURAL DIMENSIONS. THE FOLLOWING NOTES
WILL BE USED TO COMPLETE THE PRICING AND THE CONSTRUCTION DOCUMENTS ONCE THE
PLAN IS AGREED UPON.
THE TURNKEY SCOPE OF WORK IS TO INCLUDE THE ITEMIZED SCOPE LISTED IN ▇▇▇▇▇▇'▇
PRICING DATED 3/02/2000. THESE NOTES CLARIFY THAT LIST AND PROVIDE ADDITIONAL
DIRECTION FOR THE TENANT'S EXPECTATIONS FOR THE COMPLETED SPACE. TO THE
EXTENT THAT THERE IS ANY DISCREPANCY BETWEEN THE ▇▇▇▇▇▇ PRICING DOCUMENT AND
EITHER THIS DOCUMENT OR THE SPACE PLAN, THIS DOCUMENT AND THE SPACE PLAN
SHALL GOVERN.
GENERAL NOTES
SINCE THE SPACE WILL BE BUILT FOR SLC ON A TURNKEY BASIS, THERE IS NO
DISTINCTION MADE HERE BETWEEN BASE BUILDING SHELL CONDITION AND THE TENANT
IMPROVEMENTS. tHE NOTES DESCRIBE THE TENANT'S EXPECTATIONS FOR THE COMPLETED
SPACE.
ELECTRICAL / LIGHTING / LIFE SAFETY / HVAC / AND PLUMBING SYSTEMS ALL
TO BE DESIGN BUILD BY THE SUBCONTRACTORS OR CONSULTANTS RETAINED BY THE
LANDLORD. ALL CONSULTING & AGENCY FEES FOR SUCH WORK ARE TO BE INCLUDED IN THE
TURNKEY BUILDOUT.
ARCHITECTURAL FEES FOR LANDLORD'S ARCHITECT ARE INCLUDED IN THE EXPENSES TO
BE PAID BY LANDLORD. NO FEES FOR TENANT'S ARCHITECT OR CONSULTANTS WILL BE
INCLUDED IN THE EXPENSES TO BE PAID BY LANDLORD.
HISTORICAL REQUIREMENTS.
SLC is aware that there are certain requirements for the tenant spaces
stemming from arrangements made with the government agencies regarding the
historic nature of the
building. SLC expects that any special construction requirements are included
in the turnkey buildout.
SCIENTIFIC LEARNING CORPORATION
Scope of Work Notes
March 15, 2000
Page 2
DRYWALL / PARTITIONS / GLAZING
The space plan now includes the correct number of offices and conference rooms.
These rooms are to be primarily grouped in twos or threes and scattered within
the floor plates, surrounded by workstations, rather than at the rotunda or
perimeter.
Each office should have a sidelight, 18" wide, from floor to the top of the
door. The conference rooms and four of the offices should have full height
glazing the full width of the rooms. Sidelight glazing can be 1/4 " tempered
glass. Glass at the conference rooms should be 3/8 " tempered glass. Extent of
glazing at these rooms and others is as shown on the space plan.
1" miniblinds are to be provided at all interior glazing. Provide blinds on
exterior windows per building standards.
Door and glazing frames should be building standard.
Partitions should be building standard ceiling height except rated where
required by code.
Partitions at offices and conference rooms are to have insulation between the
studs as well as a blanket above the ceiling for 24" on each side of the
partition.
Note: Walls are to be built of studs sized appropriately for the height of
the partitions.
At Reception area on 5 and three conference rooms there should be a drywall
ceiling with soffitt.
Fur out columns to minimum dimension where required.
All drywall is to be smooth finish, level 4.
SCIENTIFIC LEARNING CORPORATION
Scope of Work Notes
March 15, 2000
Page 3
Provide sheet metal backing in walls for all cabinets.
At partition intersections with exterior mullions, provide any acoustical
treatment required, based on other buildouts in the building, to achieve sound
separation between the offices.
DOORS / FRAMES / HARDWARE
Doors, frames and hardware are to be building standard.
Offices are to have office locksets. Storage rooms are to have storeroom
locksets.
Card key locks with appropriate door hardware are to be located as shown on the
revised space plan. These are to be compatible with the building's card key
system.
