000 XXXXXX XXXXXX
OFFICE BUILDING LEASE
BASIC LEASE INFORMATION
DATE OF LEASE: October 1, 1999
LANDLORD: CEP INVESTORS XII LLC
XXXXXXXX'S ADDRESS: c/o Xxxxx Xxxxxxxx, Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxx
TENANT: XXXXXXX.XXX INC.
TENANT'S ADDRESS: 000 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xx. Xxxxxxx X. Xxxxxxxx
BUILDING: 000 Xxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx
LEASED PREMISES: Approximately 50,833 rentable square feet consisting of
the entire 8th (approximately 12,747 rentable square
feet), 9th (approximately 12,703 rentable square feet),
10th (approximately 12,672 rentable square feet), and
11th (approximately 12,711 rentable square feet) floors
of the Building
RENTABLE AREA: Approximately 50,833 rentable square feet
TERM COMMENCEMENT DATE: The date the Tenant Improvements are Substantially
Complete (estimated to be April 1, 2000)
TERM EXPIRATION DATE: The last day of the calendar month in which the tenth
(10th) anniversary of the Term Commencement Date occurs
OPTION TO EXTEND: Number of Extension Periods: One (1)
Years per Extension Period: Five (5)
BASE RENT: MONTHS 1 AND 2 = $0.00 per rentable square foot of
Rentable Area per annum.
MONTHS 3 TO 12 = $37.00 per rentable square foot of
Rentable Area per annum.
MONTHS 13 TO 60 = $39.25 per rentable square foot of
Rentable Area per annum
MONTHS 61 TO 84 = $42.00 per rentable square foot of
Rentable Area per annum
MONTHS 85 TO 108 = $44.00 per rentable square foot of
Rentable Area per annum
MONTHS 109 TO 120 = $45.00 per rentable square foot of
Rentable Area per annum
BASE YEAR: 2000
TENANT'S PROPORTIONATE SHARE (BUILDING): approximately 19.84%
SECURITY DEPOSIT: $2,500,000.00 (as set forth in SECTION 5.14)
GUARANTOR: None
LANDLORD'S BROKER: The CAC Group
TENANT'S BROKER: Colliers International
[REMAINDER OF XXXX INTENTIONALLY LEFT BLANK; SIGNATURE PAGE TO FOLLOW.]
The foregoing BASIC LEASE INFORMATION is incorporated herein and made a
part of the LEASE to which it is attached. If there is any conflict between the
BASIC LEASE INFORMATION and the LEASE, the BASIC LEASE INFORMATION shall
control.
"LANDLORD":
CEP INVESTORS XII LLC,
a Delaware limited liability company
By: EPI Investors XII LLC,
a California limited liability company
Its Manager
By: Xxxxx Xxxxxxxx, Inc.,
a California corporation,
Its Manager
By: /s/
--------------------------------
Typed Name:_______________________
Title: ____________________________
"TENANT":
XXXXXXX.XXX INC,
a Washington corporation
By: /s/ Xxx Xxxxxxxxx
----------------------------------
Typed Name: Xxx Xxxxxxxxx
--------------------------
Title: Chief Operating Officer
-------------------------------
By: _____________________________
Typed Name:________________________
Title: _____________________________
iii
OFFICE BUILDING LEASE
THIS LEASE, made as of the date specified in the BASIC LEASE INFORMATION
sheet, by and between the landlord specified in the BASIC LEASE INFORMATION
sheet ("Landlord") and the tenant specified in the BASIC LEASE INFORMATION sheet
("Tenant").
ARTICLE 1.
DEFINITIONS
1.01 DEFINITIONS: Terms used herein shall have the following meanings:
1.02 "ADDITIONAL RENT" shall mean all monetary obligations of Tenant
under this Lease other than the obligation for payment of Gross Rent.
1.03 [Intentionally deleted.]
1.04 "BASE RENT" shall mean the sums due from time to time as rental for
the Leased Premises.
1.05 "BASE YEAR" shall mean the calendar year specified on the Basic
Lease Information sheet.
1.06 "BASIC OPERATING COST" shall have the meaning given in SECTION 3.05.
1.07 "BUILDING" shall mean the building and other improvements associated
therewith identified on the Basic Lease Information sheet.
1.08 "BUILDING STANDARD IMPROVEMENTS" shall mean the standard materials
ordinarily used by Landlord in the improvement of the Leased Premises.
1.09 "COMMON AREAS" shall mean (a) the areas on individual floors of the
Building devoted to non-exclusive uses such as common corridors, lobbies, fire
vestibules, elevator foyers, stairways, elevators, electric and telephone
closets, restrooms, mechanical closets, janitor closets and other similar
facilities for the benefit of all tenants (and invitees) on the particular floor
and other floors and (b) other areas of the Project available for the use and
benefit of all tenants (and invitees).
1.10 "COMPUTATION YEAR" shall mean a fiscal year consisting of the
calendar year commencing January 1st of each year during the Term, commencing
in the Base Year and continuing through the Term, with a short or stub fiscal
year in any partial fiscal year in which the Lease expires or is terminated for
the period between January 1 of such year and the date of lease termination or
expiration.
1.11 "GROSS RENT" shall mean the total of Base Rent and Tenant's
Proportionate Share of Increased Basic Operating Cost.
1.12 "LANDLORD'S BROKER" shall mean the individual or corporate broker
identified on the Basic Lease Information sheet as the broker for Landlord.
1.13 "LANDLORD'S CONTRIBUTION" shall have the meaning given in EXHIBIT B.
1
1.14 "LANDLORD'S IMPROVEMENTS" shall have the meaning given in EXHIBIT B.
1.15 "LEASED PREMISES" shall mean the floor area more particularly shown
on the floor plan attached hereto as EXHIBIT A, containing the Rentable Area (as
such term is defined in SECTION 1.20 below) specified on the Basic Lease
Information sheet.
1.16 "PERMITTED USE" shall mean primarily general office and the
ancillary use of preparation and photography (but not film processing) of food
items and other general items for inclusion in catalogs (in a variety of media),
and any other related lawful use; provided, however, that Permitted Use shall
not include (a) offices or agencies of any foreign government or political
subdivision thereof; (b) offices of any agency or bureau of any state, county or
city government; (c) offices of any health care professionals; (d) schools or
other training facilities which are not ancillary to corporate, executive or
professional office use; or (e) retail or restaurant uses.
1.17 "PROJECT" shall mean the Building and common areas affiliated
therewith, and the real property on which the Building and common areas are
located.
1.18 "PROPERTY TAXES" shall have the meaning given in SECTION 3.06.
1.19 "RENT" shall mean Gross Rent plus Additional Rent.
1.20 "RENTABLE AREA" shall mean the area or areas of space in the
Building determined in accordance with the Standard Method for Measuring
Floor Area in Office Buildings published by the Building Owners and Managers
Association International (ANSI-Z65.1-1996) and including a proportionate
allocation of the square footage of the Building's elevator and mechanical
equipment areas, telephone and electrical rooms, loading dock, janitorial
service areas, public lobbies and corridors. The Rentable Area of the Leased
Premises has been calculated on the basis of the foregoing definition and is
agreed for all purposes of this Lease to be the amount stated on the Basic Lease
Information sheet, subject to remeasurement by Landlord only in the event of a
change in method of measurement for the Building or Project as hereinabove
provided.
1.21 "SECURITY DEPOSIT" shall mean the amount specified on the Basic
Lease Information sheet to be paid by Tenant to Landlord and held and applied
pursuant to SECTION 5.14.
1.22 "SUBSTANTIAL COMPLETION" shall mean (and the Leased Premises shall
be deemed "Substantially Complete") when (i) installation of the Tenant
Improvements and the Landlord's Improvements (as defined in EXHIBIT B) by the
Contractor has occurred; (ii) Tenant has direct access from the street to
the elevator lobby on the floor (or floors) where the Leased Premises are
located; (iii) basic services (as described in SECTION 4.01) are available to
the Leased Premises; (iv) the Architect (as defined in EXHIBIT B) has issued a
certificate of Substantial Completion with respect to the Leased Premises; and
(v) a certificate of occupancy or its equivalent for the Leased Premises has
been issued by appropriate governmental authorities. Substantial Completion
shall be deemed to have occurred notwithstanding a requirement to complete
"punchlist" items or similar corrective work.
1.23 [Intentionally deleted.]
1.24 "TENANT IMPROVEMENTS" shall have the meaning given in EXHIBIT B.
1.25 "TENANT'S BROKER" shall mean the individual or corporate broker
identified on the Basic Lease Information sheet as the broker for Tenant.
1.26 "TENANT'S PHYSICAL POSSESSION DATE" shall mean February 15, 2000.
1.27 "TENANT'S PROPORTIONATE SHARE" is specified on the Basic Lease
Information sheet and is based on the percentage which the Rentable Area of the
Leased Premises bears to the total Rentable Area of the Project, subject to
adjustment in the event of the remeasurement of the Building or the Project as
permitted under SECTION 1.20 above.
1.28 "TERM" shall mean the period commencing with the Term Commencement
Date and ending at midnight on the Term Expiration Date.
1.29 "TERM COMMENCEMENT DATE" shall be the date set forth on the Basic
Lease Information sheet.
1.30 "TERM EXPIRATION DATE" shall be the date set forth on the Basic
Lease Information sheet, unless sooner terminated pursuant to the terms of this
Lease or unless extended pursuant to the provisions of SECTION 8.01.
1.31 OTHER TERMS. Other terms used in this Lease and on the Basic Lease
Information sheet shall have the meanings given to them herein and thereon.
ARTICLE 2.
LEASED PREMISES
2.01 LEASE. Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord the Leased Premises upon all of the terms, covenants and
conditions set forth in this Lease.
2.02 ACCEPTANCE OF LEASED PREMISES. Tenant acknowledges that: (a) it
has been advised by Landlord, Landlord's Broker and Xxxxxx's Broker, if any,
to satisfy itself with respect to the condition of the Leased Premises
(including, without limitation, the heating, ventilation, electrical, plumbing
and other mechanical installations, fire sprinkler systems, security,
environmental aspects, and compliance with applicable laws, ordinances, rules
and regulations) and the present and future suitability of the Leased Premises
for Tenant's intended use; (b) Tenant has made such inspection and investigation
as it deems necessary with reference to such matters and assumes all
responsibility therefor as the same relate to Xxxxxx's occupancy of the Leased
Premises and the term of this Lease; and (c) neither Landlord nor Landlord's
Broker nor any of Landlord's agents has made any oral or written representations
or warranties with respect to the condition, suitability or fitness of the
Leased Premises other than as may be specifically set forth in this Lease or
otherwise made in connection with the completion of the Landlord Improvements
described in EXHIBIT B. Tenant accepts the Leased Premises in its AS IS
condition existing on the date Tenant executes this Lease, subject to (i) all
matters of record, (ii) applicable laws, ordinances, rules and regulations, and
(iii) the completion of the Landlord Improvements and the Tenant Improvements
described in EXHIBIT B. Tenant acknowledges that neither Landlord nor
Landlord's Broker nor any of Landlord's agents has agreed to undertake any
alterations or additions or to perform any maintenance or repair of the Leased
Premises except as set forth in this Lease and except as may be expressly set
forth in EXHIBIT B.
2.03 RIGHT TO RELOCATE LEASED PREMISES. [intentionally deleted].
2.04 RESERVATION OF RIGHTS. Landlord reserves the right from time to
time, so long as reasonable access and basic services to the Leased Premises
remain available, to install, use, maintain, repair, relocate and/or replace
pipes, conduits, wires and equipment within and around the Building and to do
and perform such other acts and make such other changes in, to or with respect
to the Building or the
Project (including without limitation with respect to the driveways, parking
areas (if any), walkways and entrances to the Project) as Landlord may, in the
exercise of sound business judgment, deem to be appropriate; provided,
however, that in all events Landlord shall exercise its reserved right in a
manner that is consistent with all of Tenant's then-current security measures
for the Leased Premises, does not unreasonably interfere with Tenant's use and
occupancy of the Leased Premises, and does not reduce the Rentable Area of the
Leased Premises, without Tenant's prior written consent, which consent shall
not be unreasonably withheld, conditioned, or delayed. In connection
therewith, Landlord shall have the right to close temporarily any of the
Common Areas so long as reasonable access to the Leased Premises remains
available to Tenant and Tenant's licensees and invitees.
ARTICLE 3.
TERM, USE AND RENT
3.01 TERM. Except as otherwise provided in this Lease, the Term shall
commence upon the Term Commencement Date, and shall continue in full force
for the Term. Tenant shall be given access to the Leased Premises starting
on the Tenant's Physical Possession Date in order for Tenant and other
consultants and/or Tenant's contractors to install, if any, furniture, telephone
networks, and computer networks as long as such work does not interfere with the
construction of the Tenant Improvements and the Landlord's Improvements.
Notwithstanding any other provision of this Lease to the contrary, if physical
possession to the Leased Premises is not given to Tenant by June 1, 2000,
excluding from such tally (x) each day of TENANT DELAY, and (y) each day of
delay caused by factors entirely beyond the reasonable control of Landlord, then
Tenant, as its sole remedy, may, at its option, by notice in writing to Landlord
within ten (10) days thereafter, cancel this Lease in which event neither
Landlord nor Tenant shall have any further obligations hereunder. If written
notice of cancellation is not received by Landlord within such ten (10)-day
period, Tenant's right to cancel this Lease shall terminate and be of no further
force or effect. From the Tenant's Physical Possession Date through the Term
Commencement Date, Tenant shall be subject to all of the covenants in this
Lease, except that Tenant's obligation to pay Rent shall commence in accordance
with SECTION 3.03 below. When the Term Commencement Date and the Term
Expiration Date have been ascertained, the parties shall promptly execute a
Confirmation of Term of Lease substantially in the form attached as EXHIBIT C.
3.02 USE. Tenant shall use the Leased Premises solely for the Permitted
Use and for no other use or purpose, except as permitted by Landlord pursuant
to Landlord's written consent, which consent will not be unreasonably withheld,
conditioned, or delayed. It shall not be deemed unreasonable for Landlord to
withhold its consent to a proposed change of use if the proposed use is one set
forth in SECTION 1.16(a) through (e).
3.03 BASE RENT.
(a) Tenant shall pay the Base Rent to Landlord in accordance with
the schedule set forth on the Basic Lease Information sheet and in the manner
described below. Tenant shall pay the Base Rent for the THIRD (3rd) month of
the Term upon execution of this Lease. Commencing with the first day of the
FOURTH (4th) calendar month of the Term, Tenant shall pay the Gross Rent
(consisting of Base Rent plus, when applicable in accordance with SECTION 3.04
below, Tenant's Proportionate Share of Increased Basic Operating Cost and/or
Tenant's Proportionate Share of Increased Property Taxes) in monthly
installments on or before the first day of each calendar month during the Term
and any extensions or renewals thereof, in advance without demand and without
any reduction, abatement, counterclaim or setoff, except as otherwise set forth
in this Lease, in lawful money of the United States at Landlord's address
specified on the Basic Lease Information sheet or at such other address as may
be designated by Landlord in the manner provided for giving notice under
SECTION 9.11 hereof.
(b) Notwithstanding any other provision of this Lease to the contrary,
if the Term Commencement Date occurs on a day other than the first day of a
month, then the Base Rent provided for such partial month shall be prorated
based upon a thirty (30)-day month and the prorated installment shall be paid
on the first day of the third (3rd) full calendar month after the Term
Commencement Date together with the other amounts payable on that day. If
the Term terminates on other than the last day of a calendar month, then the
Gross Rent provided for such partial month shall be prorated based upon a
thirty (30)-day month and the prorated installment shall be paid on the first
day of the calendar month in which the date of termination occurs.
3.04 TENANT'S PROPORTIONATE SHARE OF INCREASED BASIC OPERATING COST.
(a) Commencing in the 2001 Computation Year and continuing through the
remainder of the Term, Tenant shall pay to Landlord (i) Tenant's
Proportionate Share of the total dollar increase, if any, in Basic Operating
Cost attributable to each Computation Year over Base Year expenses ("Tenant's
Proportionate Share of Increased Basic Operating Cost"), and (ii) Tenant's
Proportionate Share of the total dollar increase, if any, in Property Taxes
attributable to each Computation Year over Base Year Property Taxes
("Tenant's Proportionate Share of Increased Property Taxes").
(b) During the 2001 Computation Year, on or before the first day of
each month during such Computation Year, Tenant shall pay to Landlord
one-twelfth (1/12th) of Landlord's reasonable estimate of the amounts payable
by Tenant under SECTION 3.04(a) for Tenant's Proportionate Share of Increased
Basic Operating Cost and for Tenant's Proportionate Share of Increased
Property Taxes, as set forth in Landlord's written notice to Tenant delivered
on or before the Term Commencement Date. Commencing in the 2000 Computation
Year and continuing thereafter through the remainder of the Term, during the
last month of each Computation Year (or as soon thereafter as practicable),
Landlord shall give Tenant notice of Landlord's reasonable estimate of the
amounts payable by Tenant under SECTION 3.04(a) for Tenant's Proportionate
Share of Increased Basic Operating Cost and for Tenant's Proportionate Share
of Increased Property Taxes for the following Computation Year. On or before
the first day of each month during the following Computation Year, Tenant
shall pay to Landlord one-twelfth (1/12) of each of such estimated amounts,
provided that if Landlord fails to give such notice in the last month of the
prior year, then Tenant shall continue to pay on the basis of the prior
Computation Year's estimate until the first day of the calendar month next
succeeding the date such notice is given by Landlord; and from the first day
of the calendar month following the date such notice is given, Tenant's
payments shall be adjusted so that the estimated amount for that Computation
Year will be fully paid by the end of that Computation Year. If at any time
or times Landlord reasonably determines that the amount or amounts payable
under SECTION 3.04(a) for Tenant's Proportionate Share of Increased Basic
Operating Cost and/or for Tenant's Proportionate Share of Increased Property
Taxes for the current Computation Year will vary from the respective estimate
thereof given to Tenant, Landlord, by not less than ten (10) business days'
notice to Tenant, may revise such estimate for such Computation Year, and
subsequent payments by Tenant for such Computation Year shall be based upon
such revised estimate.
