EXHIBIT 10.29
LEASE
THIS LEASE is made as of the 6nd day of July, 1998, by and between Xxxxxxx
Properties, L.P., a California limited partnership (hereinafter called
"Landlord"), and GeoCities, a California corporation (hereinafter called
"Tenant").
1. PREMISES
Landlord leases to Tenant and Tenant leases from Landlord, upon the terms and
conditions hereinafter set forth, those premises (the "Premises") outlined in
red on Exhibit B and described in the Basic Lease Information. The Premises
shall be all or part of a building (the "Building") and of a project (the
"Project"), which may consist of more than one building and additional
facilities, as described in the Basic Lease Information. The Building and
Project are outlined in blue and green respectively on Exhibit B. Landlord and
Tenant acknowledge that physical changes may occur from time to time in the
Premises, Building or Project, and that the number of buildings and additional
facilities which constitute the Project may change from time to time, which may
result in an adjustment in Tenant's Proportionate Share, as defined in the Basic
Lease Information, as provided in Paragraph 7.A.
2. POSSESSION AND LEASE COMMENCEMENT
A. Construction of Improvements. The term commencement date ("Term
Commencement Date") shall be the earlier of the date on which: (1) Tenant first
commences business operations from the Premises, or (2) the improvements to be
constructed or performed in the Premises by Landlord (if any) shall have been
substantially completed in accordance with the plans and specifications, if any,
described on Exhibit C . If for any reason Landlord cannot deliver possession
of the Premises to Tenant on the scheduled Term Commencement Date, Landlord
shall not be subject to any liability therefor, nor shall Landlord be in default
hereunder nor shall such failure affect the validity of this Lease, and Tenant
agrees to accept possession of the Premises at such time as such improvements
have been substantially completed, which date shall then be deemed the Term
Commencement Date. Tenant shall not be liable for any Rent for any period prior
to the Term Commencement Date (but without affecting any obligations of Tenant
under any improvement agreement appended to this Lease). Substantial
completion shall have occurred notwithstanding Tenant's submission of a
punchlist to Landlord, which Tenant shall submit, if at all, within ten (10)
business days after the Term Commencement Date or otherwise in accordance with
any improvement agreement appended to this Lease. Upon Landlord's request,
Tenant shall promptly execute and return to Landlord a "Start-Up Letter" in
which Tenant shall agree, among other things, to acceptance of the Premises and
to the determination of the Term Commencement Date, in accordance with the terms
of this Lease, but Tenant's failure or refusal to do so shall not negate
Tenant's acceptance of the Premises or affect determination of the Term
Commencement Date.
3. TERM
The term of this Lease (the "Term") shall commence on the Term Commencement
Date and continue in full force and effect for the number of months specified as
the Length of Term in the Basic Lease Information or until this Lease is
terminated as otherwise provided herein. If the Term Commencement Date is a
date other than the first day of the calendar month, the Term shall be the
number of months of the Length of Term in addition to the remainder of the
calendar month following the Term Commencement Date.
4. USE
A. General. Tenant shall use the Premises for the permitted use specified in
the Basic Lease Information ("Permitted Use") and for no other use or purpose
without the prior written consent of Landlord, which may be withheld in
Landlord's sole discretion. Tenant shall control Tenant's employees, agents,
customers, visitors, invitees, licensees, contractors, assignees and subtenants
(collectively, "Tenant's Parties") in such a manner that Tenant and Tenant's
Parties cumulatively do not exceed the occupant density (the "Occupancy
Density") or the parking density (the "Parking Density") specified in the Basic
Lease Information at any time. Tenant shall pay the Parking Charge specified in
the Basic Lease Information as Additional Rent (as hereinafter defined)
hereunder, as such Parking Charge may change from time to time. So long as
Tenant is occupying the Premises, Tenant and Tenant's Parties shall have the
nonexclusive right to use, in common with other parties occupying the Building
or Project, the parking areas, driveways and other common areas of the Building
and Project, subject to the terms of this Lease and such rules and regulations
as Landlord may from time to time prescribe. Landlord reserves the right,
without notice or liability to Tenant, and without the same constituting an
actual or constructive eviction, to alter or modify the common areas from time
to time, including the location and configuration thereof, and the amenities and
facilities which Landlord may determine to provide from time to time provided
Landlord agrees to use its commercially reasonable efforts to minimize any
interference to Tenant's business operations from the Premises as a result
thereof.
B. Limitations. Tenant shall not permit any unreasonable odors, smoke, dust,
gas, substances, noise or vibrations to emanate from the Premises or from any
portion of the common areas as a result of Tenant's or any Tenant's Party's use
thereof, nor take any action
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which would constitute a nuisance or would disturb, obstruct or endanger any
other tenants or occupants of the Building or Project or elsewhere, or
unreasonably interfere with their use of their respective premises or common
areas. Storage outside the Premises of materials, vehicles or any other items is
prohibited. Tenant shall not use or allow the Premises to be used for any
immoral or unlawful purpose, nor shall Tenant cause or maintain or permit any
nuisance in, on or about the Premises. Tenant shall not commit or suffer the
commission of any material waste in, on or about the Premises. Tenant shall not
allow any sale by auction upon the Premises, or place any loads upon the floors,
walls or ceilings which could endanger the structure, or place any harmful
substances in the drainage system of the Building or Project. No waste,
materials or refuse shall be dumped upon or permitted to remain outside the
Premises, except in designated refuse containers. Landlord shall not be
responsible to Tenant for the non-compliance by any other tenant or occupant of
the Building or Project with any of the above-referenced rules or any other
terms or provisions of such tenant's or occupant's lease or other contract.
C. Compliance with Regulations. By entering the Premises and except as
otherwise provided herein, Tenant accepts the Premises in the condition existing
as of the date of such entry. Tenant shall at its sole cost and expense
materially comply with all existing or future applicable municipal, state and
federal and other governmental statutes, rules, requirements, regulations, laws
and ordinances, including zoning ordinances and regulations, and covenants,
easements and restrictions of record governing and relating to the use,
occupancy or possession of the Premises, to Tenant's use of the common areas, or
to the use, storage, generation or disposal of Hazardous Materials (hereinafter
defined) (collectively "Regulations"). Except to the extent required by
Tenant's particular use of the Premises, or any alterations performed by or on
behalf of Tenant in the Premises, Tenant shall not be responsible for making
physical alterations to the Building required by Regulations enacted after the
date hereof. Tenant shall at its sole cost and expense obtain any and all
licenses or permits necessary for Tenant's Permitted Use of the Premises.
Tenant shall at its sole cost and expense promptly comply with the requirements
of any board of fire underwriters or other similar body now or hereafter
constituted. Tenant shall not do or permit anything to be done in, on, under or
about the Project or bring or keep anything which will in any way materially
increase the rate of any insurance upon the Premises, Building or Project or
upon any contents therein or cause a cancellation of said insurance or otherwise
affect said insurance in any material manner. Tenant shall indemnify, defend
(by counsel reasonably acceptable to Landlord), protect and hold Landlord
harmless from and against any loss, cost, expense, damage, reasonable attorneys'
fees or liability to the extent arising out of the failure of Tenant to comply
with any Regulation. Tenant's obligations pursuant to the foregoing indemnity
shall survive the expiration or earlier termination of this Lease.
D. Hazardous Materials. As used in this Lease, "Hazardous Materials" shall
include, but not be limited to, hazardous, toxic and radioactive materials and
those substances defined as "hazardous substances," "hazardous materials,"
"hazardous wastes," "toxic substances," or other similar designations in any
Regulation. Tenant shall not cause, or allow any of Tenant's Parties to cause,
any Hazardous Materials to be handled, used, generated, stored, released or
disposed of in, on, under or about the Premises, the Building or the Project or
surrounding land or environment in violation of any Regulations. Tenant must
obtain Landlord's written consent prior to the introduction of any Hazardous
Materials onto the Project. Notwithstanding the foregoing, Tenant may handle,
store, use and dispose of products containing small quantities of Hazardous
Materials for "general office purposes" (such as toner for copiers) to the
extent customary and necessary for the Permitted Use of the Premises; provided
that Tenant shall always handle, store, use, and dispose of any such Hazardous
Materials in a safe and lawful manner and never allow such Hazardous Materials
to contaminate the Premises, Building, or Project or surrounding land or
environment. Tenant shall immediately notify Landlord in writing of any
Hazardous Materials' contamination of any portion of the Project of which Tenant
becomes aware, whether or not caused by Tenant. Landlord shall have the right
at all reasonable times to inspect the Premises and to conduct such reasonable
tests and investigations to determine whether Tenant is in compliance with the
foregoing provisions, the costs of all such inspections, tests and
investigations to be borne by Tenant. Tenant shall indemnify, defend (by
counsel reasonably acceptable to Landlord), protect and hold Landlord harmless
from and against any and all claims, liabilities, losses, costs, loss of rents,
liens, damages, injuries or expenses (including reasonable attorneys' and
consultants' fees and court costs), demands, causes of action, or judgments
directly or indirectly arising out of or related to the use, generation,
storage, release, or disposal of Hazardous Materials by Tenant or any of
Tenant's Parties in, on, under or about the Premises, the Building or the
Project or surrounding land or environment, which indemnity shall include,
without limitation, damages for personal or bodily injury, property damage,
damage to the environment or natural resources occurring on or off the Premises,
losses attributable to diminution in value or adverse effects on marketability,
the cost of any investigation, monitoring, government oversight, repair,
removal, remediation, restoration, abatement, and disposal, and the preparation
of any closure or other required plans, whether such action is required or
necessary prior to or following the expiration or earlier termination of this
Lease. Neither the consent by Landlord to the use, generation, storage, release
or disposal of Hazardous Materials nor the strict compliance by Tenant with all
laws pertaining to Hazardous Materials shall excuse Tenant from Tenant's
obligation of indemnification pursuant to this Paragraph 4.D. Tenant's
obligations pursuant to the foregoing indemnity shall survive the expiration or
earlier termination of this Lease.
E. Landlord shall indemnify, defend and hold Tenant , its affiliates, their
respective directors, officers, employees and agents harmless from and against
any and all claims, judgments, damages, penalties, fines, costs, liabilities,
losses, injuries or expenses and attorneys' fees arising out of any Hazardous
Material in, on or about the Project or the Premises which was generated,
handled, placed, stored, used, transported or disposed of by Landlord, or any of
Landlord's employees, agents, licensees or contractors excluding however, any
Hazardous Material whose presence was caused by Tenant or its affiliates or
their respective agents.
5. RULES AND REGULATIONS
Tenant shall faithfully observe and comply with the building rules and
regulations attached hereto as Exhibit A and any other rules and regulations and
any modifications or additions thereto which Landlord may from time to time
prescribe in writing for the purpose of maintaining the proper care,
cleanliness, safety, traffic flow and general order of the Premises or the
Building or Project; provided such rules and regulations are generally
applicable to all tenants in the Project. Tenant shall cause Tenant's Parties
to comply with such rules and regulations. Landlord shall not be responsible to
Tenant for the non-compliance by any other tenant or occupant of the Building or
Project with any of such rules and regulations, any other tenant's or occupant's
lease or any Regulations, provided that Landlord shall use its commercially
reasonable efforts to enforce said Regulations against all Tenants.
6. RENT
A. Base Rent. Tenant shall pay to Landlord and Landlord shall receive, without
notice or demand throughout the Term, Base Rent as specified in the Basic Lease
Information, payable in monthly installments in advance on or before the first
day of each calendar month, in lawful money of the United States, without
deduction or offset whatsoever (except as otherwise provided herein), at the
Remittance Address specified in the Basic Lease Information or to such other
place as Landlord may from time to time designate in writing. Base Rent for the
first full month of the Term shall be paid by Tenant upon Tenant's execution of
this Lease. If the obligation for payment of Base Rent commences on a day other
than the first day of a month, then Base Rent shall be prorated and the prorated
installment shall be paid on the first day of the calendar month next succeeding
the Term Commencement Date. The Base Rent payable by Tenant hereunder is
subject to adjustment as provided elsewhere in this Lease, as applicable. As
used herein, the term "Base Rent" shall mean the Base Rent specified in the
Basic Lease Information as it may be so adjusted from time to time.
B. Additional Rent. All monies other than Base Rent required to be paid by
Tenant hereunder, including, but not limited to, Tenant's Proportionate Share of
Operating Expenses, as specified in Paragraph 7 of this Lease, charges to be
paid by Tenant under
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Paragraph 15, the interest and late charge described in Paragraphs 26.C. and D.,
and any monies spent by Landlord pursuant to Paragraph 30, shall be considered
additional rent ("Additional Rent"). "Rent" shall mean Base Rent and Additional
Rent.
7. OPERATING EXPENSES
A. Operating Expenses. In addition to the Base Rent required to be paid
hereunder, Tenant shall pay as Additional Rent, Tenant's Proportionate Share of
the Building , as defined in the Basic Lease Information, of Operating Expenses
(defined below) in the manner set forth below. Tenant shall pay the applicable
Tenant's Proportionate Share of each such Operating Expenses. Landlord and
Tenant acknowledge that if physical changes are made to the Premises or Building
or the configuration of any thereof, Landlord will adjust Tenant's Proportionate
Share of the Building to reflect the change. "Operating Expenses" shall mean all
expenses and costs of every kind and nature which Landlord shall pay or become
obligated to pay, because of or in connection with the ownership, management,
maintenance, repair, preservation, replacement and operation of the Building and
its supporting facilities and such additional facilities now and in subsequent
years as may be determined by Landlord to be necessary or desirable to the
Building (as determined in a reasonable manner) other than those expenses and
costs which are specifically attributable to Tenant or which are expressly made
the financial responsibility of Landlord or specific tenants of the Building or
Project pursuant to this Lease. Operating Expenses shall include, but are not
limited to, the following:
1) Taxes. All real property taxes and assessments, possessory interest
taxes, sales taxes, personal property taxes, business or license taxes or
fees, gross receipts taxes, service payments in lieu of such taxes or fees,
annual or periodic license or use fees, excises, transit charges, and other
impositions, general and special, ordinary and extraordinary, unforeseen as
well as foreseen, of any kind (including fees "in-lieu" of any such tax or
assessment) which are now or hereafter assessed, levied, charged,
confirmed, or imposed by any public authority upon the Building or Project,
its operations or the Rent (or any portion or component thereof), or any
tax, assessment or fee imposed in substitution, partially or totally, of
any of the above. Operating Expenses shall also include any taxes,
assessments, reassessments, or other fees or impositions with respect to
the management, maintenance, alteration, repair, use or occupancy of the
Premises, Building or Project or any portion thereof, including, without
limitation, by or for Tenant, and all increases therein which are generally
assessed over time or reassessments thereof whether the increases or
reassessments result from increased rate and/or valuation (whether upon a
transfer of the Building or Project or any portion thereof or any interest
therein or for any other reason). Operating Expenses shall not include
inheritance or estate taxes imposed upon or assessed against the interest
of any person in the Project, taxes computed upon the basis of the net
income of the Building or the Project or any owners of any interest in the
Project. In addition to the foregoing exclusions, Taxes shall not include
(i) any environmental assessments, charges or liens arising in connection
with the remediation of Hazardous Materials from the Building pursuant to
applicable laws in effect on or before Tenant's initial occupancy of the
Premises; (ii) costs or fees payable to public authorities in connection
with any future construction, renovation and/or improvements to the
Building other than (A) to the extent such construction, renovation and/or
improvements are required by any applicable laws not in effect as of this
Lease, and (B) any alterations or improvements to the Premises made by or
for Tenant, including fees for transit, housing, schools, measures,
environmental impact reports, traffic studies, and transportation system
management plans; (iii) reserves for future Taxes; or (iv) any personal
property taxes attributable to sculptures, paintings or other objects of
art (except for objects of art installed in the Common Areas pursuant to
requirements of public authority). If, by applicable law, any taxes or
assessments may be paid in installments at the option of the taxpayer, then
whether or not Landlord elects to pay taxes and assessments in such
installments, Tenant's liability for such taxes and assessments shall be
computed as if such election had been made, and only the installments
thereof which would have become due during the Term shall be included in
Tenant's tax obligations. If it shall not be lawful for Tenant to reimburse
Landlord for all or any part of such taxes, the monthly rental payable to
Landlord under this Lease shall be revised to net Landlord the same net
rental after imposition of any such taxes by Landlord as would have been
payable to Landlord prior to the payment of any such taxes.
Proposition 13 Protection. Despite any other provision of this Lease,
if during the first three (3) years of the Term, any sale, refinancing, or
change in ownership of the Building is consummated and, as a result, all or
part of the Building is reassessed (Reassessment) for real estate tax
purposes by the appropriate government authority under the terms of
Proposition 13 (as adopted by the voters of the State of California in the
June 1978 election), the terms of this Paragraph 7(A)(1) shall apply.
(a) For purposes of Paragraph 7(A)(1), the term "Tax Increase"
shall mean that portion of the Tax Expenses, as calculated immediately
following the Reassessment, that is attributable solely to the
Reassessment. Accordingly, a Tax Increase shall not include any portion of
the Tax Expenses, as calculated immediately following the Reassessment,
that is:
(1) Attributable to the initial assessment of the value of
the Building, the Base Building, or the tenant
improvements located in the Building;
(2) Attributable to assessments pending immediately before
the Reassessment that were conducted during, and
included in, that Reassessment or that were otherwise
rendered unnecessary following the Reassessment;
(3) Attributable to the annual inflationary increase in
real estate taxes; or
(4) Part of Tax Expenses incurred or considered to be
incurred during the Base Year as determined under this
Lease.
(b) During the first three (3) years of the Term, Tenant shall
not be obligated to pay any portion of the Tax Increase relating to a
Reassessment occurring during the first three (3) years of the Term.