All other doors are to have passage latchsets.
There should be closers at all coffee, lunchroom, and copy room doors. Revised
plans will show these as enclosed rooms.
A keying schedule will be provided once the plan is complete.
SPRINKLERS
Sprinkler layouts to accommodate new construction. Design build by the
subcontractor or by engineers.
Provide high temperature heads at the server room.
HVAC
System is to be designed to accommodate new construction. Design build by the
subcontractor or landlord's engineers.
Separate zones at large conference rooms.
SCIENTIFIC LEARNING CORPORATION
Scope of Work Notes
March 15, 2000
Page 4
Final sizing of HVAC unit for fileserver room to be determined based on tenant's
equipment loads. Approximately 14,000 VA (10,000 ▇▇▇▇▇) snas phone system.
Exhaust fans at lunch rooms and production / copy rooms.
LIGHTING / CEILING
Building standard ceiling grid and tile except as noted above. Building standard
lighting except as noted below.
Building standard recessed downlights at the reception area and elevator
lobbies. Three downlights and two wallwashers at three conference rooms.
Include an allowance of $ 7500 for accent lighting, with location to be
determined.
At all coffee station millwork provide undercounter fluorescent strip lighting.
Switching to be building standard to accommodate construction and to meet Title
24.
LIFE SAFETY
Exit lights to meet code, as well as strobes and smoke detectors, and tie in to
building's life safety system. Design build or by landlord's engineer. Fire
extinguishers to be provided as required by Code.
ELECTRICAL
Provide secondary wiring closets for 5th and 7th floors and any areas beyond 100
meters from server room. Provide secondary closets with electrical and space for
racks.
Provide two 4" conduits in a path that would allow cabling to be routed from
files server room to other floors for distribution of cables. Provide a 2"
conduit from telco room to file server room. Provide 4" conduits to secondary
closets.
Provide 2" conduit raceway from roof down through all four floors to provide
path for cable to satellite dish and / or antenna for wireless equipment.
(Subject to landlord review and approval).
SCIENTIFIC LEARNING CORPORATION
Scope of Work Notes
March 15, 2000
Page 5
Workstations will be electrified, three circuit, eight wire. Assume 3-4 amps
at each office, workstation, and conference room for electrical. Data /
communications outlet to consist of a mud ring and string. Provide wall boxes
or floor monuments to all electrical stations.
Note that, as previously described, these will be more dense than shown on
current plan. These will be 6 x 6 and 6 x 8.
At all work rooms and copy rooms there are to be at least two fourplex outlets
and two data / tel outlets.
At large rooms, such as product development there is to be one set of outlets
every 6 feet of wall space. Rooms without furniture shown are to receive pairs
of outlets every 8 feet.
Coffee / copy rooms are to have a wall phone.
Dedicated outlets are to be provided for copiers and large printers - assume
four per copy room.
Assume floor outlets for data/tel and power at three conference rooms.
Provide dedicated outlets for microwave, coffee machine, and toaster oven at
each coffee / lunch area. In addition, provide two GFI fourplex outlets at each
location, as well as power for all appliances (see below).
At large lunchroom provide electrical for three refrigerators and vending
machines as shown on plan.
Assume (15) 30amp twistlock circuits at file server room, plus power for the
HVAC equipment.
PLUMBING
New restrooms as included in prior pricing.
SCIENTIFIC LEARNING CORPORATION
Scope of Work Notes
March 15, 2000
Page 6
New stainless steel sink and hardware at all coffee / lunch areas. 1/4: copper
line to coffee machine and refrigerator (for ice maker).
Provide reverse osmosis water filtration at all sink areas, filtering water to
sink and the two 1/4" lines listed above.
APPLIANCES
At one coffee / lunch area per floor install dishwasher plus full sized
refrigerator and microwave. At other locations (one per floor) install
undercounter refrigerator, microwave, and instahot. Tenant will provide
dishwashers, refrigerators, and microwaves, at Tenant's expense.
MILLWORK
At all coffee lunch areas provide ▇. ▇▇▇. upper and lower cabinets and
countertop in a size appropriate to the space. Cabinets are to be drawer over
door configuration. Rolled edge at countertops. Undercabinet lighting at upper
cabinets. 4" brushed aluminum wire pulls. Budget premium laminates.