(c) Following the end of each Computation Year (beginning with the 2001
Computation Year), but in no event later than one hundred twenty (120) days
after the end of such Computation Year, Landlord shall deliver to Tenant a
statement of amounts payable under SECTION 3.04(a) for such Computation Year
prepared by Xxxxxxxx's agent, together with such supporting documentation,
including information about such amounts payable during the Base Year, as
Tenant may reasonably request. If Landlord fails to deliver such a statement
to Tenant within such one hundred twenty (120) day period, Landlord shall be
deemed to have waived and forfeited any right Landlord may have to collect
any underpayment by Tenant for such Computation Year, but nothing herein
shall prevent Tenant from requiring Landlord to deliver such a statement
after such one hundred twenty (120) day period and
receiving a credit for any overpayment shown thereby. If such statement shows
an amount or amounts owing by Tenant with respect to Basic Operating Cost or
Property Taxes that is less than the payments for such Computation Year
previously made by Tenant therefor, respectively, Landlord shall credit such
amount to the next payment(s) of Gross Rent falling due under this Lease. If
such statement shows an amount owing by Tenant with respect to Basic Operating
Cost or Property Taxes that is more than the estimated payments for such
Computation Year previously made by Tenant therefor, respectively, Tenant
shall pay the deficiency to Landlord within twenty (20) business days after
delivery of such statement. If, within ninety (90) days of Tenant's receipt
of Landlord's statement, Tenant notifies Landlord that Tenant desires to audit
or review Landlord's statement, Landlord shall cooperate with Tenant to permit
such audit or review during normal business hours. Any such audit may only be
conducted by an independent nationally recognized accounting firm or a
nationally recognized real estate management or consulting firm that is not
being compensated by Xxxxxx on a contingency fee basis, with the assistance of
Xxxxxx's legal counsel. Landlord shall make available in the San Francisco
Bay Area at Landlord's, or at Landlord's election at Landlord's property
manager's, place of business, such books and records as are reasonably
necessary for Tenant to conduct and complete such audit. Tenant shall have
the right to make copies of such books and records at Xxxxxx's sole cost and
expense, except as otherwise set forth in this SECTION 3.04. Except as
otherwise set forth in this SECTION 3.04, Tenant shall bear all other costs
and expenses associated with Tenant's audit (including fees of Tenant's
auditor). Within ten (10) business days of completion of the audit, if Tenant
desires to challenge Xxxxxxxx's statement, then Tenant shall provide Landlord
with a copy of Tenant's auditor's report. Within thirty (30) days of
Xxxxxxxx's receipt of Xxxxxx's auditor's report, Landlord shall notify Tenant
as to whether Xxxxxxxx agrees or disagrees with the conclusions reached in
Xxxxxx's auditor's report. Xxxxxxxx's failure to respond shall be deemed to
constitute a disagreement with the Tenant's auditor's report. If Xxxxxxxx
agrees with the conclusions of Xxxxxx's auditor's report showing a discrepancy
in Xxxxxx's favor, then Landlord shall credit the amount of such discrepancy
to the payment of Gross Rent due or falling due under this Lease. If,
however, Xxxxxxxx disagrees with, or is deemed to disagree with, Xxxxxx's
auditor's report, Landlord and Tenant shall endeavor to resolve any
disagreements regarding Xxxxxx's auditor's report. If Landlord and Xxxxxx are
unable to resolve such disagreement regarding Xxxxxx's auditor's report within
twenty (20) business days after Xxxxxxxx's notice of disagreement or failure
to respond, then Landlord and Tenant shall submit the matter to an independent
audit conducted by an independent nationally recognized accounting firm or a
nationally recognized real estate management or consulting firm that has been
mutually selected by Xxxxxx and Landlord. The results of such independent
audit shall be conclusive and binding upon Landlord and Tenant. In the event
such independent audit reveals a discrepancy in Tenant's favor, then Landlord
shall credit the amount of such discrepancy to the payment of Gross Rent due
or falling due under this Lease. In the event such independent audit reveals
a discrepancy in Landlord's favor, Tenant shall pay the amount of the
discrepancy to Landlord within twenty (20) business days of completion of the
audit. The failure of Tenant to notify Landlord that Tenant desires an audit
within ninety (90) days of Tenant's receipt of Landlord's statement under this
SECTION 3.04(c) shall constitute an acceptance by Tenant of Landlord's
statement and a waiver by Tenant of its right to audit for such Computation
Year. If Tenant commences an audit in accordance with this SECTION 3.04(c),
then such audit and the Tenant's auditor's report must be completed within
sixty (60) days of Tenant's notice to Landlord of Tenant's desire to audit
provided that such sixty (60) day period shall be extended, day-for-day, for
each day Landlord prevents or delays the conduct of such audit. Failure of
Tenant to complete the audit within such sixty (60) day period (as the same
may be extended for Landlord delays) shall constitute an acceptance by Tenant
of Landlord's statement for such Computation Year. The respective obligations
of Landlord and Tenant under this SECTION 3.04(c) shall survive the Term
Expiration Date, and, if the Term Expiration Date is a day other than the last
day of a Computation Year, the adjustments in Tenant's Proportionate Share of
Increased Basic Operating Cost and in Tenant's Proportionate Share of
Increased Property Taxes pursuant to this SECTION 3.04(c) for the Computation
Year in which the Term Expiration Date occurs shall be prorated in the
proportion that the number of days in such Computation Year preceding the Term
Expiration Date bears to three hundred sixty-five (365). Notwithstanding any
other provision of this
Lease to the contrary, in the event any Tenant's auditor's report to which
Xxxxxxxx agrees with the auditor's conclusions or any independent audit reveals
a discrepancy in the amount actually owed by Tenant for Basic Operating Cost,
Increased Property Taxes, or both, of more than four percent (4%), then Landlord
shall bear all of the costs and expenses of the audits (including Tenant's
audit).
(d) Landlord shall have the same remedies for a default in the payment
of Tenant's Proportionate Share of Increased Basic Operating Cost or for a
default in the payment of Tenant's Proportionate Share of Increased Property
Taxes as for a default in the payment of Base Rent.
3.05 BASIC OPERATING COST.
(a) Basic Operating Cost shall mean all expenses and costs (but not
specific costs which are separately billed to and paid by particular tenants
of the Building) of every kind and nature which Landlord shall pay or become
obligated to pay because of or in connection with the management, ownership,
maintenance, repair, preservation and operation of the Project and its
supporting facilities directly servicing the Project (determined in
accordance with generally accepted accounting principles, consistently
applied) including, but not limited to, the following:
(1) Wages, salaries and related expenses and benefits of all
on-site and off-site employees and personnel engaged in the operation,
maintenance, repair and security of the Project, to the extent such charges
are directly allocable to services rendered by the employees and personnel
for the benefit of the Project.
(2) Costs of Landlord's office (including the property management
office) and office operation in the Project, as well as the costs of
operation of a room for delivery and distribution of mail to tenants of the
Building.
(3) All supplies, materials, equipment and equipment rental used
in the operation, maintenance, repair and preservation of the Project.
(4) Utilities, including water, sewer and power, telephone,
communication and cable television facilities, lighting, heating and
ventilating the entire Project.
(5) All maintenance, janitorial and service agreements for the
Project and the equipment therein, including, without limitation, alarm
and/or security service, window cleaning, elevator maintenance, sidewalks,
landscaping, Building exterior and service areas.
(6) A management cost recovery in an amount not to exceed five
percent (5%) of all Rent (excluding such management cost recovery) derived
from the Building.
(7) Legal and accounting services for the Project, including the
costs of audits by certified public accountants (other than audits for which
Landlord must bear the cost pursuant to SECTION 3.04; provided, however, that
legal expenses shall not include the cost of lease negotiations, termination
of leases, extension of leases or legal costs incurred in proceedings by or
against any specific tenant.
(8) All insurance costs, including, but not limited to, the cost
of all risk property and liability coverage and rental income and earthquake
insurance applicable to the Project and Landlord's personal property used in
connection therewith, as well as commercially reasonable deductible amounts
applicable to such insurance; provided, however, that Landlord may, but shall
not be obligated to, carry earthquake insurance, but if Landlord does not
obtain earthquake insurance in the Base Year, but
thereafter chooses to obtain such insurance, Landlord shall adjust the Basic
Operating Costs for the Base Year to include an amount equal to the premium
for such insurance that would have been paid if such insurance had been
obtained in the Base Year.
(9) Repairs, replacements and general maintenance (except for
repairs paid by proceeds of insurance or by Tenant or other tenants of the
Building or third parties, and alterations attributable solely to specific
tenants of the Project.
(10) Amortization (together with reasonable financing charges) of
capital improvements made to the Project subsequent to the Term Commencement
Date which are designed to and do improve the operating efficiency of the
Project, in Landlord's reasonable opinion, or which may be required by
governmental authorities, including those improvements required for energy
conservation and for the benefit of individuals with disabilities ("ADA
Improvements"), in relation to new laws or changes in existing laws,
applicable to the Building, which arise or take affect after the date of this
Lease.
(b) In the event any of the Basic Operating Costs are not allocable
solely to the Building or are not provided on a uniform basis within the
Building, Landlord shall make an appropriate and equitable adjustment, in
Landlord's reasonable discretion, to the relevant cost allocations to the
Building and the Leased Premises and Tenant shall pay only its proportionate
share of any increase in the amounts allocable to the Building and the Leased
Premises over the amounts so allocated in the Base Year on a consistent basis.
(c) Notwithstanding any other provision of this Lease to the contrary,
in the event that the Project is not fully occupied during any year of the
Term, an adjustment shall be made in computing Basic Operating Cost for such
year (including the Base Year) so that Basic Operating Cost shall be computed
as though the Building had been 95% occupied during such year.
(d) The following items shall be excluded from Basic Operating Costs:
(i) depreciation on the Building and the Project; (ii) debt service; (iii)
rental under any ground or underlying lease; (iv) attorneys' fees and
expenses incurred in connection with lease negotiations with prospective
Project tenants or alleged defaults with Project tenants; (v) the cost of any
improvements or equipment which would be properly classified as capital
expenditures (except for any capital expenditures expressly included in
SECTION 3.05(a), including, without limitation, SECTION 3.05(a)(10)); the
cost of decorating, improving for tenant occupancy, painting or redecorating
portions of the Building to be demised to tenants; (vii) advertising expenses
relating to vacant space; (viii) real estate brokers' or other leasing
commissions; and (ix) Property Taxes.
3.06 PROPERTY TAXES.
(a) "Property Taxes" shall mean all real estate or personal property
taxes, possessory interest taxes, business or license taxes or fees, service
payments in lieu of such taxes or fees, annual or periodic license or use
fees, excises, transit charges, housing fund assessments, open space charges,
assessments, bonds, levies, fees or charges, general and special, ordinary
and extraordinary, unforeseen as well as foreseen, of any kind which are
assessed, levied, charged, confirmed or imposed by any public authority upon
the Project (or any portion or component thereof), its operations, this
Lease, or the Rent due hereunder (or any portion or component thereof),
except: (i) inheritance or estate taxes imposed upon or assessed against the
Project, or any part thereof or interest therein, (ii) Landlord's personal or
corporate income, gift or franchise taxes; or (iii) any other fees or
payments in lieu of the taxes described in clauses (i) and (ii) hereof.
(b) In the event any of the Property Taxes are not allocable between
the Leased Premises, the Building and other improvements in the Project on a
uniform basis, Landlord shall make an appropriate and equitable adjustment,
in Landlord's reasonable discretion, to the relevant allocations of Property
Taxes to the Leased Premises or the Building and Tenant shall pay only its
proportionate share of any increase in the amounts allocable to the Building
and the Leased Premises over the amounts so allocated in the Base Year on a
consistent basis.
(c) Notwithstanding any other provision of this Lease to the contrary,
in the event that the Project is not fully occupied during any year of the
Term, an adjustment shall be made in computing Property Taxes for such year
(including the Base Year) so that Property Taxes shall be computed as though
the Building had been 95% occupied during such year.
ARTICLE 4.
LANDLORD'S COVENANTS
4.01 BASIC SERVICES. Landlord shall operate the Project to a standard
of quality consistent with that of other similar-class office projects in the
immediate geographical area, and shall:
(a) Administer the improvement of the Leased Premises in accordance
with EXHIBIT B, and cause the Landlord Improvements described therein to be
made as and when set forth in EXHIBIT B.
(b) Furnish Tenant during Xxxxxx's occupancy of the Leased Premises the
following basic services:
(1) Hot and cold water at those points of supply set forth in
EXHIBIT B within the Leased Premises and at such other points of supply
maintained for general use of tenants in the Project; steam heating and
ventilating during the Building hours of operation specified in the rules and
regulations for the Project adopted pursuant to SECTION 5.17 and at such
temperatures, during such seasons, and in such amounts as are standard for
the comfortable use and occupancy of similar Class A office buildings and the
Leased Premises or, in all events, as may be permitted or controlled by
applicable laws, ordinances, rules and regulations. Notwithstanding the
foregoing, the Building does not have central air conditioning; however, a
condenser water loop serves each floor of the Building for access to
condensed water for Tenant's air conditioning needs (Tenant, at its sole
cost, shall be responsible for the installation, operation and maintenance of
such air conditioning units, if needed), which installation may, at Tenant's
option be part of the Tenant Improvements described in EXHIBIT B and paid for
with Landlord's Contribution).
(2) Structural and exterior maintenance (including exterior glass
and glazing) and routine maintenance, repairs and electric lighting service
for all public areas and service areas of the Project.
(3) Janitorial service on a five (5) day per week basis, excluding
holidays.
(4) Electric lighting service throughout the Leased Premises and
electrical facilities to provide sufficient power to meet the electricity
requirements set forth in EXHIBIT B.
(5) Building Standard lamps, bulbs, starters and ballasts used in
the Leased Premises.
(6) Public elevator service serving the floors on which the Leased
Premises are situated twenty-four (24) hours per day, seven (7) days per
week, including freight elevator service when
prearranged with Landlord, subject to such rules and regulations as Landlord
shall promulgate from time to time.
(c) Landlord shall not be liable for damages to either person or
property, nor shall Landlord be deemed to have evicted Tenant, nor shall
there be any abatement of Rent, nor shall Tenant be relieved from performance
of any covenant on its part to be performed under this Lease by reason of any
(i) deficiency in the provision of basic services; (ii) breakdown of
equipment or machinery utilized in supplying services; or (iii) curtailment
or cessation of services due to causes or circumstances beyond the reasonable
control of Landlord or by the making of the necessary repairs or
improvements, unless such deficiency, breakdown, curtailment or cessation is
due to the negligence or willful misconduct of Landlord. Landlord shall use
reasonable diligence to make such repairs as may be required to machinery or
equipment within the Project to provide restoration of services and, where
the cessation or interruption of service has occurred due to circumstances or
conditions beyond Project boundaries, to cause the same to be restored, by
diligent application or request to the provider thereof. In no event shall
any mortgagee or the beneficiary under any deed of trust referred to in
SECTION 5.12 be or become liable for any default of Landlord under this
SECTION 4.01(c).
4.02 EXTRA SERVICES. Landlord shall provide to Tenant at Tenant's sole
cost and expense (and subject to the limitations hereinafter set forth) the
following extra services:
(a) Such extra cleaning and janitorial services as requested by Xxxxxx;
(b) [intentionally deleted.]
(c) Heating, ventilation, or extra electrical service (for electrical
equipment which consumes electricity in excess of the standard amounts set
forth in SECTION 4.01(b)(4) above), provided by Landlord to Tenant (i) during
hours other than the Building hours of operation specified in the rules and
regulations for the Project adopted pursuant to SECTION 5.17, which shall
provide for Building hours of operation of 7:00 a.m. to 6:00 p.m., Monday
through Friday (excluding holidays), or (ii) on Saturdays, Sundays, or
holidays, all said heating, ventilation or extra electrical service to be
furnished solely upon the prior written request of Tenant submitted during
business hours to Landlord at least 24 hours in advance of the time such
service is needed, or pursuant to such other procedures as may be established
from time to time by Landlord for the Building or the Project (such
after-hour heating, ventilation and lighting charge shall be billed at
Landlord's actual cost basis prorated with the similar use of other tenants
of the Building);
(d) Maintaining and replacing non-Building Standard lamps, bulbs,
starters and ballasts (whether or not the light fixtures were installed by
Landlord as part of the Tenant Improvements);
(e) Repair and maintenance service which is the obligation of Tenant
under this Lease;
(f) Repair, maintenance or janitorial service to the Leased Premises or
the Common Areas which is required as a result of the acts or omissions of
Tenant, its agents, employees, contractors, invitees or licensees;
(g) Any basic service in amounts reasonably determined by Landlord to
exceed the amounts required to be provided under SECTION 4.01(b), but only if
Landlord elects to provide such additional or excess service;
(h) For the purposes of this SECTION 4.02, if, in Landlord's reasonable
opinion, Tenant's use of electrical and/or water service at the Leased
Premises is excessive, Landlord may install one or more submeter(s) at the
Leased Premises to measure the amount of electricity and/or water consumed by
Tenant therein. The cost of such installation and of such excess electricity
and/or water (at the rates charged for such services by the local public
utility) shall be paid by Tenant to Landlord upon receipt by Tenant of a bill
therefor; and
(i) The cost chargeable to Tenant for all extra services shall
constitute Additional Rent and shall include a management fee payable to
Landlord of five percent (5%); provided that no such management fee shall be
added to the charges described in SECTION 4.02(h). Additional Rent shall be
paid monthly by Tenant to Landlord concurrently with the payment of Base Rent.
4.03 WINDOW COVERINGS. All window coverings for the Leased Premises
shall be those provided by Landlord (with the actual cost of such blinds to
be deducted from Landlord's Contribution) as Building Standard Improvements.
Tenant shall not place or maintain any window coverings, blinds, curtains or
drapes other than those supplied by Landlord on any exterior window without
Landlord's prior written approval, which approval shall not be unreasonably
withheld, conditioned, or delayed.
4.04 GRAPHICS AND SIGNAGE. Landlord shall provide identification of
Xxxxxx's name and suite numerals on a building directory in the Building
lobby. All signs, notices, advertisements and graphics of every kind or
character, visible in or from the Common Areas or the exterior of the Leased
Premises shall be subject to Landlord's prior written approval, which
approval shall not be unreasonably withheld, conditioned or delayed.
Landlord may remove, without notice to and at the expense of Tenant, any
sign, notice, advertisement or graphic of any kind inscribed, displayed or
affixed in violation of the foregoing requirement. All approved signs,
notices, advertisements or graphics shall be printed, affixed or inscribed at
Tenant's expense by a person selected by Landlord. Landlord shall be
entitled to revise the Project graphics and signage standards at any time;
provided that Landlord shall bear all cost and expenses associated with
changing any previously approved graphics and signage to any such new
standards.
4.05 [Intentionally deleted.]