(c) The amount of Tax Expenses that Tenant is not obligated to
pay or shall not be obligated to pay during the Lease Term in connection
with a particular Reassessment under the terms of this Paragraph 7(A)(1)
shall be referred to as the Proposition 13 Protection Amount. If a
Reassessment is reasonably foreseeable by Landlord and the Proposition 13
Protection Amount attributable to that Reassessment may be reasonably
quantified or estimated for each Lease Year beginning with the Lease Year
in which the Reassessment will occur, the terms of this Paragraph 7(A)(1)
shall apply to each such Reassessment. On notice to Tenant, Landlord shall
have the right to purchase the Proposition 13 Protection Amount relating to
the applicable Reassessment (Applicable Reassessment), at any time during
the Lease Term, by paying to Tenant an amount equal to the Proposition 13
Purchase Price, as defined below, as long as the right of any successor of
Landlord to exercise its right of repurchase under this Lease shall not
apply to any Reassessment that results from the event under which that
successor became Landlord under this Lease. As used in this Lease, the term
"Proposition 13 Purchase Price" shall mean the present value of the
Proposition 13 Protection Amount remaining during the Lease Term, as of the
date of payment of the Proposition 13 Purchase Price by Landlord. The
present value shall be calculated by:
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(1) Using the portion of the Proposition 13 Protection
Amount attributable to each remaining Lease Year (as
though the portion of that Proposition 13 Protection
Amount benefited Tenant at the end of each Lease Year)
as the amounts to be discounted; and
(2) Using discount rates for each amount to be discounted
equal to:
(A) The average rates of yield for United States
Treasury Obligations with maturity dates as close as reasonably possible to the
end of each Lease Year during which the portions of the Proposition 13
Protection Amount would have benefited Tenant, using the rates in effect as of
Landlord's exercise of its right to purchase, as set forth in this Paragraph
7(A)(1); plus
(B) Two percent (2%) per annum.
(d) On payment of the Proposition 13 Purchase Price, subparagraph, graph
(b) of this Paragraph 7(A)(1) shall not apply to any Tax Expenses attributable
to the Applicable Reassessment. Because Landlord is estimating the Proposition
13 Purchase Price because a Reassessment has not yet occurred, an adjustment
shall be made when a Reassessment occurs. If Landlord has underestimated the
Proposition 13 Purchase Price, Landlord shall, on notice to Tenant, credit
Tenant's Rent next due with the amount of that underestimation. If Landlord has
overestimated the Proposition 13 Purchase Price, Landlord shall, on notice to
Tenant, increase Tenant's Rent next due by the amount of the overestimation.
2. Insurance. All reasonable insurance premiums and costs, including, but not
limited to, any deductible amounts, premiums and other costs of insurance
incurred by Landlord, including for the insurance coverage set forth in
Paragraph 8.A. herein.
3. Common Area Maintenance.
a) Repairs, replacements, and general maintenance of and for the Building
and public and common areas and facilities of and comprising the Building ,
including, but not limited to, the roof and roof membrane, windows,
elevators, restrooms, conference rooms, health club facilities, lobbies,
mezzanines, balconies, mechanical rooms, building exteriors, alarm systems,
pest extermination, landscaped areas, parking and service areas, driveways,
sidewalks, loading areas, fire sprinkler systems, sanitary and storm sewer
lines, utility services, heating/ventilation/air conditioning systems,
electrical, mechanical or other systems, telephone equipment and wiring
servicing, plumbing, lighting, and any other items or areas which affect
the operation or appearance of the Building or Project, which determination
shall be at Landlord's discretion, except for: those items expressly made
the financial responsibility of Landlord pursuant to Paragraph 10 hereof;
those items to the extent paid for by the proceeds of insurance; and those
items attributable solely or jointly to specific tenants of the Building or
Project.
b) Repairs, replacements, and general maintenance shall include the cost
of any capital improvements made to or capital assets acquired for the
Project or Building that Landlord reasonably anticipates may reduce any
other Operating Expenses, including present or future repair work, are
reasonably necessary for the health and safety of the occupants of the
Building or Project, or are required to comply with any Regulation, such
costs or allocable portions thereof to be amortized over the useful life of
the capital item, as determined in accordance with GAAP (with interest on
any unamortized portion thereof at twelve percent 12% per annum).
c) Payment under or for any easement, license, permit, operating
agreement, declaration, restrictive covenant or instrument relating to the
Building or Project.
d) All expenses and rental related to services and costs of supplies,
materials and equipment to the extent used in operating, managing and
maintaining the Premises, Building and Project, the equipment therein and
the adjacent sidewalks, driveways, parking and service areas, including,
without limitation, expenses related to service agreements regarding
security, fire and other alarm systems, janitorial services, window
cleaning, elevator maintenance, Building exterior maintenance, landscaping
and expenses related to the administration, management and operation of the
Project, including without limitation salaries, wages and benefits of
individuals to the extent of the percentage of said individuals duties
which relate to the operations and management of the Building or Project
and management office rent.
e) The cost of supplying any services and utilities which benefit all or
a portion of the Premises or Building , including without limitation
services and utilities provided pursuant to Paragraph 15 hereof.
f) Legal expenses and the cost of audits by certified public accountants;
provided, however, that legal expenses chargeable as Operating Expenses
shall not include the cost of negotiating leases, collecting rents,
evicting tenants nor shall it include costs incurred in legal proceedings
with or against any tenant or to enforce the provisions of any lease, or
any legal expenses associated with Landlord's gross negligence, willful
misconduct or breach of this Lease or any other lease of the Project.
g) A management and accounting cost recovery fee equal to five percent
(5%) of the sum of the Project's base rents and Operating Expenses (other
than such management and accounting fee).
h) The deductible portion of any repair costs covered by earthquake
insurance, provided that said deductible portion shall be amortized over a
ten (10) period.
If the rentable area of the Building and/or Project is not at least ninety five
percent (95%) occupied during all or a significant portion of any fiscal year of
the Term as determined by Landlord, an appropriate adjustment shall be made by
Landlord in computing the Operating Expenses for such fiscal year to determine
what the Operating Expenses would have been for such year as if the Project had
been 95% occupied, and the amount so
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determined shall be deemed to be the amount of the Operating Expenses for such
year. Such adjustment shall be made by Landlord by increasing those variable
components of those variable costs included in the Operating Expenses which vary
based upon the level of occupancy of the Project (e.g., janitorial, electricity
and management fees).
Operating Expenses shall also include the Building Proportionate Share of the
Project Operating Expenses (defined below). The term "Project Operating
Expenses" shall mean all costs and expenses incurred in connection with the
maintenance, operations, replacement, ownership and repair of the Project which
are not included as either an Operating Expense of the Building or an Operating
Expense which is directly and separately identifiable with any other building in
the Project. The term "Building Proportionate Share" shall mean a fraction, the
numerator of which is the total square footage of the Building and the
denominator of which is the rentable square footage of the Project.
Operating Expenses shall not include the cost of providing tenant
improvements or other specific costs incurred for the account of, separately
billed to and paid by specific tenants of the Building or Project, the initial
construction cost of the Building, or debt service on any mortgage or deed of
trust recorded with respect to the Project other than pursuant to Paragraph
7.A.(3)(b) above. Notwithstanding anything herein to the contrary, in any
instance wherein Tenant uses excessive services of the Project or otherwise
creates a greater burden on the operations of the Project than other tenants
(such determination to be adjusted based on relative square footage of the space
leased by Tenant and other tenants) Landlord shall have the right to allocate
any such additional cost in any manner Landlord deems reasonably appropriate. If
any other tenant of the Building uses excessive services or otherwise creates a
greater burden on the operations of the Building, Landlord shall allocate any
such additional cost to such tenant as reasonably determined by Landlord.
Notwithstanding anything in the definition of Operating Expenses in this
Lease to the contrary, Operating Expenses shall not include the following,
except to the extent specifically permitted by a specific exception to the
following:
(i) Any ground lease rental;
(ii) Costs of capital improvements, replacements or equipment
except as specifically set forth above;
(iii) Rentals for items (except when needed in connection with
normal repairs and maintenance of permanent systems) which if
purchased, rather than rented, would constitute a capital improvement
which is specifically excluded in Subsection (ii) above (excluding,
however, equipment not affixed to the Building or Project which is
used in providing janitorial or similar services);
(iv) Costs incurred by Landlord for the repair of damage to the
Building or Project, to the extent that Landlord is reimbursed by
insurance proceeds;
(v) Costs, including permit, license and inspection costs,
incurred with respect to the installation of tenant or other occupant
improvements made for tenants or other occupants in the Building or
incurred in renovating or otherwise improving, decorating, painting or
redecorating vacant space for or the premises of other tenants or
other occupants of the Building;
(vi) Marketing costs, including leasing commissions, attorneys'
fees in connection with the negotiation and preparation of letters,
deal memos, letters of intent, leases, subleases and/or assignments,
space planning costs, and other costs and expenses incurred in
connection with lease, sublease and/or assignment negotiations and
transactions with present or prospective tenants or other occupants of
the Building;
(vii) Costs incurred by Landlord due to the violation by Landlord of
the terms and conditions of any lease of space in the Building;
(viii) Interest, principal, points and fees on debt or amortization
payments on any mortgage or deed of trust or any other debt instrument
encumbering the Building or Project or the land on which the Building
or Project is situated; (ix) Except for making repairs or keeping
permanent systems in operation while repairs are being made, rentals
and other related expenses incurred in leasing air conditioning
systems, elevators or other equipment ordinarily considered to be of a
capital nature, except to the extent (A) any such capital expenditure
is specifically included above, and (B) of equipment not affixed to
the Building which is used in providing janitorial or similar
services;
(x) Advertising and promotional expenditures;
(xi) Costs incurred in connection with upgrading the Building or
Project to comply with disability, life, fire and safety codes in
effect prior to the issuance of the temporary certificate of occupancy
for the Building;
(xii) Interest, fines or penalties incurred as a result of
Landlord's failure to make payments when due unless such failure is
commercially reasonable under the circumstances;
(xiii) Costs arising from Landlord's charitable or political
contributions;
(xiv) Costs for acquisition of sculpture, paintings or other objects
of art;
(xv) The depreciation of the Building and other real property
structures in the Project;
(xvi) Landlord's general corporate overhead and general
administrative expenses not related to the operation of the Project,
except as specifically set forth above;
(xvii) Any bad debt loss, rent loss or reserves for bad debts or rent
loss, or reserves for equipment or capital replacement.
(xviii) Expenses in connection with services or other benefits (e.g.,
tenant improvements) provided to another tenant or occupant which are
not provided or offered to Tenant;
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(xix) Any cost or expense related to the removal, cleaning,
abatement or remediation of Hazardous Materials in the Building
and/or about the Project including, without limitation, Hazardous
Materials in the soil or ground water;
(xx) Any costs, fines, penalties or interest resulting from
the negligence or willful misconduct of the Landlord, its agents,
employees or contractors
The above enumeration of services and facilities shall not be deemed
to impose an obligation on Landlord to make available or provide such services
or facilities except to the extent if any that Landlord has specifically agreed
elsewhere in this Lease to make the same available or provide the same. Without
limiting the generality of the foregoing, Tenant acknowledges and agrees that it
shall be responsible for providing adequate security for its use of the
Premises, the Building and the Project and that Landlord shall have no
obligation or liability with respect thereto, except to the extent if any that
Landlord has specifically agreed elsewhere in this Lease to provide the same.
B. Payment of Estimated Operating Expenses. "Estimated Operating Expenses" for
any particular year shall mean Landlord's estimate of the Operating Expenses for
such fiscal year made with respect to such fiscal year as hereinafter provided.
Landlord shall have the right from time to time to revise its fiscal year and
interim accounting periods so long as the periods as so revised are reconciled
with prior periods in a reasonable manner. During the last month of each fiscal
year during the Term, or as soon thereafter as practicable, Landlord shall give
Tenant written notice of the Estimated Operating Expenses for the ensuing fiscal
year. Tenant shall pay Tenant's Proportionate Share of the Estimated Operating
Expenses with installments of Base Rent for the fiscal year to which the
Estimated Operating Expenses applies in monthly installments on the first day of
each calendar month during such year, in advance. Such payment shall be
construed to be Additional Rent for all purposes hereunder. If at any time
during the course of the fiscal year, Landlord determines that Operating
Expenses are projected to vary from the then Estimated Operating Expenses by
more than five percent (5%), Landlord may, by written notice to Tenant, revise
the Estimated Operating Expenses for the balance of such fiscal year, and
Tenant's monthly installments for the remainder of such year shall be adjusted
so that by the end of such fiscal year Tenant has paid to Landlord Tenant's
Proportionate Share of the revised Estimated Operating Expenses for such year,
such revised installment amounts to be Additional Rent for all purposes
hereunder.
C. Computation of Operating Expense Adjustment. "Operating Expense Adjustment"
shall mean the difference between Estimated Operating Expenses and actual
Operating Expenses for any fiscal year determined as hereinafter provided.
Within one hundred twenty (120) days after the end of each fiscal year, or as
soon thereafter as practicable, Landlord shall deliver to Tenant a statement of
actual Operating Expenses for the fiscal year just ended, accompanied by a
computation of Operating Expense Adjustment. If such statement shows that
Tenant's payment based upon Estimated Operating Expenses is less than Tenant's
Proportionate Share of Operating Expenses, then Tenant shall pay to Landlord the
difference within twenty (20) days after receipt of such statement, such payment
to constitute Additional Rent for all purposes hereunder. If such statement
shows that Tenant's payments of Estimated Operating Expenses exceed Tenant's
Proportionate Share of Operating Expenses, then (provided that Tenant is not in
default under this Lease) Landlord shall pay to Tenant the difference within
twenty (20) days after delivery of such statement to Tenant. If this Lease has
been terminated or the Term hereof has expired prior to the date of such
statement, then the Operating Expense Adjustment shall be paid by the
appropriate party within twenty (20) days after the date of delivery of the
statement. Should this Lease commence or terminate at any time other than the
first day of the fiscal year, Tenant's Proportionate Share of the Operating
Expense Adjustment shall be prorated based on a month of 30 days and the number
of calendar months during such fiscal year that this Lease is in effect.
Notwithstanding anything to the contrary contained in Paragraph 7.A or 7.B,
Landlord's failure to provide any notices or statements within the time periods
specified in those paragraphs shall in no way excuse Tenant from its obligation
to pay Tenant's Proportionate Share of Operating Expenses.
D. Net Lease. This shall be a triple net Lease and Base Rent shall be paid to
Landlord absolutely net of all costs and expenses, except as specifically
provided to the contrary in this Lease. The provisions for payment of Operating
Expenses and the Operating Expense Adjustment are intended to pass on to Tenant
and reimburse Landlord for all costs and expenses of the nature described in
Paragraph 7.A. incurred in connection with the ownership, management,
maintenance, repair, preservation, replacement and operation of the Building
and/or Project and its supporting facilities and such additional facilities now
and in subsequent years as may be determined by Landlord to be necessary or
desirable to the Building and/or Project.
E. Tenant Audit. If Tenant shall dispute the amount set forth in any statement
provided by Landlord under Paragraph 7.B. or 7.C. above, Tenant shall have the
right, not later than sixty (60) days following receipt of such statement and
upon the condition that Tenant shall first deposit with Landlord the full amount
in dispute, to cause Landlord's books and records with respect to Operating
Expenses for such fiscal year to be audited by certified public accountants
selected by Tenant who are not paid on a contingency basis . The Operating
Expense Adjustment shall be appropriately adjusted on the basis of such audit.
If such audit discloses a liability for a refund in excess of ten percent (10%)
of Tenant's Proportionate Share of the Operating Expenses previously reported,
the cost of such audit shall be borne by Landlord; otherwise the cost of such
audit shall be paid by Tenant. If Tenant shall not request an audit in
accordance with the provisions of this Paragraph 7.E. within sixty (60) days
after receipt of Landlord's statement provided pursuant to Paragraph 7.B. or
7.C., such statement shall be final and binding for all purposes hereof.
8. INSURANCE AND INDEMNIFICATION
A. Landlord's Insurance. All insurance maintained by Landlord shall be
for the sole benefit of Landlord and under Landlord's sole control.
1. Property Insurance. Landlord agrees to maintain property
insurance insuring the Building against damage or destruction due to
risk including fire, vandalism, and malicious mischief in an amount
not less than the full replacement value thereof, in the form and with
deductibles and endorsements as selected by Landlord. At its election,
Landlord may instead (but shall have no obligation to) obtain "All
Risk" coverage, and may also obtain earthquake, pollution, and/or
flood insurance in amounts selected by Landlord.
2. Optional Insurance. Landlord, at Landlord's option, may also (but
shall have no obligation to) carry insurance against loss of rent, in
an amount equal to the amount of Base Rent and Additional Rent that
Landlord could be required to xxxxx to all Building tenants in the
event of condemnation or casualty damage for a period of twelve (12)
months. Landlord may also (but shall have no obligation to) carry such
other insurance as Landlord may deem prudent or advisable, including,
without limitation, liability insurance in such amounts and on such
terms as Landlord shall determine. Landlord shall not be obligated to
insure, and shall have no responsibility whatsoever for any damage to,
any furniture, machinery, goods, inventory or supplies, or other
personal property or fixtures which Tenant may keep or maintain in the
Premises, or any leasehold improvements, additions or alterations
within the Premises.
B. Tenant's Insurance.
1. Property Insurance. Tenant shall procure at Tenant's sole cost
and expense and keep in effect from the date of this Lease and at all
times until the end of the Term, insurance on all personal property
and fixtures of Tenant and all improvements,
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additions or alterations made by or for Tenant to the Premises on an "All Risk"
basis (excluding earthquake), insuring such property for the full replacement
value of such property.
2. Liability Insurance. Tenant shall procure at Tenant's sole cost
and expense and keep in effect from the date of this Lease and at all
times until the end of the Term Commercial General Liability insurance
covering bodily injury and property damage liability occurring in or
about the Premises or arising out of the use and occupancy of the
Premises and the Project, and any part of either, and any areas
adjacent thereto, and the business operated by Tenant or by any other
occupant of the Premises. Such insurance shall include contractual
liability insurance coverage insuring all of Tenant's indemnity
obligations under this Lease. Such coverage shall have a minimum
combined single limit of liability of at least One Million Dollars
($1,000,000.00 ), and a minimum general aggregate limit of Two Million
Dollars ($2,000,000.00 ), with an "Additional Insured Managers or
Lessors of Premises Endorsement." All such policies shall be written
to apply to all bodily injury (including death), property damage or
loss, personal and advertising injury and other covered loss, however
occasioned, occurring during the policy term, shall be endorsed to add
Landlord and any party holding an interest to which this Lease may be
subordinated as an additional insured, and shall provide that such
coverage shall be "primary" and non-contributing with any insurance
maintained by Landlord, which shall be excess insurance only. Such
coverage shall also contain endorsements including employees as
additional insureds if not covered by Tenant's Commercial General
Liability Insurance. All such insurance shall provide for the
severability of interests of insureds; and shall be written on an
"occurrence" basis, which shall afford coverage for all claims based
on acts, omissions, injury and damage, which occurred or arose (or the
onset of which occurred or arose) in whole or in part during the
policy period.