At work rooms / conference rooms see plan for extent of millwork. Lower
cabinets, similar to those at lunchrooms are to be provided.
At copy areas provide three plastic laminate shelves over copier. Heavy Duty KV
brackets and standards.
Provide pole and shelf at closets (in a number and size appropriate to the
space). See plan.
FINISHES
Paint throughout , eggshell finish, except as noted below, per building
standards.
Assume 25% of wall areas will be medium tone accent colors. Assume 25% of wall
areas will be deep tone accents.
Carpet throughout to be Interface Modular carpet - use the Aiki collection for
pricing.
VCT at appropriate areas, including kitchens, server room, storage rooms, copy
rooms. Assume Azrock premium in two color full tile pattern.
SCIENTIFIC LEARNING CORPORATION
Scope of Work Notes
March 15, 2000
Page 7
Static dissipative tile at fileserver room.
Rubber base throughout, to be 4" ▇▇▇▇▇, premium color.
At Reception area and three conference rooms assume wallcovering on all walls.
Use $35 / yard, contractor net for 54" wide paper backed material - no repeat.
Provide recessed fire extinguisher cabinets for all floors. Location to be
determined in the field.
Building standard exterior window treatments.
STRUCTURAL
The space plan currently indicates that the three columns in the conference
rooms on the 7th floor remain in place. Tenant and Landlord will obtain a cost
estimate from ▇▇▇▇▇▇ for the removal of each of the columns. After receiving the
cost estimate, Tenant will determine whether it wishes to have any or all of the
columns removed. If Tenant elects to have any of the columns removed, Tenant
will pay the cost of such removal, except for the first $40,000 of the cost of
the column removal, which will be paid by Landlord.
Landlord will provide necessary improvements to extend private elevator and
stairs from 6th floor to 5th floor.
DECKS
Landlord will provide and install appropriate floor coverings and/or decking for
at least 30% of the space marked as Roof on the space plans (6th and 7th
floors), if needed so that Tenant will be able to place deck furniture on and
otherwise use the roof space as a deck without damaging the roof surface.
GENERAL
Certificate of insurance providing proof of Commercial General Liability at
least $1,000,000 and Builders Risk coverage naming SLC as additional insured to
be furnished prior to start date of Tenant's buildout.
▇▇▇▇▇▇ SPECIAL PROJECTS, L.P.
A CALIFORNIA LIMITED PARTNERSHIP
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ - ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
TELEPHONE (▇▇▇) ▇▇▇ ▇▇▇▇ - FAX (▇▇▇) ▇▇▇ ▇▇▇▇
CONTRACTOR'S ISSUE NO. 726892
03/02/2000
▇▇. ▇▇▇▇ ▇▇▇▇▇▇
ROTUNDA PARTNERS, INC.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
RE: The Rotunda Building
▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Floors 5,6, and 7 - Scientific Learning
Dear Mr. Phil;
Enclosed please find our revised preliminary budget estimate for tenant
improvement work on the 5th, 6th, and 7th Floors at The Rotunda Building,
Oakland. Our budget price to perform this work is:
The ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇:
▇▇▇▇▇▇ ▇,▇, ▇▇▇ ▇ - ▇▇▇▇▇▇▇▇▇▇ Learning $4,080,224 $52.67/SF
----------
----------
Please reference the attached Exhibits A, B, C for proposal qualification.
The attached cost sheets represent a detailed breakdown of the work to be
conmpleted. We appreciate the opportunity to help you put this project
together. Please give me a call if you have any questions.
Sincerely,
▇▇▇▇▇▇ SPECIAL PROJECTS, ▇.▇.
▇▇▇▇▇▇ OPERATING, INC. GENERAL PARTNER
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
cc: ▇▇▇▇▇▇▇ Welterhouse - PSPL
▇▇▇▇ ▇▇▇▇▇▇▇▇ - PSPL
File
EXHIBIT A
DOCUMENTS AND SCHEDULE
The Rotunda Building
Scientific Learning Tenant Space
300 ▇▇▇▇▇ ▇. ▇▇▇▇▇ Plaza
03/02/2000
SCOPE OF WORK
Perform all work necessary to build-out the Scientific Learning Space on the
5th, 6th and 7th Floors at the Rotunda Building, Oakland. The scope of work
is defined by the following documents:
- Architectural Dimensions drawings sheets X-0, X-1, X-2, X-3, X-4, and
X-5 all undated.