4.06 REPAIR OBLIGATION. Landlord's obligation with respect to
maintenance and repair shall be limited to (i) the structural portions of the
Building; (ii) the exterior walls of the Building, including exterior glass
and glazing; (iii) the exterior roof; (iv) heating, ventilating, mechanical,
electrical, plumbing, life safety and any Building-wide or Project-wide
systems; (v) the Common Areas; and (vi) landscaped areas. Landlord shall be
obligated to keep and maintain the foregoing at all times in good order,
condition and repair. Landlord shall not have any obligation to repair
damage to such portions of the Building or the Project to the extent such
damage is caused by Tenant, its agents, employees, contractors, invitees or
licensees, unless such damage is covered by insurance Landlord is
maintaining. Landlord shall have the right, but not the obligation, to
undertake work of repair which Tenant is required to perform under this Lease
and which Xxxxxx fails or refuses to perform in a timely and efficient
manner. Tenant shall reimburse Landlord upon demand, as Additional Rent, for
all costs incurred by Landlord in performing any such repair for the account
of Tenant, together with an amount equal to five percent (5%) of such costs
to reimburse Landlord for its administration and managerial effort. Except
as specifically set forth in this Lease, Landlord shall have no obligation
whatsoever to maintain or repair the Leased Premises or the Project. The
parties intend that the terms of this Lease govern their respective
maintenance and repair obligations. Except as otherwise provided in SECTION
5.16, Tenant expressly waives the benefit of any statute now or hereafter in
effect to the extent it is inconsistent with the terms of this Lease with
respect to such obligations or which affords Tenant the right to make repairs
at the expense of Landlord or terminate this Lease by reason of the condition
of the Leased Premises or any needed repairs.
4.07 PEACEFUL ENJOYMENT. Landlord covenants with Tenant that upon
Tenant paying the Rent and all other charges required under this Lease and
performing all of Tenant's material covenants and agreements herein
contained, Tenant shall peacefully have, hold and enjoy the Leased Premises
subject to all of the terms of this Lease and to any deed of trust, mortgage,
ground lease or other agreement to which this Lease may be subordinate. This
covenant and the other covenants of Landlord contained in this Lease shall be
binding upon Landlord and its successors only with respect to breaches
occurring during its or their respective ownerships of Landlord's interest
hereunder.
ARTICLE 5.
TENANT'S COVENANTS
5.01 PAYMENTS BY TENANT. Tenant shall pay Rent at the times and in the
manner provided in this Lease. All obligations of Tenant hereunder to make
payments to Landlord shall constitute Rent and failure to pay the same when
due shall give rise to the rights and remedies provided for in SECTION 7.08.
If there is more than one Tenant, the obligations imposed under this Lease
upon Tenant shall be joint and several.
5.02 TENANT IMPROVEMENTS. The Tenant Improvements shall be installed
and constructed by the Contractor pursuant to EXHIBIT B. All Tenant
Improvements shall become the property of Landlord upon installation and
shall be surrendered to Landlord without compensation to Tenant upon
termination of this Lease by lapse of time or otherwise.
5.03 TAXES ON PERSONAL PROPERTY. In addition to, and wholly apart from
its obligation to pay Tenant's Proportionate Share of Increased Property
Taxes, Tenant shall be responsible for, and shall pay prior to delinquency,
all taxes or governmental service fees, possessory interest taxes, fees or
charges in lieu of any such taxes, capital levies, and any other charges
imposed upon, levied with respect to, or assessed against Xxxxxx's personal
property and on its interest pursuant to this Lease. To the extent that any
such taxes are not separately assessed or billed to Tenant, Tenant shall pay
the amount thereof as invoiced to Tenant by Landlord. Notwithstanding any
other provision of this Lease to the contrary, Tenant may, at Tenant's option
and expense, contest any such taxes, governmental service fees, possessory
interest taxes, fees or charges in lieu thereof, capital levies or other
charges, or Landlord's allocation thereof to Tenant or the Leased Premises,
by any lawful means.
5.04 REPAIRS BY TENANT. Tenant shall be obligated to maintain and
repair the Leased Premises, to keep the same at all times in good order,
condition and repair, and, upon expiration of the Term, to surrender the same
to Landlord in the same condition as on the Term Commencement Date,
reasonable wear and tear, taking by condemnation, and damage by casualty
excepted. Tenant's obligations shall include, without limitation, the
obligation to maintain and repair all walls, floors, ceilings and fixtures
and to repair all damage caused by Tenant, its agents, employees,
contractors, invitees and others using the Leased Premises with Xxxxxx's
expressed or implied permission. At the request of Xxxxxx, Landlord shall
perform the work of maintenance and repair constituting Tenant's obligation
under this SECTION 5.04 at Tenant's sole cost and expense and as an extra
service to be rendered pursuant to SECTION 4.02(e). Any work of repair and
maintenance performed by or for the account of Tenant by persons other than
Landlord shall be performed by contractors approved by Landlord and in
accordance with reasonable procedures Landlord shall from time to time
establish. Tenant shall give Landlord prompt notice of any damage to or
defective condition in any part of the Building's mechanical, electrical,
plumbing, life safety or other system servicing, located in or passing
through the Leased Premises.
5.05 WASTE. Tenant shall not commit or authorize its agents,
employees, contractors, invitees or licensees to commit, any waste in or
damage to any portion of the Leased Premises or the Project.
5.06 ASSIGNMENT OR SUBLEASE.
(a) Tenant shall not voluntarily or by operation of law assign,
transfer or encumber (collectively "Assign") or sublet all or any part of
Tenant's interest in this Lease or in the Leased Premises without Landlord's
prior written consent, which consent shall not be unreasonably withheld,
conditioned, or delayed, given under and subject to the terms of this SECTION
5.06. Notwithstanding the foregoing, the Tenant may, upon written notice to
the Landlord, in whole or in part, sublet the Leased Premises, or Assign this
Lease to an affiliate, parent or subsidiary of the Tenant which retains at
least a fifty percent (50%) interest in the Tenant, so long as Tenant shall
remain responsible in case of default, and, provided, further, no such
permittedsubletting or assignment shall relieve the Tenant of liability under
this Lease. An assignment of this Lease to an entity arising as a result of
merger, acquisition or consolidation shall be also permitted without the
consent of Landlord (but with written notice to the Landlord) as long as the
entity's financial condition is at least equivalent to the greater of (i) the
financial condition of Tenant as of the date of this Lease, or (ii) the
financial condition of Tenant as of the date of the proposed merger,
acquisition or consolidation.
(b) Except as permitted in SECTION 5.06(a), if Tenant desires to
Assign this Lease or any interest herein or sublet the Leased Premises or any
part thereof, Tenant shall give Landlord written notice of such intent.
Tenant's notice shall specify the date the proposed assignment or sublease
would be effective and be accompanied by information pertinent to Landlord's
determination as to the financial and operational responsibility and
appropriateness of the proposed assignee or subtenant, including, without
limitation, its name, business and financial condition, financial details of
the proposed transfer, the intended use (including any modification) of the
Leased Premises, and exact copies of all of the proposed agreements between
Tenant and the proposed assignees or subtenants. If requested by Landlord
within ten (10) business days after receipt of Tenant's notice, Tenant shall
promptly provide Landlord with (i) such other or additional information or
documents reasonably requested by Xxxxxxxx, and (ii) an opportunity to meet
and interview the proposed assignees or subtenants.
(c) Landlord shall have a period of ten (10) days following such
interview and receipt of such additional information (or twenty (20) days
from the date of Tenant's original notice if Landlord does not request
additional information or an interview) within which to notify Tenant in
writing that Landlord elects either (i) to terminate this Lease as to the
space so affected as of the effective date specified by Tenant, in which
event Tenant will be relieved of all further obligations hereunder as to such
space, or (ii) to permit Tenant to Assign this Lease or sublet such space to
the proposed assignee or sublessee; or (iii) to not permit Tenant to Assign
this Lease or sublet such space to the proposed assignee or sublessee. If
Landlord fails to notify Tenant in writing of such election within said
period, Landlord shall be deemed to have approved the proposed assignee or
sublessee. Failure by Landlord to approve a proposed subtenant or assignee
shall not cause a termination of this Lease.
(d) In the event Tenant shall request the consent of Landlord to any
assignment or subletting hereunder, Tenant shall pay Landlord a processing
fee of $250.00 and shall reimburse Landlord for Landlord's reasonable
attorneys' fees (not to exceed $2,000.00) incurred in connection therewith.
All such fees shall be deemed Additional Rent under this Lease.
(e) Any rent or other consideration realized by Tenant under any such
sublease or assignment in excess of (i) the Rent payable hereunder, (ii) any
reasonable tenant improvement allowance or other economic concession (e.g.,
space planning allowance, moving expenses, free or reduced rent
periods, etc.), (iii) any advertising costs and brokerage commissions
associated with such assignment or sublease, and (iv) any reasonable legal
fees associated with such assignment or sublease ("Profit"), shall be divided
and paid as follows: fifty percent (50%) to Tenant and fifty percent (50%) to
Landlord; provided, however, that if Tenant is in default hereunder beyond
any applicable cure period, Landlord shall be entitled to receive, for the
account of Tenant, Tenant's share of such excess rent and Landlord shall
credit Xxxxxx's share of such excess rent toward any amounts owed by Tenant
to Landlord.
(f) In any subletting undertaken by Tenant, Tenant shall use
commercially reasonable efforts to obtain not less than fair market sublease
rent for the space to sublet. In any assignment of this Lease in whole or in
part, Tenant shall use commercially reasonable efforts to obtain from the
assignee consideration reflecting a value of not less than fair market
assignment rent for the space subject to such assignment.
(g) The consent of Landlord to any assignment or subletting shall not
constitute a consent to any subsequent assignment or subletting by Tenant or
to any subsequent or successive assignment or subletting by the assignee or
subtenant. However, Xxxxxxxx may consent to subsequent assignments and
sublettings of the Lease or sublease or amendments or modifications thereto,
without notifying Tenant or any other party liable on the Lease or sublease
and without obtaining their consent. Such action shall not relieve Tenant or
any such other party from liability under this Lease or a sublease.
(h) Except to the extent the parties otherwise agree in writing, no
assignment or subletting by Tenant shall relieve Tenant of any obligation
under this Lease. In the event of default by an assignee or subtenant of
Tenant or any successor of Xxxxxx in the performance of any of the terms
hereof, Landlord may proceed directly against Tenant without the necessity of
exhausting remedies against such assignee, subtenant or successor. Any
assignment or subletting which conflicts with the provisions hereof shall be
void and, at Landlord's option, shall constitute a default under this Lease.
(i) Notwithstanding anything to the contrary contained within this
SECTION 5.06, Landlord acknowledges that, although Tenant anticipates that
its space needs will encompass the total of the Leased Premises at some point
in the near future, a portion of the space which Xxxxxx is currently
accepting and leasing may be initially determined to be in excess of Tenant's
current short term space planning needs. As a result, should Tenant submit a
request to Landlord for Landlord's consent to Xxxxxx's sublease of a portion
of the Leased Premises at any time during the first thirty (30) months of the
Term and such sublease along with all other current subleases and
assignments, in the aggregate, do not exceed 25,440 rentable square feet,
such request shall not be subject to Landlord's right of recapture pursuant
to SECTION 5.06(c) above.
5.07 ALTERATIONS, ADDITIONS AND IMPROVEMENTS.
(a) Tenant shall not make or allow its agents, employees, contractors,
invitees, or licensees to make, any structural alterations or additions in or
to the Leased Premises or any nonstructural alterations or additions with an
estimated cost of more than Twenty-Five Thousand Dollars ($25,000)
(collectively "Alterations") without first obtaining the written consent of
Landlord, which consent shall not be unreasonably withheld, conditioned, or
delayed, so long as the proposed Alterations (i) comply with all applicable
laws, ordinances, rules and regulations; (ii) are reasonably compatible with
and do not adversely affect the Building and its mechanical, electrical,
heating, ventilation and life safety systems; (iii) will not affect the
structural portions of the Building; (iv) will not interfere with the use and
occupancy of any other portion of the Building by any other tenant, its
employees or invitees; and (v) will not trigger any additional costs to
Landlord. Specifically, but without limiting the generality of the
foregoing, Xxxxxxxx's right of consent shall encompass plans and
specifications for the proposed Alterations, construction means and methods,
the identity of any contractor or subcontractor to be employed on the work of
the Alterations, and the time for performance of such work. Tenant shall
supply to Landlord any additional documents and information requested by
Landlord in connection with Xxxxxx's request for consent for any such
Alteration. For the purposes herein, the Landlord Improvements and Tenant
Improvements set forth in EXHIBIT B hereto shall not constitute Alterations
or alterations, additions or improvements under this SECTION 5.07.
(b) Any consent given by Landlord under this SECTION 5.07 shall be
deemed conditioned upon: (i) Tenant's acquiring all applicable permits
required by governmental authorities; (ii) Tenant's furnishing to Landlord
copies of such permits, together with copies of the approved plans and
specifications, prior to commencement of the work thereon; and (iii) the
compliance by Tenant with the conditions of all applicable permits and
approvals in a prompt and expeditious manner.
(c) Tenant shall provide Landlord with not less than fifteen (15) days
prior written notice of commencement of the work so as to enable Landlord to
post and record appropriate notices of non-responsibility. All alterations
and additions permitted under this SECTION 5.07, including Alterations, shall
be made and performed by Tenant without cost or expense to Landlord. Tenant
shall pay the contractors and suppliers all amounts due to them when due and
keep the Leased Premises and the Project free from any and all mechanics',
materialmen's and other liens and claims arising out of any work performed,
materials furnished or obligations incurred by or for Tenant; provided,
however, that nothing herein shall prevent Tenant from contesting any such
amounts due or any such liens placed if Tenant provides any required bond
therefor. For any Alteration, Landlord may require, at its sole option, that
Tenant provide to Landlord, at Tenant's expense, a lien and completion bond
in an amount equal to the total estimated cost of any alterations, additions
or improvements to be made in or to the Leased Premises, to protect Landlord
against any liability for mechanics', materialmen's and other liens and
claims, and to ensure timely completion of the work. In the event any
alterations or additions to the Leased Premises are performed by Landlord
hereunder, whether by prearrangement or otherwise, Landlord shall be entitled
to charge Tenant a ten percent (10%) administration fee in addition to the
actual costs of labor and materials provided. Such costs and fees shall be
deemed Additional Rent under this Lease, and may be charged and payable prior
to commencement of any work by Landlord.
(d) Any and all alterations, additions or improvements, including
Alterations, made to the Leased Premises by Tenant shall become the property
of Landlord upon installation and shall be surrendered to Landlord without
compensation to Tenant upon the termination of this Lease by lapse of time or
otherwise unless (i) Landlord conditioned its approval of such Alterations on
Tenant's agreement to remove them, or (ii) if Tenant did not provide a
Removal Determination Request (as defined below), Landlord notifies Tenant
prior to (or promptly after) the Term Expiration Date that the alterations,
additions and/or improvements must be removed, in which case Tenant shall, by
the Term Expiration
Date (or promptly thereafter), remove such Alterations and repair any damage
resulting from such removal and restore the Leased Premises to their condition
existing prior to the date of installation of such Alterations. Prior to making
any alterations, additions or improvements to the Leased Premises, Tenant may
make a written request that Landlord determine in advance whether or not Tenant
must remove such alterations, additions or improvements on the Term Expiration
Date ("Removal Request Determination").
(e) Notwithstanding anything to the contrary set forth in this Lease,
this SECTION 5.07 shall not apply to the installation and removal of trade
fixtures, movable equipment or furniture owned by Tenant. Tenant shall
repair at its sole cost and expense all damage caused to the Leased Premises
and the Project by installation and removal of Tenant's trade fixtures,
movable equipment or furniture.
(f) All alterations, additions and improvements permitted under this
SECTION 5.07 shall be constructed diligently, in a good and workmanlike
manner with new, good and sufficient materials and in compliance with all
applicable laws, ordinances, rules and regulations (including, without
limitation, building codes and those related to accessibility and use by
individuals with disabilities). Tenant shall, promptly upon completion of
the work, furnish Landlord with "as built" drawings for any alterations,
additions or improvements performed under this SECTION 5.07.
5.08 COMPLIANCE WITH LAWS AND INSURANCE STANDARDS. Tenant shall not
occupy or use, or permit its agents, employees, contractors, invitees, or
licensees to occupy or use, any portion of the Leased Premises in a manner
that violates any applicable law, ordinance, rule, regulation, order, permit,
covenant, easement or restriction of record, or the recommendations of
Landlord's engineers or consultants of which Landlord makes Tenant aware in
writing relating in any manner to the Project, or for any business or purpose
which is disreputable, objectionable or productive of fire hazard (provided,
however, that Landlord acknowledges that Xxxxxx's proposed use of the Leased
Premises is not disreputable or objectionable. Tenant shall not do or permit
its agents, employees, contractors, invitees, or licensees to do anything
which would result in the cancellation, or in any way increase the cost, of
the all risk property insurance coverage on the Project and/or its contents.
If Tenant does or permits its agents, employees, contractors, invitees, or
licensees to do anything which increases the cost of any insurance covering
or affecting the Project, then Tenant shall reimburse Landlord, upon demand,
as Additional Rent, for such additional costs. Landlord shall deliver to
Tenant a written statement setting forth the amount of any such insurance
cost increase and showing in reasonable detail the manner in which it has
been computed. Tenant shall, at Tenant's sole cost and expense, comply with
all laws, ordinances, rules, regulations and orders (whether state, federal,
municipal or promulgated by other agencies or bodies having or claiming
jurisdiction) ("Applicable Laws") related to its use of the Leased Premises
now in effect or which may hereafter come into effect including, but not
limited to, (a) accessibility and use by individuals with disabilities, and
(b) environmental conditions in, on or about the Leased Premises; provided,
however, that as of the Term Commencement Date, Landlord covenants that the
Leased Premises, the Building, and the Project, will comply with all
Applicable Laws, including, without limitation (a) accessibility and use by
individuals with disabilities, and (b) environmental conditions in, on or
about the Leased Premises, the Building, and the Project. If, after the Term
Commencement Date, anything done by Tenant in its use or occupancy of the
Leased Premises shall create, require or cause imposition of any requirement
by any public authority for structural or other upgrading of or alteration or
improvement to the Project, Tenant shall, at Landlord's option, either
perform the upgrade, alteration or improvement at Tenant's sole cost and
expense or reimburse Landlord upon demand, as Additional Rent, for the cost
to Landlord of performing such work. The judgment of any court of competent
jurisdiction or the admission by Tenant in any action against Tenant, whether
Landlord is a party thereto or not, that Tenant has violated any law,
ordinance, rule, regulation, order, permit, covenant, easement or restriction
shall be conclusive of that fact as between Landlord and Tenant.
5.09 NO NUISANCE; NO OVERLOADING. Tenant shall use and occupy the
Leased Premises, and control its agents, employees, contractors, invitees and
visitors in such manner so as not to create any nuisance, or interfere with,
annoy or disturb (whether by noise, odor, vibration or otherwise) any other
tenant or occupant of the Project or Landlord in its operation of the Project.
Tenant shall not place or permit to be placed any loads upon the floors,
walls or ceilings in excess of the maximum designed load specified by Landlord
and of which Landlord gives Tenant written notice.