3. Workers' Compensation and Employers' Liability Insurance. Tenant
shall carry Workers' Compensation Insurance as required by any
Regulation, throughout the Term at Tenant's sole cost and expense.
Tenant shall also carry Employers' Liability Insurance in amounts not
less than One Million Dollars ($1,000,000) each accident for bodily
injury by accident; One Million Dollars ($1,000,000) policy limit for
bodily injury by disease; and One Million Dollars ($1,000,000) each
employee for bodily injury by disease, throughout the Term at Tenant's
sole cost and expense.
4. General Insurance Requirements. All coverages described in this
Paragraph 8.B. shall be endorsed to (i) provide Landlord with thirty
(30) days' notice of cancellation or change in terms; and (ii) waive
all rights of subrogation by the insurance carrier against Landlord.
If at any time during the Term the amount or coverage of insurance
which Tenant is required to carry under this Paragraph 8.B. is, in
Landlord's reasonable judgment, materially less than the amount or
type of insurance coverage typically carried by owners or tenants of
properties located in the general area in which the Premises are
located which are similar to and operated for similar purposes as the
Premises or if Tenant's use of the Premises should change with or
without Landlord's consent, Landlord shall have the right to require
Tenant to increase the amount or change the types of insurance
coverage required under this Paragraph 8.B. All insurance policies
required to be carried by Tenant under this Lease shall be written by
companies rated A X or better in "Best's Insurance Guide" and
authorized to do business in the State of California. In any event
deductible amounts under all insurance policies required to be carried
by Tenant under this Lease shall not exceed Five Thousand Dollars
($5,000.00) per occurrence. Tenant shall deliver to Landlord on or
before the Term Commencement Date, and thereafter at least thirty (30)
days before the expiration dates of the expired policies, certified
copies of Tenant's insurance policies, or a certificate evidencing the
same issued by the insurer thereunder; and, if Tenant shall fail to
procure such insurance, or to deliver such policies or certificates,
Landlord may, at Landlord's option after providing Tenant five (5)
days prior written notice and in addition to Landlord's other remedies
in the event of a default by Tenant hereunder, procure the same for
the account of Tenant, and the cost thereof shall be paid to Landlord
as Additional Rent.
C. Indemnification. Tenant shall indemnify, defend by counsel reasonably
acceptable to Landlord, protect and hold Landlord harmless from and against any
and all claims, liabilities, losses, costs, loss of rents, liens, damages,
injuries or expenses, including reasonable attorneys' and consultants' fees and
court costs, demands, causes of action, or judgments, directly or indirectly
arising out of or related to: (1) claims of injury to or death of persons or
damage to property occurring or resulting directly or indirectly from the use or
occupancy of the Premises, Building or Project by Tenant or Tenant's Parties, or
from activities or failures to act of Tenant or Tenant's Parties; (2) claims
arising from work or labor performed, or for materials or supplies furnished to
or at the request or for the account of Tenant in connection with performance of
any work done for the account of Tenant within the Premises or Project; (3)
claims arising from any breach or default on the part of Tenant in the
performance of any covenant contained in this Lease (which breach or default is
not timely cured as provided hereunder); and (4) claims arising from the
negligence or intentional acts or omissions of Tenant or Tenant's Parties. The
foregoing indemnity by Tenant shall not be applicable to claims to the extent
arising from the negligence, gross negligence or willful misconduct of Landlord.
Landlord shall not be liable to Tenant and Tenant hereby waives all claims
against Landlord for any injury or damage to any person or property in or about
the Premises, Building or Project by or from any cause whatsoever (other than
Landlord's negligence, gross negligence or willful misconduct) and, without
limiting the generality of the foregoing, whether caused by water leakage of any
character from the roof, walls, basement or other portion of the Premises,
Building or Project, or caused by gas, fire, oil or electricity in, on or about
the Premises, Building or Project. The provisions of this Paragraph shall
survive the expiration or earlier termination of this Lease. Landlord shall
indemnify, defend by counsel acceptable by Tenant, protect and hold Tenant
harmless from and against any and all liabilities, losses, costs, damages,
injuries or expenses, including reasonable attorneys' fees and court costs,
arising out of or related to the gross negligence or willful misconduct of
Landlord.
9. WAIVER OF SUBROGATION
To the extent permitted by law and without affecting the coverage
provided by insurance to be maintained hereunder or any other rights or
remedies, Landlord and Tenant each waive for themselves and on behalf of their
officers, partners, agents and employees any right to recover against the other
for: (a) damages for injury to or death of persons; (b) damages to property,
including personal property; (c) damages to the Premises or any part thereof;
and (d) claims arising by reason of the foregoing due to hazards covered by
insurance maintained or required to be maintained pursuant to this Lease to the
extent of proceeds recovered therefrom, or proceeds which would have been
recoverable therefrom in the case of the failure of any party to maintain any
insurance coverage required to be maintained by such party pursuant to this
Lease. This provision is intended to waive fully, any rights and/or claims
arising by reason of the foregoing, but only to the extent that any of the
foregoing damages and/or claims referred to above are covered or would be
covered, and only to the extent of such coverage, by insurance actually carried
or required to be maintained pursuant to this Lease by either Landlord or
Tenant. This provision is also intended to waive fully, and for the benefit of
each party, any rights and/or claims which might give rise to a right of
subrogation on any insurance carrier. Subject to all qualifications of this
Xxxxxxxxx 0, Xxxxxxxx waives its rights as specified in this Paragraph 9 with
respect to any subtenant that it has approved pursuant to Paragraph 21 but only
in exchange for the written waiver of such rights to be given by such subtenant
to Landlord upon such subtenant taking possession of the Premises or a portion
thereof. Each party shall cause each insurance policy obtained by it to provide
that the insurance company waives all right of recovery by way of subrogation
against either party in connection with any damage covered by any policy.
10. LANDLORD'S REPAIRS AND MAINTENANCE
Landlord shall at Landlord's expense maintain in good repair,
reasonable wear and tear excepted, the structural soundness of the roof, roof
membrane, foundations, and exterior walls of the Building. The term "exterior
walls" as used herein shall not include windows,
7
glass or plate glass, doors, special store fronts or office entries installed by
or at the request of Tenant. Any damage caused by or repairs necessitated by any
negligence or act of Tenant or Tenant's Parties may be repaired by Landlord at
Landlord's option and Tenant's expense. Tenant shall immediately give Landlord
written notice of any defect or need of repairs in such components of the
Building for which Landlord is responsible, after which Landlord shall have a
reasonable opportunity and the right to enter the Premises at all reasonable
times to repair same. Landlord's liability with respect to any defects, repairs,
or maintenance for which Landlord is responsible under any of the provisions of
this Lease shall be limited to the cost of such repairs or maintenance, and
there shall be no abatement of rent and no liability of Landlord by reason of
any injury to or interference with Tenant's business arising from the making of
repairs, alterations or improvements in or to any portion of the Premises, the
Building or the Project or to fixtures, appurtenances or equipment in the
Building, except as provided in Paragraph 24 or if (i) Landlord fails to
diligently correct such defects or makes such repairs within a reasonable period
of time after receiving written notice from Tenant, and (ii) such failure
materially and adversely interferes with Tenant's ability to conduct business
from the Premises. Notwithstanding anything to the contrary contained herein,
Landlord shall, at its expense, as soon as reasonably practicable, repair any
damage to the Premises or the Building resulting from or caused by any sole
negligence of Landlord or Landlord's agents, employees or contractors. By taking
possession of the Premises, Tenant accepts them "as is," as being in good order,
condition and repair and the condition in which Landlord is obligated to deliver
them and suitable for the Permitted Use and Tenant's intended operations in the
Premises, whether or not any notice of acceptance is given, subject to latent
defects.
11. TENANT'S REPAIRS AND MAINTENANCE
Tenant shall at all times during the Term at Tenant's expense maintain all
parts of the Premises and such portions of the Building as are within the
exclusive control of Tenant in a good, clean and secure condition reasonable
wear and tear excepted and promptly make all necessary repairs and replacements,
as reasonably determined by Landlord, with materials and workmanship of the same
character, kind and quality as the original. Notwithstanding anything to the
contrary contained herein, Tenant shall, at its expense, promptly repair any
damage to the Premises or the Building or Project resulting from or caused by
any negligence or act of Tenant or Tenant's Parties.
12. ALTERATIONS
A. Tenant shall not make, or allow to be made, any alterations, physical
additions, improvements or partitions, including without limitation the
attachment of any fixtures or equipment, in, about or to the Premises
("Alterations") without obtaining the prior written consent of Landlord, which
consent shall not be unreasonably withheld with respect to proposed Alterations
which: (a) comply with all applicable Regulations; (b) are, in Landlord's
reasonable opinion, compatible with the Building or the Project and its
mechanical, plumbing, electrical, heating/ventilation/air conditioning systems,
and will not by their installation or operation cause the Building or Project or
such systems to be required to be modified to comply with any Regulations
(including, without limitation, the Americans With Disabilities Act); and (c)
will not interfere with the use and occupancy of any other portion of the
Building or Project by any other tenant or its invitees. Specifically, but
without limiting the generality of the foregoing, Landlord shall have the right
of written consent for all plans and specifications for the proposed
Alterations, construction means and methods, all appropriate permits and
licenses, any contractor or subcontractor to be employed on the work of
Alterations, and the time for performance of such work, and may impose
reasonable rules and regulations for contractors and subcontractors performing
such work. Tenant shall also supply to Landlord any documents and information
reasonably requested by Landlord in connection with Landlord's consideration of
a request for approval hereunder. Tenant shall cause all Alterations to be
accomplished in a first-class, good and workmanlike manner, and to comply with
all applicable Regulations and Paragraph 27 hereof. Tenant shall at Tenant's
sole expense, perform any additional work required under applicable Regulations
due to the Alterations hereunder. No review or consent by Landlord of or to any
proposed Alteration or additional work shall constitute a waiver of Tenant's
obligations under this Paragraph 12, nor constitute any warranty or
representation that the same complies with all applicable Regulations, for which
Tenant shall at all times be solely responsible. Tenant shall reimburse
Landlord for all reasonable third party costs which Landlord may incur in
connection with granting approval to Tenant for any such Alterations, including
any costs or expenses which Landlord may incur in electing to have outside
architects and engineers review said plans and specifications, and shall pay
Landlord an administration fee of five percent (5%) of the cost of the
Alterations as Additional Rent hereunder. All such Alterations shall remain the
property of Tenant until the expiration or earlier termination of this Lease, at
which time they shall be and become the property of Landlord; provided, however,
that Landlord may, at Landlord's option as long as Landlord gave written notice
to Tenant prior to the construction of the Alterations regarding its intent to
exercise this option,, require that Tenant, at Tenant's expense, remove any or
all Alterations made by Tenant and restore the Premises by the expiration or
earlier termination of this Lease, to their condition existing prior to the
construction of any such Alterations. All such removals and restoration shall
be accomplished in a good and workmanlike manner so as not to cause any damage
to the Premises or Project whatsoever. If Tenant fails to remove such
Alterations or Tenant's trade fixtures or furniture or other personal property,
Landlord may keep and use them or remove any of them and cause them to be stored
or sold in accordance with applicable law, at Tenant's sole expense. In
addition to and wholly apart from Tenant's obligation to pay Tenant's
Proportionate Share of Operating Expenses, Tenant shall be responsible for and
shall pay prior to delinquency any taxes or governmental service fees,
possessory interest taxes, fees or charges in lieu of any such taxes, capital
levies, or other charges imposed upon, levied with respect to or assessed
against its fixtures or personal property, on the value of Alterations within
the Premises, and on Tenant's interest pursuant to this Lease, or any increase
in any of the foregoing based on such Alterations. 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 provided Landlord provides
Tenant reasonable documentation supporting such charges.
B. In compliance with Paragraph 27 hereof, at least ten (10) business days
before beginning construction of any Alteration, Tenant shall give Landlord
written notice of the expected commencement date of that construction to permit
Landlord to post and record a notice of non-responsibility. Upon substantial
completion of construction, if the law so provides, Tenant shall cause a timely
notice of completion to be recorded in the office of the recorder of the county
in which the Building is located.
13. SIGNS
Tenant shall not place, install, affix, paint or maintain any signs,
notices, graphics or banners whatsoever or any window decor which is visible in
or from public view or corridors, the common areas or the exterior of the
Premises or the Building, in or on any exterior window or window fronting upon
any common areas or service area without Landlord's prior written approval which
Landlord shall not be unreasonably withheld or delayed ; provided that Tenant's
name shall be included in any Building-standard door and directory signage, if
any, in accordance with Landlord's Building signage program, including without
limitation, payment by Tenant of any fee charged by Landlord for maintaining
such signage, which fee shall constitute Additional Rent hereunder. Any
installation of signs, notices, graphics or banners on or about the Premises or
Project approved by Landlord shall be subject to any Regulations and to any
other requirements imposed by Landlord. Tenant shall remove all such signs or
graphics by the
8
expiration or any earlier termination of this Lease. Such installations and
removals shall be made in such manner as to avoid injury to or defacement of the
Premises, Building or Project and any other improvements contained therein, and
Tenant shall repair any injury or defacement including without limitation
discoloration caused by such installation or removal.
Provided Tenant is not in default under any of the terms or conditions of
this Lease which remains uncured, Tenant, at Tenant's sole cost and expense,
shall have the right to install a sign on the exterior of the Building in a
location mutually acceptable to Landlord and Tenant ("Tenant's Signage'").
Tenant's Signage shall be subject to Landlord's approval which approval shall
not be unreasonably withheld or delayed as to size, design, graphics, materials,
method of attachment, colors and similar specifications and shall be consistent
with the exterior design, materials and appearance of the Project and the
Project's signage program, if any, and shall be further subject to all
applicable local governmental laws, rules, regulations, codes and other
approvals. Tenant's Signage shall be personal to the original Tenant and may not
be assigned to any assignee or sublessee of the Premises (other than to an
Affiliate of Tenant), or any other person or entity. Landlord has the right, but
not the obligation, to oversee the installation of Tenant's Signage. The cost to
operate, if any, Tenant's Signage shall be paid for by Tenant, and Tenant shall
be separately metered for such expense (the cost of separately metering any
utility usage shall also be paid for by Tenant). Upon the expiration of the
Lease Term, or other earlier termination of this Lease, Tenant shall be
responsible for any and all costs associated with the removal of Tenant's
Signage, including, but not limited to, the cost to repair and restore the
Building to its original condition, normal wear and tear excepted.
14. INSPECTION/POSTING NOTICES
After reasonable notice, except in emergencies where no such notice shall be
required, Landlord and Landlord's agents and representatives, shall have the
right to enter the Premises to inspect the same, to clean, to perform such work
as may be permitted or required hereunder, to make repairs, improvements or
alterations to the Premises, Building or Project or to 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 exhibit the Premises to prospective tenants, purchasers,
encumbrancers or to others, or for any other purpose as Landlord may deem
necessary or desirable; provided, however, that Landlord shall use reasonable
efforts not to unreasonably interfere with Tenant's business operations. Tenant
shall not be entitled to any abatement of Rent by reason of the exercise of any
such right of entry. Tenant waives any claim for damages for any injury or
inconvenience to or interference with Tenant's business, any loss of occupancy
or quiet enjoyment of the Premises, and any other loss occasioned thereby.
Landlord shall at all times have and retain a key with which to unlock all of
the doors in, upon and about the Premises, excluding Tenant's vaults and safes
or special security areas (designated in advance), and Landlord shall have the
right to use any and all means which Landlord may deem necessary or proper to
open said doors in an emergency, in order to obtain entry to any portion of the
Premises, and any entry to the Premises or portions thereof obtained by Landlord
by any of said means, or otherwise, shall not be construed to be a forcible or
unlawful entry into, or a detainer of, the Premises, or an eviction, actual or
constructive, of Tenant from the Premises or any portions thereof. At any time
within six (6) months prior to the expiration of the Term or following any
earlier termination of this Lease or agreement to terminate this Lease, Landlord
shall have the right to erect on the Premises, Building and/or Project a
suitable sign indicating that the Premises are available for lease.
15. SERVICES AND UTILITIES
C. Provided Tenant shall not be in default hereunder, and subject to the
provisions elsewhere herein contained and to the rules and regulations of the
Building, Landlord shall furnish to the Premises during ordinary business hours
of generally recognized business days, to be determined by Landlord (but
exclusive, in any event, of Saturdays, Sundays and legal holidays), water for
lavatory and drinking purposes and electricity, heat and air conditioning as
usually furnished or supplied for use of the Premises for reasonable and normal
office use as of the date Tenant takes possession of the Premises as determined
by Landlord (but not including above-standard or continuous cooling for
excessive heat-generating machines, excess lighting or equipment), janitorial
services during the times and in the manner that such services are customarily
furnished in comparable office buildings in the immediate market area, and
elevator service, which shall mean service either by nonattended automatic
elevators or elevators with attendants, or both, at the option of Landlord.
Tenant acknowledges that Tenant has inspected and accepts the water,
electricity, heat and air conditioning and other utilities and services being
supplied or furnished to the Premises as of the date Tenant takes possession of
the Premises, as being sufficient for use of the Premises for reasonable and
normal office use in their present condition, "as is," and suitable for the
Permitted Use, and for Tenant's intended operations in the Premises. Landlord
shall provide additional or after-hours electricity, heating or air
conditioning at Tenant's request and Tenant shall pay to Landlord a reasonable
charge for such services as determined by Landlord. Tenant agrees to keep and
cause to be kept closed all window covering when necessary because of the sun's
position, and Tenant also agrees at all times to cooperate fully with Landlord
and to abide by all of the regulations and requirements which Landlord may
prescribe for the proper functioning and protection of electrical, heating,
ventilating and air conditioning systems. Wherever heat-generating machines,
excess lighting or equipment are used in the Premises which affect the
temperature otherwise maintained by the air conditioning system, Landlord
reserves the right to install supplementary air conditioning units in the
Premises and the cost thereof, including the cost of installation and the cost
of operation and maintenance thereof, shall be paid by Tenant to Landlord upon
demand by Landlord.