- Rotunda Building Tenant Build-Out Letter dated 10/1/99.
- PSPL Exhibit A, B & C, attached.
SCHEDULE
The work shall be substantially complete twenty two (22) weeks from the date
notice to proceed is given and the receipt of finish materials, architectural
drawings, and issuance of the city building permit.
It is acknowledged that any costs needed to accelerate the work due to the
non-availability of a building permit standby time waiting for the City
inspections, or other causes not identifiable at the time subcontractor
bidding was solicited will be considred changes to the work.
EXHIBIT B
SPECIAL CONDITIONS FOR
The Rotunda Building
Scientific Learning Tenant Space
300 ▇▇▇▇▇ ▇. ▇▇▇▇▇ Plaza
03/02/2000
I. GENERAL
A. All work is prices to be done on regular time.
B. The project will be completed in one continuous phase.
C. All construction utilities (power, HVAD, water, etc.) to be provided
by Rotunda Partners, Inc.
D. All permit fees, plan check fees, and other similar type fees are
included.
E. Signage and identifying device work is excluded.
F. We have excluded all costs associated with installation and
termination of new tel/data cable. Cross-over connections of phone
lines at Main Riser must be performed by the Building Owner's
telecommunications subcontractor. Please coordinate in advance with
Building Management.
G. We will coordinate NIC vendors into our construction schedule,
however, we have not included removing and replacing ceiling tile or
providing clean-up for them beyond their scheduled work period.
H. All work in The Rotinda atrium, mechanical room, electrical room,
stair room, Tel/Data room, and all core common areas is excluded.
I. All Tel/Data work, signage, security and furniture is excluded.
J. The new ceiling is assumed to be below the Column Capitals so that
no work will be required to them.
K. We have included appliance installation only. Dishwasher and other
appliances to be furnished by others.
L. The Storage Area on the 6th floor is priced to be unfurnished.
M. We have included an allowance for structural support for a UPS
system in the 6th floor Server Room pending further clarification.
II. DEMOLTION
A. Rotunda atrium window wall demolition at main entry locations to be
by others.
III. MILLWORK
A. We have included refurbishing the existing wood base at perimeter
and installing new wood base to match existing where required.
B. New uppers and lowers for kitchens and copy areas are to be plastic
laminate finish.
IV. DOORS, FRAMES AND HARDWARE
A. All doors are priced as building standard.
V. BLINDS
A. Vertical blinds to be 3 1/2" pvc vanes.
B. We have not included blinds at interior office windows and side
files.
VI. LATH AND PLASTER
A. Existing plaster walls and columns to be patched and repaired and
receive new finish coat.
VII. GLASS - N/A
VIII. DRYWALL
A. All new ceiling height walls are priced using tapeable lap track
system.
B. We have included new 1-hour Partitions as noted.
C. We shall patch, finish tape and sand smooth for paint all existing
unfinished and/or damaged drywall partitions.
IX. ACOUSTICAL CEILING
A. We have included new building standard ceiling grid and tile.
X. PAINTING/WALLCOVERING
A. We have included painting of all new and existing walls and drywall
ceilings, and wood base within the space.
B. We have included painting and/or staining of new and existing doors
and frames.
XI. CARPET/BASE
A. We have included an allowance of $25/SY to furnish & install blue
down carpet.
B. We have included new rubber base throughout - except where wood base
is specified.
XII. PLUMBING
A. All new kitchen sinks include a garbage disposal, cold water lines
and Insta hots.
XIII. FIRE SPRINKLERS
A. We have included engineered drawings for Oakland Fire Dept. permit.
B. We have included new sprinkler heads as neccessary for this
build-out.
C. All work will be done on a Design Build basis.
XIV. HVAC
A. We have included air & water balancing.
B. All work will be done on a Design Build basis.
C. We have include 10 tons of additional cooling for the Server room that
will operate on a 24/7 basis.