5.10 FURNISHING OF FINANCIAL STATEMENTS; TENANT'S REPRESENTATIONS. In
order to induce Xxxxxxxx to enter into this Lease, Xxxxxx agrees that it shall
promptly furnish Landlord, from time to time, within ten (10) business days of
receipt of Landlord's written request therefor, with a copy of Xxxxxx's most
recent financial statement (whether audited or unaudited) prepared in the
ordinary course of Xxxxxx's business operations. Tenant represents and
warrants that to Xxxxxx's knowledge all financial statements, records and
information furnished by Tenant to Landlord in connection with this Lease are
true, correct and complete in all respects as of the date of delivery.
5.11 ENTRY BY LANDLORD. Landlord, its employees, agents and
consultants, shall have the right to enter the Leased Premises at any time in
case of an emergency to deal with such emergency, and otherwise upon not less
than one (1) business day's prior written notice and during normal business
hours or such other time as Tenant may agree, to inspect the same, to clean,
to perform such work as may be permitted or required under this Lease, to make
repairs to or alterations of the Leased Premises or other portions of the
Project or other tenant spaces therein, to deal with emergencies, to post such
notices as may be permitted or required by law to prevent the perfection of
liens against Landlord's interest in the Project or to show the Leased
Premises to prospective tenants during the last twelve (12) months of the
Term, purchasers or encumbrancers; provided, however, that Landlord shall use
its best efforts to minimize interference with Tenant's business operations in
the Leased Premises when exercising any such right of entry. Tenant shall not
be entitled to any abatement of Rent or damages by reason of the exercise of
any such right of entry.
5.12 NONDISTURBANCE AND ATTORNMENT.
(a) This Lease and the rights of Tenant hereunder shall be subject
and subordinate to the lien of any deed of trust, mortgage or other
hypothecation or security instrument (collectively, "Security Device") now or
hereafter placed upon, affecting or encumbering the Project or any part thereof
or interest therein, and to any and all advances made thereunder, interest
thereon or costs incurred and any modifications, renewals, supplements,
consolidations, replacements and extensions thereof, if, but only if, with
respect to any Security Device entered into by Landlord after execution of this
Lease, such subordination is conditioned on Landlord obtaining assurance in a
commercially reasonable form (a "nondisturbance agreement") from the holder of
or beneficiary under such encumbrance that Xxxxxx's possession of the Leased
Premises and right of ingress and egress over and across the Project will not be
disturbed so long as Tenant is not in default under this Lease. Landlord shall
obtain and deliver to Tenant a nondisturbance agreement from Fleet National Bank
in the form attached hereto as EXHIBIT E within ten (10) business days of full
execution of this Lease. Without the consent of Tenant, the holder of any such
Security Device or the beneficiary thereunder shall have the right to elect to
be subject and subordinate to this Lease, such subordination to be effective
upon such terms and conditions as such holder or beneficiary may direct which
are not inconsistent with the provisions hereof. Xxxxxx agrees to attorn to and
recognize as the Landlord under this Lease the holder or beneficiary under a
Security Device or any other party that acquires ownership of the Leased
Premises by reason of a foreclosure or sale under any Security Device (or deed
in lieu thereof) commencing on the fifth (5th) business day after Xxxxxx has
received notice from such holder, beneficiary, or owner. Tenant shall be
entitled to rely upon such notice without any investigation and Tenant shall not
be liable to Landlord for any amounts paid to, or any other performance
performed for the benefit of, such holder, beneficiary or owner pursuant to such
notice. Any new owner following such foreclosure, sale or deed shall not be
(i) liable for any act or omission of any prior landlord or with respect to
events occurring prior to acquisition of ownership; (ii) subject to any offsets
or defenses which Tenant might have against any prior landlord; or (iii) bound
by prepayment of more than one (1) month's Rent.
(b) Tenant shall not unreasonably withhold its consent to changes or
amendments to this Lease requested by the holder of a Security Device so long as
such requested changes do not alter the basic business terms of this Lease or
otherwise diminish or abridge any rights or impose or increase any obligations
of Tenant hereunder. Landlord shall pay Tenant a processing fee of $250.00 and
shall reimburse Tenant for Xxxxxx's reasonable attorneys' fees (not to exceed
$2,000.00) incurred in connection with Xxxxxx's review, negotiation, and
execution of any such changes and amendments. If, within fifteen (15) business
days after notice from Landlord, Xxxxxx fails or unreasonably refuses to execute
with Landlord any amendment to this Lease accomplishing the reasonable changes
or amendments which are requested by such holder such amendments shall be deemed
accepted and shall be enforceable by Landlord and such lender and binding upon
Tenant, its successors and assigns as if agreed to in writing, without need of
further action or documentation.
5.13 ESTOPPEL CERTIFICATE. Within ten (10) business days following
Xxxxxxxx's request, Tenant shall execute, acknowledge and deliver written
estoppel certificates addressed to (i) any mortgagee or prospective mortgagee
of Landlord, or (ii) any purchaser or prospective purchaser of all or any
portion of, or interest in, the Project, on a form reasonably specified by
Landlord, certifying as to such facts (if true) and agreeing to such notice
provisions as such mortgagee(s) or purchaser(s) may reasonably require,
including, without limitation, the following: (a) that this Lease is
unmodified and in full force and effect (or in full force and effect as
modified, and stating the modifications); (b) the amount of, and date to which
Rent and other charges have been paid in advance; (c) the amount of any
Security Deposit; and (d) acknowledging that Landlord is not in default under
this Lease (or, if Landlord is claimed to be in default, stating the nature of
the alleged default). However, in no event shall any such estoppel
certificate require an amendment of the provisions of this Lease, alter the
basic business terms of
this Lease, or otherwise diminish or abridge any rights or impose or increase
any obligations of Tenant hereunder. Any such estoppel certificate may be
relied upon by any such mortgagee or purchaser. Failure by Tenant to execute
and deliver any such estoppel certificate within the time permitted hereunder
shall be conclusive upon Tenant that (1) this Lease is in full force and effect
and has not been modified except as represented by Landlord; (2) not more than
one month's Rent has been paid in advance; and (3) Landlord is not in default
under this Lease.
5.14 SECURITY DEPOSIT.
(a) On or before September 30, 1999, Tenant shall pay to Landlord the
agreed upon Security Deposit as security for the full and faithful performance
of Tenant's obligations under this Lease. If Xxxxxx fails to pay to Landlord
the agreed upon Security Deposit on or before September 30, 1999, Landlord may
terminate this Lease upon written notice to Tenant. If Landlord elects to
terminate this Lease as set forth in the previous sentence, Tenant shall
reimburse Landlord for Landlord's reasonable attorneys' fees (not to exceed
$10,000.00) incurred in connection with this Lease. If at any time during the
Term, Tenant shall be in default in the payment of Rent or in default for any
other reason, Landlord may use, apply or retain such part of the Security
Deposit as necessary for cure of Tenant's failure to make payment of any amount
due Landlord or to cure such default or to reimburse or compensate Landlord for
any liability, loss, cost, expense or damage (including attorneys' fees) which
Landlord may suffer or incur by reason of Tenant's defaults. If Landlord uses
or applies all or any part of the Security Deposit, Tenant shall, on demand, pay
to Landlord a sum sufficient to restore the Security Deposit to the full amount
required by this Lease. Upon expiration of the Term or earlier termination of
this Lease and after Xxxxxx has vacated the Leased Premises, Landlord shall
return the Security Deposit to Tenant, reduced by such amounts as may be
required by Landlord to remedy defaults on the part of Tenant in the payment of
Rent and to perform Tenant's obligations hereunder. The portion of the deposit
not so required shall be paid over to Tenant (or, at Landlord's option, to the
last assignee of Tenant's interest in this Lease) within thirty (30) days after
expiration of the Term or earlier termination hereof. Landlord shall hold the
Security Deposit for the foregoing purposes; provided, however, that Landlord
shall have no obligation to segregate the Security Deposit from its general
funds or to pay interest in respect thereof. No part of the Security Deposit
shall be considered to be held in trust, or to be prepayment of any monies to be
paid by Tenant under this Lease.
(b) In lieu of a cash deposit, Tenant shall deliver the Security
Deposit to Landlord in substantially the form attached hereto as EXHIBIT F, an
irrevocable letter of credit (the "Letter of Credit") issued by and drawable
upon (said issuer being referred to as the "Issuing Bank") the financial
institution indicated on EXHIBIT F or such other financial institution which may
be approved by Landlord in its reasonable discretion, provided that Landlord
shall not unreasonably withhold, condition, or delay its consent to an Issuing
Bank which has outstanding unsecured, uninsured and unguaranteed indebtedness,
or shall have issued a letter of credit or other credit facility that
constitutes the primary security for any outstanding indebtedness (which is
otherwise uninsured and unguaranteed), that is then rated, without regard to
qualification of such rating by symbols such as "+" or "-" or numerical
notation, "Aa" or better by Xxxxx'x Investors Service and "AA" or better by
Standard & Poor's Rating Service, and has combined capital, surplus and
undivided profits of not less than $100,000,000. If upon any transfer of the
Letter of Credit, any fees or charges shall be so imposed, then such fees or
charges shall be payable solely by Tenant and the Letter of Credit shall so
specify. The Letter of Credit shall provide that it shall be deemed
automatically renewed, without amendment, for consecutive periods of one year
each thereafter during the Term unless the Issuing Bank sends a notice (the
"Non-Renewal Notice") to Landlord by certified mail, return receipt requested,
not less than 45 days preceding the then expiration date of the Letter of Credit
stating that the Issuing Bank has elected not to renew the Letter of Credit.
Landlord shall have the right, upon receipt of the Non-Renewal Notice, to draw
the full amount of the Letter of Credit, by sight draft on the Issuing Bank, and
shall thereafter hold or apply the cash proceeds of the Letter of
Credit pursuant to the terms of this Article. The Issuing Bank shall agree
with all drawers, endorsers and bona fide holders that drafts drawn under and
in compliance with the terms of the Letter of Credit will be duly honored
upon presentation to the Issuing Bank at an office location in San Francisco.
The Letter of Credit shall be subject in all respects to the Uniform Customs
and Practice for Documentary Credits (1993 revision), International Chamber
of Commerce Publication No. 500.
(c) If at any time after the first eighteen (18) months of the Term
Tenant shall concurrently have become a publicly traded company, have achieved
an audited net worth (as defined by GAAP) of $80,000,000 or greater, have
achieved net working capital (as defined by GAAP) of $60,000,000 or greater, AND
Tenant shall have no uncured monetary defaults, the Security Deposit shall be
reduced to the Minimum Amount of Security Deposit (as defined below).
(d) Notwithstanding anything in this Section 5.14 to the contrary,
the amount of the Security Deposit shall be reduced by twenty percent (20%) of
the original amount of the Security Deposit on the last day of the twenty-fourth
(24th), thirty-sixth (36th), forty-eighth (48th), and sixtieth (60th) months of
the Term; however, in no event shall the Security Deposit be less than
$571,758.75 (the "Minimum Amount of Security Deposit").
5.15 SURRENDER. Subject to the provisions of SECTION 5.07 hereof, on
the Term Expiration Date (or earlier termination of this Lease), Xxxxxx shall
quit and surrender possession of the Leased Premises to Landlord in as good
order and condition as they were in on the Term Commencement Date, reasonable
wear and tear, taking by condemnation and damage by casualty excepted.
Reasonable wear and tear shall not include any damage or deterioration that
would have been prevented by good maintenance practice or by Tenant performing
all of its obligations under this Lease. Tenant shall, without cost to
Landlord, remove all furniture, equipment, trade fixtures, debris and articles
of personal property owned by Tenant in the Leased Premises, and shall repair
any damage to the Project resulting from such removal. Any such property not
removed by Tenant by the Term Expiration Date (or earlier termination of this
Lease) shall be considered abandoned, and Landlord may remove any or all of
such items and dispose of same in any lawful manner or store same in a public
warehouse or elsewhere for the account and at the expense and risk of Tenant.
If Tenant shall fail to pay the cost of storing any such property after
storage for thirty (30) days or more, Landlord may sell any or all of such
property at public or private sale, in such manner and at such times and
places as Landlord may deem proper, without notice to or demand upon Tenant.
Landlord shall apply the proceeds of any such sale as follows: first, to the
costs of such sale; second, to the costs of storing any such property; third,
to the payment of any other sums of money which may then or thereafter be due
to Landlord from Tenant under any of the terms of this Lease; and fourth, the
balance, if any, to Tenant.
5.16 TENANT'S REMEDIES. Landlord shall not be deemed in breach of this
Lease unless Landlord fails within a reasonable time to perform an obligation
required to be performed by Landlord. For purposes of this SECTION 5.16, a
reasonable time shall not be less than thirty (30) days after receipt by
Landlord (except in the event of an emergency, which shall be defined to mean
any risk of imminent harm to persons or property, in which case Landlord's
response time must be reasonable in light of the emergency), and by the
holders of any ground lease, deed of trust or mortgage covering the Leased
Premises whose name and address shall have been furnished Tenant in writing
for such purpose ("Holders"), of written notice specifying wherein such
obligation of Landlord has not been performed; provided, however, that if the
nature of Landlord's obligation is such that more than thirty (30) days after
such notice are reasonably required for its performance, then Landlord shall
not be in breach of this Lease if performance is commenced within said thirty
(30)-day period and thereafter diligently pursued to completion. If Landlord
fails to cure such default within the time provided for in this Lease, any
Holder may, by notice given to Tenant, elect to cure such Landlord's breach,
and any such electing Holder shall have an additional thirty (30) days to cure
such default (except in the case of an emergency, in which
event additional time shall be permitted for cure only if it is reasonable in
light of the emergency); provided that if such default cannot reasonably be
cured within such additional thirty (30) day period, then such electing
Holder shall have such additional time to cure Landlord's breach as is
reasonably necessary under the circumstances as long as such electing Holder
commences the cure within such additional thirty (30) day period and
thereafter diligently pursues such cure to completion. Tenant shall look
solely to Xxxxxxxx's interest in the Project for recovery of any judgment
from Landlord. Neither Landlord nor any of its trustees, directors,
officers, agents, employees or representatives (or, if Landlord is a
partnership, its partners, whether general or limited) shall ever be
personally liable for any such judgment. Any lien obtained to enforce any
such judgment and any levy of execution thereon shall be subject and
subordinate to any lien, deed of trust or mortgage to which SECTION 5.12
applies or may apply. Tenant shall not have the right to terminate this
Lease or withhold, reduce or offset any amount against any payments of Rent
due and payable under this Lease (except as provided below) by reason of a
breach of this Lease by Landlord; provided, however, if Landlord fails to
repair within the time frame required in this SECTION 5.16 and Tenant
provides written notice to Landlord of its intention to undertake such
repairs, five (5) days after such written notice is provided to Landlord,
Tenant may undertake such repairs and send Landlord a written demand for
payment of Tenant's reasonable costs (in light of the circumstances) incurred
in taking such action on Landlord's behalf (including a reasonably
particularized statement). If within thirty (30) days after Xxxxxxxx's
receipt of Xxxxxx's written demand Landlord has not paid the invoice or
delivered to Tenant a detailed written objection to it, or if Landlord and
Tenant are unable to resolve a disagreement as to the need or costs of the
repairs, Xxxxxx's sole remedy shall be to institute legal proceedings or
binding arbitration against Landlord to collect the amount set forth in
Tenant's invoice; furthermore, if the Tenant is the substantially successful
party pursuant to the legal proceedings or arbitration, the judge or
arbitrator, as the case may be, may, among other remedies, decide that Tenant
may offset an amount determined by the judge or arbitrator, as the case may
be, as damages caused by Xxxxxxxx's breach against payment of Rent in future
months.
5.17 RULES AND REGULATIONS. Tenant shall comply with the rules and
regulations for the Project attached as EXHIBIT D and such reasonable
amendments thereto as Landlord may adopt from time to time with prior notice
to Tenant.
ARTICLE 6.
ENVIRONMENTAL MATTERS
6.01 HAZARDOUS MATERIALS PROHIBITED.
(a) Tenant shall not cause or permit any Hazardous Material (as defined
in SECTION 6.01(c) below) to be brought, kept, used, generated, released or
disposed in, on, under or about the Leased Premises or the Project by Tenant,
its agents, employees, contractors, invitees and licensees; provided, however,
that Tenant, its agents, employees, contractors, invitees and licensees may
use, store and dispose of, in accordance with applicable Laws, limited
quantities of standard office and janitorial supplies which are Hazardous
Materials, but only to the extent reasonably necessary for Tenant's, its
agents', employees', contractors', invitees' and licensees' operations in the
Leased Premises. Tenant hereby indemnifies Landlord from and against (i) any
breach by Tenant of the obligations stated in the preceding sentence, (ii) any
breach of the obligations stated in SECTION 6.01(b) below, or (iii) any claims
or liability resulting from Xxxxxx's use of Hazardous Materials. Tenant
hereby agrees to defend and hold Landlord harmless from and against any and
all claims, liability, losses, damages, costs and/or expenses (including,
without limitation, diminution in value of the Project, or any portion
thereof, damages for the loss or restriction on use of rentable or usable
space or of any amenity of the Project, damages arising from any adverse
impact on marketing of space in the Project, and sums paid in settlement of
claims, fines, penalties, attorneys' fees, consultants' fees and experts'
fees) which arise during or after the Term as a result of any breach of the
obligations stated in SECTIONS 6.01(a) or 6.01(b) or otherwise resulting from
Tenant's use of Hazardous Materials. This indemnification of Landlord by
Tenant includes, without limitation, death of or injury to person, damage to
any property or the environment and costs incurred in connection with any
investigation of site conditions or any cleanup, remedial, removal, or
restoration work required by any federal, state or local governmental agency
or political subdivision because of any Hazardous Material present in, on,
under or about the Leased Premises or the Project (including soil and ground
water contamination) which results from such a breach. Without limiting the
foregoing, if the presence of any Hazardous Material in, on, under or about
the Leased Premises or the Project is caused by Tenant or Tenant's agents,
employees, contractors, invitees or licensees, and such presence results in
any contamination of the Leased Premises or the Project, Tenant shall promptly
take all actions at its sole expense as are necessary to return the same to
the condition existing prior to the introduction of such Hazardous Material;
provided that Landlord's approval of such actions, and the contractors to be
used by Tenant in connection therewith, shall first be obtained. This
indemnification of Landlord by Tenant shall survive the expiration or sooner
termination of this Lease.
(b) Tenant covenants and agrees that Tenant shall at all times be
responsible and liable for, and be in compliance with, all federal, state, local
and regional laws, ordinances, rules, codes and regulations, as amended from
time to time ("Governmental Requirements"), relating to health and safety and
environmental matters, arising, directly or indirectly, out of Tenant's use of
Hazardous Materials (as defined in SECTION 6.01(c) below) in the Project.