D. Tenant shall not without written consent of Landlord use any apparatus,
equipment or device in the Premises, including without limitation, computers,
electronic data processing machines, copying machines, and other machines, using
excess lighting or using electric current, water, or any other resource in
excess of or which will in any way increase the amount of electricity, water, or
any other resource being furnished or supplied for the use of the Premises for
reasonable and normal office use, in each case as of the date Tenant takes
possession of the Premises as determined by Landlord, or which will require
additions or alterations to or interfere with the Building power distribution
systems; nor connect with electric current, except through existing electrical
outlets in the Premises or water pipes, any apparatus, equipment or device for
the purpose of using electrical current, water, or any other resource. If
Tenant shall require water or electric current or any other resource in excess
of that being furnished or supplied for the use of the Premises as of the date
Tenant takes possession of the Premises as determined by Landlord, Tenant shall
first procure the written consent of Landlord which Landlord may refuse, to the
use thereof, and Landlord may cause a special meter to be installed in the
Premises so as to measure the amount of water, electric current or other
resource consumed for any such other use. Tenant shall pay directly to Landlord
as an addition to and separate from payment of Operating Expenses the cost of
all such additional resources, energy, utility service and meters (and of
installation, maintenance and repair thereof and of any additional circuits or
other equipment necessary to furnish such additional resources, energy, utility
or service). Landlord shall not be liable for any damages directly or
indirectly resulting from nor shall the Rent or any monies owed Landlord under
this Lease herein reserved be abated by reason of: (a) the installation, use or
interruption of use of any equipment used in connection with the furnishing of
any such utilities or services, or any change in the character or means of
supplying or providing any such utilities or services or any supplier thereof;
(b) the failure to furnish or delay in furnishing any such utilities or services
when such failure or delay is caused by acts of God or the elements, labor
disturbances of any character, or any other accidents or other conditions beyond
the reasonable control of Landlord or because of any interruption of service due
to Tenant's use of water, electric current or other resource in excess of that
being supplied or furnished for the use of the Premises as of the date Tenant
takes possession of the Premises; (c) the inadequacy, limitation, curtailment,
rationing or restriction on use of water, electricity, gas or any other form of
energy or any other service or utility whatsoever serving the Premises or
Project, whether by Regulation or otherwise; or (d) the partial or total
unavailability of any such utilities or services to the Premises or the
Building, whether by Regulation or otherwise; nor shall any such occurrence
constitute an actual or constructive eviction of Tenant. Landlord shall further
have no obligation
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to protect or preserve any apparatus, equipment or device installed by Tenant in
the Premises, including without limitation by providing additional or after-
hours heating or air conditioning. Landlord shall be entitled to cooperate
voluntarily and in a reasonable manner with the efforts of national, state or
local governmental agencies or utility suppliers in reducing energy or other
resource consumption. The obligation to make services available hereunder shall
be subject to the limitations of any such voluntary, reasonable program. In
addition, Landlord reserves the right to change the supplier or provider of any
such utility or service from time to time. Tenant shall have no right to
contract with or otherwise obtain any electrical or other such service for or
with respect to the Premises or Tenant's operations therein from any supplier or
provider of any such service. Tenant shall cooperate with Landlord and any
supplier or provider of such services designated by Landlord from time to time
to facilitate the delivery of such services to Tenant at the Premises and to the
Building and Project, including without limitation allowing Landlord and
Landlord's suppliers or providers, and their respective agents and contractors,
reasonable access to the Premises for the purpose of installing, maintaining,
repairing, replacing or upgrading such service or any equipment or machinery
associated therewith.
E. Tenant shall pay, upon demand, for all utilities furnished to the Premises,
or if not separately billed to or metered to Tenant, Tenant's Proportionate
Share of all charges jointly serving the Project in accordance with Paragraph 7.
All sums payable under this Paragraph 15 shall constitute Additional Rent
hereunder.
16. SUBORDINATION
Without the necessity of any additional document being executed by Tenant
for the purpose of effecting a subordination, the Lease shall be and is hereby
declared to be subject and subordinate at all times to: (a) all ground leases or
underlying leases which may now exist or hereafter be executed affecting the
Premises and/or the land upon which the Premises and Project are situated, or
both; and (b) any mortgage or deed of trust which may now exist or be placed
upon the Building, the Project and/or the land upon which the Premises or the
Project are situated, or said ground leases or underlying leases, or Landlord's
interest or estate in any of said items which is specified as security.
Notwithstanding the foregoing, Landlord shall have the right to subordinate or
cause to be subordinated any such ground leases or underlying leases or any such
liens to this Lease. If any ground lease or underlying lease terminates for any
reason or any mortgage or deed of trust is foreclosed or a conveyance in lieu of
foreclosure is made for any reason, Tenant shall, notwithstanding any
subordination, attorn to and become the Tenant of the successor in interest to
Landlord provided that Tenant shall not be disturbed in its possession under
this Lease by such successor in interest so long as Tenant is not in default
under this Lease. Within ten (10) days after request by Landlord, Tenant shall
execute and deliver any additional documents evidencing Tenant's attornment or
the subordination of this Lease with respect to any such ground leases or
underlying leases or any such mortgage or deed of trust, in the form requested
by Landlord or by any ground landlord, mortgagee, or beneficiary under a deed of
trust, subject to such nondisturbance requirement. Landlord shall use
commercially reasonable efforts to obtain a subordination, nondisturbance and
attornment agreement for the benefit of Tenant reflecting the foregoing from any
ground landlord, mortgagee or beneficiary, at Landlord's expense, subject to
such other terms and conditions as the ground landlord, mortgagee or beneficiary
may require.
17. FINANCIAL STATEMENTS
At the request of Landlord from time to time, Tenant shall provide to
Landlord Tenant's and any guarantor's current financial statements or other
information discussing financial worth of Tenant and any guarantor, which
Landlord shall use solely for purposes of this Lease and in connection with the
ownership, management, financing and disposition of the Project.
18. ESTOPPEL CERTIFICATE
Tenant agrees from time to time, within ten (10) business days after request
of Landlord, to deliver to Landlord, or Landlord's designee, an estoppel
certificate stating that this Lease is in full force and effect, that this Lease
has not been modified (or stating all modifications, written or oral, to this
Lease), the date to which Rent has been paid, the unexpired portion of this
Lease, that there are no current defaults by Landlord or Tenant under this Lease
(or specifying any such defaults), that the leasehold estate granted by this
Lease is the sole interest of Tenant in the Premises and/or the land at which
the Premises are situated, and such other matters pertaining to this Lease as
may be reasonably requested by Landlord or any mortgagee, beneficiary, purchaser
or prospective purchaser of the Building or Project or any interest therein.
Notwithstanding anything to the contrary, Tenant's execution of an estoppel
certificate shall not be a waiver of Tenant's rights to audit or challenge the
Operating Expenses as described in Section 7. Failure by Tenant to execute and
deliver such certificate shall constitute an acceptance of the Premises and
acknowledgment by Tenant that the statements included are true and correct
without exception. Tenant agrees that if Tenant fails to execute and deliver
such certificate within such ten (10) business day period, Landlord may execute
and deliver such certificate on Tenant's behalf and that such certificate shall
be binding on Tenant. Landlord and Tenant intend that any statement delivered
pursuant to this Paragraph may be relied upon by any mortgagee, beneficiary,
purchaser or prospective purchaser of the Building or Project or any interest
therein. The parties agree that Tenant's obligation to furnish such estoppel
certificates in a timely fashion is a material inducement for Landlord's
execution of the Lease, and shall be an event of default (without any cure
period that might be provided under Paragraph 26.A(3) of this Lease) if Tenant
fails to fully comply or makes any material misstatement in any such
certificate.
19. SECURITY DEPOSIT
A. Delivery of Letter of Credit. In lieu of depositing a security deposit with
Landlord, Tenant shall, on execution of this Lease, deliver to Landlord and
cause to be in effect for a period expiring no earlier than thirty (30)
days after the expiration of the Lease Term, an unconditional, irrevocable
letter of credit ("LC") in the amount of $556,000.00, as may be reduced as
provided in the Lease (the "LC Amount"). The LC shall be in a form
acceptable to Landlord and shall be issued by an LC bank selected by Tenant
and reasonably acceptable to Landlord. An LC Bank is a bank that accepts
deposits, maintains accounts, has a local office that will negotiate a
letter of credit, and the deposits of which are insured by the Federal
Deposit Insurance Corporation. Tenant shall pay all expenses, points or
fees incurred by Tenant in obtaining the LC.
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B. Replacement of Letter of Credit. Tenant may, from time to time, replace any
existing LC with a new LC if the new LC (a) becomes effective at least
thirty (30) days before expiration of the LC that it replaces; (b) is in the
required LC amount; (c) is issued by an LC bank reasonably acceptable to
Landlord; and (d) otherwise complies with the requirements of this Paragraph
19.
Landlord's Right to Draw on Letter of Credit. Landlord shall hold the LC as
security for the performance of Tenant's obligations under this Lease. If,
after notice and failure to cure within any applicable period provided in
the Lease, Tenant defaults on any provision of this Lease, Landlord may,
without prejudice to any other remedy it has, draw on that portion of the LC
necessary to (a) pay Rent or other sum in default; (b) pay or reimburse
Landlord for any amount that Landlord may reasonably spend or become
obligated to spend in exercising Landlord's rights under Paragraph 30 (Right
of Landlord to Perform Tenant's Covenant); and/or (c) compensate Landlord
for any reasonable expense, loss, or damage that Landlord may suffer because
of Tenant's default. If Tenant fails to renew or replace the LC at least
thirty (30) days before the expiration, Landlord may, without prejudice to
any other remedy it has, draw on the entire amount of the LC.
C. LC Security Deposit. Any amount of the LC that is drawn on by Landlord but
not applied by Landlord shall be held by Landlord as a security deposit
(the "LC Security Deposit"). Although the Security Deposit shall be deemed
the property of Landlord, any remaining balance of such deposit shall be
returned by Landlord to Tenant within sixty (60) days after termination of
this Lease, reduced by such amounts as may be required by Landlord to
remedy defaults on the part of Tenant in the payment of Rent or other
obligations of Tenant under this Lease, to repair damage to the Premises or
Building caused by Tenant or any Tenant's Parties and to clean the
Premises. Landlord may use and commingle the Security Deposit with other
funds of Landlord.
D. Restoration of Letter of Credit and LC Security Deposit. If Landlord draws
on any portion of the LC and/or applies all or any portion of such draw,
Tenant shall, within five (5) business days after demand by Landlord,
either (a) deposit cash with Landlord in an amount that, when added to the
amount remaining under the LC and the amount of any LC Security Deposit,
shall equal the LC Amount then required under this Paragraph 19; or (b)
reinstate the LC to the full LC Amount.
E. Reduction in LC. Tenant shall have the right to reduce the LC at the end of
each twelve (12) month period by $101,500.00 (see schedule below), so long
as Tenant is not in Default (per Paragraph 26 of this Lease) during each of
the preceding twelve (12) month periods. If Tenant is in default (per
Paragraph 26 of this Lease) and such default has not been cured by Tenant
prior to the anniversary of the Commencement Date within any twelve (12)
month period, the LC shall not be reduced for the following twelve (12)
month period; provided, however, that upon effective cure of such default
all future reductions shall be made as set forth herein.
Months LC Amount
1 through 12 $556,000.00
13 through 24 $454,500.00
25 through 36 $353,000.00
37 through 48 $251,500.00
49 through 60 $150,000.00
thirty (30) days thereafter $100,000.00
20. LIMITATION OF TENANT'S REMEDIES
The obligations and liability of Landlord to Tenant for any default by Landlord
under the terms of this Lease are not personal obligations of the individual or
other partners of Landlord or its or their partners, directors, officers, or
shareholders, and Tenant agrees to look solely to Landlord's interest in the
Project and any net sales proceeds from the sale of the Project for the recovery
of any amount from Landlord, and shall not look to other assets of Landlord nor
seek recourse against the assets of the individual or other partners of Landlord
or its or their partners, directors, officers or shareholders. Any lien
obtained to enforce any such judgment and any levy of execution thereon shall be
subject and subordinate to any lien, mortgage or deed of trust on the Project.
21. ASSIGNMENT AND SUBLETTING
A. General. Tenant may assign or pledge this Lease or sublet the Premises, or
any part thereof, with Landlord's prior written consent as provided herein. If
Tenant desires to assign this Lease or sublet any or all of the Premises, Tenant
shall give Landlord written notice (the "Transfer Notice") at least thirty (30)
days prior to the anticipated effective date of the proposed assignment or
sublease, which shall contain all of the information reasonably requested by
Landlord to address Landlord's decision criteria specified hereinafter.
Landlord shall then have a period of thirty (30) days following receipt of the
Transfer Notice to notify Tenant in writing that Landlord elects either: (i) if
the transfer is not a Permitted Transfer (as defined herein) to terminate this
Lease as to the space so affected as of the date so requested by Tenant
("Landlord's Termination Notice"); or (ii) to consent to the proposed assignment
or sublease, subject, however, to Landlord's prior written consent of the
proposed assignee or subtenant and of any related documents or agreements
associated with the assignment or sublease. Notwithstanding the foregoing, if
Tenant revokes its request of Landlord to consent to a proposed sublease or
assignment within forty-eight (48) hours after Tenant's receipt of Landlord's
Termination Notice, Landlord's termination pursuant to the preceding sentence
shall be null and void and of no force or effect. If Landlord should fail to
notify Tenant in writing of such election within said period, Landlord shall be
deemed to have consented to the proposed assignee or subtenant . If Landlord
does not exercise option (i) above, Landlord's consent to a proposed assignment
or sublease shall not be unreasonably withheld or delayed. Consent to any
assignment or subletting shall not constitute consent to any subsequent
transaction to which this Paragraph 21 applies.
B. Conditions of Landlord's Consent. Without limiting the other instances in
which it may be reasonable for Landlord to withhold Landlord's consent to an
assignment or subletting, Landlord and Tenant acknowledge that it shall be
reasonable for Landlord to withhold Landlord's consent in the following
instances: if the proposed assignee does not agree to be bound by and assume the
obligations of Tenant under this Lease in form and substance reasonably
satisfactory to Landlord; the use of the Premises by such proposed assignee or
subtenant would not be a Permitted Use or would violate any exclusivity or other
arrangement which Landlord has with any other tenant or occupant or any
Regulation or would materially increase the Occupancy Density or Parking Density
of the Building or Project, or
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would otherwise result in an undesirable tenant mix for the Project as
reasonably determined by Landlord; the proposed assignee or subtenant is not of
sound financial condition as reasonably determined by Landlord ; the proposed
assignee or subtenant is a governmental agency; the proposed assignee or
subtenant does not have a good reputation as a tenant of property or a good
business reputation; the proposed assignee or subtenant is a person with whom
Landlord is negotiating to lease space in the Project or is a present tenant of
the Project; the assignment or subletting would entail any Alterations which
would lessen the value of the leasehold improvements in the Premises or use of
any Hazardous Materials or other noxious use or use which may disturb other
tenants of the Project; or Tenant is in default of any material obligation of
Tenant under this Lease, or Tenant has defaulted under this Lease on three (3)
or more occasions during any twelve (12) months preceding the date that Tenant
shall request consent. Failure by or refusal of Landlord to consent to a
proposed assignee or subtenant shall not cause a termination of this Lease. Upon
a termination under Paragraph 21.A.(1)(i), Landlord may lease the Premises to
any party, including parties with whom Tenant has negotiated an assignment or
sublease, without incurring any liability to Tenant. At the option of Landlord,
a surrender and termination of this Lease shall operate as an assignment to
Landlord of some or all subleases or subtenancies. Landlord shall exercise this
option by giving notice of that assignment to such subtenants on or before the
effective date of the surrender and termination. In connection with each request
for assignment or subletting, Tenant shall pay to Landlord Landlord's third
party costs incurred for approving such requests, and effecting any such
transfer, including, without limitation, reasonable attorneys' fees.
C. Bonus Rent. Any Rent or other consideration realized by Tenant under any
such sublease or assignment in excess of the Rent payable hereunder, after
amortization of a reasonable brokerage commission, reasonable marketing costs,
reasonable tenant improvement expenses and other reasonable, out-of-pocket
economic concessions incurred by Tenant, shall be divided and paid, ten percent
to Tenant, ninety percent to Landlord. In any subletting or assignment
undertaken by Tenant, Tenant shall diligently seek to obtain the maximum rental
amount available in the marketplace for comparable space available for primary
leasing.
D. Corporation. If Tenant is a corporation, a transfer of corporate shares by
sale, assignment, bequest, inheritance, operation of law or other disposition
(including such a transfer to or by a receiver or trustee in federal or state
bankruptcy, insolvency or other proceedings) resulting in a change in the
present control of such corporation or any of its parent corporations by the
person or persons owning a majority of said corporate shares, shall constitute
an assignment for purposes of this Lease. Any provision in this Lease to the
contrary notwithstanding, Landlord's consent shall not be required for any of
the following transfers (each of which shall be a "Permitted Transfer"): (a) to
any person(s) or entity who controls, is controlled by or is under common
control with Tenant, (b) to any entity resulting from the merger, consolidation
or other reorganization with Tenant, whether or not Tenant is the surviving
entity or (c) to any person or legal entity which acquires all or substantially
all of the assets or stock of Tenant (each of the foregoing is hereinafter
referred to as a "Tenant Affiliate"); provided that before such assignment shall
be effective, (w) such assignment or sublease shall not be a subterfuge by
Tenant to avoid its obligations under this paragraph 21, (x) said Tenant
Affiliate shall assume, in full, the obligations of Tenant under this Lease, (y)
Landlord shall be given written notice of such assignment and assumption and (z)
the use of the Premises by the Tenant Affiliate shall be as set forth in Article
4A. For purposes of this paragraph, a public or private offering of Tenant
stock is a Permitted Transfer and the term "control" means possession, directly
or indirectly, of the power to direct or cause the direction of the management,
affairs and policies of anyone, whether through the ownership of voting
securities, by contract or otherwise. The bonus rental provisions of Paragraph
21B of this Lease shall not apply to an assignment or sublease by Tenant to a
Tenant Affiliate.