XV. ELECTRICAL
A. Electrical Permit & Life Safety Permit are included.
B. We have included ring & string outlets only for the Telephone/Data
drops.
C. New electrical panel and 225 AMP feeder are included.
D. All work will be done on a Design Build basis.
THE ROTUNDA BUILDING ▇▇▇▇▇▇ SPECIAL PROJECTS, L.P.
300 ▇▇▇▇▇ ▇. ▇▇▇▇▇ Plaza TI CONSTRUCTION ESTIMATE
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Square Footage: (▇▇▇) ▇▇▇-▇▇▇▇
77,462 (▇▇▇) ▇▇▇-▇▇▇▇ FAX
03/02/2000
Duration: FLOORS 5,6 and 7
22 weeks Scientific Learning
--------------------------------------------------------------------------------------------------------
Total Project
No. Description Quantity U/M Unit Price Ext. Total SF Cost
--------------------------------------------------------------------------------------------------------
SOFT DEMOLITION - PSPL $18,462 $0.24
--------------------------------------------------------------------------------------------------------
1 Remove Damaged Lath & Plaster 50 hr 41.50 2075
2 Remove Damaged Flooring Substrate 180 hr 41.50 7470
3 Mlee Ceiling demo 100 hr 41.50 4150
4 Haul-out Debris (20 cy) 50 hr 41.50 2075
5 Debris Box 5 ea 400 2000
6 Demo partitions @ new entries 26 lf 12 312
7 Door cut-ins 2 sf 200 400
--------------------------------------------------------------------------------------------------------
MISC. WORK - PSPL $458,004 $5.89
--------------------------------------------------------------------------------------------------------
1 Repair Floor Substrate & Prep for
Underlayment 77,482 sf 0.15 11619
2 Composite Board 4' x 4' x 3/8"
Flooring Underlayment 77,482 sf ▇ ▇▇▇▇▇▇
3 Plywood Telephone Backboards 13 ss 250 3250
4 Open & Close Ceiling 4th Floor 1 ls 1500 1500
5 Fire Extinguisher Cabinets 27 ss 250 6750
6 Structural support for UPS
system-Server Room 1 sl 10000 10000
7 Remove existing stairs - 7th floor
restroom 1 ls 1500 1500
8 New stairs between restrooms-7th floor
restrooms 1 sl 2500 2500
9 Ramp for new restrooms 1 sp 1800 1800
10 Manual Folding Partition 1 ls 20000 20000
11 Exterior man lift 77,462 sf 1 77462
12 Elevator 1 sf 65000 65000
13 New interconnecting stairs 1 ls 100000 100000
--------------------------------------------------------------------------------------------------------
LEAD CONTAINMENT 320,000 $0.26
--------------------------------------------------------------------------------------------------------
1 Lead Containment 1 allow 20000 20000
--------------------------------------------------------------------------------------------------------
DOORS, FRAMES & HARDWARE - PSPL
--------------------------------------------------------------------------------------------------------
FURNISH ONLY $88,535.00
* FURNISH DOORS $24,050.00
1 Door 3080 Bldg Sld 61 ea 250 15250
2 Door 2680 Bldg Sld 4 ea 250 1000
3 Door 8080 Bldg Sld 13 ea 600 7800
* FURNISH FRAMES $14,565.00
1 Alum. Door Frame 3080 61 ea 130 7930
2 Alum. Door Frame 2680 4 ea 130 520
3 Alum. Glazing Frame 93 lf 35 3255
4 Alum. Door Frame 5080 13 ea 220 2860
* FURNISH HARDWARE $29,920.00
1 Locksale Schlege L Series 61 ea 250 18250
2 Cylinders 61 ea 25 1525
3 Lalchaeta Schlege L Series 4 ea 210 840
4 Hinges 348 ea 9 3132
5 Floor Stops 93 ea 8 588
6 Closets 26 ea 110 2860
7 Double Door hardware 13 ea 300 3900
8 Stainless Steel Kick Plates 24x44 4 pr 75 300
9 Coal Hooks 61 ea 25 1525
*INSTALL ONLY $34,016.00
1 Wood Door 3080 61 ea 75 4575
2 Wood Door 2880 4 ea 75 300
3 Entry Doors ▇▇▇▇ ▇▇▇ ▇▇▇ 13 ea 150 1950
4 Alum. Door Frames 3080 61 ea 76 4576
5 Alum. Door Frames 2680 4 ea 75 300
6 Alum. Glazing Frame 93 lf 35 3255
7 Alum. Door Frames 6080 13 ea 150 1950
8 Locksets 61 ea 55 3355
9 Latchsets 4 ea 30 120
10 Hinges 348 ea 5 1740
11 Floor Stops 98 ea 25 2450
12 Closers 26 ea 75 1950
13 Double Door hardware 13 ea 300 3900
14 Stainless Steel Kick Plates 24x44 4 ea 60 240
15 Coat Hooks 81 ea 15 915
THE ROTUNDA BUILDING ▇▇▇▇▇▇ SPECIAL PROJECTS, L.P.