Health and safety and environmental matters for which Tenant is responsible
under this paragraph include, without limitation (i) notification and reporting
to governmental agencies, (ii) the provision of warnings of potential exposure
to Hazardous Materials to Landlord and Tenant's agents, employees, licensees,
contractors, invitees and licensees, (iii) the payment of taxes and fees,
(iv) the proper off-site transportation and disposal of Hazardous Materials, and
(v) all requirements, including training, relating to the use of equipment.
Immediately upon discovery of a release of Hazardous Materials associated with
Tenant's activities, Tenant shall give written notice to Landlord, whether or
not such release is subject to reporting under Governmental Requirements. The
notice shall include information on the nature and conditions of the release and
Xxxxxx's planned response. Tenant shall be liable for the cost of any clean-up
of the release of any Hazardous Materials by Tenant on the Project.
(c) As used in this Lease, the term "Hazardous Material" means any
hazardous or toxic substance, material or waste which is or becomes regulated by
any local governmental authority, the State of California or the United States
Government. The term "Hazardous Material" includes, without limitation, any
substance, material or waste which is (i) defined as a "hazardous waste" or
similar term under the laws of the jurisdiction where the Project is located;
(ii) designated as a "hazardous substance" pursuant to Section 311 of the
Federal Water Pollution Control Act (33 U.S.C. Section 1317); (iii) defined as a
"hazardous waste" pursuant to Section 1004 of the Federal Resource, Conservation
and Recovery Act, 42 U.S.C. Section 6901 ET SEQ. (42 U.S.C. Section 6903);
(iv) defined as a "hazardous substance" pursuant to Section 101 of the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
Section 9601 ET SEQ. (42 U.S.C. Section 9601); (v) hydrocarbons, petroleum,
gasoline, crude oil or any products, by-products or fractions thereof; or
(vi) asbestos in any form or condition.
(d) As used in this ARTICLE 6, the term "Laws" means any applicable
federal, state or local laws, ordinances, rules or regulations relating to any
Hazardous Material affecting the Project, including, without limitation, the
specific laws, ordinances and regulations referred to in SECTION 6.01(c) above.
References to specific Laws shall also be references to any amendments thereto
and to any applicable successor Laws.
(e) To the best of Xxxxxxxx's knowledge, except as disclosed in the
environmental reports (the "Environmental Reports") provided to Tenant by
Landlord (at Landlord's sole cost and expense) (i) there are no Hazardous
Materials in the Building, and (ii) the Building is in compliance with all Laws
relating to any Hazardous Material. Xxxxxxxx's knowledge is limited to the
matters contained in the Environmental Reports. Tenant acknowledges its receipt
and review of the Environmental Reports prior to entering into this Lease.
Landlord represents, warrants and covenants that (i) during the period of its
ownership of the Project prior to entering into this Lease, it has not released
any Hazardous Materials on the Project, and (ii) after entering into this Lease,
Landlord will not cause or permit any Hazardous Material to be brought, kept,
used, generated, released or disposed in, on, under or about the Project by
Landlord, its agents, employees, contractors, tenants, invitees and licensees;
provided, however, that Landlord, its agents, employees, contractors, tenants,
invitees and licensees may use, store and dispose of, in accordance with
applicable Laws, limited quantities of standard office and janitorial supplies
which are Hazardous Materials, but only to the extent reasonably necessary for
Landlord's, its agents', employees', contractors', tenants', invitees' and
licensees' operations in and about the Project. Landlord hereby agrees to
indemnify, protect, defend and hold the Tenant harmless of and from any and all
claims, liability, costs, penalties, fines, damages, injury, judgments,
forfeiture, losses or expenses (including without limitation reasonable
attorneys' fees) arising out of or in any way related to (i) any breach by
Landlord of its representations, warranties, and covenants in this SECTION
6.01(e), and (ii) the presence of any Hazardous Materials on or about the
Project other than Hazardous Materials brought into the Project by Tenant or
Tenants agents, employees, contractors, invitees or licensees. This
indemnification of Tenant by Landlord includes, without limitation, death of or
injury to person, damage to any property or the environment and costs incurred
in connection with any investigation of site conditions or any cleanup,
remedial, removal, or restoration work required by any federal, state or local
governmental agency or political subdivision because of any Hazardous Material
present in, on, under or about the Leased Premises or the Project (including
soil and ground water contamination) except as specifically provided in this
Section 6.01(e). Without limiting the foregoing, if the presence of any
Hazardous Material in, on, under or about the Leased Premises or the Project is
caused by Landlord or any one other than Tenant or Tenants agents, employees,
contractors, invitees or licensees, and such presence results in any
contamination of the Leased Premises or the Project, Landlord shall promptly
take all actions at its sole expense as are necessary to return the same to the
condition existing prior to the introduction of such Hazardous Material.
6.02 LIMITATIONS ON ASSIGNMENT AND SUBLETTING. It shall not be
unreasonable for Landlord to withhold its consent to any proposed assignment
or subletting of the Leased Premises if (i) the proposed assignee's or
sublessee's anticipated use of the Leased Premises involves the generation,
storage, use, treatment, or disposal of Hazardous Material (excluding standard
office and janitorial supplies; in limited quantities as hereinabove
provided); (ii) the proposed assignee or sublessee has been required by any
prior landlord, lender or governmental authority to take remedial action in
connection with Hazardous Material contaminating a property if the
contamination resulted from such assignee's or sublessee's actions or use of
the property in question; or (iii) the proposed assignee or sublessee is
subject to an enforcement order issued by any governmental authority in
connection with the generation, storage, use, treatment or disposal of a
Hazardous Material.
6.03 RIGHT OF ENTRY. Landlord, its employees, agents and consultants,
shall have the right to enter the Leased Premises at any time, in case of an
emergency relating to Hazardous Materials to deal with such emergency, and
otherwise upon not less than one (1) business day's prior written notice and
during normal business hours or such other time as Tenant may agree in order
to conduct periodic environmental inspections and tests to determine whether
any Hazardous Materials are present. The costs and expenses of such
inspections shall be paid by Landlord unless a default or breach of this
Lease, violation of Laws or contamination caused by Tenant or Tenant's agents,
employees, contractors, invitees or licensees, is found to exist. In such
event, Tenant shall reimburse Landlord upon demand, as Additional Rent, for
the costs and expenses of such inspections.
6.04 NOTICE TO LANDLORD. Each party shall immediately notify the other
in writing of: (i) any enforcement, clean-up, removal or other governmental
or regulatory action instituted or threatened regarding the Leased Premises or
the Project pursuant to any Laws; (ii) any claim made or threatened by any
person against Tenant, the Leased Premises, or the Project relating to damage,
contribution, cost recovery, compensation, loss or injury resulting from or
claimed to result from any Hazardous Material; and (iii) any reports made to
or received from any governmental agency arising out of or in connection with
any Hazardous Material in or removed from the Leased Premises or the Project,
including any complaints, notices, warnings or asserted violations in
connection therewith. Each party shall also supply to the other, as promptly
as possible, and in any event within three (3) business days after such party
first receives or sends the same, copies of all claims, reports, complaints,
notices, warnings, asserted violations or other communications relating in any
way to the Leased Premises, the Project or Tenant's or Landlord's use thereof.
ARTICLE 7.
INSURANCE, INDEMNITY, CONDEMNATION, DAMAGE AND DEFAULT
7.01 LANDLORD'S INSURANCE. Landlord shall secure and maintain policies
of insurance for the Project (including the Leased Premises) covering loss of
or damage to the Project, including the Tenant Improvements, but excluding
all subsequent alterations, additions and improvements to the Leased
Premises, with loss payable to Landlord and to the holders of any deeds of
trust, mortgages or ground leases on the Project. Landlord shall not be
obligated to obtain insurance for Tenant's trade fixtures, equipment,
furnishings, machinery or other property. Such policies shall provide
protection against fire and extended coverage perils and such additional
perils as Landlord deems suitable, and with such deductible(s) as Landlord
shall deem reasonably appropriate. Landlord shall further secure and
maintain commercial general liability insurance with respect to the Project
in such amount as Landlord shall determine, such insurance to be in addition
to, and not in lieu of, the liability insurance required to be maintained by
Tenant. In addition, Landlord shall secure and maintain rental income
insurance. Notwithstanding any other provision in this Lease to the
contrary, in the event of any loss or claim for which Landlord has received
insurance proceeds from such rental income insurance (or would have been
entitled to receive insurance proceeds had Landlord obtained and maintained
the insurance required by this SECTION 7.01), Tenant's Rent obligations under
this Lease shall xxxxx with respect to the extent of such insurance proceeds
received (or Landlord would have been entitled to receive had Landlord
obtained and maintained the insurance required by this SECTION 7.01). If the
annual cost to Landlord for any such insurance exceeds the standard rates
because of the nature of Tenant's operations, Tenant shall, upon receipt of
appropriate invoices and supporting documentation detailing the reasons for
such increased costs, reimburse Landlord for such increases in cost, which
amounts shall be deemed Additional Rent hereunder. Tenant shall not be named
as an additional insured on any policy of insurance maintained by Landlord.
7.02 TENANT'S LIABILITY INSURANCE.
(a) Tenant (with respect to both the Leased Premises and the Project)
shall secure and maintain, at its own expense, at all times during the Term,
a policy or policies of commercial general liability insurance with the
premiums thereon fully paid by the installment due date, protecting Tenant
and naming Landlord, the holders of any deeds of trust, mortgages or ground
leases on the Project, and Landlord's representatives (which term, whenever
used in this ARTICLE 7, shall be deemed to include Landlord's partners,
trustees, ancillary trustees, officers, directors, shareholders,
beneficiaries, agents, employees and independent contractors) as additional
insureds against claims for bodily injury, personal injury, advertising
injury and property damage (including attorneys' fees) based upon, involving
or arising out of Tenant's operations, assumed liabilities or Tenant's use,
occupancy or maintenance of the Leased Premises and the Common Areas of the
Project. Such insurance shall provide for a minimum amount of Two Million
Dollars ($2,000,000.00) for property damage or injury to or death of one or
more than one person in any one accident or occurrence, with an annual
aggregate limit of at least Four Million Dollars ($4,000,000.00). The
coverage required to be carried shall include fire legal liability, blanket
contractual liability, personal injury liability (libel, slander, false
arrest and wrongful eviction), broad form property damage liability, products
liability and completed operations coverage (as well as owned, non-owned and
hired automobile liability if an exposure exists) and the policy shall
contain an exception to any pollution exclusion which insures damage or
injury arising out of heat, smoke or fumes from a hostile fire. Such
insurance shall be written on an occurrence basis and contain a separation of
insureds provision or cross-liability endorsement acceptable to Landlord.
Tenant shall provide Landlord with a certificate evidencing such insurance
coverage. The certificate shall indicate that the insurance provided
specifically recognizes the liability assumed by Tenant under this Lease
(including without limitation performance by Tenant under SECTION 7.04) and
that Tenant's insurance is primary to and not contributory with any other
insurance maintained by Landlord, whose insurance shall be considered excess
insurance only. Not more frequently than every two (2) years, if, in the
opinion of any mortgagee of Landlord or of the insurance broker retained by
Landlord, the amount of liability insurance coverage at that time is not
adequate, then Tenant shall increase its liability insurance coverage as
required by either any mortgagee of Landlord or Landlord's insurance broker.
(b) Tenant shall, at Tenant's expense, comply with (i) all insurance
company requirements pertaining to the use of the Leased Premises and (ii)
all rules, orders, regulations or requirements of the American Insurance
Association (formerly the National Board of Fire Underwriters) and with any
similar body.
7.03 TENANT'S ADDITIONAL INSURANCE REQUIREMENTS.
(a) Tenant shall secure and maintain, at Tenant's expense, at all
times during the Term, a policy of physical damage insurance on all of
Tenant's fixtures, furnishings, equipment, machinery, merchandise and
personal property in the Leased Premises and on any alterations, additions or
improvements made by or for Tenant upon the Leased Premises (other than the
Tenant Improvements which shall be insured by Landlord), all for the full
replacement cost thereof without deduction for depreciation of the covered
items and in amounts that meet any co-insurance clauses of the policies of
insurance. Such insurance shall insure against those risks customarily
covered in an "all risk" policy of insurance covering physical loss or
damage. Tenant shall use the proceeds from such insurance for the
replacement of fixtures, furnishings, equipment and personal property and for
the restoration of any alterations, additions or improvements to the Leased
Premises. In addition, Tenant shall secure and maintain, at all times during
the Term, loss of income, business interruption and extra expense insurance
in such amounts as will reimburse Tenant for direct or indirect loss of
earnings and incurred costs attributable to all perils commonly insured
against by prudent tenants or attributable to prevention of access to the
Leased Premises or to the Building as a result of such perils; such insurance
shall be maintained with Tenant's property insurance carrier. Further, Tenant
shall secure and maintain at all times during the Term workers' compensation
insurance in such amounts as are required by law, employer's liability
insurance in the amount of One Million Dollars ($1,000,000.00) per
occurrence, and all such other insurance as may be required by applicable law
or as may be reasonably required by Landlord. In the event Tenant makes any
alterations, additions or improvements to the Leased Premises, prior to
commencing any work in the Leased Premises, Tenant shall secure "builder's
all risk" insurance which shall be maintained throughout the course of
construction, such policy being an all risk builder's risk completed value
form, in an amount approved by Landlord, but not less than the total contract
price for the construction of such alterations, additions or improvements and
covering the construction of such alterations, additions or improvements, and
such other insurance as Landlord may reasonably require, it being understood
and agreed that all of such alterations, additions or improvements shall be
insured by Tenant pursuant to this SECTION 7.03 immediately upon completion
thereof. Tenant shall provide Landlord with certificates of all such
insurance. The property insurance certificate shall confirm that the waiver
of subrogation required to be obtained pursuant to SECTION 7.05 is permitted
by the insurer. Tenant shall, at least thirty (30) days prior to the
expiration of any policy of insurance required to be maintained by Tenant
under this Lease, furnish Landlord with an "insurance binder" or other
satisfactory evidence of renewal thereof.
(b) All policies required to be carried by Tenant under this Lease
shall be issued by and binding upon a reputable insurance company of good
financial standing authorized to do business in the State of California with
a rating of at least A-VII, or such other rating as may be required by a
lender having a lien on the Project, as set forth in the most current issue
of "Best's Insurance Reports." Tenant shall not do or permit anything to be
done that would invalidate the insurance policies referred to in this ARTICLE
7. Evidence of insurance provided to Landlord shall include an endorsement
showing that Landlord, its representatives and the holders of any deeds of
trust, mortgages or ground leases on the Project are included as additional
insureds on general liability insurance, and as loss payees for property
insurance, to the extent required hereunder, and an endorsement whereby the
insurer agrees not to cancel, non-renew or materially alter the policy
without at least thirty (30) days prior written notice to Landlord, its
representatives and any mortgagee of Landlord.
(c) In the event that Tenant fails to provide evidence of insurance
required to be provided by Tenant under this Lease, prior to commencement of
the Term, and thereafter during the Term, within ten (10) days following
Landlord's request therefor, and thirty (30) days prior to the expiration
date of any such coverage, Landlord shall be authorized (but not required) to
procure such coverage in the amounts
stated with all costs thereof (plus a fifteen percent (15%) administrative
fee) to be chargeable to Tenant and payable upon written invoice therefor,
which amounts shall be deemed Additional Rent hereunder.
(d) The minimum limits of insurance required by this Lease, or as
carried by Tenant, shall not limit the liability of Tenant nor relieve Tenant
of any obligation hereunder.
7.04 INDEMNITY AND EXONERATION.
(a) To the extent not prohibited by law, Landlord and Landlord's
representatives shall not be liable for any loss, injury or damage to person
or property of Tenant, Tenant's agents, employees, contractors, invitees or
any other person, whether caused by theft, fire, act of God, acts of the
public enemy, riot, strike, insurrection, war, court order, requisition or
order of governmental body or authority or which may arise through repair,
alteration or maintenance of any part of the Project or failure to make any
such repair or from any other cause whatsoever, except as expressly otherwise
provided in SECTIONS 7.06 and 7.07. Landlord shall not be liable for any
loss, injury or damage arising from any act or omission of any other tenant
or occupant of the Project, nor shall Landlord be liable under any
circumstances for damage or inconvenience to Tenant's business or for any
loss of income or profit therefrom.
(b) To the extent not covered by Landlord's insurance, Tenant shall
indemnify, protect, defend and hold the Project, Landlord and its
representatives, harmless of and from any and all claims, liability, costs,
penalties, fines, damages, injury, judgments, forfeiture, losses (including
without limitation diminution in the value of the Leased Premises) or
expenses (including without limitation attorneys' fees, consultant fees,
testing and investigation fees, expert fees and court costs) arising out of
or in any way related to or resulting directly or indirectly from (i) the use
or occupancy of the Leased Premises, (ii) the activities of Tenant, its
agents, employees, contractors or invitees in or about the Leased Premises or
the Project, (iii) any failure to comply with any applicable law, and (iv)
any default or breach by Tenant in the performance of any obligation of
Tenant under this Lease; provided, however, that the foregoing indemnity
shall not be applicable to claims arising by reason of the negligence or
willful misconduct of Landlord.
(c) To the extent not covered by Landlord's insurance, Tenant shall
indemnify, protect, defend and hold the Project, Landlord and its
representatives, harmless of and from any and all claims, liability, costs,
penalties, fines, damages, injury, judgments, forfeiture, losses (including
without limitation diminution in the value of the Leased Premises) or
expenses (including without limitation attorneys' fees, consultant fees,
testing and investigation fees, expert fees and court costs) arising out of
or in any way related to or resulting directly or indirectly from work or
labor performed, materials or supplies furnished to or at the request of
Tenant or in connection with obligations incurred by or performance of any
work done for the account of Tenant in the Leased Premises or the Project,
with the exception of any such work, labor, materials or supplies directly
related to any Landlord Improvements or Tenant Improvements constructed
pursuant to EXHIBIT B attached hereto.
(d) The provisions of this SECTION 7.04 shall survive the expiration
or sooner termination of this Lease. BY SIGNING ITS INITIALS BELOW, TENANT
ACKNOWLEDGES THAT IT HAS READ AND UNDERSTANDS THE MEANING AND RAMIFICATIONS
OF THE PROVISIONS SET FORTH IN THIS SECTION 7.04 AND FURTHER ACKNOWLEDGES
THAT SUCH PROVISIONS WERE SPECIFICALLY NEGOTIATED.