E. Unincorporated Entity. If Tenant is a partnership, joint venture,
unincorporated limited liability company or other unincorporated business form,
a transfer of the interest of persons, firms or entities responsible for
managerial control of Tenant by sale, assignment, bequest, inheritance,
operation of law or other disposition, so as to result in a change in the
present control of said entity and/or of the underlying beneficial interests of
said entity and/or a change in the identity of the persons responsible for the
general credit obligations of said entity shall constitute an assignment for all
purposes of this Lease.
F. Liability. No assignment or subletting by Tenant, permitted or otherwise,
shall relieve Tenant of any obligation under this Lease or alter the primary
liability of the Tenant named herein for the payment of Rent or for the
performance of any other obligations to be performed by Tenant, including
obligations contained in Paragraph 25 with respect to any assignee or subtenant.
Landlord may collect rent or other amounts or any portion thereof from any
assignee, subtenant, or other occupant of the Premises, permitted or otherwise,
and apply the net rent collected to the Rent payable hereunder, but no such
collection shall be deemed to be a waiver of this Paragraph 21, or the
acceptance of the assignee, subtenant or occupant as tenant, or a release of
Tenant from the further performance by Tenant of the obligations of Tenant under
this Lease. Any assignment or subletting which conflicts with the provisions
hereof shall be void.
22. AUTHORITY
Landlord represents and warrants that it has full right and authority to enter
into this Lease and to perform all of Landlord's obligations hereunder and that
all persons signing this Lease on its behalf are authorized to do. Tenant and
the person or persons, if any, signing on behalf of Tenant, jointly and
severally represent and warrant that Tenant has full right and authority to
enter into this Lease, and to perform all of Tenant's obligations hereunder, and
that all persons signing this Lease on its behalf are authorized to do so.
23. CONDEMNATION
A. Condemnation Resulting in Termination. If the whole or any substantial part
of the Premises should be taken or condemned for any public use under any
Regulation, or by right of eminent domain, or by private purchase in lieu
thereof, and the taking would prevent or materially interfere with the Permitted
Use of the Premises, either party shall have the right to terminate this Lease
at its option. If any material portion of the Building or Project is taken or
condemned for any public use under any Regulation, or by right of eminent
domain, or by private purchase in lieu thereof, Landlord may terminate this
Lease at its option. In either of such events, the Rent shall be abated during
the unexpired portion of this Lease, effective when the physical taking of said
Premises shall have occurred.
B. Condemnation Not Resulting in Termination. If a portion of the Project of
which the Premises are a part should be taken or condemned for any public use
under any Regulation, or by right of eminent domain, or by private purchase in
lieu thereof, and the taking prevents or materially interferes with the
Permitted Use of the Premises, and this Lease is not terminated as provided in
Paragraph 23.A. above, the Rent payable hereunder during the unexpired portion
of the Lease shall be reduced, beginning on the date when the physical taking
shall have occurred, to such amount as may be fair and reasonable under all of
the circumstances. Notwithstanding anything to the contrary contained in this
Paragraph, if the temporary use or occupancy of any part of the Premises shall
be taken or appropriated under power of eminent domain during the Term, this
Lease shall be and remain unaffected by such taking or appropriation and Tenant
shall continue to pay in full all Rent payable hereunder by Tenant during the
Term; in the event of any such temporary appropriation or taking, Tenant shall
be entitled to receive that portion of any award which represents compensation
for the use of or occupancy of the Premises during the Term, and Landlord shall
be entitled to receive that portion of any award which represents the cost of
restoration of the Premises and the use and occupancy of the Premises outside of
the Term.
C. Award. Landlord shall be entitled to (and Tenant shall assign to Landlord)
any and all payment, income, rent, award or any interest therein which may be
paid or made in connection with such taking or conveyance solely as it relates
to the loss in value to the
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Premises and Tenant shall have no claim against Landlord or otherwise for any
sums paid by virtue of such proceedings, whether or not attributable to the
value of any unexpired portion of this Lease, except as expressly provided in
this Lease. Notwithstanding the foregoing, any compensation specifically and
separately awarded Tenant for Tenant's personal property and moving costs, shall
be and remain the property of Tenant.
D. Waiver of CCP(S)1265.130. Each party waives the provisions of California
Civil Code Procedure Section 1265.130 allowing either party to petition the
superior court to terminate this Lease as a result of a partial taking.
24. CASUALTY DAMAGE
A. General. If the Premises or Building should be damaged or destroyed by
fire, earthquake, tornado, or other casualty (collectively, "Casualty"), Tenant
shall give immediate written notice thereof to Landlord. Within sixty (60) days
after Landlord's receipt of such notice, Landlord shall notify Tenant whether in
Landlord's contractor's estimation material restoration of the Premises can
reasonably be made within one hundred eighty (180) days from the date of such
notice and receipt of required permits for such restoration.
B. Within 180 Days. If the Premises or Building should be damaged by Casualty
to such extent that material restoration can in Landlord's contractor's
estimation be reasonably completed within one hundred eighty (180) days after
the date of such notice and receipt of required permits for such restoration,
this Lease shall not terminate. Provided that insurance proceeds are received
by Landlord to fully repair the damage, Landlord shall diligently proceed to
rebuild and repair the Premises, except that Landlord shall not be required to
rebuild, repair or replace any part of the Alterations which may have been
placed on or about the Premises by Tenant. If the Premises are untenantable in
whole or in part following such damage, the Rent payable hereunder during the
period in which they are untenantable shall be abated proportionately.
C. Greater than 180 Days. If the Premises or Building should be damaged by
Casualty to such extent that rebuilding or repairs cannot in Landlord's
contractor's estimation be reasonably completed within one hundred eighty (180)
days after the date of such notice and receipt of required permits for such
rebuilding or repair, then Landlord shall have the option of either: (1)
terminating this Lease effective upon the date of the occurrence of such damage,
in which event the Rent shall be abated during the unexpired portion of this
Lease; or (2) electing to rebuild or repair the Premises diligently. Landlord
shall notify Tenant of its election within sixty (60) days after Landlord's
receipt of notice of the damage or destruction. Notwithstanding the above,
Landlord shall not be required to rebuild, repair or replace any part of any
Alterations which may have been placed, on or about the Premises by Tenant. If
the Premises are untenantable or cannot be used for the operation of Tenant's
business in whole or in part following such damage and Tenant in fact does not
use the Premises, the Rent payable hereunder during the period in which they are
untenantable shall be abated proportionately.
D. Tenant's Fault. Notwithstanding anything herein to the contrary, if the
Premises or any other portion of the Building are damaged by Casualty resulting
from the fault, negligence, or breach of this Lease by Tenant or any of Tenant's
Parties, Base Rent and Additional Rent shall not be diminished during the repair
of such damage and Tenant shall be liable to Landlord for the cost and expense
of the repair and restoration of the Building caused thereby to the extent such
cost and expense is not covered by insurance proceeds.
E. Insurance Proceeds. Notwithstanding anything herein to the contrary, if the
Premises or Building are damaged or destroyed and are not fully covered by the
insurance proceeds received by Landlord or if the holder of any indebtedness
secured by a mortgage or deed of trust covering the Premises requires that the
insurance proceeds be applied to such indebtedness, then in either case Landlord
shall have the right to terminate this Lease by delivering written notice of
termination to Tenant within thirty (30) days after the date of notice to
Landlord that said damage or destruction is not fully covered by insurance or
such requirement is made by any such holder, as the case may be, whereupon this
Lease shall terminate.
F. Waiver. This Paragraph 24 shall be Tenant's sole and exclusive remedy in
the event of damage or destruction to the Premises or the Building. As a
material inducement to Landlord entering into this Lease, Tenant hereby waives
any rights it may have under Sections 1932, 1933(4), 1941 or 1942 of the Civil
Code of California with respect to any destruction of the Premises, and Tenant's
right to make repairs and deduct the expenses of such repairs, or under any
similar law, statute or ordinance now or hereafter in effect.
G. Tenant's Personal Property. In the event of any damage or destruction of
the Premises or the Building, under no circumstances shall Landlord be required
to repair any injury or damage to, or make any repairs to or replacements of,
Tenant's personal property, except if the damage or injury results from the
fault, negligence or breach of this Lease by Landlord (subject to the terms of
paragraph 9 above).
25. HOLDING OVER
Unless Landlord expressly consents in writing to Tenant's holding over, Tenant
shall be unlawfully and illegally in possession of the Premises, whether or not
Landlord accepts any rent from Tenant or any other person while Tenant remains
in possession of the Premises without Landlord's written consent. If Tenant
shall retain possession of the Premises or any portion thereof without
Landlord's consent following the expiration of this Lease or sooner termination
for any reason, then Tenant shall pay to Landlord for each day of such retention
one hundred fifty percent (150%) of the amount of daily rental as of the last
month prior to the date of expiration or earlier termination for the first three
months following expiration and two hundred percent (200%) of the amount of
daily rental as of the last month prior to the date of expiration or earlier
termination for every month thereafter. Tenant shall also indemnify, defend,
protect and hold Landlord harmless from any loss, liability or cost, including
consequential and incidental damages and reasonable attorneys' fees, incurred by
Landlord resulting from delay by Tenant in surrendering the Premises, including,
without limitation, liability of Landlord to the succeeding tenant founded on
such delay. Acceptance of Rent by Landlord following expiration or earlier
termination of this Lease, or following demand by Landlord for possession of the
Premises, shall not constitute a renewal of this Lease, and nothing contained in
this Paragraph 25 shall waive Landlord's right of reentry or any other right.
Additionally, if upon expiration or earlier termination of this Lease, or
following demand by Landlord for possession of the Premises, Tenant has not
fulfilled its obligation with respect to repairs and cleanup of the Premises or
any other Tenant obligations as set forth in this Lease, then Landlord shall
have the right to perform any such obligations as it deems necessary at Tenant's
sole cost and expense, and any time required by Landlord to complete such
obligations shall be considered a period of holding over and the terms of this
Paragraph 25 shall apply. The provisions of this Paragraph 25 shall survive any
expiration or earlier termination of this Lease.
26. DEFAULT
A. Events of Default. The occurrence of any of the following shall constitute
an event of default on the part of Tenant:
Version 10.2 13
(1) Abandonment. Abandonment or vacation of the Premises for a continuous
period in excess of five (5) days. Tenant waives any right to notice Tenant
may have under Section 1951.3 of the Civil Code of the State of California,
the terms of this Paragraph 26.A. being deemed such notice to Tenant as
required by said Section 1951.3.
(2) Nonpayment of Rent. Failure to pay any installment of Rent or any other
amount due and payable hereunder upon the date when said payment is due and
such failure continues for three (3) days after receiving notification from
Landlord (which notice shall be in lieu of, and not in addition to, the
notice requirement of Section 1161 of the California Code of Civil
Procedures or any similar or successor law.
(3) Other Obligations. Failure to perform any obligation, agreement or
covenant under this Lease other than those matters specified in
subparagraphs (1) and (2) of this Paragraph 26.A., such failure continuing
for fifteen (15) days after written notice of such failure, provided,
however, that if such failure cannot be reasonably cured in such time
period, Tenant shall have such time is reasonably required, provided Tenant
diligently seeks to cure such failure.
(4) General Assignment. A general assignment by Tenant for the benefit of
creditors.
(5) Bankruptcy. The filing of any voluntary petition in bankruptcy by
Tenant, or the filing of an involuntary petition by Tenant's creditors,
which involuntary petition remains undischarged for a period of thirty (30)
days. If 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, in 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 employment of a receiver to take possession of
substantially all of Tenant's assets or Tenant's leasehold of the Premises,
if such appointment remains undismissed or undischarged for a period of
fifteen (15) days after the order therefor.
(7) Attachment. The attachment, execution or other judicial seizure of all
or substantially all of Tenant's assets or Tenant's leasehold of the
Premises, if such attachment or other seizure remains undismissed or
undischarged for a period of fifteen (15) days after the levy thereof.
(8) Insolvency. The admission by Tenant in writing of its inability to pay
its debts as they become due.
(9) Remedies Upon Default.
(10) Termination. In the event of the occurrence of any event of default,
Landlord shall have the right to give a written termination notice to
Tenant, and on the date specified in such notice, Tenant's right to
possession shall terminate, and this Lease shall terminate unless on or
before such date all Rent in arrears and all costs and expenses incurred by
or on behalf of Landlord hereunder shall have been paid by Tenant and all
other events of default of this Lease by Tenant at the time existing shall
have been fully remedied to the satisfaction of Landlord. At any time
after such termination, Landlord may recover possession of the Premises or
any part thereof and expel and remove therefrom Tenant and any other person
occupying the same, including any subtenant or subtenants notwithstanding
Landlord's consent to any sublease, by any lawful means, and again
repossess and enjoy the Premises without prejudice to any of the remedies
that Landlord may have under this Lease, or at law or equity by any reason
of Tenant's default or of such termination. Landlord hereby reserves the
right, but shall not have the obligation, to recognize the continued
possession of any subtenant. The delivery or surrender to Landlord by or
on behalf of Tenant of keys, entry codes, or other means to bypass security
at the Premises shall not terminate this Lease.
(11) Continuation After Default. Even though an event of default may have
occurred, this Lease shall continue in effect for so long as Landlord does
not terminate Tenant's right to possession under Paragraph 26.B.(1) hereof,
and Landlord may enforce all of Landlord's rights and remedies under this
Lease and at law or in equity, including 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
successor code section. Acts of maintenance, preservation or efforts to
lease the Premises or the appointment of a receiver under application of
Landlord to protect Landlord's interest under this Lease or other entry by
Landlord upon the Premises shall not constitute an election to terminate
Tenant's right to possession.
(12) Increased Security Deposit. If Tenant is in default under Paragraph
26.A.(2) hereof and such default remains uncured for ten (10) days after
such occurrence or such default occurs more than three times in any twelve
(12) month period, Landlord may require that Tenant increase the Security
Deposit to the amount of three times the current month's Rent at the time
of the most recent default.
C. Damages After Default. Should Landlord terminate this Lease pursuant to the
provisions of Paragraph 26.B.(1) hereof, Landlord shall have the rights and
remedies of a Landlord provided by Section 1951.2 of the Civil Code of the State
of California, or any successor code sections. Upon such termination, in
addition to any other rights and remedies to which Landlord may be entitled
under applicable law or at equity, Landlord shall be entitled to recover from
Tenant: (1) the worth at the time of award of the unpaid Rent and other amounts
which had been earned at the time of termination, (2) the worth at the time of
award of the amount by which the unpaid Rent and other amounts that would have
been earned after the date of termination until the time of award exceeds the
amount of such Rent loss that Tenant proves could have been reasonably avoided;
(3) the worth at the time of award of the amount by which the unpaid Rent and
other amounts for the balance of the Term after the time of award exceeds the
amount of such Rent loss that the Tenant proves could be reasonably avoided; and
(4) any other amount and court costs necessary to compensate Landlord for all
detriment proximately caused by Tenant's failure to perform Tenant's obligations
under this Lease or which, in the ordinary course of things, would be likely to
result therefrom. The "worth at the time of award" as used in (1) and (2) above
shall be computed at the Applicable Interest Rate (defined below). The "worth
at the time of award" as used in (3) above shall be computed by discounting such
amount at the Federal Discount Rate of the Federal Reserve Bank of San Francisco
at the time of award plus one percent (1%). If this Lease provides for any
periods during the Term during which Tenant is not required to pay Base Rent or
if Tenant otherwise receives a Rent concession, then upon the occurrence of an
event of default, Tenant shall owe to Landlord the full amount of such Base Rent
or value of such Rent concession, plus interest at the Applicable Interest Rate,
calculated from the date that such Base Rent or Rent concession would have been
payable.
D. Late Charge. In addition to its other remedies, Landlord shall have the
right without notice or demand to add to the amount of any payment required to
be made by Tenant hereunder, and which is not paid and received by Landlord on
or before the fifth day of each calendar month, an amount equal to five percent
(5%) of the delinquency for each month or portion thereof that the delinquency
remains outstanding to compensate Landlord for the loss of the use of the amount
not paid and the administrative costs caused by the delinquency, the parties
agreeing that Landlord's damage by virtue of such delinquencies would be
extremely difficult and impracticable to compute and the amount stated herein
represents a reasonable estimate thereof. Any waiver by Landlord of any late
charges or failure to claim the same shall not constitute a waiver of other late
charges or any other remedies available to Landlord.
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E. Interest. Interest shall accrue on all sums not paid when due hereunder at
the lesser of fifteen percent (15%) per annum or the maximum interest rate
allowed by law ("Applicable Interest Rate") from the due date until paid.
F. Remedies Cumulative. All rights, privileges and elections or remedies of
the parties are cumulative and not alternative, to the extent permitted by law
and except as otherwise provided herein.
27. LIENS
Tenant shall at all times keep the Premises and the Project free from liens
arising out of or related to work or services performed, materials or supplies
furnished or obligations incurred by or on behalf of Tenant or in connection
with work made, suffered or done by or on behalf of Tenant in or on the Premises
or Project. If Tenant shall not, within ten (10) days following the imposition
of any such lien, cause the same to be released of record by payment or posting
of a proper bond, Landlord shall have, in addition to all other remedies
provided herein and by law, the right, but not the obligation, to cause the same
to be released by such means as Landlord shall deem proper, including payment of
the claim giving rise to such lien. All sums paid by Landlord on behalf of
Tenant and all expenses incurred by Landlord in connection therefor shall be
payable to Landlord by Tenant on demand with interest at the Applicable Interest
Rate as Additional Rent. Landlord shall have the right at all times to post and
keep posted on the Premises any notices permitted or required by law, or which
Landlord shall deem proper, for the protection of Landlord, the Premises, the
Project and any other party having an interest therein, from mechanics' and
materialmen's liens, and Tenant shall give Landlord not less than ten (10)
business days prior written notice of the commencement of any work in the
Premises or Project which could lawfully give rise to a claim for mechanics' or
materialmen's liens to permit Landlord to post and record a timely notice of
non-responsibility, as Landlord may elect to proceed or as the law may from time
to time provide, for which purpose, if Landlord shall so determine, Landlord may
enter the Premises. Tenant shall not remove any such notice posted by Landlord
without Landlord's consent, and in any event not before completion of the work
which could lawfully give rise to a claim for mechanics' or materialmen's liens.