300 ▇▇▇▇▇ ▇. ▇▇▇▇▇ Plaza TI CONSTRUCTION ESTIMATE
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Square Footage: (▇▇▇) ▇▇▇-▇▇▇▇
77,462 (▇▇▇) ▇▇▇-▇▇▇▇ FAX
03/02/2000
Duration: FLOORS 5,6 and 7
22 weeks Scientific Learning
--------------------------------------------------------------------------------------------------------
Total Project
No. Description Quantity U/M Unit Price Ext. Total SF Cost
--------------------------------------------------------------------------------------------------------
16 Keying 81 ea 40 2440
--------------------------------------------------------------------------------------------------------
LATH & PLASTER $55,858 $0.48
--------------------------------------------------------------------------------------------------------
1 Finish Coal at Existing Perimeter Wall 9082 sl 1.2 10898
2 Finish Coal at Existing Columns 9988 sl 3 24960
--------------------------------------------------------------------------------------------------------
MILL WORK $184,988 $2.39
--------------------------------------------------------------------------------------------------------
1 P ▇▇▇ Uppers & Lowers 111 lf 480 53280
2 Storage Room Adjustable Shelves 9 lf 70 830
3 Plastic Laminate Countertop 58 lf 70 4080
4 Restroom counter 38 lf 200 7200
5 Repair Exhaling Wood Base at Perimeter 918 lf 8 7329
6 Millwork doors 3 ea 1000 33000
7 Wood windows 285 lf 300 79500
--------------------------------------------------------------------------------------------------------
GLASS $7,220 $0.09
--------------------------------------------------------------------------------------------------------
1 1/4" Clear Tempered Glass 744 sf 8.50 8324
2 Restroom Mirrors 84 sf 14 396
--------------------------------------------------------------------------------------------------------
DRYWALL
--------------------------------------------------------------------------------------------------------
1 Perimeter ceiling at rotunda-
6th floor 2850 sf 10 28500
2 Perimeter ceiling at rotunda-
5th floor 2850 sf 2 8300
3 Sub Quote 1 ls 481520 481520
--------------------------------------------------------------------------------------------------------
CERAMIC TILE $37,913 $0.49
--------------------------------------------------------------------------------------------------------
1 Restroom walls 2300 sf 9.00 20700
2 Restroom floor 1530 sf 1.28 17213
--------------------------------------------------------------------------------------------------------
ACOUSTICAL CEILING $172,186 $2.22
--------------------------------------------------------------------------------------------------------
1 New 2x2 ▇▇▇▇ Fineline Cirrus 85402 sf 2.83 172185
--------------------------------------------------------------------------------------------------------
PAINTING & WC $84,138 $1.09
--------------------------------------------------------------------------------------------------------
1 Walls 131232 sf 0.48 50367
2 Ceilings 20250 sf 0.73 14783
3 Doors 31 ea 40.10 4168
4 Restroom walls/ceilings 2850 sf 1.00 2860
5 Baseboards-Painted 1720 lf 0.87 1889
--------------------------------------------------------------------------------------------------------
FLOORING $213,195 $2.75
--------------------------------------------------------------------------------------------------------
1 Carpet 8001 sf 0.25 200023
2 Rubber Base 10530 lf 1.25 13170
--------------------------------------------------------------------------------------------------------
TOILET PARTITIONS/ACCESSORIES $17,000 $0.22
--------------------------------------------------------------------------------------------------------
1 Toilet partitions 20 ea 500.00 10000
2 Toilet accessories 4 ea 1750.00 7000
--------------------------------------------------------------------------------------------------------