/s/ JA
________________________
TENANT'S INITIALS
7.05 WAIVER OF SUBROGATION. Anything in this Lease to the contrary
notwithstanding, Landlord and Xxxxxx on behalf of themselves and their
respective successors and assigns (including, without limitation, the holders
of any deeds of trust, mortgages or ground leases on the Project, and
Landlord's representatives) each waives all rights of recovery, claim, action
or cause of action against the other, its agents (including partners, both
general and limited), trustees, officers, directors, and employees, for any
loss or damage that may occur to the Leased Premises, or any improvements
thereto, or the Project or any personal property of such party therein, by
reason of any cause required to be insured against under this Lease to the
extent of the coverage required, regardless of cause or origin, including
negligence of the other party hereto, provided that such party's insurance is
not invalidated thereby; and each party covenants that, to the fullest extent
permitted by law, no insurer shall hold any right of subrogation against such
other party. Landlord and Tenant shall each advise its respective insurers
of the foregoing and such waiver shall be a part of each policy maintained by
Tenant and Landlord which applies to the Leased Premises, any part of the
Project or Tenant's use and occupancy and Landlord's ownership and management
of any part thereof.
7.06 CONDEMNATION.
(a) If the Leased Premises are taken under the power of eminent domain
or sold under the threat of the exercise of such power (all of which are
referred to herein as "condemnation"), this Lease shall terminate as to the
part so taken as of the date the condemning authority takes title or
possession, whichever first occurs (the "date of taking"). If the Leased
Premises or any portion of the Project is taken by condemnation to such an
extent as to render the Leased Premises untenantable as reasonably determined
by Landlord and Tenant, this Lease shall, at the option of either party to be
exercised in writing within thirty (30) days after receipt of written notice
of such taking, forthwith cease and terminate as of the date of taking. All
proceeds from any condemnation of the Leased Premises shall belong and be
paid to Landlord, subject to the rights of any mortgagee of Landlord's
interest in the Project or the beneficiary of any deed of trust which
constitutes an encumbrance thereon; provided that Tenant shall be entitled to
any compensation separately awarded to Tenant for Tenant's relocation
expenses or, loss of Tenant's trade fixtures. If this Lease continues in
effect after the date of taking pursuant to the provisions of this SECTION
7.06(a), Landlord shall proceed with reasonable diligence to repair, at its
expense, the remaining parts of the Project and the Leased Premises to
substantially their former condition to the extent that the same is feasible
(subject to reasonable changes which Landlord shall deem desirable) and so as
to constitute a complete and tenantable Project and Leased Premises. Gross
Rent shall xxxxx to the extent appropriate during the period of restoration,
and Gross Rent shall thereafter be equitably adjusted according to the
remaining Rentable Area of the Leased Premises and the Building.
(b) In the event of a temporary taking of all or a portion of the
Leased Premises, there shall be no abatement of Rent and Tenant shall remain
fully obligated for performance of all of the covenants and obligations on
its part to be performed pursuant to the terms of this Lease, except that
Xxxxxx's maintenance and repair obligations with respect to the area affected
by the temporary taking shall xxxxx during any such temporary taking. All
proceeds awarded or paid with respect thereto shall belong to Tenant.
7.07 DAMAGE OR DESTRUCTION. In the event of a fire or other casualty
in the Leased Premises, Tenant shall immediately give notice thereof to
Landlord. The following provisions shall then apply:
(a) If the damage is limited solely to the Leased Premises and the
Leased Premises can, in Landlord's reasonable opinion, be made tenantable
with all damage repaired within six (6) months from the date of damage, then
Landlord shall be obligated to rebuild the same to substantially their former
condition to the extent that the same is feasible (subject to reasonable
changes which Landlord shall deem desirable and such changes as may be
required by applicable law) and shall proceed with reasonable diligence to do
so and this Lease shall remain in full force and effect.
(b) If portions of the Project outside the boundaries of the Leased
Premises are damaged or destroyed (whether or not the Leased Premises are
also damaged or destroyed) and the Leased Premises and the Project can, in
Landlord's reasonable opinion, both be made tenantable with all damage
repaired within six (6) months from the date of damage or destruction, and
provided that Landlord determines that it is economically feasible, then
Landlord shall be obligated to rebuild the same to substantially their former
condition to the extent that the same is feasible (subject to reasonable
changes which Landlord shall reasonably deem desirable and such changes as
may be required by applicable law) and shall proceed with reasonable
diligence to do so and this Lease shall remain in full force and effect.
(c) Notwithstanding anything to the contrary contained in SECTIONS
7.07(a) or 7.07(b) above, Landlord shall not have any obligation whatsoever
to repair, reconstruct or restore the Leased Premises when any damage thereto
or to the Project occurs during the last twelve (12) months of the Term and
Tenant has not effectively exercised any option granted to Tenant to extend
the Term. Under such circumstances, Landlord shall promptly notify Tenant of
its decision not to rebuild, whereupon the Lease shall terminate as of the
date of the damage or destruction.
(d) If neither SECTION 7.07(a) nor 7.07(b) above applies, Landlord
shall so notify Tenant within sixty (60) days after the date of the damage or
destruction and either Tenant or Landlord may terminate this Lease within
thirty (30) days after the date of such notice, such termination notice to be
effective as of the date of the damage or destruction.
(e) During any period when Xxxxxx's use of the Leased Premises is
significantly impaired by damage or destruction, Gross Rent shall xxxxx in
proportion to the degree to which Xxxxxx's use of the Leased Premises is
impaired until such time as the Leased Premises are made tenantable as
mutually agreed by Landlord and Xxxxxx.
(f) The proceeds from any insurance paid by reason of damage to or
destruction of the Project or any part thereof insured by Landlord shall
belong to and be paid to Landlord, subject to the rights of any mortgagee of
Landlord's interest in the Project or the beneficiary of any deed of trust
which constitutes an encumbrance thereon. Tenant shall be responsible at its
sole cost and expense for the repair, restoration and replacement of (i) its
fixtures, furnishings, equipment, machinery, merchandise and personal
property in the Leased Premises, and (ii) its alteration, additions and
improvements other than the Tenant Improvements and the Landlord
Improvements; provided, however, that Landlord shall have the option of
requiring Tenant to assign to Landlord (or any party designated by Landlord)
some or all of the proceeds payable to Tenant under this ARTICLE 7, whereupon
Landlord shall be responsible for the repair or restoration of such insured
property.
(g) Landlord's repair and restoration obligations under this SECTION
7.07 shall not impair or otherwise affect the rights and obligations of the
parties set forth elsewhere in this Lease. Subject to SECTION 7.07(e),
Landlord shall not be liable for any inconvenience or annoyance to Tenant,
its employees, agents, contractors or invitees, or injury to Tenant's
business resulting in any way from such damage or the repair thereof.
Landlord and Xxxxxx agree that the terms of this Lease shall govern the
effect of any damage to or destruction of the Leased Premises or the Project
with respect to the termination of this Lease and hereby waive the provisions
of any present or future statute or law to the extent inconsistent therewith.
7.08 DEFAULT BY TENANT.
(a) Events of Default. The occurrence of any of the following shall
constitute an event of default on the part of Tenant:
(1) ABANDONMENT. Vacating the Leased Premises without the
intention to reoccupy same, or abandonment of the Leased Premises for a
continuous period of not less than thirty (30) consecutive days.
(2) NONPAYMENT OF RENT. Failure to pay any installment of Rent
due and payable hereunder on the date when payment is due, such failure
continuing for a period of three (3) business days after written notice of
such failure; provided, however, that Landlord shall not be required to
provide such notice more than two (2) times during any calendar year during
the Term with respect to non-payment of Gross Rent or Additional Rent, the
xxxx such non-payment constituting default without requirement of notice;
furthermore, if Tenant shall be served with a demand for the payment of past
due Rent, any payment(s) tendered thereafter to cure any default by Tenant
shall be made only by cashier's check, wire-transfer or direct deposit of
immediately available funds.
(3) OTHER OBLIGATIONS. Failure to perform any obligation,
agreement or covenant under this Lease other than those matters specified in
SUBSECTIONS 7.08(a)(1) and 7.08(a)(2), such failure continuing for a period
of thirty (30) days after written notice of such failure (or such longer
period as is reasonably necessary to remedy such failure; provided that
Xxxxxx commences the remedy within such thirty (30)-day period and
continuously and diligently pursues such remedy at all times until such
failure is cured).
(4) GENERAL ASSIGNMENT. Any general arrangement or assignment by
Tenant for the benefit of creditors.
(5) BANKRUPTCY. The filing of any voluntary petition in
bankruptcy by Xxxxxx, or the filing of an involuntary petition against
Tenant, which involuntary petition remains undischarged for a period of sixty
(60) days. In the event that under applicable law the trustee in bankruptcy
or Tenant has the right to affirm this Lease and continue to perform the
obligations of Tenant hereunder, such trustee or Tenant shall, within such
time period as may be permitted by the bankruptcy court having jurisdiction,
cure all defaults of Tenant hereunder outstanding as of the date of the
affirmance of this Lease and provide to Landlord such adequate assurances as
may be necessary to ensure Landlord of the continued performance of Tenant's
obligations under this Lease.
(6) RECEIVERSHIP. The appointment of a trustee or receiver to
take possession of all or substantially all of Tenant's assets or the Leased
Premises, where possession is not restored to Tenant within forty-five (45)
days.
(7) ATTACHMENT. The attachment, execution or other judicial
seizure of all or substantially all of Tenant's assets or the Leased
Premises, if such attachment or other seizure remains undismissed or
undischarged for a period of forty-five (45) days after the levy thereof.
(8) INSOLVENCY. The admission by Tenant in writing of its
inability to pay its debts as they become due; the filing by Tenant of a
petition seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future
statute, law or regulation; the filing by Tenant of an answer admitting or
failing timely to contest a material allegation of a petition filed against
Tenant in any such proceeding; or, if within sixty (60) days after the
commencement of any proceeding against Tenant seeking any reorganization,
arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any present or
future statute, law or regulation, such proceeding shall not have been
dismissed.
(9) GUARANTOR. [intentionally deleted.]
(10) PARTNER. If Tenant is a partnership or consists of more than
one (1) person or entity, if any partner of the partnership or any person or
entity constituting Tenant is involved in any of the events or acts described
in SUBSECTIONS 7.08(a)(4) through (8).
(11) MISREPRESENTATION. The discovery by Landlord that any
representation, warranty or financial statement given to Landlord by Tenant
under this Lease was materially false or misleading and materially affects
Tenant's ability to perform its obligations under this Lease.
(b) Remedies Upon Default.
(1) TERMINATION. If an event of default occurs, Landlord shall
have the right, with or without notice or demand, immediately (after
expiration of any applicable grace period specified herein) to terminate this
Lease, and at any time thereafter recover possession of the Leased Premises
or any part thereof and expel and remove therefrom Tenant and any other
person occupying the same, by any lawful means, and again repossess and enjoy
the Leased Premises without prejudice to any of the remedies that Landlord
may have under this Lease, or at law or in equity by reason of Tenant's
default or of such termination.
(2) CONTINUATION AFTER DEFAULT. Even though Tenant has breached
this Lease and/or abandoned the Leased Premises, this Lease shall continue in
effect for so long as Landlord does not terminate Tenant's right to
possession under SECTION 7.08(b)(1) hereof in writing, and Landlord may
enforce all of its rights and remedies under this Lease, including (but
without limitation) the right to recover Rent as it becomes due, and
Landlord, without terminating this Lease, may exercise all of the rights and
remedies of a landlord under Section 1951.4 of the Civil Code of the State of
California or any amended or successor code section. Acts of maintenance or
preservation, efforts to relet the Leased Premises or the appointment of a
receiver upon application of Landlord to protect Landlord's interest under
this Lease shall not constitute an election to terminate Xxxxxx's right to
possession. If Landlord elects to relet the Leased Premises for the account
of Tenant, the rent received by Landlord from such reletting shall be applied
as follows: first, to the payment of any indebtedness other than Rent due
hereunder from Tenant to Landlord; second, to the payment of any costs of
such reletting; third, to the payment of the cost of any alterations or
repairs to the Leased Premises; fourth, to the payment of Rent due and unpaid
hereunder; and the balance, if any, shall be held by Landlord and applied in
payment of future Rent as it becomes due. If that portion of rent received
from the reletting which is applied against the Rent due hereunder is less
than the amount of the Rent due, Tenant shall pay the deficiency to Landlord
promptly upon demand by Landlord. Such deficiency shall be calculated and
paid monthly. Tenant shall also pay to Landlord, as soon as determined, any
costs and expenses incurred by Landlord in connection with such reletting or
in making alterations and repairs to the Leased Premises, which are not
covered by the rent received from the reletting.
(c) Damages Upon Termination. Should Landlord terminate this Lease
pursuant to the provisions of SECTION 7.08(b)(1) hereof, Landlord shall have
all the rights and remedies of a landlord provided by Section 1951.2 of the
Civil Code of the State of California. Upon such termination, in addition to
any other rights and remedies to which Landlord may be entitled under
applicable law, Landlord shall be entitled to recover from Tenant: (i) the
worth at the time of award of the unpaid Rent and other amounts which had
been earned at the time of termination; (ii) the worth at the time of award
of the amount by which the unpaid Rent which would have been earned after
termination until the time of
award exceeds the amount of such Rent loss that Tenant proves could have been
reasonably avoided; (iii) 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 Rent loss that Tenant proves could be reasonably avoided; and
(iv) any other amount necessary to compensate Landlord for all the detriment
proximately caused by Xxxxxx's failure to perform its obligations under this
Lease or which, in the ordinary course of things, would be likely to result
therefrom. The "worth at the time of award" of the amounts referred to in
clauses (i) and (ii) shall be computed with interest at the lesser of thirteen
percent (13%) per annum or the maximum rate then allowed by law. The "worth at
the time of award" of the amount referred to in clause (iii) shall be computed
by discounting such amount at the discount rate of the Federal Reserve Bank of
San Francisco at the time of the award plus one percent (1%).
(d) Computation of Rent for Purposes of Default. For purposes of
computing unpaid Rent which would have accrued and become payable under this
Lease pursuant to the provisions of SECTION 7.08(c), unpaid Rent shall consist
of the sum of:
(1) the total Base Rent for the balance of the Term, plus
(2) a computation of Tenant's Proportionate Share of Increased
Basic Operating Cost and of Tenant's Proportionate Share of Increased Property
Taxes for the balance of the Term, the assumed amounts for the Computation Year
of the default and each future Computation Year in the Term to be equal to
Tenant's Proportionate Share of Increased Basic Operating Cost and Tenant's
Proportionate Share of Property Taxes, respectively, for the Computation Year
immediately prior to the year in which default occurs, compounded at a per annum
rate equal to the mean average rate of inflation for the preceding five (5)
calendar years as determined by the United States Department of Labor, Bureau of
Labor Statistics Consumer Price Index (All Urban Consumers, all items
(1982-84=100)) for the Metropolitan Area or Region in which the Project is
located. If such Index is discontinued or revised, the average rate of
inflation shall be determinedby reference to the index designated as the
successor or substitute index by the government of the United States.
(e) Late Charge. If any payment required to be made by Tenant under
this Lease is not received by Landlord within ten (10) days after the date the
same became due, Tenant shall pay to Landlord a one-time late charge in an
amount equal to five percent (5%) of the delinquent amount. The parties agree
that Landlord would incur costs not contemplated by this Lease by virtue of such
delinquencies, including without limitation administrative, collection,
processing and accounting expenses, the amount of which would be extremely
difficult to compute, and the amount stated herein represents a reasonable
estimate thereof. Acceptance of such late charge by Landlord shall in no event
constitute a waiver of Tenant's breach or default with respect to such
delinquency, or prevent Landlord from exercising any of Landlord's other rights
and remedies except that acceptance of the delinquent amount, together with any
applicable late charge and interest, shall constitute a complete cure of any
such default.
(f) Interest on Past-Due Obligations. Except as expressly otherwise
provided in this Lease, any Rent due Landlord hereunder, other than late
charges, which is not received by Landlord within ten (10) days after the date
on which it was due, shall bear interest from the day after it was due at the
discount rate of the Federal Reserve Bank of San Francisco at the time of the
award plus eight percent (8%). in addition to the late charge provided for in
SECTION 7.08(e).
(g) Xxxxxxxx's Right to Perform. Notwithstanding anything to the
contrary set forth elsewhere in this Lease, in the event Tenant fails to perform
any affirmative duty or obligation of Tenant under this Lease, then within five
(5) business days after written notice to Tenant (and without notice in case of
an emergency) Landlord may (but shall not be obligated to) perform such duty or
obligation on
Tenant's behalf, including, without limitation, the obtaining of insurance
policies or governmental licenses, permits or approvals. Tenant shall
reimburse Landlord upon demand for the costs and expenses of any such
performance (including penalties, interest and attorneys' fees incurred in
connection therewith). Such costs and expenses incurred by Landlord shall be
deemed Additional Rent hereunder.
(h) Remedies Cumulative. All rights, privileges and elections or
remedies of Landlord are cumulative and not alternative with all other rights
and remedies at law or in equity to the fullest extent permitted by law.
(i) Waiver. Tenant waives any right of redemption or relief from
forfeiture under California Code of Civil Procedure Sections 1174 and 1179, or
under any other present or future law in the event Tenant is evicted and
Landlord takes possession of the Leased Premises by reason of a default.
ARTICLE 8.
OPTION TO RENEW
8.01 OPTION TO RENEW.
(a) Landlord hereby grants to Tenant one (1) option (the "Option") to
extend the term of this Lease for an additional period of five (5) years (the
"Option Term"), all on the following terms and conditions:
(1) The Option must be exercised, if at all, by written notice
irrevocably exercising the Option ("Option Notice") delivered by Tenant to
Landlord not later than twelve (12) months prior to the Term Expiration Date.
Further, the Option shall not be deemed to be properly exercised if, as of the
date of the Option Notice or at the Term Expiration Date, (i) Tenant is in
default under this Lease, (ii) Tenant has assigned this Lease or its interest
therein (other than to an affiliate, parent or subsidiary of Tenant) or in
connection with a permitted merger or acquisition, or (iii) Tenant, or Tenant's
affiliate, parent or subsidiary, is in possession of less than fifty percent
(50%) of the square footage of the Leased Premises. Provided Tenant has
properly and timely exercised the Option, the term of this Lease shall be
extended for the period of the Option Term, and all terms, covenants and
conditions of this Lease shall remain unmodified and in full force and effect,
except that the Base Rent shall be modified as set forth in SECTION 8.01(a)(2)
below.