28. SUBSTITUTION
A. At any time after execution of this Lease, Landlord may substitute for the
Premises other premises in the Project (the "New Premises") upon not less than
sixty (60) days prior written notice, in which event the New Premises shall be
deemed to be the Premises for all purposes hereunder and this Lease shall be
deemed modified accordingly to reflect the new location and shall remain in full
force and effect as so modified, provided that:
(1) The New Premises shall be similar in area and in function for Tenant's
purposes and contain usable square footage no less than five percent (5%)
less than the usable square footage of the Premises; and
(2) If Tenant is occupying the Premises at the time of such substitution,
Landlord shall pay the expense of physically moving Tenant, Tenant's
property and equipment to the New Premises. Landlord shall also pay all
reasonable out-of-pocket expenses for telephone and computer installation
and cabling (consistent with that existing in the Premises as of the date
of Landlord's Relocation Notice), net stationery, business cards and change
of address notices required as a result of such move. Landlord shall
furthermore pay the expense to improve the New Premises with improvements
substantially similar to those the Landlord has committed to provide or has
provided in the Premises.
29. TRANSFERS BY LANDLORD
In the event of a sale or conveyance by Landlord of the Building or a
foreclosure by any creditor of Landlord, the same shall operate to release
Landlord from any liability upon any of the covenants or conditions, express or
implied, herein contained in favor of Tenant, to the extent required to be
performed after the passing of title to Landlord's successor-in-interest. In
such event, Tenant agrees to look solely to the responsibility of the successor-
in-interest of Landlord under this Lease with respect to the performance of the
covenants and duties of "Landlord" to be performed after the passing of title to
Landlord's successor-in-interest. This Lease shall not be affected by any such
sale and Tenant agrees to attorn to the purchaser or assignee. Landlord's
successor(s)-in-interest shall not have liability to Tenant with respect to the
failure to perform any of the obligations of "Landlord," to the extent required
to be performed prior to the date such successor(s)-in-interest became the owner
of the Building.
30. RIGHT OF LANDLORD TO PERFORM TENANT'S COVENANTS
All covenants and agreements to be performed by Tenant under any of the terms of
this Lease shall be performed by Tenant at Tenant's sole cost and expense and
without any abatement of Rent. If Tenant shall fail to pay any sum of money,
other than Base Rent, required to be paid by Tenant hereunder or shall fail to
perform any other act on Tenant's part to be performed hereunder, including
Tenant's obligations under Paragraph 11 hereof, and such failure shall continue
for fifteen (15) days after notice thereof by Landlord, in addition to the other
rights and remedies of Landlord, Landlord may make any such payment and perform
any such act on Tenant's part. In the case of an emergency, no prior
notification by Landlord shall be required. Landlord may take such actions
without any obligation and without releasing Tenant from any of Tenant's
obligations. All sums so paid by Landlord and all incidental costs incurred by
Landlord and interest thereon at the Applicable Interest Rate, from the date of
payment by Landlord, shall be paid to Landlord on demand as Additional Rent.
31. WAIVER
If either Landlord or Tenant waives the performance of any term, covenant or
condition contained in this Lease, such waiver shall not be deemed to be a
waiver of any subsequent breach of the same or any other term, covenant or
condition contained herein, or constitute a course of dealing contrary to the
expressed terms of this Lease. The acceptance of Rent by Landlord shall not
constitute a waiver of any preceding breach by Tenant of any term, covenant or
condition of this Lease, regardless of Landlord's knowledge of such preceding
breach at the time Landlord accepted such Rent. Failure by Landlord to enforce
any of the terms, covenants or conditions of this Lease for any length of time
shall not be deemed to waive or decrease the right of Landlord to insist
thereafter upon strict performance by Tenant. Waiver by Landlord of any term,
covenant or condition contained in this Lease may only be made by a written
document signed by Landlord, based upon full knowledge of the circumstances.
32. NOTICES
Each provision of this Lease or of any applicable governmental laws, ordinances,
regulations and other requirements with reference to sending, mailing, or
delivery of any notice or the making of any payment by Landlord or Tenant to the
other shall be deemed to be complied with when and if the following steps are
taken:
A. Rent. All Rent and other payments required to be made by Tenant to Landlord
hereunder shall be payable to Landlord at Landlord's Remittance Address set
forth in the Basic Lease Information, or at such other address as Landlord may
specify from time to time by written notice delivered in accordance herewith.
Tenant's obligation to pay Rent and any other amounts to Landlord under the
terms of this Lease shall not be deemed satisfied until such Rent and other
amounts have been actually received by Landlord.
Version 10.2 15
B. Other. All notices, demands, consents and approvals which may or are
required to be given by either party to the other hereunder shall be in writing
and either personally delivered, sent by commercial overnight courier, mailed,
certified or registered, postage prepaid or sent by facsimile with confirmed
receipt (and with an original sent by commercial overnight courier), and in each
case addressed to the party to be notified at the Notice Address for such party
as specified in the Basic Lease Information 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. Notices shall be deemed served upon receipt or
refusal to accept delivery. Tenant 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 occupying the
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 Premises.
C. Required Notices. Tenant shall immediately notify Landlord in writing of
any notice of a violation or a potential or alleged violation of any Regulation
that relates to the Premises or the Project, or of any inquiry, investigation,
enforcement or other action that is instituted or threatened by any governmental
or regulatory agency against Tenant or any other occupant of the Premises, or
any claim that is instituted or threatened by any third party that relates to
the Premises or the Project.
33. ATTORNEYS' FEES
If Landlord places the enforcement of this Lease, or any part thereof, or the
collection of any Rent due, or to become due hereunder, or recovery of
possession of the Premises in the hands of an attorney, Tenant shall pay to
Landlord, upon demand, Landlord's reasonable attorneys' fees and court costs,
whether incurred without trial, at trial, appeal or review. In any action which
Landlord or Tenant brings to enforce its respective rights hereunder, the
unsuccessful party shall pay all costs incurred by the prevailing party
including reasonable attorneys' fees, to be fixed by the court, and said costs
and attorneys' fees shall be a part of the judgment in said action.
34. SUCCESSORS AND ASSIGNS
This Lease shall be binding upon and inure to the benefit of Landlord, its
successors and assigns, and shall be binding upon and inure to the benefit of
Tenant, its successors, and to the extent assignment is approved by Landlord as
provided hereunder, Tenant's assigns.
35. FORCE MAJEURE
If performance by a party of any portion of this Lease is made impossible by any
prevention, delay, or stoppage caused by strikes, lockouts, labor disputes, acts
of God, inability to obtain services, labor, or materials or reasonable
substitutes for those items, government actions, civil commotions, fire or other
casualty, or other causes beyond the reasonable control of the party obligated
to perform, performance by that party for a period equal to the period of that
prevention, delay, or stoppage is excused. Tenant's obligation to pay Rent,
however, is not excused by this Paragraph 35.
36. SURRENDER OF PREMISES
Tenant shall, upon expiration or sooner termination of this Lease, surrender the
Premises to Landlord in the same condition as existed on the date Tenant
originally took possession thereof, including, but not limited to, all interior
walls cleaned, all interior painted surfaces repainted in the original color,
all holes in walls repaired, all carpets shampooed and cleaned, and all floors
cleaned, waxed, and free of any Tenant-introduced marking or painting, all to
the reasonable satisfaction of Landlord. Tenant shall remove all of its debris
from the Project. At or before the time of surrender, Tenant shall comply with
the terms of Paragraph 12.A. hereof with respect to Alterations to the Premises
and all other matters addressed in such Paragraph. If the Premises are not so
surrendered at the expiration or sooner termination of this Lease, the
provisions of Paragraph 25 hereof shall apply. All keys to the Premises or any
part thereof shall be surrendered to Landlord upon expiration or sooner
termination of the Term. Tenant shall give written notice to Landlord at least
thirty (30) days prior to vacating the Premises and shall meet with Landlord for
a joint inspection of the Premises at the time of vacating, but nothing
contained herein shall be construed as an extension of the Term or as a consent
by Landlord to any holding over by Tenant. In the event of Tenant's failure to
give such notice or participate in such joint inspection, Landlord's inspection
at or after Tenant's vacating the Premises shall conclusively be deemed correct
for purposes of determining Tenant's responsibility for repairs and restoration.
Any delay caused by Tenant's failure to carry out its obligations under this
Paragraph 36 beyond the term hereof, shall constitute unlawful and illegal
possession of Premises under Paragraph 25 hereof.
37. PARKING
So long as Tenant is occupying the Premises, Tenant and Tenant's Parties shall
have the right to use up to the number of parking spaces, if any, specified in
the Basic Lease Information on an unreserved, nonexclusive, first come, first
served basis, for passenger-size automobiles, in the parking areas in the
Project designated from time to time by Landlord for use in common by tenants of
the Building.
To the extent available, Tenant shall have the right to lease additional
parking spaces on a month-to-month unreserved and nonexclusive basis (unless
otherwise agreed in writing by Landlord), and subject to the then prevailing
parking rates such terms and conditions as Landlord may require.
Tenant shall at all times comply and shall cause all Tenant's Parties and
visitors to comply with all Regulations and any rules and regulations
established from time to time by Landlord relating to parking at the Project,
including any keycard, sticker or other identification or entrance system, and
hours of operation, as applicable.
Landlord shall have no liability for any damage to property or other items
located in the parking areas of the Project, nor for any personal injuries or
death arising out of the use of parking areas in the Project by Tenant or any
Tenant's Parties, unless caused by Landlord's gross negligence or willful
misconduct. Without limiting the foregoing, if Landlord arranges for the
parking areas to be operated by an independent contractor not affiliated with
Landlord, Tenant acknowledges that Landlord shall have no liability for claims
arising through acts or omissions of such independent contractor. In all
events, Tenant agrees to look first to its insurance carrier and to require that
Tenant's Parties look first to their respective insurance carriers for payment
of any losses sustained in connection with any use of the parking areas.
Landlord reserves the right to assign specific spaces, and to reserve spaces for
visitors, small cars, disabled persons or for other tenants or guests, and
Tenant shall not park and shall not allow Tenant's Parties to park in any such
assigned or reserved spaces. Tenant may validate visitor parking by such method
as Landlord may approve, at the validation rate from time to time generally
applicable to visitor parking. Landlord also reserves the right to alter,
modify, relocate or close all or any portion of the parking areas in order to
make repairs or perform maintenance service, or to restripe or renovate the
parking areas, or if required by casualty, condemnation, act of God, Regulations
or for any other reason deemed reasonable by Landlord.
Tenant shall pay to Landlord (or Landlord's parking contractor, if so directed
in writing by Landlord), as Additional Rent hereunder, the monthly charges
established from time to time by Landlord based upon prevailing market rates for
parking in such parking areas (which shall initially be the charge specified in
the Basic Lease Information, as applicable). Such parking charges shall be
payable in advance
Version 10.2 16
with Tenant's payment of Basic Rent. No deductions from the monthly parking
charge shall be made for days on which the Tenant does not use any of the
parking spaces entitled to be used by Tenant.
38. MISCELLANEOUS
A. General. The term "Tenant" or any pronoun used in place thereof shall
indicate and include the masculine or feminine, the singular or plural number,
individuals, firms or corporations, and their respective successors, executors,
administrators and permitted assigns, according to the context hereof.
B. Time. Time is of the essence regarding this Lease and all of its
provisions.
C. Choice of Law. This Lease shall in all respects be governed by the laws of
the State of California.
D. Entire Agreement. This Lease, together with its Exhibits, addenda and
attachments and the Basic Lease Information, contains all the agreements of the
parties hereto and supersedes any previous negotiations. There have been no
representations made by the Landlord or understandings made between the parties
other than those set forth in this Lease and its Exhibits, addenda and
attachments and the Basic Lease Information.
E. Modification. This Lease may not be modified except by a written instrument
signed by the parties hereto. Tenant accepts the area of the Premises as
specified in the Basic Lease Information as the approximate area of the Premises
for all purposes under this Lease, and acknowledges and agrees that no other
definition of the area (rentable, usable or otherwise) of the Premises shall
apply. Tenant shall in no event be entitled to a recalculation of the square
footage of the Premises, rentable, usable or otherwise, and no recalculation, if
made, irrespective of its purpose, shall reduce Tenant's obligations under this
Lease in any manner, including without limitation the amount of Base Rent
payable by Tenant or Tenant's Proportionate Share of the Building and of the
Project.
F. Severability. If, for any reason whatsoever, any of the provisions hereof
shall be unenforceable or ineffective, all of the other provisions shall be and
remain in full force and effect.
G. Recordation. Tenant shall not record this Lease or a short form memorandum
hereof.
H. Examination of Lease. Submission of this Lease to Tenant does not
constitute an option or offer to lease and this Lease is not effective otherwise
until execution and delivery by both Landlord and Tenant.
I. Accord and Satisfaction. No payment by Tenant of a lesser amount than the
total Rent due nor any endorsement on any check or letter accompanying any check
or payment of Rent shall be deemed an accord and satisfaction of full payment of
Rent, and Landlord may accept such payment without prejudice to Landlord's right
to recover the balance of such Rent or to pursue other remedies. All offers by
or on behalf of Tenant of accord and satisfaction are hereby rejected in
advance.
J. Easements. Landlord may grant easements on the Project and dedicate for
public use portions of the Project without Tenant's consent; provided that no
such grant or dedication shall materially interfere with Tenant's Permitted Use
of the Premises. Upon Landlord's request, Tenant shall execute, acknowledge and
deliver to Landlord documents, instruments, maps and plats necessary to
effectuate Tenant's covenants hereunder.
K. Drafting and Determination Presumption. The parties acknowledge that this
Lease has been agreed to by both the parties, that both Landlord and Tenant have
consulted with attorneys with respect to the terms of this Lease and that no
presumption shall be created against Landlord because Landlord drafted this
Lease. Except as otherwise specifically set forth in this Lease, with respect
to any consent, determination or estimation of Landlord required or allowed in
this Lease or requested of Landlord, Landlord's consent, determination or
estimation shall be given or made solely by Landlord in Landlord's good faith
opinion, whether or not objectively reasonable. If Landlord fails to respond to
any request for its consent within the time period, if any, specified in this
Lease, Landlord shall be deemed to have disapproved such request.
L. Exhibits. The Basic Lease Information, and the Exhibits, addenda and
attachments attached hereto are hereby incorporated herein by this reference and
made a part of this Lease as though fully set forth herein.
M. No Light, Air or View Easement. Any diminution or shutting off of light,
air or view by any structure which may be erected on lands adjacent to or in the
vicinity of the Building shall in no way affect this Lease or impose any
liability on Landlord.
N. No Third Party Benefit. This Lease is a contract between Landlord and
Tenant and nothing herein is intended to create any third party benefit.
O. Quiet Enjoyment. Upon payment by Tenant of the Rent, and upon the
observance and performance of all of the other covenants, terms and conditions
on Tenant's part to be observed and performed, Tenant shall peaceably and
quietly hold and enjoy the Premises for the term hereby demised without
hindrance or interruption by Landlord or any other person or persons lawfully or
equitably claiming by, through or under Landlord, subject, nevertheless, to all
of the other terms and conditions of this Lease. Landlord shall not be liable
for any hindrance, interruption, interference or disturbance by other tenants or
third persons, nor shall Tenant be released from any obligations under this
Lease because of such hindrance, interruption, interference or disturbance.
P. Counterparts. This Lease may be executed in any number of counterparts,
each of which shall be deemed an original.
Q. Multiple Parties. If more than one person or entity is named herein as
Tenant, such multiple parties shall have joint and several responsibility to
comply with the terms of this Lease.
R. Prorations. Any Rent or other amounts payable to Landlord by Tenant
hereunder for any fractional month shall be prorated based on a month of 30
days. As used herein, the term "fiscal year" shall mean the calendar year or
such other fiscal year as Landlord may deem appropriate.
39. ADDITIONAL PROVISIONS
A. Option to Renew. Tenant shall, provided this Lease is in full force and
effect and Tenant is not and has not been in default under any of the terms
and conditions of this Lease which remains uncured, have two (2) successive
option(s) to renew this Lease for a term of three (3) year(s) each, for the
Premises on the same terms and conditions set forth in this Lease, except as
modified by the terms, covenants and conditions set forth below:
(1) If Tenant elects to exercise such option, then Tenant shall provide
Landlord with written notice no earlier than the date which is 360
days prior to the expiration of the then current term of this Lease,
but no later than 5:00 p.m. (Pacific
Version 10.2 17
Standard Time) on the date which is 270 days prior to the expiration
of the then current term of this Lease. If Tenant fails to provide
such notice, Tenant shall have no further or additional right to
extend or renew the term of this Lease.
(2) The Base Rent in effect at the expiration of the then current term
of this Lease shall be increased to reflect the current fair market
rental for comparable space in the Building or Project and in other
similar buildings in the same rental market as of the date the
renewal term is to commence, taking into account the specific
provisions of this Lease which will remain constant, and the
Building amenities, location, quality, age, term of lease, tenant
improvements, services provided, and other pertinent items. Such
fair market rental shall be in addition to Tenant's obligation to
pay any Elevator Payment (as defined in Exhibit C attached hereto)
to Landlord.
(3) Landlord shall advise Tenant of the new Base Rent for the Premises
for the applicable renewal term based on Landlord's determination of
fair market rental value, as well as additional terms and conditions
for the renewal term, no later than fifteen (15) days after receipt
of notice of Tenant's exercise of its option to renew.
(4) Landlord and Tenant shall negotiate in good faith to agree on the
fair market rental value of the Premises and other terms and
conditions for each renewal term. If Tenant and Landlord are unable
to agree on a mutually acceptable rental rate for any renewal term
within thirty (30) days after notification by Landlord to Tenant of
Landlord's determination of the new Base Rent for the applicable
renewal term, but in any event no later than the date which is
ninety (90) days prior to the expiration of the then current term,
then on or before such date Landlord and Tenant shall each appoint a
licensed real estate broker with at least ten (10) year's experience
in leasing office space in the area in which the Building is located
to act as arbitrators. The two (2) arbitrators so appointed shall
determine the fair market rental value for the Premises for the
applicable renewal term based on the above criteria and each shall
submit his or her determination of such fair market rental value to
Landlord and Tenant in writing, within thirty (30) days after his or
her appointment.