WINDOW TREATMENT $31,840 $0.41
--------------------------------------------------------------------------------------------------------
1 3 1/2" Vertical Blinds at Perimeter 113 ea 280 31840
--------------------------------------------------------------------------------------------------------
PLUMBING $98,480 $1.21
--------------------------------------------------------------------------------------------------------
1 New Sink Locations 4 ea 8100 25800
2 Condense Drain/Secondary Drain @AC Units 2 ea 1200 2400
3 Install Dishwasher 1 ea 400 400
4 Garbage Disposal 4 ea 350 1400
5 Restrooms 4.27 ea 5000 64050
6 Insta Hots 4 ea 850 2800
7 Water Lines for Appliances 4 ea 850 2800
--------------------------------------------------------------------------------------------------------
SPRINKLERS $205,274 $2.85
--------------------------------------------------------------------------------------------------------
1 New sprinkler distribution system 77462 sf 2.88 20527
--------------------------------------------------------------------------------------------------------
HVAC $276,805 $3.57
--------------------------------------------------------------------------------------------------------
1 Cooling only zones w/Pneumatic
Controls 48 ea 180000 89700
2 Reneal Zones w/pneumatic controls 34 ea 200000 15200
3 Exhaust Fan 5 ea 750 3750
4 6 Tan Server Room 2 ea 9400 10000
5 Fire/Smoke Dampers 3 ea 750 2250
THE ROTUNDA BUILDING ▇▇▇▇▇▇ SPECIAL PROJECTS, L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ CONSTRUCTION ESTIMATE
Square Footage ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇,▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
03/02/00 (▇▇▇) ▇▇▇ ▇▇▇▇
(▇▇▇) ▇▇▇ ▇▇▇▇ FAX
Duration: FLOORS 5,6 AND 7
28 weeks SCIENTIFIC LEARNING
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
Total Project
---------------------------------------------------------------------------------------------------------------------------------
No. Description Quantity U/M Unit Price Ext. Total SF Cost
---------------------------------------------------------------------------------------------------------------------------------
6 Hotwater Pipe Extension 1085 oa 21 22785
7 Pipe Extension Insulation 1085 ls 4 4866
8 After Hours Control Switch 7 ls 510.00 4200
9 Engineering 72200 sf 0.25 18050
10 Air and Water Balance 80 ea 150 12000
11 Permit 1 es 400 400
12 Restrooms 2 ea 2500 5000
---------------------------------------------------------------------------------------------------------------------------------
ELECTRICAL $797,838 $8.53
---------------------------------------------------------------------------------------------------------------------------------
1 Subquotes 1 la 737938 737938
---------------------------------------------------------------------------------------------------------------------------------
FINAL CLEAN - PSPL $ 9,818 $0.13
---------------------------------------------------------------------------------------------------------------------------------
1 Final clean 66482 sf 0.15 9819
THE ROTUNDA BUILDING ▇▇▇▇▇▇ SPECIAL PROJECTS, L.P.
300 ▇▇▇▇▇ ▇. ▇▇▇▇▇ Plaza TI CONSTRUCTION ESTIMATE
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Square Footage: (▇▇▇) ▇▇▇-▇▇▇▇
77,462 (▇▇▇) ▇▇▇-▇▇▇▇ FAX
03/02/2000
Duration: FLOORS 5,6 and 7
22 weeks Scientific Learning
--------------------------------------------------------------------------------------------------------
Total Project
No. Description Quantity U/M Unit Price Ext. Total SF Cost
--------------------------------------------------------------------------------------------------------
SUBTOTAL $53,222,761
BUILDING PERMIT 548,341
GENERAL CONDITIONS $196,266
PL/PD $58,948
G.R.T. $6,947
SUBTOTAL $3,532,862
FEE $176,633
CONTINGENCY $370,929
TOTAL PRICE $4,080,224 $62.57