(2) The Base Rent payable for the Option Term shall be the
greater of (i) the Base Rent payable on the Term Expiration Date, or (ii) the
then-current rental rate per rentable square foot (as further defined below,
"FMRR") being agreed to in new leases by the Landlord and other landlords of
buildings in the San Francisco, California area which are comparable in quality,
location and prestige to the Building ("Comparable Buildings") and tenants
leasing space in the Building or Comparable Buildings. As used herein, "FMRR"
shall mean the rental rate per rentable square foot for which Landlord and/or
other landlords are entering into new leases within the time period of fifteen
(15) to twelve (12) months prior to the Term Expiration Date ("Market
Determination Period"), with new tenants leasing from Landlord and other
landlords office space in the Building and/or Comparable Buildings ("Comparative
Transactions"). To the extent such other Comparable Buildings have historically
received lower or higher rents from the rents in the Building, then for the
purpose of arriving at the FMRR, such rates when used to establish the FMRR in
the Building shall be increased or decreased as appropriate to reflect such
historical differences. Landlord shall provide its determination of the FMRR to
Tenant within twenty (20) days after Landlord receives the Option Notice.
Tenant shall have fifteen (15) days ("Tenant's Review Period") after receipt of
Landlord's notice of the FMRR within which to accept such FMRR or to reasonably
object thereto in writing. In the event Tenant objects to the FMRR submitted by
Landlord, Landlord and Xxxxxx shall attempt to agree upon such FMRR. If
Landlord and Tenant fail to reach agreement on such FMRR within fifteen (15)
days following the expiration of Tenant's Review Period (the "Outside Agreement
Date"), then each party shall place in a separate sealed envelope its final
proposal as to FMRR and such determination shall be submitted to arbitration in
accordance with subparagraph 8.01(b) below.
(b) Landlord and Tenant shall meet with each other within five (5)
business days of the Outside Agreement Date and exchange the sealed envelopes
and then open such envelopes in each other's presence. If Landlord and Tenant
do not mutually agree upon the FMRR within two (2) business days after the
exchange and opening of envelopes, then, within ten (10) business days of the
exchange and opening of envelopes, Landlord and Tenant shall agree upon and
jointly appoint one (1) arbitrator who shall be by profession be a real estate
appraiser or broker who shall have been active over the ten (10) year period
ending on the date of such appointment in the leasing of comparable commercial
properties in the vicinity of the Building. Neither Landlord nor Tenant shall
consult with such broker or appraiser as to his or her opinion as to FMRR prior
to the appointment. The determination of the arbitrator shall be limited solely
to the issue of whether Landlord's or Tenant's submitted FMRR for the Premises
is the closer to the actual rental rate per rentable square foot for new leases
within the Market Determination Period for Comparative Transactions. Such
arbitrator may hold such hearings and require such briefs as the arbitrator, in
his or her sole discretion, determines is necessary. In addition, Landlord or
Tenant may submit to the arbitrator with a copy to the other party within five
(5) business days after the appointment of the arbitrator any data and
additional information that such party deems relevant to the determination by
the arbitrator ("Data") and the other party may submit a reply in writing within
five (5) business days after receipt of such Data.
(1) The arbitrator shall, within thirty (30) days of his or her
appointment, reach a decision as to whether the parties shall use Landlord's or
Tenant's submitted FMRR, and shall notify Landlord and Tenant of such
determination.
(2) The decision of the arbitrator shall be binding upon Landlord
and Tenant.
(3) If Landlord and Xxxxxx fail to agree upon and appoint such
arbitrator, then the appointment of the arbitrator shall be made by the American
Arbitration Association.
(4) The cost of arbitration shall be paid by Landlord and Tenant
equally.
(5) The arbitration proceeding and all evidence given or
discovered pursuant thereto shall be maintained in confidence by all parties.
ARTICLE 9.
MISCELLANEOUS MATTERS
9.01 PARKING. None.
9.02 BROKERS. Xxxxxxxx has been represented in this transaction by
Xxxxxxxx's Broker. Xxxxxx has been represented in this transaction by
Xxxxxx's Broker. Upon full execution of this Lease by both parties, Landlord
shall pay to Landlord's Broker and Xxxxxx's Broker a fee for brokerage
services rendered by it in this transaction provided for in separate written
agreements between Landlord and Landlord's Broker and Landlord's Broker and
Xxxxxx's Broker. Each party represents and warrants to the other that the
brokers named in the Basic Lease Information sheet are the only agents,
brokers, finders or other similar parties with whom such party has had any
dealings in connection with the
negotiation of this Lease and the consummation of the transaction
contemplated hereby. Each party hereby agrees to indemnify, defend and hold
the other party free and harmless from and against liability for compensation
or charges which may be claimed by any agent, broker, finder or other similar
party by reason of any dealings with or actions of such indemnifying party in
connection with the negotiation of this Lease and the consummation of this
transaction, including any costs, expenses and attorneys' fees incurred with
respect thereto.
9.03 NO WAIVER. No waiver by either party of the default or breach of
any term, covenant or condition of this Lease by the other shall be deemed a
waiver of any other term, covenant or condition hereof, or of any subsequent
default or breach by the other of the same or of any other term, covenant or
condition hereof. Xxxxxxxx's consent to, or approval of, any act shall not be
deemed to render unnecessary the obtaining of Landlord's consent to, or
approval of, any subsequent or similar act by Tenant, or be construed as the
basis of an estoppel to enforce the provision or provisions of this Lease
requiring such consent. Regardless of Landlord's knowledge of a default or
breach at the time of accepting Rent, the acceptance of Rent by Landlord shall
not be a waiver of any preceding default or breach by Tenant of any provision
hereof, other than the failure of Tenant to pay the particular Rent so
accepted. Any payment given Landlord by Tenant may be accepted by Landlord on
account of monies or damages due Landlord, notwithstanding any qualifying
statements or conditions made by Tenant in connection therewith, which
statements and/or conditions shall be of no force or effect whatsoever unless
specifically agreed to in writing by Landlord at or before the time of deposit
of such payment.
9.04 RECORDING. Neither this Lease nor a memorandum thereof shall be
recorded without the prior written consent of Landlord, which consent may be
withheld in Landlord's sole discretion. Notwithstanding the foregoing, Tenant
may record that certain Memorandum of Lease substantially in the form attached
hereto as EXHIBIT G.
9.05 HOLDING OVER. If Xxxxxx holds over after expiration or termination
of this Lease, Tenant shall pay for each month of hold-over tenancy two
hundred (200%) times the Gross Rent which Tenant was obligated to pay for the
month immediately preceding the end of the Term for each month or any part
thereof of any such hold-over period, together with such other amounts as may
become due hereunder. No holding over by Tenant after the Term shall operate
to extend the Term. In the event of any unauthorized holding over, Xxxxxx
shall indemnify, defend and hold Landlord harmless from and against all
claims, demands, liabilities, losses, costs, expenses (including attorneys'
fees), injury and damages incurred by Landlord as a result of Xxxxxx's delay
in vacating the Leased Premises.
9.06 TRANSFERS BY LANDLORD. The term "Landlord" as used in this Lease
shall mean the owner(s) at the time in question of the fee title to the Leased
Premises or, if this is a sublease, of the Tenant's interest in the master
lease. If Landlord transfers, in whole or in part, its rights and obligations
under this Lease or in the Project, upon its transferee's assumption of
Landlord's obligations hereunder and delivery to such transferee of any unused
Security Deposit then held by Landlord, no further liability or obligations
shall thereafter accrue against the transferring or assigning person as
Landlord hereunder. Subject to the foregoing, the obligations and/or
covenants in this Lease to be performed by the Landlord shall be binding only
upon the Landlord as defined in this SECTION 9.06.
9.07 ATTORNEYS' FEES. In the event either party places the enforcement
of this Lease, or any part of it, or the collection of any Rent due, or to
become due, hereunder, or recovery of the possession of the Leased Premises,
in the hands of an attorney, or files suit upon the same, the prevailing party
shall recover its reasonable attorneys' fees, costs and expenses, including
those which may be incurred on appeal. Such fees may be awarded in the same
suit or recovered in a separate suit, whether or not suit is filed or any suit
that may be filed is pursued to decision or judgment. The term "prevailing
party" shall include, without limitation, a party who substantially obtains or
defeats the relief sought, as
the case may be, whether by compromise, settlement, judgment, or the
abandonment by the other party of its claim or defense. The attorneys' fee
award shall not be computed in accordance with any court fee schedule, but
shall be such as to fully reimburse all attorneys' fees reasonably incurred.
9.08 TERMINATION; MERGER. No act or conduct of Landlord, including,
without limitation, the acceptance of keys to the Leased Premises, shall
constitute an acceptance of the surrender of the Leased Premises by Tenant
before the scheduled Term Expiration Date. Prior to the Term Expiration Date,
only a written notice from Landlord to Tenant shall constitute acceptance of
the surrender of the Leased Premises and accomplish a termination of this
Lease. Unless specifically stated otherwise in writing by Landlord, the
voluntary or other surrender of this Lease by Tenant, the mutual termination
or cancellation hereof, or a termination hereof by Landlord for default by
Xxxxxx, shall automatically terminate any sublease or lesser estate in the
Leased Premises; provided, however, Landlord shall, in the event of any such
surrender, termination or cancellation, have the option to continue any one or
all of any existing subtenancies. Xxxxxxxx's failure within thirty (30) days
following any such event to make any written election to the contrary by
written notice to the holder of any such lesser interest, shall constitute
Landlord's election to have such event constitute the termination of such
interest.
9.09 AMENDMENTS; INTERPRETATION. This Lease may not be altered, changed
or amended, except by an instrument in writing signed by the parties in
interest at the time of the modification. The captions of this Lease are for
convenience only and shall not be used to define or limit any of its
provisions.
9.10 SEVERABILITY. If any term or provision of this Lease,
or the application thereof to any person or circumstances, shall to any extent
be invalid or unenforceable, the remainder of this Lease, or the application of
such provision to persons or circumstances other than those as to which it is
invalid or unenforceable, shall not be affected thereby, and each provision of
this Lease shall be valid and shall be enforceable to the fullest extent
permitted by law.
9.11 NOTICES. All notices, demands, consents and approvals which are
required or permitted by this Lease to be given by either party to the other
shall be in writing and shall be deemed to have been fully given by personal
delivery or by recognized overnight courier service or when deposited in the
United States mail, certified or registered, with postage prepaid, and
addressed to the party to be notified at the address for such party specified
on the Basic Lease Information sheet, or to such other place as the party to
be notified may from time to time designate by at least fifteen (15) days'
notice to the notifying party given in accordance with this SECTION 9.11,
except that upon Xxxxxx's taking possession of the Leased Premises, the Leased
Premises shall constitute Tenant's address for notice purposes. A copy of
all notices given to Landlord or Tenant under this Lease shall be concurrently
transmitted to such party or parties at such addresses as Landlord or Tenant,
as the case may be, may from time to time hereafter designate by notice to the
other party.
Any notice sent by registered or certified mail, return receipt
requested, shall be deemed given on the date of delivery shown on the receipt
card, or if no delivery date is shown, the postmark thereon. Notices
delivered by nationally recognized overnight courier shall be deemed given
twenty-four (24) hours after delivery of the same to the courier. If notice
is received on a Saturday, Sunday or legal holiday, it shall be deemed
received on the next business day. Tenant hereby appoints as its agent to
receive the service of all default notices and notice of commencement of
unlawful detainer proceedings the person in charge of or apparently in charge
of or occupying the Leased Premises at the time, and, if there is no such
person, then such service may be made by attaching the same on the main
entrance of the Leased Premises.
9.12 FORCE MAJEURE. Any prevention, delay or stoppage of work to be
performed by Landlord or Tenant which is due to strikes, labor disputes,
inability to obtain labor, materials, equipment or reasonable substitutes
therefor, acts of God, governmental restrictions or regulations or controls,
judicial orders, enemy or hostile government actions, civil commotion, or
other causes beyond the reasonable control of the party obligated to perform
hereunder, shall excuse performance of the work by that party for a period
equal to the duration of that prevention, delay or stoppage. Nothing in this
SECTION 9.12 shall excuse or delay Xxxxxx's obligation to pay Rent or other
charges due under this Lease.
9.13 GUARANTOR. [intentionally deleted.]
9.14 SUCCESSORS AND ASSIGNS. This Lease shall be binding upon and inure
to the benefit of Landlord, its successors and assigns (subject to the
provisions hereof, including, without limitation, SECTION 5.15), and shall be
binding upon and inure to the benefit of Tenant, its successors, and to the
extent assignment or subletting, may be approved by Landlord hereunder,
Xxxxxx's assigns or subtenants.
9.15 FURTHER ASSURANCES. Landlord and Xxxxxx each agree to promptly sign
all documents reasonably requested to give effect to the provisions of this
Lease.
9.16 INCORPORATION OF PRIOR AGREEMENTS. This Lease, including the
exhibits and addenda attached to it, contains all agreements of Landlord and
Tenant with respect to any matter referred to herein. No prior agreement or
understanding pertaining to such matters shall be effective.
9.17 APPLICABLE LAW. This Lease shall be governed by, construed and
enforced in accordance with the laws of the State of California.
9.18 TIME OF THE ESSENCE. Time is of the essence of each
and every covenant of this Lease. Each and every covenant, agreement or other
provision of this Lease on either party's part to be performed shall be deemed
and construed as a separate and independent covenant of such party, not
dependent on any other provision of this Lease or on any other covenant or
agreement set forth herein.
9.19 NO JOINT VENTURE. This Lease shall not be deemed or construed to
create or establish any relationship of partnership or joint venture or
similar relationship or arrangement between Landlord and Tenant hereunder.
9.20 AUTHORITY. If a party is a corporation, trust , general or limited
partnership or limited liability company, each individual executing this Lease
on behalf of such party represents and warrants that he or she is duly
authorized to execute and deliver this Lease on such party's behalf and that
this Lease is binding upon such party in accordance with its terms. If a
party is a corporation, trust, partnership, or limited liability company, such
party shall, within ten (10) business days after request by the other party,
deliver to the requesting party evidence satisfactory to the requesting party
of such authority.
9.21 [intentionally deleted].
9.22 OFFER. Preparation of this Lease by Landlord or
Landlord's agent and submission of same to Tenant shall not be deemed an offer
to lease to Tenant. This Lease is not intended to be binding and shall not be
effective until fully executed by both Landlord and Xxxxxx.
9.23 EXHIBITS; ADDENDA. The following Exhibits and addenda are attached
to, incorporated in and made a part of this Lease: EXHIBIT A Floor Plan of
the Leased Premises; EXHIBIT B
Initial Improvement of the Leased Premises; EXHIBIT C Confirmation of Term of
Lease; EXHIBIT D Building Rules and Regulations; EXHIBIT E Form of Fleet
National Bank's Lease Subordination, Non-Disturbance and Attornment Agreement;
EXHIBIT F Form of Letter of Credit; and EXHIBIT G Form of Memorandum of Lease.
[REMAINDER OF XXXX INTENTIONALLY LEFT BLANK; SIGNATURE PAGE TO FOLLOW.]
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
Date of Lease shown on Basic Lease Information sheet.
"LANDLORD":
CEP INVESTORS XII LLC,
a Delaware limited liability company
By: EPI Investors XII LLC,
a California limited liability company
Its Manager
By: Xxxxx Xxxxxxxx, Inc.,
a California corporation
Its Manager
By: /s/
--------------------------------
Typed Name:_____________________
Title: _________________________
"TENANT":
XXXXXXX.XXX INC,
a Washington corporation
By: /s/ Xxx Xxxxxxxxx
----------------------------------
Typed Name: Xxx Xxxxxxxxx
--------------------------
Title: Chief Operating Officer
-------------------------------
By: ____________________________
Typed Name:________________________
Title: ____________________________
EXHIBIT A
FLOOR PLAN
OF THE
LEASED PREMISES
1
EXHIBIT B
INITIAL IMPROVEMENT OF THE LEASED PREMISES
1. TENANT IMPROVEMENTS AND LANDLORD IMPROVEMENTS. Landlord shall cause
Xxxxxx Builders (the "Contractor") to construct and install the Tenant
Improvements (as defined below) and the Landlord Improvements (as defined
below). The Contractor shall construct and install the tenant improvements
(the "Tenant Improvements") in the Leased Premises, substantially in accordance
with plans, working drawings and specifications ("Tenant's Plans") prepared by
Xxxxxxx (the "Architect") and approved by Landlord and Tenant, which approval
shall not be unreasonably withheld by either party. Tenant's Plans shall
include a kitchen (the "Product Kitchen") used solely for the preparation of
food items to be photographed for inclusion in catalogs (in a variety of media).
The costs of preparing Tenant's Plans and performing the Tenant Improvements
shall be allocated between, and paid by, Landlord and Tenant as set forth in
this EXHIBIT B. Landlord shall require Contractor to competitively bid major
subcontracts and materials purchases. With the exception of mechanical,
electrical and fire safety subcontractors (whose charges shall not exceed those
generally charged in other similar buildings in the vicinity for tenant
improvement projects of the sort described in the Tenant's Plans), at least
three bids shall be secured for each subcontract and material contract.
2. TENANT'S PLANS. Tenant and Landlord shall mutually approve Tenant's
Plans in writing, each party's approval shall not be unreasonably withheld,
conditioned or delayed. Tenant's Plan's (including, but not limited to, the
Product Kitchen) shall comply with all applicable codes, laws, ordinances, rules
and regulations, shall not adversely affect the Building shell or core or any
systems, components or elements of the Building, shall be in a form sufficient
to secure the approval of all government authorities with jurisdiction over the
Building, and shall be otherwise satisfactory to Landlord in Landlord's
reasonable discretion. Tenant's Plans shall be complete plans, working drawings
and specifications for the layout, improvement and finish of the Leased Premises
consistent with the design and construction of the Building, including
mechanical and electrical drawings and decorating plans, showing as many of the
following as possible:
(1) Location and type of all partitions;
(2) Location and type of all doors, with hardware and keying
schedule;
(3) Ceiling plans, including light fixtures;
(4) Location of telephone equipment room, with all special electrical
and cooling requirements;
(5) Location and type of all electrical outlets, switches, telephone
outlets, and lights;
(6) Location of all sprinklers (on a design build basis or in
consultation with a sprinkler engineer);
(7) Location and type of all equipment requiring special electrical
requirements;
(8) Location, weight per square foot and description of any heavy
equipment or filing system exceeding fifty (50) pounds per square foot live and
dead load;
(9) Requirements for air conditioning or special ventilation;
1
(10) Type and color of floor covering;
(11) Location, type and color of wall covering;
(12) Location, type and color of paint or finishes;
(13) Location and type of plumbing;
(14) Location and type of kitchen equipment;
(15) Indicate critical dimensions necessary for construction;
(16) Details showing all millwork with verified dimensions and
dimensions of all equipment to be built in, corridor entrances, bracing or
support of special walls or glass partitions, and any other items or information
requested by Landlord; and
(17) Location of all cabling.
3. Xxxxxxxx's review and approval of Tenant's Plans shall not constitute,
and Landlord shall not be deemed to have made, any representation or warranty as
to the compliance of the Tenant Improvements with any laws or as to the
suitability of the Leased Premises or the Tenant Improvements for Tenant's
needs.