If the two (2) arbitrators so appointed cannot agree on the fair
market rental value for the applicable renewal term within such 30-
day period, the two (2) arbitrators shall within five (5) days
thereafter appoint a third arbitrator who shall be a licensed real
estate broker with at least ten (10) year's experience in leasing
office space in the area in which the Building is located. The third
arbitrator so appointed shall determine the fair market rental value
for the Premises for the renewal term within thirty (30) days after
appointment, by selecting from the proposals submitted by each of
the first two arbitrators the one that most closely approximates the
third arbitrator's determination of such fair market rental value.
The third arbitrator shall have no right to adopt a compromise or
middle ground or any modification of either of the proposals
submitted by the first two arbitrators. The proposal chosen by the
third arbitrator as most closely approximating the third
arbitrator's determination of the fair market rental value shall
constitute the decision and award of the arbitrators and shall be
final and binding on the parties.
Each party shall pay the fees and expenses of the arbitrator
appointed by such party and one-half (1/2) of the fees and expenses
of the third arbitrator. Notwithstanding the foregoing, in the event
the Base Rent is found to be within fifteen percent (15%) of the
original rate quoted by Landlord, then Tenant shall bear the full
cost of the arbitration process.
If either party fails to appoint an arbitrator, or if either of the
first two arbitrators fails to submit his or her proposal of fair
market rental value to the other party, in each case within the time
periods set forth above, then the decision of the other party's
arbitrator shall be considered final and binding.
(5) Notwithstanding anything to the contrary contained in this
Paragraph, in no event shall the Base Rent for any renewal term be
less than the Base Rent in effect at the expiration of the previous
term plus Operating Expense escalations over the previous years, In
addition, Landlord shall have no obligation to provide or pay for
any tenant improvements or brokerage commissions during any renewal
term.
(6) Tenant's right to exercise any option(s) to renew under this
Paragraph shall be conditioned upon Tenant occupying the entire
Premises and the same not being occupied by any assignee, subtenant
or licensee other than Tenant or its affiliate at the time of
exercise of any option and commencement of the renewal term.
Tenant's exercise of the option to renew shall constitute a
representation by Tenant to Landlord that as of the date of exercise
of the option and the commencement of the renewal term, Tenant does
not intend to seek to assign this Lease in whole or in part, or
sublet all or any portion of the Premises.
(7) Any exercise by Tenant of any option to renew under this Paragraph
shall be irrevocable. If requested by Landlord, Tenant agrees to
execute a lease amendment or, at Landlord's option, a new lease
agreement on Landlord's then standard lease form for the Building,
reflecting the foregoing terms and conditions, prior to the
commencement of the renewal term. The option(s) to renew granted
under this Paragraph is/are not transferable; the parties hereto
acknowledge and agree that they intend that each option to renew
this Lease under this Paragraph shall be "personal" to the specific
Tenant named in this Lease and that in no event will any assignee or
sublessee have any rights to exercise such option(s) to renew.
(8) If more than one renewal option is provided above, the exercise of
each renewal option shall be contingent upon Tenant exercising the
prior renewal option. Only one renewal option may be exercised at a
time. As each renewal option provided for above is exercised, the
number of renewal options remaining to be exercised is reduced by
one and upon exercise of the last remaining renewal option Tenant
shall have no further right to extend the term of this Lease.
B. Right of First Notice. Landlord hereby grants to Tenant a right of
notice with respect to any available space in the Building (the "Right of Notice
Space"). Notwithstanding the foregoing, (i) such Right of Notice of Tenant
shall commence only following the expiration or earlier termination of (A) any
existing lease pertaining to the Right of Notice Space, and (B) as to any Right
of Notice Space which is vacant as of the date of this Lease, the first lease
pertaining to any portion of such Right of Notice Space entered into by Landlord
after the date of this Lease (collectively, the "Superior Leases"), including
any renewal of such existing or future lease, whether or not such renewal is
pursuant to an express written provision in such lease, and regardless of
whether any such renewal is consummated pursuant to a lease amendment or a new
lease, and (ii) such Right of Notice shall be subordinate and secondary to all
currently existing rights of expansion, first refusal, first offer or similar
rights granted to (A) the tenants of the Superior Leases and (B) any other
tenant of the Project (the rights described in items (i) and (ii), above to be
known collectively as "Superior Rights").
Procedure for Offer. Provided Tenant is not in default under any of the terms
or conditions of this Lease which remains uncured, upon Tenant's prior written
request to Landlord, Landlord shall notify Tenant (the "Notice") when Landlord
determines that Landlord shall
Version 10.2 18
commence the marketing of any Right of Notice Space because such space shall
become available for lease to third parties, where no holder of a Superior Right
desires to lease such space. The Notice shall describe the Right of Notice
Space.
40. JURY TRIAL WAIVER
EACH PARTY HERETO (WHICH INCLUDES ANY ASSIGNEE, SUCCESSOR HEIR OR PERSONAL
REPRESENTATIVE OF A PARTY) SHALL NOT SEEK A JURY TRIAL, HEREBY WAIVES TRIAL BY
JURY, AND HEREBY FURTHER WAIVES ANY OBJECTION TO VENUE IN THE COUNTY IN WHICH
THE BUILDING IS LOCATED, AND AGREES AND CONSENTS TO PERSONAL JURISDICTION OF THE
COURTS OF THE STATE IN WHICH THE PROPERTY IS LOCATED, IN ANY ACTION OR
PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY HERETO AGAINST THE OTHER ON ANY
MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, THE
RELATIONSHIP OF LANDLORD AND TENANT, TENANT'S USE OR OCCUPANCY OF THE PREMISES,
OR ANY CLAIM OF INJURY OR DAMAGE, OR THE ENFORCEMENT OF ANY REMEDY UNDER ANY
STATUTE, EMERGENCY OR OTHERWISE, WHETHER ANY OF THE FOREGOING IS BASED ON THIS
LEASE OR ON TORT LAW. EACH PARTY REPRESENTS THAT IT HAS HAD THE OPPORTUNITY TO
CONSULT WITH LEGAL COUNSEL CONCERNING THE EFFECT OF THIS PARAGRAPH 40. THE
PROVISIONS OF THE PARAGRAPH 40 SHALL SURVIVE THE EXPIRATION OR EARLIER
TERMINATION OF THIS LEASE.
IN WITNESS WHEREOF, the parties hereto have executed this lease as of the day
and the year first above written.
LANDLORD
Xxxxxxx Properties, L.P.,
a California limited partnership
By: Xxxxxxx Properties, Inc.,
a Maryland corporation,
its general partner
By:
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Its:
----------------------------------
Date:
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TENANT
GeoCities, a California corporation
By:
------------------------------------
Its:
-----------------------------------
By:
------------------------------------
Its:
-----------------------------------
Date:
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Version 10.2 19
EXHIBIT A
Rules and Regulations
1. Sidewalks, halls, passages, exits, entrances, elevators, escalators and
stairways shall not be obstructed by tenants or used by tenants for any
purpose other than for ingress to and egress from their respective premises.
The halls, passages, exits, entrances, elevators and stairways are not for
the use of the general public and Landlord shall in all cases retain the
right to control and prevent access thereto by all persons whose presence,
in the judgment of Landlord, shall be prejudicial to the safety, character,
reputation and interests of the Building, the Project and its tenants,
provided that nothing herein contained shall be construed to prevent such
access to persons with whom any tenant normally deals in the ordinary course
of such tenant's business unless such persons are engaged in illegal
activities. No tenant, and no employees or invitees of any tenant, shall go
upon the roof of any Building, except as authorized by Landlord. No tenant,
and no employees or invitees of any tenant shall move any common area
furniture without Landlord's consent.
2. No sign, placard, banner, picture, name, advertisement or notice, visible
from the exterior of the Premises or the Building or the common areas of the
Building shall be inscribed, painted, affixed, installed or otherwise
displayed by Tenant either on its Premises or any part of the Building or
Project without the prior written consent of Landlord in Landlord's sole and
absolute discretion. Landlord shall have the right to remove any such sign,
placard, banner, picture, name, advertisement, or notice without notice to
and at the expense of the Tenant, which were installed or displayed in
violation of this rule. If Landlord shall have given such consent to Tenant
at anytime, whether before or after the execution of Tenant's Lease, such
consent shall in no way operate as a waiver or release of any of the
provisions hereof or of the Lease, and shall be deemed to relate only to the
particular sign, placard, banner, picture, name, advertisement or notice so
consented to by Landlord and shall not be construed as dispensing with the
necessity of obtaining the specific written consent of Landlord with respect
to any other such sign, placard, banner, picture, name, advertisement or
notice.
All approved signs or lettering on doors and walls shall be printed,
painted, affixed or inscribed at the expense of Tenant by a person or vendor
approved by Landlord and shall be removed by Tenant at the time of vacancy
at Tenant's expense.
3. The directory of the Building will be provided exclusively for the display
of the name and location of tenants only and Landlord reserves the right to
charge for the use thereof and to exclude any other names therefrom.
4. No curtains, draperies, blinds, shutters, shades, screens or other
coverings, awnings, hangings or decorations shall be attached to, hung or
placed in, or used in connection with, any window or door on the Premises
without the prior written consent of Landlord. In any event with the prior
written consent of Landlord, all such items shall be installed inboard of
Landlord's standard window covering and shall in no way be visible from the
exterior of the Building. All electrical ceiling fixtures hung in offices or
spaces along the perimeter of the Building must be fluorescent or of a
quality, type, design, and bulb color approved by Landlord. No articles
shall be placed or kept on the window xxxxx so as to be visible from the
exterior of the Building. No articles shall be placed against glass
partitions or doors which Landlord considers unsightly from outside Tenant's
Premises.
5. Landlord reserves the right to exclude from the Building and the Project,
between the hours of 6 p.m. and 8 a.m. and at all hours on Saturdays,
Sundays and legal holidays, all persons who are not tenants or their
accompanied guests in the Building. Each tenant shall be responsible for all
persons for whom it allows to enter the Building or the Project and shall be
liable to Landlord for all acts of such persons.
Landlord and its agents shall not be liable for damages for any error
concerning the admission to, or exclusion from, the Building or the Project
of any person.
During the continuance of any invasion, mob, riot, public excitement or
other circumstance rendering such action advisable in Landlord's opinion,
Landlord reserves the right (but shall not be obligated) to prevent access
to the Building and the Project during the continuance of that event by any
means it considers appropriate for the safety of tenants and protection of
the Building, property in the Building and the Project.
6. All cleaning and janitorial services for the Building and the Premises shall
be provided exclusively through Landlord. Except with the written consent of
Landlord, no person or persons other than those approved by Landlord shall
be permitted to enter the Building for the purpose of cleaning the same.
Tenant shall not cause any unnecessary labor by reason of Tenant's
carelessness or indifference in the preservation of good order and
cleanliness of its Premises. Landlord shall in no way be responsible to
Tenant for any loss of property on the Premises, however occurring, or for
any damage done to Tenant's property by the janitor or any other employee or
any other person.
7. Tenant shall see that all doors of its Premises are closed and securely
locked and must observe strict care and caution that all water faucets or
water apparatus, coffee pots or other heat-generating devices are entirely
shut off before Tenant or its employees leave the Premises, and that all
utilities shall likewise be carefully shut off, so as to prevent waste or
damage. Tenant shall be responsible for any damage or injuries sustained by
other tenants or occupants of the Building or Project or by Landlord for
noncompliance with this rule. On multiple-tenancy floors, all tenants shall
keep the door or doors to the Building corridors closed at all times except
for ingress and egress.
8. Tenant shall not use any method of heating or air-conditioning other than
that supplied by Landlord. As more specifically provided in the Tenant's
lease of the Premises, Tenant shall not waste electricity, water or air-
conditioning and agrees to cooperate fully with Landlord to assure the most
effective operation of the Building's heating and air-conditioning, and
shall refrain from attempting to adjust any controls other than room
thermostats installed for Tenant's use.
9. Landlord will furnish Tenant free of charge with two keys to each door in
the Premises. Landlord may make a reasonable charge for any additional keys,
and Tenant shall not make or have made additional keys. Tenant shall not
alter any lock or access device or install a new or additional lock or
access device or bolt on any door of its Premises, without the prior written
consent of Landlord. If Landlord shall give its consent, Tenant shall in
each case furnish Landlord with a key for any such lock. Tenant, upon the
termination of its tenancy, shall deliver to Landlord the keys for all doors
which have been furnished to Tenant, and in the event of loss of any keys so
furnished, shall pay Landlord therefor.
10. The restrooms, toilets, urinals, wash bowls and other apparatus shall not be
used for any purpose other than that for which they were constructed and no
foreign substance of any kind whatsoever shall be thrown into them. The
expense of any breakage, stoppage, or damage resulting from violation of
this rule shall be borne by the tenant who, or whose employees or invitees,
shall have caused the breakage, stoppage, or damage.
11. Tenant shall not use or keep in or on the Premises, the Building or the
Project any kerosene, gasoline, or inflammable or combustible fluid or
material.
12. Tenant shall not use, keep or permit to be used or kept in its Premises any
foul or noxious gas or substance. Tenant shall not allow the Premises to be
occupied or used in a manner offensive or objectionable to Landlord or other
occupants of the Building by reason of noise,
20
odors and/or vibrations or interfere in any way with other tenants or those
having business therein, nor shall any animals or birds be brought or kept
in or about the Premises, the Building, or the Project.
13. No cooking shall be done or permitted by any tenant on the Premises, except
that use by the tenant of Underwriters' Laboratory (UL) approved equipment,
refrigerators and microwave ovens may be used in the Premises for the
preparation of coffee, tea, hot chocolate and similar beverages, storing and
heating food for tenants and their employees shall be permitted. All uses
must be in accordance with all applicable federal, state and city laws,
codes, ordinances, rules and regulations and the Lease.
14. Except with the prior written consent of Landlord, Tenant shall not sell, or
permit the sale, at retail, of newspapers, magazines, periodicals, theater
tickets or any other goods or merchandise in or on the Premises, nor shall
Tenant carry on, or permit or allow any employee or other person to carry
on, the business of stenography, typewriting or any similar business in or
from the Premises for the service or accommodation of occupants of any other
portion of the Building, nor shall the Premises be used for the storage of
merchandise or for manufacturing of any kind, or the business of a public
xxxxxx shop, beauty parlor, nor shall the Premises be used for any illegal,
improper, immoral or objectionable purpose, or any business or activity
other than that specifically provided for in such Tenant's Lease. Tenant
shall not accept hairstyling, barbering, shoeshine, nail, massage or similar
services in the Premises or common areas except as authorized by Landlord.
15. If Tenant requires telegraphic, telephonic, telecommunications, data
processing, burglar alarm or similar services, it shall first obtain, and
comply with, Landlord's instructions in their installation.
16. Landlord will direct electricians as to where and how telephone, telegraph
and electrical wires are to be introduced or installed. No boring or cutting
for wires will be allowed without the prior consent of Landlord. The
location of burglar alarms, telephones, call boxes and other office
equipment affixed to the Premises shall be subject to the written approval
of Landlord.
17. Tenant shall not install any radio or television antenna, satellite dish,
loudspeaker or any other device on the exterior walls or the roof of the
Building, without Landlord's consent. Tenant shall not interfere with radio
or television broadcasting or reception from or in the Building, the Project
or elsewhere.
18. Tenant shall not xxxx, or drive nails, screws or drill into the partitions,
woodwork or drywall or in any way deface the Premises or any part thereof
without Landlord's consent. Tenant may install nails and screws in areas of
the Premises that have been identified for those purposes to Landlord by
Tenant at the time those walls or partitions were installed in the Premises.
Tenant shall not lay linoleum, tile, carpet or any other floor covering so
that the same shall be affixed to the floor of its Premises in any manner
except as approved in writing by Landlord. The expense of repairing any
damage resulting from a violation of this rule or the removal of any floor
covering shall be borne by the tenant by whom, or by whose contractors,
employees or invitees, the damage shall have been caused.
19. No furniture, freight, equipment, materials, supplies, packages, merchandise
or other property will be received in the Building or carried up or down the
elevators except between such hours and in such elevators as shall be
designated by Landlord.
Tenant shall not place a load upon any floor of its Premises which exceeds
the load per square foot which such floor was designed to carry or which is
allowed by law. Landlord shall have the right to prescribe the weight, size
and position of all safes, furniture or other heavy equipment brought into
the Building. Safes or other heavy objects shall, if considered necessary by
Landlord, stand on wood strips of such thickness as determined by Landlord
to be necessary to properly distribute the weight thereof. Landlord will not
be responsible for loss of or damage to any such safe, equipment or property
from any cause, and all damage done to the Building by moving or maintaining
any such safe, equipment or other property shall be repaired at the expense
of Tenant.
Business machines and mechanical equipment belonging to Tenant which cause
noise or vibration that may be transmitted to the structure of the Building
or to any space therein to such a degree as to be objectionable to Landlord
or to any tenants in the Building shall be placed and maintained by Tenant,
at Tenant's expense, on vibration eliminators or other devices sufficient to
eliminate noise or vibration. The persons employed to move such equipment in
or out of the Building must be acceptable to Landlord.
20. Tenant shall not install, maintain or operate upon its Premises any vending
machine without the written consent of Landlord.
21. There shall not be used in any space, or in the public areas of the Project
either by Tenant or others, any hand trucks except those equipped with
rubber tires and side guards or such other material handling equipment as
Landlord may approve. Tenants using hand trucks shall be required to use the
freight elevator, or such elevator as Landlord shall designate. No other
vehicles of any kind shall be brought by Tenant into or kept in or about its
Premises.
22. Each tenant shall store all its trash and garbage within the interior of the
Premises. Tenant shall not place in the trash boxes or receptacles any
personal trash or any material that may not or cannot be disposed of in the
ordinary and customary manner of removing and disposing of trash and garbage
in the city, without violation of any law or ordinance governing such
disposal. All trash, garbage and refuse disposal shall be made only through
entry-ways and elevators provided for such purposes and at such times as
Landlord shall designate. If the Building has implemented a building-wide
recycling program for tenants, Tenant shall use good faith efforts to
participate in said program.
23. Canvassing, soliciting, distribution of handbills or any other written
material and peddling in the Building and the Project are prohibited and
each tenant shall cooperate to prevent the same. No tenant shall make room-
to-room solicitation of business from other tenants in the Building or the
Project, without the written consent of Landlord.
24. Landlord shall have the right, exercisable without notice and without
liability to any tenant, to change the name and address of the Building and
the Project.
25. Landlord reserves the right to exclude or expel from the Project any person
who, in Landlord's judgment, is under the influence of alcohol or drugs or
who commits any act in violation of any of these Rules and Regulations.
26. Without the prior written consent of Landlord, Tenant shall not use the name
of the Building or the Project or any photograph or other likeness of the
Building or the Project in connection with, or in promoting or advertising,
Tenant's business except that Tenant may include the Building's or Project's
name in Tenant's address.
27. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental
agency.
28. Tenant assumes any and all responsibility for protecting its Premises from
theft, robbery and pilferage, which includes keeping doors locked and other
means of entry to the Premises closed.
21
29. The requirements of Tenant will be attended to only upon appropriate
application at the office of the Building by an authorized individual.
Employees of Landlord shall not perform any work or do anything outside of
their regular duties unless under special instructions from Landlord, and no
employees of Landlord will admit any person (tenant or otherwise) to any
office without specific instructions from Landlord.
30. Landlord reserves the right to designate the use of the parking spaces on
the Project. Tenant or Tenant's guests shall park between designated parking
lines only, and shall not occupy two parking spaces with one car. Parking
spaces shall be for passenger vehicles only; no boats, trucks, trailers,
recreational vehicles or other types of vehicles may be parked in the
parking areas (except that trucks may be loaded and unloaded in designated
loading areas). Vehicles in violation of the above shall be subject to tow-
away, at vehicle owner's expense. Vehicles parked on the Project overnight
without prior written consent of the Landlord shall be deemed abandoned and
shall be subject to tow-away at vehicle owner's expense. No tenant of the
Building shall park in visitor or reserved parking areas. Any tenant found
parking in such designated visitor or reserved parking areas shall be
subject to tow-away at vehicle owner's expense. The parking areas shall not
be used to provide car wash, oil changes, detailing, automotive repair or
other services unless otherwise approved or furnished by Landlord.
31. No smoking of any kind shall be permitted anywhere within the Building,
including, without limitation, the Premises and those areas immediately
adjacent to the entrances and exits to the Building, or any other area as
Landlord elects. Smoking in the Project is only permitted in smoking areas
identified by Landlord, which may be relocated from time to time.
32. If the Building furnishes common area conferences rooms for tenant usage,
Landlord shall have the right to control each tenant's usage of the
conference rooms, including limiting tenant usage so that the rooms are
equally available to all tenants in the Building. Any common area amenities
or facilities shall be provided from time to time at Landlord's discretion.
33. Tenant shall not swap or exchange building keys or cardkeys with other
employees or tenants in the Building or the Project.
34. Tenant shall be responsible for the observance of all of the foregoing Rules
and Regulations by Tenant's employees, agents, clients, customers, invitees
and guests.
35. These Rules and Regulations are in addition to, and shall not be construed
to in any way modify, alter or amend, in whole or in part, the terms,
covenants, agreements and conditions of any lease of any premises in the
Project.
36. Landlord may waive any one or more of these Rules and Regulations for the
benefit of any particular tenant or tenants, but no such waiver by Landlord
shall be construed as a waiver of such Rules and Regulations in favor of any
other tenant or tenants, nor prevent Landlord from thereafter enforcing any
such Rules and Regulations against any or all tenants of the Building.
37. Landlord reserves the right to make such other and reasonable rules and
regulations as in its judgment may from time to time be needed for safety
and security, for care and cleanliness of the Building and the Project and
for the preservation of good order therein. Tenant agrees to abide by all
such Rules and Regulations herein stated and any additional rules and
regulations which are adopted.
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EXHIBIT C
OFFICE LEASE IMPROVEMENT AGREEMENT
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This Office Lease Improvement Agreement ("Improvement Agreement") sets
forth the terms and conditions relating to construction of the initial tenant
improvements described in the Plans to be prepared and approved as provided
below (the "Tenant Improvements") in the Premises. Capitalized terms used but
not otherwise defined herein shall have the meanings set forth in the Lease (the
"Lease") to which this Improvement Agreement is attached and forms a part.
1. Base Building Work. The "Base Building Work" described on Schedule 1 to this
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Exhibit C, if any, has been or will be performed by Landlord at Landlord's sole
cost and expense. To the extent the performance of the Tenant Improvements
triggers the requirement by any local or regulatory agency that an elevator be
installed in the Building to service the mezzanine level, Landlord shall
furthermore be responsible, at its expense, for the installation of such an
elevator to service the mezzanine level of the Building. Tenant shall be
responsible for the payment to Landlord, on the first day of each month during
the lease term, of an amount equal to the Elevator Payment (defined below). The
term 'Elevator Payment' shall mean all of the costs incurred by Landlord in
connection with the installation of such elevator, amortized on a monthly basis
over a fifteen (15) year period, with interest accrued thereon at twelve percent
(12%) per annum. If this Lease is canceled or terminated for any reason prior to
the expiration of the initial Lease Term or any applicable renewal term, the
unamortized Elevator Payment (for the initial Lease Term or any applicable
renewal term) shall become immediately due and payable to Landlord.
2. Plans and Specifications.
------------------------
A. Landlord shall retain the services of the space planner/architect
designated by Landlord (the "Space Planner") to prepare a detailed space plan
(the "Space Plan") mutually satisfactory to Landlord and Tenant for the
construction of the Tenant Improvements in the Premises. Tenant shall approve or
disapprove the Space Plan and any proposed revisions thereto in writing within
three (3) business days after receipt thereof, which approval shall not be
unreasonably withheld.
B. Based on the approved Space Plan, Landlord shall cause the Space Planner
and Landlord's engineering consultant to prepare detailed plans, specifications
and working drawings, including engineering drawings, for the construction of
the Tenant Improvements (the "Plans"). Landlord and Tenant shall diligently
pursue the preparation of the Plans. Tenant shall approve or disapprove the
Plans and any proposed revisions thereto, including the estimated cost of the
Tenant Improvements, in writing within three (3) business days after receipt
thereof. If Tenant fails to approve or disapprove the Space Plan or Plans or any
revisions thereto within the time limits specified herein, Tenant shall be
deemed to have approved the same. Landlord and Tenant shall use diligent efforts
to cause the final Plans and the cost estimate to be prepared and approved no
later than thirty (30) days after the execution of the Lease.
C. Notwithstanding Landlord's preparation, review and approval of the Space
Plan and the Plans and any revisions thereto, Landlord shall have no
responsibility or liability whatsoever for any errors or omissions contained in
the Space Plan or Plans, or to verify dimensions or conditions, or for the
quality, design or compliance with applicable Regulation of any improvements
described therein or constructed in accordance therewith except to the extent
that Landlord's participation is required in order to bring an action against
the Space Planner for its error and omissions, in which case Landlord shall
bring such action at Tenant's request (at no cost or expense to Landlord).
Landlord hereby assigns to Tenant all warranties and guarantees by the Space
Planner or the contractor who constructs the Tenant Improvements relating to the
Tenant Improvements and to the extent not expressly provided in the appropriate
contract, shall obtain the Space Planner's and contractor's written consent to
such assignment, and Tenant hereby waives all claims against Landlord relating
to, or arising out of the design or construction of, the Tenant Improvements.
3. Specifications for Standard Tenant Improvements.
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A. Specifications and quantities of standard building components which will
comprise and be used in the construction of the Tenant Improvements
("Standards") are set forth in Schedule 2 to this Exhibit C. As used herein,
"Standards" or "Building Standards" shall mean the standards for a particular
item selected from time to time by Landlord for the Building, including those
set forth on Schedule 2 of this Exhibit C, or such other standards of equal or
better quality as may be mutually agreed between Landlord and Tenant in writing.
B. No deviations from the Standards are permitted.
4. Tenant Improvement Cost.
-----------------------
A. The cost of the Tenant Improvements shall be paid for by Tenant,
including, without limitation, the cost of: Standards; space plans and studies;
architectural and engineering fees; permits, approvals and other governmental
fees; labor, material, equipment and supplies; construction fees and other
amounts payable to contractors or subcontractors; taxes; off-site improvements;
remediation and preparation of the Premises for construction of the Tenant
Improvements; taxes; filing and recording fees; premiums for insurance and
bonds; attorneys' fees; financing costs; and all other costs expended or to be
expended in the construction of the Tenant Improvements, including those costs
incurred for construction of elements of the Tenant Improvements in the
Premises, which construction was performed by Landlord prior to the execution of
the Lease or for materials comprising the Tenant Improvements which were
purchased by Landlord prior to the execution of the Lease; and an administration
fee of five percent (5%) of the total cost of the Tenant Improvements.
B. Provided Tenant is not in default under the Lease, including this
Improvement Agreement, Landlord shall contribute a one-time tenant improvement
allowance not to exceed $237,290.00 ($10.00 per square foot) ("Tenant
Improvement Allowance") to be credited by Landlord toward the cost of the
initial Tenant Improvements. If the cost of the Tenant Improvements exceeds the
Tenant Improvement Allowance, Tenant shall pay Landlord such excess cost within
three (3) business days after Landlord's notice to Tenant of such excess cost.
No credit shall be given to Tenant if the cost of the Tenant Improvements is
less than the Tenant Improvement Allowance.
C. At Tenant's request and subject to the terms of this Section 4(C),
Landlord shall expend an additional amount up to $237,290.00 (hereinafter, the
"Additional Amount") over and above the Tenant Improvement Allowance to pay for
that portion of the cost of the Tenant Improvements, if any, that exceeds the
Tenant Improvement Allowance. In the event that the Tenant Improvement Allowance
plus the Additional Amount exceeds the cost of the Tenant Improvements, Tenant
shall not be entitled to such excess or to a credit against future rent due and
owing under the Lease in the amount of such excess, but rather said excess funds
shall belong to and be the sole property of Landlord. Tenant agrees to reimburse
Landlord for the portion of the cost of the Tenant Improvements paid for by
Landlord hereunder, but only to the extent said costs exceed the Tenant
Improvement Allowance ("Landlord's Costs"), as follows: concurrently with its
payments to Landlord of monthly Base Rent, Tenant shall pay to Landlord an
amount equal to the Monthly Amortized Landlord's Costs (defined below). The term
"Monthly Amortized Landlord's Costs" shall mean Landlord's Costs, amortized over
the initial five (5) years of the Term on a monthly basis, with interest
accruing on Landlord's Costs at twelve percent (12%) per
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annum. If the Lease shall be canceled or terminated for any reason prior to the
expiration of the full initial Term, the unamortized Landlord's Costs shall
become immediately due and payable to Landlord.
D. If the cost of the Tenant Improvements increases after the
Tenant's approval of the Plans due to the requirements of any governmental
agency or applicable Regulation or any other reason, Tenant shall pay Landlord
the amount of such increase within three (3) business days after notice from
Landlord of such increase.
E. If Tenant requests any change(s) in the Plans after approval of the
estimate of the cost of the Tenant Improvements and any such requested changes
are approved by Landlord in writing in Landlord's sole discretion, Landlord
shall advise Tenant promptly of any cost increases and/or delays such approved
change(s) will cause in the construction of the Tenant Improvements. Tenant
shall approve or disapprove any or all such change(s) within three (3) business
days after notice from Landlord of such cost increases and/or delays. To the
extent Tenant disapproves any such cost increase and/or delay attributable
thereto, Landlord shall have the right, in its sole discretion, to disapprove
Tenant's request for any changes to the approved Plans. If the cost of the
Tenant Improvements increases due to any changes in the Plan(s) requested by
Tenant, Tenant shall pay Landlord the amount of such increase within three (3)
business days after notice from Landlord of such increase and Tenant's approval
thereof in accordance with this Paragraph 4.4.
5. Construction of Tenant Improvements.
-----------------------------------
A. Upon Tenant's approval of the Plans including the estimate of the cost
of the Tenant Improvements and Landlord's receipt of payment of any such
estimated cost exceeding the amount of the Tenant Improvement Allowance,
Landlord shall cause a contractor, mutually acceptable to Landlord and Tenant
and identified through a competitive bid process, to proceed to secure a
building permit and commence construction of the Tenant Improvements provided
that Tenant shall cooperate with Landlord in executing permit applications and
performing other actions reasonably necessary to enable Landlord to obtain any
required permits or certificates of occupancy; and provided further that the
Building has in Landlord's discretion reached the stage of construction where it
is appropriate to commence construction of the Tenant Improvements in the
Premises.
B. Without limiting the provisions of Paragraph 35 of the Lease, Landlord
shall not be liable for any direct or indirect damages suffered by Tenant as a
result of delays in construction beyond Landlord's reasonable control,
including, but not limited to, delays due to strikes or unavailability of
materials or labor, or delays caused by Tenant (including delays by the Space
Planner, the contractor or anyone else performing services on behalf of Landlord
or Tenant).
C. If any work is to be performed on the Premises by Tenant or Tenant's
contractor or agents:
i) Such work shall proceed upon Landlord's written approval,
which approval shall not be unreasonably withheld or delayed, of Tenant's
contractor, public liability and property damage insurance carried by Tenant's
contractor, and detailed plans and specifications for such work, shall be at
Tenant's sole cost and expense and shall further be subject to the provisions of
Paragraphs 12 and 27 of the Lease.
ii) All work shall be done in conformity with a valid building
permit when required, a copy of which shall be furnished to Landlord before such
work is commenced, and in any case, all such work shall be performed in
accordance with all applicable Regulations. Notwithstanding any failure by
Landlord to object to any such work, Landlord shall have no responsibility for
Tenant's failure to comply with all applicable Regulations.
iii) If required by Landlord or any lender of Landlord, all work
by Tenant or Tenant's contractor or agents shall be done with union labor in
accordance with all union labor agreements applicable to the trades being
employed.
iv) All work by Tenant or Tenant's contractor or agents shall be
scheduled through Landlord.
v) Tenant or Tenant's contractor or agents shall arrange for
necessary utility, hoisting and elevator service with Landlord's contractor and
shall pay such reasonable charges for such services as may be charged by
Tenant's or Landlord's contractor.
vi) Tenant's entry to the Premises for any purpose, including,
without limitation, inspection or performance of Tenant construction by Tenant's
agents, prior to the date Tenant's obligation to pay rent commences shall be
subject to all the terms and conditions of the Lease except the payment of Rent.
Tenant's entry shall mean entry by Tenant, its officers, contractors, licensees,
agents, servants, employees, guests, invitees, or visitors.
vii) Tenant shall promptly reimburse Landlord upon demand for any
reasonable expense actually incurred by the Landlord by reason of faulty work
done by Tenant or its contractors or by reason of any delays caused by such
work, or by reason of inadequate clean-up.
6. Completion and Rental Commencement Date.
---------------------------------------
A. Tenant's obligation to pay Rent under the Lease shall commence on the
applicable date described in Paragraph 2 of the Lease. However:
i) If Tenant delays in preparing or approving the Space Plans
or the Plans, or fails to approve the estimate of the cost of the Tenant
Improvements or any other matter requiring Tenant's approval, or to pay the
excess cost of Tenant Improvements, in each case within the time limits
specified herein; or
ii) If the construction period is extended because Tenant
requests any changes in construction, or modifies the approved Plans or if the
same do not comply with applicable Regulations; or
iii) If Landlord is otherwise delayed in the construction of the
Tenant Improvements for any act or omission of or breach by Tenant or anyone
performing services on behalf of Tenant or on account of any work performed on
the Premises by Tenant or Tenant's contractors or agents,
then the date described in Paragraph 2 of the Lease shall be deemed to be
accelerated by the total number of days of Tenant delays described in (a)
through (c) above (each, a "Tenant Delay"), calculated in accordance with the
provisions of Paragraph 6.B. below.
B. If the Term of the Lease has not already commenced pursuant to the
provisions of Paragraph 2 of the Lease and substantial completion of the Tenant
Improvements has been delayed on account of any Tenant Delays, then upon actual
substantial completion of the Tenant Improvements (as defined in Paragraph 2 of
the Lease), Landlord shall notify Tenant in writing of the date substantial
completion of the Tenant Improvements would have occurred but for such Tenant
Delays, and such date shall thereafter be deemed to be the Term Commencement
Date for all purposes under the Lease. Tenant shall pay to Landlord, within
three (3) business days after receipt of such written notice (which notice shall
include a summary of Tenant Delays), the per diem Base Rent times the
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number of days between the date the Term Commencement Date would have otherwise
occurred but for the Tenant Delays (as determined by the Space Planner or
Landlord's contractor), and the date of actual substantial completion of the
Tenant Improvements.
C. Promptly after substantial completion of the Tenant Improvements,
Landlord shall give notice to Tenant and Tenant shall conduct an inspection of
the Premises with a representative of Landlord and develop with such
representative of Landlord a punchlist of items of the Tenant Improvements that
are not complete or that require corrections. Upon receipt of such punchlist,
Landlord shall proceed diligently to remedy such items at Landlord's cost and
expense provided such items are part of the Tenant Improvements to be
constructed by Landlord hereunder and are otherwise consistent with Landlord's
obligations under this Improvement Agreement and provided Tenant has fully paid
Landlord for the cost of the Tenant Improvements exceeding the Tenant
Improvement Allowance (with any dispute between Landlord and Tenant pertaining
thereto to be resolved by the Space Planner or Landlord's general contractor).
Substantial completion shall not be delayed notwithstanding delivery of any such
punchlist.
D. A default under this Improvement Agreement shall constitute a default
under the Lease, and the parties shall be entitled to all rights and remedies
under the Lease in the event of a default hereunder by the other party
(notwithstanding that the Term thereof has not commenced).
E. Without limiting the "as-is" provisions of the Lease, except for the
Tenant Improvements, if any, to be constructed by Landlord pursuant to this
Improvement Agreement, Tenant accepts the Premises in its "as-is" condition and
acknowledges that it has had an opportunity to inspect the Premises prior to
signing the Lease.
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SCHEDULE 1
TO EXHIBIT C
BASE BUILDING WORK
------------------
1. Install new roof membrane.
2. Restore twelve (12) existing rooftop air conditioning equipment to
operational status, excluding distribution system and thermostatic controls
within the Premises.
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SCHEDULE 2
TO EXHIBIT C
BUILDING STANDARDS
------------------
The following constitutes the Building Standard tenant improvements
("Standards") in the quantities specified:
(to be provided)
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