4. CONSTRUCTION.
(a) The Tenant Improvements in the Leased Premises shall be completed
substantially in accordance with Tenant's Plans by the Contractor in a good and
workmanlike manner. Tenant shall promptly pay when due the entire cost of all
of the Tenant Improvements (including the cost of all utilities, permits, fees,
taxes, and property and liability insurance in connection therewith) required by
Xxxxxx's Plans. Landlord shall have no liability to Tenant if the Leased
Premises is not suitable for Tenant's occupancy or if Tenant or Landlord has not
obtained all the necessary permits for Tenant to occupy the Leased Premises by
the Term Commencement Date; provided, however, that Base Rent shall xxxxx until
all permits necessary for Tenant's occupancy have been issued.
(b) Landlord, at its sole cost and expense, shall provide or
construct the following (collectively, the "Landlord Improvements") in the
Leased Premises:
(i) Floor Coverings: All existing floor coverings shall be
removed.
(ii) Elevator Lobby: The elevator lobbies on the floors of the
Leased Premises shall be restored.
(iii) Partitions: All existing partitions shall be demolished.
(iv) Sprinkler System: Landlord shall provide the tap into the
main sprinkler riser and install the main sprinkler loop around the core area of
the Leased Premises.
(v) Life Safety Systems: Landlord shall provide Class "E" fire
life safety floor subpanels with adequate connection points on the floors of the
Leased Premises for code-required speaker and strobe lights as well as flow and
tamper switches for the sprinkler systems, in accordance with existing code.
The panels are to be installed in proximity to the Leased Premises. The code-
2
required speakers, strobe lights, flow and tamper switches, and other
equipment for the sprinkler systems shall be part of the Tenant Improvements.
(vi) Bathrooms: All restrooms on the floors of the Leased
Premises shall be brought to meet all local codes, as well as ADA.
Cosmetically, Landlord shall refurbish the restrooms in a manner consistent with
a Class "A" San Francisco office tower. Landlord shall also correct all
existing code violations in the common areas, if any, on the floors of the
Leased Premises.
(vii) Electrical Load Requirements: Landlord shall provide an
average of 6.5 xxxxx per usable square foot of the Leased Premises (1.5 xxxxx of
the 6.5 xxxxx shall be for lighting), peak demand load, of electrical power per
floor stubbed to electrical closets on each floor of the Leased Premises each
located at either end of the core area of the Leased Premises.
(viii) Telephone Requirements: Landlord shall provide to Tenant
200 pairs of copper phone wire per floor stubbed to the telephone closet (with
capacity to add fiber optic cable) of each floor located at the core area of the
Leased Premises.
(ix) Condenser Water Loop: Landlord shall provide a condenser
water loop stubbed to each of the floors of the Leased Premises for access to
condensed water for air conditioning necessary for Tenant's air conditioning
needs (however, Tenant, at Tenant's cost but which may be paid from the
Landlord's Contribution, shall be responsible for the installation, operation
and maintenance of such air conditioning units).
5. LANDLORD'S AND TENANT'S CONTRIBUTIONS. As Xxxxxxxx's contribution for
the costs of Tenant Plans and reimbursable expenses by the Architect, Landlord
shall give Tenant an allowance in the maximum amount of $0.15 per square foot of
Rentable Area, which equals $7,624.95 based upon 50,833 rentable square feet
("Landlord's Plans Contribution"). As Xxxxxxxx's contribution for the costs of
Tenant Improvements, Landlord shall give Tenant an allowance in the maximum
amount of $29.85 per square foot of Rentable Area, which equals $1,517,365.05
based upon 50,833 rentable square feet ("Landlord's Tenant Improvements
Contribution"). Tenant shall have the right prior to Tenant's Physical
Possession Date to request in writing (along with third party bids or other
documentation showing the proposed expenditures) that Landlord provide to Tenant
an additional contribution for the construction of Tenant Improvements of up to
a maximum of $4.00 per square foot of Rentable Area, or $203,332.00 ("Landlord's
Additional Contribution," Landlord's Plans Contribution, Landlord's Tenant
Improvements Contribution, and Xxxxxxxx's Additional Contribution, if any, shall
be collectively referred to as "Landlord's Contribution"). Landlord's
Additional Contribution shall be added to Base Rent utilizing an interest rate
of eleven percent (11%) per annum and a ten (10) year amortization schedule
(i.e., for every one dollar ($1.00) per rentable square foot of Landlord's
Additional Contribution, $8,402.70 per annum, or $700.22 per month shall be
added to Base Rent). Landlord's Tenant Improvements Contribution and Landlord's
Additional Contribution, if any, may be used only for direct hard and soft
costs, including construction costs, architect fees, and consultant fees.
Notwithstanding the foregoing, Tenant may use a maximum of $2.00 per square foot
of Rentable Area (or $101,666.00) of Landlord's Contribution for communication
equipment and cabling. Any costs of preparing Tenant's Plans and constructing
the Tenant Improvements in excess of Landlord's Contribution shall be paid by
Xxxxxx. Landlord shall pay Landlord's Contribution directly to the Architects
and engineers and to the Contractor for the account of Tenant, in installments
as professional services for Tenant's Plans are rendered, and Tenant
Improvements are completed, upon Xxxxxxxx's receipt of a written request for
payment accompanied by written invoices and other written evidence reasonably
satisfactory to Landlord showing the costs incurred, until Xxxxxxxx's
Contribution is exhausted. Tenant shall indemnify and protect Landlord against
any liability for mechanics, materialmen's and other liens or claims with
respect to the Tenant Improvements and shall obtain releases to liens as
payments are made relating to such liens. Tenant shall also provide to Landlord
3
(at Tenant's expense or as a deduction from Landlord's Contribution), if
reasonably required by Landlord, lien insurance or a lien completion bond in the
amount provided for SECTION 5.07(c) of the Lease. Tenant shall pay to Landlord
(or Landlord may deduct from Landlord's Contribution) a construction management
fee equal to the lesser of (i) three and one-half percent (3.5%) of the total
costs of the Tenant Improvements, or (ii) $1.00 per square foot of Rentable
Area.
6. CHANGES. Except for minor non-structural changes, if Tenant requests
any change in Tenant's Plans, Tenant shall request such change in a written
notice to Landlord.
7. OTHER WORK BY TENANT. All work not within the scope of the normal
construction trades employed on the Building, such as the furnishing and
installing of furniture, telephone equipment, office equipment and wiring, shall
be furnished and installed by Tenant at Tenant's expense.
8. REQUIREMENTS FOR OTHER WORK PERFORMED BY TENANT. All other work
performed at the Building or in the Project by Tenant or Tenant's contractor or
subcontractors shall be subject to the following additional requirements:
a. Such work shall not proceed until Landlord has approved in
writing: (i) Tenant's contractor, (ii) the amount and coverage of public
liability and property damage insurance, with Landlord named as an additional
insured, carried by Xxxxxx's contractor, (iii) complete and detailed plans and
specifications for such work, and (iv) a schedule for the work.
b. All work shall be done in conformity with a valid permit when
required, a copy of which shall be furnished to Landlord before such work is
commenced. In any case, all such work shall be performed in accordance with all
applicable laws. Notwithstanding any failure by Landlord to object to any such
work, Landlord shall have no responsibility for Tenant's failure to comply with
applicable laws.
c. Tenant or Xxxxxx's contractor shall arrange for necessary
utility, hoisting and elevator service, on a nonexclusive basis, with Landlord.
Landlord shall have the right to require any necessary movement of materials by
the elevator to be done after regular working hours.
d. Tenant shall be responsible for cleaning the Leased Premises, the
Building and the Project and removing all debris in connection with the its
work. All completed work shall be subject to inspection and acceptance by
Landlord. Tenant shall reimburse Landlord for the cost all extra expense
incurred by Landlord by reason of faulty work done by Xxxxxx or Xxxxxx's
contractor or by reason of inadequate cleanup by Tenant or Xxxxxx's contractor.
Landlord will provide Tenant with copies of third party consultant invoices
within five (5) business days of Xxxxxx's request for such invoices.
9. TENANT DELAY. If the completion of the Tenant Improvements is delayed
(i) at the request of Tenant, (ii) by Tenant's failure to comply with the
foregoing provisions (including failure to pay any sums payable by Tenant within
the time periods specified herein), (iii) by changes in the Tenant's Plans
ordered by Tenant or by extra work ordered by Xxxxxx, (iv) because Tenant
chooses to have additional work performed by Landlord, or (v) because of any
other act or omission of Tenant (collectively, "Tenant Delay"), then Tenant
shall be responsible for all costs and any expenses occasioned by such Tenant
Delay including, without limitation, any costs and expenses attributable to
increases in labor or materials; and, if such delay actually delays the Term
Commencement Date, then Tenant shall pay Lessor the Base Rent for the entire
period of such delay.
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EXHIBIT C
CONFIRMATION OF TERM OF LEASE
This Confirmation of Term of Lease is made by and between ____________, a
______________, as Landlord, and ___________________________, a _____________,
as Tenant, who agree as follows:
1. Landlord and Tenant entered into a Lease dated ____________________,
19_____ (the "Lease"), in which Landlord leased to Tenant and Xxxxxx leased from
Landlord the Leased Premises described in the Basic Lease Information sheet of
the Lease (the "Leased Premises").
2. Pursuant to Section 3.01 of the Lease, Landlord and Tenant agree to
confirm the commencement date and expiration date of the Term of the Lease as
follows:
a. _________________________, 19_____, is the Term Commencement
Date;
b. _________________________, 19_____, is the Term Expiration Date;
c. _________________________, 19_____, is the commencement date of
Rent under the Lease.
3. Tenant hereby confirms that the Lease is in full force and effect and:
a. It has accepted possession of the Leased Premises as provided in
the Lease;
b. The improvements and space required to be furnished by Landlord
under the Lease have been furnished;
c. Landlord has fulfilled all its duties of an inducement nature;
d. The Lease has not been modified, altered or amended, except as
follows:
___________________________________________________________; and
e. There are no setoffs or credits against Rent and no security
deposit has been paid except as expressly provided by the Lease.
[REMAINDER OF XXXX INTENTIONALLY LEFT BLANK; SIGNATURE PAGE TO FOLLOW.]
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4. The provisions of this Confirmation of Term of Lease shall inure to
the benefit of, or bind, as the case may require, the parties and their
respective successors, subject to the restrictions on assignment and subleasing
contained in the Lease.
DATED: _________________________, 19_____
"LANDLORD": "TENANT":
CEP INVESTORS XII LLC, XXXXXXX.XXX INC,
a Delaware limited liability company a Washington corporation
By: EPI Investors XII LLC, By:_____________________
a California limited liability company Typed Name:_______________
Its Manager Title: ___________________
By: Xxxxx Xxxxxxxx, Inc.,
a California corporation,
Its Manager
By:____________________________
Typed Name:___________________
Title: ________________________
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EXHIBIT D
BUILDING RULES AND REGULATIONS
1. The sidewalks, doorways, halls, stairways, vestibules and other
similar areas shall not be obstructed by Tenant or used by it for any purpose
other than ingress to and egress from the Leased Premises, and for going from
one part of the Building to another part. Corridor doors, when not in use,
shall be kept closed. Before leaving the Building, Tenant shall ensure that all
doors to the Leased Premises are securely locked and all water faucets and
electricity are shut off.
2. Plumbing fixtures shall be used only for their designated purpose, and
no foreign substances of any kind shall be deposited therein. Damage to any
such fixtures resulting from misuse by Tenant or any employee or invitee of
Tenant shall be repaired at the expense of Tenant.
3. Nails, screws and other attachments to the Building require prior
written consent from Landlord, except for the routine hanging of pictures,
artwork, photographs, maps, diplomas, licenses, or certificates or similar
items. Tenant shall not mar or deface the Leased Premises in any way. Tenant
shall not place anything on or near the glass of any window, door or wall which
may appear unsightly from outside the Leased Premises.
4. All contractors and technicians rendering any installation service to
Tenant shall be subject to Landlord's approval and supervision prior to
performing services. This applies to all work performed in the Building,
including, but not limited to, installation of telephones, telegraph equipment,
wiring of any kind, and electrical devices, as well as all installations
affecting floors, walls, woodwork, windows, ceilings and any other physical
portion of the Building.
5. Movement in or out of the Building of furniture, office equipment,
safes or other bulky material which requires the use of elevators, stairways, or
the Building entrance and lobby shall be restricted to hours established by
Landlord. All such movement shall be under Xxxxxxxx's supervision, and the use
of an elevator for such movements shall be restricted to the Building's freight
elevator. Arrangements shall be made at least 24 hours in advance with Landlord
regarding the time, method, and routing of such movements. Tenant shall pay for
the services of the employees of the elevator service company employed when
safes and other heavy articles are moved into or from the Building, and Tenant
shall assume all risks of damage and pay the cost of repairing or providing
compensation for damage to the Building, to articles moved and injury to persons
or property resulting from such moves.
6. Landlord shall have the right to limit the weight and size of, and to
designate the location of, all safes and other heavy property brought into the
Building.
7. Tenant shall cooperate with Landlord in maintaining the Leased
Premises. Tenant shall not employ any person for the purpose of cleaning the
Leased Premises other than the Building's cleaning and maintenance personnel.
Window cleaning shall be done only by Xxxxxxxx's agents at such times and during
such hours as Landlord shall elect. Janitorial services will not be furnished
on nights when rooms are occupied after 7:00 p.m.
8. Deliveries of water, soft drinks, newspapers or other such items to
the Leased Premises shall be restricted to hours established by Landlord and
made by use of the freight elevator if Landlord so directs.
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9. Nothing shall be swept or thrown into the corridors, halls, elevator
shafts or stairways. No birds, fish or animals of any kind shall be brought
into or kept in, on or about the Leased Premises, with the exception of guide
dogs where necessary.
10. No cooking shall be done in the Leased Premises except in connection
with the Product Kitchen (as defined in EXHIBIT B) and a convenience lunch room
for the sole use of employees and guests (on a non-commercial basis) in a manner
which complies with all of the provisions of the Lease and which does not
produce fumes or odors.
11. Food, soft drink or other vending machines shall not be placed within
the Leased Premises without Landlord's prior written consent, which consent
shall not be unreasonably withheld, conditioned or delayed.
12. Tenant shall not install or operate on the Leased Premises any
electric heater, stove or similar equipment (but specifically excluding coffee
machines and microwave ovens) without Landlord's prior written consent, which
consent shall not be unreasonably withheld, conditioned or delayed. Tenant
shall not use or keep on the Leased Premises any kerosene, gasoline, or
inflammable or combustible fluid or material other than limited quantities
reasonably necessary for the operation and maintenance of office equipment
utilized at the Leased Premises. No explosives shall be brought onto the
Project at any time.
13. Tenant shall not waste electricity or water and agrees to cooperate
fully with Landlord to assure the most effective operation of the Building's
heating and to comply with any governmental energy-saving rules, laws or
regulations of which Tenant has actual notice.
14. [Intentionally deleted]
15. Tenant, its employees, agents and invitees shall each comply with
all requirements necessary for the security of the Leased Premises,
including, if implemented by Landlord, the use of service passes issued by
Landlord for after-hours movement of office equipment/packages, and the
signing of a security register in the Building lobby after hours. Landlord
reserves the right to refuse entry to the Building after normal business
hours to Tenant, its employees, agents or invitees, or any other person
without satisfactory identification showing his or her right of access to the
Building at such time. Landlord shall not be liable for any damages resulting
from any error in regard to any such identification or from such admission to
or exclusion from the Building. Landlord shall not be liable to Tenant for
losses due to theft or burglary, or for damage by unauthorized persons in, on
or about the Project, and Tenant assumes full responsibility for protecting
the Leased Premises from theft, robbery and pilferage, which includes keeping
doors locked and other means of entry closed.
16. Landlord will furnish Tenant with a reasonable number of initial keys
for entrance doors into the Leased Premises, and may charge Tenant for
additional keys thereafter. All such keys shall remain the property of
Landlord. No additional locks are allowed on any door of the Leased Premises
without Landlord's prior written consent and Tenant shall not make any duplicate
keys. Upon termination of this Lease, Xxxxxx shall surrender to Landlord all
keys to the Leased Premises, and give to Landlord the combination of all locks
for safes and vault doors, if any, in the Leased Premises.
17. Tenant shall not bring into (or permit to be brought into) the
Building any bicycle or other type of vehicle (but specifically excluding
strollers, carriages, wheelchairs, and similar devices).
18. Landlord retains the right at any time, without liability to Tenant,
to change the name and street address of the Building, except as otherwise
expressly provided in the Lease with respect to signage.
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19. Canvassing, peddling, soliciting, and distribution of handbills in or
at the Project are prohibited and Tenant will cooperate to prevent these
activities.
20. The Building hours of operation are 7:00 a.m. to 6:00 p.m., Monday
through Friday, excluding holidays. Landlord reserves the right to close and
keep locked all entrance and exit doors of the Building on Saturdays, Sundays
and legal holidays, and between the hours of 6:01 p.m. of any day and 6:59 a.m.
of the following day, and during such other hours as Landlord may deem advisable
for the protection of the Building and the tenants thereof; provided, however,
that Tenant and Tenant's employees, agents, contractors, invitees, and licensees
shall have access to the Leased Premises 24 hours per day, 7 days per week, 365
days per year.
21. The requirements of Tenant will be attended to only upon application
to the Project manager. Employees will not perform any work or do anything
outside of their regular duties unless under specific instruction from the
Project manager.
22. Tenant shall cooperate fully with the life safety program of the
Building as established and administered by Landlord. This shall include
participation by Tenant and its employees in exit drills, fire inspections, life
safety orientations and other programs relating to fire and life safety that may
be established by Landlord.
23. No smoking shall be permitted in the Building.
24. Landlord reserves the right to rescind any of these rules and
regulations and to make future rules and regulations required for the safety,
protection and maintenance of the Project, the operation and preservation of the
good order thereof, and the protection and comfort of the tenants and their
employees and visitors; provided that in all events Landlord shall only make and
enforce rules that are reasonable, do not materially restrict Tenant's use and
occupancy of the Leased Premises as contemplated in the Lease, and that are
nondiscriminatory in nature and enforcement. Such rules and regulations, when
made and written notice thereof given to Tenant, shall be binding as if
originally included herein. Landlord shall not be responsible to Tenant for the
non-observance or violation of these rules and regulations by any other tenant
of the Building. Landlord reserves the right to exclude or expel from the
Project any person who, in Landlord's judgment, is under the influence of liquor
or drugs, or who shall in any manner do any act in violation of any of these
rules and regulations, provided that Xxxxxx has been previously apprised of any
rule or regulation pursuant to which such person is excluded or expelled.
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